DANTE V. LIBAN, REYNALDO G. R. No.

175352
M. BERNARDO and SALVADOR
M. VIARI, Present:
Petitioners,
CORONA, C.J.,
CARPIO,
CARPIO MORALES,
VELASCO, JR.,
NACHURA,
LEONARDO-DE CASTRO,
- versus - BRION,
PERALTA,
BERSAMIN,
DEL CASTILLO,
ABAD,
VILLARAMA, JR.,
PEREZ,
RICHARD J. GORDON, MENDOZA, and
Respondent. SERENO, JJ.

PHILIPPINE NATIONAL RED Promulgated:

CROSS,
Intervenor. January 18, 2011
x--------------------------------------------------x

RESOLUTION

LEONARDO-DE CASTRO, J.:

This resolves the Motion for Clarification and/or for Reconsideration[1] filed on
August 10, 2009 by respondent Richard J. Gordon(respondent) of
the Decision promulgated by this Court on July 15, 2009 (the Decision),
the Motion for Partial Reconsideration[2] filed onAugust 27, 2009 by movant-
intervenor Philippine National Red Cross (PNRC), and the latters Manifestation
and Motion to Admit Attached Position Paper[3] filed on December 23, 2009.
 In the Decision,[4] the Court held that respondent did not forfeit his seat in
the Senate when he accepted the chairmanship of the PNRC Board of Governors,
as the office of the PNRC Chairman is not a government office or an office in a
government-owned or controlled corporation for purposes of the prohibition in
Section 13, Article VI of the 1987 Constitution.[5] The Decision, however, further
declared void the PNRC Charter insofar as it creates the PNRC as a private
corporation and consequently ruled that the PNRC should incorporate under the
Corporation Code and register with the Securities and Exchange Commission if it
wants to be a private corporation.[6] The dispositive portion of the Decision reads
as follows:

WHEREFORE, we declare that the office of the Chairman of the

Philippine National Red Cross is not a government office or an office in
a government-owned or controlled corporation for purposes of the
prohibition in Section 13, Article VI of the 1987 Constitution. We also
declare that Sections 1, 2, 3, 4(a), 5, 6, 7, 8, 9, 10, 11, 12, and 13 of the
Charter of the Philippine National Red Cross, or Republic Act No. 95, as
amended by Presidential Decree Nos. 1264 and 1643, are VOID because
they create the PNRC as a private corporation or grant it corporate
powers.[7]
In his Motion for Clarification and/or for Reconsideration, respondent raises
the following grounds: (1) as the issue of constitutionality of Republic Act (R.A.)
No. 95 was not raised by the parties, the Court went beyond the case in deciding
such issue; and (2) as the Court decided that Petitioners did not have standing to
file the instant Petition, the pronouncement of the Court on the validity of R.A. No.
95 should be considered obiter.[8]

Respondent argues that the validity of R.A. No. 95 was a non-issue;

therefore, it was unnecessary for the Court to decide on that question. Respondent
cites Laurel v. Garcia,[9] wherein the Court said that it will not pass upon a
constitutional question although properly presented by the record if the case can be
disposed of on some other ground and goes on to claim that since this Court, in the
Decision, disposed of the petition on some other ground, i.e., lack of standing of
petitioners, there was no need for it to delve into the validity of R.A. No. 95, and
the rest of the judgment should be deemed obiter.
 In its Motion for Partial Reconsideration, PNRC prays that the Court
sustain the constitutionality of its Charter on the following grounds:

A. THE ASSAILED DECISION DECLARING

UNCONSTITUTIONAL REPUBLIC ACT NO. 95 AS
AMENDED DEPRIVED INTERVENOR PNRC OF ITS
CONSTITUTIONAL RIGHT TO DUE PROCESS.

1. INTERVENOR PNRC WAS NEVER A PARTY TO THE

INSTANT CONTROVERSY.

2. THE CONSTITUTIONALITY OF REPUBLIC ACT NO. 95, AS

AMENDED WAS NEVER AN ISSUE IN THIS CASE.

B. THE CURRENT CHARTER OF PNRC IS PRESIDENTIAL

DECREE NO. 1264 AND NOT REPUBLIC ACT NO. 95.
PRESIDENTIAL DECREE NO. 1264 WAS NOT A CREATION OF
CONGRESS.

C. PNRCS STRUCTURE IS SUI GENERIS; IT IS A CLASS OF ITS

OWN. WHILE IT IS PERFORMING HUMANITARIAN
FUNCTIONS AS AN AUXILIARY TO GOVERNMENT, IT IS A
NEUTRAL ENTITY SEPARATE AND INDEPENDENT OF
GOVERNMENT CONTROL, YET IT DOES NOT QUALIFY AS
STRICTLY PRIVATE IN CHARACTER.

In his Comment and Manifestation[10] filed on November 9, 2009,

respondent manifests: (1) that he agrees with the position taken by the PNRC in its
Motion for Partial Reconsideration dated August 27, 2009; and (2) as of the
writing of said Comment and Manifestation, there was pending before the
Congress of the Philippines a proposed bill entitled An Act Recognizing the PNRC
as an Independent, Autonomous, Non-Governmental Organization Auxiliary to the
Authorities of the Republic of the Philippines in the Humanitarian Field, to be
Known as The Philippine Red Cross.[11]

After a thorough study of the arguments and points raised by the respondent as
well as those of movant-intervenor in their respective motions, we have
reconsidered our pronouncements in our Decision dated July 15, 2009 with regard
to the nature of the PNRC and the constitutionality of some provisions of the
PNRC Charter, R.A. No. 95, as amended.

As correctly pointed out in respondents Motion, the issue of constitutionality

of R.A. No. 95 was not raised by the parties, and was not among the issues defined
in the body of the Decision; thus, it was not the very lis mota of the case. We have
reiterated the rule as to when the Court will consider the issue of constitutionality
in Alvarez v. PICOP Resources, Inc.,[12] thus:

This Court will not touch the issue of unconstitutionality unless it is

the very lis mota. It is a well-established rule that a court should not
pass upon a constitutional question and decide a law to be
unconstitutional or invalid, unless such question is raised by the
parties and that when it is raised, if the record also presents some other
ground upon which the court may [rest] its judgment, that course will be
adopted and the constitutional question will be left for consideration
until such question will be unavoidable.[13]

Under the rule quoted above, therefore, this Court should not have declared void
certain sections of R.A. No. 95, as amended by Presidential Decree (P.D.) Nos.
1264 and 1643, the PNRC Charter. Instead, the Court should have exercised
judicial restraint on this matter, especially since there was some other ground upon
which the Court could have based its judgment. Furthermore, the PNRC, the entity
most adversely affected by this declaration of unconstitutionality, which was not
even originally a party to this case, was being compelled, as a consequence of the
Decision, to suddenly reorganize and incorporate under the Corporation
Code, after more than sixty (60) years of existence in this country.

Its existence as a chartered corporation remained unchallenged on ground of

unconstitutionality notwithstanding that R.A. No. 95 was enacted on March 22,
1947 during the effectivity of the 1935 Constitution, which provided for a
proscription against the creation of private corporations by special law, to wit:

SEC. 7. The Congress shall not, except by general law, provide

for the formation, organization, or regulation of private corporations,
unless such corporations are owned and controlled by the Government or
 any subdivision or instrumentality thereof. (Art. XIV, 1935
Constitution.)

Similar provisions are found in Article XIV, Section 4 of the 1973 Constitution
and Article XII, Section 16 of the 1987 Constitution. The latter reads:

SECTION 16. The Congress shall not, except by general law,

provide for the formation, organization, or regulation of private
corporations. Government-owned or controlled corporations may be
created or established by special charters in the interest of the common
good and subject to the test of economic viability.

Since its enactment, the PNRC Charter was amended several times, particularly on
June 11, 1953, August 16, 1971, December 15, 1977, and October 1, 1979, by
virtue of R.A. No. 855, R.A. No. 6373, P.D. No. 1264, and P.D. No. 1643,
respectively. The passage of several laws relating to the PNRCs corporate
existence notwithstanding the effectivity of the constitutional proscription on the
creation of private corporations by law, is a recognition that the PNRC is not
strictly in the nature of a private corporation contemplated by the aforesaid
constitutional ban.

A closer look at the nature of the PNRC would show that there is none like it
not just in terms of structure, but also in terms of history, public service and
official status accorded to it by the State and the international community. There is
merit in PNRCs contention that its structure is sui generis.

The PNRC succeeded the chapter of the American Red Cross which was in
existence in the Philippines since 1917. It was created by an Act of Congress after
the Republic of the Philippines became an independent nation on July 6, 1946 and
proclaimed on February 14, 1947 its adherence to the Convention of Geneva of
July 29, 1929 for the Amelioration of the Condition of the Wounded and Sick of
Armies in the Field (the Geneva Red Cross Convention). By that action the
Philippines indicated its desire to participate with the nations of the world in
mitigating the suffering caused by war and to establish in the Philippines a
voluntary organization for that purpose and like other volunteer organizations
established in other countries which have ratified the Geneva Conventions, to
promote the health and welfare of the people in peace and in war.[14]

The provisions of R.A. No. 95, as amended by R.A. Nos. 855 and 6373, and
further amended by P.D. Nos. 1264 and 1643, show the historical background and
legal basis of the creation of the PNRC by legislative fiat, as a voluntary
organization impressed with public interest. Pertinently R.A. No. 95, as amended
by P.D. 1264, provides:

WHEREAS, during the meeting in Geneva, Switzerland, on 22

August 1894, the nations of the world unanimously agreed to diminish
within their power the evils inherent in war;

WHEREAS, more than one hundred forty nations of the world

have ratified or adhered to the Geneva Conventions of August 12, 1949
for the Amelioration of the Condition of the Wounded and Sick of
Armed Forces in the Field and at Sea, The Prisoners of War, and The
Civilian Population in Time of War referred to in this Charter as the
Geneva Conventions;

WHEREAS, the Republic of the Philippines became an

independent nation on July 4, 1946, and proclaimed on February 14,
1947 its adherence to the Geneva Conventions of 1929, and by the
action, indicated its desire to participate with the nations of the
world in mitigating the suffering caused by war and to establish in
the Philippines a voluntary organization for that purpose as
contemplated by the Geneva Conventions;

WHEREAS, there existed in the Philippines since 1917 a chapter

of the American National Red Cross which was terminated in view of
the independence of the Philippines; and

WHEREAS, the volunteer organizations established in other

countries which have ratified or adhered to the Geneva
Conventions assist in promoting the health and welfare of their
people in peace and in war, and through their mutual assistance and
cooperation directly and through their international organizations
promote better understanding and sympathy among the people of the
world;
 NOW, THEREFORE, I, FERDINAND E. MARCOS, President of
the Philippines, by virtue of the powers vested in me by the Constitution
as Commander-in-Chief of all the Armed Forces of the Philippines and
pursuant to Proclamation No. 1081 dated September 21, 1972, and
General Order No. 1 dated September 22, 1972, do hereby decree and
order that Republic Act No. 95, Charter of the Philippine National Red
Cross (PNRC) as amended by Republic Acts No. 855 and 6373, be
further amended as follows:

Section 1. There is hereby created in the Republic of the

Philippines a body corporate and politic to be the voluntary
organization officially designated to assist the Republic of the
Philippines in discharging the obligations set forth in the Geneva
Conventions and to perform such other duties as are inherent upon
a national Red Cross Society. The national headquarters of this
Corporation shall be located in Metropolitan Manila. (Emphasis
supplied.)

The significant public service rendered by the PNRC can be gleaned from
Section 3 of its Charter, which provides:

Section 3. That the purposes of this Corporation shall be as

follows:

(a) To provide volunteer aid to the sick and wounded of armed

forces in time of war, in accordance with the spirit of and under the
conditions prescribed by the Geneva Conventions to which the Republic
of the Philippines proclaimed its adherence;

(b) For the purposes mentioned in the preceding sub-section, to

perform all duties devolving upon the Corporation as a result of the
adherence of the Republic of the Philippines to the said Convention;

(c) To act in matters of voluntary relief and in accordance with the

authorities of the armed forces as a medium of communication between
people of the Republic of the Philippines and their Armed Forces, in
time of peace and in time of war, and to act in such matters between
similar national societies of other governments and the Governments and
people and the Armed Forces of the Republic of the Philippines;
 (d) To establish and maintain a system of national and
international relief in time of peace and in time of war and apply the
same in meeting and emergency needs caused by typhoons, flood, fires,
earthquakes, and other natural disasters and to devise and carry on
measures for minimizing the suffering caused by such disasters;

(e) To devise and promote such other services in time of peace

and in time of war as may be found desirable in improving the health,
safety and welfare of the Filipino people;

(f) To devise such means as to make every citizen and/or resident

of the Philippines a member of the Red Cross.

The PNRC is one of the National Red Cross and Red Crescent Societies,
which, together with the International Committee of the Red Cross (ICRC) and the
IFRC and RCS, make up the International Red Cross and Red Crescent Movement
(the Movement). They constitute a worldwide humanitarian movement, whose
mission is:

[T]o prevent and alleviate human suffering wherever it may be found, to

protect life and health and ensure respect for the human being, in
particular in times of armed conflict and other emergencies, to work for
the prevention of disease and for the promotion of health and social
welfare, to encourage voluntary service and a constant readiness to give
help by the members of the Movement, and a universal sense of
solidarity towards all those in need of its protection and assistance.[15]

The PNRC works closely with the ICRC and has been involved in
humanitarian activities in the Philippines since 1982. Among others, these
activities in the country include:

1. Giving protection and assistance to civilians displaced or otherwise

affected by armed clashes between the government and armed opposition
groups, primarily in Mindanao;
2. Working to minimize the effects of armed hostilities and violence on the
population;
3. Visiting detainees; and
 4. Promoting awareness of international humanitarian law in the public and
private sectors.[16]

National Societies such as the PNRC act as auxiliaries to the public

authorities of their own countries in the humanitarian field and provide a range of
services including disaster relief and health and social programmes.

The International Federation of Red Cross (IFRC) and Red Crescent

Societies (RCS) Position Paper,[17] submitted by the PNRC, is instructive with
regard to the elements of the specific nature of the National Societies such as the
PNRC, to wit:

National Societies, such as the Philippine National Red Cross and

its sister Red Cross and Red Crescent Societies, have certain specificities
deriving from the 1949 Geneva Convention and the Statutes of the
International Red Cross and Red Crescent Movement (the
Movement). They are also guided by the seven Fundamental Principles
of the Red Cross and Red Crescent Movement: Humanity,
Impartiality, Neutrality, Independence, Voluntary Service, Unity
and Universality.

A National Society partakes of a sui generis character. It is a

protected component of the Red Cross movement under Articles 24 and
26 of the First Geneva Convention, especially in times of armed
conflict. These provisions require that the staff of a National Society
shall be respected and protected in all circumstances. Such protection is
not ordinarily afforded by an international treaty to ordinary private
entities or even non-governmental organisations (NGOs). This sui
generis character is also emphasized by the Fourth Geneva Convention
which holds that an Occupying Power cannot require any change in the
personnel or structure of a National Society. National societies are
therefore organizations that are directly regulated by international
humanitarian law, in contrast to other ordinary private entities,
including NGOs.

xxxx

In addition, National Societies are not only officially recognized

by their public authorities as voluntary aid societies, auxiliary to the
 public authorities in the humanitarian field, but also benefit from
recognition at the International level. This is considered to be an element
distinguishing National Societies from other organisations (mainly
NGOs) and other forms of humanitarian response.

x x x. No other organisation belongs to a world-wide Movement

in which all Societies have equal status and share equal responsibilities
and duties in helping each other. This is considered to be the essence of
the Fundamental Principle of Universality.

Furthermore, the National Societies are considered to

be auxiliaries to the public authorities in the humanitarian field. x x x.

The auxiliary status of [a] Red Cross Society means that it is at

one and the same time a private institution and a public service
organization because the very nature of its work implies cooperation
with the authorities, a link with the State. In carrying out their major
functions, Red Cross Societies give their humanitarian support to official
bodies, in general having larger resources than the Societies, working
towards comparable ends in a given sector.

x x x No other organization has a duty to be its governments

humanitarian partner while remaining independent.[18] (Emphases
ours.)

It is in recognition of this sui generis character of the PNRC that R.A. No. 95 has
remained valid and effective from the time of its enactment in March 22, 1947
under the 1935 Constitution and during the effectivity of the 1973 Constitution and
the 1987 Constitution.

The PNRC Charter and its amendatory laws have not been questioned or
challenged on constitutional grounds, not even in this case before the Court now.

In the Decision, the Court, citing Feliciano v. Commission on Audit,[19] explained

that the purpose of the constitutional provision prohibiting Congress from creating
private corporations was to prevent the granting of special privileges to certain
individuals, families, or groups, which were denied to other groups. Based on the
above discussion, it can be seen that the PNRC Charter does not come within the
spirit of this constitutional provision, as it does not grant special privileges to a
particular individual, family, or group, but creates an entity that strives to serve the
common good.

Furthermore, a strict and mechanical interpretation of Article XII, Section 16 of the

1987 Constitution will hinder the State in adopting measures that will serve the
public good or national interest. It should be noted that a special law, R.A. No.
9520, the Philippine Cooperative Code of 2008, and not the general corporation
code, vests corporate power and capacities upon cooperatives which are private
corporations, in order to implement the States avowed policy.

In the Decision of July 15, 2009, the Court recognized the public service
rendered by the PNRC as the governments partner in the observance of its
international commitments, to wit:

The PNRC is a non-profit, donor-funded, voluntary, humanitarian

organization, whose mission is to bring timely, effective, and
compassionate humanitarian assistance for the most vulnerable without
consideration of nationality, race, religion, gender, social status, or
political affiliation. The PNRC provides six major services: Blood
Services, Disaster Management, Safety Services, Community Health and
Nursing, Social Services and Voluntary Service.

The Republic of the Philippines, adhering to the Geneva

Conventions, established the PNRC as a voluntary organization for the
purpose contemplated in the Geneva Convention of 27 July 1929. x x
x.[20] (Citations omitted.)

So must this Court recognize too the countrys adherence to the Geneva
Convention and respect the unique status of the PNRC in consonance with its
treaty obligations. The Geneva Convention has the force and effect of
law.[21] Under the Constitution, the Philippines adopts the generally accepted
principles of international law as part of the law of the land.[22] This constitutional
provision must be reconciled and harmonized with Article XII, Section 16 of the
Constitution, instead of using the latter to negate the former.
 By requiring the PNRC to organize under the Corporation Code just like any
other private corporation, the Decision of July 15, 2009 lost sight of the PNRCs
special status under international humanitarian law and as an auxiliary of the State,
designated to assist it in discharging its obligations under the Geneva
Conventions. Although the PNRC is called to be independent under its
Fundamental Principles, it interprets such independence as inclusive of its duty to
be the governments humanitarian partner. To be recognized in the International
Committee, the PNRC must have an autonomous status, and carry out its
humanitarian mission in a neutral and impartial manner.

However, in accordance with the Fundamental Principle of Voluntary

Service of National Societies of the Movement, the PNRC must be distinguished
from private and profit-making entities. It is the main characteristic of National
Societies that they are not inspired by the desire for financial gain but by individual
commitment and devotion to a humanitarian purpose freely chosen or accepted as
part of the service that National Societies through its volunteers and/or members
render to the Community.[23]

The PNRC, as a National Society of the International Red Cross and Red
Crescent Movement, can neither be classified as an instrumentality of the State, so
as not to lose its character of neutrality as well as its independence, nor strictly as a
private corporation since it is regulated by international humanitarian law and is
treated as an auxiliary of the State.[24]

Based on the above, the sui generis status of the PNRC is now sufficiently
established. Although it is neither a subdivision, agency, or instrumentality of the
government, nor a government-owned or -controlled corporation or a subsidiary
thereof, as succinctly explained in the Decision of July 15, 2009, so much so that
respondent, under the Decision, was correctly allowed to hold his position as
Chairman thereof concurrently while he served as a Senator, such a conclusion
does not ipso facto imply that the PNRC is a private corporation within the
contemplation of the provision of the Constitution, that must be organized under
the Corporation Code. As correctly mentioned by Justice Roberto A. Abad, the sui
generis character of PNRC requires us to approach controversies involving the
PNRC on a case-to-case basis.
 In sum, the PNRC enjoys a special status as an important ally and auxiliary
of the government in the humanitarian field in accordance with its commitments
under international law. This Court cannot all of a sudden refuse to recognize its
existence, especially since the issue of the constitutionality of the PNRC Charter
was never raised by the parties. It bears emphasizing that the PNRC has responded
to almost all national disasters since 1947, and is widely known to provide a
substantial portion of the countrys blood requirements. Its humanitarian work is
unparalleled. The Court should not shake its existence to the core in an untimely
and drastic manner that would not only have negative consequences to those who
depend on it in times of disaster and armed hostilities but also have adverse effects
on the image of the Philippines in the international community. The sections of
the PNRC Charter that were declared void must therefore stay.

WHEREFORE, premises considered, respondent Richard J.

Gordons Motion for Clarification and/or for Reconsideration and movant-
intervenor PNRCs Motion for Partial Reconsideration of the Decision in G.R.
No. 175352 dated July 15, 2009 are GRANTED.The constitutionality of R.A. No.
95, as amended, the charter of the Philippine National Red Cross, was not raised by
the parties as an issue and should not have been passed upon by this Court. The
structure of the PNRC is sui generis being neither strictly private nor public in
nature. R.A. No. 95 remains valid and constitutional in its entirety. The dispositive
portion of the Decision should therefore be MODIFIED by deleting the second
sentence, to now read as follows:

WHEREFORE, we declare that the office of the Chairman of the

Philippine National Red Cross is not a government office or an office in
a government-owned or controlled corporation for purposes of the
prohibition in Section 13, Article VI of the 1987 Constitution.

SO ORDERED.
BOY SCOUTS OF THE G.R. No. 177131
PHILIPPINES,
Petitioner, Present:

CORONA, C.J.,
CARPIO,
CARPIO MORALES,
VELASCO, JR.,
NACHURA,
LEONARDO-DE CASTRO,
- versus - BRION,
PERALTA,
BERSAMIN,
DEL CASTILLO,
ABAD,
VILLARAMA, JR.,
PEREZ,
MENDOZA, and
SERENO, JJ.

COMMISSION ON AUDIT,
Respondent.
Promulgated:

June 7, 2011

x--------------------------------------------------x

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.

xxxx

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

The fact that no budgetary appropriations have been released to the

VFP does not prove that it is a private corporation. The DBM indeed did
not see it fit to propose budgetary appropriations to the VFP, having itself
believed that the VFP is a private corporation. If the DBM, however, is
mistaken as to its conclusion regarding the nature of VFP's incorporation,
its previous assertions will not prevent future budgetary appropriations to
the VFP. The erroneous application of the law by public officers does not
bar a subsequent correct application of the law.[31] (Citations omitted.)

The COA points out that the government is not precluded by law from
extending financial support to the BSP and adding to its funds, and that as a
government instrumentality which continues to perform a vital function imbued
with public interest and reflective of the 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 notgovernment 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.
PHILIPPINE SOCIETY FOR G.R. No. 169752

THE PREVENTION OF

CRUELTY TO ANIMALS,

Petitioners, Members:

PUNO, C.J.

QUISUMBING,

YNARES-SANTIAGO,

SANDOVAL-GUTIERREZ,

CARPIO,

AUSTRIA-MARTINEZ,

CORONA,

- versus - CARPIO-MORALES,

AZCUNA,

TINGA,

CHICO-NAZARIO,

GARCIA,

VELASCO, JR.,

NACHURA, and

REYES, JJ.

COMMISSION ON AUDIT,
DIR. RODULFO J. ARIESGA

(in his official capacity as Director

of the Commission on Audit), MS.

MERLE M. VALENTIN and MS.

SUSAN GUARDIAN (in their official

capacities as Team Leader and Team

Member, respectively, of the audit

Team of the Commission on Audit), Promulgated:

Respondents. September 25, 2007

x-----------------------------------------------------------x

DECISION

AUSTRIA-MARTINEZ, J.:

Before the Court is a special civil action for Certiorari and Prohibition under Rule
65 of the Rules of Court, in relation to Section 2 of Rule 64, filed by the petitioner
assailing Office Order No. 2005-021[1] dated September 14, 2005 issued by the
respondents which constituted the audit team, as well as its September 23, 2005
Letter[2] informing the petitioner that respondents audit team shall conduct an
audit survey on the petitioner for a detailed audit of its accounts, operations, and
financial transactions. No temporary restraining order was issued.

The petitioner was incorporated as a juridical entity over one hundred years ago
by virtue of Act No. 1285, enacted on January 19, 1905, by the Philippine
Commission. The petitioner, at the time it was created, was composed of animal
aficionados and animal propagandists. The objects of the petitioner, as stated in
Section 2 of its charter, shall be to enforce laws relating to cruelty inflicted upon
animals or the protection of animals in the Philippine Islands, and generally, to do
and perform all things which may tend in any way to alleviate the suffering of
animals and promote their welfare.[3]

At the time of the enactment of Act No. 1285, the original Corporation Law, Act
No. 1459, was not yet in existence. Act No. 1285 antedated both the Corporation
Law and the constitution of the Securities and Exchange Commission. Important
to note is that the nature of the petitioner as a corporate entity is distinguished
from the sociedad anonimas under the Spanish Code of Commerce.

For the purpose of enhancing its powers in promoting animal welfare and
enforcing laws for the protection of animals, the petitioner was initially imbued
under its charter with the power to apprehend violators of animal welfare laws. In
addition, the petitioner was to share one-half (1/2) of the fines imposed and
collected through its efforts for violations of the laws related thereto. As originally
worded, Sections 4 and 5 of Act No. 1285 provide:

SEC. 4. The said society is authorized to appoint not to exceed

five agents in the City of Manila, and not to exceed two in each of the
provinces of the Philippine Islands who shall have all the power and
authority of a police officer to make arrests for violation of the
laws enacted for the prevention of cruelty to animals and the
protection of animals, and to serve any process in connection with the
execution of such laws; and in addition thereto, all the police force of
the Philippine Islands, wherever organized, shall, as occasion requires,
assist said society, its members or agents, in the enforcement of all such
laws.
 SEC. 5. One-half of all the fines imposed and collected through
the efforts of said society, its members or its agents, for violations of
the laws enacted for the prevention of cruelty to animals and for their
protection, shall belong to said society and shall be used to promote its
objects.

(emphasis supplied)

Subsequently, however, the power to make arrests as well as the privilege to

retain a portion of the fines collected for violation of animal-related laws were
recalled by virtue of Commonwealth Act (C.A.) No. 148,[4] which reads, in its
entirety, thus:

Be it enacted by the National Assembly of the Philippines:

Section 1. Section four of Act Numbered Twelve hundred and eighty-

five as amended by Act Numbered Thirty five hundred and forty-eight,
is hereby further amended so as to read as follows:

Sec. 4. The said society is authorized to appoint not to

exceed ten agents in the City of Manila, and not to exceed
one in each municipality of the Philippines who shall have
the authority to denounce to regular peace officers any
violation of the laws enacted for the prevention of cruelty
to animals and the protection of animals and to cooperate
with said peace officers in the prosecution of transgressors
of such laws.
 Sec. 2. The full amount of the fines collected for violation of the laws
against cruelty to animals and for the protection of animals, shall accrue
to the general fund of the Municipality where the offense was
committed.

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

Approved, November 8, 1936. (Emphasis supplied)

Immediately thereafter, then President Manuel L. Quezon issued Executive Order

(E.O.) No. 63 dated November 12, 1936, portions of which provide:

Whereas, during the first regular session of the National Assembly,

Commonwealth Act Numbered One Hundred Forty Eight was enacted
depriving the agents of the Society for the Prevention of Cruelty to
Animals of their power to arrest persons who have violated the laws
prohibiting cruelty to animals thereby correcting a serious defect in one
of the laws existing in our statute books.

xxxx

Whereas, the cruel treatment of animals is an offense against the State,

penalized under our statutes, which the Government is duty bound to
enforce;
 Now, therefore, I, Manuel L. Quezon, President of the Philippines,
pursuant to the authority conferred upon me by the Constitution,
hereby decree, order, and direct the Commissioner of Public Safety, the
Provost Marshal General as head of the Constabulary Division of the
Philippine Army, every Mayor of a chartered city, and every municipal
president to detail and organize special members of the police force,
local, national, and the Constabulary to watch, capture, and prosecute
offenders against the laws enacted to prevent cruelty to
animals. (Emphasis supplied)

On December 1, 2003, an audit team from respondent Commission on Audit

(COA) visited the office of the petitioner to conduct an audit survey pursuant to
COA Office Order No. 2003-051 dated November 18, 2003[5] addressed to the
petitioner. The petitioner demurred on the ground that it was a private entity not
under the jurisdiction of COA, citing Section 2(1) of Article IX of the Constitution
which specifies the general jurisdiction of the COA, viz:

Section 1. General Jurisdiction. 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 officers that have been granted fiscal autonomy under
the Constitution; (b) autonomous state colleges and universities; (c)
other government-owned or controlled corporations 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 or the granting institution to submit to such audit as a
condition of subsidy or equity. However, where the internal control
system of the audited agencies is inadequate, the Commission may
 adopt such measures, including temporary or special pre-audit, as are
necessary and appropriate to correct the deficiencies. It shall keep the
general accounts of the Government, and for such period as may be
provided by law, preserve the vouchers and other supporting papers
pertaining thereto.(Emphasis supplied)

Petitioner explained thus:

a. Although the petitioner was created by special legislation, this

necessarily came about because in January 1905 there was as yet
neither a Corporation Law or any other general law under which it may
be organized and incorporated, nor a Securities and Exchange
Commission which would have passed upon its organization and
incorporation.

b. That Executive Order No. 63, issued during the Commonwealth period,
effectively deprived the petitioner of its power to make arrests, and that
the petitioner lost its operational funding, underscore the fact that it
exercises no governmental function. In fine, the government itself, by its
overt acts, confirmed petitioners status as a private juridical entity.

The COA General Counsel issued a Memorandum[6] dated May 6, 2004, asserting
that the petitioner was subject to its audit authority. In a letter dated May 17,
2004,[7] respondent COA informed the petitioner of the result of the evaluation,
furnishing it with a copy of said Memorandum dated May 6, 2004 of the General
Counsel.

Petitioner thereafter filed with the respondent COA a Request for Re-evaluation
dated May 19, 2004,[8] insisting that it was a private domestic corporation.
Acting on the said request, the General Counsel of respondent COA, in a
Memorandum dated July 13, 2004,[9] affirmed her earlier opinion that the
petitioner was a government entity that was subject to the audit jurisdiction of
respondent COA. In a letter dated September 14, 2004, the respondent COA
informed the petitioner of the result of the re-evaluation, maintaining its position
that the petitioner was subject to its audit jurisdiction, and requested an initial
conference with the respondents.

In a Memorandum dated September 16, 2004, Director Delfin Aguilar reported to

COA Assistant Commissioner Juanito Espino, Corporate Government Sector, that
the audit survey was not conducted due to the refusal of the petitioner because
the latter maintained that it was a private corporation.

Petitioner received on September 27, 2005 the subject COA Office Order 2005-
021 dated September 14, 2005 and the COA Letter dated September 23, 2005.

Hence, herein Petition on the following grounds:

A.

RESPONDENT COMMISSION ON AUDIT COMMITTED GRAVE ABUSE

OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION
WHEN IT RULED THAT PETITIONER IS SUBJECT TO ITS AUDIT
AUTHORITY.

B.
 PETITIONER IS ENTITLED TO THE RELIEF SOUGHT, THERE BEING NO
APPEAL, NOR ANY PLAIN, SPEEDY AND ADEQUATE REMEDY IN THE
ORDINARY COURSE OF LAW AVAILABLE TO IT.[10]

The essential question before this Court is whether the petitioner qualifies as a
government agency that may be subject to audit by respondent COA.

Petitioner argues: first, even though it was created by special legislation in 1905
as there was no general law then existing under which it may be organized or
incorporated, it exercises no governmental functions because these have been
revoked by C.A. No. 148 and E.O. No. 63; second, nowhere in its charter is it
indicated that it is a public corporation, unlike, for instance, C.A. No. 111 which
created the Boy Scouts of the Philippines, defined its powers and purposes, and
specifically stated that it was An Act to Create a Public Corporation in which, even
as amended by Presidential Decree No. 460, the law still adverted to the Boy
Scouts of the Philippines as a public corporation, all of which are not obtaining in
the charter of the petitioner; third, if it were a government body, there would
have been no need for the State to grant it tax exemptions under Republic Act No.
1178, and the fact that it was so exempted strengthens its position that it is a
private institution; fourth, the employees of the petitioner are registered and
covered by the Social Security System at the latters initiative and not through the
Government Service Insurance System, which should have been the case had the
employees been considered government employees; fifth, the petitioner does not
receive any form of financial assistance from the government, since C.A. No. 148,
amending Section 5 of Act No. 1285, states that the full amount of the fines,
collected for violation of the laws against cruelty to animals and for the protection
of animals, shall accrue to the general fund of the Municipality where the offense
was committed; sixth, C.A. No. 148 effectively deprived the petitioner of its
powers to make arrests and serve processes as these functions were placed in the
hands of the police force; seventh, no government appointee or representative
sits on the board of trustees of the petitioner; eighth, a reading of the provisions
of its charter (Act No. 1285) fails to show that any act or decision of the petitioner
is subject to the approval of or control by any government agency, except to the
extent that it is governed by the law on private corporations in general; and
finally, ninth, the Committee on Animal Welfare, under the Animal Welfare Act of
1998, includes members from both the private and the public sectors.

The respondents contend that since the petitioner is a body politic created by
virtue of a special legislation and endowed with a governmental purpose, then,
indubitably, the COA may audit the financial activities of the latter. Respondents
in effect divide their contentions into six strains: first, the test to determine
whether an entity is a government corporation lies in the manner of its creation,
and, since the petitioner was created by virtue of a special charter, it is thus a
government corporation subject to respondents auditing power; second, the
petitioner exercises sovereign powers, that is, it is tasked to enforce the laws for
the protection and welfare of animals which ultimately redound to the public
good and welfare, and, therefore, it is deemed to be a government
instrumentality as defined under the Administrative Code of 1987, the purpose of
which is connected with the administration of government, as purportedly
affirmed by American jurisprudence; third, by virtue of Section 23,[11] Title II, Book
III of the same Code, the Office of the President exercises supervision or control
over the petitioner; fourth, under the same Code, the requirement under its
special charter for the petitioner to render a report to the Civil Governor, whose
functions have been inherited by the Office of the President, clearly reflects the
nature of the petitioner as a government instrumentality; fifth, despite the
passage of the Corporation Code, the law creating the petitioner had not been
abolished, nor had it been re-incorporated under any general corporation law;
and finally, sixth, Republic Act No. 8485, otherwise known as the Animal Welfare
Act of 1998, designates the petitioner as a member of its Committee on Animal
Welfare which is attached to the Department of Agriculture.

In view of the phrase One-half of all the fines imposed and collected through the
efforts of said society, the Court, in a Resolution dated January 30, 2007, required
the Office of the Solicitor General (OSG) and the parties to comment on: a)
petitioner's authority to impose fines and the validity of the provisions of Act No.
1285 and Commonwealth Act No. 148 considering that there are no standard
measures provided for in the aforecited laws as to the manner of
implementation, the specific violations of the law, the person/s authorized to
impose fine and in what amount; and, b) the effect of the 1935 and 1987
Constitutions on whether petitioner continues to exist or should organize as a
private corporation under the Corporation Code, B.P. Blg. 68 as amended.

Petitioner and the OSG filed their respective Comments. Respondents filed a
Manifestation stating that since they were being represented by the OSG which
filed its Comment, they opted to dispense with the filing of a separate one and
adopt for the purpose that of the OSG.

The petitioner avers that it does not have the authority to impose fines for
violation of animal welfare laws; it only enjoyed the privilege of sharing in the
fines imposed and collected from its efforts in the enforcement of animal welfare
laws; such privilege, however, was subsequently abolished by C.A. No. 148; that it
continues to exist as a private corporation since it was created by the Philippine
Commission before the effectivity of the Corporation law, Act No. 1459; and the
1935 and 1987 Constitutions.

The OSG submits that Act No. 1285 and its amendatory laws did not give
petitioner the authority to impose fines for violation of laws[12]relating to the
prevention of cruelty to animals and the protection of animals; that even prior to
the amendment of Act No. 1285, petitioner was only entitled to share in the fines
imposed; C.A. No. 148 abolished that privilege to share in the fines collected; that
petitioner is a public corporation and has continued to exist since Act No. 1285;
petitioner was not repealed by the 1935 and 1987 Constitutions which contain
transitory provisions maintaining all laws issued not inconsistent therewith until
amended, modified or repealed.

The petition is impressed with merit.

The arguments of the parties, interlaced as they are, can be disposed of in five
points.

First, the Court agrees with the petitioner that the charter test cannot be applied.

Essentially, the charter test as it stands today provides:

[T]he test to determine whether a corporation is government owned or

controlled, or private in nature is simple. Is it created by its own charter
for the exercise of a public function, or by incorporation under the
general corporation law? Those with special charters are government
corporations subject to its provisions, and its employees are under the
jurisdiction of the Civil Service Commission, and are compulsory
members of the Government Service Insurance System. xxx (Emphasis
supplied)[13]

The petitioner is correct in stating that the charter test is predicated, at best, on the
legal regime established by the 1935 Constitution, Section 7, Article XIII, which
states:

Sec. 7. The National Assembly shall not, except by general law, provide
for the formation, organization, or regulation of private corporations,
unless such corporations are owned or controlled by the Government or
any subdivision or instrumentality thereof.[14]

The foregoing proscription has been carried over to the 1973 and the 1987
Constitutions. Section 16 of Article XII of the present Constitution provides:

Sec. 16. The Congress shall not, except by general law, provide
for the formation, organization, or regulation of private
 corporations.Government-owned or controlled corporations may be
created or established by special charters in the interest of the common
good and subject to the test of economic viability.

Section 16 is essentially a re-enactment of Section 7 of Article XVI of the 1935

Constitution and Section 4 of Article XIV of the 1973 Constitution.

During the formulation of the 1935 Constitution, the Committee on Franchises

recommended the foregoing proscription to prevent the pressure of special
interests upon the lawmaking body in the creation of corporations or in the
regulation of the same. To permit the lawmaking body by special law to provide
for the organization, formation, or regulation of private corporations would be in
effect to offer to it the temptation in many cases to favor certain groups, to the
prejudice of others or to the prejudice of the interests of the country.[15]

And since the underpinnings of the charter test had been introduced by the 1935
Constitution and not earlier, it follows that the test cannot apply to the petitioner,
which was incorporated by virtue of Act No. 1285, enacted on January 19,
1905. Settled is the rule that laws in general have no retroactive effect, unless the
contrary is provided.[16] All statutes are to be construed as having only a
prospective operation, unless the purpose and intention of the legislature to give
them a retrospective effect is expressly declared or is necessarily implied from the
language used. In case of doubt, the doubt must be resolved against the
retrospective effect.[17]

There are a few exceptions. Statutes can be given retroactive effect in the
following cases: (1) when the law itself so expressly provides; (2) in case of
remedial statutes; (3) in case of curative statutes; (4) in case of laws interpreting
others; and (5) in case of laws creating new rights.[18] None of the exceptions is
present in the instant case.
The general principle of prospectivity of the law likewise applies to Act No. 1459,
otherwise known as the Corporation Law, which had been enacted by virtue of
the plenary powers of the Philippine Commission on March 1, 1906, a little over a
year after January 19, 1905, the time the petitioner emerged as a juridical
entity. Even the Corporation Law respects the rights and powers of juridical
entities organized beforehand, viz:

SEC. 75. Any corporation or sociedad anonima formed, organized, and

existing under the
laws of the Philippine Islands and lawfully transactingbusiness in the
Philippine Islands on the date of the passage of this Act, shall be subject
to the provisions hereof so far as such
provisions may beapplicable and shall be entitled at its option either to
continue business as such corporation or to reform and organize under
and by virtue of the provisions of this Act, transferring all corporate
interests to the new corporation which, if a stock corporation, is
authorized to issue its shares of stock at par to the stockholders or
members of the old corporation according to their interests. (Emphasis
supplied).

As pointed out by the OSG, both the 1935 and 1987 Constitutions contain
transitory provisions maintaining all laws issued not inconsistent therewith until
amended, modified or repealed.[19]
In a legal regime where the charter test doctrine cannot be applied, the mere fact
that a corporation has been created by virtue of a special law does not necessarily
qualify it as a public corporation.

What then is the nature of the petitioner as a corporate entity? What legal regime
governs its rights, powers, and duties?
As stated, at the time the petitioner was formed, the applicable law was the
Philippine Bill of 1902, and, emphatically, as also stated above, no proscription
similar to the charter test can be found therein.

The textual foundation of the charter test, which placed a limitation on the power
of the legislature, first appeared in the 1935 Constitution.However, the petitioner
was incorporated in 1905 by virtue of Act No. 1258, a law antedating the
Corporation Law (Act No. 1459) by a year, and the 1935 Constitution, by thirty
years. There being neither a general law on the formation and organization of
private corporations nor a restriction on the legislature to create private
corporations by direct legislation, the Philippine Commission at that moment in
history was well within its powers in 1905 to constitute the petitioner as a private
juridical entity.

Time and again the Court must caution even the most brilliant scholars of the law
and all constitutional historians on the danger of imposing legal concepts of a
later date on facts of an earlier date.[20]

The amendments introduced by C.A. No. 148 made it clear that the petitioner was
a private corporation and not an agency of the government.This was evident in
Executive Order No. 63, issued by then President of the Philippines Manuel
L. Quezon, declaring that the revocation of the powers of the petitioner to
appoint agents with powers of arrest corrected a serious defect in one of the laws
existing in the statute books.

As a curative statute, and based on the doctrines so far discussed, C.A. No. 148
has to be given retroactive effect, thereby freeing all doubt as to which class of
corporations the petitioner belongs, that is, it is a quasi-public corporation, a kind
of private domestic corporation, which the Court will further elaborate on under
the fourth point.
Second, a reading of petitioners charter shows that it is not subject to control or
supervision by any agency of the State, unlike government-owned and -controlled
corporations. No government representative sits on the board of trustees of the
petitioner. Like all private corporations, the successors of its members are
determined voluntarily and solely by the petitioner in accordance with its by-laws,
and may exercise those powers generally accorded to private corporations, such
as the powers to hold property, to sue and be sued, to use a common seal, and so
forth. It may adopt by-laws for its internal operations: the petitioner shall be
managed or operated by its officers in accordance with its by-laws in force. The
pertinent provisions of the charter provide:

Section 1. Anna L. Ide, Kate S. Wright, John L. Chamberlain,

William F. Tucker, Mary S. Fergusson, Amasa S. Crossfield, Spencer
Cosby, Sealy B. Rossiter, Richard P. Strong, Jose Robles Lahesa, Josefina
R. de Luzuriaga, and such other persons as may be associated with
them in conformity with this act, and their successors, are hereby
constituted and created a body politic and corporate at law, under the
name and style of The Philippines Society for the Prevention of Cruelty
to Animals.

As incorporated by this Act, said society shall have the power to

add to its organization such and as many members as it desires, to
provide for and choose such officers as it may deem advisable,
and in such manner as it may wish, and to remove members as it shall
provide.

It shall have the right to sue and be sued, to use a common seal,
to
receive legacies and donations, to conduct social enterprises for the pur
pose of obtaining funds, to levy dues upon its members and provide for
their collection to hold real and personal estate such as may be
 necessary for the accomplishment of the purposes of the society, and
to adopt such by-laws for its government as may not be inconsistent
with law or this charter.

xxxx

Sec. 3. The said society shall be operated under the direction of

its officers, in accordance with its by-laws in force, and this charter.

xxxx

Sec. 6. The principal office of the society shall be kept in the city
of Manila, and the society shall have full power to locate and establish
branch offices of the society wherever it may deem advisable in the
Philippine Islands, such branch offices to be under the supervision and
control of the principal office.

Third. The employees of the petitioner are registered and covered by the Social
Security System at the latters initiative, and not through the Government Service
Insurance System, which should be the case if the employees are considered
government employees. This is another indication of petitioners nature as a
private entity. Section 1 of Republic Act No. 1161, as amended by Republic Act
No. 8282, otherwise known as the Social Security Act of 1997, defines the
employer:

Employer Any person, natural or juridical, domestic or foreign,

who carries on in the Philippines any trade, business, industry,
undertaking or activity of any kind and uses the services of another
 person who is under his orders as regards the employment, except the
Government and any of its political subdivisions, branches or
instrumentalities, including corporations owned or controlled by the
Government: Provided, That a self-employed person shall be both
employee and employer at the same time. (Emphasis supplied)

Fourth. The respondents contend that the petitioner is a body politic because its
primary purpose is to secure the protection and welfare of animals which, in turn,
redounds to the public good.

This argument, is, at best, specious. The fact that a certain juridical entity is
impressed with public interest does not, by that circumstance alone, make the
entity a public corporation, inasmuch as a corporation may be private although its
charter contains provisions of a public character, incorporated solely for the
public good. This class of corporations may be considered quasi-public
corporations, which are private corporations that render public service, supply
public wants,[21] or pursue other eleemosynary objectives. While purposely
organized for the gain or benefit of its members, they are required by law to
discharge functions for the public benefit. Examples of these corporations are
utility,[22] railroad, warehouse, telegraph, telephone, water supply corporations
and transportation companies.[23] It must be stressed that a quasi-public
corporation is a species of private corporations, but the qualifying factor is the
type of service the former renders to the public: if it performs a public service,
then it becomes a quasi-public corporation.[24]

Authorities are of the view that the purpose alone of the corporation cannot be
taken as a safe guide, for the fact is that almost all corporations are nowadays
created to promote the interest, good, or convenience of the public. A bank, for
example, is a private corporation; yet, it is created for a public benefit. Private
schools and universities are likewise private corporations; and yet, they are
rendering public service.Private hospitals and wards are charged with heavy social
responsibilities. More so with all common carriers. On the other hand, there may
exist a public corporation even if it is endowed with gifts or donations from private
individuals.

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. Applying the above test, provinces,
chartered cities, and barangays can best exemplify public corporations. They are
created by the State as its own device and agency for the accomplishment of parts
of its own public works.[25]

It is clear that the amendments introduced by C.A. No. 148 revoked the powers of
the petitioner to arrest offenders of animal welfare laws and the power to serve
processes in connection therewith.

Fifth. The respondents argue that since the charter of the petitioner requires the
latter to render periodic reports to the Civil Governor, whose functions have been
inherited by the President, the petitioner is, therefore, a government
instrumentality.

This contention is inconclusive. By virtue of the fiction that all corporations owe
their very existence and powers to the State, the reportorial requirement is
applicable to all corporations of whatever nature, whether they are public, quasi-
public, or private corporationsas creatures of the State, there is a reserved right in
the legislature to investigate the activities of a corporation to determine whether
it acted within its powers. In other words, the reportorial requirement is the
principal means by which the State may see to it that its creature acted according
to the powers and functions conferred upon it. These principles were extensively
discussed in Bataan Shipyard & Engineering Co., Inc. v. Presidential Commission
on Good Government.[26] Here, the Court, in holding that the subject corporation
could not invoke the right against self-incrimination whenever the State
demanded the production of its corporate books and papers, extensively
discussed the purpose of reportorial requirements, viz:

x x x The corporation is a creature of the state. It is presumed to be

incorporated for the benefit of the public. It received certain special
privileges and franchises, and holds them subject to the laws of the
state and the limitations of its charter. Its powers are limited by law. It
can make no contract not authorized by its charter. Its rights to act as a
corporation are only preserved to it so long as it obeys the laws of its
creation. There is a reserve[d] right in the legislature to investigate its
contracts and find out whether it has exceeded its powers. It would be a
strange anomaly to hold that a state, having chartered a corporation to
make use of certain franchises, could not, in the exercise of sovereignty,
inquire how these franchises had been employed, and whether they had
been abused, and demand the production of the corporate books and
papers for that purpose. The defense amounts to this, that an officer of
the corporation which is charged with a criminal violation of the statute
may plead the criminality of such corporation as a refusal to produce its
books. To state this proposition is to answer it. While an individual may
lawfully refuse to answer incriminating questions unless protected by an
immunity statute, it does not follow that a corporation vested with
special privileges and franchises may refuse to show its hand when
charged with an abuse of such privileges. (Wilson v. United States, 55
Law Ed., 771, 780.)[27]

WHEREFORE, the petition is GRANTED. Petitioner is DECLARED a private domestic

corporation subject to the jurisdiction of the Securities and Exchange
Commission. The respondents are ENJOINED from investigating, examining and
auditing the petitioner's fiscal and financial affairs.

SO ORDERED.
G.R. No. 183591 October 14, 2008

THE PROVINCE OF NORTH COTABATO, duly represented by GOVERNOR JESUS SACDALAN

and/or VICE-GOVERNOR EMMANUEL PIÑOL, for and in his own behalf, petitioners,
vs.
THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE PANEL ON
ANCESTRAL DOMAIN (GRP), represented by SEC. RODOLFO GARCIA, ATTY. LEAH
ARMAMENTO, ATTY. SEDFREY CANDELARIA, MARK RYAN SULLIVAN and/or GEN.
HERMOGENES ESPERON, JR., the latter in his capacity as the present and duly-appointed
Presidential Adviser on the Peace Process (OPAPP) or the so-called Office of the Presidential
Adviser on the Peace Process, respondents.

x--------------------------------------------x

G.R. No. 183752 October 14, 2008

CITY GOVERNMENT OF ZAMBOANGA, as represented by HON. CELSO L. LOBREGAT, City

Mayor of Zamboanga, and in his personal capacity as resident of the City of Zamboanga, Rep.
MA. ISABELLE G. CLIMACO, District 1, and Rep. ERICO BASILIO A. FABIAN, District 2, City of
Zamboanga, petitioners,
vs.
THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE NEGOTIATING PANEL
(GRP), as represented by RODOLFO C. GARCIA, LEAH ARMAMENTO, SEDFREY
CANDELARIA, MARK RYAN SULLIVAN and HERMOGENES ESPERON, in his capacity as the
Presidential Adviser on Peace Process,respondents.

x--------------------------------------------x

G.R. No. 183893 October 14, 2008

THE CITY OF ILIGAN, duly represented by CITY MAYOR LAWRENCE LLUCH CRUZ, petitioner,
vs.
THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE PANEL ON
ANCESTRAL DOMAIN (GRP), represented by SEC. RODOLFO GARCIA, ATTY. LEAH
ARMAMENTO, ATTY. SEDFREY CANDELARIA, MARK RYAN SULLIVAN; GEN. HERMOGENES
ESPERON, JR., in his capacity as the present and duly appointed Presidential Adviser on the
Peace Process; and/or SEC. EDUARDO ERMITA, in his capacity as Executive
Secretary. respondents.

x--------------------------------------------x

G.R. No. 183951 October 14, 2008

THE PROVINCIAL GOVERNMENT OF ZAMBOANGA DEL NORTE, as represented by HON.

ROLANDO E. YEBES, in his capacity as Provincial Governor, HON. FRANCIS H. OLVIS, in his
capacity as Vice-Governor and Presiding Officer of the Sangguniang Panlalawigan, HON.
CECILIA JALOSJOS CARREON, Congresswoman, 1st Congressional District, HON. CESAR G.
JALOSJOS, Congressman, 3rd Congressional District, and Members of the Sangguniang
Panlalawigan of the Province of Zamboanga del Norte, namely, HON. SETH FREDERICK P.
JALOSJOS, HON. FERNANDO R. CABIGON, JR., HON. ULDARICO M. MEJORADA II, HON.
EDIONAR M. ZAMORAS, HON. EDGAR J. BAGUIO, HON. CEDRIC L. ADRIATICO, HON.
FELIXBERTO C. BOLANDO, HON. JOSEPH BRENDO C. AJERO, HON. NORBIDEIRI B.
EDDING, HON. ANECITO S. DARUNDAY, HON. ANGELICA J. CARREON and HON.
LUZVIMINDA E. TORRINO, petitioners,
vs.
THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE NEGOTIATING PANEL
[GRP], as represented by HON. RODOLFO C. GARCIA and HON. HERMOGENES ESPERON, in
his capacity as the Presidential Adviser of Peace Process, respondents.

x--------------------------------------------x

G.R. No. 183962 October 14, 2008

ERNESTO M. MACEDA, JEJOMAR C. BINAY, and AQUILINO L. PIMENTEL III, petitioners,

vs.
THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE NEGOTIATING PANEL,
represented by its Chairman RODOLFO C. GARCIA, and the MORO ISLAMIC LIBERATION
FRONT PEACE NEGOTIATING PANEL, represented by its Chairman MOHAGHER
IQBAL, respondents.

x--------------------------------------------x

FRANKLIN M. DRILON and ADEL ABBAS TAMANO, petitioners-in-intervention.

x--------------------------------------------x

SEN. MANUEL A. ROXAS, petitioners-in-intervention.

x--------------------------------------------x

MUNICIPALITY OF LINAMON duly represented by its Municipal Mayor NOEL N.

DEANO, petitioners-in-intervention,

x--------------------------------------------x

THE CITY OF ISABELA, BASILAN PROVINCE, represented by MAYOR CHERRYLYN P.

SANTOS-AKBAR,petitioners-in-intervention.

x--------------------------------------------x

THE PROVINCE OF SULTAN KUDARAT, rep. by HON. SUHARTO T. MANGUDADATU, in his

capacity as Provincial Governor and a resident of the Province of Sultan Kudarat, petitioner-in-
intervention.

x-------------------------------------------x

RUY ELIAS LOPEZ, for and in his own behalf and on behalf of Indigenous Peoples in
Mindanao Not Belonging to the MILF, petitioner-in-intervention.

x--------------------------------------------x
CARLO B. GOMEZ, GERARDO S. DILIG, NESARIO G. AWAT, JOSELITO C. ALISUAG and
RICHALEX G. JAGMIS, as citizens and residents of Palawan, petitioners-in-intervention.

x--------------------------------------------x

MARINO RIDAO and KISIN BUXANI, petitioners-in-intervention.

x--------------------------------------------x

MUSLIM LEGAL ASSISTANCE FOUNDATION, INC (MUSLAF), respondent-in-intervention.

x--------------------------------------------x

MUSLIM MULTI-SECTORAL MOVEMENT FOR PEACE & DEVELOPMENT

(MMMPD), respondent-in-intervention.

x--------------------------------------------x

DECISION

CARPIO MORALES, J.:

Subject of these consolidated cases is the extent of the powers of the President in pursuing the
peace process.While the facts surrounding this controversy center on the armed conflict in Mindanao
between the government and the Moro Islamic Liberation Front (MILF), the legal issue involved has
a bearing on all areas in the country where there has been a long-standing armed conflict. Yet again,
the Court is tasked to perform a delicate balancing act. It must uncompromisingly delineate the
bounds within which the President may lawfully exercise her discretion, but it must do so in strict
adherence to the Constitution, lest its ruling unduly restricts the freedom of action vested by that
same Constitution in the Chief Executive precisely to enable her to pursue the peace process
effectively.

I. FACTUAL ANTECEDENTS OF THE PETITIONS

On August 5, 2008, the Government of the Republic of the Philippines (GRP) and the MILF, through
the Chairpersons of their respective peace negotiating panels, were scheduled to sign a
Memorandum of Agreement on the Ancestral Domain (MOA-AD) Aspect of the GRP-MILF Tripoli
Agreement on Peace of 2001 in Kuala Lumpur, Malaysia.

The MILF is a rebel group which was established in March 1984 when, under the leadership of the
late Salamat Hashim, it splintered from the Moro National Liberation Front (MNLF) then headed by
Nur Misuari, on the ground, among others, of what Salamat perceived to be the manipulation of the
MNLF away from an Islamic basis towards Marxist-Maoist orientations.1

The signing of the MOA-AD between the GRP and the MILF was not to materialize, however, for
upon motion of petitioners, specifically those who filed their cases before the scheduled signing of
the MOA-AD, this Court issued a Temporary Restraining Order enjoining the GRP from signing the
same.

The MOA-AD was preceded by a long process of negotiation and the concluding of several prior
agreements between the two parties beginning in 1996, when the GRP-MILF peace negotiations
began. On July 18, 1997, the GRP and MILF Peace Panels signed the Agreement on General
Cessation of Hostilities. The following year, they signed the General Framework of Agreement of
Intent on August 27, 1998.

The Solicitor General, who represents respondents, summarizes the MOA-AD by stating that the
same contained, among others, the commitment of the parties to pursue peace negotiations, protect
and respect human rights, negotiate with sincerity in the resolution and pacific settlement of the
conflict, and refrain from the use of threat or force to attain undue advantage while the peace
negotiations on the substantive agenda are on-going.2

Early on, however, it was evident that there was not going to be any smooth sailing in the GRP-MILF
peace process. Towards the end of 1999 up to early 2000, the MILF attacked a number of
municipalities in Central Mindanao and, in March 2000, it took control of the town hall of Kauswagan,
Lanao del Norte.3 In response, then President Joseph Estrada declared and carried out an "all-out-
war" against the MILF.

When President Gloria Macapagal-Arroyo assumed office, the military offensive against the MILF
was suspended and the government sought a resumption of the peace talks. The MILF, according to
a leading MILF member, initially responded with deep reservation, but when President Arroyo asked
the Government of Malaysia through Prime Minister Mahathir Mohammad to help convince the MILF
to return to the negotiating table, the MILF convened its Central Committee to seriously discuss the
matter and, eventually, decided to meet with the GRP.4

The parties met in Kuala Lumpur on March 24, 2001, with the talks being facilitated by the Malaysian
government, the parties signing on the same date the Agreement on the General Framework for the
Resumption of Peace Talks Between the GRP and the MILF. The MILF thereafter suspended all its
military actions.5

Formal peace talks between the parties were held in Tripoli, Libya from June 20-22, 2001, the
outcome of which was the GRP-MILF Tripoli Agreement on Peace (Tripoli Agreement 2001)
containing the basic principles and agenda on the following aspects of the
negotiation: Security Aspect, Rehabilitation Aspect, and Ancestral Domain Aspect. With regard to
the Ancestral Domain Aspect, the parties in Tripoli Agreement 2001 simply agreed "that the same be
discussed further by the Parties in their next meeting."

A second round of peace talks was held in Cyberjaya, Malaysia on August 5-7, 2001 which ended
with the signing of the Implementing Guidelines on the Security Aspect of the Tripoli Agreement
2001 leading to a ceasefire status between the parties. This was followed by the Implementing
Guidelines on the Humanitarian Rehabilitation and Development Aspects of the Tripoli Agreement
2001, which was signed on May 7, 2002 at Putrajaya, Malaysia. Nonetheless, there were many
incidence of violence between government forces and the MILF from 2002 to 2003.

Meanwhile, then MILF Chairman Salamat Hashim passed away on July 13, 2003 and he was
replaced by Al Haj Murad, who was then the chief peace negotiator of the MILF. Murad's position as
chief peace negotiator was taken over by Mohagher Iqbal.6

In 2005, several exploratory talks were held between the parties in Kuala Lumpur, eventually leading
to the crafting of the draft MOA-AD in its final form, which, as mentioned, was set to be signed last
August 5, 2008.

II. STATEMENT OF THE PROCEEDINGS

Before the Court is what is perhaps the most contentious "consensus" ever embodied in an
instrument - the MOA-AD which is assailed principally by the present petitions bearing docket
numbers 183591, 183752, 183893, 183951 and 183962.

Commonly impleaded as respondents are the GRP Peace Panel on Ancestral Domain7 and the
Presidential Adviser on the Peace Process (PAPP) Hermogenes Esperon, Jr.

On July 23, 2008, the Province of North Cotabato8 and Vice-Governor Emmanuel Piñol filed a
petition, docketed as G.R. No. 183591, for Mandamus and Prohibition with Prayer for the Issuance
of Writ of Preliminary Injunction and Temporary Restraining Order.9 Invoking the right to information
on matters of public concern, petitioners seek to compel respondents to disclose and furnish them
the complete and official copies of the MOA-AD including its attachments, and to prohibit the slated
signing of the MOA-AD, pending the disclosure of the contents of the MOA-AD and the holding of a
public consultation thereon. Supplementarily, petitioners pray that the MOA-AD be declared
unconstitutional.10

This initial petition was followed by another one, docketed as G.R. No. 183752, also for Mandamus
and Prohibition11 filed by the City of Zamboanga,12 Mayor Celso Lobregat, Rep. Ma. Isabelle Climaco
and Rep. Erico Basilio Fabian who likewise pray for similar injunctive reliefs. Petitioners herein
moreover pray that the City of Zamboanga be excluded from the Bangsamoro Homeland and/or
Bangsamoro Juridical Entity and, in the alternative, that the MOA-AD be declared null and void.

By Resolution of August 4, 2008, the Court issued a Temporary Restraining Order commanding and
directing public respondents and their agents to cease and desist from formally signing the MOA-
AD.13 The Court also required the Solicitor General to submit to the Court and petitioners the official
copy of the final draft of the MOA-AD,14 to which she complied.15

Meanwhile, the City of Iligan16 filed a petition for Injunction and/or Declaratory Relief, docketed
as G.R. No. 183893, praying that respondents be enjoined from signing the MOA-AD or, if the same
had already been signed, from implementing the same, and that the MOA-AD be declared
unconstitutional. Petitioners herein additionally implead Executive Secretary Eduardo Ermita as
respondent.

The Province of Zamboanga del Norte,17 Governor Rolando Yebes, Vice-Governor Francis Olvis,
Rep. Cecilia Jalosjos-Carreon, Rep. Cesar Jalosjos, and the members18 of the Sangguniang
Panlalawigan of Zamboanga del Norte filed on August 15, 2008 a petition for Certiorari, Mandamus
and Prohibition,19 docketed as G.R. No. 183951. They pray, inter alia, that the MOA-AD be declared
null and void and without operative effect, and that respondents be enjoined from executing the
MOA-AD.

On August 19, 2008, Ernesto Maceda, Jejomar Binay, and Aquilino Pimentel III filed a petition for
Prohibition,20docketed as G.R. No. 183962, praying for a judgment prohibiting and permanently
enjoining respondents from formally signing and executing the MOA-AD and or any other agreement
derived therefrom or similar thereto, and nullifying the MOA-AD for being unconstitutional and illegal.
Petitioners herein additionally implead as respondent the MILF Peace Negotiating Panel
represented by its Chairman Mohagher Iqbal.

Various parties moved to intervene and were granted leave of court to file their petitions-/comments-
in-intervention. Petitioners-in-Intervention include Senator Manuel A. Roxas, former Senate
President Franklin Drilon and Atty. Adel Tamano, the City of Isabela21 and Mayor Cherrylyn Santos-
Akbar, the Province of Sultan Kudarat22 and Gov. Suharto Mangudadatu, the Municipality of Linamon
in Lanao del Norte,23 Ruy Elias Lopez of Davao City and of the Bagobo tribe, Sangguniang
Panlungsod member Marino Ridao and businessman Kisin Buxani, both of Cotabato City; and
lawyers Carlo Gomez, Gerardo Dilig, Nesario Awat, Joselito Alisuag, Richalex Jagmis, all of
Palawan City. The Muslim Legal Assistance Foundation, Inc. (Muslaf) and the Muslim Multi-Sectoral
Movement for Peace and Development (MMMPD) filed their respective Comments-in-Intervention.

By subsequent Resolutions, the Court ordered the consolidation of the petitions. Respondents filed
Comments on the petitions, while some of petitioners submitted their respective Replies.

Respondents, by Manifestation and Motion of August 19, 2008, stated that the Executive
Department shall thoroughly review the MOA-AD and pursue further negotiations to address the
issues hurled against it, and thus moved to dismiss the cases. In the succeeding exchange of
pleadings, respondents' motion was met with vigorous opposition from petitioners.

The cases were heard on oral argument on August 15, 22 and 29, 2008 that tackled the following
principal issues:

1. Whether the petitions have become moot and academic

(i) insofar as the mandamus aspect is concerned, in view of the disclosure of official
copies of the final draft of the Memorandum of Agreement (MOA); and

(ii) insofar as the prohibition aspect involving the Local Government Units is
concerned, if it is considered that consultation has become fait accompli with the
finalization of the draft;

2. Whether the constitutionality and the legality of the MOA is ripe for adjudication;

3. Whether respondent Government of the Republic of the Philippines Peace Panel

committed grave abuse of discretion amounting to lack or excess of jurisdiction when it
negotiated and initiated the MOA vis-à-vis ISSUES Nos. 4 and 5;

4. Whether there is a violation of the people's right to information on matters of public

concern (1987 Constitution, Article III, Sec. 7) under a state policy of full disclosure of all its
transactions involving public interest (1987 Constitution, Article II, Sec. 28) including public
consultation under Republic Act No. 7160 (LOCAL GOVERNMENT CODE OF 1991)[;]

If it is in the affirmative, whether prohibition under Rule 65 of the 1997 Rules of Civil
Procedure is an appropriate remedy;

5. Whether by signing the MOA, the Government of the Republic of the Philippines would be
BINDING itself

a) to create and recognize the Bangsamoro Juridical Entity (BJE) as a separate

state, or a juridical, territorial or political subdivision not recognized by law;

b) to revise or amend the Constitution and existing laws to conform to the MOA;

c) to concede to or recognize the claim of the Moro Islamic Liberation Front for
ancestral domain in violation of Republic Act No. 8371 (THE INDIGENOUS
PEOPLES RIGHTS ACT OF 1997), particularly Section 3(g) & Chapter VII
(DELINEATION, RECOGNITION OF ANCESTRAL DOMAINS)[;]
 If in the affirmative, whether the Executive Branch has the authority to so bind the
Government of the Republic of the Philippines;

6. Whether the inclusion/exclusion of the Province of North Cotabato, Cities of Zamboanga,

Iligan and Isabela, and the Municipality of Linamon, Lanao del Norte in/from the areas
covered by the projected Bangsamoro Homeland is a justiciable question; and

7. Whether desistance from signing the MOA derogates any prior valid commitments of the
Government of the Republic of the Philippines.24

The Court, thereafter, ordered the parties to submit their respective Memoranda. Most of the parties
submitted their memoranda on time.

III. OVERVIEW OF THE MOA-AD

As a necessary backdrop to the consideration of the objections raised in the subject five petitions
and six petitions-in-intervention against the MOA-AD, as well as the two comments-in-intervention in
favor of the MOA-AD, the Court takes an overview of the MOA.

The MOA-AD identifies the Parties to it as the GRP and the MILF.

Under the heading "Terms of Reference" (TOR), the MOA-AD includes not only four earlier
agreements between the GRP and MILF, but also two agreements between the GRP and the MNLF:
the 1976 Tripoli Agreement, and the Final Peace Agreement on the Implementation of the 1976
Tripoli Agreement, signed on September 2, 1996 during the administration of President Fidel
Ramos.

The MOA-AD also identifies as TOR two local statutes - the organic act for the Autonomous Region
in Muslim Mindanao (ARMM)25 and the Indigenous Peoples Rights Act (IPRA),26 and several
international law instruments - the ILO Convention No. 169 Concerning Indigenous and Tribal
Peoples in Independent Countries in relation to the UN Declaration on the Rights of the Indigenous
Peoples, and the UN Charter, among others.

The MOA-AD includes as a final TOR the generic category of "compact rights entrenchment
emanating from the regime of dar-ul-mua'hada (or territory under compact) and dar-ul-sulh (or
territory under peace agreement) that partakes the nature of a treaty device."

During the height of the Muslim Empire, early Muslim jurists tended to see the world through a
simple dichotomy: there was the dar-ul-Islam (the Abode of Islam) and dar-ul-harb (the Abode
of War). The first referred to those lands where Islamic laws held sway, while the second denoted
those lands where Muslims were persecuted or where Muslim laws were outlawed or
ineffective.27 This way of viewing the world, however, became more complex through the centuries
as the Islamic world became part of the international community of nations.

As Muslim States entered into treaties with their neighbors, even with distant States and inter-
governmental organizations, the classical division of the world into dar-ul-Islam and dar-ul-
harb eventually lost its meaning. New terms were drawn up to describe novel ways of perceiving
non-Muslim territories. For instance, areas like dar-ul-mua'hada (land of compact) and dar-ul-
sulh (land of treaty) referred to countries which, though under a secular regime, maintained peaceful
and cooperative relations with Muslim States, having been bound to each other by treaty or
agreement. Dar-ul-aman (land of order), on the other hand, referred to countries which, though not
bound by treaty with Muslim States, maintained freedom of religion for Muslims.28

It thus appears that the "compact rights entrenchment" emanating from the regime of dar-ul-
mua'hada and dar-ul-sulh simply refers to all other agreements between the MILF and the Philippine
government - the Philippines being the land of compact and peace agreement - that partake of the
nature of a treaty device, "treaty" being broadly defined as "any solemn agreement in writing that
sets out understandings, obligations, and benefits for both parties which provides for a framework
that elaborates the principles declared in the [MOA-AD]."29

The MOA-AD states that the Parties "HAVE AGREED AND ACKNOWLEDGED AS FOLLOWS," and
starts with its main body.

The main body of the MOA-AD is divided into four strands, namely, Concepts and Principles,
Territory, Resources, and Governance.

A. CONCEPTS AND PRINCIPLES

This strand begins with the statement that it is "the birthright of all Moros and all Indigenous peoples
of Mindanao to identify themselves and be accepted as ‘Bangsamoros.'" It defines "Bangsamoro
people" as the natives or original inhabitants of Mindanao and its adjacent islands including
Palawan and the Sulu archipelago at the time of conquest or colonization, and their
descendants whether mixed or of full blood, including their spouses.30

Thus, the concept of "Bangsamoro," as defined in this strand of the MOA-AD, includes not only
"Moros" as traditionally understood even by Muslims,31 but all indigenous peoples of Mindanao and
its adjacent islands. The MOA-AD adds that the freedom of choice of indigenous peoples shall be
respected. What this freedom of choice consists in has not been specifically defined.

The MOA-AD proceeds to refer to the "Bangsamoro homeland," the ownership of which is vested
exclusively in the Bangsamoro people by virtue of their prior rights of occupation.32 Both parties to
the MOA-AD acknowledge that ancestral domain does not form part of the public domain.33

The Bangsamoro people are acknowledged as having the right to self-governance, which right is
said to be rooted on ancestral territoriality exercised originally under the suzerain authority of their
sultanates and the Pat a Pangampong ku Ranaw. The sultanates were described as states or
"karajaan/kadatuan" resembling a body politic endowed with all the elements of a nation-state in the
modern sense.34

The MOA-AD thus grounds the right to self-governance of the Bangsamoro people on the past
suzerain authority of the sultanates. As gathered, the territory defined as the Bangsamoro homeland
was ruled by several sultanates and, specifically in the case of the Maranao, by the Pat a
Pangampong ku Ranaw, a confederation of independent principalities (pangampong) each ruled by
datus and sultans, none of whom was supreme over the others.35

The MOA-AD goes on to describe the Bangsamoro people as "the ‘First Nation' with defined territory
and with a system of government having entered into treaties of amity and commerce with foreign
nations."

The term "First Nation" is of Canadian origin referring to the indigenous peoples of that territory,
particularly those known as Indians. In Canada, each of these indigenous peoples is equally entitled
to be called "First Nation," hence, all of them are usually described collectively by the plural "First
Nations."36 To that extent, the MOA-AD, by identifying the Bangsamoro people as "the First Nation" -
suggesting its exclusive entitlement to that designation - departs from the Canadian usage of the
term.

The MOA-AD then mentions for the first time the "Bangsamoro Juridical Entity" (BJE) to which it
grants the authority and jurisdiction over the Ancestral Domain and Ancestral Lands of the
Bangsamoro.37

B. TERRITORY

The territory of the Bangsamoro homeland is described as the land mass as well as the maritime,
terrestrial, fluvial and alluvial domains, including the aerial domain and the atmospheric space above
it, embracing the Mindanao-Sulu-Palawan geographic region.38

More specifically, the core of the BJE is defined as the present geographic area of the ARMM - thus
constituting the following areas: Lanao del Sur, Maguindanao, Sulu, Tawi-Tawi, Basilan, and Marawi
City. Significantly, this core also includes certain municipalities of Lanao del Norte that voted for
inclusion in the ARMM in the 2001 plebiscite.39

Outside of this core, the BJE is to cover other provinces, cities, municipalities and barangays, which
are grouped into two categories, Category A and Category B. Each of these areas is to be subjected
to a plebiscite to be held on different dates, years apart from each other. Thus, Category A areas are
to be subjected to a plebiscite not later than twelve (12) months following the signing of the MOA-
AD.40 Category B areas, also called "Special Intervention Areas," on the other hand, are to be
subjected to a plebiscite twenty-five (25) years from the signing of a separate agreement - the
Comprehensive Compact.41

The Parties to the MOA-AD stipulate that the BJE shall have jurisdiction over all natural resources
within its "internalwaters," defined as extending fifteen (15) kilometers from the coastline of the BJE
area;42 that the BJE shall also have "territorial waters," which shall stretch beyond the BJE internal
waters up to the baselines of the Republic of the Philippines (RP) south east and south west of
mainland Mindanao; and that within these territorial waters, the BJE and the "Central
Government" (used interchangeably with RP) shall exercise joint jurisdiction, authority and
management over all natural resources.43 Notably, the jurisdiction over the internal waters is not
similarly described as "joint."

The MOA-AD further provides for the sharing of minerals on the territorial waters between the
Central Government and the BJE, in favor of the latter, through production sharing and economic
cooperation agreement.44 The activities which the Parties are allowed to conduct on
the territorial waters are enumerated, among which are the exploration and utilization of natural
resources, regulation of shipping and fishing activities, and the enforcement of police and safety
measures.45 There is no similar provision on the sharing of minerals and allowed activities with
respect to the internal waters of the BJE.

C. RESOURCES

The MOA-AD states that the BJE is free to enter into any economic cooperation and trade relations
with foreign countries and shall have the option to establish trade missions in those countries. Such
relationships and understandings, however, are not to include aggression against the GRP. The BJE
may also enter into environmental cooperation agreements.46
The external defense of the BJE is to remain the duty and obligation of the Central Government. The
Central Government is also bound to "take necessary steps to ensure the BJE's participation in
international meetings and events" like those of the ASEAN and the specialized agencies of the UN.
The BJE is to be entitled to participate in Philippine official missions and delegations for the
negotiation of border agreements or protocols for environmental protection and equitable sharing of
incomes and revenues involving the bodies of water adjacent to or between the islands forming part
of the ancestral domain.47

With regard to the right of exploring for, producing, and obtaining all potential sources of energy,
petroleum, fossil fuel, mineral oil and natural gas, the jurisdiction and control thereon is to be vested
in the BJE "as the party having control within its territorial jurisdiction." This right carries
the proviso that, "in times of national emergency, when public interest so requires," the Central
Government may, for a fixed period and under reasonable terms as may be agreed upon by both
Parties, assume or direct the operation of such resources.48

The sharing between the Central Government and the BJE of total production pertaining to natural
resources is to be 75:25 in favor of the BJE.49

The MOA-AD provides that legitimate grievances of the Bangsamoro people arising from any unjust
dispossession of their territorial and proprietary rights, customary land tenures, or their
marginalization shall be acknowledged. Whenever restoration is no longer possible, reparation is to
be in such form as mutually determined by the Parties.50

The BJE may modify or cancel the forest concessions, timber licenses, contracts or agreements,
mining concessions, Mineral Production and Sharing Agreements (MPSA), Industrial Forest
Management Agreements (IFMA), and other land tenure instruments granted by the Philippine
Government, including those issued by the present ARMM.51

D. GOVERNANCE

The MOA-AD binds the Parties to invite a multinational third-party to observe and monitor the
implementation of the Comprehensive Compact. This compact is to embody the "details for the
effective enforcement" and "the mechanisms and modalities for the actual implementation" of the
MOA-AD. The MOA-AD explicitly provides that the participation of the third party shall not in any way
affect the status of the relationship between the Central Government and the BJE.52

The "associative" relationship

between the Central Government
and the BJE

The MOA-AD describes the relationship of the Central Government and the BJE as "associative,"
characterized by shared authority and responsibility. And it states that the structure of governance is
to be based on executive, legislative, judicial, and administrative institutions with defined powers and
functions in the Comprehensive Compact.

The MOA-AD provides that its provisions requiring "amendments to the existing legal framework"
shall take effect upon signing of the Comprehensive Compact and upon effecting the aforesaid
amendments, with due regard to the non-derogation of prior agreements and within the stipulated
timeframe to be contained in the Comprehensive Compact. As will be discussed later, much of
the present controversy hangs on the legality of this provision.
The BJE is granted the power to build, develop and maintain its own institutions inclusive of civil
service, electoral, financial and banking, education, legislation, legal, economic, police and internal
security force, judicial system and correctional institutions, the details of which shall be discussed in
the negotiation of the comprehensive compact.

As stated early on, the MOA-AD was set to be signed on August 5, 2008 by Rodolfo Garcia and
Mohagher Iqbal, Chairpersons of the Peace Negotiating Panels of the GRP and the MILF,
respectively. Notably, the penultimate paragraph of the MOA-AD identifies the signatories as "the
representatives of the Parties," meaning the GRP and MILF themselves, and not merely of the
negotiating panels.53 In addition, the signature page of the MOA-AD states that it is "WITNESSED
BY" Datuk Othman Bin Abd Razak, Special Adviser to the Prime Minister of Malaysia, "ENDORSED
BY" Ambassador Sayed Elmasry, Adviser to Organization of the Islamic Conference (OIC) Secretary
General and Special Envoy for Peace Process in Southern Philippines, and SIGNED "IN THE
PRESENCE OF" Dr. Albert G. Romulo, Secretary of Foreign Affairs of RP and Dato' Seri Utama Dr.
Rais Bin Yatim, Minister of Foreign Affairs, Malaysia, all of whom were scheduled to sign the
Agreement last August 5, 2008.

Annexed to the MOA-AD are two documents containing the respective lists cum maps of the
provinces, municipalities, and barangays under Categories A and B earlier mentioned in the
discussion on the strand on TERRITORY.

IV. PROCEDURAL ISSUES

A. RIPENESS

The power of judicial review is limited to actual cases or controversies.54 Courts decline to issue
advisory opinions or to resolve hypothetical or feigned problems, or mere academic questions.55 The
limitation of the power of judicial review to actual cases and controversies defines the role assigned
to the judiciary in a tripartite allocation of power, to assure that the courts will not intrude into areas
committed to the other branches of government.56

An actual case or controversy involves a conflict of legal rights, an assertion of opposite legal claims,
susceptible of judicial resolution as distinguished from a hypothetical or abstract difference or
dispute. There must be a contrariety of legal rights that can be interpreted and enforced on the basis
of existing law and jurisprudence.57 The Court can decide the constitutionality of an act or treaty only
when a proper case between opposing parties is submitted for judicial determination.58

Related to the requirement of an actual case or controversy is the requirement of ripeness. A

question is ripe for adjudication when the act being challenged has had a direct adverse effect on
the individual challenging it.59 For a case to be considered ripe for adjudication, it is a prerequisite
that something had then been accomplished or performed by either branch before a court may come
into the picture,60 and the petitioner must allege the existence of an immediate or threatened injury to
itself as a result of the challenged action.61 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.62

The Solicitor General argues that there is no justiciable controversy that is ripe for judicial review in
the present petitions, reasoning that

The unsigned MOA-AD is simply a list of consensus points subject to further negotiations
and legislative enactments as well as constitutional processes aimed at attaining a final
peaceful agreement. Simply put, the MOA-AD remains to be a proposal that does not
 automatically create legally demandable rights and obligations until the list of operative acts
required have been duly complied with. x x x

xxxx

In the cases at bar, it is respectfully submitted that this Honorable Court has no authority to
pass upon issues based on hypothetical or feigned constitutional problems or interests
with no concrete bases. Considering the preliminary character of the MOA-AD, there are no
concrete acts that could possibly violate petitioners' and intervenors' rights since the acts
complained of are mere contemplated steps toward the formulation of a final peace
agreement. Plainly, petitioners and intervenors' perceived injury, if at all, is merely imaginary
and illusory apart from being unfounded and based on mere conjectures. (Underscoring
supplied)

The Solicitor General cites63 the following provisions of the MOA-AD:

TERRITORY

xxxx

2. Toward this end, the Parties enter into the following stipulations:

xxxx

d. Without derogating from the requirements of prior agreements, the Government stipulates
to conduct and deliver, using all possible legal measures, within twelve (12) months following
the signing of the MOA-AD, a plebiscite covering the areas as enumerated in the list and
depicted in the map as Category A attached herein (the "Annex"). The Annex constitutes an
integral part of this framework agreement. Toward this end, the Parties shall endeavor to
complete the negotiations and resolve all outstanding issues on the Comprehensive
Compact within fifteen (15) months from the signing of the MOA-AD.

xxxx

GOVERNANCE

xxxx

7. The Parties agree that mechanisms and modalities for the actual implementation of this
MOA-AD shall be spelt out in the Comprehensive Compact to mutually take such steps to
enable it to occur effectively.

Any provisions of the MOA-AD requiring amendments to the existing legal framework shall
come into force upon the signing of a Comprehensive Compact and upon effecting the
necessary changes to the legal framework with due regard to non-derogation of prior
agreements and within the stipulated timeframe to be contained in the Comprehensive
Compact.64 (Underscoring supplied)

The Solicitor General's arguments fail to persuade.

Concrete acts under the MOA-AD are not necessary to render the present controversy ripe.
In Pimentel, Jr. v. Aguirre,65 this Court held:

x x x [B]y 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.

xxxx

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 x x
x settling the dispute becomes the duty and the responsibility of the courts.66

In Santa Fe Independent School District v. Doe,67 the United States Supreme Court held that the
challenge to the constitutionality of the school's policy allowing student-led prayers and speeches
before games was ripe for adjudication, even if no public prayer had yet been led under the policy,
because the policy was being challenged as unconstitutional on its face.68

That the law or act in question is not yet effective does not negate ripeness. For example, in New
York v. United States,69 decided in 1992, the United States Supreme Court held that the action by
the State of New York challenging the provisions of the Low-Level Radioactive Waste Policy Act was
ripe for adjudication even if the questioned provision was not to take effect until January 1, 1996,
because the parties agreed that New York had to take immediate action to avoid the provision's
consequences.70

The present petitions pray for Certiorari,71 Prohibition, and Mandamus. Certiorari and Prohibition are
remedies granted by law when any tribunal, board or officer has acted, in the case of certiorari, or is
proceeding, in the case of prohibition, without or in excess of its jurisdiction or with grave abuse of
discretion amounting to lack or excess of jurisdiction.72 Mandamus is a remedy granted by law when
any tribunal, corporation, board, officer or person unlawfully neglects the performance of an act
which the law specifically enjoins as a duty resulting from an office, trust, or station, or unlawfully
excludes another from the use or enjoyment of a right or office to which such other is
entitled.73 Certiorari, Mandamus and Prohibition are appropriate remedies to raise constitutional
issues and to review and/or prohibit/nullify, when proper, acts of legislative and executive officials.74

The authority of the GRP Negotiating Panel is defined by Executive Order No. 3 (E.O. No. 3), issued
on February 28, 2001.75 The said executive order requires that "[t]he government's policy framework
for peace, including the systematic approach and the administrative structure for carrying out the
comprehensive peace process x x x be governed by this Executive Order."76

The present petitions allege that respondents GRP Panel and PAPP Esperon drafted the terms of
the MOA-AD without consulting the local government units or communities affected, nor informing
them of the proceedings. As will be discussed in greater detail later, such omission, by itself,
constitutes a departure by respondents from their mandate under E.O. No. 3.

Furthermore, the petitions allege that the provisions of the MOA-AD violate the Constitution. The
MOA-AD provides that "any provisions of the MOA-AD requiring amendments to the existing legal
framework shall come into force upon the signing of a Comprehensive Compact and upon effecting
the necessary changes to the legal framework," implying an amendment of the Constitution to
accommodate the MOA-AD. This stipulation, in effect, guaranteed to the MILF the amendment of
the Constitution. Such act constitutes another violation of its authority. Again, these points will be
discussed in more detail later.

As the petitions allege acts or omissions on the part of respondent that exceed their authority, by
violating their duties under E.O. No. 3 and the provisions of the Constitution and statutes, the
petitions make a prima facie case for Certiorari, Prohibition, and Mandamus, and an actual case or
controversy ripe for adjudication exists. When an act of a branch of government 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.77

B. LOCUS STANDI

For a party to have locus standi, one must allege "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."78

Because constitutional cases are often public actions in which the relief sought is likely to affect
other persons, a preliminary question frequently arises as to this interest in the constitutional
question raised.79

When suing as a citizen, the person complaining must allege that he has been or is about to be
denied some right or privilege to which he is lawfully entitled or that he is about to be subjected to
some burdens or penalties by reason of the statute or act complained of.80 When the issue concerns
a public right, it is sufficient that the petitioner is a citizen and has an interest in the execution of the
laws.81

For a taxpayer, one is allowed to sue where there is an assertion that public funds are illegally
disbursed or deflected to an illegal purpose, or that there is a wastage of public funds through the
enforcement of an invalid or unconstitutional law.82 The Court retains discretion whether or not to
allow a taxpayer's suit.83

In the case of a legislator or member of Congress, an act of the Executive that injures the institution
of Congress causes a derivative but nonetheless substantial injury that can be questioned by
legislators. A member of the House of Representatives has standing to maintain inviolate the
prerogatives, powers and privileges vested by the Constitution in his office.84

An organization may be granted standing to assert the rights of its members,85 but the mere
invocation by the Integrated Bar of the Philippines or any member of the legal profession of the duty
to preserve the rule of law does not suffice to clothe it with standing.86

As regards a local government unit (LGU), it can seek relief in order to protect or vindicate an
interest of its own, and of the other LGUs.87

Intervenors, meanwhile, may be given legal standing upon showing of facts that satisfy the
requirements of the law authorizing intervention,88 such as a legal interest in the matter in litigation,
or in the success of either of the parties.

In any case, the Court has discretion to relax the procedural technicality on locus standi, given the
liberal attitude it has exercised, highlighted in the case of David v. Macapagal-Arroyo,89 where
technicalities of procedure were brushed aside, the constitutional issues raised being of paramount
public interest or of transcendental importance deserving the attention of the Court in view of their
seriousness, novelty and weight as precedents.90 The Court's forbearing stance on locus standi on
issues involving constitutional issues has for its purpose the protection of fundamental rights.

In not a few cases, the Court, in keeping with its duty under the Constitution to determine whether
the other branches of government have kept themselves within the limits of the Constitution and the
laws and have not abused the discretion given them, has brushed aside technical rules of
procedure.91

In the petitions at bar, petitioners Province of North Cotabato (G.R. No. 183591) Province of
Zamboanga del Norte (G.R. No. 183951), City of Iligan (G.R. No. 183893) and City of
Zamboanga (G.R. No. 183752) and petitioners-in-intervention Province of Sultan Kudarat, City of
Isabela and Municipality of Linamon have locus standi in view of the direct and substantial injury
that they, as LGUs, would suffer as their territories, whether in whole or in part, are to be included in
the intended domain of the BJE. These petitioners allege that they did not vote for their inclusion in
the ARMM which would be expanded to form the BJE territory. Petitioners' legal standing is thus
beyond doubt.

In G.R. No. 183962, petitioners Ernesto Maceda, Jejomar Binay and Aquilino Pimentel III would
have no standing as citizens and taxpayers for their failure to specify that they would be denied
some right or privilege or there would be wastage of public funds. The fact that they are a former
Senator, an incumbent mayor of Makati City, and a resident of Cagayan de Oro, respectively, is of
no consequence. Considering their invocation of the transcendental importance of the issues at
hand, however, the Court grants them standing.

Intervenors Franklin Drilon and Adel Tamano, in alleging their standing as taxpayers, assert that
government funds would be expended for the conduct of an illegal and unconstitutional plebiscite to
delineate the BJE territory. On that score alone, they can be given legal standing. Their allegation
that the issues involved in these petitions are of "undeniable transcendental importance" clothes
them with added basis for their personality to intervene in these petitions.

With regard to Senator Manuel Roxas, his standing is premised on his being a member of the
Senate and a citizen to enforce compliance by respondents of the public's constitutional right to be
informed of the MOA-AD, as well as on a genuine legal interest in the matter in litigation, or in the
success or failure of either of the parties. He thus possesses the requisite standing as an intervenor.

With respect to Intervenors Ruy Elias Lopez, as a former congressman of the 3rd district of Davao
City, a taxpayer and a member of the Bagobo tribe; Carlo B. Gomez, et al., as members of the IBP
Palawan chapter, citizens and taxpayers; Marino Ridao, as taxpayer, resident and member of
the Sangguniang Panlungsod of Cotabato City; and Kisin Buxani, as taxpayer, they failed to allege
any proper legal interest in the present petitions. Just the same, the Court exercises its discretion to
relax the procedural technicality on locus standi given the paramount public interest in the issues at
hand.

Intervening respondents Muslim Multi-Sectoral Movement for Peace and Development, an

advocacy group for justice and the attainment of peace and prosperity in Muslim Mindanao;
and Muslim Legal Assistance Foundation Inc., a non-government organization of Muslim lawyers,
allege that they stand to be benefited or prejudiced, as the case may be, in the resolution of the
petitions concerning the MOA-AD, and prays for the denial of the petitions on the grounds therein
stated. Such legal interest suffices to clothe them with standing.

B. MOOTNESS
Respondents insist that the present petitions have been rendered moot with the satisfaction of all the
reliefs prayed for by petitioners and the subsequent pronouncement of the Executive Secretary that
"[n]o matter what the Supreme Court ultimately decides[,] the government will not sign the MOA."92

In lending credence to this policy decision, the Solicitor General points out that the President had
already disbanded the GRP Peace Panel.93

In David v. Macapagal-Arroyo,94 this Court held that the "moot and academic" principle not being a
magical formula that automatically dissuades courts in resolving a case, it will decide cases,
otherwise moot and academic, if it finds that (a) there is a grave violation of the Constitution;95 (b) the
situation is of exceptional character and paramount public interest is involved;96 (c) the constitutional
issue raised requires formulation of controlling principles to guide the bench, the bar, and the
public;97 and (d) the case is capable of repetition yet evading review.98

Another exclusionary circumstance that may be considered is where there is a voluntary cessation of
the activity complained of by the defendant or doer. Thus, once a suit is filed and the doer voluntarily
ceases the challenged conduct, it does not automatically deprive the tribunal of power to hear and
determine the case and does not render the case moot especially when the plaintiff seeks damages
or prays for injunctive relief against the possible recurrence of the violation.99

The present petitions fall squarely into these exceptions to thus thrust them into the domain of
judicial review. The grounds cited above in David are just as applicable in the present cases as they
were, not only in David, but also in Province of Batangas v. Romulo100 and Manalo v.
Calderon101 where the Court similarly decided them on the merits, supervening events that would
ordinarily have rendered the same moot notwithstanding.

Petitions not mooted

Contrary then to the asseverations of respondents, the non-signing of the MOA-AD and the eventual
dissolution of the GRP Peace Panel did not moot the present petitions. It bears emphasis that the
signing of the MOA-AD did not push through due to the Court's issuance of a Temporary Restraining
Order.

Contrary too to respondents' position, the MOA-AD cannot be considered a mere "list of consensus
points," especially given its nomenclature, the need to have it signed or initialed by all the parties
concerned on August 5, 2008, and the far-reaching Constitutional implications of these
"consensus points," foremost of which is the creation of the BJE.

In fact, as what will, in the main, be discussed, there is a commitment on the part of respondents
to amend and effect necessary changes to the existing legal framework for certain provisions
of the MOA-AD to take effect. Consequently, the present petitions are not confined to the terms
and provisions of the MOA-AD, but to other on-going and future negotiations and agreements
necessary for its realization. The petitions have not, therefore, been rendered moot and academic
simply by the public disclosure of the MOA-AD,102 the manifestation that it will not be signed as well
as the disbanding of the GRP Panel not withstanding.

Petitions are imbued with paramount public interest

There is no gainsaying that the petitions are imbued with paramount public interest, involving a
significant part of the country's territory and the wide-ranging political modifications of affected LGUs.
The assertion that the MOA-AD is subject to further legal enactments including possible
Constitutional amendments more than ever provides impetus for the Court to formulate
controlling principles to guide the bench, the bar, the public and, in this case, the
government and its negotiating entity.

Respondents cite Suplico v. NEDA, et al.103 where the Court did not "pontificat[e] on issues which no
longer legitimately constitute an actual case or controversy [as this] will do more harm than good to
the nation as a whole."

The present petitions must be differentiated from Suplico. Primarily, in Suplico, what was assailed
and eventually cancelled was a stand-alone government procurement contract for a national
broadband network involving a one-time contractual relation between two parties-the government
and a private foreign corporation. As the issues therein involved specific government procurement
policies and standard principles on contracts, the majority opinion in Suplico found nothing
exceptional therein, the factual circumstances being peculiar only to the transactions and parties
involved in the controversy.

The MOA-AD is part of a series of agreements

In the present controversy, the MOA-AD is a significant part of a series of agreements necessary
to carry out the Tripoli Agreement 2001. The MOA-AD which dwells on the Ancestral Domain
Aspect of said Tripoli Agreement is the third such component to be undertaken following the
implementation of the Security Aspect in August 2001 and the Humanitarian, Rehabilitation and
Development Aspect in May 2002.

Accordingly, even if the Executive Secretary, in his Memorandum of August 28, 2008 to the Solicitor
General, has stated that "no matter what the Supreme Court ultimately decides[,] the government
will not sign the MOA[-AD]," mootness will not set in in light of the terms of the Tripoli Agreement
2001.

Need to formulate principles-guidelines

Surely, the present MOA-AD can be renegotiated or another one will be drawn up to carry out the
Ancestral Domain Aspect of the Tripoli Agreement 2001, in another or in any form, which could
contain similar or significantly drastic provisions. While the Court notes the word of the Executive
Secretary that the government "is committed to securing an agreement that is both constitutional and
equitable because that is the only way that long-lasting peace can be assured," it is minded to
render a decision on the merits in the present petitions to formulate controlling principles to
guide the bench, the bar, the public and, most especially, the government in negotiating with
the MILF regarding Ancestral Domain.

Respondents invite the Court's attention to the separate opinion of then Chief Justice Artemio
Panganiban in Sanlakas v. Reyes104 in which he stated that the doctrine of "capable of repetition yet
evading review" can override mootness, "provided the party raising it in a proper case has been
and/or continue to be prejudiced or damaged as a direct result of their issuance." They contend that
the Court must have jurisdiction over the subject matter for the doctrine to be invoked.

The present petitions all contain prayers for Prohibition over which this Court exercises original
jurisdiction. While G.R. No. 183893 (City of Iligan v. GRP) is a petition for Injunction and Declaratory
Relief, the Court will treat it as one for Prohibition as it has far reaching implications and raises
questions that need to be resolved.105 At all events, the Court has jurisdiction over most if not the rest
of the petitions.
Indeed, the present petitions afford a proper venue for the Court to again apply the doctrine
immediately referred to as what it had done in a number of landmark cases.106 There is
a reasonable expectation that petitioners, particularly the Provinces of North Cotabato, Zamboanga
del Norte and Sultan Kudarat, the Cities of Zamboanga, Iligan and Isabela, and the Municipality of
Linamon, will again be subjected to the same problem in the future as respondents' actions are
capable of repetition, in another or any form.

It is with respect to the prayers for Mandamus that the petitions have become moot, respondents
having, by Compliance of August 7, 2008, provided this Court and petitioners with official copies of
the final draft of the MOA-AD and its annexes. Too, intervenors have been furnished, or have
procured for themselves, copies of the MOA-AD.

V. SUBSTANTIVE ISSUES

As culled from the Petitions and Petitions-in-Intervention, there are basically two SUBSTANTIVE
issues to be resolved, one relating to the manner in which the MOA-AD was negotiated and
finalized, the other relating to its provisions, viz:

1. Did respondents violate constitutional and statutory provisions on public consultation and the right
to information when they negotiated and later initialed the MOA-AD?

2. Do the contents of the MOA-AD violate the Constitution and the laws?

ON THE FIRST SUBSTANTIVE ISSUE

Petitioners invoke their constitutional right to information on matters of public concern, as

provided in Section 7, Article III on the Bill of Rights:

Sec. 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.107

As early as 1948, in Subido v. Ozaeta,108 the Court has recognized the statutory right to examine and
inspect public records, a right which was eventually accorded constitutional status.

The right of access to public documents, as enshrined in both the 1973 Constitution and the 1987
Constitution, has been recognized as a self-executory constitutional right.109

In the 1976 case of Baldoza v. Hon. Judge Dimaano,110 the Court ruled that access to public records
is predicated on the right of the people to acquire information on matters of public concern since,
undoubtedly, in a democracy, the pubic has a legitimate interest in matters of social and political
significance.

x x x The incorporation of this right in the Constitution is a recognition of the fundamental role of free
exchange of information in a democracy. There can be no realistic perception by the public of the
nation's problems, nor a meaningful democratic decision-making if they are denied access to
information of general interest. Information is needed to enable the members of society to cope with
the exigencies of the times. As has been aptly observed: "Maintaining the flow of such information
depends on protection for both its acquisition and its dissemination since, if either process is
interrupted, the flow inevitably ceases." x x x111

In the same way that free discussion enables members of society to cope with the exigencies of their
time, access to information of general interest aids the people in democratic decision-making by
giving them a better perspective of the vital issues confronting the nation112 so that they may be able
to criticize and participate in the affairs of the government in a responsible, reasonable and effective
manner. It is by ensuring an unfettered and uninhibited exchange of ideas among a well-informed
public that a government remains responsive to the changes desired by the people.113

The MOA-AD is a matter of public concern

That the subject of the information sought in the present cases is a matter of public concern114 faces
no serious challenge. In fact, respondents admit that the MOA-AD is indeed of public concern.115 In
previous cases, the Court found that the regularity of real estate transactions entered in the Register
of Deeds,116 the need for adequate notice to the public of the various laws,117 the civil service
eligibility of a public employee,118 the proper management of GSIS funds allegedly used to grant
loans to public officials,119 the recovery of the Marcoses' alleged ill-gotten wealth,120 and the identity
of party-list nominees,121 among others, are matters of public concern. Undoubtedly, the MOA-AD
subject of the present cases is of public concern, involving as it does the sovereignty and
territorial integrity of the State, which directly affects the lives of the public at large.

Matters of public concern covered by the right to information include steps and negotiations leading
to the consummation of the contract. In not distinguishing as to the executory nature or commercial
character of agreements, the Court has categorically ruled:

x x x [T]he right to information "contemplates inclusion of negotiations leading to the

consummation of the transaction." Certainly, a consummated contract is not a
requirement for the exercise of the right to information. Otherwise, the people can never
exercise the right if no contract is consummated, and if one is consummated, it may be too
late for the public to expose its defects.

Requiring a consummated contract will keep the public in the dark until the contract, which
may be grossly disadvantageous to the government or even illegal, becomes fait accompli.
This negates the State policy of full transparency on matters of public concern, a situation
which the framers of the Constitution could not have intended. Such a requirement will
prevent the citizenry from participating in the public discussion of any proposed contract,
effectively truncating a basic right enshrined in the Bill of Rights. We can allow neither an
emasculation of a constitutional right, nor a retreat by the State of its avowed "policy of full
disclosure of all its transactions involving public interest."122 (Emphasis and italics in the
original)

Intended as a "splendid symmetry"123 to the right to information under the Bill of Rights is the policy
of public disclosure under Section 28, Article II of the Constitution reading:

Sec. 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.124

The policy of full public disclosure enunciated in above-quoted Section 28 complements the right of
access to information on matters of public concern found in the Bill of Rights. The right to information
guarantees the right of the people to demand information, while Section 28 recognizes the duty of
officialdom to give information even if nobody demands.125
The policy of public disclosure establishes a concrete ethical principle for the conduct of public
affairs in a genuinely open democracy, with the people's right to know as the centerpiece. It is a
mandate of the State to be accountable by following such policy.126 These provisions are vital to the
exercise of the freedom of expression and essential to hold public officials at all times accountable to
the people.127

Whether Section 28 is self-executory, the records of the deliberations of the Constitutional

Commission so disclose:

MR. SUAREZ. And since this is not self-executory, this policy will not be enunciated or will
not be in force and effect until after Congress shall have provided it.

MR. OPLE. I expect it to influence the climate of public ethics immediately but, of course, the
implementing law will have to be enacted by Congress, Mr. Presiding Officer.128

The following discourse, after Commissioner Hilario Davide, Jr., sought clarification on the issue, is
enlightening.

MR. DAVIDE. I would like to get some clarifications on this. Mr. Presiding Officer, did I get
the Gentleman correctly as having said that this is not a self-executing provision? It would
require a legislation by Congress to implement?

MR. OPLE. Yes. Originally, it was going to be self-executing, but I accepted an amendment
from Commissioner Regalado, so that the safeguards on national interest are modified by
the clause "as may be provided by law"

MR. DAVIDE. But as worded, does it not mean that this will immediately take effect and
Congress may provide for reasonable safeguards on the sole ground national interest?

MR. OPLE. Yes. I think so, Mr. Presiding Officer, I said earlier that it should
immediately influence the climate of the conduct of public affairs but, of course,
Congress here may no longer pass a law revoking it, or if this is approved, revoking this
principle, which is inconsistent with this policy.129 (Emphasis supplied)

Indubitably, the effectivity of the policy of public disclosure need not await the passing of a
statute. As Congress cannot revoke this principle, it is merely directed to provide for "reasonable
safeguards." The complete and effective exercise of the right to information necessitates that its
complementary provision on public disclosure derive the same self-executory nature. Since both
provisions go hand-in-hand, it is absurd to say that the broader130 right to information on matters of
public concern is already enforceable while the correlative duty of the State to disclose its
transactions involving public interest is not enforceable until there is an enabling law. Respondents
cannot thus point to the absence of an implementing legislation as an excuse in not effecting such
policy.

An essential element of these freedoms is to keep open a continuing dialogue or process of

communication between the government and the people. It is in the interest of the State that the
channels for free political discussion be maintained to the end that the government may perceive
and be responsive to the people's will.131Envisioned to be corollary to the twin rights to information
and disclosure is the design for feedback mechanisms.
 MS. ROSARIO BRAID. Yes. And lastly, Mr. Presiding Officer, will the people be able to
participate? Will the government provide feedback mechanisms so that the people
can participate and can react where the existing media facilities are not able to
provide full feedback mechanisms to the government? I suppose this will be part of
the government implementing operational mechanisms.

MR. OPLE. Yes. I think through their elected representatives and that is how these courses
take place. There is a message and a feedback, both ways.

xxxx

MS. ROSARIO BRAID. Mr. Presiding Officer, may I just make one last sentence?

I think when we talk about the feedback network, we are not talking about public
officials but also network of private business o[r] community-based organizations that
will be reacting. As a matter of fact, we will put more credence or credibility on the private
network of volunteers and voluntary community-based organizations. So I do not think we
are afraid that there will be another OMA in the making.132(Emphasis supplied)

The imperative of a public consultation, as a species of the right to information, is evident in the
"marching orders" to respondents. The mechanics for the duty to disclose information and to conduct
public consultation regarding the peace agenda and process is manifestly provided by E.O. No.
3.133 The preambulatory clause of E.O. No. 3 declares that there is a need to further enhance the
contribution of civil society to the comprehensive peace process by institutionalizing the people's
participation.

One of the three underlying principles of the comprehensive peace process is that it "should be
community-based, reflecting the sentiments, values and principles important to all Filipinos" and
"shall be defined not by the government alone, nor by the different contending groups only, but by all
Filipinos as one community."134 Included as a component of the comprehensive peace process is
consensus-building and empowerment for peace, which includes "continuing consultations on both
national and local levels to build consensus for a peace agenda and process, and the mobilization
and facilitation of people's participation in the peace process."135

Clearly, E.O. No. 3 contemplates not just the conduct of a plebiscite to effectuate
"continuing" consultations, contrary to respondents' position that plebiscite is "more than
sufficient consultation."136

Further, E.O. No. 3 enumerates the functions and responsibilities of the PAPP, one of which is to
"[c]onduct regular dialogues with the National Peace Forum (NPF) and other peace partners to seek
relevant information, comments, recommendations as well as to render appropriate and timely
reports on the progress of the comprehensive peace process."137 E.O. No. 3 mandates the
establishment of the NPF to be "the principal forum for the PAPP to consult with and seek advi[c]e
from the peace advocates, peace partners and concerned sectors of society on both national and
local levels, on the implementation of the comprehensive peace process, as well as for government[-
]civil society dialogue and consensus-building on peace agenda and initiatives."138

In fine, E.O. No. 3 establishes petitioners' right to be consulted on the peace agenda, as a
corollary to the constitutional right to information and disclosure.

PAPP Esperon committed grave abuse of discretion

The PAPP committed grave abuse of discretion when he failed to carry out the pertinent
consultation. The furtive process by which the MOA-AD was designed and crafted runs contrary to
and in excess of the legal authority, and amounts to a whimsical, capricious, oppressive, arbitrary
and despotic exercise thereof.

The Court may not, of course, require the PAPP to conduct the consultation in a particular way or
manner. It may, however, require him to comply with the law and discharge the functions within the
authority granted by the President.139

Petitioners are not claiming a seat at the negotiating table, contrary to respondents' retort in justifying
the denial of petitioners' right to be consulted. Respondents' stance manifests the manner by which
they treat the salient provisions of E.O. No. 3 on people's participation. Such disregard of the
express mandate of the President is not much different from superficial conduct toward token
provisos that border on classic lip service.140 It illustrates a gross evasion of positive duty and a
virtual refusal to perform the duty enjoined.

As for respondents' invocation of the doctrine of executive privilege, it is not tenable under the
premises. The argument defies sound reason when contrasted with E.O. No. 3's explicit provisions
on continuing consultation and dialogue on both national and local levels. The executive order
even recognizes the exercise of the public's right even before the GRP makes its official
recommendations or before the government proffers its definite propositions.141 It bear emphasis that
E.O. No. 3 seeks to elicit relevant advice, information, comments and recommendations from the
people through dialogue.

AT ALL EVENTS, respondents effectively waived the defense of executive privilege in view of their
unqualified disclosure of the official copies of the final draft of the MOA-AD. By unconditionally
complying with the Court's August 4, 2008 Resolution, without a prayer for the document's
disclosure in camera, or without a manifestation that it was complying therewith ex abundante ad
cautelam.

Petitioners' assertion that the Local Government Code (LGC) of 1991 declares it a State policy to
"require all national agencies and offices to conduct periodic consultations with appropriate local
government units, non-governmental and people's organizations, and other concerned sectors of the
community before any project or program is implemented in their respective jurisdictions"142 is well-
taken. The LGC chapter on intergovernmental relations puts flesh into this avowed policy:

Prior Consultations Required. - No project or program shall be implemented by government

authorities unlessthe consultations mentioned in Sections 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.143 (Italics and underscoring supplied)

In Lina, Jr. v. Hon. Paño,144 the Court held that the above-stated policy and above-quoted provision
of the LGU apply only to national programs or projects which are to be implemented in a particular
local community. Among the programs and projects covered are those that are critical to the
environment and human ecology including those that may call for the eviction of a particular group of
people residing in the locality where these will be implemented.145 The MOA-AD is one peculiar
program that unequivocally and unilaterally vests ownership of a vast territory to the
Bangsamoro people,146 which could pervasively and drastically result to the diaspora or
displacement of a great number of inhabitants from their total environment.
With respect to the indigenous cultural communities/indigenous peoples (ICCs/IPs), whose interests
are represented herein by petitioner Lopez and are adversely affected by the MOA-AD, the ICCs/IPs
have, under the IPRA, the right to participate fully at all levels of decision-making in matters which
may affect their rights, lives and destinies.147 The MOA-AD, an instrument recognizing ancestral
domain, failed to justify its non-compliance with the clear-cut mechanisms ordained in said
Act,148 which entails, among other things, the observance of the free and prior informed consent of
the ICCs/IPs.

Notably, the IPRA does not grant the Executive Department or any government agency the power to
delineate and recognize an ancestral domain claim by mere agreement or compromise. The
recognition of the ancestral domain is the raison d'etre of the MOA-AD, without which all other
stipulations or "consensus points" necessarily must fail. In proceeding to make a sweeping
declaration on ancestral domain, without complying with the IPRA, which is cited as one of the TOR
of the MOA-AD, respondents clearly transcended the boundaries of their authority. As it
seems, even the heart of the MOA-AD is still subject to necessary changes to the legal framework.
While paragraph 7 on Governance suspends the effectivity of all provisions requiring changes to the
legal framework, such clause is itself invalid, as will be discussed in the following section.

Indeed, ours is an open society, with all the acts of the government subject to public scrutiny and
available always to public cognizance. This has to be so if the country is to remain democratic, with
sovereignty residing in the people and all government authority emanating from them.149

ON THE SECOND SUBSTANTIVE ISSUE

With regard to the provisions of the MOA-AD, there can be no question that they cannot all be
accommodated under the present Constitution and laws. Respondents have admitted as much in the
oral arguments before this Court, and the MOA-AD itself recognizes the need to amend the existing
legal framework to render effective at least some of its provisions. Respondents, nonetheless,
counter that the MOA-AD is free of any legal infirmity because any provisions therein which are
inconsistent with the present legal framework will not be effective until the necessary changes to that
framework are made. The validity of this argument will be considered later. For now, the Court shall
pass upon how

The MOA-AD is inconsistent with the Constitution and laws as presently worded.

In general, the objections against the MOA-AD center on the extent of the powers conceded therein
to the BJE. Petitioners assert that the powers granted to the BJE exceed those granted to any local
government under present laws, and even go beyond those of the present ARMM. Before assessing
some of the specific powers that would have been vested in the BJE, however, it would be useful to
turn first to a general idea that serves as a unifying link to the different provisions of the MOA-AD,
namely, the international law concept of association. Significantly, the MOA-AD explicitly alludes to
this concept, indicating that the Parties actually framed its provisions with it in mind.

Association is referred to in paragraph 3 on TERRITORY, paragraph 11 on RESOURCES, and

paragraph 4 on GOVERNANCE. It is in the last mentioned provision, however, that the MOA-AD
most clearly uses it to describe the envisioned relationship between the BJE and the Central
Government.

4. The relationship between the Central Government and the Bangsamoro juridical
entity shall be associative characterized by shared authority and responsibility with a
structure of governance based on executive, legislative, judicial and administrative
institutions with defined powers and functions in the comprehensive compact. A period of
 transition shall be established in a comprehensive peace compact specifying the relationship
between the Central Government and the BJE. (Emphasis and underscoring supplied)

The nature of the "associative" relationship may have been intended to be defined more precisely in
the still to be forged Comprehensive Compact. Nonetheless, given that there is a concept of
"association" in international law, and the MOA-AD - by its inclusion of international law instruments
in its TOR- placed itself in an international legal context, that concept of association may be brought
to bear in understanding the use of the term "associative" in the MOA-AD.

Keitner and Reisman state that

[a]n association is formed when two states of unequal power voluntarily establish durable
links. In the basic model, one state, the associate, delegates certain responsibilities to
the other, the principal, while maintaining its international status as a state. Free
associations represent a middle ground between integration and independence. x x
x150 (Emphasis and underscoring supplied)

For purposes of illustration, the Republic of the Marshall Islands and the Federated States of
Micronesia (FSM), formerly part of the U.S.-administered Trust Territory of the Pacific Islands,151 are
associated states of the U.S. pursuant to a Compact of Free Association. The currency in these
countries is the U.S. dollar, indicating their very close ties with the U.S., yet they issue their own
travel documents, which is a mark of their statehood. Their international legal status as states was
confirmed by the UN Security Council and by their admission to UN membership.

According to their compacts of free association, the Marshall Islands and the FSM generally have
the capacity to conduct foreign affairs in their own name and right, such capacity extending to
matters such as the law of the sea, marine resources, trade, banking, postal, civil aviation, and
cultural relations. The U.S. government, when conducting its foreign affairs, is obligated to consult
with the governments of the Marshall Islands or the FSM on matters which it (U.S. government)
regards as relating to or affecting either government.

In the event of attacks or threats against the Marshall Islands or the FSM, the U.S. government has
the authority and obligation to defend them as if they were part of U.S. territory. The U.S.
government, moreover, has the option of establishing and using military areas and facilities within
these associated states and has the right to bar the military personnel of any third country from
having access to these territories for military purposes.

It bears noting that in U.S. constitutional and international practice, free association is understood as
an international association between sovereigns. The Compact of Free Association is a treaty which
is subordinate to the associated nation's national constitution, and each party may terminate the
association consistent with the right of independence. It has been said that, with the admission of the
U.S.-associated states to the UN in 1990, the UN recognized that the American model of free
association is actually based on an underlying status of independence.152

In international practice, the "associated state" arrangement has usually been used as a transitional
device of former colonies on their way to full independence. Examples of states that have passed
through the status of associated states as a transitional phase are Antigua, St. Kitts-Nevis-Anguilla,
Dominica, St. Lucia, St. Vincent and Grenada. All have since become independent states.153

Back to the MOA-AD, it contains many provisions which are consistent with the international legal
concept of association, specifically the following: the BJE's capacity to enter into economic and trade
relations with foreign countries, the commitment of the Central Government to ensure the BJE's
participation in meetings and events in the ASEAN and the specialized UN agencies, and the
continuing responsibility of the Central Government over external defense. Moreover, the BJE's right
to participate in Philippine official missions bearing on negotiation of border agreements,
environmental protection, and sharing of revenues pertaining to the bodies of water adjacent to or
between the islands forming part of the ancestral domain, resembles the right of the governments of
FSM and the Marshall Islands to be consulted by the U.S. government on any foreign affairs matter
affecting them.

These provisions of the MOA indicate, among other things, that the Parties aimed to vest in the
BJE the status of an associated state or, at any rate, a status closely approximating it.

The concept of association is not recognized under the present Constitution

No province, city, or municipality, not even the ARMM, is recognized under our laws as having an
"associative" relationship with the national government. Indeed, the concept implies powers that go
beyond anything ever granted by the Constitution to any local or regional government. It also implies
the recognition of the associated entity as a state. The Constitution, however, does not contemplate
any state in this jurisdiction other than the Philippine State, much less does it provide for a transitory
status that aims to prepare any part of Philippine territory for independence.

Even the mere concept animating many of the MOA-AD's provisions, therefore, already requires for
its validity the amendment of constitutional provisions, specifically the following provisions of 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.

SECTION 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.

The BJE is a far more powerful

entity than the autonomous region
recognized in the Constitution

It is not merely an expanded version of the ARMM, the status of its relationship with the national
government being fundamentally different from that of the ARMM. Indeed, BJE is a state in all but
name as it meets the criteria of a state laid down in the Montevideo Convention,154 namely,
a permanent population, a defined territory, a government, and a capacity to enter into relations with
other states.

Even assuming arguendo that the MOA-AD would not necessarily sever any portion of Philippine
territory, the spirit animating it - which has betrayed itself by its use of the concept of association -
runs counter to the national sovereignty and territorial integrity of the Republic.

The defining concept underlying the relationship between the national government and the
BJE being itself contrary to the present Constitution, it is not surprising that many of the
specific provisions of the MOA-AD on the formation and powers of the BJE are in conflict
with the Constitution and the laws.
Article X, Section 18 of the Constitution provides that "[t]he creation of the autonomous region shall
be effective when approved by a 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." (Emphasis supplied)

As reflected above, the BJE is more of a state than an autonomous region. But even assuming that it
is covered by the term "autonomous region" in the constitutional provision just quoted, the MOA-AD
would still be in conflict with it. Under paragraph 2(c) on TERRITORY in relation to 2(d) and 2(e), the
present geographic area of the ARMM and, in addition, the municipalities of Lanao del Norte which
voted for inclusion in the ARMM during the 2001 plebiscite - Baloi, Munai, Nunungan, Pantar,
Tagoloan and Tangkal - are automatically part of the BJE without need of another plebiscite, in
contrast to the areas under Categories A and B mentioned earlier in the overview. That the present
components of the ARMM and the above-mentioned municipalities voted for inclusion therein in
2001, however, does not render another plebiscite unnecessary under the Constitution, precisely
because what these areas voted for then was their inclusion in the ARMM, not the BJE.

The MOA-AD, moreover, would not

comply with Article X, Section 20 of
the Constitution

since that provision defines the powers of autonomous regions as follows:

SECTION 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. (Underscoring supplied)

Again on the premise that the BJE may be regarded as an autonomous region, the MOA-AD would
require an amendment that would expand the above-quoted provision. The mere passage of new
legislation pursuant to sub-paragraph No. 9 of said constitutional provision would not suffice, since
any new law that might vest in the BJE the powers found in the MOA-AD must, itself, comply with
other provisions of the Constitution. It would not do, for instance, to merely pass legislation vesting
the BJE with treaty-making power in order to accommodate paragraph 4 of the strand on
RESOURCES which states: "The BJE is free to enter into any economic cooperation and trade
relations with foreign countries: provided, however, that such relationships and understandings do
not include aggression against the Government of the Republic of the Philippines x x x." Under our
constitutional system, it is only the President who has that power. Pimentel v. Executive
Secretary155 instructs:

In our system of government, the President, being the head of state, is regarded as the sole
organ and authority in external relations and is the country's sole representative with
foreign nations. As the chief architect of foreign policy, the President acts as the country's
mouthpiece with respect to international affairs. Hence, the President is vested with the
authority to deal with foreign states and governments, extend or withhold
recognition, maintain diplomatic relations, enter into treaties, and otherwise transact
the business of foreign relations. In the realm of treaty-making, the President has the
sole authority to negotiate with other states. (Emphasis and underscoring supplied)

Article II, Section 22 of the Constitution must also be amended if the scheme envisioned in
the MOA-AD is to be effected. That constitutional provision states: "The State recognizes and
promotes the rights of indigenous cultural communities within the framework of national unity and
development." (Underscoring supplied) An associative arrangement does not uphold national unity.
While there may be a semblance of unity because of the associative ties between the BJE and the
national government, the act of placing a portion of Philippine territory in a status which, in
international practice, has generally been a preparation for independence, is certainly not conducive
to national unity.

Besides being irreconcilable with the Constitution, the MOA-AD is also inconsistent with prevailing
statutory law, among which are R.A. No. 9054156 or the Organic Act of the ARMM, and
the IPRA.157

Article X, Section 3 of the Organic Act of the ARMM is a bar to the adoption of the definition
of "Bangsamoro people" used in the MOA-AD. Paragraph 1 on Concepts and Principles states:

1. It is the birthright of all Moros and all Indigenous peoples of Mindanao to identify
themselves and be accepted as "Bangsamoros". The Bangsamoro people refers to those
who are natives or original inhabitants of Mindanao and its adjacent islands including
Palawan and the Sulu archipelago at the time of conquest or colonization of its descendants
whether mixed or of full blood. Spouses and their descendants are classified as
Bangsamoro. The freedom of choice of the Indigenous people shall be respected. (Emphasis
and underscoring supplied)

This use of the term Bangsamoro sharply contrasts with that found in the Article X, Section 3 of the
Organic Act, which, rather than lumping together the identities of the Bangsamoro and other
indigenous peoples living in Mindanao, clearly distinguishes between Bangsamoro people and
Tribal peoples, as follows:

"As used in this Organic Act, the phrase "indigenous cultural community" refers to Filipino
citizens residing in the autonomous region who are:

(a) Tribal peoples. These are citizens whose social, cultural and economic conditions
distinguish them from other sectors of the national community; and

(b) Bangsa Moro people. These are citizens who are believers in Islam and who have
retained some or all of their own social, economic, cultural, and political institutions."
Respecting the IPRA, it lays down the prevailing procedure for the delineation and recognition of
ancestral domains. The MOA-AD's manner of delineating the ancestral domain of the Bangsamoro
people is a clear departure from that procedure. By paragraph 1 of Territory, the Parties simply
agree that, subject to the delimitations in the agreed Schedules, "[t]he Bangsamoro homeland and
historic territory refer to the land mass as well as the maritime, terrestrial, fluvial and alluvial
domains, and the aerial domain, the atmospheric space above it, embracing the Mindanao-Sulu-
Palawan geographic region."

Chapter VIII of the IPRA, on the other hand, lays down a detailed procedure, as illustrated in the
following provisions thereof:

SECTION 52. Delineation Process. - The identification and delineation of ancestral domains
shall be done in accordance with the following procedures:

xxxx

b) Petition for Delineation. - The process of delineating a specific perimeter may be initiated
by the NCIP with the consent of the ICC/IP concerned, or through a Petition for Delineation
filed with the NCIP, by a majority of the members of the ICCs/IPs;

c) Delineation Proper. - The official delineation of ancestral domain boundaries including

census of all community members therein, shall be immediately undertaken by the Ancestral
Domains Office upon filing of the application by the ICCs/IPs concerned. Delineation will be
done in coordination with the community concerned and shall at all times include genuine
involvement and participation by the members of the communities concerned;

d) Proof Required. - Proof of Ancestral Domain Claims shall include the testimony of elders
or community under oath, and other documents directly or indirectly attesting to the
possession or occupation of the area since time immemorial by such ICCs/IPs in the concept
of owners which shall be any one (1) of the following authentic documents:

1) Written accounts of the ICCs/IPs customs and traditions;

2) Written accounts of the ICCs/IPs political structure and institution;

3) Pictures showing long term occupation such as those of old improvements, burial
grounds, sacred places and old villages;

4) Historical accounts, including pacts and agreements concerning boundaries

entered into by the ICCs/IPs concerned with other ICCs/IPs;

5) Survey plans and sketch maps;

6) Anthropological data;

7) Genealogical surveys;

8) Pictures and descriptive histories of traditional communal forests and hunting

grounds;
 9) Pictures and descriptive histories of traditional landmarks such as mountains,
rivers, creeks, ridges, hills, terraces and the like; and

10) Write-ups of names and places derived from the native dialect of the community.

e) Preparation of Maps. - On the basis of such investigation and the findings of fact based
thereon, the Ancestral Domains Office of the NCIP shall prepare a perimeter map, complete
with technical descriptions, and a description of the natural features and landmarks
embraced therein;

f) Report of Investigation and Other Documents. - A complete copy of the preliminary census
and a report of investigation, shall be prepared by the Ancestral Domains Office of the NCIP;

g) Notice and Publication. - A copy of each document, including a translation in the native
language of the ICCs/IPs concerned shall be posted in a prominent place therein for at least
fifteen (15) days. A copy of the document shall also be posted at the local, provincial and
regional offices of the NCIP, and shall be published in a newspaper of general circulation
once a week for two (2) consecutive weeks to allow other claimants to file opposition thereto
within fifteen (15) days from date of such publication: Provided, That in areas where no such
newspaper exists, broadcasting in a radio station will be a valid substitute: Provided, further,
That mere posting shall be deemed sufficient if both newspaper and radio station are not
available;

h) Endorsement to NCIP. - Within fifteen (15) days from publication, and of the inspection
process, the Ancestral Domains Office shall prepare a report to the NCIP endorsing a
favorable action upon a claim that is deemed to have sufficient proof. However, if the proof is
deemed insufficient, the Ancestral Domains Office shall require the submission of additional
evidence: Provided, That the Ancestral Domains Office shall reject any claim that is deemed
patently false or fraudulent after inspection and verification: Provided, further, That in case of
rejection, the Ancestral Domains Office shall give the applicant due notice, copy furnished all
concerned, containing the grounds for denial. The denial shall be appealable to the NCIP:
Provided, furthermore, That in cases where there are conflicting claims among ICCs/IPs on
the boundaries of ancestral domain claims, the Ancestral Domains Office shall cause the
contending parties to meet and assist them in coming up with a preliminary resolution of the
conflict, without prejudice to its full adjudication according to the section below.

xxxx

To remove all doubts about the irreconcilability of the MOA-AD with the present legal system, a
discussion of not only the Constitution and domestic statutes, but also of international law is in order,
for

Article II, Section 2 of the Constitution states that the Philippines "adopts the generally
accepted principles of international law as part of the law of the land."

Applying this provision of the Constitution, the Court, in Mejoff v. Director of Prisons,158 held that the
Universal Declaration of Human Rights is part of the law of the land on account of which it ordered
the release on bail of a detained alien of Russian descent whose deportation order had not been
executed even after two years. Similarly, the Court in Agustin v. Edu159 applied the aforesaid
constitutional provision to the 1968 Vienna Convention on Road Signs and Signals.
International law has long recognized the right to self-determination of "peoples," understood not
merely as the entire population of a State but also a portion thereof. In considering the question of
whether the people of Quebec had a right to unilaterally secede from Canada, the Canadian
Supreme Court in REFERENCE RE SECESSION OF QUEBEC160 had occasion to acknowledge that
"the right of a people to self-determination is now so widely recognized in international conventions
that the principle has acquired a status beyond ‘convention' and is considered a general principle of
international law."

Among the conventions referred to are the International Covenant on Civil and Political Rights161 and
the International Covenant on Economic, Social and Cultural Rights162 which state, in Article 1 of
both covenants, that all peoples, by virtue of the right of self-determination, "freely determine their
political status and freely pursue their economic, social, and cultural development."

The people's right to self-determination should not, however, be understood as extending to a

unilateral right of secession. A distinction should be made between the right of internal and external
self-determination. REFERENCE RE SECESSION OF QUEBEC is again instructive:

"(ii) Scope of the Right to Self-determination

126. The recognized sources of international law establish that the right to self-
determination of a people is normally fulfilled through internal self-determination - a
people's pursuit of its political, economic, social and cultural development within the
framework of an existing state. A right to external self-determination (which in this
case potentially takes the form of the assertion of a right to unilateral secession)
arises in only the most extreme of cases and, even then, under carefully defined
circumstances. x x x

External self-determination can be defined as in the following statement from

the Declaration on Friendly Relations, supra, as

The establishment of a sovereign and independent State, the free association or

integration with an independent State or the emergence into any other political status
freely determined by a peopleconstitute modes of implementing the right of self-
determination by that people. (Emphasis added)

127. The international law principle of self-determination has evolved within a

framework of respect for the territorial integrity of existing states. The various
international documents that support the existence of a people's right to self-determination
also contain parallel statements supportive of the conclusion that the exercise of such a right
must be sufficiently limited to prevent threats to an existing state's territorial integrity or the
stability of relations between sovereign states.

x x x x (Emphasis, italics and underscoring supplied)

The Canadian Court went on to discuss the exceptional cases in which the right to external self-
determination can arise, namely, where a people is under colonial rule, is subject to foreign
domination or exploitation outside a colonial context, and - less definitely but asserted by a number
of commentators - is blocked from the meaningful exercise of its right to internal self-determination.
The Court ultimately held that the population of Quebec had no right to secession, as the same is
not under colonial rule or foreign domination, nor is it being deprived of the freedom to make political
choices and pursue economic, social and cultural development, citing that Quebec is equitably
represented in legislative, executive and judicial institutions within Canada, even occupying
prominent positions therein.

The exceptional nature of the right of secession is further exemplified in the REPORT OF THE
INTERNATIONAL COMMITTEE OF JURISTS ON THE LEGAL ASPECTS OF THE AALAND
ISLANDS QUESTION.163 There, Sweden presented to the Council of the League of Nations the
question of whether the inhabitants of the Aaland Islands should be authorized to determine by
plebiscite if the archipelago should remain under Finnish sovereignty or be incorporated in the
kingdom of Sweden. The Council, before resolving the question, appointed an International
Committee composed of three jurists to submit an opinion on the preliminary issue of whether the
dispute should, based on international law, be entirely left to the domestic jurisdiction of Finland. The
Committee stated the rule as follows:

x x x [I]n the absence of express provisions in international treaties, the right of disposing
of national territory is essentially an attribute of the sovereignty of every State.
Positive International Law does not recognize the right of national groups, as such, to
separate themselves from the State of which they form part by the simple expression
of a wish, any more than it recognizes the right of other States to claim such a
separation. Generally speaking, the grant or refusal of the right to a portion of its
population of determining its own political fate by plebiscite or by some other method,
is, exclusively, an attribute of the sovereignty of every State which is definitively
constituted. A dispute between two States concerning such a question, under normal
conditions therefore, bears upon a question which International Law leaves entirely to the
domestic jurisdiction of one of the States concerned. Any other solution would amount to an
infringement of sovereign rights of a State and would involve the risk of creating difficulties
and a lack of stability which would not only be contrary to the very idea embodied in term
"State," but would also endanger the interests of the international community. If this right is
not possessed by a large or small section of a nation, neither can it be held by the State to
which the national group wishes to be attached, nor by any other State. (Emphasis and
underscoring supplied)

The Committee held that the dispute concerning the Aaland Islands did not refer to a question which
is left by international law to the domestic jurisdiction of Finland, thereby applying the exception
rather than the rule elucidated above. Its ground for departing from the general rule, however, was a
very narrow one, namely, the Aaland Islands agitation originated at a time when Finland was
undergoing drastic political transformation. The internal situation of Finland was, according to the
Committee, so abnormal that, for a considerable time, the conditions required for the formation of a
sovereign State did not exist. In the midst of revolution, anarchy, and civil war, the legitimacy of the
Finnish national government was disputed by a large section of the people, and it had, in fact, been
chased from the capital and forcibly prevented from carrying out its duties. The armed camps and
the police were divided into two opposing forces. In light of these circumstances, Finland was not,
during the relevant time period, a "definitively constituted" sovereign state. The Committee,
therefore, found that Finland did not possess the right to withhold from a portion of its population the
option to separate itself - a right which sovereign nations generally have with respect to their own
populations.

Turning now to the more specific category of indigenous peoples, this term has been used, in
scholarship as well as international, regional, and state practices, to refer to groups with distinct
cultures, histories, and connections to land (spiritual and otherwise) that have been forcibly
incorporated into a larger governing society. These groups are regarded as "indigenous" since they
are the living descendants of pre-invasion inhabitants of lands now dominated by others. Otherwise
stated, indigenous peoples, nations, or communities are culturally distinctive groups that find
themselves engulfed by settler societies born of the forces of empire and conquest.164 Examples of
groups who have been regarded as indigenous peoples are the Maori of New Zealand and the
aboriginal peoples of Canada.

As with the broader category of "peoples," indigenous peoples situated within states do not have a
general right to independence or secession from those states under international law,165 but they do
have rights amounting to what was discussed above as the right to internal self-determination.

In a historic development last September 13, 2007, the UN General Assembly adopted the United
Nations Declaration on the Rights of Indigenous Peoples (UN DRIP) through General Assembly
Resolution 61/295. The vote was 143 to 4, the Philippines being included among those in favor,
and the four voting against being Australia, Canada, New Zealand, and the U.S. The Declaration
clearly recognized the right of indigenous peoples to self-determination, encompassing the
right to autonomy or self-government, to wit:

Article 3

Indigenous peoples have the right to self-determination. By virtue of that right they freely
determine their political status and freely pursue their economic, social and cultural
development.

Article 4

Indigenous peoples, in exercising their right to self-determination, have the right

to autonomy or self-government in matters relating to their internal and local affairs,
as well as ways and means for financing their autonomous functions.

Article 5

Indigenous peoples have the right to maintain and strengthen their distinct political, legal,
economic, social and cultural institutions, while retaining their right to participate fully, if they
so choose, in the political, economic, social and cultural life of the State.

Self-government, as used in international legal discourse pertaining to indigenous peoples, has been
understood as equivalent to "internal self-determination."166 The extent of self-determination provided
for in the UN DRIP is more particularly defined in its subsequent articles, some of which are quoted
hereunder:

Article 8

1. Indigenous peoples and individuals have the right not to be subjected to forced
assimilation or destruction of their culture.

2. States shall provide effective mechanisms for prevention of, and redress for:

(a) Any action which has the aim or effect of depriving them of their integrity as
distinct peoples, or of their cultural values or ethnic identities;

(b) Any action which has the aim or effect of dispossessing them of their lands,
territories or resources;
(c) Any form of forced population transfer which has the aim or effect of violating or
undermining any of their rights;

(d) Any form of forced assimilation or integration;

(e) Any form of propaganda designed to promote or incite racial or ethnic

discrimination directed against them.

Article 21

1. Indigenous peoples have the right, without discrimination, to the improvement of their
economic and social conditions, including, inter alia, in the areas of education, employment,
vocational training and retraining, housing, sanitation, health and social security.

2. States shall take effective measures and, where appropriate, special measures to ensure
continuing improvement of their economic and social conditions. Particular attention shall be
paid to the rights and special needs of indigenous elders, women, youth, children and
persons with disabilities.

Article 26

1. Indigenous peoples have the right to the lands, territories and resources which they
have traditionally owned, occupied or otherwise used or acquired.

2. Indigenous peoples have the right to own, use, develop and control the lands, territories
and resources that they possess by reason of traditional ownership or other traditional
occupation or use, as well as those which they have otherwise acquired.

3. States shall give legal recognition and protection to these lands, territories and resources.
Such recognition shall be conducted with due respect to the customs, traditions and land
tenure systems of the indigenous peoples concerned.

Article 30

1. Military activities shall not take place in the lands or territories of indigenous peoples,
unless justified by a relevant public interest or otherwise freely agreed with or requested by
the indigenous peoples concerned.

2. States shall undertake effective consultations with the indigenous peoples concerned,
through appropriate procedures and in particular through their representative institutions,
prior to using their lands or territories for military activities.

Article 32

1. Indigenous peoples have the right to determine and develop priorities and strategies for
the development or use of their lands or territories and other resources.

2. States shall consult and cooperate in good faith with the indigenous peoples concerned
through their own representative institutions in order to obtain their free and informed
consent prior to the approval of any project affecting their lands or territories and other
 resources, particularly in connection with the development, utilization or exploitation of
mineral, water or other resources.

3. States shall provide effective mechanisms for just and fair redress for any such activities,
and appropriate measures shall be taken to mitigate adverse environmental, economic,
social, cultural or spiritual impact.

Article 37

1. Indigenous peoples have the right to the recognition, observance and enforcement of
treaties, agreements and other constructive arrangements concluded with States or their
successors and to have States honour and respect such treaties, agreements and other
constructive arrangements.

2. Nothing in this Declaration may be interpreted as diminishing or eliminating the rights of

indigenous peoples contained in treaties, agreements and other constructive arrangements.

Article 38

States in consultation and cooperation with indigenous peoples, shall take the appropriate
measures, including legislative measures, to achieve the ends of this Declaration.

Assuming that the UN DRIP, like the Universal Declaration on Human Rights, must now be regarded
as embodying customary international law - a question which the Court need not definitively resolve
here - the obligations enumerated therein do not strictly require the Republic to grant the
Bangsamoro people, through the instrumentality of the BJE, the particular rights and powers
provided for in the MOA-AD. Even the more specific provisions of the UN DRIP are general in scope,
allowing for flexibility in its application by the different States.

There is, for instance, no requirement in the UN DRIP that States now guarantee indigenous
peoples their own police and internal security force. Indeed, Article 8 presupposes that it is the State
which will provide protection for indigenous peoples against acts like the forced dispossession of
their lands - a function that is normally performed by police officers. If the protection of a right so
essential to indigenous people's identity is acknowledged to be the responsibility of the State, then
surely the protection of rights less significant to them as such peoples would also be the duty of
States. Nor is there in the UN DRIP an acknowledgement of the right of indigenous peoples to the
aerial domain and atmospheric space. What it upholds, in Article 26 thereof, is the right of
indigenous peoples to the lands, territories and resources which they have traditionally owned,
occupied or otherwise used or acquired.

Moreover, the UN DRIP, while upholding the right of indigenous peoples to autonomy, does not
obligate States to grant indigenous peoples the near-independent status of an associated state. All
the rights recognized in that document are qualified in Article 46 as follows:

1. Nothing in this Declaration may be interpreted as implying for any State, people, group
or person any right to engage in any activity or to perform any act contrary to the Charter of
the United Nations or construed as authorizing or encouraging any action which would
dismember or impair, totally or in part, the territorial integrity or political unity of
sovereign and independent States.
Even if the UN DRIP were considered as part of the law of the land pursuant to Article II, Section 2
of the Constitution, it would not suffice to uphold the validity of the MOA-AD so as to render its
compliance with other laws unnecessary.

It is, therefore, clear that the MOA-AD contains numerous provisions that cannot be
reconciled with the Constitution and the laws as presently worded. Respondents proffer,
however, that the signing of the MOA-AD alone would not have entailed any violation of law or grave
abuse of discretion on their part, precisely because it stipulates that the provisions thereof
inconsistent with the laws shall not take effect until these laws are amended. They cite paragraph 7
of the MOA-AD strand on GOVERNANCE quoted earlier, but which is reproduced below for
convenience:

7. The Parties agree that the mechanisms and modalities for the actual implementation of
this MOA-AD shall be spelt out in the Comprehensive Compact to mutually take such steps
to enable it to occur effectively.

Any provisions of the MOA-AD requiring amendments to the existing legal framework shall
come into force upon signing of a Comprehensive Compact and upon effecting the
necessary changes to the legal framework with due regard to non derogation of prior
agreements and within the stipulated timeframe to be contained in the Comprehensive
Compact.

Indeed, the foregoing stipulation keeps many controversial provisions of the MOA-AD from coming
into force until the necessary changes to the legal framework are effected. While the word
"Constitution" is not mentioned in the provision now under consideration or anywhere else in
the MOA-AD, the term "legal framework" is certainly broad enough to include the
Constitution.

Notwithstanding the suspensive clause, however, respondents, by their mere act of incorporating in
the MOA-AD the provisions thereof regarding the associative relationship between the BJE and the
Central Government, have already violated the Memorandum of Instructions From The President
dated March 1, 2001, which states that the "negotiations shall be conducted in accordance with x x x
the principles of the sovereignty and territorial integrityof the Republic of the Philippines."
(Emphasis supplied) Establishing an associative relationship between the BJE and the Central
Government is, for the reasons already discussed, a preparation for independence, or worse, an
implicit acknowledgment of an independent status already prevailing.

Even apart from the above-mentioned Memorandum, however, the MOA-AD is defective because
the suspensive clause is invalid, as discussed below.

The authority of the GRP Peace Negotiating Panel to negotiate with the MILF is founded on E.O. No.
3, Section 5(c), which states that there shall be established Government Peace Negotiating Panels
for negotiations with different rebel groups to be "appointed by the President as her official
emissaries to conduct negotiations, dialogues, and face-to-face discussions with rebel groups."
These negotiating panels are to report to the President, through the PAPP on the conduct and
progress of the negotiations.

It bears noting that the GRP Peace Panel, in exploring lasting solutions to the Moro Problem through
its negotiations with the MILF, was not restricted by E.O. No. 3 only to those options available under
the laws as they presently stand. One of the components of a comprehensive peace process, which
E.O. No. 3 collectively refers to as the "Paths to Peace," is the pursuit of social, economic, and
political reforms which may require new legislation or even constitutional amendments. Sec. 4(a) of
E.O. No. 3, which reiterates Section 3(a), of E.O. No. 125,167 states:

SECTION 4. The Six Paths to Peace. - The components of the comprehensive peace
process comprise the processes known as the "Paths to Peace". These component
processes are interrelated and not mutually exclusive, and must therefore be pursued
simultaneously in a coordinated and integrated fashion. They shall include, but may not be
limited to, the following:

a. PURSUIT OF SOCIAL, ECONOMIC AND POLITICAL REFORMS. This component

involves the vigorous implementation of various policies, reforms, programs and
projects aimed at addressing the root causes of internal armed conflicts and social
unrest. This may require administrative action, new legislation or even constitutional
amendments.

x x x x (Emphasis supplied)

The MOA-AD, therefore, may reasonably be perceived as an attempt of respondents to address,

pursuant to this provision of E.O. No. 3, the root causes of the armed conflict in Mindanao. The E.O.
authorized them to "think outside the box," so to speak. Hence, they negotiated and were set on
signing the MOA-AD that included various social, economic, and political reforms which cannot,
however, all be accommodated within the present legal framework, and which thus would require
new legislation and constitutional amendments.

The inquiry on the legality of the "suspensive clause," however, cannot stop here, because it must
be asked whether the President herself may exercise the power delegated to the GRP Peace
Panel under E.O. No. 3, Sec. 4(a).

The President cannot delegate a power that she herself does not possess. May the President, in the
course of peace negotiations, agree to pursue reforms that would require new legislation and
constitutional amendments, or should the reforms be restricted only to those solutions which the
present laws allow? The answer to this question requires a discussion of the extent of the
President's power to conduct peace negotiations.

That the authority of the President to conduct peace negotiations with rebel groups is not explicitly
mentioned in the Constitution does not mean that she has no such authority. In Sanlakas v.
Executive Secretary,168 in issue was the authority of the President to declare a state of rebellion - an
authority which is not expressly provided for in the Constitution. The Court held thus:

"In her ponencia in Marcos v. Manglapus, Justice Cortes put her thesis into jurisprudence.
There, the Court, by a slim 8-7 margin, upheld the President's power to forbid the return of
her exiled predecessor. The rationale for the majority's ruling rested on the President's

. . . unstated residual powers which are implied from the grant of executive
power and which are necessary for her to comply with her duties under the
Constitution. The powers of the President are not limited to what are expressly
enumerated in the article on the Executive Department and in scattered
provisions of the Constitution. This is so, notwithstanding the avowed intent of the
members of the Constitutional Commission of 1986 to limit the powers of the
President as a reaction to the abuses under the regime of Mr. Marcos, for the result
was a limitation of specific powers of the President, particularly those relating to the
 commander-in-chief clause, but not a diminution of the general grant of executive
power.

Thus, the President's authority to declare a state of rebellion springs in the main from
her powers as chief executive and, at the same time, draws strength from her
Commander-in-Chief powers. x x x (Emphasis and underscoring supplied)

Similarly, the President's power to conduct peace negotiations is implicitly included in her powers as
Chief Executive and Commander-in-Chief. As Chief Executive, the President has the general
responsibility to promote public peace, and as Commander-in-Chief, she has the more specific duty
to prevent and suppress rebellion and lawless violence.169

As the experience of nations which have similarly gone through internal armed conflict will show,
however, peace is rarely attained by simply pursuing a military solution. Oftentimes, changes as far-
reaching as a fundamental reconfiguration of the nation's constitutional structure is required. The
observations of Dr. Kirsti Samuels are enlightening, to wit:

x x x [T]he fact remains that a successful political and governance transition must form the
core of any post-conflict peace-building mission. As we have observed in Liberia and Haiti
over the last ten years, conflict cessation without modification of the political environment,
even where state-building is undertaken through technical electoral assistance and
institution- or capacity-building, is unlikely to succeed. On average, more than 50 percent of
states emerging from conflict return to conflict. Moreover, a substantial proportion of
transitions have resulted in weak or limited democracies.

The design of a constitution and its constitution-making process can play an important role in
the political and governance transition. Constitution-making after conflict is an opportunity to
create a common vision of the future of a state and a road map on how to get there. The
constitution can be partly a peace agreement and partly a framework setting up the rules by
which the new democracy will operate.170

In the same vein, Professor Christine Bell, in her article on the nature and legal status of peace
agreements, observed that the typical way that peace agreements establish or confirm mechanisms
for demilitarization and demobilization is by linking them to new constitutional
structures addressing governance, elections, and legal and human rights institutions.171

In the Philippine experience, the link between peace agreements and constitution-making has been
recognized by no less than the framers of the Constitution. Behind the provisions of the Constitution
on autonomous regions172 is the framers' intention to implement a particular peace agreement,
namely, the Tripoli Agreement of 1976 between the GRP and the MNLF, signed by then
Undersecretary of National Defense Carmelo Z. Barbero and then MNLF Chairman Nur Misuari.

MR. ROMULO. There are other speakers; so, although I have some more questions, I will
reserve my right to ask them if they are not covered by the other speakers. I have only two
questions.

I heard one of the Commissioners say that local autonomy already exists in the
Muslim region; it is working very well; it has, in fact, diminished a great deal of the
problems. So, my question is: since that already exists, why do we have to go into
something new?
 MR. OPLE. May I answer that on behalf of Chairman Nolledo. Commissioner Yusup
Abubakar is right that certain definite steps have been taken to implement the
provisions of the Tripoli Agreement with respect to an autonomous region in
Mindanao. This is a good first step, but there is no question that this is merely a
partial response to the Tripoli Agreement itself and to the fuller standard of regional
autonomy contemplated in that agreement, and now by state policy.173(Emphasis
supplied)

The constitutional provisions on autonomy and the statutes enacted pursuant to them have, to the
credit of their drafters, been partly successful. Nonetheless, the Filipino people are still faced with
the reality of an on-going conflict between the Government and the MILF. If the President is to be
expected to find means for bringing this conflict to an end and to achieve lasting peace in Mindanao,
then she must be given the leeway to explore, in the course of peace negotiations, solutions that
may require changes to the Constitution for their implementation. Being uniquely vested with the
power to conduct peace negotiations with rebel groups, the President is in a singular position to
know the precise nature of their grievances which, if resolved, may bring an end to hostilities.

The President may not, of course, unilaterally implement the solutions that she considers viable, but
she may not be prevented from submitting them as recommendations to Congress, which could
then, if it is minded, act upon them pursuant to the legal procedures for constitutional amendment
and revision. In particular, Congress would have the option, pursuant to Article XVII, Sections 1 and
3 of the Constitution, to propose the recommended amendments or revision to the people, call a
constitutional convention, or submit to the electorate the question of calling such a convention.

While the President does not possess constituent powers - as those powers may be exercised only
by Congress, a Constitutional Convention, or the people through initiative and referendum - she may
submit proposals for constitutional change to Congress in a manner that does not involve the
arrogation of constituent powers.

In Sanidad v. COMELEC,174 in issue was the legality of then President Marcos' act of directly
submitting proposals for constitutional amendments to a referendum, bypassing the interim National
Assembly which was the body vested by the 1973 Constitution with the power to propose such
amendments. President Marcos, it will be recalled, never convened the interim National Assembly.
The majority upheld the President's act, holding that "the urges of absolute necessity" compelled the
President as the agent of the people to act as he did, there being no interim National Assembly to
propose constitutional amendments. Against this ruling, Justices Teehankee and Muñoz Palma
vigorously dissented. The Court's concern at present, however, is not with regard to the point on
which it was then divided in that controversial case, but on that which was not disputed by either
side.

Justice Teehankee's dissent,175 in particular, bears noting. While he disagreed that the President
may directly submit proposed constitutional amendments to a referendum, implicit in his opinion is a
recognition that he would have upheld the President's action along with the majority had the
President convened the interim National Assembly and coursed his proposals through it. Thus
Justice Teehankee opined:

"Since the Constitution provides for the organization of the essential departments of
government, defines and delimits the powers of each and prescribes the manner of the
exercise of such powers, and the constituent power has not been granted to but has been
withheld from the President or Prime Minister, it follows that the President's questioned
decrees proposing and submitting constitutional amendments directly to the people (without
 the intervention of the interim National Assembly in whom the power is expressly
vested) are devoid of constitutional and legal basis."176 (Emphasis supplied)

From the foregoing discussion, the principle may be inferred that the President - in the course of
conducting peace negotiations - may validly consider implementing even those policies that require
changes to the Constitution, but she may not unilaterally implement them without the intervention
of Congress, or act in any way as if the assent of that body were assumed as a certainty.

Since, under the present Constitution, the people also have the power to directly propose
amendments through initiative and referendum, the President may also submit her
recommendations to the people, not as a formal proposal to be voted on in a plebiscite similar to
what President Marcos did in Sanidad, but for their independent consideration of whether these
recommendations merit being formally proposed through initiative.

These recommendations, however, may amount to nothing more than the President's suggestions to
the people, for any further involvement in the process of initiative by the Chief Executive may vitiate
its character as a genuine "people's initiative." The only initiative recognized by the Constitution is
that which truly proceeds from the people. As the Court stated in Lambino v. COMELEC:177

"The Lambino Group claims that their initiative is the ‘people's voice.' However, the Lambino
Group unabashedly states in ULAP Resolution No. 2006-02, in the verification of their
petition with the COMELEC, that ‘ULAP maintains its unqualified support to the agenda of
Her Excellency President Gloria Macapagal-Arroyo for constitutional reforms.' The Lambino
Group thus admits that their ‘people's' initiative is an ‘unqualified support to the
agenda' of the incumbent President to change the Constitution. This forewarns the Court to
be wary of incantations of ‘people's voice' or ‘sovereign will' in the present initiative."

It will be observed that the President has authority, as stated in her oath of office,178 only to preserve
and defend the Constitution. Such presidential power does not, however, extend to allowing her to
change the Constitution, but simply to recommend proposed amendments or revision. As long as
she limits herself to recommending these changes and submits to the proper procedure for
constitutional amendments and revision, her mere recommendation need not be construed as an
unconstitutional act.

The foregoing discussion focused on the President's authority to

propose constitutional amendments, since her authority to propose new legislation is not in
controversy. It has been an accepted practice for Presidents in this jurisdiction to propose new
legislation. One of the more prominent instances the practice is usually done is in the yearly State of
the Nation Address of the President to Congress. Moreover, the annual general appropriations bill
has always been based on the budget prepared by the President, which - for all intents and
purposes - is a proposal for new legislation coming from the President.179

The "suspensive clause" in the MOA-AD viewed in light of the above-discussed standards

Given the limited nature of the President's authority to propose constitutional amendments,
she cannot guaranteeto any third party that the required amendments will eventually be put in
place, nor even be submitted to a plebiscite. The most she could do is submit these proposals as
recommendations either to Congress or the people, in whom constituent powers are vested.

Paragraph 7 on Governance of the MOA-AD states, however, that all provisions thereof which
cannot be reconciled with the present Constitution and laws "shall come into force upon signing of a
Comprehensive Compact and upon effecting the necessary changes to the legal framework." This
stipulation does not bear the marks of a suspensive condition - defined in civil law as a future
and uncertain event - but of a term. It is not a question of whether the necessary changes to the
legal framework will be effected, but when. That there is no uncertainty being contemplated is plain
from what follows, for the paragraph goes on to state that the contemplated changes shall be "with
due regard to non derogation of prior agreements and within the stipulated timeframe to be
contained in the Comprehensive Compact."

Pursuant to this stipulation, therefore, it is mandatory for the GRP to effect the changes to the legal
framework contemplated in the MOA-AD - which changes would include constitutional amendments,
as discussed earlier. It bears noting that,

By the time these changes are put in place, the MOA-AD itself would be counted among the
"prior agreements" from which there could be no derogation.

What remains for discussion in the Comprehensive Compact would merely be the implementing
details for these "consensus points" and, notably, the deadline for effecting the contemplated
changes to the legal framework.

Plainly, stipulation-paragraph 7 on GOVERNANCE is inconsistent with the limits of the

President's authority to propose constitutional amendments, it being a virtual guarantee that
the Constitution and the laws of the Republic of the Philippines will certainly be adjusted to conform
to all the "consensus points" found in the MOA-AD. Hence, it must be struck down
as unconstitutional.

A comparison between the "suspensive clause" of the MOA-AD with a similar provision appearing in
the 1996 final peace agreement between the MNLF and the GRP is most instructive.

As a backdrop, the parties to the 1996 Agreement stipulated that it would be implemented in two
phases. Phase Icovered a three-year transitional period involving the putting up of new
administrative structures through Executive Order, such as the Special Zone of Peace and
Development (SZOPAD) and the Southern Philippines Council for Peace and Development
(SPCPD), while Phase II covered the establishment of the new regional autonomous
government through amendment or repeal of R.A. No. 6734, which was then the Organic Act of the
ARMM.

The stipulations on Phase II consisted of specific agreements on the structure of the expanded
autonomous region envisioned by the parties. To that extent, they are similar to the provisions of the
MOA-AD. There is, however, a crucial difference between the two agreements. While the MOA-
AD virtually guarantees that the "necessary changes to the legal framework" will be put in
place, the GRP-MNLF final peace agreement states thus: "Accordingly, these provisions [on Phase
II] shall be recommended by the GRP to Congress for incorporation in the amendatory or repealing
law."

Concerns have been raised that the MOA-AD would have given rise to a binding international law
obligation on the part of the Philippines to change its Constitution in conformity thereto, on the
ground that it may be considered either as a binding agreement under international law, or a
unilateral declaration of the Philippine government to the international community that it would grant
to the Bangsamoro people all the concessions therein stated. Neither ground finds sufficient support
in international law, however.

The MOA-AD, as earlier mentioned in the overview thereof, would have included foreign dignitaries
as signatories. In addition, representatives of other nations were invited to witness its signing in
Kuala Lumpur. These circumstances readily lead one to surmise that the MOA-AD would have had
the status of a binding international agreement had it been signed. An examination of the prevailing
principles in international law, however, leads to the contrary conclusion.

The Decision on Challenge to Jurisdiction: Lomé Accord Amnesty180 (the Lomé Accord case) of the
Special Court of Sierra Leone is enlightening. The Lomé Accord was a peace agreement signed on
July 7, 1999 between the Government of Sierra Leone and the Revolutionary United Front (RUF), a
rebel group with which the Sierra Leone Government had been in armed conflict for around eight
years at the time of signing. There were non-contracting signatories to the agreement, among which
were the Government of the Togolese Republic, the Economic Community of West African States,
and the UN.

On January 16, 2002, after a successful negotiation between the UN Secretary-General and the
Sierra Leone Government, another agreement was entered into by the UN and that Government
whereby the Special Court of Sierra Leone was established. The sole purpose of the Special Court,
an international court, was to try persons who bore the greatest responsibility for serious violations of
international humanitarian law and Sierra Leonean law committed in the territory of Sierra Leone
since November 30, 1996.

Among the stipulations of the Lomé Accord was a provision for the full pardon of the members of the
RUF with respect to anything done by them in pursuit of their objectives as members of that
organization since the conflict began.

In the Lomé Accord case, the Defence argued that the Accord created an internationally
binding obligation not to prosecute the beneficiaries of the amnesty provided therein, citing, among
other things, the participation of foreign dignitaries and international organizations in the finalization
of that agreement. The Special Court, however, rejected this argument, ruling that the Lome Accord
is not a treaty and that it can only create binding obligations and rights between the parties in
municipal law, not in international law. Hence, the Special Court held, it is ineffective in depriving an
international court like it of jurisdiction.

"37. In regard to the nature of a negotiated settlement of an internal armed conflict it is easy
to assume and to argue with some degree of plausibility, as Defence counsel for the
defendants seem to have done, that the mere fact that in addition to the parties to the
conflict, the document formalizing the settlement is signed by foreign heads of state
or their representatives and representatives of international organizations, means the
agreement of the parties is internationalized so as to create obligations in
international law.

xxxx

40. Almost every conflict resolution will involve the parties to the conflict and the mediator or
facilitator of the settlement, or persons or bodies under whose auspices the settlement took
place but who are not at all parties to the conflict, are not contracting parties and who do not
claim any obligation from the contracting parties or incur any obligation from the settlement.

41. In this case, the parties to the conflict are the lawful authority of the State and the
RUF which has no status of statehood and is to all intents and purposes a faction
within the state. The non-contracting signatories of the Lomé Agreement were moral
guarantors of the principle that, in the terms of Article XXXIV of the Agreement, "this
peace agreement is implemented with integrity and in good faith by both parties". The
moral guarantors assumed no legal obligation. It is recalled that the UN by its
 representative appended, presumably for avoidance of doubt, an understanding of the extent
of the agreement to be implemented as not including certain international crimes.

42. An international agreement in the nature of a treaty must create rights and obligations
regulated by international law so that a breach of its terms will be a breach determined under
international law which will also provide principle means of enforcement. The Lomé
Agreement created neither rights nor obligations capable of being regulated by
international law. An agreement such as the Lomé Agreement which brings to an end
an internal armed conflict no doubt creates a factual situation of restoration of peace
that the international community acting through the Security Council may take note
of. That, however, will not convert it to an international agreement which creates an
obligation enforceable in international, as distinguished from municipal, law. A breach
of the terms of such a peace agreement resulting in resumption of internal armed conflict or
creating a threat to peace in the determination of the Security Council may indicate a
reversal of the factual situation of peace to be visited with possible legal consequences
arising from the new situation of conflict created. Such consequences such as action by the
Security Council pursuant to Chapter VII arise from the situation and not from the agreement,
nor from the obligation imposed by it. Such action cannot be regarded as a remedy for the
breach. A peace agreement which settles an internal armed conflict cannot be
ascribed the same status as one which settles an international armed conflict which,
essentially, must be between two or more warring States. The Lomé Agreement
cannot be characterised as an international instrument. x x x" (Emphasis, italics and
underscoring supplied)

Similarly, that the MOA-AD would have been signed by representatives of States and international
organizations not parties to the Agreement would not have sufficed to vest in it a binding character
under international law.

In another vein, concern has been raised that the MOA-AD would amount to a unilateral declaration
of the Philippine State, binding under international law, that it would comply with all the stipulations
stated therein, with the result that it would have to amend its Constitution accordingly regardless of
the true will of the people. Cited as authority for this view is Australia v. France,181 also known as
the Nuclear Tests Case, decided by the International Court of Justice (ICJ).

In the Nuclear Tests Case, Australia challenged before the ICJ the legality of France's nuclear tests
in the South Pacific. France refused to appear in the case, but public statements from its President,
and similar statements from other French officials including its Minister of Defence, that its 1974
series of atmospheric tests would be its last, persuaded the ICJ to dismiss the case.182 Those
statements, the ICJ held, amounted to a legal undertaking addressed to the international community,
which required no acceptance from other States for it to become effective.

Essential to the ICJ ruling is its finding that the French government intended to be bound to the
international community in issuing its public statements, viz:

43. It is well recognized that declarations made by way of unilateral acts, concerning legal or
factual situations, may have the effect of creating legal obligations. Declarations of this kind
may be, and often are, very specific. When it is the intention of the State making the
declaration that it should become bound according to its terms, that intention confers
on the declaration the character of a legal undertaking, the State being thenceforth
legally required to follow a course of conduct consistent with the declaration. An
undertaking of this kind, if given publicly, and with an intent to be bound, even though not
made within the context of international negotiations, is binding. In these circumstances,
 nothing in the nature of a quid pro quo nor any subsequent acceptance of the declaration,
nor even any reply or reaction from other States, is required for the declaration to take effect,
since such a requirement would be inconsistent with the strictly unilateral nature of the
juridical act by which the pronouncement by the State was made.

44. Of course, not all unilateral acts imply obligation; but a State may choose to take
up a certain position in relation to a particular matter with the intention of being
bound-the intention is to be ascertained by interpretation of the act. When States make
statements by which their freedom of action is to be limited, a restrictive interpretation is
called for.

xxxx

51. In announcing that the 1974 series of atmospheric tests would be the last, the
French Government conveyed to the world at large, including the Applicant, its
intention effectively to terminate these tests. It was bound to assume that other States
might take note of these statements and rely on their being effective. The validity of
these statements and their legal consequences must be considered within the general
framework of the security of international intercourse, and the confidence and trust
which are so essential in the relations among States. It is from the actual substance of
these statements, and from the circumstances attending their making, that the legal
implications of the unilateral act must be deduced. The objects of these statements
are clear and they were addressed to the international community as a whole, and the
Court holds that they constitute an undertaking possessing legal effect. The Court
considers *270 that the President of the Republic, in deciding upon the effective cessation of
atmospheric tests, gave an undertaking to the international community to which his words
were addressed. x x x (Emphasis and underscoring supplied)

As gathered from the above-quoted ruling of the ICJ, public statements of a state representative may
be construed as a unilateral declaration only when the following conditions are present: the
statements were clearly addressed to the international community, the state intended to be bound to
that community by its statements, and that not to give legal effect to those statements would be
detrimental to the security of international intercourse. Plainly, unilateral declarations arise only in
peculiar circumstances.

The limited applicability of the Nuclear Tests Case ruling was recognized in a later case decided by
the ICJ entitled Burkina Faso v. Mali,183 also known as the Case Concerning the Frontier Dispute.
The public declaration subject of that case was a statement made by the President of Mali, in an
interview by a foreign press agency, that Mali would abide by the decision to be issued by a
commission of the Organization of African Unity on a frontier dispute then pending between Mali and
Burkina Faso.

Unlike in the Nuclear Tests Case, the ICJ held that the statement of Mali's President was not a
unilateral act with legal implications. It clarified that its ruling in the Nuclear Tests case rested on the
peculiar circumstances surrounding the French declaration subject thereof, to wit:

40. In order to assess the intentions of the author of a unilateral act, account must be taken
of all the factual circumstances in which the act occurred. For example, in the Nuclear
Tests cases, the Court took the view that since the applicant States were not the only
ones concerned at the possible continuance of atmospheric testing by the French
Government, that Government's unilateral declarations had ‘conveyed to the world at
large, including the Applicant, its intention effectively to terminate these tests‘ (I.C.J.
 Reports 1974, p. 269, para. 51; p. 474, para. 53). In the particular circumstances of those
cases, the French Government could not express an intention to be bound otherwise
than by unilateral declarations. It is difficult to see how it could have accepted the
terms of a negotiated solution with each of the applicants without thereby
jeopardizing its contention that its conduct was lawful. The circumstances of the
present case are radically different. Here, there was nothing to hinder the Parties from
manifesting an intention to accept the binding character of the conclusions of the
Organization of African Unity Mediation Commission by the normal method: a formal
agreement on the basis of reciprocity. Since no agreement of this kind was concluded
between the Parties, the Chamber finds that there are no grounds to interpret the declaration
made by Mali's head of State on 11 April 1975 as a unilateral act with legal implications in
regard to the present case. (Emphasis and underscoring supplied)

Assessing the MOA-AD in light of the above criteria, it would not have amounted to a unilateral
declaration on the part of the Philippine State to the international community. The Philippine panel
did not draft the same with the clear intention of being bound thereby to the international community
as a whole or to any State, but only to the MILF. While there were States and international
organizations involved, one way or another, in the negotiation and projected signing of the MOA-AD,
they participated merely as witnesses or, in the case of Malaysia, as facilitator. As held in the Lomé
Accord case, the mere fact that in addition to the parties to the conflict, the peace settlement is
signed by representatives of states and international organizations does not mean that the
agreement is internationalized so as to create obligations in international law.

Since the commitments in the MOA-AD were not addressed to States, not to give legal effect to such
commitments would not be detrimental to the security of international intercourse - to the trust and
confidence essential in the relations among States.

In one important respect, the circumstances surrounding the MOA-AD are closer to that of Burkina
Faso wherein, as already discussed, the Mali President's statement was not held to be a binding
unilateral declaration by the ICJ. As in that case, there was also nothing to hinder the Philippine
panel, had it really been its intention to be bound to other States, to manifest that intention by formal
agreement. Here, that formal agreement would have come about by the inclusion in the MOA-AD of
a clear commitment to be legally bound to the international community, not just the MILF, and by an
equally clear indication that the signatures of the participating states-representatives would
constitute an acceptance of that commitment. Entering into such a formal agreement would not have
resulted in a loss of face for the Philippine government before the international community, which
was one of the difficulties that prevented the French Government from entering into a formal
agreement with other countries. That the Philippine panel did not enter into such a formal agreement
suggests that it had no intention to be bound to the international community. On that ground, the
MOA-AD may not be considered a unilateral declaration under international law.

The MOA-AD not being a document that can bind the Philippines under international law
notwithstanding, respondents' almost consummated act of guaranteeing amendments to the legal
framework is, by itself, sufficient to constitute grave abuse of discretion. The grave abuse lies
not in the fact that they considered, as a solution to the Moro Problem, the creation of a state within
a state, but in their brazen willingness to guarantee that Congress and the sovereign Filipino
people would give their imprimatur to their solution. Upholding such an act would amount to
authorizing a usurpation of the constituent powers vested only in Congress, a Constitutional
Convention, or the people themselves through the process of initiative, for the only way that the
Executive can ensure the outcome of the amendment process is through an undue influence or
interference with that process.
The sovereign people may, if it so desired, go to the extent of giving up a portion of its own territory
to the Moros for the sake of peace, for it can change the Constitution in any it wants, so long as the
change is not inconsistent with what, in international law, is known as Jus Cogens.184 Respondents,
however, may not preempt it in that decision.

SUMMARY

The petitions are ripe for adjudication. The failure of respondents to consult the local government
units or communities affected constitutes a departure by respondents from their mandate under E.O.
No. 3. Moreover, respondents exceeded their authority by the mere act of guaranteeing
amendments to the Constitution. Any alleged violation of the Constitution by any branch of
government is a proper matter for judicial review.

As the petitions involve constitutional issues which are of paramount public interest or of
transcendental importance, the Court grants the petitioners, petitioners-in-intervention and
intervening respondents the requisite locus standi in keeping with the liberal stance adopted in David
v. Macapagal-Arroyo.

Contrary to the assertion of respondents that the non-signing of the MOA-AD and the eventual
dissolution of the GRP Peace Panel mooted the present petitions, the Court finds that the present
petitions provide an exception to the "moot and academic" principle in view of (a) the grave violation
of the Constitution involved; (b) the exceptional character of the situation and paramount public
interest; (c) the need to formulate controlling principles to guide the bench, the bar, and the public;
and (d) the fact that the case is capable of repetition yet evading review.

The MOA-AD is a significant part of a series of agreements necessary to carry out the GRP-MILF
Tripoli Agreement on Peace signed by the government and the MILF back in June 2001. Hence, the
present MOA-AD can be renegotiated or another one drawn up that could contain similar or
significantly dissimilar provisions compared to the original.

The Court, however, finds that the prayers for mandamus have been rendered moot in view of the
respondents' action in providing the Court and the petitioners with the official copy of the final draft of
the MOA-AD and its annexes.

The people's right to information on matters of public concern under Sec. 7, Article III of the
Constitution is in splendid symmetry with the state policy of full public disclosure of all its
transactions involving public interest under Sec. 28, Article II of the Constitution. The right to
information guarantees the right of the people to demand information, while Section 28 recognizes
the duty of officialdom to give information even if nobody demands. The complete and effective
exercise of the right to information necessitates that its complementary provision on public
disclosure derive the same self-executory nature, subject only to reasonable safeguards or
limitations as may be provided by law.

The contents of the MOA-AD is a matter of paramount public concern involving public interest in the
highest order. In declaring that the right to information contemplates steps and negotiations leading
to the consummation of the contract, jurisprudence finds no distinction as to the executory nature or
commercial character of the agreement.

An essential element of these twin freedoms is to keep a continuing dialogue or process of

communication between the government and the people. Corollary to these twin rights is the design
for feedback mechanisms. The right to public consultation was envisioned to be a species of these
public rights.
At least three pertinent laws animate these constitutional imperatives and justify the exercise of the
people's right to be consulted on relevant matters relating to the peace agenda.

One, E.O. No. 3 itself is replete with mechanics for continuing consultations on both national and
local levels and for a principal forum for consensus-building. In fact, it is the duty of the Presidential
Adviser on the Peace Process to conduct regular dialogues to seek relevant information, comments,
advice, and recommendations from peace partners and concerned sectors of society.

Two, Republic Act No. 7160 or the Local Government Code of 1991 requires all national offices to
conduct consultations before any project or program critical to the environment and human ecology
including those that may call for the eviction of a particular group of people residing in such locality,
is implemented therein. The MOA-AD is one peculiar program that unequivocally and unilaterally
vests ownership of a vast territory to the Bangsamoro people, which could pervasively and
drastically result to the diaspora or displacement of a great number of inhabitants from their total
environment.

Three, Republic Act No. 8371 or the Indigenous Peoples Rights Act of 1997 provides for clear-cut
procedure for the recognition and delineation of ancestral domain, which entails, among other things,
the observance of the free and prior informed consent of the Indigenous Cultural
Communities/Indigenous Peoples. Notably, the statute does not grant the Executive Department or
any government agency the power to delineate and recognize an ancestral domain claim by mere
agreement or compromise.

The invocation of the doctrine of executive privilege as a defense to the general right to information
or the specific right to consultation is untenable. The various explicit legal provisions fly in the face of
executive secrecy. In any event, respondents effectively waived such defense after it unconditionally
disclosed the official copies of the final draft of the MOA-AD, for judicial compliance and public
scrutiny.

In sum, the Presidential Adviser on the Peace Process committed grave abuse of discretion when he
failed to carry out the pertinent consultation process, as mandated by E.O. No. 3, Republic Act No.
7160, and Republic Act No. 8371. The furtive process by which the MOA-AD was designed and
crafted runs contrary to and in excess of the legal authority, and amounts to a whimsical, capricious,
oppressive, arbitrary and despotic exercise thereof. It illustrates a gross evasion of positive duty and
a virtual refusal to perform the duty enjoined.

The MOA-AD cannot be reconciled with the present Constitution and laws. Not only its specific
provisions but the very concept underlying them, namely, the associative relationship envisioned
between the GRP and the BJE, are unconstitutional, for the concept presupposes that the
associated entity is a state and implies that the same is on its way to independence.

While there is a clause in the MOA-AD stating that the provisions thereof inconsistent with the
present legal framework will not be effective until that framework is amended, the same does not
cure its defect. The inclusion of provisions in the MOA-AD establishing an associative relationship
between the BJE and the Central Government is, itself, a violation of the Memorandum of
Instructions From The President dated March 1, 2001, addressed to the government peace panel.
Moreover, as the clause is worded, it virtually guarantees that the necessary amendments to the
Constitution and the laws will eventually be put in place. Neither the GRP Peace Panel nor the
President herself is authorized to make such a guarantee. Upholding such an act would amount to
authorizing a usurpation of the constituent powers vested only in Congress, a Constitutional
Convention, or the people themselves through the process of initiative, for the only way that the
Executive can ensure the outcome of the amendment process is through an undue influence or
interference with that process.

While the MOA-AD would not amount to an international agreement or unilateral declaration binding
on the Philippines under international law, respondents' act of guaranteeing amendments is, by
itself, already a constitutional violation that renders the MOA-AD fatally defective.

WHEREFORE, respondents' motion to dismiss is DENIED. The main and intervening petitions are
GIVEN DUE COURSE and hereby GRANTED.

The Memorandum of Agreement on the Ancestral Domain Aspect of the GRP-MILF Tripoli
Agreement on Peace of 2001 is declared contrary to law and the Constitution.

SO ORDERED.
G.R. No. 91649 May 14, 1991

ATTORNEYS HUMBERTO BASCO, EDILBERTO BALCE, SOCRATES MARANAN AND

LORENZO SANCHEZ,petitioners,
vs.
PHILIPPINE AMUSEMENTS AND GAMING CORPORATION (PAGCOR), respondent.

H.B. Basco & Associates for petitioners.

Valmonte Law Offices collaborating counsel for petitioners.
Aguirre, Laborte and Capule for respondent PAGCOR.

PARAS, J.:

A TV ad proudly announces:

"The new PAGCOR — responding through responsible gaming."

But the petitioners think otherwise, that is why, they filed the instant petition seeking to annul the
Philippine Amusement and Gaming Corporation (PAGCOR) Charter — PD 1869, because it is
allegedly contrary to morals, public policy and order, and because —

A. It constitutes a waiver of a right prejudicial to a third person with a right recognized by law.
It waived the Manila City government's right to impose taxes and license fees, which is
recognized by law;

B. For the same reason stated in the immediately preceding paragraph, the law has intruded
into the local government's right to impose local taxes and license fees. This, in
contravention of the constitutionally enshrined principle of local autonomy;

C. It violates the equal protection clause of the constitution in that it legalizes PAGCOR —
conducted gambling, while most other forms of gambling are outlawed, together with
prostitution, drug trafficking and other vices;

D. It violates the avowed trend of the Cory government away from monopolistic and crony
economy, and toward free enterprise and privatization. (p. 2, Amended Petition; p. 7, Rollo)

In their Second Amended Petition, petitioners also claim that PD 1869 is contrary to the declared
national policy of the "new restored democracy" and the people's will as expressed in the 1987
Constitution. The decree is said to have a "gambling objective" and therefore is contrary to Sections
11, 12 and 13 of Article II, Sec. 1 of Article VIII and Section 3 (2) of Article XIV, of the present
Constitution (p. 3, Second Amended Petition; p. 21, Rollo).

The procedural issue is whether petitioners, as taxpayers and practicing lawyers (petitioner Basco
being also the Chairman of the Committee on Laws of the City Council of Manila), can question and
seek the annulment of PD 1869 on the alleged grounds mentioned above.

The Philippine Amusements and Gaming Corporation (PAGCOR) was created by virtue of P.D.
1067-A dated January 1, 1977 and was granted a franchise under P.D. 1067-B also dated January
1, 1977 "to establish, operate and maintain gambling casinos on land or water within the territorial
jurisdiction of the Philippines." Its operation was originally conducted in the well known floating
casino "Philippine Tourist." The operation was considered a success for it proved to be a potential
source of revenue to fund infrastructure and socio-economic projects, thus, P.D. 1399 was passed
on June 2, 1978 for PAGCOR to fully attain this objective.

Subsequently, on July 11, 1983, PAGCOR was created under P.D. 1869 to enable the Government
to regulate and centralize all games of chance authorized by existing franchise or permitted by law,
under the following declared policy —

Sec. 1. Declaration of Policy. — It is hereby declared to be the policy of the State to

centralize and integrate all games of chance not heretofore authorized by existing franchises
or permitted by law in order to attain the following objectives:

(a) To centralize and integrate the right and authority to operate and conduct games of
chance into one corporate entity to be controlled, administered and supervised by the
Government.

(b) To establish and operate clubs and casinos, for amusement and recreation, including
sports gaming pools, (basketball, football, lotteries, etc.) and such other forms of amusement
and recreation including games of chance, which may be allowed by law within the territorial
jurisdiction of the Philippines and which will: (1) generate sources of additional revenue to
fund infrastructure and socio-civic projects, such as flood control programs, beautification,
sewerage and sewage projects, Tulungan ng Bayan Centers, Nutritional Programs,
Population Control and such other essential public services; (2) create recreation and
integrated facilities which will expand and improve the country's existing tourist attractions;
and (3) minimize, if not totally eradicate, all the evils, malpractices and corruptions that are
normally prevalent on the conduct and operation of gambling clubs and casinos without
direct government involvement. (Section 1, P.D. 1869)

To attain these objectives PAGCOR is given territorial jurisdiction all over the Philippines. Under its
Charter's repealing clause, all laws, decrees, executive orders, rules and regulations, inconsistent
therewith, are accordingly repealed, amended or modified.

It is reported that PAGCOR is the third largest source of government revenue, next to the Bureau of
Internal Revenue and the Bureau of Customs. In 1989 alone, PAGCOR earned P3.43 Billion, and
directly remitted to the National Government a total of P2.5 Billion in form of franchise tax,
government's income share, the President's Social Fund and Host Cities' share. In addition,
PAGCOR sponsored other socio-cultural and charitable projects on its own or in cooperation with
various governmental agencies, and other private associations and organizations. In its 3 1/2 years
of operation under the present administration, PAGCOR remitted to the government a total of P6.2
Billion. As of December 31, 1989, PAGCOR was employing 4,494 employees in its nine (9) casinos
nationwide, directly supporting the livelihood of Four Thousand Four Hundred Ninety-Four (4,494)
families.

But the petitioners, are questioning the validity of P.D. No. 1869. They allege that the same is "null
and void" for being "contrary to morals, public policy and public order," monopolistic and tends
toward "crony economy", and is violative of the equal protection clause and local autonomy as well
as for running counter to the state policies enunciated in Sections 11 (Personal Dignity and Human
Rights), 12 (Family) and 13 (Role of Youth) of Article II, Section 1 (Social Justice) of Article XIII and
Section 2 (Educational Values) of Article XIV of the 1987 Constitution.
This challenge to P.D. No. 1869 deserves a searching and thorough scrutiny and the most deliberate
consideration by the Court, involving as it does the exercise of what has been described as "the
highest and most delicate function which belongs to the judicial department of the government."
(State v. Manuel, 20 N.C. 144; Lozano v. Martinez, 146 SCRA 323).

As We enter upon the task of passing on the validity of an act of a co-equal and coordinate branch of
the government We need not be reminded of the time-honored principle, deeply ingrained in our
jurisprudence, that a statute is presumed to be valid. Every presumption must be indulged in favor of
its constitutionality. This is not to say that We approach Our task with diffidence or timidity. Where it
is clear that the legislature or the executive for that matter, has over-stepped the limits of its authority
under the constitution, We should not hesitate to wield the axe and let it fall heavily, as fall it must,
on the offending statute (Lozano v. Martinez, supra).

In Victoriano v. Elizalde Rope Workers' Union, et al, 59 SCRA 54, the Court thru Mr. Justice Zaldivar
underscored the —

. . . thoroughly established principle which must be followed in all cases where questions of
constitutionality as obtain in the instant cases are involved. All presumptions are indulged in
favor of constitutionality; one who attacks a statute alleging unconstitutionality must prove its
invalidity beyond a reasonable doubt; that a law may work hardship does not render it
unconstitutional; that if any reasonable basis may be conceived which supports the statute, it
will be upheld and the challenger must negate all possible basis; that the courts are not
concerned with the wisdom, justice, policy or expediency of a statute and that a liberal
interpretation of the constitution in favor of the constitutionality of legislation should be
adopted. (Danner v. Hass, 194 N.W. 2nd534, 539; Spurbeck v. Statton, 106 N.W. 2nd 660,
663; 59 SCRA 66; see also e.g. Salas v. Jarencio, 46 SCRA 734, 739 [1970]; Peralta v.
Commission on Elections, 82 SCRA 30, 55 [1978]; and Heirs of Ordona v. Reyes, 125 SCRA
220, 241-242 [1983] cited in Citizens Alliance for Consumer Protection v. Energy Regulatory
Board, 162 SCRA 521, 540)

Of course, there is first, the procedural issue. The respondents are questioning the legal personality
of petitioners to file the instant petition.

Considering however the importance to the public of the case at bar, and in keeping with the Court's
duty, under the 1987 Constitution, to determine whether or not the other branches of government
have kept themselves within the limits of the Constitution and the laws and that they have not
abused the discretion given to them, the Court has brushed aside technicalities of procedure and
has taken cognizance of this petition. (Kapatiran ng mga Naglilingkod sa Pamahalaan ng Pilipinas
Inc. v. Tan, 163 SCRA 371)

With particular regard to the requirement of proper party as applied in the cases before us,
We hold that the same is satisfied by the petitioners and intervenors because each of them
has sustained or is in danger of sustaining an immediate injury as a result of the acts or
measures complained of. And even if, strictly speaking they are not covered by the definition,
it is still within the wide discretion of the Court to waive the requirement and so remove the
impediment to its addressing and resolving the serious constitutional questions raised.

In the first Emergency Powers Cases, ordinary citizens and taxpayers were allowed to
question the constitutionality of several executive orders issued by President Quirino
although they were involving only an indirect and general interest shared in common with the
public. The Court dismissed the objection that they were not proper parties and ruled that
"the transcendental importance to the public of these cases demands that they be settled
 promptly and definitely, brushing aside, if we must technicalities of procedure." We have
since then applied the exception in many other cases. (Association of Small Landowners in
the Philippines, Inc. v. Sec. of Agrarian Reform, 175 SCRA 343).

Having disposed of the procedural issue, We will now discuss the substantive issues raised.

Gambling in all its forms, unless allowed by law, is generally prohibited. But the prohibition of
gambling does not mean that the Government cannot regulate it in the exercise of its police power.

The concept of police power is well-established in this jurisdiction. It has been defined as the "state
authority to enact legislation that may interfere with personal liberty or property in order to promote
the general welfare." (Edu v. Ericta, 35 SCRA 481, 487) As defined, it consists of (1) an imposition or
restraint upon liberty or property, (2) in order to foster the common good. It is not capable of an exact
definition but has been, purposely, veiled in general terms to underscore its all-comprehensive
embrace. (Philippine Association of Service Exporters, Inc. v. Drilon, 163 SCRA 386).

Its scope, ever-expanding to meet the exigencies of the times, even to anticipate the future where it
could be done, provides enough room for an efficient and flexible response to conditions and
circumstances thus assuming the greatest benefits. (Edu v. Ericta, supra)

It finds no specific Constitutional grant for the plain reason that it does not owe its origin to the
charter. Along with the taxing power and eminent domain, it is inborn in the very fact of statehood
and sovereignty. It is a fundamental attribute of government that has enabled it to perform the most
vital functions of governance. Marshall, to whom the expression has been credited, refers to it
succinctly as the plenary power of the state "to govern its citizens". (Tribe, American Constitutional
Law, 323, 1978). The police power of the State is a power co-extensive with self-protection and is
most aptly termed the "law of overwhelming necessity." (Rubi v. Provincial Board of Mindoro, 39 Phil.
660, 708) It is "the most essential, insistent, and illimitable of powers." (Smith Bell & Co. v. National,
40 Phil. 136) It is a dynamic force that enables the state to meet the agencies of the winds of
change.

What was the reason behind the enactment of P.D. 1869?

P.D. 1869 was enacted pursuant to the policy of the government to "regulate and centralize thru an
appropriate institution all games of chance authorized by existing franchise or permitted by law" (1st
whereas clause, PD 1869). As was subsequently proved, regulating and centralizing gambling
operations in one corporate entity — the PAGCOR, was beneficial not just to the Government but to
society in general. It is a reliable source of much needed revenue for the cash strapped
Government. It provided funds for social impact projects and subjected gambling to "close scrutiny,
regulation, supervision and control of the Government" (4th Whereas Clause, PD 1869). With the
creation of PAGCOR and the direct intervention of the Government, the evil practices and
corruptions that go with gambling will be minimized if not totally eradicated. Public welfare, then, lies
at the bottom of the enactment of PD 1896.

Petitioners contend that P.D. 1869 constitutes a waiver of the right of the City of Manila to impose
taxes and legal fees; that the exemption clause in P.D. 1869 is violative of the principle of local
autonomy. They must be referring to Section 13 par. (2) of P.D. 1869 which exempts PAGCOR, as
the franchise holder from paying any "tax of any kind or form, income or otherwise, as well as fees,
charges or levies of whatever nature, whether National or Local."

(2) Income and other taxes. — a) Franchise Holder: No tax of any kind or form, income or
otherwise as well as fees, charges or levies of whatever nature, whether National or Local,
 shall be assessed and collected under this franchise from the Corporation; nor shall any form
or tax or charge attach in any way to the earnings of the Corporation, except a franchise tax
of five (5%) percent of the gross revenues or earnings derived by the Corporation from its
operations under this franchise. Such tax shall be due and payable quarterly to the National
Government and shall be in lieu of all kinds of taxes, levies, fees or assessments of any kind,
nature or description, levied, established or collected by any municipal, provincial or national
government authority (Section 13 [2]).

Their contention stated hereinabove is without merit for the following reasons:

(a) The City of Manila, being a mere Municipal corporation has no inherent right to impose taxes
(Icard v. City of Baguio, 83 Phil. 870; City of Iloilo v. Villanueva, 105 Phil. 337; Santos v. Municipality
of Caloocan, 7 SCRA 643). Thus, "the Charter or statute must plainly show an intent to confer that
power or the municipality cannot assume it" (Medina v. City of Baguio, 12 SCRA 62). Its "power to
tax" therefore must always yield to a legislative act which is superior having been passed upon by
the state itself which has the "inherent power to tax" (Bernas, the Revised [1973] Philippine
Constitution, Vol. 1, 1983 ed. p. 445).

(b) The Charter of the City of Manila is subject to control by Congress. It should be stressed that
"municipal corporations are mere creatures of Congress" (Unson v. Lacson, G.R. No. 7909, January
18, 1957) which has the power to "create and abolish municipal corporations" due to its "general
legislative powers" (Asuncion v. Yriantes, 28 Phil. 67; Merdanillo v. Orandia, 5 SCRA 541).
Congress, therefore, has the power of control over Local governments (Hebron v. Reyes, G.R. No.
9124, July 2, 1950). And if Congress can grant the City of Manila the power to tax certain matters, it
can also provide for exemptions or even take back the power.

(c) The City of Manila's power to impose license fees on gambling, has long been revoked. As early
as 1975, the power of local governments to regulate gambling thru the grant of "franchise, licenses
or permits" was withdrawn by P.D. No. 771 and was vested exclusively on the National Government,
thus:

Sec. 1. Any provision of law to the contrary notwithstanding, the authority of chartered cities
and other local governments to issue license, permit or other form of franchise to operate,
maintain and establish horse and dog race tracks, jai-alai and other forms of gambling is
hereby revoked.

Sec. 2. Hereafter, all permits or franchises to operate, maintain and establish, horse and dog
race tracks, jai-alai and other forms of gambling shall be issued by the national government
upon proper application and verification of the qualification of the applicant . . .

Therefore, only the National Government has the power to issue "licenses or permits" for the
operation of gambling. Necessarily, the power to demand or collect license fees which is a
consequence of the issuance of "licenses or permits" is no longer vested in the City of Manila.

(d) Local governments have no power to tax instrumentalities of the National Government. PAGCOR
is a government owned or controlled corporation with an original charter, PD 1869. All of its shares
of stocks are owned by the National Government. In addition to its corporate powers (Sec. 3, Title II,
PD 1869) it also exercises regulatory powers thus:

Sec. 9. Regulatory Power. — The Corporation shall maintain a Registry of the affiliated
entities, and shall exercise all the powers, authority and the responsibilities vested in the
Securities and Exchange Commission over such affiliating entities mentioned under the
 preceding section, including, but not limited to amendments of Articles of Incorporation and
By-Laws, changes in corporate term, structure, capitalization and other matters concerning
the operation of the affiliated entities, the provisions of the Corporation Code of the
Philippines to the contrary notwithstanding, except only with respect to original incorporation.

PAGCOR has a dual role, to operate and to regulate gambling casinos. The latter role is
governmental, which places it in the category of an agency or instrumentality of the Government.
Being an instrumentality of the Government, PAGCOR should be and actually is exempt from local
taxes. Otherwise, its operation might be burdened, impeded or subjected to control by a mere Local
government.

The states have no power by taxation or otherwise, to retard, impede, burden or in any
manner control the operation of constitutional laws enacted by Congress to carry into
execution the powers vested in the federal government. (MC Culloch v. Marland, 4 Wheat
316, 4 L Ed. 579)

This doctrine emanates from the "supremacy" of the National Government over local governments.

Justice Holmes, speaking for the Supreme Court, made reference to the entire absence of
power on the part of the States to touch, in that way (taxation) at least, the instrumentalities
of the United States (Johnson v. Maryland, 254 US 51) and it can be agreed that no state or
political subdivision can regulate a federal instrumentality in such a way as to prevent it from
consummating its federal responsibilities, or even to seriously burden it in the
accomplishment of them. (Antieau, Modern Constitutional Law, Vol. 2, p. 140, emphasis
supplied)

Otherwise, mere creatures of the State can defeat National policies thru extermination of what local
authorities may perceive to be undesirable activities or enterprise using the power to tax as "a tool
for regulation" (U.S. v. Sanchez, 340 US 42).

The power to tax which was called by Justice Marshall as the "power to destroy" (Mc Culloch v.
Maryland, supra) cannot be allowed to defeat an instrumentality or creation of the very entity which
has the inherent power to wield it.

(e) Petitioners also argue that the Local Autonomy Clause of the Constitution will be violated by P.D.
1869. This is a pointless argument. Article X of the 1987 Constitution (on Local Autonomy) provides:

Sec. 5. Each local government unit shall have the power to create its own source of revenue
and to levy taxes, fees, and other charges subject to such guidelines and limitation as the
congress may provide, consistent with the basic policy on local autonomy. Such taxes, fees
and charges shall accrue exclusively to the local government. (emphasis supplied)

The power of local government to "impose taxes and fees" is always subject to "limitations" which
Congress may provide by law. Since PD 1869 remains an "operative" law until "amended, repealed
or revoked" (Sec. 3, Art. XVIII, 1987 Constitution), its "exemption clause" remains as an exception to
the exercise of the power of local governments to impose taxes and fees. It cannot therefore be
violative but rather is consistent with the principle of local autonomy.

Besides, the principle of local autonomy under the 1987 Constitution simply means "decentralization"
(III Records of the 1987 Constitutional Commission, pp. 435-436, as cited in Bernas, The
Constitution of the Republic of the Philippines, Vol. II, First Ed., 1988, p. 374). It does not make local
governments sovereign within the state or an "imperium in imperio."
 Local Government has been described as a political subdivision of a nation or state which is
constituted by law and has substantial control of local affairs. In a unitary system of
government, such as the government under the Philippine Constitution, local governments
can only be an intra sovereign subdivision of one sovereign nation, it cannot be
an imperium in imperio. Local government in such a system can only mean a measure of
decentralization of the function of government. (emphasis supplied)

As to what state powers should be "decentralized" and what may be delegated to local government
units remains a matter of policy, which concerns wisdom. It is therefore a political question. (Citizens
Alliance for Consumer Protection v. Energy Regulatory Board, 162 SCRA 539).

What is settled is that the matter of regulating, taxing or otherwise dealing with gambling is a State
concern and hence, it is the sole prerogative of the State to retain it or delegate it to local
governments.

As gambling is usually an offense against the State, legislative grant or express charter
power is generally necessary to empower the local corporation to deal with the subject. . . .
In the absence of express grant of power to enact, ordinance provisions on this subject
which are inconsistent with the state laws are void. (Ligan v. Gadsden, Ala App. 107 So. 733
Ex-Parte Solomon, 9, Cals. 440, 27 PAC 757 following in re Ah You, 88 Cal. 99, 25 PAC
974, 22 Am St. Rep. 280, 11 LRA 480, as cited in Mc Quinllan Vol. 3 Ibid, p. 548, emphasis
supplied)

Petitioners next contend that P.D. 1869 violates the equal protection clause of the Constitution,
because "it legalized PAGCOR — conducted gambling, while most gambling are outlawed together
with prostitution, drug trafficking and other vices" (p. 82, Rollo).

We, likewise, find no valid ground to sustain this contention. The petitioners' posture ignores the
well-accepted meaning of the clause "equal protection of the laws." The clause does not preclude
classification of individuals who may be accorded different treatment under the law as long as the
classification is not unreasonable or arbitrary (Itchong v. Hernandez, 101 Phil. 1155). A law does not
have to operate in equal force on all persons or things to be conformable to Article III, Section 1 of
the Constitution (DECS v. San Diego, G.R. No. 89572, December 21, 1989).

The "equal protection clause" does not prohibit the Legislature from establishing classes of
individuals or objects upon which different rules shall operate (Laurel v. Misa, 43 O.G. 2847). The
Constitution does not require situations which are different in fact or opinion to be treated in law as
though they were the same (Gomez v. Palomar, 25 SCRA 827).

Just how P.D. 1869 in legalizing gambling conducted by PAGCOR is violative of the equal protection
is not clearly explained in the petition. The mere fact that some gambling activities like cockfighting
(P.D 449) horse racing (R.A. 306 as amended by RA 983), sweepstakes, lotteries and races (RA
1169 as amended by B.P. 42) are legalized under certain conditions, while others are prohibited,
does not render the applicable laws, P.D. 1869 for one, unconstitutional.

If the law presumably hits the evil where it is most felt, it is not to be overthrown because
there are other instances to which it might have been applied. (Gomez v. Palomar, 25 SCRA
827)

The equal protection clause of the 14th Amendment does not mean that all occupations
called by the same name must be treated the same way; the state may do what it can to
prevent which is deemed as evil and stop short of those cases in which harm to the few
 concerned is not less than the harm to the public that would insure if the rule laid down were
made mathematically exact. (Dominican Hotel v. Arizona, 249 US 2651).

Anent petitioners' claim that PD 1869 is contrary to the "avowed trend of the Cory Government away
from monopolies and crony economy and toward free enterprise and privatization" suffice it to state
that this is not a ground for this Court to nullify P.D. 1869. If, indeed, PD 1869 runs counter to the
government's policies then it is for the Executive Department to recommend to Congress its repeal
or amendment.

The judiciary does not settle policy issues. The Court can only declare what the law is and
not what the law should be. Under our system of government, policy issues are within the
1âw phi1

domain of the political branches of government and of the people themselves as the
repository of all state power. (Valmonte v. Belmonte, Jr., 170 SCRA 256).

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

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

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

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

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

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

As this Court held in Citizens' Alliance for Consumer Protection v. Energy Regulatory Board, 162
SCRA 521 —
 Presidential Decree No. 1956, as amended by Executive Order No. 137 has, in any case, in
its favor the presumption of validity and constitutionality which petitioners Valmonte and the
KMU have not overturned. Petitioners have not undertaken to identify the provisions in the
Constitution which they claim to have been violated by that statute. This Court, however, is
not compelled to speculate and to imagine how the assailed legislation may possibly offend
some provision of the Constitution. The Court notes, further, in this respect that petitioners
have in the main put in question the wisdom, justice and expediency of the establishment of
the OPSF, issues which are not properly addressed to this Court and which this Court may
not constitutionally pass upon. Those issues should be addressed rather to the political
departments of government: the President and the Congress.

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

WHEREFORE, the petition is DISMISSED for lack of merit.

SO ORDERED.

Fernan, C.J., Narvasa, Gutierrez, Jr., Cruz, Feliciano, Gancayco, Bidin, Sarmiento, Griño-Aquino,
Medialdea, Regalado and Davide, Jr., JJ., concur.

Separate Opinions

PADILLA, J., concurring:

I concur in the result of the learned decision penned by my brother Mr. Justice Paras. This means
that I agree with the decision insofar as it holds that the prohibition, control, and regulation of the
entire activity known as gambling properly pertain to "state policy." It is, therefore, the political
departments of government, namely, the legislative and the executive that should decide on what
government should do in the entire area of gambling, and assume full responsibility to the people for
such policy.

The courts, as the decision states, cannot inquire into the wisdom, morality or expediency of policies
adopted by the political departments of government in areas which fall within their authority, except
only when such policies pose a clear and present danger to the life, liberty or property of the
individual. This case does not involve such a factual situation.

However, I hasten to make of record that I do not subscribe to gambling in any form. It demeans the
human personality, destroys self-confidence and eviscerates one's self-respect, which in the long
run will corrode whatever is left of the Filipino moral character. Gambling has wrecked and will
continue to wreck families and homes; it is an antithesis to individual reliance and reliability as well
as personal industry which are the touchstones of real economic progress and national
development.

Gambling is reprehensible whether maintained by government or privatized. The revenues realized

by the government out of "legalized" gambling will, in the long run, be more than offset and negated
by the irreparable damage to the people's moral values.

Also, the moral standing of the government in its repeated avowals against "illegal gambling" is
fatally flawed and becomes untenable when it itself engages in the very activity it seeks to eradicate.

One can go through the Court's decision today and mentally replace the activity referred to therein
as gambling, which is legal only because it is authorized by law and run by the government, with the
activity known as prostitution. Would prostitution be any less reprehensible were it to be authorized
by law, franchised, and "regulated" by the government, in return for the substantial revenues it would
yield the government to carry out its laudable projects, such as infrastructure and social
amelioration? The question, I believe, answers itself. I submit that the sooner the legislative
department outlaws all forms of gambling, as a fundamental state policy, and the sooner the
executive implements such policy, the better it will be for the nation.

Melencio-Herrera, J., concur.

 [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:
I

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.
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." 11Certainly, 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 18specified therein.

It requires the autonomous regional governments to "undertake all internal administrative matters for
the respective regions," 19 except to "act on matters which are within the jurisdiction and competence
of the National Government," 20 "which include, but are not limited to, the following:

(1) National defense and security;

(2) Foreign relations;

(3) Foreign trade;

(4) Currency, monetary affairs, foreign exchange, banking and quasi-banking, and
external borrowing,

(5) Disposition, exploration, development, exploitation or utilization of all natural

resources;

(6) Air and sea transport

 (7) Postal matters and telecommunications;

(8) Customs and quarantine;

(9) Immigration and deportation;

(10) Citizenship and naturalization;

(11) National economic, social and educational planning; and

(12) General auditing. 21

In relation to the central government, it provides that "[t]he President shall have the power of general
supervision and control over the Autonomous Regions ..." 22

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

decentralization of administration when the central government delegates administrative powers to
political subdivisions in order to broaden the base of government power and in the process to make
local governments "more responsive and accountable," 23 "and ensure their fullest development as
self-reliant communities and make them more effective partners in the pursuit of national
development and social progress." 24 At the same time, it relieves the central government of the
burden of managing local affairs and enables it to concentrate on national concerns. The President
exercises "general supervision" 25 over them, but only to "ensure that local affairs are administered
according to law." 26 He has no control over their acts in the sense that he can substitute their
judgments with his own. 27

Decentralization of power, on the other hand, involves an abdication of political power in the favor of
local governments units declare to be autonomous . In that case, the autonomous government is
free to chart its own destiny and shape its future with minimum intervention from central authorities.
According to a constitutional author, decentralization of power amounts to "self-immolation," since in
that event, the autonomous government becomes accountable not to the central authorities but to its
constituency. 28

But the question of whether or not the grant of autonomy Muslim Mindanao under the 1987
Constitution involves, truly, an effort to decentralize power rather than mere administration is a
question foreign to this petition, since what is involved herein is a local government unit constituted
prior to the ratification of the present Constitution. Hence, the Court will not resolve that controversy
now, in this case, since no controversy in fact exists. We will resolve it at the proper time and in the
proper case.

Under the 1987 Constitution, local government units enjoy autonomy in these two senses, thus:

Section 1. The territorial and political subdivisions of the Republic of the Philippines
are the provinces, cities, municipalities, and barangays. Here shall be autonomous
regions in Muslim Mindanao ,and the Cordilleras as hereinafter provided. 29

Sec. 2. The territorial and political subdivisions shall enjoy local autonomy. 30

xxx xxx xxx

 See. 15. Mere shall be created autonomous regions in Muslim Mindanao and in the
Cordilleras consisting of provinces, cities, municipalities, and geographical areas
sharing common and distinctive historical and cultural heritage, economic and social
structures, and other relevant characteristics within the framework of this Constitution
and the national sovereignty as well as territorial integrity of the Republic of the
Philippines. 31

An autonomous government that enjoys autonomy of the latter category [CONST. (1987), art. X,
sec. 15.] is subject alone to the decree of the organic act creating it and accepted principles on the
effects and limits of "autonomy." On the other hand, an autonomous government of the former class
is, as we noted, under the supervision of the national government acting through the President (and
the Department of Local Government). 32 If the Sangguniang Pampook (of Region XII), then, is
autonomous in the latter sense, its acts are, debatably beyond the domain of this Court in perhaps
the same way that the internal acts, say, of the Congress of the Philippines are beyond our
jurisdiction. But if it is autonomous in the former category only, it comes unarguably under our
jurisdiction. An examination of the very Presidential Decree creating the autonomous governments
of Mindanao persuades us that they were never meant to exercise autonomy in the second sense,
that is, in which the central government commits an act of self-immolation. Presidential Decree No.
1618, in the first place, mandates that "[t]he President shall have the power of general supervision
and control over Autonomous Regions."33 In the second place, the Sangguniang Pampook, their
legislative arm, is made to discharge chiefly administrative services, thus:

SEC. 7. Powers of the Sangguniang Pampook. The Sangguniang Pampook shall

exercise local legislative powers over regional affairs within the framework of national
development plans, policies and goals, in the following areas:

(1) Organization of regional administrative system;

(2) Economic, social and cultural development of the Autonomous Region;

(3) Agricultural, commercial and industrial programs for the Autonomous Region;

(4) Infrastructure development for the Autonomous Region;

(5) Urban and rural planning for the Autonomous Region;

(6) Taxation and other revenue-raising measures as provided for in this Decree;

(7) Maintenance, operation and administration of schools established by the

Autonomous Region;

(8) Establishment, operation and maintenance of health, welfare and other social
services, programs and facilities;

(9) Preservation and development of customs, traditions, languages and culture

indigenous to the Autonomous Region; and

(10) Such other matters as may be authorized by law,including the enactment of

such measures as may be necessary for the promotion of the general welfare of the
people in the Autonomous Region.
 The President shall exercise such powers as may be necessary to assure that
enactment and acts of the Sangguniang Pampook and the Lupong Tagapagpaganap
ng Pook are in compliance with this Decree, national legislation, policies, plans and
programs.

The Sangguniang Pampook shall maintain liaison with the Batasang Pambansa. 34

Hence, we assume jurisdiction. And if we can make an inquiry in the validity of the expulsion in
question, with more reason can we review the petitioner's removal as Speaker.

Briefly, the petitioner assails the legality of his ouster as Speaker on the grounds that: (1) the
Sanggunian, in convening on November 2 and 5, 1987 (for the sole purpose of declaring the office of
the Speaker vacant), did so in violation of the Rules of the Sangguniang Pampook since the
Assembly was then on recess; and (2) assuming that it was valid, his ouster was ineffective
nevertheless for lack of quorum.

Upon the facts presented, we hold that the November 2 and 5, 1987 sessions were invalid. It is true
that under Section 31 of the Region XII Sanggunian Rules, "[s]essions shall not be suspended or
adjourned except by direction of the Sangguniang Pampook," 35 but it provides likewise that "the
Speaker may, on [sic] his discretion, declare a recess of "short intervals." 36 Of course, there is
disagreement between the protagonists as to whether or not the recess called by the petitioner
effective November 1 through 15, 1987 is the "recess of short intervals" referred to; the petitioner
says that it is while the respondents insist that, to all intents and purposes, it was an adjournment
and that "recess" as used by their Rules only refers to "a recess when arguments get heated up so
that protagonists in a debate can talk things out informally and obviate dissenssion [sic] and
disunity. 37 The Court agrees with the respondents on this regard, since clearly, the Rules speak of
"short intervals." Secondly, the Court likewise agrees that the Speaker could not have validly called a
recess since the Assembly had yet to convene on November 1, the date session opens under the
same Rules. 38 Hence, there can be no recess to speak of that could possibly interrupt any session.
But while this opinion is in accord with the respondents' own, we still invalidate the twin sessions in
question, since at the time the petitioner called the "recess," it was not a settled matter whether or
not he could. do so. In the second place, the invitation tendered by the Committee on Muslim Affairs
of the House of Representatives provided a plausible reason for the intermission sought. Thirdly,
assuming that a valid recess could not be called, it does not appear that the respondents called his
attention to this mistake. What appears is that instead, they opened the sessions themselves behind
his back in an apparent act of mutiny. Under the circumstances, we find equity on his side. For this
reason, we uphold the "recess" called on the ground of good faith.

It does not appear to us, moreover, that the petitioner had resorted to the aforesaid "recess" in order
to forestall the Assembly from bringing about his ouster. This is not apparent from the pleadings
before us. We are convinced that the invitation was what precipitated it.

In holding that the "recess" in question is valid, we are not to be taken as establishing a precedent,
since, as we said, a recess can not be validly declared without a session having been first opened.
In upholding the petitioner herein, we are not giving him a carte blanche to order recesses in the
future in violation of the Rules, or otherwise to prevent the lawful meetings thereof.

Neither are we, by this disposition, discouraging the Sanggunian from reorganizing itself pursuant to
its lawful prerogatives. Certainly, it can do so at the proper time. In the event that be petitioner
should initiate obstructive moves, the Court is certain that it is armed with enough coercive remedies
to thwart them. 39
In view hereof, we find no need in dwelling on the issue of quorum.

WHEREFORE, premises considered, the petition is GRANTED. The Sangguniang Pampook,

Region XII, is ENJOINED to (1) REINSTATE the petitioner as Member, Sangguniang Pampook,
Region XII; and (2) REINSTATE him as Speaker thereof. No costs.

SO ORDERED.
 [G.R. No. 149848. November 25, 2004]

ARSADI M. DISOMANGCOP and RAMIR M. DIMALOTANG, petitioners,

vs. THE SECRETARY OF THE DEPARTMENT OF PUBLIC
WORKS AND HIGHWAYS SIMEON A. DATUMANONG and THE
SECRETARY OF BUDGET and MANAGEMENT EMILIA T.
BONCODIN, respondents.

DECISION
TINGA, J.:

At stake in the present case is the fate of regional autonomy for Muslim
Mindanao which is the epoch-making, Constitution-based project for achieving
national unity in diversity.
Challenged in the instant petition for certiorari, prohibition and mandamus
with prayer for a temporary restraining order and/or writ of preliminary
injunction (Petition) are the constitutionality and validity of Republic Act No.
[1]

8999 (R.A. 8999), entitled An Act Establishing An Engineering District in the

[2]

First District of the Province of Lanao del Sur and Appropriating Funds
Therefor, and Department of Public Works and Highways (DPWH)
Department Order No. 119 (D.O. 119) on the subject, Creation of Marawi
[3]

Sub-District Engineering Office.

The Background
The uncontested legal and factual antecedents of the case follow.
For the first time in its history after three Constitutions, the Philippines
ordained the establishment of regional autonomy with the adoption of the
1987 Constitution. Sections 1 and 15, Article X mandate the creation of
[4]

autonomous regions in Muslim Mindanao and in the Cordilleras. Section 15

specifically provides that [t]here shall be created autonomous regions in
Muslim Mindanao and in the Cordilleras consisting of provinces, cities,
municipalities, and geographical areas sharing common and distinctive
historical and cultural heritage, economic and social structures, and other
relevant characteristics within the framework of this Constitution and the
national sovereignty as well as territorial integrity of the Republic of the
Philippines. To effectuate this mandate, the Charter devotes a number of
provisions under Article X.[5]
 Pursuant to the constitutional mandate, Republic Act No. 6734 (R.A.
6734), entitled An Act Providing for An Organic Act for the Autonomous
Region in Muslim Mindanao, was enacted and signed into law on 1 August
1989. The law called for the holding of a plebiscite in the provinces of Basilan,
Cotabato, Davao del Sur, Lanao del Norte, Lanao del Sur, Maguindanao,
Palawan, South Cotabato, Sultan Kudarat, Sulu, Tawi-Tawi, Zamboanga del
Norte, and Zamboanga del Sur, and the cities of Cotabato, Dapitan, Dipolog,
General Santos, Iligan, Marawi, Pagadian, Puerto Princesa and
Zamboanga. In the ensuing plebiscite held on 19 November 1989, only four
[6]

(4) provinces voted for the creation of an autonomous region, namely: Lanao
del Sur, Maguindanao, Sulu and Tawi-Tawi. These provinces became the
Autonomous Region in Muslim Mindanao (ARMM). The law contains [7]

elaborate provisions on the powers of the Regional Government and the

areas of jurisdiction which are reserved for the National Government. [8]

In accordance with R.A. 6734, then President Corazon C. Aquino issued

on 12 October 1990, Executive Order No. 426 (E.O. 426), entitled Placing the
Control and Supervision of the Offices of the Department of Public Works and
Highways within the Autonomous Region in Muslim Mindanao under the
Autonomous Regional Government, and for other purposes. Sections 1 to
3 of the Executive Order are its operative provisions.
[9]

ARMM was formally organized on 6 November 1990. President Corazon

C. Aquino flew to Cotabato, the seat of the Regional Government, for the
inauguration. At that point, she had already signed seven (7) Executive
Orders devolving to ARMM the powers of seven (7) cabinet departments,
namely: (1) local government; (2) labor and employment; (3) science and
technology; (4) public works and highways; (5) social welfare and
development; (6) tourism; and (7) environment and national resources. [10]

Nearly nine (9) years later, on 20 May 1999, then Department of Public
Works and Highways (DPWH) Secretary Gregorio R. Vigilar issued D.O. 119
which reads, thus:

Subject: Creation of Marawi Sub-District Engineering Office

Pursuant to Sections 6 and 25 of Executive Order No. 124 dated 30 January

1987, there is hereby created a DPWH Marawi Sub-District Engineering Office
which shall have jurisdiction over all national infrastructure projects and
facilities under the DPWH within Marawi City and the province of Lanao del
Sur. The headquarters of the Marawi Sub-District Engineering Office shall be at the
former quarters of the Marawi City Engineering Office.
Personnel of the above-mentioned Sub-District Engineering Office shall be made up
of employees of the National Government Section of the former Marawi City
Engineering Office who are now assigned with the Iligan City Sub-District
Engineering Office as may be determined by the DPWH Region XII Regional
Director. (Emphasis supplied)

Almost two (2) years later, on 17 January 2001, then President Joseph E.
Estrada approved and signed into law R.A. 8999. The text of the law reads:

AN ACT ESTABLISHING AN ENGINEERING DISTRICT IN THE FIRST

DISTRICT OF THE PROVINCE OF LANAO DEL SUR AND APPROPRIATING
FUNDS THEREFOR

Be it enacted by the Senate and House of Representatives of the Philippines in

Congress assembled:

SECTION 1. The City of Marawi and the municipalities comprising the First District
of the Province of Lanao del Sur are hereby constituted into an engineering district to
be known as the First Engineering District of the Province of Lanao del Sur.

SEC. 2. The office of the engineering district hereby created shall be established in
Marawi City, Province of Lanao del Sur.

SEC. 3. The amount necessary to carry out the provisions of this Act shall be
included in the General Appropriations Act of the year following its enactment
into law. Thereafter, such sums as may be necessary for the maintenance and
continued operation of the engineering district office shall be included in the
annual General Appropriations Act.

SEC. 4. This Act shall take effect upon its approval. (Emphasis supplied)

Congress later passed Republic Act No. 9054 (R.A. 9054), entitled An Act
to Strengthen and Expand the Organic Act for the Autonomous Region in
Muslim Mindanao, Amending for the Purpose Republic Act No. 6734, entitled
An Act Providing for the Autonomous Region in Muslim Mindanao, as
Amended. Like its forerunner, R.A. 9054 contains detailed provisions on the
powers of the Regional Government and the retained areas of governance of
the National Government. [11]

R.A. 9054 lapsed into law on 31 March 2001. It was ratified in a

[12]

plebiscite held on 14 August 2001. The province of Basilan and the City of
Marawi also voted to join ARMM on the same date. R.A. 6734 and R.A. 9054
are collectively referred to as the ARMM Organic Acts.
 On 23 July 2001, petitioners Arsadi M. Disomangcop (Disomangcop) and
Ramir M. Dimalotang (Dimalotang) addressed a petition to then DPWH
Secretary Simeon A. Datumanong, seeking the revocation of D.O. 119 and
the non-implementation of R.A. 8999. No action, however, was taken on the
petition. [13]

Consequently, petitioners Disomangcop and Dimalotang filed the instant

petition, in their capacity as Officer-in-Charge and District Engineer/Engineer
II, respectively, of the First Engineering District of the Department of Public
Works and Highways, Autonomous Region in Muslim Mindanao (DPWH-
ARMM) in Lanao del Sur.
Petitioners seek the following principal reliefs: (1) to annul and set aside
D.O. 119; (2) to prohibit respondent DPWH Secretary from implementing D.O.
119 and R.A. 8999 and releasing funds for public works projects intended for
Lanao del Sur and Marawi City to the Marawi Sub-District Engineering Office
and other administrative regions of DPWH; and (3) to compel the Secretary of
the Department of Budget and Management (DBM) to release all funds for
public works projects intended for Marawi City and the First District of Lanao
del Sur to the DPWH-ARMM First Engineering District in Lanao del Sur only;
and to compel respondent DPWH Secretary to let the DPWH-ARMM First
Engineering District in Lanao del Sur implement all public works projects
within its jurisdictional area.
[14]

The petition includes an urgent application for the issuance of a temporary

restraining order (TRO) and, after hearing, a writ of preliminary injunction, to
enjoin respondent DBM Secretary from releasing funds for public works
projects in Lanao del Sur to entities other than the DPWH-ARMM First
Engineering District in Lanao del Sur, and also to restrain the DPWH
Secretary from allowing others besides the DPWH-ARMM First Engineering
District in Lanao del Sur to implement public works projects in Lanao del Sur.[15]

To support their petition, petitioners allege that D.O. 119 was issued with
grave abuse of discretion and that it violates the constitutional autonomy of
the ARMM. They point out that the challenged Department Order has tasked
the Marawi Sub-District Engineering Office with functions that have already
been devolved to the DPWH-ARMM First Engineering District in Lanao del
Sur.[16]

Petitioners also contend that R.A. 8999 is a piece of legislation that was
not intelligently and thoroughly studied, and that the explanatory note to
House Bill No. 995 (H.B. 995) from which the law originated is questionable.
Petitioners assert as well that prior to the sponsorship of the law, no public
hearing nor consultation with the DPWH-ARMM was made. The House
Committee on Public Works and Highways (Committee) failed to invite a
single official from the affected agency. Finally, petitioners argue that the law
was skillfully timed for signature by former President Joseph E. Estrada during
the pendency of the impeachment proceedings. [17]

In its resolution of 8 October 2001, the Court required respondents to file

their comment. In compliance, respondents DPWH Secretary and DBM
[18]

Secretary, through the Solicitor General, filed on 7 January 2002,

their Comment.
In their Comment, respondents, through the Office of the Solicitor
[19]

General, maintain the validity of D.O. 119, arguing that it was issued in
accordance with Executive Order No. 124 (E.O. 124). In defense of the
[20]

constitutionality of R.A. 8999, they submit that the powers of the autonomous
regions did not diminish the legislative power of Congress. Respondents [21]

also contend that the petitioners have no locus standi or legal standing to
assail the constitutionality of the law and the department order. They note that
petitioners have no personal stake in the outcome of the controversy. [22]

Asserting their locus standi, petitioners in their Memorandum point out [23]

that they will suffer actual injury as a result of the enactments complained of. [24]

Jurisdictional Considerations
First, the jurisdictional predicates.
The 1987 Constitution is explicit in defining the scope of judicial power. It
establishes the authority of the courts to determine in an appropriate action
the validity of acts of the political departments. It speaks of judicial prerogative
in terms of duty.[25]

Jurisprudence has laid down the following requisites for the exercise of
judicial power: First, there must be before the Court an actual case calling for
the exercise of judicial review. Second, the question before the Court must be
ripe for adjudication. Third, the person challenging the validity of the act must
have standing to challenge. Fourth, the question of constitutionality must have
been raised at the earliest opportunity. Fifth, the issue of constitutionality must
be the very lis mota of the case. [26]

In seeking to nullify acts of the legislature and the executive department

on the ground that they contravene the Constitution, the petition no doubt
raises a justiciable controversy. As held in Taada v. Angara, where an action
[27]

of the legislative branch is seriously alleged to have infringed the Constitution,

it becomes not only the right but in fact the duty of the judiciary to settle the
dispute. But in deciding to take jurisdiction over this petition questioning acts
of the political departments of government, the Court will not review the
wisdom, merits, or propriety thereof, but will strike them down only on either of
two grounds: (1) unconstitutionality or illegality and (2) grave abuse of
discretion.
[28]

For an abuse to be grave, the power must be exercised in an arbitrary or

despotic manner by reason of passion or personal hostility. The abuse of
discretion must be patent and gross as to amount to an evasion of a positive
duty, or a virtual refusal to perform the duty enjoined or to act in contemplation
of law. There is grave abuse of discretion when respondent acts in a
capricious or whimsical manner in the exercise of its judgment as to be
equivalent to lack of jurisdiction.
[29]

The challenge to the legal standing of petitioners cannot succeed. Legal

standing or locus standi is defined as a personal and substantial interest in the
case such that the party has sustained or will sustain direct injury as a result
of the governmental act that is being challenged. The term interest means a
material interest, an interest in issue affected by the decree, as distinguished
from a mere interest in the question involved, or a mere incidental interest. [30]

A party challenging the constitutionality of a law, act, or statute must show

not only that the law is invalid, but also that he has sustained or is in
immediate, or imminent danger of sustaining some direct injury as a result of
its enforcement, and not merely that he suffers thereby in some indefinite way.
He must show that he has been, or is about to be, denied some right or
privilege to which he is lawfully entitled, or that he is about to be subjected to
some burdens or penalties by reason of the statute complained of. [31]

But following the new trend, this Court is inclined to take cognizance of a
suit although it does not satisfy the requirement of legal standing when
paramount interests are involved. In several cases, the Court has adopted a
liberal stance on the locus standi of a petitioner where the petitioner is able to
craft an issue of transcendental significance to the people.[32]

In the instant case, petitioner Disomangcop holds the position of Engineer

IV. When he filed this petition, he was the Officer-in-Charge, Office of the
District Engineer of the First Engineering District of DPWH-ARMM, Lanao del
Sur. On the other hand, petitioner Dimalotang is an Engineer II and President
of the rank and file employees also of the First Engineering District of DPWH-
ARMM in Lanao del Sur. Both are charged with the duty and responsibility of
supervising and implementing all public works projects to be undertaken and
being undertaken in Lanao del Sur which is the area of their jurisdiction. [33]

It is thus not far-fetched that the creation of the Marawi Sub-District

Engineering Office under D.O. 119 and the creation of and appropriation of
funds to the First Engineering District of Lanao del Sur as directed under R.A.
8999 will affect the powers, functions and responsibilities of the petitioners
and the DPWH-ARMM. As the two offices have apparently been endowed
with functions almost identical to those of DPWH-ARMM First Engineering
District in Lanao del Sur, it is likely that petitioners are in imminent danger of
being eased out of their duties and, not remotely, even their jobs. Their
material and substantial interests will definitely be prejudiced by the
enforcement of D.O. 119 and R.A. 8999. Such injury is direct and immediate.
Thus, they can legitimately challenge the validity of the enactments subject of
the instant case.
Points of Contention
In the petition before us, petitioners contend that R.A. 8999 and D.O. 119
are unconstitutional and were issued with grave abuse of discretion.
We agree in part.
Republic Act No. 8999
At the outset, let it be made clear that it is not necessary to declare R.A.
No. 8999 unconstitutional for the adjudication of this case. The accepted rule
is that the Court will not resolve a constitutional question unless it is the lis
mota of the case, or if the case can be disposed of or settled on other
grounds. [34]

The plain truth is the challenged law never became operative and was
superseded or repealed by a subsequent enactment.
The ARMM Organic Acts are deemed a part of the regional autonomy
scheme. While they are classified as statutes, the Organic Acts are more than
ordinary statutes because they enjoy affirmation by a plebiscite. Hence, the
[35]

provisions thereof cannot be amended by an ordinary statute, such as R.A.

8999 in this case. The amendatory law has to be submitted to a plebiscite.
We quote excerpts of the deliberations of the Constitutional Commission:

FR. BERNAS. Yes, that is the reason I am bringing this up. This thing involves some
rather far-reaching consequences also in relation to the issue raised by Commissioner
Romulo with respect to federalism. Are we, in effect, creating new categories of laws?
Generally, we have statutes and constitutional provisions. Is this organic act
equivalent to a constitutional provision? If it is going to be equivalent to a
constitutional provision, it would seem to me that the formulation of the provisions of
the organic act will have to be done by the legislature, acting as a constituent
assembly, and therefore, subject to the provisions of the Article on Amendments. That
is the point that I am trying to bring up. In effect, if we opt for federalism, it would
really involve an act of the National Assembly or Congress acting as a constituent
assembly and present amendments to this Constitution, and the end product itself
would be a constitutional provision which would only be amendable according to the
processes indicated in the Constitution.

MR. OPLE. Madam President, may I express my personal opinion in this respect.

I think to require Congress to act as a constituent body before enacting an organic act
would be to raise an autonomous region to the same level as the sovereign people of
the whole country. And I think the powers of the Congress should be quite sufficient
in enacting a law, even if it is now exalted to the level of an organic act for the
purpose of providing a basic law for an autonomous region without having to
transform itself into a constituent assembly. We are dealing still with one subordinate
subdivision of the State even if it is now vested with certain autonomous powers on
which its own legislature can pass laws.

FR. BERNAS. So the questions I have raised so far with respect to this organic act
are: What segment of the population will participate in the plebiscite? In what
capacity would the legislature be acting when it passes this? Will it be a constituent
assembly or merely a legislative body? What is the nature, therefore, of this organic
act in relation to ordinary statutes and the Constitution? Finally, if we are going to
amend this organic act, what process will be followed?

MR. NOLLEDO. May I answer that, please, in the light of what is now appearing in
our report.

First, only the people who are residing in the units composing the regions should be
allowed to participate in the plebiscite. Second, the organic act has the character of a
charter passed by the Congress, not as a constituent assembly, but as an ordinary
legislature and, therefore, the organic act will still be subject to amendments in the
ordinary legislative process as now constituted, unless the Gentlemen has another
purpose.

FR. BERNAS. But with plebiscite again.

MR. NOLLEDO. Those who will participate in the plebiscite are those who are
directly affected, the inhabitants of the units constitutive of the region. (Emphasis
supplied)[36]

Although R.A. 9054 was enacted later, it reaffirmed the imperativeness of

the plebiscite requirement. In fact, R.A. 9054 itself, being the second or later
[37]

ARMM Organic Act, was subjected to and ratified in a plebiscite.

 The first ARMM Organic Act, R.A. 6074, as implemented by E.O. 426,
devolved the functions of the DPWH in the ARMM which includes Lanao del
Sur (minus Marawi City at the time) to the Regional Government. By creating
[38]

an office with previously devolved functions, R.A. 8999, in essence, sought to

amend R.A. 6074. The amendatory law should therefore first obtain the
approval of the people of the ARMM before it could validly take effect. Absent
compliance with this requirement, R.A. 8999 has not even become operative.
From another perspective, R.A. 8999 was repealed and superseded by
R.A. 9054. Where a statute of later date clearly reveals an intention on the
part of the legislature to abrogate a prior act on the subject, that intention must
be given effect.
Of course, the intention to repeal must be clear and manifest. Implied
[39]

repeal by irreconcilable inconsistency takes place when the two statutes cover
the same subject matter; they are clearly inconsistent and incompatible with
each other that they cannot be reconciled or harmonized; and both cannot be
given effect, that is, that one law cannot be enforced without nullifying the
other.[40]

The Court has also held that statutes should be construed in light of the
objective to be achieved and the evil or mischief to be suppressed, and they
should be given such construction as will advance the object, suppress the
mischief and secure the benefits intended. [41]

R.A. 9054 is anchored on the 1987 Constitution. It advances the

constitutional grant of autonomy by detailing the powers of the ARG covering,
among others, Lanao del Sur and Marawi City, one of which is its jurisdiction
over regional urban and rural planning. R.A. 8999, however, ventures to
reestablish the National Governments jurisdiction over infrastructure programs
in Lanao del Sur. R.A. 8999 is patently inconsistent with R.A. 9054, and it
destroys the latter laws objective.
Clearly, R.A. 8999 is antagonistic to and cannot be reconciled with both
ARMM Organic Acts, R.A. 6734 and R.A. 9054. The kernel of the antagonism
and disharmony lies in the regional autonomy which the ARMM Organic Acts
ordain pursuant to the Constitution. On the other hand, R.A. 8999 contravenes
true decentralization which is the essence of regional autonomy.
Regional Autonomy Under
R.A. 6734 and R.A. 9054
The 1987 Constitution mandates regional autonomy to give a bold and
unequivocal answer to the cry for a meaningful, effective and forceful
autonomy. According to Commissioner Jose Nolledo, Chairman of the
[42]
Committee which drafted the provisions, it is an indictment against the status
quo of a unitary system that, to my mind, has ineluctably tied the hands of
progress in our country . . . our varying regional characteristics are factors to
capitalize on to attain national strength through decentralization. [43]

The idea behind the Constitutional provisions for autonomous regions is to

allow the separate development of peoples with distinctive cultures and
traditions. These cultures, as a matter of right, must be allowed to flourish.
[44] [45]

Autonomy, as a national policy, recognizes the wholeness of the Philippine

society in its ethnolinguistic, cultural, and even religious diversities. It strives to
free Philippine society of the strain and wastage caused by the assimilationist
approach. Policies emanating from the legislature are invariably
[46]

assimilationist in character despite channels being open for minority

representation. As a result, democracy becomes an irony to the minority
group. [47]

Several commissioners echoed the pervasive sentiment in the plenary

sessions in their own inimitable way. Thus, Commissioner Blas Ople referred
to the recognition that the Muslim Mindanao and the Cordilleras do not belong
to the dominant national community as the justification for conferring on them
a measure of legal self-sufficiency, meaning self-government, so that they will
flourish politically, economically and culturally, with the hope that after
achieving parity with the rest of the country they would give up their own
autonomous region in favor of joining the national mainstream. For his part,
[48]

the Muslim delegate, Commissioner Ahmad Alonto, spoke of the diversity of

cultures as the framework for nation-building. Finally, excerpts of the
[49]

poignant plea of Commissioner Ponciano Bennagen deserve to be quoted

verbatim:

. . . They see regional autonomy as the answer to their centuries of struggle against
oppression and exploitation. For so long, their names and identities have been
debased. Their ancestral lands have been ransacked for their treasures, for their
wealth. Their cultures have been defiled, their very lives threatened, and worse,
extinguished, all in the name of national development; all in the name of public
interest; all in the name of common good; all in the name of the right to property; all
in the name of Regalian Doctrine; all in the name of national security. These phrases
have meant nothing to our indigenous communities, except for the violation of their
human rights.

...
Honorable Commissioners, we wish to impress upon you the gravity of the decision to
be made by every single one of us in this Commission. We have the overwhelming
support of the Bangsa Moro and the Cordillera Constitution. By this we mean
meaningful and authentic regional autonomy. We propose that we have a separate
Article on the autonomous regions for the Bangsa Moro and Cordillera people clearly
spelled out in this Constitution, instead of prolonging the agony of their vigil and their
struggle. This, too is a plea for national peace. Let us not pass the buck to the
Congress to decide on this. Let us not wash our hands of our responsibility to attain
national unity and peace and to settle this problem and rectify past injustices, once and
for all.
[50]

The need for regional autonomy is more pressing in the case of the
Filipino Muslims and the Cordillera people who have been fighting for it. Their
political struggle highlights their unique cultures and the unresponsiveness of
the unitary system to their aspirations. The Moros struggle for self-
[51]

determination dates as far back as the Spanish conquest in the Philippines.

Even at present, the struggle goes on. [52]

Perforce, regional autonomy is also a means towards solving existing

serious peace and order problems and secessionist movements.
Parenthetically, autonomy, decentralization and regionalization, in
international law, have become politically acceptable answers to intractable
problems of nationalism, separatism, ethnic conflict and threat of secession. [53]

However, the creation of autonomous regions does not signify the

establishment of a sovereignty distinct from that of the Republic, as it can be
installed only within the framework of this Constitution and the national
sovereignty as well as territorial integrity of the Republic of the Philippines. [54]

Regional autonomy is the degree of self-determination exercised by the

local government unit vis--vis the central government.
In international law, the right to self-determination need not be understood
as a right to political separation, but rather as a complex net of legal-political
relations between a certain people and the state authorities. It ensures the
right of peoples to the necessary level of autonomy that would guarantee the
support of their own cultural identity, the establishment of priorities by the
communitys internal decision-making processes and the management of
collective matters by themselves. [55]

If self-determination is viewed as an end in itself reflecting a preference for

homogeneous, independent nation-states, it is incapable of universal
application without massive disruption. However, if self-determination is
viewed as a means to an endthat end being a democratic, participatory
political and economic system in which the rights of individuals and the
identity of minority communities are protectedits continuing validity is more
easily perceived. [56]

Regional autonomy refers to the granting of basic internal government

powers to the people of a particular area or region with least control and
supervision from the central government. [57]

The objective of the autonomy system is to permit determined groups, with

a common tradition and shared social-cultural characteristics, to develop
freely their ways of life and heritage, exercise their rights, and be in charge of
their own business. This is achieved through the establishment of a special
governance regime for certain member communities who choose their own
authorities from within the community and exercise the jurisdictional authority
legally accorded to them to decide internal community affairs. [58]

In the Philippine setting, regional autonomy implies the cultivation of more

positive means for national integration. It would remove the wariness among
the Muslims, increase their trust in the government and pave the way for the
unhampered implementation of the development programs in the
region. Again, even a glimpse of the deliberations of the Constitutional
[59]

Commission could lend a sense of the urgency and the inexorable appeal of
true decentralization:

MR. OPLE. . . . We are writing a Constitution, of course, for generations to come, not
only for the present but for our posterity. There is no harm in recognizing certain vital
pragmatic needs for national peace and solidarity, and the writing of this Constitution
just happens at a time when it is possible for this Commission to help the cause of
peace and reconciliation in Mindanao and the Cordilleras, by taking advantage of a
heaven-sent opportunity. . . .[60]

...

MR. ABUBAKAR. . . . So in order to foreclose and convince the rest of the of the
Philippines that Mindanao autonomy will be granted to them as soon as possible,
more or less, to dissuade these armed men from going outside while Mindanao will be
under the control of the national government, let us establish an autonomous
Mindanao within our effort and capacity to do so within the shortest possible time.
This will be an answer to the Misuari clamor, not only for autonomy but for
independence. [61]

...
MR. OPLE. . . . The reason for this abbreviation of the period for the consideration of
the Congress of the organic acts and their passage is that we live in abnormal times. In
the case of Muslim Mindanao and the Cordilleras, we know that we deal with
questions of war and peace. These are momentous issues in which the territorial
integrity and the solidarity of this country are being put at stake, in a manner of
speaking.

We are writing a peace Constitution. We hope that the Article on Social Justice can
contribute to a climate of peace so that any civil strife in the countryside can be more
quickly and more justly resolved. We are providing for autonomous regions so that we
give constitutional permanence to the just demands and grievances of our own fellow
countrymen in the Cordilleras and in Mindanao. One hundred thousand lives were lost
in that struggle in Mindanao, and to this day, the Cordilleras is being shaken by an
armed struggle as well as a peaceful and militant struggle.

...

Rather than give opportunity to foreign bodies, no matter how sympathetic to the
Philippines, to contribute to the settlement of this issue, I think the Constitutional
Commission ought not to forego the opportunity to put the stamp of this Commission
through definitive action on the settlement of the problems that have nagged us and
our forefathers for so long.
[62]

A necessary prerequisite of autonomy is decentralization. [63]

Decentralization is a decision by the central government authorizing its

subordinates, whether geographically or functionally defined, to exercise
authority in certain areas. It involves decision-making by subnational units. It
is typically a delegated power, wherein a larger government chooses to
delegate certain authority to more local governments. Federalism implies
some measure of decentralization, but unitary systems may also decentralize.
Decentralization differs intrinsically from federalism in that the sub-units that
have been authorized to act (by delegation) do not possess any claim of right
against the central government. [64]

Decentralization comes in two formsdeconcentration and devolution.

Deconcentration is administrative in nature; it involves the transfer of functions
or the delegation of authority and responsibility from the national office to the
regional and local offices. This mode of decentralization is also referred to as
administrative decentralization. [65]

Devolution, on the other hand, connotes political decentralization, or the

transfer of powers, responsibilities, and resources for the performance of
certain functions from the central government to local government units. This [66]

is a more liberal form of decentralization since there is an actual transfer of

powers and responsibilities. It aims to grant greater autonomy to local
[67]

government units in cognizance of their right to self-government, to make

them self-reliant, and to improve their administrative and technical
capabilities. [68]

This Court elucidated the concept of autonomy in Limbona v.

Mangelin, thus:
[69]

Autonomy is either decentralization of administration or decentralization of power.

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

Decentralization of power, on the other hand, involves an abdication of political

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

In the case, the Court reviewed the expulsion of a member from the
Sangguniang Pampook, Autonomous Region. It held that the Court may
assume jurisdiction as the local government unit, organized before 1987,
enjoys autonomy of the former category. It refused, though, to resolve
whether the grant of autonomy to Muslim Mindanao under the 1987
Constitution involves, truly, an effort to decentralize power rather than mere
administration. [70]

A year later, in Cordillera Broad Coalition v. Commission on Audit, the [71]

Court, with the same composition, ruled without any dissent that the creation
of autonomous regions contemplates the grant of political autonomyan
autonomy which is greater than the administrative autonomy granted to local
government units. It held that the constitutional guarantee of local autonomy in
the Constitution (Art. X, Sec. 2) refers to administrative autonomy of local
government units or, cast in more technical language, the decentralization of
government authority. On the other hand, the creation of autonomous
regions in Muslim Mindanao and the Cordilleras, which is peculiar to the
1987 Constitution, contemplates the grant of political autonomy and not
just administrative autonomy to these regions. [72]

And by regional autonomy, the framers intended it to mean meaningful

and authentic regional autonomy. As articulated by a Muslim author,
[73]

substantial and meaningful autonomy is the kind of local self-government

which allows the people of the region or area the power to determine what is
best for their growth and development without undue interference or dictation
from the central government. [74]

To this end, Section 16, Article X limits the power of the President over
[75]

autonomous regions. In essence, the provision also curtails the power of

[76]

Congress over autonomous regions. Consequently, Congress will have to

[77]

re-examine national laws and make sure that they reflect the Constitutions
adherence to local autonomy. And in case of conflicts, the underlying spirit
which should guide its resolution is the Constitutions desire for genuine local
autonomy. [78]

The diminution of Congress powers over autonomous regions was

confirmed in Ganzon v. Court of Appeals, wherein this Court held that the
[79]

omission (of as may be provided by law) signifies nothing more than to

underscore local governments autonomy from Congress and to break
Congress control over local government affairs.
This is true to subjects over which autonomous regions have powers, as
specified in Sections 18 and 20, Article X of the 1987 Constitution. Expressly
not included therein are powers over certain areas. Worthy of note is that
the area of public works is not excluded and neither is it reserved for the
National Government. The key provisions read, thus:

SEC. 18. The Congress shall enact an organic act for each autonomous region with the
assistance and participation of the regional consultative commission composed of
representatives appointed by the President from a list of nominees from multisectoral
bodies. The organic act shall define the basic structure of government for the
region consisting of the executive department and legislative assembly, both of
which shall be elective and representative of the constituent political units. The
organic acts shall likewise provide for special courts with personal, family and
property law jurisdiction consistent with the provisions of the Constitution and
national laws.
The creation of the autonomous region shall be effective when approved by majority
of the votes cast by the constituent units in a plebiscite called for the purpose,
provided that only provinces, cities, and geographic areas voting favorably in such
plebiscite shall be included in the autonomous region.

SEC. 20. Within its territorial jurisdiction and subject to the provisions of this
Constitution and national laws, the organic act of autonomous regions shall provide
for legislative powers over:

(1) Administrative organization;

(2) Creation of sources of revenues;

(3) Ancestral domain and natural resources;

(4) Personal, family and property relations;

(5) Regional urban and rural planning development;

(6) Economic, social, and tourism development;

(7) Educational policies;

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

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

E.O. 426 officially devolved the powers and functions of the DPWH in
ARMM to the Autonomous Regional Government (ARG). Sections 1 and 2 of
E.O. 426 provide:

SECTION 1. Transfer of Control and Supervision. The offices of the Department

of Public Works and Highways (DPWH) within the Autonomous Region in
Muslim Mindanao (ARMM) including their functions, powers and
responsibilities, personnel, equipment, properties, budgets and liabilities are
hereby placed under the control and supervision of the Autonomous Regional
Government.

In particular, these offices are identified as the four (4) District Engineering
Offices (DEO) in each of the four provinces respectively and the three (3) Area
Equipment Services (AES) located in Tawi-Tawi, Sulu and Maguindanao
(Municipality of Sultan Kudarat).
SEC. 2. Functions Transferred. The Autonomous Regional Government shall be
responsible for highways, flood control and water resource development systems, and
other public works within the ARMM and shall exercise the following functions:

1. Undertake and evaluate the planning, design, construction and works

supervision for the infrastructure projects whose location and impact are
confined within the ARMM;

2. Undertake the maintenance of infrastructure facilities within the ARMM

and supervise the maintenance of such local roads and other infrastructure
facilities receiving financial assistance from the National Government;

3. Ensure the implementation of laws, policies, programs, rules and

regulations regarding infrastructure projects as well as all public and private
physical structures within the ARMM;

4. Provide technical assistance related to their functions to other agencies

within the ARMM, especially the local government units;

5. Coordinate with other national and regional government departments,

agencies, institutions and organizations, especially the local government units
within the ARMM in the planning and implementation of infrastructure
projects;

6. Conduct continuing consultations with the local communities, take

appropriate measures to make the services of the Autonomous Regional
Government responsive to the needs of the general public and recommend
such appropriate actions as may be necessary; and

7. Perform such other related duties and responsibilities within the ARMM as
may be assigned or delegated by the Regional Governor or as may be
provided by law. (Emphasis supplied)

More importantly, Congress itself through R.A. 9054 transferred and

devolved the administrative and fiscal management of public works and funds
for public works to the ARG. Section 20, Article VI of R.A. 9054 provides:

ARTICLE VI

THE LEGISLATIVE DEPARTMENT

SEC. 20. Annual Budget and Infrastructure Funds. The annual budget of the Regional
Government shall be enacted by Regional Assembly. Funds for infrastructure in the
autonomous region allocated by the central government or national government shall
be appropriated through a Regional Assembly Public Works Act.

Unless approved by the Regional Assembly, no public works funds allocated by the
central government or national government for the Regional Government or allocated
by the Regional Government from its own revenues may be disbursed, distributed,
realigned, or used in any manner.

The aim of the Constitution is to extend to the autonomous peoples, the

people of Muslim Mindanao in this case, the right to self-determinationa right
to choose their own path of development; the right to determine the political,
cultural and economic content of their development path within the framework
of the sovereignty and territorial integrity of the Philippine Republic. Self-
[80]

determination refers to the need for a political structure that will respect the
autonomous peoples uniqueness and grant them sufficient room for self-
expression and self-construction. [81]

In treading their chosen path of development, the Muslims in Mindanao

are to be given freedom and independence with minimum interference from
the National Government. This necessarily includes the freedom to decide on,
build, supervise and maintain the public works and infrastructure projects
within the autonomous region. The devolution of the powers and functions of
the DPWH in the ARMM and transfer of the administrative and fiscal
management of public works and funds to the ARG are meant to be true,
meaningful and unfettered. This unassailable conclusion is grounded on a
clear consensus, reached at the Constitutional Commission and ratified by the
entire Filipino electorate, on the centrality of decentralization of power as the
appropriate vessel of deliverance for Muslim Filipinos and the ultimate unity of
Muslims and Christians in this country.
With R.A. 8999, however, this freedom is taken away, and the National
Government takes control again. The hands, once more, of the autonomous
peoples are reined in and tied up.
The challenged law creates an office with functions and powers which, by
virtue of E.O. 426, have been previously devolved to the DPWH-ARMM, First
Engineering District in Lanao del Sur.
E.O. 426 clearly ordains the transfer of the control and supervision of the
offices of the DPWH within the ARMM, including their functions, powers and
responsibilities, personnel, equipment, properties, and budgets to the ARG.
Among its other functions, the DPWH-ARMM, under the control of the
Regional Government shall be responsible for highways, flood control and
water resource development systems, and other public works within the
ARMM. Its scope of power includes the planning, design, construction and
supervision of public works. According to R.A. 9054, the reach of the Regional
Government enables it to appropriate, manage and disburse all public work
funds allocated for the region by the central government.
The use of the word powers in E.O. 426 manifests an unmistakable case
of devolution.
In this regard, it is not amiss to cite Opinion No. 120, S. 1991 of the [82]

Secretary of Justice on whether the national departments or their counterpart

departments in the ARG are responsible for implementation of roads, rural
water supply, health, education, women in development, agricultural extension
and watershed management. Referring to Section 2, Article V of R.A. 6734
which enumerates the powers of the ARG, he states:

It is clear from the foregoing provision of law that except for the areas of executive
power mentioned therein, all other such areas shall be exercised by the Autonomous
Regional Government (ARG) of the Autonomous Region in Muslim Mindanao. It is
noted that programs relative to infrastructure facilities, health, education, women in
development, agricultural extension and watershed management do not fall under any
of the exempted areas listed in the abovequoted provision of law. Thus, the inevitable
conclusion is that all these spheres of executive responsibility have been transferred to
the ARG.

Reinforcing the aboveview (sic) are the various executive orders issued by the
President providing for the devolution of the powers and functions of specified
executive departments of the National Government to the ARG. These are E.O. Nos.
425 (Department of Labor and Employment, Local Government, Tourism,
Environment and Natural Resources, Social Welfare and Development and Science
and Technology), 426 (Department of Public Works and Highways), 459 (Department
of Education, Culture and Sports) and 460 (Department of Agriculture). The
execution of projects on infrastructure, education, women, agricultural extension and
watershed management within the Autonomous Region of Muslim Mindanao
normally fall within the responsibility of one of the aforementioned executive
departments of the National Government, but by virtue of the aforestated EOs, such
responsibility has been transferred to the ARG.

E.O. 426 was issued to implement the provisions of the first ARMM
Organic Act, R.A. 6734the validity of which this Court upheld in the case
of Abbas v. Commission on Elections. In Section 4, Article XVIII of said Act,
[83]

central government or national government offices and agencies in the

autonomous region which are not excluded under Section 3, Article IV of this[84]

Organic Act, shall be placed under the control and supervision of the Regional
Government pursuant to a schedule prescribed by the oversight committee.
Evidently, the intention is to cede some, if not most, of the powers of the
national government to the autonomous government in order to effectuate a
veritable autonomy. The continued enforcement of R.A. 8999, therefore, runs
afoul of the ARMM Organic Acts and results in the recall of powers which
have previously been handed over. This should not be sanctioned, elsewise
the Organic Acts desire for greater autonomy for the ARMM in accordance
with the Constitution would be quelled. It bears stressing that national laws
are subject to the Constitution one of whose state policies is to ensure the
autonomy of autonomous regions. Section 25, Article II of the 1987
Constitution states:

Sec. 25. The State shall ensure the autonomy of local governments.

R.A. 8999 has made the DPWH-ARMM effete and rendered regional
autonomy illusory with respect to infrastructure projects. The Congressional
Record shows, on the other hand, that the lack of an implementing and
monitoring body within the area has hindered the speedy implementation, of
infrastructure projects. Apparently, in the legislatures estimation, the existing
[85]

DPWH-ARMM engineering districts failed to measure up to the task. But if it

was indeed the case, the problem could not be solved through the simple
legislative creation of an incongruous engineering district for the central
government in the ARMM. As it was, House Bill No. 995 which ultimately
became R.A. 8999 was passed in record time on second reading (not more
than 10 minutes), absolutely without the usual sponsorship speech and
debates. The precipitate speed which characterized the passage of R.A.
[86]

8999 is difficult to comprehend since R.A. 8999 could have resulted in the
amendment of the first ARMM Organic Act and, therefore, could not take
effect without first being ratified in a plebiscite. What is more baffling is that in
March 2001, or barely two (2) months after it enacted R.A. 8999 in January
2001, Congress passed R.A. 9054, the second ARMM Organic Act, where it
reaffirmed the devolution of the DPWH in ARMM, including Lanao del Sur and
Marawi City, to the Regional Government and effectively repealed R.A. 8999.
DPWH Department Order No. 119
Now, the question directly related to D.O. 119.
D.O. 119 creating the Marawi Sub-District Engineering Office which has
jurisdiction over infrastructure projects within Marawi City and Lanao del Sur is
violative of the provisions of E.O. 426. The Executive Order was issued
pursuant to R.A. 6734which initiated the creation of the constitutionally-
mandated autonomous region and which defined the basic structure of the
[87]

autonomous government. E.O. 426 sought to implement the transfer of the

[88]

control and supervision of the DPWH within the ARMM to the Autonomous
Regional Government. In particular, it identified four (4) District Engineering
Offices in each of the four (4) provinces, namely: Lanao del Sur,
Maguindanao, Sulu and Tawi-Tawi. Accordingly, the First Engineering
[89]

District of the DPWH-ARMM in Lanao del Sur has jurisdiction over the public
works within the province.
The office created under D.O. 119, having essentially the same powers, is
a duplication of the DPWH-ARMM First Engineering District in Lanao del Sur
formed under the aegis of E.O. 426. The department order, in effect, takes
back powers which have been previously devolved under the said executive
order. D.O. 119 runs counter to the provisions of E.O. 426. The DPWHs order,
like spring water, cannot rise higher than its source of powerthe Executive.
The fact that the department order was issued pursuant to E.O. 124signed
and approved by President Aquino in her residual legislative powersis of no
moment. It is a finely-imbedded principle in statutory construction that a
special provision or law prevails over a general one. Lex specialis derogant
[90]

generali. As this Court expressed in the case of Leveriza v. Intermediate

Appellate Court, another basic principle of statutory construction mandates
[91]

that general legislation must give way to special legislation on the same
subject, and generally be so interpreted as to embrace only cases in which
the special provisions are not applicable, that specific statute prevails over a
general statute and that where two statutes are of equal theoretical application
to a particular case, the one designed therefor specially should prevail.
E.O. No. 124, upon which D.O. 119 is based, is a general law reorganizing
the Ministry of Public Works and Highways while E.O. 426 is a special law
transferring the control and supervision of the DPWH offices within ARMM to
the Autonomous Regional Government. The latter statute specifically applies
to DPWH-ARMM offices. E.O. 124 should therefore give way to E.O. 426 in
the instant case.
In any event, the ARMM Organic Acts and their ratification in a plebiscite
in effect superseded E.O. 124. In case of an irreconcilable conflict between
two laws of different vintages, the later enactment prevails because it is the
later legislative will.[92]

Further, in its repealing clause, R.A. 9054 states that all laws, decrees,
orders, rules and regulations, and other issuances or parts thereof, which are
inconsistent with this Organic Act, are hereby repealed or modified
accordingly. With the repeal of E.O. 124 which is the basis of D.O. 119, it
[93]

necessarily follows that D.O. 119 was also rendered functus officio by the
ARMM Organic Acts.
Grave abuse of discretion
Without doubt, respondents committed grave abuse of discretion. They
implemented R.A. 8999 despite its inoperativeness and repeal. They also put
in place and maintained the DPWH Marawi Sub-District Engineering Office in
accordance with D.O. 119 which has been rendered functus officio by the
ARMM Organic Acts.
Still, on the issue of grave abuse of discretion, this Court, however, cannot
uphold petitioners argument that R.A. 8999 was signed into law under
suspicious circumstances to support the assertion that there was a capricious
and whimsical exercise of legislative authority. Once more, this Court cannot
inquire into the wisdom, merits, propriety or expediency of the acts of the
legislative branch.
Likewise, the alleged lack of consultation or public hearing with the
affected agency during the inception of the law does not render the law infirm.
This Court holds that the Congress did not transgress the Constitution nor any
statute or House Rule in failing to invite a resource person from the DPWH-
ARMM during the Committee meeting. Section 27, Rule VII of the Rules of the
House only requires that a written notice be given to all the members of a
[94]

Committee seven (7) calendar days before a regularly scheduled meeting,

specifying the subject matter of the meeting and the names of the invited
resource persons. And it must be emphasized that the questions of who to
invite and whether there is a need to invite resource persons during
Committee meetings should be addressed solely to Congress in its plenary
legislative powers. [95]

Conclusion
The repeal of R.A. 8999 and the functus officio state of D.O. 119 provide
the necessary basis for the grant of the writs of certiorari and prohibition
sought by the petitioners. However, there is no similar basis for the issuance
of a writ of mandamus to compel respondent DBM Secretary to release funds
appropriated for public works projects in Marawi City and Lanao del Sur to the
DPWH-ARMM First Engineering District in Lanao del Sur and to compel
respondent DPWH Secretary to allow the DPWH-ARMM, First Engineering
District in Lanao del Sur to implement all public works projects within its
jurisdictional area. Section 20, Article VI of R.A. 9054 clearly provides that
(f)unds for infrastructure in the autonomous region allocated by the central
government or national government shall only be appropriated through a
Regional Assembly Public Works Act passed by the Regional Assembly.
There is no showing that such Regional Assembly Public Works Act has been
enacted.
WHEREFORE, considering that Republic Act No. 9054 repealed Republic
Act No. 8999 and rendered DPWH Department Order No. 119 functus officio,
the petition insofar as it seeks the writs of certiorari and prohibition is
GRANTED. Accordingly, let a writ of prohibition ISSUE commanding
respondents to desist from implementing R.A. 8999 and D.O. 119, and
maintaining the DPWH Marawi Sub-District Engineering Office and the First
Engineering District of the Province of Lanao del Sur comprising the City of
Marawi and the municipalities within the First District of Lanao del Sur.
However, the petition insofar as it seeks a writ of mandamus against
respondents is DENIED.
No costs.
SO ORDERED.
 [G.R. No. 138810. September 29, 2004]

BATANGAS CATV, INC., petitioner, vs. THE COURT OF APPEALS,

THE BATANGAS CITY SANGGUNIANG PANLUNGSOD and
BATANGAS CITY MAYOR, respondents.

DECISION
SANDOVAL-GUTIERREZ, J.:

In the late 1940s, John Walson, an appliance dealer in Pennsylvania,

suffered a decline in the sale of television (tv) sets because of poor reception
of signals in his community. Troubled, he built an antenna on top of a nearby
mountain. Using coaxial cable lines, he distributed the tv signals from the
antenna to the homes of his customers. Walsons innovative idea improved his
sales and at the same time gave birth to a new telecommunication system --
the Community Antenna Television (CATV) or Cable Television. [1]

This technological breakthrough found its way in our shores and, like in its
country of origin, it spawned legal controversies, especially in the field of
regulation. The case at bar is just another occasion to clarify a shady area.
Here, we are tasked to resolve the inquiry -- may a local government unit
(LGU) regulate the subscriber rates charged by CATV operators within its
territorial jurisdiction?
This is a petition for review on certiorari filed by Batangas CATV, Inc.
(petitioner herein) against the Sangguniang Panlungsod and the Mayor of
Batangas City (respondents herein) assailing the Court of Appeals (1)
Decision dated February 12, 1999 and (2) Resolution dated May 26, 1999,
[2] [3]

in CA-G.R. CV No. 52361. The Appellate Court reversed and set aside the
[4]

Judgment dated October 29, 1995 of the Regional Trial Court (RTC), Branch
[5]

7, Batangas City in Civil Case No. 4254, holding that neither of the
[6]

respondents has the power to fix the subscriber rates of CATV operators,
such being outside the scope of the LGUs power.
The antecedent facts are as follows:
On July 28, 1986, respondent Sangguniang Panlungsod enacted
Resolution No. 210 granting petitioner a permit to construct, install, and
[7]

operate a CATV system in Batangas City. Section 8 of the Resolution

provides that petitioner is authorized to charge its subscribers the maximum
rates specified therein, provided, however, that any increase of rates shall be
subject to the approval of the Sangguniang Panlungsod. [8]
 Sometime in November 1993, petitioner increased its subscriber rates
from P88.00 to P180.00 per month. As a result, respondent Mayor wrote
petitioner a letter threatening to cancel its permit unless it secures the
[9]

approval of respondent Sangguniang Panlungsod, pursuant to Resolution No.

210.
Petitioner then filed with the RTC, Branch 7, Batangas City, a petition for
injunction docketed as Civil Case No. 4254. It alleged that
respondent Sangguniang Panlungsod has no authority to regulate the
subscriber rates charged by CATV operators because under Executive Order
No. 205, the National Telecommunications Commission (NTC) has the sole
authority to regulate the CATV operation in the Philippines.
On October 29, 1995, the trial court decided in favor of petitioner, thus:

WHEREFORE, as prayed for, the defendants, their representatives, agents, deputies

or other persons acting on their behalf or under their instructions, are hereby
enjoined from canceling plaintiffs permit to operate a Cable Antenna Television
(CATV) system in the City of Batangas or its environs or in any manner, from
interfering with the authority and power of the National Telecommunications
Commission to grant franchises to operate CATV systems to qualified
applicants, and the right of plaintiff in fixing its service rates which needs no
prior approval of the Sangguniang Panlungsod of Batangas City.

The counterclaim of the plaintiff is hereby dismissed. No pronouncement as to costs.

IT IS SO ORDERED. [10]

The trial court held that the enactment of Resolution No. 210 by
respondent violates the States deregulation policy as set forth by then NTC
Commissioner Jose Luis A. Alcuaz in his Memorandum dated August 25,
1989. Also, it pointed out that the sole agency of the government which can
regulate CATV operation is the NTC, and that the LGUs cannot exercise
regulatory power over it without appropriate legislation.
Unsatisfied, respondents elevated the case to the Court of Appeals,
docketed as CA-G.R. CV No. 52361.
On February 12, 1999, the Appellate Court reversed and set aside the trial
courts Decision, ratiocinating as follows:

Although the Certificate of Authority to operate a Cable Antenna Television

(CATV) System is granted by the National Telecommunications Commission
pursuant to Executive Order No. 205, this does not preclude the Sangguniang
Panlungsod from regulating the operation of the CATV in their locality under
the powers vested upon it by Batas Pambansa Bilang 337, otherwise known as
the Local Government Code of 1983. Section 177 (now Section 457 paragraph 3
(ii) of Republic Act 7160) provides:

Section 177. Powers and Duties The Sangguniang Panlungsod shall:

a) Enact such ordinances as may be necessary to carry into effect and discharge the
responsibilities conferred upon it by law, and such as shall be necessary and proper to
provide for health and safety, comfort and convenience, maintain peace and order,
improve the morals, and promote the prosperity and general welfare of the community
and the inhabitants thereof, and the protection of property therein;

xxx

d) Regulate, fix the license fee for, and tax any business or profession being
carried on and exercised within the territorial jurisdiction of the city, except
travel agencies, tourist guides, tourist transports, hotels, resorts, de luxe
restaurants, and tourist inns of international standards which shall remain under
the licensing and regulatory power of the Ministry of Tourism which shall
exercise such authority without infringement on the taxing and regulatory
powers of the city government;

Under cover of the General Welfare Clause as provided in this section, Local
Government Units can perform just about any power that will benefit their
constituencies. Thus, local government units can exercise powers that
are: (1) expressly granted; (2) necessarily implied from the power that is expressly
granted; (3)necessary, appropriate or incidental for its efficient and effective
governance; and (4) essential to the promotion of the general welfare of their
inhabitants. (Pimentel, The Local Government Code of 1991, p. 46)

Verily, the regulation of businesses in the locality is expressly provided in the

Local Government Code. The fixing of service rates is lawful under the General
Welfare Clause.

Resolution No. 210 granting appellee a permit to construct, install and operate a
community antenna television (CATV) system in Batangas City as quoted earlier in
this decision, authorized the grantee to impose charges which cannot be increased
except upon approval of the Sangguniang Bayan. It further provided that in case of
violation by the grantee of the terms and conditions/requirements specifically
provided therein, the City shall have the right to withdraw the franchise.
Appellee increased the service rates from EIGHTY EIGHT PESOS (P88.00) to ONE
HUNDRED EIGHTY PESOS (P180.00) (Records, p. 25) without the approval of
appellant. Such act breached Resolution No. 210 which gives appellant the right
to withdraw the permit granted to appellee. [11]

Petitioner filed a motion for reconsideration but was denied. [12]

Hence, the instant petition for review on certiorari anchored on the

following assignments of error:
I

THE COURT OF APPEALS ERRED IN HOLDING THAT THE GENERAL

WELFARE CLAUSE OF THE LOCAL GOVERNMENT CODE
AUTHORIZES RESPONDENT SANGGUNIANG PANLUNGSOD TO
EXERCISE THE REGULATORY FUNCTION SOLELY LODGED WITH
THE NATIONAL TELECOMMUNICATIONS COMMISSION UNDER
EXECUTIVE ORDER NO. 205, INCLUDING THE AUTHORITY TO FIX
AND/OR APPROVE THE SERVICE RATES OF CATV OPERATORS; AND

II

THE COURT OF APPEALS ERRED IN REVERSING THE DECISION

APPEALED FROM AND DISMISSING PETITIONERS COMPLAINT. [13]

Petitioner contends that while Republic Act No. 7160, the Local
Government Code of 1991, extends to the LGUs the general power to perform
any act that will benefit their constituents, nonetheless, it does not authorize
them to regulate the CATV operation. Pursuant to E.O. No. 205, only the NTC
has the authority to regulate the CATV operation, including the fixing of
subscriber rates.
Respondents counter that the Appellate Court did not commit any
reversible error in rendering the assailed Decision. First, Resolution No. 210
was enacted pursuant to Section 177(c) and (d) of Batas Pambansa
Bilang 337, the Local Government Code of 1983, which authorizes LGUs to
regulate businesses. The term businesses necessarily includes the CATV
industry. And second, Resolution No. 210 is in the nature of a contract
between petitioner and respondents, it being a grant to the former of a
franchise to operate a CATV system. To hold that E.O. No. 205 amended its
terms would violate the constitutional prohibition against impairment of
contracts.[14]

The petition is impressed with merit.

 Earlier, we posed the question -- may a local government unit (LGU)
regulate the subscriber rates charged by CATV operators within its territorial
jurisdiction? A review of pertinent laws and jurisprudence yields a negative
answer.
President Ferdinand E. Marcos was the first one to place the CATV
industry under the regulatory power of the national government. On June 11, [15]

1978, he issued Presidential Decree (P.D.) No. 1512 establishing a [16]

monopoly of the industry by granting Sining Makulay, Inc., an exclusive

franchise to operate CATV system in any place within the Philippines.
Accordingly, it terminated all franchises, permits or certificates for the
operation of CATV system previously granted by local governments or
by any instrumentality or agency of the national government. Likewise, it [17]

prescribed the subscriber rates to be charged by Sining Makulay, Inc. to its

customers. [18]

On July 21, 1979, President Marcos issued Letter of Instruction (LOI)

No. 894 vesting upon the Chairman of the Board of Communications direct
supervision over the operations of Sining Makulay, Inc. Three days after, he
issued E.O. No. 546 integrating the Board of Communications and the
[19] [20]

Telecommunications Control Bureau to form a single entity to be known as

[21]

the National Telecommunications Commission. Two of its assigned functions

are:

a. Issue Certificate of Public Convenience for the operation of communications

utilities and services, radio communications systems, wire or wireless telephone or
telegraph systems, radio and television broadcasting system and other similar
public utilities;

b. Establish, prescribe and regulate areas of operation of particular operators of

public service communications; and determine and prescribe charges or rates
pertinent to the operation of such public utility facilities and services except in
cases where charges or rates are established by international bodies or associations of
which the Philippines is a participating member or by bodies recognized by the
Philippine Government as the proper arbiter of such charges or rates;

Although Sining Makulay Inc.s exclusive franchise had a life term of 25

years, it was cut short by the advent of the 1986 Revolution. Upon President
Corazon C. Aquinos assumption of power, she issued E.O. No. 205 opening [22]

the CATV industry to all citizens of the Philippines. It mandated the NTC to
grant Certificates of Authority to CATV operators and to issue the
necessary implementing rules and regulations.
 On September 9, 1997, President Fidel V. Ramos issued E.O. No.
436 prescribing policy guidelines to govern CATV operation in the
[23]

Philippines. Cast in more definitive terms, it restated the NTCs regulatory

powers over CATV operations, thus:

SECTION 2. The regulation and supervision of the cable television industry in the
Philippines shall remain vested solely with the National Telecommunications
Commission (NTC).

SECTION 3. Only persons, associations, partnerships, corporations or

cooperatives, granted a Provisional Authority or Certificate of Authority by the
Commission may install, operate and maintain a cable television system or render
cable television service within a service area.

Clearly, it has been more than two decades now since our national
government, through the NTC, assumed regulatory power over the CATV
industry. Changes in the political arena did not alter the trend. Instead,
subsequent presidential issuances further reinforced the NTCs power.
Significantly, President Marcos and President Aquino, in the exercise of their
legislative power, issued P.D. No. 1512, E.O. No. 546 and E.O. No. 205.
Hence, they have the force and effect of statutes or laws passed by
Congress. That the regulatory power stays with the NTC is also clear from
[24]

President Ramos E.O. No. 436 mandating that the regulation and supervision
of the CATV industry shall remain vested solely in the NTC. Blacks Law
Dictionary defines sole as without another or others. The logical [25]

conclusion, therefore, is that in light of the above laws and E.O. No. 436,
the NTC exercises regulatory power over CATV operators to the
exclusion of other bodies.
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, such as, the: (1)determination of
rates, (2) issuance of certificates of authority, (3) establishment of areas of
operation, (4) examination and assessment of the legal, technical and
financial qualifications of applicant operators, (5) granting of permits for the
use of frequencies, (6) regulation of ownership and operation, (7) adjudication
of issues arising from its functions, and (8) other similar matters. Within
[26]

these areas, the NTC reigns supreme as it possesses the exclusive power to
regulate -- a power comprising varied acts, such as to fix, establish, or control;
to adjust by rule, method or established mode; to direct by rule or restriction;
or to subject to governing principles or laws. [27]

Coincidentally, respondents justify their exercise of regulatory power over

petitioners CATV operation under the general welfare clause of the Local
Government Code of 1983. The Court of Appeals sustained their stance.
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 posses such power is
clear under the new law, R.A. No. 7160 (the Local Government Code of
1991). Section 16 thereof provides:

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 others, 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 same Code specifically mandates:

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, x x x:

The general welfare clause is the delegation in statutory form of the

police power of the State to LGUs. Through this, LGUs may prescribe
[28]

regulations to protect the lives, health, and property of their constituents and
maintain peace and order within their respective territorial jurisdictions.
Accordingly, we have upheld enactments providing, for instance, the
regulation of gambling, the occupation of rig drivers, the installation and
[29] [30]

operation of pinball machines, the maintenance and operation of

[31]

cockpits, the exhumation and transfer of corpses from public burial

[32]

grounds, and the operation of hotels, motels, and lodging houses as valid
[33] [34]
exercises by local legislatures of the police power under the general welfare
clause.
Like any other enterprise, CATV operation maybe regulated by LGUs
under the general welfare clause. This is primarily because the CATV system
commits the indiscretion of crossing public properties. (It uses public
properties in order to reach subscribers.) The physical realities of
constructing CATV system the use of public streets, rights of ways, the
founding of structures, and the parceling of large regions allow an LGU
a certain degree of regulation over CATV operators. This is the same
[35]

regulation that it exercises over all private enterprises within its territory.
But, while we recognize the LGUs power under the general welfare
clause, we cannot sustain Resolution No. 210. We are convinced that
respondents strayed from the well recognized limits of its power. The flaws in
Resolution No. 210 are: (1) it violates the mandate of existing laws and (2) it
violates the States deregulation policy over the CATV industry.
I.

Resolution No. 210 is an enactment of an LGU acting only as agent of the

national legislature. Necessarily, its act must reflect and conform to the will of
its principal. To test its validity, we must apply the particular requisites of a
valid ordinance as laid down by the accepted principles governing municipal
corporations. [36]

Speaking for the Court in the leading case of United States vs.
Abendan, Justice Moreland said: An ordinance enacted by virtue of the
[37]

general welfare clause is valid, unless it contravenes the fundamental law of

the Philippine Islands, or an Act of the Philippine Legislature, or unless it is
against public policy, or is unreasonable, oppressive, partial, discriminating, or
in derogation of common right. In De la Cruz vs. Paraz, we laid the general
[38]

rule that ordinances passed by virtue of the implied power found in the
general welfare clause must be reasonable, consonant with the general
powers and purposes of the corporation, and not inconsistent with the laws
or policy of the State.
The apparent defect in Resolution No. 210 is that it contravenes E.O. No.
205 and E.O. No. 436 insofar as it permits respondent Sangguniang
Panlungsod to usurp a power exclusively vested in the NTC, i.e., the power to
fix the subscriber rates charged by CATV operators. As earlier discussed, the
fixing of subscriber rates is definitely one of the matters within the NTCs
exclusive domain.
 In this regard, it is appropriate to stress that where the state legislature
has made provision for the regulation of conduct, it has manifested its
intention that the subject matter shall be fully covered by the statute, and that
a municipality, under its general powers, cannot regulate the same
conduct. In Keller vs. State, it was held that: Where there is no express
[39] [40]

power in the charter of a municipality authorizing it to adopt ordinances

regulating certain matters which are specifically covered by a general
statute, a municipal ordinance, insofar as it attempts to regulate the
subject which is completely covered by a general statute of the
legislature, may be rendered invalid. x x x Where the subject is of
statewide concern, and the legislature has appropriated the field and
declared the rule, its declaration is binding throughout the State. A
reason advanced for this view is that such ordinances are in excess of the
powers granted to the municipal corporation. [41]

Since E.O. No. 205, a general law, mandates that the regulation of CATV
operations shall be exercised by the NTC, an LGU cannot enact an ordinance
or approve a resolution in violation of the said law.
It is a fundamental principle that municipal ordinances are inferior in status
and subordinate to the laws of the state. An ordinance in conflict with a state
law of general character and statewide application is universally held to be
invalid. The principle is frequently expressed in the declaration that municipal
[42]

authorities, under a general grant of power, cannot adopt ordinances which

infringe the spirit of a state law or repugnant to the general policy of the
state. In every power to pass ordinances given to a municipality, there is an
[43]

implied restriction that the ordinances shall be consistent with the general
law. In the language of Justice Isagani Cruz (ret.), this Court, in Magtajas vs.
[44]

Pryce Properties Corp., Inc., ruled that:

[45]

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.

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, 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.

Respondents have an ingenious retort against the above disquisition.

Their theory is that the regulatory power of the LGUs is granted by R.A. No.
7160 (the Local Government Code of 1991), a handiwork of the national
lawmaking authority. They contend that R.A. No. 7160 repealed E.O. No. 205
(issued by President Aquino). Respondents argument espouses a bad
precedent. To say that LGUs exercise the same regulatory power over
matters which are peculiarly within the NTCs competence is to promote a
scenario of LGUs and the NTC locked in constant clash over the appropriate
regulatory measure on the same subject matter. LGUs must recognize that
technical matters concerning CATV operation are within the exclusive
regulatory power of the NTC.
At any rate, we find no basis to conclude that R.A. No. 7160 repealed E.O.
No. 205, either expressly or impliedly. It is noteworthy that R.A. No. 7160
repealing clause, which painstakingly mentions the specific laws or the parts
thereof which are repealed, does not include E.O. No. 205, thus:

SECTION 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; Section 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.

Neither is there an indication that E.O. No. 205 was impliedly repealed by
R.A. No. 7160. It is a settled rule that implied repeals are not lightly presumed
in the absence of a clear and unmistakable showing of such intentions.
In Mecano vs. Commission on Audit, we ruled:
[46]

Repeal by implication proceeds on the premise that where a statute of later date
clearly reveals an intention on the part of the legislature to abrogate a prior act on the
subject, that intention must be given effect. Hence, before there can be a repeal, there
must be a clear showing on the part of the lawmaker that the intent in enacting the
new law was to abrogate the old one. The intention to repeal must be clear and
manifest; otherwise, at least, as a general rule, the later act is to be construed as a
continuation of, and not a substitute for, the first act and will continue so far as the
two acts are the same from the time of the first enactment.

As previously stated, E.O. No. 436 (issued by President Ramos) vests

upon the NTC the power to regulate the CATV operation in this country. So
also Memorandum Circular No. 8-9-95, the Implementing Rules and
Regulations of R.A. No. 7925 (the Public Telecommunications Policy Act of
the Philippines). This shows that the NTCs regulatory power over CATV
operation is continuously recognized.
 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 coordinate branches of the
government. On the assumption of a conflict between E.O. No. 205 and R.A.
[47]

No. 7160, the proper action is not to uphold one and annul the other but to
give effect to both by harmonizing them if possible. This recourse finds
application here. Thus, we hold that the NTC, under E.O. No. 205, has
exclusive jurisdiction over matters affecting CATV operation, including
specifically the fixing of subscriber rates, but nothing herein precludes LGUs
from exercising its general power, under R.A. No. 7160, to prescribe
regulations to promote the health, morals, peace, education, good order or
safety and general welfare of their constituents. In effect, both laws become
equally effective and mutually complementary.
The grant of regulatory power to the NTC is easily understandable. CATV
system is not a mere local concern. The complexities that characterize this
new technology demand that it be regulated by a specialized agency. This is
particularly true in the area of rate-fixing. Rate fixing involves a series of
technical operations. Consequently, on the hands of the regulatory body lies
[48]

the ample discretion in the choice of such rational processes as might be

appropriate to the solution of its highly complicated and technical problems.
Considering that the CATV industry is so technical a field, we believe that the
NTC, a specialized agency, is in a better position than the LGU, to regulate it.
Notably, in United States vs. Southwestern Cable Co., the US Supreme
[49]

Court affirmed the Federal Communications Commissions (FCCs) jurisdiction

over CATV operation. The Court held that the FCCs authority over cable
systems assures the preservation of the local broadcast service and an
equitable distribution of broadcast services among the various regions of the
country.
II.

Resolution No. 210 violated the States deregulation policy.

Deregulation is the reduction of government regulation of business to
permit freer markets and competition. Oftentimes, the State, through its
[50]

regulatory agencies, carries out a policy of deregulation to attain certain

objectives or to address certain problems. In the field of telecommunications,
it is recognized that many areas in the Philippines are still unserved or
underserved. Thus, to encourage private sectors to venture in this field and be
partners of the government in stimulating the growth and development of
telecommunications, the State promoted the policy of deregulation.
 In the United States, the country where CATV originated, the Congress
observed, when it adopted the Telecommunications Act of 1996, that there
was a need to provide a pro-competitive, deregulatory national policy
framework designed to accelerate rapidly private sector deployment of
advanced telecommunications and information technologies and services to
all Americans by opening all telecommunications markets to competition. The
FCC has adopted regulations to implement the requirements of the 1996 Act
and the intent of the Congress.
Our country follows the same policy. The fifth Whereas Clause of E.O. No.
436 states:

WHEREAS, professionalism and self-regulation among existing operators, through a

nationally recognized cable television operators association, have enhanced the
growth of the cable television industry and must therefore be maintained along
with minimal reasonable government regulations;

This policy reaffirms the NTCs mandate set forth in the Memorandum
dated August 25, 1989 of Commissioner Jose Luis A. Alcuaz, to wit:

In line with the purpose and objective of MC 4-08-88, Cable Television System or
Community Antenna Television (CATV) is made part of the broadcast media to
promote the orderly growth of the Cable Television Industry it being in its developing
stage. Being part of the Broadcast Media, the service rates of CATV are likewise
considered deregulated in accordance with MC 06-2-81 dated 25 February 1981,
the implementing guidelines for the authorization and operation of Radio and
Television Broadcasting stations/systems.

Further, the Commission will issue Provisional Authority to existing CATV operators
to authorize their operations for a period of ninety (90) days until such time that the
Commission can issue the regular Certificate of Authority.

When the State declared a policy of deregulation, the LGUs are bound to
follow. To rule otherwise is to render the States policy ineffective. Being mere
creatures of the State, LGUs cannot defeat national policies through
enactments of contrary measures. Verily, in the case at bar, petitioner may
increase its subscriber rates without respondents approval.
At this juncture, it bears emphasizing that municipal corporations are
bodies politic and corporate, created not only as local units of local self-
government, but as governmental agencies of the state. The legislature, by
[51]

establishing a municipal corporation, does not divest the State of any of its
sovereignty; absolve itself from its right and duty to administer the public
affairs of the entire state; or divest itself of any power over the inhabitants of
the district which it possesses before the charter was granted. [52]

Respondents likewise argue that E.O. No. 205 violates the constitutional
prohibition against impairment of contracts, Resolution No. 210 of Batangas
City Sangguniang Panlungsod being a grant of franchise to petitioner.
We are not convinced.
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
[53]

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.
[54]

One last word. The devolution of powers to the LGUs, pursuant to the
Constitutional mandate of ensuring their autonomy, has bred jurisdictional
tension between said LGUs and the State. LGUs must be reminded that they
merely form part of the whole. Thus, when the Drafters of the 1987
Constitution enunciated the policy of ensuring the autonomy of local
governments, it was never their intention to create an imperium in
[55]

imperio and install an intra-sovereign political subdivision independent of a

single sovereign state.
WHEREFORE, the petition is GRANTED. The assailed Decision of the
Court of Appeals dated February 12, 1999 as well as its Resolution dated May
26, 1999 in CA-G.R. CV No. 52461, are hereby REVERSED. The RTC
Decision in Civil Case No. 4254 is AFFIRMED.
No pronouncement as to costs.
SO ORDERED.
 [G.R. No. 125350. December 3, 2002]

HON. RTC JUDGES MERCEDES G. DADOLE (Executive Judge,

Branch 28), ULRIC R. CAETE (Presiding Judge, Branch 25),
AGUSTINE R. VESTIL (Presiding Judge, Branch 56), HON. MTC
JUDGES TEMISTOCLES M. BOHOLST (Presiding Judge, Branch
1), VICENTE C. FANILAG (Judge Designate, Branch 2), and
WILFREDO A. DAGATAN (Presiding Judge, Branch 3), all of
Mandaue City, petitioners, vs. COMMISSION ON
AUDIT, respondent.

DECISION
CORONA, J.:

Before us is a petition for certiorari under Rule 64 to annul the

decision and resolution , dated September 21, 1995 and May 28, 1996,
[1] [2]

respectively, of the respondent Commission on Audit (COA) affirming the

notices of the Mandaue City Auditor which diminished the monthly additional
allowances received by the petitioner judges of the Regional Trial Court (RTC)
and Municipal Trial Court (MTC) stationed in Mandaue City.
The undisputed facts are as follows:
In 1986, the RTC and MTC judges of Mandaue City started receiving
monthly allowances of P1,260 each through the yearly appropriation
ordinance enacted by the Sangguniang Panlungsod of the said city. In 1991,
Mandaue City increased the amount to P1,500 for each judge.
On March 15, 1994, the Department of Budget and Management (DBM)
issued the disputed Local Budget Circular No. 55 (LBC 55) which provided
that:

xxx xxx xxx

2.3.2. In the light of the authority granted to the local government units under the
Local Government Code to provide for additional allowances and other benefits to
national government officials and employees assigned in their locality, such
additional allowances in the form of honorarium at rates not exceeding P1,000.00 in
provinces and cities and P700.00 in municipalities may be granted subject to the
following conditions:
a) That the grant is not mandatory on the part of the LGUs;

b) That all contractual and statutory obligations of the LGU including the
implementation of R.A. 6758 shall have been fully provided in the budget;

c) That the budgetary requirements/limitations under Section 324 and 325 of R.A.
7160 should be satisfied and/or complied with; and

d) That the LGU has fully implemented the devolution of functions/personnel in

accordance with R.A. 7160. (italics supplied)
[3]

xxx xxx xxx

The said circular likewise provided for its immediate effectivity without
need of publication:

5.0 EFFECTIVITY

This Circular shall take effect immediately.

Acting on the DBM directive, the Mandaue City Auditor issued notices of
disallowance to herein petitioners, namely, Honorable RTC Judges Mercedes
G. Dadole, Ulric R. Caete, Agustin R. Vestil, Honorable MTC Judges
Temistocles M. Boholst, Vicente C. Fanilag and Wilfredo A. Dagatan, in
excess of the amount authorized by LBC 55. Beginning October, 1994, the
additional monthly allowances of the petitioner judges were reduced to P1,000
each. They were also asked to reimburse the amount they received in excess
of P1,000 from April to September, 1994.
The petitioner judges filed with the Office of the City Auditor a protest
against the notices of disallowance. But the City Auditor treated the protest as
a motion for reconsideration and indorsed the same to the COA Regional
Office No. 7. In turn, the COA Regional Office referred the motion to the head
office with a recommendation that the same be denied.
On September 21, 1995, respondent COA rendered a decision denying
petitioners motion for reconsideration. The COA held that:

The issue to be resolved in the instant appeal is whether or not the City Ordinance of
Mandaue which provides a higher rate of allowances to the appellant judges may
prevail over that fixed by the DBM under Local Budget Circular No. 55 dated March
15, 1994.
xxx xxx xxx

Applying the foregoing doctrine, appropriation ordinance of local government units is

subject to the organizational, budgetary and compensation policies of budgetary
authorities (COA 5th Ind., dated March 17, 1994 re: Province of Antique; COA letter
dated May 17, 1994 re: Request of Hon. Renato Leviste, Cong. 1stDist. Oriental
Mindoro). In this regard, attention is invited to Administrative Order No. 42 issued on
March 3, 1993 by the President of the Philippines clarifying the role of DBM in the
compensation and classification of local government positions under RA No. 7160
vis-avis the provisions of RA No. 6758 in view of the abolition of the JCLGPA.
Section 1 of said Administrative Order provides that:

Section 1. The Department of Budget and Management as the lead administrator of

RA No. 6758 shall, through its Compensation and Position Classification Bureau,
continue to have the following responsibilities in connection with the implementation
of the Local Government Code of 1991:

a) Provide guidelines on the classification of local government

positions and on the specific rates of pay therefore;

b) Provide criteria and guidelines for the grant of

all allowances and additional forms of compensation to local
government employees; xxx. (underscoring supplied)

To operationalize the aforecited presidential directive, DBM issued LBC No. 55,
dated March 15, 1994, whose effectivity clause provides that:

xxx xxx xxx

5.0 EFFECTIVITY

This Circular shall take effect immediately.

It is a well-settled rule that implementing rules and regulations promulgated by

administrative or executive officer in accordance with, and as authorized by law, has
the force and effect of law or partake the nature of a statute (Victorias Milling Co.,
Inc., vs. Social Security Commission, 114 Phil. 555, cited in Agpalos Statutory
Construction, 2nd Ed. P. 16; Justice Cruzs Phil. Political Law, 1984 Ed., p. 103;
Espanol vs. Phil Veterans Administration, 137 SCRA 314; Antique Sawmills Inc. vs.
Tayco, 17 SCRA 316).

xxx xxx xxx

There being no statutory basis to grant additional allowance to judges in excess of
P1,000.00 chargeable against the local government units where they are stationed, this
Commission finds no substantial grounds or cogent reason to disturb the decision of
the City Auditor, Mandaue City, disallowing in audit the allowances in question.
Accordingly, the above-captioned appeal of the MTC and RTC Judges of Mandaue
City, insofar as the same is not covered by Circular Letter No. 91-7, is hereby
dismissed for lack of merit.

xxx xxx xxx [4]

On November 27, 1995, Executive Judge Mercedes Gozo-Dadole, for and

in behalf of the petitioner judges, filed a motion for reconsideration of the
decision of the COA. In a resolution dated May 28, 1996, the COA denied the
motion.
Hence, this petition for certiorari by the petitioner judges, submitting the
following questions for resolution:
I

HAS THE CITY OF MANDAUE STATUTORY AND CONSTITUTIONAL BASIS

TO PROVIDE ADDITIONAL ALLOWANCES AND OTHER BENEFITS TO
JUDGES STATIONED IN AND ASSIGNED TO THE CITY?

II

CAN AN ADMINISTRATIVE CIRCULAR OR GUIDELINE SUCH AS LOCAL

BUDGET CIRCULAR NO. 55 RENDER INOPERATIVE THE POWER OF THE
LEGISLATIVE BODY OF A CITY BY SETTING A LIMIT TO THE EXTENT OF
THE EXERCISE OF SUCH POWER?

III

HAS THE COMMISSION ON AUDIT CORRECTLY INTERPRETED LOCAL

BUDGET CIRCULAR NO. 55 TO INCLUDE MEMBERS OF THE JUDICIARY IN
FIXING THE CEILING OF ADDITIONAL ALLOWANCES AND BENEFITS TO
BE PROVIDED TO JUDGES STATIONED IN AND ASSIGNED TO MANDAUE
CITY BY THE CITY GOVERNMENT AT P1,000.00 PER MONTH
NOTWITHSTANDING THAT THEY HAVE BEEN RECEIVING ALLOWANCES
OF P1,500.00 MONTHLY FOR THE PAST FIVE YEARS?

IV
IS LOCAL BUDGET CIRCULAR NO. 55 DATED MARCH 15, 1994 ISSUED BY
THE DEPARTMENT OF BUDGET AND MANAGEMENT VALID AND
ENFORCEABLE CONSIDERING THAT IT WAS NOT DULY PUBLISHED IN
ACCODANCE WITH LAW? [5]

Petitioner judges argue that LBC 55 is void for infringing on the local
autonomy of Mandaue City by dictating a uniform amount that a local
government unit can disburse as additional allowances to judges stationed
therein. They maintain that said circular is not supported by any law and
therefore goes beyond the supervisory powers of the President. They further
allege that said circular is void for lack of publication.
On the other hand, the yearly appropriation ordinance providing for
additional allowances to judges is allowed by Section 458, par. (a)(1)[xi], of
RA 7160, otherwise known as the Local Government Code of 1991, which
provides 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

(xi) When the finances of the city government allow, provide for additional
allowances and other benefits to judges, prosecutors, public elementary and high
school teachers, and other national government officials stationed in or assigned to
the city; (italics supplied)

Instead of filing a comment on behalf of respondent COA, the Solicitor

General filed a manifestation supporting the position of the petitioner judges.
The Solicitor General argues that (1) DBM only enjoys the power to review
and determine whether the disbursements of funds were made in accordance
with the ordinance passed by a local government unit while (2) the COA has
no more than auditorial visitation powers over local government units pursuant
to Section 348 of RA 7160 which provides for the power to inspect at any time
the financial accounts of local government units.
 Moreover, the Solicitor General opines that the DBM and the respondent
are only authorized under RA 7160 to promulgate a Budget Operations
Manual for local government units, to improve and systematize methods,
techniques and procedures employed in budget preparation, authorization,
execution and accountability pursuant to Section 354 of RA 7160. The
Solicitor General points out that LBC 55 was not exercised under any of the
aforementioned provisions.
Respondent COA, on the other hand, insists that the constitutional and
statutory authority of a city government to provide allowances to judges
stationed therein is not absolute. Congress may set limitations on the exercise
of autonomy. It is for the President, through the DBM, to check whether these
legislative limitations are being followed by the local government units.
One such law imposing a limitation on a local government units autonomy
is Section 458, par. (a) (1) [xi], of RA 7160, which authorizes the disbursement
of additional allowances and other benefits to judges subject to the condition
that the finances of the city government should allow the same. Thus, DBM is
merely enforcing the condition of the law when it sets a uniform maximum
amount for the additional allowances that a city government can release to
judges stationed therein.
Assuming arguendo that LBC 55 is void, respondent COA maintains that
the provisions of the yearly approved ordinance granting additional
allowances to judges are still prohibited by the appropriation laws passed by
Congress every year. COA argues that Mandaue City gets the funds for the
said additional allowances of judges from the Internal Revenue Allotment
(IRA). But the General Appropriations Acts of 1994 and 1995 do not mention
the disbursement of additional allowances to judges as one of the allowable
uses of the IRA. Hence, the provisions of said ordinance granting additional
allowances, taken from the IRA, to herein petitioner judges are void for being
contrary to law.
To resolve the instant petition, there are two issues that we must address:
(1) whether LBC 55 of the DBM is void for going beyond the supervisory
powers of the President and for not having been published and (2) whether
the yearly appropriation ordinance enacted by the City of Mandaue that
provides for additional allowances to judges contravenes the annual
appropriation laws enacted by Congress.
We rule in favor of the petitioner judges.
On the first issue, we declare LBC 55 to be null and void.
 We recognize that, although our Constitution guarantees autonomy to
[6]

local government units, the exercise of local autonomy remains subject to the
power of control by Congress and the power of supervision by the
President. Section 4 of Article X of the 1987 Philippine Constitution provides
that:

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

In Pimentel vs. Aguirre , we defined the supervisory power of the

[7]

President and distinguished it from the power of control exercised by

Congress. Thus:

This provision (Section 4 of Article X of the 1987 Philippine Constitution) has been
interpreted to exclude the power of control. In Mondano v. Silvosa,[i][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."[ii][6]

In Taule v. Santos,[iii][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,"[iv][8] we said.

In a more recent case, Drilon v. Lim,[v][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.[vi][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.[vii][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.

Clearly then, the President can only interfere in the affairs and activities of
a local government unit if he or she finds that the latter has acted contrary to
law. This is the scope of the Presidents supervisory powers over local
government units. Hence, the President or any of his or her alter egos cannot
interfere in local affairs as long as the concerned local government unit acts
within the parameters of the law and the Constitution. Any directive therefore
by the President or any of his or her alter egos seeking to alter the wisdom of
a law-conforming judgment on local affairs of a local government unit is a
patent nullity because it violates the principle of local autonomy and
separation of powers of the executive and legislative departments in
governing municipal corporations.
Does LBC 55 go beyond the law it seeks to implement? Yes.
LBC 55 provides that the additional monthly allowances to be given by a
local government unit should not exceed P1,000 in provinces and cities
and P700 in municipalities. Section 458, par. (a)(1)(xi), of RA 7160, the law
that supposedly serves as the legal basis of LBC 55, allows the grant of
additional allowances to judges when the finances of the city government
allow. The said provision does not authorize setting a definite maximum limit
to the additional allowances granted to judges. Thus, we need not belabor the
point that the finances of a city government may allow the grant of additional
allowances higher than P1,000 if the revenues of the said city government
exceed its annual expenditures. Thus, to illustrate, a city government with
locally generated annual revenues of P40 million and expenditures of P35
million can afford to grant additional allowances of more than P1,000 each to,
say, ten judges inasmuch as the finances of the city can afford it.
Setting a uniform amount for the grant of additional allowances is an
inappropriate way of enforcing the criterion found in Section 458, par.
(a)(1)(xi), of RA 7160. The DBM over-stepped its power of supervision over
local government units by imposing a prohibition that did not correspond with
the law it sought to implement. In other words, the prohibitory nature of the
circular had no legal basis.
Furthermore, LBC 55 is void on account of its lack of publication, in
violation of our ruling in Taada vs. Tuvera where we held that:
[8]

xxx. Administrative rules and regulations must also be published if their purpose is to
enforce or implement existing law pursuant to a valid delegation.

Interpretative regulations and those merely internal in nature, that is, regulating only
the personnel of an administrative agency and the public, need not be published.
Neither is publication required of the so-called letters of instruction issued by
administrative superiors concerning the rules or guidelines to be followed by their
subordinates in the performance of their duties.

Respondent COA claims that publication is not required for LBC 55

inasmuch as it is merely an interpretative regulation applicable to the
personnel of an LGU. We disagree. In De Jesus vs. Commission on
Audit where we dealt with the same issue, this Court declared void, for lack
[9]

of publication, a DBM circular that disallowed payment of allowances and

other additional compensation to government officials and employees. In
refuting respondent COAs argument that said circular was merely an internal
regulation, we ruled that:

On the need for publication of subject DBM-CCC No. 10, we rule in the affirmative.
Following the doctrine enunciated in Taada v. Tuvera, publication in the Official
Gazette or in a newspaper of general circulation in the Philippines is required
since DBM-CCC No. 10 is in the nature of an administrative circular the purpose
of which is to enforce or implement an existing law. Stated differently, to be
effective and enforceable, DBM-CCC No. 10 must go through the requisite
publication in the Official Gazette or in a newspaper of general circulation in the
Philippines.

In the present case under scrutiny, it is decisively clear that DBM-CCC No. 10, which
completely disallows payment of allowances and other additional compensation to
government officials and employees, starting November 1, 1989, is not a mere
interpretative or internal regulation. It is something more than that. And why not,
when it tends to deprive government workers of their allowance and additional
compensation sorely needed to keep body and soul together. At the very least, before
the said circular under attack may be permitted to substantially reduce their
income, the government officials and employees concerned should be apprised
and alerted by the publication of subject circular in the Official Gazette or in a
newspaper of general circulation in the Philippines to the end that they be given
amplest opportunity to voice out whatever opposition they may have, and to
ventilate their stance on the matter. This approach is more in keeping with
democratic precepts and rudiments of fairness and transparency. (emphasis
supplied)

In Philippine International Trading Corporation vs. Commission on Audit , [10]

we again declared the same circular as void, for lack of publication, despite
the fact that it was re-issued and then submitted for publication. Emphasizing
the importance of publication to the effectivity of a regulation, we therein held
that:

It has come to our knowledge that DBM-CCC No. 10 has been re-issued in its entirety
and submitted for publication in the Official Gazette per letter to the National Printing
Office dated March 9, 1999. Would the subsequent publication thereof cure the defect
and retroact to the time that the above-mentioned items were disallowed in audit?

The answer is in the negative, precisely for the reason that publication is required as
a condition precedent to the effectivity of a law to inform the public of the contents of
the law or rules and regulations before their rights and interests are affected by the
same. From the time the COA disallowed the expenses in audit up to the filing of
herein petition the subject circular remained in legal limbo due to its non-publication.
As was stated in Taada v. Tuvera, prior publication of laws before they become
effective cannot be dispensed with, for the reason that it would deny the public
knowledge of the laws that are supposed to govern it. [11]

We now resolve the second issue of whether the yearly appropriation

ordinance enacted by Mandaue City providing for fixed allowances for judges
contravenes any law and should therefore be struck down as null and void.
According to respondent COA, even if LBC 55 were void, the ordinances
enacted by Mandaue City granting additional allowances to the petitioner
judges would still (be) bereft of legal basis for want of a lawful source of funds
considering that the IRA cannot be used for such purposes. Respondent COA
showed that Mandaue Citys funds consisted of locally generated revenues
and the IRA. From 1989 to 1995, Mandaue Citys yearly expenditures
exceeded its locally generated revenues, thus resulting in a deficit. During all
those years, it was the IRA that enabled Mandaue City to incur a surplus.
Respondent avers that Mandaue City used its IRA to pay for said additional
allowances and this violated paragraph 2 of the Special Provisions, page
1060, of RA 7845 (The General Appropriations Act of 1995) and paragraph 3
[12]

of the Special Provision, page 1225, of RA 7663 (The General Appropriations

Act of 1994) which specifically identified the objects of expenditure of the
[13]

IRA. Nowhere in said provisions of the two budgetary laws does it say that the
IRA can be used for additional allowances of judges. Respondent COA thus
argues that the provisions in the ordinance providing for such disbursement
are against the law, considering that the grant of the subject allowances is not
within the specified use allowed by the aforesaid yearly appropriations acts.
We disagree.
Respondent COA failed to prove that Mandaue City used the IRA to spend
for the additional allowances of the judges. There was no evidence submitted
by COA showing the breakdown of the expenses of the city government and
the funds used for said expenses. All the COA presented were the amounts
expended, the locally generated revenues, the deficit, the surplus and the IRA
received each year. Aside from these items, no data or figures were
presented to show that Mandaue City deducted the subject allowances from
the IRA. In other words, just because Mandaue Citys locally generated
revenues were not enough to cover its expenditures, this did not mean that
the additional allowances of petitioner judges were taken from the IRA and not
from the citys own revenues.
Moreover, the DBM neither conducted a formal review nor ordered a
disapproval of Mandaue Citys appropriation ordinances, in accordance with
the procedure outlined by Sections 326 and 327 of RA 7160 which provide
that:

Section 326. Review of Appropriation Ordinances of Provinces, Highly Urbanized

Cities, Independent Component Cities, and Municipalities within the Metropolitan
Manila Area. The Department of Budget and Management shall review ordinances
authorizing the annual or supplemental appropriations of provinces, highly-urbanized
cities, independent component cities, and municipalities within the Metropolitan
Manila Area in accordance with the immediately succeeding Section.

Section 327. Review of Appropriation Ordinances of Component Cities and

Municipalities.- The sangguninang panlalawigan shall review the ordinance
authorizing annual or supplemental appropriations of component cities and
municipalities in the same manner and within the same period prescribed for the
review of other ordinances.

If within ninety (90) days from receipt of copies of such ordinance, the
sangguniang panlalawigan takes no action thereon, the same shall be deemed to
have been reviewed in accordance with law and shall continue to be in full force
and effect. (emphasis supplied)

Within 90 days from receipt of the copies of the appropriation ordinance,

the DBM should have taken positive action. Otherwise, such ordinance was
deemed to have been properly reviewed and deemed to have taken effect.
Inasmuch as, in the instant case, the DBM did not follow the appropriate
procedure for reviewing the subject ordinance of Mandaue City and allowed
the 90-day period to lapse, it can no longer question the legality of the
provisions in the said ordinance granting additional allowances to judges
stationed in the said city.
WHEREFORE, the petition is hereby GRANTED, and the assailed
decision and resolution, dated September 21, 1995 and May 28, 1996,
respectively, of the Commission on Audit are hereby set aside.
No costs.
SO ORDERED.
 [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 inLimbona 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
[18]
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
[19]
'general supervision' over them, but only to 'ensure that local affairs are administered according to
[20]
law.' He has no control over their acts in the sense that he can substitute their judgments with his
[21]
own.

Decentralization of power, on the other hand, involves an abdication of

political power in the favor of local government units declared to be
autonomous. In that case, the autonomous government is free to chart its own
destiny and shape its future with minimum intervention from central
authorities. According to a constitutional author, decentralization of power
amounts to 'self-immolation,' since in that event, the autonomous government
becomes accountable not to the central authorities but to its constituency."[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
[35]
the Court is bound by constitutional mandate to decide.'

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.
Davide, Jr., C.J., Bellosillo, Melo, Puno, Vitug, Mendoza, Quisumbing, Pardo,
Buena, Gonzaga-Reyes, and De Leon, Jr., JJ., concur.
Kapunan, J., see dissenting opinion.
Purisima, and Ynares-Santiago, JJ., join J. Kapunan in his dissenting opinion.

DISSENTING OPINION
KAPUNAN, J.:

In striking down as unconstitutional and illegal Section 4 of Administrative Order No.

372 ("AO No. 372"), the majority opinion posits that the President exercised power of
control over the local government units ("LGU), which he does not have, and violated
the provisions of Section 6, Article X of the Constitution, which states:

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.

and Section 286(a) of the Local Government Code, which provides:

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.

The share of the LGUs in the national internal revenue taxes is defined in Section
284 of the same Local Government Code, to wit:

SEC. 284. Allotment of Internal Revenue Taxes. - Local government units

shall have a share in the national internal revenue taxes based on the
collection of the third fiscal year preceding the current fiscal year as follows:

(a) On the first year of the effectivity of this Code, thirty percent (30%);

(b) On the second year, thirty-five (35%) percent; and

(c) On the third year and thereafter, forty percent (40%).

Provided, That in the event that the national government incurs an

unmanageable public sector deficit, the President of the Philippines is hereby
authorized, upon the 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 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 personal services.

xxx
The majority opinion takes the view that the withholding of ten percent (10%) of the
internal revenue allotment ("IRA") to the LGUs pending the assessment and evaluation
by the Development Budget Coordinating Committee of the emerging fiscal situation as
called for in Section 4 of AO No. 372 transgresses against the above-quoted provisions
which mandate the "automatic" release of the shares of the LGUs in the national
internal revenue in consonance with local fiscal autonomy. The pertinent portions of AO
No. 372 are reproduced hereunder:

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 countrys 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 x x x local

government units will identify and implement measures in FY 1998 that will
reduce total appropriations for non-personal services items, along the
following suggested areas:

xxx

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.

xxx
 Subsequently, on December 10, 1998, President Joseph E. Estrada issued
Administrative Order No. 43 (AO No. 43), amending Section 4 of AO No. 372, by
reducing to five percent (5%) the IRA to be withheld from the LGUs, thus:

ADMINISTRATIVE ORDER NO. 43

AMENDING ADMINISTRATIVE ORDER NO. 372 DATED 27 DECEMBER

1997 ENTITLED "ADOPTION OF ECONOMY MEASURES IN
GOVERNMENT FOR FY 1998"

WHEREAS, Administrative Order No. 372 dated 27 December 1997 entitled

"Adoption of Economy Measures in Government for FY 1998" was issued to
address the economic difficulties brought about by the peso devaluation in
1997;

WHEREAS, Section 4 of Administrative Order No. 372 provided that the

amount equivalent to 10% of the internal revenue allotment to local
government units shall be withheld; and,

WHEREAS, there is a need to release additional funds to local government

units for vital projects and expenditures.

NOW, THEREFORE, I, JOSEPH EJERCITO ESTRADA, President of the

Republic of the Philippines, by virtue of the powers vested in me by law, do
hereby order the reduction of the withheld Internal Revenue Allotment (IRA) of
local government units from ten percent to five percent.

The five percent reduction in the IRA withheld for 1998 shall be released
before 25 December 1998.

DONE in the City of Manila, this 10th day of December, in the year of our
Lord, nineteen hundred and ninety eight.

With all due respect, I beg to disagree with the majority opinion.
Section 4 of AO No. 372 does not present a case ripe for adjudication. The
language of Section 4 does not conclusively show that, on its face, the constitutional
provision on the automatic release of the IRA shares of the LGUs has been violated.
Section 4, as worded, expresses the idea that the withholding is merely temporary
which fact alone would not merit an outright conclusion of its unconstitutionality,
especially in light of the reasonable presumption that administrative agencies act in
conformity with the law and the Constitution. Where 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.
Petitioners have not shown that the alleged 5% IRA share of LGUs that was temporarily
withheld has not yet been released, or that the Department of Budget and Management
(DBM) has refused and continues to refuse its release. In view thereof, the Court should
not decide as this case suggests an abstract proposition on constitutional issues.
The President is the chief fiscal officer of the country. He is ultimately responsible
for the collection and distribution of public money:

SECTION 3. Powers and Functions. - The Department of Budget and Management

shall assist the President in the preparation of a national resources and expenditures
budget, preparation, execution and control of the National Budget, preparation and
maintenance of accounting systems essential to the budgetary process, achievement of
more economy and efficiency in the management of government operations,
administration of compensation and position classification systems, assessment of
organizational effectiveness and review and evaluation of legislative proposals having
budgetary or organizational implications.1

In a larger context, his role as chief fiscal officer is directed towards "the nation's efforts
at economic and social upliftment"2 for which more specific economic powers are
delegated. Within statutory limits, the President can, thus, fix "tariff rates, import and
export quotas, tonnage and wharfage dues, and other duties or imposts within the
framework of the national development program of the government, 3 as he is also
responsible for enlisting the country in international economic agreements. 4 More than
this, to achieve "economy and efficiency in the management of government operations,"
the President is empowered to create appropriation reserves,5 suspend expenditure
appropriations,6 and institute cost reduction schemes.7
As chief fiscal officer of the country, the President supervises fiscal development in
the local government units and ensures that laws are faithfully executed. 8 For this
reason, he can set aside tax ordinances if he finds them contrary to the Local
Government Code.9 Ordinances cannot contravene statutes and public policy as
declared by the national govemment.10 The goal of local economy is not to "end the
relation of partnership and inter-dependence between the central administration and
local government units,"11 but to make local governments "more responsive and
accountable" [to] "ensure their fullest development as self-reliant communities and
make them more effective partners in the pursuit of national development and social
progress."12
The interaction between the national government and the local government units is
mandatory at the planning level. Local development plans must thus hew to "national
policies and standards13 as these are integrated into the regional development plans for
submission to the National Economic Development Authority. " 14 Local budget plans and
goals must also be harmonized, as far as practicable, with "national development goals
and strategies in order to optimize the utilization of resources and to avoid duplication in
the use of fiscal and physical resources."15
 Section 4 of AO No. 372 was issued in the exercise by the President not only of his
power of general supervision, but also in conformity with his role as chief fiscal officer of
the country in the discharge of which he 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 16 and
statutory17mandates.
However, the phrase "automatic release" of the LGUs' shares does not mean that
the release of the funds is mechanical, spontaneous, self-operating or reflex. IRAs must
first be determined, and the money for their payment collected. 18 In this regard,
administrative documentations are also undertaken to ascertain their availability, limits
and extent. The phrase, thus, should be used in the context of the whole budgetary
process and in relation to pertinent laws relating to audit and accounting requirements.
In the workings of the budget for the fiscal year, appropriations for expenditures are
supported by existing funds in the national coffers and by proposals for revenue raising.
The money, therefore, available for IRA release may not be existing but merely
inchoate, or a mere expectation. It is not infrequent that the Executive Department's
proposals for raising revenue in the form of proposed legislation may not be passed by
the legislature. As such, the release of IRA should not mean release of absolute
amounts based merely on mathematical computations. There must be a prior
determination of what exact amount the local government units are actually entitled in
light of the economic factors which affect the fiscal situation in the country. Foremost of
these is where, due to an unmanageable public sector deficit, the President may make
the necessary adjustments in the IRA of LGUs. Thus, as expressly provided in Article
284 of the Local Government Code:
x x x (I)n the event that the national government incurs an
unmanageable public sector deficit, the President of the Philippines is
hereby authorized, upon the 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 national internal
revenue taxes of the third fiscal year preceding the current fiscal year.
x x x.
Under the aforecited provision, if facts reveal that the economy has sustained or will
likely sustain such "unmanageable public sector deficit," then the LGUs cannot assert
absolute right of entitlement to the full amount of forty percent (40%) share in the IRA,
because the President is authorized to make an adjustment and to reduce the amount
to not less than thirty percent (30%). It is, therefore, impractical to immediately release
the full amount of the IRAs and subsequently require the local government units to
return at most ten percent (10%) once the President has ascertained that there exists
an unmanageable public sector deficit.
 By necessary implication, the power to make necessary adjustments (including
reduction) in the IRA in case of an unmanageable public sector deficit, includes the
discretion to withhold the IRAs temporarily until such time that the determination of the
actual fiscal situation is made. The test in determining whether one power is necessarily
included in a stated authority is: "The exercise of a more absolute power necessarily
includes the lesser power especially where it is needed to make the first power
effective."19 If the discretion to suspend temporarily the release of the IRA pending such
examination is withheld from the President, his authority to make the necessary IRA
adjustments brought about by the unmanageable public sector deficit would be
emasculated in the midst of serious economic crisis. In the situation conjured by the
majority opinion, the money would already have been gone even before it is determined
that fiscal crisis is indeed happening.
The majority opinion overstates the requirement in Section 286 of the Local
Government Code that the IRAs "shall not be subject to any lien or holdback that may
be imposed by the national government for whatever purpose" as proof that no
withholding of the release of the IRAs is allowed albeit temporary in nature.
It is worthy to note that this provision does not appear in the Constitution. Section 6,
Art X of the Constitution merely directs that LGUs "shall have a just share" in the
national taxes "as determined by law" and which share shall be automatically released
to them. This means that before the LGUs share is released, there should be first a
determination, which requires a process, of what is the correct amount as dictated by
existing laws. For one, the Implementing Rules of the Local Government Code allows
deductions from the IRAs, to wit:

Article 384. Automatic Release of IRA Shares of LGUs:

xxx

(c) The IRA share of LGUs shall not be subject to any lien or hold back
that may be imposed by the National Government for whatever purpose
unless otherwise provided in the Code or other applicable laws and loan
contract on project agreements arising from foreign loans and international
commitments, such as premium contributions of LGUs to the Government
Service Insurance System and loans contracted by LGUs under foreign-
assisted projects.

Apart from the above, other mandatory deductions are made from the IRAs prior to
their release, such as: (1) total actual cost of devolution and the cost of city-funded
hospitals;20 and (2) compulsory contributions21 and other remittances.22 It follows,
therefore, that the President can withhold portions of IRAs in order to set-off or
compensate legitimately incurred obligations and remittances of LGUs.
Significantly, Section 286 of the Local Government Code does not make mention of
the exact amount that should be automatically released to the LGUs. The provision
does not mandate that the entire 40% share mentioned in Section 284 shall be
released. It merely provides that the "share" of each LGU shall be released and which
"shall not be subject to any lien or holdback that may be imposed by the national
government for whatever purpose." The provision on automatic release of IRA share
should, thus, be read together with Section 284, including the proviso on adjustment or
reduction of IRAs, as well as other relevant laws. It may happen that the share of the
LGUs may amount to the full forty percent (40%) or the reduced amount of thirty percent
(30%) as adjusted without any law being violated. In other words, all that Section 286
requires is the automatic release of the amount that the LGUs are rightfully and
legally entitled to, which, as the same section provides, should not be less than thirty
percent (30%) of the collection of the national revenue taxes. So that even if five
percent (5%) or ten percent (10%) is either temporarily or permanently withheld, but the
minimum of thirty percent (30%) allotment for the LGUs is released pursuant to the
President's authority to make the necessary adjustment in the LGUS' share, there is still
full compliance with the requirements of the automatic release of the LGUs' share.
Finally, the majority insists that the withholding of ten percent (10%) or five percent
(5%) of the IRAs could not have been done pursuant to the power of the President to
adjust or reduce such shares under Section 284 of the Local Government Code
because there was no showing of an unmanageable public sector deficit by the national
government, nor was there evidence that consultations with the presiding officers of
both Houses of Congress and the presidents of the various leagues had taken place
and the corresponding recommendations of the Secretary of Finance, Secretary of
Interior and Local Government and the Budget Secretary were made.
I beg to differ. The power to determine whether there is an unmanageable public
sector deficit is lodged in the President. The President's determination, as fiscal
manager of the country, of the existence of economic difficulties which could amount to
"unmanageable public sector deficit" should be accorded respect. In fact, the
withholding of the ten percent (10%) of the LGUs' share was further justified by the
current economic difficulties brought about by the peso depreciation as shown by one of
the "WHEREASES" of AO No. 372.23 In the absence of any showing to the contrary, it
is presumed that the President had made prior consultations with the officials thus
mentioned and had acted upon the recommendations of the Secretaries of Finance,
Interior and Local Government and Budget.24
Therefore, even assuming hypothetically that there was effectively a deduction of
five percent (5%) of the LGUs' share, which was in accordance with the President's
prerogative in view of the pronouncement of the existence of an unmanageable public
sector deficit, the deduction would still be valid in the absence of any proof that the
LGUs' allotment was less than the thirty percent (30%) limit provided for in Section 284
of the Local Government Code.
In resume, the withholding of the amount equivalent to five percent (5%) of the IRA
to the LGUs was temporary pending determination by the Executive of the actual share
which the LGUs are rightfully entitled to on the basis of the applicable laws, particularly
Section 284 of the Local Government Code, authorizing the President to make the
necessary adjustments in the IRA of LGUs in the event of an unmanageable public
sector deficit. And assuming that the said five percent (5%) of the IRA pertaining to the
1998 Fiscal Year has been permanently withheld, there is no showing that the amount
actually released to the LGUs that same year was less than thirty percent (30%) of the
national internal revenue taxes collected, without even considering the proper
deductions allowed by law.
WHEREFORE, I vote to DISMISS the petition.
 [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. The Oversight Committee (referred to as the
[1]

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. Further, to address the funding shortfalls of
[2]

functions and services devolved to the LGUs and other funding requirements
of the program, the Devolution Adjustment and Equalization Fund was
created. For 1998, the DBM was directed to set aside an amount to be
[3]

determined by the Oversight Committee based on the devolution status

appraisal surveys undertaken by the DILG. The initial fund was to be sourced
[4]

from the available savings of the national government for CY 1998. For 1999
[5]

and the succeeding years, the corresponding amount required to sustain the
program was to be incorporated in the annual GAA. The Oversight [6]

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%. This formula has been
[8]

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. Accordingly, it has been held that the interest of a party assailing
[9]

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. In any case, the rule on hierarchy of courts will
[11]

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. Even in cases where supervening events
[13]

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. For the [15]

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. In Article II of the Constitution, the State
[16]

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. This [17]

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 was enacted to flesh out the
[20]

mandate of the Constitution. The State policy on local autonomy is amplified

[21]

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, viz: [22]

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. Moreover, as correctly posited by the
[27]

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. In fact, its creation was placed under the title of Transitory
[29]

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. The Oversight [30]

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 in this wise:
[33]

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 is particularly instructive. The Court
[35]

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 of the Local Government Code provides that, beginning the
[38]

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%. For [39]

2000, P3.5 billion of the LGSEF was allocated in this manner: Provinces 26%;
Cities 23%; Municipalities 35%; Barangays 26%. For 2001, P3 billion of the
[40]

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. Any provision therein which is intended to amend
[43]
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. While the 1935 Constitution had no specific article on local
[45]

autonomy, nonetheless, it limited the executive power over local governments

to general supervision ... as may be provided by law. Subsequently, the
[46]

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. An entire article on
[47]

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. As eloquently put by
[48]

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.
 [G.R. No. 144256. June 8, 2005]

ALTERNATIVE CENTER FOR ORGANIZATIONAL REFORMS AND

DEVELOPMENT, INC. (ACORD), BALAY MINDANAW
FOUNDATION, INC. (BMFI); BARRIOS, INC.; CAMARINES SUR
NGO-PO DEVELOPMENT NETWORK, INC. (CADENET); CENTER
FOR PARTICIPATORY GOVERNANCE (CPAG);
ENVIRONMENTAL LEGAL ASSISTANCE CENTER, INC. (ELAC);
FELLOWSHIP FOR ORGANIZING ENDEAVORS (FORGE);
FOUNDATION FOR LOCAL AUTONOMY AND GOOD
GOVERNNANCE, INC. (FLAGG); INSTITUTE OF POLITICS AND
GOVERNANCE (IPG); KAISAHAN PARA SA KAUNLARAN NG
KANAYUNAN AT REPORMANG PANSAKAHAN (KAISAHAN);
MANGGAGAGAWANG KABABAIHANG MITHI AY PAGLAYA
(MAKALAYA); NAGA CITY PEOPLES COUNCIL (NCPC); NGO-PO
COUNCIL OF CAMARINES SUR FOR COMMUNITY
PARTICIPATION AND EMPOWERMENT, INC. (NPCCS); PAILIG
DEVELOPMENT FOUNDATION INC. (PDFI); PHILIPPINE
ECUMENICAL ACTION FOR COMMUNITY EMPOWERMENT
FOUNDATION, INC. (PEACE FOUNDATION, INC.); PHILIPPINE
PARTNERSHIP FOR THE DEVELOPMENT OF HUMAN
RESOURCES IN RURAL AREAS (PHILDHRRA); PILIPINA, INC.
(ANG KILUSAN NG KABABAIHANG PILIPINO); SENTRO NG
ALTERNATIBONG LINGAP PANLIGAL (SALIGAN); URBAN LAND
REFORM TASK FORCE (ULR-TF); ADELINO C. LAVADOR;
PUNONG BARANGAY ISABEL MENDEZ; PUNONG BARANGAY
CAROLINA ROMANOS, petitioners, vs. HON. RONALDO
ZAMORA, in his capacity as Executive Secretary, HON.
BENJAMIN DIOKNO, in his capacity as Secretary, Department of
Budget and Management, HON. LEONOR MAGTOLIS-BRIONES,
in her capacity as National Treasurer, and the COMMISSION ON
AUDIT,respondents.

DECISION
CARPIO MORALES, J.:

Pursuant to Section 22, Article VII of the Constitution mandating the

[1]

President to submit to Congress a budget of expenditures within thirty days

before the opening of every regular session, then President Joseph Ejercito
Estrada submitted the National Expenditures Program for Fiscal Year 2000. In
the said Program, the President proposed an Internal Revenue Allotment
(IRA) in the amount of P121,778,000,000 following the formula provided for in
Section 284 of the Local Government Code of 1992, viz:

SECTION 284. Allotment of Internal Revenue Taxes. Local government units shall
have a share in the national internal revenue taxes based on the collection of the third
fiscal year preceding the current fiscal year as follows:

(a) On the first year of the effectivity of this Code, thirty percent (30%);

(b) On the second year, thirty-five percent (35%); and

(c) On the third year and thereafter, forty percent (40%).

x x x (Emphasis supplied)

On February 16, 2000, the President approved House Bill No. 8374 a bill
sponsored in the Senate by then Senator John H. Osmea who was the
Chairman of the Committee on Finance. This bill became Republic Act No.
8760, AN ACT APPROPRIATING FUNDS FOR THE OPERATION OF THE
GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES FROM
JANUARY ONE TO DECEMBER THIRTY-ONE, TWO THOUSAND, AND
FOR OTHER PURPOSES.
The act, otherwise known as the General Appropriations Act (GAA) for the
Year 2000, provides under the heading ALLOCATIONS TO LOCAL
GOVERNMENT UNITS that the IRA for local government units shall amount
to P111,778,000,000:

XXXVII. ALLOCATIONS TO LOCAL

GOVERNMENT UNITS

A. INTERNAL REVENUE ALLOTMENT

For apportionment of the shares of local government units in the internal revenue
taxes in accordance with the purpose indicated hereunder ... P111,778,000,000

New Appropriations, by Purpose

Current Operating Expenditures

Maintenance
 and Other
Personal Operating Capital
Services Expenses Outlays Total

A. PURPOSE(S)

a. Internal Revenue

Allotment P111,778,000,000 P111,778,000,000

xxx

TOTAL NEW

APPROPRIATIONS P111,778,000,000

In another part of the GAA, under the heading UNPROGRAMMED FUND,

it is provided that an amount of P10,000,000,000 (P10 Billion), apart from
the P111,778,000,000 mentioned above, shall be used to fund the IRA, which
amount shall be released only when the original revenue targets submitted by
the President to Congress can be realized based on a quarterly assessment
to be conducted by certain committees which the GAA specifies, namely, the
Development Budget Coordinating Committee, the Committee on Finance of
the Senate, and the Committee on Appropriations of the House of
Representatives.

LIV. UNPROGRAMMED FUND

For fund requirements in accordance with the purposes indicated

hereunder P48,681,831,000

A. PURPOSE(S)

xxxx

6. Additional
Operational
Requirements
and Projects of P14,788,764,000
Agencies

xxxx
Special Provisions

1. Release of the Fund. The amounts herein appropriated shall be released

only when the revenue collections exceed the original revenue targets
submitted by the President of the Philippines to Congress pursuant to Section
22, Article VII of the Constitution or when the corresponding funding or
receipts for the purpose have been realized except in the special cases covered
by specific procedures in Special Provision Nos. 2, 3, 4, 5, 7, 8, 9, 13 and 14
herein: PROVIDED, That in cases of foreign-assisted projects, the existence
of a perfected loan agreement shall be sufficient compliance for the issuance
of a Special Allotment Release Order covering the loan proceeds:
PROVIDED, FURTHER, That no amount of the Unprogrammed Fund shall
be funded out of the savings generated from programmed items in this Act.

xxxx

4. Additional Operational Requirements and Projects of Agencies. The

appropriations for Purpose 6 Additional Operational Requirements and
Projects of Agencies herein indicated shall be released only when the original
revenue targets submitted by the President of the Philippines to Congress
pursuant to Section 22, Article VII of the Constitution can be realized based
on a quarterly assessment of the Development Budget Coordinating
Committee, the Committee on Finance of the Senate and the Committee on
Appropriations of the House of Representatives and shall be used to fund the
following:

xxxx

Internal Revenue Allotments

Maintenance and
Other Operating
Expenses P10,000,000,000

--------------------

Total, IRA P10,000,000,000

xxxx

Total P14,788,764,000
x x x x (Emphasis supplied)

Thus, while the GAA appropriates P111,778,000,000 of IRA

as Programmed Fund, it appropriates a separate amount of P10 Billion of
IRA under the classification of Unprogrammed Fund, the latter amount to be
released only upon the occurrence of the condition stated in the GAA.
On August 22, 2000, a number of non-governmental organizations
(NGOs) and peoples organizations, along with three barangay officials filed
with this Court the petition at bar, for Certiorari, Prohibition and Mandamus
With Application for Temporary Restraining Order, against respondents then
Executive Secretary Ronaldo Zamora, then Secretary of the Department of
Budget and Management Benjamin Diokno, then National Treasurer Leonor
Magtolis-Briones, and the Commission on Audit, challenging the
constitutionality of above-quoted provision of XXXVII (ALLOCATIONS TO
LOCAL GOVERNMENT UNITS) referred to by petitioners as Section 1,
XXXVII (A), and LIV (UNPROGRAMMED FUND) Special Provisions 1 and 4
of the GAA (the GAA provisions).

Petitioners contend that:

1. SECTION 1, XXXVII (A) AND LIV, SPECIAL PROVISIONS 1 AND 4,

OF THE YEAR 2000 GAA ARE NULL AND VOID FOR BEING
UNCONSTITUTIONAL AS THEY VIOLATE THE AUTONOMY OF
LOCAL GOVERNMENTS BY UNLAWFULLY REDUCING BY TEN
BILLION PESOS (P10 BILLION) THE INTERNAL REVENUE
ALLOTMENTS DUE TO THE LOCAL GOVERNMENTS AND
WITHHOLDING THE RELEASE OF SUCH AMOUNT BY PLACING
THE SAME UNDER UNPROGRAMMED FUNDS. THIS VIOLATES
THE CONSTITUTIONAL MANDATE IN ART. X, SEC. 6, THAT THE
LOCAL GOVERNMENT UNITS JUST SHARE IN THE NATIONAL
TAXES SHALL BE AUTOMATICALLY RELEASED TO THEM. IT
ALSO VIOLATES THE LOCAL GOVERNMENT CODE,
SPECIFICALLY, SECS. 18, 284, AND 286.

2. SECTION 1, XXXVII (A) AND LIV, SPECIAL PROVISIONS 1 AND 4,

OF THE YEAR 2000 GAA ARE NULL AND VOID FOR BEING
UNCONSTITUTIONAL AS THEY VIOLATE THE AUTONOMY OF
LOCAL GOVERNMENTS BY PLACING TEN BILLION PESOS (P10
BILLION) OF THE INTERNAL REVENUE ALLOTMENTS DUE TO
THE LOCAL GOVERNMENTS, EFFECTIVELY AND
 PRACTICALLY, WITHIN THE CONTROL OF THE CENTRAL
AUTHORITIES.

3. SECTION 1, XXXVII (A) AND LIV, SPECIAL PROVISIONS 1 AND 4,

OF THE YEAR 2000 GAA ARE NULL AND VOID FOR BEING
UNCONSTITUTIONAL AS THE PLACING OF P10 BILLION PESOS
OF THE IRA UNDER UNPROGRAMMED FUNDS CONSTITUTES
AN UNDUE DELEGATION OF LEGISLATIVE POWER TO THE
RESPONDENTS.

4. SECTION 1, XXXVII (A) AND LIV, SPECIAL PROVISIONS 1 AND 4,

OF THE YEAR 2000 GAA ARE NULL AND VOID FOR BEING
UNCONSTITUTIONAL AS THE PLACING OF P10 BILLION PESOS
OF THE IRA UNDER UNPROGRAMMED FUNDS CONSTITUTES
AN AMENDMENT OF THE LOCAL GOVERNMENT CODE OF 1991,
WHICH CANNOT BE DONE IN A GENERAL APPROPRIATIONS
ACT AND WHICH PURPOSE WAS NOT REFLECTED IN THE TITLE
OF THE YEAR 2000 GAA.

5. THE YEAR 2000 GAAS REDUCTION OF THE IRA UNDERMINES

THE FOUNDATION OF OUR LOCAL GOVERNANCE
SYSTEM WHICH IS ESSENTIAL TO THE EFFICIENT OPERATION
OF THE GOVERNMENT AND THE DEVELOPMENT OF THE
NATION.

6. THE CONGRESS AND THE EXECUTIVE, IN PASSING AND

APPROVING, RESPECTIVELY, THE YEAR 2000 GAA, AND THE
RESPONDENTS, IN IMPLEMENTING THE SAID YEAR 2000 GAA,
INSOFAR AS SECTION 1, XXXVII (A) AND LIV, SPECIAL
PROVISIONS 1 AND 4, ARE CONCERNED, ACTED WITH GRAVE
ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF
JURISDICTION AS THEY TRANSGRESSED THE CONSTITUTION
AND THE LOCAL GOVERNMENT CODES PROHIBITION ON ANY
INVALID REDUCTION AND WITHHOLDING OF THE LOCAL
GOVERNMENTS IRA. (Underscoring supplied)

After the parties had filed their respective memoranda, a MOTION FOR
INTERVENTION/MOTION TO ADMIT ATTACHED PETITION FOR
INTERVENTION was filed on October 22, 2001 by the Province of Batangas,
represented by then Governor Hermilando I. Mandanas.
 On November 6, 2001, the Province of Nueva Ecija, represented by
Governor Tomas N. Joson III, likewise filed a MOTION FOR LEAVE OF
COURT TO INTERVENE AND FILE PETITION-IN-INTERVENTION.
The motions for intervention, both of which adopted the arguments of the
main petition, were granted by this Court.
[2] [3]

Although the effectivity of the Year 2000 GAA has ceased, this Court shall
nonetheless proceed to resolve the issues raised in the present case, it being
impressed with public interest. The ruling of this Court in the case of The
Province of Batangas v. Romulo, wherein GAA provisions relating to the IRA
[4]

were likewise challenged, is in point, to wit:

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. 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.

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. 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. [5]

Passing on the arguments of all parties, bearing in mind the dictum that
the court should not form a rule of constitutional law broader than is required
by the precise facts to which it is applied, this Court finds that only the
[6]

following issues need to be resolved in the present petition: (1) whether the
petition contains proper verifications and certifications against forum-
shopping, (2) whether petitioners have the requisite standing to file this suit,
and (3) whether the questioned provisions violate the constitutional injunction
that the just share of local governments in the national taxes or the IRA shall
be automatically released.

Sufficiency of Verification and Certification Against Forum-Shopping

 Respondents assail as improperly executed petitioners verifications and
certifications against forum-shopping as they merely state that the allegations
of the Petition are true of our knowledge and belief instead of true and correct
of our personal knowledge or based on authentic records as required under
Rule 7, Section 4 of the Rules of Court. [7]

Jurisprudence is on petitioners side. In Decano v. Edu, this Court held:

[8]

Respondents finally raise a technical point referring to the allegedly defective

verification of the petition filed in the trial court, contending that the clause in the
verification statement "that I have read the contents of the said petition; and that [to]
the best of my knowledge are true and correct" is insufficient since under section 6 of
Rule 7, it is required that the person verifying must have read the pleading and that the
allegations thereof are true of his own knowledge. We do not see any reason for
rendering the said verification void. The statement to the best of my knowledge are
true and correct referring to the allegations in the petition does not mean mere
knowledge, information and belief. It constitutes substantial compliance with the
requirement of section 6 of Rule 7, as held in Madrigal vs. Rodas (80 Phil. 252.). At
any rate, this petty technicality deserves scant consideration where the question at
issue is one purely of law and there is no need of delving into the veracity of the
allegations in the petition, which are not disputed at all by respondents. As we have
held time and again, imperfections of form and technicalities of procedure are to
be disregarded except where substantial rights would otherwise be prejudiced.
(Emphasis and underscoring supplied)

Respondents go on to claim that the same verifications were signed by

persons who were not authorized by the incorporated cause-oriented groups
which they claim to represent, hence, the Petition should be treated as an
unsigned pleading.
Indeed, only duly authorized natural persons may execute verifications in
behalf of juridical entities such as petitioners NGOs and peoples
organizations. As this Court held in Santos v. CA, In fact, physical actions,
e.g., signing and delivery of documents, may be performed on behalf of the
corporate entity only by specifically authorized individuals. [9]

Nonetheless, the present petition cannot be treated as an unsigned

pleading. For even if the rule that representatives of corporate entities must
present the requisite authorization were to be strictly applied, there would
remain among the multi-group-petitioners the individuals who validly executed
verifications in their own names, namely, petitioners Adelino C. Lavador,
Punong Barangay Isabel Mendez, and Punong Barangay Carolina Romanos.
 At all events, in light of the following ruling of this Court in Shipside Inc. v.
CA: [10]

. . . in Loyola, Roadway, and Uy, the Court excused non-compliance with the
requirement as to the certificate of non-forum shopping. With more reason should we
allow the instant petition since petitioner herein did submit a certification on non-
forum shopping, failing only to show proof that the signatory was authorized to do
so. That petitioner subsequently submitted a secretarys certificate attesting that Balbin
was authorized to file an action on behalf of petitioner likewise mitigates this
oversight.

It must also be kept in mind that while the requirement of the certificate of non-forum
shopping is mandatory, nonetheless the requirements must not be interpreted too
literally and thus defeat the objective of preventing the undesirable practice of forum-
shopping (Bernardo v. NLRC, 255 SCRA 108 [1996]). Lastly, technical rules of
procedure should be used to promote, not frustrate justice. While the swift unclogging
of court dockets is a laudable objective, the granting of substantial justice is an even
more urgent ideal. (Underscoring supplied),

a too literal interpretation must be avoided if it defeats the objective of

preventing the practice of forum shopping.

Standing

Respondents assail petitioners standing in this controversy, proffering that

it is the local government units each having a separate juridical entity which
stand to be injured.
The subsequent intervention of the provinces of Batangas and Nueva
Ecija which have adopted the arguments of petitioners has, however, made
the question of standing academic. [11]

Respondents, contending that petitioners have no cause of action against

them as they claim to have no responsibility with respect to the mandate of
the GAA provisions, proffer that the committees mentioned in the GAA
provisions, namely, the Development Budget Coordinating Committee,
Committee on Finance of the Senate, and Committee on Appropriations of the
House of Representatives, should instead have been impleaded.
Respondents position does not lie.
 The GAA provisions being challenged were not to be implemented solely
by the committees specifically mentioned therein, for they being in the nature
of appropriations provisions, they were also to be implemented by the
executive branch, particularly the Department of Budget and Management
(DBM) and the National Treasurer. The task of the committees related merely
to the conduct of the quarterly assessment required in the provisions, and not
in the actual release of the IRA which is the duty of the executive. Since the
present controversy centers on the proper manner of releasing the IRA, the
impleaded respondents are the proper parties to this suit.
In fact in earlier petitions likewise involving the constitutionality of
provisions of previous general appropriations acts which this Court granted,
the therein respondent officials were the same as those in the present
case, e.g., Guingona v. Carague and PHILCONSA v. Enriquez.
[12] [13]

Constitutionality of the GAA Provisions

Article X, Section 6 of the Constitution provides:

SECTION 6. Local government units shall have a just share, as determined by law, in
the national taxes which shall be automatically released to them.

Petitioners argue that the GAA violated this constitutional mandate when it
made the release of IRA contingent on whether revenue collections could
meet the revenue targets originally submitted by the President, rather than
making the release automatic.
Respondents counterargue that the above constitutional provision
is addressed not to the legislature but to the executive, hence, the same
does not prevent the legislature from imposing conditions upon the release of
the IRA. They cite the exchange between Commissioner (now Chief Justice)
Davide and Commissioner Nolledo in the deliberations of the Constitutional
Commission on the above-quoted Sec. 6, Art. X of the Constitution, to wit:

THE PRESIDENT. How about the second sentence?

MR. DAVIDE. The second sentence would be a new section that would be Section
13. As modified it will read as follows: LOCAL GOVERNMENT UNITS SHALL
HAVE A JUST SHARE, AS DETERMINED BY LAW, in the national taxes WHICH
SHALL BE automatically PERIODICALLY released to them.

MR. NOLLEDO. That will be Section 12, subsection (1) in the amendment.
MR. DAVIDE. No, we will just delete that because the second would be another
section so Section 12 would only be this: LOCAL GOVERNMENT UNITS SHALL
HAVE A JUST SHARE, AS DETERMINED BY LAW, in the national taxes WHICH
SHALL BE automatically PERIODICALLY released to them.

MR. NOLLEDO. But the word PERIODICALLY may mean possibly withholding the
automatic release to them by adopting certain periods of automatic release. If we use
the word automatically without PERIODICALLY, the latter may be already
contemplated by automatically. So, the Committee objects to the word
PERIODICALLY.

MR. DAVIDE. If we do not say PERIODICALLY, it might be very, very difficult to

comply with it because these are taxes collected and actually released by the national
government every quarter. It is not that upon collection a portion should immediately
be released. It is quarterly. Otherwise, the national government will have to remit
everyday and that would be very expensive.

MR. NOLLEDO. That is not hindered by the word automatically. But if we put
automatically and PERIODICALLY at the same time, that means certain periods have
to be observed as will be set forth by the Budget Officer thereby negating the
meaning of automatically.

MR. DAVIDE. On the other hand, if we do not state PERIODICALLY, it may be

done every semester; it may be done at the end of the year. It is still automatic release.

MR. NOLLEDO. As far as the Committee is concerned, we vigorously object to the

word PERIODICALLY.

MR. DAVIDE. Only the word PERIODICALLY?

MR. NOLLEDO. If the Commissioner is amenable to deleting that, we will accept the
amendment.

MR. DAVIDE. I will agree to the deletion of the word PERIODICALLY.

MR. NOLLEDO. Thank you.

The Committee accepts the amendment. (Emphasis supplied) [14]

In the above exchange of statements, it is clear that although

Commissioners Davide and Nolledo held different views with regard to the
proper wording of the constitutional provision, they shared a common
assumption that the entity which would execute the automatic release of
internal revenue was the executive department.
Commissioner Davide referred to the national government as the entity
that collects and remits internal revenue. Similarly, Commissioner Nolledo
alluded to the Budget Officer, who is clearly under the executive branch.
Respondents thus infer that the subject constitutional provision merely
prevents the executive branch of the government from unilaterally withholding
the IRA, but not the legislature from authorizing the executive branch to
withhold the same. In the words of respondents, This essentially means that
the President or any member of the Executive Department cannot
unilaterally, i.e., without the backing of statute, withhold the release of the
IRA.[15]

Respondents position does not lie.

As the Constitution lays upon the executive the duty to automatically
release the just share of local governments in the national taxes, so it enjoins
the legislature not to pass laws that might prevent the executive from
performing this duty. To hold that the executive branch may disregard
constitutional provisions which define its duties, provided it has the backing of
statute, is virtually to make the Constitution amendable by statute a
proposition which is patently absurd.
Moreover, there is merit in the argument of the intervenor Province of
Batangas that, if indeed the framers intended to allow the enactment of
statutes making the release of IRA conditional instead of automatic, then
Article X, Section 6 of the Constitution would have been worded differently.
Instead of reading Local government units shall have a just share, as
determined by law, in the national taxes which shall be automatically released
to them (italics supplied), it would have read as follows, so the Province of
Batangas posits:

Local government units shall have a just share, as determined by law, in the national
taxes which shall be [automatically] released to them as provided by law, or,

Local government units shall have a just share in the national taxes which shall be
[automatically] released to them as provided by law, or

Local government units shall have a just share, as determined by law, in the national
taxes which shall be automatically released to them subject to exceptions Congress
may provide. (Italics supplied)
[16]
 Since, under Article X, Section 6 of the Constitution, only the just share of
local governments is qualified by the words as determined by law, and not the
release thereof, the plain implication is that Congress is not authorized by the
Constitution to hinder or impede the automatic release of the IRA.
Indeed, that Article X, Section 6 of the Constitution did bind the legislative
just as much as the executive branch was presumed in the ruling of this Court
in the case of The Province of Batangas v. Romulo which is analogous in
[17]

many respects to the one at bar.

In Batangas, the petitioner therein challenged the constitutionality of
certain provisos of the GAAs for FY 1999, 2000, and 2001 which set up the
Local Government Service Equalization Fund (LGSEF). The LGSEF was a
portion of the IRA which was to be released only upon a finding of the
Oversight Committee on Devolution that the LGU concerned had complied
with the guidelines issued by said committee. This Court measured the
challenged legislative acts against Article X, Section 6 and declared them
unconstitutional a ruling which presupposes that the legislature, like the
executive, is mandated by said constitutional provision to ensure that the just
share of local governments in the national taxes are automatically released.
Respondents, in further support of their claim that the automatic release
requirement in the Constitution constrains only the executive branch and not
the legislature, cite three statutory provisions whereby the legislature
authorized the executive branch to withhold the IRA in certain circumstances,
namely, Section 70 of the Philippine National Police Reform and
Reorganization Act of 1998, Section 531(e) of the Local Government
[18]

Code, and Section 10 of Republic Act 7924 (1995). Towards the same end,
[19] [20]

respondents also cite Rule XXXII, Article 383(c) of the Rules and Regulations
Implementing the Local Government Code. [21]

While statutes and implementing rules are entitled to great weight in

constitutional construction as indicators of contemporaneous interpretation,
such interpretation is not necessarily binding or conclusive on the courts.
In Taada v. Cuenco, the Court held:

As a consequence, where the meaning of a constitutional provision is clear, a

contemporaneous or practical . . . executive interpretation thereof is entitled to no
weight and will not be allowed to distort or in any way change its natural
meaning. The reason is that the application of the doctrine of contemporaneous
construction is more restricted as applied to the interpretation
of constitutional provisions than when applied to statutory provisions, and that except
as to matters committed by the constitution itself to the discretion of some other
department, contemporaneous or practical construction is not necessarily binding
upon the courts, even in a doubtful case. Hence, if in the judgment of the court, such
construction is erroneous and its further application is not made imperative by any
paramount considerations of public policy, it may be rejected. (Emphasis and
underscoring supplied, citations omitted) [22]

The validity of the legislative acts assailed in the present case should,
therefore, be assessed in light of Article X, Section 6 of the Constitution.
Again, in Batangas, this Court interpreted the subject constitutional
[23]

provision as follows:

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.

xxx

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. x x x (Emphasis and underscoring supplied) [24]

Further on, the Court held:

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. 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. x x x (Emphasis and
underscoring supplied) [25]

While automatic release implies that the just share of the local
governments determined by law should be released to them as a matter of
course, the GAA provisions, on the other hand, withhold its release pending
an event which is not even certain of occurring. To rule that the term
automatic release contemplates such conditional release would be to strip the
term automatic of all meaning.
Additionally, to interpret the term automatic release in such a broad
manner would be inconsistent with the ruling in Pimentel v. Aguirre. In the [26]

said case, the executive withheld the release of the IRA pending an
assessment very similar to the one provided in the GAA. This Court ruled that
such withholding contravened the constitutional mandate of an automatic
release, 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. x x
x (Italics in the original; underscoring supplied)
[27]

There is no substantial difference between the withholding of IRA involved

in Pimentel and that in the present case, except that here it is the legislature,
not the executive, which has authorized the withholding of the IRA. The
distinction notwithstanding, the ruling in Pimentel remains applicable. As
explained above, Article X, Section 6 of the Constitution the same provision
relied upon in Pimentel enjoins both the legislative and executive branches of
government. Hence, as in Pimentel, under the same constitutional provision,
the legislative is barred from withholding the release of the IRA.
It bears stressing, however, that in light of the proviso in Section 284 of the
Local Government Code which reads:
Provided, That in the event that the national government incurs an unmanageable
public sector deficit, the President of the Philippines is hereby authorized, upon the
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 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
personal services. (Underscoring supplied),

the only possible exception to mandatory automatic release of the IRA is, as
held in Batangas:

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. x x x[28]

A final word. This Court recognizes that the passage of the GAA
provisions by Congress was motivated by the laudable intent to lower the
budget deficit in line with prudent fiscal management. The pronouncement
[29]

in Pimentel, however, must be echoed: [T]he 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. [30]

WHEREFORE, the petition is GRANTED. XXXVII and LIV Special

Provisions 1 and 4 of the Year 2000 GAA are hereby declared
unconstitutional insofar as they set apart a portion of the IRA, in the amount
of P10 Billion, as part of the UNPROGRAMMED FUND.
SO ORDERED.
DATU MICHAEL ABAS KIDA, G.R. No. 196271
in his personal capacity, and in
representation of MAGUINDANAO Present:
FEDERATION OF AUTONOMOUS
IRRIGATORS ASSOCIATION, INC., HADJI
MUHMINA J. USMAN, JOHN ANTHONY CORONA, C.J.,
L. LIM, JAMILON T. ODIN, ASRIN CARPIO,
TIMBOL JAIYARI, MUJIB M. KALANG, VELASCO, JR.,
ALIH AL-SAIDI J. SAPI-E, KESSAR LEONARDO-DE CASTRO,
DAMSIE ABDIL, and BASSAM ALUH BRION,
SAUPI, PERALTA,
BERSAMIN,
Petitioners,
DEL CASTILLO,
ABAD,
VILLARAMA, JR.,
PEREZ,
- versus - MENDOZA,
SERENO,
REYES, and
PERLAS-BERNABE, JJ.

SENATE OF THE PHILIPPINES,

represented by its President JUAN Promulgated:
PONCE ENRILE, HOUSE OF
REPRESENTATIVES, thru SPEAKER
FELICIANO BELMONTE, COMMISSION October 18, 2011
ON ELECTIONS, thru its Chairman,
SIXTO BRILLANTES, JR., PAQUITO
OCHOA, JR., Office of the President
Executive Secretary, FLORENCIO ABAD,
JR., Secretary of Budget, and ROBERTO
TAN, Treasurer of the Philippines,
Respondents.
x----------------------------------------------x
BASARI D. MAPUPUNO,

Petitioner,

- versus - G.R. No. 196305

SIXTO BRILLANTES, in his capacity as

Chairman of the Commission on
Elections, FLORENCIO ABAD, JR. in his
capacity as Secretary of the
Department of Budget and
Management, PACQUITO OCHOA, JR.,
in his capacity as Executive Secretary,
JUAN PONCE ENRILE, in his capacity as
Senate President, and FELICIANO
BELMONTE, in his capacity as Speaker
of the House of Representatives,
Respondents.
x----------------------------------------------x

REP. EDCEL C. LAGMAN,

Petitioner,
- versus -

PAQUITO N. OCHOA, JR., in his

capacity as the Executive Secretary,
and the COMMISSION ON ELECTIONS,
G.R. No. 197221
Respondents.

x----------------------------------------------x

ALMARIM CENTI TILLAH, DATU

CASAN CONDING CANA, and PARTIDO
DEMOKRATIKO PILIPINO LAKAS NG
BAYAN (PDP-LABAN),
Petitioners,

- versus -

THE COMMISSION ON ELECTIONS,

through its Chairman, SIXTO
BRILLANTES, JR., HON. PAQUITO N. G.R. No. 197280
OCHOA, JR., in his capacity as
Executive Secretary, HON. FLORENCIO
B. ABAD, JR., in his capacity as
Secretary of the Department of Budget
and Management, and HON. ROBERTO
B. TAN, in his capacity as Treasurer of
the Philippines,
Respondents.

x----------------------------------------------x

ATTY. ROMULO B. MACALINTAL,

Petitioner,

- versus -

COMMISSION ON ELECTIONS and THE

OFFICE OF THE PRESIDENT, through
EXECUTIVE SECRETARY PAQUITO N.
OCHOA, JR.,
Respondents.
x----------------------------------------------x

LUIS BAROK BIRAOGO,

Petitioner,

G.R. No. 197282

- versus -
THE COMMISSION ON ELECTIONS and
EXECUTIVE SECRETARY PAQUITO N.
OCHOA, JR.,
Respondents.
x----------------------------------------------x

JACINTO V. PARAS,
Petitioner,

- versus -

EXECUTIVE SECRETARY PAQUITO N.

OCHOA, JR., and the COMMISSION ON G.R. No. 197392
ELECTIONS,
Respondents.

x--------------------------------------------x

MINORITY RIGHTS FORUM,

PHILIPPINES, INC.,
Respondents-Intervenor.
 G.R. No. 197454

x------------------------------------------------------------------------------------x

DECISION
BRION, J.:

On June 30, 2011, Republic Act (RA) No. 10153, entitled An Act Providing
for the Synchronization of the Elections in the Autonomous Region in Muslim
Mindanao (ARMM) with the National and Local Elections and for Other
Purposes was enacted. The law reset the ARMM elections from the 8th of August
2011, to the second Monday of May 2013 and every three (3) years thereafter, to
coincide with the countrys regular national and local elections. The law as well
granted the President the power to appoint officers-in-charge (OICs) for the Office
of the Regional Governor, the Regional Vice-Governor, and the Members of the
Regional Legislative Assembly, who shall perform the functions pertaining to the
said offices until the officials duly elected in the May 2013 elections shall have
qualified and assumed office.
 Even before its formal passage, the bills that became RA No. 10153 already
spawned petitions against their validity; House Bill No. 4146 and Senate Bill No.
2756 were challenged in petitions filed with this Court. These petitions multiplied
after RA No. 10153 was passed.

Factual Antecedents

The State, through Sections 15 to 22, Article X of the 1987 Constitution,

mandated the creation of autonomous regions in Muslim Mindanao and
the Cordilleras. Section 15 states:

Section 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.

Section 18 of the Article, on the other hand, directed Congress to enact an

organic act for these autonomous regions to concretely carry into effect the
granted autonomy.

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

The creation of the autonomous region shall be effective when approved by a

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.

On August 1, 1989 or two years after the effectivity of the 1987

Constitution, Congress acted through Republic Act (RA) No. 6734 entitled An Act
Providing for an Organic Act for the Autonomous Region in Muslim Mindanao. A
plebiscite was held on November 6, 1990as required by Section 18(2), Article X of
RA No. 6734, thus fully establishing the Autonomous Region of Muslim Mindanao
(ARMM). The initially assenting provinces were Lanao del Sur, Maguindanao, Sulu
and Tawi-tawi. RA No. 6734 scheduled the first regular elections for the regional
officials of the ARMM on a date not earlier than 60 days nor later than 90 days
after its ratification.

RA No. 9054 (entitled An Act to Strengthen and Expand the Organic Act for the
Autonomous Region in Muslim Mindanao, Amending for the Purpose Republic Act
No. 6734, entitled An Act Providing for the Autonomous Region in Muslim
Mindanao, as Amended) was the next legislative act passed. This law provided
further refinement in the basic ARMM structure first defined in the original
organic act, and reset the regular elections for the ARMM regional officials to the
second Monday of September 2001.

Congress passed the next law affecting ARMM RA No. 9140[1] - on June 22,
2001. This law reset the first regular elections originally scheduled under RA No.
9054, to November 26, 2001. It likewise set the plebiscite to ratify RA No. 9054 to
not later than August 15, 2001.

RA No. 9054 was ratified in a plebiscite held on August 14, 2001.

The province of Basilan and Marawi City voted to join ARMM on the same date.

RA No. 9333[2] was subsequently passed by Congress to reset the ARMM

regional elections to the 2nd Monday of August 2005, and on the same date every
3 years thereafter. Unlike RA No. 6734 and RA No. 9054, RA No. 9333 was not
ratified in a plebiscite.

Pursuant to RA No. 9333, the next ARMM regional elections should have
been held on August 8, 2011. COMELEC had begun preparations for these
elections and had accepted certificates of candidacies for the various regional
offices to be elected. But on June 30, 2011, RA No. 10153 was enacted, resetting
the ARMM elections to May 2013, to coincide with the regular national and local
elections of the country.

RA No. 10153 originated in the House of Representatives as House Bill (HB)

No. 4146, seeking the postponement of the ARMM elections scheduled on August
8, 2011. On March 22, 2011, the House of Representatives passed HB No. 4146,
with one hundred ninety one (191) Members voting in its favor.

After the Senate received HB No. 4146, it adopted its own version, Senate
Bill No. 2756 (SB No. 2756), on June 6, 2011. Thirteen (13) Senators voted
favorably for its passage. On June 7, 2011, the House of Representative concurred
with the Senate amendments, and on June 30, 2011, the President signed RA No.
10153 into law.

As mentioned, the early challenge to RA No. 10153 came through a petition

filed with this Court G.R. No. 196271[3] - assailing the constitutionality of both HB
No. 4146 and SB No. 2756, and challenging the validity of RA No. 9333 as well for
non-compliance with the constitutional plebiscite requirement. Thereafter,
petitioner Basari Mapupuno in G.R. No. 196305 filed another petition[4] also
assailing the validity of RA No. 9333.

With the enactment into law of RA No. 10153, the COMELEC stopped its
preparations for the ARMM elections. The law gave rise as well to the filing of the
following petitions against its constitutionality:
 a) Petition for Certiorari and Prohibition[5] filed by Rep. Edcel Lagman as a
member of the House of Representatives against Paquito Ochoa, Jr. (in his
capacity as the Executive Secretary) and the COMELEC, docketed as G.R.
No. 197221;

b) Petition for Mandamus and Prohibition[6] filed by Atty. Romulo Macalintal

as a taxpayer against the COMELEC, docketed as G.R. No. 197282;

c) Petition for Certiorari and Mandamus, Injunction and Preliminary

Injunction[7] filed by Louis Barok Biraogo against the COMELEC and
Executive Secretary Paquito N. Ochoa, Jr., docketed as G.R. No. 197392;
and

d) Petition for Certiorari and Mandamus[8] filed by Jacinto Paras as a member

of the House of Representatives against Executive Secretary Paquito Ochoa,
Jr. and the COMELEC, docketed as G.R. No. 197454.

Petitioners Alamarim Centi Tillah and Datu Casan Conding Cana as

registered voters from the ARMM, with the Partido Demokratiko Pilipino Lakas ng
Bayan (a political party with candidates in the ARMM regional elections scheduled
for August 8, 2011), also filed a Petition for Prohibition and Mandamus[9] against
the COMELEC, docketed as G.R. No. 197280, to assail the constitutionality of RA
No. 9140, RA No. 9333 and RA No. 10153.

Subsequently, Anak Mindanao Party-List, Minority Rights Forum Philippines, Inc.

and Bangsamoro Solidarity Movement filed their ownMotion for Leave to Admit
their Motion for Intervention and Comment-in-Intervention dated July 18, 2011.
On July 26, 2011, the Court granted the motion. In the same Resolution, the Court
ordered the consolidation of all the petitions relating to the constitutionality of
HB No. 4146, SB No. 2756, RA No. 9333, and RA No. 10153.
Oral arguments were held on August 9, 2011 and August 16, 2011. Thereafter, the
parties were instructed to submit their respective memoranda within twenty (20)
days.

On September 13, 2011, the Court issued a temporary restraining order enjoining
the implementation of RA No. 10153 and ordering the incumbent elective officials
of ARMM to continue to perform their functions should these cases not be
decided by the end of their term on September 30, 2011.

The Arguments

The petitioners assailing RA No. 9140, RA No. 9333 and RA No. 10153 assert that
these laws amend RA No. 9054 and thus, have to comply with the supermajority
vote and plebiscite requirements prescribed under Sections 1 and 3, Article XVII
of RA No. 9094 in order to become effective.

The petitions assailing RA No. 10153 further maintain that it is unconstitutional

for its failure to comply with the three-reading requirement of Section 26(2),
Article VI of the Constitution. Also cited as grounds are the alleged violations of
the right of suffrage of the people of ARMM, as well as the failure to adhere to
the elective and representative character of the executive and legislative
departments of the ARMM. Lastly, the petitioners challenged the grant to the
President of the power to appoint OICs to undertake the functions of the elective
ARMM officials until the officials elected under the May 2013 regular elections
shall have assumed office. Corrolarily, they also argue that the power of
appointment also gave the President the power of control over the ARMM, in
complete violation of Section 16, Article X of the Constitution.

The Issues
From the parties submissions, the following issues were recognized and argued by
the parties in the oral arguments of August 9 and 16, 2011:

I. Whether the 1987 Constitution mandates the synchronization of

elections

II. Whether the passage of RA No. 10153 violates Section 26(2),

Article VI of the 1987 Constitution

III. Whether the passage of RA No. 10153 requires a supermajority

vote and plebiscite

A. Does the postponement of the ARMM regular elections

constitute an amendment to Section 7, Article XVIII of RA
No. 9054?

B. Does the requirement of a supermajority vote for

amendments or revisions to RA No. 9054 violate Section 1
and Section 16(2), Article VI of the 1987 Constitution and
the corollary doctrine on irrepealable laws?

C. Does the requirement of a plebiscite apply only in the

creation of autonomous regions under paragraph 2, Section
18, Article X of the 1987 Constitution?
 IV. Whether RA No. 10153 violates the autonomy granted to the
ARMM

V. Whether the grant of the power to appoint OICs violates:

A. Section 15, Article X of the 1987 Constitution

B. Section 16, Article X of the 1987 Constitution

C. Section 18, Article X of the 1987 Constitution

VI. Whether the proposal to hold special elections is constitutional and

legal.

We shall discuss these issues in the order they are presented above.

OUR RULING

We resolve to DISMISS the petitions and thereby UPHOLD the

constitutionality of RA No. 10153 in toto.

I. Synchronization as a recognized constitutional mandate

The respondent Office of the Solicitor General (OSG) argues that the Constitution
mandates synchronization, and in support of this position, cites Sections 1, 2 and 5,
Article XVIII (Transitory Provisions) of the 1987 Constitution, which provides:

Section 1. The first elections of Members of the Congress under this

Constitution shall be held on the second Monday of May, 1987.
The first local elections shall be held on a date to be determined by the
President, which may be simultaneous with the election of the Members
of the Congress. It shall include the election of all Members of the city
or municipal councils in the Metropolitan Manila area.
Section 2. The Senators, Members of the House of Representatives and
the local officials first elected under this Constitution shall serve
until noon of June 30, 1992.
Of the Senators elected in the election in 1992, the first twelve obtaining
the highest number of votes shall serve for six year and the remaining
twelve for three years.
xxx
Section 5. The six-year term of the incumbent President and Vice
President elected in the February 7, 1986 election is, for purposes of
synchronization of elections, hereby extended to noon of June 30, 1992.
The first regular elections for President and Vice-President under this
Constitution shall be held on the second Monday of May, 1992.
We agree with this position.

While the Constitution does not expressly state that Congress has to
synchronize national and local elections, the clear intent towards this objective can
be gleaned from the Transitory Provisions (Article XVIII) of the
Constitution,[10] which show the extent to which the Constitutional Commission, by
deliberately making adjustments to the terms of the incumbent officials, sought to
attain synchronization of elections.[11]

The objective behind setting a common termination date for all elective
officials, done among others through the shortening the terms of the twelve
winning senators with the least number of votes, is to synchronize the holding of
all future elections whether national or local to once every three years. [12] This
intention finds full support in the discussions during the Constitutional
Commission deliberations.[13]
These Constitutional Commission exchanges, read with the provisions of the
Transitory Provisions of the Constitution, all serve as patent indicators of the
constitutional mandate to hold synchronized national and local elections, starting
the second Monday of May, 1992 and for all the following elections.

This Court was not left behind in recognizing the synchronization of the
national and local elections as a constitutional mandate. In Osmea v. Commission
on Elections,[14] we explained:

It is clear from the aforequoted provisions of the 1987

Constitution that the terms of office of Senators, Members of the House
of Representatives, the local officials, the President and the Vice-
President have been synchronized to end on the same hour, date and year
noon of June 30, 1992.
It is likewise evident from the wording of the above-mentioned
Sections that the term of synchronization is used synonymously as the
phrase holding simultaneously since this is the precise intent in
terminating their Office Tenure on the same day or occasion. This
common termination date will synchronize future elections to once every
three years (Bernas, the Constitution of the Republic of the Philippines,
Vol. II, p. 605).
That the election for Senators, Members of the House of
Representatives and the local officials (under Sec. 2, Art. XVIII) will
have to be synchronized with the election for President and Vice
President (under Sec. 5, Art. XVIII) is likewise evident from the x x
x records of the proceedings in the Constitutional Commission.
[Emphasis supplied.]

Although called regional elections, the ARMM elections should be included

among the elections to be synchronized as it is a local election based on the
wording and structure of the Constitution.
 A basic rule in constitutional construction is that the words used should be
understood in the sense that they have in common use and given their ordinary
meaning, except when technical terms are employed, in which case the
significance thus attached to them prevails.[15]As this Court explained in People v.
Derilo,[16] [a]s the Constitution is not primarily a lawyers document, its language
should be understood in the sense that it may have in common. Its words should
be given their ordinary meaning except where technical terms are employed.

Understood in its ordinary sense, the word local refers to something that primarily
serves the needs of a particular limited district, often a community or minor
political subdivision.[17] Regional elections in the ARMM for the positions of
governor, vice-governor and regional assembly representatives obviously fall
within this classification, since they pertain to the elected officials who will serve
within the limited region of ARMM.

From the perspective of the Constitution, autonomous regions are considered

one of the forms of local governments, as evident from Article X of the
Constitution entitled Local Government. Autonomous regions are established and
discussed under Sections 15 to 21 of this Article the article wholly devoted to
Local Government. That an autonomous region is considered a form of local
government is also reflected in Section 1, Article X of the Constitution, which
provides:

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.

Thus, we find the contention that the synchronization mandated by the

Constitution does not include the regional elections of the ARMM
unmeritorious. We shall refer to synchronization in the course of our discussions
below, as this concept permeates the consideration of the various issues posed in
this case and must be recalled time and again for its complete resolution.
II. The Presidents Certification on the Urgency of RA No. 10153

The petitioners in G.R. No. 197280 also challenge the validity of RA No.
10153 for its alleged failure to comply with Section 26(2), Article VI of the
Constitution[18] which provides that before bills passed by either the House or the
Senate can become laws, they must pass through three readings on separate days.
The exception is when the President certifies to the necessity of the bills immediate
enactment.

The Court, in Tolentino v. Secretary of Finance,[19] explained the effect of

the Presidents certification of necessity in the following manner:

The presidential certification dispensed with the requirement not only of

printing but also that of reading the bill on separate days. The phrase "except
when the President certifies to the necessity of its immediate enactment, etc." in
Art. VI, Section 26[2] qualifies the two stated conditions before a bill can become
a law: [i] the bill has passed three readings on separate days and [ii] it has been
printed in its final form and distributed three days before it is finally approved.

xxx
That upon the certification of a bill by the President, the
requirement of three readings on separate days and of printing and
distribution can be dispensed with is supported by the weight of
legislative practice. For example, the bill defining the certiorari
jurisdiction of this Court which, in consolidation with the Senate version,
became Republic Act No. 5440, was passed on second and third readings
in the House of Representatives on the same day [May 14, 1968] after
the bill had been certified by the President as urgent.

In the present case, the records show that the President wrote to the Speaker
of the House of Representatives to certify the necessity of the immediate
enactment of a law synchronizing the ARMM elections with the national and local
elections.[20] Following our Tolentinoruling, the Presidents certification exempted
both the House and the Senate from having to comply with the three separate
readings requirement.

On the follow-up contention that no necessity existed for the immediate

enactment of these bills since there was no public calamity or emergency that had
to be met, again we hark back to our ruling in Tolentino:
 The sufficiency of the factual basis of the suspension of the writ of habeas
corpus or declaration of martial law Art. VII, Section 18, or the existence of a national
emergency justifying the delegation of extraordinary powers to the President under Art.
VI, Section 23(2) is subject to judicial review because basic rights of individuals may be
of hazard. But the factual basis of presidential certification of bills, which involves
doing away with procedural requirements designed to insure that bills are duly
considered by members of Congress, certainly should elicit a different standard of
review. [Emphasis supplied.]

The House of Representatives and the Senate in the exercise of their

legislative discretion gave full recognition to the Presidents certification and
promptly enacted RA No. 10153. Under the circumstances, nothing short of grave
abuse of discretion on the part of the two houses of Congress can justify our
intrusion under our power of judicial review.[21]

The petitioners, however, failed to provide us with any cause or

justification for this course of action. Hence, while the judicial department and
this Court are not bound by the acceptance of the President's certification by both
the House of Representatives and the Senate, prudent exercise of our powers and
respect due our co-equal branches of government in matters committed to them
by the Constitution, caution a stay of the judicial hand.[22]

In any case, despite the Presidents certification, the two-fold purpose that
underlies the requirement for three readings on separate days of every bill must
always be observed to enable our legislators and other parties interested in pending
bills to intelligently respond to them.Specifically, the purpose with respect to
Members of Congress is: (1) to inform the legislators of the matters they shall vote
on and (2) to give them notice that a measure is in progress through the enactment
process.[23]
 We find, based on the records of the deliberations on the law, that both
advocates and the opponents of the proposed measure had sufficient opportunities
to present their views. In this light, no reason exists to nullify RA No. 10153 on the
cited ground.

III. A. RA No. 9333 and RA No. 10153 are not amendments to RA No. 9054
The effectivity of RA No. 9333 and RA No. 10153 has also been challenged
because they did not comply with Sections 1 and 3, Article XVII of RA No. 9054 in
amending this law. These provisions require:

Section 1. Consistent with the provisions of the Constitution, this Organic Act may be
reamended or revised by the Congress of the Philippines upon a vote of two-thirds (2/3)
of the Members of the House of Representatives and of the Senate voting separately.

Section 3. Any amendment to or revision of this Organic Act shall become effective only
when approved by a majority of the vote cast in a plebiscite called for the purpose,
which shall be held not earlier than sixty (60) days or later than ninety (90) days after
the approval of such amendment or revision.

We find no merit in this contention.

In the first place, neither RA No. 9333 nor RA No. 10153 amends RA No.
9054. As an examination of these laws will show, RA No. 9054 only provides for
the schedule of the first ARMM elections and does not fix the date of the regular
elections. A need therefore existed for the Congress to fix the date of
the subsequent ARMM regular elections, which it did by enacting RA No. 9333
and thereafter, RA No. 10153. Obviously, these subsequent laws RA No. 9333 and
RA No. 10153 cannot be considered amendments to RA No. 9054 as they did not
change or revise any provision in the latter law; they merely filled in a gap in RA
No. 9054 or supplemented the law by providing the date of the subsequent
regular elections.
 This view that Congress thought it best to leave the determination of the
date of succeeding ARMM elections to legislative discretion finds support in
ARMMs recent history.

To recall, RA No. 10153 is not the first law passed that rescheduled the
ARMM elections. The First Organic Act RA No. 6734 not only did not fix the date
of the subsequent elections; it did not even fix the specific date of the first ARMM
elections,[24] leaving the date to be fixed in another legislative enactment.
Consequently, RA No. 7647,[25] RA No. 8176,[26] RA No. 8746,[27] RA No.
8753,[28] and RA No. 9012[29] were all enacted by Congress to fix the dates of the
ARMM elections. Since these laws did not change or modify any part or provision
of RA No. 6734, they were not amendments to this latter law. Consequently,
there was no need to submit them to any plebiscite for ratification.

The Second Organic Act RA No. 9054 which lapsed into law on March 31,
2001, provided that the first elections would be held on the second Monday of
September 2001. Thereafter, Congress passed RA No. 9140[30] to reset the date of
the ARMM elections. Significantly, while RA No. 9140 also scheduled the
plebiscite for the ratification of the Second Organic Act (RA No. 9054), the new
date of the ARMM regional elections fixed in RA No. 9140 was not among the
provisions ratified in the plebiscite held to approve RA No. 9054. Thereafter,
Congress passed RA No. 9333,[31] which further reset the date of the ARMM
regional elections. Again, this law was not ratified through a plebiscite.

From these legislative actions, we see the clear intention of Congress to treat
the laws which fix the date of the subsequent ARMM elections as separate and
distinct from the Organic Acts. Congress only acted consistently with this intent
when it passed RA No. 10153 without requiring compliance with the amendment
prerequisites embodied in Section 1 and Section 3, Article XVII of RA No. 9054.

III. B. Supermajority voting requirement unconstitutional for giving RA No. 9054

the character of an irrepealable law
 Even assuming that RA No. 9333 and RA No. 10153 did in fact amend RA
No. 9054, the supermajority (2/3) voting requirement required under Section 1,
Article XVII of RA No. 9054[32] has to be struck down for giving RA No. 9054 the
character of an irrepealable law by requiring more than what the Constitution
demands.

Section 16(2), Article VI of the Constitution provides that a majority of each

House shall constitute a quorum to do business. In other words, as long as
majority of the members of the House of Representatives or the Senate are
present, these bodies have the quorum needed to conduct business and hold
session. Within a quorum, a vote of majority is generally sufficient to enact laws
or approve acts.

In contrast, Section 1, Article XVII of RA No. 9054 requires a vote of no less

than two-thirds (2/3) of the Members of the House of Representatives and of the
Senate, voting separately, in order to effectively amend RA No. 9054. Clearly, this
2/3 voting requirement is higher than what the Constitution requires for the
passage of bills, and served to restrain the plenary powers of Congress to amend,
revise or repeal the laws it had passed. The Courts pronouncement in City of
Davao v. GSIS[33] on this subject best explains the basis and reason for the
unconstitutionality:

Moreover, it would be noxious anathema to democratic principles for a legislative

body to have the ability to bind the actions of future legislative body, considering that both
assemblies are regarded with equal footing, exercising as they do the same plenary
powers. Perpetual infallibility is not one of the attributes desired in a legislative body,
and a legislature which attempts to forestall future amendments or repeals of its
enactments labors under delusions of omniscience.

xxx

A state legislature has a plenary law-making power over all subjects, whether
pertaining to persons or things, within its territorial jurisdiction, either to introduce new
 laws or repeal the old, unless prohibited expressly or by implication by the federal
constitution or limited or restrained by its own. It cannot bind itself or its successors by
enacting irrepealable laws except when so restrained. Every legislative body may modify or
abolish the acts passed by itself or its predecessors. This power of repeal may be exercised
at the same session at which the original act was passed; and even while a bill is in its
progress and before it becomes a law. This legislature cannot bind a future legislature to
a particular mode of repeal. It cannot declare in advance the intent of subsequent
legislatures or the effect of subsequent legislation upon existing statutes.[34] (Emphasis
ours.)

Thus, while a supermajority is not a total ban against a repeal, it is a

limitation in excess of what the Constitution requires on the passage of bills and is
constitutionally obnoxious because it significantly constricts the future legislators
room for action and flexibility.

III. C. Section 3, Article XVII of RA No. 9054 excessively enlarged the plebiscite
requirement found in Section 18, Article X of the Constitution

The requirements of RA No. 9054 not only required an unwarranted

supermajority, but enlarged as well the plebiscite requirement, as embodied in its
Section 3, Article XVII of that Act. As we did on the supermajority requirement, we
find the enlargement of the plebiscite requirement required under Section 18,
Article X of the Constitution to be excessive to point of absurdity and, hence, a
violation of the Constitution.

Section 18, Article X of the Constitution states that the plebiscite is required
only for the creation of autonomous regions and for determining which provinces,
cities and geographic areas will be included in the autonomous regions. While the
settled rule is that amendments to the Organic Act have to comply with the
plebiscite requirement in order to become effective,[35] questions on the extent of
the matters requiring ratification may unavoidably arise because of the seemingly
general terms of the Constitution and the obvious absurdity that would result if a
plebiscite were to be required for every statutory amendment.
 Section 18, Article X of the Constitution plainly states that The creation of
the autonomous region shall be effective when approved by the majority of the
votes case by the constituent units in a plebiscite called for the purpose. With
these wordings as standard, we interpret the requirement to mean that only
amendments to, or revisions of, the Organic Act constitutionally-essential to the
creation of autonomous regions i.e., those aspects specifically mentioned in the
Constitution which Congress must provide for in the Organic Act require
ratification through a plebiscite. These amendments to the Organic Act are those
that relate to: (a) the basic structure of the regional government; (b) the regions
judicial system, i.e., the special courts with personal, family, and property law
jurisdiction; and, (c) the grant and extent of the legislative powers constitutionally
conceded to the regional government under Section 20, Article X of the
Constitution.[36]

The date of the ARMM elections does not fall under any of the matters that
the Constitution specifically mandated Congress to provide for in the Organic Act.
Therefore, even assuming that the supermajority votes and the plebiscite
requirements are valid, any change in the date of elections cannot be construed
as a substantial amendment of the Organic Act that would require compliance
with these requirements.

IV. The synchronization issue

As we discussed above, synchronization of national and local elections is a

constitutional mandate that Congress must provide for and this synchronization
must include the ARMM elections. On this point, an existing law in fact already
exists RA No. 7166 as the forerunner of the current RA No. 10153. RA No. 7166
already provides for the synchronization of local elections with the national and
congressional elections. Thus, what RA No. 10153 provides is an old matter for
local governments (with the exception
of barangay and SanggunianKabataan elections where the terms are not
constitutionally provided) and is technically a reiteration of what is already
reflected in the law, given that regional elections are in reality local elections by
express constitutional recognition.[37]

To achieve synchronization, Congress necessarily has to reconcile the

schedule of the ARMMs regular elections (which should have been held in August
2011 based on RA No. 9333) with the fixed schedule of the national and local
elections (fixed by RA No. 7166 to be held in May 2013).

During the oral arguments, the Court identified the three options open to
Congress in order to resolve this problem. These options are: (1) to allow the
elective officials in the ARMM to remain in office in a hold over capacity, pursuant
to Section 7(1), Article VII of RA No. 9054, until those elected in the synchronized
elections assume office;[38] (2) to hold special elections in the ARMM, with the
terms of those elected to expire when those elected in the synchronized elections
assume office; or (3) to authorize the President to appoint OICs, pursuant to
Section 3 of RA No. 10153, also until those elected in the synchronized elections
assume office.

As will be abundantly clear in the discussion below, Congress, in choosing

to grant the President the power to appoint OICs, chose the correct option and
passed RA No. 10153 as a completely valid law.

V. The Constitutionality of RA No. 10153

A. Basic Underlying Premises

To fully appreciate the available options, certain underlying material

premises must be fully understood. The first is the extent of the powers of
Congress to legislate; the second is the constitutional mandate for the
synchronization of elections; and the third is on the concept of autonomy as
recognized and established under the 1987 Constitution.

The grant of legislative power to Congress is broad, general and

comprehensive.[39] The legislative body possesses plenary power for all purposes
of civil government.[40] Any power, deemed to be legislative by usage and
tradition, is necessarily possessed by Congress, unless the Constitution has lodged
it elsewhere.[41] Except as limited by the Constitution, either expressly or impliedly,
legislative power embraces all subjects and extends to all matters of general
concern or common interest.[42]

The constitutional limitations on legislative power are either express or

implied. The express limitations are generally provided in some provisions of the
Declaration of Principles and State Policies (Article 2) and in the provisions Bill of
Rights (Article 3). Other constitutional provisions (such as the initiative and
referendum clause of Article 6, Sections 1 and 32, and the autonomy provisions of
Article X) provide their own express limitations. The implied limitations are found
in the evident purpose which was in view and the circumstances and historical
events which led to the enactment of the particular provision as a part of organic
law.[43]

The constitutional provisions on autonomy specifically, Sections 15 to 21 of

Article X of the Constitution constitute express limitations on legislative power as
they define autonomy, its requirements and its parameters, thus limiting what is
otherwise the unlimited power of Congress to legislate on the governance of the
autonomous region.

Of particular relevance to the issues of the present case are the limitations
posed by the prescribed basic structure of government i.e., that the government
must have an executive department and a legislative assembly, both of which must
be elective and representative of the constituent political units; national
government, too, must not encroach on the legislative powers granted under
Section 20, Article X.Conversely and as expressly reflected in Section 17, Article
X, all powers and functions not granted by this Constitution or by law to the
autonomous regions shall be vested in the National Government.
The totality of Sections 15 to 21 of Article X should likewise serve as a
standard that Congress must observe in dealing with legislation touching on the
affairs of the autonomous regions. The terms of these sections leave no doubt on
what the Constitution intends the idea of self-rule or self-government, in
particular, the power to legislate on a wide array of social, economic and
administrative matters. But equally clear under these provisions are the
permeating principles of national sovereignty and the territorial integrity of the
Republic, as expressed in the above-quoted Section 17 and in Section 15.[44] In
other words, the Constitution and the supporting jurisprudence, as they now
stand, reject the notion of imperium et imperio[45] in the relationship between the
national and the regional governments.

In relation with synchronization, both autonomy and the synchronization of

national and local elections are recognized and established constitutional mandates,
with one being as compelling as the other. If their compelling force differs at all,
the difference is in their coverage; synchronization operates on and affects the
whole country, while regional autonomy as the term suggests directly carries a
narrower regional effect although its national effect cannot be discounted.

These underlying basic concepts characterize the powers and limitations of

Congress when it acted on RA No. 10153. To succinctly describe the legal situation
that faced Congress then, its decision to synchronize the regional elections with
the national, congressional and all other local elections (save
for barangay and sangguniang kabataan elections) left it with the problem
of how to provide the ARMM with governance in the intervening
period between the expiration of the term of those elected in August 2008 and
the assumption to office twenty-one (21) months away of those who will win in
the synchronized elections on May 13, 2013.
 The problem, in other words, was for interim measures for this period,
consistent with the terms of the Constitution and its established supporting
jurisprudence, and with the respect due to the concept of autonomy. Interim
measures, to be sure, is not a strange phenomenon in the Philippine legal
landscape. The Constitutions Transitory Provisions themselves collectively provide
measures for transition from the old constitution to the new[46] and for the
introduction of new concepts.[47] As previously mentioned, the adjustment of
elective terms and of elections towards the goal of synchronization first
transpired under the Transitory Provisions. The adjustments, however, failed to
look far enough or deeply enough, particularly into the problems that
synchronizing regional autonomous elections would entail; thus, the present
problem is with us today.

The creation of local government units also represents instances when

interim measures are required. In the creation of Quezon del Sur[48] and Dinagat
Islands,[49] the creating statutes authorized the President to appoint an interim
governor, vice-governor and members of the sangguniang panlalawigan although
these positions are essentially elective in character; the appointive officials were
to serve until a new set of provincial officials shall have been elected and
qualified.[50] A similar authority to appoint is provided in the transition of a local
government from a sub-province to a province.[51]

In all these, the need for interim measures is dictated by necessity; out-of-
the-way arrangements and approaches were adopted or used in order to adjust
to the goal or objective in sight in a manner that does not do violence to the
Constitution and to reasonably accepted norms.Under these limitations, the
choice of measures was a question of wisdom left to congressional discretion.

To return to the underlying basic concepts, these concepts shall serve as

the guideposts and markers in our discussion of the options available to Congress
to address the problems brought about by the synchronization of the ARMM
elections, properly understood as interim measures that Congress had to
provide. The proper understanding of the options as interim measures assume
prime materiality as it is under these terms that the passage of RA No. 10153
should be measured, i.e., given the constitutional objective of synchronization
that cannot legally be faulted, did Congress gravely abuse its discretion or
violate the Constitution when it addressed through RA No. 10153 the
concomitant problems that the adjustment of elections necessarily brought with
it?

B. Holdover Option is Unconstitutional

We rule out the first option holdover for those who were elected in
executive and legislative positions in the ARMM during the 2008-2011 term as an
option that Congress could have chosen because a holdover violates Section 8,
Article X of the Constitution. This provision states:

Section 8. The term of office of elective local officials, except barangay officials,
which shall be determined by law, shall be three years and no such official shall serve
for more than three consecutive terms. [emphases ours]

Since elective ARMM officials are local officials, they are covered and
bound by the three-year term limit prescribed by the Constitution; they cannot
extend their term through a holdover. As this Court put in Osmea v. COMELEC:[52]

It is not competent for the legislature to extend the term of officers by

providing that they shall hold over until their successors are elected and qualified
where the constitution has in effect or by clear implication prescribed the term and
when the Constitution fixes the day on which the official term shall begin, there is no
legislative authority to continue the office beyond that period, even though the
successors fail to qualify within the time.

In American Jurisprudence it has been stated as follows:

 It has been broadly stated that the legislature cannot, by an act
postponing the election to fill an office the term of which is limited by
the Constitution, extend the term of the incumbent beyond the period
as limited by the Constitution. [Emphasis ours.]

Independently of the Osmea ruling, the primacy of the Constitution as the

supreme law of the land dictates that where the Constitution has itself made a
determination or given its mandate, then the matters so determined or mandated
should be respected until the Constitution itself is changed by amendment or
repeal through the applicable constitutional process. A necessary corollary is that
none of the three branches of government can deviate from the constitutional
mandate except only as the Constitution itself may allow.[53] If at all, Congress
may only pass legislation filing in details to fully operationalize the constitutional
command or to implement it by legislation if it is non-self-executing; this Court,
on the other hand, may only interpret the mandate if an interpretation is
appropriate and called for.[54]

In the case of the terms of local officials, their term has been fixed clearly and
unequivocally, allowing no room for any implementing legislation with respect to
the fixed term itself and no vagueness that would allow an interpretation from
this Court. Thus, the term of three years for local officials should stay at three (3)
years as fixed by the Constitution and cannot be extended by holdover by
Congress.

If it will be claimed that the holdover period is effectively another term mandated
by Congress, the net result is for Congress to create a new term and to appoint
the occupant for the new term. This view like the extension of the elective term is
constitutionally infirm because Congress cannot do indirectly what it cannot do
directly, i.e., to act in a way that would effectively extend the term of the
incumbents. Indeed, if acts that cannot be legally done directly can be done
indirectly, then all laws would be illusory.[55] Congress cannot also create a new
term and effectively appoint the occupant of the position for the new term. This is
effectively an act of appointment by Congress and an unconstitutional intrusion
into the constitutional appointment power of the President.[56] Hence, holdover
whichever way it is viewed is a constitutionally infirm option that Congress could
not have undertaken.

Jurisprudence, of course, is not without examples of cases where the question of

holdover was brought before, and given the imprimatur of approval by, this
Court. The present case though differs significantly from past cases with contrary
rulings, particularly from Sambarani v. COMELEC,[57] Adap v.
[58] [59]
Comelec, and Montesclaros v. Comelec, where the Court ruled that the
elective officials could hold on to their positions in a hold over capacity.

All these past cases refer to elective barangay or sangguniang

kabataan officials whose terms of office are not explicitly provided for
in the Constitution; the present case, on the other hand, refers to local elective
officials the ARMM Governor, the ARMM Vice-Governor, and the members of the
Regional Legislative Assembly whose terms fall within the three-year term limit
set by Section 8, Article X of the Constitution. Because of their constitutionally
limited term, Congress cannot legislate an extension beyond the term for which
they were originally elected.

Even assuming that holdover is constitutionally permissible, and there had

been statutory basis for it (namely Section 7, Article VII of RA No. 9054) in the
past,[60] we have to remember that the rule of holdover can only apply as an
available option where no express or implied legislative intent to the contrary
exists; it cannot apply where such contrary intent is evident.[61]

Congress, in passing RA No. 10153, made it explicitly clear that it had the
intention of suppressing the holdover rule that prevailed under RA No. 9054 by
completely removing this provision. The deletion is a policy decision that is wholly
within the discretion of Congress to make in the exercise of its plenary legislative
powers; this Court cannot pass upon questions of wisdom, justice or expediency
of legislation,[62] except where an attendant unconstitutionality or grave abuse of
discretion results.

C. The COMELEC has no authority to order special elections

Another option proposed by the petitioner in G.R. No. 197282 is for this
Court to compel COMELEC to immediately conduct special elections pursuant to
Section 5 and 6 of Batas Pambansa Bilang (BP) 881.
The power to fix the date of elections is essentially legislative in nature, as
evident from, and exemplified by, the following provisions of the Constitution:

Section 8, Article VI, applicable to the legislature, provides:

Section 8. Unless otherwise provided by law, the regular election of the

Senators and the Members of the House of Representatives shall be held on the
second Monday of May. [Emphasis ours]

Section 4(3), Article VII, with the same tenor but applicable solely to the President
and Vice-President, states:
xxxx

Section 4. xxx Unless otherwise provided by law, the regular election for
President and Vice-President shall be held on the second Monday of May.
[Emphasis ours]

while Section 3, Article X, on local government, provides:

Section 3. The Congress shall enact a local government code which

shall provide for xxx the qualifications, election, appointment and removal, term,
salaries, powers and functions and duties of local officials[.] [Emphases ours]

These provisions support the conclusion that no elections may be held on

any other date for the positions of President, Vice President, Members of
Congress and local officials, except when so provided by another Act of Congress,
or upon orders of a body or officer to whom Congress may have delegated either
the power or the authority to ascertain or fill in the details in the execution of
that power.[63]

Notably, Congress has acted on the ARMM elections by postponing the

scheduled August 2011 elections and setting another date May 13, 2011 for
regional elections synchronized with the presidential, congressional and other
local elections. By so doing, Congress itself has made a policy decision in the
exercise of its legislative wisdom that it shall not call special elections as an
adjustment measure in synchronizing the ARMM elections with the other
elections.

After Congress has so acted, neither the Executive nor the Judiciary can act
to the contrary by ordering special elections instead at the call of the
COMELEC. This Court, particularly, cannot make this call without thereby
supplanting the legislative decision and effectively legislating. To be sure, the
Court is not without the power to declare an act of Congress null and void for
being unconstitutional or for having been exercised in grave abuse of
discretion.[64] But our power rests on very narrow ground and is merely to annul
a contravening act of Congress; it is not to supplant the decision of Congress nor
to mandate what Congress itself should have done in the exercise of its
legislative powers. Thus, contrary to what the petition in G.R. No. 197282 urges,
we cannot compel COMELEC to call for special elections.

Furthermore, we have to bear in mind that the constitutional power of the

COMELEC, in contrast with the power of Congress to call for, and to set the date
of, elections, is limited to enforcing and administering all laws and regulations
relative to the conduct of an election.[65] Statutorily, COMELEC has no power to
call for the holding of special elections unless pursuant to a specific statutory
grant. True, Congress did grant, via Sections 5 and 6 of BP 881, COMELEC with the
power to postpone elections to another date. However, this power is limited to,
and can only be exercised within, the specific terms and circumstances provided
for in the law. We quote:
 Section 5. Postponement of election. - When for any serious cause
such as violence, terrorism, loss or destruction of election
paraphernaliaor records, force majeure, and other analogous
causes of such a nature that the holding of a free, orderly and honest
election should become impossible in any political subdivision, the
Commission, motu proprio or upon a verified petition by any interested
party, and after due notice and hearing, whereby all interested parties are
afforded equal opportunity to be heard, shall postpone the election
therein to a date which should be reasonably close to the date of the
election not held, suspended or which resulted in a failure to
elect but not later than thirty days after the cessation of the cause for
such postponement or suspension of the election or failure to elect.

Section 6. Failure of election. - If, on account of force

majeure, violence, terrorism, fraud, or other analogous causes the election in any
polling place has not been held on the date fixed, or had been suspended before the
hour fixed by law for the closing of the voting, or after the voting and during the
preparation and the transmission of the election returns or in the custody or canvass
thereof, such election results in a failure to elect, and in any of such cases the failure or
suspension of election would affect the result of the election, the Commission shall, on
the basis of a verified petition by any interested party and after due notice and hearing,
call for the holding or continuation of the election not held, suspended or which
resulted in a failure to elect on a date reasonably close to the date of the election not
held, suspended or which resulted in a failure to elect but not later than thirty days after
the cessation of the cause of such postponement or suspension of the election or failure
to elect. [Emphasis ours]

A close reading of Section 5 of BP 881 reveals that it is meant to address

instances where elections have already been scheduled to take place but have
to be postponed because of (a) violence, (b) terrorism, (c) loss or destruction of
election paraphernalia or records, (d) force majeure, and (e) other analogous
causes of such a nature that the holding of a free, orderly and honest election
should become impossible in any political subdivision. Under the principle
of ejusdem generis, the term analogous causes will be restricted to
those unforeseen or unexpected events that prevent the holding of the
scheduled elections. These analogous causes are further defined by the phrase of
such nature that the holding of a free, orderly and honest election should become
impossible.

Similarly, Section 6 of BP 881 applies only to those situations where

elections have already been scheduled but do not take place because of (a) force
majeure, (b) violence, (c) terrorism, (d) fraud, or (e) other analogous causes the
election in any polling place has not been held on the date fixed, or had been
suspended before the hour fixed by law for the closing of the voting, or after the
voting and during the preparation and the transmission of the election returns or
in the custody or canvass thereof, such election results in a failure to elect. As in
Section 5 of BP 881, Section 6 addresses instances where the elections do not
occur or had to be suspended because
of unexpected and unforeseen circumstances.

In the present case, the postponement of the ARMM elections is by

law i.e., by congressional policy and is pursuant to the constitutional mandate of
synchronization of national and local elections. By no stretch of the imagination
can these reasons be given the same character as the circumstances
contemplated by Section 5 or Section 6 of BP 881, which all pertain to extralegal
causes that obstruct the holding of elections. Courts, to be sure, cannot enlarge
the scope of a statute under the guise of interpretation, nor include situations not
provided nor intended by the lawmakers.[66] Clearly, neither Section 5 nor Section
6 of BP 881 can apply to the present case and this Court has absolutely no legal
basis to compel the COMELEC to hold special elections.

D. The Court has no power to shorten the terms of elective officials

Even assuming that it is legally permissible for the Court to compel the
COMELEC to hold special elections, no legal basis likewise exists to rule that the
newly elected ARMM officials shall hold office only until the ARMM officials
elected in the synchronized elections shall have assumed office.
 In the first place, the Court is not empowered to adjust the terms of
elective officials. Based on the Constitution, the power to fix the term of office of
elective officials, which can be exercised only in the case
of barangay officials,[67] is specifically given to Congress. Even Congress itself may
be denied such power, as shown when the Constitution shortened the terms of
twelve Senators obtaining the least votes,[68] and extended the terms of the
President and the Vice-President[69] in order to synchronize elections; Congress
was not granted this same power. The settled rule is that terms fixed by the
Constitution cannot be changed by mere statute.[70] More particularly, not even
Congress and certainly not this Court, has the authority to fix the terms of elective
local officials in the ARMM for less, or more, than the constitutionally mandated
three years[71] as this tinkering would directly contravene Section 8, Article X of
the Constitution as we ruled in Osmena.

Thus, in the same way that the term of elective ARMM officials cannot be
extended through a holdover, the term cannot be shortened by putting an
expiration date earlier than the three (3) years that the Constitution itself
commands. This is what will happen a term of less than two years if a call for
special elections shall prevail. In sum, while synchronization is achieved, the
result is at the cost of a violation of an express provision of the Constitution.

Neither we nor Congress can opt to shorten the tenure of those officials to
be elected in the ARMM elections instead of acting on their term (where the term
means the time during which the officer may claim to hold office as of right and
fixes the interval after which the several incumbents shall succeed one another,
while the tenure represents the term during which the incumbent actually holds
the office).[72]As with the fixing of the elective term, neither Congress nor
the Court has any legal basis to shorten the tenure of elective ARMM officials.
They would commit an unconstitutional act and gravely abuse their discretion if
they do so.

E. The Presidents Power to Appoint OICs

 The above considerations leave only Congress chosen interim measure RA
No. 10153 and the appointment by the President of OICs to govern the ARMM
during the pre-synchronization period pursuant to Sections 3, 4 and 5 of this law
as the only measure that Congress can make. This choice itself, however, should
be examined for any attendant constitutional infirmity.

At the outset, the power to appoint is essentially executive in nature, and the
limitations on or qualifications to the exercise of this power should be strictly
construed; these limitations or qualifications must be clearly stated in order to be
recognized.[73] The appointing power is embodied in Section 16, Article VII of the
Constitution, which states:

Section 16. The President shall nominate and, with the consent of
the Commission on Appointments, appoint the heads of the executive
departments, ambassadors, other public ministers and consuls or officers
of the armed forces from the rank of colonel or naval captain, and other
officers whose appointments are vested in him in this Constitution. He
shall also appoint all other officers of the Government whose
appointments are not otherwise provided for by law, and those
whom he may be authorized by law to appoint. The Congress may, by
law, vest the appointment of other officers lower in rank in the President
alone, in the courts, or in the heads of departments, agencies,
commissions, or boards. [emphasis ours]

This provision classifies into four groups the officers that the President can
appoint. These are:

First, the heads of the executive departments; ambassadors; other public

ministers and consuls; officers of the Armed Forces of the Philippines, from the
rank of colonel or naval captain; and other officers whose appointments are vested
in the President in this Constitution;

Second, all other officers of the government whose appointments are not
otherwise provided for by law;

Third, those whom the President may be authorized by law to appoint; and
 Fourth, officers lower in rank whose appointments the Congress may by law
vest in the President alone.[74]

Since the Presidents authority to appoint OICs emanates from RA No.

10153, it falls under the third group of officials that the President can appoint
pursuant to Section 16, Article VII of the Constitution. Thus, the assailed
law facially rests on clear constitutional basis.

If at all, the gravest challenge posed by the petitions to the authority to

appoint OICs under Section 3 of RA No. 10153 is the assertion that the
Constitution requires that the ARMM executive and legislative officials to be
elective and representative of the constituent political units. This requirement
indeed is an express limitation whose non-observance in the assailed law leaves
the appointment of OICs constitutionally defective.

After fully examining the issue, we hold that this alleged constitutional
problem is more apparent than real and becomes very real only if RA No. 10153
were to be mistakenly read as a law that changes the elective and
representative character of ARMM positions. RA No. 10153, however, does not
in any way amend what the organic law of the ARMM (RA No. 9054) sets outs in
terms of structure of governance. What RA No. 10153 in fact only does is
to appoint officers-in-charge for the Office of the Regional Governor, Regional Vice
Governor and Members of the Regional Legislative Assembly who shall perform
the functions pertaining to the said offices until the officials duly elected in the
May 2013 elections shall have qualified and assumed office. This power is far
different from appointing elective ARMM officials for the abbreviated term
ending on the assumption to office of the officials elected in the May 2013
elections.

As we have already established in our discussion of the supermajority and

plebiscite requirements, the legal reality is that RA No. 10153 did not amend RA
No. 9054. RA No. 10153, in fact, provides only for synchronization of elections
and for the interim measures that must in the meanwhile prevail. And this is
how RA No. 10153 should be read in the manner it was written and based on its
unambiguous facial terms.[75] Aside from its order for synchronization, it is purely
and simply an interim measure responding to the adjustments that the
synchronization requires.

Thus, the appropriate question to ask is whether the interim measure is an

unreasonable move for Congress to adopt, given the legal situation that the
synchronization unavoidably brought with it. In more concrete terms and based
on the above considerations, given the plain unconstitutionality of providing for
a holdover and the unavailability of constitutional possibilities for lengthening
or shortening the term of the elected ARMM officials, is the choice of the
Presidents power to appoint for a fixed and specific period as an interim
measure, and as allowed under Section 16, Article VII of the Constitution an
unconstitutional or unreasonable choice for Congress to make?

Admittedly, the grant of the power to the President under other

situations or where the power of appointment would extend beyond the
adjustment period for synchronization would be to foster a government that is not
democratic and republican. For then, the peoples right to choose the leaders to
govern them may be said to be systemically withdrawn to the point of fostering
an undemocratic regime. This is the grant that would frontally breach the elective
and representative governance requirement of Section 18, Article X of the
Constitution.

But this conclusion would not be true under the very limited circumstances
contemplated in RA No. 10153 where the period is fixed and, more importantly,
the terms of governance both under Section 18, Article X of the Constitution and
RA No. 9054 will not systemicallybe touched nor affected at all. To repeat what
has previously been said, RA No. 9054 will govern unchanged and continuously,
with full effect in accordance with the Constitution, save only for the interim and
temporary measures that synchronization of elections requires.
 Viewed from another perspective, synchronization will temporarily disrupt
the election process in a local community, the ARMM, as well as the communitys
choice of leaders, but this will take place under a situation of necessity and as an
interim measure in the manner that interim measures have been adopted and
used in the creation of local government units[76] and the adjustments of sub-
provinces to the status of provinces.[77] These measures, too, are used in light of
the wider national demand for the synchronization of elections (considered vis--
visthe regional interests involved). The adoption of these measures, in other
words, is no different from the exercise by Congress of the inherent police power
of the State, where one of the essential tests is the reasonableness of the interim
measure taken in light of the given circumstances.

Furthermore, the representative character of the chosen leaders need not

necessarily be affected by the appointment of OICs as this requirement is really a
function of the appointment process; only the elective aspect shall be supplanted
by the appointment of OICs. In this regard, RA No. 10153 significantly seeks to
address concerns arising from the appointments by providing, under Sections 3, 4
and 5 of the assailed law, concrete terms in the Appointment of OIC, the Manner
and Procedure of Appointing OICs, and their Qualifications.

Based on these considerations, we hold that RA No. 10153 viewed in its

proper context is a law that is not violative of the Constitution (specifically, its
autonomy provisions), and one that is reasonable as well under the
circumstances.

VI. Other Constitutional Concerns

Outside of the above concerns, it has been argued during the oral
arguments that upholding the constitutionality of RA No. 10153 would set a
dangerous precedent of giving the President the power to cancel elections
anywhere in the country, thus allowing him to replace elective officials with OICs.
 This claim apparently misunderstands that an across-the-board cancellation
of elections is a matter for Congress, not for the President, to address. It is a
power that falls within the powers of Congress in the exercise of its legislative
powers. Even Congress, as discussed above, is limited in what it can legislatively
undertake with respect to elections.

If RA No. 10153 cancelled the regular August 2011 elections, it was for a
very specific and limited purpose the synchronization of elections. It was a
temporary means to a lasting end the synchronization of elections. Thus, RA No.
10153 and the support that the Court gives this legislation are likewise clear and
specific, and cannot be transferred or applied to any other cause for the
cancellation of elections. Any other localized cancellation of elections and call for
special elections can occur only in accordance with the power already delegated
by Congress to the COMELEC, as above discussed.

Given that the incumbent ARMM elective officials cannot continue to act in
a holdover capacity upon the expiration of their terms, and this Court cannot
compel the COMELEC to conduct special elections, the Court now has to deal with
the dilemma of a vacuum in governance in the ARMM.

To emphasize the dire situation a vacuum brings, it should not be forgotten

that a period of 21 months or close to 2 years intervenes from the time that the
incumbent ARMM elective officials terms expired and the time the new ARMM
elective officials begin their terms in 2013. As the lessons of our Mindanao history
past and current teach us, many developments, some of them critical and
adverse, can transpire in the countrys Muslim areas in this span of time in the way
they transpired in the past.[78] Thus, it would be reckless to assume that the
presence of an acting ARMM Governor, an acting Vice-Governor and a fully
functioning Regional Legislative Assembly can be done away with even
temporarily. To our mind, the appointment of OICs under the present
circumstances is an absolute necessity.
 Significantly, the grant to the President of the power to appoint OICs to
undertake the functions of the elective members of the Regional Legislative
Assembly is neither novel nor innovative. We hark back to our earlier
pronouncement in Menzon v. Petilla, etc., et al.:[79]

It may be noted that under Commonwealth Act No. 588 and the Revised
Administrative Code of 1987, the President is empowered to make temporary
appointments in certain public offices, in case of any vacancy that may occur. Albeit
both laws deal only with the filling of vacancies in appointive positions. However, in
the absence of any contrary provision in the Local Government Code and in the best
interest of public service, we see no cogent reason why the procedure thus outlined
by the two laws may not be similarly applied in the present case. The respondents
contend that the provincial board is the correct appointing power. This argument has no
merit. As between the President who has supervision over local governments as
provided by law and the members of the board who are junior to the vice-governor, we
have no problem ruling in favor of the President, until the law provides otherwise.

A vacancy creates an anomalous situation and finds no approbation under the

law for it deprives the constituents of their right of representation and governance in
their own local government.

In a republican form of government, the majority rules through their chosen

few, and if one of them is incapacitated or absent, etc., the management of
governmental affairs is, to that extent, may be hampered. Necessarily, there will be a
consequent delay in the delivery of basic services to the people of Leyte if the
Governor or the Vice-Governor is missing.[80](Emphasis ours.)

As in Menzon, leaving the positions of ARMM Governor, Vice Governor, and

members of the Regional Legislative Assembly vacant for 21 months, or almost 2
years, would clearly cause disruptions and delays in the delivery of basic services
to the people, in the proper management of the affairs of the regional
government, and in responding to critical developments that may arise. When
viewed in this context, allowing the President in the exercise of his
constitutionally-recognized appointment power to appoint OICs is, in our
judgment, a reasonable measure to take.
 B. Autonomy in the ARMM

It is further argued that while synchronization may be constitutionally

mandated, it cannot be used to defeat or to impede the autonomy that the
Constitution granted to the ARMM. Phrased in this manner, one would presume
that there exists a conflict between two recognized Constitutional mandates
synchronization and regional autonomy such that it is necessary to choose one
over the other.

We find this to be an erroneous approach that violates a basic principle in

constitutional construction ut magis valeat quam pereat: that the Constitution is
to be interpreted as a whole,[81] and one mandate should not be given importance
over the other except where the primacy of one over the other is clear.[82] We
refer to the Courts declaration in Ang-Angco v. Castillo, et al.,[83] thus:

A provision of the constitution should not be construed in isolation from the

rest. Rather, the constitution must be interpreted as a whole, and
apparently, conflicting provisions should be reconciled and harmonized in a manner
that may give to all of them full force and effect. [Emphasis supplied.]

Synchronization is an interest that is as constitutionally entrenched as regional

autonomy. They are interests that this Court should reconcile and give effect to,
in the way that Congress did in RA No. 10153 which provides the measure to
transit to synchronized regional elections with the least disturbance on the
interests that must be respected. Particularly, regional autonomy will be
respected instead of being sidelined, as the law does not in any way alter, change
or modify its governing features, except in a very temporary manner and only as
necessitated by the attendant circumstances.

Elsewhere, it has also been argued that the ARMM elections should not be
synchronized with the national and local elections in order to maintain the
autonomy of the ARMM and insulate its own electoral processes from the rough
and tumble of nationwide and local elections.This argument leaves us far from
convinced of its merits.

As heretofore mentioned and discussed, while autonomous regions are

granted political autonomy, the framers of the Constitution never equated
autonomy with independence. The ARMM as a regional entity thus continues to
operate within the larger framework of the State and is still subject to the national
policies set by the national government, save only for those specific areas reserved
by the Constitution for regional autonomous determination. As reflected during the
constitutional deliberations of the provisions on autonomous regions:

Mr. Bennagen. xxx We do not see here a complete separation from the
central government, but rather an efficient working relationship between the
autonomous region and the central government. We see this as an effective
partnership, not a separation.

Mr. Romulo. Therefore, complete autonomy is not really thought of as

complete independence.

Mr. Ople. We define it as a measure of self-government within the

larger political framework of the nation.[84] [Emphasis supplied.]

This exchange of course is fully and expressly reflected in the above-quoted

Section 17, Article X of the Constitution, and by the express reservation under
Section 1 of the same Article that autonomy shall be within the framework of this
Constitution and the national sovereignty as well as the territorial integrity of the
Republic of the Philippines.

Interestingly, the framers of the Constitution initially proposed to remove

Section 17 of Article X, believing it to be unnecessary in light of the enumeration
of powers granted to autonomous regions in Section 20, Article X of the
Constitution. Upon further reflection, the framers decided to reinstate the provision
in order to make it clear, once and for all, that these are the limits of the powers of
the autonomous government. Those not enumerated are actually to be exercised
by the national government[.][85] Of note is the Courts pronouncement
in Pimentel, Jr. v. Hon. Aguirre[86] which we quote:
 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. [Emphasis ours.]

In other words, the autonomy granted to the ARMM cannot be invoked to

defeat national policies and concerns. Since the synchronization of elections is not
just a regional concern but a national one, the ARMM is subject to it; the regional
autonomy granted to the ARMM cannot be used to exempt the region from
having to act in accordance with a national policy mandated by no less than the
Constitution.

Conclusion

Congress acted within its powers and pursuant to a constitutional mandate

the synchronization of national and local elections when it enacted RA No.
10153. This Court cannot question the manner by which Congress undertook this
task; the Judiciary does not and cannot pass upon questions of wisdom, justice or
expediency of legislation.[87] As judges, we can only interpret and apply the law
and, despite our doubts about its wisdom, cannot repeal or amend it.[88]

Nor can the Court presume to dictate the means by which Congress should
address what is essentially a legislative problem. It is not within the Courts power
to enlarge or abridge laws; otherwise, the Court will be guilty of usurping the
exclusive prerogative of Congress.[89]The petitioners, in asking this Court to
compel COMELEC to hold special elections despite its lack of authority to do so,
are essentially asking us to venture into the realm of judicial legislation, which is
abhorrent to one of the most basic principles of a republican and democratic
government the separation of powers.

The petitioners allege, too, that we should act because Congress acted with
grave abuse of discretion in enacting RA No. 10153. Grave abuse of discretion is
such capricious and whimsical exercise of judgment that is patent and gross as to
amount to an evasion of a positive duty or to a virtual refusal to perform a duty
enjoined by law or to act at all in contemplation of the law as where the power is
exercised in an arbitrary and despotic manner by reason of passion and
hostility.[90]

We find that Congress, in passing RA No. 10153, acted strictly within its
constitutional mandate. Given an array of choices, it acted within due
constitutional bounds and with marked reasonableness in light of the necessary
adjustments that synchronization demands. Congress, therefore, cannot be
accused of any evasion of a positive duty or of a refusal to perform its duty. We
thus find no reason to accord merit to the petitioners claims of grave abuse of
discretion.

On the general claim that RA No. 10153 is unconstitutional, we can only

reiterate the established rule that every statute is presumed valid.[91] Congress,
thus, has in its favor the presumption of constitutionality of its acts, and the party
challenging the validity of a statute has the onerous task of rebutting this
presumption.[92] Any reasonable doubt about the validity of the law should be
resolved in favor of its constitutionality.[93] As this Court declared in Garcia v.
Executive Secretary:[94]

The policy of the courts is to avoid ruling on constitutional questions and to

presume that the acts of the political departments are valid in the absence of a clear
and unmistakable showing to the contrary. To doubt is to sustain. This presumption is
based on the doctrine of separation of powers which enjoins upon each department a
becoming respect for the acts of the other departments. The theory is that as the joint
 act of Congress and the President of the Philippines, a law has been carefully studied
and determined to be in accordance with the fundamental law before it was finally
enacted.[95] [Emphasis ours.]

Given the failure of the petitioners to rebut the presumption of

constitutionality in favor of RA No. 10153, we must support and confirm its
validity.
WHEREFORE, premises considered, we DISMISS the consolidated petitions
assailing the validity of RA No. 10153 for lack of merit, and UPHOLD the
constitutionality of this law. We likewise LIFT the temporary restraining order we
issued in our Resolution of September 13, 2011. No costs.

SO ORDERED.
DATU MICHAEL ABAS KIDA, G.R. No. 196271

in his personal capacity, and in

representation of MAGUINDANAO
FEDERATION OF AUTONOMOUS
IRRIGATORS ASSOCIATION, INC.,
HADJI MUHMINA J. USMAN, JOHN
ANTHONY L. LIM, JAMILON T.
ODIN, ASRIN TIMBOL JAIYARI,
MUJIB M. KALANG, ALIH AL-SAIDI J.
SAPI-E, KESSAR DAMSIE ABDIL, and
BASSAM ALUH SAUPI,

Petitioners,

- versus -

SENATE OF THE PHILIPPINES,

represented by its President JUAN
PONCE ENRILE, HOUSE OF
REPRESENTATIVES, thru SPEAKER
FELICIANO BELMONTE,
COMMISSION ON ELECTIONS, thru
its Chairman, SIXTO BRILLANTES,
JR., PAQUITO OCHOA, JR., Office of
the President Executive Secretary,
FLORENCIO ABAD, JR., Secretary of
Budget, and ROBERTO TAN,
Treasurer of the Philippines,

Respondents.

X----------------------X
BASARI D. MAPUPUNO,

Petitioner,

- versus -

SIXTO BRILLANTES, in his capacity

as Chairman of the Commission on
Elections, FLORENCIO ABAD, JR. in
his capacity as Secretary of the
Department of Budget and
Management, PAQUITO OCHOA,
JR., in his capacity as Executive
Secretary, JUAN PONCE ENRILE, in
his capacity as Senate President,
and FELICIANO BELMONTE, in his
capacity as Speaker of the House of
Representatives,

Respondents.

X - - - - - - - - - - - - - - - - - - - - - - XREP.
EDCEL C. LAGMAN, G.R. No. 196305

Petitioner,

- versus -

PAQUITO N. OCHOA, JR., in his

capacity as the Executive Secretary,
and the COMMISSION ON
ELECTIONS,
 Respondents.

X----------------------
XALMARIM CENTI TILLAH, DATU

CASAN CONDING CANA, and

PARTIDO DEMOKRATIKO PILIPINO
LAKAS NG BAYAN (PDP-LABAN),

Petitioners,

- versus -

THE COMMISSION ON ELECTIONS,

through its Chairman, SIXTO
BRILLANTES, JR., HON. PAQUITO N.
OCHOA, JR., in his capacity as
Executive Secretary, HON.
FLORENCIO B. ABAD, JR., in his
capacity as Secretary of the
Department of Budget and
G.R. No. 197221
Management, and HON. ROBERTO
B. TAN, in his capacity as Treasurer
of the Philippines,

Respondents.

X----------------------
XATTY. ROMULO B. MACALINTAL,

Petitioner,

- versus -
COMMISSION ON ELECTIONS and
THE OFFICE OF THE PRESIDENT,
through EXECUTIVE SECRETARY
PAQUITO N. OCHOA, JR.,

Respondents. G.R. No. 197280

X----------------------
XLOUIS BAROK C. BIRAOGO,

Petitioner,

- versus -

THE COMMISSION ON ELECTIONS

and EXECUTIVE SECRETARY
PAQUITO N. OCHOA, JR.,

Respondents.

X----------------------
XJACINTO V. PARAS,

Petitioner,

- versus -
EXECUTIVE SECRETARY PAQUITO N.
OCHOA, JR., and the COMMISSION
ON ELECTIONS,

Respondents.
G.R. No. 197282
x-----------------------------------------x

MINORITY RIGHTS FORUM,

PHILIPPINES, INC.,

Respondents-Intervenor.

G.R. No. 197392

G.R. No. 197454

Present:

CORONA, C.J.,
CARPIO,
VELASCO, JR.,
LEONARDO-DE CASTRO,
BRION,
PERALTA,
BERSAMIN,
DEL CASTILLO,*
ABAD,
VILLARAMA, JR.,
PEREZ,
MENDOZA,
SERENO,**
REYES, and
PERLAS-BERNABE, JJ.
 Promulgated:

February 28, 2012

x-----------------------------------------------------------------------------------------x

RESOLUTION

BRION, J.:

We resolve: (a) the motion for reconsideration filed by petitioners Datu

Michael Abas Kida, et al. in G.R. No. 196271; (b) the motion for reconsideration
filed by petitioner Rep. Edcel Lagman in G.R. No. 197221; (c) the ex abundante ad
cautelam motion for reconsideration filed by petitioner Basari Mapupuno in G.R.
No. 196305; (d) the motion for reconsideration filed by petitioner Atty. Romulo
Macalintal in G.R. No. 197282; (e) the motion for reconsideration filed by
petitioners Almarim Centi Tillah, Datu Casan Conding Cana and Partido
Demokratiko Pilipino Lakas ng Bayan in G.R. No. 197280; (f) the manifestation and
motion filed by petitioners Almarim Centi Tillah, et al. in G.R. No. 197280; and (g)
the very urgent motion to issue clarificatory resolution that the temporary
restraining order (TRO) is still existing and effective.

These motions assail our Decision dated October 18, 2011, where we
upheld the constitutionality of Republic Act (RA) No. 10153. Pursuant to the
constitutional mandate of synchronization, RA No. 10153 postponed the regional
elections in the Autonomous Region in Muslim Mindanao (ARMM) (which were
scheduled to be held on the second Monday of August 2011) to the second
Monday of May 2013 and recognized the Presidents power to appoint officers-in-
charge (OICs) to temporarily assume these positions upon the expiration of the
terms of the elected officials.
The Motions for Reconsideration

The petitioners in G.R. No. 196271 raise the following grounds in support of their
motion:

I. THE HONORABLE COURT ERRED IN CONCLUDING THAT THE

ARMM ELECTIONS ARE LOCAL ELECTIONS, CONSIDERING THAT
THE CONSTITUTION GIVES THE ARMM A SPECIAL STATUS AND IS
SEPARATE AND DISTINCT FROM ORDINARY LOCAL GOVERNMENT
UNITS.

II. R.A. 10153 AND R.A. 9333 AMEND THE ORGANIC ACT.

III. THE SUPERMAJORITY PROVISIONS OF THE ORGANIC ACT (R.A.

9054) ARE NOT IRREPEALABLE LAWS.

IV. SECTION 3, ARTICLE XVII OF R.A. 9054 DOES NOT VIOLATE

SECTION 18, ARTICLE X OF THE CONSTITUTION.

V. BALANCE OF INTERESTS TILT IN FAVOR OF THE DEMOCRATIC

PRINCIPLE[.][1]
The petitioner in G.R. No. 197221 raises similar grounds, arguing that:

I. THE ELECTIVE REGIONAL EXECUTIVE AND LEGISLATIVE OFFICIALS

OF ARMM CANNOT BE CONSIDERED AS OR EQUATED WITH THE
TRADITIONAL LOCAL GOVERNMENT OFFICIALS IN THE LOCAL
GOVERNMENT UNITS (LGUs) BECAUSE (A) THERE IS NO EXPLICIT
CONSTITUTIONAL PROVISION ON SUCH PARITY; AND (B) THE
ARMM IS MORE SUPERIOR THAN LGUs IN STRUCTURE, POWERS
AND AUTONOMY, AND CONSEQUENTLY IS A CLASS OF ITS OWN
APART FROM TRADITIONAL LGUs.

II. THE UNMISTAKABLE AND UNEQUIVOCAL CONSTITUTIONAL

MANDATE FOR AN ELECTIVE AND REPRESENTATIVE EXECUTIVE
DEPARTMENT AND LEGISLATIVE ASSEMBLY IN ARMM
INDUBITABLY PRECLUDES THE APPOINTMENT BY THE PRESIDENT
OF OFFICERS-IN-CHARGE (OICs), ALBEIT MOMENTARY OR
TEMPORARY, FOR THE POSITIONS OF ARMM GOVERNOR, VICE
GOVERNOR AND MEMBERS OF THE REGIONAL ASSEMBLY.

III. THE PRESIDENTS APPOINTING POWER IS LIMITED TO APPOINTIVE

OFFICIALS AND DOES NOT EXTEND TO ELECTIVE OFFICIALS EVEN
AS THE PRESIDENT IS ONLY VESTED WITH SUPERVISORY POWERS
OVER THE ARMM, THEREBY NEGATING THE AWESOME POWER
TO APPOINT AND REMOVE OICs OCCUPYING ELECTIVE
POSITIONS.
IV. THE CONSTITUTION DOES NOT PROSCRIBE THE HOLDOVER OF
ARMM ELECTED OFFICIALS PENDING THE ELECTION AND
QUALIFICATION OF THEIR SUCCESSORS.

V. THE RULING IN OSMENA DOES NOT APPLY TO ARMM ELECTED

OFFICIALS WHOSE TERMS OF OFFICE ARE NOT PROVIDED FOR BY
THE CONSTITUTION BUT PRESCRIBED BY THE ORGANIC ACTS.

VI. THE REQUIREMENT OF A SUPERMAJORITY OF VOTES IN THE

HOUSE OF REPRESENTATIVES AND THE SENATE FOR THE
VALIDITY OF A SUBSTANTIVE AMENDMENT OR REVISION OF THE
ORGANIC ACTS DOES NOT IMPOSE AN IRREPEALABLE LAW.

VII. THE REQUIREMENT OF A PLEBISCITE FOR THE EFFECTIVITY OF A

SUBSTANTIVE AMENDMENT OR REVISION OF THE ORGANIC ACTS
DOES NOT UNDULY EXPAND THE PLEBISCITE REQUIREMENT OF
THE CONSTITUTION.

VIII. SYNCHRONIZATION OF THE ARMM ELECTION WITH THE

NATIONAL AND LOCAL ELECTIONS IS NOT MANDATED BY THE
CONSTITUTION.

IX. THE COMELEC HAS THE AUTHORITY TO HOLD AND CONDUCT

SPECIAL ELECTIONS IN ARMM, AND THE ENACTMENT OF AN
IMPROVIDENT AND UNCONSTITUTIONAL STATUTE IS AN
ANALOGOUS CAUSE WARRANTING COMELECS HOLDING OF
SPECIAL ELECTIONS.[2] (italics supplied)
 The petitioner in G.R. No. 196305 further asserts that:

I. BEFORE THE COURT MAY CONSTRUE OR INTERPRET A STATUTE,

IT IS A CONDITION SINE QUA NON THAT THERE BE DOUBT OR
AMBIGUITY IN ITS LANGUAGE.

THE TRANSITORY PROVISIONS HOWEVER ARE CLEAR AND

UNAMBIGUOUS: THEY REFER TO THE 1992 ELECTIONS AND
TURN-OVER OF ELECTIVE OFFICIALS.

IN THUS RECOGNIZING A SUPPOSED INTENT OF THE FRAMERS,

AND APPLYING THE SAME TO ELECTIONS 20 YEARS AFTER, THE
HONORABLE SUPREME COURT MAY HAVE
VIOLATED THE FOREMOST RULE IN STATUTORY CONSTRUCTION.

xxxx

II. THE HONORABLE COURT SHOULD HAVE CONSIDERED THAT RA

9054, AN ORGANIC ACT, WAS COMPLETE IN ITSELF. HENCE, RA
10153 SHOULD BE CONSIDERED TO HAVE BEEN ENACTED
PRECISELY TO AMEND RA 9054.

xxxx
 III. THE HONORABLE COURT MAY HAVE COMMITTED A SERIOUS
ERROR IN DECLARING THE 2/3 VOTING REQUIREMENT
SET FORTH IN RA 9054 AS UNCONSTITUTIONAL.

xxxx

IV. THE HONORABLE COURT MAY HAVE COMMITTED A SERIOUS

ERROR IN HOLDING THAT A PLEBISCITE IS NOT NECESSARY IN
AMENDING THE ORGANIC ACT.

xxxx

V. THE HONORABLE COURT COMMITTED A SERIOUS ERROR IN

DECLARING THE HOLD-OVER OF ARMM ELECTIVE OFFICIALS
UNCONSTITUTIONAL.

xxxx

VI. THE HONORABLE COURT COMMITTED A SERIOUS ERROR IN

UPHOLDING THE APPOINTMENT OF OFFICERS-IN-
CHARGE.[3] (italics and underscoring supplied)

The petitioner in G.R. No. 197282 contends that:

A.
ASSUMING WITHOUT CONCEDING THAT THE APPOINTMENT OF OICs
FOR THE REGIONAL GOVERNMENT OF THE ARMM IS NOT
UNCONSTITUTIONAL TO BEGIN WITH, SUCH APPOINTMENT OF OIC
REGIONAL OFFICIALS WILL CREATE A FUNDAMENTAL CHANGE IN THE
BASIC STRUCTURE OF THE REGIONAL GOVERNMENT SUCH THAT R.A.
NO. 10153 SHOULD HAVE BEEN SUBMITTED TO A PLEBISCITE IN THE
ARMM FOR APPROVAL BY ITS PEOPLE, WHICH PLEBISCITE
REQUIREMENT CANNOT BE CIRCUMVENTED BY SIMPLY
CHARACTERIZING THE PROVISIONS OF R.A. NO. 10153 ON
APPOINTMENT OF OICs AS AN INTERIM MEASURE.

B.

THE HONORABLE COURT ERRED IN RULING THAT THE APPOINTMENT BY

THE PRESIDENT OF OICs FOR THE ARMM REGIONAL GOVERNMENT IS
NOT VIOLATIVE OF THE CONSTITUTION.

C.

THE HOLDOVER PRINCIPLE ADOPTED IN R.A. NO. 9054 DOES NOT

VIOLATE THE CONSTITUTION, AND BEFORE THEIR SUCCESSORS ARE
ELECTED IN EITHER AN ELECTION TO BE HELD AT THE SOONEST
POSSIBLE TIME OR IN MAY 2013, THE SAID INCUMBENT ARMM
REGIONAL OFFICIALS MAY VALIDLY CONTINUE FUNCTIONING AS SUCH
IN A HOLDOVER CAPACITY IN ACCORDANCE WITH SECTION 7, ARTICLE
VII OF R.A. NO. 9054.

D.
WITH THE CANCELLATION OF THE AUGUST 2011 ARMM ELECTIONS,
SPECIAL ELECTIONS MUST IMMEDIATELY BE HELD FOR THE ELECTIVE
REGIONAL OFFICIALS OF THE ARMM WHO SHALL SERVE UNTIL THEIR
SUCCESSORS ARE ELECTED IN THE MAY 2013 SYNCHRONIZED
ELECTIONS.[4]

Finally, the petitioners in G.R. No. 197280 argue that:

a) the Constitutional mandate of synchronization does not apply to the

ARMM elections;

b) RA No. 10153 negates the basic principle of republican democracy

which, by constitutional mandate, guides the governance of the
Republic;

c) RA No. 10153 amends the Organic Act (RA No. 9054) and, thus, has
to comply with the 2/3 vote from the House of Representatives and
the Senate, voting separately, and be ratified in a plebiscite;

d) if the choice is between elective officials continuing to hold their

offices even after their terms are over and non-elective individuals
getting into the vacant elective positions by appointment as OICs, the
holdover option is the better choice;
e) the President only has the power of supervision over autonomous
regions, which does not include the power to appoint OICs to take
the place of ARMM elective officials; and

f) it would be better to hold the ARMM elections separately from the

national and local elections as this will make it easier for the
authorities to implement election laws.

In essence, the Court is asked to resolve the following questions:

(a) Does the Constitution mandate the synchronization of ARMM

regional elections with national and local elections?

(b) Does RA No. 10153 amend RA No. 9054? If so, does RA No. 10153
have to comply with the supermajority vote and plebiscite
requirements?

(c) Is the holdover provision in RA No. 9054 constitutional?

(d) Does the COMELEC have the power to call for special elections in
ARMM?
 (e) Does granting the President the power to appoint OICs violate the
elective and representative nature of ARMM regional legislative and
executive offices?

(f) Does the appointment power granted to the President exceed the
Presidents supervisory powers over autonomous regions?

The Courts Ruling

We deny the motions for lack of merit.

Synchronization mandate includes ARMM elections

The Court was unanimous in holding that the Constitution mandates the
synchronization of national and local elections. While the Constitution does not
expressly instruct Congress to synchronize the national and local elections, the
intention can be inferred from the following provisions of the Transitory
Provisions (Article XVIII) of the Constitution, which state:

Section 1. The first elections of Members of the Congress under this

Constitution shall be held on the second Monday of May, 1987.

The first local elections shall be held on a date to be determined by the

President, which may be simultaneous with the election of the
Members of the Congress. It shall include the election of all Members of
the city or municipal councils in the Metropolitan Manila area.
 Section 2. The Senators, Members of the House of Representatives, and
the local officials first elected under this Constitution shall serve until
noon of June 30, 1992.

Of the Senators elected in the elections in 1992, the first twelve

obtaining the highest number of votes shall serve for six years and the
remaining twelve for three years.

xxxx

Section 5. The six-year term of the incumbent President and Vice-

President elected in the February 7, 1986 election is, for purposes of
synchronization of elections, hereby extended to noon of June 30, 1992.

The first regular elections for the President and Vice-President under
this Constitution shall be held on the second Monday of May, 1992.

To fully appreciate the constitutional intent behind these provisions, we

refer to the discussions of the Constitutional Commission:

MR. MAAMBONG. For purposes of identification, I will now read a

section which we will temporarily indicate as Section 14. It reads: THE
SENATORS, MEMBERS OF THE HOUSE OF REPRESENTATIVES
AND THE LOCAL OFFICIALS ELECTED IN THE FIRST
ELECTION SHALL SERVE FOR FIVE YEARS, TO EXPIRE AT
NOON OF JUNE 1992.
This was presented by Commissioner Davide, so may we ask that
Commissioner Davide be recognized.

THE PRESIDING OFFICER (Mr. Rodrigo). Commissioner Davide is

recognized.

MR. DAVIDE. Before going to the proposed amendment, I would only

state that in view of the action taken by the Commission on Section 2
earlier, I am formulating a new proposal. It will read as follows: THE
SENATORS, MEMBERS OF THE HOUSE OF REPRESENTATIVES
AND THE LOCAL OFFICIALS FIRST ELECTED UNDER THIS
CONSTITUTION SHALL SERVE UNTIL NOON OF JUNE 30, 1992.

I proposed this because of the proposed section of the Article on

Transitory Provisions giving a term to the incumbent President and Vice-
President until 1992. Necessarily then, since the term provided by the
Commission for Members of the Lower House and for local officials is
three years, if there will be an election in 1987, the next election for said
officers will be in 1990, and it would be very close to 1992. We could
never attain, subsequently, any synchronization of election which is once
every three years.

So under my proposal we will be able to begin actual

synchronization in 1992, and consequently, we should not have a local
election or an election for Members of the Lower House in 1990 for
them to be able to complete their term of three years each. And if we
also stagger the Senate, upon the first election it will result in an election
in 1993 for the Senate alone, and there will be an election for 12
Senators in 1990. But for the remaining 12 who will be elected in 1987,
if their term is for six years, their election will be in 1993. So,
consequently we will have elections in 1990, in 1992 and in 1993. The
later election will be limited to only 12 Senators and of course to the
local officials and the Members of the Lower House. But, definitely,
thereafter we can never have an election once every three years,
therefore defeating the very purpose of the Commission when we
adopted the term of six years for the President and another six years for
the Senators with the possibility of staggering with 12 to serve for six
years and 12 for three years insofar as the first Senators are
concerned. And so my proposal is the only way to effect the first
synchronized election which would mean, necessarily, a bonus of two
years to the Members of the Lower House and a bonus of two years
to the local elective officials.

THE PRESIDING OFFICER (Mr. Rodrigo). What does the committee

say?

MR. DE CASTRO. Mr. Presiding Officer.

THE PRESIDING OFFICER (Mr. Rodrigo). Commissioner de Castro is

recognized.

MR. DE CASTRO. Thank you.

During the discussion on the legislative and the synchronization of

elections, I was the one who proposed that in order to synchronize the
elections every three years, which the body approved the first national
and local officials to be elected in 1987 shall continue in office for five
years, the same thing the Honorable Davide is now proposing. That
means they will all serve until 1992, assuming that the term of the
President will be for six years and continue beginning in 1986. So from
1992, we will again have national, local and presidential elections. This
time, in 1992, the President shall have a term until 1998 and the first
12 Senators will serve until 1998, while the next 12 shall serve until
1995, and then the local officials elected in 1992 will serve until
1995. From then on, we shall have an election every three years.

So, I will say that the proposition of Commissioner Davide is in order, if

we have to synchronize our elections every three years which was
already approved by the body.

Thank you, Mr. Presiding Officer.

xxxx

MR. GUINGONA. What will be synchronized, therefore, is the election

of the incumbent President and Vice-President in 1992.

MR. DAVIDE. Yes.

 MR. GUINGONA. Not the reverse. Will the committee not synchronize
the election of the Senators and local officials with the election of the
President?

MR. DAVIDE. It works both ways, Mr. Presiding Officer. The attempt
here is on the assumption that the provision of the Transitory Provisions
on the term of the incumbent President and Vice-President would really
end in 1992.

MR. GUINGONA. Yes.

MR. DAVIDE. In other words, there will be a single election in 1992

for all, from the President up to the municipal officials.[5] (emphases
and underscoring ours)

The framers of the Constitution could not have expressed their objective
more clearly there was to be a single election in 1992 for all elective officials from
the President down to the municipal officials. Significantly, the framers were even
willing to temporarily lengthen or shorten the terms of elective officials in order
to meet this objective, highlighting the importance of this constitutional mandate.

We came to the same conclusion in Osmea v. Commission on

Elections,[6] where we unequivocally stated that the Constitution has mandated
synchronized national and local elections."[7] Despite the length and verbosity of
their motions, the petitioners have failed to convince us to deviate from this
established ruling.

Neither do we find any merit in the petitioners contention that the ARMM
elections are not covered by the constitutional mandate of synchronization
because the ARMM elections were not specifically mentioned in the above-
quoted Transitory Provisions of the Constitution.
 That the ARMM elections were not expressly mentioned in the Transitory
Provisions of the Constitution on synchronization cannot be interpreted to mean
that the ARMM elections are not covered by the constitutional mandate of
synchronization. We have to consider that the ARMM, as we now know it, had
not yet been officially organized at the time the Constitution was enacted and
ratified by the people. Keeping in mind that a constitution is not intended to
provide merely for the exigencies of a few years but is to endure through
generations for as long as it remains unaltered by the people as ultimate
sovereign, a constitution should be construed in the light of what actually is
a continuing instrument to govern not only the present but also the unfolding
events of the indefinite future. Although the principles embodied in a constitution
remain fixed and unchanged from the time of its adoption, a constitution must be
construed as a dynamic process intended to stand for a great length of time, to be
progressive and not static.[8]

To reiterate, Article X of the Constitution, entitled Local Government,

clearly shows the intention of the Constitution to classify autonomous regions,
such as the ARMM, as local governments. We refer to Section 1 of this Article,
which provides:

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.

The inclusion of autonomous regions in the enumeration of political

subdivisions of the State under the heading Local Government indicates quite
clearly the constitutional intent to consider autonomous regions as one of the
forms of local governments.
 That the Constitution mentions only the national government and the local
governments, and does not make a distinction between the local government and
the regional government, is particularly revealing, betraying as it does the
intention of the framers of the Constitution to consider the autonomous regions
not as separate forms of government, but as political units which, while having
more powers and attributes than other local government units, still remain under
the category of local governments. Since autonomous regions are classified as
local governments, it follows that elections held in autonomous regions are also
considered as local elections.

The petitioners further argue that even assuming that the Constitution
mandates the synchronization of elections, the ARMM elections are not covered
by this mandate since they are regional elections and not local elections.

In construing provisions of the Constitution, the first rule is verba legis, that
is, wherever possible, the words used in the Constitution must be given their
ordinary meaning except where technical terms are employed.[9] Applying this
principle to determine the scope of local elections, we refer to the meaning of the
word local, as understood in its ordinary sense. As defined in Websters Third New
International Dictionary Unabridged, local refers to something that primarily
serves the needs of a particular limited district, often a community or minor
political subdivision. Obviously, the ARMM elections, which are held within the
confines of the autonomous region of Muslim Mindanao, fall within this
definition.

To be sure, the fact that the ARMM possesses more powers than other
provinces, cities, or municipalities is not enough reason to treat the ARMM
regional elections differently from the other local elections. Ubi lex non distinguit
nec nos distinguire debemus. When the law does not distinguish, we must not
distinguish.[10]
RA No. 10153 does not amend RA No. 9054

The petitioners are adamant that the provisions of RA No. 10153, in postponing
the ARMM elections, amend RA No. 9054.
We cannot agree with their position.

A thorough reading of RA No. 9054 reveals that it fixes the schedule for
only the first ARMM elections;[11] it does not provide the date for the succeeding
regular ARMM elections. In providing for the date of the regular ARMM elections,
RA No. 9333 and RA No. 10153 clearly do not amend RA No. 9054 since these
laws do not change or revise any provision in RA No. 9054. In fixing the date of
the ARMM elections subsequent to the first election, RA No. 9333 and RA No.
10153 merely filled the gap left in RA No. 9054.

We reiterate our previous observations:

This view that Congress thought it best to leave the

determination of the date of succeeding ARMM elections to legislative
discretion finds support in ARMMs recent history.

To recall, RA No. 10153 is not the first law passed that

rescheduled the ARMM elections. The First Organic Act RA No. 6734
not only did not fix the date of the subsequent elections; it did not even
fix the specific date of the first ARMM elections, leaving the date to be
fixed in another legislative enactment. Consequently, RA No. 7647, RA
No. 8176, RA No. 8746, RA No. 8753, and RA No. 9012 were all enacted
by Congress to fix the dates of the ARMM elections. Since these laws
did not change or modify any part or provision of RA No. 6734, they
were not amendments to this latter law. Consequently, there was no
need to submit them to any plebiscite for ratification.
 The Second Organic Act RA No. 9054 which lapsed into law on
March 31, 2001, provided that the first elections would be held on the
second Monday of September 2001. Thereafter, Congress passed RA
No. 9140 to reset the date of the ARMM elections. Significantly, while
RA No. 9140 also scheduled the plebiscite for the ratification of the
Second Organic Act (RA No. 9054), the new date of the ARMM regional
elections fixed in RA No. 9140 was not among the provisions ratified
in the plebiscite held to approve RA No. 9054. Thereafter, Congress
passed RA No. 9333, which further reset the date of the ARMM regional
elections. Again, this law was not ratified through a plebiscite.

From these legislative actions, we see the clear intention of

Congress to treat the laws which fix the date of the subsequent ARMM
elections as separate and distinct from the Organic Acts. Congress only
acted consistently with this intent when it passed RA No. 10153 without
requiring compliance with the amendment prerequisites embodied in
Section 1 and Section 3, Article XVII of RA No. 9054.[12] (emphases
supplied)

The petitioner in G.R. No. 196305 contends, however, that there is no

lacuna in RA No. 9054 as regards the date of the subsequent ARMM elections. In
his estimation, it can be implied from the provisions of RA No. 9054 that the
succeeding elections are to be held three years after the date of the first ARMM
regional elections.

We find this an erroneous assertion. Well-settled is the rule that the court
may not, in the guise of interpretation, enlarge the scope of a statute and include
therein situations not provided nor intended by the lawmakers. An omission at
the time of enactment, whether careless or calculated, cannot be judicially
supplied however later wisdom may recommend the inclusion.[13] Courts are not
authorized to insert into the law what they think should be in it or to supply what
they think the legislature would have supplied if its attention had been called to
the omission.[14] Providing for lapses within the law falls within the exclusive
domain of the legislature, and courts, no matter how well-meaning, have no
authority to intrude into this clearly delineated space.

Since RA No. 10153 does not amend, but merely fills in the gap in RA No.
9054, there is no need for RA No. 10153 to comply with the amendment
requirements set forth in Article XVII of RA No. 9054.

Supermajority vote requirement makes RA No. 9054 an irrepealable law

Even assuming that RA No. 10153 amends RA No. 9054, however, we have
already established that the supermajority vote requirement set forth in Section
1, Article XVII of RA No. 9054[15] is unconstitutional for violating the principle that
Congress cannot pass irrepealable laws.

The power of the legislature to make laws includes the power to amend and
repeal these laws. Where the legislature, by its own act, attempts to limit its
power to amend or repeal laws, the Court has the duty to strike down such act for
interfering with the plenary powers of Congress. As we explained in Duarte v.
Dade:[16]

A state legislature has a plenary law-making power over all subjects,

whether pertaining to persons or things, within its territorial
jurisdiction, either to introduce new laws or repeal the old, unless
prohibited expressly or by implication by the federal constitution or
limited or restrained by its own. It cannot bind itself or its successors by
enacting irrepealable laws except when so restrained. Every legislative
body may modify or abolish the acts passed by itself or its predecessors.
This power of repeal may be exercised at the same session at which the
 original act was passed; and even while a bill is in its progress and
before it becomes a law. This legislature cannot bind a future
legislature to a particular mode of repeal. It cannot declare in advance
the intent of subsequent legislatures or the effect of subsequent
legislation upon existing statutes. [emphasis ours]

Under our Constitution, each House of Congress has the power to approve
bills by a mere majority vote, provided there is quorum.[17]In requiring all laws
which amend RA No. 9054 to comply with a higher voting requirement than the
Constitution provides (2/3 vote), Congress, which enacted RA No. 9054, clearly
violated the very principle which we sought to establish in Duarte. To reiterate,
the act of one legislature is not binding upon, and cannot tie the hands of, future
legislatures.[18]

We also highlight an important point raised by Justice Antonio T. Carpio in

his dissenting opinion, where he stated: Section 1, Article XVII of RA 9054 erects a
high vote threshold for each House of Congress to surmount, effectively and
unconstitutionally, taking RA 9054 beyond the reach of Congress amendatory
powers. One Congress cannot limit or reduce the plenary legislative power of
succeeding Congresses by requiring a higher vote threshold than what the
Constitution requires to enact, amend or repeal laws. No law can be passed fixing
such a higher vote threshold because Congress has no power, by ordinary
legislation, to amend the Constitution.[19]

Plebiscite requirement in RA No. 9054 overly broad

Similarly, we struck down the petitioners contention that the plebiscite

requirement[20] applies to all amendments of RA No. 9054 for being an
unreasonable enlargement of the plebiscite requirement set forth in the
Constitution.

Section 18, Article X of the Constitution provides that [t]he 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[.] We
interpreted this to mean that only amendments to, or revisions of, the Organic
Act constitutionally-essential to the creation of autonomous regions i.e., those
aspects specifically mentioned in the Constitution which Congress must provide
for in the Organic Act[21] require ratification through a plebiscite. We stand by this
interpretation.

The petitioners argue that to require all amendments to RA No. 9054 to

comply with the plebiscite requirement is to recognize that sovereignty resides
primarily in the people.

While we agree with the petitioners underlying premise that sovereignty

ultimately resides with the people, we disagree that this legal reality necessitates
compliance with the plebiscite requirement for all amendments to RA No. 9054.
For if we were to go by the petitioners interpretation of Section 18, Article X of
the Constitution that all amendments to the Organic Act have to undergo the
plebiscite requirement before becoming effective, this would lead to impractical
and illogical results hampering the ARMMs progress by impeding Congress from
enacting laws that timely address problems as they arise in the region, as well as
weighing down the ARMM government with the costs that unavoidably follow the
holding of a plebiscite.

Interestingly, the petitioner in G.R. No. 197282 posits that RA No. 10153, in
giving the President the power to appoint OICs to take the place of the elective
officials of the ARMM, creates a fundamental change in the basic structure of the
government, and thus requires compliance with the plebiscite requirement
embodied in RA No. 9054.

Again, we disagree.

The pertinent provision in this regard is Section 3 of RA No. 10153, which

reads:

Section 3. Appointment of Officers-in-Charge. The President shall

appoint officers-in-charge for the Office of the Regional Governor,
Regional Vice Governor and Members of the Regional Legislative
Assembly who shall perform the functions pertaining to the said offices
until the officials duly elected in the May 2013 elections shall have
qualified and assumed office.

We cannot see how the above-quoted provision has changed the basic
structure of the ARMM regional government. On the contrary, this provision
clearly preserves the basic structure of the ARMM regional government when it
recognizes the offices of the ARMM regional government and directs the OICs
who shall temporarily assume these offices to perform the functions pertaining to
the said offices.

Unconstitutionality of the holdover provision

The petitioners are one in defending the constitutionality of Section 7(1), Article
VII of RA No. 9054, which allows the regional officials to remain in their positions
in a holdover capacity. The petitioners essentially argue that the ARMM regional
officials should be allowed to remain in their respective positions until the May
2013 elections since there is no specific provision in the Constitution which
prohibits regional elective officials from performing their duties in a holdover
capacity.

The pertinent provision of the Constitution is Section 8, Article X which provides:

Section 8. The term of office of elective local officials, except barangay

officials, which shall be determined by law, shall be three years and no
such official shall serve for more than three consecutive terms.
[emphases ours]

On the other hand, Section 7(1), Article VII of RA No. 9054 provides:

Section 7. Terms of Office of Elective Regional Officials. (1) Terms of

Office. The terms of office of the Regional Governor, Regional Vice
Governor and members of the Regional Assembly shall be for a period
of three (3) years, which shall begin at noon on the 30th day of
September next following the day of the election and shall end at noon
of the same date three (3) years thereafter. The incumbent elective
officials of the autonomous region shall continue in effect until their
successors are elected and qualified.

The clear wording of Section 8, Article X of the Constitution expresses the

intent of the framers of the Constitution to categorically set a limitation on the
period within which all elective local officials can occupy their offices. We have
already established that elective ARMM officials are also local officials; they are,
thus, bound by the three-year term limit prescribed by the Constitution. It,
therefore, becomes irrelevant that the Constitution does not expressly prohibit
elective officials from acting in a holdover capacity. Short of amending the
Constitution, Congress has no authority to extend the three-year term limit by
inserting a holdover provision in RA No. 9054. Thus, the term of three years for
local officials should stay at three (3) years, as fixed by the Constitution, and
cannot be extended by holdover by Congress.

Admittedly, we have, in the past, recognized the validity of holdover

provisions in various laws. One significant difference between the present case
and these past cases[22] is that while these past cases all refer to
elective barangay or sangguniang kabataanofficials whose terms of office are not
explicitly provided for in the Constitution, the present case refers to local elective
officials - the ARMM Governor, the ARMM Vice Governor, and the members of
the Regional Legislative Assembly - whose terms fall within the three-year term
limit set by Section 8, Article X of the Constitution.

Even assuming that a holdover is constitutionally permissible, and there

had been statutory basis for it (namely Section 7, Article VII of RA No. 9054), the
rule of holdover can only apply as an available option where no express or implied
legislative intent to the contrary exists; it cannot apply where such contrary intent
is evident.[23]

Congress, in passing RA No. 10153 and removing the holdover option, has
made it clear that it wants to suppress the holdover rule expressed in RA No.
9054. Congress, in the exercise of its plenary legislative powers, has clearly acted
within its discretion when it deleted the holdover option, and this Court has no
authority to question the wisdom of this decision, absent any evidence of
unconstitutionality or grave abuse of discretion. It is for the legislature and the
executive, and not this Court, to decide how to fill the vacancies in the ARMM
regional government which arise from the legislature complying with the
constitutional mandate of synchronization.

COMELEC has no authority to hold special elections

Neither do we find any merit in the contention that the Commission on Elections
(COMELEC) is sufficiently empowered to set the date of special elections in the
ARMM. To recall, the Constitution has merely empowered the COMELEC to
enforce and administer all laws and regulations relative to the conduct of an
election.[24] Although the legislature, under the Omnibus Election Code (Batas
Pambansa Bilang[BP] 881), has granted the COMELEC the power to postpone
elections to another date, this power is confined to the specific terms and
circumstances provided for in the law. Specifically, this power falls within the
narrow confines of the following provisions:

Section 5. Postponement of election. - When for any serious cause such

as violence, terrorism, loss or destruction of election paraphernalia or
records, force majeure, and other analogous causes of such a nature
that the holding of a free, orderly and honest election should become
impossible in any political subdivision, the Commission, motu proprio or
upon a verified petition by any interested party, and after due notice
and hearing, whereby all interested parties are afforded equal
opportunity to be heard, shall postpone the election therein to a date
which should be reasonably close to the date of the election not held,
suspended or which resulted in a failure to elect but not later than
thirty days after the cessation of the cause for such postponement or
suspension of the election or failure to elect.

Section 6. Failure of election. - If, on account of force

majeure, violence, terrorism, fraud, or other analogous causes the
 election in any polling place has not been held on the date
fixed, or had been suspended before the hour fixed by law for the
closing of the voting, or after the voting and during the preparation and
the transmission of the election returns or in the custody or canvass
thereof, such election results in a failure to elect, and in any of such
cases the failure or suspension of election would affect the result of the
election, the Commission shall, on the basis of a verified petition by any
interested party and after due notice and hearing, call for the holding or
continuation of the election not held, suspended or which resulted in a
failure to elect on a date reasonably close to the date of the election
not held, suspended or which resulted in a failure to elect but not later
than thirty days after the cessation of the cause of such postponement
or suspension of the election or failure to elect. [emphases and
underscoring ours]

As we have previously observed in our assailed decision, both Section 5 and

Section 6 of BP 881 address instances where elections have already been
scheduled to take place but do not occur or had to be suspended because
of unexpected and unforeseen circumstances, such as violence, fraud, terrorism,
and other analogous circumstances.

In contrast, the ARMM elections were postponed by law, in furtherance

of the constitutional mandate of synchronization of national and local elections.
Obviously, this does not fall under any of the circumstances contemplated by
Section 5 or Section 6 of BP 881.
 More importantly, RA No. 10153 has already fixed the date for the next
ARMM elections and the COMELEC has no authority to set a different election
date.

Even assuming that the COMELEC has the authority to hold special elections, and
this Court can compel the COMELEC to do so, there is still the problem of having
to shorten the terms of the newly elected officials in order to synchronize the
ARMM elections with the May 2013 national and local elections. Obviously,
neither the Court nor the COMELEC has the authority to do this, amounting as it
does to an amendment of Section 8, Article X of the Constitution, which limits the
term of local officials to three years.

Presidents authority to appoint OICs

The petitioner in G.R. No. 197221 argues that the Presidents power to
appoint pertains only to appointive positions and cannot extend to positions held
by elective officials.

The power to appoint has traditionally been recognized as executive in

nature.[25] Section 16, Article VII of the Constitution describes in broad strokes the
extent of this power, thus:

Section 16. The President shall nominate and, with the consent of the
Commission on Appointments, appoint the heads of the executive
departments, ambassadors, other public ministers and consuls, or
officers of the armed forces from the rank of colonel or naval captain,
and other officers whose appointments are vested in him in this
Constitution. He shall also appoint all other officers of the
Government whose appointments are not otherwise provided for by
law, and those whom he may be authorized by law to appoint. The
 Congress may, by law, vest the appointment of other officers lower in
rank in the President alone, in the courts, or in the heads of
departments, agencies, commissions, or boards. [emphasis ours]

The 1935 Constitution contained a provision similar to the one quoted

above. Section 10(3), Article VII of the 1935 Constitution provides:

(3) The President shall nominate and with the consent of the
Commission on Appointments, shall appoint the heads of the executive
departments and bureaus, officers of the Army from the rank of
colonel, of the Navy and Air Forces from the rank of captain or
commander, and all other officers of the Government whose
appointments are not herein otherwise provided for, and those whom
he may be authorized by law to appoint; but the Congress may by law
vest the appointment of inferior officers, in the President alone, in the
courts, or in the heads of departments. [emphasis ours]

The main distinction between the provision in the 1987 Constitution and its
counterpart in the 1935 Constitution is the sentence construction; while in the
1935 Constitution, the various appointments the President can make are
enumerated in a single sentence, the 1987 Constitution enumerates the various
appointments the President is empowered to make and divides the enumeration
in two sentences. The change in style is significant; in providing for this change,
the framers of the 1987 Constitution clearly sought to make a distinction between
the first group of presidential appointments and the second group of presidential
appointments, as made evident in the following exchange:
 MR. FOZ. Madame President x x x I propose to put a period (.) after
captain and x x x delete and all and substitute it with HE SHALL ALSO
APPOINT ANY.

MR. REGALADO. Madam President, the Committee accepts the

proposed amendment because it makes it clear that those other
officers mentioned therein do not have to be confirmed by the
Commission on Appointments.[26]

The first group of presidential appointments, specified as the heads of the

executive departments, ambassadors, other public ministers and consuls, or
officers of the Armed Forces, and other officers whose appointments are vested
in the President by the Constitution, pertains to the appointive officials who have
to be confirmed by the Commission on Appointments.

The second group of officials the President can appoint are all other officers
of the Government whose appointments are not otherwise provided for by law,
and those whom he may be authorized by law to appoint.[27] The second sentence
acts as the catch-all provision for the Presidents appointment power, in
recognition of the fact that the power to appoint is essentially executive in
nature.[28] The wide latitude given to the President to appoint is further
demonstrated by the recognition of the Presidents power to appoint
officials whose appointments are not even provided for by law. In other words,
where there are offices which have to be filled, but the law does not provide the
process for filling them, the Constitution recognizes the power of the President to
fill the office by appointment.

Any limitation on or qualification to the exercise of the Presidents

appointment power should be strictly construed and must be clearly stated in
order to be recognized.[29] Given that the President derives his power to appoint
OICs in the ARMM regional government from law, it falls under the classification
of presidential appointments covered by the second sentence of Section 16,
Article VII of the Constitution; the Presidents appointment power thus rests on
clear constitutional basis.

The petitioners also jointly assert that RA No. 10153, in granting the
President the power to appoint OICs in elective positions, violates Section 16,
Article X of the Constitution,[30] which merely grants the President the power of
supervision over autonomous regions.

This is an overly restrictive interpretation of the Presidents appointment

power. There is no incompatibility between the Presidents power of supervision
over local governments and autonomous regions, and the power granted to the
President, within the specific confines of RA No. 10153, to appoint OICs.

The power of supervision is defined as the power of a superior officer to see to it

that lower officers perform their functions in accordance with law.[31] This is
distinguished from the power of control or the power of an officer 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 former for the latter.[32]

The petitioners apprehension regarding the Presidents alleged power of

control over the OICs is rooted in their belief that the Presidents appointment
power includes the power to remove these officials at will. In this way, the
petitioners foresee that the appointed OICs will be beholden to the President, and
act as representatives of the President and not of the people.
Section 3 of RA No. 10153 expressly contradicts the petitioners supposition.
The provision states:
 Section 3. Appointment of Officers-in-Charge. The President shall
appoint officers-in-charge for the Office of the Regional Governor,
Regional Vice Governor and Members of the Regional Legislative
Assembly who shall perform the functions pertaining to the said offices
until the officials duly elected in the May 2013 elections shall have
qualified and assumed office.

The wording of the law is clear. Once the President has appointed the OICs
for the offices of the Governor, Vice Governor and members of the Regional
Legislative Assembly, these same officials will remain in office until they are
replaced by the duly elected officials in the May 2013 elections. Nothing in this
provision even hints that the President has the power to recall the appointments
he already made. Clearly, the petitioners fears in this regard are more apparent
than real.

RA No. 10153 as an interim measure

We reiterate once more the importance of considering RA No. 10153 not in

a vacuum, but within the context it was enacted in. In the first place, Congress
enacted RA No. 10153 primarily to heed the constitutional mandate to
synchronize the ARMM regional elections with the national and local elections. To
do this, Congress had to postpone the scheduled ARMM elections for another
date, leaving it with the problem of how to provide the ARMM with governance
in the intervening period, between the expiration of the term of those elected in
August 2008 and the assumption to office twenty-one (21) months away of those
who will win in the synchronized elections on May 13, 2013.

In our assailed Decision, we already identified the three possible solutions

open to Congress to address the problem created by synchronization (a) allow the
incumbent officials to remain in office after the expiration of their terms in a
holdover capacity; (b) call for special elections to be held, and shorten the terms
of those to be elected so the next ARMM regional elections can be held on May
13, 2013; or (c) recognize that the President, in the exercise of his appointment
powers and in line with his power of supervision over the ARMM, can appoint
interim OICs to hold the vacated positions in the ARMM regional government
upon the expiration of their terms. We have already established the
unconstitutionality of the first two options, leaving us to consider the last
available option.

In this way, RA No. 10153 is in reality an interim measure, enacted to

respond to the adjustment that synchronization requires. Given the context, we
have to judge RA No. 10153 by the standard of reasonableness in responding to
the challenges brought about by synchronizing the ARMM elections with the
national and local elections. In other words, given the plain unconstitutionality of
providing for a holdover and the unavailability of constitutional possibilities for
lengthening or shortening the term of the elected ARMM officials, is the choice
of the Presidents power to appoint for a fixed and specific period as an interim
measure, and as allowed under Section 16, Article VII of the Constitution an
unconstitutional or unreasonable choice for Congress to make?[33]

We admit that synchronization will temporarily disrupt the election process

in a local community, the ARMM, as well as the communitys choice of leaders.
However, we have to keep in mind that the adoption of this measure is a matter
of necessity in order to comply with a mandate that the Constitution itself has set
out for us. Moreover, the implementation of the provisions of RA No. 10153 as an
interim measure is comparable to the interim measures traditionally practiced
when, for instance, the President appoints officials holding elective offices upon
the creation of new local government units.

The grant to the President of the power to appoint OICs in place of the
elective members of the Regional Legislative Assembly is neither novel nor
innovative. The power granted to the President, via RA No. 10153, to appoint
members of the Regional Legislative Assembly is comparable to the power
granted by BP 881 (the Omnibus Election Code) to the President to fill any
vacancy for any cause in the Regional Legislative Assembly (then called
the Sangguniang Pampook).[34]

Executive is not bound by the principle of judicial courtesy

The petitioners in G.R. No. 197280, in their Manifestation and Motion dated
December 21, 2011, question the propriety of the appointment by the President
of Mujiv Hataman as acting Governor and Bainon Karon as acting Vice Governor
of the ARMM. They argue that since our previous decision was based on a close
vote of 8-7, and given the numerous motions for reconsideration filed by the
parties, the President, in recognition of the principle of judicial courtesy, should
have refrained from implementing our decision until we have ruled with finality
on this case.

We find the petitioners reasoning specious.

Firstly, the principle of judicial courtesy is based on the hierarchy of courts and
applies only to lower courts in instances where, even if there is no writ of
preliminary injunction or TRO issued by a higher court, it would be proper for a
lower court to suspend its proceedings for practical and ethical
considerations.[35] In other words, the principle of judicial courtesy applies where
there is a strong probability that the issues before the higher court would be
rendered moot and moribund as a result of the continuation of the proceedings in
the lower court or court of origin.[36] Consequently, this principle cannot be
applied to the President, who represents a co-equal branch of government. To
suggest otherwise would be to disregard the principle of separation of powers, on
which our whole system of government is founded upon.
Secondly, the fact that our previous decision was based on a slim vote of 8-7 does
not, and cannot, have the effect of making our ruling any less effective or binding.
Regardless of how close the voting is, so long as there is concurrence of the
majority of the members of the en bancwho actually took part in the
deliberations of the case,[37] a decision garnering only 8 votes out of 15 members
is still a decision of the Supreme Court en banc and must be respected as such.
The petitioners are, therefore, not in any position to speculate that, based on the
voting, the probability exists that their motion for reconsideration may be
granted.[38]

Similarly, the petitioner in G.R. No. 197282, in his Very Urgent Motion to Issue
Clarificatory Resolution, argues that since motions for reconsideration were filed
by the aggrieved parties challenging our October 18, 2011 decision in the present
case, the TRO we initially issued on September 13, 2011 should remain subsisting
and effective. He further argues that any attempt by the Executive to implement
our October 18, 2011 decision pending resolution of the motions for
reconsideration borders on disrespect if not outright insolence[39] to this Court.

In support of this theory, the petitioner cites Samad v. COMELEC,[40] where

the Court held that while it had already issued a decision lifting the TRO, the
lifting of the TRO is not yet final and executory, and can also be the subject of a
motion for reconsideration. The petitioner also cites the minute resolution issued
by the Court in Tolentino v. Secretary of Finance,[41] where the Court reproached
the Commissioner of the Bureau of Internal Revenue for manifesting its intention
to implement the decision of the Court, noting that the Court had not yet lifted
the TRO previously issued.[42]

We agree with the petitioner that the lifting of a TRO can be included as a subject
of a motion for reconsideration filed to assail our decision. It does not follow,
however, that the TRO remains effective until after we have issued a final and
executory decision, especially considering the clear wording of the dispositive
portion of our October 18, 2011 decision, which states:
 WHEREFORE, premises considered, we DISMISS the consolidated
petitions assailing the validity of RA No. 10153 for lack of merit, and
UPHOLD the constitutionality of this law. We likewise LIFT the
temporary restraining order we issued in our Resolution of September
13, 2011. No costs.[43] (emphases ours)

In this regard, we note an important distinction between Tolentino and the

present case. While it may be true that Tolentino and the present case are similar
in that, in both cases, the petitions assailing the challenged laws were dismissed
by the Court, an examination of the dispositive portion of the decision
in Tolentino reveals that the Court did not categorically lift the TRO. In sharp
contrast, in the present case, we expressly lifted the TRO issued on September 13,
2011. There is, therefore, no legal impediment to prevent the President from
exercising his authority to appoint an acting ARMM Governor and Vice Governor
as specifically provided for in RA No. 10153.

Conclusion

As a final point, we wish to address the bleak picture that the petitioner in
G.R. No. 197282 presents in his motion, that our Decision has virtually given the
President the power and authority to appoint 672,416 OICs in the event that the
elections of barangay and Sangguniang Kabataan officials are postponed or
cancelled.

We find this speculation nothing short of fear-mongering.

This argument fails to take into consideration the unique factual and legal
circumstances which led to the enactment of RA No. 10153. RA No. 10153 was
passed in order to synchronize the ARMM elections with the national and local
elections. In the course of synchronizing the ARMM elections with the national
and local elections, Congress had to grant the President the power to appoint
OICs in the ARMM, in light of the fact that: (a) holdover by the incumbent ARMM
elective officials is legally impermissible; and (b) Congress cannot call for special
elections and shorten the terms of elective local officials for less than three years.

Unlike local officials, as the Constitution does not prescribe a term limit
for barangay and Sangguniang Kabataan officials, there is no legal proscription
which prevents these specific government officials from continuing in a holdover
capacity should some exigency require the postponement
of barangay or Sangguniang Kabataan elections. Clearly, these fears have neither
legal nor factual basis to stand on.

For the foregoing reasons, we deny the petitioners motions for reconsideration.

WHEREFORE, premises considered, we DENY with FINALITY the motions for

reconsideration for lack of merit and UPHOLDthe constitutionality of RA No.
10153.

SO ORDERED.
 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
entity’s 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 LGU’s 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:chan roblesv irtuallawl ib rary

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 Court’s 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 Court’s 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-B’laan 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:cha nro blesvi rtua llawli bra ry

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 Villafuerte’s 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, Villafuerte’s 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 respondent’s 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 agency’s 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 President’s 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 President’s 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 President’s 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 President’s 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 entity’s 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.