G.R. No.

177131               June 7, 2011

BOY SCOUTS OF THE PHILIPPINES, Petitioner,

vs.
COMMISSION ON AUDIT, Respondent.

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. 99-0115 on August 19, 1999 ("the COA Resolution"), with the
subject "Defining the Commission’s 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 letter9 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 Commission’s 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 BSP’s 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 case’s 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 letter12 dated July 3, 2000, Director Crescencio S. Sunico, Corporate Audit Officer (CAO) I of the COA, furnished the
BSP with a copy of the Memorandum13 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 Court’s 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 BSP’s 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 BSP’s 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 BSP’s 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 COA’s 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 COA’s 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 Audit22 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 BSP’s corporate identity in the same way that the government’s privatization program changed PAL’s, 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 BSP’s 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 petitioner’s third argument, BSP’s 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 government’s policy to stimulate patriotic sentiments and love of country, the BSP’s 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 BSP’s funds may not bar the subsequent exercise of its audit
jurisdiction.

The BSP filed its Reply33 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 COA’s 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 COA’s audit jurisdiction.

Thereafter, considering the BSP’s 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 Court’s resolution, the parties filed their respective Comments.

In its Comment35 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 COA’s 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
BSP’s 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 latter’s 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 Comment42 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 COA’s 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:

Petitioner’s 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 petitioner’s 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. Petitioner’s 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 BSP’s 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 COA’s 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 BSP’s 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 bill’s
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 BSP’s 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 shouldn’t it be, this rhetorical question, shouldn’t it be
better for this organization to seek a mandate from, let’s 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 that’s a rhetorical question, they may or they may not answer, ano. I don’t 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 don’t 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, don’t take that as an objection, I’m not objecting. I’m 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 don’t 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, that’s 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 BSP’s 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 dissent’s 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 COA’s Jurisdiction

Regarding the COA’s 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.lawph!1

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 COA’s 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 don’t 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 there’s no money put in the organization, but how about
donated funds to this organization? What are the remedies of the donors of how will they know how their money are being
spent?

MR. ESCUDERO: May I answer, Mr. Chairman?

THE CHAIRMAN: Yes, gentleman.

MR. ESCUDERO: The Boy Scouts of the Philippines has an external auditor and by the charter we are required to submit
a financial report at the end of each year to the National Executive Board. So all the funds donated or otherwise is
accounted for at the end of the year by our external auditor. In this case the SGV.63

Historically, therefore, the BSP had been subjected to government audit in so far as public funds had been infused
thereto. However, this practice should not preclude the exercise of the audit jurisdiction of COA, clearly set forth under the
Constitution, which pertinently provides:

Section 2. (1) The Commission on Audit shall have the power, authority, and duty to examine, audit, and settle all
accounts pertaining to the revenue and receipts of, and expenditures or uses of funds and property, owned or held in trust
by, or pertaining to, the Government, or any of its subdivisions, agencies, or instrumentalities, including government-
owned and controlled corporations with original charters, and on a post-audit basis: (a) constitutional bodies, commissions
and offices that have been granted fiscal autonomy under this Constitution; (b) autonomous state colleges and
universities; (c) other government-owned or controlled corporations with original charters and their subsidiaries; and (d)
such non-governmental entities receiving subsidy or equity, directly or indirectly, from or through the Government, which
are required by law of the granting institution to submit to such audit as a condition of subsidy or equity. x x x. 64

Since the BSP, under its amended charter, continues to be a public corporation or a government instrumentality, we come
to the inevitable conclusion that it is subject to the exercise by the COA of its audit jurisdiction in the manner consistent
with the provisions of the BSP Charter.

WHEREFORE, premises considered, the instant petition for prohibition is DISMISSED.

SO ORDERED.
G.R. No. 80391 February 28, 1989

SULTAN ALIMBUSAR P. LIMBONA, petitioner,

vs.
CONTE MANGELIN, SALIC ALI, SALINDATO ALI, PILIMPINAS CONDING, ACMAD TOMAWIS, GERRY TOMAWIS,
JESUS ORTIZ, ANTONIO DELA FUENTE, DIEGO PALOMARES, JR., RAUL DAGALANGIT, and BIMBO
SINSUAT, respondents.

Ambrosio Padilla, Mempin & Reyes Law Offices for petitioner petitioner.

Makabangkit B. Lanto for respondents.

SARMIENTO,  J.:

The acts of the Sangguniang Pampook of Region XII are assailed in this petition. The antecedent facts are as follows:

1. On September 24, 1986, petitioner Sultan Alimbusar Limbona was appointed as a member of the
Sangguniang Pampook, Regional Autonomous Government, Region XII, representing Lanao del Sur.

2. On March 12, 1987 petitioner was elected Speaker of the Regional Legislative Assembly or Batasang
Pampook of Central Mindanao (Assembly for brevity).

3. Said Assembly is composed of eighteen (18) members. Two of said members, respondents Acmad
Tomawis and Pakil Dagalangit, filed on March 23, 1987 with the Commission on Elections their respective
certificates of candidacy in the May 11, 1987 congressional elections for the district of Lanao del Sur but
they later withdrew from the aforesaid election and thereafter resumed again their positions as members
of the Assembly.

4. On October 21, 1987 Congressman Datu Guimid Matalam, Chairman of the Committee on Muslim
Affairs of the House of Representatives, invited Mr. Xavier Razul, Pampook Speaker of Region XI,
Zamboanga City and the petitioner in his capacity as Speaker of the Assembly, Region XII, in a letter
which reads:

The Committee on Muslim Affairs well undertake consultations and dialogues with local
government officials, civic, religious organizations and traditional leaders on the recent
and present political developments and other issues affecting Regions IX and XII.

The result of the conference, consultations and dialogues would hopefully chart the
autonomous governments of the two regions as envisioned and may prod the President
to constitute immediately the Regional Consultative Commission as mandated by the
Commission.

You are requested to invite some members of the Pampook Assembly of your respective
assembly on November 1 to 15, 1987, with venue at the Congress of the Philippines.
Your presence, unstinted support and cooperation is (sic) indispensable.

5. Consistent with the said invitation, petitioner sent a telegram to Acting Secretary Johnny Alimbuyao of
the Assembly to wire all Assemblymen that there shall be no session in November as "our presence in
the house committee hearing of Congress take (sic) precedence over any pending business in batasang
pampook ... ."

6. In compliance with the aforesaid instruction of the petitioner, Acting Secretary Alimbuyao sent to the
members of the Assembly the following telegram:
 TRANSMITTING FOR YOUR INFORMATION AND GUIDANCE TELEGRAM RECEIVED
FROM SPEAKER LIMBONA QUOTE CONGRESSMAN JIMMY MATALAM CHAIRMAN
OF THE HOUSE COMMITTEE ON MUSLIM AFFAIRS REQUESTED ME TO ASSIST
SAID COMMITTEE IN THE DISCUSSION OF THE PROPOSED AUTONOMY ORGANIC
NOV. 1ST TO 15. HENCE WERE ALL ASSEMBLYMEN THAT THERE SHALL BE NO
SESSION IN NOVEMBER AS OUR PRESENCE IN THE HOUSE COMMITTEE
HEARING OF CONGRESS TAKE PRECEDENCE OVER ANY PENDING BUSINESS IN
BATASANG PAMPOOK OF MATALAM FOLLOWS UNQUOTE REGARDS.

7. On November 2, 1987, the Assembly held session in defiance of petitioner's advice, with the following
assemblymen present:

1. Sali, Salic

2. Conding, Pilipinas (sic)

3. Dagalangit, Rakil

4. Dela Fuente, Antonio

5. Mangelen, Conte

6. Ortiz, Jesus

7. Palomares, Diego

8. Sinsuat, Bimbo

9. Tomawis, Acmad

10. Tomawis, Jerry

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 Speaker vacant, all Assemblymen in attendance voted in
the affirmative, hence, the chair declared said seat of the Speaker vacant. 8. On November 5, 1987, the
session of the Assembly resumed with the following Assemblymen present:

1. Mangelen Conte-Presiding Officer

2. Ali Salic

3. Ali Salindatu

4. Aratuc, Malik

5. Cajelo, Rene

6. Conding, Pilipinas (sic)

7. Dagalangit, Rakil

8. Dela Fuente, Antonio

9. Ortiz, Jesus

10 Palomares, Diego
 11. Quijano, Jesus

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.
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.1âwphi1 Under our system of government, policy issues are within the domain of the political branches
of government and of the people themselves as the repository of all state power. (Valmonte v. Belmonte, Jr., 170
SCRA 256).

On the issue of "monopoly," however, the Constitution provides that:

Sec. 19. The State shall regulate or prohibit monopolies when public interest so requires. No combinations in
restraint of trade or unfair competition shall be allowed. (Art. XII, National Economy and Patrimony)

It should be noted that, as the provision is worded, monopolies are not necessarily prohibited by the Constitution. The
state must still decide whether public interest demands that monopolies be regulated or prohibited. Again, this is a matter
of policy for the Legislature to decide.

On petitioners' allegation that P.D. 1869 violates Sections 11 (Personality Dignity) 12 (Family) and 13 (Role of Youth) of
Article II; Section 13 (Social Justice) of Article XIII and Section 2 (Educational Values) of Article XIV of the 1987
Constitution, suffice it to state also that these are merely statements of principles and, policies. As such, they are basically
not self-executing, meaning a law should be passed by Congress to clearly define and effectuate such principles.

In general, therefore, the 1935 provisions were not intended to be self-executing principles ready for enforcement
through the courts. They were rather directives addressed to the executive and the legislature. If the executive
and the legislature failed to heed the directives of the articles the available remedy was not judicial or political.
The electorate could express their displeasure with the failure of the executive and the legislature through the
language of the ballot. (Bernas, Vol. II, p. 2)

Every law has in its favor the presumption of constitutionality (Yu Cong Eng v. Trinidad, 47 Phil. 387; Salas v. Jarencio, 48
SCRA 734; Peralta v. Comelec, 82 SCRA 30; Abbas v. Comelec, 179 SCRA 287). Therefore, for PD 1869 to be nullified,
it must be shown that there is a clear and unequivocal breach of the Constitution, not merely a doubtful and equivocal
one. In other words, the grounds for nullity must be clear and beyond reasonable doubt. (Peralta v. Comelec, supra)
Those who petition this Court to declare a law, or parts thereof, unconstitutional must clearly establish the basis for such a
declaration. Otherwise, their petition must fail. Based on the grounds raised by petitioners to challenge the constitutionality
of P.D. 1869, the Court finds that petitioners have failed to overcome the presumption. The dismissal of this petition is
therefore, inevitable. But as to whether P.D. 1869 remains a wise legislation considering the issues of "morality,
monopoly, trend to free enterprise, privatization as well as the state principles on social justice, role of youth and
educational values" being raised, is up for Congress to determine.

As this Court held in Citizens' Alliance for Consumer Protection v. Energy Regulatory Board, 162 SCRA 521 —

Presidential Decree No. 1956, as amended by Executive Order No. 137 has, in any case, in its favor the
presumption of validity and constitutionality which petitioners Valmonte and the KMU have not overturned.
Petitioners have not undertaken to identify the provisions in the Constitution which they claim to have been
violated by that statute. This Court, however, is not compelled to speculate and to imagine how the assailed
legislation may possibly offend some provision of the Constitution. The Court notes, further, in this respect that
petitioners have in the main put in question the wisdom, justice and expediency of the establishment of the OPSF,
issues which are not properly addressed to this Court and which this Court may not constitutionally pass upon.
Those issues should be addressed rather to the political departments of government: the President and the
Congress.

Parenthetically, We wish to state that gambling is generally immoral, and this is precisely so when the gambling resorted
to is excessive. This excessiveness necessarily depends not only on the financial resources of the gambler and his family
but also on his mental, social, and spiritual outlook on life. However, the mere fact that some persons may have lost their
material fortunes, mental control, physical health, or even their lives does not necessarily mean that the same are directly
attributable to gambling. Gambling may have been the antecedent, but certainly not necessarily the cause. For the same
consequences could have been preceded by an overdose of food, drink, exercise, work, and even sex.

WHEREFORE, the petition is DISMISSED for lack of merit.

SO ORDERED.
G.R. No. 129093            August 30, 2001

HON. JOSE D. LINA, JR., SANGGUNIANG PANLALAWIGAN OF LAGUNA, and HON. CALIXTO
CATAQUIZ, petitioners,
vs.
HON. FRANCISCO DIZON PAÑO 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 Paño, 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:

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.
G.R. No. 79956               January 29, 1990

CORDILLERA BROAD COALITION, petitioner,

vs.
COMMISSION ON AUDIT, respondent.

G.R. No. 82217               January 29, 1990

LILIA YARANON and BONA BAUTISTA, assisted by their spouses, BRAULIO D. YARANON and DEMETRIO D.
BAUTISTA, JR., respectively; JAMES BRETT and SINAI C. HAMADA, petitioners,
vs.
THE COMMISSION ON AUDIT, HON. CATALINO MACARAIG, Executive Secretary, HON. VICENTE JAYME,
Secretary of Finance, HON. GUILLERMO N. CARAGUE, Secretary of Budget and Management, and HON.
ROSALINA S. CAJUCOM, OIC National Treasurer, respondents.

CORTES, J.:

In these consolidated petitions, the constitutionality of Executive Order No. 220, dated July 15, 1987, which created the
(Cordillera Administrative Region, is assailed on the primary ground that it pre-empts the enactment of an organic act by
the Congress and the creation of' the autonomous region in the Cordilleras conditional on the approval of the act through
a plebiscite.

Relative to the creation of autonomous regions, the constitution, in Article X, provides:

AUTONOMOUS REGIONS

Sec. 15. There shall be created autonomous regions in Muslim Mindanao and in the Cordilleras consisting of
provinces, cities, municipalities, and geographical areas sharing common and distinctive historical and cultural
heritage, economic and social structures, and other relevant characteristics within the framework of this
Constitution and the national sovereignty as well as territorial integrity of the Republic of the Philippines.

SEC. 16. The President shall exercise general supervision over autonomous regions to ensure that laws are
faithfully executed.

Sec. 17. All powers, functions, and responsibilities not granted Constitution or by law to the autonomous regions
shall be vested in the National Government.

Sec. 18. The Congress shall enact an organic act for each autonomous region with the assistance and
participation of the regional consultative commission composed of representatives appointed by the President
from a list of nominees from multi-sectoral bodies. The organic act shall define the basic structure of government
for the region consisting of the executive department and legislative assembly, both of which shall be elective and
representative of the constituent political units. The organic acts shall likewise provide for special courts with
personal, family and property law jurisdiction consistent with the provisions of this Constitution and national laws.

The creation of the autonomous region shall be effective when approved by majority of the votes cast by the
constituent units in a plebiscite called for the purpose, provided that only provinces, cities, and geographic areas
voting favorably in such plebiscite shall be included in the autonomous region.

Sec. 19. The first Congress elected under this Constitution shall, within eighteen months from the time of
organization of both Houses, pass the organic acts for the autonomous regions in Muslim Mindanao and the
Cordilleras.

Sec. 20. Within its territorial jurisdiction and subject to the provisions of this Constitution and national laws, the
organic act of autonomous regions shall provide for legislative powers over:
 (1) Administrative organization;

(2) Creation of sources of revenues;

(3) Ancestral domain and natural resources;

(4) Personal, family and property relations;

(5) Regional urban and rural planning development;

(6) Economic, social and tourism development ;

(7) Educational policies;

(8) Preservation and development of the cultural heritage; and

(9) Such other matters as may be authorized by law for the promotion of the general welfare of the people of the
region.

Sec. 21. The preservation of peace and order within the regions shall be the responsibility of the local police
agencies which shall be organized, maintained, supervised, and utilized in accordance with applicable laws. The
defense and security of the regions shall be the responsibility of the National Government.

A study of E.O. No. 220 would be incomplete Without reference to its historical background.

In April 1986, just after the EDSA Revolution, Fr. Conrado M. Balweg, S.V.D., broke off on ideological grounds
from the Communist Party of the Philippines (CPP) and its military arm the New People's Army. (NPA).

After President Aquino was installed into office by People Power, she advocated a policy of national reconciliation.
She called on all revolutionary forces to a peace dialogue. The CPLA heeded this call of the President. After the
preliminary negotiations, President Aquino and some members of her Cabinet flew to Mt. Data in the Mountain
Province on September 13, 1986 and signed with Fr. Conrado M. Balweg (As Commander of the CPLA and Ama
Mario Yag-ao (as President of Cordillera Bodong Administration, the civil government of the CPLA a ceasefire
agreement that signified the cessation of hostilities (WHEREAS No. 7, E.O. 220).

The parties arrived at an agreement in principle: the Cordillera people shall not undertake their demands through
armed and violent struggle but by peaceful means, such as political negotiations. The negotiations shall be a
continuing process until the demands of the Cordillera people shall have been substantially granted.

On March 27, 1987, Ambassador Pelaez [Acting as Chief Negotiator of the government], in pursuance of the
September 13, 1986 agreement, flew to the Mansion House, Baguio City, and signed with Fr. Balweg (as
Chairman of the Cordillera panel) a joint agreement, paragraphs 2 and 3 of which state:

Par. 2- Work together in drafting an Executive Order to create a preparatory body that could perform policy-
making and administrative functions and undertake consultations and studies leading to a draft organic act for the
Cordilleras.

Par. 3- Have representatives from the Cordillera panel join the study group of the R.P. Panel in drafting the
Executive Order.

Pursuant to the above joint agreement, E.O. 220 was drafted by a panel of the Philippine government and of the
representatives of the Cordillera people.

On July 15, 1987, President Corazon C. Aquino signed the joint draft into law, known now as E.O. 220. [Rejoinder
G.R. No. 82217, pp. 2-3].

Executive Order No. 220, issued by the President in the exercise of her legislative powers under Art. XVIII, sec. 6 of the
1987 Constitution, created the Cordillera Administrative Region (CAR) , which covers the provinces of Abra, Benguet,
Ifugao, Kalinga-Apayao and Mountain Province and the City of Baguio [secs. 1 and 2]. It was created to accelerate
economic and social growth in the region and to prepare for the establishment of the autonomous region in the Cordilleras
[sec. 3]. Its main function is to coordinate the planning and implementation of programs and services in the region,
particularly, to coordinate with the local government units as well as with the executive departments of the National
Government in the supervision of field offices and in identifying, planning, monitoring, and accepting projects and activities
in the region [sec. 5]. It shall also monitor the implementation of all ongoing national and local government projects in the
region [sec. 20]. The CAR shall have a Cordillera Regional Assembly as a policy-formulating body and a Cordillera
Executive Board as an implementing arm [secs. 7, 8 and 10]. The CAR and the Assembly and Executive Board shall exist
until such time as the autonomous regional government is established and organized [sec. 17].

Explaining the rationale for the issuance of E.O. No. 220, its last "Whereas" clause provides:

WHEREAS, pending the convening of the first Congress and the enactment of the organic act for a Cordillera
autonomous region, there is an urgent need, in the interest of national security and public order, for the President
to reorganize immediately the existing administrative structure in the Cordilleras to suit it to the existing political
realities therein and the Government's legitimate concerns in the areas, without attempting to pre-empt the
constitutional duty of the first Congress to undertake the creation of an autonomous region on a permanent basis.

During the pendency of this case, Republic Act No. 6766 entitled "An Act Providing for an Organic Act for the Cordillera
Autonomous Region," was enacted and signed into law. The Act recognizes the CAR and the offices and agencies
created under E.O. No. 220 and its transitory nature is reinforced in Art. XXI of R.A. No. 6766, to wit:

SEC. 3. The Cordillera Executive Board, the Cordillera Region Assembly as well as all offices and agencies
created under Execute Order No. 220 shall cease to exist immediately upon the ratification of this Organic Act.

All funds, properties and assets of the Cordillera Executive Board and the Cordillera Regional Assembly shall
automatically be transferred to the Cordillera Autonomous Government.

It is well-settled in our jurisprudence that respect for the inherent and stated powers and prerogatives of the law-making
body, as well as faithful adherence to the principle of separation of powers, require that its enactment be accorded the
presumption of constitutionality. Thus, in any challenge to the constitutionality of a statute, the burden of clearly and
unequivocally proving its unconstitutionality always rests upon the challenger. Conversely, failure to so prove will
necessarily defeat the challenge.

We shall be guided by these principles in considering these consolidated petitions.

In these cases, petitioners principally argue that by issuing E.O. No. 220 the President, in the exercise of her legislative
powers prior to the convening of the first Congress under the 1987 Constitution, has virtually pre-empted Congress from
its mandated task of enacting an organic act and created an autonomous region in the Cordilleras. We have carefully
studied the Constitution and E.O. No. 220 and we have come to the conclusion that petitioners' assertions are unfounded.
Events subsequent to the issuance of E.O. No. 220 also bear out this conclusion.

1. A reading of E.O. No. 220 will easily reveal that what it actually envisions is the consolidation and coordination of the
delivery of services of line departments and agencies of the National Government in the areas covered by the
administrative region as a step preparatory to the grant of autonomy to the Cordilleras. It does not create the autonomous
region contemplated in the Constitution. It merely provides for transitory measures in anticipation of the enactment of an
organic act and the creation of an autonomous region. In short, it prepares the ground for autonomy. This does not
necessarily conflict with the provisions of the Constitution on autonomous regions, as we shall show later.

The Constitution outlines a complex procedure for the creation of an autonomous region in the Cordilleras. A regional
consultative commission shall first be created. The President shall then appoint the members of a regional consultative
commission from a list of nominees from multi-sectoral bodies. The commission shall assist the Congress in preparing the
organic act for the autonomous region. The organic act shall be passed by the first Congress under the 1987 Constitution
within eighteen months from the time of its organization and enacted into law. Thereafter there shall be held a plebiscite
for the approval of the organic act [Art. X, sec. 18]. Only then, after its approval in the plebiscite, shall the autonomous
region be created.
Undoubtedly, all of these will take time. The President, in 1987 still exercising legislative powers, as the first Congress had
not yet convened, saw it fit to provide for some measures to address the urgent needs of the Cordilleras in the meantime
that the organic act had not yet been passed and the autonomous region created. These measures we find in E.O. No.
220. The steps taken by the President are obviously perceived by petitioners, particularly petitioner Yaranon who views
E.O. No. 220 as capitulation to the Cordillera People's Liberation Army (CPLA) of Balweg, as unsound, but the Court
cannot inquire into the wisdom of the measures taken by the President, We can only inquire into whether or not the
measures violate the Constitution. But as we have seen earlier, they do not.

2. Moreover, the transitory nature of the CAR does not necessarily mean that it is, as petitioner Cordillera Broad Coalition
asserts, "the interim autonomous region in the Cordilleras" [Petition, G.R. No. 79956, p. 25].

The Constitution provides for a basic structure of government in the autonomous region composed of an elective
executive and legislature and special courts with personal, family and property law jurisdiction [Art. X, sec. 18]. Using this
as a guide, we find that E.O. No. 220 did not establish an autonomous regional government. It created a region, covering
a specified area, for administrative purposes with the main objective of coordinating the planning and implementation of
programs and services [secs. 2 and 5]. To determine policy, it created a representative assembly, to convene yearly only
for a five-day regular session, tasked with, among others, identifying priority projects and development programs [sec. 9].
To serve as an implementing body, it created the Cordillera Executive Board composed of the Mayor of Baguio City,
provincial governors and representatives of the Cordillera Bodong Administration, ethno-linguistic groups and non-
governmental organizations as regular members and all regional directors of the line departments of the National
Government as ex-officio members and headed by an Executive Director [secs. 10 and 11]. The bodies created by E.O.
No. 220 do not supplant the existing local governmental structure, nor are they autonomous government agencies. They
merely constitute the mechanism for an "umbrella" that brings together the existing local governments, the agencies of the
National Government, the ethno-linguistic groups or tribes, and non-governmental organizations in a concerted effort to
spur development in the Cordilleras.

The creation of the CAR for purposes of administrative coordination is underscored by the mandate of E.O. No. 220 for
the President and appropriate national departments and agencies to make available sources of funds for priority
development programs and projects recommended by the CAR [sec. 21] and the power given to the President to call
upon the appropriate executive departments and agencies of the National Government to assist the CAR [sec. 24].

3. Subsequent to the issuance of E.O. No. 220, the Congress, after it was convened, enacted Republic Act No. 6658
which created the Cordillera Regional Consultative Commission. The President then appointed its members. The
commission prepared a draft organic act which became the basis for the deliberations of the Senate and the House of
Representatives. The result was Republic Act No. 6766, the organic act for the Cordillera autonomous region, which was
signed into law on October 23, 1989. A plebiscite for the approval of the organic act, to be conducted shortly, shall
complete the process outlined in the Constitution.

In the meantime, E.O. No. 220 had been in force and effect for more than two years and we find that, despite E.O. No.
220, the autonomous region in the Cordilleras is still to be created, showing the lack of basis of petitioners' assertion.
Events have shown that petitioners' fear that E.O. No. 220 was a "shortcut" for the creation of the autonomous region in
the Cordilleras was totally unfounded.

Clearly, petitioners' principal challenge has failed.

II

A collateral issue raised by petitioners is the nature of the CAR: whether or not it is a territorial and political subdivision.
The Constitution provides in Article X:

Section 1. The territorial and political subdivisions of the Republic of the Philippines are the provinces, cities,
municipalities, and barangays. There shall be autonomous regions in Muslim Mindanao and the Cordilleras as
hereinafter provided.

x x x           x x x          x x x

Sec. 10. No province, city, municipality, or barangay may be created, divided, merged, abolished, or its boundary
substantially altered, except in accordance with the criteria established in the local government code and subject
to approval by a majority of the votes cast in a plebiscite in the political units directly affected.
We have seen earlier that the CAR is not the autonomous region in the Cordilleras contemplated by the Constitution,
Thus, we now address petitioners' assertion that E. 0. No. 220 contravenes the Constitution by creating a new territorial
and political subdivision.

After carefully considering the provisions of E.O. No. 220, we find that it did not create a new territorial and political
subdivision or merge existing ones into a larger subdivision.

1. Firstly, the CAR is not a public corporation or a territorial and political subdivision. It does not have a separate juridical
personality, unlike provinces, cities and municipalities. Neither is it vested with the powers that are normally granted to
public corporations, e.g. the power to sue and be sued, the power to own and dispose of property, the power to create its
own sources of revenue, etc. As stated earlier, the CAR was created primarily to coordinate the planning and
implementation of programs and services in the covered areas.

The creation of administrative regions for the purpose of expediting the delivery of services is nothing new.1âwphi1 The
Integrated Reorganization Plan of 1972, which was made as part of the law of the land by virtue of Presidential Decree
No. 1, established eleven (11) regions, later increased to twelve (12), with definite regional centers and required
departments and agencies of the Executive Branch of the National Government to set up field offices therein. The
functions of the regional offices to be established pursuant to the Reorganization Plan are: (1) to implement laws, policies,
plans, programs, rules and regulations of the department or agency in the regional areas; (2) to provide economical,
efficient and effective service to the people in the area; (3) to coordinate with regional offices of other departments,
bureaus and agencies in the area; (4) to coordinate with local government units in the area; and (5) to perform such other
functions as may be provided by law. [See Part II, chap. III, art. 1, of the Reorganization Plan].

We can readily see that the CAR is in the same genre as the administrative regions created under the Reorganization
Plan, albeit under E.O. No. 220 the operation of the CAR requires the participation not only of the line departments and
agencies of the National Government but also the local governments, ethno-linguistic groups and non-governmental
organizations in bringing about the desired objectives and the appropriation of funds solely for that purpose.

2. Then, considering the control and supervision exercised by the President over the CAR and the offices created under
E.O. No. 220, and considering further the indispensable participation of the line departments of the National Government,
the CAR may be considered more than anything else as a regional coordinating agency of the National Government,
similar to the regional development councils which the President may create under the Constitution [Art. X, sec. 14].
These councils are "composed of local government officials, regional heads of departments and other government offices,
and representatives from non-governmental organizations within the region for purposes of administrative decentralization
to strengthen the autonomy of the units therein and to accelerate the economic and social growth and development of the
units in the region." [Ibid.] In this wise, the CAR may be considered as a more sophisticated version of the regional
development council.

III

Finally, petitioners incidentally argue that the creation of the CAR contravened the constitutional guarantee of the local
autonomy for the provinces (Abra, Benguet, Ifugao, Kalinga-Apayao and Mountain Province) and city (Baguio City) which
compose the CAR.

We find first a need to clear up petitioners' apparent misconception of the concept of local autonomy.

It must be clarified that the constitutional guarantee of local autonomy in the Constitution [Art. X, sec. 2] refers to
the administrative autonomy of local government units or, cast in more technical language, the decentralization of
government authority [Villegas v. Subido, G.R. No. L-31004, January 8, 1971, 37 SCRA 1]. Local autonomy is not unique
to the 1987 Constitution, it being guaranteed also under the 1973 Constitution [Art. II, sec. 10]. And while there was no
express guarantee under the 1935 Constitution, the Congress enacted the Local Autonomy Act (R.A. No. 2264) and the
Decentralization Act (R.A. No. 5185), which ushered the irreversible march towards further enlargement of local autonomy
in the country [Villegas v. Subido, supra.]

On the other hand, the creation of autonomous regions in Muslim Mindanao and the Cordilleras, which is peculiar to the
1987 Constitution contemplates the grant of political  autonomy and not just administrative autonomy these regions. Thus,
the provision in the Constitution for an autonomous regional government with a basic structure consisting of an executive
department and a legislative assembly and special courts with personal, family and property law jurisdiction in each of the
autonomous regions [Art. X, sec. 18].
As we have said earlier, the CAR is a mere transitory coordinating agency that would prepare the stage for political
autonomy for the Cordilleras. It fills in the resulting gap in the process of transforming a group of adjacent territorial and
political subdivisions already enjoying local or administrative autonomy into an autonomous region vested with political
autonomy.

Anent petitioners' objection, we note the obvious failure to show how the creation of the CAR has actually diminished the
local autonomy of the covered provinces and city. It cannot be over-emphasized that pure speculation and a resort to
probabilities are insufficient to cause the invalidation of E.O. No. 220.

WHEREFORE, the petitions are DISMISSED for lack of merit.

SO ORDERED.
G.R. No. 158088 July 6, 2005

SENATOR AQUILINO PIMENTEL, JR., REP. ETTA ROSALES, PHILIPPINE COALITION FOR THE ESTABLISHMENT
OF THE INTERNATIONAL CRIMINAL COURT, TASK FORCE DETAINEES OF THE PHILIPPINES, FAMILIES OF
VICTIMS OF INVOLUNTARY DISAPPEARANCES, BIANCA HACINTHA R. ROQUE, HARRISON JACOB R. ROQUE,
AHMED PAGLINAWAN, RON P. SALO,* LEAVIDES G. DOMINGO, EDGARDO CARLO VISTAN, NOEL
VILLAROMAN, CELESTE CEMBRANO, LIZA ABIERA, JAIME ARROYO, MARWIL LLASOS, CRISTINA ATENDIDO,
ISRAFEL FAGELA, and ROMEL BAGARES, Petitioners,
vs.
OFFICE OF THE EXECUTIVE SECRETARY, HON. ALBERTO ROMULO, and the DEPARTMENT OF FOREIGN
AFFAIRS, represented by HON. BLAS OPLE, Respondents.

DECISION

PUNO J.:

This is a petition for mandamus filed by petitioners to compel the

Office of the Executive Secretary and the Department of Foreign Affairs to transmit the signed copy of the Rome Statute
of the International Criminal Court to the Senate of the Philippines for its concurrence in accordance with Section 21,
Article VII of the 1987 Constitution.

The Rome Statute established the International Criminal Court which "shall have the power to exercise its jurisdiction over
persons for the most serious crimes of international concern xxx and shall be complementary to the national criminal
jurisdictions."1 Its jurisdiction covers the crime of genocide, crimes against humanity, war crimes and the crime of
aggression as defined in the Statute.2 The Statute was opened for signature by all states in Rome on July 17, 1998 and
had remained open for signature until December 31, 2000 at the United Nations Headquarters in New York. The
Philippines signed the Statute on December 28, 2000 through Charge d’ Affairs Enrique A. Manalo of the Philippine
Mission to the United Nations.3 Its provisions, however, require that it be subject to ratification, acceptance or approval of
the signatory states.4

Petitioners filed the instant petition to compel the respondents — the Office of the Executive Secretary and the
Department of Foreign Affairs — to transmit the signed text of the treaty to the Senate of the Philippines for ratification.

It is the theory of the petitioners that ratification of a treaty, under both domestic law and international law, is a function of
the Senate. Hence, it is the duty of the executive department to transmit the signed copy of the Rome Statute to the
Senate to allow it to exercise its discretion with respect to ratification of treaties. Moreover, petitioners submit that the
Philippines has a ministerial duty to ratify the Rome Statute under treaty law and customary international law. Petitioners
invoke the Vienna Convention on the Law of Treaties enjoining the states to refrain from acts which would defeat the
object and purpose of a treaty when they have signed the treaty prior to ratification unless they have made their intention
clear not to become parties to the treaty.5

The Office of the Solicitor General, commenting for the respondents, questioned the standing of the petitioners to file the
instant suit. It also contended that the petition at bar violates the rule on hierarchy of courts. On the substantive issue
raised by petitioners, respondents argue that the executive department has no duty to transmit the Rome Statute to the
Senate for concurrence.

A petition for mandamus may be filed 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. 6 We have held
that to be given due course, a petition for mandamus must have been instituted by a party aggrieved by the alleged
inaction of any tribunal, corporation, board or person which unlawfully excludes said party from the enjoyment of a legal
right. The petitioner in every case must therefore be an aggrieved party in the sense that he possesses a clear legal right
to be enforced and a direct interest in the duty or act to be performed.7 The Court will exercise its power of judicial review
only if the case is brought before it by a party who has the legal standing to raise the constitutional or legal question.
"Legal standing" means a personal and substantial interest in the case such that the party has sustained or will sustain
direct injury as a result of the government act that is being challenged. The term "interest" is material interest, an interest
in issue and to be affected by the decree, as distinguished from mere interest in the question involved, or a mere
incidental interest.8
The petition at bar was filed by Senator Aquilino Pimentel, Jr. who asserts his legal standing to file the suit as member of
the Senate; Congresswoman Loretta Ann Rosales, a member of the House of Representatives and Chairperson of its
Committee on Human Rights; the Philippine Coalition for the Establishment of the International Criminal Court which is
composed of individuals and corporate entities dedicated to the Philippine ratification of the Rome Statute; the Task Force
Detainees of the Philippines, a juridical entity with the avowed purpose of promoting the cause of human rights and
human rights victims in the country; the Families of Victims of Involuntary Disappearances, a juridical entity duly organized
and existing pursuant to Philippine Laws with the avowed purpose of promoting the cause of families and victims of
human rights violations in the country; Bianca Hacintha Roque and Harrison Jacob Roque, aged two (2) and one (1),
respectively, at the time of filing of the instant petition, and suing under the doctrine of inter-generational rights enunciated
in the case of Oposa vs. Factoran, Jr.;9 and a group of fifth year working law students from the University of the
Philippines College of Law who are suing as taxpayers.

The question in 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.10

We find that among the petitioners, only Senator Pimentel has the legal standing to file the instant suit. The other
petitioners maintain their standing as advocates and defenders of human rights, and as citizens of the country. They have
not shown, however, that they have sustained or will sustain a direct injury from the non-transmittal of the signed text of
the Rome Statute to the Senate. Their contention that they will be deprived of their remedies for the protection and
enforcement of their rights does not persuade. The Rome Statute is intended to complement national criminal laws and
courts. Sufficient remedies are available under our national laws to protect our citizens against human rights violations
and petitioners can always seek redress for any abuse in our domestic courts.

As regards Senator Pimentel, it has been held that "to the extent the powers of Congress are impaired, so is the power of
each member thereof, since his office confers a right to participate in the exercise of the powers of that institution." 11 Thus,
legislators have the standing to maintain inviolate the prerogatives, powers and privileges vested by the Constitution in
their office and are allowed to sue to question the validity of any official action which they claim infringes their prerogatives
as legislators. The petition at bar invokes the power of the Senate to grant or withhold its concurrence to a treaty entered
into by the executive branch, in this case, the Rome Statute. The petition seeks to order the executive branch to transmit
the copy of the treaty to the Senate to allow it to exercise such authority. Senator Pimentel, as member of the institution,
certainly has the legal standing to assert such authority of the Senate.

We now go to the substantive issue.

The core issue in this petition for mandamus is whether the Executive Secretary and the Department of Foreign Affairs
have a ministerial duty to transmit to the Senate the copy of the Rome Statute signed by a member of the Philippine
Mission to the United Nations even without the signature of the President.

We rule in the negative.

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.12 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.13 In the realm of treaty-making, the President has
the sole authority to negotiate with other states.

Nonetheless, while the President has the sole authority to negotiate and enter into treaties, the Constitution provides a
limitation to his power by requiring the concurrence of 2/3 of all the members of the Senate for the validity of the treaty
entered into by him. Section 21, Article VII of the 1987 Constitution provides that "no treaty or international agreement
shall be valid and effective unless concurred in by at least two-thirds of all the Members of the Senate." The 1935 and the
1973 Constitution also required the concurrence by the legislature to the treaties entered into by the executive. Section 10
(7), Article VII of the 1935 Constitution provided:

Sec. 10. (7) The President shall have the power, with the concurrence of two-thirds of all the Members of the Senate, to
make treaties xxx.

Section 14 (1) Article VIII of the 1973 Constitution stated:

Sec. 14. (1) Except as otherwise provided in this Constitution, no treaty shall be valid and effective unless concurred in by
a majority of all the Members of the Batasang Pambansa.

The participation of the legislative branch in the treaty-making process was deemed essential to provide a check on the
executive in the field of foreign relations.14 By requiring the concurrence of the legislature in the treaties entered into by the
President, the Constitution ensures a healthy system of checks and balance necessary in the nation’s pursuit of political
maturity and growth.15

In filing this petition, the petitioners interpret Section 21, Article VII of the 1987 Constitution to mean that the power to
ratify treaties belongs to the Senate.

We disagree.

Justice Isagani Cruz, in his book on International Law, describes the treaty-making process in this wise:

The usual steps in the treaty-making process are: negotiation, signature, ratification, and exchange of the instruments of
ratification. The treaty may then be submitted for registration and publication under the U.N. Charter, although this step is
not essential to the validity of the agreement as between the parties.

Negotiation may be undertaken directly by the head of state but he now usually assigns this task to his authorized
representatives. These representatives are provided with credentials known as full powers, which they exhibit to the other
negotiators at the start of the formal discussions. It is standard practice for one of the parties to submit a draft of the
proposed treaty which, together with the counter-proposals, becomes the basis of the subsequent negotiations. The
negotiations may be brief or protracted, depending on the issues involved, and may even "collapse" in case the parties
are unable to come to an agreement on the points under consideration.

If and when the negotiators finally decide on the terms of the treaty, the same is opened for signature. This step is
primarily intended as a means of authenticating the instrument and for the purpose of symbolizing the good faith of the
parties; but, significantly, it does not indicate the final consent of the state in cases where ratification of the treaty
is required. The document is ordinarily signed in accordance with the alternat, that is, each of the several negotiators is
allowed to sign first on the copy which he will bring home to his own state.

Ratification, which is the next step, is the formal act by which a state confirms and accepts the provisions of a treaty
concluded by its representatives. The purpose of ratification is to enable the contracting states to examine the
treaty more closely and to give them an opportunity to refuse to be bound by it should they find it inimical to their
interests. It is for this reason that most treaties are made subject to the scrutiny and consent of a department of
the government other than that which negotiated them.

xxx

The last step in the treaty-making process is the exchange of the instruments of ratification, which usually also signifies
the effectivity of the treaty unless a different date has been agreed upon by the parties. Where ratification is dispensed
with and no effectivity clause is embodied in the treaty, the instrument is deemed effective upon its signature. 16 [emphasis
supplied]

Petitioners’ arguments equate the signing of the treaty by the Philippine representative with ratification. It should be
underscored that the signing of the treaty and the ratification are two separate and distinct steps in the treaty-making
process. As earlier discussed, the signature is primarily intended as a means of authenticating the instrument and as a
symbol of the good faith of the parties. It is usually performed by the state’s authorized representative in the diplomatic
mission. Ratification, on the other hand, is the formal act by which a state confirms and accepts the provisions of a treaty
concluded by its representative. It is generally held to be an executive act, undertaken by the head of the state or of the
government.17 Thus, Executive Order No. 459 issued by President Fidel V. Ramos on November 25, 1997 provides the
guidelines in the negotiation of international agreements and its ratification. It mandates that after the treaty has been
signed by the Philippine representative, the same shall be transmitted to the Department of Foreign Affairs. The
Department of Foreign Affairs shall then prepare the ratification papers and forward the signed copy of the treaty to the
President for ratification. After the President has ratified the treaty, the Department of Foreign Affairs shall submit the
same to the Senate for concurrence. Upon receipt of the concurrence of the Senate, the Department of Foreign Affairs
shall comply with the provisions of the treaty to render it effective. Section 7 of Executive Order No. 459 reads:
Sec. 7. Domestic Requirements for the Entry into Force of a Treaty or an Executive Agreement. — The domestic
requirements for the entry into force of a treaty or an executive agreement, or any amendment thereto, shall be as follows:

A. Executive Agreements.

i. All executive agreements shall be transmitted to the Department of Foreign Affairs after their signing for the preparation
of the ratification papers. The transmittal shall include the highlights of the agreements and the benefits which will accrue
to the Philippines arising from them.

ii. The Department of Foreign Affairs, pursuant to the endorsement by the concerned agency, shall transmit the
agreements to the President of the Philippines for his ratification. The original signed instrument of ratification shall then
be returned to the Department of Foreign Affairs for appropriate action.

B. Treaties.

i. All treaties, regardless of their designation, shall comply with the requirements provided in sub-paragraph[s] 1 and 2,
item A (Executive Agreements) of this Section. In addition, the Department of Foreign Affairs shall submit the treaties to
the Senate of the Philippines for concurrence in the ratification by the President. A certified true copy of the treaties, in
such numbers as may be required by the Senate, together with a certified true copy of the ratification instrument, shall
accompany the submission of the treaties to the Senate.

ii. Upon receipt of the concurrence by the Senate, the Department of Foreign Affairs shall comply with the provision of the
treaties in effecting their entry into force.

Petitioners’ submission that the Philippines is bound under treaty law and international law to ratify the treaty which it has
signed is without basis. The signature does not signify the final consent of the state to the treaty. It is the ratification that
binds the state to the provisions thereof. In fact, the Rome Statute itself requires that the signature of the representatives
of the states be subject to ratification, acceptance or approval of the signatory states. Ratification is the act by which the
provisions of a treaty are formally confirmed and approved by a State. By ratifying a treaty signed in its behalf, a state
expresses its willingness to be bound by the provisions of such treaty. After the treaty is signed by the state’s
representative, the President, being accountable to the people, is burdened with the responsibility and the duty to carefully
study the contents of the treaty and ensure that they are not inimical to the interest of the state and its people. Thus, the
President has the discretion even after the signing of the treaty by the Philippine representative whether or not to ratify the
same. The Vienna Convention on the Law of Treaties does not contemplate to defeat or even restrain this power of the
head of states. If that were so, the requirement of ratification of treaties would be pointless and futile. It has been held that
a state has no legal or even moral duty to ratify a treaty which has been signed by its plenipotentiaries. 18 There is no legal
obligation to ratify a treaty, but it goes without saying that the refusal must be based on substantial grounds and not on
superficial or whimsical reasons. Otherwise, the other state would be justified in taking offense.19

It should be emphasized that under our Constitution, the power to ratify is vested in the President, subject to the
concurrence of the Senate. The role of the Senate, however, is limited only to giving or withholding its consent, or
concurrence, to the ratification.20 Hence, it is within the authority of the President to refuse to submit a treaty to the Senate
or, having secured its consent for its ratification, refuse to ratify it. 21 Although the refusal of a state to ratify a treaty which
has been signed in its behalf is a serious step that should not be taken lightly,22 such decision is within the competence of
the President alone, which cannot be encroached by this Court via a writ of mandamus. This Court has no jurisdiction
over actions seeking to enjoin the President in the performance of his official duties.23 The Court, therefore, cannot issue
the writ of mandamus prayed for by the petitioners as it is beyond its jurisdiction to compel the executive branch of the
government to transmit the signed text of Rome Statute to the Senate.

IN VIEW WHEREOF, the petition is DISMISSED.

SO ORDERED.
G.R. Nos. 120865-71 December 7, 1995

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,

vs.
COURT OF APPEALS; HON. JUDGE HERCULANO TECH, PRESIDING JUDGE, BRANCH 70, REGIONAL TRIAL
COURT OF BINANGONAN RIZAL; FLEET DEVELOPMENT, INC. and CARLITO ARROYO; THE MUNICIPALITY OF
BINANGONAN and/or MAYOR ISIDRO B. PACIS, respondents.

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,

vs.
COURT OF APPEALS; HON. JUDGE AURELIO C. TRAMPE, PRESIDING JUDGE, BRANCH 163, REGIONAL TRIAL
COURT OF PASIG; MANILA MARINE LIFE BUSINESS RESOURCES, INC. represented by, MR. TOBIAS REYNALD
M. TIANGCO; MUNICIPALITY OF TAGUIG, METRO MANILA and/or MAYOR RICARDO D. PAPA, JR., respondents.

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,

vs.
COURT OF APPEALS; HON. JUDGE ALEJANDRO A. MARQUEZ, PRESIDING JUDGE, BRANCH 79, REGIONAL
TRIAL COURT OF MORONG, RIZAL; GREENFIELD VENTURES INDUSTRIAL DEVELOPMENT CORPORATION and
R. J. ORION DEVELOPMENT CORPORATION; MUNICIPALITY OF JALA-JALA and/or MAYOR WALFREDO M. DE
LA VEGA, respondents.

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,

vs.
COURT OF APPEALS; HON. JUDGE MANUEL S. PADOLINA, PRESIDING JUDGE, BRANCH 162, REGIONAL TRIAL
COURT OF PASIG, METRO MANILA; IRMA FISHING & TRADING CORP.; ARTM FISHING CORP.; BDR
CORPORATION, MIRT CORPORATION and TRIM CORPORATION; MUNICIPALITY OF BINANGONAN and/or
MAYOR ISIDRO B. PACIS, respondents.

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,

vs.
COURT OF APPEALS; HON. JUDGE ARTURO A. MARAVE, PRESIDING JUDGE, BRANCH 78, REGIONAL TRIAL
COURT OF MORONG, RIZAL; BLUE LAGOON FISHING CORP. and ALCRIS CHICKEN GROWERS, INC.;
MUNICIPALITY OF JALA-JALA and/or MAYOR WALFREDO M. DE LA VEGA, respondents.

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,

vs.
COURT OF APPEALS; HON. JUDGE ARTURO A. MARAVE, PRESIDING JUDGE, BRANCH 78, REGIONAL TRIAL
COURT OF MORONG, RIZAL; AGP FISH VENTURES, INC., represented by its PRESIDENT ALFONSO PUYAT;
MUNICIPALITY OF JALA-JALA and/or MAYOR WALFREDO M. DE LA VEGA, respondents.

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,

vs.
COURT OF APPEALS; HON. JUDGE EUGENIO S. LABITORIA, PRESIDING JUDGE, BRANCH 161, REGIONAL
TRIAL COURT OF PASIG, METRO MANILA; SEA MAR TRADING CO. INC.; EASTERN LAGOON FISHING CORP.;
MINAMAR FISHING CORP.; MUNICIPALITY OF BINANGONAN and/or MAYOR ISIDRO B. PACIS, respondents.

HERMOSISIMA, JR., J.:

It is difficult for a man, scavenging on the garbage dump created by affluence and profligate consumption and
extravagance of the rich or fishing in the murky waters of the Pasig River and the Laguna Lake or making a clearing in the
forest so that he can produce food for his family, to understand why protecting birds, fish, and trees is more important than
protecting him and keeping his family alive.

How do we strike a balance between environmental protection, on the one hand, and the individual personal interests of
people, on the other?
Towards environmental protection and ecology, navigational safety, and sustainable development, Republic Act No. 4850
created the "Laguna Lake Development Authority." This Government Agency is supposed to carry out and effectuate the
aforesaid declared policy, so as to accelerate the development and balanced growth of the Laguna Lake area and the
surrounding provinces, cities and towns, in the act clearly named, within the context of the national and regional plans and
policies for social and economic development.

Presidential Decree No. 813 of former President Ferdinand E. Marcos amended certain sections of Republic Act No. 4850
because of the concern for the rapid expansion of Metropolitan Manila, the suburbs and the lakeshore towns of Laguna de
Bay, combined with current and prospective uses of the lake for municipal-industrial water supply, irrigation, fisheries, and
the like. Concern on the part of the Government and the general public over: — the environment impact of development
on the water quality and ecology of the lake and its related river systems; the inflow of polluted water from the Pasig River,
industrial, domestic and agricultural wastes from developed areas around the lake; the increasing urbanization which
induced the deterioration of the lake, since water quality studies have shown that the lake will deteriorate further if steps
are not taken to check the same; and the floods in Metropolitan Manila area and the lakeshore towns which will influence
the hydraulic system of Laguna de Bay, since any scheme of controlling the floods will necessarily involve the lake and its
river systems, — likewise gave impetus to the creation of the Authority.

Section 1 of Republic Act No. 4850 was amended to read as follows:

Sec. 1. Declaration of Policy. It is hereby declared to be the national policy to promote, and accelerate the
development and balanced growth of the Laguna Lake area and the surrounding provinces, cities and
towns hereinafter referred to as the region, within the context of the national and regional plans and
policies for social and economic development and to carry out the development of the Laguna Lake
region with due regard and adequate provisions for environmental management and control, preservation
of the quality of human life and ecological systems, and the prevention of undue ecological disturbances,
deterioration and pollution.1

Special powers of the Authority, pertinent to the issues in this case, include:

Sec. 3. Section 4 of the same Act is hereby further amended by adding thereto seven new paragraphs to
be known as paragraphs (j), (k), (l), (m), (n), (o), and (p) which shall read as follows:

xxx xxx xxx

(j) The provisions of existing laws to the contrary notwithstanding, to engage in fish
production and other aqua-culture projects in Laguna de Bay and other bodies of water
within its jurisdiction and in pursuance thereof to conduct studies and make experiments,
whenever necessary, with the collaboration and assistance of the Bureau of Fisheries
and Aquatic Resources, with the end in view of improving present techniques and
practices. Provided, that until modified, altered or amended by the procedure provided in
the following sub-paragraph, the present laws, rules and permits or authorizations remain
in force;

(k) For the purpose of effectively regulating and monitoring activities in Laguna de
Bay, the Authority shall have exclusive jurisdiction to issue new permit for the use of the
lake waters for any projects or activities in or affecting the said lake including navigation,
construction, and operation of fishpens, fish enclosures, fish corrals and the like, and to
impose necessary safeguards for lake quality control and management and to collect
necessary fees for said activities and projects: Provided, That the fees collected for
fisheries may be shared between the Authority and other government agencies and
political sub-divisions in such proportion as may be determined by the President of the
Philippines upon recommendation of the Authority's Board: Provided, further, That the
Authority's Board may determine new areas of fishery development or activities which it
may place under the supervision of the Bureau of Fisheries and Aquatic Resources
taking into account the overall development plans and programs for Laguna de Bay and
related bodies of water: Provided, finally, That the Authority shall subject to the approval
of the President of the Philippines promulgate such rules and regulations which shall
govern fisheries development activities in Laguna de Bay which shall take into
consideration among others the following: socio-economic amelioration of bonafide
resident fishermen whether individually or collectively in the form of cooperatives,
 lakeshore town development, a master plan for fishpen construction and operation,
communal fishing ground for lake shore town residents, and preference to lake shore
town residents in hiring laborer for fishery projects;

(l) To require the cities and municipalities embraced within the region to pass appropriate
zoning ordinances and other regulatory measures necessary to carry out the objectives
of the Authority and enforce the same with the assistance of the Authority;

(m) The provisions of existing laws to the contrary notwithstanding, to exercise water
rights over public waters within the Laguna de Bay region whenever necessary to carry
out the Authority's projects;

(n) To act in coordination with existing governmental agencies in establishing water

quality standards for industrial, agricultural and municipal waste discharges into the lake
and to cooperate with said existing agencies of the government of the Philippines in
enforcing such standards, or to separately pursue enforcement and penalty actions as
provided for in Section 4 (d) and Section 39-A of this Act: Provided, That in case of
conflict on the appropriate water quality standard to be enforced such conflict shall be
resolved thru the NEDA Board.2

To more effectively perform the role of the Authority under Republic Act No. 4850, as though Presidential Decree No. 813
were not thought to be completely effective, the Chief Executive, feeling that the land and waters of the Laguna Lake
Region are limited natural resources requiring judicious management to their optimal utilization to insure renewability and
to preserve the ecological balance, the competing options for the use of such resources and conflicting jurisdictions over
such uses having created undue constraints on the institutional capabilities of the Authority in the light of the limited
powers vested in it by its charter, Executive Order No. 927 further defined and enlarged the functions and powers of the
Authority and named and enumerated the towns, cities and provinces encompassed by the term "Laguna de Bay Region".

Also, pertinent to the issues in this case are the following provisions of Executive Order No. 927 which include in particular
the sharing of fees:

Sec 2. Water Rights Over Laguna de Bay and Other Bodies of Water within the Lake Region: To
effectively regulate and monitor activities in the Laguna de Bay region, the Authority shall have exclusive
jurisdiction to issue permit for the use of all surface water for any projects or activities in or affecting the
said region including navigation, construction, and operation of fishpens, fish enclosures, fish corrals and
the like.

For the purpose of this Executive Order, the term "Laguna de Bay Region" shall refer to the Provinces of
Rizal and Laguna; the Cities of San Pablo, Pasay, Caloocan, Quezon, Manila and Tagaytay; the towns of
Tanauan, Sto. Tomas and Malvar in Batangas Province; the towns of Silang and Carmona in Cavite
Province; the town of Lucban in Quezon Province; and the towns of Marikina, Pasig, Taguig, Muntinlupa,
and Pateros in Metro Manila.

Sec 3. Collection of Fees. The Authority is hereby empowered to collect fees for the use of the lake water
and its tributaries for all beneficial purposes including but not limited to fisheries, recreation, municipal,
industrial, agricultural, navigation, irrigation, and waste disposal purpose; Provided, that the rates of the
fees to be collected, and the sharing with other government agencies and political subdivisions, if
necessary, shall be subject to the approval of the President of the Philippines upon recommendation of
the Authority's Board, except fishpen fee, which will be shared in the following manner; 20 percent of the
fee shall go to the lakeshore local governments, 5 percent shall go to the Project Development Fund
which shall be administered by a Council and the remaining 75 percent shall constitute the share of
LLDA. However, after the implementation within the three-year period of the Laguna Lake Fishery Zoning
and Management Plan, the sharing will be modified as follows: 35 percent of the fishpen fee goes to the
lakeshore local governments, 5 percent goes to the Project Development Fund and the remaining 60
percent shall be retained by LLDA; Provided, however, that the share of LLDA shall form part of its
corporate funds and shall not be remitted to the National Treasury as an exception to the provisions of
Presidential Decree No. 1234. (Emphasis supplied)

It is important to note that Section 29 of Presidential Decree No. 813 defined the term "Laguna Lake" in this manner:
 Sec 41. Definition of Terms.

(11) Laguna Lake or Lake. Whenever Laguna Lake or lake is used in this Act, the same shall refer to
Laguna de Bay which is that area covered by the lake water when it is at the average annual maximum
lake level of elevation 12.50 meters, as referred to a datum 10.00 meters below mean lower low water
(M.L.L.W). Lands located at and below such elevation are public lands which form part of the bed of said
lake.

Then came Republic Act No. 7160, the Local Government Code of 1991. The municipalities in the Laguna Lake Region
interpreted the provisions of this law to mean that the newly passed law gave municipal governments the exclusive
jurisdiction to issue fishing privileges within their municipal waters because R.A. 7160 provides:

Sec. 149. Fishery Rentals, Fees and Charges.

(a) Municipalities shall have the exclusive authority to grant fishery privileges in the municipal waters and
impose rental fees or charges therefor in accordance with the provisions of this Section.

(b) The Sangguniang Bayan may:

(1) Grant fishing privileges to erect fish corrals, oyster, mussel or other aquatic beds or
bangus fry areas, within a definite zone of the municipal waters, as determined by it; . . . .

(2) Grant privilege to gather, take or catch bangus fry, prawn fry or kawag-kawag or fry of
other species and fish from the municipal waters by nets, traps or other fishing gears to
marginal fishermen free from any rental fee, charges or any other imposition whatsoever.

xxx xxx xxx

Sec. 447. Power, Duties, Functions and Compensation. . . . .

xxx xxx xxx

(XI) Subject to the provisions of Book II of this Code, grant exclusive privileges of
constructing fish corrals or fishpens, or the taking or catching of bangus fry, prawn fry
or kawag-kawag or fry of any species or fish within the municipal waters.

xxx xxx xxx

Municipal governments thereupon assumed the authority to issue fishing privileges and fishpen permits. Big fishpen
operators took advantage of the occasion to establish fishpens and fishcages to the consternation of the Authority.
Unregulated fishpens and fishcages, as of July, 1995, occupied almost one-third of the entire lake water surface area,
increasing the occupation drastically from 7,000 hectares in 1990 to almost 21,000 hectares in 1995. The Mayor's permit
to construct fishpens and fishcages were all undertaken in violation of the policies adopted by the Authority on fishpen
zoning and the Laguna Lake carrying capacity.

To be sure, the implementation by the lakeshore municipalities of separate independent policies in the operation of
fishpens and fishcages within their claimed territorial municipal waters in the lake and their indiscriminate grant of fishpen
permits have already saturated the lake area with fishpens, thereby aggravating the current environmental problems and
ecological stress of Laguna Lake.

In view of the foregoing circumstances, the Authority served notice to the general public that:

In compliance with the instructions of His Excellency PRESIDENT FIDEL V. RAMOS given on June 23,
1993 at Pila, Laguna pursuant to Republic Act 4850 as amended by Presidential Decree 813 and
Executive Order 927 series of 1983 and in line with the policies and programs of the Presidential Task
Force on Illegal Fishpens and Illegal Fishing, the general public is hereby notified that:
 1. All fishpens, fishcages and other aqua-culture structures in the Laguna de Bay Region, which were not
registered or to which no application for registration and/or permit has been filed with Laguna Lake
Development Authority as of March 31, 1993 are hereby declared outrightly as illegal.

2. All fishpens, fishcages and other aqua-culture structures so declared as illegal shall be subject to
demolition which shall be undertaken by the Presidential Task Force for Illegal Fishpen and Illegal
Fishing.

3. Owners of fishpens, fishcages and other aqua-culture structures declared as illegal shall, without
prejudice to demolition of their structures be criminally charged in accordance with Section 39-A of
Republic Act 4850 as amended by P.D. 813 for violation of the same laws. Violations of these laws
carries a penalty of imprisonment of not exceeding 3 years or a fine not exceeding Five Thousand Pesos
or both at the discretion of the court.

All operators of fishpens, fishcages and other aqua-culture structures declared as illegal in accordance
with the foregoing Notice shall have one (1) month on or before 27 October 1993 to show cause before
the LLDA why their said fishpens, fishcages and other aqua-culture structures should not be
demolished/dismantled.

One month, thereafter, the Authority sent notices to the concerned owners of the illegally constructed fishpens, fishcages
and other aqua-culture structures advising them to dismantle their respective structures within 10 days from receipt
thereof, otherwise, demolition shall be effected.

Reacting thereto, the affected fishpen owners filed injunction cases against the Authority before various regional trial
courts, to wit: (a) Civil Case No. 759-B, for Prohibition, Injunction and Damages, Regional Trial Court, Branch 70,
Binangonan, Rizal, filed by Fleet Development, Inc. and Carlito Arroyo; (b) Civil Case No. 64049, for Injunction, Regional
Trial Court, Branch 162, Pasig, filed by IRMA Fishing and Trading Corp., ARTM Fishing Corp., BDR Corp., MIRT Corp.
and TRIM Corp.; (c) Civil Case No. 566, for Declaratory Relief and Injunction, Regional Trial Court, Branch 163, Pasig,
filed by Manila Marine Life Business Resources, Inc. and Tobias Reynaldo M. Tianco; (d) Civil Case No. 556-M, for
Prohibition, Injunction and Damages, Regional Trial Court, Branch 78, Morong, Rizal, filed by AGP Fishing Ventures, Inc.;
(e) Civil Case No. 522-M, for Prohibition, Injunction and Damages, Regional Trial Court, Branch 78, Morong, Rizal, filed
by Blue Lagoon and Alcris Chicken Growers, Inc.; (f) Civil Case No. 554-, for Certiorari and Prohibition, Regional Trial
Court, Branch 79, Morong, Rizal, filed by Greenfields Ventures Industrial Corp. and R.J. Orion Development Corp.; and
(g) Civil Case No. 64124, for Injunction, Regional Trial Court, Branch 15, Pasig, filed by SEA-MAR Trading Co., Inc. and
Eastern Lagoon Fishing Corp. and Minamar Fishing Corporation.

The Authority filed motions to dismiss the cases against it on jurisdictional grounds. The motions to dismiss were
invariably denied. Meanwhile, temporary restraining order/writs of preliminary mandatory injunction were issued in Civil
Cases Nos. 64124, 759 and 566 enjoining the Authority from demolishing the fishpens and similar structures in question.

Hence, the herein petition for certiorari, prohibition and injunction, G.R. Nos. 120865-71, were filed by the Authority with
this court. Impleaded as parties-respondents are concerned regional trial courts and respective private parties, and the
municipalities and/or respective Mayors of Binangonan, Taguig and Jala-jala, who issued permits for the construction and
operation of fishpens in Laguna de Bay. The Authority sought the following reliefs, viz.:

(A) Nullification of the temporary restraining order/writs of preliminary injunction issued in Civil Cases Nos.
64125, 759 and 566;

(B) Permanent prohibition against the regional trial courts from exercising jurisdiction over cases involving
the Authority which is a co-equal body;

(C) Judicial pronouncement that R.A. 7610 (Local Government Code of 1991) did not repeal, alter or
modify the provisions of R.A. 4850, as amended, empowering the Authority to issue permits for fishpens,
fishcages and other aqua-culture structures in Laguna de Bay and that, the Authority the government
agency vested with exclusive authority to issue said permits.

By this Court's resolution of May 2, 1994, the Authority's consolidated petitions were referred to the Court of Appeals.

In a Decision, dated June 29, 1995, the Court of Appeals dismissed the Authority's consolidated petitions, the Court of
Appeals holding that: (A) LLDA is not among those quasi-judicial agencies of government whose decision or order are
appealable only to the Court of Appeals; (B) the LLDA charter does vest LLDA with quasi-judicial functions insofar as
fishpens are concerned; (C) the provisions of the LLDA charter insofar as fishing privileges in Laguna de Bay are
concerned had been repealed by the Local Government Code of 1991; (D) in view of the aforesaid repeal, the power to
grant permits devolved to and is now vested with their respective local government units concerned.

Not satisfied with the Court of Appeals decision, the Authority has returned to this Court charging the following errors:

1. THE HONORABLE COURT OF APPEALS PROBABLY COMMITTED AN ERROR WHEN IT RULED

THAT THE LAGUNA LAKE DEVELOPMENT AUTHORITY IS NOT A QUASI-JUDICIAL AGENCY.

2. THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERROR WHEN IT RULED THAT
R.A. 4850 AS AMENDED BY P.D. 813 AND E.O. 927 SERIES OF 1983 HAS BEEN REPEALED BY
REPUBLIC ACT 7160. THE SAID RULING IS CONTRARY TO ESTABLISHED PRINCIPLES AND
JURISPRUDENCE OF STATUTORY CONSTRUCTION.

3. THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERROR WHEN IT RULED THAT
THE POWER TO ISSUE FISHPEN PERMITS IN LAGUNA DE BAY HAS BEEN DEVOLVED TO
CONCERNED (LAKESHORE) LOCAL GOVERNMENT UNITS.

We take a simplistic view of the controversy. Actually, the main and only issue posed is: Which agency of the Government
— the Laguna Lake Development Authority or the towns and municipalities comprising the region — should exercise
jurisdiction over the Laguna Lake and its environs insofar as the issuance of permits for fishery privileges is concerned?

Section 4 (k) of the charter of the Laguna Lake Development Authority, Republic Act No. 4850, the provisions of
Presidential Decree No. 813, and Section 2 of Executive Order No. 927, cited above, specifically provide that the Laguna
Lake Development Authority shall have exclusive jurisdiction to issue permits for the use of all surface water for any
projects or activities in or affecting the said region, including navigation, construction, and operation of fishpens, fish
enclosures, fish corrals and the like. On the other hand, Republic Act No. 7160, the Local Government Code of 1991, has
granted to the municipalities the exclusive authority to grant fishery privileges in municipal waters. The Sangguniang
Bayan may grant fishery privileges to erect fish corrals, oyster, mussels or other aquatic beds or bangus fry area within a
definite zone of the municipal waters.

We hold that the provisions of Republic Act No. 7160 do not necessarily repeal the aforementioned laws creating the
Laguna Lake Development Authority and granting the latter water rights authority over Laguna de Bay and the lake
region.

The Local Government Code of 1991 does not contain any express provision which categorically expressly repeal the
charter of the Authority. It has to be conceded that there was no intent on the part of the legislature to repeal Republic Act
No. 4850 and its amendments. The repeal of laws should be made clear and expressed.

It has to be conceded that the charter of the Laguna Lake Development Authority constitutes a special law. Republic Act
No. 7160, the Local Government Code of 1991, is a general law. It is basic in statutory construction that the enactment of
a later legislation which is a general law cannot be construed to have repealed a special law. It is a well-settled rule in this
jurisdiction that "a special statute, provided for a particular case or class of cases, is not repealed by a subsequent statute,
general in its terms, provisions and application, unless the intent to repeal or alter is manifest, although the terms of the
general law are broad enough to include the cases embraced in the special law."3

Where there is a conflict between a general law and a special statute, the special statute should prevail since it evinces
the legislative intent more clearly than the general statute. The special law is to be taken as an exception to the general
law in the absence of special circumstances forcing a contrary conclusion. This is because implied repeals are not favored
and as much as possible, effect must be given to all enactments of the legislature. A special law cannot be repealed,
amended or altered by a subsequent general law by mere implication.4

Thus, it has to be concluded that the charter of the Authority should prevail over the Local Government Code of 1991.

Considering the reasons behind the establishment of the Authority, which are environmental protection, navigational
safety, and sustainable development, there is every indication that the legislative intent is for the Authority to proceed with
its mission.
We are on all fours with the manifestation of petitioner Laguna Lake Development Authority that "Laguna de Bay, like any
other single body of water has its own unique natural ecosystem. The 900 km² lake surface water, the eight (8) major river
tributaries and several other smaller rivers that drain into the lake, the 2,920 km² basin or watershed transcending the
boundaries of Laguna and Rizal provinces, greater portion of Metro Manila, parts of Cavite, Batangas, and Quezon
provinces, constitute one integrated delicate natural ecosystem that needs to be protected with uniform set of policies; if
we are to be serious in our aims of attaining sustainable development. This is an exhaustible natural resource — a very
limited one — which requires judicious management and optimal utilization to ensure renewability and preserve its
ecological integrity and balance."

"Managing the lake resources would mean the implementation of a national policy geared towards the protection,
conservation, balanced growth and sustainable development of the region with due regard to the inter-generational use of
its resources by the inhabitants in this part of the earth. The authors of Republic Act 4850 have foreseen this need when
they passed this LLDA law — the special law designed to govern the management of our Laguna de Bay lake resources."

"Laguna de Bay therefore cannot be subjected to fragmented concepts of management policies where lakeshore local
government units exercise exclusive dominion over specific portions of the lake water. The garbage thrown or sewage
discharged into the lake, abstraction of water therefrom or construction of fishpens by enclosing its certain area, affect not
only that specific portion but the entire 900 km² of lake water. The implementation of a cohesive and integrated lake water
resource management policy, therefore, is necessary to conserve, protect and sustainably develop Laguna de Bay."5

The power of the local government units to issue fishing privileges was clearly granted for revenue purposes. This is
evident from the fact that Section 149 of the New Local Government Code empowering local governments to issue fishing
permits is embodied in Chapter 2, Book II, of Republic Act No. 7160 under the heading, "Specific Provisions On The
Taxing And Other Revenue Raising Power Of Local Government Units."

On the other hand, the power of the Authority to grant permits for fishpens, fishcages and other aqua-culture structures is
for the purpose of effectively regulating and monitoring activities in the Laguna de Bay region (Section 2, Executive Order
No. 927) and for lake quality control and management.6 It does partake of the nature of police power which is the most
pervasive, the least limitable and the most demanding of all State powers including the power of taxation. Accordingly, the
charter of the Authority which embodies a valid exercise of police power should prevail over the Local Government Code
of 1991 on matters affecting Laguna de Bay.

There should be no quarrel over permit fees for fishpens, fishcages and other aqua-culture structures in the Laguna de
Bay area. Section 3 of Executive Order No. 927 provides for the proper sharing of fees collected.

In respect to the question as to whether the Authority is a quasi-judicial agency or not, it is our holding that, considering
the provisions of Section 4 of Republic Act No. 4850 and Section 4 of Executive Order No. 927, series of 1983, and the
ruling of this Court in Laguna Lake Development Authority vs. Court of Appeals, 231 SCRA 304, 306, which we quote:

xxx xxx xxx

As a general rule, the adjudication of pollution cases generally pertains to the Pollution Adjudication
Board (PAB), except in cases where the special law provides for another forum. It must be recognized in
this regard that the LLDA, as a specialized administrative agency, is specifically mandated under
Republic Act No. 4850 and its amendatory laws to carry out and make effective the declared national
policy of promoting and accelerating the development and balanced growth of the Laguna Lake area and
the surrounding provinces of Rizal and Laguna and the cities of San Pablo, Manila, Pasay, Quezon and
Caloocan with due regard and adequate provisions for environmental management and control,
preservation of the quality of human life and ecological systems, and the prevention of undue ecological
disturbances, deterioration and pollution. Under such a broad grant of power and authority, the LLDA, by
virtue of its special charter, obviously has the responsibility to protect the inhabitants of the Laguna Lake
region from the deleterious effects of pollutants emanating from the discharge of wastes from the
surrounding areas. In carrying out the aforementioned declared policy, the LLDA is mandated, among
others, to pass upon and approve or disapprove all plans, programs, and projects proposed by local
government offices/agencies within the region, public corporations, and private persons or enterprises
where such plans, programs and/or projects are related to those of the LLDA for the development of the
region.

xxx xxx xxx

 . . . . While it is a fundamental rule that an administrative agency has only such powers as are expressly
granted to it by law, it is likewise a settled rule that an administrative agency has also such powers as are
necessarily implied in the exercise of its express powers. In the exercise, therefore, of its express powers
under its charter, as a regulatory and quasi-judicial body with respect to pollution cases in the Laguna
Lake region, the authority of the LLDA to issue a "cease and desist order" is, perforce, implied. Otherwise,
it may well be reduced to a "toothless" paper agency.

there is no question that the Authority has express powers as a regulatory and quasi-judicial body in respect to
pollution cases with authority to issue a "cease and desist order" and on matters affecting the construction of
illegal fishpens, fishcages and other aqua-culture structures in Laguna de Bay. The Authority's pretense, however,
that it is co-equal to the Regional Trial Courts such that all actions against it may only be instituted before the
Court of Appeals cannot be sustained. On actions necessitating the resolution of legal questions affecting the
powers of the Authority as provided for in its charter, the Regional Trial Courts have jurisdiction.

In view of the foregoing, this Court holds that Section 149 of Republic Act No. 7160, otherwise known as the Local
Government Code of 1991, has not repealed the provisions of the charter of the Laguna Lake Development Authority,
Republic Act No. 4850, as amended. Thus, the Authority has the exclusive jurisdiction to issue permits for the enjoyment
of fishery privileges in Laguna de Bay to the exclusion of municipalities situated therein and the authority to exercise such
powers as are by its charter vested on it.

Removal from the Authority of the aforesaid licensing authority will render nugatory its avowed purpose of protecting and
developing the Laguna Lake Region. Otherwise stated, the abrogation of this power would render useless its reason for
being and will in effect denigrate, if not abolish, the Laguna Lake Development Authority. This, the Local Government
Code of 1991 had never intended to do.

WHEREFORE, the petitions for prohibition, certiorari and injunction are hereby granted, insofar as they relate to the
authority of the Laguna Lake Development Authority to grant fishing privileges within the Laguna Lake Region.

The restraining orders and/or writs of injunction issued by Judge Arturo Marave, RTC, Branch 78, Morong, Rizal; Judge
Herculano Tech, RTC, Branch 70, Binangonan, Rizal; and Judge Aurelio Trampe, RTC, Branch 163, Pasig, Metro Manila,
are hereby declared null and void and ordered set aside for having been issued with grave abuse of discretion.

The Municipal Mayors of the Laguna Lake Region are hereby prohibited from issuing permits to construct and operate
fishpens, fishcages and other aqua-culture structures within the Laguna Lake Region, their previous issuances being
declared null and void. Thus, the fishing permits issued by Mayors Isidro B. Pacis, Municipality of Binangonan; Ricardo D.
Papa, Municipality of Taguig; and Walfredo M. de la Vega, Municipality of Jala-jala, specifically, are likewise declared null
and void and ordered cancelled.

The fishpens, fishcages and other aqua-culture structures put up by operators by virtue of permits issued by Municipal
Mayors within the Laguna Lake Region, specifically, permits issued to Fleet Development, Inc. and Carlito Arroyo; Manila
Marine Life Business Resources, Inc., represented by, Mr. Tobias Reynald M. Tiangco; Greenfield Ventures Industrial
Development Corporation and R.J. Orion Development Corporation; IRMA Fishing And Trading Corporation, ARTM
Fishing Corporation, BDR Corporation, Mirt Corporation and Trim Corporation; Blue Lagoon Fishing Corporation and
ALCRIS Chicken Growers, Inc.; AGP Fish Ventures, Inc., represented by its President Alfonso Puyat; SEA MAR Trading
Co., Inc., Eastern Lagoon Fishing Corporation, and MINAMAR Fishing Corporation, are hereby declared illegal structures
subject to demolition by the Laguna Lake Development Authority.

SO ORDERED.
G.R. No. 135962             March 27, 2000

METROPOLITAN MANILA DEVELOPMENT AUTHORITY, petitioner,

vs.
BEL-AIR VILLAGE ASSOCIATION, INC., respondent.

PUNO, J.:

Not infrequently, the government is tempted to take legal shortcuts solve urgent problems of the people. But even when
government is armed with the best of intention, we cannot allow it to run roughshod over the rule of law. Again, we let the
hammer fall and fall hard on the illegal attempt of the MMDA to open for public use a private road in a private subdivision.
While we hold that the general welfare should be promoted, we stress that it should not be achieved at the expense of the
rule of law.

Petitioner MMDA is a government agency tasked with the delivery of basic services in Metro Manila. Respondent Bel-Air
Village Association, Inc. (BAVA) is a non-stock, non-profit corporation whose members are homeowners in Bel-Air Village,
a private subdivision in Makati City. Respondent BAVA is the registered owner of Neptune Street, a road inside Bel-Air
Village.

On December 30, 1995, respondent received from petitioner, through its Chairman, a notice dated December 22, 1995
requesting respondent to open Neptune Street to public vehicular traffic starting January 2, 1996. The notice reads:

SUBJECT: NOTICE of the Opening of Neptune Street to Traffic.

Dear President Lindo,

Please be informed that pursuant to the mandate of the MMDA law or Republic Act No. 7924 which requires the
Authority to rationalize the use of roads and/or thoroughfares for the safe and convenient movement of persons,
Neptune Street shall be opened to vehicular traffic effective January 2, 1996.

In view whereof, the undersigned requests you to voluntarily open the points of entry and exit on said street.

Thank you for your cooperation and whatever assistance that may be extended by your association to the MMDA
personnel who will be directing traffic in the area.

Finally, we are furnishing you with a copy of the handwritten instruction of the President on the matter.

Very truly yours,

PROSPERO I. ORETA

Chairman 1

On the same day, respondent was apprised that the perimeter wall separating the subdivision from the adjacent
Kalayaan Avenue would be demolished.

On January 2, 1996, respondent instituted against petitioner before the Regional Trial Court, Branch 136, Makati City,
Civil Case No. 96-001 for injunction. Respondent prayed for the issuance of a temporary restraining order and preliminary
injunction enjoining the opening of Neptune Street and prohibiting the demolition of the perimeter wall. The trial court
issued a temporary restraining order the following day.

On January 23, 1996, after due hearing, the trial court denied issuance of a preliminary injunction. 2 Respondent
questioned the denial before the Court of Appeals in CA-G.R. SP No. 39549. The appellate court conducted an ocular
inspection of Neptune Street 3 and on February 13, 1996, it issued a writ of preliminary injunction enjoining the
implementation of the MMDA's proposed action. 4
On January 28, 1997, the appellate court rendered a Decision on the merits of the case finding that the MMDA has no
authority to order the opening of Neptune Street, a private subdivision road and cause the demolition of its perimeter
walls. It held that the authority is lodged in the City Council of Makati by ordinance. The decision disposed of as follows:

WHEREFORE, the Petition is GRANTED; the challenged Order dated January 23, 1995, in Civil Case No. 96-
001, is SET ASIDE and the Writ of Preliminary Injunction issued on February 13, 1996 is hereby made
permanent.

For want of sustainable substantiation, the Motion to Cite Roberto L. del Rosario in contempt is denied. 5

No pronouncement as to costs.

SO ORDERED. 6

The Motion for Reconsideration of the decision was denied on September 28, 1998. Hence, this recourse.

Petitioner MMDA raises the following questions:

HAS THE METROPOLITAN MANILA DEVELOPMENT AUTHORITY (MMDA) THE MANDATE TO OPEN
NEPTUNE STREET TO PUBLIC TRAFFIC PURSUANT TO ITS REGULATORY AND POLICE POWERS?

II

IS THE PASSAGE OF AN ORDINANCE A CONDITION PRECEDENT BEFORE THE MMDA MAY ORDER THE
OPENING OF SUBDIVISION ROADS TO PUBLIC TRAFFIC?

III

IS RESPONDENT BEL-AIR VILLAGE ASSOCIATION, INC. ESTOPPED FROM DENYING OR ASSAILING THE
AUTHORITY OF THE MMDA TO OPEN THE SUBJECT STREET?

IV

WAS RESPONDENT DEPRIVED OF DUE PROCESS DESPITE THE SEVERAL MEETINGS HELD BETWEEN
MMDA AND THE AFFECTED EEL-AIR RESIDENTS AND BAVA OFFICERS?

HAS RESPONDENT COME TO COURT WITH UNCLEAN HANDS?7

Neptune Street is owned by respondent BAVA. It is a private road inside Bel-Air Village, a private residential subdivision in
the heart of the financial and commercial district of Makati City. It runs parallel to Kalayaan Avenue, a national road open
to the general public. Dividing the two (2) streets is a concrete perimeter wall approximately fifteen (15) feet high. The
western end of Neptune Street intersects Nicanor Garcia, formerly Reposo Street, a subdivision road open to public
vehicular traffic, while its eastern end intersects Makati Avenue, a national road. Both ends of Neptune Street are guarded
by iron gates.

Petitioner MMDA claims that it has the authority to open Neptune Street to public traffic because it is an agent of the state
endowed with police power in the delivery of basic services in Metro Manila. One of these basic services is traffic
management which involves the regulation of the use of thoroughfares to insure the safety, convenience and welfare of
the general public. It is alleged that the police power of MMDA was affirmed by this Court in the consolidated cases
of Sangalang v.  Intermediate Appellate Court. 8 From the premise that it has police power, it is now urged that there is no
need for the City of Makati to enact an ordinance opening Neptune street to the public. 9

Police power is an inherent attribute of sovereignty. It has been defined as the power vested by the Constitution in the
legislature to make, ordain, and establish all manner of wholesome and reasonable laws, statutes and ordinances, either
with penalties or without, not repugnant to the Constitution, as they shall judge to be for the good and welfare of the
commonwealth, and for the subjects of the same. 10 The power is plenary and its scope is vast and pervasive, reaching
and justifying measures for public health, public safety, public morals, and the general welfare. 11

It bears stressing that police power is lodged primarily in the National Legislature. 12 It cannot be exercised by any group or
body of individuals not possessing legislative power. 13 The National Legislature, however, may delegate this power to the
President and administrative boards as well as the lawmaking bodies of municipal corporations or local government
units. 14 Once delegated, the agents can exercise only such legislative powers as are conferred on them by the national
lawmaking body. 15

A local government  is a "political subdivision of a nation or state which is constituted by law and has substantial control of
local affairs." 16 The Local Government Code of 1991 defines a local government unit as a "body politic and
corporate." 17 — one endowed with powers as a political subdivision of the National Government and as a corporate entity
representing the inhabitants of its territory. 18 Local government units are the provinces, cities, municipalities and
barangays. 19 They are also the territorial and political subdivisions of the state. 20

Our Congress delegated police power to the local government units in the Local Government Code of 1991. This
delegation is found in Section 16 of the same Code, known as the general welfare clause, viz:

Sec. 16. General Welfare. — Every local government unit shall exercise the powers expressly granted, those
necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective
governance, and those which are essential to the promotion of the general welfare. Within their respective
territorial jurisdictions, local government units shall ensure and support, among other things, the preservation and
enrichment of culture, promote health and safety, enhance the right of the people to a balanced ecology,
encourage and support the development of appropriate and self-reliant scientific and technological capabilities,
improve public morals, enhance economic prosperity and social justice, promote full employment among their
residents, maintain peace and order, and preserve the comfort and convenience of their inhabitants. 21

Local government units exercise police power through their respective legislative bodies. The legislative body of the
provincial government is the sangguniang panlalawigan, that of the city government is the sangguniang panlungsod, that
of the municipal government is the sangguniang bayan, and that of the barangay is the sangguniang barangay. The Local
Government Code of 1991 empowers the sangguniang panlalawigan, sangguniang panlungsod and sangguniang
bayan to "enact ordinances, approve resolutions and appropriate funds for the general welfare of the [province, city or
municipality, as the case may be], and its inhabitants pursuant to Section 16 of the Code and in the proper exercise of the
corporate powers of the [province, city municipality] provided under the Code . . . " 22 The same Code gives
the sangguniang barangay the power to "enact ordinances as may be necessary to discharge the responsibilities
conferred upon it by law or ordinance and to promote the general welfare of the inhabitants thereon." 23

Metropolitan or Metro Manila is a body composed of several local government units — i.e., twelve (12) cities and five (5)
municipalities, namely, the cities of Caloocan, Manila, Mandaluyong, Makati, Pasay, Pasig, Quezon, Muntinlupa, Las
Pinas, Marikina, Paranaque and Valenzuela, and the municipalities of Malabon, Navotas, Pateros, San Juan and
Taguig. With the passage of Republic Act (R. A.) No. 7924  24 in 1995, Metropolitan Manila was declared as a  "special
development and administrative region" and the Administration of "metro-wide" basic services affecting the region placed
under "a development authority" referred to as the MMDA. 25

"Metro-wide services" are those "services which have metro-wide impact and transcend local political boundaries or entail
huge expenditures such that it would not be viable for said services to be provided by the individual local government
units comprising Metro Manila." 26 There are seven (7) basic metro-wide services and the scope of these services cover
the following: (1) development planning; (2) transport and traffic management; (3) solid waste disposal and management;
(4) flood control and sewerage management; (5) urban renewal, zoning and land use planning, and shelter services; (6)
health and sanitation, urban protection and pollution control; and (7) public safety. The basic service of transport and
traffic management includes the following:

(b) Transport and traffic management which include the formulation, coordination, and monitoring of
policies, standards, programs and projects to rationalize the existing transport operations, infrastructure
requirements, the use of thoroughfares, and promotion of safe and convenient movement of persons and
goods; provision for the mass transport system and the institution of a system to regulate road
users; administration and implementation of all traffic enforcement operations, traffic engineering services and
traffic education programs, including the institution of a single ticketing system in Metropolitan Manila;" 27
In the delivery of the seven (7) basic services, the MMDA has the following powers and functions:

Sec. 5. Functions and powers of the Metro Manila Development Authority. — The MMDA shall:

(a) Formulate, coordinate and regulate the implementation of medium and long-term plans and programs for the
delivery of metro-wide services, land use and physical development within Metropolitan Manila, consistent with
national development objectives and priorities;

(b) Prepare, coordinate and regulate the implementation of medium-term investment programs for metro-wide
services which shall indicate sources and uses of funds for priority programs and projects, and which shall include
the packaging of projects and presentation to funding institutions;

(c) Undertake and manage on its own metro-wide programs and projects for the delivery of specific services
under its jurisdiction, subject to the approval of the Council. For this purpose, MMDA can create appropriate
project management offices;

(d) Coordinate and monitor the implementation of such plans, programs and projects in Metro Manila; identify
bottlenecks and adopt solutions to problems of implementation;

(e) The MMDA shall set the policies concerning traffic in Metro Manila, and shall coordinate and regulate the
implementation of all programs and projects concerning traffic management, specifically pertaining to
enforcement, engineering and education. Upon request, it shall be extended assistance and
cooperation, including but not limited to, assignment of personnel, by all other government agencies and offices
concerned;

(f) Install and administer a single ticketing system,  fix, impose and collect fines and penalties for all kinds of
violations of traffic rules and regulations, whether moving or non-moving in nature, and confiscate and suspend or
revoke drivers' licenses in the enforcement of such traffic laws and regulations, the provisions of RA 4136 and PD
1605 to the contrary notwithstanding. For this purpose, the Authority shall impose all traffic laws and regulations
in Metro Manila, through its traffic operation center,  and may deputize members of the PNP, traffic enforcers of
local government units, duly licensed security guards, or members of non-governmental organizations to whom
may be delegated certain authority, subject to such conditions and requirements as the Authority may
impose; and

(g) Perform other related functions required to achieve the objectives of the MMDA, including the undertaking of
delivery of basic services to the local government units, when deemed necessary subject to prior coordination
with and consent of the local government unit concerned.

The implementation of the MMDA's plans, programs and projects is undertaken by the local government units, national
government agencies, accredited people's organizations, non-governmental organizations, and the private sector as well
as by the MMDA itself. For this purpose, the MMDA has the power to enter into contracts, memoranda of agreement and
other arrangements with these bodies for the delivery of the required services Metro Manila. 28

The governing board of the MMDA is the Metro Manila Council. The Council is composed of the mayors of the component
12 cities and 5 municipalities, the president of the Metro Manila Vice-Mayors' League and the president of the Metro
Manila Councilors' League. 29 The Council is headed by Chairman who is appointed by the President and vested with the
rank of cabinet member. As the policy-making body of the MMDA, the Metro Manila Council approves metro-wide plans,
programs and projects, and issues the necessary rules and regulations for the implementation of said plans; it approves
the annual budget of the MMDA and promulgate the rules and regulations for the delivery of basic services, collection of
service and regulatory fees, fines and penalties. These functions are particularly enumerated as follows:

Sec. 6. Functions of the Metro Manila Council. —

(a) The Council shall be the policy-making body of the MMDA;

(b) It shall approve metro-wide plans, programs and projects and issue rules and regulations deemed necessary
by the MMDA to carry out the purposes of this Act;
 (c) It may increase the rate of allowances and per diems of the members of the Council to be effective during the
term of the succeeding Council. It shall fix the compensation of the officers and personnel of the MMDA, and
approve the annual budget thereof for submission to the Department of Budget and Management (DBM);

(d) It shall promulgate rules and regulations and set policies and standards for metro-wide application governing
the delivery of basic services, prescribe and collect service and regulatory fees, and impose and collect fines and
penalties.

Clearly, the scope of the MMDA's function is limited to the delivery of the seven (7) basic services. One of these is
transport and traffic management which includes the formulation and monitoring of policies, standards and projects to
rationalize the existing transport operations, infrastructure requirements, the use of thoroughfares and promotion of the
safe movement of persons and goods. It also covers the mass transport system and the institution of a system of road
regulation, the administration of all traffic enforcement operations, traffic engineering services and traffic education
programs, including the institution of a single ticketing system in Metro Manila for traffic violations. Under the service, the
MMDA is expressly authorized "to set the policies concerning traffic" and "coordinate and regulate the implementation of
all traffic management programs." In addition, the MMDA may "install and administer a single ticketing system," fix,
impose and collect fines and penalties for all traffic violations.

It will be noted that the powers of the MMDA are limited to the following acts: formulation, coordination, regulation,
implementation, preparation, management, monitoring, setting of policies, installation of a system and
administration.  There is no syllable in R.A. No. 7924 that grants the MMDA police power, let alone legislative power. Even
the Metro Manila Council has not been delegated any legislative power. Unlike the legislative bodies of the local
government units, there is no provision in R.A. No. 7924 that empowers the MMDA or its Council to "enact ordinances,
approve resolutions appropriate funds for the general welfare" of the inhabitants of Metro Manila. The MMDA is, as
termed in the charter itself, "development authority." 30 It is an agency created for the purpose of laying down policies and
coordinating with the various national government agencies, people's organizations, non-governmental organizations and
the private sector for the efficient and expeditious delivery of basic services in the vast metropolitan area. All its functions
are administrative in nature  and these are actually summed up in the charter itself, viz:

Sec. 2. Creation of the Metropolitan Manila Development Authority. — . . . .

The MMDA shall perform  planning, monitoring and coordinative functions, and in the process exercise regulatory
and supervisory authority over the delivery of metro-wide services within Metro Manila, without diminution of the
autonomy of the local government units concerning purely local matters. 31

Petitioner cannot seek refuge in the cases of Sangalang v. Intermediate Appellate Court  32 where we upheld a zoning
ordinance issued by the Metro Manila Commission (MMC), the predecessor of the MMDA, as an exercise of police power.
The first Sangalang decision was on the merits of the petition, 33 while the second decision denied reconsideration of the
first case and in addition discussed the case of Yabut v. Court of Appeals. 34

Sangalang v. IAC involved five (5) consolidated petitions filed by respondent BAVA and three residents of Bel-Air Village
against other residents of the Village and the Ayala Corporation, formerly the Makati Development Corporation, as the
developer of the subdivision. The petitioners sought to enforce certain restrictive easements in the deeds of sale over their
respective lots in the subdivision. These were the prohibition on the setting up of commercial and advertising signs on the
lots, and the condition that the lots be used only for residential purposes. Petitioners alleged that respondents, who were
residents along Jupiter Street of the subdivision, converted their residences into commercial establishments in violation of
the "deed restrictions," and that respondent Ayala Corporation ushered in the full commercialization" of Jupiter Street by
tearing down the perimeter wall that separated the commercial from the residential section of the village. 35

The petitions were dismissed based on Ordinance No. 81 of the Municipal Council of Makati and Ordinance No. 81-01 of
the Metro Manila Commission (MMC). Municipal Ordinance No. 81 classified Bel-Air Village as a Class A Residential
Zone, with its boundary in the south extending to the center line of Jupiter Street. The Municipal Ordinance was adopted
by the MMC under the Comprehensive Zoning Ordinance for the National Capital Region and promulgated as MMC
Ordinance No. 81-01. Bel-Air Village was indicated therein as bounded by Jupiter Street and the block adjacent thereto
was classified as a High Intensity Commercial Zone. 36

We ruled that since both Ordinances recognized Jupiter Street as the boundary between Bel-Air Village and the
commercial district, Jupiter Street was not for the exclusive benefit of Bel-Air residents. We also held that the perimeter
wall on said street was constructed not to separate the residential from the commercial blocks but simply for security
reasons, hence, in tearing down said wall, Ayala Corporation did not violate the "deed restrictions" in the deeds of sale.
We upheld the ordinances, specifically MMC Ordinance No. 81-01, as a legitimate exercise of police power. 37 The power
of the MMC and the Makati Municipal Council to enact zoning ordinances for the general welfare prevailed over the "deed
restrictions".

In the second Sangalang/Yabut decision, we held that the opening of Jupiter Street was warranted by the demands of the
common good in terms of "traffic decongestion and public convenience." Jupiter was opened by the Municipal Mayor to
alleviate traffic congestion along the public streets adjacent to the Village. 38 The same reason was given for the opening
to public vehicular traffic of Orbit Street, a road inside the same village. The destruction of the gate in Orbit Street was
also made under the police power of the municipal government. The gate, like the perimeter wall along Jupiter, was a
public nuisance because it hindered and impaired the use of property, hence, its summary abatement by the mayor was
proper and legal. 39

Contrary to petitioner's claim, the two Sangalang cases do not apply to the case at bar. Firstly, both involved zoning
ordinances passed by the municipal council of Makati and the MMC. In the instant case, the basis for the proposed
opening of Neptune Street is contained in the notice of December 22, 1995 sent by petitioner to respondent BAVA,
through its president. The notice does not cite any ordinance or law, either by the Sangguniang Panlungsod of Makati City
or by the MMDA, as the legal basis for the proposed opening of Neptune Street. Petitioner MMDA simply relied on its
authority under its charter "to rationalize the use of roads and/or thoroughfares for the safe and convenient movement of
persons." Rationalizing the use of roads and thoroughfares is one of the acts that fall within the scope of transport and
traffic management. By no stretch of the imagination, however, can this be interpreted as an express or implied grant of
ordinance-making power, much less police power.

Secondly, the MMDA is not the same entity as the MMC in Sangalang. Although the MMC is the forerunner of the present
MMDA, an examination of Presidential Decree (P. D.) No. 824, the charter of the MMC, shows that the latter possessed
greater powers which were not bestowed on the present MMDA.

Metropolitan Manila was first created in 1975 by Presidential Decree (P.D.) No. 824. It comprised the Greater Manila Area
composed of the contiguous four (4) cities of Manila, Quezon, Pasay and Caloocan, and the thirteen (13) municipalities of
Makati, Mandaluyong, San Juan, Las Pinas, Malabon, Navotas, Pasig, Pateros, Paranaque, Marikina, Muntinlupa and
Taguig in the province of Rizal, and Valenzuela in the province of Bulacan. 40 Metropolitan Manila was created as a
response to the finding that the rapid growth of population and the increase of social and economic requirements in these
areas demand a call for simultaneous and unified development; that the public services rendered by the respective local
governments could be administered more efficiently and economically if integrated under a system of central planning;
and this coordination, "especially in the maintenance of peace and order and the eradication of social and economic ills
that fanned the flames of rebellion and discontent [were] part of reform measures under Martial Law essential to the safety
and security of the State." 41

Metropolitan Manila was established as a "public corporation" with the following powers:

Sec. 1. Creation of the Metropolitan Manila. — There is hereby created a public corporation, to be known as the
Metropolitan Manila, vested with powers and attributes of a corporation including the power to make
contracts, sue and be sued, acquire,  purchase,  expropriate, hold, transfer and dispose of property and such
other powers as are necessary to carry out its purposes. The Corporation shall be administered by a Commission
created under this Decree. 42

The administration of Metropolitan Manila was placed under the Metro Manila Commission (MMC) vested with the
following powers:

Sec. 4. Powers and Functions of the Commission. — The Commission shall have the following powers and functions:

1. To act as a central government to establish and administer programs and provide services common to the
area;

2. To levy and collect taxes and special assessments, borrow and expend money and issue bonds, revenue
certificates, and other obligations of indebtedness. Existing tax measures should, however, continue to be
operative until otherwise modified or repealed by the Commission;

3. To charge and collect fees for the use of public service facilities;
 4. To appropriate money for the operation of the metropolitan government and review appropriations for the city
and municipal units within its jurisdiction with authority to disapprove the same if found to be not in accordance
with the established policies of the Commission, without prejudice to any contractual obligation of the local
government units involved existing at the time of approval of this Decree;

5. To review, amend, revise or repeal all ordinances, resolutions and acts of cities and municipalities within
Metropolitan Manila;

6. To enact or approve ordinances, resolutions and to fix penalties for any violation thereof which shall not exceed
a fine of P10,000.00 or imprisonment of six years or both such fine and imprisonment for a single offense;

7. To perform general administrative, executive and policy-making functions;

8. To establish a fire control operation center, which shall direct the fire services of the city and municipal
governments in the metropolitan area;

9. To establish a garbage disposal operation center, which shall direct garbage collection and disposal in the
metropolitan area;

10. To establish and operate a transport and traffic center, which shall direct traffic activities;

11. To coordinate and monitor governmental and private activities pertaining to essential services such as
transportation, flood control and drainage, water supply and sewerage, social, health and environmental services,
housing, park development, and others;

12. To insure and monitor the undertaking of a comprehensive social, economic and physical planning and
development of the area;

13. To study the feasibility of increasing barangay participation in the affairs of their respective local governments
and to propose to the President of the Philippines definite programs and policies for implementation;

14. To submit within thirty (30) days after the close of each fiscal year an annual report to the President of the
Philippines and to submit a periodic report whenever deemed necessary; and

15. To perform such other tasks as may be assigned or directed by the President of the Philippines.

The MMC was the  "central government" of Metro Manila  for the purpose of establishing and administering programs
providing services common to the area. As a "central government" it had the power to levy and collect taxes and special
assessments, the power to charge and collect fees; the power to appropriate money for its operation, and at the same
time, review appropriations for the city and municipal units within its jurisdiction. It was bestowed the power to enact or
approve ordinances, resolutions and fix penalties for violation of such ordinances and resolutions. It also had the power to
review, amend, revise or repeal all ordinances, resolutions and acts of any of the four (4) cities and thirteen (13)
municipalities comprising Metro Manila.

P.D. No. 824 further provided:

Sec. 9. Until otherwise provided, the governments of the four cities and thirteen municipalities in the Metropolitan
Manila shall continue to exist in their present form except as may be inconsistent with this Decree. The members
of the existing city and municipal councils in Metropolitan Manila shall, upon promulgation of this Decree, and until
December 31, 1975, become members of the Sangguniang Bayan which is hereby created for every city and
municipality of Metropolitan Manila.

In addition, the Sangguniang Bayan shall be composed of as many barangay captains as may be determined and
chosen by the Commission, and such number of representatives from other sectors of the society as may be
appointed by the President upon recommendation of the Commission.

x x x           x x x          x x x
 The Sangguniang Bayan may recommend to the Commission ordinances, resolutions or such measures as it may
adopt; Provided, that no such ordinance, resolution or measure shall become effective, until after its approval by
the Commission; and Provided further, that the power to impose taxes and other levies, the power to appropriate
money and the power to pass ordinances or resolutions with penal sanctions shall be vested exclusively in the
Commission.

The creation of the MMC also carried with it the creation of the Sangguniang Bayan. This was composed of the members
of the component city and municipal councils, barangay captains chosen by the MMC and sectoral representatives
appointed by the President. The Sangguniang Bayan had the power to recommend to the MMC the adoption of
ordinances, resolutions or measures. It was the MMC itself, however, that possessed legislative powers. All ordinances,
resolutions and measures recommended by the Sangguniang Bayan  were subject to the MMC's approval. Moreover, the
power to impose taxes and other levies, the power to appropriate money, and the power to pass ordinances or resolutions
with penal sanctions were vested exclusively in the MMC.

Thus, Metropolitan Manila had a "central government," i.e., the MMC which fully possessed legislative police powers.
Whatever legislative powers the component cities and municipalities had were all subject to review and approval by the
MMC.

After President Corazon Aquino assumed power, there was a clamor to restore the autonomy of the local government
units in Metro Manila. Hence, Sections 1 and 2 of Article X of the 1987 Constitution provided:

Sec. 1. The territorial and political subdivisions of the Republic of the Philippines are the provinces, cities,
municipalities and barangays. There shall be autonomous regions in Muslim Mindanao and the Cordilleras as
herein provided.

Sec. 2. The territorial and political subdivisions shall enjoy local autonomy.

The Constitution, however, recognized the necessity of creating metropolitan regions not only in the existing National
Capital Region but also in potential equivalents in the Visayas and Mindanao. 43 Section 11 of the same Article X thus
provided:

Sec. 11. The Congress may, by law, create special metropolitan political subdivisions, subject to a plebiscite as
set forth in Section 10 hereof. The component cities and municipalities shall retain their basic autonomy and shall
be entitled to their own local executives and legislative assemblies. The jurisdiction of the metropolitan authority
that will thereby be created shall be limited to basic services requiring coordination.

Constitution itself expressly provides that Congress may, by law, create "special metropolitan political subdivisions" which
shall be subject to approval by a majority of the votes cast in a plebiscite in the political units directly affected; the
jurisdiction of this subdivision shall be limited to basic services requiring coordination; and the cities and municipalities
comprising this subdivision shall retain their basic services requiring coordination; and the cities and municipalities
comprising this subdivision shall retain their basic autonomy and their own local executive and legislative
assemblies. 44 Pending enactment of this law, the Transitory Provisions of the Constitution gave the President of the
Philippines the power to constitute the Metropolitan Authority, viz:

Sec. 8. Until otherwise provided by Congress, the President may constitute the Metropolitan Authority to be
composed of the heads of all local government units comprising the Metropolitan Manila area. 45

In 1990, President Aquino issued Executive Order (E. O.) No. 392 and constituted the Metropolitan Manila Authority
(MMA). The powers and functions of the MMC were devolved to the MMA. 46 It ought to be stressed, however, that not all
powers and functions of the MMC were passed to the MMA. The MMA's power was limited to the "delivery of basic urban
services requiring coordination in Metropolitan Manila." 47 The MMA's governing body, the Metropolitan Manila Council,
although composed of the mayors of the component cities and municipalities, was merely given power of: (1) formulation
of policies on the delivery of basic services requiring coordination and consolidation; and (2) promulgation resolutions and
other issuances, approval of a code of basic services and the exercise of its rule-making power. 48

Under the 1987 Constitution, the local government units became primarily responsible for the governance of their
respective political subdivisions. The MMA's jurisdiction was limited  to addressing common problems involving basic
services that transcended local boundaries. It did not have legislative power. Its power was merely to provide the local
government units technical assistance in the preparation of local development plans. Any semblance of legislative power
it had was confined to a "review [of] legislation proposed by the local legislative assemblies to ensure consistency among
local governments and with the comprehensive development plan of Metro Manila," and to "advise the local governments
accordingly." 49

When R.A. No. 7924 took effect, Metropolitan Manila became a "special development and administrative region" and the
MMDA a "special development authority" whose functions were "without prejudice to the autonomy of the affected local
government units." The character of the MMDA was clearly defined in the legislative debates enacting its charter.

R.A. No. 7924 originated as House Bill No. 14170/11116 and was introduced by several legislators led by Dante Tinga,
Roilo Golez and Feliciano Belmonte. It was presented to the House of Representatives by the Committee on Local
Governments chaired by Congressman Ciriaco R. Alfelor. The bill was a product of Committee consultations with the local
government units in the National Capital Region (NCR), with former Chairmen of the MMC and MMA, 50 and career
officials of said agencies. When the bill was first taken up by the Committee on Local Governments, the following debate
took place:

THE CHAIRMAN [Hon. Ciriaco Alfelor]: Okay, Let me explain. This has been debated a long time ago, you know.
It's a special . . . we can create a special metropolitan political subdivision.

Actually, there are only six (6) political subdivisions provided for in the Constitution: barangay, municipality, city,
province, and we have the Autonomous Region of Mindanao and we have the Cordillera. So we have 6.
Now. . . . .

HON. [Elias] LOPEZ: May I interrupt, Mr. Chairman. In the case of the Autonomous Region, that is also
specifically mandated by the Constitution.

THE CHAIRMAN: That's correct. But it is considered to be a political subdivision. What is the meaning of a
political subdivision? Meaning to say, that it has its own government, it has its own political personality, it has the
power to tax, and all governmental powers: police power and everything. All right. Authority is different; because it
does not have its own government. It is only a council, it is an organization of political subdivision, powers, "no,
which is not imbued with any political power.

If you go over Section 6, where the powers and functions of the Metro Manila Development Authority, it is purely
coordinative. And it provides here that the council is policy-making. All right.

Under the Constitution is a Metropolitan Authority with coordinative power. Meaning to say, it coordinates all of the
different basic services which have to be delivered to the constituency. All right.

There is now a problem. Each local government unit is given its respective . . . as a political subdivision. Kalookan
has its powers, as provided for and protected and guaranteed by the Constitution. All right, the exercise. However,
in the exercise of that power, it might be deleterious and disadvantageous to other local government units. So, we
are forming an authority where all of these will be members and then set up a policy in order that the basic
services can be effectively coordinated. All right.

Of course, we cannot deny that the MMDA has to survive. We have to provide some funds, resources. But it does
not possess any political power. We do not elect the Governor. We do not have the power to tax. As a matter of
fact, I was trying to intimate to the author that it must have the power to sue and be sued because it coordinates.
All right. It coordinates practically all these basic services so that the flow and the distribution of the basic services
will be continuous. Like traffic, we cannot deny that. It's before our eyes. Sewerage, flood control, water system,
peace and order, we cannot deny these. It's right on our face. We have to look for a solution. What would be the
right solution? All right, we envision that there should be a coordinating agency and it is called an authority. All
right, if you do not want to call it an authority, it's alright. We may call it a council or maybe a management
agency.

x x x           x x x          x x x 51

Clearly, the MMDA is not a political unit of government. The power delegated to the MMDA is that given to the Metro
Manila Council to promulgate administrative rules and regulations in the implementation of the MMDA's functions. There is
no grant of authority to enact ordinances and regulations for the general welfare of the inhabitants of the metropolis. This
was explicitly stated in the last Committee deliberations prior to the bill's presentation to Congress. Thus:
 THE CHAIRMAN: Yeah, but we have to go over the suggested revision. I think this was already approved before,
but it was reconsidered in view of the proposals, set-up, to make the MMDA stronger. Okay, so if there is no
objection to paragraph "f". . . And then next is paragraph "b," under Section 6. "It shall approve metro-wide plans,
programs and projects and issue ordinances or resolutions deemed necessary by the MMDA to carry out the
purposes of this Act." Do you have the powers? Does the MMDA... because that takes the form of a local
government unit, a political subdivision.

HON. [Feliciano] BELMONTE: Yes, I believe so, your Honor. When we say that it has the policies, it's very clear
that those policies must be followed. Otherwise, what's the use of empowering it to come out with policies. Now,
the policies may be in the form of a resolution or it may be in the form of a ordinance. The term "ordinance" in this
case really gives it more teeth, your honor. Otherwise, we are going to see a situation where you have the power
to adopt the policy but you cannot really make it stick as in the case now, and I think here is Chairman Bunye. I
think he will agree that that is the case now. You've got the power to set a policy, the body wants to follow your
policy, then we say let's call it an ordinance and see if they will not follow it.

THE CHAIRMAN: That's very nice. I like that. However, there is a constitutional impediment.1âwphi1 You are
making this MMDA a political subdivision. The creation of the MMDA would be subject to a plebiscite. That is what
I'm trying to avoid. I've been trying to avoid this kind of predicament. Under the Constitution it states: if it is a
political subdivision, once it is created it has to be subject to a plebiscite. I'm trying to make this as administrative.
That's why we place the Chairman as a cabinet rank.

HON. BELMONTE: All right, Mr. Chairman, okay, what you are saying there is . . . . .

THE CHAIRMAN: In setting up ordinances, it is a political exercise, Believe me.

HON. [Elias] LOPEZ: Mr. Chairman, it can be changed into issuances of rules and regulations. That would be . . .
it shall also be enforced.

HON. BELMONTE: Okay, I will . . . .

HON. LOPEZ: And you can also say that violation of such rule, you impose a sanction. But you know, ordinance
has a different legal connotation.

HON. BELMONTE: All right, I defer to that opinion, your Honor.

THE CHAIRMAN: So instead of ordinances, say rules and regulations.

HON. BELMONTE: Or resolutions. Actually, they are actually considering resolutions now.

THE CHAIRMAN: Rules and resolutions.

HON. BELMONTE: Rules, regulations and resolutions. 52

The draft of H. B. No. 14170/11116 was presented by the Committee to the House of Representatives. The explanatory
note to the bill stated that the proposed MMDA is a "development authority" which is a "national agency, not a political
government unit." 53 The explanatory note was adopted as the sponsorship speech of the Committee on Local
Governments. No interpellations or debates were made on the floor and no amendments introduced. The bill was
approved on second reading on the same day it was presented. 54

When the bill was forwarded to the Senate, several amendments were made.1âwphi1 These amendments, however, did
not affect the nature of the MMDA as originally conceived in the House of Representatives. 55

It is thus beyond doubt that the MMDA is not a local government unit or a public corporation endowed with legislative
power. It is not even a "special metropolitan political subdivision" as contemplated in Section 11, Article X of the
Constitution. The creation of a "special metropolitan political subdivision" requires the approval by a majority of the votes
cast in a plebiscite in the political units directly affected." 56 R. A. No. 7924 was not submitted to the inhabitants of Metro
Manila in a plebiscite. The Chairman of the MMDA is not an official elected by the people, but appointed by the President
with the rank and privileges of a cabinet member. In fact, part of his function is to perform such other duties as may be
assigned to him by the President, 57 whereas in local government units, the President merely exercises supervisory
authority. This emphasizes the administrative character of the MMDA.

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

We stress that this decision does not make light of the MMDA's noble efforts to solve the chaotic traffic condition in Metro
Manila. Everyday, traffic jams and traffic bottlenecks plague the metropolis. Even our once sprawling boulevards and
avenues are now crammed with cars while city streets are clogged with motorists and pedestrians. Traffic has become a
social malaise affecting our people's productivity and the efficient delivery of goods and services in the country. The
MMDA was created to put some order in the metropolitan transportation system but unfortunately the powers granted by
its charter are limited. Its good intentions cannot justify the opening for public use of a private street in a private
subdivision without any legal warrant. The promotion of the general welfare is not antithetical to the preservation of the
rule of law.1âwphi1.nêt

IN VIEW WHEREOF, the petition is denied. The Decision and Resolution of the Court of Appeals in CA-G.R. SP No.
39549 are affirmed.

SO ORDERED.
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 injunction1 (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 14 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 39 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 law12 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 Memorandum23 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 Tañada 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 Government's jurisdiction over infrastructure
programs in Lanao del Sur. R.A. 8999 is patently inconsistent with R.A. 9054, and it destroys the latter law's 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-à-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 community's 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
end—that end being a democratic, participatory political and economic system in which the rights of individuals and the
identity of minority communities are protected—its 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 forms—deconcentration 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 autonomy—an 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 X75 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 Constitution's adherence to local autonomy. And in case of conflicts, the
underlying spirit which should guide its resolution is the Constitution's 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-determination—a 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. 6734—the 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 IV84 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 legislature's
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.
6734—which 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 DPWH's order, like spring water, cannot rise higher than its source of power—the Executive.

The fact that the department order was issued pursuant to E.O. 124—signed and approved by President Aquino in her
residual legislative powers—is 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 House94 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.