LAST MINUTE NOTES FOR BAR EXAM USC LAW

(BASED ON REVISED SYLLABUS RELEASED

JANUARY 4, 2022) SOURCES: VILLA BAR REVIEW NOTES
2021, LEGAL EDGE LECTURES, UP BOC
HOREB FELIX VILLA 2020, ATENEO BLUE NOTES 2021, USC
LAW REVIEWERS (TANYA NOTES; EH 403
NOTES)

Contents
CONSTITUTIONAL LAW (11 QUESTIONS) 2
I. BASIC PRINCIPLES OF POLITICAL LAW 2
II. BILL OF RIGHTS.........................8
III. COMPOSITION AND POWERSTO
THE LAW PERTAINING OFTHE
GOVERNMENT ORGANS
STATE AND 20
ITS RELATIONSHIP
IV. JUDICIAL
WITH ITSREVIEW 31 (FORMERLY
CITIZENS
POLITICAL
V. SUPERVISION OFLAW, LABOR LAW
THE COURTS 35
AND TAXATION)
VI. POWERS OF THE SUPREME COURT
36
VII. QUALIFICATIONS, DISQUALIFICATIONS, SELECTION OF THE PRESIDENT,
SENATORS, MEMBERS OF THE HOUSE OF REPRESENTATIVES, JUSTICES AND
JUDGES, OMBUDSMAN, AND CONSTITUTIONAL COMMISSIONS 36
VIII. IMMUNITY OF THE PRESIDENT, PRIVILEGES OF SENATORS AND MEMBERS OF
THE HOUSE OF REPRESENTATIVES. 40
IX. STRUCTURE OF GOVERNMENT. .42
X. PROCESS OF LEGISLATION........44
XI. NATURAL RESOURCES (NATIONALIZATION PRINCIPLE FOR NATURAL
RESOURCES AND ECONOMIC ACTIVITIES) 46
XII.AMENDMENT AND REVISION OF THE CONSTITUTION 48
INTERNATIONAL LAW (1 QUESTION) 50
I. SOURCES OF INTERNATIONAL LAW50
II. RELATIONSHIP BETWEEN INTERNATIONAL LAW AND PHILIPPINE DOMESTIC
LAW...........................................51
LABOR LAW (3 QUESTIONS)......53
I. BASIC PRINCIPLES....................53
II. EXISTENCE OF EMPLOYER- EMPLOYEE RELATIONSHIP; TESTS 54
III. TERMINATION OF EMPLOYMENT55
IV. REQUIREMENTS FOR VALID LABOR-ONLY CONTRACTING 65

1
V. RIGHTS OF EMPLOYEES AND OF LABOR ORGANIZATIONS; MEMBERSHIP IN
UNIONS......................................66
VI. MANAGEMENT PREROGATIVE....71
VII. ILLEGAL RECRUITMENT OF OVERSEAS FILIPINO WORKERS 74
VIII. REMEDIES (LABOR STANDARDS VIOLATIONS) 76
TAXATION LAW (3 QUESTIONS) 79
I. BASIC PRINCIPLES OF TAXATION IN THE CONSTITUTION
II. INCOME TAX...........................83
CONSTITUTIONAL LAW (11
QUESTIONS)
I. BASIC PRINCIPLES OF POLITICAL LAW
Separation of Powers
 Ordains that each of the 3 branches of
government has exclusive cognizance
of and is supreme in matters falling
within its constitutionally allocated
sphere; each branch cannot invade the
domain of others. Powers of the
government are separated to avoid
concentration of powers in any one
branch.
 The government established by the
Constitution follows the theory of
separation of powers. Separation of
powers is a fundamental principle in
our system of government and is
founded on the belief that, by
establishing equilibrium among the
three (3) powers holders, harmony will
result and power will not be
concentrated and tyranny will be
avoided [Bernas].
 Any system that is violative of the
principle of separation of powers is
unconstitutional and void (Belgica v.
Executive Secretary, G.R. No. 208566,
November 19, 2013).
2
79
 The Constitution does not expressly
declare the principle of Separation of
Powers, but it is implied in the division
of our Constitution by the three
separate Articles outlining our form of
government. (Article VI- Legislative
Dept.; Article VII- Executive Dept;
Article VIII- Judicial Dept.)
Sovereignty
 The supreme and uncontrollable power
inherent in a State by which that State
is governed. (Nachura, Outline
Reviewer in Political Law, 2015)
Two kinds of sovereignty:
1. Legal Sovereignty — authority
which has the power to issue final
commands
2. Political Sovereignty — power
behind the legal sovereign, or the
sum total of all the influences that
operate upon it.
Doctrine of Auto-Limitation
 It is to be admitted that any state may,
by its consent, express or implied,
submit to a restriction of its sovereign
rights. There may thus be a
curtailment of what otherwise is a
power plenary in character (Reagan v.
CIR, G.R. No. L-26379, December 27,
1969).
 Effect of TRANSFER of sovereignty
(Spain to US) – Political laws are
automatically abrogated, but municipal
 laws (penal, civil, commercial laws)
remain in force unless repealed,
modified, or amended by the new
sovereign.
 Effect of belligerent occupation
(Japanese) – There is no change in
sovereignty. However, political laws
(except laws on treason) are
suspended. Municipal laws remain in
force unless repealed, modified, or
amended by the belligerent occupant.
 Doctrine of jus postliminium - At the
end of the belligerent occupation when
the occupant is ousted from the
territory, the political laws which have
been suspended during the occupation
shall automatically become effective
again. On the other hand, anything
that was decided by the belligerent
government shall automatically be
abrogated.
Judicial review
 It is the power of the courts to test the
validity of executive and legislative
acts in light of their conformity with the
Constitution. The power of judicial
review involves basically reviewing a
law or act of the President is in
consonance with the Constitution. So,
if the law is in consonance, the court
will merely make a double negative
ruling stating that the law is not
unconstitutional. Otherwise, the Court
has the duty to declare the law
unconstitutional.
FUNDAMENTAL POWERS OF THE STATE
POLICE POWER
Police Power in General
 Based on public necessity and the right
of the State and of the public to self-
protection. For this reason, its scope
expands and contracts with changing
needs. (Baseco v. PCGG, G.R. No.
75885, May 27, 1987)
 It is the power of the State to enact
regulations to promote the health,
morals, peace and order, and welfare
of the society (Ermita-Malate Hotel and
3
Motel Operators v. City of Manila, G.R.
No. L-24693, Oct. 23, 1967). These fall
under “Public Necessity”
 Police power has been properly
characterized as the most essential,
insistent and the least limitable of
powers, extending as it does to all
great public needs.
Requisites:
1. LAWFUL SUBJECT: The interests of
the public generally, as distinguished
from those of a particular class, require
the exercise of the police power,
otherwise, it may violate the equal
protection of the laws
2. LAWFUL MEANS: The means
employed are reasonably necessary for
the accomplishment of the purpose and
not unduly oppressive upon individuals.
 To justify the State in thus interposing
its authority in behalf of the public, it
must appear, first, that the interests of
the public generally, as distinguished
from those of a particular class, require
such interference; and second, that the
means are reasonably necessary for
the accomplishment of the purpose,
and not unduly oppressive upon
individuals (Ynot v. IAC, G.R. No.
74457, March 20, 1987)
Nature of Police Power
Legislative but may be delegated to the
following:
1. President
2. Administrative Bodies
3. Legislative Bodies of Local Government
Units
Delegation of Powers to the Local Government
Units
 The exercise of police power by the
LGUs are under the general welfare
clause or under the police power
delegated to them. They are allowed to
pass ordinances for the promotion of
the general welfare in their locality.
However, the LGUs must sit to it that
these ordinances are not only in
consonance with the Constitution, but
also must not be contrary to existing
 statutes. Otherwise, they are invalid.
(MMDA vs. Bel-Air Village Association,
Inc., 328 SCRA 836 [2000])
 TN: They can only regulate activities
under existing laws. They cannot
prohibit the activity.
EMINENT DOMAIN
 The purpose of the taking must be
public use. Just compensation must
begiven to the private owner (Art. III,
Sec. 9, 1987 Constitution).
 The State has a paramount interest in
exercising its power of eminent domain
for the general welfare and that the
superior right of the State to
expropriate private property always
takes precedence over the interest of
private owners, provided that:
1. The expropriation is for public use
2. The exercise of the right to eminent
domain complies with the guarantees
of due process (Estate of JBL Reyes v.
City of Manila, G.R. Nos 132431 &
137146, Feb. 13, 2004).
 The manner is legislative, however,
once authority is given to exercise the
power, the matter ceases to be wholly
legislative. The executive authorities
may then decide whether the power
will be invoked and to what extent
(Republic v. Juan, G.R. No. L-24740,
Jul 30, 1979).
 It may be delegated to LGUs, other
public entities and public utilities. The
scope is narrower and may be
exercised only when authorized by
Congress, subject to its control and
restraints imposed through the law
conferring the power or in other
legislations. Thus, the power of
eminent domain delegated to an LGU is
in reality not eminent but “inferior.”
The national legislature is still the
principal of the LGUs, the latter cannot
go beyond the principal’s will or modify
the same (Beluso v. Municipality of
Panay, G.R. 153974, Aug. 7, 2006)
Requisites:
1. Taking of private property
4
2. Public use/purpose
3. Payment of just compensation
4. Observance of due process of law
“TAKING” in the Constitutional Sense
 May include trespass without actual
eviction of the owner, material
impairment of the value of the property
or prevention of the ordinary uses from
which the property was intended.
 It is not only limited to evicting
physically the owner of the property.
 Any manner or method of depriving the
owner of the beneficial use of the
private property is considered as
taking.
Requisites of TAKING:
1. Expropriator must enter a private
property
2. Entry must be for more than a
momentary period
3. Entry must be under warrant or color
of authority
4. Property must be devoted to public use
or otherwise informally appropriated or
injuriously affected
5. Utilization of the property must be in
such a way as to oust the owner and
deprive him of beneficial enjoyment
 Judge Singco: You must know when
the taking took place because the basis
for the computation of the just
compensation is reckoned from the
time of taking. As you know, the value
of the lands appreciates or increases.
As the owner, you want the best price
while the government wants to pay the
least amount. The court has the duty
to fix the payment in a fair amount,
which is the just compensation.
Payment of Just Compensation
 Just compensation is described as a full
and fair equivalent of the property
taken from the private owner by the
expropriator. This is intended to
indemnify the owner fully for the loss
he has sustained as a result of the
expropriation.
 Amount of Just Compensation, when
determined: The amount to be paid as
 just compensation is to be determined
as of the date of the taking of the
property or the filing of the complaint,
whichever came first (Rule 67, Sec. 4,
Rules of Court; Republic v. Estate of
Posadas, G.R. No. 214310, February
24, 2020)
 Amount of Just Compensation, how
determined:
 Just compensation = actual or basic
value of the property + consequential
damages – consequential benefits
(which should not exceed the
consequential damages)
 Two instances when the owner may
demand payment of just
compensation:
1. Initial Stage
2. Final Stage
 TN: If it is the national government
that takes the property, the purpose of
the taking is not subject to judicial
review. The only issue that is left for
the trial court to decide is on the
matter of the amount of just
compensation that should be paid to
the owner of the property. If it is a
delegate, it could be subjected to
judicial review.
Initial Stage (First)
 Under RA 8974, there must be full
payment from the start before the
government can use the property.
Under Rule 67, ROC, there are two
stages of proceedings. In the initial
stage, you file a complaint, you allege
that there was taking for public use,
there was offer and the offer was
refused and so an amount was
deposited to the depositary bank,
usually Land Bank, as regards to the
initial payment.
 It is a ministerial duty on the part of
the court to issue a writ of possession
once it is established that the taking is
for public use and there was an initial
deposit of 10% of the assessed value
of the property subject of the
expropriation. The initial deposit during
the initial stage is determine by law not
by the court.
5
Q: When do you apply RA 8974, which
amended Rule 67, ROC? It is effective only as
of November 26, 2000.
A: Expropriation, even if national, if it was
initiated before November 26, 2000, what will
apply is Rule 67, ROC. But if it was initiated on
November 26, 2000 and beyond, RA 8974 will
apply. This is insofar as Right of Way or
Location for National Government
Infrastructure Projects only is concerned.
Q: What will be the basis of RA 8974?
A: It will be based on BIR zonal valuation or
market value of the property, whichever is
higher.
Basis of Just Compensation
Rule 67, General taking: Assessed value
1. Local Government taking: Assessed
value
2. Agrarian Program: Market value of the
property
3. National Infrastructure: BIR zonal
valuation or market value of the
property, whichever is higher.
Exercise of Eminent Domain by LGUs
 LGUs may exercise the power of
eminent domain, provided that the
following requisites concur:
1. An ordinance is enacted by the local
legislative council authorizing the local
chief executive, in behalf of the LGU,
to exercise the power of eminent
domain or pursue expropriation
proceedings over a particular private
property.
2. The power of eminent domain is
exercised for public use, purpose or
welfare, or for the benefit of the poor
and the landless.
3. There is payment of just
compensation, as required under
Section 9, Article III of the
Constitution, and other pertinent laws.
4. A valid and definite offer has been
previously made to the owner of the
property sought to be expropriated,
but said offer was not accepted.
TAXATION
  It is the power by which the State
raises revenue to defray the necessary
expenses of the Government. It is the
enforced proportional contributions
from persons and property, levied by
the State by virtue of its sovereignty,
for the support of the government and
for all public needs.
 It is as broad as the purpose for which
it is given.
Purpose:
1. To raise revenue (Main purpose)
2. Tool for regulation
3. Protection/power to keep alive
 Lifeblood Doctrine- Taxes are the
lifeblood of the govt and should be
collected without any unnecessary
hindrance
 Necessity Theory- Governmental
existence is a necessity and
performance of governmental functions
redound to the people’s benefit.
Tax for special purpose
 Treated as a special fund and paid out
for such purpose only; when purpose is
fulfilled, the balance, if any, shall be
transferred to the general funds of the
Government [Sec. 29 (3), Art. VI].
Requisites
a. Uniform and Equitable
 Taxes should be (a) uniform (persons
or things belonging to the same class
shall be taxed at the same rate) and
(b) equitable (taxes should be
apportioned among the people
according to their ability to pay)
b. Progressive system of taxation
 The rate increases as the tax base
increases, with social justice as basis
(Taxation here is an instrument for a
more equitable distribution of wealth).
c. Delegated tax legislation
 Congress may delegate law-making
authority when the Constitution itself
specifically authorizes it.
 The power of LGUs to tax is not
delegated from Congress, but it is
6
directly conferred to them by the
Constitution.
Scope and Limitation
General Limitations
1. Power to tax exists for the general
welfare; should be exercised only for a
public purpose
2. Might be justified as for public purpose
even if the immediate beneficiaries are
private individuals pursuant to the
modern concept of public purposes
(Carlos Superdrug Corporation v.
DSWD, G.R. No.166494, June 29,
2007).
3. Tax should not be confiscatory: If a tax
measure is so unconscionable as to
amount to confiscation of property, the
Court will invalidate it. But invalidating
a tax measure must be exercised with
utmost caution.
Specific Limitations
a. Uniformity of taxation
 GR: Simply geographical uniformity,
meaning it operates with the same
force and effect in every place where
the subject of it is found
 XPN: Rule does not prohibit
classification for purposes of taxation,
provided the requisites for valid
classification are met (Ormoc Sugar v.
Treasurer of Ormoc, G.R. No. L-
23793, February 17, 1968).
b. Tax Exemptions
 No law granting any tax exemption
shall be passed without the
concurrence of a majority of all the
Members of Congress [Sec. 28 (4), Art.
VI].
 There is no vested right in a tax
exemption. Being a mere statutory
privilege, a tax exemption may be
modified or withdrawn at will by the
granting authority (Republic v.
Caguioa, G.R. No. 168584, October 15,
2007).
Exemptions may either be constitutional or
statutory:
1. Constitutional exemptions (Art.VI, Sec. 2. If statutory, it has to have been passed
28 par. 3) by majority of all the members of
Congress (Art. VI Sec. 28 par. 4)

COMPARATIVE TABLE OF THE INHERENT POWERS OF THE STATE (UP BOC 2020)

Police Power Eminent Domain Taxation

1. As to concept Power to make and Power to take private Power to enforce
implement laws for the property for public use contribution to raise
general welfare with just government funds
compensation
2. As to scope Broad in application as Merely a power to take Plenary, comprehensive
it pertains to the private property for and
general power to make public use supreme
and implement
laws
3. As the Government and its Generally, by the Government and its
to political subdivisions government but the political subdivisions
exercising power may be granted
authority to public service or
public utility
companies
4. As the Promotion of general The taking of private Enforced contribution is
to welfare property is for public to support the
purpose
use government
5. As to Upon valid delegation, Upon valid delegation, Upon valid delegation,
delegation it may be exercised by it may be exercised by the President and the
the President, Law- the President, Law- Law-making bodies of
making Bodies of LGUs, making bodies of LGUs, the LGUs can exercise it
and Public
Administrative corporation, Quasi-
Agencies public corporation and
Administrative
agencies
6. As to the Relatively free from Superior to and may Subject to
relationship to the constitutional override constitutional Constitutional and

7
 Constitution limitations and is impairment provision Inherent Limitations;
superior to the non- because the welfare of Inferior to non-
impairment clause the State is superior impairment clause
to any private contract
7. As to Limitation Limited by the Bounded by public Constitutional and
demand for public purpose and just Inherent Limitations
interest and due compensation
process

 Right to his body in completeness, and

II. BILL OF RIGHTS
extends to the use of God-given
faculties which make life enjoyable.

DUE PROCESS OF LAW LIBERTY

Section 1. No person shall be deprived of  Right to exist and be free from

life, liberty, or property without due arbitrary personal restraint or
process of law, nor shall any person be servitude. Includes the right to use his
denied the equal protection of the laws. faculties in all lawful ways.

Due Process
 A law which hears before it condemns,
which proceeds upon inquiry and
renders judgment only after trial.
Embodiment of the fair play.
 Due process evades a precise
definition. The purpose of the guaranty
is to prevent arbitrary governmental
encroachment against the life, liberty
and property of individuals. The due
process guaranty serves as a interference is an actionable wrong.
protection against arbitrary regulation
or seizure. Even corporations and
partnerships are protected by the
guaranty insofar as their property is
concerned. (White Light Corporation v.
City of Manila, G.R. No. 122846, Jan.
20, 2009)
Concept of Life, Liberty, and Property
PROPERTY
 Anything that can come under the right
of ownership and be subject of
contract. Includes the right to secure,
use and dispose of them.
 Public office is not property; but one
unlawfully ousted therefrom may
institute an action to recover, based on
the de jure officer’s right to office.
 One’s employment, trade or profession
is a property right, and wrongful
But it can be regulated through police
power.
Kinds of Due Process
a. Substantive
 A restriction on government’s law and
rule-making powers.

LIFE Requisites:

 Interest of the public, in general,

require State intervention.

8
  Means employed are reasonably
necessary to accomplish its
purpose, and not unduly
oppressive.
b. Procedural
 A restriction on actions of
administrative, judicial and quasi-
judicial agencies of the State
Requisites (Judicial Due Process):
1. Impartial court or tribunal clothes with
judicial power to hear and determine
the matter before it.
2. Jurisdiction must be lawfully acquired
over the person of the defendant and
over the property which is the subject
matter of the proceeding
 Service of summons gives the court
jurisdiction over the person of the
defendant and also affords him the
opportunity to be heard on the claim
against him. Jurisdiction is also
acquired by voluntary appearance
before the court which includes
submission of pleadings.
3. Defendant must be given an
opportunity to be heard – Satisfied as
long as the party is accorded the
opportunity to be heard. It is deemed
waived or forfeited if it is not availed
of.
 Not all cases require a trial-type
hearing.
 Due process in labor cases before a LA
is satisfied when the parties are given
the opportunity to submit their position
papers. The holding of an adversarial
trial depends on the discretion of the
LA; the parties cannot demand it as a
matter of right.
 “To be heard” is also satisfied through
submission of pleadings.
4. Judgment must be rendered upon
lawful hearing – Otherwise, the right to
a hearing would be rendered
meaningless. Also, decisions of courts
without expressing therein clearly and
distinctly the facts and law on which it
9
is based are prohibited (Sec 14, Article
VIII)
Administrative Due Process
Requisites:
1. Right to hearing – Includes the right to
present one’s case and submit
supporting evidence
2. Tribunal must consider the evidence
presented
3. Decision must have something to
support itself
4. Evidence must be substantial
5. Decision must be rendered on the
evidence presented at the hearing, or
at least contained in the record and
disclosed to the parties
6. Tribunal or any of its judges must act
on its or his own independent
consideration of the facts and the law,
and not simply accept the views of a
subordinate in arriving at a decision.
7. Board or body should, in all
controversial questions, render its
decision in a manner that the parties
will know the issues involved and the
reasons for the decision.
 NOTE: Due process in Quasi-judicial
proceedings before the COMELEC —
Requires notice and hearing
Levels of Scrutiny
1. STRICT SCRUTINY TEST
 Applying strict scrutiny, the focus is on
the presence of compelling, rather than
substantial, governmental interest and
on the absence of less restrictive
means for achieving that interest. In
terms of judicial review of statutes or
ordinances, strict scrutiny refers to the
standard for determining the quality
and the amount of governmental
interest brought to justify the
regulation of fundamental freedoms.
Strict scrutiny is used today to test the
validity of laws dealing with the
regulation of speech, gender, or race
as well as other fundamental rights as
expansion from its earlier applications
to equal protection. The United States
Supreme Court has expanded the
scope of strict scrutiny to protect
fundamental rights such as suffrage,
 judicial access and interstate travel
(White Light Corporation v. City of
Manila, G.R. No. 122846, Jan. 20,
2009).
2. HEIGHTENED OR INTERMEDIATE
SCRUTINY TEST
 Under intermediate review,
governmental interest is extensively
examined and the availability of less
restrictive measures is considered.
(White Light Corporation v. City of
Manila, supra)
3. RATIONAL BASIS TEST
 Using the rational basis examination,
laws or ordinances are upheld if they
rationally further a legitimate
governmental interest. (White Light
Corporation v. City of Manila, supra)
Grounds Invoked in Case of Violation of Right
to Due Process:
1. Void for Vagueness Doctrine
2. Overbreadth Doctrine
 NOTE: These 2 grounds may be used
as basis for facial challenge on the
validity of a law; in case of questioning
validity of a penal law, the penal law
shall only pertain to that violating one’s
freedom of speech.
1. Void for Vagueness- A statute or act
may be said to be vague when it lacks
comprehensible standards that men of
common intelligence must necessarily
guess at its meaning and differ in its
application.
 The test in determining whether a
criminal statute is void for uncertainty
is whether the language conveys a
sufficiently definite warning as to the
proscribed conduct when measured by
common understanding and practice. It
must be stressed, however, that the
"vagueness" doctrine merely requires a
reasonable degree of certainty for the
statute to be upheld - not absolute
precision or mathematical exactitude.
 An act will not be held invalid merely
because it might have been more
explicit in its wordings or detailed in its
provisions, especially where, because
10
of the nature of the act, it would be
impossible to provide all the details in
advance as in all other statutes.
(Estrada v. Sandiganbayan, G.R. No.
148560, November 19, 2001)
2. Overbreadth Doctrine- Under the
overbreadth doctrine, a proper
governmental purpose, constitutionally
subject to state regulation, may not be
achieved by means that unnecessarily
sweep its subject broadly, thereby
invading the area of protected
freedoms.
Application to Penal Statutes
 GR: The overbreadth and vagueness
doctrines then have special application
only to free speech cases. They are
inapplicable for testing the validity of
penal statutes.
 Rationale: All penal laws, like the
cybercrime law, have of course an
inherent chilling effect, an in terrorem
effect or the fear of possible
prosecution. But to prevent the State
from legislating criminal laws because
they instill such kind of fear is to
render the state powerless in
addressing and penalizing socially
harmful conduct.
XPNS:
1. When a penal statute is challenged as
applied
2. When a penal statute encroaches upon
the freedom of speech, a facial
challenge grounded on the overbreadth
and vagueness doctrine is acceptable.
(Disini v. Sec. of Justice, G.R. No.
203335, Feb. 18, 2014)
EQUAL PROTECTION OF LAWS
Section 1. No person shall be deprived of
life, liberty or property without due
process of law, nor shall any person be
denied the equal protection of the laws.
Concept
 The constitutional right to equal
protection requires that all persons or
 things similarly situated should be
treated alike, both as to rights
conferred and responsibilities imposed.
It requires public bodies and
institutions to treat similarly situated
individuals in a similar manner.
 The guarantee of equal protection
secures every person within the State’s
jurisdiction against intentional and
arbitrary discrimination, whether
occasioned by the express terms of a
statute or by its improper execution
through the State’s duly constituted
authorities. The concept of equal
justice under the law demands that the
State governs impartially and not to
draw distinctions between individuals
solely on differences that are irrelevant
to the legitimate governmental
objective.
Requisites for Valid Classification
 The guaranty of equal protection
envisions equality among equals
determined according to a valid
classification. If the groupings are
characterized by substantial
distinctions that make real differences,
one class may be treated and regulated
differently from another. In other
words, a valid classification must be:
1. Based on substantial distinctions;
2. Germane to the purposes of the law;
3. Not limited to existing conditions only;
and
4. Equally applicable to all members of
the class. (Mosqueda, et al. v. Pilipino
Banana Growers & Exporters
Association, Inc., et al., G.R. No.
189185, August 16, 2016)
Levels of Scrutiny
 Levels of Scrutiny to Determine the
Propriety of Classification under the
Equal Protection Clause:
 To determine the propriety of the
classification, courts resort to three
levels of scrutiny, viz: the rational
scrutiny, intermediate scrutiny and
strict scrutiny.
 The rational basis scrutiny (also known
as the rational relation test or rational
11
basis test) demands that the
classification reasonably relate to the
legislative purpose. The rational basis
test often applies in cases involving
economics or social welfare, or to any
other case not involving a suspect
class.
 When the classification puts a quasi-
suspect class at a disadvantage, it will
be treated under intermediate or
heightened review. Classifications
based on gender or illegitimacy
receives intermediate scrutiny. To
survive intermediate scrutiny, the law
must not only further an important
governmental interest and be
substantially related to that interest,
but the justification for the
classification must be genuine and
must not depend on broad
generalizations.
 The strict scrutiny review applies when
a legislative classification impermissibly
interferes with the exercise of a
fundamental right or operates to the
peculiar class disadvantage of a
suspect class. The Government carries
the burden to prove that the
classification is necessary to achieve a
compelling state interest, and that it is
the least restrictive means to protect
such interest.
 The Court, applying the rational basis
test, ruled that the ordinance of Davao
City prohibiting aerial spraying in all
agricultural entities therein as the
practice produces pesticide drift
causing inconvenience and harm to the
residents and degrades the
environment, violates the equal
protection clause, hence, should be
declared unconstitutional (Mosqueda,
et al. v. Pilipino Banana Growers &
Exporters Association, Inc., et al,
supra).
 RA 9262 (An Act Defining Violence
Against Women and Their Children -
VAWC) is not violative of the equal
protection clause. There is a valid
classification. The unequal power
 relationship that women are more
likely to be victims of violence and the
widespread gender bias and prejudice
against women make for real
differences justifying the classification.
The distinction is germane to the
purpose of the law to address violence
committed against women. The law
applies to women and children who
suffer violence and abuse. (Garcia v.
Hon. Drilon, G.R. No. 179267, June 25,
2013)
 There is a substantial distinction
between elective and appointive
officials. The former occupy their office
by virtue of the mandate of the
electorate. They are elected to an
office for a definite term and may be
removed therefrom only upon stringent
conditions. On the other hand,
appointive officials hold their office by
virtue of their designation thereto by
an appointing authority. Some
appointive officials hold their office in a
permanent capacity and are entitled to
security of tenure while others serve at
the pleasure of the appointing
authority. (Eleazar P. Quinto and
Gerino A. Tolentino, Jr., vs. COMELEC,
G.R. No. 189698, Feb. 22, 2010)
RIGHT AGAINST UNREASONABLE
SEARCHES AND SEIZURES
Section 2. The right of the people to be
secure in their persons, houses, papers,
and effects against unreasonable searches
and seizures of whatever nature and for
any purpose shall be inviolable, and no
search warrant or warrant of arrest shall
issue except upon probable cause to be
determined personally by the judge after
examination under oath or affirmation of
the complainant and the witnesses he
may produce, particularly describing the
place to be searched and the persons or
things to be seized.
Two constitutional guarantees create these
zones of privacy:
1. The right against unreasonable
searches and seizures, which is the
basis of the right to be let alone, and
12
2. The right to privacy of communication
and correspondence. In assessing the
challenge that the State has
impermissibly intruded into these
zones of privacy, a court must
determine whether a person has
exhibited a reasonable expectation of
privacy and, if so, whether that
expectation has been violated by
unreasonable government intrusion.
(Disini v. Sec. of Justice, G.R. No.
203335, Feb. 18, 2014)
Concept of a Search
 Search Warrant - A search warrant is
an order in writing issued in the name
of the People of the Philippines, signed
by a judge and directed to a peace
officer, commanding him to search for
personal property described therein
and bring it before the court. (ROC,
Rule 126, Sec. 1)
 Validity of a Search Warrant - A search
warrant shall be valid for ten (10) days
from its date. Thereafter, it shall be
void. (ROC, Rule 126, § 10)
 When Any Court May Issue Search
Warrant: In certain cases when no
criminal action has yet been filed, any
court may issue a search warrant even
though it has no jurisdiction over the
offense allegedly committed, provided
that all the requirements for the
issuance of such warrant are present.
(People v. Hon. Castillo, Sr., G.R. No.
204419, Nov. 7, 2016)
Requisites for a Valid Search Warrant:
1. Probable cause is present (in
connection with one specific offense);
2. Such probable cause must be
determined personally by the judge;
3. The judge must examine, in writing
and under oath or affirmation, the
complainant and the witnesses he or
she may produce;
4. The applicant and the witnesses testify
on the facts personally known to them;
and
5. The warrant specifically describes the
place to be searched and the things to
be seized. (People v. Mamaril, G.R. No.
171980, Oct. 6, 2010)
  A search warrant must conform strictly
to the constitutional requirements for
its issuance; otherwise, it is void. (Diaz
v. People, G.R. No. 188794, Sept. 2,
2015)
Probable Cause
 Probable cause for a search warrant is
defined as such facts and
circumstances which would lead a
reasonably discrete and prudent man
to believe that an offense has been
committed and that the objects sought
in connection with the offense are in
the place sought to be searched. (Laud
v. People, G.R. No. 199032, Nov. 19,
2014)
 A finding of probable cause needs only
to rest on evidence showing that, more
likely than not, a crime has been
committed and that it was committed
by the accused. Probable cause
demands more than bare suspicion; it
requires less than evidence which
would justify conviction.
 Information received through text
message is not only hearsay evidence;
it is double hearsay. Thus, information
received through text message alone
cannot be basis for probable cause
(People v. Jerry Sapla, G.R. No.
244045, June 16, 2020).
Personal Determination by the Judge
 Probing and Exhaustive Examination:
In determining the existence of
probable cause for the issuance of a
search warrant, the examining
magistrate must make probing and
exhaustive, not merely routine or pro
forma examination of the applicant and
the witnesses. (Nala v. Barroso, G.R.
No. 153087, Aug. 7, 2003)
 Personal Examination of the
Complainant and the Witnesses
 Affidavits are Insufficient: Affidavits of
the complainant and his witnesses are
insufficient to establish the factual
basis for probable cause. Personal
examination by the judge of the
applicant and his witnesses is
indispensable, and the examination
should be probing and exhaustive, not
merely routinary or a rehash of the
13
affidavits. (Diaz v. People, G.R. No.
188794, Sept. 2, 2015)
 Facts Personally Known to the
Applicant and the Witnesses
 Testimony Must Not be Based on Mere
Hearsay: The testimony must be
within the personal knowledge of the
complainant or the witnesses he may
produce and not based on mere
hearsay. The applicant and the witness
must testify on their personal
knowledge, not personal belief. (Nala
v. Barroso, G.R. No. 153087, Aug. 7,
2003)
Particularity of Description
 Test of Sufficiency: A description of a
place to be searched is sufficient if the
officer with the warrant can, with
reasonable effort, ascertain and
identify the place intended and
distinguish it from other places in the
community.
 Any designation or description known
to the locality that points out the place
to the exclusion of all others, and on
inquiry leads the officers unerringly to
it, satisfies the constitutional
requirement. (Laud v. People, G.R. No.
199032, Nov. 19, 2014)
Technical Precision of Description Not Required
 Technical precision of description is not
required. It is only necessary that
there be reasonable particularity and
certainty as to the identity of the
property to be searched for and seized,
so that the warrant shall not be a mere
roving commission.
 Indeed, the law does not require that
the things to be seized must be
described in precise and minute detail
as to leave no room for doubt on the
part of the searching authorities. If this
were the rule, it would be virtually
impossible for the applicants to obtain
a warrant as they would not know
exactly what kind of things to look for.
Any description of the place or thing to
be searched that will enable the officer
making the search with reasonable
certainty to locate such place or thing
is sufficient. (Worldwide Web
 Corporation v. People, G.R. No.
161106, Jan. 13, 2014)
Mistake in the Name of the Person Does Not
Invalidate the Warrant
 A mistake in the name of the person to
be searched does not invalidate the
warrant, especially when the
authorities had personal knowledge of
the drug-related activities of the
accused. In fact, a "John Doe" warrant
satisfies the requirements so long as it
contains a descriptio personae such as
will enable the officer to identify the
accused. A mistake in the identification
of the owner of the place does not
invalidate the warrant provided the
place to be searched is properly
described. (People v. Tiu Won Chua,
G.R. No. 149878, July 1, 2003)
General Warrants are Void
 A general warrant is defined as a
search or arrest warrant that is not
particular as to the person to be
arrested or the property to be seized.
It is one that allows the seizure of one
thing under a warrant describing
another and gives the officer executing
the warrant the discretion over which
items to take. (Worldwide Web
Corporation v. People, G.R. No.
161106, Jan. 13, 2014)
 General warrants do not meet the
requirement in Art. III, Sec. 1, of the
Constitution, and of Sec. 3, Rule 126 of
the Revised Rules of Court, that the
warrant should particularly describe
the things to be seized. (Uy v. BIR,
G.R. No. 129651, Oct. 20, 2000)
Properties Subject to Seizure
 Not necessary that the property is
owned by the person against whom the
warrant is issued; sufficient if it is
within his control or possession.
1. Subject of the offense
2. Stolen or embezzled property and
other proceeds or fruits of the offense
3. Property used or intended to be used
as means for the commission of the
crime
Conduct of the Search
14
 Police may use force in entering the
dwelling if justified by Rule 126. Where
the occupants refused to open the door
when the searching party knocked
several times, and the agents saw
suspicious movements of the people
inside, it justified the searching party’s
forcible entry (People v. Salanguit,
G.R. No. 133254-55, April 19, 2001)
WARRANTLESS SEARCHES
 GR: All searches must have a warrant,
otherwise, the search is void.
XPNS:
1. Search incidental to lawful arrest
2. Search of a moving vehicle
3. Seizure in plain view
4. Customs search
5. Consented Search
6. Stop & frisk or Terry Search
7. Check points
8. Exigent and emergency circumstances
9. Searches conducted at airports
1. SEARCH INCIDENTAL TO A LAWFUL
ARREST
 The Rules of Court provides that a
person lawfully arrested may be
searched for dangerous weapons or
anything which may be used as proof
of the commission of an offense,
without a Search Warrant. (Rule 126,
Sec. 13).
 Purpose is to protect the officer from
being harmed by the person arrested
and to prevent him from destroying
evidence within reach.
Requisites:
1. Arrest precedes the search;
2. There is probable cause to effect the
arrest and the subsequent search.
 When the arrest precedes the search,
the arresting officer must have seen
the overt act indicative of criminal
activity.
 However, if search precedes the arrest,
probable cause to do so is sufficient.
  Permissible area of search: Search
incidental to lawful arrest may extend
beyond the person of the arrested so
as to include the premises or
surroundings under his immediate
control. (People v. Tiu Won Chua, 405
SCRA 280; People v. Estella, 395 SCRA
553)
 Accused was searched and arrested
while transporting prohibited drugs
(hashish). A crime was actually being
committed by the accused and he was
caught in flagrante delicto. Thus, the
search made upon his personal effects
falls squarely under paragraph (1) of
the foregoing provisions of law, which
allow a warrantless search incident to a
lawful arrest (People v. Maelmstedt,
198 SCRA 401 [1991])
2. SEARCH OF A MOVING VEHICLE
 Carroll vs. United States 267 US 132
(1925): Carroll doctrine: a vehicle
could be searched without a search
warrant if there was probable cause to
believe that evidence is present in the
vehicle, coupled with exigent
circumstances to believe that the
vehicle could be removed from the
area before a warrant could be
obtained (People vs. Tampis, 407 SCRA
582).
3. SEIZURE IN PLAIN VIEW
Requisites:
1. Prior valid intrusion – May be based on
the valid warrantless arrest where the
police are legally present in the pursuit
of official duties;
2. Evidence was inadvertently discovered
– Discovered by the police who have
the right to be there;
3. Evidence must be immediately
apparent – Illegality of the object is
immediately apparent. There exists a
nexus between the viewed object and
criminal activity. IOW, there is
probable cause to associate the
property with criminal activity;
4. “Plain view” justified the seizure
without any further search – “Plain
view” if the object is plainly exposed to
15
sight. Not in “plain view” if inside a
closed package, unless the package
proclaims its contents by its distinctive
configuration, transparency or if its
contents are obvious to an observer. If
the package is such that an
experienced observer could infer
prohibited articles from its appearance,
then the article is deemed in plain
view.
 NOTE: Plain view not literally exclusive
to “view”, it may also refer to smell,
touch, etc. The search is considered
over when the operatives are already
making an inventory.
 If the seized materials were not illegal
per se and were presented as evidence
in the case, you may ask the court to
order its release. Prior to presentation
of the case, however, replevin may lie.
 The counterfeit nature of the seals and
stamps was not apparent and
established until after they have been
turned over to the Chinese embassy
and the Bureau of Immigration for
verification. Hence, not considered as
evidence in plain view (People vs. Go,
411 SCRA 81)
4. CUSTOMS SEARCH
 Customs searches are allowed when
persons exercising police authority
under the customs law effect search
and seizure in the enforcement of
customs laws (Salvador vs. PP, July 15,
2005).
5. CONSENTED SEARCH
Requisites:
a. Right to be waived exists;
b. Person waiving has knowledge of such
right, actually or constructively; and
c. He/she has actual intention to
relinquish the right.
 Consent must be intelligently given and
voluntary. It must be shown by clear
and convincing evidence which the
State has the burden to prove.
Whether the consent was voluntary is a
 question of fact, determined from the
totality of the circumstances.
 NOTE: Waiver must be given by the
person whose right is violated
 It is the State which has the burden of
proving, by clear and positive
testimony, that the necessary consent
was obtained and that it was freely and
voluntarily given (Valdez vs. People,
538 SCRA 611)
6. STOP AND FRISK (TERRY SEARCH)
Requisites:
a. Police officer should properly introduce
himself and make initial inquiries
b. Approach and restrain a person who
manifests unusual and suspicious
conduct to check the latter’s outer
clothing for concealed weapons
c. Search and seizure must precede the
arrest: Police officer must have a
genuine reason in accordance with his
experience and the surrounding
conditions, to warrant the belief that
the person to be held has weapons or
contraband concealed. In some cases,
the warrantless search and seizure
preceded the arrest was held valid by
the SC as it was effected on the basis
of probable cause (see Posadas v CA,
188 SCRA 288; People v Tangliben,
184 SCRA 220). However, it was not
termed by the SC strictly as “stop and
frisk”.
7. CHECKPOINTS
 Limited to visual search (People v.
Escaño, GR No. 129756-58, January
28, 2000);
Two kinds of Checkpoint search:
1. Mere routine inspection: Permissible
when it is limited to a mere visual
search or visual inspection
Search is limited to:
a. Officer merely draws aside the curtain
of a vacant vehicle parked on the
public fair grounds
b. Officer simply looks into a vehicle
16
c. Officer flashes a light therein without
opening the doors
d. Occupants are not subjected to a
physical or body search
e. Routine check is conducted in a fixed
area
2. Extensive search
 Permissible only if the officers
conducting it had reasonable or
probable cause to believe, before the
search, that either the motorist is a law
offender or they will find the
instrumentality or evidence pertaining
to a crime in the vehicle to be searched
(e.g., when they receive confidential
reports from a reliable source or smell
marijuana in the vehicle)
8. EXIGENT AND EMERGENCY
CIRCUMSTANCES
 Where a warrantless search was
allowed where there was a prevailing
general chaos and disorder because of
an ongoing coup (People v. De Gracia,
233 SCRA 716).
9. ROUTINE AIRPORT SECURITY
PROCEDURE
 Under RA 6235, every ticket issued to
a passenger by the airline contains a
condition that the holder and his hand-
carried luggage are subject to search
and seizure of prohibited materials.
Holders refusing shall not be allowed to
board the aircraft. This condition
constitutes a contract between the
passenger and the airline (People v.
Suzuki, G.R. No. 120370, October 23,
2003; People v. Johnson, G.R. No.
138881, December 18, 2000).
ARRESTS
 Arrest is the taking of a person into
custody in order that he may be bound
to answer for the commission of an
offense. (ROC, Rule 113, § 1)
 Probable Cause in Arrests: Probable
cause is such set of facts and
circumstances as would lead a
reasonably discreet and prudent man
 to believe that the offense charged in
the Information or any offense included
therein has been committed by the
person sought.
Personal Evaluation of the Report and the
Supporting Documents
 The Judge Not Required to Personally
Examine the Complainant and His
Witnesses, this is only required in the
issuance of Search Warrants
 What the Constitution underscores is
the exclusive and personal
responsibility of the issuing judge to
satisfy himself of the existence of
probable cause. In satisfying himself of
the existence of probable cause for the
issuance of a warrant of arrest, the
judge is not required to personally
examine the complainant and his
witnesses. Following established
doctrine and procedure, he shall:
1. Personally evaluate the report and the
supporting documents submitted by
the fiscal regarding the existence of
probable cause and on the basis
thereof, issue a warrant of arrest; or
2. If on the basis thereof he finds no
probable cause, he may disregard the
fiscal’s report and require the
submission of supporting affidavits of
witnesses to aid him in arriving at a
conclusion as to the existence of
probable cause. (AAA v. Carbonell,
G.R. No. 171465, June 8, 2007;
Soliven v. Makasiar, 167 SCRA 393
[1988])
Time of Making Arrest
 An arrest may be made on any day and
at any time of the day or night. (ROC,
Rule 113, § 6)
 Method of Arrest by Officer by Virtue of
Warrant: When making an arrest by
virtue of a warrant, the officer shall
inform the person to be arrested of the
cause of the arrest and the fact that a
warrant has been issued for his arrest,
except when he flees or forcibly resists
before the officer has opportunity to so
inform him, or when the giving of such
information will imperil the arrest.
17
 The officer need not have the warrant
in his possession at the time of the
arrest but after the arrest, if the
person arrested so requires, the
warrant shall be shown to him as soon
as practicable. (ROC, Rule 113, § 7)
Arrests Without Warrants, When Allowed
1. In Flagrante Delicto arrests
2. Hot Pursuit
3. Escapee from a jail
 Under the Rules, a warrant of arrest
need not be issued if the information or
charge was filed for an offense
penalized by a fine only. As a corollary,
neither can a warrantless arrest be
made for such an offense. In this case,
the officer’s issuance (or intent to
issue) a traffic citation ticket negates
the possibility of an arrest for the same
violation (Luz vs. People, GR No.
197788, February 29, 2012).
1. IN FLAGRANTE DELICTO
Requisites:
a. Person to be arrested must execute an
overt act indicating he had just
committed, is actually committing or is
attempting to commit a crime, and
b. Such overt act was done in the
presence of or within the view of the
arresting officer
 NOTE: Not just limited to sight.
Hearing is already considered now.
 Where the accused-appellant was not,
at the moment of his arrest,
committing a crime, the warrantless
arrest effected on him was invalid. It
was not shown that he was about to
commit a crime or that he had just
done so. What he was doing was
descending the gangplank of the M/V
Wilcon 9 and there was no outward
indication that called for his arrest. To
all appearances, he was like any of the
other passengers innocently
disembarking from the vessel. It was
only when the informer pointed to him
as the carrier of the marijuana that he
suddenly became suspect and so
subject to apprehension. It was the
furtive finger that triggered his arrest.
 The Identification by the informer was
the probable cause as determined by
the officers (and not a judge) that
authorized them to pounce upon
Aminnudin and immediately arrest him.
(People v. Aminnudin, 163 SCRA 402
[1988])
 At the time of the arrest in question,
the accused was merely “looking from
side to side” and “holding his
abdomen”. There was apparently no
offense that has just been committed
or was being actually committed or at
least being attempted by Mengote in
their presence. Thus, the warrantless
arrest was invalid (People v. Mengote,
G.R. No. 8759, June 22, 1992).
 The accused was caught in possession
of hashish, a prohibited drug. He was
caught in flagrante delicto. The overt
act committed to sustain the validity of
the arrest was when the police officer
dipped his finger in the bag, and
smelled what seemed to be dangerous
drugs. There was therefore probable
cause to effect the arrest. Thus, the
warrantless arrest effected on him was
valid (People vs. Maelmstedt, 198
SCRA 401 [1991]).
2. HOT PURSUIT
Requisites:
a. The pursuit of the offender by the arresting
officer must be continuous from the time of the
commission of the offense to the time of the
arrest.
b. There must be no supervening event which
breaks the continuity of the chase.
 Personal knowledge of facts in
warrantless arrests must be based on
probable cause. This means an actual
belief or reasonable grounds of
suspicion supported by circumstances
sufficiently strong in themselves to
warrant a reasonable man in believing
the accused to be guilty. Reasonable
suspicion must be founded on probable
cause, coupled with good faith of the
peace officer making the arrest.
 There must be a large measure of
immediacy between the time of the
offense was committed and the time of
18
the warrantless arrest. If there was a
significant lapse of time between the
arrest and the commission of the
crime, a warrant of arrest must be
secured (People v. Del Rosario, 305
SCRA 740)
3. ESCAPEE FROM A JAIL
 A person may be arrested without a
warrant if he or she is a prisoner who
has escaped from a penal
establishment or place where he or she
is serving final judgment or temporarily
confined while his or her case is
pending or has escaped while being
transferred from one confinement to
another.
 This is based on the theory that an
escapee from jail is committing a
continuing crime, i.e., Evasion of
Service of Sentence (Art. 157, Revised
Penal Code).
Exclusionary Rule
 All evidence obtained in violation of
Sec. 2, Art. III shall be inadmissible for
any purpose in any proceeding
(Stonehill v. Diokno, 20 SCRA 383
[1967]).
 The Fruit of the Poisonous Tree: The
Exclusionary Rule is also extended to
exclude evidence which is derived or
directly obtained from that which was
illegally seized (Cruz, Constitutional
Law, 2015 Ed.).
Effects of Unreasonable Searches and Seizures
Unlawful search
 Police officers arrived at appellant’s
residence and “side-swiped” appellant’s
car (which was parked outside) to gain
entry into the house. Appellant’s son,
who is the only one present in the
house, opened the door and was
immediately handcuffed to a chair after
being informed that they are policemen
with a warrant to search the premises
(People v. Benny Go, G.R. No. 144639,
Sept. 12, 2003).
 Consequences of an unlawful search:
An unlawful search will result in the
 exclusion from admission as evidence
of that which was obtained from such
unlawful search and seizure.
Effects of Illegal Detention
The invalidity of an arrest leads to several
consequences among which are:
1. The failure to acquire jurisdiction over
the person of an accused;
2. Criminal liability of law enforcers for
illegal arrest; and
3. Any search incident to the arrest
becomes invalid thus rendering the
evidence acquired as constitutionally
inadmissible. (Sapi v. People, G.R. No.
200370, June 7, 2017)
 Questions arising from the invalidity of
the arrest must be raised before the
arraignment of the accused on motion
to quash, Otherwise, failure to raise
such objection is tantamount to a
waiver of such right.
 Furthermore, aside from the invalidity
of the arrest, the arresting officers may
be liable for Arbitrary Detention or
Delay in the Delivery of Detained
Persons to the Proper Judicial
Authorities, or Delaying Release, of
which are punished under Article 124-
126 of the Revised Penal Code.
FREEDOM OF SPEECH AND EXPRESSION
Section 4. No law shall be passed
abridging the freedom of speech, of
expression, or of the press, or of the right
of the people peaceably to assemble and
petition the government for redress of
grievances.
Scope
 Freedom of expression has gained
recognition as a fundamental principle
of every democratic government, and
given a preferred right that stands on a
higher level than substantive economic
freedom or other liberties. In the
Philippines, the primacy and high
esteem accorded freedom of
expression is a fundamental postulate
of our constitutional system. This right
was elevated to constitutional status in
19
the 1935, the 1973 and the 1987
Constitutions, reflecting our own lesson
of history, both political and legal, that
freedom of speech is an indispensable
condition for nearly every other form of
freedom. (Chavez v. Gonzales, G.R.
No. 168338, Feb. 15, 2008)
 Speech is not limited to vocal
communication. Conduct is treated as a
form of speech sometimes referred to
as “symbolic speech,” such that when
“speech” and “non-speech” elements
are combined in the same course of
conduct, the communicative element of
the conduct may be sufficient to bring
into play the right to freedom of
expression.
Types of Regulation
Prior Restraint and Subsequent Punishment
PRIOR RESTRAINT (CENSORSHIP)
 Prior restraint refers to official
governmental restrictions on the press
or other forms of expression in
advance of actual publication or
dissemination. Freedom from prior
restraint is largely freedom from
government censorship of publications,
whatever the form of censorship, and
regardless of whether it is wielded by
the executive, legislative or judicial
branch of the government. (Chavez v.
Gonzales, G.R. No. 168338, Feb. 15,
2008)
 Presumed Invalid and Unconstitutional
 GR: Any system of prior restraints of
expression comes to court bearing a
heavy presumption against its
constitutional validity. The Government
thus carries a heavy burden of showing
justification for in enforcement of such
restraint. There, thus a reversal of the
normal presumption of validity that
inheres in every legislation. (SWS v.
COMELEC, G.R. No. 147571, May 5,
2001)
 XPN: The technical effect of Article IX
(C) (4) of the Constitution may be seen
to be that no presumption of invalidity
arises in respect of exercises of
supervisory or regulatory authority on
the part of the Comelec for the purpose
 of securing equal opportunity among
candidates for political office, although
such supervision or regulation may
result in some limitation of the rights of
free speech and free press (National
Press Club v. COMELEC, G.R. No.
102653, March 5, 1992)
SUBSEQUENT PUNISHMENT
 The aspect of freedom from liability
subsequent to publication precludes
liability for completed publications of
views traditionally held innocent.
 Otherwise, the prohibition on prior
restraint would be meaningless, as the
unrestrained threat of subsequent
punishment, by itself, would be an
effective prior restraint.
 Thus, opinions on public issues cannot
be punished when published, merely
because the opinions are novel or
controversial, or because they clash
with current doctrines. This fact does
not imply that publishers and editors
are never liable for what they print.
Such freedom gives no immunity from
laws punishing scandalous or obscene
matter, seditious or disloyal writings,
and libelous or insulting words.
(Bernas, 2009)
CONTENT-NEUTRAL REGULATION
 A content-neutral regulation is merely
concerned with the incidents of the
speech, or one that merely controls the
time, place or manner, and under well-
defined standards. (Chavez v.
Gonzales, G.R. No. 168338, Feb. 15,
2008)
Subject to Intermediate Approach
 When the speech restraints take the
form of a content-neutral regulation,
only a substantial governmental
interest is required for its validity.
Intermediate Approach: O’Brien Test for a
Valid Content-Neutral Regulation
A governmental regulation is sufficiently
justified if:
1. It is within the Constitutional power of
the Government;
20
2. It furthers an Important or Substantial
governmental interest;
3. The governmental interest is Unrelated
to the suppression of free expression;
and
4. The incident restriction on alleged
freedom of speech & expression is NO
Greater than is essential to the
furtherance of that interest. (Chavez v.
Gonzales, G.R. No. 168338, Feb. 15,
2008)
Speech of Public Officers
 Parliamentary immunity guarantees
the members of Congress the freedom
of expression without fear of being held
responsible in criminal or civil actions
before courts or fora outside of
Congress, but this does not protect
them from being held responsible by
the legislative body. The members may
nevertheless be questioned in Congress
itself.
 For unparliamentary conduct, members
of the Congress have been or could be
censured, committed to prison, or even
expelled by the votes of their
colleagues (Osmeña v. Pendatun, G.R.
No. L-17144, Oct. 28, 1960)
 Civil Service Does Not Deprive
Government Workers of their Freedom
of Expression. Government workers,
whatever their ranks, have as much
right as any person in the land to voice
out their protests against what they
believe to be a violation of their rights
and interests. Civil Service does not
deprive them of their freedom of
expression. It would be unfair to hold
that by joining the government service,
the members thereof have renounced
or waived this basic liberty. This
freedom can be reasonably regulated
only but can never be taken away.
(GSIS v. Villaviza, G.R. No. 180291,
July 27, 2010)
 It is correct to conclude that those who
enter government service are
subjected to a different degree of
limitation on their freedom to speak
their mind; however, it is not
tantamount to the relinquishment of
their constitutional right of expression
 otherwise enjoyed by citizens just by
reason of their employment.
 Unarguably, a citizen who accepts
public employment must accept certain
limitations on his or her freedom. But
there are some rights and freedoms so
fundamental to liberty that they cannot
be bargained away in a contract for
public employment. It is the Court’s
responsibility to ensure that citizens
are not deprived of these fundamental
rights by virtue of working for the
government.
 In simple paraphrase, regulation of the
freedom of expression is not removal
of the constitutional right. (Davao City
Water District v. Aranjuez, G.R. No.
194192, June 16, 2015)
RIGHTS DURING EXPROPRIATION
Section 9. Private property shall not be
taken for public use without just
compensation.
Requisites for Valid Expropriation
1. Private property
2. Genuine necessity - inherent/presumed
in legislation, but when the power is
delegated (e.g. local government
units), necessity must be proven.
3. For public use - Court has adopted a
broad definition of “public use”
4. Payment of just compensation
5. Due process (Manapat v. CA, supra)
Public Use
 Public use may also cover uses which,
while not directly available to the
public, redound to their indirect
advantage or benefit.
 Taking of property for socialized
housing is for public use. (Reyes v.
National Housing Authority, 395 SCRA
494)
III. COMPOSITION AND POWERS OF
GOVERNMENT ORGANS
LEGISLATIVE DEPARTMENT (ART. VI)
LEGISLATIVE POWER
21
Scope and Limitations
SECTION 1. The legislative power shall be
vested in the Congress of the Philippines
which shall consist of a Senate and a
House of Representatives, except to the
extent reserved to the people by the
provision on initiative and referendum.
Nature of Legislative Power
 Legislative power is the authority to
make, alter and repeal laws. (PHIL.
CONST., art. VI, § 1.)
Classification of Legislative Power:
1. Constituent - the power to
propose amendments to the
Constitution
2. Ordinary - the power to pass
ordinary laws
3. Original - possessed by the people
in their sovereign capacity,
exercised via initiative and
referendum.
4. Delegated - possessed by
Congress and other legislative
bodies by virtue of the
Constitution; subordinate to the
original power of the people who
delegated the same
Who Exercises Legislative Power:
1. Congress
 Legislative power is vested in
Congress, which consists of the Senate
and the House of Representatives.
General Plenary Power of Congress
 The grant of legislative power to
Congress is broad, general and
comprehensive. The legislative body
possesses plenary power for all
purposes of civil government. Any
power, deemed to be legislative by
usage and tradition, is necessarily
possessed by Congress, unless the
Constitution has lodged it elsewhere.
Except as limited by the Constitution,
either expressly or impliedly, legislative
power embraces all subjects and
extends to matters of general concern
or common interest. (Ople v. Torres,
G.R. No. 127685, July 23, 1998)
2. Local Legislative Body of Congress and of the people, also
through initiative and referendum.
 Local legislative bodies are allowed by  The exercise of constituent power does
the Constitution to legislate on purely not need the approval of the Chief
public matters. Executive, whereas the exercise of
 Since what was given to local legislative power ordinarily needs the
legislative bodies is not power to make approval of the Chief Executive, except
rules and regulations but legislative when done by people through initiative
power, the rules on valid delegation do and referendum.
not apply. However, when what is
given to a local legislative body is 2. LEGISLATIVE POWER
executive power, the rules applicable
to the empowerment of administrative  Power of Congress to create, amend or
agencies also becomes applicable (Rubi repeal laws/statutes
v. Provincial Board, G.R. No. L-14078.  The legislative power of Congress is so
March 8, 1919). plenary. The only limit of Congress’
Composition: legislative power is the Constitution.
Congress cannot make laws that
1. Senate:24 who are elected at large contravene the Constitution.
by the qualified voters of the  The Congress cannot also make
Philippines. (PHIL. CONST., Art. VI, irrepealable laws.
§ 2.)
2. HOR: Not more than 250 Legislative Inquiries and Oversight Functions
members, unless otherwise fixed Scope
by law, consisting of:
a. District Representatives: elected from 1. The power of legislative investigation
legislative districts apportioned among includes:
the provinces, cities and the 2. Power to issue summons and notices;
Metropolitan Manila area 3. Power to punish or declare a person in
b. Party-list Representatives: shall contempt
constitute 20% of the total number of 4. The power to determine the rules of its
the members of the House of proceedings
Representatives including those under
the party-list. Limitations: (ADR)

POWERS OF CONGRESS 1. The inquiry must be in Aid of

legislation.
1. CONSTITUENT POWER 2. The inquiry must be conducted in
accordance with the Duly published
 Constituent power is the power to rules of procedure of the House
formulate a Constitution or to propose conducting the inquiry; and
amendments to or revisions of the 3. The rights of persons appearing in or
Constitution and to ratify such affected by such inquiries shall be
proposal. Legislative power is the Respected. (e.g., right to due process,
power to pass, repeal or amend or right against self- incrimination)
ordinary laws or statutes (as opposed (Bernas,2009).
to organic law).
 Constituent power is exercised by Nature and Purpose
Congress (by special constitutional  The power of inquiry with process to
conferment), by a Constitutional enforce it is an essential and
Convention or Commission, by the appropriate auxiliary to the legislative
people through initiative and function. A legislative body cannot
referendum, and ultimately by legislate wisely or effectively in the
sovereign electorate, whereas absence of information respecting the
legislative power is an ordinary power conditions which the legislation is

22
 intended to effect or change; and and, thus, legislate wisely and
where the legislative body does not effectively; and to determine whether
itself possess the requisite information there is a need to improve existing
which is not infrequently true recourse laws or enact new or remedial
must be had to others who do possess legislation, albeit the inquiry need not
it. (Arnault v. Nazareno, G.R. No. L- result in any potential legislation. On-
3820, July 18, 1950) going judicial proceedings do not
 Legislative inquiries must be conducted preclude congressional hearings in aid
in aid of legislation which does not of legislation. (Romero v. Estrada, G.R.
necessarily mean that there is pending No. 174105, April 2, 2009)
legislation regarding the subject of the
inquiry. Hence, the materiality of a 3. OVERSIGHT FUNCTIONS (PHIL.
question is determined not by its CONST., Art. VI, § 22.)
connection to any pending legislation,
but by its connection to the general  Section 22 pertains to the power to
scope of the inquiry. (Bengzon v. conduct a question hour, the objective
Senate Blue Ribbon Committee, G.R. of which is to obtain information in
No. 89914, Nov. 20, 1991) pursuit of Congress' oversight function.
 Question Hour Appearance of
Compulsory Process department heads before Congress to
 The power of legislative investigation give account of their stewardship
includes the power to compel the (Bernas, 2009).
attendance of witnesses. Corollary to  Under Section 22, department heads
the power to compel the attendance of (members of the Executive
witnesses is the power to ensure that Department) cannot be compelled to
said witnesses would be available to appear before Congress. Neither may
testify in the legislative investigation. department heads impose their
(Standard Chartered Bank v. Senate appearance upon Congress. This is in
Committee on Banks, G.R. No. 167173, line with the principle of separation of
Dec. 27, 2007). powers.
 Department Heads May appear before
Right against Self-Incrimination Congress in the Following Instances:

 A subpoenaed witness cannot refuse to a. Upon their own initiative, with the
attend a legislative inquiry by invoking consent of the President (and that of
his or her right against self- the House concerned)
incrimination. Such right may be b. Upon the request of either House
invoked only when the incriminating c. Written questions shall be submitted to
question is being asked, since they the President of the Senate or Speaker
have no way of knowing in advance the of the House at least 3 days before the
nature or effect of the questions to be scheduled appearance of the
asked of them. (Sabio v. Gordon, G.R. department heads.
No. 174340, Oct. 17, 2006).  Interpellations shall not be limited to
 A legislative investigation in aid of written questions, but may cover
legislation and court proceedings have related matters.
different purposes. On one hand,
courts conduct hearings or like The inquiry will be conducted in executive
adjudicative procedures to settle, session when:
through the application of a law, actual
controversies arising between adverse a. Required by the security of state, or
litigants and involving demandable public interest, and
rights. On the other hand, inquiries in b. When the President so states in
aid of legislation are, inter alia, writing.
undertaken as tools to enable the  There is no such thing as a “question
legislative body to gather information hour” in the Constitution (It is a

23
 parliamentary concept and practice). 1.
The distinction in legislative hearings is
between investigative function and
oversight function. (Senate v. Ermita,
G.R. No. 169777, April 20, 2006). 2.
Question Hour vs. Legislative Investigation
 Sections 21 and 22, while closely
related and complementary to each
other, should not be considered as
pertaining to the same power of 3.
Congress. One specifically relates to
the power to conduct inquiries in aid of
legislation, the aim of which is to elicit
information that may be used for
legislation, while the other pertains to
the power to conduct a question hour,
the objective of which is to obtain
information in pursuit of Congress’ 4.
oversight function. (Neri v. Senate,
G.R. No. 180643, March 25, 2008)
 Under Section 22, in keeping with the
separation of powers, states that
Congress may only request their Exclusive Power to Try and Decide
appearance. Nonetheless, when the
inquiry in which Congress requires 1.
their appearance is "in aid of
legislation" under Section 21, the
appearance is mandatory (Senate v.
Ermita, G.R. No. 1697
NON-LEGISLATIVE POWERS OF CONGRESS 2.
1. Informing function
 The power of Congress, when it a.
b.
investigates, is not limited to oversight
or in aid of legislation. Equally
important and a fundamental power
and duty of Congress is its informing
function by way of investigating for the Officers Subject to
purpose of enlightening the electorate. CONST., Art. IX, § 2.)
The informing function of Congress
should be preferred even to its 1.
legislative function [for] the only really 2.
self-governing people is that people 3.
which discusses and interrogates its 4.
administration (Akbayan v. Aquino,
G.R. 170516, July 16, 2008) 5.
2. Impeachment Power Grounds for Impeachment (PHIL. CONST., Art.
IX,§2)
Impeachment Process
1.
2.
24
The House of Representatives shall
have the exclusive power to initiate all
cases of impeachment (PHIL. CONST.,
Art. IX, § 3(1).)
The impeachment proceedings begin
with a complaint filed with the House of
Representatives either by a member of
the House or by any citizen supported
by a resolution of endorsement by any
member.
The complaint is referred to a
Committee which prepares a report
(which can be favorable or
unfavorable). In either case, the House
by a vote of 1/3 of all its members
decides whether the complaint should
be given due course. (PHIL. CONST.,
Art. IX, § 3(2 & 3).)
Referral to the Committee and decision
by the House is unnecessary if the
complaint is filed by at least 1/3 of all
the members of the house (PHIL.
CONST., art. IX, § 3(4).)
The Senate shall have the sole power
to try and decide all cases of
impeachment. No person shall be
convicted without the concurrence of
2/3 of all the Members of the Senate
(PHIL. CONST., art. IX, § 3(6).)
The penalty imposable shall go no
further than:
Removal from office and
Disqualification to hold any office under
the Republic of the Philippine (PHIL.
CONST., art. IX, § 3(7).)
Impeachment (PHIL.
President
Vice President
Members of the Supreme Court
Members of the Constitutional
Commissions (CSC, COA, COMELEC)
Ombudsman
Culpable Violation of the Constitution
Treason
 3. Bribery
4. Graft and Corruption
5. Other High Crimes
6. Betrayal of Public Trust
 By virtue of the expanded judicial
review (Sec. 1[2], Art. VIII), the
Court’s power of judicial review
extends over justiciable issues arising
in impeachment proceedings (Francisco
v. House of Representatives, G.R. No.
160261, November 10, 2003).
 BUT the question of whether or not
Senate Impeachment Rules were
followed is a political question (Corona
v. Senate, G.R. No. 200242, July 17,
2012).
EXECUTIVE DEPARTMENT
 Article VII, Section 1, of the 1987
Constitution vests executive power on
the President of the Philippines. The
President is the Head of State and
Head of Government, and functions as
the commander-in-chief of the Armed
Forces of the Philippines. As chief
executive, the President exercises
control over all the executive
departments, bureaus, and offices.
The President of The Philippines
 The President of the Philippines is
elected by direct vote by the people for
a term of six years. He may only serve
for one term, and is ineligible for
reelection. The term of the President of
the Philippines starts at noon of the
30th day of June after the election.
POWERS OF THE PRESIDENT
1. General Executive and
Administrative Powers
 The Constitution provides that "The
executive power shall be vested in the
President of the Philippines.” However,
it does not define what is meant by
executive power although in the same
article it touches on the exercise of
certain powers by the President, i.e.,
the power of control over all executive
departments, bureaus and offices, the
power to execute the laws, the
25
appointing power, the powers under
the commander-in-chief clause, the
power to grant reprieves,
commutations and pardons, the power
to grant amnesty with the concurrence
of Congress, the power to contract or
guarantee foreign loans, the power to
enter into treaties or international
agreements, the power to submit the
budget to Congress, and the power to
address Congress.
 The President’s Executive powers are
not limited to those set forth in the
Constitution. The President has
residual powers as the Chief Executive
of the country, which powers include
others not set forth in the Constitution
(Marcos v. Manglapus, G.R. No. 88211,
Sept. 15, 1989).
2. Power of Appointment
In General
Nature of the Power to Appoint:
 Executive in nature; while Congress
(and the Constitution in certain cases)
may prescribe the qualifications for
particular offices, the determination of
who among those who are qualified will
be appointed is the President’s
prerogative.
 In case of vacancy in an office occupied
by an alter ego of the President, such
as the office of a department secretary,
the President must necessarily appoint
an alter ego of her choice as acting
secretary before the permanent
appointee of her choice could assume
office. Congress, through a law, cannot
impose on the President the obligation
to appoint automatically the
undersecretary as her temporary alter
ego. An alter ego, whether temporary
or permanent, holds a position of great
trust and confidence. Congress, in the
guise of prescribing qualifications to an
office, cannot impose on the President
who her alter ego should be (Pimentel
v. Ermita, G.R. No. 164978, Oct. 13,
2005).
Elements of a valid appointment:
 1. Authority to appoint and evidence of Constitution (Calderon v. Carale, 208
the exercise of authority; SCRA 254 [1992]).
2. Transmittal of the appointment paper  Appointments upon recommendation of
and evidence of the transmittal the Judicial and Bar Council (does not
(preferably through the Malacañang require confirmation by the
Records Office); Commission on Appointments):
3. Vacant position at the time of  Members of the Supreme Court and all
appointment; other courts [Sec 9, Art. VIII] (Note:
4. 4Receipt of the appointment papers the appointment must be made 90
and acceptance of the appointment by days from when the vacancy occurs
the appointee who possesses all [Sec 4(1), Art. VIII])
qualifications and none of the  For lower courts, appointments shall be
disqualifications (Velicaria-Garafil v. issued within 90 days from submission
Office of the President, G.R. No. of the list.
203372, June 16, 2015).  Ombudsman and his 5 deputies (for
Luzon, Visayas, Mindanao, general and
Four Groups of Officers who the President may military) [Sec 9, Art. XI]
appoint:
Limitations on the Power of Appointment
1. With Consent of the Commission on
Appointments: The President may not appoint his/her spouse
a. Heads of the executive departments and relatives by consanguinity or affinity within
b. Ambassadors, other public ministers the 4th civil degree as members of the:
and consuls
c. Officers of the armed forces from the 1. Constitutional Commissions
rank of colonel or naval captain 2. Ombudsman
d. Other officers whose appointments are 3. Department Secretaries
vested in him by the Constitution: 4. Undersecretaries
e. Regular Members of the JBC (ex-officio 5. Chairmen and heads of
members do not need the confirmation Bureaus and Offices
of the CA) 6. GOCCs (PHIL. CONST., art. VII,
f. Chairman and Commissioners of the § 13)
CSC, COMELEC, and COA.
g. Members of the Regional and  Appointments extended by an acting
Consultative Commissions President shall remain effective unless
revoked by the elected President within
2. All other officers of the government 90 days from assumption of office
whose appointments are not otherwise (PHIL. CONST., Art. VII, § 14)
provided by law;  Two months immediately before the
3. Those whom the President may be next Presidential elections and up to
authorized by law to appoint; and (e.g. the end of his/her term, a President or
Chairman and Members of the Acting President shall not make
Commission on Human Rights) appointments except temporary
appointments to executive positions
4. Officers lower in rank whose when continued vacancies therein will
appointments Congress may by law prejudice public service or endanger
vest in the President alone (Sarmiento public safety (PHIL. CONST., Art. VII, §
III v. Mison, G.R. No. 79974, 15).
December 17, 1987).  Prohibition against Midnight
Appointments applicable to Presidential
 Consent of the Commission on Appointments only
Appointments is not required for 2, 3,  The prohibition on midnight
and 4 as these are not positions whose appointments under Article VII, Sec 15
appointments are granted by the only applies to presidential
appointments. It does not apply to

26
 appointments made by local chief
executives. Nevertheless, the Civil
Service Commission has the power to
promulgate rules and regulations to
professionalize the civil service. It may
issue rules and regulations prohibiting
local chief executives from making
appointments during the last days of
their tenure.
 Appointments of local chief executives
must conform to these civil service
rules and regulations in order to be
valid. (Provincial Government of Aurora
v Marco, G.R. No. 202331, April 22,
2015)
Ad-Interim Appointments (PHIL. CONST., art
VII,§ 16)
 When Congress is in recess, the
President may still appoint officers to
positions subject to CA confirmation.
These appointments are effective
immediately, but are only effective
until they are disapproved by the CA or
until the next adjournment of Congress
 When an ad-interim position is by-
passed because of law of time or
failure of the Commission to organize,
there is no final decision, the President
is free to renew the ad-interim
appointment.
 When the Commission disapproves an
ad interim appointment, the appointee
can no longer be extended a new
appointment, inasmuch as the
disapproval is a final decision in the
exercise of the Commission’s checking
power on the appointment authority of
the President.
 GR: The express power of appointment
of the President has the corollary
implied power of removal. Hence, the
President may remove appointees.
 XPN: Appointments requiring certain
methods for removal (e.g.,
Impeachment, appointment of judges
of inferior courts (PHIL. CONST., Art.
VIII, § 11; Gonzales III vs. Office of
the President, G.R. No. 196231, Sept.
4, 2012).
3. Power of Control and Supervision
 Power of Control- The power of an
officer to alter, modify, or set aside
27
what a subordinate officer has done in
the performance of his duties, and to
substitute the judgment of the officer
for that of his subordinate.
 The President’s power of control is a
self-executing-provision. The
incumbent President is free to amend,
rescind and modify any political
agreements entered into by the
previous Presidents (Ocampo v.
Enriquez, G.R. No. 225973, Nov. 8,
2016).
 Power of Supervision- The power of a
superior officer to ensure that the laws
are faithfully executed by subordinates.
The power of supervision does not
include the power of control; but the
power of control necessarily includes
the power of supervision.
 Doctrine of Qualified Political Agency -
Acts of department heads, etc.,
performed and promulgated in the
regular course of business, are
presumptively acts of the President.
Exceptions:
a. If the acts are disapproved or
reprobated by the President.
b. If the President is required to act in
person by law or by the Constitution
(e.g., the power to grant pardons).
Local Government Units
 The power of the president over local
government units is only of general
supervision. He can interfere with the
actions of their executive heads only if
these are contrary to law.
 The President exercises direct
supervision over autonomous regions,
provinces, and independent cities.
 To facilitate the exercise of power of
general supervision of local
government, the President may merge
administrative regions and transfer the
regional center to Koronadal City from
Cotabato City (Republic v. Bayao, G.R.
No. 179492, June 5, 2013).
4. Emergency Powers
 Congress is the repository of
emergency powers. But in times of war
or other national emergency, it may,
 by law, authorize the President, for a
limited period and subject to such
restrictions as it may prescribe, to
exercise powers necessary and proper
to carry out a declared national policy.
 Unless sooner withdrawn by resolution
of the Congress, such powers shall
cease upon the next adjournment
thereof. (PHIL. CONST., Art. VI, §
23(2); IBP v. Zamora, G.R. No.
141284, Aug. 15, 2000)
Calling out Powers
Conditions for the Exercise of the President of
Emergency Powers (David v. Macapagal-
Arroyo, G.R. No. 171396, May 3, 2006)
a. There must be a war or national
emergency;
b. There must be a law authorizing the
President to exercise emergency
powers;
c. Exercise must be for a limited period;
d. Exercise must be necessary and proper
to carry out a declared national policy;
and
e. Must be subject to restrictions that
Congress may provide.
5. Commander-in-Chief Powers
Graduation of Powers
 The 1987 Constitution gives the
President a sequence of graduated
power[s]. From the most to the least
benign, these are: the calling out
power, the power to suspend the
privilege of the writ of habeas corpus,
and the power to declare martial law.
It must be stressed, however, that the
graduation refers only to hierarchy
based on scope and effect. It does not
in any manner refer to a sequence,
arrangement, or order which the
Commander-in-Chief must follow. This
so-called "graduation of powers" does
not dictate or restrict the manner by
which the President decides which
power to choose.
 The power to choose, initially, which
among these extraordinary powers to
wield in a given set of conditions is a
judgment call on the part of the
President.
 It is thus beyond doubt that the power
of judicial review does not extend to
28
calibrating the President's decision
pertaining to which extraordinary
power to avail given a set of facts or
conditions. To do so would be
tantamount to an incursion into the
exclusive domain of the Executive and
an infringement on the prerogative
that solely, at least initially, lies with
the President. (Lagman v. Medialdea,
G.R. No. 231658, July 4, 2017)
 As Commander-in-Chief of the Armed
Forces, whenever necessary, the
President may call out the Armed
Forces to PREVENT or SUPPRESS:
a. Lawless violence
b. Invasion
c. Rebellion
 Among the three extraordinary powers,
the calling out power is the most
benign and involves ordinary police
action. The power to call is fully
discretionary to the President; the only
limitations being that he acts within
permissible constitutional boundaries
or in a manner not constituting grave
abuse of discretion. In fact, the actual
use to which the President puts the
armed forces is not subject to judicial
review. (Lagman v. Medialdea, G.R.
No. 231658, July 4, 2017)
 The President's calling out power is in a
different category from the power to
suspend the privilege of the writ of
habeas corpus and the power to
declare martial law. In other words,
the President may exercise the power
to call out the Armed Forces
independently of the power to suspend
the privilege of the writ of habeas
corpus and to declare martial law,
although, of course, it may also be a
prelude to a possible future exercise of
the latter powers (Id.)
 Declaration of a State of Emergency:
The declaration of a state of
emergency is merely a description of a
situation that authorizes (the
President) to call out the Armed Forces
to help the police maintain law and
order. It gives no new power to her, or
 to the military, or to the police.
Certainly, it does not authorize
warrantless arrests or control of media
(David v. Macapagal-Arroyo, G.R. No.
171409, May 3, 2006).
Declaration of Martial Law and Suspension of
the Privilege of the Writ of Habeas Corpus;
Extension
Besides his calling out powers, the President
may also:
a. Suspend the privilege of the writ of
habeas corpus
b. Proclaim a state of martial law
 These are separate powers. They
must be expressly declared.
 Congress can revoke or extend the
proclamation of a state of Martial
law by a majority vote of all its
members voting JOINTLY.
 The Supreme Court has the power
to review the factual basis for the
proclamation of Martial Law upon
an appropriate proceeding filed by
ANY CITIZEN. (Meaning the
requirement of legal standing or
locus standi is done away with)
6. Executive Clemency
Nature and Limitation
 The matter of executive clemency is
non-delegable power and must be
exercised by the President personally
(Villena v. Secretary of the Interior,
G.R. No. L-46570, April 21, 1939).
 The power exists as an instrument for
correcting the infirmities in
administration of justice and for
mitigating whenever a strict application
of the provisions of the law will result
in undue harshness. (Bernas, 2009).
 The exercise of the pardoning power is
discretionary in the President and may
not be interfered with by Congress or
the Court, except only when it exceeds
the limits provided for by the
Constitution (Risos-Vidal v. COMELEC,
G.R. No. 206666, Jan. 21, 2015).
Limitations to Executive Clemency
29
 The President cannot be grant
executive clemency before conviction,
in cases of impeachment.
 For violations of election laws, rules,
and regulations without the favorable
recommendation of the COMELEC in
cases of civil or legislative contempt
 Executive Clemency can be granted
only after conviction by final judgment.
(People. v. Salle, G.R. No. 103567,
Dec. 4, 1995)
Forms of executive Clemency
1. PARDON- An act of grace, proceeding
from the power entrusted of the laws,
which exempts the individual on whom
it is bestowed, from the punishment
the law inflicts for a crime he has
committed. It is either conditional or
plenary.
2. AMNESTY - An act of grace concurred
in by Congress, usually extended to
groups of persons who commit political
offenses, which puts into oblivion the
offense itself. The President alone
cannot grant amnesty for it needs the
concurrence by a majority of all the
members of Congress.
When a person applies for amnesty, he must
admit his guilt of the offense that is subject to
such amnesty. If his application is denied, he
can be convicted based on this admission of
guilt.
7. Diplomatic Power
Power to Contract of Guarantee Foreign Loans
(PHIL. CONST., art. VII, § 20):
 The President may contract or
guarantee foreign loans on behalf of
the Republic of the Philippines with the
prior concurrence of the Monetary
Board; and subject to such limitations
as may be provided by law
 The Monetary Board shall, within 30
days from the end of every quarter of
the calendar year, submit to Congress
a complete report on loans to be
contracted or guaranteed by the
government.
8. Delegated Powers
GR: Legislative power is non-delegable.
XPNS (pertinent to the President):
1. The Congress may, by law, authorize
the President to fix within specified
limits, and subject to such limitations
and restrictions as it may impose, tariff
rates, import and export quotas,
tonnage and wharfage dues, and other
duties or imposts within the framework
of the national development program
of the Government. (PHIL. CONST.,
art. VI, § 28(2))
2. In times of war or other national
emergency, the Congress may, by law,
authorize the President, for a limited
period and subject to such restrictions
as it may prescribe, to exercise powers
necessary and proper to carry out a
declared national policy. Unless sooner
withdrawn by resolution of the
Congress, such powers shall cease
upon the next adjournment thereof.
(PHIL. CONST., art. VI, § 23(2))
9. Residual Powers
 The President shall exercise such other
powers and functions vested in the
President which are provided for under
the laws and which are not specifically
enumerated above, or which are not
delegated by the President in
accordance with law.
 The textual justification for this under
the Constitution is Article VII, Section
17 is to ensure that the laws are
faithfully executed- called the “Faithful
Execution Clause.”
 The power involved is the President's
residual power to protect the general
welfare of the people. It is founded on
the duty of the President, as steward of
the people. It is not only the power of
the President but also his duty to do
anything not forbidden by the
Constitution or the laws that the needs
of the nation demand. It is a power
borne by the President's duty to
preserve and defend the Constitution.
It also may be viewed as a power
implicit in the President's duty to take
care that the laws are faithfully
30
executed (Marcos v Manglapus, G. R.
No. 88211, Sept. 15, 1989).
10. Veto Powers
 The President must communicate his
decision to veto within 30 days from
the date of receipt thereof.
 If he fails to do so, the bill shall
become law as if he signed it. This rule
eliminates the possibility of a pocket
veto whereby the President simply
refuses to act on the bill.
 In exercising the veto power, the bill is
rejected and returned with his
objections to the House from which it
originated. The House shall enter the
objections in the journal and proceed
to reconsider it.
JUDICIAL DEPARTMENT
Judicial power
Judicial Power includes the duty of the courts
of justice to:
a. Settle actual controversies involving
rights which are legally demandable
and enforceable, and to
b. Determine whether or not there has
been a grave abuse of discretion
amounting to lack or excess of
jurisdiction on the part of any branch
or instrumentality of the Government.
[Sec. 1 (2) Art. VIII]
 It is vested in one Supreme Court and
in such other courts as may be
established by law. [Sec. 1, Art. VIII]
 When the grant of power is qualified,
conditional, or subject to limitations,
the issue of whether the prescribed
qualifications or conditions have been
met or the limitations respected, is
justiciable – the problem being one of
legality or validity, not on its wisdom
(IBP v. Zamora, 338 SCRA 81)
Composition of the Supreme Court:
 The Supreme Court is composed of one
Chief Justice and 14 Associate Justices.
Judicial Independence and Autonomy
Constitutional Provisions to Preserve the
Independence of the Judiciary:
 The Supreme Court is a constitutional
body; it may not be abolished nor may
its membership or the manner of its
meetings be changed by mere
legislation (Sec. 4(1), Art. VIII)
 The members of the Supreme Court
are removable only by impeachment
(Sec. 2, Art. XI)
 But take note of the case of Republic v.
Sereno (G.R. No. 237438, May 11,
2018) where the Supreme Court ruled
that Quo warranto is also a remedy to
oust an ineligible public official may be
availed of when the subject act or
omission was committed prior to or at
the time of appointment or election
relating to an official’s qualifications to
hold office as to render such
appointment or election invalid. Acts or
omissions, even if it relates to the
qualification of integrity being a
continuing requirement but
nonetheless committed during the
incumbency of a validly appointed
and/or validly elected official cannot be
the subject of a quo warranto
proceeding, but of impeachment if the
public official concerned is impeachable
and the act or omission constitutes an
impeachable offense, or to disciplinary,
administrative or criminal action, if
otherwise.
 The Supreme Court may not be
deprived of its minimum original and
appellate jurisdiction (Sec. 2, Art. VIII)
 Members of the judiciary enjoy security
of tenure. (Art. VIII, Sec. 2.)
 Members of judiciary may not be
designated to any agency performing
quasi-judicial or administrative
functions. (Art. VIII, Sec. 12.)
 The Presidential Electoral Tribunal
(PET) does not exercise quasi-judicial
functions. When the Supreme Court, as
the PET, resolves a presidential or vice-
presidential election contest, it
performs what is essentially a judicial
31
power (Macalintal v. PET, G.R. No.
191618, Nov. 23, 2010).
 The salaries of Justices and judges
shall be fixed by law and cannot be
decreased during their continuance in
office. (Art. VIII, Sec. 10.)
 However, their salaries are properly
subject to a general income tax law
applicable to all income earners and
that the payment of such income tax
does not fall within the constitutional
protection against decrease of their
salaries during their continuance in
office. (Nitafan v. CIR, G.R. No. 78780,
July 23, 1987).
 Appellate jurisdiction may not be
increased without its advice and
concurrence (Sec. 30, Art. VIII)
 Original jurisdiction can it be increased,
and it does not need the advice or
concurrence of the SC. On the other
hand, Appellate jurisdiction cannot be
reduced. It cannot also be increased
unless the SC gives its consent by its
advice or concurrence. Otherwise, it
would be a violation of the
Constitution.
 Sec. 27 of RA 6770 Vests power to the
SC to review the findings of fact of the
ombudsman in administrative cases on
certiorari. There is nothing in the
Constitution conferring that power to
the SC. So according to the SC that
since they were not consulted, that law
sec. 27 of RA 6770 was declared
unconstitutional.
IV. JUDICIAL REVIEW
 It is the power of the courts to test the
validity of executive and legislative
acts in light of their conformity with the
Constitution. The power of judicial
review involves basically reviewing a
law or act of the President is in
consonance with the Constitution. So,
if the law is in consonance, the court
will merely make a double negative
 ruling stating that the law is not
unconstitutional. Otherwise, the Court
has the duty to declare the law
unconstitutional.
Functions of Judicial Review (Salonga v. Cruz
Pano, 134 SCRA 438)
1. Checking - reviewing a law or act
2. Legitimating -determining
whether or not it is in
consonance with the Constitution
or laws.
3. Symbolic - decision of the SC
would serve as a guideline that
would educate the judges,
justices, the lawyers and the
public as to the meaning of the
law, or the implication of the
exercise of certain powers of
those in the government.
 Doctrine of Constitutional Supremacy -
When the judiciary exercises its power
of judicial review, this is not an
assertion of superiority by the courts
over the other departments, but
merely an expression of the supremacy
of the Constitution. (Angara v.
Electoral Commission, 63 Phil. 139
[1936])
Who may Exercise Judicial Review:
1. The Supreme Court
2. Any other court as authorized by law
 The power of judicial review is not
limited to the Supreme Court, it is also
granted to the lower courts. (Ynot v.
IAC, 148 SCRA 659 [1987])
 The exercise of judicial review by the
lower courts is subject to review by the
Supreme Court. (Id.)
 The Supreme Court is the only
constitutional court, and cannot be
abolished by ordinary legislation except
when you amend the Constitution.
 Atty. Galeon: If a lower court declares
a law unconstitutional, and the parties
do not elevate the ruling to the SC, the
ruling will be binding only among the
parties.
Requisites
Requisites for the Exercise of Judicial Review:
32
1. There must be an actual case or
controversy.
2. The question of constitutionality must
be raised by the property party (Locus
standi or legal standing)
3. The constitutional question must be
raised at the earliest opportunity
4. The decision must be necessary to the
determination of the case itself.
ACTUAL CASE OR CONTROVERSY
 Actual case or controversy is one that
involves a conflict of legal rights, an
assertion of opposite legal claims
susceptive of judicial resolution; the
case must not be moot or academic or
based on extra-legal or other similar
considerations not cognizable by a
court of justice (Garcia v. Executive
Secretary, 583 SCRA 119).
 The justiciable controversy is thus
distinguished from a difference or
dispute of a hypothetical or abstract
character or from one that is academic
or moot. (Cruz, Philippine Political Law,
2015 Ed.).
 Courts have no authority to pass upon
issues through advisory opinions or to
resolve hypothetical or feigned
problems (Guingona Jr. v. CA, 254 Phil.
415)
 But where the purpose is to solicit from
the court a declaratory judgment
involving the interpretation of the right
and duties of a person under the
provisions of a deed, will, contract, or
other written instrument, or a stature
or ordinance, the case is deemed an
actual controversy over which the
courts may validly assume jurisdiction
(Cruz, Philippine Political Law, 2015
Ed., Sec. 1 Rule 64, ROC)
 An actual case or controversy means
an existing case or controversy that is
appropriate or ripe for determination,
not conjectural or anticipatory, lest the
decision of the court would amount to
an advisory opinion (Republic
Telecommunications Holding, Inc. v.
Santiago, 556 Phil. 83, 91-92 [2001])
 A question is ripe for adjudication when
the act being challenged has had a
direct adverse effect on the individual
challenging it. For a case to be
 considered ripe for adjudication, it is a
prerequisite that something has then
been accomplished or performed by
either branch before a court may come
into the picture, and the petitioner
must allege the existence of an
immediate or threatened injury to
himself as a result of the challenged
action. He must show that he has
sustained or is immediately in danger
of sustaining some direct injury as a
result of the act complained of (The
Province of North Cotabato v. The
Government of the Republic of the
Philippines, 589 Phil. 387, 481 [2008])
 The requirement of an actual case or
controversy is required so as not to
violate the doctrine of separation of
powers.
Moot and Academic Principle
 GR: When the issue becomes moot and
academic, as a rule the court will not
rule on it.
 XPN: Even on the assumption of
mootness, jurisprudence dictates that
“the ‘moot and academic’ principle is
not a magical formula that can
automatically dissuade the Court in
resolving a case.
Requirements:
1. There is grave or patent violation of
the Constitution;
2. The exceptional character of the
situation or paramount public interest
or transcendental importance;
3. When constitutional issue requires
formulation of controlling principles to
guide the bench, the bar and the
public; and
4. It is capable of repetition yet evading
review
 Note: Not all requirements need be
present. The existence of one of the
requirements is sufficient for the Court
to exercise its power of judicial review.
LOCUS STANDI
 A proper party is one who is injured or
who is in danger of sustaining or will
sustain an injury as a result of the
implementation of an act or law.
33
 A person, to be a real party in interest
in whose name an action must be
prosecuted, should appear to be the
present real owner of the right sought
to be enforced, that is, his interest
must be present substantial interest,
not a mere expectancy, or a future
contingent, subordinate or
consequential interest. Where the
plaintiff is not the real party in interest,
the ground for the motion to dimiss is
lack of cause of action. The reason for
this is that the courts ought not to pass
upon questions not derived from any
actual controversy (Stronghold
Insurance Company Inc. Cuenca, 692
SCRA 473)
 Locus standi, which is a mere
procedural technicality, has been
defined as a personal and substantial
interest in a case such that the party
has sustained or will sustain direct
injury as a result of the governmental
act that is being challenged (Anak
Mindanao Party-list Group v. The
Executive Secretary, 531 SCRA 583)
 However, being a mere procedural
technicality, the requirement of locus
standi may be waived by the Supreme
Court in the exercise of its discretion.
Even when the petitioners have failed
to show direct injury, they have been
allowed to sue under the “principle of
transcendental importance”; of
overreaching significance to society or
of paramount public interest. (David v.
Macapagal-Arroyo, G.R. No. 171396,
May 3, 2006)
Rule on Locus Standi
GR: A Citizen can raise a constitutional
question only when:
1. He can show that he has personally
suffered some actual or threatened
injury because of the allegedly illegal
conduct of the government;
2. The injury is fairly traceable to the
challenged action; and
3. A favorable action will likely redress
the injury (Francisco v. Fernando, 507
SCRA 173)
Direct Injury Test
  GR: To be a proper party, one who
impugns the validity of a statute must
have personal and substantial interest
in the case such that he has sustained
or will sustain direct injury as a result.
XPNS: (No need to establish direct injury)
1. Sufficiency of factual basis in the
declaration of martial law;
2. Questions on the constitutionality of
the ratification, amendments or
revision of the constitution; and
3. Any issue pertaining to environmental
cases (Citizen’s suit)
Who are considered as proper parties to raise
Constitutional Issues:
a. The cases involved constitutional
issues;
b. Taxpayers – there must be claim of
illegal disbursement of public funds or
that the tax measure is
unconstitutional;
As a taxpayer, you must establish:
1. There is illegal disbursement of public
funds or that there is an appropriation
2. The appropriation is illegal amounting
to malversation of public funds
3. That the taxes is exorbitant or the tax
law is confiscatory which amounts to
taking without due process of law
c. Voters – there must be a showing of obvious
interest in the validity of the election law in
question especially in his exercise of his right
of suffrage;
d. Concerned citizens – there must be a
showing that the issues raised are of
transcendental importance which must be
settled early. As concerned citizens, petitioners
are also required to substantiate that the
issues are of transcendental significance, or of
paramount public interest. In cases involving
such issues, the imminence and clarity of the
threat to fundamental constitutional rights
outweigh the necessity for prudence.
e. Legislators- there must be a claim that the
official action complained of encroaches on
their prerogatives as legislators. In the
absence of a clear showing of any direct injury
34
to their person or the institution to which they
belong, their standing as members of the
Congress cannot be upheld.
Transcendental importance
 For it to be accorded standing on the
ground of transcendental importance,
however, it must establish:
1. The character of the funds (that it is
public) or other assets involved in the
case;
2. The presence of a clear case of
disregard of a constitutional or
statutory prohibition by the public
respondent agency or instrumentality
of the government and
3. The lack of any party with a more
direct and specific interest in raising
the questions being raised (Senate v.
Ermita, 488 SCRA 1)
EARLIEST OPPORTUNITY
 GR: The question of constitutionality
must be raised at the earliest possible
opportunity, so that if not raised in the
pleadings, ordinarily, it may not be
raised at the trial and if not raised in
the trial court, it will not be considered
on appeal (Matibag v. Benipayo, 429
SCRA 554)
XPNS:
1. In criminal cases, the constitutional
question can be raised at any time in
the discretion of the court;
2. In civil cases, the constitutional
question can be raised at any stage if it
is necessary to the determination of
the case itself; and
3. In every case, except where there is
estoppel, the constitutional question
may be raised at any stage if it
involves the jurisdiction of the court
(People v. Vera, 53 SCRA 678) Under
these exceptions, even if raised the
first time on appeal, the Court may still
review:
a. In Criminal Cases- especially if the guilt
of the accused is dependent on the
constitutionality of the law that defines
the act or omission unauthorized. If it
 is unconstitutional, then there is no law
punishing the act.
b. In Civil Cases- when the issue is the lis
mota of the case. Meaning, you cannot
define the case without first setting the
issue of constitutionality.
 Then on jurisdiction because if the
court has no jurisdiction, then the
proceedings are void except if the
person waived the jurisdiction by
submitting himself to the court. He is
now estopped to question jurisdiction
for actively participating in the
proceedings.
 A constitutional question was deemed
raised at the earliest opportunity when
raised for the first time at the Court of
Appeals, despite the case being
previously heard by the Labor Arbiter
and the NLRC, because the
constitutional question should be raised
before those authorized to rule on
constitutional questions. Labor
tribunals have no authority to rule on
constitutional questions. That is
reserved to the regular courts (Serrano
v. Gallant Maritime, G.R. No. 167614
March 24, 2009).
LIS MOTA OF THE CASE
 The decision must be necessary to the
determination of the case itself. As a
rule, the courts will not resolve the
constitutionality of a law, if the
controversy can be settled on other
grounds. The policy of the courts is to
avoid ruling on constitutional questions
and to presume that the acts of the
political departments are valid, absent
a clear and unmistakable showing to
the contrary. To doubt is to sustain.
This presumption is based on the
doctrine of separation of powers. This
means that the measure had first been
carefully studied by the legislative and
executive departments and found to be
in accord with the Constitution before it
was finally enacted and approved (Sps.
Mirasol v. CA, 403 Phil. 760)
Operative fact doctrine
 As a general rule, an unconstitutional
act is not a law; it confers no rights; it
imposes no duties; it affords no
35
protection; it creates no office; it is
inoperative as if it has not been passed
at all. The general rule is supported by
Article 7 of the Civil Code, which
provides. “Laws are repealed only by
subsequent ones, and their violation or
non-‐‐observance shall not be excused
by disuse or custom or practice to the
contrary” (Yap v. Thenamaris Ship’s
Management, G.R. No. 179532, May
30, 2011).
 The doctrine of operative fact serves as
an exception to the aforementioned
general rule. The doctrine of operative
fact, as an exception to the general
rule, only applies as a matter of equity
and fair play. It nullifies the effects of
an unconstitutional law by recognizing
that the existence of a statute prior to
a determination of unconstitutionality
is an operative fact and may have
consequences which cannot always be
ignored.
 The past cannot always be erased by a
new judicial declaration (Ibid).
 The doctrine is applicable when a
declaration of unconstitutionality will
impose an undue burden on those who
have relied on the invalid law. Thus, it
was applied to a criminal case when a
declaration of unconstitutionality would
put the accused in double jeopardy or
would put in limbo the acts done by a
municipality in reliance upon a law
creating it (Ibid).
 The Operative Fact Doctrine will not be
applied as an exception when to rule
otherwise would be iniquitous and
would send a wrong signal that an act
may be justified when based on an
unconstitutional provision of law (Ibid).
 The Doctrine of Operative Fact Extends
as well to a Void or Unconstitutional
Executive Act: The term executive act
is broad enough to include any and all
acts of the Executive, including those
that are quasi-legislative and quasi-
judicial in nature.
 The doctrine operative fact doctrine
recognizes the existence of the law or
executive act prior to the
determination of its unconstitutionality
 as an operative fact that produced Representatives, G.R. No. 160261,
consequences that always be erased, November 11, 2003).
ignored or disregarded. In short, it  While courts can determine questions
nullifies the void law or executive act of legality with respect to
but sustains its effects. It provides an governmental action, they cannot
exception to the general rule that a review government policies and the
void or unconstitutional law produces wisdom behind such policies. These
no effect. But its use must be questions are vested by the
subjected to great scrutiny and Constitution in the Executive and
circumspection, and it cannot be Legislative Departments.
invoked to validate an unconstitutional
law or executive act, but is resorted to
V. SUPERVISION OF THE COURTS
only as a matter of equity and fair
play. It applies only to cases where
extraordinary circumstances exist, and
only when the extraordinary Administrative Supervision Over Lower
circumstances have met the stringent Courts
conditions that will permit its Administrative Powers of the Supreme Court:
application.
 It applies only to cases where 1. Assign temporarily judges of
extraordinary circumstances exist and lower courts to other stations as
only when the extraordinary public interest may require;
circumstances have met the stringent 2. Shall not exceed 6 months
conditions that will permit its without the consent of the judge
application. Its application to the DAP concerned;
proceeds from equity and fair play. The 3. Order a change of venue or place
consequences resulting from the DAP of trial to avoid a miscarriage of
and its related issuances could not be justice;
ignored or could no longer be undone. 4. Appoint all officials and
(Aurallo v. Aquino III, G.R. No., employees of the Judiciary in
209287, 728 SCRA 1, July 1, 2014) accordance with the Civil Service
Law;
Political question doctrine 5. Supervision over all courts and
 Political Question - A question, the the personnel thereof;
resolution of which has been vested by 6. Discipline judges of lower courts
the Constitution exclusively: or order their dismissal.
a. In the people, in the exercise of their Period for Deciding Cases:
sovereign capacity, or
b. In which full discretionary authority has 1. SC- 24 months
been delegated to a co-equal branch of 2. Lower Collegiate Courts- 12 months
the Government (Tanada v. Cuenco, 3. Other Lower Courts- 90 days
G.R. No. L-10520, Feb. 28, 1957).
Notes:
 The judiciary is NOT precluded from
 Period counted from date of
reviewing Political questions. Under the
submission.
second clause of Sec. 1, Art. VIII (the
 Case deemed submitted upon filing of
power to determine whether or not
the last pleading, brief or
there has been a grave abuse of
memorandum required by the Rules or
discretion) the Courts may now
the court [Sec. 15(2), Art. VIII].
determine whether there has been
 The Sandiganbayan, while of the same
grave abuse of discretion amounting to
level as the Court of Appeals, functions
lack or excess of jurisdiction on the
as a trial court. Therefore, the period
part of any branch or instrumentality of
for deciding cases which applies to the
government (Francisco v. House of
Sandiganbayan is the three (3) month

36
 period, not the twelve (12) month
period [In Re: Problems of Delays in
Cases before the Sandiganbayan, A. M.
No. 00-8-05- SC (2001)].
VI. POWERS OF THE SUPREME COURT
RULEMAKING POWER
The SC has the power to promulgate
rules concerning the protection and
enforcement of constitutional rights,
pleading, practice, and procedure in all
courts, the admission to the practice of
law, the integrated bar, and legal
assistance to the under-privileged.
The 1987 Constitution took away the
power of Congress to repeal, alter, or
supplement rules concerning pleading,
practice and procedure. The power to
promulgate rules of pleading, practice
and procedure is no longer shared by the
Court with Congress, more so with the
Executive (Echegaray v. Secretary of
Justice, G.R. No. 132601, January 19,
1999).
ORIGINAL AND APPELLATE
JURISDICTION OF THE SUPREME COURT
Original Jurisdiction [Sec. 5(1), Art. VIII]
1. Cases affecting ambassadors, other
public ministers and consuls
2. Petition for certiorari
3. Petition for prohibition
4. Petition for mandamus
5. Petition for quo warranto
6. Petition for habeas corpus
 Note: Original jurisdiction also extends
to writs of amparo, habeas data, and
the environmental writ of kalikasan.
 The Supreme Court’s original
jurisdiction to issue writs of certiorari
(as well as prohibition, mandamus, quo
warranto, habeas corpus and
injunction) is not exclusive. Its
jurisdiction is concurrent with the CA,
and with the RTC in proper cases (Cruz
v. Judge Gingoyon, G.R. No. 170404,
September 28, 2011).
37
Appellate Jurisdiction [Sec. 5(2), Art. VIII]:
On appeal or certiorari (as the Rules of Court
provide), SC may review, revise, reverse,
modify, or affirm final judgments and orders of
lower courts in:
1. Cases involving the constitutionality or
validity of any treaty, international or
executive agreement, law, presidential
decree, proclamation, order,
instruction, ordinance, or regulation,
except in circumstances where the
Court believes that resolving the issue
of constitutionality of a law or
regulation at the first instance is of
paramount importance and
immediately affects the social,
economic and moral well-being of the
people (Moldex Realty v. HLURB, G.R.
No. 149719, June 21, 2007);
2. Cases involving the legality of any tax,
impost, assessment, or toll, or any
penalty imposed in relation thereto;
3. Cases in which the jurisdiction of any
lower court is in issue;
4. Criminal cases where the penalty
imposed is reclusion perpetua or
higher;
5. Cases where only a question of law is
involved.
VII. QUALIFICATIONS,
DISQUALIFICATIONS, SELECTION OF THE
PRESIDENT, SENATORS, MEMBERS OF THE
HOUSE OF REPRESENTATIVES, JUSTICES
AND JUDGES, OMBUDSMAN, AND
CONSTITUTIONAL COMMISSIONS
PRESIDENT AND VICE PRESIDENT
Qualifications:
1. Natural-born citizen of the
Philippines;
2. A registered voter;
3. Able to read and write;
4. At least 40 years of age on the
day of the election; and
5. A resident of the Philippines for at
least 10 years immediately
preceding such election [Sec. 2,
Art. VII].
Election
  Regular Election: Second Monday of  Regular Election: 2nd Monday of May
May
 National Board of Canvassers Term Limit:
(President and Vice-President):  Senate: No Senator shall serve for
Congress more than 2 consecutive terms.
 Judge of all Election Contests: Voluntary renunciation of the office for
Supreme Court sitting as Presidential any length of time shall not be
Electoral Tribunal (PET) considered as an interruption in the
Term of Office continuity of his service for the full
term for which he was elected (PHIL.
 The President and Vice President shall CONST., Art. VI, § 4.)
be elected by direct vote of the people  HOR: No member of the HOR shall
for a term of 6 years (PHIL. CONST. serve for more than 3 consecutive
Art. VII, § 4). terms. Voluntary renunciation of the
 The president shall not be eligible for office for any length of time shall not
any reelection. be considered as an interruption in the
 No person who has succeeded as continuity of his service for the full
President and has served for more than term for which he was elected.
4 years shall be qualified for election to
the same office at any time. (PHIL. Qualifications:
CONST., art VII, § 4, par. 1). Senate:
 No Vice-President shall serve for more
than 2 consecutive terms. (PHIL. 1. Natural-born Filipino citizen,
CONST., art. VII, § 4, par. 2). 2. A registered voter,
3. A resident of the Philippines for at least
SENATORS AND MEMBERS OF THE HOUSE two (2) years before the day of the
OF REPRESENTATIVES (HOR) election,
Composition: 4. Able to read and write,
5. At least thirty-five (35) years old.
 Senate:24 who are elected at large by
the qualified voters of the Philippines. HOR:
(PHIL. CONST., Art. VI, § 2.) 1. Natural-born citizen of the Philippines
2. At least twenty-five (25) years of age
 HOR: Not more than 250 members, on the day of the election,
unless otherwise fixed by law, 3. Able to read and write,
consisting of: 4. Except the party list representatives, a
registered voter in the district in which
a. District Representatives: elected from he shall be elected, and a resident
legislative districts apportioned among thereof for a period of not less than
the provinces, cities and the one year immediately preceding the
Metropolitan Manila area day of the election.
b. Party-list Representatives: shall
constitute 20% of the total number of Disqualifications (both Senate and HOR):
the members of the House of
Representatives including those under DISQUALIFICATION WHEN
the party-list. APPLICABLE
Cannot hold any other During his term. If
Term of Office: office or employment he does so, he
in the Government, or forfeits his seat in
 Senate: 6 years commencing at noon any subdivision, Congress.
on the 30th day of June following their agency, or (Forbidden Office)
election (PHIL. CONST., Art. VI, § 4.) instrumentality,
 HOR: 3 years, commencing at noon on including GOCCs or
the 30th day of June next following their subsidiaries
their election. Cannot be appointed During the term for

38
 to any office which which he was law in the admission to admission to
was created or the elected. PH for the the practice the practice
enoulments thereof same of law as an of law as an
increased period indispensable indispensable
Cannot be financially During his term of
requisite requisite
interested directly or office
indirectly with any Tenure [Sec. 11, Art. VIII]
contract, franchise, or
Hold office during good behavior until they
special privilege
granted by the reach the age of 70 OR become
government, or any incapacitated to discharge their duties
subdivision, agency, Qualifications [Sec. 7(3), Art. VIII]
or instrumentality,
including GOCCs or Person of proven competence, integrity,
their subsidiaries probity, and independence
Cannot intervene in During his term of
any matter before any office
office of the How Members of the Judiciary are Selected:
government when it is
for his pecuniary  By virtue of Article VIII, Section 8,
benefit or where he appointments to the judiciary are made
may be called upon to by the President of the Philippines
act on account of his based on a list submitted by the
office. Judicial and Bar Council which is under
the supervision of the Supreme Court.
Its principal function is to screen
JUSTICES AND JUDGES
prospective appointees to any judicial
Qualifications of members of the judiciary post. It is composed of the chief justice
as ex-officio chairman, the Secretary of
Justices RTC Judge MTC/MCTC Justice and representatives of Congress
of the SC (Sec. 15, Judge (Sec. as ex-officio members, and a
and the B.P. 129) 26, B.P. representative of the Integrated Bar, a
Collegiat 129) professor of law, a retired member of
e Courts the Supreme Court and a
Citizenship representative of the private sector as
members.
Natural- born Natural-born Natural-born  Note: Judges may not be appointed in
Citizen Citizen citizen any acting or temporary capacity as
this would undermine the
Age independence of the judiciary
 The JBC shall submit a list of three (3)
At least 40 At least 35 At least 30 nominees for every vacancy to the
years of years of age years of age President [Sec. 9, Art. VIII]
age  Any vacancy in the Supreme Court
Experience shall be filed within ninety (90) days
from the occurrence thereof [Sec. 4(1),
15 years or Has been Has been Art. VIII]
more as a engaged for engaged for  For lower courts, the President shall
judge of a at least 10 at least 5 issue the appointment within ninety
lower court years in the years in the (90) days from the submission by the
OR has practice of practice of JBC of such list [Sec. 9, Art. VIII]
been law OR has law OR has
THE OMBUDSMAN
engaged in held public held public
the office in the office in the Composition:
practice of PH requiring PH requiring
1. Ombudsman/Tanodbayan;

39
 2. Overall Deputy (at least one Deputy following their cessation from office;
each for Luzon, Visayas and and
Mindanao); and 5. Shall not be allowed to appear or
3. Deputy for military establishment may practice in the Ombudsman for 2 years
be appointed. following their cessation from office

Qualifications (Ombudsman and Deputies): CONSTITUTIONAL COMMISSIONS

1. Natural born citizen of the Philippines Composition and qualifications of members

2. At least 40 years old at time of
appointment CIVIL SERVICE COMMISSION
3. Recognized probity and independence; Composition:
4. Member of the Philippine bar
5. Must not have been candidate for any  A Chairman, and 2 Commissioners
elective office in the immediately
preceding Qualifications:

Appointment, Term, and Filling of vacancies 1. Natural-born citizens of the Philippines;

2. At the time of their appointment, at
 Appointed by the President in a list of least 35 years of age
at least 3 nominees for each vacancy 3. With proven capacity for public
prepared by the JBC. Said list must be administration; and
published in a newspaper of general 4. Must not have been candidates for any
circulation. (Sec.4, R.A. 6770). elective position in the election
 Appointments do NOT require immediately preceding their
confirmation appointment
 All vacancies shall be filled within 3
months after they occur. (Sec. 4) COMMISSION ON ELECTIONS
 Appointees shall serve a 7-year term Composition:
without reappointment. (Sec. 7)
 All other officers and employees of the  One Chairman and 6 Commissioners
Office of the Ombudsman and the
Office of the Special Prosecutor shall be Qualifications:
appointed by the Ombudsman in
1. Natural-born citizen;
accordance with the Civil Service Law.
2. At least 35 years old at the time of
(Sec. 11 (5))
appointment;
Disqualifications and Prohibitions: 3. College degree holder;
4. Not a candidate in any election
1. Cannot hold any other office or Immediately preceding the
employment during his tenure; appointment; and
2. Cannot engage (directly or indirectly) 5. Majority, including the chairman, must
in the practice of any profession or in be members of the Philippine Bar who
the active management or control of have been engaged in the practice of
any business which may be affected by law for at least 10 years
the functions of his office;
3. Cannot be financially interested, COMMISSION ON AUDIT
directly or indirectly, in any contract
Composition
with or in any franchise or privilege
granted by the Government, any of its  1 Chairman, 2 Commissioners
subdivisions, agencies or
instrumentalities, including GOCCs or Qualifications
their subsidiaries;
1. Natural born citizen;
4. Shall not be qualified to run for any
2. At least 35 years old at the time of
office in the election immediately
appointment

40
 3. CPAs with at least 10 years auditing
experience or members of the Bar with
at least 10 years of experience in the
practice of law; at no time shall all
members belong to the same
profession, and
4. Not a candidate in any election
immediately preceding appointment
Prohibited offices and interests
1. No member of a Constitutional
Commission shall, during his tenure:
2. Be financially interested, directly or
indirectly, in any contract with, or in
any franchise or privilege granted by
the Government, any of its
subdivisions, agencies or
instrumentalities
3. Engage in the Practice of any
profession;
4. Engage in the Active management and
control of any business which in any
way may be affected by the functions
of his office; and
5. Hold any other Office or Employment.
VIII. IMMUNITY OF THE PRESIDENT,
PRIVILEGES OF SENATORS AND MEMBERS
OF THE HOUSE OF REPRESENTATIVES
PRESIDENTIAL IMMUNITY
 Immunity from suit is personal to the
President and may be invoked by him
alone. The President may waive it
impliedly, as when he himself files suit
(Soliven v. Makasiar, G.R. No. 82585,
Nov. 14, 1988).
 The presidential immunity from suit
remains preserved under our system of
government, albeit not expressly
reserved in the present Constitution.
(Rubrico, et al. v. Gloria Macapagal-
Arroyo, et al., G.R. No. 183871, Feb.
18, 2010).
 Unlawful acts of public officials are not
acts of State and the officer who acts
illegally is not acting as such but
stands in the same footing as any
other trespasser. Once out of office,
even before the end of the six-year
term, immunity for non-official acts is
41
lost (Estrada v. Desierto, G.R. No.
146710-15, March 2, 2001).
Presidential Privilege
 Executive Privilege is the power of the
President to withhold certain types of
information from the court, the
Congress, and the public. (Neri v.
Senate, G.R. No. 180643, March 25
2008).
 For the presidential communications
privilege to apply, the following must
concur:
 Communications relate to a
quintessential and nondelegable power
of the President. (e.g., the power to
enter into an executive agreement with
other countries without the
concurrence of the Legislature has
traditionally been recognized in
Philippine jurisprudence)
 Communications are received by a
close advisor of the President.
 There is no adequate showing of a
compelling need that would justify the
limitation of the privilege and of the
unavailability of the information
elsewhere by an appropriate
investigating authority.
Scope of Executive Privilege
 Executive privilege covers all
confidential or classified information
between the President and the public
officers covered by this executive
order.
Person Covered by the Privilege
 The person covered by the executive
privilege is a person in possession of
information which is, in the judgment
of the head of office concerned,
privileged.
 Actually, it is not only the President
who has Executive Privilege. All three
branches of government also have
executive privilege. The Legislative also
has privilege like during executive
sessions. The Judiciary also has
privilege, where the litigants cannot
compel the disclosure of how a case
was deliberated (Marcos v. Robredo,
PET Case 005, February 16, 2021).
PRIVILEGES OF SENATORS AND MEMBERS Cabangbang, G.R. No. L-15905, Aug.
OF THE HOUSE OF REPRESENTATIVES 3, 1966)
 The privilege arises not because the
 Immunity from Arrest - Legislators are statement is made by a lawmaker, but
privileged from arrest while Congress is because it is uttered in furtherance of
in session only (whether regular or legislation. It cannot be invoked when
special) with respect to offenses the lawmaker's speech or utterance is
punishable by not more than 6 years of extraneous to the due functioning of
imprisonment. The immunity does not the legislative process. (Trillianes v.
extend to the prosecution of criminal Castillo-Marigomen, G.R. No. 223451,
offenses. March 14, 2018)
 Right of Members to Attend  To participate in or respond to media
Congressional Sessions: A Senator, interviews is not an official function of
who remains in detention, cannot be any lawmaker; it is not demanded by
allowed to go to the Senate to attend his sworn duty nor is it a component of
all its official functions. All prisoners the process of enacting laws. A
whether under preventive detention or lawmaker may discharge his duties and
serving final sentence cannot practice legislate without having to
their profession nor engage in any communicate with the press. A
business or occupation, or hold office, lawmaker's participation in media
elective or appointive, while in interviews is not a legislative act, but is
detention. This is a necessary "political in nature, outside he ambit of
consequence of arrest and detention. the immunity conferred under the
The presumption of innocence does not Speech or Debate Clause. (Trillanes v.
carry with it the full enjoyment of civil Castillo-Marigomen, G.R. No. 223451,
and political rights (Trillanes v. Judge March 14, 2018)
Pimentel, G.R. No 179817, June 27,  A complaint for disbarment or
2008). disciplinary action based on
 Privileged Speech - No member shall disparaging remarks made by an
be questioned or held liable in any incumbent Senator against the Chief
forum other than his/her respective Justice will not prosper because of the
Congressional body for any speech or Speech and Debate clause. (Pobre v.
debate in Congress or in any Defensor-Santiago, A.C. No. 7399,
Committee thereof. Aug. 25, 2009)
“Speech or Debate” includes: Limitations:
 Utterances made by Congressmen in  Protection is only against prosecution
the performance of their official in any forum other than Congress
functions, such as speeches delivered, itself. Hence, the Senate or the House
statements made, or votes cast in the may discipline their respective
halls of Congress, while the same is in members.
session  The speech or debate must be made in
 Bills introduced in Congress, whether performance of their duties as
the same is in session or not members of Congress.
 Other acts performed by Congressmen,  Congress need not be in session when
either in Congress or outside the the utterance is made, as long as it
premises housing its offices, in the forms part of legislative action (e.g.,
official discharge of their duties as part of the deliberative and
members of Congress and of communicative process used to
Congressional Committees duly participate in legislative proceedings in
authorized to perform its functions as consideration of proposed legislation or
such, at the time of the performance of with respect to other matters within
the act in question. (Jimenez v. Congress’ jurisdiction)

42
 election. Once elected, these persons
IX. STRUCTURE OF GOVERNMENT
act as our representatives and are
COMPOSITION accountable to us. (Article XI)

ARTICLE II, SECTION 1. The Philippines is THE PHILIPPINE GOVERNMENT

a democratic and republican State.
 The Government of the Philippines is
Sovereignty resides in the people and all
governed as a unitary state under a
government authority emanates from
presidential representative and
them.
democratic and a constitutional
ARTICLE VI, SECTION 1. The legislative republic where the President functions
power shall be vested in the Congress of as both the head of state and the head
the Philippines which shall consist of a of government of the country within a
Senate and a House of Representatives, pluriform multi-party system.
except to the extent reserved to the  The Philippine government is composed
people by the provision on initiative and of three different branches which are
referendum. found in different areas of our
Constitution: The Legislative
ARTICLE VII, SECTION 1. The executive Department (Article VI), the Executive
power shall be vested in the President of Department (Article VII), and the
the Philippines. Judicial Department (Article VIII)
ARTICLE VIII, SECTION 1. The judicial FUNCTIONS
power shall be vested in one Supreme
Court and in such lower courts as may be  The basic function of the
established by law. Legislative Department is to create,
alter, repeal laws or statutes.
Judicial power includes the duty of the  Statutes passed by Congress have
courts of justice to settle actual the presumption of
controversies involving rights which are Constitutionality. Only upon a clear
legally demandable and enforceable, and finding of a law’s
to determine whether or not there has unconstitutionality will the court
been a grave abuse of discretion declare a law to be
amounting to lack or excess of jurisdiction unconstitutional. Otherwise, the
on the part of any branch or courts are bound to uphold the
instrumentality of the Government. constitutionality of a law in respect
and deference to the power of the
ESSENTIAL CHARACTERISTICS OF A Legislative Department to make
DEMOCRATIC STATE and repeal laws.

1. Elections
 The basic function of the Executive
2. People enjoy basic civil and
Department is to ensure that all
political rights and liberties (Article
the laws of the land are faithfully
III)
executed.
 Judge Singco: There is no such thing
 The textual justification for this
as absolute right, except freedom to
under the Constitution is Article
think. You cannot exercise your rights
VII, Section 17 is to ensure that
to the detriment of the rights of others.
the laws are faithfully executed-
Likewise, you cannot exercise the right
called the “Faithful Execution
to free speech to malign the reputation
Clause.”
of others.
 The power involved is the
REPUBLICAN STATE President's residual power to
protect the general welfare of the
 A representative form of government. people. It is founded on the duty of
People elect representatives in an the President, as steward of the

43
 people. It is not only the power of
the President but also his duty to
do anything not forbidden by the
Constitution or the laws that the
needs of the nation demand. It is a
power borne by the President's
duty to preserve and defend the
Constitution. It also may be viewed
as a power implicit in the
President's duty to take care that
the laws are faithfully executed
(Marcos v Manglapus, G. R. No.
88211, Sept. 15, 1989).
 The basic function of the Judicial
Department is to interpret and
apply the laws of the land. They
can also review the acts of any
branch or instrumentality of the
Government to determine whether
they have committed a grave
abuse of discretion amounting to
lack or excess of jurisdiction.
 When the judiciary exercises its
power of judicial review, this is not
an assertion of superiority by the
courts over the other departments,
but merely an expression of the
supremacy of the Constitution.
(Angara v. Electoral Commission,
63 Phil. 139 [1936])
POWERS AND PRIVILEGES
(For an extensive discussion on the
powers and privileges of the different
government organs, please Parts III
and VIII of this reviewer)
SEPARATION OF POWERS
 Ordains that each of the 3 branches of
government has exclusive cognizance
of and is supreme in matters falling
within its constitutionally allocated
sphere; each branch cannot invade the
domain of others. Powers of the
government are separated to avoid
concentration of powers in any one
branch
 The government established by the
Constitution follows the theory of
separation of powers. Separation of
powers is a fundamental principle in
our system of government and is
founded on the belief that, by
44
establishing equilibrium among the
three (3) power holders, harmony will
result and power will not be
concentrated and tyranny will be
avoided [Bernas].
 Any system that is violative of the
principle of separation of powers is
unconstitutional and void (Belgica v.
Executive Secretary, G.R. No. 208566,
November 19, 2013).
 The Constitution does not expressly
declare the principle of Separation of
Powers, but it is implied in the division
of our Constitution by the three
separate Articles outlining our form of
government. (Article VI- Legislative
Dept.; Article VII- Executive Dept;
Article VIII- Judicial Dept.)
CHECKS AND BALANCES
 A system operating between and
among the three branches of
government the net effect of which is
that no one department is able to act
without the cooperation of at least one
of the other departments.
Allocation of checks and balances
How can the executive branch check the acts
of the other branches?
 Check on Congress: The power to veto
any bill proposed by Congress
 Check on the Judiciary: Appointment of
justices of the Supreme Court and
judges of the lower courts; Pardoning
power
How can the legislative branch check the acts
of the other branches?
 Check on the Executive: The president
has the power of appointment and any
such appointment shall be approved by
the Commission on Appointments
composed of the members of Congress
(Article VII, Sec. 16); The power to
override the veto power of the
president by a vote of 2/3
 Check on the Judiciary: Legislative
department may define and apportion
the jurisdiction of the courts, especially
the lower courts (Art. VIII, Secs. 1 and
2)
How can the judiciary branch check the acts of
other branches?
 Power of judicial review – can declare
an executive act or act made by
Congress to be unconstitutional.
X. PROCESS OF LEGISLATION
PROCESS OF LAWMAKING
 Bill- any proposed law.
 GR: Any bill can originate from either
House of Congress.
XPN (ARTILP):
1. Appropriation;
2. Revenue
3. Tariff;
4. Bills Authorizing the Increase of
Public Debt;
5. Bills of Local Application;
6. Private Bills
 These bills must originate exclusively in
the House of Representatives, although
the Senate may propose or concur with
First Reading
amendments (Art. VI, Sec. 24)
 The Constitution only mandates that
the bill ORIGINATE in the House of
Representatives. It did not say that the
bill that would be presented to the
President should be the exact same
one as passed by the House. That
would violate the power of the Senate
to concur or propose amendments to
the law. The Constitution merely
mandates that the INITIATIVE come
from the House of Representatives.
(Tolentino v. Secretary of Finance,
1995).
 Every Bill must go through three
readings in each House and each
reading must be done on separate
days, except when the Bill is certified
as urgent by the President, in which
case, the three readings can be done in
one day.
 The Constitution also mandates that
each bill only tackle one subject
matter.
Second Reading
45
 Multiple subject matters which are
tackled in one bill are prohibited for
being logrolling legislation.
 Effect of Logrolling Legislation: Entire
bill is void. Logrolling puts the people
in a dilemma since they can answer
only either yes or no to the entire
proposition, forcing them to sign a
petition that effectively contains two
propositions, one of which they may
find unacceptable. (Lambino v.
COMELEC, G.R. No. 174153, October
25, 2006).
 The requirement that the subject of an
act shall be expressed in its title should
receive a reasonable and not a
technical construction. It is sufficient if
the title be comprehensive enough
reasonably to include the general
object which a statute seeks to effect,
without expressing each and every end
and means necessary or convenient for
the accomplishing of that object
(Farinas v. Executive Secretary, G.R.
No. 147387, December 10, 2003).
 Note: “Chamber” or “House” as used
herein means the HOR or the Senate.
 The title of the bill as well as the bill
number is read by the Secretary-
General of the Chamber, and then it is
referred to its respective committee for
committee hearings.
 After committee hearings, if the bill is
approved, a committee report is made.
If the committee disapproves of the
bill, the bill is said to have died a
“natural death”
 For bills which must originate from the
HOR, the Senate can conduct
committee hearings even if the bill is
still with the HOR. But the Senate must
refrain from making a committee
report until they receive the bill as
passed by the HOR.
 Once the Senate receives the House
version of the Bill, they can do away
with the House’s version of the bill, and
immediately replace it with their own
version of the Bill (Tolentino v.
Secretary of Finance, supra).
  Once the committee report is
approved, it is then sent to the plenary
(all the members of the Chamber) for
plenary debates.
 The sponsor of the bill usually makes a
sponsorship speech, where the sponsor
defends the bill and lay out its
overview and the benefits of the said
bill.
 The bill is then read in its entirety, and
the Members of the said Chamber will
debate on the bill, proposing
amendments or even removal of
questionable provisions.
 After all the debates have concluded,
the Members of the Chamber will then
vote on whether to approve the bill on
Second reading. If the bill is approved,
it will now move to third and final
reading.
Third Reading
 On third reading of the bill, the entire
version of the bill, including the
proposed amendments to the same will
be reproduced for all the members of
the Chamber to read.
 The Secretary-General of the Chamber
will then read the Title and Number of
the Bill, and then Members will vote on
whether to approve the bill on third
and final reading or not.
 In the third and final reading, no
amendments to the bill are allowed.
Just a simple yes or no vote.
 If the bill is approved, the bill will then
be transmitted to the other House for it
to undergo the same process (three
readings) all over again. (Both houses
may also tackle the bill simultaneously,
for efficiency)
Bicameral Conference Committee (BCC)
 After the bill has been approved in
both Houses, a BCC will be formed to
thresh out differences in both versions
of the bill.
 Atty. Galeon: The BCC is also
sometimes referred to as the “Third
House” of Congress.
 Forming a BCC is optional on the part
of Congress. They may do away with
such, and just decide to adopt one of
46
the Chamber’s version of the bill if they
see fit.
 In theory, anything can be tackled in
the BCC. But Members of Congress
usually just tackle matters relevant to
the Bill in the BCC.
Enrolled Bill
 After the BCC has concluded, the
consolidated version of the bill will then
be sent to the Secretaries-General of
each respective House as well as to the
Speaker of the HOR and the Senate
President for them to sign the bill.
 The signed bill is then called an
enrolled bill. This enrolled bill will then
be sent to the President for his
signature.
 Enrolled Bill Doctrine - The signing of a
bill by the Speaker of the House and
the President of the Senate and its
certification by the secretaries of both
Houses of Congress that such bill was
passed are conclusive of its due
enactment (Arroyo v. De Venecia, G.R.
No.127255, Aug. 14, 1997).
Options of the President
The President, once he receives the bill, has
three options:
1. He/she can sign the bill, and there and
then the bill will become a law after
publication.
2. He/she can veto the bill, and send the
bill back to the House where the bill
originated, along with his veto
message, outlying his objections to the
bill.
 The House concerned (meaning the
House where the bill originated) can
then discuss the objections of the
President. They can concur with the
objections, in which case, amend the
bill to consider the objections of the
President, or they can reject the
objections of the President, and
override the President’s veto by a vote
of 2/3 of the House concerned. If the
veto is successfully overridden, the bill
will then become a law.
  GR: If the President decides to veto a which the license or privilege is in
bill, must veto the bill in its entirety, conflict with the people's welfare, the
not just a particular provision. Partial license or privilege must yield to the
vetoes are generally not allowed. supremacy of the latter, as well as to
 XPN: In Appropriation, Revenue, and the police power of the State. Such a
Tariff bills, partial (item) veto is privilege or license is not even a
allowed. property or property right, nor does it
3. The President can also just simply create a vested right; as such, no
refuse to sign the bill or communicate irrevocable rights are created in its
his/her veto message to the House issuance.
where the bill originated, in which case
the bill will “lapse” into law after 30  The Supreme Court recognized the
days, just as if he had signed it. This inherent right of ICCs/IPs to recover
eliminates the chances of a pocket their ancestral land from outsiders and
veto, or where laws are left hanging usurpers. Seen by many as a victory
because of the President’s refusal to attained by the private respondents
sign the measure. only after a long and costly effort, the
Court, as a guardian and instrument of
social justice, abhors a further delay in
XI. NATURAL RESOURCES
the resolution of this controversy and
(NATIONALIZATION PRINCIPLE FOR
brings it to its fitting conclusion by
NATURAL RESOURCES AND ECONOMIC
denying the petition. (Alcantara v.
ACTIVITIES)
DENR, GR NO. 161881, July 31, 2008)
Goals
 Foreshore and submerged areas form
1. More equitable distribution of
part of the public domain and are
opportunities, income and wealth;
inalienable. Lands reclaimed from
2. Sustained increase in amount of goods
foreshore and submerged areas are
and services produced by the nation for
also form part of the public domain and
the benefit of the people
are also inalienable, unless converted
3. Expanding production as the key to
into alienable or disposable lands of the
raising the quality of life for all,
public domain.
especially the underprivileged.
 The prevailing rule is that reclaimed
disposable lands of the public domain
 It must be emphasized that FLGLA No.
may only be leased and not sold to
542 is a mere license or privilege
private parties. These lands remained
granted by the State to petitioner for
sui generis, as the only alienable or
the use or exploitation of natural
disposable lands of the public domain
resources and public lands over which
which the government could not sell to
the State has sovereign ownership
private parties except if the legislature
under the Regalian Doctrine. Like
passes a law authorizing such sale.
timber or mining licenses, a forest land
Reclaimed lands retain their inherent
grazing lease agreement is a mere
potential as areas for public use or
permit which, by executive action, can
public service. The ownership of lands
be revoked, rescinded, cancelled,
reclaimed from foreshore areas is
amended or modified, whenever public
rooted in the Regalian Doctrine, which
welfare or public interest so requires.
declares that all lands and waters of
The determination of what is in the
the public domain belong to the State.
public interest is necessarily vested in
But notwithstanding the conversion of
the State as owner of the country's
reclaimed lands to alienable lands of
natural resources. Thus, a privilege or
the public domain, they may not be
license is not in the nature of a
sold to private corporations which can
contract that enjoys protection under
only lease the same. The State may
the due process and non-impairment
clauses of the Constitution. In cases in

47
 only sell alienable public land to Filipino utilize the country’s natural resources
citizens. (Chavez v. PEA, 2002) by entering into the necessary
agreements with individuals or entities
Exploration And Development, And Utilization in the pursuit of visible operations.
of Natural Resources Service contracts with foreign
 The State, being the owner of the corporations as contractors who invest
natural resources, is accorded the in and operate and manage extractive
primary power and responsibility in the enterprises, subject to the full control
exploration, development and and supervision of the State. Control
utilization thereof. As such: by the state must be on the macro
1. The State may directly undertake such level, through the establishment of
activities; policies, guidelines, regulations,
2. The State may enter into co- industry standards and similar
production, joint venture or measures that would enable the
production-sharing agreements with government to control the conduct of
Filipino citizens or qualified the affairs in various enterprises and
corporations; restrain activities deemed not desirable
3. Congress may, by law, allow small- or beneficial. (La Bugal-B’laan Tribal
scale utilization of natural resources by Assn. v. Ramos, G.R. No. 127882,
Filipino citizens; or January 27, 2004)
4. For the large-scale exploration, Requisites for a valid service contract
development and utilization of under the Constitution
minerals, petroleum and other mineral
oils, the President may enter into 1. A general law that will set standards or
agreements with foreign-owned uniform terms, conditions, and
corporations involving technical or requirements
financial assistance subject to
limitations. 2. The president shall be the signatory for
the government
Service Contracts Not Prohibited
3. Within thirty (30) days of the executed
The following are valid: agreement, the President shall report it to
Congress
1. Financial and Technical Assistance
Agreements (FTAA): even supposing Regalian Doctrine
they are service contracts, these are
not prohibited agreements in the  It provides that all lands of the public
contemplation of the Constitution domain belong to the State, which is
2. Philippine Mining Law (RA 7942) the source of any asserted right to
3. Its Implementing Rules and ownership pf land.
Regulations, insofar as they relate to  All lands of the public domain, waters,
financial and technical agreements minerals, coal, petroleum and other
mineral oils, all forces of potential
energy, fisheries, forests or timber,
wildlife, flora and fauna, and natural
 The Constitution should be construed resources belong to the State. With the
to grant the President and Congress exception of agricultural lands, all
sufficient discretion and reasonable other natural resources shall not be
leeway to enable them to attract alienated.
foreign investments and expertise, as
well as to secure for our people and Acquisition, Ownership, And Transfer of Public
our posterity the blessings of and Private Lands
prosperity and peace.
 Foreign corporations are confined to Lands of the public domain are classified into:
technical and financial assistance. The a. Agricultural lands
State itself may explore, develop or

48
 b. Forest or timber lands
c. Mineral lands
d. Agricultural parks
 Note: The classification of public lands
is a function of the executive branch,
specifically by the Director of the Land
Management Bureau (formerly the
Director of Lands). The decision of the
Director, when approved by the
Secretary of the DENR, as to questions
of fact, is conclusive upon the courts.
(Republic vs. Imperial, G.R. No.
130906, 1999)
 Note: Only agricultural lands can be
alienable lands of public domain.
 To prove that the land subject of an
application for registration is alienable,
an applicant must conclusively
establish the existence of a positive act
of the government such as the
presidential proclamation or an
executive order or a legislative act or
statute. (Republic vs. Candymaker,
Inc., G.R. No. 163766, 2006)
 Foreshore land is that part of the land
which is between the high and low
water, and left dry by the flux and
reflux of the tides. It is part of the
alienable land of public domain and
may be disposed of only by lease and
not otherwise.
Private Lands
 GR: No private lands shall be
transferred or conveyed to Except to
individuals, corporations or
associations qualified to acquire or hold
lands of the public domain
XPNs:
a. Hereditary succession. This does not apply
to testamentary dispositions; the alien
must be an intestate heir.
b. A natural-born citizen of the Philippines,
who has lost his Philippine citizenship,
subject to limitations provided by the law.
 Purpose of Prohibition Disqualifying
Aliens: The conservation of the
national economy and patrimony.
 Consequence of Sale to Non-Citizens:
Any sale or transfer in violation of the
prohibition is null and void. When a
disqualified foreigner later sells it a
49
qualified owner, the defect is cured.
The qualified owner owns the land.
XII. AMENDMENT AND REVISION OF
THE CONSTITUTION
Amendment
 An alteration of one or a few specific
separable provisions of the
Constitution. The changes brought
about by amendments will not affect
the other provisions of the Constitution
(Bernas, 2009).
 It is an addition or change within the
lines of the original constitution as will
effect an improvement, or better carry
out the purpose for which it was
framed; a change that adds, reduces
or deletes without altering the basic
principles involved; affects only the
specific provision being amended.
(Lambino v. COMELEC, G.R. No.
174153, Oct. 25, 2006)
Examples:
 A change reducing the voting age from
18 years to 15 years;
 A change stating that a degree should
be a requirement for a person to run
for public office.
Revision
 A re-examination of the entire
Constitution or of provisions which
have over-all implications for the entire
Constitution to determine how and to
what extent it should be altered. A
revision implies substantive change,
affecting the Constitution as a whole
(Bernas, 2009).
 A change that alters a basic principle in
the constitution, like altering the
principle of separation of powers or the
system of checks-and-balances; alters
the substantial entirety of the
constitution, as when the change
affects substantial provisions of the
constitution.
Examples:
  Altering the principle of separation of
powers or the system of checks-and-
balances;
 A switch from the presidential system
to a parliamentary system;
 A switch from a bicameral system to a
unicameral system (Lambino v.
COMELEC, G.R. No. 174153, Oct. 25,
2006).
Two-part test in determining whether a
proposal involves an amendment or revision.
1. Quantitative test - The quantitative
test asks whether the proposed change
is "so extensive in its provisions as to
change directly the 'substantial
entirety' of the constitution by the
deletion or alteration of numerous
existing provisions." The court
examines only the number of
provisions affected and does not
consider the degree of the change.
2. Qualitative test - qualitative test
inquires into the qualitative effects of
the proposed change in the
constitution. The main inquiry is
whether the change will "accomplish
such far reaching changes in the
nature of our basic governmental plan
as to amount to a revision (Lambino v.
COMELEC, G.R. No. 174153, October
25, 2006).
Ways of Proposing Amendments (CCP)
1. Constituent Assembly (ConAss)
 The Congress, acting as a Constituent
Assembly, by itself may propose
amendments by 3/4 vote of all its
members.
Notes:
Doctrine of Proper Submission
 The power of Congress to propose
amendments is NOT part of its ordinary
legislative power. Congress possesses
constituent power only because it has
been specifically given that power by
and under the conditions of Article XVII
(Bernas, 2011, citing Gonzales v.
COMELEC, G.R. No. L-28196, Nov. 9,
1967).
 Each House may separately formulate
amendments by a vote of 3/4 of all its
50
members, and then pass it on to the
other house for similar process.
Nothing is said about joint sessions
(Bernas, The 1987 Philippine
Constitution: A Comprehensive
Reviewer, 2011).
 Even in a joint session, they must still
vote separately
2. Constitutional Convention (ConCon)
 Congress may call a ConCon by a 2/3
vote of all its members, or
 By a majority vote of all its members,
Congress may submit to the electorate
the question of calling a ConCon.
3. People’s Initiative
 A petition of at least 12% of the total
number of registered voters; every
legislative district must be represented
by at least 3% of the registered voters
therein
 Limitation on Initiative: No amendment
in this manner shall be authorized (1)
within 5 years following the ratification
of the 1987 Const. nor (2) more often
than once every 5 years thereafter.
 Enabling Law: Constitutional provision
on amendments via People’s Initiative
are not self-executory (Defensor-
Santiago v. COMELEC, 270 SCRA 170,
1997)
 An amendment of the Constitution by
people’s initiative can only be done if
the changes proposed are
AMENDMENTS and not REVISIONS
(Defensor-Santiago v. COMELEC, GR
127325, March 19, 1997; Reiterated in
Lambino).
 A plebiscite may be held on the same
day as a regular election (Gonzales v.
COMELEC, G.R. No. L-28196, October
16, 1967).
 The entire Constitution must be
submitted for ratification at one
plebiscite only. The people must have a
proper “frame of reference”.
 No “piecemeal submission” is allowed
e.g. submission of age amendment
 ahead of other proposed amendments
(Lambino v. COMELEC, supra).
 Judicial Review of Amendments: The
validity of the process of amendment is
not a political question because the
Court must review if constitutional
processes were followed (Sanidad v.
COMELEC, GR L-446640, Oct. 12,
1976).
Ratification of Proposal if made through
People’s Initiative:
 Valid when ratified by a majority of
votes cast in a plebiscite.
 Plebiscite is held not earlier than 60
days nor later than 90 days after the
certification by COMELEC of the
petition's sufficiency.
Requisites for Valid Ratification:
1. Held in a Plebiscite conducted under
the election law.
2. Supervised by the COMELEC.
3. Where only franchised (Registered)
voters take part.
-END OF TOPIC-
INTERNATIONAL LAW (1
QUESTION)
I. SOURCES OF INTERNATIONAL LAW
ARTICLE 38 OF THE ICJ STATUTE
 The Court, whose function is to decide
in accordance with international law
such disputes as are submitted to it,
shall apply:
A. International conventions, whether
general or particular, establishing rules
expressly recognized by the contesting
states;
B. International custom, as evidence of a
general practice accepted as law;
C. The general principles of law
recognized by civilized nations;
51
D. Subject to the provisions of Article 59,
judicial decisions and the teachings of
the most highly qualified publicists of
the various nations, as subsidiary
means for the determination of rules of
law.
This provision shall not prejudice the power of
the Court to decide a case ex aequo et bono, if
the parties agree thereto.
Primary vs. Subsidiary Sources
 Atty DBL: The first three are primary
sources. These are the sources that will
be primarily used in settling disputes.
The fourth item (judicial decisions and
the teachings of the most highly
qualified publicists of the various
nations) is a subsidiary source,
resorted only when the first three
cannot be resorted to.
Primary Sources
A. INTERNATIONAL CONVENTIONS/
TREATIES- “International Conventions
whether general or particular and
establishing rules expressly recognized by
the contesting States”
B. INTERNATIONAL CUSTOMS-
“Customary international law results from
general and consistent practice of states
followed by them from sense of legal
obligation.”
Two elements:
1. Objective Element (general practice)
2. Subjective Element (opinio juris sive
necessitates)
 Generally, only states make customary
international law. Customary
international law evolves if enough
states adopt a new practice which is in
violation of customary international
law, the new practice becomes the new
customary international law.
 Highest form of customary
international law- Jus Cogens norm.
C. GENERAL PRINCIPLES OF LAW-
Recognized by civilized (peace-loving)
nations. Aimed at providing solutions to
 controversies where treaty law or
circumstances
customary law provides no guidance.
, their
Subsidiary Sources relations with
persons,
D. JUDICIAL DECISIONS AND natural or
TEACHINGS OF MOST HIGHLY Juridical [ALI
QUALIFIED PUBLICISTS Third
 These are only subsidiary sources. Restatement]
Thus, they can only be applied when How made Through Issued by a
there are no clear primary sources of consent, political
international law. adopted by superior for
 Atty. DBL: There are authors who States as a observance
suggest that these are not law creating common rule
sources but merely law determining. of action
Meaning, it is where we determine
whether the law exists. They don’t Relations Regulates Regulates
create the norm, because international Regulated relations of relations of
States and individuals
law must be created by state practice
other among
and not just by the belief of courts or
international themselves
publicicts. Nonetheless, the court
persons or with their
decisions and teaching can help locate
own States
and affirm whether such international
law is indeed practiced by States. Sources Derived Consists
 Judicial Decisions- The decision of the principally mainly of
court has no binding force, except from treaties, enactments
between the parties and in respect of international from the
that particular case. (Article 59, custom and lawmaking
Statute of the ICJ) general authority of
 No stare decisis- There is no stare principles of each State
decisis on ICJ decisions because Art 59 law [Art.
provides that decisions of ICJ shall 38(1), ICJ
apply only between the parties and Statute]
only in a particular case. So even if two Settlement By means of By means of
cases have practically the same issue, of Disputes State-to- local
the ICJ is not bound. State administrati
transactions ve and
judicial
II. RELATIONSHIP BETWEEN
processes
INTERNATIONAL LAW AND PHILIPPINE
DOMESTIC LAW Responsibilt Collective Generally
y for responsibility entails
Wrongful because it individual
Acts attaches responsibilit
Int’l Law Domestic directly to the y in case of
Law State and not breach
to its
Scope The conduct Applies to a nationals
of States single
and country or
international nation,
organizations, within a
Different Theories of the Relationship between
their relations determined
International Law and Domestic Law
with each territory
other and, in and its 1. Monism- There is no substantial
certain inhabitants distinction between international law

52
 and municipal law. Under this theory,
international law and domestic law
belong to only one system of law.
a. Theory 1: Municipal law subsumes and
is superior to international law.
b. Theory 2: International law is superior
to domestic law.
2. Dualism- International law and national
law are essentially different from each
other as to source (i.e., municipal law
is a product of local custom or
legislation; whereas sources of
international law are treaties and
custom grown among states.); as
regards the relations they regulate
(i.e., municipal law regulated relations
between individual persons under the
state; whereas international law
regulates relations between states);
and lastly, as to substance (i.e.
municipal law is a law of the sovereign
over individuals whereas international
law is a law between sovereign states).
(Bernas, Public International
Law,2009).
 For the dualists, when international law
and municipal law conflict, municipal
law must prevail.
How International Law Becomes part of
Philippine Law
1. Doctrine of Incorporation: The
Philippines adopts the “generally
accepted principles of international
law” (customary international law) as
part of the law of the land [Sec. 2, Art.
II, 1987 Constitution].
 They are deemed as national law
whether or not they are enacted as
statutory or legislative rules.
 By the doctrine of incorporation, the
country is bound by generally accepted
principles of international law, which
are considered to be automatically part
of our own laws. (Tañada v. Angara,
G.R. No. 118295. May 2, 1997)
 The rule that a state may not be sued
without its consent, now expressed in
Article XVI, Section 3, of the 1987
Constitution, is one of the generally
accepted principles of international law
that we have adopted as part of the
53
law of our land under Article II, Section
2.
 Even without such affirmation, we
would still be bound by the generally
accepted principles of international law
under the doctrine of incorporation.
Under this doctrine, as accepted by the
majority of states, such principles are
deemed incorporated in the law of
every civilized state as a condition and
consequence of its membership in the
society of nations. Upon its admission
to such society, the state is
automatically obligated to comply with
these principles in its relations with
other states. (USA v. Guinto, 182 SCRA
644 [1990])
2. Doctrine of Transformation: Treaties
or international agreements shall
become valid and effective upon
concurrence by at least two-thirds of
all the Members of the Senate (Sec.
21, Art. VII, 1987 Constitution). These
rules of international law are not part
of municipal law unless they are
transformed via legislation.
Philippine Domestic Law in Public International
Law
 GR: A State cannot invoke its own
national law to resist an international
claim or excuse itself from breach of
duty under international law (Art. 6,
VCLT)
 A party may not invoke the provisions
of its internal law as justification for its
failure to perform a treaty. This rule is
without prejudice to Article 46 (Art. 27,
VCLT).
 XPN: A State may invoke the fact that
its consent to be bound by a treaty has
been expressed in violation of a
provision of its internal law regarding
competence to conclude treaties as
invalidating its consent if that violation
was manifest and concerned a rule of
its internal law of fundamental
importance (Art. 46, VCLT).
-END OF TOPIC-

LABOR LAW (3 QUESTIONS)
I. BASIC PRINCIPLES
 Labor- It is exertion by human beings
of physical or mental efforts, or both,
towards the production of goods and
services (Porquiz, 2012).
Three Aspects of Labor Law:
1. Labor Standards- minimum standards set by
law regarding terms and conditions of
employment.
 e.g., minimum wage, standard work
hours, 13th month pay, etc.
2. Labor Relations- Defines and Regulates the
Status, rights and the duties and institutional
mechanisms that govern collective relations
between the Employer (ER) and the Employees
(EEs), and their representatives.
 e.g., collective bargaining negotiations
3. Social Legislation- All laws passed
promote social welfare.
 Social Legislation is much broader than
labor laws.
 Labor Laws are a type of social
legislation.
 Social Legislation does not only cover
labor laws, but also includes statutes
that are intended to enhance the
welfare of the people even in the
absence of an employer- employee
(ER-EE) relationship.
 e.g., GSIS Law, Portability law, SSS
Law.
STATE POLICY TOWARDS LABOR
Security of Tenure
 All workers shall be entitled to security
of tenure. (Art. XIII, Sec. 3 par. 2,
1987 Constitution)
 Police power allows the State to
regulate the grant of the right to
security of tenure. (St. Luke’s Medical
Center Employee’s Association-AFW v.
NLRC, 2007)
 Purpose: to safeguard the general
welfare of the public.
Social Justice
 The State shall promote a just and
dynamic social order that will:
 Ensure the prosperity and
independence
 of the nation;
 Free the people from poverty through
policies that provide adequate social
services; and promote full
employment, a rising standard of living
and an improved quality of life for all
(Art. II, Sec. 9, 1987 Constitution)
 The State shall promote social justice
in all phases of national development.
(Sec. 10, Art. II, 1987 Constitution).
 Social justice is neither communism,
nor despotism, nor atomism, nor
anarchy but the humanization of laws;
and the equalization of social and
economic forces by the State so that
justice in its rational and objectively
secular conception may at least be
approximated. (Calalang v. Williams,
1940).
to  Labor laws are meant to implement
and effect social justice. Thus, such
considerations should be taken into
account when dealing with labor cases.
(Rivera v. Genesis Transport Service,
2015).
Equal Work Opportunities
54
  The State shall Ensure equal work 1. Existence of ER-EE Relationship:
opportunities regardless of sex, race, Employee
or creed. 2. Fact of dismissal: Employee
3. Validity of Dismissal: Employer
The State shall assure the rights of workers to:

1. Self-organization,  Employee has burden of proving fact of

2. Collective bargaining, employment and of dismissal
3. Security of tenure, and  Before a case for illegal dismissal can
4. Just and humane conditions of prosper, an employer-employee
work. relationship must first be established
by the employee. (Javier v. Fly Ace
Right of Self- Organization and Collective Corp., 2012)
Bargaining  The employee must first establish by
substantial evidence the fact of his
 The State shall guarantee the right of dismissal from service. If there is no
the people, including those employed dismissal, then there can be no
in the public and private sectors, to question as to the legality or illegality
form unions, associations, or societies thereof. (MZR Industries v. Colambot,
for purposes not contrary to law. (Art. 2013)
III, Sec. 8, 1987 Constitution)  Employer has burden of proving valid
 The State shall guarantee the rights of dismissal. Unsubstantiated accusations
all workers to self-organization, or baseless conclusions of the
collective bargaining and negotiations, employer are insufficient legal
and peaceful concerted activities, justifications to dismiss an employee.
including the right to strike in The unflinching rule in illegal dismissal
accordance with law. They shall be cases is that the employer bears the
entitled to security of tenure, humane burden of proof. (Garza v. Coca-Cola
conditions of work, and a living wage. Bottlers Philippines, Inc., 2014)
They shall also participate in policy and  The Penalty imposed must be
decision-making processes affecting commensurate with the gravity of the
their rights and benefits as may be offense. Not every case of
provided by law. insubordination or willful disobedience
Construction in Favor of Labor by an employee reasonably deserves
the penalty of dismissal. The penalty to
 All doubts in the implementation and be imposed on an erring employee
interpretation of the provisions of this must be commensurate with the
Code, including its implementing rules gravity of his offense. (Montallana v.
and regulations, shall be resolved in La Consolacion College, 2014)
favor of labor. (Art. 4, LC)
 In case of doubt, all legislation and all II. EXISTENCE OF EMPLOYER- EMPLOYEE
labor contracts shall be construed in RELATIONSHIP; TESTS
favor of the safety and decent living for
the laborer. (Art. 1702, Civil Code)
 Atty. JMM: Article 4 of the Labor Code
EMPLOYER-EMPLOYEE RELATIONSHIP
only applies when there is doubt as to (ER-EE)
the implementation and interpretation
of the Labor Code. This does not mean Employer (ER)
that Labor gets an undue advantage. If
there is no doubt in the law, it will be  Any person acting directly or indirectly
applied as it is (Spectra, 2018) in the interest of an employer in
relation to an employee.
Burden of Proof and Quantum of Evidence  Any person, natural or juridical,
employing the services of the
Summary on Burden of Proof:
employee.

55
Includes: done but also as to the means and
methods by which the same is to be
 The government accomplished (Pacific Consultants
 All its branches, subdivisions and International v. Schonfeld, 516 SCRA
instrumentalities 209).
 All government-owned or controlled  Registration of a person in the SSS is a
corporations and institutions conclusive indication of ER-EE
 All nonprofit private institutions, or Relationship. In registration before the
organizations. SSS, ER-EE relationship must be
 Does not include any labor organization present (Haveria v. SSS, 2018).
or any of its officers or agents except
when acting as ER.

Employee (EE) ECONOMIC DEPENDENCY TEST (Francisco

v. NLRC, 2006)
 Any individual employed by an
employer. Two-tiered approach:
 Any person compulsorily covered by
the GSIS under C.A. No. 168, as 1. Control Test (refer to the Four-Fold
amended Test)
 Atty. JMM: The existence of ER-EE 2. Underlying economic realities within
the activity or relationship
relationship is both a question of law
 The economic dependency test is
and of fact
 The existence or absence of EE-ER especially appropriate where there is
no written agreement or terms of
relationship is a question of law and of
reference to base the relationship on;
fact, each in its defined sense.
and due to the complexities of the
Ultimately, it is a question of fact
relationship based on the various
because whether one exists or not is
positions and responsibilities given to
dependent upon the facts of each case.
the worker over the period of the
(SSS v. CA and Ayalde, 2000)
latter’s employment (Francisco v.
However,
NLRC, 2006).
 it is a question of law because it cannot
be made the subject of agreement
(Tabas et.al. v. California
Manufacturing Co., 1989) III. TERMINATION OF EMPLOYMENT

Test to Determine Existence

FOUR-FOLD TEST (Sonza v. ABS-CBN, TERMINATION BY EMPLOYER

2004)
Security of Tenure [Art. 294, LC]
1. Selection and engagement of the
 In case of regular employment, the ER
employee;
shall not terminate the services of an
2. Payment of wages;
EE except for a just cause or when
3. Power of dismissal; and
authorized by this Title.
4. Employer’s power to control the
 An EE who is unjustly dismissed from
employee’s conduct with respect to the
work shall be entitled to:
means and methods by which the work
is to be accomplished
1. Reinstatement without loss of seniority
 It is the so-called “control test” which
rights, and other privileges,
constitutes the most important index of
2. Full backwages inclusive of allowance,
the existence of the employer-
and
employee relationship that is, whether
3. Other benefits or their monetary
the employer controls or has reserved
equivalent
the right to control the employee not
 Reckoning period of computation: from
only as to the result of the work to be
the time his compensation was

56
 withheld up to his actual judgment. (Northwest Airlines Inc v.
reinstatement. Del Rosario, 2014)

 EE must first establish fact of Requisites of Willful Disobedience

dismissal. Before the ER must bear the 1. There must be disobedience or
burden of proving that the dismissal insubordination;
was legal, the EE must prove by 2. The disobedience or insubordination
substantial evidence the fact of his must be willful or intentional
dismissal from service for the question characterized by a wrongful and
of the legality or illegality of the perverse attitude;
dismissal to arise. (MZR Industries v. 3. The order violated must be reasonable,
Colambot, 2013) lawful and made known to the
 ER’s burden of proving legality of employee
dismissal - The burden of proving the 4. The order must pertain to the duties
termination was for a valid or which he has been engaged to
authorized cause shall rest on the ER. discharge.
(Art. 292 (b))

Requisites for Validity B. Gross and Habitual Neglect of

Duties
Substantive due process
Requisites
 Substantive Due Process - whether the
termination was based on the 1. There must be a neglect of duty
provisions of the Labor Code or in 2. The neglect must be both gross and
accordance with jurisprudence. habitual in character.
 The dismissal must be for any of the  Gross negligence has been defined as
causes provided for in Art. 297-299 the want or absence of or failure to
exercise slight care or diligence, or the
JUST CAUSES entire absence of care. It evinces a
thoughtless disregard of consequences
a. Serious Misconduct or Willful without exerting any effort to avoid
Disobedience (Insubordination) them. In order to constitute just cause
b. Gross & Habitual Neglect of Duties for an EE’s dismissal due to negligence,
c. Fraud/Willful Breach of Trust it must be both gross and habitual. A
d. Commission of A Crime single or an isolated act cannot be
e. Analogous cases categorized as habitual. (National
Bookstore v. CA, 2002)
A. Serious Misconduct or Willful
Disobedience  Gross negligence - want of care in the
Requisites of Serious Misconduct performance of one’s duties
 Habitual neglect - repeated failure to
1. There must be misconduct perform one’s duties for a period of
2. The misconduct is of such grave and time.
aggravated character  Gross negligence includes gross
3. It must relate to the performance of inefficiency
the employee’s duties  Gross and habitual neglect of duty
4. A showing that the employee becomes includes gross inefficiency, negligence
unfit to continue working for the and carelessness.
employer.
 Misconduct refers to the improper or C. Fraud/Willful Breach of Trust
wrong conduct that transgresses some
established and definite rule of action, Requisites of fraud or willful breach of trust:
a forbidden act, a dereliction of duty, 1. There must be an act, omission or
willful in character, and implies concealment;
wrongful intent and not mere error in

57
 2. The act, omission or concealment 2. Fiduciary Rank and File - those who in
involves a breach of legal duty, trust, the normal and routine exercise of
or confidence justly reposed; their functions, regularly handle
3. It must be committed against the ER or significant amounts of money or
his/her representative; and property. Ex. Cashiers, auditors,
4. It must be in connection with EE’s property custodians
work.
Managerial Fiduciary Rank-
When dismissal is proper for fraud/willful
and-File
breach of trust:
 Mere  Proof of
 Such breach is willful if it is done existence of involvement in
intentionally, knowingly, and a basis for the alleged
purposely, without justifiable excuse as the belief of events in
distinguished from an act done EE’s guilt. question
carelessly, thoughtlessly, heedlessly or required; mere
inadvertently.  Employment uncorroborated
 The act complained of must be work- for a long assertions and
related and shows that the employee is time is accusations are
unfit to continue working. counted not enough.
 In addition, it must be premised on the AGAINST the
fact that the EE concerned holds a EE
position of responsibility, trust and
confidence or is entrusted with
D. Commission of a Crime
confidence with respect to delicate
matters such as handling or case and Requisites:
protection of the property and assets of
the ER. (Villanueva, Jr. v. NLRC, 2012) 1. There must be an act or omission
punishable or prohibited by law; and
Requisites of loss of confidence 2. The act or omission was committed by
the EE against the person of the ER or
1. There must be an act, omission or
his family, or his duly authorized
concealment;
representative
2. The act, omission or concealment
 The ER may validly dismiss for loss of
justifies the loss of trust and
trust and confidence an EE who
confidence of the ER to the EE;
commits an act of fraud prejudicial to
3. The EE concerned must be holding a
the interest of the ER. Neither a
position of trust and confidence;
criminal prosecution nor a conviction
4. The loss of trust and confidence should
beyond reasonable doubt for the crime
not be simulated;
is a requisite for the validity of the
5. It should not be used as a subterfuge
dismissal. (Concepcion v. Mimex
for causes which are improper, illegal
Imports, 2012).
or unqualified; and
6. It must be genuine and not a mere
E. Analogous causes
afterthought to justify an earlier action
taken in bad faith. Requisites

Positions of trust and confidence 1. There must be an act or omission

similar to those specified just causes;
1. Managerial EEs - vested with powers or
and
prerogatives to lay down management
2. The act or omission must be voluntary
policies and to hire, transfer, suspend,
and/or willful on the part of the EEs.
lay-off, recall, discharge, assign or
discipline employees or effectively Other causes
recommend such managerial actions.
1. Abandonment
2. Courtesy resignation

58
 3. Change of ownership the infractions are related to the
4. Habitual absenteeism/tardiness subsequent offense upon which the
5. Poor performance basis of termination is decreed.
6. Past offenses
7. Habitual infractions Habitual infractions
8. Drug Addiction  Atty. JMM: This is analogous to
9. Immorality gross/habitual neglect of duties
10. Totality of infractions  A series of irregularities when put
11. Pregnancy out of wedlock together may constitute serious
Abandonment misconduct, under which Art 297 of the
Labor Code is a just cause for
It is the deliberate and unjustified refusal of an dismissal.
employee to resume his employment. It is a
form of neglect of duty. Drug Addiction

Courtesy resignation  Atty. JMM: This is analogous to Serious

 Resignation per se means voluntary
relinquishment of a position or office.
Adding the word ‘courtesy’ did not
change the essence of the resignation.
(Batongbacal v. Associated Bank,
2013)
Change of ownership
 A mere change in the equity
composition of a corporation is neither
just nor an authorized cause that
would legally permit the dismissal of
the corporation’s employees en masse.
(SME Bank Inc. v. De Guzman, 2013)
Habitual absenteeism/tardiness
 Atty. JMM: This is analogous to gross
neglect of duty.
Poor performance
 Atty. JMM: This is analogous to
gross/habitual neglect of duties
 It is tantamount to inefficiency and
incompetence in the performance of
official duties. An unsatisfactory rating
can be a just cause for dismissal only if
it amounts to gross and habitual
neglect of duties. Poor or
unsatisfactory performance of an
employee does not necessarily mean
he is guilty of gross and habitual
neglect of duty.
Past offenses
 Previous offenses may be used as a
valid justification for dismissal only if
Misconduct and Willful Disobedience
 Drug Addiction is a valid ground for an
ER to terminate the employment of the
addicted EE.
Immorality
 Atty. JMM: This is analogous to Serious
Misconduct and Willful Disobedience
 Disgraceful or immoral conduct can be
used as a basis for termination of
employment.
 Standard of morality: It is public and
secular, not religious. Whether a
conduct is considered disgraceful or
immoral should be made in accordance
with the prevailing norms of conduct,
which as stated in Leus, refer to those
conducts which are proscribed because
they are detrimental to conditions upon
which depend the existence of and
progress of human society.
 Pregnancy out of wedlock: When the
law speaks of immoral or necessarily,
disgraceful conduct, it pertains to
public and secular morality.
 Pre-marital sexual relations between
two consenting adults, who have no
impediment to marry each other, and
consequently, conceiving a child out of
wedlock, gauged from a purely public
and secular view of morality does NOT
amount to an immoral conduct. (Cheryl
Leus v. St. Scholastica College
Westgrove, 2015)
AUTHORIZED CAUSES
The ER may also terminate the employment of
any EE due to:

59
 a. The installation of labor-saving devices,  GR: In cases of installation of labor-
b. Redundancy, saving devices, redundancy and
c. Retrenchment to prevent losses or retrenchment, the Last-In, First-Out
d. The closing or cessation of operation of Rule shall apply.
the establishment or undertaking not  XPN: EE volunteers to be separated
due to serious loss [Art. 298] from employment.

Other causes B. Redundancy

a. Disease incurable in 6 months [Art.
299]
b. Enforcement of union security clause in
the CBA
c. Dismissal of union officers for the
conduct of an illegal strike; Dismissal
of union members for participating in
the commission of illegal acts in a
strike [Art. 279 (a)]
d. Termination in conformity with existing
statute/qualification requirements.
 Written notice - For all authorized
causes, a written notice served on both
the EEs and the DOLE at least one
month prior to the intended date of
termination is required.
 Redundancy exists when the service
capability of the workforce is in excess
of what is reasonably needed to meet
the demands of the business
enterprise.
 A position is redundant when it is
superfluous and superfluity of a
position or positions could be the result
of a number of factors such the
overhiring of workers, a decrease in
the volume of business or dropping of
a particular line or service previously
manufactured or undertaken by the
enterprise. (Morales v. Metrobank,
2012)
Requisites

A. Installation of labor-saving devices 1. There must be superfluous positions or

services of EEs;
 This refers to the installation of 2. The positions or services are in excess
machinery to effect efficiency and of what is reasonably demanded by the
economy in the ER’s method of actual requirements of the enterprise
production. to operate in an efficient and
economical manner;
Requisites 3. There must be good faith in abolishing
1. There must be introduction of redundant positions;
machinery, equipment, or other 4. There must be fair and reasonable
devices; criteria in selecting the employees to
2. The introduction must be done in good be terminated; and
faith; 5. There must be adequate proof of
3. The purpose for such introduction must redundancy such as but not limited to
be valid such as to save on cost, the new staffing pattern, feasibility
enhance efficiency and other justifiable studies/proposal, on the viability of
economic reasons; newly created positions, job description
4. There is no other option available to and the approval by the management
employer than the introduction of of the restructuring.
machinery, equipment or device and
the consequent termination of  In implementing a redundancy
employment of those affected thereby; program, the ER is required to adopt
and fair and reasonable criteria taking into
5. There must be fair and reasonable consideration factors such as (a)
criteria in selecting employees to be preferred status, (b) efficiency, and (c)
terminated. seniority among others. (Morales v.
Metrobank, 2012)

60
 C. Retrenchment to prevent serious
loss
Requisites
1. The retrenchment is reasonably
necessary and likely to prevent
business losses;
2. The losses, if already incurred, are not
merely de minimis, but substantial,
serious, actual and real, or if only
expected are reasonably imminent as
perceived objectively and in good faith
by the employer;
3. The expected or actual losses must be
proved by sufficient and convincing
evidence;
 The retrenchment must be in good
faith for the advancement of its
interest and not to defeat or
circumvent the employees’ right to
security of tenure; and
 There must be fair and reasonable
criteria in ascertaining who would be
dismissed and would be retained
among the employees such as status,
efficiency, seniority, physical fitness,
age and financial hardship for certain
workers.
 The ER bears the burden of proving the
existence of the imminence of
substantial losses with clear and
satisfactory evidence that there are
legitimate business reasons justifying a
retrenchment. (Mount Carmel College
Employees Union v. Mount Carmel
College, 2014)
Two kinds of losses justifying retrenchment
1. Incurred losses - substantial, serious
actual and real
2. Expected losses - reasonably imminent
D. Closing or cessation of business
not due to serious loss
3. There is no other option available to
the employer except to close or cease
operations.
4. The ER must serve a written notice on
the workers and the SOLE at least 1
month before the intended date
thereof. [Art. 298]
Guidelines
 Closure or cessation of operations of
establishment or undertaking may
either be partial or total.
 Closure or cessation of operations of
establishment or undertaking may or
may not be due to serious business
losses or financial reverses. In both
instances, proof must be shown that:
 It was done in good faith to advance
the ER’s interest and not for the
purpose of defeating or circumventing
the rights of EEs under the law or a
valid agreement; and
 A written notice on the affected
employees and the DOLE is served at
least 1 month before the intended date
of termination of employment.
 The ER can lawfully close shop even if
not due to serious business losses or
financial reverses but separation pay,
which is equivalent to at least one
month pay as provided for by Article
283 of the Labor Code, as amended,
must be given to all the affected EEs.
 If the closure or cessation of operations
of establishment or undertaking is due
to serious business losses or financial
reverses, the ER must prove such
allegation in order to avoid the
payment of separation pay. Otherwise,
the affected EEs are entitled to
separation pay.
 The burden of proving compliance with
all the above-stated falls upon the ER.
E. Disease

Requisites An ER may terminate the services of an EE:

1. There must be a decision to close or 1. Who has been found to be suffering

cease operation of the enterprise by from any disease; and
the management; 2. Whose continued employment is
2. The decision was made in good faith; prohibited by law or is prejudicial to his
and health as well as the health of his co-
EEs. [Art. 299]

61
Separation Pay F. Enforcement of Union Security
Clause in CBA
 An employee terminated on the ground
of disease shall be paid separation pay  The law authorizes the enforcement of
equivalent to at least 1 month salary or union security clauses, provided it is
to ½ month salary for every year of not characterized by arbitrariness and
service, whichever is greater. [Art. always with due process.
299]  In terminating the employment of an
 Note: A fraction of at least six (6) employee by enforcing the Union
months being considered as one (1) Security Clause, the ER needs only to
whole year. determine and prove that:
Requisites
1. The union security clause is applicable
 The employee must be suffering from a 2. The union is requesting for the
disease which cannot be cured within 6 enforcement of the union security
months, even with proper medical provision in the CBA
treatment; 3. There is sufficient evidence to support
the union’s decision to expel the EE
Continued employment is either: from the union or company.
a. Prohibited by law or
G. Dismissal of Union Officers for the
b. Prejudicial to his health or
conduct of an illegal strike;
c. Prejudicial to the health of his co-
Dismissal of union members for
employees; and
participating in the commission of
illegal acts in a strike
3. A certification to that effect issued by a
competent public health authority,
 Any union officer who knowingly
which must state that the disease is of
participates in an illegal strike, and any
such nature or at such a stage that it
worker or union officer who knowingly
cannot be cured within a period of six
participates in the commission of illegal
(6) months even with proper medical
acts during a strike may be declared to
treatment.
have lost employment status. [Art.
 Burden of proof with ER- The burden of
279]
proof falls upon the employer to
establish the requisites. In the absence
H. Termination in Conformity with
of such certification, the dismissal must
Existing Statute/ Qualification
be necessarily declared illegal.
Requirements
 Prior certification required - It is only
where there is a prior certification from
 While the right of workers to security
a competent public authority that the
of tenure is guaranteed by the
disease afflicting the EE sought to be
Constitution, its exercise may be
dismissed is of such nature or at such
reasonably regulated pursuant to the
stage that it cannot be cured within 6
police powers of the State to safeguard
months even with proper medical
health, morals, peace, education,
treatment that the latter could be
order, safety, and the general welfare
validly terminated from his job.
of the people.
 Note: If the disease or ailment can be
 Consequently, persons who desire to
cured within the period of 6 months,
engage in the learned professions
the employer shall not terminate the
requiring scientific or technical
employee but shall ask the employee
knowledge may be required to take an
to take a leave of absence. The
examination as a prerequisite to
employer shall reinstate such employee
engaging in their chosen careers. (St.
to his former position immediately
Luke's Medical Center Employees
upon the restoration of his health.
Association v. NLRC, 2007)

62
Procedural due process
The ER shall:
1. Furnish the worker, whose employment
is sought to be terminated, a written
notice containing a statement of the
causes for termination; and
2. Afford the latter ample opportunity to
be heard and to defend himself, with
the assistance of his representative if
he so desires, in accordance with
company rules and regulations
promulgated pursuant to guidelines set
by the DOLE.
Procedural Due Process - manner in which the
dismissal was effected (Twin Notice Rule):
1. The first written notice to be served on
the EEs should contain the specific
causes or grounds for termination
against them, and a directive that the
EEs are given the opportunity to
submit their written explanation within
a reasonable period. (First Notice)
2. The requirement of a hearing is
complied with as long as there was an
opportunity to be heard, and not
necessarily an actual hearing was
conducted.
3. After determining that termination of
employment is justified, the ERs shall
serve the EEs a written notice of
termination indicating that:
period of at least 5 calendar days from
receipt of notice.
3. Detailed narration of the facts and
circumstances that will serve as basis
for the charge against the EE. A
general description of the charge will
not suffice. (Unilever v. Rivera, 2013)
4. The company rules, if any, violated
and/or the grounds under Art. 288
being charged against the EE. (United
Tourist Promotions v. Kemplin, 2014)
Contents of Second Notice:
1. All circumstances involving the charge
against the employee considered
2. Grounds established to justify the
severance of employment. (United
Tourist Promotions v. Kemplin, 2014)
Hearing
 In EE dismissal cases, the essence of
due process is simply the opportunity
to be heard, it is the denial of this that
constitutes a violation of due process
of law. (Technol Eight Philippines
Corporation v. NLRC, 2010)
 While a formal hearing or conference is
ideal, it is not an absolute, mandatory
or exclusive avenue of due process.
(Perez v. PT&T, 2009)
Consequences of Non-Observance of
Procedural Due Process (PDP)

 All circumstances involving the charge Just/ PDP Dismissal Employer’s

against the EE have been considered, Autho liability
and - rized
 The grounds have been established to cause
justify the severance of the
employment. (Second Notice) (Inguillo YES YES VALID No liability.
v. First Phil Scales, 2019) Separation
pay only in
Contents of First Notice: authorized
causes.
1. Specific causes or grounds for
termination against the EE NO YES INVALID Reinstatement
2. Directive that the EE is given the or separation
opportunity to submit his written pay (if
explanation within a “reasonable reinstatement
period” or every kind of assistance that is not
management must accord to enable possible) + full
him to prepare adequately for his backwages
defense. This should be construed as a NO NO INVALID Reinstatement
or separation

63
  Burden of proof: The burden of proving
pay (if
that the termination was for a valid or
reinstatement
is not authorized cause shall rest on the ER.
possible) + full [Art. 292 (b)]
backwages  In illegal dismissal cases, the onus of
proving that the EE was not dismissed
YES NO VALID Liable for or, if dismissed, that the dismissal was
damages due not illegal, rests on the ER, failure to
to procedural discharge which would mean that the
infirmity
dismissal is not justified and, therefore,
(nominal
illegal. (Macasero v. Southern
damages).
Industrial Gases Philippines, 2014)
Separation
 Liability of officers: As a general rule,
pay if for
officers are not personally liable for
authorized
cause. corporate obligation, with the
exception that in order to hold a
director or officer personally liable
Illegal Dismissal occurs when the following requisites
are present:
Kinds
Reliefs from illegal dismissal
1. No just or authorized cause
The following reliefs are cumulative and not
 For the dismissal of an EE to be valid, alternative:
the dismissal must be for any of the
1. Reinstatement
causes provided for in Art. 297-299.
 An ER who dismisses an EE without Options Given to ERs:
just or authorized cause is liable for:
a. Reinstatement or separation a. Actually reinstate the dismissed
pay if reinstatement is not employees or,
possible; and b. Constructively reinstate them in the
b. Full backwages. payroll.

2. Constructive dismissal 2. Backwages

 Constructive dismissal is cessation of
work because continued employment is
either:
a. Rendered impossible, unreasonable or
unlikely;
b. When there is a demotion in rank or
diminution in pay or both; or
c. When a clear discrimination,
insensibility, or disdain by an employer
becomes unbearable to the employee.
(Dusit Hotel Nikko v. NUHWRAIN-Dusit
Hotel Chapter, 2005)
 The Test of Constructive Dismissal is
whether a reasonable person in the
EE’s position would have felt compelled
to give up his position under the
circumstances. (Tuazon v. Bank of
Commerce, 2012)
3. Damages and Attorney’s Fees
4. Separation Pay
TERMINATION BY EMPLOYEE
1. With notice to the ER
 An EE may terminate without just
cause the ER-EE relationship
 By serving a written notice on the ER
at least one (1) month in advance
 The ER upon whom no such notice was
served may hold the EE liable for
damages [Art. 300]
 Notice is required when termination is
without just cause. Written notice to
resign must be submitted one (1)
month in advance. [Art. 300]
 The 30-day notice requirement for an
EE’s resignation is for the benefit of the
ER in order to afford the him enough
time to hire another EE if needed and
to see to it that there is proper turn-

64
 over of the tasks which the resigning  Retirement- It is the result of a
EE may be handling (Hechanova v. bilateral act of the parties, a voluntary
Matorre, 2013). agreement between the ER and the EE
 Since the 30-day notice is for the ER’s whereby the latter, after reaching a
benefit, he may waive such period certain age agrees to sever his or her
(Paredes v. Feed the Children employment with the former.
Philippines Inc., 2015).
Who are covered:
Resignation
 All EEs in the private sector, regardless
 Resignation is the voluntary act of an of their position, designation, or status,
EE who finds himself in a situation and irrespective of the method by
where he believes that personal which their wages are paid.
reasons cannot be sacrificed in favor of
the exigency of the service, such that XPNS:
he has no other choice but to 1. EEs covered by the Civil Service Law;
disassociate himself from his 2. EEs in retail, service and agricultural
employment. (Cervantes v. PAL establishments or operations regularly
Maritime Corp., 2013) employing not more than ten EEs
To constitute a resignation: Age of retirement
a. It must be unconditional and with the In the absence of a retirement plan or
intent to operate as such; agreement:
b. There must be an intention to
relinquish a portion of the term of 1. Compulsory retirement: 65 years old
office accompanied by an act of 2. Optional retirement: 60 years or more
relinquishment. (but below 65) and having served the
establishment for at least 5 years.
 Atty. JMM: The age requirement and
2. Without notice to the ER the minimum number of years of
 An EE may put an end to the service must both be separately
relationship without serving any notice complied with. They are 2 distinct and
on the ER for any of the following separate requirements for one to avail
requirements: of the benefits of the New Retirement
a. Serious insult by the ER or his Law. If the EE lacks one of these two
representative on the honor and requirements, he/she is not eligible to
person of the EE; receive benefits under this law.
b. Inhuman and unbearable treatment  An EE is free to impose a retirement
accorded the EE by the ER or his age less than 65 for as long as it has
representative; the EE’s consent. (Jaculbe v. Silliman
c. Commission of a crime or offense by University, 2007)
the ER or his representative against For surface mine workers:
the person of the EE or any of the
immediate members of his family; and 1. Compulsory retirement age: 60 years
d. Other causes analogous to any of the old
foregoing. [Art. 300] 2. Optional retirement age is 50 and
 Notice is NOT required when having served the establishment for at
termination is with just cause. [Art. least 5 years.
300]
For Racehorse Jockeys:
Retirement
 Compulsory Retirement Age: 65 years
 Applicable Laws: Art. 302, LC; RA 7641 old (Spectra 2018).
(New Retirement Pay Law)  EE may still work after retirement:
Upon retirement of an EE, whether

65
 optional or compulsory, his services Legitimate Subcontracting as
may be continued or extended on a distinguished from Labor-Only Contracting
case-to-case basis upon the agreement
of the ER & EE. [Sec. 4, IRR, RA 7641]  Contracting or subcontracting refers to
an arrangement whereby a principal
Amount of Retirement Pay agrees to farm out to a contractor the
performance or completion of a specific
Minimum Components job or work within a definite or
 ½ month ½ month salary predetermined period, regardless of
salary for includes:
whether such job or work is to be
every year of 1. 15 days’
performed or completed within or
service. salary based
outside the premises of the principal.
on the latest
 Note: A salary rate There is "labor-only" contracting where:
fraction of 6 2. Cash
months shall equivalent of 1. The person supplying workers to an
be 5 days SIL employer does not have substantial
considered a 3. 1/12 of 13th capital or investment in the form of
year. month pay.
tools, equipment, machineries, work
4. Other
premises, among others. (No
benefits
 ½ moth’s substantial capital)
which may
salary is
be agreed
equivalent to 2. The workers recruited and placed by
upon
22.5 days. such person are performing activities
between ER
and EE. which are directly related to the
principal business of such employer.
(Work is directly related to ER’s
 Retirement pay under RA 7641 vis-à- business)
vis retirement benefits under SSS and
GSIS laws - The benefits under RA  Effect of labor-only contracting: In
7641 are other than those granted by such cases, the person or intermediary
the SSS or the GSIS. (Secs. 1 & 2, RA shall be considered merely as an agent
7641) of the ER who shall be responsible to
 Retirement Benefits under a CBA or the workers in the same manner and
Applicable Contract: Any EE may retire extent as if the latter were directly
or be retired by his/her ER upon employed by him. (Contractor is ER’s
reaching the age established in the agent, ER liable for all EE benefits of
CBA or other applicable Contractor’s EEs)
agreement/contract and shall receive
the retirement benefits granted Rules for Contracting/Subcontracting
therein; provided, however, that such
1. Whenever ER enters into a contract
retirement benefits shall not be less
with another person for the
than the retirement pay required under
performance of the former’s work, the
RA 7641, and provided further that if
EEs of the contractor and of the
such retirement benefits under the
latter’s subcontractor, if any, shall be
agreement are less, the ER shall pay
paid in accordance with the provisions
the difference. [Art. 302; Sec. 3.2,
of the Labor Code. [Art. 106, par. 1]
IRR]
2. In the event that the contractor or
subcontractor fails to pay the wages of
his EEs in accordance with this Code,
IV. REQUIREMENTS FOR VALID LABOR- the ER shall be jointly and severally
ONLY CONTRACTING liable with his contractor or
subcontractor to such employees:
a. To the extent of the work performed
under the contract

66
 b. In the same manner and extent that he
is liable to EEs directly employed by
him. [Art. 106, par. 2]
3. The SOLE may, by appropriate
regulations, restrict or prohibit the
contracting-out of labor to protect the
rights of workers established under this
Code. [Art. 106, par. 3]
 He/She may make appropriate
distinctions between labor-only
contracting and job contracting as well
as differentiations within these types of
contracting.
 He/She may determine who among the
parties involved shall be considered the
employer for purposes of this Code.
4. An ER, whether direct or indirect, may
require the contractor or subcontractor
to furnish a bond equal to the cost of
labor under contract, on condition that
the bond will answer for the wages due
the employees should the contractor or
subcontractor, as the case may be, fail
to pay the same. [Art. 108]
5. Contractors and subcontractors
referred to in these rules are prohibited
from engaging in recruitment and
placement activities.
 A service agreement refers to the
contract between the principal and
contractor containing the terms and
conditions governing the performance
or completion of a specific job or work
being farmed out for a definite or
predetermined period.
Elements of Legitimate Contracting:
To be considered legitimate contracting or
subcontracting, the following elements must
concur:
1. Distinct and independent business:
Contractor or subcontractor is engaged
in a distinct and independent business
and undertakes to perform the job on
its own responsibility, according to its
own manner and method;
2. Substantial capital or investment:
Contractor or subcontractor has
substantial capital to carry out the job
67
farmed out by the principal on his
account, manner and method,
investment in the form of tools,
equipment, machinery and supervision;
 Substantial Capital refers to paid-up
capital stocks/shares of at least
P5,000,000 in the case of corporations,
partnerships and cooperatives; in case
of single proprietorship, a net worth of
at least P5,000,000.
3. Free from control/direction of the
principal: In performing the work,
contractor or subcontractor is free from
the control/direction of the principal in
all matters regarding performance of
the work except the result;
4. Compliance with labor laws: Service
Agreement ensures that employees of
the contractor/subcontractor are given
all the benefits and rights they are
entitled to under labor laws.
Trilateral relationship
 When the above-elements are present,
a trilateral relationship arises. It
consists of the following parties:
1. Principal - Any natural or juridical
entity, whether an employer or not,
who puts out or farms out a job or
work to a contractor.
2. Contractor - Any person or entity
engaged in a legitimate contracting or
subcontracting arrangement providing
services for a specific job or
undertaking farmed out by a principal
under a Service Agreement.
3. Contractor’s employee - Employee of
the contractor hired to perform or
complete a job or work farmed out by
the principal.
 Note: Contractor may also be a
subcontractor.
Relationships within the trilateral relationship
1. ER- EE between the contractor and the
employees it engaged to perform the
specific job, work or service being
contracted; and
2. Contractual relationship between the
principal and the contractor as
 governed by the provisions of the Civil operating for profit or not, shall have
Code. the right to self-organization, to form,
join, or assist labor organization of
their own choosing for purposes of
collective bargaining (Art. 254, LC).
V. RIGHTS OF EMPLOYEES AND OF LABOR
 Employees of government corporations
ORGANIZATIONS; MEMBERSHIP IN
established under the corporation code
UNIONS
shall have the right to organize, and
The State shall assure the rights of workers to: bargain collectively with their
respective employers (Art. 255, LC).
1. Self-organization,
 Infringement of the right to self-
2. Collective bargaining,
organization: It shall be unlawful for
3. Security of tenure, and
any person to restrain, coerce,
4. Just and humane conditions of work.
discriminate against or unduly interfere
[Art. 3]
with employees and workers in their
Right of Self- Organization and Collective exercise of the right to self-
Bargaining organization (Art. 257, LC)

 The State shall guarantee the right of Scope of right to self-organization:

the people, including those employed
 Right to form, join or assist labor
in the public and private sectors, to
organizations of their own choosing for
form unions, associations, or societies
the purpose of collective bargaining
for purposes not contrary to law. (Art.
through representatives of their own
III, Sec. 8, 1987 Constitution)
choosing (Art. 257, LC);
 The State shall guarantee the rights of
 Right to engage in lawful concerted
all workers to self-organization,
activities for the same purpose
collective bargaining and negotiations,
(collective bargaining) or for their
and peaceful concerted activities,
mutual aid and protection (Art. 257,
including the right to strike in
LC)
accordance with law. They shall be
 The right to form or join a labor
entitled to security of tenure, humane
organization necessarily includes the
conditions of work, and a living wage.
right to refuse or refrain from
They shall also participate in policy and
exercising said right. It is self-evident
decision-making processes affecting
that just as no one should be denied
their rights and benefits as may be
the exercise of a right granted by law,
provided by law.
so also, no one should be compelled to
 The State shall promote the principle of
exercise such a conferred right. (Reyes
shared responsibility between workers
v. Trajano, 1992)
and employers and the preferential use
 The freedom to form organizations
of voluntary modes in settling disputes,
would be rendered nugatory if the
including conciliation, and shall enforce
members could not choose their own
their mutual compliance therewith to
leaders to speak on their behalf and to
foster industrial peace.
bargain for them. (Pan- American
 The State shall regulate the relations
World Airways, Inc v. Pan- American
between workers and employers,
Employees Association, 1969)
recognizing the right of labor to its just
share in the fruits of production and RIGHTS OF A LABOR ORGANIZATION
the right of enterprises to reasonable
returns on investments, and to A Legitimate Labor Organization (LLO) shall
expansion and growth. (Art. XIII, Sec. have the ff. rights:
3, 1987 Constitution)
1. To represent its members in
 All persons employed in commercial,
collective bargaining
industrial and agricultural enterprises,
and in religious, charitable, medical or
educational institutions, whether

68
 2. To be certified as exclusive All Employees
representative in collective
bargaining  All persons employed in commercial,
3. To ask for financial statements industrial and agricultural enterprises
4. To own property and in religious, charitable, medical or
5. To sue and be sued educational institutions, whether
6. To do acts which benefit the operating for profit or not, shall have
organization the right to self-organization and to
7. To collect membership fees form, join or assist labor organizations
of their own choosing for purposes of
Check Off, Assessment, Agency Fees collective bargaining. (Presumes ER-EE
relationship)
Check- Off  Ambulant, intermittent and itinerant
 A check-off is a process or device workers, self-employed people, rural
whereby the ER, on agreement with workers and those without any definite
the Union, recognized as the proper employers may form labor
bargaining representative, or on prior organizations for their mutual aid and
authorization from the EEs, deducts protection. [Art. 253]
union dues or agency fees from the  Any EE, whether employed for a
latter’s wages and remits them directly definite period or not, shall, beginning
to the Union. (Marino v. Gamilla, 2009) on his first day of service, be
considered an employee for purposes
Union Dues vs. Agency Fees of membership in any labor union. [Art.
292(c)]
 “Employee” (EE) shall include any
individual whose work has ceased as a
Basis UNION AGENCY result of or in connection with any
DUES FEES
current labor dispute or because of any
From whom Collected Collected
unfair labor practice if he has not
collected from union by the
obtained any other substantially
members union
members equivalent and regular employment.
from the [Art. 219(f)]
non-
Government EEs of corporations created
members
belonging under the Corporation Code
to the same
 The right to self-organization shall not
bargaining
be denied to government EEs. [Sec.
unit who
receive 2(5), Art. IX-B, 1987 Constitution]
benefits  EEs of government corporations
under the established under the Corporation Code
CBA. shall have the right to organize and to
Need for There must Can be bargain collectively with their
written be an assessed respective ERs
authorizatio individual even  All other EEs in the civil service shall
n written without a have the right to form associations for
authorizatio written purposes not contrary to law. [Art.
n by authorizatio 254]
individual n of the EE  Government EEs right to organize is for
members concerned.
a limited purpose. – Government EEs
cannot negotiate matters which are
fixed by law such as those involving
appropriation of funds.
Membership in Unions
Supervisory EEs
Scope

69
  Supervisory EEs are those who, in the
interest of the ER, effectively
recommend such managerial actions if
the exercise of such authority is not
merely routinary or clerical in nature
but requires the use of independent
judgment. [Art. 219(m)]
 What is essential is the nature of the
EE’s function and not the nomenclature
or title given to the job which
determines whether the EE has rank-
and-file or managerial status or
whether he is a supervisory employee.
(Tagaytay Highlands International Golf
Club, Inc. v. Tagaytay Highlands
Employees Union-PTGWO, 2003)
Aliens with valid working permits
 GR: All aliens, natural or juridical, are
strictly prohibited from engaging
directly or indirectly in all forms of
trade union activities. [Art. 284]
 XPN: Aliens may exercise the right to
self-organization and join or assist
labor unions for purposes of collective
bargaining, provided the following
requisites are fulfilled:
1. With valid working permits issued by
the DOLE; and
2. They are nationals of a country which
grants the same or similar rights to
Filipino workers [Art. 284]
Security personnel
 The security guards and other
personnel employed by the security
service contractor shall have the right:
1. To form, join, or assist in the formation
of a labor organization of their own
choosing for purposes of collective
bargaining and
2. To engage in concerted activities which
are not contrary to law including the
right to strike
Ineligibility of Managerial EEs; Rights of
Supervisory EEs
 Managerial EEs are not eligible to join,
assist or form any labor organization.
[Art. 255]
 Supervisory EEs shall not be eligible for
membership in the collective
70
bargaining unit of the rank-and-file EEs
but may join, assist or form separate
collective bargaining units and/or
legitimate labor organizations of their
own. The rank-and-file union and the
supervisors' union operating within the
same establishment may join the same
federation or national union.
 Rationale: Supervisory EEs, while in
the performance of supervisory
functions, become the alter ego of the
management in the making and the
implementing of key decisions at the
sub-managerial level. Certainly, it
would be difficult to find unity or
mutuality of interests in a bargaining
unit consisting of a mixture of rank-
and-file and supervisory EEs.
Doctrine of Necessary Implication
 While Art. 255 of the Labor Code
singles out managerial EEs as ineligible
to join, assist or form any labor
organization, under the doctrine of
necessary implication, confidential EEs
are similarly disqualified. This doctrine
states that what is implied in a statute
is as much a part thereof as that which
is expressed. (Metrolab Industries Inc.
v. Roldan-Confessor, 1996)
Nature of Access Test
 Confidential EEs, by the nature of their
functions, assist and act in a
confidential capacity to, or have access
to confidential matters of, persons who
exercise managerial functions in the
field of labor relations.
Requisites
1. The confidential relationship must exist
between the EEs and his supervisor,
and
2. The supervisor must handle the
prescribed responsibilities relating to
labor relations. (San Miguel
Supervisors and Exempt Union v.
Laguesma, 1997)
Function Test: Nomenclature is not controlling
 The mere fact that an EE is designated
“manager” does not ipso facto make
him one. Designation should be
 reconciled with the actual job
description of the EE. (Paper Industries
Corp. of the Philippines. v. Laguesma,
2000)
 Confidential information: Must relate to
labor relations and not from a business
standpoint
 An EE must assist or act in a
confidential capacity and obtain
confidential information relating to
labor relations policies. Exposure to
internal business operations of the
company is not per se a ground for the
exclusion in the bargaining unit. (Coca-
Cola Bottlers v. IPTEU, 2015)
Rationale of Exclusion of Confidential EEs
 If confidential employees could
unionize in order to bargain for
advantages for themselves, then they
could be governed by their own
motives rather than the interest of the
employers.
 Moreover, unionization of confidential
EEs for the purpose of collective
bargaining would mean the extension
of the law to persons or individuals
who are supposed to act in the interest
of the ERs. It is not far-fetched that in
the course of collective bargaining,
they might jeopardize that interest
which they are duty bound to protect.
(Metrolab Industries Inc. v. Roldan-
Confessor, 1996)
Other People Who Cannot Form, Join or Assist
Labor Organizations
New EEs
 Persons who are not EEs of a company
are not entitled to the constitutional
right to join or form a labor
organization for purposes of collective
bargaining. The question of whether
ER-EE relationship exists is a Bargaining Unit or Commingling
primordial consideration before
extending labor benefits under the
workmen's compensation, social
security, Medicare, termination pay
and labor relations law. (Singer Sewing
Machine Co. v. Drilon, 1991)
EE-member of a Cooperative
71
 GR: An EE of a cooperative who is a
member and co-owner thereof cannot
invoke the right to collective bargaining
for certainly an owner cannot bargain
with himself or his co-owners.
(Batangas-I Electric Cooperative Labor
Union v. Romeo A. Young, 1988)
 XPN: EEs who withdrew their
membership from the cooperative are
entitled to form or join a labor union
for the negotiations of a Collective
Bargaining Agreement. (Central Negros
Electric Cooperative, Inc. v. DOLE,
1991)
 Irrespective of the degree of their
participation in the actual management
of the cooperative, all members thereof
cannot form, assist or join a labor
organization for the purpose of
collective bargaining. (Benguet Electric
Cooperative v. Ferrer-Calleja, 1989)
EEs of International Organizations
 International organizations are
endowed with some degree of
international legal personality. They
are granted jurisdictional immunity, as
provided in their organization’s
constitutions, to safeguard them from
the disruption of their functions.
Members of the AFP, Policemen, Police
Officers, Firemen, and Jail Guards
 Members of the AFP, Policemen, Police
Officers, Firemen and Jail Guards are
expressly excluded by EO 180, Sec. 4
from the coverage of the EO 180 which
provides guidelines for the exercise of
the right to organize of government
EEs.
Commingling or Mixture of Membership
Effect of Inclusion of EEs Outside the
 GR: It shall not be a ground for the
cancellation of the registration of the
union. Said EEs are automatically
deemed removed from the list of
membership of said union. [Art. 256]
 Atty. JMM: Previously, commingling
was a ground for cancellation of union
registration. But now, under the
amendments, commingling is no longer
 a ground for denial of registration, but
rather, the disqualified EEs are just
deemed removed from the union.
 XPN: Unless such mingling was brought
about by misrepresentation, false
statement or fraud under Art. 247.
Rights and Conditions of Membership
Nature of Relationship
Member-Labor Union
 The nature of the relationship between
the union and its members is fiduciary
in nature, which arises from the
dependence of the EE on the union,
and from the comprehensive power
vested in the union with respect to the
individual. The union may be
considered but the agent of its
members for the purpose of securing
for them fair and just wages and good
working conditions. (Heirs of Cruz v.
CIR, 1969)
Admission and Discipline of Members
 No arbitrary or excessive initiation fees
or fines. No arbitrary or excessive
initiation fees shall be required of the
members of a legitimate labor
organization nor shall arbitrary,
excessive or oppressive fine and
forfeiture be imposed. [Art. 250(e)]
Prohibition on subversive activities or
membership
 No labor organization shall knowingly
admit as members or continue in
membership any individual who:
a. Belongs to a subversive organization;
or
b. Who is engaged directly or indirectly in
any subversive activity;
 Unions cannot arbitrarily exclude
qualified applicants: Unions are not
entitled to arbitrarily exclude qualified
applicants for membership, and a
closed shop provision would not justify
the ER in discharging, or a union in
insisting upon the discharge of, an
employee whom the union thus refuses
to admit to membership, without any
72
reasonable ground therefor. Needless
to say, if said unions may be compelled
to admit new members, who have the
requisite qualifications, with more
reason may the law and the courts
exercise the coercive power when the
EE involved is a long-standing union
member, who, owing to provocations
of union officers, was impelled to
tender his resignation which he
forthwith withdrew or revoked.
(Salunga v. CIR, 1967)
VI. MANAGEMENT PREROGATIVE
 Management Prerogative is the right of
an ER to regulate all aspects of
employment.
 Courts often decline to interfere in
legitimate business decisions of ERs. In
fact, labor laws discourage interference
in ERs’ judgment concerning the
conduct of their business.
 Basis: The State recognizes the
indispensable role of the private sector,
encourages private enterprise, and
provides incentives to needed
investments. (Art. II, Sec. 20, 1987
Constitution)
 The State shall regulate the relations
between workers and employers,
recognizing the right of labor to its just
share in the fruits of production and
the right of enterprises to reasonable
returns to investments, and to
expansion and growth. (Art. XIII, Sec.
3 (4), 1987 Constitution)
Limits to Management Prerogative
Limits to Management Prerogative
1. Good faith - So long as a company’s
management prerogatives are
exercised in good faith for the
advancement of the employer’s
interest and not for the purpose of
defeating or circumventing the rights of
the employees under special laws or
under valid agreements, this Court will
uphold them (Ymbong v. ABS-CBN,
2012).
2. Without grave abuse of discretion - The
managerial prerogative to transfer
 personnel must be exercised without
grave abuse of discretion, bearing in
mind the basic elements of justice and
fair play. Having the right should not
be confused with the manner in which
the right is exercised.
3. Law – The privilege of management
prerogative is not absolute, but subject
to limitations imposed by law.
4. Collective Bargaining – The CBA
provisions agreed upon by the
Company and the Union delimit the
free exercise of management
prerogative. The parties in a CBA may
establish such stipulations, clauses,
terms and conditions as they may
deem convenient provided these are
not contrary to law, morals, good
customs, public order or public policy.
5. Equity and/or Substantial Justice – The
Court should still ensure that the
employer exercises the prerogative to
discipline humanely and considerately,
and that the sanction imposed is
commensurate to the offense involved
and to the degree of the infraction.
DISCIPLINE
Components of Right to Discipline:
The Right to discipline includes the rights of
the ER to:
1. Discipline
2. Dismiss
3. Determine who to punish
4. Promulgate rules and regulations
5. Impose a penalty subject to the
proportionality rule
6. Right to choose what penalty to impose
7. Right to impose heavier penalties than
what company rules provide.
 Proportionality Rule- Penalty imposed
should be commensurate to the
infraction committed.
TRANSFER OF EMPLOYEES
 Transfer is the lateral movement from
one position to another of equivalent
rank, level, or salary, without break of
service.
Kinds of Transfer:
73
A transfer means a movement:
1. From one position to another
equivalent rank, level, or salary,
without break of service.
2. From one office to another within the
same business establishment (Chan,
2017).
 Reason for transfer: To maximize
service of EEs
 Consent of EEs is not required. It is
inherent in management prerogative.
 An EE’s right to security of tenure does
not give him the vested right in his
position as would deprive the company
of its prerogative to change his
assignment or transfer him where he
would be most useful (PT&T v. NLRC,
1991).
Requisites of a Valid Transfer:
1. It must be REASONABLE or it must
have a sound purpose- If there is a
need to augment work force because of
a work assignment.
2. NOT INCONVENIENT to the welfare
of EE
3. NOT PREJUDICIAL to the EE
4. NOT INVOLVE A DEMOTION of rank
or status or a diminution of EE’s salary
and other benefits.
5. Not motivated by DISCRIMINATION
towards EE
6. Must not be made in BAD FAITH
 Violation of these requirements
constitutes constructive dismissal.
 Right to transfer is a valid
management prerogative, but it must
not be exercised as a means to harass
EEs.
Reliefs of Illegal Transfer:
 Illegal Transfer- Reinstatement
 Constructive Dismissal-
Reinstatement with backwages
Notes:
 The exercise of the prerogative to
transfer or assign from one office or
area of operation to another is valid
 provided that there is no demotion in
rank and status, nor diminution of
salary and other benefits. The transfer
should not be motivated by
discrimination or made in bad faith.
(Mendoza v. Rural Bank of Lucban,
2004).
 A commitment by EE to be reassigned
anywhere in the Philippines is binding
upon him.
 Even if EE is performing well in his
current post, management may
reassign him anytime.
 The refusal by an EE to be transferred
was held to be justified if there is a
showing that the transfer was directed
by the ER under questionable
circumstances.
 An EE who refuses to be transferred,
when such transfer is valid, is guilty of
insubordination or willful disobedience
of a lawful order of an ER.
 Refusal to be transferred due to
parental obligations, inconvenience,
additional expenses is NOT VALID.
 Refusal to transfer overseas is valid.
 Refusal to transfer consequent to
promotion is valid.
 Transfer to avoid conflict of interest is
valid.
 A transfer from one position to another
occasioned by the abolition of the
position is valid (Chan, 2017).
PRODUCTIVITY STANDARDS
 The ER has the right to demote and
transfer an EE who has failed to
observe proper diligence in his work
and incurred habitual tardiness and
absences and indolence in his
assigned work. (Petrophil Corporation
v. NLRC, 1986)
 In the case of Leonardo v. NLRC
(2000), the ER claimed that the EE
was demoted pursuant to a company
policy intended to foster competition
among its EE. Under this scheme, its
EE are required to comply with a
monthly sales quota. Should a
supervisor such as the EE fail to meet
his quota for several consecutive
months, he will be demoted,
whereupon his supervisor’s allowance
will be withdrawn and be given to the
74
individual who takes his place. When
the EE concerned succeeds in meeting
the quota again, he is re-appointed
supervisor and his allowance is
restored.
 The Supreme Court held that this
arrangement is an allowable exercise
of company rights since an ER is
entitled to impose productivity
standards for its workers. In fact, non-
compliance may be visited with a
penalty even more severe than
demotion.
BONUS
 A bonus is "a gratuity or act of
liberality of the giver which the
recipient has no right to demand as a
matter of right" (Philippine National
Construction Corp. v. NLRC, 345 Phil.
324, 331)
 It is something given in addition to
what is ordinarily received by or
strictly due the recipient.
 The granting of a bonus is basically a
management prerogative which
cannot be forced upon the ER "who
may not be obliged to assume the
onerous burden of granting bonuses or
other benefits aside from the
employee's basic salaries or wages"
(Kamaya Point Hotel v. NLRC, 1989;
Traders Royal Bank v. NLRC, 1990)
 The matter of giving a bonus over and
above the worker’s lawful salaries and
allowances is entirely dependent on
the financial capability of the ER to
give it. (Kimberly-Clark Philippines,
Inc. v. Dimayuga, 2009)
CHANGE OF WORKING HOURS
 Management retains the prerogative,
whenever exigencies of the service so
require, to change the working hours
of its EEs. So long as such prerogative
is exercised in good faith for the
advancement of the ER’s interest and
not for the purpose of defeating or
circumventing the rights of the EEs
under special laws or under valid
agreements, this Court will uphold
 such exercise. (Sime Darby Pilipinas  Non-compete clauses are valid and
Inc. v. NLRC, 1998) enforceable as long as there are
reasonable limitations as to time,
BONA FIDE OCCUPATIONAL trade, and place (Tiu v. Platinum Plans
QUALIFICATIONS Philippines, 2007).
 Bona Fide Occupational Qualification- MARRIAGE BETWEEN EMPLOYEES OF
To justify a bona fide occupational COMPETITOR EMPLOYERS
qualification, the ER must prove two
factors:  GR: Stipulation against marriage- It
1. The employment qualification is shall be unlawful for an ER to require
reasonably related to the essential as a condition of employment or
operation of the job involved; continuation of employment that a
2. There is factual basis for believing woman EE shall not get married, or to
that all or substantially all persons stipulate expressly or tacitly that upon
meeting the qualification would be getting married, a woman EE shall be
unable to properly perform the deemed resigned or separated, or to
duties of the job. actually dismiss, discharge,
discriminate or otherwise prejudice a
Two Theories of Employment Discrimination woman EE merely by reason of her
(Spectra 2018): marriage (Art. 136).
1. Disparate Treatment- Plaintiff must  XPN: In Duncan Association of
prove that an employment policy is Detailman-PTGWO and Pedro Tecson v.
discriminatory in its face. Glaxo Wellcome Philippines, Inc.
2. Disparate Impact- Complainant must (2004), we passed on the validity of
prove that a facial neutral policy has a the policy of a pharmaceutical
disproportionate effect on a part of the company prohibiting its EEs from
class. marrying employees of any competitor
company. We held that Glaxo has a
POST-EMPLOYMENT RESTRICTIONS right to guard its trade secrets,
manufacturing formulas, marketing
 In cases where an EE assails a strategies and other confidential
contract containing a provision programs and information from
prohibiting him or her from accepting competitors. We considered the
competitive employment as against prohibition against personal or marital
public policy, the ER has to adduce relationships with EEs of competitor
evidence to prove that the restriction companies upon Glaxo’s EEs
is reasonable and not greater than reasonable under the circumstances
necessary to protect the employer’s because relationships of that nature
legitimate business interests. The might compromise the interests of
restraint may not be unduly harsh or Glaxo. In laying down the assailed
oppressive in curtailing the EE company policy, we recognized that
legitimate efforts to earn a livelihood, Glaxo only aims to protect its interests
and must be reasonable in light of against the possibility that a
sound public policy. (Rivera v. competitor company will gain access to
Solidbank, 2006) its secrets and procedures. (Star Paper
Corp. v. Simbol, 2006)
Non-Compete Clause
 A requirement that a woman EE must
 A non-compete agreement is a type of remain unmarried could be justified as
“restrictive covenant” generally used a "bona fide occupational qualification,"
by ERs to limit an EE’s freedom to or BFOQ, where the particular
pursue a similar profession if and requirements of the job would justify
when the employment relationship the same, but not on the ground of a
ends. general principle, such as the
desirability of spreading work in the

75
 workplace. A requirement of that
nature would be valid provided it
reflects an inherent quality reasonably
necessary for satisfactory job
performance. (Phil. Telegraph and
Telephone Company v. NLRC, 1997)
VII. ILLEGAL RECRUITMENT OF OVERSEAS
FILIPINO WORKERS
 Illegal Recruitment- Any act
canvassing, enlisting, contracting,
transporting, utilizing, hiring,
procuring workers and includes
referring, contract services, promising
or advertising for employment abroad,
whether for profit or not, when
undertaken by a non-licensee or non-
holder of authority contemplated under
Art. 13(f), LC. [Sec. 5, R.A. No.10022]
Simple Illegal Recruitment
 The following are the types of illegal
recruitment of local workers and the
elements for each type:
1. By a licensee/holder of authority
a. Offender has a valid license or
authority required by law to enable one
to lawfully engage in the recruitment
and placement of workers;
1. Offender undertakes any of the
prohibited acts under Art. 34
(Canvassing, Enlisting, Contracting,
Transporting, Utilizing Hiring, or
Procuring workers)
2. By a non-licensee/non-holder of
authority
 Offender has no valid license or
authority required by law to enable one
to lawfully engage in the recruitment
and placement of workers;
Offender undertakes either:
a. Any activity within the meaning of
recruitment and placement under Art.
13(b)
b. Any of the prohibited practices under
Art. 34. (Art. 34 and 38, LC)
 Contract Substitution = Illegal
Recruitment The reduced salaries and
employment period in the new
employment contract contradicted the
POEA-approved employment contract.
By this act of contract substitution,
respondents committed a prohibited
practice; consequently, engaged in
illegal recruitment. (PERT/CPM
Manpower Exponent Co. v. Vinuya,
2012)
Illegal Recruitment as Economic Sabotage
Two Types according to Qualifying
of
Circumstance:
or Illegal recruitment is considered economic
sabotage when attended by the ff. qualifying
circumstances:
1. By a syndicate - carried out by a group
of 3 or more persons conspiring and
confederating with one another;
2. In large scale - committed against 3 or
more persons individually or as a
group.
Note re: In Large Scale –
 3+ complainants must be in a single
case “Committed against 3 or
more persons individually or as a
group” must be understood as referring
to the number of complainants in each
case; otherwise, prosecutions for single
crimes of illegal recruitment can be
cumulated to make it in large scale.
(People v. Reyes, 1995)
Conviction for Illegal Recruitment NOT a Bar to
Conviction for Estafa and Vice versa
 A person who commits illegal
recruitment may be charged and
convicted separately of illegal
recruitment under the LC and estafa
under Art. 315(2a), RPC. The offense
of illegal recruitment is malum
prohibitum while estafa is a mala in se
crime. They also have different
elements. Thus, a conviction for both
estafa and illegal recruitment may
result even if they were committed by
one act. It is settled that one act may
give rise to many crimes as long as the
crimes are of different elements. Thus,
a conviction of both crimes will not
result to the prohibited double
jeopardy (People v. Ochoca, 2011).
76
LIABILITY OF LOCAL RECRUITMENT Prescription
AGENCY AND FOREIGN EMPLOYER
Crime Classification Prescriptive
Period
Local Simple/economic 3 years [Art.
workers sabotage 305 LC]
ACT PENALTY
License or authority 2-5 years Migrant Simple 5 years [Sec.
holder violating or imprisonment or workers 12, RA 8042]
causing another to 10K-50K fine, or
Economic 20 years
violate Title 1, Book both
Sabotage [Sec. 12, RA
1
8042]
Non- License or 4-8 years
authority holder imprisonment, or
violating or causing 20K- 100K fine, or
another to violate both VIII. REMEDIES (LABOR STANDARDS
Title 1, Book 1 VIOLATIONS)
Illegal Recruitment Life imprisonment
constituting and 100K fine Visitorial and enforcement powers of the
Economic Sabotage Secretary of Labor and Employment

 Visitorial and Enforcement Power - The

If the offender is a corporation, partnership, Secretary of Labor and Employment
association or entity, the penalty shall be (SOLE) or his duly authorized
imposed upon the officer or officers responsible representatives, including labor
for the violation. regulation officers, shall:

In every case, conviction carries with it:
1. Automatic revocation of
license/authority and all permits and
privileges granted under this Title
2. Forfeiture of cash and surety bonds in
favor of POEA or the Regional
Department with jurisdiction over the
place where the agency or branch
office is located
3. For aliens, in addition to the penalties
herein prescribed, deportation without
further proceedings. [Art. 39 (3), LC]
Jurisdiction of Illegal Recruitment Cases:
A criminal action arising from illegal
recruitment of migrant workers shall be filed
with the RTC of the province or city:
1. Where offense was committed, or
2. Where the offended party actually
resides at the time of the commission
of the offense. [Sec. 9, RA 8042]
 Provided, the court where such action
is first filed acquires jurisdiction to the
exclusion of other courts. [Sec. 6, Rule
IV, Omnibus Rules implementing RA
8042, as amended]
1. Have access to employer’s records and
premises at any time of the day or
night whenever work is being
undertaken therein.
The SOLE or his representatives also have the
right:
a. To copy therefrom,
b. To question any EE and
c. To investigate any fact, condition or
matter which may be necessary to
determine violations or which may aid
in the enforcement of this Code and of
any labor law, wage order or rules and
regulations issued pursuant thereto.
2. The SOLE/ rep also has the power to
issue compliance orders
 Purpose: to give effect to the labor
standards provisions of this Code and
other labor legislation based on the
findings of labor employment and
enforcement officers or industrial
safety engineers made in the course of
inspection.
 Notwithstanding the provisions of this
Code to the contrary, and in cases

77
 where the relationship of ER-EE still
exists
3. The SOLE/ rep can also issue writs of
execution to the appropriate authority
for the enforcement of their orders
 XPN: cases where the ER contests the
findings of the labor employment and
enforcement officer and raises issues
supported by documentary proofs
which were not considered in the
course of inspection.
 Visitorial Power. – The SOLE or his duly
authorized representatives may, at any
time –
1. Inspect the premises, books of
accounts and records of any person or
entity covered by this Title
2. Require it to submit reports regularly
on prescribed forms, and
3. Act on violation of any provisions of
this Title.
Visitorial Powers of SOLE or Rep:
The SOLE or his duly authorized representative
is hereby empowered:
1. To inquire into the financial activities of
legitimate labor organizations
 Upon the filing of a complaint under
oath and duly supported by the written
consent of at least twenty percent
(20%) of the total membership of the
labor organization concerned
2. To examine their books of accounts
and other records to determine
compliance or non-compliance with the
law
3. To prosecute any violations of the law
and the union constitution and by-laws.
Anti-Injunction
 Atty. JMM: It shall be UNLAWFUL for
any person or any entity to obstruct,
impede, delay or otherwise render
ineffective the orders of the SOLE or
his duly authorized representative
issued pursuant to the authority
granted under this Article, and no
inferior court or entity shall issue
temporary or permanent injunction or
restraining order or otherwise to
assume jurisdiction over any case
78
involving the enforcement orders
issued in accordance with this Article
(Spectra 2018).
 The visitorial and enforcement powers
of the DOLE Regional Director to order
and enforce compliance with labor
standard laws can be exercised even
where the individual claim exceeds
P5,000.00 (Spectra 2018).
Power to suspend effects of termination
 Art. 292 (b). Visitorial and Enforcement
Power - The SOLE may suspend the
effects of a termination pending
resolution of the dispute in the event of
a prima facie finding by the appropriate
official of the DOLE that:
a. The termination may cause a serious
labor dispute (may or may not be a
strike or a lockout)
b. The termination is in implementation of
a mass lay-off.
Remedies
 The aggrieved party from a decision of
the SOLE may file one motion for
reconsideration within 10 days from
receipt thereof.
 If the motion for reconsideration is
denied, the party may appeal via Rule
65 to the CA 60 days from receipt of
the denial. Upon denial, the party may
proceed via Rule 45 to the SC. (Rule
65, ROC; St. Martin Funeral Home v.
NLRC, 1998)
 Filing of MR before going to CA or SC is
MANDATORY AND
JURISDICTIONAL.
VOLUNTARY ARBITRATOR
 Voluntary Arbitration – Referred to as a
contractual proceeding whereby the
parties to any dispute, in order to
obtain a speedy and inexpensive final
disposition of the matter, select a
judge of their own choice and by
consent, submit their controversy to
him for determination (Spectra 2018).
 It is the policy of the State to
encourage voluntary arbitration to
settle labor-management disputes.
  Before the conduct of compulsory 4. All other labor disputes including ULP
arbitration, the parties may opt to and bargaining deadlock, if the parties
submit their dispute to voluntary agree
arbitration. 5. Wage distortions arising from
 The “judge” in voluntary arbitration is application of any wage orders in
named by the parties pursuant to an organized establishments
arbitration clause in their CBA. 6. Unresolved grievances arising from the
 The “judge” in Voluntary Arbitration interpretation and implementation of
cases is called a VOLUNTARY the productivity incentives program
ARBITRATOR (VA) (Spectra 2018). under RA 6971.

Automatic Referral If Grievance Machinery Fails Remedies

 All grievances submitted to the Motion for Reconsideration

grievance machinery which are not
settled within 7 calendar days from the  An MR may be filed by the parties
date of its submission shall within 10 days from the receipt of the
automatically be referred to voluntary decision of the VA.
arbitration prescribed in the CBA. Appeal
Who is a voluntary arbitrator: A “voluntary  The decision of a VA is appealable by
arbitrator” is: ordinary appeal under Rule 43 of the
 Any person accredited by the NCMB as Rules of Civil Procedure directly to the
such; or CA (Appeal from decisions of Quasi-
 Any person named or designated in the Judicial Bodies to CA).
CBA by the parties to act as their VA; LABOR ARBITER
or
 One chosen, with or without the The Labor Arbiter (LA) has Jurisdiction over the
assistance of the NCMB, pursuant to a following cases:
selection procedure agreed upon in the
CBA; or 1. Termination Disputes
 Any official that may be authorized by 2. Unfair Labor Practices
the SOLE to act as VA upon the written 3. If accompanied with a claim of
request and agreement of the parties reinstatement, those cases that
to a labor dispute. workers may file involving wages, rates
of pay, hours of work, and other terms
Jurisdiction and conditions of employment
4. Claims for damages involving ER-EE
Exclusive and Original Jurisdiction over relations
Unresolved Grievances 5. Questions on the legality of strikes or
1. Interpretation or implementation of the lockouts
CBA 6. All other claims arising from ER-EE
2. Interpretation or enforcement of relations including those persons in
company personnel policies domestic and household service,
3. Violations of a CBA which are not gross involving an amount greater than
in character. (Gross being flagrant P5,000.00 regardless of whether
and/or malicious refusal to comply with accompanied by a claim for
the economic provisions of the CBA.) reinstatement.
 Note: If gross violation of CBA,
 The National Labor Relations
amounts to Unfair Labor Practice, and
thus a strikable issue. In cases of Commission (NLRC) has exclusive
these, follow the procedures for a valid appellate jurisdiction over cases
strike. decided by LAs.

Other matters falling within the JD of LAs:

79
 1. Disputes involving legislated wage
increases and wage distortion in
unorganized establishments.
2. Contested cases under the exception
clause of Article 128, LC.
3. Enforcement of compromise
agreements when there is non-
compliance by the parties
4. Issuance of writs of execution to
enforce decisions of Voluntary
Arbitrators.
5. Money claims of OFWs arising from ER-
EE relations, including death and
disability claims, as well as damages. TAXATION LAW (3 QUESTIONS)
PRESCRIPTION OF ACTIONS

Money claims

 All money claims arising from I. BASIC PRINCIPLES OF TAXATION IN

employer-employee relations accruing
during the effectivity of this Code shall
be filed WITHIN 3 YEARS FROM THE
TIME THE CAUSE OF ACTION
ACCRUED; otherwise, they shall be
forever barred.
Illegal dismissal
 In illegal dismissal cases, the EE
concerned is given a period of FOUR
YEARS from the time of his dismissal
within which to institute a complaint.
This is based on Art. 1146 of the Civil
Code which states that actions based
upon an injury to the rights of the
plaintiff must be brought within four
years. (Victory Liner, Inc. v. Race,
2007)
-END OF TOPIC-
THE CONSTITUTION
 Taxation- Inherent power of the State
to impose burdens on its subjects
within its jurisdiction for the purpose of
raising revenues to carry out the
legitimate objects of the government
subject to inherent and constitutional
limitations.
 Taxation is inherent, meaning there
does not need to be any law that
confers on the State the power to tax
its citizens.
 Justice Dimaampao: Taxation is
inherent because it is a necessary
attribute of sovereignty. Without taxes,
no sovereign state can exist or endure.
 Taxation is the power to destroy
 Courts may review tax laws passed by
Legislature
 Power to tax, attribute of sovereignty=
only thru the national govt, not the
LGU.
 Purpose is to raise revenue
 LGUs have fiscal autonomy.
 Lifeblood Doctrine- Taxes are the
lifeblood of the State; no State can
exist without means to pay its
expenses.
 Taxes can be imposed even without the
Constitution.
 Scope of the objects of tax is unlimited
 There can be no injunction in the
collection of taxes.

80
  XPN: Equitable Recoupment (Not  Regulation, Promotion of Social
applicable in PH) Welfare, Reduction of Social Inequality,
 Taxes cannot be subject of Encourage Economic Growth-
compensation. Secondary Purposes.
 Taxes are legislative in character. Only  Collection of taxes cannot be stopped
Congress can exercise. by injunction.
 XPN: CTA or SC stops it because it may
Aspects of Taxation: jeopardize the government.
1. Purpose  Taxation can be used as an implement
2. Subjects/Objects of police power or eminent domain.
3. Amount and Rate of Tax  Look at the purpose: If purpose is
4. Manner of enforcement regulation= police power
5. Situs  If purpose is revenue raising=
6. Apportionment taxation.
7. Grant of tax exemption Scope of Taxation (CUPS)
8. Kind of tax to be collected
9. Provision for admin and judicial 1. Comprehensive
remedies 2. Unlimited
3. Plenary
4. Superior
 Lifeblood Doctrine- Taxes are the Aspects of Taxation
lifeblood of the govt and should be
collected without any unnecessary A. Levy or imposition- Taxation is a
hindrance. legislative function
 What is important here is the TAX. B. Enforcement or Administration-
 Necessity Theory- Governmental Administrative/ Executive Function
existence is a necessity and (Assessment, Collection or Refund)
performance of governmental functions
redound to the people’s benefit. Government Agencies Charged with Collection
 What is important here is the of Taxes:
GOVERNMENT. 1. Bureau of Internal Revenue (BIR)
 Justice Dimaampao (on necessity 2. Bureau of Customs (BOC)
theory): Taxes are necessary to 3. City/Municipal Assessors or Treasurers.
maintain a State’s sovereignty.
 Symbiotic Relationship- Citizens must Basic Principles of a Sound Tax System:
pay their taxes; govt must protect and
support its citizens. 1. Fiscal Adequacy- sufficiency of
 Benefits received principle – The revenues vis-à-vis subjects of the
Taxpayer (TP) receives benefits from government.
taxes through the protection the State 2. Administrative feasibility- Refers to the
affords to him or her. From the ease of collecting taxes and that tax
protection he or she get arises his or laws are enforced uniformly.
her obligation to support the 3. Theoretical Justice- Taxes to be
government through payment of taxes imposed must be based on the
(CIR v. Algue, 1988). individual’s capacity to pay (Most
 The 4 Rs of taxation: important part)
1. Revenue 4. Economic Efficiency- Cost of collecting
2. Repricing taxes should not be higher than the
3. Redistribution benefits derived from it.
4. Representation
 Justice Dimaampao: If the tax system
Purposes of Taxation does not follow the principles of fiscal
adequacy or administrative feasibility, it
 Revenue Raising- Primary Purpose will not make the tax invalid. But if a

81
 tax does not adhere to theoretical
justice, it will make the tax
unconstitutional for violating Article VI,
Sec.28 par. 1 of the 1987 Constitution
where it states that the rule of taxation
shall be uniform and equitable. The
Congress shall evolve a progressive
system of taxation.
TAXES
 Taxes are enforced contributions
 Generally payable in money
 XPNS: Tax credit certificates or tax
liens
 Proportionate in character
 Levied on persons, property or on an
exercise of a privilege.
 Taxpayer (TP)- person(s) liable of
paying taxes.
 Taxes are levied by the State having
jurisdiction
 They are levied by the legislature
 Taxes are for public purposes.
Justice Dimaampao: Mnemonic on Lifeblood
Doctrine is WERPA
 Waiver of Statute of Limitations,
upheld. (CIR v. Next Mobile, 776 SCRA
443)
 Exemption is DISFAVORED (Davao Gulf
Lumber v. CIR, 293 SCRA 77)
 Refunds are strictly construed (CIR v.
San Roque, 690 SCRA 336)
 Payment under Protest, NO
INJUNCTION (Camp John Hay v. CBAA,
706 SCRA 547)
 Approval of Probate Court not a
requirement (Marcos v. CIR, 273 SCRA
47)
 Justice Dimaampao: Estoppel does not
apply against the State in the collection
of taxes. The government is not bound
by the errors, mistakes, and the
negligence committed by its agents
(CIR v. City Trust, 1994).
INHERENT AND CONSTITUTIONAL
LIMITATIONS IN TAXATION
Inherent Limitations (PENIT)
1. Public Purpose
2. Exemption of the government
3. Non-delegation of power to tax
4. International Comity
82
5. Territorial Jurisdiction
 Public Purpose- devoted for purposes
of government.
 Public purpose is an elastic concept
that is hammered to fit modern
standards. (Planters Products v.
Fertiphil Corp., 2008).
 Determining Factor- WON the statute is
designed to promote the public
interest, as opposed to the furtherance
of the advantage of individuals.
 It is the essential character of the
direct object of the expenditure which
must determine its validity as justifying
a tax, not the magnitude of interests to
be affected (Pascual v. Secretary of
Public Works, 1960)
Non-Delegation of Power to Tax
 GR: Power to tax cannot be delegated.
 XPN: Delegation to:
1. LGUs (pursuant to Constitution and
LGC)
2. President (fix tariff rates, import and
export quotas, tonnage and wharfage
dues, other duties and imports)
3. Admin Agencies (Sufficient Standard
and Completeness Tests) (Gerochi v.
Secretary of Energy, 2007)
Exemption of the Government from
Taxation
 The government is exempt from
taxation.
 Atty. Aranas: The government is
exempt from taxation because it would
be like taking money out of one
pocket, and putting it in another.
 But government can be taxed if it is
exercising proprietary functions.
 XPN: If given exemption
International Comity
 Other States cannot be taxed.
 Based on sovereign equality of states
Territorial Jurisdiction
 People can only be taxed within a
country’s territorial jurisdiction.
 But take note that the imposition of
taxes is based on the privity of
relationships.
  Fundamental basis of the power to tax
is the capacity of the government to
provide benefits and protection to the
object of the tax.
 A person may be taxed where there is
between him and the taxing state, a
privity of relationship justifying the
levy.
Constitutional Limitations
DIRECT CONSTITUTIONAL LIMITATIONS:
1. All tax bills must originate in the House
of Representatives, although the
Senate may propose or concur
amendments (Art. VI, Sec. 24, 1987
Constitution)
 The Constitution only mandates
that the bill ORIGINATE in the
House of Representatives. It did
not say that the bill that would be
presented to the President should
be the exact same one as passed
by the House. That would violate
the power of the Senate to concur
or propose amendments to the law.
The Constitution merely mandates
that the INITIATIVE come from the
House of Representatives.
(Tolentino v. Secretary of Finance,
1995).
2. Majority of both houses needed to
approve a tax exemption law
 Refers to the majority of the
houses voting SEPARATELY.
3. All lands Actually, Directly, Exclusively
(ADE) used for religious, charitable or
educational purposes are exempt from
real property taxation.
 Note: Exemption is based on the
USE, not the ownership of the
property.
 Exemption also covers incidental
use that is reasonably necessary as
long as ADE use is still for
religious, charitable or educational
purposes. (Abra Valley College v.
Aquino, 1988).
 The operations of the Medical Arts
Building of a hospital is incidental
and reasonably necessary for the
operations of said hospital (City
Assessor of Cebu v. Association
Benevola de Cebu, 1998)
83
 For educational entities, it does not
matter what the source of income
is, as long as it is used for
educational purposes, it is
exempted from taxation (all
encompassing, not just property
taxation), but such income must be
USED for educational purposes to
be exempted (CIR v. DLSU, 2016)
 The tax exemption for educational
institutions only apply to non-
stock, non-profit educational
institutions.
 Proprietary educational institutions
are not exempted, but are given a
preferential tax rate (10%).
 Predominance Test- If proprietary
institutions’ income from unrelated
activities exceeds 50%, they are
subject to corporate income tax
(30%). But if it does not exceed
50%, they can avail of preferential
rate (10%).
4. Uniform, equitable and progressive
taxation.
Non-Imprisonment for Non-Payment of
Poll Tax
 No person can be imprisoned for non-
payment of poll tax (Art. III, Sec. 20,
1987 Constitution)
 But if a person under declares his/her
income to evade the payment of taxes,
such can be imprisoned for falsification.
Non-Impairment of Jurisdiction of the
Supreme Court
 Basis: Article VIII, Section 2, Sec. 5
(2), and Article VI, Sec. 30, 1987
Constitution.
 Congress in its lawmaking powers,
cannot deprive or impair the
jurisdiction of the Supreme Court. Nor
can it add to the appellate jurisdiction
of the Supreme Court without its
advice and concurrence.
Prohibition of the Use of Special Funds
 All money collected on any tax levied
for a special purpose shall be treated
as a special fund and paid out for such
purpose only. If the purpose for which
a special fund was created has been
 fulfilled or abandoned, the balance, if
any, shall be transferred to the general
funds of the Government (Article VI,
Sec. 29 (3), 1987 Constitution)
President’s Power of Partial Veto
 GR: There is no power of partial veto.
The President must approve or veto a
bill in its entirety.
 XPN: Appropriation, revenue, and tariff
bills.
INDIRECT CONSTITUTIONAL
LIMITATIONS:
Due Process and Equal Protection
1. Due Process
 No person shall be deprived of life,
liberty, or property without due
process of law, nor shall any person be
denied the equal protection of the laws
(Art. III, Sec. 1, 1987 Constitution)
 2 kinds of Due Process: Substantive
and Procedural
 Substantive: Valid Authority under the
law
 Procedural: Reasonableness of the
means used
CREBA v. Romulo (G.R. No. 160756, March 9,
2010)
 CREBA assails the imposition of the
minimum corporate income tax (MCIT)
as being violative of the due process
clause as it levies income tax even if
there is no realized gain
 Are the impositions of the MCIT on
domestic corporations and CWT on
income from sales of real properties
classified as ordinary assets
unconstitutional?
 NO. MCIT does not tax capital but only
taxes income as shown by the fact that
the MCIT is arrived at by deducting the
capital spent by a corporation in the
sale of its goods, i.e., the cost of goods
and other direct expenses from gross
sales. Besides, there are sufficient
safeguards that exist for the MCIT: (1)
it is only imposed on the 4th year of
operations; (2) the law allows the carry
forward of any excess MCIT paid over
the normal income tax; and (3) the
Secretary of Finance can suspend the
84
imposition of MCIT in justifiable
instances.
2. Equal Protection
Requisites for Valid Classification:
(1) must rest on substantial distinctions;
(2) must be germane to the purposes of the
law;
(3) must not be limited to existing conditions
only; and
(4) must apply equally to all members of the
same class.
Test to Determine Valid Classification:
1. Compelling Interest Test- Focuses more on the
presence of compelling governmental interest
rather than substantial restrictions.
2. Rational Basis Test- The classification is valid if
it is rationally related to a constitutionally
permissible state interest.
Non-Impairment of Obligations of
Contracts
 No law impairing the obligation of
contracts shall be passed (Art. III, Sec.
10, 1987 Constitution)
 When is there impairment of
obligations of contracts? - When its
terms or conditions are changed by law
or a party without the consent of the
other.
 The general rule is that tax exemptions
can be withdrawn by government at
any time.
 The exception is when the exemption
pertains to the nature of a contract,
the government cannot just withdraw
the exemption without violating the
constitutional right to non-impairment
of contracts.
Non-Infringement of Religious Freedom
 No law shall be made respecting an
establishment of religion, or prohibiting
the free exercise thereof. The free
exercise and enjoyment of religious
profession and worship, without
discrimination or preference, shall
forever be allowed. No religious test
shall be required for the exercise of
 civil or political rights (Art. III, Sec. 5,
1987 Constitution)
 The imposition of license fees on
entities distributing Bibles by the City
of Manila was deemed to be
unconstitutional because it suppressed
the religious freedom of petitioners.
But the requirement of a mayor’s
permit was upheld, pursuant to the
police power of the State (American
Bible Society v. City of Manila, 1957)
No Appropriation for Religious Purposes
 No public money or property shall be
appropriated, applied, paid, or
employed, directly or indirectly, for the
use, benefit, or support of any sect,
church, denomination, sectarian
institution, or system of religion, or of
any priest, preacher, minister, or other
religious teacher, or dignitary as such,
except when such priest, preacher,
minister, or dignitary is assigned to the
armed forces, or to any penal
institution, or government orphanage
or leprosarium. (Art. III, Sec. 29 (2),
1987 Constitution)
 This provision prohibits the
appropriation of public funds for
religious purposes.
 Exceptions are when a religious
minister is assigned to the armed
forces, or to any penal institution, or to
any government leprosarium or
orphanage.
 Public funds can be used to answer for
expenses for a Papal visit as the Pope
is a head of State, thus any
government appropriation for the visit
of the Pope is justified.
II. INCOME TAX
 Income Tax- a tax on all yearly profits
arising from property, professions,
trades or offices or as a tax on a
person’s income, enoulments, profits
and the like.
 It is a direct tax on actual or
presumed income, gross or net, of the
TP during the taxable year.
 Actual- something actually received
 Presumptive- nothing physically
received but the law presupposes that
it could be received.
85
 Gross- no deduction allowed
 Net- deductions are allowed.
 Accrued Income-something recognized
as income, but has not yet been
received, and such income is by virtue
of a perfected contract.
 Realized Income- Income from an
actual transaction.
 Excise tax- Privilege tax on the right
to earn income by an individual or
entity
 Self-Assessment- The TP himself
determines how much tax he owes
based on his own computation. The
BIR just confirms if such computation
is true.
 Purpose of Income Tax- to generate
revenues for the government.
 Income tax is also there to offset the
effects of sales and consumption taxes
which are seen to be regressive.
 Another purpose is to mitigate the
effects of the inequitable distribution
of wealth between different income
earners.
Financial Statements (FS)
 Balance Sheet- talks about assets and
liabilities of the TP, reports the financial
position of the company.
 Income Statement- tells how much the
company has performed; reports the
financial performance of the company.
 Statement of changes in the retained
earnings (corporation) changes in
capital (individual)- tells how much of
the capital was used up or maintained.
Income
Broad Sense:
 All wealth that flows from the TP other
than mere return on capital.
 It is the excess of your ROI.
Strict Sense:
 Gain derived from capital, from labor,
or from both.
 Includes profits gained through a sale
or conversion of assets.
 The amount of money coming into a
person or corporation within a specified
time.
 These are also payments for services,
interests, or profits from investments.
 This excludes capital returned to the
TP.
Capital
  What the TP has at the moment. Corporate Taxation
 Atty. Amago: Capital is the tree;  Follows the global tax system
income is the fruits.  Uses net income approach because it is
 Capital is dynamic because it changes allowed deductions
from time to time. It’s possible that  Also follows the pay-as-you-file
you can have more or less, depending system.
on the activity you engage in.
Sources of Income:
General Principles in Income Taxation (Section
23, NIRC)
1. Capital-Ex. Stocks (Stocks are
 ONLY RESIDENT CITIZEN (RC) is purchased and when dividends are
taxable for income within and without declared, then you will get income from
the Philippines the stocks you purchased)
 All others (NRC, RA, NRA) taxable only
for income earned WITHIN the PH. 2. Labor-Income in the form of salary,
 Domestic Corporation (DC)- Taxable compensation, benefits, etc. Income
for income within and without PH. arising from an employer-employee
 Foreign Corporation (FC)- Taxable for relationship.
income within PH.
3. Both Capital and Labor- Such as that in
Systems of Taxation: business. The capital that is set up to
start up the business earns income,
 Schedular- Income classified differently and the compensation of the
and subjected to different tax rates. employees are also counted.
 Global- All income is grouped
regardless of classification and subject 4. Dealings in Property- Such as a house
them to one tax rate. Only one return and lot which are sold. The return
is filed. given by the buyer is deemed to be a
 Semi Schedular and Semi Global- A capital gain. In which case you have to
mix of both systems earn income out of your sale from
 Progressive- more income, more tax. property.
 The Philippines follows the Semi-
Schedular and Semi-Global. Schedular
for individual income tax, global for Criteria for Income to be Taxable:
corporate income tax.
 There is gain or profit
Income Tax Base Used in PH:  Such profit is received or realized
(whether actual or constructive)
 Gross Income- Income (AKA  Such profit is not exempted by any law
compensation, wage, etc.) or treaty
 Net Income- Gross Income- Deductions
 PH uses the net income more. Ordinary Assets- there is an enumeration
Deductions are allowed. provided by the NIRC. (SOUR)

1. Stocks in Trade included in inventory

Features of PH Income Taxation at the end of the taxable year- literally
anything you can stock together for the
Comprehensive Tax Situs purpose of selling it.
 PH follows American Tax System 2. Property primary held for sale to
customers in the Ordinary course of
Individual Taxation trade or business e.g., inventory of real
 We follow a schedular system estate, parcels of land you are selling,
 Our Taxation is progressive in condominium units, house and lot.
character. 3. Property Used in trade or business
 PH follows the pay-as-you-file system- subject to depreciation- e.g., house
payment is done simultaneously with and lot subject to depreciation
4. Real property used in trade in
the filing of the tax return.
business.

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  Capital Assets- anything not  If 50-85%, partly within, partly
enumerated by the NIRC as an without.
ordinary asset is considered a capital  ≤50%, income without
asset.  >85%, income within.
TAXABLE INCOME
8. Annuities- place where contract was
 The term ‘taxable income’ means the made
pertinent items of gross income 9. Prizes and Winnings- Where services
specified in this Code, less the are rendered OR where the same is
deductions, if any, authorized for such given
types of income by this Code or other 10. Pension- place where pension is given
special laws. (Sec. 31, NIRC) 11. Partner’s Distributive Share- place
 Gross Income- means all income where profession is practiced.
derived from whatever source.
(Enumeration in Section 32, NIRC is Allowable Deductions
not exclusive)
 Mnemonic: CG2IR2DAP3  Appliable Provision: Sec. 34, NIRC

What gross income includes (CG2IR2DAP3): Enumeration of Allowable Deductions

1. Compensation (ExInTaLoBaChaRePenDepDep)
2. Gross Income
3. Gains from Property 1. Expenses
4. Interests 2. Interests
5. Rents 3. Taxes
6. Royalties 4. Losses
7. Dividends 5. Bad Debts
8. Annuities 6. Charitable Contributions
9. Prizes and Winnings 7. Research and Development
10. Pensions 8. Pensions
11. Partner’s Distributive Share 9. Depreciation
10. Depletion
Exclusions from Gross Income (LAGCRIM):
1. Life Insurance Exemption vs. Deduction
2. Amount Received by Insured
3. Gifts, Bequeaths and Benefits  Exemption- you pay nothing, income
4. Compensation from Injuries not subject to tax.
5. Retirement Benefits  Deduction- expenses allowed to lessen
6. Income Exempt Under Treaty the income.
7. Miscellaneous Items  Deduction allowed if:
Situs of Income 1. Provided by law
2. All conditions for deductibility
1. Compensation- where the services are satisfied
rendered 3. Strict construction vs. TP
2. Business- place of business 4. Withholding tax must have been
3. Property: Personal- place of sale; Real- imposed.
where property is located
4. Interest- Residence of BORROWER Kinds of Deduction:
5. Rent- where property being rented is 1. Itemized
located  ExInTaLoBaChaRePenDepDep
6. Royalties- place where intangible is
used
Optional Standard Deduction (OSD)- Deduct
7. Dividends:
maximum of 40% from gross income (no need
a. Domestic: Income purely from PH
itemized deduction)
b. Foreign: Must be in PH for at least
3 years. Non-Deductible Items:
 Income of FC purely within PH is >85% 1. Personal Living/ Family Expense
 Income purely w/o PH <50% 2. Amount paid for new buildings or
 Equal to 50% or 85%, there should be permanent improvements or
allocation betterment to increase the value of any

87
 property or estate for the business- not
deductible in the year it is incurred
(Not really that it’s not allowed as a
deduction, only that you cannot deduct
outright. You need to spread out the
deduction)
XPN: Proprietary Educational
Institution- given option to deduct one
time for the value of the building
3. Amount spent in restoring property or
in making good the exhaustion thereof
for which an allowance is made.
4. Premiums paid on life insurance policy
covering the life of any officer or
employee.
5. Losses from sales or exchanges of
property
a. Between members of a family
b. Direct shareholder with more than
a 50% equity interest and his
corporation
c. Between corporations owned by
the same individual.
d. Between grantor and fiduciary
e. Between trusts if grantor is the
same
f. Between fiduciary of a trust and
beneficiary of such trust
g. Based on undue influence
h. Related party transactions,
construed strictly vs. TP.
Additional Principles
Taxable Income
a. Accrual Method- Revenue not received
as of yet, but already recognized as
income.
b. Cash- Income based on flow of cash
c. Construction in Progress- Based on
progress of the activity
d. Installments- paid slowly in parts.
Initial Payment should not be more
than 25%.
e. Classification as passive income vs.
active income
Tests in Determining Receipt of Income:
1. Realization Principle- Income has to be
realized to be taxable
2. Economic Benefit Principle- Income
may only be included in the receipt of
an item if it confers an economic
benefit regardless if there are some
benefits derived from it.
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3. Recovery of Capital Doctrine- The cost
has to be accounted for and not just
the proceeds of the sale.
4. Income “Adjusted Basis”- Account for
cost-accumulated depreciation
SPECIFIC ITEMS OF GROSS INCOME
(CG2IR2DAP3)
1. COMPENSATION
 All income derived from services arising
from employer-employee relationship
 Includes all renumeration for services
rendered by EE to ER.
 Cash Equivalent: All items considered
income which is not cash has to be
valued in cash for tax purposes.
 Convenience of Employer Rule- Do not
account compensation income as taxable
when they are furnished as a necessary
incident for the proper performance of
EE’s duties.
 Tips- generally taxable
 Pensions- may not be subject to tax
 Vacation or sick leave- taxable
 Backwages and labor benefits- taxable
 Meals, Board and Lodging- Taxable
 PNP and AFP- tax exempt (for clothes,
quarters, hazard pay)
 Compensation may be in cash or in kind.
2. BUSINESS INCOME (GROSS
INCOME)
 Income derived from the conduct of any
business or profession
3. GAINS FROM DEALINGS IN
PROPERTY
 These are ORDINARY ASSETS.
 If it is a capital asset, the tax rate is 6%.
It is not based on the gain but on the
“presumed gain” or the gross selling
price, the fair market value determined
by the assessor or determined by the
BIR, whichever is higher.
4. INTEREST INCOME
 The compensation for the use of
money or the forbearance thereof
 Foreign Currency Account:
a. PH Resident: 15%
b. Non-Resident: Exempted
 Basis is RESIDENCE, not citizenship.
 If foreigner lives in PH and has a dollar
account, interest income is taxable at
15%.
  Filipino in US has a dollar account, or property dividends looking at the
exempted, not taxable in PH. circumstances.

Compounded Interest 8. ANNUITIES

 Interest on Interest is still taxable  Periodic Payment of Income
 Bank subject to final tax of 20% out of investments not borne
 FCDU Account: 15% out of ER-EE relationship.
 Part of computation of taxable
5. RENT INCOME income
 5% Creditable Withholding Tax
 Leasehold Improvement- lessee built 9. PRIZES AND WINNINGS
permanent structures on lessor’s land.  Prizes- Income derived out of talent or
Such improvements become the skills
lessor’s once the lease expires.  Winnings- Income derived from luck
 The value of the leasehold  Prizes: If 10K or less= 0-35%; > 10K-
improvement should be reported as 20% final tax
income of lessor using outright or  Winnings: 20% final tax regardless of
spread-out method. amount
XPN:
 Outright- Income recognized one time a. Less than 10K= exempt
all together. b. ≥ 10K= 20% final tax
 Spread-Out- income recognition spread
out over remaining term of lease. 10. PENSIONS
 If lessee pays lessor’s taxes-  Periodic payment of income
recognized as income on the part of arising from ER-EE when EE
lessor. has retired.
 If lease is pre-terminated before  Normally exempted
expiration of lease contract:  XPN: Private pension plan may
Considered as additional income on the be taxable
part of lessor.
Requisites for Private Pension Plan to be Tax
6. ROYALTIES Exempt:
 Compensation for use of 1. Reasonable private pension benefit
intellectual Properties plan
2. Approved by the BIR
7. DIVIDENDS 3. EE is at least 50 years old
 Distribution of income of a stock 4. Minimum of 10 years of service
corporation 5. Benefit can be availed of only once.
Kinds of Dividends:
1. Cash 11. PARTNER’S DISTRIBUTIVE SHARE
2. Stock IN GENERAL PROFESSIONAL
3. Property PARTNERSHIP
 If what is distributed are own
shares: Stock Dividends  If trade partnership: Not an
 Shares of another corp: Property exercise of profession= it
dividends becomes dividends subject to
 If corp declares treasury shares: final tax (10%, 20%, 25%)
Property Dividends.  Trade partnership also subject
 Distribution of shares from one to 30% corporate income tax
corp to another: Exempted  General Professional
 Stock Dividends: Tax Exempt Partnership- pursuant to the
exercise of a profession
When Stock Dividends are Taxable:  Distribution of income subject
1. Substantial change in shareholdings of to the Tax Table (0-35%)
a corporation
2. Change in structure of shareholdings EXCLUSIONS FROM GROSS INCOME
3. Stock dividend is deemed cancelled
when it amounts to distribution of cash  Applicable Provision: Sec. 32 (B), NIRC
 Mnemonic: LAGCRIM

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 Retirement Plans Covered under this
1. Life Insurance Provision:
2. Amount received as return on Premium a. Reasonable Private Benefit Plan
3. Gifts, Bequeaths, Devises b. New Retirement Law
4. Compensation received from Injuries c. CBA Retirement Plan
5. Retirement Benefits
6. Income Exempt from Treaty Requisites:
7. Miscellaneous Items
a. Retiree at least 50 years old
1. LIFE INSURANCE b. ER must have secured a reasonable
 Life Insurance proceeds are not taxable private benefit plan
regardless of beneficiary c. Plan is approved by BIR
d. Minimum of 10 years of service
Requisites: e. Can be availed of only once.

1. Paid to the heirs 7. MISCALLENEOUS ITEMS

2. Paid upon death of the insured
3. Paid in a single sum or in a. Income Derived from Foreign
installments Government
b. Income derived by the government
XPN: or its political subdivisions
a. When used to secure a monetary c. Prizes and Awards given in
obligation recognition of Religious, Charitable,
b. If it is transferred for a valuable Scientific, Educational, Artistic,
consideration Literary, or Civic Achievements
d. Prizes and Awards in Sports
2. AMOUNT RECEIVED BY INSURED Competition
AS RETURN ON PREMIUM e. 13th Month pay and other benefits
f. GSIS, SSS, Medicare and other
 Amounts received by the insured as contributions
return on premiums paid by him under g. Gains from the sale of bonds,
insurance or endowment. debentures or other evidence of
indebtedness
h. Gains from Redemption of Shares
 Endowment- insured outlived the in Mutual Funds
period of insurance and can claim the
proceeds after the lapse of the period. A. INCOME DERIVED FROM
FOREIGN GOVERNMENT
3. GIFTS, BEQUEATHS, DEVISES  Not included and not taxable
 Not included in the computation of pursuant to international
gross income. comity and because of the
 Not taxable because already subject to sovereign equality of states
donor’s or estate tax.
B. INCOME DERIVED BY THE
4. COMPENSATION FROM INJURIES GOVERNMENT OR ITS
OR SICKNESS POLITICAL SUBDIVISIONS
 Not taxable  Govt is not taxable
 Limited to physical injuries  Includes barangay and GOCCs
 Damage to property, taxable performing governmental
functions
5. INCOME EXEMPT UNDER TREATY  If GOCC performs proprietary,
subject to tax.
 Pursuant to international comity
 Income of any kind is not taxable, as C. PRIZES IN RECOGNITION
long as exempt under treaty. OF ACHIEVEMENTS

6. RETIREMENT BENEFIT Requisites:

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 1. Must be related to Religious,  Now taxable under the TRAIN Law
Charitable, Scientific, Educational,
Artistic, Literary, or Civic Achievements H. GAINS FROM REDEMPTION
2. No action on your part to enter the OF SHARES IN MUTUAL
contest FUNDS
3. No future services required  Now taxable under the TRAIN Law

D. PRIZES IN SPORTS
COMPETITIONS
ALLOWABLE DEDUCTIONS
Requisites:
1. Sanctioned by National Sports  Graduated Income Tax Rate: Gross
Association Income- Allowable Deduction= Taxable
2. Recognized by Philippine Olympic Income
Committee  Double Nexus Rule: (1) TP must show
a law granting an exemption; (2) He
E. 13TH MONTH PAY AND must prove entitlement to such
OTHER BENEFITS
deduction.
 Limited to P90,000.00
 Strictly construed against TP
 Excess of 90K, taxable
 No law, no deduction.
De Minimis Benefits  Itemized Deduction:
ExInTaLoBaChaRePenDepDep
1. Monetized Vacation Leave not 1. Expenses
exceeding 10 days 2. Interests
2. Monetized Vacation and Sick leave 3. Taxes
given to govt EEs 4. Losses
3. Medical Allowance not exceeding 1.5K 5. Bad Debts
per person or 250/month 6. Charitable Contributions
4. Rice Subsidy of 2K or 50kg sack of 7. Research and Development
rice/ month 8. Pensions
5. Uniform/Clothing Allowance not
9. Depreciation
exceeding 6K/year
10. Depletion
6. Actual Medical Assistance < 10K/year
7. Laundry Allowance < 300/month
8. EE Achievement Awards < 10K  Optional Standard Deduction (OSD)-
9. Christmas gifts < 5K per EE per year
40% of gross sales/receipts
10. Daily Meal Allowance for OT and
(individual); 40% of gross income
graveyard shift not exceeding 25% of
the minimum wage. (corporation)
 The taxpayer can choose whether to
 In case of excess of the de minimis opt for Itemized Deduction or OSD. But
benefits, add to your 13 th month once the TP chooses one, he can no
pay and other benefits. If exceeds longer opt of the other for the
90,000.00, excess of 90K is remainder of the year.
taxable.  Itemized deduction needs evidence for
the items to be deductible. OSD needs
F. GSIS, SSS, MEDICARE AND no evidence, it can directly be
OTHER CONTRIBUTIONS deducted.
 Deductions are made before Not allowed as Deductions:
deriving at the tax amount.
 Includes union dues 1. Family Living Expenses
 Now taxable under the TRAIN Law  Reason: Not related to your
business, but for the
G. GAINS FROM THE SALE OF sustenance and survival of the
BONDS, DEBENTURES OR family.
OTHER EVIDENCE OF 2. Expenses for new buildings and
INDEBTEDNESS Improvements

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  Reason: The full amount of the Ordinary- normal expenses for
capital expenditure for the new trade, business or profession of
asset cannot be claimed in the TP.
taxable year in which it is paid  Necessary- needed for
but will be spread out over the development of business.
life of the asset.  Must be reasonable.
3. Expenses for Restoring Property  Must be supported by receipts.
 Extraordinary Repairs form part  XPN: Cohan Rule- need not be
of the value of the property. It supported by receipts, as long
can extend its life. as supported by adequate
 Ordinary repairs are deductible records.
under business expenses.  Atty. Amago: Even if there is
 Atty. Amago: It’s not that no proper submission, the fact
numbers 2 and 3 cannot be that you can still show an
deducted, only that you cannot actual incurrence of an
deduct outright. The deduction expense means that it can be
must be spread-out. deducted
4. Premiums paid on any Life Insurance  Subject to withholding:
Policy a. ER withholds part of EE’s
 Not deductible because it is a wages to pay to BIR as
return on capital where the taxes
employer is the beneficiary of b. Also applies to statutory
the policy, directly or indirectly. contributions (SSS,
5. Losses/Exchanges of Property involving PagIbig, PhilHealth, etc.)
related taxpayers c. Required to withhold taxes
a. Between family members on compensation before
b. Direct shareholder with more than compensation can be
50% equity interest deducted.
XPN: Liquidation distribution Advertising Expenses
c. Corporations owned by the same
individual Requisites for Recognition:
d. Grantor and fiduciary of any trust a. Must be on the year actually incurred
e. Between grantors if the grantors b. On the year it is able to generate sales
for such trust are the same for the company.
f. Fiduciary of trust and the  Goodwill- Benefit arising from the
beneficiary of the trust. connection and reputation similar to
General Requisites for Deductibility: the acquisition of capital assets.
1. Incurred during Taxable Year  Advertising Expenses are NOT allowed
2. Incurred in carrying out the business, as a deduction in full if it will create a
trade, or profession of TP goodwill for a product for a line of
3. Supported by receipts/ invoices business for more than one year. (It
4. Not contrary to law must be spread-out among taxable
5. Tax is required to be withheld. years for which the advertising benefits
will accrue.
Rent Expense
1. EXPENSES
 Ordinary and Necessary Requisites:
 Incurred during Taxable Year 1. Leasehold contract acquired for
 Supported by adequate business purposes
evidence 2. Incurred during taxable year
 Subject to withholding 3. Withholding required
 Expense must be legitimate. 4. Lessee must not own the property.

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  Operating Lease- ordinary lease;
deductible as expense.
 Finance Lease- technically a
purchase by installment (rent to
own)
 Finance lease treated as a capital
investment
Entertainment, Amusement, Recreation (EAR)
Expenses
 Only when directly connected with TP’s
business
 This requirement applies to all types of
allowable deductions except for
Charitable Contributions
 Entertainment must not be contrary to
morals
2. INTEREST
Removal of buildings:
Requisites:
a. There must be indebtedness
b. Interest must be in writing
c. It must be legally due
Losses for useful value, deductible only if:
 Tax Arbitrage Scheme: Applies when
there is interest payment and interest
income which is subject to final
withholding tax at the same time.
Shrinkage in Stock Value, When Deductible:
 Interest Claimed as Deduction shall be
reduced by 33% of interest income
earned which has been subjected to
final withholding tax.
Net Operating Loss Carry-Over (NOLCO)
Interest Income that is subject to Final
Withholding Tax:
a. Any currency bank deposit
b. Deposit substitutes
c. Trust funds and similar arrangements
 Arbitrage always reduces the amount
of interest expenses that you may have
if you have interest income subject to
FWT.
3. TAXES
Requisites for Deductibility:
a. Related to trade or business of TP
b. Not contrary to morals, public policy,
etc.
c. Paid during taxable year
Taxes not allowed to be Deducted:
a. PH income tax
b. Estate and Donor’s Tax
c. Stock Transaction Tax
d. Special Assessment on Real Property
e. Income Tax paid to foreign government
claimed as tax credit
f. VAT
 All others not enumerated, deductible.
4. LOSSES
 To be deductible, must not be
compensated by insurance.
 Losses must be evidenced by a
completed transaction.
 Losses from Wash Sales are not
deductible (illegal)
 XPN: Those engaged in the business of
buying and selling shares of stock.
 Wash Sales- A sale wherein there is no
change in beneficial ownership of
shares of stocks.
 If involuntary, deductible.
 If voluntary, deductible if incidental to
replacement or renewal of the building
a. Due to unforeseen causes
b. Property has been permanently
discarded.
 When stock is disposed due to
fluctuations in the market.
 Expenses more than revenues.
 The excess of allowable deduction over
gross income of the business in a
taxable year. IOW, you have more
than income. So, you incurred a loss
(Lugi). The running of the 3-year
period will continue even if you did not
benefit.
 It shall be carried over as a deduction
from the gross income for the next 3
consecutive taxable years immediately
following the year of loss. Such loss
shall be allowed as a deduction.
Provided, it had not been previously
offset as deduction from gross income.
However, any net loss incurred in a
taxable year during which the taxpayer
was exempt from income tax shall not
be allowed as a deduction. NOLCO shall
be allowed only if there has been no
substantial change in the ownership of
the business or enterprise.
 NOLCO will be applied within 3 years
when the Company is already
subjected RCIT and not MCIT. Three-

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 year expiry period will continue to run a. Science
even if MCIT. b. Health
c. Education
Requisites: d. Economic Development
1. Cannot be claimed if OSD e. Youth and Sports Development
2. Cannot be claimed if tax holiday
3. Cannot be claimed if based on gross 7. RESEARCH AND DEVELOPMENT
income or receipts
4. Cannot be deducted if subject to MCIT  Expenses pertinent to innovations
5. Cannot be deducted if there is or the improvement of processes.
substantial change in ownership.  It is something that should not
 Note: Substantial ownership threshold have been attached to the capital
is 75%. account or one that you have
claimed as an asset.
5. BAD DEBTS  If ever attached to a capital
account, TP must be able to
Requisites for Deductibility: amortize the cost or R&D over the
period of 60 months or 5 years.
a. The bad debt must be arising from a
valid and subsisting obligation. Limitations:
b. An obligation to the taxpayer
concerned (TP is the creditor) a. Money spent to acquire land for R&D,
c. Related to the TP’s trade, business or not deductible under R&D.
profession b. Money spent to locate materials, not
d. Ascertained to be worthless deductible under R&D.
e. Charged off and uncollectible within the
year proven to be worthless 8. PENSION TRUST
f. Uncollectible in the near future.
Requisites for Deductibility:
 If it can be collected in the future,
subject the debt to the Tax Benefit a. ER established a pension plan
Rule. b. Reasonable and Actuarially Sound
c. Contributions are made by ER to
6. CHARITABLE CONTRIBUTIONS pension fund
 Not related to trade or business unless d. Amount deposited is not controlled by
the business is charity. ER.
e. Payment has not yet been allowed as
Requisites for Deductibility: deduction.

1. Actual Payment to PH govt or to any  Atty. Amago: Deduction is apportioned

corporation engaged in charity. Must in equal parts over a period of 10
be a legitimate entity. Those who ask consecutive years beginning with the
people to buy their products are year in which the transfer or payment
excluded. is made. This is the Corridor (or
2. No part of net income accrues to the Corregidor) method.
benefit of private stockholder or
individual. Requisites of Reasonable Private Pension
3. Made within taxable year Benefit Plan:
4. Should not exceed 5% or 10% 1. Definite written program for it
depending on type of charitable 2. Plan must be permanent and
contribution continuing
3. It must cover at least 70% of the EEs
 Ordinary Charitable Contribution- of the company (or at least 80% of the
deductible in full 70% must be qualified to be covered)
 Special Charitable Contribution-
deductible, subject to limitations. 9. DEPRECIATION
 Value of a property across a period for
Charitable Contribution to government, which it is useful.
deductible in full if beneficiary is:

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4 methods:
1. Straight Line- Account for the
depreciation based on how long the
property will be used.
2. Declining Balance- Accounts for
depreciation based on a predetermined
rate of depreciation.
3. Sum of the Years Digit- Getting the
sum of the years digit
4. Any other method prescribed by DOF.
10. DEPLETION
 Assigning usefulness of a particular
undertaking including wasting assets.
 Depletion is used when the assets to
be used are non-renewable and will be
depleted or completely run out in the
future (i.e., mining. Once all the
minerals have been mined and
extracted, the land where the minerals
were located will be bare and
depleted)
Cost Depletion Method
 Depreciation where you amortize the
cost of exploration throughout the life
of the operation involved.
OPTIONAL STANDARD DEDUCTION (OSD)
 40% Deduction
 Based on gross sales or receipts if
individual; Based on gross income if
corporation.
 Atty. Amago: The good thing about
OSD is there is no need for
substantiation. If the TP does not have
any receipts, invoices or records to
prove deductibility, he can opt for OSD
where in 40% will be deducted even
without substantiation.
 Atty. Amago: The TP is supposed to
signify his intention to avail of OSD
during the FIRST QUARTER FILING OF
EVERY YEAR (May 15)
 Atty. Amago: In practice, because we
are not so keen in keeping receipts,
you might as well avail of OSD. But
then with the availability of 8% gross
income tax, you are allowed to pay 8%
of your gross income but less 250,000.
The 8% is not only in lieu of income
tax but also of other percentage tax. If
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you reach the threshold of 3M, you are
subject to VAT. If less than 3M, 3%
OPT may be charged.
INCOME TAX ON INDIVIDUALS
Classifications:
1. Resident Citizen (RC)
2. Non-Resident Citizen (NRC)
3. Resident Alien (RA)
4. Non- Resident Alien (NRA)
a. Non-Resident Alien Engaged in
Trade or Business (NRA-ETB)
b. Non- Resident Alien Not Engaged in
Trade or Business (NRA-NETB)
5. Special Employees
6. Estates and Trusts
1. RESIDENT CITIZENS (RC)
Article IV, Sec. 1, 1987 Constitution:
The following are citizens of the Philippines:
(1) Those who are citizens of the Philippines at
the time of the adoption of this Constitution;
(2) Those whose fathers or mothers are
citizens of the Philippines;
(3) Those born before January 17, 1973, of
Filipino mothers, who elect Philippine
citizenship upon reaching the age of majority;
and
(4) Those who are naturalized in accordance
with law
2. NON-RESIDENT CITIZENS (NRC)
a. Filipinos abroad with intention of
staying abroad
b. PH citizen who leaves PH during
taxable year for employment/
immigrant
c. PH citizen staying abroad for 183 days
or more
d. Previous NRC, arrives in PH to reside
permanently with respect to income
earned abroad until arrival
e. Overseas Contract Worker
f. PH citizen seaman if member of vessel
engaged in international trade.
3. RESIDENT ALIEN (RA)
 An individual whose residence is in
PH but who is not a citizen thereof.
  Must not be a mere transient or
sojourner
 He must not have a definite
intention to stay in PH. Period of
staying in PH is indefinite
 If intention is definite and there is
clear intention to stay in PH,
cannot be considered an RA
 If intent is to extend stay in PH and
PH is a temporary home,
considered as an RA
 Generally, if stay in PH is more
than one year, considered RA.
4. NON- RESIDENT ALIEN (NRA)
 Engaged in Trade or Business
(NRA-ETB): More than 180 days in
PH
 Not Engaged in Trade or Business
(NRA-NETB): Less than 180 days in
PH.
 NRA-NETB is a mere transient or
sojourner
 If an ANRA-NETB stays here for
181 days or more, now considered
an NRA-ETB.
TAKE NOTE!!!
 183 days for NRC
 More than 180 (181+) days for NRA-
ETB
5. ESTATE AND TRUSTS
 Taxable as Individuals
 Trust: An obligation to administer a
property given to a person for the
benefit of another.
 Parties to a Trust:
a. Trustor or Grantor
b. Trustee or Fiduciary
c. Beneficiary or Grantee
 GR: A trust, once created, can be
considered a separate taxpayer
 XPN: Consolidation of trusts when
multiple trusts are created by the same
person for the same beneficiary.
Mode of Tax Collection Payment:
 Withholding Tax: For purposes of
collection of taxes due on
compensation is based on withholding
of wages
 Excessive Withholding: Any excess
taxes withheld by ER which supposedly
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to be credited to the BIR. The BIR is
required to refund it in the form of
warrants within 3 months from May 15.
Passive Income vs. Active Income
 Active Income: Where ER exerts effort
to earn the income
 Passive Income: ER does not exert
effort to earn income other than the
initial payment of an investment.
Tax Involving Individuals
An individual TP can earn through:
1. Compensation income- There is ER-EE
relationship
2. Business Income- Practice of
profession or of a business
3. Mixed- Both compensation and
business
 Importance: A person earning purely
professional or business income or
mixed income pertaining to the
business aspect of the income has an
additional option to be taxed at 8%
based on gross income/ gross sales or
receipts in lieu of the 3% Other
Percentage Taxes. But the 250,000
exemption must be noted. (The 8%
only applies in excess of 250,000). If
not exceeding 250,000, no 8%. (There
can however be 3% OPT.)
 If earning purely compensation
income, this 8% option is NOT
AVAILABLE. The Tax rate of a
compensation earner is the 0-35%
GITR.
FRINGE BENEFIT
 It is any good, service or other benefit
furnished or granted by an ER in cash
or in kind, in addition to basic salaries,
to individual EEs, EXCEPT RANK-
AND-FILE EEs.
 Mnemonics: HEVHIMEHEL
1. Housing
2. Expense Account
3. Vehicle of any Kind
4. Household personnel
5. Interest on Loan
6. Membership Fees
7. Expenses for Foreign Travel
8. Holiday and Vacation Expenses
9. Educational Assistance to EE
10. Life or Health Insurance

 Managerial Employee- One vested with
powers and prerogatives to lay down
and execute management policies and
or fire, transfer, lay-off, discharge or
assign employees
 Supervisory Employee-
recommends managerial action and
who exercises independent judgment
in the making of such
recommendations
 Rank-and-File Employees: Those who
are neither managerial or supervisory
EEs.
 Fringe Benefit Tax (FBT) is 35% for
regular; for NRA-NETB, 25% (highest
in tax table)
 The one who should pay the FBT is the
EMPLOYER not the employee.
 Tax Base: Grossed Up Monetary Value
(GUMV)
 TP is the ER because what is actually
received by EE is deemed the NET of
whatever is the tax liability.
8% GROSS INCOME TAX
 What is established by the TRAIN Law
is the imposition of 8% gross income
tax rate, in lieu of the 0-35%
graduated income tax rate (GITR).
Requisites:
1. Must be earning business or
professional income
2. Gross sales or gross receipts do not
exceed 3M.
3. Subjected to Other Percentage Tax
(OPT) of 3%.
ACCOUNTING PERIODS
Two Accounting Periods:
1. Calendar Year- Any 12-month period
ending on December 31.
2. Fiscal Year: any 12-month period
ending in another period other than
December 31. (Example: October 1-
September 30).
 These 2 periods are available only
to corporations.
 Individuals only have the calendar
year. They must always file by
April 15.Change of Accounting
Periods:
 Generally, when a TP wants to change
accounting periods, they are required
to file a SHORT PERIOD RETURN.
Three Ways to Change:
He
1. Fiscal year to calendar year
 Rule: Short Period Return shall be
made for the period between the close
of the last fiscal year for which the
return was made and the following
December 31.
Example:
 Option: From October 1- September 30
to January 1- December 31.
 Short Period Return to be filed:
October 1- December 31.
2. Calendar Year to Fiscal Year
 Rule: Short Period Return shall be
made for the period between the close
of the last calendar year for which the
return was made and the date
designated as the close of the fiscal
year.
Example:
 January 1-December 31 to October 1-
September 30.
 Short Period Return to be Filed:
January 1- September 30.
3. Fiscal year to another Fiscal Year
 Rule: Short period return shall be
made for the period between the close
of the former fiscal year and the date
designated as the close of the new
fiscal year.
Example:
 Option: October 1- September 30 to
August 1- July 31.
 Short Period Return to be filed:
October 1- July 31.
 Atty. Amago: A short period return
never exceeds 12 months. If it exceeds
12 months, it is no longer a short-
period return.
-END OF TOPIC-
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