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EXECUTIVE ORDER NO.

200 June 18, 1987


PROVIDING FOR THE PUBLICATION OF LAWS EITHER IN THE OFFICIAL GAZETTE OR IN A NEWSPAPER OF GENERAL
CIRCULATION IN THE PHILIPPINES AS A REQUIREMENT FOR THEIR EFFECTIVITY
WHEREAS, Article 2 of the Civil Code partly provides that "laws shall take effect after fifteen days following the
completion of their publication in the Official Gazette, unless it is otherwise provided . . .;"
WHEREAS, the requirement that for laws to be effective only a publication thereof in the Official Gazette will
suffice has entailed some problems, a point recognized by the Supreme Court in Tañada. et al. vs. Tuvera, et al.
(G.R. No. 63915, December 29, 1986) when it observed that "[t]here is much to be said of the view that the
publication need not be made in the Official Gazette, considering its erratic release and limited readership";
WHEREAS, it was likewise observed that "[u]ndoubtedly, newspapers of general circulation could better perform
the function of communicating the laws to the people as such periodicals are more easily available, have a
wider readership, and come out regularly"; and
WHEREAS, in view of the foregoing premises Article 2 of the Civil Code should accordingly be amended so the
laws to be effective must be published either in the Official Gazette or in a newspaper of general circulation in
the country;
NOW, THEREFORE, I, CORAZON C. AQUINO, President of the Philippines, by virtue of the powers vested in me by
the Constitution, do hereby order:
Sec. 1. Laws shall take effect after fifteen days following the completion of their publication either in the Official
Gazette or in a newspaper of general circulation in the Philippines, unless it is otherwise provided.
Sec. 2. Article 2 of Republic Act No. 386, otherwise known as the "Civil Code of the Philippines," and all other
laws inconsistent with this Executive Order are hereby repealed or modified accordingly.
Sec. 3. This Executive Order shall take effect immediately after its publication in the Official Gazette.
Done in the City of Manila, this 18th day of June, in the year of Our Lord, nineteen hundred and eighty-seven.
[G.R. No. L-63915. December 29, 1986.]

LORENZO M. TAÑADA, ABRAHAM F. SARMIENTO, and MOVEMENT OF ATTORNEYS FOR BROTHERHOOD, INTEGRITY
AND NATIONALISM, INC. (MABINI), Petitioners, v. HON. JUAN C. TUVERA. in his capacity as Executive Assistant to
the President, HON. JOAQUIN VENUS, in his capacity as Deputy Executive Assistant to the President,
MELQUIADES P. DE LA CRUZ, ETC., ET AL., Respondents.

SYLLABUS

FERNAN, J., concurring:chanrob1es virtual 1aw library

1. CIVIL LAW; EFFECT AND APPLICATION OF LAWS; ARTICLE 2, CIVIL CODE; PUBLICATION OF LAWS MADE TO
ENSURE CONSTITUTIONAL RIGHT TO DUE PROCESS AND TO INFORMATION. — The categorical statement by this
Court on the need for publication before any law be made effective seeks to prevent abuses on the part if the
lawmakers and, at the time, ensure to the people their constitutional right to due process and to information on
matter of public concern.chanroblesvirtuallawlibrary:red

RESOLUTION

CRUZ, J.:

Due process was invoked by the petitioners in demanding the disclosure or a number of presidential decrees
which they claimed had not been published as required by law. The government argued that while publication
was necessary as a rule, it was not so when it was "otherwise provided," as when the decrees themselves
declared that they were to become effective immediately upon their approval. In the decision of this case on
April 24, 1985, the Court affirmed the necessity for the publication of some of these decrees, declaring in the
dispositive portion as follows:jgc:chanrobles.com.ph

"WHEREFORE, the Court hereby orders respondents to publish to the Official Gazette all unpublished presidential
issuances which are of general application, and unless so published, they shall have no binding force and
effect."cralaw virtua1aw library

The petitioners are now before us again, this time to move for reconsideration/clarification of that decision. 1
Specifically, they ask the following questions:chanrob1es virtual 1aw library

1. What is meant by "law of public nature" or "general applicability" ?

2. Must a distinction be made between laws of general applicability and laws which are not?

3. What is meant by "publication" ?

4. Where is the publication to be made?


5. When is the publication to be made?

Resolving their own doubts, the petitioners suggest that there should be no distinction between laws of general
applicability and those which are not; that publication means complete publication; and that the publication
must be made forthwith in the Official Gazette. 2

In the Comment 3 required of the then Solicitor General, he claimed first that the motion was a request for an
advisory opinion and should therefore be dismissed, and, on the merits, that the clause "unless it is otherwise
provided" in Article 2 of the Civil Code meant that the publication required therein was not always imperative;
that publication, when necessary, did not have to be made in the Official Gazette; and that in any case the
subject decision was concurred in only by three justices and consequently not binding. This elicited a Reply 4
refuting these arguments. Came next the February Revolution and the Court required the new Solicitor General
to file a Rejoinder in view of the supervening events, under Rule 3, Section 18, of the Rules of Court. Responding,
he submitted that issuances intended only for the interval administration of a government agency or for
particular persons did not have to be published; that publication when necessary must be in full and in the
Official Gazette; and that, however, the decision under reconsideration was not binding because it was not
supported by eight members of this Court. 5

The subject of contention is Article 2 of the Civil Code providing as follows:jgc:chanrobles.com.ph

"ART. 2. Laws shall take effect after fifteen days following the completion of their publication in the Official
Gazette, unless it is otherwise provided. This Code shall take effect one year after such publication."cralaw
virtua1aw library

After a careful study of this provision and of the arguments of the parties, both on the original petition and on
the instant motion, we have come to the conclusion, and so hold, that the clause "unless it is otherwise
provided" refers to the date of effectivity and not to the requirement of publication itself, which cannot in any
event be omitted. This clause does not mean that the legislature may make the law effective immediately
upon approval, or on any other date, without its previous publication.chanrobles virtual lawlibrary

Publication is indispensable in every case, but the legislature may in its discretion provide that the usual fifteen-
day period shall be shortened or extended. An example, as pointed out by the present Chief Justice in his
separate concurrence in the original decision, 6 is the Civil Code which did not become effective after fifteen
days from its publication in the Official Gazette but "one year after such publication." The general rule did not
apply because it was "otherwise provided."cralaw virtua1aw library

It is not correct to say that under the disputed clause publication may be dispensed with altogether. The reason
is that such omission would offend due process insofar as it would deny the public knowledge of the laws that
are supposed to govern it. Surely, if the legislature could validly provide that a law shall become effective
immediately upon its approval notwithstanding the lack of publication (or after an unreasonably short period
after publication), it is not unlikely that persons not aware of it would be prejudiced as a result; and they would
be so not because of a failure to comply with it but simply because they did not know of its existence.
Significantly, this is not true only of penal laws as is commonly supposed. One can think of many non-penal
measures, like a law on prescription, which must also be communicated to the persons they may affect before
they can begin to operate.cralawnad

We note at this point the conclusive presumption that every person knows the law, which of course
presupposes that the law has been published if the presumption is to have any legal justification at all. It is no
less important to remember that Section 6 of the Bill of Rights recognizes "the right of the people to information
on matters of public concern," and this certainly applies to, among others, and indeed especially, the
legislative enactments of the government.

The term "laws" should refer to all laws and not only to those of general application, for strictly speaking all laws
relate to the people in general albeit there are some that do not apply to them directly. An example is a law
granting citizenship to a particular individual, like a relative of President Marcos who was decreed instant
naturalization. It surely cannot be said that such a law does not affect the public although it unquestionably
does not apply directly to all the people. The subject of such law is a matter of public interest which any
member of the body politic may question in the political forums or, if he is a proper party, even in the courts of
justice. In fact, a law without any bearing on the public would be invalid as an intrusion of privacy or as class
legislation or as an ultra vires act of the legislature. To be valid, the law must invariably affect the public interest
even if it might be directly applicable only to one individual, or some of the people only, and not to the public
as a whole.

We hold therefore that all statutes, including those of local application and private laws, shall be published as a
condition for their effectivity, which shall begin fifteen days after publication unless a different effectivity date is
fixed by the legislature.chanrobles.com:cralaw:red

Covered by this rule are presidential decrees and executive orders promulgated by the President in the
exercise of legislative powers whenever the same are validly delegated by the legislature or, at present,
directly conferred by the Constitution. Administrative rules and regulations must also be published if their
purpose is to enforce or implement existing law pursuant also to a valid delegation.

Interpretative regulations and those merely internal in nature, that is, regulating only the personnel of the
administrative agency and not the public, need not be published. Neither is publication required of the so-
called letters of instructions issued by administrative superiors concerning the rules or guidelines to be followed
by their subordinates in the performance of their duties.chanroblesvirtuallawlibrary

Accordingly, even the charter of a city must be published notwithstanding that it applies to only a portion of
the national territory and directly affects only the inhabitants of that place. All presidential decrees must be
published, including even, say, those naming a public place after a favored individual or exempting him from
certain prohibitions or requirements. The circulars issued by the Monetary Board must be published if they are
meant not merely to interpret but to "fill in the details" of the Central Bank Act which that body is supposed to
enforce.

However, no publication is required of the instructions issued by, say, the Minister of Social Welfare on the case
studies to be made in petitions for adoption or the rules laid down by the head of a government agency on the
assignments or workload of his personnel or the wearing of office uniforms. Parenthetically, municipal
ordinances are not covered by this rule but by the Local Government Code.

We agree that the publication must be in full or it is no publication at all since its purpose is to inform the public
of the contents of the laws. As correctly pointed out by the petitioners, the mere mention of the number of the
presidential decree, the title of such decree, its whereabouts (e.g., "with Secretary Tuvera"), the supposed date
of effectivity, and in a mere supplement of the Official Gazette cannot satisfy the publication requirement. This
is not even substantial compliance. This was the manner, incidentally, in which the General Appropriations Act
for FY 1975, a presidential decree undeniably of general applicability and interest, was "published" by the
Marcos administration. 7 The evident purpose was to withhold rather than disclose information on this vital law.

Coming now to the original decision, it is true that only four justices were categorically for publication in the
Official Gazette 8 and that six others felt that publication could be made elsewhere as long as the people were
sufficiently informed. 9 One reserved his vote 10 and another merely acknowledged the need for due
publication without indicating where it should be made, 11 It is therefore necessary for the present membership
of this Court to arrive at a clear consensus on this matter and to lay down a binding decision supported by the
necessary vote.

There is much to be said of the view that the publication need not be made in the Official Gazette, considering
its erratic releases and limited readership. Undoubtedly, newspapers of general circulation could better
perform the function of communicating the laws to the people as such periodicals are more easily available,
have a wider readership, and come out regularly. The trouble, though, is that this kind of publication is not the
one required or authorized by existing law. As far as we know, no amendment has been made of Article 2 of
the Civil Code. The Solicitor General has not pointed to such a law, and we have no information that it exists. If
it does, it obviously has not yet been published.

At any rate, this Court is not called upon to rule upon the wisdom of a law or to repeal or modify it if we find it
impractical. That is not our function. That function belongs to the legislature. Our task is merely to interpret and
apply the law as conceived and approved by the political departments of the government in accordance
with the prescribed procedure. Consequently, we have no choice but to pronounce that under Article 2 of the
Civil Code, the publication of laws must be made in the Official Gazette, and not elsewhere, as a requirement
for their effectivity after fifteen days from such publication or after a different period provided by the
legislature.chanrobles law library

We also hold that the publication must be made forthwith, or at least as soon as possible, to give effect to the
law pursuant to the said Article 2. There is that possibility, of course, although not suggested by the parties that
a law could be rendered unenforceable by a mere refusal of the executive, for whatever reason, to cause its
publication as required. This is a matter, however, that we do not need to examine at this time.

Finally, the claim of the former Solicitor General that the instant motion is a request for an advisory opinion is
untenable, to say the least, and deserves no further comment.

The days of the secret laws and the unpublished decrees are over. This is once again 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 our country is to remain democratic, with sovereignty residing in the people and all government authority
emanating from them.

Although they have delegated the power of legislation, they retain the authority to review the work of their
delegates and to ratify or reject it according to their lights, through their freedom of expression and their right of
suffrage. This they cannot do if the acts of the legislature are concealed.

Laws must come out in the open in the clear light of the sun instead of skulking in the shadows with their dark,
deep secrets. Mysterious pronouncements and rumored rules cannot be recognized as binding unless their
existence and contents are confirmed by a valid publication intended to make full disclosure and give proper
notice to the people. The furtive law is like a scabbarded saber that cannot feint, parry or cut unless the naked
blade is drawn.

WHEREFORE, it is hereby declared that all laws as above defined shall immediately upon their approval, or as
soon thereafter as possible, be published in full in the Official Gazette, to become effective only after fifteen
days from their publication, or on another date specified by the legislature, in accordance with Article 2 of the
Civil Code.chanroblesvirtual|awlibrary

SO ORDERED.

Teehankee, C.J., Feria, Yap, Narvasa, Melencio-Herrera, Alampay, Gutierrez, Jr ., and Paras, JJ., concur.
Separate Opinions

FERNAN, J., concurring:chanrob1es virtual 1aw library

While concurring in the Court’s opinion penned by my distinguished colleague, Mr. Justice Isagani A. Cruz, I
would like to add a few observations. Even as a Member of the defunct Batasang Pambansa, I took a strong
stand against the insidious manner by which the previous dispensation had promulgated and made effective
thousands of decrees, executive orders, letters of instructions, etc. Never has the law-making power which
traditionally belongs to the legislature been used and abused to satisfy the whims and caprices of a one-man
legislative mill as it happened in the past regime. Thus, in those days, it was not surprising to witness the sad
spectacle of two presidential decrees bearing the same number, although covering two different subject
matters. In point is the case of two presidential decrees bearing number 1686 issued on March 19, 1980, one
granting Philippine citizenship to Michael M. Keon, the then President’s nephew and the other imposing a tax
on every motor vehicle equipped with air-conditioner. This was further exacerbated by the issuance of PD No.
1686-A also on March 19, 1980 granting Philippine citizenship to basketball players Jeffrey Moore and Dennis
George Still.chanroblesvirtualawlibrary

The categorical statement by this Court on the need for publication before any law may be made effective
seeks to prevent abuses on the part of the lawmakers and, at the same time, ensures to the people their
constitutional right to due process and to information on matters of public concern.

FELICIANO, J., concurring:chanrob1es virtual 1aw library

I agree entirely with the opinion of the court so eloquently written by Mr. Justice Isagani A. Cruz. At the same
time, I wish to add a few statements to reflect my understanding of what the Court is saying.chanrobles virtual
lawlibrary

A statute which by its terms provides for its coming into effect immediately upon approval thereof, is properly
interpreted as coming into effect immediately upon publication thereof in the Official Gazette as provided in
Article 2 of the Civil Code. Such statute, in other words, should not be regarded as purporting literally to come
into effect immediately upon its approval or enactment and without need of publication. For so to interpret
such statute would be to collide with the constitutional obstacle posed by the due process clause. The
enforcement of prescriptions which are both unknown to and unknowable by those subjected to the statute,
has been throughout history a common tool of tyrannical governments. Such application and enforcement
constitutes at bottom a negation of the fundamental principle of legality in the relations between a
government and its people.

At the same time, it is clear that the requirement of publication of a statute in the Official Gazette, as
distinguished from any other medium such as a newspaper of general circulation, is embodied in a statutory
norm and is not a constitutional command. The statutory norm is set out in Article 2 of the Civil Code and is
supported and reinforced by Section 1 of Commonwealth Act No. 638 and Section 35 of the Revised
Administrative Code. A specification of the Official Gazette as the prescribed medium of publication may
therefore be changed. Article 2 of the Civil Code could, without creating a constitutional problem, be
amended by a subsequent statute providing, for instance, for publication either in the Official Gazette or in a
newspaper of general circulation in the country. Until such an amendatory statute is in fact enacted, Article 2
of the Civil Code must be obeyed and publication effected in the Official Gazette and not in any other
medium.chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph
Endnotes:

1. Rollo, pp. 242-250.

2. Ibid., pp. 244-248.

3. Id., pp. 271-280.

4. Id., pp. 288-299.


5. Id., pp. 320-322.

6. 136 SCRA 27, 46.

7. Rollo, p. 246.

8. Justices Venicio Escolin (ponente), Claudio Teehankee, Ameurfina Melencio-Herrera, and Lorenzo Relova.

9. Chief Justice Enrique M. Fernando and Justices Felix V. Makasiar, Vicente Abad-Santos, Efren I. Plana, Serafin
P. Cuevas, and Nestor B. Alampay.

10. Justice Hugo E. Gutierrez, Jr.

11. Justice B. S. de la Fuente.


TAÑADA VS. TUVERA
136 SCRA 27 (April 24, 1985)
FACTS:
Invoking the right of the people to be informed on matters of public concern as well as the principle that laws
to be valid and enforceable must be published in the Official Gazette, petitioners filed for writ of mandamus to
compel respondent public officials to publish and/or cause to publish various presidential decrees, letters of
instructions, general orders, proclamations, executive orders, letters of implementations and administrative
orders.
The Solicitor General, representing the respondents, moved for the dismissal of the case, contending that
petitioners have no legal personality to bring the instant petition.
ISSUE:
Whether or not publication in the Official Gazette is required before any law or statute becomes valid and
enforceable.
HELD:
Art. 2 of the Civil Code does not preclude the requirement of publication in the Official Gazette, even if the law
itself provides for the date of its effectivity. The clear object of this provision is to give the general public
adequate notice of the various laws which are to regulate their actions and conduct as citizens. Without such
notice and publication, there would be no basis for the application of the maxim ignoratia legis nominem
excusat. It would be the height of injustive to punish or otherwise burden a citizen for the transgression of a law
which he had no notice whatsoever, not even a constructive one.
The very first clause of Section 1 of CA 638 reads: there shall be published in the Official Gazette…. The word
“shall” therein imposes upon respondent officials an imperative duty. That duty must be enforced if the
constitutional right of the people to be informed on matter of public concern is to be given substance and
validity.
The publication of presidential issuances of public nature or of general applicability is a requirement of due
process. It is a rule of law that before a person may be bound by law, he must first be officially and specifically
informed of its contents. The Court declared that presidential issuances of general application which have not
been published have no force and effect.

TAÑADA VS. TUVERA


146 SCRA 446 (December 29, 1986)
FACTS:
This is a motion for reconsideration of the decision promulgated on April 24, 1985. Respondent argued that
while publication was necessary as a rule, it was not so when it was “otherwise” as when the decrees
themselves declared that they were to become effective immediately upon their approval.
ISSUES:
1. Whether or not a distinction be made between laws of general applicability and laws which are not
as to their publication;
2. Whether or not a publication shall be made in publications of general circulation.
HELD:
The clause “unless it is otherwise provided” refers to the date of effectivity and not to the requirement of
publication itself, which cannot in any event be omitted. This clause does not mean that the legislature may
make the law effective immediately upon approval, or in any other date, without its previous publication.
“Laws” should refer to all laws and not only to those of general application, for strictly speaking, all laws relate
to the people in general albeit there are some that do not apply to them directly. A law without any bearing
on the public would be invalid as an intrusion of privacy or as class legislation or as an ultra vires act of the
legislature. To be valid, the law must invariably affect the public interest eve if it might be directly applicable
only to one individual, or some of the people only, and not to the public as a whole.
All statutes, including those of local application and private laws, shall be published as a condition for their
effectivity, which shall begin 15 days after publication unless a different effectivity date is fixed by the
legislature.
Publication must be in full or it is no publication at all, since its purpose is to inform the public of the content of
the law.
Article 2 of the Civil Code provides that publication of laws must be made in the Official Gazette, and not
elsewhere, as a requirement for their effectivity. The Supreme Court is not called upon to rule upon the wisdom
of a law or to repeal or modify it if it finds it impractical.
The publication must be made forthwith, or at least as soon as possible.
J. Cruz:
Laws must come out in the open in the clear light of the sun instead of skulking in the shadows with their dark,
deep secrets. Mysterious pronouncements and rumored rules cannot be recognized as binding unless their
existence and contents are confirmed by a valid publication intended to make full disclosure and give proper
notice to the people. The furtive law is like a scabbarded saber that cannot faint, parry or cut unless the naked
blade is drawn.

G.R. No. L-64279 April 30, 1984


ANSELMO L. PESIGAN and MARCELINO L. PESIGAN, petitioners,
vs.
JUDGE DOMINGO MEDINA ANGELES, Regional Trial Court, Caloocan City Branch 129, acting for REGIONAL TRIAL
COURT of Camarines Norte, now presided over by JUDGE NICANOR ORIÑO, Daet Branch 40; DRA. BELLA S.
MIRANDA, ARNULFO V. ZENAROSA, ET AL., respondents.
Quiazon, De Guzman Makalintal and Barot for petitioners.
The Solicitor General for respondents.

AQUINO, J.:ñé+.£ªwph!1
At issue in this case is the enforceability, before publication in the Official Gazette of June 14, 1982, of
Presidential Executive Order No. 626-A dated October 25, 1980, providing for the confiscation and forfeiture by
the government of carabaos transported from one province to another.
Anselmo L. Pesigan and Marcelo L. Pesigan, carabao dealers, transported in an Isuzu ten-wheeler truck in the
evening of April 2, 1982 twenty-six carabaos and a calf from Sipocot, Camarines Sur with Padre Garcia,
Batangas, as the destination.
They were provided with (1) a health certificate from the provincial veterinarian of Camarines Sur, issued under
the Revised Administrative Code and Presidential Decree No. 533, the Anti-Cattle Rustling Law of 1974; (2) a
permit to transport large cattle issued under the authority of the provincial commander; and (3) three
certificates of inspection, one from the Constabulary command attesting that the carabaos were not included
in the list of lost, stolen and questionable animals; one from the LIvestock inspector, Bureau of Animal Industry of
Libmanan, Camarines Sur and one from the mayor of Sipocot.
In spite of the permit to transport and the said four certificates, the carabaos, while passing at Basud,
Camarines Norte, were confiscated by Lieutenant Arnulfo V. Zenarosa, the town's police station commander,
and by Doctor Bella S. Miranda, provincial veterinarian. The confiscation was basis on the aforementioned
Executive Order No. 626-A which provides "that henceforth, no carabao, regardless of age, sex, physical
condition or purpose and no carabeef shall be transported from one province to another. The carabaos or
carabeef transported in violation of this Executive Order as amended shall be subject to confiscation and
forfeiture by the government to be distributed ... to deserving farmers through dispersal as the Director of
Animal Industry may see fit, in the case of carabaos" (78 OG 3144).
Doctor Miranda distributed the carabaos among twenty-five farmers of Basud, and to a farmer from the
Vinzons municipal nursery (Annex 1).
The Pesigans filed against Zenarosa and Doctor Miranda an action for replevin for the recovery of the
carabaos allegedly valued at P70,000 and damages of P92,000. The replevin order could not be executed by
the sheriff. In his order of April 25, 1983 Judge Domingo Medina Angeles, who heard the case at Daet and who
was later transferred to Caloocan City, dismissed the case for lack of cause of action.
The Pesigans appealed to this Court under Rule 45 of the Rules of Court and section 25 of the Interim Rules and
pursuant to Republic Act No. 5440, a 1968 law which superseded Rule 42 of the Rules of Court.
We hold that the said executive order should not be enforced against the Pesigans on April 2, 1982 because, as
already noted, it is a penal regulation published more than two months later in the Official Gazette dated June
14, 1982. It became effective only fifteen days thereafter as provided in article 2 of the Civil Code and section
11 of the Revised Administrative Code.
The word "laws" in article 2 (article 1 of the old Civil Code) includes circulars and regulations which prescribe
penalties. Publication is necessary to apprise the public of the contents of the regulations and make the said
penalties binding on the persons affected thereby. (People vs. Que Po Lay, 94 Phil. 640; Lim Hoa Ting vs. Central
Bank of the Phils., 104 Phil. 573; Balbuna vs. Secretary of Education, 110 Phil. 150.)
The Spanish Supreme Court ruled that "bajo la denominacion generica de leyes, se comprenden tambien los
reglamentos, Reales decretos, Instrucciones, Circulares y Reales ordenes dictadas de conformidad con las
mismas por el Gobierno en uso de su potestad (1 Manresa, Codigo Civil, 7th Ed., p. 146.)
Thus, in the Que Po Lay case, a person, convicted by the trial court of having violated Central Bank Circular No.
20 and sentenced to six months' imprisonment and to pay a fine of P1,000, was acquitted by this Court
because the circular was published in the Official Gazette three months after his conviction. He was not bound
by the circular.
That ruling applies to a violation of Executive Order No. 626-A because its confiscation and forfeiture provision
or sanction makes it a penal statute. Justice and fairness dictate that the public must be informed of that
provision by means of publication in the Gazette before violators of the executive order can be bound thereby.
The cases of Police Commission vs. Bello, L-29960, January 30, 1971, 37 SCRA 230 and Philippine Blooming Mills
vs. Social Security System, 124 Phil. 499, cited by the respondents, do not involve the enforcement of any penal
regulation.
Commonwealth Act No. 638 requires that all Presidential executive orders having general applicability should
be published in the Official Gazette. It provides that "every order or document which shag prescribe a penalty
shall be deemed to have general applicability and legal effect."
Indeed, the practice has always been to publish executive orders in the Gazette. Section 551 of the Revised
Administrative Code provides that even bureau "regulations and orders shall become effective only when
approved by the Department Head and published in the Official Gazette or otherwise publicly promulgated".
(See Commissioner of Civil Service vs. Cruz, 122 Phil. 1015.)
In the instant case, the livestock inspector and the provincial veterinarian of Camarines Norte and the head of
the Public Affairs Office of the Ministry of Agriculture were unaware of Executive Order No. 626-A. The Pesigans
could not have been expected to be cognizant of such an executive order.
It results that they have a cause of action for the recovery of the carabaos. The summary confiscation was not
in order. The recipients of the carabaos should return them to the Pesigans. However, they cannot transport the
carabaos to Batangas because they are now bound by the said executive order. Neither can they recover
damages. Doctor Miranda and Zenarosa acted in good faith in ordering the forfeiture and dispersal of the
carabaos.
WHEREFORE, the trial court's order of dismissal and the confiscation and dispersal of the carabaos are reversed
and set aside. Respondents Miranda and Zenarosa are ordered to restore the carabaos, with the requisite
documents, to the petitioners, who as owners are entitled to possess the same, with the right to dispose of them
in Basud or Sipocot, Camarines Sur. No costs.
SO ORDERED.1äwphï1.ñët
Makasiar, (Chairman), Concepcion, Jr., Guerrero, and Escolin, JJ., concur.
De Castro, J., took no part.

Separate Opinions

ABAD SANTOS, J., concurring:


The Pesigans are entitled to the return of their carabaos or the value of each carabao which is not returned for
any reason. The Pesigans are also entitled to a reasonable rental for each carabao from the twenty six farmers
who used them. The farmers should not enrich themselves at the expense of the Pesigans.

Separate Opinions
ABAD SANTOS, J., concurring:
The Pesigans are entitled to the return of their carabaos or the value of each carabao which is not returned for
any reason. The Pesigans are also entitled to a reasonable rental for each carabao from the twenty six farmers
who used them. The farmers should not enrich themselves at the expense of the Pesigans.
PESIGAN vs. ANGELES, G.R. No. L-64279, April 30, 1984

FACTS:
Petitioners Anselmo and Marcelino Pesigan, carabao dealers, transported in a 10-wheeler truck in April 1982, 26
carabaos and a calf, from Camarines Sur to Batangas. Despite the health certificate, permit to transport, and
certificate of inspection issued to them by the provincial veterinarian, provincial commander and constabulary
command, respectively, while petitioners were negotiating the town of Basud, Camarines Norte, the carabaos
were confiscated by private respondents, Police Station Commander Lt. Zanarosa, and provincial veterinarian
Dr. Miranda. The confiscation was based on Executive Order 626-A which prohibited the transport of carabaos
from one province to another. Pursuant to EO 626-A, Dr Miranda distributed the carabaos to 25 farmers of
Basud. Petitioners filed for recovery of the carabaos and damages, against private respondent Judge Angeles
who heard the case in Daet and later transferred to Caloocan City, and dismissed the case for lack of cause of
action.

ISSUE:
Whether or not EO 626-A be enforced before its publication in the Official Gazette.

HELD:
Said executive order should not be enforced against the Pesigans on April 2, 1982 because, as already noted,
it is a penal regulation published more than two months later in the Official Gazette dated June 14, 1982. It
became effective only fifteen days thereafter as provided in article 2 of the Civil Code and section 11 of the
Revised Administrative Code.

The word "laws" in article 2 (article 1 of the old Civil Code) includes circulars and regulations which prescribe
penalties. Publication is necessary to apprise the public of the contents of the regulations and make the said
penalties binding on the persons affected thereby.

[G.R. No. 104528. January 18, 1996.]

PHILIPPINE NATIONAL BANK, Petitioner, v. OFFICE OF THE PRESIDENT, HOUSING AND LAND USE REGULATORY
BOARD (HLURB), ALFONSO MAGLAYA, ANGELINA MAGLAYA P. REYES, JORGE C. BERNARDINO, CORAZON DE
LEON, VICTORIANO ACAYA, FLORENCIA CULTURA, MARIA CAMPOS, ERNESTO SARMIENTO, SANTIAGO TAMONAN,
APOLONIA TADIAQUE, SIMEON DE LEON, NATIVIDAD J. CRUZ, NATIVIDAD B. LORESCO, FELICIDAD GARCIA, ANA
ANITA TAN, LUCAS SERVILLION, JOSE NARAWAL, represented by their duly authorized Attorney-in-Fact,
CORAZON DE LEON AND SPOUSES LEOPOLDO AND CARMEN
SEBASTIAN, Respondents.chanroblesvirtuallawlibrary

SYLLABUS

1. ADMINISTRATIVE LAW; OFFICE OF THE PRESIDENT- APPEAL THEREFROM MAY BE TAKEN TO THE COURT OF
A~PEALS; SUPREME COURT MAY TAKE COGNIZANCE THEREOF IN THE INTEREST OF SPEEDY JUSTICE. — Under
Revised Administrative Circular No. 1-95, "appeals from judgments or final orders of the . . . Office of the
President . . . may be taken to the Court of Appeals . . ." However, in order to hasten the resolution of this case,
which was deemed submitted for decision three years ago, the Court resolved to make an exception to the
said Circular in the interest of speedy justice.

2. CIVIL LAW; GENERALLY, LAWS HAVE NO RRETROACTIVE EFFECT — Pursuant to Article 4 of the Civil Code,"
(l)aws shall have no retroactive effect, unless the contrary is provided."cralaw virtua1aw library

3. ADMINISTRATIVE LAW; PRESIDENTIAL DECREE NO. 957 (THE SUBDIVISION AND CONDOMINIUM BUYERS’
PROTECTIVE DECREE) WITH RETROACTIVE APPLICATION. — It is obvious and indubitable that P.D. 957 was
intended to cover even those real estate mortgages, like the one at issue here, executed prior to its
enactments, and such intent (as succinctly captured in the preamble) must be given effect if the laudable
purpose of protecting innocent purchasers is to be achieved. While P.D. 957 did not expressly provide for
retroactivity in its entirety, yet the same can be plainly inferred from the unmistakable intent of the law to
protect innocent lot buyers from scheming subdivision developers. As between these small lot buyers and the
gigantic financial institutions which the developers deal with, it is obvious that the law as an instrument of social
justice - must favor the weak. Likewise noteworthy are certain provisions of P.D. 957, which themselves
constitute strong arguments in favor of the retroactivity of P.D. 957 as a whole. These are Sections 20, 21 and 23
thereof, which by their very terms have retroactive effect and will impact upon even those contracts and
transactions entered into prior to P.D. 957’s enactment

4. STATUTORY CONSTRUCTION; INTENT OF THE STATUTE IS THE LAW. — The instent of a statute is the law. If a
statute is valid it is to have effect according to the purpose and intent of the lawmaker. The intent is the vital
part, the essence of the law, and the primary rule of construction is to ascertain and give effect to the intent.
The intention of the legislature in enacting a law is the law itself, and must be enforced when ascertained;
although it may not be consistent with the strict letter of the statute. Courts will not follow the letter of a statute
when it leads away from the true intent and purpose of the legislature and to conclusions inconsistent with the
general purpose of the act. Intent is the spirit which gives life to a legislative enactment. In construing statutes
the proper course is to start out and follow the true intent of the legislature and to adopt that sense which
harmonizes best with the context and promotes in the fullest manner the apparent policy and objects of the
legislature. (Sutherland, in his well-known treatise on Statutory Construction [quoted with approval by this Court
in an old case of consequence, Ongsiako v. Gamboa]).

5. CONSTITUTIONAL LAW; CONSTITUTION, NON-IMPAIRMENT CLAUSE: CAN NOT PREVAIL OVER POLICE POWER OF
THE STATE. — Despite the Impairment clause, a contract valid at the time of its execution may be legally
modified or even completely invalidated by a subsequent law. If the law is a proper exercise of the police
power, it will prevail over the contract. Into each contract are read the provisions of existing law and, always, a
reservation of the police power as long as the agreement deals with a matter affecting the public welfare.
Such a contract, it has been held, suffers a congenital infirmity, and this is its susceptibility to change by the
legislature as a postulate of the legal order.

6. ADMINISTRATIVE LAW PRESIDENTIAL DECREE NO. 957 (THE SUBDIVIION AND CONDOMINIUM BUYERS’ DECREE);
REAL ESTATE MORTGAGE MADE BY THE SUBDIVISION OWNER IN FAVOR OF THE BANK DECLARED NULL AND VOID
WHERE RIGHTS OF SUBDIVISION LOT BUYERS CLASH WITH THE MORTGAGEES BANK’S RIGHT TO FORECLOSE. — The
decision of the Court of Appeals in Breta and Hamor v. Lao, et al, penned by then Court of Appeals Associate
Justice Jose A R. Melo, now a respected member of this Court, is persuasive, the factual circumstances therein
being of great similarity to the antecedent facts of the case at bench. By the foregoing citation, this Court thus
adopts by reference the foregoing as part of this Decision. The real estate mortgage in the above cited case,
although constituted in 1975 and outside the beneficial aegis of P.D. 957,was struck down by the Court of
Appeals which found in favor of subdivision lot buyers when the rights of the latter clashed with the mortgagee
bank’s right to foreclose the property. The Court of Appeals in that case upheld the decision of the trial court
declaring the real estate mortgage as null and void.

7. ID.; ID.; ID.; ID. MORTGAGEE BANK OBLIGED TO ACCEPT PAYMENT OF REAMINING UNPAID AMORTIZATIONS OF
SUBDIVISION LOT BUYERS. — A to the second issue of non-privity, petitioner avers that, in view of the provisions of
Article 1311 of the Civil Code, PNB, being a "total stranger to the land purchase agreement," cannot be made
to take the developer’s place. We disagree. P.D. 957 being applicable, Section 18 of said law obliges petitioner
Bank to accept the payment of the rernaining unpaid amortizations tendered by private respondents. Privity of
contracts as a defense does not apply in this case for the law explicitly grants to the buyer the option to pay
the installment payment for his lot or unit directly to the mortgagee (petitioner), which is required to apply such
payments to reduce the corresponding portion of the mortgage indebtedness secured by the particular lot or
unit being paid for. And, as stated earlier, this is without prejudice to petitioner Bank’s seeking relief against the
subdivision developer.

RESOLUTION

PANGANIBAN, J.:

May a buyer of a property at a foreclosure sale dispossess prior purchasers on installment of individual lots
therein, or compel them to pay again for the lots which they previously bought from the defaulting mortgagor-
subdivision developer, on the theory that P.D. 957, "The Subdivision and Condominium Buyers’ Protective
Decree", is not applicable to the mortgage contract in question, the same having been executed prior to the
enactment of P.D. 957? This is the question confronting the Court in this Petition challenging the Decision dated
March 10, 1992 of the Office of the President of the Philippines in O.P. Case No. 4249, signed by the Executive
Secretary, Franklin M. Drilon, "by authority of the President."cralaw virtua1aw library

Private respondents were buyers on installment of subdivision lots from Marikina Village, Inc. (represented by
spouses Antonio and Susana Astudillo). Notwithstanding the land purchase agreements it executed over said
lots, the subdivision developer mortgaged the lots in favor of the petitioner, Philippine National Bank. Unaware
of this mortgage, private respondents duly complied with their obligations as lot buyers and constructed their
houses on the lots in question.

Subsequently, the subdivision developer defaulted and PNB foreclosed on the mortgage. As highest bidder at
the foreclosure sale, the bank became owner of the lots.chanroblesvirtual|awlibrary

Acting on suits brought by private respondents (which were later consolidated), the HLURB Office of Appeals
Adjudication and Legal Affairs (OAALA) in a decision rendered on October 28, 1988 ruled that PNB — without
prejudice to seeking relief against Marikina Village, Inc. — may collect from private respondents only the
"remaining amortization, in accordance with the land purchase agreements they had previously entered into
with "Marikina Village. Inc., and cannot compel private respondents to pay all over again for the lots they had
already bought from said subdivision developer. On May 2, 1989, the Housing and Land Use Regulatory Board
affirmed this decision. On March 10, 1992, the Office of the President, invoking P.D. 957, likewise concurred with
the HLURB. Hence, the present recourse to this Court.

Under Revised Administrative Circular No. 1-95, "appeals from judgments or final orders of the . . . Office of the
President . . . may be taken to the Court of Appeals . . . ." However, in order to hasten the resolution of this case,
which was deemed submitted for decision three years ago, the Court resolved to make an exception to the
said Circular in the interest of speedy justice.
Petitioner bank raised the following issues:chanroblesvirtuallawlibrary

1. The Office of the President erred in applying P.D. 957 because said law was enacted only on July 12, 1976,
while the subject mortgage was executed on December 18, 1975; and

2. Petitioner Bank is not privy to the contracts between private respondents and mortgagor-subdivision
developer, hence, the Office of the President erred in ordering petitioner Bank to accept private respondents’
remaining amortization and issue the corresponding titles after payment thereof.

Normally, pursuant to Article 4 of the Civil Code." (l)aws shall have no retroactive effect, unless the contrary is
provided." However, it is obvious and indubitable that P.D. 957 was intended to cover even those real estate
mortgages, like the one at issue here, executed prior to its enactment, and such intent (as succinctly captured
in the preamble quoted below) must be given effect if the laudable purpose of protecting innocent purchasers
is to be achieved:chanrobles.com : virtual lawlibrary

"WHEREAS, it is the policy of the State to afford its inhabitants the requirements of decent human settlement
and to provide them with ample opportunities for improving their quality of life;

"WHEREAS, numerous reports reveal that many real estate subdivision owners, developers, operators, and/or
sellers have reneged on their representations and obligations to provide and maintain properly subdivision
roads, drainage, sewerage, water systems, lighting systems, and other similar basic requirements, thus
endangering the health and safety of home and lot buyers;

"WHEREAS, reports of alarming magnitude also show cases of swindling and fraudulent manipulations
perpetrated by unscrupulous subdivision and condominium sellers and operators, such as failure to deliver titles
to the buyers or titles free from liens and encumbrance’ and to pay real estate taxes, and fraudulent sales of
the same subdivision lots to different innocent purchasers for value;" 1 (Emphasis supplied)

While P.D. 957 did not expressly provide for retroactivity in its entirety, yet the same can be plainly inferred from
the unmistakable intent of the law to protect innocent lot buyers from scheming subdivision developers. As
between these small lot buyers and the gigantic financial institutions which the developers deal with, it is
obvious that the law — as an instrument of social justice — must favor the weak. Indeed, the petitioner Bank
had at its disposal vast resources with which it could adequately protect its loan activities, and therefore is
presumed to have conducted the usual "due diligence" checking and ascertained (whether thru ocular
inspection or other modes of investigation) the actual status, condition, utilization and occupancy of the
property offered as collateral. It could not have been unaware that the property had been built on by small lot
buyers. On the other hand, private respondents obviously were powerless to discover the attempt of the land
developer to hypothecate the property being sold to them. It was precisely in order to deal with this kind of
situation that P.D. 957 was enacted, its very essence and intendment being to provide a protective mantle
over helpless citizens who may fall prey to the razzmatazz of what P.D. 957 termed "unscrupulous subdivision
and condominium sellers."cralaw virtua1aw library

The intent of the law, as culled from its preamble and from the situation, circumstances and condition it sought
to remedy, must be enforced. Sutherland, in his well-known treatise on Statutory Construction (quoted with
approval by this Court in an old case of consequence, Ongsiako v. Gamboa 2), says:jgc:chanrobles.com.ph

"The intent of a statute is the law. If a statute is valid it is to have effect according to the purpose and intent of
the lawmaker. The intent is the vital part, the essence of the law, and the primary rule of construction is to
ascertain and give effect to the intent. The intention of the legislature in enacting a law is the law itself, and
must be enforced when ascertained; although it may not be consistent with the strict letter of the statute.
Courts will not follow the letter of a statute when it leads away from the true intent and purpose of the
legislature and to conclusions inconsistent with the general purpose of the act. Intent is the spirit which gives life
to a legislative enactment. In construing statutes, the proper course is to start out and follow the true intent of
the legislature and to adopt that sense which harmonizes best with the context and promotes in the fullest
manner the apparent policy and objects of the legislature." 3chanroblesvirtuallawlibrary

Truly, this Court cannot allow the injustice that will be wrought by a strictly prospective application of the law.
Little people who have toiled for years through blood and tears would be deprived of their homes through no
fault of their own. As the Solicitor General, in his comment, argues:jgc:chanrobles.com.ph

"Verily, if P.D. 957 were to exclude from its coverage the aforecited mortgage contract, the vigorous regulation
which P.D. 957 seeks to impose on unconscientious subdivision sellers will be translated into a feeble exercise of
police power just because the iron hand of the State cannot particularly touch mortgage contracts badged
with the fortunate accident of having been constituted prior to the enactment of P.D. 957. Indeed, it would be
illogical in the extreme if P.D. 957 is to be given full force and effect and yet, the fraudulent practices and
manipulations it seeks to curb in the first instance can nevertheless be liberally perpetrated precisely because
P.D. 957 cannot be applied to existing antecedent mortgage contracts. The legislative intent could not have
conceivably permitted a loophole which all along works to the prejudice of subdivision lot buyers (private
respondents)." 4
Likewise noteworthy are certain provisions of P.D. 957, which themselves constitute strong arguments in favor of
the retroactivity of P.D. 957 as a whole. These are Sections 20, 21 and 23 thereof, which by their very terms have
retroactive effect and will impact upon even those contracts and transactions entered into prior to P.D. 957’s
enactment:chanroblesvirtual|awlibrary

"SEC. 20. Time of Completion. — Every owner or developer shall construct and provide the facilities,
improvements, infrastructures and other forms of development, including water supply and lighting facilities,
which are offered and indicated in the approved subdivision or condominium plans, brochures, prospectus,
printed matters, letters or in any form of advertisement, within one year from the date of the issuance of the
license for the subdivision or condominium project or such other period of time as may be fixed by the
Authority.

"SEC. 1. Sales Prior to Decree. — In cases of subdivision lots or condominium units sold or disposed of prior to the
effectivity of this Decree, it shall be incumbent upon the owner or developer of the subdivision or condominium
project to complete compliance with his or its obligations as provided in the preceding section within two years
from the date of this Decree unless otherwise extended by the Authority or unless an adequate performance
bond is filed in accordance with Section 6 hereof.

"Failure of the owner or developer to comply with the obligations under this and the preceding provisions shall
constitute a violation punishable under Section 38 and 39 of this Decree.chanroblesvirtuallawlibrary

"SEC. 23. Non-Forfeiture of Payments. — No installment payment made by a buyer in a subdivision or


condominium project for the lot or unit he contracted to buy shall be forfeited in favor of the owner or
developer when the buyer, after due notice to the owner or developer, desists from further payment due to the
failure of the owner or developer to develop the subdivision or condominium project according to the
approved plans and within the time limit for complying with the same. Such buyer may, at his option, be
reimbursed the total amount paid including amortization interests but excluding delinquency interests, with
interest thereon at the legal rate." (Emphasis supplied)

As for objections about a possible violation of the impairment clause, we find the following statements of
Justice Isagani Cruz enlightening and pertinent to the case a bench:jgc:chanrobles.com.ph

"Despite the impairment clause, a contract valid at the time of its execution may be legally modified or even
completely invalidated by a subsequent law. If the law is a proper exercise of the police power, it will prevail
over the contract.chanrobles.com : virtual lawlibrary

"Into each contract are read the provisions of existing law and, always, a reservation of the police power as
long as the agreement deals with a matter affecting the public welfare. Such a contract, it has been held,
suffers a congenital infirmity, and this is its susceptibility to change by the legislature as a postulate of the legal
order." 5

This Court ruled along similar lines in Juarez v. Court of Appeals 6:jgc:chanrobles.com.ph

"The petitioner complains that the retroactive application of the law would violate the impairment clause. The
argument does not impress. The impairment clause is now no longer inviolate; in fact, there are many who now
believe it is an anachronism in the present-day society. It was quite useful before in protecting the integrity of
private agreements from government meddling, but that was when such agreements did not affect the
community in general. They were indeed purely private agreements then. Any interference with them at that
time was really an unwarranted intrusion that could properly struck down.

"But things are different now. More and more the interests of the public have become involved in what are
supposed to be still private agreements, which have as a result been removed from the protection of the
impairment clause. These agreements have come within the embrace of the police power, that obtrusive
protector of the public interest. It is a ubiquitous policeman indeed. As long as the contract affects the public
welfare one way or another so as to require the interference of the State, then must the police power be
asserted, and prevail, over the impairment clause."cralaw virtua1aw library

The decision of the Court of Appeals in Breta and Hamor v. Lao, Et. Al. 7, penned by then Court of Appeals
Associate Justice Jose A. R. Melo, now a respected member of this Court is persuasive, the factual
circumstances therein being of great similarity to the antecedent facts of the case at
bench:jgc:chanrobles.com.ph

"Protection must be afforded small homeowners who toil and save if only to purchase on installment a tiny
home lot they can call their own. The consuming dream of every Filipino is to be able to buy a lot, no matter
how small, so that he may somehow build a house. It has, however, been seen of late that these honest, hard-
living individuals are taken advantage of, with the delivery of titles delayed, the subdivision facilities, including
the most essential such as water installations not completed, or worse yet, as in the instant case, after almost
completing the payments for the property and after constructing a house, the buyer is suddenly confronted by
the stark reality, contrived or otherwise, in which another person would now appear to be
owner.chanroblesvirtuallawlibrary
x x x

"We cannot over emphasize the fact that the BANK cannot barefacedly argue that simply because the title or
titles offered as security were clean of any encumbrance or lien, that it was thereby relieved of thing any other
step to verify the over-reaching implications should the subdivision be auctioned on foreclosure. The BANK
could not have closed its eyes that it was dealing over a subdivision where there were already houses
constructed. Did it not enter the mind of the responsible officers of the BANK that there may even be
subdivision residents who have almost completed their installment payments?" (Id., pp. 7 & 9)

By the foregoing citation, this Court thus adopts by reference the foregoing as part of this Decision.

The real estate mortgage in the above cited case although constituted in 1975 and outside the beneficial
aegis of P.D. 957, was struck down by the Court of Appeals which found in favor of subdivision lot buyers when
the rights of the latter clashed with the mortgagee bank’s right to foreclose the property. The Court of Appeals
in that case upheld the decision of the trial court declaring the real estate mortgage as null and
void.chanroblesvirtual|awlibrary

As to the second issue of non-privity, petitioner avers that, in view of the provisions of Article 1311 of the Civil
Code, PNB, being a "total stranger to the land purchase agreement," cannot be made to take the developer’s
place.

We disagree. P.D. 957 being applicable, Section 18 of said law obliges petitioner Bank to accept the payment
of the remaining unpaid amortization tendered by private respondents.

"SEC. 18. Mortgages. — No mortgage on any unit or lot shall be made by the owner or developer without prior
written approval of the Authority. Such approval shall not be granted unless it is shown that the proceeds of the
mortgage loan shall be used for the development of the condominium or subdivision project and effective
measures have been provided to ensure such utilization. The loan value of each lot or unit covered by the
mortgage shall be determined and the buyer thereof, if any, shall be notified before the release of the loan.
The buyer may, at his option, pay his installment for the lot or unit directly to the mortgagee who shall apply the
payments to the corresponding mortgage indebtedness secured by the particular lot or unit being paid for,
with a view to enabling said buyer to obtain title over the lot or unit promptly after full payment thereof ."
(Emphasis supplied)chanroblesvirtuallawlibrary

Privity of contracts as a defense does not apply in this case for the law explicitly grants to the buyer the option
to pay the installment payment for his lot or unit directly to the mortgagee (petitioner, which is required to
apply such payments to reduce the corresponding portion of the mortgage indebtedness secured by the
particular lot or unit being paid for. And, as stated earlier, this is without prejudice to petitioner Bank’s seeking
relief against the subdivision developer.

Finally, before closing this Resolution, we enjoin petitioner Bank to focus not only on the strictly legal issues
involved in this case but also to take another look at the larger issues including social justice and the protection
of human rights as enshrined in the Constitution, firstly, because legal issues are raised and decided not in a
vacuum but within the context of existing social, economic and political conditions, law being merely a brick in
the up-building of the social edifice; and secondly, Petitioner, being THE state bank, is for all intents and
purposes an instrument for the implementation of state policies so cherished in our fundamental law. These
consideration are obviously far more weighty than the winning of any particular suit or the acquisition of any
specific property. Thus, as the country strives to move ahead towards economic self-sufficiency and to achieve
dreams of "NIC-blood" and social well-being for the majority of our countrymen, we hold that petitioner Bank,
the premier bank in the country, which has in recent years made record earnings and acquired an enable
international stature, with branches and subsidiaries in key financial centers around the world, should be
equally as happy with the disposition of this case as the private respondents, who were almost deprived and
dispossessed of their very homes purchased through their hard work and with their meager savings.

WHEREFORE, in view of the foregoing considerations, the petition is hereby DENIED, petitioner having failed to
show any REVERSIBLE ERROR or GRAVE ABUSE OF DISCRETION in the assailed decision. No costs.chanrobles.com
: virtual lawlibrary

SO ORDERED.

Narvasa, C.J., Davide, Jr., Melo and Francisco, JJ., concur.


Endnotes:

1. Preamble, Presidential Decree No. 957.

2. 86 Phil. 50 (April 8, 1950).


3. Vol. II, Sutherland, Statutory Construction, pp. 693-95.

4. Comment filed by the Solicitor General on behalf of the public respondent, p. 9; Rollo, p. 78.

5. J. Isagani A. Cruz, Constitutional Law, 1991 edition, p. 242, citing Home Building and Loan Assn. v. Blaisdell,
290 U.S. 398.

6. 214 SCRA 475, 480 (October 7, 1992).

7. CA-C.R. No. 587280-R, promulgated on November 11, 1981.

G.R. No. 79269 June 5, 1991


PEOPLE OF THE PHILIPPINES, petitioner,
vs.
HON. PROCORO J. DONATO, in his official capacity as Presiding Judge, Regional Trial Court, Branch XII, Manila;
RODOLFO C. SALAS, alias Commander Bilog, respondents.
The Solicitor General for petitioner.
Jose Suarez, Romeo Capulong, Efren Mercado and Movement of Attorneys for Brotherhood, Integrity,
Nationalism, Inc. (MABINI) for Rodolfo Salas.

DAVIDE, JR., J.:


The People of the Philippines, through the Chief State Prosecutor of the Department of Justice, the City Fiscal of
Manila and the Judge Advocate General, filed the instant petition for certiorari and prohibition, with a prayer
for restraining order/preliminary injunction, to set aside the order of respondent Judge dated July 7, 1987
granting bail to the accused Rodolfo Salas alias "Commander Bilog" in Criminal Case No. 86-48926 for
Rebellion,1 and the subsequent Order dated July 30, 1987 granting the motion for reconsideration of 16 July
1987 by increasing the bail bond from P30,000.00 to P50,000.00 but denying petitioner's supplemental motion for
reconsideration of July 17, 1987 which asked the court to allow petitioner to present evidence in support of its
prayer for a reconsideration of the order of 7 July 1987.
The pivotal issues presented before Us are whether the right to bail may, under certain circumstances, be
denied to a person who is charged with an otherwise bailable offense, and whether such right may be waived.
The following are the antecedents of this petition:
In the original Information2 filed on 2 October 1986 in Criminal Case No. 86-48926 of the Regional Trial Court of
Manila, later amended in an Amended Information 3 which was filed on 24 October 1986, private respondent
Rodolfo Salas, alias "Commander Bilog", and his co-accused were charged for the crime of rebellion under
Article 134, in relation to Article 135, of the Revised Penal Code allegedly committed as follows:
That in or about 1968 and for some time before said year and continuously thereafter until the present
time, in the City of Manila and elsewhere in the Philippines, the Communist Party of the Philippines, its
military arm, the New People's Army, its mass infiltration network, the National Democratic Front with its
other subordinate organizations and fronts, have, under the direction and control of said organizations'
leaders, among whom are the aforenamed accused, and with the aid, participation or support of
members and followers whose whereabouts and identities are still unknown, risen publicly and taken
arms throughout the country against the Government of the Republic of the Philippines for the purpose
of overthrowing the present Government, the seat of which is in the City of Manila, or of removing from
the allegiance to that government and its laws, the country's territory or part of it;
That from 1970 to the present, the above-named accused in their capacities as leaders of the
aforenamed organizations, in conspiracy with, and in support of the cause of, the organizations
aforementioned, engaged themselves in war against the forces of the government, destroying property
or committing serious violence, and other acts in the pursuit of their unlawful purpose, such as . . .
(then follows the enumeration of specific acts committed before and after February 1986).
At the time the Information was filed the private respondent and his co-accused were in military custody
following their arrest on 29 September 1986 at the Philippine General Hospital, Taft Ave., Manila; he had earlier
escaped from military detention and a cash reward of P250,000.00 was offered for his
capture.4
A day after the filing of the original information, or on 3 October 1986, a petition for habeas corpus for private
respondent and his co-accused was filed with this Court5 which, as shall hereafter be discussed in detail, was
dismissed in Our resolution of 16 October 1986 on the basis of the agreement of the parties under which herein
private respondent "will remain in legal custody and will face trial before the court having custody over his
person" and the warrants for the arrest of his co-accused are deemed recalled and they shall be immediately
released but shall submit themselves to the court having jurisdiction over their person.
On November 7, 1986 , private respondent filed with the court below a Motion to Quash the Information
alleging that: (a) the facts alleged do not constitute an offense; (b) the Court has no jurisdiction over the
offense charged; (c) the Court has no jurisdiction over the persons of the defendants; and (d) the criminal
action or liability has been extinguished,6 to which petitioner filed an Opposition7 citing, among other grounds,
the fact that in the Joint Manifestation and Motion dated October 14, 1986, in G.R. No. 76009, private
respondent categorically conceded that:
xxx xxx xxx
Par. 2 (B) — Petitioner Rodolfo Salas will remain in legal custody and face trial before the court having
custody over his person.
In his Order of March 6, 1987,8 respondent Judge denied the motion to quash.
Instead of asking for a reconsideration of said Order, private respondent filed on 9 May 1987 a petition for
bail,9which herein petitioner opposed in an Opposition filed on 27 May 1987 10 on the ground that since rebellion
became a capital offense under the provisions of P.D. Nos. 1996, 942 and 1834, which amended Article 135 of
the Revised Penal Code, by imposing the penalty of reclusion perpetua to death on those who promote,
maintain, or head a rebellion the accused is no longer entitled to bail as evidence of his guilt is strong.
On 5 June 1987 the President issued Executive Order No. 187 repealing, among others, P.D. Nos. 1996, 942 and
1834 and restoring to full force and effect Article 135 of the Revised Penal Code as it existed before the
amendatory decrees. Thus, the original penalty for rebellion, prision mayor and a fine not to exceed P20,000.00,
was restored.
Executive Order No. 187 was published in the Official Gazette in its June 15, 1987 issue (Vol. 83, No. 24) which
was officially released for circulation on June 26, 1987.
In his Order of 7 July 198711 respondent Judge, taking into consideration Executive Order No. 187, granted
private respondent's petition for bail, fixed the bail bond at P30,000.00 and imposed upon private respondent
the additional condition that he shall report to the court once every two (2) months within the first ten (10) days
of every period thereof. In granting the petition respondent Judge stated:
. . . There is no more debate that with the effectivity of Executive Order No. 187, the offense of rebellion,
for which accused Rodolfo Salas is herein charged, is now punishable with the penalty of prision
mayor and a fine not exceeding P20,000.00, which makes it now bailable pursuant to Section 13, Article
III, 1986 Constitution and Section 3, Rule 114, 1985 Rules of Criminal Procedure. Unlike the old rule, bail is
now a matter of right in non-capital offenses before final judgment. This is very evident upon a reading
of Section 3, Rule 114, aforementioned, in relation to Section 21, same rule. In view, therefore, of the
present circumstances in this case, said accused-applicant is now entitled to bail as a matter of right
inasmuch as the crime of rebellion ceased to be a capital offense.
As to the contention of herein petitioner that it would be dangerous to grant bail to private respondent
considering his stature in the CPP-NPA hierarchy, whose ultimate and overriding goal is to wipe out all vestiges
of our democracy and to replace it with their ideology, and that his release would allow his return to his
organization to direct its armed struggle to topple the government before whose courts he invokes his
constitutional right to bail, respondent Judge replied:
True, there now appears a clash between the accused's constitutional right to bail in a non-capital
offense, which right is guaranteed in the Bill of Rights and, to quote again the prosecution, "the
existence of the government that bestows the right, the paramount interest of the state." Suffice to state
that the Bill of Rights, one of which is the right to bail, is a "declaration of the rights of the individual, civil,
political and social and economic, guaranteed by the Constitution against impairment or intrusion by
any form of governmental action. Emphasis is placed on the dignity of man and the worth of individual.
There is recognition of certain inherent and inalienable rights of the individual, which the government is
prohibited from violating" (Quisumbing-Fernando, Philippine Constitutional Law, 1984 Edition, p. 77). To
this Court, in case of such conflict as now pictured by the prosecution, the same should be resolved in
favor of the individual who, in the eyes of the law, is alone in the assertion of his rights under the Bill of
Rights as against the State. Anyway, the government is that powerful and strong, having the resources,
manpower and the wherewithals to fight those "who oppose, threathen (sic) and destroy a just and
orderly society and its existing civil and political institutions." The prosecution's fear may or may not be
founded that the accused may later on jump bail and rejoin his comrades in the field to sow further
disorders and anarchy against the duly constituted authorities. But, then, such a fear can not be a
reason to deny him bail. For the law is very explicit that when it comes to bailable offenses an accused
is entitled as a matter of light to bail. Dura est lex sed lex.
In a motion to reconsider12 the above order filed on 16 July 1987, petitioner asked the court to increase the bail
from P30,000.00 to P100,000.00 alleging therein that per Department of Justice Circular No. 10 dated 3 July
1987, the bail for the, provisional release of an accused should be in an amount computed at P10,000.00 per
year of imprisonment based on the medium penalty imposable for the offense and explaining that it is
recommending P100,000.00 because the private respondent "had in the past escaped from the custody of the
military authorities and the offense for which he is charged is not an ordinary crime, like murder, homicide or
robbery, where after the commission, the perpetrator has achieved his end" and that "the rebellious acts are
not consummated until the well-organized plan to overthrow the government through armed struggle and
replace it with an alien system based on a foreign ideology is attained."
On 17 July 1987, petitioner filed a supplemental motion for reconsideration 13 indirectly asking the court to deny
bail to the private respondent and to allow it to present evidence in support thereof considering the "inevitable
probability that the accused will not comply with this main condition of his bail –– to appear in court for trial," a
conclusion it claims to be buttressed "by the following facts which are widely known by the People of the
Philippines and which this Honorable Court may have judicial notice of:
1. The accused has evaded the authorities for thirteen years and was an escapee from detention when
arrested;
2. He was not arrested at his residence as he had no known address;
3. He was using the false name "Manuel Mercado Castro" at the time of his arrest and presented a
Driver's License to substantiate his false identity;
4. The address he gave "Panamitan, Kawit, Cavite," turned out to be also a false address;
5. He and his companions were on board a private vehicle with a declared owner whose identity and
address were also found to be false;
6. Pursuant to Ministry Order No. 1-A dated 11 January 1982 , a reward of P250,000.00 was offered and
paid for his arrest,
which "clearly indicate that the accused does not entertain the slightest intention to appear in court for trial, if
released." Petitioner further argues that the accused, who is the Chairman of the Communist Party of the
Philippines and head of its military arm, the NPA, together with his followers, are now engaged in an open
warfare and rebellion against this government and threatens the existence of this very Court from which he
now seeks provisional release," and that while he is entitled to bail as a matter of right in view of Executive
Order No. 187 which restored the original penalty for rebellion under Article 135 of the Revised Penal Code, yet,
when the interest of the State conflicts with that of an individual, that of the former prevails for "the right of the
State of self-preservation is paramount to any of the rights of an individual enshrined in the Bill of Rights of the
Constitution." Petitioner further invokes precedents in the United States of America holding "that there is no
absolute constitutional barrier to detention of potentially dangerous resident aliens pending deportation
proceedings,14 and that an arrestee may be incarcerated until trial as he presents a risk of flight; 15 and
sustaining a detention prior to trial of arrestee charged with serious felonies who are found after an adversary
hearing to pose threat to the safety of individuals and to the community which no condition of release can
dispel.16
On 30 July 1987 respondent Judge handed down the Order17 adverted to in the introductory portion of this
decision the dispositive portion of which reads:
WHEREFORE, in the light of the foregoing considerations, the Court finds the "supplemental" motion for
reconsideration to be without merit and hereby denies it but finds the first motion for reconsideration to
be meritorious only insofar as the amount of bail is concerned and hereby reconsiders its Order of July 7,
1987 only to increase the amount of bail from P30,000.00 to P50,000.00, subject to the approval of this
Court, and with the additional condition that accused Rodolfo Salas shall report to the court once
every two (2) months within the first ten (10) days of every period thereof (Almendras vs. Villaluz, et al., L-
31665, August 6, 1975, 66 SCRA 58).
In denying the supplemental motion for reconsideration the respondent Judge took into account the "sudden
turn-about" on the part of the petitioner in that a day earlier it filed a motion for reconsideration wherein it
conceded the right of the private respondent to bail but merely asked to increase the amount of bail;
observed that it is only a reiteration of arguments in its opposition to the petition for bail of 25 May 1987;
asserted that the American precedents are not applicable since the cases involved deportation of aliens and,
moreover, the U.S. Federal Constitution does not contain a proviso on the right of an accused to bail in bailable
offenses, but only an injunction against excessive bail; and quoted the concurring opinion of the late Justice
Pedro Tuason in the cases of Nava, et al. vs. Gatmaitan, L-4853, Hernandez vs. Montesa, L-4964 and Angeles vs.
Abaya, L-5108, October 11, 1951, 90 Phil, 172.
Unable to agree with said Order, petitioner commenced this petition submitting therein the following issues:
THE HONORABLE RESPONDENT JUDGE PROCORO J. DONATO ACTED WITH GRAVE ABUSE OF DISCRETION
AND IN EXCESS OF HIS JURISDICTION, AND IN TOTAL DISREGARD OF THE PREVAILING REALITIES, WHEN HE
DENIED PETITIONER'S SUPPLEMENTAL MOTION FOR RECONSIDERATION WITH PRAYER TO BE GIVEN THE
OPPORTUNITY TO ADDUCE EVIDENCE IN SUPPORT OF ITS OPPOSITION TO THE GRANT OF BAIL TO THE
RESPONDENT RODOLFO SALAS.
THE HONORABLE RESPONDENT JUDGE PROCORO J. DONATO ACTED WITH GRAVE ABUSE OF DISCRETION
AND IN EXCESS OF HIS JURISDICTION WHEN HE GRANTED BAIL TO THE RESPONDENT RODOLFO SALAS.
in support of which petitioner argues that private respondent is estopped from invoking his right to bail, having
expressly waived it in G.R. No. 76009 when he agreed to "remain in legal custody and face trial before the court
having custody of his person" in consideration of the recall of the warrant of arrest for his co-petitioners Josefina
Cruz and Jose Concepcion; and the right to bail, even in non-capital offenses, is not absolute when there
is prima facie evidence that the accused is a serious threat to the very existence of the State, in which case the
prosecution must be allowed to present evidence for the denial of bail. Consequently, respondent Judge
acted with grave abuse of discretion when he did not allow petitioner to present all the evidence it may desire
to support its prayer for the denial of bail and when he declared that the State has forfeited its right to do so
since during all the time that the petition for bail was pending, it never manifested, much less hinted, its
intention to adduce such evidence. And that even if release on bail may be allowed, respondent judge, in
fixing the amount of bail at P50,000.00 (originally P30,000.00 only), failed to take into account the lengthy
record of private respondents' criminal background, the gravity of the pending charge, and the likelihood of
flight.18
In Our resolution of 11 August 198719 We required the respondents to comment on the petition and issued a
Temporary Restraining Order ordering respondent Judge to cease and desist from implementing his order of 30
July 1987 granting bail to private respondent in the amount of P50,000.00.
In his Comment filed on 27 August 1987,20 private respondent asks for the outright dismissal of the petition and
immediate lifting of the temporary restraining order on the following grounds:
I
RESPONDENT SALAS NEVER WAIVED HIS RIGHT TO BAIL; NEITHER IS HE ESTOPPED FROM ASSERTING SAID
RIGHT. ON THE CONTRARY IT IS PETITIONER WHO IS ESTOPPED FROM RAISING THE SAID ISSUE FOR THE FIRST
TIME ON APPEAL.
II
RESPONDENT SALAS ENJOYS NOT ONLY THE CONSTITUTIONAL RIGHT TO BE PRESUMED INNOCENT BUT
ALSO THE RIGHT TO BAIL.
III
RESPONDENT SALAS IS NOT CHARGED WITH A CAPITAL OFFENSE (RECLUSION PERPETUA), HENCE HE HAS
THE RIGHT TO BAIL AS MANDATED BY THE CONSTITUTION.
IV
THE ORDER OF JULY 30, 1987 DENYING PETITIONER OPPORTUNITY TO PRESENT EVIDENCE IS CORRECT.
PETITIONER'S ALLEGED RIGHT TO PRESENT EVIDENCE IS NON-EXISTENT AND/OR HAD BEEN WAIVED.
V
THE ISSUANCE OF A TEMPORARY RESTRAINING ORDER IN THIS CASE VIOLATES NOT ONLY RESPONDENT
SALAS' RIGHT TO BAIL BUT ALSO HIS OTHER CONSTITUTIONAL RIGHT TO DUE PROCESS.
We required the petitioner to reply to the comment of private respondent.21 The reply was filed on 18
September 1987.22
In Our resolution of 15 October 198723 We gave due course to the petition and required the parties to file
simultaneously their memoranda within twenty days from notice.
In their respective manifestations and motions dated 5 November24 and 23 November 198725 petitioner and
private respondents asked to be excused from filing their Memoranda and that the petition and reply be
considered as the Memorandum for petitioner and the Comment as the Memorandum for private respondent,
which We granted in Our resolution of 19 November 198726 and 1 December 1987,27 respectively.
In Our resolution of 14 September 1989 We required the Solicitor General to express his stand on the issues raised
in this petitions,28 which he complied with by filing his Manifestation on 30 May 199029 wherein he manifests that
he supports the petition and submits that the Order of respondent Judge of July 7, July 17 and July 30, 1987
should be annulled and set aside asserting that private respondent had waived the light to bail in view of the
agreement in G.R. No. 76009; that granting bail to him is accepting wide-eyed his undertaking which he is sure
to break; in determining bail, the primary consideration is to insure the attendance of the accused at the trial of
the case against him which would be frustrated by the "almost certainty that respondent Salas will lump bail of
whatever amount"; and application of the guidelines provided for in Section 10 of Rule 114, 1985 Rules on
Criminal Procedure on the amount of bail dictates denial of bail to private respondent. The Solicitor General
likewise maintains that the right of the petitioner to hearing on the application of private respondent for bail
cannot be denied by respondent Judge.
And now on the issues presented in this case.
I.
Unquestionably, at the time the original and the amended Informations for rebellion and the application for
bail were filed before the court below the penalty imposable for the offense for which the private respondent
was charged was reclusion perpetua to death. During the pendency of the application for bail Executive
Order No. 187 was issued by the President, by virtue of which the penalty for rebellion as originally provided for
in Article 135 of the Revised Penal Code was restored. The restored law was the governing law at the time the
respondent court resolved the petition for bail.
We agree with the respondent court that bail cannot be denied to the private respondent for he is charged
with the crime of rebellion as defined in Article 134 of the Revised Penal Code to which is attached the penalty
of prision mayor and a fine not exceeding P20,000.00.30 It is, therefore, a bailable offense under Section 13 of
Article III of the 1987 Constitution which provides thus:
Sec. 13. All persons, except those charged with offenses punishable by reclusion perpetua when
evidence of guilt is strong, shall, before conviction, be bailable by sufficient sureties, or be released on
recognizance as may be prescribed by law. The right to bail shall not be impaired even when the
privilege of the writ of habeas corpus is suspended. Excessive bail shall not be required.
Section 3, Rule 114 of the Rules of Court, as amended, also provides:
Bail, a matter of right: exception. — All persons in custody shall, before final conviction, be entitled to
bail as a matter of right, except those charged with a capital offense or an offense which, under the
law at the time of its commission and at the time of the application for bail, is punishable by reclusion
perpetua, when evidence of guilt is strong.
Therefore, before conviction bail is either a matter of right or of discretion. It is a matter of right when the
offense charged is punishable by any penalty lower than reclusion perpetua.31 To that extent the right is
absolute.32
And so, in a similar case for rebellion, People vs. Hernandez, et al., 99 Phil. 515, despite the fact that the
accused was already convicted, although erroneously, by the trial court for the complex crime of rebellion with
multiple murders, arsons and robberies, and sentenced to life imprisonment, We granted bail in the amount of
P30,000.00 during the pendency of his appeal from such conviction. To the vigorous stand of the People that
We must deny bail to the accused because the security of the State so requires, and because the judgment of
conviction appealed from indicates that the evidence of guilt of Hernandez is strong, We held:
. . . Furthermore, individual freedom is too basic, too transcendental and vital in a republican state, like
ours, to be derived upon mere general principles and abstract consideration of public safety. Indeed,
the preservation of liberty is such a major preoccupation of our political system that, not satisfied with
guaranteeing its enjoyment in the very first paragraph of section (1) of the Bill of Rights, the framers of
our Constitution devoted paragraphs (3), (4), (5), (6), (7), (8), (11), (12), (13), (14), (15), (16), (17), (18),
and (21) of said section (1) to the protection of several aspects of freedom.
The 1987 Constitution strengthens further the right to bail by explicitly providing that it shall not be impaired
even when the privilege of the writ of habeas corpus is suspended. This overturns the Court's ruling in Garcia-
Padilla vs. Enrile, et al., supra., to wit:
The suspension of the privilege of the writ of habeas corpus must, indeed, carry with it the suspension of
the right to bail, if the government's campaign to suppress the rebellion is to be enhanced and
rendered effective. If the right to bail may be demanded during the continuance of the rebellion, and
those arrested, captured and detained in the course thereof will be released, they would, without the
least doubt, rejoin their comrades in the field thereby jeopardizing the success of government efforts to
bring to an end the invasion, rebellion or insurrection.
Upon the other hand, if the offense charged is punishable by reclusion perpetua bail becomes a matter of
discretion. It shall be denied if the evidence of guilt is strong. The court's discretion is limited to determining
whether or not evidence of guilt is strong.33 But once it is determined that the evidence of guilt is not strong, bail
also becomes a matter of right. In Teehankee vs. Director of Prisons, supra., We held:
The provision on bail in our Constitution is patterned after similar provisions contained in the Constitution
of the United States and that of many states of the Union. And it is said that:
The Constitution of the United States and the constitution of the many states provide that all
persons shall be bailable by sufficient sureties, except for capital offenses, where the proof is
evident or the presumption of guilt is great, and, under such provisions, bail is a matter of right
which no court or judge can properly refuse, in all cases not embraced in the exceptions. Under
such provisions bail is a matter of right even in cases of capital offenses, unless the proof of guilt
is evident or the presumption thereof is great!34
Accordingly, the prosecution does not have the right to present evidence for the denial of bail in the
instances where bail is a matter of right. However, in the cases where the grant of bail is discretionary,
due process requires that the prosecution must be given an opportunity to present, within a reasonable
time, all the evidence that it may desire to introduce before the court should resolve the motion for
bail.35
We agree, however, with petitioner that it was error for the respondent court to fix the bond at
P30,000.00, then later at P50,000.00 without hearing the prosecution. The guidelines for the fixing of the
amount of bail provided for in Section 10 of Rule 114 of the Rules of Court are not matters left entirely to
the discretion of the court. As We stated in People vs. Dacudao, et al., 170 SCRA, 489, 495:
Certain guidelines in the fixing of a bailbond call for the presentation of evidence and
reasonable opportunity for the prosecution to refute it. Among them are the nature and
circumstances of the crime, character and reputation of the accused, the weight of the
evidence against him, the probability of the accused appearing at the trial, whether or not the
accused is a fugitive from justice, and whether or not the accused is under bond in other case. .
..
In the instant case petitioner has sufficiently made out allegations which necessitate a grant of an
opportunity to be heard for the purpose of determining the amount of bail, but not for the denial
thereof because aforesaid Section 10 of Rule 114 does not authorize any court to deny bail.
II.
It must, however, be stressed that under the present state of the law, rebellion is no longer punishable
byprision mayor and fine not exceeding P20,000.00. Republic Act No. 6968 approved on 24 October
1990 and which took effect after publication in at least two newspapers of general circulation,
amended, among others, Article 135 of the Revised Penal Code by increasing the penalty for rebellion
such that, as amended, it now reads:
Article 135. Penalty for rebellion, insurrection or coup d'etat. ––– Any person who promotes,
maintains, or heads a rebellion or insurrection shall suffer the penalty of reclusion perpetua.
Any person merely participating or executing the commands of others in a rebellion or
insurrection shall suffer the penalty of reclusion perpetua.
xxx xxx xxx
This amendatory law cannot apply to the private respondent for acts allegedly committed prior to its
effectivity. It is not favorable to him. "Penal laws shall have a retroactive effect insofar as they favor the
person guilty of a felony, who is not a habitual criminal, as this term is defined in Rule 5 of Article 62 of
this Code, although at the time of the publication of such laws a final sentence has been pronounced
and the convict is serving the same.36
III.
We agree with Petitioner that private respondent has, however, waived his right to bail in G.R. No.
76009.
On 3 October 1986, or the day following the filing of the original information in Criminal Case No. 86-
48926 with the trial court, a petition for habeas corpus for herein private respondent, and his co-
accused Josefina Cruz and Jose Concepcion, was filed with this Court by Lucia Cruz, Aida Concepcion
Paniza and Beatriz Salas against Juan Ponce Enrile, Gen. Fidel Ramos, Brig. Gen. Renato de Villa, Brig.
Gen. Ramon Montaño, and Col. Saldajeno praying, among others, that the petition be given due
course and a writ of habeas corpusbe issued requiring respondents to produce the bodies of herein
private respondent and his co-accused before the Court and explain by what authority they arrested
and detained them. The following proceedings took place thereafter in said case:
1. In a resolution of 7 October 1986 We issued a writ of habeas corpus, required respondents to make a
return of the writ on or before the close of office hours on 13 October and set the petition for hearing on
14 October 1986 at 10:00 o'clock in the morning.
2. On 13 October 1986 respondents, through the Office of the Solicitor General, filed a Return To The Writ
of Habeas Corpus alleging therein that private respondent and Josefina Cruz alias "Mrs. Mercado", and
Jose Milo Concepcion alias "Eugene Zamora" were apprehended by the military on September 29, 1986
in the evening at the Philippine General Hospital Compound at Taft Ave., Mangga being leaders or
members of the Communist Party of the Philippines, New People's Army and National Democratic Front,
organizations dedicated to the overthrow of the Government through violent means, and having
actually committed acts of rebellion under Article 134 of the Revised Penal Code, as amended. After
their arrest they were forthwith charged with rebellion before Branch XII of the Regional Trial Court,
National Capital Region in Criminal Case No. 86-48926 and on 3 October warrants for their arrest were
issued and respondents continue to detain them because of the warrants of arrest and the pendency
of the criminal cases against them. Respondents further allege that, contrary to the allegation in the
petition, herein private respondent was not a member of the NDF panel involved in peace negotiations
with the Government; neither is he and his companions Cruz and Concepcion covered by any, safe
conduct pass issued by competent authorities.
3. At the hearing on 14 October 1986 the parties informed the Court of certain agreements reached
between them. We issued a resolution reading as follows:
When this case was called for hearing this morning, Attorneys Romeo Capulong, Arno V.
Sanidad, Efren H. Mercado, Edgardo Pamin-tuan, Casiano Sabile, Ramon Cura, and William
Chua appeared for the petitioners with Atty. Capulong arguing for the petitioners. Solicitor
General Sedfrey Ordonez, Assistant Solicitor General Romeo C. de la Cruz and Trial Attorney
Josue E. Villanueva appeared for the respondents, with Solicitor General Ordoñez arguing for
the respondents.
Petitioners' counsel, Atty. Romeo Capulong, manifested in open Court that in conformity with
the agreement reached with the government, the petition for habeas corpus will be withdrawn
with detainee Rodolfo Salas to remain under custody, whereas his co-detainees Josefina Cruz
and Jose Milo Concepcion will be released immediately.
Solicitor General Sedfrey Ordoñez, also in open Court, confirmed the foregoing statement made
by petitioners' counsel regarding the withdrawal of the petition for habeas corpus, declaring
that no objection will be interposed to the immediate release of detainees Josefina Cruz and
Jose Milo Concepcion, and that no bond will be required of them, but they will continue to face
trial with their co-accused, Rodolfo Salas; further, that they will not be rearrested on the basis of
the warrants issued by the trial court provided that they manifest in open Court their willingness
to subject themselves to the jurisdiction of the Court and to appear in court when their presence
is required.
In addition, he stated that he is willing to confer with petitioners' counsel today relative to the
compromise agreement that they have previously undertaken to submit.
Upon manifestation of petitioners' counsel, Atty. Romeo Capulong, that on his oath as member
of the Bar, the detainees Josefina Cruz and Jose Milo Concepcion have agreed to subject
themselves to the jurisdiction of the trial court, the Court ordered their immediate release.
Thereafter, the Court approved the foregoing manifestations and statements and required both
parties to SUBMIT to the Court their compromise agreement by 4:00 o'clock this afternoon.
Teehankee, C.J., is on official leave.
4. At 3:49 o'clock in the afternoon of 14 October 1986 the parties submitted a Joint Manifestation and
Motion duly signed by Atty. Romeo Capulong, counsel for petitioners, and Solicitor General Sedfrey
Ordoñez, Assistant Solicitor General Romeo C. de la Cruz and Trial Attorney Josue S. Villanueva, counsel
for respondents, which reads as follows:
COME NOW petitioners and the respondents, assisted by their respective counsel, and to this
Honorable Tribunal respectfully manifest:
1. That in the discussion between Romeo Capulong, petitioners' counsel, and Solicitor General
Sedfrey A. Ordoñez on October 13, 1986 exploratory talks were conducted to find out how the
majesty of the law may be preserved and human considerations may be called into play.
2. That in the conference both counsel agreed to the following terms of agreement:
a. The petition for habeas corpus will be withdrawn by petitioners and Josefina Cruz and
Jose Milo Concepcion will be immediately released but shall appear at the trial of the
criminal case for rebellion (People v. Rodolfo Salas, et al., Criminal Case No. 4886 [should
be 86-48926], Regional Trial Court, National Capital Judicial Region) filed against them
under their personal recognizance.
b. Petitioner Rodolfo Salas will remain in legal custody and face trial before the court
having custody over his person.
c. The warrant of arrest for the persons of Josefina Cruz and Jose Milo Concepcion is
hereby deemed recalled in view of formal manifestation before the Supreme Court that
they will submit themselves to the court having jurisdiction over their person.
3. That on October 14, the Solicitor General was able to obtain the conformity of the
Government to the foregoing terms which were likewise accepted by petitioner (sic) and their
counsel of record.
4. That the two counsel submitted their oral manifestation during the hearing on October 14 and
the present manifestation in compliance with the resolution announced in court this morning.
WHEREFORE, it is prayed that the petition for habeas corpus be dismissed.
5. On 16 October 1986 We issued the following resolution:
G.R. No. 76009 [In the Matter of the Petition for Habeas Corpus of Rodolfo Salas, Josefina Cruz
and Jose Milo Concepcion, et al. v. Hon. Juan Ponce Enrile, Gen. Fidel V. Ramos, Brig. Gen.
Renato de Villa, Brig. Gen. Ramon Montaño and Col. Virgilio Saldajeno] considering the Joint
Manifestation and Motion dated October 14, 1986 filed by Attorneys Romeo Capulong, Arno V.
Sanidad, Efren H. Mercado and Ricardo Fernandez, Jr. as counsel for petitioners and Solicitor
General Sedfrey A. Ordonez and Assistant Solicitor General Romeo C. de la Cruz and Trial
Attorney Josue S. Villanueva as counsel for respondents which states that they have entered into
an agreement whereby: [a] the petition for habeas corpus will be withdrawn by petitioners, and
Josefina Cruz and Jose Milo Concepcion will be immediately released but shall appear at the
trial of the criminal case for rebellion [People vs. Rodolfo Salas, et al., Criminal Case No. 4886,
Regional Trial Court, National Capital Judicial Region, Branch XII, Manila], filed against them, on
their personal recognizance; [b] petitioner Rodolfo Salas will remain in legal custody and face
trial before the court having custody over his person; and [c] the warrant of arrest for the person
of Josefina Cruz and Jose Milo Concepcion is hereby deemed recalled in view of the formal
manifestation before this Court that they will submit themselves to the court having jurisdiction
over their person and in view of the said agreement, the petition for habeas corpus be
dismissed, the Court Resolved to DISMISS the petition for habeas corpusbut subject to the
condition that petitioners' lead counsel, Atty. Capulong, upon his oath as member of the Bar,
shall abide by his commitment to ensure the appearance of Josefina Cruz and Jose Milo
Concepcion at the trial of the criminal case for rebellion filed against them. Teehankee, C.J., is
on official leave.
It is the stand of the petitioner that private respondent, "in agreeing to remain in legal custody even during the
pendency of the trial of his criminal case, [he] has expressly waived his right to bail." 37 Upon the other hand,
private respondent asserts that this claim is totally devoid of factual and legal basis, for in their petition
for habeas corpusthey precisely questioned the legality of the arrest and the continued detention of Rodolfo
Salas, Josefina Cruz and Jose Milo Concepcion, which was not resolved by this Court or by the compromise
agreement of the parties but left open for further determination in another proceeding. Moreover, the matter
of the right to bail was neither raised by either party nor resolved by this Court, and the legal steps promptly
taken by private respondent after the agreement was reached, like the filing of the motion to quash on 7
November 1986 and the petition for bail on 14 May 1987, were clear and positive assertions of his statutory and
constitutional rights to be granted not only provisional but final and permanent liberty. Finally, private
respondent maintains that the term "legal custody" as used in the Joint Manifestation and Motion simply means
that private respondent agreed to continue to be in the custody of the law or in custodia legis and nothing
else; it is not to be interpreted as waiver.
Interestingly, private respondent admits that:
"Custody" has been held to mean nothing less than actual imprisonment. It is also defined as the
detainer of a person by virtue of a lawful authority, or the "care and possession of a thing or person."
(Bouviers Law Dictionary, Third Ed, Vol. I, pp. 741-742 citing Smith v. Com. 59 Pa. 320 and Rolland v. Com.
82 Pa. 306)
He further admits that, in the light of Section 1 of Rule 114 of the Rules of Court and settled jurisprudence, the
"constitutional right to bail is subject to the limitation that the person applying for admission to bail should be in
the custody of the law or otherwise deprived of his liberty." 38
When the parties in G.R. No. 76009 stipulated that:
b. Petitioner Rodolfo Salas will remain in legal custody and face trial before the court having custody
over his person.
they simply meant that Rodolfo Salas, herein respondent, will remain in actual physical custody of the court, or
in actual confinement or detention, as distinguished from the stipulation concerning his co-petitioners, who
were to be released in view of the recall of the warrants of arrest against them; they agreed, however, "to
submit themselves to the court having jurisdiction over their persons." Note should be made of the deliberate
care of the parties in making a fine distinction between legal custody and court having custody over the
person in respect to Rodolfo Salas and court having jurisdiction over the persons of his co-accused. Such a fine
distinction was precisely intended to emphasize the agreement that Rodolfo Salas will not be released, but
should remain in custody. Had the parties intended otherwise, or had this been unclear to private respondent
and his counsel, they should have insisted on the use of a clearer language. It must be remembered that at the
time the parties orally manifested before this Court on 14 October 1986 the terms and conditions of their
agreement and prepared and signed the Joint Manifestation and Motion, a warrant of arrest had already
been issued by the trial court against private respondent and his co-accused. The stipulation that only the
warrants of arrest for Josefina Cruz and Jose Milo Concepcion shall be recalled and that only they shall be
released, further confirmed the agreement that herein petitioner shall remain in custody of the law, or
detention or confinement.
In defining bail as:
. . . the security given for the release of a person in custody of the law, . . .
Section 1 of Rule 114 of the Revised Rules of Court admits no other meaning or interpretation for the term "in
custody of the law" than that as above indicated. The purpose of bail is to relieve an accused from
imprisonment until his conviction and yet secure his appearance at the trial. 39 It presupposes that the person
applying for it should be in the custody of the law or otherwise deprived of liberty.40
Consequently, having agreed in G.R. No. 76009 to remain in legal custody, private respondent had
unequivocably waived his right to bail.
But, is such waiver valid?
Article 6 of the Civil Code expressly provides:
Art. 6. Rights may be waived, unless the waiver is contrary to law, public order, public policy, morals, or
good customs, or prejudicial to a third person with a right recognized by law.
Waiver is defined as "a voluntary and intentional relinquishment or abandonment of a known existing legal
right, advantage, benefit, claim or privilege, which except for such waiver the party would have enjoyed; the
voluntary abandonment or surrender, by a capable person, of a right known by him to exist, with the intent that
such right shall be surrendered and such person forever deprived of its benefit; or such conduct as warrants an
inference of the relinquishment of such right; or the intentional doing of an act inconsistent with claiming it." 41
As to what rights and privileges may be waived, the authority is settled:
. . . the doctrine of waiver extends to rights and privileges of any character, and, since the word "waiver"
covers every conceivable right, it is the general rule that a person may waive any matter which affects
his property, and any alienable right or privilege of which he is the owner or which belongs to him or to
which he is legally entitled, whether secured by contract, conferred with statute, or guaranteed by
constitution, provided such rights and privileges rest in the individual, are intended for his sole benefit,
do not infringe on the rights of others, and further provided the waiver of the right or privilege is not
forbidden by law, and does not contravene public policy; and the principle is recognized that
everyone has a right to waive, and agree to waive, the advantage of a law or rule made solely for the
benefit and protection of the individual in his private capacity, if it can be dispensed with and
relinquished without infringing on any public right, and without detriment to the community at large. . . .
Although the general rule is that any right or privilege conferred by statute or guaranteed by
constitution may be waived, a waiver in derogation of a statutory right is not favored, and a waiver will
be inoperative and void if it infringes on the rights of others, or would be against public policy or morals
and the public interest may be waived.
While it has been stated generally that all personal rights conferred by statute and guaranteed by
constitutionmay be waived, it has also been said that constitutional provisions intended to protect
property may be waived, and even some of the constitutional rights created to secure personal liberty
are subjects of waiver.42
In Commonwealth vs. Petrillo,43 it was held:
Rights guaranteed to one accused of a crime fall naturally into two classes: (a) those in which the state,
as well as the accused, is interested; and (b) those which are personal to the accused, which are in the
nature of personal privileges. Those of the first class cannot be waived; those of the second may be.
It is "competent for a person to waive a right guaranteed by the Constitution, and to consent to action which
would be invalid if taken against his will." 44
This Court has recognized waivers of constitutional rights such as, for example, the right against unreasonable
searches and seizures;45 the right to counsel and to remain silent;46 and the right to be heard.47
Even the 1987 Constitution expressly recognizes a waiver of rights guaranteed by its Bill of
Rights.1âwphi1 Section 12(l) of Article III thereof on the right to remain silent and to have a competent and
independent counsel, preferably of his own choice states:
. . . These rights cannot be waived except in writing and in the presence of counsel.
This provision merely particularizes the form and manner of the waiver; it, nevertheless, clearly suggests that the
other rights may be waived in some other form or manner provided such waiver will not offend Article 6 of the
Civil Code.
We hereby rule that the right to bail is another of the constitutional rights which can be waived. It is a right
which is personal to the accused and whose waiver would not be contrary to law, public order, public policy,
morals, or good customs, or prejudicial to a third person with a right recognized by law.
The respondent Judge then clearly acted with grave abuse of discretion in granting bail to the private
respondent.
WHEREFORE, the Orders of respondent Judge of July 7, 1987 and July 30, 1987 in Criminal Case No. 86-48926
entitled People of the Philippines vs. Rodolfo C. Salas alias Commander Bilog/Henry, Josefina Cruz alias Mrs.
Mercado, and Jose Milo Concepcion alias Eugene Zamora, for Rebellion, are hereby NULLIFIED and SET ASIDE.
SO ORDERED.
Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Griño-
Aquino, Medialdea and Regalado, JJ., concur.
Sarmiento, J., took no part.

Footnotes
1 Entitled People of the Philippines versus Rodolfo C. Salas, alias Commander Bilog, Josefina

Cruz, aliasMrs. Mercado, and Jose Concepcion, alias Eugene Zamora.


2 Annex "B" of Petition; Rollo, 25-27.
3 Annex "C" of Petition; Id., 28-31.
4 Petition, 7; Rollo, 7; p. 4 of Order of 6 March 1987 of respondent Judge, Annex "F" of Petition; Rollo, 47.
5 G.R. No. 76009 entitled In the Matter of the Petition for Habeas Corpus of Rodolfo Salas, Josefina Cruz

and Jose Milo Concepcion, petitioners, versus Hon. Juan Ponce Enrile, et al., respondents.
6 Annex "D" of Petition; Rollo, 32-36.
7 Annex "E" of Petition; Id., 37-45.
8 Annex "F" of Petition; Id., 44-50.
9 Annex "G" of Petition; Id., 51-53.
10 Annex "H" of Petition; Rollo, 54-56.
11 Annex "J" of Petition; Id., 64-70.
12 Annex "K" of Petition; Rollo, 71-74.
13 Annex "L" of Petition; Id., 75-79.
14 Carlson vs. Landon, 342 U.S. 524; 537-542 (1952); Wong Wing vs. U.S., 163 U.S. 228 (1986).
15 Bell vs. Wolfish, 441 U.S. 534.
16 U.S. vs. Anthony Salerno and Vincent Cafaro, No. 86-87, May 26, 1987, decided by the U.S. Court of

Appeals for the Second Circuit Court.


17 Annex "A" of Petition: Rollo, 18-24.
18 Petition, 11-15.
19 Rollo, 84.
20 Id., 89-119.
21 Resolution of 3 September 1987; Rollo, 122.
22 Id., 126-135.
23 Id., 136.
24 Rollo, 137.
25 Id., 139-141.
26 Id., 138-A.
27 Id., 142.
28 Id., 163.
29 Id., 196-206.
30 Article 135, Revised Penal Code.
31 See Payao vs. Lesaca, 63 Phil. 210, 213; People vs. Alano, 81 Phil. 19, 21.
32 Montano vs. Ocampo, L-6352, Resolution of 29 January 1953, 49 O.G. 1855, cited in the dissenting

opinion of then Justice Teehankee in Garcia-Padilla vs. Enrile, et al., 121 SCRA 472 (1953).
33 Herras-Teehankee vs. Director of Prisons, 76 Phil. 756, 770.
34 Citing 6 C.J., sec. 168, pp. 953, 954; Italics supplied for emphasis.
35 People vs. Sandiego, 26 SCRA 522.
36 Article 22, Revised Penal Code.
37 Petition, 8.
38 Comment, 6-8; Rollo, 94-96.
39 Almeda vs. Villaluz, 66 SCRA 38.
40 Mendoza vs. Court of First Instance of Quezon, et al., 51 SCRA 369.
41 67 C.J. 291.
42 92 C.J.S., 1066-1068; Italics supplied for emphasis.
43 16 A. 2d 50, 57, 340 Pa. 33, cited in note 71 C.J.S., 1068.
44 TOLENTINO, Civil Code of the Philippines, vol. 1, 1985 ed., pp. 31-32, citing Waxman vs. United States,

12 Fed. 2nd, 775


45 People vs. Malasugui, 63 Phil. 221; de Garcia vs. Locsin, et al., 65 Phil. 689.
46 People vs. Royo, 114 SCRA 304; Morales vs. Enrile, 121 SCRA 538; People vs. Colana, 126 SCRA 23;

People vs. Galit, 135 SCRA 465; People vs. Sanchez, 132 SCRA 103 and People vs. Quizon, 142 SCRA 362.
47 Abriol vs. Homeres, 84 Phil. 525; People vs. Dichoso, 96 SCRA 957.

G.R. No. 103982 December 11, 1992


ANTONIO A. MECANO, petitioner,
vs.
COMMISSION ON AUDIT, respondent.

CAMPOS, JR., J.:


Antonio A. Mecano, through a petition for certiorari, seeks to nullify the decision of the Commission on Audit
(COA, for brevity) embodied in its 7th Indorsement, dated January 16, 1992, denying his claim for
reimbursement under Section 699 of the Revised Administrative Code (RAC), as amended, in the total amount
of P40,831.00.
Petitioner is a Director II of the National Bureau of Investigation (NBI). He was hospitalized for cholecystitis from
March 26, 1990 to April 7, 1990, on account of which he incurred medical and hospitalization expenses, the
total amount of which he is claiming from the COA.
On May 11, 1990, in a memorandum to the NBI Director, Alfredo S. Lim (Director Lim, for brevity), he requested
reimbursement for his expenses on the ground that he is entitled to the benefits under Section 699 1 of the RAC,
the pertinent provisions of which read:
Sec. 699. Allowances in case of injury, death, or sickness incurred in performance of duty. —
When a person in the service of the national government of a province, city, municipality or
municipal district is so injured in the performance of duty as thereby to receive some actual
physical hurt or wound, the proper Head of Department may direct that absence during any
period of disability thereby occasioned shall be on full pay, though not more than six months,
and in such case he may in his discretion also authorize the payment of the medical
attendance, necessary transportation, subsistence and hospital fees of the injured person.
Absence in the case contemplated shall be charged first against vacation leave, if any there
be.
xxx xxx xxx
In case of sickness caused by or connected directly with the performance of some act in the
line of duty, the Department head may in his discretion authorize the payment of the necessary
hospital fees.
Director Lim then forwarded petitioner's claim, in a 1st Indorsement dated June 22, 1990, to the Secretary of
Justice, along with the comment, bearing the same date, of Gerarda Galang, Chief, LED of the NBI,
"recommending favorable action thereof". Finding petitioner's illness to be service-connected, the Committee
on Physical Examination of the Department of Justice favorably recommended the payment of petitioner's
claim.
However, then Undersecretary of Justice Silvestre H. Bello III, in a 4th Indorsement dated November 21, 1990,
returned petitioner's claim to Director Lim, having considered the statements of the Chairman of the COA in its
5th Indorsement dated 19 September 1990, to the effect that the RAC being relied upon was repealed by the
Administrative Code of 1987.
Petitioner then re-submitted his claim to Director Lim, with a copy of Opinion No. 73, S. 1991 2 dated April 26,
1991 of then Secretary of Justice Franklin M. Drilon (Secretary Drilon, for brevity) stating that "the issuance of the
Administrative Code did not operate to repeal or abregate in its entirety the Revised Administrative Code,
including the particular Section 699 of the latter".
On May 10, 1991, Director Lim, under a 5th Indorsement transmitted anew Mecano's claim to then
Undersecretary Bello for favorable consideration. Under a 6th Indorsement, dated July 2, 1991, Secretary Drilon
forwarded petitioner's claim to the COA Chairman, recommending payment of the same. COA Chairman
Eufemio C. Domingo, in his 7th Indorsement of January 16, 1992, however, denied petitioner's claim on the
ground that Section 699 of the RAC had been repealed by the Administrative Code of 1987, solely for the
reason that the same section was not restated nor re-enacted in the Administrative Code of 1987. He
commented, however, that the claim may be filed with the Employees' Compensation Commission,
considering that the illness of Director Mecano occurred after the effectivity of the Administrative Code of 1987.
Eventually, petitioner's claim was returned by Undersecretary of Justice Eduardo Montenegro to Director Lim
under a 9th Indorsement dated February 7, 1992, with the advice that petitioner "elevate the matter to the
Supreme Court if he so desires".
On the sole issue of whether or not the Administrative Code of 1987 repealed or abrogated Section 699 of the
RAC, this petition was brought for the consideration of this Court.
Petitioner anchors his claim on Section 699 of the RAC, as amended, and on the aforementioned Opinion No.
73, S. 1991 of Secretary Drilon. He further maintains that in the event that a claim is filed with the Employees'
Compensation Commission, as suggested by respondent, he would still not be barred from filing a claim under
the subject section. Thus, the resolution of whether or not there was a repeal of the Revised Administrative
Code of 1917 would decide the fate of petitioner's claim for reimbursement.
The COA, on the other hand, strongly maintains that the enactment of the Administrative Code of 1987 (Exec.
Order No. 292) operated to revoke or supplant in its entirety the Revised Administrative Code of 1917. The COA
claims that from the "whereas" clauses of the new Administrative Code, it can be gleaned that it was the intent
of the legislature to repeal the old Code. Moreover, the COA questions the applicability of the aforesaid
opinion of the Secretary of Justice in deciding the matter. Lastly, the COA contends that employment-related
sickness, injury or death is adequately covered by the Employees' Compensation Program under P.D. 626, such
that to allow simultaneous recovery of benefits under both laws on account of the same contingency would
be unfair and unjust to the Government.
The question of whether a particular law has been repealed or not by a subsequent law is a matter of
legislative intent. The lawmakers may expressly repeal a law by incorporating therein a repealing provision
which expressly and specifically cites the particular law or laws, and portions thereof, that are intended to be
repealed.3 A declaration in a statute, usually in its repealing clause, that a particular and specific law, identified
by its number or title, is repealed is an express repeal; all others are implied repeals.4
In the case of the two Administrative Codes in question, the ascertainment of whether or not it was the intent of
the legislature to supplant the old Code with the new Code partly depends on the scrutiny of the repealing
clause of the new Code. This provision is found in Section 27, Book VII (Final Provisions) of the Administrative
Code of 1987 which reads:
Sec. 27. Repealing Clause. — All laws, decrees, orders, rules and regulations, or portions thereof,
inconsistent with this Code are hereby repealed or modified accordingly.
The question that should be asked is: What is the nature of this repealing clause? It is certainly not an express
repealing clause because it fails to identify or designate the act or acts that are intended to be
repealed.5 Rather, it is an example of a general repealing provision, as stated in Opinion No. 73, S. 1991. It is a
clause which predicates the intended repeal under the condition that substantial conflict must be found in
existing and prior acts. The failure to add a specific repealing clause indicates that the intent was not to repeal
any existing law, unless an irreconcilable inconcistency and repugnancy exist in the terms of the new and old
laws.6 This latter situation falls under the category of an implied repeal.
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.7 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;8 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.9
There are two categories of repeal by implication. The first is where provisions in the two acts on the same
subject matter are in an irreconcilable conflict, the later act to the extent of the conflict constitutes an implied
repeal of the earlier one. The second is if the later act covers the whole subject of the earlier one and is clearly
intended as a substitute, it will operate to repeal the earlier law.10
Implied repeal by irreconcilable inconsistency takes place when the two statutes cover the same subject
matter; they are so 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.11
Comparing the two Codes, it is apparent that the new Code does not cover nor attempt to cover the entire
subject matter of the old Code. There are several matters treated in the old Code which are not found in the
new Code, such as the provisions on notaries public, the leave law, the public bonding law, military
reservations, claims for sickness benefits under Section 699, and still others.
Moreover, the COA failed to demonstrate that the provisions of the two Codes on the matter of the subject
claim are in an irreconcilable conflict. In fact, there can be no such conflict because the provision on sickness
benefits of the nature being claimed by petitioner has not been restated in the Administrative Code of 1987.
However, the COA would have Us consider that the fact that Section 699 was not restated in the Administrative
Code of 1987 meant that the same section had been repealed. It further maintained that to allow the
particular provisions not restated in the new Code to continue in force argues against the Code itself. The COA
anchored this argument on the whereas clause of the 1987 Code, which states:
WHEREAS, the effectiveness of the Government will be enhanced by a new Administrative Code
which incorporate in a unified document the major structural, functional and procedural
principles and rules of governance; and
xxx xxx xxx
It argues, in effect, that what is contemplated is only one Code — the Administrative Code of 1987. This
contention is untenable.
The fact that a later enactment may relate to the same subject matter as that of an earlier statute is not of itself
sufficient to cause an implied repeal of the prior act, since the new statute may merely be cumulative or a
continuation of the old one. 12 What is necessary is a manifest indication of legislative purpose to repeal.13
We come now to the second category of repeal — the enactment of a statute revising or codifying the former
laws on the whole subject matter. This is only possible if the revised statute or code was intended to cover the
whole subject to be a complete and perfect system in itself. It is the rule that a subsequent statute is deemed to
repeal a prior law if the former revises the whole subject matter of the former statute.14 When both intent and
scope clearly evidence the idea of a repeal, then all parts and provisions of the prior act that are omitted from
the revised act are deemed repealed.15 Furthermore, before there can be an implied repeal under this
category, it must be the clear intent of the legislature that the later act be the substitute to the prior act.16
According to Opinion No. 73, S. 1991 of the Secretary of Justice, what appears clear is the intent to cover only
those aspects of government that pertain to administration, organization and procedure, understandably
because of the many changes that transpired in the government structure since the enactment of the RAC
decades of years ago. The COA challenges the weight that this opinion carries in the determination of this
controversy inasmuch as the body which had been entrusted with the implementation of this particular
provision has already rendered its decision. The COA relied on the rule in administrative law enunciated in the
case of Sison vs. Pangramuyen17 that in the absence of palpable error or grave abuse of discretion, the Court
would be loathe to substitute its own judgment for that of the administrative agency entrusted with the
enforcement and implementation of the law. This will not hold water. This principle is subject to limitations.
Administrative decisions may be reviewed by the courts upon a showing that the decision is vitiated by fraud,
imposition or mistake.18 It has been held that Opinions of the Secretary and Undersecretary of Justice are
material in the construction of statutes in pari materia.19
Lastly, it is a well-settled rule of statutory construction that repeals of statutes by implication are not
favored.20 The presumption is against inconsistency and repugnancy for the legislature is presumed to know the
existing laws on the subject and not to have enacted inconsistent or conflicting statutes.21
This Court, in a case, explains the principle in detail as follows: "Repeals by implication are not favored, and will
not be decreed unless it is manifest that the legislature so intended. As laws are presumed to be passed with
deliberation with full knowledge of all existing ones on the subject, it is but reasonable to conclude that in
passing a statute it was not intended to interfere with or abrogate any former law relating to some matter,
unless the repugnancy between the two is not only irreconcilable, but also clear and convincing, and flowing
necessarily from the language used, unless the later act fully embraces the subject matter of the earlier, or
unless the reason for the earlier act is beyond peradventure renewed. Hence, every effort must be used to
make all acts stand and if, by any reasonable construction, they can be reconciled, the later act will not
operate as a repeal of the earlier.22
Regarding respondent's contention that recovery under this subject section shall bar the recovery of benefits
under the Employees' Compensation Program, the same cannot be upheld. The second sentence of Article
173, Chapter II, Title II (dealing on Employees' Compensation and State Insurance Fund), Book IV of the Labor
Code, as amended by P.D. 1921, expressly provides that "the payment of compensation under this Title shall not
bar the recovery of benefits as provided for in Section 699 of the Revised Administrative Code . . . whose
benefits are administered by the system (meaning SSS or GSIS) or by other agencies of the government."
WHEREFORE, premises considered, the Court resolves to GRANT the petition; respondent is hereby ordered to
give due course to petitioner's claim for benefits. No costs.
SO ORDERED.
Narvasa, C.J., Cruz, Feliciano, Padilla, Bidin, Griño-Aquino, Regalado, Davide, Jr., Romero, Nocon, Bellosillo and
Melo, JJ., concur.
Gutierrez, Jr., J., concur in the result.

Footnotes
1 As amended by R.A. No. 1232 dated June 7, 1955.
2 Rollo, pp. 26-30.
3 School Dist. No. 45 vs. Board of County of Comira, 141 Kan. 108.
4 AGPALO, STATUTORY CONSTRUCTION 289 (1986).
5 Iloilo Palay and Corn Planters Association, Inc. vs, Feliciano, 13 SCRA 377 (1965).
6 CRAWFORD, CONSTRUCTION OF STATUTE 631 (1940 ed.).
7 Posadas vs. National City Bank, 296 U.S. 497, 80 L. Ed. 351 (1935).
8 Maceda vs. Macaraig, 197 SCRA 771 (1991).
9 Supra, note 7.
10 Supra, note 4.
11 Villegas vs. Subido, 41 SCRA 190 (1971).
12 Valera vs. Tuason, 80 Phil. 823 (1948).
13 Jalandoni vs. Endaya, 55 SCRA 261 (1974).
14 People vs. Almuete, 69 SCRA 410, 414 (1976).
15 People vs. Benuya, 61 Phil. 208 (1916).
16 Supra, note 9.
17 84 SCRA 364 (1978).
18 Jaculina vs. National Police Commission, 200 SCRA 489 (1991); Greenhills Mining Co. vs. Office
of the President, 163 SCRA 350 (1988).
19 Philippine Global Communications, Inc. vs. Relova, 145 SCRA 385 (1986).
20 National Power Corporation vs. Hon. Zain B. Angas, G.R. Nos. 60225-26, May 8, 1992; Maceda
vs. Macaraig, 197 SCRA 771 (1991); Maddumba vs. Government Service Insurance System, 182
SCRA 281 (1990); Larga vs. Ranada, Jr., 164 SCRA 18 (1988); De Jesus vs. People, 120 SCRA 760
(1983).
21 U.S. vs. Palacio, 33 Phil. 208 (1916).
22 Smith, Bell & Co. vs. Estate of Maronilla, 41 Phil. 557 (1916).
[G.R. No. 8769. February 5, 1916. ]

SMITH, BELL & CO., Plaintiff-Appellant, v. THE ESTATE OF MARIANO MARONILLA, deceased, VICENTE VELASCO,
administrator, and VENANCIO CAVADA DIAZ, a creditor of said estate, Defendants-Appellees.

Manly & McMahon and Bruce, Lawrence, Ross & Block for Appellant.

Albert E. Somersille and Rafael de la Sierra for the appellee, Cavada Diaz.

No appearance for the appellee, Velasco.

SYLLABUS
1. STATUTES; REPEALS BY IMPLICATION NOT FAVORED. — Repeals by implication are not favored and will not be
decreed, unless it is manifest that the legislator so intended.

2. ID; PRESUMPTION OF KNOWLEDGE BY LEGISLATOR OF EXISTING LAWS ON CERTAIN SUBJECT. — All laws are
presumed to be passed with deliberation and with full knowledge of all existing ones on the subject, and it is
but reasonable to conclude that in passing a statute it was not intended to interfere with or abrogate any
former law relating to the same matter, unless the repugnancy between the two is not only irreconcilable, but
also clear and convincing, and following necessarily from the language used, or unless the latter Act fully
embraces the subject matter of the earlier or the reason for the earlier Act is beyond peradventure removed.

3. EXECUTORS AND ADMINISTRATORS; STATUTORY PREFERENCES; DEATH OF OWNER DOES NOT DESTROY LIENS OR
PREFERENCES. — There is nothing in the language of section 735 of the Code of Civil Procedure which should
justify us in holding that it was the intention of the legislator to provide that, upon the death of the owner of an
insolvent estate, the mere fact of his death has the effect of destroying all liens or preferences (except those
mentioned in that section) created by statute or by act of the parties, and already in existence and affecting
all or any part of his property at the time of his death.

4. ID.; ID.; DEATH OF DEBTOR DOES NOT DEPRIVE CREDIT OF EXISTING SECURITY. — The classification and order of
payment of debts of deceased persons set out in section 735 was intended to include merely debts against the
estate not otherwise accrued, and not to include debts otherwise secured, except perhaps in so far as the
security proves to be insufficient to secure payment in full; and it was not the legislative intent to prescribe that
the death of a debtor will deprive his creditor of any existing security he may have had by way of lien or
preference.

5. ID.; ID.; SUBSECTIONS 1 AND 2, ARTICLE 1924, CIVIL CODE, REPEALED. — The enactment of sections 735 and
736 of the new Code of Civil Procedure treating of the order of payment of the debts of a deceased person if
his estate is insolvent was not intended to destroy or affect, and it does not destroy or affect any recorded or
statutory liens or preferences affecting property at the time of the death of the owner; save only that the
statutory preferences, which formerly attached to such property on the death of the owner in the order set out
in subsections 1 and 2 of article 1924 of the Civil Code, are abolished and replaced by the statutory
preferences created in subsections 1, 2, 3, 4, and 5 of section 735 of the Code of Civil Procedure.

6. ID.; ID.; MORTGAGE LIENS. — Mortgage liens and the like and the statutory preferences which have attached
to the specific property of a debtor at the time of his death are in no wise affected by the classification in
section 735 of the Code of Civil Procedure of "assets which can be appropriated for the payment of debts in
the event of the insolvency of the estate of the deceased person," and may be asserted and enforced without
reference to that classification.

7. ID.; ID.; SUBSECTION 3, ARTICLE 1924, CIVIL CODE, IN FORCE. — Statutory preferences securing the payment of
debts evidenced by "public instruments" and "final judgments" affecting the property of the deceased at the
time of his death under the provisions of subsection 3 of article 1924 of the Civil Code continue in full force and
effect notwithstanding the enactment of section 735 of the Code of Civil Procedure; but subordinated, in the
order of classification for payment, to the preferences established in subdivisions 1, 2, 3, 4, and 5 of that section,
in like manner to that in which they were subordinated to the preferences arising at the death of the debtor,
established in subsections 1 and 2 of article 1924 of the Civil Code, before those latter statutory preferences
were abolished and the preferences mentioned in 1, 2, 3, 4, and 5 of the Code of Civil Procedure substituted in
their place.
8. ID.; ID.; PETERSON VS. NEWBERRY, EXAMINED AND DISTINGUISHED. — The comment in the case of Peterson v.
Newberry (6 Phil., 262), which is set out at length in this opinion, examined and distinguished.

DECISION

CARSON, J. :

Appellant is a creditor of the estate of Mariano Maronilla who died in the year 1908, in the sum of P36,475.55;
the appellee. Venancio Cavada Diaz is also a creditor, in the sum of P8,985.48; both claims were allowed in the
court below, but the administrator of the estate was ordered to give appellee’s claim a preference over that of
the appellant in the distribution of the funds of the estate, on the ground that the claim of the appellee is
evidenced by a public document bearing date of August 29, 1904, and thus entitled to a preference in the
distribution of the assets of decedent’s estate while that of the appellant is merely a general claim against the
estate, unsecured by any lien or mortgage, as to which no claim of preference is advanced under the
provisions of the Civil Code or otherwise.

The ruling of the court below was based on the provisions of articles 1921, 1924, and 1925 of the Civil Code.
These articles are as follows:jgc:chanrobles.com.ph

"Credits shall be classified for their graduation and payment according to the order and manner specified in
this chapter."cralaw virtua1aw library

"With regard to the other personal and real property of the debtor, the following credits are
preferred:jgc:chanrobles.com.ph

"1. Credits in favor of the province or municipality for the taxes of the last year, due and unpaid, not included in
No. 1 of article 1923.

"2. Those due:jgc:chanrobles.com.ph

"A. For judicial expenses and those of administration of the bankruptcy for the common interest of the creditors,
made with the proper authorization or approval.

"B. For the funeral expenses of the debtor, according to the customs of the place, and also those of his wife
and of his children, under their parental authority should they have no property of their own.

"C. For expenses of the last illness of said persons, incurred during the last year, counted up to the day of their
death.

"D. For daily wages and salaries of employees and domestic servants for the last year.

"E. For advances made to the debtor for himself and his family, constituted under his authority, in provisions,
clothing or shoes, for the same period of time.

"F. For income for support during the proceedings in bankruptcy unless they are based on mere beneficence.

"3. Credits which without a special privilege appear:jgc:chanrobles.com.ph

"A. In a public instrument.

"B. In a final judgment, should they have been the object of litigation.

"These credits shall have preference among themselves, according to the priority of dates of the instruments
and of the judgments.

"Credits of any other kind or for any other consideration not included in the preceding article shall have no
preference."cralaw virtua1aw library

The contention of the appellant is that article 1924 of the Civil Code was repealed by the enactment of
sections 735 and 736 of the new Code of Civil Procedure and that, under the terms of these latter sections,
appellant and appellee, as well as all other creditors of the estate not included in subsections 1, 2, 3, 4, and 5 of
section 735 should be placed upon an equal footing as to preferences, and that the claims of all alike should
be paid pro rata to the extent of the assets of the estate.

Articles 735 and 736 of the Code of Civil Procedure are as follows:jgc:chanrobles.com.ph
"SEC. 735. Order of Payment if Estate Insolvent. — If the assets which can be appropriated for the payment of
debts are not sufficient for that purpose, the executor or administrator shall, after paying the necessary
expenses of administration; pay the debts against the estate in the following order:jgc:chanrobles.com.ph

"1. The necessary funeral expenses;

"2. The expenses of the last sickness;

"3. Debts due to the United States;

"4. Taxes and assessments due to the Government, or any branch or subdivision thereof;

"5. Debts due to the province;

"6. Debts due to other creditors.

"SEC. 736. Dividends to be paid in proportion to claim. — If there are not assets sufficient to pay the debts of
any one of the aforesaid classes, after paying the preceding ones, each creditor within the class for which
there are not sufficient assets for payment in full, shall be paid a dividend in proportion to his claim. No creditor
of any one class shall receive any payment until those of the preceding class are paid."cralaw virtua1aw library

Counsel for appellant contend that "The section just quoted provides that after the debts of the first five classes
are paid, the appellant and the appellee, and others embraced in the sixth class, shall be paid each a
dividend in proportion to his claim. This provision is obviously inconsistent with the preference established in
article 1924 of the Civil Code, and therefore repeals the Civil Code provision in so far as the estates of
deceased persons are concerned."cralaw virtua1aw library

We cannot agree with this contention in so far as it relates to the preferences established in subsection 3 of
article 1924 of the Civil Code.

It is undoubtedly true that in so far as the provisions of that article are in necessary convict with the provisions of
section 735 of the new Code of Civil Procedure, they must be held to have been repealed by implication; and
there can be no doubt that with relation to the distribution of the assets of insolvent estates of deceased
persons, the classification and preferences set out in subsections one and two of article 1924 have been
repealed by the enactment of section 735 of the later Act. From a comparative analysis of these statutes, it is
impossible to escape the conclusion that it was the intention of the lawmaker to provide a new and a
substantially different classification of the credits and the preferences mentioned in these subsections (1 and 2)
of the earlier statute; but we find nothing in the later statute which is necessarily in conflict with the provisions of
subsection 3 of the earlier statute, except that under the later statute these preferences must be held to be
subordinated in the distribution of the assets of the estates of deceased persons, to classes 1, 2, 3, 4, and 5 of
section 735 of the Code of Civil Procedure, instead of classes 1 and 2 as set forth in article 1924 of the Civil
Code.

"Repeal by implication are not favored and will not be indulged, unless it is manifest that the legislature so
intended. As laws are presumed to be passed with deliberation and with full knowledge of all existing laws on
the subject, it is but reasonable to conclude that in passing a statute it was not intended to interfere with or
abrogate any former law relating to the same matter, unless the later act is either repugnant to the earlier one,
or fully embraces the subject-matter thereof, or unless the reason for the earlier act is beyond peradventure
removed.
x x x

"Hence every effort must be used to make all acts stand, and the later act will not operate as a repeal of the
earlier one, if by any reasonable construction, they can be reconciled." (26 Am. and Eng. Encyc. of Law, pp.
721, 726, and cases there cited.)

There is nothing in the language of section 735 of the Code of Civil Procedure which would justify us in holding
that it was the intention of the legislator to provide that upon the death of the owner of an insolvent estate, the
mere fact of his death has the effect of destroying all liens or preferences (except those mentioned in that
section), created by statute or by act of the parties, and already in existence and affecting all or any part of his
property at the time of his death.

It is urged that the language of the statute, prescribing that creditors within each of the classes mentioned in
section 735 shall be paid a dividend in proportion to his claim must be held to have this effect, since, as it is
said, class 6 includes all debts due to creditors other than those mentioned in the first five classes, whether such
debts are secured or not.

We are of opinion, however, that the classification and order of payment set out in section 735 was intended to
include merely debts against the estate not otherwise secured and not to include debts otherwise secured,
except perhaps in so far as the security proves to be insufficient to secure payment in full; and that it was not
the legislative intent to prescribe that the death of a debtor will deprive his creditor of any existing security he
may have had by way of lien or preference.

But it is said that the language of the statute contains no exception in favor of debts secured by lien or
preference, and that the court should not read such an exception into the statute.

To this we answer: First, that the language of the statute must be construed with relation to the subject-matter
with which it deals, and it is evident that it was intended only to deal with assets of the estate which (in the
opening language of section 735) "can be appropriated for the payment of debts;" and assets affected by
liens or duly asserted preferences cannot properly be said to be "available" for the payment of debts, at least
so far as a particular creditor has a right to have them applied to the payment of a particular claim against the
estate; second, that it is very clear that the sixth class of debts does not include all the debts due by the
deceased, for provision is expressly made elsewhere in the Code for the enforcement of mortgage debts,
wholly independent of the classification of the debts mentioned in section 735; and third, that, by extending
the meaning of the word debts, as used in sections 735 and 736 of the Code, so as to include all debts secured
by liens of asserted preferences, and thus destroy all such liens or preferences, we would impute to the
legislator the wholly unreasonable, unjust, and oppressive intent to deprive the creditors of the deceased of
acquired rights in and to their debtor’s property by virtue of the mere fact of the death of the debtor.

No valid or sufficient reason has been suggested which would justify or necessitate the enactment of a
statutory rule, depriving a creditor by the mere death of his debtor of an acquired statutory preference
securing a duly recorded judgment; or a mechanic’s claim for service rendered; or the claim of a vendor of
specific property for the purchase price; or a credit for transportation; or a credit for agricultural advances; for
rents; or the like. On the contrary, to expose the security upon which such credits are made to the risk of the
debtor’s death would tend very substantially to destroy the very purpose for which the law authorizes or
prescribes the creation of such preferences.

We conclude therefore that the enactment of sections 735, and 736 of the new Code of Civil Procedure was
not intended to destroy or affect, and that it does not destroy or affect any recorded or statutory liens or
preferences affecting property at the time of the death of the owner, save only that the statutory preferences,
which formerly attached to such property on the death of the owner in the order set out in subsections 1 and"
of article 1924 of the Civil Code, are abolished and replaced by the statutory preferences created in
subsections 1, 2, 3, 4, and 5 of section 735 of the Code of Civil Procedure.

It follows that mortgage liens and the like, and the statutory preferences which have attached to specific
property of a debtor at the time of his death, are in no wise affected by the classification in section 735 of the
Code of Civil Procedure of "assets which can be appropriated for the payment of debts" in the event of the
insolvency of the estate of a deceased person, and may be asserted and enforced without reference to that
classification; and that statutory preferences securing the payment of debts evidenced by "public instruments"
and "final judgments" affecting the property of the deceased at the time of his death under the provisions of
subsection 3 of article 1924 of the Civil Code, continue in full force and effect; but subordinated, in the order of
classification for payment, to the preferences established in subdivisions 1, 2, 3, 4, and 5 of section 735 of the
Code of Civil Procedure, in like manner to that in which they were subordinated to the preferences arising at
the death of the debtor established in subsections 1 and 2 of article 1924 of the Civil Code, before those later
statutory preferences were abolished and the preferences mentioned in 1, 2, 3, 4, and 5 of the Code of Civil
Procedure substituted in their place.

Articles 735 and 736 of the Code of Civil Procedure were borrowed from American statutory law (of sections
2503 and 2504 of the Vermont Statutes 1894), and the conclusions at which we have arrived, as to their force
and effect with relation to liens and statutory preferences affecting property at the time of the death of the
owner, are supported by both textbook and judicial authority in the United States.

In the case of Milward v. Shields [(Ky., 1897) 39 L. R. A., 506], in which it was held that a mortgage lien was
entitled to priority over funeral expenses, the court said:jgc:chanrobles.com.ph

"The statute has no reference to, nor any effect upon, bona fide liens secured to creditors of the decedent
under the general law, such as liens by mortgage, or liens acquired — like attachment liens — by operation of
law but regulates priorities in reference only to unsecured liabilities, gives certain liabilities and expenses priority,
and then puts all other debts and liabilities on equal footing . . . ."cralaw virtua1aw library

In Ryker, administrator, vs Vawter (117 Indiana, 425), it was held that a mortgage lien has preference over a
claim for costs of administration, funeral expenses, and expenses of last sickness.

In Pennsylvania, where judgment liens are not expressly subordinated to the statutory liens for funeral expenses
and the like, as is the case in this jurisdiction, the court said in Wade’s Appeal (29 Pa. St.,
328):jgc:chanrobles.com.ph

"It has been the uniform policy of our law to encourage the public ascertainment of liens, and to give him the
preference who first spreads his claim on the record, without regard to the date or the quality of the debt.
Accordingly those preferences created by our intestate laws in favor of funeral expenses, medical attendance,
&c., have never been permitted to postpone record liens . . . . It has been correctly said, and the observation
illustrates the policy of our lien laws, that a man dying the owner of ample real estate might have to be buried
at public expense as a pauper, if he had no personal property, and his realty was encumbered by liens to its full
value."cralaw virtua1aw library

For a general discussion of the doctrine see also 18 Cyc., 557, 558, 559, and cases there cited; Black on
Judgments, pp. 399, 401, 419, 443; Black on Insolvency, chaps. 20 and 30; The American Law of Administration,
Woerner, pp. 369, 371, 404, and 408.

Counsel for the appellant; in support of contentions contrary to these rulings, cites us to the following remark
made in the course of our opinion in the case of Peterson v. Newberry. (6 Phil., 260.)

"It has been said that the provisions of this article were wholly repealed by the enactment of the Code of Civil
Procedure, and it would appear that ’so far as this article is applicable to cases of bankruptcy and estates of
deceased persons it has been rendered obsolete as to the former by section 524, which repeals bankruptcy
laws; and repealed as to the latter by section 735, which gets forth the order of payment in the settlement of
such estates,’ but we are of opinion that its provisions- are not limited to such cases and that it remains in full
force and effect when by intervention or otherwise a judgment creditor is a proper party to distribution
proceedings of the funds or estate of his judgment debtor and duly asserts his right as a preferred
creditor."cralaw virtua1aw library

But it will be observed, first, that the language used clearly discloses that the court did not intend to make an
express holding oœ the propositions set forth in this quotation. The use of the introductory phrase — "and it
would appear that" — clearly indicated that the court did not desire nor intend to rule definitely upon the
propositions set forth in the quotation; second, that in the broad sense in which the quotation was used, article
1924 of the Civil Code was, in fact, repealed by section 735 of the Code of Civil Procedure with relation to the
distribution of the assets of estates of deceased persons. As shown above, all the provisions of subsections 1
and 2 of article 1924 are abrogated in that connection, and in their stead a new classification of debts due by
such estates is prescribed by the later statute; and, further, the debts mentioned in subsection 3 of article 1924
are subordinated under the new statute, not to the two classes of indebtedness set forth in subsections 1 and 2
of article 1924 of the Civil Code, but to the first five classes of indebtedness contained in the classification set
forth in section 735 of the new Code of Civil Procedure; and, third, that to far as the broad general proposition
set forth in the citation from the former opinion may properly be said to be subject to exceptions not there
mentioned, it must be deemed to be modified by our ruling in this decision. An examination of the former
opinion clearly disclosed that the remarks in the course of which the quotation was introduced were mere
obiter dicta, not absolutely necessary to the adjudication of the issues raised by the former appeal, and, as
such, not binding upon us in the present case, wherein we have been compelled to examine the precise
nature and effect of the enactment of sections 735 and 736 of the Code of Civil Procedure with relation to the
provisions of subsection 3 of article 1924 of the Civil Code. The ruling in the former case was not that the later
statute had repealed the former statute, but that, although it appeared to be true that with relation to the
distribution of the assets of the estates of deceased persons the later statute had worked a repeal of the
provisions of the earlier statute, nevertheless such repeal had no effect upon the disposition of the case then
under consideration, in which the debtor was still living. As we have shown in this opinion, while it is true as a
general proposition that the enactment of the later statute worked a repeal of the former statute, nevertheless,
when we come to consider the precise scope and effect of the repeal, the general statement must be
qualified in the manner and form hereinbefore indicated.

What has been said as to the scope and effect of the provisions of sections 735 and 736 of the Code of Civil
Procedure makes it clear that the judgment entered in the court below should be affirmed with the costs of this
instance against the Appellant. It is so ordered.

Arellano, C.J., Torres, Trent and Araullo, JJ., concur.

Johnson, J., did not take part.


Separate Opinions

MORELAND, J., dissenting:chanrob1es virtual 1aw library

This case, together with that of Kuenzle & Streiff v. Villanueva (p. 611, post), shows to what extent the court has
gone in extending the operation of the preference. Twice, in my humble judgment; the Legislature has
attempted to destroy the preference or limit its application; and as often the Supreme Court, if I read its
decisions correctly, has not only maintained it in its original position but has enlarged its scope and influence.
While, as I interpret the statutes, the Legislature has been trying to destroy or limit the application of the law of
preferred credits, the court has, in my opinion, not only refused to permit its destruction or limitation but has, by
its decisions, so extended its operation and effect as to have changed the essential nature of the preference.
Although the Legislature has made several attempts to destroy or to limit, nevertheless, the fact remains that,
under the decisions of the court, the so-called preference occupies a larger field than ever before.

As we saw in the dissenting opinion in the case of Kuenzle & Streiff v. Villanueva, above cited, the law of
preference, so often spoken of by the court in its various opinions, is nothing more or less than a law regulating
the order in which credits or claims against a given insolvent debtor shall be paid- We also saw, in that case,
that, generally speaking, there are two kinds of preferred credits: (1) Those which refer to and are a charge
upon specified property, real or personal, clearly described and identified in the instrument recognizing or
creating, the credit, and expressly charged therein with an incumbrance or lien to secure the payment of the
credit; and (2) those which do not affect property of any kind; i. e., those in which the instrument recognizing or
creating the obligation does not describe or even refer to property of any kind; which do not expressly or
impliedly charge or incumber property; which by their express terms create or recognize a personal obligation
only.

In the first class the property is, in legal effect, incumbered — has a lien upon it which follows it wherever it may
go. The creditor has an interest in the property itself. When the instrument creating this class of credits is duly
registered or recorded as required by law, both as to time and place, the debtor cannot transfer the property
free from the charge. All persons dealing with it, by purchase or otherwise, do so subject to the rights of the
person holding the incumbrance.

There is nothing of this in the second class. There is no charge on property. No property of the debtor is affected
in any way. The creditor has absolutely no interest in the debtor’s property. None of his property is even
mentioned in the obligation. Notwithstanding the creation of a credit belonging to this class, the debtor may
dispose of or incumber any of his property or all of it as fully and as freely as if no such obligation existed. He is
entirely free in this regard; and all persons dealing with his property do so in absolute security.

It is obvious from the foregoing that, while the credits falling in the second class are really preferred credits, that
is, preferences in the strict sense of the term, those within the first class are not only preferences but are much
more than preferences. They are charges, liens, incumbrances on specific property. They are, in the main, the
charged liens or incumbrances which American and English law everywhere recognizes and which all
American and English lawyers recognize at a glance. (See dissenting opinion in the Kuenzle & Streiff case.) They
have a dual character. They are not only an incumbrance on the property, but the debt which the
incumbrance secures is, from the standpoint of the creditor, a preferred credit. That fact, however, that the
credit is a preferred one adds nothing, in reality, to the value of the incumbrance as such. The property itself is
always subject to the payment of the obligation; and it can be seized and sold for that purpose by the creditor.
Indeed, under the Philippine law, that is the only source from which it can be paid in the first instance. But this is
so by virtue of the lien or charge and not by virtue of the preference strictly so called. All that the law of
preferred credits, as found in the Civil Code, does is, in case of the insolvency of the debtor (we have seen in
Kuenzle &; Streiff v. Villanueva that the law of preferred credits as set out in the Civil Code was a part of the
general bankruptcy law and operated exclusively in bankruptcy cases), to furnish a method of paying the
obligation without requiring the creditor to foreclose his lien. By virtue of express provisions (Civil Code, articles
1926, 1927, 1928, 1929) the fund obtained from the sale in bankruptcy proceedings of the incumbered
property, which was gold separately and by virtue of the lien although without a real foreclosure, was set aside
by the assignee in bankruptcy and held for the satisfaction of the obligation to secure the payment of which
the property was incumbered; and the obligation must be paid out of that fund. That method of paying the
incumbrance added nothing to the lien which already existed. It gave it no new elements and conferred no
new privileges on the holder. That this is so is clear not only from what has already been said but also from the
fact that it is provided (article 1928, last par., Civil Code) that, where the property sold was insufficient to
discharge the obligation in full, the deficit "shall be paid . . . in the order and place pertaining thereto,
according to their respective characters;" and article 1929 says that those credits "which have a preference for
the amount not collected . . . shall be paid according to the following rules: (1) In the order established in
article 1924. (2) Those preferred by dates, according to their order, and those which have a common date, pro
rata. . . ." That is to say, that if the property charged is insufficient to satisfy the incumbrance, the residue shall
not constitute a credit payable out of other property of the debtor ahead of every other creditor, but shall be
paid in accordance with the provisions of article 1924 which deals exclusively with credits which have no
relation to and in no way affect and of the property of the debtor. The deficit is regarded as a credit and not
as a lien, and takes its place in the class of credits to which it belongs by virtue of its nature as a credit. If it
appeared in a public document it fell within subdivision A of paragraph 3 of article 1924; if it had been reduced
to a judgment it fell in subdivision B of paragraph 3 of that article, and so on.

It is, therefore, clear that the essential element of the credits of the first class is the lien or incumbrance on
specific property; and that the preference given to it as such is, substantially speaking, valueless; while, if we
may be allowed the expression, the essential characteristic of the second class is the entire absence of a lien,
charge or incumbrance on property — the fact that it does not affect property at all. I bring out the
fundamental difference between the two classes of preferred credits, in order to lay the foundation of the
criticism which I shall make of the decision in this case. When these distinctions are clear the error of the court in
giving a credit which does not affect property the same value and legal effect as one that constitutes a
charge on specific property, and the grave results necessarily following such a fundamental error, are evident
This distinction brings out with a clearness especially striking the impossibility, legally speaking, of giving, as the
court in this and the Kuenzle & Streiff case has given, to the credits of the second class that attribute which is so
essentially and distinctively an attribute of the first, namely, the quality of charging or incumbering property. For,
certain it is that, if the deficit resulting from the application of the property to pay the incumbrance in the first
class takes the same position with respect to the debtor’s other property as credits of the second class, as it
does under articles 1928 and 1929, the credits of the second class cannot be equal to credits of the first class as
originally constituted. They are equal to the deficit only; and the deficit has lost the essential and distinctive
element of the original credit, namely, the lien, the interest in the specific property charged. Nevertheless, the
court, in this and the Kuenzle & Streiff case, gives the credits of the second class precisely the same attributes
and qualities as those of the first class — that of "affecting" or charging specific property to the extent of
supplanting other liens on the same property.

We have seen, in the dissenting opinion in the Kuenzle & Streiff case, how the decision resulted in a
fundamental modification, if not a partial destruction, of both the attachment and the preferred credit as they
had theretofore been known. The decision in the present case goes still further. It not only reiterates the
principles enunciated in the former but declares that credits of the second class are not alone charges on
specific property of the debtor, although the instrument creating or recognizing the debt refers to and charges
the payment of the debt on no property whatever, but declares that all the property of the debtor is, in effect,
pledged as security for the payment of the credit. Not only this: it again refuses to permit An Act of the
Legislature (section 735, Code of Civil Procedure) to operate in the very field which, in my humble opinion, it
was intended to occupy and thereby repeals it pro tanto. Ordinarily it is useless to make an argument to
demonstrate the difference between a credit which, by its very definition, is a charge on specific property, and
one which by its very definition is not a charge on any property, specific or otherwise. But the court having
again declared them to be in their main features the same, I have found it necessary in his opinion to adduce
additional reasons against confounding the two credits.

The facts of this case are these: Mariano Maronilla died owing a number of debts. His property was insufficient
to pay them. Both Smith, Bell & Co., appellant, and Venancio Cavada Diaz were creditors. On the settlement
of the estate, in view of the fact that decedent’s property was not sufficient to pay both Smith, Bell & Co. and
Diaz in full, there was engendered a controversy between them as to which was entitled to be paid first. The
probate court found that Cavada Diaz should be first paid; and the Supreme Court affirms that order. Both
decisions are based exclusively and solely upon the provisions of the Civil Code dealing with preferred credits
and not on section 735 of the Code of Civil Procedure, it having been held not applicable.

My contention is that the Civil Code has nothing to do with the determination of the question presented as the
Code of Civil Procedure is applicable and governs. Chapters 29 to 41 of the Code of Civil Procedure have to
do with the estates of deceased persons and contain not only the procedural but the substantive law covering
every phase of the administration of such estates from the probate of the will or the application for the
appointment of an administrator to the final judicial settlement. Among the many chapters is found that
dealing with the "Payment of Debts," Chapter 38. This chapter contains 15 sections all touching the payment of
the debts of the decedent. Section 734 requires that, if the property is sufficient, the debts must be paid in full.
Sections 735 provides for those cages where the estate is insolvent and is as follows:jgc:chanrobles.com.ph

"If the assets which can be appropriated for the payment of debts are not sufficient for that purpose, the
executor or administrator shall, after paying the necessary expenses of administration, pay the debts against
the estate in the following order:jgc:chanrobles.com.ph

"1. The necessary funeral expenses;

"2. The expenses of the last sickness;

"3. Debts due to the United States;

"4. Taxes and assessments due to the Government, or any branch or subdivision thereof;

"5. Debts due to the province;

"6. Debts due to other creditors."cralaw virtua1aw library

Section 736 also provides:jgc:chanrobles.com.ph

"If there are not assets sufficient to pay the debts of any one of the aforesaid classes, after paying the
preceding ones, each creditor within the class for which there are not sufficient assets for payment in full, shall
be paid a dividend in proportion to his claim. No creditor of any one class shall receive any payment until those
of the preceding class are paid."cralaw virtua1aw library

The court has refused to apply these sections to the case at bar holding that the provisions of the Civil Code
relating to preferred credits govern. I contend that this is error; that it is a repeal of the sections quoted; and is
an extension of the provisions of the Civil Code far beyond their plain meaning.

What is the reason given by the-court for refusing to apply sections 735 and 736 of the Code of Civil Procedure?
It is simply this: That the credit of Diaz is a lien, a charge, an incumbrance, on all the property of the common
debtor, while that of Smith, Bell & Co. is not, and that the sections mentioned do not refer to or include credits
secured by incumbrance or charge. Why does, the court hold that Diaz’s credit is one secured by an
incumbrance or charge on property? Simply and solely because his credit appears in public document. That
this is the position is clear. It is shown in every line of the opinion and the nature of the question involved in the
suit permits no other conclusion. The court says in the opinion:jgc:chanrobles.com.ph

"We are of opinion, however, that the classification and order of payment set out in section 735 was intended
to include merely debts against the estate not otherwise secured and not to include debts otherwise secured,
except perhaps in so far as the security proves to be insufficient to secure payment in full; and that it was not
the legislative intent to prescribe that the death of a debtor will deprive his creditor of any existing security he
may have had by way of lien or preference.

"But it is said that the language of the statute contains no exception in favor of debts secured by lien or
preference, and that the court should not read such an exception into the statute.

"To this we answer: 1st. That the language of the statute must be construed with relation to the subject matter
with which it deals, and it is evident that it was intended only to deal with assets of the estate which (in the
opening language of section 735) ’can be appropriated for the payment of debts;’ and assets affected by
liens or duly asserted preferences cannot properly be said to be ’available’ for the payment of debts, at least
so far as a particular creditor has a right to have them applied to the payment of a particular claim against the
estate; and, that it is very clear that the sixth class of debts does not include all the debts due by the deceased,
for provision is expressly made elsewhere in the code for the enforcement of mortgage debts, wholly
independent of the classification of the debts mentioned in section 735; and, 3d, that, by extending the
meaning of the word debts, as used in sections 735 and 736 of the code, so as to include all debts secured by
liens or asserted preferences, and thus destroy all such liens or preferences, we would impute to the legislator
the wholly unreasonable, unjust and oppressive intent to deprive the creditors of the deceased of acquired
rights in and to their debtor’s property by virtue of the mere fact of the death of the debtor.

"No valid or sufficient reason has been suggested which would justify or necessitate the enactment of a
statutory rule, depriving a creditor by the mere death of his debtor of an acquired statutory preference
securing a duly recorded judgment; or a mechanic’s claim for services rendered or the claim of a vendor of
specific property for the purchase price; or a credit for transportation; or a credit for agricultural advances; or
for rents; or the like. On the contrary, to expose the security upon which such credits are made to the risk of the
debtor’s death would tend very substantially to destroy the very purpose for which the law authorizes or
prescribes the creation of such preferences.

"We conclude therefore that the enactment of sections 735 and 736 of the new Code of Civil Procedure was
not intended to destroy or affect, and that it does not destroy or affect any recorded or statutory liens or
preferences. affecting property at the time of the death of the owner, save only that the statutory preferences,
which formerly attached to such property on the death of the owner in the order set out in subsections 1 and 2
of article 1924 of the Civil Code, are abolished and replaced by the statutory preferences created in
subsections 1, 2, 3, 4, and 5 of section 735 of the Code of Civil Procedure.

"It follows that mortgage liens and the like, and the statutory preferences which have attached to specific
property of a debtor at the time of his death, are in no wise affected by the classification in section 735 of the
Code of Civil Procedure of ’assets which can be appropriated for the payment of debts’ in the event of the
insolvency of the estate of a deceased person, and may be asserted and enforced without reference to that
classification; and that statutory preferences securing the payment of debts evidenced by ’public instruments’
and ’final judgments’ affecting the property of the deceased at the time of his death under the provisions of
subsection 3 of article 1924 of the Civil Code, continue in full force and effect; but subordinated, in the order of
classification for payment, to the preferences established in subdivisions 1, 2, 3, 4, and 6 of section 735 of the
Code of Civil Procedure, in like manner to that in which they were subordinated to the preferences arising at
the death of the debtor established in subsections 1 and 2 of article 1924 of the Civil Code, before those latter
statutory preferences were abolished and the preferences mentioned in 1, 2, 3, 4, and 5 of the Code of Civil
Procedure substituted in their place."cralaw virtua1aw library

This quotation tells the whole story. It is an argument directed against the application of the Code of Civil
Procedure to the case at bar based exclusively on the theory that Diaz’s credit is a secured credit, secured by
an incumbrance or lien on all of the decedent’s property, and that sections 735 and 736 of the Code of Civil
Procedure do not refer to debts secured by incumbrance or charge. This being so it is clear that, if the "public
document" in which the credit of Cavada Diaz appears is not a lien or incumbrance on the property of the
decedent, the whole argument of the court is baseless and falls. Let us see what this public document is which
the court declares to be an incumbrance not on any specific property but on all, on the general, property of
the decedent. It appears from the record that, in the year 1904, the common debtor, Mariano Maronilla, gave
a mortgage to the defendant Diaz on a specific parcel of land to secure the payment of a debt of P6,200. The
debtor died in 1908 still owing the debt. An administrator was duly appointed. In 1910, the mortgage was
foreclosed, and the mortgaged land sold. There remained a deficiency of P7,889.50. This sum, with interest
added, is the claim presented by Diaz in this case, and this is the debt which this court holds takes precedence
over the debt owing to Smith, Bell & Co. because it is evidenced by a public document.

The claim of preference by Diaz is not based on a judgment for the deficiency. So far as the record shows,
there was none. But if there were it would not alter the situation as this court has held on several occasions that
a judgment is not a lien on property but, like debts recognized in public documents, falls within article 1924 of
the Civil Code. (See cases cited in the Kuenzle & Streiff case.) Nor is it based on the mortgage as a lien or
incumbrance. On the contrary, it is founded exclusively in the fact that the mortgage instrument executed in
1904 recognized the debt; that the mortgage instrument was a public document; and that, therefore, the debt
in question is one evidenced by a public document and falls within article 1924, paragraph 3, subdivision A, of
the Civil Code, which gives it preference over a debt, like that of Smith, Bell & Co., which has no element which
entitled it to preference, it falling within article 1925.

Starting, then, with the fact that the claim of Cavada Diaz against the decedent is simply the amount of the
deficiency arising on the foreclosure of a mortgage, let us see what position the court has placed itself in by
holding that such a claim is a lien or charge on the decedent’s property, and, for that reason alone, does not
fall within the provisions of sections 735 and 736 of the Code of Civil Procedure, but is governed by article 1924
of the Civil Code, and must, therefore, be paid ahead of the claim of Smith, Bell & Co.

To begin with, we have in this case the unique holding that a deficiency arising from a mortgage foreclosure is
almost not quite as good security as the mortgage itself. As I have already shown the court gives as the only
season for not applying sections 735 and 736 to the case at bar and thereby treating both claims alike that
they do not apply to "statutory liens or preferences affecting property at the time of the death of the owner"
and "that statutory preferences securing the payment of debts evidenced by ’public instruments’ . . . affecting
the property of the deceased at the time of his death, under the provisions of subsection 3 of article 1924 of the
Civil Code, continue in full force and effect." This being so it necessarily follows that the deficiency, that is, the
claim of the defendant Diaz in this case, is a lien, a charge, in short, an incumbrance on the property of the
deceased; for if it were not sections 735 and 736 of the Code of Civil Procedure would be applicable and the
two claims would be on precisely the same footing, the only reason given by the court for holding them
inapplicable being that they do not include debts secured by a lien or incumbrance. Accepting what the
court says, it is an unavoidable conclusion that the deficiency resulting from, a mortgage foreclosure is a
charge on the property of the debtor — an incumbrance which secures the payment of the deficiency ahead
of the other debts of the decedent.

And starting as this doctrine as stated is, the strangest part is still before us. Not only does the court hold that the
deficiency is an incumbrance, but it also holds that it is an incumbrance on all the property of the deceased. It
is not, like the mortgage itself, a charge on a specified piece of property, but it is a charge on all the property
of the decedent, of every kind, nature, and description. It is not, like the mortgage, a charge on real property
exclusively, but is one which covers personal property as well — everything that the decedent owned at the
time of his death is covered by this strange thing which the decision of the court has brought into existence;
and so thoroughly does it cover everything and with such effect, that every other claim must give way to it.

What is a deficiency that it produces such astonishing results? It is not the mortgage given to secure the debt of
which the deficiency is a part. The mortgage was extinguished and disappeared when it was foreclosed and
the land on which it was a charge sold. It no longer exists. Is this deficiency an instrument? No. Did anybody sign
or execute it? No. Does it describe land or property of any kind? No. Does it charge land or property of any
kind? No. What is it then? Why, it is simply a debt; simply a personal obligation, having not the remotest relation
or connection with property of any kind. How, then, does it become a charge, a lien, an incumbrance on
property so as to take precedence over other person obligations of the decedent? And especially, how can it
be an incumbrance on all the property of the debtor? I do not know. I could not understand why in the case of
Kuenzle & Streiff v. Villanueva, above, and I cannot understand why in this case. If it were a lien, a charge, or
incumbrance on property, it could be foreclosed on failure to pay, could it not? Certainly. Can this deficiency
be foreclosed? Of course not. If it were a lien or incumbrance, the debtor could not sell his property free and
clear of the lien or incumbrance, could he? No. But can the debtor, as matter of fact, sell his property
regardless of the lien or incumbrance of the deficiency and give a good title to the purchaser? Certainly he
can. To be legally effective as a lien or incumbrance it would have to be registered or recorded and public
notice thereof given as required by law, would it not? Yes. But as a matter of fact, is the deficiency registered or
recorded and public notice thereof given as required by law? No. Is it notice, then, to any body of anything?
No. Well if it lacks every known element and characteristic of a lien or incumbrance, how can it be a lien or
incumbrance? I do not know. The court says it is; but I do not know why. I did not understand why in the case of
Kuenzle & Streiff v. Villanueva and I do not understand why in this case. Has the court ever decided heretofore
whether an ordinary debt recognized in a public instrument, or a judgment even, is a lien or incumbrance? Yes,
several times. What did it hold? It held in each case that neither was. (See cases cited in Kuenzle & Streiff v.
Villanueva.) Why does not the court hold the same now? I do not know. I did not know in the Kuenzle & Streiff
case and I do not know in this case. In thus changing the doctrine did the court refer to the cases previously
decided? Some of them; and overruled them. (See majority opinion in the Kuenzle & Streiff case.) What reasons
did it give for overruling them? None.

If the sole reason given by the court for its refusal to apply section 735 of the Code of Civil Procedure fails, then
that section is applicable, is it not? Yes. Why, then, did the court not apply it? I can see no. reason why it did
not. But did not the court give a reason? It says it did; but I cannot, understand it. Why not? The reason it gives is
based wholly upon the same confusion between the so called preference which expressly charges or
incumbers specific property and the preference which by its very definition has no relation to or connection
with any property whatever, that is found and which I discussed in the Kuenzle & Streiff case; and such
confusion existing in the fundamental basis of the court’s position, it is impossible to accept the reasoning by
which the final conclusion is reached.
Do not sections 735 and 736 of the Code of Civil Procedure occupy the same field and cover the same subject
matter as article 1924 and corresponding articles, 1928 among them, of the Civil Code which the court applies
in this case? Yes. I have already shown that chapters 29 to 41 of the Code of Civil Procedure deal with the
estates of deceased persons in every aspect and in every relation; and that, among those chapters, is chapter
28 which has to do with the payment of the debts of a decedent, whether the estate be solvent or insolvent. I
have also shown that section 735 of that chapter treats expressly and exclusively of the order in which debts
shall be paid when the estate is in- solvent. But, when a later statute occupies the same field and covers the
same subject-matter as prior statutes, does not the later repeal or substitute the prior? Yes. Why then, did the
court not hold that the provisions of the Code of Civil Procedure repealed or substituted like provisions in thru
Civil Code? It did not do so, as I have before stated, for the false reason that the debt in the case at bar was a
secured debt and that section 735 did not apply to secured claims. Why is that reason not sound? I have
already given one reason why it is not, namely, that the debt in question is not a secured debt. Is there no other
reason? Yes, several. One is that, even if we admit that it is a secured debt, the court is in no better position
than before the admission as the Code of Civil Procedure has provisions fully and specifically covering the
payment of secured debts, which take the place of like provisions of the Civil Code. Then these latter are
repealed also? Yes. The Code of Civil Procedure covers fully and completely every case that can possibly arise
with respect to the estate of a deceased person from the moment of his death to the final judicial settlement
thereof; and, as a necessary consequence, all prior laws dealing with the same subject-matter are repealed. Is
there any other reason? Yes. The court is in serious error in making a distinction between the payment of
secured debts and payment of unsecured debts. Why? Because neither of the Code of Civil Procedure nor the
Civil Procedure nor the Civil Code makes such distinction. All debts paid in pursuance of section 734 and 735
are unsecured debts. All secured debts pay themselves out of the property charged for such purpose. If the
property so charged pays the incumbrance in full, that is all there is to it. If it is insufficient and there is a
deficiency, such deficiency is an unsecured debt against the estate. Where is that law found? Section 708 of
the Code of Civil Procedure provides:jgc:chanrobles.com.ph

"A creditor holding a claim against the deceased, secured by mortgage or other collateral security, may
abandon the security and prosecute his claim before the committee, and share in the general distribution of
the assets of the estate; or he may foreclose his mortgage or realize upon his security, by ordinary action in
court, making the executor or administrator a party defendant; and if there is a judgment for a deficiency,
after the sale of the mortgage premises, or the property pledged, in the foreclosure or other proceeding to
realize upon the security, he may prove his deficiency judgment before the committee against the estate of
the deceased; or he may rely upon his mortgage or other security close, and foreclose the same at any time,
within the period of the statute of limitation, and in the that event he shall not be admitted as a creditor, and
shall receive no share in the distribution of the other assets of the estate; but nothing herein contained shall
prohibit the executor or administrator from redeeming the property mortgaged or pledged by paying the debt
for which it is held as security under the direction of the court, if the court shall adjudge it to be for the best
interest of the estate that such redemption shall be made."cralaw virtua1aw library

Under this section it is clear that a secured creditor has one of three courses to follow: (1) He may abandon his
security and share in the general distribution. In that case his debt is unsecured debt. (2) He may foreclose his
security and present and prove the deficiency before the commissioners as any other claim is presented and
proved. In such case the deficiency is an unsecured debt. The sum which he receives from the sale of the
property incumbered is not considered as paid on a debt under section 734 or section 735. He simply takes the
property under the incumbrance and pays himself with its value. (3) He may rely exclusively on his security and
waive his right to be "admitted as a creditor." In such case he presents no claim.

It is thus clear that a secured claim is not considered in the first instance as a debt against the estate. The
creditor has to make it such by his own act. But the instant he makes it such it ceases to be a secured debt,
and becomes an unsecured debt payable are all others. It will be observed that the subject of secured claims
is not dealt with by the Code of Civil Procedure in the chapter relating to "claim against the estate" or in that
which deals with "payment of debts;" but in the one treating of "suits by and against executor and
administrator." A secured debt is not considered a debt against the estate but one against the property
incumbered. It becomes a claim against the estate only by virtue of the affirmative act of the creditor; and
when he acts and thereby makes it a claim against the estate, it is, by that very act, reduced to the status of
an unsecured debt. (Section 708 above.)

Is it not, then, a necessary conclusion that sections 734 and 725 cover every claim which, under the law, can
possibly be presented against an estate, whether it be called a secured or unsecured claim? Absolutely every
one. Then there is no provision of law whereby a secured claim can be presented against an estate? None
whatever. In order to be a claim presentable to the estate it must lose its character as a secured claim. Only
unsecured claims can be presented against an estate under the law. So that section 735 covers every possible
claim that can be presented against an estate? Absolutely every one. But if it covers every possible claim, how
can the court say that it does not cover secured claims? It cannot legally say so. It so decides by reason of the
distinction between secured claims and unsecured claims, without realizing that there is no justification in law
for such a distinction, and that it is, therefore; wholly unfounded. But, suppose it was well-founded; what would
be the result? The result would be the same. As I have already shown, section 708 and other sections of the
Code of Civil Procedure fully and completely cover the payment of secured debts — admitting for the
moment that secured claims are really considered debts — as fully and completely as the court admits that
sections 734 and 735 cover the payment of unsecured debts. That being so they repeal all prior provisions
covering the same subject-matter. The court admits that, if the claim at bar were an unsecured claim, it would
be covered by section 735 and would have to be paid in accordance with its provisions as it repeals all
provisions of the Civil Code relating to that subject. But if section 708 and other sections deal as fully and
completely with the payment of secured debts as section 735 does with the payment of unsecured debts, and
if section 735 deals so fully with unsecured debts as to repeal all prior provisions of the Civil Code in the same
subject, why does not section 708 repeal all provisions of the Civil Code dealing with secured debts? It does
unquestionably.

As with the Code of Civil Procedure so with the Civil Code. Under the latter a secured credit was not
considered, in real sense, a debt against the estate of the deceased debtor. The property charged with the
payment of the debt was considered the property of the creditor to the amount of his claim; and he must look
to it first of all for payment. It was only when the property was insufficient to pay the debt that it became a
claim against the estate, and then only to the extent of the deficiency. All of the provisions of the Civil Code as
well as the Code of Civil Procedure relating to the payment of debts against the estate refer to unsecured
debts only. The court has, therefore, made a distinction between the Civil Code and the Code of Civil
Procedure where none exists. They are in all essential respects the same so far as the payment of unsecured
debts is concerned. They part company only in their provisions relating to the payment of deficiencies. The
Code of Civil Procedure declares that a deficiency arising on the foreclosure of a lien is a common debt with
no preference of any kind over the other debts of the deceased debtor; while the Civil Code declares that the
deficiency in such case is not a common debt but is entitled to a preference by virtue of having been
recognized in a public instrument, etc. Where the court errs so strongly is in claiming that the deficiency is still a
secured debt. It was only that portion of the debt actually paid from the proceeds of the foreclosure that was
secured. The balance, by the very nature of things, was not secured. Moreover, the security disappeared with
the foreclosure. That is precisely what was foreclosed and, by the foreclosure, extinguished. The security having
become extinguished it is nonsense to say that the deficiency still remains a secured debt. What secures it?

It necessarily follows that sections 735 and 736 repeal article 1924 and related articles of the Civil Code and
should be applied in this case.

Had not the Supreme Court, prior to the decision in this case, expressed an opinion as to whether section 735
repealed those provisions of the Civil Code which the court applies in this case? Yes. In what case, and what
did it say? In the case of Peterson v. Newberry (6 Phil., 260). At page 262 the court, speaking by Mr. Justice
Carson, said with respect to the status of article 1924 of the Civil Code, the very article which the court applies
in this case:jgc:chanrobles.com.ph

"It has been said that the provisions of this article were wholly repealed by the enactment of the Code of Civil
Procedure, and it would appear that ’so far as this article is applicable to cases of bankruptcy and estates of
deceased persons it has been rendered obsolete as to the former by section 524 which repeals bankruptcy
laws, and repealed as to the latter by section 735, which sets forth the order of payment in the settlement of
such estates. . . .’"

One paragraph of the head notes to that case reads:jgc:chanrobles.com.ph

"While article 1924 of the Civil Code was repealed by the enactment of the Code of Civil Procedure in so far as
it is applicable to cases of bankruptcy and estates of deceased persons, its provisions are not limited to such
cases and it remains in full force and effect when by intervention or otherwise a judgment creditor is a proper
party to distribution proceedings of the funds or estate of his judgment debtor and duly asserts his rights as a
preferred creditor."cralaw virtua1aw library

Judge, Willard in his "Notes to the Spanish Civil Code" expresses the same opinion, the quotation in the portion
of the opinion of the court just set forth being the language used by him.

Why has the court changed its opinion on this question? I do not know. Does it not give a reason or reasons for
so doing? Not what I consider a reason. If the court did not intend to have it understood that it held squarely
that section 735 repealed article 1924 of the Civil Code why did it include that declaration in the head notes as
one of the propositions decided by the court in that case? I do not know. The court is silent on that subject.

Did the court, prior to the decision in this case, express its opinion on this subject on any other occasion? In the
case of Santos v. Manarang (27 Phil., 209), the court at page 216, Mr. Justice Trent writing the opinion, speaking
of the debts of a decedent, said:jgc:chanrobles.com.ph

"In case his estate is sufficient they must be paid. (Sec. 734, Code Civ. Proc.) In case the estate is insolvent they
must be paid in the order named in section 735."cralaw virtua1aw library

Was article 1924 of the Civil Code forgotten or overlooked in that case or was it thought to be repealed?

That the court in this case ignored the difference between a secured debt and an unsecured debt, between a
mortgage and the debt which it secures, between a pledge and a naked promise to pay, between security
and no security, is clear from the quotation made from the opinion. Persisting in ignoring this difference the
court has in this case declared that the two great classes of preferences are substantially the same in that both
charge and incumber property. In spite of the fact that the debt under consideration is a mere unsecured
personal promise to pay, note the confusion which exist in the following paragraph between a secured and an
unsecured claim, and between that class of preference in which there is an incumbrance, a charge on
specific property and that class where there is no such charge or incumbrance but a personal obligation
only:jgc:chanrobles.com.ph

"No valid or sufficient reason has been suggested which would justify or necessitate the enactment of a
statutory rule, depriving a creditor by the mere death of his debtor of an acquired statutory preference
securing a duly recorded judgment; or a mechanic’s claim for services rendered; or the claim of a vendor of
specific property for the purchase price; or a credit for transportation; or a credit for agricultural advances; or
for rents; or the like. On the contrary, to expose the security upon which such credits are made to the risk of the
debtor’s death would tend very substantially to destroy the very purpose for which the law authorizes or
prescribes the creation of such preferences."cralaw virtua1aw library

The mere preferences given by article 1924 of the Civil Code is here put on precisely the same footing as a lien
or charge on specific property created by articles 1922 and 1923 of the same code; whereas they are as
distinct and different as language can make them. Let me quote these articles so that we may have them
before us. They deal with the classification of credits:jgc:chanrobles.com.ph

"ART. 1922. With regard to specified personal property of the debtor, the following are
preferred:jgc:chanrobles.com.ph

"1. Credits for the construction, repair, preservation or for the amount of the sale of personal property which
may be in the possession of the debtor to the extent of the value of the same.

"2. Those secured by a pledge which may be in the possession of the creditor, with regard to the thing pledged
and to the extent of its value.

"3. Those guaranteed by a security of goods or securities constituted in a public or commercial establishment
with regard to the security and for the value of the same.

"4. Credits for transportation, with regard to the goods transported, for the amount of said transportation,
expenses and rates of carriage and preservation, until the time of the delivery and for a period of thirty days
afterwards.

"5. Expenses of boarding with regard to the personal property of the debtor remaining in inns.

"6 Credits for seeds and expenses of cultivation and harvesting, advanced to the debtor, with regard to the
fruits of the crops to which they were applied.

"7. Credits for rents and leases for one year with regard to the personal property of the lessee existing on the
estate leased and on the fruits thereof.

"If the personal property, with regard to which the preference is allowed, has been surreptitiously removed, the
creditor may claim it from the person who has the same, within the term of thirty days counted from the time it
was so removed.

"ART. 1923. With regard to determined real property and property rights of the debtor, the following are
preferred:jgc:chanrobles.com.ph

"1. The credits in favor of the State, with regard to the property of taxpayers for the amounts of the last annual
assessments, due and not paid, of the taxes which burden the same.

"2. The credits of insurers, with regard to the property insured, for the insurance premium for two years, and
should the insurance be mutual for the last two dividends declared.

"3. Mortgage and agricultural credits (refaccionarios) entered and recorded in the registry of property, with
regard to the property mortgaged, or which has been the object of the agricultural loan (refaccion).

"4. Credits, of which a cautionary notice has been made in the registry of property by virtue of a judicial
mandate, by reason of attachments, sequestrations, or execution of judgments, with regard to the property
entered therein and only with regard to subsequent credits.

"5. Agricultural credits not entered nor recorded with regard to the real estate to which the agricultural loan
(refaccion) relates, and only with regard to other credits different from those mentioned in the four preceding
numbers.

"ART. 1924. With regard to the other personal and real property of the debtor, the following credits are
preferred:jgc:chanrobles.com.ph
"1. Credits in favor of the province or municipality for the taxes of the last year, due and unpaid, not included in
No. 1 of article 1923.

"2. Those due —

"A. For judicial expenses and those of administration of the bankruptcy for the common interest of the creditors,
made with the proper authorization or approval.

"B. For the funeral expenses of the debtor, according to the customs of the place, and also those of his wife
and of his children, under their parental authority should they have no property of their own.

"C. For expenses of the last illness of said persons, incurred during the last year, counted up to the day of their
death.

"D. For daily wages and salaries of employee domestic servants for the last year.

"E. For advances made to the debtor for himself and his family, constituted under his authority, in provision
clothing, or shoes for the same period of time.

"F. For income for support during the proceedings in bankruptcy unless they are based on mere beneficence

"3. Credits which without a special privilege appear —

"A. In a public instrument.

"B. In a final judgment, should they have been the object of litigation.

"These credits shall have preference among themselves according to the priority of dates of the instruments
and of the judgments.

"ART. 1925. Credits of any other kind or for any other consideration not included in the preceding article shall
have no preference."cralaw virtua1aw library

Most of the cases referred to in articles 1922 and 1923 are those of liens which are familiar to all students of the
common law. Some of them are, perhaps, peculiar to the Spanish law. But they are all with the exception of
the preferences mentioned in article 1924, liens, charges or incumbrances on specific property. They create in
favor of the creditors an interest in the property to which his credit relates. The property is expressly reserved to
the payment of the creditor and, in the first instance, to nothing else. The owner cannot, except by payment,
rid his property of the charge. It is an incumbrance which follows the ownership wherever it goes. The credit
enjoys what the Civil Code calls a "special privilege" with regard to the particular property to which it refers.
Now let us look at paragraph 3 of article 1924, which I mentioned; as an exception and which is the paragraph
which the court applies in the case before us for the purpose of proving that the credit is a secured credit, i. e.,
a charge or lien upon the debtor’s property and takes preference for that reason. That paragraph speaks, not
of credits which enjoy a "special privilege" with regard to "specified" property, i. e., the privilege of a lien or
incumbrance, but those which do not enjoy such a privilege. It says:jgc:chanrobles.com.ph

"3. Credits which without a special privilege appear —

"A. In a public instrument.

"B. In a final judgment, should they have been the object of litigation."cralaw virtua1aw library

Note that this is the very paragraph which the court applies in the case at bar, and is the very preference
which the court says is equal, in legal effect, to the charges and incumbrances created by articles 1922 and
1923. It is the thing which the court says is equal to a credit which has "special privilege with regard to the
specified property, both real and personal, although the express provision of the law is that it shall be "without a
special privilege" as to property of any kind. Whether the credit of Diaz be called "a final judgment" or a credit
which appears "in a public instrument," it still falls within paragraph 3 of article 1924, and, accordingly, is not a
charge or incumbrance on property. Therefore, when the court, in the paragraph of its opinion last quoted,
gives to Diaz’s credit the high-sounding title of a "duly recorded judgment," it added absolutely nothing to its
legal significance. And, besides, the phrase "duly recorded judgment" is not only meaningless, but misleading,
when applied to the credits at bar as there is no law of the Philippine Islands providing for the "recording" of
money judgments, no law permitting such judgment to be recorded, no place provided in which they may be
recorded and no law giving the recording of such a judgment any effect whatever. A money judgment in the
Philippine Islands has absolutely no effect on property. That has been held uniformly by this court. (Rubert &
Guamis v. Luengo & Martinez, 8 Phil., 554; Molina Salvador v. Somes, 31 Phil., 76; Peterson v. Newberry, 6 Phil.,
260.) It is simply a credit "without a special privilege" (Par. 3, article 1924) as to property. Indeed, as a credit it is
inferior to one which appears "in a public instrument," which has never even been sued upon. How much more
inferior must it be to those credits mentioned in the preceding articles which are charges and incumbrances on
specified property either real or personal? How then, is that portion of the opinion of the court justified which
maintains that the credit mentioned in paragraph 3 is a secured credit?

Let us now look at those articles of the Civil Code immediately following those governing the classification of
credits — those which relate to the order of payment of credits;

"ART. 1926. Credits which enjoy preference with regard to certain personal property exclude all the others to
the extent of the value of the personal property to which the preference refers.

"When two or more creditors claim preference with regard to certain personal property, the following rules shall
be observed as to priority of payment:jgc:chanrobles.com.ph

"1. Credits secured by a pledge exclude all others to the extent of the value of the thing given in pledge.

"2. In case there is a security, should the latter be legally constituted in favor of more than one creditor, the
priority between them shall be determined by the order of the dates of the execution of the guaranty.

"3. Credits for advances for seeds, expenses of cultivation, and harvesting, shall be preferred over those for
rents and leases, with regard to the fruits of the crop for which they were incurred.

"4. In all other cases the value of the personal property shall be distributed pro rata among the credits which
enjoy special preference with regard to the same property.

"ART. 1927. Credits which enjoy preference with regard to certain real property or property rights exclude all
others for their amounts to the extent of the value of the real estate or property rights to which the preference
refers.

"If two or more credits affecting certain real property or property rights should concur, the following rules shall
observed with regard to their priority:jgc:chanrobles.com.ph

"1. Those mentioned in Nos. 1 and 2 of article 1923 shall be preferred, according to their order, to those
included n the other numbers of the same article.

"2. Mortgages and agricultural credits entered or recorded, mentioned in No. 3 of said article 1923, and those
included in No. 4 of the same, shall enjoy priority among themselves according to the priority of the respective
entries or record in the registry of property.

"3. Agricultural credits not recorded or entered in the registry, referred to in No. 5 of article 1923, shall enjoy
preference among themselves in the inverse order of their priority.

"ART. 1928. The residue of the estate of a debtor, after the credits which enjoy preference with regard to certain
property, personal or real, have been paid, shall become part of the free property which he may possess for
the payment of the other credits.

"Those which enjoy preference with regard to certain property, personal or real, and which should not have
been totally paid with the amount of such property, shall be paid with regard to the deficit in the order and
place pertaining thereto, according to their respective characters.

"ART. 1929. Credits which have no preference with regard to certain property, and those which have
preference for the amount not collected, or when the right of preference should have prescribed, shall be paid
according to the following rules:jgc:chanrobles.com.ph

"1. In the order established in article 1924.

"2. Those preferred by dates, according to their order, and those which have a common date, pro rata.

"3. Common credits, referred to in article 1925, without consideration of their dates."cralaw virtua1aw library

These articles, constituting chapter third of the Civil Code, may be studied, so far as the case at bar is
concerned, with two purposes. In the first place, they deal with the order of payment of the debts of a person,
dead or alive in this connection they cover the same ground as sections 734, 735, and 736 of the Code of Civil
Procedure, and also those provisions of that code which have to do with the payment of secured obligations,
notably section 708. This fact presents the reason why I maintain that the sections of the Code of Civil
Procedure referred to repeal the articles of the Civil Code quoted.

In the second place, these articles show affirmatively and expressly that the credit in the case under
consideration is not a secured claim as the court holds it to be, or one which "affects" any property of the
debtor, as the court holds it does. Article 1927 provides for and gives the order in which credits shall be paid
"which have no preference with regard to specified property." That is, it provides the order of payments of
credits which are not secured. All the articles of chapter third which immediately precede article 1929, deal
with secured credits — those which are a charge on the property of the debtor and which require that the
property charged shall be dedicated to the payment of the credit which gives rise to the charge Articles 1926-
1928 having dealt completely with the order of payment of secured credits, article 1929 was reserved for the
treatment of unsecured credits; and it treats of them exclusively. Now, the credit in the case at bar is, by
language and definition, excluded from the credits treated in articles 1926-1928. It therefore falls in article 1929.
And, strange to say, the credit at bar is named by name in that article. It is one of those credits "which have
preference for the amount not collected." The condition which might arise in case the property mortgaged, for
example, should be insufficient to pay the credit in full is anticipated in the last paragraph of article 1928 where
it is provided that "those (credits) which enjoy preference with regard to specified property, personal or real,
and which should not have been totally paid with the amount of such property, shall be paid with regard to
the deficit in the order and place pertaining thereto, according to their respective characters." The "order and
place pertaining thereto" is mentioned and described in article 1929 where it expressly names those credits,
"which have a preference for the amount not collected;" and states in what order they shall be paid. The credit
in suit was "the amount not collected" when the mortgage held by Diaz was foresclosed. Article 1929 provides
for the payment of such a credit in express terms, as we have seen. It shall be paid "in the order established in
article 1924," the very article and the only article which establishes the order of preference among unsecured
credits — credits which do not charge or incumber or "affect" property of any kind.

With those articles before me, I am unable to justify the opinion of the court to the effect that the credit at bar is
a secured credit. Even admitting that the Civil Code and not the Code of Civil Procedure is applicable to the
case in hand, the court is wrong in its interpretation and application thereof.

The same confusion referred to as existing in the paragraph of the opinion last quoted is found all through the
opinion. (See dissenting opinion in the Kuenzle & Streiff case.) Can any one give me a definition of "any
recorded or statutory lien or preference," so often mentioned by the court in its opinion, or tell me where such a
thing may be found in the law of the Philippine Islands? What statute is it which creates a "recorded or statutory
lien or preference? Has the court called attention to any? No such thing exists. It is a nondescript — a
combination of words which expresses no legal idea or conception. Such expressions, as this and others, such
as "statutory preference securing the payment of debts," "statutory preference securing a duly recorded
judgment," "statutory liens or preferences affecting property," "statutory preferences which formerly attached to
such property," "debts secured by liens or asserted preferences," "statutory preferences which have attached to
specific property," all show, as I view the law, a failure to grasp the subject either as a whole or in its parts, or to
obtain a clear conception what a preference or a lien or incumbrance really is.

I believe also, that the failure of the court to distinguish between the subject matter of chapters second and
third of the Civil Code assisted the court to the error which I believe it has committed in this case. Chapter
second has to do exclusively with the "classification of credits;" which I chapter third deals as exclusively with
the "order of payment of creditors." The court, for the purpose of arriving at what should be the order of
payment in the case at bar confines its consideration of the Civil Code to that chapter which deals, not with
the order of payment, but to that which relates to the classification of credits. For this reason it missed article
1928 which, if [it] had been taken into account, would have demonstrated to the court not only the nature of
the very credit which is the subject-matter of this appeal but also in what order it should be paid. If any part of
the Civil Code is applicable to this case it is chapter third and not chapter second, and article 1928 and not,
1924 except in so far as the former article is reached through and by virtue of the latter.

I am of the opinion, therefore, that the credits at bar are on an equal footing by virtue of the provisions of
article 735 of the Code of Civil Procedure, and that they should be paid in pursuance of that section and
section 736, the provisions of the Civil Code touching the same matter having by said sections been repealed,
as the court has already held, effect, in two cases.

G.R. No. L-19628 December 4, 1922


LICHAUCO & COMPANY, INC., petitioner,
vs.
SILVERIO APOSTOL, as Director of Agriculture, and RAFAEL CORPUS, as Secretary of Agriculture and Natural
Resources, respondents.
Gibbs, McDonough and Johnson for petitioner.
Attorney-General Villa-Real for respondents.

STREET, J.:
This is an original petition for the writs of mandamus and injunction, filed in this court by Lichauco & Company
against the respondents, Silverio Apostol, as Director of Agriculture, and Rafael Corpus, as Secretary of
Agriculture and Natural Resources. An order having been issued by this court requiring the respondents to
appear and show cause why the relief prayed for should not be granted, the Attorney-General presented a
return, in the nature of a demurrer, in their behalf; and the cause is now before us for the determination of the
questions thus presented.
It is alleged in the complaint that the petitioner is a corporation duly organized under the laws of the Philippine
Islands and that it has been engaged for several years in the business of importing carabao and other draft
animals into the Philippine Islands and that it is now desirous of importing from Pnom-Pehn, in French Indo-
China, a shipment of draft cattle and bovine cattle for the manufacture of serum but that the respondent
Director of Agriculture refuses to admit said cattle, except upon the condition, stated in Administrative Order
No. 21 of the Bureau of Agriculture, that said cattle shall have been immunized from rinderpest before
embarcation at Pnom-Pehn. The petitioner therefore asks for an order requiring the respondents to admit the
contemplated importation of cattle into the Islands and enjoining them from the enforcement of said
administrative order in the future.
The petitioner asserts that under the first proviso to section 1762 of the Administrative Code, as amended by Act
No. 3052 of the Philippine Legislature, it has "an absolute and unrestricted right to import carabao and other
draft animals and bovine cattle for the manufacture of serum from Pnom-Pehn, Indo-China, into the Philippine
Islands" and that the respondents have no authority to impose upon the petitioner the restriction referred to
above, requiring the immunization of the cattle before shipment.
The respondents, on the other hand, rely upon section 1770 of the Administrative Code and upon
Administrative Order No. 21 of the Bureau of Agriculture, promulgated on July 29, 1922, by the Director of
Agriculture, in relation with Department Order No. 6, promulgated on July 28, 1922, by the Secretary of
Agriculture and Natural Resources, as supplying authority for the action taken.
Such portions of the laws above-mentioned as are material to the present controversy will be set out in full,
preceded by section 1762 of the Administrative Code, as originally enacted, to which will be appended the
pertinent parts of the orders referred to and the communication of the Director of Agriculture of August 31,
1922.
1. First paragraph of section 1762 of Administrative Code in original form:
SEC. 1762. Bringing of diseased animal into Islands forbidden. — Except upon permission of the
Director of Agriculture, with the approval of the head of Department first had, it shall be unlawful
for any person knowingly to ship or otherwise bring into the Philippine Islands any animal suffering
from, infected with, or dead of any dangerous communicable disease, or any effects pertaining
to such animal which are liable to introduce such disease into the Philippine Islands.
2. First paragraph of section 1762 of Administrative Code, as amended by Act No. 3052 of the Philippine
Legislature:
SEC. 1762. Bringing of animals imported from foreign countries into the Philippine Islands. — It
shall be unlawful for any person or corporation to import, bring or introduce live cattle into the
Philippine Islands from any foreign country. The Director of Agriculture may, with the approval of
the head of the department first had, authorize the importation, bringing or introduction of
various classes of thoroughbred cattle from foreign countries for breeding the same to the
native cattle of these Islands, and such as may be necessary for the improvement of the breed,
not to exceed five hundred head per annum: Provided, however, That the Director of
Agriculture shall in all cases permit the importation, bringing or introduction of draft cattle and
bovine cattle for the manufacture of serum: Provided, further, That all live cattle from foreign
countries the importation, bringing or introduction of which into the Islands is authorized by this
Act, shall be submitted to regulations issued by the Director of Agriculture, with the approval of
the head of the department, prior to authorizing its transfer to other provinces.
3. Section 1770 of Administrative Code:
SEC. 1770. Prohibition against bringing of animals from infected foreign countries. — When the
Department Head shall by general order declare that a dangerous communicable animal
disease prevails in any foreign country, port, or place and that there is danger of spreading such
disease by the importation of domestic animals therefrom, it shall be unlawful for any person
knowingly to ship or bring into the Philippine Islands any such animal, animal effects, parts, or
products from such place, unless the importation thereof shall be authorized under the
regulation of the Bureau of Agriculture.
4. Department Order No. 6, promulgated on July 28, 1922, by Secretary of Agriculture and Natural
Resources:
DEPARTMENT ORDER }
}Series of 1922.
NO. 6. }
Owing to the fact that a dangerous communicable disease known as rinderpest exist in
Hongkong, French Indo-China and British India, it is hereby declared, in accordance with the
provisions of section 1770 of Act No. 2711 (Administrative Code of the Philippine Islands of 1917),
that rinderpest prevails in said countries, and as there is danger of spreading such disease by the
importation of cattle, carabaos, and pigs therefrom, it shall be unlawful for any person knowingly
to ship or bring into the Philippine Islands any such animal, animal effects, parts, or products from
Hongkong, French Indo-China and British India, unless the importation thereof shall be authorized
under the regulations of the Bureau of Agriculture.
The provisions of this order shall take effect on and after August 1, 1922.
5. Administrative Order No. 21, of the Bureau of Agriculture, promulgated July 29, 1922, by the Director
of Agriculture:
ADMINISTRATIVE ORDER }
}
NO. 21 }
Re importation of cattle, carabaos, and pigs from French Indo-China, Hongkong and India.
1. Pursuant to the provisions of Department Order No. 6, series of 1922, of the Department of
Agriculture and Natural Resources, the present regulations of the Bureau of Agriculture
governing the importation of livestock from French Indo-China and Hongkong are hereby
amended to the effect that the importation of livestock of the species named in the
aforementioned Department Order is hereby prohibited from French Indo-China, Hongkong and
India. However, animals immunized against rinderpest, for which the importer before placing his
order shall have obtained from the Director of Agriculture a written permit to import them from
the above named countries, may be allowed entrance into the Philippine Islands.
2. This order shall take effect on and after August 1, 1922.
6. Communication of August 31, 1922, from the Acting Director of Agriculture to Faustino Lichauco (in
part):
SIR: In reply to your application for permission to import from 300 to 400 carabaos immunized
against rinderpest from Pnom-Pehn, French Indo-China, I have the honor to inform you that the
permission is hereby granted, under the following conditions:
1. Animals must be immunized by the simultaneous method before shipment. At least 10 c.c. of
good virulent blood must be injected at the first injection simultaneously with the serum. Ten days
after the simultaneous inoculation all non-reactors must receive another injection of not less than
10 c.c. of virulent blood (alone).
2. The immunization must be done by a veterinarian designated by the French Government for
the purpose, who must issue a certificate stating the fact that the animal has been immunized
according to the requirements in number 1 and it must not be embarked until ten days after the
second injection of virulent blood.
xxx xxx xxx
Very respectfully,
SILVERIO APOSTOL,
Acting Director of Agriculture.
Upon glancing over the matter above collated, it will be seen at once that section 1770 of the Administrative
Code on its face authorizes the action taken by the Secretary of Agriculture and Natural Resources in closing
our ports (in the manner and to the extent indicated in Department Order No. 6) to the importation of cattle
and carabao from French Indo-China, supposing of course, as everybody knows and as the petitioner does not
deny, that the disease of rinderpest exists in that country.
It is claimed, however, that section 1762 of the Administrative Code, so far as it authorizes restriction upon the
importation of draft cattle and bovine cattle for the manufacture of serum, has been impliedly repealed by the
amendatory Act No. 3052, which is of later enactment that the Administrative Code; and in this connection
reliance is chiefly placed on the first proviso to section 1762, as amended by said Act No. 3052, which is in these
words: "Provided, however, That the Director of Agriculture shall in all cases permit the importation, bringing or
introduction of draft cattle and bovine cattle for the manufacture of serum." This then is the first and principal
question in the case, namely, whether section 1770 has been repealed by implication, in so far as it relates to
draft animals and bovine cattle for the manufacture of serum. We say repealed by implication, for it will be
noted that that Act No. 3052 has no repealing clause, and it contains only one section, i. e., that amending
section 1762 of the Administrative Code.
We are of the opinion that the contention of the petitioner is untenable, for the reason that section 1762, as
amended, is obviously of a general nature, while section 1770 deals with a particular contingency not made
the subject of legislation in section 1762. Section 1770 is therefore not to be considered as inconsistent with
section 1762, as amended; on the other hand, it must be treated as a special qualification of section 1762. Of
course the two provisions are different, in the sense that if section 1762, as amended, is considered alone, the
cattle which the petitioner wishes to bring in can be imported without restriction, while if section 1770 is still in
force the cattle, under the conditions stated in the petition, can be brought in only upon compliance with the
requirements of Administrative Order No. 21. But this difference between the practical effect of the two
provisions does not make then inconsistent in the sense that the earlier provision (sec. 1770) should be deemed
repealed by the amendatory Act (3052).
That section 1770 is special, in the sense of dealing with a special contingency not dealt with in section 1762, is
readily apparent upon comparing the two provisions. Thus, we find that while section 1762 relates generally to
the subject of the bringing of animals into the Island at any time and from any place, section 1770 confers on
the Department Head a special power to deal with the situation which arises when a dangerous
communicable disease prevails in some defined foreign country, and the provision is intended to operate only
so long as that situation continues. Section 1770 is the backbone of the power to enforce animal quarantine in
these Islands in the special emergency therein contemplated; and if that section should be obliterated, the
administrative authorities here would be powerless to protect the agricultural industry of the Islands from the
spread of animal infection originating abroad.
We note that the argument for unrestricted importation extends only to the importation of cattle for draft
purposes and bovine cattle for the manufacture of serum, leaving section 1770 theoretically in full effect as
regards the importation of cattle for other purposes, as where they are imported for slaughter; but the
importation of cattle for draft purposes is the principal thing, and unless that can be regulated under the
conditions and to the extent attempted by the respondents in this case, the power given in section 1770 is
obviously worthless.
In our opinion section 1762, as amended, and section 1770 must be construed in pari materia as harmonious
parts of the law dealing with animal quarantine; and section 1762, as amended, can be given effect only in so
far as it is not restricted by section 1770. Here, as always, the general must yield to the particular.
If the Congress of the United States should this day repeal the Chinese Exclusion Law so far as it affects these
Islands, and should declare that all persons of Chinese nationality shall be at liberty to enter the Philippine
Islands without restriction, would anybody suppose that such enactment would have the effect of abolishing
the power to maintain quarantine against any Chinese port where cholera or bubonic plaque might hereafter
be raging in epidemic form? Yet the question now before us is not fundamentally different from the one thus
supposed.
The judicial precedents are conclusive to the effect that no implied repeal of a special provisions of the
character of the one now under consideration will result from the enactment of broader provision of a general
nature. In other words, a general statute without negative words does not repeal a previous statute which is
particular, even though the provisions of one be different from the other. (Rymer vs. Luzerne County, 12 L. R. A.,
192; Petri vs. F. E. Creelman Lumber Co., 199 U. S., 487; 50 L. ed., 281.)
Wherever there is a particular enactment and a general enactment in the same statute, and the latter, taken
in its most comprehensive sense, would overrule the former, the particular enactment must be operative, and
the general enactment must be taken to affect only the other parts of the statute to which it may properly
apply. (Sir John Romilly, Master of the Rolls, in Pretty vs. Solly, 26 Beav., 606, 610.)
The additional words of qualification needed to harmonize a general and a prior special provision in the same
statute should be added to the general provision, rather than to the special one. (Rodgers vs. United States, 185
U. S., 82; 46 L. ed., 816.)
Specific legislation upon a particular subject is not affected by a general law upon the same subject unless it
clearly appears that the provision of the two laws are so repugnant that the legislature must have intended by
the later to modify or repeal the earlier legislation. The special act and the general law must stand together,
the one as the law of the particular subject and the other as the general law of the land. (Ex Parte United
States, 226 U. S., 420; 57 L. ed., 281; Ex Parte Crow Dog, 109 U. S., 556; 27 L. ed., 1030; Partee vs. St. Louis & S. F. R.
Co., 204 Fed. Rep., 970.)
Where there are two acts or provisions, one of which is special and particular, and certainly includes the matter
in question, and the other general, which, if standing alone, would include the same matter and thus conflict
with the special act or provision, the special must be taken as intended to constitute an exception to the
general act or provision, especially when such general and special acts or provisions are contemporaneous, as
the Legislature is not to be presumed to have intended a conflict. (Crane vs. Reeder and Reeder, 22 Mich., 322,
334; University of Utah vs. Richards, 77 Am. St. Rep., 928.)
It is well settled that repeals by implication are not to be favored. And where two statutes cover, in whole or in
part, the same matter, and are not absolutely irreconcilable, the duty of the court — no purpose to repeal
being clearly expressed or indicated — is, if possible, to give effect to both. In other words, it must not be
supposed that the Legislature intended by a latter statute to repeal a prior one on the same subject, unless the
last statute is so broad in its terms and so clear and explicit in its words as to show that it was intended to cover
the whole subject, and therefore to displace the prior statute. (Frost vs. Wenie, 157 U. S., 46; 39 L. ed., 614, 619.)
As stated in the pages of the two most authoritative legal encyclopedias, the rule is that a prior legislative act
will not be impliedly repealed by a later act unless there is a plain, unavoidable and irreconcilable repugnancy
between the two. If both acts can by any reasonable construction stand together, both will be sustained. (36
Cyc., 1074- 1076; 26 Am. & Eng. Encyc. Law, 2d ed., 725-726.)
A masterly analysis of the decisions of the United States Courts pertinent to the matter now in hand will be
found in the monographic article on "Statutes and Statutory Construction," written by Chas. C. Moore and
prefixed as a General Introduction to Federal Statutes Annotated. The discussion there given is too lengthy to
be here reproduced in full, but some of the observations of the learned author are so appropriate to the case
before us that we cannot forego the temptation to include the same in this opinion. Says the writer: "The various
provisions of an act should be read so that all may, if possible, have their due and conjoint effect without
repugnancy or inconsistency. The sections of a code relative to any subject must be harmonized and to that
end the letter of any section may sometimes be disregarded. But where absolute harmony between parts of a
statute is demonstrably non-existent, the court must reject that one which is least in accord with the general
plan of the whole, or if there be no such ground for choice between inharmonious section, the later section
being the last expression of the legislative mind must, in construction, vacate the former to the extent of the
repugnancy." (1 Fed. Stat. Ann., 2d ed., 49-50.)
And speaking with reference to the rule by which special provisions are held to dominate over general
provisions in the same or later laws, the author proceeds: " 'it is an old and familiar rule,' said Mr. Justice Lamar,
'that where there is in the same statute a particular enactment, and also a general one, which in its most
comprehensive sense would include what is embraced in the former, the particular enactment must be
operative, and the general enactment must be taken to affect only such cases within its general language as
are not within the provisions of the particular enactment.' And the Justice proceeded to apply that rule in the
construction of a statute upon which there had been much ingenious argument and a decided conflict of
authority in the inferior federal courts. The stature was an act of Congress of 1876, declaring nonmailable 'every
obscene . . . book, pamphlet, paper, writing, print, or other publication of an indecent character,' and other
enumerated articles, and making it a misdemeanor to deposit any of them for mailing. In a prosecution under
the act, the Circuit Court certified to the Supreme Court the following question: 'Is the knowingly depositing in
the mails of an obscene letter, inclosed in an envelope or wrapper upon which there is nothing but the name
and address of the person to whom the letter is written, an offense within the act?' On behalf of the
government it was contended that the word 'writing' comprehended such a letter, but the Supreme Court held
otherwise. In the course of his argument in support of the view of the court, Justice Lamar pointed out that the
statute, after enumeration what articles shall be nonmailable, adds a separate and distinct clause declaring
that 'every letter upon the envelope of which . . . indecent, lewd, obscene, or lascivious delineations, epithets,
terms, or language may be written or printed . . . shall not be conveyed in the mails,' and the person knowingly
or willfully depositing the same in the mails 'shall be deemed guilty of a misdemeanor,' etc. 'This distinctly
additional clause,' continued the Justice, 'specifically designating and describing the particular class of letters
which shall be nonmailable, clearly limits the inhibitions of the statute to that class of letters alone whose
indecent matter is exposed on the envelope.' " (1 Fed. Stat. Ann., 2d ed., 50-51; also at pp. 164-166.)
The cases relating to the subject of repeal by implication all proceed on the assumption that if the act of latter
date clearly reveals an intention on the part of the lawmaking power to abrogate the prior law, this intention
must be given effect; but there must always be a sufficient revelation of this intention, and it has become an
unbending rule of statutory construction that the intention to repeal a former law will not be imputed to the
Legislature when it appears that the two statute, or provisions, with reference to which the question arises bear
to each other the relation of general to special. It is therefore idle to speculate whether in the case before us
the Philippine Legislature may or may not have intended to modify or abrogate section 1770 of the
Administrative Code at the time the amendment to section 1762 was enacted, for if any such intention was
entertained, it was not revealed in a way that would justify a court in giving this intention effect. We may add,
however, that, in the opinion of the majority of the Justices participating in this decision, the Legislature in
amending section 1762 could not possibly have entertained a design to modify section 1770; for, as we have
already shown, the abrogation of that provision, even as regards draft animals alone, would leave the animal
industry of the Islands exposed to the danger incident to the unrestricted importation of infected animals from
districts where rinderpest prevails. The unreasonableness of this interpretation of the amendatory law alone
supplies sufficient warrant for rejecting it. The Legislature could not possibly have intended to destroy the
effectiveness of quarantine as regards imported animals.
Our conclusion then is that section 1770 of the Administrative Code remains in full force; and the determination
of this question is we think necessarily fatal to the petitioner's case.
It is insisted, however, that even supposing section 1770 of the Administrative Code to be in force, nevertheless,
the requirement of immunization at the port of embarcation is unreasonable, inasmuch as the immunization of
the cattle at that port, under the supervision of the Government veterinarians of French Indo-China, is not
unconditionally accepted as efficacious by the Philippine authorities, as shown by the fact that the latter
further require tests to be made upon the arrival of the cattle here, consisting of inoculation with virulent blood
of animals suffering from rinderpest — which involves additional expenses and exposes the importer to the loss
of his entire herd.
Considerations of this nature are we think more proper to be addressed to the authorities responsible for the
regulations than to this court. About the principal fact that rinderpest exists in the regions referred to in
Department Order No. 6, there is, and can be no dispute; and when the Department Head declared that the
disease prevails in those regions and that there is danger of spreading it by the importation of cattle and
carabao into this country, he was acting upon a matter within his province, and we are not disposed to review
the conclusion.
It has been suggested that the regulative power vested in the Director of Agriculture under section 1770 of the
Administrative Code with respect to the admission of cattle into the Philippine Islands attaches only when the
importation has been effected; and that the said Director has no authority to dictate the measures to be taken
by the importer before the cattle are embarked for transportation to these Islands. This contention, in our
opinion, reflects a mistaken point of view with reference to the effect of the regulations; and the answer is to be
found in the consideration that the regulation in question has prospective reference to the condition of the
cattle upon their arrival here. In other words, the prior immunization of the cattle is made a condition
precedent to the right to bring them in; as much as to say, that only animals conforming to the required type
will be admitted. The importer is thus left at entire liberty in respect to the taking of the necessary measures to
gain admittance for his cattle in our ports; and if he fails to do so, the penalty merely is that the cattle are not
admitted.
Upon the whole we are of the opinion that the petition does not show sufficient ground for granting the writs
of mandamus and injunction. The demurrer interposed thereto by the respondents in their return to the order to
show cause, dated October 7, 1922, is therefore sustained, and the temporary restraining order heretofore
promulgated in this cause, dated September 21, 1922, is dissolved; and unless within five days after notification
hereof the petitioner shall so amend his petition as to show a sufficient cause of action, an order absolute will
be entered, dismissing the same, with costs. So ordered.
Malcolm, Avanceña, Villamor, and Ostrand, JJ., concur.

Separate Opinions

JOHNS, J., dissenting:


The question involved is the meaning and construction of Act No. 3052 of the Legislature at its special session
approved March 14, 1922, as it amends section 1762 of Act No. 2711, and to what extent, if any, it repeals or
modifies section 1770 of Act No. 2711.
It will be noted that section 1 of Act No. 3052 reads as follows:
Section seventeen hundred and sixty-two of Act Numbered Twenty-seven hundred and eleven, known
as the Administrative Code, is hereby amended to read as follows:
Hence, Act No. 3052 becomes, and is, a complete substitute for section 1762 of Act No. 2711, which reads as
follows:
SEC. 1762. Bringing of diseased animal into Islands forbidden. — Except upon permission of the Director
of Agriculture, with the approval of the head of Department first had, it shall be unlawful for any person
knowingly to ship or otherwise bring into the Philippine Islands any animal suffering from, infected with, or
dead of any dangerous communicable disease, or any effects pertaining to such animal which are
liable to introduce such disease into the Philippine Islands.
Any such animal or its effects may be permitted by the Director of Agriculture, with the approval of the
head of Department first had, to enter the Islands under such conditions as to quarantine, cremation, or
other disposal as he may direct, or which shall be deemed by him sufficient to prevent the spread of
any such disease.
As amended by Act No. 3052, section 1762 reads as follows:
SEC. 1762. Bringing of animals imported from foreign countries into the Philippine Islands. — It shall be
unlawful for any person or corporation to import, bring or introduce live cattle into the Philippine Islands
from any foreign country. The Director of Agriculture may, with the approval of the head of the
department first had, authorize the importation, bringing or introduction of various classes of
thoroughbred cattle from foreign countries for breeding the same to the native cattle of these Islands,
and such as may be necessary for the improvement of the breed, not to exceed five hundred head per
annum: Provided, however, That the Director of Agriculture shall in all cases permit the importation,
bringing or introduction of draft cattle and bovine cattle for the manufacture of serum: Provided,
further, That all live cattle from foreign countries the importation, bringing or introduction of which into
the Islands is authorized by this Act, shall be submitted to regulations issued by the Director of
Agriculture, with the approval of the head of the department, prior to authorizing its transfer to other
provinces.
At the time of the approval of this Act, the Governor-General shall issue regulations and others to
provide against a raising of the price of both fresh and refrigerated meat. The Governor-General also
may, by executive order, suspend this prohibition for a fixed period in case local conditions require it.
It was approved March 14, 1922.
It will be noted that the original Act was entitled:
Bringing of diseased animal into Islands forbidden.
And that , as amended by Act No. 3052, it is now entitled:
Bringing of animals imported from foreign countries into the Philippine Islands.
Of course, it must follow that any animal imported into the Philippine Islands must be brought here from a
foreign country within the meaning of either Act. It will be noted that the word "diseased," as found in the title of
the original Act, is not found in the title of the Act as amended. To my mind this is important, especially in view
of the language used in the amended Act, which reads:
It shall be unlawful for any person or corporation to import, bring or introduce live cattle into the
Philippine Islands from any foreign country.
Standing alone that language would be construed as an express prohibition against bringing cattle of any kind
into the Philippine Islands "from any foreign country." The Act then says:
The Director of Agriculture may, with the approval of the head of the department first had, authorized
the importation, bringing or introduction of various classes of thoroughbred cattle from foreign countries
for breeding the same to the native cattle of these Islands, and such as may be necessary for the
improvement of the breed, not to exceed five hundred head per annum.
By those provisions the Director of Agriculture, with the approval of the head of the department first had and
obtained, may authorize the importation of thoroughbred cattle for breeding purposes not to exceed five
hundred head per annum. To import such cattle, the shipper must obtain the consent of the Director of
Agriculture, together with the approval "of the head of the department," and it must appear that the cattle
"are thoroughbred cattle from foreign countries for breeding the same to the native cattle of these Islands,"
and that they are of the kind which will improve the breed of the native cattle, and the number must not
exceed five hundred head per annum. That is to say, by the express terms of the Act, thoroughbred cattle
cannot be imported without the express consent and approval of the Director of Agriculture and the head of
his department, and then only for specific purposes, and then in a limited quantity. Such provision will not admit
of any other construction. Bearing those provisions and such construction in mind, the Act further says:
Provided, however, That the Director of Agriculture shall in all cases permit the importation, bringing or
introduction of draft cattle and bovine cattle for the manufacture of serum.
Under the former provision of the Act thoroughbred cattle cannot be imported without the consent of the
Director of Agriculture, "without the approval of the head of the department first had." But as to draft cattle
and bovine cattle, the Act expressly provides:
That the Director of Agriculture shall in all cases permit the importation.
That is to say, as to thoroughbred cattle, he may or may not grant the permit, and then only in a limited
number. But as to draft cattle and bovine cattle for the manufacture of serum, he "shall in all cases permit the
importation." As to such cattle it is not a matter of his choice or discretion. But the majority opinion holds that he
is given that power and discretion under section 1770 of Act No. 2711, which reads as follows:
SEC. 1770. Prohibition against bringing of animals from infected foreign countries. — When the
Department Head shall be general order that a dangerous communicable animal disease prevails in
any foreign country, port, or place and that there is danger of spreading such disease by the
importation of domestic animals therefrom, it shall be unlawful for any person knowingly to ship or bring
into the Philippine Islands any such animal, animal effects, parts, or products from such place, unless the
importation thereof shall be authorized under the regulations of the Bureau of Agriculture.
It will be noted that section 1770 was enacted in 1917, and that Act No. 3052 was enacted March 14, 1922, five
years after section 1770 became a law. It will also be noted that the rules and regulation here sought to be
enforced were promulgated in July, 1922, under section 1770, and four months after Act No. 3052 became a
law. That is to say, that here you have rules and regulations of a subordinate department promulgated in July,
1922, that are in dire0ct conflict with an Act of the Legislature approved March, 1922. But it is contended that
one is a special and the other a general law, and that the two Acts should be construed in pari materia. The
construction overlooks the fact that the force and effect of section 1770 of Act No 2711 is founded upon
section 1762, and that both are sections of the same general Act, and that when section 1762 is repealed, as it
is, by Act No. 3052, in so far as it applies to draft and bovine cattle, there is nothing left upon which section 1770
can operate or to which it would apply. That is to say, that section 1762 and section 1770 are both sections of a
general Act, and part of one and the same Act, and Act No. 3052 expressly repeals section 1762, and by doing
so it repeals section 1770, in so far as it applies to draft and bovine cattle for the manufacture of serum.
For illustration: Suppose that section 1762 had never been amended by Act No. 3052, and that the Legislature
enacted a law expressly repealing the whole section, how then would section 1770 operate, and to what
would it apply, and how and where would it be in force and effect? There would be nothing to which it could
apply. Section 1770 is absolutely dependent upon section 1762, without which it cannot be of any force or
effect. Both of them are sections of the same general law, and one is dependent upon the other, hence, when
you amend or repeal section 1762, you modify or repeal section 1770, in so far as it relates to, or is a part of,
section 1762.lawphil.net
Section 1770 is entitled:
Prohibition against bringing of animals from infected foreign countries.
Section 1762, as amended by Act No. 3052, is entitled:
Bringing of animals imported from foreign countries into the Philippine Islands.
Section 1762, as amended, recites:
That the Director of Agriculture shall in all cases permit the importation, etc.
The word "importation" has a well-defined meaning, and must have been used with reference to its legal
meaning.
Words and Phrases, volume IV, page 3438, says:
"The literal meaning of "importation" is to bring in with intent to land. It means a bringing into some port,
harbor, or haven, with an intent to land the goods there. It takes place when the vessel arrives at a port
of entry, intending there to discharge her cargo." (Kidd vs. Flagler [U.S.], 54 Fed., 367, 369; The Mary
[U.S.], 16 Fed. Cas., 932, 933.)
Importation is not the making entry of goods at the customhouse, but merely the bringing them into
port; and the importation is complete before entry at the customhouse. (United States vs. Lyman [U.S.],
26 Fed. Cas., 1024, 1028; Perots vs. United States, 19 Fed. Cas., 258.)
Act Cong. July 1, 1812, c. 112, providing a double duty on all goods, wares, and merchandise imported
into the United States from and after the passage of the acts, means not only that there shall be an
arrival within the limits of the United States and of a collection district, but also within the limits of some
port of entry. (Arnold vs. United States, 13 U. S. [9 Cranch], 104, 120; 3 L. ed., 671.)
An article is not imported from a foreign country, within the meaning of the tariff laws, until it actually
arrives at a port of entry of the United States, and the importation is governed by the law in force at the
time of such arrival; and hence under the Treaty of Paris, by which Spain ceded the Philippine Islands to
the United States, and which took effect by the exchange of ratification and the president's
proclamation on April 1, 1899, which repealed the existing tariff duties on goods brought from those
islands, the goods, arriving at a port of entry of the United States from Philippine ports after its taking
effect, were not subject to duty, although they were shipped before April 11th. (American Sugar
Refining Co. vs. Bidwell [U.S.], 124 Fed., 677, 681.)lawphil.net
Applying this definition, the legislative Act says:
That the Director of Agriculture shall in all cases permit the importation, etc.
Giving to the word "importation," as used in the Act, its legal meaning, it is the express duty of the Director of
Agriculture to permit the bringing or introduction of draft cattle and bovine cattle with the ports and harbors of
the Philippine Islands when they are brought here with intent to land. That is the definition given to the word
"importation" by both the Federal and the Supreme Courts of the United State. That is to say, that in all cases it is
the express duty of the Director of Agriculture to permit the bringing or introduction of draft cattle and bovine
cattle for the manufacture of serum within the jurisdiction, ports and harbors of the Philippine Islands. If that part
of Act No. 3052 does not mean what it says, it does not mean anything. Again, it must be conceded that the
Legislature of the Philippine Islands has no authority to make or enforce any law beyond its jurisdiction, and that
it never intended to do so.
As the majority opinion states, the case is submitted to the court on the demurrer of the defendants to the
complaint. Hence, all of the material allegations of the complaint are admitted.
The defendants rely upon Department Order No. 6, as follows:
DEPARTMENT ORDER }
}Series of 1922.
NO. 6. }
Owing to the fact that a dangerous communicable disease known as rinderpest exist in Hongkong,
French Indo-China and British India, it is hereby declared, in accordance with the provisions of section
1770 of Act No. 2711 (Administrative Code of the Philippine Islands of 1917), that rinderpest prevails in
said countries, and as there is danger of spreading such disease by the importation of cattle, carabaos,
and pigs therefrom, it shall be unlawful for any person knowingly to ship or bring into the Philippine
Islands any such animal, animal effects, parts, or products from Hongkong, French Indo-China and
British India, unless the importation thereof shall be authorized under the regulations of the Bureau of
Agriculture.
The provisions of this order shall take effect on and after August 1, 1922.
And Administrative Order No. 21, as follows:
ADMINISTRATIVE ORDER }
}
NO. 21. }
Re importation of cattle, carabaos, and pigs from French Indo-China, Hongkong and India.
1. Pursuant to the provisions of Department Order No. 6, series of 1922, of the Department of Agriculture
and Natural Resources, the present regulations of the Bureau of Agriculture governing the importation
of livestock from French Indo-China and Hongkong are hereby amended to the effect that the
importation of livestock of the species named in the aforementioned Department Order is hereby
prohibited from French Indo-China, Hongkong and India. However, animals immunized against
rinderpest, for which the importer before placing his order shall have obtained from the Director of
Agriculture a written permit to import them from the above named countries, may be allowed entrance
into the Philippine Islands.
2. This order shall take effect on and after August 1, 1922.
Hence, you have this situation. You have an Act of the Legislature which says:
"That the Director of Agriculture shall in all cases permit the importation, bringing or introduction of draft cattle
and bovine cattle for the manufacture of serum," passed by the Legislature in March, 1922, and you have rules
and regulations of a subordinate department of the Government which absolutely prohibits the importation of
draft cattle and bovine cattle for the manufacture of serum, "unless the importation thereof shall be authorized
under the regulations of the Bureau of Agriculture," and "that the importation of livestock of the species named
in the aforementioned Department Order is hereby prohibited from French Indo-China, Hongkong and India,"
and where the important, before placing his order in a foreign country, shall obtain a written permit from the
Director of Agriculture, and then he may be allowed to import cattle into the Philippine Islands.
The question is thus squarely presented whether the rules and regulations of a subordinate department can
overthrow and destroy the express provisions of a legislative Act. It will be noted that Act No. 3052 expressly
provides that with certain limitations and reservations, and with the consent and approval of the Director of
Agriculture and the head of the department, thoroughbred cattle may be brought into the Islands in limited
number for certain purposes. There are no such restriction or limitations for the bringing in or introduction of draft
and bovine cattle. Under that provision, the Legislature has said in express terms that the Director of Agriculture
shall grant the permit in all cases. If it had been the purpose and intent of the Legislature to place any
restrictions or limitations upon "the importation, bringing or introduction of draft cattle and bovine cattle for the
manufacture of serum," it would have said so, as it did in the previous provision of the Act for the importation of
thoroughbred cattle. But it is contended that, notwithstanding Act No. 3052, section 1770 is not repealed and
remains in full force and effect.
Upon the question of where and how a statute is repealed, Lewis' Sutherland Statutory Construction is a
recognized as standard authority in all the courts. In section 247 (vol. I), the author says:
. . . therefore, the former law is constructively repealed, since it cannot be supposed that the law-
making power intends to enact or continue in force laws which are contradictions. The repugnancy
being ascertained, the later act or provision in date or position has full force, and displace by repeal
whatever in the precedent law is inconsistent with it.
Subsequent legislation repeals previous inconsistent legislation whether it expressly declares such repeal
or not. In the nature of things it would be so, not only on the theory of intention, but because
contradictions cannot stand together.
"Where the later or revising statute clearly covers the whole subject-matter of antecedent acts, and it
plainly appears to have been the purpose of the legislature to give expression in it to the whole law on
the subject, the latter is held to be replaced by necessary implication."
An affirmative enactment of a new rule implies a negative of whatever is not included, or is different;
and if by the language used a thing is limited to be done is a particular form or manner, it includes a
negative that it shall not be done otherwise. An intention will not be ascribed to the law-making power
to establish conflict and hostile systems upon the same subject, or to leave in force provisions of law by
which the later will of the legislature may be thwarted and overthrown. Such a result would render
legislation a useless and idle ceremony, and subject the law to the reproach of uncertainly and
unintelligibility. (Sec. 249.)
Where a later act grants to an officer or tribunal a part of a larger power already possessed, and in
terms which interpreted by themselves import a grant of all the power the grantee is intended to
exercise, it repeals the prior act from which the larger power had been derived. (Sec. 250.)
In the leading case of Gorham vs. Luckett (6 B. Mon., 146), Marshall, J., says:
This is not a case of the re-enactment of a former law in the same words, or with additional provisions,
nor of a regrant of a pre-existing power to the same or a greater extent. It is not a case of cumulative or
additional power or right or remedy. Nor does it come within the rule that a subsequent affirmative
statute does not repeal a previous one, which can only apply where both statute can have effect. This
is a formal and express grant of limited power to a depository which already had unlimited power. And
it can have no effect, nor be ascribed to any other purpose, but that of limiting the extent of the pre-
existing power. If certain provisions of two statutes are identical, the last need not be construed as
repealing, but merely as continuing or re-affirming, the first, for which there might be various reasons. So,
if a statute give a remedy, or provide that certain acts shall be sufficient for the attainment or security of
certain objects, and a subsequent statute declare that a part of the same remedy or some of the same
acts, or other acts entirely different, shall suffice for the accomplishment of the same object, here the
latter act does not necessarily repeal the former, except so far as it may be expressed or implied in the
former that the end shall be attained by no other mode but that which it prescribes. If there be no such
restriction in the first, there is no conflict between them. Both may stand together with full effect, and the
provisions of either may be pursued.
But if a subsequent statute requires the same, and also more than a former statute had made sufficient,
this is in effect a repeal of so much of the former statute as declares the sufficient of what it prescribes.
And if the last act professes, or manifestly intends to regulate the whole subject to which it relates, it
necessary supersedes and repeals all former acts, so far as it differs from them in its prescriptions. The
great object, then is, to ascertain the true interpretation of the last act. That being ascertained, the
necessary consequence is, that the legislative intention thus decided from, it must prevail over any prior
inconsistent intention to be deduced from a previous act.
. . . The difficulty, or rather the embarrassment in the case, arises from the fact that a previous law had
given to the same grantee unlimited power on the same subject, and that this twentieth section makes
no reference to the previous law, and contains no express words or restriction or change, but granting
an express and limited power, is framed as if it were the first and only act on the subject. But do not
these circumstance indicate that it is to be construed as if it were the only act on the subject? Or shall
the first act, which is inferior in authority so far as they conflict, so far affect the construction of the last,
as to deprive it of all effect? We say the last act must have effect according to its terms and its obvious
intent. And as both cannot have full operation according to their terms and intent, the first and not the
last act must yield.
Section 1770 was enacted in 1917, and Act No. 3052 in 1922, five years later, and the rules and regulations
sought to be enforced are founded upon section 1770 and were promulgated about five months after Act No.
3052 became a law. The two sections are not only inconsistent, but there is a direct conflict between them as
to the importation of draft and bovine cattle, especially as to the promulgated rules and regulations. The
Legislature says that as to draft and bovine cattle, the permit shall be granted in all cases, and defendants say
that we will not grant the permit under any circumstances, unless you comply with the rules and regulations
that we have promulgated, which are impossible of performance, and are in direct conflict with Act No. 3052
of the Legislature.
As Lewis' Sutherland says:
. . . therefore, the former law is constructively repealed, since it cannot be supposed that the law-
making power intends to enact or continue in force laws which are contradictions. The repugnancy
being ascertained, the later act or provision in date or position has full force, and displaces by repeal
whatever in the precedent law is inconsistent with it.
And
Subsequent legislation repeals previous inconsistent legislation whether it expressly declares such repeal
or not. In the nature of things it would be so, not only on the theory of intention, but because
contradictions cannot stand together.
It must be conceded that any authority of the defendants to promulgated rules and regulations must be found
upon some legislative act, and that in the absence of legislative authority, the defendants have no right or
license to promulgate any rules and regulations for any purpose. Hence, you have this situation; that the
Legislature in positive and express language has said that "the Director of Agriculture shall in all cases permit the
importation, bringing and introduction of draft cattle and bovine cattle for the manufacture of serum," and the
defendants have said that we will not comply with the legislative act, you shall not import cattle until you
comply with rules and regulations which we have made and promulgated, which rules and regulations, in legal
effect, absolutely prohibit the importation of such cattle for any purpose.
It is not for this court to legislate or to say whether or not Act No. 3052 is a good law or a bad law. Suffice it to
say that it was enacted by the Legislative, which, to say the least, knows as much about the cattle business in
the Philippine Islands as do the members of this court.
In its petition, the plaintiff offers to comply with all the port, harbor and quarantine rules and regulations of the
Philippine Islands. But it is contended that they are not sufficient to prevent the spread of disease among the
cattle. If not, they should be amended, and other and more strict quarantine regulations within the Philippine
Islands should be adopted, and the Legislature has the power to absolutely prohibited the importation of cattle
into the Islands for any and all purposes, which it did in Act No. 3052, except as to certain limitations and
provisions, among which are "that in all cases the Director of Agriculture shall permit the importation, bringing
and introduction of draft cattle and bovine cattle for the manufacture of serum."
Under the facts alleged, the petitioner has brought itself squarely within those provisions and the Director of
Agriculture has denied him the permit which the Legislature says he must grant, and has imposed upon it the
performance of impossible rules and regulations as a condition precedent to the granting of the permit.
Under the majority opinion, as to the importation of draft and bovine cattle, we have a government of rules
and regulations promulgated by a subordinate of the government which are in direct conflict with the
legislative Act.
By the majority opinion all that portion of Act No. 3052, which says "that the Director of Agriculture shall in all
cases permit the importation, etc.," becomes a nullity and is overruled by a subordinate branch of the
Government. In legal effect, it holds that, in so far as there is a conflict between them, the provisions of section
1770 must prevail over the provisions of Act No. 3052. That is not good law. In so far as there is a conflict, Act No.
3052 should be construed as repealing section 1770, for the simple reason that Act No. 3052 became a law
about five years after section 1770.
The majority opinion violates every canon of statutory construction. For such reasons, with all due respect to it, I
vigorously dissent.
Araullo, C. J., and Romualdez, J., concur.

G.R. No. 100776 October 28, 1993


ALBINO S. CO, petitioner,
vs.
COURT OF APPEALS and PEOPLE OF THE PHILIPPINES, respondents.
Antonio P. Barredo for petitioner.
The Solicitor General for the people.
NARVASA, C.J.:
In connection with an agreement to salvage and refloat asunken vessel — and in payment of his share of the
expenses of the salvage operations therein stipulated — petitioner Albino Co delivered to the salvaging firm on
September 1, 1983 a check drawn against the Associated Citizens' Bank, postdated November 30, 1983 in the
sum of P361,528.00.1 The check was deposited on January 3, 1984. It was dishonored two days later, the tersely-
stated reason given by the bank being: "CLOSED ACCOUNT."
A criminal complaint for violation of Batas Pambansa Bilang 222 was filed by the salvage company against
Albino Co with the Regional Trial Court of Pasay City. The case eventuated in Co's conviction of the crime
charged, and his being sentenced to suffer a term of imprisonment of sixty (60) days and to indemnify the
salvage company in the sum of P361,528.00.
Co appealed to the Court of Appeals. There he sought exoneration upon the theory that it was reversible error
for the Regional Trial Court to have relied, as basis for its verdict of conviction, on the ruling rendered on
September 21, 1987 by this Court in Que v. People, 154 SCRA 160 (1987)3 — i.e., that a check issued merely to
guarantee the performance of an obligation is nevertheless covered by B.P. Blg. 22. This was because at the
time of the issuance of the check on September 1, 1983, some four (4) years prior to the promulgation of the
judgment in Que v. Peopleon September 21, 1987, the delivery of a "rubber" or "bouncing" check as guarantee
for an obligation was not considered a punishable offense, an official pronouncement made in a Circular of
the Ministry of Justice. That Circular (No. 4), dated December 15, 1981, pertinently provided as follows:
2.3.4. Where issuance of bouncing check is neither estafa nor violation of B.P. Blg. 22.
Where the check is issued as part of an arrangement to guarantee or secure the payment of an
obligation, whether pre-existing or not, the drawer is not criminally liable for either estafa or
violation of B.P. Blg. 22 (Res. No. 438, s. 1981, Virginia Montano vs. Josefino Galvez, June 19, 1981;
Res. No. 707, s. 1989; Alice Quizon vs. Lydia Calingo, October 23, 1981, Res. No. 769, s. 1981,
Alfredo Guido vs. Miguel A. Mateo, et. al., November 17, 1981; Res. No. 589, s. 1981, Zenaida
Lazaro vs. Maria Aquino, August 7, 1981).
This administrative circular was subsequently reversed by another issued on August 8, 1984 (Ministry Circular No.
12) — almost one (1) year after Albino Co had delivered the "bouncing" check to the complainant on
September 1, 1983. Said Circular No. 12, after observing inter alia that Circular No. 4 of December 15, 1981
appeared to have been based on "a misapplication of the deliberation in the Batasang Pambansa, . . . (or) the
explanatory note on the original bill, i.e. that the intention was not to penalize the issuance of a check to
secure or guarantee the payment of an obligation," as follows:4
Henceforth, conforming with the rule that an administrative agency having interpreting authority
may reverse its administration interpretation of a statute, but that its review interpretation applies
only prospectively (Waterbury Savings Bank vs. Danaher, 128 Conn., 476; 20 a2d 455 (1941), in all
cases involving violation of Batas Pambansa Blg. 22 where the check in question is issued after
this date, the claim that the check is issued as a guarantee or part of an arrangement to secure
an obligation collection will no longer be considered a valid defense.
Co's theory was rejected by the Court of Appeals which affirmed his conviction. Citing Senarillos
v. Hermosisima, 101 Phil. 561, the Appellate Court opined that the Que doctrine did not amount to the passage
of new law but was merely a construction or interpretation of a pre-existing one, i.e., BP 22, enacted on April 3,
1979.
From this adverse judgment of the Court of Appeals, Albino Co appealed to this Court on certiorari under Rule
45 of the Rules of Court. By Resolution dated September 9, 1991, the Court dismissed his appeal. Co moved for
reconsideration under date of October 2, 1991. The Court required comment thereon by the Office of the
Solicitor General. The latter complied and, in its comment dated December 13, 1991, extensively argued
against the merits of Albino Co's theory on appeal, which was substantially that proffered by him in the Court of
Appeals. To this comment, Albino Co filed a reply dated February 14, 1992. After deliberating on the parties'
arguments and contentions, the Court resolved, in the interests of justice, to reinstate Albino Co's appeal and
adjudicate the same on its merits.
Judicial decisions applying or interpreting the laws or the Constitution shall form a part of the
legal system of the Philippines," according to Article 8 of the Civil Code. "Laws shall have no
retroactive effect, unless the contrary is provided," declares Article 4 of the same Code, a
declaration that is echoed by Article 22 of the Revised Penal Code: "Penal laws shall have, a
retroactive effect insofar as they favor the person guilty of a felony, who is not a habitual
criminal . . .5
The principle of prospectivity of statutes, original or amendatory, has been applied in many cases. These
include: Buyco v. PNB, 961 2 SCRA 682 (June 30, 1961), holding that Republic Act No. 1576 which divested the
Philippine National Bank of authority to accept back pay certificates in payment of loans, does not apply to an
offer of payment made before effectivity of the act; Largado v. Masaganda, et al., 5 SCRA 522 (June 30, 1962),
ruling that RA 2613, s amended by RA 3090 on June, 1961, granting to inferior courts jurisdiction over
guardianship cases, could not be given retroactive effect, in the absence of a saving clause; Larga v. Ranada,
Jr., 64 SCRA 18, to the effect that Sections 9 and 10 of Executive Order No. 90, amending Section 4 of PD 1752,
could have no retroactive application; People v. Que Po Lay, 94 Phil. 640, holding that a person cannot be
convicted of violating Circular No. 20 of the Central, when the alleged violation occurred before publication of
the Circular in the Official Gazette; Baltazar v. C.A., 104 SCRA 619, denying retroactive application to P.D. No.
27 decreeing the emancipation of tenants from the bondage of the soil, and P.D. No. 316 prohibiting
ejectment of tenants from rice and corn farmholdings, pending the promulgation of rules and regulations
implementing P.D. No. 27; Nilo v. Court of Appeals, 128 SCRA 519, adjudging that RA 6389 whichremoved
"personal cultivation" as a ground for the ejectment of a tenant cannot be given retroactive effect in the
absence of a statutory statement for retroactivity; Tac-An v. CA, 129 SCRA 319, ruling that the repeal of the old
Administrative Code by RA 4252 could not be accorded retroactive effect; Ballardo v. Borromeo, 161 SCRA
500, holding that RA 6389 should have only prospective application; (see also Bonifacio v. Dizon, 177 SCRA 294
and Balatbat v. CA, 205 SCRA 419).
The prospectivity principle has also been made to apply to administrative rulings and circulars, to wit: ABS-CBN
Broadcasting Corporation v. CTA, Oct. 12, 1981, 108 SCRA 142, holding that a circular or ruling of the
Commissioner of Internal Revenue may not be given retroactive effect adversely to a taxpayer: Sanchez
v.COMELEC, 193 SCRA 317, ruling that Resolution No. 90-0590 of the Commission on Elections, which directed
the holding of recall proceedings, had no retroactive application; Romualdez v. CSC, 197 SCRA 168, where it
was ruled that CSC Memorandum Circular No. 29, s. 1989 cannot be given retrospective effect so as to entitle
to permanent appointment an employee whose temporary appointment had expired before the Circular was
issued.
The principle of prospectivity has also been applied to judicial decisions which, "although in themselves not
laws, are nevertheless evidence of what the laws mean, . . . (this being) the reason whyunder Article 8 of the
New Civil Code, 'Judicial decisions applying or interpreting the laws or the Constitution shall form a part of the
legal system . . .'"
So did this Court hold, for example, in Peo. v. Jabinal, 55 SCRA 607, 611:
It will be noted that when appellant was appointed Secret Agent by the Provincial Government
in 1962, and Confidential Agent by the Provincial commander in 1964, the prevailing doctrine on
the matter was that laid down by Us in People v. Macarandang (1959) and People
v. Lucero (1958).6 Our decision in People v. Mapa,7 reversing the aforesaid doctrine, came only
in 1967. The sole question in this appeal is: should appellant be acquitted on the basis of Our
rulings in Macarandang and Lucero, or should his conviction stand in view of the complete
reverse of the Macarandang and Lucero doctrine in Mapa? . . .
Decisions of this Court, although in themselves not laws, are nevertheless evidence of what the
laws mean, and this is the reason why under Article 8 of the New Civil Code, "Judicial decisions
applying or interpreting the laws or the Constitution shall form a part of the legal system . . ."The
interpretation upon a law by this Court constitutes, in a way, a part of the law as of the date that
law was originally passed, since this Court's construction merely establishes the
contemporaneous legislative intent that the law thus construed intends to effectuate. The
settled rule supported by numerous authorities is a restatement of the legal maxim "legis
interpretation legis vim obtinet" — the interpretation placed upon the written law by a
competent court has the force of law. The doctrine laid down in Lucero and Macarandang was
part of the jurisprudence, hence, of the law, of the land, at the time appellant was found in
possession of the firearm in question and where he was arraigned by the trial court. It is true that
the doctrine was overruled in the Mapa case in 1967, but when a doctrine of this Court is
overruled and a different view is adopted, the new doctrine should be applied prospectively,
and should not apply to parties who had relied on, the old doctrine and acted on the faith
thereof. This is especially true in the construction and application of criminal laws, where it is
necessary that the punishment of an act be reasonably foreseen for the guidance of society.
So, too, did the Court rule in Spouses Gauvain and Bernardita Benzonan v. Court of Appeals, et al. (G.R. No.
97973) and Development Bank of the Philippines v. Court of Appeals, et al (G.R. No 97998), Jan. 27, 1992, 205
SCRA 515, 527-528:8
We sustain the petitioners' position, It is undisputed that the subject lot was mortgaged to DBP on
February 24, 1970. It was acquired by DBP as the highest bidder at a foreclosure sale on June 18,
1977, and then sold to the petitioners on September 29, 1979.
At that time, the prevailing jurisprudence interpreting section 119 of R.A. 141 as amended was
that enunciated in Monge and Tupas cited above. The petitioners Benzonan and respondent Pe
and the DBP are bound by these decisions for pursuant to Article 8 of the Civil Code "judicial
decisions applying or interpreting the laws or the Constitution shall form a part of the legal
system of the Philippines." But while our decisions form part of the law of the land, they are also
subject to Article 4 of the Civil Code which provides that "laws shall have no retroactive effect
unless the contrary is provided." This is expressed in the familiar legal maxim lex prospicit, non
respicit, the law looks forward not backward. The rationale against retroactivity is easy to
perceive. The retroactive application of a law usually divests rights that have already become
vested or impairs the obligations of contract and hence, is unconstitutional (Francisco vs.
Certeza, 3 SCRA 565 [1061]).
The same consideration underlies our rulings giving only prospective effect to decisions
enunciating new doctrines. Thus, we emphasized in People v. Jabinal, 55 SCRA 607 [1974]" . . .
when a doctrine of this Court is overruled and a different view is adopted, the new doctrine
should be applied prospectively and should not apply to parties who had relied on the old
doctrine and acted on the faith thereof.
A compelling rationalization of the prospectivity principle of judicial decisions is well set forth in the oft-cited
case of Chicot County Drainage Dist. v. Baxter States Bank, 308 US 371, 374 [1940]. The Chicot doctrine
advocates the imperative necessity to take account of the actual existence of a statute prior to its nullification,
as an operative fact negating acceptance of "a principle of absolute retroactive invalidity.
Thus, in this Court's decision in Tañada v. Tuvera,9 promulgated on April 24, 1985 — which declared "that
presidential issuances of general application, which have not been published,shall have no force and effect,"
and as regards which declaration some members of the Court appeared "quite apprehensive about the
possible unsettling effect . . . (the) decision might have on acts done in reliance on the validity of these
presidential decrees . . ." — the Court said:
. . . . The answer is all too familiar. In similar situation is in the past this Court, had taken the
pragmatic and realistic course set forth in Chicot County Drainage District vs. Baxter Bank (308
U.S. 371, 374) to wit:
The courts below have proceeded on the theory that the Act of Congress, having found to be
unconstitutional, was not a law; that it was inoperative, conferring no rights and imposing no
duties, and hence affording no basis for the challenged decree. Norton vs. Shelby County, 118
US 425, 442; Chicago, I. & L. Ry. Co. v. Hackett, 228 U. S. 559, 566. It is quite clear, however, that
such broad statements as to the effect of a determination of unconstitutionality must be taken
with qualifications. The actual existence of a statute, prior to such a determination, is an
operative fact and may have consequences which cannot justly be ignored. The past cannot
always be erased by a new judicial declaration. The effect of the subsequent ruling as to
invalidity may have to be considered in various aspects — with respect to particular conduct,
private and official. Questions of rights claimed to have become vested, of status, of prior
determinations deemed to have finality and acted upon accordingly, of public policy in the
light of the nature both of the statute and of its previous application, demand examination.
These questions are among the most difficult of those who have engaged the attention of
courts, state and federal, and it is manifest from numerous decisions that an all-inclusive
statement of a principle of absolute retroactive invalidity cannot be justified.
Much earlier, in De Agbayani v. PNB, 38 SCRA 429 — concerning the effects of the invalidation of "Republic Act
No. 342, the moratorium legislation, which continued Executive Order No. 32, issued by the then President
Osmeña, suspending the enforcement of payment of all debts and other monetary obligations payable by war
sufferers," and which had been "explicitly held in Rutter v. Esteban (93 Phil. 68 [1953] 10 . . . (to be) in 1953
'unreasonable and oppressive, and should not be prolonged a minute longer . . ." — the Court made
substantially the same observations, to wit:11
. . . . The decision now on appeal reflects the orthodox view that an unconstitutional act, for that
matter an executive order or a municipal ordinance likewise suffering from that infirmity, cannot
be the source of any legal rights or duties. Nor can it justify any official act taken under it. Its
repugnancy to the fundamental law once judicially declared results in its being to all intents and
purposes amere scrap of paper. . . . It is understandable why it should be so, the Constitution
being supreme and paramount. Any legislative or executive act contrary to its terms cannot
survive.
Such a view has support in logic and possesses the merit of simplicity. lt may not however be
sufficiently realistic. It does not admit of doubt that prior to the declaration of nullity such
challenged legislative or executive act must have been in force and had to be compiled with.
This is so as until after the judiciary, in an appropriate case, declares its invalidity,, it is entitled to
obedience and respect. Parties may have acted under it and may have changed
theirpositions, what could be more fitting than that in a subsequent litigation regard be had to
what has been done while such legislative or executive act was in operation and presumed to
be valid in all respects. It is now accepted as a doctrine that prior to its being nullified, its
existence is a fact must be reckoned with. This is merely to reflect awareness that precisely
because the judiciary is the governmental organ which has the final say on whether or not a
legislative or executive measure is valid, a, period of time may have elapsed before it can
exercise the power of judicial review that may lead to a declaration of nullity. It would be to
deprive the law of its quality of fairness and justice then, if there be no recognition of what had
transpired prior to such adjudication.
In the language of an American Supreme Court decision: 'The actual existence of a statute,
prior to such a determination [of unconstitutionality], is an operative fact and may have
consequences which cannot justly be ignored. The past cannot always be erased by a new
judicial declaration. The effect of the subsequent ruling as to invalidity may have to be
considered in various aspects, — with respect to particular relations, individual and corporate,
and particular conduct, private and official (Chicot County Drainage Dist. v. Baxter States Bank,
308 US 371, 374 [1940]). This language has been quoted with approval in a resolution in Araneta
v. Hill (93 Phil. 1002 [1953]) and the decision in Manila Motor Co. Inc. v. Flores (99 Phil. 738 [1956]).
An even more recent instance is the opinion of Justice Zaldivar speaking for the Court in
Fernandez v. Cuerva and Co. (L-21114, Nov. 28, 1967, 21 SCRA 1095).
Again, treating of the effect that should be given to its decision in Olaguer v. Military Commission No 34, 12 —
declaring invalid criminal proceedings conducted during the martial law regime against civilians, which had
resulted in the conviction and incarceration of numerous persons — this Court, in Tan vs. Barrios, 190 SCRA 686,
at p. 700, ruled as follows:
In the interest of justice and consistently, we hold that Olaguer should, in principle, be applied
prospectively only to future cases and cases still ongoing or not yet final when that decision was
promulgated. Hence, there should be no retroactive nullification of final judgments, whether of
conviction or acquittal, rendered by military courts against civilians before the promulgation of
the Olaguer decision. Such final sentences should not be disturbed by the State. Only in
particular cases where the convicted person or the State shows that there was serious denial of
constitutional rights of the accused, should the nullity of the sentence be declared and a retrial
be ordered based on the violation of the constitutional rights of the accused and not on the
Olaguer doctrine. If a retrial is no longer possible, the accused should be released since
judgment against him is null on account of the violation of his constitutional rights and denial of
due process.
xxx xxx xxx
The trial of thousands of civilians for common crimes before the military tribunals and
commissions during the ten-year period of martial rule (1971-1981) which were created under
general orders issued by President Marcos in the exercise of his legislative powers is an operative
fact that may not just be ignored. The belated declaration in 1987 of the unconstitutionality and
invalidity of those proceedings did not erase the reality of their consequences which occurred
long before our decision in Olaguer was promulgated and which now prevent us from carrying
Olaguer to the limit of its logic. Thus did this Court rule in Municipality of Malabang v. Benito, 27
SCRA 533, where the question arose as to whether the nullity of creation of a municipality by
executive order wiped out all the acts of the local government abolished. 13
It would seem then, that the weight of authority is decidedly in favor of the proposition that the Court's decision
of September 21, 1987 in Que v. People, 154 SCRA 160 (1987) 14 that a check issued merely to guarantee the
performance of an obligation is nevertheless covered by B.P. Blg. 22 — should not be given retrospective effect
to the prejudice of the petitioner and other persons situated, who relied on the official opinion of the Minister of
Justice that such a check did not fall within the scope of B.P. Blg. 22.
Inveighing against this proposition, the Solicitor General invokes U.S. v. Go Chico, 14 Phil. 128, applying the
familiar doctrine that in crimes mala prohibita, the intent or motive of the offender is inconsequential, the only
relevant inquiry being, "has the law been violated?" The facts in Go Chico are substantially different from those
in the case at bar. In the former, there was no official issuance by the Secretary of Justice or other government
officer construing the special law violated; 15 and it was there observed, among others, that "the defense . . .
(of) an honest misconstruction of the law under legal advice" 16 could not be appreciated as a valid defense.
In the present case on the other hand, the defense is that reliance was placed, not on the opinion of a private
lawyer but upon an official pronouncement of no less than the attorney of the Government, the Secretary of
Justice, whose opinions, though not law, are entitled to great weight and on which reliance may be placed by
private individuals is reflective of the correct interpretation of a constitutional or statutory provision; this,
particularly in the case of penal statutes, by the very nature and scope of the authority that resides in as
regards prosecutions for their violation.17 Senarillos vs.Hermosisima, supra, relied upon by the respondent Court
of Appeals, is crucially different in that in said case, as in U.S. v. Go Chico, supra, no administrative
interpretation antedated the contrary construction placed by the Court on the law invoked.
This is after all a criminal action all doubts in which, pursuant to familiar, fundamental doctrine, must be resolved
in favor of the accused. Everything considered, the Court sees no compelling reason why the doctrine of mala
prohibita should override the principle of prospectivity, and its clear implications as herein above set out and
discussed, negating criminal liability.
WHEREFORE, the assailed decisions of the Court of Appeals and of the Regional Trial Court are reversed and set
aside, and the criminal prosecution against the accused-petitioner is DISMISSED, with costs de oficio.
SO ORDERED.
Padilla, Regalado, Nocon and Puno, JJ., concur.

# Footnotes
1 As found by the Court of Appeals, the agreement was between Co, representing Mayflower
Shipping Corporation, and Geronimo B. Bella, representing Tans-Pacific Towage, Inc. The
expenses for refloating were apportioned chiefly between FGU Insurance and Development
Bank of the Philippines, which respectively contributed P2,329,022.00 and P1,579,000.00.
SEE Rollo, pp. 9, 20-21.
2 Otherwise known as the "Bouncing Checks Law".
3 The ruling is contained in an extended resolution on a motion for reconsideration, promulgated
by the Special Former Second Division of the Court on September 21, 1987, written for the
division by Paras,J., with whom concurred Fernan, Gutierrez, Jr., Padilla, Bidin and Cortes, JJ. In
that resolution, the Court gave its "stamp of approval" on the decision of the Court of Appeals
holding inter alia that "It is now settled that Batas Pambansa Bilang 22 applies even in cases
where dishonored checks are issued merely in the form of a deposit or a guarantee."
4 Emphasis supplied.
5 Exceptions to the rule of prospectivity are collated, e.g., in the textbook of retired Justice
Edgardo A. Paras (Civil Code of the Philippines Annotated, 1984 ed., Vol. 1, pp. 22-23) viz : 1)
laws remedial in nature; 2) penal law favorable to accused, if ; after not habitual delinquent; 3)
laws of emergency nature under police power : e.g., tenancy relations (Vda. de Ongsiako v.
Gamboa, 47 O.G. 4259, Valencia et al. v. Surtida et al., May 31, 1961); 4) curative laws; 5)
substantive right declared for first time unless vested rights impaired (Unson v. del Rosario, Jan.
29, 1953; Belen v. Belen, 49 O.G. 997; Peo v. Alejaga, 49 OG 2833).
6 106 Phil. 713 and 103 Phil. 500, respectively, both involving prosecutions for illegal possession of
firearms, and both holding that appointment by the Provincial Governor or Provincial
Commander of a person as a "secret agent" or "confidential agent" "sufficiently placed him
under the category of a 'peace officer' . . . who under section 879 of the Revised Administrative
Code is exempted from the requirements relating to the issuance of license to possess firearm.
7 SEE Ilagan v. People, Jan. 29, 1974, 55 SCRA 361.
8 The title of the cited Monge case is Monge, et al. v. Angeles, et al., and is reported in 101 Phil.,
563 [1957], while that of the cited Tupas case is Tupas v. Damasco, et al., reported in 132 SCRA
593 [1984].
9 136 SCRA 27, 40-41.
10 And several other rulings set forth in a corresponding footnote in the text of the decision.
11 SEE also Olaguer v. Military Commission No. 34, 150 SCRA 144 (1987) (Citing Municipality of
Malabang v. Benito, 27 SCRA 533 where the question arose as to whether the judicial
nullification of an executive order creating a municipality wiped out all the acts of the local
government abolished); Tan v. Barrios, 190 SCRA 686 (1990); Drilon v. Court of Appeals, 202 SCRA
378 (1991); Union of Filipino Employees v. Vivar, Jr., 205 SCRA 200 (1992); Peralta v. Civil Service
Commission, 212 SCRA 425.
12 150 SCRA 144 (1987).
13 SEE also Cruz v. Enrile, 160 SCRA 700 [1988] and Res. of February 26, 1991; and Drilon v. Court
of Appeals, 202 SCRA 378 [1991].
14 SEE footnote 3, supra.
15 Act No. 1696 of the Philippine Commission punishing any person who shall expose, or cause or
permit to be exposed, to public view . . . any flag, banner, emblem, or device used during the
late insurrection in the Philippine Islands to designate or identify those in armed rebellion against
the United States, . . .
16 14 Phil. 128, 133-134.
17 Estrella vs. Orendain, 37 SCRA 640; Noblejas vs. Salas, 67 SCRA 47.
EXECUTIVE ORDER NO. 292
INSTITUTING THE "ADMINISTRATIVE CODE OF 1987"
WHEREAS, the Administrative Code currently in force was first forged in 1917 when the relationship between the
people and the government was defined by the colonial order then prevailing;
WHEREAS, efforts to achieve an integrative and over-all recodification of its provisions resulted in the
Administrative Code of 1978 which, however, was never published and later expressly repealed;
WHEREAS, the effectiveness of the Government will be enhanced by a new Administrative Code which
incorporates in a unified document the major structural, functional and procedural principles and rules of
governance; and
WHEREAS, a new Administrative Code will be of optimum benefit to the people and Government officers and
employees as it embodies changes in administrative structures and procedures designed to serve the people;
NOW, THEREFORE, I, CORAZON C. AQUINO, President of the Philippines, by virtue of the powers vested in me by
the Constitution, do hereby promulgate the Administrative Code of 1987, as follows:
INTRODUCTORY PROVISIONS
Section 1. Title. - This Act shall be known as the "Administrative Code of 1987."
Section 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:
(1) Government of the Republic of the Philippines refers to the corporate governmental entity through
which the functions of government are exercised throughout the Philippines, including, save as the
contrary appears from the context, the various arms through which political authority is made effective
in the Philippines, whether pertaining to the autonomous regions, the provincial, city, municipal or
barangay subdivisions or other forms of local government.
(2) National Government refers to the entire machinery of the central government, as distinguished from
the different forms of local governments.
(3) Local Government refers to the political subdivisions established by or in accordance with the
Constitution.
(4) Agency of the Government refers to any of the various units of the Government, including a
department, bureau, office, instrumentality, or government-owned or controlled corporations, or a local
government or a distinct unit therein.
(5) National Agency refers to a unit of the National Government.
(6) Local Agency refers to a local government or a distinct unit therein.
(7) Department refers to an executive department created by law. For purposes of Book IV, this shall
include any instrumentality, as herein defined, having or assigned the rank of a department, regardless
of its name or designation.
(8) Bureau refers to any principal subdivision or unit of any department. For purposes of Book IV, this shall
include any principal subdivision or unit of any instrumentality given or assigned the rank of a bureau,
regardless of actual name or designation, as in the case of department-wide regional offices.
(9) Office refers, within the framework of governmental organization, to any major functional unit of a
department or bureau including regional offices. It may also refer to any position held or occupied by
individual persons, whose functions are defined by law or regulation.
(10) Instrumentality refers to any agency of the National Government, not integrated within the
department framework vested within 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.
(11) Regulatory agency refers to any agency expressly vested with jurisdiction to regulate, administer or
adjudicate matters affecting substantial rights and interests of private persons, the principal powers of
which are exercised by a collective body, such as a commission, board or council.
(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.
(14) "Officer" as distinguished from "clerk" or "employee", refers to a person whose duties, not being of a
clerical or manual nature, involves the exercise of discretion in the performance of the functions of the
government. When used with reference to a person having authority to do a particular act or perform a
particular function in the exercise of governmental power, "officer" includes any government employee,
agent or body having authority to do the act or exercise that function.
(15) "Employee", when used with reference to a person in the public service, includes any person in the
service of the government or any of its agencies, divisions, subdivisions or instrumentalities.
BOOK I
SOVEREIGNTY AND GENERAL ADMINISTRATION
CHAPTER 1
THE NATIONAL TERRITORY
Section 3. What Comprises National Territory. - The national territory comprises the Philippine archipelago, with
all the islands and waters embraced therein, and all other territories over which the Philippines has sovereignty
or jurisdiction, consisting of its terrestrial, fluvial, and aerial domains, including its territorial sea, the seabed, the
subsoil, the insular shelves, and other submarine areas. The waters around, between, and connecting the
islands of the archipelago, regardless of their breadth and dimensions, form part of the internal waters of the
Philippines.
Section 4. Territorial Subdivision of the Philippines. - The territorial and political subdivisions of the Philippines are
the autonomous regions, provinces, subprovinces, cities, municipalities and barangays.
CHAPTER 2
THE PEOPLE
Section 5. Who are Citizens. - The following are the citizens of the Philippines:
(1) Those who are citizens of the Philippines at the time of the adoption of the Constitution;
(2) Those whose fathers or mothers are citizens of the Philippines;
(3) Those born before January 17, 1973, of Filipino mothers, who elect Philippine citizenship, unless by the
act or omission they are deemed, under the law, to have renounced it.
(4) Those who are naturalized in accordance with law.
Section 6. Effect of Marriage. - Citizens of the Philippines who marry aliens shall retain their citizenship, unless by
their act or omission they are deemed, under the law, to have renounced it.
Section 7. Natural-born Citizen. - Natural-born citizens are those who are citizens of the Philippines from birth
without having to perform any act to acquire or perfect their Philippine citizenship. Those who elect Philippine
citizenship in accordance with the Constitution shall be deemed natural-born citizens.
Section 8. Loss or Reacquisition of Citizenship. - Philippine citizenship may be lost or reacquired in the manner
provided by law.
Section 9. Dual Allegiance. - Dual allegiance is inimical to the national interest and shall be dealt with by law.
CHAPTER 3
STATE IMMUNITY FROM SUIT
Section 10. Non-suability of the State. - No suit shall lie against the State except with its consent as provided by
law.
Section 11. The State's Responsibility for Acts of Agents. -
(1) The State shall be legally bound and responsible only through the acts performed in accordance
with the Constitution and the laws by its duly authorized representatives.
(2) The State shall not be bound by the mistakes or errors of its officers or agents in the exercise of their
functions.
CHAPTER 4
NATIONAL SYMBOLS AND OFFICIAL LANGUAGES
Section 12. National Flag. -
(1) The flag of the Philippines shall be red, white and blue, with a sun and three stars, as consecrated
and honored by the people and recognized by law.
(2) The custody, ceremonial use, occasion and manner of display, and the proper care and disposition
of the flag shall be governed by appropriate rules and regulations.
Section 13. National Anthem. - Until otherwise provided by law, the musical arrangement and composition of
Julian Felipe is adopted as the national anthem. It shall be sung or played upon the opening or start of all state
celebrations or gatherings and on such other occasions as may be prescribed by appropriate rules and
regulations.
Section 14. Arms and Great Seal of the Republic of the Philippines. -
(1) The Arms shall have paleways of two (2) pieces, azure and gules; a chief argent studded with three
mullets equidistant from each other; and, in point of honor, ovoid argent over all the sun rayonnant with
eight minor and lesser rays. Beneath shall be a scroll with the words "Republic of the Philippines, " or its
equivalent in the national language, inscribed thereon.
(2) The Great Seal shall be circular in form, with the arms as described in the preceding paragraph, but
without the scroll and the inscription thereon, and surrounding the whole, a double marginal circle
within which shall appear the words "Republic of the Philippines," or its equivalent in the national
language. For the purpose of placing the Great Seal, the color of the arms shall not be deemed
essential.
Section 15. Use and Custody of Great Seal. - The Great Seal shall be affixed to or placed upon all commissions
signed by the President and upon such other official documents and papers of the Republic of the Philippines
as may be required by custom and usage. The President shall have custody of the Great Seal.
Section 16. Arms, Seals and Banners of Government Offices. - The various offices of government may adopt
appropriate coats-of-arms, seals and banners.
Section 17. Official Languages. - Until otherwise provided by law, Pilipino and English shall be the official
languages.
CHAPTER 5
OPERATION AND EFFECT OF LAWS
Section 18. When Laws Take Effect. - Laws shall take effect after fifteen (15) days following the completion of
their publication in the Official Gazette or in a newspaper of general circulation, unless it is otherwise provided.
Section 19. Prospectivity. - Laws shall have prospective effect unless the contrary is expressly provided.
Section 20. Interpretation of Laws and Administrative Issuances. - In the interpretation of a law or administrative
issuance promulgated in all the official languages, the English text shall control, unless otherwise specifically
provided. In case of ambiguity, omission or mistake, the other texts may be consulted.
Section 21. No Implied Revival of Repealed Law.- When a law which expressly repeals a prior law itself
repealed, the law first repealed shall not be thereby revived unless expressly so provided.
Section 22. Revival of Law Impliedly Repealed. - When a law which impliedly repeals a prior law is itself
repealed, the prior law shall thereby be revived, unless the repealing law provides otherwise.
Section 23. Ignorance of the Law. - Ignorance of the law excuses no one from compliance therewith.
CHAPTER 6
OFFICIAL GAZETTE
Section 24. Contents. - There shall be published in the Official Gazette all legislative acts and resolutions of a
public nature; all executive and administrative issuances of general application; decisions or abstracts of
decisions of the Supreme Court and the Court of Appeals, or other courts of similar rank, as may be deemed by
said courts of sufficient importance to be so published; such documents or classes of documents as may be
required so to be published by law; and such documents or classes of documents as the President shall
determine from time to time to have general application or which he may authorize so to be published.
The publication of any law, resolution or other official documents in the Official Gazette shall be prima facie
evidence of its authority. lawphi1.net
Section 25. Editing and Publications. - The Official Gazette shall be edited in the Office of the President and
published weekly in Pilipino or in the English language. It shall be sold and distributed by the National Printing
Office which shall promptly mail copies thereof to subscribers free of postage.
CHAPTER 7
REGULAR HOLIDAYS AND NATIONWIDE SPECIAL DAYS
Section 26. Regular Holidays and Nationwide Special Days. -
1. Unless otherwise modified by law, order or proclamation, the following regular holidays and
special days shall be observed in this country:
(A) Regular Holidays

New Year's Day January 1

Maundy Thursday Movable date

Good Friday Movable date

Araw ng Kagitingan (Bataan April 9


and Corregidor Day)

Labor Day May 1

Independence Day June 12

National Heroes Day Last Sunday of August

Bonifacio Day November 30

Christmas Day December 25

Rizal Day December 30

(B) Nationwide Special Days

All Saints Day November 1

Last Day of the Year December 31


(2) The terms "legal or regular holiday" and "special holiday", as used in laws, orders, rules and
regulations or other issuances shall be referred to as "regular holiday" and "special day",
respectively. lawphi1.net
Section 27. Local Special Days. - The President may proclaim any local special day for a particular date, group
or place.
Section 28. Pretermission of Holiday. - Where the day, or the last day, for doing any act required or permitted by
law falls on a regular holiday or special day, the act may be done on the next succeeding business
day. lawphi1.net
CHAPTER 8
LEGAL WEIGHTS MEASURES AND PERIOD
Section 29. Official Use of Metric System. - The metric system of weights and measures shall be used in the
Philippines for all products, articles, goods, commodities, materials, merchandise, utilities, services, as well as for
commercial transactions like contracts, agreements, deeds and other legal instruments publicly and officially
attested, and for all official documents. Only weights and measures of the metric system shall be officially
sealed and licensed.
Section 30. Mandatory Nation-wide Use. - The metric system shall be fully adopted in all agricultural,
commercial, industrial, scientific and other sectors. Persons or entities allowed under existing laws to use the
English system or other standards and weights are given until the date to be fixed by the Metric System Board to
adopt the metric system.
Section 31. Legal Periods. - "Year" shall be understood to be twelve calendar months; "month" of thirty days,
unless it refers to a specific calendar month in which case it shall be computed according to the number of
days the specific month contains; "day," to a day of twenty-four hours; and "night," from sunset to sunrise.
CHAPTER 9
GENERAL PRINCIPLES GOVERNING PUBLIC OFFICERS
Section 32. Nature of Public Office. - Public office is a public trust. Public officers and employees must at all
times be accountable to the people, serve them with the utmost responsibility, integrity, loyalty and efficiency,
act with patriotism and justice, and lead modest lives.
Section 33. Policy on Change of Citizenship. - Public officers and employees owe the Senate and the
Constitution allegiance at all times, and any public officer or employee who seeks to change his citizenship or
acquire the status of an immigrant of another country during his tenure shall be dealt with by law.
Section 34. Declaration of Assets, Liabilities and Net Worth. - A public officer or employee shall upon assumption
of office and as often thereafter as may be required by law, submit a declaration under oath of his assets,
liabilities, and net worth.
Section 35. Ethics in Government. - All public officers and employees shall be bound by a Code of Ethics to be
promulgated by the Civil Service Commission.
Section 36. Inhibition Against Purchase of Property at Tax Sale. - No officer or employee of the government shall
purchase directly or indirectly any property sold by the government for the non-payment of any tax, fee or
other public charge. Any such purchase by an officer or employee shall be void.
Section 37. Powers Incidental to Taking of Testimony. - When authority to take testimony or receive evidence is
conferred upon any administrative officer or any non-judicial person, committee, or other body, such authority
shall include the power to administer oaths, summon witnesses, and require the production of documents by a
subpoena duces tecum.
Section 38. Liability of Superior Officers. -
(1) A public officer shall not be civilly liable for acts done in the performance of his official duties, unless
there is a clear showing of bad faith, malice or gross negligence.
(2) Any public officer who, without just cause, neglects to perform a duty within a period fixed by law or
regulation, or within a reasonable period if none is fixed, shall be liable for damages to the private party
concerned without prejudice to such other liability as may be prescribed by law.
(3) A head of a department or a superior officer shall not be civilly liable for the wrongful acts, omissions
of duty, negligence, or misfeasance of his subordinates, unless he has actually authorized by written
order the specific act or misconduct complained of.
Section 39. Liability of Subordinate Officers. -No subordinate officer or employee shall be civilly liable for acts
done by him in good faith in the performance of his duties. However, he shall be liable for willful or negligent
acts done by him which are contrary to law, morals, public policy and good customs even if he acted under
orders or instructions of his superiors.
CHAPTER 10
OFFICIAL OATHS
Section 40. Oaths of Office for Public Officers and Employees. - All public officers and employees of the
government including every member of the armed forces shall, before entering upon the discharge of his
duties, take an oath or affirmation to uphold and defend the Constitution; that he will bear true faith and
allegiance to it; obey the laws, legal orders and decrees promulgated by the duly constituted authorities; will
well and faithfully discharge to the best of his ability the duties of the office or position upon which he is about
to enter; and that he voluntarily assumes the obligation imposed by his oath of office, without mental
reservation or purpose of evasion. Copies of the oath shall be deposited with the Civil Service Commission and
the National Archives.
Section 41. Officers Authorized to Administer Oath. -
(1) The following officers have general authority to administer oath: Notaries public, members of the
judiciary, clerks of courts, the Secretary of the either House of the Congress of the Philippines, of
departments, bureau directors, registers of deeds, provincial governors and lieutenant-governors, city
mayors, municipal mayors and any other officer in the service of the government of the Philippines
whose appointment is vested in the President.
(2) Oaths may also be administered by any officer whose duties, as defined by law or regulation, require
presentation to him of any statement under oath..
Section 42. Duty to Administer Oath. - Officers authorized to administer oaths, with the exception of notaries
public, municipal judges and clerks of court, are not obliged to administer oaths or execute certificates save in
matters of official business; and with the exception of notaries public, the officer performing the service in those
matters shall charge no fee, unless specifically authorized by law.
CHAPTER 11
OFFICIAL REPORTS
Section 43. Annual Reports. - The heads of the several branches, subdivisions, department and agencies or
instrumentalities of the Government shall prepare and submit annual reports to the President on or before the
first day of July 1 of each year.
Section 44. Contents of Reports. - The contents of the annual reports shall be prescribed by law or, in the
absence thereof, by executive order.
Section 45. Special Reports. - Each chief of Bureau or other officer of the government shall make such special
reports concerning the work of his Bureau or Office as may from time to time be required of him by the
President of the Philippines or Head of Department.
Section 46. Deposit with Archives. - Official copies of annual reports shall be deposited with the National
Archives and shall be open to public inspection.
CHAPTER 12
PUBLIC CONTRACTS AND CONVEYANCES
Section 47. Contracts and Conveyances. - Contracts or conveyances may be executed for and in behalf of
the Government or of any of its branches, subdivisions, agencies, or instrumentalities, including government-
owned or controlled corporations, whenever demanded by the exigency or exigencies of the service and as
long as the same are not prohibited by law.
Section 48. Official Authorized to Convey Real Property. - Whenever real property of the Government is
authorized by law to be conveyed, the deed of conveyance shall be executed in behalf of the government by
the following:
(1) For property belonging to and titled in the name of the Republic of the Philippines, by the President,
unless the authority therefor is expressly vested by law in another officer.
(2) For property belonging to the Republic of the Philippines but titled in the name of any political
subdivision or of any corporate agency or instrumentality, by the executive head of the agency or
instrumentality.
Section 49. Authority to Convey other Property. - Whenever property other than real is authorized to be
conveyed, the contract or deed shall be executed by the head of the agency with the approval of the
department head. Where the operations of the agency regularly involve the sale or other disposition of
personal property, the deed shall be executed by any officer or employee expressly authorized for that
purpose.
Section 50. Conveyance of National Government Property to Local Governments. - When the real property
belonging to the National Government is needed for school purposes, or other official use by any local
government, the President shall authorize its transfer, and the department head or other authority concerned
shall execute in favor of the local government the necessary deed of conveyance by way of gift, sale,
exchange, or otherwise, and upon such terms as shall be for the interest of the parties concerned. Nothing
herein provided shall be deemed to authorize the conveyance of unreserved public land, friar land or any real
property held by the Government in trust or for a special purpose defined by law.
Section 51. Execution of Contracts. -
(1) Contracts in behalf of the Republic of the Philippines shall be executed by the President unless
authority therefor is expressly vested by law or by him in any other public officer.
(2) Contracts in behalf of the political subdivisions and corporate agencies or instrumentalities shall be
approved by their respective governing boards or councils and executed by their respective executive
heads.
BOOK II
DISTRIBUTION OF POWERS OF GOVERNMENT
CHAPTER 1
BASIC PRINCIPLES AND POLICIES
Section 1. Guiding Principles and Policies in Government. - Governmental power shall be exercised in
accordance with the following basic principles and policies:
(1) The Philippines is a democratic and republican State. Sovereignty resides in the people and all
government authority emanates from them.
(2) The State values the dignity of every human person and guarantees full respect for human rights.
(3) Civilian authority is, at all times, supreme over the military.
(4) The State shall ensure the autonomy of local governments.
(5) The territorial and political subdivisions of the Republic of the Philippines are the provinces, cities,
municipalities, and barangays. There shall be autonomous regions, in accordance with the Constitution,
in Muslim Mindanao and the Cordilleras as may be provided by law.
(6) The separation of Church and State shall be inviolable.
(7) The right of the people and their organizations to effective and reasonable participation at all levels
of social, political, and economic decision-making shall not be abridged. The State shall, by law,
facilitate the establishment of adequate consultation mechanisms.
(8) The powers expressly vested in any branch of the Government shall not be exercised by, nor
delegated to, any other branch of the Government, except to the extent authorized by the
Constitution.
CHAPTER 2
LEGISLATIVE POWER
Section 2. Seat of Legislative Power. - The legislative power shall be vested in the Congress of the Philippines
which shall consist of a Senate and a House of Representatives, except to the extent reserved to the people by
the Constitutional provision on initiative and referendum.
Section 3. Inhibitions Against Members of Congress. -
(1) No Senator or Member of the House of Representatives may hold any other office or employment in
the Government, or any subdivision agency, or instrumentality thereof, including government-owned or
controlled corporations or their subsidiaries, during his term without forfeiting his seat. Neither shall he be
appointed to any office which may have been created or the emoluments thereof increased during
the term for which he was elected.
(2) No Senator or Member of the House of Representatives may personally appear as counsel before
any court of justice or before the Electoral Tribunals, or quasi-judicial and other administrative bodies.
Neither shall he, directly or indirectly, be interested financially in any contract with, or in any franchise or
special privilege granted by the Government, or any subdivision, agency or instrumentality thereof
including any government-owned or controlled corporation, or its subsidiary, during his term of office.
He shall not intervene in any matter before any office of the Government for his pecuniary benefit or
where he may be called upon to act on account of his office.
Section 4. Electoral Tribunal. - The Senate and the House of Representatives shall each have an Electoral
Tribunal which shall be the sole judge of all contests relating to the election, returns, and qualifications of their
respective Members. Each Electoral Tribunal shall be composed of nine (9) Members, three (3) of whom shall
be Justices of the Supreme Court to be designated by the Chief Justice, and the remaining six (6) shall be
Members of the Senate or the House of Representatives, as the case may be, who shall be chosen on the basis
of proportional representation from the political parties and the parties or organizations registered under the
party-list system represented therein. The senior Justice in the Electoral Tribunal shall be its Chairman.
Section 5. Commission on Appointments. - There shall be a Commission on Appointments consisting of the
President of the Senate, as ex officio Chairman, and twelve (12) Senators and twelve (12) Members of the
House of Representatives, elected by each House on the basis of proportional representation from the political
parties and parties or organizations registered under the party-list system represented therein. The Chairman of
the Commission shall not vote, except in case of a tie. The Commission shall act on all appointments submitted
to it within thirty (30) session days of the Congress from their submission. The Commission shall rule by a majority
vote of all its Members.
Section 6. Legislative Investigation. - The Senate or the House of Representatives or any of its respective
committees may conduct inquiries in aid of legislation in accordance with its duly published rules of procedure.
The rights of persons appearing in or affected by such inquiries shall be respected.
Section 7. Appearance of Heads of Departments. - The heads of departments may upon their own initiative,
with the consent of the President, or upon the request of either House, as the rules of each House shall provide,
appear before and be heard by such House on any matter pertaining to their departments. Written questions
shall be submitted to the President of the Senate or the Speaker of the House of Representatives at least three
(3) days before their scheduled appearance. Interpellations shall not be limited to written questions, but may
cover matters related thereto. When the security of the State or the public interest so requires and the President
so states in writing, the appearance shall be conducted in executive session.
Section 8. Initiative and Referendum. - The Congress shall, as early as possible, provide for a system of initiative
and referendum and the exceptions therefrom, whereby the people can directly propose and enact laws or
approve or reject any act or law or part thereof passed by the Congress or local legislative body after the
registration of a petition therefor signed by at least ten (10) per centum of the total number of registered voters,
of which every legislative district must be represented by at least three (3) per centum of the registered voters
thereof.
Section 9. Power to Propose Constitutional Amendments. -
(1) Any amendment to, or revision of the Constitution may be proposed by: (a) The Congress, upon a
vote of three-fourths (3/4) of all its Members; or (b) a constitutional convention. The Congress may, by a
vote of two-thirds (2/3) of all its Members, call a constitutional convention, or by a majority vote of all its
Members, submit to the electorate the question of calling such a convention.
(2) Amendments to the Constitution may likewise be directly proposed by the people through initiative
upon a petition of at least twelve (12) per centum of the total number of registered voters, of which
every legislative district must be represented by at least three (3) per centum of the registered voters
therein. No amendments under this paragraph shall be authorized within five years following the
ratification of the 1987 Constitution nor oftener than once every five years thereafter. The Congress shall
provide for the implementation of the exercise of this right.
Section 10. Validity of Constitutional Amendments. -
(1) Any amendment to or revision of the Constitution proposed by Congress or a constitutional
convention shall be valid when ratified by a majority of the votes cast in a plebiscite which shall be held
not earlier than sixty days (60) nor later than ninety days (90) after the approval of such amendment or
revision.
(2) Any amendment to or revision of the Constitution directly proposed by the people through initiative
shall be valid when ratified by a majority of the votes cast in a plebiscite which shall be held not earlier
than sixty days (60) nor later than ninety days (90) after the certification by the Commission on Elections
of the sufficiency of the petition.
CHAPTER 3
EXECUTIVE POWER
Section 11. Exercise of Executive Power. - The Executive power shall be vested in the President.
Section 12. The Vice-President. - There shall be a Vice-President who shall have the same qualifications and
term of office and be elected with and in the same manner as the President. He may be removed from office
in the same manner as the President.
The Vice-President may be appointed as a Member of the Cabinet. Such appointment requires no
confirmation.
Section 13. Vacancy in Office of the President. - In case of death, permanent disability, removal from office, or
resignation of the President, the Vice-President shall become the President to serve the unexpired term. In case
of death, permanent disability, removal from office, or resignation of both the President and Vice-President, the
President of the Senate or, in case of his inability, the Speaker of the House of Representatives, shall then act as
President until the President or Vice-President shall have been elected and qualified.
The Congress shall, by law, provide who shall serve as President in case of death, permanent disability, or
resignation of the Acting President. He shall serve until the President or Vice-President shall have been elected
and qualified, and be subject to the same restrictions of powers and disqualifications as the Acting President.
Section 14. Vacancy in Office of the Vice-President. - Whenever there is a vacancy in the Office of the Vice-
President during the term for which he was elected, the President shall nominate a Vice-President from among
the Members of the Senate and the House of Representatives who shall assume office upon confirmation by a
majority vote of all the Members of both Houses of the Congress, voting separately.
Section 15. Inhibitions Against Executive Officials. - The President, Vice-President, the Members of the Cabinet,
and their deputies or assistants shall not, unless otherwise provided in this Constitution, hold any other office or
employment during their tenure. They shall not, during said tenure, directly or indirectly practice any other
profession, participate in any business, or be financially interested in any contract with, or in any franchise, or
special privilege granted by the Government or any subdivision, agency, or instrumentality thereof, including
government-owned or controlled corporations or their subsidiaries. They shall strictly avoid conflicts of interest in
the conduct of their office.
The spouse and relatives by consanguinity or affinity within the fourth civil degree of the President shall not
during his tenure be appointed as Members of the Constitutional Commissions, or the Office of the
Ombudsman, or as Secretaries, Undersecretaries, chairmen or heads of bureaus or offices, including
government-owned or controlled corporations and their subsidiaries.
CHAPTER 4
JUDICIAL POWER
Section 16. Judicial Power. - The judicial power shall be vested in one (1) Supreme Court, and in such lower
courts as may be established by law. Such lower courts include the Court of Appeals, Sandiganbayan, Court of
Tax Appeals, Regional Trial Courts, Shari's District Courts, Metropolitan Trial Courts, Municipal Trial Courts and
Municipal Circuit Trial Courts, and Shari'a Circuit Courts and they shall continue to exercise their respective
jurisdiction until otherwise provided by law.
Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are
legally demandable and enforceable, and, in cases prescribed by law, to determine whether or not there has
been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or
instrumentality of the Government.
Section 17. Composition of the Supreme Court. - The Supreme Court shall be composed of a Chief Justice and
fourteen Associate Justices. It may sit en banc or in its discretion, in divisions of three, five or seven Members.
Section 18. Jurisdiction and Powers of Supreme Court. - The Supreme Court shall have the following powers:
(1) Exercise original jurisdiction over cases affecting ambassadors, other public ministers and consuls,
and over petitions for certiorari, prohibition, mandamus, quo warranto, and habeas corpus.
(2) Review, revise, reverse, modify, or affirm on appeal or certiorari as the law or the Rules of Court may
provide, final judgments and orders of lower courts in:
(a) All cases in which the constitutionality or validity of any treaty, international or executive
agreement, law, presidential decree, proclamation, order, instruction, ordinance, or regulation is
in question.
(b) All cases involving the legality of any tax, impost, assessment, or toll, or any penalty imposed
in relation thereto.
(c) All cases in which the jurisdiction of any lower court is in issue.
(d) All criminal cases in which the penalty imposed is reclusion perpetua or higher.
(e) All cases in which only an error or question of law is involved.
(3) Assign temporarily judges of lower courts to other stations as public interest may require. Such
temporary assignment shall not exceed six (6) months without the consent of the judge concerned.
(4) Order a change of venue or place of trial to avoid a miscarriage of justice.
(5) Promulgate rules concerning the protection and enforcement of constitutional rights, pleading,
practice, and procedure in all courts, the admission to the practice of law, the Integrated Bar, and
legal assistance to the underprivileged. Such rules shall provide a simplified and inexpensive procedure
for the speedy disposition of cases, shall be uniform for all courts of the same grade; and shall not
diminish, increase, or modify substantive rights. Rules of procedure of special courts and quasi-judicial
bodies shall remain effective unless disapproved by the Supreme Court.
(6) Appoint all officials and employees of the Judiciary in accordance with the Civil Service law.
Section 19. Apportionment of Jurisdiction. - Congress shall define, prescribe and apportion the jurisdiction of the
various courts but may not deprive the Supreme Court of its jurisdiction enumerated in the immediately
preceding section. Neither shall a law be passed increasing its appellate jurisdiction as therein specified without
its advice and concurrence.
No law shall be passed reorganizing the Judiciary when it undermines the security of tenure of its Members.
Section 20. Administrative Supervision.- The Supreme Court shall have administrative supervision over all courts
and the personnel thereof.
Section 21. Judicial and Bar Council. -
(1) A Judicial and Bar Council is hereby created under the supervision of the Supreme Court composed
of the Chief Justice as ex officio Chairman, the Secretary of Justice, and a representative of the
Congress as ex officio Member, a representative of the Integrated Bar, a professor of law, a retired
Member of the Supreme Court, and a representative of the private sector.
(2) The regular members of the Council shall be appointed by the President for a term of four (4) years
with the consent of the Commission of Appointments. Of the Members first appointed, the
representative of the Integrated Bar shall serve for four (4) years, the professor of law for three (3) years,
the retired Justice for two (2) years, and the representative of the private sector for one (1) year.
(3) The Clerk of the Supreme Court shall be the Secretary ex officio of the Council and shall keep a
record of its proceedings.
(4) The regular Members of the Council shall receive such emoluments as may be determined by the
Supreme Court. The Supreme Court shall provide in its annual budget the appropriations for the Council.
(5) The Council shall have the principal function of recommending appointees to the Judiciary. It may
exercise such other functions and duties as the Supreme Court may assign to it.
Section 22. Appointment of Members of Judiciary. - The Members of the Supreme Court and judges of lower
courts shall be appointed by the President from a list of at least three (3) nominees prepared by the Judicial
and Bar Council for every vacancy. Such appointments need no confirmation.
For the lower courts, the President shall issue the appointments within ninety (90) days from the submission of the
list.
Section 23. Prohibition Against Performing Quasi-Judicial or Administrative Functions. - The Members of the
Supreme Court and of other courts established by law shall not be designated to any agency performing
quasi-judicial or administrative functions.
CHAPTER 5
CONSTITUTIONAL COMMISSIONS
Section 24. Constitutional Commissions. - The Constitutional Commissions, which shall be independent, are the
Civil Service Commission, the Commission on Elections, and the Commission on Audit.
Section 25. Inhibitions Against Constitutional Commissioners. - No member of a Constitutional Commission shall,
during his tenure, hold any other office or employment. Neither shall he engage in the practice of any
profession or in the active management or control of any business which in anyway may be affected by the
functions of his office, nor shall he be financially interested, directly or indirectly, in any contract with, or in any
franchise or privilege granted by the Government, any of its subdivisions, agencies, or instrumentalities,
including government-owned or controlled corporations or their subsidiaries.
Section 26. Fiscal Autonomy. - The Constitutional Commissions shall enjoy fiscal autonomy. The approved
annual appropriations shall be automatically and regularly released.
Section 27. Promulgation of Rules. - Each Commission en banc may promulgate its own rules concerning
pleadings and practice before it or before any of its offices. Such rules however shall not diminish, increase, or
modify substantive rights.
Section 28. Decisions by the Constitutional Commissions.- Each Commission shall decide, by a majority vote of
all its Members, any case or matter brought before it within sixty (60) days from the date of its submission for
decision or resolution. A case or matter is deemed submitted for decision or resolution upon the filing of the last
pleading, brief, or memorandum required by the rules of the Commission or by the Commission itself. Unless
otherwise provided by the Constitution or by law, any decision, order, or ruling of each Commission may be
brought to the Supreme Court on certiorari by the aggrieved party within thirty (30) days from receipt of a copy
thereof.
CHAPTER 6
OTHER BODIES
Section 29. Other Bodies. - There shall be in accordance with the Constitution, an Office of the Ombudsman, a
Commission on Human Rights, an independent central monetary authority, and a national police commission.
Likewise, as provided in the Constitution, Congress may establish an independent economic and planning
agency. lawphi1.net
BOOK III
OFFICE OF THE PRESIDENT
Title I
POWERS OF THE PRESIDENT
CHAPTER 1
POWER OF CONTROL
Section 1. Power of Control. - The President shall have control of all the executive departments, bureaus, and
offices. He shall ensure that the laws be faithfully executed.
CHAPTER 2
ORDINANCE POWER
Section 2. Executive Orders. - Acts of the President providing for rules of a general or permanent character in
implementation or execution of constitutional or statutory powers shall be promulgated in executive orders.
Section 3. Administrative Orders. - Acts of the President which relate to particular aspect of governmental
operations in pursuance of his duties as administrative head shall be promulgated in administrative orders.
Section 4. Proclamations. - Acts of the President fixing a date or declaring a status or condition of public
moment or interest, upon the existence of which the operation of a specific law or regulation is made to
depend, shall be promulgated in proclamations which shall have the force of an executive order.
Section 5. Memorandum Orders. - Acts of the President on matters of administrative detail or of subordinate or
temporary interest which only concern a particular officer or office of the Government shall be embodied in
memorandum orders.
Section 6. Memorandum Circulars. - Acts of the President on matters relating to internal administration, which
the President desires to bring to the attention of all or some of the departments, agencies, bureaus or offices of
the Government, for information or compliance, shall be embodied in memorandum circulars.
Section 7. General or Special Orders. - Acts and commands of the President in his capacity as Commander-in-
Chief of the Armed Forces of the Philippines shall be issued as general or special orders.
CHAPTER 3
POWER OVER ALIENS
Section 8. Power to Deport. - The President shall have the power to deport aliens subject to the requirements of
due process.
Section 9. Power to Change Non-Immigrant Status of Aliens. - The President, subject to the provisions of law,
shall have the power to change the status of non-immigrants by allowing them to acquire permanent
residence status without necessity of visa.
Section 10. Power to Countermand Decisions of the Board of Commissioners of the Bureau of Immigration. - The
decision of the Board of Commissioners which has jurisdiction over all deportation cases shall become final and
executory after thirty (30) days from promulgation, unless within such period the President shall order the
contrary.
Section 11. Power over Aliens under the General Principles of International Law. - The President shall exercise
with respect to aliens in the Philippines such powers as are recognized by the generally accepted principles of
international law.
CHAPTER 4
POWERS OF EMINENT DOMAIN, ESCHEAT, LAND RESERVATION AND RECOVERY OF ILL-GOTTEN WEALTH
Section 12. Power of Eminent Domain. - The President shall determine when it is necessary or advantageous to
exercise the power of eminent domain in behalf of the National Government, and direct the Solicitor General,
whenever he deems the action advisable, to institute expropriation proceedings in the proper court.
Section 13. Power to Direct Escheat or Reversion Proceedings. - The President shall direct the Solicitor General to
institute escheat or reversion proceedings over all lands transferred or assigned to persons disqualified under
the Constitution to acquire land.
Section 14. Power to Reserve Lands of the Public and Private Domain of the Government. -
(1) The President shall have the power to reserve for settlement or public use, and for specific public
purposes, any of the lands of the public domain, the use of which is not otherwise directed by law. The
reserved land shall thereafter remain subject to the specific public purpose indicated until otherwise
provided by law or proclamation;
(2) He shall also have the power to reserve from sale or other disposition and for specific public uses or
purposes, any land belonging to the private domain of the Government, or any of the Friar Lands, the
use of which is not otherwise directed by law, and thereafter such land shall be used for the purposes
specified by such proclamation until otherwise provided by law.
Section 15. Power over Ill-gotten Wealth. - The President shall direct the Solicitor General to institute proceedings
to recover properties unlawfully acquired by public officials or employees, from them or from their nominees or
transferees.
Within the period fixed in, or any extension thereof authorized by, the Constitution, the President shall have the
authority to recover ill-gotten properties amassed by the leaders and supporters of the previous regime and
protect the interest of the people through orders of sequestration or freezing of assets or accounts.
CHAPTER 5
POWER OF APPOINTMENT
Section 16. Power of Appointment. - The President shall exercise the power to appoint such officials as provided
for in the Constitution and laws.
Section 17. Power to Issue Temporary Designation. -
(1) The President may temporarily designate an officer already in the government service or any other
competent person to perform the functions of an office in the executive branch, appointment to which
is vested in him by law, when: (a) the officer regularly appointed to the office is unable to perform his
duties by reason of illness, absence or any other cause; or (b) there exists a vacancy;
(2) The person designated shall receive the compensation attached to the position, unless he is already
in the government service in which case he shall receive only such additional compensation as, with his
existing salary, shall not exceed the salary authorized by law for the position filled. The compensation
hereby authorized shall be paid out of the funds appropriated for the office or agency concerned.
(3) In no case shall a temporary designation exceed one (1) year.
CHAPTER 6
GENERAL SUPERVISION OVER LOCAL GOVERNMENTS
Section 18. General Supervision Over Local Governments. - The President shall exercise general supervision over
local governments.
CHAPTER 7
OTHER POWERS
Section 19. Powers Under the Constitution. - The President shall exercise such other powers as are provided for in
the Constitution.
Section 20. Residual Powers. - Unless Congress provides otherwise, the President shall exercise such other powers
and functions vested in the President which are provided for under the laws and which are not specifically
enumerated above, or which are not delegated by the President in accordance with law.
Title II
ORGANIZATION
CHAPTER 8
ORGANIZATION OF THE OFFICE OF THE PRESIDENT
Section 21. Organization. - The Office of the President shall consist of the Office of the President Proper and the
agencies under it.
Section 22. Office of the President Proper. -
(1) The Office of the President Proper shall consist of the Private Office, the Executive Office, the
Common Staff Support System, and the Presidential Special Assistants/Advisers System;
(2) The Executive Office refers to the Offices of the Executive Secretary, Deputy Executive Secretaries
and Assistant Executive Secretaries;
(3) The Common Staff Support System embraces the offices or units under the general categories of
development and management, general government administration and internal administration; and
(4) The President Special Assistants/Advisers System includes such special assistants or advisers as may
be needed by the President.
Section 23. The Agencies under the Office of the President. - The agencies under the Office of the President
refer to those offices placed under the chairmanship of the President, those under the supervision and control
of the President, those under the administrative supervision of the Office of the President, those attached to it
for policy and program coordination, and those that are not placed by law or order creating them under any
specific department.
Title III
FUNCTIONS
CHAPTER 9
FUNCTIONS OF THE DIFFERENT OFFICES IN THE OFFICE OF THE PRESIDENT PROPER
A - PRIVATE OFFICE
Section 24. Functions of the Private Office. - The Private Office shall provide direct services to the President and
shall for this purpose attend to functions and matters that are personal or which pertain to the First Family.
B - THE EXECUTIVE OFFICE
Section 25. Declaration of Policy. - The Executive Office shall be fully responsive to the specific needs and
requirements of the President to achieve the purposes and objectives of the Office.
Section 26. The Executive Secretary, the Deputy Executive Secretaries, and the Assistant Executive Secretaries. -
The Executive Office shall be headed by the Executive Secretary who shall be assisted by one (1) or more
Deputy Executive Secretaries and one (1) or more Assistant Executive Secretaries.
Section 27. Functions of the Executive Secretary. - The Executive Secretary shall, subject to the control and
supervision of the President, carry out the functions assigned by law to the Executive Office and shall perform
such other duties as may be delegated to him. He shall:
(1) Directly assist the President in the management of the affairs pertaining to the Government of the
Republic of the Philippines;
(2) Implement presidential directives, orders and decisions;
(3) Decide, for and in behalf of the President, matters not requiring personal presidential attention;
(4) Exercise supervision and control over the various units in the Office of the President Proper including
their internal administrative requirements;
(5) Exercise supervision, in behalf of the President, over the various agencies under the Office of the
President;
(6) Appoint officials and employees of the Office of the President whose appointments are not vested in
the President;
(7) Provide overall coordination in the operation of the Executive Office;
(8) Determine and assign matters to the appropriate units in the Office of the President;
(9) Have administrative responsibility for matters in the Office of the President coming from the various
departments and agencies of government;
(10) Exercise primary authority to sign papers "By authority of the President", attest executive orders and
other presidential issuances unless attestation is specifically delegated to other officials by him or by the
President;
(11) Determine, with the President's approval, the appropriate assignment of offices and agencies not
placed by law under any specific executive department;
(12) Provide consultative, research, fact-finding and advisory service to the President;
(13) Assist the President in the performance of functions pertaining to legislation;
(14) Assist the President in the administration of special projects;
(15) Take charge of matters pertaining to protocol in State and ceremonial functions;
(16) Provide secretarial and clerical services for the President, the Cabinet, the Council of State, and
other advisory bodies to the President
(17) Promulgate such rules and regulations necessary to carry out the objectives, policies and functions
of the Office of the President Proper;
1. Perform such other functions as the President may direct.
C - COMMON STAFF SUPPORT SYSTEM
Section 28. Functions of the Common Staff Support System. - The various staff units in the Office of the President
Proper shall form a common staff support system and shall be organized along the various tasks of the Office
namely:
(1) The Cabinet Secretariat which shall assist the President in the establishment of agenda topics for the
Cabinet deliberation, or facilitate the discussion of cabinet meetings. It shall have such organization,
powers and functions as are prescribed by law;
(2) The Presidential Management Staff (PMS) which shall be the primary governmental agency directly
responsible to the Office of the President for providing staff assistance in the Presidential exercise of
overall management of the development process. It shall have such organization, powers and functions
as are prescribed by law;
(3) General Government Administration Staff which shall provide the President with staff support on
matters concerning general government administration relative to the operations of the national
government including the provision of legal services, administrative services, staff work on political and
legislative matters, information and assistance to the general public, measures toward resolution of
complaints against public officials and employees brought to the attention of the Office of the
President and such other matters as the President may assign;
(4) Internal Administrative Staff which shall render auxiliary and support services for the internal
administration of the Office of the President.
D - PRESIDENTIAL ASSISTANT/ADVISERS SYSTEM
Section 29. Functions of Presidential Assistants/Advisers Systems. - The Special Assistants/Advisers System shall
provide advisory or consultative services to the President in such fields and under such conditions as the
President may determine.
CHAPTER 10
FUNCTIONS OF THE AGENCIES UNDER THE OFFICE OF THE PRESIDENT
Section 30. Functions of Agencies Under the Office of the President. - Agencies under the Office of the
President shall continue to operate and function in accordance with their respective charters or laws creating
them, except as otherwise provided in this Code or by law.
Section 31. Continuing Authority of the President to Reorganize his Office. - The President, subject to the policy
in the Executive Office and in order to achieve simplicity, economy and efficiency, shall have continuing
authority to reorganize the administrative structure of the Office of the President. For this purpose, he may take
any of the following actions:
(1) Restructure the internal organization of the Office of the President Proper, including the immediate
Offices, the Presidential Special Assistants/Advisers System and the Common staff Support System, by
abolishing, consolidating or merging units thereof or transferring functions from one unit to another;
(2) Transfer any function under the Office of the President to any other Department or Agency as well as
transfer functions to the Office of the President from other Departments and Agencies; and
(3) Transfer any agency under the Office of the President to any other department or agency as well as
transfer agencies to the Office of the President from other departments or agencies.
BOOK IV
THE EXECUTIVE BRANCH
CHAPTER 1
THE DEPARTMENTS
Section 1. Purpose and Number of Departments. - The Executive Branch shall have such Departments as are
necessary for the functional distribution of the work of the President and for the performance of their functions.
Section 2. Declaration of Policy. -
(1) The Departments shall be organized and maintained to insure their capacity to plan and implement
programs in accordance with established national policies;
(2) Bureaus and offices shall be grouped primarily on the basis of major functions to achieve simplicity,
economy and efficiency in government operations and minimize duplication and overlapping of
activities; and
(3) The functions of the different Departments shall be decentralized in order to reduce red tape, free
central officials from administrative details concerning field operations, and relieve them from
unnecessary involvement in routine and local matters. Adequate authority shall be delegated to
subordinate officials. Administrative decisions and actions shall, as much as feasible, be at the level
closest to the public.
Section 3. Department Proper. -
(1) Unless otherwise provided in this Code or by law, the Department proper shall include the Office of
the Secretary and the staff consist of the Secretary and the Undersecretary or Undersecretaries,
together with the personnel in their immediate offices;
(2) Every Secretary shall be assisted by such number of Undersecretaries as may be provided for by this
Code or by law;
The Undersecretary shall perform the functions as provided in Chapter 2 of this Book;
(3) Whenever necessary, Assistant Secretary position or positions may be created to form part of the
Department proper; and
(4) In the absence of special provisions, the major staff units of each department shall be the services
which shall include: the Planning Service, the Financial and Management Service, the Administrative
Service, and when necessary, the Technical and Legal Services.
Section 4. Jurisdiction over Bureaus, Offices, Regulatory Agencies and Government Corporations. - Each
Department shall have jurisdiction over bureaus, offices, regulatory agencies, and government-owned or
controlled corporations assigned to it by law, in accordance with the applicable relationship as defined in
Chapter 7, 8, and 9 of this Book.
Section 5. Assignment of Offices and Agencies. - The President shall, by executive order, assign offices and
agencies not otherwise assigned by law to any department, or indicate to which department a government
corporation or board may be attached.
CHAPTER 2
SECRETARIES, UNDERSECRETARIES, AND ASSISTANT SECRETARIES
Section 6. Authority and Responsibility of the Secretary. - The authority and responsibility for the exercise of the
mandate of the Department and for the discharge of its powers and functions shall be vested in the Secretary,
who shall have supervision and control of the Department.
Section 7. Powers and Functions of the Secretary. - The Secretary shall:
(1) Advise the President in issuing executive orders, regulations, proclamations and other issuances, the
promulgation of which is expressly vested by law in the President relative to matters under the
jurisdiction of the Department;
(2) Establish the policies and standards for the operation of the Department pursuant to the approved
programs of governments;
(3) Promulgate rules and regulations necessary to carry out department objectives, policies, functions,
plans, programs and projects;
(4) Promulgate administrative issuances necessary for the efficient administration of the offices under
the Secretary and for proper execution of the laws relative thereto. These issuances shall not prescribe
penalties for their violation, except when expressly authorized by law;
(5) Exercise disciplinary powers over officers and employees under the Secretary in accordance with
law, including their investigation and the designation of a committee or officer to conduct such
investigation;
(6) Appoint all officers and employees of the Department except those whose appointments are vested
in the President or in some other appointing authority; Provided, however, that where the Department is
regionalized on a department-wide basis, the Secretary shall appoint employees to positions in the
second level in the regional offices as defined in this Code;
(7) Exercise jurisdiction over all bureaus, offices, agencies and corporations under the Department as
are provided by law, and in accordance with the applicable relationships as specified in Chapters 7, 8,
and 9 of this Book;
(8) Delegate authority to officers and employees under the Secretary's direction in accordance with this
Code; and
(9) Perform such other functions as may be provided by law.
Section 8. Submission of Performance Evaluation Reports. - The Secretary shall formulate and enforce a system
of measuring and evaluating periodically and objectively the performance of the Department and submit the
same annually to the President.
Section 9. Submission of Budget Estimates. - The Secretary shall prepare and submit to the President through the
Department of Budget and Management an estimate of the necessary expenditures of the department during
the next fiscal year, on the basis of the reports and estimates submitted by bureaus and officers under him.
Section 10. Powers and Duties of the Undersecretary. - The Undersecretary shall:
(1) Advise and assist the Secretary in the formulation and implementation of department objectives and
policies;
(2) Oversee all the operational activities of the department for which he shall be responsible to the
Secretary;
(3) Coordinate the programs and projects of the department and be responsible for its economical,
efficient and effective administration;
(4) Serve as deputy to the Secretary in all matters relating to the operations of the department;
(5) Temporarily discharge the duties of the Secretary in the latter's absence or inability to discharge his
duties for any cause or in case of vacancy of the said office, unless otherwise provided by law. Where
there are more than one Undersecretary, the Secretary shall allocate the foregoing powers and duties
among them. The President shall likewise make the temporary designation of Acting Secretary from
among them; and
(6) Perform such other functions and duties as may be provided by law.
Section 11. Duties and Functions of the Assistant Secretary. - The Assistant Secretary shall perform such duties
and functions as may be provided by law or assigned to him by the Secretary.
CHAPTER 3
DEPARTMENT SERVICES
Section 12. Department Services. - Except as otherwise provided by law, each Department shall have
Department Services which shall include the Planning Service, the Financial and Management Service, the
Administrative Service, and whenever necessary the Technical and Legal Services.
Section 13. Planning Service. - The Planning Service shall provide the department with economical, efficient
and effective services relating to planning, programming, and project development, and discharge such other
functions as may be provided by law. Where the work of the department does not call for substantial planning
and programming, the Planning Service shall be constituted as a single unit without subdivisions. Where
substantial primary data-gathering is essential to the operations of the department, a statistical unit may be
constituted as part of a technical service.
Section 14. Financial and Management Services. - The Financial and Management Services shall advise and
assist the Secretary on financial and management matters and shall perform such other functions as may be
provided by law.
Section 15. Administrative Service. - The Administrative Service shall provide the Department with economical,
efficient and effective services relating to personnel, legal assistance, information, records, delivery and receipt
of correspondence, supplies, equipment, collections, disbursement, security and custodial work. It shall also
perform such other functions as may be provided by law.
Section 16. Technical Service. - Whenever necessary, one or more technical services shall be established to
take charge of technical staff activities essential to a department and which cannot be allocated to the three
other services or to the bureaus.
Section 17. Legal Service. - A Legal Service shall be provided where the operations of the department involve
substantial legal work, in which case the Administrative Service shall not have a Legal Division. The Legal
Service shall provide legal advice to the department; interpret laws and rules affecting the operation of the
department; prepare contracts and instruments to which the department is a party, and interpret provisions of
contracts covering work performed for the department by private entities; assist in the promulgation of rules
governing the activities of the department; prepare comments on proposed legislation concerning the
department; answer legal queries from the public; assist the Solicitor General in suits involving the Department
or its officers, or employees or act as their principal counsel in all actions taken in their official capacity before
judicial or administrative bodies; and perform such other functions as may be provided by law.
Where the workload of the department does not warrant a Legal Service or a Legal Division, there shall be one
or more legal assistants in the Office of the Secretary.
CHAPTER 4
BUREAUS
Section 18. Bureaus in General. -
(1) A Bureau is any principal subdivision of the department performing a single major function or closely
related functions. Bureaus are either staff or line.
(2) Each bureau shall be headed by a Director who may have one or more Assistant Directors as
provided by law; and
(3) Each bureau may have as many divisions as are provided by law for the economical, efficient and
effective performance of its functions.
Section 19. Staff Bureau. -
(1) A staff bureau shall primarily perform policy, program development and advisory functions.
(2) The Director of a staff bureau shall:
(a) Advise and assist the Office of the Secretary on matters pertaining to the Bureau's area of
specialization;
(b) Provide consultative and advisory services to the regional offices of the department;
(c) Develop plans, programs, operating standards, and administrative techniques for the
attainment of the objectives and functions of the bureau; and
(d) Perform such other duties as may be provided by law.
(3) The staff bureau shall avail itself of the planning, financial and administrative services in the
department proper. The bureau may have a separate administrative division, if circumstances so
warrant.
Section 20. Line Bureau. -
(1) A line bureau shall directly implement programs adopted pursuant to department policies and
plans.
(2) The Director of a line bureau shall:
(a) Exercise supervision and control over all division and other units, including regional offices,
under the bureau;
(b) Establish policies and standards for the operations of the bureau pursuant to the plans and
programs of the department;
(c) Promulgate rules and regulations necessary to carry out bureau objectives, policies and
functions; and
(d) Perform such other duties as may be provided by law.
1. The line bureau may have staff units, as may be necessary, corresponding to the services of the
department proper. If the bureau is small, only a single unit performing combined staff functions
may be provided.
CHAPTER 5
FIELD OFFICES
Section 21. Regional Offices. - Regional Offices shall be established according to law defining field service
areas. The administrative regions shall be composed of a National Capital Region and Regions I to XII.
Provincial and district offices may be established only by law whenever necessary.
Section 22. Integration of Field Service. - Except as otherwise provided by law and when the needs of the
service so require, the department or agency shall organize an integrated regional office on a department or
agency-wide basis.
Section 23. Administration of Regional Office. - The regional office shall be headed by a Regional Director who
may be assisted by one (1) Assistant Regional Director, except as may otherwise be provided by law. The
Regional Director shall be responsible for department or agency functions performed in the region under his
jurisdiction.
Section 24. Supervision of Regional Offices. -
(1) Whenever the function or activity of a department or agency requires central or interregional action,
the function may be performed by the regional offices under the supervision and control of the
department proper or line bureau concerned.
(2) The staff bureau or division shall perform primarily advisory or auxiliary functions and exercise in
behalf of the department or agency functional supervision over the regional offices. This shall include
authority to develop and set down standards, policies and procedures to be implemented by
operating units, and to evaluate continuously such implementation for the purpose of recommending
or when authorized, taking corrective measures.
Section 25. Organization of Regional Offices. - Regional offices organized on a department wide basis shall
have units or personnel in which the functional areas of the staff bureaus and services in the department shall
be represented. Regional offices of a line bureau may have units or personnel in which the functional areas of
the primary units of the bureau are represented. Related functions of regional units shall be consolidated.
Section 26. Functions of a Regional Office. -
(1) A regional office shall:
(a) Implement laws, policies, plans, programs, rules and regulations of the department or
agency in the regional area;
(b) Provide economical, efficient and effective service to the people in the area;
(c) Coordinate with regional offices of other departments, bureaus and agencies in the area;
(d) Coordinate with local government units in the area; and
(e) Perform such other functions as may be provided by law.
(2) District offices may be established only in cases of clear necessity.
Section 27. Duties of a Regional Director. - The Regional Director shall:
(1) Implement laws, policies, rules and regulations within the responsibility of the agency;
(2) Implement agency programs in the region;
(3) Exercise the management functions of planning organizing, directing and controlling
(4) Appoint personnel to positions in the first level and casual and seasonal employees; and exercise
disciplinary actions over them in accordance with the Civil Service Law;
(5) Approve sick, vacation and maternity leaves of absence with or without pay, for a period not
beyond one year;
(6) Prepare and submit budget proposals for the region to the central office, administer the budget of
the regional office, authorize disbursement of funds pursuant to approved financial and work programs,
and administer the budget control machinery in the region;
(7) Approve requisition for supplies, materials and equipment, as well as books and periodicals, and
other items for the region, in accordance with the approved supply procurement program;
(8) Negotiate and enter into contracts for services or furnishing supplies, materials and equipment to the
regional office involving an amount not exceeding fifty thousand pesos (P50,000.00) within a given
quarter, provided that authority in excess of fifty thousand pesos (P50,000.00) may be further authorized
by the proper department or agency head;
(9) Approve claims for benefits under existing laws;
(10) Approve requests for overtime services;
(11) Promote coordination among the regional offices, and between his regional office and local
government units in the region;
(12) Provide housekeeping services for the regional office;
(13) Approve application of personnel for permission to teach, exercise a profession, or engage in
business outside of office hours in accordance with standards and guidelines of the Civil Service
Commission;
(14) Issue travel vouchers authorizing employees to travel on official business within the region for a
period not exceeding thirty days;
(15) Approve attendance of personnel in conferences, seminars, and non-degree training programs
within the region;
(16) Authorize the allocation of funds to provincial/district offices; and
(17) Perform such other duties and functions as may be provided by law or further delegated by the
head of agency or other proper authorities concerned.
Section 28. Review of Acts of Regional Director. - Nothing in the preceding Section shall be construed as a
limitation on the power of the Secretary to review and modify, alter or reverse any action of the Regional
Director, or to initiate promotions and transfers of personnel from one region to another.
CHAPTER 6
POWERS AND DUTIES OF HEADS OF BUREAUS OR OFFICES
Section 29. Powers and Duties in General. - The head of bureau or office shall be its chief executive officer. He
shall exercise overall authority in matters within the jurisdiction of the bureau, office or agency, including those
relating to its operations, and enforce all laws and regulations pertaining to it.
Section 30. Authority to Appoint and Discipline. - The head of bureau or office shall appoint personnel to all
positions in his bureau or office, in accordance with law. In the case of the line bureau or office, the head shall
also appoint the second level personnel of the regional offices, unless such power has been delegated. He
shall have the authority to discipline employees in accordance with the Civil Service Law.
Section 31. Duties of Assistant Heads and Subordinates. -
(1) Assistant heads and other subordinates in every bureau or office shall perform such duties as may be
required by law or regulations, or as may be specified by their superiors not otherwise inconsistent with
law;
(2) The head of bureau or office may, in the interest of economy, designate the assistant head to act as
chief of any division or unit within the organization, in addition to his duties, without additional
compensation; and
(3) In the absence of special restriction prescribed by law, nothing shall prevent a subordinate officer or
employee from being assigned additional duties by proper authority, when not inconsistent with the
performance of the duties imposed by law.
Section 32. Acting Head of Bureau or Office. - In case of the absence or disability of the head of a bureau or
office, his duties shall be performed by the assistant head. When there are two or more assistant heads, the
Secretary shall make the designation. In the absence of an assistant head, the Secretary may designate any
officer or employee of the bureau or office as acting head without additional compensation.
Section 33. Performance of Duties of Subordinate Officers Temporarily Absent. - In case of the temporary
absence or disability of any subordinate officer or employee in any bureau or office, its head may, subject to
existing laws, rules and regulations, designate any other subordinate officer or employee within the organization
to perform temporarily the duties of the absent or disabled person.
Section 34. Filling of Vacancies. - Vacancies caused by death, resignation or removal of any officer or
subordinate may be temporarily filled in the same manner as in the case of temporary absence or disability.
The vacancies shall not be filled by permanent appointment, until the expiration of any leave allowable to the
predecessor, unless the exigencies of the service require that the appointment be made immediately.
Section 35. Power to Require Bonds. -
(1) The head of each bureau or office shall, consistent with law, rules and regulations, prescribe the form
and fix the amount of all bonds executed by private parties to the government under the laws
pertaining to his bureau or office. He shall pass on the sufficiency of the security and retain possession of
the bond.
(2) When it appears that any such bond is insufficient, the head may require additional security. He may
withdraw the privilege secured by the bond upon failure of the party to give additional security within
the period fixed in the notice, but such an action shall be without prejudice to the liability of any person
or property already obligated.
Section 36. Authority to Prescribe Forms and Issue Regulations. -
(1) The head of a bureau or office shall prescribe forms and issue circulars or orders to secure the
harmonious and efficient administration of his bureau or office and to carry into full effect the laws
relating to matters within his jurisdiction. Penalties shall not be prescribed in any circular or order for its
violation, except as expressly allowed by law;
(2) Heads of bureaus or offices are authorized to issue orders regarding the administration of their
internal affairs for the guidance of or compliance by their officers and employees;
(3) Regional directors are authorized to issue circulars of purely information or implementing nature and
orders relating to the administration of the internal affairs of regional offices and units within their
supervision; and
(4) Issuances under paragraphs (2) and (3) hereof shall not require, for their effectivity, approval by the
Secretary or other authority.
Section 37. Annual Reports. -
(1) All heads of bureaus or offices of the national government shall render annual reports to their
respective Secretaries on or before the last day of February of each year.
(2) The reports shall contain concise statements of accomplishments and assessment of the progress
attained in terms of approved programs and projects, including pertinent financial statements on
expenditures incurred in their implementation during the calendar year. Broad recommendations and
plans for undertaking work during the ensuing period shall be included together with matters specifically
required by law or regulation to be incorporated therein.
CHAPTER 7
ADMINISTRATIVE RELATIONSHIP
Section 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:
(1) Supervision and Control. - Supervision and control shall include authority to act directly whenever a
specific function is entrusted by law or regulation to a subordinate; direct the performance of duty;
restrain the commission of acts; review, approve, reverse or modify acts and decisions of subordinate
officials or units; determine priorities in the execution of plans and programs; and prescribe standards,
guidelines, plans and programs. Unless a different meaning is explicitly provided in the specific law
governing the relationship of particular agencies, the word "control" shall encompass supervision and
control as defined in this paragraph.
(2) Administrative Supervision. - (a) Administrative supervision which shall govern the administrative
relationship between a department or its equivalent and regulatory agencies or other agencies as may
be provided by law, shall be limited to the authority of the department or its equivalent to generally
oversee the operations of such agencies and to insure that they are managed effectively, efficiently
and economically but without interference with day-to-day activities; or require the submission of
reports and cause the conduct of management audit, performance evaluation and inspection to
determine compliance with policies, standards and guidelines of the department; to take such action
as may be necessary for the proper performance of official functions, including rectification of
violations, abuses and other forms of maladministration; and to review and pass upon budget proposals
of such agencies but may not increase or add to them;
(b) Such authority shall not, however, extend to: (1) appointments and other personnel actions in
accordance with the decentralization of personnel functions under the Code, except appeal is made
from an action of the appointing authority, in which case the appeal shall be initially sent to the
department or its equivalent, subject to appeal in accordance with law; (2) contracts entered into by
the agency in the pursuit of its objectives, the review of which and other procedures related thereto
shall be governed by appropriate laws, rules and regulations; and (3) the power to review, reverse,
revise, or modify the decisions of regulatory agencies in the exercise of their regulatory or quasi-judicial
functions; and
(c) Unless a different meaning is explicitly provided in the specific law governing the relationship of
particular agencies, the word "supervision" shall encompass administrative supervision as defined in this
paragraph.
(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;
(b) Matters of day-to-day administration or all those pertaining to internal operations shall be left to the
discretion or judgment of the executive officer of the agency or corporation. In the event that the
Secretary and the head of the board or the attached agency or corporation strongly disagree on the
interpretation and application of policies, and the Secretary is unable to resolve the disagreement, he
shall bring the matter to the President for resolution and direction;
(c) Government-owned or controlled corporations attached to a department shall submit to the
Secretary concerned their audited financial statements within sixty (60) days after the close of the fiscal
year; and
(d) Pending submission of the required financial statements, the corporation shall continue to operate
on the basis of the preceding year's budget until the financial statements shall have been submitted.
Should any government-owned or controlled corporation incur an operation deficit at the close of its
fiscal year, it shall be subject to administrative supervision of the department; and the corporation's
operating and capital budget shall be subject to the department's examination, review, modification
and approval.
CHAPTER 8
SUPERVISION AND CONTROL
Section 39. Secretary's Authority. -
(1) The Secretary shall have supervision and control over the bureaus, offices, and agencies under him,
subject to the following guidelines:
(a) Initiative and freedom of action on the part of subordinate units shall be encouraged and
promoted, rather than curtailed, and reasonable opportunity to act shall be afforded those units
before control is exercised;
(b) With respect to functions involving discretion, experienced judgment or expertise vested by
law upon a subordinate agency, control shall be exercised in accordance with said law; and
(c) With respect to any regulatory function of an agency subject to department control, the
authority of the department shall be governed by the provisions of Chapter 9 of this book.
(2) This Chapter shall not apply to chartered institutions or government-owned or controlled
corporations attached to the department.
Section 40. Delegation of Authority. - The Secretary or the head of an agency shall have authority over and
responsibility for its operation. He shall delegate such authority to the bureau and regional directors as may be
necessary for them to implement plans and programs adequately. Delegated authority shall be to the extent
necessary for economical, efficient and effective implementation of national and local programs in
accordance with policies and standards developed by each department or agency with the participation of
the regional directors. The delegation shall be in writing; shall indicate to which officer or class of officers or
employees the delegation is made; and shall vest sufficient authority to enable the delegate to discharge his
assigned responsibility.
Section 41. Line Bureau Authority. -
(1) Line bureaus of a department shall exercise supervision and control over their regional and other
field offices. They shall be directly responsible for the development and implementation of plans and
programs within their respective functional specializations; and
(2) The regional and other field offices shall constitute the operating arms of the bureau concerned for
the direct implementation of the plans and programs drawn up in accordance with approved policies
and standards. As counterparts of the bureau in the region, they shall undertake bureau operations
within their respective jurisdictions, and be directly responsible to their bureau director.
CHAPTER 9
RELATIONSHIPS OF GOVERNMENT-OWNED OR CONTROLLED CORPORATIONS AND REGULATORY AGENCIES TO THE
DEPARTMENT
Section 42. Government-Owned or Controlled Corporations. - Government-owned or controlled corporations
shall be attached to the appropriate department with which they have allied functions, as hereinafter
provided, or as may be provided by executive order, for policy and program coordination and for general
supervision provided in pertinent provisions of this Code.
In order to fully protect the interests of the government in government-owned or controlled corporations, at
least one-third (1/3) of the members of the Boards of such corporations should either be a Secretary, or
Undersecretary, or Assistant Secretary.
Section 43. Regulatory Agencies. -
(1) A regulatory agency shall be subject to the administrative supervision of the department under
which they are placed, except when they are government corporations in which case they shall be
governed by the provisions of the preceding section;
(2) The heads of regulatory agencies shall submit annually, for the approval of the Secretary
concerned, their budgets and work plans which shall be the basis of their day-to-day operations; and
(3) The regulatory agencies may avail themselves of the common auxiliary and management services
of the department as may be convenient and economical for their operations.
CHAPTER 10
APPOINTMENTS AND QUALIFICATIONS
Section 44. Appointment of Secretaries. - The Secretaries of Departments shall be appointed by the President
with the consent of the Commission on Appointments, at the beginning of his term of office, and shall hold
office, unless sooner removed, until the expiration of his term of office, or until their successors shall have been
appointed and qualified.
Section 45. Qualifications of Secretaries. - The Secretaries shall be citizens of the Philippines and not less than
twenty-five years of age.
Section 46. Appointments of Undersecretaries and Assistant Secretaries. - The Undersecretaries and Assistant
Secretaries of Departments shall, upon the nomination of the Secretary of the Department concerned, be
appointed by the President.
Section 47. Appointment to other Senior Positions and their Equivalents. - Directors and Assistant Directors of
Bureaus, Regional and Assistant Regional Directors, Department Service Chiefs, and their Equivalents shall be
appointed by the President in accordance with law, rules and regulations.
Section 48. Disqualification of the spouse and relatives of the President. - The spouse and relatives by
consanguinity or affinity within the fourth civil degree of the President shall not during his tenure be appointed
as Secretaries, Undersecretaries, Chairmen or heads of bureaus or offices including government-owned or
controlled corporations and their subsidiaries.
Section 49. Inhibitions Against Holding More than Two Positions. - Even, if allowed by law or by the primary
functions of his position, a member of the Cabinet, undersecretary, assistant secretary or other appointive
official of the Executive Department may, in addition to his primary position, hold not more than two positions in
the government and government-owned corporations and receive the corresponding compensation therefor:
Provided, that this limitation shall not apply to ad hoc bodies or committees, or to boards, councils or bodies of
which the President is the Chairman.
If a Secretary, Undersecretary, Assistant Secretary or other appointive official of the Executive Department
holds more positions than what is allowed in the preceding paragraph, he must relinquish the excess positions in
favor of a subordinate official who is next in rank, but in no case shall any official hold more than two positions
other than his primary position.
CHAPTER 11
ADMINISTRATIVE ISSUANCES
Section 50. General Classification of Issuances. - The administrative issuances of Secretaries and heads of
bureaus, offices or agencies shall be in the form of circulars or orders.
(1) Circulars shall refer to issuances prescribing policies, rules and regulations, and procedures
promulgated pursuant to law, applicable to individuals and organizations outside the Government and
designed to supplement provisions of the law or to provide means for carrying them out, including
information relating thereto; and
(2) Orders shall refer to issuances directed to particular offices, officials, or employees, concerning
specific matters including assignments, detail and transfer of personnel, for observance or compliance
by all concerned.
Section 51. Numbering System of Issuances. - Every circular or order issued pursuant to the preceding section
shall properly be identified as such and chronologically numbered. Each class of issuance shall begin with
number 1 of each calendar year .
Section 52. Official Logbook. - Each department, bureau, office or agency shall keep and preserve a logbook
in which shall be recorded in chronological order, all final official acts, decisions, transactions or contracts,
pertaining to the department, bureau, office or agency. Whenever the performance of an official act is in
issue, the date and the time record in the logbook shall be controlling. The logbook shall be in the custody of
the chief Administrative Officer concerned and shall be open to the public for inspection.
Section 53. Government-wide Application of the Classification of Issuances. -
(1) The Records Management and Archives Office in the General Services Administration shall provide
such assistance as may be necessary to effect general adherence to the foregoing classification of
issuances, including the conduct of studies for developing sub-classifications and guidelines to meet
peculiar needs; and
(2) All administrative issuances of a general or permanent character shall be compiled, indexed and
published pursuant to the provisions of this Code.
CHAPTER 12
MISCELLANEOUS RECEIPTS
Section 54. Charges for Property Sold or Services Rendered; Refunds. -
(1) For services required by law to be rendered for a fee, for supplies furnished, or articles of any kind
sold to other divisions of the government or to any person, the head of bureau, office or agency may,
upon approval of the Secretary charge and collect the cost of the service, supplies, or articles or other
rate in excess of cost prescribed by law or approved by the same authority. For local governments, the
rate, except where otherwise prescribed by law, shall be affixed at cost or at such other reasonable
rate in excess of cost by the boards or councils concerned;
(2) The officer authorized to fix the amount to be paid for service rendered and supplies or articles
furnished or sold may recommend that the whole or part of any sum so paid be refunded, upon
approval of the Commission on Audit.
Section 55. Disposition of Miscellaneous Bureau Receipts. - In the absence of special provision, money collected
for property sold or service rendered, and all other receipts or earnings of bureaus, offices, and agencies not
derived from taxation, shall accrue to the general unappropriated funds of the National Government.
Section 56. Printing of Studies and Researches. - With the approval of the Secretary, a bureau, office, or agency
may print its studies, researches and similar materials for distribution at cost to the public. The Secretary may
authorize the printing or reprinting of the said materials by private persons for sale to the public upon payment
of such royalties as may be fixed by him, which shall accrue to the general fund.
CHAPTER 13
CONTRACTS
Section 57. Conveyances and Contracts to which the Government is a Party. - Any deed, instrument or
contract conveying the title to real estate or to any other property the value of which does not exceed fifty
million pesos (P50,000,000) awarded through public bidding, and five million pesos (P5,000,000) awarded
through negotiation, shall be executed and signed by the respective Secretary on behalf of the Government
of the Philippines. Where the value of the property exceeds the aforesaid ceilings, such deed, instrument or
contract shall be executed and signed by the President of the Philippines on behalf of the Government.
Section 58. Ceiling for Infrastructure Contracts. - The following shall be the ceilings for all civil works, construction
and other contracts for infrastructure projects, including supply contracts for said projects, awarded through
public bidding or through negotiation, which may be approved by the Secretaries of Public Works and
Highways, Transportation and Communications, Local Government with respect to Rural Road Improvement
Project, and governing boards of government-owned or controlled corporations:
Awarded Awarded
through Public through
Bidding Negotiation

a. Secretary of Public Works and Highways P100 Mil. P10 Mil.

b. Secretary of Transportation and 100 Mil. 10 Mil.


Communications

c. Secretary of Local Government with 100 Mil. 2 Mil.


respect to the Rural Road Improvement
Project

d. Government Boards of Infra- structure 50 Mil. 5 Mil.


Corporations (National Power Corporation,
National Irrigation Administration,
Metropolitan Waterworks and Sewerage
System, National Housing Authority,
Philippine Port Authority, National
Electrification Administration, Export
Processing Zone Authority, Philippine
National Railways, Local Water Utilities
Administration, Light Rail Transit Authority
and Philippine National Oil Company)

e. Governing Boards of Non-Infrastructure 7.5 Mil. 1 Mil.


Corporations
Save as provided for above, the approval ceilings assigned to the departments/agencies involved in national
infrastructure and construction projects shall remain at the levels provided in existing laws, rules and regulations.
Section 59. Contracts for Approval by the President. - Contracts for infrastructure projects, including contracts
for the supply of materials and equipment to be used in said projects, which involve amounts above the
ceilings provided in the preceding section shall be approved by the President: Provided, That the President
may, when conditions so warrant, and upon recommendation of the National Economic and Development
Authority, revise the aforesaid ceilings of approving authority.
Section 60. Approval of Consultancy Contracts. - All purely consultancy contracts relating to infrastructure
projects, regardless of amount, shall be approved by the Secretaries concerned, in accordance with the
Guidelines on the Hiring of Consultants to be promulgated by the National Economic and Development
Authority: Provided, That the National Economic and Development Authority shall be furnished by the
departments, agencies or government corporations concerned, copies of all consultancy contracts entered
into by them involving an amount in excess of P1 million for monitoring purposes.
Section 61. Delegation of Authority to Governing Boards of Government Corporations. - The Secretaries are
authorized to delegate to the governing boards of government-owned or controlled corporations which are
attached to or are under the administrative supervision of their respective departments, the authority to
approve contracts for infrastructure projects entered into by said corporations involving amounts which are
beyond the ceiling provided for government corporations under Section 57 hereof but which are within the
approving authority of the Secretaries under the said Section. In the case of government corporations which
are attached to or under the Office of the President, the delegation shall be made by the Executive Secretary.
Section 62. Public Bidding of Contracts; Exceptions. - As a general rule, contracts for infrastructure projects shall
be awarded after open public bidding to bidders who submit the lowest responsive/evaluated bids. Open
Public Bidding shall be conducted among prequalified contractors in accordance with laws, rules and
regulations not inconsistent with the provisions of this Chapter. The award of such contracts through
negotiations shall only be allowed by the Secretary or Governing Board of the Corporation concerned within
the limits as stated in Section 57 hereof in the following cases:
a. In times of emergencies arising from natural calamities where immediate action is necessary to
prevent imminent loss of life or property, in which case, direct negotiation or simplified bidding may be
undertaken;
b. Failure to award the contract after competitive public bidding for valid cause or causes, in which
case, simplified bidding may be undertaken; and
c. Where the construction project covered by the contract is adjacent or contiguous to an on-going
project and it could be economically prosecuted by the same contractor, in which case, direct
negotiation may be undertaken with the said contractor at the same unit prices and contract
conditions, less mobilization costs, provided that he has no negative slippage and has demonstrated a
satisfactory performance. Otherwise, the contract shall be awarded through public bidding.
Section 63. Contracts for Community Employment and Development Program Projects. - Contracts covering
projects under the Community Employment and Development Program of the government shall be awarded
through open public bidding: Provided, That the invitation to bid for the said projects shall be advertised at
least once within one week in a newspaper of local circulation within the province where the project is
situated, through posting of notices in the premises of the municipal/provincial office, and through other forms
of media, such as radio and television: Provided, further, That the deadline for submission of bids for projects
costing not more than P1 million each may be shortened to one week after the date of such invitation, posting
of notices or advertisement through other forms of media.
Section 64. Constitution of the Prequalification, Bids, and Awards Committee. - Each department, office or
agency shall have in its head office or in its implementing offices a Prequalification, Bids and Awards
Committee which shall be responsible for the conduct of prequalification of contractors, biddings, evaluation
of bids and recommending awards of contracts. Each Prequalification, Bids and Awards Committee shall be
composed of the following:
a. A Chairman (regular) who should at least be a third ranking official of the
department/agency/implementing Office;
b. An Executive Officer and Secretary (regular) who is a Legal Officer of the
department/office/implementing office;
c. A Technical Member (regular) to be designated by the Secretary or the head of the
office/agency/implementing office;
d. Two members (provisional) with experience in the type of project to be bidded and in project
management, duly designated by the Secretary or the head of the office/implementing office on a
project-to-project basis; and
e. A representative from at least one of the following organizations who shall be a non-voting member:
1. Philippine Institute of Civil Engineers
2. Philippine Contractors Association
3. National Confederation of Contractors Associations of the Philippines, Inc.
4. Philippine Institute of Certified Public Accountants
The representation in the Prequalification, Bids and Awards Committee of the above-mentioned private
organizations shall be made as follows:
1. During the prequalification stage, the representative to be invited shall come from the Philippine
Institute of Certified Public Accountants; and
2. In the bidding, bid evaluation and award stages, a representative each from the Philippine Institute of
Certified Public Accountants and from the Philippine Contractors Association or the National
Confederation of Contractors Associations of the Philippines, Inc. shall be invited as non-voting
members of the Prequalification, Bids and Awards Committee without prejudice to inviting another
representative/s from any of the other organizations mentioned above.
Section 65. Approval of other types of Government Contracts. - All other types of government contracts which
are not within the coverage of this Chapter shall, in the absence of a special provision, be executed with the
approval of the Secretary or by the head of the bureau or office having control of the appropriation against
which the contract would create a charge. Such contracts shall be processed and approved in accordance
with existing laws, rules and regulations.
CHAPTER 14
CONTROVERSIES AMONG GOVERNMENT OFFICES AND CORPORATIONS
Section 66. How Settled. - All disputes, claims and controversies, solely between or among the departments,
bureaus, offices, agencies and instrumentalities of the National Government, including government-owned or
controlled corporations, such as those arising from the interpretation and application of statutes, contracts or
agreements, shall be administratively settled or adjudicated in the manner provided in this Chapter. This
Chapter shall, however, not apply to disputes involving the Congress, the Supreme Court, the Constitutional
Commissions, and local governments.
Section 67. Disputes Involving Questions of Law. - All cases involving only questions of law shall be submitted to
and settled or adjudicated by the Secretary of Justice as Attorney-General of the National Government and as
ex officio legal adviser of all government-owned or controlled corporations. His ruling or decision thereon shall
be conclusive and binding on all the parties concerned.
Section 68. Disputes Involving Questions of Fact and Law. - Cases involving mixed questions of law and of fact
or only factual issues shall be submitted to and settled or adjudicated by:
(1) The Solicitor General, if the dispute, claim or controversy involves only departments, bureaus, offices
and other agencies of the National Government as well as government-owned or controlled
corporations or entities of whom he is the principal law officer or general counsel; and
(2) The Secretary of Justice, in all other cases not falling under paragraph (1).
Section 69. Arbitration. - The determination of factual issues may be referred to an arbitration panel composed
of one representative each of the parties involved and presided over by a representative of the Secretary of
Justice or the Solicitor General, as the case may be.
Section 70. Appeals. - The decision of the Secretary of Justice as well as that of the Solicitor General, when
approved by the Secretary of Justice, shall be final and binding upon the parties involved. Appeals may,
however, be taken to the President where the amount of the claim or the value of the property exceeds one
million pesos. The decision of the President shall be final.
Section 71. Rules and Regulations. - The Secretary of Justice shall promulgate the rules and regulations
necessary to carry out the provisions of this Chapter.
Title I
FOREIGN AFFAIRS
CHAPTER 1
GENERAL PROVISIONS
Section 1. Declaration of Policy. - The State shall pursue an independent foreign policy. In its relations with other
states the paramount consideration shall be national sovereignty, territorial integrity, national interest, and the
right to self-determination.
Section 2. Mandate. - The Department shall be the lead agency that shall advise and assist the President in
planning, organizing, directing, coordinating and evaluating the total national effort in the field of foreign
relations.
Section 3. Powers and Functions. - To carry out its mandate and accomplish its mission, the Department shall:
(1) Conduct the country's foreign relations;
(2) Maintain and develop the country's representation with foreign governments;
(3) Conduct Philippine representation in the United Nations, the Association of Southeast Asian Nations
(ASEAN), and other international and regional organizations;
(4) Serve as the channel for matters involving foreign relations, including official communications to and
from the Republic of the Philippines;
(5) Negotiate treaties and other agreements pursuant to instructions of the President, and in
coordination with other government agencies;
(6) Promote trade, investments, tourism and other economic relations with other countries in
cooperation with other government agencies;
(7) Foster cultural relations with other countries and protect and enhance the Philippines' image
abroad;
(8) Undertake efforts to inform the international community about the Philippines in cooperation with
other government agencies;
(9) Protect and assist Philippine nationals abroad;
(10) Carry out legal documentation functions as provided for by law and regulations;
(11) Monitor and analyze events in other countries and report them, as appropriate, to the President
and other government agencies;
(12) Initiate, formulate, integrate and submit to the President short, medium, and long-range foreign
policy plans and programs in cooperation with other government agencies;
(13) Supervise and direct officials and employees assigned by the Department and other government
agencies to Foreign Service establishments abroad in accordance with the pertinent laws, rules and
inter-agency agreements;
(14) Recruit, maintain and develop a professional career foreign service based on merit; and
(15) Perform such other functions as may be provided by law.
Section 4. Organizational Structure. - The Department shall have the following units:
(1) The Department Proper which shall be composed of the Office of the Secretary, the Offices of the
Undersecretaries, the Offices of the Assistant Secretaries, and the Home Offices;
(2) The Foreign Service Establishments which are the Philippine Embassies, Consulates, Legations and
Permanent Missions.
CHAPTER 2
DEPARTMENT PROPER
Section 5. Offices Under the Direct Supervision of the Secretary. - The Secretary shall exercise direct supervision
over the following:
(1) Foreign Service Institute. - The Foreign Service Institute shall continue to operate under its charter,
and shall have the following main objectives and responsibilities:
(a) Program, implement, and manage the Career Foreign Service Development Program
(CFSDP) in all of its main components for the purpose of upgrading the professional Career
Foreign Service Corps;
(b) Program, implement and manage complementary organizational development programs
for the Department as well as other training and educational programs for both its career and
non-career personnel, and personnel of other government agencies assigned to foreign
missions;
(c) Program, implement and manage the necessary supportive plans and operating systems for
the Career Foreign Service Development Programs and complementary programs;
(d) Develop its own policies, and rules, program of activities, core staff and consultants,
administrative structure, operating systems and resources, in order to enable it to accomplish
competently its activities.
It shall be revitalized as the training, research, and career development arm of the Department,
in accordance with such rules as may be prescribed by the Secretary. The Institute shall be an
integral participant in the planning review process in the Department.
(2) UNESCO National Commission of the Philippines. - The United Nations Educational Scientific and
Cultural Organization (UNESCO) National Commission of the Philippines shall, in coordination with the
Office of United Nations and other international organizations, advise the Philippine Government and
the Philippine delegation to the UNESCO Conference, on matters relating to UNESCO, and shall function
as a liaison agency on matters pertaining to the Commission.
(3) Technical Assistance Council. - The Technical Assistance Council shall continue to perform its present
functions including the conduct and expansion of its programs.
Section 6. Undersecretaries. - The Secretary shall be assisted by two (2) Undersecretaries, who shall be
appointed by the President, upon the recommendation of the Secretary. The Secretary shall determine and
assign the respective functions and responsibilities of the Undersecretaries. The Secretary shall designate one of
the Undersecretaries as Acting Secretary in his absence.
Section 7. Assistant Secretaries. - The Secretary shall be assisted by six (6) Assistant Secretaries who shall be
appointed by the President upon recommendation by the Secretary. The Secretary shall delineate the
respective areas of responsibility of each Assistant Secretary.
Section 8. Home Offices. -
(1) Geographical Offices. - The following offices shall be responsible for providing staff support and
policy guidance in the coordination, supervision, monitoring, integration, and reporting of the activities
and operations of Philippine diplomatic missions and establishments within their geographical
coverage:
(a) Office of Asian and Pacific Affairs: Japan and Northeast Asia, China, Central Asia, Southeast
Asia, South Asia and Pacific countries;
(b) Office of Middle East and African Affairs: the Gulf States, Middle East and North Africa, West
Africa and East Africa;
(c) Office of American Affairs: United States of America, Canada, Mexico, the Central American
and Caribbean countries, and South America.
(d) Office of European Affairs: Union of Soviet Socialist Republics, Western Europe, Eastern
Europe and Central Europe.
(2) Office of ASEAN Affairs. - The Office of ASEAN Affairs shall be responsible for Philippine participation
and negotiation, as well as providing staff support and policy guidance in the coordination, supervision,
monitoring, integration, reporting and operations of the Philippine Government in the ASEAN.
(3) Office of the United Nations and Other International Organizations. - The Office of the United Nations
and other International Organizations shall be responsible for Philippine participation and negotiation as
well as providing staff support and policy guidance in the coordination, supervision, monitoring,
integration, reporting and operations of the Philippine Government in the United Nations, its specialized
agencies and other international organizations. It shall also serve as the secretariat of all Philippine
National Commissions and Councils created pursuant to commitments in the United Nations and its
specialized agencies.
(4) Office of International Economic Affairs and Development. - The Office of International Economic
Affairs and Development shall be responsible for conducting programs and activities of the Department
in the fields of international trade, finance and economics; coordinate with the regional offices and the
Office of United Nations and International Organizations; and, in coordination with the Department of
Trade and Industry, conduct trade and investment promotion activities of the Department.
(5) Office of Cultural Affairs and Public Information Services. - The Office of Cultural Affairs and Public
Information Services shall be responsible for promoting the cultural and public information program of
the Government abroad and for the development and dissemination of information and the
coordination of information activities on the Government's foreign and domestic policies.
(6) Office of Personnel and Administrative Services. - The Office of Personnel and Administrative Services
shall be responsible for the efficient management of human resources and administrative support
services, and shall make appropriate recommendations, including those concerning job classification,
salary administration, benefits, retirement, and awards to deserving members of the Foreign Service.
(7) Office of Financial Management Services. - The Office of Financial Management Services shall be
responsible for budgetary, financial and accounting services in the Department and the Foreign
Service.
(8) Office of Consular Services. - The Office of Consular Services shall be responsible for the efficient and
effective delivery of passport, visa and authentication services. It shall also extend assistance to Filipino
nationals both here and abroad.
Section 9. Advisory Boards and Committees. - The Secretary may create such advisory boards and committees
as he may deem necessary to assist and provide him with advice in the formulation of policies, as well as
designate as special advisers such Chiefs of Mission who are on home assignment on specific areas of their
expertise.
CHAPTER 3
DEPARTMENT SERVICES
Section 10. Office of the Legal Adviser. - The Office of the Legal Adviser shall be headed by a Legal Adviser,
who shall be a career Chief of Mission. However, the Legal Adviser may be appointed by the President, upon
the recommendation of the Secretary, from outside the career service, in which case he shall have the
assimilated rank of a Chief of Mission. His term shall be co-terminus with the tenure of the Secretary, unless
sooner terminated, and he is not eligible for foreign assignment. The Legal Adviser shall provide legal advice
and services to the Department.
Section 11. Office of Coordination and Policy Planning. - The Office of Coordination and Policy Planning shall
be headed by the Chief Coordinator. The Office of Coordination and Policy Planning shall initiate, coordinate
and integrate the planning of foreign policy. It shall provide staff support to the Office of Secretary and perform
coordinating and such other functions as may be prescribed by the Secretary.
Section 12. Office of Data Banking and Communication. - The Office of Data Banking and Communication
shall establish and maintain a modern data and communication center in the Department. The Office shall:
(1) Assist the Secretary on all matters regarding data banking and information retrieval;
(2) Establish, develop and maintain a computerized foreign-relations data bank for the Department;
(3) Establish, develop and maintain both domestic and foreign service communications systems,
including efficient flow systems for all correspondence between and among all Department units;
(4) Establish, develop and maintain the records system of the entire Department;
(5) Provide technical assistance to any service, office, or attached agency of the Department, on
matters within its competence; and
(6) Perform such other functions as may be assigned by the Secretary.
Section 13. Office of Protocol, State and Official Visits. - The Office of Protocol, State and Official Visits shall
coordinate preparations for state visits, the reception of Chiefs of State, heads of Government, the highest
foreign dignitaries visiting the Philippines, as well as official visits of Philippine officials abroad, as may be
determined by the President. It shall also be responsible for handling all activities of the Department concerning
protocol, ceremonials and socials, the proper observance and enforcement of formalities, courtesies, facilities,
immunities and privileges under the Vienna Convention on Diplomatic Relations and the Vienna Convention on
Consular Relations, and other applicable conventions and agreements.
Section 14. Office of Intelligence and Security. - The Office of Intelligence and Security shall adopt a system of
information gathering and analysis, act as liaison with the intelligence community, and provide security services
in the Department. It shall also undertake the enforcement and monitoring of security procedures in the
Department and Foreign Service establishments.
CHAPTER 4
BOARD OF FOREIGN SERVICE ADMINISTRATION
Section 15. Composition. - The Board of Foreign Service Administration shall be composed of nine (9) members:
one (1) Undersecretary as Chairman; the other Undersecretary as Vice-Chairman; the six (6) Assistant
Secretaries and the Legal Adviser, as members.
Section 16. Functions. - The Board shall be responsible for considering and recommending policies for the
efficient and economical discharge of the administrative operations of the Department and the Foreign
Service. It shall also consider and submit recommendation on policy and other matters concerning personnel,
including the appointment, promotion and assignment of Foreign Service Staff Officers and Employees, as well
as recommend to the President through the Secretary the appointment and promotion of Foreign Service
Officers, Counselors and Chiefs of Mission. It shall also act and submit recommendations on administrative
cases involving personnel of the Department and the Foreign Service.
CHAPTER 5
BOARD OF FOREIGN SERVICE EXAMINERS
Section 17. Composition. - The Board of Foreign Service Examiners shall be composed of one (1) Undersecretary
as Chairman; and the Assistant Secretary for Personnel and Administrative Services and a Commissioner of the
Civil Service Commission as members. The Board shall be under the administrative supervision of such
Undersecretary.
Section 18. Functions. - The Board shall be responsible for planning and administering the Foreign Service
Officers Examinations and the Foreign Service Staff Officers and Foreign Service Staff Employees Examinations.
CHAPTER 6
ATTACHED AGENCIES
Section 19. Attached Agencies. - The Law of the Sea Secretariat, the Inter-Agency Technical Committee on
Economic, Scientific and Technical Cooperation with Socialist Countries (SOCCOM), the Inter-Agency
Technical Committee on Technical Cooperation Among Developing Countries (IATC-TCDC), the Permanent
Inter-Agency Technical Committee on ESCAP Matters (PITCEM), and other agencies attached to the
Department shall continue to operate and function in accordance with their respective charters or laws
creating them, except as otherwise provided in this Code.
CHAPTER 7
THE FOREIGN SERVICE
Section 20. Functions of Diplomatic Missions. - The Diplomatic Missions shall:
(1) Represent the Philippines abroad and promote friendly relations with other countries in all fields;
(2) Protect national interests and the interests of Filipino nationals abroad;
(3) Ascertain and evaluate conditions and developments abroad and report thereon to the
Department Head;
(4) Serve as channels of communication between the Government of the Philippines and foreign
governments; and
(5) Perform such other functions provided by law.
Section 21. Functions of Consular Establishments. - The consular establishments shall:
(1) Protect national interests abroad and promote foreign relations in all fields, particularly in the
economic and trade areas;
(2) Ascertain and evaluate conditions and developments abroad in the commercial, economic,
cultural and scientific fields and report thereon to the Department Head;
(3) Issue passports and travel documents to Filipino nationals, and visas or appropriate documents to
foreign nationals desiring to travel to the Philippines;
(4) Protect the interests of Filipino nationals abroad, provide necessary services and assistance, and
perform notarial functions allowed by regulations;
(5) Transmit judicial and extra-judicial documents and execute letters rogatory or commissions to
receive evidence abroad for Philippine courts;
(6) Supervise and inspect in accordance with laws and regulations of the Philippines, vessels and
aircrafts and their crews; and
1. Perform such other functions as may be provided by law.
CHAPTER 8
ATTACHES AND REPRESENTATIVES
Section 22. Attaches of the Department. - The Department Head shall designate attaches of the Department
from the ranks of Foreign Service Officers and Foreign Service Staff Officers.
Section 23. Attaches of Other Departments. - The assignment abroad of personnel in any Department, Bureau
or office of the Philippine government as attaches or representatives shall have the prior clearance of the
Secretary of Foreign Affairs. The clearance shall include such matters as the actual need for opening particular
types of attache services, and the specific places where these services will be made available.
Section 24. Appointment and Accreditation of Attaches. -
(1) The authority to appoint attaches shall be vested in the Head of the Department or agency
maintaining the attache service, who shall consult with the Secretary of Foreign Affairs on such
appointments.
(2) A Department or agency shall have only one attache accredited to it by the receiving government,
except military attaches.
(3) The designation of attaches shall apply only to those serving in diplomatic missions. Those assigned to
consular establishments shall be designated as representatives.
Except in extraordinary cases, each foreign service establishment shall have only military, labor,
revenue, tourism, information and commercial attaches.
In the event of the actual need for more than one attache, as determined by the department or
agency in consultation with the Department of Foreign Affairs, the succeeding attache shall be
accredited as assistant attache.
Section 25. Relationships Between the Chief of Mission and Attaches. - The Chief of Mission shall be responsible
for the conduct of affairs of government at the diplomatic posts. All attaches and representatives of other
departments, shall during their tour of duty, be under the immediate control and administrative supervision of
the Chief of Mission where they are assigned. They shall be required to submit their reports to their agencies
through the Chief of Mission and the Department of Foreign Affairs, except when national security requires
otherwise. They shall clear with the Chief of Mission all their public pronouncements at the diplomatic post, and
all the documents and materials they send shall be transmitted through the diplomatic pouch.
The supremacy of the Chief of Mission for the conduct of foreign relations at the post is established. The Chief of
Mission shall have the authority to discipline attaches within his Mission, including the authority to have them
recalled, if necessary.
Section 26. Assimilated Ranks. -
(1) Except as the President may appoint, no officer of the Philippine government stationed abroad,
outside the Department of Foreign Affairs, shall be assigned assimilated ranks higher than Foreign
Service Officer Class I.
(2) The assignment of assimilated rank personnel of the Philippine government stationed abroad shall
remain with the President who shall act on the basis of recommendations of the Department of Foreign
Affairs and the Department of Budget and Management.
(3) The assimilated ranks are for purposes of compensation only and shall not confer diplomatic rank for
purposes of protocol. Civil attaches shall always rank after the lowest ranking Foreign Service officer in
the post.
Section 27. Relationship Between the Consul-General or the Principal Officer at the Consulate and the
Representative. - The relationship of the Consul-General or the Principal Officer at the post and the
Representatives assigned to the said post shall be the same as the relationship between the Chief of Mission
and the attaches.
Section 28. Uniform Rules for Attache Services. - A uniform set of rules and regulations shall govern attache and
representative services. This shall be drafted by an Inter-Department Committee to be composed of the
Undersecretary of Foreign Affairs as Chairman, and the Undersecretaries, or equivalent officials, of the
Departments or agencies with attaches or representatives abroad, as members.
CHAPTER 9
PERSONNEL
Section 29. Policy. - To enable the Foreign Service to effectively serve abroad the interests of the Republic of
the Philippines, it shall be the policy of the Department that only persons who are competent, of good moral
character, and fully informed of the Philippine History and current trends in Filipino life shall be appointed to the
service.
Section 30. Categories of Officers and Employees. - The Service shall consist of the following categories of
officers and employees:
(1) Chiefs of Missions
(2) Counsellors
(3) Foreign Service Officers
(4) Foreign Service Staff Officers
(5) Foreign Service Staff Employees
(6) Honorary Consuls
(7) Alien Employees
Section 31. Foreign Service Officers. - There shall be a career service composed of foreign service officers. The
Service shall consist of six classes of Foreign Service Officers including Chiefs of Missions and Counsellors.
(1) A Chief of Mission may be assigned as Ambassador Extraordinary and Plenipotentiary, Head of an
Office in the Department, or Deputy Chief of Mission.
(2) A Counsellor may be assigned as Executive Officer of an Office in the Department, Counsellor in an
Embassy, or Head of a Consular Post.
(3) The assignments of the other classes of Foreign Service Officers shall be as follows:
Home Diplomatic Service Consular
Office
Service

Class I -Chief of Division First Secretary Consul

Class II -Chief of Division Secondary Consul


Secretary

Class III -Chief of Division Third Secretary Consul

Class IV -Asst. Chief of Division Third Secretary Vice-Consul


(4) In the home office, assignment to a position requiring a rank higher than the actual rank of the
Foreign Service Officer shall be in an acting capacity.
(5) A Foreign Service Officer in any class may be designated as a special assistant to the Secretary or to
an Undersecretary. A Foreign Service Officer below the rank of Class I may be designated as Principal
Assistant to a Head of Office.
Section 32. Foreign Service Staff Officers. - There shall be three classes of Foreign Service Staff Employees to
provide the administrative and technical services.
Section 33. Foreign Service Staff Employees. - There shall be three classes of Foreign Service Staff Employees to
provide the clerical, custodial, messengerial and similar services.
Section 34. Honorary Consuls. - Honorary consuls shall be appointed from among qualified private persons to
perform certain consular functions on a non-career basis.
CHAPTER 10
APPOINTMENTS, COMPENSATION AND BENEFITS
Section 35. Foreign Service Officers. -
(1) Foreign Service Officers shall be appointed by the President.
(2) No person shall be eligible for appointment as Foreign Service Officers unless he has passed the
competitive examinations given by the Board of Foreign Service Examiners and successfully completed
his probationary service.
(3) The Secretary shall, upon the recommendation of the Board of Foreign Service, submit to the
President names of eligibles for appointment as Foreign Service Officers. The initial appointment of
Foreign Service Officers shall only be to Foreign Service Officers Class IV minimum.
Section 36. Staff Officers and Employees. - The Secretary shall appoint, in accordance with the Civil Service
Law, all Foreign Service Officers and Foreign Service Staff Employees who must be in the Philippines at the time
of their original or initial appointment.
Section 37. Alien Employees. - The Secretary shall, upon the recommendation of the head of diplomatic or
consular establishment and as much as possible in accordance with the Civil Service Law, appoint alien
employees who shall be recruited at the post to supplement the regular staff of a foreign service establishment.
Section 38. Compensation and Benefits. - The salaries, allowances, travel expenses, insurance and other
benefits of Foreign Service Officers, and Employees shall be as provided by law and regulations.
CHAPTER 11
PROMOTIONS
Section 39. Merit Promotion System. - The Board of the Foreign Service shall establish a merit promotion system
for all officers and employees of the Department.
Section 40. Requirements for Promotion in the Career Service. -
(1) For promotion to Chief of Mission Class I, the candidate must have served as a Chief of Mission Class
II and rendered continuous service as Foreign Service Officer for at least twelve (12) years;
(2) For promotion to Chief of Mission Class II, the candidate must have served as a Foreign Service
Officer Class I and rendered continuous service as Foreign Service Officer for at least ten years;
(3) For promotion to Foreign Service Officer Class I, the candidate must have served as a Foreign
Service Officer Class II, and rendered continuous service as Foreign Service Officer for at least eight
years;
(4) For promotion to Foreign Service Officer Class II, the candidate must have served as Foreign Service
Officer Class III, and rendered continuous service as Foreign Service Officer for at least six years;
(5) For promotion to Foreign Service Officer Class III, the candidate must have rendered continuous
service as a Foreign Service Officer Class IV for at least two years.
Section 41. Promotion of Foreign Service Officers. -
(1) Promotions of Foreign Service Officers from one class to the next higher class shall be made by the
President upon the recommendation of the Secretary. All promotions shall be to the lowest grade of the
class.
(2) Promotion in grade within the class shall be made by the Secretary upon the recommendation of
the Board of Foreign Service Administration.
Section 42. Promotion of Foreign Service Staff Officers, Foreign Service Staff Employees and Alien Employees. -
Promotions of foreign service staff officers and employees and alien employees shall be made by the
Secretary, upon recommendation of the Board of the Foreign Service Administration in accordance with the
promotion system.
CHAPTER 12
ASSIGNMENTS AND TRANSFERS
Section 43. Rotation Plan. - The secretary shall establish a system of assignments and transfers to ensure that all
qualified officers and employees, except the employees in the non-career service, shall serve in diplomatic and
consular establishments in different regions of the world. The assignment and transfer of personnel shall follow a
regular rotation plan. For purposes of assignments, the home office shall be considered a post. All personnel
shall be available for assignment to any post.
Section 44. Initial Home Office Requirement. - No Foreign Service Officer, Staff Officer or Employee shall be
assigned to any foreign service establishment unless he has rendered continuous and satisfactory service in the
home office for at least three (3) years.
Section 45. Tour of Duty. -
(1) The tour of duty of a Foreign Service Officer at any post shall be four (4) years commencing on the
date of his arrival at the post, after which he shall be transferred to another post;
(2) The tour of duty of a Foreign Service Staff Officer or Employee at any post shall be for a period of six
(6) years commencing on the date of his arrival at the post, after which he shall be transferred to
another post;
(3) No Foreign Service Officer, Staff Officer or Employee shall serve more than two (2) consecutive tours
of duty abroad;
(4) No Foreign Service Officer may serve more than four (4) consecutive years in the home office,
except when designated as Secretary or Undersecretary.
Section 46. Retirement. -
(1) Any Foreign Service Officer, Staff Officer or Employee who has reached the age of sixty-five (65) shall
be compulsorily retired from the services unless his service is extended by the President in the interest of
the service. Alien employees shall be allowed to retire from the service at the same age as that
provided for employees of the governments of their respective countries, provided that retirement age
shall not be beyond sixty-five (65) years.
(2) Foreign Service Officers reinstated to the service after retirement and who are assigned abroad as
ambassadors or chief of mission, and persons who are appointed as ambassadors without previously
serving as Career Foreign Service Officers shall be considered automatically separated from the Foreign
Service upon termination of their assignment abroad as ambassadors or chief of missions.
Section 47. Resignation. - The Secretary shall have authority to accept the resignation of any Foreign Service
Officer, Staff Employee, Honorary Consul and Alien Employee.
CHAPTER 13
PASSPORT
Section 48. Definition. - A Philippine passport is an official document of identity of Philippine citizenship of the
holder issued for travel purposes.
Section 49. Persons Entitled. - Only citizens of the Philippines may be issued passports. A minor may, upon his
own application, be issued a passport, except when his natural or legal guardian requests that the application
be denied.
Section 50. Authority to Issue, Restrict, Withdraw or Cancel. - The Secretary shall have authority to withhold the
issuance or order the cancellation or restriction of passports upon lawful order of the court or when he deems it
necessary in the interest of national security, public safety or public health, or in cases when a passport was
secured through misrepresentation or fraud.
Section 51. Period of Validity, Extension and Renewal. - The original period of validity of a Philippine passport is
two (2) years. It may be extended for another two (2) years provided that the application for extension is made
before the expiration of four (4) years from the date of original issue of the passport. However, the validity of a
passport may be limited for a certain period or for a definite purpose.
Section 52. Supplementary Regulation. - The Secretary may prescribe supplementary regulations for the
issuance, extension or amendment of all kinds of passports.
Section 53. Amendments. - Upon application, an unexpired passport may be amended to reflect the new civil
status or new name or surname of the holder, or to add more pages, or to modify a condition or restriction
therein.
Section 54. Fees. - The Secretary shall prescribe uniform fees for the issuance, extension and amendment of
passports, and such other services that may be rendered by the Department relating to passports. However, no
fee shall be collected for the issuance of passports to government officials proceeding abroad in the discharge
of their official duties attested by regular travel orders or for those issued to immediate members of their families
on official travel.
CHAPTER 14
MISCELLANEOUS PROVISIONS
Section 55. Use of Savings. - The Secretary is authorized to use any savings in the appropriations for the
Department for the payment of: (a) expenses for the evacuation or repatriation to the Philippines, when
necessary due to an emergency, of members of the household of the personnel of any diplomatic or consular
establishment as well as the transportation of their personal effects; (b) actual return passage by the most
direct and economical means of transportation and the cost of shipment of the household effects to Manila of
any officer or employee in the Foreign Service, including the immediate dependent members of his family, who
resigns or is separated from the service for cause; (c) the cost of preparing and transporting the remains of an
officer or employee who is a citizen of the Philippines and the immediate members of his family who may die
abroad or while in travel status; or (d) contingent and unforeseen expenses that may arise in connection with
the operation of the Foreign Service.
Section 56. Pool of Foreign Service Officers. - In all appropriation acts providing funds for the operation and
maintenance of the Department, the positions of Foreign Service Officers, including those who may serve in the
home office, shall be in a pool grouped according to their classes with their salaries and allowances indicated
in one lump sum for each class, leaving to the head of office the discretion to assign or commission those
officers whenever their services may be utilized to advantage, subject to the limitations provided by law.
Title II
FINANCE
CHAPTER 1
GENERAL PROVISIONS
Section 1. Declaration of Policy. - It is the policy of the State that the Department of Finance shall be primarily
responsible for the sound and efficient management of the financial resources of the Government, its
subdivisions, agencies and instrumentalities.
Section 2. Mandate. - The Department shall be responsible for the formulation, institutionalization and
administration of fiscal policies in coordination with other concerned subdivisions, agencies and
instrumentalities of government.
Moreover, the Department shall be responsible for the generation and management of the financial resources
of the government, ensuring that said resources are generated and managed judiciously and in a manner
supportive of development objectives.
The Department shall be responsible for the supervision of the revenue operations of all local government units,
with the objective of making these entities less dependent on funding from the national government.
Finally, the Department shall be responsible for the review, approval and management of all public sector
debt, whether foreign or domestic, with the end in view of ensuring that all borrowed funds are effectively
utilized and all such obligations are promptly serviced by the government.
Section 3. Powers and Functions. - To accomplish its goals, the Department shall:
(1) Formulate long-range, medium-term and annual plans covering the government's resources
mobilization efforts, in coordination with other concerned government agencies, and involving all
public sector resources whether generated by revenues and operations, foreign and domestic
borrowing, sale or privatization of corporations or assets, or from other sources, and supervise the
implementation of such plans;
(2) Formulate, institutionalize and administer fiscal and tax policies;
(3) Supervise, direct and control the collection of government revenues;
(4) Act as custodian and manage all financial resources of the national government;
(5) Undertake and supervise activities related to the negotiation, servicing and restructuring of domestic
and foreign debt incurred or guaranteed by the government and its instrumentalities, including taking
part in activities which affect the country's capacity to service foreign debt;
(6) Review and coordinate the policies, plans and programs of government financial institutions and,
thereafter, recommend to them courses of action consistent with national government fiscal policies,
plans and programs;
(7) Ensure the implementation of necessary policies and measures on local revenue administration;
(8) Coordinate with other government agencies on matters concerning fiscal and monetary policies,
credit, economic development, international finance, trade and investment; and
(9) Perform such other powers and functions as may be provided by law.
Section 4. Organizational Structure. - The Department shall consist of the Department proper comprising the
Office of the Secretary, the Offices of the Undersecretary and Assistant Secretaries, the Economic Intelligence
and Investigation Bureau, the Service, the Operations Groups and their constituent units, and the Regional
Offices.
CHAPTER 2
DEPARTMENT PROPER
Section 5. Office of the Secretary. - The Office of the Secretary shall consist of the Secretary, his Undersecretary
and their immediate staffs.
Section 6. Undersecretaries. - The Secretary shall be assisted by five (5) Undersecretaries appointed by the
President upon the recommendation of the Secretary, each of whom shall head, respectively, the Policy
Development and Management Services Group mentioned in Section 8 hereof and the four (4) Operations
Groups mentioned in Section 9 hereof.
Section 7. Assistant Secretaries. - The Secretary shall also be assisted by five (5) Assistant Secretaries appointed
by the President upon the recommendation of the Secretary. The respective assignments of the Assistant
Secretaries and the reporting procedures to be followed by them shall be determined by the Secretary.
CHAPTER 3
DEPARTMENT SERVICES
Section 8. Policy Development and Management Services Group. - The Policy Development and Management
Services Group, which shall be headed by an Undersecretary, shall consist of the following:
(1) Planning and Policy Research Office;
(2) Central Management Information Office;
(3) Central Administration Office;
(4) Central Financial Management Office;
(5) Public Information and Assistance Office;
(6) Legal Office; and
(7) Regional Coordination Office.
Section 9. Planning and Policy Research Office. - The Planning and Policy Research Office shall have the
following functions:
(1) Formulate long-range and annual projections of revenue needs, cash position and borrowing capacity of
the Government as basis for policy decisions of the department;
(2) Supervise policy research and development on fiscal and tax measures undertaken by the operating
bureaus and offices of the department;
(3) Coordinate with other government agencies on policy research and its impact on fiscal and tax measures;
and
(4) Perform such other functions as may be assigned by the Secretary or his undersecretaries.
Section 10. Central Management Information Office. - The Central Management Information Office shall have
the following functions:
(1) Establish a Management Information System and sub-systems for monitoring and evaluation of department-
wide programs and projects, including those that are executed by operating Bureaus and Offices;
(2) Formulate policies, plans and procedures for data control and systems management;
(3) Act as the central repository of existing and future computer files; and
(4) Perform such other appropriate functions as may be assigned by the Secretary or his undersecretaries.
Section 11. Central Administration Office. - The Central Administration Office shall have the following functions:
(1) Supervise Department-wide services relating to internal cash management, personnel
administration, property and supplies procurement, and custody; and maintenance of central files, and
corresponding reporting systems;
(2) Assist in the formulation of policies and guidelines on the management of human and physical
resources and general housekeeping activities for uniformity and standardization;
(3) Serve as a center for the establishment and periodic evaluation of management operation systems,
internal control and work outputs to determine Department-wide performance efficiency;
(4) Design and develop training policies and guidelines, administer and evaluate training programs and
in coordination with external training institutions, screen and recommend to the Secretary the
participation of Department personnel in training programs, seminars and conferences in the country or
abroad;
(5) Ensure that Department-wide activities and efforts are focused towards a central direction as
embodied in the national socio-economic development plans; and
(6) Perform such other appropriate functions as may be assigned by the Department or his
Undersecretaries.
Section 12. Central Financial Management Office. - The Central Financial Management Office shall have the
following functions:
(1) Supervise Department-wide activities relating to budget preparation and management, department
accounting, and internal audit;
(2) Perform such other appropriate functions as may be assigned by the Department or his Secretary or
his Undersecretaries.
Section 13. Public Information and Assistance Office. - The Public Information and Assistance Office shall have
the following functions:
(1) Provide policy direction and guidance to the operating Bureaus and Offices of the Department for
the proper dissemination of appropriate information or Department- wide programs, operations and
activities;
(2) Provide the operating Bureaus and Offices with the general framework for rendering direct
assistance to the general public;
(3) Receive complaints and grievances from the general public; prepare referrals to concerned Bureaus
and Offices and monitor responses or actions taken; and
(4) Perform such other appropriate functions as may be assigned by the Secretary or Undersecretary for
Policy Development and Management Service.
Section 14. Legal Office. - The Legal Office shall have the following functions:
(1) Prepare draft opinions or rulings for the signature of the Department Secretary or his Undersecretaries
on matters elevated to it by the Bureaus and Offices of the Department;
(2) Conduct legal researches on all matters referred to it by the Secretary or his Undersecretaries; and
(3) Perform such other appropriate functions as may be assigned by the Secretary or his
Undersecretaries.
Section 15. Regional Coordination Office. - The function of the Regional Coordination Office is to coordinate
the operations of the Regional Offices.
CHAPTER 4
BUREAUS
Section 16. Operations Groups. - The Operation Groups, each of which shall be headed by an Undersecretary,
shall consist of the following:
(1) Revenue Operations Group, composed of the following:
(a) Bureau of Internal Revenue;
(b) Bureau of Customs;
(c) Revenue Service;
(d) Legal Service;
(2) Domestic Operations Group, composed of the following:
(a) Bureau of Treasury;
(b) Bureau of Local Government Finance;
(c) Financial and Fiscal Policy and Planning Office;
(3) International Finance Group, composed of the following:
(a) International Finance Policy Office;
(b) International Finance Operations Office.
Section 17. Economic Intelligence and Investigation Bureau. - The Economic Intelligence and Investigation
Bureau, which shall be headed by and subject to the supervision and control of the Commissioner, who shall in
turn be appointed by the President upon the recommendation of the Secretary, shall have the following
functions:
(1) Receive, gather and evaluate intelligence reports and information and evidence on the nature,
modes and extent of illegal activities affecting the national economy, such as, but not limited to,
economic sabotage, smuggling, tax evasion, and dollar-salting, to investigate the same and aid in the
prosecution of cases;
(2) Coordinate with external domestic or foreign agencies in monitoring the financial and economic
activities of persons or entities, which may adversely affect national financial interest with the goal of
regulating, controlling or preventing said activities;
(3) Provide all intelligence units of operating Bureaus or Offices under the Department with the general
framework and guidelines for the proper conduct of intelligence and investigation work;
(4) Supervise, monitor and coordinate all the intelligence and investigation operations of the operating
Bureaus and Offices under the Department;
(5) Investigate, hear and file, upon clearance by the Secretary, anti-graft and corruption cases against
personnel of the Department and its constituent units; and
(6) Perform such other appropriate functions as may be assigned by the Secretary or his
Undersecretaries.
Section 18. The Bureau of Internal Revenue.* - The Bureau of Internal Revenue, which shall be headed by and
subject to the supervision and control of the Commissioner of Internal Revenue who shall be appointed by the
President upon the recommendation of the Secretary shall have the following functions:
(1) Assess and collect all taxes, fees and charges and account for all revenues collected;
(2) Exercise duly delegated police powers for the proper performance of its functions and duties;
(3) Prevent and prosecute tax evasions and all other illegal economic activities;
(4) Exercise supervision and control over its constituent and subordinate units; and
(5) Perform such other functions as may be provided by law.
The Commissioner of Internal Revenue, with the approval of the Secretary of Finance, shall draft and prepare
the necessary rules and regulation as may be needed to delineate the authority and responsibility of the
various groups and services of the Bureau.
Section 19. Deputy Commissioners. - The Commissioner shall be assisted by two (2) Deputy Commissioners. Each
Deputy Commissioner shall supervise one (1) of the groups defined in Sec. 20 below, to be assigned by the
Commissioner.
Section 20. Composition of the Bureau of Internal Revenue. - The Bureau of Internal Revenue shall be
composed of the following:
(1) Assessment and Collection Group, headed and supervised by a Deputy Commissioner and
composed of the following services, each of which shall be headed by a Revenue Chief;
(2) Legal and Internal Administration Group, headed and supervised by a Deputy Commissioner and
composed of the following services, each of which shall be headed by a Service Chief.
Section 21. Appointment by the President. - The aforementioned Undersecretaries shall be appointed by the
President upon recommendation of the Secretary.
Section 22. Management and Technical Staff . - The Commissioner and the two (2) Deputy Commissioners shall
each have a Management and Technical Staff to render technical and secretarial support services.
Section 23. Bureau of Customs. - The Bureau of Customs which shall be headed and subject to the
management and control of the Commissioner of Customs, who shall be appointed by the President upon the
recommendation of the Secretary and hereinafter referred to as Commissioner, shall have the following
functions:
(1) Collect customs duties, taxes and the corresponding fees, charges and penalties;
(2) Account for all customs revenues collected;
(3) Exercise police authority for the enforcement of tariff and customs laws;
(4) Prevent and suppress smuggling, pilferage and all other economic frauds within all ports of entry;
(5) Supervise and control exports, imports, foreign mails, and the clearance of vessels and aircrafts in all
ports of entry;
(6) Administer all legal requirements that are appropriate ;
(7) Prevent and prosecute smuggling and other illegal activities in all ports under its jurisdiction;
(8) Exercise supervision and control over its constituent units;
(9) Perform such other functions as may be provided by law.
Section 24. Composition. - The Bureau of Customs shall be composed of the following:
(1) Customs Revenue Collection Monitoring Group, headed and supervised by a Deputy Commissioner
and composed of Legal, Financial and Collection Services, each of which shall be headed by a service
chief;
(2) Customs Assessment and Operations Coordinating Group, headed and supervised by a Deputy
Commissioner and composed of the Imports and Assessment and Ports Operations Services, each of
which shall be headed by a Service Chief; and
(3) Intelligence and Enforcement Group, headed and supervised by a Deputy Commissioner and
composed of the Intelligence and Investigation Service and the Enforcement and Security Service.
Section 25. Appointment by President. - The aforementioned Deputy and Assistant Commissioners shall be
appointed by the President upon the recommendation of the Commissioner of Customs in keeping with the
intent of Executive Order No. 9.
Section 26. Definition of Functions. -
(1) Customs Revenue Collection Monitoring Group. The Customs Revenue Collection Monitoring Group
shall have the following functions:
(a) Maintain an updated accounting for all Customs revenues collected;
(b) Administer legal requirements of the Bureau of Customs to include litigation and prosecution
of cases;
(c) Provide the Commissioner of Customs with accurate and timely information and analysis of
collection statistics;
(d) Conduct continuing audit of liquidated entries and outstanding bonds; and
(e) Perform such other appropriate functions consistent with the assigned tasks of the group and
others which may be given by the Commissioner;
(2) Customs Assessment and Operations Coordinating Group. The Customs Assessment and Operations
Coordinating Group shall have the following functions:
(a) Regularly gather and upon approval of the Commissioner, publish values of commodities
imported into the Philippines, such values being the bases for the computation of customs duties
and other revenues;
(b) Monitor for decision-making purposes the implementation of rules and regulations governing
assessment, warehousing and support operations;
(c) Monitor auction and disposal activities together with port/airport operations related activities
for decision-making purposes; and
(d) Perform other appropriate functions consistent with the assigned tasks of the Group which
may be given by the Commissioner.
(3) Intelligence and Enforcement Group. The Intelligence and Enforcement Group shall have the
following functions:
(a) Regularly and consistently gather intelligence information related to customs and economic
activities for proper dissemination to the Customs offices concerned;
(b) Conduct internal inquiry and investigation which may serve as the basis for prosecution;
(c) Exercise police authority conferred by the Tariff and Customs Code or other laws which
include the enforcement of seizures and forfeitures and the imposition of penalties and fines;
and
(d) Perform such other appropriate functions consistent with the assigned tasks of the Group and
others which may be given by the Commissioner.
Section 27. The Collection Districts. -
(1) The Bureau shall have thirteen (13) Collection Districts under the direct control and supervision of the
Commissioner. Each Collection District shall have as many subports as necessary to maximize revenue
collection and the prevention of smuggling and fraud against customs. Each Collection District shall be
headed and supervised by a District Collector while each subport will be headed by a Port Collector.
The Collectors shall have the following functions:
(a) Collect duties, taxes, fees, charges, penalties and fines accruing to the Government under
the Tariff and Customs Code and related laws;
(b) Exercise police powers conferred to him/her by the Tariff and Customs Code or other laws
which include the enforcement of penalties and fines;
(c) Examine goods, assess duties, fees, charges, penalties and fines accruing to the Government
under the Tariff and Customs Code and other related laws;
(d) Supervise the entrance and clearance of vessels and aircrafts engaged in foreign
commerce;
(e) Supervise and control handling of foreign mails arriving in the Philippines; and
(f) Supervise all import and export cargoes landed and/or stored in piers, airports, terminal
facilities, yards and freight stations;
(2) Perform such other appropriate functions consistent with the assigned task of the District/Port
Collectors and those which may be given by the Commissioner.
Section 28. Management and Technical Staff . - The Commissioner and three (3) Deputy Commissioners, and
the Assistant Commissioner shall each have a Management and Technical Staff, which shall be limited to a
specific number of personnel as determined by the Secretary, to render technical and secretarial support
services.
Section 29. Bureau of Treasury. - The Bureau of Treasury, which shall be headed by and subject to the
supervision and control of the National Treasurer who shall be appointed by the President upon the
recommendation of the Secretary, shall have the following functions:
(1) Act as the principal custodian of all national government funds;
(2) Assist in the formulation of, and execute, policies on financial management, public borrowings and
capital market development;
(3) Formulate, in coordination with government agencies concerned, annual projections of revenue
needs, cash position and borrowing capacity of the government;
(4) Maintain accounts of the financial transactions of all national secretaries, bureaus, agencies and
instrumentalities;
(5) Manage the cash resources of the Government and perform banking functions in relation to receipts
and disbursements of national funds;
(6) Manage, control and service public debts from domestic or foreign sources;
(7) Exercise line supervision over its Regional Offices/field units within Department Regional
Administrative Coordination Offices; and
(8) Perform such other appropriate functions as may be assigned by the Secretary or Undersecretary for
Domestic Operations.
Section 30. Composition. - The Bureau of Treasury shall be composed of the following:
(1) Internal Affairs Sub-Sector under the direct supervision and control of an Assistant National Treasurer
and composed of the following:
(a) Administrative Service;
(b) Financial and Management Service;
(c) Management Information and Data Systems Service;
(d) Planning and Policy Research Division;
(e) Public Information and Assistance Division; and
(f) Legal Division.
(2) National Government Affairs Sub-Sector under the direct supervision and control of an Assistant
National Treasurer and composed of the following:
(a) Public Debt Management Service;
(b) Debt Clearing Service;
(c) National Cash Accounts Service;
(d) Treasury Banking Service;
(e) Operations Planning Service;
(f) Regional Offices which shall have under their supervision all provincial offices and shall be
under the direct control and supervision of the National Treasurer.
Section 31. Assistance to National Treasurer. - The National Treasurer shall be directly assisted by the:
(1) Management and Technical Staff, which shall perform the functions of rendering technical and
secretarial support services;
(2) Intelligence and Investigation Office, which shall perform the following functions:
(a) Monitor, gather and evaluate reports on financial and economic activities of persons or
entities, foreign and domestic, which may adversely affect national financial interests;
(b) Perform such other appropriate functions as may be assigned by the National Treasurer.
Section 32. Appointment by the President. - The aforementioned two (2) Assistant National Treasurers shall be
appointed by the President upon the recommendation of the Secretary. lawphi1.net
Section 33. Bureau of Local Government Finance. - The Bureau of Local Government Finance, which shall be
headed by and subject to the supervision and control of an Executive Director who shall be appointed by the
President and upon the recommendation of the Secretary, shall have the following functions:
(1) Assist in the formulation and implementation of policies on local government revenue administration
and fund management;
(2) Exercise administrative and technical supervision and coordination over the treasury and assessment
operations of local governments;
(3) Develop and promote plans and programs for the improvement of resource management systems,
collection enforcement mechanisms, and credit utilization schemes at the local levels;
(4) Provide consultative services and technical assistance to the local governments and the general
public on local taxation, real property assessment and other related matters;
(5) Exercise line supervision over its Regional Offices/field units within the Department Regional
Administrative Coordination Office and the Local Treasury and Assessment Services; and
(6) Perform such other appropriate functions as may be assigned by the Secretary or Undersecretary for
Domestic Operations.
Section 34. Composition. - The Bureau of Local Government Finance shall be composed of the following:
(1) Internal Administration Office;
(2) Policy Enforcement and Special Projects Group;
(3) Field Operations Examination Group
Section 35. Assistance to the Executive Director. - The Executive Director shall be directly assisted by the:
(1) Management and Technical Staff, which shall perform the functions of rendering technical and
secretarial support services;
(2) Intelligence and Investigation Office, which shall perform the following functions:
(a) Monitor, gather and evaluate reports on financial and economic activities of persons or
entities, foreign and domestic, which may adversely affect national financial interests;
(b) Perform such other appropriate functions as may be assigned by the Director.
Section 36. Financial and Fiscal Policy Planning. - The Financial and Fiscal Policy and Planning Office, which
shall be headed by a Director who shall be appointed by the President upon the recommendation of the
Secretary, shall have the following functions:
(1) Coordinate, in consultation with the appropriate government agencies, the formulation of
integrated financial and fiscal plans of the national Government and the local government, consistent
with the national development plan;
(2) Monitor and review the implementation of such financial and fiscal plans in relation to recent
developments in the economy;
(3) Coordinate with other government agencies involved in financial, fiscal and economic planning
and policy formulation;
(4) Undertake special studies and research projects on financial and fiscal policies;
(5) Coordinate the formulation and assessment of Department policies affecting domestic finance
operations with the different bureaus and offices of the Department; and
(6) Perform such other appropriate functions as may be assigned by the Secretary, the Undersecretary
for Domestic Operations or the Assistant Secretary directly assisting the Undersecretary for Domestic
Operations.
Section 37. International Finance Policy Office. - The International Finance Policy Office, headed by a Director
who shall be appointed by the President upon recommendation of the Secretary, shall have the following
functions:
(1) Monitor and analyze international monetary, financial and trade developments and their
implications for the Philippine economy and evolve proposals for appropriate response to said events;
(2) Provide inputs into the formulation of fiscal, monetary, financial, foreign trade and exchange rate
policies as well as budgetary and balance of payments programming in line with domestic economic
goals and the external financial and trade environment;
(3) Formulate and monitor a foreign financing program on the basis of domestic requirements and
trends in development assistance and other capital flows;
(4) Interact with multilateral, regional and other international organizations and formulate in
coordination with appropriate agencies Philippine positions on institutional and policy issues taken up in
these bodies;
(5) Coordinate with other appropriate secretaries and government agencies in areas concerning
international finance and foreign trade; and
(6) Perform such other appropriate functions as may be assigned by the Secretary or Undersecretary for
International Finance.
Section 38. International Finance Operations Office. - The International Finance Operations Office, headed by
a Director, shall have the following functions:
(1) Assist in the formulation of policies and guidelines for foreign borrowings including provision of
government guarantees, and monitor compliance with these policies;
(2) Provide support work for international financial negotiations and participate in such negotiations with
multilateral financial institutions, bilateral creditors and donors and commercial creditors. This includes
negotiations for new assistance (grants and loans) as well as for debt rescheduling;
(3) Monitor implementation of projects funded by foreign assistance and credits, utilization of such
external resources and compliance with commitments as well as debt repayment obligations;
(4) Assist in the structuring and conduct of international conferences and meetings of the Department's
officers (the term "officer" as used in this Executive Order is intended to be within the meaning of the
term "official" as used in the Freedom Constitution) with foreign dignitaries or organizations; and
(5) Perform such other appropriate functions as may be assigned by the Secretary or Undersecretary for
International Finance.
Section 39. Administrative Staff . - The Undersecretary for International Finance shall be directly assisted by a
Finance Attache Division and Administrative Staff.
CHAPTER 5
REGIONAL OFFICES
Section 40. Regional Offices. - There shall be a Regional Office in each region. Each Regional Office shall be
headed by a Regional Director.
A Regional Office shall have, within its administrative region, the following functions:
(1) Implement laws, rules and regulations, policies, plans, programs and projects of the Department;
(2) Provide efficient and effective services to the people;
(3) Coordinate with regional offices of other departments, offices and agencies in the region;
(4) Coordinate with local government units; and
(5) Perform such other functions as may be provided by law.
Section 41. DOF-RACO. - For purposes of achieving maximum utilization of resources, management
coordination and administrative integration at the regional levels, there is hereby created a Department of
Finance Regional Administrative Coordination Office (DOF-RACO) in each of the administrative regions of the
country, to be headed by a Regional Executive Director who shall report directly to the Undersecretary for
Internal Administration. The Secretary shall define the appropriate functions to be delegated to the DOF-RACO.
The Regional Offices of each operating Bureau under the Department, however, shall remain under the
technical supervision and control of the head of the Bureau to which they belong. For monitoring purposes,
however, each Regional Office shall submit operational reports to the DOF-RACO as required.
CHAPTER 6
ATTACHED AGENCIES
Section 42. Attached Agencies. - The following agencies are hereby attached to the Department:
(1) Philippine Crop Insurance Corporation;
(2) Philippine Export and Foreign Loan Guarantee Corporation;
(3) Insurance Commission;
(4) National Tax Research Center;
(5) Central Board of Assessment Appeals; and
(6) Fiscal Incentives Review Board.
Section 43. Functions of the Attached Agencies. - The agencies attached to the Department shall continue to
operate and function in accordance with the respective charters, laws, or orders creating them, except as
otherwise provided in this Code.
Title III
JUSTICE
CHAPTER 1
GENERAL PROVISIONS
Section 1. Declaration of Policy. - It is the declared policy of the State to provide the government with a
principal law agency which shall be both its legal counsel and prosecution arm; administer the criminal justice
system in accordance with the accepted processes thereof consisting in the investigation of the crimes,
prosecution of offenders and administration of the correctional system; implement the laws on the admission
and stay of aliens, citizenship, land titling system, and settlement of land problems involving small landowners
and members of indigenous cultural minorities; and provide free legal services to indigent members of the
society.
Section 2. Mandate. - The Department shall carry out the policy declared in the preceding section.
Section 3. Powers and Functions. - To accomplish its mandate, the Department shall have the following powers
and functions:
(1) Act as principal law agency of the government and as legal counsel and representative thereof,
whenever so required;
(2) Investigate the commission of crimes, prosecute offenders and administer the probation and
correction system;
(3) Extend free legal assistance/representation to indigents and poor litigants in criminal cases and non-
commercial civil disputes;
(4) Preserve the integrity of land titles through proper registration;
(5) Investigate and arbitrate untitled land disputes involving small landowners and members of
indigenous cultural communities;
(6) Provide immigration and naturalization regulatory services and implement the laws governing
citizenship and the admission and stay of aliens;
(7) Provide legal services to the national government and its functionaries, including government-
owned or controlled corporations and their subsidiaries; and
(8) Perform such other functions as may be provided by law.
Section 4. Organizational Structure. - The Department shall consist of the following constituent units:
(1) Department proper;
(2) Office of the Government Corporate Counsel;
(3) National Bureau of Investigation;
(4) Public Attorney's Office;
(5) Board of Pardons and Parole;
(6) Parole and Probation Administration;
(7) Bureau of Corrections;
(8) Land Registration Authority;
(9) Commission on the Settlement of Land Problems.
CHAPTER 2
DEPARTMENT PROPER
Section 5. The Department Proper. - The Department Proper shall be composed of the Office of the Secretary
and the Undersecretaries, Technical and Administrative Service, Financial Management Service, Legal Staff
and the Office of the Chief State Prosecutor.
Section 6. Undersecretaries. - The Secretary shall be assisted by three (3) Undersecretaries. The Secretary is
hereby authorized to delineate and assign the respective functional areas of responsibility of the
Undersecretaries, provided, that such responsibility shall be with respect to the mandate and objectives of the
Department; and provided, further, that no Undersecretary shall be assigned primarily administrative
responsibilities. Within his functional area of responsibility, an Undersecretary shall have the following functions:
(1) Advise and assist the Secretary in the formulation and implementation of the Department's policies,
plans, programs and projects;
(2) Oversee the operational activities of the Department;
(3) Coordinate the programs and projects of the Department for efficient and effective administration;
(4) Serve as deputy for the Secretary;
(5) Perform, when so designated, the powers and functions of the Secretary, during the latter's absence
or incapacity; and
(6) Perform such other functions as may be provided by law or assigned by the Secretary to promote
efficiency and effectiveness in the delivery of frontline services.
Section 7. Legal Staff . - The Legal Staff shall have the following functions:
(1) Assist the Secretary in the performance of his duties as Attorney General of the Philippines and as ex-
officio legal adviser of government-owned or controlled corporations or enterprises and their
subsidiaries;
(2) Prepare and finally act for and in behalf of the Secretary on all queries and/or requests for legal
advice or guidance coming from private parties and minor officials and employees of the government;
(3) Maintain and supervise the operation of the Department Law Library as well as its personnel; and
(4) Perform such other functions as are now or may hereafter be provided by law or assigned by the
Secretary.
Section 8. Office of the Chief State Prosecutor. - The Office of the Chief State Prosecutor shall have the
following functions:
(1) Assist the Secretary in the performance of powers and functions of the Department relative to its role
as the prosecution arm of the government;
(2) Implement the provisions of laws, executive orders and rules, and carry out the policies, plans,
programs and projects of the Department relative to the investigation and prosecution of criminal
cases;
(3) Assist the Secretary in exercising supervision and control over the National Prosecution Service as
constituted under P. D. No. 1275 and/or otherwise hereinafter provided; and
(4) Perform such other functions as may be provided by law or assigned by the Secretary.
Section 9. Provincial/City Prosecution Offices. - The Provincial and City Fiscal's Office established in each of the
provinces and cities pursuant to law, is retained and renamed Provincial/City Prosecution Office. It shall be
headed by a Provincial Prosecutor or City Prosecutor, as the case may be, assisted by such number of Assistant
Provincial/City Prosecutors as fixed and/or authorized by law. The position titles of Provincial and City Fiscal and
of Assistant Provincial and City Fiscal are hereby abolished.
All provincial/city prosecution offices shall continue to discharge their functions under existing law.
All provincial and city prosecutors and their assistants shall be appointed by the President upon the
recommendation of the Secretary. lawphi1.net
CHAPTER 3
OFFICE OF THE GOVERNMENT CORPORATE COUNSEL
Section 10. Office of the Government Corporate Counsel. - The Office of the Government Corporate Counsel
(OGCC) shall act as the principal law office of all government-owned or controlled corporations, their
subsidiaries, other corporate off-springs and government acquired asset corporations and shall exercise control
and supervision over all legal departments or divisions maintained separately and such powers and functions as
are now or may hereafter be provided by law. In the exercise of such control and supervision, the Government
Corporate Counsel shall promulgate rules and regulations to effectively implement the objectives of the Office.
The OGCC is authorized to receive the attorney's fees adjudged in favor of their client government-owned or
controlled corporations, their subsidiaries/other corporate offsprings and government acquired asset
corporations. These attorney's fees shall accrue to a special fund of the OGCC, and shall be deposited in an
authorized government depository as a trust liability and shall be made available for expenditure without the
need for a Cash Disbursement Ceiling, for purposes of upgrading facilities and equipment, granting of
employees' incentive pay and other benefits, and defraying such other incentive expenses not provided for in
the General Appropriations Act as may be determined by the Government Corporate Counsel.
CHAPTER 4
NATIONAL BUREAU OF INVESTIGATION
Section 11. National Bureau of Investigation. - The National Bureau of Investigation (NBI) with all its duly
authorized constituent units including its regional and district offices and rehabilitation center, shall continue to
perform the powers and functions as are now vested in it under the existing law and such additional functions
as may hereafter be provided by law.
Section 12. The NBI Director and Other Officials. - The NBI shall be headed by a Director assisted by an Assistant
Director and five (5) Deputy Directors, for Intelligence, Investigation, Technical, Administrative and Comptroller
Services, respectively.
The NBI is also authorized to continue the operation and maintenance of a Regional Office in each of the
twelve (12) administrative regions of the country, to be headed by a Regional Director and assisted by an
Assistant Regional Director.
Section 13. Internal Organization and Assignment of Personnel. - Subject to prior approval of the Secretary and
to the limitations prescribed in the General Appropriations Act for personnel services expenditures in the NBI,
the NBI director may be authorized to determine the internal organization of the constituent units of the Bureau
including the composition and size thereof and the number, classes and level of positions (below the rank of
presidential appointees) to be assigned or allocated thereto.
CHAPTER 5
PUBLIC ATTORNEY'S OFFICE
Section 14. Public Attorney's Office (PAO). - The Citizen's Legal Assistance Office (CLAO) is renamed Public
Attorney's Office (PAO). It shall exercise the powers and functions as are now provided by law for the Citizen's
Legal Assistance Office or may hereafter be provided by law.
Section 15. Organizational Structure. - The PAO shall consist of the following constituent units:
(1) Office of the Chief Public Attorney and two (2) Deputy Chief Public Attorneys;
(2) Five (5) line divisions in the Central Office, namely: Administrative, Financial and Management,
Special and Appealed Cases, Legal Research and Statistics, and Field Services Divisions; and
(3) Regional and Provincial/District Offices.
Section 16. The Chief Public Attorney and Other PAO Officials. - The PAO shall be headed by a Chief Public
Attorney and shall be assisted by two (2) Deputy Chief Public Attorneys. Each PAO Regional Office established
in each of the administrative regions of the country shall be headed by a Regional Public Attorney who shall be
assisted by an Assistant Regional Public Attorney.
The Chief Public Attorney, Deputy Chief Public Attorneys, Regional Public Attorneys and Assistant Regional
Public Attorneys shall be appointed by the President upon the recommendation of the Secretary.
CHAPTER 6
BOARD OF PARDONS AND PAROLE
Section 17. Board of Pardons and Parole. - The Board of Pardons and Parole shall continue to discharge the
powers and functions as provided in existing law and such additional functions as may be provided by law.
Section 18. Board Composition. - The Board shall be composed of the Secretary as Chairman and six (6)
members consisting of: The Administrator of the Parole and Probation Administration as ex-officio member, a
sociologist, a clergyman, an educator, a person with training and experience in correction work, and a
member of the Philippine Bar; Provided, that one of them is a woman. The members of the Board shall be
appointed by the President upon the recommendation of the Secretary and shall hold office for a term of six
(6) years, without prejudice to reappointment.
In case of vacancy by reason of death, incapacity, resignation or removal of any of the Board members, the
Secretary shall have the authority to designate a temporary member possessing the qualifications of his
predecessor and to serve out his unexpired term or until the President shall have appointed a regular member
to fill the vacancy.
Section 19. Executive Director and Board Secretary; Support Staff . - In the performance of his duties as
Chairman of the Board of Pardons and Parole, the Secretary shall be assisted by a staff headed by the
Executive Director who is at the same time the Secretary of the Board. The Executive Director shall be
appointed by the President upon the recommendation of the Secretary. The Executive Director shall receive a
monthly salary of thirteen thousand five hundred pesos.
The Board Secretary shall prepare and keep the minutes of all the board sessions in a book of records kept for
the purpose, as well as all the resolutions and recommendations of the Board on all actions involving parole,
pardons and executive clemency to the President; authenticate and/or attest all minutes, resolutions and
recommendations of the Board; prepare and serve all notices of board meetings or sessions to the members of
the Board; prepare an annual report of all resolutions and recommendations for parole or executive clemency
and other reports that the Department may require. He shall also perform such other functions as the Board
may from time to time assign to him.
Section 20. Board Meetings. - The Board shall meet regularly every week, or as the Board may direct, or upon
call by the Chairman/Secretary. The members shall act only as a Board, and every decision of the majority shall
be valid as an act of the Board, provided, that the Board may direct a Board member to prepare and submit a
report involving any application for parole, pardon or any request for executive clemency for appropriate
action by the Board.
Section 21. Board Rules and Regulations. - The Board is hereby authorized to establish and prescribe, subject to
the approval of the Secretary, rules and regulations to govern the proceedings of the Board.
Section 22. Indeterminate Sentence Law. - The provisions of Act No. 4103, otherwise known as the
Indeterminate Sentence Law, as amended, shall continue to apply except as otherwise amended, modified or
repealed by this Code.
CHAPTER 7
PAROLE AND PROBATION ADMINISTRATION
Section 23. Parole and Probation Administration. - The Parole and Probation Administration hereinafter referred
to as the Administration shall have the following functions:
(1) Administer the parole and probation system;
(2) Exercise general supervision over all parolees and probationers;
(3) Promote the correction and rehabilitation of offenders; and
(4) Such other functions as may hereafter be provided by law.
Section 24. Structural and Personnel Organization. -
(1) The Administration shall be headed by an Administrator who shall be immediately assisted by a
Deputy Administrator. The Administrator and Deputy Administrator shall be appointed by the President
upon the recommendation of the Secretary.
The appointees to the positions of Administrator and Deputy Administrator must be holders of a
doctoral/masteral degree in public administration and/or lawyers with at least one year of supervisory
experience in probation work.
(2) The Administration shall have a Technical Service under the Office of the Administrator which shall
serve as the service arm of the Board of Pardons and Parole in the supervision of parolees and
pardonees.
The Board and the Administration shall jointly determine the staff complement of the Technical Service.
(3) The Administration shall likewise continue to operate and maintain a Regional Office in each of the
administrative regions including the National Capital Region and also a probation and parole office in
every province and city of the country.
The Regional, Provincial and City Offices of the Administration shall each be headed by a Regional Probation
and Parole Officer, Provincial/City Probation and Parole Officer, respectively, all of whom shall be appointed
by the Secretary upon the recommendation of the Administrator.
The Provincial or City Probation and Parole Officer shall be assisted by such field assistants and subordinate
personnel as may be necessary to enable them to carry out their duties and functions. For this purpose, the
Administrator may appoint citizens of good repute and probity to act as Probation and Parole Aides who shall
not receive any regular compensation for their services except reasonable travel allowance.
Section 25. Applicability of P.D. No. 968, as amended. - The Provisions of P.D. 968 otherwise known as the
Probation Law of 1976 shall continue to govern the operation and management of the Administration including
the enumeration of functions and qualifications for appointment of the Administrator, Deputy Administrators,
Regional, Provincial and City Probation Officers and their assistants and other subordinate personnel not
inconsistent with this title.
CHAPTER 8
BUREAU OF CORRECTIONS
Section 26. Bureau of Corrections. - The Bureau of Corrections shall have its principal task the rehabilitation of
prisoners. The Bureau of Corrections shall exercise such powers and functions as are now provided for the
Bureau of Prisons or may hereafter be provided by law.
Section 27. Structural and Personnel Organization. - The Bureau of Corrections shall be headed by a Director
who shall be assisted by two (2) Assistant Directors, one for Administration and Rehabilitation and one for Prisons
and Security. The Director and Assistant Directors of the Bureau shall be appointed by the President upon
recommendation of the Secretary.
The Bureau shall carry out its functions through its divisions and its seven (7) Penal institutions namely - New Bilibid
Prisons, Correctional Institution for Women, Iwahig, Davao, San Ramon and Sablayan Prisons and Penal Farms
and the Leyte Regional Prisons.
CHAPTER 9
LAND REGISTRATION AUTHORITY
Section 28. The Land Registration Authority. - The Land Registration Authority, hereinafter referred to as the
Authority shall continue to exercise its powers and functions under existing law on the Land Titles and Deeds
Registration Authority and those which may hereafter be provided by law.
Section 29. Organizational Structure. - The Authority shall be headed by an Administrator who shall be assisted
by two (2) Deputy Administrators, all of whom shall be appointed by the President upon the recommendation
of the Secretary.
Section 30. Reorganization of Registry Offices in the National Capital Region. - The Registries of Deeds in the
National Capital Region is hereby reorganized as follows:
(1) The Registries of Deeds in the cities of Manila, Quezon, Pasay and Caloocan shall be maintained;
(2) There is hereby created Registries of Deeds in the Municipalities of Navotas, Malabon, Valenzuela,
Mandaluyong, San Juan, Marikina, Las Piñas and Parañaque with jurisdiction over their respective
municipalities;
(3) The Registry of Deeds of Pasig shall be maintained with jurisdiction over the Municipalities of Pasig,
Taguig and Pateros; and
(4) The Registry of Deeds of Makati shall have jurisdiction over the municipalities of Makati and
Muntinlupa.
CHAPTER 10
BUREAU OF IMMIGRATION
Section 31. Bureau of Immigration. - The Bureau of Immigration is principally responsible for the administration
and enforcement of immigration, citizenship and alien admission and registration laws in accordance with the
provisions of the Philippine Immigration Act of 1940, as amended (C.A. No. 613, as amended). The following
units shall comprise the structural organization of the Bureau:
(1) Office of the Commissioner and Associate Commissioners;
(2) Board of Commissioners - composed of the Commissioner as Chairman and two (2) Associate
Commissioners as members; and
(3) Boards of Special Inquiry which are authorized to be organized in the Commission pursuant to the
provisions of the Immigration Act of 1940, as amended.
Subject to the provisions of existing law, the Secretary is hereby authorized to review, revise and/or
promulgate new rules and regulations to govern the conduct of proceedings in the Board of
Commissioners and the Boards of Special Inquiry, including the determination of the size and number of
the support staff to be assigned thereat.
The Bureau shall be headed by a Commissioner assisted by two Associate Commissioners, all of whom shall be
appointed by the President upon the recommendation of the Secretary.
The Commissioner and the two Associate Commissioners shall compose the Board of Commissioners, a collegial
body hereby granted exclusive jurisdiction over all deportation cases. The Board shall also have appellate
jurisdiction over decisions of the Boards of Special Inquiry and shall perform such other functions as may be
provided by law.
Each Board of Special Inquiry shall be composed of a Chairman and two members who shall be appointed by
the Secretary upon the recommendation of the Commissioner.
Likewise, the appointment of all the other personnel of the Bureau including the designation of Acting
Immigration Officers shall be vested in the Secretary upon the recommendation of the Commissioner.
CHAPTER 11
COMMISSION ON THE SETTLEMENT OF LAND PROBLEMS
Section 32. Commission on the Settlement of Land Problems. - The Commission on the Settlement of Land
Problems shall be responsible for the settlement of land problems involving small landowners and members of
cultural minorities. It shall also perform such other functions, as are now or may hereafter be provided by law.
Section 33. Structure and Personnel Organization. - The Commission, as a collegial body, shall be composed of
the Commissioner and two Associate Commissioners. For administrative purposes, the Commissioner shall be
the head of the Commission and the two Associate Commissioners shall be his immediate assistants.
The Commissioner and the two Associate Commissioners shall be appointed by the President upon the
recommendation of the Secretary. They shall have the same qualifications for appointment and receive a
salary, retirement benefits, longevity pay and other privileges equivalent to that of an Associate Justice of the
Court of Appeals and a Judge of the Regional Trial Court, respectively, as provided in E.O. No. 561.
The Commission shall have a technical staff which shall be headed by an Executive Director and assisted by a
Deputy Executive Director who shall both be appointed by the President upon the recommendation of the
Secretary. All the other members of the technical staff shall be appointed by the Secretary upon the
recommendation of the Commissioner.
When conditions in any province so warrant, the Commission may, subject to the approval of the Secretary,
establish regional and provincial offices thereat which shall exercise such powers and perform such functions as
may be assigned to it by the Commission.
CHAPTER 12
OFFICE OF THE SOLICITOR GENERAL
Section 34. Organizational Structure. - The Office of the Solicitor General shall be an independent and
autonomous office attached to the Department of Justice.
The Office of the Solicitor General shall be headed by the Solicitor General, who is the principal law officer and
legal defender of the Government. He shall have the authority and responsibility for the exercise of the Office's
mandate and for the discharge of its duties and functions, and shall have supervision and control over the
Office and its constituent units.
The Solicitor General shall be assisted by a Legal Staff composed of fifteen (15) Assistant Solicitors General, and
such number of Solicitors and Trial Attorneys as may be necessary to operate the Office, which shall be divided
into fifteen (15) divisions: Provided, That the Solicitor General may assign or transfer the Assistant Solicitors
General, Solicitors or Trial Attorneys to any of the divisions.
Section 35. Powers and Functions. - The Office of the Solicitor General shall represent the Government of the
Philippines, its agencies and instrumentalities and its officials and agents in any litigation, proceeding,
investigation or matter requiring the services of lawyers. When authorized by the President or head of the office
concerned, it shall also represent government-owned or controlled corporations. The Office of the Solicitor
General shall constitute the law office of the Government and, as such, shall discharge duties requiring the
services of lawyers. It shall have the following specific powers and functions:
(1) Represent the Government in the Supreme Court and the Court of Appeals in all criminal
proceedings; represent the Government and its officers in the Supreme Court, the Court of Appeals,
and all other courts or tribunals in all civil actions and special proceedings in which the Government or
any officer thereof in his official capacity is a party.
(2) Investigate, initiate court action, or in any manner proceed against any person, corporation or firm
for the enforcement of any contract, bond, guarantee, mortgage, pledge or other collateral executed
in favor of the Government. Where proceedings are to be conducted outside of the Philippines the
Solicitor General may employ counsel to assist in the discharge of the aforementioned responsibilities.
(3) Appear in any court in any action involving the validity of any treaty, law, executive order or
proclamation, rule or regulation when in his judgment his intervention is necessary or when requested by
the Court.
(4) Appear in all proceedings involving the acquisition or loss of Philippine citizenship.
(5) Represent the Government in all land registration and related proceedings. Institute actions for the
reversion to the Government of lands of the public domain and improvements thereon as well as lands
held in violation of the Constitution.
(6) Prepare, upon request of the President or other proper officer of the National Government, rules and
guidelines for government entities governing the preparation of contracts, making of investments,
undertaking of transactions, and drafting of forms or other writings needed for official use, with the end
in view of facilitating their enforcement and insuring that they are entered into or prepared
conformably with law and for the best interests of the public.
(7) Deputize, whenever in the opinion of the Solicitor General the public interest requires, any provincial
or city fiscal to assist him in the performance of any function or discharge of any duty incumbent upon
him, within the jurisdiction of the aforesaid provincial or city fiscal. When so deputized, the fiscal shall be
under the control and supervision of the Solicitor General with regard to the conduct of the
proceedings assigned to the fiscal, and he may be required to render reports or furnish information
regarding the assignment.
(8) Deputize legal officers of government departments, bureaus, agencies and offices to assist the
Solicitor General and appear or represent the Government in cases involving their respective offices,
brought before the courts, and exercise supervision and control over such legal officers with respect to
such cases.
(9) Call on any department, bureau, office, agency or instrumentality of the Government for such
service, assistance and cooperation as may be necessary in fulfilling its functions and responsibilities and
for this purpose enlist the services of any government official or employee in the pursuit of his tasks.
Departments, bureaus, agencies, offices, instrumentalities and corporations to whom the Office of the
Solicitor General renders legal services are authorized to disburse funds from their sundry operating and
other funds for the latter Office. For this purpose, the Solicitor General and his staff are specifically
authorized to receive allowances as may be provided by the Government offices, instrumentalities and
corporations concerned, in addition to their regular compensation.
(10) Represent, upon the instructions of the President, the Republic of the Philippines in international
litigations, negotiations or conferences where the legal position of the Republic must be defended or
presented.
(11) Act and represent the Republic and/or the people before any court, tribunal, body or commission
in any matter, action or proceeding which, in his opinion, affects the welfare of the people as the ends
of justice may require; and
(12) Perform such other functions as may be provided by law.
Section 36. Appointments. - The Solicitor General shall be appointed by the President and shall have the same
qualifications for appointment, rank, prerogatives, and privileges as those of the Presiding Justice of the Court
of Appeals.
The Assistant Solicitors General and the Solicitors shall be appointed by the President upon recommendation of
the Solicitor General. The Trial Attorneys and administrative personnel in the Office of the Solicitor General shall
be appointed by the Solicitor General.
Section 37. Acting Solicitor General. - In case of absence or temporary incapacity of the Solicitor General, the
President shall designate an Acting Solicitor General. In case of death, permanent incapacity, removal or
resignation of the Solicitor General, or vacancy thereof, the President shall designate an Acting Solicitor
General, who shall act as such until a new Solicitor General is appointed, or appoint a new Solicitor General.
Title IV
AGRICULTURE
CHAPTER 1
GENERAL PROVISIONS
Section 1. Declaration of Policy. - The State shall promote the well being of farmers, including share tenants,
leaseholders, settlers, fishermen, and other rural workers by providing an environment in which they can
increase their income, improve their living conditions, and maximize their contributions to the national
economy. Toward this end, the State shall accelerate agricultural development and enhance the production
of agricultural crops, fisheries, and livestock by optimizing the use of resources and by applying modern farming
systems and technology in order to attain food security for domestic use and expand and diversify agricultural
production for export. It shall also encourage private initiative in agri-business ventures both in the production
and in the exportation and importation of food and other allied commodities.
Section 2. Mandate. - The Department is the government agency responsible for the promotion of agricultural
development by providing the policy framework, public investments, and support services needed for
domestic and export-oriented business enterprises.
In the fulfillment of this mandate, it shall be the primary concern of the Department to improve farm income
and generate work opportunities for farmers, fishermen, and other rural workers. It shall encourage people's
participation in agricultural development through sectoral representation in agricultural policy-making bodies
so that the policies, plans, and programs of the Department are formulated and executed to satisfy their
needs.
It shall ensure social justice, equity, productivity and sustainability in the use of agricultural resources.
Section 3. Powers and Functions. - The Department shall:
(1) Provide integrated services to farmers, fishermen, and other food producers on production,
utilization, conservation, and disposition of agricultural and fishery resources;
(2) Be responsible for the planning, formulation, execution, regulation, and monitoring of programs and
activities relating to agriculture, food production and supply;
(3) Promulgate and enforce all laws, rules and regulations governing the conservation and proper
utilization of agricultural and fishery resources;
(4) Establish central and regional information systems to serve the production, marketing, and financing
date requirements of the farmers as well as domestic and foreign investors in agribusiness ventures;
(5) Provide comprehensive and effective extension services and training to farmers and other
agricultural entrepreneurs on the production, marketing, and financing aspects of agricultural
enterprises;
(6) Conduct, coordinate, and disseminate research studies on appropriate technologies for the
improvement and development of agricultural crops, fisheries, and other allied commodities;
(7) Provide the mechanism for the participation of farmers, fishermen, and entrepreneurs at all levels of
policy-making, planning and program formulation;
(8) Coordinate with and enlist other public and private agencies for cooperation and assistance on
matters affecting the policies, plans and programs of the Department;
(9) Perform such other functions as may be provided by law.
Section 4. Organizational Structure. - The Department shall consist of the Department Proper, the Bureaus, and
the Regional, Provincial, Municipal, and Barangay Offices.
The Department Proper shall consist of the Office of the Secretary, the Offices of the Undersecretaries and
Assistant Secretaries and their immediate staffs as determined by them respectively, and the Department
Services.
The Department Services and Bureaus shall be grouped as follows: (1) Production Group; (2) Research, Training
and Extension Group; (3) Agri-Business Group; (4) Planning and Monitoring Group; and (5) Support Group.
CHAPTER 2
DEPARTMENT PROPER
Section 5. Office of the Secretary. - The Office of the Secretary shall consist of the Secretary and his immediate
staff as determined by him.
Section 6. Assistant to the Secretary. - The Secretary shall be assisted by five (5) Undersecretaries, seven (7)
Assistant Secretaries, and the heads of the National Food Authority and the Philippine Coconut Authority who
shall have the rank of Undersecretaries.
Section 7. Undersecretaries. - The Undersecretaries shall assist the Secretary in the exercise of the mandate and
in the discharge of the powers and functions of the Department.
The five (5) Undersecretaries shall be assigned the following functions:
(1) The Undersecretary assigned to Regional Operations shall oversee the implementation of the
agricultural plans, policies, programs, and projects of the regional and field offices of the Department;
(2) The Undersecretary assigned to Staff Operations shall provide staff support services, particularly in
administration and finance, production, research, training, and extension;
(3) The Undersecretary assigned to Policy and Planning shall provide policy and planning support
services, particularly in policy-formulation, planning, and agri-business;
(4) The Undersecretary assigned to Attached Agencies shall exercise supervision over the attached
agencies to ensure that their operations are in conformity with the approved plans and policies of the
Department;
(5) The Undersecretary assigned to Special Concerns shall develop and implement agricultural policies
and priority projects aimed at improving the quality of life of disadvantaged and cultural community
groups living in lowland and upland areas. In addition, he shall handle other special projects as may be
identified or directed by the Department Secretary.
Section 8. Functions of the Undersecretaries. - With respect to his area of responsibility, an Undersecretary shall
have the following functions:
(1) Advise the Secretary in the promulgation of orders and other issuances, with respect to his area of
responsibility;
(2) Exercise supervision and control over the offices, services, operating units, and officers and
employees under his responsibility;
(3) Promulgate rules and regulations, consistent with the policies of the Department that will efficiently
and effectively govern the activities of the units under his responsibility;
(4) Coordinate the functions and activities of the units under his responsibility with those of other units
under the responsibility of the other Undersecretaries;
(5) Exercise delegated authority on matters related to the functions and activities of the units under his
responsibility to the extent granted by the Secretary; and
(6) Perform such other functions as may be provided by law or assigned by the Secretary.
Section 9. Functions of the Assistant Secretaries. - Each of the seven (7) Assistant Secretaries shall head any of
the following: Production Group, Agri-Business Group, Research, Training and Extension Group, Planning and
Monitoring Group, Support Group, Foreign Assisted Projects and the Regional Operations. In connection
therewith, the Assistant Secretaries shall have the following functions:
(1) The Assistant Secretary assigned to the Production Group shall be responsible for providing services
relating to planning, programming, and project development of agricultural production. This group shall
consist of the Bureau of Animal Industry, Bureau of Plant Industry, Bureau of Fisheries and Aquatic
Resources, and Bureau of Soils and Water Management;
(2) The Assistant Secretary assigned to the Agri-Business Group shall be responsible for assisting farmers
and other agri-business ventures by providing marketing assistance and investment information. This
group shall consist of the Marketing Assistance Services and the Agri-Business Investment Information
Services;
(3) The Assistant Secretary assigned to the Research, Training and Extension Group shall be responsible
for conducting research and training as well as providing assistance in the establishment of agricultural
cooperatives. This group shall be composed of the Bureau of Agricultural Research (BAR), Agricultural
Training Institute (ATI), and Bureau of Agricultural Cooperatives Development (BACOD);
(3) The Assistant Secretary assigned to the Planning and Monitoring Group shall take charge of
developing, integrating, monitoring and evaluating all plans and programs of the Department and shall
collect, monitor, and publish agricultural statistics for the Department and its clientele. This group shall
be composed of the Planning and Monitoring Services, Computer Services, and Bureau of Agricultural
Statistics;
(5) The Assistant Secretary assigned to the Support Group shall take charge of providing staff support
services in finance, administration, and management. This shall be composed of the Financial and
Management Services, the Legal Services, and the Administrative Services;
(6) The Assistant Secretary assigned to the Foreign Assisted Projects shall be responsible for the
negotiation and implementation of foreign assisted projects of the Department;
(7) The Assistant Secretary assigned to Regional Operations shall assist the Undersecretary for Regional
Operations in the supervision of regional offices, including the coordination and implementation of
Department plans, policies and programs.
The seven (7) Assistant Secretaries shall, in addition to the abovementioned duties, perform such other
functions as may be assigned by the Secretary. They may also be assigned or placed under the
supervision of the Undersecretaries at the discretion of the Secretary.
CHAPTER 3
DEPARTMENT SERVICES
Section 10. Planning and Monitoring Service. - The Planning and Monitoring Service shall be responsible for the
formulation and integration of plans and programs, emanating from all units of the Department, including the
Bureau, Regional Offices and Attached Agencies. It shall also be responsible for data analysis and monitoring
of the implementation of said plans and programs through its management information system.
Section 11. Computer Service. - The Computer Service shall be responsible for the development and
maintenance of the electronic data processing requirements of the Department.
Section 12. Financial and Management Service. - The Financial and Management Service shall provide services
relating to budgeting, accounting and management.
Section 13. Administrative Service. - The Administrative Service shall be responsible for providing personnel,
records, information, training and other general services.
Section 14. Legal Service. - The Legal Service shall handle the legal requirements including those pertaining to
the quasi-judicial and regulatory functions of the Department Proper and its Bureaus.
Section 15. Agribusiness Investment Information Service. - The Agribusiness Investment Information Service shall
conduct research, gather and collate data related to agribusiness such as laws and regulations, taxation,
production technologies, market strategies, competition, foreign assistance, grants, credit, and new venture
considerations relating to agribusiness and shall package information on agribusiness investment opportunities
and provide sample feasibility studies for different agricultural products and markets.
Section 16. Marketing Assistance Service. - The Marketing Assistance Service shall be responsible for identifying
markets for Philippine agricultural products and shall assist in the planning of market centers, marketing
channels, and distribution networks.
Section 17. Department Services Head. - Each of the Services of the Department shall be headed by a Staff
Director.
CHAPTER 4
BUREAUS AND OFFICES
Section 18. Bureau of Animal Industries. - The Bureau of Animal Industry shall:
(1) Formulate programs for the development and expansion of the livestock, poultry, and dairy industries
to meet the requirements of the growing populace;
(2) Recommend the specific policies and procedures governing the flow of livestock products through
the various stages of marketing, as well as the proper preservation and inspection of such products;
(3) Coordinate and monitor the activities and projects relating to livestock and allied industries;
(4) Prescribe standards for quality in the manufacture, importation, labelling, advertising, distribution,
and sale of livestock, poultry, and allied industries; and
(5) For its own sector, recommend plans, programs, policies, rules and regulations to the Secretary and
provide technical assistance in the implementation of the same.
Section 19. Bureau of Plant Industry. - The Bureau of Plant Industry shall:
(1) Be responsible for the production of improved planting materials, protection of agricultural crops
from pests and diseases, and development and improvement of farm equipment and other structures
related to the plant industry;
(2) Prepare a program for the selection, production and certification of improved planting materials as
well as guidelines for its implementation;
(3) Recommend plant quarantine policies, and prescribe rules and regulations for the prevention,
control, and eradication of pests, diseases, and injuries to plants and plant products; and
(4) For its own sector, recommend plans, programs, policies, rules and regulations to the Secretary and
provide technical assistance in the implementation of the same.
Section 20. Bureau of Fisheries and Aquatic Resources. - The Bureau of Fisheries and Aquatic Resources shall:
(1) Formulate plans for the proper management, accelerated development, and proper utilization of
the country's fishery and aquatic resources;
(2) Undertake studies on the economics of the various phases of the fishing industry, which studies shall
form the bases for the formulation of policies and programs on fisheries and aquatic resources;
(3) Render technical assistance and advisory services in the proper procurement, construction and
operation of the fishing vessels as well as determination and designation of fish landing points for all
commercial fishing boats; and
(4) For its own sector, recommend plans, programs, policies, rules and regulations to the Secretary and
provide technical assistance in the implementation of the same.
Section 21. Bureau of Soils and Water Management. - The Bureau of Soils and Water Management shall:
(1) Advise and render assistance on matters relative to the utilization and management of soils and
water as vital agricultural resources;
(2) Formulate measures and guidelines for effective soil, land, and water resource utilization, as well as
soil conservation in croplands and other agricultural areas;
(3) Undertake soil research programs;
(4) Coordinate with the relevant government agencies in resettlement areas and prepare the
necessary plans for the provision of technical assistance in solving soil impounding and the prevention of
soil erosion, fertility preservation, and other related matters;
(5) Engage in rainmaking projects for agricultural areas and watersheds to solve the problem of
prolonged droughts and minimize their effects on standing agricultural crops; and
(6) For its own sector, recommend plans, programs, policies, rules and regulations to the Secretary and
provide technical assistance in the implementation of the same.
Section 22. Bureau of Agricultural Research. - The Bureau of Agricultural Research shall:
(1) Ensure that all agricultural research is coordinated and undertaken for maximum utility to agriculture;
(2) Tap farmers, farmers' organizations, and research institutions, especially the state colleges and
universities, in the conduct of research for use of the Department and its clientele, particularly the
farmers, fishermen and other rural workers.
Section 23. Bureau of Agricultural Cooperatives and Development. - The Bureau of Agricultural Cooperatives
and Development shall:
(1) Formulate an integrated system for development and evaluation of agricultural cooperatives;
(2) Provide advice and assistance in the establishment of agricultural cooperatives in the rural
communities; and
(3) Evolve a program to promote the economic viability of agricultural cooperatives.
The Bureau shall include in its area of responsibility non-agricultural cooperatives.
Section 24. Bureau of Agricultural Statistics. - The Bureau of Agricultural Statistics shall:
(1) Be mainly responsible for the collection, compilation, and official release of agricultural statistics;
(2) Exercise technical supervision over data collection centers;
(3) Coordinate all agricultural statistics and economic research activities of all bureaus, corporations
and offices under the Department.
Section 25. Agricultural Training Institute. - The Agricultural Training Institute shall:
(1) Be responsible for the training of all agricultural extension workers and their clientele, who are mostly
farmers and other agricultural workers;
(2) Ensure that training programs address the real needs of the agricultural sectors; and
(3) Ensure that the research results are communicated to the farmers through the appropriate training
and extension activities.
CHAPTER 5
REGIONAL OFFICES
Section 26. Functions. - The Department of Agriculture is authorized to establish, operate, and maintain a
Regional Office in each of the administrative regions of the country. Each Regional Office shall be headed by
a Regional Director, to be assisted by three (3) Assistant Regional Directors, assigned to Operations, Research,
and Support Services, respectively. Each Regional Office shall have, within its administrative regions, the
following duties and responsibilities:
(1) Provide efficient and effective frontline services to the people;
(2) Implement and enforce in its area the laws and policies, plans, programs, projects, rules, and
regulations issued by the Department including plant and animal quarantine laws, rules and regulations;
(3) Coordinate with regional offices of other departments, offices and agencies in the region;
(4) Coordinate with local government units; and
(5) Perform such other functions as may be provided by law or assigned appropriately by the Secretary.
At the provincial level, policies, plans, programs, projects, laws, rules, and regulations of the Department shall
be implemented by the Provincial Agriculture and Fisheries Officer and, at the municipal and barangay levels,
by the Municipal Agriculture and Fisheries Office.
Section 27. Importation of Plants and Plant Products. - Subject to such special quarantine orders, rules and
regulations as may be promulgated by the Secretary of Agriculture upon recommendation of the Plant
Quarantine Board, it is prohibited to import or introduce into the Philippines, plants, plant products, soil or
packing materials of plants capable of harboring plant pests or being a source or medium of infection or
infestation of plants by pests. For purposes of this Chapter, the term "plants" shall refer to living plants and any
part thereof, while "plant products" shall mean products derived from plants either in their natural state or
processed form.
Section 28. Importation of Potential Animal Pests. - The importation of certain species of animals which are liable
to become agricultural crop pests and capable of causing injury to agricultural crops is hereby prohibited,
except in limited quantities for justifiable purposes and upon written permission from the Regional Director
concerned or other official of the Department who may be authorized by the Secretary of Agriculture.
Section 29. Plants, Plant Products, and Other Materials in Transit. - Commodities mentioned under the next two
preceding sections, including food provisions and ornaments on board carriers that are in transit, shall be
required to get a clearance from the Plant Quarantine Officer assigned at the port concerned.
Section 30. Exportation of Plants and Plant Products. - The Regional Director concerned, the Plant Quarantine
Officer or other officials of the Department who may be authorized by the Secretary of Agriculture shall cause
the inspection and certification of all plants, plant products and other related materials for exportation,
capable of harboring plant pests, if the importing country so requires.
Section 31. Inspection of Plants, Plant Products, Potential Animal Pests, and Other Materials. - The Regional
Director concerned or other officials of the Department who may be authorized by the Secretary of Agriculture
shall cause the appropriate inspection of the commodities mentioned in the next four preceding sections and
apply the necessary plant quarantine measures in order to attain the objectives of this Chapter.
Section 32. Domestic Quarantine of Plants and Plant Products. - In order to prevent and arrest the spread to
other areas of injurious plant pests existing in certain localities within the Philippines, the Regional Director
concerned, the Plant Quarantine Officer or other officials of the Department who may be authorized by the
Secretary of Agriculture shall cause the inspection, treatment and certification of plants and plant products
involved in movement from one locality to another within the country.
Section 33. Appointment of Plant Quarantine Officers. - The Secretary shall, upon recommendation of the
Regional Director concerned and in consultation with the Director of Plant Industry, appoint Plant Quarantine
Officers to act as his representatives in implementing and enforcing the provisions of this Chapter.
Section 34. Powers and Duties and Plant Quarantine Officers. - The Plant Quarantine Officers shall have
authority to:
(1) Inspect all carriers, passengers, crew, luggage and incoming mails to determine the presence of
plants, plant products and other materials capable of harboring plant pests as well as potential animal
pests;
(2) Enter into and inspect any and all areas where plants, plant products and other materials capable
of harboring plant pests are landed, stored or grown;
(3) Examine imported plants, plant products, and other materials capable of harboring plant pests as
well as potential animal pests and administer necessary measures to insure effective implementation of
the provisions of this Chapter;
(4) Inspect, administer treatment and certify plants, plant products and other related materials intended
for export, if the importing country so requires;
(5) Confiscate and destroy or refuse entry of plants, plant products and potential animal pests involved
in prohibited importations and deny inspection, certification or clearance of the same; and
(6) Perform such other related duties as may be provided by law.
Section 35. Non-Liability Clause. -
(1) All charges for storage, demurrage, cartage, labor and delays incident to inspection, cost of
disinfection or disinfestation and other post-entry requirements shall be paid by the importer or exporter
as the case may be.
(2) The Regional Director and the authorized officials of the Department shall not be held liable for
damages to the commodity in the course of the implementation of the provisions of this Chapter.
Section 36. Duties of Importer and Exporter. - The importers, exporters, or their authorized representatives shall
submit a declaration to the Regional Director concerned or other authorized officials of the Department, at or
before the time of entry or embarkation, of plants and plant products for importation or exportation. Such
declaration shall indicate the name and address of the consignor or consignee, the purpose, nature and
quantity of plants and plant products, the country or locality where the same was grown, place and date of
unloading or embarkation and the registered name of the carrier carrying the consignment.
Section 37. Entrance and Clearance of Carrier. -
(1) The owner, operator, agent or master of carriers plying international or domestic routes are hereby
required to serve notice of arrival and departure and to provide inward and outward cargo manifests
and other declarations of said carriers to the Plant Quarantine Officer at the post. Prior to departure, the
agent or master of said carrier must secure a clearance from the Plant Quarantine Officer thereat.
(2) The Collector of Customs or his authorized agents shall require the owner, agent or master of carrier
to submit a copy of the certificate of plant quarantine clearance as a pre-requisite to the issuance of
the customs clearance.
Section 38. Collection of Fees. -
(1) The Regional Director concerned shall, with the approval of the Secretary of Agriculture, promulgate
rules and regulations governing the collection of regulatory fees for inspection, certification, import
permits, commodity treatment and others, on commodities described in this Chapter which shall
constitute the revolving fund of the national plant quarantine service.
(2) Importations and exportations of all government departments or agencies and government-owned
or controlled corporations, and donations to and for the account of any duly registered relief
organization or any charitable institution certified by the Department of Social Services and Welfare,
embassies of foreign governments, and those that may be declared by the President, upon the
recommendation of the National Economic and Development Authority, in the interest of economic
development, are exempt from payment of the fees herein prescribed excluding, however, the
expense incurred in commodity treatment.
Section 39. Overtime Services. - The services of Plant Quarantine Officers, fumigators and helpers performed
outside office hours and reimbursement of meal, transportation, lodging and other incidental expenses shall be
chargeable to the party or parties served at the rates to be prescribed by the Secretary of Agriculture upon
recommendation of the Regional Director concerned.
Section 40. Cooperating Agencies. - The Secretary of Agriculture may call upon the other government
agencies in the implementation of plant quarantine regulations, and dissemination of information to the
general public.
Section 41. Special Quarantine Orders, Rules and Regulations. - Special quarantine orders, rules and regulations
shall be promulgated by the Secretary of Agriculture upon recommendation of the Plant Quarantine Board to
carry out and implement the provisions of this Chapter.
Section 42. Quasi-judicial Authority. -
(1) The Regional Directors and the other officials of the Department who may be authorized by the
Secretary of Agriculture, after proper hearing, are hereby empowered to impose administrative fines for
the violation of and non-compliance with quarantine orders, rules and regulations promulgated in
accordance with this Chapter.
(2) The decisions of the Regional Directors concerned and those of the other authorized officials of the
Department under this section are appealable to the Secretary of Agriculture whose decision shall be
final.
Section 43. Plant Quarantine Board. - For the purpose of carrying out the provisions of this Chapter, there shall
be a Plant Quarantine Board which shall be composed of the Undersecretary of Agriculture for Regional
Operations as Chairman; the Director of Plant Industry, as Vice-Chairman; and the following members: the
Commissioner of Customs, the General Manager of the Philippine Ports Authority, the Director of Quarantine,
the Director of Animal Industry, the Postmaster General, the Administrator of the Philippine Coconut Authority,
the Director of Forest Development or their representatives, the Chief of the Department Legal Service, the
Chief of the Plant Quarantine Section and the Chief of the Crop Protection Division of the Bureau of Plant
Industry, and a representative each from the National Economic and Development Authority, the Central Bank
of the Philippines, and the Importers' and Exporters' Confederation, as members.
Section 44. Duties of the Board. - The Plant Quarantine Board shall act as the advisory body to assist the
Secretary in formulating orders, rules and regulations for the effective implementation of the provisions of this
Chapter.
Section 45. Board Meeting. - The Board shall meet once every quarter or may call special meetings when
necessary, provided that such special meeting shall not be held more than four times annually.
Section 46. Quorum. - A majority of the members of the Board shall constitute a quorum.
CHAPTER 6
ATTACHED AGENCIES
Section 47. Attached Agencies. - The following units are hereby attached to the Department:
(1) Agricultural Credit Policy Council
(2) National Agricultural and Fishery Council
(3) Philippine Technical and Administrative Committee for SEAFDEC
(4) Livestock Development Council
(5) National Meat Inspection Commission
(6) Fertilizer and Pesticide Authority
(7) Fiber Industry Development Authority
(8) National Tobacco Administration
(9) Sugar Regulatory Administration
(10) National Food Authority and its subsidiaries
(11) Quedan Guarantee Fund Board
(12) Philippine Fisheries Development Authority
(13) Philippine Rice Research Institute
(14) Philippine Coconut Authority and its subsidiaries
(15) National Irrigation Administration
(16) Sacovia Development Authority; and
(17) Regional Cooperative Development Assistance Offices (Regions IX and XII).
Section 48. Specific Functions. -
(1) The National Agricultural and Fishery Council shall act as an advisory and coordinative body of the
Department. As such, it shall conduct and encourage consultative discussions among all agricultural
sectors at the municipal, provincial, regional and national levels;
(2) The Philippine Technical and Administrative Committee for Southeast Asia Fisheries Development
Center (SEAFDEC) shall be responsible for the administration and management of the SEAFDEC
Aquaculture Department and shall monitor and assess the performance of research projects on fisheries
and aquaculture in accordance with the policies or standards established by the SEAFDEC International
Council and the Department;
(3) The Livestock Development Council shall be responsible for the formulation and establishment of
comprehensive policy guidelines for the livestock industry, preparation of plans and programs and
evaluation of livestock programs/projects;
(4) The National Meat Inspection Commission shall conduct actual ante mortem inspection on all
animals presented for slaughter and post mortem inspection on all animals presented for slaughter and
post mortem inspection on all carcasses intended for human consumption in all abattoirs in the country;
render technical assistance in the construction of meat establishments (abattoirs, dressing plants,
processing plants and meat markets) particularly on the selection of sites, and plant design preparation,
equipment design and test runs; exercise overall supervision and control of management and
operations of all abattoirs, dressing plants, meat processing plants and meat markets.
Section 49. Organization and Operation. - The agencies attached to the Department shall continue to operate
and function in accordance with their respective charters, laws or orders creating them, except as otherwise
provided in this Code. Any provision of law to the contrary notwithstanding, the Secretary shall serve as
Chairman of the governing boards of all attached units or agencies.
Title V
PUBLIC WORKS AND HIGHWAYS
CHAPTER 1
GENERAL PROVISIONS
Section 1. Declaration of Policy. - The State shall maintain an engineering and construction arm and
continuously develop its technology, for the purposes of ensuring the safety of all infrastructure facilities and
securing for all public works and highways the highest efficiency and the most appropriate quality in
construction. The planning, design, construction and maintenance of infrastructure facilities, especially national
highways, flood control and water resources development systems, and other public works in accordance with
national development objectives, shall be the responsibility of such an engineering and construction arm.
However, the exercise of this responsibility shall be decentralized to the fullest extent feasible.
Section 2. Mandate. - The Department of Public Works and Highways shall be the State's engineering and
construction arm and is tasked to carry out the policy enunciated above.
Section 3. Powers and Functions. - The Department, in order to carry out its mandate, shall:
(1) Provide technical services for the planning, design, construction, maintenance, or operation of
infrastructure facilities;
(2) Develop and implement effective codes, standards, and reasonable guidelines to ensure the safety
of all public and private structures in the country and assure efficiency and proper quality in the
construction of public works;
(3) Ascertain that all public works plans and project implementation designs are consistent with current
standards and guidelines;
(4) Identify, plan, secure funding for, program, design, construct or undertake prequalification, bidding,
and award of contracts of public works projects with the exception only of specialized projects
undertaken by Government corporate entities with established technical capability and as directed by
the President of the Philippines or as provided by law;
(5) Provide the works supervision function for all public works constructions and ensure that actual
construction is done in accordance with approved government plans and specifications;
(6) Assist other agencies, including the local governments, in determining the most suitable entity to
undertake the actual construction of public works projects;
(7) Maintain or cause to be maintained all highways, flood control, and other public works throughout
the country except those that are the responsibility of other agencies as directed by the President of the
Philippines or as provided by law;
(8) Provide an integrated planning for highways, flood control and water resource development
systems, and other public works;
(9) Classify road and highways into national, regional, provincial, city, municipal, and barangay roads
and highways, based on objective criteria it shall adopt; provide or authorize the conversion of roads
and highways from one category to another; and
(10) Delegate, to any agency it determines to have the adequate technical capability, any of the
foregoing powers and functions; and
(11) Perform such other functions as may be provided by law.
Section 4. Organizational Structure. - The Department shall be composed of:
(1) The Department Proper consisting of the Office of the Secretary, the Offices of the Undersecretaries
and Assistant Secretaries, the Internal Audit Service, Monitoring and Information Service, Planning
Service, Comptrollership and Financial Management Service, Legal Service, and the Administrative and
Manpower Management Service;
(2) The Bureau of Research and Standards, Bureau of Design, Bureau of Construction, Bureau of
Maintenance, and Bureau of Equipment; and
(3) The Field Offices, consisting of fourteen (14) Regional Offices composed of Region I (Ilocos), Region II
(Cagayan Valley), Region III (Central Luzon, National Capital Region), Region IV-A (Southern Tagalog
Mainland Provinces), Region IV-B (Southern Tagalog Island Provinces), Region V (Bicol), Region VI
(Western Visayas), Region VII (Central Visayas), Region VIII (Eastern Visayas), Region IX (Western
Mindanao) Region X (Northeastern Mindanao) Region XI (Southern Mindanao) and Region XII (Central
Mindanao), and their respective District Offices.
CHAPTER 2
DEPARTMENT PROPER
Section 5. Office of the Secretary. - The Office of the Secretary shall be composed of the Secretary and his
immediate staff.
Section 6. Undersecretaries. - The Secretary shall be assisted by not more than five (5) Undersecretaries who
shall be appointed by the President upon the recommendation of the Secretary. The Secretary is hereby
authorized to delineate and assign the respective functional areas of responsibility of the Undersecretaries.
Such responsibility shall be with respect to the mandate and objectives of the Department and no
Undersecretary shall be assigned primarily administrative responsibilities. Within his functional area of
responsibility, an Undersecretary shall have the following functions:
(1) Advise and assist the Secretary in the formulation and implementation of Department policies, plans
programs and projects;
(2) Supervise all the operational activities of the units assigned to him, for which he is responsible to the
Secretary; and
(3) Perform such other duties and responsibilities as may be assigned or delegated by the Secretary to promote
efficiency and effectiveness in the delivery of public services, or as may be required by law.
Section 7. Assistant Secretaries. - The Secretary shall also be assisted by six (6) Assistant Secretaries appointed by
the President of the Philippines upon the recommendation of the Secretary; one (1) to be responsible for the
Internal Audit Services; one (1) for the Monitoring and Information Service; one (1) for the Planning Service; one
(1) for the Comptrollership and Financial Management Service; one (1) for the Legal Service; and one (1) for
the Administrative and Manpower Management Service.
CHAPTER 3
DEPARTMENT SERVICES
Section 8. Internal Audit Service. - The Internal Audit Service shall conduct comprehensive audit of various
Department activities. Specifically, it shall have the following functions:
(1) Advice the Secretary on all matters relating to management control and operations audit;
(2) Conduct management and operations performance audit of Department activities and units and
determine the degree of compliance with established objectives, policies, methods and procedures,
government regulations, and contractual obligations of the Department;
(3) Review and appraise systems and procedures, organizational structure, assets management
practices, accounting and other records, reports and performance standards (such as budgets and
standard costs) of the Department Proper, Bureaus and Regional Offices;
(4) Analyze and evaluate management deficiencies and assist top management to solve the problems
by recommending realistic courses of action; and
(5) Perform such other related duties and responsibilities as may be assigned or delegated by the
Secretary or as may be required by law.
Section 9. Monitoring and Information Service. - The Monitoring and Information Service is hereby created to
provide the Secretary timely reports on the status of various Department projects and activities; and develop
and implement information programs for mass dissemination in coordination with the appropriate government
agencies. The Monitoring and Information Service shall have the following functions:
(1) Advice the Secretary on all matters relating to monitoring and public information;
(2) Develop and maintain a system for retrieving and processing monitoring information on all projects
and activities of concern to the Secretary;
(3) Provide accurate and timely status and exception reports to the Secretary;
(4) Generate monitoring reports for the President, the Cabinet, or for any other purpose as required by
the Secretary;
(5) Develop and supervise the implementation of communications programs to have relevant policies,
programs and plans of the Department understood by the public;
(6) Produce and supervise the dissemination of media materials in line with the national government
public information programs;
(7) Coordinate with appropriate national government agencies tasked with public information affairs;
and
(8) Perform such other related duties and responsibilities as may be assigned or delegated by the
Secretary or as may be required by law.
The existing Infrastructure Computer Center shall be under the supervision of the Assistant Secretary for
Monitoring Information. It shall establish and maintain a computerized data bank as a repository of statistics
and information on infrastructure operations. It shall also provide computer service to the different offices of the
Department.
Section 10. Planning Service. - The Planning Service shall provide the Department with the capability to
undertake infrastructure development planning and programming. For this purpose, it shall have the following
functions:
(1) Advice the Secretary on all matters relating to infrastructure planning;
(2) Formulate strategies and priorities for infrastructure development consistent with national
development objectives; and initiate or undertake, coordinate and review area and sector surveys for
development planning;
(3) Formulate long-range, medium-term and annual development plans and programs for
infrastructure, especially highways, flood control and water resource development systems, and other
public works projects, including phasing of implementation;
(4) Identify priority packages for infrastructure development, especially highways, flood control and
water resource development systems, and other public works projects, undertake or supervise and
evaluate the conduct of feasibility studies and project preparation thereof;
(5) Prioritize project implementation and the allocation of funds and other resources and package
project proposals for funding and implementation;
(6) Evaluate and appraise all regional and interregional infrastructure development plans and programs
as to their feasibility and consistency with approved strategies and long and medium-term plans;
(7) Initiate regular Department-wide planning exercises and act as the secretariat thereof;
(8) Gather, analyze and organize needed statistical data and information;
(9) Provide technical assistance related to its functions to the other Services, Bureaus and the Regional
Offices as needed; and
(10) Perform such other related duties and responsibilities as may be assigned or delegated by the
Secretary or as may be required by law.
Section 11. Comptrollership and Financial Management Service. - The Comptrollership and Financial
Management Service shall provide the Department with coordinated services relating to financial systems and
procedures, budget, cash, accounting, and all financial housekeeping matters. For such purposes, it shall have
the following functions:
(1) Advise the Secretary on all matters relating to the accounting of government expenditures and
receipts, budgeting and cash management, project finances, and financial systems and procedures;
(2) Prepare budget proposals and pursue formal budget authorizations; undertake budget execution,
and prepare and submit all appropriate reports to the proper offices;
(3) Develop and maintain accounting, financial and assets management systems, procedures, and
practices in the Department proper, Bureaus, and Regional Offices;
(4) Provide assistance in its area of specialization to any unit of the Department and, when requested,
to government corporations and councils attached to the Department; and
(5) Perform such other related duties and responsibilities as may be assigned or delegated by the
Secretary or as may be required by law.
Section 12. Legal Service. - The Legal Service provides the Department with services on such legal affairs as
contract letting and litigation, legal and legislative research, complaints and investigation, legal counselling
and other matters of law. For such purposes, it shall have the following functions:
(1) Advise the Secretary on all matters relating to legal affairs;
(2) Prepare Department contracts and legal instruments, review and interpret all contracts and
agreements entered into by the Department; evaluate all legal proposals;
(3) Conduct administrative investigation as well as the review of administrative charges against officers
and employees of the Department;
(4) Exercise functional jurisdiction over the legal staffs of Regional Offices;
(5) Provide legal assistance to the Department Proper, the Bureaus and Regional Offices and, when
requested, the attached corporations; and
(6) Perform such other related duties and responsibilities as may be assigned or delegated by the
Secretary or as may be required by law.
Section 13. Administrative and Manpower Management Service. - The Administrative and Manpower
Management Service provides the Department with services relating to human resources development,
personnel, records, facilities maintenance, medical and dental, security and property and procurement
services. For such purposes, it shall have the following functions:
(1) Advise the Secretary, on all matters relating to internal administration and human resources
management;
(2) Prepare and implement an integrated personnel plan that shall include provisions on merit
promotions, performance evaluation, job rotation, suggestions and incentive awards systems and
health and welfare services;
(3) Provide services related to human resources training, education, and development, including
manpower and career planning and forecasting and development of indigenous training materials;
(4) Develop, establish and maintain an efficient and cost-effective property procurement system and
facilities and coordinate or otherwise interface with relevant agencies, whether government or private,
for the purpose of developing or upgrading the system;
(5) Secure and maintain necessary Department facilities and develop, establish and maintain an
efficient and effective security system covering among others, personnel, physical installations,
equipment, documents and materials, including the conduct of security investigations;
(6) Coordinate with the appropriate government agencies for a more efficient conduct of
administrative processes;
(7) Develop, establish and maintain an efficient records system;
(8) Provide assistance in its area of specialization to the Department Proper, Bureaus and Regional
Offices and, when requested, the government agencies and corporations attached to the
Department; and
(9) Perform such other related duties and responsibilities as may be assigned or delegated by the
Secretary or as may be required by law.
CHAPTER 4
THE BUREAU
Section 14. Bureau Head. - Each Bureau shall be headed by a Bureau Director who shall be responsible for
efficiently and effectively carrying out the functions of the Bureau.
Section 15. Bureau of Research and Standards. - The Bureau of Research and Standards shall develop and set
effective standards and reasonable guidelines to ensure the safety of all infrastructure facilities in the country
and to assure efficiency and proper quality in the construction of government public works. In pursuit of this
task, the Bureau shall engage in research and development in all major areas pertinent to infrastructure
development. For such purposes, it shall have the following functions:
(1) Study, on a continuing basis, and formulate and recommend guidelines, standards, criteria, and
systems for the survey and design, construction, rehabilitation, maintenance and improvement of all
public works and highways;
(2) Conduct or sponsor research on construction materials and formulate and recommend policies,
standards and guidelines on materials and quality control;
(3) Undertake or cause to be undertaken specialized technical studies to advance the inhouse
technology of the Department and secure the most complete information for project development
and implementation purposes;
(4) Formulate technical training programs for Department technical personnel, including the
identification of appropriate local and foreign training programs, and recommend the selection of
Department personnel for such programs;
(5) Review and study, for the purpose of recognizing new technologies especially those utilizing
indigenous resources, current national building and construction standards and procedures and make
appropriate recommendations thereon;
(6) Promote, publish and disseminate technical publications;
(7) Provide technical assistance to the Department Proper, other Bureaus, Regional Offices and other
agencies on matters within its competence, including technical assistance in the upgrading or
updating of the Building Code, and other services;
(8) Cooperate or coordinate with other established research, development, and engineering centers in
areas of common or national interests; and
(9) Perform such other duties and responsibilities as may be assigned or delegated by the Secretary or
as may be required by law.
Section 16. Bureau of Design. - The Bureau of Design shall ascertain that all government infrastructure project
implementation plans and designs are consistent with current standards and guidelines. For this purpose, it shall
have the following duties and responsibilities:
(1) Conduct or initiate, supervise and review the results of field surveys for highways, flood control and
water resource development systems, and other public works projects, including aerial, hydrologic,
hydrographic, topographic, geotechnical and other investigations;
(2) Conduct or initiate, supervise and review the preparation of schemes, designs, specifications,
estimates, tender and contract documents covering the architectural, structural, mechanical, electrical
and other technical design aspects of highways, flood control and other projects of the Department or
of other departments upon request or agreement;
(3) Review and evaluate the designs, specifications, estimates, tender and contract documents
covering the architectural, structural, mechanical, electrical and other technical design aspects of
public works projects of all agencies in accordance with current standards and guidelines;
(4) Provide technical assistance in the selection of firms or entities that shall undertake actual
construction of public works projects via participation in the technical evaluation aspect of the
bidding/award process; and
(5) Perform such other related duties and responsibilities as may be assigned or delegated by the
Secretary of as may be required by law.
Section 17. Bureau of Construction. - The Bureau of Construction shall provide technical services on construction
works for infrastructure projects and facilities. For this purpose, it shall have the following duties and
responsibilities:
(1) Formulate policies relating to construction management and contract administration;
(2) Review and evaluate construction programs, estimates, tender and contract documents;
(3) Inspect, check and monitor construction and works supervision activities of field implementing offices
for the purpose of ensuring that such activities are being conducted in accordance with the current
standards and guidelines of the Department;
(4) Provide specialist support to implementing field offices on construction management and contract
administration; and
(5) Perform such other related duties and responsibilities as may be assigned or delegated by the
Secretary or as may be required by law.
Section 18. Bureau of Maintenance. - The Bureau of Maintenance provides technical services on the
maintenance and repair of infrastructure projects and facilities. For this purpose, it shall have the following
duties and responsibilities:
(1) Formulate policies relating to the maintenance of infrastructure projects and facilities;
(2) Review and evaluate maintenance programs, estimates and tender and contract documents;
(3) Inspect, check, and monitor maintenance activities of implementing field offices for the purpose of
ensuring that such activities are being conducted in accordance with the current standards and
policies of the Department;
(4) Provide specialist support to implementing field offices on the maintenance of infrastructure projects
and facilities;
(5) Perform such other related duties and responsibilities as may be assigned or delegated by the
Secretary or as may be required by law.
Section 19. Bureau of Equipment. - The Bureau of Equipment provides technical services on the management
of construction and maintenance equipment and ancillary facilities. For this purpose it shall have the following
duties and responsibilities:
(1) Formulate policies relating to the management of infrastructure equipment and ancillary facilities;
(2) Review and evaluate programs, estimates, tender and contract documents for equipment;
(3) Inspect, check and monitor the management of equipment by regional equipment services and
area shops for the purpose of ensuring that such activities are being conducted in accordance with the
current standards and policies of the Department;
(4) Provide specialist support to implementing field offices on equipment management; and
(5) Perform such other related duties and responsibilities as may be assigned or delegated by the
Secretary or as may be required by law.
CHAPTER 5
REGIONAL OFFICES
Section 20. Regional Offices. - Regional Offices shall be responsible for highways, flood control and water
resource development systems, and other public works within the region, except those defined in Section 3,
par. (4) hereof. For this purpose, their duties and responsibilities shall be as follows:
(1) Undertake and evaluate the planning, design, construction and works supervision functions of the
Department for the above mentioned infrastructure within the region;
(2) Undertake the maintenance of the above mentioned infrastructure within the region and supervise
the maintenance of such local road and other infrastructure receiving national government financial
assistance as the Secretary may determine;
(3) Ensure the implementation of laws, policies, programs, rules and regulations regarding the above
mentioned infrastructure as well as all public and private physical structures;
(4) Provide technical assistance related to their functions to other agencies within the region, especially
the local government;
(5) Coordinate with other departments, agencies, institutions and organizations, especially local
government units within the region 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 Department responsive to the needs of the general public, compile and submit such
information to the central office, and recommend such appropriate actions as may be necessary; and
(7) Perform such other related duties and responsibilities as may be assigned or delegated by the
Secretary or as may be required by law.
The Department shall retain and have such Project Management Offices as may be required which shall be
under the supervision and control of the appropriate Regional Director, unless otherwise determined by the
Secretary for reasons of supra-regional scope, magnitude, and multi-functional coverage.
Section 21. Regional Director. - The Regional Office shall be headed by a Regional Director who shall be
responsible for efficiently and effectively carrying out the duties and responsibilities of the Regional Office.
Towards this end, and in line with the policy of decentralization, he shall, within his defined powers, exercise
functional and administrative supervision over District Offices within the region including the authority to commit
their resources and personnel to integrated province or city-wide development thrusts.
He shall also perform such other related duties and responsibilities as may be assigned or delegated by the
Secretary or as may be required by law.
The Regional Director shall be assisted by two (2) Assistant Regional Directors who shall exercise supervision,
respectively over: (1) the construction, maintenance and works supervision functions in the region; and (2) the
planning, project design, evaluation and technical assistance functions of the Regional Office.
Section 22. District Office. - There shall be a District Office in each of the provinces and cities throughout the
country to be headed by a District Engineer appointed by the Secretary. A province or city may, however, be
divided into two (2) or more engineering districts, upon determination and issuance of an administrative order
by the Secretary. The District Office shall be responsible for all highways, flood control and water resource
development systems, and other public works within the district, except those defined under Section 3, par. (4)
hereof. For this purpose, it shall have the following duties and responsibilities:
(1) Undertake and evaluate the planning, design, construction, and works supervision functions of the
Department for the above mentioned infrastructure in the district;
(2) Undertake the maintenance of the abovementioned infrastructure within the district and supervise
the maintenance of such local roads and other infrastructure receiving national government financial
assistance as the Secretary may determine;
(3) Coordinate with other departments, agencies, institutions, and organizations, especially local
government units within the district in the planning and implementation of infrastructure projects;
(4) Provide technical assistance to other agencies at the local level on public works planning, design,
construction, maintenance and other engineering matters including securing from the Regional Office
or, through the same office, assistance from the Department Proper or Bureaus;
(5) Conduct continuing consultations with the local communities, take appropriate measures to make
the services of the Department responsive to the needs of the general public, compile and submit such
information to the Regional Office and recommend such appropriate actions as may be necessary;
and
(6) Perform such other related duties and responsibilities as may be assigned or delegated by the
Secretary or as may be required by law.
Section 23. District Engineer. - The District Engineer of or within a province or city shall be accountable for the
efficient and effective conduct of the duties and responsibilities of the District Office of which he is the head.
Within his defined powers, he shall exercise functional and administrative supervision over district operations
including the authority to recommend that field resources and personnel be committed to integrated district-
wide development thrusts. He shall also perform such other related duties and responsibilities as may be
assigned or delegated by the Secretary or as may be required by law.
Section 24. Equipment Services. - The Regional Equipment Services, including regional depots and area shops
are hereby reorganized to undertake the management, repair, maintenance and rehabilitation of construction
and maintenance equipment. Each depot or shop shall be operated, to the extent practicable, as a profit
center. The Regional Equipment Services shall be under the administrative supervision of the Regional Director
and technical supervision of the Bureau of Equipment.
CHAPTER 6
ATTACHED AGENCIES
Section 25. Attached Agencies and Corporations. - Agencies and corporations attached to the Department
shall continue to operate and function in accordance with their respective charters/laws/executive orders
creating them. Accordingly, the Metropolitan Waterworks and Sewerage System, the Local Water Utilities
Administration, the National Irrigation Administration, and the National Water Resources Council, among others,
shall continue to be attached to the Department; while the Metropolitan Manila Flood Control and Drainage
Council, as reorganized, shall be attached to the Department.
Title VI
EDUCATION, CULTURE AND SPORTS
CHAPTER 1
GENERAL PROVISIONS
Section 1. Declaration of Policy. - The State shall protect and promote the right of all citizens to quality
education at all levels and shall take appropriate steps to make such education accessible to all. Pursuant to
this, the State shall:
1) Establish, maintain and support a complete, adequate, and integrated system of education relevant
to the needs of the people and society;
2) Establish and maintain a system of free public education in the elementary and high school levels.
Without limiting the natural right of parents to rear their children, elementary education is compulsory for
all children of school age;
3) Establish and maintain a system of scholarship grants, student loan programs, subsidies, and other
incentives which shall be available to deserving students in both public and private schools, especially
to the underprivileged;
4) Encourage non-formal, informal, and indigenous learning systems, as well as self-learning,
independent, and out-of-school study programs particularly those that respond to community needs;
and
5) Provide adult citizens, the disabled, and out-of-school youth with training in civics, vocational
efficiency, and other skills.
Section 2. Mandate. - The Department shall be primarily responsible for the formulation, planning,
implementation and coordination of the policies, plans, programs and projects in the areas of formal and non-
formal education at all levels, supervise all educational institutions, both public and private, and provide for the
establishment and maintenance of a complete, adequate and integrated system of education relevant to the
goals of national development.
Section 3. Powers and Functions. - To accomplish its mandate and objectives, the Department shall have the
powers and functions of formulating, planning, implementing and coordinating the policies, plans, programs
and projects for the following:
(1) Elementary, secondary, physical and international education;
(2) Non-formal and vocational or technical education;
(3) Higher education;
(4) Development of culture;
(5) Foreign and locally assisted projects and other activities relative to Subsections (1), (2), (3) and (4);
and
(6) Perform such other functions as may be provided by law.
Section 4. Organizational Structure. - The Department, aside from the Department Proper, shall consist of Bureau
and Regional Offices.
CHAPTER 2
DEPARTMENT PROPER
Section 5. Office of the Secretary. - The Office of the Secretary shall be composed of the Secretary and his
immediate staff.
Section 6. Undersecretaries. - The Secretary shall be assisted by five (5) Undersecretaries, each of whom shall be
responsible for the following:
(1) Elementary education, secondary education, physical education and international education
programs and centers;
(2) Non-formal education, vocational/technical education, and youth organizations;
(3) Higher education, cultural agencies, and foreign assisted projects;
(4) Internal administration and management, and regional coordination; and
(5) Legal and legislative affairs, and other attached agencies and centers.
CHAPTER 3
DEPARTMENT SERVICES
Section 7. Functions of the Services. - The Services of the Department shall consist of the following:
(1) The Planning Service shall be responsible for providing the Department with economical, efficient,
and effective services relating to planning, programming, and project development;
(2) The Financial and Management Service shall be responsible for providing the Department with staff
advice and assistance on budgetary, financial, and management improvement matters;
(3) The Administrative Service shall be responsible for providing the Department with economical,
efficient, and effective services relating to legal assistance, information, records, supplies or equipment,
collection, disbursement, security and custodial work;
(4) The Human Resources Development Service, shall:
(a) Develop and administer a personnel program which shall include selection and placement,
classification and pay, career, and employment development, performance rating, employee
relations and welfare services;
(b) Act on all matters concerning attendance, leaves of absences, appointments, promotions,
and other personnel transactions; and
(c) Conduct training programs in the Department.
(5) The Technical Service, which includes the Office of the Head Executive Assistant and the Information
and Publication Service shall take charge of technical staff activities which cannot be allocated to the
four (4) other services.
CHAPTER 4
BOARD OF HIGHER EDUCATION
Section 8. Organization. - The Board shall be composed of an Undersecretary of the Department of Education,
Culture and Sports designated as Chairman and four other members to be appointed by the President of the
Philippines upon nomination by the Secretary of Education, Culture and Sports for a term of four years. The four
members shall have distinguished themselves in the field of higher education and development either in the
public or private sector. The Director of the Bureau of Higher Education shall participate in the deliberation of
the Board but without the right to vote.
Section 9. Functions. - The Board of Higher Education shall:
(1) Articulate the policy and support the framework for both public and private post-secondary
education;
(2) Make policy recommendations regarding the planning and management of the integrated system
of higher education and the continuing evaluation thereof;
(3) Recommend to the Secretary of Education, Culture and Sports steps to improve the governance of
the various components of the higher education system at national and regional levels; and
(4) Assist the Secretary of Education, Culture and Sports in making recommendations relative to the
generation of resources and their allocation for higher education.
Section 10. Staff Assistance. - The Bureau of Higher Education shall provide the Board with the necessary
technical and staff support; Provided, That the Board may create technical panels of experts in the various
disciplines as the need arises.
CHAPTER 5
STATE COLLEGES AND UNIVERSITIES
Section 11. Governance. - By virtue of his chairmanship of their boards of trustees as provided in their respective
charters, the Secretary, directly or through his Undersecretaries, shall continue to govern state colleges and
universities.
CHAPTER 6
BUREAUS AND OFFICES
Section 12. Bureau of Elementary Education. - The Bureau of Elementary Education shall have the following
functions:
(1) Conduct studies and formulate, develop, and evaluate programs and educational standards for
elementary education;
(2) Undertake studies necessary for the preparation of prototype curricular designs, instructional
materials and teacher training programs for elementary education;
(3) Formulate guidelines to improve elementary school physical plans and equipment, and general
management of these schools; and
(4) Perform such other functions as may be provided by law.
Section 13. Bureau of Secondary Education. - The Bureau of Secondary Education shall have the following
functions:
(1) Conduct studies and formulate, develop and evaluate programs and educational standards for
secondary education;
(2) Develop curricular designs, prepare instructional materials, and prepare and evaluate programs to
upgrade the quality of the teaching and non-teaching staff at the secondary level;
(3) Formulate guidelines to improve the secondary schools physical plants and equipment, and general
management of these schools; and
(4) Perform such other functions as may be provided by law.
Section 14. Bureau of Technical and Vocational Education. - The Bureau of Technical and Vocational
Education shall have the following functions:
(1) Collaborate with other agencies in the formulation of manpower plans;
(2) Conduct studies, formulate, develop and evaluate post-secondary vocational technical staff, and
formulate guidelines to improve the physical plant and equipment of post-secondary vocational-
technical schools; and
(3) Develop curricular designs and prepare instructional materials, prepare and evaluate programs to
upgrade the quality of teaching and non-teaching staff, and formulate guidelines to improve the
physical plant and equipment of post-secondary, vocational/technical schools.
Section 15. Bureau of Higher Education. - The Bureau of Higher Education shall have the following functions:
(1) Develop, formulate and evaluate programs, projects and educational standards for higher
education;
(2) Provide staff assistance to the Board of Higher Education in its policy and advisory functions;
(3) Provide technical assistance to encourage institutional development programs and projects;
(4) Compile, analyze and evaluate data on higher education; and
(5) Perform other functions provided by law.
Section 16. Bureaus of Non-Formal Education. - The Bureau of Non-Formal Education shall have the following
functions:
(1) Serve as a means of meeting the learning needs of those unable to avail themselves of the
educational services and programs of formal education;
(2) Coordinate with various agencies in providing opportunities for the acquisition of skills necessary to
enhance and ensure continuing employability, efficiency, productivity, and competitiveness in the
labor market; and
(3) Serve as a means for expanding access to educational opportunities to citizens of varied interests,
demographic characteristics and socio-economic origins of status.
Section 17. Bureau of Physical Education and School Sports. - The Bureau of Physical Education and School
Sports shall have the following functions:
(1) Develop human resources through mass-based sports education;
(2) Improve the general fitness of the citizenry;
(3) Promote social and cultural integration through the revival of indigenous games and sports;
(4) Identify and nurture sports talents and promote excellence in sports, traditional games and other
physical activities; and
(5) Perform such other functions as may be provided by law.
CHAPTER 7
REGIONAL OFFICES
Section 18. Organization. - The Department is hereby authorized to establish, operate and maintain a Regional
Office in each of the administrative regions of the country. Each Regional Office shall be headed by a
Regional Director who shall be assisted by an Assistant Regional Director. The Regional Director shall be
responsible for the School Divisions and their Superintendents within his administrative region.
Section 19. Functions. - A Regional Office shall have, within its administrative region, the following functions:
(1) Formulate the regional plan of education based on the national plan of the Department taking into
account the specific needs and special traditions of the region;
(2) Implement laws, rules, regulations, policies, plans, programs and projects of the Department;
(3) Provide economical, efficient and effective education service to the people;
(4) Coordinate with regional offices of other Departments, Offices and agencies in the region;
(5) Coordinate with local government units; and
(6) Perform such other functions as may be provided by law.
CHAPTER 8
ATTACHED AGENCIES
Section 20. Attached Agencies. - The following agencies are hereby attached to the Department:
(1) National Museum;
(2) National Library;
(3) National Historical Institute;
(4) Institute of Philippine Languages;
(5) Instructional Materials Corporation;
(6) Instructional Materials Council;
(7) Educational Development Projects Implementing Task Force;
(8) Educational Assistance Policy Council;
(9) National Youth and Sports Development Board;
(10) National Social Action Council;
(11) National Board of Teachers;
(12) Boy Scouts of the Philippines;
(13) Girl Scouts of the Philippines; and
(14) Records Management and Archives Office.
Section 21. Supervised and Controlled Agencies. - The Department shall exercise supervision and control over
the following agencies:
(1) Health and Nutrition Center; and
(2) National Education Testing and Research Center.
Section 22. Functions and Duties. - The agencies attached to as well as those under the supervision and control
of the Department shall continue to operate and function in accordance with their respective charters or laws
creating them except as otherwise provided in this Code.
CHAPTER 9
MISCELLANEOUS PROVISIONS
Section 23. Medium of Instruction. - The Department shall promulgate rules and the regulations on the medium
of instruction for all schools in accordance with the policy declared in Section 7, Article XIV of the Constitution.
Section 24. School Year. -
1) The school year for public and private schools shall consist of not less than forty (40) weeks for the
elementary and secondary levels, and thirty-six (36) weeks for the college level or eighteen (18) weeks a
semester.
2) The opening date shall be fixed by the Secretary, but it shall not be earlier than the first day of June
nor later than the last day of July of each year unless prevented by fortuitous events.
3) The long school vacation period shall likewise be fixed by the Secretary taking into consideration the
convenience of the pupils and the special climatic conditions prevailing during the said period.
4) The dates established for the long school vacation shall not be changed oftener than one every five
(5) years without prior public hearing properly advertised in a newspaper of general circulation or
announced by the school authorities concerned.
Section 25. School Holidays. - All schools, whether public or private, shall not hold classes on public holidays,
whether regular or special. On holidays especially proclaimed by the President, the schools in the municipality,
city or province affected by the proclamation shall not hold classes. The Secretary may, by reason of public
calamity or emergency, order the closure of any school, public or private, as may have been affected thereby
for such period as necessity may demand.
Section 26. School Sessions. - The regular daily sessions of all public and private schools shall be held during the
hours fixed by the Secretary or his duly authorized representatives. Except in college, no class sessions shall be
held on Saturdays, Sundays, or holidays unless to offset class sessions suspended by competent authority.
Section 27. School Rituals. -
(1) School rituals prepared and prescribed by the Secretary shall be observed in all public and private
elementary and secondary schools in the Philippines.
2) The school rituals shall consist of solemn and patriotic mass singing of the Philippine National Anthem
and the recitation of prescribed patriotic pledges.
3) The rituals shall be held in school premises as often as may be practicable under the direction of the
respective school authorities.
Section 28. Flag Ceremony. -
1) All educational institutions shall observe a simple and dignified flag ceremony, including the playing
or singing of the Philippine National Anthem.
2) The flag ceremony shall be conducted under the rules and regulations issued by the Secretary.
3) Failure or refusal to observe the flag ceremony in accordance with the rules and regulations issued by
the Secretary shall, after proper notice and hearing, subject the educational institution concerned and
its head to public censure as an administrative punishment, which shall be published at least once in a
newspaper of general circulation.
4) Failure to observe for the second time the said flag ceremony shall, after notice and hearing, be a
ground for the cancellation of the recognition or the permit of the private educational institution
concerned.
5) Any teacher or student or pupil who refuses to join or participate in the flag ceremony may be
dismissed after due investigation .
Section 29. Local School Boards. - In every province, city or municipality, there shall be established a Provincial
School Board, City School Board and Municipal School Board, respectively, whose composition, powers,
functions and duties shall be provided by law.
Title VII
LABOR AND EMPLOYMENT
CHAPTER 1
GENERAL PROVISIONS
Section 1. Declaration of Policy. -
(1) The State shall afford full protection to labor and promote full employment and equality of
employment opportunities for all.
It shall guarantee the rights of all workers to self-organization, collective bargaining negotiations, and
peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled
to security of tenure, humane conditions of work, and a living wage. They shall also participate in policy
and decision-making processes affecting their rights and benefits as may be provided by law.
(2) The State shall promote the principle of shared responsibility between workers and employers and
the preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their
mutual compliance therewith to foster industrial peace.
(3) The State shall regulate the relations between workers and employers, recognizing the right of labor
to its just share in the fruits of production and the right of enterprises to reasonable returns on
investments, and to expansion and growth.
Section 2. Mandate. - The Department shall be the primary policy-making, programming, coordinating and
administrative entity of the Executive Branch of the government in the field of labor and employment. It shall
assume primary responsibility for:
(1) The promotion of gainful employment opportunities and the optimization of the development and
utilization of the country's manpower resources;
(2) The advancement of workers' welfare by providing for just and humane working conditions and
terms of employment;
(3) The maintenance of industrial peace by promoting harmonious, equitable, and stable employment
relations that assure equal protection for the rights of all concerned parties.
Section 3. Powers and Functions. - The Department of Labor and Employment shall:
(1) Enforce social and labor legislation to protect the working class and regulate the relations between
the worker and his employer;
(2) Formulate and recommend policies, plans and programs for manpower development, training,
allocation, and utilization;
(3) Recommend legislation to enhance the material, social and intellectual improvement of the nation's
labor force;
(4) Protect and promote the interest of every citizen desiring to work locally or overseas by securing for
him the most equitable terms and conditions of employment, and by providing social and welfare
services;
(5) Regulate the employment of aliens, including the enforcement of a registration or work permit
system for such aliens, as provided for by law;
(6) Formulate general guidelines concerning wage and income policy;
(7) Recommend necessary adjustments in wage structures with a view to developing a wage system
that is consistent with national economic and social development plans;
(8) Provide for safe, decent, humane and improved working conditions and environment for all workers,
particularly women and young workers;
(9) Maintain a harmonious, equitable and stable labor relations system that is supportive of the national
economic policies and programs;
(10) Uphold the right of workers and employers to organize and promote free collective bargaining as
the foundation of the labor relations system;
(11) Provide and ensure the fair and expeditious settlement and disposition of labor and industrial
disputes through collective bargaining, grievance machinery, conciliation, mediation, voluntary
arbitration, compulsory arbitration as may be provided by law, and other modes that may be voluntarily
agreed upon by the parties concerned; and
(12) Perform such other functions as may be provided by law.
Section 4. Organizational Structure. - The Department shall consist of the Office of the Secretary, and
Undersecretaries and Assistant Secretaries, the Services and Staff Bureaus, and the Regional Offices.
CHAPTER 2
DEPARTMENT PROPER
Section 5. Office of the Secretary. - The Office of the Secretary shall consist of the Secretary and his immediate
staff.
Section 6. Joint RP-US Labor Committee Staff . - There is hereby created in the Office of the Secretary a Joint RP-
US Labor Committee Staff which shall provide technical and other necessary services to the Philippine panel in
the Joint Labor Committee created under the RP-US Base Labor Agreement and for other special projects. The
unit shall be headed by a Head Executive Assistant who shall be assisted by five (5) staff assistants.
Section 7. Undersecretary. - The Secretary shall be assisted by not more than four (4) Undersecretaries who shall
be appointed by the President upon the recommendation of the Secretary. The Secretary is hereby authorized
to delineate and assign the respective functional areas of responsibility of the Undersecretaries.
Section 8. Assistant Secretaries. - The Secretary shall likewise be assisted by not more than four (4) Assistant
Secretaries who shall be appointed by the President upon the recommendation of the Secretary. The Secretary
is hereby authorized to delineate and assign the respective areas of functional responsibility of the Assistant
Secretaries. Within his functional area of responsibility, the Assistant Secretary shall assist the Secretary and
Undersecretaries in the formulation, determination and implementation of laws, policies, plans, programs and
projects on labor and shall oversee the day-to-day administration and supervision of the constituent units of the
Department.
CHAPTER 3
DEPARTMENT SERVICES
Section 9. Planning Service. - The Planning Service shall provide the Department with efficient, effective and
economical services relating to planning, programming, project development and evaluation, and the
development and implementation of a management information system.
Section 10. Administrative Service. - The Administrative Service shall provide the Department with efficient,
effective and economical services relating to records, management, supplies, equipment, collections,
disbursements, building administration and maintenance, security and custodial work.
Section 11. Human Resource Development Service. - The Human Resource Development Service shall provide
the Department with a program and corresponding projects that shall make available training, education and
development opportunities needed to upgrade the levels of competence and productivity of Department
managers and personnel. It shall absorb the powers and functions of the Administrative Service in relation to
the development and administration of personnel programs including selection and placement, development,
performance evaluation, employee relations and welfare.
Section 12. Financial Management Service. - The Financial and Management Service shall be responsible for
providing the Department with efficient, effective and economical services relating to budgetary, financial,
management improvement and internal control matters.
Section 13. Legal Service. - The Legal Service shall provide legal advice and service to Department officers and
employees; prepare informative or clarificatory opinions on labor laws, rules and regulations for uniform
interpretation thereof; answer legal queries from the public; assist the Office of the Solicitor General in suits
involving the Department or its officers or employees or act as their principal counsel in all actions taken in their
official capacity or other causes before judicial or administrative bodies.
Section 14. International Labor Affairs Service. - The International Labor Affairs Service shall be responsible for
monitoring the observance and implementation of all obligations, courtesies, and facilities required by
international labor affairs, particularly the International Labor Organization, the Conference of Asian Pacific
Labor Ministries, the Association of Southeast Asian Nations Labor Ministries Meeting, of which the Philippines is a
member, and related international labor standards and agreements reached in various international labor
forums, treaties, and other multilateral, bilateral or multi-bilateral agreements in the area of labor and
employment; provide staff support and policy guidelines to the Secretary in the supervision, monitoring and
reporting of the activities of the Philippine overseas labor officers assigned in different countries; serve as the
instrumentality of the Department for technical cooperation, programs and activities with other countries and
international institutions.
Section 15. Information and Publication Service. - The Information and Publication Service shall be responsible
for rapport and understanding between the Department and the public through the development of public
relations programs and the dissemination of accurate and updated information on labor and employment, by
means of publications and media coverages of special events and related matters on the Department's
policies, plans, programs, and projects; likewise, it shall be responsible for providing answers to queries from the
public regarding the Department's policies, rules, regulations, programs, activities and services.
CHAPTER 4
BUREAUS
Section 16. Bureau of Labor Relations. - The Bureau of Labor Relations shall set policies, standards, and
procedures on the registration and supervision of legitimate labor union activities including denial, cancellation
and revocation of labor union permits. It shall also set policies, standards, and procedure relating to collective
bargaining agreements, and the examination of financial records of accounts of labor organizations to
determine compliance with relevant laws.
The Bureau shall also provide proper orientation to workers on their schemes and projects for the improvement
of the standards of living of workers and their families.
Section 17. Bureau of Local Employment. - The Bureau of Local Employment shall:
(1) Formulate policies, standards and procedures on productive manpower resources, development,
utilization and allocation.
(2) Establish and administer a machinery for the effective allocation of manpower resources for
maximum employment and placement;
(3) Develop and maintain a responsive vocational guidance and testing system in aid of proper human
resources allocation;
(4) Regulate and supervise private sector participation in the recruitment and placement of workers
locally under such rules and regulations as may be issued by the Secretary;
(5) Establish and maintain a registration or work permit system to regulate employment of aliens;
(6) Develop and maintain a labor market information system in aid of proper manpower and
development planning;
(7) Formulate employment programs designed to benefit disadvantaged groups and communities; and
(8) Perform other functions as may be provided by law.
Section 18. Bureau of Women and Young Workers. - The Bureau of Women and Young Workers shall:
(1) Formulate policies and promulgate orders, rules and regulations implementing the provisions of the
Labor Code affecting working women and minors;
(2) Set standards which shall protect the welfare of the working women and minors, improve their
working conditions, increase their efficiency, secure opportunities for their profitable employment and
find ways for their economic, educational, social and cultural advancement;
(3) Prepare and recommend to the Secretary of Labor and Employment the approval and issuance of
such rules and regulations necessary in the interpretation of all laws relating to the employment of
women and minors;
(4) Undertake studies and submit recommendations on the employment of women and minors in
commercial, industrial and agricultural establishments and other places of labor;
(5) Act as the government's clearinghouse of all information relating to working women and minors;
(6) Undertake development studies on the training needs of women and minors and develop programs
and projects to enhance their productivity and effective participation in community development;
(7) Protect every child employed in the movie, television, radio and entertainment industries against
exploitation, improper influences, hazards and other conditions or circumstances prejudicial to his
physical, mental, emotional, social and moral development.
(8) Undertake projects and in-service training programs for working children to improve their potentials
for employment and their capabilities and physical fitness, increase their efficiency, secure opportunities
for their promotion, prepare them for more responsible positions, and provide for their social,
educational and cultural advancement, in cooperation with labor and management; and
(9) Perform such other functions as may be provided by law.
Section 19. Bureau of Rural Workers. - The Bureau of Rural Workers shall:
(1) Assist rural workers, displaced farmers, and migratory workers in seeking gainful employment;
(2) Conduct studies and draw up programs for re-training of displaced agricultural workers;
(3) Coordinate with regional offices and local government units in preparing a census of rural workers
seeking employment; and
(4) Perform such other functions as may be assigned by the Secretary.
Section 20. Bureau of Working Conditions. - The Bureau of Working Conditions shall:
(1) Develop and prescribe safety standards, measures and devices; promote safety consciousness and
habits among workers; develop and evaluate occupational safety and health programs for workers;
(2) Develop plans, programs, standards and procedures for the enforcement of laws relating to labor
standards, including the operation of boilers, pressure vessels, machinery, internal combustion engines,
elevators, electrical equipment, wiring installations, and the construction, demolition, alteration and use
of commercial and industrial buildings and other workplaces;
(3) Prepare rules and regulations, interpretative bulletins and legal opinions relating to the administration
and enforcement of labor standards; and provide manuals and plan programs for the training of field
personnel;
(4) Provide technical and legal assistance to the Labor Standards Commission; and
(5) Perform such other functions as may be provided by law.
Section 21. Institute for Labor Studies. - The Institute for Labor Studies shall be attached to the Department of
Labor and Employment. For policy and program coordination and administrative supervision, the Institute shall
absorb the research and publication functions of the Institute of Labor and Manpower Studies. The Institute, to
be headed by an Executive Director, assisted by a Deputy Executive Director, shall have the following
functions:
(1) Undertake research and studies in all areas of labor and manpower policy and administration;
(2) Review the rationale of existing legislation and regulations and analyze the costs involved in the
implementation of such legislation against the benefits expected to be derived;
(3) Study and develop innovative and indigenous approaches towards the promotion of harmonious
and productive labor-management and the improvement of workers' welfare services;
(4) Develop and undertake research programs and projects in collaboration with other national
agencies to enhance the Department's capability to participate in national decision and policy
making;
(5) Enter into agreements with international or bilateral agencies for the carrying out of the foregoing
functions;
(6) Expand the scope of its research interests into other countries and regions;
(7) Publish its research studies for dissemination to government as well as to all concerned parties; and
(8) Perform such other functions as may be provided by law.
Section 22. Bureau of Labor and Employment Statistics. - The Bureau of Labor and Employment Statistics shall:
(1) Formulate, develop and implement plans and programs on the labor statistical system in order to
provide the government with timely, accurate and reliable data on labor and employment;
(2) Conduct nationwide surveys and studies which will generate trends and structures on labor and
employment;
(3) Develop and prescribe uniform statistical standards, nomenclatures and methodologies for the
collection, processing, presentation and analysis of labor and employment data;
(4) Establish appropriate mechanisms for the coordination of all statistical activities in the Department
and for collaboration with other government and private agencies including international research
organizations in the conduct of surveys and studies in the area of labor and employment;
(5) Disseminate statistical information and provide statistical services or advice to the users by
establishing a data bank and issuing the Bureau's statistical materials and research findings;
(6) Develop and undertake programs and projects geared toward enhancement of the technical
competence of the Department on theories, techniques and methodologies for the improvement of
the labor statistical system;
(7) Monitor and exercise technical supervision over the statistical units in the Department and its
agencies; and
(8) Perform such other functions as may be provided by law or assigned by the Secretary.
Section 23. National Conciliation and Mediation Board. - The National Conciliation and Mediation Board, shall
absorb the conciliation, mediation and voluntary arbitration functions of the Bureau of Labor Relations. The
Board shall be composed of an Administrator and two (2) Deputy Administrators. It shall be an attached
agency under the administrative supervision of the Secretary of Labor and Employment.
The Administrator and the Deputy Administrators shall be appointed by the President upon recommendation of
the Secretary of Labor and Employment. There shall be as many Conciliators-Mediators as the needs of the
public service require, who shall have at least three (3) years of experience in handling labor relations and who
shall be appointed by the Secretary. The Board shall have its main office in Metropolitan Manila and its
Administrator shall exercise supervision over Conciliators-Mediators and all its personnel. It shall establish as
many branches as there are administrative regions in the country, with as many Conciliators-Mediators as shall
be necessary for its effective operation. Each branch of the Board shall be headed by an Executive
Conciliator-Mediator.
The Board shall have the following functions:
(1) Formulate policies, programs, standards, procedures, manuals of operation and guidelines
pertaining to effective mediation and conciliation of labor disputes;
(2) Perform preventive mediation and conciliation functions;
(3) Coordinate and maintain linkages with other sectors or institutions, and other government authorities
concerned with matters relative to the prevention and settlement of labor disputes;
(4) Formulate policies, plans, programs, standards, procedures, manuals of operation and guidelines
pertaining to the promotion of cooperative and non-adversarial schemes, grievance handling,
voluntary arbitration and other voluntary modes of dispute settlement;
(5) Administer the voluntary arbitration program; maintain or update a list of voluntary arbitrations;
compile arbitration awards and decisions;
(6) Provide counselling and preventive mediation assistance particularly in the administration of
collective agreements;
(7) Monitor and exercise technical supervision over the Board programs being implemented in the
regional offices; and
(8) Perform such other functions as may be provided by law or assigned by the Secretary.
The Tripartite Voluntary Arbitration Advisory Council, which is attached to the National Conciliation and
Mediation Board, shall advise the National and Conciliation and Mediation Board on matters pertaining
to the promotion of voluntary arbitration as the preferred mode of dispute settlement.
The Tripartite Voluntary Arbitration Advisory Council shall consist of the Administrator of the National
Conciliation and Mediation Board as Chairman, one other member from the government, two (2)
members representing labor, and two (2) other members representing management. The members shall
be appointed by the President to serve for a term of three (3) years. The Chairman and Members shall
serve without compensation.
CHAPTER 5
REGIONAL OFFICES
Section 24. Regional Offices, District Offices and Provincial Extension Units. - The Department is hereby
authorized to establish, operate and maintain such Department-wide Regional Offices, District Offices and
Provincial Extension Units in each of the administrative regions of the country, insofar as necessary to promote
economy and efficiency in the delivery of its services. Its Regional Office shall be headed by a Regional
Director who shall have supervision and control thereof. The Regional Director, whenever necessary, shall be
assisted by an Assistant Regional Director. A Regional Office shall have, within its regional areas, the following
functions:
(1) Implement laws, policies, plans, programs, projects, rules and regulations of the Department;
(2) Provide economical, efficient and effective service to the people;
(3) Coordinate with regional offices of other departments and agencies;
(4) Coordinate with local government units; and
(5) Perform such other functions as may be provided by law or assigned by the Secretary.
CHAPTER 6
ATTACHED AGENCIES
Section 25. Attached Agencies. - The following agencies are attached to the Department for policy and
program coordination and administrative supervision:
(1) National Wages Council;
(2) Philippine Overseas Employment Administration;
(3) Employees' Compensation Commission (ECC) which shall include the Executive Director of the ECC
as an ex officio member of the Commission;
(4) The National Manpower and Youth Council;
(5) The National Labor Relations Commission;
(6) Overseas Workers' Welfare Administration;
(7) Maritime Training Council; and
(8) National Maritime Polytechnic.
Title VIII
NATIONAL DEFENSE
Subtitle I
PRELIMINARY PROVISIONS
CHAPTER 1
NATIONAL DEFENSE POLICIES
Section 1. Declaration of Policies. -
(1) The prime duty of the Government is to serve and protect the people. Government may call upon
the people to defend the State and, in fulfillment thereof, all citizens may be required, under conditions
provided by law, to render personal military or civil service.
(2) Civilian authority is, at all times, supreme over the military. The Armed Forces of the Philippines is the
protector of the people and the State. Its goal is to secure the sovereignty of the State and the integrity
of the national territory.
CHAPTER 2
NATIONAL SECURITY COUNCIL
Section 2. Declaration of Policies. -
(1) The formulation of integrated and rationalized national, foreign, military, political, economic, social
and educational policies, programs, and procedures vital to the security of the state.
(2) The national interest requires that an agency exist to formulate and adopt policies, programs, and
procedures on all matters pertaining to or affecting the national security so that judgments and actions
thereon by the President may rest on sound advice and accurate information.
Section 3. Mandate. - The National Security Council shall serve as the lead agency of the government for
coordinating the formulation of policies, relating to or with implications on the national security.
Section 4. Composition. - The National Security Council, hereinafter referred to as Council, shall be composed
of the President as Chairman, the Vice-President, the Secretary of Foreign Affairs, the Executive Secretary, the
Secretary of National Defense, the Secretary of Justice, the Secretary of Labor and Employment, the Secretary
of Local Governments, the National Security Director, the Chief of Staff of the Armed Forces of the Philippines
(AFP), and such other government officials and private individuals as the President may appoint.
Section 5. Powers and Functions. - In addition to such specific duties and responsibilities as the President may
direct, the Council shall:
(1) Advise the President with respect to the integration of domestic, foreign, military, political, economic,
social, and educational policies relating to the national security so as to enable all concerned
departments and agencies of the government to meet more effectively, problems and matters
involving the national security;
(2) Evaluate and analyze all information, events, and incidents in terms of the risks they pose or
implications upon or threats to the overall security and stability of the nation, for the purpose of
recommending to the President appropriate action thereon;
(3) Formulate and coordinate the implementation of policies on matters of common interest to the
various departments, and agencies of the government concerned with the national security, and make
recommendations to the President in connection therewith;
(4) Insure that policies adopted by the Council on national security are effectively and efficiently
implemented; and
(5) Make such recommendations or render such other reports as the President may from time to time
require.
Section 6. Executive Committee. - The Council shall have an Executive Committee composed of the President
as Chairman, and the Vice-President and Secretary of Foreign Affairs, the Executive Secretary, the Secretary of
National Defense, the National Security Director, the Chief of Staff of the Armed Forces of the Philippines and
such other members or advisers as the President may appoint from time to time.
The Executive Committee shall review national security and defense problems and formulate positions or
solutions for consideration by the Council. It shall determine the agenda and order of business of the Council,
and shall ensure that decisions of the Council are clearly communicated to the agencies involved. It shall
advise the President on the implementation of decisions.
To carry out the functions of the Executive Committee, the Chairman shall utilize the facilities and expertise of
any of the government agencies and instrumentalities and shall promulgate rules and regulations to govern the
operations of the Executive Committee.
Section 7. Secretariat. - The Council shall have a permanent Secretariat which shall be under the supervision
and control of the National Security Director. The National Security Director shall be assisted by a Deputy who
like the National Security Director, shall be appointed by, and serve at the pleasure of, the President. The
National Security Director shall attend and participate in meetings of the Cabinet and have the privileges of a
member thereof.
Section 8. Duties of Director. - Among other duties, the National Security Director shall advise the President on
matters pertaining to national security and, whenever directed by the President, see to the implementation of
decisions and policies by the President or the National Security Council which have implications on national
security.
CHAPTER 3
NATIONAL INTELLIGENCE COORDINATING AGENCY
Section 9. Functions. - The National Intelligence Coordinating Agency, hereinafter referred to as the Agency,
shall:
(1) Serve as the focal point for coordination and integration of government activities involving national
intelligence;
(2) Prepare intelligence estimates of local and foreign situations for the formulation of national policies
by the President; and
(3) Provide support and assistance to the National Security Council.
Section 10. The Director-General. - The Agency shall be headed by a Director-General who shall be assisted by
a Deputy Director-General. Both officials shall be appointed by the President and shall hold office at the
pleasure of the President.
Section 11. The Deputy-Director General. - The Deputy Director-General shall assist the Director-General in the
performance of official functions and, in his absence, perform the functions of the Director-General.
Section 12. Organizational Structure. - The organization of the Agency shall consist of the following:
(1) The Office of the Director-General which shall undertake the overall management and operation of
the various components of the agency, provide executive staff support, public relations, legal service,
and internal audit for the Agency;
(2) The Directorate for Operations, headed by the Assistant Director-General for Operations, which shall
be responsible for the collection of information;
(3) The Directorate for Production, headed by the Assistant Director-General for Production, which shall
be responsible for the preparation of intelligence estimates and other reports, and the maintenance of
automated data processing for the Agency;
(4) The Directorate for Administration, headed by the Assistant Director-General for Administration,
which shall be responsible for personnel and training, transportation and communications, supplies and
materials, grounds and building maintenance, security, and other support services;
(5) The Management and Planning Office which shall formulate plans, policies and programs on the
direction, integration and coordination of national intelligence activities and on the operation and
management improvement of the Agency;
(6) The Office of the Comptroller which shall, provide financial management and control for the
Agency; and
(7) As many Field Stations as may be determined by the Director-General which shall undertake
intelligence collection activities and provide reports necessary for the preparation of assessments and
estimates.
The organization and staffing pattern of the Agency shall be recommended by the Director-General for
approval of the President.
Section 13. Administrative Supervision By the National Security Council. - The Agency shall be under the
administrative supervision of, and give support services to, the National Security Council; however, the agency
may report directly to the President, as the President may require.
Section 14. National Intelligence Board. -
(1) The National Intelligence Board shall serve as an advisory body to the Director of the Agency, on
matters pertaining to the integration and coordination of intelligence activities, and shall make
recommendations on such matters as the Director may from time to time submit to it for consideration.
(2) The members of the National Intelligence Board shall be appointed by the President. The National
Security Director may sit in all meetings of the Board.
Subtitle II
DEPARTMENT OF NATIONAL DEFENSE
CHAPTER 1
GENERAL PROVISIONS
Section 15. Declaration of Policy. - The defense establishment shall be maintained to maximize its effectiveness
for guarding against external and internal threats to national peace and security and provide support for social
and economic development.
Section 16. General Military Council. - The General Military Council shall advise and assist the Secretary in the
formulation of military policies and shall consider and report on such other matters as the Secretary may direct.
The Council shall be composed of the Secretary as Chairman; and the Undersecretary of National Defense, the
Chief of Staff, the Vice-chief of Staff, the Assistant Chief of Staff of the Armed Forces of the Philippines, and the
Commanders of the Major Services, as members. The Deputy Chief of Staff of the Armed Forces of the
Philippines shall be the Secretary of the Council.
Section 17. Prohibition on Detail of AFP Personnel. - No member of the armed forces in the active service shall,
at any time, be appointed or designated in any capacity to a civilian position in the Government including
government-owned or controlled corporations or any of their subsidiaries.
Section 18. Organizational Structure. - The Department shall be composed of the Secretary, the Undersecretary
and Assistant Secretaries and their immediate staffs as determined by them respectively, and such other bodies
as are provided by law.
The Government Arsenal, Office of Civil Defense, Philippine Veterans Affairs Office, Armed Forces of the
Philippines, National Defense College of the Philippines and the Integrated National Police shall be under the
supervision and control of the Department, except as may be provided by special laws.
CHAPTER 2
DEPARTMENT PROPER
Section 19. Office of the Secretary. - The Office of the Secretary shall consist of the Secretary and his immediate
staff as determined by him.
Section 20. Office of the Undersecretary. - The functions of the Undersecretary shall be as follows:
(1) Advise and assist the Secretary in the formulation and implementation of Department's objectives
and policies;
(2) Oversee all the operational activities of the Department for which he shall be responsible to the
Secretary;
(3) Coordinate the programs and projects of the Department, and be responsible for its economical,
efficient, and effective administration;
(4) Serve as deputy to the Secretary, in all matters relating to the operations of the Department; and
(5) Perform such other functions as may be provided by law.
When the Secretary is unable to perform his duties owing to illness, absence, or other cause, as in case of
vacancy in the Office, the Undersecretary shall temporarily perform the functions of said Office.
Section 21. Executive Staff . - The Executive Staff shall be composed of the Staff for Plans and Programs, Staff for
Installation and Logistics, Staff for Public Affairs, Staff for Strategic Assessment, Staff for Comptrollership, Staff for
Personnel, and the Legal Service.
Section 22. The Service Staff . - The Service Staff shall be composed of the Administrative Services Office, and
Information Management Office.
Section 23. Personal Staff . - There shall be a Personal Staff as may be determined by the Secretary.
CHAPTER 3
GOVERNMENT ARSENAL
Section 24. Organization. - The Government Arsenal shall be headed by a Director who shall be assisted by one
or more Assistant Directors. It shall have staff and operating units provided by law.
Section 25. Qualification. - The Director and Assistant Directors shall have the expertise, training or experience in
the field of munitions.
Section 26. Functions. - (1) The Arsenal shall:
(1) Establish, operate, and maintain government arsenal;
(2) Formulate plans and programs to achieve self-sufficiency in arms, mortars and other weapons and
munitions;
(3) Design, develop, manufacture, procure, stockpile, and allocate arms, mortars and other weapons
and munitions without the necessity of obtaining any permits or licenses, and devise ways and means
for the efficient mobilization of civilian industry to augment the production of the Arsenal in times of
emergency; and
(4) Perform such other functions as may be provided by law.
CHAPTER 4
OFFICE OF CIVIL DEFENSE
Section 27. Organization. - The Office of Civil Defense shall be headed by an Administrator who shall be assisted
by a Deputy Administrator. The Office shall have staff and operating units as may be provided by law.
Section 28. Functions. - The Office shall:
(1) In times of war and other national emergencies of equally grave character, coordinate the activities
and functions of various government agencies and instrumentalities, as well as of private institutions and
civic organization devoted to public welfare to maximize the utilization of the facilities and resources of
the entire nation for the protection and preservation of the civilian population and property;
(2) Establish and administer a comprehensive national civil defense and assistance program to include
the estimation of the total material, manpower fiscal requirements for carrying out the said program
and coordinate the allocation to local government units such aid in facilities, materials and funds as
may be made available by the national government;
(3) Furnish guidance and coordinate the activities of the national government, local governments,
private institutions and civic organization for civil preparedness;
(4) Develop and coordinate a program for informing, educating and training the public on civil defense
measures and activities; and
(5) Perform such other functions as may be provided by law.
Section 29. Operating Services. - The Administrator shall, subject to the approval of the Secretary of National
Defense, prescribe the organization, functions, duties and responsibilities of civil defense units on the national
and local government levels, in connection with the various operating units for civil defense. Civil defense
operating units shall be established for the national and local government defense organizations. The local
units shall operate under the supervision and control of the respective heads of the local government civil
defense organizations to which they appertain.
Section 30. Basic, Technical and Administrative Services. -
(1) The basic services of the AFP shall be composed of the Major Services. Enlisted personnel of the
standing force and the reserve force must belong to one of the basic services.
(2) The technical services of the AFP shall be composed of the Medical Corps, Dental Service, Nurse
Corps, Veterinary Corps and the Judge Advocate General Service.
(3) The administrative services shall consist of the Chaplain Service, Women Auxiliary Corps, Medical
Administrative Corps and the Corps of Professors.
(4) Appropriate military occupational specialties may be prescribed by the Chief of Staff for each of the
basic, technical and administrative services.
(5) Appointment of officers to the basic, technical and administrative services, and enlistment in the
basic service shall be governed by rules and regulations prescribed by the Secretary of National
Defense.
CHAPTER 5
PHILIPPINE VETERANS AFFAIRS OFFICE
Section 31. Organization. - The Philippine Veterans Affairs Office shall be headed by an Administrator who may
be assisted by one Deputy Administrator. It shall have staff and operating units provided by law.
Section 32. Functions. - The Office shall:
(1) Formulate and promulgate, subject to the approval of the Secretary of National Defense, policies,
rules and regulations governing the adjudication and administration of veterans claims and benefit;
(2) Adjudicate and administer benefits, pensions and other privileges granted to veterans, their heirs
and beneficiaries;
(3) Provide medical care and treatment to veterans pursuant to existing law;
(4) Administer, develop, and maintain military shrines;
(5) Formulate policies concerning the affairs, placement and training of ex-servicemen, and assist their
widows and dependents, and other retired military personnel; and
(6) Perform such other functions as may be provided by law.
CHAPTER 6
ARMED FORCES OF THE PHILIPPINES
Section 33. Functions. - The Armed Forces of the Philippines (AFP) shall:
(1) Uphold the sovereignty, support the Constitution, and defend the territory of the Republic of the
Philippines against all enemies, foreign and domestic;
(2) Promote and advance the national aims, goals, interests and policies;
(3) Plan, organize, maintain, develop and deploy its regular and citizen reserve forces for national
security; and
(4) Perform such other functions as may be provided by law or assigned by higher authorities.
Section 34. Composition. -
(1) The AFP shall be composed of a citizen armed force which shall undergo military training and serve,
as may be provided by law. It shall be organized and maintained in a manner that shall render it
capable of rapid expansion from a peacetime organization to a wartime or emergency organization.
The AFP shall keep a regular force necessary for the security of the State. The officers and men of the
regular force shall be recruited proportionately from all provinces and cities as far as practicable.
(2) The Standing Force shall be composed of regular officers and enlisted personnel; reservists called to
active duty; draftees; trainees and government-sponsored Filipino cadets enrolled in local or foreign
military schools. In time of peace, the size and composition of the Standing Force shall be prescribed by
the Secretary of National Defense, upon recommendation of the Chief of Staff.
(3) The Citizen Armed Force shall be composed of all reservists, and officers and enlisted men on
inactive status. All Able-bodied citizens shall undergo military training, after which they shall become
reservists with appropriate ranks. All reservists in a particular locality shall be organized into reserve
geographical units subject to call and mobilization as the need arises, individually or as a unit. The
Secretary of National Defense shall prescribe and implement a continuing program of recruitment and
training for the Citizen Armed Force to enable it to respond to all types of threats to national security.
Section 35. Organizational Structure. - The AFP shall consist of the General Headquarters; the Major Services
namely: the Philippine Army, the Philippine Air Force, the Philippine Navy and, until otherwise provided by law,
the Philippine Constabulary; and other existing units, services and commands of the AFP. The Secretary of
National Defense may, in accordance with the policies or directives of the President, create additional units,
services and commands, or reorganize the AFP in response to any situation or in pursuance of operational or
contingency plans. No Major Service may be unfilled, inactivated or merged with another Service, without the
approval of the Congress.
Section 36. Basic, Technical and Administrative Service. -
(1) The basic services of the AFP shall be composed of the major services. Enlisted personnel of the
standing force and the reserve force must belong to one of basic services.
(2) The technical services of the AFP shall be composed of Medical Corps, Dental Service, Nurse Corps,
Veterinary Corps and the Judge Advocate General Service.
(3) The administrative service shall consist of the Chaplain Service, Women Auxiliary Corps, Medical
Administrative Corps and the Corps of Professors.
(4) Appropriate military occupational specialties may be prescribed by the Chief of Staff for each of the
basic, technical and administrative services.
(5) Appointment of officers to the basic, technical and administrative by rules and regulations
prescribed by the Secretary of National Defense.
Section 37. The Citizen Armed Forced. -
(1) The Secretary of National Defense shall cause the organization of the Citizen Armed Force into
Geographical Units throughout the country. The Citizen Armed Force Geographical Units shall consist of
cadre of officers and men in the Standing Force and all qualified reservists residing in a particular
locality. The cadre may, however, be assigned to another unit in the active force while the
Geographical Units to which they are assigned are on inactive status.
(2) Whenever dictated by military necessity, and upon the recommendation of the Secretary of
National Defense and approved by the President, the Citizen Armed Force may be called or mobilized
to complement the operations of the regular force of the AFP or to support the regular force formations
or units. For this purpose, Active Auxiliary Units which shall be part of the Citizen Armed Force
Geographical Units, may be utilized, to be constituted out of volunteers to be screened in consultations
with the local executives and civic business leaders. The status of Active Auxiliary Units shall be of a
degree of activation of military reservists short of full active duty status. They shall not be vested with law-
enforcement or police functions.
(3) All members of the Citizen Armed Force on training or service shall be subject to military law and the
Articles of War.
Section 38. Tactical and Territorial Organization. - Unless otherwise prescribed by law, the major services and
other units of the AFP may be organized into such commands, forces and organizations as may be prescribed
by the Secretary of National Defense. For this purpose, the territory of the Philippines may be divided into such
tactical and geographical areas and zones or regions and districts as the Secretary of National Defense may
direct.
Section 39. Organizational Principles. - The organizational structure of the AFP shall provide for:
(1) Centralized direction and control of General Headquarters to insure unity and coordination of efforts
throughout the military establishment;
(2) Decentralized execution of operations to the Major Services and other separate units to achieve
maximum operational efficiency within the military establishment;
(3) Common doctrine, standardized procedures and techniques throughout the military establishment
to assure common understanding among all its forces and elements, facilitating thereby the attainment
of maximum operational efficiency and effectiveness;
(4) Development of self-reliance concepts for each Major Service to insure national defense and
security and maximum utilization of resources; and
(5) Development of the capability to participate in the infrastructure projects of the government.
CHAPTER 7
GENERAL HEADQUARTERS
Section 40. Functions. - The General Headquarters, AFP, shall:
(1) Serve as military advisor and staff to the Secretary of National Defense;
(2) Prepare strategic plans and provide for the strategic direction of the AFP, including the direction of
operations of unified or specified commands;
(3) Prepare integrated logistic responsibilities in accordance with those plans;
(4) Prepare integrated plans for military mobilization;
(5) Provide adequate, timely and reliable joint intelligence for use within the Department;
(6) Review major personnel, material and logistic requirements of the AFP in relation to strategic and
logistic plans;
(7) Review plans and programs of the Major Services and separate units to determine their adequacy,
feasibility and suitability for the performance of their respective detailed plans;
(8) Participate in the preparation of combined plans or military action in conjunction with the armed
forces of other nations;
(9) Recommend to the Secretary of National Defense the establishment and force structure of unified or
specified commands;
(10) Determine the headquarters support, such as facilities, personnel and communications required by
unified or specified commands, and assign the responsibility of providing that support to appropriate
Major Services;
(11) Prepare and submit to the Secretary of National Defense for his consideration in the preparation of
budgets and statements of military requirements based upon strategic war plans, tasks, priority of tasks,
force requirements, and general strategic guidance for the development of military force;
(12) Advise and assist the Secretary of National Defense on research and engineering matters by
submitting periodic reports on board strategic guidance, overall military requirements, and relative
military importance of development activities to meet the needs of the AFP;
(13) Prepare and submit to the secretary of National Defense recommendations to appropriate
agencies concerning general strategic guidance for the development of industrial mobilization
programs;
(14) Formulate policies and guidelines on the organization of the Major Services and other elements of
the military establishment, the training of military forces, the employment of forces in the prosecution of
tasks required by law, and the employment of forces to assist government agencies in the
implementation of laws and regulations when so directed by higher authorities; and
(15) Perform such other functions as may be provided by law or assigned by higher authorities.
Section 41. Composition. - The General Headquarters shall be the command and control element of the AFP. It
shall be composed of the Office of the Chief of Staff, Office of the Vice-Chief of Staff, the AFP General Staff,
and other staff offices and units necessary for effective command and control of the AFP.
Section 42. The Chief of Staff . -
(1) The Chief of Staff, under the authority and direction of the President and the Secretary of National
Defense shall be responsible for the development and execution of the national defense programs and
armed forces mission; and prescribe, in accordance with policies of the Secretary of National Defense,
the organization, powers, functions and duties of the various staff, services, installations and other units
of the AFP.
(2) The President shall nominate and with the consent of the Commission on Appointments, appoint the
Chief of Staff from among the general and flag officers of the basic services. He shall hold the grade of
general (Four-Star) and shall if eligible be retired in such a grade, upon relief from his assignment.
(3) The tour of duty of the Chief of Staff shall not exceed three (3) years. However, in times of war or
other national emergency declared by the Congress, the President may extend such tour of duty.
Section 43. Vice-Chief of Staff . - The Vice-Chief of Staff shall be the principal assistant of the Chief of Staff and
shall perform the functions of the Chief of Staff during the latter's absence or disability. He shall be appointed in
the same manner as the Chief of Staff and shall hold the grade of Lieutenant General (Three-Star). He shall be
retired in that grade if eligible for retirement after his relief from his assignment, unless appointed as Chief of
Staff.
Section 44. The AFP General Staff . - The AFP General Staff shall advise and assist the Chief of Staff in the
performance of his functions and in the accomplishment of the tasks of the General Headquarters. It shall be
headed by the Deputy Chief of Staff, who shall be appointed by the Chief of Staff. The AFP General Staff shall
be a joint staff. The various General Staff Offices shall each be headed by a Deputy Chief of Staff whose
appointment and tenure shall be determined by the Chief of Staff. The organization, functions and duties of the
General Staff shall be prescribed by the Chief of Staff.
Section 45. Authority to Reorganize the General Headquarters. -
(1) The Secretary of National Defense, upon recommendation of the Chief of Staff in the interest of
efficiency and economy, may:
(a) Establish and organize staffs, offices and units in the General Headquarters in addition to the
Armed Forces General Staff, and prescribe the titles, functions and duties of their members;
(b) Abolish existing staffs, offices and units in the General Headquarters not specifically provided
in this Chapter or by any other provision of law, or transfer or consolidate their functions and
duties with other staffs, offices or units; and
(c) Abolish the position of any Deputy Chief of Staff or any general staff office and transfer or
consolidate its functions and duties with those of another Deputy Chief of Staff or General Staff
Office
(2) If the President does not prescribe otherwise, the organization, functions, and duties of various staffs,
offices and units in the General Headquarters shall continue as provided under existing laws and
regulations not in conflict with provisions of this Chapter.
CHAPTER 8
MAJOR SERVICES
Section 46. Organization.- The Major Services shall be organized by the Chief of Staff in accordance with the
policies laid down by the Secretary of National Defense. The commanders of the Major Services shall hold such
grade as provided by law, and shall be appointed by the President upon the recommendation of the
Secretary of National Defense.
Section 47. General Provisions. - The Secretary of National Defense, upon recommendation of the Chief of Staff,
AFP, shall assign to the Major Services specific functions in support of the overall responsibilities of the AFP and
the Department.
Section 48. The Philippine Army. - The Philippine Army shall be responsible for the conduct of operations on land,
in coordination with the other Major Services. It shall be organized as prescribed by the Secretary of National
Defense, upon recommendation of the Chief of Staff.
Section 49. Functions. - The Philippine Army shall:
(1) Organize, train and equip forces for the conduct of prompt and sustained operations on land;
(2) Prepare such units as may be necessary for the effective prosecution of the national defense plans
and programs and armed forces missions, including the expansion of the peacetime army component
to meet any emergency;
(3) Develop, in coordination with the other Major Services, tactics, techniques and equipment of interest
to the army for field operations;
(4) Organize, train and equip all army reserve units; and
(5) Perform such other functions as may be provided by law or assigned by higher authorities.
Section 50. The Philippine Air Force. - The Philippine Air Force shall be responsible for the air defense of the
Philippines. It shall be organized as prescribed by the Secretary of National Defense, upon recommendation of
the Chief of Staff.
Section 51. Functions. - The Philippine Air Force shall:
(1) Organize, train, and equip forces for prompt and sustained air operations for the defense of the
Philippines;
(2) Organize, train, and equip for airlift, airborne and tactical air operations unilaterally or in
coordination with surface forces;
(3) Formulate and develop doctrines, concepts, systems, policies, procedures, strategies, tactics and
techniques for operations peculiar to the Air Force;
(4) Organize, train, and equip all air force reserve units; and
(5) Perform such other functions as may be provided by law or assigned by higher authorities.
Section 52. The Philippine Navy. - The Philippine Navy shall be responsible for the naval defense of the
Philippines. It shall be organized as prescribed by the Secretary of National Defense, upon recommendation of
the Chief of Staff.
Section 53. Functions. - The Philippine Navy shall:
(1) Organize, train and equip forces for prompt and sustained naval operations;
(2) Prepare the necessary naval units for the effective enforcement of all applicable laws upon the
Philippine seas and waters, the prosecution of national defense plans and programs and armed forces
missions, including the expansion of a peacetime navy component to meet any emergency;
(3) Formulate and develop doctrines, concepts, systems, policies, procedures, strategies, tactics and
techniques for operations peculiar to the Navy;
(4) Enforce laws and regulations pertaining to navigation safety of life at sea, immigration, customs
revenues, narcotics, quarantine, fishing and neutrality of the territory contiguous waters of the
Philippines;
(5) Organize, train and equip all naval reserve units; and
(6) Perform such other functions as may be provided by law of assigned by higher authorities.
Section 54. The Philippine Coast Guard. - The Philippine Coast Guard shall remain as a major subordinate unit of
the Philippine Navy and assigned functions pertaining to safety of life at sea as vested in it by law.
Section 55. The Philippine Constabulary. - Unless otherwise provided by law, the Philippine Constabulary, as the
national police force, shall be primarily responsible for the preservation of peace and order and the
enforcement of laws throughout the Philippines. It shall be organized, trained and equipped primarily as a law
enforcement agency. It shall be organized as prescribed by the Secretary of National Defense upon
recommendation of the Chief of Staff.
Section 56. Functions. -
(1) The Philippine Constabulary shall:
(a) Prevent and suppress lawless violence, rebellion, insurrection, riots, brigandage, breaches of
the peace and other disturbances, and see to it that perpetrators of those offenses are brought
to justice;
(b) Organize, retain, equip and prepare its forces for effective law enforcement operations and
police duties;
(c) Organize, train and equip constabulary draftees, reservists and reserve units;
(d) Develop tactics, techniques, organization, weapons, equipment and supplies essential to the
accomplishment of its missions; and
(e) Perform such other functions as may be provided by law or assigned by higher authorities.
(2) In times of war or national emergency, the Philippine Constabulary or any of its subordinate units
may be employed jointly with, or in support of the operations of, the other Major Services, as the
President may direct.
Section 57. Authority of Constabulary Officers and Enlisted Personnel. -
(1) Commissioned officers and enlisted personnel of the Philippine Constabulary, as peace officers, shall
execute lawful warrants and orders of arrest issued against any person for any violation of law.
(2) The Philippine Constabulary shall have police jurisdiction throughout the Philippines.
(3) When the constabulary forces in any area are unable to cope effectively with violations of law, the
Secretary of National Defense in accordance with the policies or directives of the President, may assign
or detail commissioned officers and enlisted personnel of the Army, Air Force, or Navy, to the Philippine
Constabulary or any of its subordinate units. The officers and enlisted personnel so assigned or detailed
shall have the authority and duties of peace officers and shall be governed by the provisions of this
section for the duration of their assignment or detail.
CHAPTER 9
PHILIPPINE MILITARY ACADEMY
Section 58. Organization. -
(1) The Philippine Military Academy is the primary training and educational institution of the AFP. It shall
be the primary sources of regular officers of the Standing Force.
(2) The Academy shall be organized as prescribed by the Secretary of National Defense, upon
recommendation of the Chief of Staff, AFP.
(3) The student body of the Academy shall be known as the Cadet Corps of the Armed Forces of the
Philippines (CC-AFP) and shall have such strength as the Secretary of National Defense shall determine
upon the recommendation of the Chief of Staff, and within the strength limited by the annual
Appropriation Act.
(4) There shall be an Academic Board organized by the Chief of Staff, which shall be composed of not
more than fifteen (15) members selected from the officers of the Academy upon recommendation of
the Superintendent. The Board shall, in accordance with the rules and regulations prescribed by the
Chief of Staff, have the power to confer baccalaureate degrees upon the cadets who satisfactorily
complete the approved course of study.
Section 59. Functions. - The Academy shall prepare the candidates for commission in the regular force of the
AFP and shall instruct, train and develop cadets so that each graduate shall possess the characters, the broad
and basic military skills and the education essential to the successful pursuit of a progressive military career.
CHAPTER 10
NATIONAL DEFENSE COLLEGE OF THE PHILIPPINES
Section 60. Organization and Administration. -
(1) The National Defense College of the Philippines, hereafter referred to as the College, shall be under
the direction, supervision and control of the Secretary of National Defense.
(2) The College shall be headed by a President who shall administer the affairs of the College with the
assistance of an Executive Vice-President, a Vice-President for Academic Affairs, a Vice-President for
Administrative Affairs and a Vice-President for Research and Special Studies. The Executive Vice-
President shall act for the President in his absence and shall perform such other functions as may be
assigned to him by the President.
(3) The Vice-President for Academic Affairs shall be responsible for the development, implementation,
supervision and evaluation of academic programs; the Vice-President for Administrative Affairs, for the
overall administrative support to all the activities of the College; and the Vice-President for Research
and Special Studies, on the conduct of research work and special studies.
(4) The College shall have an Academic Board to assist the President discharge the following functions:
(a) Supervise the academic affairs of the College;
(b) Recommend academic consultants, professors, lecturers, instructors, research assistants and
other resource persons of the College; and
(c) Recommend the courses of studies to be conducted by the College to accomplish its
objectives.
The Board shall be composed of the Vice-President for Academic Affairs as Chairman, and the Heads
of the various academic disciplines as members, who shall be designated by the President subject to
the approval of the Secretary of National Defense.
(5) All resource persons of the College including but not limited to academic consultants, professors,
lecturers, instructor, thesis advisers, members of examining and evaluating panels, examiners, correctors,
and technicians who are regularly employed in the Government shall, in addition to their salaries, be
entitled to receive honoraria, fees and other emoluments fixed by the Secretary of National Defense.
Section 61. Powers and Functions. -
(1) The College shall train and develop the skills and competence of potential national defense leaders,
civilian officials of the different agencies and instrumentalities of the Government, and selected
executives from the private sector in the formulation and implementation of national security policies,
and for high command and staff duty.
(2) The College shall have the power to confer the degree of Master in National Security Administration
(MNSA) upon all its students who have satisfactorily completed the prescribed course of study.
Section 62. Graduates of the Regular Course of the College. -
(1) Graduates of the College will receive for purposes of promotion to key and sensitive positions in the
military and civilian offices, preferential consideration and/or credit points in the grade or class of their
respective positions.
(2) All civilian graduates who are holders of the degree of Master in National Security Administration
shall qualify for appointment to the initial rank of Lieutenant Colonel in the reserve force of the Armed
Forces of the Philippines.
(3) Authority to use with honor the abbreviation MNSA after their names is hereby given to all graduates
of the regular course of the College.
CHAPTER 11
INTEGRATED NATIONAL POLICE
Section 63. Composition. - Unless otherwise provided by law, the Integrated National Police shall be composed
of the Philippine Constabulary as the nucleus and the Integrated Police Force, Fire Services and Jail
Management Services as components, under the Department of National Defense.
Section 64. Organizational Structures. - The Chief of Constabulary shall prescribe, subject to the approval of the
Secretary of National Defense, the table of organization and equipment, ranks, and position titles, functions,
duties and powers of the various staffs, services, installations and other units of the Integrated National Police.
The different headquarters of the Philippine Constabulary in the national, zone or regional and provincial levels
shall be the nuclei of the corresponding headquarters of the Integrated National Police. The appropriate
offices in the different headquarters levels may be jointly staffed by the constabulary, police, jail and fire
service officers and personnel so that an integrated police and public safety services would be effectively
discharged.
Section 65. Head of the Integrated National Police. - The Chief of Constabulary to be known as Director-
General shall be the head of the Integrated National Police. He shall have command of all elements thereof.
He may issue from time to time instructions regarding personnel, funds, records, property, correspondence and
such other matters to carry out the provisions of this Chapter. As Director-General, the Chief of Constabulary
shall be assisted by the Deputy Chiefs of Constabulary, the general staff and the special, administrative and
technical staffs of the Philippine Constabulary.
Section 66. Functions. - The Integrated National Police shall:
(1) Enforce law and maintain peace and order;
(2) Insure public safety;
(3) Prevent and control fires;
(4) Administer city and municipal jails; and
(5) Perform such other functions provided by law or assigned by higher authorities.
Section 67. Authority of the President Over the Integrated National Police. - In the exercise of its power to
maintain peace, law, order, and public safety, the Integrated National Police shall be subject to the command
and supervision and control of the President and shall function directly under the Secretary of National
Defense.
CHAPTER 12
ATTACHED AGENCIES
Section 68. Attached Agencies. - Agencies which are attached to the Department shall operate in
accordance with their respective organizational structures and perform the functions and duties assigned to
them by law, subject to the requirements of economy, efficiency, and effectiveness.
Subtitle III
THE NATIONAL POLICE COMMISSION
Section 69. Declaration of Policy. -
(1) The State shall establish and maintain one police force which shall be national in scope and civilian
in character, to be administered and controlled by a national police commission and shall provide, by
law, the authority of local executives over the police units in their jurisdiction.
(2) The maintenance of peace and order, the protection of life, liberty, and property, and the
promotion of the general welfare are essential for the enjoyment by all the people of the blessings of
democracy.
Section 70. The National Police Commission. - Unless otherwise provided by law, the National Police Commission
shall be under the control and supervision of the Office of the President and shall continue to operate in
accordance with its present organizational structure and perform the functions and duties assigned to it by law.
Section 71. Powers and Functions. - As provided by law, the Commission shall exercise the following functions:
(1) Investigate, decide, and review administrative cases against members of the Integrated National
Police;
(2) Adjudicate death and permanent disability benefit claims of members of the Integrated National
Police;
(3) Administer appropriate examinations for the police, fire and jail services;
(4) Attest appointments of members of the Integrated National Police;
(5) Inspect and audit the performance of the Integrated National Police;
(6) Prepare a National Crime Prevention Program and coordinate its implementation upon approval by
the President; and
(7) Perform other duties provided by law or assigned by higher authorities.
Title IX
HEALTH
CHAPTER 1
GENERAL PROVISIONS
Section 1. Declaration of Policy. - The State shall protect and promote the right to health of the people and
instill health consciousness among them; adopt an integrated and comprehensive approach to health
development, with priority for the underprivileged sick, elderly, disabled, women and children; endeavor to
make essential goods, health and other social services available to all the people at affordable cost; establish
and maintain an effective food and drug regulatory system; and undertake appropriate health manpower
development and research, responsive to the country's health needs and problems.
Section 2. Mandate. - The Department shall be primarily responsible for the formulation, planning,
implementation, and coordination of policies and programs in the field of health. The primary function of the
Department is the promotion, protection, preservation or restoration of the health of the people through the
provision and delivery of health services and through the regulation and encouragement of providers of health
goods and services.
Section 3. Powers and Functions. - The Department shall:
(1) Define the national health policy and formulate and implement a national health plan within the
framework of the government's general policies and plans, and present proposals to appropriate
authorities on national issues which have health implications;
(2) Provide for health programs, services, facilities and other requirements as may be needed, subject to
availability of funds and administrative rules and regulations;
(3) Coordinate or collaborate with, and assist local communities, agencies and interested groups
including international organizations in activities related to health;
(4) Administer all laws, rules and regulations in the field of health, including quarantine laws and food
and drug safety laws;
(5) Collect, analyze and disseminate statistical and other relevant information on the country's health
situation, and require the reporting of such information from appropriate sources;
(6) Propagate health information and educate the population on important health, medical and
environmental matters which have health implications;
(7) Undertake health and medical research and conduct training in support of its priorities, programs
and activities;
(8) Regulate the operation of and issue licenses and permits to government and private hospitals, clinics
and dispensaries, laboratories, blood banks, drugstores and such other establishments which by the
nature of their functions are required to be regulated by the Department;
(9) Issue orders and regulations concerning the implementation of established health policies; and
(10) Perform such other functions as may be provided by law.
Section 4. Organizational Structure. - The Department shall consist of the Department Proper, National Health
Facilities, Regional Offices, Provincial Health Offices, District Health Offices and Local Health Agencies.
CHAPTER 2
DEPARTMENT PROPER
Section 5. Department Proper. - The Department Proper shall be composed of the Office of the Secretary, the
Office for Management Services, the Office for Public Health Services, the Office for Hospital and Facilities
Services, the Office for Standards and Regulations, and the Executive Committee for National Field Operations.
Section 6. Office of the Secretary. - The Office of the Secretary shall be composed of the Secretary of Health
and his immediate staff; the undersecretary acting as Chief of Staff in the Office of the Secretary; the Assistant
Secretary for Legal Affairs; the Assistant Secretary for Financial, Operations and Front Line Services Audit; and
the Staff Services for the Secretary.
Section 7. Duties of the Undersecretary Acting as Chief of Staff . - The Undersecretary acting as Chief of Staff in
the Office of the secretary, shall supervise the Assistant Secretary for Legal Affairs, the Assistant Secretary for
Financial Operations, and Front Line Services Audit, and the Staff Support Services to the Secretary; and head
the secretariat of the Executive Committee for National Field Operations.
Section 8. Duties of the Assistant Secretary for Legal Affairs. - The Assistant Secretary for Legal Affairs shall head
the office that shall provide the Secretary with legal advice on all policy, program and operational matters of
the Department; act as Counsel for the Department in cases in which it is a party; handle administrative cases
against Department personnel and submit recommendations pertaining thereto; and review legislative
proposals.
Section 9. Duties of the Assistant Secretary for Financial Operation. - The Assistant Secretary for Financial
Operations, and Front Line Services Audit shall head the office that shall monitor the Department's financial
affairs, internal operations, and the delivery of frontline services with a view to assuring the integrity of the
Department's financial operations and the requirements of the Commission on Audit; optimizing the internal
operating efficiency of the Department and its field offices; and ensuring that the Department's constituencies
are provided front line services from the Department with the adequacy, quality, and efficiency that they are
entitled to.
Section 10. The Staff Support Services. - The following Staff Support Services shall undertake such staff services
intended to assist the Secretary in performing his functions;
(1) Community Health Service which shall provide services related to formulating and implementing
plans and programs for coordinating with local governments and non-government organizations in
health related activities, programs and projects;
(2) Public Information and Health Education Service which shall provide services related to formulating
and implementing plans, programs, and projects for public education on health and for the timely and
accurate public communication of Department policy on health issues;
(3) Health Intelligence Service which shall provide services related to the formulation of disease
intelligence, assessment of the state of health of the country and development and maintenance of
effective and comprehensive health information system to support planning and implementation of
health programs;
(4) Internal Planning Service which shall provide the Department with necessary services related to
planning, programming and project development;
(5) Foreign Assistance Coordination Service which shall provide staff services related to the
development, coordination, monitoring, reporting and assessment of foreign assisted projects of the
Department.
Section 11. Undersecretaries. - The Secretary shall be assisted by five (5) Undersecretaries who shall exercise the
following functions;
(1) Advise the Secretary in the promulgation of Department orders, administrative orders and other
issuances;
(2) Exercise supervision and control over the offices, services, operating units and individuals under their
authority and responsibility;
(3) Recommend the promulgation of rules and regulations, consistent with Department policies, that will
effectively implement the activities of operating units under their authority and responsibility;
(4) Coordinate the functions and activities of the units under their authority with that of the
Undersecretaries and regional health directors;
(5) Exercise delegated authority on substantive and administrative matters related to the functions and
activities of agencies under their office to the extent granted by the Secretary through administrative
issuances;
(6) Perform such other functions as may be provided by law or appropriately assigned by the Secretary.
CHAPTER 3
DEPARTMENT SERVICES
Section 12. Office for Management Services. - The Office for Management Services, headed by an
Undersecretary who shall be supported by an Assistant Secretary, shall include six (6) staff services involved in
providing support services to the Department Proper, field offices and attached agencies, which are as follows:
(1) Financial Services which shall provide the Department with staff advice and assistance on
accounting, budget and financial matters; supervise the coordinated preparation and implementation
of annual and long term financial and work plan and budget estimates; conduct periodic department-
wide performance and financial reviews; and design and implement improvements in financial
management systems, procedures and practices;
(2) Management Advisory Service which shall provide staff advice and assistance on internal control
and management system improvement, including management information systems; supervise the
establishment of a management accounting system, control procedures and management information
systems for improved decision-making;
(3) Health Manpower Development and Training Service which shall formulate plans, policies, standards
and techniques for the effective and efficient manpower development and training of Department
personnel; provide consultative, training and advisory services to implementing agencies; conduct
studies and research related to health manpower development and training; and develop plans and
programs for improved recruitment, deployment, development, and maintenance of personnel;
(4) Procurement and Logistics Service which shall undertake the central procurement of the health care
products and supplies needed by the Department and its field offices which are not produced by or
beyond the production capacity of its in-house production facilities; and ensure the proper, adequate
and timely flow of health products and services to the Department's field offices;
(5) Biological Production Services which shall formulate plans, policies, programs, standards and
techniques for the processing, manufacture, standardization, and improvement of biological products
for Department use; manufacture vaccines, sera, anti-iodins, and other biologicals; provide consultative
training and advisory services to implementing agencies; and conduct studies and research related to
biological production, distribution and use;
(6) Administrative Service which shall provide the Department with efficient and effective services
relating to personnel, records, collections, disbursements, security, custodial work, and other general
services not covered by the preceding Services.
CHAPTER 4
OFFICES AND BUREAUS
Section 13. Office for Public Health Services. - The Office for Public Health Services, headed by an
Undersecretary, shall include ten (10) staff services involved in policy formulation, standards development,
programs development, and program monitoring of disease control and service delivery programs
implemented by the field offices. The Undersecretary for Public Health Services, who shall be supported by an
Assistant Secretary, shall supervise the following:
(1) Maternal and Child Health Services which shall formulate plans, policies, programs, standards and
techniques relative to maternal and child health; provide consultative training and advisory services to
implementing agencies; and conduct studies and research related to health services for mothers and
children;
(2) Tuberculosis Control Service which shall formulate plans, policies, programs, standards and
techniques relative to control morbidity and mortality from tuberculosis; provide consultative, training
and advisory services to implementing agencies; and conduct studies and research related to
tuberculosis;
(3) Family Planning Service which shall formulate plans, policies, programs, standards and techniques
relative to family planning in the context of health and family welfare; provide consultative, training and
advisory services to implementing agencies; and conduct studies and research related to family
planning;
(4) Environmental Health Service which shall formulate plans, policies, programs, standards and
techniques relative to environmental health and sanitation; provide consultative, training and advisory
services to implementing agencies; and conduct studies and research related to environmental health;
(5) Nutrition Service which shall formulate plans, policies, programs, standards and techniques relative to
nutrition services in the context of primary health care, provide consultative, training and advisory
services to implementing agencies; and conduct studies and research related to Nutrition;
(6) Dental Health Service which shall formulate plans, policies, programs, standards and techniques
relative to dental health services; provide consultative, training and advisory services to implementing
agencies; and conduct studies and research related to dental services.
(7) Malaria Control Service which shall formulate plans, policies, programs, standards and techniques
relative to the control of malaria; provide consultative, training and advisory services to implementing
agencies; and conduct studies and research to malaria and its control;
(8) Schistosomiasis Control Service which shall formulate plans, policies, programs, standards and
techniques relative to the control of schistosomiasis; provide consultative, training and advisory services
to implementing agencies; and conduct studies and research related to schistosomiasis and its control;
(9) Communicable Disease Control Service which shall formulate plans, policies, programs, standards
and techniques relative to the control of communicable diseases, other than the major causes or
mortality and morbidity, such as leprosy, sexually transmitted diseases, filariasis and others; provide
consultative, training and advisory services to implementing agencies; and conduct studies and
research related to these other communicable diseases;
(10) Non-communicable Disease Control Services which shall formulate plans, policies, programs,
standards and techniques relative to the control of non-communicable diseases; provide consultative,
training and advisory services to implementing agencies; and conduct studies and research related to
mental illness, cardiovascular-diseases, cancer, other non-communicable diseases, and occupational
health.
Section 14. Office for Hospital and Facilities Services. - The Office for Hospital and Facilities Services, headed by
an Undersecretary who shall be supported by an Assistant Secretary, shall include four (4) staff services involved
in policy formulation, standards development, program monitoring and provision of specialized assistance in
the operations of hospitals and the management of facilities, which are as follows:
(1) Hospital Operations and Management Service which shall formulate and implement plans,
programs, policies, standards and techniques related to management improvement and quality control
of hospital operations; provide consultative, training and advisory services to field offices in relation to
the supervision and management of hospital components; and conduct studies and research related
to hospital operations and management;
(2) Radiation Health Service which shall formulate and implement plans, policies, programs, standards
and techniques to ensure radiation health safety; provide consultative, monitoring, training and
advisory services to private and government facilities with radiation-emitting apparatus; and conduct
studies and research related to radiation health;
(3) Hospital Maintenance Service which shall formulate and implement plans, programs, policies,
standards and techniques related to assuring the proper maintenance of Department equipment;
provide consultative, training and advisory services to implementing agencies in relation to
preservation, repair and maintenance of medical and non-medical equipment of the Department; and
conduct studies and research related to equipment and facility maintenance;
(4) Health Infrastructure Service which shall formulate and implement plans, policies, programs,
standards and techniques related to development and preservation of health infrastructure; provide
consultative, training and advisory services to implementing agencies in relation to infrastructure
projects to assure economical and efficient implementation; and conduct studies and research related
to infrastructure development and utilization.
Section 15. Office for Standards and Regulations. - The Office for Standards and Regulations, headed by an
Undersecretary and supported by an Assistant Secretary, shall include three (3) bureaus and one (1) national
office that shall be responsible for the formulation of regulatory policies and standards over the various areas of
concern in the health sector, whose implementation shall be the general responsibility of the Department's
regional field offices. The same bureaus shall also be responsible for those areas of activity covered by
regulatory policy to provide the Secretary with current information on the status of these regulated areas of
activity and to provide the Secretary with a basis for preliminary evaluation of the efficiency of the
Department's field offices in performing their regulatory functions. The same bureaus shall conduct studies and
research pertinent to their areas of responsibility . In certain instances the bureaus may also perform
consultative, training and advisory services to the practitioners and institutions in the area of regulated activity.
The same bureaus and national office are the following:
(1) Bureau of Research and Laboratories which shall develop and formulate plans, standards and
policies for the establishment and accreditation and licensing of laboratories; blood banks and entities
handling biological products, provide consultative, training and advisory services to public and private
laboratories; and conduct studies and research related to laboratory procedures and operations;
(2) Bureau of Food and Drugs which shall act as the policy formulation and sector monitoring arm of the
Secretary on matters pertaining to foods, drugs, traditional medicines, cosmetics and household
products containing hazardous substances, and the formulation of rules, regulations and standards in
accordance with Republic Act 3720 (1963), as amended by Executive Order No. 175, s. 1987, and other
pertinent laws for their proper enforcement; prescribe general standards and guidelines with respect to
the veracity of nutritional and medicinal claims in the advertisement of food, drugs and cosmetics in the
various media, to monitor such advertisements; advise the Department's field offices to call upon any
erring manufacturer, distributor, or advertiser to desist from such inaccurate or misleading nutritional or
medicinal claims in their advertising; should such manufacturer, distributor, or advertiser refuse or fail to
obey the desistance order issued by the Bureau, he shall be subject to the applicable penalties as may
be prescribed by law and regulations; the Bureau shall provide consultative, training and advisory
services to all agencies and organizations involved in food and drug manufacturing and distribution
with respect to assuring safety and efficacy of food and drugs; conduct studies and research related to
food and drug safety; maintain a corps of specially trained food and drugs inspectors for assignment to
the various field offices of the Department; while these inspectors shall be under the technical
supervision and guidance of the Bureau, they shall be under the administrative supervision of the head
of the field office to which they shall be assigned, the latter being responsible for regulatory program
implementation within the geographic area of his jurisdiction;
(3) Bureau of Licensing and Regulation which shall formulate policies and establish the standards for the
licensing and regulation of hospitals, clinics and other health facilities; establish standards that shall be
the basis of inspections and licensure procedures of the Department's field offices; and provide
consultative, training and advisory services to field offices on the conduct of licensing and regulatory
functions over hospitals, clinics and other health facilities.
(4) National Quarantine Office which shall formulate and implement quarantine laws and regulations
and, through its field offices, exercise supervision over rat-proof zones in designated international ports
and airports and over medical examination of aliens for immigration purposes.
CHAPTER 5
FIELD OFFICES
Section 16. Office for National Field Operations. - The Office for National Field Operations, through an Executive
Committee, shall supervise the operations of the various Regional Field Offices and the National Health
Facilities, as enumerated in Section 17(3) and further described in Sections 18, 19 and 20 hereof.
Section 17. Department Field Offices. - The Department field offices, under the supervision and control of the
Executive Committee for National Field Operations, shall be composed of the following:
(1) Regional Health Offices (other than the National Capital Region) and subordinate units that include
regional medical centers, regional hospitals, provincial health offices including component hospitals
and district health offices, city health offices;
(2) Regional Health Office for the National Capital Region: Municipal Health Offices of Makati,
Mandaluyong, Pasig, Marikina, Las Piñas, Muntinlupa, San Juan, Valenzuela, Navotas, Malabon,
Parañaque, Taguig, Pateros;
(3) National Health Facilities which are health facilities classified as National Health Resources because
their services and activities accrue to the whole country's health care and infrastructure. These facilities
are of two classifications: National Medical Centers and the Special Research Centers and Hospitals,
which are attached to the Department:
(a) National Medical Centers: San Lazaro Hospital, Tondo Medical Center, Jose Fabella
Memorial Hospital, Quirino Memorial Hospital, Rizal Medical Center, National Children's Hospital,
Jose Reyes Memorial Medical Center and the East Avenue Medical Center.
(b) Special Research Centers and Hospitals; Philippine Heart Center, Lung Center of the
Philippines, National Orthopedic Hospital, National Center for Mental Health, Research Institute
for Tropical Medicine, National Kidney Institute, and the Philippine Children's Medical Center.
Section 18. Regional Health Offices. - The Department is authorized to establish, operate, and maintain a
Department-wide Regional Office, in each of the administrative regions of the country, under the supervision of
an Executive Committee chaired by the Secretary. Each Regional Office shall be headed by a Regional
Director to be appointed by the President, and supported by an Assistant Regional Director. The appointment
of the Regional Director and Assistant Regional Director shall be to the Department-at-large and assignment
shall be by administrative issuances of the Secretary. The Regional Health Office shall be responsible for the field
operations of the Department in its administrative region and for providing the region with efficient and
effective health and medical services. It shall supervise all Department agencies in its administrative region
including whatever medical centers, regional hospitals, sanitaria, provincial health officers and city health
offices are located in the region except those placed under the Department Proper.
In addition to the foregoing, a Regional Office shall have within its administrative region, the following functions:
(1) Implement laws and rules, regulations, policies, plans, programs and projects of the Department in
the region;
(2) Provide efficient and effective health and medical services to the people;
(3) Coordinate with regional offices of other departments, offices, and agencies in the region;
(4) Coordinate with local government units; and
(5) Perform such other functions as may be provided by law.
Section 19. Provincial Health Office. - The Provincial Health Office shall be the Department agency in the
province. It shall exercise supervision and control over district health offices and other field units of the
department in the province, except those otherwise placed under the Department Proper or directly under the
Regional Health Office.
The Provincial Health Office shall be headed by a Provincial Health Officer. Depending on the size, population,
and health facilities of the province as well as budgetary provisions, a province may have one Assistant
Provincial Health Officer assisting the Provincial Health Officers, or two Assistant Provincial Health Officers, one
assisting the Provincial Health Officer in public health activities and the other assisting in hospital operations. The
Provincial Health Officers and Assistant Provincial Health Officers shall be appointed by the Secretary to a
region, and their assignment to a province shall be made by the Secretary on recommendation of the
Regional Health Director.
Section 20. District Health Office. - The District Health Office shall exercise supervision and control over district
hospitals, municipal hospitals, rural health units, barangay health stations and all other Department units in the
health district, except those otherwise placed directly under the Provincial Health Office, or Regional Health
Office, or the Department Proper.
The District Health Office shall be headed by a District Health Officer who shall also serve as the Chief of the
district hospital as well as the head of all field units in the district. District Health Officers shall be appointed by
the Secretary to a region, and their assignments shall be made by the Secretary on the recommendation of the
Regional Health Director.
Section 21. Local Health Agencies. - The Department shall review and monitor the establishment, operation and
maintenance of health agencies funded by local governments. Proposals for integrating locally funded health
agencies under the supervision and control of the Department without regard to the sourcing of funds shall be
made by the Department for the appropriate local government's approval. Any such agreement shall be
allowed and, whenever possible, funding from national sources may be extended to achieve a nationally
integrated government health service under the Department.
Section 22. City Health Officers. - The City Health Officers and Assistant City Health Officers shall be appointed
by the Secretary. Their compensation shall be paid out of national funds.
Section 23. Delegation of Power by Secretary. - The Secretary shall have the authority to delegate such
substantive and administrative powers and authority as may be necessary to the heads of the Regional Health
Offices, in addition to such administrative authority as have been mandated for delegation for all Departments
by the President. The Secretary shall also delegate such powers and authority to the heads of the Provincial
Health Offices and those of other subordinate units of the Regional Health Offices as in his sound judgment
would make for a more efficient and effective administration of health and medical services.
CHAPTER 6
ATTACHED AGENCIES
Section 24. Attached Entities. - The Philippine Medical Care Commission and the Dangerous Drugs Board shall
be attached to the Department and shall continue to operate and function in accordance with the law
creating them, except as otherwise provided in this Code.
Section 25. The Philippine Medical Care Commission. - The Philippine Medical Care Commission shall be
composed of the Secretary of Health as Chairman, an Undersecretary of Health designated by the Secretary
as Vice-Chairman, and the following members: the Administrator of the Social Security System, the President
and General Manager of the Government Service Insurance System, the Secretary of Finance, the Secretary of
Local Government, the Secretary of Labor and Employment, and four (4) other members representing the
beneficiaries, the private employers, the physicians and the hospitals. The four other members shall be
appointed by the President of the Philippines for a term of six (6) years.
The ex officio members may designate their representatives who shall exercise the plenary powers of their
principals as well as enjoy the benefits available to the latter.
Section 26. The Dangerous Drugs Board. - The Dangerous Drugs Board shall be composed of the Secretary of
Health, who shall be ex officio chairman, an Undersecretary of Health designated by the Secretary, who shall
be ex officio Vice-Chairman, an Executive Director and the following members: the Secretary of Justice or his
representative; the Secretary of National Defense or his representative; the Secretary of Education or his
representative; the Secretary of Finance or his representative; and the Secretary of the Department of Social
Welfare and Development or his representative. The Director of the National Bureau of Investigation shall be the
permanent consultant of the Board.
Title X
TRADE AND INDUSTRY
CHAPTER 1
GENERAL PROVISIONS
Section 1. Declaration of Policy. - The State shall develop a self-reliant and independent national economy
effectively controlled by Filipinos. It recognizes the indispensable role of the private sector, encourages private
enterprise, and provides incentives to needed investments.
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. It shall protect Filipino enterprises against unfair foreign
competition and trade practices.
In 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 State shall pursue a trade policy that serves the general welfare and utilizes all forms and arrangements of
exchange on the basis of equality and reciprocity.
The State shall regulate or prohibit monopolies when the public interest so requires. No combinations in restraint
of trade or unfair competition shall be allowed. The state shall protect consumers from trade malpractices and
from substandard or hazardous products.
Section 2. Mandate. - The Department of Trade and Industry shall be the primary coordinative, promotive,
facilitative and regulatory arm of the Executive Branch of government in the area of trade, industry and
investments. It shall promote and develop an industrialization program effectively controlled by Filipinos and
shall act as catalyst for intensified private sector activity in order to accelerate and sustain economic growth
through: (a) comprehensive industrial growth strategy, (b) a progressive and socially responsible liberation
program, (c) policies designed for the expansion and diversification of trade, and (d) policies to protect Filipino
enterprises against unfair foreign competition and trade practices.
Section 3. Powers and Functions. - The Department of Trade and Industry, shall:
(1) Formulate and implement policies, plans and programs relative to the development, expansion,
promotion and regulation of trade, industry, and investments;
(2) Consolidate and coordinate all functions and efforts pertaining to the promotion of exports,
diversification and decentralization of industries, and development of foreign trade;
(3) Encourage and promote the growth and expansion of industries which make full use of human and
natural resources and which are competitive in domestic and foreign markets;
(4) Adopt and implement measures to protect Filipino enterprises against unfair foreign competition and
trade practices.
(5) Provide incentives to broaden the base of ownership of large-scale industrial enterprises and
accelerate the formulation and growth of small and medium-scale enterprises;
(6) Regulate the importation of essential consumer and producer items to maintain their fair and
competitive prices to end-users;
(7) Protect consumers from trade malpractices and from substandard or hazardous products;
(8) Adopt and implement measures to prohibit combinations in restraint of trade and unfair
competition;
(9) Develop the capabilities of industry to increase the domestic content of its products and upgrade
the quality of products according to competitive international standards;
(10) Encourage and support the formation of People's Economic Councils at regional, provincial and
municipal levels as well as other trade, industry and consumer protection institutions or associations;
(11) Upgrade and develop the manufacture of local capital goods and precision machinery
components;
(12) Formulate the appropriate mechanics to guide and manage the transfer of appropriate industrial
technology in the country;
(13) Formulate country and product export strategies which will guide the export promotion and
development thrusts of the government; and implement programs and activities geared towards the
overseas promotion of Philippine exports in overseas markets;
(14) Take the primary role in negotiating and reviewing existing international trade agreements,
particularly those affecting commodity quotas limiting existing exports of Philippine products to
determine programs for renegotiations of more favorable terms;
(15) Administratively adjudicate and impose reasonable fines and penalties for violation of existing
trade and industry laws;
(16) Prepare, for consideration of the Monetary Board, proposed programs in the commercial banking
sector for directing commercial lending facilities towards priority areas of commercial and industrial
development, as well as coordinate government direct funding and financial guarantee programs to
achieve trade and industry growth;
(17) Issue subpoena and subpoena duces tecum to compel the attendance of witnesses and the
production of the necessary information, papers and documents which it may deem necessary in the
exercise of its powers and functions;
(18) Prescribe and enforce compliance with such rules and regulations as may be necessary to
implement the intent and provisions of this Code, which rules and regulations shall take effect fifteen
(15) days following their publication in the Official Gazette; and
(19) Perform such other functions as may be necessary or incidental in carrying into effect the provisions
of this Code and as may be provided by law.
Section 4. Organizational Structure. - The department shall consist of the offices of the secretary,
undersecretaries and assistant secretaries, national service centers, regional offices, and line corporate
agencies and government entities.
CHAPTER 2
DEPARTMENT PROPER
Section 5. Office of the Secretary. - The Office of the Secretary shall consist of the Secretary, his immediate staff,
the Undersecretary for Policy Planning and Support Services, and the Offices and Services directly supportive of
the Office of the Secretary. The functions of the foregoing shall be as follows:
(1) The Undersecretary for Policy Planning and Support Services shall supervise the Office of Policy
Research, the Office of Operational Planning, the Office of Legal Affairs, the Human Resource
Development Service, the General Administrative Service, the Management Information Service, the
Financial Management Service and the Public Relations Office;
(2) The Office of Policy Research shall coordinate and help formulate general trade and industry
policies for the Department; evaluate the effectiveness of trade and industry programs as such, as their
implementation by the Department's Line Operating Units; and research on trade and industry issues for
policy analysis and formulation;
(3) The Office of Operational Planning shall develop operating plans, programs and projects of the
Department as such; supervise the Annual Trade and Industry Development Planning Conferences
between government and the private sector; evaluate the cost-effectiveness of various projects and
activities of the Department; coordinate the updating of the Department's operating plans in response
to relevant environment changes; review the Department's performance against standards and targets
previously established; and provide staff services related to the development, monitoring, reporting and
assessment of foreign assisted projects of the Department;
(4) The Office of Legal Affairs shall provide the Secretary with legal advise on all policies, programs, and
operational matters of the Department, serve as Counsel for the Department in cases in which it is a
party; handle administrative cases against Department personnel and submit recommendations
pertaining thereto; and review legislative proposals;
(5) The Human Resource Development Service shall design and implement human resource
development plans and programs for the personnel of the Department; provide for present and future
manpower needs of the organization; and maintain high morale and favorable employee attitudes
towards the organization through the continuing design and implementation of employee
development programs;
(6) The Financial Management Service shall formulate and manage a financial program to ensure
availability and proper utilization of funds; and provide for an effective monitoring system of the
financial operations of the Department;
(7) The General Administrative Service shall provide services relative to procurement and allocation of
supplies and equipment, transportation, messengerial work, cashiering, payment of salaries and other
Department obligations, office maintenance, property safety and security, and other utility services;
and comply with government regulatory requirements in the areas of performance appraisal,
compensation and benefits, employment records and reports;
(8) The Management Information Service shall design and implement a comprehensive management
information system, both computerized and manual, for the Department; provide technical assistance
to the various information generating units within the Department; and establish data exchange
linkages with public and private agencies whenever feasible;
(9) The Public Relations Office shall perform The Department's public relations function: provide a two-
way flow of information between the Department and its constituencies; and coordinate the Secretary's
regular press conferences and the Department's relations with the mass media;
(10) The Trade and Investment Information Center shall, as the primary information arm of the
Department, design and operate a computerized system of collection, documentation, storage,
retrieval, and timely dissemination of comprehensive and relevant information on trade, industry, and
investment for use by other government agencies and the business sector; coordinate and monitor the
information campaigns on the Department's services, programs, and projects; develop a
communications programs to promote Philippine investment opportunities and the country's export
products which shall be directed at foreign audiences; and provide creative services to other units of
the Department in support of their own information programs;
(11) The National Industrial Manpower Training Council shall act as the umbrella agency to coordinate
and operate the Cottage Industry Technology Center, the Construction Manpower Development
Foundation, and the Construction Manpower Development Center and perform other functions such as
initiating specialized industrial training centers and identifying supply-demand factors and industrial skills
subject to the direction formulated by the National Manpower and Youth Council; and
(12) There is hereby created in the Office of the Secretary the Office of Special Concerns to attend to
matters that require special attention, whether involving a matter that crosses several functional areas,
demands urgent action, or otherwise necessitates, in the Secretary's opinion, attention by a special
group.
Section 6. Undersecretaries. - The Secretary shall be assisted by five (5) Undersecretaries. They shall exercise
supervision over the offices, services, operating units and individuals under their authority and responsibility.
The Secretary may designate any Undersecretary to supervise the bureaus, offices, and agencies, including the
attached entities, consistent with the mandate of the department.
Section 7. Assistant Secretaries. - The Secretary shall also be assisted by five (5) Assistant Secretaries who shall be
appointed by the President upon the recommendation of the Secretary. The Secretary is hereby authorized to
delineate and assign the respective areas of functional responsibility of the Assistant Secretaries. Within his
functional area of responsibility, an Assistant Secretary shall assist the Secretary and the Undersecretaries in the
formulation, determination and implementation of laws, policies, plans, programs and projects on trade and
industry and shall oversee the day-to-day administration of the constituent units of the Department.
Section 8. Staff Bureaus and Services. - The Bureaus and Service Units shall be responsible for research,
formulation of policy, development of standards, framing of rules and regulations, program formulation and
program monitoring, related to the concerns covered by the Department's mandate, powers and functions.
Implementation of such policies, standards, rules and regulations, and programs shall be the responsibility of the
Department's Line Operating Units.
Section 9. Department Line Operating Units. - The Department Line Operating Units shall be composed of the
following:
(1) Regional Offices. These are offices which shall be located in the National Capital Region and each
of the twelve (12) other administrative regions of the country. They shall be operated and maintained
on a Department-wide basis, acting as implementing arms in the regions under their jurisdiction, of the
Department's policies, programs, rules and regulations as well as those laws which the Department is
mandated to enforce.
(2) Line Corporate Agencies and Government Entities. These are the government entities and the
government-owned or controlled corporations under the administrative supervision of the Department
which are deemed to be integral parts of the Department structure notwithstanding their organizational
form, and which perform a focal and implemental role in the Department's programs for the
development of trade, industry and investments.
CHAPTER 3
OFFICE OF THE UNDERSECRETARY FOR DOMESTIC TRADE
Section 10. Office of the Undersecretary for Domestic Trade. - The Office of the Undersecretary for Domestic
Trade shall include all the staff bureaus and services involved in policy formulation, standards development,
regulatory, and service delivery programs pertinent to domestic trade and commerce being implemented by
the Department's line operating units. The Undersecretary for Domestic Trade shall supervise the following:
(1) Bureau of Trade Regulations and Consumer Protection. This Bureau shall formulate and monitor the
implementation of programs for the effective enforcement of laws, correct interpretation and adoption
of policies on monopolies and restraint of trade, mislabelling, product misrepresentation and other
unfair trade practices; monitor the registration of business names and the licensing and accreditation of
establishments and practitioners; protect and safeguard the interest of consumers and the public,
particularly the health and safety implications of intrinsic products features, product representation, and
the like; and establish the basis for evaluating consumer complaints and product utility failures.
(2) Bureau of Domestic Trade Promotion. This Bureau shall prepare and monitor the implementation of
plans and programs directed at the promotion and development of domestic trade, particularly in the
area of efficiency, fairness and balance in the distribution of essential products and services and in the
strengthening of the domestic base for export activities; conceptualize, monitor, and evaluate
programs, plans and projects intended to create awareness of domestic marketing opportunities for
new projects, new technologies and investments.
(3) Bureau of Patents, Trademarks, and Technology Transfer. This Bureau shall examine applications for
grant of letters, patent for inventions, utility models and industrial designs, and the subsequent grant or
refusal of the same; register trademarks, tradenames, service marks and other marks of ownership; hear
and adjudicate contested proceedings affecting rights to patents and trademarks; receive, process for
registration and evaluate technology transfer arrangements as to their appropriateness and need for
the technology or industrial property rights, reasonableness of the technology payment, and for the
prohibition of restrictive business clauses, and comply with all its statutory publication requirements by
publishing the same in a newspaper of general circulation or in the Official Gazette.
(4) Bureau of Product Standards. This Bureau shall review the products contained in the critical imports
list in accordance with established national standards or relevant international standards and buyer-
seller specifications; promulgate rules and regulations necessary for the country's shift to the
international system of units; study and carry out research on the various reference materials to be used
as basis for the start of whatever analysis or evaluation is demanded by the products under examination
or investigation; establish standards for all products of the Philippines for which no standards have as yet
been fixed by law, executive order, rules and regulations and which products are not covered by the
standardization activities of other government agencies; participate actively in international activities
on standardization, quality control and metrology; ensure the manufacture, production, and distribution
of quality products for the protection of consumers; test and analyze standardized and unstandardized
products for purposes of product standard formulation and certification; extend technical assistance to
producers to improve the quality of their products; check length, mass and volume measuring
instruments; and maintain consultative liaison with the International Organization for Standardization,
Pacific Area Standards Congress, and other international standards organizations.
(5) Video Regulatory Board. This Board shall regulate videogram establishments; prevent unfair
practices, unfair competition, pirating of legitimately produced video products, and other deceptive,
unfair and unconscionable acts and practices to protect the viewing public and the general public.
CHAPTER 4
OFFICE OF THE UNDERSECRETARY FOR INTERNATIONAL TRADE
Section 11. Office of the Undersecretary for International Trade. - The Office of the Undersecretary for
International Trade shall include all the units involved in policy formulation, standards development, program
monitoring of the development, regulatory, and service delivery programs of the Department pertinent to
international trade and commerce being implemented by the Department's line operating units. The
Undersecretary for International Trade shall supervise the following:
(1) Bureau of International Trade Relations. This Bureau shall be the primary agent responsible for all
matters pertaining to foreign trade relations, whether bilateral, regional or multilateral, especially market
access and market access related matters; formulate positions and strategies for trade negotiations,
consultations and conferences as well as supervise trade negotiations, consultations and conferences;
coordinate with other Departments and agencies of the Philippine government with the view of
assuring consistency in the government's positions in trade negotiations and on other activities
pertaining to foreign trade relations; consult with industry groups and provide technical advice and
information on the above matters and activities; identify tariff and non-tariff barriers affecting products
of export interest to the Philippines, and negotiate measures for liberalizing them at bilateral, regional
and multilateral form; and evaluate and submit recommendations on existing and proposed
commercial policies of the Philippines.
(2) Bureau of Export Trade Promotion. This Bureau shall formulate and monitor programs, plans, and
projects pertinent to the development, promotion, and expansion of the foreign trade of the Philippines;
formulate country and product export strategies; conduct research on new product development and
adaptation opportunities in the export markets, as well as identify the domestic supply base for such
products, prepare situation reports on all export production; prepare and update country and regional
market profiles; maintain an integrated information system on all aspects of the products and
commodities relevant to export marketing; formulate, plan, supervise, coordinate and monitor the
implementation of both private and official incoming and outgoing missions, and review the results of
such; promote and coordinate international subcontracting arrangements between and among
foreign and Philippine investors whereby production operations and facilities may be located in the
Philippines; formulate and monitor the implementation of policies and guidelines for the registration and
certification of bona fide exporters eligible for the various export incentive programs of the Philippines;
and review and identify appropriate measures to minimize or deregulate export-import procedures and
other foreign trade laws necessary to stimulate the international marketing of Philippine products.
(3) Foreign Trade Service Corps. This Corps shall assist Philippine businessmen, producers, and exporters
with marketing information, project development support, and liaison with foreign government
agencies; develop marketing and commercial intelligence for dissemination to Philippine businessmen
through the Trade and Investment Information Center; provide direct support to the Department's
overseas promotional programs; assist Philippine businessmen handle trade complaints against foreign
firms and governments; support Department units in import and export administration, monitoring of
trade agreements, and investments promotion; and be accountable for establishment of foreign
investment and export targets for their respective areas of responsibility.
In addition to the existing Foreign Trade Service Corps. the President may appoint Trade Commissioners
with the rank of Assistant Secretary to coordinate trade and investment matters in the various continents
to which they are assigned for the purpose of increasing trade and investments.
(4) Bonded Export Marketing Board. This Board shall promote the establishment of bonded
manufacturing and trading facilities for the re-export of those products where a clear net value added
may be generated based on the emerging comparative advantage of the Philippine export industry;
study and analyze the international market for specific products where the Philippines has or can
develop a comparative advantage; recommend to the Bureau of Customs the licensing of bonded
manufacturing facilities and monitor all bonded manufacturing sites, with the objective of ensuring
operational efficiency; identify and designate sites where export bonded manufacturing sites shall be
located with a view of dispersal to the regions; and initiate studies on the development and
maintenance of the country's competitive advantage in export products.
(5) Philippine Shippers' Council. This Council shall represent Philippine shippers in international liner
conferences and negotiate in their behalf, for more favorable freight and shipping rates; evaluate and
issue waivers to the use of Philippine flag carriers; and provide assistance and information to Philippine
shippers, specially exporters, in matters related to shipping.
(6) Philippine Trade Training Center. This Center shall develop training modules on export and import
techniques and procedures; raise the level of awareness of Philippine businessmen of export
opportunities and the availability of alternative sources of import products or diversified markets for
exports; offer specialized courses for specific industry groups directed at overcoming barriers to
overseas market penetration; and conduct training programs in international trade practices,
inspection techniques and exhibitions mounting.
(7) Product Development and Design Center of the Philippines. This Center shall provide product
identification, research, and development services to the private sector; conduct seminars and
workshops on product design and development; set up design exhibitions; publish product design
related materials; and conduct continuing research on product and product packaging design trends
and processing technologies.
CHAPTER 5
OFFICE OF THE UNDERSECRETARY FOR INDUSTRY AND INVESTMENTS
Section 12. Office of the Undersecretary for Industry and Investments. - The Office of the Undersecretary for
Industry and Investments shall supervise all agencies involved in the formulation and implementation of
programs and projects pertinent to the development of domestic industries and the promotion of investments
in activities or enterprises critical to the Department's trade and industry development program.
(1) Bureau of Small and Medium Business Development. This Bureau shall formulate and monitor
development programs for private institutions involved in assisting the trade and industry sector, delivery
mechanisms and linkages for marketing, financial and subcontracting services, and development
programs for livelihood and micro, small and medium enterprises.
(2) Board of Investments, whose functions are defined below.
(3) Export Processing Zone Authority, whose functions are defined below.
(4) Bureau of Import Services. This Bureau shall monitor import levels and prices, particularly liberalized
items; analyze and forecast import levels; analyze and publish import return statistics; perform annual
reviews of the substantive components of the Philippine Tariff System and submit recommendations
thereon; perform such other functions on import transactions as the President or the Central Bank of the
Philippines shall delegate or authorize; and ensure that the Department's views on goods under the
jurisdiction of other Departments are taken into consideration.
(5) Iron and Steel Authority.
(6) Construction Industry Authority of the Philippines.
CHAPTER 6
OFFICE OF THE UNDERSECRETARY FOR REGIONAL OPERATIONS
Section 13. Office of the Undersecretary for Regional Operations. - The Office of the Undersecretary for
Regional Operations shall exercise supervision and control over the Department's Regional Offices, described in
Section 9, par. 1 hereof. It shall be responsible for the field operations of the Department, ensuring full
compliance with Department policies, rigorous implementation of Department and regulations, and proper
implementation of Department plans and programs by the Regional Offices in their respective administrative
jurisdictions.
Section 14. Regional Offices. - The Department is hereby authorized to establish, operate and maintain a
Department-wide regional office in each of the country's administrative regions. Each Regional Office shall be
headed by a Regional Director who shall be assisted by an Assistant Regional Director. A Regional Office shall
have, within its administrative region, the following functions:
(1) Implement pertinent laws, and the rules, regulations, policies, plans, programs and projects of the
Department;
(2) Provide efficient and effective service to the people;
(3) Coordinate with the regional offices of other departments, offices and agencies in the region;
(4) Coordinate with the local government units; and
(5) Perform such other functions as may be provided by law or appropriately assigned by the Secretary.
CHAPTER 7
ATTACHED AGENCIES
Section 15. Line Corporate Agencies and Government Entities. - The following are the Line Corporate Agencies
and Government Entities that will perform their specific regulatory functions, particular developmental
responsibilities, and specialized business activities in a manner consonant with the Departments' mandate,
objectives, policies, plans, and programs:
(1) National Development Company. This Company shall promote investments in or establish enterprises
for the express purposes of encouraging the private sector to follow suit by proving the financial viability
of such enterprises; or of filling critical gaps in the input-output structure of Philippine commerce and
industry when the private sector is unwilling or unable to engage in such enterprises because of the
magnitude of investments required or the risk complexion of the undertaking.
(2) Garments and Textile Export Board. This Board, which shall be supervised by the Undersecretary for
International Trade, shall oversee the implementation of the garment and textile agreements between
the Philippines and other countries, particularly garments and textiles quotas; approve quota allocations
and export authorizations; issue export licenses and adopt appropriate measures to expedite their
processing; provide the necessary information and statistics relating to the administration of garments
and textiles export quotas and the flow of garments and textiles exports for monitoring purposes and for
negotiations with other countries; implement rules and regulations for the administration of all
international textile agreements entered into between the Philippines and importing countries; and fix
and collect reasonable fees for the issuance of export quotas, export authorizations, export licenses,
and other related services, in accordance with the Department policies, rules and regulations.
(3) International Coffee Organization-Certifying Agency. This Agency, which shall be supervised by the
Undersecretary for International Trade, shall oversee the implementation of the coffee agreements
between the Philippines and other countries, particularly coffee quotas.
(4) Philippine International Trading Corporation. This Corporation, which shall be supervised by the
Undersecretary for International Trade, shall only engage in both export and import trading on new or
non-traditional products and markets not normally pursued by the private business sector; provide a
wide range of export oriented auxiliary services to the private sector; arrange for or establish
comprehensive system and physical facilities for handling the collection, processing, and distribution of
cargoes and other commodities; monitor or coordinate risk insurance services for existing institutions;
promote or organize, whenever warranted, production enterprises and industrial establishments and
collaborate or associate in joint venture with any person, association, company, or entity, whether
domestic or foreign, in the fields of production, marketing, procurement, and other related businesses;
and provide technical, advisory, investigatory, consultancy, and management services with respect to
any and all of the functions, activities, and operations of the corporation.
(5) Board of Investments. This Board, which shall be supervised by the Undersecretary for Industry and
Investments shall be responsible for coordinating the formulation and implementation of short, medium
and long term industrial plans as well as promoting investments in the Philippines in accordance with
national policies and priorities; register, monitor, and grant investment incentives to individual
enterprises; formulate policies and guidelines aimed at creating an environment conducive to the
expansion of existing investments or attracting prospective investments in the Philippines, Provided, That
the Board shall place primary emphasis on its promotive functions.
(6) Export Processing Zone Authority. This Authority which shall be supervised by the Undersecretary for
Industry and Investments, shall develop and manage export processing zones, in consonance with
Department policies and programs.
(7) The Center for International Trade Expositions and Missions, Inc. is hereby merged with the Philippine
Trade Exhibition Center. The latter shall be the surviving entity and is hereby renamed "Center for
International Trade Expositions and Missions."
Title XI
AGRARIAN REFORM
CHAPTER 1
GENERAL PROVISIONS
Section 1. Declaration of Policy. - The State shall undertake an agrarian reform program founded on the right of
farmers and regular farmworkers who are landless to own directly or collectively the lands they till or, in the case
of other farmworkers, to receive a just share of the fruits thereof.
The State shall recognize the right of farmers, farmworkers, and landowners, as well as cooperatives, and other
independent farmers' organizations to participate in the planning, organization and management of the land
reform program, and shall provide support to agriculture through appropriate technology and research, and
through adequate financial, production, marketing, and other support services.
The State shall provide incentives for voluntary land-sharing. It may resettle landless farmers and farmworkers in
its own agricultural estates which shall be distributed to them in the manner provided by law.
Section 2. Mandate. - The Department shall provide central direction and coordination to the national agrarian
reform program extended to transform farm lessees and farm tenants into owner-cultivators of economic
family-size farms to improve their living conditions.
The Department shall formulate and implement policies, plans and programs for the distribution and cultivation
of all agricultural lands, including sugar and coconut lands, with the participation of farmers, farmworkers,
landowners, cooperatives, and other independent farmers' organizations. It shall provide leadership in
developing support services to tenant-owners, farm managers, and other cultivators through appropriate
research and development programs, and shall render adequate assistance in finance, marketing, production
and other aspects of farm management.
Section 3. Powers and Functions. - To accomplish its mandate, the Department shall:
(1) Implement laws, programs and policies for the acquisition and distribution of all agricultural lands as
provided by laws;
(2) Resettle landless farmers and farmworkers in government-owned agricultural estates which shall be
distributed to them as provided by law;
(3) Recommend and provide incentives for voluntary sharing of lands by owners of agricultural lands;
(4) Acquire, determine the value, subdivide into family-size farms, develop and distribute to qualified
tillers, actual occupants and displaced urban poor, private agricultural lands regardless of area and
crops planted;
(5) Administer and dispose of, under a settlement scheme, all portions of the public domain declared as
alienable and disposable lands for speedy distribution to and development by deserving and qualified
persons who do not own any land and under such terms and conditions as the Department may
prescribe, giving priority to qualified and deserving farmers in the province where such lands are
located;
(6) Provide free legal assistance to farmers covered by agrarian reform and expedite the resolution of
agrarian conflicts and land tenure problems either through conciliatory or adversary proceedings;
(7) Provide creative, responsive and effective information, education and communication programs
and projects both for the tenant beneficiaries, landowners, the government and private sectors and the
general public, thereby generating a broad spectrum of support and understanding of the new
agrarian reform program;
(8) Strengthen agrarian reform beneficiaries organizations to a degree of national viability that would
enable them to share in the shaping of government policies and institutionalize farmers' participation in
agrarian reform policy formulation, program implementation and evaluation;
(9) Promote the organization and development of cooperatives of agrarian reform beneficiaries and
register the same;
(10) Implement all agrarian reform laws and for the this purpose issue subpoena, subpoena duces
tecum, and writs of execution of its orders, and decisions and other legal processes to ensure
compliance from all parties concerned for successful and expeditious program implementation;
(11) Undertake land surveys on lands covered by agrarian reform, and issue patents to farmers covered
by agrarian reform, both on private and public lands;
(12) Develop, implement and undertake alternative and innovative land development schemes and
land tenure systems such as, but not limited to land consolidation, land farming cooperative farming
and agro-industrial estates;
(13) Approve or disapprove conversion of agricultural lands to non-agricultural uses such as residential
and industrial conversions in accordance with the existing provisions of law;
(14) Undertake land use management studies;
(15) Compensate the landowners covered by agrarian reform;
(16) Integrate and synchronize program implementation of the Land Bank of the Philippines and other
relevant civilian and military government and private entities involved and mandated to support the
agrarian reform program through Inter-Agency Committees and Agrarian Reform Coordinating
Councils; and
(17) Perform such other functions as may be provided by law.
Section 4. Organizational Structure. - The Department shall consist of the Office of the Secretary, the
Undersecretary, the Assistant Secretary, the Services and Staff Bureaus, the Regional Offices, the Provincial
Offices, and the Team Offices.
CHAPTER 2
DEPARTMENT PROPER
Section 5. Office of the Secretary. - The Office of the Secretary shall consist of the Secretary and his immediate
staff.
Section 6. Undersecretary. - The Secretary shall be assisted by one (1) Undersecretary who shall perform the
following functions:
(1) Oversee the operational activities of the Department delegated to him by and for which he shall be
responsible to the Secretary;
(2) Coordinate programs and projects within the DAR and with other government agencies and farmer
organizations when so delegated by the Secretary;
(3) Assist the Secretary on matters relating to the operations of the Department;
(4) Assist the Secretary in the preparation of reports; and
(5) Perform such other duties and functions as may be provided by law or assigned by the Secretary.
Section 7. Assistant Secretary. - The Secretary shall be assisted by one Assistant Secretary.
CHAPTER 3
DEPARTMENT SERVICES
Section 8. Management and Executive Services. - The Management and Executive Services shall have the
following functions:
(1) Recommend the implementation of appropriate systems and procedures as it relates to the overall
monitoring and feedback mechanisms required by the Office of the Secretary;
(2) Gather, consolidate, appraise, prepare and submit regular top management reports pertaining to
the Department and overall administration, financial, programs and projects implementation status for
decision making purposes;
(3) Design and maintain a program/project display center(s) that will showcase the Department's
various plans, programs and accomplishments;
(4) Prepare and review office orders, memoranda and other communications;
(5) Provide secretariat support during meetings and conferences including international conferences
and seminars relative to agrarian reform;
(6) Supervise the implementation of department-wide records management and disposal system;
(7) Develop alternative management systems which will increase efficiency in the delivery of services,
attain better means of control, maximize use of available human and physical resources;
(8) Conduct periodic systems and procedures audit of the various units of the Department;
(9) Prepare news items on agrarian reform accomplishments and handle press and media relations
work for the Secretary; and
(10) Perform such other functions as may be assigned by the Secretary.
Section 9. Legal and Public Assistance Service. - The Legal and Public Assistance Service shall have the
following functions:
(1) Prepare legal decisions and resolutions of administrative cases and render legal opinions,
interpretation of contracts, laws, rules and other administrative issuances;
(2) Prepare legal decisions and resolutions of administrative cases; and
(3) Provide public assistance services.
Section 10. Research and Strategic Planning Service. - The Research and Strategic Planning Service shall have
the following functions:
(1) Review, analyze and integrate submitted plans and programs and special project proposals by
Bureaus, services, and field offices and determine if plans and programs are in accordance with
priorities set for budgetary support;
(2) Review, coordinate and integrate all recommendations for reprogramming and revision of work
programs of the Department to support fund releases or requests;
(3) Initiate, integrate, or prioritize research studies and recommend for funding in coordination with units
concerned and review and interpret research findings for policy applicability;
(4) Conduct researches or case studies for policy recommendations and application;
(5) Coordinate, integrate and assist in the assessment of programs and projects against plans, costs and
resources, standards and performance targets;
(6) Coordinate, integrate and analyze periodic accomplishment reports of the Department as may be
required or necessary;
(7) Maintain liaison with public and private development and planning bodies, public and private; and
(8) Perform such other functions as may be provided by law or assigned by the Secretary.
Section 11. Finance and Physical Assets Management Service. - The Finance and Physical Assets Management
Services shall have the following functions:
(1) Prepare, execute and administer the Department's budget including standards and guidelines;
(2) Monitor and evaluate the implementation of the Central and Regional budget;
(3) Process all money claims related to all types of Department expenditures including personal services,
maintenance and other operating expenses and capital outlays;
(4) Prepare financial reports and maintain books of accounts;
(5) Prepare, release and control check disbursements and index or monitor check payments;
(6) Implement proper internal control mechanisms;
(7) Formulate and implement policies and systems on the disposition of supplies, materials and
equipment requirements of all operating units for their effective functioning;
(8) Undertake repair and maintenance of all equipment furniture, building facilities and grounds of the
Department; and
(9) Manage and maintain an inventory of physical assets in the Department's Central and Regional
offices.
Section 12. Administrative and Personnel Service. - The Administrative and Personnel Service shall exercise the
following functions:
(1) Formulate and implement policies and guidelines on personnel placement, appraisal and action;
(2) Formulate and implement policies and guidelines on employee services, employee relations
management and staff development;
(3) Service the reproduction, utility and messengerial requirements of all Departmental groups and
offices;
(4) Provide the major operating units of the Department with basic equipment, supplies and materials
including logical support;
(5) Engage in general canvassing and purchasing of supplies, materials and equipment;
(6) Implement guidelines with respect to procurement services; and
(7) Perform such other functions as the Secretary may assign.
CHAPTER 4
BUREAUS
Section 13. Bureau of Agrarian Legal Assistance. - The Bureau of Agrarian Legal Assistance shall have the
following functions:
(1) Formulate guidelines, plans and programs for the effective delivery of legal assistance to the
clientele;
(2) Adopt the process of mediation and conciliation to judiciously settle agrarian problems;
(3) Investigate cases, review recommendations, and prepare orders, decisions and resolutions on
matters involving agrarian dispute;
(4) Maintain a docket of cases on claims and conflicts and issue clearance in relation thereto;
(5) Provide legal information and prepare materials for publication;
(6) Conduct and compile legal research and studies on agrarian reform and maintain a law library;
(7) Prepare legal opinions on matters pertaining to agrarian reform program implementation;
(8) Represent agrarian reform beneficiaries or members of their immediate farm households before all
courts and quasi-judicial and administrative bodies in civil, criminal or administrative cases instituted by
or against them, arising from or are connected with, an agrarian dispute;
(9) Develop, maintain and coordinate para-legal services for agrarian reform clientele;
(10) Advise and assist the Office of the Secretary and field offices in agrarian legal matters;
(11) Conduct a continuing follow-up and evaluation of the handling and disposition of judicial cases,
claims and conflicts adjudication, legal information and para-legal services of the Department; and
(12) Perform such other functions and duties as may be provided by law.
Section 14. Bureau of Land Development. - The Bureau shall have the following functions:
(1) Draw up plans and programs of land surveys and determine which land survey projects can be
done by administration or by contract;
(2) Develop and prescribe procedures and techniques on land surveys in accordance with approved
standards;
(3) Develop plans and programs, guidelines, procedures and techniques for soil surveys and
classification and for complete aerial photogrammetry;
(4) Analyze and compile soil data and survey reports essential for the production of soil maps and
identify particular areas for soil research;
(5) Develop land use patterns, procedures and compile adequate maps for proper land use;
(6) Draw up plans, programs and designs for agricultural development under the scheme of land
consolidation;
(7) Formulate policies, guidelines and procedures for the regulation of conversion of private agricultural
lands to non-agricultural use, in accordance with the provisions of existing laws, as amended, and other
related issuances;
(8) Establish a schedule of priorities in the construction of houses, waterworks, irrigations systems and
other community facilities;
(9) Formulate policies and guidelines in the procurement, maintenance or rehabilitation of agricultural
machinery and equipment, and review, and evaluate plans, programs, specifications, and cost
estimates of land development projects;
(10) Provide functional and technical assistance on the implementation of land development;
(11) Monitor and evaluate activities of field offices on land development; and
(12) Perform such other functions as may be provided by law.
Section 15. Bureau of Land Tenure Development. - The Bureau shall have the following functions:
(1) Develop policies, plans and programs, and standard operating procedures in the acquisition and
distribution of public and private agricultural lands, including measures to ensure that the lands
distributed by the government to the beneficiaries of the agrarian reform program shall be subsequently
transferred or sold only to qualified tenant-tillers, agricultural workers and other landless citizens;
(2) Design socio-economic survey plans and prescribe standards, guidelines and procedures in the
conduct of such surveys in areas sought to be acquired or administered by the Department of Agrarian
Reform;
(3) Develop standards for the valuation of lands placed under the agrarian reform program and
formulate appropriate land compensation schemes for affected landowners;
(4) Formulate, general policies and guidelines in the identification of tillers and agricultural lands to be
purchased or expropriated, subject of petitions or applications for the exercise of the right of pre-
emption or redemption, or voluntarily offered for coverage under the agrarian reform program, and
portions of the public domain which may be opened for settlement;
(5) Maintain a current inventory of tillers, landowners, land-holdings, including crops and production
thereon, and other related records;
(6) Streamline procedures governing the titling of lands transferred to the beneficiaries of agrarian
reform and the documentation of leasehold and other tenurial arrangements;
(7) Develop alternative tenurial or working arrangements or relationships in agrarian reform areas aimed
at ensuring security of tenure and equitable distribution of income;
(8) Formulate policies, guidelines, standards, procedures and programs in the development and
conduct of land tenure research;
(9) Identify areas of research relevant to land tenure, determine priority needs, and prepare land tenure
research designs/proposals;
(10) Undertake operational research and evaluation studies on land tenure programs and projects;
(11) Monitor research findings on land tenure and other related studies by various research agencies;
(12) Review and evaluate documents for the generation, registration, and issuance of Emancipation
Patents/Title, land valuation, and landowners compensation claims as to its completeness, accuracy
and validity;
(13) Initiate verification and/or investigation of questionable or inconsistent documents as well as data
or information critical for expeditious disposition of land transactions by authorities concerned; and
(14) Perform such other functions as may be provided by law.
Section 16. Bureau of Agrarian Reform Information Education. - The Bureau shall have the following functions:
(1) Provide policy guidance and develop plans and programs for effective and continuing information,
education and promotional activities of the Department;
(2) Develop, conduct, assist and coordinate training and education programs to increase farmer, DAR
and other governmental personnel participation in program implementation;
(3) Coordinate or implement linkage training or education programs and projects;
(4) Integrate agrarian reform concepts into all levels of the national education system;
(5) Develop appropriate communication materials or aids to support agrarian reform promotion and
training;
(6) Produce and disseminate media materials to implement the information programs of the
Department;
(7) Maintain and update a library of materials on agrarian reform;
(8) Provide for the establishment of a center for agrarian reform studies;
(9) Provide functional and technical assistance on farmer education and public information;
(10) Coordinate and evaluate training programs and activities undertaken by the regional offices and
other units of the Department; and
(11) Perform such other functions as may be provided by law.
Section 17. Bureau of Agrarian Reform Beneficiaries Development. - The Bureau shall have the following
functions:
(1) Formulate plans, programs, policies and guidelines for the development of agrarian reform areas
into viable agro-industrial estates, the promotion of cooperative systems of production, processing,
marketing, distribution, credit and services;
(2) Formulate policies, programs and guidelines for the development and management of resettlement
areas and landed estates;
(3) Promote the organization and participation of agrarian reform beneficiaries to enhance the dignity
and welfare of the beneficiaries and to serve as sources of development information inputs and
feedback as basis for policy formulation;
(4) Serve as liaison between the DAR and the legitimate organizations of agrarian reform beneficiaries
and serve as receiving zone for request and proposals from legitimately organized agrarian reform
beneficiaries associations for appropriate action by any of the Bureaus or Services;
(5) Develop and undertake research and pilot studies of alternative land tenure systems such as agro-
industrial estates, cooperative farming and other cooperative-cultivatorship schemes;
(6) Develop project models such as but not limited to compact farms, and other income generating
projects, and undertake research and pilot studies on these models and other innovative schemes in
coordination with field offices;
(7) Establish linkages with concerned agencies for farm support services and to ensure immediate and
effective project implementation;
(8) Provide functional and technical assistance on development and management of resettlement
areas and landed estates, organization of agrarian reform beneficiaries and implementation of
economic projects;
(10) Perform such other functions as may be provided by law.
CHAPTER 5
REGIONAL AND DISTRICT OFFICES AND ATTACHED AGENCIES
Section 18. Regional Office. - The Regional Office shall be responsible for supporting the field units and
supervising program implementation of the Department within the region. It shall:
(1) Implement laws, policies, plans, rules and regulations of the Department in the regional area;
(2) Develop and implement a regional personnel management program;
(3) Prepare, submit, execute and control the budget for the region;
(4) Prepare and properly maintain books of accounts;
(5) Pay salaries and wages and other approved vouchers;
(6) Provide administrative services to the regional and provincial offices;
(7) Prepare and submit plans and programs for the region on:
a. land tenure development
b. information and education
c. land use management and land development
d. legal services
e. agrarian reform beneficiaries development
(8) Provide technical assistance to the provincial offices and agrarian reform teams in the
implementation of approved plans and programs;
(9) Extend effective legal assistance, advice or service to agrarian reform beneficiaries;
(10) Conduct operations research and evaluation of agrarian reform program implementation within
the region;
(11) Coordinate with other government and private agencies and farmer organizations at the Regional
level through the Agrarian Reform Coordinating Council, to carry out programs/projects for the general
welfare of the agrarian reform beneficiaries;
(12) Coordinate para-legal services;
(13) Maintain a data-based information system in coordination with the established monitoring system;
(14) Review documents submitted by the Provincial and Team Offices or by the clientele;
(15) Submit periodic feedback and recommend policy changes and/or modification of procedures on
program implementation; and
(16) Perform such other functions as may be necessary in the service of the clientele.
Section 19. Provincial Offices. - The Agrarian Reform Provincial Office is responsible for the direction and
coordination of the operation and activities of the Agrarian Reform Teams operating within the province and
has the following functions:
(1) Set priorities, specific targets, schedules and deadlines for the execution of approved plans,
programs and projects on:
a. land acquisition, distribution, transfer of land ownership to actual tillers, including land tiller-
landowners identification, tenurial security and leasehold arrangements, land surveys, land
valuation and landowners compensation;
b. continuing information and education programs on agrarian reform;
c. organization and development of Agrarian Reform Beneficiaries Cooperatives and
institutionalizing farmers-government partnership in agrarian policy formulation and program
implementation;
d. landowner's compensation and diversion of landowner's capital to industrial development;
e. development and implementation of alternative land tenure systems such as cooperative
farming, agro-industrial estates and cooperative-cultivatorship schemes;
f. land use management;
g. compact farming, land consolidation, land reclamation, integrated farming systems, sloping
agricultural land technology, and other land conservation measures in agrarian reform covered
areas;
h. legal services to farmers covered by agrarian reform and resolution of agrarian conflicts and
land tenure problems;
(2) Provide administrative services to the Agrarian Reform Teams within the province;
(3) Provide legal services to agrarian reform beneficiaries in cases arising from or are connected with
agrarian disputes, handling of expropriation proceedings, registering cooperatives organized by
Agrarian Reform Teams and reviewing and acting on all matters initially investigated and elevated by
Agrarian Reform Teams;
(4) Provide technical assistance to the Agrarian Reform Teams in the implementation of approved plans
and programs;
(5) Coordinate with government, private agencies and farmer organizations at the provincial level to
carry out programs;
(6) Conduct periodic performance audit surveys in collaboration with the regional office, and monitor
agrarian reform program accomplishments of Agrarian Reform Teams including operational problems
and constraints and recommend appropriate remedial measures for effective program
implementation; and
(7) Perform such other functions as may be necessary in the service of the clientele.
Section 20. Team Offices. - The Agrarian Reform Team shall be responsible for directly implementing the
agrarian reform programs and delivering expected results. It shall:
(1) Implement policies and programs on land acquisition, and distribution, and transfer of landownership
to actual tillers, including farmer-landowner's identification, leasehold arrangements, land valuation and
landowners compensation and transfer actions;
(2) Undertake continuing information and education programs on agrarian reform among the
beneficiaries;
(3) Promote the organization and development of agrarian reform beneficiaries and assist in the
registration of organized cooperatives;
(4) Institutionalize farmers participation in agrarian reform policy formulation and program
implementation;
(5) Organize and establish compact farms, land consolidation, integrated farm systems, sloping
agricultural land technology and other cooperative-cultivatorship schemes;
(6) Provide assistance in agrarian reform research;
(7) Provide assistance to various legal services, including legal information and legal counselling,
documentation and preliminary processing of applications for free patent and applications to purchase
lots, preliminary investigation of conflicting claims on lot boundaries and appraisal of properties, and
mediation of different problems arising from tenancy relationship, execution and registration of lease
contracts, initial investigation of administrative cases, and other legal services;
(8) Provide assistance on project identification, formulation and development that would uplift the
socio-economic status of the beneficiaries including projects that would divert landlord capital to
industrial development;
(9) Coordinate with other government and private agencies and farmer organizations within the area
of coverage for effective program/project implementation;
(10) Submit periodic reports on program/project accomplishments including problems identified and
recommended solutions thereto;
(11) Implement DAR commitment programs supportive of national priority programs; and
(12) Perform such other functions as may be assigned from time to time.
Section 21. Attached Agencies. - The following agencies are attached to the Department for administrative
supervision and policy coordination:
(1) Land Bank of the Philippines
(2) Agricultural Credit Administration
(3) Agrarian Reform Coordinating Council
Title XII
LOCAL GOVERNMENT
CHAPTER 1
GENERAL PROVISIONS
Section 1. Declaration of Policy. - The State shall ensure the autonomy of local governments. For this purpose, it
shall provide for a more responsive and accountable local government structure instituted through a system of
decentralization. The allocation of powers and resources to local government units shall be promoted, and
inter-local government grouping, consolidation and coordination of resources shall be encouraged. The State
shall guarantee the local government units their just share in national taxes and their equitable share in
proceeds from the use of natural resources, and afford them a wider latitude for resources generation.
Section 2. Mandate. - The Department shall assist the President in the exercise of general supervision over local
governments and in ensuring autonomy, decentralization and community empowerment.
Section 3. Powers and Functions. - To accomplish its mandate, the Department shall:
(1) Advise the President on the promulgation of policies, rules, regulations and other issuances relative to
the general supervision of local government units;
(2) Establish and prescribe rules, regulations and other issuances and implementing laws on the general
supervision of local government units and on the promotion of local autonomy and monitor
compliance thereof by said units;
(3) Provide assistance in the preparation of national legislation affecting local government units;
(4) Establish and prescribe plans, policies, programs and projects to strengthen the administrative,
technical and fiscal capabilities of local government offices and personnel;
(5) Formulate and implement policies, plans, programs and projects to meet national and local
emergencies arising from natural and man-made disasters; and
(6) Perform such other functions as may be provided by law.
Section 4. Organization Structure. - The Department, shall be composed of the Office of the Secretary and the
staff and line offices which shall consist of the following:
(1) Bureau of Local Government Supervision;
(2) Bureau of Local Government Development;
(3) National Barangay Operations Office;
(4) Project Development Services;
(5) Department Services;
(6) Office of Public Affairs; and
(7) Regional and Field Offices.
CHAPTER 2
DEPARTMENT PROPER
Section 5. Office of the Secretary. - The Office of the Secretary shall consist of the Secretary and his immediate
staff.
Section 6. Undersecretaries and Assistant Secretaries. - The Secretary shall be assisted by not more than three
(3) Undersecretaries and three (3) Assistant Secretaries who shall be appointed by the President upon the
recommendation of the Secretary. The Secretary is hereby authorized to delineate and assign the respective
functional areas of responsibility of the Undersecretaries and Assistant Secretaries.
CHAPTER 3
DEPARTMENT SERVICES
Section 7. Planning Service. - The Planning Service shall be responsible for providing the Department with
efficient and effective services relating to planning, programming, research and statistics.
Section 8. Financial and Management Service. - The Financial and Management Service shall be responsible
for providing the Department with efficient and effective staff advise and assistance on budgetary, financial
and management improvement matters.
Section 9. Legal Service. - The Legal Service shall be responsible for providing the Department with efficient and
effective legal counselling services, assistance to the Secretary in the review or determination of subordinate
bodies or agencies, collaboration with Solicitor General in handling cases affecting the Department, and
investigation of administrative cases involving Department personnel and local officials;
Section 10. Administrative Service. - The Administrative Service shall be responsible for providing the Department
with efficient and effective services relative to personnel, information, records, supplies, equipment, collection,
disbursement, security and custodial work, and other kinds of services not related to the other services above
enumerated.
Section 11. Electronic Data Processing Service. - The Electronic Data Processing Service shall be responsible for
providing adequate and up-to-date data and management information inputs, including monitoring of all field
operations, to serve as basis for effective planning, management and control, policy formulation and decision-
making.
CHAPTER 4
BUREAUS AND OFFICES
Section 12. Bureau of Local Government Supervision. - The Bureau of Local Government Supervision, to be
headed by a Bureau Director appointed by the President upon the recommendation of the Secretary, shall
have the following functions:
(1) Advise and assist the Secretary in the exercise of the power of general supervision of the President
over local government units, particularly in the formulation and implementation of national laws,
policies, and standards concerning local government operations and their personnel;
(2) Establish and prescribe guidelines for the administration of the Katarungang Pambarangay Laws;
(3) Monitor compliance with national laws and policies by local government units;
(4) Provide assistance in the preparation of national legislation affecting local government units and in
the promotion of local autonomy;
(5) Extend consultation service and advice to local government units involved in promoting local
autonomy; and
(6) Provide assistance to local governments in the promotion of citizens participation in local
government activities;
(7) Provide technical and financial assistance, as well as secretariat services to the Leagues of
Provinces, Cities and Municipalities; and
(8) Perform such other functions as may be provided by law.
Section 13. Bureau of Local Government Development. - The Bureau of Local Government Development, to be
headed by a Bureau Director appointed by the President upon the recommendation of the Secretary shall
have the following functions:
(1) Establish and prescribe plans, policies, programs, and projects to strengthen the administrative and
technical capabilities of local government offices and personnel;
(2) Provide technical assistance to enhance the administrative, fiscal and technical capabilities of local
government officers and personnel;
(3) Formulate, prescribe and periodically evaluate local development policies, plans, programs and
projects designed to enhance the participation of local government units in planning and
implementation;
(4) Establish a system of incentives and grants to local governments and prescribe policies, procedures
and guidelines in the implementation of self-help assistance projects;
(5) Formulate and develop models, standards and technical materials on local government
development;
(6) Extend consultation service and advice to local government units involved in development
programs;
(6) Extend consultation service and advice to local government units involved in development
programs;
(7) Establish a viable system of strategies and approaches for local governments anchored on citizen
participation within a wholistic and integrated framework for the development of communities; and
(8) Perform such other functions as may be provided by law.
Section 14. Office of Public Affairs. - The Office of Public Affairs shall have the following functions:
(1) Provide technical assistance in the modernization and maintenance of a Department-wide micro-
telecommunica- tions systems;
(2) Provide mechanisms for the operationalization of the intent of the provisions of public information,
coverages and documentation of the activities of the Department;
(3) Perform functional supervision over regional information centers in providing the citizenry with
relevant information on the program of the Department and the Government's thrust towards the
participation of the citizens in the democratic processes;
(4) Formulate plans and programs to implement the administrative and technical capabilities of public
officers and personnel both on the central and regional levels;
(5) Establish and prescribe guidelines in the administration of Information and Public Assistance Services;
(6) Extend consultation services and advice in the implemen- tation of Regional Information Services;
(7) Assess information needs of the people through opinion polls and surveys;
(8) Provide assistance on various public programs of the Department;
(9) Establish and implement policies, plans, programs and projects to meet local emergencies arising
from natural and man-made disasters; and
(10) Perform such other duties and responsibilities and projects assigned or delegated by the Secretary
in the effective delivery of public services or as may be required by law.
Section 15. Local Government Academy. - The Local Government Academy shall be responsible for human
resource development and training of local government officials and Department personnel. The Academy
shall be under the direct supervision of a Board of Trustees composed of the Secretary of Local Government as
Chairman and four (4) other members to be appointed by the President upon recommendation of the
Secretary. The structure and staffing pattern of the Local Government Academy shall be prescribed and
approved by the Secretary.
Section 16. National Barangay Operations Office. - The National Barangay Operations Office which shall be
headed by a Director to be appointed by the President upon the recommendation of the Secretary, shall have
the following functions:
(1) Formulate policies, plans and programs that will promote community and citizen participation in the
political development of the barangay through the mobilization and participation of barangay
assemblies;
(2) Initiate projects on innovative barangay development strategies and approaches in close
coordination with the Bureau of Local Government Development;
(3) Provide secretariat services to the Association of Barangay Councils and serve as a clearing house
on matters affecting barangay officials' insurance, hospitalization, educational and other benefits as
provided by law;
(4) Provide continuing information dissemination to barangay units on national development efforts and
issues in order for barangay assembly members to participate meaningfully in national development;
(5) Establish and maintain masterlists of barangays, barangay officials and barangay socio-economic
profiles;
(6) Provide situational and political analysis for the Secretary on barangay affairs; and
(7) Perform other functions as may be delegated by the Secretary or as provided for by law.
Section 17. Office of Project Development Services. - The Office of Project Development Services shall have the
following functions:
(1) Formulate innovative approaches and strategies designed to promote technical capabilities of local
governments;
(2) Assist in the development of program components for the implementation of tested and
appropriate system and processes at the local level; and
(3) Perform other functions as may be delegated by the Secretary or as provided by law.
CHAPTER 5
REGIONAL AND FIELD OFFICES
Section 18. Regional and Field Offices. - The Secretary is authorized to establish, operate and maintain one
Regional Office in each of the administrative regions established by law. A Regional Office shall have, within its
administrative region, the following functions:
(1) Implement laws, rules, and regulations, other issuances, policies, plans, programs and projects of the
Department;
(2) Provide efficient and effective service to local government;
(3) Coordinate with regional offices of other departments, offices and agencies affecting local
administration and development;
(4) Assist local government units in developing their capabilities for local government administration and
development; and
(5) Perform such other functions as may be delegated by the Secretary or as provided by law.
CHAPTER 6
LEAGUES OF PROVINCES, CITIES AND MUNICIPALITIES
Section 19. Leagues of Provinces, Cities and Municipalities. - There is hereby created the Leagues of Provinces,
Cities and Municipalities.
The functions, budget and records of the Katipunan ng mga Sanggunian National Secretariat and the
Pambansang Katipunan ng mga Punong Bayan sa Pilipinas, shall be transferred to the Leagues of Provinces,
Cities and Municipalities. The Leagues shall be under the supervision of the Bureau of Local Government
Supervision.
The Secretary is hereby authorized to promulgate the necessary implementing rules that will activate these
Leagues.
Title XIII
TOURISM
CHAPTER 1
GENERAL PROVISIONS
Section 1. Declaration of Policy. - The State shall promote, encourage and develop tourism as a major national
activity in which private sector investment, effort and initiative are fostered and supported, and through which
socio-economic development may be accelerated, foreign exchange earned, international visitors offered the
opportunity to travel to the Philippines and appreciate its natural beauty, history and culture, and Filipinos
themselves enabled to see more of their country and imbued with greater pride in and commitment to the
nation.
Section 2. Mandate. - The Department of Tourism shall be the primary government agency charge with the
responsibility to encourage, promote and develop tourism as a major socio-economic activity to generate
foreign currency and employment and to spread the benefits of tourism to a wider segment of the population
with the support, assistance and cooperation of both the private and public sectors, and to assure the safe,
convenient, enjoyable stay and travel of the foreign and local tourists in the country.
Section 3. Powers and Functions. - The Department shall have the following powers and functions:
(1) Formulate policies, plans, programs and projects for the development of the tourism industry;
(2) Administer, coordinate and supervise all activities of the Government concerning tourism;
(3) Advise the President on the promulgation of laws relative to the policy, plans, programs and projects
designed to promote and develop the tourism industry;
(4) Effect the removal of unnecessary barriers to travel, the integration and simplification of travel
regulations as well as their efficient, fair and courteous enforcement to assure expeditious and
hospitable reception of all tourists and travelers;
(5) Represent the government in all such conferences and meetings concerning tourism and travel and
discharge such responsibilities of the government as may arise from treaties, agreements and other
commitments on tourism and travel to which it is signatory;
(6) Formulate standards for tourism-oriented establishments that will prescribe minimum levels of
operating quality and efficiency in order to ensure that facilities, personnel and services are maintained
in accordance with acceptable local and international norms in the operations of tourism-oriented
establishments;
(7) Approve the construction standards of accredited tourism-oriented establishments including hotels,
resorts, inns, motels and other related facilities and services and prescribe information reporting on the
purchase, sale or lease of the said establishments and facilities;
(8) Provide the protection, maintenance and preservation of historical, cultural and natural assets which
are tourist attractions with the appropriate government agencies or with the private sector or with the
owners of said assets or attractions;
(9) Undertake research studies and surveys for the continuing analysis of economic conditions and
trends relating to tourism and maintain a statistical data bank on the tourism industry;
(10) Design programs to encourage private-sector investment and participation in tourism activities and
projects;
(11) Set up and organize foreign field offices for the purpose of overseeing all marketing and
promotional activities and implementing programs of the Department;
(12) Arrange, whenever deemed appropriate, for the reclamation of any land adjacent to or adjoining
a tourist zone in coordination with appropriate government agencies;
(13) Delegate any specific powers and functions in favor of the regional offices to promote efficiency
and effectiveness in the delivery of public service;
(14) Enlist the aid, assistance and support of any and all government agencies, civil or military, in the
implementation of the provisions of laws pertaining to the Department or of its rules and regulations;
(15) Exercise such powers and functions as may be necessary, proper, or incidental to the attainment of
its mandate;
(16) Perform such other functions as may be provided by law.
Section 4. Organizational Structure. - The Department shall consist of the Department Proper, Department
Services, Bureaus and Offices, Regional and Foreign Offices.
The Department Proper shall consist of the Offices of the Secretary and Undersecretaries which shall be
responsible for the preparation and development of policies, plans, programs and projects of the Department.
CHAPTER 2
DEPARTMENT PROPER
Section 5. Office of the Secretary. - The Office of the Secretary shall consist of the Secretary and his immediate
staff.
Section 6. Undersecretaries. - The Secretary shall be assisted by four (4) Undersecretaries, namely:
(1) Undersecretary for Planning, Product Development and Coordination, who shall be responsible for the
Office of Tourism Development Planning, Office of Product Development and Office of Tourism Coordination;
(2) Undersecretary for Tourism Services and Regional Offices, who shall be responsible for the Office of Tourism
Standards and all Regional Offices;
(3) Undersecretary for Tourism Promotions, who shall be responsible for the Bureau of International Tourism
Promotion, Bureau of Domestic Tourism Promotion and Office of Tourism Information; and
(4) Undersecretary for Internal Services, who shall be responsible for the Financial and Management Service,
Administrative Service and Legal Service.
CHAPTER 3
DEPARTMENT SERVICES
Section 7. Department Service Character and Head. - The Department Services shall be essentially staff in
character, each of which shall be headed by a Service Chief. (1987), sec. 14)
Section 8. Financial and Management Service. - The Financial and Management Service shall provide the
Department with staff advice and assistance on budgetary, financial and management matters and shall
perform such other related functions as may be assigned or delegated to it by the Secretary.
Section 9. Administrative Service. - The Administrative Service shall provide the Department with staff advice
and assistance on personnel information, records, communications, supplies, equipment, collection,
disbursements, security, other custodial work and such other related duties and responsibilities as may be
assigned or delegated to it by the Secretary.
Section 10. Legal Service. - The Legal Service shall provide the Department with staff advice and assistance on
all legal matters affecting the Department and perform such other related functions as may be assigned or
delegated to it by the Secretary.
CHAPTER 4
BUREAUS AND OFFICES
Section 11. Bureau and Office Character and Head. - The Bureaus and Offices shall be essentially staff in
character, each of which shall be headed by a Staff Director.
Section 12. Bureau of Domestic Tourism Promotions and Information. - The Bureau of Domestic Tourism
Promotions and Information shall have the following functions:
(1) Organize and coordinate programs of public relations, promotions, and publicity; encourage
domestic tourism and encourage overseas visitors to travel throughout the Philippines;
(2) Design and provide support for dissemination of materials for publicity as tourist attractions in the
Philippines; promote educational and cultural tours to increase travel within the country;
(4) Plan promotional campaigns through advertising and publicity and coordinate promotional efforts
with the private sector through sales campaigns and information dissemination; and
(5) Organize special events for the promotion of local destinations.
Section 13. Bureau of International Tourism Promotions. - The Bureau of International Tourism promotions shall
have the following functions:
(1) Generate favorable publicity on the Philippines;
(2) Disseminate current information on the country and its tourist products;
(3) Provide support for the private sector in the promotional campaign;
(4) Organize special events to promote the country as a tourist destination;
(5) Gather market intelligence and research information on tourist markets through the Foreign Field
Offices;
(6) Monitor trends and developments in international tourism through the Foreign Field Offices;
(7) Organize, set up and participate in international meetings, conferences and conventions on tourism;
and
(8) Supervise foreign field offices charged with coordinating and assisting in the marketing and
promotional activities and programs of the Department.
Section 14. Office of Tourism Information. - The Office of Tourism Information shall have the following functions:
(1) Promote a continuing wholesome and informative relationship between the Department and the
travelling public;
(2) Cause the widest publicity of existing and forthcoming activities and programs of the Department
through a functional relationship with the media; and
(3) Organize and disseminate promotional and tourist information materials to various tourist assistance
centers.
Section 15. Office of Tourism Standards. - The Office of Tourism Standards shall have the following functions:
(1) Approve the construction standards of tourism-oriented establishments including hotels, resorts, inns,
motels, and other related facilities and services, prescribe information reporting on purchase, sale or
lease of accredited tourism-oriented facilities and ensure a harmonious, positive and constructive
development of the tourism, industry;
(2) Formulate operating standards for tourism-oriented establishments including hotels and resorts,
restaurants, inns, motels, and other related facilities and services, that will prescribe minimum levels of
operating quality and efficiency in order to ensure that facilities, personnel and services are maintained
in accordance with acceptable local and international norms in the operations of tourism-oriented
establishments;
(3) Regulate and issue licenses to qualified travel agencies in accordance with the rules and regulations
promulgated by the Secretary;
(4) Encourage formation of industry associations for accreditations by the Department;
(5) Assist in auditioning Filipino entertainers in order to project properly and enhance the Filipino image
in the entertainment field and thereby gain better international respect and reputation; and
(6) Coordinate with all agencies concerned on the enforcement of rules and regulations promulgated
by the Department.
Section 16. Office of Tourism Development Planning. - The Office of Tourism Development Planning shall have
the following functions:
(1) Formulate plans and policies for the development of the tourism industry, including but not limited to
national tourism plans and the identification of master physical plans for tourism zones within the
country;
(2) Monitor and evaluate plans, programs and projects of the Department to ensure their effective
implementation;
(3) Undertake research studies and surveys for the continuing analysis of the tourism industry;
(4) Compile and integrate statistical data on the tourism industry and publish the same;
(5) Coordinate and assist in the implementation of tourism-oriented projects, plans or operations of local
governments, governmental agencies, public corporations, and where clearly necessary and feasible,
those of private entities so as to make possible the accelerated and balanced growth and
development of tourism in the Philippines which is responsible to the needs of targetted travel markets,
domestic and foreign, and beneficial to a greater number of Filipino communities;
(6) Analyze specific geographical areas with potential tourism value leading to the preparation of a
national tourism development plan which will establish the order of priority for the development plan of
tourist zone;
(7) Formulate a government plan for each zone in coordination with other government agencies and
local government units exercising political jurisdiction over the area, provided, that the plan of the zone
to be developed shall cover specifically those aspects pertaining to tourisms; provided further, that the
tourism development plan is fully coordinated and integrated with other sectoral plans for the area;
and
(8) Coordinate with appropriate local government units and other government agencies to assist in
formulating and implementing zone regulations, including building codes, hotel standards and such
other restrictions as may be necessary within a tourist zone to control its orderly development; preserve
such historical, cultural or natural assets or relics giving the zone its tourism value and significance; and
assure adherence to approved zone development plans;
(9) Ensure through proper coordination with appropriate government agencies and local private
agencies the social growth of the community within a tourist zone; carefully control possible negative
social impact brought about by tourism development.
Section 17. Office of Product Development. - The Office of Product Development shall have the following
functions:
(1) Develop and conceptualize new products which can lead to the enhancement of tourist sites and
facilities;
(2) Undertake pilot tests for testing the viability and acceptability of new tourism-related products and
programs; and
(3) Encourage and promote joint undertakings with the private sector of new tourism-related products
and programs.
Section 18. Office of Tourism Coordination. - The Office of Tourism Coordination shall have the following
functions:
(1) Initiate and coordinate with all sectors, both government and private, the development of the
national tourism plans and policies;
(2) Coordinate priority activities and projects of the Department, and other government agencies, and
the private sector;
(3) Enlist the assistance and support of any or all of the government agencies in the implementation of
the policies of the Department; and
(4) Provide support to all tourism-related activities of the private sector needing government assistance.
CHAPTER 5
FOREIGN AND REGIONAL OFFICES
Section 19. Foreign Field Offices. - Subject to the approval of the President, the Department shall have foreign
offices as may be necessary in the marketing and promotion of the Philippines as an international tourist
destination, which shall oversee and implement the marketing and promotional programs of the Department.
Section 20. Regional Office. - The Department is authorized to establish, operate and maintain a Regional
Office in each of the administrative regions of the country, under the immediate supervision of the Assistant
Secretary for Tourism Services and Regional Offices. A Regional Office shall be headed by a Regional Director
and shall, within its administrative region, have the following functions:
(1) Implement laws, policies, plans, programs, rules and regulations of the Department;
(2) Provide economical, efficient and effective service to the people;
(3) Coordinate with regional offices of other departments, bureaus, and agencies;
(4) Coordinate with local government units; and
(5) Perform such other functions as may be provided by law.
CHAPTER 6
ATTACHED AGENCIES
Section 21. Attached Agencies. - The Philippine Tourism Authority, and Philippine Convention Bureau, Intramuros
Administration, and National Parks Development Committee are hereby attached to the Department and shall
continue to operate and function in accordance with the respective charters/laws/orders provided in this
Code.
Title XIV
ENVIRONMENT AND NATURAL RESOURCES
CHAPTER 1
GENERAL PROVISIONS
Section 1. Declaration of Policy. -
(1) The State shall ensure, for the benefit of the Filipino people, the full exploration and development as
well as the judicious disposition, utilization, management, renewal and conservation of the country's
forest, mineral, land, waters, fisheries, wildlife, off-shore areas and other natural resources, consistent with
the necessity of maintaining a sound ecological balance and protecting and enhancing the quality of
the environment and the objective of making the exploration, development and utilization of such
natural resources equitably accessible to the different segments of the present as well as future
generations.
(2) The State shall likewise recognize and apply a true value system that takes into account social and
environmental cost implications relative to the utilization, development and conservation of our natural
resources.
Section 2. Mandate. -
(1) The Department of Environment and Natural Resources shall be primarily responsible for the
implementation of the foregoing policy.
(2) It shall, subject to law and higher authority, be in charge of carrying out the State's constitutional
mandate to control and supervise the exploration, development, utilization, and conservation of the
country's natural resources.
Section 3. Guidelines for Implementation. - In the discharge of its responsibility the Department shall be guided
by the following objectives:
(1) Assure the availability and sustainability of the country's natural resources through judicious use and
systematic restoration or replacement, whenever possible;
(2) Increase the productivity of natural resources in order to meet the demands for the products from
forest, mineral, land and water resources of a growing population;
(3) Enhance the contribution of natural resources for achieving national economic and social
development;
(4) Promote equitable access to natural resources by the different sectors of the population; and
(5) Conserve specific terrestrial and marine areas representative of the Philippine natural and cultural
heritage for present and future generations.
Section 4. Powers and Functions. - The Department shall:
(1) Advise the President and the Congress on the enactment of laws relative to the exploration,
development, use, regulation and conservation of the country's natural resources and the control of
pollution;
(2) Formulate, implement and supervise the implementation of the government's policies, plans and
programs pertaining to the management, conservation, development, use and replenishment of the
country's natural resources;
(3) Promulgate rules and regulations in accordance with law governing the exploration, development,
conservation, extraction, disposition, use and such other commercial activities tending to cause the
depletion and degradation of our natural resources;
(4) Exercise supervision and control over forest lands, alienable and disposable public lands, mineral
resources and, in the process of exercising such control, impose appropriate taxes, fees, charges, rentals
and any such form of levy and collect such revenues for the exploration, development, utilization or
gathering of such resources;
(5) Undertake the exploration, assessment, classification and inventory of the country's natural
resources, using ground surveys, remote sensing and complementary technologies;
(6) Promote proper and mutual consultation with the private sector on matters involving natural
resources exploration, development, use and conservation;
(7) Undertake geological surveys of the whole country including its territorial waters;
(8) Issue licenses and permits for activities related to the use and development of aquatic resources,
treasure hunting, salvaging of sunken vessels and other similar activities:
(9) Establish policies and implement programs for the:
(a) Accelerated inventory, survey and classification of lands, forest and mineral resources, using
appropriate technology, to be able to come up with a more accurate assessment of resource
quality and quantity;
(b) Equitable distribution of natural resources through the judicious administration, regulation,
utilization, development and conservation of public lands, forest, water and mineral resources
(including mineral reservation areas), that would benefit a greater number of Filipinos;
(c) Promotion, development and expansion of natural resource-based industries;
(d) Preservation of cultural and natural heritage through wildlife conservation and segregation
of national parks and other protected areas;
(e) Maintenance of a wholesome natural environment by enforcing environmental protection
laws; and
(f) Encouragement of greater people participation and private initiative in rural resource
management;
(10) Promulgate rules and regulations necessary to:
(a) Accelerate cadastral and emancipation patent surveys, land use planning and public land
titling:
(b) Harness forest resources in a sustainable manner, to assist rural development, support forest-
based industries, and provide raw materials to meet increasing demands, at the same time
keeping adequate reserves for environmental stability;
(c) Expedite mineral resources surveys, promote the production of metallic and non-metallic
minerals and encourage mineral marketing;
(d) Assure conservation and judicious and sustainable development of aquatic resources.
(11) Assess, review and provide direction to, in coordination with concerned government agencies,
energy research and development programs, including identification of sources of energy and
determination of their commercial feasibility for development;
(12) Regulate the development, disposition, extraction, exploration and use of the country's forest, land,
water and mineral resources;
(13) Assume responsibility for the assessment, development, protection, licensing and regulation as
provided for by law, where applicable, of all energy and natural resources; the regulation and
monitoring of service contractors, licensees, lessees, and permit for the extraction, exploration,
development and use of natural resources products; the implementation of programs and measures
with the end in view of promoting close collaboration between the government and the private sector;
the effective and efficient classification and subclassification of lands of the public domain; and the
enforcement of natural resources and environmental laws, rules and regulations;
(14) Promulgate rules, regulations and guidelines on the issuance of licenses, permits, concessions, lease
agreements and such other privileges concerning the development, exploration and utilization of the
country's marine, freshwater, and brackish water and over all aquatic resources of the country and shall
continue to oversee, supervise and police our natural resources; cancel or cause to cancel such
privileges upon failure, non-compliance or violations of any regulation, order, and for all other causes
which are in furtherance of the conservation of natural resources and supportive of the national interest;
(15) Exercise exclusive jurisdiction on the management and disposition of all lands of the public domain
and serve as the sole agency responsible for classification, sub-classification, surveying and titling of
lands in consultation with appropriate agencies;
(16) Implement measures for the regulation and supervision of the processing of forest products, grading
and inspection of lumber and other forest products and monitoring of the movement of timber and
other forest products;
(17) Promulgate rules and regulations for the control of water, air and land pollution;
(18) Promulgate ambient and effluent standards for water and air quality including the allowable levels
of other pollutants and radiations;
(19) Promulgate policies, rules and regulations for the conservation of the country's genetic resources
and biological diversity, and endangered habitats;
(20) Formulate an integrated, multi-sectoral, and multi-disciplinary National Conservation Strategy,
which will be presented to the Cabinet for the President's approval;
(21) Perform such other functions as may be provided by law.
Section 5. Organizational Structure. - The Department shall consist of the Department Proper, the Staff Offices,
the Staff Bureaus, and the Regional Offices, Provincial Offices and Community Offices.
CHAPTER 2
THE DEPARTMENT PROPER
Section 6. Composition. - The Department Proper shall be composed of the Office of the Secretary, the Offices
of the Undersecretaries and Assistant Secretaries, and the Public Affairs Office, Special Concerns Office, and
the Pollution Adjudication Board.
Section 7. Office of the Secretary. - The Office of the Secretary shall consist of the Secretary and his immediate
staff.
Section 8. The Secretary. - The Secretary shall:
(1) Advise the President on the promulgation of rules, regulations and other issuances relative to the
conservation, management, development and proper use of the country's natural resources;
(2) Establish policies and standards for the efficient and effective operations of the Department in
accordance with the programs of the government;
(3) Promulgate rules, regulations and other issuances necessary in carrying out the Department's
mandate, objectives, policies, plans, programs and projects.
(4) Exercise supervision and control over all functions and activities of the Department;
(5) Delegate authority for the performance of any administrative or substantive function to subordinate
officials of the Department; and
(6) Perform such other functions as may be provided by law or assigned by the President.
Section 9. Undersecretaries. - The Secretary shall be assisted by five (5) Undersecretaries upon the
recommendation of the Secretary. The Secretary is thereby authorized to delineate, assign and/or reassign the
respective functional areas of responsibility of each Undersecretary, Provided, That such responsibility shall be
with respect to the mandate and objectives of the Department; and Provided, further, That no Undersecretary
shall be assigned primarily administrative responsibilities. Within his functional area of responsibility, an
Undersecretary shall have the following functions:
(1) Advise the Secretary in the promulgation of Department orders, administrative orders and other
issuances, with respect to his area of responsibility;
(2) Exercise supervision and control over the offices, services, operating units and officers and
employees under his responsibility;
(3) Promulgate rules and regulations, consistent with Department policies, that will efficiently and
effectively govern the activities of units under his responsibility;
(4) Coordinate the functions and activities of the units under his responsibility with those of other units
under the responsibility of other Undersecretaries;
(5) Exercise such authority on substantive and administrative matters related to the functions and
activities of units under his responsibility to the extent granted by the Secretary through administrative
issuances; and
(6) Perform such other functions as may be provided by law or assigned by the Secretary.
Section 10. Assistant Secretaries. - The Secretary and the Undersecretaries shall, in the formulation,
management and implementation of natural resources laws, policies, plans and programs and projects, also
be assisted by seven (7) Assistant Secretaries who shall be responsible for the following: one (1) for Policy and
Planning Studies, one (1) for Foreign-Assisted and Special Projects, one (1) for Field Operations in Luzon, one (1)
for Field Operations in the Visayas, and one (1) for Field Operations in Mindanao, one (1) for Legal Affairs, and
one (1) for Management Services.
Section 11. Public Affairs Office. - The Public Affairs Office, under the Office of the Secretary, shall be headed
by a Director to be assisted by an Assistant Director, and shall serve as the public information arm of the
Department. It shall be responsible for disseminating information on natural resources development policies,
plans, programs and projects and respond to public queries related to the development and conservation of
natural resources.
Section 12. Special Concerns Office. - The Special Concerns Office, also under the Office of the Secretary, shall
be headed by a Director to be assisted by an Assistant Director, and shall be responsible for handling priority
areas or subjects identified by the Secretary which necessitate special and immediate attention.
Section 13. Pollution Adjudication Board. - The Pollution Adjudication Board, under the Office of the Secretary,
shall be composed of the Secretary as Chairman, two Undersecretaries as may be designated by the
Secretary, the Director of Environmental Management, and three others to be designated by the Secretary as
members. The Board shall assume the powers and functions of the Commission/Commissioners of the National
Pollution Control Commission with respect to the adjudication of pollution cases under Republic Act 3931 and
Presidential Decree 984, particularly with respect to Section 6 letters (e), (f), (g), (j), (k) and (p) of P.D. 984. The
Environmental Management Bureau shall serve as the Secretariat of the Board. These powers and functions
may be delegated to the regional officers of the Department in accordance with rules and regulations to be
promulgated by the Board.
CHAPTER 3
THE STAFF SECTORAL BUREAUS
Section 14. Forest Management Bureau. - The Forest Management Bureau shall be headed by a Director and
assisted by an Assistant Director, and shall integrate and absorb the powers of the Bureau of Forest
Development and the Wood Industry Development Authority which were abolished by Executive Order No.
131, except those line functions and powers thereof which are transferred to the regional field office.
It shall advise the Secretary on matters pertaining to forest development and conservation. As its primary
functions, it shall:
(1) Recommend policies and/or programs for the effective protection, development, occupancy,
management and conservation of forest lands and watersheds, including the grazing and mangrove
areas; reforestation and rehabilitation of critically denuded or degraded forest reservations,
improvement of water resource use and development, development of national parks, preservation of
wilderness areas, game refuges and wildlife sanctuaries, ancestral lands, wilderness areas and other
natural preserves, development of forest plantations, including rattan, bamboo, and other valuable
non-timber forest resources; and rationalization of the wood-based industries, regulation of the utilization
and exploitation of forest resources, including wildlife, to ensure continuous supply of forest and goods
and services;
(2) Advise the regional offices in the implementation of the above policies and/or programs;
(3) Develop plans, programs, operating standards and administrative measures to promote the Bureau's
objectives and functions;
(4) Assist in the monitoring and evaluation of forestry and watershed development projects to ensure
efficiency and effectiveness;
(5) Undertake studies on the economics of forestry and forest-based industries, including supply and
demand trends on the local, national and international levels, identifying investment problems and
opportunities in various areas; and
(6) Perform such other functions as may be provided by law or assigned by the Secretary.
Section 15. Lands Management Bureau. - The Lands Management Bureau, to be headed by Director and
assisted by an Assistant Director, shall absorb the functions and powers of the Bureau of Lands abolished by
Executive Order No. 131, except those line functions and powers thereof which are transferred to the regional
field offices.
It shall advise the Secretary on matters pertaining to rational management and disposition and shall have the
following functions:
(1) Recommend policies and programs for the efficient and effective administration, surveys,
management and disposition of alienable and disposable lands of the public domain and other lands
outside the responsibilities of other government agencies, such as reclaimed areas and other areas not
needed for or are not being utilized for the purposes for which they have been established;
(2) Advise the Regional Offices on the efficient and effective implementation of policies, programs and
projects for more effective public lands management;
(3) Assist in the monitoring and evaluation of land surveys, management and disposition of lands to
ensure efficiency and effectiveness thereof;
(4) Issue standards, guidelines, regulations and orders to enforce policies for the maximization of land
use and development;
(5) Develop operating standards and procedures to promote the Bureau's objectives and functions;
and
(6) Perform such other functions as may be provided by law or assigned by the Secretary.
Section 16. Mines and Geo-Sciences Bureau. - The Mines and Geo-Sciences Bureau, to be headed by a
Director and assisted by an Assistant Director shall absorb the functions of the Bureau of Mines and Geo-
Sciences, Mineral Reservation Development Board, and the Gold Mining Development Board which were
abolished by Executive Order No. 131, except line functions and powers thereof which are transferred to the
regional field offices.
It shall advise the Secretary on matters pertaining to geology and mineral resources exploration, development,
utilization and conservation and shall:
(1) Recommend policies, regulations or programs pertaining to mineral resources development and
geology;
(2) Advise the Secretary on the granting of mining rights and contracts over areas containing metallic
and non-metallic mineral resources;
(3) Advise the Regional Offices on the effective implementation of mineral development and
conservation programs as well as geological surveys;
(4) Recommend policies, regulations and oversee the development and exploitation of mineral
resources of the sea within the country's jurisdiction such as silica sand, gold placer, magnetic and
chromite sand, etc;
(5) Assist in the monitoring and evaluation of the Bureau's programs and projects to ensure efficiency
and effectiveness thereof;
(6) Develop and promulgate standards and operating procedures on mineral resources development
and geology;
(7) Supervise and control the development and packaging of nationally applicable technologies on
geological survey, mineral resource assessment, mining and metallurgy; the provision of geological,
metallurgical, chemical and rock mechanics laboratory services; the conduct of marine geological and
geophysical survey and natural exploration drilling programs; and
(8) Perform such other functions as may be provided by law or assigned by the Secretary.
Section 17. Environmental Management Bureau. - The Environmental Management Bureau, to be headed by a
Director who shall be assisted by an Assistant Director shall, subject to the provisions of this Code relative to the
Pollution Adjudication Board, absorb and integrate the powers and functions of the National Environmental
Protection Council, the National Pollution Control Commission, and the Environmental Center of the Philippines
which are hereby abolished.
It shall advise the Secretary on matters relating to environmental management, conservation, and pollution
control, and shall:
(1) Recommend possible legislation, policies and programs for environmental management and
pollution control;
(2) Advise the Regional Offices in the efficient and effective implementation of policies, programs, and
projects for the effective and efficient environmental management and pollution control;
(3) Formulate environmental quality standards such as the quality standards for water, air, land, noise
and radiations;
(4) Recommend rules and regulation for environmental impact assessments and provide technical
assistance for their implementation and monitoring;
(5) Formulate rules and regulations for the proper disposition of solid wastes, toxic and hazardous
substances;
(6) Advise the Secretary on the legal aspects of environmental management and pollution control and
assist in the conduct of public hearings in pollution cases;
(7) Provide secretariat assistance to the Pollution Adjudication Board;
(8) Coordinate the inter-agency committees that may be created for the preparation of the State of
the Philippine Environment Report and the National Conservation Strategy;
(9) Provide assistance to the Regional Office in the formulation and dissemination of information on
environmental and pollution matters to the general public;
(10) Assist the Secretary and the Regional Officers by providing technical assistance in the
implementation of environmental and pollution laws; and
(11) Provide scientific assistance to the Regional Offices in the conduct of environmental research
programs.
Section 18. Ecosystems Research and Development Bureau. - The Ecosystems Research and Development
Bureau, to be headed by a Director and assisted by an Assistant Director, shall absorb the powers and
functions of the Forest Research Institute and the National Mangrove Committee, which are hereby abolished.
It shall:
(1) Formulate and recommend an integrated research program relating to Philippine ecosystems and
natural resources such as minerals, lands, forests, as holistic and interdisciplinary fields of inquiry;
(2) Assist the Secretary in determining a system of priorities for the allocation of resources to various
technological research programs of the department;
(3) Provide technical assistance in the implementation and monitoring of the aforementioned research
programs;
(4) Generate technologies and provide scientific assistance in the research and development of
technologies relevant to the sustainable uses of Philippine ecosystems and natural resources; and
(5) Assist the Secretary in the evaluation of the effectiveness of the implementation of the integrated
research programs.
The Ecosystems Research and Development Bureau shall directly manage and administer the Forest Research
Institute Research Offices, laboratories, and forest experiment stations located at UP Los Baños and such other
field laboratories as the Secretary may assign to its direct supervision. The Bureau shall coordinate all
technological researches undertaken by the field offices, assess and translate all recommendable findings and
disseminate such findings for all possible users and clientele.
Section 19. Protected Areas and Wildlife Bureau. - The Protected Areas and Wildlife Bureau, to be headed by a
Director and assisted by an Assistant Director, shall absorb the Division of Parks and Wildlife and the Marine
Parks Program of the Bureau of Forest Development as well as the Calauit Game Preserve and Wildlife
Sanctuary, Presidential Committee on the Conservation of Tamaraw, Ninoy Aquino Parks and Wildlife Center
(formerly Parks and Wildlife Nature Center), shares in Kabuhayan Program and Agro Forestry State Projects of
the KKK Processing Authority, all national parks, wildlife sanctuaries and game preserves previously managed
and administered by the Ministry of Human Settlement including National Parks Reservation situated in the
provinces of Bulacan, Rizal, Laguna and Quezon formerly declared as Bagong Lipunan Sites of said Ministry,
Magat Forest Reservation and Mt. Arayat National Park, formerly with the Ministry of Tourism.
The Bureau shall:
(1) Formulate and recommend policies, guidelines, rules and regulations for the establishment and
management of an Integrated Protected Areas Systems such as national parks, wildlife sanctuaries and
refuge, marine parks, and biospheric reserves;
(2) Formulate and recommend policies, guidelines, rules and regulations for the preservation of
biological diversity, genetic resources, the endangered Philippine flora and fauna;
(3) Prepare an up-to-date listing of endangered Philippine flora and fauna and recommend a program
of conservation and propagation of the same;
(4) Assist the Secretary in the monitoring and assessment of the management of the Integrated
Protected Areas System and provide technical assistance to the Regional Offices in the implementation
of programs for these areas; and
(5) Perform such other functions as may be provided by law or assigned by the Secretary.
CHAPTER 4
THE DEPARTMENT FIELD OFFICES
Section 20. Field Offices of the Department. - The Field offices of the Department are the Environmental and
Natural Resources Regional Offices in the thirteen (13) administrative regions of the country; the Environment
and Natural Resources Provincial Office in every province, and the Community Office in every municipality,
whenever deemed necessary.
Section 21. Environment and Natural Resources Regional Office. - A Regional Office shall be directly under the
supervision and control of the Undersecretary for Field Operations and shall be headed by a Regional
Executive Director (with the rank of Regional Director) who shall be assisted by five (5) Assistant Regional
Technical Directors, (with the rank of Assistant Regional Director), one (1) each for Forestry, for Lands
Management, for Mines and Geo-Sciences, Environmental Management and Ecosystems Research,
respectively, and who shall be Career Executive Service Officers.
An Environment and Natural Resources Regional Office shall be located in the identified regional capital and
shall have the following functions:
(1) Implement laws, policies, plans, programs, projects, and rules and regulations of the Department to
promote the sustainability and productivity of natural resources, social equity in natural resource
utilization and environmental protection;
(2) Provide efficient and effective delivery of services to the people;
(3) Coordinate with regional offices of other departments, offices, agencies in the region and local
government units in the enforcement of natural resource conservation laws and regulations, and in the
formulation/implementation of natural resource programs and projects;
(4) Recommend and, upon approval, implement programs and projects on forestry, minerals, and land
management and disposition;
(5) Conduct a comprehensive inventory of natural resources in the region and formulate regional short
and long-term development plans for the conservation, utilization and replacement of natural
resources;
(6) Evolve respective regional budget in conformity with the priorities established by the Regional
Development Councils;
(7) Supervise the processing of natural resources products, grade and inspect minerals, lumber and
other wood processed products, and monitor the movement of these products;
(8) Conduct field researches for appropriate technologies recommended for various projects; and
(9) Perform such other functions as may be provided by law or assigned by the Secretary.
Section 22. Provincial and Community Offices. - The Natural resources provincial and community offices shall
each be headed by a provincial natural resource officer and community natural resource officer, respectively.
They shall take over the functions of the district offices of the former Bureau of Forest Development, Bureau of
Lands, and Bureau of Mines and Geo-Sciences.
CHAPTER 5
ATTACHED AGENCIES AND CORPORATIONS
Section 23. Attached Agencies and Corporations. - The following agencies and corporations shall be attached
to and under the administrative supervision of the Department:
(1) National Mapping and Research Information Authority;
(2) National Electrification Administration; and
(3) National Resources Development Corporation.
The agencies attached to the Department shall continue to operate and function in accordance with the
respective laws creating them, except as otherwise provided in this Code.
Title XV
TRANSPORTATION AND COMMUNICATIONS
CHAPTER 1
GENERAL PROVISIONS
Section 1. Declaration of Policy. - The State is committed to the maintenance and expansion of viable, efficient,
fast, safe and dependable transportation and communications systems as effective instruments for national
recovery and economic progress. It shall not compete as a matter of policy with private enterprise and shall
operate transportation and communications facilities only in those areas where private initiatives are
inadequate or non-existent.
Section 2. Mandate. - The Department of Transportation and Communications shall be the primary policy,
planning, programming, coordinating, implementing, regulating and administrative entity of the Executive
Branch of the government in the promotion, development and regulation of dependable and coordinated
networks of transportation and communications systems as well as in the fast, safe, efficient and reliable postal,
transportation and communications services.
Section 3. Powers and Functions.- To accomplish its mandate, the Department shall:
(1) Formulate and recommend national policies and guidelines for the preparation and implementation
of integrated and comprehensive transportation and communications systems at the national, regional
and local levels;
(2) Establish and administer comprehensive and integrated programs for transportation and
communications, and for this purpose, it may call on any agency, corporation or organization, whether
public or private, whose development programs include transportation and communications as integral
parts thereof, to participate and assist in the preparation and implementation of such programs;
(3) Assess, review and provide direction to transportation and communications research and
development programs of the government in coordination with other institutions concerned;
(4) Administer and enforce all laws, rules and regulations in the field of transportation and
communications;
(5) Coordinate with the Department of Public Works and Highways in the design, location,
development, rehabilitation, improvement, construction, maintenance and repair of all infrastructure
projects and facilities of the Department. However, government corporate entities attached to the
Department shall be authorized to undertake specialized telecommunications, ports, airports and
railways projects and facilities as directed by the President of the Philippines or as provided by law;
(6) Establish, operate and maintain a nationwide postal system that shall include mail processing,
delivery services and money order services and promote the art of philately;
(7) Issue certificates of public convenience for the operation of public land and rail transportation
utilities and services;
(8) Accredit foreign aircraft manufacturers or international organizations for aircraft certification in
accordance with established procedures and standards;
(9) Establish and prescribe rules and regulations for identification of routes, zones or areas of operation
of particular operators of public land services;
(10) Establish and prescribe rules and regulations for the establishment, operation and maintenance of
such telecommunications facilities in areas not adequately served by the private sector in order to
render such domestic and overseas services that are necessary with due consideration for advances in
technology;
(11) Establish and prescribe rules and regulations for the issuance of certificates of public convenience
for public land transportation utilities, such as motor vehicles, trimobiles and railways;
(12) Establish and prescribe rules and regulations for the inspection and registration of air and land
transportation facilities, such as motor vehicles, trimobiles, railways and aircraft;
(13) Establish and prescribe rules and regulations for the issuance of licenses to qualified motor vehicle
drivers, conductors and airmen;
(14) Establish and prescribe the corresponding rules and regulations for enforcement of laws governing
land transportation, air transportation and postal services, including the penalties for violations thereof,
and for the deputation of appropriate law enforcement agencies in pursuance thereof;
(15) Determine, fix or prescribe charges or rates pertinent to postal services and to the operation of
public air and land transportation utility facilities and services, except such rates or charges as may be
prescribed by the Civil Aeronautics Board under its charter and, in cases where charges or rates are
established by international bodies or associations of which the Philippines is a participating member or
by bodies or associations recognized by the Philippine government as the proper arbiter of such
charges or rates;
(16) Establish and prescribe the rules, regulations, procedures and standards for the accreditation of
driving schools;
(17) Administer and operate the Civil Aviation Training Center (CATC) and the National
Telecommunications Training Institute (NTTI); and
(18) Perform such other powers and functions as may be provided by law.
Section 4. Organizational Structure. - The Department shall consist of the Department Proper, the Department
Regional Offices, the Land Transportation Franchising and Regulatory Board, and the Attached Agencies.
CHAPTER 2
DEPARTMENT PROPER
Section 5. Office of the Secretary. - The Office of the Secretary shall consist of the Secretary, his immediate staff,
the Franchising Review Staff and the Investigation, Security and Law Enforcement Staff.
The Franchising Review Staff shall be headed by a Review Staff Director with the same rank, salary and
privileges of a Department Regional Director who shall be appointed by the President upon the
recommendation of the Secretary. The Franchising Review Staff shall assist the Secretary in the review of cases
and matters pertaining to, among others, grants of franchises and the regulation thereof.
The Investigation, Security and Law Enforcement Staff shall be headed by a Staff Director with the same rank,
salary and privileges of a Department Service Chief. The Investigation, Security and Law Enforcement Staff shall
be responsible for: (a) providing security and intelligence for the Department; (b) coordinating security and
intelligence activities of security units of its offices and attached agencies; and (c) undertaking law
enforcement, functions and activities relating to land transportation.
Section 6. Undersecretaries. - The Secretary shall be assisted by four (4) Undersecretaries. Each Undersecretary
shall have control and supervision over the respective offices and services assigned to him by the Secretary.
Section 7. Assistant Secretaries. - The Secretary shall also be assisted by eight (8) Assistant Secretaries each of
whom shall be responsible for the four (4) staff offices and four (4) line offices. Each Assistant Secretary shall
report to the respective Undersecretary to whom he is assigned by the President.
Section 8. Staff Offices. - The Department shall have the following staff offices:
(1) The Office of the Assistant Secretary for Administrative and Legal Affairs composed of the
Administrative Service and the Legal Service;
(2) The Office of the Assistant Secretary for Finance and Comptrollership composed of the Finance and
Management Service and the Comptrollership Service;
(3) The Office of the Assistant Secretary for Planning and Project Development composed of the
Planning Service and the Project Development Service; and
(4) The Office of the Assistant Secretary for Management Information and Project Management
composed of the Management Information Service and the Project Management Service.
Section 9. Line Offices. - The Department shall have the following line offices:
(1) The Office of the Assistant Secretary for Land Transportation;
(2) The Office of the Assistant Secretary for Postal Services;
(3) The Office of the Assistant Secretary for Telecommunications; and
(4) The Office of the Assistant Secretary for Air Transportation.
The line offices shall each have an Executive Director who shall assist the respective Assistant Secretary in the
implementation and enforcement of the policies, programs and projects, and the pertinent laws on their
respective areas of responsibilities.
Section 10. Service Units in the Office of the Assistant Secretary for Land Transportation. - There shall be two
service units in the Office of the Assistant Secretary for Land Transportation, namely:
(1) Law Enforcement Service, and
(2) Traffic Adjudication Service.
Each of the aforesaid service units shall be headed by a Service Chief to be appointed by the President upon
recommendation of the Secretary of Transportation and Communication.
Section 11. Functions of the Law Enforcement Service. - The Law Enforcement Service shall have the same
functions and powers as those that the former Law Enforcement Division in the Office of the Assistant Secretary
for Land Transportation exercised.
Section 12. Functions of the Traffic Adjudication Service. - The Traffic Adjudication Service shall have the
following powers and functions:
(1) To hear and decide cases involving violations of laws, rules and regulations governing land
transportation and to impose fines and/or penalties therefor; provided that violations resulting in
damage to property and/or physical injuries or violations constituting offenses punishable under the
Revised Penal Code and other penal laws shall be under the jurisdiction of the regular courts;
(2) To order the impounding of motor vehicles and confiscation of plates or the arrest of violators of
laws, rules and regulations governing land transportation;
(3) To issue subpoena and subpoena duces tecum and to summon witnesses to appear in any
proceedings thereof, and to administer oaths and affirmations;
(4) To promulgate rules and regulations governing the proceedings before it; provided that except with
respect to paragraph c, the rules of procedure and evidence prevailing in the courts of law shall not be
controlling and all reasonable means to ascertain the facts in each case shall be used without regard
to technicalities of law and procedures but all in the interest of due process; and
(5) To perform such other functions and duties as may be provided by law, or as may be necessary, or
proper or incidental to its powers and functions.
CHAPTER 3
DEPARTMENT SERVICES
Section 13. Department Services. - The Department Services shall include the following:
(1) Administrative Service;
(2) Legal Service;
(3) Finance and Management Service;
(4) Comptrollership Service;
(5) Planning Service;
(6) Project Development Service;
(7) Management Information Service; and
(8) Project Management Service.
Each of the above named services shall be headed by a Service Chief appointed by the President upon the
recommendation of the Secretary.
CHAPTER 4
REGIONAL OFFICES
Section 14. Regional Offices. - The Department shall have three (3) Regional Offices in each of the
administrative regions of the country: the Regional Office for Land Transportation, the Regional Office for
Telecommunications and the Regional Office for Postal Services. Each Regional Office shall be headed by a
Regional Director to be assisted by an Assistant Regional Director.
The Regional Offices shall essentially be line in character and shall be responsible for the delivery of all front line
services of the Department.
For such purposes, the Regional Offices shall have, within their respective administrative regions, the following
functions:
(1) Implement laws, policies, plans, programs, projects, rules and regulations of the Department;
(2) Provide efficient and effective service to the people;
(3) Coordinate with regional offices of other departments, offices and agencies;
(4) Coordinate with local government units; and
(5) Perform such other functions as may be provided by law.
The Office of the Secretary shall have direct line supervision and control over Regional Offices.
CHAPTER 5
REGULATORY BOARD
Section 15. Land Transportation Franchising and Regulatory Board. - The quasi-judicial powers and functions
with respect to land transportation shall be exercised through the Land Transportation and Regulatory Board,
hereinafter referred to as the "Board".
Section 16. Composition of the Board. - The Board shall be composed of a Chairman and two (2) members with
the rank, salary and privileges of an Assistant Secretary, all of whom shall be appointed by the President of the
Philippines upon recommendation of the Secretary of Transportation and Communications. One (1) member of
the Board shall be a member of the Bar and shall have been engaged in the practice of law in the Philippines
for at least five (5) years, another a holder of a degree in civil engineering, and the other a holder of a degree
in economics, finance or management both with the same number of years of experience and practice.
Section 17. Executive Director and Support Staff of the Board. - The Board shall have an Executive Director who
shall also be appointed by the President of the Philippines upon the recommendation of the Secretary of
Transportation and Communications. He shall have the rank, salary and privileges of a Department Service
Chief. He shall assist the Board in the performance of its powers and functions.
The Board shall be supported by the Technical Evaluation Division, Legal Division, Management Information
Division, Administrative Division and Finance Division.
Section 18. Supervision and Control Over the Board. - The Secretary of Transportation and Communications,
through his duly designated Undersecretary, shall exercise administrative supervision and control over the Land
Transportation Franchising and Regulatory Board.
Section 19. Powers and Functions of the Land Transportation Franchising and Regulatory Board. - The Board
shall:
(1) Prescribe and regulate routes, economically viable capacities, and zones or areas of operation of
public land transportation services provided by motorized vehicles in accordance with the public land
transportation development plans and programs approved by the Department of Transportation and
Communications;
(2) Issue, amend, revise, suspend or cancel Certificates of Public Convenience or permits authorizing the
operation of public land transportation services provided by motorized vehicles, and prescribe the
appropriate terms and conditions therefor;
(3) Determine, prescribe, approve and periodically review and adjust reasonable fares, rates and other
related charges, relative to the operation of public land transportation services provided by motorized
vehicles;
(4) Issue preliminary or permanent injunctions, whether prohibitory or mandatory, in all cases in which it
has jurisdiction and in which cases the pertinent provisions of the Rules of Court shall apply;
(5) Punish for contempt of the Board, both direct and indirect, in accordance with the pertinent
provisions of, and the penalties prescribed by, the Rules of Court;
(6) Issue subpoena and subpoena duces tecum and to summon witnesses to appear in any
proceedings of the Board, to administer oaths and affirmations, and, in appropriate cases, to order the
search and seizure of all vehicles and documents, upon probable cause and as may be necessary for
the proper disposition of the cases before it;
(7) Conduct investigations and hearings of complaints for violation of the public service laws on land
transportation and of the Board's rules and regulations, orders, decisions or rulings and to impose fines or
penalties for such violations;
(8) Review motu propio the decisions/actions of the Regional Franchising and Regulatory Offices;
(9) Promulgate rules and regulations governing proceedings before the Board and the Regional
Franchising and Regulatory Office. However, except with respect to paragraphs 4, 5, 6, and 7 hereof,
the rules of procedure and evidence prevailing in the courts of law should not be controlling but rather
the spirit and intention of said rules. The Board and the Regional Franchising and Regulatory Offices shall
use every and all reasonable means to ascertain facts in each case speedily and objectively and
without regard to technicalities of law and procedures, all in the interest of due process;
(10) Fix, impose and collect, and periodically review and adjust, reasonable fees and other related
charges for services rendered;
(11) Formulate, promulgate, administer, implement and enforce rules and regulations on land
transportation public utilities, standards of measurements or design, and rules and regulations requiring
operators of any public land transportation service to equip, install and provide in their utilities and in
their stations such devices, equipment, facilities and operating procedures and techniques as may
promote safety, protection, comfort and convenience to persons and property in their charges as well
as the safety of persons and property within their areas of operation;
(12) Coordinate and cooperate with other government agencies and entities concerned with any
aspect involving public land transportation services with the end in view of effecting continuing
improvement of such services; and
(13) Perform such other functions and duties as may be provided by law, or as may be necessary, or
proper or incidental to the purposes and objectives of the Department;
Section 20. Decisions of the Board; Appeals therefrom or Review Thereof . - The Board, in the exercise of its
powers and functions, shall sit and render its decision en banc. Every such decision, order, or resolution of the
Board must bear the concurrence and signature of at least two (2) members thereof.
The decision, order or resolution of the Board shall be appealable to the Secretary within thirty (30) days from
receipt of the decision. However, the Secretary may motu propio review and decision or action of the Board
before the same becomes final.
Section 21. Regional Franchising and Regulatory Offices. - There shall be a Regional Franchising and Regulatory
Office in each of the administrative regions of the country which shall be headed by a Regional Director
having the rank, salary and privileges of a Department Assistant Regional Director. The Regional Franchising
and Regulatory Offices shall hear and decide uncontested applications/petitions for routes, within their
respective administrative regions but that applications/petitions for routes extending beyond their respective
territorial jurisdiction shall be heard and decided by the Board.
Section 22. Appeals. - The decisions, orders or resolutions of the Regional Franchising and Regulatory Offices
shall be appealable to the Board within thirty (30) days from receipt of the decision.
CHAPTER 6
ATTACHED AGENCIES
Section 23. Attached Agencies and Corporations. - The following agencies and corporations are attached to
the Department: The Philippine National Railways, the Maritime Industry Authority, the Philippine National Lines,
the Philippine Aerospace Development Corporation, the Metro Manila Transit Corporation, the Office of
Transport Cooperatives, the Philippine Ports Authority, the Philippine Merchant Marine Academy, the Toll
Regulatory Board, the Light Rail Transit Authority, the Transport Training Center, the Civil Aeronautics Board, the
National Telecommunications Commission and the Manila International Airport Authority.
Section 24. Functions of Attached Agencies and Corporations. - The Agencies attached to the Department
shall continue to operate and function in accordance with the respective charters or laws creating them,
except when they conflict with this Code.
Title XVI
SOCIAL WELFARE AND DEVELOPMENT
CHAPTER 1
GENERAL PROVISIONS
Section 1. Declaration of Policy. - The State is committed to the care, protection, and rehabilitation of
individuals, families and communities which have the least in life and need social welfare assistance and social
work intervention to restore their normal functioning and enable them to participate in community affairs.
Section 2. Mandate. - The Department shall provide a balanced approach to welfare whereby the needs and
interests of the population are addressed not only at the outbreak of crisis but more importantly at the stage
which would inexorably lead to such crisis. Following such strategy, the Department's objectives shall be to:
(1) Care for, protect and rehabilitate the physically and mentally handicapped and socially disabled
constituents, for effective social functioning;
(2) Provide an integrated welfare package to its constituents on the basis of their needs and coordinate
the service facilities required from such departments or agencies, governmental and non-
governmental, which can best provide them;
(3) Arrest the further deterioration of the socially disabling or dehumanizing conditions of the
disadvantaged segment of the population at the community level; and
(4) Advocate for policies and measures addressing social welfare concerns.
Section 3. Powers and Functions. - To accomplish its mandate and objectives, the Department shall:
(1) Formulate, develop and implement plans, programs and projects in the field of social welfare and
development;
(2) Adopt policies to ensure effective implementation of programs for public and private social welfare
services;
(3) Promote, support and coordinate the establishment, expansion and maintenance of non-
government social welfare facilities, projects and services;
(4) Establish, operate, maintain and otherwise support institutional facilities, projects and services for its
constituents;
(5) Promote, build and strengthen people's organizations for a self-directing welfare system at the
grassroots level;
(6) Promote, support and coordinate networks and facilities for the identification and delivery of
appropriate interventions to its welfare constituents;
(7) Accredit institutions and organizations engaged in social welfare activities and provide consultative
and information services to them;
(8) Undertake researches and studies on matters pertaining to its constituency;
(9) Initiate, promote and maintain bilateral and multi-lateral linkages for technical cooperation, in
coordination with the Department of Foreign Affairs;
(10) Provide advisory services and develop and implement training standard and programs for
personnel, social workers and students and third-country participants for career and staff development
in social welfare activities;
(11) Disseminate information and publish technical bulletins on social welfare and development;
(12) Deputize law enforcement agencies to assist in the implementation of laws, rules and regulations for
the protection of the rights of the exploited, abused and disadvantaged;
(13) Regulate fund drives, public solicitations and donations for charitable or welfare purposes;
(14) Set standards, accredit and monitor performance of all social welfare activities in both public and
private sectors;
(15) Exercise functional and technical supervision over social workers in other government settings or
agencies like courts, hospitals, schools and housing projects;
(16) Deputize local government units and other agencies of government as are necessary in providing
disaster relief;
(17) Coordinate all activities pertaining to the implementation of programs and services for the
disabled, the aging and other socially disadvantaged; and
(18) Perform such other functions as may be provided by law.
Section 4. Organizational Structure. -The Department, aside from the Department Proper comprising the Office
of the Secretary, the Offices of the Undersecretaries and Assistant Secretaries and the Services, shall consist of
the Bureaus, Regional Offices, Provincial/City Offices and Municipal/District Offices.
CHAPTER 2
DEPARTMENT PROPER
Section 5. Office of the Secretary. - The Office of the Secretary shall consist of the Secretary and the Secretary's
immediate staff, and the Public Affairs and Liaison Service.
Section 6. Undersecretaries. - The Secretary shall be assisted by two (2) Undersecretaries, at least one of whom
must belong to the career executive service. One Undersecretary shall supervise internal operations while the
other Undersecretary shall handle the liaison between the Secretary and the attached agencies of the
Department.
Section 7. Assistant Secretaries. - The Secretary shall also be assisted by three (3) career Assistant Secretaries
who shall respectively perform the following functions:
(1) Supervise the Personnel Development Service; Administrative Service and Financial Service;
(2) Supervise the Bureau of Child and Youth Welfare; Bureau of Women's Welfare; Bureau of Family
Community Welfare; Bureau of Emergency Assistance; and Bureau of Disable Person's Welfare;
(3) Supervise the Planning and Monitoring Service and the Legal Service, and assist the Undersecretary
and the Secretary in matters pertaining to regional or field operations.
CHAPTER 3
DEPARTMENT SERVICES
Section 8. Services of the Department. -The Services listed in Section 7 (1) and (3) hereof and the public Affairs
and Liaison Service shall respectively have the following functions:
(1) The Personnel Development Service shall provide the Department with services relating to
manpower, career planning and development, personnel transactions, and employee welfare;
(2) The Financial Service shall provide the Department with services relating to budget, collection,
disbursement, and other financial matters;
(3) The Administrative Service shall provide the Department with services relating to records,
correspondence, supplies, property and equipment, security and general services;
(4) The Planning and Monitoring Service shall provide technical services to the Department in the areas
or overall policy formulation, strategic and operational planning, management systems or procedures,
and the evaluation and monitoring of Department programs, projects and internal operations;
(5) The Legal Service shall provide the Department with services on legal matters, especially on
proposed legislations;
(6) The Public Affairs and Liaison Service in the Office of the Secretary shall provide public information
services and publications as well as coordinate and mobilize volunteers, non-governmental
organizations and cause-oriented groups in partnership with the Department.
Each of the Services shall be headed by a Staff Director and may have divisions whenever necessary for
the performance of its functions.
CHAPTER 4
BUREAUS AND OFFICES
Section 9. Composition. - The Staff bureaus listed in Section 7 (2) hereof shall be essentially staff in character
and as such shall exercise technical supervision over the Regional Offices; shall be primarily involved in the
development of policies and programs within their respective functional specializations; and shall formulate
and develop related policies, guidelines and standards necessary in guiding the Regional Offices in the proper
implementation of such policies and programs.
Section 10. Functions. - Each of the staff bureaus shall:
(1) Formulate programs, policies, rules, regulations and standards relative to the implementation of their
respective functional specialization;
(2) Initiate and administer pilot or special projects for demonstration of the corresponding policies,
programs, services, strategies, methods, procedures and guidelines prior to nationwide implementation;
(3) Audit, evaluate, and provide technical assistance and consultative services to operating units and
field offices and local government welfare departments on program implementation;
(4) Develop standards and assess agencies for licensing and accreditation;
(5) Review applications for regulatory purposes including tax exemptions for foreign donations;
(6) Provide advisory services to non-governmental agencies implementing programs and services for
welfare and development;
(7) Formulate the substantive content of, and assist in the orientation and training on, the bureaus'
programs, services, strategies, procedures, methods and guidelines;
(8) Develop indigenous literature and other media materials for clients, volunteers and other audiences;
(9) Promote and develop a system of networking and coordination with relevant welfare councils;
(10) Undertake studies and action researches on matters pertaining to client welfare and development
and propose relevant policies and amendments for legislation;
(11) Maintain linkages relative to welfare programs or projects for national, regional and interregional
cooperation.
Section 11. Areas of Specialization. - The substantive/functional areas of specialization of the staff bureaus shall
be:
(1) Bureau of Emergency Assistance - relief and rehabilitation of victims of natural calamities and social
disorganization and of cultural communities and other distressed and displaced persons;
(2) Bureau of Family and Community Welfare - assistance to socially disadvantaged families and
communities including family planning, planning outreach programs to develop their capability in
defining needs and formulating solutions as well as setting up viable community structures which bring
about desired social changes;
(3) Bureau of the Disabled Person's Welfare - disability prevention and rehabilitation of the physically,
mentally and socially disabled persons;
(4) Bureau of Women's Welfare - promoting women's welfare, with specific attention to the prevention
or eradication of exploitation of women in any form, such as but not limited to prostitution and illegal
recruitment; as well as the promotion of skills for employment and self-actualization;
(5) Bureau of Child and Youth Welfare - care and protection of abandoned, neglected, abused or
exploited children and youth, delinquents, offenders, the disturbed, street children, victims of prostitution
and others, for their social adjustment and economic self-sufficiency.
CHAPTER 5
REGIONAL OFFICES
Section 12. Regional Office. - The Department is hereby authorized to establish, operate and maintain a
Regional Office in each of the administrative regions of the country.
Section 13. Functions. - A Regional Office shall:
(1) Provide within the region efficient and effective services to its constituents; and for such purposes,
establish, operate, promote and support, at the minimum, the following welfare facilities:
(a) Vocational Rehabilitation and Special Education Center for the Handicapped;
(b) Reception and Study Center;
(c) Rehabilitation Center for Youth Offenders;
(d) Day Care Centers;
(2) Ensure the implementation of laws, policies, programs, rules, and regulations regarding social welfare
and development within the region;
(3) Secure effective coordination with other departments, agencies, institutions and organizations,
especially local government units within the region;
(4) Conduct continuing studies and planning, to improve its services to its constituents.
Section 14. Welfare Facilities. - The Regional Offices are hereby authorized to establish, operate and maintain
the following, insofar as necessary and authorized by the Secretary:
(1) Other Vocational Rehabilitation and Special Education Centers for the Handicapped;
(2) "Street Children" Centers;
(3) Centers for Youth with Special Needs;
(4) Other Centers for Youth Offenders;
(5) Homes for the Aged;
(6) Homes for Unwed Mothers;
(7) Drug Abuse Centers;
(8) Other Reception and Study Centers; and
(9) Such other facilities as may be necessary to assist the socially disadvantaged.
Section 15. Regional Director. - The Regional Office shall be headed by a Regional Director who shall be
responsible for efficiently and effectively carrying out its functions. Toward this end, and in line with the policy of
decentralization, the Regional Director shall be vested with the authority to exercise functional and
administrative supervision over Department provincial operations as delegated by the Secretary including the
authority to contribute resources and personnel to integrated region and province-wide development thrusts.
The Regional Director shall be assisted by two (2) Assistant Regional Directors, one for programs and one for
administration.
CHAPTER 6
PROVINCIAL/CITY OFFICES
Section 16. Provincial/City Office. - The Department is hereby authorized to establish, operate and maintain
Provincial/City Offices throughout the country with jurisdiction over all municipalities/districts within the
province. The Provincial/City Offices shall have the following functions:
(1) Formulate and coordinate the implementation of operational, field-level plans/programs of the
Department;
(2) Provide specialized services and comprehensive assistance to other department/agency units
whenever necessary;
(3) Secure all pertinent feedback and information from field units as well as appropriate
department/agency units, particularly local government units, and communicate the same regularly to
the Regional Office;
(4) Establish and maintain a vocational rehabilitation and special education program for the
handicapped in the form and magnitude appropriate for the needs of the province.
Section 17. Provincial/City Welfare Office. - The Provincial/City Office shall be headed by a Provincial/City
Social Welfare Officer who shall be accountable for the efficient and effective performance of its functions
and implementation of programs of the Department, within the province. The Provincial/City Social Welfare
officer shall exercise functional administrative supervision over field operations of the Department, including the
authority to recommend that field resources and personnel be contributed to integrated, municipality-wide
development efforts.
CHAPTER 7
MUNICIPAL/DISTRICT OFFICES
Section 18. Municipal/District Office. - The Department is hereby authorized to establish, operate and maintain
a Municipal/District Office to service a municipality or city district which shall be headed by the Supervising
Social Welfare Officer and shall be primarily responsible for the efficient and effective implementation of the
Department's field programs in the municipality or city, under the supervision of the Provincial/City Office.
CHAPTER 8
ATTACHED AGENCIES
Section 19. Agencies Under Administrative Supervision and Attached Agencies. - The Population Commission
Council for the Welfare of Children, National Nutrition Council and the National Council for the Welfare of
Disabled Person and the agencies attached to the Department shall continue to operate and function in
accordance with their respective charters or laws creating them, except as otherwise provided in this Code.
CHAPTER 9
FUND DRIVES
Section 20. Solicitation. - Any person, corporation, organization, or association desiring to solicit or receive
contribution for charitable or public welfare purposes shall first secure a permit from the Regional Offices of the
Department. Upon the filing of a written application for a permit in the form prescribed by the Regional Offices
of the Department, the Regional Director or his duly authorized representative may, in his discretion, issue a
permanent or temporary permit or disapprove the application. In the interest of the public, he may in his
discretion renew or revoke any permit issued under Act 4075.
Section 21. Requirements. - The Regional Director of the Department may require the person, corporation,
organization or association duly authorized to solicit contributions for the above mentioned purposes to submit
from time to time a verified report or information regarding their activities, the period covered by the report, the
collection and expenditures made and the names and addresses of the contributors and persons to whom
assistance was rendered from the funds obtained. This reports or information shall be open for inspection of the
general public. The Regional Director or his duly authorized representative may, for the protection of the public,
likewise investigate the books, papers, affairs and activities related to the aforestated purposes of any such
person, corporation, organization, or association: Provided, however, That the provisions of the preceding
Section shall not apply to any organization or institution established for charitable or public welfare purposes in
its campaign for raising funds or soliciting public subscriptions or any means for collecting funds which has been
authorized by Executive Proclamation.
Section 22. Fees. - Upon approval of the application for a solicitation permit, a fee of Twenty-Five Pesos (P25.00)
shall be paid to the cashier of the Department. The money collected as fee for the issuance of solicitation
permits shall accrue to the Department as aid for the maintenance of its institutions and social services for its
clientele.
CHAPTER 10
SOCIAL WELFARE AGENCIES AND SERVICES
Section 23. Social Welfare Services by Others. - Social welfare services by the Department shall be without
prejudice to similar efforts by any local government unit or private agency, institution or group. All Department
units shall actively promote and extend maximum assistance, including the provision of counterpart or
supplementary funds and resources, upon approval by the Secretary, to such efforts.
Section 24. Social Work Agency. -
(1) No social work agency shall operate and be accredited as such unless it is registered with the
Department which shall issue the corresponding certificate of registration.
(2) Before any social work agency shall be duly registered, the following requirements must have been
complied with:
(a) The applicant must be engaged mainly or generally in social work activity or social services;
(b) The applicant has employed a sufficient number of duly qualified and registered social
workers to supervise and take charge of its social service functions in accordance with
accepted social work standards;
(c) The applicant must show, in a duly certified financial statement that at least sixty (60) percent
of its funds are disbursed for direct social work services; and
(d) The applicant keeps a social work record of all cases and welfare activities handled by it.
(3) A certificate of registration may be revoked if after due investigation, the Department finds that the
social work agency has failed to perform its function or has violated existing laws, rules and regulations.
Section 25. Child Welfare Agency. -
(1) No person, natural or juridical, shall establish any child welfare agency without first securing a license
from the Department. Such license shall not be transferable and shall be used only by the person or
institution to which it was issued at the place stated therein. No license shall be granted unless the
purpose or function of the agency is clearly defined and stated in writing. Such definition shall include
the geographical area to be served, the children to be accepted for care, and the services to be
provided.
If the applicant is a juridical person, it must be registered in accordance with Philippine laws.
(2) The work of all registered and licensed child welfare agencies shall be supervised and coordinated
by the Department.
(3) The Department may, after notice and hearing, suspend or revoke the license of a child welfare
agency on any of the following grounds:
(a) That the agency is being used for immoral purposes;
(b) That agency is insolvent or is not in a financial position to support and maintain the children
therein or to perform the functions for which it was granted;
(c) That the children therein are being neglected or are undernourished;
(d) That the place is so unsanitary as to make it unfit for children;
(e) That said agency is located in a place or community where children should not be, or is
physically dangerous to children or would unduly expose children to crime, vice, immorality,
corruption or severe cruelty; or
(f) That said agency has by any act or commission shown its incompetence or unworthiness to
continue acting as a child welfare agency. During the period of suspension, the agency
concerned shall not accept or admit any additional children. In any case, the Department shall
make such order as to the custody of the children under the care of such agency as the
circumstances may warrant. The suspension may last for as long as the agency has not
complied with any order of the Department to remove or remedy the conditions which have
given rise to the suspension. The aggrieved agency may appeal the suspension or revocation in
a proper court action. In such a case, the court shall within fifteen (15) days from the filing of the
Department's answer, conduct a hearing and decide the case, either by lifting the suspension,
or continuing it for such period of time as it may order, or by revoking the license of the agency
where the Department has proven the revocation to be justified.
Section 26. Foster Homes. - No foster home, day care center and other substitute parental arrangement shall
operate unless it is first registered with and licensed by the Department.
Title XVII
BUDGET AND MANAGEMENT
CHAPTER 1
GENERAL PROVISIONS
Section 1. Declaration of Policy. - The national budget shall be formulated and implemented as an instrument
of national development, reflective of national objectives and plans; supportive of and consistent with the
socio-economic development plans and oriented towards the achievement of explicit objectives and
expected results, to ensure that the utilization of funds and operations of government entities are conducted
effectively; formulated within the context of a regionalized governmental structure and within the totality of
revenues and other receipts, expenditures and borrowings of all levels of government and of government-
owned or controlled corporations; and prepared within the context of the national long-term plans and
budget programs of the Government.
Section 2. Mandate. - The Department shall be responsible for the formulation and implementation of the
National Budget with the goal of attaining our national socio-economic plans and objectives.
The Department shall be responsible for the efficient and sound utilization of government funds and revenues to
effectively achieve our country's development objectives.
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.
CHAPTER 2
DEPARTMENT PROPER
Section 4. Office of the Secretary. - The Office of the Secretary shall consist of his immediate staff, the Budget
Control Staff, Research Staff, a Regional Coordination Staff for Luzon, and a Regional Coordination Staff for
Visayas and Mindanao.
Section 5. Undersecretaries. - The Secretary shall be assisted by five (5) Undersecretaries, who shall all be
appointed by the President upon the recommendation of the Secretary. They shall exercise supervision over the
offices, services, operating units and individuals under their authority and responsibility.
Section 6. Assistant Secretaries. - There shall be five (5) Assistant Secretaries, each of whom shall assist the
Secretary and the Undersecretaries in the formulation, determination and implementation of laws, policies,
plans, programs and projects on budget and management and shall oversee the day-to-day administration of
the constituent units of the Department.
CHAPTER 3
DEPARTMENT SERVICES
Section 7. Management Services Office. - The Management Services Office shall consist of the following
bureaus:
(1) The Systems and Procedures Bureau which shall review and design the management reporting
systems, review and evaluate the applicability and economics of computerization,
purchasing/inventory systems, formulate measures on internal controls to ensure accuracy, integrity and
reliability of records systems, and develop a system of controls for capital operational and cash
budgeting;
(2) The Organization and Productivity Improvement Bureau which shall develop performance standards
as bases for agency budgeting and performance evaluation, conduct studies on work simplification
and methods improvement, review the equipment procurement programs of agencies, and prepare
operations manuals and conduct continuing studies on organizational changes of government
agencies;
(3) The Compensation and Position Classification Bureau which shall classify positions and determine
appropriate salaries for specific position classes and review the compensation benefits programs of
agencies and shall design job evaluation programs.
Section 8. The Legislative, Administrative and Procurement Services Office. - The Legislative, Administrative,
Procurement and Services Office shall consist of:
(1) The Legislative Services which shall provide legal advice and service to the Department Officers and
employees, review legislative proposals and provide clarificatory opinions on budget laws.
(2) The Administrative Services which shall provide the services relative to personnel, records
management, allocation of property and supplies, and shall perform security and custodial functions.
(3) The Procurement Services which shall implement an integrated programs for the procurement of
supplies and materials for the Department.
Section 9. The Financial and Computer Services. - The Financial and Computer Services shall consist of:
(1) The Financial Services which shall provide services relative to cash management, budgetary and
financial matters.
(2) The Data Processing Service which shall provide computer services, prepare and generate
management reports, maintain and operate computer-based monitoring systems.
CHAPTER 4
BUREAUS
Section 10. The Budget Operations Office. - The Budget Operations Office shall review and analyze the work
and financial flows, the budgetary proposals of national and local government agencies and corporations,
check each agency's compliance with the budgetary policies and project priorities, determine the budgetary
implications of foreign assisted projects from the time of project design to the negotiation for financial
assistance, prepare recommendations for fund releases, formulate and implement fiscal policies and plans for
budget preparation and control, and conduct studies on economic trends and factors affecting government
revenues, expenditures and borrowings. It shall consist of the following Bureaus:
(1) National Government Budget Bureaus A and B which shall evaluate and review the budgetary
proposals, work and financial flows of the national government and ensure its compliance with
budgetary policies and project priorities of the bureaus assigned to each group.
(2) Local Government Budget Bureau which shall recommend and effect the release of National
Assistance for Local Government (NALGU) funds and those for autonomous regions based on approved
work and financial plans as limited by the Secretary.
(3) Government Corporation Budget Bureau which shall evaluate and analyze the budgetary
proposals, plans and financial flows of government corporations and agencies and ensure its
compliance with budgetary policies and project priorities;
(4) Budget Planning Bureau which shall assist the Secretary in the preparation and management of
fiscal policies and plans for budget coordination, conduct studies on economic trends and factors
affecting government revenues, expenditures and borrowings, and shall collaborate with the Office of
the President, Department of Finance, Central Bank, National Economic and Development Authority,
and other agencies in the formulation of financial plans.
(5) Foreign Assisted Projects Bureau which shall review and evaluate foreign assisted projects to
determine the annual funding requirements of certain projects identified by implementing agencies
and supported by foreign funding; assist the Secretary in determining the budgetary implications of
foreign assisted projects from the time of project design to negotiations for financial assistance; ensure
the concurrence of the Secretary of Budget on all loan agreements; evaluate the work-financial plan of
projects chargeable against the Foreign Assistance Projects (FAPS) support fund; and recommend and
effect the releases from such fund based on the approved work financial plans as may be directed by
the Secretary.
Section 11. National Accounting and Finance Office. - The National Accounting and Finance Office shall take
charge of the maintenance of the data bank of financial information and shall provide the necessary data
required by the President, fiscal agencies and international financial institutions, analyze and evaluate the
accounts and overall financial performance of the government, and supervise the management of the
accounts of government agencies and instrumentalities. It shall consist of the following Bureaus:
(1) National Government Account and Finance Bureau;
(2) Local Government Accounting and Finance Bureau; and
(3) Government Corporate Accounting and Finance Bureau.
Section 12. Regional Offices. - The Regional Offices shall implement the policies, programs, standards and
guidelines on budget administration and management in the regions.
Title XVIII
SCIENCE AND TECHNOLOGY
CHAPTER 1
GENERAL PROVISIONS
Section 1. Declaration of Policy. - The State shall:
(1) Support and encourage local scientific and technological efforts that address national and local
problems and positively contribute to national development;
(2) Promote the development of local capability in science and technology to achieve technological
self-reliance in selected areas that are vital to national development;
(3) Support and encourage public and private sector partnership aimed at accelerating self-reliance in
the selected areas; and
(4) Encourage and support private sector initiatives in science and technology and provide the
necessary incentives and assistance to enable the private sector to take increasing responsibility and a
greater role in the country's research and development efforts.
Section 2. Mandate. - The Department shall provide central direction, leadership and coordination of scientific
and technological efforts and ensure that the results therefrom are geared and utilized in areas of maximum
economic and social benefits for the people.
The Department shall formulate and implement policies, plans, programs and projects for the development of
science and technology and for the promotion of scientific and technological activities for both the public and
private sectors and ensure that the results of scientific and technological activities are properly applied and
utilized to accelerate economic and social development.
The Department shall continually review the state and needs of science and technology in the context of the
country's developmental goals.
Section 3. Powers and Functions. - To accomplish its mandate, the Department shall:
(1) Formulate and adopt a comprehensive National Science and Technology Plan including specific
goals, policies, plans, programs and projects based on the recommendation of the Inter-Council
Review Board and, upon approval by the President, monitor and coordinate its funding and
implementation by all government agencies and instrumentalities;
(2) Promote, assist and where appropriate, undertake scientific and technological research and
development in those areas which are determined to be vital to the country's development and offer
optimum returns for the resources employed;
(3) Promote the development of indigenous technology and adaptation and innovation of suitable
imported technology and in this regard, undertake technology development up to the commercial
state, preferably in joint venture with the private sector or with public agencies;
(4) Undertake design and engineering work to complement its research and development functions;
(5) Promote, assist and where appropriate undertake the transfer of the results of scientific and
technological research and development, to their end-users;
(6) Promote, assist and where appropriate undertake technological services needed by agriculture,
industry, transport and the general public;
(7) Develop and maintain an information system and data-bank on science and technology for use by
both the public and private sectors;
(8) Develop and implement, together with other entities concerned, programs for strengthening
scientific and technological capabilities in the relevant discipline through manpower training, and
through infrastructure and institution building and rationalization, in both the public and private sectors;
(9) Promote public consciousness of science and technology;
(10) Undertake policy research, technology assessment studies, feasibility studies and technical studies;
and
(11) Perform such other functions as may be provided by law.
Section 4. Structural Organization. - The Department shall consist of the Office of the Secretary, Undersecretaries
and Assistant Secretaries, the Services, Inter-Council Review Board, Sectoral planning Councils, Institutes and
Regional Offices. The Secretary shall have supervision and control of the Department except the Inter-Council
Review Board and the Sectoral Planning Councils over which he shall only exercise administrative supervision.
CHAPTER 2
DEPARTMENT PROPER
Section 5. Office of the Secretary. - The Office of the Secretary shall consist of the Secretary and his immediate
staff.
Section 6. Undersecretaries. - The Secretary shall be assisted by three (3) Undersecretaries, one for research and
development, one for regional operations and one for scientific and technical services. The Undersecretaries
shall have supervision over the Institutes under their respective functional areas of responsibility.
Section 7. Assistant Secretaries. - The Secretary shall also be assisted by three (3) Assistant Secretaries.
CHAPTER 3
SERVICES
Section 8. Services. - The Services of the Department shall consist of the following:
(1) Planning and Evaluation Service, which shall be responsible for providing the Department with
efficient and effective services relating to planning, programs and project monitoring and
development;
(2) Financial and Management Service, which shall be responsible for providing the Department with
efficient and effective staff advice and assistance on budgetary, financial, and management
improvement matters;
(3) Administrative and Legal Service, which shall be responsible for providing the Department with
efficient and effective services relating to personnel, information, records, supplies, equipment
collections, disbursement, security and custodial work, and all legal matters.
CHAPTER 4
BOARD, COUNCILS AND INSTITUTES
Section 9. Inter-Council Review Board. - There shall be an Inter-Council Review Board, composed of the
Secretaries or their designated Undersecretaries who are members of the sectoral planning councils under
Sections 10, 11, 12, 13, 14, and 15, and shall be chaired by the Secretary of Science and Technology.
The main function of the Board shall be to review the plans of the sectoral planning councils and the National
Science and Technology Plan and, in connection therewith, shall be assisted by the Planning and Evaluation
Service.
Section 10. Sectoral Planning Councils. - There shall be five (5) sectoral planning councils as follows:
(1) Philippine Council for Industry and Energy Research and Development, for industry and energy and
mineral resources;
(2) Philippine Council for Health Research and Development for health;
(3) Philippine Council for Agriculture, Forestry and Natural Resources Research and Development, for
agriculture and forestry resources;
(4) Philippine Council for Aquatic and Marine Research and Development, for aquatic and marine
resources; and
(5) Philippine Council for Advanced Science and Technology Research and Development, for
advanced science and technology.
Each of the councils shall be responsible, in its respective sector, for the formulation of strategies, policies, plans,
programs and projects for science and technology development; for programming and allocation of
government and external funds for research and development; for monitoring of research and development
projects; and for the generation of external funds.
Each council shall have a secretariat which shall be headed by an Executive Director who shall be appointed
by the President upon the recommendation of the Secretary.
Section 11. Philippine Council for Industry and Energy Research and Development. - The Philippine Council for
Industry and Energy Research and Development shall be under the administrative supervision of the
Department, and shall consist of the Secretary as Chairman and eight (8) members, as follows: Secretary of
Trade and Industry, Secretary of Transportation and Communications, Secretary of Public Works and Highways
or their designated Undersecretaries, and Executive Director of the Council Secretariat, and four (4)
representatives of the private sector in the field of industry and energy, who are chief executive officers of their
respective companies in the field of industry or energy or are acknowledged leaders in their professions to be
appointed by the President, in their personal capacity, upon recommendation of the Secretary, each of whom
shall be for a term of two (2) years; Provided, however, that the tenure of the members first appointed by the
President shall be as follows: two (2) for one (1) year and two (2) for two (2) years, as fixed in their respective
appointments. The members shall serve and continue to hold office until their respective successors shall have
been duly appointed and qualified. Appointment to any vacancy in the Council shall be by the President and
shall only be for the unexpired portion of the term of the predecessor.
Section 12. Philippine Council for Agriculture and Forestry Research and Development. - The Philippine Council
for Agriculture and Forestry Research and Development shall be under the administrative supervision of the
Department, and shall consist of the Secretary as Chairman and eight (8) members, as follows: Secretary of
Agriculture and Food, Secretary of Natural Resources or their designated Undersecretaries, Chancellor of the
University of the Philippines at Los Baños, Administrator of the National Food Authority and Executive Director of
the Council Secretariat and three (3) representatives of the private sector in the fields of agriculture or forestry,
who are chief executive officers of their respective companies in the field of agriculture or forestry or are
acknowledged leaders in their professions to be appointed by the President, in their personal capacity, upon
recommendation of the Secretary, each of whom shall be for a term of two (2) years; Provided, however, that
the tenure of the members first appointed by the President shall be as follows: one (1) for one (1) year and two
(2) for two (2) years, as fixed in their respective appointments. The members shall serve and continue to hold
office until their successors shall have been duly appointed and qualified. Appointment to any vacancy in the
Council shall be by the President and shall only be for the unexpired portion of the term of the predecessor.
Section 13. Philippine Council for Health Research and Development. - The Philippine Council for Health
Research and Development shall be under the administrative supervision of the Department, and shall consist
of the Secretary as Chairman and eight (8) members, as follows: Secretary of Health or his designated
Undersecretary, Chancellor of the University of the Philippines of Manila, Executive Director of the National
Nutrition Council, Executive Director of the Council Secretariat, and four (4) representatives of the private
sector in the field of health, who are chief executive officers of their respective companies in the field of health
or are acknowledged leaders in their professions to be appointed by the President, in their personal capacity,
upon recommendation of the Secretary, each of whom shall be for a term of two (2) years; however, that the
tenure of the members first appointed by the President shall be as follows: two (2) for one (1) year and two (2)
for two (2) years, as fixed in their respective appointments. The members shall serve and continue to hold office
until their successors shall have been duly appointed and qualified. Appointment to any vacancy in the
Council shall be by the President and shall only be for the unexpired portion of the term of the predecessor.
Section 14. Philippine Council for Aquatic and Marine Research and Development. - The Philippine Council for
Aquatic and Marine Research and Development shall be under the administrative supervision of the
Department, and shall consist of the Secretary as Chairman, and eight (8) members as follows: Secretary of
Agriculture and Food, Secretary of Natural Resources or their designated Undersecretaries, Executive Director
of the Council Secretariat, two (2) representatives from the academic/research institution and three (3)
representatives from the private sector who are chief executive officers of their respective companies in the
field of aquaculture or marine research or development or are acknowledged leaders of their professions to be
appointed by the President, in their personal capacity, upon recommendation of the Secretary, each of whom
shall be for a term of two (2) years; Provided, however, that the terms of the members first appointed by the
President shall be as follows: two (2) for one (1) year and the other three (3) for two (2) years, as fixed in their
respective appointments. The members shall serve and continue to hold office until their successors shall have
been duly appointed and qualified. Appointment to any vacancy in the Council shall be by the President and
shall only be for the unexpired portion of the term of the predecessor.
Section 15. Philippine Council for Advanced Science and Technology Research and Development. - The
Philippine Council for Advanced Science and Technology Research and Development shall be under the
Administrative supervision of the Department and shall consist of the Secretary as Chairman and eight (8)
members, as follows: Secretary of Education, Culture and Sports or his designated Undersecretary, President of
the University of the Philippines System, two (2) representatives from the government sector, and four (4)
representatives from the private sector in the field of advanced science research, all of whom shall be
appointed by the President, in their personal capacity, upon recommendation of the Secretary, each of whom
shall serve for a term of two (2) years.
Section 16. Institutes. - The Institutes of the Department are the following, which shall be line in character:
Industrial Technology Development Institute; Philippine Nuclear Research Institute; Food and Nutrition Research
Institute; Forest Products Research and Development Institute; Philippine Textile Research Institute; Advanced
Science and Technology Institute; Science Education Institute; Science and Technology Information Institute;
and Technology Application Promotion Institute; Philippine Atmospheric, Geophysical and Astronomical
Services Administration, and Philippine Institute of Volcanology and Seismology. Each Institute shall be headed
by a Director, who shall be appointed by the President upon the recommendation of the Secretary and shall
be assisted by one or more Deputy Directors as may be necessary.
Section 17. Industrial Technology Development Institute. - The Industrial Technology Development Institute shall
have the following functions:
(1) Undertake applied research and development to develop technologies and technological
innovations in the field of industrial manufacturing, mineral processing and energy;
(2) Undertake the transfer of research results directly to end-users or preferably via linkage units of other
government agencies;
(3) Undertake technical services, such as but not limited to, standards, analytical and calibration
services mandated by law or as needed by industry; and
(4) Conduct training and provide technical advisory and consultancy services to industry clientele and
end-users.
Section 18. Philippine Nuclear Research Institute. - The Philippine Nuclear Research Institute shall have the
following functions:
(1) Conduct research and development on the application of radiation and nuclear materials,
processes and techniques in agriculture, food, health, nutrition and medicine and in industrial or
commercial enterprises;
(2) Undertake the transfer of research reactors and other radiation facilities; and
(3) License and regulate activities relative to production, transfer, and utilization of nuclear and
radioactive substances.
Section 19. Food Nutrition Research Institute. - The Food Nutrition Research Institute shall have the following
functions:
(1) Undertake research that defines the citizenry's nutritional status, with reference particularly to the
malnutrition problem, its causes and effects, and identify alternative solutions to them;
(2) Develop and recommend policy options, strategies, programs and projects, which address the
malnutrition problem for implementation by the appropriate agencies; and
(3) Disseminate research findings and recommendations to the relevant end-users.
Section 20. Forest Products Research and Development Institute. - The Forest Products Research and
Development Institute shall have the following functions:
(1) Conduct applied research and development in secondary and tertiary processing for the forest-
based industry to generate information and technology which can improve the utility value of wood
and other forest products;
(2) Undertake the transfer or completed researches directly to the end-users or via linkage units of other
government agencies;
(3) Undertake technical services and provide training programs.
Section 21. Philippine Textile Research Institute. - The Philippine Textile Research Institute shall have the following
functions:
(1) Conduct applied research and development for the textile industry sector;
(2) Undertake the transfer of completed researches to end-users or via linkage units for other
government agencies; and
(3) Undertake technical services and provide training programs.
Section 22. Advanced Science and Technology Institute. - The Advanced Science and Technology Institute
shall have the following functions:
(1) Undertake long-term researches to strengthen and modernize science and technology
infrastructure;
(2) Conduct research and development work in the advanced fields of studies including biotechnology
and microelectronics; and
(3) Complement the overall endeavor in the scientific field with intensive activities in the computer and
information technologies.
Section 23. Science Education Institute. - The Science Education Institute shall have the following functions:
(1) Undertake science education and training;
(2) Administer scholarships, awards and grants;
(3) Undertake science and technology manpower development; and
(4) Formulate plans and establish programs and projects for the promotion and development of
science and technology education and training in coordination with the Department of Education,
Culture and Sports, and other institutions of learning in the field of science and technology.
Section 24. Science and Technology Information Institute. - The Science and Technology Information Institute
shall have the following functions:
(1) Establish a science and technology databank and library;
(2) Disseminate science and technology information; and
(3) Undertake training on science and technology information.
Section 25. Technology Application and Promotion Institute. - The Technology Application and Promotion
Institute (TAPI) whose primary responsibility is to serve as the implementing arm of the Department in promoting
the commercialization of technologies and in marketing the services of the other operating units in the
Department shall have the following functions:
(1) Undertake contract research, particularly at the pilot plant and semi-commercial stage;
(2) Provide technical consultancy including engineering design services, patenting and licensing
services; and
(3) Provide grants and/or venture-financing for new and/or emerging projects.
Section 26. Philippine Atmospheric, Geophysical and Astronomical Services Administration. - The Philippine
Atmospheric, Geophysical and Astronomical Services Administration shall have the following functions:
(1) Maintain a nationwide network pertaining to observation and forecasting of weather and other
climatological conditions affecting national safety, welfare and economy;
(2) Undertake activities relative to observation, collection, assessment and processing of atmospheric
and allied data for the benefit of agriculture, commerce and industry;
(3) Engage in studies of geophysical and astronomical phenomena essential to the safety and welfare
of the people;
(4) Undertake researches on the structure, development and motion of typhoons and formulate
measures for their moderation; and
(5) Maintain effective linkages with scientific organizations here and abroad, and promote exchange of
scientific information and cooperation among personnel engaged in atmospheric, geophysical and
astronomical studies.
Section 27. Philippine Institute of Volcanology and Seismology. - The Philippine Institute of Volcanology and
Seismology shall have the following functions:
(1) Predict the occurrence of volcanic eruptions and earthquakes and their geotectonic phenomena;
(2) Determine how eruptions and earthquakes shall occur and the likely areas to be affected;
(3) Exploit the positive aspects of volcanoes and volcanic terrain in furtherance of the socio-economic
development efforts of the government;
(4) Generate sufficient data for forecasting volcanic eruptions and earthquakes;
(5) Formulate appropriate disaster-preparedness plans; and
(6) Mitigate hazards of volcanic activities through appropriate detection, forecast, and warning
systems.
CHAPTER 5
REGIONAL OFFICES
Section 28. Regional Offices. - The Department is authorized to establish, operate and maintain a Regional
Office, whenever appropriate, in each of the administrative regions of the country, to be headed by a
Regional Director who shall report and be subject to the supervision of, the Undersecretary for Regional
Operations. A Regional Office shall have, within its administrative region, the following functions:
(1) Implement laws, rules, regulations, policies, plans, programs and projects of the Department;
(2) Provide efficient and effective service to the people;
(3) Coordinate with regional offices of other departments, offices and agencies in the administrative
region;
(4) Coordinate with local government units; and
(5) Perform such other functions as may be provided by law.
Section 29. Department Offices in Other Countries. - The Department may also have such offices and
representatives in other countries in places where its presence is considered necessary, subject to the approval
of the President for each of them.
CHAPTER 6
ATTACHED AGENCIES
Section 30. Attached Agencies. - The following agencies shall be attached to the Department: the Philippine
National Science Society, the National Academy of Science and Technology, the Philippine Science High
School, and the Metals Industry Research and Development Center.
Section 31. The Philippine National Science Society. - The Philippine National Science Society shall be a
corporate body composed of prominent scientists and technical men and shall have the following functions:
(1) To stimulate research in the mathematical, physical, biological and other basic sciences and in the
application of these sciences to engineering, agriculture, medicine, and other useful arts, with the
object of increasing knowledge and of contributing in other ways to the public welfare;
(2) To give encouragement to individual initiative in research as fundamentally important to the
advancement of science; and
(3) To gather and collate scientific and technical information at home and abroad, in cooperation with
governmental and other agencies and to render such information available to duly accredited
persons.
Section 32. Powers of the Philippine National Science Society. - The Philippine National Science Society shall
have the power to:
(1) Make its own organization, including its Constitution, by-laws and rules and regulations;
(2) Fill all vacancies created by death, resignation or otherwise;
(3) Provide for the election of members, division into classes, and for all other matters needful or usual in
such institution;
(4) Receive bequests and donations and hold the same in trust, to be applied in aid of scientific
investigations according to the will of the donors;
(5) Be exempt from the payment of all internal-revenue taxes, fees, assessments and other charges of
the Government in carrying out its aims, functions, and powers;
(6) Submit an annual report to the Congress and to the President of the Philippines an accurate
account of its work and activities during the corresponding fiscal year; and
(7) Perform such powers as may be provided by law or necessary to carry out its purposes and
functions.
Section 33. The National Academy of Science and Technology. - The National Academy of Science and
Technology shall be composed of outstanding scientists to serve as reservoir of competent and technological
manpower for the country. The total membership of the Academy shall not exceed fifty (50) at any one time;
however, this number may be increased by a two-thirds vote of all the members and approval thereof by the
President.
The Academy shall have its own Secretariat/Administrative staff and shall have the following functions; and
powers:
(1) Provide its members the following benefits and privileges:
(a) free publications of scientific and technological works:
(b) travel support for attendance and participation in international conference; and
(c) such other incentives, financial or otherwise designed to promote a scientific and
technological effort and achievement.
(2) Recommend annually for Presidential awards not more than ten (10) scientists for distinguished
individual or collaborative achievement in science or technology who shall be accorded by the
President the rank and title of "National Scientists." Said "National Scientists" shall each be given gratuity
in such amount to be fixed by the Academy and entitled to other privileges as enjoyed by the National
Artists.
(3) Engage in other projects and programs designed to recognize outstanding achievements in science
to promote scientific productivity.
Section 34. The Philippine Science High School. - The Philippine Science High School shall offer on a free
scholarship basis a secondary course with special emphasis on subject pertaining to the sciences with the end
view of preparing its students for a science career. The exercise of its corporate powers is vested exclusively in
the Board of Trustees and in the Director of the High School insofar as authorized by said Board. The Board of
Trustees shall be composed of the Secretary of Science and Technology, who shall be ex officio Chairman of
the Board, the Secretary of Education, who shall be ex officio Vice-Chairman, and the following members: the
President of the University of the Philippines, the Chairman of the UNESCO National Commission of the
Philippines, the Director of the Philippine Science High School, all ex officio members, a representative from the
American-Philippine Science Foundation, Inc., to be designated by the President, one representative from the
Philippine National Science Society, one representative from the National Academy of Science and
Technology, one member representing industry, and one member representing agriculture.
The members of the Board representing the Philippine National Science Society, the National Academy of
Science and Technology, Industry and Agriculture shall be appointed by the President of the Philippines upon
the recommendation of the Secretary of Science and Technology.
Section 35. The Metal Industry and Research Development Center. - The Metals Industry and Research
Development Center shall be non profit research and technological institution which shall provide both the
government and the private sector with professional management and technical expertise on such vital
activities for the development of the industry as training of engineers and technicians, information exchange,
trade accreditation service, quality control and testing of metal products, research and business economic
advisory services.
The Administration of the Center and the exercise of its corporate powers are vested exclusively in the Board of
Trustees which shall be composed of the Secretary of Science and Technology, who shall be ex officio
Chairman, the Secretary of Trade and Industry, who shall be ex officio Co-Chairman, and the following
members: the Executive Director of the Philippine Council for Industry and Energy Research and Development,
a representative each from the Department of Natural Resources, the National Economic and Development
Authority, the Metal Industry Research and Development Center and three representatives from the metals,
engineering and allied industries sub-sector to be appointed by the Secretary of Science and Technology.
The Center shall have the powers and functions assigned to it by law.
Title I
CONSTITUTIONAL COMMISSIONS
Subtitle A
CIVIL SERVICE COMMISSION
CHAPTER 1
GENERAL PROVISIONS
Section 1. Declaration of Policy. - The State shall insure and promote the Constitutional mandate that
appointments in the Civil Service shall be made only according to merit and fitness; that the Civil Service
Commission, as the central personnel agency of the Government shall establish a career service, adopt
measures to promote morale, efficiency, integrity, responsiveness, and courtesy in the civil service, strengthen
the merit and rewards system, integrate all human resources development programs for all levels and ranks,
and institutionalize a management climate conducive to public accountability; that public office is a public
trust and public officers and employees must at all times be accountable to the people; and that personnel
functions shall be decentralized, delegating the corresponding authority to the departments, offices and
agencies where such functions can be effectively performed.
Section 2. Duties and Responsibilities of Public Officers and Employees. - Public Officers and employees shall
have the duties, responsibilities, and accountability provided in Chapter 9, Book I of this Code.
Section 3. Terms and Conditions of Employment. - The terms and conditions of employment of all government
employees, including those in government-owned or controlled corporations with original charters, shall be
fixed by law. The terms and conditions of employment which are not fixed by law may be the subject of
negotiation between duly recognized employees' organizations and appropriate government authorities.
Section 4. Compensation. - The Congress shall provide for the standardization of compensation of government
officials and employees including those in government-owned or controlled corporations with original charters,
taking into account the nature of the responsibilities pertaining to, and the qualifications required for the
position concerned.
Section 5. Definitions of Terms. - As used in this title, the following shall be construed thus:
(1) Agency means any bureau, office, commission, administration, board, committee, institute,
corporation with original charter, whether performing governmental or proprietary function, or any
other unit of the National Government, as well as provincial, city or municipal government, except as
hereinafter otherwise provided.
(2) Appointing officer is the person or body authorized by law to make appointments in the Philippine
Civil Service.
(3) Class includes all positions in the government service that are sufficiently similar as to duties and
responsibilities and require similar qualifications that can be given the same title and salary and for all
administrative and compensation purposes, be treated alike.
(4) Commission refers to the Civil Service Commission.
(5) Chairman refers to the Chairman of the Commission.
(6) Commissioner refers to either of the two other members of the Commission.
(7) Department includes any of the executive departments or entities having the category of a
department including the judiciary, Commission on Elections and Commission on Audit.
(8) Eligible refers to a person who obtains a passing grade in a civil service examination or is granted a
civil service eligibility and whose name is entered in the register of eligibles.
(9) Examination refers to a civil service examination conducted by the Commission and its regional
offices or by other departments or agencies with the assistance of the Commission, or in coordination or
jointly with it, and those that it may delegate to departments and agencies pursuant to this Title, or
those that may have been delegated by law.
(10) Form refers to those prescribed by the Civil Service Commission.
CHAPTER 2
COVERAGE OF THE CIVIL SERVICE
Section 6. Scope of the Civil Service. -
(1) The Civil Service embraces all branches, subdivisions, instrumentalities, and agencies of the
Government, including government-owned or controlled corporations with original charters.
(2) Positions in the Civil Service shall be classified into career service and non-career service.
Section 7. Career Service. - The Career Service shall be characterized by (1) entrance based on merit and
fitness to be determined as far as practicable by competitive examination, or based on highly technical
qualifications; (2) opportunity for advancement to higher career positions; and (3) security of tenure.
The Career Service shall include:
(1) Open Career positions for appointment to which prior qualification in an appropriate examination is
required;
(2) Closed Career positions which are scientific, or highly technical in nature; these include the faculty
and academic staff of state colleges and universities, and scientific and technical positions in scientific
or research institutions which shall establish and maintain their own merit systems;
(3) Positions in the Career Executive Service; namely, Undersecretary, Assistant Secretary, Bureau
Director, Assistant Bureau Director, Regional Director, Assistant Regional Director, Chief of Department
Service and other officers of equivalent rank as may be identified by the Career Executive Service
Board, all of whom are appointed by the President;
(4) Career officers, other than those in the Career Executive Service, who are appointed by the
President, such as the Foreign Service Officers in the Department of Foreign Affairs;
(5) Commissioned officers and enlisted men of the Armed Forces which shall maintain a separate merit
system;
(6) Personnel of government-owned or controlled corporations, whether performing governmental or
proprietary functions, who do not fall under the non-career service; and
(7) Permanent laborers, whether skilled, semi-skilled, or unskilled.
Section 8. Classes of Positions in the Career Service. -
(1) Classes of positions in the career service appointment to which requires examinations shall be
grouped into three major levels as follows:
(a) The first level shall include clerical, trades, crafts, and custodial service positions which involve
non-professional or subprofessional work in a non-supervisory or supervisory capacity requiring
less than four years of collegiate studies;
(b) The second level shall include professional, technical, and scientific positions which involve
professional, technical, or scientific work in a non-supervisory or supervisory capacity requiring at
least four years of college work up to Division Chief level; and
(c) The third level shall cover positions in the Career Executive Service.
(2) Except as herein otherwise provided, entrance to the first two levels shall be through competitive
examinations, which shall be open to those inside and outside the service who meet the minimum
qualification requirements. Entrance to a higher level does not require previous qualification in the lower
level. Entrance to the third level shall be prescribed by the Career Executive Service Board.
(3) Within the same level, no civil service examination shall be required for promotion to a higher
position in one or more related occupation groups. A candidate for promotion should, however, have
previously passed the examination for that level.
Section 9. Non-Career Service. - The Non-Career Service shall be characterized by (1) entrance on bases other
than those of the usual tests of merit and fitness utilized for the career service; and (2) tenure which is limited to
a period specified by law, or which is coterminous with that of the appointing authority or subject to his
pleasure, or which is limited to the duration of a particular project for which purpose employment was made.
The Non-Career Service shall include:
(1) Elective officials and their personal or confidential staff;
(2) Secretaries and other officials of Cabinet rank who hold their positions at the pleasure of the
President and their personal or confidential staff(s);
(3) Chairman and members of commissions and boards with fixed terms of office and their personal or
confidential staff;
(4) Contractual personnel or those whose employment in the government is in accordance with a
special contract to undertake a specific work or job, requiring special or technical skills not available in
the employing agency, to be accomplished within a specific period, which in no case shall exceed one
year, and performs or accomplishes the specific work or job, under his own responsibility with a minimum
of direction and supervision from the hiring agency; and
(5) Emergency and seasonal personnel.
CHAPTER 3
ORGANIZATION AND FUNCTIONS OF THE CIVIL SERVICE COMMISSION
Section 10. Composition. - The Commission shall be composed of a Chairman and two Commissioners who shall
be natural born citizens of the Philippines and, at the time of their appointment, at least thirty-five years of age,
with proven capacity for public administration, and must not have been candidates for any elective position in
the elections immediately preceding their appointment.
Section 11. Appointment of Chairman and Commissioners. - The Chairman and the Commissioners shall be
appointed by the President with the consent of the Commission on Appointments for a term of seven years
without reappointment. Of the first appointed, the Chairman shall hold office for seven years, a Commissioner
for five years, and another Commissioner for three years, without reappointment. Appointment to any vacancy
shall be only for the unexpired term of the predecessor. In no case shall any Member be appointed or
designated in a temporary or acting capacity.
Section 12. Powers and Functions. - The Commission shall have the following powers and functions:
(1) Administer and enforce the constitutional and statutory provisions on the merit system for all levels
and ranks in the Civil Service;
(2) Prescribe, amend and enforce rules and regulations for carrying into effect the provisions of the Civil
Service Law and other pertinent laws;
(3) Promulgate policies, standards and guidelines for the Civil Service and adopt plans and programs to
promote economical, efficient and effective personnel administration in the government;
(4) Formulate policies and regulations for the administration, maintenance and implementation of
position classification and compensation and set standards for the establishment, allocation and
reallocation of pay scales, classes and positions;
(5) Render opinion and rulings on all personnel and other Civil Service matters which shall be binding on
all heads of departments, offices and agencies and which may be brought to the Supreme Court on
certiorari;
(6) Appoint and discipline its officials and employees in accordance with law and exercise control and
supervision over the activities of the Commission;
(7) Control, supervise and coordinate Civil Service examinations. Any entity or official in government
may be called upon by the Commission to assist in the preparation and conduct of said examinations
including security, use of buildings and facilities as well as personnel and transportation of examination
materials which shall be exempt from inspection regulations;
(8) Prescribe all forms for Civil Service examinations, appointments, reports and such other forms as may
be required by law, rules and regulations:
(9) Declare positions in the Civil Service as may properly be primarily confidential, highly technical or
policy determining;
(10) Formulate, administer and evaluate programs relative to the development and retention of
qualified and competent work force in the public service;
(11) Hear and decide administrative cases instituted by or brought before it directly or on appeal,
including contested appointments, and review decisions and actions of its offices and of the agencies
attached to it. Officials and employees who fail to comply with such decisions, orders, or rulings shall be
liable for contempt of the Commission. Its decisions, orders, or rulings shall be final and executory. Such
decisions, orders, or rulings may be brought to the Supreme Court on certiorari by the aggrieved party
within thirty (30) days from receipt of a copy thereof;
(12) Issue subpoena and subpoena duces tecum for the production of documents and records
pertinent to investigation and inquiries conducted by it in accordance with its authority conferred by
the Constitution and pertinent laws;
(13) Advise the President on all matters involving personnel management in the government service
and submit to the President an annual report on the personnel programs;
(14) Take appropriate action on all appointments and other personnel matters in the Civil Service
including extension of Service beyond retirement age;
(15) Inspect and audit the personnel actions and programs of the departments, agencies, bureaus,
offices, local government units and other instrumentalities of the government including government-
owned or controlled corporations; conduct periodic review of the decisions and actions of offices or
officials to whom authority has been delegated by the Commission as well as the conduct of the
officials and the employees in these offices and apply appropriate sanctions when necessary;
(16) Delegate authority for the performance of any function to departments, agencies and offices
where such functions may be effectively performed;
(17) Administer the retirement program for government officials and employees, and accredit
government services and evaluate qualifications for retirement;
(18) Keep and maintain personnel records of all officials and employees in the Civil Service; and
(19) Perform all functions properly belonging to a central personnel agency and such other functions as
may be provided by law.
Section 13. Duties and Responsibilities of the Chairman. - Subject to policies and rules adopted by the
Commission, the Chairman shall:
(1) Direct all operations of the Commission;
(2) Establish procedures for the effective operations of the Commission;
(3) Transmit to the President rules and regulations, and other guidelines adopted by the Chairman which
require Presidential attention including annual and other periodic reports;
(4) Issue appointments to, and enforce decisions on administrative discipline involving officials and
employees of the Commission;
(5) Delegate authority for the performance of any function to officials and employees of the
Commission;
(6) Approve and submit the annual and supplemental budget of the Commission; and
(7) Perform such other functions as may be provided by law.
Section 14. Membership of the Chairman in Boards. - The Chairman shall be a member of the Board of Directors
or of other governing bodies of government entities whose functions affect the career development,
employment status, rights, privileges, and welfare of government officials and employees, such as the
Government Service Insurance System, Foreign Service Board, Foreign Trade Service Board, National Board for
Teachers, and such other similar boards as may be created by law.
Section 15. Duties and Responsibilities of the Members of the Commission. - Jointly with the Chairman, the two
(2) Commissioners shall be responsible for the effective exercise of the rule-making and adjudicative functions
of the Commission. They shall likewise perform such functions as may be delegated by the Commission. In case
of the absence of the Chairman owing to illness or other cause, the senior member shall perform the functions
of the Chairman.
Section 16. Offices in the Commission. - The Commission shall have the following offices:
(1) The Office of the Executive Director headed by an Executive Director, with a Deputy Executive
Director shall implement policies, standards, rules and regulations promulgated by the Commission;
coordinate the programs of the offices of the Commission and render periodic reports on their
operations, and perform such other functions as may be assigned by the Commission.
(2) The Merit System Protection Board composed of a Chairman and two (2) members shall have the
following functions:
(a) Hear and decide on appeal administrative cases involving officials and employees of the
Civil Service. Its decision shall be final except those involving dismissal or separation from the
service which may be appealed to the Commission;
(b) Hear and decide cases brought before it on appeal by officials and employees who feel
aggrieved by the determination of appointing authorities involving personnel actions and
violations of the merit system. The decision of the Board shall be final except those involving
division chiefs or officials of higher ranks which may be appealed to the Commission;
(c) Directly take cognizance of complaints affecting functions of the Commission, those which
are unacted upon by the agencies, and such other complaints which require direct action of
the Board in the interest of justice;
(d) Administer oaths, issue subpoena and subpoena duces tecum, take testimony in any
investigation or inquiry, punish for contempt in accordance with the same procedures and
penalties prescribed in the Rules of Court; and
(e) Promulgate rules and regulations to carry out the functions of the Board subject to the
approval of the Commission.
(3) The Office of Legal Affairs shall provide the Chairman with legal advice and assistance; render
counselling services; undertake legal studies and researches; prepare opinions and rulings in the
interpretation and application of the Civil Service law, rules and regulations; prosecute violations of such
law, rules and regulations; and represent the Commission before any Court or tribunal.
(4) The Office of Planning and Management shall formulate development plans, programs and
projects; undertake research and studies on the different aspects of public personnel management;
administer management improvement programs; and provide fiscal and budgetary services.
(5) The Central Administrative Office shall provide the Commission with personnel, financial, logistics and
other basic support services.
(6) The Office of Central Personnel Records shall formulate and implement policies, standards, rules and
regulations pertaining to personnel records maintenance, security, control and disposal; provide
storage and extension services; and provide and maintain library services.
(7) The Office of Position Classification and Compensation shall formulate and implement policies,
standards, rules and regulations relative to the administration of position classification and
compensation.
(8) The Office of Recruitment, Examination and Placement shall provide leadership and assistance in
developing and implementing the overall Commission programs relating to recruitment, examination
and placement, and formulate policies, standards, rules and regulations for the proper implementation
of the Commission's examination and placement programs.
(9) The Office of Career Systems and Standards shall provide leadership and assistance in the
formulation and evaluation of personnel systems and standards relative to performance appraisal, merit
promotion, and employee incentive benefits and awards.
(10) The Office of Human Resource Development shall provide leadership and assistance in the
development and retention of qualified and efficient work force in the Civil Service; formulate standards
for training and staff development; administer service-wide scholarship programs; develop training
literature and materials; coordinate and integrate all training activities and evaluate training programs.
(11) The Office of Personnel Inspection and Audit shall develop policies, standards, rules and regulations
for the effective conduct or inspection and audit of personnel and personnel management programs
and the exercise of delegated authority; provide technical and advisory services to civil Service
Regional Offices and government agencies in the implementation of their personnel programs and
evaluation systems.
(12) The Office of Personnel Relations shall provide leadership and assistance in the development and
implementation of policies, standards, rules and regulations in the accreditation of employee
associations or organizations and in the adjustment and settlement of employee grievances and
management of employee disputes.
(13) The Office of Corporate Affairs shall formulate and implement policies, standards, rules and
regulations governing corporate officials and employees in the areas of recruitment, examination,
placement, career development, merit and awards systems, position classification and compensation,
performing appraisal, employee welfare and benefits, discipline and other aspects of personnel
management on the basis of comparable industry practices.
(14) The Office of Retirement Administration shall be responsible for the enforcement of the
constitutional and statutory provisions, relative to retirement and the regulation for the effective
implementation of the retirement of government officials and employees.
(15) The Regional and Field Offices. - The Commission shall have not less than thirteen (13) Regional
offices each to be headed by a Director, and such field offices as may be needed, each to be
headed by an official with at least the rank of an Assistant Director. Each Regional Office shall have the
following functions:
(a) Enforce Civil Service law and rules, policies, standards on personnel management within their
respective jurisdiction;
(b) Provide technical advice and assistance to government offices and agencies regarding
personnel administration; and
(c) Perform such other functions as may be delegated by the Commission.
Section 17. Organizational Structure. - Each office of the Commission shall be headed by a Director with at least
one (1) Assistant Director, and may have such divisions as are necessary to carry out their respective functions.
As an independent constitutional body, the Commission may effect changes in the organization as the need
arises.
CHAPTER 4
INTERDEPARTMENT RELATIONS
Section 18. Civil Service Assistance to Department and Agencies. - Each Secretary or head of office, agency,
government-owned or controlled corporation with original charter and local government shall be responsible
for personnel administration in his office which shall be in accordance with the provision relating to civil service
embodied in the Constitution, this Title and the rules, principles, standards, guidelines and regulations
established by the Commission. The Civil Service Commission shall, whenever it deems it in the interest of the
public service, organize in each department, office, agency, government-owned or controlled corporation,
and provincial and city government a Civil Service Staff which shall be headed by an officer of the
Commission. The necessary staff personnel and office facilities and equipment shall be provided by the
department, government-owned or controlled corporation or local government where the staff is established
but the Commission may augment these with its own. The Staff shall serve as the principal liaison between the
Civil Service and Department concerned and shall perform the following specific functions and those functions
which may hereafter be assigned to it by the Commission.
(1) Provide technical assistance in all aspects of personnel management;
(2) Monitor and audit periodically the personnel practices and performance of the Department or
agency concerned as well as those of public officers and employees thereat;
(3) Determine agency compliance with Civil Service Law and rules; and
(4) In the performance of these functions, the staff shall welcome and receive from the public any
suggestions, observations and complaints pertaining to the conduct of public officers and employees.
In the performance of their functions, the units so organized shall avail of the technical assistance and
guidelines of the Civil Service Commission.
Section 19. Council of Personnel Officers. - There shall be a Council of Personnel Officers to be composed of
Chief personnel officers of the different executive departments and of agencies with the category of
department that the Chairman of the Commission shall select for membership. Except for its Executive Officer
who shall be designated by the Chairman from among the appropriate officials in the Civil Service Commission,
the Council is authorized to elect such other officers from among its members and to fix its own rules or
procedures concerning attendance at meetings, approval of policy declaration, and other business matters.
Provisions for necessary facilities and clerical assistance for the Council shall be made in the annual budget of
the Commission.
The Council shall have the following functions:
(1) Offer advice, upon request of the Secretary of a Department or the Commission, in developing
constructive policies, standards, procedures, and programs as well as on matters relating to the
improvement of personnel methods and to the solution of personnel problems confronting the various
departments and agencies of the government;
(2) Promote among the departments and agencies, through study and discussion, uniform and
consistent interpretation and application of personnel policies; and
(3) Serve as a clearing house of information and stimulate the use of methods of personnel
management that will contribute most to good government.
Section 20. Inspection and Audit. - The Commission, through its designated representatives, shall conduct a
periodic inspection and audit of the personnel management program of each department, agency, province
or city, in order to: (a) determine compliance with the Civil Service law, rules and standards; (b) review
discharge of delegated authority; (c) make an adequate evaluation of the progress made and problems
encountered in the conduct of the merit system in the national and local governments; (d) give advice and
provide assistance in developing constructive policies, standards and procedures, and (e) stimulate
improvement in all areas of personnel management.
Periodic inspection and audit will include an appraisal of personnel management operations and activities
relative to: (a) formulation and issuance of personnel policy; (b) recruitment and selection of employees; (c)
personnel action and employment status; (d) career and employee development; (e) performance evaluation
system; (f) employee suggestions and incentive award; (g) employee relations and services; (h) discipline; (i)
personnel records and reporting; and (j) programs evaluation.
CHAPTER 5
PERSONNEL POLICIES AND STANDARDS
Section 21. Recruitment and Selection of Employees. -
(1) Opportunity for government employment shall be open to all qualified citizens and positive efforts
shall be exerted to attract the best qualified to enter the service. Employees shall be selected on the
basis of fitness to perform the duties and assume the responsibilities of the positions.
(2) When a vacancy occurs in a position in the first level of the Career Service as defined in Section 6,
the employees in the department who occupy the next lower positions in the occupational group
under which the vacant position is classified, and in other functionally related occupational groups and
who are competent, qualified and with the appropriate civil service eligibility shall be considered for
promotion.
(3) When a vacancy occurs in a position in the second level of the Career Service as defined in Section
8, the employees in the government service who occupy the next lower positions in the occupational
group under which the vacant position is classified and in other functionally related occupational
groups and who are competent, qualified and with the appropriate civil service eligibility shall be
considered for promotion.
(4) For purposes of this Section, each department or agency shall evolve its own screening process,
which may include tests of fitness, in accordance with standards and guidelines set by the Commission.
Promotion boards shall be formed to formulate criteria for evaluation, conduct tests or interviews, and
make systematic assessment of training experience.
(5) If the vacancy is not filled by promotion as provided herein the same shall be filled by transfer of
present employees in the government service, by reinstatement, by re-employment of persons
separated through reduction in force, or by appointment of persons with the civil service eligibility
appropriate to the positions.
(6) A qualified next-in-rank employee shall have the right to appeal initially to the Secretaries or heads
of agencies or instrumentalities including government-owned or controlled corporations with original
charters, then to the Merit System Protection Board, and finally to the Civil Service Commission an
appointment made in favor of another employee if the appellant is not satisfied with the written special
reason or reason given by the appointing authority for such appointment; Provided, however, that the
decision of the Civil Service Commission may be reviewed on certiorari only by the Supreme Court
within thirty (30) days from receipt of the decision of the aggrieved party. For purposes of this Section,
"qualified next-in-rank" refers to an employee appointed on a permanent basis to a position previously
determined to be next-in-rank and who meets the requirements for appointment thereto as previously
determined by the appointing authority and approved by the Commission.
(7) Qualification in an appropriate examination shall be required for appointment to positions in the first
and second levels in the career service in accordance with the Civil Service rules, except as otherwise
provided in this Title: Provided, That whenever there is a civil service eligible actually available for
appointment, no person who is not such an eligible shall be appointed even in a temporary capacity to
any vacant position in the career service in the government or in any government-owned or controlled
corporation with original charter, except when the immediate filling of the vacancy is urgently required
in the public interest, or when the vacancy is not permanent, in which cases temporary appointments
of non-eligibles may be made in the absence of eligibles actually and immediately available.
(8) The appropriate examinations herein referred to shall be those given by the Commission and the
different agencies: Provided, however, That nothing herein shall affect those eligibilities acquired prior to
the effectivity of this Civil Service Law: Provided, further, That a person with a civil service eligibility
acquired by successfully passing an examination shall be qualified for a position requiring a lower
eligibility if he possesses the other requirements for appointments to such position.
Section 22. Qualification Standards. -
(1) A qualification standard expresses the minimum requirements for a class of positions in terms of
education, training and experience, civil service eligibility, physical fitness, and other qualities required
for successful performance. The degree of qualifications of an officer or employee shall be determined
by the appointing authority on the basis of the qualification standard for the particular position.
Qualification standards shall be used as basis for civil service examinations for positions in the career
service, as guides in appointment and other personnel actions, in the adjudication of protested
appointments, in determining training needs, and as aid in the inspection and audit of the agencies
personnel work programs.
It shall be administered in such manner as to continually provide incentives to officers and employees
towards professional growth and foster the career system in the government service.
(2) The establishment, administration and maintenance of qualification standards shall be the
responsibility of the department or agency, with the assistance and approval of the Civil Service
Commission and in consultation with the Wage and Position Classification Office.
Section 23. Release of Examination Results. - The results of any particular civil service examination held in a
number of places on the same date shall be released simultaneously.
Section 24. Register of Eligibles. - The names of the competitors who pass an examination shall be entered in a
register of eligibles arranged in the order of their general ratings and containing such information as the
Commission may deem necessary.
Section 25. Cultural Communities. - In line with the national policy to facilitate the integration of the members of
cultural communities and accelerate the development of the areas occupied by them, the Commission shall
give special civil service examinations to qualify them for appointment in the civil service.
Section 26. Personnel Actions. - All appointments in the career service shall be made only according to merit
and fitness, to be determined as far as practicable by competitive examinations. A non-eligible shall not be
appointed to any position in the civil service whenever there is a civil service eligible actually available for and
ready to accept appointment.
As used in this Title, any action denoting the movement or progress of personnel in the civil service shall be
known as personnel action. Such action shall include appointment through certification, promotion, transfer,
reinstatement, re-employment, detail, reassignment, demotion, and separation. All personnel actions shall be in
accordance with such rules, standards, and regulations as may be promulgated by the Commission.
(1) Appointment through certification. An appointment through certification to a position in the civil
service, except as herein otherwise provided, shall be issued to a person who has been selected from a
list of qualified persons certified by the Commission from an appropriate register of eligibles, and who
meets all the other requirements of the position.
All such persons must serve a probationary period of six months following their original appointment and
shall undergo a thorough character investigation in order to acquire permanent civil service status. A
probationer may be dropped from the service for unsatisfactory conduct or want of capacity any time
before the expiration of the probationary period: Provided, That such action is appealable to the
Commission.
(2) Promotion. A promotion is a movement from one position to another with an increase in duties and
responsibilities as authorized by law and usually accompanied by an increase in pay. The movement
may be from one department or agency to another, or from one organizational unit to another in the
same department or agency.
(3) Transfer. A transfer is a movement from one position to another which is of equivalent rank, level, or
salary without break in service involving the issuance of an appointment.
It shall not be considered disciplinary when made in the interest of public service, in which case, the
employee concerned shall be informed of the reasons therefor. If the employee believes that there is no
justification for the transfer, he may appeal his case to the Commission.
The transfer may be from one department or agency to another or from one organizational unit to
another in the same department or agency: Provided, however, That any movement from the non-
career service to the career service shall not be considered a transfer.
(4) Reinstatement. Any person who has been permanently appointed to a position in the career service
and who has, through no delinquence or misconduct, been separated therefrom, may be reinstated to
a position in the same level for which he is qualified.
(5) Reemployment. Names of persons who have been appointed permanently to positions in the career
service and who have been separated as a result of reduction in force or reorganization, shall be
entered in a list from which selection for reemployment shall be made.
(6) Detail. A detail is the movement of an employee from one agency to another without the issuance
of an appointment and shall be allowed, only for a limited period in the case of employees occupying
professional, technical and scientific positions. If the employee believes that there is no justification for
the detail, he may appeal his case to the Commission. Pending appeal, the decision to detail the
employee shall be executory unless otherwise ordered by the Commission.
(7) Reassignment. An employee may be reassigned from one organizational unit to another in the same
agency: Provided, That such reassignment shall not involve a reduction in rank, status or salary.
Section 27. Employment Status. - Appointment in the career service shall be permanent or temporary.
(1) Permanent status. A permanent appointment shall be issued to a person who meets all the
requirements for the positions to which he is being appointed, including the appropriate eligibility
prescribed, in accordance with the provisions of law, rules and standards promulgated in pursuance
thereof.
(2) Temporary appointment. In the absence of appropriate eligibles and it becomes necessary in the
public interest to fill a vacancy, a temporary appointment shall be issued to a person who meets all the
requirements for the position to which he is being appointed except the appropriate civil service
eligibility: Provided, That such temporary appointment shall not exceed twelve months, but the
appointee may be replaced sooner if a qualified civil service eligible becomes available.
Section 28. Salary increase or Adjustment. - Adjustments in salaries as a result of increase in pay levels or
upgrading of positions which do not involve a change in qualification requirements shall not require new
appointments except that copies of the salary adjustment notices shall be submitted to the Commission for
record purposes.
Section 29. Reduction in Force. - Whenever it becomes necessary because of lack of work or funds or due to a
change in the scope or nature of an agency's program, or as a result of reorganization, to reduce the staff of
any department or agency, those in the same group or class of positions in one or more agencies within the
particular department or agency wherein the reduction is to be effected, shall be reasonably compared in
terms of relative fitness, efficiency and length of service, and those found to be least qualified for the remaining
positions shall be laid off.
Section 30. Career and Personnel Development. - The development and retention of a competent and
efficient work force in the public service is a primary concern of government. It shall be the policy of the
government that a continuing program of career and personnel development be established for all
government employees at all levels. An integrated national plan for career and personnel development shall
serve as the basis for all career and personnel development activities in the government.
Section 31. Career and Personnel Development Plans. - Each department or agency shall prepare a career
and personnel development plan which shall be integrated into a national plan by the Commission. Such
career and personnel development plans which shall include provisions on merit promotions, performance
evaluation, in-service training, including overseas and local scholarships and training grants, job rotation,
suggestions and incentive award systems, and such other provisions for employees' health, welfare, counseling,
recreation and similar services.
Section 32. Merit Promotion Plans. - Each department or agency shall establish promotion plans which shall be
administered in accordance with the provisions of the Civil Service law and the rules, regulations and standards
to be promulgated by the Commission. Such plans shall include provisions for a definite screening process,
which may include tests of fitness, in accordance with standards and guidelines set by the Commission.
Promotion Boards may be organized subject to criteria drawn by the Commission.
Section 33. Performance Evaluation System. - There shall be established a performance evaluation system,
which shall be administered in accordance with rules, regulations and standards, promulgated by the
Commission for all officers and employees in the career service. Such performance evaluation system shall be
administered in such manner as to continually foster the improvement of individual employee efficiency and
organizational effectiveness.
Each department or agency may, after consultation with the Commission, establish and use one or more
performance evaluation plans appropriate to the various groups of positions in the department or agency
concerned. No performance evaluation shall be given, or used as a basis for personnel action, except under
an approved performance evaluation plan: Provided, That each employee shall be informed periodically by
his supervisor of his performance evaluation.
Section 34. Responsibility for Training. - The Commission shall be responsible for the coordination and integration
of a continuing program of personnel development for all government personnel in the first and second levels.
Central staff agencies and specialized institutes shall conduct continuing centralized training for staff specialists
from the different agencies. However, in those cases where there is sufficient number of participants to warrant
training at department or agency or local government levels, such central staff agencies and specialized
institutes shall render the necessary assistance, and consultative services.
To avoid duplication of effort and overlapping of training functions, the following functional responsibilities are
assigned:
(1) Public and private colleges and universities and similar institutions shall be encouraged to organize
and carry out continuing programs of executive development.
(2) The Commission, the Commission on Audit, the Department of Budget and Management, the
General Services Administration, and other central staff agencies shall conduct centralized training and
assist in the training program of the Departments or agencies along their respective functional areas of
specialization.
(3) In coordination with the Commission, the Department of Local Government and Community
Development shall undertake local government training programs.
(4) In coordination with the Commission, each department or agency, province or city shall establish,
maintain and promote a systematic plan of action for personnel training at all levels in accordance with
standards laid down by the Commission. It shall maintain appropriate training staffs and make full use of
available training facilities.
Whenever it deems it necessary, the Commission shall take the initiative in undertaking programs for
personnel development.
Section 35. Employee Suggestions and incentive Award System. - There shall be established a government-wide
employee suggestions and incentive awards system which shall be administered under such rules, regulations,
and standards as may be promulgated by the Commission.
In accordance with rules, regulations, and standards promulgated by the Commission, the President or the
head of each department or agency is authorized to incur whatever necessary expenses involved in the
honorary recognition of subordinate officers and employees of the government who by their suggestions,
inventions, superior accomplishment, and other personal efforts contribute to the efficiency, economy, or other
improvement of government operations, or who perform such other extraordinary acts or services in the public
interest in connection with, or in relation to, their official employment.
Section 36. Personnel Relations. -
(1) It shall be the concern of the Commission to provide leadership and assistance in developing
employee relations programs in the department or agencies.
(2) Every Secretary or head of agency shall take all proper steps toward the creation of an atmosphere
conducive to good supervisor-employee relations and the improvement of employee morale.
Section 37. Complaints and Grievances. - Employees shall have the right to present their complaints or
grievances to management and have them adjudicated as expeditiously as possible in the best interest of the
agency, the government as a whole, and the employee concerned. Such complaint or grievances shall be
resolved at the lowest possible level in the department or agency, as the case may be, and the employee shall
have the right to appeal such decision to higher authorities.
Each department or agency shall promulgate rules and regulations governing expeditious, fair and equitable
adjustment of employees' complaints or grievances in accordance with the policies enunciated by the
Commission.
In case any dispute remains unresolved after exhausting all the available remedies under existing laws and
procedures, the parties may jointly refer the dispute to the Public Sector Labor Management Council
constituted under section 46, for appropriate action.
CHAPTER 6
RIGHT TO SELF-ORGANIZATION
Section 38. Coverage. -
(1) All government employees, including those in government-owned or controlled corporations with
original charters, can form, join or assist employees' organizations of their own choosing for the
furtherance and protection of their interests. They can also form, in conjunction with appropriate
government authorities, labor-management committees, work councils and other forms of workers'
participation schemes to achieve the same objectives.
(2) The provisions of this Chapter shall not apply to the members of the Armed Forces of the Philippines,
including police officers, policemen, firemen and jail guards.
Section 39. Ineligibility of High-Level Employees to Join Rank-and-File Employees' Organization. - High-level
employees whose functions are normally considered as policy-making or managerial or whose duties are of a
highly confidential nature shall not be eligible to join the organization of rank-and-file government employees.
Section 40. Protection of the Right to Organize. -
(1) Government employees shall not be discriminated against in respect of their employment by reason
of their membership in employees' organizations or participation in the normal activities of their
organizations. Their employment shall not be subject to the condition that they shall not join or shall
relinquish their membership in the employees' organizations.
(2) Government authorities shall not interfere in the establishment, functioning or administration of
government employees' organizations through acts designed to place such organizations under the
control of government authority. lawphi1.net
Section 41. Registration of Employees' Organization. - Government employees' organizations shall register with
the Civil Service Commission and the Department of Labor and Employment. The application shall be filed with
the Bureau of Labor Relations of the Department which shall process the same in accordance with the
provisions of the Labor Code of the Philippines. Applications may also be filed with the Regional Offices of the
Department of Labor and Employment which shall immediately transmit the said applications to the Bureau of
Labor Relations within three (3) days from receipt thereof.
Section 42. Certificate of Registration. - Upon arrival of the application, a registration certificate shall be issued
to the organization recognizing it as a legitimate employees' organization with the right to represent its
members and undertake activities to further and defend its interests. The corresponding certificates of
registration shall be jointly approved by the Chairman of the Civil Service Commission and the Secretary of
Labor and Employment.
Section 43. Appropriate Organizational Unit. - The appropriate organizational unit shall be the employer's unit
consisting of rank-and-file employees unless circumstances otherwise require.
Section 44. Sole and Exclusive Employees' Representatives. -
(1) The duly registered employees' organization having the support of the majority of the employees in
the appropriate organizational unit shall be designated as the sole and exclusive representative of the
employees.
(2) A duly registered employees' organization shall be accorded voluntary recognition upon a showing
that no other employees' organization is registered or is seeking registration, based on the records of the
Bureau of Labor Relations, and that the said organization has the majority support of the rank-and-file
employees in the organizational unit.
(3) Where there are two or more duly registered employees' organizations in the appropriate
organizational unit, the Bureau of Labor Relations shall, upon petition, order the conduct of a
certification election and shall certify the winner as the exclusive representative of the rank-and-file
employees in said organizational unit.
Section 45. The Public Sector Labor-Management Council. - A Public Sector Labor-Management Council is
hereby constituted to be composed of the following: The Chairman of the Civil Service Commission, as
Chairman; the Secretary of Labor and Employment, as Vice-Chairman; and the Secretary of Finance, the
Secretary of Justice and the Secretary of Budget and Management, as members.
The Council shall implement and administer the provisions of this Chapter. For this purpose, the Council shall
promulgate the necessary rules and regulations to implement this Chapter.
Section 46. Discipline: General Provisions. -
(a) No officer or employee in the Civil Service shall be suspended or dismissed except for cause as
provided by law and after due process.
(b) The following shall be grounds for disciplinary action:
(1) Dishonesty;
(2) Oppression;
(3) Neglect of duty;
(4) Misconduct;
(5) Disgraceful and immoral conduct;
(6) Being notoriously undesirable;
(7) Discourtesy in the course of official duties;
(8) Inefficiency and incompetence in the performance of official duties;
(9) Receiving for personal use of a fee, gift or other valuable thing in the course of official duties
or in connection therewith when such fee, gift, or other valuable thing is given by any person in
the hope or expectation of receiving favor or better treatment than that accorded other
persons, or committing acts punishable under the anti-graft laws;
(10) Conviction of a crime involving moral turpitude;
(11) Improper or unauthorized solicitation of contributions from subordinate employees and by
teachers or school officials from school children;
(12) Violation of existing Civil Service Law and rules or reasonable office regulations;
(13) Falsification of official document;
(14) Frequent unauthorized absences or tardiness in reporting for duty, loafing or frequently
unauthorized absence from duty during regular office hours;
(15) Habitual drunkenness;
(16) Gambling prohibited by law;
(17) Refusal to perform official duty or render overtime service;
(18) Disgraceful, immoral or dishonest conduct prior to entering the service;
(19) Physical or mental incapacity or disability due to immoral or vicious habits;
(20) Borrowing money by superior officers from subordinates or lending by subordinates to
superior officers;
(21) Lending money at usurious rates or interest;
(22) Willful failure to pay just debts or willful failure to pay taxes due to the government;
(23) Contracting loans of money or other property from persons with whom the office of the
employee concerned has business relations;
(24) Pursuit of private business, vocation or profession without the permission required by Civil
Service rules and regulations;
(25) Insubordination;
(26) Engaging directly or indirectly in partisan political activities by one holding a non-political
office;
(27) Conduct prejudicial to the best interest of the service;
(28) Lobbying for personal interest or gain in legislative halls and offices without authority;
(29) Promoting the sale of tickets in behalf of private enterprises that are not intended for
charitable or public welfare purposes and even in the latter cases if there is no prior authority;
(30) Nepotism as defined in Section 60 of this Title.
(c) Except when initiated by the disciplining authority, no complaint against a civil service official or
employee shall be given due course unless the same is in writing and subscribed and sworn to by the
complainant.
(d) In meeting out punishment, the same penalties shall be imposed for similar offenses and only one
penalty shall be imposed in each case. The disciplining authority may impose the penalty of removal
from the service, demotion in rank, suspension for not more than one year without pay, fine in an
amount not exceeding six months' salary, or reprimand.
Section 47. Disciplinary Jurisdiction. -
(1) The Commission shall decide upon appeal all administrative disciplinary cases involving the
imposition of a penalty of suspension for more than thirty days, or fine in an amount exceeding thirty
days' salary, demotion in rank or salary or transfer, removal or dismissal from office. A complaint may be
filed directly with the Commission by a private citizen against a government official or employee in
which case it may hear and decide the case or it may deputize any department or agency or official or
group of officials to conduct the investigation. The results of the investigation shall be submitted to the
Commission with recommendation as to the penalty to be imposed or other action to be taken.
(2) The Secretaries and heads of agencies and instrumentalities, provinces, cities and municipalities shall
have jurisdiction to investigate and decide matters involving disciplinary action against officers and
employees under their jurisdiction. Their decisions shall be final in case the penalty imposed is suspension
for not more than thirty days or fine in an amount not exceeding thirty days', salary. In case the decision
rendered by a bureau or office head is appealable to the Commission, the same may be initially
appealed to the department and finally to the Commission and pending appeal, the same shall be
executory except when the penalty is removal, in which case the same shall be executory only after
confirmation by the Secretary concerned.
(3) An investigation may be entrusted to regional director or similar officials who shall make the
necessary report and recommendation to the chief of bureau or office or department within the period
specified in Paragraph (4) of the following Section.
(4) An appeal shall not stop the decision from being executory, and in case the penalty is suspension or
removal, the respondent shall be considered as having been under preventive suspension during the
pendency of the appeal in the event he wins an appeal.
Section 48. Procedure in Administrative Cases Against Non-Presidential Appointees. -
(1) Administrative proceedings may be commenced against a subordinate officer or employee by the
Secretary or head of office of equivalent rank, or head of local government, or chiefs of agencies, or
regional directors, or upon sworn, written complaint of any other person.
(2) In the case of a complaint filed by any other persons, the complainant shall submit sworn statements
covering his testimony and those of his witnesses together with his documentary evidence. If on the
basis of such papers a prima facie case is found not to exist, the disciplining authority shall dismiss the
case. If a prima facie case exists, he shall notify the respondent in writing, of the charges against the
latter, to which shall be attached copies of the complaint, sworn statements and other documents
submitted, and the respondent shall be allowed not less than seventy-two hours after receipt of the
complaint to answer the charges in writing under oath, together with supporting sworn statements and
documents, in which he shall indicate whether or not he elects a formal investigation if his answer is not
considered satisfactory. If the answer is found satisfactory, the disciplining authority shall dismiss the
case.
(3) Although a respondent does not request a formal investigation, one shall nevertheless be
conducted when from the allegations of the complaint and the answer of the respondent, including
the supporting documents, the merits of the case cannot be decided judiciously without conducting
such an investigation.
(4) The investigation shall be held not earlier than five days nor later than ten days from the date of
receipt of respondent's answer by the disciplining authority, and shall be finished within thirty days from
the filing of the charges, unless the period is extended by the Commission in meritorious cases. The
decision shall be rendered by the disciplining authority within thirty days from the termination of the
investigation or submission of the report of the investigator, which report shall be submitted within fifteen
days from the conclusion of the investigation.
(5) The direct evidence for the complainant and the respondent shall consist of the sworn statement
and documents submitted in support of the complaint or answer, as the case may be, without
prejudice to the presentation of additional evidence deemed necessary but was unavailable at the
time of the filing of the complaint or answer, upon which the cross-examination, by respondent and the
complainant, respectively, shall be based. Following cross-examination, there may be redirect and
recross-examination.
(6) Either party may avail himself of the services of counsel and may require the attendance of
witnesses and the production of documentary evidence in his favor through the compulsory process of
subpoena or subpoena duces tecum.
(7) The investigation shall be conducted only for the purpose of ascertaining the truth and without
necessarily adhering to technical rules applicable in judicial proceedings. It shall be conducted by the
disciplining authority concerned or his authorized representative.
The phrase "any other party" shall be understood to be a complainant other than those referred to in
subsection (a) hereof.
Section 49. Appeals. - ]
(1) Appeals, where allowable, shall be made by the party adversely affected by the decision within
fifteen days from receipt of the decision unless a petition for reconsideration is seasonably filed, which
petition shall be decided within fifteen days. Notice of the appeal shall be filed with the disciplining
office, which shall forward the records of the case, together with the notice of appeal, to the appellate
authority within fifteen days from filing of the notice of appeal, with its comment, if any. The notice of
appeal shall specifically state the date of the decision appealed from and the date of receipt thereof.
It shall also specifically set forth clearly the grounds relied upon for excepting from the decision.
(2) A petition for reconsideration shall be based only on any of the following grounds: (a) new evidence
has been discovered which materially affects the decision rendered; (b) the decision is not supported
by the evidence on record; or (c) error of law or irregularities have been committed which are
prejudicial to the interest of the respondent: Provided, That only one petition for reconsideration shall be
entertained.
Section 50. Summary Proceedings. - No formal investigation is necessary and the respondent may be
immediately removed or dismissed if any of the following circumstances is present:
(1) When the charge is serious and the evidence of guilt is strong;
(2) When the respondent is a recidivist or has been repeatedly charged and there is reasonable ground
to believe that he is guilty of the present charge; and
(3) When the respondent is notoriously undesirable.
Resort to summary proceedings by the disciplining authority shall be done with utmost objectivity and
impartiality to the end that no injustice is committed: Provided, That removal or dismissal except those
by the President, himself or upon his order, may be appealed to the Commission.
Section 51. Preventive Suspension. - The proper disciplining authority may preventively suspend any subordinate
officer or employee under his authority pending an investigation, if the charge against such officer or
employee involves dishonesty, oppression or grave misconduct, or neglect in the performance of duty, or if
there are reasons to believe that the respondent is guilty of charges which would warrant his removal from the
service.
Section 52. Lifting of Preventive Suspension Pending Administrative Investigation. - When the administrative case
against the officer or employee under preventive suspension is not finally decided by the disciplining authority
within the period of ninety (90) days after the date of suspension of the respondent who is not a presidential
appointee, the respondent shall be automatically reinstated in the service: Provided, That when the delay in
the disposition of the case is due to the fault, negligence or petition of the respondent, the period of delay shall
not be counted in computing the period of suspension herein provided.
Section 53. Removal of Administrative Penalties or Disabilities. - In meritorious cases and upon recommendation
of the Commission, the President may commute or remove administrative penalties or disabilities imposed upon
officers or employees in disciplinary cases, subject to such terms and conditions as he may impose in the
interest of the service.
CHAPTER 7
PROHIBITIONS
Section 54. Limitation on Appointment. -
(1) No elective official shall be eligible for appointment or designation in any capacity to any public
office or position during his tenure.
(2) No candidate who has lost in any election shall, within one year after election, be appointed to any
office in the Government or any government-owned or controlled corporations or in any of its
subsidiaries.
(3) Unless otherwise allowed by law or by the primary functions of his position, no appointive official shall
hold any other office or employment in the Government or any subdivision, agency or instrumentality
thereof, including government-owned or controlled corporations or their subsidiaries.
Section 55. Political Activity. - No officer or employee in the Civil Service including members of the Armed
Forces, shall engage directly or indirectly in any partisan political activity or take part in any election except to
vote nor shall he use his official authority or influence to coerce the political activity of any other person or
body. Nothing herein provided shall be understood to prevent any officer or employee from expressing his
views on current political problems or issues, or from mentioning the names of candidates for public office
whom he supports: Provided, That public officers and employees holding political offices may take part in
political and electoral activities but it shall be unlawful for them to solicit contributions from their subordinates or
subject them to any of the acts involving subordinates prohibited in the Election Code.
Section 56. Additional or Double Compensation. - No elective or appointive public officer or employee shall
receive additional or double compensation unless specifically authorized by law nor accept without the
consent of the President, any present, emolument, office, or title of any kind from any foreign state.
Pensions and gratuities shall not be considered as additional, double, or indirect compensation.
Section 57. Limitations on Employment of Laborers. - Laborers, whether skilled, semi-skilled or unskilled, shall not
be assigned to perform clerical duties.
Section 58. Prohibition on Detail or Reassignment. - No detail or reassignment whatever shall be made within
three (3) months before any election.
Section 59. Nepotism. -
(1) All appointments in the national, provincial, city and municipal governments or in any branch or
instrumentality thereof, including government-owned or controlled corporations, made in favor of a
relative of the appointing or recommending authority, or of the chief of the bureau or office, or of the
persons exercising immediate supervision over him, are hereby prohibited.
As used in this Section, the word "relative" and members of the family referred to are those related within
the third degree either or consanguinity or of affinity.
(2) The following are exempted from the operation of the rules on nepotism: (a) persons employed in a
confidential capacity, (b) teachers, (c) physicians, and (d) members of the Armed Forces of the
Philippines: Provided, however, That in each particular instance full report of such appointment shall be
made to the Commission.
The restriction mentioned in subsection (1) shall not be applicable to the case of a member of any
family who, after his or her appointment to any position in an office or bureau, contracts marriage with
someone in the same office or bureau, in which event the employment or retention therein of both
husband and wife may be allowed.
(3) In order to give immediate effect to these provisions, cases of previous appointments which are in
contravention hereof shall be corrected by transfer, and pending such transfer, no promotion or salary
increase shall be allowed in favor of the relative or relatives who are appointed in violation of these
provisions.
CHAPTER 8
LEAVE OF ABSENCE
Section 60. Leave of Absence. - Officers and employees in the Civil Service shall be entitled to leave of
absence, with or without pay, as may be provided by law and the rules and regulations of the Civil Service
Commission in the interest of the service.
CHAPTER 9
MISCELLANEOUS PROVISIONS
Section 61. Examining Committee, Special Examiners and Special Investigators. - Subject to approval by the
proper head of a department or agency, the Commission may select suitable persons in the government
service to act as members of examining committees, special examiners or special investigators. Such persons
shall be designated examiners or investigators of the Commission and shall perform such duties as the
Commission may require, and in the performance of such duties they shall be under its exclusive control.
Examining committees, special examiners or special investigators so designated may be given allowances or
per diems for their services, to be paid out of the funds of, and at a rate to be determined by, the Commission.
Section 62. Fees. - The Commission shall collect and charge fees for civil service examinations, certifications of
civil service ratings, service records, and other civil service matters, training courses, seminars, workshops in
personnel management and other civil service matters. For this purpose, the Commission shall prescribe
standard and reasonable rates for such examinations, certifications, training courses, seminars, and workshops:
Provided, That no examination fees shall be collected in examinations given for the selection of scholars.
Section 63. Income. - The income of the Commission from fees, costs for services it may assess and levy, and
such other proceeds generated in the performance of its functions shall be directly utilized by the Commission
for its expenses.
Section 64. Authority of Officers to Administer Oaths, Take Testimony, Prosecute and Defend Cases in Court. -
Members of the Commission, chiefs of offices, and other officers and employees of the Commission designated
in writing by the Chairman may administer such oath as may be necessary in the transactions of official
business and administer oaths and take testimony in connection with any authorized investigation. Attorneys of
the Commission may prosecute and defend cases in connection with the functions of the Commission before
any court or tribunal.
Section 65. Liability of Appointing Authority. - No person employed in the Civil Service in violation of the Civil
Service Law and rules shall be entitled to receive pay from the government; but the appointing authority
responsible for such unlawful employment shall be personally liable for the pay that would have accrued had
the employment been lawful, and the disbursing officials shall make payment to the employee of such amount
from the salary of the officers so liable.
Section 66. Liability of Disbursing Officers. - Except as may otherwise be provided by law, it shall be unlawful for
a treasurer or other fiscal officer to draw or retain from salary due an officer or employee any amount for
contribution or payment of obligations other than those due the government or its instrumentalities.
Section 67. Penal Provision. - Whoever makes any appointment or employs any person in violation of any
provision of this Title or the rules made thereunder or whoever commits fraud, deceit or intentional
misrepresentation of material facts concerning other civil service matters, or whoever violates, refuses or
neglects to comply with any of such provisions or rules, shall upon conviction be punished by a fine not
exceeding one thousand pesos or by imprisonment not exceeding six (6) months, or both such fine and
imprisonment in the discretion of the court.
Subtitle B
THE COMMISSION ON AUDIT
CHAPTER 1
GENERAL PROVISIONS
Section 1. Declaration of Policy. - All resources of the government shall be managed, expended or utilized in
accordance with law and regulations and safeguarded against loss or wastage through illegal or improper
disposition to ensure efficiency, economy and effectiveness in the operations of government. The responsibility
to take care that such policy is faithfully adhered to rests directly with the chief or head of the government
agency concerned.
Section 2. Definition of Terms. - Unless the content otherwise requires, when used in this Title:
(1) "Fund" is a sum of money or other resources set aside for the purpose of carrying out specific
activities or attaining certain objectives in accordance with special requisitions, restrictions, or
limitations, and constitutes an independent fiscal and accounting entity.
(2) "Government funds" includes public moneys of every sort and other resources pertaining to any
agency of the Government.
(3) "Revenue funds" comprises all funds deprived from the income of any agency of the Government
and available for appropriation or expenditure in accordance with law.
(4) "Trust funds" refers to funds which have come officially into the possession of any agency of the
Government or of a public officer as trustee, agent, or administrator, or which have been received for
the fulfillment of some obligation.
(5) "Depository funds" comprises funds over which the officer accountable therefor may retain control
for the lawful purposes for which they came into his possession. It embraces moneys in any and all
depositories.
(6) "Depository" refers to any financial institution lawfully authorized to receive government moneys upon
deposit.
(7) "Resources" refers to the actual assets of any agency of the Government such as cash, instruments
representing or convertible to money, receivables, lands, buildings, as well as contingent assets, such as
estimated revenues applying to the current fiscal period not accrued or collected, and bonds
authorized and unissued.
(8) "Government agency" or "agency of the government," or "agency" refers to any department,
bureaus or office of the National Government, or any of its branches and instrumentalities, or any
political subdivision, as well as any government-owned or controlled corporation, including its
subsidiaries, or other self-governing board or commission of the Government.
CHAPTER 2
ORGANIZATION OF THE COMMISSION ON AUDIT
Section 3. The Commission Proper. - The Commission Proper shall be composed of the Chairman and two
Commissioners. It shall sit as a body to formulate policies, promulgate rules and regulations, and prescribe
standards governing the discharge of its powers and functions.
Section 4. The Chairman. - The Chairman shall act as Presiding Officer of the Commission Proper and Chief
Executive Officer of the Commission. The Chairman may be assisted by the commissioners in the general
administration of the Commission. He shall perform the following duties:
(1) Control and supervise the general administration of the commission;
(2) Direct and manage the implementation and execution of policies, standards, rules and regulations
of the commission;
(3) Control and supervise the audit of highly technical or confidential transactions or accounts of any
government agency; and
(4) Perform such other related functions as may be assigned from time to time by the Chairman.
Section 5. Offices of the Commissioners. - There shall be two (2) Commissioners who shall assist the Chairman,
upon proper delegation in the general administration of the Commission. They shall assist in the review and
evaluation of existing policies as well as in the formulation of new ones.
Section 6. The Commission Secretariat. - The Commission Secretariat shall be headed by the Secretary to the
Commission who shall have the privileges of a COA service chief. The Commission Secretariat shall perform the
following functions:
(1) Prepare the agenda for the sessions of the Commission Proper;
(2) Prepare and keep the minutes of all sessions, hearings and conferences of the Commission Proper;
(3) Maintain the records of the Commission Proper; and
(4) Perform such related functions as may be assigned by the Chairman of the Commission Proper.
CHAPTER 3
OFFICES
Section 7. Central Offices. - The Commission shall have the following central offices:
(1) The Administrative Office shall be headed by a Director and shall perform the following functions:
(a) Develop and maintain a personnel program which shall include recruitment, selection,
appointment, performance evaluation, employee relations, and welfare services;
(b) Provide the Commission with services related to personnel, records, supplies, equipment,
medical, collections and disbursements, and other related services; and
(c) Perform such other related functions as may be assigned from time to time by the Chairman.
(2) The Planning, Financial and Management Office shall:
(a) Formulate long range and annual plans and programs for the Commission;
(b) Formulate basis policies and guidelines for the preparation of the budget of the Commission,
coordinate with the Department of Budget and Management, and the Office of the President in
the preparation of the said budget;
(c) Maintain and administer the accounting system pertaining to the accounts of the
Commission;
(d) Develop and maintain the management information system of the Commission;
(e) Develop and administer a management improvement program, including a system for
measurement of performance of auditing units on which an annual report shall be submitted to
the Chairman not later than the 31st of January of each year;
(f) Render consultancy services related to the discharge of government auditing functions; and
(g) Perform such other related functions as may be assigned from time to time by the Chairman.
(3) The State Accounting and Auditing Development Office shall be headed by a Director and shall
perform the following functions:
(a) Formulate long range plans for a comprehensive training program for all personnel of the
Commission and personnel of the agencies of government, with respect to Commission rules
and regulations and audit matters;
(b) Prepare and implement annual training programs, consistent with its long range plans;
(c) Develop its capability to implement training programs;
(d) Publish the professional journal of the Commission;
(e) Establish and maintain such training centers and libraries as may be authorized by the
Commission; and
(f) Perform such other related functions as may be assigned from time to time by the Chairman.
(4) The Accountancy Office shall be headed by a Director and shall perform the following functions:
(a) Prepare for the Commission, the annual financial report of the National Government and
such other financial or statistical works as may be required by the Commission;
(b) Maintain the accounts of the current surplus of the general fund of the national government;
(c) Verify appropriations, of national government agencies and control fund releases pertaining
thereto; and
(d) Assist in the formulation of accounting rules and regulations and supervise the
implementation of such rules and regulations in government agencies.
(5) The Special Audits Office shall be headed by a Director and shall perform the following functions:
(a) Conduct, consistent with the exercise by the Commission of its visitorial powers as conferred
by the variable scope audit of non-governmental firms subsidized by the government (1)
required to pay levies or government shares; (2) those funded by donations through the
government; and (3) those for which the government has put up a counterpart fund. Such
audits shall be limited to the funds coming from the government;
(b) Undertake, on a selective basis, financial compliance, economy, efficiency and
effectiveness audit of national agencies and local government units, government-owned or
controlled corporations, and other self-governing boards, commissions, or agencies of
government, as well as specific programs and projects of the government;
(c) Audit financial operations of public utilities and franchise grantees for rate determination and
franchise tax purposes;
(d) Conduct such other special audits as may be directed by the Chairman; and
(e) Perform such other related functions as may be assigned from time to time by the Chairman.
(6) The Technical Services Office shall perform the following functions:
(a) Review and evaluate contracts with emphasis on the engineering and other technical
aspects;
(b) Inspect and appraise infrastructure projects, deliveries of materials and equipment, and
property for disposal;
(c) Develop and administer a system for monitoring the prices of materials, supplies, and
equipment purchased by the government;
(d) Initiate special studies on technical matters related to auditing; and
(e) Perform such other related functions as may be assigned from time to time by the Chairman.
(7) The Legal Office shall be headed by a General Counsel with the rank and privileges of a director
and which shall perform the following functions:
(a) Perform advisory and consultative functions and render legal services with respect to the
performance of the functions of the Commission and the interpretation of pertinent laws and
regulations;
(b) Handle the investigation of administrative cases filed against the personnel of the
Commission, evaluate and act on all reports of involvement of the said personnel in anomalies
or irregularities in government transactions, and perform any other investigative work required by
the Commission upon assignment by the Chairman.
(c) Represent the Commission in preliminary investigation of malversation and similar cases
discovered in audit, assist and collaborate with the prosecuting agencies of Government in the
prosecution thereof, and assist and collaborate with the Solicitor General in handling civil cases
involving the Chairman or any of the Commissioners and other officials and employees of the
Commission in their official capacity;
(d) Extend assistance by way of legal advice or counsel to auditors of the Commission who face
harassment or retaliatory suits, whether civil or criminal, in consequence of the performance of
their official functions;
(e) Coordinate and initiate for the Commission, with appropriate legal bodies of government
with respect to legal proceedings towards the collection and enforcement of debts and claims,
and the restitution of funds and property, found to be due any government agency in the
settlement and adjustment of its accounts by the Commission; and
(f) Perform such other related functions as may be assigned from time to time by the Chairman.
(8) The National Government Audit Offices I and II shall be headed by a Director and which shall
perform the following functions:
(a) Exercise control and supervision over the implementation of auditing rules and regulations in
agencies of national government in the National Capital Region (NCR), including self-governing
boards, commissions or agencies funded from national appropriations;
(b) Review audit reports covering agencies of the national government under its audit
jurisdiction;
(c) Exercise control and supervision over personnel, planning, financial (budgetary and
accounting), and legal matters pertaining to the Office and the Auditing Units under it;
(d) Formulate and develop plans, operating standards, methods and techniques for the
implementation of auditing rules and regulations for agencies of the national government;
(e) Formulate accounting and auditing rules and regulations for agencies of the national
government;
(f) Advise and assist the Chairman on matters pertaining to the audit of agencies of the national
government under their respective jurisdictions; and
(g) Perform such other related functions as may be assigned from time to time by the Chairman.
(9) The Corporate Audit Office shall be headed by a Director and shall perform the following functions:
(a) Exercise control and supervision over the implementation of auditing rules and regulations in
government-owned or controlled corporations in the National Capital Region;
(b) Review audit reports covering government-owned or controlled corporations;
(c) Exercise control and supervision over personnel, planning, financial (budgetary and
accounting), and legal matters pertaining to the Office and the Auditing units under it;
(d) Formulate and develop plans, operating standards, methods and techniques for the
implementation of accounting and auditing rules and regulations in government-owned or
controlled corporations;
(e) Formulate accounting and auditing rules and regulations for government-owned or
controlled corporations;
(f) Prepare for the Commission, the annual financial report of government-owned or controlled
corporations;
(g) Advise and assist the Chairman on matters pertaining to the audit of government-owned or
controlled corporations; and
(h) Perform such other related functions as may be assigned from time to time by the Chairman.
(10) The Local Governments Audit Office shall be headed by a Director and shall perform the following
functions:
(a) Exercise control and supervision over the implementation of auditing rules and regulations in
local government units in the National Capital Region;
(b) Review audit reports covering local government units in the National Capital Region;
(c) Exercise control and supervision over personnel, planning, financial (budgetary and
accounting), and legal matters pertaining to the Office and Auditing units under it;
(d) Formulate and develop plans, operating standards, methods and techniques for the
implementation of auditing rules and regulations in local government units;
(e) Formulate accounting and auditing rules and regulations for local government units;
(f) Prepare for the Commission, the annual financial report of local government units;
(g) Advise and assist the Chairman on matters pertaining to the audit of local government units;
and
(h) Perform such other related functions as may be assigned from time to time by the Chairman.
Section 8. Auditing Units in Regional Offices: Structure and Functions. - The Regional Offices in Region I to XII,
each to be headed by a Director shall perform the following functions:
(1) Exercise supervision and control over the implementation of auditing rules and regulations in any
agency of the government with principal office or place of operations within the regions;
(2) Review local, national and corporate audit reports pertaining to the region;
(3) Exercise control and supervision over personnel, planning, financial (budgetary and accounting),
and legal matters pertaining to the region; and
(4) Perform such other related functions as may be assigned by the Chairman.
Section 9. Auditing Units in Government Agencies: Structure and Functions. - The Auditing Units in government
agencies shall perform the following functions:
(1) Examine, audit and settle all accounts, funds, financial transactions and resources of government
agencies under their jurisdiction.
(2) Submit audit reports and such other reports as may be required by the Commission;
(3) Keep and preserve expense vouchers, journal vouchers, stubs of treasury warrants and checks,
reports of collections and disbursements and similar documents together with their supporting papers,
under regulations of the Commission; and
(4) Perform such other functions as may be assigned to them by the Chairman.
CHAPTER 4
JURISDICTION, POWERS AND FUNCTIONS OF THE COMMISSION
Section 10. Statement of Objectives. - In keeping with the constitutional mandate, the Commission adheres to
the following objectives:
(1) Determine whether or not the fiscal responsibility that rests directly with the head of the government
agency has been properly and effectively discharged;
(2) Develop and implement a comprehensive audit program that shall encompass an examination of
financial transactions, accounts and reports, including evaluation of compliance with applicable laws
and regulations;
(3) Institute control measures through the promulgation of auditing and accounting rules and
regulations governing the receipts disbursements, and uses of funds and property, consistent with the
total economic development efforts of the Government;
(4) Promulgate auditing and accounting rules and regulations so as to facilitate the keeping, and
enhance the information value of the accounts of the Government;
(5) Institute measures designed to preserve and ensure the independence of its representatives; and
(6) Endeavor to bring its operations closer to the people by the delegation of authority through
decentralization, consistent with the provisions of the Constitution and the laws.
Section 11. General Jurisdiction. -
(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 or 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 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.
(2) The Commission shall have exclusive authority, subject to the limitations in this Article, to define the
scope of its audit and examination, establish the techniques and methods required therefor, and
promulgate accounting and auditing rules and regulations, including those for the prevention and
disallowance of irregular, unnecessary, excessive, extravagant, or unconscionable expenditures, or uses
of government funds and properties.
Section 12. Appointing Power. - The Commission Proper shall appoint in accordance with the Civil Service Law,
the officials and employees of the Commission wherever they are stationed or assigned.
Section 13. Examining Authority. - The Commission shall have authority to examine books, papers, documents
filed by individuals and corporations with, and which are in the custody of, government offices in connection
with government revenue collection operations, for the sole purpose of ascertaining that all funds determined
by the appropriate agencies and collectible and due the Government have actually been collected, except
as otherwise provided in the Internal Revenue Code of 1977.
Section 14. Visitorial Authority. -
(1) The Commission shall have visitorial authority over non-government entities subsidized by the
Government, those required to pay levies or have government shares, those which have received
counterpart funds from the Government or are partly funded by donations through the Government.
This authority, however, shall pertain only to the audit of these funds or subsidies coming from or through
the Government; and
(2) Upon direction of the President, the Commission shall likewise exercise visitorial authority over non-
governmental entities whose loans are guaranteed by the Government, provided that such authority
shall pertain only to the audit of the government's contingent liability.
Section 15. Fee for Audit and Other Services. -
(1) The Commission shall fix and collect reasonable fees for the different services rendered to non-
government entities that shall be audited in connection with their dealings with the Government arising
from subsidiaries, counterpart funding by Government, or where audited records become the basis for
a government levy or share. Fees of this nature shall accrue to the General Fund and shall be remitted
to the Treasurer of the Philippines within ten (10) days following the completion of the audit; and
(2) Whenever the Commission contracts with any government entity to render audit and related
services beyond the normal scope of such services, the Commission is empowered to fix and collect
reasonable fees. Such fees shall either be appropriated in the agency's current budget, charged
against its savings, or appropriated in its succeeding year's budget. Remittance shall accrue to the
General Fund and shall be made to the Treasurer of the Philippines within the time provided for in the
contract of service, or in the billing rendered by the Commission.
Section 16. Deputization of Private Licensed Professionals to Assist Government Auditors. -
(1) The Commission may, when the exigencies of the service also require, deputize and retain in the
name of the Commission such certified public accountants and other licensed professionals not in the
public service as it may deem necessary to assist government auditors in undertaking specialized audit
engagements; and
(2) The deputized professionals shall be entitled to such compensation and allowances as may be
stipulated, subject to pertinent rules and regulations on compensation and fees.
Section 17. Government Contracts for Auditing, Accounting and Related Services. -
(1) No government agency shall enter into any contract with any private person or firm for services to
undertake studies and services relating to government auditing, including services to conduct, for a fee,
seminars or workshops for government personnel on these topics, unless the proposed contract is first
submitted to the Commission to enable it to determine if it has the resources to undertake such studies
or services. The Commission may engage the services of experts from the public or private sectors in the
conduct of these studies; and
(2) Should the Commission decide not to undertake the study or service, it shall nonetheless have the
power to review the contract in order to determine the reasonableness of its costs.
Section 18. Settlement of Accounts Between Agencies. - The Commission shall have the power, under such
regulations as it may prescribe, to authorize and enforce the settlement of accounts subsisting between
agencies of the Government.
Section 19. Collection of Indebtedness Due to the Government. - The Commission shall, through proper
channels, assist in the collection and enforcement of all debts and claims, and the restitution of all funds or the
replacement or payment as a reasonable price of property, found to be due the Government, or any of its
subdivisions, agencies or instrumentalities, or any government-owned or controlled corporation or self-
governing, board, commission or agency of the Government, in the settlement and adjustment of its accounts.
If any legal proceeding is necessary to that end, the Commission shall refer the case to the Solicitor General,
the Government Corporate Counsel, or the Legal Staff of the Creditor Government Office or agency
concerned to institute such legal proceeding. The Commission shall extend full support in the litigation. All such
moneys due and payable shall bear interest at the legal rate from the date of written demand by the
Commission.
Section 20. Power to Compromise Claims. -
(1) When the interest of the Government so requires, the Commission may compromise or release in
whole or in part, any settled claim or liability to any government agency not exceeding ten thousand
pesos arising out of any matter or case before it or within its jurisdiction, and with the written approval of
the President, it may likewise compromise or release any similar claim or liability not exceeding one
hundred thousand pesos. In case the claim or liability exceeds one hundred thousand pesos, the
application for relief therefrom shall be submitted, through the Commission and the President, with their
recommendations, to the Congress; and
(2) The Commission may, in the interest of the Government, authorize the charging or crediting to an
appropriate account in the National Treasury, small discrepancies (overage or shortage) in the
remittances to, and disbursements of, the National Treasury, subject to the rules and regulations as it
may prescribe.
Section 21. Retention of Money for Satisfaction of Indebtedness to Government. - When any person is indebted
to any government agency, the Commission may direct the proper officer to withhold the payment of any
money due such person or his estate to be applied in satisfaction of the indebtedness.
Section 22. Authority to Examine Accounts of Public Utilities. -
(1) The Commission shall examine and audit the books, records and accounts of public utilities in
connection with the fixing of rates of every nature, or in relation to the proceedings of the proper
regulatory agencies, for purposes of determining franchise taxes;
(2) Any public utility refusing to allow an examination and audit of its books of accounts and pertinent
records, or offering unnecessary obstruction to the examination and audit, or found guilty of concealing
any material information concerning its financial status shall be subject to the penalties provided by
law; and
(3) During the examination and audit, the public utility concerned shall produce all the reports, records,
books of accounts and such other papers as may be required. The Commission shall have the power to
examine under oath any official or employee of the said public utility.
Section 23. Submission of Papers Relative to Obligations. -
(1) The Commission shall have the power, for purposes of inspection, to require the submission of the
original of any order, deed, contract, or other document under which any collection, or payment from,
government funds may be made, together with any certificate, receipt, or other evidence in
connection therewith. If authenticated copy is needed for record purposes, the copy shall upon
demand be furnished;
(2) In the case of deeds to property purchased by any government agency, the Commission shall
require a certificate of title entered in favor of the Government or other evidence satisfactory to it that
the title is in the Government; and
(3) It shall be the duty of the officials or employees concerned, including those in non-government
entities under audit, or affected in the audit of government and non-government entities, to comply
with these requirements. Failure or refusal to do so without justifiable cause shall be a ground for
administrative disciplinary action as well as for disallowing permanently a claim under examination,
assessing additional levy or government share, or withholding or withdrawing government funding or
donation through the Government.
Section 24. Investigatory and Inquisitorial Powers. - The Chairman or any Commissioner, the Central Office
Managers, the Regional Directors, the Auditors of any government agency, and any other official or employee
of the Commission specially deputed in writing for the purpose by the Chairman shall, in compliance with the
requirement of due process have the power to summon the parties to a case brought before the Commission
for resolution, issue subpoena and subpoena duces tecum, administer oaths, and otherwise take testimony in
any investigation or inquiry on any matter within the jurisdiction of the Commission.
Section 25. Power to Punish Contempt. - The Commission shall have the power to punish contempt provided for
in the Rules of Court under the same procedure and with the same penalties provided therein. Any violation of
any final and executory decision, order or ruling of the Commission shall constitute contempt of the
Commission.
Section 26. Annual Report of the Commission. -
(1) The Commission shall submit to the President, and the Congress not later than the last day of
September of each year an annual report on the financial condition and results of operation of all
agencies of the Government which shall include recommendations of measures necessary to improve
the efficiency and effectiveness of these agencies;
(2) To carry out the purposes of this section, the Chief Accountant or the official in charge of keeping
the accounts of government agency shall submit to the Commission year-end trial balances and such
other supporting or subsidiary statements as may be required by the Commission not later than the
fourteenth (14) day of February. Trial balances returned by the Commission for revision due to non-
compliance with accounting rules and regulations shall be resubmitted within three days after the date
of receipt by the official concerned; and
(3) Failure on the part of any official or employee to comply with the provisions of the immediately
preceding paragraph shall cause the automatic suspension of the payment of his salary and other
emoluments until he shall have complied therewith. The violation of these provisions for at least three (3)
times shall subject the offender to administrative disciplinary action.
Section 27. Statement of Monthly Receipts and Disbursements. - The Commission shall forward to the Secretary
of Finance, as soon as and within sixty (60) days after the expiration of each month, a statement of all receipts
of the national government of whatever class, and payments of moneys made on warrants or otherwise during
the preceding month.
Section 28. Powers, Functions, Duties of Auditors as Representatives of the Commission. -
(1) The Auditors shall exercise such powers and functions as may be authorized by the Commission in
the examination, audit and settlement of the accounts, funds, financial transactions and resources of
the agencies under their respective audit jurisdiction;
(2) A report of audit for each calendar year shall be submitted on the last working day of February
following the close of the year by the head of each auditing unit through the Commission to the head
or the governing body of the agency concerned, and copies thereof shall be furnished the government
officials concerned or authorized to receive them. Subject to such rules and regulations as the
Commission may prescribe, the report shall set forth the scope of audit and shall include statements of
financial conditions, surplus or deficit analysis, operations, changes in financial position, and such
comments and information as may be necessary together with such recommendations with respect
thereto as may be advisable, including a report of any impairment of capital noted in the audit. It shall
also show specifically any program, expenditure, or other financial transaction or undertaking observed
in the course of the audit which in the opinion of the auditor has been carried out or made without
authority of law. The auditor shall render such other reports as the Commission may require:
(3) In the performance of their respective audit functions as herein specified, the auditors shall employ
such auditing procedures and techniques as are determined by the Commission under regulations that
it may promulgate; and
(4) The auditors in all auditing units shall have the custody and be responsible for the safekeeping and
preservation of paid expense vouchers, journal vouchers, stubs of treasury warrants or checks, reports of
collections and disbursements and similar documents, together with their respective supporting papers,
under regulations of the Commission.
Section 29. Check and Audit of Property or Supplies. - The auditor shall from time to time conduct a careful and
thorough check and audit of all property or supplies of the agency to which he is assigned. Such check and
audit shall not be confined to a mere inspection and examination of the pertinent vouchers, inventories, and
other papers but shall include an ocular verification of the existence and condition of the property or supplies.
The recommendation of the auditor shall be embodied in the proper report.
Section 30. Annual Audit and Work Program. - Each Auditor who is head of an auditing unit shall develop and
devise an annual work program and the necessary audit program for his unit in accordance with the
regulations of the Commission.
Section 31. Seizure of Office by Auditor. -
(1) The books, accounts, papers and cash of any local treasurer or other accountable officer shall at all
times be open to the inspection of the Commission or its authorized representatives;
(2) In case an examination of the accounts of a local treasurer discloses a shortage in cash which
should be on hand, it shall be the duty of the examining officer to seize the office and its contents, notify
the Commission and the local chief executive, thereupon immediately take full possession of the office
and its contents, close and render his accounts to the date of taking possession, and temporarily
continue the public business of such office; and
(3) The auditor who takes possession of the office of the local treasurer under this section shall ipso facto
supersede the local treasurer until the officer involved is restored, or another person has been
appointed or designated to the position or other provision has been lawfully made for filling the office.
Section 32. Constructive Distraint of Property of Accountable Officer. -
(1) Upon discovery in audit of a shortage in the accounts of any accountable officer and upon a
finding of a prima facie case of malversation of public funds or property against him, in order to
safeguard the interest of the Government, the Commission may place under constructive distraint
personal property of the accountable officer concerned where there is reasonable ground to believe
that the said officer is retiring from the government service or intends to leave the Philippines or remove
his property therefrom or hide or conceal his property.
(2) The constructive distraint shall be effected by requiring the accountable officer concerned or any
other person having possession or control of the property to accomplish a receipt, in the form of
prescribed by the Commission, covering the property distrained and obligate himself to preserve the
same intact and unaltered and not to dispose of it in any manner whatever without the express
authority of the Commission; and
(3) In case the said accountable officer or other person having the possession and control of the
property sought to be placed under constructive distraint refuses or fails to accomplish the receipt
herein referred to, the representative of the Commission effecting the constructive distraint shall
proceed to prepare a list of such property and, in the presence of two (2) witnesses, leave a copy
thereof in the premises where the property distrained is located, after which the said property shall be
deemed to have been placed under constructive distraint.
CHAPTER 5
DECISIONS OF THE COMMISSION
Section 33. Appeal from Decision of Auditors. - Any person aggrieved by the decision of an auditor of any
government agency in the settlement of an account or claim may, within six (6) months from receipts of a copy
thereof, appeal in writing to the Commission.
Section 34. Period for Rendering Decisions of the Commission. - The Commission shall decide any case brought
before it within sixty (60) days from the date of its submission for resolution. If the account or claim involved in
the case needs reference to other persons or office, or to a party interested, the period shall be counted from
the time the last comment necessary to a proper decision is received by it.
Section 35. Appeal from Decision of the Commission. - Any decision, order or ruling of the Commission may be
brought to the Supreme Court on certiorari by the aggrieved party within thirty days from his receipt of a copy
thereof in the manner provided by law and the Rules of Court. When the decision, order or ruling adversely
affects the interest of any government agency, the appeal may be taken by the proper head that agency.
Section 36. Finality of Decision of the Commission or Any Auditor. - A decision of the Commission or of any
Auditor upon any matter within its or his jurisdiction, if not appealed as herein provided, shall be final and
executory.
Section 37. Opening and Revision of Settled Accounts. -
(1) At any time before the expiration of three (3) years after the settlement of any account by an
auditor, the Commission may motu proprio review and revise the account or settlement and certify a
new balance. For this purpose, it may require any account, vouchers or other papers connected with
the matter to be forwarded to it;
(2) When any settled account appears to be tainted with fraud, collusion, or error of calculation, or
when new and material evidence is discovered, the Commission may, within three (3) years after the
original settlement, open the account and, after a reasonable time for reply or appearance of the
party concerned, certify thereon a new balance. An auditor may exercise the same power with respect
to settled accounts pertaining to the agencies under his audit jurisdiction; and
(3) Accounts once finally settled shall in no case be opened or reviewed except as herein provided.
CHAPTER 6
GOVERNMENT AUDITING AND ACCOUNTING
Section 38. Definition of Government Auditing. - Government auditing is the analytical and systematic
examination and verification of financial transactions, operations, accounts and reports of any government
agency for the purpose of determining their accuracy, integrity and authenticity, and satisfying the
requirements of law, rules and regulations.
Section 39. General Standards. -
(1) The audit shall be performed by a person possessed with adequate technical training and
proficiency as auditor;
(2) In all matters relating to the audit work, the auditor shall maintain complete independence,
impartiality and objectivity and shall avoid any possible compromise of his independence or any act
which may create a presumption of lack of independence or the possibility of undue influence in the
performance of his duties; and
(3) The auditor shall exercise due professional care and be guided by applicable laws, regulations and
the generally accepted principles of accounting in the performance of the audit work a well as in the
preparation of audit and financial reports.
Section 40. Definition of Government Accounting. - Government accounting includes the process of analyzing,
recording, classifying, summarizing and communicating all transactions involving the receipt and dispositions of
government funds and property, and interpreting the results thereof.
Section 41. Objectives of Government Accounting. - Government accounting shall aim to produce information
concerning past operations and present conditions; provide a basis for guidance for future operations; provide
for control of the acts of public bodies and officers in the receipt, disposition and utilization of funds and
property; and report on the financial position and the results of operations of government agencies for the
information of all persons concerned.
CHAPTER 7
RECEIPT AND DISPOSITION OF FUNDS AND PROPERTY
Section 42. Accounting for Money and Property Received by Public Officials. - Except as may otherwise be
specifically provided by law or competent authority, all moneys and property officially received by a public
officer in any capacity or upon any occasion must be accounted for as government funds and government
property. Government property shall be taken up in the books of the agency concerned at acquisition cost or
an appraised value.
Section 43. Special, Fiduciary and Trust Funds. - Receipts shall be recorded as income of Special, Fiduciary or
Trust Funds or Funds other than the General Fund only when authorized by law as implemented pursuant to law.
Section 44. Issuance of Official Receipts. -
(1) No payment of any nature shall be received by a collecting officer without immediately issuing an
official receipt in acknowledgment thereof. The receipt may be in the form of postage, internal revenue
or documentary stamps and the like, or officially numbered receipts, subject to proper custody,
accountability and audit; and
(2) Where mechanical devices are used to acknowledge cash receipts, the Commission may approve,
upon request, exemption from the use of accountable forms.
CHAPTER 8
APPLICATION OF APPROPRIATED FUNDS
Section 45. Disbursement of Government Funds. -
(1) Revenue funds shall not be paid out of any public treasury or depository except in pursuance of an
appropriation law or other specific statutory authority;
(2) Trust funds shall not be paid out of any public treasury or depository except in fulfillment of the
purpose for which the trust was created or funds received and upon authorization of the legislative
body, or head of any other agency of the government having control thereof, and subject to pertinent
budget laws, rules and regulations;
(3) National revenue and trust funds shall not be withdrawn from the National Treasury except upon
warrant or other instruments of withdrawal approved by the Secretary of Finance as recommended by
the Treasurer of the Philippines; and
(4) Temporary investment of investible cash in the National Treasury in any securities issued by the
National Government and its political subdivisions and instrumentalities, including government-owned or
controlled corporations as authorized by the Secretary of Finance, shall not be construed as
disbursement of funds.
Section 46. Appropriation Before Entering into Contract. -
(1) No contract involving the expenditure of public funds shall be entered into unless there is an
appropriation therefor, the unexpended balance of which, free of other obligations, is sufficient to
cover the proposed expenditure; and
(2) Notwithstanding this provision, contracts for the procurement of supplies and materials to be carried
in stock may be entered into under regulations of the Commission provided that when issued, the
supplies and materials shall be charged to the proper appropriations account.
Section 47. Certificate Showing Appropriation to Meet Contract. - Except in the case of a contract for personal
service, for supplies for current consumption or to be carried in stock not exceeding the estimated consumption
for three (3) months, or banking transactions of government-owned or controlled banks, no contract involving
the expenditure of public funds by any government agency shall be entered into or authorized unless the
proper accounting official of the agency concerned shall have certified to the officer entering into the
obligation that funds have been duly appropriated for the purpose and that the amount necessary to cover
the proposed contract for the current calendar year is available for expenditure on account thereof, subject to
verification by the auditor concerned. The certificate signed by the proper accounting official and auditor who
verified it, shall be attached to and become an integral part of the proposed contract, and the sum so
certified shall not thereafter be available for expenditure for any other purpose until the obligation of the
government agency concerned under the contract is fully extinguished.
Section 48. Void Contract and Liability of Officer. - Any contract entered into contrary to the requirements of
the two (2) immediately preceding sections shall be void, and the officer or officers entering into the contract
shall be liable to the Government or other contracting party for any consequent damage to the same extent
as if the transaction had been wholly between private parties.
Section 49. Countersigning of Warrants or Checks by Auditors. - No warrant or check shall be paid by the
Treasury of the Philippines, local treasurer, or any government depository unless it is countersigned by a duly
authorized official of the Commission. When, in the opinion of the Commission, the interest of the service so
requires, the warrant or check may be paid without the countersignature under such rules and regulations as it
may be prescribed from time to time.
CHAPTER 9
ACCOUNTABILITY AND RESPONSIBILITY FOR GOVERNMENT FUNDS AND PROPERTY
Section 50. Accountable Officers; Board Requirements. -
(1) Every officer of any government agency whose duties permit or require the possession or custody
government funds shall be accountable therefor and for safekeeping thereof in conformity with law;
and
(2) Every accountable officer shall be properly bonded in accordance with law.
Section 51. Primary and Secondary Responsibility. -
(1) The head of any agency of the Government is immediately and primarily responsible for all
government funds and property pertaining to his agency;
(2) Persons entrusted with the possession or custody of the funds or property under the agency head
shall be immediately responsible to him, without prejudice to the liability of either party to the
Government.
Section 52. General Liability for Unlawful Expenditures. - Expenditures of government funds or uses of
government property in violation of law or regulations shall be a personal liability of the official or employee
found to be directly responsible therefor.
Section 53. Prohibition Against Pecuniary Interest. - No accountable or responsible officer shall be pecuniary
interested, directly or indirectly, in any contract or transaction of the agency in which he is such an officer.
CHAPTER 10
MISCELLANEOUS PROVISIONS
Section 54. Duty to Respect the Commission's Independence. - It shall be the duty of every person to respect,
protect and preserve the independence of the Commission.
Section 55. Administrative Disciplinary Action. - Subject to rules and regulations as may be approved by the
President, any unjustified failure by the public officer concerned to comply with any requirement imposed in
Title I-B, Book V of this Code shall constitute neglect of duty and shall be a ground for administrative disciplinary
action against said public officer who, upon being found guilty thereof after hearing, shall be meted out such
penalty as is commensurate with the degree of his guilt in accordance with the Civil Service Law. Repealed
unjustified failure to comply with the requirement imposed in Title I-B, Book V of this Code shall be conclusive
proof that the public officer concerned is notoriously undesirable.
Subtitle C
COMMISSION ON ELECTIONS
CHAPTER 1
GENERAL PROVISIONS
Section 1. Declaration of Policy. - The State shall at all times ensure free, orderly, honest, peaceful and credible
elections under a free and open party system which shall be allowed to evolve according to the free choice of
the people subject to the provisions of Article IX-C of the 1987 Constitution of the Philippines.
Section 2. Powers and Functions. - In addition to the powers and functions conferred upon it by the constitution,
the Commission shall have exclusive charge of the enforcement and administration of all laws relative to the
conduct of elections for the purpose of insuring free, orderly, honest, peaceful and credible elections, and
shall:
(1) Promulgate rules and regulations implementing the provisions of the Omnibus Elections Code or
other laws which the Commission is required to enforce and administer;
(2) Fix other reasonable periods for certain pre-election requirements in order that voters shall not be
deprived of their rights of suffrage and certain groups of rights granted them in the Omnibus Election
Code;
Unless indicated in the Omnibus Election Code, the Commission is hereby authorized to fix the
appropriate period for the various prohibited acts enumerated therein, consistent with the requirements
of free, orderly, honest, peaceful and credible elections.
(3) Exercise direct and immediate supervision and control over national and local officials or
employees, including members of any national or local law enforcement agency and instrumentality of
the government required by law to perform duties relative to the conduct of elections, plebiscite,
referendum, recall and initiative. In addition, it may authorize CMT cadets, eighteen years of age and
above to act as its deputies for the purpose of enforcing its orders;
The Commission may relieve any officer or employee referred to in the preceding paragraph from the
performance of his duties relating to electoral processes who violates the election law or fails to comply
with its instructions, orders, decisions or rulings, and appoint his substitute. Upon recommendation of the
Commission, the corresponding proper authority shall suspend or remove from office any or all of such
officers or employees who may after due process, be found guilty of such violation or failure.
(4) During the period of the campaign and ending thirty days thereafter, when in any area of the
country there are persons committing acts of terrorism to influence people to vote for or against any
candidate or political party, the Commission shall have the power to authorize any member or
members of the Armed Forces of the Philippines, the National Bureau of Investigation, the Integrated
National Police or any similar agency or instrumentality of the government, except civilian home
defense forces, to act as deputies for the purpose of insuring the holding of free, orderly, honest,
peaceful and credible elections;
(5) Publish at least ten (10) days before an election in a newspaper of general circulation certified data
on the number of official ballots and election returns and the names and address of the printers and the
number printed by each;
(6) Refuse, motu propio or upon a verified petition, to give due course to or cancel a certificate of
candidacy if it is shown that said certificate has been filed to put the election process in mockery or
disrepute or to cause confusion among the voters by the similarity of the names of the registered
candidates or by other circumstances or acts which clearly demonstrate that the candidate has no
bona fide intention to run for the office for which the certificate of candidacy has been filed and thus
prevent a faithful determination of the true will of the electorate;
(7) Postpone, motu propio or upon verified petition and after due notice and hearing whereby all
interested parties are afforded equal opportunity to be heard, the election 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, when for any serious cause such as violence, terrorism, loss or destruction
of election paraphernalia or records, force majeure, and other analogous causes the holding of a free,
orderly, honest, peaceful and credible election should become impossible in any political subdivision.
(8) Call for the holding or continuation of election not held in any polling place where on account of
force majeure, violence, terrorism, fraud or other analogous causes the election 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. Such call should be on the basis of a
verified petition by any interested party and after due notice and hearing and the new date 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 (30) days after the cessation of the cause of such postponement or suspension
of the election or failure to elect.
(9) Call a special election to elect the member to serve the unexpired portion in case a vacancy arises
in the Senate or in the House of Representatives eighteen (18) months or more before a regular election,
to be held within sixty (60) days after the vacancy occurs;
(10) Summon the parties to a controversy pending before it, issue subpoena duces tecum and take
testimony in any investigation or hearing before it, and delegate such power to any officer of the
Commission who shall be a member of the Philippine Bar. In case of failure of a witness to attend, the
Commission, upon proof of service of the subpoena to said witness, may issue a warrant to arrest the
witness and bring him before the Commission or the officer before whom his attendance is required;
Any controversy submitted to the Commission shall, after compliance with the requirements of due
process, be immediately heard and decided by it within sixty (60) days from the date of its submission
for decision or resolution. No decision or resolution shall be rendered by the Commission either en banc
or by division unless taken up in a formal session properly convened for the purpose;
The Commission may when necessary, avail itself of the assistance of any national or local law
enforcement agency and or instrumentality of the government to execute under its direct and
immediate supervision any of its final decisions, orders, instruction or rulings;
(11) Punish for contempt according to the procedure, and with the same penalties provided, in the
Rules of Court. Any violation of any final and executory decision, order or ruling of the Commission shall
constitute contempt thereof;
(12) Enforce and execute its decisions, directives, orders and instructions which shall have precedence
over those emanating from any other authority, except the Supreme Court and those issued in habeas
corpus proceedings;
(13) Prescribe the forms to be used in the election, plebiscite or referendum, recall or initiative;
(14) Procure any supplies, equipment, materials or services needed for the holding of the election by
public bidding; but if it finds the requirements of public bidding impractical to observe, then by
negotiations or sealed bids, and in both cases, the accredited parties shall be duly notified;
(15) Prescribe the use or adoption of the latest technological and electronic devices, taking into
account the situation prevailing in the area and funds available for the purpose. The Commission shall
notify the authorized representatives of accredited political parties and candidates in areas affected
by the use or adoption of technological and electronic devices not less than thirty days prior to the
effectivity of the use of such devices;
(16) Constitute a pool of standby-teachers from which substitutes shall be drawn in case a member/s of
the Board of Election Inspectors who, for one reason or another, failed to report or refused to act as
such on the day of election.
(17) Carry out a continuing and systematic campaign through newspapers of general circulation, radio
and other media forms to educate the public and fully inform the electorate about election laws,
procedures, decisions, and other matters relative to the works and duties of the Commission and the
necessity of clean, free, orderly, honest, peaceful and credible electoral processes;
(18) Accredit non-partisan groups or organizations of citizens from the civic, youth, professional,
education, business or labor sectors known for their probity, impartiality and integrity with the
membership and capability to undertake a coordinated operation and activity to assist it in the
implementation of the provisions of Omnibus Election Code and the resolutions, orders and instructions
of the Commission for purpose of ensuring free, orderly, honest, peaceful and credible elections in any
constituency. Such groups or organization shall functions under the direct and immediate control and
supervision of the Commission;
(19) Conduct hearings on controversies pending before it in the cities or provinces upon proper motion
of any party, taking into consideration the materiality and number of witnesses to be presented, the
situation prevailing in the area and the fund available for the purpose;
(20) Have exclusive jurisdiction over all pre-proclamation controversies. It may motu proprio or upon
written petition, and after due notice and hearing, order the partial or total suspension of the
proclamation of any candidate-elect or annul partially or totally any proclamation, if one has been
made, as the evidence shall warrant. Notwithstanding the pendency of any preproclamation
controversy, the Commission may, motu propio or upon filing of a verified petition and after due notice
and hearing, order the proclamation of other winning candidates whose election will not be affected
by the outcome of the controversy.
(21) Have the exclusive power, through its duly authorized legal officers, to conduct preliminary
investigation of all election offenses punishable under the Omnibus Election Code and to prosecute the
same. The Commission may avail itself of the assistance of other prosecuting arms of the government:
Provided, however, that in the event that the Commission fails to act on any complaint within four (4)
months from its filing, the complainant may file the complaint with the office of the fiscal or with the
Department of Justice for proper investigation and prosecution, if warranted; and
(22) Perform such other functions as may be provided by law.
Section 3. Enforcement Powers. - For the effective enforcement of the provisions of the Omnibus Election Code,
the Commission is further vested and charged with the following powers, duties and responsibilities:
1. To stop any illegal activity, or confiscate, tear down, and stop any unlawful, libelous, misleading or
false election propaganda, after due notice and hearing; and
2. To inquire into the financial records of candidates and any organization or group of persons, motu
propio or upon written representation for probable cause by any candidate, organization or group of
persons or qualified voter, after due notice and hearing.
For purposes of this Section, the Commission may avail itself of the assistance of the Commission on Audit, the
Central Bank, the National Bureau of Investigation, the Bureau of Internal Revenue, the Armed Forces of the
Philippines, the Integrated National Police of the Philippines, barangay officials and other agencies of the
government.
CHAPTER 2
THE COMMISSION PROPER
Section 4. Composition and Qualifications. - There shall be a Commission on Elections composed of a Chairman
and six (6) Commissioners who shall be natural born citizens of the Philippines and, at the time of their
appointment, at least thirty-five (35) years of age, holders of a college degree, and must not have been
candidates for any elective position in the immediately preceding elections. However, a majority thereof,
including the Chairman, shall be members of the Philippine Bar who have been engaged in the practice of law
for at least ten (10) years.
Section 5. Appointment and Term of Office. - The Chairman and the Commissioners shall be appointed by the
President with the consent of the Commission on Appointments for a term of seven (7) years without
reappointment. Of those first appointed, three (3) Members shall hold office for seven (7) years, two (2)
members for five (5) years, and the last members for three (3) years, without reappointment. Appointment to
any vacancy shall be only for the unexpired term of the predecessor. In no case shall any Member be
appointed or designated in a temporary or acting capacity.
Section 6. Disqualifications. - The Chairman and members of the Commission shall be subject to the canons of
judicial ethics in the discharge of their functions.
No chairman or commissioners shall sit in any case in which he has manifested bias or prejudice or antagonism
against any party thereto and in connection therewith, or in any case in which he would be disqualified under
the Rules of Court. If it be claimed that the chairman or a commissioner is disqualified as above provided, the
party objecting to his competency may file his objection in writing with the Commission stating the ground
therefor. The official concerned shall continue to participate in the hearing or withdraw therefrom in
accordance with his determination of the question of his disqualification. The decision shall forthwith be made
in writing and filed with the other papers of the case in accordance with the Rules of Court. If a disqualification
should result in a lack of quorum in the Commission sitting en banc, the Presiding Justice of the Court of
Appeals shall designate a justice of said court to sit in said case for the purpose of hearing and reaching a
decision thereon.
Section 7. Chairman as Executive Officer; Powers and Duties. - The Chairman, who shall be the Chief Executive
Officer of the Commission, shall:
(1) Execute and administer the policies, decisions, orders and resolutions approved by the Commission;
(2) Direct and supervise the operations and internal administration of the Commission;
(3) Sign appointments of subordinate officials and employees made by the Commission and enforce
decisions on administrative discipline involving them;
(4) Make temporary assignments, rotate and transfer personnel in accordance with the provisions of the
civil service law;
(5) Submit an annual budget to the Commission for its approval;
(6) Delegate his authority, in whole or in part, to other officials of the Commission, in accordance with
the rules and regulations of the Commission; and
(7) Perform such other duties as may be authorized by the Commission.
Section 8. Executive Director; Powers and Duties. - The Executive Director of the Commission shall:
(1) Advise and assist the Chairman in the formulation and implementation of the objectives, policies,
plans and programs of the Commission;
(2) Serve as the principal assistant of the Chairman in the overall supervision of the administrative
business of the Commission;
(3) Oversee all the operational activities of the Commission;
(4) Coordinate the programs and projects of the Commission and be responsible for its economical,
efficient and effective administration;
(5) Serve as deputy to the Chairman in all matters relating to the operational activities of the
Commission;
(6) Administer oaths in connection with all matters relating to the business of the Commission; and
(7) Perform such other duties as may be assigned by the Chairman.
Section 9. Staff and Operating Units. - The Commission shall have the following staff and operating units: Office
of the Chairman, Office of the Executive Director, Office of the Electoral Contests Adjudication, Regional
Offices, Election and Barangay Affairs Department, Law Department, Election Records and Statistics
Department, Administrative Service Department, Planning Department, Personnel Department, Finance
Services Department and Education and Information Department.
Section 10. Duties and Functions of Offices and Departments of the Commission. - The different offices and
departments of the Commission shall operate in accordance with their respective duties and functions
assigned to them by the Commission, subject to the requirements of efficiency, economy and effectiveness,
and pertinent Budget and Civil Service Law, rules and regulations.
CHAPTER 3
THE FIELD OFFICES
Section 11. Field Office of the Commission. - The Commission shall have the following field offices:
(1) Regional Election Office, headed by the Regional Election Director and assisted by the Assistant
Regional Director and such other subordinate officers or employees as the Commission may appoint;
(2) Provincial Election Office, headed by the Provincial Election Supervisor and assisted by such other
subordinate officers or employees as the Commission may appoint;
(3) City Municipal Election Office, headed by the City/Municipal Election Registrar who shall be assisted
by an election clerk and such other employees as the Commission may appoint.
The Commission may delegate its powers and functions or order the implementation or enforcement of
its orders, rulings or decisions through the heads of its field offices.
Section 12. Qualifications of Heads of field Offices. - Only members of the Philippines Bar shall be eligible for
appointment to the position of regional director, assistant regional director, provincial election supervisor and
election registrar. However, if there are no members of the Philippine Bar available for appointment as election
registrar, except in cities and capital towns, graduates of duly recognized schools of law, liberal arts, education
or business administration who possess the appropriate civil service eligibility may be appointed to said position.
Section 13. Changes in the Composition, Distribution of Assignment of Field Offices. - The Commission may
make changes in the composition, distribution and assignment of field offices, as well as its personnel,
whenever the exigencies of the service and the interest of free, orderly, honest, peaceful and credible election
so require: Provided, That such changes shall be effective and enforceable only for the duration of the election
period concerned and shall not affect the tenure of office of the incumbents of positions affected and shall not
constitute a demotion, either in rank of salary, nor result in a change of status; and Provided, further, that there
shall be no changes in the composition, distribution or assignment within thirty (30) days before election, except
for cause and after due notice and hearing, and that in no case shall a regional or assistant regional director
be assigned to a region, or a provincial election supervisor to a province, or a city municipal election registrar
to a city or municipality, where he and/or his spouse are related to any candidate within the fourth civil degree
of consanguinity or affinity as the case may be.
Title II
OTHER BODIES
Subtitle A
Commission on Human Rights
Section 1. Composition and Qualification. - The Commission on Human Rights shall be composed of a
Chairman and four (4) Members who must be natural-born citizens of the Philippines and, at the time of their
appointment, at least thirty-five years of age, and must not have been candidates for any elective position in
the elections immediately preceding their appointment. However, a majority thereof shall be members of the
Philippine Bar.
Section 2. Powers and Functions. - The Commission on Human Rights shall:
(1) Investigate, on its own or on complaint by any party, all forms of human rights violations involving civil
and political rights;
(2) Adopt its operational guidelines and rules of procedure, and cite for contempt violations thereof in
accordance with the Rules of Court;
(3) Provide appropriate legal measures for the protection of human rights of all persons within the
Philippines, as well as Filipinos residing abroad, and provide for preventive measures and legal aid
services to the under-privileged whose human rights have been violated or need protection;
(4) Exercise visitorial powers over jails prisons, or detention facilities;
(5) Establish a continuing program of research, education and information to enhance respect for the
primacy of human rights;
(6) Recommend to the Congress effective measures to promote human rights and to provide for
compensation to victims of violations of human rights, or their families;
(7) Monitor the Philippine Government's compliance with international treaty obligations on human
rights;
(8) Grant immunity from prosecution to any person whose testimony or whose possession of documents
or other evidence is necessary or convenient to determine the truth in any investigation conducted by it
or under its authority;
(9) Request the assistance of any department, bureau, office, or agency in the performance of its
functions;
(10) Appoint its officers and employees in accordance with law; and
(11) Perform such other duties and functions as may be provided by law.
Section 3. Inhibitions Against Commissioners. - The Chairman and the Members of the Commission on Human
Rights shall not, during their tenure, hold any other office or employment. Neither shall they engage in the
practice of any profession or in the active management or control of any business which in any way will be
affected by the functions of their office, nor shall they be financially interested, directly or indirectly, in any
contract with, or in any franchise or privilege granted by the government, any of its subdivisions, agencies, or
instrumentalities, including government-owned or controlled corporations or their subsidiaries.
Section 4. Term of Office. - The Chairman and the Members of the Commission on Human Rights shall be
appointed by the President for a term of seven years without reappointment. Appointment to any vacancy
shall be only for the unexpired term of the predecessor.
Section 5. Compensation. - The Chairman and the Members of the Commission on Human Rights shall receive
the same salary as the Chairman and Members, respectively, of the Constitutional Commissions, which shall not
be decreased during their term of office.
Section 6. Annual Appropriations. - The approved annual appropriations of the Commission on Human Rights
shall be automatically and regularly released.
Subtitle B
Office of the Ombudsman
Section 1. Composition. -
(1) The Office of the Ombudsman shall be headed by the Ombudsman, to be known as the Tanod-
bayan, who shall be assisted by one overall Deputy and at least by one Deputy each for Luzon, Visayas
and Mindanao. A separate Deputy for the military establishment may likewise be appointed.
(2) It shall have such other officials and employees, to be appointed by the Ombudsman according to
the Civil Service Law.
Section 2. Powers and Functions. - The Office of the Ombudsman shall:
(1) Investigate on its own, or on complaint by any person, any act or omission of any public official,
employee, office or agency, when such act or omission appears to be illegal, unjust, improper, or
inefficient;
(2) Direct, upon complaint or at its own instance, any public official or employee of the Government, or
any subdivision, agency or instrumentality thereof, as well as of any government-owned or controlled
corporation with original charter, to perform and expedite any act or duty required by law, or to stop,
prevent, and correct any abuse or impropriety in the performance of duties;
(3) Direct the officer concerned to take appropriate action against a public official or employee at
fault, and recommend his removal, suspension, demotion, fine, censure, or prosecution, and ensure
compliance therewith;
(4) Direct the officer concerned, in any appropriate case, and subject to such limitations as may be
provided by law, to furnish it with copies of documents relating to contracts or transactions entered into
by his office involving the disbursement or use of public funds or properties, and report any irregularity to
the Commission on Audit for appropriate action;
(5) Request any government agency for assistance and information necessary in the discharge of its
responsibilities, and to examine, if necessary, pertinent records and documents;
(6) Publicize matters covered by its investigation when circumstances so warrant and with due
prudence;
(7) Determine the causes of inefficiency; red tape, mismanagement, fraud, and corruption in the
Government and make recommendations for their elimination and the observance of high standards of
ethics and efficiency;
(8) Promulgate its rules of procedure and exercise such other powers or perform such functions or duties
as may be provided by law.
Section 3. Action and Complaints. - The Ombudsman and his Deputies, as protectors of the people, shall act
promptly on complaint filed in any form or manner against public officials or employees of the Government, or
any subdivision, agency or instrumentality thereof, including government-owned or controlled corporations,
and shall, in appropriate cases, notify the complainants of the action taken and the result thereof.
Section 4. Fiscal Autonomy. - The Office of the Ombudsman shall enjoy fiscal autonomy. Its approved annual
appropriations shall be automatically and regularly released.
Subtitle C
The National Economic and Development Authority
CHAPTER 1
GENERAL PROVISIONS
Section 1. Declaration of Policy. - The State shall ensure that all socio-economic programs and activities of the
government shall be programmed within the context of well-formulated and consistent long, medium, and
short-term development plans and policies to promote both the growth of the economy and the equitable
distribution of the benefits of such growth to the members of society. To this end, it is recognized that the
formulation of the required socio-economic development policies and plans is a vital process that calls for the
participation of the various government agencies and private sector institutions and individuals concerned,
both on national, regional, and local levels. This process of policy and plan formulation, however needs to be
coordinated closely by a central government agency to ensure consistency of these plans and policies and
optimal use of the nation's scarce resources.
Section 2. National Economic and Development Authority. - The National Economic and Development
Authority shall serve as an independent planning agency of the government.
Section 3. Powers and Functions of the Authority. - The powers and functions of the Authority are vested in the
NEDA Board.
The Authority shall primarily be responsible for formulating continuing, coordinated and fully integrated social
and economic policies, plans and programs, on the basis of the following:
(1) The State aims to achieve objectives of growth coupled with equity;
(2) Development leading to the attainment of the above mentioned goals is a multi-faceted process
that calls for the coordination and integration of policies, plans, programs and projects of all sectors of
society;
(3) In the formulation of basic policies, plans, programs and projects, there shall be maximum
participation by and consultation with concerned private sector groups, community organizations and
beneficiaries and local government units in order to ensure that priority needs are incorporated into
such policies, plans, programs and projects;
(4) National plans shall be in fact the sum of nationally and regionally identified targets and strategies
and locally formulated approaches to perceived local needs and priorities, carried out within the
framework of national strategies;
(5) Major socio-economic policies, plans, programs and projects of different government agencies must
be properly coordinated with the Authority at both the national and regional levels prior to their
adoption, in order to ensure their consistency with established national priorities and coordination with
other policies, plans, programs and projects of the government; and
(6) The linkage between development planning, programming and budgeting shall be of the highest
priority in planning and budgeting activities.
The Authority, after due consultation with the private sector, community organizations and beneficiaries, local
government units and appropriate public agencies, shall be responsible for studying, reviewing, formulating
and recommending continuing, coordinated and fully integrated economic and development policies, plans
and programs, including the formulation of annual and medium-term public investment programs,
programming official development assistance in the form of grants and concessional loans from foreign
governments and multilateral agencies and organizations and the monitoring and evaluation of plan
implementation.
Section 4. Composition of the Authority. - The Authority shall be composed of two separate and distinct entities:
the Board and the Secretariat.
CHAPTER 2
NEDA BOARD
Section 5. Composition of the NEDA Board. - The NEDA Board shall be composed of the following:
The President - Chairman

Director-General of the NEDA Secretariat - Vice-Chairman

Executive Secretary - Member

Secretary of Finance - Member

Secretary of Trade & Industry - Member

Secretary of Agriculture - Member

Secretary of Environment & Natural - Member


Resources

Secretary of Public Works and Highways - Member

Secretary of Budget and Management - Member

Secretary of Labor & Employment - Member

Secretary of Local Government - Member


The President may, however, revise the membership of the NEDA Board whenever the same is deemed
necessary for the effective performance of the Board's functions through an administrative or memorandum
order.
Section 6. Meetings. - The NEDA Board shall meet at least once a month or as frequently as is necessary to
discharge its responsibilities as called for by the President. When the President is unable to attend a meeting,
the Director-General of the NEDA may preside as Chairman, in the absence of any Presidential preference.
The President however continues to have the power to designate from among the members of the NEDA Board
the Chairman that can appropriately represent the President, to preside over specific meetings.
Section 7. National Economic Development Authority Inter-agency Committees. - To assist the NEDA Board in
the performance of its functions, there are hereby created the following committees which shall hereafter be
under the direct control of the NEDA Board and shall submit all their recommendations to the President for
approval on matters involving their respective concerns. The Chairman of these committees shall be
designated by the President. The NEDA Board shall likewise determine where the technical staff of the said
committees shall be based.
(1) Development Budget Coordination Committee (DBCC) - The DBCC, to be composed of the
Director-General of the National Economic Development Authority Secretariat, the Executive Secretary
and the Secretaries of Finance and of Budget and Management, shall have the following functions:
(a) Recommend for President's approval the level of the annual government expenditure
program and the ceiling of government spending for economic and social development,
national defense, general government and debt service;
(b) Recommend to the President the proper allocation of expenditures for each development
activity between current operating expenditures and capital outlay; and
(c) Recommend to the President the amount set to be allocated for capital outlay under each
development activity for the various capital or infrastructure projects.
(2) Investment Coordination Committee (ICC) - The ICC to be composed of the Director-General of the
National Economic Development Authority Secretariat, the Executive Secretary, the Secretaries of
Finance, Agriculture, Trade and Industry and of Budget and Management and the Governor of the
Central Bank shall have the following functions:
(a) Evaluate the fiscal, monetary and balance of payments implications of major national
projects and recommend to the President the timetable for the implementation of these
projects on a regular basis; and
(b) Recommend to the President a domestic and foreign borrowing program updated each
year; and subsequently submit to the President a status of fiscal, monetary and balance of
payments implications of major national projects.
(3) Committee on Social Development (SDC) - The SDC to be composed of the Director-General of the
National Economic Development Authority Secretariat, the Executive Secretary, and the Secretaries of
Education, Culture and Sports, Labor and Employment, Health, Local Government, Agrarian Reform,
Agriculture and Social Welfare and Development shall have the following functions:
(a) Advise the President and the NEDA Board on matters concerning social development,
including education, manpower, health and nutrition, population and family planning, housing,
human settlements and the delivery of other social services;
(b) Coordinate the activities of government agencies concerned with social development; and
(c) Recommend to the President government policies, programs and projects on social
development consistent with national development objectives and priorities.
(4) Committee on Infrastructure (INFRACOM) - the INFRACOM to be composed of the Director-General
of the National Economic Development Authority Secretariat, the Executive Secretary, and the
Secretaries of Public Works and Highways, Transportation and Communications, Finance, and Budget
and Management shall have the following functions:
(a) Advise the President and the NEDA Board or matters concerning infrastructure development
including highways, airports, seaports and shore protection; railways; power generation,
transmission and distribution; telecommunications; irrigation, flood control and drainage; water
supply; national buildings for government offices; hospitals, sanitation and related buildings;
state colleges and universities, elementary and secondary school buildings; and other public
works;
(b) Coordinate the activities of agencies, including government-owned or controlled
corporations concerned with infrastructure development; and
(c) Recommend to the President government policies, programs and projects concerning
infrastructure development consistent with national development objectives and priorities.
(5) Committee on Tariff and Related Matters (TRM) - The TRM to be composed of the Director-General of
the National Economic Development Authority Secretariat, the Executive Secretary, the Secretaries of
Trade and Industry, Foreign Affairs, Agriculture, Environment and Natural Resources and Budget and
Management, the Government of the Central Bank and the Chairman of the Tariff Commission shall
have the following functions:
(a) Advise the President and the NEDA Board on tariff and related matters, and on the effects
on the country of various international developments;
(b) Coordinate agency positions and recommend national positions for international economic
negotiations; and
(c) Recommend to the President a continuous rationalization program for the country's tariff
structure.
CHAPTER 3
NEDA SECRETARIAT
Section 8. The NEDA Secretariat. - The Secretariat of NEDA shall have the following functions:
(1) Serve as the research and technical support arm of the NEDA Board;
(2) Provide through its various organizational units, technical staff support and assistance, including the
conduct of studies and development of policy measures and other recommendations, on the various
aspects of the substantive functions of development planning and policy formulation, and
coordination, evaluation and monitoring of plan implementation;
(3) Serve as the Secretariat of the NEDA Board; and
(4) Perform such other functions as may be assigned to it by the NEDA Board to achieve its goals and
objectives.
Section 9. Structural Organization. - The NEDA Secretariat shall be composed of the Director-General, three (3)
Deputy Directors-General, five (5) Assistant Directors-General, the National Development Office, the Regional
Development Office, the Central Support Office and the Regional Offices.
Section 10. Director-General. - The Director-General shall head the Secretariat and shall likewise serve as Vice-
Chairman of the NEDA Board. He shall be appointed by the President and shall carry the rank and title of
Secretary of Socio-Economic Planning and shall be a member of the Cabinet.
As Chief Executive Officer, he shall exercise general supervision and control over its technical and
administrative personnel.
Section 11. Deputy Directors-General. - The Director General shall be assisted by three (3) Deputy Directors-
General to be appointed by the President, one to be responsible for the National Development Office, one, for
the Regional Development Office and one, for the Central Support Office.
Section 12. Assistant Directors-General. - The Director-General shall also be assisted by five (5) Assistant
Directors-General to be appointed by the President, who shall be assigned to assist the Deputy Directors-
General in their tasks of coordinating and supervising their respective Offices.
Section 13. National Development Office. - The National Development Office shall provide technical staff
support as may be required by the NEDA Board in coordinating the formulation of national and sectoral
policies, plans and programs; monitor macro-economic and sectoral performances; prepare the necessary
economic reports; conduct economic and development studies on macro-level plans and policies; and
perform such other appropriate planning tasks as may be assigned by the Director-General.
It shall be composed of the following:
(1) National Planning and Policy Staff;
(2) Agriculture Staff;
(3) Trade, Industry and Utilities Staff;
(4) Infrastructure Staff;
(5) Social Development Staff; and
(6) Public Investment Staff.
Section 14. Regional Development Office. - The Regional Development Office shall provide technical staff
support as may be required by the implementing agencies in the regions; monitor regional and inter-regional
development policies, plans and programs; prepare integrated reports on regional planning; conduct studies
on regional development policies; and perform such other planning tasks as may be assigned by the Director-
General.
It shall be composed of the following:
(1) Regional Development Coordination Staff;
(2) Project Monitoring Staff; and
(3) Regional Offices.
In each of the administrative regions, there shall be a regional office which shall be headed by a Regional
Director who shall report to the Deputy Director-General for Regional Development Office. The Regional
Director shall be appointed by the President.
Section 15. Central Support Office. - The Central Support Office shall be responsible for providing technical
assistance and support services to the Secretariat's organizational units in the areas of development
administration, internal management improvement, legal services, development information, administrative
services, and perform such other support service tasks as may be assigned by the Director-General.
It shall be composed of the following:
(1) Management Staff;
(2) Legal Staff;
(3) Administrative Staff;
(4) Management Information System Staff; and
(5) Development Information Staff.
CHAPTER 4
ATTACHED AGENCIES
Section 16. Retained Agencies. - The following agencies, currently attached to the Authority, shall continue to
be so attached for purposes of supervision;
(1) Philippine Institute for Development Studies:
(2) Philippine National Volunteer Service Coordinating Agency; and
(3) Tariff Commission.
The Authority shall arrange for the transfer of the functions of the following agencies to the Regional
Development Councils concerned or other agencies as may be appropriate:
(1) Kalinga Special Development Region;
(2) Laguna Lake Development Authority;
(3) Leyte Sab-A Basin Development Authority.
The National Council for Integrated Area Development (NACIAD) and the Central Visayas Regional Projects
Office (CVRPO) are hereby transferred to the Authority which shall, within one (1) year from the date of
effectivity of this Code, recommend their transfer to the appropriate department in conjunction with the
Department of Budget and Management. The Authority shall further review the functions and activities of all
other Integrated Area Development programs and projects and any other programs requiring multi-sectoral
and/or multi-disciplinary approaches in order to recommend the appropriate disposition and supervision of the
same.
The Authority shall furthermore review the mandate, objectives and functions of all development authorities in
order to recommend such dispositions or revisions of their charters, as may be deemed advisable.
BOOK VI
NATIONAL GOVERNMENT BUDGETING
CHAPTER 1
GENERAL PROVISIONS
Section 1. Constitutional Policies on the Budget. -
(1) All appropriations, revenue or tariff bills, bills authorizing increase of the public debt, bills of local
application, and private bills shall originate exclusively in the House of Representatives but the Senate
may propose or concur with amendments.
(2) The Congress may not increase the appropriations recommended by the President for the operation
of the Government as specified in the budget. The form, content and manner of preparation of the
budget shall be prescribed by law.
(3) No provision or enactment shall be embraced in the general appropriations bill unless it relates
specifically to some particular appropriation to which it relates.
(4) The procedures in approving appropriations for the Congress shall strictly follow the procedure for
approving appropriations for other departments and agencies.
(5) A special appropriations bill shall specify the purpose for which it is intended, and shall be supported
by funds actually available as certified by the National Treasurer or to be raised by a corresponding
revenue proposal therein.
(6) No law shall be passed authorizing any transfer of appropriations. However, the President, the
President of the Senate, the Speaker of the House of Representatives, the Chief Justice of the Supreme
Court and the heads of Constitutional Commissions may, by law, be authorized to augment any item in
the general appropriations laws for their respective offices from savings in other items of their respective
appropriations.
(7) Discretionary funds appropriated for particular official shall be disbursed only for public purposes to
be supported by appropriate vouchers and subject to such guidelines as may be prescribed by law.
(8) If, by the end of any fiscal year, the Congress shall have failed to pass the general appropriations bill
for the ensuing fiscal year, the general appropriations law for the preceding fiscal year shall be deemed
reenacted and shall remain in force and effect until the general appropriations bill is passed by the
Congress.
(9) Fiscal autonomy shall be enjoyed by the Judiciary, Constitutional Commissions, Office of the
Ombudsman, Local Government and Commission on Human Rights.
Section 2. Definition of Terms. - When used in this Book:
(1) "Appropriation" refers to an authorization made by law or other legislative enactment, directing
payment out of government funds under specified conditions or for specified purposes.
(2) "Allotment" refers to an authorization issued by the Department of the Budget to an agency, which
allows it to incur obligation for specified amounts contained in a legislative appropriation.
(3) "Budget" refers to a financial plan required to be prepared pursuant to Section 16 (1) , Article VIII of
the Constitution, reflective of national objectives, strategies and programs.
(4) "Current operating expenditures" refers to appropriations for the purchase of goods and services for
current consumption or for benefits expected to terminate within the fiscal year.
(5) "Capital outlay" or "capital expenditures" refers to an appropriation for the purchase of goods and
services, the benefits of which extend beyond the fiscal year and which add to the assets of the
Government, including investments in the capital of government-owned or controlled corporations and
their subsidiaries.
(6) "Continuing appropriation" refers to an appropriation available to support obligations for a specified
purpose or project, even when these obligations are incurred beyond the budget year.
(7) "Expected result" means service, product, or benefit that will accrue to the public, estimated in terms
of performance measures or targets.
(8) "Fiscal year" refers to the period beginning with the first day of January and ending with the thirty-first
day of December of each calendar year.
(9) The "Government" means the National Government, including the Executive, the Legislative and the
Judicial Branches, and the Constitutional Commissions.
(10) "Department and agency" and "department or agency" include all departments, bureaus, offices,
boards, commissions, courts, tribunals, councils, authorities, administrations, centers, institutes, state
colleges and universities, and all other establishments and instrumentalities of the National Government
as defined in the preceding paragraph.
(11) "Obligation" refers to an amount committed to be paid by the Government for any lawful act
made by an authorized officer for and in behalf of the Government.
(12) "Program" refers to the functions and activities necessary for the performance of a major purpose
for which a government agency is established.
(13) "Project" means a component of a program covering a homogenous group of activities that results
in the accomplishment of an identifiable output.
CHAPTER 2
BUDGET POLICY AND APPROACH
Section 3. Declaration of Policy. - It is hereby declared the policy of the State to formulate and implement a
National Budget that is an instrument of national development, reflective of national objectives, strategies and
plans. The budget shall be supportive of and consistent with the socio-economic development plan and shall
be oriented towards the achievement of explicit objectives and expected results, to ensure that funds are
utilized and operations are conducted effectively, economically and efficiently. The national budget shall be
formulated within the context of a regionalized government structure and borrowings of all levels of
government and of government-owned or controlled corporations. The budget shall likewise be prepared
within the context of the national long-term plan and of a long-term budget program.
Section 4. Planning and Budgeting Linkage. - The budget shall be formulated as an instrument for the
attainment of national development goals and as part of the planning-programming-budgeting continuum.
Levels of revenue, expenditure and debt shall be established in relation to macro-economic targets of growth,
employment levels, and price level change, and shall be developed consistent with domestic and foreign
debt, domestic credit and balance of payments objectives for the budget period. The aggregate magnitudes
of the budget shall be determined in close consultation among the planning and fiscal agencies of
government. Budgetary priorities shall be those specified in the approved national plans, keeping in mind the
capability and performance of the implementing agencies concerned. Agency budget proposals shall
explicitly state linkage to approved agency plans.
Section 5. National Resource Budget. - The finances of government shall be analyzed and determined as the
aggregate of revenue, expenditure and debt of all units of government, including the national government
and its agencies and instrumentalities, local government units and government-owned or controlled
corporations. The national government budget shall be evolved within the framework of the total impact of
government activity on the national economy. The budgets of government corporations and local
governments shall be consistent in form and timing with that of the national government, to facilitate
comprehensive evaluation.
Section 6. Regional Budgeting. - The budgets of national government agencies shall take into full and explicit
consideration the goals, plans and requirements of their respective regional offices, in the interest of full
government response to local thinking and initiative. The budget preparation process shall originate at regional
and local levels, and shall be consolidated and reviewed by the central offices of the various national
agencies. The regional development strategies and plans, including physical framework and resource-use
plans, shall be considered in the preparation of the budget.
Section 7. Long Term Budgeting. - The annual budgets of the national government shall be prepared as an
integral part of a long-term budget picture. The long-term economic and physical framework plans of
government, multi-year requirements of approved programs and projects, organizational and personnel
development strategies, and other commitments entered into or otherwise assumed by government shall be
specified in the budget process.
Section 8. Development Projects. - The development process requires the implementation of major
development projects of such size as to significantly affect the infrastructure program, debt ceilings, the
balance of payments, domestic credit, and government expenditure levels. The budget process shall formally
consider the timing of major national projects, in order to ensure the observance of established fiscal,
monetary, international payments, and other constraints.
Section 9. Performance and Financial Review. - The analysis of agency operating performance, the evaluation
of performance, the evaluation of performance relative to costs incurred and the review of agency operating
systems and procedures are inherent parts of the budget process. Agencies shall therefore design and
implement (1) management information systems yielding both performance and financial information which
will adequately monitor and control budget implementation, and (2) improvements in operating systems,
procedures and practices, so as to ensure that the targets approved in budget authorization are in fact
attained at minimum cost.
Section 10. Compensation and Position Classification. - The size of personnel services expenditures relative to
the total budget and the number of agencies and personnel in government call for an effective national
compensation and position classification policy. The Constitutional principle of a single compensation scheme
for the government and its instrumentalities is one of the bases of the government budget process.
CHAPTER 3
BUDGET PREPARATION
Section 11. Submission of the Budget. - The President shall, in accordance with Section 22 (1), article VII of the
Constitution, submit within thirty (30) days from the opening of each regular session of the Congress as the basis
for the preparation of the General Appropriations Act, a national government budget estimated receipts
based on existing and proposed revenue measures, and of estimated expenditures.
The President shall include in the budget submission the proposed expenditure level of the Legislative and
Judicial Branches and of Constitutional bodies, which shall have undergone the same process of evaluation
and which shall have been subject to the same budgetary policies and standards applicable to agencies in
the Executive Branch.
The President may transmit to the Congress from time to time, such proposed supplemental or deficiency
appropriations as are, in his judgment, (1) necessary on account of laws enacted after the transmission of the
Budget, or (2) otherwise needed in the public interest.
Section 12. Form and Content of the Budget. - The budget proposal of the President shall include current
operating expenditures and capital outlays. It shall comprise such funds as may be necessary for the operation
of the programs, projects and activities of the various departments and agencies. The proposed General
Appropriations Act and other Appropriations Acts necessary to cover the budget proposals shall be submitted
to the Congress to accompany the President's budget submission.
The budget shall be presented to the Congress in such form and content as may be approved by the President
and may include the following:
(1) A budget message setting forth in brief the government's budgetary thrusts for the budget year,
including their impact on development goals, monetary and fiscal objectives, and generally on the
implications of the revenue, expenditure and debt-proposals; and
(2) Summary financial statements setting forth:
(a) Estimated expenditures and proposed appropriations necessary for the support of the
Government for the ensuing fiscal year, including those financed from operating revenues and
from domestic and foreign borrowings;
(b) Estimated receipts during the ensuing fiscal year under laws existing at the time the budget is
transmitted and under the revenue proposals, if any, forming part of the year's financing
program;
(c) Actual appropriations, expenditures, and receipts during the last completed fiscal year;
(d) Estimated expenditures and receipts and actual or proposed appropriations during the fiscal
year in progress;
(e) Statements of the condition of the National Treasury at the end of the last completed fiscal
year, the estimated condition of the Treasury at the end of the fiscal year in progress and the
estimated condition of the Treasury at the end of the ensuing fiscal year, taking into account the
adoption of financial proposals contained in the budget and showing, at the same time, the
unencumbered and unobligated cash resources;
(f) Essential facts regarding the bonded and other long-term obligations and indebtedness of
the Government, both domestic and foreign, including identification of recipients of loan
proceeds; and
(g) Such other financial statements and data as are deemed necessary or desirable in order to
make known in reasonable detail the financial condition of the government.
Section 13. Budget Levels. - The ordinary income of government shall be used primarily to provide
appropriations for current operations, except in case of a national emergency or serious financial stress, the
existence of which has been duly proclaimed by the President.
The level of aggregate revenue expenditure and debt shall be jointly recommended to the President by the
Department of Budget and Management, the Department of Finance, the National Economic and
Development Authority and the Central Bank of the Philippines, acting within the Development Budget
Coordination Committee of the National Economic and Development Authority.
No appropriations for current operations and capital outlays of the Government shall be proposed unless the
amount involved is covered by the ordinary income, or unless it is supported by a proposal creating additional
sources of funds or revenue, including those generated from domestic and foreign borrowings, sufficient to
cover the same. Likewise, no appropriation for any expenditure, the amount of which is not covered by the
estimated income from the existing sources of revenue or available current surplus, may be proposed, unless it
is supported by a proposal creating an additional source of funds sufficient to cover the same.
Proposals creating additional sources of funds shall be prepared in the form of revenue bills.
The provisions of this section shall not be construed as impairing in any way the power of the Congress to enact
revenue and appropriation bills, nor the authority of the President to propose special revenue and
appropriation bills after the submission of the budget.
Section 14. Budget Estimates. - Each head of department, office or agency of the National Government,
including the Legislative and Judicial Branches, and including government owned or controlled corporations,
shall submit his request for appropriations to the Department of Budget in accordance with the budget
calendar, format, and such rules and regulations as may be issued in implementation of this Decree.
The budget estimates of agencies shall include the following information:
(1) Objectives, functions, activities, programs and projects showing the general character and relative
importance of the work to be accomplished or the services to be rendered, and the principal elements
of cost involved;
(2) Linkage of the work and financial proposals to approved development plans;
(3) Estimated current operating expenditures and capital outlays, with comparative data for the
preceding and current budget years;
(4) Identification by region, pursuant to policies on the regionalization of government operations;
(5) Financial sources, reflecting all revenues, proceeds of foreign and domestic borrowings, and other
sources, particularly those which accrue to the General Funds;
(6) Contingent liabilities, including national government guarantees of obligations of government-
owned or controlled corporations and their subsidiaries;
(7) Brief description of the major thrusts and priority programs and projects for the budget year, results
expected for each budgetary program and project, the nature of work to be performed, estimated
costs per unit of work measurement, including the various objects of expenditure for each project;
(8) Organization charts and staffing patterns indicating the list of existing and proposed positions with
corresponding salaries, and proposals for position classification and salary changes, duly supported by
adequate justification.
Section 15. Regional Budget. - The Budgets of national government agencies shall be prepared taking into full
and careful consideration the opportunities and requirements specific to the various regions of the country.
Where they are organized, regional offices shall originate agency budget proposals, in accordance with
approved priorities and guidelines.
Agencies which are not regionalized shall nonetheless estimate the amounts planned to be spent for each
region of the country.
The Secretary shall identify by region the expenditure programs of the national government agencies in the
national government budget, and release funds to national government agencies in accordance with the
approved regional distribution of expenditures, specifying the region of destination.
Departments and agencies shall sub-allot in full and without the imposition of reserves, the approved budget
allocation of their various regional offices, except as may be authorized by the Secretary, in case realignment
of expenditures prove to be necessary in the course of budget execution. The Secretary shall issue the rules and
regulations needed to implement the provisions of this section.
Section 16. Budget Evaluation. - Agency proposals shall be reviewed on the basis of their own merits and not on
the basis of a given percentage or peso increase or decrease from a prior year's budget level, or other similar
rule of thumb that is not based on specific justification. Proposed activities, whether new or ongoing, shall be
evaluated using a zero-base approach and on the basis of (1) relationship with the approved development
plan, (2) agency capability as demonstrated by past performance, (3) complemental role with related
activities of other agencies, and (4) other similar criteria. The realization of savings in a given budget year and
the consequent non-utilization of funds appropriated or released to a given agency shall not be a negative
factor in the budget evaluation for a subsequent year.
Section 17. Foreign-Assisted Projects. - The budgetary implications of foreign-assisted projects shall be explicitly
considered at the time of project design and financing negotiation. The project study shall specify the cash
flow requirements of the project, among others, for (1) payment of principal and interest, (2) peso component
of capital costs and project preparation, (3) infrastructure and support facilities needed to be directly financed
by government, (4) operating and other expenditures which will be ultimately required for General Fund
support when the project is implemented, and (5) peso requirements needed as counterpart. The concurrence
of the Department of Budget and Management shall be obtained with respect to peso requirements and
implication on expenditure ceilings.
Section 18. Coordinating Bodies. - The budgets of coordinating agencies, councils, task forces, authorities,
committees, or other similar bodies shall be limited to and used to fund only such planning, coordinating and
monitoring functions as are assigned to it. Funds for implementation shall be budgeted and released to the line
implementing agencies concerned; provided, that the budgets of coordinating bodies may include a lump-
sum for purposes related to their assigned functions, which lump-sum shall be sub-allotted to implementing
agencies and not used by the agency for its own operations: provided, further, that funds budgeted for a
given agency falling within the jurisdiction of a coordinating body, may be subject to release upon approval by
the coordinating agency of such release or of the agency's work program.
Section 19. Budgetary Requirements of Government-Owned or Controlled Corporations. - The internal
operating budgets of government-owned or controlled corporations and of chartered institutions shall be
approved by their respective governing boards in accordance with a budget calendar and format as may be
approved by the President: Provided, that such budgets shall be subject to review and approval as part of the
budget process in cases where national government budgetary support is needed, in terms of (a) capital or
equity inputs, (b) operating contributions to support specific activities undertaken by the institution as part of its
regular functions, and (c) guarantee of the national government for obligations or contracts entered into by
the corporations: provided, further, that the submission of interim financial statements may be required by the
Secretary.
Section 20. Tax and Duty Exemptions. - All units of government, including government-owned or controlled
corporations, shall pay income taxes, customs duties and other taxes and fees as are imposed under revenue
law: provided, that organizations otherwise exempted by law for the payment of such taxes/duties may ask for
a subsidy from the General Fund in the exact amount of taxes/duties due: Provided, further, that a procedure
shall be established by the Secretary of Finance and the Secretary of the Budget, whereby such subsidies shall
automatically be considered as both revenue and expenditure of the General Fund.
Section 21. Appropriation for Personal Services. - Appropriations for personal services shall be considered as
included in the amount specified for each budgetary program and project of each department, Bureau, office
or agency, and shall not be itemized. The itemization of personal services shall be prepared by the Secretary for
consideration and approval of the President as provided in Section 23 hereof: Provided, That itemization of
personal services shall be prepared for all agencies of the Legislative, Executive and Judicial Branches and the
Constitutional bodies, except as may be otherwise approved by the President for positions concerned with
national security matters.
Section 22. Department Approval of Proposed Appropriations. - No legislative proposal which, if enacted,
would authorized subsequent appropriations, shall be transmitted to the President by any bureau or agency
without the prior approval of the Head of the Department concerned or by the Chairman or Chief Executive
Officer of a Cabinet level body which coordinates the multi-sectoral formulation and implementation of a
particular program of expenditure involving one or more departments. No legislative proposal involving the
appropriation of funds shall be transmitted to the Congress without the approval of the President.
CHAPTER 4
BUDGET AUTHORIZATION
Section 23. Content of the General Appropriations Act. - The General Appropriations Act shall be presented in
the form of budgetary programs and projects for each agency of the government, with the corresponding
appropriations for each program and project, including statutory provisions of specific agency or general
applicability. The General Appropriations Act shall not contain any itemization of personal services, which shall
be prepared by the Secretary after enactment of the General Appropriations Act, for consideration and
approval of the President.
Section 24. Prohibition Against the Increase of Appropriation. - The Congress shall in no case increase the
appropriation of any project or program of any department, bureau, agency or office of the Government over
the amount submitted by the President in his budget proposal. In case of any reduction in the proposed
appropriation for a project or program, a corresponding reduction shall be made in the total appropriation of
the department, office or agency concerned and in the total of the General Appropriations Bill.
Section 25. Prohibition Against Enactment of Additional Special Provisions. - The Congress shall not add special
provisions in the budget earmarking the use of appropriations for specific programs or activities nor shall it
increase the amounts specified in special provisions beyond those proposed by the President.
Section 26. Automatic Appropriations. - All expenditures for (1) personnel retirement premiums, government
service insurance, and other similar fixed expenditures, (2) principal and interest on public debt, (3) national
government guarantees of obligations which are drawn upon, are automatically appropriated: provided, that
no obligations shall be incurred or payments made from funds thus automatically appropriated except as
issued in the form of regular budgetary allotments.
Section 27. Supplemental Appropriations. - All appropriation proposals shall be included and considered in the
budget preparation process. After the President shall have submitted the Budget, no supplemental
appropriation measure supported from existing revenue measures shall be passed by the Congress. However,
supplemental or deficiency appropriations involving the creation of new offices, programs or activities may be
enacted if accompanied and supported by new revenue sources.
Section 28. Reversion of Unexpended Balances of Appropriations, Continuing Appropriations. - Unexpended
balances of appropriations authorized in the General Appropriation Act shall revert to the unappropriated
surplus of the General Fund at the end of the fiscal year and shall not thereafter be available for expenditure
except by subsequent legislative enactment: Provided, that appropriations for capital outlays shall remain valid
until fully spent or reverted: provided, further, that continuing appropriations for current operating expenditures
may be specifically recommended and approved as such in support of projects whose effective
implementation calls for multi-year expenditure commitments: provided, finally, that the President may
authorize the use of savings realized by an agency during given year to meet non-recurring expenditures in a
subsequent year.
The balances of continuing appropriations shall be reviewed as part of the annual budget preparation process
and the preparation process and the President may approve upon recommendation of the Secretary, the
reversion of funds no longer needed in connection with the activities funded by said continuing appropriations.
Section 29. Loan Proceeds. - Expenditures funded by foreign and domestic borrowings shall be included within
the expenditure program of the agency concerned. Loan proceeds, whether in cash or in kind, shall not be
used without the corresponding release of funds through a Special Budget as herein provided.
Section 30. Contingent Liabilities. - Government agencies, particularly government-owned or controlled
corporations, shall periodically report to the Secretary of Finance and the Secretary of Budget on the status of
obligations they have entered into and which are the subject of government guarantees.
Section 31. Liability for Unauthorized Printing Press Revisions. - It shall be unlawful for any person to make any
unauthorized revision of any figure, text or provision in the General Appropriations Act and in the other budget
documents during or in the process of the printing. Any unauthorized change made either by addition,
modification or deletion, shall be null and void.
Persons who, in violation of this section, make any unauthorized revision in the budget documents, shall be
criminally liable for falsification of legislative documents under the Revised Penal Code. When the offender is a
government official or employee, he shall, in addition to criminal prosecution, be dismissed from the service.
CHAPTER 5
BUDGET EXECUTION
Section 32. Use of Appropriated Funds. - All moneys appropriated for functions, activities, projects and
programs shall be available solely for the specific purposes for which these are appropriated.
Section 33. Allotment of Appropriations. - Authorized appropriations shall be allotted in accordance with the
procedure outlined hereunder:
(1) Appropriations authorized for any Department or agency of the Government may be made
available for expenditure when the head of each Department or agency submits to the Secretary a
request for allotment of funds showing the estimated amounts needed for each function, activity or
purpose for which the funds are to be expended during the applicable allotment period. The form and
the time of submission of the request for allotment showing the proposed quarterly allotments of the
whole authorized appropriation for the department or agency, shall be prescribed by the Secretary.
(2) In the administration of the allotment system herein provided, each calendar year shall be divided
into four quarterly allotment periods beginning, respectively, on the first day of January, April, July and
October. In any case where the quarterly allotment period is found to be impractical or otherwise
undesirable, the Secretary may prescribe a different period suited to the circumstances.
(3) Request for allotment shall be approved by the Secretary who shall ensure that expenditures are
covered by appropriations both as to amount and purpose and who shall consider the probable needs
of the department or agency for the remainder of the fiscal year or period for which the appropriation
was made.
(4) At the end of every quarter, each department or agency shall report to the Secretary the current
status of its appropriations, the cumulative allotments, obligations incurred or liquidated, total
disbursements, unliquidated obligations and unexpended balances and the results of expended
appropriations.
(5) Releases of funds appropriated for a given agency may be made to its regional offices if dictated
by the need and urgency of regional activities.
(6) The Secretary shall have authority to modify or amend any allotment previously issued. In case he
shall find at any time that the probable receipts from taxes or other sources of any fund will be less than
anticipated and that as a consequence the amount available for the remainder of the term of the
appropriations or for any allotment period will be less than the amount estimated or allotted therefor, he
shall, with the approval of the President and after notice to the department or agency concerned,
reduce the amount or amounts allotted so as to conform to the targeted budgetary goals.
(7) The Secretary shall maintain a control record showing quarterly by funds, accounts, and other
suitable classifications, the amounts appropriated; the estimated revenues, the actual revenues or
receipts, the amounts allotted and available for expenditures, the unliquidated obligations, actual
balances on hand, and the unencumbered balance of the allotments for each department or agency
of the Government.
Section 34. Program of Expenditure. - The Secretary of Budget shall recommend to the President the year's
program of expenditure for each agency of the government on the basis of authorized appropriations. The
approved expenditure program shall constitute the basis for fund release during the fiscal period, subject to
such policies, rules and regulations as may be approved by the President.
Section 35. Special Budgets for Lump-Sum Appropriations. - Expenditures from lump-sum appropriations
authorized for any purpose or for any department, office or agency in any annual General Appropriations Act
or other Act and from any fund of the National Government, shall be made in accordance with a special
budget to be approved by the President, which shall include but shall not be limited to the number of each
kind of position, the designations, and the annual salary proposed for which an appropriation is intended. This
provision shall be applicable to all revolving funds, receipts which are automatically made available for
expenditure for certain specific purposes, aids and donations for carrying out certain activities, or deposits
made to cover to cost of special services to be rendered to private parties. Unless otherwise expressly provided
by law, when any Board, head of department, chief of bureau or office, or any other official, is authorized to
appropriate, allot, distribute or spend any lump-sum appropriation or special, bond, trust, and other funds, such
authority shall be subject to the provisions of this section.
In case of any lump-sum appropriation for salaries and wages of temporary and emergency laborers and
employees, including contractual personnel, provided in any General Appropriation Act or other Acts, the
expenditure of such appropriation shall be limited to the employment of persons paid by the month, by the
day, or by the hour.
Section 36. Cash Budgets. - An operational cash budget shall be implemented to ensure the availability of cash
resources for priority development projects and to establish a sound basis for determining the level, type and
timing of public borrowings. The procedure, formal, accounts, and other details necessary for the execution,
monitoring and control aspects of the system shall be determined jointly by the Secretary of Finance, the
Secretary of the Budget and the Chairman of the Commission on Audit.
Section 37. Creation of Appropriation Reserves. - The Secretary may establish reserves against appropriations to
provide for contingencies and emergencies which may arise later in the calendar year and which would
otherwise require deficiency appropriations.
The establishment of appropriation reserves shall not necessarily mean that such portion of the appropriation
will not be made available for expenditure. Should conditions change during the fiscal year justifying the use of
the reserve, necessary adjudgments may be made by the Secretary when requested by the department,
official or agency concerned.
Section 38. Suspension of Expenditure of Appropriations. - Except as otherwise provided in the General
Appropriations Act and whenever in his judgment the public interest so requires, the President, upon notice to
the head of office concerned, is authorized to suspend or otherwise stop further expenditure of funds allotted
for any agency, or any other expenditure authorized in the General Appropriations Act, except for personal
services appropriations used for permanent officials and employees.
Section 39. Authority to Use Savings in Appropriations to Cover Deficits. - Except as otherwise provided in the
General Appropriations Act, any savings in the regular appropriations authorized in the General Appropriations
Act for programs and projects of any department, office or agency, may, with the approval of the President,
be used to cover a deficit in any other item of the regular appropriations: provided, that the creation of new
positions or increase of salaries shall not be allowed to be funded from budgetary savings except when
specifically authorized by law: provided, further, that whenever authorized positions are transferred from one
program or project to another within the same department, office or agency, the corresponding amounts
appropriated for personal services are also deemed transferred, without, however increasing the total outlay
for personal services of the department, office or agency concerned.
Section 40. Certification of Availability of Funds. - No funds shall be disbursed, and no expenditures or
obligations chargeable against any authorized allotment shall be incurred or authorized in any department,
office or agency without first securing the certification of its Chief Accountant or head of accounting unit as to
the availability of funds and the allotment to which the expenditure or obligation may be properly charged.
No obligation shall be certified to accounts payable unless the obligation is founded on a valid claim that is
properly supported by sufficient evidence and unless there is proper authority for its incurrence. Any
certification for a non-existent or fictitious obligation and/or creditor shall be considered void. The certifying
official shall be dismissed from the service, without prejudice to criminal prosecution under the provisions of the
Revised Penal Code. Any payment made under such certification shall be illegal and every official authorizing
or making such payment, or taking part therein or receiving such payment, shall be jointly and severally liable
to the government for the full amount so paid or received.
Section 41. Prohibition Against the Incurrence of Overdraft. - Heads of departments, bureaus, offices and
agencies shall not incur nor authorize the incurrence of expenditures or obligations in excess of allotments
released by the Secretary for their respective departments, offices and agencies. Parties responsible for the
incurrence of overdrafts shall be held personally liable therefor.
Section 42. Adjustment of Appropriations for Reorganization. - When under authority of law, a function or an
activity is transferred or assigned from one agency to another, the balances of appropriations which are
determined by the head of such department to be available and necessary to finance or discharge the
function or activity so transferred or assigned may, with the approval of the President, be transferred to and be
made available for use by the agency to which said function or activity is transferred or assigned for the
purpose for which said funds were originally available. Balances so transferred shall be credited to any
applicable existing appropriation account or to new appropriation accounts which are hereby authorized to
be established, and shall be merged with any fund already in the applicable existing or newly established
appropriation account or accounts and thereafter accounted for as one fund.
The funding requirement of agencies reorganized in accordance with approved reorganization plans or
reorganized pursuant to law enacted after the approval of the General Appropriations Act, are deemed
appropriated and shall be available for expenditure as soon as the reorganization plans are approved. The
Secretary of Budget is hereby authorized to make necessary adjustments in the appropriations to carry out the
provisions of this section. The department head concerned, with the approval of the Secretary of Budget, is
hereby authorized to make necessary salary adjustments resulting from final selection of personnel to fill the
positions in the staffing patterns of reorganized agencies, to make necessary salary adjustments resulting from
new appointments, promotions or salary increases, subject to the provisions of Presidential Decree No. 985.
Section 43. Liability for Illegal Expenditures. - Every expenditure or obligation authorized or incurred in violation
of the provisions of this Code or of the general and special provisions contained in the annual General or other
Appropriations Act shall be void. Every payment made in violation of said provisions shall be illegal and every
official or employee authorizing or making such payment, or taking part therein, and every person receiving
such payment shall be jointly and severally liable to the Government for the full amount so paid or received.
Any official or employee of the Government knowingly incurring any obligation, or authorizing any expenditure
in violation of the provisions herein, or taking part therein, shall be dismissed from the service, after due notice
and hearing by the duly authorized appointing official. If the appointing official is other than the President and
should he fail to remove such official or employee, the President may exercise the power of removal.
Section 44. Accrual of Income to Unappropriated Surplus of the General Fund. - Unless otherwise specifically
provided by law, all income accruing to the departments, offices and agencies by virtue of the provisions of
existing laws, orders and regulations shall be deposited in the National Treasury or in the duly authorized
depository of the Government and shall accrue to the unappropriated surplus of the General Fund of the
Government: Provided, That amounts received in trust and from business-type activities of government may be
separately recorded and disbursed in accordance with such rules and regulations as may be determined by
the Permanent Committee created under this Act.
Section 45. Special, Fiduciary and Trust Funds. - Receipts shall be recorded as income of Special, Fiduciary or
Trust Funds or Funds other than the General Fund, only when authorized by law and following such rules and
regulations as may be issued by a Permanent Committee consisting of the Secretary of Finance as Chairman,
and the Secretary of the Budget and the Chairman, Commission on Audit, as members. The same Committee
shall likewise monitor and evaluate the activities and balances of all Funds of the national government other
than the General fund and may recommend for the consideration and approval of the President, the reversion
to the General fund of such amounts as are (1) no longer necessary for the attainment of the purposes for
which said Funds were established, (2) needed by the General fund in times of emergency, or (3) violative of
the rules and regulations adopted by the Committee: provided, that the conditions originally agreed upon at
the time the funds were received shall be observed in case of gifts or donations or other payments made by
private parties for specific purposes.
Section 46. Service Fees and Honoraria. - Agencies are authorized to charge fees, including honoraria and
other reasonable allowances, as compensation for consultation, seminars or training programs, or technical
services rendered to other government agencies or private parties. Such fees or honoraria shall be recorded as
income of the government and subject to the usual accounting, auditing and other pertinent requirements.
Section 47. Administration of Lump Sum Funds. - The Department of Budget shall administer the Lump-Sum
Funds appropriated in the General Appropriations Act, except as otherwise specified therein, including the
issuance of Treasury Warrants covering payments to implementing agencies or other creditors, as may be
authorized by the President.
Section 48. Cost Reduction. - Each head of a department bureau, office or agency shall implement a cost
reduction program for his department bureau, office or agency for the purpose of reducing cost of operations
and shall submit to the President reports on the results of the implementation thereof. The Department of
Budget shall provide technical and other necessary assistance in the design and implementation of cost
reduction activities. An incentive award not exceeding one month's salary may be granted to any official or
employee whose suggestion for cost reduction has been adopted and shall have actually resulted in cost
reduction, payable from the saving resulting therefrom.
Section 49. Authority to Use Savings for Certain Purposes. - Savings in the appropriations provided in the General
Appropriations Act may be used for the settlement of the following obligations incurred during a current fiscal
year or previous fiscal years as may be approved by Secretary in accordance with rules and procedures as
may be approved by the President:
(1) Claims of officials, employees and laborers who died or were injured in line of duty, including burial
expenses as authorized under existing law;
(2) Commutation of terminal leaves of employees due to retirement, resignation or separation from the
service through no fault of their own in accordance with the provisions of existing law, including unpaid
claims for commutation of maternity leave of absence;
(3) Payment of retirement gratuities or separation pay of employees separated from the service due to
government reorganization;
(4) Payment of salaries of employees who have been suspended or dismissed as a result of
administrative or disciplinary action, or separated from the service through no fault of their own and
who have been subsequently exonerated and reinstated by virtue of decisions of competent authority;
(5) Cash awards to deserving officials and employees in accordance with civil service law;
(6) Salary adjustments of officials and employees as a result of classification action under, and
implementation of, the provisions of the Compensation and Position Classification Act, including
positions embraced under the Career Executive Service;
(7) Peso support to any undertaking that may be entered into by the government with international
organizations, including administrative and other incidental expenses;
(8) Covering any deficiency in peso counterpart fund commitments for foreign assisted projects, as may
be approved by the President;
(9) Priority activities that will promote the economic well being of the nation, including food production,
agrarian reform, energy development, disaster relief, and rehabilitation.
(10) Repair, improvement and renovation of government buildings and infrastructure and other capital
assets damaged by natural calamities;
(11) Expenses in connection with official participation in trade fairs, civic parades, celebrations, athletic
competitions and cultural activities, and payment of expenses for the celebration of regular or special
official holidays;
(12) Payment of obligations of the government or any of its departments or agencies as a result of final
judgment of the Courts; and
(13) Payment of valid prior year's obligations of government agencies with any other government office
or agency, including government-owned or controlled corporations.
Section 50. Appointment of Budget Officers. - No person shall be appointed as budget officer in any
department, bureau, office or agency unless he meets the qualification and training requirements established
by the Budget Commission as prerequisite to appointment, in addition to other qualification requirements
prescribed by the Civil Service Commission for the position.
CHAPTER 6
BUDGET ACCOUNTABILITY
Section 51. Evaluation of Agency Performance. - The President, through the Secretary shall evaluate on a
continuing basis the quantitative and qualitative measures of agency performance as reflected in the units of
work measurement and other indicators of agency performance, including the standard and actual costs per
unit of work.
Section 52. Budget Monitoring and Information System. - The Secretary of Budget shall determine accounting
and other items of information, financial or otherwise, needed to monitor budget performance and to assess
effectiveness of agencies operations and shall prescribe the forms, schedule of submission, and other
components of reporting systems, including the maintenance of subsidiary and other recording which will
enable agencies to accomplish and submit said information requirements: provided, that the Commission on
Audit shall, in coordination with the Secretary of Budget, issue rules and regulations that may be applicable
when the reporting requirements affect accounting functions of agencies: provided, further, that the
applicable rules and regulations shall be issued by the Commission on Audit within a period of thirty (30) days
after the Department of Budget and Management prescribes the reporting requirements.
Section 53. Monitoring of Expenditures. - Expenditures of national government agencies shall be recorded so as
to identify expenditures as classified into such categories as may be determined by the Department of Budget
and Management, including but not limited to the following: (1) agency incurring the obligation, (2) program,
project and activity, (3) object of expenditure, including personal services, operating and maintenance
expenditures, equipment, and capital outlays, (4) region or locality of use, (5) economic or functional
classification of the expenditure, (6) obligational authority and cash transactions arising from fund releases, and
such other classifications as may be necessary for the budget process. The Secretary of Budget shall determine
the data and information requirements thus needed and the Commission on Audit shall formulate the
accounting rules and regulations, including changes in the Chart of Accounts and the general or subsidiary
accounting records, as may be necessary to generate the desired data and information. The Chief
Accountants of agencies and where necessary, accountants of regional offices, shall submit the data needed
by the Department of Budget and Management in accordance with such rules and regulations as it may
formulate.
Section 54. Standard Costs. - The Department of Budget and Management shall develop standard costs for
duly approved units of work measurement for each agency's budgetary projects or activities. These standard
costs shall be compared with actual unit costs and utilized in the evaluation of agency budgetary
performance.
Section 55. Review of Budgetary Programs. - The Secretary of Budget shall conduct a continuing review of the
budgetary program and project structure of each department, office or agency, the result of which shall be
the basis for modifying or amending such structure for incorporation in the President's budget proposals to the
Congress.
Section 56. Semi-Annual Report on Accomplishments of Government Agencies. - The heads of departments,
bureaus, offices or agencies of the government shall submit a semi-annual report of their accomplishments,
both work and financial results, in accordance with such content and format as may be prescribed by the
Secretary. These reports shall be designed and use for the purpose of monitoring the efficiency and
effectiveness with which budgeted funds are being utilized, and generally for verifying the attainment of goals
established in the budget process.
Section 57. Failure to Submit Reports. - Failure on the part of agency heads, chief accountants, budget officers,
cashiers, disbursing officers, administrative and personnel officers, and responsible officers of departments,
bureaus, offices and agencies to submit trial balances, work and financial plans, special Budgets, reports of
operation and income, plans, special budgets, reports of operation and income, current agency plantilla of
personnel and such other reports as may be necessary and required by the Department of Budget shall
automatically cause the suspension of payment of their salaries until they have complied with the requirements
of the Department of Budget. No appropriation authorized in the General Appropriations Act shall be made
available to pay the salary of any official or employee who violates the provisions of this section, in addition to
any disciplinary action that may be instituted against such erring official or employee.
CHAPTER 7
EXPENDITURE OF APPROPRIATED FUNDS
Section 58. Contracting of Activities. - Agencies may enter into contracts with individuals or organizations, both
public and private, subject to provisions of law and applicable guidelines approved by the President: provided,
that contracts shall be for specific services which cannot be provided by the regular staff of the agency, shall
be for a specific period of time, and shall have a definite expected output: provided, further, that
implementing, monitoring and other regular and recurring agency activities shall not be contracted for, except
for personnel hired on an individual and contractual basis and working as part of the organization, or as
otherwise may be approved by the President: Provided, finally, that the cost of contracted services shall not
exceed the amount that would otherwise be incurred had the work been performed by regular employees of
government, except as may be authorized under this section.
Section 59. Authority to Receive Additional Compensation. - Officials and employees who are duly appointed
by competent authority to any position in another government office or agency in a concurrent capacity,
may, in the discretion of the President, be allowed to receive additional compensation in the form of
allowance or honorarium at such rates he shall fix and subject to such conditions as he may prescribe. Such
additional compensation shall be paid from the appropriations of the office or agency benefitting from the
concurrent service.
Section 60. Restrictions on Salary Increases. - No portion of the appropriations provided in the General
Appropriations Act shall be used for payment of any salary increase or adjustment unless specifically authorized
by law or appropriate budget circular nor shall any appropriation for salaries authorized in the General
Appropriations Act, save as otherwise provided for under the Compensation and Position Classification Act, be
paid unless the positions have been classified by the Budget Commission.
Section 61. Merit Increases. - The budgets of national government agencies may provide for a lump-sum for
merit increases, subject to such terms and conditions as may be approved by the President. Such lump-sum
shall be used to fund salary increases approved by the head of agency in recognition of meritorious
performance: Provided, That the Civil Service Commission and the Department of Budget shall jointly issue the
rules and regulations governing the granting of such merit increases.
Section 62. Salary for Substitutionary Service. - When an official or employee is issued a duly approved
appointment in a temporary or acting capacity to take the place and perform the duties of another who is
temporarily absent from his post with pay, savings in the appropriations of the department, bureau or office
may be used for the payment of his salary or differential, subject to the approval of the Secretary.
Section 63. Additional Compensation for Overtime Service. - Officials and employees of the National
Government, when required to work overtime after regular working hours during ordinary days, during half-day
sessions, or on Saturdays, Sundays and holidays, by the heads of departments concerned, to finish work that
must be completed within a specified time, may be paid overtime compensation from any unexpected
balance of the appropriation for salaries and wages authorized in the General Appropriations Act and under
such guidelines as may be issued by the President.
Section 64. Compensation of Persons Receiving Pension. - A person receiving life pension, annuity, or gratuity as
a result of service in the national government or any local government unit, or from any government-owned or
controlled corporation, who is reappointed to any position, the appropriation for the salary of which is provided
from funds of the office, shall have the option to receive either the compensation for the position, or the
pension, gratuity or annuity, but in no case shall he receive both.
Section 65. Prohibition of Voluntary Service. - Unless otherwise specifically approved by the President, no person
shall be employed or appointed in the government under the guise of voluntary service, with compensation
below the authorized hiring rate for the position, but with privilege of transportation and/or representation
expenses in any form, or of receiving per diems, allowances, honoraria, subsistence, quarters in cash or in kind,
payable from government funds: provided, that the application of this provisions may be waived to authorize
voluntary service in the Armed Forces of the Philippines or in connection with relief operations.
Section 66. Additional Compensation for School Faculty Members. - Professors, instructors, teachers, or members
of the faculty of government schools, colleges and universities, when required to teach more than their regular
teaching loads may be paid additional compensation not exceeding seventy-five percentum of their basic
salary.
Section 67. Laundry. - At the discretion of the department head concerned, any official or employee of the
national government serving in any hospital, penal institution, or other similar institution, who is required to wear
a uniform during the performance of his duties, may be granted laundry allowance in kind, or which may be
commuted at such rates as may be authorized by the Department of Budget.
Section 68. Hazard Pay. - Upon recommendation of the department head concerned and approval of the
Secretary, hazard pay may be allowed to employees who are actually assigned to danger or strife-torn areas,
disease-infested places, or in distressed or isolated stations and camps, which expose them to great danger of
contagion or peril to life. Such hazard pay shall be paid from savings of the department concerned at such
rates, terms and conditions as the Secretary may prescribe.
Section 69. Subsistence. - No official or employee of the national government shall be given subsistence, the
cost of which is payable from any fund, except the following and only when an appropriation therefor is
specifically provided:
(1) Marine officers, engineers and crew of government vessels, launches, and motorboats, who shall
take their meals on the mess when aboard the said vessels, launches, or motorboats;
(2) Lightkeepers and other employees in light stations duly authorized by the head of the department to
receive subsistence, who shall be furnished raw canned, or preserved food supplies;
(3) Officials and employees who are required to render service within the premises of hospitals, penal
institutions, leper institutions, military installations, and other similar institutions, for a continuous period
that includes meal time, may be allowed full subsistence when required to live in said premises to make
their services available at any and all times;
(4) Laborers temporarily fielded to isolated or unsettled districts shall be furnished the usual rations or the
equivalent in cash, at the expense of the government.
In hospitals and leper institutions where there are no mess halls or whenever these are inadequate,
personnel entitled to subsistence allowance in kind may commute such subsistence upon request of the
personnel concerned subject to the approval of the department head at authorized rates chargeable
against the appropriations for supplies and materials authorized in the General Appropriations Act.
Section 70. Subsistence of Crew of Government Vessels. - The subsistence allowance for the officers and crew
of the coast guard and revenue cutters and lighthouse tenders and other large vessels operated by the
Government shall be spent for conducting a mess under the charge and administration of one or more
members of the complement in each vessel to be designated by the corresponding head of department, and
in accordance with regulations to be issued by him. The person or persons so designated shall keep an
account of the advances of funds received and expenditures made therefrom for the operation of the mess
and shall render such report to the corresponding Accounting Officer promptly at the end of each month.
Section 71. Furnished Quarters. - When the position of any official or employee is provided with "furnished
quarters", such official or employee shall be entitled to the use of such government-owned furniture and
equipment as are necessary for his board and lodging and those for his family including children below twenty-
one years of age.
Section 72. Per Diems of Government Officials and Employees. - When a government official or employee is
authorized to travel on official business outside of his permanent station, he shall be entitled to per diems to
cover his board and lodging in accordance with his schedule: provided, that in addition to per diems, the
official or employee may be entitled to transportation expenses in going to and coming from his destination
and to a daily allowance while in the field: provided, further, that officials and employees on travel status
whose expenses for board and lodging are paid directly or indirectly by government may not be entitled to
receive the per diems and allowances corresponding to such payments.
Department secretaries, heads of Constitutional bodies, undersecretaries and all other positions of equivalent
rank are authorized the reimbursement of actual expenses supported by receipts, within such limits as may be
imposed under the provisions of this section.
Officials and employees authorized to travel abroad may be granted clothing allowance: provided, that no
official or employee shall be granted such clothing allowance oftener than once every twenty-four (24)
months.
The rates of per diems and other allowances as authorized in this section shall be determined by the President.
The rates may be changed from time to time upon recommendation of a Travel Rates Committee which is
hereby created, consisting of the Secretary of Budget as Chairman and the Secretary of Foreign Affairs, the
Secretary of Tourism and the Chairman, Commission on Audit, or their representatives, as members.
The Committee shall review travel rates and shall recommend to the President for consideration and approval
modification in rates and policy when found to be warranted by actual domestic or foreign travel costs, as the
case may be.
Government-owned or controlled corporations shall observe the rates established under this section: provided,
that profit making corporations may adopt their own scales as may be provided by law. The Travel Rates
Committee shall issue the necessary rules and regulations to enforce the provisions of this section.
Section 73. Additional Conditions for Payment of Travel Expenses. - When travel is done by water and
subsistence is not included in the transportation cost, the amount actually and necessarily spent for subsistence
during such travel time shall be paid, and no per diems shall be allowed in lieu thereof.
Per diems and travel allowances shall not be granted to members of field parties or others for whom
subsistence and allowances in kind are supplied or other special provision made to cover travel expenses.
The travel expenses of a government official or employee who is assigned to render a special service to any
private person or entity, the expenses for which are payable by the latter, shall be paid from a deposit which
the private party shall be required to make before the performance of the special service is commenced,
subject to the limitations and requirements herein provided for travel expenses payable from government
funds.
No official or employee of the Government who remains temporarily at one station for a period longer than
one (1) month shall be paid per diems in excess of one (1) month, except upon the approval of the head of
department, and, in case his temporary stay in any one place exceeds three (3) months, payment of per diems
in excess of three (3) months shall be made only upon the previous approval of the Secretary.
Section 74. Transportation of Members of Family of an Employee Transferred from One Station to Another. -
Whenever, due to the exigencies of the service and not at his own request, an official or employee is
transferred from one station to another, said official or employee and his spouse and children below twenty-
one years of age shall be entitled to transportation and freight for reasonable and necessary baggage and
household effects, at the expense of the Government, to be paid from the appropriation for traveling expenses
of the bureau or office concerned.
Section 75. Purchase, Use, Operation and Maintenance of Motor Transport Equipment. - No appropriation for
equipment authorized in the General Appropriations Act shall be used directly or indirectly for the purchase of
automobiles, jeeps, jitneys, station wagons, motorcycles, trucks, launches, speedboats, airplanes, helicopters
and other types of motor transport equipment unless otherwise specifically authorized by the President.
All departments, bureaus, offices and agencies authorized to purchase motor transport equipment including
those acquired through donations, gifts or gratuitous title are likewise authorized to use, operate and maintain
them for purposes of carrying out the official functions and activities of the agency. These motor vehicles shall
be used strictly for official business, bear government plates only, and after office hours kept in garage
provided therefor by the office or agency to which they belong, except, when in use for official business
outside office hours. The President, however, may authorize exceptions from these provisions for officials of
government who work under extended hours or whose activities call for special security arrangements. Any
violation of the provisions of this section shall subject the erring official or employee to administrative disciplinary
action and he shall be personally liable for any loss or damage caused to the government or third persons.
The Commission on Audit shall issue rules and regulations governing the use, operation and maintenance of
government motor transport equipment.
Section 76. Limitation of Rental of Motor Vehicles. - No appropriations authorized in the General Appropriations
Act shall be used for renting motor transport equipment for a continuous period of more than fifteen days,
except as may be authorized by the Secretary.
Section 77. Limitation of Purchase of Supplies, Materials, and Equipment Spare Parts. - Except as otherwise
provided in the General Appropriations Act, the stock on hand of supplies, materials and equipment spare
parts, acquired through ordinary and emergency purchase, shall at no time exceed normal three-month
requirements, subject to the pertinent rules and regulations issued by competent authority: Provided, That
department heads may approve the build-up of stocks on hand of critical supplies and materials, in
anticipation of cost increases or requirements of a national emergency, and specifying maximum quantities of
individual items, but in no case shall these stocks exceed more than one year's supply, unless otherwise
approved by the President.
Section 78. Purchase of Locally Manufactured Products. - All appropriations for the purchase of equipment,
supplies and materials authorized in the General Appropriations Act shall be available only for locally
manufactured equipment; parts, accessories, medicines and drugs, supplies and materials, except when none
is available in the market or when the price of the locally manufactured article exceed those determined by
the Flag Law.
Section 79. Availability of Appropriations for Rental of Building and Grounds. - Any appropriation authorized in
any Act for rental of buildings and grounds for any department, bureau, office or agency shall be available for
expenditure only when authorized by the department head concerned. Such appropriation may also be used
for lease-purchase arrangements.
With the concurrence of the Secretary of Budget and Management and the Secretary of Finance, the head of
the department may contract with any government financial institution for loans intended for the acquisition of
land for the construction of an office building for any of the agencies under the department. Annual
amortization of the loans shall be taken from the appropriation for rental authorized under any Act for the
department, bureau or office concerned.
Section 80. Misuse of Government Funds and Property. - Any public official or employee who shall apply any
government fund or property under his administration or control to any use other than for which such fund or
property is appropriated by laws, shall suffer the penalty imposed under the appropriate penal laws.
BOOK VII
ADMINISTRATIVE PROCEDURE
CHAPTER 1
GENERAL PROVISIONS
Section 1. Scope. - This Book shall be applicable to all agencies as defined in the next succeeding section,
except the Congress, the Judiciary, the Constitutional Commissions, military establishments in all matters relating
exclusively to Armed Forces personnel, the Board of Pardons and Parole, and state universities and colleges.
Section 2. Definitions. - As used in this Book:
(1) "Agency" includes any department, bureau, office, commission, authority or officer of the National
Government authorized by law or executive order to make rules, issue licenses, grant rights or privileges,
and adjudicate cases; research institutions with respect to licensing functions; government corporations
with respect to functions regulating private right, privileges, occupation or business; and officials in the
exercise of disciplinary power as provided by law.
(2) "Rule" means any agency statement of general applicability that implements or interprets a law, fixes
and describes the procedures in, or practice requirements of, an agency, including its regulations. The
term includes memoranda or statements concerning the internal administration or management of an
agency not affecting the rights of, or procedure available to, the public.
(3) "Rate" means any charge to the public for a service open to all and upon the same terms, including
individual or joint rates, tolls, classifications, or schedules thereof, as well as commutation, mileage,
kilometerage and other special rates which shall be imposed by law or regulation to be observed and
followed by any person.
(4) "Rule making" means an agency process for the formulation, amendment, or repeal of a rule.
(5) "Contested case" means any proceeding, including licensing, in which the legal rights, duties or
privileges asserted by specific parties as required by the Constitution or by law are to be determined
after hearing.
(6) "Person" includes an individual, partnership, corporation, association, public or private organization
of any character other than an agency.
(7) "Party" includes a person or agency named or admitted as a party, or properly seeking and entitled
as of right to be admitted as a party, in any agency proceeding; but nothing herein shall be construed
to prevent an agency from admitting any person or agency as a party for limited purposes.
(8) "Decision" means the whole or any part of the final disposition, not of an interlocutory character,
whether affirmative, negative, or injunctive in form, of an agency in any matter, including licensing, rate
fixing and granting of rights and privileges.
(9) "Adjudication" means an agency process for the formulation of a final order.
(10) "License" includes the whole or any part of any agency permit, certificate, passport, clearance,
approval, registration, charter, membership, statutory exemption or other form of permission, or
regulation of the exercise of a right or privilege.
(11) "Licensing" includes agency process involving the grant, renewal, denial, revocation, suspension,
annulment, withdrawal, limitation, amendment, modification or conditioning of a license.
(12) "Sanction" includes the whole or part of a prohibition, limitation or other condition affecting the
liberty of any person; the withholding of relief; the imposition of penalty or fine; the destruction, taking,
seizure or withholding of property; the assessment of damages, reimbursement, restitution,
compensation, cost, charges or fees; the revocation or suspension of license; or the taking of other
compulsory or restrictive action.
(13) "Relief" includes the whole or part of any grant of money, assistance, license, authority, privilege,
exemption, exception, or remedy; recognition of any claim, right, immunity, privilege, exemption or
exception; or taking of any action upon the application or petition of any person.
(14) "Agency proceeding" means any agency process with respect to rule-making, adjudication and
licensing.
1. "Agency action" includes the whole or part of every agency rule, order, license, sanction, relief
or its equivalent or denial thereof.
CHAPTER 2
RULES AND REGULATIONS
Section 3. Filing. -
(1) Every agency shall file with the University of the Philippines Law Center three (3) certified copies of
every rule adopted by it. Rules in force on the date of effectivity of this Code which are not filed within
three (3) months from that date shall not thereafter be the basis of any sanction against any party or
persons.
(2) The records officer of the agency, or his equivalent functionary, shall carry out the requirements of
this section under pain of disciplinary action.
(3) A permanent register of all rules shall be kept by the issuing agency and shall be open to public
inspection.
Section 4. Effectivity. - In addition to other rule-making requirements provided by law not inconsistent with this
Book, each rule shall become effective fifteen (15) days from the date of filing as above provided unless a
different date is fixed by law, or specified in the rule in cases of imminent danger to public health, safety and
welfare, the existence of which must be expressed in a statement accompanying the rule. The agency shall
take appropriate measures to make emergency rules known to persons who may be affected by them.
Section 5. Publication and Recording. - The University of the Philippines Law Center shall:
(1) Publish a quarter bulletin setting forth the text of rules filed with it during the preceding quarter; and
(2) Keep an up-to-date codification of all rules thus published and remaining in effect, together with a
complete index and appropriate tables.
Section 6. Omission of Some Rules. -
(1) The University of the Philippines Law Center may omit from the bulletin or the codification any rule if
its publication would be unduly cumbersome, expensive or otherwise inexpedient, but copies of that
rule shall be made available on application to the agency which adopted it, and the bulletin shall
contain a notice stating the general subject matter of the omitted rule and new copies thereof may be
obtained.
(2) Every rule establishing an offense or defining an act which, pursuant to law, is punishable as a crime
or subject to a penalty shall in all cases be published in full text.
Section 7. Distribution of Bulletin and Codified Rules. - The University of the Philippines Law Center shall furnish
one (1) free copy each of every issue of the bulletin and of the codified rules or supplements to the Office of
the President, Congress, all appellate courts and the National Library. The bulletin and the codified rules shall
be made available free of charge to such public officers or agencies as the Congress may select, and to other
persons at a price sufficient to cover publication and mailing or distribution costs.
Section 8. Judicial Notice. - The court shall take judicial notice of the certified copy of each rule duly filed or as
published in the bulletin or the codified rules.
Section 9. Public Participation. -
(1) If not otherwise required by law, an agency shall, as far as practicable, publish or circulate notices of
proposed rules and afford interested parties the opportunity to submit their views prior to the adoption
of any rule.
(2) In the fixing of rates, no rule or final order shall be valid unless the proposed rates shall have been
published in a newspaper of general circulation at least two (2) weeks before the first hearing thereon.
(3) In case of opposition, the rules on contested cases shall be observed.
CHAPTER 3
ADJUDICATION
Section 10. Compromise and Arbitration. - To expedite administrative proceedings involving conflicting rights or
claims and obviate expensive litigations, every agency shall, in the public interest, encourage amicable
settlement, comprise and arbitration.
Section 11. Notice and Hearing in Contested Cases. -
(1) In any contested case all parties shall be entitled to notice and hearing. The notice shall be served
at least five (5) days before the date of the hearing and shall state the date, time and place of the
hearing.
(2) The parties shall be given opportunity to present evidence and argument on all issues. If not
precluded by law, informal disposition may be made of any contested case by stipulation, agreed
settlement or default.
(3) The agency shall keep an official record of its proceedings.
Section 12. Rules of Evidence. - In a contested case:
(1) The agency may admit and give probative value to evidence commonly accepted by reasonably
prudent men in the conduct of their affairs.
(2) Documentary evidence may be received in the form of copies or excerpts, if the original is not
readily available. Upon request, the parties shall be given opportunity to compare the copy with the
original. If the original is in the official custody of a public officer, a certified copy thereof may be
accepted.
(3) Every party shall have the right to cross-examine witnesses presented against him and to submit
rebuttal evidence.
(4) The agency may take notice of judicially cognizable facts and of generally cognizable technical or
scientific facts within its specialized knowledge. The parties shall be notified and afforded an
opportunity to contest the facts so noticed.
Section 13. Subpoena. - In any contested case, the agency shall have the power to require the attendance of
witnesses or the production of books, papers, documents and other pertinent data, upon request of any party
before or during the hearing upon showing of general relevance. Unless otherwise provided by law, the
agency may, in case of disobedience, invoke the aid of the Regional Trial Court within whose jurisdiction the
contested case being heard falls. The Court may punish contumacy or refusal as contempt.
Section 14. Decision. - Every decision rendered by the agency in a contested case shall be in writing and shall
state clearly and distinctly the facts and the law on which it is based. The agency shall decide each case
within thirty (30) days following its submission. The parties shall be notified of the decision personally or by
registered mail addressed to their counsel of record, if any, or to them.
Section 15. Finality of Order. - The decision of the agency shall become final and executory fifteen (15) days
after the receipt of a copy thereof by the party adversely affected unless within that period an administrative
appeal or judicial review, if proper, has been perfected. One motion for reconsideration may be filed, which
shall suspend the running of the said period.
Section 16. Publication and Compilation of Decisions. -
(1) Every agency shall publish and make available for public inspection all decisions or final orders in the
adjudication of contested cases.
(2) It shall be the duty of the records officer of the agency or his equivalent functionary to prepare a
register or compilation of those decisions or final orders for use by the public.
Section 17. Licensing Procedure. -
(1) When the grant, renewal, denial or cancellation of a license is required to be preceded by notice
and hearing, the provisions concerning contested cases shall apply insofar as practicable.
(2) Except in cases of willful violation of pertinent laws, rules and regulations or when public security,
health, or safety require otherwise, no license may be withdrawn, suspended, revoked or annulled
without notice and hearing.
Section 18. Non-expiration of License. - Where the licensee has made timely and sufficient application for the
renewal of a license with reference to any activity of a continuing nature, the existing license shall not expire
until the application shall have been finally determined by the agency.
CHAPTER 4
ADMINISTRATIVE APPEAL IN CONTESTED CASES
Section 19. Appeal. - Unless otherwise provided by law or executive order, an appeal from a final decision of
the agency may be taken to the Department head.
Section 20. Perfection of Administrative Appeals. -
(1) Administrative appeals under this Chapter shall be perfected within fifteen (15) days after receipt of
a copy of the decision complained of by the party adversely affected, by filing with the agency which
adjudicated the case a notice of appeal, serving copies thereof upon the prevailing party and the
appellate agency, and paying the required fees.
(2) If a motion for reconsideration is denied, the movant shall have the right to perfect his appeal during
the remainder of the period for appeal, reckoned from receipt of the resolution of denial. If the decision
is reversed on reconsideration, the aggrieved party shall have fifteen (15) days from receipt of the
resolution of reversal within which to perfect his appeal.
(3) The agency shall, upon perfection of the appeal, transmit the records of the case to the appellate
agency.
Section 21. Effect of Appeal. - The appeal shall stay the decision appealed from unless otherwise provided by
law, or the appellate agency directs execution pending appeal, as it may deem just, considering the nature
and circumstances of the case.
Section 22. Action on Appeal. - The appellate agency shall review the records of the proceedings and may, on
its own initiative or upon motion, receive additional evidence.
Section 23. Finality of Decision of Appellate Agency. - In any contested case, the decision of the appellate
agency shall become final and executory fifteen (15) days after the receipt by the parties of a copy thereof.
Section 24. Hearing Officers. -
(1) Each agency shall have such number of qualified and competent members of the base as hearing
officers as may be necessary for the hearing and adjudication of contested cases.
(2) No hearing officer shall engaged in the performance of prosecuting functions in any contested case
or any factually related case.
Section 25. Judicial Review. -
(1) Agency decisions shall be subject to judicial review in accordance with this chapter and applicable
laws.
(2) Any party aggrieved or adversely affected by an agency decision may seek judicial review.
(3) The action for judicial review may be brought against the agency, or its officers, and all
indispensable and necessary parties as defined in the Rules of Court.
(4) Appeal from an agency decision shall be perfected by filing with the agency within fifteen (15) days
from receipt of a copy thereof a notice of appeal, and with the reviewing court a petition for review of
the order. Copies of the petition shall be served upon the agency and all parties of record. The petition
shall contain a concise statement of the issues involved and the grounds relied upon for the review, and
shall be accompanied with a true copy of the order appealed from, together with copies of such
material portions of the records as are referred to therein and other supporting papers. The petition shall
be under oath and shall how, by stating the specific material dates, that it was filed within the period
fixed in this chapter.
(5) The petition for review shall be perfected within fifteen (15) days from receipt of the final
administrative decision. One (1) motion for reconsideration may be allowed. If the motion is denied, the
movant shall perfect his appeal during the remaining period for appeal reckoned from receipt of the
resolution of denial. If the decision is reversed on reconsideration, the appellant shall have fifteen (15)
days from receipt of the resolution to perfect his appeal.
(6) The review proceeding shall be filed in the court specified by statute or, in the absence thereof, in
any court of competent jurisdiction in accordance with the provisions on venue of the Rules of Court.
(7) Review shall be made on the basis of the record taken as a whole. The findings of fact of the
agency when supported by substantial evidence shall be final except when specifically provided
otherwise by law.
Section 26. Transmittal of Record. - Within fifteen (15) days from the service of the petition for review, the
agency shall transmit to the court the original or a certified copy of the entire records of the proceeding under
review. The record to be transmitted may be abridged by agreement of all parties to the proceedings. The
court may require or permit subsequent correction or additions to the record.
FINAL PROVISIONS
Section 27. Repealing Clause. - All laws, decrees, orders, rules and regulations, or portions thereof, inconsistent
with this Code are hereby repealed or modified accordingly.
Section 28. Separability Clauses. - In the event that any of the provisions of this Code is declared
unconstitutional, the validity of the other provisions shall not be affected by such declaration.
Section 29. Effectivity. - This Code shall take effect one year after its publication in the Official Gazette.
DONE in the City of Manila, this 25th day of July, in the year of Our Lord, nineteen hundred and eighty-seven.

RULE 22
Computation of Time
Section 1. How to compute time. — In computing any period of time prescribed or allowed by these Rules, or
by order of the court, or by any applicable statute, the day of the act or event from which the designated
period of time begins to run is to be excluded and the date of performance included. If the last day of the
period, as thus computed, falls on a Saturday a Sunday, or a legal holiday in the place where the court sits, the
time shall not run until the next working day. (a)
Section 2. Effect of interruption. — Should an act be done which effectively interrupts the running of the period,
the allowable period after such interruption shall start to run on the day after notice of the cessation of the
cause thereof.
The day of the act that caused the interruption shall be excluded in the computation of the period. (n)
G.R. No. 162155 August 28, 2007
COMMISSIONER OF INTERNAL REVENUE and ARTURO V. PARCERO in his official capacity as Revenue District
Officer of Revenue District No. 049 (Makati), Petitioners,
vs.
PRIMETOWN PROPERTY GROUP, INC., Respondent.
DECISION
CORONA, J.:
This petition for review on certiorari1 seeks to set aside the August 1, 2003 decision2 of the Court of Appeals (CA)
in CA-G.R. SP No. 64782 and its February 9, 2004 resolution denying reconsideration.3
On March 11, 1999, Gilbert Yap, vice chair of respondent Primetown Property Group, Inc., applied for the
refund or credit of income tax respondent paid in 1997. In Yap's letter to petitioner revenue district officer Arturo
V. Parcero of Revenue District No. 049 (Makati) of the Bureau of Internal Revenue (BIR), 4 he explained that the
increase in the cost of labor and materials and difficulty in obtaining financing for projects and collecting
receivables caused the real estate industry to slowdown.5 As a consequence, while business was good during
the first quarter of 1997, respondent suffered losses amounting to ₱71,879,228 that year.6
According to Yap, because respondent suffered losses, it was not liable for income taxes.7 Nevertheless,
respondent paid its quarterly corporate income tax and remitted creditable withholding tax from real estate
sales to the BIR in the total amount of ₱26,318,398.32.8 Therefore, respondent was entitled to tax refund or tax
credit.9
On May 13, 1999, revenue officer Elizabeth Y. Santos required respondent to submit additional documents to
support its claim.10 Respondent complied but its claim was not acted upon. Thus, on April 14, 2000, it filed a
petition for review11 in the Court of Tax Appeals (CTA).
On December 15, 2000, the CTA dismissed the petition as it was filed beyond the two-year prescriptive period
for filing a judicial claim for tax refund or tax credit.12 It invoked Section 229 of the National Internal Revenue
Code (NIRC):
Sec. 229. Recovery of Taxes Erroneously or Illegally Collected. -- No suit or proceeding shall be maintained in
any court for the recovery of any national internal revenue tax hereafter alleged to have been erroneously or
illegally assessed or collected, or of any penalty claimed to have been collected without authority, or of any
sum alleged to have been excessively or in any manner wrongfully collected, until a claim for refund or credit
has been duly filed with the Commissioner; but such suit or proceeding may be maintained, whether or not
such tax, penalty, or sum has been paid under protest or duress.
In any case, no such suit or proceeding shall be filed after the expiration of two (2) years from the date of
payment of the tax or penalty regardless of any supervening cause that may arise after payment: Provided,
however, That the Commissioner may, even without a claim therefor, refund or credit any tax, where on the
face of the return upon which payment was made, such payment appears clearly to have been erroneously
paid. (emphasis supplied)
The CTA found that respondent filed its final adjusted return on April 14, 1998. Thus, its right to claim a refund or
credit commenced on that date.13
The tax court applied Article 13 of the Civil Code which states:
Art. 13. When the law speaks of years, months, days or nights, it shall be understood that years are of three
hundred sixty-five days each; months, of thirty days; days, of twenty-four hours, and nights from sunset to
sunrise.
If the months are designated by their name, they shall be computed by the number of days which they
respectively have.
In computing a period, the first day shall be excluded, and the last included. (emphasis supplied)
Thus, according to the CTA, the two-year prescriptive period under Section 229 of the NIRC for the filing of
judicial claims was equivalent to 730 days. Because the year 2000 was a leap year, respondent's petition, which
was filed 731 days14 after respondent filed its final adjusted return, was filed beyond the reglementary period.15
Respondent moved for reconsideration but it was denied.16 Hence, it filed an appeal in the CA.17
On August 1, 2003, the CA reversed and set aside the decision of the CTA. 18 It ruled that Article 13 of the Civil
Code did not distinguish between a regular year and a leap year. According to the CA:
The rule that a year has 365 days applies, notwithstanding the fact that a particular year is a leap year.19
In other words, even if the year 2000 was a leap year, the periods covered by April 15, 1998 to April 14, 1999
and April 15, 1999 to April 14, 2000 should still be counted as 365 days each or a total of 730 days. A statute
which is clear and explicit shall be neither interpreted nor construed.20
Petitioners moved for reconsideration but it was denied.21 Thus, this appeal.
Petitioners contend that tax refunds, being in the nature of an exemption, should be strictly construed against
claimants.22 Section 229 of the NIRC should be strictly applied against respondent inasmuch as it has been
consistently held that the prescriptive period (for the filing of tax refunds and tax credits) begins to run on the
day claimants file their final adjusted returns.23 Hence, the claim should have been filed on or before April 13,
2000 or within 730 days, reckoned from the time respondent filed its final adjusted return.
The conclusion of the CA that respondent filed its petition for review in the CTA within the two-year prescriptive
period provided in Section 229 of the NIRC is correct. Its basis, however, is not.
The rule is that the two-year prescriptive period is reckoned from the filing of the final adjusted return.24 But how
should the two-year prescriptive period be computed?
As already quoted, Article 13 of the Civil Code provides that when the law speaks of a year, it is understood to
be equivalent to 365 days. In National Marketing Corporation v. Tecson, 25 we ruled that a year is equivalent to
365 days regardless of whether it is a regular year or a leap year.26
However, in 1987, EO27 292 or the Administrative Code of 1987 was enacted. Section 31, Chapter VIII, Book I
thereof provides:
Sec. 31. Legal Periods. — "Year" shall be understood to be twelve calendar months; "month" of thirty days, unless
it refers to a specific calendar month in which case it shall be computed according to the number of days the
specific month contains; "day", to a day of twenty-four hours and; "night" from sunrise to sunset. (emphasis
supplied)
A calendar month is "a month designated in the calendar without regard to the number of days it may
contain."28 It is the "period of time running from the beginning of a certain numbered day up to, but not
including, the corresponding numbered day of the next month, and if there is not a sufficient number of days in
the next month, then up to and including the last day of that month." 29 To illustrate, one calendar month from
December 31, 2007 will be from January 1, 2008 to January 31, 2008; one calendar month from January 31,
2008 will be from February 1, 2008 until February 29, 2008.30
A law may be repealed expressly (by a categorical declaration that the law is revoked and abrogated by
another) or impliedly (when the provisions of a more recent law cannot be reasonably reconciled with the
previous one).31Section 27, Book VII (Final Provisions) of the Administrative Code of 1987 states:
Sec. 27. Repealing clause. — All laws, decrees, orders, rules and regulation, or portions thereof, inconsistent with
this Code are hereby repealed or modified accordingly.
A repealing clause like Sec. 27 above is not an express repealing clause because it fails to identify or designate
the laws to be abolished.32 Thus, the provision above only impliedly repealed all laws inconsistent with the
Administrative Code of 1987.1avvphi1
Implied repeals, however, are not favored. An implied repeal must have been clearly and unmistakably
intended by the legislature. The test is whether the subsequent law encompasses entirely the subject matter of
the former law and they cannot be logically or reasonably reconciled.33
Both Article 13 of the Civil Code and Section 31, Chapter VIII, Book I of the Administrative Code of 1987 deal
with the same subject matter — the computation of legal periods. Under the Civil Code, a year is equivalent to
365 days whether it be a regular year or a leap year. Under the Administrative Code of 1987, however, a year is
composed of 12 calendar months. Needless to state, under the Administrative Code of 1987, the number of
days is irrelevant.
There obviously exists a manifest incompatibility in the manner of computing legal periods under the Civil Code
and the Administrative Code of 1987. For this reason, we hold that Section 31, Chapter VIII, Book I of the
Administrative Code of 1987, being the more recent law, governs the computation of legal periods. Lex
posteriori derogat priori.
Applying Section 31, Chapter VIII, Book I of the Administrative Code of 1987 to this case, the two-year
prescriptive period (reckoned from the time respondent filed its final adjusted return 34 on April 14, 1998)
consisted of 24 calendar months, computed as follows:
Year 1st calendar April 15, 1998 to May 14, 1998
1 month

2nd calendar May 15, 1998 to June 14, 1998


month

3rd calendar June 15, 1998 to July 14, 1998


month

4th calendar July 15, 1998 to August 14, 1998


month

5th calendar August 15, 1998 to September 14,


month 1998

6th calendar September 15, to October 14, 1998


month 1998

7th calendar October 15, 1998 to November 14,


month 1998
8th calendar November 15, to December 14,
month 1998 1998

9th calendar December 15, to January 14, 1999


month 1998

10th calendar January 15, 1999 to February 14, 1999


month

11th calendar February 15, 1999 to March 14, 1999


month

12th calendar March 15, 1999 to April 14, 1999


month

Year 13th calendar April 15, 1999 to May 14, 1999


2 month

14th calendar May 15, 1999 to June 14, 1999


month

15th calendar June 15, 1999 to July 14, 1999


month

16th calendar July 15, 1999 to August 14, 1999


month

17th calendar August 15, 1999 to September 14,


month 1999

18th calendar September 15, to October 14, 1999


month 1999

19th calendar October 15, 1999 to November 14,


month 1999

20th calendar November 15, to December 14,


month 1999 1999

21st calendar December 15, to January 14, 2000


month 1999

22nd calendar January 15, 2000 to February 14, 2000


month

23rd calendar February 15, 2000 to March 14, 2000


month

24th calendar March 15, 2000 to April 14, 2000


month
We therefore hold that respondent's petition (filed on April 14, 2000) was filed on the last day of the 24th
calendar month from the day respondent filed its final adjusted return. Hence, it was filed within the
reglementary period.
Accordingly, the petition is hereby DENIED. The case is REMANDED to the Court of Tax Appeals which is ordered
to expeditiously proceed to hear C.T.A. Case No. 6113 entitled Primetown Property Group, Inc. v. Commissioner
of Internal Revenue and Arturo V. Parcero.
No costs.
SO ORDERED.
RENATO C. CORONA
Associate Justice
WE CONCUR:
REYNATO S. PUNO
Chief Justice
Chairperson
ANGELINA SANDOVAL-GUTIERREZ ADOLFO S. AZCUNA
Associate Justice Associate Justice
CANCIO C. GARCIA
Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above decision had
been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.
REYNATO S. PUNO
Chief Justice
Footnotes
1 Under Rule 45 of the Rules of Court.
2 Penned by Associate Justice Marina L. Buzon and concurred in by Associate Justices Rebecca de

Guia-Salvador and Jose C. Mendoza of the Special Fifteenth Division of the Court of Appeals. Rollo, pp.
21-25.
3 Penned by Associate Justice Marina L. Buzon and concurred in by Associate Justices Rebecca de

Guia-Salvador and Jose C. Mendoza of the Former Special Fifteenth Division of the Court of Appeals.
Id., pp. 26-28.
4 Id., pp. 37-42.
5 Id., pp. 39-40.
6 Id. This was the period of economic slowdown known as the "Asian (Financial) Crisis" which started in

mid-1997.
7 Id., p. 41.
8 Summary of Tax/Payments for 1997:

Creditable
Corporate
Quarter Withholding TOTAL
Income Tax
Tax

1st ₱ 3,440,082.00 ₱ 687,783.00 ₱ 4,127,865.00

2nd 15,694,502.00 633,175.00 16,327,677.00

3rd 2,419,868.81 3,154,506.51 5,574,375.32

4th 288,481.00 288,481.00

<="" td="" style="font-size: 14px; text-



decoration: none; color: rgb(0, 0, 128); ₱ 21,554,452.81 ₱ 26,318,398.32
4,763,945.51
font-family: arial, verdana;">
Id., p. 40.
9 Id., p. 41.
10 Id., pp. 78-79.
11 Docketed as C.T.A. Case No. 6113. Id., pp. 192-199.
12 Penned by Presiding Judge Ernesto D. Acosta and concurred in by Associate Judges Amancio Q.

Saga (retired) and Ramon O. de Veyra (retired). Dated December 15, 2000. Id., pp. 187-190.
13 CIR v. CA, 361 Phil. 359, 364-365 (1999).
14 The computation was as follows:

April 15, 1998 to April 14, 1999 ----------------------- 365 days

April 15, 1999 to April 14, 2000 (leap year) ---------- 366 days

TOTAL 731 days


15 Rollo, p. 190.
16 Id., p. 191.
17 Docketed as CA-G.R. SP No. 64782. Id., pp. 180-186. (This case observes the procedure in RA 1125 prior

to the amendments of RA 9282.)


18 Id., pp. 21-25. Under RA 9282 which took effect on April 22, 2004, decisions of the CTA are now

appealable to the Supreme Court.


19 Id., p. 24.
20 Id.
21 Id., pp. 26-28.
22 Id., p. 13.
23 Id., p. 15.
24 Tax Code, Sec. 229 and supra note 12 at 367. See also ACCRA Investments Corporation v. CA., G.R.

No. 96322, 20 December 1991, 204 SCRA 957. See also CIR v. Philippine American Life Insurance
Co., G.R. No. 105208, 29 May 1995, 244 SCRA 446.
25 139 Phil. 584 (1969).
26 Id., pp. 588-589 citing People v. del Rosario, 97 Phil 70, 71 (1955).
27 Executive Order
28 Gutierrez v. Carpio, 53 Phil. 334, 335-336 (1929).
29 Section 9, Time, 74 AmJur 2d 593 citing Re Lynch's Estate, 123 Utah 57, 254 P2d 454.
30 This is pursuant to Article 13(3) of the Civil Code which provides that "[i]n computing a period, the first

day shall be excluded, and the last day included."


Cf. Rules of Court, Rule 22, Sec. 1. The section provides:
Section 1. How to compute time. In computing any period of time prescribed or allowed by this
Rules, or by the order of the court, or by any applicable statute, the day of the act or event from
which the designated period of time begins to run is to be excluded and the date of
performance included.If the last day of the period, as thus computed, falls on a Saturday, a
Sunday or a legal holiday in the place where the court sits, the time shall not run until the next
working day. (emphasis supplied)
31 Jose Jesus G. Laurel, Statutory Construction: Cases and Materials, 1999 ed., 176 citing Black's Law

Dictionary, 4th ed., 1463.


32 Agujetas v. Court of Appeals, G.R. No. 106560, 23 August 1996, 261 SCRA 17, 32.
33 David v. Commission on Election, G.R. No. 127116, 08 April 1997, 271 SCRA 90, 103.
34 Supra note 25.

Choice of law rules


Courts faced with a choice of law issue have a two-stage process:
1. the court will apply the law of the forum (lex fori) to all procedural matters (including, self-evidently, the
choice of law rules); and
2. it counts the factors that connect or link the legal issues to the laws of potentially relevant states and applies
the laws that have the greatest connection, e.g. the law of nationality (lex patriae) or domicile (lex domicilii)
will define legal status and capacity, the law of the state in which land is situated (lex situs) will be applied to
determine all questions of title, the law of the place where a transaction physically takes place or of the
occurrence that gave rise to the litigation (lex loci actus) will often be the controlling law selected when the
matter is substantive, but the proper law has become a more common choice.

For example, suppose that A who has a French nationality and residence in Germany, corresponds with B who
has American nationality, domicile in Arizona, and residence in Austria, over the internet. They agree the joint
purchase of land in Switzerland, currently owned by C who is a Swiss national, but they never physically meet,
executing initial contract documents by using fax machines, followed by a postal exchange of hard copies. A
pays his share of the deposit but, before the transaction is completed, B admits that although he has capacity
to buy land under his lex domicilii and the law of his residence, he is too young to own land under Swiss law. The
rules to determine which courts would have jurisdiction and which laws would be applied to each aspect of
the case are defined in each state's laws so, in theory, no matter which court in which country actually accepts
the case, the outcome will be the same (albeit that the measure of damages might differ from country to
country which is why forum shopping is such a problem). In reality, however, moves to harmonise the conflictual
system have not reached the point where standardization of outcome can be guaranteed. The status of
foreign law.

Generally, when the court is to apply a foreign law, it must be proved by foreign law experts. It cannot merely
be pleaded, as the court has no expertise in the laws of foreign countries nor in how they might be applied in a
foreign court. Such foreign law may be considered no more than evidence, rather than law because of the
issue of sovereignty. If the local court is actually giving extraterritorial effect to a foreign law, it is less than
sovereign and so acting in a way that is potentially unconstitutional.

The theoretical responses to this issue are:


(a) that each court has an inherent jurisdiction to apply the laws of another country where it is necessary to
achieving a just outcome; or

(b) that the local court creates a right in its own laws to match that available under the foreign law. This
explanation is sustainable because, even in states which apply a system of binding legal precedents, any
precedent emerging from a conflicts case can only apply to future conflicts cases. There will be no ratio
decidendi that binds future litigants in entirely local cases.

Once the lex causae has been selected, it will be respected except when it appears to contravene an
overriding mandatory rule of the lex fori. Each judge is the guardian of his or her own principles of ordre public
(public policy) and the parties cannot, by their own act, oust the fundamental principles of the local municipal
law which generally underpin areas such as labour law, insurance, competition regulation, agency rules,
embargoes, import-export regulations, and securities exchange regulations. Furthermore, the lex fori will prevail
in cases where an application of the lex causae would otherwise result in a fundamentally immoral outcome,
or give extraterritorial effect to confiscatory or other territorially limited laws.

In some countries, there is occasional evidence of parochialism when courts have determined that if the
foreign law cannot be proved to a "satisfactory standard", then local law may be applied. Similarly, judges
might assume in default of express evidence to the contrary that the place where the cause of action arose
would provide certain basic protections, e.g. that the foreign court would provide a remedy to someone who
was injured due to the negligence of another. Finally, some American courts have held that local law will be
applied if the injury occurred in an "uncivilized place that has no law or legal system." See Walton v. Arabian
American Oil Co., 233 F.2d 541 (2d Cir. 1956). If the case has been submitted to arbitration rather than a
national court, say because of a forum selection clause, an arbitrator may decide not to apply local
mandatory policies in the face of a choice of law by the parties if this would defeat their commercial
objectives. However, the arbitral award may be challenged in the country where it was made or where
enforcement is sought by one of the parties on the ground that the relevant order public should have been
applied. If the lex loci arbitri has been ignored, but there was no real and substantial connection between the
place of arbitration and the agreement made by the parties, a court in which enforcement is sought may well
accept the tribunal's decision. But if the appeal is to the courts in the state where the arbitration was held, the
judge cannot ignore the mandatory provisions of the lex fori.

Choice of Law
Choice of law is a procedural stage in the litigation of a case involving the conflict of laws when it is necessary
to reconcile the
differences between the laws of different states, and in the United States between individual federated states.
The outcome of this process is potentially to require the courts of one jurisdiction to apply the law of a different
jurisdiction in lawsuits arising from, say, family law, tort or contract.

1. Jurisdiction. The court selected by the plaintiff must decide both whether it has the jurisdiction to hear the
case and, if it has, whether it is the most convenient forum (the forum non conveniens issue relates to the
problem of forum shopping) for the disposition of the case. Naturally, a plaintiff with appropriate knowledge
and finance will always commence proceedings in the court most likely to give a favourable outcome. This is
called forum shopping and whether a court will accept such cases is always determined by the local law.

2. Characterization. The court then allocates each aspect of the case as pleaded to its appropriate legal
classification. Each such classification has it own choice of law rules but distinguishing between procedural and
substantive rules requires care.

3. The court then applies the relevant choice of law rules. It should be noted that in a few cases, usually
involving Family Law, an incidental question can arise which will complicate this process.

The Choice of Law Stage


The "traditional approach" looks to territorial factors, e.g. the domicile or nationality of the parties, where the
components comprising each cause of action occurred, where any relevant assets, whether movable or
immovable, are located, etc., and chooses the law or laws that have the greatest connection to the cause(s)
of action. Even though this is a very flexible system, there has been some reluctance to apply it and various
"escape devices" have developed, which allow courts to apply their local laws (the lex fori) even though the
disputed events took place in a different jurisdiction. The parties themselves may plead the case either to avoid
invoking a foreign law or to agree the choice of law, assuming that the judge will not of his or her own motion
go behind the pleadings. Their motive will be pragmatic. Full-scale conflict cases take longer and cost more to
litigate. However, the courts in some states are predisposed to prefer the lex fori wherever possible. This may
reflect the belief that the interests of justice will be better served if the judges apply the law with which they are
most familiar, or it may reflect a more general parochialism in systems not used to considering extraterritorial
principles of law. One of the most common judicial strategies is to skew the characterization process. By
determining that a claim is one involving a contract instead of tort, or a question of family law instead of a
testamentary issue, the Court can change the choice of law rules.

The rules of private international law which are explained herein below are incidental to law and do not decide
the law. In other words these are connecting rules which help the courts to decide which law law should be
applied when a party is a foreign party.

Status
Status is relevant for a wide array of issues. Self-evidently, unless the proposed litigant has legal personality,
there will be no jurisdiction. It will also be relevant to immigration, entitlement to social security and similar
benefits, family law, contract, etc. The choice of law rule is the law of the domicile (lex domicilii) if the forum is
common law, or law of nationality (lex patriae) or habitual residence if the forum is civil law applies to
determine all question of status and its legal attributes. The lex fori determines the domicile, nationality or
habitual residence, and applies that law to establish an in rem set of rights and capacities. Thus, under some
laws, the status of illegitimate affects the rights of inheritance in the case of an intestacy, etc. As to
corporations, the choice of law rule is the law of incorporation (the lex incorporationis) for all matters of
capacity,
Lex Domiclii
The lex domicilii is the Latin term for "law of the domicile" in the Conflict of Laws. Conflict is the branch of public
law regulating all lawsuits involving a "foreign" law element where a difference in result will occur depending on
which laws are applied.
When a case comes before a court and all the main features of the case are local, the court will apply the lex
fori, the prevailing municipal law, to decide the case.

But if there are "foreign" elements to the case, the forum court may be obliged under the Conflict of Laws
system to consider:
# whether the forum court has jurisdiction to hear the matter or not;
# it must then characterize the issues, i.e. allocate the factual basis of the case to its relevant legal classes; and
# then apply the choice of law rules to decide the lex causae, i.e. which law is to be applied to each class.

The lex domicilii is a common law choice of law rule applied to cases testing the status and capacity of the
parties to the case. The civil law states use a test of either lex patriae (the law of nationality) or the law of
habitual residence to determine status and capacity.

Lex Loci Contractus


The lex loci contractus is the Latin term for "law of the place where the contract is made" in the Conflict of Laws.
Conflict is the branch of public law regulating all lawsuits involving a "foreign" law element where a difference
in result will occur depending on which laws are applied. When a case comes before a court and all the main
features of the case are local, the court will apply the lex fori, the prevailing municipal law, to decide the case.
But if there are "foreign" elements to the case, the forum court may be obliged under the Conflict of Laws
system to consider:
# whether the forum court has jurisdiction to hear the case (see the problem of forum shopping);

# it must then characterise the issues, i.e. allocate the factual basis of the case to its relevant legal classes; and
# then apply the choice of law rules to decide which law is to be applied to each class.
The lex loci contractus is one of the possible choice of law rules applied to cases testing the validity of a
contract. For ex, suppose that a person domiciled in Canada and a person habitually resident in France, make
a contract by e-mail. They agree to meet in New York State to record a CD of hip hop music.

The possibly relevant choice of law rules would be:


# the lex domicilii and law of habitual residence to determine whether the parties had the capacity to enter
into the contract;
# the lex loci contractus which could be difficult to establish since neither party left their own states (reliance on
postal rules for offer and acceptance in the several putative lex causae might produce different results);
#the lex loci solutionis might be the most relevant since New York is the most closely connected to the
substance of the obligations assumed;
# the proper law; and
# the lex fori which might have public policy issues if, say, one of the parties was an infant

Lex Loci Solutionis


The lex loci solutionis is the Latin term for "law of the place where relevant performance occurs" in the Conflict
of Laws. Conflict is the branch of public law regulating all lawsuits involving a "foreign" law element where a
difference in result will occur depending on which laws are applied.
When a case comes before a court and all the main features of the case are local, the court will apply the lex
fori, the prevailing municipal law, to decide the case. But if there are "foreign" elements to the case, the forum
court may be obliged under the Conflict of Laws system to consider:
# whether the forum court has jurisdiction to hear the case (see the problem of forum shopping);
# it must then characterise the issues, i.e. allocate the factual basis of the case to its relevant legal classes; and

# then apply the choice of law rules to decide which law is to be applied to each class.
The lex loci solutionis is one of the possible choice of law rules applied to cases testing the validity of a contract
and in tort cases. For example, suppose that a person domiciled in Bolivia and a person habitually resident in
Germany, make a contract by e-mail. They agree to meet in Arizona to research a book. The possibly relevant
choice of law rules would be:
# the lex domicilii, lex patriae or the law of habitual residence to determine whether the parties had the
capacity to enter into the contract;
# the lex loci contractus which could be difficult to establish since neither party left their own states (reliance on
postal rules for offer and acceptance in the several putative lex causae might produce different results);
# the lex loci solutionis might be the most relevant since Arizona is the most closely connected to the substance
of the obligations assumed;
# the proper law; and
# the lex fori which might have public policy issues if, say, one of the parties was an infant.

Ø Lex Loci Celebrationis


The lex loci celebrationis is the Latin term for "law of the place where the marriage is celebrated" in the Conflict
of Laws. Conflict is the branch of public law regulating all lawsuits involving a "foreign" law element where a
difference in result will occur depending on which laws are applied. When a case comes before a court and all
the main features of the case are local, the court will apply the lex fori, the prevailing municipal law, to decide
the case. But if there are "foreign" elements to the case, the forum court may be obliged under the Conflict of
Laws system to consider:
# whether the forum court has jurisdiction to hear the case;
# it must then characterise the issues, i.e. allocate the factual basis of the case to its relevant legal classes; and

# then apply the choice of law rules to decide which law is to be applied to each class.

The lex loci celebrationis is a choice of law rule applied to cases testing the validity of a marriage. For example,
suppose that a person domiciled in Scotland and a person habitually resident in France, both being of the
Islamic faith, go through an Islamic marriage ceremony in Pakistan where their respective families originated.
This ceremony is not registered with the Pakistani authorities but they initially establish a matrimonial home in
Karachi. After a year, they return to Europe. For immigration and other purposes, whether they are now
husband and wife would be referred to the law of Pakistan because that is the most immediately relevant law
by which to decide precisely the nature of the ceremony they went through and the effect of failing to register
it. If the ceremony was in fact sufficient to create a valid marriage under Pakistani law and there are no public
policy issues raised under their personal laws of lex domicilii or habitual residence, and under the lex fori, they
will be treated a validly married for all purposes, i.e. it will be an in rem outcome.

Lex Loci Delicti Commissi


The lex loci delicti commissi is the Latin term for "law of the place where the tort was committed" in the Conflict
of Laws. Conflict is the branch of public law regulating all lawsuits involving a "foreign" law element where a
difference in result will occur depending on which laws are applied. When a case comes before a court and all
the main features of the case are local, the court will apply the lex fori, the prevailing municipal law, to decide
the case. But if there are "foreign" elements to the case, the forum court may be obliged under the Conflict of
Laws system to consider:
# whether the forum court has jurisdiction to hear the case
# it must then characterise the issues, i.e. allocate the factual basis of the case to its relevant legal classes; and
# then apply the choice of law rules to decide the lex causae, i.e. which law is to be applied to each class of
issue or to the case as a whole.

The lex loci delicti commissi is one of the possible choice of law rules applied to cases arising from an alleged
tort. For example, suppose that a person domiciled in Australia and a person habitually resident in Albania,
exchange correspondence by e-mail that is alleged to defame a group of Kurds resident in Turkey. The possibly
relevant choice of law rules would be:
# the lex loci solutionis might be the most relevant but this might be difficult because three laws might equally
apply, i.e. the parties themselves corresponded from two states but the damage was not sustained until the
correspondence was published in Turkey;
# he proper law which is the law which has the closest connection with the substance of the wrong alleged to
have been committed; &
# the lex fori which might have public policy issues if, say, one of the parties was an infant or there was the
possibility of multiple jurisdictions having involvement over a world-wide internet issue.
Lex Patriae
The term lex patriae is Latin for the law of nationality in the Conflict of Laws which is the system of public law
applied to any lawsuit where there is a choice to be made between several possibly relevant laws and a
different result will be achieved depending on which law is selected. When a case comes before a court and
all the main features of the case are local, the court will apply the lex fori, the prevailing municipal law, to
decide the case. But if there are "foreign" elements to the case, the forum court may be obliged under the
Conflict of Laws system to consider:
# whether the forum court has jurisdiction to hear the case;
# it must then characterise the issues, i.e. allocate the factual basis of the case to its relevant legal classes; and
# then apply the choice of law rules to decide the lex causae, i.e. which law is to be applied to each class.

The lex patriae is a civil law choice of law rule (in some states, the law of habitual residence is used) to test the
status and capacity of the parties to the case. For example, suppose that a person with a nationality in
Denmark decides to take a "round-the-world" trip. It would be inconvenient if this person's legal status and
capacities changed every time he or she entered a new state, e.g. that he or she might be considered an
infant or an adult, married or free to marry, bankrupt or creditworthy, etc., depending on the nature of the laws
of the place where he or she happened to be. Assuming that there are no public policy issues raised under the
relevant lex fori, the lex patriae should apply to define all major issues and so produce an in rem outcome no
matter where the case might be litigated. The common law states use a test of lex domicilii (the law of
domicile) to determine status and capacity. Because the lex patriae choice of law rule may select the law of a
country that contains more than one legal system, there must be rules to determine which of the several
possible laws might apply (e.g. a reference to the law of the United States is actually a reference to one of the
U.S. states). A supranational example of this selection process is contained in Article 19 of the Rome
Convention:

States with more than one legal system:


1. Where a State comprises several territorial units each of which has its own rules of law in respect of
contractual obligations, each territorial unit shall be considered as a country for the purposes of identifying the
law applicable under this Convention.
2. A State within which different territorial units have their own rules of law in respect of contractual obligations
shall not be bound to apply this Convention to conflicts solely between the laws of such units.

Lex Situs
The term lex situs (Latin) refers to the law of the place in which property is situated for the purposes of the
Conflict of laws. For
example, property may subject to tax pursuant to the law of the place of the property or by virtue of the
domicile of its owner. Conflict is the branch of public law regulating all lawsuits involving a "foreign" law element
where a difference in result will occur depending on which laws are applied. When a case comes before a
court and all the main features of the case are local, the court will apply the lex fori, the prevailing municipal
law, to decide the case. But if there are "foreign" elements
to the case, the forum court may be obliged under the Conflict of Laws system to consider:
# whether the forum court has jurisdiction to hear the case (see the problem of forum shopping);
# it must then characterise the issues, i.e. allocate the factual basis of the case to its relevant legal classes; and
# then apply the choice of law rules to decide which law is to be applied to each class.
The lex situs is a choice of law rule applied to identify the lex causae for cases involving title to, or the possession
and use of property.

In law, there are two types of property:


# Real property is land or any permanent feature or structure above or below the surface. Ownership of land is
an aspect of the system of real property or realty in common law systems (immovables in civil law systems and
the Conflict of Laws).

# All other property is considered personal property or personalty in common law systems (movables in civil law
systems and the Conflict of Laws), and this property is either tangible or intangible, i.e. it is either physical
property that can be touched like a computer, or it is an enforceable right like a patent or other form of
intellectual property.

The term ulex sits is applied only to immovable property and lex loci rei sitae ought to be used when referring to
the law of the situs of movable property but this distinction is less common today and is ignored for the purposes
of the Conflict pages on the Wikipedia. Land has traditionally represented one of the most important cultural
and economic forms of wealth in society. Because of this historical significance, it is vital that any judgment
affecting title to or the use of the land should be enforceable with the minimum of difficulty. Hence,
compliance with the lex situs should produce a judgment in rem.

The choice of law rules are as follows:


# immovables, by definition, do not move and so the identification of the lex situs will not present a problem in
the majority of cases; · because movables may be portable, the lex situs is the law of the state in which the
personalty is resident at the time the case is heard.

Lex Fori
In Conflict of Laws, the Latin term lex fori literally means the "law of the forum" and it is distinguished from the lex
causae which is the law the forum actually applies to resolve the particular case. Sovereignty comes into being
through a process of recognition by the international community in which a de facto state is formally accepted
as a de jure state and so becomes the legitimate government with territorial control over a defined area of
land and all the people who reside within its borders. One of the most important sovereign powers of any
government is to enact laws and to define the extent of their application.

Some laws will apply to all the land and its peoples. Others will be of more limited application. These laws will be
applied through different bodies and institutions. Some will be formally constituted as courts. Other bodies will
exercise specific functions within quasi-judicial, adminsitrative, religious or other frameworks. When a lawsuit is
instituted and the court has accepted that it has jurisdiction, the parties will normally expect the local laws to
apply, reflecting a presumption of territoriality ? that each state is sovereign within its own borders and the laws
of no other state or international body will apply extraterritorially or supranationally. If foreign laws did apply, the
state would be less than sovereign within its own borders. However, as social mobility has increased and the
internet encourages people to trade across national boundaries, a need to recognise the relevance and
importance of foreign laws to dispute resolution has arisen. Hence, within the precise limits set by the lex fori,
local courts may sometimes apply one or more foreign laws as the lex causae if the local politics, public policy
and the dictates of justice require it. For a more complete explanation, refer to the pages on characterisation,
and choice of law.

Jurisdiction of The Courts


"Jurisdiction" is a word susceptible of several different meanings, but in the present account it is used in its widest
sense to refer to the question of whether an English court will hear and determine an issue upon which its
decision is sought. The position is complicated by the fact that there are now four separate sets of rules
determining the jurisdiction of English courts. First, there are the rules under the European Community
Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (the Brussels
Convention). Second, there are the rules contained in a modified version of the Brussels Convention (the
Modified Convention). Third, there are the rules under the ECIEFT A Convention (the Lugano Convention).
Fourth, there are the traditional rules.

I. Jurisdiction Under The Brussels Convention


In broad terms, the rules on jurisdiction contained in the Brussels Convention apply where:
(a) The matter is within the scope of the Convention (a civil and commercial Matter), and
(b) The defendant is domiciled in a European Community State (i.e. in Austria, Belgium, Denmark, Finland,
France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden and the
United Kingdom), I Even if he is not, certain provisions in the Convention will stil1 apply, e.g. where the case
involves tide to land in a Contracting State or where there is an agreement conferring jurisdiction on the courts
of a Contracting State,
Jurisdiction under the Convention depends on a specified connection with the forum, eg that the defendant is
domiciled there, Furthermore, if a Contracting State is allocated jurisdiction under the Convention, the courts
1l1 that State have no discretion to decllI1e to take jurisdiction, at least not in cases where the alternative forum
is another Contracting State.

Whether the defendant is domiciled in a Contracting State. It is necessary to distinguish between:


(a) bases of jurisdiction (Title II, Sections 1-6);
(b) other provisions on jurisdiction in Title II;
(c) provisions on recognition and enforcement in Title III.
It is only in the first of these, the bases of jurisdiction under the Convention, that an initial basic distinction is
drawn between the situation where the defendant is and is not domiciled in a Contracting State. Section 1 of
Title II gives one exception where this basic distinction does not operate and, if the wording of individual bases
of jurisdiction is studied, at least one more exception emerges.

The position can be summarized as follows:


(a) Where the defendant is domiciled in a Contracting State the bases of jurisdiction under the Convention will
apply and not the traditional rules of jurisdiction of the forum.
(b) Where the defendant is not domiciled in a Contracting State, in general, the Traditional rules of jurisdiction
of the forum will apply.

(c) There are exceptions to (b), i.e. some of the bases of jurisdiction under the Convention {Articles 16 and 17)
will apply to defendants, even though they are not domiciled in a Contracting State.

(a) Where the defendant is domiciled in a Contracting State: Article 2 in Section 1 contains the most important
basis of jurisdiction under the Convention, that a defendant domiciled in a Contracting State is subject to the
jurisdiction of the courts of that State. If the defendant is to be sued in the courts of a Contracting State other
than that of his domicile, Article 3 provides that this can only be done by virtue of the bases of jurisdiction set
out in Sections 2 to 6. This prevents national courts from using their traditional rules on jurisdiction, including their
exorbitant rules, against a defendant who is domiciled in a Contracting State. In the United Kingdom's case it is
specifically provided in Article 3 that, against such a defendant, jurisdiction can no longer be founded on
presence of the defendant in the forum. Article 3 does not refer to the domicile of the claimant: It follows that,
for example, a Japanese domiciliary, although not domiciled in a Contracting State, would have to use the
bases of jurisdiction under the Convention if he wished to sue in a Contracting State a defendant who was so
domiciled.

Articles 2 and 3 require courts to decide whether a defendant is domiciled in a Contracting State. Section 41 of
the 1982 Act contains a provision for determining when an individual is domiciled in the United Kingdom. He is
so domiciled, if and only if: (a) he is resident in the United Kingdom; and (b) the nature and circumstances of his
residence indicate that he has a substantial connection with the United Kingdom. The latter requirement shall
be presumed to be fulfilled, unless the contrary is proved, if the individual has been resident in the United
Kingdom, or part thereof, for the last three months or more. If the individual is not domiciled in the United
Kingdom it then has to be seen whether he is domiciled in another Contracting State. Section 41 has no
provisions for determining this. This is consistent with Article 52 of the Convention, which, it will be recalled,
provides that, in order to determine whether a party is domiciled in another Contracting State, the courts shall
apply the law of that State.

(b) The defendant is not domiciled in a Contracting State: Where the defendant is not domiciled in a
Contracting State, Article 4 states that the jurisdiction of the courts of each Contracting State shall, subject to
the provisions of Article 16, be determined by the law of that State. If, to take an example, an Englishman
wishes to sue a Californian domiciliary in England, he would have to do so under the traditional English rules on
jurisdiction, which are, by and large, more generous to the claimant than their equivalent under the
Convention. Article 4 therefore, recognizes the use of exorbitant jurisdiction by Contracting States in certain
circumstances. This has far reaching consequences when it comes to enforcing judgments and declining
jurisdiction in cases of lis pendens. Article 4 requires the courts of Contracting States to ascertain when a
defendant is not domiciled in a Contracting State. Having decided that an individual defendant is not
domiciled in the United Kingdom (under the United Kingdom definition), and is not domiciled in another
Contracting State (under. that State's definition), the defendant must be domiciled in a non-Contracting State.
A person must have a domicile in one State or another for the purposes of the Convention and the 1982 Act. In
the rare situations where the particular non-Contracting State which the defendant is domiciled has to be
ascertained, this is done by applying section 41 (7) of the 1982 Act, which provides that an individual is
domiciled in a State other than a Contracting State if and only if (a) he is resident in that State; and

(b) the nature and circumstances of the residence indicate that he has a substantial connection with that
State. In this particular context there is no resumption to aid in showing the required substantial connection,
and it is possible, in rare cases, that an individual may not have a substantial connection with anyone State at
all. Where this happens one would have to be resigned to lying that the individual is domiciled in a non-
Contracting State but it is not clear in which particular one. As regards corporate defendants, section 42(6) will
be applied to determine whether a company has its seat in a non-Contracting State.
(c) The exceptions: Article 4 mentions just one exception to the rule that national bases of jurisdiction apply
where the defendant is not domiciled in a Contracting State; it is contained in Article 16. This gives exclusive
jurisdiction in certain circumstances, regardless of the defendant's domicile. Although Article 4 does not
mention it, there is another exception to the rule; this is Article 17 (agreements on jurisdiction). This article is
drafted in such a way that the defendant is not required to be domiciled in a Contracting State. Other possible
exceptions under Article 18 (submission), Article 12 (an agreement in a
matter relating to insurance) and Article 15 (an agreement in a consumer contract) are discussed later.

2. Jurisdiction Under The Modified Convention


The Civil Jurisdiction and Judgments Act 1982 applies a modified version of the Brussels Convention in cases
where:
(a) The matter is within the scope of the Convention (a civil and commercial matter) and;
(b) The defendant is domiciled in the United Kingdom or the proceedings are of a kind where jurisdiction is
allocated regardless of domicile, e.g. the case involves title to land in part of the United Kingdom,

The defendant must be domiciled in the United Kingdom or the proceedings must be of a kind mentioned in
Article 16 of the 1968 Convention. The Modified Convention is only concerned in Brussels Convention cases with
proceedings where jurisdiction is allocated to the United Kingdom under Article 2 (the defendant is domiciled in
a Contracting State) or

under Article 16 of the 1968 Convention (exclusive jurisdiction regardless of domicile). With both of these articles
the Convention confers international jurisdiction (i.e. on the United Kingdom) and not local jurisdiction (i.e. on a
part of the United Kingdom). Where the Convention assigns jurisdiction to the courts in the United Kingdom
under other articles, it is necessary to regard it as allocating jurisdiction to the courts in a part of the United
Kingdom. In general, there is no problem where Article 5 applies, as this is designed to give local jurisdiction.
Most of the heads of Article 5 are phrased in terms of the courts for a "place" in a Contracting State having
jurisdiction. For example, Article 5(3) refers to the courts for the place where, the harmful event occurred;
ascertaining the "place" where the harmful event, occurred inevitably pinpoints a part of the United Kingdom
whose courts are to have jurisdiction. Where Articles 17 and 18 apply, as has already been seen, there may be
more difficulty in allocating jurisdiction to a part of the United Kingdom.

The requirement under section 16(I)(b) that the defendant be domiciled in the United Kingdom causes the
usual definitional problems. In principle, a person is domiciled in England, Scotland, or Northern Ireland, not in
the United Kingdom. Section 41(2) of the 1982 Act solves this difficulty by defining for the purposes of the Act
whether an individual is domiciled in the United Kingdom.
This is only so if:
(a) he is resident in the United Kingdom; and
(b) the nature and circumstances of his residence indicate that he has a substantial connection with the United
Kingdom.

Showing this substantial connection is made easier by the introduction of a presumption under section 41(6),
according to which, where an individual (a) is resident in the United Kingdom, or in a particular part; and (b)
has been so resident for the last three' months or more, the requirement as to a substantial connection is
presumed to: have been fulfilled, unless the contrary is shown. With corporations, section 42(3) basically
provides that a corporation has its seat in the United Kingdom if (a) it was incorporated and has its registered
office in the United Kingdom; or (b) its central management and control is exercised in the United Kingdom.

3. Jurisdiction Under The Lugano Convention


In broad terms, the rules on jurisdiction contained in the Lugano Convention are applied in the United Kingdom
and in other European Community States where:
(a) The matter is within the scope of the Convention (a civil and commercial matter), and
(b) The defendant is domiciled in an EFTA State (i.e. Iceland, Norway or Switzerland). Even if he is not, certain
provisions in the Convention will still apply, e.g. where the case involves title to Land in all EFTA Stare or where
there is an agreement conferring jurisdiction on the courts of an EFTA State,

When does the Lugano convention apply?


The Lugano Convention applies in relation to jurisdiction in the situation where the matter is within the scope of
.the Convention and the defendant is domiciled in a Contracting State (or Article 16 or 17 gives jurisdiction to a
Contracting State). This is the same as under the Brussels Convention and presents no problem for EFT A
Contracting States. However, Member States of the European Community are Contracting States to both the
Lugano Convention and the Brussels Convention. Given that there are differences between the two
Conventions, Member States of the European Community need to know which Convention to apply. Article
54B of the Lugano Convention deals with this. The effect of this provision, as far as EC Contracting States are
concerned, is that if a defendant is domiciled in an EC Contracting State the Brussels Convention will still apply
in matters of jurisdiction. However, if the defendant is domiciled in an EFT A Contracting State The Lugano
Convention will apply. The latter convention will also apply if Articles 16 or 17 confer jurisdiction on the courts of
an EFT A Contracting State. The provisions in the Lugano Convention on lis pendens and related actions will
apply if there are concurrent proceedings in an EC Contracting State and an EFT A Contracting State.

Under Indian Law


In India, rules relating to Jurisdiction in action inter parties are laid down in sections 19, 20 of the code of Civil
Procedure, 1908.

Section 19 is confined to suit for compensation for wrongs to person or movables.


That section reads as:
Suits for compensation for wrongs to person or movable Where a suit is for compensation for wrong done to the
person or to movable property, if the wrong was done within the local limits of the jurisdiction of one Court and
the defendant resides, or carries on business, or personally works for gain, within the local limits of the jurisdiction
of another Court, the suit may be instituted at the option of the plaintiff in either of the said Courts.

This section confined to torts committed in India an d to defendants residing in India. It does not include within
its ambit the suits in respect of foreign torts. Such cases are covered by section 20, which overlaps this section.
This section deals with inter partes suits.

This section reads as follows:


Subject to the limitations aforesaid, every suit shall be instituted in Court within the local limits of whose
jurisdiction
(a) The defendant, or each of the defendants where there are more than one, at the time of the
commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain;
or
(b) Any of the defendants, where there are more than one, at the time of the commencement of the suit
actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case
either the leave of the Court is given, or the defendants who do not reside, or carry on business, or personally
work for gain, as aforesaid, acquiesce in such institution; or
(c) The cause of action, wholly or in part, arises.
The explanation to this section says that a corporation shall be deemed to carry on business at its sole or
principal office in India or, in respect of any cause of action arising at any place where it has also a
subordinate office, at such place.

Thus, it is submitted that Indian Courts should not construe strictly the requirement of residence in private
international law cases, nor should it exercise jurisdiction over persons on whom process has not bee served just
because cause of action arises within jurisdiction. The Indian rules of Private International Law are identical to
the rules of English Private International Law. Submission to the Court. Under English Law, A person may submit
to the jurisdiction of the Court either under an express agreement or by conduct. If a person to the court
submits to the jurisdiction then the court gets the jurisdiction to try the action and a decree or an order is
passed in such action will be valid internationally. The submission to jurisdiction cannot bring those cases within
the jurisdiction, which are otherwise outside the jurisdiction. A person may submit to the court either by his/her
conduct (conduct which is voluntary) or by a contract (by way of express stipulation in the contract).

Where as the Indian Law of submission, it closely follows English Law. If a person is outside the jurisdiction, the
court will have the jurisdiction on him only if he submits to the jurisdiction of the court. In case, the foreign
defendant does not submit to the jurisdiction of the court, then the judgment delivered in his absence would
be null and void. Mere appearance in the court amounts to submission.

Enforcement And Recognition Of Foreign Judgments


In the Conflict of Laws, issues relevant to the enforcement of foreign judgments are frequently regulated by
bilateral treaty or multilateral international convention to facilitate the reciprocal recognition and enforcement
of judgments between states. The "recognition" of a foreign judgment occurs when the court of one state
accepts a judicial decision made by the courts of another state as in rem and so precludes the re litigation of a
claim on the same facts on the ground of res judicata and/or collateral estoppel. Once the judgment is
recognized, the party who was successful in the original case can then seek its "enforcement". If it was a money
judgment and the debtor has assets in the second jurisdiction, the judgment creditor has access to all the
enforcement remedies as if the case had originated in that second state. If some other form of judgment was
obtained, e.g. affecting status, granting injunctive relief, etc., the second court will make whatever orders are
appropriate to make the first judgment effective. In doing so, the states are relying on the principle of
reciprocity which requires equal respect shown to judgments made by two different sets of courts, i.e. the
courts of both states must treat the judgments as equally binding and enforceable in the two jurisdictions.

If the relevant states are not parties to the Hague Convention on Foreign Judgments in Civil and Commercial
Matters, the EC Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters
or a similar treaty or convention providing for the routine of registration and enforcement between states, the
courts of most states will accept jurisdiction to hear cases for the recognition and enforcement of judgments
awarded by the courts of another state if the defendant or relevant assets are physically located within their
territorial boundaries. Whether recognition will be given is determined by the lex fori, i.e. the domestic law of the
local court and the principles of comity. The following issues are considered:· whether the foreign court properly
accepted personal jurisdiction over the defendant;

· whether the defendant was properly served with notice of the proceedings and given a reasonable
opportunity to be heard which raises general principles of natural justice and will frequently be judged by
international standards (hence, the rules for service on a non-resident defendant outside the jurisdiction must
match general standards and the fact that the first instance court's rules were followed will be irrelevant if the
international view is that the local system is unjust);

# whether the proceedings were tainted with fraud; and


# whether the judgment offends the public policy of the local state.
A foreign Court is defined as a court situate outside India and not established or continued by the authority of
the Central Government. And a Foreign Judgment means a judgment of a foreign court. . In other words, a
foreign judgment means adjudication by a foreign court upon a matter before it. Thus judgments delivered by
courts in England, France, Germany, USA, etc. are foreign judgments.

Sections 13 and 14 enact a rule of res judicata in case of foreign judgments. These provisions embody the
principle of private international law that a judgment delivered by a foreign court of competent jurisdiction
can be enforced by an Indian court and will operate as res judicata between the parties thereto except in the
cases mentioned in Section 13.

Object of Section.13 And 14 is that The judgment of a foreign court is enforced on the principle that where a
court of competent jurisdiction has adjudicated upon a claim, a legal obligation arises to satisfy that claim. The
rules of private international law of each State must in the very nature of things differ, but by the comity of
nations certain rules are recognized as common to civilized jurisdictions. Through part of the judicial system of
each State these common rules have been adopted to adjudicate upon disputes involving a foreign element
and to effectuate judgments of foreign courts in certain matters, or as a result of international conventions.
Such recognition is accorded not as an act of courtesy but on considerations of justice, equity and good
conscience. An awareness of foreign law in a parallel jurisdiction would be a useful guideline in determining our
notions of justice and public policy. We are sovereign within our territory but "it is no derogation of sovereignty
to take account of foreign law."

As has been rightly observed by a great jurist: "We are not so provincial as to say that every solution of a
problem is wrong because we deal with it otherwise at home"; and we shall not brush aside foreign judicial
process unless doing so "would violate some fundamental principle of justice, some prevalent conception of
good morals, some deep-rooted tradition of the common weal."

The Code of Civil Procedure provides that a foreign judgment shall be conclusive as to any matter thereby
directly adjudicated upon between the same parties pr between parties under whom they or any of them
claim litigating under the same title except -
a) Where it has not been pronounced by court of competent jurisdiction;
b) Where it has not been given on the merits of the case;
c) Where it appears on the face of the proceeding to be founded on an incorrect view of international law or
a refusal to recognize the law of India in cases in which such law is applicable;
d) Where the proceeding in which the judgment was obtained or opposed to natural justice;
e) Where it has been obtained by fraud;
f) Where it sustains a claim founded on a breach of any law in force in India

# Foreign Judgment not by a Competent Court


It is a fundamental principle of law that the judgment or order passed by the court, which has no jurisdiction, is
null and void. Thus, a judgment of a foreign court to be conclusive between the parties must be a judgment
pronounced by a court of competent jurisdiction . Such judgment must be by a court competent both by the
law of state, which has constituted it and in an international sense and it must have directly adjudicated upon
the "matter" which is pleaded as res judicata. But what is conclusive is the judgment, i.e. the final adjudication
and not the reasons for the judgment given by the foreign court.

Thus if A sues B in a foreign court, and if the suit is dismissed, the decision will operate as a bar to a fresh suit by A
in India on the same cause of action. On the other hand, if a decree is passed in favor of A by a foreign court
against B and he sues B on the judgment in India, B will be precluded from putting in issue the same matters
that were directly and substantially in issue in the suit and adjudicated upon by the foreign court.

# Foreign Judgment Against International Or Indian Law. A judgment based upon an incorrect view of
international law or a refusal to recognize the law of India where such law is applicable is not conclusive. But
the mistake must be apparent on the face of the proceedings. Thus, where in a suit instituted in England on the
basis of a contract made in India, the English court erroneously applied English law, the judgment of the court is
covered by this clause in as much as it is a general principle of Private International Law that the rights and
liabilities of the parties to a contract are governed by the place where the contract is made (lex loci
contractus). "When a foreign judgment is founded on a jurisdiction or on a ground not recognized by Indian
law or International Law, it is a judgment which is in defiance pf the law. Hence, it is not conclusive of the
matter adjudicated therein and, therefore, unenforceable in this country."

# Foreign Judgments Opposed To Natural Justice


It is the essence of a judgment of a court that it must be obtained after due observance on the judicial
process, i.e., the court rendering the judgment must observe the minimum requirements of natural justice - it
must be composed of impartial persons, act fairly, without bias, and in good faith; it must give reasonable
notice to the parties to the dispute and afford each party adequate opportunity of presenting his case. A
judgment, which is the result of bias or want of impartiality on the part of a judge, will be regarded as a nullity
and the trial "corum non judice".

Thus a judgment given without notice of the suit to the defendant or without affording a reasonable
opportunity of representing his case is opposed to natural justice. Similarly, a judgment against a party not
properly represented in the proceedings or where the judge was biased is contrary to natural justice and,
therefore, does not operate as res judicata.

But the expression "natural justice" in clause (d) of Section 13 relates to the irregularities in procedure rather than
to the merits of the case. A foreign judgment of a competent court, therefore, is conclusive even if it proceeds
on an erroneous view of the evidence or the law, if the minimum requirements of the judicial process are
assured; correctness of the judgment in law or evidence is not predicated as a condition for recognition of its
conclusiveness by the municipal court. Thus, a foreign judgment is not open to attack on the ground that the
law of domicile had not been properly applied in deciding the validity of adoption or that the court disagrees
with the conclusion of the foreign court, if otherwise the principles of natural justice have been complied with.

# Foreign Judgment Obtained By Fraud


It is a well-established principle of Private International Law that if a foreign judgment is obtained by fraud, it will
not operate as res judicata.

Lord Denning observed: " No judgment of a court, no order of a Minister, can be allowed to stand, if it has been
obtained by fraud." Cheshire rightly states: "It is firmly established that a foreign judgment is impeachable for
fraud in the sense that upon proof of fraud it cannot be enforced by action in England." All judgments whether
pronounced by domestic or foreign courts are void if obtained by fraud, for fraud vitiates the most solemn
proceeding of a court of justice. In the leading case of Satya v. Teja Singh , where a husband obtained a
decree of divorce against his wife from an American Court averring that he was domiciled in America.
Observing that the husband was not a bonafide resident or domicile of America, and he had played fraud on
a foreign court falsely representing to it incorrect jurisdictional fact, the Supreme Court held that the decree
was without jurisdiction and a nullity.

Again, in Narsimha Rao v. Venkata Kakshmi, A husband obtained a decree of divorce against his wife B again
from an American High Court on the ground that he was a resident of America. Then he remarried C. B filed a
criminal complaint against A and C for bigamy. A and C filed an application for discharge.

Dismissing the application, the Supreme Court


held that the decree of dissolution of Marriage was without jurisdiction in as much as neither the marriage was
solemnized nor the parties last resided together in America. It was, therefore, unenforceable in India.
In Chengalvaraya Naidu v. Jagannath, the Supreme Court stated: " It is the settled proposition of law that a
judgment or decree obtained by playing fraud on the court is a nullity and non est. in the eyes of the law. Such
a judgment/decree by the first court or by the highest court has to be treated as a nullity by every court,
whether superior or inferior. It can be challenged in any court even in collateral proceedings."

The fraud may be either fraud on the part of the party invalidating a foreign judgment in whose favor the
judgment is given or fraud on the court pronouncing the judgment. Such fraud, however, should not be merely
constructive, but must be actual fraud consisting of representations designed and intended to mislead; a mere
concealment of fact is not sufficient to avoid a foreign judgment.

# Foreign Judgment Founded on Breach of Indian Law


Where a foreign judgment is founded on a breach of any law in force in India, it would not be enforced in
India. The rules of Private International Law cannot be adopted mechanically and blindly. Every case, which
comes before an Indian Court, must be decided in accordance with Indian law. It is implicit that the foreign
law must not offend our public policy. Thus a foreign judgment for a gaming debt or on a claim, which is barred
under the Law of Limitation in India, is not conclusive. Similarly, a decree for divorce passed by a foreign court
cannot be confirmed by an Indian court if under the Indian law the marriage is
indissoluble. It is implicit that the foreign law and foreign judgment would not offend against our public policy.

Section 14 of the Code declares that the court shall presume, upon the production of any document
purporting to be a certified copy of a foreign judgment, that such judgment was pronounced by a court of
competent jurisdiction, unless the contrary appears on the record, or is proved. However, if for admissibility of
such copy any further condition is required to be fulfilled, it can be admitted in evidence only if that condition is
satisfied.

Enforcement of Foreign Judgments


A foreign judgment, which is conclusive under Section 13 of the Code, can be enforced in India in the following
ways:
1. By instituting a suit on such foreign judgment,
A foreign judgment may be enforced by instituting a suit on such foreign judgment. The general principle of law
is that any decision by a foreign court, tribunal or quasi-judicial authority is not enforceable in a country unless
such decision is embodied in a decree of a court of that country. In such a suit, the court cannot go into the
merits of the original claim and it shall be conclusive as to any mater thereby directly adjudicated upon
between the same parties. Such a suit must be filed within a period of three years from the date of the
judgment.

2. Execution Proceedings
A foreign judgment may also be enforced by proceedings in execution in certain specified cases mentioned in
Section 44-A of the Code. The said section provides that where a certified copy of a decree if any of the
superior courts of any reciprocating territory has been filed in a District Court, the decree may be executed in
India as if it had been passed by the District Court. When a foreign judgment is sought to be executed under
Section 44-A, it will be open to the judgment-debtor to rake all objections, which would have been open to him
under Section 13 if a suit had been filed on such judgment. The fact that out of six exceptions there has been
due compliance with some of the exceptions is of no avail. The decree can be executed under Section 44-A
only if all the conditions of Section 13 (a) to (f) are satisfied.

Conclusion
In case a party is a foreign party the party has to submit to the jurisdiction the court first. And the jurisdiction is
decided with the
help of certain rules of Private International Law which are the connecting rules which help the courts in
deciding what law should be applied to decide the case. Then, the foreign party is required to submit to the
court that has jurisdiction i.e. he/she accept the decision of that court. After the court gives the decision, in
order to enforce it in the foreign state, the foreign court need to recognize it and then it will be enforced. For
Recognition and enforcement of foreign decrees and orders every country has its own rules/Laws. Thus, the
Indian rules of Private International Law are identical to the rules of English Private International Law.
The author can be reached at: tanvikapoor@legalserviceindia.com / Print This Article

BELLIS VS. BELLIS 20 SCRA 258

Facts:

Amos G. Bellis was a citizen and resident of Texas at the time of his death. Before he died, he made

two wills, one disposing his Texas properties, the other disposing his Philippine properties. In both wills, the

recognized illegitimate children were not given any share. Texas has no conflict rule (Rule of Private

International Law) governing successional rights. Furthermore, under Texas law, there are no compulsory heirs.

Issue:

Whether or not such illegitimate children of Bellis be entitled to successional rights.

Held:

The said illegitimate children are not entitled to their legitimes. Under Texas law, there are no legitimes.

Even if the other will was executed in the Philippines, his national law, still, will govern the properties for

succession even if it is stated in his testate that it shall be governed by the Philippine law.

MANUELA BARRETTO GONZALEZ, Plaintiff-Appellee, vs. AUGUSTO C. GONZALEZ, Defendant-Appellant.


AUGUSTO C. GONZALEZ, Jr., ET AL., intervenors-appellees.
Quintin Paredes and Barrera and Reyes for appellant.
DeWitt, Perkins and Brady for plaintiff-appellee.
Camus and Delgado for intervenors-appellees.
HULL, J.:
Plaintiff and defendant are citizens of the Philippine Islands and at present residents of the City of Manila. They
were married in the City of Manila on January 19, 1919, and lived together as man and wife in the Philippine
Islands until the spring of 1926. They voluntarily separated and since that time have not lived together as man
and wife. Of this union four children were born who are now 11, 10, 8 and 6 years of age. Negotiations between
the parties, both being represented by attorneys, continued for several months, whereupon it was mutually
agreed to allow the plaintiff for her support and that of her children, five hundred pesos (P500) monthly; this
amount to be increased in case of illness or necessity, and the title of certain properties to be put in her name.
Shortly after this agreement the husband left the Islands, betook himself to Reno, Nevada, and secured in that
jurisdiction an absolute divorce on the ground of desertion, which decree was dated November 28, 1927.
Shortly thereafter the defendant moved to California and returned to these Islands in August 1928, where he
has since remained. On the same date that he secured a divorce in Nevada he went through the forms of
marriage with another citizen of these Islands and now has three children as a result of that marriage.
Defendant, after his departure from these Islands, reduced the amount he had agreed to pay monthly for the
support of his wife and four minor children and has not made the payments fixed in the Reno divorce as
alimony.chanroblesvirtualawlibrary chanrobles virtual law library
Shortly after his return his wife brought action in the Court of First Instance of Manila requesting that the courts of
the Philippine Islands confirm and ratify the decree of divorce issued by the courts of the State of Nevada; that
section 9 of Act No. 2710, which reads as follows:
The decree of divorce shall dissolve the community of property as soon as such decree becomes final, but shall
not dissolve the bonds of matrimony until one year thereafter.chanroblesvirtualawlibrary chanrobles virtual law
library
The bonds of matrimony shall not be considered as dissolved with regard to the spouse who, having legitimate
children, has not delivered to each of them or to the guardian appointed by the court, within said period of
one year, the equivalent of what would have been due to them as their legal portion if said spouse had died
intestate immediately after the dissolution of the community of property.
be enforced, and that she and the defendant deliver to the guardian ad litem the equivalent of what would
have been due to their children as their legal portion from the respective estates had their parents did intestate
on November 28, 1927. It is also prayed that the community existing between plaintiff and defendant be
declared dissolved and the defendant be ordered to render an accounting and to deliver to the plaintiff her
share of the community property, that the defendant be ordered to pay the plaintiff alimony at the rate of five
hundred pesos (P500) per month, that the defendant be ordered to pay the plaintiff, as counsel fees, the sum
of five thousand pesos (P5000), and that the defendant be ordered to pay plaintiff the expenses incurred in
educating the three minor sons.chanroblesvirtualawlibrary chanrobles virtual law library
A guardian ad litem was appointed for the minor children, and they appear as intervenors and join their
mother in these proceedings. The Court of First Instance, after hearing, found against the defendant and
granted judgment as prayed for by the plaintiff and intervenors, with the exception of reducing attorneys fees
to three thousand, and also granted costs of the action against the defendant. From this judgment defendant
appeals and makes the following assignment of errors:
I. The lower court erred in not declaring that paragraph 2 of section 9 of the Philippine Divorce Law, is
unconstitutional, null and void.chanroblesvirtualawlibrary chanrobles virtual law library
II. The lower court erred in holding that section 9 of Act No. 2710 (Divorce Law) applies to the Nevada decree
of divorce issued in favor of appellant Augusto C. Gonzalez, said decree being entitled to confirmation and
recognition.chanroblesvirtualawlibrary chanrobles virtual law library
III. The lower court erred in not dismissing the complaint in intervention for lack of cause of action against
appellant and appellee.chanroblesvirtualawlibrary chanrobles virtual law library
IV. The lower court erred in not declaring the notice of lis pendens filed by intervenors to be null and
void.chanroblesvirtualawlibrary chanrobles virtual law library
V. The lower court erred in ordering the appellant to pay the sum of P500 per month for the support not only of
his children but also of his ex-wife, appellee herein, Manuela Barretto.chanroblesvirtualawlibrary chanrobles
virtual law library
VI. The lower court erred in not holding that plaintiff- appellee, Manuela Barretto, is not entitled to support from
her ex-husband, herein appellant, over and beyond the alimony fixed by the divorce decree in Exhibit
A.chanroblesvirtualawlibrary chanrobles virtual law library
VII. The lower court erred in condemning defendant appellant to pay to plaintiff-appellee P3,000 attorney's
fees.chanroblesvirtualawlibrary chanrobles virtual law library
VIII. The lower court erred in denying appellant's motion for new trial.
While the parties in this action are in dispute over financial matters they are in unity in trying to secure the courts
of this jurisdiction to recognize and approve of the Reno divorce. On the record here presented this can not be
done. The public policy in this jurisdiction on the question of divorce is clearly set forth in Act No. 2710, and the
decisions of this court: Goitia vs. Campos Rueda (35 Phil., 252); Garcia Valdez vs. Sotera�a Tuason (40 Phil., 943-
952); Ramirez vs. Gmur (42 Phil., 855); Chereau vs. Fuentebella (43 Phil., 216); Fernandez vs. De Castro (48 Phil.,
123); Gorayeb vs. Hashim (50 Phil., 22); Francisco vs. Tayao (50 Phil., 42); Alkuino Lim Pang vs. Uy Pian Ng Shun
and Lim Tingco (52 Phil., 571); and the late case of Cousins Hix vs. Fluemer, decided March 21, 1931, and
reported in 55 Phil., 851.chanroblesvirtualawlibrary chanrobles virtual law library
The entire conduct of the parties from the time of their separation until the case was submitted to this court, in
which they all prayed that the Reno divorce be ratified and confirmed, clearly indicates a purpose to
circumvent the laws of the Philippine Islands regarding divorce and to secure for themselves a change of status
for reasons and under conditions not authorized by our law. At all times the matrimonial domicile of this couple
has been within the Philippine Islands and the residence acquired in the State of Nevada by the husband of
the purpose of securing a divorce was not a bona fide residence and did not confer jurisdiction upon the Court
of that State to dissolve the bonds if matrimony in which he had entered in 1919. While the decisions of this
court heretofore in refusing to recognize the validity of foreign divorce has usually been expressed in the
negative and have been based upon lack of matrimonial domicile or fraud or collusion, we have not
overlooked the provisions of the Civil Code now in force in these Islands. Article 9 thereof reads as follows:
The laws relating to family rights and duties, or to the status, condition and legal capacity or persons, are
binding upon Spaniards even though they reside in a foreign country.
And article 11, the last part of which reads:
. . . the prohibitive laws concerning persons, their acts and their property, and those intended to promote
public order and good morals, shall nor be rendered without effect by any foreign laws or judgments or by
anything done or any agreements entered into a foreign country.
It is therefore a serious question whether any foreign divorce relating to citizens of the Philippine Islands, will be
recognized in this jurisdiction, except it be for a cause, and under conditions for which the courts of Philippine
Islands would grant a divorce. The lower court in granting relief as prayed for frankly stated that the securing of
the divorce, the contracting of another marriage and the bringing into the world of innocent children brings
about such a condition that the court must grant relief. The hardships of the existing divorce laws of the
Philippine Islands are well known to the members of the Legislature. It is of no moment in this litigation what he
personal views of the writer on the subject of divorce may be. It is the duty of the courts to enforce the laws of
divorce as written by the Legislature if they are constitutional. Courts have no right to say that such laws are too
strict or too liberal.chanroblesvirtualawlibrary chanrobles virtual law library
Litigants by mutual agreement can not compel the courts to approve of their own actions or permit the
personal relations of the citizens of these Islands to be affected by decrees of foreign courts in a manner which
our Government believes is contrary to public order and good morals. Holding the above views it becomes
unnecessary to discuss the serious constitutional question presented by appellant in his first assignment of
error.chanroblesvirtualawlibrary chanrobles virtual law library
The judgment of the Court of First Instance of the City of Manila must therefore be reversed and defendant
absolved from the demands made against him in this action. This, however, without prejudice to any right of
maintenance that plaintiff and the intervenors may have against defendant. No special pronouncement as to
costs. So ordered.
Avance�a, C.J., Street, Villamor Ostrand, Abad Santos, Vickers, Imperial and Butte JJ., concur.
1. BARRETO GONZALES vs GONZALES 58 Phil 238March 7, 1933
2. FACTS: • The plaintiff & defendant were bothcitizens of the Philippines, married& lived together from
January1919 until Springof 1926. After whichtheyvoluntaryseparated& have not livedtogether as man&
wife, theyhad4 minor childrentogether. • After negotiations, both parties mutuallyagreedto
allowManuela Barreto(plaintiff) for her & her children’s support of P500 (five hundred pesos)
monthlywhichto be increasedincases of necessity& illness, andthat the title of certainpropertiesbe put
inher name. • Shortlyafter the agreement, Augusto Gonzales (defendant), whento Reno, Nevada &
secured inthat jurisdictionanabsolute divorce onthe ground ofdesertion datedNovember 28, 1927. On
that same date he went throughthe forms of marriage with another Filipino citizen as well & had 3
children withher. • When Gonzales left the Philippines, he reduced the amount he had agreedto
paymonthly for the support of Manuela Barreto& her children & has not made the payments fixedinthe
Reno divorce as alimony. • Gonzales came backto the Philippines inAugust 1928 and shortlyafter,
Barretobrought an actionat the CFI-Manila requesting to confirm & ratifythe decree of divorce
issuedbythe courts of Nevada & invokedsec 9 of Act 2710. Such is requested to be enforced, anddeliver
to the Guardianad litem the equivalent of what wouldhave beendue to their childrenas their legal
portion fromrespective estateshadtheir parents diedintestate onNovember 28, 1927, theyalsoprayed
that the marriage existingbetweenBarreto & Gonzalesbe declared dissolved& Gonzales be orderedto
payBarretoP500 per month, counsel fees ofP5000 & all the expenses incurredin educating the 3 minor
sons. The guardians of the childrenalso filed as intervenors inthe case. • After the hearing, the CFI-Manila
granted the judgement infavor of the plaintiff & intervenors, but reducedthe attorney’s fees to P3000
instead & also granted the costs of the actionagainst the defendant, Hence, thisappeal byGonzales
sayingthat the lower court erred intheir decision.

3. ISSUE:WON anyforeign divorce, relatingto citizens of the Philippine Islands, will be recognizedinthis
jurisdiction, except it be for a cause, andunder conditions for whichthe courts of the Philippine Islands
would grant a divorce.

4. HELD: NO. The lower court erredingrantingthe reliefas prayedfor ongranting the divorce, because: • The
court said that securingthe jurisdictionof the courts to recognize & approve the divorce done inReno,
Nevada cannot be done accordingto the public policyin this jurisdictionon the questionof divorce. • It’s
clear in Act No. 2710 & court decisions on cases such as Goitia VS. Campos Rueda that the entire
conduct of the parties from the time of their separation untilthe case was submittedpraying the
ratificationof the Reno Divorce wasclearlya circumventionof the law regarding divorce & will be done
under conditions not authorized byour laws. • The matrimonial domicile of the couple had always been
the Philippines& the residence acquired bythe husbandin Reno, Nevada was a bona fide residence &
didnot confer jurisdictionuponthe court of that state to dissolve the matrimonial bonds inwhichhe had
entered in 1919. • Art 9 & Art 11 of the Civil Code & The Divorce Lawof the Philippines does not
allowsuchto be done, the effect of foreigndivorce inthe Philippines says that litigants cannot compel
the courts to approve oftheir ownactions or permit the personal relations of the Citizens of the
Philippines to be affectedbydecrees ofdivorce of foreigncourts in manner whichout government
believes is contraryto public order & good morals. SC RULING:The decisionof CFI-Manila was REVERSED &
Defendant is absolvedfrom the demands made against himinthis action. CONNECTION TO PERSONS,
FAMILY RELATION/ CIVIL CODE:
5. 3. 3 • Article 9 of the Old CivilCode, nowinArt 15 says that “Laws relating to familyrights & duties or to
status, condition, and legal capacityof persons, are binding upon Spaniards even though theyreside in
a foreigncountry” • The last part ofArt 11 of the Old CivilCode, nowinArt 17 alsostates “...the prohibitive
laws concerningpersons, their acts & their property, andthose intendedto promote public order & good
morals, shall not be rendered without effect byanyforeignlaws or judgements or by anythingdone or
anyagreements entered into ina foreign country.” Divorce Laws of the Philippines—The hardships
ofexistingdivorce laws ofthe Philippine Islands are well known to the members ofthe Legislature. It is the
dutyof the courts to enforce the laws of divorce as writtenbythe Legislature if theyconstitutional. Courts
have no right to saysuchlaws are too strict or too liberal. • At the time thisdecisionwas renderedthere
was stillabsolute divorce inthe Philippines on the groundof Adulteryon the part of the wife,
andConcubinage on the part of the husband; the divorce, however, couldbe
grantedonlyuponshowing that the defendant hadbeen convictedbyfinal judgement for the adulteryor
concubinage as the case maybe. The new Civil Code hasabolishedabsolute divorce, leaving
onlylegalseparation, which is equivalent to relative divorce.

G.R. No. L-22595 November 1, 1927


Testate Estate of Joseph G. Brimo, JUAN MICIANO, administrator, petitioner-appellee,
vs.
ANDRE BRIMO, opponent-appellant.
Ross, Lawrence and Selph for appellant.
Camus and Delgado for appellee.
ROMUALDEZ, J.:
The partition of the estate left by the deceased Joseph G. Brimo is in question in this case.
The judicial administrator of this estate filed a scheme of partition. Andre Brimo, one of the brothers of the
deceased, opposed it. The court, however, approved it.
The errors which the oppositor-appellant assigns are:
(1) The approval of said scheme of partition; (2) denial of his participation in the inheritance; (3) the denial of
the motion for reconsideration of the order approving the partition; (4) the approval of the purchase made by
the Pietro Lana of the deceased's business and the deed of transfer of said business; and (5) the declaration
that the Turkish laws are impertinent to this cause, and the failure not to postpone the approval of the scheme
of partition and the delivery of the deceased's business to Pietro Lanza until the receipt of the depositions
requested in reference to the Turkish laws.
The appellant's opposition is based on the fact that the partition in question puts into effect the provisions of
Joseph G. Brimo's will which are not in accordance with the laws of his Turkish nationality, for which reason they
are void as being in violation or article 10 of the Civil Code which, among other things, provides the following:
Nevertheless, legal and testamentary successions, in respect to the order of succession as well as to the
amount of the successional rights and the intrinsic validity of their provisions, shall be regulated by the
national law of the person whose succession is in question, whatever may be the nature of the property
or the country in which it may be situated.
But the fact is that the oppositor did not prove that said testimentary dispositions are not in accordance with
the Turkish laws, inasmuch as he did not present any evidence showing what the Turkish laws are on the matter,
and in the absence of evidence on such laws, they are presumed to be the same as those of the Philippines.
(Lim and Lim vs. Collector of Customs, 36 Phil., 472.)
It has not been proved in these proceedings what the Turkish laws are. He, himself, acknowledges it when he
desires to be given an opportunity to present evidence on this point; so much so that he assigns as an error of
the court in not having deferred the approval of the scheme of partition until the receipt of certain testimony
requested regarding the Turkish laws on the matter.
The refusal to give the oppositor another opportunity to prove such laws does not constitute an error. It is
discretionary with the trial court, and, taking into consideration that the oppositor was granted ample
opportunity to introduce competent evidence, we find no abuse of discretion on the part of the court in this
particular. There is, therefore, no evidence in the record that the national law of the testator Joseph G. Brimo
was violated in the testamentary dispositions in question which, not being contrary to our laws in force, must be
complied with and executed. lawphil.net
Therefore, the approval of the scheme of partition in this respect was not erroneous.
In regard to the first assignment of error which deals with the exclusion of the herein appellant as a legatee,
inasmuch as he is one of the persons designated as such in will, it must be taken into consideration that such
exclusion is based on the last part of the second clause of the will, which says:
Second. I like desire to state that although by law, I am a Turkish citizen, this citizenship having been
conferred upon me by conquest and not by free choice, nor by nationality and, on the other hand,
having resided for a considerable length of time in the Philippine Islands where I succeeded in acquiring
all of the property that I now possess, it is my wish that the distribution of my property and everything in
connection with this, my will, be made and disposed of in accordance with the laws in force in the
Philippine islands, requesting all of my relatives to respect this wish, otherwise, I annul and cancel
beforehand whatever disposition found in this will favorable to the person or persons who fail to comply
with this request.
The institution of legatees in this will is conditional, and the condition is that the instituted legatees must respect
the testator's will to distribute his property, not in accordance with the laws of his nationality, but in accordance
with the laws of the Philippines.
If this condition as it is expressed were legal and valid, any legatee who fails to comply with it, as the herein
oppositor who, by his attitude in these proceedings has not respected the will of the testator, as expressed, is
prevented from receiving his legacy.
The fact is, however, that the said condition is void, being contrary to law, for article 792 of the civil Code
provides the following:
Impossible conditions and those contrary to law or good morals shall be considered as not imposed and
shall not prejudice the heir or legatee in any manner whatsoever, even should the testator otherwise
provide.
And said condition is contrary to law because it expressly ignores the testator's national law when, according to
article 10 of the civil Code above quoted, such national law of the testator is the one to govern his
testamentary dispositions.
Said condition then, in the light of the legal provisions above cited, is considered unwritten, and the institution
of legatees in said will is unconditional and consequently valid and effective even as to the herein oppositor.
It results from all this that the second clause of the will regarding the law which shall govern it, and to the
condition imposed upon the legatees, is null and void, being contrary to law.
All of the remaining clauses of said will with all their dispositions and requests are perfectly valid and effective it
not appearing that said clauses are contrary to the testator's national law.
Therefore, the orders appealed from are modified and it is directed that the distribution of this estate be made
in such a manner as to include the herein appellant Andre Brimo as one of the legatees, and the scheme of
partition submitted by the judicial administrator is approved in all other respects, without any pronouncement
as to costs.
So ordered.
Street, Malcolm, Avanceña, Villamor and Ostrand, JJ., concur.

AZNAR VS. GARCIA 7 S 95

Facts:

Edward S. Christensen, though born in New York, migrated to California where he resided and

consequently was considered a California Citizen for a period of nine years to 1913. He came to the Philippines

where he became a domiciliary until the time of his death. However, during the entire period of his residence in

this country, he had always considered himself as a citizen of California.

In his will, executed on March 5, 1951, he instituted an acknowledged natural daughter, Maria Lucy

Christensen as his only heir but left a legacy of some money in favor of Helen Christensen Garcia who, in a

decision rendered by the Supreme Court had been declared as an acknowledged natural daughter of his.

Counsel of Helen claims that under Art. 16 (2) of the civil code, California law should be applied, the matter is

returned back to the law of domicile, that Philippine law is ultimately applicable, that the share of Helen must

be increased in view of successional rights of illegitimate children under Philippine laws. On the other hand,

counsel for daughter Maria , in as much that it is clear under Art, 16 (2) of the Mew Civil Code, the national of

the deceased must apply, our courts must apply internal law of California on the matter. Under California law,

there are no compulsory heirs and consequently a testator should dispose any property possessed by him in

absolute dominion.

Issue:

Whether Philippine Law or California Law should apply.

Held:

The Supreme Court deciding to grant more successional rights to Helen Christensen Garcia said in

effect that there be two rules in California on the matter.

1. The conflict rule which should apply to Californian’s outside the California, and

2. The internal Law which should apply to California domiciles in califronia.

The California conflict rule, found on Art. 946 of the California Civil code States that “if there is no law to

the contrary in the place where personal property is situated, it is deemed to follow the decree of its owner and

is governed by the law of the domicile.”

Christensen being domiciled outside california, the law of his domicile, the Philippines is ought to be

followed.

Wherefore, the decision appealed is reversed and case is remanded to the lower court with instructions

that partition be made as that of the Philippine law provides.

THE GOVERNMENT OF THE PHILIPPINE ISLANDS, Plaintiff-Appellee, vs. GEORGE I. FRANK, Defendant-Appellant.

DECISION
JOHNSON, J.:
Judgment was rendered in the lower court on the 5th day of September, 1905. the Defendantappealed. On
the 12th day of October, 1905, the Appellant filed his printed bill of exceptions with the clerk of the Supreme
Court. On the 5th day of December, 1905, the Appellant filed his brief with the clerk of the Supreme Court. On
the 19th day of January, 1906, the Attorney-General filed his brief in said cause. Nothing further was done in
said cause until on about the 30th day of January, 1909, when the respective parties were requested by this
court to prosecute the appeal under penalty of having the same dismissed for failure so to do; whereupon
the Appellant, by petition, had the cause placed upon the calendar and the same was heard on the 2d day
of February, 1909.
The facts from the record appear to be as follows: chanrobles virtualawlibrary
First. That on or about the 17th day of April, 1903, in the city of Chicago, in the State of Illinois, in the United
States, the Defendant, through a representative of the Insular Government of the Philippine Islands, entered
into a contract for a period of two years with the Plaintiff, by which the Defendant was to receive a salary of
1,200 dollars per year as a stenographer in the service of the said Plaintiff, and in addition thereto was to be
paid in advance the expenses incurred in traveling from the said city of Chicago to Manila, and one-half salary
during said period of travel.
Second. Said contract contained a provision that in case of a violation of its terms on the part of
the Defendant, he should become liable to the Plaintiff for the amount expended by the Government by way
of expenses incurred in traveling from Chicago to Manila and the one-half salary paid during such period.
Third. The Defendant entered upon the performance of his contract upon the 30th day of April, 1903, and was
paid half-salary from the date until June 4, 1903, the date of his arrival in the Philippine Islands.
Fourth. That on the 11th day of February, 1904, the Defendant left the service of the Plaintiff and refused to
make a further compliance with the terms of the contract.
Fifth. On the 3d day of December, 1904, the Plaintiff commenced an action in the Court of First Instance of the
city of Manila to recover from the Defendant the sum of 269. 23 dollars, which amount the Plaintiff claimed had
been paid to the Defendant as expenses incurred in traveling from Chicago to Manila, and as half-salary for
the period consumed in travel.
Sixth. It was expressly agreed between the parties to said contract that Laws No. 80 and No. 224 should
constitute a part of said contract.
To the complaint of the Plaintiff the Defendant filed a general denial and a special defense, alleging in his
special defense that the Government of the Philippine Islands had amended Laws No. 80 and No. 224 and had
thereby materially altered the said contract, and also that he was a minor at the time the contract was
entered into and was therefore not responsible under the law.
To the special defense of the Defendant the Plaintiff filed a demurrer, which demurrer the court sustained.
Upon the issue thus presented, and after hearing the evidence adduced during the trial of the cause, the lower
court rendered a judgment against the Defendant and in favor of the Plaintiff for the sum of 265. 90 dollars. The
lower court found that at the time the Defendant quit the service of the Plaintiff there was due him from the
said Plaintiff the sum of 3. 33 dollars, leaving a balance due the Plaintiff in the sum of 265. 90 dollars. From this
judgment the Defendant appealed and made the following assignments of error: chanrobles virtualawlibrary
1. The court erred in sustaining Plaintiff’s demurrer to Defendant’s special defenses.
2. The court erred in rendering judgment against the Defendant on the facts.
With reference to the above assignments of error, it may be said that the mere fact that the legislative
department of the Government of the Philippine Islands had amended said Acts No. 80 and No. 224 by Acts
No. 643 and No. 1040 did not have the effect of changing the terms of the contract made between
the Plaintiff and the Defendant. The legislative department of the Government is expressly prohibited by section
5 of the Act of Congress of 1902 from altering or changing the terms of a contract. The right which
the Defendant had acquired by virtue of Acts No. 80 and No. 224 had not been changed in any respect by
the fact that said laws had been amended. These acts, constituting the terms of the contract, still constituted a
part of said contract and were enforceable in favor of the Defendant.
The Defendant alleged in his special defense that he was a minor and therefore the contract could not be
enforced against him. The record discloses that, at the time the contract was entered into in the State of Illinois,
he was an adult under the laws of that State and had full authority to contract. The Plaintiff [the Defendant]
claims that, by reason of the fact that, under that laws of the Philippine Islands at the time the contract was
made, made persons in said Islands did not reach their majority until they had attained the age of 23 years, he
was not liable under said contract, contending that the laws of the Philippine Islands governed. It is not
disputed — upon the contrary the fact is admitted — that at the time and place of the making of the contract
in question the Defendant had full capacity to make the same. No rule is better settled in law than that matters
bearing upon the execution, interpretation and validity of a contract are determined b the law of the place
where the contract is made. (Scudder vs. Union National Bank, 91 U. S., 406.) cralaw Matters connected with its
performance are regulated by the law prevailing at the place of performance. Matters respecting a remedy,
such as the bringing of suit, admissibility of evidence, and statutes of limitations, depend upon the law of the
place where the suit is brought. (Idem.) cralaw
The Defendant’s claim that he was an adult when he left Chicago but was a minor when he arrived at Manila;
that he was an adult a the time he made the contract but was a minor at the time the Plaintiff attempted to
enforce the contract, more than a year later, is not tenable.
Our conclusions with reference to the first above assignment of error are, therefore.
First. That the amendments to Acts No. 80 and No. 224 in no way affected the terms of the contract in question;
and
Second. The Plaintiff [Defendant] being fully qualified to enter into the contract at the place and time the
contract was made, he cannot plead infancy as a defense at the place where the contract is being enforced.
We believe that the above conclusions also dispose of the second assignment of error.
For the reasons above stated, the judgment of the lower court is affirmed, with costs.
Arellano, C.J., Torres, Mapa, Carson and Willard, JJ., concur.
GERMANN & CO., Plaintiffs-Appellees, v. DONALDSON, SIM & CO., Defendants-Appellants.

Fernando de la Cantera, for Appellants.

Francisco Ortigas, for Appellees.

SYLLABUS
1. CONTRACT; CONFLICT OF LAWS. — The validity of a power of attorney executed in Germany between
German subjects should considered according to the laws of that country.

2. AGENCY; POWER OF ATTORNEY. — The right to commence action for collection of debts owing to principal is
not an incident of strict ownership, which must be conferred in express terms.

3. POWER OF ATTORNEY; RIGHT TO SUE. — The power to "legally compel" the payment of debts owing to the
principal is an express grant of the right to bring suit for the collection of such debts.

DECISION

LADD, J. :

This is an incident of want of personality of the plaintiff’s attorney. The action is to recover a sum claimed to be
due for freight under a charter party. It was brought by virtue of a general power for suits, executed in Manila
October 27, 1900, by Fernando Kammerzell, and purporting to be a substitution in favor of several attorneys of
powers conferred upon Kammerzell in an instrument executed in Berlin, Germany, February 5, 1900, by Max
Leonard Tornow, the sole owner of the business carried on in Berlin and Manila under the name of Germann &
Co. The first-named instrument was authenticated by a notary with the formalities required by the domestic
laws. The other was not so authenticated. Both Tornow and Kammerzell are citizens of Germany. Tornow is a
resident of Berlin and Kammerzell of Manila.

The defendants claim that the original power is invalid under article 1280, No. 5, of the Civil Code, which
provides that powers for suits must be contained in a public instrument. No claim is made that the document
was not executed with the formalities required by the German law in the case of such an instrument. We see no
reason why the general principle that the formal validity of contracts is to be tested by the laws of the country
where they are executed should not apply. (Civil Code, art. 11.)

The defendants also claim that the original power can not be construed as conferring upon Kammerzell
authority to institute or defend suits, from which contention, if correct, it would of course follow that the
delegated power is invalid. In support of this contention reliance is placed upon article 1713 of the Civil Code,
by which it is provided that "an agency stated in general terms only includes acts of administration," and that
"in order to compromise, alienate, mortgage, or to execute any other act of strict ownership an express
commission is required."cralaw virtua1aw library

It has been argued by counsel for the plaintiffs that these provisions of the domestic law are not applicable to
the case of an agency conferred, as was that in question, by one foreigner upon another in an instrument
executed in the country of which both were citizens. We shall not pass upon this question, since we are clearly
of opinion that the instrument contains an explicit grant of a power broad enough to authorize the bringing of
the present action, even assuming the applicability of the domestic law as claimed by the defendants.

By this instrument Tornow constitutes Kammerzell his "true and lawful attorney with full power to enter the firm
name of Germann & Co. in the Commercial Registry of the city of Manila as a branch of the house of Germann
& Co. in Berlin, it being the purpose of this power to invest said attorney with full legal powers and authorization
to direct and administer in the city of Manila for us and in our name a branch of our general commercial
business of importation and exportation, for which purpose he may make contracts of lease and employ
suitable assistants, as well as sign every kind of documents, accounts, and obligations connected with the
business which may be necessary, take charge in general of the receipt and delivery of merchandise
connected with the business, sign all receipts for sums of money and collect them and exact their payment by
legal means, and in general execute all the acts and things necessary for the perfect carrying on of the
business committed to his charge in the same manner as we could do ourselves if we were present in the same
place."cralaw virtua1aw library

We should not be inclined to regard the institution of a suit like the present, which appears to be brought to
collect a claim accruing in the ordinary course of the plaintiff’s business, as properly belonging to the class of
acts described in article 1713 of the Civil Code as acts "of strict ownership." It seems rather to be something
which is necessarily a part of the mere administration of such a business as that described in the instrument in
question and only incidentally, if at all, involving a power to dispose of the title to property.
But whether regarded as an act of strict ownership or not, it appears to be expressly and specially authorized
by the clause conferring the power to "exact the payment" of sums of money "by legal means." This must mean
the power to exact the payment of debts due the concern by means of the institution of suits for their recovery.
If there could be any doubt as to the meaning of this language taken by itself, it would be removed by a
consideration of the general scope and purpose of the instrument in which it occurs. (See Civil Code, art. 1286.)
The main object of the instrument is clearly to make Kammerzell the manager of the Manila branch of the
plaintiff’s business, with the same general authority with reference to its conduct which his principal would
himself possess if he were personally directing it. It can not be reasonably supposed, in the absence of very
clear language to that effect, that it was the intention of the principal to withhold from his agent a power so
essential to the efficient management of the business entrusted to his control as that to sue for the collection of
debts.

Arellano, C.J., Torres, Cooper, Willard and Mapa, JJ., concur.

G.R. No. 140420 February 15, 2001


SERGIO AMONOY, petitioner,
vs.
Spouses JOSE GUTIERREZ and ANGELA FORNIDA, respondents.
PANGANIBAN, J.:
Damnum absque injuria. Under this principle, the legitimate exercise of a person's rights, even if it causes loss to
another, does not automatically result in an actionable injury. The law does not prescribe a remedy for the loss.
This principle does not, however, apply when there is an abuse of a person's right, or when the exercise of this
right is suspended or extinguished pursuant to a court order. Indeed, in the availment of one's rights, one must
act with justice, give their due, and observe honesty and good faith
The Case
Before us is a Petition for Review under Rule 45 of the Rules of Court, assailing the April 21, 1999 Decision 1 of the
Court of Appeals (CA) in CA-GR CV No. 41451, which set aside the judgment 2 of the Regional Trial Court (RTC)
of Tanay, Rizal. The RTC had earlier dismissed the Complaint for damages filed by herein respondents against
petitioner. The dispositive portion of the challenged CA Decision reads as follows:
"WHEREFORE, the appealed Decision is SET ASIDE, and in its stead judgment is rendered ordering the
defendant-appellee Sergio Amonoy to pay the plaintiffs-appellants bruno and Bernadina Gutierrez as
actual damages the sum of [t]wo [h]undred [f]ifty [t]housand [p]esos (P250,000.00)." 3
Likewise assailed is the October 19, 1999 CA Resolution,4 which denied the Motion for Reconsideration.
The Facts
The appellate court narrated the factual antecedents of this case as follows:
"This case had its roots in Special Proceedings No. 3103 of Branch I of the CFI of Pasig, Rizal, for the
settlement of the estate of the deceased Julio Cantolos, involving six(6) parcels of land situated in
Tanay Rizal. Amonoy was the counsel of therein Francisca Catolos, Agnes Catolos, Asuncion Pasamba
and Alfonso Formida. On 12 January 1965, the Project of Partition submitted was approved and xxx two
(2) of the said lots were adjudicated to Asuncion Pasamba and Alfonso Formilda. The Attorney's fees
charged by Amonoy was P27,600.00 and on 20 January 1965 Asuncion Pasamba and Alfonso Formida
executed a deed of real estate mortgage on the said two (2) lots adjudicated to them, in favor of
Amonoy to secure the payment of his attorney's fees. But it was only on 6 August 1969 after the taxes
had been paid, the claims settled and the properties adjudicated, that the estate was declared closed
and terminated.
"Asuncion Pasamba died on 24 February 1969 while Alfonso Fornilda passsed away on 2 July 1969.
Among the heirs of the latter was his daughter, plaintiff-appellant Angela Gutierrez.
"Because his Attorney's fess thus secured by the two lots were not paid, on 21 January 1970 Amonoy
filed for their foreclosure in Civil Code4 No. 12726 entitled Sergio Amonoy vs. Heirs of Asuncion Pasamba
and Heirs of Alfonso Fornilda before the CFI of Pasig, Rizal, and this was assigned to Branch VIII. The heirs
opposed, contending that the attorney's fees charged [were] unconscionable and that the attorney's
fees charged [were] unconscionable and that the agreed sum was only P11,695.92. But on 28
September 1972 judgment was rendered in favor of Amonoy requiring the heirs to pay within 90 days
the P27,600.00 secured by the mortgage, P11,880.00 as value of the harvests, and P9,645.00 as another
round of attorney's fees. Failing in that, the two (2) lots would be sold at public auction.
"They failed to pay. On 6 February 1973, the said lots were foreclosed and on 23 March 1973 the auction
sale was held where Amonoy was the highest bidder at P23,760.00. On 2 May 1973 his bid was judicially
confirmed. A deficiency was claimed and to satisfy it another execution sale was conducted, and
again the highest bidder was Amonoy at P12,137.50.
"Included in those sold was the lot on which the Gutierrez spouses had their house.
"More than a year after the Decision in Civil Code No. 12726 was rendered, the said decedent's heirs
filed on 19 December 1973 before the CFI of Pasig, Rixal[,] Civil case No. 18731 entitled Maria Penano,
et al vs. Sergio Amonoy, et al, a suit for the annulment thereof. The case was dismissed by the CFI on 7
November 1977, and this was affirmed by the Court of Appeals on 22 July 1981.
"Thereafter, the CFI on 25 July 1985 issued a Writ of Possession and pursuant to which a notice to vacate
was made on 26 August 1985. On Amonoy's motion of 24 April 1986, the Orders of 25 April 1986 and 6
May 1986 were issued for the demolition of structures in the said lots, including the house of the Gutierrez
spouses.
"On 27 September 1985 the petition entitled David Fornilda, et al vs Branch 164 RTC Ivth Pasig, Deputy
Sheriff Joaquin Antonil and Atty. Sergio Amonoy, G.R. No. L-72306, was filed before the Supreme Court.
Among the petitioners was the plaintiff-appellant Angela Gutierrez. On a twin musiyun (Mahigpit na
Musiyon Para Papanagutin Kaugnay ng Paglalapastangan) with full titles as fanciful and elongated as
their Petisyung (Petisyung Makapagsuri Taglay and Pagpigil ng Utos), a temporary restraining order was
granted on 2 June 1986 enjoining the demolition of the petitioners' houses.
"Then on 5 October 1988 a Decision was rendered in the said G.R. No. L-72306 disposing that:
"WHEREFORE, Certiorari is granted; the Order of respondent Trial Court, dated 25 July 1985,
granting a Writ of Possession, as well as its Orderd, dated 25 April 1986 and 16 May 1986,
directing and authorizing respondent Sheriff to demolish the houses of petitioners Angela and
Leocadia Fornilda are hereby ordered returned to petitioners unless some of them have been
conveyed to innocent third persons."5
But by the time the Supreme Court promulgated the abovementioned Decision, respondents' house had
already been destroyed, supposedly in accordance with a Writ of Demolition ordered by the lower court.
Thus, a Complaint for damages in connection with the destruction of their house was filed by respondents
against petitioner before the RTC on December 15, 1989.
In its January 27, 1993 Decision, the RTC dismissed respondents' suit. On appeal, the CA set aside the lower
court's ruling and ordered petitioner to pay respondents P250,000 as actual damages. Petitioner then filed a
Motion for Reconsideration, which was also denied.
The Issue
In his Memorandum,7 petitioner submits this lone issue for our consideration:
"Whether or not the Court of Appeals was correct was correct in deciding that the petition [was] liable
to the respondents for damages."8
The Court's Ruling
The Petition has no merit.
Main Issue:
Petitioner's Liability
Well-settled is the maxim that damage resulting from the legitimate exercise of a person's rights is a loss without
injury- damnum absque injuria - for which the law gives no remedy.9 In other words, one who merely exercises
one's rights does no actionable injury and cannot be held liable for damages.
Petitioner invokes this legal precept in arguing that he is not liable for the demolition of respondents' house. He
maintains that he was merely acting in accordance with the Writ of Demolition ordered by the RTC.
We reject this submission. Damnum absque injuria finds no application to this case.
True, petitioner commenced the demolition of respondents' house on May 30, 1986 under the authority of a Writ
of Demolition issued by the RTC. But the records show that a Temporary Restraining Order (TRO), enjoining the
demolition of respondents' house, was issued by the Supreme Court on June 2, 1986. The CA also found, based
on the Certificate of Service of the Supreme Court process server, that a copy of the TRO was served on
petitioner himself on June 4, 1986.
Petitioner, howeverm, did not heed the TRO of this Court. We agree with the CA that he unlawfully pursued the
demolition of respondents' house well until the middle of 1987. This is clear from Respondent Angela Gutierrez's
testimony. The appellate court quoted the following pertinent portion thereof: 10
"Q. On May 30, 1986, were they able to destroy your house?
"A. Not all, a certain portion only
xxx xxx xxx
"Q. Was your house completely demolished?
"A. No, sir.
xxx xxx xxx
"Q. Until when[,] Mrs. Witness?
"A. Until 1987.
"Q. About what month of 1987?
"A. Middle of the year.
"Q. Can you tell the Honorable Court who completed the demolition?
A. The men of Fiscal Amonoy."11
The foregoing disproves the claim of petitioner that the demolition, which allegedly commenced only on May
30, 1986, was completed the following day. It likewise belies his allegation that the demolitions had already
ceased when he received notice of the TRO.
Although the acts of petitioner may have been legally justified at the outsset, their continuation after the
issuance of the TRO amounted to an insidious abuse of his right. Indubitably, his actions were tainted with bad
faith. Had he not insisted on completing the demolition, respondents would not have suffered the loss that
engendered the suit before the RTC. Verily, his acts constituted not only an abuse of a right, but an invalid
exercise of a right that had been suspended when he received thae TRO from this Court on June 4, 1986. By
then he was no longer entitled to proceed with the demolition.
A commentator on this topic explains:
"The exercise of a right ends when the right disappears, and it disappears when it is abused, especially
to the prejudice of others. The mask of a right without the spirit of justcie which gives it life, is repugnant
to the modern concept of social law. It cannot be said that a person exercises a right when he
unnecessarily prejudices another xxx. Over and above the specific precepts of postive law are the
supreme norms of justice xxx; and he who violates them violates the law. For this reason it is not
permissible to abuse our rights to prejudice others." 12
Likewise, in Albenson Enterprises Corp. v. CA,13 the Court discussed the concept of abuse of rights as follows:
"Artilce 19, known to contain what is commonly referred to as the principle of abuse of rights, sets
certain standards which may be observed not only in the exercise of one's rights but also in the
performance of one's duties.These standards are the following: to act with justice; to give everyone his
due; recognizes the primordial limitation on all rights: that in their exercise, the norms of human conduct
set forth in Article 19 and results in damage to another, a legal wrong is thereby committed for which
the wrongdoer must be held responsible xxx."
Clearly then, the demolition of respondents' house by petitioner, despite his receipt of the TRO, was not only an
abuse but also an unlawful exercise of such right. In insisting on his alleged right, he wantonly violated this
Court's Order and wittingly caused the destruction of respondents; house.1âwphi1.nêt
Obviously, petitioner cannot invoke damnum absque injuria, a principle premised on the valid exercise of a
right.14Anything less or beyond such exercise will not give rise to the legal protection that the principle accords.
And when damage or prejudice to another is occasioned thereby, liability cannot be obscured, much less
abated.
In the ultimate analysis, petitioner's liability is premised on the obligation to repair or to make whole the
damage caused to another by reason of one's act or omission, whether done intentionally or negligently and
whether or not punishable by law.15
WHEREFORE, the Petition is DENIED and the appealed Decision AFFIRMED. Costs against petitioner.
SO ORDERED.
Melo, Vitug, Gonzaga-Reyes, Sandoval-Gutierrez, JJ: concur.

Footnotes:
1 Rollo, pp. 34-44. The CA Decision was penned by Justice Roberto A. Barrios, with the concurrence of

Justices Godardo A. Jacinto (Division chairman) and Renato C. Dacudao.


2 Rollo, pp. 83-87; written by Judge Gil P. Fernandez.
3 Rollo, p. 41
4 Rollo, pp. 43-44.
5 Rollo, pp. 35-37.
6 The case was deemed submitted for resolution on July 21, 2000, upon receipt by this Court of

Respondents' Memorandum signed by Attys. Romeo B. Igot and Liberato F. Mojica. Filed earlier was
petitioner's Memorandum, signed by Atty. Gelacio C. Mamaril and Roberto B. Arca.
7 Rollo, pp. 180-210
8 Ibid., p. 192. Upper case used in the original.
9 Custodio v. Court of Appeals, 253 SCRA 483, February 9, 1996; China Banking Corporation v. Court of

Appeals, 231 SCRA 472, March 28, 1994; Sba v. Court of Appeals, 189 SCRA 50, Auguts 24, 1990; ilocos
Norte Electric Company v. Court of Appeals, 179 SCRA 5, November 6, 1989; Auyong Hian v. CTA,
59 SCRA 110, September 12, 1974.
10 CA Decision, pp. 6-7; rollo, pp. 39-40.
11 TSN, February 12, 1991, pp. 14-15
12 Alicia Gonzales-Decano, Notes on Torts and Damages, p. 97.
13 217 SCRA 16, 24-25, January 11, 1993, per Bidin, J.
14 Globe Mackay Cable and Radio Corp. v. Cout of Appeals, 176 SCRA 778, August 25, 1989.
15 Occena v. Icamina, 181 SCRA 328, January 22, 1990

UNIVERSITY OF THE EAST vs. JADER


GR No. 132344
February 17, 2000
FACTS:
Respondent Romeo Jader was enrolled in the University of the East (UE) College of Law from 1984 to
1988. In the first semester of SY 1987-1988, he failed to take the regular final examination in Practice Court 1 for
which he was given an incomplete grade. He enrolled the following semester, and filed an application for the
removal of the incomplete grade on February 1, 1988, given by Prof. Ortega which was approved by Dean
Tiongzon. Thereafter, he took the removal examination on March 28, 1988. On May 30, 1988, Prof. Ortega
submitted his grade of five (5).
Respondent’s name appeared in the Tentative List of Candidates for Graduation, with the annotation
that he had an incomplete grade in PC1. His name appeared in the invitation for the Investiture and
Commencement Exercises on April 16, 1988, with footnote that the list was tentative. Naturally, the respondent
jubilantly attended the graduation and threw a party thereafter.
He took a leave from work for five (5) months to attend a review class in preparation for the Bar
examination. Upon learning of his deficiency, he dropped the review class and was not able to take the Bar
examination.
Respondent then filed with the RTC for damages against petitioner. The petitioner denied liability
arguing that it never led respondent to believe that he completed the requirements for an LlB degree when his
name was included in the tentative list of graduating students. The RTC ruled in respondent’s favor. Upon
appeal, the CA affirmed RTC’s decision.
ISSUE:
Whether or not an educational institution may be held liable for damages for misleading a student
into believing that the latter had satisfied all the requirements for graduation when such is not the case.
HELD:
The petition lacks merit.
When a student is enrolled in any educational or learning institution, a contract of education is
entered into between said institution and the student. The professors, teachers or instructors hired by the school
are considered merely as agents and administrators tasked to perform the school’s commitment under the
contract.
Petitioner, in belatedly informing the respondent of the result of the removal examination, particularly
at a time when he had already commenced preparing for the Bar exams, cannot be said to have acted in
good faith. Absence of good faith must be sufficiently established for a successful prosecution by the
aggrieved party in a suit for abuse of right under Article 19 of the Civil Code. Good faith connotes and honest
intention to abstain from taking undue advantage of another, even though the forms and technicalities of the
law, together with the absence of all information or belief of facts, would render the transaction
unconscientious.
It is the school that has access to the information and it is only the school that can compel its
professors to act and comply with its rules, regulations and policies with respect to the computation and
prompt submission of grades. Students do not exercise control, much less influence, over the way an
educational institution should run its affairs, particularly in discliplining its professors and teachers and ensuring
their compliance with the school’s rules and orders.
NIKKO HOTEL MANILA GARDEN vs REYES Case Digest
NIKKO HOTEL MANILA GARDEN AND RUBY LIM VS. ROBERTO REYES a.k.a. “AMAY BISAYA”
2005 Feb 28
G.R. No. 154259

FACTS: In the evening of October 13, 1994, while drinking coffee at the lobby of Hotel Nikko, respondent was
invited by a friend, Dr. Filart to join her in a party in celebration of the birthday of the hotel’s manager. During
the party and when respondent was lined-up at the buffet table, he was stopped by Ruby Lim, the Executive
Secretary of the hotel, and asked to leave the party. Shocked and embarrassed, he tried to explain that he
was invited by Dr. Filart, who was herself a guest. Not long after, a Makati policeman approached him and
escorted him out of her party.

Ms. Lim admitted having asked respondent to leave the party but not under the ignominious circumstances
painted by Mr. Reyes, that she did the act politely and discreetly. Mindful of the wish of the celebrant to keep
the party intimate and exclusive, she spoke to the respondent herself when she saw him by the buffet table
with no other guests in the immediate vicinity. She asked him to leave the party after he finished eating. After
she had turned to leave, the latter screamed and made a big scene.

Dr. Filart testified that she did not want the celebrant to think that she invited Mr. Reyes to the party.

Respondent filed an action for actual, moral and/or exemplary damages and attorney’s fees. The lower court
dismissed the complaint. On appeal, the Court of Appeals reversed the ruling of the trial court, consequently
imposing upon Hotel Nikko moral and exemplary damages and attorney’s fees. On motion for reconsideration,
the Court of Appeals affirmed its decision. Thus, this instant petition for review.

ISSUES: Whether or not Ms. Ruby Lim is liable under Articles 19 and 21 of the Civil Code in asking Mr. Reyes to
leave the party as he was not invited by the celebrant thereof and whether or not Hotel Nikko, as the employer
of Ms. Lim, be solidarily liable with her.

RULING: The Court found more credible the lower court’s findings of facts. There was no proof of motive on the
part of Ms. Lim to humiliate Mr. Reyes and to expose him to ridicule and shame. Mr. Reyes’ version of the story
was unsupported, failing to present any witness to back his story. Ms. Lim, not having abused her right to ask Mr.
Reyes to leave the party to which he was not invited, cannot be made liable for damages under Articles 19
and 21 of the Civil Code. Necessarily, neither can her employer, Hotel Nikko, be held liable as its liability springs
from that of its employees.

When a right is exercised in a manner which does not conform with the norms enshrined in Article 19 and results
in damage to another, a legal wrong is thereby committed for which the wrongdoer must be responsible.
Article 21 states that any person who willfully causes loss or injury to another in a manner that is contrary to
morals, good customs or public policy shall compensate the latter for the damage.

Without proof of any ill-motive on her part, Ms. Lim’s act cannot amount to abusive conduct.

The maxim “Volenti Non Fit Injuria” (self-inflicted injury) was upheld by the Court, that is, to which a person
assents is not esteemed in law as injury, that consent to injury precludes the recovery of damages by one who
has knowingly and voluntarily exposed himself to danger.
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Capitle, et al. v. Vda. De Gaban, et al.,


G.R. No. 146890, June 8, 2004
Fabian Correjado inherited from his father two parcel of land subject of the case at bar. Fabian died intestate
in 1919. He was survived by four children, namely: Julian, Zacarias, Francisco and Manuel, all surnamed
Correjado.
After Fabians death in 1919, his son Julian occupied and cultivated the two subject parcels of land until his
death in 1950. He was survived by three children (Respondent). Julians brother Francisco died in 1960. He was
survived by five children. And his other brother Zacarias died in 1984. He was survived by seven children.
The petitioners were the descendant of Zacarias and Francisc they are filed a complaint on November 26,
1986 for partition of the property and damages against to respondent Julians Children, alleging that Fabian
married twice. First with the mother of Julian, and subsequent one with the mother of Francisco, Zacarias and
Manuel; that respondent refused to give a partition of property.
The respondent counter the complaint, they say that the mother of Francisco, Zacarias and Manuel was only a
mistress. And the son of Fabian Francisco, Zacarias and Manuel was an illegitimate son that was not entitles to
inherit under the old civil code.
The RTC of branch 63 of the La Carlota City Dismissed the complaint upon of unreasonable delay of making
claim and also lack of basis.
CA dismissed the appeal and affirmed the decision of the trial court. The appellate court found that
respondents failed to discharge the onus of proving that Francisco and Zacarias were illegitimate. But it too
found that petitioners also failed to prove that Zacarias and Francisco were legitimate. And the action of the
petitioners has prescribed.

Topic: DEFENSES: ASSUMPTION OF RISK Digested by: Aubrey Case #7 G.R. No. 154259 February 28, 2005 NIKKO
HOTEL MANILA GARDEN and RUBY LIM, petitioners, vs. ROBERTO REYES, a.k.a. "AMAY BISAYA," respondent.

Facts: The cause of action before the trial court was one for damages brought under the human relations
provisions of the New Civil Code. Respondent Reyes’ Version: Mrs. Filart invited and assured that she can
vouched for him in the birthday party of the hotel’s manager, Mr. Masakazu at the penthouse. When the buffet
dinner was ready, Reyes lined up but, to his great shock, shame and embarrassment, he was stopped by Lim
(Exec. Sec. of Nikko Hotel), and in a loud voice w/in the presence and hearing of the other guests, told him to
leave the party. Reyes tried to explain that he was invited by Dr. Filart, but the latter completely ignored him
adding to his shame and humiliation. Not long after, policemen approached him and asked him to step out of
the hotel. He now claims P1M for actual damagaes, P1M moral and/or exemplary damages and P200k for
atty’s fees. Lim’s version: At the party she noticed Reyes at the bar counter ordering a drink. Mindful of Mr.
Tsuruoka’s wishes to keep the party intimate, she approached the captain waiter to inquire as to the presence
of Reyes who was uninvited. The waiter said that he saw Reyes came in w/ the group of Dr. Filart. Lim inquired
Dr Filart’s sister about Reyes and the sister said the latter was not invited by Dr. Filart. Lim requested the sister to
tell Reyes to leave but the latter just lingered. The same happened when one Capt. Batung asked Reyes to
leave. When Lim spotted Reyes by the buffet table, she decided to speak to him herself as there were no guest
in the immediate vicinity. However, as Reyes was already helping himself to the food, she decided to wait.
When Reyes went to a corner and started to eat, Lim approached him and said: "alam ninyo, hindo ho kayo
dapat nandito. Pero total nakakuha na ho kayo ng pagkain, ubusin na lang ninyo at pagkatapos kung pwede
lang po umalis na kayo." She then turned around trusting that Reyes would show enough decency to leave,
but to her surprise, he began screaming and making a big scene, and even threatened to dump food on her.
Dr. Filart’s version: According to her, it was Reyes who volunteered to carry the basket of fruits intended for the
celebrant as he was likewise going to take the elevator, not to the penthouse but to Altitude 49. When they
reached the penthouse, she reminded Reyes to go down as he was not properly dressed and was not invited.
All the while, she thought that Reyes already left the place. Then there was a commotion and she saw Reyes
shouting. She ignored Reyes. She was embarrassed and did not want the celebrant to think that she invited
him. RTC Ruling: After trial on the merits, the court a quo dismissed the complaint, giving more credence to the
testimony of Ms. Lim that she was discreet in asking Mr. Reyes to leave the party. The trial court likewise
ratiocinated that Mr. Reyes assumed the risk of being thrown out of the party as he was uninvited. CA Ruling:
On appeal, CA reversed the ruling of the trial court as it found more commanding of belief the testimony of
Reyes that Lim ordered him to leave in a loud voice within hearing distance of several guests. It likewise ruled
that the actuation of Lim in approaching several people to inquire into the presence of Reyes exposed the
latter to ridicule and was uncalled for as she should have approached Dr. Filart first and both of them should
have talked to Reyes in private. Consequently, CA imposed upon Hotel Nikko, Lim and Dr. Filart the solidary
obligation to pay Reyes (1) exemplary damages in the amount of Two Hundred Thousand Pesos (P200,000); (2)
moral damages in the amount of Two Hundred Thousand Pesos (P200,000); and (3) attorney’s fees in the
amount of Ten Thousand Pesos (P10,000). On motion for reconsideration, the Court of Appeals affirmed its
earlier decision as the argument raised in the motion had "been amply discussed and passed upon in the
decision sought to be reconsidered. Hotel Nikko and Ruby Lim contend that the Court of Appeals seriously
erred in not applying the Doctrine of Volenti Non Fit Injuria considering that by its own findings, Reyes was a
great crasher. Issue and Ruling: 1) Won the Doctrine of Volenti Non Fit Injuria is applicable in the case at bar.
Petitioners Lim and Hotel Nikko contend that pursuant to the doctrine of volenti non fit injuria, they cannot be
made liable for damages as respondent Reyes assumed the risk of being asked to leave (and being
embarrassed and humiliated in the process) as he was a "gate-crasher."

The doctrine of volenti non fit injuria ("to which a person assents is not esteemed in law as injury" ) refers to self-
inflicted injury or to the consent to injury which precludes the recovery of damages by one who has knowingly
and voluntarily exposed himself to danger, even if he is not negligent in doing so. As formulated by petitioners,
however, this doctrine does not find application to the case at bar because even if respondent Reyes assumed
the risk of being asked to leave the party, petitioners, under Articles 19 and 21 of the New Civil Code, were still
under obligation to treat him fairly in order not to expose him to unnecessary ridicule and shame. 2) Won Lim
acted abusively in asking Reyes, a.k.a. "Amay Bisaya," to leave the party where he was not invited by the
celebrant thereof thereby becoming liable under Articles 19 and 21 of the Civil Code. No. In the absence of
any proof of motive on the part of Ms. Lim to humiliate Mr. Reyes and expose him to ridicule and shame, it is
highly unlikely that she would shout at him from a very close distance. Ms. Lim having been in the hotel business
for twenty years wherein being polite and discreet are virtues to be emulated, the testimony of Mr. Reyes that
she acted to the contrary does not inspire belief and is indeed incredible. Thus, the lower court was correct in
observing that – Considering the closeness of defendant Lim to plaintiff when the request for the latter to leave
the party was made such that they nearly kissed each other, the request was meant to be heard by him only
and there could have been no intention on her part to cause embarrassment to him. It was plaintiff’s reaction
to the request that must have made the other guests aware of what transpired between them. Had plaintiff
simply left the party as requested, there was no need for the police to take him out. Moreover, another
problem with Reyes’s version of the story is that it is unsupported. It is a basic rule in civil cases that he who
alleges proves. Reyes, however, had not presented any witness to back his story up. All his witnesses – Danny
Rodinas, Pepito Guerrero and Alexander Silva - proved only that it was Dr. Filart who invited him to the party.
Lim, not having abused her right to ask Mr. Reyes to leave the party to which he was not invited, cannot be
made liable to pay for damages under Articles 19 and 21 of the Civil Code. Necessarily, neither can her
employer, Hotel Nikko, be held liable as its liability springs from that of its employee. Article 19, known to contain
what is commonly referred to as the principle of abuse of rights, is not a panacea for all human hurts and social
grievances. Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with
justice, give everyone his due, and observe honesty and good faith. The object of this article, therefore, is to set
certain standards which must be observed not only in the exercise of one’s rights but also in the performance of
one’s duties. These standards are the following: act with justice, give everyone his due and observe honesty
and good faith. Its antithesis, necessarily, is any act evincing bad faith or intent to injure. Its elements are the
following: (1) There is a legal right or duty; (2) which is exercised in bad faith; (3) for the sole intent of prejudicing
or injuring another. When Article 19 is violated, an action for damages is proper under Articles 20 or 21 of the
Civil Code. Article 20 pertains to damages arising from a violation of law which does not obtain herein as Lim
was perfectly within her right to ask Mr. Reyes to leave. Parenthetically, the manner by which Lim asked Reyes
to leave was likewise acceptable and humane under the circumstances. In this regard, we cannot put our
imprimatur on the appellate court’s declaration that Lim’s act of personally approaching Mr. Reyes (without
first verifying from Filart if indeed she invited. Reyes) gave rise to a cause of action "predicated upon mere
rudeness or lack of consideration of one person, which calls not only protection of human dignity but respect of
such dignity." Without proof of any ill-motive on her part, Lim’s act of by-passing Filart cannot amount to
abusive conduct especially because she did inquire from Mrs. Filart’s companion who told her that Filart did not
invite Reyes. If at all, Lim is guilty only of bad judgment which, if done with good intentions, cannot amount to
bad faith. Not being liable for both actual and moral damages, neither can petitioners Lim and Hotel Nikko be
made answerable for exemplary damages especially for the reason stated by the CA.

G.R. No. L-3766 October 18, 1907


THE UNITED STATES, plaintiff-appellee,
vs.
PONCIANO LIMCANGCO, defendant-appellant.
Palma and Corpus, for appellant.
Ledesma, Sumulong and Fernandez, for private prosecutor.

ARELLANO, C.J.:
The following facts have been proven: (1) That the accused Ponciano Limcangco, had a considerable time
courted Urbana del Rosario, a young woman under 20 years of age; (2) that he had carnal intercourse with
her; (3) that he had promised to marry her; (4) that about the month of September, 1906, she had been
pregnant for some five months.
The entire defense consisted in that the promise of marriage was subsequent, and not prior to the carnal
knowledge, and that therefore there was no deceit employed in the seduction of the girl.
One of the conclusions of the judgment appealed from is that —
According to the letters offered in evidence, both from those written by the accused to Urbana del
Rosario, and from such as the latter wrote to the accused, there can be no doubt whatever that the
promise of marriage was made before any carnal communication between them had taken place.
Another conclusion is that —
From the time when the accused became aware that Urbana del Rosario was pregnant he
abandoned her and refused to fulfill his promise to marry her.
The lower court sentenced Ponciano Limcangco to four months of arresto mayor and to pay the costs,
reserving "the plaintiff's right to recover for damages suffered by reason of the nonfulfillment of the
promise of marriage, and for subsistence.
Both parties, the plaintiff and the defendant, appealed from the above judgment.
This court, upon appeal, does not find any proof of the alleged error in the judgment based upon the fact that
the court considered that, in the commission of the crime, deceit had been employed; rather, on the contrary,
the opinion of the trial court appears to have been correctly founded upon the statements made in the letters
of the accused and of the injured party as well as from the testimony of the accused himself.
The defendant testified that his intimacy with Urbana del Rosario began in February, 1905, and that in July or
August he had carnal communication with her. Although the latter be the true date, and not that of January,
1906, as stated by the young girl, Del Rosario, it appears to be proven, not that the promise of marriage was
made after the seduction, as the accused claims, but previous thereto according to the result of the following
question put to Urbana del Rosario by her attorney:
Q. Is it not true that the first promise of marriage that he made you was towards the end of February or
the beginning of March 1905? — A. No, sir; it was made since January and February.
And as to the deceit, the accused has made it evident by his declaration:
Q. Did you not tell her that you loved her before you had any carnal communication with her? — A.
Yes, sir.
Q. Did you expect her to believe that you loved her, and that you courted her with the idea of marrying
her? — A. Yes, sir.
The decision in cassation of October 2, 1888, is as follows:
A promise of marriage, in order to constitute that deceit which leads to the consummation of the crime
of seduction, requires no solemnity whatever nor any other formality except that of making it in such
manner that it may reasonably be believed by the injured party, considering the antecedents of the
case, the persistence and repetition of the offer, and other similar circumstances which give to the offer
the appearance of sincerity.lawphil.net
The decision in cassation of April 26, 1886, is as follows:
In view of the personal circumstances of both the accused and injured party, their uninterrupted love
affair prior to the carnal communication, the progress of the affection they professed for each other, as
inferred from the insinuating phrases and suggestions revealed in the letters written by the former to the
latter for the purpose of obtaining her favor, as well as the fact that the intercourse was preceded by
her belief in his assurance of a more or less proximate marriage, it can not be doubted that all of the
said facts taken together constitute the deceit which led to the seduction.
Although the appeal of the plaintiff can not be the subject of consideration by this court, yet as the accused
has appealed, it is the duty of this court to see that the final judgment is in accordance with the law. For this
purpose the provisions of article 449 of the Penal Code should be applied.
Therefore, the judgment appealed from should be affirmed, although only three months of arresto mayor with
the accessories thereof are imposed on the defendant; and we further sentence Ponciano Limcangco to
indemnify Urbana del Rosario in the sum of P500, to recognize the offspring, and to pay the costs of both
instances. So ordered.
Torres, Johnson, Willard and Tracey, JJ., concur.
CONRADO BUNAG, JR., petitioner,
vs.
HON. COURT OF APPEALS, First Division, and ZENAIDA B. CIRILO, respondents.
Facts:
Plaintiff and defendant Bunag, Jr. were sweethearts, he invited her to take their merienda at the Aristocrat
Restaurant in Manila, to which plaintiff obliged. But instead to Aristocrat he brought plaintiff to a motel or hotel
where he raped her. Later that evening, defendant brought plaintiff to the house of his grandmother Juana de
Leon in Pamplona, Las Piñas, Metro Manila, where they lived together as husband and wife for 21 days.
Defendant-appellant Bunag, Jr. and plaintiff-appellant filed their respective applications for a marriage license
with the Office of the Local Civil Registrar of Bacoor, Cavite. October 1, 1973 Defendant-appellant Bunag, Jr.
filed an affidavit withdrawing his application for a marriage license.
Defendant Bunag, Jr. left and never returned, humiliating plaintiff and compelled her to go back to her
parents. Plaintiff was ashamed when she went home and could not sleep and eat because of the deception
done against her by defendants-appellants. Petitioner filed a complaint for damages for alleged breach of
promise to marry.
The trial court ruled in favor of the plaintiff and against petitioner, but absolved his father.
Issue:
Whether or not the failure to comply with the promise of marriage of the defendant considered contrary to
morals, good custom or public policy.
Held:
It is true that in this jurisdiction, we adhere to the time-honored rule that an action for breach of promise to
marry has no standing in the civil law, apart from the right to recover money or property advanced by the
plaintiff upon the faith of such promise. Generally, therefore, a breach of promise to marry per se is not
actionable, except where the plaintiff has actually incurred expenses for the wedding and the necessary
incidents thereof.
G.R. No. 101749 July 10, 1992
CONRADO BUNAG, JR., petitioner,
vs.
HON. COURT OF APPEALS, First Division, and ZENAIDA B. CIRILO, respondents.

REGALADO, J.:
Petitioner appeals for the reversal of the decision 1 of respondent Court of Appeals promulgated on May 17,
1991 in CA-G.R. CV No. 07054, entitled "Zenaida B. Cirilo vs. Conrado Bunag, Sr. and Conrado Bunag, Jr.," which
affirmed in toto the decision of the Regional Trial Court, Branch XI at Bacoor, Cavite, and, implicitly, respondent
court's resolution of September 3, 1991 2 denying petitioner's motion for reconsideration.
Respondent court having assiduously discussed the salient antecedents of this case, vis-a-vis the factual
findings of the court below, the evidence of record and the contentions of the parties, it is appropriate that its
findings, which we approve and adopt, be extensively reproduced hereunder:
Based on the evidence on record, the following facts are considered indisputable: On the
afternoon of September 8, 1973, defendant-appellant Bunag, Jr. brought plaintiff-appellant to a
motel or hotel where they had sexual intercourse. Later that evening, said defendant-appellant
brought plaintiff-appellant to the house of his grandmother Juana de Leon in Pamplona, Las
Piñas, Metro Manila, where they lived together as husband and wife for 21 days, or until
September 29, 1973. On September 10, 1973, defendant-appellant Bunag, Jr. and plaintiff-
appellant filed their respective applications for a marriage license with the Office of the Local
Civil Registrar of Bacoor, Cavite. On October 1, 1973, after leaving plaintiff-appellant,
defendant-appellant Bunag, Jr. filed an affidavit withdrawing his application for a marriage
license.
Plaintiff-appellant contends that on the afternoon of September 8, 1973, defendant-appellant
Bunag, Jr., together with an unidentified male companion, abducted her in the vicinity of the
San Juan de Dios Hospital in Pasay City and brought her to a motel where she was raped. The
court a quo, which adopted her evidence, summarized the same which we paraphrased as
follows:
Plaintiff was 26 years old on November 5, 1974 when she testified, single and had
finished a college course in Commerce (t.s.n., p. 4, Nov. 5, 1974). It appears that
on September 8, 1973, at about 4:00 o'clock in the afternoon, while she was
walking along Figueras Street, Pasay City on her way to the San Juan de Dios
Canteen to take her snack, defendant, Conrado Bunag, Jr., came riding in a car
driven by a male companion. Plaintiff and defendant Bunag, Jr. were
sweethearts, but two weeks before September 8, 1973, they had a quarrel, and
Bunag, Jr. wanted to talk matters over with plaintiff, so that he invited her to take
their merienda at the Aristocrat Restaurant in Manila instead of at the San Juan
de Dios Canteen, to which plaintiff obliged, as she believed in his sincerity (t.s.n.,
pp. 8-10, Nov. 5, 1974).
Plaintiff rode in the car and took the front seat beside the driver while Bunag, Jr.
seated himself by her right side. The car travelled north on its way to the Aristocrat
Restaurant but upon reaching San Juan Street in Pasay City, it turned abruptly to
the right, to which plaintiff protested, but which the duo ignored and instead
threatened her not to make any noise as they were ready to die and would
bump the car against the post if she persisted. Frightened and silenced, the car
travelled its course thru F.B. Harrison Boulevard until they reached a motel. Plaintiff
was then pulled and dragged from the car against her will, and amidst her cries
and pleas. In spite of her struggle she was no match to the joint strength of the
two male combatants because of her natural weakness being a woman and her
small stature. Eventually, she was brought inside the hotel where the defendant
Bunag, Jr. deflowered her against her will and consent. She could not fight back
and repel the attack because after Bunag, Jr. had forced her to lie down and
embraced her, his companion held her two feet, removed her panty, after which
he left. Bunag, Jr. threatened her that he would ask his companion to come back
and hold her feet if she did not surrender her womanhood to him, thus he
succeeded in feasting on her virginity. Plaintiff described the pains she felt and
how blood came out of her private parts after her vagina was penetrated by the
penis of the defendant Bunag, Jr. (t.s.n. pp. 17-24, Nov. 5, 1974).
After that outrage on her virginity, plaintiff asked Bunag, Jr. once more to allow
her to go home but the latter would not consent and stated that he would only
let her go after they were married as he intended to marry her, so much so that
she promised not to make any scandal and to marry him. Thereafter, they took a
taxi together after the car that they used had already gone, and proceeded to
the house of Juana de Leon, Bunag, Jr.'s grandmother in Pamplona, Las Piñas,
Metro Manila where they arrived at 9:30 o'clock in the evening (t.s.n., p. 26, Nov.
5, 1974). At about ten (10) o'clock that same evening, defendant Conrado
Bunag, Sr., father of Bunag, Jr. arrived and assured plaintiff that the following day
which was a Monday, she and Bunag, Jr. would go to Bacoor, to apply for a
marriage license, which they did. They filed their applications for marriage license
(Exhibits "A" and "C") and after that plaintiff and defendant Bunag, Jr. returned to
the house of Juana de Leon and lived there as husband and wife from
September 8, 1973 to September 29, 1973.
On September 29, 1973 defendant Bunag, Jr. left and never returned, humiliating
plaintiff and compelled her to go back to her parents on October 3, 1973. Plaintiff
was ashamed when she went home and could not sleep and eat because of the
deception done against her by defendants-appellants (t.s.n., p. 35, Nov. 5, 1974).
The testimony of plaintiff was corroborated in toto by her uncle, Vivencio
Bansagan who declared that on September 8, 1973 when plaintiff failed to arrive
home at 9:00 o'clock in the evening, his sister who is the mother of plaintiff asked
him to look for her but his efforts proved futile, and he told his sister that plaintiff
might have married (baka nag-asawa, t.s.n., pp. 5-6, March 18, 1976). However,
in the afternoon of the next day (Sunday), his sister told him that Francisco
Cabrera, accompanied by barrio captain Jacinto Manalili of Ligas, Bacoor,
Cavite, informed her that plaintiff and Bunag, Jr. were in Cabrera's house, so that
her sister requested him to go and see the plaintiff, which he did, and at the
house of Mrs. Juana de Leon in Pamplona, Las Piñas, Metro Manila he met
defendant Conrado Bunag, Sr., who told him, "Pare, the children are here
already. Let us settle the matter and have them married."
He conferred with plaintiff who told him that as she had already lost her honor, she would bear
her sufferings as Boy Bunag, Jr. and his father promised they would be married.
Defendants-appellants, on the other hand, deny that defendant-appellant Conrado Bunag, Jr.
abducted and raped plaintiff-appellant on September 8, 1973. On the contrary, plaintiff-
appellant and defendant-appellant Bunag, Jr. eloped on that date because of the opposition
of the latter's father to their relationship.
Defendant-appellants claim that defendant-appellant Bunag, Jr. and plaintiff-appellant had
earlier made plans to elope and get married, and this fact was known to their friends, among
them, Architect Chito Rodriguez. The couple made good their plans to elope on the afternoon
of September 8, 1973, when defendant-appellant Bunag, Jr., accompanied by his friend
Guillermo Ramos, Jr., met plaintiff-appellant and her officemate named Lydia in the vicinity of
the San Juan de Dios Hospital. The foursome then proceeded to (the) aforesaid hospital's
canteen where they had some snacks. Later, Guillermo Ramos, Jr. took Lydia to Quirino Avenue
where she could get a ride home, thereby leaving the defendant-appellant Bunag, Jr. and
plaintiff-appellant alone. According to defendant-appellant Bunag, Jr., after Guillermo Ramos,
Jr. and Lydia left, he and plaintiff-appellant took a taxi to the Golden Gate and Flamingo Hotels
where they tried to get a room, but these were full. They finally got a room at the Holiday Hotel,
where defendant-appellant registered using his real name and residence certificate number.
Three hours later, the couple check out of the hotel and proceeded to the house of Juana de
Leon at Pamplona, Las Piñas, where they stayed until September 19, 1873. Defendant-appellant
claims that bitter disagreements with the plaintiff-appellant over money and the threats made
to his life prompted him to break off their plan to get married.
During this period, defendant-appellant Bunag, Sr. denied having gone to the house of Juan de
Leon and telling plaintiff-appellant that she would be wed to defendant-appellant Bunag, Jr. In
fact, he phoned Atty. Conrado Adreneda, member of the board of directors of Mandala
Corporation, defendant-appellant Bunag, Jr.'s employer, three times between the evening of
September 8, 1973 and September 9, 1973 inquiring as to the whereabouts of his son. He came
to know about his son's whereabouts when he was told of the couple's elopement late in the
afternoon of September 9, 1973 by his mother Candida Gawaran. He likewise denied having
met relatives and emissaries of plaintiff-appellant and agreeing to her marriage to his son. 3
A complaint for damages for alleged breach of promise to marry was filed by herein private respondent
Zenaida B. Cirilo against petitioner Conrado Bunag, Jr. and his father, Conrado Bunag, Sr., as Civil Case No. N-
2028 of the Regional Trial Court, Branch XIX at Bacoor, Cavite. On August 20, 1983, on a finding, inter alia, that
petitioner had forcibly abducted and raped private respondent, the trial court rendered a decision 4ordering
petitioner Bunag, Jr. to pay private respondent P80,000.00 as moral damages, P20,000.00 as exemplary
damages, P20,000.00 by way of temperate damages, and P10,000.00 for and as attorney's fees, as well as the
costs of suit. Defendant Conrado Bunag, Sr. was absolved from any and all liability.
Private respondent appealed that portion of the lower court's decision disculpating Conrado Bunag, Sr. from
civil liability in this case. On the other hand, the Bunags, as defendants-appellants, assigned in their appeal
several errors allegedly committed by trial court, which were summarized by respondent court as follows: (1) in
finding that defendant-appellant Conrado Bunag, Jr. forcibly abducted and raped plaintiff-appellant; (2) in
finding that defendants-appellants promised plaintiff-appellant that she would be wed to defendant-appellant
Conrado Bunag, Jr.; and (3) in awarding plaintiff-appellant damages for the breach of defendants-appellants'
promise of marriage. 5
As stated at the outset, on May 17, 1991 respondent Court of Appeals rendered judgment dismissing both
appeals and affirming in toto the decision of the trial court. His motion for reconsideration having been denied,
petitioner Bunag, Jr. is before us on a petition for review, contending that (1) respondent court failed to
consider vital exhibits, testimonies and incidents for petitioner's defense, resulting in the misapprehensions of
facts and violative of the law on preparation of judgment; and (2) it erred in the application of the proper law
and jurisprudence by holding that there was forcible abduction with rape, not just a simple elopement and an
agreement to marry, and in the award of excessive damages. 6
Petitioner Bunag, Jr. first contends that both the trial and appellate courts failed to take into consideration the
alleged fact that he and private respondent had agreed to marry, and that there was no case of forcible
abduction with rape, but one of simple elopement and agreement to marry. It is averred that the agreement
to marry has been sufficiently proven by the testimonies of the witnesses for both parties and the exhibits
presented in court.
This submission, therefore, clearly hinges on the credibility of the witnesses and evidence presented by the
parties and the weight accorded thereto in the factual findings of the trial court and the Court of Appeals. In
effect, what petitioner would want this Court to do is to evaluate and analyze anew the evidence, both
testimonial and documentary, presented before and calibrated by the trial court, and as further meticulously
reviewed and discussed by respondent court.
The issue raised primarily and ineluctably involves questions of fact. We are, therefore, once again constrained
to stress the well-entrenched statutory and jurisprudential mandate that findings of fact of the Court of Appeals
are, as a rule, conclusive upon this Court. Only questions of law, distinctly set forth, may be raised in a petition
for review on certiorari under Rule 45 of the Rules of Court, subject to clearly settled exceptions in case law.
Our jurisdiction in cases brought to us from the Court of Appeals is limited to reviewing and revising the errors of
law imputed to the latter, its findings of fact being conclusive. This Court has emphatically declared that it is not
its function to analyze or weigh such evidence all over again, its jurisdiction being limited to reviewing errors of
law that might have been committed by the lower court. Barring, therefore, a showing that the findings
complained of are totally devoid of support in the record, or that they are so glaringly erroneous as to
constitute serious abuse of discretion, such findings must stand, for this Court is not expected or required to
examine or contrast the oral and documentary evidence submitted by the parties. 7 Neither does the instant
case reveal any feature falling within, any of the exceptions which under our decisional rules may warrant a
review of the factual findings of the Court of Appeals. On the foregoing considerations and our review of the
records, we sustain the holding of respondent court in favor of private respondent.
Petitioner likewise asserts that since action involves a breach of promise to marry, the trial court erred in
awarding damages.
It is true that in this jurisdiction, we adhere to the time-honored rule that an action for breach of promise to
marry has no standing in the civil law, apart from the right to recover money or property advanced by the
plaintiff upon the faith of such promise. 8 Generally, therefore, a breach of promise to marry per se is not
actionable, except where the plaintiff has actually incurred expenses for the wedding and the necessary
incidents thereof.
However, the award of moral damages is allowed in cases specified in or analogous to those provided in
Article 2219 of the Civil Code. Correlatively, under Article 21 of said Code, in relation to paragraph 10 of said
Article 2219, any person who wilfully causes loss or injury to another in a manner that is contrary to morals, good
customs or public policy shall compensate the latter for moral damages. 9 Article 21 was adopted to remedy
the countless gaps in the statutes which leave so many victims of moral wrongs helpless even though they have
actually suffered material and moral injury, and is intended to vouchsafe adequate legal remedy for that
untold number of moral wrongs which is impossible for human foresight to specifically provide for in the
statutes. 10
Under the circumstances obtaining in the case at bar, the acts of petitioner in forcibly abducting private
respondent and having carnal knowledge with her against her will, and thereafter promising to marry her in
order to escape criminal liability, only to thereafter renege on such promise after cohabiting with her for
twenty-one days, irremissibly constitute acts contrary to morals and good customs. These are grossly insensate
and reprehensible transgressions which indisputably warrant and abundantly justify the award of moral and
exemplary damages, pursuant to Article 21 in relation to paragraphs 3 and 10, Article 2219, and Article 2229
and 2234 of Civil Code.
Petitioner would, however, belabor the fact that said damages were awarded by the trial court on the basis of
a finding that he is guilty of forcible abduction with rape, despite the prior dismissal of the complaint therefor
filed by private respondent with the Pasay City Fiscal's Office.
Generally, the basis of civil liability from crime is the fundamental postulate of our law that every person
criminally liable for a felony is also civilly liable. In other words, criminal liability will give rise to civil liability ex
delicto only if the same felonious act or omission results in damage or injury to another and is the direct and
proximate cause thereof. 11 Hence, extinction of the penal action does not carry with it the extinction of civil
liability unless the extinction proceeds from a declaration in a final judgment that the fact from which the civil
might arise did not exist. 12
In the instant case, the dismissal of the complaint for forcible abduction with rape was by mere resolution of the
fiscal at the preliminary investigation stage. There is no declaration in a final judgment that the fact from which
the civil case might arise did not exist. Consequently, the dismissal did not in any way affect the right of herein
private respondent to institute a civil action arising from the offense because such preliminary dismissal of the
penal action did not carry with it the extinction of the civil action.
The reason most often given for this holding is that the two proceedings involved are not between the same
parties. Furthermore, it has long been emphasized, with continuing validity up to now, that there are different
rules as to the competency of witnesses and the quantum of evidence in criminal and civil proceedings. In a
criminal action, the State must prove its case by evidence which shows the guilt of the accused beyond
reasonable doubt, while in a civil action it is sufficient for the plaintiff to sustain his cause by preponderance of
evidence only. 13 Thus, in Rillon, et al. vs. Rillon, 14 we stressed that it is not now necessary that a criminal
prosecution for rape be first instituted and prosecuted to final judgment before a civil action based on said
offense in favor of the offended woman can likewise be instituted and prosecuted to final judgment.
WHEREFORE, the petition is hereby DENIED for lack of merit, and the assailed judgment and resolution are
hereby AFFIRMED.
SO ORDERED.
Narvasa, C.J. and Padilla, J., concur.
Nocon, J., took no part.

Footnotes
1 Penned by Presiding Justice Rodolfo A. Nocon, with Associate Justices Antonio M. Martinez
and Asaali S. Isnani, concurring; Annex A, Petition; Rollo, 14.
2 Rollo, 24-26.
3 Ibid., 15-19.
4 Ibid., 27-57; Annex C, Petition; per Executive Judge Ildefonso M. Bleza.
5 Ibid., 15.
6 Ibid., 7.
7 Morales vs. Court of Appeals, et al., 197 SCRA 391 (1991).
8 De Jesus, et al. vs. Syquia, 58 Phil. 866 (1933).
9 Ford vs. Court of Appeals, et al., 186 SCRA 21 (1990).
10 Globe Mackay Cable and Radio Corp., et al. vs. Court of Appeals, et al., 176 SCRA 778
(1989).
11 Calalang, et al. vs. Intermediate Appellate Court, et al., 194 SCRA 514 (1991).
12 Sec. 2(b), Rule 111, 1985 Rules of Criminal Procedure; Faraon, et al. vs. Prieta, 24 SCRA 582
(1968).
13 Ocampo, et al. vs. Jenkins, et al., 14 Phil. 681 (1909).
14 107 Phil. 783 (1960).

G.R. No. 179736 : June 26, 2013

SPOUSES BILL AND VICTORIA HING,Petitioners, v. ALEXANDER CHOACHUY, SR. and ALLAN CHOACHUY,
Respondents.

DEL CASTILLO, J.:

FACTS:

On August 23, 2005, petitioner-spouses Bill and Victoria Hing filed with the Regional Trial Court (RTC) of Mandaue
City a Complaintfor Injunction and Damages with prayer for issuance of a Writ of Preliminary Mandatory
Injunction/Temporary Restraining Order (TRO), docketed as Civil Case MAN-5223 and raffled to Branch 28,
against respondents Alexander Choachuy, Sr. and Allan Choachuy.

Petitioners alleged that they are the registered owners of a parcel of land (Lot 1900-B) covered by Transfer
Certificate of Title (TCT) No. 42817 situated in Barangay Basak, City of Mandaue, Cebu;that respondents are the
owners of Aldo Development & Resources, Inc. (Aldo) located at Lots 1901 and 1900-C, adjacent to the
property of petitioners;that respondents constructed an auto-repair shop building (Aldo Goodyear Servitec) on
Lot 1900-C; that in April 2005, Aldo filed a case against petitioners for Injunction and Damages with Writ of
Preliminary Injunction/TRO, docketed as Civil Case No. MAN-5125;that in that case, Aldo claimed that
petitioners were constructing a fence without a valid permit and that the said construction would destroy the
wall of its building, which is adjacent to petitioners property;that the court, in that case, denied Aldos
application for preliminary injunction for failure to substantiate its allegations;that, in order to get evidence to
support the said case, respondents on June 13, 2005 illegally set-up and installed on the building of Aldo
Goodyear Servitec two video surveillance cameras facing petitioners property;that respondents, through their
employees and without the consent of petitioners, also took pictures of petitioners on-going construction;and
that the acts of respondents violate petitioners right to privacy.Thus, petitioners prayed that respondents be
ordered to remove the video surveillance cameras and enjoined from conducting illegal surveillance.

In their Answer with Counterclaim,respondents claimed that they did not install the video surveillance
cameras,nor did they order their employees to take pictures of petitioners construction.They also clarified that
they are not the owners of Aldo but are mere stockholders.

On October 18, 2005, the RTC issued an Ordergranting the application for a TRO.

Respondents moved for a reconsiderationbut the RTC denied the same in its Orderdated February 6, 2006.

Aggrieved, respondents filed with the CA a Petition for Certiorariunder Rule 65 of the Rules of Court with
application for a TRO and/or Writ of Preliminary Injunction.
On July 10, 2007, the CA issued its Decisiongranting the Petition for Certiorari. The CA ruled that the Writ of
Preliminary Injunction was issued with grave abuse of discretion because petitioners failed to show a clear and
unmistakable right to an injunctive writ.The CA explained that the right to privacy of residence under Article
26(1) of the Civil Code was not violated since the property subject of the controversy is not used as a
residence. The CA alsosaid that since respondents are not the owners of the building, they could not have
installed video surveillance cameras.They are mere stockholders of Aldo, which has a separate juridical
personality.Thus, they are not the proper parties.

ISSUE:

1. Whether or not there is a violation of petitioners right to privacy?

2. Whether or not respondents are the proper parties to this suit?

HELD: Court of Appeals decision is reversed.

POLITICAL LAW: right to privacy

The right to privacy is enshrined in our Constitutionand in our laws. It is defined as "the right to be free from
unwarranted exploitation of ones person or from intrusion into ones private activities in such a way as to cause
humiliation to a persons ordinary sensibilities."It is the right of an individual "to be free from unwarranted
publicity, or to live without unwarranted interference by the public in matters in which the public is not
necessarily concerned."Simply put, the right to privacy is "the right to be let alone."

The Bill of Rights guarantees the peoples right to privacy and protects them against the States abuse of power.
In this regard, the State recognizes the right of the people to be secure in their houses. No one, not even the
State, except "in case of overriding social need and then only under the stringent procedural safeguards," can
disturb them in the privacy of their homes.

CIVIL LAW: right to privacy under Article 26(1) of the Civil Code covers business offices where the public are
excluded therefrom and only certain individuals are allowed to enter.

Article 26(1) of the Civil Code, on the other hand, protects an individuals right to privacy and provides a legal
remedy against abuses that may be committed against him by other individuals. It states:

Art. 26. Every person shall respect the dignity, personality, privacy and peace of mind of his neighbors and
other persons. The following and similar acts, though they may not constitute a criminal offense, shall produce a
cause of action for damages, prevention and other relief:

(1) Prying into the privacy of anothers residence;

This provision recognizes that a mans house is his castle, where his right to privacy cannot be denied or even
restricted by others. It includes "any act of intrusion into, peeping or peering inquisitively into the residence of
another without the consent of the latter."The phrase "prying into the privacy of anothers residence," however,
does not mean that only the residence is entitled to privacy. As elucidated by Civil law expert Arturo M.
Tolentino:

Our Code specifically mentions "prying into the privacy of anothers residence." This does not mean, however,
that only the residence is entitled to privacy, because the law covers also "similar acts." A business office is
entitled to the same privacy when the public is excluded therefrom and only such individuals as are allowed to
enter may come in.

Thus, an individuals right to privacy under Article 26(1) of the Civil Code should not be confined to his house or
residence as it may extend to places where he has the right to exclude the public or deny them access. The
phrase "prying into the privacy of anothers residence," therefore, covers places, locations, or even situations
which an individual considers as private. And as long as his right is recognized by society, other individuals may
not infringe on his right to privacy. The CA, therefore, erred in limiting the application of Article 26(1) of the Civil
Code only to residences.

POLITICAL LAW: the "reasonable expectation of privacy" test to determine whether there is a violation of the
right to privacy.

In ascertaining whether there is a violation of the right to privacy, courts use the "reasonable expectation of
privacy" test. This test determines whether a person has a reasonable expectation of privacy and whether the
expectation has been violated.In Ople v. Torres,we enunciated that "the reasonableness of a persons
expectation of privacy depends on a two-part test: (1) whether, by his conduct, the individual has exhibited an
expectation of privacy; and (2) this expectation is one that society recognizes as reasonable." Customs,
community norms, and practices may, therefore, limit or extend an individuals "reasonable expectation of
privacy." Hence, the reasonableness of a persons expectation of privacy must be determined on a case-to-
case basis since it depends on the factual circumstances surrounding the case.

In this day and age, video surveillance cameras are installed practically everywhere for the protection and
safety of everyone. The installation of these cameras, however, should not cover places where there is
reasonable expectation of privacy, unless the consent of the individual, whose right to privacy would be
affected, was obtained. Nor should these cameras be used to pry into the privacy of anothers residence or
business office as it would be no different from eavesdropping, which is a crime under Republic Act No. 4200 or
the Anti-Wiretapping Law.

In this case, the RTC, in granting the application for Preliminary Injunction, ruled that:

After careful consideration, there is basis to grant the application for a temporary restraining order. The
operation by respondents of a revolving camera, even if it were mounted on their building, violated the right of
privacy of petitioners, who are the owners of the adjacent lot. The camera does not only focus on respondents
property or the roof of the factory at the back (Aldo Development and Resources, Inc.) but it actually spans
through a good portion of the land of petitioners.

Based on the ocular inspection, the Court understands why petitioner Hing was so unyielding in asserting that
the revolving camera was set up deliberately to monitor the on[-]going construction in his property. The monitor
showed only a portion of the roof of the factory of Aldo. If the purpose of respondents in setting up a camera
at the back is to secure the building and factory premises, then the camera should revolve only towards their
properties at the back. Respondents camera cannot be made to extend the view to petitioners lot. To allow
the respondents to do that over the objection of the petitioners would violate the right of petitioners as property
owners. "The owner of a thing cannot make use thereof in such a manner as to injure the rights of a third
person."

The RTC, thus, considered that petitioners have a "reasonable expectation of privacy" in their property, whether
they use it as a business office or as a residence and that the installation of video surveillance cameras directly
facing petitioners property or covering a significant portion thereof, without their consent, is a clear violation of
their right to privacy. As we see then, the issuance of a preliminary injunction was justified. We need not belabor
that the issuance of a preliminary injunction is discretionary on the part of the court taking cognizance of the
case and should not be interfered with, unless there is grave abuse of discretion committed by the court.Here,
there is no indication of any grave abuse of discretion. Hence, the CA erred in finding that petitioners are not
entitled to an injunctive writ.

This brings us to the next question: whether respondents are the proper parties to this suit.

REMEDEIAL LAW: A real party defendant

Section 2, Rule 3 of the Rules of Court provides:

SEC. 2. Parties-in-interest. A real party-in-interest is the party who stands to be benefited or injured by the
judgment in the suit, or the party entitled to the avails of the suit. Unless otherwise authorized by law or these
Rules, every action must be prosecuted or defended in the name of the real party-in-interest.

A real party defendant is "one who has a correlative legal obligation to redress a wrong done to the plaintiff by
reason of the defendants act or omission which had violated the legal right of the former."

In ruling that respondents are not the proper parties, the CA reasoned that since they do not own the building,
they could not have installed the video surveillance cameras. Such reasoning, however, is erroneous. The fact
that respondents are not the registered owners of the building does not automatically mean that they did not
cause the installation of the video surveillance cameras.
In their Complaint, petitioners claimed that respondents installed the video surveillance cameras in order to fish
for evidence, which could be used against petitioners in another case.During the hearing of the application for
Preliminary Injunction, petitioner Bill testified that when respondents installed the video surveillance cameras, he
immediately broached his concerns but they did not seem to care,and thus, he reported the matter to the
barangay for mediation, and eventually, filed a Complaint against respondents before the RTC.He also
admitted that as early as 1998 there has already been a dispute between his family and the Choachuy family
concerning the boundaries of their respective properties.With these factual circumstances in mind, we believe
that respondents are the proper parties to be impleaded.

Moreover, although Aldo has a juridical personality separate and distinct from its stockholders, records show
that it is a family-owned corporation managed by the Choachuy family.

Also quite telling is the fact that respondents, notwithstanding their claim that they are not owners of the
building, allowed the court to enter the compound of Aldo and conduct an ocular inspection. The counsel for
respondents even toured Judge Marilyn Lagura-Yap inside the building and answered all her questions
regarding the set-up and installation of the video surveillance cameras.And when respondents moved for
reconsideration of the Order dated October 18, 2005 of the RTC, one of the arguments they raised is that Aldo
would suffer damages if the video surveillance cameras are removed and transferred.Noticeably, in these
instances, the personalities of respondents and Aldo seem to merge.

All these taken together lead us to the inevitable conclusion that respondents are merely using the corporate
fiction of Aldo as a shield to protect themselves from this suit. In view of the foregoing, we find that respondents
are the proper parties to this suit.

213 Phil. 160

GUERRERO, J.:
This is an original action for mandamus to compel the Sangguniang Bayan and the municipal treasurer to pay
the salary due petitioner Hon. Expedite B. Pilar, in his capacity as the Vice Mayor of Dasol, Pangasinan, as
provided for by Batas Pajnbansa Big, 51 and as implemented by Circular 9-A of Joint Commission on Local
Government and Personnel Administration and to recover actual, moral and exemplary damages plus
attorney's fees.
Petitioner was elected vice mayor of Dasol, Pangasinan in 1980 local elections. Elected with him were Lodovico
Espinosa as the municipal mayor and the following members of the Sangguniang Bayan, to wit: Avelino Nacar,
Luz Jimenez, Gerardo Rivera, Juan Bonus, Apolonio G. Abella, Jaime Abella, Laurentino Balaoing and Elifas
Vidal. All of them assumed office on March 1, 1980. Later on, the following also became members of the
Sangguniang Bayan: Linda Bustria, Abraham Balaoing and Ceferino Quinitio.
On March 4,1980, the Sangguniang Bayan adopted Resolution No. l which increased the salaries of the mayor
and municipal treasurer to P18,636.00 and P16,044.00 per annum respectively. The said resolution did not
provide for an increase in salary of the vice mayor despite the fact that such position is entitled to an annual
salary of P16,0440.00[1] (Circular No. 9-A).
Petitioner questioned the failure of the Sangguniang Bayan to appropriate an amount for the payment of his
salary. He wrote letters to the proper authorities complaining about the matter and asking that something
should be done to correct it. The proper provincial[2] and national officials[3] endorsed compliance with Circular
9-A of the Joint Commission on Local Government and Personnel Administration in giving the revised rate of
salary for petitioner. In fact, the mayor was sent a letter by the Executive Secretary of the Commission advising
him that the Municipality should pay the Vice-Mayor the salary due him equivalent to that of the Municipal
Treasurer per Circular No. 15.
On December 12, 1980, the Sangguniang Bayan enacted a resolution appropriating the amount of P500.00 per
month as the salary of the petitioner. This amount was increased to P774.00 per month in December, 1981. [4]
On October 26,1982, the Sangguniang Bayan enacted a resolution appropriating the amount of P15,144.00 as
payment of the unpaid salaries of the petitioner from January 1, 1981 to December 31, 1982. The resolution was
vetoed by the respondent mayor resulting into the filing by the petitioner of this petition for a writ of mandamus
on February 16, 1983.[5]
In their comment, the respondents alleged that:
(1) The filing of the petition is premature because the petitioner did not exhaust all administrative remedies
contending that petitioner should have lodged his complaint first with the Ministry of Local Government and
Community Development; (2) that the petition involves a question of fact and, therefore, this Court does not
have jurisdiction over the case because the right of the petitioner to receive a salary depends on the
availability of municipal funds and lithe availability or non-availability of municipal funds is a factual issue which
is not cognizable by the Supreme Court"; and (3) that the petition is now moot and academic because on April
20, 1983, the Sangguniang Bayan enacted an appropriation ordinance which among others appropriated an
amount of P29,985.00 as payment of salary differentials of the petitioner pursuant to the Supplemental Budget
No. 3 Gen. Fund, C.Y. 1983.
Petitioner in his reply argues that: (1) There is no violation of the doctrine of exhaustion of administrative
remedies because only the writ of mandamus offers him an adequate and speedy remedy to his legal
problem, and the said doctrine can be dispensed with if the issue involved is a legal one and the issue to be
resolved in this case - on whether the appropriation of a salary of a vice mayor is a discretionary act or
ministerial act - is a legal issue. (2) The only factual issue involved in this case is the ascertainment of damages
inflicted to the petitioner due to the failure of the respondents to pay him his lawful salary. The existence of
municipal funds from which the salary of the petitioner could be appropriated is not a factual issue anymore
due to the certification of the municipal treasurer as to the existence of such funds, and (3) The issue has not
become moot and academic because there is no guarantee that even though a resolution appropriating the
salary of the Vice Mayor has been enacted, actual payment shall be made to the petitioner.
On June 1, 1983, We gave due course to the petition and required the parties to submit their respective
memoranda.
Petitioner admitted that at the time he submitted his memorandum, he has been fully paid of his salaries as
provided for by Batas Pambansa Big. 51 and implemented by Circular No. 9-A of the Joint Commission for Local
Government and Personnel Administration.[6]
Since petitioner's claim for salaries has already been provided for and paid, the case has become moot and
academic;
Nevertheless, We find and rule that petitioner is entitled to damages and attorney's fees because the facts
show that petitioner was forced to litigate in order to claim his lawful salary which was unduly denied him for
three (3) years and that the Mayor acted in gross and evident bad faith in refusing to satisfy petitioner's plainly
valid, just and demandable claim. (Article 2208, (2) and (5), New Civil Code).
That respondent Hon. Mayor Lodovico Espinosa alone should be held liable and responsible for the miserable
plight of the petitioner is clear. Respondent Mayor vetoed without just cause on October 26, 1982 the
Resolution of the Sangguniang Bayan appropriating the salary of the petitioner. [7] While "to veto or not to veto
involves the exercise of discretion" as contended by respondents, respondent Mayor, however, exceeded his
authority in an arbitrary manner when he vetoed the resolution since there exists sufficient municipal funds from
which the salary of the petitioner could be paid.[8] Respondent Mayor's refusal, neglect or omission in
complying with the directives of the Provincial Budget Officer and the Director of the Bureau of Local
Government that the salary of the petitioner be provided for and paid the prescribed salary rate, is reckless
and oppressive, hence, by way of example or correction for the public good, respondent Mayor is liable
personalty to the petitioner for exemplary or corrective damages.
Petitioner is likewise entitled to actual damages and costs of litigation which We reduce from P13,643.50 to
P5,000.00 and for the mental anguish, serious anxiety, wounded feelings, moral shock, social humiliation and
similar injury, We hold that petitioner is entitled to P5,000.00 as moral damages.
All the above sums as damages including attorney's fees in the amount of P5,000.00 shall be paid personally by
respondent Mayor Lodovico Espinosa from his private funds.

WHEREFORE, the petition is hereby considered moot and academic but respondent Mayor is hereby ordered to
pay petitioner from his private and personal funds actual damages and costs of litigation the amount of
P5,000.00; moral damages in the amount of P5,000.00; exemplary or corrective damages in the amount of
P5,000.00; and attorney's fees in the amount of P5,000.00.
Costs against respondent mayor.
SO ORDERED.
Makasiar (Acting C.J.), Conception Jr., Abad Santos, De Castro and Escolin, JJ., concur.
Aquino, J. (Acting Chairman), concurs in a separate opinion.

[1] Rollo, pp. 10-15, Annexes "A", "A-l", "A-2", "A-3", "AA" and "A-5".
[2] Ibid., pp. 20-21, Annexes "B-2" and "B-3".
[3] Ibid., pp. 22-23, Annexes "C" and "C-l".
[4] Ibid., petition, p. 5.
[5] Ibid., p. 6.
[6] Ibid., Memorandum, p. 64.
[7] Ibid., petition, p. 6.
[8] Annexes "D", "D-l" and "D-2".

GAUDENCIO T. MENDOZA, PLAINTIFF AND APPELLANT, VS. MAXIMO M. ALCALA, DEFENDANT AND APPELLEE.

DECISION
NATIVIDAD, J.:
This action for a sum of money, brought in the Court of First Instance of Nueva Ecija, was originally appealed to
the Court of Appeals. The latter court, however, has certified it to us for the reason that the questions involved
therein are purely of law.

It appears that sometime prior to September 12, 1955, an information was, at the instance of the plaintiff,
Gaudencio T. Mendoza, filed in the Court of First Instance of Nueva Ecija charging the defendant, Maximo M.
Alcala, with the crime of estafa. The charge was predicated upon a receipt which reads as follows:
RECIBO

"Tinanggap ko kay Gng. Gaudencio T. Mendoza ang halagang ISANG LIBO AT ISAND DAANG piso (1,100)
kualtang pilipino bilang paunang bayad ng isang daan (Wagwag) kabang palay sa 56 kilos bawa't kavan,
puesto sa kanyang kamalig.

"Ipinangako kong ihahatid ang palay na ito sa o bago dumating ang ika-5 ng Septiembre, 1953, dito sa San
Jose, Nueva Ecija.

"Sa katunayan ng lahat ay lumagda ako sa ibaba nito ngayong ika-2 ng Septiembre, 1953.
(Sgd.) Maximo M. Alcala"
The case was docketed as Criminal Case No. 3219, Court of First Instance of Nueva Ecija, People vs. Maximo
M. Alcala. After trial, that court acquitted the defendant of the offense charged, with costs de oficio, on the
following findings:

"The prosecution has not proved beyond reasonable doubt that the defendant had in fact represented to
Gaudencio T. Mendoza that he had 100 cavans of palay stored in his sister's bodega, which he offered to sell
for P1,100. The Court cannot believe that Gaudencio T. Mendoza would pay to the defendant the sum of
P1,100 on the mere representation of the defendant that the palay was in the bodega of his sister, and on his
request to pay him first as he was going to Manila. In the first place, there is no showing why the defendant was
in urgent need of P1,100 on September 2, and why it was absolutely necessary for him to go immediately to
Manila on that date, such that he had no time to deliver the 100 cavans of palay allegedly deposited in his
sister's bodega, which is only a few meters distant from the house of Gaudencio T. Mendoza. Mendoza and the
defendant are from the same town; they had known each other for a long time and they were even friends.
Defendant testified that he had no palay and had no land from which to raise that palay. That denial has not
been successfully rebutted by the prosecution. The prosecution could have shown that the defendant had in
fact tracts of land where he could raise enough palay to sell to Mendoza. Mendoza must have known that the
defendant had no palay to sell; and as defendant was not engaged in the business of buying and selling
palay, Mendoza could not have been deceived by the defendant. Again, since the bodega is near the house
of Mendoza, he could have verified from the defendant the existence of that palay. The fact that Mendoza
did not even attempt to verify the existence of that palay, is ample proof that the receipt Exhibit B was not in
fact what it purports to be. The court does not expressly pass upon the defense that the receipt signed by him
arouse from a usurious loan, as there is sufficient evidence to warrant a finding that there had been no deceit
or misrepresentation and that Exhibit B is not what it purports to be. Any obligation which the defendant may
have incurred in favor of Gaudencio T. Mendoza is purely civil in character, and not criminal." (Italics ours)
On December 16, 1954, while said criminal case was still pending, the plaintiff filed in the Justice of the Peace
Court of San Jose, Nueva Ecija, the complaint by which this case was initiated. That complaint was based on
the very same receipt upon which the criminal action was predicated, and in it plaintiff, after alleging violation
of the terms of said receipt, asked for judgment against the defendant for the sum of P1,100 with legal interests
from September 5, 1953 until full payment, plus P550 for damages, P300 for attorney's fees, and the costs of suit.
Defendant's answer consists of specific denials, affirmative defenses to the effect that the transaction referred
to in the complaint was a usurious loan in the sum of P500 and that the sum had already been paid in full, and
a counter-claim for actual, moral and exemplary damages, and attorney's fees, in the total sum of P6,000. After
trial, the justice of the peace court rendered judgment sentencing the defendant to pay to the plaintiff the
sum of P1,100, plus P300 as attorney's fees, and dismissing defendant's counterclaim. From this judgment, the
defendant appealed to the Court of First Instance of Nueva Ecija, where he reproduced the answer he had
filed in the justice of the peace court. At the hearing of the case in the Court of First Instance of Nueva Ecija,
and while the first witness for the plaintiff was testifying on the witness stand, the following proceedings were
had:

"AGREEMENT:
Atty. Padilla
The parties stipulate that the transaction which is now the object of the civil case is the same transaction which
had been the object in Criminal Case No. 3219 of this Hon. Court. "

Atty. Cadhit
Agreed.

Atty. Padilla
That the accused was acquitted in that case was evidenced by the decision, Exhibit A.

Atty. Cadhit
Agreed.

Atty. Padilla
In the said criminal case having made a specific finding that the transaction was not a sale of palay but it can
be any other, we believe any question with respect to the sale of palay will be out of order now.

Court
Submitted in accordance with Rule 107."
Upon the agreement and the decision rendered in Criminal Case No. 3219 above referred to, the Court of First
Instance of Nueva Ecija rendered judgment, dismissing plaintiff's complaint and defendant's counterclaim, with
costs against plaintiff, on the findings, among others, that
"On the basis of said stipulation a question of law is raised by the parties, to wit, whether the defendant could
still be prosecuted for the collection of the amount stated in the said receipt after he had been acquitted by
the Court on a charge of estafa based on the said receipt. Section d, Rule 107, provides:

"Extinction of penal action does not carry with it extinction proceeds from a declaration in a final judgment that
the fact from which the civil might arise did not exist.'

"In acquitting the accused of the crime of estafa, the Court expressly made a finding as follows:

'The Court does not expressly pass upon the defense that the receipt signed by him arose from a usurious loan,
as there is sufficient evidence to warrant a finding that there had been no deceit or misrepresentation and Exh.
B. is not what it purports to be.'
"In effect, the Court did not believe that the accused received the amount of P1,100 as advance payment of
the 100 cavans of palay weighing 46 kilos a cavan. Since the Court did not find this to be a fact, it cannot serve
as basis for a criminal action under the provision of the rule above-cited. The reason for the rule is that, once
the court makes a definite finding as to the non-existence of a fact, non-existence should be final and
conclusive against the party claiming the existence of the same, otherwise there would be no stability in the
decision of the courts. The only possibility, therefore, of filing a civil action against the same defendant is to work
out a theory entirely different from the theory followed in the criminal action, which was, that the defendant
received the amount of P1,100 as advance payment for palay for as to any other theory, the Court did not
make any express finding that the same did not exist.

"It may be contended that a separate civil action may even be filed against the same defendant if a criminal
action had already been filed against him. Granting this contention to be true and tenable, it is no less true that
when a criminal action is filed against the defendant the civil action must yield to the criminal action after the
acquittal of the defendant, if the two actions are based on the same set of facts. It may also be true that a
separate civil action may be filed against him if he is acquitted on a reasonable doubt. But that is entirely
different from a finding that the facts from which the civil action may arise did not exist, for in case of
reasonable doubt, this fact may yet exist. In other words, when the court makes an express finding that the
facts upon which the decision may be based do not exist, the same is conclusive and is a bar to the
prosecution based on the same set of facts."
From this judgment, the plaintiff appealed.

The appellant contends that the trial court committed error in dismissing the present action. It is claimed that as
in its decision in Criminal Case No. 3219 the trial court did not make any express finding that the fact on which
the action was predicated did not exist, but merely found that "the prosecution has not proved beyond
reasonable doubt that the defendant had in fact represented to Gaudencio T. Mendoza that he had 100
cavans of palay stored in his sister's bodega, which he offered to sell for P1,100," that "there is sufficient
evidence to warrant a finding that there had been no deceit or misrepresentation and that Exhibit B is not what
it purports to be," and that "any obligation which the defendant may have incurred in favor of Gaudencio T.
Mendoza is purely civil in character, and not criminal," which findings amount to a declaration that the
defendant was acquitted on reasonable doubt, a civil action based on the same transaction may still be
instituted.

The appellee, on the other hand, maintains that the judgment appealed from is correct. It is urged that the
findings made in said decision, particularly those quoted above, amount to a declaration that the transaction
which was the subject matter of the criminal case did not exist, and so no civil action based on that same
transaction would lie.

The pertinent provisions of law are Article 29 of the new Civil Code and Rule 107, Section 1, Subsection (d), of
the Rules of Court. Article 29 of the new Civil Code provides:

"Art. 29. When the accused in a criminal prosecution is acquitted on the ground that his guilt has not been
proved beyond reasonable doubt, a civil action for damages for the same act or omission may be instituted.
Upon motion of the defendant the court may require the plaintiff to file a bond to answer for damages in case
the complaint should be found to be malicious.

"If in a criminal case the judgment of acquittal is based upon reasonable doubt, the court shall so declare. In
the absence of any declaration to that effect, it may be inferred from the text of the decision whether or not
the acquittal is due to that ground."
and Rule 107, Section 1, Subsection (d), of the Rules of Court, reads as follows:

"Section 1. Rules governing civil actions arising from offenses. Except as otherwise provided by law, the following
rules shall be observed:

* * * * * * *

"(d) Extinction of the penal action does not carry with it extinction of the civil, unless the extinction proceeds
from a declaration in a final judgment that the fact from which the civil might arise did not exist. In the other
cases, the person entitled to the civil action may institute it in the jurisdiction and in the manner provided by law
against the person who may be liable for restitution of the thing and reparation or indemnity for the damages
suffered;
* * * * * * *"

Interpreting the scope of the above quoted provisions of law, we held in the case of Philippine National
Bank vs. Catipon, 98 Phil., 286; 52 Off. Gaz., 3589, that

"The acquittal of the accused of the charge of estafa predicated on the conclusion 'that the guilt of the
defendant has not been satisfactorily established,' is equivalent to one on reasonable doubt and does not
preclude a suit to enforce the civil liability for the same act or omission under Article 29 of the new Civil Code."
and in Republic of the Philippines vs. Assad, 96 Phil., 398; 51 Off. Gaz., 703, that

"A judgment of acquittal does not constitute a bar to a subsequent civil action involving the same subject
matter, even in regard to a civil action brought against the defendant by the State, nor it is evidence of his
innocence in such action, and is not admissible in evidence to prove that he was not guilty of the crime with
which he was charged. (50 C. J. S., pp. 272-273; 30 Am. Jur., 1003)"
As we analyze the record in the light of the above provisions of law and jurisprudence, we are fully persuaded
that appellant's contention is not without foundation. It will be noted that nowhere in the decision rendered in
Criminal Case No. 3219 of the Court of First Instance of Nueva Ecija is found an express declaration that the fact
from which the civil action might arise did not exist. It is true that said decision likewise contains no express
declaration that the acquittal of the defendant was based upon reasonable doubt. Whether or not, however,
the acquittal is due to that ground may, under the above quoted provision of Article 29 of the Civil Code, be
inferred from the text of the decision, and a close consideration of the language used in said decision,
particularly the findings quoted above, which are of similar import as the phrase "that the guilt of the defendant
has not been satisfactorily established," held in Philippine National Bank vs. Catipon, supra, to be equivalent to
a declaration that the acquittal was based on reasonable doubt, convinces us that the acquittal of the
defendant in the criminal case in question was predicated on the conclusion that his guilt of the crime charged
has not been proved beyond reasonable doubt and does not preclude a suit to enforce the civil liability arising
from the same transaction which was the subject-matter of said criminal action. The right, therefore, of the
appellant to bring the present action cannot be questioned, the fact that he did not reserve his right to file an
independent civil action, and that this action has been instituted before final judgment in the criminal case
rendered, notwithstanding. The declaration in the decision in Criminal Case No. 3219 to the effect that "any
obligation which the defendant may have incurred in favor of Gaudencio T. Mendoza is purely civil in
character, and not criminal" amount to a reservation of the civil action in favor of the offended party,
Philippine National Bank vs. Catipon, supra, and the offense charged in said criminal case being estafa, which
is fraud, the present action falls under the exception to the general rule and it can be filed independently of
the criminal action, (Article 33, new Civil Code; Dianeta vs. Makasiar, [CA] 55 Off. Gaz., 10273;
People vs. Balagtas, [CA] 51 Off. Gaz., 5714.)

Wherefore, the judgment appealed from is hereby vacated and set aside, and it is ordered that the records of
this case be remanded to the court of origin for further proceedings in accordance with law. With the costs
taxed against the appellee. It is so ordered.

Bengzon, C. J., Padilla, Labrador, Concepcion, Reyes, J. B. L., Barrera, Paredes, Dizon, and De Leon, JJ.,
concur.

Mendoza vs. Alcala, 2 SCRA 1032 , August 29, 1961


Civil Action; When extinguished by extinction of criminal action.—Extinction of the penal action does not carry
with it extinction of the civil action, unless the extinction proceeds from a declaration in a final judgment that
the fact from which the civil action might arise did not exist. (Section 1, subsec. (d), Rule 107).

Same; Acquittal based on reasonable doubt; Effect on civil liability of accused.—Where the decision in the
criminal case does not expressly declare that the fact from which the civil action might arise did not exist, nor
state that acquittal was based on reasonable doubt, but it may be inferred from the test thereof that acquittal
was based on reasonable doubt, the acquittal does not preclude a suit to enforce the civil liability arising from
the same transaction., The conclusion that “the guilt of the defendant has not been satisfactorily established” is
equivalent to one on reasonable doubt. (Philippine National Bank vs. Catipon, 52 O.G. 3589).

Same; Declaration amounting to reservation of civil action in favor of offended party.—Although the offended
party did not reserve his right to file a separate civil action, the declaration in the decision in the criminal case
that any obligation which defendant therein may have incurred in favor of the offended party is purely civil,
amounts to a reservation of the civil action in favor of the offended party.

Same; Civil action that may be filed independently of criminal action.—Where the offense charged in the
criminal action is estafa, which is fraud, the civil action may be filed independently of the criminal action. (Art.
33, New Civil Code; Dianeta vs. Makasiar, 55 O.G. 10273; People vs. Balagtas, 51 O.G. 5714). [Mendoza vs.
Alcala, 2 SCRA 1032(1961)]
G.R. No. 145391 August 26, 2002
AVELINO CASUPANAN and ROBERTO CAPITULO (petitioners)
vs.
MARIO LLAVORE LAROYA (respondent)
FACTS:
Two vehicles, one driven by respondent Laroya and the other owned by petitioner Capitulo and driven by
petitioner Casupanan, figured in an accident. This prompted the filing of two cases before the MCTC of Capas
Tarlac: 1st – a criminal case for reckless imprudence resulting to damage to property filed by respondent
against Casapunan; 2nd – a civil case arising from a quasi-delict filed by the petitioners against the respondent.
The civil case was filed pending preliminary investigation on the criminal case. Respondent as defendant in the
civil case filed a motion to dismiss on ground of forum shopping due pendency of the criminal case. The MCTC
granted the motion for dismissal on basis of forum shopping. Petitioners filed a Motion for Reconsideration on
the ground that a separate civil action may be instituted separately and independently from the criminal case.
MCTC denied the motion. Thereafter, petitioners filed a petition for Certiorari before Capas RTC to assail
MCTC’s Order, however the RTC dismissed the same for lack of merit. Hence, a petition for Review on Certiorari
before the Court.
ISSUE:
Whether or not an accused in a pending criminal case for reckless imprudence can validly file, simultaneously
and independently, a separate civil action for quasi-delict against the private complainant in the criminal
case.
HELD:
YES. The right of the accused to file a separate civil action for quasi-delict is akin to the right of the offended
party to file an independent civil action pursuant to Section 1 of Rule 111. Under the said rule, the independent
civil action in Articles 32, 33, 34 and 2176 of the Civil Code is not deemed instituted with the criminal action but
may be filed separately by the offended party even without reservation. The commencement of the criminal
action does not suspend the prosecution of the independent civil action under these articles of the Civil Code.
The suspension in Section 2 of the present Rule 111 refers only to the civil action arising from the crime, if such
civil action is reserved or filed before the commencement of the criminal action. Thus, the offended party can
file two separate suits for the same act or omission. The first a criminal case where the civil action to recover civil
liability ex-delicto is deemed instituted, and the other a civil case for quasi-delict – without violating the rule on
non-forum shopping. The two cases can proceed simultaneously and independently of each other. The
commencement or prosecution of the criminal action will not suspend the civil action for quasi-delict. The only
limitation is that the offended party cannot recover damages twice for the same act or omission of the
defendant.
Similarly, the accused can file a civil action for quasi-delict for the same act or omission he is accused of in the
criminal case. This is expressly allowed in paragraph 6, Section 1 of the present Rule 111 which states that the
counterclaim of the accused may be litigated in a separate civil action. This is only fair for two reasons. First, the
accused is prohibited from setting up any counterclaim in the civil aspect that is deemed instituted in the
criminal case. The accused is therefore forced to litigate separately his counterclaim against the offended
party. If the accused does not file a separate civil action for quasi-delict, the prescriptive period may set in
since the period continues to run until the civil action for quasi-delict is filed. Second, the accused, who is
presumed innocent, has a right to invoke Article 2177 of the Civil Code, in the same way that the offended
party can avail of this remedy which is independent of the criminal action. To disallow the accused from filing a
separate civil action for quasi-delict, while refusing to recognize his counterclaim in the criminal case, is to deny
him due process of law, access to the courts, and equal protection of the law.
Thus, the civil action based on quasi-delict filed separately by Petitioners is proper.

Hambon vs CA

G.R. No. 122150


March 17, 2003

FACTS:

Herein respondent filed a complaint for damages against respondent for the injuries and expenses he sustained
when the latter’s truck bumped him that night of December 9, 1985.

However, the criminal case (Serious Physical Injuries thru Reckless Imprudence) filed previously against the
respondent was dismissed by the court for petitioner’s lack of interest.

Respondent alleges that the dismissal of criminal case includes that of the civil action.

Trial Court rendered decision in favor of petitioner,


Court of Appeals reversed the decision, on the grounds that the Hambon failed to file the civil case. Hence, it is
impliedly instituted with the Criminal case. The dismissal of the criminal case also includes the dismissal of the
civil case.

ISSUE:
WHETHER OR NOT A CIVIL CASE FOR DAMAGES BASED ON AN INDEPENDENT CIVIL ACTION FALLING UNDER
ARTICLE 32, 33, 34 AND 2176 OF THE NEW CIVIL CODE BE DULY DISMISSED FOR FAILURE TO MAKE RESERVATION TO
FILE A SEPARATE CIVIL ACTION IN A CRIMINAL CASE FILED ARISING FROM THE SAME ACT OR OMISSION OF THE
ACCUSED PURSUANT TO RULE 111, SECTION 1 OF THE RULES OF COURT, THE FAILURE TO MAKE RESERVATION
BEING DUE TO THE FACT THAT THE CRIMINAL CASE WAS DISMISSED BEFORE THE PROSECUTION STARTED TO
PRESENT EVIDENCE FOR FAILURE OF THE PRIVATE COMPLAINANT TO APPEAR DESPITE NOTICE

HELD:

1quite clearly requires that a reservation must be made to institute separately all civil actions for the recovery of
civil liability, otherwise they will de deemed to have been instituted with the criminal case.... In other words the
right of the injured party to sue separately for the recovery of the civil liability whether arising from crimes (ex
delicto) or from quasi-delict under Art. 2176 of the Civil Code must be reserved otherwise they will de deemed
instituted with the criminal action.
Contrary to private respondent's contention, the requirement that before a separate civil action may be
brought it must be reserved does not impair, diminish or defeat substantive rights, but only regulates their
exercise in the general interest of procedure. The requirement is merely procedural in nature. For that matter
the Revised Penal Code, by providing in Art. 100 that any person criminally liable is also civilly liable, gives the
offended party the right to bring a separate civil action, yet no one has ever questioned the rule that such
action must be reserved before it may be brought separately.
While the Abellana case ruled that a reservation is not necessary, the 1988 amendment of the rule explicitly
requires reservation of the civil action.
x x x Prior reservation is a condition sine qua non before any of these independent civil actions can be instituted
and thereafter have a continuous determination apart from or simultaneous with the criminal action.
. . . Far from altering substantive rights, the primary purpose of the reservation is, to borrow the words of the
Court in "Caños v. Peralta":
‘. . . to avoid multiplicity of suits, to guard against oppression and abuse, to prevent delays, to clear congested
dockets, to simplify the work of the trial court; in short, the attainment of justice with the least expense and
vexation to the parties-litigants.
Thus, herein petitioner Hambon should have reserved his right to separately institute the civil action for
damages in Criminal Case No. 2049. Having failed to do so, Civil Case No. 1761-R for damages subsequently
filed by him without prior reservation should be dismissed. With the dismissal of Criminal Case No. 2049,
whatever civil action for the recovery of civil liability that was impliedly instituted therein was likewise
dismissed.chan robles virtual law library
WHEREFORE, the instant petition for review on certiorari is hereby DENIED for lack of merit, and the decision of
the Court of Appeals dated March 8, 1995, is AFFIRMED in toto

GEORGE (CULHI) HAMBON, petitioner,


vs.
COURT OF APPEALS AND VALENTINO U. CARANTES, respondents.
G.R. No. 122150 March 17, 2003
AUSTRIA-MARTINEZ, J.:

Facts:
Petitioner George (Culhi) Hambon filed herein filed a complaint for damages against respondent for the injuries
and expenses he sustained sustained after the truck driven by the respondent bumped him on the night of
December 9, 1985.
However, the criminal case (Serious Physical Injuries thru Reckless Imprudence) filed previously against the
respondent was dismissed by the court for petitioner’s lack of interest and that the dismissal was with respect to
both criminal and civil liabilities of respondent.
After trial, the Regional Trial Court rendered a decision, dated December 18, 1991, ruling that the civil case was
not barred by the dismissal of the criminal case, and that petitioner is entitled to damages.
Respondent alleges that the dismissal of criminal case includes that of the civil action.
The Court of Appeals, in its decision promulgated on March 8, 1995, reversed and set aside the decision of the
trial court, and dismissed petitioner’s complaint for damages on the grounds that the Hambon failed to file the
civil case. Hence, it is impliedly instituted with the Criminal case. The dismissal of the criminal case also includes
the dismissal of the civil case.
According to the appellate court, since the petitioner did not make any reservation to institute a separate civil
action for damages, it was impliedly instituted with the criminal case, and the dismissal of the criminal case
carried with it the dismissal of the suit for damages, notwithstanding the fact that the dismissal was provisional
as it amounted to an acquittal and had the effect of an adjudication on the merits.
Issue:
Whether or not a civil case for damages based on an independent civil action falling under articles 32, 33, 34
and 2176 of the new civil code be duly dismissed for failure to make reservation to file a separate civil action in
a criminal case filed arising from the same act or omission of the accused pursuant to Rule 111, Section 1 of the
Rules of Court, the failure to make reservation being due to the fact that the criminal case was dismissed
before the prosecution started to present evidence for failure of the private complainant to appear despite
notice.
Held:
Civil actions to recover liability arising from crime (ex delicto) and under Articles 32, 33, 34 and 2176 of the Civil
Code (quasi-delict) are deemed impliedly instituted with the criminal action unless waived, reserved or
previously instituted.
The Court expounded that it clearly requires that a reservation must be made to institute separately all civil
actions for the recovery of civil liability, otherwise they will be deemed to have been instituted with the criminal
case. In other words, the right of the injured party to sue separately for the recovery of the civil liability whether
arising from crimes (ex delicto) or from quasi-delict under Art. 2176 of the Civil Code must be reserved otherwise
they will be deemed instituted with the criminal action.
Contrary to private respondent’s contention, the requirement that before a separate civil action may be
brought it must be reserved does not impair, diminish or defeat substantive rights, but only regulates their
exercise in the general interest of procedure. The requirement is merely procedural in nature. For that matter
the Revised Penal Code, by providing in Art. 100 that any person criminally liable is also civilly liable, gives the
offended party the right to bring a separate civil action, yet no one has ever questioned the rule that such
action must be reserved before it may be brought separately.
Thus, herein petitioner Hambon should have reserved his right to separately institute the civil action for
damages in Criminal Case No. 2049. Having failed to do so, Civil Case No. 1761-R for damages subsequently
filed by him without prior reservation should be dismissed. With the dismissal of Criminal Case No. 2049,
whatever civil action for the recovery of civil liability that was impliedly instituted therein was likewise dismissed.
WHEREFORE, the instant petition for review on certiorari is hereby DENIED for lack of merit, and the decision of
the Court of Appeals dated March 8, 1995, is AFFIRMED in toto.

Source:
G.R. No. 122150 – LawPhil. Retrieved
from: http://www.lawphil.net/judjuris/juri2003/mar2003/gr_122150_2003.html.
Note: Case related to Article 33 of the Civil Code.

ABERCA v. VER
FACTS
Task Force Makabansa (TFM) was ordered by General Fabian Ver to conduct pre-emptive strikes
against Communist- Terrorist underground houses. TFM raided several houses, employing in most cases
defectively judicial search warrants, arrested people without warrant of arrest, denied visitation rights, and
interrogated them with the use of threats and tortures. A motion to dismiss was filed by defendants, stating that
1) plaintiffs may not cause a judicial inquiry about their detention because the writ of habeas corpus was
suspended; 2) defendants are immune from liability for acts done in their official duties; 3) there was no cause
of action. On Nov 8, 1983, Judge Fortun granted the motion to dismiss, which prompted plaintiffs to file a MR on
Nov 18, 1983. He later inhibited himself and was replaced Judge Lising, who denied the MR for being filed out
of time. Another MR was filed, and was only modified to include Maj. Aguinaldo and MSgt. Balaba for officers
accountable in the said complaint.
ISSUES
1. Whether or not immunity from suit may be invoked?
2. Whether petitioners have the right to question the alleged violation of their rights in the constitution?
3. Whether the superior officers who gave the orders are liable?
HELD
1. NO, Article 32 of the Civil Code provides a sanction to rights and freedom enshrined in the constitution. These
rights cannot be violated just because of an order given by a superior. The rule of law must prevail, or else
liberty will perish. Even though they just followed the orders of their superior, these do not authorize them
to disregard the rights of the petitioners, and therefore cannot be considered “acts done in their official duties”.
Article 32 speaks of any public officer or private individual, and violation of these constitutional rights does not
exempt them from responsibility.
2. YES, the suspension of the writ of habeas corpus does not prevent petitioners from claiming damages for the
illegal arrest and detention in violation of their constitutional rights by seeking judicial authority. What the writ
suspends is merely the right of an individual to seek release from detention as a speedy means of obtaining
liberty. It cannot suspend their rights and cause of action for injuries suffered due to violation of their rights.
3. YES, Article 32 speaks of the liabilities of people who are in direct violation of the rights stated, as well as
people who are indirectly responsible for such acts. In the case at hand, the superior officers are the ones who
gave the order, and can be considered indirectly responsible. It was also stated in the complaint who were the
ones who directly and indirectly participated in those acts. By filing a motion to dismiss, they admitted all
the facts stated in the complaint.

Aberca, et al. v. Ver et al.


G.R. No. L-69866, April 15, 1988
Yap, J.
Facts:
Several persons were arrested and detained without charges during the period of martial law. When they were
released by President Aquino they filed a suit for damages based on Article 2, NCC.
Issue:
Whether or not the respondents can be held liable for damages
Ruling:
Yes. The purpose of article 32 of the Civil Code is to provide a sanction to the deeply cherished rights and
freedoms enshrined in the Constitution. No man may seek to violate those sacred rights with impunity.
Our commitment to democratic principles and to the rule of law compels us to reject the view which reduces
law to nothing but the expression of the will of the predominant power in the community.
The decisive factor in this case, in our view, is the language of Article 32. The law speaks of an officer or
employee or person ‘directly’ or “indirectly” responsible for the violation of the constitutional rights and liberties
of another. Thus, it is not the actor alone (i.e. the one directly responsible) who must answer for damages under
Article 32; the person indirectly responsible has also to answer for the damages or injury caused to the
aggrieved party.

RULE 111
Prosecution of Civil Action
Section 1. Institution of criminal and civil actions. — (a) When a criminal action is instituted, the civil action for
the recovery of civil liability arising from the offense charged shall be deemed instituted with the criminal action
unless the offended party waives the civil action, reserves the right to institute it separately or institutes the civil
action prior to the criminal action.
The reservation of the right to institute separately the civil action shall be made before the prosecution starts
presenting its evidence and under circumstances affording the offended party a reasonable opportunity to
make such reservation.
When the offended party seeks to enforce civil liability against the accused by way of moral, nominal,
temperate, or exemplary damages without specifying the amount thereof in the complaint or information, the
filing fees thereof shall constitute a first lien on the judgment awarding such damages.
Where the amount of damages, other than actual, is specified in the complaint or information, the
corresponding filing fees shall be paid by the offended party upon the filing thereof in court.
Except as otherwise provided in these Rules, no filing fees shall be required for actual damages.
No counterclaim, cross-claim or third-party complaint may be filed by the accused in the criminal case, but
any cause of action which could have been the subject thereof may be litigated in a separate civil action.
(1a)
(b) The criminal action for violation of Batas Pambansa Blg. 22 shall be deemed to include the corresponding
civil action. No reservation to file such civil action separately shall be allowed.
Upon filing of the aforesaid joint criminal and civil actions, the offended party shall pay in full the filing fees
based on the amount of the check involved, which shall be considered as the actual damages claimed.
Where the complaint or information also seeks to recover liquidated, moral, nominal, temperate or exemplary
damages, the offended party shall pay additional filing fees based on the amounts alleged therein. If the
amounts are not so alleged but any of these damages are subsequently awarded by the court, the filing fees
based on the amount awarded shall constitute a first lien on the judgment.
Where the civil action has been filed separately and trial thereof has not yet commenced, it may be
consolidated with the criminal action upon application with the court trying the latter case. If the application is
granted, the trial of both actions shall proceed in accordance with section 2 of this Rule governing
consolidation of the civil and criminal actions. (cir. 57-97)
Section 2. When separate civil action is suspended. — After the criminal action has been commenced, the
separate civil action arising therefrom cannot be instituted until final judgment has been entered in the criminal
action.
If the criminal action is filed after the said civil action has already been instituted, the latter shall be suspended
in whatever stage it may be found before judgment on the merits. The suspension shall last until final judgment
is rendered in the criminal action. Nevertheless, before judgment on the merits is rendered in the civil action,
the same may, upon motion of the offended party, be consolidated with the criminal action in the court trying
the criminal action. In case of consolidation, the evidence already adduced in the civil action shall be
deemed automatically reproduced in the criminal action without prejudice to the right of the prosecution to
cross-examine the witnesses presented by the offended party in the criminal case and of the parties to present
additional evidence. The consolidated criminal and civil actions shall be tried and decided jointly.
During the pendency of the criminal action, the running of the period of prescription of the civil action which
cannot be instituted separately or whose proceeding has been suspended shall be tolled. (n)
The extinction of the penal action does not carry with it extinction of the civil action. However, the civil action
based on delict shall be deemed extinguished if there is a finding in a final judgment in the criminal action that
the act or omission from which the civil liability may arise did not exist. (2a)
Section 3. When civil action may proceeded independently. — In the cases provided for in Articles 32, 33, 34
and 2176 of the Civil Code of the Philippines, the independent civil action may be brought by the offended
party. It shall proceed independently of the criminal action and shall require only a preponderance of
evidence. In no case, however, may the offended party recover damages twice for the same act or omission
charged in the criminal action. (3a)
Section 4. Effect of death on civil actions. — The death of the accused after arraignment and during the
pendency of the criminal action shall extinguish the civil liability arising from the delict. However, the
independent civil action instituted under section 3 of this Rule or which thereafter is instituted to enforce liability
arising from other sources of obligation may be continued against the estate or legal representative of the
accused after proper substitution or against said estate, as the case may be. The heirs of the accused may be
substituted for the deceased without requiring the appointment of an executor or administrator and the court
may appoint a guardian ad litem for the minor heirs.
The court shall forthwith order said legal representative or representatives to appear and be substituted within a
period of thirty (30) days from notice.
A final judgment entered in favor of the offended party shall be enforced in the manner especially provided in
these rules for prosecuting claims against the estate of the deceased.
If the accused dies before arraignment, the case shall be dismissed without prejudice to any civil action the
offended party may file against the estate of the deceased. (n)
Section 5. Judgment in civil action not a bar. — A final judgment rendered in a civil action absolving the
defendant from civil liability is not a bar to a criminal action against the defendant for the same act or omission
subject of the civil action. (4a)
Section 6. Suspension by reason of prejudicial question. — A petition for suspension of the criminal action based
upon the pendency of a prejudicial question in a civil action may be filed in the office of the prosecutor or the
court conducting the preliminary investigation. When the criminal action has been filed in court for trial, the
petition to suspend shall be filed in the same criminal action at any time before the prosecution rests. (6a)
Section 7. Elements of prejudicial question. — The elements of a prejudicial question are: (a) the previously
instituted civil action involves an issue similar or intimately related to the issue raised in the subsequent criminal
action, and (b) the resolution of such issue determines whether or not the criminal action may proceed. (5a)
Cases where prejudicial question does not apply:

1. Sabandal v. Tongco, G.R. No. 124498, October 5, 2001: PTI filed a case for violation of BP 22 against Sabandal.
Three years after the Information was filed, Sabandal filed with the RTC a complaint against PTI for specific
performance, recovery of overpayment and damages. Sabandal then filed a motion to suspend trial in the BP
22 cases against him based on a prejudicial question. Is there a prejudicial question to warrant the suspension
of the trial of the BP 22 cases until after the resolution of the civil action for specific performance, recovery of
overpayment, and damages?

Held: None. The pendency of a civil action for specific performance, overpayment, and damages did not pose
a prejudicial question in the criminal cases for violation of Batas Pambansa Bilang 22. The issue in the criminal
cases for violation of Batas Pambansa Bilang 22 is whether the accused knowingly issued worthless checks. The
issue in the civil action for specific performance, overpayment, and damages is whether complainant
Sabandal overpaid his obligations to Philippines Today, Inc. If, after trial in the civil case, petitioner is shown to
have overpaid respondent, it does not follow that he cannot be held liable for the bouncing checks he issued,
for the mere issuance of worthless checks with knowledge of the insufficiency of funds to support the checks is
itself an offense. [Note: At the time the cases were filed, the Rule did not require a "previously" instituted civil
action. This was only required in the 2000 Revised Rules of Criminal Procedure]

Capili vs. People G.R. No. 183805, July 03, 2013 Bigamy
JANUARY 27, 2018
FACTS:
Petitioner was charged with the crime of bigamy before the RTC. Petitioner thereafter filed a Motion to Suspend
Proceedings alleging that: (1) there is a pending civil case for declaration of nullity of the second marriage
before the RTC of Antipolo City filed by Karla Y. Medina-Capili; (2) in the event that the marriage is declared
null and void, it would exculpate him from the charge of bigamy; and (3) the pendency of the civil case for the
declaration of nullity of the second marriage serves as a prejudicial question in the instant criminal case.

ISSUE:
Whether or not the subsequent declaration of nullity of the second marriage is a ground for dismissal of the
criminal case for bigamy.
RULING:
Article 349 of the Revised Penal Code defines and penalizes the crime of bigamy as
follows:cralavvonlinelawlibrary
Art. 349. Bigamy. – The penalty of prision mayorshall be imposed upon any person who shall contract a second
or subsequent marriage before the former marriage has been legally dissolved, or before the absent spouse
has been declared presumptively dead by means of a judgment rendered in the proper proceedings.
The elements of the crime of bigamy, therefore, are: (1) the offender has been legally married; (2) the marriage
has not been legally dissolved or, in case his or her spouse is absent, the absent spouse could not yet be
presumed dead according to the Civil Code; (3) that he contracts a second or subsequent marriage; and (4)
that the second or subsequent marriage has all the essential requisites for validity.9
In the present case, it appears that all the elements of the crime of bigamy were present when the Information
was filed on June 28, 2004.
It is undisputed that a second marriage between petitioner and private respondent was contracted on
December 8, 1999 during the subsistence of a valid first marriage between petitioner and Karla Y. Medina-
Capili contracted on September 3, 1999. Notably, the RTC of Antipolo City itself declared the bigamous nature
of the second marriage between petitioner and private respondent. Thus, the subsequent judicial declaration
of the second marriage for being bigamous in nature does not bar the prosecution of petitioner for the crime of
bigamy.
Jurisprudence is replete with cases holding that the accused may still be charged with the crime of bigamy,
even if there is a subsequent declaration of the nullity of the second marriage, so long as the first marriage was
still subsisting when the second marriage was celebrated.
Case Digest: G.R. No. 112381 March 20, 1995

Isabelo Apa, Manuel Apa and Leonilo Jacalan, petitioners, vs. Hon. Rumoldo R. Fernandez, Hon. Celso V.
Espinosa, And Sps. Felixberto Tigol, Jr. And Rosita Taghoy Tigol, respondents

Facts: This is a special civil action of certiorari to set aside orders of respondent Judge Romuldo Fernandez of
RTC, Branch 54 of Lapu-Lapu City denying petitioners motion for suspension of arraignment and motion for
reconsideration in a criminal case filed against them. Petitioners anchor their claim on a prior case regarding
ownership. Petitioners allege that the civil case filed in 1990 seeking declaration for nullity of land title of the
owner which had been filed three years before May 27, 1993 when the criminal case for squatting was filed
against them constitutes a prejudicial question.

Issue: Whether the question of ownership is a prejudicial question justifying the suspension of the criminal case
against petitioners.

Ruling: Petition to suspend Criminal Case No. 012489 based on the prejudicial question presented was granted
on basis that;
 the prejudicial question is a question based on a fact distinct and separate from the crime but so
intimately connected with it that its resolution is determinative of the guilt or innocence of the accused.
 elements of prejudicial question - (1) the civil action involves an issue similar or intimately related to the
issue raised in the criminal action; and (2) the resolution of such issue determines whether or not the criminal
action may proceed.
 the criminal case alleges that petitioners squatted without the knowledge and consent of the owner,
which, in 1994 the civil case rendered the nullity of the title of the owner and declared both petitioners and
respondents as co-owners of the land.
 respondents argue that owners can be ejected from his property only if for some reason, that is, he has
let it to some other person. However, both case of respondents and petitioners are based on ownership.

Bobis vs Bobis Case Digest

Facts:

On October 21, 1985, respondent Isagani contracted a first marriage with one Maria Dulce. Without said
marriage having been annulled, Isagani contracted a second marriage with petitioner Imelda on January 25,
1996 and allegedly a third marriage with a certain Julia. An information for bigamy was filed against Isagani
based on Imelda's complaint. Sometime thereafter, Isagani initiated a civil action for the judicial declaration
of absolute nullity of his first marriage on the ground that it was celebrated without a marriage
license. Isagani then filed a motion to suspend the proceedings in the criminal case for bigamy invoking the
pending civil case for nullity of the first marriage as a prejudicial question to the criminal case. The trial
judge granted the motion to suspend the criminal case.

Issue:

Does the subsequent filing of a civil action for declaration of nullity of a previous marriage constitutes a
prejudicial question to a criminal case for bigamy?

Held:

A prejudicial question is one which arises in a case the resolution of which is a logical antecedent of the issue
involved therein. It is a question based on a fact distinct and separate from the crime but so intimately
connected with it that it determines the guilt or innocence of the accused. It must appear not only that the civil
case involves facts upon which the criminal action is based, but also that the resolution of the issues raised in
the civil action would necessarily be determinative of the criminal case. Consequently, the defense must
involve an issue similar or intimately related to the same issue raised in the criminal action and its resolution
determinative of whether or not the latter action may proceed. Its two essential elements are:

(a) the civil action involves an issue similar or intimately related to the issue raised in the criminal action; and

(b) the resolution of such issue determines whether or not the criminal action may proceed.

Article 40 of the Family Code, which was effective at the time of celebration of the second marriage, requires a
prior judicial declaration of nullity of a previous marriage before a party may remarry. The clear implication of
this is that it is not for the parties, particularly the accused, to determine the validity or invalidity of the
marriage.

Isagani, without first having obtained the judicial declaration of nullity of the first marriage, can not be said to
have validly entered into the second marriage. He was for all legal intents and purposes regarded as a married
man at the time he contracted his second marriage with petitioner. Any decision in the civil action for nullity
would not erase the fact that respondent entered into a second marriage during the subsistence of a first
marriage. Thus, a decision in the civil case is not essential to the determination of the criminal charge. It is,
therefore, not a prejudicial question.

Respondent's clear intent is to obtain a judicial declaration of nullity of his first marriage and thereafter to invoke
that very same judgment to prevent his prosecution for bigamy. He cannot have his cake and eat it too.
Otherwise, all that an adventurous bigamist has to do is to disregard Article 40 of the Family Code, contract a
subsequent marriage and escape a bigamy charge by simply claiming that the first marriage is void and that
the subsequent marriage is equally void for lack of a prior judicial declaration of nullity of the first. A party may
even enter into a marriage aware of the absence of a requisite - usually the marriage license - and thereafter
contract a subsequent marriage without obtaining a declaration of nullity of the first on the assumption that
the first marriage is void. Such scenario would render nugatory the provisions on bigamy. As succinctly held in
Landicho v. Relova:

(P)arties to a marriage should not be permitted to judge for themselves its nullity, only competent courts having
such authority. Prior to such declaration of nullity, the validity of the first marriage is beyond question. A party
who contracts a second marriage then assumes the risk of being prosecuted for bigamy. (Bobis vs Bobis
Digest, G.R. No. 138509, July 31, 2000)

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