EN BANC

G.R. No. 177131

BOY SCOUTS OF THE PHILIPPINES, Petitioner, versus

COMMISSION ON AUDIT, Respondent.
June 7, 2011

DECISION

LEONARDO-DE CASTRO, J.:

The jurisdiction of the Commission on Audit (COA) over the Boy Scouts of the Philippines (BSP) is the subject matter of
this controversy that reached us via petition for prohibition[1] filed by the BSP under Rule 65 of the 1997 Rules of Court. In
this petition, the BSP seeks that the COA be prohibited from implementing its June 18, 2002 Decision,[2] its February 21,
2007 Resolution,[3] as well as all other issuances arising therefrom, and that all of the foregoing be rendered null and
void. [4]

Antecedent Facts and Background of the Case

This case arose when the COA issued Resolution No. 99-011[5] on August 19, 1999 (the COA Resolution), with the
subject Defining the Commissions policy with respect to the audit of the Boy Scouts of the Philippines. In its whereas clauses,
the COA Resolution stated that the BSP was created as a public corporation under Commonwealth Act No. 111, as
amended by Presidential Decree No. 460 and Republic Act No. 7278; that in Boy Scouts of the Philippines v. National Labor
Relations Commission,[6] the Supreme Court ruled that the BSP, as constituted under its charter, was a government-
controlled corporation within the meaning of Article IX(B)(2)(1) of the Constitution; and that the BSP is appropriately
regarded as a government instrumentality under the 1987 Administrative Code. [7] The COA Resolution also cited its
constitutional mandate under Section 2(1), Article IX (D). Finally, the COA Resolution reads:

NOW THEREFORE, in consideration of the foregoing premises, the COMMISSION PROPER HAS RESOLVED, AS IT DOES
HEREBY RESOLVE, to conduct an annual financial audit of the Boy Scouts of the Philippines in accordance with generally
accepted auditing standards, and express an opinion on whether the financial statements which include the Balance Sheet,
the Income Statement and the Statement of Cash Flows present fairly its financial position and results of operations.

xxxx

BE IT RESOLVED FURTHERMORE, that for purposes of audit supervision, the Boy Scouts of the Philippines shall be
classified among the government corporations belonging to the Educational, Social, Scientific, Civic and Research
Sector under the Corporate Audit Office I, to be audited, similar to the subsidiary corporations, by employing the team
audit approach.[8] (Emphases supplied.)

The BSP sought reconsideration of the COA Resolution in a letter[9] dated November 26, 1999 signed by the BSP National
President Jejomar C. Binay, who is now the Vice President of the Republic, wherein he wrote:

It is the position of the BSP, with all due respect, that it is not subject to the Commissions jurisdiction on the following
grounds:
1. We reckon that the ruling in the case of Boy Scouts of the Philippines vs. National Labor Relations Commission, et al.
(G.R. No. 80767) classifying the BSP as a government-controlled corporation is anchored on the substantial Government
participation in the National Executive Board of the BSP. It is to be noted that the case was decided when the BSP Charter
is defined by Commonwealth Act No. 111 as amended by Presidential Decree 460.

However, may we humbly refer you to Republic Act No. 7278 which amended the BSPs charter after the cited case was
decided. The most salient of all amendments in RA No. 7278 is the alteration of the composition of the National Executive
Board of the BSP.

The said RA virtually eliminated the substantial government participation in the National Executive Board by removing: (i)
the President of the Philippines and executive secretaries, with the exception of the Secretary of Education, as members
thereof; and (ii) the appointment and confirmation power of the President of the Philippines, as Chief Scout, over the
members of the said Board.

The BSP believes that the cited case has been superseded by RA 7278. Thereby weakening the cases conclusion that the
BSP is a government-controlled corporation (sic). The 1987 Administrative Code itself, of which the BSP vs. NLRC relied on
for some terms, defines government-owned and controlled corporations as agencies organized as stock or non-stock
corporations which the BSP, under its present charter, is not.

Also, the Government, like in other GOCCs, does not have funds invested in the BSP. What RA 7278 only provides is that
the Government or any of its subdivisions, branches, offices, agencies and instrumentalities can from time to time donate
and contribute funds to the BSP.

xxxx

Also the BSP respectfully believes that the BSP is not appropriately regarded as a government instrumentality under the
1987 Administrative Code as stated in the COA resolution. As defined by Section 2(10) of the said code, instrumentality
refers to any agency of the National Government, not integrated within the department framework, vested with special
functions or jurisdiction by law, endowed with some if not all corporate powers, administering special funds, and enjoying
operational autonomy, usually through a charter.

The BSP is not an entity administering special funds. It is not even included in the DECS National Budget. x x x

It may be argued also that the BSP is not an agency of the Government. The 1987 Administrative Code, merely referred
the BSP as an attached agency of the DECS as distinguished from an actual line agency of departments that are included
in the National Budget. The BSP believes that an attached agency is different from an agency. Agency, as defined in Section
2(4) of the Administrative Code, is defined as any of the various units of the Government including a department, bureau,
office, instrumentality, government-owned or controlled corporation or local government or distinct unit therein.

Under the above definition, the BSP is neither a unit of the Government; a department which refers to an executive
department as created by law (Section 2[7] of the Administrative Code); nor a bureau which refers to any principal
subdivision or unit of any department (Section 2[8], Administrative Code). [10]

Subsequently, requests for reconsideration of the COA Resolution were also made separately by Robert P. Valdellon,
Regional Scout Director, Western Visayas Region, Iloilo City and Eugenio F. Capreso, Council Scout Executive of Calbayog
City.[11]

In a letter[12] dated July 3, 2000, Director Crescencio S. Sunico, Corporate Audit Officer (CAO) I of the COA, furnished the
BSP with a copy of the Memorandum[13]dated June 20, 2000 of Atty. Santos M. Alquizalas, the COA General Counsel. In
said Memorandum, the COA General Counsel opined that Republic Act No. 7278 did not supersede the Courts ruling in Boy
Scouts of the Philippines v. National Labor Relations Commission, even though said law eliminated the substantial
government participation in the selection of members of the National Executive Board of the BSP. The Memorandum
further provides:

Analysis of the said case disclosed that the substantial government participation is only one (1) of the three (3) grounds
relied upon by the Court in the resolution of the case. Other considerations include the character of the BSPs purposes
and functions which has a public aspect and the statutory designation of the BSP as a public corporation. These grounds
have not been deleted by R.A. No. 7278. On the contrary, these were strengthened as evidenced by the amendment made
relative to BSPs purposes stated in Section 3 of R.A. No. 7278.

On the argument that BSP is not appropriately regarded as a government instrumentality and agency of the government,
such has already been answered and clarified. The Supreme Court has elucidated this matter in the BSP case when it
declared that BSP is regarded as, both a government-controlled corporation with an original charter and as an
instrumentality of the Government. Likewise, it is not disputed that the Administrative Code of 1987 designated the BSP
as one of the attached agencies of DECS. Being an attached agency, however, it does not change its nature as a
government-controlled corporation with original charter and, necessarily, subject to COA audit jurisdiction. Besides,
Section 2(1), Article IX-D of the Constitution provides that COA shall have the power, authority, and duty to examine, audit
and settle all accounts pertaining to the revenue and receipts of, and expenditures or uses of funds and property, owned
or held in trust by, or pertaining to, the Government, or any of its subdivisions, agencies or instrumentalities, including
government-owned or controlled corporations with original charters.[14]

Based on the Memorandum of the COA General Counsel, Director Sunico wrote:

In view of the points clarified by said Memorandum upholding COA Resolution No. 99-011, we have to comply with the
provisions of the latter, among which is to conduct an annual financial audit of the Boy Scouts of the Philippines.[15]

In a letter dated November 20, 2000 signed by Director Amorsonia B. Escarda, CAO I, the COA informed the BSP that a
preliminary survey of its organizational structure, operations and accounting system/records shall be conducted on
November 21 to 22, 2000.[16]

Upon the BSPs request, the audit was deferred for thirty (30) days. The BSP then filed a Petition for Review with Prayer
for Preliminary Injunction and/or Temporary Restraining Order before the COA. This was denied by the COA in its
questioned Decision, which held that the BSP is under its audit jurisdiction. The BSP moved for reconsideration but this
was likewise denied under its questioned Resolution. [17]

This led to the filing by the BSP of this petition for prohibition with preliminary injunction and temporary restraining order
against the COA.

The Issue

As stated earlier, the sole issue to be resolved in this case is whether the BSP falls under the COAs audit jurisdiction.

The Parties Respective Arguments

The BSP contends that Boy Scouts of the Philippines v. National Labor Relations Commission is inapplicable for purposes
of determining the audit jurisdiction of the COA as the issue therein was the jurisdiction of the National Labor Relations
Commission over a case for illegal dismissal and unfair labor practice filed by certain BSP employees. [18]

While the BSP concedes that its functions do relate to those that the government might otherwise completely assume on
its own, it avers that this alone was not determinative of the COAs audit jurisdiction over it. The BSP further avers that the
Court in Boy Scouts of the Philippines v. National Labor Relations Commission simply stated x x x that in respect of functions,
the BSP is akin to a public corporation but this was not synonymous to holding that the BSP is a government corporation
or entity subject to audit by the COA. [19]

The BSP contends that Republic Act No. 7278 introduced crucial amendments to its charter; hence, the findings of the
Court in Boy Scouts of the Philippines v. National Labor Relations Commission are no longer valid as the government has
ceased to play a controlling influence in it. The BSP claims that the pronouncements of the Court therein must be taken
only within the context of that case; that the Court had categorically found that its assets were acquired from the Boy
Scouts of America and not from the Philippine government, and that its operations are financed chiefly from membership
dues of the Boy Scouts themselves as well as from property rentals; and that the BSP may correctly be characterized as
non-governmental, and hence, beyond the audit jurisdiction of the COA. It further claims that the designation by the Court
of the BSP as a government agency or instrumentality is mere obiter dictum.[20]

The BSP maintains that the provisions of Republic Act No. 7278 suggest that governance of BSP has come to be
overwhelmingly a private affair or nature, with government participation restricted to the seat of the Secretary of
Education, Culture and Sports.[21] It cites Philippine Airlines Inc. v. Commission on Audit[22] wherein the Court declared that,
PAL, having ceased to be a government-owned or controlled corporation is no longer under the audit jurisdiction of the
COA.[23] Claiming that the amendments introduced by Republic Act No. 7278 constituted a supervening event that changed
the BSPs corporate identity in the same way that the governments privatization program changed PALs, the BSP makes
the case that the government no longer has control over it; thus, the COA cannot use the Boy Scouts of the Philippines v.
National Labor Relations Commission as its basis for the exercise of its jurisdiction and the issuance of COA Resolution No.
99-011.[24] The BSP further claims as follows:

It is not far-fetched, in fact, to concede that BSPs funds and assets are private in character. Unlike ordinary public
corporations, such as provinces, cities, and municipalities, or government-owned and controlled corporations, such as
Land Bank of the Philippines and the Development Bank of the Philippines, the assets and funds of BSP are not derived
from any government grant. For its operations, BSP is not dependent in any way on any government appropriation; as a
matter of fact, it has not even been included in any appropriations for the government. To be sure, COA has not alleged,
in its Resolution No. 99-011 or in the Memorandum of its General Counsel, that BSP received, receives or continues to
receive assets and funds from any agency of the government. The foregoing simply point to the private nature of the funds
and assets of petitioner BSP.

xxxx

As stated in petitioners third argument, BSPs assets and funds were never acquired from the government. Its operations
are not in any way financed by the government, as BSP has never been included in any appropriations act for the
government. Neither has the government invested funds with BSP. BSP, has not been, at any time, a user of government
property or funds; nor have properties of the government been held in trust by BSP. This is precisely the reason why, until
this time, the COA has not attempted to subject BSP to its audit jurisdiction. x x x.[25]
To summarize its other arguments, the BSP contends that it is not a government-owned or controlled corporation; neither
is it an instrumentality, agency, or subdivision of the government.

In its Comment,[26] the COA argues as follows:

1. The BSP is a public corporation created under Commonwealth Act No. 111 dated October 31, 1936, and whose
functions relate to the fostering of public virtues of citizenship and patriotism and the general improvement of the moral
spirit and fiber of the youth. The manner of creation and the purpose for which the BSP was created indubitably prove
that it is a government agency.

2. Being a government agency, the funds and property owned or held in trust by the BSP are subject to the audit
authority of respondent Commission on Audit pursuant to Section 2 (1), Article IX-D of the 1987 Constitution.

3. Republic Act No. 7278 did not change the character of the BSP as a government-owned or controlled corporation
and government instrumentality.[27]

The COA maintains that the functions of the BSP that include, among others, the teaching to the youth of patriotism,
courage, self-reliance, and kindred virtues, are undeniably sovereign functions enshrined under the Constitution and
discussed by the Court in Boy Scouts of the Philippines v. National Labor Relations Commission. The COA contends that
any attempt to classify the BSP as a private corporation would be incomprehensible since no less than the law which
created it had designated it as a public corporation and its statutory mandate embraces performance of sovereign
functions.[28]

The COA claims that the only reason why the BSP employees fell within the scope of the Civil Service Commission even
before the 1987 Constitution was the fact that it was a government-owned or controlled corporation; that as an attached
agency of the Department of Education, Culture and Sports (DECS), the BSP is an agency of the government; and that the
BSP is a chartered institution under Section 1(12) of the Revised Administrative Code of 1987, embraced under the term
government instrumentality.[29]

The COA concludes that being a government agency, the funds and property owned or held by the BSP are subject to the
audit authority of the COA pursuant to Section 2(1), Article IX (D) of the 1987 Constitution.

In support of its arguments, the COA cites The Veterans Federation of the Philippines (VFP) v. Reyes,[30] wherein the Court
held that among the reasons why the VFP is a public corporation is that its charter, Republic Act No. 2640, designates it as
one. Furthermore, the COA quotes the Court as saying in that case:

In several cases, we have dealt with the issue of whether certain specific activities can be classified as sovereign functions.
These cases, which deal with activities not immediately apparent to be sovereign functions, upheld the public sovereign
nature of operations needed either to promote social justice or to stimulate patriotic sentiments and love of country.

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Petitioner claims that its funds are not public funds because no budgetary appropriations or government funds have been
released to the VFP directly or indirectly from the DBM, and because VFP funds come from membership dues and lease
rentals earned from administering government lands reserved for the VFP.

The fact that no budgetary appropriations have been released to the VFP does not prove that it is a private corporation.
The DBM indeed did not see it fit to propose budgetary appropriations to the VFP, having itself believed that the VFP is a
private corporation. If the DBM, however, is mistaken as to its conclusion regarding the nature of VFP's incorporation, its
previous assertions will not prevent future budgetary appropriations to the VFP. The erroneous application of the law by
public officers does not bar a subsequent correct application of the law. [31] (Citations omitted.)

The COA points out that the government is not precluded by law from extending financial support to the BSP and adding
to its funds, and that as a government instrumentality which continues to perform a vital function imbued with public
interest and reflective of the governments policy to stimulate patriotic sentiments and love of country, the BSPs funds
from whatever source are public funds, and can be used solely for public purpose in pursuance of the provisions of
Republic Act No. [7278].[32]

The COA claims that the fact that it has not yet audited the BSPs funds may not bar the subsequent exercise of its audit
jurisdiction.

The BSP filed its Reply[33] on August 29, 2007 maintaining that its statutory designation as a public corporation and the
public character of its purpose and functions are not determinative of the COAs audit jurisdiction; reiterating its stand
that Boy Scouts of the Philippines v. National Labor Relations Commission is not applicable anymore because the aspect of
government ownership and control has been removed by Republic Act No. 7278; and concluding that the funds and
property that it either owned or held in trust are not public funds and are not subject to the COAs audit jurisdiction.

Thereafter, considering the BSPs claim that it is a private corporation, this Court, in a Resolution[34] dated July 20, 2010,
required the parties to file, within a period of twenty (20) days from receipt of said Resolution, their respective comments
on the issue of whether Commonwealth Act No. 111, as amended by Republic Act No. 7278, is constitutional.

In compliance with the Courts resolution, the parties filed their respective Comments.

In its Comment[35] dated October 22, 2010, the COA argues that the constitutionality of Commonwealth Act No. 111, as
amended, is not determinative of the resolution of the present controversy on the COAs audit jurisdiction over petitioner,
and in fact, the controversy may be resolved on other grounds; thus, the requisites before a judicial inquiry may be made,
as set forth in Commissioner of Internal Revenue v. Court of Tax Appeals,[36] have not been fully met.[37] Moreover, the COA
maintains that behind every law lies the presumption of constitutionality.[38] The COA likewise argues that contrary to the
BSPs position, repeal of a law by implication is not favored. [39] Lastly, the COA claims that there was no violation of Section
16, Article XII of the 1987 Constitution with the creation or declaration of the BSP as a government
corporation. Citing Philippine Society for the Prevention of Cruelty to Animals v. Commission on Audit,[40] the COA further
alleges:

The true criterion, therefore, to determine whether a corporation is public or private is found in the totality of the relation
of the corporation to the State. If the corporation is created by the State as the latters own agency or instrumentality to
help it in carrying out its governmental functions, then that corporation is considered public; otherwise, it is private. x x
x.[41]

For its part, in its Comment[42] filed on December 3, 2010, the BSP submits that its charter, Commonwealth Act No. 111,
as amended by Republic Act No. 7278, is constitutional as it does not violate Section 16, Article XII of the Constitution. The
BSP alleges that while [it] is not a public corporation within the purview of COAs audit jurisdiction, neither is it a private
corporation created by special law falling within the ambit of the constitutional prohibition x x x.[43] The BSP further alleges:

Petitioners purpose is embodied in Section 3 of C.A. No. 111, as amended by Section 1 of R.A. No. 7278, thus:
xxxx

A reading of the foregoing provision shows that petitioner was created to advance the interest of the youth, specifically
of young boys, and to mold them into becoming good citizens. Ultimately, the creation of petitioner redounds to the
benefit, not only of those boys, but of the public good or welfare. Hence, it can be said that petitioners purpose and
functions are more of a public rather than a private character. Petitioner caters to all boys who wish to join the
organization without any distinction. It does not limit its membership to a particular class of boys. Petitioners members
are trained in scoutcraft and taught patriotism, civic consciousness and responsibility, courage, self-reliance, discipline
and kindred virtues, and moral values, preparing them to become model citizens and outstanding leaders of the country. [44]

The BSP reiterates its stand that the public character of its purpose and functions do not place it within the ambit of the
audit jurisdiction of the COA as it lacks the government ownership or control that the Constitution requires before an
entity may be subject of said jurisdiction. [45] It avers that it merely stated in its Reply that the withdrawal of government
control is akin to privatization, but it does not necessarily mean that petitioner is a private corporation. [46] The BSP claims
that it has a unique characteristic which neither classifies it as a purely public nor a purely private corporation; [47] that it is
not a quasi-public corporation; and that it may belong to a different class altogether. [48]

The BSP claims that assuming arguendo that it is a private corporation, its creation is not contrary to the purpose of Section
16, Article XII of the Constitution; and that the evil sought to be avoided by said provision is inexistent in the enactment
of the BSPs charter,[49] as, (i) it was not created for any pecuniary purpose; (ii) those who will primarily benefit from its
creation are not its officers but its entire membership consisting of boys being trained in scoutcraft all over the country;
(iii) it caters to all boys who wish to join the organization without any distinction; and (iv) it does not limit its membership
to a particular class or group of boys. Thus, the enactment of its charter confers no special privilege to particular individuals,
families, or groups; nor does it bring about the danger of granting undue favors to certain groups to the prejudice of others
or of the interest of the country, which are the evils sought to be prevented by the constitutional provision involved. [50]

Finally, the BSP states that the presumption of constitutionality of a legislative enactment prevails absent any clear
showing of its repugnancy to the Constitution.[51]

The Ruling of the Court

After looking at the legislative history of its amended charter and carefully studying the applicable laws and the arguments
of both parties, we find that the BSP is a public corporation and its funds are subject to the COAs audit jurisdiction.

The BSP Charter (Commonwealth Act No. 111, approved on October 31, 1936), entitled An Act to Create a Public
Corporation to be Known as the Boy Scouts of the Philippines, and to Define its Powers and Purposes created the BSP as a
public corporation to serve the following public interest or purpose:

Sec. 3. The purpose of this corporation shall be to promote through organization and cooperation with other agencies,
the ability of boys to do useful things for themselves and others, to train them in scoutcraft, and to inculcate in them
patriotism, civic consciousness and responsibility, courage, self-reliance, discipline and kindred virtues, and moral values,
using the method which are in common use by boy scouts.

Presidential Decree No. 460, approved on May 17, 1974, amended Commonwealth Act No. 111 and provided substantial
changes in the BSP organizational structure. Pertinent provisions are quoted below:

Section II. Section 5 of the said Act is also amended to read as follows:
The governing body of the said corporation shall consist of a National Executive Board composed of (a) the President of
the Philippines or his representative; (b) the charter and life members of the Boy Scouts of the Philippines; (c) the Chairman
of the Board of Trustees of the Philippine Scouting Foundation; (d) the Regional Chairman of the Scout Regions of the
Philippines; (e) the Secretary of Education and Culture, the Secretary of Social Welfare, the Secretary of National Defense,
the Secretary of Labor, the Secretary of Finance, the Secretary of Youth and Sports, and the Secretary of Local Government
and Community Development; (f) an equal number of individuals from the private sector; (g) the National President of the
Girl Scouts of the Philippines; (h) one Scout of Senior age from each Scout Region to represent the boy membership; and
(i) three representatives of the cultural minorities. Except for the Regional Chairman who shall be elected by the Regional
Scout Councils during their annual meetings, and the Scouts of their respective regions, all members of the National
Executive Board shall be either by appointment or cooption, subject to ratification and confirmation by the Chief Scout,
who shall be the Head of State. Vacancies in the Executive Board shall be filled by a majority vote of the remaining
members, subject to ratification and confirmation by the Chief Scout. The by-laws may prescribe the number of members
of the National Executive Board necessary to constitute a quorum of the board, which number may be less than a majority
of the whole number of the board. The National Executive Board shall have power to make and to amend the by-laws,
and, by a two-thirds vote of the whole board at a meeting called for this purpose, may authorize and cause to be executed
mortgages and liens upon the property of the corporation.

Subsequently, on March 24, 1992, Republic Act No. 7278 further amended Commonwealth Act No. 111 by strengthening
the volunteer and democratic character of the BSP and reducing government representation in its governing body, as
follows:

Section 1. Sections 2 and 3 of Commonwealth Act. No. 111, as amended, is hereby amended to read as follows:

"Sec. 2. The said corporation shall have the powers of perpetual succession, to sue and be sued; to enter into contracts;
to acquire, own, lease, convey and dispose of such real and personal estate, land grants, rights and choses in action as
shall be necessary for corporate purposes, and to accept and receive funds, real and personal property by gift, devise,
bequest or other means, to conduct fund-raising activities; to adopt and use a seal, and the same to alter and destroy; to
have offices and conduct its business and affairs in Metropolitan Manila and in the regions, provinces, cities, municipalities,
and barangays of the Philippines, to make and adopt by-laws, rules and regulations not inconsistent with this Act and the
laws of the Philippines, and generally to do all such acts and things, including the establishment of regulations for the
election of associates and successors, as may be necessary to carry into effect the provisions of this Act and promote the
purposes of said corporation: Provided, That said corporation shall have no power to issue certificates of stock or to
declare or pay dividends, its objectives and purposes being solely of benevolent character and not for pecuniary profit of
its members.

"Sec. 3. The purpose of this corporation shall be to promote through organization and cooperation with other agencies,
the ability of boys to do useful things for themselves and others, to train them in scoutcraft, and to inculcate in them
patriotism, civic consciousness and responsibility, courage, self-reliance, discipline and kindred virtues, and moral
values, using the method which are in common use by boy scouts."

Sec. 2. Section 4 of Commonwealth Act No. 111, as amended, is hereby repealed and in lieu thereof, Section 4 shall read
as follows:

"Sec. 4. The President of the Philippines shall be the Chief Scout of the Boy Scouts of the Philippines."

Sec. 3. Sections 5, 6, 7 and 8 of Commonwealth Act No. 111, as amended, are hereby amended to read as follows:
"Sec. 5. The governing body of the said corporation shall consist of a National Executive Board, the members of which
shall be Filipino citizens of good moral character. The Board shall be composed of the following:

"(a) One (1) charter member of the Boy Scouts of the Philippines who shall be elected by the members of the National
Council at its meeting called for this purpose;

"(b) The regional chairmen of the scout regions who shall be elected by the representatives of all the local scout councils
of the region during its meeting called for this purpose: Provided, That a candidate for regional chairman need not be the
chairman of a local scout council;

"(c) The Secretary of Education, Culture and Sports;

"(d) The National President of the Girl Scouts of the Philippines;

"(e) One (1) senior scout, each from Luzon, Visayas and Mindanao areas, to be elected by the senior scout delegates of
the local scout councils to the scout youth forums in their respective areas, in its meeting called for this purpose, to
represent the boy scout membership;

"(f) Twelve (12) regular members to be elected by the members of the National Council in its meeting called for this
purpose;

"(g) At least ten (10) but not more than fifteen (15) additional members from the private sector who shall be elected by
the members of the National Executive Board referred to in the immediately preceding paragraphs (a), (b), (c), (d), (e) and
(f) at the organizational meeting of the newly reconstituted National Executive Board which shall be held immediately
after the meeting of the National Council wherein the twelve (12) regular members and the one (1) charter member were
elected.

xxxx

"Sec. 8. Any donation or contribution which from time to time may be made to the Boy Scouts of the Philippines by the
Government or any of its subdivisions, branches, offices, agencies or instrumentalities or by a foreign government or by
private, entities and individuals shall be expended by the National Executive Board in pursuance of this Act.

The BSP as a Public Corporation under Par. 2, Art. 2 of the Civil Code

There are three classes of juridical persons under Article 44 of the Civil Code and the BSP, as presently constituted under
Republic Act No. 7278, falls under the second classification. Article 44 reads:

Art. 44. The following are juridical persons:

(1) The State and its political subdivisions;

(2) Other corporations, institutions and entities for public interest or purpose created by law; their personality begins
as soon as they have been constituted according to law;
(3) Corporations, partnerships and associations for private interest or purpose to which the law grants a juridical
personality, separate and distinct from that of each shareholder, partner or member. (Emphases supplied.)
The BSP, which is a corporation created for a public interest or purpose, is subject to the law creating it under Article 45
of the Civil Code, which provides:

Art. 45. Juridical persons mentioned in Nos. 1 and 2 of the preceding article are governed by the laws creating or
recognizing them.
Private corporations are regulated by laws of general application on the subject.
Partnerships and associations for private interest or purpose are governed by the provisions of this Code concerning
partnerships. (Emphasis and underscoring supplied.)

The purpose of the BSP as stated in its amended charter shows that it was created in order to implement a State policy
declared in Article II, Section 13 of the Constitution, which reads:

ARTICLE II - DECLARATION OF PRINCIPLES AND STATE POLICIES

Section 13. The State recognizes the vital role of the youth in nation-building and shall promote and protect their physical,
moral, spiritual, intellectual, and social well-being. It shall inculcate in the youth patriotism and nationalism, and
encourage their involvement in public and civic affairs.

Evidently, the BSP, which was created by a special law to serve a public purpose in pursuit of a constitutional mandate,
comes within the class of public corporations defined by paragraph 2, Article 44 of the Civil Code and governed by the law
which creates it, pursuant to Article 45 of the same Code.

The BSPs Classification Under the Administrative Code of 1987

The public, rather than private, character of the BSP is recognized by the fact that, along with the Girl Scouts of the
Philippines, it is classified as an attached agency of the DECS under Executive Order No. 292, or the Administrative Code
of 1987, which states:

TITLE VI EDUCATION, CULTURE AND SPORTS

Chapter 8 Attached Agencies

SEC. 20. Attached Agencies. The following agencies are hereby attached to the Department:

xxxx

(12) Boy Scouts of the Philippines;

(13) Girl Scouts of the Philippines.

The administrative relationship of an attached agency to the department is defined in the Administrative Code of 1987 as
follows:

BOOK IV

THE EXECUTIVE BRANCH

Chapter 7 ADMINISTRATIVE RELATIONSHIP

SEC. 38. Definition of Administrative Relationship. Unless otherwise expressly stated in the Code or in other laws defining
the special relationships of particular agencies, administrative relationships shall be categorized and defined as follows:

xxxx

(3) Attachment. (a) This refers to the lateral relationship between the department or its equivalent and the attached
agency or corporation for purposes of policy and program coordination. The coordination may be accomplished by
having the department represented in the governing board of the attached agency or corporation, either as chairman
or as a member, with or without voting rights, if this is permitted by the charter; having the attached corporation or
agency comply with a system of periodic reporting which shall reflect the progress of programs and projects; and having
the department or its equivalent provide general policies through its representative in the board, which shall serve as the
framework for the internal policies of the attached corporation or agency. (Emphasis ours.)

As an attached agency, the BSP enjoys operational autonomy, as long as policy and program coordination is achieved by
having at least one representative of government in its governing board, which in the case of the BSP is the DECS
Secretary. In this sense, the BSP is not under government control or supervision and control. Still this characteristic does
not make the attached chartered agency a private corporation covered by the constitutional proscription in question.

Art. XII, Sec. 16 of the Constitution refers to private corporations created by government for proprietary or
economic/business purposes

At the outset, it should be noted that the provision of Section 16 in issue is found in Article XII of the Constitution,
entitled National Economy and Patrimony. Section 1 of Article XII is quoted as follows:

SECTION 1. The goals of the national economy are a more equitable distribution of opportunities, income, and wealth; a
sustained increase in the amount of goods and services produced by the nation for the benefit of the people; and an
expanding productivity as the key to raising the quality of life for all, especially the underprivileged.

The State shall promote industrialization and full employment based on sound agricultural development and agrarian
reform, through industries that make full and efficient use of human and natural resources, and which are competitive in
both domestic and foreign markets. However, the State shall protect Filipino enterprises against unfair foreign
competition and trade practices.

In the pursuit of these goals, all sectors of the economy and all regions of the country shall be given optimum opportunity
to develop. Private enterprises, including corporations, cooperatives, and similar collective organizations, shall be
encouraged to broaden the base of their ownership.

The scope and coverage of Section 16, Article XII of the Constitution can be seen from the aforementioned declaration of
state policies and goals which pertains to national economy and patrimony and the interests of the people in economic
development.

Section 16, Article XII deals with the formation, organization, or regulation of private corporations,[52] which should be
done through a general law enacted by Congress, provides for an exception, that is: if the corporation is government
owned or controlled; its creation is in the interest of the common good; and it meets the test of economic viability. The
rationale behind Article XII, Section 16 of the 1987 Constitution was explained in Feliciano v. Commission on Audit,[53] in
the following manner:
The Constitution emphatically prohibits the creation of private corporations except by a general law applicable to all
citizens. The purpose of this constitutional provision is to ban private corporations created by special charters, which
historically gave certain individuals, families or groups special privileges denied to other citizens.[54] (Emphasis added.)

It may be gleaned from the above discussion that Article XII, Section 16 bans the creation of private corporations by
special law. The said constitutional provision should not be construed so as to prohibit the creation of public
corporations or a corporate agency or instrumentality of the government intended to serve a public interest or purpose,
which should not be measured on the basis of economic viability, but according to the public interest or purpose it serves
as envisioned by paragraph (2), of Article 44 of the Civil Code and the pertinent provisions of the Administrative Code of
1987.

The BSP is a Public Corporation Not Subject to the Test of Government Ownership or Control and Economic Viability

The BSP is a public corporation or a government agency or instrumentality with juridical personality, which does not fall
within the constitutional prohibition in Article XII, Section 16, notwithstanding the amendments to its charter. Not all
corporations, which are not government owned or controlled, are ipso facto to be considered private corporations as
there exists another distinct class of corporations or chartered institutions which are otherwise known as public
corporations. These corporations are treated by law as agencies or instrumentalities of the government which are not
subject to the tests of ownership or control and economic viability but to different criteria relating to their public
purposes/interests or constitutional policies and objectives and their administrative relationship to the government or
any of its Departments or Offices.

Classification of Corporations Under Section 16, Article XII of the Constitution on National Economy and Patrimony

The dissenting opinion of Associate Justice Antonio T. Carpio, citing a line of cases, insists that the Constitution recognizes
only two classes of corporations: private corporations under a general law, and government-owned or controlled
corporations created by special charters.

We strongly disagree. Section 16, Article XII should not be construed so as to prohibit Congress from creating public
corporations. In fact, Congress has enacted numerous laws creating public corporations or government agencies or
instrumentalities vested with corporate powers. Moreover, Section 16, Article XII, which relates to National Economy and
Patrimony, could not have tied the hands of Congress in creating public corporations to serve any of the constitutional
policies or objectives.
In his dissent, Justice Carpio contends that this ponente introduces a totally different species of corporation, which is
neither a private corporation nor a government owned or controlled corporation and, in so doing, is missing the fact that
the BSP, which was created as a non-stock, non-profit corporation, can only be either a private corporation or a
government owned or controlled corporation.

Note that in Boy Scouts of the Philippines v. National Labor Relations Commission, the BSP, under its former charter, was
regarded as both a government owned or controlled corporation with original charter and a public corporation. The said
case pertinently stated:

While the BSP may be seen to be a mixed type of entity, combining aspects of both public and private entities, we
believe that considering the character of its purposes and its functions, the statutory designation of the BSP as "a public
corporation" and the substantial participation of the Government in the selection of members of the National Executive
Board of the BSP, the BSP, as presently constituted under its charter, is a government-controlled corporation within the
meaning of Article IX (B) (2) (1) of the Constitution.

We are fortified in this conclusion when we note that the Administrative Code of 1987 designates the BSP as one of the
attached agencies of the Department of Education, Culture and Sports ("DECS"). An "agency of the Government" is defined
as referring to any of the various units of the Government including a department, bureau, office, instrumentality,
government-owned or -controlled corporation, or local government or distinct unit therein. "Government
instrumentality" is in turn defined in the 1987 Administrative Code in the following manner:

Instrumentality - refers to any agency of the National Government, not integrated within the department framework,
vested with special functions or jurisdiction by law, endowed with some if not all corporate powers, administering special
funds, and enjoying operational autonomy usually through a charter. This term includes regulatory agencies, chartered
institutions and government-owned or controlled corporations.

The same Code describes a "chartered institution" in the following terms:

Chartered institution - refers to any agency organized or operating under a special charter, and vested by law with
functions relating to specific constitutional policies or objectives. This term includes the state universities and colleges,
and the monetary authority of the State.

We believe that the BSP is appropriately regarded as "a government instrumentality" under the 1987 Administrative Code.

It thus appears that the BSP may be regarded as both a "government controlled corporation with an original
charter" and as an "instrumentality" of the Government within the meaning of Article IX (B) (2) (1) of the Constitution.
x x x.[55] (Emphases supplied.)

The existence of public or government corporate or juridical entities or chartered institutions by legislative fiat distinct
from private corporations and government owned or controlled corporation is best exemplified by the 1987
Administrative Code cited above, which we quote in part:

Sec. 2. General Terms Defined. Unless the specific words of the text, or the context as a whole, or a particular statute, shall
require a different meaning:

xxxx

(10) "Instrumentality" refers to any agency of the National Government, not integrated within the department framework,
vested with special functions or jurisdiction by law, endowed with some if not all corporate powers, administering special
funds, and enjoying operational autonomy, usually through a charter. This term includes regulatory agencies, chartered
institutions and government-owned or controlled corporations.

xxxx

(12) "Chartered institution" refers to any agency organized or operating under a special charter, and vested by law with
functions relating to specific constitutional policies or objectives. This term includes the state universities and colleges
and the monetary authority of the State.

(13) "Government-owned or controlled corporation" refers to any agency organized as a stock or non-stock corporation,
vested with functions relating to public needs whether governmental or proprietary in nature, and owned by the
Government directly or through its instrumentalities either wholly, or, where applicable as in the case of stock
corporations, to the extent of at least fifty-one (51) per cent of its capital stock: Provided, That government-owned or
controlled corporations may be further categorized by the Department of the Budget, the Civil Service Commission, and
the Commission on Audit for purposes of the exercise and discharge of their respective powers, functions and
responsibilities with respect to such corporations.

Assuming for the sake of argument that the BSP ceases to be owned or controlled by the government because of reduction
of the number of representatives of the government in the BSP Board, it does not follow that it also ceases to be a
government instrumentality as it still retains all the characteristics of the latter as an attached agency of the DECS under
the Administrative Code. Vesting corporate powers to an attached agency or instrumentality of the government is not
constitutionally prohibited and is allowed by the above-mentioned provisions of the Civil Code and the 1987
Administrative Code.

Economic Viability and Ownership and Control Tests Inapplicable to Public Corporations

As presently constituted, the BSP still remains an instrumentality of the national government. It is a public corporation
created by law for a public purpose, attached to the DECS pursuant to its Charter and the Administrative Code of 1987. It
is not a private corporation which is required to be owned or controlled by the government and be economically viable to
justify its existence under a special law.

The dissent of Justice Carpio also submits that by recognizing a new class of public corporation(s) created by special charter
that will not be subject to the test of economic viability, the constitutional provision will be circumvented.

However, a review of the Record of the 1986 Constitutional Convention reveals the intent of the framers of the highest
law of our land to distinguish between government corporations performing governmental functions and corporations
involved in business or proprietary functions:
THE PRESIDENT. Commissioner Foz is recognized.

MR. FOZ. Madam President, I support the proposal to insert ECONOMIC VIABILITY as one of the grounds for organizing
government corporations. x x x.

MR. OPLE. Madam President, the reason for this concern is really that when the government creates a corporation, there
is a sense in which this corporation becomes exempt from the test of economic performance. We know what happened
in the past. If a government corporation loses, then it makes its claim upon the taxpayers money through new equity
infusions from the government and what is always invoked is the common good. x x x

Therefore, when we insert the phrase ECONOMIC VIABILITY together with the common good, this becomes a restraint on
future enthusiasts for state capitalism to excuse themselves from the responsibility of meeting the market test so that
they become viable. x x x.

xxxx

THE PRESIDENT. Commissioner Quesada is recognized.

MS. QUESADA. Madam President, may we be clarified by the committee on what is meant by economic viability?
THE PRESIDENT. Please proceed.

MR. MONSOD. Economic viability normally is determined by cost-benefit ratio that takes into consideration all benefits,
including economic external as well as internal benefits. These are what they call externalities in economics, so that these
are not strictly financial criteria. Economic viability involves what we call economic returns or benefits of the country that
are not quantifiable in financial terms. x x x.

xxxx

MS. QUESADA. So, would this particular formulation now really limit the entry of government corporations into activities
engaged in by corporations?

MR. MONSOD. Yes, because it is also consistent with the economic philosophy that this Commission approved that
there should be minimum government participation and intervention in the economy.

MS. QUESDA. Sometimes this Commission would just refer to Congress to provide the particular requirements when the
government would get into corporations. But this time around, we specifically mentioned economic viability. x x x.

MR. VILLEGAS. Commissioner Ople will restate the reason for his introducing that amendment.

MR. OPLE. I am obliged to repeat what I said earlier in moving for this particular amendment jointly with Commissioner
Foz. During the past three decades, there had been a proliferation of government corporations, very few of which have
succeeded, and many of which are now earmarked by the Presidential Reorganization Commission for liquidation because
they failed the economic test. x x x.

xxxx

MS. QUESADA. But would not the Commissioner say that the reason why many of the government-owned or controlled
corporations failed to come up with the economic test is due to the management of these corporations, and not the idea
itself of government corporations? It is a problem of efficiency and effectiveness of management of these corporations
which could be remedied, not by eliminating government corporations or the idea of getting into state-owned
corporations, but improving management which our technocrats should be able to do, given the training and the
experience.

MR. OPLE. That is part of the economic viability, Madam President.

MS. QUESADA. So, is the Commissioner saying then that the Filipinos will benefit more if these government-controlled
corporations were given to private hands, and that there will be more goods and services that will be affordable and within
the reach of the ordinary citizens?

MR. OPLE. Yes. There is nothing here, Madam President, that will prevent the formation of a government corporation
in accordance with a special charter given by Congress. However, we are raising the standard a little bit so that, in the
future, corporations established by the government will meet the test of the common good but within that framework
we should also build a certain standard of economic viability.

xxxx

THE PRESIDENT. Commissioner Padilla is recognized.

MR. PADILLA. This is an inquiry to the committee. With regard to corporations created by a special charter for government-
owned or controlled corporations, will these be in the pioneer fields or in places where the private enterprise does not or
cannot enter? Or is this so general that these government corporations can compete with private corporations organized
under a general law?

MR. MONSOD. Madam President, x x x. There are two types of government corporations those that are involved
in performing governmental functions, like garbage disposal, Manila waterworks, and so on; and those government
corporations that are involved in business functions. As we said earlier, there are two criteria that should be followed
for corporations that want to go into business. First is for government corporations to first prove that they can be efficient
in the areas of their proper functions. This is one of the problems now because they go into all kinds of activities but are
not even efficient in their proper functions. Secondly, they should not go into activities that the private sector can do
better.

MR. PADILLA. There is no question about corporations performing governmental functions or functions that are
impressed with public interest. But the question is with regard to matters that are covered, perhaps not exhaustively,
by private enterprise. It seems that under this provision the only qualification is economic viability and common good,
but shall government, through government-controlled corporations, compete with private enterprise?

MR. MONSOD. No, Madam President. As we said, the government should not engage in activities that private enterprise
is engaged in and can do better. x x x.[56] (Emphases supplied.)

Thus, the test of economic viability clearly does not apply to public corporations dealing with governmental functions, to
which category the BSP belongs. The discussion above conveys the constitutional intent not to apply this constitutional
ban on the creation of public corporations where the economic viability test would be irrelevant. The said test would only
apply if the corporation is engaged in some economic activity or business function for the government.

It is undisputed that the BSP performs functions that are impressed with public interest. In fact, during the consideration
of the Senate Bill that eventually became Republic Act No. 7278, which amended the BSP Charter, one of the bills sponsors,
Senator Joey Lina, described the BSP as follows:

Senator Lina. Yes, I can only think of two organizations involving the masses of our youth, Mr. President, that should be
given this kind of a privilege the Boy Scouts of the Philippines and the Girl Scouts of the Philippines. Outside of these two
groups, I do not think there are other groups similarly situated.

The Boy Scouts of the Philippines has a long history of providing value formation to our young, and considering how
huge the population of the young people is, at this point in time, and also considering the importance of having an
organization such as this that will inculcate moral uprightness among the young people, and further considering that
the development of these young people at that tender age of seven to sixteen is vital in the development of the country
producing good citizens, I believe that we can make an exception of the Boy Scouting movement of the Philippines from
this general prohibition against providing tax exemption and privileges. [57]

Furthermore, this Court cannot agree with the dissenting opinion which equates the changes introduced by Republic Act
No. 7278 to the BSP Charter as clear manifestation of the intent of Congress to return the BSP to the private sector. It was
not the intent of Congress in enacting Republic Act No. 7278 to give up all interests in this basic youth organization, which
has been its partner in forming responsible citizens for decades.
In fact, as may be seen in the deliberation of the House Bills that eventually resulted to Republic Act No. 7278, Congress
worked closely with the BSP to rejuvenate the organization, to bring it back to its former glory reached under its original
charter, Commonwealth Act No. 111, and to correct the perceived ills introduced by the amendments to its Charter under
Presidential Decree No. 460. The BSP suffered from low morale and decrease in number because the Secretaries of the
different departments in government who were too busy to attend the meetings of the BSPs National Executive Board
(the Board) sent representatives who, as it turned out, changed from meeting to meeting. Thus, the Scouting Councils
established in the provinces and cities were not in touch with what was happening on the national level, but they were
left to implement what was decided by the Board. [58]

A portion of the legislators discussion is quoted below to clearly show their intent:

HON. DEL MAR. x x x I need not mention to you the value and the tremendous good that the Boy Scout Movement has
done not only for the youth in particular but for the country in general. And that is why, if we look around, our past and
present national leaders, prominent men in the various fields of endeavor, public servants in government offices, and
civic leaders in the communities all over the land, and not only in our country but all over the world many if not most
of them have at one time or another been beneficiaries of the Scouting Movement. And so, it is along this line, Mr.
Chairman, that we would like to have the early approval of this measure if only to pay back what we owe much to the
Scouting Movement. Now, going to the meat of the matter, Mr. Chairman, if I may just the Scouting Movement was
enacted into law in October 31, 1936 under Commonwealth Act No. 111. x x x [W]e were acknowledged as the third
biggest scouting organization in the world x x x. And to our mind, Mr. Chairman, this erratic growth and this decrease in
membership [number] is because of the bad policy measures that were enunciated with the enactment or promulgation
by the President before of Presidential Decree No. 460 which we feel is the culprit of the ills that is flagging the Boy Scout
Movement today. And so, this is specifically what we are attacking, Mr. Chairman, the disenfranchisement of the National
Council in the election of the national board. x x x. And so, this is what we would like to be appraised of by the officers of
the Boy [Scouts] of the Philippines whom we are also confident, have the best interest of the Boy Scout Movement at
heart and it is in this spirit, Mr. Chairman, that we see no impediment towards working together, the Boy Scout of the
Philippines officers working together with the House of Representatives in coming out with a measure that will put back
the vigor and enthusiasm of the Boy Scout Movement. x x x.[59] (Emphasis ours.)

The following is another excerpt from the discussion on the House version of the bill, in the Committee on Government
Enterprises:

HON. AQUINO: x x x Well, obviously, the two bills as well as the previous laws that have created the Boy Scouts of the
Philippines did not provide for any direct government support by way of appropriation from the national budget to support
the activities of this organization. The point here is, and at the same time they have been subjected to a governmental
intervention, which to their mind has been inimical to the objectives and to the institution per se, that is why they are
seeking legislative fiat to restore back the original mandate that they had under Commonwealth Act 111. Such having
been the experience in the hands of government, meaning, there has been negative interference on their part and
inasmuch as their mandate is coming from a legislative fiat, then shouldnt it be, this rhetorical question, shouldnt it be
better for this organization to seek a mandate from, lets say, the government the Corporation Code of the Philippines
and register with the SEC as non-profit non-stock corporation so that government intervention could be very very
minimal. Maybe thats a rhetorical question, they may or they may not answer, ano. I dont know what would be the benefit
of a charter or a mandate being provided for by way of legislation versus a registration with the SEC under the Corporation
Code of the Philippines inasmuch as they dont get anything from the government anyway insofar as direct funding. In fact,
the only thing that they got from government was intervention in their affairs. Maybe we can solicit some commentary
comments from the resource persons. Incidentally, dont take that as an objection, Im not objecting. Im all for the
objectives of these two bills. It just occurred to me that since you have had very bad experience in the hands of government
and you will always be open to such possible intervention even in the future as long as you have a legislative mandate or
your mandate or your charter coming from legislative action.

xxxx

MR. ESCUDERO: Mr. Chairman, there may be a disadvantage if the Boy Scouts of the Philippines will be required to
register with the SEC. If we are registered with the SEC, there could be a danger of proliferation of scout organization.
Anybody can organize and then register with the SEC. If there will be a proliferation of this, then the organization will lose
control of the entire organization. Another disadvantage, Mr. Chairman, anybody can file a complaint in the SEC against
the Boy Scouts of the Philippines and the SEC may suspend the operation or freeze the assets of the organization and
hamper the operation of the organization. I dont know, Mr. Chairman, how you look at it but there could be a danger for
anybody filing a complaint against the organization in the SEC and the SEC might suspend the registration permit of the
organization and we will not be able to operate.

HON. AQUINO: Well, that I think would be a problem that will not be exclusive to corporations registered with the SEC
because even if you are government corporation, court action may be taken against you in other judicial bodies because
the SEC is simply another quasi-judicial body. But, I think, the first point would be very interesting, the first point that
you raised. In effect, what you are saying is that with the legislative mandate creating your charter, in effect, you have
been given some sort of a franchise with this movement.

MR. ESCUDERO: Yes.

HON. AQUINO: Exclusive franchise of that movement?
MR. ESCUDERO: Yes.
HON. AQUINO: Well, thats very well taken so I will proceed with other issues, Mr. Chairman. x x x.[60] (Emphases added.)

Therefore, even though the amended BSP charter did away with most of the governmental presence in the BSP Board,
this was done to more strongly promote the BSPs objectives, which were not supported under Presidential Decree No.
460. The BSP objectives, as pointed out earlier, are consistent with the public purpose of the promotion of the well-being
of the youth, the future leaders of the country. The amendments were not done with the view of changing the character
of the BSP into a privatized corporation.The BSP remains an agency attached to a department of the government, the
DECS, and it was not at all stripped of its public character.

The ownership and control test is likewise irrelevant for a public corporation like the BSP. To reiterate, the relationship of
the BSP, an attached agency, to the government, through the DECS, is defined in the Revised Administrative Code of
1987. The BSP meets the minimum statutory requirement of an attached government agency as the DECS Secretary sits
at the BSP Board ex officio, thus facilitating the policy and program coordination between the BSP and the DECS.
Requisites for Declaration of Unconstitutionality Not Met in this Case

The dissenting opinion of Justice Carpio improperly raised the issue of unconstitutionality of certain provisions of the BSP
Charter. Even if the parties were asked to Comment on the validity of the BSP charter by the Court, this alone does not
comply with the requisites for judicial review, which were clearly set forth in a recent case:

When questions of constitutional significance are raised, the Court can exercise its power of judicial review only if the
following requisites are present: (1) the existence of an actual and appropriate case; (2) the existence of personal and
substantial interest on the part of the party raising the constitutional question; (3) recourse to judicial review is made
at the earliest opportunity; and (4) the constitutional question is the lis mota of the case.[61] (Emphasis added.)
Thus, when it comes to the exercise of the power of judicial review, the constitutional issue should be the very lis mota,
or threshold issue, of the case, and that it should be raised by either of the parties. These requirements would be ignored
under the dissents rather overreaching view of how this case should have been decided. True, it was the Court that asked
the parties to comment, but the Court cannot be the one to raise a constitutional issue. Thus, the Court chooses to once
more exhibit restraint in the exercise of its power to pass upon the validity of a law.

Re: the COAs Jurisdiction

Regarding the COAs jurisdiction over the BSP, Section 8 of its amended charter allows the BSP to receive contributions or
donations from the government. Section 8 reads:
Section 8. Any donation or contribution which from time to time may be made to the Boy Scouts of the Philippines by
the Government or any of its subdivisions, branches, offices, agencies or instrumentalities shall be expended by the
Executive Board in pursuance of this Act.

The sources of funds to maintain the BSP were identified before the House Committee on Government Enterprises while
the bill was being deliberated, and the pertinent portion of the discussion is quoted below:

MR. ESCUDERO. Yes, Mr. Chairman. The question is the sources of funds of the organization. First, Mr. Chairman, the Boy
Scouts of the Philippines do not receive annual allotment from the government. The organization has to raise its own
funds through fund drives and fund campaigns or fund raising activities. Aside from this, we have some revenue producing
projects in the organization that gives us funds to support the operation. x x x From time to time, Mr. Chairman, when we
have special activities we request for assistance or financial assistance from government agencies, from private business
and corporations, but this is only during special activities that the Boy Scouts of the Philippines would conduct during the
year. Otherwise, we have to raise our own funds to support the organization.[62]

The nature of the funds of the BSP and the COAs audit jurisdiction were likewise brought up in said congressional
deliberations, to wit:

HON. AQUINO: x x x Insofar as this organization being a government created organization, in fact, a government
corporation classified as such, are your funds or your finances subjected to the COA audit?

MR. ESCUDERO: Mr. Chairman, we are not. Our funds is not subjected. We dont fall under the jurisdiction of the COA.
HON. AQUINO: All right, but before were you?
MR. ESCUDERO: No, Mr. Chairman.
MR. JESUS: May I? As historical backgrounder, Commonwealth Act 111 was written by then Secretary Jorge Vargas and
before and up to the middle of the Martial Law years, the BSP was receiving a subsidy in the form of an annual a one draw
from the Sweepstakes. And, this was the case also with the Girl Scouts at the Anti-TB, but then this was and the Boy Scouts
then because of this funding partly from government was being subjected to audit in the contributions being made in
the part of the Sweepstakes. But this was removed later during the Martial Law years with the creation of the Human
Settlements Commission. So the situation right now is that the Boy Scouts does not receive any funding from government,
but then in the case of the local councils and this legislative charter, so to speak, enables the local councils even the
national headquarters in view of the provisions in the existing law to receive donations from the government or any of its
instrumentalities, which would be difficult if the Boy Scouts is registered as a private corporation with the Securities and
Exchange Commission. Government bodies would be estopped from making donations to the Boy Scouts, which at present
is not the case because there is the Boy Scouts charter, this Commonwealth Act 111 as amended by PD 463.

xxxx
HON. AMATONG: Mr. Chairman, in connection with that.

THE CHAIRMAN: Yeah, Gentleman from Zamboanga.

HON. AMATONG: There is no auditing being made because theres no money put in the organization, but how about
donated funds to this organization? What are the remedies of the donors of how will they know how their money are
being spent?

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

THE CHAIRMAN: Yes, gentleman.

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

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

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

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

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

SO ORDERED.

EN BANC
G.R. No. L-28089 October 25, 1967
BARA LIDASAN, petitioner,
vs.
COMMISSION ON ELECTIONS, respondent.
Suntay for petitioner.
Barrios and Fule for respondent.
SANCHEZ, J.:
The question initially presented to the Commission on Elections, 1 is this: Is Republic Act 4790, which is entitled "An Act
Creating the Municipality of Dianaton in the Province of Lanao del Sur", but which includes barrios located in another
province Cotabato to be spared from attack planted upon the constitutional mandate that "No bill which may be
enacted into law shall embrace more than one subject which shall be expressed in the title of the bill"? Comelec's answer
is in the affirmative. Offshoot is the present original petition for certiorari and prohibition.

On June 18, 1966, the Chief Executive signed into law House Bill 1247, known as Republic Act 4790, now in dispute. The
body of the statute, reproduced in haec verba, reads:

Sec. 1. Barrios Togaig, Madalum, Bayanga, Langkong, Sarakan, Kat-bo, Digakapan, Magabo, Tabangao, Tiongko, Colodan,
Kabamakawan, Kapatagan, Bongabong, Aipang, Dagowan, Bakikis, Bungabung, Losain, Matimos and Magolatung, in the
Municipalities of Butig and Balabagan, Province of Lanao del Sur, are separated from said municipalities and constituted
into a distinct and independent municipality of the same province to be known as the Municipality of Dianaton, Province
of Lanao del Sur. The seat of government of the municipality shall be in Togaig.

Sec. 2. The first mayor, vice-mayor and councilors of the new municipality shall be elected in the nineteen hundred sixty-
seven general elections for local officials.

Sec. 3. This Act shall take effect upon its approval.

It came to light later that barrios Togaig and Madalum just mentioned are within the municipality of Buldon, Province of
Cotabato, and that Bayanga, Langkong, Sarakan, Kat-bo, Digakapan, Magabo, Tabangao, Tiongko, Colodan and
Kabamakawan are parts and parcel of another municipality, the municipality of Parang, also in the Province of
Cotabato and not of Lanao del Sur.

Prompted by the coming elections, Comelec adopted its resolution of August 15, 1967, the pertinent portions of which
are:

For purposes of establishment of precincts, registration of voters and for other election purposes, the Commission
RESOLVED that pursuant to RA 4790, the new municipality of Dianaton, Lanao del Sur shall comprise the barrios of
Kapatagan, Bongabong, Aipang, Dagowan, Bakikis, Bungabung, Losain, Matimos, and Magolatung situated in the
municipality of Balabagan, Lanao del Sur, the barrios of Togaig and Madalum situated in the municipality of Buldon,
Cotabato, the barrios of Bayanga, Langkong, Sarakan, Kat-bo, Digakapan, Magabo, Tabangao, Tiongko, Colodan and
Kabamakawan situated in the municipality of Parang, also of Cotabato.

Doubtless, as the statute stands, twelve barrios in two municipalities in the province of Cotabato are transferred to
the province of Lanao del Sur. This brought about a change in the boundaries of the two provinces.

Apprised of this development, on September 7, 1967, the Office of the President, through the Assistant Executive
Secretary, recommended to Comelec that the operation of the statute be suspended until "clarified by correcting
legislation."

Comelec, by resolution of September 20, 1967, stood by its own interpretation, declared that the statute "should be
implemented unless declared unconstitutional by the Supreme Court."

This triggered the present original action for certiorari and prohibition by Bara Lidasan, a resident and taxpayer of the
detached portion of Parang, Cotabato, and a qualified voter for the 1967 elections. He prays that Republic Act 4790 be
declared unconstitutional; and that Comelec's resolutions of August 15, 1967 and September 20, 1967 implementing the
same for electoral purposes, be nullified.

1. Petitioner relies upon the constitutional requirement aforestated, that "[n]o bill which may be enacted into law shall
embrace more than one subject which shall be expressed in the title of the bill." 2
It may be well to state, right at the outset, that the constitutional provision contains dual limitations upon legislative
power. First. Congress is to refrain from conglomeration, under one statute, of heterogeneous subjects. Second. The title
of the bill is to be couched in a language sufficient to notify the legislators and the public and those concerned of the
import of the single subject thereof.

Of relevance here is the second directive. The subject of the statute must be "expressed in the title" of the bill. This
constitutional requirement "breathes the spirit of command." 3 Compliance is imperative, given the fact that the
Constitution does not exact of Congress the obligation to read during its deliberations the entire text of the bill. In fact, in
the case of House Bill 1247, which became Republic Act 4790, only its title was read from its introduction to its final
approval in the House of Representatives4 where the bill, being of local application, originated. 5

Of course, the Constitution does not require Congress to employ in the title of an enactment, language of such precision
as to mirror, fully index or catalogue all the contents and the minute details therein. It suffices if the title should serve the
purpose of the constitutional demand that it inform the legislators, the persons interested in the subject of the bill, and
the public, of the nature, scope and consequences of the proposed law and its operation. And this, to lead them to inquire
into the body of the bill, study and discuss the same, take appropriate action thereon, and, thus, prevent surprise or fraud
upon the legislators.6

In our task of ascertaining whether or not the title of a statute conforms with the constitutional requirement, the following,
we believe, may be taken as guidelines:

The test of the sufficiency of a title is whether or not it is misleading; and, which technical accuracy is not essential, and
the subject need not be stated in express terms where it is clearly inferable from the details set forth, a title which is so
uncertain that the average person reading it would not be informed of the purpose of the enactment or put on inquiry as
to its contents, or which is misleading, either in referring to or indicating one subject where another or different one is
really embraced in the act, or in omitting any expression or indication of the real subject or scope of the act, is bad.

xxx xxx xxx

In determining sufficiency of particular title its substance rather than its form should be considered, and the purpose of
the constitutional requirement, of giving notice to all persons interested, should be kept in mind by the court.7

With the foregoing principles at hand, we take a hard look at the disputed statute. The title "An Act Creating the
Municipality of Dianaton, in the Province of Lanao del Sur"8 projects the impression that solely the province of Lanao
del Sur is affected by the creation of Dianaton. Not the slightest intimation is there that communities in the adjacent
province of Cotabato are incorporated in this new Lanao del Sur town. The phrase "in the Province of Lanao del Sur," read
without subtlety or contortion, makes the title misleading, deceptive. For, the known fact is that the legislation has a two-
pronged purpose combined in one statute: (1) it creates the municipality of Dianaton purportedly from twenty-one barrios
in the towns of Butig and Balabagan, both in the province of Lanao del Sur; and (2) it also dismembers two municipalities
in Cotabato, a province different from Lanao del Sur.

The baneful effect of the defective title here presented is not so difficult to perceive. Such title did not inform the members
of Congress as to the full impact of the law; it did not apprise the people in the towns of Buldon and Parang in Cotabato
and in the province of Cotabato itself that part of their territory is being taken away from their towns and province and
added to the adjacent Province of Lanao del Sur; it kept the public in the dark as to what towns and provinces were actually
affected by the bill. These are the pressures which heavily weigh against the constitutionality of Republic Act 4790.

Respondent's stance is that the change in boundaries of the two provinces resulting in "the substantial diminution of
territorial limits" of Cotabato province is "merely the incidental legal results of the definition of the boundary" of the
municipality of Dianaton and that, therefore, reference to the fact that portions in Cotabato are taken away "need not be
expressed in the title of the law." This posture we must say but emphasizes the error of constitutional dimensions
in writing down the title of the bill. Transfer of a sizeable portion of territory from one province to another of necessity
involves reduction of area, population and income of the first and the corresponding increase of those of the other. This
is as important as the creation of a municipality. And yet, the title did not reflect this fact.

Respondent asks us to read Felwa vs. Salas, L-16511, October 29, 1966, as controlling here. The Felwa case is not in focus.
For there, the title of the Act (Republic Act 4695) reads: "An Act Creating the Provinces of Benguet, Mountain Province,
Ifugao, and Kalinga-Apayao." That title was assailed as unconstitutional upon the averment that the provisions of the law
(Section, 8 thereof) in reference to the elective officials of the provinces thus created, were not set forth in the title of the
bill. We there ruled that this pretense is devoid of merit "for, surely, an Act creating said provinces must be expected to
provide for the officers who shall run the affairs thereof" which is "manifestly germane to the subject" of the legislation,
as set forth in its title. The statute now before us stands altogether on a different footing. The lumping together of barrios
in adjacent but separate provinces under one statute is neither a natural nor logical consequence of the creation of the
new municipality of Dianaton. A change of boundaries of the two provinces may be made without necessarily creating a
new municipality and vice versa.

As we canvass the authorities on this point, our attention is drawn to Hume vs. Village of Fruitport, 219 NW 648, 649.
There, the statute in controversy bears the title "An Act to Incorporate the Village of Fruitport, in the County of Muskegon."
The statute, however, in its section 1 reads: "The people of the state of Michigan enact, that the following described
territory in the counties of Muskegon and Ottawa Michigan, to wit: . . . be, and the same is hereby constituted a village
corporate, by the name of the Village of Fruitport." This statute was challenged as void by plaintiff, a resident of Ottawa
county, in an action to restraint the Village from exercising jurisdiction and control, including taxing his lands. Plaintiff
based his claim on Section 20, Article IV of the Michigan State Constitution, which reads: "No law shall embrace more than
one object, which shall be expressed in its title." The Circuit Court decree voided the statute and defendant appealed. The
Supreme Court of Michigan voted to uphold the decree of nullity. The following, said in Hume, may well apply to this case:

It may be that words, "An act to incorporate the village of Fruitport," would have been a sufficient title, and that the words,
"in the county of Muskegon" were unnecessary; but we do not agree with appellant that the words last quoted may, for
that reason, be disregarded as surplusage.

. . . Under the guise of discarding surplusage, a court cannot reject a part of the title of an act for the purpose of saving
the act. Schmalz vs. Woody, 56 N.J. Eq. 649, 39 A. 539.

A purpose of the provision of the Constitution is to "challenge the attention of those affected by the act to its
provisions." Savings Bank vs. State of Michigan, 228 Mich. 316, 200 NW 262.

The title here is restrictive. It restricts the operation of the act of Muskegon county. The act goes beyond the restriction. As
was said in Schmalz vs. Wooly, supra: "The title is erroneous in the worst degree, for it is misleading."9

Similar statutes aimed at changing boundaries of political subdivisions, which legislative purpose is not expressed in the
title, were likewise declared unconstitutional."10

We rule that Republic Act 4790 is null and void.

2. Suggestion was made that Republic Act 4790 may still be salvaged with reference to the nine barrios in the municipalities
of Butig and Balabagan in Lanao del Sur, with the mere nullification of the portion thereof which took away the twelve
barrios in the municipalities of Buldon and Parang in the other province of Cotabato. The reasoning advocated is that the
limited title of the Act still covers those barrios actually in the province of Lanao del Sur.

We are not unmindful of the rule, buttressed on reason and of long standing, that where a portion of a statute is rendered
unconstitutional and the remainder valid, the parts will be separated, and the constitutional portion upheld. Black,
however, gives the exception to this rule, thus:

. . . But when the parts of the statute are so mutually dependent and connected, as conditions, considerations,
inducements, or compensations for each other, as to warrant a belief that the legislature intended them as a whole, and
that if all could not be carried into effect, the legislature would not pass the residue independently, then, if some parts
are unconstitutional, all the provisions which are thus dependent, conditional, or connected, must fall with them, 11

In substantially similar language, the same exception is recognized in the jurisprudence of this Court, thus:

The general rule is that where part of a statute is void, as repugnant to the Organic Law, while another part is valid, the
valid portion if separable from the invalid, may stand and be enforced. But in order to do this, the valid portion must be
so far independent of the invalid portion that it is fair to presume that the Legislature would have enacted it by itself if
they had supposed that they could not constitutionally enact the other. . . Enough must remain to make a complete,
intelligible, and valid statute, which carries out the legislative intent. . . . The language used in the invalid part of the statute
can have no legal force or efficacy for any purpose whatever, and what remains must express the legislative will
independently of the void part, since the court has no power to legislate, . . . .12

Could we indulge in the assumption that Congress still intended, by the Act, to create the restricted area of nine barrios in
the towns of Butig and Balabagan in Lanao del Sur into the town of Dianaton, if the twelve barrios in the towns of Buldon
and Parang, Cotabato were to be excluded therefrom? The answer must be in the negative.

Municipal corporations perform twin functions. Firstly. They serve as an instrumentality of the State in carrying out the
functions of government. Secondly. They act as an agency of the community in the administration of local affairs. It is in
the latter character that they are a separate entity acting for their own purposes and not a subdivision of the State. 13

Consequently, several factors come to the fore in the consideration of whether a group of barrios is capable of maintaining
itself as an independent municipality. Amongst these are population, territory, and income. It was apparently these same
factors which induced the writing out of House Bill 1247 creating the town of Dianaton. Speaking of the original twenty-
one barrios which comprise the new municipality, the explanatory note to House Bill 1247, now Republic Act 4790, reads:

The territory is now a progressive community; the aggregate population is large; and the collective income is sufficient to
maintain an independent municipality.

This bill, if enacted into law, will enable the inhabitants concerned to govern themselves and enjoy the blessings of
municipal autonomy.

When the foregoing bill was presented in Congress, unquestionably, the totality of the twenty-one barrios not nine
barrios was in the mind of the proponent thereof. That this is so, is plainly evident by the fact that the bill itself,
thereafter enacted into law, states that the seat of the government is in Togaig, which is a barrio in the municipality of
Buldon in Cotabato. And then the reduced area poses a number of questions, thus: Could the observations as to
progressive community, large aggregate population, collective income sufficient to maintain an independent municipality,
still apply to a motley group of only nine barrios out of the twenty-one? Is it fair to assume that the inhabitants of the said
remaining barrios would have agreed that they be formed into a municipality, what with the consequent duties and
liabilities of an independent municipal corporation? Could they stand on their own feet with the income to be derived in
their community? How about the peace and order, sanitation, and other corporate obligations? This Court may not supply
the answer to any of these disturbing questions. And yet, to remain deaf to these problems, or to answer them in the
negative and still cling to the rule on separability, we are afraid, is to impute to Congress an undeclared will. With the
known premise that Dianaton was created upon the basic considerations of progressive community, large aggregate
population and sufficient income, we may not now say that Congress intended to create Dianaton with only nine of the
original twenty-one barrios, with a seat of government still left to be conjectured. For, this unduly stretches judicial
interpretation of congressional intent beyond credibility point. To do so, indeed, is to pass the line which circumscribes
the judiciary and tread on legislative premises. Paying due respect to the traditional separation of powers, we may not
now melt and recast Republic Act 4790 to read a Dianaton town of nine instead of the originally intended twenty-one
barrios. Really, if these nine barrios are to constitute a town at all, it is the function of Congress, not of this Court, to spell
out that congressional will.

Republic Act 4790 is thus indivisible, and it is accordingly null and void in its totality. 14
3. There remains for consideration the issue raised by respondent, namely, that petitioner has no substantial legal interest
adversely affected by the implementation of Republic Act 4790. Stated differently, respondent's pose is that petitioner is
not the real party in interest.

Here the validity of a statute is challenged on the ground that it violates the constitutional requirement that the subject
of the bill be expressed in its title. Capacity to sue, therefore, hinges on whether petitioner's substantial rights or interests
are impaired by lack of notification in the title that the barrio in Parang, Cotabato, where he is residing has been
transferred to a different provincial hegemony.

The right of every citizen, taxpayer and voter of a community affected by legislation creating a town to ascertain that the
law so created is not dismembering his place of residence "in accordance with the Constitution" is recognized in this
jurisdiction.15

Petitioner is a qualified voter. He expects to vote in the 1967 elections. His right to vote in his own barrio before it was
annexed to a new town is affected. He may not want, as is the case here, to vote in a town different from his actual
residence. He may not desire to be considered a part of hitherto different communities which are fanned into the new
town; he may prefer to remain in the place where he is and as it was constituted, and continue to enjoy the rights and
benefits he acquired therein. He may not even know the candidates of the new town; he may express a lack of desire to
vote for anyone of them; he may feel that his vote should be cast for the officials in the town before dismemberment.
Since by constitutional direction the purpose of a bill must be shown in its title for the benefit, amongst others, of the
community affected thereby,16 it stands to reason to say that when the constitutional right to vote on the part of any
citizen of that community is affected, he may become a suitor to challenge the constitutionality of the Act as passed by
Congress.

For the reasons given, we vote to declare Republic Act 4790 null and void, and to prohibit respondent Commission from
implementing the same for electoral purposes.

No costs allowed. So ordered.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., Zaldivar, Castro and Angeles, JJ., concur.

EN BANC

G.R. No. L-22766 August 30, 1968

SURIGAO ELECTRIC, CO., INC. and ARTURO LUMANLAN, SR., petitioners,

vs.
MUNICIPALITY OF SURIGAO and HON. PUBLIC SERVICE COMMISSION, respondents.

David G. Nitafan for petitioners.

Provincial Fiscal Bernardo Ll. Salas for respondent Municipality of Surigao.
Office of the Solicitor General for respondent Public Service Commission.

FERNANDO, J.:

On June 18, 1960, Congress further amended the Public Service Act, one of the changes introduced doing away with the
requirement of a certificate of public convenience and necessity from the Public Service Commission for "public services
owned or operated by government entities or government-owned or controlled corporations," but at the same time
affirming its power of regulation, 1 more specifically as set forth in the next section of the law, which while exempting
public services owned or operated by any instrumentality of the government or any government-owned or controlled
corporations from its supervision, jurisdiction and control stops short of including "the fixing of rates." 2

In this petition for review, a case of first impression, petitioner Surigao Electric Co., Inc., a legislative franchise holder, and
petitioner Arturo Lumanlan to whom, on February 16, 1962, the rights and privileges of the former as well as its plant and
facilities were transferred, challenge the validity of the order of respondent Public Service Commission, dated July 11,
1963, wherein it held that it had "no other alternative but to approve as [it did approve] the tentative schedule of rates
submitted by the applicant," the other respondent herein, the Municipality of Surigao. 3

In the above order, the issue, according to respondent Commission, "boils down to whether or not a municipal
government can directly maintain and operate an electric plant without obtaining a specific franchise for the purpose and
without a certificate of public convenience and necessity duly issued by the Public Service Commission." 4 Citing the above
amendments introduced by Republic Act No. 2677, respondent Commission answered the question thus: "A municipal
government or a municipal corporation such as the Municipality of Surigao is a government entity recognized, supported
and utilized by the National Government as a part of its government machinery and functions; a municipal government
actually functions as an extension of the national government and, therefore, it is an instrumentality of the latter; and by
express provisions of Section 14(e) of Act 2677, an instrumentality of the national government is exempted from the
jurisdiction of the PSC except with respect to the fixing of rates. This exemption is even clearer in Section 13(a)." 5

The above formulation of respondent Commission could be worded differently. There is need for greater precision as well
as further elaboration. Its conclusion, however, can stand the test of scrutiny. We sustain the Public Service Commission.

The question involved is one of statutory interpretation. We have to ascertain the intent of Congress in introducing the
above amendments, more specifically, in eliminating the requirement of the certificate of public convenience and
necessity being obtained by government entities, or by government-owned or controlled corporations operating public
services. Here, the Municipality of Surigao is not a government-owned or controlled corporation. It cannot be said,
however, that it is not a government entity.

As early as 1916, in Mendoza v. de Leon,6 there has been a recognition by this Court of the dual character of a municipal
corporation, one as governmental, being a branch of the general administration of the state, and the other as quasi-private
and corporate. A well-known authority, Dillon, was referred to by us to stress the undeniable fact that "legislative and
governmental powers" are "conferred upon a municipality, the better to enable it to aid a state in properly governing that
portion of its people residing within its municipality, such powers [being] in their nature public, ..." 7 As was emphasized
by us in the Mendoza decision: "Governmental affairs do not lose their governmental character by being delegated to the
municipal governments. Nor does the fact that such duties are performed by officers of the municipality which, for
convenience, the state allows the municipality to select, change their character. To preserve the peace, protect the morals
and health of the community and so on is to administer government, whether it be done by the central government itself
or is shifted to a local organization."8

It would, therefore, be to erode the term "government entities" of its meaning if we are to reverse the Public Service
Commission and to hold that a municipality is to be considered outside its scope. It may be admitted that there would be
no ambiguity at all had the term "municipal corporations" been employed. Our function, however, is to put meaning to
legislative words, not to denude them of their contents. They may be at times, as Cohen pointed out, frail vessels in which
to embark legislative hopes, but we do not, just because of that, allow them to disappear perpetually from sight to find
eternal slumber in the deep. It would be far from manifesting fidelity to the judicial task of construing statutes if we were
to consider the order under review as a failure to abide by what the law commands.

The above construction gives significance to every word of the statute. It makes the entire scheme harmonious. Moreover,
the conclusion to which we are thus led is reinforced by a manifestation of public policy as expressed in a legislative act
of well-nigh contemporaneous vintage. We refer to the Local Autonomy Act, 9 approved a year earlier. It would be to
impute to Congress a desire not to extend further but to cut short what the year before it considered a laudatory scheme
to enlarge the scope of municipal power, if the amendatory act now under scrutiny were to be so restrictively construed.
Municipal corporations should not be excluded from the operation thereof.

There would be no warrant for such a view. Logic and common sense would be affronted by such a conclusion, let alone
the sense of esteem which under the theory of separation of powers is owed a coordinate branch. Again, this is one
instance where assuming the ambiguity of the words employed in a statute, its overriding principle, to paraphrase Holmes,
fixes the reach of statutory language.

With the view we thus take of the amendatory statute, the errors assigned by petitioner, which would seek to fasten,
mistakenly to our mind, an unwarranted restriction to the amendatory language of Republic Act No. 2677, need not be
passed upon.

An alleged error imputed to respondent Commission, however, needs further discussion. Petitioners seek refuge in the
legislative franchise granted them. 10 Whatever privilege may be claimed by petitioners cannot override the specific
constitutional restriction that no franchise or right shall be granted to any individual or corporation except under a
condition that it shall be subject to amendment, alteration or repeal by Congress. 11 Such amendment or alteration need
not be express; it may be implied from a latter act of general applicability, such as the one now under consideration.

Moreover, under a well-settled principle of American origin, one which upon the establishment of the Philippine
Government under American tutelage was adopted here and continued under our Constitution, no such franchise or right
can be availed of to defeat the proper exercise of the police power. An early expression of this view is found in the
leading American case of Charles River Bridge v. Warren Bridge, 12 an 1837 decision, the opinion being penned by Chief
Justice Taney: "The continued existence of a government would be of no great value, if by implications and presumptions
it was disarmed of the powers necessary to accomplish the ends of its creation; and the functions it was designed to
perform, transferred to the hands of privileged Corporations. .. While the rights of private property are sacredly guarded,
we must not forget that the community also have rights, and that the happiness and well-being of every citizen depend
on their faithful preservation." 13

Reference by petitioners to the statute providing the procedure for the taking over and operation by the government of
public utilities, 14 in their view "to further strengthen [their] contention", as to the commission of this alleged error is
unavailing, even if such statute were applicable, which it is not. In the language of their own brief: "This Act provides for
the procedure to be followed whenever the Government or any political subdivision thereof decides to acquire and
operate a public utility owned and operated by any individual or private corporation." 15What is to be regulated, therefore,
by this enactment is the exercise of eminent domain, which is a taking of private property for public use upon the payment
of just compensation. There is here no taking. There is here no appropriation. What was owned before by petitioners
continue to remain theirs. There is to be no transfer of ownership.

Rather, a municipal corporation, by virtue of Commonwealth Act No. 2677, may further promote community welfare by
itself engaging in supplying public services, without the need of a certificate of public convenience. If at all then, the
exercise of this governmental prerogative comes within the broad, well-nigh, undefined scope of the police power. It is
not here, of course, the ordinary case of restraint on property or liberty, by the imposition of a regulation. What the
amendatory act in effect accomplishes is to lend encouragement and support for the municipal corporation itself
undertaking an activity as a result of which, profits of a competing private firm would be adversely affected.

Clearly, then, the relevancy of the statute providing for the taking or operation of the government of public utilities,
appears, to put it at its mildest, far from clear. Petitioners' contention as to this alleged error being committed, therefore,
far from being strengthened by such a reference, suffers from a fate less auspicious.

No other alleged error committed need be considered.

WHEREFORE, the order of respondent Public Service Commission of July 11, 1963, as well as the order of February 7, 1964,
denying the motion for reconsideration, are affirmed. Costs against petitioners.
FIRST DIVISION

G.R. No. L-52179 April 8, 1991

MUNICIPALITY OF SAN FERNANDO, LA UNION, petitioner

vs.
HON. JUDGE ROMEO N. FIRME, JUANA RIMANDO-BANIA, IAUREANO BANIA, JR., SOR MARIETA BANIA, MONTANO
BANIA, ORJA BANIA, AND LYDIA R. BANIA, respondents.

Mauro C. Cabading, Jr. for petitioner.

Simeon G. Hipol for private respondent.

MEDIALDEA, J.:

This is a petition for certiorari with prayer for the issuance of a writ of preliminary mandatory injunction seeking the
nullification or modification of the proceedings and the orders issued by the respondent Judge Romeo N. Firme, in his
capacity as the presiding judge of the Court of First Instance of La Union, Second Judicial District, Branch IV, Bauang, La
Union in Civil Case No. 107-BG, entitled "Juana Rimando Bania, et al. vs. Macario Nieveras, et al." dated November 4,
1975; July 13, 1976; August 23,1976; February 23, 1977; March 16, 1977; July 26, 1979; September 7, 1979; November 7,
1979 and December 3, 1979 and the decision dated October 10, 1979 ordering defendants Municipality of San Fernando,
La Union and Alfredo Bislig to pay, jointly and severally, the plaintiffs for funeral expenses, actual damages consisting of
the loss of earning capacity of the deceased, attorney's fees and costs of suit and dismissing the complaint against the
Estate of Macario Nieveras and Bernardo Balagot.

The antecedent facts are as follows:

Petitioner Municipality of San Fernando, La Union is a municipal corporation existing under and in accordance with the
laws of the Republic of the Philippines. Respondent Honorable Judge Romeo N. Firme is impleaded in his official capacity
as the presiding judge of the Court of First Instance of La Union, Branch IV, Bauang, La Union. While private respondents
Juana Rimando-Bania, Laureano Bania, Jr., Sor Marietta Bania, Montano Bania, Orja Bania and Lydia R. Bania are
heirs of the deceased Laureano Bania Sr. and plaintiffs in Civil Case No. 107-Bg before the aforesaid court.

At about 7 o'clock in the morning of December 16, 1965, a collision occurred involving a passenger jeepney driven by
Bernardo Balagot and owned by the Estate of Macario Nieveras, a gravel and sand truck driven by Jose Manandeg and
owned by Tanquilino Velasquez and a dump truck of the Municipality of San Fernando, La Union and driven by Alfredo
Bislig. Due to the impact, several passengers of the jeepney including Laureano Bania Sr. died as a result of the injuries
they sustained and four (4) others suffered varying degrees of physical injuries.

On December 11, 1966, the private respondents instituted a compliant for damages against the Estate of Macario Nieveras
and Bernardo Balagot, owner and driver, respectively, of the passenger jeepney, which was docketed Civil Case No. 2183
in the Court of First Instance of La Union, Branch I, San Fernando, La Union. However, the aforesaid defendants filed a
Third Party Complaint against the petitioner and the driver of a dump truck of petitioner.

Thereafter, the case was subsequently transferred to Branch IV, presided over by respondent judge and was subsequently
docketed as Civil Case No. 107-Bg. By virtue of a court order dated May 7, 1975, the private respondents amended the
complaint wherein the petitioner and its regular employee, Alfredo Bislig were impleaded for the first time as defendants.
Petitioner filed its answer and raised affirmative defenses such as lack of cause of action, non-suability of the State,
prescription of cause of action and the negligence of the owner and driver of the passenger jeepney as the proximate
cause of the collision.

In the course of the proceedings, the respondent judge issued the following questioned orders, to wit:
(1) Order dated November 4, 1975 dismissing the cross-claim against Bernardo Balagot;

(2) Order dated July 13, 1976 admitting the Amended Answer of the Municipality of San Fernando, La Union and Bislig and
setting the hearing on the affirmative defenses only with respect to the supposed lack of jurisdiction;

(3) Order dated August 23, 1976 deferring there resolution of the grounds for the Motion to Dismiss until the trial;

(4) Order dated February 23, 1977 denying the motion for reconsideration of the order of July 13, 1976 filed by the
Municipality and Bislig for having been filed out of time;

(5) Order dated March 16, 1977 reiterating the denial of the motion for reconsideration of the order of July 13, 1976;

(6) Order dated July 26, 1979 declaring the case deemed submitted for decision it appearing that parties have not yet
submitted their respective memoranda despite the court's direction; and

(7) Order dated September 7, 1979 denying the petitioner's motion for reconsideration and/or order to recall prosecution
witnesses for cross examination.

On October 10, 1979 the trial court rendered a decision, the dispositive portion is hereunder quoted as follows:

IN VIEW OF ALL OF (sic) THE FOREGOING, judgment is hereby rendered for the plaintiffs, and defendants Municipality of
San Fernando, La Union and Alfredo Bislig are ordered to pay jointly and severally, plaintiffs Juana Rimando-Bania, Mrs.
Priscilla B. Surell, Laureano Bania Jr., Sor Marietta Bania, Mrs. Fe B. Soriano, Montano Bania, Orja Bania and Lydia B.
Bania the sums of P1,500.00 as funeral expenses and P24,744.24 as the lost expected earnings of the late Laureano
Bania Sr., P30,000.00 as moral damages, and P2,500.00 as attorney's fees. Costs against said defendants.

The Complaint is dismissed as to defendants Estate of Macario Nieveras and Bernardo Balagot.

SO ORDERED. (Rollo, p. 30)

Petitioner filed a motion for reconsideration and for a new trial without prejudice to another motion which was then
pending. However, respondent judge issued another order dated November 7, 1979 denying the motion for
reconsideration of the order of September 7, 1979 for having been filed out of time.

Finally, the respondent judge issued an order dated December 3, 1979 providing that if defendants municipality and Bislig
further wish to pursue the matter disposed of in the order of July 26, 1979, such should be elevated to a higher court in
accordance with the Rules of Court. Hence, this petition.

Petitioner maintains that the respondent judge committed grave abuse of discretion amounting to excess of jurisdiction
in issuing the aforesaid orders and in rendering a decision. Furthermore, petitioner asserts that while appeal of the
decision maybe available, the same is not the speedy and adequate remedy in the ordinary course of law.

On the other hand, private respondents controvert the position of the petitioner and allege that the petition is devoid of
merit, utterly lacking the good faith which is indispensable in a petition for certiorari and prohibition. (Rollo, p. 42.) In
addition, the private respondents stress that petitioner has not considered that every court, including respondent court,
has the inherent power to amend and control its process and orders so as to make them conformable to law and justice.
(Rollo, p. 43.)

The controversy boils down to the main issue of whether or not the respondent court committed grave abuse of discretion
when it deferred and failed to resolve the defense of non-suability of the State amounting to lack of jurisdiction in a motion
to dismiss.

In the case at bar, the respondent judge deferred the resolution of the defense of non-suability of the State amounting to
lack of jurisdiction until trial. However, said respondent judge failed to resolve such defense, proceeded with the trial and
thereafter rendered a decision against the municipality and its driver.
The respondent judge did not commit grave abuse of discretion when in the exercise of its judgment it arbitrarily failed to
resolve the vital issue of non-suability of the State in the guise of the municipality. However, said judge acted in excess of
his jurisdiction when in his decision dated October 10, 1979 he held the municipality liable for the quasi-delict committed
by its regular employee.

The doctrine of non-suability of the State is expressly provided for in Article XVI, Section 3 of the Constitution, to wit: "the
State may not be sued without its consent."

Stated in simple parlance, the general rule is that the State may not be sued except when it gives consent to be sued.
Consent takes the form of express or implied consent.

Express consent may be embodied in a general law or a special law. The standing consent of the State to be sued in case
of money claims involving liability arising from contracts is found in Act No. 3083. A special law may be passed to enable
a person to sue the government for an alleged quasi-delict, as in Merritt v. Government of the Philippine Islands (34 Phil
311). (see United States of America v. Guinto, G.R. No. 76607, February 26, 1990, 182 SCRA 644, 654.)

Consent is implied when the government enters into business contracts, thereby descending to the level of the other
contracting party, and also when the State files a complaint, thus opening itself to a counterclaim. (Ibid)

Municipal corporations, for example, like provinces and cities, are agencies of the State when they are engaged in
governmental functions and therefore should enjoy the sovereign immunity from suit. Nevertheless, they are subject to
suit even in the performance of such functions because their charter provided that they can sue and be sued.
(Cruz, Philippine Political Law, 1987 Edition, p. 39)

A distinction should first be made between suability and liability. "Suability depends on the consent of the state to be
sued, liability on the applicable law and the established facts. The circumstance that a state is suable does not necessarily
mean that it is liable; on the other hand, it can never be held liable if it does not first consent to be sued. Liability is not
conceded by the mere fact that the state has allowed itself to be sued. When the state does waive its sovereign immunity,
it is only giving the plaintiff the chance to prove, if it can, that the defendant is liable." (United States of America vs.
Guinto, supra, p. 659-660)

Anent the issue of whether or not the municipality is liable for the torts committed by its employee, the test of liability of
the municipality depends on whether or not the driver, acting in behalf of the municipality, is performing governmental
or proprietary functions. As emphasized in the case of Torio vs. Fontanilla (G. R. No. L-29993, October 23, 1978. 85 SCRA
599, 606), the distinction of powers becomes important for purposes of determining the liability of the municipality for
the acts of its agents which result in an injury to third persons.

Another statement of the test is given in City of Kokomo vs. Loy, decided by the Supreme Court of Indiana in 1916, thus:

Municipal corporations exist in a dual capacity, and their functions are twofold. In one they exercise the right springing
from sovereignty, and while in the performance of the duties pertaining thereto, their acts are political and governmental.
Their officers and agents in such capacity, though elected or appointed by them, are nevertheless public functionaries
performing a public service, and as such they are officers, agents, and servants of the state. In the other capacity the
municipalities exercise a private, proprietary or corporate right, arising from their existence as legal persons and not as
public agencies. Their officers and agents in the performance of such functions act in behalf of the municipalities in their
corporate or individual capacity, and not for the state or sovereign power." (112 N.E., 994-995) (Ibid, pp. 605-606.)

It has already been remarked that municipal corporations are suable because their charters grant them the competence
to sue and be sued. Nevertheless, they are generally not liable for torts committed by them in the discharge of
governmental functions and can be held answerable only if it can be shown that they were acting in a proprietary capacity.
In permitting such entities to be sued, the State merely gives the claimant the right to show that the defendant was not
acting in its governmental capacity when the injury was committed or that the case comes under the exceptions
recognized by law. Failing this, the claimant cannot recover. (Cruz, supra, p. 44.)
In the case at bar, the driver of the dump truck of the municipality insists that "he was on his way to the Naguilian river to
get a load of sand and gravel for the repair of San Fernando's municipal streets." (Rollo, p. 29.)

In the absence of any evidence to the contrary, the regularity of the performance of official duty is presumed pursuant to
Section 3(m) of Rule 131 of the Revised Rules of Court. Hence, We rule that the driver of the dump truck was performing
duties or tasks pertaining to his office.

We already stressed in the case of Palafox, et. al. vs. Province of Ilocos Norte, the District Engineer, and the Provincial
Treasurer (102 Phil 1186) that "the construction or maintenance of roads in which the truck and the driver worked at the
time of the accident are admittedly governmental activities."

After a careful examination of existing laws and jurisprudence, We arrive at the conclusion that the municipality cannot
be held liable for the torts committed by its regular employee, who was then engaged in the discharge of governmental
functions. Hence, the death of the passenger tragic and deplorable though it may be imposed on the municipality
no duty to pay monetary compensation.

All premises considered, the Court is convinced that the respondent judge's dereliction in failing to resolve the issue of
non-suability did not amount to grave abuse of discretion. But said judge exceeded his jurisdiction when it ruled on the
issue of liability.

ACCORDINGLY, the petition is GRANTED and the decision of the respondent court is hereby modified, absolving the
petitioner municipality of any liability in favor of private respondents.

SO ORDERED.

EN BANC

G.R. No. L-23825 December 24, 1965

EMMANUEL PELAEZ, petitioner,

vs.
THE AUDITOR GENERAL, respondent.

Zulueta, Gonzales, Paculdo and Associates for petitioner.

Office of the Solicitor General for respondent.

CONCEPCION, J.:

During the period from September 4 to October 29, 1964 the President of the Philippines, purporting to act pursuant to
Section 68 of the Revised Administrative Code, issued Executive Orders Nos. 93 to 121, 124 and 126 to 129; creating thirty-
three (33) municipalities enumerated in the margin.1 Soon after the date last mentioned, or on November 10, 1964
petitioner Emmanuel Pelaez, as Vice President of the Philippines and as taxpayer, instituted the present special civil action,
for a writ of prohibition with preliminary injunction, against the Auditor General, to restrain him, as well as his
representatives and agents, from passing in audit any expenditure of public funds in implementation of said executive
orders and/or any disbursement by said municipalities.

Petitioner alleges that said executive orders are null and void, upon the ground that said Section 68 has been impliedly
repealed by Republic Act No. 2370 and constitutes an undue delegation of legislative power. Respondent maintains the
contrary view and avers that the present action is premature and that not all proper parties referring to the officials of
the new political subdivisions in question have been impleaded. Subsequently, the mayors of several municipalities
adversely affected by the aforementioned executive orders because the latter have taken away from the former the
barrios composing the new political subdivisions intervened in the case. Moreover, Attorneys Enrique M. Fernando and
Emma Quisumbing-Fernando were allowed to and did appear as amici curiae.

The third paragraph of Section 3 of Republic Act No. 2370, reads:

Barrios shall not be created or their boundaries altered nor their names changed except under the provisions of this Act
or by Act of Congress.

Pursuant to the first two (2) paragraphs of the same Section 3:

All barrios existing at the time of the passage of this Act shall come under the provisions hereof.

Upon petition of a majority of the voters in the areas affected, a new barrio may be created or the name of an existing
one may be changed by the provincial board of the province, upon recommendation of the council of the municipality or
municipalities in which the proposed barrio is stipulated. The recommendation of the municipal council shall be embodied
in a resolution approved by at least two-thirds of the entire membership of the said council: Provided, however, That no
new barrio may be created if its population is less than five hundred persons.

Hence, since January 1, 1960, when Republic Act No. 2370 became effective, barrios may "not be created or their
boundaries altered nor their names changed" except by Act of Congress or of the corresponding provincial board "upon
petition of a majority of the voters in the areas affected" and the "recommendation of the council of the municipality or
municipalities in which the proposed barrio is situated." Petitioner argues, accordingly: "If the President, under this new
law, cannot even create a barrio, can he create a municipality which is composed of several barrios, since barrios are units
of municipalities?"

Respondent answers in the affirmative, upon the theory that a new municipality can be created without creating new
barrios, such as, by placing old barrios under the jurisdiction of the new municipality. This theory overlooks, however, the
main import of the petitioner's argument, which is that the statutory denial of the presidential authority to create a new
barrio implies a negation of the bigger power to create municipalities, each of which consists of several barrios. The
cogency and force of this argument is too obvious to be denied or even questioned. Founded upon logic and experience,
it cannot be offset except by a clear manifestation of the intent of Congress to the contrary, and no such manifestation,
subsequent to the passage of Republic Act No. 2379, has been brought to our attention.

Moreover, section 68 of the Revised Administrative Code, upon which the disputed executive orders are based, provides:

The (Governor-General) President of the Philippines may by executive order define the boundary, or boundaries, of any
province, subprovince, municipality, [township] municipal district, or other political subdivision, and increase or diminish
the territory comprised therein, may divide any province into one or more subprovinces, separate any political division
other than a province, into such portions as may be required, merge any of such subdivisions or portions with another,
name any new subdivision so created, and may change the seat of government within any subdivision to such place therein
as the public welfare may require: Provided, That the authorization of the (Philippine Legislature) Congress of the
Philippines shall first be obtained whenever the boundary of any province or subprovince is to be defined or any province
is to be divided into one or more subprovinces. When action by the (Governor-General) President of the Philippines in
accordance herewith makes necessary a change of the territory under the jurisdiction of any administrative officer or any
judicial officer, the (Governor-General) President of the Philippines, with the recommendation and advice of the head of
the Department having executive control of such officer, shall redistrict the territory of the several officers affected and
assign such officers to the new districts so formed.

Upon the changing of the limits of political divisions in pursuance of the foregoing authority, an equitable distribution of
the funds and obligations of the divisions thereby affected shall be made in such manner as may be recommended by the
(Insular Auditor) Auditor General and approved by the (Governor-General) President of the Philippines.
Respondent alleges that the power of the President to create municipalities under this section does not amount to an
undue delegation of legislative power, relying upon Municipality of Cardona vs. Municipality of Binagonan (36 Phil. 547),
which, he claims, has settled it. Such claim is untenable, for said case involved, not the creation of a new municipality, but
a mere transfer of territory from an already existing municipality (Cardona) to another municipality
(Binagonan), likewise, existing at the time of and prior to said transfer (See Gov't of the P.I. ex rel. Municipality of Cardona
vs. Municipality, of Binagonan [34 Phil. 518, 519-5201) in consequence of the fixing and definition, pursuant to Act No.
1748, of the common boundaries of two municipalities.

It is obvious, however, that, whereas the power to fix such common boundary, in order to avoid or settle conflicts of
jurisdiction between adjoining municipalities, may partake of an administrative nature involving, as it does, the
adoption of means and ways to carry into effect the law creating said municipalities the authority to create municipal
corporations is essentially legislative in nature. In the language of other courts, it is "strictly a legislative function" (State
ex rel. Higgins vs. Aicklen, 119 S. 425, January 2, 1959) or "solely and exclusively the exercise of legislative power" (Udall
vs. Severn, May 29, 1938, 79 P. 2d 347-349). As the Supreme Court of Washington has put it (Territory ex rel. Kelly vs.
Stewart, February 13, 1890, 23 Pac. 405, 409), "municipal corporations are purely the creatures of statutes."

Although1a Congress may delegate to another branch of the Government the power to fill in the details in the execution,
enforcement or administration of a law, it is essential, to forestall a violation of the principle of separation of powers, that
said law: (a) be complete in itself it must set forth therein the policy to be executed, carried out or implemented by the
delegate2 and (b) fix a standard the limits of which are sufficiently determinate or determinable to which the
delegate must conform in the performance of his functions.2aIndeed, without a statutory declaration of policy, the
delegate would in effect, make or formulate such policy, which is the essence of every law; and, without the
aforementioned standard, there would be no means to determine, with reasonable certainty, whether the delegate has
acted within or beyond the scope of his authority.2b Hence, he could thereby arrogate upon himself the power, not only
to make the law, but, also and this is worse to unmake it, by adopting measures inconsistent with the end sought to
be attained by the Act of Congress, thus nullifying the principle of separation of powers and the system of checks and
balances, and, consequently, undermining the very foundation of our Republican system.

Section 68 of the Revised Administrative Code does not meet these well settled requirements for a valid delegation of the
power to fix the details in the enforcement of a law. It does not enunciate any policy to be carried out or implemented by
the President. Neither does it give a standard sufficiently precise to avoid the evil effects above referred to. In this
connection, we do not overlook the fact that, under the last clause of the first sentence of Section 68, the President:

... may change the seat of the government within any subdivision to such place therein as the public welfare may require.

It is apparent, however, from the language of this clause, that the phrase "as the public welfare may require"
qualified, not the clauses preceding the one just quoted, but only the place to which the seat of the government may be
transferred. This fact becomes more apparent when we consider that said Section 68 was originally Section 1 of Act No.
1748,3 which provided that, "whenever in the judgment of the Governor-General the public welfare requires, he may, by
executive order," effect the changes enumerated therein (as in said section 68), including the change of the seat of the
government "to such place ... as the public interest requires." The opening statement of said Section 1 of Act No. 1748
which was not included in Section 68 of the Revised Administrative Code governed the time at which, or the conditions
under which, the powers therein conferred could be exercised; whereas the last part of the first sentence of said section
referred exclusively to the place to which the seat of the government was to be transferred.

At any rate, the conclusion would be the same, insofar as the case at bar is concerned, even if we assumed that the phrase
"as the public welfare may require," in said Section 68, qualifies all other clauses thereof. It is true that in Calalang vs.
Williams (70 Phil. 726) and People vs. Rosenthal (68 Phil. 328), this Court had upheld "public welfare" and "public interest,"
respectively, as sufficient standards for a valid delegation of the authority to execute the law. But, the doctrine laid down
in these cases as all judicial pronouncements must be construed in relation to the specific facts and issues involved
therein, outside of which they do not constitute precedents and have no binding effect.4 The law construed in the Calalang
case conferred upon the Director of Public Works, with the approval of the Secretary of Public Works and Communications,
the power to issue rules and regulations to promote safe transit upon national roads and streets. Upon the other hand,
the Rosenthal case referred to the authority of the Insular Treasurer, under Act No. 2581, to issue and cancel certificates
or permits for the sale of speculative securities. Both cases involved grants to administrative officers of powers related to
the exercise of their administrative functions, calling for the determination of questions of fact.

Such is not the nature of the powers dealt with in section 68. As above indicated, the creation of municipalities, is not
an administrative function, but one which is essentially and eminently legislative in character. The question of whether or
not "public interest" demands the exercise of such power is not one of fact. it is "purely a legislative question "(Carolina-
Virginia Coastal Highway vs. Coastal Turnpike Authority, 74 S.E. 2d. 310-313, 315-318), or a political question (Udall vs.
Severn, 79 P. 2d. 347-349). As the Supreme Court of Wisconsin has aptly characterized it, "the question as to whether
incorporation is for the best interest of the community in any case is emphatically a question of public policy and
statecraft" (In re Village of North Milwaukee, 67 N.W. 1033, 1035-1037).

For this reason, courts of justice have annulled, as constituting undue delegation of legislative powers, state laws granting
the judicial department, the power to determine whether certain territories should be annexed to a particular municipality
(Udall vs. Severn, supra, 258-359); or vesting in a Commission the right to determine the plan and frame of government
of proposed villages and what functions shall be exercised by the same, although the powers and functions of the village
are specifically limited by statute (In re Municipal Charters, 86 Atl. 307-308); or conferring upon courts the authority to
declare a given town or village incorporated, and designate its metes and bounds, upon petition of a majority of the
taxable inhabitants thereof, setting forth the area desired to be included in such village (Territory ex rel Kelly vs. Stewart,
23 Pac. 405-409); or authorizing the territory of a town, containing a given area and population, to be incorporated as a
town, on certain steps being taken by the inhabitants thereof and on certain determination by a court and subsequent
vote of the inhabitants in favor thereof, insofar as the court is allowed to determine whether the lands embraced in the
petition "ought justly" to be included in the village, and whether the interest of the inhabitants will be promoted by such
incorporation, and to enlarge and diminish the boundaries of the proposed village "as justice may require" (In re Villages
of North Milwaukee, 67 N.W. 1035-1037); or creating a Municipal Board of Control which shall determine whether or not
the laying out, construction or operation of a toll road is in the "public interest" and whether the requirements of the law
had been complied with, in which case the board shall enter an order creating a municipal corporation and fixing the name
of the same (Carolina-Virginia Coastal Highway vs. Coastal Turnpike Authority, 74 S.E. 2d. 310).

Insofar as the validity of a delegation of power by Congress to the President is concerned, the case of Schechter Poultry
Corporation vs. U.S. (79 L. Ed. 1570) is quite relevant to the one at bar. The Schechter case involved the constitutionality
of Section 3 of the National Industrial Recovery Act authorizing the President of the United States to approve "codes of
fair competition" submitted to him by one or more trade or industrial associations or corporations which "impose no
inequitable restrictions on admission to membership therein and are truly representative," provided that such codes are
not designed "to promote monopolies or to eliminate or oppress small enterprises and will not operate to discriminate
against them, and will tend to effectuate the policy" of said Act. The Federal Supreme Court held:

To summarize and conclude upon this point: Sec. 3 of the Recovery Act is without precedent. It supplies no standards for
any trade, industry or activity. It does not undertake to prescribe rules of conduct to be applied to particular states of fact
determined by appropriate administrative procedure. Instead of prescribing rules of conduct, it authorizes the making of
codes to prescribe them. For that legislative undertaking, Sec. 3 sets up no standards, aside from the statement of the
general aims of rehabilitation, correction and expansion described in Sec. 1. In view of the scope of that broad declaration,
and of the nature of the few restrictions that are imposed, the discretion of the President in approving or prescribing
codes, and thus enacting laws for the government of trade and industry throughout the country, is virtually unfettered.
We think that the code making authority thus conferred is an unconstitutional delegation of legislative power.

If the term "unfair competition" is so broad as to vest in the President a discretion that is "virtually unfettered." and,
consequently, tantamount to a delegation of legislative power, it is obvious that "public welfare," which has even a
broader connotation, leads to the same result. In fact, if the validity of the delegation of powers made in Section 68 were
upheld, there would no longer be any legal impediment to a statutory grant of authority to the President to do anything
which, in his opinion, may be required by public welfare or public interest. Such grant of authority would be a virtual
abdication of the powers of Congress in favor of the Executive, and would bring about a total collapse of the democratic
system established by our Constitution, which it is the special duty and privilege of this Court to uphold.

It may not be amiss to note that the executive orders in question were issued after the legislative bills for the creation of
the municipalities involved in this case had failed to pass Congress. A better proof of the fact that the issuance of said
executive orders entails the exercise of purely legislative functions can hardly be given.

Again, Section 10 (1) of Article VII of our fundamental law ordains:

The President shall have control of all the executive departments, bureaus, or offices, exercise general supervision over
all local governments as may be provided by law, and take care that the laws be faithfully executed.

The power of control under this provision implies the right of the President to interfere in the exercise of such discretion
as may be vested by law in the officers of the executive departments, bureaus, or offices of the national government, as
well as to act in lieu of such officers. This power is denied by the Constitution to the Executive, insofar as local governments
are concerned. With respect to the latter, the fundamental law permits him to wield no more authority than that of
checking whether said local governments or the officers thereof perform their duties as provided by statutory enactments.
Hence, the President cannot interfere with local governments, so long as the same or its officers act Within the scope of
their authority. He may not enact an ordinance which the municipal council has failed or refused to pass, even if it had
thereby violated a duty imposed thereto by law, although he may see to it that the corresponding provincial officials take
appropriate disciplinary action therefor. Neither may he vote, set aside or annul an ordinance passed by said council within
the scope of its jurisdiction, no matter how patently unwise it may be. He may not even suspend an elective official of a
regular municipality or take any disciplinary action against him, except on appeal from a decision of the corresponding
provincial board.5

Upon the other hand if the President could create a municipality, he could, in effect, remove any of its officials, by creating
a new municipality and including therein the barrio in which the official concerned resides, for his office would thereby
become vacant.6 Thus, by merely brandishing the power to create a new municipality (if he had it), without actually
creating it, he could compel local officials to submit to his dictation, thereby, in effect, exercising over them the power of
control denied to him by the Constitution.

Then, also, the power of control of the President over executive departments, bureaus or offices implies no more than the
authority to assume directly the functions thereof or to interfere in the exercise of discretion by its officials.
Manifestly, such control does not include the authority either to abolish an executive department or bureau, or to create a
new one. As a consequence, the alleged power of the President to create municipal corporations would necessarily
connote the exercise by him of an authority even greater than that of control which he has over the executive departments,
bureaus or offices. In other words, Section 68 of the Revised Administrative Code does not merely fail to comply with the
constitutional mandate above quoted. Instead of giving the President less power over local governments than that vested
in him over the executive departments, bureaus or offices, it reverses the process and does the exact opposite, by
conferring upon him more power over municipal corporations than that which he has over said executive departments,
bureaus or offices.

In short, even if it did entail an undue delegation of legislative powers, as it certainly does, said Section 68, as part of the
Revised Administrative Code, approved on March 10, 1917, must be deemed repealed by the subsequent adoption of the
Constitution, in 1935, which is utterly incompatible and inconsistent with said statutory enactment. 7

There are only two (2) other points left for consideration, namely, respondent's claim (a) that "not all the proper parties"
referring to the officers of the newly created municipalities "have been impleaded in this case," and (b) that "the
present petition is premature."

As regards the first point, suffice it to say that the records do not show, and the parties do not claim, that the officers of
any of said municipalities have been appointed or elected and assumed office. At any rate, the Solicitor General, who has
appeared on behalf of respondent Auditor General, is the officer authorized by law "to act and represent the Government
of the Philippines, its offices and agents, in any official investigation, proceeding or matter requiring the services of a
lawyer" (Section 1661, Revised Administrative Code), and, in connection with the creation of the aforementioned
municipalities, which involves a political, not proprietary, function, said local officials, if any, are mere agents or
representatives of the national government. Their interest in the case at bar has, accordingly, been, in effect, duly
represented.8

With respect to the second point, respondent alleges that he has not as yet acted on any of the executive order & in
question and has not intimated how he would act in connection therewith. It is, however, a matter of common, public
knowledge, subject to judicial cognizance, that the President has, for many years, issued executive orders creating
municipal corporations and that the same have been organized and in actual operation, thus indicating, without
peradventure of doubt, that the expenditures incidental thereto have been sanctioned, approved or passed in audit by
the General Auditing Office and its officials. There is no reason to believe, therefore, that respondent would adopt a
different policy as regards the new municipalities involved in this case, in the absence of an allegation to such effect, and
none has been made by him.

WHEREFORE, the Executive Orders in question are hereby declared null and void ab initio and the respondent
permanently restrained from passing in audit any expenditure of public funds in implementation of said Executive Orders
or any disbursement by the municipalities above referred to. It is so ordered.

EN BANC

[G.R. No. 105746. December 2, 1996]

MUNICIPALITY OF JIMENEZ, through its MAYOR ELEUTERIO A. QUIMBO, VICE MAYOR ROBINSON B. LOMO,
COUNCILORS TEOFILO GALORIO, CASIANO ADORABLE, MARIO APAO, ANTONIO BIENES, VEDE SULLANO, MARIETO TAN,
SR., HERMINIO SERINO, BENJAMIN DANO, and CRISPULO MUNAR, and ELEUTERIO A. QUIMBO, ROBINSON B. LOMO,
TEOFILI GALORIO, CASIANO ADORABLE, MARIO APAO, ANTONIO BIENES, VEDE SULLANO, MARIETO TAN SR., HERMINI
SERINO, BENJAMIN DANO, and CRISPULO MUNAR, in their private capacities as taxpayer in the Province of Misamis
Occidental and the Municipality of Jimenez, Misamis Occidental, and BENJAMIN C. GALINDO and BENHUR B. BAUTISTA,
in their private capacities as taxpayers in the Province of Misamis Occidental and the Municipality of Jimenez, Misamis
Occidental, petitioners, vs., HON. VICENTE T. BAZ, JR., Presiding Judge REGIONAL TRIAL COURT, BRANCH 14,
10th JUDICIAL REGION, OROQUIETA CITY, and MUNICIPALITY OF SINACABAN through its MAYOR EUFRACIO D. LOOD,
VICE MAYOR BASILIO M. BANAAG, COUNCILORS CONCEPCION E. LAGA-AC, MIGUEL F. ABCEDE, JUANITO B. TIU,
CLAUDIO T. REGIL, ANCIETO S. MEJARES NAZIANCINO B. MARIQUIT, and FEDERICO QUINIMON, and THE PROVINCE OF
MISAMIS OCCIDENTAL through the PROVINCIAL BOARD OF MISAMIS OCCIDENTAL and its members, VICE-GOVERNOR
FLORENCIO L. GARCIA, BOARD MEMBERS MARIVIC S. CHIONG, PACITA M. YAP, ALEGRIA V. CARINO, JULIO L. TIU,
LEONARDO R. REGALADO II, CONSTACIO C. BALAIS and ERNESTO P. IRA, and THE COMMISSION ON AUDIT, through its
Chairman, HON. EUFEMIO DOMINGO, and THE DEPARTMENT OF LOCAL GOVERNMENT through its Secretary, HON. LUIS
SANTOS (now HON. CESAR SARINO), and THE DEPARTMENT OF BUDGET AND MANAGEMENT, through its Secretary,
HON. GUILLERMO CARAGUE (now HON. SALVADOR ENRIQUEZ), and The Hon. CATALINO MACARAOG (now HON.
FRAKLIN DRILON), EXECUTIVE SECRETARY, OFFICE OF THE PRESIDENT, respondents.

DECISION

MENDOZA, J.:
This is a petition for review of the decision dated March 4, 1992 of the Regional Trial Court, Branch 14 of Oroquieta
City,[1] affirming the legal existence of the Municipality of Sinacaban in Misamis Occidental and ordering the relocation of
its boundary for the purpose of determining whether certain areas claimed by it belong to it.

The antecedent facts are as follows:

The Municipality of Sinacaban was created by Executive Order No. 258 of then President Elpidio Quirino, pursuant to 68
of the Revised Administrative Code of 1917. The full text of the Order reads:

EXECUTIVE ORDER NO. 258

CREATING THE MUNICIPALITY OF SINACABAN,

IN THE PROVINCE OF MISAMIS OCCIDENTAL

Upon the recommendation of the Secretary of the Interior, and pursuant to the provisions of Section 68 of the Revised
Administrative Code, there is hereby created, in the Province of Misamis Occidental, a municipality to be known as the
municipality of Sinacaban, which shall consist of the southern portion of the municipality of Jimenez, Misamis Occidental,
more particularly described and bounded as follows:

On the north by a line starting from point 1, the center of the lighthouse on the Tabo-o point S. 840 30W., 7,250 meters to
point 2 which is on the bank of Palilan River branch; thence following Palilan River branch 2,400 meters southwesterly 'to
point 3, thence a straight line S 870 00 W, 22,550 meters to point 4, where this intersects the Misamis Occidental-
Zamboanga boundary; on the west, by the present Misamis Occidental-Zamboanga boundary; and on the south by the
present Jimenez-Tudela boundary; and on the east, by the limits of the municipal waters which the municipality of
Sinacaban shall have pursuant to section 2321 of the Revised Administrative Code, (Description based on data shown in
Enlarged Map of Poblacion of Jimenez, Scale 1:8:000).

The municipality of Sinacabn contains the barrios of Sinacaban, which shall be the seat of the municipal government,
Sinonoc, Libertad, the southern portion of the barrio of Macabayao, and the sitios of Tipan, Katipunan, Estrella, Flores,
Senior, Adorable, San Isidro, Cagayanon, Kamanse, Kulupan and Libertad Alto.

The municipality of Jimenez shall have its present territory, minus the portion thereof included in the municipality of
Sinacaban.

The municipality of Sinacaban shall begin to exist upon the appointment and qualification of the mayor, vice-mayor, and
a majority of the councilors thereof. The new municipality shall, however, assume payment of a proportionate share of
the loan of the municipality of Jimenez with the Rehabilitation Finance Corporation as may be outstanding on the date of
its organization, the proportion of such payment to be determined by the Department of Finance.

Done in the City of Manila, this 30th day of August, in the year of Our Lord, nineteen hundred and forty-nine, and of
the Independence of the Philippines, the fourth.

(SGD.) ELPIDIO QUIRINO

President of the Philippines

By the President:

(SGD.) TEODORO EVANGELISTA

Executive Secretary

By virtue of Municipal Council Resolution No. 171,[2] dated November 22, 1988, Sinacaban laid claim to a portion of Barrio
Tabo-o and to Barrios Macabayao, Adorable, Sinara Baja, and Sinara Alto, [3] based on the technical description in E.O. No.
258. The claim was filed with the Provincial Board of Misamis Occidental against the Municipality of Jimenez.
In its answer, the Municipality of Jimenez, while conceding that under E.O. No. 258 the disputed area is part of Sinacaban,
nonetheless asserted jurisdiction on the basis of an agreement it had with the Municipality of Sinacaban. This agreement
was approved by the Provincial Board of Misamis Occidental, in its Resolution No. 77, dated February 18, 1950, which
fixed the common boundary of Sinacaban and Jimenez as follows:[4]

From a point at Cagayanon Beach follow Macabayao Road until it intersects Tabangag Creek at the back of the Macabayao
Elementary school. Follow the Tabangag Creek until it intersect the Macabayao River at upper Adorable. Follow the
Macabayao River such that the barrio of Macabayao, Sitio Adorable and site will be a part of the Jimenez down and the
sitios of San Vicente, Donan, Estrella, Mapula will be a part of Sinacaban. (Emphasis added)

In its decision dated October 11, 1989, [5] the Provincial Board declared the disputed area to be part of Sinacaban. It held
that the previous resolution approving the agreement between the municipalities was void because the Board had no
power to alter the boundaries of Sinacaban as fixed in E.O. No. 258, that power being vested in Congress pursuant to the
Constitution and the Local Government Code of 1983 (B.P. Blg. 337), 134. [6] The Provincial Board denied in its Resolution
No. 13-90 dated January 30, 1990 the motion of Jimenez seeking reconsideration. [7]

On March 20, 1990, Jimenez filed a petition for certiorari, prohibition, and mandamus in the Regional Trial Court of
Oroquieta City, Branch 14. The suit was filed against Sinacaban, the Province of Misamis Occidental and its Provincial
Board, the Commission on Audit, the Departments of Local Government, Budget and Management, and the Executive
Secretary. Jimenez alleged that, in accordance with the decision in Pelaez v. Auditor General,[8] the power to create
municipalities is essentially legislative and consequently Sinacaban, which was created by an executive order, had no legal
personality and no right to assert a territorial claim vis--vis Jimenez, of which it remains part. Jimenez prayed that
Sinacaban be enjoined from assuming control and supervision over the disputed barrios; that the Provincial Board be
enjoined from assuming jurisdiction over the claim of Sinacaban; that E.O. No. 258 be declared null and void; that the
decision dated October 11, 1989 and Resolution No. 13-90 of the Provincial Board be set aside for having been rendered
without jurisdiction; that the Commission on Audit be enjoined from passing in audit any expenditure of public funds by
Sinacaban; that the Department of Budget and Management be enjoined from allotting public funds to Sinacaban; and
that the Executive Secretary be enjoined from exercising control and supervision over said municipality.

During pre-trial, the parties agreed to limit the issues to the following:

A. Whether the Municipality of Sinacaban is a legal juridical entity, duly created in accordance with law;

B. If not, whether it is a de facto juridical entity;

C. Whether the validity of the existence of the Municipality can be properly questioned in this action on certiorari;

D. Whether the Municipality of Jimenez which had recognized the existence of the municipality for more than 40 years is
estopped to question its existence;

E. Whether the existence of the municipality has been recognized by the laws of the land; and

F. Whether the decision of the Provincial Board had acquired finality.

On February 10, 1992, the RTC rendered its decision, the dispositive portion of which reads:

WHEREFORE, premises considered, it is the finding of this Court that the petition must be denied and judgment is hereby
rendered declaring a STATUS QUO, that is, the municipality of Sinacaban shall continue to exist and operate as a regular
municipality; declaring the decision dated October 11, 1989 rendered by the Sangguniang Panlalawigan fixing the
boundaries between Sinacaban and Jimenez, Missamis Occi. as null and void, the same not being in accordance with the
boundaries provided for in Executive order No. 258 creating the municipality of Sinacaban; dismissing the petition for lack
of merit, without pronouncement as to cost and damages. With respect to the counterclaim, the same is hereby ordered
dismissed.
The Commissioners are hereby ordered to conduct the relocation survey of the boundary of Sinacaban within 60 days
from the time the decision shall have become final and executory and another 60 days within which to submit their report
from the completion of the said relocation survey.

SO ORDERED.

The RTC, inter alia, held that Sinacaban is a de facto corporation since it had completely organized itself even prior to the
Pelaez case and exercised corporate powers for forty years before the existence was questioned; that Jimenez did not
have the legal standing to question the existence of Sinacaban, the same being reserved to he State as represented by the
Office of the Solicitor General in a quo warranto proceeding; that Jimenez was estopped from questioning the legal
existence of Sinacaban by entering into an agreement with it concerning their common boundary; and that any question
as to the legal existence of Sinacaban had been rendered moot by 442 (d) of the Local Government Code of 1991 (R.A. No.
7160), which provides:

Municipalities existing as of the date of the effectivity of this Code shall continue to exist and operate as such. Existing
municipal districts organized pursuant to presidential issuances or executive orders and which have their respective set
of elective municipal officials holding office at the time of the effectivity of this Code shall henceforth be considered as
regular municipalities.

On March 17, 1990, petitioner moved for a reconsideration of the decision but its motion was denied by the RTC. Hence
this petition raising the following issues: (1) whether Sinacaban has legal personality to file a claim, and (2) if it has,
whether it is the boundary provided for in E.O. No. 258 or in resolution No. 77 of the Provincial Board of Misamis
Occidental which should be used as the basis for adjudicating Sinacabans territorial claim.

First. The preliminary issue concerns the legal existence of Sinacaban. If Sinacaban legally exist, then it has standing to
bring a claim in the Provincial Board. Otherwise, it cannot.

The principal basis for the view that Sinacaban was not validly created as a municipal corporation is the ruling in Pelaez v.
Auditor General that the creation of municipal corporations is essentially a legislative matter and therefore the President
was without power to create by executive order the Municipality of Sinacaban. The ruling in this case has been reiterated
in a number of cases[9] later decided. However, we have since held that where a municipality created as such by executive
order is later impliedly recognized and its acts are accorded legal validity, its creation can no longer be questioned. In
Municipality of San Narciso, Quezon v. Mendez, Sr.,[10] this Court considered the following factors as having validated the
creation of a municipal corporation, which, like the Municipallity of Sinacaban, was created by executive order of the
President before the ruling in Pelaez v. Auditor general: (1) the fact that for nearly 30 years the validity of the creation of
the municipality had never been challenged; (2) the fact that following the ruling in Pelaez no quo warranto suit was filed
to question the validity of the executive order creating such municipality; and (3) the fact that the municipality was later
classified as a fifth class municipality, organized as part of a municipal circuit court and considered part of a legislative
district in the Constitution apportioning the seats in the House of Representatives. Above all, it was held that whatever
doubt there might be as to the de jure character of the municipality must be deemed to have been put to rest by the local
Government Code of 1991 (R.A. no. 7160), 442 (d) of which provides that municipal districts organized pursuant to
presidential issuances or executive orders and which have their respective sets of elective officials holding office at the
time of the effectivity of this Code shall henceforth be considered as regular municipalities.

Here, the same factors are present so as to confer on Sinacaban the status of at least a de facto municipal corporation in
the sense that its legal existence has been recognized and acquiesced publicly and officially. Sinacaban had been in
existence for sixteen years when Pelaez v. Auditor General was decided on December 24, 1965. Yet the validity of E.O. No.
258 creating it had never been questioned. Created in 1949, it was only 40 years later that its existence was questioned
and only because it had laid claim to an area that apparently is desired for its revenue. This fact must be underscored
because under Rule 66, 16 of the Rules of Court, a quo warranto suit against a corporation for forfeiture of its charter
must be commenced within five (5) years from the time the act complained of was done or committed. On the contrary,
the State and even the municipality of Jimenez itself have recognized Sinacabans corporate existence. Under
Administrative order no. 33 dated June 13, 1978 of this Court, as reiterated by 31 of the judiciary Reorganization Act of
1980 (B.P. Blg. 129), Sinacaban is constituted part of municipal circuit for purposes of the establishment of Municipal
Circuit Trial Courts in the country. For its part, Jimenez had earlier recognized Sinacaban in 1950 by entering into an
agreement with it regarding their common boundary. The agreement was embodied in Resolution no. 77 of the Provincial
Board of Misamis Occidental.

Indeed Sinacaban has attained de jure status by virtue of the Ordinance appended to the 1987 Constitution, apportioning
legislative districts throughout the country, which considered Sinacaban part of the Second District of Misamis
Occidental. Moreover following the ruling in Municipality of san Narciso, Quezon v. Mendez, Sr., 442(d) of the Local
Government Code of 1991 must be deemed to have cured any defect in the creation of Sinacaban. This provision states:

Municipalities existing as of the date of the effectivity of this Code shall continue to exist and operate as such. Existing
municipal district organized pursuant to presidential issuances or executive orders and which have their respective set of
elective municipal officials holding office at the time of the effectivity of the Code shall henceforth be considered as regular
municipalities.

Second. Jimenez claims, however, that R.A. No. 7160, 442(d) is invalid, since it does not conform to the constitutional and
statutory requirements for the holding of plebiscites in the creation of new municipalities. [11]

This contention will not bear analysis. Since, as previously explained, Sinacaban had attained de facto status at the time
the 1987 Constitution took effect on February 2, 1987, it is not subject to the plebiscite requirement. This requirement
applies only to new municipalities created for the first time under the Constitution. Actually, the requirement of plebiscite
was originally contained in Art. XI, 3 of the previous Constitution which took effect on January 17, 1973. It cannot,
therefore, be applied to municipal corporations created before, such as the municipality of Sinacaban in the case at bar.

Third. Finally Jimenez argues that the RTC erred in ordering a relocation survey of the boundary of Sinacaban because the
barangays which Sinacaban are claiming are not enumerated in E.O. No. 258 and that in any event in 1950 the parties
entered into an agreement whereby the barangays in question were considered part of the territory of Jimenez.

E.O. no. 258 does not say that Sinacaban comprises only the barrios (now called Barangays) therein mentioned. What it
say is that Sinacaban contains those barrios, without saying they are the only ones comprising it. The reason for this is that
the technical description, containing the metes and bounds of its territory, is controlling. The trial court correctly ordered
a relocation and consequently the question to which the municipality the barangays in question belong.

Now, as already stated, in 1950 the two municipalities agreed that certain barrios bellonged to Jimenez, while certain
other ones belonged to Sinacaban. This agreement was subsequently approved by the Provincial board of Misamis
Occidental. Whether this agreement conforms to E.O. no. 258 will be determined by the result of the survey. Jimenez
contends however, that regardless of its conformity to E.O. No, 258, the agreement as embodied in resolution No, 77 of
the Provincial Board, is binding on Sinacaban. This raises the question whether the provincial board had authority to
approve the agreement or, to put it in another way, whether it had the power to declare certain barrios part of the one
or the other municipality.We hold it did not if effect would be to amend the area as described in E.O no. 258 creating the
Municipality of Sinacaban.

At the time the Provincial Board passed Resolution No. 77 on February 18, 1950, the applicable law was 2167 of the
Revised Administrative Code of 1917 which provided:

SEC. 2167. Municipal boundary disputes. How settled. Disputes as to jurisdiction of municipal governments over places or
barrios shall be decided by the provincial boards of the provinces in which such municipalities are situated, after an
investigation at which the municipalities concerned shall be duly heard. From the decision of the provincial board appeal
may be taken by the municipality aggrieved to the Secretary of the Interior [now the Office of the Executive Secretary],
whose decision shall be final. Where the places or barrios in dispute are claimed by municipalities situated in different
provinces, the provincial boards of the provinces concerned shall come to an agreement if possible, but, in the event of
their failing to agree, an appeal shall be had to the Secretary of Interior [Executive Secretary], whose decision shall be final.
As held in Pelaez v. Auditor General,[12] the power of provincial boards to settle boundary disputes is of an administrative
nature involving as it does, the adoption of means and ways to carry into effect the law creating said municipalities. It is a
power to fix common boundary, in order to avoid or settle conflicts of jurisdiction between adjoining municipalities. It is
thus limited to implementing the law creating a municipality. It is obvious that any alteration of boundaries that is not in
accordance with the law creating a municipality is not the carrying into effect of that law but its amendment. [13] If,
therefore, Resolution No. 77 of the Provincial Board of Misamis Occidental is contrary to the technical description of
the territory of Sinacaban, it cannot be used by Jimenez as basis for opposing the claim of Sinacaban.

Jimenez properly brought to the RTC for review the decision of October 11, 1989 and Resolution No. 13-90 of the
Provincial Board. Its action is in accordance with the local Government Code of 1983, 79 of which provides that I case no
settlement of boundary disputes is made the dispute should be elevated to the RTC of the province. In 1989, when the
action was brought by Jimenez, this Code was the governing law. The governing law is now the Local Government Code
of 1991 (R.A. No. 7160), 118-119.

Jimenezs contention that the RTC failed to decide the case within one year form the start of proceeding as required by 79
of the Local Government Code of 1983 and the 90-day period provided for in the Article VIII, 15 of the Constitution does
not affect the validity of the decision rendered. For even granting that the court failed to decide within the period
prescribed by law, its failure did not divest it of its jurisdiction to decide the case but only makes the judge thereof liable
for possible administrative sanction.[14]

WHEREFORE, the petition is DENIED and the decision of the Regional Trial Court of Oroquieta City, Branch 14 is AFFIRMED.

EN BANC

G.R. No. 103702 December 6, 1994

MUNICIPALITY OF SAN NARCISO, QUEZON; MAYOR JUAN K. UY; COUNCILORS: DEOGRACIAS R. ARGOSINO III, BENITO
T. CAPIO, EMMANUEL R. CORTEZ, NORMANDO MONTILLA, LEONARDO C. UY, FIDEL C. AURELLANA, PEDRO C. CARABIT,
LEONARDO D. AURELLANA, FABIAN M. MEDENILLA, TRINIDAD F. CORTEZ, SALVADOR M. MEDENILLA, CERELITO B.
AUREADA and FRANCISCA A. BAMBA, petitioners,
vs.
HON. ANTONIO V. MENDEZ, SR., Presiding Judge, Regional Trial Court, Branch 62, 4th Judicial Region, Gumaca, Quezon;
MUNICIPALITY OF SAN ANDRES, QUEZON; MAYOR FRANCISCO DE LEON; COUNCILORS: FE LUPINAC, TOMAS AVERIA,
MANUEL O. OSAS, WILFREDO O. FONTANIL, ENRICO U. NADRES, RODELITO LUZOIR, LENAC, JOSE L. CARABOT, DOMING
AUSA, VIDAL BANQUELES and CORAZON M. MAXIMO, respondents.

Manuel Laserna, Jr. for petitioners.

Florante Pamfilo for private respondents.

VITUG, J.:

On 20 August 1959, President Carlos P. Garcia, issued, pursuant to the then Sections 68 and 2630 of the Revised
Administrative Code, as amended, Executive Order No. 353 creating the municipal district of San Andres, Quezon, by
segregating from the municipality of San Narciso of the same province, the barrios of San Andres, Mangero, Alibijaban,
Pansoy, Camflora and Tala along with their respective sitios.

Executive Order No. 353 was issued upon the request, addressed to the President and coursed through the Provincial
Board of Quezon, of the municipal council of San Narciso, Quezon, in its Resolution No. 8 of 24 May 1959. 1

By virtue of Executive Order No. 174, dated 05 October 1965, issued by President Diosdado Macapagal, the municipal
district of San Andres was later officially recognized to have gained the status of a fifth class municipality beginning 01 July
1963 by operation of Section 2 of Republic Act No. 1515. 2 The executive order added that "(t)he conversion of this
municipal district into (a) municipality as proposed in House Bill No. 4864 was approved by the House of Representatives."

On 05 June 1989, the Municipality of San Narciso filed a petition for quo warranto with the Regional Trial Court, Branch
62, in Gumaca, Quezon, against the officials of the Municipality of San Andres. Docketed Special Civil Action No. 2014-G,
the petition sought the declaration of nullity of Executive Order No. 353 and prayed that the respondent local officials of
the Municipality of San Andres be permanently ordered to refrain from performing the duties and functions of their
respective offices. 3 Invoking the ruling of this Court in Pelaez v. Auditor General, 4 the petitioning municipality contended
that Executive Order No. 353, a presidential act, was a clear usurpation of the inherent powers of the legislature and in
violation of the constitutional principle of separation of powers. Hence, petitioner municipality argued, the officials of the
Municipality or Municipal District of San Andres had no right to exercise the duties and functions of their respective offices
that righfully belonged to the corresponding officials of the Municipality of San Narciso.

In their answer, respondents asked for the dismissal of the petition, averring, by way of affirmative and special defenses,
that since it was at the instance of petitioner municipality that the Municipality of San Andres was given life with the
issuance of Executive Order No. 353, it (petitioner municipality) should be deemed estopped from questioning the creation
of the new municipality; 5 that because the Municipality of San Andred had been in existence since 1959, its corporate
personality could no longer be assailed; and that, considering the petition to be one for quo warranto, petitioner
municipality was not the proper party to bring the action, that prerogative being reserved to the State acting through the
Solicitor General. 6

On 18 July 1991, after the parties had submitted their respective pre-trial briefs, the trial court resolved to defer action
on the motion to dismiss and to deny a judgment on the pleadings.

On 27 November 1991, the Municipality of San Andres filed anew a motion to dismiss alleging that the case had become
moot and academic with the enactment of Republic Act No. 7160, otherwise known as the Local Government Code of
1991, which took effect on 01 January 1991. The movant municipality cited Section 442(d) of the law, reading thusly:

Sec. 442. Requisites for Creation. . . .

(d) Municipalities existing as of the date of the effectivity of this Code shall continue to exist and operate as such. Existing
municipal districts organized pursuant to presidential issuances or executive orders and which have their respective set
of elective municipal officials holding office at the time of the effectivity of this Code shall henceforth be considered as
regular municipalities.

The motion was opposed by petitioner municipality, contending that the above provision of law was inapplicable to the
Municipality of San Andres since the enactment referred to legally existing municipalities and not to those whose mode
of creation had been void ab initio. 7

In its Order of 02 December 1991, the lower court 8 finally dismissed the petition 9 for lack of cause of action on what it
felt was a matter that belonged to the State, adding that "whatever defects (were) present in the creation of municipal
districts by the President pursuant to presidential issuances and executive orders, (were) cured by the enactment of R.A.
7160, otherwise known as Local Government Code of 1991." In an order, dated 17 January 1992, the same court denied
petitioner municipality's motion for reconsideration.
Hence, this petition "for review on certiorari." Petitioners 10 argue that in issuing the orders of 02 December 1991 and 17
January 1992, the lower court has "acted with grave abuse of discretion amounting to lack of or in excess of jurisdiction."
Petitioners assert that the existence of a municipality created by a null and void presidential order may be attacked either
directly or even collaterally by anyone whose interests or rights are affected, and that an unconstitutional act is not a law,
creates no office and is inoperative such as though its has never been passed. 11

Petitioners consider the instant petition to be one for "review on certiorari" under Rules 42 and 45 of the Rules of Court;
at the same time, however, they question the orders of the lower court for having been issued with "grave abuse of
discretion amounting to lack of or in excess of jurisdiction, and that there is no other plain, speedy and adequate remedy
in the ordinary course of law available to petitioners to correct said Orders, to protect their rights and to secure a final
and definitive interpretation of the legal issues involved." 12 Evidently, then, the petitioners intend to submit their case in
this instance under Rule 65. We shall disregard the procedural incongruence.

The special civil action of quo warranto is a "prerogative writ by which the Government can call upon any person to show
by what warrant he holds a public office or exercises a public franchise." 13 When the inquiry is focused on the legal
existence of a body politic, the action is reserved to the State in a proceeding for quo warranto or any other credit
proceeding. 14 It must be brought "in the name of the Republic of the Philippines" 15 and commenced by the Solicitor
General or the fiscal "when directed by the President of the Philippines . . . ." 16 Such officers may, under certain
circumstances, bring such an action "at the request and upon the relation of another person" with the permission of the
court. 17 The Rules of Court also allows an individual to commence an action for quo warranto in his own name but this
initiative can be done when he claims to be "entitled to a public office or position usurped or unlawfully held or exercised
by another." 18 While the quo warranto proceedings filed below by petitioner municipality has so named only the officials
of the Municipality of San Andres as respondents, it is virtually, however, a denunciation of the authority of the
Municipality or Municipal District of San Andres to exist and to act in that capacity.

At any rate, in the interest of resolving any further doubt on the legal status of the Municipality of San Andres, the Court
shall delve into the merits of the petition.

While petitioners would grant that the enactment of Republic Act

No. 7160 may have converted the Municipality of San Andres into a de facto municipality, they, however, contend that
since the petition for quo warranto had been filed prior to the passage of said law, petitioner municipality had acquired a
vested right to seek the nullification of Executive Order No. 353, and any attempt to apply Section 442 of Republic Act
7160 to the petition would perforce be violative of due process and the equal protection clause of the Constitution.

Petitioners' theory might perhaps be a point to consider had the case been seasonably brought. Executive Order No. 353
creating the municipal district of San Andres was issued on 20 August 1959 but it was only after almost thirty (30) years,
or on 05 June 1989, that the municipality of San Narciso finally decided to challenge the legality of the executive order. In
the meantime, the Municipal District, and later the Municipality, of San Andres, began and continued to exercise the
powers and authority of a duly created local government unit. In the same manner that the failure of a public officer to
question his ouster or the right of another to hold a position within a one-year period can abrogate an action belatedly
filed, 19 so also, if not indeed with greatest imperativeness, must a quo warranto proceeding assailing the lawful authority
of a political subdivision be timely raised. 20 Public interest
demands it.

Granting the Executive Order No. 353 was a complete nullity for being the result of an unconstitutional delegation of
legislative power, the peculiar circumstances obtaining in this case hardly could offer a choice other than to consider the
Municipality of San Andres to have at least attained a status uniquely of its own closely approximating, if not in fact
attaining, that of a de facto municipal corporation. Conventional wisdom cannot allow it to be otherwise. Created in 1959
by virtue of Executive Order No. 353, the Municipality of San Andres had been in existence for more than six years when,
on 24 December 1965, Pelaez v. Auditor General was promulgated. The ruling could have sounded the call for a similar
declaration of the unconstitutionality of Executive Order No. 353 but it was not to be the case. On the contrary, certain
governmental acts all pointed to the State's recognition of the continued existence of the Municipality of San Andres. Thus,
after more than five years as a municipal district, Executive Order No. 174 classified the Municipality of San Andres as a
fifth class municipality after having surpassed the income requirement laid out in Republic Act No. 1515. Section 31 of
Batas Pambansa Blg. 129, otherwise known as the Judiciary Reorganization Act of 1980, constituted as municipal circuits,
in the establishment of Municipal Circuit Trial Courts in the country, certain municipalities that comprised the municipal
circuits organized under Administrative Order No. 33, dated 13 June 1978, issued by this Court pursuant to Presidential
Decree No. 537. Under this administrative order, the Municipality of San Andres had been covered by the 10th Municipal
Circuit Court of San Francisco-San Andres for the province of Quezon.

At the present time, all doubts on the de jure standing of the municipality must be dispelled. Under the Ordinance
(adopted on 15 October 1986) apportioning the seats of the House of Representatives, appended to the 1987 Constitution,
the Municipality of San Andres has been considered to be one of the twelve (12) municipalities composing the Third
District of the province of Quezon. Equally significant is Section 442(d) of the Local Government Code to the effect that
municipal districts "organized pursuant to presidential issuances or executive orders and which have their respective sets
of elective municipal officials holding office at the time of the effectivity of (the) Code shall henceforth be considered as
regular municipalities." No pretension of unconstitutionality per se of Section 442(d) of the Local Government Code is
proferred. It is doubtful whether such a pretext, even if made, would succeed. The power to create political subdivisions
is a function of the legislature. Congress did just that when it has incorporated Section 442(d) in the Code. Curative laws,
which in essence are retrospective, 21 and aimed at giving "validity to acts done that would have been invalid under existing
laws, as if existing laws have been complied with," are validly accepted in this jurisdiction, subject to the usual qualification
against impairment of vested rights. 22

All considered, the de jure status of the Municipality of San Andres in the province of Quezon must now be conceded.

WHEREFORE, the instant petition for certiorari is hereby DISMISSED. Costs against petitioners.

THIRD DIVISION

G.R. No. 116702 December 28, 1995

THE MUNICIPALITY OF CANDIJAY, BOHOL, acting through its Sanguniang Bayan and Mayor, petitioner,
vs.
COURT OF APPEALS and THE MUNICIPALITY OF ALICIA, BOHOL, respondents.

RESOLUTION

PANGANIBAN, J.:

This is a petition for review on certiorari of the Decision of the Court of Appeals 1 promulgated on June 28,
1994, reversing the judgment 2 of the Regional Trial Court (Branch I) of the City of Tagbilaran, Bohol.

The lower court's decision, among other things, declared "barrio/barangay Pagahat as within the territorial jurisdiction of
the plaintiff municipality of Candijay, Bohol, therefore, said barrio forms part and parcel of its territory, therefore,
belonging to said plaintiff municipality", and further permanently enjoined defendant municipality of Alicia "to respect
plaintiff's control, possession and political supervision of barangay Pagahat and never to molest, disturb, harass its
possession and ownership over the same barrio" (RTC decision, p. 4; Rollo, p. 86).

On appeal, the respondent Court stated that "(S)crutiny of the conflicting claims and the respective evidence of the parties
lead to the conclusion that the trial court committed an error in declaring that Barrio Pagahat is within the territorial
jurisdiction of plaintiff-appellee (municipality of Candijay)." Said Court rejected the boundary line being claimed by
petitioner based on certain exhibits, since it would in effect place "practically all of Barrio Pagahat . . . , part of Barrio
Cagongcagong and portions of Barrio Putlongcam and La Hacienda and all of Barrio Mahayag and Barrio del Monte within
the territorial jurisdiction of plaintiff-appellee Candijay." Added the respondent Court, "As aptly pointed out by defendant-
appellant in its appeal brief, 'the plaintiff municipality will not only engulf the entire barrio of Pagahat, but also of the
barrios of Putlongcam, Mahayag, Del Monte, Cagongcagong, and a part of the Municipality of Mabini. Candijay will eat up
a big chunk of territories far exceeding her territorial jurisdiction under the law creating her. Her claim opens the floodgate
of controversies over boundaries, including with Mabini.'" (Decision p. 4; rollo, p. 35.) The respondent Court concluded
that "the trial court erred in relying on Exh. X-Commissioner [exhibit for petitioner], because, in effect, it included portions
of Barrios Putlongcam and La Hacienda within the jurisdiction of appellee Candijay when said barrios are undisputedly
part of appellant's (Alicia) territory under Executive Order No. 265 creating the latter" (Decision, p. 6, rollo, p. 37).

The respondent Court also found, after an examination of the respective survey plans of petitioner and respondent
submitted as exhibits, that "both plans are inadequate insofar as identifying the monuments of the boundary line between
[petitioner] and the Municipality of Mabini (which is not a party to this case) as declared by the Provincial Board of Bohol.
Neither plan shows where Looc-Tabasan, Lomislis Island, Tagtang Canlirong, mentioned in the aforequoted boundary line
declared by the Provincial Board of Bohol, are actually located." (Decision, p. 4; rollo, p. 35.) The respondent Court, after
weighing and considering the import of certain official acts, including Executive Order No. 265 dated September 16, 1949
(which created the municipality of Alicia from out of certain barrios of the municipality of Mabini), and Act No. 968 of the
Philippine Commission dated October 31, 1903 (which set forth the respective component territories of the municipalities
of Mabini and Candijay), concluded that "Barrio Bulawan from where barrio Pagahat originated is not mentioned as one
of the barrios constituted as part of defendant-appellant Municipality of Alicia. Neither do they show that Barrio Pagahat
forms part of plaintiff-appellant Municipality of Candijay."

On that basis, the respondent Court held that:

Clearly, from the foregoing, there is equiponderance of evidence. The Supreme Court has ruled:

Equiponderance of evidence rule states:

When the scale shall stand upon an equipoise and there is nothing in the evidence which shall incline it to one side or the
other, the court will find for the defendant.

Under said principle, the plaintiff must rely on the strength of his evidence and not on the weakness of defendant's claim.
Even if the evidence of the plaintiff may be stronger than that of the defendant, there is no preponderance of evidence
on his side if such evidence is insufficient in itself to establish his cause of action.

(Sapu-an, et al. v. Court of Appeals, Oct. 19, 1992, 214 SCRA 701, 705-706.)

WHEREFORE, the appealed judgment is reversed and set aside. Another judgment is hereby entered dismissing the
complaint in Civil Case No. 2402. No costs. (Decision, p. 6, rollo, p. 37.)

Petitioner's motion for reconsideration having been rejected by the respondent Court, petitioner came to this Court,
alleging (i) improper application by the respondent Court of Appeals of the so-called principle of "equiponderance of
evidence", for having based its ruling against petitioner on documentary evidence which, petitioner claims, are void, (ii)
the respondent municipality's purported lack of juridical personality, as a result of having been created under a void
executive order, and (iii) that the challenged Decision "does not solve the problem of both towns but throws them back
again to their controversy." (Petition, p. 6, rollo, p. 21.)

After deliberating on the petition, comment and reply, this Court is not persuaded to grant due course to the petition.

With respect to the first and third grounds, we find that the issues of fact in this case had been adequately passed upon
by respondent Court in its Decision, which is well-supported by the evidence on record. The determination of
equiponderance of evidence by the respondent Court involves the appreciation of evidence by the latter tribunal, which
will not be reviewed by this Court unless shown to be whimsical or capricious; here, there has been no such showing.

In connection with the foregoing, that the assailed Decision, in dismissing the complaint in Civil Case No. 2402, may leave
the parties where they are or may not resolve their problem one way or the other, is of no moment. The fact remains that,
as correctly evaluated by the respondent Court, neither party was able to make out a case; neither side could establish its
cause of action and prevail with the evidence it had. They are thus no better off than before they proceeded to litigate,
and, as a consequence thereof, the courts can only leave them as they are. In such cases, courts have no choice but to
dismiss the complaints/petitions.

On the second issue, we noted that petitioner commenced its collateral attack on the juridical personality of respondent
municipality on 19 January 1984 (or some thirty five years after respondent municipality first came into existence in 1949)
during the proceedings in the court a quo. It appears that, after presentation of its evidence, herein petitioner asked the
trial court to bar respondent municipality from presenting its evidence on the ground that it had no juridical personality.
Petitioner contended that Exec. Order No. 265 issued by President Quirino on September 16, 1949 creating respondent
municipality is null and void ab initio, inasmuch as Section 68 of the Revised Administrative Code, on which said Executive
Order was based, constituted an undue delegation of legislative powers to the President of the Philippines, and was
therefore declared unconstitutional, per this Court's ruling in Pelaez vs. Auditor General. 3

In this regard, we call to mind the ruling of this Court in Municipality of San Narciso, Quezon vs. Mendez, Sr. 4 , which will
be found very instructive in the case at bench. Therein we stated:

While petitioners would grant that the enactment of Republic Act No. 7160 [Local Government Code of 1991] may have
converted the Municipality of San Andres into a de facto municipality, they, however, contend that since the petition
for quo warranto had been filed prior to the passage of said law, petitioner municipality had acquired a vested right to
seek the nullification of Executive Order No. 353, and any attempt to apply Section 442 of Republic Act 7160 to the petition
would perforce be violative of due process and the equal protection clause of the Constitution.

Petitioner's theory might perhaps be a point to consider had the case been seasonably brought. Executive Order No. 353
creating the municipal district of San Andres was issued on 20 August 1959 but it was only after almost thirty (30) years,
or on 05 June 1989, that the municipality of San Narciso finally decided to challenge the legality of the executive order. In
the meantime, the Municipal district, and later the Municipality of San Andres, began and continued to exercise the
powers and authority of a duly created local government unit. In the same manner that the failure of a public officer to
question his ouster or the right of another to hold a position within a one-year period can abrogate an action belatedly
file, so also, if not indeed with greatest imperativeness, must a quo warranto proceeding assailing the lawful authority of
a political subdivision be timely raised. Public interest demands it.

Granting that Executive Order No. 353 was a complete nullity for being the result of an unconstitutional delegation of
legislative power, the peculiar circumstances obtaining in this case hardly could offer a choice other than to consider the
Municipality of San Andres to have at least attained a status uniquely of its own closely approximating, if not in fact
attaining, that of a de facto municipal corporation. Conventional wisdom cannot allow it to be otherwise. Created in 1959
by virtue of Executive Order No. 353, the Municipality of San Andres had been in existence for more than six years when,
on 24 December 1965, Pelaez vs. Auditor General was promulgated. The ruling could have sounded the call for a similar
declaration of the unconstitutionality of Executive Order No. 353 but it was not to be the case. On the contrary, certain
governmental acts all pointed to the State's recognition of the continued existence of the Municipality of San Andres. Thus,
after more than five years as a municipal district, Executive Order No. 174 classified the Municipality of San Andres as a
fifth class municipality after having surpassed the income requirement laid out in Republic Act No. 1515. Section 31 of
Batas Pambansa Blg. 129, otherwise known as the Judiciary Reorganization Act of 1980, constituted as municipal circuits,
in the establishment of Municipal Circuit Trial Courts in the country, certain municipalities that comprised the municipal
circuits organized under Administrative Order No. 33, dated 13 June 1978, issued by this court pursuant to Presidential
Decree No. 537. Under this administrative order, the Municipality of San Andres had been covered by the 10th Municipal
Circuit Court of San Francisco-San Andres for the province of Quezon.
At the present time, all doubts on the de jure standing of the municipality must be dispelled. Under the Ordinance
(adopted on 15 October 1986) apportioning the seats of the House of Representatives, appended to the 1987 Constitution,
the Municipality of San Andres has been considered to be one of the twelve (12) municipalities composing the Third
District of the province of Quezon. Equally significant is Section 442 (d) of the Local Government Code to the effect that
municipal districts "organized pursuant to presidential issuances or executive orders and which have their respective sets
of elective municipal officials holding office at the time of the effectivity of (the) Code shall henceforth be considered as
regular municipalities." No pretension of unconstitutionality per se of Section 442 (d) of the Local Government Code is
proffered. It is doubtful whether such a pretext, even if made, would succeed. The power to create political subdivisions
is a function of the legislature. Congress did just that when it has incorporated Section 442 (d) in the Code. Curative laws,
which in essence are retrospective, and aimed at giving "validity to acts done that would have been invalid under existing
laws, as if existing laws have been complied with," are validly accepted in this jurisdiction, subject to the usual qualification
against impairment of vested rights.

All considered, the de jure status of the Municipality of San Andres in the province of Quezon must now be conceded.

Respondent municipality's situation in the instant case is strikingly similar to that of the municipality of San Andres.
Respondent municipality of Alicia was created by virtue of Executive Order No. 265 in 1949, or ten years ahead of the
municipality of San Andres, and therefore had been in existence for all of sixteen years when Pelaez vs. Auditor
General was promulgated. And various governmental acts throughout the years all indicate the State's recognition and
acknowledgment of the existence thereof. For instance, under Administrative Order No. 33 above-mentioned, the
Municipality of Alicia was covered by the 7th Municipal Circuit Court of Alicia-Mabini for the province of Bohol. Likewise,
under the Ordinance appended to the 1987 Constitution, the Municipality of Alicia is one of twenty municipalities
comprising the Third District of Bohol.

Inasmuch as respondent municipality of Alicia is similarly situated as the municipality of San Andres, it should likewise
benefit from the effects of Section 442 (d) of the Local Government Code, and should henceforth be considered as a
regular, de jure municipality.

WHEREFORE, the instant petition for review on certiorari is hereby DENIED, with costs against petitioner.

SO ORDERED.

EN BANC

[G.R. No. 161414. January 17, 2005]

SULTAN OSOP B. CAMID, petitioner, vs. THE OFFICE OF THE PRESIDENT, DEPARTMENT OF THE INTERIOR AND LOCAL
GOVERNMENT, AUTONOMOUS REGION IN MUSLIM MINDANAO, DEPARTMENT of FINANCE, DEPARTMENT of BUDGET
AND MANAGEMENT, COMMISSION ON AUDIT, and the CONGRESS OF THE PHILIPPINES (HOUSE of REPRESENTATIVES
AND SENATE), respondents.

DECISION

TINGA, J.:

This Petition for Certiorari presents this Court with the prospect of our own Brigadoon[1]the municipality of Andong, Lanao
del Surwhich like its counterpart in filmdom, is a town that is not supposed to exist yet is anyway insisted by some as
actually alive and thriving. Yet unlike in the movies, there is nothing mystical, ghostly or anything even remotely charming
about the purported existence of Andong. The creation of the putative municipality was declared void ab initio by this
Court four decades ago, but the present petition insists that in spite of this insurmountable obstacle Andong thrives on,
and hence, its legal personality should be given judicial affirmation. We disagree.

The factual antecedents derive from the promulgation of our ruling in Pelaez v. Auditor General[2] in 1965. As discussed
therein, then President Diosdado Macapagal issued several Executive Orders [3] creating thirty-three (33) municipalities in
Mindanao. Among them was Andong in Lanao del Sur which was created by virtue of Executive Order No. 107. [4]

These executive orders were issued after legislative bills for the creation of municipalities involved in that case had failed
to pass Congress.[5] President Diosdado Macapagal justified the creation of these municipalities citing his powers under
Section 68 of the Revised Administrative Code. Then Vice-President Emmanuel Pelaez filed a special civil action for a writ
of prohibition, alleging in main that the Executive Orders were null and void, Section 68 having been repealed by Republic
Act No. 2370,[6] and said orders constituting an undue delegation of legislative power.[7]

After due deliberation, the Court unanimously held that the challenged Executive Orders were null and void. A majority
of five justices, led by the ponente, Justice (later Chief Justice) Roberto Concepcion, ruled that Section 68 of the Revised
Administrative Code did not meet the well-settled requirements for a valid delegation of legislative power to the executive
branch,[8] while three justices opined that the nullity of the issuances was the consequence of the enactment of the 1935
Constitution, which reduced the power of the Chief Executive over local governments.[9] Pelaez was disposed in this wise:

WHEREFORE, the Executive Orders in question are declared null and void ab initio and the respondent permanently
restrained from passing in audit any expenditure of public funds in implementation of said Executive Orders or any
disbursement by the municipalities above referred to. It is so ordered. [10]

Among the Executive Orders annulled was Executive Order No. 107 which created the Municipality of Andong.
Nevertheless, the core issue presented in the present petition is the continued efficacy of the judicial annulment of the
Municipality of Andong.

Petitioner Sultan Osop B. Camid (Camid) represents himself as a current resident of Andong, [11] suing as a private citizen
and taxpayer whose locus standi is of public and paramount interest especially to the people of the Municipality of Andong,
Province of Lanao del Sur.[12] He alleges that Andong has metamorphosed into a full-blown municipality with a complete
set of officials appointed to handle essential services for the municipality and its constituents, [13] even though he concedes
that since 1968, no person has been appointed, elected or qualified to serve any of the elective local government positions
of Andong.[14] Nonetheless, the municipality of Andong has its own high school, Bureau of Posts, a Department of
Education, Culture and Sports office, and at least seventeen (17) barangay units with their own respective
chairmen.[15] From 1964 until 1972, according to Camid, the public officials of Andong have been serving their constituents
through the minimal means and resources with least (sic) honorarium and recognition from the Office of the then former
President Diosdado Macapagal. Since the time of Martial Law in 1972, Andong has allegedly been getting by despite the
absence of public funds, with the Interim Officials serving their constituents in their own little ways and means. [16]

In support of his claim that Andong remains in existence, Camid presents to this Court a Certification issued by the Office
of the Community Environment and Natural Resources (CENRO) of the Department of Environment and Natural Resources
(DENR) certifying the total land area of the Municipality of Andong, created under Executive Order No. 107 issued [last]
October 1, 1964.[17] He also submits a Certification issued by the Provincial Statistics Office of Marawi City concerning the
population of Andong, which is pegged at fourteen thousand fifty nine (14,059) strong. Camid also enumerates a list of
governmental agencies and private groups that allegedly recognize Andong, and notes that other municipalities have
recommended to the Speaker of the Regional Legislative Assembly for the immediate implementation of the revival or re-
establishment of Andong.[18]

The petition assails a Certification dated 21 November 2003, issued by the Bureau of Local Government Supervision of the
Department of Interior and Local Government (DILG).[19] The Certification enumerates eighteen (18) municipalities
certified as existing, per DILG records. Notably, these eighteen (18) municipalities are among the thirty-three (33), along
with Andong, whose creations were voided by this Court in Pelaez. These municipalities are Midaslip, Pitogo, Naga, and
Bayog in Zamboanga del Sur; Siayan and Pres. Manuel A. Roxas in Zamboanga del Norte; Magsaysay, Sta. Maria and New
Corella in Davao; Badiangan and Mina in Iloilo; Maguing in Lanao del Sur; Gloria in Oriental Mindoro; Maasim in Sarangani;
Kalilangan and Lantapan in Bukidnon; and Maco in Compostela Valley. [20]

Camid imputes grave abuse of discretion on the part of the DILG in not classifying [Andong] as a regular existing
municipality and in not including said municipality in its records and official database as [an] existing regular
municipality.[21] He characterizes such non-classification as unequal treatment to the detriment of Andong, especially in
light of the current recognition given to the eighteen (18) municipalities similarly annulled by reason of Pelaez. As
appropriate relief, Camid prays that the Court annul the DILG Certification dated 21 November 2003; direct the DILG to
classify Andong as a regular existing municipality; all public respondents, to extend full recognition and support to Andong;
the Department of Finance and the Department of Budget and Management, to immediately release the internal revenue
allotments of Andong; and the public respondents, particularly the DILG, to recognize the Interim Local Officials of
Andong.[22]

Moreover, Camid insists on the continuing validity of Executive Order No. 107. He argues that Pelaez has already been
modified by supervening events consisting of subsequent laws and jurisprudence. Particularly cited is our Decision in
Municipality of San Narciso v. Hon. Mendez,[23] wherein the Court affirmed the unique status of the municipality of San
Andres in Quezon as a de facto municipal corporation.[24] Similar to Andong, the municipality of San Andres was created
by way of executive order, precisely the manner which the Court in Pelaez had declared as unconstitutional.
Moreover, San Narciso cited, as Camid does, Section 442(d) of the Local Government Code of 1991 as basis for the current
recognition of the impugned municipality. The provision reads:

Section 442. Requisites for Creation. - xxx

(d) Municipalities existing as of the date of the effectivity of this Code shall continue to exist and operate as such. Existing
municipal districts organized pursuant to presidential issuances or executive orders and which have their respective sets
of elective municipal officials holding office at the time of the effectivity of (the) Code shall henceforth be considered as
regular municipalities.[25]

There are several reasons why the petition must be dismissed. These can be better discerned upon examination of the
proper scope and application of Section 442(d), which does not sanction the recognition of just any municipality. This
point shall be further explained further on.

Notably, as pointed out by the public respondents, through the Office of the Solicitor General (OSG), the case is not a fit
subject for the special civil actions of certiorari and mandamus, as it pertains to the de novo appreciation of factual
questions. There is indeed no way to confirm several of Camids astonishing factual allegations pertaining to the purported
continuing operation of Andong in the decades since it was annulled by this Court. No trial court has had the opportunity
to ascertain the validity of these factual claims, the appreciation of which is beyond the function of this Court since it is
not a trier of facts.

The importance of proper factual ascertainment cannot be gainsaid, especially in light of the legal principles governing the
recognition of de facto municipal corporations. It has been opined that municipal corporations may exist by prescription
where it is shown that the community has claimed and exercised corporate functions, with the knowledge and
acquiescence of the legislature, and without interruption or objection for period long enough to afford title by
prescription.[26] These municipal corporations have exercised their powers for a long period without objection on the part
of the government that although no charter is in existence, it is presumed that they were duly incorporated in the first
place and that their charters had been lost. [27] They are especially common in England, which, as well-worth noting, has
existed as a state for over a thousand years. The reason for the development of that rule in England is understandable,
since that country was settled long before the Roman conquest by nomadic Celtic tribes, which could have hardly been
expected to obtain a municipal charter in the absence of a national legal authority.

In the United States, municipal corporations by prescription are less common, but it has been held that when no charter
or act of incorporation of a town can be found, it may be shown to have claimed and exercised the powers of a town with
the knowledge and assent of the legislature, and without objection or interruption for so long a period as to furnish
evidence of a prescriptive right.[28]

What is clearly essential is a factual demonstration of the continuous exercise by the municipal corporation of its corporate
powers, as well as the acquiescence thereto by the other instrumentalities of the state. Camid does not have the
opportunity to make an initial factual demonstration of those circumstances before this Court. Indeed, the factual
deficiencies aside, Camids plaint should have undergone the usual administrative gauntlet and, once that was done, should
have been filed first with the Court of Appeals, which at least would have had the power to make the necessary factual
determinations. Camids seeming ignorance of the principles of exhaustion of administrative remedies and hierarchy of
courts, as well as the concomitant prematurity of the present petition, cannot be countenanced.

It is also difficult to capture the sense and viability of Camids present action. The assailed issuance is
the Certification issued by the DILG. But such Certification does not pretend to bear the authority to create or revalidate
a municipality. Certainly, the annulment of the Certification will really do nothing to serve Camids ultimate cause- the
recognition of Andong. Neither does the Certification even expressly refute the claim that Andong still exists, as there is
nothing in the document that comments on the present status of Andong. Perhaps the Certificationis assailed before this
Court if only to present an actual issuance, rather than a long-standing habit or pattern of action that can be annulled
through the special civil action of certiorari. Still, the relation of the Certification to Camids central argument is forlornly
strained.

These disquisitions aside, the central issue remains whether a municipality whose creation by executive fiat was previously
voided by this Court may attain recognition in the absence of any curative or reimplementing statute. Apparently, the
question has never been decided before, San Narciso and its kindred cases pertaining as they did to municipalities whose
bases of creation were dubious yet were never judicially nullified. The effect of Section 442(d) of the Local Government
Code on municipalities such as Andong warrants explanation. Besides, the residents of Andong who belabor under the
impression that their town still exists, much less those who may comport themselves as the municipalitys Interim
Government, would be well served by a rude awakening.

The Court can employ a simplistic approach in resolving the substantive aspect of the petition, merely by pointing out that
the Municipality of Andong never existed. [29] Executive Order No. 107, which established Andong, was declared null and
void ab initio in 1965 by this Court in Pelaez, along with thirty-three (33) other executive orders. The phrase ab
initio means from the beginning,[30] at first,[31] from the inception.[32] Pelaez was never reversed by this Court but rather it
was expressly affirmed in the cases of Municipality of San Joaquin v. Siva,[33]Municipality of Malabang v. Benito,[34] and
Municipality of Kapalong v. Moya.[35] No subsequent ruling by this Court declared Pelaez as overturned or inoperative. No
subsequent legislation has been passed since 1965 creating a Municipality of Andong. Given these facts, there is hardly
any reason to elaborate why Andong does not exist as a duly constituted municipality.

This ratiocination does not admit to patent legal errors and has the additional virtue of blessed austerity. Still, its sweeping
adoption may not be advisedly appropriate in light of Section 442(d) of the Local Government Code and our ruling
in Municipality of San Narciso, both of which admit to the possibility of de facto municipal corporations.

To understand the applicability of Municipality of San Narciso and Section 442(b) of the Local Government Code to the
situation of Andong, it is necessary again to consider the ramifications of our decision in Pelaez.

The eminent legal doctrine enunciated in Pelaez was that the President was then, and still is, not empowered to create
municipalities through executive issuances. The Court therein recognized that the President has, for many years, issued
executive orders creating municipal corporations, and that the same have been organized and in actual
operation . . . .[36]However, the Court ultimately nullified only those thirty-three (33) municipalities, including Andong,
created during the period from 4 September to 29 October 1964 whose existence petitioner Vice-President Pelaez had
specifically assailed before this Court. No pronouncement was made as to the other municipalities which had been
previously created by the President in the exercise of power the Court deemed unlawful.
Two years after Pelaez was decided, the issue again came to fore in Municipality of San Joaquin v. Siva.[37] The Municipality
of Lawigan was created by virtue of Executive Order No. 436 in 1961. Lawigan was not one of the municipalities ordered
annulled in Pelaez. A petition for prohibition was filed contesting the legality of the executive order, again on the ground
that Section 68 of the Revised Administrative Code was unconstitutional. The trial court dismissed the petition, but the
Supreme Court reversed the ruling and entered a new decision declaring Executive Order No. 436 void ab initio. The Court
reasoned without elaboration that the issue had already been squarely taken up and settled in Pelaez which agreed with
the argument posed by the challengers to Lawigans validity. [38]

In the 1969 case of Municipality of Malabang v. Benito,[39] what was challenged is the validity of the constitution of the
Municipality of Balabagan in Lanao del Sur, also created by an executive order, [40] and which, similar to Lawigan, was not
one of the municipalities annulled in Pelaez. This time, the officials of Balabagan invoked de facto status as a municipal
corporation in order to dissuade the Court from nullifying action. They alleged that its status as a de facto corporation
cannot be collaterally attacked but should be inquired into directly in an action for quo warranto at the instance of the
State, and not by a private individual as it was in that case. In response, the Court conceded that an inquiry into the legal
existence of a municipality is reserved to the State in a proceeding for quo warranto, but only if the municipal corporation
is a de facto corporation.[41]

Ultimately, the Court refused to acknowledge Balabagan as a de facto corporation, even though it had been organized
prior to the Courts decision in Pelaez. The Court declared void the executive order creating Balabagan and restrained its
municipal officials from performing their official duties and functions. [42] It cited conflicting American authorities on
whether a de facto corporation can exist where the statute or charter creating it is unconstitutional. [43] But the Courts final
conclusion was unequivocal that Balabagan was not a de facto corporation.

In the cases where a de facto municipal corporation was recognized as such despite the fact that the statute creating it
was later invalidated, the decisions could fairly be made to rest on the consideration that there was some other valid law
giving corporate vitality to the organization. Hence, in the case at bar, the mere fact that Balabagan was organized at a
time when the statute had not been invalidated cannot conceivably make it a de facto corporation, as, independently of
the Administrative Code provision in question, there is no other valid statute to give color of authority to its creation. [44]

The Court did clarify in Malabang that the previous acts done by the municipality in the exercise of its corporate powers
were not necessarily a nullity.[45] Camid devotes several pages of his petition in citing this point, [46] yet the relevance of the
citation is unclear considering that Camid does not assert the validity of any corporate act of Andong prior to its judicial
dissolution. Notwithstanding, the Court in Malabang retained an emphatic attitude as to the unconstitutionality of the
power of the President to create municipal corporations by way of presidential promulgations, as authorized under Section
68 of the Revised Administrative Code.

This principle was most recently affirmed in 1988, in Municipality of Kapalong v. Moya.[47] The municipality of Santo Tomas,
created by President Carlos P. Garcia, filed a complaint against another municipality, who challenged Santo Tomass legal
personality to institute suit. Again, Santo Tomas had not been expressly nullified by prior judicial action, yet the Court
refused to recognize its legal existence. The blunt but simple ruling: Now then, as ruled in the Pelaez case supra, the
President has no power to create a municipality. Since [Santo Tomas] has no legal personality, it can not be a party to any
civil action.[48]

Nevertheless, when the Court decided Municipality of San Narciso[49] in 1995, it indicated a shift in the jurisprudential
treatment of municipalities created through presidential issuances. The questioned municipality of San Andres, Quezon
was created on 20 August 1959 by Executive Order No. 353 issued by President Carlos P. Garcia. Executive Order No. 353
was not one of the thirty-three issuances annulled by Pelaez in 1965. The legal status of the Municipality of San Andres
was first challenged only in 1989, through a petition for quo warranto filed with the Regional Trial Court of Gumaca,
Quezon, which did cite Pelaez as authority.[50] The RTC dismissed the petition for lack of cause of action, and the
petitioners therein elevated the matter to this Court.
In dismissing the petition, the Court delved in the merits of the petition, if only to resolve further doubt on the legal status
of San Andres. It noted a circumstance which is not present in the case at barthat San Andres was in existence for nearly
thirty (30) years before its legality was challenged. The Court did not declare the executive order creating San Andres null
and void. Still, acting on the premise that the said executive order was a complete nullity, the Court noted peculiar
circumstances that led to the conclusion that San Andres had attained the unique status of a de facto municipal
corporation.[51] It noted that Pelaez limited its nullificatory effect only to those executive orders specifically challenged
therein, despite the fact that the Court then could have very well extended the decision to invalidate San Andres as
well.[52] This statement squarely contradicts Camids reading of San Narciso that the creation of San Andres, just like
Andong, had been declared a complete nullity on the same ground of unconstitutional delegation of legislative power
found in Pelaez.[53]

The Court also considered the applicability of Section 442(d) [54] of the Local Government Code of 1991. It clarified the
implication of the provision as follows:

Equally significant is Section 442(d) of the Local Government Code to the effect that municipal districts "organized
pursuant to presidential issuances or executive orders and which have their respective sets of elective municipal officials
holding office at the time of the effectivity of (the) Code shall henceforth be considered as regular municipalities." No
pretension of unconstitutionality per se of Section 442(d) of the Local Government Code is preferred. It is doubtful
whether such a pretext, even if made, would succeed. The power to create political subdivisions is a function of the
legislature. Congress did just that when it has incorporated Section 442(d) in the Code. Curative laws, which in essence
are retrospective, and aimed at giving "validity to acts done that would have been invalid under existing laws, as if existing
laws have been complied with," are validly accepted in this jurisdiction, subject to the usual qualification against
impairment of vested rights. (Emphasis supplied) [55]

The holding in San Narciso was subsequently affirmed in Municipality of Candijay v. Court of Appeals[56] and Municipality
of Jimenez v. Baz[57] In Candijay, the juridical personality of the Municipality of Alicia, created in a 1949 executive order,
was attacked only beginning in 1984. Pelaez was again invoked in support of the challenge, but the Court refused to
invalidate the municipality, citing San Narciso at length. The Court noted that the situation of the Municipality of Alicia
was strikingly similar to that in San Narciso; hence, the town should likewise benefit from the effects of Section 442(d) of
the Local Government Code, and should [be] considered as a regular, de jure municipality. [58]

The valid existence of Municipality of Sinacaban, created in a 1949 executive order, was among the issues raised in Jimenez.
The Court, through Justice Mendoza, provided an expert summation of the evolution of the rule.

The principal basis for the view that Sinacaban was not validly created as a municipal corporation is the ruling in Pelaez v.
Auditor General that the creation of municipal corporations is essentially a legislative matter and therefore the President
was without power to create by executive order the Municipality of Sinacaban. The ruling in this case has been reiterated
in a number of cases later decided. However, we have since held that where a municipality created as such by executive
order is later impliedly recognized and its acts are accorded legal validity, its creation can no longer be questioned.
In Municipality of San Narciso, Quezon v. Mendez, Sr., this Court considered the following factors as having validated the
creation of a municipal corporation, which, like the Municipality of Sinacaban, was created by executive order of the
President before the ruling in Pelaez v. Auditor General: (1) the fact that for nearly 30 years the validity of the creation of
the municipality had never been challenged; (2) the fact that following the ruling in Pelaez no quo warranto suit was filed
to question the validity of the executive order creating such municipality; and (3) the fact that the municipality was later
classified as a fifth class municipality, organized as part of a municipal circuit court and considered part of a legislative
district in the Constitution apportioning the seats in the House of Representatives. Above all, it was held that whatever
doubt there might be as to the de jure character of the municipality must be deemed to have been put to rest by the Local
Government Code of 1991 (R. A. No. 7160), 442(d) of which provides that "municipal districts organized pursuant to
presidential issuances or executive orders and which have their respective sets of elective officials holding office at the
time of the effectivity of this Code shall henceforth be considered as regular municipalities."
Here, the same factors are present so as to confer on Sinacaban the status of at least a de facto municipal corporation in
the sense that its legal existence has been recognized and acquiesced publicly and officially. Sinacaban had been in
existence for sixteen years when Pelaez v. Auditor General was decided on December 24, 1965. Yet the validity of E.O. No.
258 creating it had never been questioned. Created in 1949, it was only 40 years later that its existence was questioned
and only because it had laid claim to an area that apparently is desired for its revenue. This fact must be underscored
because under Rule 66, 16 of the Rules of Court, a quo warranto suit against a corporation for forfeiture of its charter
must be commenced within five (5) years from the time the act complained of was done or committed. On the contrary,
the State and even the Municipality of Jimenez itself have recognized Sinacaban's corporate existence. Under
Administrative Order No. 33 dated June 13, 1978 of this Court, as reiterated by 31 of the Judiciary Reorganization Act of
1980 (B. P. Blg. 129), Sinacaban is constituted part of a municipal circuit for purposes of the establishment of Municipal
Circuit Trial Courts in the country. For its part, Jimenez had earlier recognized Sinacaban in 1950 by entering into an
agreement with it regarding their common boundary. The agreement was embodied in Resolution No. 77 of the Provincial
Board of Misamis Occidental.

Indeed Sinacaban has attained de jure status by virtue of the Ordinance appended to the 1987 Constitution, apportioning
legislative districts throughout the country, which considered Sinacaban part of the Second District of Misamis Occidental.
Moreover, following the ruling in Municipality of San Narciso, Quezon v. Mendez, Sr., 442(d) of the Local Government
Code of 1991 must be deemed to have cured any defect in the creation of Sinacaban. [59]

From this survey of relevant jurisprudence, we can gather the applicable rules. Pelaez and its offspring cases ruled that
the President has no power to create municipalities, yet limited its nullificatory effects to the particular municipalities
challenged in actual cases before this Court. However, with the promulgation of the Local Government Code in 1991, the
legal cloud was lifted over the municipalities similarly created by executive order but not judicially annulled. The de
facto status of such municipalities as San Andres, Alicia and Sinacaban was recognized by this Court, and Section 442(b)
of the Local Government Code deemed curative whatever legal defects to title these municipalities had labored under.

Is Andong similarly entitled to recognition as a de facto municipal corporation? It is not. There are eminent differences
between Andong and municipalities such as San Andres, Alicia and Sinacaban. Most prominent is the fact that the
executive order creating Andong was expressly annulled by order of this Court in 1965. If we were to affirm Andongs de
facto status by reason of its alleged continued existence despite its nullification, we would in effect be condoning defiance
of a valid order of this Court. Court decisions cannot obviously lose their efficacy due to the sheer defiance by the parties
aggrieved.

It bears noting that based on Camids own admissions, Andong does not meet the requisites set forth by Section 442(d) of
the Local Government Code. Section 442(d) requires that in order that the municipality created by executive order may
receive recognition, they must have their respective set of elective municipal officials holding office at the time of the
effectivity of [the Local Government] Code. Camid admits that Andong has never elected its municipal officers at all. [60] This
incapacity ties in with the fact that Andong was judicially annulled in 1965. Out of obeisance to our ruling in Pelaez, the
national government ceased to recognize the existence of Andong, depriving it of its share of the public funds, and refusing
to conduct municipal elections for the void municipality.

The failure to appropriate funds for Andong and the absence of elections in the municipality in the last four decades are
eloquent indicia of the non-recognition by the State of the existence of the town. The certifications relied upon by Camid,
issued by the DENR-CENRO and the National Statistics Office, can hardly serve the purpose of attesting to Andongs legal
efficacy. In fact, both these certifications qualify that they were issued upon the request of Camid, to support the
restoration or re-operation of the Municipality of Andong, Lanao del Sur,[61]thus obviously conceding that the municipality
is at present inoperative.

We may likewise pay attention to the Ordinance appended to the 1987 Constitution, which had also been relied upon
in Jimenez and San Narciso. This Ordinance, which apportioned the seats of the House of Representatives to the different
legislative districts in the Philippines, enumerates the various municipalities that are encompassed by the various
legislative districts. Andong is not listed therein as among the municipalities of Lanao del Sur, or of any other province for
that matter.[62] On the other hand, the municipalities of San Andres, Alicia and Sinacaban are mentioned in the Ordinance
as part of Quezon,[63] Bohol,[64] and Misamis Occidental[65] respectively.

How about the eighteen (18) municipalities similarly nullified in Pelaez but certified as existing in the
DILG Certification presented by Camid? The petition fails to mention that subsequent to the ruling in Pelaez, legislation
was enacted to reconstitute these municipalities.[66] It is thus not surprising that the DILG certified the existence of these
eighteen (18) municipalities, or that these towns are among the municipalities enumerated in the Ordinance appended to
the Constitution. Andong has not been similarly reestablished through statute. Clearly then, the fact that there are valid
organic statutes passed by legislation recreating these eighteen (18) municipalities is sufficient legal basis to accord a
different legal treatment to Andong as against these eighteen (18) other municipalities.

We thus assert the proper purview to Section 442(d) of the Local Government Codethat it does not serve to affirm or
reconstitute the judicially dissolved municipalities such as Andong, which had been previously created by presidential
issuances or executive orders. The provision affirms the legal personalities only of those municipalities such as San Narciso,
Alicia, and Sinacaban, which may have been created using the same infirm legal basis, yet were fortunate enough not to
have been judicially annulled. On the other hand, the municipalities judicially dissolved in cases such as Pelaez, San
Joaquin, and Malabang, remain inexistent, unless recreated through specific legislative enactments, as done with the
eighteen (18) municipalities certified by the DILG. Those municipalities derive their legal personality not from the
presidential issuances or executive orders which originally created them or from Section 442(d), but from the respective
legislative statutes which were enacted to revive them.

And what now of Andong and its residents? Certainly, neither Pelaez or this decision has obliterated Andong into a hole
on the ground. The legal effect of the nullification of Andong in Pelaez was to revert the constituent barrios of the voided
town back into their original municipalities, namely the municipalities of Lumbatan, Butig and Tubaran. [67] These three
municipalities subsist to this day as part of Lanao del Sur,[68] and presumably continue to exercise corporate powers over
the barrios which once belonged to Andong.

If there is truly a strong impulse calling for the reconstitution of Andong, the solution is through the legislature and not
judicial confirmation of void title. If indeed the residents of Andong have, all these years, been governed not by their
proper municipal governments but by a ragtag Interim Government, then an expedient political and legislative solution is
perhaps necessary. Yet we can hardly sanction the retention of Andongs legal personality solely on the basis of collective
amnesia that may have allowed Andong to somehow pretend itself into existence despite its judicial dissolution. Maybe
those who insist Andong still exists prefer to remain unperturbed in their blissful ignorance, like the inhabitants of the
cave in Platos famed allegory. But the time has come for the light to seep in, and for the petitioner and like-minded persons
to awaken to legal reality.

WHEREFORE, the Petition is DISMISSED for lack of merit. Costs against petitioner.

EN BANC

G.R. No. L-28113 March 28, 1969

THE MUNICIPALITY OF MALABANG, LANAO DEL SUR, and AMER MACAORAO BALINDONG, petitioners,
vs.
PANGANDAPUN BENITO, HADJI NOPODIN MACAPUNUNG, HADJI HASAN MACARAMPAD, FREDERICK V. DUJERTE
MONDACO ONTAL, MARONSONG ANDOY, MACALABA INDAR LAO. respondents.

L. Amores and R. Gonzales for petitioners.

Jose W. Diokno for respondents.
CASTRO, J.:

The petitioner Amer Macaorao Balindong is the mayor of Malabang, Lanao del Sur, while the respondent Pangandapun
Bonito is the mayor, and the rest of the respondents are the councilors, of the municipality of Balabagan of the same
province. Balabagan was formerly a part of the municipality of Malabang, having been created on March 15, 1960, by
Executive Order 386 of the then President Carlos P. Garcia, out of barrios and sitios 1 of the latter municipality.

The petitioners brought this action for prohibition to nullify Executive Order 386 and to restrain the respondent municipal
officials from performing the functions of their respective office relying on the ruling of this Court in Pelaez v. Auditor
General 2 and Municipality of San Joaquin v. Siva. 3

In Pelaez this Court, through Mr. Justice (now Chief Justice) Concepcion, ruled: (1) that section 23 of Republic Act 2370
[Barrio Charter Act, approved January 1, 1960], by vesting the power to create barrios in the provincial board, is a
"statutory denial of the presidential authority to create a new barrio [and] implies a negation of the bigger power to create
municipalities," and (2) that section 68 of the Administrative Code, insofar as it gives the President the power to create
municipalities, is unconstitutional (a) because it constitutes an undue delegation of legislative power and (b) because it
offends against section 10 (1) of article VII of the Constitution, which limits the President's power over local governments
to mere supervision. As this Court summed up its discussion: "In short, even if it did not entail an undue delegation of
legislative powers, as it certainly does, said section 68, as part of the Revised Administrative Code, approved on March 10,
1917, must be deemed repealed by the subsequent adoption of the Constitution, in 1935, which is utterly incompatible
and inconsistent with said statutory enactment."

On the other hand, the respondents, while admitting the facts alleged in the petition, nevertheless argue that the rule
announced in Pelaez can have no application in this case because unlike the municipalities involved in Pelaez, the
municipality of Balabagan is at least a de facto corporation, having been organized under color of a statute before this was
declared unconstitutional, its officers having been either elected or appointed, and the municipality itself having
discharged its corporate functions for the past five years preceding the institution of this action. It is contended that as
a de facto corporation, its existence cannot be collaterally attacked, although it may be inquired into directly in an action
for quo warranto at the instance of the State and not of an individual like the petitioner Balindong.

It is indeed true that, generally, an inquiry into the legal existence of a municipality is reserved to the State in a proceeding
for quo warranto or other direct proceeding, and that only in a few exceptions may a private person exercise this function
of government. 4 But the rule disallowing collateral attacks applies only where the municipal corporation is at least a de
facto corporations. 5 For where it is neither a corporation de jure nor de facto, but a nullity, the rule is that its existence
may be, questioned collaterally or directly in any action or proceeding by any one whose rights or interests ate affected
thereby, including the citizens of the territory incorporated unless they are estopped by their conduct from doing so. 6

And so the threshold question is whether the municipality of Balabagan is a de facto corporation. As earlier stated, the
claim that it is rests on the fact that it was organized before the promulgation of this Court's decision in Pelaez. 7

Accordingly, we address ourselves to the question whether a statute can lend color of validity to an attempted
organization of a municipality despite the fact that such statute is subsequently declared unconstitutional.lawphi1.et

This has been a litigiously prolific question, sharply dividing courts in the United States. Thus, some hold that a de
facto corporation cannot exist where the statute or charter creating it is unconstitutional because there can be no de
facto corporation where there can be no de jure one, 8 while others hold otherwise on the theory that a statute is binding
until it is condemned as unconstitutional. 9

An early article in the Yale Law Journal offers the following analysis:

It appears that the true basis for denying to the corporation a de facto status lay in the absence of any legislative act to
give vitality to its creation. An examination of the cases holding, some of them unreservedly, that a de facto office or
municipal corporation can exist under color of an unconstitutional statute will reveal that in no instance did the invalid act
give life to the corporation, but that either in other valid acts or in the constitution itself the office or the corporation was
potentially created....

The principle that color of title under an unconstitutional statute can exist only where there is some other valid law under
which the organization may be effected, or at least an authority in potentia by the state constitution, has its counterpart
in the negative propositions that there can be no color of authority in an unconstitutional statute that plainly so appears
on its face or that attempts to authorize the ousting of a de jure or de facto municipal corporation upon the same territory;
in the one case the fact would imply the imputation of bad faith, in the other the new organization must be regarded as a
mere usurper....

As a result of this analysis of the cases the following principles may be deduced which seem to reconcile the apparently
conflicting decisions:

I. The color of authority requisite to the organization of a de facto municipal corporation may be:

1. A valid law enacted by the legislature.

2. An unconstitutional law, valid on its face, which has either (a) been upheld for a time by the courts or (b) not yet been
declared void; provided that a warrant for its creation can be found in some other valid law or in the recognition of its
potential existence by the general laws or constitution of the state.

II. There can be no de facto municipal corporation unless either directly or potentially, such a de jure corporation is
authorized by some legislative fiat.

III. There can be no color of authority in an unconstitutional statute alone, the invalidity of which is apparent on its face.

IV. There can be no de facto corporation created to take the place of an existing de jure corporation, as such organization
would clearly be a usurper.10

In the cases where a de facto municipal corporation was recognized as such despite the fact that the statute creating it
was later invalidated, the decisions could fairly be made to rest on the consideration that there was some other valid law
giving corporate vitality to the organization. Hence, in the case at bar, the mere fact that Balabagan was organized at a
time when the statute had not been invalidated cannot conceivably make it a de facto corporation, as, independently of
the Administrative Code provision in question, there is no other valid statute to give color of authority to its creation.
Indeed, in Municipality of San Joaquin v. Siva, 11 this Court granted a similar petition for prohibition and nullified an
executive order creating the municipality of Lawigan in Iloilo on the basis of the Pelaez ruling, despite the fact that the
municipality was created in 1961, before section 68 of the Administrative Code, under which the President had acted, was
invalidated. 'Of course the issue of de facto municipal corporation did not arise in that case.

In Norton v. Shelby Count, 12 Mr. Justice Field said: "An unconstitutional act is not a law; it confers no rights; it imposes
no duties; it affords no protection; it creates no office; it is, in legal contemplation, as inoperative as though it had never
been passed." Accordingly, he held that bonds issued by a board of commissioners created under an invalid statute were
unenforceable.

Executive Order 386 "created no office." This is not to say, however, that the acts done by the municipality of Balabagan
in the exercise of its corporate powers are a nullity because the executive order "is, in legal contemplation, as inoperative
as though it had never been passed." For the existence of Executive, Order 386 is "an operative fact which cannot justly
be ignored." As Chief Justice Hughes explained in Chicot County Drainage District v. Baxter State Bank: 13

The courts below have proceeded on the theory that the Act of Congress, having been found to be unconstitutional, was
not a law; that it was inoperative, conferring no rights and imposing no duties, and hence affording no basis for the
challenged decree. Norton v. Shelby County, 118 U.S. 425, 442; Chicago, I. & L. Ry. Co. v. Hackett, 228 U.S. 559, 566. It is
quite clear, however, that such broad statements as to the effect of a determination of unconstitutionality must be taken
with qualifications. The actual existence of a statute, prior to such a determination, is an operative fact and may have
consequences which cannot justly be ignored. The past cannot always be erased by a new judicial declaration. The effect
of the subsequent ruling as to invalidity may have to be considered in various aspects with respect to particular relations,
individual and corporate, and particular conduct, private and official. Questions of rights claimed to have become vested,
of status of prior determinations deemed to have finality and acted upon accordingly, of public policy in the light of the
nature both of the statute and of its previous application, demand examination. These questions are among the most
difficult of those which have engaged the attention of courts, state and federal, and it is manifest from numerous decisions
that an all-inclusive statement of a principle of absolute retroactive invalidity cannot be justified.

There is then no basis for the respondents' apprehension that the invalidation of the executive order creating Balabagan
would have the effect of unsettling many an act done in reliance upon the validity of the creation of that municipality. 14

ACCORDINGLY, the petition is granted, Executive Order 386 is declared void, and the respondents are hereby
permanently restrained from performing the duties and functions of their respective offices. No pronouncement as to
costs.

FIRST DIVISION

[G.R. No. 135535. February 14, 2005]

ZOOMZAT, INC., petitioner, vs. THE PEOPLE OF THE PHILIPPINES, ROMULO S. RODRIGUEZ, JR., AVELINO C. CANOSA,
ROLANDO G. CHAVEZ, CEFERINO C. GARCIA, DEMOCRITO C. LAGO, ANTONIO F. LUGOD, WAYNE T. MILITANTE, JOHNNY
L. MOTOOMULL, JR., FLORENTINO S. OCAMPO, EDUARDO L. REMEGOSO, CLEOFAS B. SALUGSUGAN, RAFAEL T.
BERDELAO, and WINFREDO T. MILITANTE, JR., respondents.

DECISION

YNARES-SANTIAGO, J.:

Assailed in this petition for review on certiorari is the Resolution[1] dated June 17, 1998 of the Sandiganbayan in Crim. Case
No. 22026 approving the withdrawal of the Information charging herein respondents, all members of the Sangguniang
Panlungsod of Gingoog City, of violation of Section 3(e), R.A. No. 3019, otherwise known as the Anti-Graft and Corrupt
Practices Act, and its Resolution[2] dated September 9, 1998, denying petitioner Zoomzat, Inc.s motion for reconsideration.

The factual antecedents are as follows:

Petitioner Zoomzat, Inc. alleged that on December 20, 1991, the Sangguniang Panlungsod of Gingoog City passed
Resolution No. 261[3] which resolved to express the willingness of the City of Gingoog to allow Zoomzat to install and
operate a cable TV system. Thereupon, petitioner applied for a mayors permit but the same was not acted upon by the
mayors office.

Subsequently, or on April 6, 1993, respondents enacted Ordinance No. 19 [4] which granted a franchise to Gingoog
Spacelink Cable TV, Inc. to operate a cable television for a period of ten (10) years, subject to automatic renewal.

Hence, on July 30, 1993, petitioner filed a complaint with the Office of the Ombudsman against herein respondents for
violation of Section 3(e), R.A. No. 3019. The complaint alleged that in enacting Ordinance No. 19, the respondents gave
unwarranted benefits, advantage or preference to Spacelink, to the prejudice of petitioner who was a prior grantee-
applicant by virtue of Resolution No. 261.

On December 20, 1994, Graft Investigation Officer I Virginia Tehano-Ang, recommended the indictment of the
respondents under Section 3(e), R.A. No. 3019, [5] which recommendation was affirmed on review by Special Prosecution
Officer II Rolando Ines.[6]
Accordingly, a criminal information for violation of Section 3(e), R.A. No. 3019, was filed against the respondents before
the Sandiganbayan. The case was docketed as Crim. Case No. 22026.

However, upon directive by the Sandiganbayan to restudy the instant case, Special Prosecution Officer II Antonio Manzano
recommended the dismissal of the case and the Information withdrawn for lack of probable cause. [7] On further
investigation, Special Prosecution Officer III Victor Pascual also recommended that the case be dismissed for insufficiency
of evidence.[8]

Consequently, on June 17, 1998, the Sandiganbayan issued the now assailed resolution approving the dismissal of the case
and ordering the withdrawal of the Information against the respondents. On September 9, 1998, the Sandiganbayan
denied petitioners motion for reconsideration.

Hence, the instant petition.

Petitioner assails the findings of Special Prosecutor Pascual that under Executive Order No. 205, [9] it is the National
Telecommunications Commission (NTC), and not the local government unit, that has the power and authority to allow or
disallow the operation of cable television. It argues that while the NTC has the authority to grant the franchise to operate
a cable television, this power is not exclusive because under the Local Government Code, the city council also has the
power to grant permits, licenses and franchises in aid of the local government units regulatory or revenue raising powers.

Petitioner also contends that the grant of exclusive franchise to Spacelink for a period of ten (10) years subject to
automatic renewal, contravenes Section 2 of Executive Order No. 205, which provides that a certificate of authority to
operate a CATV by the Commission shall be on a non-exclusive basis and for a period not to exceed 15 years. Thus, in
awarding an exclusive franchise, the petitioner asserts that respondents gave Spacelink undue or unwarranted advantage
and preference because it stifled business competition. It claims that, even assuming the lack of actual damage or injury,
the fact remains that respondents extended undue favor and advantage to Spacelink, which makes them liable under
Section 3(e) of R.A. No. 3019.

The petition is bereft of merit.

Respondents were charged with violation of Section 3(e), R.A. No. 3019, which states:

Section 3. Corrupt practices of public officers. In addition to acts or omissions of public officers already penalized by
existing law, the following shall constitute corrupt practices of any public officer and are hereby declared to be unlawful:

(e) Causing any undue injury to any party, including the Government, or giving any private party any unwarranted benefits,
advantage or preference in the discharge of his official, administrative or judicial functions through manifest partiality,
evident bad faith or gross inexcusable negligence. This provision shall apply to officers and employees of offices or
government corporations charged with the grant of licenses or permits or other concessions. (Emphasis ours)

Thus, for one to be held liable under Section 3(e), R.A. No. 3019, he must be an officer or employee of offices or
government corporations charged with the grant of licenses or permits or other concessions.

Executive Order No. 205 clearly provides that only the NTC could grant certificates of authority to cable television
operators and issue the necessary implementing rules and regulations. Likewise, Executive Order No. 436, [10] vests with
the NTC the regulation and supervision of cable television industry in the Philippines.

Our pronouncement in Batangas CATV, Inc. v. Court of Appeals,[11] is pertinent:

There is no law specifically authorizing the LGUs to grant franchises to operate CATV system. Whatever authority the LGUs
had before, the same had been withdrawn when President Marcos issued P.D. No. 1512 terminating all franchises, permits
or certificates for the operation of CATV system previously granted by local governments. Today, pursuant to Section 3 of
E.O. No. 436, only persons, associations, partnerships, corporations or cooperatives granted a Provisional Authority or
Certificate of Authority by the NTC may install, operate and maintain a cable television system or render cable television
service within a service area.
It is clear that in the absence of constitutional or legislative authorization, municipalities have no power to grant franchises.
Consequently, the protection of the constitutional provision as to impairment of the obligation of a contract does not
extend to privileges, franchises and grants given by a municipality in excess of its powers, or ultra vires.

It is undisputed that respondents were not employees of NTC. Instead, they were charged in their official capacity as
members of the Sangguniang Panlungsod of Gingoog City. As such, they cannot be charged with violation of Section 3(e),
R.A. No. 3019 for enacting Ordinance No. 19 which granted Spacelink a franchise to operate a cable television.

Petitioner, however, insists that while the NTC is the licensing and regulatory body, nonetheless, the actual operations of
cable television entails other activities, which may be regulated by the local government unit pursuant to the general
welfare clause or subject to its revenue generating powers.

Again, this issue has been discussed in Batangas CATV, Inc. v. Court of Appeals,[12] thus:

But, lest we be misunderstood, nothing herein should be interpreted as to strip LGUs of their general power to prescribe
regulations under the general welfare clause of the Local Government Code. It must be emphasized that when E.O. No.
436 decrees that the regulatory power shall be vested solely in the NTC, it pertains to the regulatory power over those
matters, which are peculiarly within the NTCs competence

There is no dispute that respondent Sangguniang Panlungsod, like other local legislative bodies, has been empowered to
enact ordinances and approve resolutions under the general welfare clause of B.P. Blg. 337, the Local Government Code
of 1983. That it continues to possess such power is clear under the new law, R.A. No. 7160 (the Local Government Code
of 1991).

Indeed, under the general welfare clause of the Local Government Code, the local government unit can regulate the
operation of cable television but only when it encroaches on public properties, such as the use of public streets, rights of
ways, the founding of structures, and the parceling of large regions.[13] Beyond these parameters, its acts, such as the grant
of the franchise to Spacelink, would be ultra vires.

Plainly, the Sangguniang Panlungsod of Gingoog City overstepped the bounds of its authority when it usurped the powers
of the NTC with the enactment of Ordinance No. 19. Being a void legislative act, Ordinance No. 19 did not confer any right
nor vest any privilege to Spacelink. As such, petitioner could not claim to have been prejudiced or suffered injury thereby.
Incidentally, petitioners claim of undue injury becomes even more baseless with the finding that Spacelink did not
commence to operate despite the grant to it of a franchise under Ordinance No. 19.

In addition, petitioner could not impute manifest partiality, evident bad faith or gross inexcusable negligence on the part
of the respondents when they enacted Ordinance No. 19. A perfunctory reading of Resolution No. 261 shows that
the Sangguniang Panlungsod did not grant a franchise to it but merely expressed its willingness to allow the petitioner to
install and operate a cable television. Had respondents intended otherwise, they would have couched the resolution in
more concrete, specific and categorical terms. In contrast, Ordinance No. 19 clearly and unequivocally granted a franchise
to Spacelink, specifically stating therein its terms and conditions. Not being a bona fide franchise holder, petitioner could
not claim prior right on the strength of Resolution No. 261.

WHEREFORE, in view of the foregoing, the petition is DENIED. The assailed Resolution of the Sandiganbayan dated June
17, 1998, approving the withdrawal of the Information against the respondents and the dismissal of Crim. Case No. 22026,
for violation of Section 3(e), R.A. No. 3019, and the Resolution dated September 9, 1998, denying reconsideration thereof,
are AFFIRMED.

SO ORDERED.
EN BANC

G.R. No. 93252 August 5, 1991

RODOLFO T. GANZON, petitioner,

vs.
THE HONORABLE COURT OF APPEALS and LUIS T. SANTOS, respondents.

G.R. No. 93746 August 5,1991

MARY ANN RIVERA ARTIEDA, petitioner,

vs.
HON. LUIS SANTOS, in his capacity as Secretary of the Department of Local Government, NICANOR M. PATRICIO, in his
capacity as Chief, Legal Service of the Department of Local Government and SALVADOR CABALUNA JR., respondents.

G.R. No. 95245 August 5,1991

RODOLFO T. GANZON, petitioner,

vs.
THE HONORABLE COURT OF APPEALS and LUIS T. SANTOS, in his capacity as the Secretary of the Department of Local
Government, respondents.

Nicolas P. Sonalan for petitioner in 93252.

Romeo A. Gerochi for petitioner in 93746.

Eugenio Original for petitioner in 95245.

SARMIENTO, J.:p

The petitioners take common issue on the power of the President (acting through the Secretary of Local Government), to
suspend and/or remove local officials.

The petitioners are the Mayor of Iloilo City (G.R. Nos. 93252 and 95245) and a member of the Sangguniang Panglunsod
thereof (G.R. No. 93746), respectively.

The petitions of Mayor Ganzon originated from a series of administrative complaints, ten in number, filed against him by
various city officials sometime in 1988, on various charges, among them, abuse of authority, oppression, grave misconduct,
disgraceful and immoral conduct, intimidation, culpable violation of the Constitution, and arbitrary detention. 1 The
personalities involved are Joceleehn Cabaluna, a clerk at the city health office; Salvador Cabaluna, her husband; Dr.
Felicidad Ortigoza, Assistant City Health Officer; Mansueto Malabor, Vice-Mayor; Rolando Dabao, Dan Dalido, German
Gonzales, Larry Ong, and Eduardo Pefia Redondo members of the Sangguniang Panglunsod; and Pancho Erbite, a barangay
tanod. The complaints against the Mayor are set forth in the opinion of the respondent Court of Appeals. 2 We quote:

xxx xxx xxx

In her verified complaint (Annex A), Mrs. Cabaluna, a clerk assigned to the City Health, Office of Iloilo City charged that
due to political reasons, having supported the rival candidate, Mrs. Rosa 0. Caram, the petitioner City Mayor, using as an
excuse the exigency of the service and the interest of the public, pulled her out from rightful office where her qualifications
are best suited and assigned her to a work that should be the function of a non-career service employee. To make matters
worse, a utility worker in the office of the Public Services, whose duties are alien to the complainant's duties and functions,
has been detailed to take her place. The petitioner's act are pure harassments aimed at luring her away from her
permanent position or force her to resign.
In the case of Dra. Felicidad Ortigoza, she claims that the petitioner handpicked her to perform task not befitting her
position as Assistant City Health Officer of Iloilo City; that her office was padlocked without any explanation or justification;
that her salary was withheld without cause since April 1, 1988; that when she filed her vacation leave, she was given the
run-around treatment in the approval of her leave in connivance with Dr. Rodolfo Villegas and that she was the object of
a well-engineered trumped-up charge in an administrative complaint filed by Dr. Rodolfo Villegas (Annex B).

On the other hand, Mansuelo Malabor is the duly elected Vice-Mayor of Iloilo City and complainants Rolando Dabao, Dan
Dalido, German Gonzales, Larry Ong and Eduardo Pefia Pedondo are members of the Sangguniang Panglunsod of the City
of Iloilo. Their complaint arose out from the case where Councilor Larry Ong, whose key to his office was unceremoniously
and without previous notice, taken by petitioner. Without an office, Councilor Ong had to hold office at Plaza Libertad,
The Vice-Mayor and the other complainants sympathized with him and decided to do the same. However, the petitioner,
together with its fully-armed security men, forcefully drove them away from Plaza Libertad. Councilor Ong denounced the
petitioner's actuations the following day in the radio station and decided to hold office at the Freedom Grandstand at
Iloilo City and there were so many people who gathered to witness the incident. However, before the group could reach
the area, the petitioner, together with his security men, led the firemen using a firetruck in dozing water to the people
and the bystanders.

Another administrative case was filed by Pancho Erbite, a barangay tanod, appointed by former mayor Rosa O. Caram. On
March 13, 1988, without the benefit of charges filed against him and no warrant of arrest was issued, Erbite was arrested
and detained at the City Jail of Iloilo City upon orders of petitioner. In jail, he was allegedly mauled by other detainees
thereby causing injuries He was released only the following day. 3

The Mayor thereafter answered 4 and the cases were shortly set for hearing. The opinion of the Court of Appeals also set
forth the succeeding events:

xxx xxx xxx

The initial hearing in the Cabaluna and Ortigoza cases were set for hearing on June 20-21, 1988 at the Regional Office of
the Department of Local Government in Iloilo City. Notices, through telegrams, were sent to the parties (Annex L) and the
parties received them, including the petitioner. The petitioner asked for a postponement before the scheduled date of
hearing and was represented by counsel, Atty. Samuel Castro. The hearing officers, Atty. Salvador Quebral and Atty.
Marino Bermudez had to come all the way from Manila for the two-day hearings but was actually held only on June
20,1988 in view of the inability and unpreparedness of petitioner's counsel.

The next hearings were re-set to July 25, 26, 27,1988 in the same venue-Iloilo City. Again, the petitioner attempted to
delay the proceedings and moved for a postponement under the excuse that he had just hired his counsel. Nonetheless,
the hearing officers denied the motion to postpone, in view of the fact that the parties were notified by telegrams of the
scheduled hearings (Annex M).

In the said hearings, petitioner's counsel cross-examined the complainants and their witnesses.

Finding probable grounds and reasons, the respondent issued a preventive suspension order on August 11, 1988 to last
until October 11,1988 for a period of sixty (60) days.

Then the next investigation was set on September 21, 1988 and the petitioner again asked for a postponement to
September 26,1988. On September 26, 1988, the complainants and petitioner were present, together with their
respective counsel. The petitioner sought for a postponement which was denied. In these hearings which were held in
Mala the petitioner testified in Adm. Case No. C-10298 and 10299.

The investigation was continued regarding the Malabor case and the complainants testified including their witnesses.

On October 10, 1988, petitioner's counsel, Atty. Original moved for a postponement of the October 24, 1988 hearing to
November 7 to 11, 1988 which was granted. However, the motion for change of venue as denied due to lack of funds. At
the hearing on November 7, 1988, the parties and counsel were present. Petitioner reiterated his motion to change venue
and moved for postponement anew. The counsel discussed a proposal to take the deposition of witnesses in Iloilo City so
the hearing was indefinitely postponed. However, the parties failed to come to terms and after the parties were notified
of the hearing, the investigation was set to December 13 to 15, 1988.

The petitioner sought for another postponement on the ground that his witnesses were sick or cannot attend the
investigation due to lack of transportation. The motion was denied and the petitioner was given up to December 14, 1988
to present his evidence.

On December 14,1988, petitioner's counsel insisted on his motion for postponement and the hearing officers gave
petitioner up to December 15, 1988 to present his evidence. On December 15, 1988, the petitioner failed to present
evidence and the cases were considered submitted for resolution.

In the meantime, a prima facie evidence was found to exist in the arbitrary detention case filed by Pancho Erbite so the
respondent ordered the petitioner's second preventive suspension dated October 11, 1988 for another sixty (60) days.
The petitioner was able to obtain a restraining order and a writ of preliminary injunction in the Regional Trial Court, Branch
33 of Iloilo City. The second preventive suspension was not enforced. 5

Amidst the two successive suspensions, Mayor Ganzon instituted an action for prohibition against the respondent
Secretary of Local Government (now, Interior) in the Regional Trial Court, Iloilo City, where he succeeded in obtaining a
writ of preliminary injunction. Presently, he instituted CA-G.R. SP No. 16417, an action for prohibition, in the respondent
Court of Appeals.

Meanwhile, on May 3, 1990, the respondent Secretary issued another order, preventively suspending Mayor Ganzon for
another sixty days, the third time in twenty months, and designating meantime Vice-Mayor Mansueto Malabor as acting
mayor. Undaunted, Mayor Ganzon commenced CA-G.R. SP No. 20736 of the Court of Appeals, a petition for
prohibition, 6 (Malabor it is to be noted, is one of the complainants, and hence, he is interested in seeing Mayor Ganzon
ousted.)

On September 7, 1989, the Court of Appeals rendered judgment, dismissing CA-G.R. SP No. 16417. On July 5, 1990, it
likewise promulgated a decision, dismissing CA-G.R. SP No. 20736. In a Resolution dated January 24, 1990, it issued a
Resolution certifying the petition of Mary Ann Artieda, who had been similary charged by the respondent Secretary, to
this Court.

On June 26,1990, we issued a Temporary Restraining Order, barring the respondent Secretary from implementing the
suspension orders, and restraining the enforcement of the Court of Appeals' two decisions.

In our Resolution of November 29, 1990, we consolidated all three cases. In our Resolutions of January 15, 1991, we gave
due course thereto.

Mayor Ganzon claims as a preliminary (GR No. 93252), that the Department of Local Government in hearing the ten cases
against him, had denied him due process of law and that the respondent Secretary had been "biased, prejudicial and
hostile" towards him 7 arising from his (Mayor Ganzon's) alleged refusal to join the Laban ng Demokratikong Pilipino
party 8 and the running political rivalry they maintained in the last congressional and local elections; 9 and his alleged
refusal to operate a lottery in Iloilo City. 10 He also alleges that he requested the Secretary to lift his suspension since it
had come ninety days prior to an election (the barangay elections of November 14, 1988), 11notwithstanding which, the
latter proceeded with the hearing and meted out two more suspension orders of the aforementioned cases. 12 He likewise
contends that he sought to bring the cases to Iloilo City (they were held in Manila) in order to reduce the costs of
proceeding, but the Secretary rejected his request. 13 He states that he asked for postponement on "valid and
justifiable" 14 grounds, among them, that he was suffering from a heart ailment which required confinement; that his
"vital" 15 witness was also hospitalized 16 but that the latter unduly denied his request. 17

Mayor Ganzon's primary argument (G.R. Nos. 93252 and 95245) is that the Secretary of Local Government is devoid, in
any event, of any authority to suspend and remove local officials, an argument reiterated by the petitioner Mary Ann
Rivera Artieda (G.R. No. 93746).
As to Mayor Ganzon's charges of denial of due process, the records do not show very clearly in what manner the Mayor
might have been deprived of his rights by the respondent Secretary. His claims that he and Secretary Luis-Santos were
(are) political rivals and that his "persecution" was politically motivated are pure speculation and although the latter does
not appear to have denied these contentions (as he, Mayor Ganzon, claims), we can not take his word for it the way we
would have under less political circumstances, considering furthermore that "political feud" has often been a good excuse
in contesting complaints.

The Mayor has failed furthermore to substantiate his say-so's that Secretary Santos had attempted to seduce him to join
the administration party and to operate a lottery in Iloilo City. Again, although the Secretary failed to rebut his allegations,
we can not accept them, at face value, much more, as judicial admissions as he would have us accept them 18 for the same
reasons above-stated and furthermore, because his say so's were never corroborated by independent testimonies. As a
responsible public official, Secretary Santos, in pursuing an official function, is presumed to be performing his duties
regularly and in the absence of contrary evidence, no ill motive can be ascribed to him.

As to Mayor Ganzon's contention that he had requested the respondent Secretary to defer the hearing on account of the
ninety-day ban prescribed by Section 62 of Batas Blg. 337, the Court finds the question to be moot and academic since we
have in fact restrained the Secretary from further hearing the complaints against the petitioners. 19

As to his request, finally, for postponements, the Court is afraid that he has not given any compelling reason why we
should overturn the Court of Appeals, which found no convincing reason to overrule Secretary Santos in denying his
requests. Besides, postponements are a matter of discretion on the part of the hearing officer, and based on Mayor
Ganzon's above story, we are not convinced that the Secretary has been guilty of a grave abuse of discretion.

The Court can not say, under these circumstances, that Secretary Santos' actuations deprived Mayor Ganzon of due
process of law.

We come to the core question: Whether or not the Secretary of Local Government, as the President's alter ego, can
suspend and/or remove local officials.

It is the petitioners' argument that the 1987 Constitution 20 no longer allows the President, as the 1935 and 1973
Constitutions did, to exercise the power of suspension and/or removal over local officials. According to both petitioners,
the Constitution is meant, first, to strengthen self-rule by local government units and second, by deleting the phrase 21 as
may be provided by law to strip the President of the power of control over local governments. It is a view, so they contend,
that finds support in the debates of the Constitutional Commission. The provision in question reads as follows:

Sec. 4. The President of the Philippines shall exercise general supervision over local governments. Provinces with respect
to component cities and municipalities, and cities and municipalities with respect to component barangays shall ensure
that the acts of their component units are within the scope of their prescribed powers and functions. 22

It modifies a counterpart provision appearing in the 1935 Constitution, which we quote:

Sec. 10. The President shall have control of all the executive departments, bureaus, or offices, exercise general supervision
over all Local governments as may be provided by law, and take care that the laws be faithfully executed. 23

The petitioners submit that the deletion (of "as may be provided by law") is significant, as their argument goes, since: (1)
the power of the President is "provided by law" and (2) hence, no law may provide for it any longer.

It is to be noted that in meting out the suspensions under question, the Secretary of Local Government acted in
consonance with the specific legal provisions of Batas Blg. 337, the Local Government Code, we quote:

Sec. 62. Notice of Hearing. Within seven days after the complaint is filed, the Minister of local Government, or the
sanggunian concerned, as the case may be, shall require the respondent to submit his verified answer within seven days
from receipt of said complaint, and commence the hearing and investigation of the case within ten days after receipt of
such answer of the respondent. No investigation shall be held within ninety days immediately prior to an election, and no
preventive suspension shall be imposed with the said period. If preventive suspension has been imposed prior to the
aforesaid period, the preventive suspension shall be lifted. 24

Sec. 63. Preventive Suspension. (1) Preventive suspension may be imposed by the Minister of Local Government if the
respondent is a provincial or city official, by the provincial governor if the respondent is an elective municipal official, or
by the city or municipal mayor if the respondent is an elective barangay official.

(2) Preventive suspension may be imposed at any time after the issues are joined, when there is reasonable ground to
believe that the respondent has committed the act or acts complained of, when the evidence of culpability is strong, when
the gravity of the offense so warrants, or when the continuance in office of the respondent could influence the witnesses
or pose a threat to the safety and integrity of the records and other evidence. In all cases, preventive suspension shall not
extend beyond sixty days after the start of said suspension.

(3) At the expiration of sixty days, the suspended official shall be deemed reinstated in office without prejudice to the
continuation of the proceedings against him until its termination. However ' if the delay in the proceedings of the case is
due to his fault, neglect or request, the time of the delay shall not be counted in computing the time of suspension. 25

The issue, as the Court understands it, consists of three questions: (1) Did the 1987 Constitution, in deleting the phrase
"as may be provided by law" intend to divest the President of the power to investigate, suspend, discipline, and/or remove
local officials? (2) Has the Constitution repealed Sections 62 and 63 of the Local Government Code? (3) What is the
significance of the change in the constitutional language?

It is the considered opinion of the Court that notwithstanding the change in the constitutional language, the charter did
not intend to divest the legislature of its right or the President of her prerogative as conferred by existing legislation to
provide administrative sanctions against local officials. It is our opinion that the omission (of "as may be provided by law")
signifies nothing more than to underscore local governments' autonomy from congress and to break Congress' "control"
over local government affairs. The Constitution did not, however, intend, for the sake of local autonomy, to deprive the
legislature of all authority over municipal corporations, in particular, concerning discipline.

Autonomy does not, after all, contemplate making mini-states out of local government units, as in the federal
governments of the United States of America (or Brazil or Germany), although Jefferson is said to have compared
municipal corporations euphemistically to "small republics." 26 Autonomy, in the constitutional sense, is subject to the
guiding star, though not control, of the legislature, albeit the legislative responsibility under the Constitution and as the
"supervision clause" itself suggest-is to wean local government units from over-dependence on the central government.

It is noteworthy that under the Charter, "local autonomy" is not instantly self-executing, but subject to, among other
things, the passage of a local government code, 27 a local tax law, 28 income distribution legislation, 29 and a national
representation law, 30 and measures 31 designed to realize autonomy at the local level. It is also noteworthy that in spite
of autonomy, the Constitution places the local government under the general supervision of the Executive. It is noteworthy
finally, that the Charter allows Congress to include in the local government code provisions for removal of local officials,
which suggest that Congress may exercise removal powers, and as the existing Local Government Code has done, delegate
its exercise to the President. Thus:

Sec. 3. The Congress shall enact a local government code which shall provide for a more responsive and accountable local
government structure instituted through a system of decentralization with effective mechanisms of recall, initiative, and
referendum, allocate among the different local government units their powers, responsibilities and resources, and provide
for the qualifications, election, appointment and removal, term, salaries, powers and functions and duties of local officials,
and all other matters relating to the organization and operation of the local units. 32

As hereinabove indicated, the deletion of "as may be provided by law" was meant to stress, sub silencio, the objective of
the framers to strengthen local autonomy by severing congressional control of its affairs, as observed by the Court of
Appeals, like the power of local legislation. 33 The Constitution did nothing more, however, and insofar as existing
legislation authorizes the President (through the Secretary of Local Government) to proceed against local officials
administratively, the Constitution contains no prohibition.

The petitioners are under the impression that the Constitution has left the President mere supervisory powers, which
supposedly excludes the power of investigation, and denied her control, which allegedly embraces disciplinary authority.
It is a mistaken impression because legally, "supervision" is not incompatible with disciplinary authority as this Court has
held, 34 thus:

xxx xxx xxx

It is true that in the case of Mondano vs. Silvosa, 51 Off. Gaz., No. 6 p. 2884, this Court had occasion to discuss the scope
and extent of the power of supervision by the President over local government officials in contrast to the power of control
given to him over executive officials of our government wherein it was emphasized that the two terms, control and
supervision, are two different things which differ one from the other in meaning and extent. Thus in that case the Court
has made the following digression: "In administration law supervision means overseeing or the power or authority of an
officer to see that subordinate officers perform their duties. If the latter fail or neglect to fulfill them the former may take
such action or step as prescribed by law to make them perform their duties. Control, on the other hand, means the power
of an officer to alter or modify or nullify of set aside what a subordinate officer had done in the performance of his duties
and to substitute the judgment of the former for that of the latter." But from this pronouncement it cannot be reasonably
inferred that the power of supervision of the President over local government officials does not include the power of
investigation when in his opinion the good of the public service so requires, as postulated in Section 64(c) of the Revised
Administrative Code. ... 35

xxx xxx xxx

"Control" has been defined as "the power of an officer to alter or modify or nullify or set aside what a subordinate officer
had done in the performance of his duties and to substitute the judgment of the former for test of the
latter." 36 "Supervision" on the other hand means "overseeing or the power or authority of an officer to see that
subordinate officers perform their duties. 37 As we held, 38 however, "investigating" is not inconsistent with "overseeing",
although it is a lesser power than "altering". The impression is apparently exacerbated by the Court's pronouncements in
at least three cases, Lacson v. Roque, 39 Hebron v. Reyes, 40 and Mondano v. Silvosa, 41 and possibly, a fourth one, Pelaez v.
Auditor General. 42 In Lacson, this Court said that the President enjoyed no control powers but only supervision "as may
be provided by law," 43 a rule we reiterated in Hebron, and Mondano. In Pelaez, we stated that the President "may not . . .
suspend an elective official of a regular municipality or take any disciplinary action against him, except on appeal from a
decision of the corresponding provincial board." 44 However, neither Lacson nor Hebron nor Mondano categorically
banned the Chief Executive from exercising acts of disciplinary authority because she did not exercise control powers, but
because no law allowed her to exercise disciplinary authority. Thus, according to Lacson:

The contention that the President has inherent power to remove or suspend municipal officers is without doubt not well
taken. Removal and suspension of public officers are always controlled by the particular law applicable and its proper
construction subject to constitutional limitations. 45

In Hebron we stated:

Accordingly, when the procedure for the suspension of an officer is specified by law, the same must be deemed mandatory
and adhered to strictly, in the absence of express or clear provision to the contrary-which does not et with respect to
municipal officers ... 46

In Mondano, the Court held:

... The Congress has expressly and specifically lodged the provincial supervision over municipal officials in the provincial
governor who is authorized to "receive and investigate complaints made under oath against municipal officers for neglect
of duty, oppression, corruption or other form of maladministration of office, and conviction by final judgment of any crime
involving moral turpitude." And if the charges are serious, "he shall submit written charges touching the matter to the
provincial board, furnishing a copy of such charges to the accused either personally or by registered mail, and he may in
such case suspend the officer (not being the municipal treasurer) pending action by the board, if in his opinion the charge
by one affecting the official integrity of the officer in question." Section 86 of the Revised Administration Code adds
nothing to the power of supervision to be exercised by the Department Head over the administration of ...
municipalities ... . If it be construed that it does and such additional power is the same authority as that vested in the
Department Head by section 79(c) of the Revised Administrative Code, then such additional power must be deemed to
have been abrogated by Section 110(l), Article VII of the Constitution. 47

xxx xxx xxx

In Pelaez, we stated that the President can not impose disciplinary measures on local officials except on appeal from the
provincial board pursuant to the Administrative Code. 48

Thus, in those case that this Court denied the President the power (to suspend/remove) it was not because we did not
think that the President can not exercise it on account of his limited power, but because the law lodged the power
elsewhere. But in those cases ii which the law gave him the power, the Court, as in Ganzon v. Kayanan, found little difficulty
in sustaining him. 49

The Court does not believe that the petitioners can rightfully point to the debates of the Constitutional Commission to
defeat the President's powers. The Court believes that the deliberations are by themselves inconclusive, because although
Commissioner Jose Nolledo would exclude the power of removal from the President, 50Commissioner Blas Ople would
not. 51

The Court is consequently reluctant to say that the new Constitution has repealed the Local Government Code, Batas Blg.
37. As we said, "supervision" and "removal" are not incompatible terms and one may stand with the other notwithstanding
the stronger expression of local autonomy under the new Charter. We have indeed held that in spite of the approval of
the Charter, Batas Blg. 337 is still in force and effect. 52

As the Constitution itself declares, local autonomy means "a more responsive and accountable local government structure
instituted through a system of decentralization." 53 The Constitution as we observed, does nothing more than to break up
the monopoly of the national government over the affairs of local governments and as put by political adherents, to
"liberate the local governments from the imperialism of Manila." Autonomy, however, is not meant to end the relation of
partnership and inter-dependence between the central administration and local government units, or otherwise, to user
in a regime of federalism. The Charter has not taken such a radical step. Local governments, under the Constitution, are
subject to regulation, however limited, and for no other purpose than precisely, albeit paradoxically, to enhance self-
government.

As we observed in one case, 54 decentralization means devolution of national administration but not power to the local
levels. Thus:

Now, autonomy is either decentralization of administration or decentralization of power. There is decentralization of

administration when the central government delegates administrative powers to political subdivisions in order to broaden
the base of government power and in the process to make local governments "more responsive and accountable," and
"ensure their fullest development as self-reliant communities and make them more effective partners in the pursuit of
national development and social progress." At the same time, it relieves the central government of the burden of
managing local affairs and enables it to concentrate on national concerns. The President exercises "general supervision"
over them, but only to "ensure that local affairs are administered according to law." He has no control over their acts in
the sense that he can substitute their judgments with his own.

Decentralization of power, on the other hand, involves an abdication of political power in the favor of local governments
units declared to be autonomous, In that case, the autonomous government is free to chart its own destiny and shape its
future with minimum intervention from central authorities. According to a constitutional author, decentralization of
power amounts to "self-immolation," since in that event, the autonomous government becomes accountable not to the
central authorities but to its constituency. 55

The successive sixty-day suspensions imposed on Mayor Rodolfo Ganzon is albeit another matter. What bothers the Court,
and what indeed looms very large, is the fact that since the Mayor is facing ten administrative charges, the Mayor is in
fact facing the possibility of 600 days of suspension, in the event that all ten cases yield prima facie findings. The Court is
not of course tolerating misfeasance in public office (assuming that Mayor Ganzon is guilty of misfeasance) but it is
certainly another question to make him serve 600 days of suspension, which is effectively, to suspend him out of office.
As we held: 56

2. Petitioner is a duly elected municipal mayor of Lianga, Surigao del Sur. His term of office does not expire until 1986.
Were it not for this information and the suspension decreed by the Sandiganbayan according to the Anti-Graft and Corrupt
Practices Act, he would have been all this while in the full discharge of his functions as such municipal mayor. He was
elected precisely to do so. As of October 26, 1983, he has been unable to. it is a basic assumption of the electoral process
implicit in the right of suffrage that the people are entitled to the services of elective officials of their choice. For
misfeasance or malfeasance, any of them could, of course, be proceeded against administratively or, as in this instance,
criminally. In either case, Ms culpability must be established. Moreover, if there be a criminal action, he is entitled to the
constitutional presumption of innocence. A preventive suspension may be justified. Its continuance, however, for an
unreasonable length of time raises a due process question. For even if thereafter he were acquitted, in the meanwhile his
right to hold office had been nullified. Clearly, there would be in such a case an injustice suffered by him. Nor is he the
only victim. There is injustice inflicted likewise on the people of Lianga They were deprived of the services of the man they
had elected to serve as mayor. In that sense, to paraphrase Justice Cardozo, the protracted continuance of this preventive
suspension had outrun the bounds of reason and resulted in sheer oppression. A denial of due process is thus quite
manifest. It is to avoid such an unconstitutional application that the order of suspension should be lifted. 57

The plain truth is that this Court has been ill at ease with suspensions, for the above reasons, 58 and so also, because it is
out of the ordinary to have a vacancy in local government. The sole objective of a suspension, as we have held, 59 is simply
"to prevent the accused from hampering the normal cause of the investigation with his influence and authority over
possible witnesses" 60 or to keep him off "the records and other evidence. 61

It is a means, and no more, to assist prosecutors in firming up a case, if any, against an erring local official. Under the Local
Government Code, it can not exceed sixty days, 62 which is to say that it need not be exactly sixty days long if a shorter
period is otherwise sufficient, and which is also to say that it ought to be lifted if prosecutors have achieved their purpose
in a shorter span.

Suspension is not a penalty and is not unlike preventive imprisonment in which the accused is held to insure his presence
at the trial. In both cases, the accused (the respondent) enjoys a presumption of innocence unless and until found guilty.

Suspension finally is temporary and as the Local Government Code provides, it may be imposed for no more than sixty
days. As we held, 63 a longer suspension is unjust and unreasonable, and we might add, nothing less than tyranny.

As we observed earlier, imposing 600 days of suspension which is not a remote possibility Mayor Ganzon is to all intents
and purposes, to make him spend the rest of his term in inactivity. It is also to make, to all intents and purposes, his
suspension permanent.

It is also, in fact, to mete out punishment in spite of the fact that the Mayor's guilt has not been proven. Worse, any
absolution will be for naught because needless to say, the length of his suspension would have, by the time he is reinstated,
wiped out his tenure considerably.

The Court is not to be mistaken for obstructing the efforts of the respondent Secretary to see that justice is done in Iloilo
City, yet it is hardly any argument to inflict on Mayor Ganzon successive suspensions when apparently, the respondent
Secretary has had sufficient time to gather the necessary evidence to build a case against the Mayor without suspending
him a day longer. What is intriguing is that the respondent Secretary has been cracking down, so to speak, on the Mayor
piecemeal apparently, to pin him down ten times the pain, when he, the respondent Secretary, could have pursued a
consolidated effort.

We reiterate that we are not precluding the President, through the Secretary of Interior from exercising a legal power, yet
we are of the opinion that the Secretary of Interior is exercising that power oppressively, and needless to say, with a grave
abuse of discretion.

The Court is aware that only the third suspension is under questions, and that any talk of future suspensions is in fact
premature. The fact remains, however, that Mayor Ganzon has been made to serve a total of 120 days of suspension and
the possibility of sixty days more is arguably around the corner (which amounts to a violation of the Local Government
Code which brings to light a pattern of suspensions intended to suspend the Mayor the rest of his natural tenure. The
Court is simply foreclosing what appears to us as a concerted effort of the State to perpetuate an arbitrary act.

As we said, we can not tolerate such a state of affairs.

We are therefore allowing Mayor Rodolfo Ganzon to suffer the duration of his third suspension and lifting, for the purpose,
the Temporary Restraining Order earlier issued. Insofar as the seven remaining charges are concerned, we are urging the
Department of Local Government, upon the finality of this Decision, to undertake steps to expedite the same, subject to
Mayor Ganzon's usual remedies of appeal, judicial or administrative, or certiorari, if warranted, and meanwhile, we are
precluding the Secretary from meting out further suspensions based on those remaining complaints, notwithstanding
findings of prima facie evidence.

In resume the Court is laying down the following rules:

1. Local autonomy, under the Constitution, involves a mere decentralization of administration, not of power, in which
local officials remain accountable to the central government in the manner the law may provide;

2. The new Constitution does not prescribe federalism;

3. The change in constitutional language (with respect to the supervision clause) was meant but to deny legislative control
over local governments; it did not exempt the latter from legislative regulations provided regulation is consistent with the
fundamental premise of autonomy;

4. Since local governments remain accountable to the national authority, the latter may, by law, and in the manner set
forth therein, impose disciplinary action against local officials;

5. "Supervision" and "investigation" are not inconsistent terms; "investigation" does not signify "control" (which the
President does not have);

6. The petitioner, Mayor Rodolfo Ganzon. may serve the suspension so far ordered, but may no longer be suspended for
the offenses he was charged originally; provided:

a) that delays in the investigation of those charges "due to his fault, neglect or request, (the time of the delay) shall not
be counted in computing the time of suspension. [Supra, sec. 63(3)]

b) that if during, or after the expiration of, his preventive suspension, the petitioner commits another or other crimes and
abuses for which proper charges are filed against him by the aggrieved party or parties, his previous suspension shall not
be a bar to his being preventively suspended again, if warranted under subpar. (2), Section 63 of the Local Government
Code.

WHEREFORE, premises considered, the petitions are DISMISSED. The Temporary Restraining Order issued is LIFTED. The
suspensions of the petitioners are AFFIRMED, provided that the petitioner, Mayor Rodolfo Ganzon, may not be made to
serve future suspensions on account of any of the remaining administrative charges pending against him for acts
committed prior to August 11, 1988. The Secretary of Interior is ORDERED to consolidate all such administrative cases
pending against Mayor Ganzon. The sixty-day suspension against the petitioner, Mary Ann Rivera Artieda, is AFFIRMED.
No costs. SO ORDERED.
EN BANC

G.R. No. 79956 January 29, 1990

CORDILLERA BROAD COALITION, petitioner,

vs.
COMMISSION ON AUDIT, respondent.

G.R. No. 82217 January 29, 1990

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

CORTES, J.:

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

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

AUTONOMOUS REGIONS

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

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

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

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

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

Sec. 19. The first Congress elected under this Constitution shall, within eighteen months from the time of organization of
both Houses, pass the organic acts for the autonomous regions in Muslim Mindanao and the Cordilleras.
Sec. 20. Within its territorial jurisdiction and subject to the provisions of this Constitution and national laws, the organic
act of autonomous regions shall provide for legislative powers over:

(1) Administrative organization;

(2) Creation of sources of revenues;

(3) Ancestral domain and natural resources;

(4) Personal, family and property relations;

(5) Regional urban and rural planning development;

(6) Economic, social and tourism development ;

(7) Educational policies;

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

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

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

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

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

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

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

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

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

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

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

On July 15, 1987, President Corazon C. Aquino signed the joint draft into law, known now as E.O. 220. [Rejoinder G.R. No.
82217, pp. 2-3].
Executive Order No. 220, issued by the President in the exercise of her legislative powers under Art. XVIII, sec. 6 of the
1987 Constitution, created the Cordillera Administrative Region (CAR) , which covers the provinces of Abra, Benguet,
Ifugao, Kalinga-Apayao and Mountain Province and the City of Baguio [secs. 1 and 2]. It was created to accelerate economic
and social growth in the region and to prepare for the establishment of the autonomous region in the Cordilleras [sec. 3].
Its main function is to coordinate the planning and implementation of programs and services in the region, particularly,
to coordinate with the local government units as well as with the executive departments of the National Government in
the supervision of field offices and in identifying, planning, monitoring, and accepting projects and activities in the region
[sec. 5]. It shall also monitor the implementation of all ongoing national and local government projects in the region [sec.
20]. The CAR shall have a Cordillera Regional Assembly as a policy-formulating body and a Cordillera Executive Board as
an implementing arm [secs. 7, 8 and 10]. The CAR and the Assembly and Executive Board shall exist until such time as the
autonomous regional government is established and organized [sec. 17].

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

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

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

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

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

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

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

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

1. A reading of E.O. No. 220 will easily reveal that what it actually envisions is the consolidation and coordination of the
delivery of services of line departments and agencies of the National Government in the areas covered by the
administrative region as a step preparatory to the grant of autonomy to the Cordilleras. It does not create the autonomous
region contemplated in the Constitution. It merely provides for transitory measures in anticipation of the enactment of
an organic act and the creation of an autonomous region. In short, it prepares the ground for autonomy. This does not
necessarily conflict with the provisions of the Constitution on autonomous regions, as we shall show later.
The Constitution outlines a complex procedure for the creation of an autonomous region in the Cordilleras. A regional
consultative commission shall first be created. The President shall then appoint the members of a regional consultative
commission from a list of nominees from multi-sectoral bodies. The commission shall assist the Congress in preparing the
organic act for the autonomous region. The organic act shall be passed by the first Congress under the 1987 Constitution
within eighteen months from the time of its organization and enacted into law. Thereafter there shall be held a plebiscite
for the approval of the organic act [Art. X, sec. 18]. Only then, after its approval in the plebiscite, shall the autonomous
region be created.

Undoubtedly, all of these will take time. The President, in 1987 still exercising legislative powers, as the first Congress had
not yet convened, saw it fit to provide for some measures to address the urgent needs of the Cordilleras in the meantime
that the organic act had not yet been passed and the autonomous region created. These measures we find in E.O. No. 220.
The steps taken by the President are obviously perceived by petitioners, particularly petitioner Yaranon who views E.O.
No. 220 as capitulation to the Cordillera People's Liberation Army (CPLA) of Balweg, as unsound, but the Court cannot
inquire into the wisdom of the measures taken by the President, We can only inquire into whether or not the measures
violate the Constitution. But as we have seen earlier, they do not.

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

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

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

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

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

Clearly, petitioners' principal challenge has failed.

II

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

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

xxx xxx xxx

Sec. 10. No province, city, municipality, or barangay may be created, divided, merged, abolished, or its boundary
substantially altered, except in accordance with the criteria established in the local government code and subject to
approval by a majority of the votes cast in a plebiscite in the political units directly affected.

We have seen earlier that the CAR is not the autonomous region in the Cordilleras contemplated by the Constitution, Thus,
we now address petitioners' assertion that E. 0. No. 220 contravenes the Constitution by creating a new territorial and
political subdivision.

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

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

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

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

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

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

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

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

On the other hand, the creation of autonomous regions in Muslim Mindanao and the Cordilleras, which is peculiar to the
1987 Constitution contemplates the grant of political autonomy and not just administrative autonomy these regions. Thus,
the provision in the Constitution for an autonomous regional government with a basic structure consisting of an executive
department and a legislative assembly and special courts with personal, family and property law jurisdiction in each of the
autonomous regions [Art. X, sec. 18].

As we have said earlier, the CAR is a mere transitory coordinating agency that would prepare the stage for political
autonomy for the Cordilleras. It fills in the resulting gap in the process of transforming a group of adjacent territorial and
political subdivisions already enjoying local or administrative autonomy into an autonomous region vested with political
autonomy.

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

WHEREFORE, the petitions are DISMISSED for lack of merit.

SO ORDERED.

EN BANC

[G.R. No. 132988. July 19, 2000]

AQUILINO Q. PIMENTEL JR., petitioner, vs. Hon. ALEXANDER AGUIRRE in his capacity as Executive Secretary, Hon.
EMILIA BONCODIN in her capacity as Secretary of the Department of Budget and Management, respondents.

ROBERTO PAGDANGANAN, intervenor.

DECISION

PANGANIBAN, J.:

The Constitution vests the President with the power of supervision, not control, over local government units (LGUs). Such
power enables him to see to it that LGUs and their officials execute their tasks in accordance with law. While he may issue
advisories and seek their cooperation in solving economic difficulties, he cannot prevent them from performing their tasks
and using available resources to achieve their goals. He may not withhold or alter any authority or power given them by
the law. Thus, the withholding of a portion of internal revenue allotments legally due them cannot be directed by
administrative fiat.
The Case

Before us is an original Petition for Certiorari and Prohibition seeking (1) to annul Section 1 of Administrative Order (AO)
No. 372, insofar as it requires local government units to reduce their expenditures by 25 percent of their authorized regular
appropriations for non-personal services; and (2) to enjoin respondents from implementing Section 4 of the Order, which
withholds a portion of their internal revenue allotments.

On November 17, 1998, Roberto Pagdanganan, through Counsel Alberto C. Agra, filed a Motion for Intervention/Motion
to Admit Petition for Intervention,[1] attaching thereto his Petition in Intervention[2] joining petitioner in the reliefs
sought. At the time, intervenor was the provincial governor of Bulacan, national president of the League of Provinces of
the Philippines and chairman of the League of Leagues of Local Governments. In a Resolution dated December 15, 1998,
the Court noted said Motion and Petition.
The Facts and the Arguments

On December 27, 1997, the President of the Philippines issued AO 372. Its full text, with emphasis on the assailed
provisions, is as follows:

"ADMINISTRATIVE ORDER NO. 372

ADOPTION OF ECONOMY MEASURES IN GOVERNMENT FOR FY 1998

WHEREAS, the current economic difficulties brought about by the peso depreciation requires continued prudence in
government fiscal management to maintain economic stability and sustain the country's growth momentum;

WHEREAS, it is imperative that all government agencies adopt cash management measures to match expenditures with
available resources;

NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the Philippines, by virtue of the powers vested in me
by the Constitution, do hereby order and direct:

SECTION 1. All government departments and agencies, including state universities and colleges, government-owned
and controlled corporations and local governments units will identify and implement measures in FY 1998 that will
reduce total expenditures for the year by at least 25% of authorized regular appropriations for non-personal services
items, along the following suggested areas:

1. Continued implementation of the streamlining policy on organization and staffing by deferring action on the following:

a. Operationalization of new agencies;

b. Expansion of organizational units and/or creation of positions;

c. Filling of positions; and

d. Hiring of additional/new consultants, contractual and casual personnel, regardless of funding source.

2. Suspension of the following activities:

a. Implementation of new capital/infrastructure projects, except those which have already been contracted out;

b. Acquisition of new equipment and motor vehicles;

c. All foreign travels of government personnel, except those associated with scholarships and trainings funded by grants;

d. Attendance in conferences abroad where the cost is charged to the government except those clearly essential to
Philippine commitments in the international field as may be determined by the Cabinet;

e. Conduct of trainings/workshops/seminars, except those conducted by government training institutions and agencies in
the performance of their regular functions and those that are funded by grants;
f. Conduct of cultural and social celebrations and sports activities, except those associated with the Philippine Centennial
celebration and those involving regular competitions/events;

g. Grant of honoraria, except in cases where it constitutes the only source of compensation from government received by
the person concerned;

h. Publications, media advertisements and related items, except those required by law or those already being undertaken
on a regular basis;

i. Grant of new/additional benefits to employees, except those expressly and specifically authorized by law; and

j. Donations, contributions, grants and gifts, except those given by institutions to victims of calamities.

3. Suspension of all tax expenditure subsidies to all GOCCs and LGUs

4. Reduction in the volume of consumption of fuel, water, office supplies, electricity and other utilities

5. Deferment of projects that are encountering significant implementation problems

6. Suspension of all realignment of funds and the use of savings and reserves

SECTION 2. Agencies are given the flexibility to identify the specific sources of cost-savings, provided the 25% minimum
savings under Section 1 is complied with.

SECTION 3. A report on the estimated savings generated from these measures shall be submitted to the Office of the
President, through the Department of Budget and Management, on a quarterly basis using the attached format.

SECTION 4. Pending the assessment and evaluation by the Development Budget Coordinating Committee of the
emerging fiscal situation, the amount equivalent to 10% of the internal revenue allotment to local government units
shall be withheld.

SECTION 5. The Development Budget Coordination Committee shall conduct a monthly review of the fiscal position of the
National Government and if necessary, shall recommend to the President the imposition of additional reserves or the
lifting of previously imposed reserves.

SECTION 6. This Administrative Order shall take effect January 1, 1998 and shall remain valid for the entire year unless
otherwise lifted.

DONE in the City of Manila, this 27th day of December, in the year of our Lord, nineteen hundred and ninety-seven."

Subsequently, on December 10, 1998, President Joseph E. Estrada issued AO 43, amending Section 4 of AO 372, by
reducing to five percent (5%) the amount of internal revenue allotment (IRA) to be withheld from the LGUs.

Petitioner contends that the President, in issuing AO 372, was in effect exercising the power of control over LGUs. The
Constitution vests in the President, however, only the power of general supervision over LGUs, consistent with the
principle of local autonomy. Petitioner further argues that the directive to withhold ten percent (10%) of their IRA is in
contravention of Section 286 of the Local Government Code and of Section 6, Article X of the Constitution, providing for
the automatic release to each of these units its share in the national internal revenue.

The solicitor general, on behalf of the respondents, claims on the other hand that AO 372 was issued to alleviate the
"economic difficulties brought about by the peso devaluation" and constituted merely an exercise of the President's power
of supervision over LGUs. It allegedly does not violate local fiscal autonomy, because it merely directs local governments
to identify measures that will reduce their total expenditures for non-personal services by at least 25 percent. Likewise,
the withholding of 10 percent of the LGUs IRA does not violate the statutory prohibition on the imposition of any lien or
holdback on their revenue shares, because such withholding is "temporary in nature pending the assessment and
evaluation by the Development Coordination Committee of the emerging fiscal situation."
The Issues

The Petition[3] submits the following issues for the Court's resolution:

"A. Whether or not the president committed grave abuse of discretion [in] ordering all LGUS to adopt a 25% cost reduction
program in violation of the LGU[']S fiscal autonomy

"B. Whether or not the president committed grave abuse of discretion in ordering the withholding of 10% of the LGU[']S
IRA"

In sum, the main issue is whether (a) Section 1 of AO 372, insofar as it "directs" LGUs to reduce their expenditures by 25
percent; and (b) Section 4 of the same issuance, which withholds 10 percent of their internal revenue allotments, are valid
exercises of the President's power of general supervision over local governments.

Additionally, the Court deliberated on the question whether petitioner had the locus standi to bring this suit, despite
respondents' failure to raise the issue.[4] However, the intervention of Roberto Pagdanganan has rendered academic any
further discussion on this matter.
The Court's Ruling

The Petition is partly meritorious.

Main Issue:

Validity of AO 372

Insofar as LGUs Are Concerned

Before resolving the main issue, we deem it important and appropriate to define certain crucial concepts: (1) the scope of
the President's power of general supervision over local governments and (2) the extent of the local governments'
autonomy.
Scope of President's Power of Supervision Over LGUs

Section 4 of Article X of the Constitution confines the President's power over local governments to one of general
supervision. It reads as follows:

"Sec. 4. The President of the Philippines shall exercise general supervision over local governments. x x x"

This provision has been interpreted to exclude the power of control. In Mondano v. Silvosa,[5] the Court contrasted the
President's power of supervision over local government officials with that of his power of control over executive officials
of the national government. It was emphasized that the two terms -- supervision and control -- differed in meaning and
extent. The Court distinguished them as follows:

"x x x In administrative law, supervision means overseeing or the power or authority of an officer to see that subordinate
officers perform their duties. If the latter fail or neglect to fulfill them, the former may take such action or step as
prescribed by law to make them perform their duties. Control, on the other hand, means the power of an officer to alter
or modify or nullify or set aside what a subordinate officer ha[s] done in the performance of his duties and to substitute
the judgment of the former for that of the latter."[6]

In Taule v. Santos,[7] we further stated that the Chief Executive wielded no more authority than that of checking whether
local governments or their officials were performing their duties as provided by the fundamental law and by statutes. He
cannot interfere with local governments, so long as they act within the scope of their authority. "Supervisory power, when
contrasted with control, is the power of mere oversight over an inferior body; it does not include any restraining authority
over such body,"[8] we said.
In a more recent case, Drilon v. Lim,[9] the difference between control and supervision was further delineated. Officers in
control lay down the rules in the performance or accomplishment of an act. If these rules are not followed, they may, in
their discretion, order the act undone or redone by their subordinates or even decide to do it themselves. On the other
hand, supervision does not cover such authority. Supervising officials merely see to it that the rules are followed, but they
themselves do not lay down such rules, nor do they have the discretion to modify or replace them. If the rules are not
observed, they may order the work done or redone, but only to conform to such rules. They may not prescribe their own
manner of execution of the act. They have no discretion on this matter except to see to it that the rules are followed.

Under our present system of government, executive power is vested in the President.[10] The members of the Cabinet and
other executive officials are merely alter egos. As such, they are subject to the power of control of the President, at whose
will and behest they can be removed from office; or their actions and decisions changed, suspended or reversed. [11] In
contrast, the heads of political subdivisions are elected by the people. Their sovereign powers emanate from the
electorate, to whom they are directly accountable. By constitutional fiat, they are subject to the Presidents supervision
only, not control, so long as their acts are exercised within the sphere of their legitimate powers. By the same token, the
President may not withhold or alter any authority or power given them by the Constitution and the law.
Extent of Local Autonomy

Hand in hand with the constitutional restraint on the President's power over local governments is the state policy of
ensuring local autonomy.[12]

In Ganzon v. Court of Appeals,[13] we said that local autonomy signified "a more responsive and accountable local
government structure instituted through a system of decentralization."The grant of autonomy is intended to "break up
the monopoly of the national government over the affairs of local governments, x x x not x x x to end the relation of
partnership and interdependence between the central administration and local government units x x x." Paradoxically,
local governments are still subject to regulation, however limited, for the purpose of enhancing self-government.[14]

Decentralization simply means the devolution of national administration, not power, to local governments. Local officials
remain accountable to the central government as the law may provide.[15] The difference between decentralization of
administration and that of power was explained in detail in Limbona v. Mangelin[16] as follows:

"Now, autonomy is either decentralization of administration or decentralization of power. There is decentralization of

administration when the central government delegates administrative powers to political subdivisions in order to broaden
the base of government power and in the process to make local governments 'more responsive and accountable,'[17] and
'ensure their fullest development as self-reliant communities and make them more effective partners in the pursuit of
national development and social progress.'[18] At the same time, it relieves the central government of the burden of
managing local affairs and enables it to concentrate on national concerns. The President exercises 'general
supervision'[19] over them, but only to 'ensure that local affairs are administered according to law.' [20] He has no control
over their acts in the sense that he can substitute their judgments with his own. [21]

Decentralization of power, on the other hand, involves an abdication of political power in the favor of local government
units declared to be autonomous. In that case, the autonomous government is free to chart its own destiny and shape its
future with minimum intervention from central authorities. According to a constitutional author, decentralization of
power amounts to 'self-immolation,' since in that event, the autonomous government becomes accountable not to the
central authorities but to its constituency."[22]

Under the Philippine concept of local autonomy, the national government has not completely relinquished all its powers
over local governments, including autonomous regions. Only administrative powers over local affairs are delegated to
political subdivisions. The purpose of the delegation is to make governance more directly responsive and effective at the
local levels. In turn, economic, political and social development at the smaller political units are expected to propel social
and economic growth and development. But to enable the country to develop as a whole, the programs and policies
effected locally must be integrated and coordinated towards a common national goal. Thus, policy-setting for the entire
country still lies in the President and Congress. As we stated in Magtajas v. Pryce Properties Corp., Inc., municipal
governments are still agents of the national government. [23]
The Nature of AO 372

Consistent with the foregoing jurisprudential precepts, let us now look into the nature of AO 372. As its preambular clauses
declare, the Order was a "cash management measure" adopted by the government "to match expenditures with available
resources," which were presumably depleted at the time due to "economic difficulties brought about by the peso
depreciation." Because of a looming financial crisis, the President deemed it necessary to "direct all government agencies,
state universities and colleges, government-owned and controlled corporations as well as local governments to reduce
their total expenditures by at least 25 percent along suggested areas mentioned in AO 372.

Under existing law, local government units, in addition to having administrative autonomy in the exercise of their functions,
enjoy fiscal autonomy as well. Fiscal autonomy means that local governments have the power to create their own sources
of revenue in addition to their equitable share in the national taxes released by the national government, as well as the
power to allocate their resources in accordance with their own priorities. It extends to the preparation of their budgets,
and local officials in turn have to work within the constraints thereof. They are not formulated at the national level and
imposed on local governments, whether they are relevant to local needs and resources or not. Hence, the necessity of a
balancing of viewpoints and the harmonization of proposals from both local and national officials, [24] who in any case are
partners in the attainment of national goals.

Local fiscal autonomy does not however rule out any manner of national government intervention by way of supervision,
in order to ensure that local programs, fiscal and otherwise, are consistent with national goals. Significantly, the President,
by constitutional fiat, is the head of the economic and planning agency of the government, [25] primarily responsible for
formulating and implementing continuing, coordinated and integrated social and economic policies, plans and
programs[26] for the entire country. However, under the Constitution, the formulation and the implementation of such
policies and programs are subject to "consultations with the appropriate public agencies, various private sectors, and local
government units." The President cannot do so unilaterally.

Consequently, the Local Government Code provides:[27]

"x x x [I]n the event the national government incurs an unmanaged public sector deficit, the President of the Philippines
is hereby authorized, upon the recommendation of [the] Secretary of Finance, Secretary of the Interior and Local
Government and Secretary of Budget and Management, and subject to consultation with the presiding officers of both
Houses of Congress and the presidents of the liga, to make the necessary adjustments in the internal revenue allotment
of local government units but in no case shall the allotment be less than thirty percent (30%) of the collection of national
internal revenue taxes of the third fiscal year preceding the current fiscal year x x x."

There are therefore several requisites before the President may interfere in local fiscal matters: (1) an unmanaged public
sector deficit of the national government; (2) consultations with the presiding officers of the Senate and the House of
Representatives and the presidents of the various local leagues; and (3) the corresponding recommendation of the
secretaries of the Department of Finance, Interior and Local Government, and Budget and Management. Furthermore,
any adjustment in the allotment shall in no case be less than thirty percent (30%) of the collection of national internal
revenue taxes of the third fiscal year preceding the current one.

Petitioner points out that respondents failed to comply with these requisites before the issuance and the implementation
of AO 372. At the very least, they did not even try to show that the national government was suffering from an
unmanageable public sector deficit. Neither did they claim having conducted consultations with the different leagues of
local governments.Without these requisites, the President has no authority to adjust, much less to reduce, unilaterally the
LGU's internal revenue allotment.

The solicitor general insists, however, that AO 372 is merely directory and has been issued by the President consistent
with his power of supervision over local governments. It is intended only to advise all government agencies and
instrumentalities to undertake cost-reduction measures that will help maintain economic stability in the country, which is
facing economic difficulties. Besides, it does not contain any sanction in case of noncompliance. Being merely an advisory,
therefore, Section 1 of AO 372 is well within the powers of the President. Since it is not a mandatory imposition, the
directive cannot be characterized as an exercise of the power of control.

While the wordings of Section 1 of AO 372 have a rather commanding tone, and while we agree with petitioner that the
requirements of Section 284 of the Local Government Code have not been satisfied, we are prepared to accept the solicitor
general's assurance that the directive to "identify and implement measures x x x that will reduce total expenditures x x
x by at least 25% of authorized regular appropriation" is merely advisory in character, and does not constitute a mandatory
or binding order that interferes with local autonomy. The language used, while authoritative, does not amount to a
command that emanates from a boss to a subaltern.

Rather, the provision is merely an advisory to prevail upon local executives to recognize the need for fiscal restraint in a
period of economic difficulty. Indeed, all concerned would do well to heed the President's call to unity, solidarity and
teamwork to help alleviate the crisis. It is understood, however, that no legal sanction may be imposed upon LGUs and
their officials who do not follow such advice. It is in this light that we sustain the solicitor general's contention in regard
to Section 1.
Withholding a Part of LGUs' IRA

Section 4 of AO 372 cannot, however, be upheld. A basic feature of local fiscal autonomy is the automatic release of the
shares of LGUs in the national internal revenue. This is mandated by no less than the Constitution. [28] The Local
Government Code[29] specifies further that the release shall be made directly to the LGU concerned within five (5) days
after every quarter of the year and "shall not be subject to any lien or holdback that may be imposed by the national
government for whatever purpose."[30] As a rule, the term "shall" is a word of command that must be given a compulsory
meaning.[31] The provision is, therefore, imperative.

Section 4 of AO 372, however, orders the withholding, effective January 1, 1998, of 10 percent of the LGUs' IRA "pending
the assessment and evaluation by the Development Budget Coordinating Committee of the emerging fiscal situation" in
the country. Such withholding clearly contravenes the Constitution and the law. Although temporary, it is equivalent to a
holdback, which means "something held back or withheld, often temporarily."[32] Hence, the "temporary" nature of the
retention by the national government does not matter. Any retention is prohibited.

In sum, while Section 1 of AO 372 may be upheld as an advisory effected in times of national crisis, Section 4 thereof has
no color of validity at all. The latter provision effectively encroaches on the fiscal autonomy of local
governments. Concededly, the President was well-intentioned in issuing his Order to withhold the LGUs IRA, but the rule
of law requires that even the best intentions must be carried out within the parameters of the Constitution and the
law. Verily, laudable purposes must be carried out by legal methods.
Refutation of Justice Kapunan's Dissent

Mr. Justice Santiago M. Kapunan dissents from our Decision on the grounds that, allegedly, (1) the Petition is premature;
(2) AO 372 falls within the powers of the President as chief fiscal officer; and (3) the withholding of the LGUs IRA is implied
in the President's authority to adjust it in case of an unmanageable public sector deficit.

First, on prematurity. According to the Dissent, when "the conduct has not yet occurred and the challenged construction
has not yet been adopted by the agency charged with administering the administrative order, the determination of the
scope and constitutionality of the executive action in advance of its immediate adverse effect involves too remote and
abstract an inquiry for the proper exercise of judicial function."

This is a rather novel theory -- that people should await the implementing evil to befall on them before they can question
acts that are illegal or unconstitutional. Be it remembered that the real issue here is whether the Constitution and the law
are contravened by Section 4 of AO 372, not whether they are violated by the acts implementing it. In the unanimous en
banc case Taada v. Angara,[33] this Court held that when an act of the legislative department is seriously alleged to have
infringed the Constitution, settling the controversy becomes the duty of this Court. By the mere enactment of the
questioned law or the approval of the challenged action, the dispute is said to have ripened into a judicial controversy
even without any other overt act. Indeed, even a singular violation of the Constitution and/or the law is enough to awaken
judicial duty. Said the Court:

"In seeking to nullify an act of the Philippine Senate on the ground that it contravenes the Constitution, the petition no
doubt raises a justiciable controversy. Where an action of the legislative branch is seriously alleged to have infringed the
Constitution, it becomes not only the right but in fact the duty of the judiciary to settle the dispute. 'The question thus
posed is judicial rather than political. The duty (to adjudicate) remains to assure that the supremacy of the Constitution is
upheld.'[34] Once a 'controversy as to the application or interpretation of a constitutional provision is raised before this
Court x x x , it becomes a legal issue which the Court is bound by constitutional mandate to decide.' [35]

xxxxxxxxx

"As this Court has repeatedly and firmly emphasized in many cases, [36] it will not shirk, digress from or abandon its sacred
duty and authority to uphold the Constitution in matters that involve grave abuse of discretion brought before it in
appropriate cases, committed by any officer, agency, instrumentality or department of the government."

In the same vein, the Court also held in Tatad v. Secretary of the Department of Energy:[37]

"x x x Judicial power includes not only the duty of the courts to settle actual controversies involving rights which are legally
demandable and enforceable, but also the duty to determine whether or not there has been grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of government. The courts, as
guardians of the Constitution, have the inherent authority to determine whether a statute enacted by the legislature
transcends the limit imposed by the fundamental law. Where the statute violates the Constitution, it is not only the right
but the duty of the judiciary to declare such act unconstitutional and void."

By the same token, when an act of the President, who in our constitutional scheme is a coequal of Congress, is seriously
alleged to have infringed the Constitution and the laws, as in the present case, settling the dispute becomes the duty and
the responsibility of the courts.

Besides, the issue that the Petition is premature has not been raised by the parties; hence it is deemed
waived. Considerations of due process really prevents its use against a party that has not been given sufficient notice of
its presentation, and thus has not been given the opportunity to refute it. [38]

Second, on the President's power as chief fiscal officer of the country. Justice Kapunan posits that Section 4 of AO 372
conforms with the President's role as chief fiscal officer, who allegedly "is clothed by law with certain powers to ensure
the observance of safeguards and auditing requirements, as well as the legal prerequisites in the release and use of IRAs,
taking into account the constitutional and statutory mandates." [39] He cites instances when the President may lawfully
intervene in the fiscal affairs of LGUs.

Precisely, such powers referred to in the Dissent have specifically been authorized by law and have not been challenged
as violative of the Constitution. On the other hand, Section 4 of AO 372, as explained earlier, contravenes explicit provisions
of the Local Government Code (LGC) and the Constitution. In other words, the acts alluded to in the Dissent are indeed
authorized by law; but, quite the opposite, Section 4 of AO 372 is bereft of any legal or constitutional basis.

Third, on the President's authority to adjust the IRA of LGUs in case of an unmanageable public sector deficit. It must be
emphasized that in striking down Section 4 of AO 372, this Court is not ruling out any form of reduction in the IRAs of
LGUs. Indeed, as the President may make necessary adjustments in case of an unmanageable public sector deficit, as
stated in the main part of this Decision, and in line with Section 284 of the LGC, which Justice Kapunan cites. He, however,
merely glances over a specific requirement in the same provision -- that such reduction is subject to consultation with the
presiding officers of both Houses of Congress and, more importantly, with the presidents of the leagues of local
governments.
Notably, Justice Kapunan recognizes the need for "interaction between the national government and the LGUs at the
planning level," in order to ensure that "local development plans x x x hew to national policies and standards." The
problem is that no such interaction or consultation was ever held prior to the issuance of AO 372. This is why the petitioner
and the intervenor (who was a provincial governor and at the same time president of the League of Provinces of the
Philippines and chairman of the League of Leagues of Local Governments) have protested and instituted this
action. Significantly, respondents do not deny the lack of consultation.

In addition, Justice Kapunan cites Section 287 [40] of the LGC as impliedly authorizing the President to withhold the IRA of
an LGU, pending its compliance with certain requirements.Even a cursory reading of the provision reveals that it is totally
inapplicable to the issue at bar. It directs LGUs to appropriate in their annual budgets 20 percent of their respective IRAs
for development projects. It speaks of no positive power granted the President to priorly withhold any amount. Not at all.

WHEREFORE, the Petition is GRANTED. Respondents and their successors are hereby permanently PROHIBITED from
implementing Administrative Order Nos. 372 and 43, respectively dated December 27, 1997 and December 10, 1998,
insofar as local government units are concerned.

SO ORDERED.

EN BANC

[G.R. No. 132988. July 19, 2000]

AQUILINO Q. PIMENTEL JR., petitioner, vs. Hon. ALEXANDER AGUIRRE in his capacity as Executive Secretary, Hon.
EMILIA BONCODIN in her capacity as Secretary of the Department of Budget and Management, respondents.

ROBERTO PAGDANGANAN, intervenor.

DECISION

PANGANIBAN, J.:

The Constitution vests the President with the power of supervision, not control, over local government units (LGUs). Such
power enables him to see to it that LGUs and their officials execute their tasks in accordance with law. While he may issue
advisories and seek their cooperation in solving economic difficulties, he cannot prevent them from performing their tasks
and using available resources to achieve their goals. He may not withhold or alter any authority or power given them by
the law. Thus, the withholding of a portion of internal revenue allotments legally due them cannot be directed by
administrative fiat.
The Case

Before us is an original Petition for Certiorari and Prohibition seeking (1) to annul Section 1 of Administrative Order (AO)
No. 372, insofar as it requires local government units to reduce their expenditures by 25 percent of their authorized regular
appropriations for non-personal services; and (2) to enjoin respondents from implementing Section 4 of the Order, which
withholds a portion of their internal revenue allotments.

On November 17, 1998, Roberto Pagdanganan, through Counsel Alberto C. Agra, filed a Motion for Intervention/Motion
to Admit Petition for Intervention,[1] attaching thereto his Petition in Intervention[2] joining petitioner in the reliefs
sought. At the time, intervenor was the provincial governor of Bulacan, national president of the League of Provinces of
the Philippines and chairman of the League of Leagues of Local Governments. In a Resolution dated December 15, 1998,
the Court noted said Motion and Petition.
The Facts and the Arguments
On December 27, 1997, the President of the Philippines issued AO 372. Its full text, with emphasis on the assailed
provisions, is as follows:

"ADMINISTRATIVE ORDER NO. 372

ADOPTION OF ECONOMY MEASURES IN GOVERNMENT FOR FY 1998

WHEREAS, the current economic difficulties brought about by the peso depreciation requires continued prudence in
government fiscal management to maintain economic stability and sustain the country's growth momentum;

WHEREAS, it is imperative that all government agencies adopt cash management measures to match expenditures with
available resources;

NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the Philippines, by virtue of the powers vested in me
by the Constitution, do hereby order and direct:

SECTION 1. All government departments and agencies, including state universities and colleges, government-owned
and controlled corporations and local governments units will identify and implement measures in FY 1998 that will
reduce total expenditures for the year by at least 25% of authorized regular appropriations for non-personal services
items, along the following suggested areas:

1. Continued implementation of the streamlining policy on organization and staffing by deferring action on the following:

a. Operationalization of new agencies;

b. Expansion of organizational units and/or creation of positions;

c. Filling of positions; and

d. Hiring of additional/new consultants, contractual and casual personnel, regardless of funding source.

2. Suspension of the following activities:

a. Implementation of new capital/infrastructure projects, except those which have already been contracted out;

b. Acquisition of new equipment and motor vehicles;

c. All foreign travels of government personnel, except those associated with scholarships and trainings funded by grants;

d. Attendance in conferences abroad where the cost is charged to the government except those clearly essential to
Philippine commitments in the international field as may be determined by the Cabinet;

e. Conduct of trainings/workshops/seminars, except those conducted by government training institutions and agencies in
the performance of their regular functions and those that are funded by grants;

f. Conduct of cultural and social celebrations and sports activities, except those associated with the Philippine Centennial
celebration and those involving regular competitions/events;

g. Grant of honoraria, except in cases where it constitutes the only source of compensation from government received by
the person concerned;

h. Publications, media advertisements and related items, except those required by law or those already being undertaken
on a regular basis;

i. Grant of new/additional benefits to employees, except those expressly and specifically authorized by law; and

j. Donations, contributions, grants and gifts, except those given by institutions to victims of calamities.

3. Suspension of all tax expenditure subsidies to all GOCCs and LGUs

4. Reduction in the volume of consumption of fuel, water, office supplies, electricity and other utilities

5. Deferment of projects that are encountering significant implementation problems

6. Suspension of all realignment of funds and the use of savings and reserves

SECTION 2. Agencies are given the flexibility to identify the specific sources of cost-savings, provided the 25% minimum
savings under Section 1 is complied with.

SECTION 3. A report on the estimated savings generated from these measures shall be submitted to the Office of the
President, through the Department of Budget and Management, on a quarterly basis using the attached format.

SECTION 4. Pending the assessment and evaluation by the Development Budget Coordinating Committee of the
emerging fiscal situation, the amount equivalent to 10% of the internal revenue allotment to local government units
shall be withheld.

SECTION 5. The Development Budget Coordination Committee shall conduct a monthly review of the fiscal position of the
National Government and if necessary, shall recommend to the President the imposition of additional reserves or the
lifting of previously imposed reserves.

SECTION 6. This Administrative Order shall take effect January 1, 1998 and shall remain valid for the entire year unless
otherwise lifted.

DONE in the City of Manila, this 27th day of December, in the year of our Lord, nineteen hundred and ninety-seven."

Subsequently, on December 10, 1998, President Joseph E. Estrada issued AO 43, amending Section 4 of AO 372, by
reducing to five percent (5%) the amount of internal revenue allotment (IRA) to be withheld from the LGUs.

Petitioner contends that the President, in issuing AO 372, was in effect exercising the power of control over LGUs. The
Constitution vests in the President, however, only the power of general supervision over LGUs, consistent with the
principle of local autonomy. Petitioner further argues that the directive to withhold ten percent (10%) of their IRA is in
contravention of Section 286 of the Local Government Code and of Section 6, Article X of the Constitution, providing for
the automatic release to each of these units its share in the national internal revenue.

The solicitor general, on behalf of the respondents, claims on the other hand that AO 372 was issued to alleviate the
"economic difficulties brought about by the peso devaluation" and constituted merely an exercise of the President's power
of supervision over LGUs. It allegedly does not violate local fiscal autonomy, because it merely directs local governments
to identify measures that will reduce their total expenditures for non-personal services by at least 25 percent. Likewise,
the withholding of 10 percent of the LGUs IRA does not violate the statutory prohibition on the imposition of any lien or
holdback on their revenue shares, because such withholding is "temporary in nature pending the assessment and
evaluation by the Development Coordination Committee of the emerging fiscal situation."
The Issues

The Petition[3] submits the following issues for the Court's resolution:

"A. Whether or not the president committed grave abuse of discretion [in] ordering all LGUS to adopt a 25% cost reduction
program in violation of the LGU[']S fiscal autonomy

"B. Whether or not the president committed grave abuse of discretion in ordering the withholding of 10% of the LGU[']S
IRA"

In sum, the main issue is whether (a) Section 1 of AO 372, insofar as it "directs" LGUs to reduce their expenditures by 25
percent; and (b) Section 4 of the same issuance, which withholds 10 percent of their internal revenue allotments, are valid
exercises of the President's power of general supervision over local governments.
Additionally, the Court deliberated on the question whether petitioner had the locus standi to bring this suit, despite
respondents' failure to raise the issue.[4] However, the intervention of Roberto Pagdanganan has rendered academic any
further discussion on this matter.
The Court's Ruling

The Petition is partly meritorious.

Main Issue:

Validity of AO 372

Insofar as LGUs Are Concerned

Before resolving the main issue, we deem it important and appropriate to define certain crucial concepts: (1) the scope of
the President's power of general supervision over local governments and (2) the extent of the local governments'
autonomy.
Scope of President's Power of Supervision Over LGUs

Section 4 of Article X of the Constitution confines the President's power over local governments to one of general
supervision. It reads as follows:

"Sec. 4. The President of the Philippines shall exercise general supervision over local governments. x x x"

This provision has been interpreted to exclude the power of control. In Mondano v. Silvosa,[5] the Court contrasted the
President's power of supervision over local government officials with that of his power of control over executive officials
of the national government. It was emphasized that the two terms -- supervision and control -- differed in meaning and
extent. The Court distinguished them as follows:

"x x x In administrative law, supervision means overseeing or the power or authority of an officer to see that subordinate
officers perform their duties. If the latter fail or neglect to fulfill them, the former may take such action or step as
prescribed by law to make them perform their duties. Control, on the other hand, means the power of an officer to alter
or modify or nullify or set aside what a subordinate officer ha[s] done in the performance of his duties and to substitute
the judgment of the former for that of the latter."[6]

In Taule v. Santos,[7] we further stated that the Chief Executive wielded no more authority than that of checking whether
local governments or their officials were performing their duties as provided by the fundamental law and by statutes. He
cannot interfere with local governments, so long as they act within the scope of their authority. "Supervisory power, when
contrasted with control, is the power of mere oversight over an inferior body; it does not include any restraining authority
over such body,"[8] we said.

In a more recent case, Drilon v. Lim,[9] the difference between control and supervision was further delineated. Officers in
control lay down the rules in the performance or accomplishment of an act. If these rules are not followed, they may, in
their discretion, order the act undone or redone by their subordinates or even decide to do it themselves. On the other
hand, supervision does not cover such authority. Supervising officials merely see to it that the rules are followed, but they
themselves do not lay down such rules, nor do they have the discretion to modify or replace them. If the rules are not
observed, they may order the work done or redone, but only to conform to such rules. They may not prescribe their own
manner of execution of the act. They have no discretion on this matter except to see to it that the rules are followed.

Under our present system of government, executive power is vested in the President. [10] The members of the Cabinet and
other executive officials are merely alter egos. As such, they are subject to the power of control of the President, at whose
will and behest they can be removed from office; or their actions and decisions changed, suspended or reversed. [11] In
contrast, the heads of political subdivisions are elected by the people. Their sovereign powers emanate from the
electorate, to whom they are directly accountable. By constitutional fiat, they are subject to the Presidents supervision
only, not control, so long as their acts are exercised within the sphere of their legitimate powers. By the same token, the
President may not withhold or alter any authority or power given them by the Constitution and the law.
Extent of Local Autonomy

Hand in hand with the constitutional restraint on the President's power over local governments is the state policy of
ensuring local autonomy.[12]

In Ganzon v. Court of Appeals,[13] we said that local autonomy signified "a more responsive and accountable local
government structure instituted through a system of decentralization."The grant of autonomy is intended to "break up
the monopoly of the national government over the affairs of local governments, x x x not x x x to end the relation of
partnership and interdependence between the central administration and local government units x x x." Paradoxically,
local governments are still subject to regulation, however limited, for the purpose of enhancing self-government.[14]

Decentralization simply means the devolution of national administration, not power, to local governments. Local officials
remain accountable to the central government as the law may provide. [15] The difference between decentralization of
administration and that of power was explained in detail in Limbona v. Mangelin[16] as follows:

"Now, autonomy is either decentralization of administration or decentralization of power. There is decentralization of

administration when the central government delegates administrative powers to political subdivisions in order to broaden
the base of government power and in the process to make local governments 'more responsive and accountable,'[17] and
'ensure their fullest development as self-reliant communities and make them more effective partners in the pursuit of
national development and social progress.'[18] At the same time, it relieves the central government of the burden of
managing local affairs and enables it to concentrate on national concerns. The President exercises 'general
supervision'[19] over them, but only to 'ensure that local affairs are administered according to law.' [20] He has no control
over their acts in the sense that he can substitute their judgments with his own. [21]

Decentralization of power, on the other hand, involves an abdication of political power in the favor of local government
units declared to be autonomous. In that case, the autonomous government is free to chart its own destiny and shape its
future with minimum intervention from central authorities. According to a constitutional author, decentralization of
power amounts to 'self-immolation,' since in that event, the autonomous government becomes accountable not to the
central authorities but to its constituency."[22]

Under the Philippine concept of local autonomy, the national government has not completely relinquished all its powers
over local governments, including autonomous regions. Only administrative powers over local affairs are delegated to
political subdivisions. The purpose of the delegation is to make governance more directly responsive and effective at the
local levels. In turn, economic, political and social development at the smaller political units are expected to propel social
and economic growth and development. But to enable the country to develop as a whole, the programs and policies
effected locally must be integrated and coordinated towards a common national goal. Thus, policy-setting for the entire
country still lies in the President and Congress. As we stated in Magtajas v. Pryce Properties Corp., Inc., municipal
governments are still agents of the national government. [23]
The Nature of AO 372

Consistent with the foregoing jurisprudential precepts, let us now look into the nature of AO 372. As its preambular clauses
declare, the Order was a "cash management measure" adopted by the government "to match expenditures with available
resources," which were presumably depleted at the time due to "economic difficulties brought about by the peso
depreciation." Because of a looming financial crisis, the President deemed it necessary to "direct all government agencies,
state universities and colleges, government-owned and controlled corporations as well as local governments to reduce
their total expenditures by at least 25 percent along suggested areas mentioned in AO 372.

Under existing law, local government units, in addition to having administrative autonomy in the exercise of their functions,
enjoy fiscal autonomy as well. Fiscal autonomy means that local governments have the power to create their own sources
of revenue in addition to their equitable share in the national taxes released by the national government, as well as the
power to allocate their resources in accordance with their own priorities. It extends to the preparation of their budgets,
and local officials in turn have to work within the constraints thereof. They are not formulated at the national level and
imposed on local governments, whether they are relevant to local needs and resources or not. Hence, the necessity of a
balancing of viewpoints and the harmonization of proposals from both local and national officials, [24] who in any case are
partners in the attainment of national goals.

Local fiscal autonomy does not however rule out any manner of national government intervention by way of supervision,
in order to ensure that local programs, fiscal and otherwise, are consistent with national goals. Significantly, the President,
by constitutional fiat, is the head of the economic and planning agency of the government, [25] primarily responsible for
formulating and implementing continuing, coordinated and integrated social and economic policies, plans and
programs[26] for the entire country. However, under the Constitution, the formulation and the implementation of such
policies and programs are subject to "consultations with the appropriate public agencies, various private sectors, and local
government units." The President cannot do so unilaterally.

Consequently, the Local Government Code provides:[27]

"x x x [I]n the event the national government incurs an unmanaged public sector deficit, the President of the Philippines
is hereby authorized, upon the recommendation of [the] Secretary of Finance, Secretary of the Interior and Local
Government and Secretary of Budget and Management, and subject to consultation with the presiding officers of both
Houses of Congress and the presidents of the liga, to make the necessary adjustments in the internal revenue allotment
of local government units but in no case shall the allotment be less than thirty percent (30%) of the collection of national
internal revenue taxes of the third fiscal year preceding the current fiscal year x x x."

There are therefore several requisites before the President may interfere in local fiscal matters: (1) an unmanaged public
sector deficit of the national government; (2) consultations with the presiding officers of the Senate and the House of
Representatives and the presidents of the various local leagues; and (3) the corresponding recommendation of the
secretaries of the Department of Finance, Interior and Local Government, and Budget and Management. Furthermore,
any adjustment in the allotment shall in no case be less than thirty percent (30%) of the collection of national internal
revenue taxes of the third fiscal year preceding the current one.

Petitioner points out that respondents failed to comply with these requisites before the issuance and the implementation
of AO 372. At the very least, they did not even try to show that the national government was suffering from an
unmanageable public sector deficit. Neither did they claim having conducted consultations with the different leagues of
local governments.Without these requisites, the President has no authority to adjust, much less to reduce, unilaterally the
LGU's internal revenue allotment.

The solicitor general insists, however, that AO 372 is merely directory and has been issued by the President consistent
with his power of supervision over local governments. It is intended only to advise all government agencies and
instrumentalities to undertake cost-reduction measures that will help maintain economic stability in the country, which is
facing economic difficulties. Besides, it does not contain any sanction in case of noncompliance. Being merely an advisory,
therefore, Section 1 of AO 372 is well within the powers of the President. Since it is not a mandatory imposition, the
directive cannot be characterized as an exercise of the power of control.

While the wordings of Section 1 of AO 372 have a rather commanding tone, and while we agree with petitioner that the
requirements of Section 284 of the Local Government Code have not been satisfied, we are prepared to accept the solicitor
general's assurance that the directive to "identify and implement measures x x x that will reduce total expenditures x x
x by at least 25% of authorized regular appropriation" is merely advisory in character, and does not constitute a mandatory
or binding order that interferes with local autonomy. The language used, while authoritative, does not amount to a
command that emanates from a boss to a subaltern.

Rather, the provision is merely an advisory to prevail upon local executives to recognize the need for fiscal restraint in a
period of economic difficulty. Indeed, all concerned would do well to heed the President's call to unity, solidarity and
teamwork to help alleviate the crisis. It is understood, however, that no legal sanction may be imposed upon LGUs and
their officials who do not follow such advice. It is in this light that we sustain the solicitor general's contention in regard
to Section 1.
Withholding a Part of LGUs' IRA

Section 4 of AO 372 cannot, however, be upheld. A basic feature of local fiscal autonomy is the automatic release of the
shares of LGUs in the national internal revenue. This is mandated by no less than the Constitution. [28] The Local
Government Code[29] specifies further that the release shall be made directly to the LGU concerned within five (5) days
after every quarter of the year and "shall not be subject to any lien or holdback that may be imposed by the national
government for whatever purpose."[30] As a rule, the term "shall" is a word of command that must be given a compulsory
meaning.[31] The provision is, therefore, imperative.

Section 4 of AO 372, however, orders the withholding, effective January 1, 1998, of 10 percent of the LGUs' IRA "pending
the assessment and evaluation by the Development Budget Coordinating Committee of the emerging fiscal situation" in
the country. Such withholding clearly contravenes the Constitution and the law. Although temporary, it is equivalent to a
holdback, which means "something held back or withheld, often temporarily." [32] Hence, the "temporary" nature of the
retention by the national government does not matter. Any retention is prohibited.

In sum, while Section 1 of AO 372 may be upheld as an advisory effected in times of national crisis, Section 4 thereof has
no color of validity at all. The latter provision effectively encroaches on the fiscal autonomy of local
governments. Concededly, the President was well-intentioned in issuing his Order to withhold the LGUs IRA, but the rule
of law requires that even the best intentions must be carried out within the parameters of the Constitution and the
law. Verily, laudable purposes must be carried out by legal methods.
Refutation of Justice Kapunan's Dissent

Mr. Justice Santiago M. Kapunan dissents from our Decision on the grounds that, allegedly, (1) the Petition is premature;
(2) AO 372 falls within the powers of the President as chief fiscal officer; and (3) the withholding of the LGUs IRA is implied
in the President's authority to adjust it in case of an unmanageable public sector deficit.

First, on prematurity. According to the Dissent, when "the conduct has not yet occurred and the challenged construction
has not yet been adopted by the agency charged with administering the administrative order, the determination of the
scope and constitutionality of the executive action in advance of its immediate adverse effect involves too remote and
abstract an inquiry for the proper exercise of judicial function."

This is a rather novel theory -- that people should await the implementing evil to befall on them before they can question
acts that are illegal or unconstitutional. Be it remembered that the real issue here is whether the Constitution and the law
are contravened by Section 4 of AO 372, not whether they are violated by the acts implementing it. In the unanimous en
banc case Taada v. Angara,[33] this Court held that when an act of the legislative department is seriously alleged to have
infringed the Constitution, settling the controversy becomes the duty of this Court. By the mere enactment of the
questioned law or the approval of the challenged action, the dispute is said to have ripened into a judicial controversy
even without any other overt act. Indeed, even a singular violation of the Constitution and/or the law is enough to awaken
judicial duty. Said the Court:

"In seeking to nullify an act of the Philippine Senate on the ground that it contravenes the Constitution, the petition no
doubt raises a justiciable controversy. Where an action of the legislative branch is seriously alleged to have infringed the
Constitution, it becomes not only the right but in fact the duty of the judiciary to settle the dispute. 'The question thus
posed is judicial rather than political. The duty (to adjudicate) remains to assure that the supremacy of the Constitution is
upheld.'[34] Once a 'controversy as to the application or interpretation of a constitutional provision is raised before this
Court x x x , it becomes a legal issue which the Court is bound by constitutional mandate to decide.' [35]

xxxxxxxxx
"As this Court has repeatedly and firmly emphasized in many cases,[36] it will not shirk, digress from or abandon its sacred
duty and authority to uphold the Constitution in matters that involve grave abuse of discretion brought before it in
appropriate cases, committed by any officer, agency, instrumentality or department of the government."

In the same vein, the Court also held in Tatad v. Secretary of the Department of Energy:[37]

"x x x Judicial power includes not only the duty of the courts to settle actual controversies involving rights which are legally
demandable and enforceable, but also the duty to determine whether or not there has been grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of government. The courts, as
guardians of the Constitution, have the inherent authority to determine whether a statute enacted by the legislature
transcends the limit imposed by the fundamental law. Where the statute violates the Constitution, it is not only the right
but the duty of the judiciary to declare such act unconstitutional and void."

By the same token, when an act of the President, who in our constitutional scheme is a coequal of Congress, is seriously
alleged to have infringed the Constitution and the laws, as in the present case, settling the dispute becomes the duty and
the responsibility of the courts.

Besides, the issue that the Petition is premature has not been raised by the parties; hence it is deemed
waived. Considerations of due process really prevents its use against a party that has not been given sufficient notice of
its presentation, and thus has not been given the opportunity to refute it. [38]

Second, on the President's power as chief fiscal officer of the country. Justice Kapunan posits that Section 4 of AO 372
conforms with the President's role as chief fiscal officer, who allegedly "is clothed by law with certain powers to ensure
the observance of safeguards and auditing requirements, as well as the legal prerequisites in the release and use of IRAs,
taking into account the constitutional and statutory mandates." [39] He cites instances when the President may lawfully
intervene in the fiscal affairs of LGUs.

Precisely, such powers referred to in the Dissent have specifically been authorized by law and have not been challenged
as violative of the Constitution. On the other hand, Section 4 of AO 372, as explained earlier, contravenes explicit provisions
of the Local Government Code (LGC) and the Constitution. In other words, the acts alluded to in the Dissent are indeed
authorized by law; but, quite the opposite, Section 4 of AO 372 is bereft of any legal or constitutional basis.

Third, on the President's authority to adjust the IRA of LGUs in case of an unmanageable public sector deficit. It must be
emphasized that in striking down Section 4 of AO 372, this Court is not ruling out any form of reduction in the IRAs of
LGUs. Indeed, as the President may make necessary adjustments in case of an unmanageable public sector deficit, as
stated in the main part of this Decision, and in line with Section 284 of the LGC, which Justice Kapunan cites. He, however,
merely glances over a specific requirement in the same provision -- that such reduction is subject to consultation with the
presiding officers of both Houses of Congress and, more importantly, with the presidents of the leagues of local
governments.

Notably, Justice Kapunan recognizes the need for "interaction between the national government and the LGUs at the
planning level," in order to ensure that "local development plans x x x hew to national policies and standards." The
problem is that no such interaction or consultation was ever held prior to the issuance of AO 372. This is why the petitioner
and the intervenor (who was a provincial governor and at the same time president of the League of Provinces of the
Philippines and chairman of the League of Leagues of Local Governments) have protested and instituted this
action. Significantly, respondents do not deny the lack of consultation.

In addition, Justice Kapunan cites Section 287 [40] of the LGC as impliedly authorizing the President to withhold the IRA of
an LGU, pending its compliance with certain requirements.Even a cursory reading of the provision reveals that it is totally
inapplicable to the issue at bar. It directs LGUs to appropriate in their annual budgets 20 percent of their respective IRAs
for development projects. It speaks of no positive power granted the President to priorly withhold any amount. Not at all.
WHEREFORE, the Petition is GRANTED. Respondents and their successors are hereby permanently PROHIBITED from
implementing Administrative Order Nos. 372 and 43, respectively dated December 27, 1997 and December 10, 1998,
insofar as local government units are concerned.

SO ORDERED.

EN BANC

G.R. No. 80391 February 28, 1989

SULTAN ALIMBUSAR P. LIMBONA, petitioner,

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

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

Makabangkit B. Lanto for respondents.

SARMIENTO, J.:

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

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

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

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

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

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

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

You are requested to invite some members of the Pampook Assembly of your respective assembly on November 1 to 15,
1987, with venue at the Congress of the Philippines. Your presence, unstinted support and cooperation is (sic)
indispensable.
5. Consistent with the said invitation, petitioner sent a telegram to Acting Secretary Johnny Alimbuyao of the Assembly to
wire all Assemblymen that there shall be no session in November as "our presence in the house committee hearing of
Congress take (sic) precedence over any pending business in batasang pampook ... ."

6. In compliance with the aforesaid instruction of the petitioner, Acting Secretary Alimbuyao sent to the members of the
Assembly the following telegram:

TRANSMITTING FOR YOUR INFORMATION AND GUIDANCE TELEGRAM RECEIVED FROM SPEAKER LIMBONA QUOTE
CONGRESSMAN JIMMY MATALAM CHAIRMAN OF THE HOUSE COMMITTEE ON MUSLIM AFFAIRS REQUESTED ME TO
ASSIST SAID COMMITTEE IN THE DISCUSSION OF THE PROPOSED AUTONOMY ORGANIC NOV. 1ST TO 15. HENCE WERE
ALL ASSEMBLYMEN THAT THERE SHALL BE NO SESSION IN NOVEMBER AS OUR PRESENCE IN THE HOUSE COMMITTEE
HEARING OF CONGRESS TAKE PRECEDENCE OVER ANY PENDING BUSINESS IN BATASANG PAMPOOK OF MATALAM
FOLLOWS UNQUOTE REGARDS.

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

1. Sali, Salic

2. Conding, Pilipinas (sic)

3. Dagalangit, Rakil

4. Dela Fuente, Antonio

5. Mangelen, Conte

6. Ortiz, Jesus

7. Palomares, Diego

8. Sinsuat, Bimbo

9. Tomawis, Acmad

10. Tomawis, Jerry

After declaring the presence of a quorum, the Speaker Pro-Tempore was authorized to preside in the session. On Motion
to declare the seat of the Speaker vacant, all Assemblymen in attendance voted in the affirmative, hence, the chair
declared said seat of the Speaker vacant. 8. On November 5, 1987, the session of the Assembly resumed with the following
Assemblymen present:

1. Mangelen Conte-Presiding Officer

2. Ali Salic

3. Ali Salindatu

4. Aratuc, Malik

5. Cajelo, Rene

6. Conding, Pilipinas (sic)

7. Dagalangit, Rakil

8. Dela Fuente, Antonio

9. Ortiz, Jesus
10 Palomares, Diego

11. Quijano, Jesus

12. Sinsuat, Bimbo

13. Tomawis, Acmad

14. Tomawis, Jerry

An excerpt from the debates and proceeding of said session reads:

HON. DAGALANGIT: Mr. Speaker, Honorable Members of the House, with the presence of our colleagues who have come
to attend the session today, I move to call the names of the new comers in order for them to cast their votes on the
previous motion to declare the position of the Speaker vacant. But before doing so, I move also that the designation of
the Speaker Pro Tempore as the Presiding Officer and Mr. Johnny Evangelists as Acting Secretary in the session last
November 2, 1987 be reconfirmed in today's session.

HON. SALIC ALI: I second the motions.

PRESIDING OFFICER: Any comment or objections on the two motions presented? Me chair hears none and the said
motions are approved. ...

Twelve (12) members voted in favor of the motion to declare the seat of the Speaker vacant; one abstained and none
voted against. 1

Accordingly, the petitioner prays for judgment as follows:

WHEREFORE, petitioner respectfully prays that-

(a) This Petition be given due course;

(b) Pending hearing, a restraining order or writ of preliminary injunction be issued enjoining respondents from proceeding
with their session to be held on November 5, 1987, and on any day thereafter;

(c) After hearing, judgment be rendered declaring the proceedings held by respondents of their session on November 2,
1987 as null and void;

(d) Holding the election of petitioner as Speaker of said Legislative Assembly or Batasan Pampook, Region XII held on
March 12, 1987 valid and subsisting, and

(e) Making the injunction permanent.

Petitioner likewise prays for such other relief as may be just and equitable. 2

Pending further proceedings, this Court, on January 19, 1988, received a resolution filed by the Sangguniang Pampook,
"EXPECTING ALIMBUSAR P. LIMBONA FROM MEMBERSHIP OF THE SANGGUNIANG PAMPOOK AUTONOMOUS REGION
XII," 3 on the grounds, among other things, that the petitioner "had caused to be prepared and signed by him paying [sic]
the salaries and emoluments of Odin Abdula, who was considered resigned after filing his Certificate of Candidacy for
Congressmen for the First District of Maguindanao in the last May 11, elections. . . and nothing in the record of the
Assembly will show that any request for reinstatement by Abdula was ever made . . ." 4 and that "such action of Mr. Lim
bona in paying Abdula his salaries and emoluments without authority from the Assembly . . . constituted a usurpation of
the power of the Assembly," 5 that the petitioner "had recently caused withdrawal of so much amount of cash from the
Assembly resulting to the non-payment of the salaries and emoluments of some Assembly [sic]," 6 and that he had "filed
a case before the Supreme Court against some members of the Assembly on question which should have been resolved
within the confines of the Assembly," 7 for which the respondents now submit that the petition had become "moot and
academic". 8
The first question, evidently, is whether or not the expulsion of the petitioner (pending litigation) has made the case moot
and academic.

We do not agree that the case has been rendered moot and academic by reason simply of the expulsion resolution so
issued. For, if the petitioner's expulsion was done purposely to make this petition moot and academic, and to preempt
the Court, it will not make it academic.

On the ground of the immutable principle of due process alone, we hold that the expulsion in question is of no force and
effect. In the first place, there is no showing that the Sanggunian had conducted an investigation, and whether or not the
petitioner had been heard in his defense, assuming that there was an investigation, or otherwise given the opportunity to
do so. On the other hand, what appears in the records is an admission by the Assembly (at least, the respondents) that
"since November, 1987 up to this writing, the petitioner has not set foot at the Sangguniang Pampook." 9 "To be sure, the
private respondents aver that "[t]he Assemblymen, in a conciliatory gesture, wanted him to come to Cotabato City," 10 but
that was "so that their differences could be threshed out and settled." 11 Certainly, that avowed wanting or desire to thresh
out and settle, no matter how conciliatory it may be cannot be a substitute for the notice and hearing contemplated by
law.

While we have held that due process, as the term is known in administrative law, does not absolutely require notice and
that a party need only be given the opportunity to be heard, 12 it does not appear herein that the petitioner had, to begin
with, been made aware that he had in fact stood charged of graft and corruption before his collegues. It cannot be said
therefore that he was accorded any opportunity to rebut their accusations. As it stands, then, the charges now levelled
amount to mere accusations that cannot warrant expulsion.

In the second place, (the resolution) appears strongly to be a bare act of vendetta by the other Assemblymen against the
petitioner arising from what the former perceive to be abduracy on the part of the latter. Indeed, it (the resolution) speaks
of "a case [having been filed] [by the petitioner] before the Supreme Court . . . on question which should have been
resolved within the confines of the Assemblyman act which some members claimed unnecessarily and unduly assails their
integrity and character as representative of the people" 13 an act that cannot possibly justify expulsion. Access to judicial
remedies is guaranteed by the Constitution, 14 and, unless the recourse amounts to malicious prosecution, no one may be
punished for seeking redress in the courts.

We therefore order reinstatement, with the caution that should the past acts of the petitioner indeed warrant his removal,
the Assembly is enjoined, should it still be so minded, to commence proper proceedings therefor in line with the most
elementary requirements of due process. And while it is within the discretion of the members of the Sanggunian to punish
their erring colleagues, their acts are nonetheless subject to the moderating band of this Court in the event that such
discretion is exercised with grave abuse.

It is, to be sure, said that precisely because the Sangguniang Pampook(s) are "autonomous," the courts may not rightfully
intervene in their affairs, much less strike down their acts. We come, therefore, to the second issue: Are the so-called
autonomous governments of Mindanao, as they are now constituted, subject to the jurisdiction of the national courts? In
other words, what is the extent of self-government given to the two autonomous governments of Region IX and XII?

The autonomous governments of Mindanao were organized in Regions IX and XII by Presidential Decree No.
1618 15 promulgated on July 25, 1979. Among other things, the Decree established "internal autonomy" 16 in the two
regions "[w]ithin the framework of the national sovereignty and territorial integrity of the Republic of the Philippines and
its Constitution," 17 with legislative and executive machinery to exercise the powers and responsibilities 18 specified
therein.

It requires the autonomous regional governments to "undertake all internal administrative matters for the respective
regions," 19 except to "act on matters which are within the jurisdiction and competence of the National
Government," 20 "which include, but are not limited to, the following:

(1) National defense and security;

(2) Foreign relations;

(3) Foreign trade;

(4) Currency, monetary affairs, foreign exchange, banking and quasi-banking, and external borrowing,

(5) Disposition, exploration, development, exploitation or utilization of all natural resources;

(6) Air and sea transport

(7) Postal matters and telecommunications;

(8) Customs and quarantine;

(9) Immigration and deportation;

(10) Citizenship and naturalization;

(11) National economic, social and educational planning; and

(12) General auditing. 21

In relation to the central government, it provides that "[t]he President shall have the power of general supervision and
control over the Autonomous Regions ..." 22

Now, autonomy is either decentralization of administration or decentralization of power. There is decentralization of

administration when the central government delegates administrative powers to political subdivisions in order to broaden
the base of government power and in the process to make local governments "more responsive and accountable," 23 "and
ensure their fullest development as self-reliant communities and make them more effective partners in the pursuit of
national development and social progress." 24 At the same time, it relieves the central government of the burden of
managing local affairs and enables it to concentrate on national concerns. The President exercises "general
supervision" 25 over them, but only to "ensure that local affairs are administered according to law." 26 He has no control
over their acts in the sense that he can substitute their judgments with his own. 27

Decentralization of power, on the other hand, involves an abdication of political power in the favor of local governments
units declare to be autonomous . In that case, the autonomous government is free to chart its own destiny and shape its
future with minimum intervention from central authorities. According to a constitutional author, decentralization of
power amounts to "self-immolation," since in that event, the autonomous government becomes accountable not to the
central authorities but to its constituency. 28

But the question of whether or not the grant of autonomy Muslim Mindanao under the 1987 Constitution involves, truly,
an effort to decentralize power rather than mere administration is a question foreign to this petition, since what is involved
herein is a local government unit constituted prior to the ratification of the present Constitution. Hence, the Court will not
resolve that controversy now, in this case, since no controversy in fact exists. We will resolve it at the proper time and in
the proper case.

Under the 1987 Constitution, local government units enjoy autonomy in these two senses, thus:

Section 1. The territorial and political subdivisions of the Republic of the Philippines are the provinces, cities, municipalities,
and barangays. Here shall be autonomous regions in Muslim Mindanao ,and the Cordilleras as hereinafter provided. 29

Sec. 2. The territorial and political subdivisions shall enjoy local autonomy. 30

xxx xxx xxx

See. 15. Mere shall be created autonomous regions in Muslim Mindanao and in the Cordilleras consisting of provinces,
cities, municipalities, and geographical areas sharing common and distinctive historical and cultural heritage, economic
and social structures, and other relevant characteristics within the framework of this Constitution and the national
sovereignty as well as territorial integrity of the Republic of the Philippines. 31

An autonomous government that enjoys autonomy of the latter category [CONST. (1987), art. X, sec. 15.] is subject alone
to the decree of the organic act creating it and accepted principles on the effects and limits of "autonomy." On the other
hand, an autonomous government of the former class is, as we noted, under the supervision of the national government
acting through the President (and the Department of Local Government). 32 If the Sangguniang Pampook (of Region XII),
then, is autonomous in the latter sense, its acts are, debatably beyond the domain of this Court in perhaps the same way
that the internal acts, say, of the Congress of the Philippines are beyond our jurisdiction. But if it is autonomous in the
former category only, it comes unarguably under our jurisdiction. An examination of the very Presidential Decree creating
the autonomous governments of Mindanao persuades us that they were never meant to exercise autonomy in the second
sense, that is, in which the central government commits an act of self-immolation. Presidential Decree No. 1618, in the
first place, mandates that "[t]he President shall have the power of general supervision and control over Autonomous
Regions." 33 In the second place, the Sangguniang Pampook, their legislative arm, is made to discharge chiefly
administrative services, thus:

SEC. 7. Powers of the Sangguniang Pampook. The Sangguniang Pampook shall exercise local legislative powers over
regional affairs within the framework of national development plans, policies and goals, in the following areas:

(1) Organization of regional administrative system;

(2) Economic, social and cultural development of the Autonomous Region;

(3) Agricultural, commercial and industrial programs for the Autonomous Region;

(4) Infrastructure development for the Autonomous Region;

(5) Urban and rural planning for the Autonomous Region;

(6) Taxation and other revenue-raising measures as provided for in this Decree;

(7) Maintenance, operation and administration of schools established by the Autonomous Region;

(8) Establishment, operation and maintenance of health, welfare and other social services, programs and facilities;

(9) Preservation and development of customs, traditions, languages and culture indigenous to the Autonomous Region;
and

(10) Such other matters as may be authorized by law,including the enactment of such measures as may be necessary for
the promotion of the general welfare of the people in the Autonomous Region.

The President shall exercise such powers as may be necessary to assure that enactment and acts of the Sangguniang
Pampook and the Lupong Tagapagpaganap ng Pook are in compliance with this Decree, national legislation, policies, plans
and programs.

The Sangguniang Pampook shall maintain liaison with the Batasang Pambansa. 34

Hence, we assume jurisdiction. And if we can make an inquiry in the validity of the expulsion in question, with more reason
can we review the petitioner's removal as Speaker.

Briefly, the petitioner assails the legality of his ouster as Speaker on the grounds that: (1) the Sanggunian, in convening on
November 2 and 5, 1987 (for the sole purpose of declaring the office of the Speaker vacant), did so in violation of the Rules
of the Sangguniang Pampook since the Assembly was then on recess; and (2) assuming that it was valid, his ouster was
ineffective nevertheless for lack of quorum.

Upon the facts presented, we hold that the November 2 and 5, 1987 sessions were invalid. It is true that under Section 31
of the Region XII Sanggunian Rules, "[s]essions shall not be suspended or adjourned except by direction of the Sangguniang
Pampook," 35 but it provides likewise that "the Speaker may, on [sic] his discretion, declare a recess of "short
intervals." 36 Of course, there is disagreement between the protagonists as to whether or not the recess called by the
petitioner effective November 1 through 15, 1987 is the "recess of short intervals" referred to; the petitioner says that it
is while the respondents insist that, to all intents and purposes, it was an adjournment and that "recess" as used by their
Rules only refers to "a recess when arguments get heated up so that protagonists in a debate can talk things out informally
and obviate dissenssion [sic] and disunity. 37 The Court agrees with the respondents on this regard, since clearly, the Rules
speak of "short intervals." Secondly, the Court likewise agrees that the Speaker could not have validly called a recess since
the Assembly had yet to convene on November 1, the date session opens under the same Rules. 38 Hence, there can be
no recess to speak of that could possibly interrupt any session. But while this opinion is in accord with the respondents'
own, we still invalidate the twin sessions in question, since at the time the petitioner called the "recess," it was not a
settled matter whether or not he could. do so. In the second place, the invitation tendered by the Committee on Muslim
Affairs of the House of Representatives provided a plausible reason for the intermission sought. Thirdly, assuming that a
valid recess could not be called, it does not appear that the respondents called his attention to this mistake. What appears
is that instead, they opened the sessions themselves behind his back in an apparent act of mutiny. Under the
circumstances, we find equity on his side. For this reason, we uphold the "recess" called on the ground of good faith.

It does not appear to us, moreover, that the petitioner had resorted to the aforesaid "recess" in order to forestall the
Assembly from bringing about his ouster. This is not apparent from the pleadings before us. We are convinced that the
invitation was what precipitated it.

In holding that the "recess" in question is valid, we are not to be taken as establishing a precedent, since, as we said, a
recess can not be validly declared without a session having been first opened. In upholding the petitioner herein, we are
not giving him a carte blanche to order recesses in the future in violation of the Rules, or otherwise to prevent the lawful
meetings thereof.

Neither are we, by this disposition, discouraging the Sanggunian from reorganizing itself pursuant to its lawful prerogatives.
Certainly, it can do so at the proper time. In the event that be petitioner should initiate obstructive moves, the Court is
certain that it is armed with enough coercive remedies to thwart them. 39

In view hereof, we find no need in dwelling on the issue of quorum.

WHEREFORE, premises considered, the petition is GRANTED. The Sangguniang Pampook, Region XII, is ENJOINED to (1)
REINSTATE the petitioner as Member, Sangguniang Pampook, Region XII; and (2) REINSTATE him as Speaker thereof. No
costs.

SO ORDERED.

EN BANC

G.R. No. 111097 July 20, 1994

MAYOR PABLO P. MAGTAJAS & THE CITY OF CAGAYAN DE ORO, petitioners,

vs.
PRYCE PROPERTIES CORPORATION, INC. & PHILIPPINE AMUSEMENT AND GAMING CORPORATION, respondents.

Aquilino G. Pimentel, Jr. and Associates for petitioners.

R.R. Torralba & Associates for private respondent.

CRUZ, J.:

There was instant opposition when PAGCOR announced the opening of a casino in Cagayan de Oro City. Civic organizations
angrily denounced the project. The religious elements echoed the objection and so did the women's groups and the youth.
Demonstrations were led by the mayor and the city legislators. The media trumpeted the protest, describing the casino
as an affront to the welfare of the city.

The trouble arose when in 1992, flush with its tremendous success in several cities, PAGCOR decided to expand its
operations to Cagayan de Oro City. To this end, it leased a portion of a building belonging to Pryce Properties Corporation,
Inc., one of the herein private respondents, renovated and equipped the same, and prepared to inaugurate its casino
there during the Christmas season.

The reaction of the Sangguniang Panlungsod of Cagayan de Oro City was swift and hostile. On December 7, 1992, it enacted
Ordinance No. 3353 reading as follows:

ORDINANCE NO. 3353

AN ORDINANCE PROHIBITING THE ISSUANCE OF BUSINESS PERMIT AND CANCELLING EXISTING BUSINESS PERMIT TO ANY
ESTABLISHMENT FOR THE USING AND ALLOWING TO BE USED ITS PREMISES OR PORTION THEREOF FOR THE OPERATION
OF CASINO.

BE IT ORDAINED by the Sangguniang Panlungsod of the City of Cagayan de Oro, in session assembled that:

Sec. 1. That pursuant to the policy of the city banning the operation of casino within its territorial jurisdiction, no
business permit shall be issued to any person, partnership or corporation for the operation of casino within the city limits.

Sec. 2. That it shall be a violation of existing business permit by any persons, partnership or corporation to use its
business establishment or portion thereof, or allow the use thereof by others for casino operation and other gambling
activities.

Sec. 3. PENALTIES. Any violation of such existing business permit as defined in the preceding section shall suffer the
following penalties, to wit:

a) Suspension of the business permit for sixty (60) days for the first offense and a fine of P1,000.00/day

b) Suspension of the business permit for Six (6) months for the second offense, and a fine of P3,000.00/day

c) Permanent revocation of the business permit and imprisonment of One (1) year, for the third and subsequent offenses.

Sec. 4. This Ordinance shall take effect ten (10) days from publication thereof.

Nor was this all. On January 4, 1993, it adopted a sterner Ordinance No. 3375-93 reading as follows:

ORDINANCE NO. 3375-93

AN ORDINANCE PROHIBITING THE OPERATION OF CASINO AND PROVIDING PENALTY FOR VIOLATION THEREFOR.

WHEREAS, the City Council established a policy as early as 1990 against CASINO under its Resolution No. 2295;

WHEREAS, on October 14, 1992, the City Council passed another Resolution No. 2673, reiterating its policy against the
establishment of CASINO;

WHEREAS, subsequently, thereafter, it likewise passed Ordinance No. 3353, prohibiting the issuance of Business Permit
and to cancel existing Business Permit to any establishment for the using and allowing to be used its premises or portion
thereof for the operation of CASINO;
WHEREAS, under Art. 3, section 458, No. (4), sub paragraph VI of the Local Government Code of 1991 (Rep. Act 7160) and
under Art. 99, No. (4), Paragraph VI of the implementing rules of the Local Government Code, the City Council as the
Legislative Body shall enact measure to suppress any activity inimical to public morals and general welfare of the people
and/or regulate or prohibit such activity pertaining to amusement or entertainment in order to protect social and moral
welfare of the community;

NOW THEREFORE,

BE IT ORDAINED by the City Council in session duly assembled that:

Sec. 1. The operation of gambling CASINO in the City of Cagayan de Oro is hereby prohibited.

Sec. 2. Any violation of this Ordinance shall be subject to the following penalties:

a) Administrative fine of P5,000.00 shall be imposed against the proprietor, partnership or corporation undertaking the
operation, conduct, maintenance of gambling CASINO in the City and closure thereof;

b) Imprisonment of not less than six (6) months nor more than one (1) year or a fine in the amount of P5,000.00 or both
at the discretion of the court against the manager, supervisor, and/or any person responsible in the establishment,
conduct and maintenance of gambling CASINO.

Sec. 3. This Ordinance shall take effect ten (10) days after its publication in a local newspaper of general circulation.

Pryce assailed the ordinances before the Court of Appeals, where it was joined by PAGCOR as intervenor and supplemental
petitioner. Their challenge succeeded. On March 31, 1993, the Court of Appeals declared the ordinances invalid and issued
the writ prayed for to prohibit their enforcement. 1 Reconsideration of this decision was denied on July 13, 1993. 2

Cagayan de Oro City and its mayor are now before us in this petition for review under Rule 45 of the Rules of Court. 3 They
aver that the respondent Court of Appeals erred in holding that:

1. Under existing laws, the Sangguniang Panlungsod of the City of Cagayan de Oro does not have the power and authority
to prohibit the establishment and operation of a PAGCOR gambling casino within the City's territorial limits.

2. The phrase "gambling and other prohibited games of chance" found in Sec. 458, par. (a), sub-par. (1) (v) of R.A. 7160
could only mean "illegal gambling."

3. The questioned Ordinances in effect annul P.D. 1869 and are therefore invalid on that point.

4. The questioned Ordinances are discriminatory to casino and partial to cockfighting and are therefore invalid on that
point.

5. The questioned Ordinances are not reasonable, not consonant with the general powers and purposes of the
instrumentality concerned and inconsistent with the laws or policy of the State.

6. It had no option but to follow the ruling in the case of Basco, et al. v. PAGCOR, G.R. No. 91649, May 14, 1991, 197 SCRA
53 in disposing of the issues presented in this present case.

PAGCOR is a corporation created directly by P.D. 1869 to help centralize and regulate all games of chance, including casinos
on land and sea within the territorial jurisdiction of the Philippines. In Basco v. Philippine Amusements and Gaming
Corporation, 4 this Court sustained the constitutionality of the decree and even cited the benefits of the entity to the
national economy as the third highest revenue-earner in the government, next only to the BIR and the Bureau of Customs.

Cagayan de Oro City, like other local political subdivisions, is empowered to enact ordinances for the purposes indicated
in the Local Government Code. It is expressly vested with the police power under what is known as the General Welfare
Clause now embodied in Section 16 as follows:
Sec. 16. General Welfare. Every local government unit shall exercise the powers expressly granted, those necessarily
implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective governance, and
those which are essential to the promotion of the general welfare. Within their respective territorial jurisdictions, local
government units shall ensure and support, among other things, the preservation and enrichment of culture, promote
health and safety, enhance the right of the people to a balanced ecology, encourage and support the development of
appropriate and self-reliant scientific and technological capabilities, improve public morals, enhance economic prosperity
and social justice, promote full employment among their residents, maintain peace and order, and preserve the comfort
and convenience of their inhabitants.

In addition, Section 458 of the said Code specifically declares that:

Sec. 458. Powers, Duties, Functions and Compensation. (a) The Sangguniang Panlungsod, as the legislative body of
the city, shall enact ordinances, approve resolutions and appropriate funds for the general welfare of the city and its
inhabitants pursuant to Section 16 of this Code and in the proper exercise of the corporate powers of the city as provided
for under Section 22 of this Code, and shall:

(1) Approve ordinances and pass resolutions necessary for an efficient and effective city government, and in this
connection, shall:

xxx xxx xxx

(v) Enact ordinances intended to prevent, suppress and impose appropriate penalties for habitual drunkenness in public
places, vagrancy, mendicancy, prostitution, establishment and maintenance of houses of ill repute, gambling and other
prohibited games of chance, fraudulent devices and ways to obtain money or property, drug addiction, maintenance of
drug dens, drug pushing, juvenile delinquency, the printing, distribution or exhibition of obscene or pornographic
materials or publications, and such other activities inimical to the welfare and morals of the inhabitants of the city;

This section also authorizes the local government units to regulate properties and businesses within their territorial limits
in the interest of the general welfare. 5

The petitioners argue that by virtue of these provisions, the Sangguniang Panlungsod may prohibit the operation of casinos
because they involve games of chance, which are detrimental to the people. Gambling is not allowed by general law and
even by the Constitution itself. The legislative power conferred upon local government units may be exercised over all
kinds of gambling and not only over "illegal gambling" as the respondents erroneously argue. Even if the operation of
casinos may have been permitted under P.D. 1869, the government of Cagayan de Oro City has the authority to prohibit
them within its territory pursuant to the authority entrusted to it by the Local Government Code.

It is submitted that this interpretation is consonant with the policy of local autonomy as mandated in Article II, Section 25,
and Article X of the Constitution, as well as various other provisions therein seeking to strengthen the character of the
nation. In giving the local government units the power to prevent or suppress gambling and other social problems, the
Local Government Code has recognized the competence of such communities to determine and adopt the measures best
expected to promote the general welfare of their inhabitants in line with the policies of the State.

The petitioners also stress that when the Code expressly authorized the local government units to prevent and suppress
gambling and other prohibited games of chance, like craps, baccarat, blackjack and roulette, it meant all forms of gambling
without distinction. Ubi lex non distinguit, nec nos distinguere debemos. 6 Otherwise, it would have expressly excluded
from the scope of their power casinos and other forms of gambling authorized by special law, as it could have easily done.
The fact that it did not do so simply means that the local government units are permitted to prohibit all kinds of gambling
within their territories, including the operation of casinos.

The adoption of the Local Government Code, it is pointed out, had the effect of modifying the charter of the PAGCOR. The
Code is not only a later enactment than P.D. 1869 and so is deemed to prevail in case of inconsistencies between them.
More than this, the powers of the PAGCOR under the decree are expressly discontinued by the Code insofar as they do
not conform to its philosophy and provisions, pursuant to Par. (f) of its repealing clause reading as follows:
(f) All general and special laws, acts, city charters, decrees, executive orders, proclamations and administrative regulations,
or part or parts thereof which are inconsistent with any of the provisions of this Code are hereby repealed or modified
accordingly.

It is also maintained that assuming there is doubt regarding the effect of the Local Government Code on P.D. 1869, the
doubt must be resolved in favor of the petitioners, in accordance with the direction in the Code calling for its liberal
interpretation in favor of the local government units. Section 5 of the Code specifically provides:

Sec. 5. Rules of Interpretation. In the interpretation of the provisions of this Code, the following rules shall apply:

(a) Any provision on a power of a local government unit shall be liberally interpreted in its favor, and in case of doubt, any
question thereon shall be resolved in favor of devolution of powers and of the lower local government unit. Any fair and
reasonable doubt as to the existence of the power shall be interpreted in favor of the local government unit concerned;

xxx xxx xxx

(c) The general welfare provisions in this Code shall be liberally interpreted to give more powers to local government units in
accelerating economic development and upgrading the quality of life for the people in the community; . . . (Emphasis
supplied.)

Finally, the petitioners also attack gambling as intrinsically harmful and cite various provisions of the Constitution and
several decisions of this Court expressive of the general and official disapprobation of the vice. They invoke the State
policies on the family and the proper upbringing of the youth and, as might be expected, call attention to the old case
of U.S. v. Salaveria, 7 which sustained a municipal ordinance prohibiting the playing of panguingue. The petitioners decry
the immorality of gambling. They also impugn the wisdom of P.D. 1869 (which they describe as "a martial law instrument")
in creating PAGCOR and authorizing it to operate casinos "on land and sea within the territorial jurisdiction of the
Philippines."

This is the opportune time to stress an important point.

The morality of gambling is not a justiciable issue. Gambling is not illegal per se. While it is generally considered inimical
to the interests of the people, there is nothing in the Constitution categorically proscribing or penalizing gambling or, for
that matter, even mentioning it at all. It is left to Congress to deal with the activity as it sees fit. In the exercise of its own
discretion, the legislature may prohibit gambling altogether or allow it without limitation or it may prohibit some forms
of gambling and allow others for whatever reasons it may consider sufficient. Thus, it has
prohibited jueteng and monte but permits lotteries, cockfighting and horse-racing. In making such choices, Congress has
consulted its own wisdom, which this Court has no authority to review, much less reverse. Well has it been said that courts
do not sit to resolve the merits of conflicting theories. 8 That is the prerogative of the political departments. It is settled
that questions regarding the wisdom, morality, or practicibility of statutes are not addressed to the judiciary but may be
resolved only by the legislative and executive departments, to which the function belongs in our scheme of government.
That function is exclusive. Whichever way these branches decide, they are answerable only to their own conscience and
the constituents who will ultimately judge their acts, and not to the courts of justice.

The only question we can and shall resolve in this petition is the validity of Ordinance No. 3355 and Ordinance No. 3375-
93 as enacted by the Sangguniang Panlungsod of Cagayan de Oro City. And we shall do so only by the criteria laid down
by law and not by our own convictions on the propriety of gambling.

The tests of a valid ordinance are well established. A long line of decisions 9 has held that to be valid, an ordinance must
conform to the following substantive requirements:

1) It must not contravene the constitution or any statute.

2) It must not be unfair or oppressive.

3) It must not be partial or discriminatory.

4) It must not prohibit but may regulate trade.

5) It must be general and consistent with public policy.

6) It must not be unreasonable.

We begin by observing that under Sec. 458 of the Local Government Code, local government units are authorized to
prevent or suppress, among others, "gambling and other prohibited games of chance." Obviously, this provision excludes
games of chance which are not prohibited but are in fact permitted by law. The petitioners are less than accurate in
claiming that the Code could have excluded such games of chance but did not. In fact it does. The language of the section
is clear and unmistakable. Under the rule of noscitur a sociis, a word or phrase should be interpreted in relation to, or
given the same meaning of, words with which it is associated. Accordingly, we conclude that since the word "gambling" is
associated with "and other prohibited games of chance," the word should be read as referring to only illegal gambling
which, like the other prohibited games of chance, must be prevented or suppressed.

We could stop here as this interpretation should settle the problem quite conclusively. But we will not. The vigorous efforts
of the petitioners on behalf of the inhabitants of Cagayan de Oro City, and the earnestness of their advocacy, deserve
more than short shrift from this Court.

The apparent flaw in the ordinances in question is that they contravene P.D. 1869 and the public policy embodied therein
insofar as they prevent PAGCOR from exercising the power conferred on it to operate a casino in Cagayan de Oro City. The
petitioners have an ingenious answer to this misgiving. They deny that it is the ordinances that have changed P.D. 1869
for an ordinance admittedly cannot prevail against a statute. Their theory is that the change has been made by the Local
Government Code itself, which was also enacted by the national lawmaking authority. In their view, the decree has been,
not really repealed by the Code, but merely "modified pro tanto" in the sense that PAGCOR cannot now operate a casino
over the objection of the local government unit concerned. This modification of P.D. 1869 by the Local Government Code
is permissible because one law can change or repeal another law.

It seems to us that the petitioners are playing with words. While insisting that the decree has only been "modified pro
tanto," they are actually arguing that it is already dead, repealed and useless for all intents and purposes because the
Code has shorn PAGCOR of all power to centralize and regulate casinos. Strictly speaking, its operations may now be not
only prohibited by the local government unit; in fact, the prohibition is not only discretionary but mandated by Section
458 of the Code if the word "shall" as used therein is to be given its accepted meaning. Local government units have now
no choice but to prevent and suppress gambling, which in the petitioners' view includes both legal and illegal gambling.
Under this construction, PAGCOR will have no more games of chance to regulate or centralize as they must all be
prohibited by the local government units pursuant to the mandatory duty imposed upon them by the Code. In this
situation, PAGCOR cannot continue to exist except only as a toothless tiger or a white elephant and will no longer be able
to exercise its powers as a prime source of government revenue through the operation of casinos.

It is noteworthy that the petitioners have cited only Par. (f) of the repealing clause, conveniently discarding the rest of the
provision which painstakingly mentions the specific laws or the parts thereof which are repealed (or modified) by the Code.
Significantly, P.D. 1869 is not one of them. A reading of the entire repealing clause, which is reproduced below, will disclose
the omission:

Sec. 534. Repealing Clause. (a) Batas Pambansa Blg. 337, otherwise known as the "Local Government Code," Executive
Order No. 112 (1987), and Executive Order No. 319 (1988) are hereby repealed.

(b) Presidential Decree Nos. 684, 1191, 1508 and such other decrees, orders, instructions, memoranda and issuances
related to or concerning the barangay are hereby repealed.

(c) The provisions of Sections 2, 3, and 4 of Republic Act No. 1939 regarding hospital fund; Section 3, a (3) and b (2) of
Republic Act. No. 5447 regarding the Special Education Fund; Presidential Decree No. 144 as amended by Presidential
Decree Nos. 559 and 1741; Presidential Decree No. 231 as amended; Presidential Decree No. 436 as amended by
Presidential Decree No. 558; and Presidential Decree Nos. 381, 436, 464, 477, 526, 632, 752, and 1136 are hereby repealed
and rendered of no force and effect.

(d) Presidential Decree No. 1594 is hereby repealed insofar as it governs locally-funded projects.

(e) The following provisions are hereby repealed or amended insofar as they are inconsistent with the provisions of this
Code: Sections 2, 16, and 29 of Presidential Decree No. 704; Sections 12 of Presidential Decree No. 87, as amended;
Sections 52, 53, 66, 67, 68, 69, 70, 71, 72, 73, and 74 of Presidential Decree No. 463, as amended; and Section 16 of
Presidential Decree No. 972, as amended, and

(f) All general and special laws, acts, city charters, decrees, executive orders, proclamations and administrative regulations,
or part or parts thereof which are inconsistent with any of the provisions of this Code are hereby repealed or modified
accordingly.

Furthermore, it is a familiar rule that implied repeals are not lightly presumed in the absence of a clear and unmistakable
showing of such intention. In Lichauco & Co. v. Apostol, 10 this Court explained:

The cases relating to the subject of repeal by implication all proceed on the assumption that if the act of later date clearly
reveals an intention on the part of the lawmaking power to abrogate the prior law, this intention must be given effect;
but there must always be a sufficient revelation of this intention, and it has become an unbending rule of statutory
construction that the intention to repeal a former law will not be imputed to the Legislature when it appears that the two
statutes, or provisions, with reference to which the question arises bear to each other the relation of general to special.

There is no sufficient indication of an implied repeal of P.D. 1869. On the contrary, as the private respondent points out,
PAGCOR is mentioned as the source of funding in two later enactments of Congress, to wit, R.A. 7309, creating a Board of
Claims under the Department of Justice for the benefit of victims of unjust punishment or detention or of violent crimes,
and R.A. 7648, providing for measures for the solution of the power crisis. PAGCOR revenues are tapped by these two
statutes. This would show that the PAGCOR charter has not been repealed by the Local Government Code but has in fact
been improved as it were to make the entity more responsive to the fiscal problems of the government.

It is a canon of legal hermeneutics that instead of pitting one statute against another in an inevitably destructive
confrontation, courts must exert every effort to reconcile them, remembering that both laws deserve a becoming respect
as the handiwork of a coordinate branch of the government. On the assumption of a conflict between P.D. 1869 and the
Code, the proper action is not to uphold one and annul the other but to give effect to both by harmonizing them if possible.
This is possible in the case before us. The proper resolution of the problem at hand is to hold that under the Local
Government Code, local government units may (and indeed must) prevent and suppress all kinds of gambling within their
territories except only those allowed by statutes like P.D. 1869. The exception reserved in such laws must be read into the
Code, to make both the Code and such laws equally effective and mutually complementary.

This approach would also affirm that there are indeed two kinds of gambling, to wit, the illegal and those authorized by
law. Legalized gambling is not a modern concept; it is probably as old as illegal gambling, if not indeed more so. The
petitioners' suggestion that the Code authorizes them to prohibit all kinds of gambling would erase the distinction
between these two forms of gambling without a clear indication that this is the will of the legislature. Plausibly, following
this theory, the City of Manila could, by mere ordinance, prohibit the Philippine Charity Sweepstakes Office from
conducting a lottery as authorized by R.A. 1169 and B.P. 42 or stop the races at the San Lazaro Hippodrome as authorized
by R.A. 309 and R.A. 983.

In light of all the above considerations, we see no way of arriving at the conclusion urged on us by the petitioners that the
ordinances in question are valid. On the contrary, we find that the ordinances violate P.D. 1869, which has the character
and force of a statute, as well as the public policy expressed in the decree allowing the playing of certain games of chance
despite the prohibition of gambling in general.

The rationale of the requirement that the ordinances should not contravene a statute is obvious. Municipal governments
are only agents of the national government. Local councils exercise only delegated legislative powers conferred on them
by Congress as the national lawmaking body. The delegate cannot be superior to the principal or exercise powers higher
than those of the latter. It is a heresy to suggest that the local government units can undo the acts of Congress, from which
they have derived their power in the first place, and negate by mere ordinance the mandate of the statute.

Municipal corporations owe their origin to, and derive their powers and rights wholly from the legislature. It breathes into
them the breath of life, without which they cannot exist. As it creates, so it may destroy. As it may destroy, it may abridge
and control. Unless there is some constitutional limitation on the right, the legislature might, by a single act, and if we can
suppose it capable of so great a folly and so great a wrong, sweep from existence all of the municipal corporations in the
State, and the corporation could not prevent it. We know of no limitation on the right so far as to the corporation
themselves are concerned. They are, so to phrase it, the mere tenants at will of the legislature. 11

This basic relationship between the national legislature and the local government units has not been enfeebled by the
new provisions in the Constitution strengthening the policy of local autonomy. Without meaning to detract from that
policy, we here confirm that Congress retains control of the local government units although in significantly reduced
degree now than under our previous Constitutions. The power to create still includes the power to destroy. The power to
grant still includes the power to withhold or recall. True, there are certain notable innovations in the Constitution, like the
direct conferment on the local government units of the power to tax, 12which cannot now be withdrawn by mere statute.
By and large, however, the national legislature is still the principal of the local government units, which cannot defy its will
or modify or violate it.

The Court understands and admires the concern of the petitioners for the welfare of their constituents and their
apprehensions that the welfare of Cagayan de Oro City will be endangered by the opening of the casino. We share the
view that "the hope of large or easy gain, obtained without special effort, turns the head of the workman" 13 and that
"habitual gambling is a cause of laziness and ruin." 14 In People v. Gorostiza, 15 we declared: "The social scourge of gambling
must be stamped out. The laws against gambling must be enforced to the limit." George Washington called gambling "the
child of avarice, the brother of iniquity and the father of mischief." Nevertheless, we must recognize the power of the
legislature to decide, in its own wisdom, to legalize certain forms of gambling, as was done in P.D. 1869 and impliedly
affirmed in the Local Government Code. That decision can be revoked by this Court only if it contravenes the Constitution
as the touchstone of all official acts. We do not find such contravention here.

We hold that the power of PAGCOR to centralize and regulate all games of chance, including casinos on land and sea
within the territorial jurisdiction of the Philippines, remains unimpaired. P.D. 1869 has not been modified by the Local
Government Code, which empowers the local government units to prevent or suppress only those forms of gambling
prohibited by law.

Casino gambling is authorized by P.D. 1869. This decree has the status of a statute that cannot be amended or nullified by
a mere ordinance. Hence, it was not competent for the Sangguniang Panlungsod of Cagayan de Oro City to enact
Ordinance No. 3353 prohibiting the use of buildings for the operation of a casino and Ordinance No. 3375-93 prohibiting
the operation of casinos. For all their praiseworthy motives, these ordinances are contrary to P.D. 1869 and the public
policy announced therein and are therefore ultra vires and void.

WHEREFORE, the petition is DENIED and the challenged decision of the respondent Court of Appeals is AFFIRMED, with
costs against the petitioners. It is so ordered.

SECOND DIVISION

[G.R. No. 129093. August 30, 2001]

HON. JOSE D. LINA, JR., SANGGUNIANG PANLALAWIGAN OF LAGUNA, and HON. CALIXTO CATAQUIZ, petitioners, vs.
HON. FRANCISCO DIZON PAO and TONY CALVENTO, respondents.

DECISION

QUISUMBING, J.:

For our resolution is a petition for review on certiorari seeking the reversal of the decision[1] dated February 10, 1997 of
the Regional Trial Court of San Pedro, Laguna, Branch 93, enjoining petitioners from implementing or
enforcing Kapasiyahan Bilang 508, Taon 1995, of the Sangguniang Panlalawigan of Laguna and its subsequent
Order[2] dated April 21, 1997 denying petitioners motion for reconsideration.

On December 29, 1995, respondent Tony Calvento was appointed agent by the Philippine Charity Sweepstakes Office
(PCSO) to install Terminal OM 20 for the operation of lotto. He asked Mayor Calixto Cataquiz, Mayor of San Pedro, Laguna,
for a mayors permit to open the lotto outlet. This was denied by Mayor Cataquiz in a letter dated February 19, 1996. The
ground for said denial was an ordinance passed by the Sangguniang Panlalawigan of Laguna entitled Kapasiyahan Blg.
508, T. 1995 which was issued on September 18, 1995. The ordinance reads:

ISANG KAPASIYAHAN TINUTUTULAN ANG MGA ILLEGAL GAMBLING LALO NA ANG LOTTO SA LALAWIGAN NG LAGUNA

SAPAGKAT, ang sugal dito sa lalawigan ng Laguna ay talamak na;

SAPAGKAT, ang sugal ay nagdudulot ng masasamang impluwensiya lalot higit sa mga kabataan;

KUNG KAYAT DAHIL DITO, at sa mungkahi nina Kgg. Kgd. Juan M. Unico at Kgg. Kgd. Gat-Ala A. Alatiit, pinangalawahan
ni Kgg. Kgd. Meliton C. Larano at buong pagkakaisang sinangayunan ng lahat ng dumalo sa pulong;

IPINASIYA, na tutulan gaya ng dito ay mahigpit na TINUTUTULAN ang ano mang uri ng sugal dito sa lalawigan ng Laguna
lalot higit ang Lotto;

IPINASIYA PA RIN na hilingin tulad ng dito ay hinihiling sa Panlalawigang pinuno ng Philippine National Police (PNP) Col.
[illegible] na mahigpit na pag-ibayuhin ang pagsugpo sa lahat ng uri ng illegal na sugal sa buong lalawigan ng Laguna lalo
na ang Jueteng.[3]

As a result of this resolution of denial, respondent Calvento filed a complaint for declaratory relief with prayer for
preliminary injunction and temporary restraining order. In the said complaint, respondent Calvento asked the Regional
Trial Court of San Pedro Laguna, Branch 93, for the following reliefs: (1) a preliminary injunction or temporary restraining
order, ordering the defendants to refrain from implementing or enforcing Kapasiyahan Blg. 508, T. 1995; (2) an order
requiring Hon. Municipal Mayor Calixto R. Cataquiz to issue a business permit for the operation of a lotto outlet; and (3)
an order annulling or declaring as invalid Kapasiyahan Blg. 508, T. 1995.

On February 10, 1997, the respondent judge, Francisco Dizon Pao, promulgated his decision enjoining the petitioners from
implementing or enforcing resolution or Kapasiyahan Blg. 508, T. 1995. The dispositive portion of said decision reads:

WHEREFORE, premises considered, defendants, their agents and representatives are hereby enjoined from implementing
or enforcing resolution or kapasiyahan blg. 508, T. 1995 of the Sangguniang Panlalawigan ng Laguna prohibiting the
operation of the lotto in the province of Laguna.

SO ORDERED.[4]

Petitioners filed a motion for reconsideration which was subsequently denied in an Order dated April 21, 1997, which
reads:

Acting on the Motion for Reconsideration filed by defendants Jose D. Lina, Jr. and the Sangguniang Panlalawigan of Laguna,
thru counsel, with the opposition filed by plaintiffs counsel and the comment thereto filed by counsel for the defendants
which were duly noted, the Court hereby denies the motion for lack of merit.
SO ORDERED.[5]

On May 23, 1997, petitioners filed this petition alleging that the following errors were committed by the respondent trial
court:

THE TRIAL COURT ERRED IN ENJOINING THE PETITIONERS FROM IMPLEMENTING KAPASIYAHAN BLG. 508, T. 1995 OF THE
SANGGUNIANG PANLALAWIGAN OF LAGUNA PROHIBITING THE OPERATION OF THE LOTTO IN THE PROVINCE OF LAGUNA.

II

THE TRIAL COURT FAILED TO APPRECIATE THE ARGUMENT POSITED BY THE PETITIONERS THAT BEFORE ANY
GOVERNMENT PROJECT OR PROGRAM MAY BE IMPLEMENTED BY THE NATIONAL AGENCIES OR OFFICES, PRIOR
CONSULTATION AND APPROVAL BY THE LOCAL GOVERNMENT UNITS CONCERNED AND OTHER CONCERNED SECTORS IS
REQUIRED.

Petitioners contend that the assailed resolution is a valid policy declaration of the Provincial Government of Laguna of its
vehement objection to the operation of lotto and all forms of gambling. It is likewise a valid exercise of the provincial
governments police power under the General Welfare Clause of Republic Act 7160, otherwise known as the Local
Government Code of 1991.[6] They also maintain that respondents lotto operation is illegal because no prior consultations
and approval by the local government were sought before it was implemented contrary to the express provisions of
Sections 2 (c) and 27 of R.A. 7160.[7]

For his part, respondent Calvento argues that the questioned resolution is, in effect, a curtailment of the power of the
state since in this case the national legislature itself had already declared lotto as legal and permitted its operations around
the country.[8] As for the allegation that no prior consultations and approval were sought from the sangguniang
panlalawigan of Laguna, respondent Calvento contends this is not mandatory since such a requirement is merely stated
as a declaration of policy and not a self-executing provision of the Local Government Code of 1991. [9] He also states that
his operation of the lotto system is legal because of the authority given to him by the PCSO, which in turn had been granted
a franchise to operate the lotto by Congress.[10]

The Office of the Solicitor General (OSG), for the State, contends that the Provincial Government of Laguna has no power
to prohibit a form of gambling which has been authorized by the national government. [11] He argues that this is based on
the principle that ordinances should not contravene statutes as municipal governments are merely agents of the national
government. The local councils exercise only delegated legislative powers which have been conferred on them by
Congress. This being the case, these councils, as delegates, cannot be superior to the principal or exercise powers higher
than those of the latter. The OSG also adds that the question of whether gambling should be permitted is for Congress to
determine, taking into account national and local interests. Since Congress has allowed the PCSO to operate lotteries
which PCSO seeks to conduct in Laguna, pursuant to its legislative grant of authority, the provinces Sangguniang
Panlalawigan cannot nullify the exercise of said authority by preventing something already allowed by Congress.

The issues to be resolved now are the following: (1) whether Kapasiyahan Blg. 508, T. 1995 of the Sangguniang
Panlalawigan of Laguna and the denial of a mayors permit based thereon are valid; and (2) whether prior consultations
and approval by the concerned Sanggunian are needed before a lotto system can be operated in a given local government
unit.

The entire controversy stemmed from the refusal of Mayor Cataquiz to issue a mayors permit for the operation of a lotto
outlet in favor of private respondent. According to the mayor, he based his decision on an existing ordinance prohibiting
the operation of lotto in the province of Laguna. The ordinance, however, merely states the objection of the council to
the said game. It is but a mere policy statement on the part of the local council, which is not self-executing. Nor could it
serve as a valid ground to prohibit the operation of the lotto system in the province of Laguna. Even petitioners admit as
much when they stated in their petition that:
5.7. The terms of the Resolution and the validity thereof are express and clear. The Resolution is a policy declaration of
the Provincial Government of Laguna of its vehement opposition and/or objection to the operation of and/or all forms of
gambling including the Lotto operation in the Province of Laguna. [12]

As a policy statement expressing the local governments objection to the lotto, such resolution is valid. This is part of the
local governments autonomy to air its views which may be contrary to that of the national governments. However, this
freedom to exercise contrary views does not mean that local governments may actually enact ordinances that go against
laws duly enacted by Congress. Given this premise, the assailed resolution in this case could not and should not be
interpreted as a measure or ordinance prohibiting the operation of lotto.

The game of lotto is a game of chance duly authorized by the national government through an Act of Congress. Republic
Act 1169, as amended by Batas Pambansa Blg. 42, is the law which grants a franchise to the PCSO and allows it to operate
the lotteries. The pertinent provision reads:

Section 1. The Philippine Charity Sweepstakes Office.- The Philippine Charity Sweepstakes Office, hereinafter designated
the Office, shall be the principal government agency for raising and providing for funds for health programs, medical
assistance and services and charities of national character, and as such shall have the general powers conferred in section
thirteen of Act Numbered One thousand four hundred fifty-nine, as amended, and shall have the authority:

A. To hold and conduct charity sweepstakes races, lotteries, and other similar activities, in such frequency and manner, as
shall be determined, and subject to such rules and regulations as shall be promulgated by the Board of Directors.

This statute remains valid today. While lotto is clearly a game of chance, the national government deems it wise and
proper to permit it. Hence, the Sangguniang Panlalawigan of Laguna, a local government unit, cannot issue a resolution
or an ordinance that would seek to prohibit permits. Stated otherwise, what the national legislature expressly allows by
law, such as lotto, a provincial board may not disallow by ordinance or resolution.

In our system of government, the power of local government units to legislate and enact ordinances and resolutions is
merely a delegated power coming from Congress. As held in Tatel vs. Virac,[13]ordinances should not contravene an
existing statute enacted by Congress. The reasons for this is obvious, as elucidated in Magtajas v. Pryce Properties Corp.[14]

Municipal governments are only agents of the national government. Local councils exercise only delegated legislative
powers conferred upon them by Congress as the national lawmaking body. The delegate cannot be superior to the
principal or exercise powers higher than those of the latter. It is a heresy to suggest that the local government units can
undo the acts of Congress, from which they have derived their power in the first place, and negate by mere ordinance the
mandate of the statute.

Municipal corporations owe their origin to, and derive their powers and rights wholly from the legislature. It breathes into
them the breath of life, without which they cannot exist. As it creates, so it may destroy. As it may destroy, it may abridge
and control. Unless there is some constitutional limitation on the right, the legislature might, by a single act, and if we can
suppose it capable of so great a folly and so great a wrong, sweep from existence all of the municipal corporations in the
state, and the corporation could not prevent it. We know of no limitation on the right so far as the corporation themselves
are concerned. They are, so to phrase it, the mere tenants at will of the legislature (citing Clinton vs. Ceder Rapids, etc.
Railroad Co., 24 Iowa 455).

Nothing in the present constitutional provision enhancing local autonomy dictates a different conclusion.

The basic relationship between the national legislature and the local government units has not been enfeebled by the new
provisions in the Constitution strengthening the policy of local autonomy. Without meaning to detract from that policy,
we here confirm that Congress retains control of the local government units although in significantly reduced degree now
than under our previous Constitutions. The power to create still includes the power to destroy. The power to grant still
includes the power to withhold or recall. True, there are certain notable innovations in the Constitution, like the direct
conferment on the local government units of the power to tax (citing Art. X, Sec. 5, Constitution), which cannot now be
withdrawn by mere statute. By and large, however, the national legislature is still the principal of the local government
units, which cannot defy its will or modify or violate it. [15]

Ours is still a unitary form of government, not a federal state. Being so, any form of autonomy granted to local
governments will necessarily be limited and confined within the extent allowed by the central authority. Besides, the
principle of local autonomy under the 1987 Constitution simply means decentralization. It does not make local
governments sovereign within the state or an imperium in imperio.[16]

To conclude our resolution of the first issue, respondent mayor of San Pedro, cannot avail of Kapasiyahan Bilang 508,
Taon 1995, of the Provincial Board of Laguna as justification to prohibit lotto in his municipality. For said resolution is
nothing but an expression of the local legislative unit concerned. The Boards enactment, like spring water, could not rise
above its source of power, the national legislature.

As for the second issue, we hold that petitioners erred in declaring that Sections 2 (c) and 27 of Republic Act 7160,
otherwise known as the Local Government Code of 1991, apply mandatorily in the setting up of lotto outlets around the
country. These provisions state:

Section 2. Declaration of Policy. x x x

(c) It is likewise the policy of the State to require all national agencies and offices to conduct periodic consultations with
appropriate local government units, non-governmental and peoples organizations, and other concerned sectors of the
community before any project or program is implemented in their respective jurisdictions.

Section 27. Prior Consultations Required. No project or program shall be implemented by government authorities unless
the consultations mentioned in Section 2 (c) and 26 hereof are complied with, and prior approval of the sanggunian
concerned is obtained; Provided, that occupants in areas where such projects are to be implemented shall not be evicted
unless appropriate relocation sites have been provided, in accordance with the provisions of the Constitution.

From a careful reading of said provisions, we find that these apply only to national programs and/or projects which are to
be implemented in a particular local community. Lotto is neither a program nor a project of the national government, but
of a charitable institution, the PCSO. Though sanctioned by the national government, it is far fetched to say that lotto falls
within the contemplation of Sections 2 (c) and 27 of the Local Government Code.

Section 27 of the Code should be read in conjunction with Section 26 thereof.[17] Section 26 reads:

Section 26. Duty of National Government Agencies in the Maintenance of Ecological Balance. It shall be the duty of every
national agency or government-owned or controlled corporation authorizing or involved in the planning and
implementation of any project or program that may cause pollution, climatic change, depletion of non-renewable
resources, loss of crop land, range-land, or forest cover, and extinction of animal or plant species, to consult with the local
government units, nongovernmental organizations, and other sectors concerned and explain the goals and objectives of
the project or program, its impact upon the people and the community in terms of environmental or ecological balance,
and the measures that will be undertaken to prevent or minimize the adverse effects thereof.

Thus, the projects and programs mentioned in Section 27 should be interpreted to mean projects and programs whose
effects are among those enumerated in Section 26 and 27, to wit, those that: (1) may cause pollution; (2) may bring about
climatic change; (3) may cause the depletion of non-renewable resources; (4) may result in loss of crop land, range-land,
or forest cover; (5) may eradicate certain animal or plant species from the face of the planet; and (6) other projects or
programs that may call for the eviction of a particular group of people residing in the locality where these will be
implemented. Obviously, none of these effects will be produced by the introduction of lotto in the province of Laguna.

Moreover, the argument regarding lack of consultation raised by petitioners is clearly an afterthought on their part. There
is no indication in the letter of Mayor Cataquiz that this was one of the reasons for his refusal to issue a permit. That
refusal was predicated solely but erroneously on the provisions of Kapasiyahan Blg. 508, Taon 1995, of the Sangguniang
Panlalawigan of Laguna.
In sum, we find no reversible error in the RTC decision enjoining Mayor Cataquiz from enforcing or implementing
the Kapasiyahan Blg. 508, T. 1995, of the Sangguniang Panlalawigan of Laguna. That resolution expresses merely a policy
statement of the Laguna provincial board. It possesses no binding legal force nor requires any act of implementation. It
provides no sufficient legal basis for respondent mayors refusal to issue the permit sought by private respondent in
connection with a legitimate business activity authorized by a law passed by Congress.

WHEREFORE, the petition is DENIED for lack of merit. The Order of the Regional Trial Court of San Pedro, Laguna enjoining
the petitioners from implementing or enforcing Resolution or Kapasiyahan Blg. 508, T. 1995, of the Provincial Board of
Laguna is hereby AFFIRMED. No costs.

SO ORDERED.

EN BANC

G.R. No. 92299 April 19, 1991

REYNALDO R. SAN JUAN, petitioner,

vs.
CIVIL SERVICE COMMISSION, DEPARTMENT OF BUDGET AND MANAGEMENT and CECILIA ALMAJOSE, respondents.

Legal Services Division for petitioner.

Sumulong, Sumulong, Paras & Abano Law Offices for private respondent.

GUTIERREZ, JR., J.:

In this petition for certiorari pursuant to Section 7, Article IX (A) of the present Constitution, the petitioner Governor of
the Province of Rizal, prays for the nullification of Resolution No. 89-868 of the Civil Service Commission (CSC) dated
November 21, 1989 and its Resolution No. 90-150 dated February 9, 1990.

The dispositive portion of the questioned Resolution reads:

WHEREFORE, foregoing premises considered, the Commission resolved to dismiss, as it hereby dismisses the appeal of
Governor Reynaldo San Juan of Rizal. Accordingly, the approved appointment of Ms. Cecilia Almajose as Provincial Budget
Officer of Rizal, is upheld. (Rollo, p. 32)

The subsequent Resolution No. 90-150 reiterates CSC's position upholding the private respondent's appointment by
denying the petitioner's motion for reconsideration for lack of merit.

The antecedent facts of the case are as follows:

On March 22, 1988, the position of Provincial Budget Officer (PBO) for the province of Rizal was left vacant by its former
holder, a certain Henedima del Rosario.

In a letter dated April 18, 1988, the petitioner informed Director Reynaldo Abella of the Department of Budget and
Management (DBM) Region IV that Ms. Dalisay Santos assumed office as Acting PBO since March 22, 1988 pursuant to a
Memorandum issued by the petitioner who further requested Director Abella to endorse the appointment of the said Ms.
Dalisay Santos to the contested position of PBO of Rizal. Ms. Dalisay Santos was then Municipal Budget Officer of Taytay,
Rizal before she discharged the functions of acting PBO.
In a Memorandum dated July 26, 1988 addressed to the DBM Secretary, then Director Abella of Region IV recommended
the appointment of the private respondent as PBO of Rizal on the basis of a comparative study of all Municipal Budget
Officers of the said province which included three nominees of the petitioner. According to Abella, the private respondent
was the most qualified since she was the only Certified Public Accountant among the contenders.

On August 1, 1988, DBM Undersecretary Nazario S. Cabuquit, Jr. signed the appointment papers of the private respondent
as PBO of Rizal upon the aforestated recommendation of Abella.

In a letter dated August 3, 1988 addressed to Secretary Carague, the petitioner reiterated his request for the appointment
of Dalisay Santos to the contested position unaware of the earlier appointment made by Undersecretary Cabuquit.

On August 31, 1988, DBM Regional Director Agripino G. Galvez wrote the petitioner that Dalisay Santos and his other
recommendees did not meet the minimum requirements under Local Budget Circular No. 31 for the position of a local
budget officer. Director Galvez whether or not through oversight further required the petitioner to submit at least three
other qualified nominees who are qualified for the position of PBO of Rizal for evaluation and processing.

On November 2, 1988, the petitioner after having been informed of the private respondent's appointment wrote Secretary
Carague protesting against the said appointment on the grounds that Cabuquit as DBM Undersecretary is not legally
authorized to appoint the PBO; that the private respondent lacks the required three years work experience as provided in
Local Budget Circular No. 31; and that under Executive Order No. 112, it is the Provincial Governor, not the Regional
Director or a Congressman, who has the power to recommend nominees for the position of PBO.

On January 9, 1989 respondent DBM, through its Director of the Bureau of Legal & Legislative Affairs (BLLA) Virgilio A.
Afurung, issued a Memorandum ruling that the petitioner's letter-protest is not meritorious considering that public
respondent DBM validly exercised its prerogative in filling-up the contested position since none of the petitioner's
nominees met the prescribed requirements.

On January 27, 1989, the petitioner moved for a reconsideration of the BLLA ruling.

On February 28, 1989, the DBM Secretary denied the petitioner's motion for reconsideration.

On March 27, 1989, the petitioner wrote public respondent CSC protesting against the appointment of the private
respondent and reiterating his position regarding the matter.

Subsequently, public respondent CSC issued the questioned resolutions which prompted the petitioner to submit before
us the following assignment of errors:

A. THE CSC ERRED IN UPHOLDING THE APPOINTMENT BY DBM ASSISTANT SECRETARY CABUQUIT OF CECILIA ALMAJOSE
AS PBO OF RIZAL.

B. THE CSC ERRED IN HOLDING THAT CECILIA ALMA JOSE POSSESSES ALL THE REQUIRED QUALIFICATIONS.

C. THE CSC ERRED IN DECLARING THAT PETITIONER'S NOMINEES ARE NOT QUALIFIED TO THE SUBJECT POSITION.

D. THE CSC AND THE DBM GRAVELY ABUSED THEIR DISCRETION IN NOT ALLOWING PETITIONER TO SUBMIT NEW
NOMINEES WHO COULD MEET THE REQUIRED QUALIFICATION (Petition, pp. 7-8, Rollo, pp. 15-16)

All the assigned errors relate to the issue of whether or not the private respondent is lawfully entitled to discharge the
functions of PBO of Rizal pursuant to the appointment made by public respondent DBM's Undersecretary upon the
recommendation of then Director Abella of DBM Region IV.

The petitioner's arguments rest on his contention that he has the sole right and privilege to recommend the nominees to
the position of PBO and that the appointee should come only from his nominees. In support thereof, he invokes Section
1 of Executive Order No. 112 which provides that:
Sec. 1. All budget officers of provinces, cities and municipalities shall be appointed henceforth by the Minister of Budget
and Management upon recommendation of the local chief executive concerned, subject to civil service law, rules and
regulations, and they shall be placed under the administrative control and technical supervision of the Ministry of Budget
and Management.

The petitioner maintains that the appointment of the private respondent to the contested position was made in
derogation of the provision so that both the public respondents committed grave abuse of discretion in upholding
Almajose's appointment.

There is no question that under Section 1 of Executive Order No. 112 the petitioner's power to recommend is subject to
the qualifications prescribed by existing laws for the position of PBO. Consequently, in the event that the
recommendations made by the petitioner fall short of the required standards, the appointing authority, the Minister (now
Secretary) of public respondent DBM is expected to reject the same.

In the event that the Governor recommends an unqualified person, is the Department Head free to appoint anyone he
fancies ? This is the issue before us.

Before the promulgation of Executive Order No. 112 on December 24, 1986, Batas Pambansa Blg. 337, otherwise known
as the Local Government Code vested upon the Governor, subject to civil service rules and regulations, the power to
appoint the PBO (Sec. 216, subparagraph (1), BP 337). The Code further enumerated the qualifications for the position of
PBO. Thus, Section 216, subparagraph (2) of the same code states that:

(2) No person shall be appointed provincial budget officer unless he is a citizen of the Philippines, of good moral character,
a holder of a degree preferably in law, commerce, public administration or any related course from a recognized college
or university, a first grade civil service eligibility or its equivalent, and has acquired at least five years experience in
budgeting or in any related field.

The petitioner contends that since the appointing authority with respect to the Provincial Budget Officer of Rizal was
vested in him before, then, the real intent behind Executive Order No. 112 in empowering him to recommend nominees
to the position of Provincial Budget Officer is to make his recommendation part and parcel of the appointment process.
He states that the phrase "upon recommendation of the local chief executive concerned" must be given mandatory
application in consonance with the state policy of local autonomy as guaranteed by the 1987 Constitution under Art. II,
Sec. 25 and Art. X, Sec. 2 thereof. He further argues that his power to recommend cannot validly be defeated by a mere
administrative issuance of public respondent DBM reserving to itself the right to fill-up any existing vacancy in case the
petitioner's nominees do not meet the qualification requirements as embodied in public respondent DBM's Local Budget
Circular No. 31 dated February 9, 1988.

The questioned ruling is justified by the public respondent CSC as follows:

As required by said E.O. No. 112, the DBM Secretary may choose from among the recommendees of the Provincial
Governor who are thus qualified and eligible for appointment to the position of the PBO of Rizal. Notwithstanding, the
recommendation of the local chief executive is merely directory and not a condition sine qua non to the exercise by the
Secretary of DBM of his appointing prerogative. To rule otherwise would in effect give the law or E.O. No. 112 a different
interpretation or construction not intended therein, taking into consideration that said officer has been nationalized and
is directly under the control and supervision of the DBM Secretary or through his duly authorized representative. It cannot
be gainsaid that said national officer has a similar role in the local government unit, only on another area or concern, to
that of a Commission on Audit resident auditor. Hence, to preserve and maintain the independence of said officer from
the local government unit, he must be primarily the choice of the national appointing official, and the exercise thereof
must not be unduly hampered or interfered with, provided the appointee finally selected meets the requirements for the
position in accordance with prescribed Civil Service Law, Rules and Regulations. In other words, the appointing official is
not restricted or circumscribed to the list submitted or recommended by the local chief executive in the final selection of
an appointee for the position. He may consider other nominees for the position vis a vis the nominees of the local chief
executive. (CSC Resolution No. 89-868, p. 2; Rollo, p. 31)
The issue before the Court is not limited to the validity of the appointment of one Provincial Budget Officer. The tug of
war between the Secretary of Budget and Management and the Governor of the premier province of Rizal over a
seemingly innocuous position involves the application of a most important constitutional policy and principle, that of local
autonomy. We have to obey the clear mandate on local autonomy. Where a law is capable of two interpretations, one in
favor of centralized power in Malacaang and the other beneficial to local autonomy, the scales must be weighed in favor
of autonomy.

The exercise by local governments of meaningful power has been a national goal since the turn of the century. And yet,
inspite of constitutional provisions and, as in this case, legislation mandating greater autonomy for local officials, national
officers cannot seem to let go of centralized powers. They deny or water down what little grants of autonomy have so far
been given to municipal corporations.

President McKinley's Instructions dated April 7, 1900 to the Second Philippine Commission ordered the new Government
"to devote their attention in the first instance to the establishment of municipal governments in which natives of the
Islands, both in the cities and rural communities, shall be afforded the opportunity to manage their own local officers to
the fullest extent of which they are capable and subject to the least degree of supervision and control which a careful
study of their capacities and observation of the workings of native control show to be consistent with the maintenance of
law, order and loyalty.

In this initial organic act for the Philippines, the Commission which combined both executive and legislative powers was
directed to give top priority to making local autonomy effective.

The 1935 Constitution had no specific article on local autonomy. However, in distinguishing between presidential control
and supervision as follows:

The President shall have control of all the executive departments, bureaus, or offices, exercise general supervision over
all local governments as may be provided by law, and take care that the laws be faithfully executed. (Sec. 11, Article VII,
1935 Constitution)

the Constitution clearly limited the executive power over local governments to "general supervision . . . as may be provided
by law." The President controls the executive departments. He has no such power over local governments. He has only
supervision and that supervision is both general and circumscribed by statute.

In Tecson v. Salas, 34 SCRA 275, 282 (1970), this Court stated:

. . . Hebron v. Reyes, (104 Phil. 175 [1958]) with the then Justice, now Chief Justice, Concepcion as the ponente, clarified
matters. As was pointed out, the presidential competence is not even supervision in general, but general supervision as
may be provided by law. He could not thus go beyond the applicable statutory provisions, which bind and fetter his
discretion on the matter. Moreover, as had been earlier ruled in an opinion penned by Justice Padilla in Mondano V.
Silvosa, (97 Phil. 143 [1955]) referred to by the present Chief Justice in his opinion in the Hebron case, supervision goes
no further than "overseeing or the power or authority of an officer to see that subordinate officers perform their duties.
If the latter fail or neglect to fulfill them the former may take such action or step as prescribed by law to make them
perform their duties." (Ibid, pp. 147-148) Control, on the other hand, "means the power of an officer to alter or modify or
nullify or set aside what a subordinate had done in the performance of their duties and to substitute the judgment of the
former for that of the latter." It would follow then, according to the present Chief Justice, to go back to the Hebron opinion,
that the President had to abide by the then provisions of the Revised Administrative Code on suspension and removal of
municipal officials, there being no power of control that he could rightfully exercise, the law clearly specifying the
procedure by which such disciplinary action would be taken.

Pursuant to this principle under the 1935 Constitution, legislation implementing local autonomy was enacted. In 1959,
Republic Act No. 2264, "An Act Amending the Law Governing Local Governments by Increasing Their Autonomy and
Reorganizing Local Governments" was passed. It was followed in 1967 when Republic Act No. 5185, the Decentralization
Law was enacted, giving "further autonomous powers to local governments governments."
The provisions of the 1973 Constitution moved the country further, at least insofar as legal provisions are concerned,
towards greater autonomy. It provided under Article II as a basic principle of government:

Sec. 10. The State shall guarantee and promote the autonomy of local government units, especially the barangay to ensure
their fullest development as self-reliant communities.

An entire article on Local Government was incorporated into the Constitution. It called for a local government code
defining more responsive and accountable local government structures. Any creation, merger, abolition, or substantial
boundary alteration cannot be done except in accordance with the local government code and upon approval by a
plebiscite. The power to create sources of revenue and to levy taxes was specifically settled upon local governments.

The exercise of greater local autonomy is even more marked in the present Constitution.

Article II, Section 25 on State Policies provides:

Sec. 25. The State shall ensure the autonomy of local governments

The 14 sections in Article X on Local Government not only reiterate earlier doctrines but give in greater detail the
provisions making local autonomy more meaningful. Thus, Sections 2 and 3 of Article X provide:

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

Sec. 3. The Congress shall enact a local government code which shall provide for a more responsive and accountable local
government structure instituted through a system of decentralization with effective mechanisms of recall, initiative, and
referendum, allocate among the different local government units their powers, responsibilities, and resources, and
provide for the qualifications, election, appointment and removal, term, salaries, powers and functions and duties of local
officials, and all other matters relating to the organization and operation of the local units.

When the Civil Service Commission interpreted the recommending power of the Provincial Governor as purely directory,
it went against the letter and spirit of the constitutional provisions on local autonomy. If the DBM Secretary jealously
hoards the entirety of budgetary powers and ignores the right of local governments to develop self-reliance and
resoluteness in the handling of their own funds, the goal of meaningful local autonomy is frustrated and set back.

The right given by Local Budget Circular No. 31 which states:

Sec. 6.0 The DBM reserves the right to fill up any existing vacancy where none of the nominees of the local chief
executive meet the prescribed requirements.

is ultra vires and is, accordingly, set aside. The DBM may appoint only from the list of qualified recommendees nominated
by the Governor. If none is qualified, he must return the list of nominees to the Governor explaining why no one meets
the legal requirements and ask for new recommendees who have the necessary eligibilities and qualifications.

The PBO is expected to synchronize his work with DBM. More important, however, is the proper administration of fiscal
affairs at the local level. Provincial and municipal budgets are prepared at the local level and after completion are
forwarded to the national officials for review. They are prepared by the local officials who must work within the constraints
of those budgets. They are not formulated in the inner sanctums of an all-knowing DBM and unilaterally imposed on local
governments whether or not they are relevant to local needs and resources. It is for this reason that there should be a
genuine interplay, a balancing of viewpoints, and a harmonization of proposals from both the local and national officials.
It is for this reason that the nomination and appointment process involves a sharing of power between the two levels of
government.

It may not be amiss to give by way of analogy the procedure followed in the appointments of Justices and
Judges.1wphi1 Under Article VIII of the Constitution, nominations for judicial positions are made by the Judicial and Bar
Council. The President makes the appointments from the list of nominees submitted to her by the Council. She cannot
apply the DBM procedure, reject all the Council nominees, and appoint another person whom she feels is better qualified.
There can be no reservation of the right to fill up a position with a person of the appointing power's personal choice.
The public respondent's grave abuse of discretion is aggravated by the fact that Director Galvez required the Provincial
Governor to submit at least three other names of nominees better qualified than his earlier recommendation. It was a
meaningless exercise. The appointment of the private respondent was formalized before the Governor was extended the
courtesy of being informed that his nominee had been rejected. The complete disregard of the local government's
prerogative and the smug belief that the DBM has absolute wisdom, authority, and discretion are manifest.

In his classic work "Philippine Political Law" Dean Vicente G. Sinco stated that the value of local governments as institutions
of democracy is measured by the degree of autonomy that they enjoy. Citing Tocqueville, he stated that "local assemblies
of citizens constitute the strength of free nations. . . . A people may establish a system of free government but without
the spirit of municipal institutions, it cannot have the spirit of liberty." (Sinco, Philippine Political Law, Eleventh Edition,
pp. 705-706).

Our national officials should not only comply with the constitutional provisions on local autonomy but should also
appreciate the spirit of liberty upon which these provisions are based.

WHEREFORE, the petition is hereby GRANTED. The questioned resolutions of the Civil Service Commission are SET ASIDE.
The appointment of respondent Cecilia Almajose is nullified. The Department of Budget and Management is ordered to
appoint the Provincial Budget Officer of Rizal from among qualified nominees submitted by the Provincial Governor.

SO ORDERED.

FIRST DIVISION

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

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,

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

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,

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

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,

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

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,

vs.
COURT OF APPEALS; HON. JUDGE MANUEL S. PADOLINA, PRESIDING JUDGE, BRANCH 162, REGIONAL TRIAL COURT OF
PASIG, METRO MANILA; IRMA FISHING & TRADING CORP.; ARTM FISHING CORP.; BDR CORPORATION, MIRT
CORPORATION and TRIM CORPORATION; MUNICIPALITY OF BINANGONAN and/or MAYOR ISIDRO B.
PACIS, respondents.
LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,
vs.
COURT OF APPEALS; HON. JUDGE ARTURO A. MARAVE, PRESIDING JUDGE, BRANCH 78, REGIONAL TRIAL COURT OF
MORONG, RIZAL; BLUE LAGOON FISHING CORP. and ALCRIS CHICKEN GROWERS, INC.; MUNICIPALITY OF JALA-JALA
and/or MAYOR WALFREDO M. DE LA VEGA, respondents.

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,

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

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,

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

HERMOSISIMA, JR., J.:

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

How do we strike a balance between environmental protection, on the one hand, and the individual personal interests of
people, on the other?

Towards environmental protection and ecology, navigational safety, and sustainable development, Republic Act No. 4850
created the "Laguna Lake Development Authority." This Government Agency is supposed to carry out and effectuate the
aforesaid declared policy, so as to accelerate the development and balanced growth of the Laguna Lake area and the
surrounding provinces, cities and towns, in the act clearly named, within the context of the national and regional plans
and policies for social and economic development.

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

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

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

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

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

xxx xxx xxx

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

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

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

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

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

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

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

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

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

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

Sec 41. Definition of Terms.

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

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

Sec. 149. Fishery Rentals, Fees and Charges.

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

(b) The Sangguniang Bayan may:

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

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

xxx xxx xxx

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

xxx xxx xxx

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

xxx xxx xxx

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

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

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

In compliance with the instructions of His Excellency PRESIDENT FIDEL V. RAMOS given on June 23, 1993 at Pila, Laguna
pursuant to Republic Act 4850 as amended by Presidential Decree 813 and Executive Order 927 series of 1983 and in line
with the policies and programs of the Presidential Task Force on Illegal Fishpens and Illegal Fishing, the general public is
hereby notified that:

1. All fishpens, fishcages and other aqua-culture structures in the Laguna de Bay Region, which were not registered or to
which no application for registration and/or permit has been filed with Laguna Lake Development Authority as of March
31, 1993 are hereby declared outrightly as illegal.

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

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

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

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

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

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

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

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

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

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

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

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

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

1. THE HONORABLE COURT OF APPEALS PROBABLY COMMITTED AN ERROR WHEN IT RULED THAT THE LAGUNA LAKE
DEVELOPMENT AUTHORITY IS NOT A QUASI-JUDICIAL AGENCY.

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

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

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

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

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

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

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

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

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

Considering the reasons behind the establishment of the Authority, which are environmental protection, navigational
safety, and sustainable development, there is every indication that the legislative intent is for the Authority to proceed
with its mission.

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

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

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

The power of the local government units to issue fishing privileges was clearly granted for revenue purposes. This is
evident from the fact that Section 149 of the New Local Government Code empowering local governments to issue fishing
permits is embodied in Chapter 2, Book II, of Republic Act No. 7160 under the heading, "Specific Provisions On The Taxing
And Other Revenue Raising Power Of Local Government Units."
On the other hand, the power of the Authority to grant permits for fishpens, fishcages and other aqua-culture structures
is for the purpose of effectively regulating and monitoring activities in the Laguna de Bay region (Section 2, Executive
Order No. 927) and for lake quality control and management. 6 It does partake of the nature of police power which is the
most pervasive, the least limitable and the most demanding of all State powers including the power of taxation.
Accordingly, the charter of the Authority which embodies a valid exercise of police power should prevail over the Local
Government Code of 1991 on matters affecting Laguna de Bay.

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

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

xxx xxx xxx

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

xxx xxx xxx

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

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

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

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

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

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

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

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

SO ORDERED.

EN BANC

[G.R. No. 152774. May 27, 2004]

THE PROVINCE OF BATANGAS, represented by its Governor, HERMILANDO I. MANDANAS, petitioner, vs. HON. ALBERTO
G. ROMULO, Executive Secretary and Chairman of the Oversight Committee on Devolution; HON. EMILIA BONCODIN,
Secretary, Department of Budget and Management; HON. JOSE D. LINA, JR., Secretary, Department of Interior and Local
Government, respondents.

DECISION

CALLEJO, SR., J.:

The Province of Batangas, represented by its Governor, Hermilando I. Mandanas, filed the present petition for certiorari,
prohibition and mandamus under Rule 65 of the Rules of Court, as amended, to declare as unconstitutional and void
certain provisos contained in the General Appropriations Acts (GAA) of 1999, 2000 and 2001, insofar as they uniformly
earmarked for each corresponding year the amount of five billion pesos (P5,000,000,000.00) of the Internal Revenue
Allotment (IRA) for the Local Government Service Equalization Fund (LGSEF) and imposed conditions for the release
thereof.

Named as respondents are Executive Secretary Alberto G. Romulo, in his capacity as Chairman of the Oversight Committee
on Devolution, Secretary Emilia Boncodin of the Department of Budget and Management (DBM) and Secretary Jose Lina
of the Department of Interior and Local Government (DILG).

Background

On December 7, 1998, then President Joseph Ejercito Estrada issued Executive Order (E.O.) No. 48 entitled ESTABLISHING
A PROGRAM FOR DEVOLUTION ADJUSTMENT AND EQUALIZATION. The program was established to facilitate the process
of enhancing the capacities of local government units (LGUs) in the discharge of the functions and services devolved to
them by the National Government Agencies concerned pursuant to the Local Government Code. [1] The Oversight
Committee (referred to as the Devolution Committee in E.O. No. 48) constituted under Section 533(b) of Republic Act No.
7160 (The Local Government Code of 1991) has been tasked to formulate and issue the appropriate rules and regulations
necessary for its effective implementation.[2] Further, to address the funding shortfalls of functions and services devolved
to the LGUs and other funding requirements of the program, the Devolution Adjustment and Equalization Fund was
created.[3] For 1998, the DBM was directed to set aside an amount to be determined by the Oversight Committee based
on the devolution status appraisal surveys undertaken by the DILG.[4] The initial fund was to be sourced from the available
savings of the national government for CY 1998.[5] For 1999 and the succeeding years, the corresponding amount required
to sustain the program was to be incorporated in the annual GAA. [6] The Oversight Committee has been authorized to
issue the implementing rules and regulations governing the equitable allocation and distribution of said fund to the LGUs. [7]

The LGSEF in the GAA of 1999

In Republic Act No. 8745, otherwise known as the GAA of 1999, the program was renamed as the LOCAL GOVERNMENT
SERVICE EQUALIZATION FUND (LGSEF). Under said appropriations law, the amount of P96,780,000,000 was allotted as the
share of the LGUs in the internal revenue taxes. Item No. 1, Special Provisions, Title XXXVI A. Internal Revenue Allotment
of Rep. Act No. 8745 contained the following proviso:

... PROVIDED, That the amount of FIVE BILLION PESOS (P5,000,000,000) shall be earmarked for the Local Government
Service Equalization Fund for the funding requirements of projects and activities arising from the full and efficient
implementation of devolved functions and services of local government units pursuant to R.A. No. 7160, otherwise known
as the Local Government Code of 1991: PROVIDED, FURTHER, That such amount shall be released to the local government
units subject to the implementing rules and regulations, including such mechanisms and guidelines for the equitable
allocations and distribution of said fund among local government units subject to the guidelines that may be prescribed
by the Oversight Committee on Devolution as constituted pursuant to Book IV, Title III, Section 533(b) of R.A. No. 7160. The
Internal Revenue Allotment shall be released directly by the Department of Budget and Management to the Local
Government Units concerned.

On July 28, 1999, the Oversight Committee (with then Executive Secretary Ronaldo B. Zamora as Chairman) passed
Resolution Nos. OCD-99-003, OCD-99-005 and OCD-99-006 entitled as follows:

OCD-99-005

RESOLUTION ADOPTING THE ALLOCATION SCHEME FOR THE PhP5 BILLION CY 1999 LOCAL GOVERNMENT SERVICE
EQUALIZATION FUND (LGSEF) AND REQUESTING HIS EXCELLENCY PRESIDENT JOSEPH EJERCITO ESTRADA TO APPROVE
SAID ALLOCATION SCHEME.

OCD-99-006

RESOLUTION ADOPTING THE ALLOCATION SCHEME FOR THE PhP4.0 BILLION OF THE 1999 LOCAL GOVERNMENT SERVICE
EQUALIZATION FUND AND ITS CONCOMITANT GENERAL FRAMEWORK, IMPLEMENTING GUIDELINES AND MECHANICS
FOR ITS IMPLEMENTATION AND RELEASE, AS PROMULGATED BY THE OVERSIGHT COMMITTEE ON DEVOLUTION.

OCD-99-003

RESOLUTION REQUESTING HIS EXCELLENCY PRESIDENT JOSEPH EJERCITO ESTRADA TO APPROVE THE REQUEST OF THE
OVERSIGHT COMMITTEE ON DEVOLUTION TO SET ASIDE TWENTY PERCENT (20%) OF THE LOCAL GOVERNMENT SERVICE
EQUALIZATION FUND (LGSEF) FOR LOCAL AFFIRMATIVE ACTION PROJECTS AND OTHER PRIORITY INITIATIVES FOR LGUs
INSTITUTIONAL AND CAPABILITY BUILDING IN ACCORDANCE WITH THE IMPLEMENTING GUIDELINES AND MECHANICS AS
PROMULGATED BY THE COMMITTEE.

These OCD resolutions were approved by then President Estrada on October 6, 1999.

Under the allocation scheme adopted pursuant to Resolution No. OCD-99-005, the five billion pesos LGSEF was to be
allocated as follows:
1. The PhP4 Billion of the LGSEF shall be allocated in accordance with the allocation scheme and implementing guidelines
and mechanics promulgated and adopted by the OCD. To wit:

a. The first PhP2 Billion of the LGSEF shall be allocated in accordance with the codal formula sharing scheme as prescribed
under the 1991 Local Government Code;

b. The second PhP2 Billion of the LGSEF shall be allocated in accordance with a modified 1992 cost of devolution fund
(CODEF) sharing scheme, as recommended by the respective leagues of provinces, cities and municipalities to the
OCD. The modified CODEF sharing formula is as follows:

Province : 40%

Cities : 20%

Municipalities : 40%

This is applied to the P2 Billion after the approved amounts granted to individual provinces, cities and municipalities as
assistance to cover decrease in 1999 IRA share due to reduction in land area have been taken out.

2. The remaining PhP1 Billion of the LGSEF shall be earmarked to support local affirmative action projects and other
priority initiatives submitted by LGUs to the Oversight Committee on Devolution for approval in accordance with its
prescribed guidelines as promulgated and adopted by the OCD.

In Resolution No. OCD-99-003, the Oversight Committee set aside the one billion pesos or 20% of the LGSEF to support
Local Affirmative Action Projects (LAAPs) of LGUs. This remaining amount was intended to respond to the urgent need for
additional funds assistance, otherwise not available within the parameters of other existing fund sources. For LGUs to be
eligible for funding under the one-billion-peso portion of the LGSEF, the OCD promulgated the following:

III. CRITERIA FOR ELIGIBILITY:

1. LGUs (province, city, municipality, or barangay), individually or by group or multi-LGUs or leagues of LGUs, especially
those belonging to the 5th and 6th class, may access the fund to support any projects or activities that satisfy any of the
aforecited purposes. A barangay may also access this fund directly or through their respective municipality or city.

2. The proposed project/activity should be need-based, a local priority, with high development impact and are congruent
with the socio-cultural, economic and development agenda of the Estrada Administration, such as food security, poverty
alleviation, electrification, and peace and order, among others.

3. Eligible for funding under this fund are projects arising from, but not limited to, the following areas of concern:

a. delivery of local health and sanitation services, hospital services and other tertiary services;

b. delivery of social welfare services;

c. provision of socio-cultural services and facilities for youth and community development;

d. provision of agricultural and on-site related research;

e. improvement of community-based forestry projects and other local projects on environment and natural resources
protection and conservation;

f. improvement of tourism facilities and promotion of tourism;

g. peace and order and public safety;

h. construction, repair and maintenance of public works and infrastructure, including public buildings and facilities for
public use, especially those destroyed or damaged by man-made or natural calamities and disaster as well as facilities for
water supply, flood control and river dikes;
i. provision of local electrification facilities;

j. livelihood and food production services, facilities and equipment;

k. other projects that may be authorized by the OCD consistent with the aforementioned objectives and guidelines;

4. Except on extremely meritorious cases, as may be determined by the Oversight Committee on Devolution, this portion
of the LGSEF shall not be used in expenditures for personal costs or benefits under existing laws applicable to
governments. Generally, this fund shall cover the following objects of expenditures for programs, projects and activities
arising from the implementation of devolved and regular functions and services:

a. acquisition/procurement of supplies and materials critical to the full and effective implementation of devolved
programs, projects and activities;

b. repair and/or improvement of facilities;

c. repair and/or upgrading of equipment;

d. acquisition of basic equipment;

e. construction of additional or new facilities;

f. counterpart contribution to joint arrangements or collective projects among groups of municipalities, cities and/or
provinces related to devolution and delivery of basic services.

5. To be eligible for funding, an LGU or group of LGU shall submit to the Oversight Committee on Devolution through the
Department of Interior and Local Governments, within the prescribed schedule and timeframe, a Letter Request for
Funding Support from the Affirmative Action Program under the LGSEF, duly signed by the concerned LGU(s) and endorsed
by cooperators and/or beneficiaries, as well as the duly signed Resolution of Endorsement by the respective Sanggunian(s)
of the LGUs concerned. The LGU-proponent shall also be required to submit the Project Request (PR), using OCD Project
Request Form No. 99-02, that details the following:

(a) general description or brief of the project;

(b) objectives and justifications for undertaking the project, which should highlight the benefits to the locality and the
expected impact to the local program/project arising from the full and efficient implementation of social services and
facilities, at the local levels;

(c) target outputs or key result areas;

(d) schedule of activities and details of requirements;

(e) total cost requirement of the project;

(f) proponents counterpart funding share, if any, and identified source(s) of counterpart funds for the full implementation
of the project;

(g) requested amount of project cost to be covered by the LGSEF.

Further, under the guidelines formulated by the Oversight Committee as contained in Attachment - Resolution No. OCD-
99-003, the LGUs were required to identify the projects eligible for funding under the one-billion-peso portion of the LGSEF
and submit the project proposals thereof and other documentary requirements to the DILG for appraisal. The project
proposals that passed the DILGs appraisal would then be submitted to the Oversight Committee for review, evaluation
and approval. Upon its approval, the Oversight Committee would then serve notice to the DBM for the preparation of the
Special Allotment Release Order (SARO) and Notice of Cash Allocation (NCA) to effect the release of funds to the said LGUs.

The LGSEF in the GAA of 2000

Under Rep. Act No. 8760, otherwise known as the GAA of 2000, the amount of P111,778,000,000 was allotted as the share
of the LGUs in the internal revenue taxes. As in the GAA of 1999, the GAA of 2000 contained a proviso earmarking five
billion pesos of the IRA for the LGSEF. This proviso, found in Item No. 1, Special Provisions, Title XXXVII A. Internal Revenue
Allotment, was similarly worded as that contained in the GAA of 1999.

The Oversight Committee, in its Resolution No. OCD-2000-023 dated June 22, 2000, adopted the following allocation
scheme governing the five billion pesos LGSEF for 2000:

1. The PhP3.5 Billion of the CY 2000 LGSEF shall be allocated to and shared by the four levels of LGUs, i.e., provinces, cities,
municipalities, and barangays, using the following percentage-sharing formula agreed upon and jointly endorsed by the
various Leagues of LGUs:

For Provinces 26% or P 910,000,000

For Cities 23% or 805,000,000

For Municipalities 35% or 1,225,000,000

For Barangays 16% or 560,000,000

Provided that the respective Leagues representing the provinces, cities, municipalities and barangays shall draw up and
adopt the horizontal distribution/sharing schemes among the member LGUs whereby the Leagues concerned may opt to
adopt direct financial assistance or project-based arrangement, such that the LGSEF allocation for individual LGU shall be
released directly to the LGU concerned;

Provided further that the individual LGSEF shares to LGUs are used in accordance with the general purposes and guidelines
promulgated by the OCD for the implementation of the LGSEF at the local levels pursuant to Res. No. OCD-99-006 dated
October 7, 1999 and pursuant to the Leagues guidelines and mechanism as approved by the OCD;

Provided further that each of the Leagues shall submit to the OCD for its approval their respective allocation scheme, the
list of LGUs with the corresponding LGSEF shares and the corresponding project categories if project-based;

Provided further that upon approval by the OCD, the lists of LGUs shall be endorsed to the DBM as the basis for the
preparation of the corresponding NCAs, SAROs, and related budget/release documents.

2. The remaining P1,500,000,000 of the CY 2000 LGSEF shall be earmarked to support the following initiatives and local
affirmative action projects, to be endorsed to and approved by the Oversight Committee on Devolution in accordance
with the OCD agreements, guidelines, procedures and documentary requirements:

On July 5, 2000, then President Estrada issued a Memorandum authorizing then Executive Secretary Zamora and the DBM
to implement and release the 2.5 billion pesos LGSEF for 2000 in accordance with Resolution No. OCD-2000-023.

Thereafter, the Oversight Committee, now under the administration of President Gloria Macapagal-Arroyo, promulgated
Resolution No. OCD-2001-29 entitled ADOPTING RESOLUTION NO. OCD-2000-023 IN THE ALLOCATION, IMPLEMENTATION
AND RELEASE OF THE REMAINING P2.5 BILLION LGSEF FOR CY 2000. Under this resolution, the amount of one billion pesos
of the LGSEF was to be released in accordance with paragraph 1 of Resolution No. OCD-2000-23, to complete the 3.5
billion pesos allocated to the LGUs, while the amount of 1.5 billion pesos was allocated for the LAAP. However, out of the
latter amount, P400,000,000 was to be allocated and released as follows: P50,000,000 as financial assistance to the LAAPs
of LGUs; P275,360,227 as financial assistance to cover the decrease in the IRA of LGUs concerned due to reduction in land
area; and P74,639,773 for the LGSEF Capability-Building Fund.

The LGSEF in the GAA of 2001

In view of the failure of Congress to enact the general appropriations law for 2001, the GAA of 2000 was deemed re-
enacted, together with the IRA of the LGUs therein and the proviso earmarking five billion pesos thereof for the LGSEF.
On January 9, 2002, the Oversight Committee adopted Resolution No. OCD-2002-001 allocating the five billion pesos LGSEF
for 2001 as follows:

Modified Codal Formula P 3.000 billion

Priority Projects 1.900 billion

Capability Building Fund .100 billion

P 5.000 billion

RESOLVED FURTHER, that the P3.0 B of the CY 2001 LGSEF which is to be allocated according to the modified codal formula
shall be released to the four levels of LGUs, i.e., provinces, cities, municipalities and barangays, as follows:

LGUs Percentage Amount

Provinces 25 P 0.750 billion

Cities 25 0.750

Municipalities 35 1.050

Barangays 15 0.450

100 P 3.000 billion

RESOLVED FURTHER, that the P1.9 B earmarked for priority projects shall be distributed according to the following criteria:

1.0 For projects of the 4th, 5th and 6th class LGUs; or

2.0 Projects in consonance with the Presidents State of the Nation Address (SONA)/summit commitments.

RESOLVED FURTHER, that the remaining P100 million LGSEF capability building fund shall be distributed in accordance
with the recommendation of the Leagues of Provinces, Cities, Municipalities and Barangays, and approved by the OCD.

Upon receipt of a copy of the above resolution, Gov. Mandanas wrote to the individual members of the Oversight
Committee seeking the reconsideration of Resolution No. OCD-2002-001. He also wrote to Pres. Macapagal-Arroyo urging
her to disapprove said resolution as it violates the Constitution and the Local Government Code of 1991.

On January 25, 2002, Pres. Macapagal-Arroyo approved Resolution No. OCD-2002-001.

The Petitioners Case

The petitioner now comes to this Court assailing as unconstitutional and void the provisos in the GAAs of 1999, 2000 and
2001, relating to the LGSEF. Similarly assailed are the Oversight Committees Resolutions Nos. OCD-99-003, OCD-99-005,
OCD-99-006, OCD-2000-023, OCD-2001-029 and OCD-2002-001 issued pursuant thereto. The petitioner submits that the
assailed provisos in the GAAs and the OCD resolutions, insofar as they earmarked the amount of five billion pesos of the
IRA of the LGUs for 1999, 2000 and 2001 for the LGSEF and imposed conditions for the release thereof, violate the
Constitution and the Local Government Code of 1991.

Section 6, Article X of the Constitution is invoked as it mandates that the just share of the LGUs shall be automatically
released to them. Sections 18 and 286 of the Local Government Code of 1991, which enjoin that the just share of the LGUs
shall be automatically and directly released to them without need of further action are, likewise, cited.

The petitioner posits that to subject the distribution and release of the five-billion-peso portion of the IRA, classified as
the LGSEF, to compliance by the LGUs with the implementing rules and regulations, including the mechanisms and
guidelines prescribed by the Oversight Committee, contravenes the explicit directive of the Constitution that the LGUs
share in the national taxes shall be automatically released to them. The petitioner maintains that the use of the word
shall must be given a compulsory meaning.
To further buttress this argument, the petitioner contends that to vest the Oversight Committee with the authority to
determine the distribution and release of the LGSEF, which is a part of the IRA of the LGUs, is an anathema to the principle
of local autonomy as embodied in the Constitution and the Local Government Code of 1991. The petitioner cites as an
example the experience in 2001 when the release of the LGSEF was long delayed because the Oversight Committee was
not able to convene that year and no guidelines were issued therefor. Further, the possible disapproval by the Oversight
Committee of the project proposals of the LGUs would result in the diminution of the latters share in the IRA.

Another infringement alleged to be occasioned by the assailed OCD resolutions is the improper amendment to Section
285 of the Local Government Code of 1991 on the percentage sharing of the IRA among the LGUs. Said provision allocates
the IRA as follows: Provinces 23%; Cities 23%; Municipalities 34%; and Barangays 20%. [8] This formula has been improperly
amended or modified, with respect to the five-billion-peso portion of the IRA allotted for the LGSEF, by the assailed OCD
resolutions as they invariably provided for a different sharing scheme.

The modifications allegedly constitute an illegal amendment by the executive branch of a substantive law. Moreover, the
petitioner mentions that in the Letter dated December 5, 2001 of respondent Executive Secretary Romulo addressed to
respondent Secretary Boncodin, the former endorsed to the latter the release of funds to certain LGUs from the LGSEF in
accordance with the handwritten instructions of President Arroyo. Thus, the LGUs are at a loss as to how a portion of the
LGSEF is actually allocated. Further, there are still portions of the LGSEF that, to date, have not been received by the
petitioner; hence, resulting in damage and injury to the petitioner.

The petitioner prays that the Court declare as unconstitutional and void the assailed provisos relating to the LGSEF in the
GAAs of 1999, 2000 and 2001 and the assailed OCD resolutions (Resolutions Nos. OCD-99-003, OCD-99-005, OCD-99-006,
OCD-2000-023, OCD-2001-029 and OCD-2002-001) issued by the Oversight Committee pursuant thereto. The petitioner,
likewise, prays that the Court direct the respondents to rectify the unlawful and illegal distribution and releases of the
LGSEF for the aforementioned years and release the same in accordance with the sharing formula under Section 285 of
the Local Government Code of 1991. Finally, the petitioner urges the Court to declare that the entire IRA should be
released automatically without further action by the LGUs as required by the Constitution and the Local Government Code
of 1991.

The Respondents Arguments

The respondents, through the Office of the Solicitor General, urge the Court to dismiss the petition on procedural and
substantive grounds. On the latter, the respondents contend that the assailed provisos in the GAAs of 1999, 2000 and
2001 and the assailed resolutions issued by the Oversight Committee are not constitutionally infirm. The respondents
advance the view that Section 6, Article X of the Constitution does not specify that the just share of the LGUs shall be
determined solely by the Local Government Code of 1991. Moreover, the phrase as determined by law in the same
constitutional provision means that there exists no limitation on the power of Congress to determine what is the just share
of the LGUs in the national taxes.In other words, Congress is the arbiter of what should be the just share of the LGUs in
the national taxes.

The respondents further theorize that Section 285 of the Local Government Code of 1991, which provides for the
percentage sharing of the IRA among the LGUs, was not intended to be a fixed determination of their just share in the
national taxes. Congress may enact other laws, including appropriations laws such as the GAAs of 1999, 2000 and 2001,
providing for a different sharing formula. Section 285 of the Local Government Code of 1991 was merely intended to be
the default share of the LGUs to do away with the need to determine annually by law their just share. However, the LGUs
have no vested right in a permanent or fixed percentage as Congress may increase or decrease the just share of the LGUs
in accordance with what it believes is appropriate for their operation. There is nothing in the Constitution which prohibits
Congress from making such determination through the appropriations laws. If the provisions of a particular statute, the
GAA in this case, are within the constitutional power of the legislature to enact, they should be sustained whether the
courts agree or not in the wisdom of their enactment.
On procedural grounds, the respondents urge the Court to dismiss the petition outright as the same is defective. The
petition allegedly raises factual issues which should be properly threshed out in the lower courts, not this Court, not being
a trier of facts. Specifically, the petitioners allegation that there are portions of the LGSEF that it has not, to date, received,
thereby causing it (the petitioner) injury and damage, is subject to proof and must be substantiated in the proper
venue, i.e., the lower courts.

Further, according to the respondents, the petition has already been rendered moot and academic as it no longer presents
a justiciable controversy. The IRAs for the years 1999, 2000 and 2001, have already been released and the government is
now operating under the 2003 budget. In support of this, the respondents submitted certifications issued by officers of
the DBM attesting to the release of the allocation or shares of the petitioner in the LGSEF for 1999, 2000 and 2001. There
is, therefore, nothing more to prohibit.

Finally, the petitioner allegedly has no legal standing to bring the suit because it has not suffered any injury. In fact, the
petitioners just share has even increased. Pursuant to Section 285 of the Local Government Code of 1991, the share of
the provinces is 23%. OCD Nos. 99-005, 99-006 and 99-003 gave the provinces 40% of P2 billion of the LGSEF. OCD Nos.
2000-023 and 2001-029 apportioned 26% of P3.5 billion to the provinces. On the other hand, OCD No. 2001-001 allocated
25% of P3 billion to the provinces. Thus, the petitioner has not suffered any injury in the implementation of the assailed
provisos in the GAAs of 1999, 2000 and 2001 and the OCD resolutions.

The Ruling of the Court

Procedural Issues

Before resolving the petition on its merits, the Court shall first rule on the following procedural issues raised by the
respondents: (1) whether the petitioner has legal standing or locus standi to file the present suit; (2) whether the petition
involves factual questions that are properly cognizable by the lower courts; and (3) whether the issue had been rendered
moot and academic.

The petitioner has locus standi

to maintain the present suit

The gist of the question of standing is whether a party has alleged such a personal stake in the outcome of the controversy
as to assure that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends
for illumination of difficult constitutional questions.[9] Accordingly, it has been held that the interest of a party assailing
the constitutionality of a statute must be direct and personal. Such party must be able to show, not only that the law or
any government act is invalid, but also that he has sustained or is in imminent danger of sustaining some direct injury as
a result of its enforcement, and not merely that he suffers thereby in some indefinite way. It must appear that the person
complaining has been or is about to be denied some right or privilege to which he is lawfully entitled or that he is about
to be subjected to some burdens or penalties by reason of the statute or act complained of. [10]

The Court holds that the petitioner possesses the requisite standing to maintain the present suit. The petitioner, a local
government unit, seeks relief in order to protect or vindicate an interest of its own, and of the other LGUs. This interest
pertains to the LGUs share in the national taxes or the IRA. The petitioners constitutional claim is, in substance, that the
assailed provisos in the GAAs of 1999, 2000 and 2001, and the OCD resolutions contravene Section 6, Article X of the
Constitution, mandating the automatic release to the LGUs of their share in the national taxes. Further, the injury that the
petitioner claims to suffer is the diminution of its share in the IRA, as provided under Section 285 of the Local Government
Code of 1991, occasioned by the implementation of the assailed measures. These allegations are sufficient to grant the
petitioner standing to question the validity of the assailed provisos in the GAAs of 1999, 2000 and 2001, and the OCD
resolutions as the petitioner clearly has a plain, direct and adequate interest in the manner and distribution of the IRA
among the LGUs.

The petition involves a significant

legal issue

The crux of the instant controversy is whether the assailed provisos contained in the GAAs of 1999, 2000 and 2001, and
the OCD resolutions infringe the Constitution and the Local Government Code of 1991. This is undoubtedly a legal
question. On the other hand, the following facts are not disputed:

1. The earmarking of five billion pesos of the IRA for the LGSEF in the assailed provisos in the GAAs of 1999, 2000 and re-
enacted budget for 2001;

2. The promulgation of the assailed OCD resolutions providing for the allocation schemes covering the said five billion
pesos and the implementing rules and regulations therefor; and

3. The release of the LGSEF to the LGUs only upon their compliance with the implementing rules and regulations, including
the guidelines and mechanisms, prescribed by the Oversight Committee.

Considering that these facts, which are necessary to resolve the legal question now before this Court, are no longer in
issue, the same need not be determined by a trial court. [11] In any case, the rule on hierarchy of courts will not prevent
this Court from assuming jurisdiction over the petition. The said rule may be relaxed when the redress desired cannot be
obtained in the appropriate courts or where exceptional and compelling circumstances justify availment of a remedy
within and calling for the exercise of this Courts primary jurisdiction. [12]

The crucial legal issue submitted for resolution of this Court entails the proper legal interpretation of constitutional and
statutory provisions. Moreover, the transcendental importance of the case, as it necessarily involves the application of
the constitutional principle on local autonomy, cannot be gainsaid. The nature of the present controversy, therefore,
warrants the relaxation by this Court of procedural rules in order to resolve the case forthwith.

The substantive issue needs to be resolved

notwithstanding the supervening events

Granting arguendo that, as contended by the respondents, the resolution of the case had already been overtaken by
supervening events as the IRA, including the LGSEF, for 1999, 2000 and 2001, had already been released and the
government is now operating under a new appropriations law, still, there is compelling reason for this Court to resolve
the substantive issue raised by the instant petition. Supervening events, whether intended or accidental, cannot prevent
the Court from rendering a decision if there is a grave violation of the Constitution. [13] Even in cases where supervening
events had made the cases moot, the Court did not hesitate to resolve the legal or constitutional issues raised to formulate
controlling principles to guide the bench, bar and public. [14]

Another reason justifying the resolution by this Court of the substantive issue now before it is the rule that courts will
decide a question otherwise moot and academic if it is capable of repetition, yet evading review.[15] For the GAAs in the
coming years may contain provisos similar to those now being sought to be invalidated, and yet, the question may not be
decided before another GAA is enacted. It, thus, behooves this Court to make a categorical ruling on the substantive issue
now.

Substantive Issue

As earlier intimated, the resolution of the substantive legal issue in this case calls for the application of a most important
constitutional policy and principle, that of local autonomy. [16] In Article II of the Constitution, the State has expressly
adopted as a policy that:

Section 25. The State shall ensure the autonomy of local governments.

An entire article (Article X) of the Constitution has been devoted to guaranteeing and promoting the autonomy of
LGUs. Section 2 thereof reiterates the State policy in this wise:

Section 2. The territorial and political subdivisions shall enjoy local autonomy.
Consistent with the principle of local autonomy, the Constitution confines the Presidents power over the LGUs to one of
general supervision.[17] This provision has been interpreted to exclude the power of control. The distinction between the
two powers was enunciated in Drilon v. Lim:[18]

An officer in control lays down the rules in the doing of an act. If they are not followed, he may, in his discretion, order
the act undone or re-done by his subordinate or he may even decide to do it himself.Supervision does not cover such
authority. The supervisor or superintendent merely sees to it that the rules are followed, but he himself does not lay down
such rules, nor does he have the discretion to modify or replace them. If the rules are not observed, he may order the
work done or re-done but only to conform to the prescribed rules. He may not prescribe his own manner for doing the
act. He has no judgment on this matter except to see to it that the rules are followed. [19]

The Local Government Code of 1991[20] was enacted to flesh out the mandate of the Constitution. [21] The State policy on
local autonomy is amplified in Section 2 thereof:

Sec. 2. Declaration of Policy. (a) It is hereby declared the policy of the State that the territorial and political subdivisions of
the State shall enjoy genuine and meaningful local autonomy to enable them to attain their fullest development as self-
reliant communities and make them more effective partners in the attainment of national goals. Toward this end, the
State shall provide for a more responsive and accountable local government structure instituted through a system of
decentralization whereby local government units shall be given more powers, authority, responsibilities, and
resources. The process of decentralization shall proceed from the National Government to the local government units.

Guided by these precepts, the Court shall now determine whether the assailed provisos in the GAAs of 1999, 2000 and
2001, earmarking for each corresponding year the amount of five billion pesos of the IRA for the LGSEF and the OCD
resolutions promulgated pursuant thereto, transgress the Constitution and the Local Government Code of 1991.

The assailed provisos in the GAAs of 1999, 2000

and 2001 and the OCD resolutions violate the

constitutional precept on local autonomy

Section 6, Article X of the Constitution reads:

Sec. 6. Local government units shall have a just share, as determined by law, in the national taxes which shall
be automatically released to them.

When parsed, it would be readily seen that this provision mandates that (1) the LGUs shall have a just share in the national
taxes; (2) the just share shall be determined by law; and (3) the just share shall be automatically released to the LGUs.

The Local Government Code of 1991, among its salient provisions, underscores the automatic release of the LGUs just
share in this wise:

Sec. 18. Power to Generate and Apply Resources. Local government units shall have the power and authority to establish
an organization that shall be responsible for the efficient and effective implementation of their development plans,
program objectives and priorities; to create their own sources of revenue and to levy taxes, fees, and charges which shall
accrue exclusively for their use and disposition and which shall be retained by them; to have a just share in national taxes
which shall be automatically and directly released to them without need of further action;

...

Sec. 286. Automatic Release of Shares. (a) The share of each local government unit shall be released, without need of any
further action, directly to the provincial, city, municipal or barangay treasurer, as the case may be, on a quarterly basis
within five (5) days after the end of each quarter, and which shall not be subject to any lien or holdback that may be
imposed by the national government for whatever purpose.

(b) Nothing in this Chapter shall be understood to diminish the share of local government units under existing laws.
Websters Third New International Dictionary defines automatic as involuntary either wholly or to a major extent so that
any activity of the will is largely negligible; of a reflex nature; without volition; mechanical; like or suggestive of an
automaton. Further, the word automatically is defined as in an automatic manner: without thought or conscious intention.
Being automatic, thus, connotes something mechanical, spontaneous and perfunctory. As such, the LGUs are not required
to perform any act to receive the just share accruing to them from the national coffers. As emphasized by the Local
Government Code of 1991, the just share of the LGUs shall be released to them without need of further action. Construing
Section 286 of the LGC, we held in Pimentel, Jr. v. Aguirre,[22] viz:

Section 4 of AO 372 cannot, however, be upheld. A basic feature of local fiscal autonomy is the automatic release of the
shares of LGUs in the National internal revenue. This is mandated by no less than the Constitution. The Local Government
Code specifies further that the release shall be made directly to the LGU concerned within five (5) days after every quarter
of the year and shall not be subject to any lien or holdback that may be imposed by the national government for whatever
purpose. As a rule, the term SHALL is a word of command that must be given a compulsory meaning. The provision is,
therefore, IMPERATIVE.

Section 4 of AO 372, however, orders the withholding, effective January 1, 1998, of 10 percent of the LGUs IRA pending
the assessment and evaluation by the Development Budget Coordinating Committee of the emerging fiscal situation in
the country. Such withholding clearly contravenes the Constitution and the law. Although temporary, it is equivalent to a
holdback, which means something held back or withheld, often temporarily. Hence, the temporary nature of the retention
by the national government does not matter. Any retention is prohibited.

In sum, while Section 1 of AO 372 may be upheld as an advisory effected in times of national crisis, Section 4 thereof has
no color of validity at all. The latter provision effectively encroaches on the fiscal autonomy of local
governments. Concededly, the President was well-intentioned in issuing his Order to withhold the LGUs IRA, but the rule
of law requires that even the best intentions must be carried out within the parameters of the Constitution and the
law. Verily, laudable purposes must be carried out by legal methods. [23]

The just share of the LGUs is incorporated as the IRA in the appropriations law or GAA enacted by Congress annually. Under
the assailed provisos in the GAAs of 1999, 2000 and 2001, a portion of the IRA in the amount of five billion pesos was
earmarked for the LGSEF, and these provisos imposed the condition that such amount shall be released to the local
government units subject to the implementing rules and regulations, including such mechanisms and guidelines for the
equitable allocations and distribution of said fund among local government units subject to the guidelines that may be
prescribed by the Oversight Committee on Devolution. Pursuant thereto, the Oversight Committee, through the assailed
OCD resolutions, apportioned the five billion pesos LGSEF such that:

For 1999

P2 billion - allocated according to Sec. 285 LGC

P2 billion - Modified Sharing Formula (Provinces 40%;

Cities 20%; Municipalities 40%)

P1 billion projects (LAAP) approved by OCD.[24]

For 2000

P3.5 billion Modified Sharing Formula (Provinces 26%;

Cities 23%; Municipalities 35%; Barangays 16%);

P1.5 billion projects (LAAP) approved by the OCD.[25]

For 2001

P3 billion Modified Sharing Formula (Provinces 25%;

Cities 25%; Municipalities 35%; Barangays 15%)

P1.9 billion priority projects

P100 million capability building fund.[26]

Significantly, the LGSEF could not be released to the LGUs without the Oversight Committees prior approval. Further, with
respect to the portion of the LGSEF allocated for various projects of the LGUs (P1 billion for 1999; P1.5 billion for 2000
and P2 billion for 2001), the Oversight Committee, through the assailed OCD resolutions, laid down guidelines and
mechanisms that the LGUs had to comply with before they could avail of funds from this portion of the LGSEF. The
guidelines required (a) the LGUs to identify the projects eligible for funding based on the criteria laid down by the Oversight
Committee; (b) the LGUs to submit their project proposals to the DILG for appraisal; (c) the project proposals that passed
the appraisal of the DILG to be submitted to the Oversight Committee for review, evaluation and approval. It was only
upon approval thereof that the Oversight Committee would direct the DBM to release the funds for the projects.

To the Courts mind, the entire process involving the distribution and release of the LGSEF is constitutionally impermissible.
The LGSEF is part of the IRA or just share of the LGUs in the national taxes. To subject its distribution and release to the
vagaries of the implementing rules and regulations, including the guidelines and mechanisms unilaterally prescribed by
the Oversight Committee from time to time, as sanctioned by the assailed provisos in the GAAs of 1999, 2000 and 2001
and the OCD resolutions, makes the release not automatic, a flagrant violation of the constitutional and statutory mandate
that the just share of the LGUs shall be automatically released to them. The LGUs are, thus, placed at the mercy of the
Oversight Committee.

Where the law, the Constitution in this case, is clear and unambiguous, it must be taken to mean exactly what it says, and
courts have no choice but to see to it that the mandate is obeyed. [27] Moreover, as correctly posited by the petitioner, the
use of the word shall connotes a mandatory order. Its use in a statute denotes an imperative obligation and is inconsistent
with the idea of discretion.[28]

Indeed, the Oversight Committee exercising discretion, even control, over the distribution and release of a portion of the
IRA, the LGSEF, is an anathema to and subversive of the principle of local autonomy as embodied in the Constitution.
Moreover, it finds no statutory basis at all as the Oversight Committee was created merely to formulate the rules and
regulations for the efficient and effective implementation of the Local Government Code of 1991 to ensure compliance
with the principles of local autonomy as defined under the Constitution. [29] In fact, its creation was placed under the title
of Transitory Provisions, signifying its ad hoc character. According to Senator Aquilino Q. Pimentel, the principal author
and sponsor of the bill that eventually became Rep. Act No. 7160, the Committees work was supposed to be done a year
from the approval of the Code, or on October 10, 1992.[30] The Oversight Committees authority is undoubtedly limited to
the implementation of the Local Government Code of 1991, not to supplant or subvert the same. Neither can it exercise
control over the IRA, or even a portion thereof, of the LGUs.

That the automatic release of the IRA was precisely intended to guarantee and promote local autonomy can be gleaned
from the discussion below between Messrs. Jose N. Nolledo and Regalado M. Maambong, then members of the 1986
Constitutional Commission, to wit:

MR. MAAMBONG. Unfortunately, under Section 198 of the Local Government Code, the existence of subprovinces is still
acknowledged by the law, but the statement of the Gentleman on this point will have to be taken up probably by the
Committee on Legislation. A second point, Mr. Presiding Officer, is that under Article 2, Section 10 of the 1973 Constitution,
we have a provision which states:

The State shall guarantee and promote the autonomy of local government units, especially the barrio, to insure their
fullest development as self-reliant communities.

This provision no longer appears in the present configuration; does this mean that the concept of giving local autonomy
to local governments is no longer adopted as far as this Article is concerned?
MR. NOLLEDO. No. In the report of the Committee on Preamble, National Territory, and Declaration of Principles, that
concept is included and widened upon the initiative of Commissioner Bennagen.

MR. MAAMBONG. Thank you for that.

With regard to Section 6, sources of revenue, the creation of sources as provided by previous law was subject to limitations
as may be provided by law, but now, we are using the term subject to such guidelines as may be fixed by law. In Section
7, mention is made about the unique, distinct and exclusive charges and contributions, and in Section 8, we talk about
exclusivity of local taxes and the share in the national wealth. Incidentally, I was one of the authors of this provision, and
I am very thankful. Does this indicate local autonomy, or was the wording of the law changed to give more autonomy to
the local government units?[31]

MR. NOLLEDO. Yes. In effect, those words indicate also decentralization because local political units can collect taxes, fees
and charges subject merely to guidelines, as recommended by the league of governors and city mayors, with whom I had
a dialogue for almost two hours. They told me that limitations may be questionable in the sense that Congress may limit
and in effect deny the right later on.

MR. MAAMBONG. Also, this provision on automatic release of national tax share points to more local autonomy. Is this
the intention?

MR. NOLLEDO. Yes, the Commissioner is perfectly right.[32]

The concept of local autonomy was explained in Ganzon v. Court of Appeals[33] in this wise:

As the Constitution itself declares, local autonomy means a more responsive and accountable local government structure
instituted through a system of decentralization. The Constitution, as we observed, does nothing more than to break up
the monopoly of the national government over the affairs of local governments and as put by political adherents, to
liberate the local governments from the imperialism of Manila. Autonomy, however, is not meant to end the relation of
partnership and interdependence between the central administration and local government units, or otherwise, to usher
in a regime of federalism. The Charter has not taken such a radical step. Local governments, under the Constitution, are
subject to regulation, however limited, and for no other purpose than precisely, albeit paradoxically, to enhance self-
government.

As we observed in one case, decentralization means devolution of national administration but not power to the local
levels. Thus:

Now, autonomy is either decentralization of administration or decentralization of power. There is decentralization of

administration when the central government delegates administrative powers to political subdivisions in order to broaden
the base of government power and in the process to make local governments more responsive and accountable and
ensure their fullest development as self-reliant communities and make them more effective partners in the pursuit of
national development and social progress. At the same time, it relieves the central government of the burden of managing
local affairs and enables it to concentrate on national concerns. The President exercises general supervision over them,
but only to ensure that local affairs are administered according to law. He has no control over their acts in the sense that
he can substitute their judgments with his own.

Decentralization of power, on the other hand, involves an abdication of political power in the [sic] favor of local
governments [sic] units declared to be autonomous. In that case, the autonomous government is free to chart its own
destiny and shape its future with minimum intervention from central authorities. According to a constitutional author,
decentralization of power amounts to self-immolation, since in that event, the autonomous government becomes
accountable not to the central authorities but to its constituency. [34]

Local autonomy includes both administrative and fiscal autonomy. The fairly recent case of Pimentel v. Aguirre[35] is
particularly instructive. The Court declared therein that local fiscal autonomy includes the power of the LGUs to, inter alia,
allocate their resources in accordance with their own priorities:
Under existing law, local government units, in addition to having administrative autonomy in the exercise of their functions,
enjoy fiscal autonomy as well. Fiscal autonomy means that local governments have the power to create their own sources
of revenue in addition to their equitable share in the national taxes released by the national government, as well as the
power to allocate their resources in accordance with their own priorities. It extends to the preparation of their budgets,
and local officials in turn have to work within the constraints thereof. They are not formulated at the national level and
imposed on local governments, whether they are relevant to local needs and resources or not ... [36]

Further, a basic feature of local fiscal autonomy is the constitutionally mandated automatic release of the shares of LGUs
in the national internal revenue.[37]

Following this ratiocination, the Court in Pimentel struck down as unconstitutional Section 4 of Administrative Order (A.O.)
No. 372 which ordered the withholding, effective January 1, 1998, of ten percent of the LGUs IRA pending the assessment
and evaluation by the Development Budget Coordinating Committee of the emerging fiscal situation.

In like manner, the assailed provisos in the GAAs of 1999, 2000 and 2001, and the OCD resolutions constitute a withholding
of a portion of the IRA. They put on hold the distribution and release of the five billion pesos LGSEF and subject the same
to the implementing rules and regulations, including the guidelines and mechanisms prescribed by the Oversight
Committee from time to time. Like Section 4 of A.O. 372, the assailed provisos in the GAAs of 1999, 2000 and 2001 and
the OCD resolutions effectively encroach on the fiscal autonomy enjoyed by the LGUs and must be struck down. They
cannot, therefore, be upheld.

The assailed provisos in the GAAs of 1999, 2000

and 2001 and the OCD resolutions cannot amend

Section 285 of the Local Government Code of 1991

Section 284[38] of the Local Government Code provides that, beginning the third year of its effectivity, the LGUs share in
the national internal revenue taxes shall be 40%. This percentage is fixed and may not be reduced except in the event the
national government incurs an unmanageable public sector deficit" and only upon compliance with stringent
requirements set forth in the same section:

Sec. 284. ...

Provided, That in the event that the national government incurs an unmanageable public sector deficit, the President of
the Philippines is hereby authorized, upon recommendation of Secretary of Finance, Secretary of Interior and Local
Government and Secretary of Budget and Management, and subject to consultation with the presiding officers of both
Houses of Congress and the presidents of the liga, to make the necessary adjustments in the internal revenue allotment
of local government units but in no case shall the allotment be less than thirty percent (30%) of the collection of the
national internal revenue taxes of the third fiscal year preceding the current fiscal year; Provided, further That in the first
year of the effectivity of this Code, the local government units shall, in addition to the thirty percent (30%) internal revenue
allotment which shall include the cost of devolved functions for essential public services, be entitled to receive the amount
equivalent to the cost of devolved personnel services.

Thus, from the above provision, the only possible exception to the mandatory automatic release of the LGUs IRA is if the
national internal revenue collections for the current fiscal year is less than 40 percent of the collections of the preceding
third fiscal year, in which case what should be automatically released shall be a proportionate amount of the collections
for the current fiscal year. The adjustment may even be made on a quarterly basis depending on the actual collections of
national internal revenue taxes for the quarter of the current fiscal year. In the instant case, however, there is no allegation
that the national internal revenue tax collections for the fiscal years 1999, 2000 and 2001 have fallen compared to the
preceding three fiscal years.

Section 285 then specifies how the IRA shall be allocated among the LGUs:
Sec. 285. Allocation to Local Government Units. The share of local government units in the internal revenue allotment shall
be allocated in the following manner:

(a) Provinces Twenty-three (23%)

(b) Cities Twenty-three percent (23%);

(c) Municipalities Thirty-four (34%); and

(d) Barangays Twenty percent (20%).

However, this percentage sharing is not followed with respect to the five billion pesos LGSEF as the assailed OCD
resolutions, implementing the assailed provisos in the GAAs of 1999, 2000 and 2001, provided for a different sharing
scheme. For example, for 1999, P2 billion of the LGSEF was allocated as follows: Provinces 40%; Cities 20%; Municipalities
40%.[39] For 2000, P3.5 billion of the LGSEF was allocated in this manner: Provinces 26%; Cities 23%; Municipalities 35%;
Barangays 26%.[40] For 2001, P3 billion of the LGSEF was allocated, thus: Provinces 25%; Cities 25%; Municipalities 35%;
Barangays 15%.[41]

The respondents argue that this modification is allowed since the Constitution does not specify that the just share of the
LGUs shall only be determined by the Local Government Code of 1991. That it is within the power of Congress to enact
other laws, including the GAAs, to increase or decrease the just share of the LGUs. This contention is untenable. The Local
Government Code of 1991 is a substantive law. And while it is conceded that Congress may amend any of the provisions
therein, it may not do so through appropriations laws or GAAs. Any amendment to the Local Government Code of 1991
should be done in a separate law, not in the appropriations law, because Congress cannot include in a general
appropriation bill matters that should be more properly enacted in a separate legislation.[42]

A general appropriations bill is a special type of legislation, whose content is limited to specified sums of money dedicated
to a specific purpose or a separate fiscal unit. [43] Any provision therein which is intended to amend another law is
considered an inappropriate provision. The category of inappropriate provisions includes unconstitutional provisions and
provisions which are intended to amend other laws, because clearly these kinds of laws have no place in an appropriations
bill.[44]

Increasing or decreasing the IRA of the LGUs or modifying their percentage sharing therein, which are fixed in the Local
Government Code of 1991, are matters of general and substantive law. To permit Congress to undertake these
amendments through the GAAs, as the respondents contend, would be to give Congress the unbridled authority to unduly
infringe the fiscal autonomy of the LGUs, and thus put the same in jeopardy every year. This, the Court cannot sanction.

It is relevant to point out at this juncture that, unlike those of 1999, 2000 and 2001, the GAAs of 2002 and 2003 do not
contain provisos similar to the herein assailed provisos. In other words, the GAAs of 2002 and 2003 have not earmarked
any amount of the IRA for the LGSEF. Congress had perhaps seen fit to discontinue the practice as it recognizes its
infirmity.Nonetheless, as earlier mentioned, this Court has deemed it necessary to make a definitive ruling on the matter
in order to prevent its recurrence in future appropriations laws and that the principles enunciated herein would serve to
guide the bench, bar and public.

Conclusion

In closing, it is well to note that the principle of local autonomy, while concededly expounded in greater detail in the
present Constitution, dates back to the turn of the century when President William McKinley, in his Instructions to the
Second Philippine Commission dated April 7, 1900, ordered the new Government to devote their attention in the first
instance to the establishment of municipal governments in which the natives of the Islands, both in the cities and in the
rural communities, shall be afforded the opportunity to manage their own affairs to the fullest extent of which they are
capable, and subject to the least degree of supervision and control in which a careful study of their capacities and
observation of the workings of native control show to be consistent with the maintenance of law, order and
loyalty.[45] While the 1935 Constitution had no specific article on local autonomy, nonetheless, it limited the executive
power over local governments to general supervision ... as may be provided by law.[46] Subsequently, the 1973 Constitution
explicitly stated that [t]he State shall guarantee and promote the autonomy of local government units, especially the
barangay to ensure their fullest development as self-reliant communities.[47] An entire article on Local Government was
incorporated therein. The present Constitution, as earlier opined, has broadened the principle of local autonomy. The 14
sections in Article X thereof markedly increased the powers of the local governments in order to accomplish the goal of a
more meaningful local autonomy.

Indeed, the value of local governments as institutions of democracy is measured by the degree of autonomy that they
enjoy.[48] As eloquently put by M. De Tocqueville, a distinguished French political writer, [l]ocal assemblies of citizens
constitute the strength of free nations. Township meetings are to liberty what primary schools are to science; they bring
it within the peoples reach; they teach men how to use and enjoy it. A nation may establish a system of free governments
but without the spirit of municipal institutions, it cannot have the spirit of liberty. [49]

Our national officials should not only comply with the constitutional provisions on local autonomy but should also
appreciate the spirit and liberty upon which these provisions are based. [50]

WHEREFORE, the petition is GRANTED. The assailed provisos in the General Appropriations Acts of 1999, 2000 and 2001,
and the assailed OCD Resolutions, are declared UNCONSTITUTIONAL.

SO ORDERED.

EN BANC

[G.R. No. 110249. August 21, 1997]

ALFREDO TANO, BALDOMERO TANO, DANILO TANO, ROMUALDO TANO, TEOCENES MIDELLO, ANGEL DE MESA,
EULOGIO TREMOCHA, FELIPE ONGONION, JR., ANDRES LINIJAN, ROBERT LIM, VIRGINIA LIM, FELIMON DE MESA,
GENEROSO ARAGON, TEODORICO ANDRE, ROMULO DEL ROSARIO, CHOLITO ANDRE, ERICK MONTANO, ANDRES OLIVA,
VITTORIO SALVADOR, LEOPOLDO ARAGON, RAFAEL RIBA, ALEJANDRO LEONILA, JOSE DAMACINTO, RAMIRO MANAEG,
RUBEN MARGATE, ROBERTO REYES, DANILO PANGARUTAN, NOE GOLPAN,ESTANISLAO ROMERO, NICANOR DOMINGO,
ROLDAN TABANG, PANGANIBAN, ADRIANO TABANG, FREDDIE SACAMAY, MIGUEL TRIMOCHA, PACENCIO LABABIT,
PABLO H. OMPAD, CELESTINO A. ABANO, ALLAN ALMODAL, BILLY D. BARTOLAY, ALBINO D. LIQUE, MELCHOR J. LAYSON,
MELANI AMANTE, CLARO E. YATOC, MERGELDO B. BALDEO, EDGAR M. ALMASET A., JOSELITO MANAEG, LIBERATO
ANDRADA, JR., ROBERTO BERRY, RONALD VILLANUEVA, EDUARDO VALMORIA, WILDREDO MENDOZA, NAPOLEON
BABANGA, ROBERTO TADEPA, RUBEN ASINGUA, SILVERIO GABO, JERRY ROMERO, DAVID PANGAGARUTAN, DANIEL
PANGGARUTAN, ROMEO AGAWIN, FERNANDO EQUIZ, DITO LEQUIZ, RONILO ODERABLE, BENEDICTO TORRES, ROSITO
A. VALDEZ, CRESENCIO A. SAYANG, NICOMEDES S. ACOSTA, ERENEO A. SEGARINO, JR., WILDREDO A. RAUTO,
DIOSDADO A. ACOSTA, BONIFACIO G. SISMO, TACIO ALUBA, DANIEL B. BATERZAL, ELISEO YBAEZ, DIOSDADO E.
HANCHIC, EDDIE ESCALICAS, ELEAZAR B. BATERZAL, DOMINADOR HALICHIC, ROOSEVELT RISMO-AN, ROBERT C.
MERCADER, TIRSO ARESGADO, DANIEL CHAVEZ, DANILO CHAVEZ, VICTOR VILLAROEL, ERNESTO C. YABANEZ,
ARMANDO T. SANTILLAN, RUDY S. SANTILLAN, JODJEN ILUSTRISIMO, NESTOR SALANGRON, ALBERTO SALANGRON,
ROGER L. ROXAS, FRANCISCO T. ANTICANO, PASTOR SALANGRON, BIENVENIDO SANTILLAN, GILBUENA LADDY, FIDEL
BENJAMIN JOVELITO BELGANO, HONEY PARIOL, ANTONIO SALANGRON, NICASIO SALANGRON, & AIRLINE SHIPPERS
ASSOCIATION OF PALAWAN, petitioners, vs. GOV. SALVADOR P. SOCRATES, MEMBERS OF SANGGUNIAN
PANLALAWIGAN OF PALAWAN, namely, VICE-GOVERNOR JOEL T. REYES, JOSE D. ZABALA, ROSALINO R. ACOSTA,
JOSELITO A. CADLAON, ANDRES R. BAACO, NELSON P. PENEYRA, CIPRIANO C. BARROMA, CLARO E. ORDINARIO,
ERNESTO A. LLACUN, RODOLFO C. FLORDELIZA, GILBERT S. BAACO, WINSTON G. ARZAGA, NAPOLEON F. ORDONEZ and
GIL P. ACOSTA, CITY MAYOR EDWARD HAGEDORN, MEMBERS OF SANGGUNIANG PANLUNGSOD NG PUERTO PRINCESA,
ALL MEMBERS OF BANTAY DAGAT, MEMBERS OF PHILIPPINE NATIONAL POLICE OF PALAWAN, PROVINCIAL AND CITY
PROSECUTORS OF PALAWAN and PUERTO PRINCESA CITY, and ALL JUDGES OF PALAWAN, REGIONAL, MUNICIPAL AND
METROPOLITAN, respondents.

DECISION

DAVIDE, JR., J.:

Petitioners caption their petition as one for Certiorari, Injunction With Preliminary Mandatory Injunction,with Prayer for
Temporary Restraining Order and pray that this Court: (1) declare as unconstitutional: (a) Ordinance No. 15-92, dated 15
December 1992, of the Sangguniang Panlungsod of Puerto Princesa; (b) Office Order No. 23, Series of 1993, dated 22
January 1993, issued by Acting City Mayor Amado L. Lucero of Puerto Princesa City; and (c) Resolution No. 33, Ordinance
No. 2, Series of 1993, dated 19 February 1993, of the Sangguniang Panlalawigan of Palawan; (2) enjoin the enforcement
thereof; and (3) restrain respondents Provincial and City Prosecutors of Palawan and Puerto Princesa City and Judges of
Regional Trial Courts, Metropolitan Trial Courts [1] and Municipal Circuit Trial Courts in Palawan from assuming jurisdiction
over and hearing cases concerning the violation of the Ordinances and of the Office Order.

More appropriately, the petition is, and shall be treated as, a special civil action for certiorari and prohibition.

The following is petitioners summary of the factual antecedents giving rise to the petition:

1. On December 15, 1992, the Sangguniang Panlungsod ng Puerto Princesa City enacted Ordinance No. 15-92 which took
effect on January 1, 1993 entitled: AN ORDINANCE BANNING THE SHIPMENT OF ALL LIVE FISH AND LOBSTER OUTSIDE
PUERTO PRINCESA CITY FROM JANUARY 1, 1993 TO JANUARY 1, 1998 AND PROVIDING EXEMPTIONS, PENALTIES AND FOR
OTHER PURPOSES THEREOF, the full text of which reads as follows:

Section 1. Title of the Ordinance. - This Ordinance is entitled: AN ORDINANCE BANNING THE SHIPMENT OF ALL LIVE FISH
AND LOBSTER OUTSIDE PUERTO PRINCESA CITY FROM JANUARY 1, 1993 TO JANUARY 1, 1998 AND PROVIDING
EXEMPTIONS, PENALTIES AND FOR OTHER PURPOSES THEREOF.

Section 2. Purpose, Scope and Coverage. - To effectively free our City Sea Waters from Cyanide and other Obnoxious
substance, and shall cover all persons and/or entities operating within and outside the City of Puerto Princesa who is are
[sic] directly or indirectly in the business or shipment of live fish and lobster outside the City.

Section 3. Definition of terms. - For purpose of this Ordinance the following are hereby defined:

A. SEA BASS - A kind of fish under the family of Centropomidae, better known as APAHAP;

B. CATFISH - A kind of fish under the family of Plotosidae, better known as HITO-HITO;

C. MUDFISH - A kind of fish under the family of Orphicaphalisae better known as DALAG

D. ALL LIVE FISH - All alive, breathing not necessarily moving of all specie[s] use for food and for aquarium purposes.

E. LIVE LOBSTER - Several relatively, large marine crustaceans of the genus Homarus that are alive and breathing not
necessarily moving.

Section 4. It shall be unlawful [for] any person or any business enterprise or company to ship out from Puerto Princesa
City to any point of destination either via aircraft or seacraft of any live fish and lobster except SEA BASS, CATFISH,
MUDFISH, AND MILKFISH FRIES.

Section 5. Penalty Clause. - Any person/s and or business entity violating this Ordinance shall be penalized with a fine of
not more than P5,000.00 or imprisonment of not more than twelve (12) months, cancellation of their permit to do
business in the City of Puerto Princesa or all of the herein stated penalties, upon the discretion of the court.

Section 6. If the owner and/or operator of the establishment found vilating the provisions of this ordinance is a corporation
or a partnership, the penalty prescribed in Section 5 hereof shall be imposed upon its president and/or General Manager
or Managing Partner and/or Manager, as the case maybe [sic].
Section 7. Any existing ordinance or any provision of any ordinance inconsistent to [sic] this ordinance is deemed repealed.

Section 8. This Ordinance shall take effect on January 1, 1993.

SO ORDAINED.

xxx

2. To implement said city ordinance, then Acting City Mayor Amado L. Lucero issued Office Order No. 23, Series of 1993
dated January 22, 1993 which reads as follows:

In the interest of public service and for purposes of City Ordinance No. PD426-14-74, otherwise known as AN ORDINANCE
REQUIRING ANY PERSON ENGAGED OR INTENDING TO ENGAGE IN ANY BUSINESS, TRADE, OCCUPATION, CALLING OR
PROFESSION OR HAVING IN HIS POSSESSION ANY OF THE ARTICLES FOR WHICH A PERMIT IS REQUIRED TO BE HAD, TO
OBTAIN FIRST A MAYORS PERMIT and City Ordinance No. 15-92, AN ORDINANCE BANNING THE SHIPMENT OF ALL LIVE
FISH AND LOBSTER OUTSIDE PUERTO PRINCESA CITY FROM JANUARY 1, 1993 TO JANUARY 1, 1998, you are hereby
authorized and directed to check or conduct necessary inspections on cargoes containing live fish and lobster being
shipped out from the Puerto Princesa Airport, Puerto Princesa Wharf or at any port within the jurisdiction of the City to
any point of destinations [sic] either via aircraft or seacraft.

The purpose of the inspection is to ascertain whether the shipper possessed the required Mayors Permit issued by this
Office and the shipment is covered by invoice or clearance issued by the local office of the Bureau of Fisheries and Aquatic
Resources and as to compliance with all other existing rules and regulations on the matter.

Any cargo containing live fish and lobster without the required documents as stated herein must be held for proper
disposition.

In the pursuit of this Order, you are hereby authorized to coordinate with the PAL Manager, the PPA Manager, the local
PNP Station and other offices concerned for the needed support and cooperation.Further, that the usual courtesy and
diplomacy must be observed at all times in the conduct of the inspection.

Please be guided accordingly.

xxx

3. On February 19, 1993, the Sangguniang Panlalawigan, Provincial Government of Palawan enacted Resolution No. 33
entitled: A RESOLUTION PROHIBITING THE CATCHING, GATHERING, POSSESSING, BUYING, SELLING AND SHIPMENT OF
LIVE MARINE CORAL DWELLING AQUATIC ORGANISMS, TO WIT: FAMILY: SCARIDAE (MAMENG), EPINE PHELUS
FASCIATUS(SUNO). CROMILEPTES ALTIVELIS (PANTHER OR SENORITA), LOBSTER BELOW 200 GRAMS AND
SPAWNING, TRADACNA GIGAS (TAKLOBO), PINCTADA MARGARITEFERA(MOTHER PEARL, OYSTERS, GIANT CLAMS AND
OTHER SPECIES), PENAEUS MONODON (TIGER PRAWN-BREEDER SIZE OR MOTHER), EPINEPHELUS SUILLUS (LOBA OR
GREEN GROUPER) AND FAMILY: BALISTIDAE (TROPICAL AQUARIUM FISHES) FOR A PERIOD FIVE (5) YEARS IN AND COMING
FROM PALAWAN WATERS, the full text of which reads as follows:

WHEREAS, scientific and factual researches [sic] and studies disclose that only five (5) percent of the corals of our province
remain to be in excellent condition as [a] habitat of marine coral dwelling aquatic organisms;

WHEREAS, it cannot be gainsaid that the destruction and devastation of the corals of our province were principally due to
illegal fishing activities like dynamite fishing, sodium cyanide fishing, use of other obnoxious substances and other related
activities;

WHEREAS, there is an imperative and urgent need to protect and preserve the existence of the remaining excellent corals
and allow the devastated ones to reinvigorate and regenerate themselves into vitality within the span of five (5) years;
WHEREAS, Sec. 468, Par. 1, Sub-Par. VI of the [sic] R.A. 7160 otherwise known as the Local Government Code of 1991
empowers the Sangguniang Panlalawigan to protect the environment and impose appropriate penalties [upon] acts which
endanger the environment such as dynamite fishing and other forms of destructive fishing, among others.

NOW, THEREFORE, on motion by Kagawad Nelson P. Peneyra and upon unanimous decision of all the members present;

Be it resolved as it is hereby resolved, to approve Resolution No. 33, Series of 1993 of the Sangguniang Panlalawigan and
to enact Ordinance No. 2 for the purpose, to wit:

ORDINANCE NO. 2

Series of 1993

BE IT ORDAINED BY THE SANGGUNIANG PANLALAWIGAN IN SESSION ASSEMBLED:

Section 1. TITLE - This Ordinance shall be known as an Ordinance Prohibiting the catching, gathering, possessing, buying,
selling and shipment of live marine coral dwelling aquatic organisms, to wit: 1.Family: Scaridae (Mameng), 2. Epinephelus
Fasciatus (Suno), 3. Cromileptes altivelis (Panther or Senorita), lobster below 200 grams and spawning), 4. Tridacna Gigas
(Taklobo), 5. Pinctada Margaretefera (Mother Pearl, Oysters, Giant Clams and other species), 6. Penaeus Monodon (Tiger
Prawn-breeder size or mother), 7. Epinephelus Suillus (Loba or Green Grouper) and 8. Family: Balistidae (Topical Aquarium
Fishes) for a period of five (5) years in and coming from Palawan Waters.

Section II. PRELIMINARY CONSIDERATIONS

1. Sec. 2-A (Rep. Act 7160). It is hereby declared, the policy of the state that the territorial and political subdivisions of the
State shall enjoy genuine and meaningful local autonomy to enable them to attain their fullest development as self reliant
communities and make them more effective partners in the attainment of national goals. Toward this end, the State shall
provide for [a] more responsive and accountable local government structure instituted through a system of
decentralization whereby local government units shall be given more powers, authority, responsibilities and resources.

2. Sec. 5-A (R.A. 7160). Any provision on a power of [a] local Government Unit shall be liberaly interpreted in its favor, and
in case of doubt, any question thereon shall be resolved in favor of devolution of powers and of the lower government
units. Any fair and reasonable doubts as to the existence of the power shall be interpreted in favor of the Local
Government Unit concerned.

3. Sec. 5-C (R.A. 7160). The general welfare provisions in this Code shall be liberally interpreted to give more powers to
local government units in accelerating economic development and upgrading the quality of life for the people in the
community.

4. Sec. 16 (R.A. 7160). General Welfare. - Every local government unit shall exercise the powers expressly granted, those
necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective
governance; and those which are essential to the promotion of the general welfare.

Section III. DECLARATION OF POLICY. - It is hereby declared to be the policy of the Province of Palawan to protect and
conserve the marine resources of Palawan not only for the greatest good of the majority of the present generation but
with [the] proper perspective and consideration of [sic] their prosperity, and to attain this end, the Sangguniang
Panlalawigan henceforth declares that is [sic] shall be unlawful for any person or any business entity to engage in catching,
gathering, possessing, buying, selling and shipment of live marine coral dwelling aquatic organisms as enumerated in
Section 1 hereof in and coming out of Palawan Waters for a period of five (5) years;

Section IV. PENALTY CLAUSE. - Any person and/or business entity violating this Ordinance shall be penalized with a fine of
not more than Five Thousand Pesos (P5,000.00), Philippine Currency, and/or imprisonment of six (6) months to twelve
(12) months and confiscation and forfeiture of paraphernalias [sic] and equipment in favor of the government at the
discretion of the Court;
Section V. SEPARABILITY CLAUSE. - If for any reason, a Section or provision of this Ordinance shall be held as unconditional
[sic] or invalid, it shall not affect the other provisions hereof.

Section VI. REPEALING CLAUSE. - Any existing Ordinance or a provision of any ordinance inconsistent herewith is deemed
modified, amended or repealed.

Section VII. EFFECTIVITY. - This Ordinance shall take effect ten (10) days after its publication.

SO ORDAINED.

xxx

4. The respondents implemented the said ordinances, Annexes A and C hereof thereby depriving all the fishermen of the
whole province of Palawan and the City of Puerto Princesa of their only means of livelihood and the petitioners Airline
Shippers Association of Palawan and other marine merchants from performing their lawful occupation and trade;

5. Petitioners Alfredo Tano, Baldomero Tano, Teocenes Midello, Angel de Mesa, Eulogio Tremocha, and Felipe Ongonion,
Jr. were even charged criminally under criminal case no. 93-05-C in the 1st Municipal Circuit Trial Court of Cuyo-Agutaya-
Magsaysay, an original carbon copy of the criminal complaint dated April 12, 1993 is hereto attached as Annex D; while
xerox copies are attached as Annex D to the copies of the petition;

6. Petitioners Robert Lim and Virginia Lim, on the other hand, were charged by the respondent PNP with the respondent
City Prosecutor of Puerto Princesa City, a xerox copy of the complaint is hereto attached as Annex E;

Without seeking redress from the concerned local government units, prosecutors office and courts, petitioners directly
invoked our original jurisdiction by filing this petition on 4 June 1993. In sum, petitioners contend that:

First, the Ordinances deprived them of due process of law, their livelihood, and unduly restricted them from the practice
of their trade, in violation of Section 2, Article XII and Sections 2 and 7 of Article XIII of the 1987 Constitution.

Second, Office Order No. 23 contained no regulation nor condition under which the Mayors permit could be granted or
denied; in other words, the Mayor had the absolute authority to determine whether or not to issue permit.

Third, as Ordinance No. 2 of the Province of Palawan altogether prohibited the catching, gathering, possession, buying,
selling and shipping of live marine coral dwelling organisms, without any distinction whether it was caught or gathered
through lawful fishing method, the Ordinance took away the right of petitioners-fishermen to earn their livelihood in
lawful ways; and insofar as petitioners-members of Airline Shippers Association are concerned, they were unduly
prevented from pursuing their vocation and entering into contracts which are proper, necessary, and essential to carry
out their business endeavors to a successful conclusion.

Finally, as Ordinance No. 2 of the Sangguniang Panlalawigan is null and void, the criminal cases based thereon against
petitioners Tano and the others have to be dismissed.

In the Resolution of 15 June 1993 we required respondents to comment on the petition, and furnished the Office of the
Solicitor General with a copy thereof.

In their comment filed on 13 August 1993, public respondents Governor Socrates and Members of the Sangguniang
Panlalawigan of Palawan defended the validity of Ordinance No.2, Series of 1993, as a valid exercise of the Provincial
Governments power under the general welfare clause (Section 16 of the Local Government Code of 1991 [hereafter, LGC]),
and its specific power to protect the environment and impose appropriate penalties for acts which endanger the
environment, such as dynamite fishing and other forms of destructive fishing under Section 447 (a) (1) (vi), Section 458 (a)
(1) (vi), and Section 468 (a) (1) (vi), of the LGC. They claimed that in the exercise of such powers, the Province of Palawan
had the right and responsibilty to insure that the remaining coral reefs, where fish dwells [sic], within its territory remain
healthy for the future generation. The Ordinance, they further asserted, covered only live marine coral dwelling aquatic
organisms which were enumerated in the ordinance and excluded other kinds of live marine aquatic organisms not
dwelling in coral reefs; besides the prohibition was for only five (5) years to protect and preserve the pristine coral and
allow those damaged to regenerate.

Aforementioned respondents likewise maintained that there was no violation of due process and equal protection clauses
of the Constitution. As to the former, public hearings were conducted before the enactment of the Ordinance which,
undoubtedly, had a lawful purpose and employed reasonable means; while as to the latter, a substantial distinction existed
between a fisherman who catches live fish with the intention of selling it live, and a fisherman who catches live fish with
no intention at all of selling it live, i.e., the former uses sodium cyanide while the latter does not. Further, the Ordinance
applied equally to all those belonging to one class.

On 25 October 1993 petitioners filed an Urgent Plea for the Immediate Issuance of a Temporary Restraining Order claiming
that despite the pendency of this case, Branch 50 of the Regional Trial Court of Palawan was bent on proceeding with
Criminal Case No. 11223 against petitioners Danilo Tano, Alfredo Tano, Eulogio Tremocha, Romualdo Tano, Baldomero
Tano, Andres Lemihan and Angel de Mesa for violation of Ordinance No. 2 of the Sangguniang Panlalawigan of
Palawan. Acting on said plea, we issued on 11 November 1993 a temporary restraining order directing Judge Angel Miclat
of said court to cease and desist from proceeding with the arraignment and pre-trial of Criminal Case No. 11223.

On 12 July 1994, we excused the Office of the Solicitor General from filing a comment, considering that as claimed by said
office in its Manifestation of 28 June 1994, respondents were already represented by counsel.

The rest of the respondents did not file any comment on the petition.

In the resolution of 15 September 1994, we resolved to consider the comment on the petition as the Answer, gave due
course to the petition and required the parties to submit their respective memoranda. [2]

On 22 April 1997 we ordered impleaded as party respondents the Department of Agriculture and the Bureau of Fisheries
and Aquatic Resources and required the Office of the Solicitor General to comment on their behalf. But in light of the
latters motion of 9 July 1997 for an extension of time to file the comment which would only result in further delay, we
dispensed with said comment.

After due deliberation on the pleadings filed, we resolved to dismiss this petition for want of merit, on 22 July 1997, and
assigned it to the ponente for the writing of the opinion of the Court.

There are actually two sets of petitioners in this case. The first is composed of Alfredo Tano, Baldomero Tano, Danilo Tano,
Romualdo Tano, Teocenes Midello, Angel de Mesa, Eulogio Tremocha, Felipe Ongonion, Jr., Andres Linijan, and Felimon
de Mesa, who were criminally charged with violating Sangguniang Panlalawigan Resolution No. 33 and Ordinance No. 2,
Series of 1993, of the Province of Palawan, in Criminal Case No. 93-05-C of the 1st Municipal Circuit Trial Court (MCTC) of
Palawan;[3] and Robert Lim and Virginia Lim who were charged with violating City Ordinance No. 15-92 of Puerto Princesa
City and Ordinance No. 2, Series of 1993, of the Province of Palawan before the Office of the City Prosecutor of Puerto
Princesa.[4] All of them, with the exception of Teocenes Midello, Felipe Ongonion, Jr., Felimon de Mesa, Robert Lim and
Virginia Lim, are likewise the accused in Criminal Case No. 11223 for the violation of Ordinance No. 2 of the Sangguniang
Panlalawigan of Palawan, pending before Branch 50 of the Regional Trial Court of Palawan. [5]

The second set of petitioners is composed of the rest of the petitioners numbering seventy-seven (77), all of whom, except
the Airline Shippers Association of Palawan -- an alleged private association of several marine merchants -- are natural
persons who claim to be fishermen.

The primary interest of the first set of petitioners is, of course, to prevent the prosecution, trial and determination of the
criminal cases until the constitutionality or legality of the Ordinances they allegedly violated shall have been resolved. The
second set of petitioners merely claim that they being fishermen or marine merchants, they would be adversely affected
by the ordinances.
As to the first set of petitioners, this special civil for certiorari must fail on the ground of prematurity amounting to a lack
of cause of action. There is no showing that the said petitioners, as the accused in the criminal cases, have filed motions
to quash the informations therein and that the same were denied. The ground available for such motions is that the facts
charged therein do not constitute an offense because the ordinances in question are unconstitutional. [6] It cannot then be
said that the lower courts acted without or in excess of jurisdiction or with grave abuse of discretion to justify recourse to
the extraordinary remedy of certiorari or prohibition. It must further be stressed that even if the petitioners did file
motions to quash, the denial thereof would not forthwith give rise to a cause of action under Rule 65 of the Rules of
Court. The general rule is that where a motion to quash is denied, the remedy therefrom is not certiorari, but for the party
aggrieved thereby to go to trial without prejudice to reiterating special defenses involved in said motion, and if, after trial
on the merits of adverse decision is rendered, to appeal therefrom in the manner authorized by law. [7] And , even where
in an exceptional circumstance such denial may be the subject of a special civil action for certiorari, a motion for
reconsideration must have to be filed to allow the court concerned an opportunity to correct its errors, unless such motion
may be dispensed with because of existing exceptional circumstances. [8] Finally, even if a motion for reconsideration has
been filed and denied, the remedy under Rule 65 is still unavailable absent any showing of the grounds provided for in
Section 1 thereof.[9] For obvious reasons, the petition at bar does not, and could not have , alleged any of such grounds.

As to the second set of petitioners, the instant petition is obviously one for DECLARATORY RELIEF, i.e., for a declaration
that the Ordinances in question are a nullity ... for being unconstitutional. [10] As such, their petition must likewise fail, as
this Court is not possessed of original jurisdiction over petitions for declaratory relief even if only questions of law are
involved,[11] it being settled that the Court merely exercises appellate jurisdiction over such petitions.[12]

II

Even granting arguendo that the first set of petitioners have a cause of action ripe for the extraordinary writ of certiorari,
there is here a clear disregard of the hierarchy of courts, and no special and important reason or exceptional or compelling
circumstance has been adduced why direct recourse to us should be allowed. While we have concurrent jurisdiction with
Regional Trial courts and with the Court of Appeals to issue writs of certiorari, prohibition, mandamus, quo warranto,
habeas corpus and injunction, such concurrence gives petitioners no unrestricted freedom of choice of court forum, so
we held in People v. Cuaresma:[13]

This concurrence of jurisdiction is not to be taken as according to parties seeking any of the writs an absolute unrestrained
freedom of choice of the court to which application therefor will be directed. There is after all hierarchy of courts. That
hierarchy is determinative of the venue of appeals, and should also serve as a general determinant of the appropriate
forum for petitions for the extraordinary writs. A becoming regard for that judicial hierarchy most certainly indicates that
petitions for the issuance of extraordinary writs against first level (inferior) courts should be filed with the Regional Trial
Court, and those against the latter, with the Court of Appeals. A direct invocation of the Supreme Courts original
jurisdiction to issue these writs should be allowed only when there are special and important reasons therefor, clearly and
specifically set out in the petition. This is established policy. It is a policy necessary to prevent inordinate demands upon
the Courts time and attention which are better devoted to those matters within its exclusive jurisdiction, and to prevent
further over-crowding of the Courts docket.

The Court feels the need to reaffirm that policy at this time, and to enjoin strict adherence thereto in the light of what it
perceives to be a growing tendency on the part of litigants and lawyers to have their applications for the so-called
extraordinary writs, and sometimes even their appeals, passed upon and adjudicated directly and immediately by the
highest tribunal of the land.

In Santiago v. Vasquez,[14] this Court forcefully expressed that the propensity of litigants and lawyers to disregard the
hierarchy of courts must be put to a halt, not only because of the imposition upon the precious time of this Court, but also
because of the inevitable and resultant delay, intended or otherwise, in the adjudication of the case which often has to
be remanded or referred to the lower court, the proper forum under the rules of procedure, or as better equipped to
resolve the issues since this Court is not a trier of facts. We reiterated the judicial policy that this Court will not entertain
direct resort to it unless the redress desired cannot be obtained in the appropriate courts or where exceptional and
compelling circumstances justify availment of a remedy within and calling for the exercise of [its] primary jurisdiction.

III

Notwithstanding the foregoing procedural obstacles against the first set of petitioners, we opt to resolve this case on its
merits considering that the lifetime of the challenged Ordinances is about to end. Ordinance No. 15-92 of the City of
Puerto Princesa is effective only up to 1 January 1998, while Ordinance No. 2 of the Province of Palawan, enacted on 19
February 1993, is effective for only five (5) years. Besides, these Ordinances were undoubtedly enacted in the exercise of
powers under the new LGC relative to the protection and preservation of the environment and are thus novel and of
paramount importance. No further delay then may be allowed in the resolution of the issues raised.

It is of course settled that laws (including ordinances enacted by local government units) enjoy the presumption of
constitutionality.[15] To overthrow this presumption, there must be a clear and unequivocal breach of the Constitution, not
merely a doubtful or argumentative contradiction. In short, the conflict with the Constitution must be shown beyond
reasonable doubt.[16] Where doubt exists, even if well founded, there can be no finding of unconstitutionality. To doubt is
to sustain.[17]

After a scrunity of the challenged Ordinances and the provisions of the Constitution petitioners claim to have been
violated, we find petitioners contentions baseless and so hold that the former do not suffer from any infirmity, both under
the Constitution and applicable laws.

Petitioners specifically point to Section 2, Article XII and Sections 2 and 7, Article XIII of the Constitution as having been
transgressed by the Ordinances.

The pertinent portion of Section 2 of Article XII reads:

SEC. 2. x x x

The State shall protect the nation's marine wealth in its archipelagic waters, territorial sea, and exclusive economic zone,
and reserve its use and enjoyment exclusively to Filipino citizens.

The Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens, as well as cooperative fish
farming, with priority to subsistence fishermen and fishworkers in rivers, lakes, bays, and lagoons.

Sections 2 and 7 of Article XIII provide:

Sec. 2. The promotion of social justice shall include the commitment to create economic opportunities based on freedom
of initiative and self-reliance.

xxx

SEC. 7. The State shall protect the rights of subsistence fishermen, especially of local communities, to the preferential use
of the communal marine and fishing resources, both inland and offshore. It shall provide support to such fishermen
through appropriate technology and research, adequate financial, production, and marketing assistance, and other
services. The State shall also protect, develop, and conserve such resources. The protection shall extend to offshore fishing
grounds of subsistence fishermen against foreign intrusion. Fishworkers shall receive a just share from their labor in the
utilization of marine and fishing resources.

There is absolutely no showing that any of the petitioners qualifies as a subsistence or marginal fisherman. In their petition,
petitioner Airline Shippers Association of Palawan is described as a private association composed of Marine Merchants;
petitioners Robert Lim and Virginia Lim, as merchants; while the rest of the petitioners claim to be fishermen, without any
qualification, however, as to their status.

Since the Constitution does not specifically provide a definition of the terms subsistence or marginal fishermen, [18] they
should be construed in their general and ordinary sense. A marginal fisherman is an individual engaged in fishing whose
margin of return or reward in his harvest of fish as measured by existing price levels is barely sufficient to yield a profit or
cover the cost of gathering the fish, [19] while a subsistence fisherman is one whose catch yields but the irreducible
minimum for his livelihood.[20] Section 131(p) of the LGC (R.A. No. 7160) defines a marginal farmer or fisherman as
an individual engaged in subsistence farming or fishing which shall be limited to the sale, barter or exchange of agricultural
or marine products produced by himself and his immediate family. It bears repeating that nothing in the record supports
a finding that any petitioner falls within these definitions.

Besides, Section 2 of Article XII aims primarily not to bestow any right to subsistence fishermen, but to lay stress on the
duty of the State to protect the nations marine wealth. What the provision merely recognizes is that the State may allow,
by law, cooperative fish farming, with priority to subsistence fishermen and fishworkers in rivers, lakes, bays, and lagoons.
Our survey of the statute books reveals that the only provision of law which speaks of the preferential right of marginal
fishermen is Section 149 of the LGC of 1991 which pertinently provides:

SEC. 149. Fishery Rentals, Fees and Charges. -- x x x

(b) The sangguniang bayan may:

(1) Grant fishery privileges to erect fish corrals, oyster, mussels or other aquatic beds or bangus fry areas, within a definite
zone of the municipal waters, as determined by it: Provided, however, That duly registered organizations and cooperatives
of marginal fishermen shall have preferential right to such fishery privileges ....

In a Joint Administrative Order No. 3, dated 25 April 1996, the Secretary of the Department of Agriculture and the Secretary
of the Department of Interior and Local Government prescribed the guidelines on the preferential treatment of small
fisherfolk relative to the fishery right mentioned in Section 149. This case, however, does not involve such fishery right.

Anent Section 7 of Article XIII, it speaks not only of the use of communal marine and fishing resources, but of their
protection, development, and conservation. As hereafter shown, the ordinances in question are meant precisely to
protect and conserve our marine resources to the end that their enjoyment by the people may be guaranteed not only
for the present generation, but also for the generations to come.

The so-called preferential right of subsistence or marginal fishermen to the use of marine resources is not at all absolute. In
accordance with the Regalian Doctrine, marine resources belong to the State, and, pursuant to the first paragraph of
Section 2, Article XII of the Constitution, their exploration, development and utilization ... shall be under the full control
and supervision of the State. Moreover, their mandated protection, development, and conservation as necessarily
recognized by the framers of the Constitution, imply certain restrictions on whatever right of enjoyment there may be in
favor of anyone. Thus, as to the curtailment of the preferential treatment of marginal fisherman, the following exchange
between Commissioner Francisco Rodrigo and Commissioner Jose F.S. Bengzon, Jr., took place at the plenary session of
the Constitutional Commission:

MR. RODRIGO:

Let us discuss the implementation of this because I would not raise the hopes of our people, and afterwards fail in the
implementation. How will this be implemented? Will there be a licensing or giving of permits so that government officials
will know that one is really a marginal fisherman? Or if policeman say that a person is not a marginal fisherman, he can
show his permit, to prove that indeed he is one.

MR. BENGZON:

Certainly, there will be some mode of licensing insofar as this is concerned and this particular question could be tackled
when we discuss the Article on Local Governments -- whether we will leave to the local governments or to Congress on
how these things will be implemented. But certainly, I think our Congressmen and our local officials will not be bereft of
ideas on how to implement this mandate.

xxx
MR. RODRIGO:

So, once one is licensed as a marginal fisherman, he can go anywhere in the Philippines and fish in any fishing grounds.

MR. BENGZON:

Subject to whatever rules and regulations and local laws that may be passed, may be existing or will be
passed.[21] (underscoring supplied for emphasis).

What must likewise be borne in mind is the state policy enshrined in the Constitution regarding the duty of the State to
protect and advance the right of the people to a balanced and healthful ecology in accord with the rhythm and harmony
of nature.[22] On this score, in Oposa v. Factoran,[23] this Court declared:

While the right to balanced and healthful ecology is to be found under the Declaration of Principles the State Policies and
not under the Bill of Rights, it does not follow that it is less important than any of the civil and political rights enumerated
in the latter. Such a right belongs to a different category of rights altogether for it concerns nothing less than self-
preservation and self-perpetuation - aptly and fittingly stressed by the petitioners - the advancement of which may even
be said to predate all governments and constitutions. As a matter of fact, these basic rights need not even be written in
the Constitution for they are assumed to exist from the inception of humankind. If they are now explicitly mentioned in
the fundamental charter, it is because of the well-founded fear of its framers that unless the rights to a balanced and
healthful ecology and to health are mandated as state policies by the Constitution itself, thereby highlighting their
continuing importance and imposing upon the state a solemn obligation to preserve the first and protect and advance the
second , the day would not be too far when all else would be lost not only for the present generation, but also for those
to come - generations which stand to inherit nothing but parched earth incapable of sustaining life.

The right to a balanced and healthful ecology carries with it a correlative duty to refrain from impairing the environment ...

The LGC provisions invoked by private respondents merely seek to give flesh and blood to the right of the people to a
balanced and healthful ecology. In fact, the General Welfare Clause, expressly mentions this right:

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

Moreover, Section 5(c) of the LGC explicitly mandates that the general welfare provisions of the LGC shall be liberally
interpreted to give more powers to the local government units in accelerating economic development and upgrading the
quality of life for the people of the community.

The LGC vests municipalities with the power to grant fishery privileges in municipal waters and to impose rentals, fees or
charges therefor; to penalize, by appropriate ordinances, the use of explosives, noxious or poisonous substances,
electricity, muro-ami, and other deleterious methods of fishing; and to prosecute any violation of the provisions of
applicable fishery laws.[24] Further, the sangguniang bayan, the sangguniang panlungsod and the sangguniang
panlalawigan are directed to enact ordinances for the general welfare of the municipality and its inhabitants, which shall
include, inter alia, ordinances that [p]rotect the environment and impose appropriate penalties for acts which endanger
the environment such as dynamite fishing and other forms of destructive fishing ... and such other activities which result
in pollution, acceleration of eutrophication of rivers and lakes or of ecological imbalance. [25]

Finally, the centerpiece of LGC is the system of decentralization [26] as expressly mandated by the
Constitution.[27] Indispensable thereto is devolution and the LGC expressly provides that [a]ny provision on a power of a
local government unit shall be liberally interpreted in its favor, and in case of doubt, any question thereon shall be resolved
in favor of devolution of powers and of the lower local government unit. Any fair and reasonable doubt as to the existence
of the power shall be interpreted in favor of the local government unit concerned, [28]Devolution refers to the act by which
the National Government confers power and authority upon the various local government units to perform specific
functions and responsibilities.[29]

One of the devolved powers enumerated in the section of the LGC on devolution is the enforcement of fishery laws in
municipal waters including the conservation of mangroves.[30] This necessarily includes enactment of ordinances to
effectively carry out such fishery laws within the municipal waters.

The term municipal waters, in turn, include not only streams, lakes, and tidal waters within the municipality, not being the
subject of private ownership and not comprised within the national parks, public forest, timber lands, forest reserves, or
fishery reserves, but also marine waters included between two lines drawn perpendicularly to the general coastline from
points where the boundary lines of the municipality or city touch the sea at low tide and a third line parallel with the
general coastline and fifteen kilometers from it.[31] Under P.D. No. 704, the marine waters included in municipal waters is
limited to three nautical miles from the general coastline using the above perpendicular lines and a third parallel line.

These fishery laws which local government units may enforce under Section 17(b), (2), (i) in municipal waters include: (1)
P.D. No. 704; (2) P.D. No. 1015 which, inter alia, authorizes the establishment of a closed season in any Philippine water if
necessary for conservation or ecological purposes; (3) P.D. No. 1219 which provides for the exploration, exploitation,
utilization, and conservation of coral resources; (4) R.A. No. 5474, as amended by B.P. Blg. 58, which makes it unlawful for
any person, association, or corporation to catch or cause to be caught, sell, offer to sell, purchase, or have in possession
any of the fish specie called gobiidae or ipon during closed season; and (5) R.A. No. 6451 which prohibits and punishes
electrofishing, as well as various issuances of the BFAR.

To those specifically devolved insofar as the control and regulation of fishing in municipal waters and the protection of its
marine environment are concerned, must be added the following:

1. Issuance of permits to construct fish cages within municipal waters;

2. Issuance of permits to gather aquarium fishes within municipal waters;

3. Issuance of permits to gather kapis shells within municipal waters;

4. Issuance of permits to gather/culture shelled mollusks within municipal waters;

5. Issuance of licenses to establish seaweed farms within municipal waters;

6. Issuance of licenses to establish culture pearls within municipal waters;

7. Issuance of auxiliary invoice to transport fish and fishery products; and

8. Establishment of closed season in municipal waters.

These functions are covered in the Memorandum of Agreement of 5 April 1994 between the Department of Agriculture
and the Department of Interior and Local Government.

In light then of the principles of decentralization and devolution enshrined in the LGC and the powers granted to local
government units under Section 16 (the General Welfare Clause), and under Sections 149, 447 (a) (1) (vi), 458 (a) (1) (vi)
and 468 (a) (1) (vi), which unquestionably involve the exercise of police power, the validity of the questioned Ordinances
cannot be doubted.

Parenthetically, we wish to add that these Ordinances find full support under R.A. No. 7611, otherwise known as the
Strategic Environmental Plan (SEP) for Palawan Act, approved on 19 July 1992. This statute adopts a comprehensive
framework for the sustainable development of Palawan compatible with protecting and enhancing the natural resources
and endangered environment of the province, which shall serve to guide the local government of Palawan and the
government agencies concerned in the formulation and implementation of plans, programs and projects affecting said
province.[32]

At this time then, it would be appropriate to determine the relation between the assailed Ordinances and the aforesaid
powers of the Sangguniang Panlungsod of the City of Puerto Princesa and the Sangguniang Panlalawigan of the Province
of Palawan to protect the environment. To begin, we ascertain the purpose of the Ordinances as set forth in the statement
of purposes or declaration of policies quoted earlier.

It is clear to the Court that both Ordinances have two principal objectives or purposes: (1) to establish a closed season for
the species of fish or aquatic animals covered therein for a period of five years, and (2) to protect the corals of the marine
waters of the City of Puerto Princesa and the Province of Palawan from further destruction due to illegal fishing activities.

The accomplishment of the first objective is well within the devolved power to enforce fishery laws in municipal waters,
such as P.D. No. 1015, which allows the establishment of closed seasons. The devolution of such power has been expressly
confirmed in the Memorandum of Agreement of 5 April 1994 between the Department of Agriculture and the Department
of Interior and Local Government.

The realization of the second objective falls within both the general welfare clause of the LGC and the express mandate
thereunder to cities and provinces to protect the environment and impose appropriate penalties for acts which endanger
the environment.[33]

The destruction of the coral reefs results in serious, if not irreparable, ecological imbalance, for coral reefs are among the
natures life-support systems.[34] They collect, retain, and recycle nutrients for adjacent nearshore areas such as mangroves,
seagrass beds, and reef flats; provide food for marine plants and animals; and serve as a protective shelter for aquatic
organisms.[35] It is said that [e]cologically, the reefs are to the oceans what forests are to continents: they are shelter and
breeding grounds for fish and plant species that will disappear without them. [36]

The prohibition against catching live fish stems, in part, from the modern phenomenon of live-fish trade which entails the
catching of so-called exotic tropical species of fish not only for aquarium use in the West, but also for the market for live
banquet fish [which] is virtually insatiable in ever more affluent Asia. [37] These exotic species are coral-dwellers, and
fishermen catch them by diving in shallow water with corraline habitats and squirting sodium cyanide poison at passing
fish directly or onto coral crevices; once affected the fish are immobilized [merely stunned] and then scooped by
hand.[38] The diver then surfaces and dumps his catch into a submerged net attached to the skiff . Twenty minutes later,
the fish can swim normally.Back on shore, they are placed in holding pens, and within a few weeks, they expel the cyanide
from their system and are ready to be hauled. Then they are placed in saltwater tanks or packaged in plastic bags filled
with seawater for shipment by air freight to major markets for live food fish.[39] While the fish are meant to survive, the
opposite holds true for their former home as [a]fter the fisherman squirts the cyanide, the first thing to perish is the reef
algae, on which fish feed. Days later, the living coral starts to expire. Soon the reef loses its function as habitat for the fish,
which eat both the algae and invertebrates that cling to the coral. The reef becomes an underwater graveyard, its skeletal
remains brittle, bleached of all color and vulnerable to erosion from the pounding of the waves. [40] It has been found that
cyanide fishing kills most hard and soft corals within three months of repeated application. [41]

The nexus then between the activities barred by Ordinance No. 15-92 of the City of Puerto Princesa and the prohibited acts
provided in Ordinance No. 2, Series of 1993 of the Province of Palawan, on one hand, and the use of sodium cyanide, on
the other, is painfully obvious. In sum, the public purpose and reasonableness of the Ordinances may not then be
controverted.

As to Office Order No. 23, Series of 1993, issued by Acting City Mayor Amado L. Lucero of the City of Puerto Princesa, we
find nothing therein violative of any constitutional or statutory provision. The Order refers to the implementation of the
challenged ordinance and is not the Mayors Permit.

The dissenting opinion of Mr. Justice Josue N. Bellosillo relies upon the lack of authority on the part of the Sangguniang
Panlungsod of Puerto Princesa to enact Ordinance No. 15, Series of 1992, on the theory that the subject thereof is within
the jurisdiction and responsibility of the Bureau of Fisheries and Aquatic Resources (BFAR) under P.D. No. 704, otherwise
known as the Fisheries Decree of 1975; and that, in any event, the Ordinance is unenforceable for lack of approval by the
Secretary of the Department of Natural Resources (DNR), likewise in accordance with P.D. No. 704.

The majority is unable to accommodate this view. The jurisdiction and responsibility of the BFAR under P. D. no. 704, over
the management, conservation, development, protection, utilization and disposition of all fishery and aquatic resources
of the country is not all-encompassing. First, Section 4 thereof excludes from such jurisdiction and responsibility municipal
waters, which shall be under the municipal or city government concerned, except insofar as fishpens and seaweed culture
in municipal in municipal centers are concerned. This section provides, however, that all municipal or city ordinances and
resolutions affecting fishing and fisheries and any disposition thereunder shall be submitted to the Secretary of the
Department of Natural Resources for appropriate action and shall have full force and effect only upon his approval. [42]

Second, it must at once be pointed out that the BFAR is no longer under the Department of Natural Resources (now
Department of Environment and Natural Resources). Executive Order No. 967 of 30 June 1984 transferred the BFAR from
the control and supervision of the Minister (formerly Secretary) of Natural Resources to the Ministry of Agriculture and
Food (MAF) and converted it into a mere staff agency thereof, integrating its functions with the regional offices of the
MAF.

In Executive Order No. 116 of 30 January 1987, which reorganized the MAF, the BFAR was retained as an attached agency
of the MAF. And under the Administrative Code of 1987, [43]the BFAR is placed under the Title concerning the Department
of Agriculture.[44]

Therefore, it is incorrect to say that the challenged Ordinance of the City of Puerto Princesa is invalid or unenforceable
because it was not approved by the Secretary of the DENR. If at all, the approval that should be sought would be that of
the Secretary of the Department of Agriculture (not DENR) of municipal ordinances affecting fishing and fisheries in
municipal waters has been dispensed with in view of the following reasons:

(1) Section 534 (Repealing Clause) of the LGC expressly repeals or amends Section 16 and 29 of P.D. No. 704[45] insofar that
they are inconsistent with the provisions of the LGC.

(2) As discussed earlier, under the general welfare clause of the LGC, local government units have the power, inter alia, to
enact ordinances to enhance the right of the people to a balanced ecology. It likewise specifically vests municipalities with
the power to grant fishery privileges in municipal waters, and impose rentals, fees or charges therefor; to penalize, by
appropriate ordinances, the use of explosives, noxious or poisonous substances, electricity, muro-ami, and other
deleterious methods of fishing; and to prosecute other methods of fishing; and to prosecute any violation of the provisions
of applicable fishing laws.[46] Finally, it imposes upon the sangguniang bayan, the sangguniang panlungsod, and
the sangguniang panlalawigan the duty to enact ordinances to [p]rotect the environment and impose appropriate
penalties for acts which endanger the environment such as dynamite fishing and other forms of destructive fishing and
such other activities which result in pollution, acceleration of eutrophication of rivers and lakes or of ecological
imbalance.[47]

In closing, we commend the Sangguniang Panlungsod of the City of Puerto Princesa and Sangguniang Panlalawigan of
the Province of Palawan for exercising the requisite political will to enact urgently needed legislation to protect and
enhance the marine environment, thereby sharing in the herculean task of arresting the tide of ecological destruction. We
hope that other local government units shall now be roused from their lethargy and adopt a more vigilant stand in the
battle against the decimation of our legacy to future generations. At this time, the repercussions of any further delay in
their response may prove disastrous, if not, irreversible.

WHEREFORE, the instant petition is DISMISSED for lack of merit and the temporary restraining order issued on 11
November 1993 is LIFTED.

No pronouncement as to costs.

SO ORDERED.
EN BANC

G.R. No. 175368 April 11, 2013

LEAGUE OF PROVINCES OF THE PHILIPPINES, Petitioner,

vs.
DEPARTMENT OF ENVIRONMENT and NATURAL RESOURCES and HON. ANGELO T. REYES, in his capacity as Secretary of
DENR, Respondents.

DECISION

PERALTA, J.:

This is a petition for certiorari, prohibition and mandamus, 1 praying that this Court order the following: ( 1) declare as
unconstitutional Section 17(b)(3)(iii) of Republic Act (R.A.) No. 7160, otherwise known as The Local Government Code of
1991 and Section 24 of Republic Act (R.A.) No. 7076, otherwise known as the People's Small-Scale Mining Act of 1991; (2)
prohibit and bar respondents from exercising control over provinces; and (3) declare as illegal the respondent Secretary
of the Department of Energy and Natural Resources' (DENR) nullification, voiding and cancellation of the Small-Scale
Mining permits issued by the Provincial Governor of Bulacan.

The Facts are as follows:

On March 28, 1996, Golden Falcon Mineral Exploration Corporation (Golden Falcon) filed with the DENR Mines and
Geosciences Bureau Regional Office No. III (MGB R-III) an Application for Financial and Technical Assistance Agreement
(FTAA) covering an area of 61,136 hectares situated in the Municipalities of San Miguel, San Ildefonso, Norzagaray and
San Jose del Monte, Bulacan.2

On April 29, 1998, the MGB R-III issued an Order denying Golden Falcon's Application for Financial and Technical Assistance
Agreement for failure to secure area clearances from the Forest Management Sector and Lands Management Sector of
the DENR Regional Office No. III.3

On November 11, 1998, Golden Falcon filed an appeal with the DENR Mines and Geosciences Bureau Central Office (MGB-
Central Office), and sought reconsideration of the Order dated April 29, 1998. 4

On February 10, 2004, while Golden Falcon's appeal was pending, Eduardo D. Mercado, Benedicto S. Cruz, Gerardo R. Cruz
and Liberato Sembrano filed with the Provincial Environment and Natural Resources Office (PENRO) of Bulacan their
respective Applications for Quarry Permit (AQP), which covered the same area subject of Golden Falcon's Application for
Financial and Technical Assistance Agreement.5

On July 16, 2004, the MGB-Central Office issued an Order denying Golden Falcon's appeal and affirming the MGB R-III's
Order dated April 29, 1998.

On September 13, 2004, Atlantic Mines and Trading Corporation (AMTC) filed with the PENRO of Bulacan an Application
for Exploration Permit (AEP) covering 5,281 hectares of the area covered by Golden Falcon's Application for Financial and
Technical Assistance Agreement.6

On October 19, 2004, DENR-MGB Director Horacio C. Ramos, in response to MGB R-III Director Arnulfo V. Cabantog's
memorandum query dated September 8, 2004, categorically stated that the MGB-Central Office's Order dated July 16,
2004 became final on August 11, 2004, fifteen (15) days after Golden Falcon received the said Order, per the Certification
dated October 8, 2004 issued by the Postmaster II of the Philippine Postal Corporation of Cainta, Rizal. 7

Through letters dated May 5 and May 10, 2005, AMTC notified the PENRO of Bulacan and the MGB R-III Director,
respectively, that the subject Applications for Quarry Permit fell within its (AMTC's) existing valid and prior Application for
Exploration Permit, and the the former area of Golden Falcon was open to mining location only on August 11, 2004 per
the Memorandum dated October 19, 2004 of the MGB Director, Central Office. 8
On June 24, 2005, Ricardo Medina, Jr., PENRO of Bulacan, indorsed AMTC's letter to the Provincial Legal Officer, Atty.
Eugenio F. Resurreccion, for his legal opinion on which date of denial of Golden Falcon's application/appeal April 29,
1998 or July 16, 2004 is to be considered in the deliberation of the Provincial Mining Regulatory Board (PMRB) for the
purpose of determining when the land subject of the Applications for Quarry Permit could be considered open for
application.

On June 28, 2005, Provincial Legal Officer Eugenio Resurreccion issued a legal opinion stating that the Order dated July 16,
2004 of the MGB-Central Office was a mere reaffirmation of the Order dated April 29, 1998 of the MGB R-III; hence, the
Order dated April 29, 1998 should be the reckoning period of the denial of the application of Golden Falcon.

On July 22, 2005, AMTC filed with the PMRB of Bulacan a formal protest against the aforesaid Applications for Quarry
Permit on the ground that the subject area was already covered by its Application for Exploration Permit.9

On August 8, 2005, MGB R-III Director Cabantog, who was the concurrent Chairman of the PMRB, endorsed to the
Provincial Governor of Bulacan, Governor Josefina M. dela Cruz, the aforesaid Applications for Quarry Permit that had
apparently been converted to Applications for Small-Scale Mining Permit of Eduardo D. Mercado, Benedicto S. Cruz,
Gerardo R. Cruz and Lucila S. Valdez (formerly Liberato Sembrano).10

On August 9, 2005, the PENRO of Bulacan issued four memoranda recommending to Governor Dela Cruz the approval of
the aforesaid Applications for Small-Scale Mining Permit.11

On August 10, 2005, Governor Dela Cruz issued the corresponding Small-Scale Mining Permits in favor of Eduardo D.
Mercado, Benedicto S. Cruz, Gerardo R. Cruz and Lucila S. Valdez. 12

Subsequently, AMTC appealed to respondent DENR Secretary the grant of the aforesaid Small-Scale Mining Permits,
arguing that: (1) The PMRB of Bulacan erred in giving due course to the Applications for Small-Scale Mining Permit without
first resolving its formal protest; (2) The areas covered by the Small-Scale Mining Permits fall within the area covered by
AMTC's valid prior Application for Exploration Permit; (3) The Applications for Quarry Permit were illegally converted to
Applications for Small-Scale Mining Permit; (4) DENR-MGB Director Horacio C. Ramos' ruling that the subject areas became
open for mining location only on August 11, 2004 was controlling; (5) The Small-Scale Mining Permits were null and void
because they covered areas that were never declared People's Small-Scale Mining Program sites as mandated by Section
4 of the People's Small-Scale Mining Act of 1991; and (6) Iron ore is not considered as one of the quarry resources, as
defined by Section 43 of the Philippine Mining Act of 1995, which could be subjects of an Application for Quarry Permit. 13

On August 8, 2006, respondent DENR Secretary rendered a Decision 14 in favor of AMTC. The DENR Secretary agreed with
MGB Director Horacio C. Ramos that the area was open to mining location only on August 11, 2004, fifteen (15) days after
the receipt by Golden Falcon on July 27, 2004 of a copy of the MGB-Central Office's Order dated July 16, 2004, which Order
denied Golden Falcon's appeal. According to the DENR Secretary, the filing by Golden Falcon of the letter-appeal
suspended the finality of the Order of denial issued on April 29, 1998 by the Regional Director until the resolution of the
appeal on July 16, 2004 by the MGB-Central Office. He stated that the Applications for Quarry Permit were filed on
February 10, 2004 when the area was still closed to mining location; hence, the Small-Scale Mining Permits granted by the
PMRB and the Governor were null and void. On the other hand, the DENR Secretary declared that AMTC filed its
Application for Exploration Permit when the area was already open to other mining applicants; thus, AMTCs Application
for Exploration Permit was valid. Moreover, the DENR Secretary held that the questioned Small-Scale Mining Permits were
issued in violation of Section 4 of R.A. No. 7076 and beyond the authority of the Provincial Governor pursuant to Section
43 of R.A. No. 7942, because the area was never proclaimed to be under the People's Small-Scale Mining Program. Further,
the DENR Secretary stated that iron ore mineral is not considered among the quarry resources.

The dispositive portion of the DENR Secretarys Decision reads:

WHEREFORE, the Application for Exploration Permit, AEP-III-02-04 of Atlantic Mines and Trading Corp. is declared valid
and may now be given due course. The Small-Scale Mining Permits, SSMP-B-002-05 of Gerardo Cruz, SSMP-B-003-05 of
Eduardo D. Mercado, SSMP-B-004-05 of Benedicto S. Cruz and SSMP-B-005-05 of Lucila S. Valdez are declared NULL AND
VOID. Consequently, the said permits are hereby CANCELLED. 15

Hence, petitioner League of Provinces filed this petition.

Petitioner is a duly organized league of local governments incorporated under R.A. No. 7160. Petitioner declares that it is
composed of 81 provincial governments, including the Province of Bulacan. It states that this is not an action of one
province alone, but the collective action of all provinces through the League, as a favorable ruling will not only benefit one
province, but all provinces and all local governments.

Petitioner raises these issues:

WHETHER OR NOT SECTION 17(B)(3)(III) OF THE, 1991 LOCAL GOVERNMENT CODE AND SECTION 24 OF THE PEOPLE'S
SMALL-SCALE MINING ACT OF 1991 ARE UNCONSTITUTIONAL FOR PROVIDING FOR EXECUTIVE CONTROL AND
INFRINGING UPON THE LOCAL AUTONOMY OF PROVINCES.

II

WHETHER OR NOT THE ACT OF RESPONDENT [DENR] IN NULLIFYING, VOIDING AND CANCELLING THE SMALL-SCALE
MINING PERMITS AMOUNTS TO EXECUTIVE CONTROL, NOT MERELY SUPERVISION AND USURPS THE DEVOLVED POWERS
OF ALL PROVINCES.16

To start, the Court finds that petitioner has legal standing to file this petition because it is tasked under Section 504 of the
Local Government Code of 1991 to promote local autonomy at the provincial level; 17 adopt measures for the promotion
of the welfare of all provinces and its officials and employees; 18 and exercise such other powers and perform such other
duties and functions as the league may prescribe for the welfare of the provinces. 19

Before this Court determines the validity of an act of a co-equal and coordinate branch of the Government, it bears
emphasis that ingrained in our jurisprudence is the time-honored principle that a statute is presumed to be valid. 20 This
presumption is rooted in the doctrine of separation of powers which enjoins upon the three coordinate departments of
the Government a becoming courtesy for each other's acts.21 This Court, however, may declare a law, or portions thereof,
unconstitutional where a petitioner has shown a clear and unequivocal breach of the Constitution, 22 leaving no doubt or
hesitation in the mind of the Court.23

In this case, petitioner admits that respondent DENR Secretary had the authority to nullify the Small-Scale Mining Permits
issued by the Provincial Governor of Bulacan, as the DENR Secretary has control over the PMRB, and the implementation
of the Small-Scale Mining Program is subject to control by respondent DENR.

Control of the DENR/DENR Secretary over small-scale mining in the provinces is granted by three statutes: (1) R.A. No.
7061 or The Local Government Code of 1991; (2) R.A. No. 7076 or the People's Small Scale Mining Act of 1991; and (3) R.A.
No. 7942, otherwise known as the Philippine Mining Act of 1995. 24 The pertinent provisions of law sought to be declared
as unconstitutional by petitioner are as follows:

R.A. No. 7061 (The Local Government Code of 1991)

SEC. 17. Basic Services and Facilities. - (a) Local government units shall endeavor to be self-reliant and shall continue
exercising the powers and discharging the duties and functions currently vested upon them. They shall also discharge the
functions and responsibilities of national agencies and offices devolved to them pursuant to this Code. Local government
units shall likewise exercise such other powers and discharge such other functions and responsibilities as are necessary,
appropriate, or incidental to efficient and effective provision of the basic services and facilities enumerated herein.

(b) Such basic services and facilities include, but are not limited to, the following:

xxxx
(3) For a Province:c

xxxx

(iii) Pursuant to national policies and subject to supervision, control and review of the DENR, enforcement of forestry laws
limited to community-based forestry projects, pollution control law, small-scale mining law, and other laws on the
protection of the environment; and mini-hydro electric projects for local purposes; x x x25

R.A. No. 7076 (People's Small-Scale Mining Act of 1991)

Sec. 24. Provincial/City Mining Regulatory Board. - There is hereby created under the direct supervision and control of the
Secretary a provincial/city mining regulatory board, herein called the Board, which shall be the implementing agency of
the Department, and shall exercise the following powers and functions, subject to review by the Secretary:

(a) Declare and segregate existing gold-rush areas for small-scale mining;

(b) Reserve future gold and other mining areas for small-scale mining;

(c) Award contracts to small-scale miners;

(d) Formulate and implement rules and regulations related to small-scale mining;

(e) Settle disputes, conflicts or litigations over conflicting claims within a peoples small-scale mining area, an area that is
declared a small-mining; and

(f) Perform such other functions as may be necessary to achieve the goals and objectives of this Act. 26

Petitioner contends that the aforecited laws and DENR Administrative Order No. 9640 (the Implementing Rules and
Regulations of the Philippine Mining Act of 1995) did not explicitly confer upon respondents DENR and the DENR Secretary
the power to reverse, abrogate, nullify, void, or cancel the permits issued by the Provincial Governor or small-scale mining
contracts entered into by the PMRB. The statutes are also silent as to the power of respondent DENR Secretary to
substitute his own judgment over that of the Provincial Governor and the PMRB.

Moreover, petitioner contends that Section 17 (b)(3)(iii) of the Local Government Code of 1991 and Section 24 of R.A. No.
7076, which confer upon respondents DENR and the DENR Secretary the power of control are unconstitutional, as the
Constitution states that the President (and Executive Departments and her alter-egos) has the power of supervision only,
not control, over acts of the local government units, and grants the local government units autonomy, thus:

The 1987 Constitution:

Article X, Section 4. The President of the Philippines shall exercise general supervision over local governments. Provinces
with respect to component cities and municipalities, and cities and municipalities with respect to component barangays,
shall ensure that the acts of their component units are within the scope of their prescribed powers and functions. 27

Petitioner contends that the policy in the above-cited constitutional provision is mirrored in the Local Government Code,
which states:

SEC. 25. National Supervision over Local Government Units. - (a) Consistent with the basic policy on local autonomy, the
President shall exercise general supervision over local government units to ensure that their acts are within the scope of
their prescribed powers and functions.

The President shall exercise supervisory authority directly over provinces, highly urbanized cities, and independent
component cities; through the province with respect to component cities and municipalities; and through the city and
municipality with respect to barangays.28

Petitioner contends that the foregoing provisions of the Constitution and the Local Government Code of 1991 show that
the relationship between the President and the Provinces or respondent DENR, as the alter ego of the President, and the
Province of Bulacan is one of executive supervision, not one of executive control. The term "control" has been defined as
the power of an officer to alter or modify or set aside what a subordinate officer had done in the performance of his/her
duties and to substitute the judgment of the former for the latter, while the term "supervision" is the power of a superior
officer to see to it that lower officers perform their function in accordance with law. 29

Petitioner argues that respondent DENR Secretary went beyond mere executive supervision and exercised control when
he nullified the small-scale mining permits granted by the Provincial Governor of Bulacan, as the former substituted the
judgment of the latter.

Petitioner asserts that what is involved here is a devolved power.

Under the Local Government Code of 1991, the power to regulate small-scale mining has been devolved to all provinces.
In the exercise of devolved powers, departmental approval is not necessary. 30

Petitioner contends that if the provisions in Section 24 of R.A. No. 7076 and Section 17 (b)(3)(iii) of the Local Government
Code of 1991 granting the power of control to the DENR/DENR Secretary are not nullified, nothing would stop the DENR
Secretary from nullifying, voiding and canceling the small-scale mining permits that have been issued by a Provincial
Governor.

Petitioner submits that the statutory grant of power of control to respondents is unconstitutional, as the Constitution only
allows supervision over local governments and proscribes control by the executive departments.

In its Comment, respondents, represented by the Office of the Solicitor General, stated that contrary to the assertion of
petitioner, the power to implement the small-scale mining law is expressly limited in Section 17 (b)(3)(iii) of the Local
Government Code, which provides that it must be carried out "pursuant to national policies and subject to supervision,
control and review of the DENR." Moreover, the fact that the power to implement the small-scale mining law has not been
fully devolved to provinces is further amplified by Section 4 of the People's Small-Scale Mining Act of 1991, which provides,
among others, that the People's Small-Scale Mining Program shall be implemented by the DENR Secretary.

The petition lacks merit.

Paragraph 1 of Section 2, Article XII (National Economy and Patrimony) of the Constitution31 provides that "the exploration,
development and utilization of natural resources shall be under the full control and supervision of the State."

Moreover, paragraph 3 of Section 2, Article XII of the Constitution provides that "the Congress may, by law, allow small-
scale utilization of natural resources by Filipino citizens x x x."

Pursuant to Section 2, Article XII of the Constitution, R.A. No. 7076 or the People's Small-Scale Mining Act of 1991, was
enacted, establishing under Section 4 thereof a People's Small-Scale Mining Program to be implemented by the DENR
Secretary in coordination with other concerned government agencies.

The People's Small-Scale Mining Act of 1991 defines "small-scale mining" as "refer[ring] to mining activities, which rely
heavily on manual labor using simple implement and methods and do not use explosives or heavy mining equipment."32

It should be pointed out that the Administrative Code of 198733 provides that the DENR is, subject to law and higher
authority, in charge of carrying out the State's constitutional mandate, under Section 2, Article XII of the Constitution, to
control and supervise the exploration, development, utilization and conservation of the country's natural resources. Hence,
the enforcement of small-scale mining law in the provinces is made subject to the supervision, control and review of the
DENR under the Local Government Code of 1991, while the Peoples Small-Scale Mining Act of 1991 provides that the
Peoples Small-Scale Mining Program is to be implemented by the DENR Secretary in coordination with other concerned
local government agencies.

Indeed, Section 4, Article X (Local Government) of the Constitution states that "[t]he President of the Philippines shall
exercise general supervision over local governments," and Section 25 of the Local Government Code reiterates the same.
General supervision by the President means no more than seeing to it that laws are faithfully executed or that subordinate
officers act within the law.34

The Court has clarified that the constitutional guarantee of local autonomy in the Constitution Art. X, Sec. 2 refers to the
administrative autonomy of local government units or, cast in more technical language, the decentralization of
government authority.35 It does not make local governments sovereign within the State. 36 Administrative autonomy may
involve devolution of powers, but subject to limitations like following national policies or standards, 37 and those provided
by the Local Government Code, as the structuring of local governments and the allocation of powers, responsibilities, and
resources among the different local government units and local officials have been placed by the Constitution in the hands
of Congress38 under Section 3, Article X of the Constitution.

Section 3, Article X of the Constitution mandated Congress to "enact a local government code which shall provide for a
more responsive and accountable local government structure instituted through a system of decentralization with
effective mechanisms of recall, initiative, and referendum, allocate among the different local government units their
powers, responsibilities, and resources, and provide for the qualifications, election, appointment and removal, term,
salaries, powers and functions and duties of local officials, and all other matters relating to the organization and operation
of the local units."

In connection with the enforcement of the small-scale mining law in the province, Section 17 of the Local Government
Code provides:

SEC. 17. Basic Services and Facilities. - (a) Local government units shall endeavor to be self-reliant and shall continue
exercising the powers and discharging the duties and functions currently vested upon them. They shall also discharge the
functions and responsibilities of national agencies and offices devolved to them pursuant to this Code. Local government
units shall likewise exercise such other powers and discharge such other functions and responsibilities as are necessary,
appropriate, or incidental to efficient and effective provision of the basic services and facilities enumerated herein.

(b) Such basic services and facilities include, but are not limited to, the following:

xxxx

(3) For a Province:c

xxxx

(iii) Pursuant to national policies and subject to supervision, control and review of the DENR, enforcement of forestry laws
limited to community-based forestry projects, pollution control law, small-scale mining law, and other laws on the
protection of the environment; and mini-hydro electric projects for local purposes;39

Clearly, the Local Government Code did not fully devolve the enforcement of the small-scale mining law to the provincial
government, as its enforcement is subject to the supervision, control and review of the DENR, which is in charge, subject
to law and higher authority, of carrying out the State's constitutional mandate to control and supervise the exploration,
development, utilization of the country's natural resources.40

Section 17 (b)(3)(iii) of the Local Government Code of 1991 is in harmony with R.A. No. 7076 or the People's Small-Scale
Mining Act of 1991,41 which established a People's Small-Scale Mining Program to be implemented by the Secretary of the
DENR, thus:

Sec. 2. Declaration of Policy. It is hereby declared of the State to promote, develop, protect and rationalize viable small-
scale mining activities in order to generate more employment opportunities and provide an equitable sharing of the
nation's wealth and natural resources, giving due regard to existing rights as herein provided.

xxxx

Sec. 4. People's Small-Scale Mining Program. - For the purpose of carrying out the declared policy provided in Section 2
hereof, there is hereby established a People's Small-Scale Mining Program to be implemented by the Secretary of the
Department of Environment and Natural Resources, hereinafter called the Department, in coordination with other
concerned government agencies, designed to achieve an orderly, systematic and rational scheme for the small-scale
development and utilization of mineral resources in certain mineral areas in order to address the social, economic,
technical, and environmental problems connected with small-scale mining activities.

xxxx

Sec. 24. Provincial/City Mining Regulatory Board. There is hereby created under the direct supervision and control of the
Secretary a provincial/city mining regulatory board, herein called the Board, which shall be the implementing agency of
the Department, and shall exercise the following powers and functions, subject to review by the Secretary:

(a) Declare and segregate existing gold-rush areas for small-scale mining;

(b) Reserve future gold and other mining areas for small-scale mining;

(c) Award contracts to small-scale miners;

(d) Formulate and implement rules and regulations related to small-scale mining;

(e) Settle disputes, conflicts or litigations over conflicting claims within a peoples small-scale mining area, an area that is
declared a small-mining; and

(f) Perform such other functions as may be necessary to achieve the goals and objectives of this Act. 42

DENR Administrative Order No. 34, series of 1992, containing the Rules and Regulations to implement R.A. No. 7076,
provides:

SEC. 21. Administrative Supervision over the People's Small-Scale Mining Program. The following DENR officials shall
exercise the following supervisory functions in the implementation of the Program:

21.1 DENR Secretrary direct supervision and control over the program and activities of the small-scale miners within the
people's small-scale mining area;

21.2 Director the Director shall:

a. Recommend the depth or length of the tunnel or adit taking into account the: (1) size of membership and capitalization
of the cooperative; (2) size of mineralized areas; (3) quantity of mineral deposits; (4) safety of miners; and (5)
environmental impact and other considerations;

b. Determine the right of small-scale miners to existing facilities in consultation with the operator, claimowner, landowner
or lessor of an affected area upon declaration of a small-scale mining area;

c. Recommend to the Secretary the withdrawal of the status of the people's small-scale mining area when it can no longer
be feasibly operated on a small-scale basis; and

d. See to it that the small-scale mining contractors abide by small-scale mines safety rules and regulations.

xxxx

SEC. 22. Provincial/City Mining Regulatory Board. The Provincial/City Mining Regulatory Board created under R.A. 7076
shall exercise the following powers and functions, subject to review by the Secretary:

22.1 Declares and segregates existing gold rush area for small-scale mining;

22.2 Reserves for the future, mineralized areas/mineral lands for people's small-scale mining;

22.3 Awards contracts to small-scale miners cooperative;

22.4 Formulates and implements rules and regulations related to R.A. 7076;
22.5 Settles disputes, conflicts or litigations over conflicting claims within ninety (90) days upon filing of protests or
complaints; Provided, That any aggrieved party may appeal within five (5) days from the Board's decision to the Secretary
for final resolution otherwise the same is considered final and executory; and

22.6 Performs such other functions as may be necessary to achieve the goals and objectives of R.A. 7076.

SEC. 6. Declaration of People's Small-Scale Mining Areas. The Board created under R.A. 7076 shall have the authority to
declare and set aside People's Small-Scale Mining Areas in sites onshore suitable for small-scale mining operations subject
to review by the DENR Secretary thru the Director.43

DENR Administrative Order No. 23, otherwise known as the Implementing Rules and Regulations of R.A. No. 7942,
otherwise known as the Philippine Mining Act of 1995, adopted on August 15, 1995, provides under Section 123 44 thereof
that small-scale mining applications should be filed with the PMRB 45 and the corresponding permits shall be issued by the
Provincial Governor, except small-scale mining applications within the mineral reservations.

Thereafter, DENR Administrative Order No. 96-40, otherwise known as the Revised Implementing Rules and Regulations
of R.A. No. 7942, otherwise known as the Philippine Mining Act of 1995, adopted on December 19, 1996, provides that
applications for Small-Scale Mining Permits shall be filed with the Provincial Governor/City Mayor through the concerned
Provincial/City Mining Regulatory Board for areas outside the Mineral Reservations and with the Director though the
Bureau for areas within the Mineral Reservations.46 Moreover, it provides that Local Government Units shall, in
coordination with the Bureau/ Regional Offices and subject to valid and existing mining rights, "approve applications for
small-scale mining, sand and gravel, quarry x x x and gravel permits not exceeding five (5) hectares." 47

Petitioner contends that the Local Government Code of 1991, R.A. No. 7076, DENR Administrative Orders Nos. 95-23 and
96-40 granted the DENR Secretary the broad statutory power of control, but did not confer upon the respondents DENR
and DENR Secretary the power to reverse, abrogate, nullify, void, cancel the permits issued by the Provincial Governor or
small-scale mining contracts entered into by the Board.

The contention does not persuade.

The settlement of disputes over conflicting claims in small-scale mining is provided for in Section 24 of R.A. No. 7076, thus:

Sec. 24. Provincial/City Mining Regulatory Board. There is hereby created under the direct supervision and control of the
Secretary a provincial/city mining regulatory board, herein called the Board, which shall be the implementing agency of
the Department, and shall exercise the following powers and functions, subject to review by the Secretary:

xxxx

(e) Settle disputes, conflicts or litigations over conflicting claims within a people's small-scale mining area, an area that is
declared a small mining area; x x x

Section 24, paragraph (e) of R.A. No. 7076 cited above is reflected in Section 22, paragraph 22.5 of the Implementing Rules
and Regulations of R.A. No. 7076, to wit:

SEC. 22. Provincial/City Mining Regulatory Board. The Provincial/City Mining Regulatory Board created under R.A. No.
7076 shall exercise the following powers and functions, subject to review by the Secretary:

xxxx

22.5 Settles disputes, conflicts or litigations over conflicting claims within ninety (90) days upon filing of protests or
complaints; Provided, That any aggrieved party may appeal within five (5) days from the Board's decision to the Secretary
for final resolution otherwise the same is considered final and executory; x x x

In this case, in accordance with Section 22, paragraph 22.5 of the Implementing Rules and Regulations of R.A. No. 7076,
the AMTC filed on July 22, 2005 with the PMRB of Bulacan a formal protest against the Applications for Quarry Permits of
Eduardo Mercado, Benedicto Cruz, Liberato Sembrano (replaced by Lucila Valdez) and Gerardo Cruz on the ground that
the subject area was already covered by its Application for Exploration Permit. 48However, on August 8, 2005, the PMRB
issued Resolution Nos. 05-8, 05-9, 05-10 and 05-11, resolving to submit to the Provincial Governor of Bulacan the
Applications for Small-Scale Mining Permits of Eduardo Mercado, Benedicto Cruz, Lucila Valdez and Gerardo Cruz for the
granting/issuance of the said permits.49 On August 10, 2005, the Provincial Governor of Bulacan issued the Small-Scale
Mining Permits to Eduardo Mercado, Benedicto Cruz, Lucila Valdez and Gerardo Cruz based on the legal opinion of the
Provincial Legal Officer and the Resolutions of the PMRB of Bulacan.

Hence, AMTC filed an appeal with respondent DENR Secretary, appealing from Letter-Resolution No. 05-1317 and
Resolution Nos. 05-08, 05-09, 05-10 and 05-11, all dated August 8, 2005, of the PMRB of Bulacan, which resolutions gave
due course and granted, on August 10, 2005, Small-Scale Mining Permits to Eduardo D. Mercado, Benedicto S. Cruz, Lucila
Valdez and Gerardo Cruz involving parcels of mineral land situated at Camachin, Doa Remedios Trinidad, Bulacan.

The PMRB of Bulacan filed its Answer, stating that it is an administrative body, created under R.A. No. 7076, which cannot
be equated with the court wherein a full-blown hearing could be conducted, but it is enough that the parties were given
the opportunity to present evidence. It asserted that the questioned resolutions it issued were in accordance with the
mining laws and that the Small-Scale Mining Permits granted were registered ahead of AMTC's Application for Exploration
Permit. Further, the Board stated that the Governor of Bulacan had the power to approve the Small-Scale Mining Permits
under R.A. No. 7160.

The DENR Secretary found the appeal meritorious, and resolved these pivotal issues: (1) when is the subject mining area
open for mining location by other applicants; and (2) who among the applicants have valid applications.1wphi1 The
pertinent portion of the decision of the DENR Secretary reads:

We agree with the ruling of the MGB Director that the area is open only to mining location on August 11, 2004, fifteen
(15) days after the receipt by Golden Falcon on July 27, 2004 of a copy of the subject Order of July 16, 2004.1wphi1 The
filing by Golden Falcon of the letter-appeal suspended the finality of the Order of Denial issued on April 29, 1998 by the
Regional Director until the Resolution thereof on July 16, 2004.

Although the subject AQPs/SSMPs were processed in accordance with the procedures of the PMRB, however, the AQPs
were filed on February 10, 2004 when the area is still closed to mining location. Consequently, the SSMPs granted by the
PMRB and the Governor are null and void making thereby AEP No. III-02-04 of the AMTC valid, it having been filed when
the area is already open to other mining applicants.

Records also show that the AQPs were converted into SSMPs. These are two (2) different applications. The questioned
SSMPs were issued in violation of Section 4 of RA 7076 and beyond the authority of the Provincial Governor pursuant to
Section 43 of RA 7942 because the area was never proclaimed as "People's Small-Scale Mining Program." Moreover, iron
ore mineral is not considered among the quarry resources.

xxxx

WHEREFORE, the Application for Exploration Permit, AEP-III-02-04 of Atlantic Mines and Trading Corp. is declared valid
and may now be given due course. The Small-Scale Mining Permits, SSMP-B-002-05 of Gerardo Cruz, SSMP-B-003-05 of
Eduardo D. Mercado, SSMP-B-004-05 of Benedicto S. Cruz and SSMP-B-005-05 of Lucila S. Valdez are declared NULL AND
VOID. Consequently, the said permits are hereby CANCELLED. 50

The Court finds that the decision of the DENR Secretary was rendered in accordance with the power of review granted to
the DENR Secretary in the resolution of disputes, which is provided for in Section 24 of R.A. No. 707651 and Section 22 of
its Implementing Rules and Regulations.52 It is noted that although AMTC filed a protest with the PMRB regarding its
superior and prior Application for Exploration Permit over the Applications for Quarry Permit, which were converted to
Small-Scale Mining Permits, the PMRB did not resolve the same, but issued Resolution Nos. 05-08 to 05-11 on August 8,
2005, resolving to submit to the Provincial Governor of Bulacan the Applications for Small-Scale Mining Permits of Eduardo
Mercado, Benedicto Cruz, Lucila Valdez and Gerardo Cruz for the granting of the said permits. After the Provincial
Governor of Bulacan issued the Small-Scale Mining Permits on August 10, 2005, AMTC appealed the Resolutions of the
PMRB giving due course to the granting of the Small-Scale Mining Permits by the Provincial Governor.

Hence, the decision of the DENR Secretary, declaring that the Application for Exploration Permit of AMTC was valid and
may be given due course, and canceling the Small-Scale Mining Permits issued by the Provincial Governor, emanated from
the power of review granted to the DENR Secretary under R.A. No. 7076 and its Implementing Rules and Regulations. The
DENR Secretary's power to review and, therefore, decide, in this case, the issue on the validity of the issuance of the Small-
Scale Mining Permits by the Provincial Governor as recommended by the PMRB, is a quasi-judicial function, which involves
the determination of what the law is, and what the legal rights of the contending parties are, with respect to the matter
in controversy and, on the basis thereof and the facts obtaining, the adjudication of their respective rights. 53 The DENR
Secretary exercises quasi-judicial function under R.A. No. 7076 and its Implementing Rules and Regulations to the extent
necessary in settling disputes, conflicts or litigations over conflicting claims. This quasi-judicial function of the DENR
Secretary can neither be equated with "substitution of judgment" of the Provincial Governor in issuing Small-Scale Mining
Permits nor "control" over the said act of the Provincial Governor as it is a determination of the rights of AMTC over
conflicting claims based on the law.

In determining whether Section 17 (b)(3)(iii) of the Local Government Code of 1991 and Section 24 of R.A. No. 7076 are
unconstitutional, the Court has been guided by Beltran v. The Secretary of Health, 54 which held:

The fundamental criterion is that all reasonable doubts should be resolved in favor of the constitutionality of a statute.
Every law has in its favor the presumption of constitutionality. For a law to be nullified, it must be shown that there is a
clear and unequivocal breach of the Constitution. The ground for nullity must be clear and beyond reasonable doubt.
Those who petition this Court to declare a law, or parts thereof, unconstitutional must clearly establish the basis therefor.
Otherwise, the petition must fail. 55

In this case, the Court finds that the grounds raised by petitioner to challenge the constitutionality of Section 17 (b )(3)(iii)
of the Local Government Code of 1991 and Section 24 'of R.A. No.7076 failed to overcome the constitutionality of the said
provisions of law.

WHEREFORE, the petition is DISMISSED for lack of merit.

No costs.

SO ORDERED.

EN BANC

G.R. No. 204819 April 8, 2014

JAMES M. IMBONG and LOVELY-ANN C. IMBONG, for themselves and in behalf of their minor children, LUCIA CARLOS
IMBONG and BERNADETTE CARLOS IMBONG and MAGNIFICAT CHILD DEVELOPMENT CENTER, INC., Petitioners,
vs.
HON. PAQUITO N. OCHOA, JR., Executive Secretary, HON. FLORENCIO B. ABAD, Secretary, Department of Budget and
Management, HON. ENRIQUE T. ONA, Secretary, Department of Health, HON. ARMIN A. LUISTRO, Secretary,
Department of Education, Culture and Sports and HON. MANUELA. ROXAS II, Secretary, Department of Interior and
Local Government, Respondents.

x---------------------------------x

G.R. No. 204934

ALLIANCE FOR THE FAMILY FOUNDATION PHILIPPINES, INC. [ALFI], represented by its President, Maria Concepcion S.
Noche, Spouses Reynaldo S. Luistro & Rosie B . Luistro, Jose S. Sandejas & Elenita S.A. Sandejas, Arturo M. Gorrez &
Marietta C. Gorrez, Salvador S. Mante, Jr. & Hazeleen L. Mante, Rolando M. Bautista & Maria Felisa S. Bautista,
Desiderio Racho & Traquilina Racho, F emand Antonio A. Tansingco & Carol Anne C. Tansingco for themselves and on
behalf of their minor children, Therese Antonette C. Tansingco, Lorenzo Jose C. Tansingco, Miguel F emando C.
Tangsingco, Carlo Josemaria C. Tansingco & Juan Paolo C. Tansingco, Spouses Mariano V. Araneta & Eileen Z. Araneta
for themselves and on behalf of their minor children, Ramon Carlos Z. Araneta & Maya Angelica Z. Araneta, Spouses
Renato C. Castor & Mildred C. Castor for themselves and on behalf of their minor children, Renz Jeffrey C. Castor, Joseph
Ramil C. Castor, John Paul C. Castor & Raphael C. Castor, Spouses Alexander R. Racho & Zara Z. Racho for themselves
and on behalf of their minor children Margarita Racho, Mikaela Racho, Martin Racho, Mari Racho & Manolo Racho,
Spouses Alfred R. Racho & Francine V. Racho for themselves and on behalf of their minor children Michael Racho,
Mariana Racho, Rafael Racho, Maxi Racho, Chessie Racho & Laura Racho, Spouses David R. Racho & Armilyn A. Racho
for themselves and on behalf of their minor child Gabriel Racho, Mindy M. Juatas and on behalf of her minor children
Elijah Gerald Juatas and Elian Gabriel Juatas, Salvacion M. Monteiro, Emily R. Laws, Joseph R . Laws & Katrina R.
Laws,Petitioners,
vs.
HON. PAQUITO N. OCHOA, JR., Executive Secretary, HON. ENRIQUE T. ONA, Secretary, Department of Health, HON.
ARMIN A. LUISTRO, Secretary, Department of Education, Culture and Sports, HON. CORAZON SOLIMAN, Secretary,
Department of Social Welfare and Development, HON. MANUELA. ROXAS II, Secretary, Department of Interior and Local
Government, HON. FLORENCIO B. ABAD, Secretary, Department of Budget and Management, HON. ARSENIO M.
BALISACAN, Socio-Economic Planning Secretary and NEDA Director-General, THE PHILIPPINE COMMISSION ON WOMEN,
represented by its Chairperson, Remedios lgnacio-Rikken, THE PHILIPPINE HEALTH INSURANCE CORPORATION,
represented by its President Eduardo Banzon, THE LEAGUE OF PROVINCES OF THE PHILIPPINES, represented by its
President Alfonso Umali, THE LEAGUE OF CITIES OF THE PHILIPPINES, represented by its President Oscar Rodriguez, and
THE LEAGUE OF MUNICIPALITIES OF THE PHILIPPINES, represented by its President Donato Marcos, Respondents.

x---------------------------------x

G.R. No. 204957

TASK FORCE FOR FAMILY AND LIFE VISAYAS, INC. and VALERIANO S. AVILA, Petitioners,
vs.
HON. PAQUITO N. OCHOA, JR., Executive Secretary; HON. FLORENCIO B. ABAD, Secretary, Department of Budget and
Management; HON. ENRIQUE T. ONA, Secretary, Department of Education; and HON. MANUELA. ROXAS II, Secretary,
Department of Interior and Local Government, Respondents.

x---------------------------------x

G.R. No. 204988

SERVE LIFE CAGAYAN DE ORO CITY, INC., represented by Dr. Nestor B. Lumicao, M.D., as President and in his personal
capacity, ROSEVALE FOUNDATION INC., represented by Dr. Rodrigo M. Alenton, M.D., as member of the school board
and in his personal capacity, ROSEMARIE R. ALENTON, IMELDA G. IBARRA, CPA, LOVENIAP. NACES, Phd., ANTHONY G.
NAGAC, EARL ANTHONY C. GAMBE and MARLON I. YAP,Petitioners,
vs.
OFFICE OF THE PRESIDENT, SENATE OF THE PHILIPPINES, HOUSE OF REPRESENTATIVES, HON. PAQUITO N. OCHOA, JR.,
Executive Secretary, HON. FLORENCIO B. ABAD, Secretary, Department of Budget and Management; HON. ENRIQUE T.
ONA, Secretary, Department of Health; HON. ARMIN A. LUISTRO, Secretary, Department of Education and HON.
MANUELA. ROXAS II, Secretary, Department of Interior and Local Government, Respondents.

x---------------------------------x

G.R. No. 205003

EXPEDITO A. BUGARIN, JR., Petitioner,
vs.
OFFICE OF THE PRESIDENT OF THE REPUBLIC OF THE PHILIPPINES, HON. SENATE PRESIDENT, HON. SPEAKER OF THE
HOUSE OF REPRESENTATIVES and HON. SOLICITOR GENERAL, Respondents.

x---------------------------------x

G.R. No. 205043

EDUARDO B. OLAGUER and THE CATHOLIC XYBRSPACE APOSTOLATE OF THE PHILIPPINES, Petitioners,
vs.
DOH SECRETARY ENRIQUE T. ONA, FDA DIRECTOR SUZETTE H. LAZO, DBM SECRETARY FLORENCIO B. ABAD, DILG
SECRETARY MANUELA. ROXAS II, DECS SECRETARY ARMIN A. LUISTRO, Respondents.

x---------------------------------x

G.R. No. 205138

PHILIPPINE ALLIANCE OF XSEMINARIANS, INC. (PAX), herein represented by its National President, Atty. Ricardo M .
Ribo, and in his own behalf, Atty. Lino E.A. Dumas, Romeo B. Almonte, Osmundo C. Orlanes, Arsenio Z. Menor, Samuel
J. Yap, Jaime F. Mateo, Rolly Siguan, Dante E. Magdangal, Michael Eugenio O. Plana, Bienvenido C. Miguel, Jr., Landrito
M. Diokno and Baldomero Falcone, Petitioners,
vs.
HON. PAQUITO N. OCHOA, JR., Executive Secretary, HON. FLORENCIO B. ABAD, Secretary, Department of Budget and
Management, HON. ENRIQUE T. ONA, Secretary, Department of Health, HON. ARMIN A. LUISTRO, Secretary,
Department of Education, HON. MANUELA. ROXAS II, Secretary, Department of Interior and Local Government, HON.
CORAZON J. SOLIMAN, Secretary, Department of Social Welfare and Development, HON. ARSENIO BALISACAN,
Director-General, National Economic and Development Authority, HON. SUZETTE H. LAZO, Director-General, Food and
Drugs Administration, THE BOARD OF DIRECTORS, Philippine Health Insurance Corporation, and THE BOARD OF
COMMISSIONERS, Philippine Commission on Women, Respondents.

x---------------------------------x

G.R. No. 205478

REYNALDO J. ECHAVEZ, M.D., JACQUELINE H. KING, M.D., CYNTHIA T. DOMINGO, M.D., AND JOSEPHINE MILLADO-
LUMITAO, M.D., collectively known as Doctors For Life, and ANTHONY PEREZ, MICHAEL ANTHONY G. MAPA, CARLOS
ANTONIO PALAD, WILFREDO JOSE, CLAIRE NAVARRO, ANNA COSIO, and GABRIEL DY LIACCO collectively known as
Filipinos For Life, Petitioners,
vs.
HON. PAQUITO N. OCHOA, JR., Executive Secretary; HON. FLORENCIO B. ABAD, Secretary of the Department of Budget
and Management; HON. ENRIQUE T. ONA, Secretary of the Department of Health; HON. ARMIN A. LUISTRO, Secretary
of the Department of Education; and HON. MANUELA. ROXAS II, Secretary of the Department of Interior and Local
Government, Respondents.

x---------------------------------x

G.R. No. 205491

SPOUSES FRANCISCO S. TATAD AND MARIA FENNY C. TATAD & ALA F. PAGUIA, for themselves, their Posterity, and the
rest of Filipino posterity, Petitioners,
vs.
OFFICE OF THE PRESIDENT of the Republic of the Philippines, Respondent.

x---------------------------------x
G.R. No. 205720

PRO-LIFE PHILIPPINES FOUNDATION, Inc., represented by Loma Melegrito, as Executive Director, and in her personal
capacity, JOSELYN B. BASILIO, ROBERT Z. CORTES, ARIEL A. CRISOSTOMO, JEREMY I. GATDULA, CRISTINA A. MONTES,
RAUL ANTONIO A. NIDOY, WINSTON CONRAD B. PADOJINOG, RUFINO L. POLICARPIO III, Petitioners,
vs.
OFFICE OF THE PRESIDENT, SENATE OF THE PHILIPPINES, HOUSE OF REPRESENTATIVES, HON. PAQUITO N. OCHOA, JR.,
Executive Secretary, HON. FLORENCIO B. ABAD, Secretary, Department of Budget and Management, HON. ENRIQUE T.
ONA, Secretary, Department of Health, HON. ARMIN A. LUISTRO, Secretary, Department of Education and HON.
MANUEL A. ROXAS II, Secretary, Department of Interior and Local Government, Respondents.

x---------------------------------x

G.R. No. 206355

MILLENNIUM SAINT FOUNDATION, INC., ATTY. RAMON PEDROSA, ATTY. CITA BORROMEO-GARCIA, STELLAACEDERA,
ATTY. BERTENI CATALUNA CAUSING, Petitioners,
vs.
OFFICE OF THE PRESIDENT, OFFICE OF THE EXECUTIVE SECRETARY, DEPARTMENT OF HEALTH, DEPARTMENT OF
EDUCATION, Respondents.

x---------------------------------x

G.R. No. 207111

JOHN WALTER B. JUAT, MARY M. IMBONG, ANTHONY VICTORIO B. LUMICAO, JOSEPH MARTIN Q. VERDEJO, ANTONIA
EMMA R. ROXAS and LOTA LAT-GUERRERO, Petitioners,
vs.
HON. PAQUITO N. OCHOA, JR., Executive Secretary, HON. FLORENCIO ABAD, Secretary, Department of Budget and
Management, HON. ENRIQUE T. ONA, Secretary, Department of Health, HON. ARMIN A. LUISTRO, Secretary,
Department of Education, Culture and Sports and HON. MANUEL A. ROXAS II, Secretary, Department of Interior and
Local Government, Respondents.

x---------------------------------x

G.R. No. 207172

COUPLES FOR CHRIST FOUNDATION, INC., SPOUSES JUAN CARLOS ARTADI SARMIENTO AND FRANCESCA ISABELLE
BESINGA-SARMIENTO, AND SPOUSES LUIS FRANCIS A. RODRIGO, JR. and DEBORAH MARIE VERONICA N.
RODRIGO, Petitioners,
vs.
HON. PAQUITO N. OCHOA, JR., Executive Secretary, HON. FLORENCIO B. ABAD, Secretary, Department of Budget and
Management, HON. ENRIQUE T. ONA, Secretary, Department of Health, HON. ARMIN A. LUISTRO, Secretary,
Department of Education, Culture and Sports and HON. MANUELA. ROXAS II, Secretary, Department of Interior and
Local Government, Respondents.

x---------------------------------x

G.R. No. 207563

ALMARIM CENTI TILLAH and ABDULHUSSEIN M. KASHIM, Petitioners,

vs.
HON. PAQUITO N. OCHOA, JR., Executive Secretary, HON. ENRIQUE T. ONA, Secretary of the Department of Health, and
HON. ARMIN A. LUISTRO,Secretary of the Department of Budget and Management, Respondents.

DECISION
MENDOZA, J.:

Freedom of religion was accorded preferred status by the framers of our fundamental law. And this Court has consistently
affirmed this preferred status, well aware that it is "designed to protect the broadest possible liberty of conscience, to
allow each man to believe as his conscience directs, to profess his beliefs , and to live as he believes he ought to live,
consistent with the liberty of others and with the common good." 1

To this day, poverty is still a major stumbling block to the nation's emergence as a developed country, leaving our people
beleaguered in a state of hunger, illiteracy and unemployment. While governmental policies have been geared towards
the revitalization of the economy, the bludgeoning dearth in social services remains to be a problem that concerns not
only the poor, but every member of society. The government continues to tread on a trying path to the realization of its
very purpose, that is, the general welfare of the Filipino people and the development of the country as a whole. The
legislative branch, as the main facet of a representative government, endeavors to enact laws and policies that aim to
remedy looming societal woes, while the executive is closed set to fully implement these measures and bring concrete
and substantial solutions within the reach of Juan dela Cruz. Seemingly distant is the judicial branch, oftentimes regarded
as an inert governmental body that merely casts its watchful eyes on clashing stakeholders until it is called upon to
adjudicate. Passive, yet reflexive when called into action, the Judiciary then willingly embarks on its solemn duty to
interpret legislation vis-a-vis the most vital and enduring principle that holds Philippine society together - the supremacy
of the Philippine Constitution.

Nothing has polarized the nation more in recent years than the issues of population growth control, abortion and
contraception. As in every democratic society, diametrically opposed views on the subjects and their perceived
consequences freely circulate in various media. From television debates2 to sticker campaigns,3 from rallies by socio-
political activists to mass gatherings organized by members of the clergy 4 - the clash between the seemingly antithetical
ideologies of the religious conservatives and progressive liberals has caused a deep division in every level of the society.
Despite calls to withhold support thereto, however, Republic Act (R.A.) No. 10354, otherwise known as the Responsible
Parenthood and Reproductive Health Act of 2012 (RH Law), was enacted by Congress on December 21, 2012.

Shortly after the President placed his imprimatur on the said law, challengers from various sectors of society came
knocking on the doors of the Court, beckoning it to wield the sword that strikes down constitutional disobedience. Aware
of the profound and lasting impact that its decision may produce, the Court now faces the iuris controversy, as presented
in fourteen (14) petitions and two (2) petitions- in-intervention, to wit:

(1) Petition for Certiorari and Prohibition,5 filed by spouses Attys. James M. Imbong and Lovely Ann C. Imbong, in their
personal capacities as citizens, lawyers and taxpayers and on behalf of their minor children; and the Magnificat Child
Leaming Center, Inc., a domestic, privately-owned educational institution (Jmbong);

(2) Petition for Prohibition,6 filed by the Alliance for the Family Foundation Philippines, Inc., through its president, Atty.
Maria Concepcion S. Noche7 and several others8 in their personal capacities as citizens and on behalf of the generations
unborn (ALFI);

(3) Petition for Certiorari,9 filed by the Task Force for Family and Life Visayas, Inc., and Valeriano S. Avila, in their capacities
as citizens and taxpayers (Task Force Family);

(4) Petition for Certiorari and Prohibition, 10 filed by Serve Life Cagayan De Oro City, Inc., 11 Rosevale Foundation, Inc.,12 a
domestic, privately-owned educational institution, and several others,13 in their capacities as citizens (Serve Life);

(5) Petition,14 filed by Expedito A. Bugarin, Jr. in his capacity as a citizen (Bugarin);

(6) Petition for Certiorari and Prohibition, 15 filed by Eduardo Olaguer and the Catholic Xybrspace Apostolate of the
Philippines,16 in their capacities as a citizens and taxpayers (Olaguer);

(7) Petition for Certiorari and Prohibition, 17 filed by the Philippine Alliance of Xseminarians Inc., 18 and several others19 in
their capacities as citizens and taxpayers (PAX);
(8) Petition,20 filed by Reynaldo J. Echavez, M.D. and several others,21 in their capacities as citizens and taxpayers (Echavez);

(9) Petition for Certiorari and Prohibition,22 filed by spouses Francisco and Maria Fenny C. Tatad and Atty. Alan F. Paguia,
in their capacities as citizens, taxpayers and on behalf of those yet unborn. Atty. Alan F. Paguia is also proceeding in his
capacity as a member of the Bar (Tatad);

(10) Petition for Certiorari and Prohibition, 23 filed by Pro-Life Philippines Foundation Inc.24 and several others,25 in their
capacities as citizens and taxpayers and on behalf of its associates who are members of the Bar (Pro-Life);

(11) Petition for Prohibition,26 filed by Millennium Saint Foundation, Inc.,27 Attys. Ramon Pedrosa, Cita Borromeo-Garcia,
Stella Acedera, and Berteni Catalufia Causing, in their capacities as citizens, taxpayers and members of the Bar (MSF);

(12) Petition for Certiorari and Prohibition, 28 filed by John Walter B. Juat and several others,29 in their capacities as citizens
(Juat) ;

(13) Petition for Certiorari and Prohibition, 30 filed by Couples for Christ Foundation, Inc. and several others, 31 in their
capacities as citizens (CFC);

(14) Petition for Prohibition32 filed by Almarim Centi Tillah and Abdulhussein M. Kashim in their capacities as citizens and
taxpayers (Tillah); and

(15) Petition-In-Intervention,33 filed by Atty. Samson S. Alcantara in his capacity as a citizen and a taxpayer (Alcantara);
and

(16) Petition-In-Intervention,34 filed by Buhay Hayaang Yumabong (B UHAY) , an accredited political party.

A perusal of the foregoing petitions shows that the petitioners are assailing the constitutionality of RH Law on the following
GROUNDS:

The RH Law violates the right to life of the unborn. According to the petitioners, notwithstanding its declared policy
against abortion, the implementation of the RH Law would authorize the purchase of hormonal contraceptives, intra-
uterine devices and injectables which are abortives, in violation of Section 12, Article II of the Constitution which
guarantees protection of both the life of the mother and the life of the unborn from conception. 35

The RH Law violates the right to health and the right to protection against hazardous products. The petitioners posit that
the RH Law provides universal access to contraceptives which are hazardous to one's health, as it causes cancer and other
health problems.36

The RH Law violates the right to religious freedom. The petitioners contend that the RH Law violates the constitutional
guarantee respecting religion as it authorizes the use of public funds for the procurement of contraceptives. For the
petitioners, the use of public funds for purposes that are believed to be contrary to their beliefs is included in the
constitutional mandate ensuring religious freedom.37

It is also contended that the RH Law threatens conscientious objectors of criminal prosecution, imprisonment and other
forms of punishment, as it compels medical practitioners 1] to refer patients who seek advice on reproductive health
programs to other doctors; and 2] to provide full and correct information on reproductive health programs and service,
although it is against their religious beliefs and convictions.38

In this connection, Section 5 .23 of the Implementing Rules and Regulations of the RH Law (RH-IRR),39 provides that skilled
health professionals who are public officers such as, but not limited to, Provincial, City, or Municipal Health Officers,
medical officers, medical specialists, rural health physicians, hospital staff nurses, public health nurses, or rural health
midwives, who are specifically charged with the duty to implement these Rules, cannot be considered as conscientious
objectors.40

It is also argued that the RH Law providing for the formulation of mandatory sex education in schools should not be allowed
as it is an affront to their religious beliefs. 41
While the petit10ners recognize that the guarantee of religious freedom is not absolute, they argue that the RH Law fails
to satisfy the "clear and present danger test" and the "compelling state interest test" to justify the regulation of the right
to free exercise of religion and the right to free speech. 42

The RH Law violates the constitutional provision on involuntary servitude. According to the petitioners, the RH Law
subjects medical practitioners to involuntary servitude because, to be accredited under the PhilHealth program, they are
compelled to provide forty-eight (48) hours of pro bona services for indigent women, under threat of criminal prosecution,
imprisonment and other forms of punishment.43

The petitioners explain that since a majority of patients are covered by PhilHealth, a medical practitioner would effectively
be forced to render reproductive health services since the lack of PhilHealth accreditation would mean that the majority
of the public would no longer be able to avail of the practitioners services. 44

The RH Law violates the right to equal protection of the law. It is claimed that the RH Law discriminates against the poor
as it makes them the primary target of the government program that promotes contraceptive use. The petitioners argue
that, rather than promoting reproductive health among the poor, the RH Law seeks to introduce contraceptives that would
effectively reduce the number of the poor.45

The RH Law is "void-for-vagueness" in violation of the due process clause of the Constitution. In imposing the penalty of
imprisonment and/or fine for "any violation," it is vague because it does not define the type of conduct to be treated as
"violation" of the RH Law.46

In this connection, it is claimed that "Section 7 of the RH Law violates the right to due process by removing from them (the
people) the right to manage their own affairs and to decide what kind of health facility they shall be and what kind of
services they shall offer."47 It ignores the management prerogative inherent in corporations for employers to conduct their
affairs in accordance with their own discretion and judgment.

The RH Law violates the right to free speech. To compel a person to explain a full range of family planning methods is
plainly to curtail his right to expound only his own preferred way of family planning. The petitioners note that although
exemption is granted to institutions owned and operated by religious groups, they are still forced to refer their patients
to another healthcare facility willing to perform the service or procedure. 48

The RH Law intrudes into the zone of privacy of one's family protected by the Constitution. It is contended that the RH
Law providing for mandatory reproductive health education intrudes upon their constitutional right to raise their children
in accordance with their beliefs.49

It is claimed that, by giving absolute authority to the person who will undergo reproductive health procedure, the RH Law
forsakes any real dialogue between the spouses and impedes the right of spouses to mutually decide on matters pertaining
to the overall well-being of their family. In the same breath, it is also claimed that the parents of a child who has suffered
a miscarriage are deprived of parental authority to determine whether their child should use contraceptives. 50

The RH Law violates the constitutional principle of non-delegation of legislative authority. The petitioners question the
delegation by Congress to the FDA of the power to determine whether a product is non-abortifacient and to be included
in the Emergency Drugs List (EDL).51

The RH Law violates the one subject/one bill rule provision under Section 26( 1 ), Article VI of the Constitution. 52

The RH Law violates Natural Law.53

The RH Law violates the principle of Autonomy of Local Government Units (LGUs) and the Autonomous Region of Muslim
Mindanao {ARMM). It is contended that the RH Law, providing for reproductive health measures at the local government
level and the ARMM, infringes upon the powers devolved to LGUs and the ARMM under the Local Government Code and
R.A . No. 9054.54
Various parties also sought and were granted leave to file their respective comments-in-intervention in defense of the
constitutionality of the RH Law. Aside from the Office of the Solicitor General (OSG) which commented on the petitions in
behalf of the respondents,55 Congressman Edcel C. Lagman,56 former officials of the Department of Health Dr. Esperanza
I. Cabral, Jamie Galvez-Tan, and Dr. Alberto G. Romualdez,57 the Filipino Catholic Voices for Reproductive Health
(C4RH),58 Ana Theresa "Risa" Hontiveros,59 and Atty. Joan De Venecia60 also filed their respective Comments-in-
Intervention in conjunction with several others. On June 4, 2013, Senator Pia Juliana S. Cayetano was also granted leave
to intervene.61

The respondents, aside from traversing the substantive arguments of the petitioners, pray for the dismissal of the petitions
for the principal reasons that 1] there is no actual case or controversy and, therefore, the issues are not yet ripe for judicial
determination.; 2] some petitioners lack standing to question the RH Law; and 3] the petitions are essentially petitions for
declaratory relief over which the Court has no original jurisdiction.

Meanwhile, on March 15, 2013, the RH-IRR for the enforcement of the assailed legislation took effect.

On March 19, 2013, after considering the issues and arguments raised, the Court issued the Status Quo Ante Order (SQAO),
enjoining the effects and implementation of the assailed legislation for a period of one hundred and twenty (120) days, or
until July 17, 2013.62

On May 30, 2013, the Court held a preliminary conference with the counsels of the parties to determine and/or identify
the pertinent issues raised by the parties and the sequence by which these issues were to be discussed in the oral
arguments. On July 9 and 23, 2013, and on August 6, 13, and 27, 2013, the cases were heard on oral argument. On July 16,
2013, the SQAO was ordered extended until further orders of the Court. 63

Thereafter, the Court directed the parties to submit their respective memoranda within sixty (60) days and, at the same
time posed several questions for their clarification on some contentions of the parties. 64

The Status Quo Ante

(Population, Contraceptive and Reproductive Health Laws

Prior to the RH Law

Long before the incipience of the RH Law, the country has allowed the sale, dispensation and distribution of contraceptive
drugs and devices. As far back as June 18, 1966, the country enacted R.A. No. 4729 entitled "An Act to Regu,late the Sale,
Dispensation, and/or Distribution of Contraceptive Drugs and Devices." Although contraceptive drugs and devices were
allowed, they could not be sold, dispensed or distributed "unless such sale, dispensation and distribution is by a duly
licensed drug store or pharmaceutical company and with the prescription of a qualified medical practitioner." 65

In addition, R.A. No. 5921,66 approved on June 21, 1969, contained provisions relative to "dispensing of abortifacients or
anti-conceptional substances and devices." Under Section 37 thereof, it was provided that "no drug or chemical product
or device capable of provoking abortion or preventing conception as classified by the Food and Drug Administration shall
be delivered or sold to any person without a proper prescription by a duly licensed physician."

On December 11, 1967, the Philippines, adhering to the UN Declaration on Population, which recognized that the
population problem should be considered as the principal element for long-term economic development, enacted
measures that promoted male vasectomy and tubal ligation to mitigate population growth. 67 Among these measures
included R.A. No. 6365, approved on August 16, 1971, entitled "An Act Establishing a National Policy on Population,
Creating the Commission on Population and for Other Purposes. " The law envisioned that "family planning will be made
part of a broad educational program; safe and effective means will be provided to couples desiring to space or limit family
size; mortality and morbidity rates will be further reduced."

To further strengthen R.A. No. 6365, then President Ferdinand E . Marcos issued Presidential Decree. (P.D.) No. 79, 68 dated
December 8, 1972, which, among others, made "family planning a part of a broad educational program," provided "family
planning services as a part of over-all health care," and made "available all acceptable methods of contraception, except
abortion, to all Filipino citizens desirous of spacing, limiting or preventing pregnancies."

Through the years, however, the use of contraceptives and family planning methods evolved from being a component of
demographic management, to one centered on the promotion of public health, particularly, reproductive health. 69 Under
that policy, the country gave priority to one's right to freely choose the method of family planning to be adopted, in
conformity with its adherence to the commitments made in the International Conference on Population and
Development.70 Thus, on August 14, 2009, the country enacted R.A. No. 9710 or "The Magna Carta for Women, " which,
among others, mandated the State to provide for comprehensive health services and programs for women, including
family planning and sex education.71

The RH Law

Despite the foregoing legislative measures, the population of the country kept on galloping at an uncontrollable pace.
From a paltry number of just over 27 million Filipinos in 1960, the population of the country reached over 76 million in the
year 2000 and over 92 million in 2010.72 The executive and the legislative, thus, felt that the measures were still not
adequate. To rein in the problem, the RH Law was enacted to provide Filipinos, especially the poor and the marginalized,
access and information to the full range of modem family planning methods, and to ensure that its objective to provide
for the peoples' right to reproductive health be achieved. To make it more effective, the RH Law made it mandatory for
health providers to provide information on the full range of modem family planning methods, supplies and services, and
for schools to provide reproductive health education. To put teeth to it, the RH Law criminalizes certain acts of refusals to
carry out its mandates.

Stated differently, the RH Law is an enhancement measure to fortify and make effective the current laws on contraception,
women's health and population control.

Prayer of the Petitioners - Maintain the Status Quo

The petitioners are one in praying that the entire RH Law be declared unconstitutional. Petitioner ALFI, in particular, argues
that the government sponsored contraception program, the very essence of the RH Law, violates the right to health of
women and the sanctity of life, which the State is mandated to protect and promote. Thus, ALFI prays that "the status quo
ante - the situation prior to the passage of the RH Law - must be maintained."73 It explains:

x x x. The instant Petition does not question contraception and contraceptives per se. As provided under Republic Act No.
5921 and Republic Act No. 4729, the sale and distribution of contraceptives are prohibited unless dispensed by a
prescription duly licensed by a physician. What the Petitioners find deplorable and repugnant under the RH Law is the role
that the State and its agencies - the entire bureaucracy, from the cabinet secretaries down to the barangay officials in the
remotest areas of the country - is made to play in the implementation of the contraception program to the fullest extent
possible using taxpayers' money. The State then will be the funder and provider of all forms of family planning methods
and the implementer of the program by ensuring the widespread dissemination of, and universal access to, a full range of
family planning methods, devices and supplies.74

ISSUES

After a scrutiny of the various arguments and contentions of the parties, the Court has synthesized and refined them to
the following principal issues:

I. PROCEDURAL: Whether the Court may exercise its power of judicial review over the controversy.

1] Power of Judicial Review

2] Actual Case or Controversy

3] Facial Challenge

4] Locus Standi
5] Declaratory Relief

6] One Subject/One Title Rule

II. SUBSTANTIVE: Whether the RH law is unconstitutional:

1] Right to Life

2] Right to Health

3] Freedom of Religion and the Right to Free Speech

4] The Family

5] Freedom of Expression and Academic Freedom

6] Due Process

7] Equal Protection

8] Involuntary Servitude

9] Delegation of Authority to the FDA

10] Autonomy of Local Govemments/ARMM

DISCUSSION

Before delving into the constitutionality of the RH Law and its implementing rules, it behooves the Court to resolve some
procedural impediments.

I. PROCEDURAL ISSUE: Whether the Court can exercise its power of judicial review over the controversy.

The Power of Judicial Review

In its attempt to persuade the Court to stay its judicial hand, the OSG asserts that it should submit to the legislative and
political wisdom of Congress and respect the compromises made in the crafting of the RH Law, it being "a product of a
majoritarian democratic process"75 and "characterized by an inordinate amount of transparency." 76 The OSG posits that
the authority of the Court to review social legislation like the RH Law by certiorari is "weak," since the Constitution vests
the discretion to implement the constitutional policies and positive norms with the political departments, in particular,
with Congress.77 It further asserts that in view of the Court's ruling in Southern Hemisphere v. Anti-Terrorism Council,78 the
remedies of certiorari and prohibition utilized by the petitioners are improper to assail the validity of the acts of the
legislature.79

Moreover, the OSG submits that as an "as applied challenge," it cannot prosper considering that the assailed law has yet
to be enforced and applied to the petitioners, and that the government has yet to distribute reproductive health devices
that are abortive. It claims that the RH Law cannot be challenged "on its face" as it is not a speech-regulating measure.80

In many cases involving the determination of the constitutionality of the actions of the Executive and the Legislature, it is
often sought that the Court temper its exercise of judicial power and accord due respect to the wisdom of its co-equal
branch on the basis of the principle of separation of powers. To be clear, the separation of powers is a fundamental
principle in our system of government, which obtains not through express provision but by actual division in our
Constitution. Each department of the government has exclusive cognizance of matters within its jurisdiction and is
supreme within its own sphere.81

Thus, the 1987 Constitution provides that: (a) the legislative power shall be vested in the Congress of the Philippines; 82 (b)
the executive power shall be vested in the President of the Philippines; 83 and (c) the judicial power shall be vested in one
Supreme Court and in such lower courts as may be established by law. 84 The Constitution has truly blocked out with deft
strokes and in bold lines, the allotment of powers among the three branches of government. 85

In its relationship with its co-equals, the Judiciary recognizes the doctrine of separation of powers which imposes upon
the courts proper restraint, born of the nature of their functions and of their respect for the other branches of government,
in striking down the acts of the Executive or the Legislature as unconstitutional. Verily, the policy is a harmonious blend
of courtesy and caution.86

It has also long been observed, however, that in times of social disquietude or political instability, the great landmarks of
the Constitution are apt to be forgotten or marred, if not entirely obliterated. 87 In order to address this, the Constitution
impresses upon the Court to respect the acts performed by a co-equal branch done within its sphere of competence and
authority, but at the same time, allows it to cross the line of separation - but only at a very limited and specific point - to
determine whether the acts of the executive and the legislative branches are null because they were undertaken with
grave abuse of discretion.88 Thus, while the Court may not pass upon questions of wisdom, justice or expediency of the
RH Law, it may do so where an attendant unconstitutionality or grave abuse of discretion results. 89 The Court must
demonstrate its unflinching commitment to protect those cherished rights and principles embodied in the Constitution.

In this connection, it bears adding that while the scope of judicial power of review may be limited, the Constitution makes
no distinction as to the kind of legislation that may be subject to judicial scrutiny, be it in the form of social legislation or
otherwise. The reason is simple and goes back to the earlier point. The Court may pass upon the constitutionality of acts
of the legislative and the executive branches, since its duty is not to review their collective wisdom but, rather, to make
sure that they have acted in consonance with their respective authorities and rights as mandated of them by the
Constitution. If after said review, the Court finds no constitutional violations of any sort, then, it has no more authority of
proscribing the actions under review.90 This is in line with Article VIII, Section 1 of the Constitution which expressly provides:

Section 1. The judicial power shall be vested in one Supreme Court and in such lower courts as may be established by law.

Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally
demandable and enforceable, and to 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. [Emphases supplied]

As far back as Tanada v. Angara,91 the Court has unequivocally declared that certiorari, prohibition and mandamus are
appropriate remedies to raise constitutional issues and to review and/or prohibit/nullify, when proper, acts of legislative
and executive officials, as there is no other plain, speedy or adequate remedy in the ordinary course of law. This ruling
was later on applied in Macalintal v. COMELEC, 92 Aldaba v. COMELEC,93Magallona v. Ermita,94 and countless others. In
Tanada, the Court wrote:

In seeking to nullify an act of the Philippine Senate on the ground that it contravenes the Constitution, the petition no
doubt raises a justiciable controversy. Where an action of the legislative branch is seriously alleged to have infringed the
Constitution, it becomes not only the right but in fact the duty of the judiciary to settle the dispute. "The question thus
posed is judicial rather than political. The duty (to adjudicate) remains to assure that the supremacy of the Constitution is
upheld. " Once a "controversy as to the application or interpretation of constitutional provision is raised before this Court
(as in the instant case), it becomes a legal issue which the Court is bound by constitutional mandate to decide. [Emphasis
supplied]

In the scholarly estimation of former Supreme Court Justice Florentino Feliciano, "judicial review is essential for the
maintenance and enforcement of the separation of powers and the balancing of powers among the three great
departments of government through the definition and maintenance of the boundaries of authority and control between
them. To him, judicial review is the chief, indeed the only, medium of participation - or instrument of intervention - of the
judiciary in that balancing operation.95

Lest it be misunderstood, it bears emphasizing that the Court does not have the unbridled authority to rule on just any
and every claim of constitutional violation. Jurisprudence is replete with the rule that the power of judicial review is limited
by four exacting requisites, viz : (a) there must be an actual case or controversy; (b) the petitioners must possess locus
standi; (c) the question of constitutionality must be raised at the earliest opportunity; and (d) the issue of constitutionality
must be the lis mota of the case.96

Actual Case or Controversy

Proponents of the RH Law submit that the subj ect petitions do not present any actual case or controversy because the
RH Law has yet to be implemented.97 They claim that the questions raised by the petitions are not yet concrete and ripe
for adjudication since no one has been charged with violating any of its provisions and that there is no showing that any
of the petitioners' rights has been adversely affected by its operation. 98 In short, it is contended that judicial review of the
RH Law is premature.

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. 99 The rule is that courts
do not sit to adjudicate mere academic questions to satisfy scholarly interest, however intellectually challenging. The
controversy must be justiciable-definite and concrete, touching on the legal relations of parties having adverse legal
interests. In other words, the pleadings must show an active antagonistic assertion of a legal right, on the one hand, and
a denial thereof, on the other; that is, it must concern a real, tangible and not merely a theoretical question or issue. There
ought to be an actual and substantial controversy admitting of specific relief through a decree conclusive in nature, as
distinguished from an opinion advising what the law would be upon a hypothetical state of facts. 100

Corollary to the requirement of an actual case or controversy is the requirement of ripeness.101 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 102

In The Province of North Cotabato v. The Government of the Republic of the Philippines, 103 where the constitutionality of
an unimplemented Memorandum of Agreement on the Ancestral Domain (MOA-AD) was put in question, it was argued
that the Court has no authority to pass upon the issues raised as there was yet no concrete act performed that could
possibly violate the petitioners' and the intervenors' rights. Citing precedents, the Court ruled that the fact of the law or
act in question being not yet effective does not negate ripeness. Concrete acts under a law are not necessary to render
the controversy ripe. Even a singular violation of the Constitution and/or the law is enough to awaken judicial duty.

In this case, the Court is of the view that an actual case or controversy exists and that the same is ripe for judicial
determination. Considering that the RH Law and its implementing rules have already taken effect and that budgetary
measures to carry out the law have already been passed, it is evident that the subject petitions present a justiciable
controversy. As stated earlier, when an action of the legislative branch is seriously alleged to have infringed the
Constitution, it not only becomes a right, but also a duty of the Judiciary to settle the dispute. 104

Moreover, the petitioners have shown that the case is so because medical practitioners or medical providers are in danger
of being criminally prosecuted under the RH Law for vague violations thereof, particularly public health officers who are
threatened to be dismissed from the service with forfeiture of retirement and other benefits. They must, at least, be heard
on the matter NOW.

Facial Challenge

The OSG also assails the propriety of the facial challenge lodged by the subject petitions, contending that the RH Law
cannot be challenged "on its face" as it is not a speech regulating measure. 105

The Court is not persuaded.

In United States (US) constitutional law, a facial challenge, also known as a First Amendment Challenge, is one that is
launched to assail the validity of statutes concerning not only protected speech, but also all other rights in the First
Amendment.106 These include religious freedom, freedom of the press, and the right of the people to peaceably assemble,
and to petition the Government for a redress of grievances. 107 After all, the fundamental right to religious freedom,
freedom of the press and peaceful assembly are but component rights of the right to one's freedom of expression, as they
are modes which one's thoughts are externalized.

In this jurisdiction, the application of doctrines originating from the U.S. has been generally maintained, albeit with some
modifications. While this Court has withheld the application of facial challenges to strictly penal statues, 108 it has expanded
its scope to cover statutes not only regulating free speech, but also those involving religious freedom, and other
fundamental rights.109 The underlying reason for this modification is simple. For unlike its counterpart in the U.S., this
Court, under its expanded jurisdiction, is mandated by the Fundamental Law not only to settle actual controversies
involving rights which are legally demandable and enforceable, but also to 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.110 Verily, the framers of Our Constitution envisioned a proactive Judiciary, ever vigilant with its duty to
maintain the supremacy of the Constitution.

Consequently, considering that the foregoing petitions have seriously alleged that the constitutional human rights to life,
speech and religion and other fundamental rights mentioned above have been violated by the assailed legislation, the
Court has authority to take cognizance of these kindred petitions and to determine if the RH Law can indeed pass
constitutional scrutiny. To dismiss these petitions on the simple expedient that there exist no actual case or controversy,
would diminish this Court as a reactive branch of government, acting only when the Fundamental Law has been
transgressed, to the detriment of the Filipino people.

Locus Standi

The OSG also attacks the legal personality of the petitioners to file their respective petitions. It contends that the "as
applied challenge" lodged by the petitioners cannot prosper as the assailed law has yet to be enforced and applied against
them,111 and the government has yet to distribute reproductive health devices that are abortive. 112

The petitioners, for their part, invariably invoke the "transcendental importance" doctrine and their status as citizens and
taxpayers in establishing the requisite locus standi.

Locus standi or legal standing is 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 challenged governmental act. 113 It requires a personal stake in the outcome
of the controversy as to assure the concrete adverseness which sharpens the presentation of issues upon which the court
so largely depends for illumination of difficult constitutional questions.114

In relation to locus standi, the "as applied challenge" embodies the rule that one can challenge the constitutionality of a
statute only if he asserts a violation of his own rights. The rule prohibits one from challenging the constitutionality of the
statute grounded on a violation of the rights of third persons not before the court. This rule is also known as the prohibition
against third-party standing.115

Transcendental Importance

Notwithstanding, the Court leans on the doctrine that "the rule on standing is a matter of procedure, hence, can be relaxed
for non-traditional plaintiffs like ordinary citizens, taxpayers, and legislators when the public interest so requires, such as
when the matter is of transcendental importance, of overreaching significance to society, or of paramount public
interest."116

In Coconut Oil Refiners Association, Inc. v. Torres, 117 the Court held that in cases of paramount importance where serious
constitutional questions are involved, the standing requirement may be relaxed and a suit may be allowed to prosper even
where there is no direct injury to the party claiming the right of judicial review. In the first Emergency Powers
Cases,118 ordinary citizens and taxpayers were allowed to question the constitutionality of several executive orders
although they had only an indirect and general interest shared in common with the public.

With these said, even if the constitutionality of the RH Law may not be assailed through an "as-applied challenge, still, the
Court has time and again acted liberally on the locus s tandi requirement. It has accorded certain individuals standing to
sue, not otherwise directly injured or with material interest affected by a Government act, provided a constitutional issue
of transcendental importance is invoked. The rule on locus standi is, after all, a procedural technicality which the Court
has, on more than one occasion, waived or relaxed, thus allowing non-traditional plaintiffs, such as concerned citizens,
taxpayers, voters or legislators, to sue in the public interest, albeit they may not have been directly injured by the
operation of a law or any other government act. As held in Jaworski v. PAGCOR: 119

Granting arguendo that the present action cannot be properly treated as a petition for prohibition, the transcendental
importance of the issues involved in this case warrants that we set aside the technical defects and take primary jurisdiction
over the petition at bar. One cannot deny that the issues raised herein have potentially pervasive influence on the social
and moral well being of this nation, specially the youth; hence, their proper and just determination is an imperative need.
This is in accordance with the well-entrenched principle that rules of procedure are not inflexible tools designed to hinder
or delay, but to facilitate and promote the administration of justice. Their strict and rigid application, which would result
in technicalities that tend to frustrate, rather than promote substantial justice, must always be eschewed. (Emphasis
supplied)

In view of the seriousness, novelty and weight as precedents, not only to the public, but also to the bench and bar, the
issues raised must be resolved for the guidance of all. After all, the RH Law drastically affects the constitutional provisions
on the right to life and health, the freedom of religion and expression and other constitutional rights. Mindful of all these
and the fact that the issues of contraception and reproductive health have already caused deep division among a broad
spectrum of society, the Court entertains no doubt that the petitions raise issues of transcendental importance warranting
immediate court adjudication. More importantly, considering that it is the right to life of the mother and the unborn which
is primarily at issue, the Court need not wait for a life to be taken away before taking action.

The Court cannot, and should not, exercise judicial restraint at this time when rights enshrined in the Constitution are
being imperilled to be violated. To do so, when the life of either the mother or her child is at stake, would lead to
irreparable consequences.

Declaratory Relief

The respondents also assail the petitions because they are essentially petitions for declaratory relief over which the Court
has no original jurisdiction.120 Suffice it to state that most of the petitions are praying for injunctive reliefs and so the Court
would just consider them as petitions for prohibition under Rule 65, over which it has original jurisdiction. Where the case
has far-reaching implications and prays for injunctive reliefs, the Court may consider them as petitions for prohibition
under Rule 65.121

One Subject-One Title

The petitioners also question the constitutionality of the RH Law, claiming that it violates Section 26(1 ), Article VI of the
Constitution,122 prescribing the one subject-one title rule. According to them, being one for reproductive health with
responsible parenthood, the assailed legislation violates the constitutional standards of due process by concealing its true
intent - to act as a population control measure.123

To belittle the challenge, the respondents insist that the RH Law is not a birth or population control measure, 124and that
the concepts of "responsible parenthood" and "reproductive health" are both interrelated as they are inseparable. 125

Despite efforts to push the RH Law as a reproductive health law, the Court sees it as principally a population control
measure. The corpus of the RH Law is geared towards the reduction of the country's population. While it claims to save
lives and keep our women and children healthy, it also promotes pregnancy-preventing products. As stated earlier, the
RH Law emphasizes the need to provide Filipinos, especially the poor and the marginalized, with access to information on
the full range of modem family planning products and methods. These family planning methods, natural or modem,
however, are clearly geared towards the prevention of pregnancy.

For said reason, the manifest underlying objective of the RH Law is to reduce the number of births in the country.

It cannot be denied that the measure also seeks to provide pre-natal and post-natal care as well. A large portion of the
law, however, covers the dissemination of information and provisions on access to medically-safe, non-abortifacient,
effective, legal, affordable, and quality reproductive health care services, methods, devices, and supplies, which are all
intended to prevent pregnancy.

The Court, thus, agrees with the petitioners' contention that the whole idea of contraception pervades the entire RH Law.
It is, in fact, the central idea of the RH Law.126 Indeed, remove the provisions that refer to contraception or are related to
it and the RH Law loses its very foundation. 127 As earlier explained, "the other positive provisions such as skilled birth
attendance, maternal care including pre-and post-natal services, prevention and management of reproductive tract
infections including HIV/AIDS are already provided for in the Magna Carta for Women." 128

Be that as it may, the RH Law does not violate the one subject/one bill rule. In Benjamin E. Cawaling, Jr. v. The Commission
on Elections and Rep. Francis Joseph G Escudero, it was written:

It is well-settled that the "one title-one subject" rule does not require the Congress to employ in the title of the enactment
language of such precision as to mirror, fully index or catalogue all the contents and the minute details therein. The rule
is sufficiently complied with if the title is comprehensive enough as to include the general object which the statute seeks
to effect, and where, as here, the persons interested are informed of the nature, scope and consequences of the proposed
law and its operation. Moreover, this Court has invariably adopted a liberal rather than technical construction of the rule
"so as not to cripple or impede legislation." [Emphases supplied]

In this case, a textual analysis of the various provisions of the law shows that both "reproductive health" and "responsible
parenthood" are interrelated and germane to the overriding objective to control the population growth. As expressed in
the first paragraph of Section 2 of the RH Law:

SEC. 2. Declaration of Policy. - The State recognizes and guarantees the human rights of all persons including their right to
equality and nondiscrimination of these rights, the right to sustainable human development, the right to health which
includes reproductive health, the right to education and information, and the right to choose and make decisions for
themselves in accordance with their religious convictions, ethics, cultural beliefs, and the demands of responsible
parenthood.

The one subject/one title rule expresses the principle that the title of a law must not be "so uncertain that the average
person reading it would not be informed of the purpose of the enactment or put on inquiry as to its contents, or which is
misleading, either in referring to or indicating one subject where another or different one is really embraced in the act, or
in omitting any expression or indication of the real subject or scope of the act." 129

Considering the close intimacy between "reproductive health" and "responsible parenthood" which bears to the
attainment of the goal of achieving "sustainable human development" as stated under its terms, the Court finds no reason
to believe that Congress intentionally sought to deceive the public as to the contents of the assailed legislation.

II - SUBSTANTIVE ISSUES:

1-The Right to Life

Position of the Petitioners

The petitioners assail the RH Law because it violates the right to life and health of the unborn child under Section 12,
Article II of the Constitution. The assailed legislation allowing access to abortifacients/abortives effectively sanctions
abortion.130
According to the petitioners, despite its express terms prohibiting abortion, Section 4(a) of the RH Law considers
contraceptives that prevent the fertilized ovum to reach and be implanted in the mother's womb as an abortifacient; thus,
sanctioning contraceptives that take effect after fertilization and prior to implantation, contrary to the intent of the
Framers of the Constitution to afford protection to the fertilized ovum which already has life.

They argue that even if Section 9 of the RH Law allows only "non-abortifacient" hormonal contraceptives, intrauterine
devices, injectables and other safe, legal, non-abortifacient and effective family planning products and supplies, medical
research shows that contraceptives use results in abortion as they operate to kill the fertilized ovum which already has
life.131

As it opposes the initiation of life, which is a fundamental human good, the petitioners assert that the State sanction of
contraceptive use contravenes natural law and is an affront to the dignity of man. 132

Finally, it is contended that since Section 9 of the RH Law requires the Food and Drug Administration (FDA) to certify that
the product or supply is not to be used as an abortifacient, the assailed legislation effectively confirms that abortifacients
are not prohibited. Also considering that the FDA is not the agency that will actually supervise or administer the use of
these products and supplies to prospective patients, there is no way it can truthfully make a certification that it shall not
be used for abortifacient purposes.133

Position of the Respondents

For their part, the defenders of the RH Law point out that the intent of the Framers of the Constitution was simply the
prohibition of abortion. They contend that the RH Law does not violate the Constitution since the said law emphasizes
that only "non-abortifacient" reproductive health care services, methods, devices products and supplies shall be made
accessible to the public.134

According to the OSG, Congress has made a legislative determination that contraceptives are not abortifacients by
enacting the RH Law. As the RH Law was enacted with due consideration to various studies and consultations with the
World Health Organization (WHO) and other experts in the medical field, it is asserted that the Court afford deference
and respect to such a determination and pass judgment only when a particular drug or device is later on determined as
an abortive.135

For his part, respondent Lagman argues that the constitutional protection of one's right to life is not violated considering
that various studies of the WHO show that life begins from the implantation of the fertilized ovum. Consequently, he
argues that the RH Law is constitutional since the law specifically provides that only contraceptives that do not prevent
the implantation of the fertilized ovum are allowed.136

The Court's Position

It is a universally accepted principle that every human being enjoys the right to life. 137

Even if not formally established, the right to life, being grounded on natural law, is inherent and, therefore, not a creation
of, or dependent upon a particular law, custom, or belief. It precedes and transcends any authority or the laws of men.

In this jurisdiction, the right to life is given more than ample protection. Section 1, Article III of the Constitution provides:

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.

As expounded earlier, the use of contraceptives and family planning methods in the Philippines is not of recent vintage.
From the enactment of R.A. No. 4729, entitled "An Act To Regulate The Sale, Dispensation, and/or Distribution of
Contraceptive Drugs and Devices "on June 18, 1966, prescribing rules on contraceptive drugs and devices which prevent
fertilization,138 to the promotion of male vasectomy and tubal ligation, 139 and the ratification of numerous international
agreements, the country has long recognized the need to promote population control through the use of contraceptives
in order to achieve long-term economic development. Through the years, however, the use of contraceptives and other
family planning methods evolved from being a component of demographic management, to one centered on the
promotion of public health, particularly, reproductive health. 140

This has resulted in the enactment of various measures promoting women's rights and health and the overall promotion
of the family's well-being. Thus, aside from R.A. No. 4729, R.A. No. 6365 or "The Population Act of the Philippines" and
R.A. No. 9710, otherwise known as the "The Magna Carta of Women" were legislated. Notwithstanding this paradigm shift,
the Philippine national population program has always been grounded two cornerstone principles: "principle of no-
abortion" and the "principle of non-coercion."141 As will be discussed later, these principles are not merely grounded on
administrative policy, but rather, originates from the constitutional protection expressly provided to afford protection to
life and guarantee religious freedom.

When Life Begins*

Majority of the Members of the Court are of the position that the question of when life begins is a scientific and medical
issue that should not be decided, at this stage, without proper hearing and evidence. During the deliberation, however, it
was agreed upon that the individual members of the Court could express their own views on this matter.

In this regard, the ponente, is of the strong view that life begins at fertilization.

In answering the question of when life begins, focus should be made on the particular phrase of Section 12 which reads:

Section 12. The State recognizes the sanctity of family life and shall protect and strengthen the family as a basic
autonomous social institution. It shall equally protect the life of the mother and the life of the unborn from conception.
The natural and primary right and duty of parents in the rearing of the youth for civic efficiency and the development of
moral character shall receive the support of the Government.

Textually, the Constitution affords protection to the unborn from conception. This is undisputable because before
conception, there is no unborn to speak of. For said reason, it is no surprise that the Constitution is mute as to any
proscription prior to conception or when life begins. The problem has arisen because, amazingly, there are quarters who
have conveniently disregarded the scientific fact that conception is reckoned from fertilization. They are waving the view
that life begins at implantation. Hence, the issue of when life begins.

In a nutshell, those opposing the RH Law contend that conception is synonymous with "fertilization" of the female ovum
by the male sperm.142 On the other side of the spectrum are those who assert that conception refers to the "implantation"
of the fertilized ovum in the uterus.143

Plain and Legal Meaning

It is a canon in statutory construction that the words of the Constitution should be interpreted in their plain and ordinary
meaning. As held in the recent case of Chavez v. Judicial Bar Council: 144

One of the primary and basic rules in statutory construction is that where the words of a statute are clear, plain, and free
from ambiguity, it must be given its literal meaning and applied without attempted interpretation. It is a well-settled
principle of constitutional construction that the language employed in the Constitution must be given their ordinary
meaning except where technical terms are employed. As much as possible, the words of the Constitution should be
understood in the sense they have in common use. What it says according to the text of the provision to be construed
compels acceptance and negates the power of the courts to alter it, based on the postulate that the framers and the
people mean what they say. Verba legis non est recedendum - from the words of a statute there should be no departure.

The raison d' etre for the rule is essentially two-fold: First, because it is assumed that the words in which constitutional
provisions are couched express the objective sought to be attained; and second, because the Constitution is not primarily
a lawyer's document but essentially that of the people, in whose consciousness it should ever be present as an important
condition for the rule of law to prevail.
In conformity with the above principle, the traditional meaning of the word "conception" which, as described and defined
by all reliable and reputable sources, means that life begins at fertilization.

Webster's Third New International Dictionary describes it as the act of becoming pregnant, formation of a viable zygote;
the fertilization that results in a new entity capable of developing into a being like its parents. 145

Black's Law Dictionary gives legal meaning to the term "conception" as the fecundation of the female ovum by the male
spermatozoon resulting in human life capable of survival and maturation under normal conditions. 146

Even in jurisprudence, an unborn child has already a legal personality. In Continental Steel Manufacturing Corporation v.
Hon. Accredited Voluntary Arbitrator Allan S. Montano,147 it was written:

Life is not synonymous with civil personality. One need not acquire civil personality first before he/she could die. Even a
child inside the womb already has life. No less than the Constitution recognizes the life of the unborn from conception,
that the State must protect equally with the life of the mother. If the unborn already has life, then the cessation thereof
even prior to the child being delivered, qualifies as death. [Emphases in the original]

In Gonzales v. Carhart,148 Justice Anthony Kennedy, writing for the US Supreme Court, said that the State "has respect for
human life at all stages in the pregnancy" and "a legitimate and substantial interest in preserving and promoting fetal life."
Invariably, in the decision, the fetus was referred to, or cited, as a baby or a child. 149

Intent of the Framers

Records of the Constitutional Convention also shed light on the intention of the Framers regarding the term "conception"
used in Section 12, Article II of the Constitution. From their deliberations, it clearly refers to the moment of "fertilization."
The records reflect the following:

Rev. Rigos: In Section 9, page 3, there is a sentence which reads:

"The State shall equally protect the life of the mother and the life of the unborn from the moment of conception."

When is the moment of conception?

xxx

Mr. Villegas: As I explained in the sponsorship speech, it is when the ovum is fertilized by the sperm that there is human
life. x x x.150

xxx

As to why conception is reckoned from fertilization and, as such, the beginning of human life, it was explained:

Mr. Villegas: I propose to review this issue in a biological manner. The first question that needs to be answered is: Is the
fertilized ovum alive? Biologically categorically says yes, the fertilized ovum is alive. First of all, like all living organisms, it
takes in nutrients which it processes by itself. It begins doing this upon fertilization. Secondly, as it takes in these nutrients,
it grows from within. Thirdly, it multiplies itself at a geometric rate in the continuous process of cell division. All these
processes are vital signs of life. Therefore, there is no question that biologically the fertilized ovum has life.

The second question: Is it human? Genetics gives an equally categorical "yes." At the moment of conception, the nuclei of
the ovum and the sperm rupture. As this happens 23 chromosomes from the ovum combine with 23 chromosomes of the
sperm to form a total of 46 chromosomes. A chromosome count of 46 is found only - and I repeat, only in human cells.
Therefore, the fertilized ovum is human.

Since these questions have been answered affirmatively, we must conclude that if the fertilized ovum is both alive and
human, then, as night follows day, it must be human life. Its nature is human. 151
Why the Constitution used the phrase "from the moment of conception" and not "from the moment of fertilization" was
not because of doubt when human life begins, but rather, because:

Mr. Tingson: x x x x the phrase from the moment of conception" was described by us here before with the scientific phrase
"fertilized ovum" may be beyond the comprehension of some people; we want to use the simpler phrase "from the
moment of conception."152

Thus, in order to ensure that the fertilized ovum is given ample protection under the Constitution, it was discussed:

Rev. Rigos: Yes, we think that the word "unborn" is sufficient for the purpose of writing a Constitution, without specifying
"from the moment of conception."

Mr. Davide: I would not subscribe to that particular view because according to the Commissioner's own admission, he
would leave it to Congress to define when life begins. So, Congress can define life to begin from six months after
fertilization; and that would really be very, very, dangerous. It is now determined by science that life begins from the
moment of conception. There can be no doubt about it. So we should not give any doubt to Congress, too. 153

Upon further inquiry, it was asked:

Mr. Gascon: Mr. Presiding Officer, I would like to ask a question on that point. Actually, that is one of the questions I was
going to raise during the period of interpellations but it has been expressed already. The provision, as proposed right now
states:

The State shall equally protect the life of the mother and the life of the unborn from the moment of conception.

When it speaks of "from the moment of conception," does this mean when the egg meets the sperm?

Mr. Villegas: Yes, the ovum is fertilized by the sperm.

Mr. Gascon: Therefore that does not leave to Congress the right to determine whether certain contraceptives that we
know today are abortifacient or not because it is a fact that some of the so-called contraceptives deter the rooting of the
ovum in the uterus. If fertilization has already occurred, the next process is for the fertilized ovum to travel towards the
uterus and to take root. What happens with some contraceptives is that they stop the opportunity for the fertilized ovum
to reach the uterus. Therefore, if we take the provision as it is proposed, these so called contraceptives should be banned.

Mr. Villegas: Yes, if that physical fact is established, then that is what is called abortifacient and, therefore, would be
unconstitutional and should be banned under this provision.

Mr. Gascon: Yes. So my point is that I do not think it is up to Congress to state whether or not these certain contraceptives
are abortifacient. Scientifically and based on the provision as it is now proposed, they are already considered
abortifacient.154

From the deliberations above-quoted, it is apparent that the Framers of the Constitution emphasized that the State shall
provide equal protection to both the mother and the unborn child from the earliest opportunity of life, that is, upon
fertilization or upon the union of the male sperm and the female ovum. It is also apparent is that the Framers of the
Constitution intended that to prohibit Congress from enacting measures that would allow it determine when life begins.

Equally apparent, however, is that the Framers of the Constitution did not intend to ban all contraceptives for being
unconstitutional. In fact, Commissioner Bernardo Villegas, spearheading the need to have a constitutional provision on
the right to life, recognized that the determination of whether a contraceptive device is an abortifacient is a question of
fact which should be left to the courts to decide on based on established evidence.155

From the discussions above, contraceptives that kill or destroy the fertilized ovum should be deemed an abortive and thus
prohibited. Conversely, contraceptives that actually prevent the union of the male sperm and the female ovum, and those
that similarly take action prior to fertilization should be deemed non-abortive, and thus, constitutionally permissible.
As emphasized by the Framers of the Constitution:

xxx xxx xxx

Mr. Gascon: xx xx. As I mentioned in my speech on the US bases, I am pro-life, to the point that I would like not only to
protect the life of the unborn, but also the lives of the millions of people in the world by fighting for a nuclear-free world.
I would just like to be assured of the legal and pragmatic implications of the term "protection of the life of the unborn
from the moment of conception." I raised some of these implications this afternoon when I interjected in the interpellation
of Commissioner Regalado. I would like to ask that question again for a categorical answer.

I mentioned that if we institutionalize the term "the life of the unborn from the moment of conception" we are also
actually saying "no," not "maybe," to certain contraceptives which are already being encouraged at this point in time. Is
that the sense of the committee or does it disagree with me?

Mr. Azcuna: No, Mr. Presiding Officer, because contraceptives would be preventive. There is no unborn yet. That is yet
unshaped.

Mr. Gascon: Yes, Mr. Presiding Officer, but I was speaking more about some contraceptives, such as the intra-uterine
device which actually stops the egg which has already been fertilized from taking route to the uterus. So if we say "from
the moment of conception," what really occurs is that some of these contraceptives will have to be unconstitutionalized.

Mr. Azcuna: Yes, to the extent that it is after the fertilization.

Mr. Gascon: Thank you, Mr. Presiding Officer.156

The fact that not all contraceptives are prohibited by the 1987 Constitution is even admitted by petitioners during the oral
arguments. There it was conceded that tubal ligation, vasectomy, even condoms are not classified as abortifacients. 157

Atty. Noche:

Before the union of the eggs, egg and the sperm, there is no life yet.

Justice Bersamin:

There is no life.

Atty. Noche:

So, there is no life to be protected.

Justice Bersamin:

To be protected.

Atty. Noche:

Under Section 12, yes.

Justice Bersamin:

So you have no objection to condoms?

Atty. Noche:

Not under Section 12, Article II.

Justice Bersamin:

Even if there is already information that condoms sometimes have porosity?

Atty. Noche:

Well, yes, Your Honor, there are scientific findings to that effect, Your Honor, but I am discussing here Section 12, Article
II, Your Honor, yes.

Justice Bersamin:

Alright.

Atty. Noche:

And it's not, I have to admit it's not an abortifacient, Your Honor. 158

Medical Meaning

That conception begins at fertilization is not bereft of medical foundation. Mosby s Medical, Nursing, and Allied Health
Dictionary defines conception as "the beginning of pregnancy usually taken to be the instant a spermatozoon enters an
ovum and forms a viable zygote."159

It describes fertilization as "the union of male and female gametes to form a zygote from which the embryo develops."160

The Textbook of Obstetrics (Physiological & Pathological Obstetrics), 161 used by medical schools in the Philippines, also
concludes that human life (human person) begins at the moment of fertilization with the union of the egg and the sperm
resulting in the formation of a new individual, with a unique genetic composition that dictates all developmental stages
that ensue.

Similarly, recent medical research on the matter also reveals that: "Human development begins after the union of male
and female gametes or germ cells during a process known as fertilization (conception). Fertilization is a sequence of events
that begins with the contact of a sperm (spermatozoon) with a secondary oocyte (ovum) and ends with the fusion of their
pronuclei (the haploid nuclei of the sperm and ovum) and the mingling of their chromosomes to form a new cell. This
fertilized ovum, known as a zygote, is a large diploid cell that is the beginning, or primordium, of a human being." 162

The authors of Human Embryology & Teratology163 mirror the same position. They wrote: "Although life is a continuous
process, fertilization is a critical landmark because, under ordinary circumstances, a new, genetically distinct human
organism is thereby formed.... The combination of 23 chromosomes present in each pronucleus results in 46
chromosomes in the zygote. Thus the diploid number is restored and the embryonic genome is formed. The embryo now
exists as a genetic unity."

In support of the RH Bill, The Philippine Medical Association came out with a "Paper on the Reproductive Health Bill
(Responsible Parenthood Bill)" and therein concluded that:

CONCLUSION

The PMA throws its full weight in supporting the RH Bill at the same time that PMA maintains its strong position that
fertilization is sacred because it is at this stage that conception, and thus human life, begins. Human lives are sacred from
the moment of conception, and that destroying those new lives is never licit, no matter what the purported good outcome
would be. In terms of biology and human embryology, a human being begins immediately at fertilization and after that,
there is no point along the continuous line of human embryogenesis where only a "potential" human being can be posited.
Any philosophical, legal, or political conclusion cannot escape this objective scientific fact.

The scientific evidence supports the conclusion that a zygote is a human organism and that the life of a new human being
commences at a scientifically well defined "moment of conception." This conclusion is objective, consistent with the
factual evidence, and independent of any specific ethical, moral, political, or religious view of human life or of human
embryos.164
Conclusion: The Moment of Conception is Reckoned from
Fertilization

In all, whether it be taken from a plain meaning, or understood under medical parlance, and more importantly, following
the intention of the Framers of the Constitution, the undeniable conclusion is that a zygote is a human organism and that
the life of a new human being commences at a scientifically well-defined moment of conception, that is, upon fertilization.

For the above reasons, the Court cannot subscribe to the theory advocated by Hon. Lagman that life begins at
implantation.165 According to him, "fertilization and conception are two distinct and successive stages in the reproductive
process. They are not identical and synonymous."166 Citing a letter of the WHO, he wrote that "medical authorities confirm
that the implantation of the fertilized ovum is the commencement of conception and it is only after implantation that
pregnancy can be medically detected."167

This theory of implantation as the beginning of life is devoid of any legal or scientific mooring. It does not pertain to the
beginning of life but to the viability of the fetus. The fertilized ovum/zygote is not an inanimate object - it is a living human
being complete with DNA and 46 chromosomes. 168 Implantation has been conceptualized only for convenience by those
who had population control in mind. To adopt it would constitute textual infidelity not only to the RH Law but also to the
Constitution.

Not surprisingly, even the OSG does not support this position.

If such theory would be accepted, it would unnervingly legitimize the utilization of any drug or device that would prevent
the implantation of the fetus at the uterine wall. It would be provocative and further aggravate religious-based divisiveness.

It would legally permit what the Constitution proscribes - abortion and abortifacients.

The RH Law and Abortion

The clear and unequivocal intent of the Framers of the 1987 Constitution in protecting the life of the unborn from
conception was to prevent the Legislature from enacting a measure legalizing abortion. It was so clear that even the Court
cannot interpret it otherwise. This intent of the Framers was captured in the record of the proceedings of the 1986
Constitutional Commission. Commissioner Bernardo Villegas, the principal proponent of the protection of the unborn from
conception, explained:

The intention .. .is to make sure that there would be no pro-abortion laws ever passed by Congress or any pro-abortion
decision passed by the Supreme Court.169

A reading of the RH Law would show that it is in line with this intent and actually proscribes abortion. While the Court has
opted not to make any determination, at this stage, when life begins, it finds that the RH Law itself clearly mandates that
protection be afforded from the moment of fertilization. As pointed out by Justice Carpio, the RH Law is replete with
provisions that embody the policy of the law to protect to the fertilized ovum and that it should be afforded safe travel to
the uterus for implantation.170

Moreover, the RH Law recognizes that abortion is a crime under Article 256 of the Revised Penal Code, which penalizes
the destruction or expulsion of the fertilized ovum. Thus:

1] xx x.

Section 4. Definition of Terms. - For the purpose of this Act, the following terms shall be defined as follows:

xxx.

(q) Reproductive health care refers to the access to a full range of methods, facilities, services and supplies that contribute
to reproductive health and well-being by addressing reproductive health-related problems. It also includes sexual health,
the purpose of which is the enhancement of life and personal relations. The elements of reproductive health care include
the following:
xxx.

(3) Proscription of abortion and management of abortion complications;

xxx.

2] xx x.

Section 4. x x x.

(s) Reproductive health rights refers to the rights of individuals and couples, to decide freely and responsibly whether or
not to have children; the number, spacing and timing of their children; to make other decisions concerning reproduction,
free of discrimination, coercion and violence; to have the information and means to do so; and to attain the highest
standard of sexual health and reproductive health: Provided, however, That reproductive health rights do not include
abortion, and access to abortifacients.

3] xx x.

SEC. 29. Repealing Clause. - Except for prevailing laws against abortion, any law, presidential decree or issuance, executive
order, letter of instruction, administrative order, rule or regulation contrary to or is inconsistent with the provisions of this
Act including Republic Act No. 7392, otherwise known as the Midwifery Act, is hereby repealed, modified or amended
accordingly.

The RH Law and Abortifacients

In carrying out its declared policy, the RH Law is consistent in prohibiting abortifacients. To be clear, Section 4(a) of the RH
Law defines an abortifacient as:

Section 4. Definition of Terms - x x x x

(a) Abortifacient refers to any drug or device that induces abortion or the destruction of a fetus inside the mother's womb
or the prevention of the fertilized ovum to reach and be implanted in the mother's womb upon determination of the FDA.

As stated above, the RH Law mandates that protection must be afforded from the moment of fertilization. By using the
word " or," the RH Law prohibits not only drugs or devices that prevent implantation, but also those that induce abortion
and those that induce the destruction of a fetus inside the mother's womb. Thus, an abortifacient is any drug or device
that either:

(a) Induces abortion; or

(b) Induces the destruction of a fetus inside the mother's womb; or

(c) Prevents the fertilized ovum to reach and be implanted in the mother's womb, upon determination of the FDA.

Contrary to the assertions made by the petitioners, the Court finds that the RH Law, consistent with the Constitution,
recognizes that the fertilized ovum already has life and that the State has a bounden duty to protect it. The conclusion
becomes clear because the RH Law, first, prohibits any drug or device that induces abortion (first kind), which, as discussed
exhaustively above, refers to that which induces the killing or the destruction of the fertilized ovum, and, second, prohibits
any drug or device the fertilized ovum to reach and be implanted in the mother's womb (third kind).

By expressly declaring that any drug or device that prevents the fertilized ovum to reach and be implanted in the mother's
womb is an abortifacient (third kind), the RH Law does not intend to mean at all that life only begins only at implantation,
as Hon. Lagman suggests. It also does not declare either that protection will only be given upon implantation, as the
petitioners likewise suggest. Rather, it recognizes that: one, there is a need to protect the fertilized ovum which already
has life, and two, the fertilized ovum must be protected the moment it becomes existent - all the way until it reaches and
implants in the mother's womb. After all, if life is only recognized and afforded protection from the moment the fertilized
ovum implants - there is nothing to prevent any drug or device from killing or destroying the fertilized ovum prior to
implantation.

From the foregoing, the Court finds that inasmuch as it affords protection to the fertilized ovum, the RH Law does not
sanction abortion. To repeat, it is the Court's position that life begins at fertilization, not at implantation. When a fertilized
ovum is implanted in the uterine wall , its viability is sustained but that instance of implantation is not the point of
beginning of life. It started earlier. And as defined by the RH Law, any drug or device that induces abortion, that is, which
kills or destroys the fertilized ovum or prevents the fertilized ovum to reach and be implanted in the mother's womb, is
an abortifacient.

Proviso Under Section 9 of the RH Law

This notwithstanding, the Court finds that the proviso under Section 9 of the law that "any product or supply included or
to be included in the EDL must have a certification from the FDA that said product and supply is made available on the
condition that it is not to be used as an abortifacient" as empty as it is absurd. The FDA, with all its expertise, cannot fully
attest that a drug or device will not all be used as an abortifacient, since the agency cannot be present in every instance
when the contraceptive product or supply will be used. 171

Pursuant to its declared policy of providing access only to safe, legal and non-abortifacient contraceptives, however, the
Court finds that the proviso of Section 9, as worded, should bend to the legislative intent and mean that "any product or
supply included or to be included in the EDL must have a certification from the FDA that said product and supply is made
available on the condition that it cannot be used as abortifacient." Such a construction is consistent with the proviso under
the second paragraph of the same section that provides:

Provided, further, That the foregoing offices shall not purchase or acquire by any means emergency contraceptive pills,
postcoital pills, abortifacients that will be used for such purpose and their other forms or equivalent.

Abortifacients under the RH-IRR

At this juncture, the Court agrees with ALFI that the authors of the RH-IRR gravely abused their office when they redefined
the meaning of abortifacient. The RH Law defines "abortifacient" as follows:

SEC. 4. Definition of Terms. - For the purpose of this Act, the following terms shall be defined as follows:

(a) Abortifacient refers to any drug or device that induces abortion or the destruction of a fetus inside the mother's womb
or the prevention of the fertilized ovum to reach and be implanted in the mother's womb upon determination of the FDA.

Section 3.0l (a) of the IRR, however, redefines "abortifacient" as:

Section 3.01 For purposes of these Rules, the terms shall be defined as follows:

a) Abortifacient refers to any drug or device that primarily induces abortion or the destruction of a fetus inside the
mother's womb or the prevention of the fertilized ovum to reach and be implanted in the mother's womb upon
determination of the Food and Drug Administration (FDA). [Emphasis supplied]

Again in Section 3.0lG) of the RH-IRR, "contraceptive," is redefined, viz:

j) Contraceptive refers to any safe, legal, effective and scientifically proven modern family planning method, device, or
health product, whether natural or artificial, that prevents pregnancy but does not primarily destroy a fertilized ovum or
prevent a fertilized ovum from being implanted in the mother's womb in doses of its approved indication as determined
by the Food and Drug Administration (FDA).

The above-mentioned section of the RH-IRR allows "contraceptives" and recognizes as "abortifacient" only those that
primarily induce abortion or the destruction of a fetus inside the mother's womb or the prevention of the fertilized ovum
to reach and be implanted in the mother's womb.172
This cannot be done.

In this regard, the observations of Justice Brion and Justice Del Castillo are well taken. As they pointed out, with the
insertion of the word "primarily," Section 3.0l(a) and G) of the RH-IRR173 must be struck down for being ultra vires.

Evidently, with the addition of the word "primarily," in Section 3.0l(a) and G) of the RH-IRR is indeed ultra vires. It
contravenes Section 4(a) of the RH Law and should, therefore, be declared invalid. There is danger that the insertion of
the qualifier "primarily" will pave the way for the approval of contraceptives which may harm or destroy the life of the
unborn from conception/fertilization in violation of Article II, Section 12 of the Constitution. With such qualification in the
RH-IRR, it appears to insinuate that a contraceptive will only be considered as an "abortifacient" if its sole known effect is
abortion or, as pertinent here, the prevention of the implantation of the fertilized ovum.

For the same reason, this definition of "contraceptive" would permit the approval of contraceptives which are actually
abortifacients because of their fail-safe mechanism.174

Also, as discussed earlier, Section 9 calls for the certification by the FDA that these contraceptives cannot act as abortive.
With this, together with the definition of an abortifacient under Section 4 (a) of the RH Law and its declared policy against
abortion, the undeniable conclusion is that contraceptives to be included in the PNDFS and the EDL will not only be those
contraceptives that do not have the primary action of causing abortion or the destruction of a fetus inside the mother's
womb or the prevention of the fertilized ovum to reach and be implanted in the mother's womb, but also those that do
not have the secondary action of acting the same way.

Indeed, consistent with the constitutional policy prohibiting abortion, and in line with the principle that laws should be
construed in a manner that its constitutionality is sustained, the RH Law and its implementing rules must be consistent
with each other in prohibiting abortion. Thus, the word " primarily" in Section 3.0l(a) and G) of the RH-IRR should be
declared void. To uphold the validity of Section 3.0l(a) and G) of the RH-IRR and prohibit only those contraceptives that
have the primary effect of being an abortive would effectively "open the floodgates to the approval of contraceptives
which may harm or destroy the life of the unborn from conception/fertilization in violation of Article II, Section 12 of the
Constitution."175

To repeat and emphasize, in all cases, the "principle of no abortion" embodied in the constitutional protection of life must
be upheld.

2-The Right to Health

The petitioners claim that the RH Law violates the right to health because it requires the inclusion of hormonal
contraceptives, intrauterine devices, injectables and family products and supplies in the National Drug Formulary and the
inclusion of the same in the regular purchase of essential medicines and supplies of all national hospitals. 176 Citing various
studies on the matter, the petitioners posit that the risk of developing breast and cervical cancer is greatly increased in
women who use oral contraceptives as compared to women who never use them. They point out that the risk is decreased
when the use of contraceptives is discontinued. Further, it is contended that the use of combined oral contraceptive pills
is associated with a threefold increased risk of venous thromboembolism, a twofold increased risk of ischematic stroke,
and an indeterminate effect on risk of myocardial infarction. 177 Given the definition of "reproductive health" and "sexual
health" under Sections 4(p)178 and (w)179 of the RH Law, the petitioners assert that the assailed legislation only seeks to
ensure that women have pleasurable and satisfying sex lives. 180

The OSG, however, points out that Section 15, Article II of the Constitution is not self-executory, it being a mere statement
of the administration's principle and policy. Even if it were self-executory, the OSG posits that medical authorities refute
the claim that contraceptive pose a danger to the health of women.181

The Court's Position

A component to the right to life is the constitutional right to health. In this regard, the Constitution is replete with
provisions protecting and promoting the right to health. Section 15, Article II of the Constitution provides:
Section 15. The State shall protect and promote the right to health of the people and instill health consciousness among
them.

A portion of Article XIII also specifically provides for the States' duty to provide for the health of the people, viz:

HEALTH

Section 11. The State shall adopt an integrated and comprehensive approach to health development which shall endeavor
to make essential goods, health and other social services available to all the people at affordable cost. There shall be
priority for the needs of the underprivileged, sick, elderly, disabled, women, and children. The State shall endeavor to
provide free medical care to paupers.

Section 12. The State shall establish and maintain an effective food and drug regulatory system and undertake appropriate
health, manpower development, and research, responsive to the country's health needs and problems.

Section 13. The State shall establish a special agency for disabled person for their rehabilitation, self-development, and
self-reliance, and their integration into the mainstream of society.

Finally, Section 9, Article XVI provides:

Section 9. The State shall protect consumers from trade malpractices and from substandard or hazardous products.

Contrary to the respondent's notion, however, these provisions are self-executing. Unless the provisions clearly express
the contrary, the provisions of the Constitution should be considered self-executory. There is no need for legislation to
implement these self-executing provisions.182 In Manila Prince Hotel v. GSIS,183 it was stated:

x x x Hence, unless it is expressly provided that a legislative act is necessary to enforce a constitutional mandate, the
presumption now is that all provisions of the constitution are self-executing. If the constitutional provisions are treated as
requiring legislation instead of self-executing, the legislature would have the power to ignore and practically nullify the
mandate of the fundamental law. This can be cataclysmic. That is why the prevailing view is, as it has always been, that

... in case of doubt, the Constitution should be considered self-executing rather than non-self-executing. . . . Unless the
contrary is clearly intended, the provisions of the Constitution should be considered self-executing, as a contrary rule
would give the legislature discretion to determine when, or whether, they shall be effective. These provisions would be
subordinated to the will of the lawmaking body, which could make them entirely meaningless by simply refusing to pass
the needed implementing statute. (Emphases supplied)

This notwithstanding, it bears mentioning that the petitioners, particularly ALFI, do not question contraception and
contraceptives per se.184 In fact, ALFI prays that the status quo - under R.A. No. 5921 and R.A. No. 4729, the sale and
distribution of contraceptives are not prohibited when they are dispensed by a prescription of a duly licensed by a
physician - be maintained.185

The legislative intent in the enactment of the RH Law in this regard is to leave intact the provisions of R.A. No. 4729. There
is no intention at all to do away with it. It is still a good law and its requirements are still in to be complied with. Thus, the
Court agrees with the observation of respondent Lagman that the effectivity of the RH Law will not lead to the unmitigated
proliferation of contraceptives since the sale, distribution and dispensation of contraceptive drugs and devices will still
require the prescription of a licensed physician. With R.A. No. 4729 in place, there exists adequate safeguards to ensure
the public that only contraceptives that are safe are made available to the public. As aptly explained by respondent Lagman:

D. Contraceptives cannot be
dispensed and used without
prescription

108. As an added protection to voluntary users of contraceptives, the same cannot be dispensed and used without
prescription.
109. Republic Act No. 4729 or "An Act to Regulate the Sale, Dispensation, and/ or Distribution of Contraceptive Drugs and
Devices" and Republic Act No. 5921 or "An Act Regulating the Practice of Pharmacy and Setting Standards of
Pharmaceutical Education in the Philippines and for Other Purposes" are not repealed by the RH Law and the provisions
of said Acts are not inconsistent with the RH Law.

110. Consequently, the sale, distribution and dispensation of contraceptive drugs and devices are particularly governed
by RA No. 4729 which provides in full:

"Section 1. It shall be unlawful for any person, partnership, or corporation, to sell, dispense or otherwise distribute
whether for or without consideration, any contraceptive drug or device, unless such sale, dispensation or distribution is
by a duly licensed drug store or pharmaceutical company and with the prescription of a qualified medical practitioner.

"Sec. 2 . For the purpose of this Act:

"(a) "Contraceptive drug" is any medicine, drug, chemical, or portion which is used exclusively for the purpose of
preventing fertilization of the female ovum: and

"(b) "Contraceptive device" is any instrument, device, material, or agent introduced into the female reproductive system
for the primary purpose of preventing conception.

"Sec. 3 Any person, partnership, or corporation, violating the provisions of this Act shall be punished with a fine of not
more than five hundred pesos or an imprisonment of not less than six months or more than one year or both in the
discretion of the Court.

"This Act shall take effect upon its approval.

"Approved: June 18, 1966"

111. Of the same import, but in a general manner, Section 25 of RA No. 5921 provides:

"Section 25. Sale of medicine, pharmaceuticals, drugs and devices. No medicine, pharmaceutical, or drug of whatever
nature and kind or device shall be compounded, dispensed, sold or resold, or otherwise be made available to the
consuming public except through a prescription drugstore or hospital pharmacy, duly established in accordance with the
provisions of this Act.

112. With all of the foregoing safeguards, as provided for in the RH Law and other relevant statutes, the pretension of the
petitioners that the RH Law will lead to the unmitigated proliferation of contraceptives, whether harmful or not, is
completely unwarranted and baseless.186 [Emphases in the Original. Underlining supplied.]

In Re: Section 10 of the RH Law:

The foregoing safeguards should be read in connection with Section 10 of the RH Law which provides:

SEC. 10. Procurement and Distribution of Family Planning Supplies. - The DOH shall procure, distribute to LGUs and monitor
the usage of family planning supplies for the whole country. The DOH shall coordinate with all appropriate local
government bodies to plan and implement this procurement and distribution program. The supply and budget allotments
shall be based on, among others, the current levels and projections of the following:

(a) Number of women of reproductive age and couples who want to space or limit their children;

(b) Contraceptive prevalence rate, by type of method used; and

(c) Cost of family planning supplies.

Provided, That LGUs may implement its own procurement, distribution and monitoring program consistent with the
overall provisions of this Act and the guidelines of the DOH.
Thus, in the distribution by the DOH of contraceptive drugs and devices, it must consider the provisions of R.A. No. 4729,
which is still in effect, and ensure that the contraceptives that it will procure shall be from a duly licensed drug store or
pharmaceutical company and that the actual dispensation of these contraceptive drugs and devices will done following a
prescription of a qualified medical practitioner. The distribution of contraceptive drugs and devices must not be
indiscriminately done. The public health must be protected by all possible means. As pointed out by Justice De Castro, a
heavy responsibility and burden are assumed by the government in supplying contraceptive drugs and devices, for it may
be held accountable for any injury, illness or loss of life resulting from or incidental to their use. 187

At any rate, it bears pointing out that not a single contraceptive has yet been submitted to the FDA pursuant to the RH
Law. It behooves the Court to await its determination which drugs or devices are declared by the FDA as safe, it being the
agency tasked to ensure that food and medicines available to the public are safe for public consumption. Consequently,
the Court finds that, at this point, the attack on the RH Law on this ground is premature. Indeed, the various kinds of
contraceptives must first be measured up to the constitutional yardstick as expounded herein, to be determined as the
case presents itself.

At this point, the Court is of the strong view that Congress cannot legislate that hormonal contraceptives and intra-uterine
devices are safe and non-abortifacient. The first sentence of Section 9 that ordains their inclusion by the National Drug
Formulary in the EDL by using the mandatory "shall" is to be construed as operative only after they have been tested,
evaluated, and approved by the FDA. The FDA, not Congress, has the expertise to determine whether a particular
hormonal contraceptive or intrauterine device is safe and non-abortifacient. The provision of the third sentence
concerning the requirements for the inclusion or removal of a particular family planning supply from the EDL supports this
construction.

Stated differently, the provision in Section 9 covering the inclusion of hormonal contraceptives, intra-uterine devices,
injectables, and other safe, legal, non-abortifacient and effective family planning products and supplies by the National
Drug Formulary in the EDL is not mandatory. There must first be a determination by the FDA that they are in fact safe,
legal, non-abortifacient and effective family planning products and supplies. There can be no predetermination by
Congress that the gamut of contraceptives are "safe, legal, non-abortifacient and effective" without the proper scientific
examination.

3 -Freedom of Religion
and the Right to Free Speech

Position of the Petitioners:

1. On Contraception

While contraceptives and procedures like vasectomy and tubal ligation are not covered by the constitutional proscription,
there are those who, because of their religious education and background, sincerely believe that contraceptives, whether
abortifacient or not, are evil. Some of these are medical practitioners who essentially claim that their beliefs prohibit not
only the use of contraceptives but also the willing participation and cooperation in all things dealing with contraceptive
use. Petitioner PAX explained that "contraception is gravely opposed to marital chastity, it is contrary to the good of the
transmission of life, and to the reciprocal self-giving of the spouses; it harms true love and denies the sovereign rule of
God in the transmission of Human life."188

The petitioners question the State-sponsored procurement of contraceptives, arguing that the expenditure of their taxes
on contraceptives violates the guarantee of religious freedom since contraceptives contravene their religious beliefs.189

2. On Religious Accommodation and

The Duty to Refer

Petitioners Imbong and Luat note that while the RH Law attempts to address religious sentiments by making provisions
for a conscientious objector, the constitutional guarantee is nonetheless violated because the law also imposes upon the
conscientious objector the duty to refer the patient seeking reproductive health services to another medical practitioner
who would be able to provide for the patient's needs. For the petitioners, this amounts to requiring the conscientious
objector to cooperate with the very thing he refuses to do without violating his/her religious beliefs.190

They further argue that even if the conscientious objector's duty to refer is recognized, the recognition is unduly limited,
because although it allows a conscientious objector in Section 23 (a)(3) the option to refer a patient seeking reproductive
health services and information - no escape is afforded the conscientious objector in Section 23 (a)(l) and (2), i.e. against
a patient seeking reproductive health procedures. They claim that the right of other individuals to conscientiously object,
such as: a) those working in public health facilities referred to in Section 7; b) public officers involved in the implementation
of the law referred to in Section 23(b ); and c) teachers in public schools referred to in Section 14 of the RH Law, are also
not recognize.191

Petitioner Echavez and the other medical practitioners meanwhile, contend that the requirement to refer the matter to
another health care service provider is still considered a compulsion on those objecting healthcare service providers. They
add that compelling them to do the act against their will violates the Doctrine of Benevolent Neutrality. Sections 9, 14 and
1 7 of the law are too secular that they tend to disregard the religion of Filipinos. Authorizing the use of contraceptives
with abortive effects, mandatory sex education, mandatory pro-bono reproductive health services to indigents encroach
upon the religious freedom of those upon whom they are required. 192

Petitioner CFC also argues that the requirement for a conscientious objector to refer the person seeking reproductive
health care services to another provider infringes on one's freedom of religion as it forces the objector to become an
unwilling participant in the commission of a serious sin under Catholic teachings. While the right to act on one's belief may
be regulated by the State, the acts prohibited by the RH Law are passive acts which produce neither harm nor injury to
the public.193

Petitioner CFC adds that the RH Law does not show compelling state interest to justify regulation of religious freedom
because it mentions no emergency, risk or threat that endangers state interests. It does not explain how the rights of the
people (to equality, non-discrimination of rights, sustainable human development, health, education, information, choice
and to make decisions according to religious convictions, ethics, cultural beliefs and the demands of responsible
parenthood) are being threatened or are not being met as to justify the impairment of religious freedom. 194

Finally, the petitioners also question Section 15 of the RH Law requiring would-be couples to attend family planning and
responsible parenthood seminars and to obtain a certificate of compliance. They claim that the provision forces individuals
to participate in the implementation of the RH Law even if it contravenes their religious beliefs. 195 As the assailed law
dangles the threat of penalty of fine and/or imprisonment in case of non-compliance with its provisions, the petitioners
claim that the RH Law forcing them to provide, support and facilitate access and information to contraception against
their beliefs must be struck down as it runs afoul to the constitutional guarantee of religious freedom.

The Respondents' Positions

The respondents, on the other hand, contend that the RH Law does not provide that a specific mode or type of
contraceptives be used, be it natural or artificial. It neither imposes nor sanctions any religion or belief.196 They point out
that the RH Law only seeks to serve the public interest by providing accessible, effective and quality reproductive health
services to ensure maternal and child health, in line with the State's duty to bring to reality the social justice health
guarantees of the Constitution,197 and that what the law only prohibits are those acts or practices, which deprive others
of their right to reproductive health.198 They assert that the assailed law only seeks to guarantee informed choice, which
is an assurance that no one will be compelled to violate his religion against his free will. 199

The respondents add that by asserting that only natural family planning should be allowed, the petitioners are effectively
going against the constitutional right to religious freedom, the same right they invoked to assail the constitutionality of
the RH Law.200 In other words, by seeking the declaration that the RH Law is unconstitutional, the petitioners are asking
that the Court recognize only the Catholic Church's sanctioned natural family planning methods and impose this on the
entire citizenry.201
With respect to the duty to refer, the respondents insist that the same does not violate the constitutional guarantee of
religious freedom, it being a carefully balanced compromise between the interests of the religious objector, on one hand,
who is allowed to keep silent but is required to refer -and that of the citizen who needs access to information and who
has the right to expect that the health care professional in front of her will act professionally. For the respondents, the
concession given by the State under Section 7 and 23(a)(3) is sufficient accommodation to the right to freely exercise one's
religion without unnecessarily infringing on the rights of others. 202

Whatever burden is placed on the petitioner's religious freedom is minimal as the duty to refer is limited in duration,
location and impact.203

Regarding mandatory family planning seminars under Section 15 , the respondents claim that it is a reasonable regulation
providing an opportunity for would-be couples to have access to information regarding parenthood, family planning,
breastfeeding and infant nutrition. It is argued that those who object to any information received on account of their
attendance in the required seminars are not compelled to accept information given to them. They are completely free to
reject any information they do not agree with and retain the freedom to decide on matters of family life without
intervention of the State.204

For their part, respondents De Venecia et al., dispute the notion that natural family planning is the only method acceptable
to Catholics and the Catholic hierarchy. Citing various studies and surveys on the matter, they highlight the changing stand
of the Catholic Church on contraception throughout the years and note the general acceptance of the benefits of
contraceptives by its followers in planning their families.

The Church and The State

At the outset, it cannot be denied that we all live in a heterogeneous society. It is made up of people of diverse ethnic,
cultural and religious beliefs and backgrounds. History has shown us that our government, in law and in practice, has
allowed these various religious, cultural, social and racial groups to thrive in a single society together. It has embraced
minority groups and is tolerant towards all - the religious people of different sects and the non-believers. The undisputed
fact is that our people generally believe in a deity, whatever they conceived Him to be, and to whom they call for guidance
and enlightenment in crafting our fundamental law. Thus, the preamble of the present Constitution reads:

We, the sovereign Filipino people, imploring the aid of Almighty God, in order to build a just and humane society, and
establish a Government that shall embody our ideals and aspirations, promote the common good, conserve and develop
our patrimony, and secure to ourselves and our posterity, the blessings of independence and democracy under the rule
of law and a regime of truth, justice, freedom, love, equality, and peace, do ordain and promulgate this Constitution.

The Filipino people in "imploring the aid of Almighty God " manifested their spirituality innate in our nature and
consciousness as a people, shaped by tradition and historical experience. As this is embodied in the preamble, it means
that the State recognizes with respect the influence of religion in so far as it instills into the mind the purest principles of
morality.205 Moreover, in recognition of the contributions of religion to society, the 1935, 1973 and 1987 constitutions
contain benevolent and accommodating provisions towards religions such as tax exemption of church property, salary of
religious officers in government institutions, and optional religious instructions in public schools.

The Framers, however, felt the need to put up a strong barrier so that the State would not encroach into the affairs of the
church, and vice-versa. The principle of separation of Church and State was, thus, enshrined in Article II, Section 6 of the
1987 Constitution, viz:

Section 6. The separation of Church and State shall be inviolable.

Verily, the principle of separation of Church and State is based on mutual respect.1wphi1 Generally, the State cannot
meddle in the internal affairs of the church, much less question its faith and dogmas or dictate upon it. It cannot favor one
religion and discriminate against another. On the other hand, the church cannot impose its beliefs and convictions on the
State and the rest of the citizenry. It cannot demand that the nation follow its beliefs, even if it sincerely believes that they
are good for the country.
Consistent with the principle that not any one religion should ever be preferred over another, the Constitution in the
above-cited provision utilizes the term "church" in its generic sense, which refers to a temple, a mosque, an iglesia, or any
other house of God which metaphorically symbolizes a religious organization. Thus, the "Church" means the religious
congregations collectively.

Balancing the benefits that religion affords and the need to provide an ample barrier to protect the State from the pursuit
of its secular objectives, the Constitution lays down the following mandate in Article III, Section 5 and Article VI, Section
29 (2), of the 1987 Constitution:

Section. 5. 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.

Section 29.

xxx.

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, 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.

In short, the constitutional assurance of religious freedom provides two guarantees: the Establishment Clause and the
Free Exercise Clause.

The establishment clause "principally prohibits the State from sponsoring any religion or favoring any religion as against
other religions. It mandates a strict neutrality in affairs among religious groups." 206 Essentially, it prohibits the
establishment of a state religion and the use of public resources for the support or prohibition of a religion.

On the other hand, the basis of the free exercise clause is the respect for the inviolability of the human
conscience.207 Under this part of religious freedom guarantee, the State is prohibited from unduly interfering with the
outside manifestations of one's belief and faith.208 Explaining the concept of religious freedom, the Court, in Victoriano v.
Elizalde Rope Workers Union209 wrote:

The constitutional provisions not only prohibits legislation for the support of any religious tenets or the modes of worship
of any sect, thus forestalling compulsion by law of the acceptance of any creed or the practice of any form of worship (U.S.
Ballard, 322 U.S. 78, 88 L. ed. 1148, 1153), but also assures the free exercise of one's chosen form of religion within limits
of utmost amplitude. It has been said that the religion clauses of the Constitution are all designed to protect the broadest
possible liberty of conscience, to allow each man to believe as his conscience directs, to profess his beliefs, and to live as
he believes he ought to live, consistent with the liberty of others and with the common good. Any legislation whose effect
or purpose is to impede the observance of one or all religions, or to discriminate invidiously between the religions, is
invalid, even though the burden may be characterized as being only indirect. (Sherbert v. Verner, 374 U.S. 398, 10 L.ed.2d
965, 83 S. Ct. 1970) But if the state regulates conduct by enacting, within its power, a general law which has for its purpose
and effect to advance the state's secular goals, the statute is valid despite its indirect burden on religious observance,
unless the state can accomplish its purpose without imposing such burden. (Braunfeld v. Brown, 366 U.S. 599, 6 Led. 2d.
563, 81 S. Ct. 144; McGowan v. Maryland, 366 U.S. 420, 444-5 and 449).

As expounded in Escritor,

The establishment and free exercise clauses were not designed to serve contradictory purposes. They have a single goal-
to promote freedom of individual religious beliefs and practices. In simplest terms, the free exercise clause prohibits
government from inhibiting religious beliefs with penalties for religious beliefs and practice, while the establishment
clause prohibits government from inhibiting religious belief with rewards for religious beliefs and practices. In other words,
the two religion clauses were intended to deny government the power to use either the carrot or the stick to influence
individual religious beliefs and practices.210

Corollary to the guarantee of free exercise of one's religion is the principle that the guarantee of religious freedom is
comprised of two parts: the freedom to believe, and the freedom to act on one's belief. The first part is absolute. As
explained in Gerona v. Secretary of Education: 211

The realm of belief and creed is infinite and limitless bounded only by one's imagination and thought. So is the freedom
of belief, including religious belief, limitless and without bounds. One may believe in most anything, however strange,
bizarre and unreasonable the same may appear to others, even heretical when weighed in the scales of orthodoxy or
doctrinal standards. But between the freedom of belief and the exercise of said belief, there is quite a stretch of road to
travel.212

The second part however, is limited and subject to the awesome power of the State and can be enjoyed only with proper
regard to the rights of others. It is "subject to regulation where the belief is translated into external acts that affect the
public welfare."213

Legislative Acts and the

Free Exercise Clause

Thus, in case of conflict between the free exercise clause and the State, the Court adheres to the doctrine of benevolent
neutrality. This has been clearly decided by the Court in Estrada v. Escritor, (Escritor) 214 where it was stated "that
benevolent neutrality-accommodation, whether mandatory or permissive, is the spirit, intent and framework underlying
the Philippine Constitution."215 In the same case, it was further explained that"

The benevolent neutrality theory believes that with respect to these governmental actions, accommodation of religion
may be allowed, not to promote the government's favored form of religion, but to allow individuals and groups to exercise
their religion without hindrance. "The purpose of accommodation is to remove a burden on, or facilitate the exercise of,
a person's or institution's religion."216 "What is sought under the theory of accommodation is not a declaration of
unconstitutionality of a facially neutral law, but an exemption from its application or its 'burdensome effect,' whether by
the legislature or the courts."217

In ascertaining the limits of the exercise of religious freedom, the compelling state interest test is proper.218Underlying
the compelling state interest test is the notion that free exercise is a fundamental right and that laws burdening it should
be subject to strict scrutiny.219 In Escritor, it was written:

Philippine jurisprudence articulates several tests to determine these limits. Beginning with the first case on the Free
Exercise Clause, American Bible Society, the Court mentioned the "clear and present danger" test but did not employ it.
Nevertheless, this test continued to be cited in subsequent cases on religious liberty. The Gerona case then pronounced
that the test of permissibility of religious freedom is whether it violates the established institutions of society and law. The
Victoriano case mentioned the "immediate and grave danger" test as well as the doctrine that a law of general applicability
may burden religious exercise provided the law is the least restrictive means to accomplish the goal of the law. The case
also used, albeit inappropriately, the "compelling state interest" test. After Victoriano , German went back to the Gerona
rule. Ebralinag then employed the "grave and immediate danger" test and overruled the Gerona test. The fairly recent
case of Iglesia ni Cristo went back to the " clear and present danger" test in the maiden case of A merican Bible Society.
Not surprisingly, all the cases which employed the "clear and present danger" or "grave and immediate danger" test
involved, in one form or another, religious speech as this test is often used in cases on freedom of expression. On the
other hand, the Gerona and German cases set the rule that religious freedom will not prevail over established institutions
of society and law. Gerona, however, which was the authority cited by German has been overruled by Ebralinag which
employed the "grave and immediate danger" test . Victoriano was the only case that employed the "compelling state
interest" test, but as explained previously, the use of the test was inappropriate to the facts of the case.
The case at bar does not involve speech as in A merican Bible Society, Ebralinag and Iglesia ni Cristo where the "clear and
present danger" and "grave and immediate danger" tests were appropriate as speech has easily discernible or immediate
effects. The Gerona and German doctrine, aside from having been overruled, is not congruent with the benevolent
neutrality approach, thus not appropriate in this jurisdiction. Similar to Victoriano, the present case involves purely
conduct arising from religious belief. The "compelling state interest" test is proper where conduct is involved for the whole
gamut of human conduct has different effects on the state's interests: some effects may be immediate and short-term
while others delayed and far-reaching. A test that would protect the interests of the state in preventing a substantive evil,
whether immediate or delayed, is therefore necessary. However, not any interest of the state would suffice to prevail over
the right to religious freedom as this is a fundamental right that enjoys a preferred position in the hierarchy of rights - "the
most inalienable and sacred of all human rights", in the words of Jefferson. This right is sacred for an invocation of the
Free Exercise Clause is an appeal to a higher sovereignty. The entire constitutional order of limited government is premised
upon an acknowledgment of such higher sovereignty, thus the Filipinos implore the "aid of Almighty God in order to build
a just and humane society and establish a government." As held in Sherbert, only the gravest abuses, endangering
paramount interests can limit this fundamental right. A mere balancing of interests which balances a right with just a
colorable state interest is therefore not appropriate. Instead, only a compelling interest of the state can prevail over the
fundamental right to religious liberty. The test requires the state to carry a heavy burden, a compelling one, for to do
otherwise would allow the state to batter religion, especially the less powerful ones until they are destroyed. In
determining which shall prevail between the state's interest and religious liberty, reasonableness shall be the guide. The
"compelling state interest" serves the purpose of revering religious liberty while at the same time affording protection to
the paramount interests of the state. This was the test used in Sherbert which involved conduct, i.e. refusal to work on
Saturdays. In the end, the "compelling state interest" test, by upholding the paramount interests of the state, seeks to
protect the very state, without which, religious liberty will not be preserved. [Emphases in the original. Underlining
supplied.]

The Court's Position

In the case at bench, it is not within the province of the Court to determine whether the use of contraceptives or one's
participation in the support of modem reproductive health measures is moral from a religious standpoint or whether the
same is right or wrong according to one's dogma or belief. For the Court has declared that matters dealing with "faith,
practice, doctrine, form of worship, ecclesiastical law, custom and rule of a church ... are unquestionably ecclesiastical
matters which are outside the province of the civil courts." 220 The jurisdiction of the Court extends only to public and
secular morality. Whatever pronouncement the Court makes in the case at bench should be understood only in this realm
where it has authority. Stated otherwise, while the Court stands without authority to rule on ecclesiastical matters, as
vanguard of the Constitution, it does have authority to determine whether the RH Law contravenes the guarantee of
religious freedom.

At first blush, it appears that the RH Law recognizes and respects religion and religious beliefs and convictions. It is replete
with assurances the no one can be compelled to violate the tenets of his religion or defy his religious convictions against
his free will. Provisions in the RH Law respecting religious freedom are the following:

1. The State recognizes and guarantees the human rights of all persons including their right to equality and
nondiscrimination of these rights, the right to sustainable human development, the right to health which includes
reproductive health, the right to education and information, and the right to choose and make decisions for themselves
in accordance with their religious convictions, ethics, cultural beliefs, and the demands of responsible parenthood.
[Section 2, Declaration of Policy]

2 . The State recognizes marriage as an inviolable social institution and the foundation of the family which in turn is the
foundation of the nation. Pursuant thereto, the State shall defend:

(a) The right of spouses to found a family in accordance with their religious convictions and the demands of responsible
parenthood." [Section 2, Declaration of Policy]
3. The State shall promote and provide information and access, without bias, to all methods of family planning, including
effective natural and modern methods which have been proven medically safe, legal, non-abortifacient, and effective in
accordance with scientific and evidence-based medical research standards such as those registered and approved by the
FDA for the poor and marginalized as identified through the NHTS-PR and other government measures of identifying
marginalization: Provided, That the State shall also provide funding support to promote modern natural methods of family
planning, especially the Billings Ovulation Method, consistent with the needs of acceptors and their religious convictions.
[Section 3(e), Declaration of Policy]

4. The State shall promote programs that: (1) enable individuals and couples to have the number of children they desire
with due consideration to the health, particularly of women, and the resources available and affordable to them and in
accordance with existing laws, public morals and their religious convictions. [Section 3CDJ

5. The State shall respect individuals' preferences and choice of family planning methods that are in accordance with their
religious convictions and cultural beliefs, taking into consideration the State's obligations under various human rights
instruments. [Section 3(h)]

6. Active participation by nongovernment organizations (NGOs) , women's and people's organizations, civil society, faith-
based organizations, the religious sector and communities is crucial to ensure that reproductive health and population
and development policies, plans, and programs will address the priority needs of women, the poor, and the marginalized.
[Section 3(i)]

7. Responsible parenthood refers to the will and ability of a parent to respond to the needs and aspirations of the family
and children. It is likewise a shared responsibility between parents to determine and achieve the desired number of
children, spacing and timing of their children according to their own family life aspirations, taking into account
psychological preparedness, health status, sociocultural and economic concerns consistent with their religious convictions.
[Section 4(v)] (Emphases supplied)

While the Constitution prohibits abortion, laws were enacted allowing the use of contraceptives. To some medical
practitioners, however, the whole idea of using contraceptives is an anathema. Consistent with the principle of benevolent
neutrality, their beliefs should be respected.

The Establishment Clause

and Contraceptives

In the same breath that the establishment clause restricts what the government can do with religion, it also limits what
religious sects can or cannot do with the government. They can neither cause the government to adopt their particular
doctrines as policy for everyone, nor can they not cause the government to restrict other groups. To do so, in simple terms,
would cause the State to adhere to a particular religion and, thus, establishing a state religion.

Consequently, the petitioners are misguided in their supposition that the State cannot enhance its population control
program through the RH Law simply because the promotion of contraceptive use is contrary to their religious beliefs.
Indeed, the State is not precluded to pursue its legitimate secular objectives without being dictated upon by the policies
of any one religion. One cannot refuse to pay his taxes simply because it will cloud his conscience. The demarcation line
between Church and State demands that one render unto Caesar the things that are Caesar's and unto God the things
that are God's.221

The Free Exercise Clause and the Duty to Refer

While the RH Law, in espousing state policy to promote reproductive health manifestly respects diverse religious beliefs
in line with the Non-Establishment Clause, the same conclusion cannot be reached with respect to Sections 7, 23 and 24
thereof. The said provisions commonly mandate that a hospital or a medical practitioner to immediately refer a person
seeking health care and services under the law to another accessible healthcare provider despite their conscientious
objections based on religious or ethical beliefs.
In a situation where the free exercise of religion is allegedly burdened by government legislation or practice, the
compelling state interest test in line with the Court's espousal of the Doctrine of Benevolent Neutrality in Escritor, finds
application. In this case, the conscientious objector's claim to religious freedom would warrant an exemption from
obligations under the RH Law, unless the government succeeds in demonstrating a more compelling state interest in the
accomplishment of an important secular objective. Necessarily so, the plea of conscientious objectors for exemption from
the RH Law deserves no less than strict scrutiny.

In applying the test, the first inquiry is whether a conscientious objector's right to religious freedom has been burdened.
As in Escritor, there is no doubt that an intense tug-of-war plagues a conscientious objector. One side coaxes him into
obedience to the law and the abandonment of his religious beliefs, while the other entices him to a clean conscience yet
under the pain of penalty. The scenario is an illustration of the predicament of medical practitioners whose religious beliefs
are incongruent with what the RH Law promotes.

The Court is of the view that the obligation to refer imposed by the RH Law violates the religious belief and conviction of
a conscientious objector. Once the medical practitioner, against his will, refers a patient seeking information on modem
reproductive health products, services, procedures and methods, his conscience is immediately burdened as he has been
compelled to perform an act against his beliefs. As Commissioner Joaquin A. Bernas (Commissioner Bernas) has written,
"at the basis of the free exercise clause is the respect for the inviolability of the human conscience. 222

Though it has been said that the act of referral is an opt-out clause, it is, however, a false compromise because it makes
pro-life health providers complicit in the performance of an act that they find morally repugnant or offensive. They cannot,
in conscience, do indirectly what they cannot do directly. One may not be the principal, but he is equally guilty if he abets
the offensive act by indirect participation.

Moreover, the guarantee of religious freedom is necessarily intertwined with the right to free speech, it being an
externalization of one's thought and conscience. This in turn includes the right to be silent. With the constitutional
guarantee of religious freedom follows the protection that should be afforded to individuals in communicating their beliefs
to others as well as the protection for simply being silent. The Bill of Rights guarantees the liberty of the individual to utter
what is in his mind and the liberty not to utter what is not in his mind.223 While the RH Law seeks to provide freedom of
choice through informed consent, freedom of choice guarantees the liberty of the religious conscience and prohibits any
degree of compulsion or burden, whether direct or indirect, in the practice of one's religion. 224

In case of conflict between the religious beliefs and moral convictions of individuals, on one hand, and the interest of the
State, on the other, to provide access and information on reproductive health products, services, procedures and methods
to enable the people to determine the timing, number and spacing of the birth of their children, the Court is of the strong
view that the religious freedom of health providers, whether public or private, should be accorded primacy. Accordingly,
a conscientious objector should be exempt from compliance with the mandates of the RH Law. If he would be compelled
to act contrary to his religious belief and conviction, it would be violative of "the principle of non-coercion" enshrined in
the constitutional right to free exercise of religion.

Interestingly, on April 24, 2013, Scotland's Inner House of the Court of Session, found in the case of Doogan and Wood v.
NHS Greater Glasgow and Clyde Health Board, 225 that the midwives claiming to be conscientious objectors under the
provisions of Scotland's Abortion Act of 1967, could not be required to delegate, supervise or support staff on their labor
ward who were involved in abortions.226 The Inner House stated "that if 'participation' were defined according to whether
the person was taking part 'directly' or ' indirectly' this would actually mean more complexity and uncertainty."227

While the said case did not cover the act of referral, the applicable principle was the same - they could not be forced to
assist abortions if it would be against their conscience or will.

Institutional Health Providers

The same holds true with respect to non-maternity specialty hospitals and hospitals owned and operated by a religious
group and health care service providers. Considering that Section 24 of the RH Law penalizes such institutions should they
fail or refuse to comply with their duty to refer under Section 7 and Section 23(a)(3), the Court deems that it must be
struck down for being violative of the freedom of religion. The same applies to Section 23(a)(l) and (a)(2) in relation to
Section 24, considering that in the dissemination of information regarding programs and services and in the performance
of reproductive health procedures, the religious freedom of health care service providers should be respected.

In the case of Islamic Da'wah Council of the Philippines, Inc. v. Office of the Executive Secretary 228 it was stressed:

Freedom of religion was accorded preferred status by the framers of our fundamental law. And this Court has consistently
affirmed this preferred status, well aware that it is "designed to protect the broadest possible liberty of conscience, to
allow each man to believe as his conscience directs, to profess his beliefs, and to live as he believes he ought to live,
consistent with the liberty of others and with the common good." 10

The Court is not oblivious to the view that penalties provided by law endeavour to ensure compliance. Without set
consequences for either an active violation or mere inaction, a law tends to be toothless and ineffectual. Nonetheless,
when what is bartered for an effective implementation of a law is a constitutionally-protected right the Court firmly
chooses to stamp its disapproval. The punishment of a healthcare service provider, who fails and/or refuses to refer a
patient to another, or who declines to perform reproductive health procedure on a patient because incompatible religious
beliefs, is a clear inhibition of a constitutional guarantee which the Court cannot allow.

The Implementing Rules and Regulation (RH-IRR)

The last paragraph of Section 5.24 of the RH-IRR reads:

Provided, That skilled health professional such as provincial, city or municipal health officers, chiefs of hospital, head
nurses, supervising midwives, among others, who by virtue of their office are specifically charged with the duty to
implement the provisions of the RPRH Act and these Rules, cannot be considered as conscientious objectors.

This is discriminatory and violative of the equal protection clause. The conscientious objection clause should be equally
protective of the religious belief of public health officers. There is no perceptible distinction why they should not be
considered exempt from the mandates of the law. The protection accorded to other conscientious objectors should
equally apply to all medical practitioners without distinction whether they belong to the public or private sector. After all,
the freedom to believe is intrinsic in every individual and the protective robe that guarantees its free exercise is not taken
off even if one acquires employment in the government.

It should be stressed that intellectual liberty occupies a place inferior to none in the hierarchy of human values. The mind
must be free to think what it wills, whether in the secular or religious sphere, to give expression to its beliefs by oral
discourse or through the media and, thus, seek other candid views in occasions or gatherings or in more permanent
aggrupation. Embraced in such concept then are freedom of religion, freedom of speech, of the press, assembly and
petition, and freedom of association.229

The discriminatory provision is void not only because no such exception is stated in the RH Law itself but also because it
is violative of the equal protection clause in the Constitution. Quoting respondent Lagman, if there is any conflict between
the RH-IRR and the RH Law, the law must prevail.

Justice Mendoza:

I'll go to another point. The RH law .. .in your Comment- in-Intervention on page 52, you mentioned RH Law is replete with
provisions in upholding the freedom of religion and respecting religious convictions. Earlier, you affirmed this with
qualifications. Now, you have read, I presumed you have read the IRR-Implementing Rules and Regulations of the RH Bill?

Congressman Lagman:

Yes, Your Honor, I have read but I have to admit, it's a long IRR and I have not thoroughly dissected the nuances of the
provisions.

Justice Mendoza:
I will read to you one provision. It's Section 5.24. This I cannot find in the RH Law. But in the IRR it says: " .... skilled health
professionals such as provincial, city or municipal health officers, chief of hospitals, head nurses, supervising midwives,
among others, who by virtue of their office are specifically charged with the duty to implement the provisions of the RPRH
Act and these Rules, cannot be considered as conscientious objectors." Do you agree with this?

Congressman Lagman:

I will have to go over again the provisions, Your Honor.

Justice Mendoza:

In other words, public health officers in contrast to the private practitioners who can be conscientious objectors, skilled
health professionals cannot be considered conscientious objectors. Do you agree with this? Is this not against the
constitutional right to the religious belief?

Congressman Lagman:

Your Honor, if there is any conflict between the IRR and the law, the law must prevail. 230

Compelling State Interest

The foregoing discussion then begets the question on whether the respondents, in defense of the subject provisions, were
able to: 1] demonstrate a more compelling state interest to restrain conscientious objectors in their choice of services to
render; and 2] discharge the burden of proof that the obligatory character of the law is the least intrusive means to achieve
the objectives of the law.

Unfortunately, a deep scrutiny of the respondents' submissions proved to be in vain. The OSG was curiously silent in the
establishment of a more compelling state interest that would rationalize the curbing of a conscientious objector's right
not to adhere to an action contrary to his religious convictions. During the oral arguments, the OSG maintained the same
silence and evasion. The Transcripts of the Stenographic Notes disclose the following:

Justice De Castro:

Let's go back to the duty of the conscientious objector to refer. ..

Senior State Solicitor Hilbay:

Yes, Justice.

Justice De Castro:

... which you are discussing awhile ago with Justice Abad. What is the compelling State interest in imposing this duty to
refer to a conscientious objector which refuses to do so because of his religious belief?

Senior State Solicitor Hilbay:

Ahh, Your Honor, ..

Justice De Castro:

What is the compelling State interest to impose this burden?

Senior State Solicitor Hilbay:

In the first place, Your Honor, I don't believe that the standard is a compelling State interest, this is an ordinary health
legislation involving professionals. This is not a free speech matter or a pure free exercise matter. This is a regulation by
the State of the relationship between medical doctors and their patients. 231
Resultantly, the Court finds no compelling state interest which would limit the free exercise clause of the conscientious
objectors, however few in number. Only the prevention of an immediate and grave danger to the security and welfare of
the community can justify the infringement of religious freedom. If the government fails to show the seriousness and
immediacy of the threat, State intrusion is constitutionally unacceptable. 232

Freedom of religion means more than just the freedom to believe. It also means the freedom to act or not to act according
to what one believes. And this freedom is violated when one is compelled to act against one's belief or is prevented from
acting according to one's belief.233

Apparently, in these cases, there is no immediate danger to the life or health of an individual in the perceived scenario of
the subject provisions. After all, a couple who plans the timing, number and spacing of the birth of their children refers to
a future event that is contingent on whether or not the mother decides to adopt or use the information, product, method
or supply given to her or whether she even decides to become pregnant at all. On the other hand, the burden placed upon
those who object to contraceptive use is immediate and occurs the moment a patient seeks consultation on reproductive
health matters.

Moreover, granting that a compelling interest exists to justify the infringement of the conscientious objector's religious
freedom, the respondents have failed to demonstrate "the gravest abuses, endangering paramount interests" which could
limit or override a person's fundamental right to religious freedom. Also, the respondents have not presented any
government effort exerted to show that the means it takes to achieve its legitimate state objective is the least intrusive
means.234 Other than the assertion that the act of referring would only be momentary, considering that the act of referral
by a conscientious objector is the very action being contested as violative of religious freedom, it behooves the
respondents to demonstrate that no other means can be undertaken by the State to achieve its objective without violating
the rights of the conscientious objector. The health concerns of women may still be addressed by other practitioners who
may perform reproductive health-related procedures with open willingness and motivation. Suffice it to say, a person who
is forced to perform an act in utter reluctance deserves the protection of the Court as the last vanguard of constitutional
freedoms.

At any rate, there are other secular steps already taken by the Legislature to ensure that the right to health is protected.
Considering other legislations as they stand now, R.A . No. 4 729 or the Contraceptive Act, R.A. No. 6365 or "The Population
Act of the Philippines" and R.A. No. 9710, otherwise known as "The Magna Carta of Women," amply cater to the needs of
women in relation to health services and programs. The pertinent provision of Magna Carta on comprehensive health
services and programs for women, in fact, reads:

Section 17. Women's Right to Health. - (a) Comprehensive Health Services. - The State shall, at all times, provide for a
comprehensive, culture-sensitive, and gender-responsive health services and programs covering all stages of a woman's
life cycle and which addresses the major causes of women's mortality and morbidity: Provided, That in the provision for
comprehensive health services, due respect shall be accorded to women's religious convictions, the rights of the spouses
to found a family in accordance with their religious convictions, and the demands of responsible parenthood, and the right
of women to protection from hazardous drugs, devices, interventions, and substances.

Access to the following services shall be ensured:

(1) Maternal care to include pre- and post-natal services to address pregnancy and infant health and nutrition;

(2) Promotion of breastfeeding;

(3) Responsible, ethical, legal, safe, and effective methods of family planning;

(4) Family and State collaboration in youth sexuality education and health services without prejudice to the primary right
and duty of parents to educate their children;

(5) Prevention and management of reproductive tract infections, including sexually transmitted diseases, HIV, and AIDS;
(6) Prevention and management of reproductive tract cancers like breast and cervical cancers, and other gynecological
conditions and disorders;

(7) Prevention of abortion and management of pregnancy-related complications;

(8) In cases of violence against women and children, women and children victims and survivors shall be provided with
comprehensive health services that include psychosocial, therapeutic, medical, and legal interventions and assistance
towards healing, recovery, and empowerment;

(9) Prevention and management of infertility and sexual dysfunction pursuant to ethical norms and medical standards;

(10) Care of the elderly women beyond their child-bearing years; and

(11) Management, treatment, and intervention of mental health problems of women and girls. In addition, healthy
lifestyle activities are encouraged and promoted through programs and projects as strategies in the prevention of diseases.

(b) Comprehensive Health Information and Education. - The State shall provide women in all sectors with appropriate,
timely, complete, and accurate information and education on all the above-stated aspects of women's health in
government education and training programs, with due regard to the following:

(1) The natural and primary right and duty of parents in the rearing of the youth and the development of moral character
and the right of children to be brought up in an atmosphere of morality and rectitude for the enrichment and
strengthening of character;

(2) The formation of a person's sexuality that affirms human dignity; and

(3) Ethical, legal, safe, and effective family planning methods including fertility awareness.

As an afterthought, Asst. Solicitor General Hilbay eventually replied that the compelling state interest was "Fifteen
maternal deaths per day, hundreds of thousands of unintended pregnancies, lives changed, x x x." 235 He, however, failed
to substantiate this point by concrete facts and figures from reputable sources.

The undisputed fact, however, is that the World Health Organization reported that the Filipino maternal mortality rate
dropped to 48 percent from 1990 to 2008, 236 although there was still no RH Law at that time. Despite such revelation, the
proponents still insist that such number of maternal deaths constitute a compelling state interest.

Granting that there are still deficiencies and flaws in the delivery of social healthcare programs for Filipino women, they
could not be solved by a measure that puts an unwarrantable stranglehold on religious beliefs in exchange for blind
conformity.

Exception: Life Threatening Cases

All this notwithstanding, the Court properly recognizes a valid exception set forth in the law. While generally healthcare
service providers cannot be forced to render reproductive health care procedures if doing it would contravene their
religious beliefs, an exception must be made in life-threatening cases that require the performance of emergency
procedures. In these situations, the right to life of the mother should be given preference, considering that a referral by a
medical practitioner would amount to a denial of service, resulting to unnecessarily placing the life of a mother in grave
danger. Thus, during the oral arguments, Atty. Liban, representing CFC, manifested: "the forced referral clause that we
are objecting on grounds of violation of freedom of religion does not contemplate an emergency." 237

In a conflict situation between the life of the mother and the life of a child, the doctor is morally obliged always to try to
save both lives. If, however, it is impossible, the resulting death to one should not be deliberate. Atty. Noche explained:

Principle of Double-Effect. - May we please remind the principal author of the RH Bill in the House of Representatives of
the principle of double-effect wherein intentional harm on the life of either the mother of the child is never justified to
bring about a "good" effect. In a conflict situation between the life of the child and the life of the mother, the doctor is
morally obliged always to try to save both lives. However, he can act in favor of one (not necessarily the mother) when it
is medically impossible to save both, provided that no direct harm is intended to the other. If the above principles are
observed, the loss of the child's life or the mother's life is not intentional and, therefore, unavoidable. Hence, the doctor
would not be guilty of abortion or murder. The mother is never pitted against the child because both their lives are equally
valuable.238

Accordingly, if it is necessary to save the life of a mother, procedures endangering the life of the child may be resorted to
even if is against the religious sentiments of the medical practitioner. As quoted above, whatever burden imposed upon
a medical practitioner in this case would have been more than justified considering the life he would be able to save.

Family Planning Seminars

Anent the requirement imposed under Section 15239 as a condition for the issuance of a marriage license, the Court finds
the same to be a reasonable exercise of police power by the government. A cursory reading of the assailed provision bares
that the religious freedom of the petitioners is not at all violated. All the law requires is for would-be spouses to attend a
seminar on parenthood, family planning breastfeeding and infant nutrition. It does not even mandate the type of family
planning methods to be included in the seminar, whether they be natural or artificial. As correctly noted by the OSG, those
who receive any information during their attendance in the required seminars are not compelled to accept the information
given to them, are completely free to reject the information they find unacceptable, and retain the freedom to decide on
matters of family life without the intervention of the State.

4-The Family and the Right to Privacy

Petitioner CFC assails the RH Law because Section 23(a) (2) (i) thereof violates the provisions of the Constitution by
intruding into marital privacy and autonomy. It argues that it cultivates disunity and fosters animosity in the family rather
than promote its solidarity and total development.240

The Court cannot but agree.

The 1987 Constitution is replete with provisions strengthening the family as it is the basic social institution. In fact, one
article, Article XV, is devoted entirely to the family.

ARTICLE XV
THE FAMILY

Section 1. The State recognizes the Filipino family as the foundation of the nation. Accordingly, it shall strengthen its
solidarity and actively promote its total development.

Section 2. Marriage, as an inviolable social institution, is the foundation of the family and shall be protected by the State.

Section 3. The State shall defend:

The right of spouses to found a family in accordance with their religious convictions and the demands of responsible
parenthood;

The right of children to assistance, including proper care and nutrition, and special protection from all forms of neglect,
abuse, cruelty, exploitation and other conditions prejudicial to their development;

The right of the family to a family living wage and income; and

The right of families or family assoc1at1ons to participate in the planning and implementation of policies and programs
that affect them.

In this case, the RH Law, in its not-so-hidden desire to control population growth, contains provisions which tend to wreck
the family as a solid social institution. It bars the husband and/or the father from participating in the decision making
process regarding their common future progeny. It likewise deprives the parents of their authority over their minor
daughter simply because she is already a parent or had suffered a miscarriage.

The Family and Spousal Consent

Section 23(a) (2) (i) of the RH Law states:

The following acts are prohibited:

(a) Any health care service provider, whether public or private, who shall: ...

(2) refuse to perform legal and medically-safe reproductive health procedures on any person of legal age on the ground
of lack of consent or authorization of the following persons in the following instances:

(i) Spousal consent in case of married persons: provided, That in case of disagreement, the decision of the one undergoing
the procedures shall prevail. [Emphasis supplied]

The above provision refers to reproductive health procedures like tubal litigation and vasectomy which, by their very
nature, should require mutual consent and decision between the husband and the wife as they affect issues intimately
related to the founding of a family. Section 3, Art. XV of the Constitution espouses that the State shall defend the "right
of the spouses to found a family." One person cannot found a family. The right, therefore, is shared by both spouses. In
the same Section 3, their right "to participate in the planning and implementation of policies and programs that affect
them " is equally recognized.

The RH Law cannot be allowed to infringe upon this mutual decision-making. By giving absolute authority to the spouse
who would undergo a procedure, and barring the other spouse from participating in the decision would drive a wedge
between the husband and wife, possibly result in bitter animosity, and endanger the marriage and the family, all for the
sake of reducing the population. This would be a marked departure from the policy of the State to protect marriage as an
inviolable social institution.241

Decision-making involving a reproductive health procedure is a private matter which belongs to the couple, not just one
of them. Any decision they would reach would affect their future as a family because the size of the family or the number
of their children significantly matters. The decision whether or not to undergo the procedure belongs exclusively to, and
shared by, both spouses as one cohesive unit as they chart their own destiny. It is a constitutionally guaranteed private
right. Unless it prejudices the State, which has not shown any compelling interest, the State should see to it that they chart
their destiny together as one family.

As highlighted by Justice Leonardo-De Castro, Section 19( c) of R.A. No. 9710, otherwise known as the "Magna Carta for
Women," provides that women shall have equal rights in all matters relating to marriage and family relations, including
the joint decision on the number and spacing of their children. Indeed, responsible parenthood, as Section 3(v) of the RH
Law states, is a shared responsibility between parents. Section 23(a)(2)(i) of the RH Law should not be allowed to betray
the constitutional mandate to protect and strengthen the family by giving to only one spouse the absolute authority to
decide whether to undergo reproductive health procedure.242

The right to chart their own destiny together falls within the protected zone of marital privacy and such state intervention
would encroach into the zones of spousal privacy guaranteed by the Constitution. In our jurisdiction, the right to privacy
was first recognized in Marje v. Mutuc,243 where the Court, speaking through Chief Justice Fernando, held that "the right
to privacy as such is accorded recognition independently of its identification with liberty; in itself, it is fully deserving of
constitutional protection."244 Marje adopted the ruling of the US Supreme Court in Griswold v. Connecticut, 245 where
Justice William O. Douglas wrote:

We deal with a right of privacy older than the Bill of Rights -older than our political parties, older than our school system.
Marriage is a coming together for better or for worse, hopefully enduring, and intimate to the degree of being sacred. It
is an association that promotes a way of life, not causes; a harmony in living, not political faiths; a bilateral loyalty, not
commercial or social projects. Yet it is an association for as noble a purpose as any involved in our prior decisions.
Ironically, Griswold invalidated a Connecticut statute which made the use of contraceptives a criminal offense on the
ground of its amounting to an unconstitutional invasion of the right to privacy of married persons. Nevertheless, it
recognized the zone of privacy rightfully enjoyed by couples. Justice Douglas in Grisworld wrote that "specific guarantees
in the Bill of Rights have penumbras, formed by emanations from those guarantees that help give them life and substance.
Various guarantees create zones of privacy."246

At any rate, in case of conflict between the couple, the courts will decide.

The Family and Parental Consent

Equally deplorable is the debarment of parental consent in cases where the minor, who will be undergoing a procedure,
is already a parent or has had a miscarriage. Section 7 of the RH law provides:

SEC. 7. Access to Family Planning. x x x.

No person shall be denied information and access to family planning services, whether natural or artificial: Provided, That
minors will not be allowed access to modern methods of family planning without written consent from their parents or
guardian/s except when the minor is already a parent or has had a miscarriage.

There can be no other interpretation of this provision except that when a minor is already a parent or has had a miscarriage,
the parents are excluded from the decision making process of the minor with regard to family planning. Even if she is not
yet emancipated, the parental authority is already cut off just because there is a need to tame population growth.

It is precisely in such situations when a minor parent needs the comfort, care, advice, and guidance of her own parents.
The State cannot replace her natural mother and father when it comes to providing her needs and comfort. To say that
their consent is no longer relevant is clearly anti-family. It does not promote unity in the family. It is an affront to the
constitutional mandate to protect and strengthen the family as an inviolable social institution.

More alarmingly, it disregards and disobeys the constitutional mandate that "the natural and primary right and duty of
parents in the rearing of the youth for civic efficiency and the development of moral character shall receive the support
of the Government."247 In this regard, Commissioner Bernas wrote:

The 1987 provision has added the adjective "primary" to modify the right of parents. It imports the assertion that the right
of parents is superior to that of the State.248 [Emphases supplied]

To insist on a rule that interferes with the right of parents to exercise parental control over their minor-child or the right
of the spouses to mutually decide on matters which very well affect the very purpose of marriage, that is, the
establishment of conjugal and family life, would result in the violation of one's privacy with respect to his family. It would
be dismissive of the unique and strongly-held Filipino tradition of maintaining close family ties and violative of the
recognition that the State affords couples entering into the special contract of marriage to as one unit in forming the
foundation of the family and society.

The State cannot, without a compelling state interest, take over the role of parents in the care and custody of a minor
child, whether or not the latter is already a parent or has had a miscarriage. Only a compelling state interest can justify a
state substitution of their parental authority.

First Exception: Access to Information

Whether with respect to the minor referred to under the exception provided in the second paragraph of Section 7 or with
respect to the consenting spouse under Section 23(a)(2)(i), a distinction must be made. There must be a differentiation
between access to information about family planning services, on one hand, and access to the reproductive health
procedures and modern family planning methods themselves, on the other. Insofar as access to information is concerned,
the Court finds no constitutional objection to the acquisition of information by the minor referred to under the exception
in the second paragraph of Section 7 that would enable her to take proper care of her own body and that of her unborn
child. After all, Section 12, Article II of the Constitution mandates the State to protect both the life of the mother as that
of the unborn child. Considering that information to enable a person to make informed decisions is essential in the
protection and maintenance of ones' health, access to such information with respect to reproductive health must be
allowed. In this situation, the fear that parents might be deprived of their parental control is unfounded because they are
not prohibited to exercise parental guidance and control over their minor child and assist her in deciding whether to accept
or reject the information received.

Second Exception: Life Threatening Cases

As in the case of the conscientious objector, an exception must be made in life-threatening cases that require the
performance of emergency procedures. In such cases, the life of the minor who has already suffered a miscarriage and
that of the spouse should not be put at grave risk simply for lack of consent. It should be emphasized that no person should
be denied the appropriate medical care urgently needed to preserve the primordial right, that is, the right to life.

In this connection, the second sentence of Section 23(a)(2)(ii) 249 should be struck down. By effectively limiting the
requirement of parental consent to "only in elective surgical procedures," it denies the parents their right of parental
authority in cases where what is involved are "non-surgical procedures." Save for the two exceptions discussed above,
and in the case of an abused child as provided in the first sentence of Section 23(a)(2)(ii), the parents should not be
deprived of their constitutional right of parental authority. To deny them of this right would be an affront to the
constitutional mandate to protect and strengthen the family.

5 - Academic Freedom

It is asserted that Section 14 of the RH Law, in relation to Section 24 thereof, mandating the teaching of Age-and
Development-Appropriate Reproductive Health Education under threat of fine and/or imprisonment violates the principle
of academic freedom . According to the petitioners, these provisions effectively force educational institutions to teach
reproductive health education even if they believe that the same is not suitable to be taught to their students.250 Citing
various studies conducted in the United States and statistical data gathered in the country, the petitioners aver that the
prevalence of contraceptives has led to an increase of out-of-wedlock births; divorce and breakdown of families; the
acceptance of abortion and euthanasia; the "feminization of poverty"; the aging of society; and promotion of promiscuity
among the youth.251

At this point, suffice it to state that any attack on the validity of Section 14 of the RH Law is premature because the
Department of Education, Culture and Sports has yet to formulate a curriculum on age-appropriate reproductive health
education. One can only speculate on the content, manner and medium of instruction that will be used to educate the
adolescents and whether they will contradict the religious beliefs of the petitioners and validate their apprehensions. Thus,
considering the premature nature of this particular issue, the Court declines to rule on its constitutionality or validity.

At any rate, Section 12, Article II of the 1987 Constitution provides that the natural and primary right and duty of parents
in the rearing of the youth for civic efficiency and development of moral character shall receive the support of the
Government. Like the 1973 Constitution and the 1935 Constitution, the 1987 Constitution affirms the State recognition of
the invaluable role of parents in preparing the youth to become productive members of society. Notably, it places more
importance on the role of parents in the development of their children by recognizing that said role shall be "primary,"
that is, that the right of parents in upbringing the youth is superior to that of the State. 252

It is also the inherent right of the State to act as parens patriae to aid parents in the moral development of the youth.
Indeed, the Constitution makes mention of the importance of developing the youth and their important role in nation
building.253 Considering that Section 14 provides not only for the age-appropriate-reproductive health education, but also
for values formation; the development of knowledge and skills in self-protection against discrimination; sexual abuse and
violence against women and children and other forms of gender based violence and teen pregnancy; physical, social and
emotional changes in adolescents; women's rights and children's rights; responsible teenage behavior; gender and
development; and responsible parenthood, and that Rule 10, Section 11.01 of the RH-IRR and Section 4(t) of the RH Law
itself provides for the teaching of responsible teenage behavior, gender sensitivity and physical and emotional changes
among adolescents - the Court finds that the legal mandate provided under the assailed provision supplements, rather
than supplants, the rights and duties of the parents in the moral development of their children.

Furthermore, as Section 14 also mandates that the mandatory reproductive health education program shall be developed
in conjunction with parent-teacher-community associations, school officials and other interest groups, it could very well
be said that it will be in line with the religious beliefs of the petitioners. By imposing such a condition, it becomes apparent
that the petitioners' contention that Section 14 violates Article XV, Section 3(1) of the Constitution is without merit. 254

While the Court notes the possibility that educators might raise their objection to their participation in the reproductive
health education program provided under Section 14 of the RH Law on the ground that the same violates their religious
beliefs, the Court reserves its judgment should an actual case be filed before it.

6 - Due Process

The petitioners contend that the RH Law suffers from vagueness and, thus violates the due process clause of the
Constitution. According to them, Section 23 (a)(l) mentions a "private health service provider" among those who may be
held punishable but does not define who is a "private health care service provider." They argue that confusion further
results since Section 7 only makes reference to a "private health care institution."

The petitioners also point out that Section 7 of the assailed legislation exempts hospitals operated by religious groups
from rendering reproductive health service and modern family planning methods. It is unclear, however, if these
institutions are also exempt from giving reproductive health information under Section 23(a)(l), or from rendering
reproductive health procedures under Section 23(a)(2).

Finally, it is averred that the RH Law punishes the withholding, restricting and providing of incorrect information, but at
the same time fails to define "incorrect information."

The arguments fail to persuade.

A statute or act suffers from the defect of vagueness when it lacks comprehensible standards that men of common
intelligence must necessarily guess its meaning and differ as to its application. It is repugnant to the Constitution in two
respects: (1) it violates due process for failure to accord persons, especially the parties targeted by it, fair notice of the
conduct to avoid; and (2) it leaves law enforcers unbridled discretion in carrying out its provisions and becomes an
arbitrary flexing of the Government muscle. 255 Moreover, in determining whether the words used in a statute are vague,
words must not only be taken in accordance with their plain meaning alone, but also in relation to other parts of the
statute. It is a rule that every part of the statute must be interpreted with reference to the context, that is, every part of
it must be construed together with the other parts and kept subservient to the general intent of the whole enactment. 256

As correctly noted by the OSG, in determining the definition of "private health care service provider," reference must be
made to Section 4(n) of the RH Law which defines a "public health service provider," viz:

(n) Public health care service provider refers to: (1) public health care institution, which is duly licensed and accredited
and devoted primarily to the maintenance and operation of facilities for health promotion, disease prevention, diagnosis,
treatment and care of individuals suffering from illness, disease, injury, disability or deformity, or in need of obstetrical or
other medical and nursing care; (2) public health care professional, who is a doctor of medicine, a nurse or a midvvife; (3)
public health worker engaged in the delivery of health care services; or (4) barangay health worker who has undergone
training programs under any accredited government and NGO and who voluntarily renders primarily health care services
in the community after having been accredited to function as such by the local health board in accordance with the
guidelines promulgated by the Department of Health (DOH) .

Further, the use of the term "private health care institution" in Section 7 of the law, instead of "private health care service
provider," should not be a cause of confusion for the obvious reason that they are used synonymously.

The Court need not belabor the issue of whether the right to be exempt from being obligated to render reproductive
health service and modem family planning methods, includes exemption from being obligated to give reproductive health
information and to render reproductive health procedures. Clearly, subject to the qualifications and exemptions earlier
discussed, the right to be exempt from being obligated to render reproductive health service and modem family planning
methods, necessarily includes exemption from being obligated to give reproductive health information and to render
reproductive health procedures. The terms "service" and "methods" are broad enough to include the providing of
information and the rendering of medical procedures.

The same can be said with respect to the contention that the RH Law punishes health care service providers who
intentionally withhold, restrict and provide incorrect information regarding reproductive health programs and services.
For ready reference, the assailed provision is hereby quoted as follows:

SEC. 23. Prohibited Acts. - The following acts are prohibited:

(a) Any health care service provider, whether public or private, who shall:

(1) Knowingly withhold information or restrict the dissemination thereof, and/ or intentionally provide incorrect
information regarding programs and services on reproductive health including the right to informed choice and access to
a full range of legal, medically-safe, non-abortifacient and effective family planning methods;

From its plain meaning, the word "incorrect" here denotes failing to agree with a copy or model or with established rules;
inaccurate, faulty; failing to agree with the requirements of duty, morality or propriety; and failing to coincide with the
truth. 257 On the other hand, the word "knowingly" means with awareness or deliberateness that is intentional. 258 Used
together in relation to Section 23(a)(l), they connote a sense of malice and ill motive to mislead or misrepresent the public
as to the nature and effect of programs and services on reproductive health. Public health and safety demand that health
care service providers give their honest and correct medical information in accordance with what is acceptable in medical
practice. While health care service providers are not barred from expressing their own personal opinions regarding the
programs and services on reproductive health, their right must be tempered with the need to provide public health and
safety. The public deserves no less.

7-Egual Protection

The petitioners also claim that the RH Law violates the equal protection clause under the Constitution as it discriminates
against the poor because it makes them the primary target of the government program that promotes contraceptive use .
They argue that, rather than promoting reproductive health among the poor, the RH Law introduces contraceptives that
would effectively reduce the number of the poor. Their bases are the various provisions in the RH Law dealing with the
poor, especially those mentioned in the guiding principles 259 and definition of terms260 of the law.

They add that the exclusion of private educational institutions from the mandatory reproductive health education
program imposed by the RH Law renders it unconstitutional.

In Biraogo v. Philippine Truth Commission,261 the Court had the occasion to expound on the concept of equal protection.
Thus:

One of the basic principles on which this government was founded is that of the equality of right which is embodied in
Section 1, Article III of the 1987 Constitution. The equal protection of the laws is embraced in the concept of due process,
as every unfair discrimination offends the requirements of justice and fair play. It has been embodied in a separate clause,
however, to provide for a more specific guaranty against any form of undue favoritism or hostility from the government.
Arbitrariness in general may be challenged on the basis of the due process clause. But if the particular act assailed partakes
of an unwarranted partiality or prejudice, the sharper weapon to cut it down is the equal protection clause.

"According to a long line of decisions, equal protection simply 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 inst itutions to
treat similarly situated individuals in a similar manner." "The purpose of the equal protection clause is to secure every
person within a state's jurisdiction against intentional and arbitrary discrimination, whether occasioned by the express
terms of a statue or by its improper execution through the state's duly constituted authorities." "In other words, the
concept of equal justice under the law requires the state to govern impartially, and it may not draw distinctions between
individuals solely on differences that are irrelevant to a legitimate governmental objective."

The equal protection clause is aimed at all official state actions, not just those of the legislature. Its inhibitions cover all
the departments of the government including the political and executive departments, and extend to all actions of a state
denying equal protection of the laws, through whatever agency or whatever guise is taken.

It, however, does not require the universal application of the laws to all persons or things without distinction. What it
simply requires is equality among equals as determined according to a valid classification. Indeed, the equal protection
clause permits classification. Such classification, however, to be valid must pass the test of reasonableness. The test has
four requisites: (1) The classification rests on substantial distinctions; (2) It is germane to the purpose of the law; (3) It is
not limited to existing conditions only; and (4) It applies equally to all members of the same class. "Superficial differences
do not make for a valid classification."

For a classification to meet the requirements of constitutionality, it must include or embrace all persons who naturally
belong to the class. "The classification will be regarded as invalid if all the members of the class are not similarly treated,
both as to rights conferred and obligations imposed. It is not necessary that the classification be made with absolute
symmetry, in the sense that the members of the class should possess the same characteristics in equal degree. Substantial
similarity will suffice; and as long as this is achieved, all those covered by the classification are to be treated equally. The
mere fact that an individual belonging to a class differs from the other members, as long as that class is substantially
distinguishable from all others, does not justify the non-application of the law to him."

The classification must not be based on existing circumstances only, or so constituted as to preclude addition to the
number included in the class. It must be of such a nature as to embrace all those who may thereafter be in similar
circumstances and conditions. It must not leave out or "underinclude" those that should otherwise fall into a certain
classification. [Emphases supplied; citations excluded]

To provide that the poor are to be given priority in the government's reproductive health care program is not a violation
of the equal protection clause. In fact, it is pursuant to Section 11, Article XIII of the Constitution which recognizes the
distinct necessity to address the needs of the underprivileged by providing that they be given priority in addressing the
health development of the people. Thus:

Section 11. The State shall adopt an integrated and comprehensive approach to health development which shall endeavor
to make essential goods, health and other social services available to all the people at affordable cost. There shall be
priority for the needs of the underprivileged, sick, elderly, disabled, women, and children. The State shall endeavor to
provide free medical care to paupers.

It should be noted that Section 7 of the RH Law prioritizes poor and marginalized couples who are suffering from fertility
issues and desire to have children. There is, therefore, no merit to the contention that the RH Law only seeks to target the
poor to reduce their number. While the RH Law admits the use of contraceptives, it does not, as elucidated above, sanction
abortion. As Section 3(1) explains, the "promotion and/or stabilization of the population growth rate is incidental to the
advancement of reproductive health."

Moreover, the RH Law does not prescribe the number of children a couple may have and does not impose conditions upon
couples who intend to have children. While the petitioners surmise that the assailed law seeks to charge couples with the
duty to have children only if they would raise them in a truly humane way, a deeper look into its provisions shows that
what the law seeks to do is to simply provide priority to the poor in the implementation of government programs to
promote basic reproductive health care.

With respect to the exclusion of private educational institutions from the mandatory reproductive health education
program under Section 14, suffice it to state that the mere fact that the children of those who are less fortunate attend
public educational institutions does not amount to substantial distinction sufficient to annul the assailed provision. On the
other hand, substantial distinction rests between public educational institutions and private educational institutions,
particularly because there is a need to recognize the academic freedom of private educational institutions especially with
respect to religious instruction and to consider their sensitivity towards the teaching of reproductive health education.

8-Involuntary Servitude

The petitioners also aver that the RH Law is constitutionally infirm as it violates the constitutional prohibition against
involuntary servitude. They posit that Section 17 of the assailed legislation requiring private and non-government health
care service providers to render forty-eight (48) hours of pro bono reproductive health services, actually amounts to
involuntary servitude because it requires medical practitioners to perform acts against their will. 262

The OSG counters that the rendition of pro bono services envisioned in Section 17 can hardly be considered as forced
labor analogous to slavery, as reproductive health care service providers have the discretion as to the manner and time
of giving pro bono services. Moreover, the OSG points out that the imposition is within the powers of the government,
the accreditation of medical practitioners with PhilHealth being a privilege and not a right.

The point of the OSG is well-taken.

It should first be mentioned that the practice of medicine is undeniably imbued with public interest that it is both a power
and a duty of the State to control and regulate it in order to protect and promote the public welfare. Like the legal
profession, the practice of medicine is not a right but a privileged burdened with conditions as it directly involves the very
lives of the people. A fortiori, this power includes the power of Congress 263 to prescribe the qualifications for the practice
of professions or trades which affect the public welfare, the public health, the public morals, and the public safety; and to
regulate or control such professions or trades, even to the point of revoking such right altogether.264

Moreover, as some petitioners put it, the notion of involuntary servitude connotes the presence of force, threats,
intimidation or other similar means of coercion and compulsion.265 A reading of the assailed provision, however, reveals
that it only encourages private and non- government reproductive healthcare service providers to render pro bono service.
Other than non-accreditation with PhilHealth, no penalty is imposed should they choose to do otherwise. Private and non-
government reproductive healthcare service providers also enjoy the liberty to choose which kind of health service they
wish to provide, when, where and how to provide it or whether to provide it all. Clearly, therefore, no compulsion, force
or threat is made upon them to render pro bono service against their will. While the rendering of such service was made
a prerequisite to accreditation with PhilHealth, the Court does not consider the same to be an unreasonable burden, but
rather, a necessary incentive imposed by Congress in the furtherance of a perceived legitimate state interest.

Consistent with what the Court had earlier discussed, however, it should be emphasized that conscientious objectors are
exempt from this provision as long as their religious beliefs and convictions do not allow them to render reproductive
health service, pro bona or otherwise.

9-Delegation of Authority to the FDA

The petitioners likewise question the delegation by Congress to the FDA of the power to determine whether or not a
supply or product is to be included in the Essential Drugs List (EDL).266

The Court finds nothing wrong with the delegation. The FDA does not only have the power but also the competency to
evaluate, register and cover health services and methods. It is the only government entity empowered to render such
services and highly proficient to do so. It should be understood that health services and methods fall under the gamut of
terms that are associated with what is ordinarily understood as "health products."

In this connection, Section 4 of R.A. No. 3 720, as amended by R.A. No. 9711 reads:

SEC. 4. To carry out the provisions of this Act, there is hereby created an office to be called the Food and Drug
Administration (FDA) in the Department of Health (DOH). Said Administration shall be under the Office of the Secretary
and shall have the following functions, powers and duties:

"(a) To administer the effective implementation of this Act and of the rules and regulations issued pursuant to the same;
"(b) To assume primary jurisdiction in the collection of samples of health products;

"(c) To analyze and inspect health products in connection with the implementation of this Act;

"(d) To establish analytical data to serve as basis for the preparation of health products standards, and to recommend
standards of identity, purity, safety, efficacy, quality and fill of container;

"(e) To issue certificates of compliance with technical requirements to serve as basis for the issuance of appropriate
authorization and spot-check for compliance with regulations regarding operation of manufacturers, importers, exporters,
distributors, wholesalers, drug outlets, and other establishments and facilities of health products, as determined by the
FDA;

"x x x

"(h) To conduct appropriate tests on all applicable health products prior to the issuance of appropriate authorizations to
ensure safety, efficacy, purity, and quality;

"(i) To require all manufacturers, traders, distributors, importers, exporters, wholesalers, retailers, consumers, and non-
consumer users of health products to report to the FDA any incident that reasonably indicates that said product has caused
or contributed to the death, serious illness or serious injury to a consumer, a patient, or any person;

"(j) To issue cease and desist orders motu propio or upon verified complaint for health products, whether or not registered
with the FDA Provided, That for registered health products, the cease and desist order is valid for thirty (30) days and may
be extended for sixty ( 60) days only after due process has been observed;

"(k) After due process, to order the ban, recall, and/or withdrawal of any health product found to have caused death,
serious illness or serious injury to a consumer or patient, or is found to be imminently injurious, unsafe, dangerous, or
grossly deceptive, and to require all concerned to implement the risk management plan which is a requirement for the
issuance of the appropriate authorization;

x x x.

As can be gleaned from the above, the functions, powers and duties of the FDA are specific to enable the agency to carry
out the mandates of the law. Being the country's premiere and sole agency that ensures the safety of food and medicines
available to the public, the FDA was equipped with the necessary powers and functions to make it effective. Pursuant to
the principle of necessary implication, the mandate by Congress to the FDA to ensure public health and safety by
permitting only food and medicines that are safe includes "service" and "methods." From the declared policy of the RH
Law, it is clear that Congress intended that the public be given only those medicines that are proven medically safe, legal,
non-abortifacient, and effective in accordance with scientific and evidence-based medical research standards. The
philosophy behind the permitted delegation was explained in Echagaray v. Secretary of Justice, 267 as follows:

The reason is the increasing complexity of the task of the government and the growing inability of the legislature to cope
directly with the many problems demanding its attention. The growth of society has ramified its activities and created
peculiar and sophisticated problems that the legislature cannot be expected reasonably to comprehend. Specialization
even in legislation has become necessary. To many of the problems attendant upon present day undertakings, the
legislature may not have the competence, let alone the interest and the time, to provide the required direct and efficacious,
not to say specific solutions.

10- Autonomy of Local Governments and the Autonomous Region

of Muslim Mindanao (ARMM)

As for the autonomy of local governments, the petitioners claim that the RH Law infringes upon the powers devolved to
local government units (LGUs) under Section 17 of the Local Government Code. Said Section 17 vested upon the LGUs the
duties and functions pertaining to the delivery of basic services and facilities, as follows:
SECTION 17. Basic Services and Facilities.

(a) Local government units shall endeavor to be self-reliant and shall continue exercising the powers and discharging the
duties and functions currently vested upon them. They shall also discharge the functions and responsibilities of national
agencies and offices devolved to them pursuant to this Code. Local government units shall likewise exercise such other
powers and discharge such other functions and responsibilities as are necessary, appropriate, or incidental to efficient and
effective provision of the basic services and facilities enumerated herein.

(b) Such basic services and facilities include, but are not limited to, x x x.

While the aforementioned provision charges the LGUs to take on the functions and responsibilities that have already been
devolved upon them from the national agencies on the aspect of providing for basic services and facilities in their
respective jurisdictions, paragraph (c) of the same provision provides a categorical exception of cases involving nationally-
funded projects, facilities, programs and services.268Thus:

(c) Notwithstanding the provisions of subsection (b) hereof, public works and infrastructure projects and other facilities,
programs and services funded by the National Government under the annual General Appropriations Act, other special
laws, pertinent executive orders, and those wholly or partially funded from foreign sources, are not covered under this
Section, except in those cases where the local government unit concerned is duly designated as the implementing agency
for such projects, facilities, programs and services. [Emphases supplied]

The essence of this express reservation of power by the national government is that, unless an LGU is particularly
designated as the implementing agency, it has no power over a program for which funding has been provided by the
national government under the annual general appropriations act, even if the program involves the delivery of basic
services within the jurisdiction of the LGU. 269 A complete relinquishment of central government powers on the matter of
providing basic facilities and services cannot be implied as the Local Government Code itself weighs against it. 270

In this case, a reading of the RH Law clearly shows that whether it pertains to the establishment of health care
facilities,271 the hiring of skilled health professionals,272 or the training of barangay health workers,273 it will be the national
government that will provide for the funding of its implementation. Local autonomy is not absolute. The national
government still has the say when it comes to national priority programs which the local government is called upon to
implement like the RH Law.

Moreover, from the use of the word "endeavor," the LG Us are merely encouraged to provide these services. There is
nothing in the wording of the law which can be construed as making the availability of these services mandatory for the
LGUs. For said reason, it cannot be said that the RH Law amounts to an undue encroachment by the national government
upon the autonomy enjoyed by the local governments.

The ARMM

The fact that the RH Law does not intrude in the autonomy of local governments can be equally applied to the ARMM.
The RH Law does not infringe upon its autonomy. Moreover, Article III, Sections 6, 10 and 11 of R.A. No. 9054, or the
organic act of the ARMM, alluded to by petitioner Tillah to justify the exemption of the operation of the RH Law in the
autonomous region, refer to the policy statements for the guidance of the regional government. These provisions relied
upon by the petitioners simply delineate the powers that may be exercised by the regional government, which can, in no
manner, be characterized as an abdication by the State of its power to enact legislation that would benefit the general
welfare. After all, despite the veritable autonomy granted the ARMM, the Constitution and the supporting jurisprudence,
as they now stand, reject the notion of imperium et imperio in the relationship between the national and the regional
governments.274 Except for the express and implied limitations imposed on it by the Constitution, Congress cannot be
restricted to exercise its inherent and plenary power to legislate on all subjects which extends to all matters of general
concern or common interest.275

11 - Natural Law
With respect to the argument that the RH Law violates natural law, 276 suffice it to say that the Court does not duly
recognize it as a legal basis for upholding or invalidating a law. Our only guidepost is the Constitution. While every law
enacted by man emanated from what is perceived as natural law, the Court is not obliged to see if a statute, executive
issuance or ordinance is in conformity to it. To begin with, it is not enacted by an acceptable legitimate body. Moreover,
natural laws are mere thoughts and notions on inherent rights espoused by theorists, philosophers and theologists. The
jurists of the philosophical school are interested in the law as an abstraction, rather than in the actual law of the past or
present.277 Unless, a natural right has been transformed into a written law, it cannot serve as a basis to strike down a law.
In Republic v. Sandiganbayan,278 the very case cited by the petitioners, it was explained that the Court is not duty-bound
to examine every law or action and whether it conforms with both the Constitution and natural law. Rather, natural law
is to be used sparingly only in the most peculiar of circumstances involving rights inherent to man where no law is
applicable.279

At any rate, as earlier expounded, the RH Law does not sanction the taking away of life. It does not allow abortion in any
shape or form. It only seeks to enhance the population control program of the government by providing information and
making non-abortifacient contraceptives more readily available to the public, especially to the poor.

Facts and Fallacies

and the Wisdom of the Law

In general, the Court does not find the RH Law as unconstitutional insofar as it seeks to provide access to medically-safe,
non-abortifacient, effective, legal, affordable, and quality reproductive healthcare services, methods, devices, and
supplies. As earlier pointed out, however, the religious freedom of some sectors of society cannot be trampled upon in
pursuit of what the law hopes to achieve. After all, the Constitutional safeguard to religious freedom is a recognition that
man stands accountable to an authority higher than the State.

In conformity with the principle of separation of Church and State, one religious group cannot be allowed to impose its
beliefs on the rest of the society. Philippine modem society leaves enough room for diversity and pluralism. As such,
everyone should be tolerant and open-minded so that peace and harmony may continue to reign as we exist alongside
each other.

As healthful as the intention of the RH Law may be, the idea does not escape the Court that what it seeks to address is the
problem of rising poverty and unemployment in the country. Let it be said that the cause of these perennial issues is not
the large population but the unequal distribution of wealth. Even if population growth is controlled, poverty will remain
as long as the country's wealth remains in the hands of the very few.

At any rate, population control may not be beneficial for the country in the long run. The European and Asian countries,
which embarked on such a program generations ago , are now burdened with ageing populations. The number of their
young workers is dwindling with adverse effects on their economy. These young workers represent a significant human
capital which could have helped them invigorate, innovate and fuel their economy. These countries are now trying to
reverse their programs, but they are still struggling. For one, Singapore, even with incentives, is failing.

And in this country, the economy is being propped up by remittances from our Overseas Filipino Workers. This is because
we have an ample supply of young able-bodied workers. What would happen if the country would be weighed down by
an ageing population and the fewer younger generation would not be able to support them? This would be the situation
when our total fertility rate would go down below the replacement level of two (2) children per woman. 280

Indeed, at the present, the country has a population problem, but the State should not use coercive measures (like the
penal provisions of the RH Law against conscientious objectors) to solve it. Nonetheless, the policy of the Court is non-
interference in the wisdom of a law.

x x x. But this Court cannot go beyond what the legislature has laid down. Its duty is to say what the law is as enacted by
the lawmaking body. That is not the same as saying what the law should be or what is the correct rule in a given set of
circumstances. It is not the province of the judiciary to look into the wisdom of the law nor to question the policies adopted
by the legislative branch. Nor is it the business of this Tribunal to remedy every unjust situation that may arise from the
application of a particular law. It is for the legislature to enact remedial legislation if that would be necessary in the
premises. But as always, with apt judicial caution and cold neutrality, the Court must carry out the delicate function of
interpreting the law, guided by the Constitution and existing legislation and mindful of settled jurisprudence. The Court's
function is therefore limited, and accordingly, must confine itself to the judicial task of saying what the law is, as enacted
by the lawmaking body.281

Be that as it may, it bears reiterating that the RH Law is a mere compilation and enhancement of the prior existing
contraceptive and reproductive health laws, but with coercive measures. Even if the Court decrees the RH Law as entirely
unconstitutional, there will still be the Population Act (R.A. No. 6365), the Contraceptive Act (R.A. No. 4729) and the
reproductive health for women or The Magna Carta of Women (R.A. No. 9710), sans the coercive provisions of the assailed
legislation. All the same, the principle of "no-abortion" and "non-coercion" in the adoption of any family planning method
should be maintained.

WHEREFORE, the petitions are PARTIALLY GRANTED. Accordingly, the Court declares R.A. No. 10354 as NOT
UNCONSTITUTIONAL except with respect to the following provisions which are declared UNCONSTITUTIONAL:

1) Section 7 and the corresponding provision in the RH-IRR insofar as they: a) require private health facilities and non-
maternity specialty hospitals and hospitals owned and operated by a religious group to refer patients, not in an emergency
or life-threatening case, as defined under Republic Act No. 8344, to another health facility which is conveniently accessible;
and b) allow minor-parents or minors who have suffered a miscarriage access to modem methods of family planning
without written consent from their parents or guardian/s;

2) Section 23(a)(l) and the corresponding provision in the RH-IRR, particularly Section 5 .24 thereof, insofar as they punish
any healthcare service provider who fails and or refuses to disseminate information regarding programs and services on
reproductive health regardless of his or her religious beliefs.

3) Section 23(a)(2)(i) and the corresponding provision in the RH-IRR insofar as they allow a married individual, not in an
emergency or life-threatening case, as defined under Republic Act No. 8344, to undergo reproductive health procedures
without the consent of the spouse;

4) Section 23(a)(2)(ii) and the corresponding provision in the RH-IRR insofar as they limit the requirement of parental
consent only to elective surgical procedures.

5) Section 23(a)(3) and the corresponding provision in the RH-IRR, particularly Section 5.24 thereof, insofar as they punish
any healthcare service provider who fails and/or refuses to refer a patient not in an emergency or life-threatening case,
as defined under Republic Act No. 8344, to another health care service provider within the same facility or one which is
conveniently accessible regardless of his or her religious beliefs;

6) Section 23(b) and the corresponding provision in the RH-IRR, particularly Section 5 .24 thereof, insofar as they punish
any public officer who refuses to support reproductive health programs or shall do any act that hinders the full
implementation of a reproductive health program, regardless of his or her religious beliefs;

7) Section 17 and the corresponding prov1s10n in the RH-IRR regarding the rendering of pro bona reproductive health
service in so far as they affect the conscientious objector in securing PhilHealth accreditation; and

8) Section 3.0l(a) and Section 3.01 G) of the RH-IRR, which added the qualifier "primarily" in defining abortifacients and
contraceptives, as they are ultra vires and, therefore, null and void for contravening Section 4(a) of the RH Law and
violating Section 12, Article II of the Constitution.

The Status Quo Ante Order issued by the Court on March 19, 2013 as extended by its Order, dated July 16, 2013 , is hereby
LIFTED, insofar as the provisions of R.A. No. 10354 which have been herein declared as constitutional.

SO ORDERED.
EN BANC

G.R. No. 199439 April 22, 2014

CITY OF GENERAL SANTOS, represented by its Mayor, HON. DARLENE MAGNOLIA R. ANTONINO-CUSTODIO Petitioner,
vs.
COMMISSION ON AUDIT, Respondent.

DECISION

LEONEN, J.:

In order to be able to deliver more effective and efficient services, the law allows local government units the power to
reorganize. In doing so, they should be given leeway to entice their employees to avail of severance benefits that the local
government can afford. However, local government units may not provide such when it amounts to a supplementary
retirement benefit scheme.

In this special civil action for certiorari, 1 the city of General Santos asks us to find grave abuse of discretion on the part of
the Commission on Audit (COA). On January 20, 2011, respondent Commission on Audit affirmed the findings of its Legal
Services Sector in its Opinion No. 2010-021 declaring Ordinance No. 08, series of 2009, as illegal. This was reiterated in
respondent Commissions resolution denying the motion for reconsideration dated October 17, 2011. 2

Ordinance No. 08, series of 2009, was enacted by the city of General Santos on August 13, 2009. It is entitled An Ordinance
Establishing the GenSan Scheme on Early Retirement for Valued Employees Security (GenSan SERVES). 3

It is important to view this ordinance in its proper context.

Then mayor of General Santos City, Pedro B. Acharon, Jr., issued Executive Order No. 40, series of 2008, creating
management teams pursuant to its organization development program. This was patterned after Executive Order No. 366
dated October 4, 2004 entitled Directing a Strategic Review of the Operations and Organizations of the Executive Branch
and Providing Options and Incentives for Government Employees who may be Affected by the Rationalization of the
Functions and Agencies of the Executive Branch and its implementing rules and regulations. 4

Mayor Pedro B. Acharon, Jr. declared the citys byword of "Total Quality Service" in his state of the city address in 2005.
This was followed by the conduct of a process and practice review for each department, section, and unit of the local
government. The product was an organization development masterplan adopted as Executive Order No. 13, series of
2009.5

This was followed by Resolution No. 004, series of 2009, requesting for the mayors support for GenSan SERVES, an early
retirement program to be proposed to the Sangguniang Panlungsod.

Consequently, Ordinance No. 08, series of 2009, was passed together with its implementing rules and regulations,
designed "to entice those employees who were unproductive due to health reasons to avail of the incentives being offered
therein by way of early retirement package."6

This contextual background in the passing of Ordinance No. 08, series of 2009, was not contested by respondent
Commission on Audit.

The ordinance, as amended, provides that qualified employees below sixty (60) years of age but not less than fifty (50)
years and sickly employees below fifty (50) years of age but not less than forty (40) years may avail of the incentives under
the program.7 In other words, the ordinance "provides for separation benefits for sickly employees who have not yet
reached retirement age."8 Section 5 of the ordinance states:

Section 5. GenSan SERVES Program Incentives On Top of Government Service Insurance System (GSIS) and PAG-IBIG
Benefits Any personnel qualified and approved to receive the incentives of this program shall be entitled to whatever
retirement benefits the GSIS or PAG-IBIG is granting to a retiring government employee.
Moreover, an eligible employee shall receive an early retirement incentive provided under this program at the rate of one
and one-half (1 1/2) months of the employees latest basic salary for every year of service in the City Government.9

Also, the ordinance provides:

Section 6. GenSan SERVES Post-Retirement Incentives Upon availment of early retirement, a qualified employee shall
enjoy the following in addition to the above incentives:

(a) Cash gift of Fifty Thousand Pesos (P50,000.00) for the sickly employees;

(b) Lifetime free medical consultation at General Santos City Hospital;

(c) Annual aid in the maximum amount of Five Thousand Pesos (P5,000.00), if admitted at General Santos City Hospital;
and

(d) 14 karat gold ring as a token.10

As provided, payment would be made in two tranches: 50% paid in January 2010 and the remainder in July
2010.11 Petitioner city alleged that out of its 1,361 regular employees, 50 employees applied, from which 39 employees
qualified to avail of the incentives provided by the ordinance.12 The first tranche of benefits was released in January 2010.13

In a letter dated February 10, 2010, the citys audit team leader, through its supervising auditor, sent a query on the
legality of the ordinance to respondent Commission on Audits director for Regional Office No. XII, Cotabato City. 14

In his second indorsement dated March 15, 2010, respondent Commissions regional director agreed that the grant lacked
legal basis and was contrary to the Government Service Insurance System (GSIS) Act. He forwarded the matter to
respondent Commissions Office of General Counsel, Legal Services Sector, for a more authoritative opinion.15

The Office of General Counsel issued COA-LSS Opinion No. 2010-021 on March 25, 2010. The opinion explained that
Ordinance No. 08, series of 2009, partakes of a supplementary retirement benefit plan. In its view, Section 28, paragraph
(b) of Commonwealth Act No. 186, as amended, prohibits government agencies from establishing supplementary
retirement or pension plans from the time the Government Service Insurance System charter took effect while those plans
already existing when the charter was enacted were declared abolished. 16

The opinion discussed that this prohibition was reiterated in Conte v. Commission on Audit. 17 Larao v. Commission on
Audit,18 on the other hand, ruled that an early retirement program should be by virtue of a valid reorganization pursuant
to law in order to be valid. The opinion concludes as follows:

In fine, since Ordinance No. 08 is in the nature of an ERP [Early Retirement Program] of the City Government of General
Santos, a law authorizing the same is a requisite for its validity. In the absence, however, of such law, the nullity of
Ordinance No. 08 becomes a necessary consequence.

It is hoped that the foregoing sufficiently answers the instant query. 19

Petitioner city, through then mayor, Pedro B. Acharon, Jr., filed a letter-reconsideration dated June 7, 2010. They followed
through with two letters addressed to respondent Commissions chairman dated July 26, 2010 and October 6, 2010,
respectively, for the reconsideration of COA-LSS Opinion No. 2010-021.20

Respondent Commission on Audit treated these letters as an appeal. On January 20, 2011, it rendered its decision denying
the appeal and affirming COA-LSS Opinion No. 2010-021.21 It also denied reconsideration by resolution dated October 17,
2011.22 The dispositive portion of its decision reads:

WHEREFORE, premises considered, the instant appeal is hereby DENIED for lack of merit and COA-LSS Opinion No. 2010-
021 dated March 25, 2010 of the OGC, this Commission is hereby AFFIRMED. Accordingly, the ATL of General Santos City
is hereby directed to issue a Notice of Disallowance on the illegal disbursements made under the Gen[S]san SERVES. 23
Respondent Commission on Audit agreed that Ordinance No. 08, series of 2009, partakes of the nature of a supplementary
retirement benefit plan proscribed by Section 28, paragraph (b) of Commonwealth Act No. 186 as amended. It also cited
Conte v. Commission on Audit24 and Larao v. Commission on Audit.25

In its opinion, respondent Commission on Audit observed that GenSan SERVES was not based on a law passed by Congress
but on ordinances and resolutions passed and approved by the Sangguniang Panlungsod and Executive Orders by the city
mayor.26 Moreover, nowhere in Section 76 of Republic Act No. 7160, otherwise known as the Local Government Code,
does it provide a specific power for local government units to establish an early retirement program.

Mayor Acharon, Jr. submitted that other local government units such as Cebu in 2005 and 2008 have adopted their own
early retirement programs. The resolutions of the Sangguniang Panlungsod of Cebu invoked Republic Act No. 6683 dated
December 2, 1988, which provided for early retirement and voluntary separation. The questioned decision mentioned
that respondent Commission on Audit would look into this program supposedly adopted by Cebu. 27 Assuming Cebus
invocation of Republic Act No. 6683 was proper, respondent Commission on Audit explained that this has already been
amended by Republic Act No. 8291, otherwise known as the GSIS Act of 1997. Moreover, Section 9 of Republic Act No.
668328 provides for limited application.29

The present petition raises this sole issue:

WHETHER RESPONDENT COMMISSION ON AUDIT COMMITTED GRAVE ABUSE OF DISCRETION WHEN IT CONSIDERED
ORDINANCE NO. 08, SERIES OF 2009, IN THE NATURE OF AN EARLY RETIREMENT PROGRAM REQUIRING A LAW
AUTHORIZING IT FOR ITS VALIDITY

This court has consistently held that findings of administrative agencies are generally respected, unless found to have
been tainted with unfairness that amounted to grave abuse of discretion:

It is the general policy of the Court to sustain the decisions of administrative authorities, especially one which is
constitutionally-created not only on the basis of the doctrine of separation of powers but also for their presumed expertise
in the laws they are entrusted to enforce. Findings of administrative agencies are accorded not only respect but also
finality when the decision and order are not tainted with unfairness or arbitrariness that would amount to grave abuse of
discretion. It is only when the COA has acted without or in excess of jurisdiction, or with grave abuse of discretion
amounting to lack or excess of jurisdiction, that this Court entertains a petition questioning its rulings. There is grave abuse
of discretion when there is an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law or to act in
contemplation of law as when the judgment rendered is not based on law and evidence but on caprice, whim and
despotism.30 (Emphasis supplied, citations omitted)

We have ruled that "not every error in the proceedings, or every erroneous conclusion of law or fact, constitutes grave
abuse of discretion."31 Grave abuse of discretion has been defined as follows:

By grave abuse of discretion is meant such capricious and whimsical exercise of judgment as is equivalent to lack of
jurisdiction. Mere abuse of discretion is not enough. It must be grave abuse of discretion as when the power is exercised
in an arbitrary or despotic manner by reason of passion or personal hostility, and must be so patent and so gross as to
amount to an evasion of a positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation
of law. x x x.32

In Yap v. Commission on Audit,33 this court explained that the Commission on Audit has the duty to make its own
assessment of the merits of the disallowance and need not be limited to a review of the grounds relied upon by the auditor
of the agency concerned:

x x x we rule that, in resolving cases brought before it on appeal, respondent COA is not required to limit its review only
to the grounds relied upon by a government agencys auditor with respect to disallowing certain disbursements of public
funds. In consonance with its general audit power, respondent COA is not merely legally permitted, but is also duty-bound
to make its own assessment of the merits of the disallowed disbursement and not simply restrict itself to reviewing the
validity of the ground relied upon by the auditor of the government agency concerned. To hold otherwise would render
COAs vital constitutional power unduly limited and thereby useless and ineffective. 34

Moreover, Article IX-A, Section 7 of the Constitution provides that "unless otherwise provided by this Constitution or by
law, any decision, order, or ruling of each Commission may be brought to the Supreme Court on certiorari by the aggrieved
party within thirty days from receipt of a copy thereof." Rule 64, Section 2 of the Revised Rules of Civil Procedure also
provides that "a judgment or final order or resolution of the Commission on Elections and the Commission on Audit may
be brought by the aggrieved party to the Supreme Court on certiorari under Rule 65, except as hereinafter provided."

Thus, we proceed to determine whether respondent Commission on Audit acted with grave abuse of discretion in
affirming the opinion of its Legal Services Sector and finding that the entire Ordinance No. 08, series of 2009, partakes of
the nature of a proscribed supplementary retirement benefit plan.

II

According to petitioner city, GenSan SERVES does not provide for supplementary retirement benefits, and Conte does not
apply.35

Petitioner city explains that unlike the facts in Conte, Ordinance No. 08, series of 2009, was designed to entice employees
who are unproductive due to health reasons to avail of the incentives by way of an early retirement package. In essence,
the incentives are severance pay. Those who have reached retirement age are disqualified.36

Petitioner city adds that GenSan SERVES is a one-time offer. It is available only to qualified employees who applied within
two months from the ordinances effectivity. In fact, out of its 1,361 regular employees, 50 employees applied. Out of all
that applied, only 39 employees qualified to avail of the incentives provided by the ordinance. 37

These incentives are independent and distinct from the Government Service Insurance System retirement package. 38

Section 5 of Ordinance No. 08, series of 2009, was amended by Ordinance No. 11, series of 2009, "to exclude those GSIS
and PAG-IBIG benefits the payment[s] of which are passed on [to] the employer." 39 This was to remove any doubt as to
its coverage and applicability and to ensure that no employee will be paid twice. 40 The amended provision reads:

Section 5. Gen[S]an SERVES Program Incentives On Top of Government Service Insurance System (GSIS) and PAG-IBIG
Benefits Any personnel qualified and approved to receive the incentives of this program shall be entitled to whatever
retirement benefits the GSIS or PAG-IBIG is granting to a retiring government employee, except those benefits the
payment of which are passed on to the employer. In which case, the benefits granted under this ordinance shall only be
considered as one of the options available to a retiring city employee.

Moreover, an eligible employee shall receive an early retirement incentive provided under this program at the rate of one
and one-half (1 1/2) months of the employees latest basic salary for every year of service in the City Government.
(Emphasis supplied)

According to petitioner city, GenSan SERVES is an initial step pursuant to its organization development masterplan, 41 which
began with the city mayors issuance of Executive Order No. 40, series of 2008, creating change management teams. 42

Petitioner city cites Sections 16 and 76 of the Local Government Code as its authority to reorganize. It argues that these
provisions necessarily imply the authority of petitioner city to provide retirement benefits, separation pay, and other
incentives to those affected by the reorganization.43

Petitioner city also cites Republic Act No. 6656, otherwise known as An Act to Protect the Security of Tenure of Civil Service
Officers and Employees in the Implementation of Government Reorganization. 44 According to petitioner city, this not only
requires good faith in the implementation of reorganization but mandates the payment of appropriate separation pay,
retirement, and other benefits under existing laws within 90 days from effectivity date of separation. 45
Even President Gloria Macapagal-Arroyo issued Executive Order No. 184 entitled Directing the Reorganization and
Streamlining of the National Development Company on March 10, 2003. In Section 4, it provides for a separation package
anchored on Republic Act No. 6656.46 Petitioner city submits that if the President can reorganize in the absence of any law
authorizing her to do so and provide compensation based on Republic Act No. 6656, with more reason that a local
government unit can reorganize as its power to reorganize is expressly provided in the Local Government Code. 47

Respondent Commission on Audit counters that it correctly found Ordinance No. 08, series of 2009, as invalid in the
absence of a law passed by Congress specifically authorizing the enactment of an ordinance granting an early retirement
scheme.48

Respondent Commission on Audit contends that Sections 16 and 76 of the Local Government Code do not confer authority
upon any local government unit to create a separate or supplementary retirement benefit plan.49 As for Republic Act No.
6656, this contemplates situations where a government position has been abolished, or rendered redundant, or a need
to merge, divide or consolidate positions for lawful causes allowed by the Civil Service Law exists. 50

According to respondent Commission on Audit, petitioner city failed to demonstrate arbitrariness on its part as it merely
observed the proscription under Section 28, paragraph (b) of Commonwealth Act No. 186 when it found the ordinance a
nullity.51

We agree with respondent Commission on Audit but only insofar as Section 5 of the ordinance is concerned. We declare
Section 6 on post-retirement incentives as valid.

III

The constitutional mandate for local autonomy supports petitioner citys issuance of Executive Order No. 40, series of
2008, creating change management teams52 as an initial step for its organization development masterplan.

Local autonomy also grants local governments the power to streamline and reorganize. This power is inferred from Section
76 of the Local Government Code on organizational structure and staffing pattern, and Section 16 otherwise known as the
general welfare clause:

Section 76. Organizational Structure and Staffing Pattern. - Every local government unit shall design and implement its
own organizational structure and staffing pattern taking into consideration its service requirements and financial
capability, subject to the minimum standards and guidelines prescribed by the Civil Service Commission.

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

Section 5, paragraph (a) of the Local Government Code states that "any provision on a power of a local government unit
shall be liberally interpreted in its favor, and in case of doubt, any question thereon shall be resolved in favor or devolution
of powers x x x."

Section 5, paragraph (c) also provides that "the general welfare provisions in this Code shall be liberally interpreted to give
more powers to local government units in accelerating economic development and upgrading the quality of life for the
people in the community." These rules of interpretation emphasize the policy of local autonomy and the devolution of
powers to the local government units.

Designing and implementing a local government units own "organizational structure and staffing pattern" also implies
the power to revise and reorganize. Without such power, local governments will lose the ability to adjust to the needs of
its constituents. Effective and efficient governmental services especially at the local government level require rational and
deliberate changes planned and executed in good faith from time to time.

This was implied in Province of Negros Occidental v. Commissioners, Commission on Audit. 53 In that case, this court
declared as valid the ordinance passed by the province granting and releasing hospitalization and health care insurance
benefits to its officials and employees. This court held that Section 2 of Administrative Order No. 103 54 requiring the
Presidents prior approval before the grant of any allowance or benefit is applicable only to offices under the executive
branch.55 Section 2 does not mention local government units, thus, the prohibition does not apply to them. 56 This court
then referred to the policy of local autonomy as follows:

Thus, consistent with the state policy of local autonomy as guaranteed by the 1987 Constitution, under Section 25, Article
II and Section 2, Article X, and the Local Government Code of 1991, we declare that the grant and release of the
hospitalization and health care insurance benefits given to petitioners officials and employees were validly enacted
through an ordinance passed by petitioners Sangguniang Panlalawigan. 57

Local autonomy allows an interpretation of Sections 76 and 16 as granting petitioner city the authority to create its
organization development program.

Petitioner citys vision in 2005 of "Total Quality Service" for "the improvement of the quality of services delivered by the
city to the delight of its internal and external customers" 58 is a matter within its discretion. It then conducted a process
and practice review for each and every unit within the city, resulting in the formulation of an organization development
masterplan adopted as Executive Order No. 13, series of 2009.59

Resolution No. 004, series of 2009, was later passed requesting for the mayors support for GenSan SERVES. The third
preambular clause states that in order "to transform the bureaucracy into [an] effective and result[s]-oriented structure,
redounding to improved governance, there is a need to entice employees aged 50-59 years old, to retire earlier than [age]
65 for them to enjoy their retirement while they are still healthy."60 Consequently, Ordinance No. 08, series of 2009, was
passed creating the GenSan SERVES program.

In Betoy v. The Board of Directors, NAPOCOR,61 this court explained that a streamlining of organization for a more efficient
system must pass the test of good faith in order to be valid:

A reorganization involves the reduction of personnel, consolidation of offices, or abolition thereof by reason of economy
or redundancy of functions.62 It could result in the loss of one's position through removal or abolition of an office. However,
for a reorganization for the purpose of economy or to make the bureaucracy more efficient to be valid, it must pass the
test of good faith; otherwise, it is void ab initio.63 (Emphasis supplied)

There are indicia of bad faith, none of which are present in this case.

Republic Act No. 6656 invoked by petitioner city as authority for the creation of GenSan SERVES, for example, enumerates
situations considered as bad faith when employees are removed as a result of any reorganization:

SECTION 2. No officer or employee in the career service shall be removed except for a valid cause and after due notice
and hearing. A valid cause for removal exists when, pursuant to a bona fide reorganization, a position has been abolished
or rendered redundant or there is a need to merge, divide, or consolidate positions in order to meet the exigencies of the
service, or other lawful causes allowed by the Civil Service Law. The existence of any or some of the following
circumstances may be considered as evidence of bad faith in the removals made as a result of reorganization, giving rise
to a claim for reinstatement or reappointment by an aggrieved party:

a) Where there is a significant increase in the number of positions in the new staffing pattern of the department or agency
concerned;

b) Where an office is abolished and another performing substantially the same functions in created;

c) Where incumbents are replaced by those less qualified in terms of status of appointment, performance and merit;
d) Where there is a reclassification of offices in the department or agency concerned and the reclassified offices perform
substantially the same functions as the original offices; and

e) Where the removal violates the order of separation provided in Section 3 hereof. (Emphasis supplied)

None of these badges of bad faith exist in this case.

Petitioner city followed the order of priority under Section 4 of its ordinance. 64 It required applicants to undergo medical
examination with the local hospital and considered the hospital chiefs recommendations.65

Unfortunately, these allegations showing good faith is not enough to declare the program created by petitioner city as a
reorganization that justifies the creation of a retirement benefit plan.

Petitioner city alleged that the positions occupied by those who qualified for GenSan SERVES remained vacant, and it
would neither hire replacements nor promote employees earlier than June 30, 2011.66 This means the positions left by
those who availed of the program will eventually be filled up by others. Their positions were not abolished or merged with
other positions for streamlining in the service.

IV

The assailed decision by respondent Commission on Audit was anchored on Section 28, paragraph (b) of Commonwealth
Act No. 186, otherwise known as the Government Service Insurance Act,67 as amended by Republic Act No. 4968.68 This
proscribes all supplementary retirement or pension plans for government employees:

(b) Hereafter no insurance or retirement plan for officers or employees shall be created by any employer. All
supplementary retirement or pension plans heretofore in force in any government office, agency, or instrumentality or
corporation owned and controlled by the government, are hereby declared inoperative or abolished: Provided, That the
rights of those who are already eligible to retire thereunder shall not be affected.

Jurisprudence has discussed the nature and purpose of retirement benefits and pension plans as follows:

Retirement benefits are, after all, a form of reward for an employees loyalty and service to the employer, and are intended
to help the employee enjoy the remaining years of his life, lessening the burden of worrying about his financial support or
upkeep. On the other hand, a pension partakes of the nature of "retained wages" of the retiree for a dual purpose: to
entice competent people to enter the government service, and to permit them to retire from the service with relative
security, not only for those who have retained their vigor, but more so for those who have been incapacitated by illness
or accident.69 (Emphasis supplied)

In Conte v. Commission on Audit,70 this court discussed the purpose behind the proscription found in Section 28, paragraph
(b), as amended. It was to address the need to prevent the proliferation of inequitous plans:

x x x Sec. 28 (b) as amended by RA 4968 in no uncertain terms bars the creation of any insurance or retirement plan
other than the GSIS for government officers and employees, in order to prevent the undue and inequitous proliferation
of such plans. x x x. To ignore this and rule otherwise would be tantamount to permitting every other government office
or agency to put up its own supplementary retirement benefit plan under the guise of such "financial assistance. 71

Section 2 of the ordinance, as amended, defined "applicants" as referring to "qualified employees below sixty (60) years
of age but not less than fifty (50) years and sickly employees below fifty (50) years of age but not less than forty (40) years
old from the effectivity of this Ordinance and shall have rendered service in the City government for at least 15 years."

This means that even employees other than those who are unproductive due to health reasons may apply under the
ordinance. Albeit last in priority, they may still qualify to avail of the incentives pursuant to Section 4, paragraph (d), as
amended:

Section 4. Prioritization. The following applicants shall be prioritized in availing the program:
a) First Employees below sixty (60) years of age but not less than fifty (50) years who are determined by the Chief of
General Santos City Hospital to be qualified to avail of the program;

b) Second Employees below sixty (60) years of age but not less than fifty (50) years who are under continuous medication
as determined by the Chief of General Santos City Hospital;

c) Third Employees below fifty (50) years of age but not less than forty (40) years who are determined by the Chief of
General Santos City Hospital to be physically or mentally incapacitated to further continue rendering service with the City
Government and recommended to avail of the program; and

d) Fourth Employees below sixty (60) years of age but not less than fifty (50) years who are desirous to avail of the
program.

Moreover, Section 3 of the ordinance, as amended, enumerates those who are covered by the program and may thus
apply under the ordinance:

Section 3. Coverage. GenSan SERVES program covers the following employees of the City Government:

(a) personnel occupying permanent positions;

(b) those who are below sixty (60) years of age but not less than fifty (50) years on the date of application;

(c) those who are below fifty (50) years of age but not less than forty (40) years on the date of application but confirmed
by the Chief of General Santos City Hospital to be sickly and recommended to avail early retirement; and

(d) those who must have served the City Government of General Santos a minimum of fifteen (15) continuous years.

Under paragraph (d), employees should have served for a minimum of 15 years to qualify. This requirement is consistent
with the definition of a retirement plan as a form of reward for an employees loyalty and service to the employer.
Moreover, pension plans as defined permit employees to retire with relative security, especially for those who have been
incapacitated by illness.72

Section 5 states that "an eligible employee shall receive an early retirement incentive provided under this program at the
rate of 1 1/2 months of the employees latest basic salary for every year of service in the City Government." This may be
more than the amount of annuity provided in Section 11, paragraph (a) of Commonwealth Act No. 186 as
amended,73 considering that an applicant must have rendered at least 15 years of service in the city government to
qualify.74

Section 5 refers to an "early retirement incentive," the amount of which is pegged on the beneficiarys years of service in
the city government. The ordinance provides that only those who have rendered service to the city government for at
least 15 years may apply.75 Consequently, this provision falls under the definition of a retirement benefit. Applying the
definition in Conte, it is a form of reward for an employees loyalty and service to the city government, and it is intended
to help the employee enjoy the remaining years of his or her life by lessening his or her financial worries.

In any case, those who availed of the GenSan SERVES were separated from the service. Those who are separated from the
service, whether compulsorily for lawful cause,76 or voluntarily when incentivized to retire early for streamlining
purposes,77 should consequently be entitled to a form of separation or severance pay.

Petitioner city invoked Republic Act No. 6656, which provides that employees separated from the service as a result of
any reorganization shall be entitled to separation pay, retirement, and other benefits:

Section 9. All officers and employees who are found by the Civil Service Commission to have been separated in violation
of the provisions of this Act, shall be ordered reinstated or reappointed as the case may be without loss of seniority and
shall be entitled to full pay for the period of separation. Unless also separated for cause, all officers and employees, who
have been separated pursuant to reorganization shall, if entitled thereto, be paid the appropriate separation pay and
retirement and other benefits under existing laws within ninety (90) days from the date of the effectivity of their
separation or from the date of the receipt of the resolution of their appeals as the case may be: Provided, That application
for clearance has been filed and no action thereon has been made by the corresponding department or agency. Those
who are not entitled to said benefits shall be paid a separation gratuity in the amount equivalent to one (1) month salary
for every year of service. Such separation pay and retirement benefits shall have priority of payment out of the savings of
the department or agency concerned. (Emphasis supplied)

Separation or severance pay has been defined as "an allowance usually based on length of service that is payable to an
employee on severance x x x, or as compensation due an employee upon the severance of his employment status with
the employer."78

Section 6 of the ordinance on post-retirement incentives provides for benefits that are not computed based on years of
service. They are lump sum amounts and healthcare benefits:

Section 6. GenSan SERVES Post-Retirement Incentives Upon availment of early retirement, a qualified employee shall
enjoy the following in addition to the above incentives:

(e) Cash gift of Fifty Thousand Pesos (P50,000.00) for the sickly employees;

(f) Lifetime free medical consultation at General Santos City Hospital;

(g) Annual aid in the maximum amount of Five Thousand Pesos (P5,000.00), if admitted at General Santos City Hospital;
and

(h) 14 karat gold ring as token.

The text of the ordinance indicates its purpose of encouraging employees, especially those who are unproductive due to
health reasons, to avail of the program even before they reach the compulsory retirement age. Section 6 provides for a
form of severance pay to those who availed of GenSan SERVES, which was executed in good faith.

We should not be misled by the use of the term "retirement" in Section 6 in determining the nature of the benefits it
provides. Labels are not determinative of substantive content. It is the purpose behind these incentives, as read from the
text of the ordinance and as inferred from the effect of the ordinance as applied, which must govern.

The purpose of Section 6 is also different from the benefits proscribed in Conte v. Commission on Audit,79 and the nature
of its benefits must be taken in the context of its rationale. The benefits provided in Section 6 serve its purpose of inducing
petitioner citys employees, who are unproductive due to health reasons, to retire early. Respondent Commission on
Audits observation that the benefit provided is broader than that provided in Conte v Commission on Audit fails to take
this rationale into consideration. Furthermore, the benefits under GenSan SERVES were only given to a select fewthe
sickly and unproductive due to health reasons. Certainly, this negates the position that the benefits provide for
supplementary retirement benefits that augment existing retirement laws.

In Conte v. Commission on Audit80 cited by respondent Commission on Audit, this court held that the "financial assistance"
option for the difference of benefits under Republic Act No. 660 and Republic Act No. 1616 violated Section 28, paragraph
(b) as amended. Social Security System (SSS) Resolution No. 56 subject of that case provides in part:

NOW, THEREFORE, BE IT RESOLVED, That all the SSS employees who are simultaneously qualified for compulsory
retirement at age 65 or for optional retirement at a lower age be encouraged to avail for themselves the life annuity under
R.A. 660, as amended; x x x.81

The fifth preambular clause of Resolution No. 56 also states that "it is the policy of the Social Security Commission to
promote and to protect the interest of all SSS employees, with a view to providing for their well-being during both their
working and retirement years."82 The financial assistance provides benefits to all Social Security System employees who
are retirable under existing laws and who are qualified to apply. It is available to all present and future Social Security
System employees upon reaching retirement age.83

Without doubt, this financial assistance of Conte augments the retirement benefits provided under existing laws, in
violation of Section 28, paragraph (b), as amended.

On the other hand, Section 3 of Ordinance No. 08, series of 2009 limits its coverage.1a\^/phi1 Only qualified employees
below sixty (60) years of age but not less than fifty (50) years and sickly employees below fifty (50) years of age but not
less than forty (40) years from the effectivity of the ordinance, with at least 15 years of service, are considered. Out of
1,361 regular employees of petitioner city, only 50 employees applied, from which only 39 employees qualified to avail of
the ordinance benefits.84 Petitioner city alleged that there was one more applicant who was supposed to qualify, but she
had died of acute renal failure secondary to diabetes nephropathy before her application was acted upon. 85

Furthermore, unlike in Conte, Ordinance No. 08, series of 2009, was a one-time limited offer.86 The availment period was
only within two months from the ordinances effectivity. 87

In any case, petitioner city is authorized by the Local Government Code to approve ordinances to provide for the care of
the sick:

SECTION 458. Powers, Duties, Functions and Compensation. (a) The Sangguniang Panlungsod, as the legislative body
of the city, shall enact ordinances, approve resolutions and appropriate funds for the general welfare of the city and its
inhabitants pursuant to section 16 of this Code and in the proper exercise of the corporate powers of the city as provided
for under section 22 of this Code, and shall:

xxxx

(5) Approve ordinances which shall ensure the efficient and effective delivery of the basic services and facilities as provided
for under Section 17 of this Code, and in addition to said services and facilities, shall:

xxxx

(xiv) Provide for the care of disabled persons, paupers, the aged, the sick, persons of unsound mind, abandoned minors,
juvenile delinquents, drug dependents, abused children and other needy and disadvantaged persons, particularly children
and youth below eighteen (18) years of age; and, subject to availability of funds, establish and provide for the operation
of centers and facilities for said needy and disadvantaged persons[.] (Emphasis supplied)

This is also consistent with the constitutional mandate for a comprehensive approach to health development, with priority
for the needs of the sick:

ARTICLE XIII
Social Justice and Human Rights

HEALTH

Section 11. The State shall adopt an integrated and comprehensive approach to health development which shall endeavor
to make essential goods, health and other social services available to all the people at affordable cost. There shall be
priority for the needs of the underprivileged, sick, elderly, disabled, women, and children. The State shall endeavor to
provide free medical care to paupers.

Thus, the cash gift for the sickly employees, lifetime free medical consultation in petitioner city's hospital, and other similar
benefits under Section 6 of the ordinance are valid.

The proscription under Section 28, paragraph (b) of Commonwealth Act No. 186, as amended, does not apply to Section
6 of the ordinance.1wphi1 Consequently, the Commission on Audit acted with grave abuse of discretion when it declared
the entire ordinance void and of no effect.
WHEREFORE, the petition is PARTIALLY GRANTED. The assailed Commission on Audit decision dated January 20, 2011 and
resolution dated October 17, 2011 are AFFIRMED with MODIFICATION insofar as Section 6 of Ordinance No. 08, series of
2009, as amended by Ordinance No. 11, series of 2009, is declared as VALID.

SO ORDERED.

EN BANC

G.R. No. 195390, December 10, 2014

GOV. LUIS RAYMUND F. VILLAFUERTE, JR., AND THE PROVINCE OF CAMARINES SUR, Petitioners, v. HON. JESSE M.
ROBREDO, IN HIS CAPACITY AS SECRETARY OF THE DEPARTMENT OF THE INTERIOR AND LOCAL
GOVERNMENT, Respondent.

DECISION

REYES, J.:

This is a petition for certiorari and prohibition1 under Rule 65 of the 1997 Revised Rules of Court filed by former Governor
Luis Raymund F. Villafuerte, Jr. (Villafuerte) and the Province of Camarines Sur (petitioners), seeking to annul and set aside
the following issuances of the late Honorable Jesse M. Robredo (respondent), in his capacity as then Secretary of the
Department of the Interior and Local Government (DILG), to wit:

(a) Memorandum Circular (MC) No. 2010-83 dated August 31, 2010, pertaining to the full disclosure of local budget and
finances, and bids and public offerings;2

(b) MC No. 2010-138 dated December 2, 2010, pertaining to the use of the 20% component of the annual internal
revenue allotment shares;3 and

(c) MC No. 2011-08 dated January 13, 2011, pertaining to the strict adherence to Section 90 of Republic Act (R.A.) No.
10147 or the General Appropriations Act of 2011.4

The petitioners seek the nullification of the foregoing issuances on the ground of unconstitutionality and for having been
issued with grave abuse of discretion amounting to lack or excess of jurisdiction.

The Facts

In 1995, the Commission on Audit (COA) conducted an examination and audit on the manner the local government units
(LGUs) utilized their Internal Revenue Allotment (IRA) for the calendar years 1993-1994. The examination yielded an
official report, showing that a substantial portion of the 20% development fund of some LGUs was not actually utilized
for development projects but was diverted to expenses properly chargeable against the Maintenance and Other
Operating Expenses (MOOE), in stark violation of Section 287 of R.A. No. 7160, otherwise known as the Local
Government Code of 1991 (LGC). Thus, on December 14, 1995, the DILG issued MC No. 95-216,5 enumerating the
policies and guidelines on the utilization of the development fund component of the IRA. It likewise carried a reminder
to LGUs of the strict mandate to ensure that public funds, like the 20% development fund, shall be spent judiciously
and only for the very purpose or purposes for which such funds are intended. 6

On September 20, 2005, then DILG Secretary Angelo T. Reyes and Department of Budget and Management Secretary
Romulo L. Neri issued Joint MC No. 1, series of 2005, 7 pertaining to the guidelines on the appropriation and utilization of
the 20% of the IRA for development projects, which aims to enhance accountability of the LGUs in undertaking
development projects. The said memorandum circular underscored that the 20% of the IRA intended for development
projects should be utilized for social development, economic development and environmental management. 8

On August 31, 2010, the respondent, in his capacity as DILG Secretary, issued the assailed MC No. 2010-83,9 entitled
Full Disclosure of Local Budget and Finances, and Bids and Public Offerings, which aims to promote good governance
through enhanced transparency and accountability of LGUs. The pertinent portion of the issuance reads:

Legal and Administrative Authority

Section 352 of the Local Government Code of 1991 requires the posting within 30 days from the end of each fiscal year
in at least three (3) publicly accessible and conspicuous places in the local government unit a summary of all revenues
collected and funds received including the appropriations and disbursements of such funds during the preceding fiscal
year.

On the other hand, Republic Act No. 9184, known as the Government Procurement Reform Act, calls for the posting of
the Invitation to Bid, Notice of Award, Notice to Proceed and Approved Contract in the procuring entitys premises, in
newspapers of general circulation, the Philippine Government Electronic Procurement System (PhilGEPS) and the
website of the procuring entity.

The declared policy of the State to promote good local governance also calls for the posting of budgets, expenditures,
contracts and loans, and procurement plans of local government units in conspicuous places within public buildings in
the locality, in the web, and in print media of community or general circulation.

Furthermore, the President, in his first State of the Nation Address, directed all government agencies and entities to
bring to an end luxurious spending and misappropriation of public funds and to expunge mendacious and erroneous
projects, and adhere to the zero-based approach budgetary principle.

Responsibility of the Local Chief Executive

All Provincial Governors, City Mayors and Municipal Mayors, are directed to faithfully comply with the abovecited [sic]
provisions of laws, and existing national policy, by posting in conspicuous places within public buildings in the locality, or
in print media of community or general circulation, and in their websites, the following:

1. CY 2010 Annual Budget, information detail to the level of particulars of personal services, maintenance and other
operating expenses and capital outlay per individual offices (Source Document - Local Budget Preparation Form
No. 3, titled, Program Appropriation and Obligation by Object of Expenditure, limited to PS, MOOE and CO. For
sample form, please visit www.naga.gov.ph);

2. Quarterly Statement of Cash Flows, information detail to the level of particulars of cash flows from operating
activities (e.g. cash inflows, total cash inflows, total cash outflows), cash flows from investing activities (e.g. cash
outflows), net increase in cash and cash at the beginning of the period (Source Document - Statement of Cash
Flows Form);

3. CY 2009 Statement of Receipts and Expenditures, information detail to the level of particulars of beginning cash
balance, receipts or income on local sources (e.g., tax revenue, non-tax revenue), external sources, and receipts
from loans and borrowings, surplus of prior years, expenditures on general services, economic services, social
services and debt services, and total expenditures (Source Document - Local Budget Preparation Form No. 2,
titled, Statement of Receipts and Expenditures);
 4. CY 2010 Trust Fund (PDAF) Utilization, information detail to the level of particulars of object expenditures (Source
Document - Local Budget Preparation Form No. 3, titled, Program Appropriation and Obligation by Object of
Expenditure, limited to PDAF Utilization);

5. CY 2010 Special Education Fund Utilization, information detail to the level of particulars of object expenditures
(Source Document - Local Budget Preparation Form No. 3, titled, Program Appropriation and Obligation by
Object of Expenditure, limited to Special Education Fund);

6. CY 2010 20% Component of the IRA Utilization, information detail to the level of particulars of objects of
expenditure on social development, economic development and environmental management (Source Document -
Local Budget Preparation Form No. 3, titled, Program Appropriation and Obligation by Object of Expenditure,
limited to 20% Component of the Internal Revenue Allotment);

7. CY 2010 Gender and Development Fund Utilization, information detail to the level of particulars of object
expenditures (Source Document - Local Budget Preparation Form No. 3, titled, Program Appropriation and
Obligation by Object of Expenditure, limited to Gender and Development Fund);

8. CY 2010 Statement of Debt Service, information detail to the level of name of creditor, purpose of loan, date
contracted, term, principal amount, previous payment made on the principal and interest, amount due for the
budget year and balance of the principal (Source Document - Local Budget Preparation Form No. 6, titled,
Statement of Debt Service);

9. CY 2010 Annual Procurement Plan or Procurement List, information detail to the level of name of project,
individual item or article and specification or description of goods and services, procurement method, procuring
office or fund source, unit price or estimated cost or approved budget for the contract and procurement schedule
(Source Document - LGU Form No. 02, Makati City. For sample form, please visit www.makati.gov.ph.)[;]

10. Items to Bid, information detail to the level of individual Invitation to Bid, containing information as prescribed in
Section 21.1 of Republic Act No. 9184, or The Government Procurement Reform Act, to be updated quarterly
(Source Document - Invitation to Apply for Eligibility and to Bid, as prescribed in Section 21.1 of R.A. No. 9184.
For sample form, please visit www.naga.gov.ph);

11. Bid Results on Civil Works, and Goods and Services, information detail to the level of project reference number,
name and location of project, name (company and proprietor) and address of winning bidder, bid amount,
approved budget for the contract, bidding date, and contract duration, to be updated quarterly (Source
Document Infrastructure Projects/Goods and Services Bid-Out (2010), Naga City. For sample form, please
visit www.naga.gov.ph); and

12. Abstract of Bids as Calculated, information detail to the level of project name, location, implementing office,
approved budget for the contract, quantity and items subject for bidding, and bids of competing bidders, to be
updated quarterly (Source Document - Standard Form No. SF-GOOD-40, Revised May 24, 2004, Naga City. For
sample form, please visit www.naga.gov.ph).

The foregoing circular also states that non-compliance will be meted sanctions in accordance with pertinent laws, rules
and regulations.10

On December 2, 2010, the respondent issued MC No. 2010-138,11 reiterating that 20% component of the IRA shall be
utilized for desirable social, economic and environmental outcomes essential to the attainment of the constitutional
objective of a quality of life for all. It also listed the following enumeration of expenses for which the fund must not be
utilized, viz:

1. Administrative expenses such as cash gifts, bonuses, food allowance, medical assistance, uniforms, supplies,
meetings, communication, water and light, petroleum products, and the like;
 2. Salaries, wages or overtime pay;

3. Travelling expenses, whether domestic or foreign;

4. Registration or participation fees in training, seminars, conferences or conventions;

5. Construction, repair or refinishing of administrative offices;

6. Purchase of administrative office furniture, fixtures, equipment or appliances; and

7. Purchase, maintenance or repair of motor vehicles or motorcycles, except ambulances. 12

On January 13, 2011, the respondent issued MC No. 2011-08,13 directing for the strict adherence to Section 90 of R.A.
No. 10147 or the General Appropriations Act of 2011. The pertinent portion of the issuance reads as follows:

Legal and Administrative Authority

Section 90 of Republic Act No. 10147 (General Appropriations Act) FY 2011 re Use and Disbursement of Internal
Revenue Allotment of LGUs, [sic] stipulates: The amount appropriated for the LGUs share in the Internal Revenue
Allotment shall be used in accordance with Sections 17 (g) and 287 of R.A. No 7160. The annual budgets of LGUs shall be
prepared in accordance with the forms, procedures, and schedules prescribed by the Department of Budget and
Management and those jointly issued with the Commission on Audit. Strict compliance with Sections 288 and 354 of R.A.
No. 7160 and DILG Memorandum Circular No. 2010-83, entitled Full Disclosure of Local Budget and Finances, and Bids
and Public offering is hereby mandated; PROVIDED, That in addition to the publication or posting requirement under
Section 352 of R.A. No. 7160 in three (3) publicly accessible and conspicuous places in the local government unit, the
LGUs shall also post the detailed information on the use and disbursement, and status of programs and projects in the
LGUS websites. Failure to comply with these requirements shall subject the responsible officials to disciplinary actions in
accordance with existing laws. x x x14

xxxx

Sanctions

Non-compliance with the foregoing shall be dealt with in accordance with pertinent laws, rules and regulations. In
particular, attention is invited to the provision of the Local Government Code of 1991, quoted as
follows:chanroblesvirtuallawlibrary

Section 60. Grounds for Disciplinary Actions - An elective local official may be disciplined, suspended, or removed from
office on: (c) Dishonesty, oppression, misconduct in office, gross negligence, or dereliction of duty . x x x15 (Emphasis
and underscoring in the original)

On February 21, 2011, Villafuerte, then Governor of Camarines Sur, joined by the Provincial Government of Camarines
Sur, filed the instant petition for certiorari, seeking to nullify the assailed issuances of the respondent for being
unconstitutional and having been issued with grave abuse of discretion.

On June 2, 2011, the respondent filed his Comment on the petition. 16 Then, on June 22, 2011, the petitioners filed their
Reply (With Urgent Prayer for the Issuance of a Writ of Preliminary Injunction and/or Temporary Restraining Order). 17 In
the Resolution18 dated October 11, 2011, the Court gave due course to the petition and directed the parties to file their
respective memorandum. In compliance therewith, the respondent and the petitioners filed their Memorandum on
January 19, 201219 and on February 8, 201220 respectively.
The petitioners raised the following issues:

Issues

THE HON. SECRETARY OF THE INTERIOR AND LOCAL GOVERNMENT COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN HE ISSUED THE ASSAILED MEMORANDUM CIRCULARS IN
VIOLATION OF THE PRINCIPLES OF LOCAL AUTONOMY AND FISCAL AUTONOMY ENSHRINED IN THE 1987 CONSTITUTION
AND THE LOCAL GOVERNMENT CODE OF 1991[.]

II

THE HON. SECRETARY OF THE INTERIOR AND LOCAL GOVERNMENT COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN HE INVALIDLY ASSUMED LEGISLATIVE POWERS IN
PROMULGATING THE ASSAILED MEMORANDUM CIRCULARS WHICH WENT BEYOND THE CLEAR AND MANIFEST INTENT
OF THE 1987 CONSTITUTION AND THE LOCAL GOVERNMENT CODE OF 1991[.] 21

Ruling of the Court

The present petition revolves around the main issue: Whether or not the assailed memorandum circulars violate the
principles of local and fiscal autonomy enshrined in the Constitution and the LGC.

The present petition is ripe for

judicial review.

At the outset, the respondent is questioning the propriety of the exercise of the Courts power of judicial review over
the instant case. He argues that the petition is premature since there is yet any actual controversy that is ripe for judicial
determination. He points out the lack of allegation in the petition that the assailed issuances had been fully
implemented and that the petitioners had already exhausted administrative remedies under Section 25 of the Revised
Administrative Code before filing the same in court.22

It is well-settled that the Courts exercise of the power of judicial review requires the concurrence of the following
elements: (1) there must be an actual case or controversy calling for the exercise of judicial power; (2) the person
challenging the act must have the standing to question the validity of the subject act or issuance; otherwise stated, he
must have a personal and substantial interest in the case such that he has sustained, or will sustain, direct injury as a
result of its enforcement; (3) the question of constitutionality must be raised at the earliest opportunity; and (4) the
issue of constitutionality must be the very lis mota of the case.23

The respondent claims that there is yet any actual case or controversy that calls for the exercise of judicial review. He
contends that the mere expectation of an administrative sanction does not give rise to a justiciable controversy
especially, in this case, that the petitioners have yet to exhaust administrative remedies available. 24

The Court disagrees.

In La Bugal-Blaan Tribal Association, Inc. v. Ramos,25 the Court characterized an actual case or controversy, viz:

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. The power does not
extend to hypothetical questions since any attempt at abstraction could only lead to dialectics and barren legal
questions and to sterile conclusions unrelated to actualities.26 (Citations omitted)

The existence of an actual controversy in the instant case cannot be overemphasized. At the time of filing of the instant
petition, the respondent had already implemented the assailed memorandum circulars. In fact, on May 26, 2011,
Villafuerte received Audit Observation Memorandum (AOM) No. 2011-009 dated May 10, 201127 from the Office of the
Provincial Auditor of Camarines Sur, requiring him to comment on the observation of the audit team, which states:

The Province failed to post the transactions and documents required under Department of Interior and Local
Government (DILG) Memorandum Circular No. 2010-83, thereby violating the mandate of full disclosure of Local Budget
and Finances, and Bids and Public Offering.

xxxx

The local officials concerned are reminded of the sanctions mentioned in the circular which is quoted hereunder, thus:

Noncompliance with the foregoing shall be dealt with in accordance with pertinent laws, rules and regulations. In
particular, attention is invited to the provision of Local Government Code of 1991, quoted as
follows:chanroblesvirtuallawlibrary

Section 60. Grounds for Disciplinary Actions An elective local official may be disciplined, suspended or removed from
office on: (c) Dishonesty, oppression, misconduct in office, gross negligence or dereliction of duty.28

The issuance of AOM No. 2011-009 to Villafuerte is a clear indication that the assailed issuances of the respondent are
already in the full course of implementation. The audit memorandum specifically mentioned of Villafuertes alleged non-
compliance with MC No. 2010-83 regarding the posting requirements stated in the circular and reiterated the sanctions
that may be imposed for the omission. The fact that Villafuerte is being required to comment on the contents of AOM
No. 2011-009 signifies that the process of investigation for his alleged violation has already begun. Ultimately, the
investigation is expected to end in a resolution on whether a violation has indeed been committed, together with the
appropriate sanctions that come with it. Clearly, Villafuertes apprehension is real and well-founded as he stands to be
sanctioned for non-compliance with the issuances.

There is likewise no merit in the respondents claim that the petitioners failure to exhaust administrative remedies
warrants the dismissal of the petition. It bears emphasizing that the assailed issuances were issued pursuant to the rule-
making or quasi-legislative power of the DILG. This pertains to the power to make rules and regulations which results in
delegated legislation that is within the confines of the granting statute. 29 Not to be confused with the quasi-legislative
or rule-making power of an administrative agency is its quasi-judicial or administrative adjudicatory power. This is the
power to hear and determine questions of fact to which the legislative policy is to apply and to decide in accordance
with the standards laid down by the law itself in enforcing and administering the same law.30 In challenging the validity
of an administrative issuance carried out pursuant to the agencys rule-making power, the doctrine of exhaustion of
administrative remedies does not stand as a bar in promptly resorting to the filing of a case in court. This was made clear
by the Court in Smart Communications, Inc. (SMART) v. National Telecommunications Commission (NTC),31 where it was
ruled, thus:
In questioning the validity or constitutionality of a rule or regulation issued by an administrative agency, a party need
not exhaust administrative remedies before going to court. This principle applies only where the act of the
administrative agency concerned was performed pursuant to its quasi-judicial function, and not when the assailed act
pertained to its rule-making or quasi-legislative power. x x x.32

Considering the foregoing clarification, there is thus no bar for the Court to resolve the substantive issues raised in the
petition.

The assailed memorandum circulars

do not transgress the local and fiscal
autonomy granted to LGUs.

The petitioners argue that the assailed issuances of the respondent interfere with the local and fiscal autonomy of LGUs
embodied in the Constitution and the LGC. In particular, they claim that MC No. 2010-138 transgressed these
constitutionally-protected liberties when it restricted the meaning of development and enumerated activities which
the local government must finance from the 20% development fund component of the IRA and provided sanctions for
local authorities who shall use the said component of the fund for the excluded purposes stated therein. 33 They argue
that the respondent cannot substitute his own discretion with that of the local legislative council in enacting its annual
budget and specifying the development projects that the 20% component of its IRA should fund.34

The argument fails to persuade.

The Constitution has expressly adopted the policy of ensuring the autonomy of LGUs. 35 To highlight its significance, the
entire Article X of the Constitution was devoted to laying down the bedrock upon which this policy is anchored.

It is also pursuant to the mandate of the Constitution of enhancing local autonomy that the LGC was enacted. Section 2
thereof was a reiteration of the state policy. It reads, thus:

Sec. 2. Declaration of Policy. (a) It is hereby declared the policy of the State that the territorial and political
subdivisions of the State shall enjoy genuine and meaningful local autonomy to enable them to attain their fullest
development as self-reliant communities and make them more effective partners in the attainment of national goals.
Toward this end, the State shall provide for a more responsive and accountable local government structure instituted
through a system of decentralization whereby local government units shall be given more powers, authority,
responsibilities, and resources. The process of decentralization shall proceed from the national government to the local
government units.

Verily, local autonomy means a more responsive and accountable local government structure instituted through a
system of decentralization.36 In Limbona v. Mangelin,37 the Court elaborated on the concept of decentralization, thus:

[A]utonomy is either decentralization of administration or decentralization of power. There is decentralization of

administration when the central government delegates administrative powers to political subdivisions in order to
broaden the base of government power and in the process to make local governments more responsive and
accountable, and ensure their fullest development as self-reliant communities and make them more effective partners
in the pursuit of national development and social progress. At the same time, it relieves the central government of the
burden of managing local affairs and enables it to concentrate on national concerns. x x x.

Decentralization of power, on the other hand, involves an abdication of political power in the favor of local governments
[sic] units declared to be autonomous. In that case, the autonomous government is free to chart its own destiny and
shape its future with minimum intervention from central authorities. x x x. 38 (Citations omitted)
To safeguard the state policy on local autonomy, the Constitution confines the power of the President over LGUs to
mere supervision.39 The President exercises general supervision over them, but only to ensure that local affairs are
administered according to law. He has no control over their acts in the sense that he can substitute their judgments
with his own.40 Thus, Section 4, Article X of the Constitution, states:

Section 4. The President of the Philippines shall exercise general supervision over local governments. Provinces with
respect to component cities and municipalities, and cities and municipalities with respect to component barangays, shall
ensure that the acts of their component units are within the scope of their prescribed powers and functions.

In Province of Negros Occidental v. Commissioners, Commission on Audit, 41 the Court distinguished general supervision
from executive control in the following manner:

The Presidents power of general supervision means the power of a superior officer to see to it that subordinates
perform their functions according to law. This is distinguished from the Presidents power of control which is the power
to alter or modify or set aside what a subordinate officer had done in the performance of his duties and to substitute the
judgment of the President over that of the subordinate officer. The power of control gives the President the power to
revise or reverse the acts or decisions of a subordinate officer involving the exercise of discretion. 42 (Citations omitted)

It is the petitioners contention that the respondent went beyond the confines of his supervisory powers, as alter ego of
the President, when he issued MC No. 2010-138. They argue that the mandatory nature of the circular, with the threat
of imposition of sanctions for non-compliance, evinces a clear desire to exercise control over LGUs. 43

The Court, however, perceives otherwise.

A reading of MC No. 2010-138 shows that it is a mere reiteration of an existing provision in the LGC. It was plainly
intended to remind LGUs to faithfully observe the directive stated in Section 287 of the LGC to utilize the 20% portion of
the IRA for development projects. It was, at best, an advisory to LGUs to examine themselves if they have been
complying with the law. It must be recalled that the assailed circular was issued in response to the report of the COA
that a substantial portion of the 20% development fund of some LGUs was not actually utilized for development projects
but was diverted to expenses more properly categorized as MOOE, in violation of Section 287 of the LGC. This intention
was highlighted in the very first paragraph of MC No. 2010-138, which reads:

Section 287 of the Local Government Code mandates every local government to appropriate in its annual budget no less
than 20% of its annual revenue allotment for development projects. In common understanding, development means the
realization of desirable social, economic and environmental outcomes essential in the attainment of the constitutional
objective of a desired quality of life for all.44 (Underscoring in the original)

That the term development was characterized as the realization of desirable social, economic and environmental
outcome does not operate as a restriction of the term so as to exclude some other activities that may bring about the
same result. The definition was a plain characterization of the concept of development as it is commonly understood.
The statement of a general definition was only necessary to illustrate among LGUs the nature of expenses that are
properly chargeable against the development fund component of the IRA. It is expected to guide them and aid them in
rethinking their ways so that they may be able to rectify lapses in judgment, should there be any, or it may simply stand
as a reaffirmation of an already proper administration of expenses.

The same clarification may be said of the enumeration of expenses in MC No. 2010-138. To begin with, it is erroneous to
call them exclusions because such a term signifies compulsory disallowance of a particular item or activity. This is not the
contemplation of the enumeration. Again, it is helpful to retrace the very reason for the issuance of the assailed circular
for a better understanding. The petitioners should be reminded that the issuance of MC No. 2010-138 was brought
about by the report of the COA that the development fund was not being utilized accordingly. To curb the alleged
misuse of the development fund, the respondent deemed it proper to remind LGUs of the nature and purpose of the
provision for the IRA through MC No. 2010-138. To illustrate his point, he included the contested enumeration of the
items for which the development fund must generally not be used. The enumerated items comprised the expenses
which the COA perceived to have been improperly earmarked or charged against the development fund based on the
audit it conducted.

Contrary to the petitioners posturing, however, the enumeration was not meant to restrict the discretion of the LGUs in
the utilization of their funds. It was meant to enlighten LGUs as to the nature of the development fund by delineating it
from other types of expenses. It was incorporated in the assailed circular in order to guide them in the proper
disposition of the IRA and avert further misuse of the fund by citing current practices which seemed to be incompatible
with the purpose of the fund. Even then, LGUs remain at liberty to map out their respective development plans solely on
the basis of their own judgment and utilize their IRAs accordingly, with the only restriction that 20% thereof be
expended for development projects. They may even spend their IRAs for some of the enumerated items should they
partake of indirect costs of undertaking development projects. In such case, however, the concerned LGU must ascertain
that applicable rules and regulations on budgetary allocation have been observed lest it be inviting an administrative
probe.

The petitioners likewise misread the issuance by claiming that the provision of sanctions therein is a clear indication of
the Presidents interference in the fiscal autonomy of LGUs. The relevant portion of the assailed issuance reads, thus:

All local authorities are further reminded that utilizing the 20% component of the Internal Revenue Allotment, whether
willfully or through negligence, for any purpose beyond those expressly prescribed by law or public policy shall be
subject to the sanctions provided under the Local Government Code and under such other applicable laws. 45

Significantly, the issuance itself did not provide for sanctions. It did not particularly establish a new set of acts or
omissions which are deemed violations and provide the corresponding penalties therefor. It simply stated a reminder to
LGUs that there are existing rules to consider in the disbursement of the 20% development fund and that non-
compliance therewith may render them liable to sanctions which are provided in the LGC and other applicable laws.
Nonetheless, this warning for possible imposition of sanctions did not alter the advisory nature of the issuance.

At any rate, LGUs must be reminded that the local autonomy granted to them does not completely severe them from
the national government or turn them into impenetrable states. Autonomy does not make local governments sovereign
within the state.46 In Ganzon v. Court of Appeals,47 the Court reiterated:

Autonomy, however, is not meant to end the relation of partnership and interdependence between the central
administration and local government units, or otherwise, to usher in a regime of federalism. The Charter has not taken
such a radical step. Local governments, under the Constitution, are subject to regulation, however limited, and for no
other purpose than precisely, albeit paradoxically, to enhance self-government.48

Thus, notwithstanding the local fiscal autonomy being enjoyed by LGUs, they are still under the supervision of the
President and maybe held accountable for malfeasance or violations of existing laws. Supervision is not incompatible
with discipline. And the power to discipline and ensure that the laws be faithfully executed must be construed to
authorize the President to order an investigation of the act or conduct of local officials when in his opinion the good of
the public service so requires.49

Clearly then, the Presidents power of supervision is not antithetical to investigation and imposition of sanctions. In Hon.
Joson v. Exec. Sec. Torres,50 the Court pointed out, thus:
Independently of any statutory provision authorizing the President to conduct an investigation of the nature involved in
this proceeding, and in view of the nature and character of the executive authority with which the President of the
Philippines is invested, the constitutional grant to him of power to exercise general supervision over all local governments
and to take care that the laws be faithfully executed must be construed to authorize him to order an investigation of the
act or conduct of the petitioner herein. Supervision is not a meaningless thing. It is an active power. It is certainly not
without limitation, but it at least implies authority to inquire into facts and conditions in order to render the power real
and effective. x x x.51 (Emphasis ours and italics in the original)

As in MC No. 2010-138, the Court finds nothing in two other questioned issuances of the respondent, i.e., MC Nos. 2010-
83 and 2011-08, that can be construed as infringing on the fiscal autonomy of LGUs. The petitioners claim that the
requirement to post other documents in the mentioned issuances went beyond the letter and spirit of Section 352 of
the LGC and R.A. No. 9184, otherwise known as the Government Procurement Reform Act, by requiring that budgets,
expenditures, contracts and loans, and procurement plans of LGUs be publicly posted as well. 52

Pertinently, Section 352 of the LGC reads:

Section 352. Posting of the Summary of Income and Expenditures. Local treasurers, accountants, budget officers, and
other accountable officers shall, within thirty (30) days from the end of the fiscal year, post in at least three (3) publicly
accessible and conspicuous places in the local government unit a summary of all revenues collected and funds received
including the appropriations and disbursements of such funds during the preceding fiscal year.

R.A. No. 9184, on the other hand, requires the posting of the invitation to bid, notice of award, notice to proceed, and
approved contract in the procuring entitys premises, in newspapers of general circulation, and the website of the
procuring entity.53

It is well to remember that fiscal autonomy does not leave LGUs with unbridled discretion in the disbursement of public
funds. They remain accountable to their constituency. For, public office was created for the benefit of the people and
not the person who holds office.

The Court strongly enunciated in ABAKADA GURO Party List (formerly AASJS), et al. v. Hon. Purisima, et al.,54 thus:

Public office is a public trust. It must be discharged by its holder not for his own personal gain but for the benefit of the
public for whom he holds it in trust. By demanding accountability and service with responsibility, integrity, loyalty,
efficiency, patriotism and justice, all government officials and employees have the duty to be responsive to the needs of
the people they are called upon to serve.55

Thus, the Constitution strongly summoned the State to adopt and implement a policy of full disclosure of all transactions
involving public interest and provide the people with the right to access public information. 56 Section 352 of the LGC is a
response to this call for transparency. It is a mechanism of transparency and accountability of local government officials
and is in fact incorporated under Chapter IV of the LGC which deals with Expenditures, Disbursements, Accounting and
Accountability.

In the same manner, R.A. No. 9184 established a system of transparency in the procurement process and in the
implementation of procurement contracts in government agencies.57 It is the public monitoring of the procurement
process and the implementation of awarded contracts with the end in view of guaranteeing that these contracts are
awarded pursuant to the provisions of the law and its implementing rules and regulations, and that all these contracts
are performed strictly according to specifications.58
The assailed issuances of the respondent, MC Nos. 2010-83 and 2011-08, are but implementation of this avowed policy
of the State to make public officials accountable to the people. They are amalgamations of existing laws, rules and
regulation designed to give teeth to the constitutional mandate of transparency and accountability.

A scrutiny of the contents of the mentioned issuances shows that they do not, in any manner, violate the fiscal
autonomy of LGUs. To be clear, [f]iscal autonomy means that local governments have the power to create their own
sources of revenue in addition to their equitable share in the national taxes released by the national government, as well
as the power to allocate their resources in accordance with their own priorities. It extends to the preparation of their
budgets, and local officials in turn have to work within the constraints thereof. 59

It is inconceivable, however, how the publication of budgets, expenditures, contracts and loans and procurement plans
of LGUs required in the assailed issuances could have infringed on the local fiscal autonomy of LGUs. Firstly, the
issuances do not interfere with the discretion of the LGUs in the specification of their priority projects and the allocation
of their budgets. The posting requirements are mere transparency measures which do not at all hurt the manner by
which LGUs decide the utilization and allocation of their funds.

Secondly, it appears that even Section 352 of the LGC that is being invoked by the petitioners does not exclude the
requirement for the posting of the additional documents stated in MC Nos. 2010-83 and 2011-08. Apparently, the
mentioned provision requires the publication of a summary of revenues collected and funds received, including the
appropriations and disbursements of such funds. The additional requirement for the posting of budgets, expenditures,
contracts and loans, and procurement plans are well-within the contemplation of Section 352 of the LGC considering
they are documents necessary for an accurate presentation of a summary of appropriations and disbursements that an
LGU is required to publish.

Finally, the Court believes that the supervisory powers of the President are broad enough to embrace the power to
require the publication of certain documents as a mechanism of transparency. In Pimentel, Jr. v. Hon. Aguirre,60 the
Court reminded that local fiscal autonomy does not rule out any manner of national government intervention by way of
supervision, in order to ensure that local programs, fiscal and otherwise, are consistent with national goals. The
President, by constitutional fiat, is the head of the economic and planning agency of the government, primarily
responsible for formulating and implementing continuing, coordinated and integrated social and economic policies,
plans and programs for the entire country.61

Moreover, the Constitution, which was drafted after long years of dictatorship and abuse of power, is now replete with
numerous provisions directing the adoption of measures to uphold transparency and accountability in government, with
a view of protecting the nation from repeating its atrocious past. In particular, the Constitution commands the strict
adherence to full disclosure of information on all matters relating to official transactions and those involving public
interest. Pertinently, Section 28, Article II and Section 7, Article III of the Constitution, provide:

Article II
Declaration of Principles and State Policies Principles

Section 28. Subject to reasonable conditions prescribed by law, the State adopts and implements a policy of full public
disclosure of all its transactions involving public interest.

Article III
Bill of Rights

Section 7. The right of the people to information on matters of public concern shall be recognized. Access to official
records, and to documents and papers pertaining to official acts, transactions, or decisions, as well as to government
research data used as basis for policy development, shall be afforded the citizen, subject to such limitations as may be
provided by law.

In the instant case, the assailed issuances were issued pursuant to the policy of promoting good governance through
transparency, accountability and participation. The action of the respondent is certainly within the constitutional bounds
of his power as alter ego of the President.

It is needless to say that the power to govern is a delegated authority from the people who hailed the public official to
office through the democratic process of election. His stay in office remains a privilege which may be withdrawn by the
people should he betray his oath of office. Thus, he must not frown upon accountability checks which aim to show how
well he is performing his delegated power. For, it is through these mechanisms of transparency and accountability that
he is able to prove to his constituency that he is worthy of the continued privilege.

WHEREFORE, in view of the foregoing considerations, the petition is DISMISSED for lack of merit.

SO ORDERED.

EN BANC

G.R. No. 199752, February 17, 2015

LUCENA D. DEMAALA, Petitioner, v. COMMISSION ON AUDIT, REPRESENTED BY ITS CHAIRPERSON COMMISSIONER

MA. GRACIA M. PULIDO TAN, Respondent.

DECISION

LEONEN, J.:

Through this Petition for Certiorari, Lucena D. Demaala (Demaala) prays that the September 22, 2008 Decision (Decision
No. 2008-087)1 and the November 16, 2011 Resolution (Decision No. 2011-083)2of the Commission on Audit be reversed
and set aside.

The Commission on Audits Decision No. 2008-0873 denied Demaalas appeal and affirmed with modification Local
Decision No. 2006-0564 dated April 19, 2006 of the Commission on Audits Legal and Adjudication Office (LAO). LAO
Local Decision No. 2006-056, in turn, affirmed Notice of Charge (NC) No. 2004-04-101.5 NC No. 2004-04-101 was dated
August 30, 2004 and issued by Rodolfo C. Sy (Regional Cluster Director Sy), Regional Cluster Director of the Legal
Adjudication Sector, Commission on Audit Regional Office No. IV, Quezon City.

The Commission on Audits Decision No. 2011-083 denied the Motion for Reconsideration filed by Demaala.6

The Sangguniang Panlalawigan of Palawan enacted Provincial Ordinance No. 332-A, Series of 1995, entitled An
Ordinance Approving and Adopting the Code Governing the Revision of Assessments, Classification and Valuation of Real
Properties in the Province of Palawan (Ordinance).7 Chapter 5, Section 48 of the Ordinance provides for an additional
levy on real property tax for the special education fund at the rate of one-half percent or 0.5% as follows:
Section 48- Additional Levy on Real Property Tax for Special Education Fund. There is hereby levied an annual tax at
the rate of one-half percent (1/2%) of the assessed value property tax. The proceeds thereof shall exclusively accrue to
the Special Education Fund (SEF).8

In conformity with Section 48 of the Ordinance, the Municipality of Narra, Palawan, with Demaala as mayor, collected
from owners of real properties located within its territory an annual tax as special education fund at the rate of 0.5% of
the assessed value of the property subject to tax. This collection was effected through the municipal treasurer. 9

On post-audit, Audit Team Leader Juanito A. Nostratis issued Audit Observation Memorandum (AOM) No. 03-005 dated
August 7, 2003 in which he noted supposed deficiencies in the special education fund collected by the Municipality of
Narra.10 He questioned the levy of the special education fund at the rate of only 0.5% rather than at 1%, the rate stated
in Section 23511 of Republic Act No. 7160, otherwise known as the Local Government Code of 1991 (Local Government
Code).12

After evaluating AOM No. 03-005, Regional Cluster Director Sy issued NC No. 2004-04-101 dated August 30, 200413 in
the amount of P1,125,416.56. He held Demaala, the municipal treasurer of Narra, and all special education fund payors
liable for the deficiency in special education fund collections.

This Notice of Charge reads:

NC No. 2004-04-101
Date: August 30, 2004

NOTICE OF CHARGE

The Municipal Mayor

Narra, Palawan

Attention: Municipal Accountant

We have reviewed and evaluated Audit Obersvation Memorandum (AOM) No. 03-005 dated August 7, 2003 and noted
the following deficiencies:

Reference PAYOR AMOUNT CHARGED Persons LIABLE FACTS AND/OR

REASONS FOR
No. Date CHARGE

1,125,416.56 Lucena D. Demaala The additional levy for SEF

should be one per cent (1%)
- Municipal Mayor
instead of 0.5% as provided
- for allowing the reduced rate of
Please see attached schedule in RA 5447 dated September
additional real property taxes
25, 1968

Municipal Treasurer

- for collecting understated taxes

 All payors

1,125,416.56

Charge not appealed within six (6) months as prescribed under Sections 49, 50 and 51 of PD No. 1445 shall become final
and executory.

RODOLFY C. SY (sgd.)
Regional Cluster Director14

The Municipality of Narra, through Demaala, filed the Motion for Reconsideration 15 dated December 2, 2004. It stressed
that the collection of the special education fund at the rate of 0.5% was merely in accordance with the Ordinance. On
March 9, 2005, Regional Cluster Director Sy issued an Indorsement denying this Motion for Reconsideration. 16

Following this, the Municipality of Narra, through Demaala, filed an appeal 17 with the Commission on Audits Legal and
Adjudication Office. In Local Decision No. 2006-05618 dated April 19, 2006, this appeal was denied.

The Municipality of Narra, through Demaala, then filed a Petition for Review 19 with the Commission on Audit.

In Decision No. 2008-08720 dated September 22, 2008, the Commission on Audit ruled against Demaala and affirmed
LAO Local Decision No. 2006-056 with the modification that former Palawan Vice Governor Joel T. Reyes and the other
members of the Sangguniang Panlalawigan of Palawan who enacted the Ordinance21 were held jointly and severally
liable with Demaala, the municipal treasurer of Narra, and the special education fund payors. 22

The dispositive portion of this Decision reads:

WHEREFORE, premises considered, the instant appeal is hereby DENIED for lack of merit. Accordingly, LAO Local
Decision No. 2006-056 is AFFIRMED with modification, to include Former Vice-Governor and Presiding Officer Joel T.
Reyes, Chairman Pro-Tempore Rosalino R. Acosta, Majority Floor Leader Ernesto A. Llacuna, Asst. Majority Floor Leader
Antonio C. Alvarez, Asst. Minority Floor Leader Haide B. Barroma, Hon. Leoncio N. Ola, Hon. Ramon A. Zabala, Hon.
Belen B. Abordo, Hon. Valentin A. Baaco, Hon. Claro Ordinario, Hon. Derrick R. Pablico, Hon. Laine C. Abogado and Hon.
Joel B. Bitongon among the persons liable in the Notice of Charge. They shall be jointly and severally liable with Mayor
Lucena D. Demaala, together with the Municipal Treasurer and all the payors of the under-collected real property tax in
the total amount of P1,125,416.56.

The Audit Team Leader is directed to issue a Supplemental Notice of Charge to include the members of the Sangguniang
Panlalawigan as among the persons liable.23

Thereafter, Demaala, who was no longer the mayor of the Municipality of Narra, filed a Motion for
Reconsideration.24 Former Vice Governor Joel T. Reyes and the other members of the Sangguniang Panlalawigan of
Palawan who were held liable under Decision No. 2008-087 filed a separate Motion for Reconsideration.25 The
Commission on Audits Decision No. 2011-08326 dated November 16, 2011 affirmed its September 22, 2008 Decision.

Demaala then filed with this court the present Petition for Certiorari. 27

Respondent Commission on Audit, through the Office of the Solicitor General, filed its Comment 28 on April 20,
2012. Petitioner Demaala filed her Reply29 on September 6, 2012. Thereafter, the parties filed their respective
Memoranda.30
II

For resolution in this case are the following issues:

First, whether respondent committed grave abuse of discretion amounting to lack or excess of jurisdiction in holding
that there was a deficiency in the Municipality of Narras collection of the additional levy for the special education
fund. Subsumed in this issue is the matter of whether a municipality within the Metropolitan Manila Area, a city, or a
province may have an additional levy on real property for the special education fund at the rate of less than 1%.

Second, assuming that respondent correctly held that there was a deficiency, whether respondent committed grave
abuse of discretion amounting to lack or excess or jurisdiction in holding petitioner personally liable for the deficiency.

We find for petitioner.

Setting the rate of the additional levy for the special education fund at less than 1% is within the taxing power of local
government units. It is consistent with the guiding constitutional principle of local autonomy.

III

The power to tax is an attribute of sovereignty. It is inherent in the state. Provinces, cities, municipalities, and
barangays are mere territorial and political subdivisions of the state. They act only as part of the sovereign. Thus, they
do not have the inherent power to tax.31 Their power to tax must be prescribed by law.

Consistent with the view that the power to tax does not inhere in local government units, this court has held that a
reserved temperament must be adhered to in construing the extent of a local government units power to tax. As
explained in Icard v. City Council of Baguio:32

It is settled that a municipal corporation unlike a sovereign state is clothed with no inherent power of taxation. The
charter or statute must plainly show an intent to confer that power or the municipality, cannot assume it. And the
power when granted is to be construed in strictissimi juris. Any doubt or ambiguity arising out of the term used in
granting that power must be resolved against the municipality. Inferences, implications, deductions all these have no
place in the interpretation of the taxing power of a municipal corporation.33 (Emphasis supplied)

Article X, Section 5 of the 1987 Constitution is the basis of the taxing power of local government units:

Section 5. Each local government unit shall have the power to create its own sources of revenues and to levy taxes, fees
and charges subject to such guidelines and limitations as the Congress may provide, consistent with the basic policy of
local autonomy. Such taxes, fees, and charges shall accrue exclusively to the local governments. (Emphasis supplied)

The taxing power granted by constitutional fiat to local government units exists in the wider context to ensure the
autonomy of local governments.34 As Article II, Section 25 of the 1987 Constitution unequivocally provides:

Section 25. The State shall ensure the autonomy of local governments.

Article II, Section 25 is complemented by Article X, Section 2:

Section 2. The territorial and political subdivisions shall enjoy local autonomy.
The 1935 Constitution was entirely silent on local autonomy, albeit making a distinction between executive
departments, bureaus, and offices on the one hand, and local governments on the other. It provided that the President
had control over the former but merely exercise[d] general supervision35 over the latter. Article VII, Section 10(1) of
the 1935 Constitution provided:

SEC. 10. (1) The President shall have control of all the executive departments, bureaus, or offices, exercise general
supervision over all local governments as may be provided by law, and take care that the laws be faithfully executed.

Similarly, the 1935 Constitution was silent on the taxing power of local government units.

The 1973 Constitution provided for local autonomy. Article II, Section 10 of the 1973 Constitution read:

SEC. 10. The State shall guarantee and promote the autonomy of local government units, especially the [barangays], to
ensure their fullest development as self-reliant communities.

Any trend in the 1973 Constitution towards greater autonomy for local government units was aborted in 1972 when
Ferdinand Marcos placed the entire country under martial law [thereby] stunt[ing] the development of local
governments by centralizing the government in Manila. 36 While local autonomy was provided for in the 1973
Constitution, its existence was confined to principle and theory. Practice neutered all of Article XI of the 1973
Constitution (on local government), including Section 5 which provided for the taxing power of local government units.
Article XI, Section 5 reads:

SEC. 5. Each local government unit shall have the power to create its own sources of revenue and to levy taxes, subject
to such limitations as may be provided by law.

Article X, Section 5 of the 1987 Constitution is more emphatic in empowering local government units in the matter of
taxation compared with Article XI, Section 5 of the 1973 Constitution. In addition to stating that local government units
have the power to tax (subject to Congressional guidelines and limitations), Article X, Section 5 of the 1987 Constitution
adds the phrase consistent with the basic policy of local autonomy. Further, it is definite with the use of funds
generated by local government units through the exercise of their taxing powers, providing that [s]uch taxes, fees, and
charges shall accrue exclusively to the local governments. 37

Apart from administrative autonomy, an equally vital facet of local governance under the 1987 Constitution
is fiscal autonomy. In Pimentel v. Aguirre:38

Under existing law, local government units, in addition to having administrative autonomy in the exercise of their
functions, enjoy fiscal autonomy as well. Fiscal autonomy means that local governments have the power to create their
own sources of revenue in addition to their equitable share in the national taxes released by the national government,
as well as the power to allocate their resources in accordance with their own priorities. It extends to the preparation of
their budgets, and local officials in turn have to work within the constraints thereof. They are not formulated at the
national level and imposed on local governments, whether they are relevant to local needs and resources or not. Hence,
the necessity of a balancing of viewpoints and the harmonization of proposals from both local and national officials, who
in any case are partners in the attainment of national goals. 39

IV

The taxing powers of local government units must be read in relation to their power to effect their basic autonomy.
Consistent with the 1987 Constitutions declared preference, the taxing powers of local government units must be
resolved in favor of their local fiscal autonomy. In City Government of San Pablo v. Reyes:40

The power to tax is primarily vested in Congress. However, in our jurisdiction, it may be exercised by local legislative
bodies, no longer merely by virtue of a valid delegation as before, but pursuant to direct authority conferred by Section
5, Article X of the Constitution. Thus Article X, Section 5 of the Constitution reads:

Sec. 5 Each Local Government unit shall have the power to create its own sources of revenue and to levy taxes, fees
and charges subject to such guidelines and limitations as the Congress may provide, consistent with the basic policy of
local autonomy. Such taxes, fees and charges shall accrue exclusively to the Local Governments.

The important legal effect of Section 5 is that henceforth, in interpreting statutory provision on municipal fiscal powers,
doubts will have to be resolved in favor of municipal corporations. 41 (Emphasis supplied)

Similarly, in San Juan v. Civil Service Commission,42 this court stated:

We have to obey the clear mandate on local autonomy. Where a law is capable of two interpretations, one in favor of
centralized power in Malacaang and the other beneficial to local autonomy, the scales must be weighed in favor of
autonomy.43

The Local Government Code was enacted pursuant to the specific mandate of Article X, Section 3 of the 1987
Constitution44 and its requirements of decentralization. Its provisions, including those on local taxation, must be read in
light of the jurisprudentially settled preference for local autonomy.

The limits on the level of additional levy for the special education fund under Section 235 of the Local Government Code
should be read as granting fiscal flexibility to local government units.

Book II of the Local Government Code governs local taxation and fiscal matters. Title II of Book II governs real property
taxation.

Section 235 of the Local Government Code allows provinces and cities, as well as municipalities in Metro Manila, to
collect, on top of the basic annual real property tax, an additional levy which shall exclusively accrue to the special
education fund:

Section 235. Additional Levy on Real Property for the Special Education Fund. - A province or city, or a municipality
within the Metropolitan Manila Area, may levy and collect an annual tax of one percent (1%) on the assessed value of
real property which shall be in addition to the basic real property tax. The proceeds thereof shall exclusively accrue to
the Special Education Fund (SEF). (Emphasis supplied)

The special education fund is not an original creation of the Local Government Code. It was initially devised by Republic
Act No. 5447.45 The rate of 1% is also not a detail that is original to the Local Government Code. As discussed
in Commission on Audit v. Province of Cebu:46

The Special Education Fund was created by virtue of R. A. No. 5447, which is [a]n act creating a special education fund to
be constituted from the proceeds of an additional real property tax and a certain portion of the taxes on Virginia-type
cigarettes and duties on imported leaf tobacco, defining the activities to be financed, creating school boards for the
purpose, and appropriating funds therefrom, which took effect on January 1, 1969. Pursuant thereto, P.D. No. 464, also
known as the Real Property Tax Code of the Philippines, imposed an annual tax of 1% on real property which shall accrue
to the SEF.47 (Citations omitted)

The operative phrase in Section 235s grant to municipalities in Metro Manila, cities, and provinces of the power to
impose an additional levy for the special education fund is prefixed with may, thus, may levy and collect an annual
tax of one percent (1%).

In Buklod nang Magbubukid sa Lupaing Ramos, Inc. v. E.M. Ramos and Sons, Inc.48 the meaning of may was discussed
as follows:

Where the provision reads may, this word shows that it is not mandatory but discretionary. It is an auxiliary verb
indicating liberty, opportunity, permission and possibility. The use of the word may in a statute denotes that it is
directory in nature and generally permissive only.49

Respondent concedes that Section 235s grant to municipalities in Metro Manila, to cities, and to provinces of the power
to impose an additional levy for the special education fund makes its collection optional. It is not mandatory that the
levy be imposed and collected. The controversy which the Commission on Audit created is not whether these local
government units have discretion to collect but whether they have discretion on the rate at which they are to collect.

It is respondents position that the option granted to a local government unit is limited to the matter of whether it shall
actually collect, and that the rate at which it shall collect (should it choose to do so) is fixed by Section 235. In contrast,
it is petitioners contention that the option given to a local government unit extends not only to the matter of whether
to collect but also to the rate at which collection is to be made.

We sustain the position of petitioner.

Section 235s permissive language is unqualified. Moreover, there is no limiting qualifier to the articulated rate of 1%
which unequivocally indicates that any and all special education fund collections must be at such rate.

At most, there is a seeming ambiguity in Section 235. Consistent with what has earlier been discussed however, any
such ambiguity must be read in favor of local fiscal autonomy. As in San Juan v. Civil Service Commission,50 the scales
must weigh in favor of the local government unit.

Fiscal autonomy entails the power to create . . . own sources of revenue.51 In turn, this power necessarily entails
enabling local government units with the capacity to create revenue sources in accordance with the realities and
contingencies present in their specific contexts. The power to create must mean the local government units power to
create what is most appropriate and optimal for them; otherwise, they would be mere automatons that are turned on
and off to perform prearranged operations.

Devolving power but denying its necessary incidents and accessories is tantamount to not devolving power at all. A local
government unit with a more affluent constituency may thus realize that it can levy taxes at rates greater than those
which local government units with more austere constituencies can collect. For the latter, collecting taxes at prohibitive
rates may be counterproductive. High tax rates can be a disincentive for doing business, rendering it unattractive to
commerce and thereby stunting, rather than facilitating, their development. In this sense, insisting on uniformity would
be a disservice to certain local government units and would ultimately undermine the aims of local autonomy and
decentralization.

VI
Of course, fiscal autonomy entails working within the constraints.52 To echo the language of Article X, Section 5 of the
1987 Constitution, this is to say that the taxing power of local government units is subject to such guidelines and
limitations as the Congress may provide.53 It is the 1% as a constraint on which the respondent Commission on Audit is
insisting.

There are, in this case, three (3) considerations that illumine our task of interpretation: (1) the text of Section 235,
which, to reiterate, is cast in permissive language; (2) the seminal purpose of fiscal autonomy; and (3) the
jurisprudentially established preference for weighing the scales in favor of autonomy of local government units. We find
it to be in keeping with harmonizing these considerations to conclude that Section 235s specified rate of 1% is a
maximum rate rather than an immutable edict. Accordingly, it was well within the power of the Sangguniang
Panlalawigan of Palawan to enact an ordinance providing for additional levy on real property tax for the special
education fund at the rate of 0.5% rather than at 1%.

VII

It was an error amounting to grave abuse of discretion for respondent to hold petitioner personally liable for the
supposed deficiency.

Having established the propriety of imposing an additional levy for the special education fund at the rate of 0.5%, it
follows that there was nothing erroneous in the Municipality of Narras having acted pursuant to Section 48 of the
Ordinance. It could thus not be faulted for collecting from owners of real properties located within its territory an
annual tax as special education fund at the rate of 0.5% of the assessed value subject to tax of the property. Likewise, it
follows that it was an error for respondent to hold petitioner personally liable for the supposed deficiency in collections.

Even if a contrary ruling were to be had on the propriety of collecting at a rate less than 1%, it would still not follow that
petitioner is personally liable for deficiencies.

In its Memorandum, respondent cited the 1996 case of Salalima v. Guingona54 as a precedent for finding local officials
liable for violations that have to do with the special education fund.

Moreover, in Decision No. 2008-087, respondent asserted that there was no cogent reason to exclude [petitioner] from
liability since her participation as one of the local officials who implemented the collection of the reduced levy rate. . .
led to the loss on reduction [sic] of government income. 55 It added that, [c]orollary thereto, the government can also
go against the officials who are responsible for the passage of [the Ordinance],56 i.e., the members of the Sangguniang
Panlalawigan of the Province of Palawan.

Respondents reliance on Salalima and on petitioners having been incidentally the mayor of Narra, Palawan when
supposedly deficient collections were undertaken is misguided.

Per respondents own summation of Salalima, in that case, this court:

held that the governor, vice-governor and members of the Sangguniang Panlalawigan are collectively responsible with
other provincial officials in the administration of fiscal and financial transactions of the province pursuant to Sections
304 and 305 of RA 7160 for denying the other beneficiaries of their share of the SEF. These local officials cannot claim
ignorance of the law as to the sharing scheme of the real property tax and the SEF as the same is clearly provided in RA
7160.57 (Emphasis supplied)

Salalima involved several administrative Complaints filed before the Office of the President against the elective officials
of the Province of Albay. One of these OP Case No. 5470 was a Complaint for malversation, and consistent [and]
habitual violation of pars. (c) and (d) of Section 60 of [the Local Government Code] 58 which was filed by Tiwi, Albay
Mayor Naomi Corral against Albay Governor Romeo Salalima, Vice-Governor Danilo Azaa, and other Sangguniang
Panlalawigan members.

This Complaint was precipitated by the refusal of the provincial officials of Albay to make available to the Municipality of
Tiwi, Albay its share in the collections of the special education fund. This was contrary to Section 272 of the Local
Government Code59 which requires equal sharing between provincial and municipal school boards. Specifically, it was
found that the Sangguniang Panlalawigan passed Ordinance No. 09-92, which declared as forfeited in favor of the
Province of Albay (and to the exclusion of the municipalities in Albay) all payments made by the National Power
Corporation to the former pursuant to a memorandum of agreement through which the National Power Corporation
settled its real property tax obligations.

As regards the personal liability of the respondents in that case, the Office of the President was quoted to have
anchored on the following disquisition its imposition of the penalty of suspension on the respondent provincial officials:

It cannot be denied that the Sangguniang Panlalawigan has control over the Provinces purse as it may approve or not
resolutions or ordinances generating revenue or imposing taxes as well as appropriating and authorizing the
disbursement of funds to meet operational requirements or for the prosecution of projects.

Being entrusted with such responsibility, the provincial governor, vice-governor and the members of the Sangguniang
Panlalawigan, must always be guided by the so-called fundamental principles enunciated under the Local Government
Code[.] . . .

All the respondents could not claim ignorance of the law especially with respect to the provisions of P.D. No. 464 that lay
down the sharing scheme among local government units concerned and the national government, for both the basic real
property tax and additional tax pertaining to the Special Education Fund. Nor can they claim that the Province could
validly forfeit the P40,724,471.74 paid by NPC considering that the Province is only entitled to a portion thereof and that
the balance was merely being held in trust for the other beneficiaries.

As a public officer, respondent Azaa (and the other respondents as well) has a duty to protect the interests not only of
the Province but also of the municipalities of Tiwi and Daraga and even the national government. When the passage of
an illegal or unlawful ordinance by the Sangguniang Panlalawigan is imminent, the presiding officer has a duty to act
accordingly, but actively opposing the same by temporarily relinquishing his chair and participating in the
deliberations. If his colleagues insist on its passage, he should make known his opposition thereto by placing the same
on record. No evidence of any sort was shown in this regard by respondent Azaa.

Clearly, all the respondents have, whether by act or omission, denied the other beneficiaries of their rightful shares in
the tax delinquency payments made by the NPC and caused the illegal forfeiture, appropriation and disbursement of
funds not belonging to the Province, through the passage and approval of Ordinance No. 09-92 and Resolution Nos. 178-
92 and 204-92.

The foregoing factual setting shows a wanton disregard of law on the part of the respondents tantamount to abuse of
authority. Moreover, the illegal disbursements made can qualify as technical malversation. 60

It is evident that the circumstances in Salalima are not analogous to the circumstances pertinent to petitioner.

While Salalima involved the mishandling of proceeds which was tantamount to abuse of authority and which can
qualify as technical malversation, this case involves the collection of the additional levy for the special education fund
at a rate which, at the time of the collection, was pursuant to an ordinance that was yet to be invalidated.

Likewise, Salalima involved the liability of the provincial officials who were themselves the authors of an invalid
ordinance. In this case, the Municipality of Narra as subordinate to the Province of Palawan merely enforced a
provincial ordinance. Respondent, in its own Memorandum, acknowledged that it was not even petitioner but the
municipal treasurer who actually effected the collection at a supposedly erroneous rate.61

Also, Salalima entailed the imposition of the administrative penalty of suspension. In this case, respondent is not
concerned with the imposition of administrative penalties but insists that petitioner must herself (jointly and severally
with the other persons named) pay for the deficiency in collections.

We find it improper to hold petitioner personally liable for the uncollected amount on account of the
sheer happenstance that she was the mayor of Narra, Palawan, when the Ordinance was enforced.

VIII

The actions of the officials of the Municipality of Narra are consistent with the rule that ordinances are presumed
valid. In finding liability, respondent suggests that officers of the Municipality should not comply with an ordinance duly
passed by the Sangguniang Panlalawigan.

It is true that petitioner, as the local chief executive, was charged with fidelity to our laws. However, it would be grossly
unfair to sustain respondents position. It implacably dwells on supposed non-compliance with Section 235 but turns a
blind eye on the context which precipitated the collection made by the Municipality of Narra at the reduced rate of
0.5%.

The mayors actions were done pursuant to an ordinance which, at the time of the collection, was yet to be invalidated.

It is basic that laws and local ordinances are presumed to be valid unless and until the courts declare the contrary in
clear and unequivocal terms.62 Thus, the concerned officials of the Municipality of Narra, Palawan must be deemed to
have conducted themselves in good faith and with regularity when they acted pursuant to Chapter 5, Section 48 of
Provincial Ordinance No. 332-A, Series of 1995, and collected the additional levy for the special education fund at the
rate of 0.5%. Accordingly, it was improper for respondent to attribute personal liability to petitioner and to require her
to personally answer to the deficiency in special education fund collections.

WHEREFORE, the Petition is GRANTED. Decision No. 2008-087 dated September 22, 2008 and Decision No. 2011-083
dated November 16, 2011 of respondent Commission on Audit are ANNULLED and SET ASIDE.

SO ORDERED.