G.R. No.

L-58870 / December 18, 1987

Cebu Institute of Technology v. Ople

Facts:
Six cases involving various private schools, their teachers and non-teaching school personnel,
and even parents with children studying in said schools, raised herein the correct interpretation
of Section 3 (a) of Presidential Decree No. 451, and thereafter, under the Education Act of 1982
Batas Pambansa Blg. 232 which provides that that no increase in tuition or other school fees or
charges shall be approved unless sixty (60%) per centum of the proceeds is allocated for
increase in salaries or wages of the members of the faculty and all other employees of the
school concerned, and the balance for institutional development, student assistance and
extension services, and return to investments: Provided That in no case shall the return to
investments exceed twelve (12%) per centum of the incremental proceeds.

Issues:

A. Whether or not allowances and other fringe benefits of employees may be

charged against the 60% portion of the incremental proceeds provided for in
sec. 3(a) of Pres. Dec. No. 451.

This Court has consistently held, beginning with the University of the East case, that if the schools
have no resources other than those derived from tuition fee increases, allowances and benefits
should be charged against the proceeds of tuition fee increases which the law allows for return on
investments under section 3(a) of Pres. Dec. No. 451, therefore, not against the 60% portion
allocated for increases in salaries and wages (See 117 SCRA at 571). This ruling was reiterated in
the University of Pangasinan case and in the Saint Louis University case.

, the allocation of 60% per cent of the incremental proceeds thereof for increases in salaries or
wages of school personnel and not for any other item such as allowances or other fringe benefits.

... The sixty (60%) percent incremental proceeds from the tuition increase are to be devoted entirely
to wage or salary increases which means increases in basic salary.

In the light of existing laws which exclude allowances from the basic salary or wage in the
computation of the amount of retirement and other benefits payable to an employee, this Court will
not adopt a different meaning of the terms "salaries or wages" to mean the opposite, i.e. to include
allowances in the concept of salaries or wages.

As to the alleged implementing rules and regulations promulgated by the then MECS to the effect
that allowances and other benefits may be charged against the 60% portion of the proceeds of
tuition fee increases provided for in Section 3(a) of Pres. Dec. No. 45 1, suffice it to say that these
were issued ultra vires, and therefore not binding upon this Court.

The rule-making authority granted by Pres. Dec. No. 451 is confined to the implementation of the
Decree and to the imposition of limitations upon the approval of tuition fee increases, to wit:

SEC. 4. Rules and Regulations. — The Secretary of Education and Culture is hereby
authorized, empowered and directed to issue the requisite rules and regulations for
the effective implementation of this Decree. He may, in addition to the requirements
and limitations provided for under Sections 2 and 3 hereof, impose other
requirements and limitations as he may deem proper and reasonable.

The power does not allow the inclusion of other items in addition to those for which 60% of the
proceeds of tuition fee increases are allocated under Section 3(a) of the Decree.

B. Whether or not allowances and other fringe benefits may be charged against the 60%
portion of the incremental proceeds of tuition fee increases upon the effectivity of the
Education Act of 1982 (B.P. Blg. 232).

Under Pres. Dec. No. 451, the authority to regulate the imposition of tuition and other school fees or
charges by private schools is lodged with the Secretary of Education and Culture (Sec. 1), where
section 42 of B.P. Blg. 232 liberalized the procedure by empowering each private school to
determine its rate of tuition and other school fees or charges.

Pres. Dec. No. 451 provides that 60% of the incremental proceeds of tuition fee increases shall be
applied or used to augment the salaries and wages of members of the faculty and other employees
of the school, while B.P. Blg. 232 provides that the increment shall be applied or used in accordance
with the regulations promulgated by the MECS.

A closer look at these differences leads the Court to resolve the question in favor of repeal

The legislative intent to depart from the statutory limitations under Pres. Dec. No. 451 is apparent in
the second sentence of section 42 of B.P. Blg. 232. Pres. Dec. No. 451 and section 42 of B.P. Blg.
232 which cover the same subject matter, are so clearly inconsistent and incompatible with each
other that there is no other conclusion but that the latter repeals the former in accordance with
section 72 of B.P. Blg. 232 to wit:

Sec. 72. Repealing clause. — All laws or parts thereof inconsistent with any provision
of this Act shall be deemed repealed or modified, as the case may be.

The guidelines and regulations on tuition and other school fees issued after the enactment of B.P.
Blg. 232 consistently permit the charging of allowances and other benefits against the 60%
incremental proceeds. Such was the tenor in the MECS Order No. 23, s. 1983; MECS Order No. 15,
s. 1984; MECS Order No. 25, s. 1985; MECS Order No. 22, s. 1986; and DECS Order No. 37, s.
1987. The pertinent portion of the latest order reads thus:
 In any case of increase at least sixty percent (60%) of the incremental proceeds
should be allocated for increases in or provisions for salaries or wages, allowances
and fringe benefits of faculty and other staff, including accruals to cost of living
allowance, 13th month pay, social security, medicare and retirement contribution and
increases as may be provided in mandated wage orders, collective bargaining
agreements or voluntary employer practices.

Section 42 of B.P. Blg. 232 grants to the Minister of Education (now Secretary of Education) rule-
making authority to fill in the details on the application or use of tuition fees and other school
charges. In the same vein is section 70 of the same law which states:

SEC. 70. Rule-making Authority. — The Minister of Education, Culture and Sports

charged with the administration and enforcement of this Act, shall promulgate the
necessary implementing rules and regulations.

Contrary to the petitioners' insistence that the questioned rules and regulations contravene the
statutory authority granted to the Minister of Education, this Court finds that there was a valid
exercise of rule-making authority.

C. Whether or not schools and their employees may enter into a collective
bargaining agreement allocating more than 60% of said incremental proceeds
for salary increases and other benefits of said employees.

Based on the aforequoted MECS and DECS rules and regulations which implement BP Blg. 232, the
60% portion of the proceeds of tuition fee increases may now be allotted for both salaries and
allowances and other benefits. The 60% figure is, however, a minimum which means that schools
and their employees may agree on a larger portion, or in this case, as much as 90% for salaries and
allowances and other benefits. This is not in anyway to allow diminution or loss of the portion allotted
for institutional development of the school concerned. Thus, paragraph 7.5 of MECS Order No. 25,
series of 1985 specifically provides that other student fees and charges like registration, library,
laboratory or athletic fees shall be used exclusively for the purposes indicated.