G.R. No.

166620 : April 20, 2010

ATTY. SYLVIA BANDA, ET AL. Petitioners, v. EDUARDO R. ERMITA, in his capacity as Executive
Secretary, The Director General of the Philippine Information Agency and The National
Treasurer, Respondents.

The present controversy arose from a Petition for Certiorari and prohibition challenging the constitutionality of
Executive Order No. 378 dated October 25, 2004, issued by President Gloria Macapagal Arroyo (President
Arroyo). Petitioners characterize their action as a class suit filed on their own behalf and on behalf of all their
co-employees at the National Printing Office (NPO).

FACTS:
The National Printing Office was formed on July 25, 1987, during the term of former President Corazon C.
Aquino by virtue of Executive Order No. 285. Under Section 6 of the aforesaid order, the National Printing
Office would have exclusive printing jurisdiction over all standard and accountable forms of national, provincial,
city and municipal governments, including government corporations; officials ballots; public documents such as
the Official Gazette; and also accept other government printing jobs not in an exclusive basis. On October 25,
2004, President Arroyo issued the herein assailed Executive Order No. 378, amending Section 6 of Executive
Order No. 285 by removing the exclusive jurisdiction of the NPO over the printing services requirements of
government agencies and instrumentalities, except in the printing of election paraphernalia.
Pursuant to Executive Order No. 378, government agencies and instrumentalities are allowed to source their
printing services from the private sector through competitive bidding, subject to the condition that the services
offered by the private supplier be of superior quality and lower in cost compared to what was offered by the
NPO. Perceiving Executive Order No. 378 as a threat to their security of tenure as employees of the NPO,
petitioners challenged its constitutionality. They contend that it is beyond the executive powers of President
Arroyo to amend or repeal Executive Order No. 285 issued by former President Aquino when the latter still
exercised legislative powers; and Executive Order No. 378 violates petitioners' security of tenure, because it
paves the way for the gradual abolition of the NPO.

Issue: Whether or not President Arroyo cannot amend or repeal Executive Order No. 285 by the mere
issuance of another executive order?
Ruling:
NO. The Supreme Court found the petitioner’s contention without merit. It is a well-settled principle in
jurisprudence that the President has the power to reorganize the offices and agencies in the executive
department in line with the President's constitutionally granted power of control over executive offices and by
virtue of previous delegation of the legislative power to reorganize executive offices under existing statutes.
Under Section 31, Book III of the Administrative Code of 1987, "the President, subject to the policy in the
Executive Office and in order to achieve simplicity, economy and efficiency, shall have the continuing authority
to reorganize the administrative structure of the Office of the President." For this purpose, he may transfer the
functions of other Departments or Agencies to the Office of the President. It is undisputed that the NPO, as an
agency that is part of the Office of the Press Secretary is part of the Office of the President. Concomitant to
such power to abolish, merge or consolidate offices, the President implicitly has the power to effect less radical
or less substantive changes to the functional and internal structure of the Office of the President, including the
modification of functions of such executive agencies as the exigencies of the service may require.
In the case at bar, there was neither an abolition of the NPO nor a removal of any of its functions to be
transferred to another agency. Under the assailed Executive Order No. 378, the NPO remains the main
printing arm of the government for all kinds of government forms and publications. At most, there was a mere
alteration of the main function of the NPO by limiting the exclusivity of its printing responsibility to election
forms.
The reorganization actions that the President may take with respect to agencies in the Office of the President
are not strictly limited to transfer of functions and offices. Pursuant to Section 20, Chapter 7, Title I, Book III of
the same Code, the power of the President to reorganize the Executive Branch includes such powers and
functions that may be provided for under other laws. Under Section 62 of the Act, the President is authorized to
effect organizational changes including the creation of offices in the department or agency concerned.
Furthermore, Section 78 of Republic Act No. 8760 mandated that the actual streamlining and productivity
improvement in agency organization and operation shall be effected pursuant to Circulars or Orders issued for
the purpose by the Office of the President.
The Court stressed that in establishing an executive department, bureau or office, the legislature necessarily
ordains an executive agency's position in the scheme of administrative structure. Such determination is
primary, but subject to the President's continuing authority to reorganize the administrative structure. As far as
bureaus, agencies or offices in the executive department are concerned, the power of control may justify the
President to deactivate the functions of a particular office. Or a law may expressly grant the President the
broad authority to carry out reorganization measures. The Administrative Code of 1987 is one such law.
The Court also found nothing objectionable in the provision in Executive Order No. 378 limiting the
appropriation of the NPO to its own income. In previous decisions, the Court has noted certain provisions in
the general appropriations laws as likewise reflecting the power of the President to reorganize executive
offices or agencies even to the extent of modifying and realigning appropriations for that purpose. Furthermore,
the objective behind Executive Order No. 378 is wholly consistent with the state policy contained in Republic
Act No. 9184 or the Government Procurement Reform Act to encourage competitiveness by extending equal
opportunity to private contracting parties who are eligible and qualified.