Republic of the Philippines On January 8, 2009, petitioner received a Memorandum7 issued by the casino’s Branch Manager, Alexander
SUPREME COURT Ozaeta, informing him that he was being charged with Discourtesy towards a casino customer and directing him to
Manila
FIRST DIVISION
G.R. No. 190566 December 11, 2013
MARK JEROME S. MAGLALANG, Petitioner,
vs.
PHILIPPINE AMUSEMENT AND GAMING CORPORATION (PAGCOR), as represented by its
incumbent Chairman EFRAIM GENUINO, Respondent.
DECISION
VILLARAMA, JR., J.:
Before this Court is a petition1 for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as
amended, seeking the reversal of the Resolution2 dated September 30, 2009 issued by the Court of Appeals (CA)
in CA"".G.R. SP No. 110048, which outrightly dismissed the petition for certiorari filed by herein petitioner Mark
Jerome S. Maglalang (petitioner). Also assailed is the appellate court's Resolution3 dated November 26, 2009
which denied petitioner's motion for reconsideration.
The facts follow.
Petitioner was a teller at the Casino Filipino, Angeles City Branch, Angeles City, which was operated by
respondent Philippine Amusement and Gaming Corporation (PAGCOR), a government-owned or controlled
corporation existing by virtue of Presidential Decree (P.D.) No. 1869.4
Petitioner alleged that in the afternoon of December 13, 2008, while he was performing his functions as teller, a
lady customer identified later as one Cecilia Nakasato5 (Cecilia) approached him in his booth and handed to him
an undetermined amount of cash consisting of mixed ₱1,000.00 and ₱500.00 bills. There were 45 ₱1,000.00 and
ten ₱500.00 bills for the total amount of ₱50,000.00. Following casino procedure, petitioner laid the bills on the
spreading board. However, he erroneously spread the bills into only four clusters instead of five clusters worth
₱10,000.00 per cluster. He then placed markers for ₱10,000.00 each cluster of cash and declared the total amount
of ₱40,000.00 to Cecilia. Perplexed, Cecilia asked petitioner why the latter only dished out ₱40,000.00. She then
pointed to the first cluster of bills and requested petitioner to check the first cluster which she observed to be
thicker than the others. Petitioner performed a recount and found that the said cluster contained 20 pieces of
₱1,000.00 bills. Petitioner apologized to Cecilia and rectified the error by declaring the full and correct amount
handed to him by the latter. Petitioner, however, averred that Cecilia accused him of trying to shortchange her and
that petitioner tried to deliberately fool her of her money. Petitioner tried to explain, but Cecilia allegedly
continued to berate and curse him. To ease the tension, petitioner was asked to take a break. After ten minutes,
petitioner returned to his booth. However, Cecilia allegedly showed up and continued to berate petitioner. As a
result, the two of them were invited to the casino’s Internal Security Office in order to air their respective sides.
Thereafter, petitioner was required to file an Incident Report which he submitted on the same day of the incident.6
1 | AEP
explain within 72 hours upon receipt of the memorandum why he should not be sanctioned or dismissed. In
compliance therewith, petitioner submitted a letter-explanation8 dated January 10, 2009.
On March 31, 2009, petitioner received another Memorandum9 dated March 19, 2009, stating that the Board of
Directors of PAGCOR found him guilty of Discourtesy towards a casino customer and imposed on him a 30-day
suspension for this first offense. Aggrieved, on April 2, 2009, petitioner filed a Motion for Reconsideration10
seeking a reversal of the board’s decision and further prayed in the alternative that if he is indeed found guilty as
charged, the penalty be only a reprimand as it is the appropriate penalty. During the pendency of said motion,
petitioner also filed a Motion for Production11 dated April 20, 2009, praying that he be furnished with copies of
documents relative to the case including the recommendation of the investigating committee and the
Decision/Resolution of the Board supposedly containing the latter’s factual findings. In a letter-reply12 dated June
2, 2009, one Atty. Carlos R. Bautista, Jr. who did not indicate his authority therein to represent PAGCOR, denied
the said motion. Petitioner received said letter-reply on June 17, 2009.
Subsequently, on June 18, 2009, PAGCOR issued a Memorandum13 dated June 18, 2009 practically reiterating
the contents of its March 19, 2009 Memorandum. Attached therewith is another Memorandum14 dated June 8,
2009 issued by PAGCOR’s Assistant Vice President for Human Resource and Development, Atty. Lizette F.
Mortel, informing petitioner that the Board of Directors in its meeting on May 13, 2009 resolved to deny his
appeal for reconsideration for lack of merit. Petitioner received said memoranda on the same date of June 18,
2009.
On August 17, 2009, petitioner filed a petition15 for certiorari under Rule 65 of the 1997 Rules of Civil Procedure,
as amended, before the CA, averring that there is no evidence, much less factual and legal basis to support the
finding of guilt against him. Moreover, petitioner ascribed grave abuse of discretion amounting to lack or excess
of jurisdiction to the acts of PAGCOR in adjudging him guilty of the charge, in failing to observe the proper
procedure in the rendition of its decision and in imposing the harsh penalty of a 30-day suspension. Justifying his
recourse to the CA, petitioner explained that he did not appeal to the Civil Service Commission (CSC) because the
penalty imposed on him was only a 30-day suspension which is not within the CSC’s appellate jurisdiction. He
also claimed that discourtesy in the performance of official duties is classified as a light offense which is
punishable only by reprimand.
In its assailed Resolution16 dated September 30, 2009, the CA outrightly dismissed the petition for certiorari for
being premature as petitioner failed to exhaust administrative remedies before seeking recourse from the CA.
Invoking Section 2(1), Article IX-B of the 1987 Constitution,17 the CA held that the CSC has jurisdiction over
issues involving the employer-employee relationship in all branches, subdivisions, instrumentalities and agencies
of the Government, including government-owned or controlled corporations with original charters such as
PAGCOR. Petitioner filed his Motion for Reconsideration18 which the CA denied in the assailed Resolution19
dated November 26, 2009. In denying the said motion, the CA relied on this Court’s ruling in Duty Free
Philippines v. Mojica20 citing Philippine Amusement and Gaming Corp. v. CA,21 where this Court held as
follows:
It is now settled that, conformably to Article IX-B, Section 2(1), [of the 1987 Constitution] government-owned or
controlled corporations shall be considered part of the Civil Service only if they have original charters, as
distinguished from those created under general law.
PAGCOR belongs to the Civil Service because it was created directly by PD 1869 on July 11, 1983.
Consequently, controversies concerning the relations of the employee with the management of PAGCOR should
come under the jurisdiction of the Merit System Protection Board and the Civil Service Commission, conformably
to the Administrative Code of 1987.
Section 16(2) of the said Code vest[s] in the Merit System Protection Board the power inter alia to:
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.
Hence, this petition where petitioner argues that the CA committed grave and substantial error of judgment
1. IN OUTRIGHTLY DISMISSING THE PETITION FOR CERTIORARI FILED BY PETITIONER
AND IN DENYING THE LATTER’S MOTION FOR RECONSIDERATION[;]
2. IN RULING THAT THE CIVIL SERVICE COMMISSION HAS APPELLATE JURISDICTION
OVER THE SUSPENSION OF THE PETITIONER DESPITE THE FACT THAT THE PENALTY
INVOLVED IS NOT MORE THAN THIRTY (30) DAYS[;]
3. IN RESOLVING THE PETITION FOR CERTIORARI FILED BY PETITIONER IN A MANNER
WHICH IS UTTERLY CONTRARY TO LAW AND JURISPRUDENCE[;]
4. IN UNJUSTIFIABLY REFUSING TO RENDER A DECISION AS TO THE PROPRIETY OR
VALIDITY OF THE SUSPENSION OF THE PETITIONER BY THE RESPONDENT[;]
5. IN UNDULY REFUSING TO RENDER A DECISION DECLARING THAT THE ASSAILED
DECISIONS/RESOLUTIONS OF THE RESPONDENT ARE NOT SUPPORTED BY THE
EVIDENCE ON RECORD[; AND]
6. IN UNJUSTIFIABLY REFUSING TO RENDER A DECISION DECLARING THAT THE
ASSAILED DECISIONS/RESOLUTIONS OF RESPONDENT WERE ISSUED WITH GRAVE
ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION.22
Petitioner claims that the CA clearly overlooked the applicable laws and jurisprudence that provide that when the
penalty involved in an administrative case is suspension for not more than 30 days, the CSC has no appellate
jurisdiction over the said administrative case. As authority, petitioner invokes our ruling in Geronga v. Hon.
Varela23 which cited Section 47,24 Chapter 1, Subtitle A, Title I, Book V of Executive Order (E.O.) No. 292
otherwise known as The Administrative Code of 1987. Said Section 47 provides that the CSC may entertain
appeals only, among others, from a penalty of suspension of more than 30 days. Petitioner asserts that his case,
involving a 30-day suspension penalty, is not appealable to the CSC. Thus, he submits that his case was properly
brought before the CA via a petition for certiorari.25
On the other hand, PAGCOR alleges that petitioner intentionally omitted relevant matters in his statement of facts.
PAGCOR essentially claims that petitioner refused to apologize to Cecilia; that he treated Cecilia’s complaint with
arrogance; and that before taking the aforementioned 10-minute break, petitioner slammed the cash to the counter
window in giving it back to the customer. PAGCOR argues that the instant petition raises questions of fact which
are not reviewable in a petition for review on certiorari. PAGCOR maintains that the CA’s ruling was in
accordance with law and jurisprudence. Moreover, PAGCOR counters that petitioner’s remedy of appeal is limited
2 | AEP
as Section 37 of the Revised Uniform Rules on Administrative Cases in the Civil Service provides that a decision
rendered by heads of agencies whereby a penalty of suspension for not more than 30 days is imposed shall be final
and executory. PAGCOR opines that such intent of limiting appeals over such minor offenses is elucidated in the
Concurring Opinion of former Chief Justice Reynato S. Puno in CSC v. Dacoycoy26 and based on the basic
premise that appeal is merely a statutory privilege. Lastly, PAGCOR submits that the 30-day suspension meted on
petitioner is justified under its own Code of Discipline.27 Prescinding from the foregoing, the sole question for
resolution is: Was the CA correct in outrightly dismissing the petition for certiorari filed before it on the ground of
non-exhaustion of administrative remedies?
We resolve the question in the negative.
Our ruling in Public Hearing Committee of the Laguna Lake Development Authority v. SM Prime Holdings,
Inc.28 on the doctrine of exhaustion of administrative remedies is instructive, to wit:
Under the doctrine of exhaustion of administrative remedies, before a party is allowed to seek the intervention of
the court, he or she should have availed himself or herself of all the means of administrative processes afforded
him or her. Hence, if resort to a remedy within the administrative machinery can still be made by giving the
administrative officer concerned every opportunity to decide on a matter that comes within his or her jurisdiction,
then such remedy should be exhausted first before the court's judicial power can be sought. The premature
invocation of the intervention of the court is fatal to one’s cause of action. The doctrine of exhaustion of
administrative remedies is based on practical and legal reasons. The availment of administrative remedy entails
lesser expenses and provides for a speedier disposition of controversies. Furthermore, the courts of justice, for
reasons of comity and convenience, will shy away from a dispute until the system of administrative redress has
been completed and complied with, so as to give the administrative agency concerned every opportunity to correct
its error and dispose of the case.
However, the doctrine of exhaustion of administrative remedies is not absolute as it admits of the following
exceptions:
(1) when there is a violation of due process; (2) when the issue involved is purely a legal question; (3) when the
administrative action is patently illegal amounting to lack or excess of jurisdiction; (4) when there is estoppel on
the part of the administrative agency concerned; (5) when there is irreparable injury; (6) when the respondent is a
department secretary whose acts as an alter ego of the President bears the implied and assumed approval of the
latter; (7) when to require exhaustion of administrative remedies would be unreasonable; (8) when it would
amount to a nullification of a claim; (9) when the subject matter is a private land in land case proceedings; (10)
when the rule does not provide a plain, speedy and adequate remedy, and (11) when there are circumstances
indicating the urgency of judicial intervention, and unreasonable delay would greatly prejudice the complainant;
(12) where no administrative review is provided by law; (13) where the rule of qualified political agency applies
and (14) where the issue of non-exhaustion of administrative remedies has been rendered moot.29
The case before us falls squarely under exception number 12 since the law per se provides no administrative
review for administrative cases whereby an employee like petitioner is covered by Civil Service law, rules and
regulations and penalized with a suspension for not more than 30 days.
Section 37 (a) and (b) of P.D. No. 807, otherwise known as the Civil Service Decree of the Philippines, provides
for the unavailability of any appeal:
Section 37. Disciplinary Jurisdiction.
 (a) 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.
(b) The heads of departments, 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 department head. (Emphasis supplied.)
Similar provisions are reiterated in the aforequoted Section 4730 of E.O. No. 292 essentially providing that cases
of this sort are not appealable to the CSC. Correlatively, we are not unaware of the Concurring Opinion of then
Chief Justice Puno in CSC v. Dacoycoy,31 where he opined, to wit:
In truth, the doctrine barring appeal is not categorically sanctioned by the Civil Service Law.1âwphi1 For what
the law declares as "final" are decisions of heads of agencies involving suspension for not more than thirty (30)
days or fine in an amount not exceeding thirty (30) days salary. But there is a clear policy reason for declaring
these decisions final. These decisions involve minor offenses. They are numerous for they are the usual offenses
committed by government officials and employees. To allow their multiple level appeal will doubtless overburden
the quasijudicial machinery of our administrative system and defeat the expectation of fast and efficient action
from these administrative agencies. Nepotism, however, is not a petty offense. Its deleterious effect on government
cannot be over-emphasized. And it is a stubborn evil. The objective should be to eliminate nepotic acts, hence,
erroneous decisions allowing nepotism cannot be given immunity from review, especially judicial review. It is thus
non sequitur to contend that since some decisions exonerating public officials from minor offenses can not be
appealed, ergo, even a decision acquitting a government official from a major offense like nepotism cannot also be
appealed.
certiorari ascribing grave abuse of discretion, amounting to lack or excess of jurisdiction on the part of PAGCOR,
not an appeal. Suffice it to state that an appeal and a special civil action such as certiorari under Rule 65 are
entirely distinct and separate from each other. One cannot file petition for certiorari under Rule 65 of the Rules
where appeal is available, even if the ground availed of is grave abuse of discretion. A special civil action for
certiorari under Rule 65 lies only when there is no appeal, or plain, speedy and adequate remedy in the ordinary
course of law. Certiorari cannot be allowed when a party to a case fails to appeal a judgment despite the
availability of that remedy, as the same should not be a substitute for the lost remedy of appeal. The remedies of
appeal and certiorari are mutually exclusive and not alternative or successive.33
In sum, there being no appeal or any plain, speedy, and adequate remedy in the ordinary course of law in view of
petitioner's allegation that P AGCOR has acted without or in excess of jurisdiction, or with grave abuse of
discretion amounting to lack or excess of jurisdiction, the CA's outright dismissal of the petition for certiorari on
the basis of non-exhaustion of administrative remedies is bereft of any legal standing and should therefore be set
aside.
Finally, as a rule, a petition for certiorari under Rule 65 is valid only when the question involved is an error of
jurisdiction, or when there is grave abuse of discretion amounting to lack or excess of jurisdiction on the part of
the court or tribunals exercising quasi-judicial functions. Hence, courts exercising certiorari jurisdiction should
refrain from reviewing factual assessments of the respondent court or agency. Occasionally, however, they are
constrained to wade into factual matters when the evidence on record does not support those factual findings; or
when too much is concluded, inferred or deduced from the bare or incomplete facts appearing on record.34
Considering the circumstances and since this Court is not a trier of facts, 35 remand of this case to the CA for its
judicious resolution is in order.
WHEREFORE, the petition is PARTLY GRANTED. The Resolutions dated September 30, 2009 and November
26, 2009 of the Court of Appeals in CA-G.R. SP No. 110048 are hereby REVERSED and SET ASIDE. The
instant case is REMANDED to the Court of Appeals for further proceedings.
No pronouncement as to costs.
SO ORDERED.

Nevertheless, decisions of administrative agencies which are declared final and unappealable by law are still
subject to judicial review. In Republic of the Phils. v. Francisco,32 we held:

Since the decision of the Ombudsman suspending respondents for one (1) month is final and unappealable, it
follows that the CA had no appellate jurisdiction to review, rectify or reverse the same. The Ombudsman was not
estopped from asserting in this Court that the CA had no appellate jurisdiction to review and reverse the decision
of the Ombudsman via petition for review under Rule 43 of the Rules of Court. This is not to say that decisions of
the Ombudsman cannot be questioned. Decisions of administrative or quasi-administrative agencies which are
declared by law final and unappealable are subject to judicial review if they fail the test of arbitrariness, or
upon proof of gross abuse of discretion, fraud or error of law. When such administrative or quasi-judicial
bodies grossly misappreciate evidence of such nature as to compel a contrary conclusion, the Court will not
hesitate to reverse the factual findings. Thus, the decision of the Ombudsman may be reviewed, modified or
reversed via petition for certiorari under Rule 65 of the Rules of Court, on a finding that it had no
jurisdiction over the complaint, or of grave abuse of discretion amounting to excess or lack of jurisdiction.It
bears stressing that the judicial recourse petitioner availed of in this case before the CA is a special civil action for
3 | AEP

EN BANC
G.R. No. 137266 December 5, 2001
ANTONIO M. BERNARDO, ERNESTO A. DOMINGO, JR. and JESUS C. CRUZ, petitioners,
vs.
BENJAMIN S. ABALOS, SR., BENJAMIN "BENHUR" D. ABALOS, JR., DR. EDEN C. DIAZ, ROMEO
F. ZAPANTA, ARCADIO S. DE VERA and THE COMMISSION ON ELECTIONS, respondents.
SANDOVAL-GUTIERREZ, J.:
This is a petition for certiorari1 seeking the nullification of Resolution No. 98-3208 of the Commission on
Elections (COMELEC) En Banc promulgated on December 1, 1998 dismissing the complaint for vote buying filed
by petitioners against respondents.1âwphi1.nêt
On April 21, 1998, petitioners Antonio M. Bernardo M. Bernardo, Ernesto A. Domingo, Jr. and Jesus C. Cruz
filed with the COMELEC a criminal complaint against respondents Benjamin S. Abalos, Sr., Benjamin C. Abalos,
Jr., Dr. Eden C. Diaz, Romeo Zapanta and Arcadio de Vera for vote buying in violation of Section 261,
paragraphs (a), (b) and (j) of the Omnibus Election Code (OEC), in relation to Section 28 of Republic Act 6646
and Section 68 of the OEC. The complaint, docketed as E.O. Case No. 98-110,2 alleged that:
1. On April 14, 1998 (Tuesday), respondent Mandaluyong City Mayor Benjamin S. Abalos, Sr., and his
son respondent Benjamin "Benhur" C. Abalos, Jr., candidate for City Mayor of the same city in the May
11, 1998 elections, conspiring with respondents Dr. Eden C. Diaz, Schools Division Superintendent,
Romeo F. Zapanta, Assistant Schools Division Superintendent, and Arcadio de Vera, President,
Mandaluyong Federation of Public School Teachers, sponsored, arranged and conducted an all-expense-
free transportation, food and drinks affair for the Mandaluyong City public school teachers, registered
voters of said city, at the Tayabas Bay Beach Resort, Sariaya, Quezon Province.
2. Among the identified public school teachers present, brought in around twelve (12) buses, were
Corazon Mayoya, principal of Highway Hills Elementary School, her Assistant Principal of Highway
Hills Elementary School, her Assistant Principal and Mr. Dante del Remigio; Mrs. Diaz Principal of
Mandaluyong City High School and Mr. Alvia; Mrs. Parillo, Andres Bonifacio Elementary School; Mrs.
Gregoria Ignacio, Principal of Doña Pilar Gonzaga Elementary School; Ms. Magsalin, Principal of
Mandaluyong Science High School and Mrs. Rita Bondayril; Mrs. De Vera, Fabella Elementary School;
Ms. Anselmo, Principal of Isaac Lopez Elementary School and Mrs. Fayton; Mrs. Sylvia Liwanag,
District Supervisor, District II, Mrs. Nalaonan, Principal of Amado T. Reyes Elementary School; Mrs.
Teresita Vicencio, Mandaluyong City Elemtary School; Officers of the Mandaluyong Federation of
Public School Teachers namely; Mrs. Erlinda Ilagan, Treasurer; Ms. Nancy de Leon, Auditor; Ms.
Fortunata Gondran, PRO; Mr. Nenito Pumariga, Business Manager; Mr. Jose Guerrero, Sgt.-at-arms;
and Board Members Ms. Virginia Carillo, Ms. Wilma Fernandez, Mr Arturo Morales and Mr. Teddy
Angeles.
4 | AEP
3. During the whole-day affair, the background music loudly and repeatedly played over the sound
system was the political jingle advertisement of Mandaluyong City candidate for Mayor, Benjamin
"Benhur" Abalos, Jr., sang to the tune of the song 'SHALALA LALA'.
4. Some of the participants wore T-shirts with the name of candidate "Benhur" Abalos, Jr., printed in
oversized colored letters.
5. Mayor Benjamin Abalos, Sr. delivered a speech wherein he offered and promised the Mandaluyong
City public school teachers and employees a "hazard" pay of P1,000.00, and increasing their allowances
from P1,500.00 to P2,000.00 for food, or with a total of P3,000.00 which they will get by the end of the
month.
6. The offers and promises to said public school teachers, who are members of the Board of Election
Inspectors of Mandaluyong City and registered voters thereat, were made a few weeks before the
election to induce or unduly influence the said teachers and the public in general (the other guests) to
vote for the candidacy of Benjamin "Benhur" Abalos, Jr.,
7. The offers and promises of Mayor Abalos, Sr., and the enthusiastic acceptance of said monetary
increase of allowances by the public school teachers and employees of Mandaluyong City, is a violation
of Section 261 pars. (a), (b) and (j) of the Omnibus Election Code against vote-buying and vote-selling.3
The Director4 of the Law Department of the COMELEC conducted a preliminary investigation. All the private
respondents filed separate counter-affidavits5 with prayer to dismiss the complaint.
On November 26, 1998, the Director of the Law Department submitted his findings to the COMELEC En Banc
recommending that the complaint be dismissed for insufficiency of evidence.
On December 1, 1998, the COMELEC En Banc issued the assailed Resolution No. 98-32086 dismissing the
complaint "for insufficiency of evidence to establish a prima facie case,"
"Considering that this complaint, being criminal in nature, must have all its allegations supported by
direct, strong, convincing and indubitable evidence; and that the submitted evidence of the complainant
are mere self-serving statements and uncorroborated audio and visual recordings and a photograph; and
considering further that the evidence of the respondents have more probative value and believable than
the evidence of said complainants; and that the burden of proof lies with the complainants and not with
respondents."7
On February 09, 1999, petitioners, without first submitting a motion for reconsideration, filed the instant petition
with this Court.
They alleged thereon that the COMELEC En Banc, in issuing Resolution No. 98-3208 dated December 1, 1998,
acted "with apparent grave abuse of dicretion."8
The petition must fail.
Petitioners did not exhaust all the remedies available to them at the COMELEC level. Specifically, they did not basis for an investigation to be immediately conducted by the Commission, directly or through its duly
seek a reconsideration of the assailed COMELEC En Banc Resolution as required by Section 1, Rule 13 of the authorized legal officers, under Section 68 or Section 265 of said Batas Pambansa Blg. 881.1âwphi1.nêt
1993 COMELEC Rules of Procedure, thus:
x x x." (Emphasis ours)
"Section 1. What Pleadings are not Allowed. - The following pleadings are
not allowed: Petitioners' complaint expressly states that no supporting affidavits were submitted by the complaining witness14
to sustain their charge of vote buying. Suffice it to state that the absence of such supporting affidavits shows the
xxx frailty of petitioners' complaint. Indeed, it is vulnerable to dismissal.

d) motion for reconsideration of an en banc ruling, resolution, order or WHEREFORE, the instant petition is DISMISSED.
decision except in election offense cases;
SO ORDERED.
x x x." (Emphasis ours)

It is not disputed that petitioners' complaint before the COMELEC involves an election offense. But in this
petition, they conveniently kept silent why they directly elevated to this Court the questioned Resolution without
first filing a motion for reconsideration with the COMELEC En Banc. It was only after the respondents had filed
their comment on the petition and called this Court's attention to petitioners' failure to comply with Section 1 of
Rule 13 that they, in their Consolidated Reply, advanced the excuse that they "deemed it best not seek any further
dilatory motion for reconsideration' …, even if allowed by Sec. 1 (d) of COMELEC Rule 13."9

Petitioners' failure to file the required motion for reconsideration utterly disregarded the COMELEC Rules
intended "to achieve an orderly, just, expeditious and inexpensive determination and disposition of every action
and proceeding brought before the Commission."10

Contrary to petitioners' statement that a resort to a motion for reconsideration is "dilatory, " it bears stressing that
the purpose of the said motion is to give the COMELEC an opportunity to correct the error imputed to it. 11 If the
error is immediately corrected by way of a motion for reconsideration, then it is the most expeditious and
inexpensive recourse. But if the COMELEC refuses to correct a patently erroneous act, then it commits a grave
abuse of discretion justifying a recourse by the aggrieved party to a petition for certiorari.

A petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure, as amended, can only be resorted to if
"there is no appeal, or any plain, speedy, and adequate remedy in the ordinary course of law."12 Having failed to
file the required motion for reconsideration of the challenged Resolution, petitioners' instant petition is certainly
premature.13 Significantly, they have not raised any plausible reason for their direct recourse to this Court.

In its assailed Resolution, the COMELEC cited a valid reason for dismissing petitioners' complaint against private
respondents for vote buying. The COMELEC found that the evidence of the respondents have "more probative
value and believable than the evidence of the complainants;" and that the evidence submitted by petitioners are
"mere self-serving statements and uncorroborated audio and visual recording and a photograph."

Moreover, Section 28 of Republic Act 6646 provides:

"SEC. 28. Prosecution of Vote-buying and Vote-selling. - The representation of a complaint for
violations of paragraph (a) or (b) of Section 261 of Batas Pambansa Blg. 881 supported by affidavits of
complaining witnesses attesting to the offer or promise by or of the voter's acceptance of money or
other consideration from the relatives, leaders or sympathizers of candidate, shall be sufficient
5 | AEP
 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 191427 May 30, 2011
UNIVERSAL ROBINA CORP. (CORN DIVISION), Petitioner,
vs.
LAGUNA LAKE DEVELOPMENT AUTHORITY, Respondent.
DECISION
CARPIO MORALES, J.:
The present petition for review on certiorari assails the Court of Appeals Decision1 dated October 27, 2009 and
Resolution dated February 23, 2010 in CA-G. R. SP No. 107449.
Universal Robina Corp. (petitioner) is engaged in, among other things, the manufacture of animal feeds at its plant
in Bagong Ilog, Pasig City.
Laguna Lake Development Authority (LLDA), respondent, through its Pollution Control Division – Monitoring
and Enforcement Section, after conducting on March 14, 2000 a laboratory analysis of petitioner’s corn oil
refinery plant’s wastewater, found that it failed to comply with government standards provided under Department
of Environment and Natural Resources (DENR) Administrative Orders (DAOs) Nos. 34 and 35, series of 1990.
LLDA later issued on May 30, 2000 an Ex-Parte Order requiring petitioner to explain why no order should be
issued for the cessation of its operations due to its discharge of pollutive effluents into the Pasig River and why it
was operating without a clearance/permit from the LLDA.
Still later, the LLDA, after receiving a phone-in complaint conducted on August 31, 2000, another analysis of
petitioner’s wastewater, which showed its continued failure to conform to its effluent standard in terms of Total
Suspended Solids (TSS), Biochemical Oxygen Demand (BOD), Color and Oil/Grease.
Hearings on petitioner’s pollution case were thereafter commenced on March 1, 2001.
Despite subsequent compliance monitoring and inspections conducted by the LLDA, petitioner’s wastewater
failed to conform to the parameters set by the aforementioned DAOs.
In early 2003, petitioner notified LLDA of its plan to upgrade the wastewater treatment facility (WTF) of its corn
oil refinery plant in an effort to comply with environmental laws, an upgrade that was completed only in 2007.
On May 9, 2007 on its request,2 a re-sampling of petitioner’s wastewater was conducted which showed that
petitioner’s plant finally complied with government standards.
6 | AEP
Petitioner soon requested for a reduction of penalties, by Manifestation and Motion3 filed on August 24, 2007 to
which it attached copies of its Daily Operation Reports and Certifications4 to show that accrued daily penalties
should only cover a period of 560 days.
After conducting hearings, the LLDA issued its Order to Pay5 (OP) dated January 21, 2008, the pertinent portion
of which reads:
After careful evaluation of the case, respondent is found to be discharging pollutive wastewater computed in two
periods reckoned from March 14, 2000 – the date of initial sampling until November 3, 2003 – the date it
requested for a re-sampling covering 932 days in consideration of the interval of time when subsequent monitoring
was conducted after an interval of more than 2 years and from March 15, 2006 – the date when re-sampling was
done until April 17, 2007 covering 448 days6 for a total of 1,247 days.
WHEREFORE, premises considered, respondent is hereby ordered to pay within fifteen (15) days from receipt
hereof the accumulated daily penalties amounting to a total of Pesos: One Million Two Hundred Forty-Seven
(Thousand) Pesos Only (PHP 1,247,000.00) prior to dismissal of the case and without prejudice of filing another
case for its subsequent violations. (emphasis and underscoring supplied)
Petitioner moved to reconsider, praying that it be ordered to pay only accumulated daily penalties in the sum of
Five Hundred Sixty Thousand (₱560,000) Pesos7 on grounds that the LLDA erred in first, adopting a straight
computation of the periods of violation – based on the flawed assumption that petitioner was operating on a daily
basis − without excluding, among others, the period during which the LLDA Laboratory underwent rehabilitation
work from December 1, 2000 to June 30, 2001 (covering 212 days); and second, in disregarding the Daily
Operation Reports and Certifications which petitioner submitted to attest to the actual number of its operating
days, i.e., 560 days.
By Order8 of July 11, 2008, the LLDA denied petitioner’s motion for reconsideration and reiterated its order to
pay the aforestated penalties, disposing of the issues thusly:
On the first issue, while it is true that the Authority failed to state in its OP dated 21 January 2008 the basis for
actual computation of the accumulated daily penalties, the Authority would like to explain that its computation
was based on the following, to wit:
The computation of accumulated daily penalties was reckoned period [sic] from 14 March 2000 – the date of
initial sampling to 03 November 2003 – the date when its letter request for re-sampling was received which covers
932 days computed at 6 days per week operation as reflected in the Reports of Inspection. Since subsequent
inspection conducted after two (2) years and four (4) months, such period was deducted from the computation.
Likewise, the period when the LLDA Laboratory was rehabilitated from December 1, 2000 to June 30, 2001 was
also deducted with a total of Two Hundred Twelve (212) days.
On the second claim, the same cannot be granted for lack of legal basis since the documents submitted are self-
serving. The period from 15 March 2006 to 17 April 2007 was computed from the date of re-sampling when it
failed to conform to the standards set by law up to the date of receipt of its letter request for re-sampling prior to
its compliance on May 9, 2007. The period covers 342 days.
Hence, respondent is found to be discharging pollutive wastewater not conforming with the standards set by law
computed from March 14, 2000 – November 3, 2003 covering 932 days and from March 15, 2006 – April 17,
2007 covering 342 days for a total of 1,274 days.
Petitioner challenged by certiorari the twin orders before the Court of Appeals, attributing to LLDA grave abuse of
discretion in disregarding its documentary evidence, and maintaining that the lack of any plain, speedy or adequate
remedy from the enforcement of LLDA’s order justified such recourse as an exception to the rule requiring
exhaustion of administrative remedies prior to judicial action.
By Decision of October 27, 2009 the appellate court affirmed both LLDA orders, which it found to be amply
supported by substantial evidence, the computation of the accumulated daily penalties being in accord with
prevailing DENR guidelines. The appellate court held that while petitioner may have offered documentary
evidence to support its assertion that the days when it did not operate must be excluded from the computation, the
LLDA has the prerogative to disregard the same for being unverified, hence, unreliable.
The appellate court went on to chide petitioner’s petition for certiorari as premature since the law provides for an
appeal from decisions or orders of the LLDA to the DENR Secretary or the Office of the President, a remedy
which should have first been exhausted before invoking judicial intervention.9
Petitioner’s motion for reconsideration having been denied by Resolution of February 23, 2010, it filed the present
petition.
Petitioner cites deprivation of due process and lack of any plain, speedy or adequate remedy as grounds which
exempted it from complying with the rule on exhaustion of administrative remedies.
The petition fails.
The doctrine of exhaustion of administrative remedies is a cornerstone of our judicial system. The thrust of the
rule is that courts must allow administrative agencies to carry out their functions and discharge their
responsibilities within the specialized areas of their respective competence.10 The rationale for this doctrine is
obvious. It entails lesser expenses and provides for the speedier resolution of controversies. Comity and
convenience also impel courts of justice to shy away from a dispute until the system of administrative redress has
been completed.11
Executive Order No. 19212 (EO 192) was issued on June 10, 1987 for the salutary purpose of reorganizing the
DENR, charging it with the task of promulgating rules and regulations for the control of water, air and land
pollution as well as of promulgating ambient and effluent standards for water and air quality including the
allowable levels of other pollutants and radiations. EO 192 also created the Pollution Adjudication Board under
the Office of the DENR Secretary which took over the powers and functions of the National Pollution Control
Commission with respect to the adjudication of pollution cases, including the latter’s role as arbitrator for
determining reparation, or restitution of the damages and losses resulting from pollution.13
Petitioner had thus available administrative remedy of appeal to the DENR Secretary. Its contrary arguments to
show that an appeal to the DENR Secretary would be an exercise in futility as the latter merely adopts the LLDA’s
findings is at best, speculative and presumptuous.
As for petitioner’s invocation of due process, it fails too. The appellate court thus aptly brushed aside this claim, in
this wise:
Due process, as a constitutional precept, does not always and in all situations require a trial-type proceeding. Due
process is satisfied when a person is notified of the charge against him and given an opportunity to explain or
7 | AEP
defend himself. In administrative proceedings, the filing of charges and giving reasonable opportunity for the
person so charged to answer the accusations against him constitute the minimum requirements of due process. The
essence of due process is simply to be heard, or as applied to administrative proceedings, an opportunity to explain
one’s side, or an opportunity to seek a reconsideration of the action or ruling complained of.
. . . Administrative due process cannot be fully equated with due process in its strict judicial sense for it is enough
that the party is given the chance to be heard before the case against him is decided.
Here, petitioner URC was given ample opportunities to be heard – it was given show cause orders and allowed to
participate in hearing to rebut the allegation against it of discharging pollutive wastewater to the Pasig River, it
was given the chance to present evidences in support of its claims, it was notified of the assailed "Order to Pay,"
and it was allowed to file a motion for reconsideration. Given these, we are of the view that the minimum
requirements of administrative due process have been complied with in this case.14 (emphasis in the original)
In fine, the assailed LLDA orders of January 21, 2008 and July 11, 2008 correctly reckoned the two periods within
which petitioner was found to have continued discharging pollutive wastewater and applied the penalty as
provided for under Article VI, Section 32 of LLDA Resolution No. 33, Series of 1996.15 LLDA’s explanation that
behind its inclusion of certain days in its computation of the imposable penalties – that it had already deducted not
just the period during which the LLDA Laboratory underwent rehabilitation work from December 1, 2000 to June
30, 2001 (covering 212 days) but had also excluded from the computation the period during which no inspections
or compliance monitorings were conducted (a period covering two years and four months) is well-taken.
It is noted that during the hearing on June 19, 2007, the LLDA gave petitioner the opportunity "to submit within
fifteen (15) days….any valid documents to show proof of its non-operating dates that would be necessary for the
possible reduction of the accumulated daily penalties,"16 but petitioner failed to comply therewith.
As earlier noted, petitioner filed a Manifestation and Motion to which it attached Daily Operation Reports and
Certifications, which voluminous documents were, however, unverified in derogation of Rule X, Section 217 of the
2004 Revised Rules, Regulations and Procedures Implementing Republic Act No. 4850. Absent such verification,
the LLDA may not be faulted for treating such evidence to be purely self-serving.
Respecting LLDA’s decision not to attach any evidentiary weight to the Daily Operation Reports or Certifications,
recall that the LLDA conducted an analysis of petitioner’s wastewater discharge on August 31, 2000, upon
receiving a phone-in complaint. And it conducted too an analysis on May 3, 2002 in the course of periodic
compliance monitoring. The Daily Operation Reports for both August 31, 200018 and May 3, 200219 submitted by
petitioner clearly manifest that the plant did not operate on those dates. On the other hand, LLDA’s Investigation
Report and Report of Inspection20 dated August 31, 2000 and May 3, 2002, respectively, disclose otherwise.
Petitioner never disputed the factual findings reflected in these reports. Thus spawns doubts on the veracity and
accuracy of the Daily Operation Reports.lawphi1
Petitioner asserts that LLDA had not credited it for undertaking remedial measures to rehabilitate its wastewater
treatment facility, despite the prohibitive costs and at a time when its income from the agro-industrial business was
already severely affected by a poor business climate; and that the enforcement of the assailed LLDA orders
amounted to a gross disincentive to its business.
Without belaboring petitioner’s assertions, it must be underscored that the protection of the environment,
including bodies of water, is no less urgent or vital than the pressing concerns of private enterprises, big or small.
Everyone must do their share to conserve the national patrimony’s meager resources for the benefit of not only
this generation, but of those to follow. The length of time alone it took petitioner to upgrade its WTF (from 2003
to 2007), a move arrived at only under threat of continuing sanctions, militates against any genuine concern for the
well-being of the country’s waterways.

WHEREFORE, the petition is DENIED. The October 27, 2009 Decision and the February 23, 2010 Resolution, of
the Court of Appeals in CA-G. R. SP No. 107449, are AFFIRMED.

SO ORDERED.

8 | AEP

G.R. No. 205728
Republic of the Philippines Estrada, JV Angara, Juan Edgardo
SUPREME COURT
Manila Honasan, Gregorio Casiño, Teddy
Magsaysay, Mitos Cayetano, Alan Peter
EN BANC
Pimentel, Koko Enrile, Jackie
January 21, 2015
Trillanes, Antonio Escudero, Francis

THE DIOCESE OF BACOLOD, REPRESENTED BY THE MOST REV. BISHOP VICENTE M. Villar, Cynthia Hontiveros, Risa
NAVARRA and THE BISHOP HIMSELF IN HIS PERSONAL CAPACITY, Petitioners,
vs. Party List Buhay Legarda, Loren
COMMISSION ON ELECTIONS AND THE ELECTION OFFICER OF BACOLOD CITY, ATTY. Party List Ang Pamilya Party List Gabriela
MAVIL V. MAJARUCON, Respondents.
Party List Akbayan
DECISION
Party List Bayan Muna

LEONEN, J.: Party List Anak Pawis

"The Philippines is a democratic and republican State. Sovereignty resides in the people and all government
authority emanates from them." – Article II, Section 1, Constitution
All governmental authority emanates from our people. No unreasonable restrictions of the fundamental and
preferred right to expression of the electorate during political contests no matter how seemingly benign will be
tolerated.
This case defines the extent that our people may shape the debates during elections. It is significant and of first
impression. We are asked to decide whether the Commission on Elections (COMELEC) has the competence to
limit expressions made by the citizens — who are not candidates — during elections.
Before us is a special civil action for certiorari and prohibition with application for preliminary injunction and
temporary restraining order1 under Rule 65 of the Rules of Court seeking to nullify COMELEC’s Notice to
Remove Campaign Materials2 dated February 22, 2013 and letter3 issued on February 27, 2013.
The facts are not disputed.
During oral arguments, respondents conceded that the tarpaulin was neither sponsored nor paid for by any
candidate. Petitioners also conceded that the tarpaulin contains names ofcandidates for the 2013 elections, but not
of politicians who helped in the passage of the RH Law but were not candidates for that election.
On February 22, 2013, respondent Atty. Mavil V. Majarucon, in her capacity as Election Officer of Bacolod City,
issued a Notice to Remove Campaign Materials8 addressed to petitioner Most Rev. Bishop Vicente M. Navarra.
The election officer ordered the tarpaulin’s removal within three (3) days from receipt for being oversized.
COMELEC Resolution No. 9615 provides for the size requirement of two feet (2’) by three feet (3’).9
On February 25, 2013, petitioners replied10 requesting, among others, that (1) petitioner Bishop be given a
definite ruling by COMELEC Law Department regarding the tarpaulin; and (2) pending this opinion and the
availment of legal remedies, the tarpaulin be allowed to remain.11
On February 27, 2013, COMELEC Law Department issued a letter12 ordering the immediate removal of the
tarpaulin; otherwise, it will be constrained to file an election offense against petitioners. The letter of COMELEC
Law Department was silenton the remedies available to petitioners. The letter provides as follows:

On February 21, 2013, petitioners posted two (2) tarpaulins within a private compound housing the San Sebastian
Cathedral of Bacolod. Each tarpaulin was approximately six feet (6') by ten feet (10') in size. They were posted on
the front walls of the cathedral within public view. The first tarpaulin contains the message "IBASURA RH Law"
referring to the Reproductive Health Law of 2012 or Republic Act No. 10354. The second tarpaulin is the subject
of the present case.4 This tarpaulin contains the heading "Conscience Vote" and lists candidates as either "(Anti-
RH) Team Buhay" with a check mark, or "(Pro-RH) Team Patay" with an "X" mark.5 The electoral candidates
were classified according to their vote on the adoption of Republic Act No. 10354, otherwise known as the RH
Law.6 Those who voted for the passing of the law were classified by petitioners as comprising "Team Patay,"
while those who voted against it form "Team Buhay":7
Dear Bishop Navarra:
It has reached this Office that our Election Officer for this City, Atty. Mavil Majarucon, had already given you
notice on February 22, 2013 as regards the election propaganda material posted on the church vicinity promoting
for or against the candidates and party-list groups with the following names and messages, particularly described
as follows:
Material size : six feet (6’) by ten feet (10’)

Description : FULL COLOR TARPAULIN

TEAM BUHAY TEAM PATAY
9 | AEP
 Image of : SEE ATTACHED PICTURES The issues, which also served as guide for the oral arguments, are:20

Message : CONSCIENCE VOTE (ANTI RH) TEAM I.

BUHAY; (PRO RH) TEAM PATAY WHETHER THE 22 FEBRUARY 2013 NOTICE/ORDER BY ELECTION OFFICER MAJARUCON AND THE
27 FEBRUARY 2013 ORDER BY THE COMELEC LAW DEPARTMENT ARE CONSIDERED
Location : POSTED ON THE CHURCH VICINITY JUDGMENTS/FINAL ORDERS/RESOLUTIONS OF THE COMELEC WHICH WOULD WARRANT A
OF THE DIOCESE OF BACOLOD CITY REVIEW OF THIS COURT VIA RULE 65 PETITION[;]

The three (3) – day notice expired on February 25, 2013. A. WHETHER PETITIONERS VIOLATED THE HIERARCHY OF COURTS DOCTRINE
AND JURISPRUDENTIAL RULES GOVERNING APPEALS FROM COMELEC
DECISIONS;
Considering that the above-mentioned material is found to be in violation of Comelec Resolution No. 9615
promulgated on January 15, 2013 particularly on the size (even with the subsequent division of the said tarpaulin
into two), as the lawful size for election propaganda material is only two feet (2’) by three feet (3’), please B. ASSUMING ARGUENDO THAT THE AFOREMENTIONED ORDERS ARE NOT
order/cause the immediate removal of said election propaganda material, otherwise, we shall be constrained to file CONSIDERED JUDGMENTS/FINAL ORDERS/RESOLUTIONS OF THE COMELEC,
an election offense case against you. WHETHER THERE ARE EXCEPTIONAL CIRCUMSTANCES WHICH WOULD ALLOW
THIS COURT TO TAKE COGNIZANCE OF THE CASE[;]
We pray that the Catholic Church will be the first institution to help the Commission on Elections inensuring the
conduct of peaceful, orderly, honest and credible elections. II.

Thank you and God Bless! WHETHER IT IS RELEVANT TODETERMINE WHETHER THE TARPAULINS ARE "POLITICAL
ADVERTISEMENT" OR "ELECTION PROPAGANDA" CONSIDERING THAT PETITIONER IS NOT A
POLITICAL CANDIDATE[;]
[signed]
ATTY. ESMERALDA AMORA-LADRA
Director IV13 III.

Concerned about the imminent threatof prosecution for their exercise of free speech, petitioners initiated this case WHETHER THE TARPAULINS ARE A FORM OR EXPRESSION (PROTECTED SPEECH), OR ELECTION
through this petition for certiorari and prohibition with application for preliminary injunction and temporary PROPAGANDA/POLITICAL ADVERTISEMENT[;]
restraining order.14 They question respondents’ notice dated February 22, 2013 and letter issued on February 27,
2013. They pray that: (1) the petition be given due course; (2) a temporary restraining order (TRO) and/or a writ A. ASSUMING ARGUENDO THAT THE TARPAULINS ARE A FORM OF
of preliminary injunction be issued restraining respondents from further proceeding in enforcing their orders for EXPRESSION, WHETHER THE COMELEC POSSESSES THE AUTHORITY TO
the removal of the Team Patay tarpaulin; and (3) after notice and hearing, a decision be rendered declaring the REGULATE THE SAME[;]
questioned orders of respondents as unconstitutional and void, and permanently restraining respondents from
enforcing them or any other similar order.15 B. WHETHER THIS FORM OF EXPRESSION MAY BE REGULATED[;]

After due deliberation, this court, on March 5, 2013, issued a temporary restraining order enjoining respondents IV.
from enforcing the assailed notice and letter, and set oral arguments on March 19, 2013.16
WHETHER THE 22 FEBRUARY 2013 NOTICE/ ORDER BY ELECTION OFFICER MAJARUCON AND
On March 13, 2013, respondents filed their comment17 arguing that (1) a petition for certiorari and prohibition THE 27 FEBRUARY 2013 ORDER BY THE COMELEC LAW DEPARTMENT VIOLATES THE PRINCIPLE
under Rule 65 of the Rules of Court filed before this court is not the proper remedy to question the notice and OF SEPARATION OF CHURCH AND STATE[;] [AND]
letter of respondents; and (2) the tarpaulin is an election propaganda subject to regulation by COMELEC pursuant
to its mandate under Article IX-C, Section 4 of the Constitution. Hence, respondents claim that the issuances
ordering its removal for being oversized are valid and constitutional.18 V.

During the hearing held on March 19, 2013, the parties were directed to file their respective memoranda within 10 WHETHER THE ACTION OF THE PETITIONERS IN POSTING ITS TARPAULIN VIOLATES THE
days or by April 1, 2013, taking into consideration the intervening holidays.19 CONSTITUTIONAL PRINCIPLE OF SEPARATION OF CHURCH AND STATE.

10 | AEP
 I This Court, however, has ruled in the past that this procedural requirement [of filing a motion for reconsideration]
PROCEDURAL ISSUES
I.A
This court’s jurisdiction over COMELEC cases
Respondents ask that this petition be dismissed on the ground that the notice and letter are not final orders,
decisions, rulings, or judgments of the COMELEC En Banc issued in the exercise of its adjudicatory powers,
reviewable via Rule 64 of the Rules of Court.21
Rule 64 is not the exclusive remedy for all acts of the COMELEC. Rule 65 is applicable especially to raise
objections relating to a grave abuse of discretion resulting in the ouster of jurisdiction.22 As a special civil action,
there must also be a showing that there be no plain, speedy, and adequate remedy in the ordinary course of the
law.
Respondents contend that the assailed notice and letter are not subject to review by this court, whose power to
review is "limited only to final decisions, rulings and orders of the COMELEC En Banc rendered in the exercise
of its adjudicatory or quasi-judicial power."23 Instead, respondents claim that the assailed notice and letter are
reviewable only by COMELEC itself pursuant to Article IX-C, Section 2(3) of the Constitution24 on
COMELEC’s power to decide all questions affecting elections.25 Respondents invoke the cases of Ambil, Jr. v.
COMELEC,26 Repol v. COMELEC,27 Soriano, Jr. v. COMELEC,28 Blanco v. COMELEC,29 and Cayetano v.
COMELEC,30 to illustrate how judicialintervention is limited to final decisions, orders, rulings and judgments of
the COMELEC En Banc.31
These cases are not applicable.
In Ambil, Jr. v. COMELEC, the losing party in the gubernatorial race of Eastern Samar filed the election
protest.32 At issue was the validity of the promulgation of a COMELEC Division resolution.33 No motion for
reconsideration was filed to raise this issue before the COMELEC En Banc. This court declared that it did not
have jurisdiction and clarified:
We have interpreted [Section 7, Article IX-A of the Constitution]34 to mean final orders, rulings and decisionsof
the COMELEC rendered in the exercise of its adjudicatory or quasi-judicial powers." This decision must be a final
decision or resolution of the Comelec en banc, not of a division, certainly not an interlocutory order of a
division.The Supreme Court has no power to review viacertiorari, an interlocutory order or even a final resolution
of a Division of the Commission on Elections.35 (Emphasis in the original, citations omitted)
However, in the next case cited by respondents, Repol v. COMELEC, this court provided exceptions to this
general rule. Repolwas another election protest case, involving the mayoralty elections in Pagsanghan, Samar.36
This time, the case was brought to this court because the COMELEC First Division issued a status quo ante order
against the Regional Trial Court executing its decision pending appeal.37 This court’s ponencia discussed the
general rule enunciated in Ambil, Jr. that it cannot take jurisdiction to review interlocutory orders of a COMELEC
Division.38 However, consistent with ABS-CBN Broadcasting Corporation v. COMELEC,39 it clarified the
exception:
11 | AEP
may be glossed over to prevent miscarriage of justice, when the issue involves the principle of social justice or the
protection of labor, when the decision or resolution sought to be set aside is a nullity, or when the need for relief is
extremely urgent and certiorari is the only adequate and speedy remedy available.40
Based on ABS-CBN, this court could review orders and decisions of COMELEC — in electoral contests —
despite not being reviewed by the COMELEC En Banc, if:
1) It will prevent the miscarriage of justice;
2) The issue involves a principle of social justice;
3) The issue involves the protection of labor;
4) The decision or resolution sought tobe set aside is a nullity; or
5) The need for relief is extremely urgent and certiorari is the only adequate and speedy remedy
available.
Ultimately, this court took jurisdiction in Repoland decided that the status quo anteorder issued by the COMELEC
Division was unconstitutional.
Respondents also cite Soriano, Jr. v. COMELEC.This case was also an election protest case involving candidates
for the city council of Muntinlupa City.41 Petitioners in Soriano, Jr.filed before this court a petition for certiorari
against an interlocutory order of the COMELEC First
Division.42 While the petition was pending in this court, the COMELEC First Division dismissed the main
election protest case.43 Sorianoapplied the general rule that only final orders should be questioned with this court.
The ponencia for this court, however, acknowledged the exceptions to the general rule in ABS-CBN.44
Blanco v. COMELEC, another case cited by respondents, was a disqualification case of one of the mayoralty
candidates of Meycauayan, Bulacan.45 The COMELEC Second Division ruled that petitioner could not qualify
for the 2007 elections due to the findings in an administrative case that he engaged in vote buying in the 1995
elections.46 No motion for reconsideration was filed before the COMELEC En Banc. This court, however, took
cognizance of this case applying one of the exceptions in ABS-CBN: The assailed resolution was a nullity.47
Finally, respondents cited Cayetano v. COMELEC, a recent election protest case involving the mayoralty
candidates of Taguig City.48 Petitioner assailed a resolution of the COMELEC denying her motion for
reconsideration to dismiss the election protest petition for lack of form and substance.49 This court clarified the
general rule and refused to take cognizance of the review of the COMELEC order. While recognizing the
exceptions in ABS-CBN, this court ruled that these exceptions did not apply.50
Ambil, Jr., Repol, Soriano, Jr., Blanco, and Cayetano cited by respondents do not operate as precedents to oust this
court from taking jurisdiction over this case. All these cases cited involve election protests or disqualification
cases filed by the losing candidate against the winning candidate.
In the present case, petitioners are not candidates seeking for public office. Their petition is filed to assert their
fundamental right to expression.
Furthermore, all these cases cited by respondents pertained to COMELEC’s exercise of its adjudicatory or quasi-
judicial power. This case pertains to acts of COMELEC in the implementation of its regulatory powers. When it
issued the notice and letter, the COMELEC was allegedly enforcingelection laws.
I.B
Rule 65, grave abuse of discretion,
and limitations on political speech
The main subject of thiscase is an alleged constitutional violation: the infringement on speech and the "chilling
effect" caused by respondent COMELEC’s notice and letter.
Petitioners allege that respondents committed grave abuse of discretion amounting to lack or excess of jurisdiction
in issuing the notice51 dated February 22,2013 and letter52 dated February 27, 2013 ordering the removal of the
tarpaulin.53 It is their position that these infringe on their fundamental right to freedom of expression and violate
the principle of separation of church and state and, thus, are unconstitutional.54
The jurisdiction of this court over the subject matter is determined from the allegations in the petition. Subject
matter jurisdiction is defined as the authority "to hear and determine cases of the general class to which the
proceedings in question belong and is conferred by the sovereign authority which organizes the court and defines
its powers."55 Definitely, the subject matter in this case is different from the cases cited by respondents.
Nothing less than the electorate’s political speech will be affected by the restrictions imposed by COMELEC.
Political speech is motivated by the desire to be heard and understood, to move people to action. It is concerned
with the sovereign right to change the contours of power whether through the election of representatives in a
republican government or the revision of the basic text of the Constitution. The zeal with which we protect this
kind of speech does not depend on our evaluation of the cogency of the message. Neither do we assess whether we
should protect speech based on the motives of COMELEC. We evaluate restrictions on freedom of expression
from their effects. We protect both speech and medium because the quality of this freedom in practice will define
the quality of deliberation in our democratic society.
COMELEC’s notice and letter affect preferred speech. Respondents’ acts are capable of repetition. Under the
conditions in which it was issued and in view of the novelty of this case,it could result in a "chilling effect" that
would affect other citizens who want their voices heard on issues during the elections. Other citizens who wish to
express their views regarding the election and other related issues may choose not to, for fear of reprisal or
sanction by the COMELEC. Direct resort to this court is allowed to avoid such proscribed conditions. Rule 65 is
also the procedural platform for raising grave abuse of discretion.
Both parties point to constitutional provisions on jurisdiction. For petitioners, it referred to this court’s expanded
exercise of certiorari as provided by the Constitution as follows:
Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are
legally demandable and enforceable, and to determine whether ornot there has been a grave abuse of discretion
12 | AEP
amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government.56
(Emphasis supplied)
On the other hand, respondents relied on its constitutional mandate to decide all questions affectingelections.
Article IX-C, Section 2(3) of the Constitution, provides:
Sec. 2. The Commission on Elections shall exercise the following powers and functions:
....
(3) Decide, except those involving the right to vote, all questions affecting elections, including determination of
the number and location of polling places, appointment of election officials and inspectors, and registration of
voters.
Respondents’ reliance on this provision is misplaced.
We are not confronted here with the question of whether the COMELEC, in its exercise of jurisdiction, gravely
abused it. We are confronted with the question as to whether the COMELEC had any jurisdiction at all with its
acts threatening imminent criminal action effectively abridging meaningful political speech.
It is clear that the subject matter of the controversy is the effect of COMELEC’s notice and letter on free speech.
This does not fall under Article IX-C, Section 2(3) of the Constitution. The use of the word "affecting" in this
provision cannot be interpreted to mean that COMELEC has the exclusive power to decide any and allquestions
that arise during elections. COMELEC’s constitutional competencies during elections should not operate to divest
this court of its own jurisdiction.
The more relevant provision for jurisdiction in this case is Article VIII, Section 5(1) of the Constitution.This
provision provides for this court’s original jurisdiction over petitions for certiorari and prohibition. This should be
read alongside the expanded jurisdiction of the court in Article VIII, Section 1 of the Constitution.
Certainly, a breach of the fundamental right of expression by COMELEC is grave abuse of discretion. Thus, the
constitutionality of the notice and letter coming from COMELEC is within this court’s power to review.
During elections, we have the power and the duty to correct any grave abuse of discretion or any act tainted with
unconstitutionality on the part of any government branch or instrumentality. This includes actions by the
COMELEC. Furthermore, it is this court’s constitutional mandate to protect the people against government’s
infringement of their fundamental rights. This constitutional mandate out weighs the jurisdiction vested with the
COMELEC.
It will, thus, be manifest injustice if the court does not take jurisdiction over this case.
I.C
Hierarchy of courts
This brings us to the issue of whether petitioners violated the doctrine of hierarchy of courts in directly filing their
petition before this court.
Respondents contend that petitioners’ failure to file the proper suit with a lower court of concurrent jurisdiction is
sufficient ground for the dismissal of their petition.57 They add that observation of the hierarchy of courts is
compulsory, citing Heirs of Bertuldo Hinog v. Melicor.58 While respondents claim that while there are exceptions
to the general rule on hierarchy of courts, none of these are present in this case.59
On the other hand, petitioners cite Fortich v. Corona60 on this court’s discretionary power to take cognizance of a
petition filed directly to it if warranted by "compelling reasons, or [by] the nature and importance of the issues
raised. . . ."61 Petitioners submit that there are "exceptional and compelling reasons to justify a direct resort [with]
this Court."62
In Bañez, Jr. v. Concepcion,63 we explained the necessity of the application of the hierarchy of courts:
The Court must enjoin the observance of the policy on the hierarchy of courts, and now affirms that the policy is
not to be ignored without serious consequences. The strictness of the policy is designed to shield the Court from
having to deal with causes that are also well within the competence of the lower courts, and thus leave time to the
Court to deal with the more fundamental and more essential tasks that the Constitution has assigned to it. The
Court may act on petitions for the extraordinary writs of certiorari, prohibition and mandamus only when
absolutely necessary or when serious and important reasons exist to justify an exception to the policy.64
In Bañez, we also elaborated on the reasons why lower courts are allowed to issue writs of certiorari, prohibition,
and mandamus, citing Vergara v. Suelto:65
The Supreme Court is a court of lastresort, and must so remain if it is to satisfactorily perform the functions
assigned to it by the fundamental charter and immemorial tradition. It cannot and should not be burdened with the
task of dealing with causes in the first instance. Its original jurisdiction to issue the so-called extraordinary writs
should be exercised only where absolutely necessary or where serious and important reasons exist therefore.
Hence, that jurisdiction should generally be exercised relative to actions or proceedings before the Court of
Appeals, or before constitutional or other tribunals, bodies or agencies whose acts for some reason or another are
not controllable by the Court of Appeals. Where the issuance of an extraordinary writ is also within the
competence of the Court of Appeals or a Regional Trial Court, it is in either of these courts that the specific action
for the writ’s procurement must be presented. This is and should continue to be the policy in this regard, a policy
that courts and lawyers must strictly observe.66 (Emphasis omitted)
The doctrine that requires respect for the hierarchy of courts was created by this court to ensure that every level of
the judiciary performs its designated roles in an effective and efficient manner. Trial courts do not only determine
the facts from the evaluation of the evidence presented before them. They are likewise competent to determine
issues of law which may include the validity of an ordinance, statute, or even an executive issuance in relation to
the Constitution.67 To effectively perform these functions, they are territorially organized into regions and then
into branches. Their writs generally reach within those territorial boundaries. Necessarily, they mostly perform the
all-important task of inferring the facts from the evidence as these are physically presented before them. In many
instances, the facts occur within their territorial jurisdiction, which properly present the ‘actual case’ that makes
ripe a determination of the constitutionality of such action. The consequences, of course, would be national in
scope. There are, however, some cases where resort to courts at their level would not be practical considering their
decisions could still be appealed before the higher courts, such as the Court of Appeals.
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The Court of Appeals is primarily designed as an appellate court that reviews the determination of facts and law
made by the trial courts. It is collegiate in nature. This nature ensures more standpoints in the review of the actions
of the trial court. But the Court of Appeals also has original jurisdiction over most special civil actions. Unlike the
trial courts, its writs can have a nationwide scope. It is competent to determine facts and, ideally, should act on
constitutional issues thatmay not necessarily be novel unless there are factual questions to determine.
This court, on the other hand, leads the judiciary by breaking new ground or further reiterating — in the light of
new circumstances or in the light of some confusions of bench or bar — existing precedents. Rather than a court
of first instance or as a repetition of the actions of the Court of Appeals, this court promulgates these doctrinal
devices in order that it truly performs that role.
In other words, the Supreme Court’s role to interpret the Constitution and act in order to protect constitutional
rights when these become exigent should not be emasculated by the doctrine in respect of the hierarchy of courts.
That has never been the purpose of such doctrine.
Thus, the doctrine of hierarchy of courts is not an iron-clad rule.68 This court has "full discretionary power to take
cognizance and assume jurisdiction [over] special civil actions for certiorari . . .filed directly with it for
exceptionally compelling reasons69 or if warranted by the nature of the issues clearly and specifically raised in the
petition."70 As correctly pointed out by petitioners,71 we have provided exceptions to this doctrine:
First, a direct resort to this court is allowed when there are genuine issues of constitutionality that must be
addressed at the most immediate time. A direct resort to this court includes availing of the remedies of certiorari
and prohibition toassail the constitutionality of actions of both legislative and executive branches of the
government.72
In this case, the assailed issuances of respondents prejudice not only petitioners’ right to freedom of expression in
the present case, but also of others in future similar cases. The case before this court involves an active effort on
the part of the electorate to reform the political landscape. This has become a rare occasion when private citizens
actively engage the public in political discourse. To quote an eminent political theorist:
[T]he theory of freedom of expression involves more than a technique for arriving at better social judgments
through democratic procedures. It comprehends a vision of society, a faith and a whole way of life. The theory
grew out of an age that was awakened and invigorated by the idea of new society in which man's mind was free,
his fate determined by his own powers of reason, and his prospects of creating a rational and enlightened
civilization virtually unlimited. It is put forward as a prescription for attaining a creative, progressive, exciting and
intellectually robust community. It contemplates a mode of life that, through encouraging toleration, skepticism,
reason and initiative, will allow man to realize his full potentialities.It spurns the alternative of a society that is
tyrannical, conformist, irrational and stagnant.73
In a democracy, the citizen’s right tofreely participate in the exchange of ideas in furtherance of political decision-
making is recognized. It deserves the highest protection the courts may provide, as public participation in nation-
building isa fundamental principle in our Constitution. As such, their right to engage in free expression of ideas
must be given immediate protection by this court.
A second exception is when the issuesinvolved are of transcendental importance.74 In these cases, the imminence
and clarity of the threat to fundamental constitutional rights outweigh the necessity for prudence. The doctrine
relating to constitutional issues of transcendental importance prevents courts from the paralysis of procedural
niceties when clearly faced with the need for substantial protection.
In the case before this court, there is a clear threat to the paramount right of freedom of speech and freedom of
expression which warrants invocation of relief from this court. The principles laid down in this decision will likely
influence the discourse of freedom of speech in the future, especially in the context of elections. The right to
suffrage not only includes the right to vote for one’s chosen candidate, but also the right to vocalize that choice to
the public in general, in the hope of influencing their votes. It may be said that in an election year, the right to vote
necessarily includes the right to free speech and expression. The protection of these fundamental constitutional
rights, therefore, allows for the immediate resort to this court.
Third, cases of first impression75 warrant a direct resort to this court. In cases of first impression, no jurisprudence
yet exists that will guide the lower courts on this matter. In Government of the United States v. Purganan,76 this
court took cognizance of the case as a matter of first impression that may guide the lower courts:
In the interest of justice and to settle once and for all the important issue of bail in extradition proceedings, we
deem it best to take cognizance of the present case. Such proceedings constitute a matter of first impression over
which there is, as yet, no local jurisprudence to guide lower courts.77
This court finds that this is indeed a case of first impression involving as it does the issue of whether the right of
suffrage includes the right of freedom of expression. This is a question which this court has yet to provide
substantial answers to, through jurisprudence. Thus, direct resort to this court is allowed.
Fourth, the constitutional issues raisedare better decided by this court. In Drilon v. Lim,78 this court held that:
. . . it will be prudent for such courts, if only out of a becoming modesty, to defer to the higher judgmentof this
Court in the consideration of its validity, which is better determined after a thorough deliberation by a collegiate
body and with the concurrence of the majority of those who participated in its discussion.79 (Citation omitted)
In this case, it is this court, with its constitutionally enshrined judicial power, that can rule with finality on whether
COMELEC committed grave abuse of discretion or performed acts contrary to the Constitution through the
assailed issuances.
Fifth, the time element presented in this case cannot be ignored. This case was filed during the 2013 election
period. Although the elections have already been concluded, future cases may be filed that necessitate urgency in
its resolution. Exigency in certain situations would qualify as an exception for direct resort to this court.
Sixth, the filed petition reviews the act of a constitutional organ. COMELEC is a constitutional body. In Albano v.
Arranz,80 cited by petitioners, this court held that "[i]t is easy to realize the chaos that would ensue if the Court of
First Instance ofeach and every province were [to] arrogate itself the power to disregard, suspend, or contradict
any order of the Commission on Elections: that constitutional body would be speedily reduced to impotence."81
In this case, if petitioners sought to annul the actions of COMELEC through pursuing remedies with the lower
courts, any ruling on their part would not have been binding for other citizens whom respondents may place in the
same situation. Besides, thiscourt affords great respect to the Constitution and the powers and duties imposed upon
COMELEC. Hence, a ruling by this court would be in the best interest of respondents, in order that their actions
may be guided accordingly in the future.
14 | AEP
Seventh, petitioners rightly claim that they had no other plain, speedy, and adequate remedy in the ordinary course
of law that could free them from the injurious effects of respondents’ acts in violation of their right to freedom of
expression.
In this case, the repercussions of the assailed issuances on this basic right constitute an exceptionally compelling
reason to justify the direct resort to this court. The lack of other sufficient remedies in the course of law alone is
sufficient ground to allow direct resort to this court.
Eighth, the petition includes questionsthat are "dictated by public welfare and the advancement of public policy, or
demanded by the broader interest of justice, or the orders complained of were found to be patent nullities, or the
appeal was consideredas clearly an inappropriate remedy."82 In the past, questions similar to these which this
court ruled on immediately despite the doctrine of hierarchy of courts included citizens’ right to bear arms,83
government contracts involving modernization of voters’ registration lists,84 and the status and existence of a
public office.85
This case also poses a question of similar, if not greater import. Hence, a direct action to this court is permitted.
It is not, however, necessary that all of these exceptions must occur at the same time to justify a direct resort to
this court. While generally, the hierarchy of courts is respected, the present case falls under the recognized
exceptions and, as such, may be resolved by this court directly.
I.D
The concept of a political question
Respondents argue further that the size limitation and its reasonableness is a political question, hence not within
the ambit of this court’s power of review. They cite Justice Vitug’s separate opinion in Osmeña v. COMELEC86
to support their position:
It might be worth mentioning that Section 26, Article II, of the Constitution also states that the "State shall
guarantee equal access to opportunities for public service, and prohibit political dynasties as may be defined by
law." I see neither Article IX (C)(4) nor Section 26, Article II, of the Constitution to be all that adversarial or
irreconcilably inconsistent with the right of free expression. In any event, the latter, being one of general
application, must yield to the specific demands of the Constitution. The freedom of expression concededly holds,
it is true, a vantage point in hierarchy of constitutionally-enshrined rights but, like all fundamental rights, it is not
without limitations.
The case is not about a fight between the "rich" and the "poor" or between the "powerful" and the "weak" in our
society but it is to me a genuine attempt on the part of Congress and the Commission on Elections to ensure that
all candidates are given an equal chance to media coverage and thereby be equally perceived as giving real life to
the candidates’ right of free expression rather than being viewed as an undue restriction of that freedom. The
wisdom in the enactment of the law, i.e., that which the legislature deems to be best in giving life to the
Constitutional mandate, is not for the Court to question; it is a matter that lies beyond the normal prerogatives of
the Court to pass upon.87
This separate opinion is cogent for the purpose it was said. But it is not in point in this case.
The present petition does not involve a dispute between the rich and poor, or the powerful and weak, on their
equal opportunities for media coverage of candidates and their right to freedom of expression. This case concerns
the right of petitioners, who are non-candidates, to post the tarpaulin in their private property, asan exercise of
their right of free expression. Despite the invocation of the political question doctrine by respondents, this court is
not proscribed from deciding on the merits of this case.
In Tañada v. Cuenco,88 this court previously elaborated on the concept of what constitutes a political question:
What is generally meant, when it is said that a question is political, and not judicial, is that it is a matter which is
to be exercised by the people in their primary political capacity, or that it has been specifically delegated to some
other department or particular officer of the government, withdiscretionary power to act.89 (Emphasis omitted)
It is not for this court to rehearse and re-enact political debates on what the text of the law should be. In political
forums, particularly the legislature, the creation of the textof the law is based on a general discussion of factual
circumstances, broadly construed in order to allow for general application by the executive branch. Thus, the
creation of the law is not limited by particular and specific facts that affect the rights of certain individuals, per se.
Courts, on the other hand, rule on adversarial positions based on existing facts established on a specific case-to-
case basis, where parties affected by the legal provision seek the courts’ understanding of the law.
The complementary nature of the political and judicial branches of government is essential in order to ensure that
the rights of the general public are upheld at all times. In order to preserve this balance, branches of government
must afford due respectand deference for the duties and functions constitutionally delegated to the other. Courts
cannot rush to invalidate a law or rule. Prudence dictates that we are careful not to veto political acts unless we can
craft doctrine narrowly tailored to the circumstances of the case.
The case before this court does not call for the exercise of prudence or modesty. There is no political question. It
can be acted upon by this court through the expanded jurisdiction granted to this court through Article VIII,
Section 1 of the Constitution.
A political question arises in constitutional issues relating to the powers or competence of different agencies and
departments of the executive or those of the legislature. The political question doctrine is used as a defense when
the petition asks this court to nullify certain acts that are exclusively within the domain of their respective
competencies, as provided by the Constitution or the law. In such situation, presumptively, this court should act
with deference. It will decline to void an act unless the exercise of that power was so capricious and arbitrary so as
to amount to grave abuse of discretion.
The concept of a political question, however, never precludes judicial review when the act of a constitutional
organ infringes upon a fundamental individual or collective right. Even assuming arguendo that the COMELEC
did have the discretion to choose the manner of regulation of the tarpaulin in question, it cannot do so by abridging
the fundamental right to expression.
Marcos v. Manglapus90 limited the use of the political question doctrine:
When political questions are involved, the Constitution limits the determination to whether or not there has been a
grave abuse of discretion amounting to lack or excess of jurisdiction on the part of the official whose action is
15 | AEP
being questioned. If grave abuse is not established, the Court will not substitute its judgment for that of the official
concerned and decide a matter which by its nature or by law is for the latter alone to decide.91
How this court has chosen to address the political question doctrine has undergone an evolution since the timethat
it had been first invoked in Marcos v. Manglapus. Increasingly, this court has taken the historical and social
context of the case and the relevance of pronouncements of carefully and narrowly tailored constitutional
doctrines. This trend was followed in cases such as Daza v. Singson92 and Coseteng v. Mitra Jr.93
Daza and Coseteng involved a question as to the application of Article VI, Section 18 of the 1987 Constitution
involving the removal of petitioners from the Commission on Appointments. In times past, this would have
involved a quint essentially political question as it related to the dominance of political parties in Congress.
However, in these cases, this court exercised its power of judicial review noting that the requirement of
interpreting the constitutional provision involved the legality and not the wisdom of a manner by which a
constitutional duty or power was exercised. This approach was again reiterated in Defensor Santiago v. Guingona,
Jr.94
In Integrated Bar of the Philippines v. Zamora,95 this court declared again that the possible existence ofa political
question did not bar an examination of whether the exercise of discretion was done with grave abuse of discretion.
In that case, this court ruled on the question of whether there was grave abuse of discretion in the President’s use
of his power to call out the armed forces to prevent and suppress lawless violence.
In Estrada v. Desierto,96 this court ruled that the legal question as to whether a former President resigned was not
a political question even if the consequences would be to ascertain the political legitimacy of a successor
President.
Many constitutional cases arise from political crises. The actors in such crises may use the resolution of
constitutional issues as leverage. But the expanded jurisdiction of this court now mandates a duty for it to exercise
its power of judicial review expanding on principles that may avert catastrophe or resolve social conflict.
This court’s understanding of the political question has not been static or unbending. In Llamas v. Executive
Secretary Oscar Orbos,97 this court held:
While it is true that courts cannot inquire into the manner in which the President's discretionary powers are
exercised or into the wisdom for its exercise, it is also a settled rule that when the issue involved concerns the
validity of such discretionary powers or whether said powers are within the limits prescribed by the Constitution,
We will not decline to exercise our power of judicial review. And such review does not constitute a modification
or correction of the act of the President, nor does it constitute interference with the functions of the President.98
The concept of judicial power in relation to the concept of the political question was discussed most extensively in
Francisco v. HRET.99 In this case, the House of Representatives arguedthat the question of the validity of the
second impeachment complaint that was filed against former Chief Justice Hilario Davide was a political question
beyond the ambit of this court. Former Chief Justice Reynato Puno elaborated on this concept in his concurring
and dissenting opinion:
To be sure, the force to impugn the jurisdiction of this Court becomes more feeble in light of the new Constitution
which expanded the definition of judicial power as including "the duty of the courts of justice to settle actual
controversies involving rights which are legally demandable and enforceable, and to determine whether or not
there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or
instrumentality of the Government." As well observed by retired Justice Isagani Cruz, this expanded definition of
judicial power considerably constricted the scope of political question. He opined that the language luminously
suggests that this duty (and power) is available even against the executive and legislative departments including
the President and the Congress, in the exercise of their discretionary powers.100 (Emphasis in the original,
citations omitted)
Francisco also provides the cases which show the evolution of the political question, as applied in the following
cases:
In Marcos v. Manglapus, this Court, speaking through Madame Justice Irene Cortes, held: The present
Constitution limits resort to the political question doctrine and broadens the scope of judicial inquiry into areas
which the Court,under previous constitutions, would have normally left to the political departments to decide. x x
x Despite the alleged non-exhaustion of administrative remedies, it is clear that the controversy is already ripe for
In Bengzon v. Senate Blue Ribbon Committee, through Justice Teodoro Padilla, this Court declared:
The "allocation of constitutional boundaries" is a task that this Court must perform under the Constitution.
Moreover, as held in a recent case, "(t)he political question doctrine neither interposes an obstacle to judicial
determination of the rival claims. The jurisdiction to delimit constitutional boundaries has been given to this
Court. It cannot abdicate that obligation mandated by the 1987 Constitution, although said provision by no means
does away with the applicability of the principle in appropriate cases." (Emphasis and italics supplied)
And in Daza v. Singson, speaking through Justice Isagani Cruz, this Court ruled:
In the case now before us, the jurisdictional objection becomes even less tenable and decisive. The reason is that,
even if we were to assume that the issue presented before us was political in nature, we would still not be
precluded from resolving it under the expanded jurisdiction conferred upon us that now covers, in proper cases,
even the political question.x x x (Emphasis and italics supplied.)
....
In our jurisdiction, the determination of whether an issue involves a truly political and non-justiciable question lies
in the answer to the question of whether there are constitutionally imposed limits on powers or functions conferred
upon political bodies. If there are, then our courts are duty-bound to examine whether the branch or
instrumentality of the government properly acted within such limits.101 (Citations omitted)
As stated in Francisco, a political question will not be considered justiciable if there are no constitutionally
imposed limits on powers or functions conferred upon political bodies. Hence, the existence of constitutionally
imposed limits justifies subjecting the official actions of the body to the scrutiny and review of this court.
In this case, the Bill of Rights gives the utmost deference to the right to free speech. Any instance that this right
may be abridged demands judicial scrutiny. It does not fall squarely into any doubt that a political question brings.
I.E
Exhaustion of administrative remedies
16 | AEP
Respondents allege that petitioners violated the principle of exhaustion of administrative remedies. Respondents
insist that petitioners should have first brought the matter to the COMELEC En Banc or any of its divisions.102
Respondents point out that petitioners failed to comply with the requirement in Rule 65 that "there is no appeal, or
any plain, speedy, and adequate remedy in the ordinary course of law."103 They add that the proper venue to
assail the validity of the assailed issuances was in the course of an administrative hearing to be conducted by
COMELEC.104 In the event that an election offense is filed against petitioners for posting the tarpaulin, they
claim that petitioners should resort to the remedies prescribed in Rule 34 of the COMELEC Rules of
Procedure.105
The argument on exhaustion of administrative remedies is not proper in this case.
adjudication. Ripeness is the "prerequisite that something had by then been accomplished or performed by either
branch [or in this case, organ of government] before a court may come into the picture."106
Petitioners’ exercise of their rightto speech, given the message and their medium, had understandable relevance
especially during the elections. COMELEC’s letter threatening the filing of the election offense against petitioners
is already an actionable infringement of this right. The impending threat of criminal litigation is enough to curtail
petitioners’ speech.
In the context of this case, exhaustion of their administrative remedies as COMELEC suggested in their pleadings
prolongs the violation of their freedom of speech.
Political speech enjoys preferred protection within our constitutional order. In Chavez v. Gonzales,107 Justice
Carpio in a separate opinion emphasized: "[i]f everthere is a hierarchy of protected expressions, political
expression would occupy the highest rank, and among different kinds of political expression, the subject of fair
and honest elections would be at the top."108 Sovereignty resides in the people.109 Political speech is a direct
exercise of the sovereignty. The principle of exhaustion of administrative remedies yields in order to protect this
fundamental right.
Even assuming that the principle of exhaustion of administrative remedies is applicable, the current controversy is
within the exceptions to the principle. In Chua v. Ang,110 this court held:
On the other hand, prior exhaustion of administrative remedies may be dispensed with and judicial action may be
validly resorted to immediately: (a) when there is a violation of due process; (b) when the issue involved is purely
a legal question; (c) when the administrative action is patently illegal amounting to lack or excess of jurisdiction;
(d) when there is estoppel on the part ofthe administrative agency concerned; (e) when there is irreparable injury;
(f) when the respondent is a department secretary whose acts as analter ego of the President bear the implied and
assumed approval of the latter; (g) when to require exhaustion of administrative remedies would be unreasonable;
(h) when it would amount to a nullification of a claim; (i) when the subject matter is a private land in land case
proceedings; (j) whenthe rule does not provide a plain, speedy and adequate remedy; or (k) when there are
circumstances indicating the urgency of judicial intervention."111 (Emphasis supplied, citation omitted)
The circumstances emphasized are squarely applicable with the present case. First, petitioners allegethat the
assailed issuances violated their right to freedom of expression and the principle of separation of church and state.
This is a purely legal question. Second, the circumstances of the present case indicate the urgency of judicial
intervention considering the issue then on the RH Law as well as the upcoming elections. Thus, to require the
exhaustion of administrative remedies in this case would be unreasonable.
Time and again, we have held that this court "has the power to relax or suspend the rules or to except a case from
their operation when compelling reasons so warrant, or whenthe purpose of justice requires it, [and when] [w]hat
constitutes [as] good and sufficient cause that will merit suspension of the rules is discretionary upon the
court".112 Certainly, this case of first impression where COMELEC has threatenedto prosecute private parties
who seek to participate in the elections by calling attention to issues they want debated by the publicin the manner
they feel would be effective is one of those cases.
II
SUBSTANTIVE ISSUES
II.A
COMELEC had no legal basis to regulate expressions made by private citizens
Respondents cite the Constitution, laws, and jurisprudence to support their position that they had the power to
regulate the tarpaulin.113 However, all of these provisions pertain to candidates and political parties. Petitioners
are not candidates. Neither do theybelong to any political party. COMELEC does not have the authority to
regulate the enjoyment of the preferred right to freedom of expression exercised by a non-candidate in this case.
II.A.1
First, respondents cite Article IX-C, Section 4 of the Constitution, which provides:
Section 4. The Commission may,during the election period, supervise or regulate the enjoyment or utilization of
all franchises or permits for the operation of transportation and other public utilities, media of communication or
information, all grants, special privileges, or concessions granted by the Government or any subdivision, agency,
or instrumentality thereof, including any government-owned or controlled corporation or its subsidiary. Such
supervision or regulation shall aim to ensure equal opportunity, time, and space, and the right to reply, including
reasonable, equal rates therefor, for public information campaigns and forums among candidates in connection
with the objective of holding free, orderly, honest, peaceful, and credible elections.114 (Emphasis supplied)
Sanidad v. COMELEC115 involved the rules promulgated by COMELEC during the plebiscite for the creation of
the Cordillera Autonomous Region.116 Columnist Pablito V. Sanidad questioned the provision prohibiting
journalists from covering plebiscite issues on the day before and on plebiscite day.117 Sanidad argued that the
prohibition was a violation of the "constitutional guarantees of the freedom of expression and of the press. . . ."118
We held that the "evil sought to be prevented by this provision is the possibility that a franchise holder may favor
or give any undue advantage to a candidate in terms of advertising space or radio or television time."119 This
court found that "[m]edia practitioners exercising their freedom of expression during plebiscite periods are neither
the franchise holders nor the candidates[,]"120 thus, their right to expression during this period may not be
regulated by COMELEC.121
Similar to the media, petitioners in the case at bar are neither franchise holders nor candidates. II.A.2
Respondents likewise cite Article IX-C, Section 2(7) of the Constitution as follows:122
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Sec. 2. The Commission on Elections shall exercise the following powers and functions:
....
(7) Recommend to the Congress effective measures to minimize election spending, including limitation of places
where propaganda materials shall be posted, and to prevent and penalize all forms of election frauds, offenses,
malpractices, and nuisance candidates. (Emphasis supplied) Based on the enumeration made on actsthat may be
penalized, it will be inferred that this provision only affects candidates.
Petitioners assail the "Notice to Remove Campaign Materials" issued by COMELEC. This was followed bythe
assailed letter regarding the "election propaganda material posted on the church vicinity promoting for or against
the candidates and party-list groups. . . ."123
Section 9 of the Fair Election Act124 on the posting of campaign materials only mentions "parties" and
"candidates":
Sec. 9. Posting of Campaign Materials. - The COMELEC may authorize political parties and party-list groups to
erect common poster areas for their candidates in not more than ten (10) public places such as plazas, markets,
barangay centers and the like, wherein candidates can post, display or exhibit election propaganda: Provided, That
the size ofthe poster areas shall not exceed twelve (12) by sixteen (16) feet or its equivalent. Independent
candidates with no political parties may likewise be authorized to erect common poster areas in not more than ten
(10) public places, the size of which shall not exceed four (4) by six (6) feet or its equivalent. Candidates may post
any lawful propaganda material in private places with the consent of the owner thereof, and in public places or
property which shall be allocated equitably and impartially among the candidates. (Emphasis supplied)
Similarly, Section 17 of COMELEC Resolution No. 9615, the rules and regulations implementing the Fair
Election Act, provides as follows:
SECTION 17. Posting of Campaign Materials. - Parties and candidates may post any lawful campaign material in:
a. Authorized common poster areasin public places subject to the requirements and/or limitations set
forth in the next following section; and
b. Private places provided it has the consent of the owner thereof.
The posting of campaign materials in public places outside of the designated common poster areas and those
enumerated under Section 7 (g) of these Rules and the like is prohibited. Persons posting the same shall be liable
together with the candidates and other persons who caused the posting. It will be presumed that the candidates and
parties caused the posting of campaign materials outside the common poster areas if they do not remove the same
within three (3) days from notice which shall be issued by the Election Officer of the city or municipality where
the unlawful election propaganda are posted or displayed.
Members of the PNP and other law enforcement agencies called upon by the Election Officeror other officials of
the COMELEC shall apprehend the violators caught in the act, and file the appropriate charges against them.
(Emphasis supplied)
Respondents considered the tarpaulin as a campaign material in their issuances. The above provisions regulating
the posting of campaign materials only apply to candidates and political parties, and petitioners are neither of the
two.
Section 3 of Republic Act No. 9006on "Lawful Election Propaganda" also states that these are "allowed for all
registered political parties, national, regional, sectoral parties or organizations participating under the party-list
elections and for all bona fide candidates seeking national and local elective positions subject to the limitation on
authorized expenses of candidates and political parties. . . ." Section 6 of COMELEC Resolution No. 9615
provides for a similar wording. These provisions show that election propaganda refers to matter done by or on
behalf of and in coordination with candidates and political parties. Some level of coordination with the candidates
and political parties for whom the election propaganda are released would ensure that these candidates and
political parties maintain within the authorized expenses limitation.
The tarpaulin was not paid for byany candidate or political party.125 There was no allegation that petitioners
coordinated with any of the persons named in the tarpaulin regarding its posting. On the other hand, petitioners
posted the tarpaulin as part of their advocacy against the RH Law. Respondents also cite National Press Club v.
COMELEC126 in arguing that its regulatory power under the Constitution, to some extent, set a limit on the right
to free speech during election period.127
National Press Club involved the prohibition on the sale and donation of space and time for political
advertisements, limiting political advertisements to COMELEC-designated space and time. This case was brought
by representatives of mass media and two candidates for office in the 1992 elections. They argued that the
prohibition on the sale and donation of space and time for political advertisements is tantamount to censorship,
which necessarily infringes on the freedom of speech of the candidates.128
This court upheld the constitutionality of the COMELEC prohibition in National Press Club. However, this case
does not apply as most of the petitioners were electoral candidates, unlike petitioners in the instant case.
Moreover, the subject matter of National Press Club, Section 11(b) of Republic Act No. 6646,129 only refers to a
particular kind of media such as newspapers, radio broadcasting, or television.130 Justice Feliciano emphasized
that the provision did not infringe upon the right of reporters or broadcasters to air their commentaries and
opinions regarding the candidates, their qualifications, and program for government. Compared to Sanidadwherein
the columnists lost their ability to give their commentary on the issues involving the plebiscite, National Press
Clubdoes not involve the same infringement.
In the case at bar, petitioners lost their ability to give a commentary on the candidates for the 2013 national
elections because of the COMELEC notice and letter. It was not merelya regulation on the campaigns of
candidates vying for public office. Thus, National Press Clubdoes not apply to this case.
Finally, Section 79 of Batas Pambansa Blg. 881, otherwise known as the Omnibus Election Code, defines
an"election campaign" as follows:
....
(b) The term "election campaign" or "partisan political activity" refers to an act designed to promote the election
or defeat of a particular candidate or candidates to a public office which shall include:
(1) Forming organizations, associations, clubs, committees or other groups of persons for the purpose of
soliciting votes and/or undertaking any campaign for or against a candidate;
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(2) Holding political caucuses, conferences, meetings, rallies, parades, or other similar assemblies, for
the purpose of soliciting votes and/or undertaking any campaign or propaganda for or against a
candidate;
(3) Making speeches, announcements or commentaries, or holding interviews for or against the election
of any candidate for public office;
(4) Publishing or distributing campaign literature or materials designed to support or oppose the election
of any candidate; or
(5) Directly or indirectly soliciting votes, pledges or support for or against a candidate.
The foregoing enumerated acts ifperformed for the purpose of enhancing the chances of aspirants for nomination
for candidacy to a public office by a political party, aggroupment, or coalition of parties shall not be considered as
election campaign or partisan election activity. Public expressions or opinions or discussions of probable issues in
a forthcoming electionor on attributes of or criticisms against probable candidates proposed to be nominated in a
forthcoming political party convention shall not be construed as part of any election campaign or partisan political
activity contemplated under this Article. (Emphasis supplied)
True, there is no mention whether election campaign is limited only to the candidates and political parties
themselves. The focus of the definition is that the act must be "designed to promote the election or defeat of a
particular candidate or candidates to a public office."
In this case, the tarpaulin contains speech on a matter of public concern, that is, a statement of either appreciation
or criticism on votes made in the passing of the RH law. Thus, petitioners invoke their right to freedom of
expression.
II.B
The violation of the constitutional right
to freedom of speech and expression
Petitioners contend that the assailed notice and letter for the removal of the tarpaulin violate their fundamental
right to freedom of expression.
On the other hand, respondents contend that the tarpaulin is an election propaganda subject to their regulation
pursuant to their mandate under Article IX-C, Section 4 of the Constitution. Thus, the assailed notice and letter
ordering itsremoval for being oversized are valid and constitutional.131
II.B.1
Fundamental to the consideration of this issue is Article III, Section 4 of the Constitution:
Section 4. No law shall be passed abridging the freedom of speech, of expression, or of the press, or the right of
the people peaceably to assemble and petition the government for redress of grievances.132
No law. . .
While it is true that the present petition assails not a law but an opinion by the COMELEC Law Department, this
court has applied Article III, Section 4 of the Constitution even to governmental acts.
In Primicias v. Fugoso,133 respondent Mayor applied by analogy Section 1119 of the Revised Ordinances of 1927
of Manila for the public meeting and assembly organized by petitioner Primicias.134 Section 1119 requires a
Mayor’s permit for the use of streets and public places for purposes such as athletic games, sports, or celebration
of national holidays.135 What was questioned was not a law but the Mayor’s refusal to issue a permit for the
holding of petitioner’s public meeting.136 Nevertheless, this court recognized the constitutional right to freedom
of speech, to peaceful assembly and to petition for redress of grievances, albeit not absolute,137 and the petition
for mandamus to compel respondent Mayor to issue the permit was granted.138
In ABS-CBN v. COMELEC, what was assailed was not a law but COMELEC En Banc Resolution No. 98-1419
where the COMELEC resolved to approve the issuance of a restraining order to stop ABS-CBN from conducting
exit surveys.139 The right to freedom of expression was similarly upheld in this case and, consequently, the
assailed resolution was nullified and set aside.140
. . . shall be passed abridging. . .
All regulations will have an impact directly or indirectly on expression. The prohibition against the abridgment of
speech should not mean an absolute prohibition against regulation. The primary and incidental burden on speech
must be weighed against a compelling state interest clearly allowed in the Constitution. The test depends on the
relevant theory of speech implicit in the kind of society framed by our Constitution.
. . . of expression. . .
Our Constitution has also explicitly included the freedom of expression, separate and in addition to the freedom of
speech and of the press provided in the US Constitution. The word "expression" was added in the 1987
Constitution by Commissioner Brocka for having a wider scope:
MR. BROCKA: This is a very minor amendment, Mr. Presiding Officer. On Section 9, page 2, line 29, it says:
"No law shall be passed abridging the freedom of speech." I would like to recommend to the Committee the
change of the word "speech" to EXPRESSION; or if not, add the words AND EXPRESSION after the word
"speech," because it is more expansive, it has a wider scope, and it would refer to means of expression other than
speech.
THE PRESIDING OFFICER (Mr.Bengzon): What does the Committee say?
FR. BERNAS: "Expression" is more broad than speech. We accept it.
MR. BROCKA: Thank you.
THE PRESIDING OFFICER (Mr.Bengzon): Is it accepted?
FR. BERNAS: Yes.
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THE PRESIDING OFFICER (Mr.Bengzon): Is there any objection? (Silence) The Chair hears none; the
amendment is approved.
FR. BERNAS: So, that provision will now read: "No law shall be passed abridging the freedom of speech,
expression or of the press . . . ."141 Speech may be said to be inextricably linked to freedom itself as "[t]he right to
think is the beginning of freedom, and speech must be protected from the government because speech is the
beginning of thought."142
II.B.2
Communication is an essential outcome of protected speech.143 Communication exists when "(1) a speaker,
seeking to signal others, uses conventional actions because he orshe reasonably believes that such actions will be
taken by the audience in the manner intended; and (2) the audience so takes the actions."144 "[I]n communicative
action[,] the hearer may respond to the claims by . . . either accepting the speech act’s claims or opposing them
with criticism or requests for justification."145
Speech is not limited to vocal communication. "[C]onduct is treated as a form of speech sometimes referred to as
‘symbolic speech[,]’"146 such that "‘when ‘speech’ and ‘nonspeech’ elements are combined in the same course of
conduct,’ the ‘communicative element’ of the conduct may be ‘sufficient to bring into play the [right to freedom
of expression].’"147
The right to freedom of expression, thus, applies to the entire continuum of speech from utterances made to
conduct enacted, and even to inaction itself as a symbolic manner of communication.
In Ebralinag v. The Division Superintendent of Schools of Cebu,148 students who were members of the religious
sect Jehovah’s Witnesses were to be expelled from school for refusing to salute the flag, sing the national anthem,
and recite the patriotic pledge.149 In his concurring opinion, Justice Cruz discussed how the salute is a symbolic
manner of communication and a valid form of expression.150 He adds that freedom of speech includes even the
right to be silent:
Freedom of speech includes the right to be silent. Aptly has it been said that the Bill of Rights that guarantees to
the individual the liberty to utter what is in his mind also guarantees to him the liberty not to utter what is not in
his mind. The salute is a symbolic manner of communication that conveys its messageas clearly as the written or
spoken word. As a valid form of expression, it cannot be compelled any more than it can be prohibited in the face
of valid religious objections like those raised in this petition. To impose it on the petitioners is to deny them the
right not to speak when their religion bids them to be silent. This coercion of conscience has no place in the free
society.
The democratic system provides for the accommodation of diverse ideas, including the unconventional and even
the bizarre or eccentric. The will of the majority prevails, but it cannot regiment thought by prescribing the
recitation by rote of its opinions or proscribing the assertion of unorthodox or unpopular views as inthis case. The
conscientious objections of the petitioners, no less than the impatience of those who disagree with them, are
protected by the Constitution. The State cannot make the individual speak when the soul within rebels.151
Even before freedom "of expression" was included in Article III, Section 4 of the present Constitution,this court
has applied its precedent version to expressions other than verbal utterances.
In the 1985 case of Gonzalez v. Chairman Katigbak,152 petitioners objected to the classification of the motion
picture "Kapit sa Patalim" as "For Adults Only." They contend that the classification "is without legal and factual
basis and is exercised as impermissible restraint of artistic expression."153 This court recognized that "[m]otion
pictures are important both as a medium for the communication of ideas and the expression of the artistic
impulse."154 It adds that "every writer,actor, or producer, no matter what medium of expression he may use,
should be freed from the censor."155 This court found that "[the Board’s] perception of what constitutes obscenity
appears to be unduly restrictive."156 However, the petition was dismissed solely on the ground that there were not
enough votes for a ruling of grave abuse of discretion in the classification made by the Board.157
II.B.3
Size does matter
The form of expression is just as important as the information conveyed that it forms part of the expression. The
present case is in point.
It is easy to discern why size matters.
First, it enhances efficiency in communication. A larger tarpaulin allows larger fonts which make it easier to view
its messages from greater distances. Furthermore, a larger tarpaulin makes it easier for passengers inside moving
vehicles to read its content. Compared with the pedestrians, the passengers inside moving vehicles have lesser
time to view the content of a tarpaulin. The larger the fonts and images, the greater the probability that it will catch
their attention and, thus, the greater the possibility that they will understand its message.
Second, the size of the tarpaulin may underscore the importance of the message to the reader. From an ordinary
person’s perspective, those who post their messages in larger fonts care more about their message than those who
carry their messages in smaller media. The perceived importance given by the speakers, in this case petitioners, to
their cause is also part of the message. The effectivity of communication sometimes relies on the emphasis put by
the speakers and onthe credibility of the speakers themselves. Certainly, larger segments of the public may tend to
be more convinced of the point made by authoritative figures when they make the effort to emphasize their
messages.
Third, larger spaces allow for more messages. Larger spaces, therefore, may translate to more opportunities to
amplify, explain, and argue points which the speakers might want to communicate. Rather than simply placing the
names and images of political candidates and an expression of support, larger spaces can allow for brief but
memorable presentations of the candidates’ platforms for governance. Larger spaces allow for more precise
inceptions of ideas, catalyze reactions to advocacies, and contribute more to a more educated and reasoned
electorate. A more educated electorate will increase the possibilities of both good governance and accountability
in our government.
These points become more salient when it is the electorate, not the candidates or the political parties, that speaks.
Too often, the terms of public discussion during elections are framed and kept hostage by brief and catchy but
meaningless sound bites extolling the character of the candidate. Worse, elections sideline political arguments and
privilege the endorsement by celebrities. Rather than provide obstacles to their speech, government should in fact
encourage it. Between the candidates and the electorate, the latter have the better incentive to demand discussion
of the more important issues. Between the candidates and the electorate, the former have better incentives to avoid
difficult political standpoints and instead focus on appearances and empty promises.
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Large tarpaulins, therefore, are not analogous to time and place.158 They are fundamentally part of expression
protected under Article III, Section 4 of the Constitution.
II.B.4
There are several theories and schools of thought that strengthen the need to protect the basic right to freedom of
expression.
First, this relates to the right ofthe people to participate in public affairs, including the right to criticize government
actions.
Proponents of the political theory on "deliberative democracy" submit that "substantial, open, [and] ethical
dialogue isa critical, and indeed defining, feature of a good polity."159 This theory may be considered broad, but
it definitely "includes [a] collective decision making with the participation of all who will beaffected by the
decision."160 It anchors on the principle that the cornerstone of every democracy is that sovereignty resides in the
people.161 To ensure order in running the state’s affairs, sovereign powers were delegated and individuals would
be elected or nominated in key government positions to represent the people. On this note, the theory on
deliberative democracy may evolve to the right of the people to make government accountable. Necessarily, this
includes the right of the people to criticize acts made pursuant to governmental functions.
Speech that promotes dialogue on publicaffairs, or airs out grievances and political discontent, should thus be
protected and encouraged.
Borrowing the words of Justice Brandeis, "it is hazardous to discourage thought, hope and imagination; that fear
breeds repression; that repression breeds hate; that hate menaces stable government; that the path of safety lies in
the opportunity to discuss freely supposed grievances and proposed remedies."162
In this jurisdiction, this court held that "[t]he interest of society and the maintenance of good government demand
a full discussion of public affairs."163 This court has, thus, adopted the principle that "debate on public issues
should be uninhibited, robust,and wide open . . . [including even] unpleasantly sharp attacks on government and
public officials."164
Second, free speech should be encouraged under the concept of a market place of ideas. This theory was
articulated by Justice Holmes in that "the ultimate good desired is better reached by [the] free trade in ideas:"165
When men have realized that time has upset many fighting faiths, they may come to believe even more than they
believe the very foundations of their own conduct that the ultimate good desired is better reached by free trade in
ideas - that the best test of truth is the power of the thought to get itself accepted in the competition of the market,
and that truth is the only ground upon which their wishes safely can be carried out.166
The way it works, the exposure to the ideas of others allows one to "consider, test, and develop their own
conclusions."167 A free, open, and dynamic market place of ideas is constantly shaping new ones. This promotes
both stability and change where recurring points may crystallize and weak ones may develop. Of course, free
speech is more than the right to approve existing political beliefs and economic arrangements as it includes, "[t]o
paraphrase Justice Holmes, [the] freedom for the thought that we hate, no less than for the thought that agrees with
us."168 In fact, free speech may "best serve its high purpose when it induces a condition of unrest, creates
dissatisfaction with conditions as they are, or even stirs people to anger."169 It is in this context that we should
guard against any curtailment of the people’s right to participate in the free trade of ideas.
Third, free speech involves self-expression that enhances human dignity. This right is "a means of assuring
individual self-fulfillment,"170 among others. In Philippine Blooming Mills Employees Organization v.
Philippine Blooming Mills Co., Inc,171 this court discussed as follows:
The rights of free expression, free assembly and petition, are not only civil rights but also political rights essential
to man's enjoyment of his life, to his happiness and to his full and complete fulfillment.Thru these freedoms the
citizens can participate not merely in the periodic establishment of the government through their suffrage but also
in the administration of public affairs as well as in the discipline of abusive public officers. The citizen is accorded
these rights so that he can appeal to the appropriate governmental officers or agencies for redress and protection as
well as for the imposition of the lawful sanctions on erring public officers and employees.172 (Emphasis supplied)
Fourth, expression is a marker for group identity. For one, "[v]oluntary associations perform [an] important
democratic role [in providing] forums for the development of civil skills, for deliberation, and for the formation of
identity and community spirit[,] [and] are largely immune from [any] governmental interference."173 They also
"provide a buffer between individuals and the state - a free space for the development of individual personality,
distinct group identity, and dissident ideas - and a potential source of opposition to the state."174 Free speech must
be protected as the vehicle to find those who have similar and shared values and ideals, to join together and
forward common goals.
Fifth, the Bill of Rights, free speech included, is supposed to "protect individuals and minorities against
majoritarian abuses perpetrated through [the] framework [of democratic governance]."175 Federalist framers led
by James Madison were concerned about two potentially vulnerable groups: "the citizenry at large - majorities -
who might be tyrannized or plundered by despotic federal officials"176 and the minorities who may be oppressed
by "dominant factions of the electorate [that] capture [the] government for their own selfish ends[.]"177
According to Madison, "[i]t is of great importance in a republic not only to guard the society against the
oppression of its rulers, but to guard one part of the society against the injustice of the other part."178 We should
strive to ensure that free speech is protected especially in light of any potential oppression against those who find
themselves in the fringes on public issues.
Lastly, free speech must be protected under the safety valve theory.179 This provides that "nonviolent
manifestations of dissent reduce the likelihood of violence[.]"180 "[A] dam about to burst . . . resulting in the
‘banking up of a menacing flood of sullen anger behind the walls of restriction’"181 has been used to describe the
effect of repressing nonviolent outlets.182 In order to avoid this situation and prevent people from resorting to
violence, there is a need for peaceful methods in making passionate dissent. This includes "free expression and
political participation"183 in that they can "vote for candidates who share their views, petition their legislatures to
[make or] change laws, . . . distribute literature alerting other citizens of their concerns[,]"184 and conduct
peaceful rallies and other similar acts.185 Free speech must, thus, be protected as a peaceful means of achieving
one’s goal, considering the possibility that repression of nonviolent dissent may spill over to violent means just to
drive a point.
II.B.5
Every citizen’s expression with political consequences enjoys a high degree of protection. Respondents argue that
the tarpaulinis election propaganda, being petitioners’ way of endorsing candidates who voted against the RH Law
and rejecting those who voted for it.186 As such, it is subject to regulation by COMELEC under its constitutional
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mandate.187 Election propaganda is defined under Section 1(4) of COMELEC Resolution No. 9615 as follows:
SECTION 1. Definitions . . .
....
4. The term "political advertisement" or "election propaganda" refers to any matter broadcasted, published,
printed, displayed or exhibited, in any medium, which contain the name, image, logo, brand, insignia, color motif,
initials, and other symbol or graphic representation that is capable of being associated with a candidate or party,
and is intended to draw the attention of the public or a segment thereof to promote or oppose, directly or
indirectly, the election of the said candidate or candidates to a public office. In broadcast media, political
advertisements may take the form of spots, appearances on TV shows and radio programs, live or taped
announcements, teasers, and other forms of advertising messages or announcements used by commercial
advertisers. Political advertising includes matters, not falling within the scope of personal opinion, that appear on
any Internet website, including, but not limited to, social networks, blogging sites, and micro-blogging sites, in
return for consideration, or otherwise capable of pecuniary estimation.
On the other hand, petitioners invoke their "constitutional right to communicate their opinions, views and beliefs
about issues and candidates."188 They argue that the tarpaulin was their statement of approval and appreciation of
the named public officials’ act of voting against the RH Law, and their criticism toward those who voted in its
favor.189 It was "part of their advocacy campaign against the RH Law,"190 which was not paid for by any
candidate or political party.191 Thus, "the questioned orders which . . . effectively restrain[ed] and curtail[ed]
[their] freedom of expression should be declared unconstitutional and void."192
This court has held free speech and other intellectual freedoms as "highly ranked in our scheme of constitutional
values."193 These rights enjoy precedence and primacy.194 In Philippine Blooming Mills, this court discussed the
preferred position occupied by freedom of expression:
Property and property rights can belost thru prescription; but human rights are imprescriptible. If human rights are
extinguished by the passage of time, then the Bill of Rights is a useless attempt to limit the power of government
and ceases to be an efficacious shield against the tyranny of officials, of majorities, ofthe influential and powerful,
and of oligarchs - political, economic or otherwise.
In the hierarchy of civil liberties, the rights of free expression and of assembly occupy a preferred position as they
are essential to the preservation and vitality of our civil and political institutions; and such priority "gives these
liberties the sanctity and the sanction not permitting dubious intrusions."195 (Citations omitted)
This primordial right calls for utmost respect, more so "when what may be curtailed is the dissemination of
information to make more meaningful the equally vital right of suffrage."196 A similar idea appeared in our
jurisprudence as early as 1969, which was Justice Barredo’s concurring and dissenting opinion in Gonzales v.
COMELEC:197
I like to reiterate over and over, for it seems this is the fundamental point others miss, that genuine democracy
thrives only where the power and right of the people toelect the men to whom they would entrust the privilege to
run the affairs of the state exist. In the language of the declaration of principles of our Constitution, "The
Philippines is a republican state. Sovereignty resides in the people and all government authority emanates from
them" (Section 1, Article II). Translating this declaration into actuality, the Philippines is a republic because and
solely because the people in it can be governed only by officials whom they themselves have placed in office by
their votes. And in it is on this cornerstone that I hold it tobe self-evident that when the freedoms of speech, press
and peaceful assembly and redress of grievances are being exercised in relation to suffrage or asa means to enjoy
the inalienable right of the qualified citizen to vote, they are absolute and timeless. If our democracy and
republicanism are to be worthwhile, the conduct of public affairs by our officials must be allowed to suffer
incessant and unabating scrutiny, favorable or unfavorable, everyday and at all times. Every holder of power in
our government must be ready to undergo exposure any moment of the day or night, from January to December
every year, as it is only in this way that he can rightfully gain the confidence of the people. I have no patience for
those who would regard public dissection of the establishment as an attribute to be indulged by the people only at
certain periods of time. I consider the freedoms of speech, press and peaceful assembly and redress of grievances,
when exercised in the name of suffrage, as the very means by which the right itself to vote can only be properly
enjoyed.It stands to reason therefore, that suffrage itself would be next to useless if these liberties cannot be
untrammelled [sic] whether as to degree or time.198 (Emphasis supplied)
Not all speech are treated the same. In Chavez v. Gonzales, this court discussed that some types of speech may be
subject to regulation:
Some types of speech may be subjected to some regulation by the State under its pervasive police power, in order
that it may not be injurious to the equal right of others or those of the community or society. The difference in
treatment is expected because the relevant interests of one type of speech, e.g., political speech, may vary from
those of another, e.g., obscene speech. Distinctionshave therefore been made in the treatment, analysis, and
evaluation ofthe permissible scope of restrictions on various categories of speech. We have ruled, for example,
that in our jurisdiction slander or libel, lewd and obscene speech, as well as "fighting words" are not entitled to
constitutional protection and may be penalized.199 (Citations omitted)
We distinguish between politicaland commercial speech. Political speech refers to speech "both intended and
received as a contribution to public deliberation about some issue,"200 "foster[ing] informed and civicminded
deliberation."201 On the other hand, commercial speech has been defined as speech that does "no more than
propose a commercial transaction."202 The expression resulting from the content of the tarpaulin is, however,
definitely political speech. In Justice Brion’s dissenting opinion, he discussed that "[t]he content of the tarpaulin,
as well as the timing of its posting, makes it subject of the regulations in RA 9006 and Comelec Resolution No.
9615."203 He adds that "[w]hile indeed the RH issue, by itself,is not an electoralmatter, the slant that the
petitioners gave the issue converted the non-election issue into a live election one hence, Team Buhay and Team
Patay and the plea to support one and oppose the other."204
While the tarpaulin may influence the success or failure of the named candidates and political parties, this does not
necessarily mean it is election propaganda. The tarpaulin was not paid for or posted "in return for consideration"
by any candidate, political party, or party-list group.
The second paragraph of Section 1(4) of COMELEC Resolution No. 9615, or the rules and regulations
implementing Republic Act No. 9006 as an aid to interpret the law insofar as the facts of this case requires, states:
4. The term "political advertisement" or "election propaganda" refers to any matter broadcasted, published,
printed, displayed or exhibited, in any medium, which contain the name, image, logo, brand, insignia, color motif,
initials, and other symbol or graphic representation that is capable of being associated with a candidate or party,
and is intended to draw the attention of the public or a segment thereof to promote or oppose, directly or
indirectly, the election of the said candidate or candidates to a public office. In broadcast media, political
advertisements may take the form of spots, appearances on TV shows and radio programs, live or taped
announcements, teasers, and other forms of advertising messages or announcements used by commercial
advertisers. Political advertising includes matters, not falling within the scope of personal opinion, that appear on
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any Internet website, including, but not limited to, social networks, blogging sites, and micro-blogging sites, in
return for consideration, or otherwise capable of pecuniary estimation. (Emphasis supplied)
It is clear that this paragraph suggests that personal opinions are not included, while sponsored messages are
covered.
Thus, the last paragraph of Section 1(1) of COMELEC Resolution No. 9615 states:
SECTION 1. Definitions - As used in this Resolution:
1. The term "election campaign" or "partisan political activity" refers to an act designed to promote the election or
defeat of a particular candidate or candidates to a public office, and shall include any of the following:
....
Personal opinions, views, and preferences for candidates, contained in blogs shall not be considered acts of
election campaigning or partisan politicalactivity unless expressed by government officials in the Executive
Department, the Legislative Department, the Judiciary, the Constitutional Commissions, and members of the Civil
Service.
In any event, this case does not refer to speech in cyberspace, and its effects and parameters should be deemed
narrowly tailored only in relation to the facts and issues in this case. It also appears that such wording in
COMELEC Resolution No. 9615 does not similarly appear in Republic Act No. 9006, the law it implements.
We should interpret in this manner because of the value of political speech.
As early as 1918, in United States v. Bustos,205 this court recognized the need for full discussion of public affairs.
We acknowledged that free speech includes the right to criticize the conduct of public men:
The interest of society and the maintenance of good government demand a full discussion of public affairs.
Complete liberty to comment on the conduct of public men is a scalpel in the case of free speech. The sharp
incision of its probe relieves the abscesses of official dom. Men in public life may suffer under a hostile and an
unjust accusation; the wound can be assuaged with the balm of a clear conscience. A public officer must not be
too thin-skinned with reference to comment upon his official acts. Only thus can the intelligence and dignity of the
individual be exalted.206
Subsequent jurisprudence developed the right to petition the government for redress of grievances, allowing for
criticism, save for some exceptions.207 In the 1951 case of Espuelas v. People,208 this court noted every citizen’s
privilege to criticize his or her government, provided it is "specific and therefore constructive, reasoned or
tempered, and not a contemptuous condemnation of the entire government set-up."209
The 1927 case of People v. Titular210 involved an alleged violation of the Election Law provision "penaliz[ing]
the anonymous criticism of a candidate by means of posters or circulars."211 This court explained that it is the
poster’s anonymous character that is being penalized.212 The ponente adds that he would "dislike very muchto
see this decision made the vehicle for the suppression of public opinion."213
In 1983, Reyes v. Bagatsing214 discussed the importance of allowing individuals to vent their views. According
to this court, "[i]ts value may lie in the fact that there may be something worth hearing from the dissenter [and]
[t]hat is to ensurea true ferment of ideas."215
Allowing citizens to air grievances and speak constructive criticisms against their government contributes to every
society’s goal for development. It puts forward matters that may be changed for the better and ideas that may be
deliberated on to attain that purpose. Necessarily, it also makes the government accountable for acts that violate
constitutionally protected rights.
In 1998, Osmeña v. COMELEC found Section 11(b) of Republic Act No. 6646, which prohibits mass media from
selling print space and air time for campaign except to the COMELEC, to be a democracy-enhancing measure.216
This court mentioned how "discussion of public issues and debate on the qualifications of candidates in an election
are essential to the proper functioning of the government established by our Constitution."217
As pointed out by petitioners, "speech serves one of its greatest public purposes in the context of elections when
the free exercise thereof informs the people what the issues are, and who are supporting what issues."218 At the
heart of democracy is every advocate’s right to make known what the people need to know,219 while the
meaningful exercise of one’s right of suffrage includes the right of every voter to know what they need to know in
order to make their choice.
Thus, in Adiong v. COMELEC,220 this court discussed the importance of debate on public issues, and the
freedom of expression especially in relation to information that ensures the meaningful exercise of the right of
suffrage:
We have adopted the principle that debate on public issues should be uninhibited, robust, and wide open and that it
may well include vehement, caustic and sometimes unpleasantly sharp attacks on government and public officials.
Too many restrictions will deny to people the robust, uninhibited, and wide open debate, the generating of interest
essential if our elections will truly be free, clean and honest.
We have also ruled that the preferred freedom of expression calls all the more for the utmost respect when what
may be curtailed is the dissemination of information to make more meaningful the equally vital right of
suffrage.221 (Emphasis supplied, citations omitted)
Speech with political consequences isat the core of the freedom of expression and must be protected by this court.
Justice Brion pointed out that freedomof expression "is not the god of rights to which all other rights and even
government protection of state interest must bow."222
The right to freedom of expression isindeed not absolute. Even some forms of protected speech are still subjectto
some restrictions. The degree of restriction may depend on whether the regulation is content-based or content-
neutral.223 Content-based regulations can either be based on the viewpoint of the speaker or the subject of the
expression.
II.B.6
Content-based regulation
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COMELEC contends that the order for removal of the tarpaulin is a content-neutral regulation. The order was
made simply because petitioners failed to comply with the maximum size limitation for lawful election
propaganda.224
On the other hand, petitioners argue that the present size regulation is content-based as it applies only to political
speech and not to other forms of speech such as commercial speech.225 "[A]ssuming arguendo that the size
restriction sought to be applied . . . is a mere time, place, and manner regulation, it’s still unconstitutional for lack
of a clear and reasonable nexus with a constitutionally sanctioned objective."226
The regulation may reasonably be considered as either content-neutral or content-based.227 Regardless, the
disposition of this case will be the same. Generally, compared with other forms of speech, the proposed speech is
content-based.
As pointed out by petitioners, the interpretation of COMELEC contained in the questioned order applies only to
posters and tarpaulins that may affect the elections because they deliver opinions that shape both their choices. It
does not cover, for instance, commercial speech.
Worse, COMELEC does not point to a definite view of what kind of expression of non-candidates will be
adjudged as "election paraphernalia." There are no existing bright lines to categorize speech as election-related
and those that are not. This is especially true when citizens will want to use their resources to be able to raise
public issues that should be tackled by the candidates as what has happened in this case. COMELEC’s discretion
to limit speech in this case is fundamentally unbridled.
Size limitations during elections hit ata core part of expression. The content of the tarpaulin is not easily divorced
from the size of its medium.
Content-based regulation bears a heavy presumption of invalidity, and this court has used the clear and present
danger rule as measure.228 Thus, in Chavez v. Gonzales:
A content-based regulation, however, bears a heavy presumption of invalidity and is measured against the clear
and present danger rule. The latter will pass constitutional muster only if justified by a compelling reason, and the
restrictions imposedare neither overbroad nor vague.229 (Citations omitted)
Under this rule, "the evil consequences sought to be prevented must be substantive, ‘extremely serious and the
degree of imminence extremely high.’"230 "Only when the challenged act has overcome the clear and present
danger rule will it pass constitutional muster, with the government having the burden of overcoming the presumed
unconstitutionality."231
Even with the clear and present danger test, respondents failed to justify the regulation. There is no compelling
and substantial state interest endangered by the posting of the tarpaulinas to justify curtailment of the right of
freedom of expression. There is no reason for the state to minimize the right of non-candidate petitioners to post
the tarpaulin in their private property. The size of the tarpaulin does not affect anyone else’s constitutional rights.
Content-based restraint or censorship refers to restrictions "based on the subject matter of the utterance or
speech."232 In contrast, content-neutral regulation includes controls merely on the incidents of the speech such as
time, place, or manner of the speech.233
This court has attempted to define "content-neutral" restraints starting with the 1948 case of Primicias v.
Fugoso.234 The ordinance in this case was construed to grant the Mayor discretion only to determine the public
places that may be used for the procession ormeeting, but not the power to refuse the issuance of a permit for such
procession or meeting.235 This court explained that free speech and peaceful assembly are "not absolute for it
may be so regulated that it shall not beinjurious to the equal enjoyment of others having equal rights, nor injurious
to the rights of the community or society."236
The earlier case of Calalang v. Williams237 involved the National Traffic Commission resolution that prohibited
the passing of animal-drawn vehicles along certain roads at specific hours.238 This court similarly discussed
police power in that the assailed rules carry outthe legislative policy that "aims to promote safe transit upon and
avoid obstructions on national roads, in the interest and convenience of the public."239
As early as 1907, United States v. Apurado240 recognized that "more or less disorder will mark the public
assembly of the people to protest against grievances whether real or imaginary, because on such occasions feeling
is always wrought to a high pitch of excitement. . . ."241 It is with this backdrop that the state is justified in
imposing restrictions on incidental matters as time, place, and manner of the speech.
In the landmark case of Reyes v. Bagatsing, this court summarized the steps that permit applicants must follow
which include informing the licensing authority ahead of time as regards the date, public place, and time of the
assembly.242 This would afford the public official time to inform applicants if there would be valid objections,
provided that the clear and present danger test is the standard used for his decision and the applicants are given the
opportunity to be heard.243 This ruling was practically codified in Batas Pambansa No. 880, otherwise known as
the Public Assembly Act of 1985.
Subsequent jurisprudence have upheld Batas Pambansa No. 880 as a valid content-neutral regulation. In the 2006
case of Bayan v. Ermita,244 this court discussed how Batas Pambansa No. 880 does not prohibit assemblies but
simply regulates their time, place, and manner.245 In 2010, this court found in Integrated Bar of the Philippines v.
Atienza246 that respondent Mayor Atienza committed grave abuse of discretion when he modified the rally permit
by changing the venue from Mendiola Bridge to Plaza Miranda without first affording petitioners the opportunity
to be heard.247
We reiterate that the regulation involved at bar is content-based. The tarpaulin content is not easily divorced from
the size of its medium.
II.B.7
Justice Carpio and Justice Perlas-Bernabe suggest that the provisions imposing a size limit for tarpaulins are
content-neutral regulations as these "restrict the mannerby which speech is relayed but not the content of what is
conveyed."248
If we apply the test for content-neutral regulation, the questioned acts of COMELEC will not pass the three
requirements for evaluating such restraints on freedom of speech.249 "When the speech restraints take the form of
a content-neutral regulation, only a substantial governmental interest is required for its validity,"250 and it is
subject only to the intermediate approach.251
This intermediate approach is based on the test that we have prescribed in several cases.252 A content-neutral
government regulation is sufficiently justified:
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[1] if it is within the constitutional power of the Government; [2] if it furthers an important or substantial
governmental interest; [3] if the governmental interest is unrelated to the suppression of free expression; and [4] if
the incident restriction on alleged [freedom of speech & expression] is no greater than is essential to the
furtherance of that interest.253
On the first requisite, it is not within the constitutional powers of the COMELEC to regulate the tarpaulin. As
discussed earlier, this is protected speech by petitioners who are non-candidates. On the second requirement, not
only must the governmental interest be important or substantial, it must also be compelling as to justify the
restrictions made.
Compelling governmental interest would include constitutionally declared principles. We have held, for example,
that "the welfare of children and the State’s mandate to protect and care for them, as parens patriae,254 constitute
a substantial and compelling government interest in regulating . . . utterances in TV broadcast."255
Respondent invokes its constitutional mandate to ensure equal opportunity for public information campaigns
among candidates in connection with the holding of a free, orderly, honest, peaceful, and credible election.256
Justice Brion in his dissenting opinion discussed that "[s]ize limits to posters are necessary to ensure equality of
public information campaigns among candidates, as allowing posters with different sizes gives candidates and
their supporters the incentive to post larger posters[,] [and] [t]his places candidates with more money and/or with
deep-pocket supporters at an undue advantage against candidates with more humble financial capabilities."257
First, Adiong v. COMELEC has held that this interest is "not as important as the right of [a private citizen] to
freely express his choice and exercise his right of free speech."258 In any case, faced with both rights to freedom
of speech and equality, a prudent course would be to "try to resolve the tension in a way that protects the right of
participation."259
Second, the pertinent election lawsrelated to private property only require that the private property owner’s
consent be obtained when posting election propaganda in the property.260 This is consistent with the fundamental
right against deprivation of property without due process of law.261 The present facts do not involve such posting
of election propaganda absent consent from the property owner. Thus, this regulation does not apply in this case.
Respondents likewise cite the Constitution262 on their authority to recommend effective measures to minimize
election spending. Specifically, Article IX-C, Section 2(7) provides:
Sec. 2. The Commission on Elections shall exercise the following powers and functions:
....
(7) Recommend to the Congress effective measures to minimize election spending, including limitation of places
where propaganda materials shall be posted, and to prevent and penalize all forms of election frauds, offenses,
malpractices, and nuisance candidates. (Emphasis supplied) This does not qualify as a compelling and substantial
government interest to justify regulation of the preferred right to freedom of expression.
The assailed issuances for the removal of the tarpaulin are based on the two feet (2’) by three feet (3’) size
limitation under Section 6(c) of COMELEC Resolution No. 9615. This resolution implements the Fair Election
Act that provides for the same size limitation.263
This court held in Adiong v. COMELEC that "[c]ompared to the paramount interest of the State in guaranteeing
freedom of expression, any financial considerations behind the regulation are of marginal significance."264 In
fact, speech with political consequences, as in this case, should be encouraged and not curtailed. As petitioners
pointed out, the size limitation will not serve the objective of minimizing election spending considering there is no
limit on the number of tarpaulins that may be posted.265
The third requisite is likewise lacking. We look not only at the legislative intent or motive in imposing the
restriction, but more so at the effects of such restriction, if implemented. The restriction must not be narrowly
tailored to achieve the purpose. It must be demonstrable. It must allow alternative avenues for the actor to make
speech.
In this case, the size regulation is not unrelated to the suppression of speech. Limiting the maximum sizeof the
tarpaulin would render ineffective petitioners’ message and violate their right to exercise freedom of expression.
The COMELEC’s act of requiring the removal of the tarpaulin has the effect of dissuading expressions with
political consequences. These should be encouraged, more so when exercised to make more meaningful the
equally important right to suffrage.
The restriction in the present case does not pass even the lower test of intermediate scrutiny for content-neutral
regulations.
The action of the COMELEC in thiscase is a strong deterrent to further speech by the electorate. Given the stature
of petitioners and their message, there are indicators that this will cause a "chilling effect" on robust discussion
during elections.
The form of expression is just as important as the message itself. In the words of Marshall McLuhan, "the medium
is the message."266 McLuhan’s colleague and mentor Harold Innis has earlier asserted that "the materials on
which words were written down have often counted for more than the words themselves."267
III
Freedom of expression and equality
III.A
The possibility of abuse
Of course, candidates and political parties do solicit the help of private individuals for the endorsement of their
electoral campaigns.
On the one extreme, this can take illicit forms such as when endorsement materials in the form of tarpaulins,
posters, or media advertisements are made ostensibly by "friends" but in reality are really paid for by the candidate
or political party. This skirts the constitutional value that provides for equal opportunities for all candidates.
However, as agreed by the parties during the oral arguments in this case, this is not the situation that confronts us.
In such cases, it will simply be a matter for investigation and proof of fraud on the part of the COMELEC.
25 | AEP
The guarantee of freedom of expression to individuals without any relationship to any political candidate should
not be held hostage by the possibility of abuse by those seeking to be elected. It is true that there can be
underhanded, covert, or illicit dealings so as to hide the candidate’s real levels of expenditures. However, labelling
all expressions of private parties that tend to have an effect on the debate in the elections as election paraphernalia
would be too broad a remedy that can stifle genuine speech like in this case. Instead, to address this evil, better and
more effective enforcement will be the least restrictive means to the fundamental freedom.
On the other extreme, moved by the credentials and the message of a candidate, others will spend their own
resources in order to lend support for the campaigns. This may be without agreement between the speaker and the
candidate or his or her political party. In lieu of donating funds to the campaign, they will instead use their
resources directly in a way that the candidate or political party would have doneso. This may effectively skirt the
constitutional and statutory limits of campaign spending.
Again, this is not the situation in this case.
The message of petitioners in thiscase will certainly not be what candidates and political parties will carry in their
election posters or media ads. The message of petitioner, taken as a whole, is an advocacy of a social issue that it
deeply believes. Through rhetorical devices, it communicates the desire of Diocese that the positions of those who
run for a political position on this social issue be determinative of how the public will vote. It primarily advocates
a stand on a social issue; only secondarily — even almost incidentally — will cause the election or non-election of
a candidate.
The twin tarpaulins consist of satire of political parties. Satire is a "literary form that employs such devices as
sarcasm, irony and ridicule to deride prevailing vices or follies,"268 and this may target any individual or group in
society, private and government alike. It seeks to effectively communicate a greater purpose, often used for
"political and social criticism"269 "because it tears down facades, deflates stuffed shirts, and unmasks hypocrisy. .
. . Nothing is more thoroughly democratic than to have the high-and-mighty lampooned and spoofed."270
Northrop Frye, wellknown in this literary field, claimed that satire had two defining features: "one is wit or humor
founded on fantasy or a sense of the grotesque and absurd, the other is an object of attack."271 Thus, satire
frequently uses exaggeration, analogy, and other rhetorical devices.
The tarpaulins exaggerate. Surely, "Team Patay" does not refer to a list of dead individuals nor could the
Archbishop of the Diocese of Bacolod have intended it to mean that the entire plan of the candidates in his list was
to cause death intentionally. The tarpaulin caricatures political parties and parodies the intention of those in the
list. Furthermore, the list of "Team Patay" is juxtaposed with the list of "Team Buhay" that further emphasizes the
theme of its author: Reproductive health is an important marker for the church of petitioners to endorse.
The messages in the tarpaulins are different from the usual messages of candidates. Election paraphernalia from
candidates and political parties are more declarative and descriptive and contain no sophisticated literary allusion
to any social objective. Thus, they usually simply exhort the public to vote for a person with a brief description of
the attributes of the candidate. For example "Vote for [x], Sipag at Tiyaga," "Vote for [y], Mr. Palengke," or "Vote
for [z], Iba kami sa Makati."
This court’s construction of the guarantee of freedom of expression has always been wary of censorship or
subsequent punishment that entails evaluation of the speaker’s viewpoint or the content of one’s speech. This is
especially true when the expression involved has political consequences. In this case, it hopes to affect the type of
deliberation that happens during elections. A becoming humility on the part of any human institution no matter
how endowed with the secular ability to decide legal controversies with finality entails that we are not the keepers
of all wisdom.
Humanity’s lack of omniscience, even acting collectively, provides space for the weakest dissent. Tolerance has
always been a libertarian virtue whose version is embedded in our Billof Rights. There are occasional heretics of
yesterday that have become our visionaries. Heterodoxies have always given us pause. The unforgiving but
insistent nuance that the majority surely and comfortably disregards provides us with the checks upon reality that
may soon evolve into creative solutions to grave social problems. This is the utilitarian version. It could also be
that it is just part of human necessity to evolve through being able to express or communicate.
However, the Constitution we interpret is not a theoretical document. It contains other provisions which, taken
together with the guarantee of free expression, enhances each other’s value. Among these are the provisions that
acknowledge the idea of equality. In shaping doctrine construing these constitutional values, this court needs to
exercise extraordinary prudence and produce narrowly tailored guidance fit to the facts as given so as not to
unwittingly cause the undesired effect of diluting freedoms as exercised in reality and, thus, render them
meaningless.
III.B.
Speech and equality:
Some considerations We first establish that there are two paradigms of free speech that separate at the point of
giving priority to equality vis-à-vis liberty.272
In an equality-based approach, "politically disadvantaged speech prevails over regulation[,] but regulation
promoting political equality prevails over speech."273 This view allows the government leeway to redistribute or
equalize ‘speaking power,’ such as protecting, even implicitly subsidizing, unpopular or dissenting voices often
systematically subdued within society’s ideological ladder.274 This view acknowledges that there are dominant
political actors who, through authority, power, resources, identity, or status, have capabilities that may drown out
the messages of others. This is especially true in a developing or emerging economy that is part of the majoritarian
world like ours.
The question of libertarian tolerance
This balance between equality and the ability to express so as to find one’s authentic self or to participate in the
self determination of one’s communities is not new only to law. It has always been a philosophical problematique.
In his seminal work, Repressive Tolerance, philosopher and social theorist Herbert Marcuse recognized how
institutionalized inequality exists as a background limitation, rendering freedoms exercised within such limitation
as merely "protect[ing] the already established machinery of discrimination."275 In his view, any improvement "in
the normal course of events" within an unequal society, without subversion, only strengthens existing interests of
those in power and control.276
In other words, abstract guarantees of fundamental rights like freedom of expression may become meaningless if
not taken in a real context. This tendency to tackle rights in the abstract compromises liberties. In his words:
Liberty is self-determination, autonomy—this is almost a tautology, but a tautology which results from a whole
series of synthetic judgments. It stipulates the ability to determine one’s own life: to be able to determine what to
do and what not to do, what to suffer and what not. But the subject of this autonomy is never the contingent,
private individual as that which he actually is or happens to be; it is rather the individual as a human being who is
26 | AEP
capable of being free with the others. And the problem of making possible such a harmony between every
individual liberty and the other is not that of finding a compromise between competitors, or between freedom and
law, between general and individual interest, common and private welfare in an established society, but of creating
the society in which man is no longer enslaved by institutions which vitiate self-determination from the beginning.
In other words, freedom is still to be created even for the freest of the existing societies.277 (Emphasis in the
original)
Marcuse suggests that the democratic argument — with all opinions presented to and deliberated by the people —
"implies a necessary condition, namely, that the people must be capable of deliberating and choosing on the basis
of knowledge, that they must have access to authentic information, and that, on this basis, their evaluation must be
the result of autonomous thought."278 He submits that "[d]ifferent opinions and ‘philosophies’ can no longer
compete peacefully for adherence and persuasion on rational grounds: the ‘marketplace of ideas’ is organized and
delimited by those who determine the national and the individual interest."279 A slant toward left manifests from
his belief that "there is a ‘natural right’ of resistance for oppressed and overpowered minorities to use extralegal
means if the legal ones have proved to be inadequate."280 Marcuse, thus, stands for an equality that breaks away
and transcends from established hierarchies, power structures, and indoctrinations. The tolerance of libertarian
society he refers to as "repressive tolerance."
Legal scholars
The 20th century also bears witness to strong support from legal scholars for "stringent protections of expressive
liberty,"281 especially by political egalitarians. Considerations such as "expressive, deliberative, and
informational interests,"282 costs or the price of expression, and background facts, when taken together, produce
bases for a system of stringent protections for expressive liberties.283
Many legal scholars discuss the interest and value of expressive liberties. Justice Brandeis proposed that "public
discussion is a political duty."284 Cass Sustein placed political speech on the upper tier of his twotier model for
freedom of expression, thus, warranting stringent protection.285 He defined political speech as "both intended and
received as a contribution to public deliberation about some issue."286
But this is usually related also tofair access to opportunities for such liberties.287 Fair access to opportunity is
suggested to mean substantive equality and not mere formal equalitysince "favorable conditions for realizing the
expressive interest will include some assurance of the resources required for expression and some guarantee that
efforts to express views on matters of common concern will not be drowned out by the speech of betterendowed
citizens."288 Justice Brandeis’ solution is to "remedy the harms of speech with more speech."289 This view
moves away from playing down the danger as merely exaggerated, toward "tak[ing] the costs seriously and
embrac[ing] expression as the preferred strategy for addressing them."290 However, in some cases, the idea of
more speech may not be enough. Professor Laurence Tribe observed the need for context and "the specification of
substantive values before [equality] has full meaning."291 Professor Catherine A. MacKinnon adds that "equality
continues to be viewed in a formal rather than a substantive sense."292 Thus, more speech can only mean more
speech from the few who are dominant rather than those who are not.
Our jurisprudence
This court has tackled these issues.
Osmeña v. COMELEC affirmed National Press Club v. COMELEC on the validity of Section 11(b) ofthe
Electoral Reforms Law of 1987.293 This section "prohibits mass media from selling or giving free of charge print
space or air time for campaign or other political purposes, except to the Commission on Elections."294 This court
explained that this provision only regulates the time and manner of advertising in order to ensure media equality
among candidates.295 This court grounded this measure on constitutional provisions mandating political
equality:296 Article IX-C, Section 4
Section 4. The Commission may, during the election period, supervise or regulate the enjoyment or utilization of
all franchises or permits for the operation of transportation and other public utilities, media of communication or
information, all grants, special privileges, or concessions granted by the Government or any subdivision, agency,
or instrumentality thereof, including any government-owned or controlled corporation or its subsidiary. Such
supervision or regulation shall aim to ensure equal opportunity, time, and space, and the right to reply, including
reasonable, equal rates therefor, for public information campaigns and forums among candidates in connection
with the objective of holding free, orderly, honest, peaceful, and credible elections. (Emphasis supplied)
Article XIII, Section 1
Section 1. The Congress shall give highest priorityto the enactment of measures that protect and enhance the right
of all the people to human dignity, reducesocial, economic, and political inequalities, and remove cultural
inequities by equitably diffusing wealth and political power for the common good.
To this end, the State shall regulate the acquisition, ownership, use, and disposition of property and its increments.
(Emphasis supplied)
Article II, Section 26
Section 26. The State shall guarantee equal access to opportunities for public service, and prohibit political
dynasties as may be defined by law. (Emphasis supplied)
Thus, in these cases, we have acknowledged the Constitution’s guarantee for more substantive expressive
freedoms that take equality of opportunities into consideration during elections.
The other view
However, there is also the other view. This is that considerations of equality of opportunity or equality inthe
ability of citizens as speakers should not have a bearing in free speech doctrine. Under this view, "members of the
public are trusted to make their own individual evaluations of speech, and government is forbidden to intervene
for paternalistic or redistributive reasons . . . [thus,] ideas are best left to a freely competitive ideological
market."297 This is consistent with the libertarian suspicion on the use of viewpoint as well as content to evaluate
the constitutional validity or invalidity of speech.
The textual basis of this view is that the constitutional provision uses negative rather than affirmative language. It
uses ‘speech’ as its subject and not ‘speakers’.298 Consequently, the Constitution protects free speech per se,
indifferent to the types, status, or associations of its speakers.299 Pursuant to this, "government must leave
speakers and listeners in the private order to their own devices in sorting out the relative influence of speech."300
Justice Romero’s dissenting opinion in Osmeña v. COMELEC formulates this view that freedom of speech
includes "not only the right to express one’s views, but also other cognate rights relevant to the free
communication [of] ideas, not excluding the right to be informed on matters of public concern."301 She adds:
27 | AEP
And since so many imponderables may affect the outcome of elections — qualifications of voters and candidates,
education, means of transportation, health, public discussion, private animosities, the weather, the threshold of a
voter’s resistance to pressure — the utmost ventilation of opinion of men and issues, through assembly,
association and organizations, both by the candidate and the voter, becomes a sine qua non for elections to truly
reflect the will of the electorate.302 (Emphasis supplied)
Justice Romero’s dissenting opinion cited an American case, if only to emphasize free speech primacy such
that"courts, as a rule are wary to impose greater restrictions as to any attempt to curtail speeches with political
content,"303 thus:
the concept that the government may restrict the speech of some elements in our society in order to enhance the
relative voice of the others is wholly foreign to the First Amendment which was designed to "secure the widest
possible dissemination of information from diverse and antagonistic sources" and "to assure unfettered interchange
of ideas for the bringing about of political and social changes desired by the people."304
This echoes Justice Oliver Wendell Holmes’ submission "that the market place of ideas is still the best alternative
to censorship."305
Parenthetically and just to provide the whole detail of the argument, the majority of the US Supreme Court in the
campaign expenditures case of Buckley v. Valeo "condemned restrictions (even if content-neutral) on expressive
liberty imposed in the name of ‘enhanc[ing] the relative voice of others’ and thereby ‘equaliz[ing] access to the
political arena."306 The majority did not use the equality-based paradigm.
One flaw of campaign expenditurelimits is that "any limit placed on the amount which a person can speak, which
takes out of his exclusive judgment the decision of when enough is enough, deprives him of his free speech."307
Another flaw is how "[a]ny quantitative limitation on political campaigning inherently constricts the sum of public
information and runs counter to our ‘profound national commitment that debate on public issues should be
uninhibited, robust, and wide-open.’"308
In fact, "[c]onstraining those who have funds or have been able to raise funds does not ease the plight of those
without funds in the first place . . . [and] even if one’s main concern isslowing the increase in political costs, it
may be more effective torely on market forces toachieve that result than on active legal intervention."309
According to Herbert Alexander, "[t]o oppose limitations is not necessarily to argue that the sky’s the limit
[because in] any campaign there are saturation levels and a point where spending no longer pays off in votes per
dollar."310
III. C.
When private speech amounts
to election paraphernalia
The scope of the guarantee of free expression takes into consideration the constitutional respect for human
potentiality and the effect of speech. It valorizes the ability of human beings to express and their necessity to
relate. On the other hand, a complete guarantee must also take into consideration the effects it will have in a
deliberative democracy. Skewed distribution of resources as well as the cultural hegemony of the majority may
have the effect of drowning out the speech and the messages of those in the minority. In a sense, social inequality
does have its effect on the exercise and effect of the guarantee of free speech. Those who have more will have
better access to media that reaches a wider audience than those who have less. Those who espouse the more
popular ideas will have better reception than the subversive and the dissenters of society.To be really heard and
understood, the marginalized view normally undergoes its own degree of struggle.
The traditional view has been to tolerate the viewpoint of the speaker and the content of his or her expression. This
view, thus, restricts laws or regulation that allows public officials to make judgments of the value of such
viewpoint or message content. This should still be the principal approach.
However, the requirements of the Constitution regarding equality in opportunity must provide limits to some
expression during electoral campaigns.
Thus clearly, regulation of speech in the context of electoral campaigns made by candidates or the members of
their political parties or their political parties may be regulated as to time, place, and manner. This is the effect of
our rulings in Osmeña v. COMELEC and National Press Club v. COMELEC.
Regulation of speech in the context of electoral campaigns made by persons who are not candidates or who do not
speak as members of a political party which are, taken as a whole, principally advocacies of a social issue that the
public must consider during elections is unconstitutional. Such regulation is inconsistent with the guarantee of
according the fullest possible range of opinions coming from the electorate including those that can catalyze
candid, uninhibited, and robust debate in the criteria for the choice of a candidate.
This does not mean that there cannot be a specie of speech by a private citizen which will not amount toan election
paraphernalia to be validly regulated by law.
Regulation of election paraphernalia will still be constitutionally valid if it reaches into speech of persons who are
not candidates or who do not speak as members of a political party if they are not candidates, only if what is
regulated is declarative speech that, taken as a whole, has for its principal object the endorsement of a candidate
only. The regulation (a) should be provided by law, (b) reasonable, (c) narrowly tailored to meet the objective of
enhancing the opportunity of all candidates to be heard and considering the primacy of the guarantee of free
expression, and (d) demonstrably the least restrictive means to achieve that object. The regulation must only be
with respect to the time, place, and manner of the rendition of the message. In no situation may the speech be
prohibited or censored onthe basis of its content. For this purpose, it will notmatter whether the speech is made
with or on private property.
This is not the situation, however, in this case for two reasons. First, as discussed, the principal message in the
twin tarpaulins of petitioners consists of a social advocacy.
Second, as pointed out in the concurring opinion of Justice Antonio Carpio, the present law — Section 3.3 of
Republic Act No. 9006 and Section 6(c) of COMELEC Resolution No. 9615 — if applied to this case, will not
pass the test of reasonability. A fixed size for election posters or tarpaulins without any relation to the distance
from the intended average audience will be arbitrary. At certain distances, posters measuring 2 by 3 feet could no
longer be read by the general public and, hence, would render speech meaningless. It will amount to the
abridgement of speech with political consequences.
IV
Right to property
28 | AEP
Other than the right to freedom of expression311 and the meaningful exercise of the right to suffrage,312 the
present case also involves one’s right to property.313
Respondents argue that it is the right of the state to prevent the circumvention of regulations relating to election
propaganda by applying such regulations to private individuals.314 Certainly, any provision or regulation can be
circumvented. But we are not confronted with this possibility. Respondents agree that the tarpaulin in question
belongs to petitioners. Respondents have also agreed, during the oral arguments, that petitioners were neither
commissioned nor paid by any candidate or political party to post the material on their walls.
Even though the tarpaulin is readily seen by the public, the tarpaulin remains the private property of petitioners.
Their right to use their property is likewise protected by the Constitution.
In Philippine Communications Satellite Corporation v. Alcuaz:315
Any regulation, therefore, which operates as an effective confiscation of private property or constitutes an
arbitrary or unreasonable infringement of property rights is void, because it is repugnant to the constitutional
guaranties of due process and equal protection of the laws.316 (Citation omitted)
This court in Adiong held that a restriction that regulates where decals and stickers should be posted is "so broad
that it encompasses even the citizen’s private property."317 Consequently, it violates Article III, Section 1 of the
Constitution which provides thatno person shall be deprived of his property without due process of law. This court
explained:
Property is more than the mere thing which a person owns, it includes the right to acquire, use, and dispose of it;
and the Constitution, in the 14th Amendment, protects these essential attributes.
Property is more than the mere thing which a person owns. It is elementary that it includes the right to acquire,
use, and dispose of it. The Constitution protects these essential attributes of property. Holden v. Hardy, 169 U.S.
366, 391, 41 L. ed. 780, 790, 18 Sup. Ct. Rep. 383. Property consists of the free use, enjoyment, and disposal of a
person’s acquisitions without control or diminution save by the law of the land. 1 Cooley’s Bl. Com. 127.
(Buchanan v. Warley 245 US 60 [1917])318
This court ruled that the regulation in Adiong violates private property rights:
The right to property may be subject to a greater degree of regulation but when this right is joined by a "liberty"
interest, the burden of justification on the part of the Government must be exceptionally convincing and
irrefutable. The burden is not met in this case.
Section 11 of Rep. Act 6646 is so encompassing and invasive that it prohibits the posting or display of election
propaganda in any place, whether public or private, except inthe common poster areas sanctioned by COMELEC.
This means that a private person cannot post his own crudely prepared personal poster on his own front dooror on
a post in his yard. While the COMELEC will certainly never require the absurd, there are no limits to what
overzealous and partisan police officers, armed with a copy of the statute or regulation, may do.319 Respondents
ordered petitioners, who are private citizens, to remove the tarpaulin from their own property. The absurdity of the
situation is in itself an indication of the unconstitutionality of COMELEC’s interpretation of its powers.
Freedom of expression can be intimately related with the right to property. There may be no expression when
there is no place where the expression may be made. COMELEC’s infringement upon petitioners’ property rights
as in the present case also reaches out to infringement on their fundamental right to speech.
Respondents have not demonstrated thatthe present state interest they seek to promote justifies the intrusion into
petitioners’ property rights. Election laws and regulations must be reasonable. It must also acknowledge a private
individual’s right to exercise property rights. Otherwise, the due process clause will be violated.
COMELEC Resolution No. 9615 and the Fair Election Act intend to prevent the posting of election propaganda in
private property without the consent of the owners of such private property. COMELEC has incorrectly
implemented these regulations. Consistent with our ruling in Adiong, we find that the act of respondents in
seeking to restrain petitioners from posting the tarpaulin in their own private property is an impermissible
encroachments on the right to property.
V religion under certain circumstances. Accommodations are government policies that take religion specifically
Tarpaulin and its message are not religious speech
We proceed to the last issues pertaining to whether the COMELEC in issuing the questioned notice and letter
violated the right of petitioners to the free exercise of their religion.
At the outset, the Constitution mandates the separation of church and state.320 This takes many forms. Article III,
Section 5 of the Constitution, for instance provides:
Section 5. No law shall be made respecting an establishment of religion, or prohibiting the free exercise thereof.
The free exercise and enjoyment of religious profession and worship, without discrimination or preference, shall
forever be allowed. Noreligious test shall be required for the exercise of civil or political rights.
There are two aspects of this provision.321 The first is the none stablishment clause.322 Second is the free
exercise and enjoyment of religious profession and worship.323
The second aspect is atissue in this case.
Clearly, not all acts done by those who are priests, bishops, ustadz, imams, or any other religious make such act
immune from any secular regulation.324 The religious also have a secular existence. They exist within a society
that is regulated by law.
The Bishop of Bacolod caused the posting of the tarpaulin. But not all acts of a bishop amounts to religious
expression. This notwithstanding petitioners’ claim that "the views and position of the petitioners, the Bishop and
the Diocese of Bacolod, on the RH Bill is inextricably connected to its Catholic dogma, faith, and moral teachings.
. . ."325
The difficulty that often presents itself in these cases stems from the reality that every act can be motivated by
moral, ethical, and religious considerations. In terms of their effect on the corporeal world, these acts range from
belief, to expressions of these faiths, to religious ceremonies, and then to acts of a secular character that may, from
the point of view of others who do not share the same faith or may not subscribe to any religion, may not have any
religious bearing.
29 | AEP
Definitely, the characterizations ofthe religious of their acts are not conclusive on this court. Certainly, our powers
of adjudication cannot be blinded by bare claims that acts are religious in nature.
Petitioners erroneously relied on the case of Ebralinag v. The Division Superintendent of Schools of Cebu326 in
claiming that the court "emphatically" held that the adherents ofa particular religion shall be the ones to determine
whether a particular matter shall be considered ecclesiastical in nature.327 This court in Ebralinagexempted
Jehovah’s Witnesses from participating in the flag ceremony "out of respect for their religious beliefs, [no matter
how] "bizarre" those beliefsmay seem to others."328 This court found a balance between the assertion of a
religious practice and the compelling necessities of a secular command. It was an early attempt at accommodation
of religious beliefs.
In Estrada v. Escritor,329 this court adopted a policy of benevolent neutrality:
With religion looked upon with benevolence and not hostility, benevolent neutrality allows accommodation of
intoaccount not to promote the government’s favored form of religion, but to allow individuals and groups to
exercise their religion without hindrance. Their purpose or effect therefore is to remove a burden on, or facilitate
the exercise of, a person’s or institution’s religion. As Justice Brennan explained, the "government [may] take
religion into account . . . to exempt, when possible, from generally applicable governmental regulation individuals
whose religious beliefs and practices would otherwise thereby be infringed, or to create without state involvement
an atmosphere in which voluntary religious exercise may flourish."330
This court also discussed the Lemon test in that case, such that a regulation is constitutional when: (1) it has a
secular legislative purpose; (2) it neither advances nor inhibits religion; and (3) it does not foster an excessive
entanglement with religion.331
As aptly argued by COMELEC, however, the tarpaulin, on its face, "does not convey any religious doctrine of the
Catholic church."332 That the position of the Catholic church appears to coincide with the message of the
tarpaulin regarding the RH Law does not, by itself, bring the expression within the ambit of religious speech. On
the contrary, the tarpaulin clearly refers to candidates classified under "Team Patay" and "Team Buhay" according
to their respective votes on the RH Law.
The same may be said of petitioners’ reliance on papal encyclicals to support their claim that the expression onthe
tarpaulin is an ecclesiastical matter. With all due respect to the Catholic faithful, the church doctrines relied upon
by petitioners are not binding upon this court. The position of the Catholic religion in the Philippines as regards
the RH Law does not suffice to qualify the posting by one of its members of a tarpaulin as religious speech solely
on such basis. The enumeration of candidates on the face of the tarpaulin precludes any doubtas to its nature as
speech with political consequences and not religious speech.
Furthermore, the definition of an "ecclesiastical affair" in Austria v. National Labor Relations Commission333
cited by petitioners finds no application in the present case. The posting of the tarpaulin does not fall within the
category of matters that are beyond the jurisdiction of civil courts as enumerated in the Austriacase such as
"proceedings for excommunication, ordinations of religious ministers, administration of sacraments and other
activities withattached religious significance."334
A FINAL NOTE
We maintain sympathies for the COMELEC in attempting to do what it thought was its duty in this case.
However, it was misdirected.
COMELEC’s general role includes a mandate to ensure equal opportunities and reduce spending among
candidates and their registered political parties. It is not to regulate or limit the speech of the electorate as it strives
to participate inthe electoral exercise.
WHEREFORE, the instant petition is GRANTED. The temporary restraining order previously issued is hereby
made permanent. The act of the COMELEC in issuing the assailed notice dated February 22, 2013 and letter dated
February 27, 2013 is declared unconstitutional.
SO ORDERED.

The tarpaulin in question may be viewed as producing a caricature of those who are running for public
office.Their message may be construed generalizations of very complex individuals and party-list organizations.

They are classified into black and white: as belonging to "Team Patay" or "Team Buhay."

But this caricature, though not agreeable to some, is still protected speech.

That petitioners chose to categorize them as purveyors of death or of life on the basis of a single issue — and a
complex piece of legislation at that — can easily be interpreted as anattempt to stereo type the candidates and
party-list organizations. Not all may agree to the way their thoughts were expressed, as in fact there are other
Catholic dioceses that chose not to follow the example of petitioners.

Some may have thought that there should be more room to consider being more broad-minded and non-
judgmental. Some may have expected that the authors would give more space to practice forgiveness and humility.

But, the Bill of Rights enumerated in our Constitution is an enumeration of our fundamental liberties. It is not a
detailed code that prescribes good conduct. It provides space for all to be guided by their conscience, not only in
the act that they do to others but also in judgment of the acts of others.

Freedom for the thought we can disagree with can be wielded not only by those in the minority. This can often be
expressed by dominant institutions, even religious ones. That they made their point dramatically and in a large
way does not necessarily mean that their statements are true, or that they have basis, or that they have been
expressed in good taste.

Embedded in the tarpaulin, however, are opinions expressed by petitioners. It is a specie of expression protected
by our fundamental law. It is an expression designed to invite attention, cause debate, and hopefully, persuade. It
may be motivated by the interpretation of petitioners of their ecclesiastical duty, but their parishioner’s actions
will have very real secular consequences. Certainly, provocative messages do matter for the elections.

What is involved in this case is the most sacred of speech forms: expression by the electorate that tends to rouse
the public to debate contemporary issues. This is not speechby candidates or political parties to entice votes. It is a
portion of the electorate telling candidates the conditions for their election. It is the substantive content of the right
to suffrage.

This. is a form of speech hopeful of a quality of democracy that we should all deserve. It is protected as a
fundamental and primordial right by our Constitution. The expression in the medium chosen by petitioners
deserves our protection.

30 | AEP
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 165569 July 29, 2010
UNIVERSITY OF SANTO TOMAS, GLENDA A. VARGAS, MA. SOCORRO S. GUANHING, in their
capacities as Dean and Assistant Dean, respectively, of the College of Nursing of the University of Santo
Tomas, and RODOLFO N. CLAVIO, in his capacity as Registrar of the University of Santo Tomas,
Petitioners,
vs.
DANES B. SANCHEZ, Respondent.
DECISION
DEL CASTILLO, J.:
Where a valid cause of action exists, parties may not simply bypass litigation by the simple expediency of a
Motion to Dismiss. Instead of abbreviating the proceedings, it has had the opposite effect: unnecessary litigation
for almost seven years. Here, in particular, where any resolution of the case will depend on the appreciation of
evidence, a full-blown trial is necessary to unearth all relevant facts and circumstances.
This petition for review on certiorari assails the Decision1 dated July 20, 2004 of the Court of Appeals (CA) in
CA-G.R. SP No. 79404 which affirmed the denial of petitioners’ motion to dismiss and directed the Regional Trial
Court (RTC) of Dinalupihan, Bataan, Branch 5, to proceed with trial. Also assailed is the Resolution2 dated
September 22, 2004 denying the motion for reconsideration.
Factual Antecedents
This case began with a Complaint3 for Damages filed by respondent Danes B. Sanchez (respondent) against the
University of Santo Tomas (UST) and its Board of Directors, the Dean and the Assistant Dean of the UST College
of Nursing, and the University Registrar for their alleged unjustified refusal to release the respondent’s Transcript
of Records (ToR). The case was raffled to Branch 5 of the RTC of Dinalupihan, Bataan, and docketed as Civil
Case No. DH-788-02.
In his Complaint, respondent alleged that he graduated from UST on April 2, 2002 with a Bachelor’s Degree of
Science in Nursing. He was included in the list of candidates for graduation and attended graduation ceremonies.
On April 18, 2002, respondent sought to secure a copy of his ToR with the UST Registrar’s Office, paid the
required fees, but was only given a Certificate of Graduation by the Registrar. Despite repeated attempts by the
respondent to secure a copy of his ToR, and submission of his class cards as proof of his enrolment, UST refused
to release his records, making it impossible for him to take the nursing board examinations, and depriving him of
the opportunity to make a living. The respondent prayed that the RTC order UST to release his ToR and hold UST
liable for actual, moral, and exemplary damages, attorney’s fees, and the costs of suit.
31 | AEP
Instead of filing an Answer, petitioners filed a Motion to Dismiss4 where they claimed that they refused to release
respondent’s ToR because he was not a registered student, since he had not been enrolled in the university for the
last three semesters. They claimed that the respondent’s graduation, attendance in classes, and taking/passing of
examinations were immaterial because he ceased to be a student when he failed to enroll during the second
semester of school year 2000-2001. They also sought the dismissal of the case on the ground that the complaint
failed to state a cause of action, as paragraph 10 of the complaint admitted that:
10. On several occasions, [respondent] went to see the [petitioners] to get his ToR, but all of these were futile for
he was not even entertained at the Office of the Dean. Worst, he was treated like a criminal forcing him to admit
the fact that he did not enroll for the last three (3) semesters of his schooling. [Petitioner] Dean tried to persuade
the [respondent] to give the original copies of the Class Cards which he has in his possession. These are the only
[bits of] evidence on hand to prove that he was in fact officially enrolled. [Respondent] did not give the said class
cards and instead gave photo copies to the [Petitioner] Dean. The Office of the Dean of Nursing of [petitioner]
UST became very strict in receiving documents from the [respondent]. [They have] to be scrutinized first before
the same are received. Receiving, as [respondent] believes, is merely a ministerial function [of] the [petitioners]
and the documents presented for receiving need not be scrutinized especially so when x x x they are not illegal.
Copies of the class cards are hereto attached as "F" hereof.5
After the parties filed their responsive pleadings,6 petitioners filed a Supplement to their Motion to Dismiss,7
alleging that respondent sought administrative recourse before the Commission on Higher Education (CHED)
through a letter-complaint dated January 21, 2003. Thus, petitioners claimed that the CHED had primary
jurisdiction to resolve matters pertaining to school controversies, and the filing of the instant case was premature.
Ruling of the Regional Trial Court
After another exchange of pleadings,8 the RTC issued an Order9 dated April 1, 2003 denying the Motion to
Dismiss on the ground that the issues involved required an examination of the evidence, which should be threshed
out during trial. Petitioners’ Motion for Reconsideration10 was denied in an Order11 dated August 1, 2003, so
petitioners sought recourse before the CA.
Ruling of the Court of Appeals
The CA affirmed the denial of petitioners’ Motion to Dismiss, and directed the RTC to proceed with trial.
Issues
Petitioners seek recourse before us raising the following issues:
1) The CHED exercises quasi-judicial power over controversies involving school matters and has
primary jurisdiction over respondent’s demand for the release of his ToR. Thus, respondent failed to
exhaust administrative remedies;
2) Since respondent sought recourse with both the CHED and the RTC, respondent violated the rule
against forum-shopping; and
3) The Complaint failed to state a cause of action, since respondent admitted that he was not enrolled in
UST in the last three semesters prior to graduation.
 Our Ruling
The petition is denied for lack of merit.
The doctrine of exhaustion of administrative remedies does not apply in this case.
The doctrine of exhaustion of administrative remedies requires that where a
remedy before an administrative agency is provided, the administrative agency concerned must be given the
opportunity to decide a matter within its jurisdiction before an action is brought before the courts.12 Failure to
exhaust administrative remedies is a ground for dismissal of the action.13
In this case, the doctrine does not apply because petitioners failed to demonstrate that recourse to the CHED is
mandatory – or even possible – in an action such as that brought by the respondent, which is essentially one for
mandamus and damages. The doctrine of exhaustion of administrative remedies admits of numerous exceptions,14
one of which is where the issues are purely legal and well within the jurisdiction of the trial court, as in the present
case.15 Petitioners’ liability – if any – for damages will have to be decided by the courts, since any judgment
inevitably calls for the application and the interpretation of the Civil Code.16 As such, exhaustion of administrative
remedies may be dispensed with. As we held in Regino v. Pangasinan Colleges of Science and Technology:17
x x x exhaustion of administrative remedies is applicable when there is competence on the part of the
administrative body to act upon the matter complained of. Administrative agencies are not courts; x x x neither
[are they] part of the judicial system, [or] deemed judicial tribunals. Specifically, the CHED does not have the
power to award damages. Hence, petitioner could not have commenced her case before the Commission.
(Emphasis ours)
In addition, the rule on primary jurisdiction applies only where the administrative agency exercises quasi-judicial
or adjudicatory functions.18 Thus, an essential requisite for this doctrine to apply is the actual existence of quasi-
judicial power.19 However, petitioners have not shown that the CHED possesses any such power to "investigate
facts or ascertain the existence of facts, hold hearings, weigh evidence, and draw conclusions."20 Indeed, Section 8
of Republic Act No. 772221 otherwise known as the Higher Education Act of 1994, certainly does not contain any
express grant to the CHED of judicial or quasi-judicial power.
Petitioners also claim that even without any express grant of quasi-judicial power by the legislature, the CHED is
authorized to adjudicate the case filed by respondent on the strength of the following provisions of the Manual of
Regulations of Private Schools:22
(1) Section 33, which authorizes the CHED to cancel or revoke the graduation of any student whose records are
found to be fraudulent:
Section 33. Authority to Graduate Without Department Approval. One of the benefits which may be made
available for accredited schools of the appropriate level is the authority to graduate students from accredited
courses or programs of study without prior approval of the Department, the conditions of which are as follows:
a) The school head must furnish the Regional Office of the region where the school is situated a copy of
its certificate of accreditation.
32 | AEP
b) Within two weeks after the graduation exercise, the school shall submit to the Regional Office
concerned an alphabetical list of graduates by course, accompanied by a certification under oath signed
by the school registrar certifying that the students listed (1) have complied with all the requirements of
the Department, (2) were conferred their respective certificates or degrees on a specific date, (3) have
complete scholastic records on file in the school, and (4) have their Form 137 for high school and Form
IX for college, as the case may be, in the custody of the school. This list shall be sufficient basis for
issuing special orders, if still necessary.
The school will be held fully liable for the veracity of the records without prejudice to any legal action, including
revocation of government recognition, as may be called for under the circumstances.
The Department reserves the right to cancel or revoke the graduation of any student whose records are found to be
fraudulent.
(2) Section 72, which permits the school to withhold students’ credentials under certain specified circumstances,
and authorizes the CHED to
issue a student’s credentials in case these are unlawfully withheld by the school:
Section 72. Withholding of Credentials. The release of the transfer credentials of any pupil or student may be
withheld for reasons of suspension, expulsion, or non-payment of financial obligations or property responsibility
of the pupil or student to the school. The credentials shall be released as soon as his obligation shall have been
settled or the penalty of suspension or expulsion lifted.
However, if, after due inquiry, a school is found to have unjustifiably refused to issue transfer credentials or
student records, the Department may issue the same without prejudice to the imposition of appropriate
administrative sanctions against the school concerned.
The most cursory perusal of these provisions shows that they are inapplicable. Section 33 concerns the conditions
and authority of accredited schools to authorize the graduation of students without the prior authority of the
CHED. Corollarily, the CHED may cancel or revoke the graduation if it is found to be fraudulent. We are not
aware that the CHED has taken any action to revoke the respondent’s graduation, though it is free to do so.
As regards Section 72, it refers to a school’s right to withhold the release of credentials due to "suspension,
expulsion, or non-payment of financial obligations or property responsibility." None of these circumstances is
present, and there has been no intimation that respondent’s ToR has been withheld on any of these grounds.
In any event, even if we were to assume that these provisions were applicable, the CHED remains without
authority to adjudicate an action for damages.
Respondent is not guilty of forum shopping
Forum shopping exists when, as a result of an adverse opinion in one
forum, a party seeks a favorable opinion (other than by appeal or certiorari) in another, or when he institutes two
or more actions or proceedings grounded on the same cause, on the gamble that one or the other court would make
a favorable disposition.23 Here, there can be no forum shopping precisely because the CHED is without quasi-
judicial power, and cannot make any disposition of the case – whether favorable or otherwise. As we held in We fully agree with the RTC’s finding that a resolution of the case requires the presentation of evidence during
Cabarrus, Jr. v. Bernas:24 trial. Based on the parties’ allegations, the issues in this case are far from settled. Was respondent enrolled or not?
Was his degree obtained fraudulently? If so, why was he permitted by the petitioners to graduate? Was there fault
The courts, tribunal and agencies referred to under Circular No. 28-91, revised Circular No. 28-91 and or negligence on the part of any of the parties? Clearly, these are factual matters which can be best ventilated in a
Administrative Circular No. 04-94 are those vested with judicial powers or quasi-judicial powers and those who full-blown proceeding before the trial court.
not only hear and determine controversies between adverse parties, but to make binding orders or judgments. As
succinctly put by R.A. 157, the NBI is not performing judicial or quasi-judicial functions. The NBI cannot WHEREFORE, the petition is DENIED. The Decision dated July 20, 2004 and the Resolution dated September
therefore be among those forums contemplated by the Circular that can entertain an action or proceeding, or even 22, 2004 of the Court of Appeals in CA-G.R. SP No. 79404 are AFFIRMED. The Regional Trial Court of
grant any relief, declaratory or otherwise. Dinalupihan, Bataan, Branch 5, is DIRECTED to continue the proceedings in Civil Case No. DH-788-02 with all
deliberate speed.
The Complaint states a cause of action
Costs against petitioners.
Under Rule 16, Section 1(g) of the Rules of Court, a motion to dismiss may be made on the ground that the
pleading asserting the claim states no cause of action.25 To clarify the essential test required to sustain dismissal on
this ground, we have explained that "[t]he test of the sufficiency of the facts found in a petition, to constitute a
cause of action, is whether admitting the facts alleged, the court could render a valid judgment upon the same in
accordance with the prayer of the petition."26 Stated otherwise, a complaint is said to assert a sufficient cause of
action if, admitting what appears solely on its face to be correct, the plaintiff would be entitled to the relief prayed
for.27

The Complaint makes the following essential allegations: that petitioners unjustifiably refused to release
respondent’s ToR despite his having obtained a degree from UST; that petitioners’ claim that respondent was not
officially enrolled is untrue; that as a result of petitioners’ unlawful actions, respondent has not been able to take
the nursing board exams since 2002; that petitioners’ actions violated Articles 19-21 of the Civil Code; and that
petitioners should be ordered to release respondent’s ToR and held liable for ₱400,000.00 as moral damages,
₱50,000.00 as exemplary damages, ₱50,000.00 as attorney’s fees and costs of suit, and ₱15,000.00 as actual
damages. Clearly, assuming that the facts alleged in the Complaint are true, the RTC would be able to render a
valid judgment in accordance with the prayer in the Complaint.

Petitioners argue that paragraph 10 of the Complaint contains an admission that respondent was not officially
enrolled at UST. Said paragraph reads:

10. On several occasions, [respondent] went to see the [petitioners] to get his ToR, but all of these were futile for
he was not even entertained at the Office of the Dean. Worst, he was treated like a criminal forcing him to admit
the fact that he did not enroll for the last three (3) semesters of his schooling. [Petitioner] Dean tried to persuade
the [respondent] to give the original copies of the Class Cards which he has in his possession. These are the only
[bits of] evidence on hand to prove that he was in fact officially enrolled. [Respondent] did not give the said class
cards and instead gave photo copies to the [Petitioner] Dean. The Office of the Dean of Nursing of [petitioner]
UST became very strict in receiving documents from the [respondent]. [They have] to be scrutinized first before
the same are received. Receiving, as [respondent] believes, is merely a ministerial function [of] the [petitioners]
and the documents presented for receiving need not be scrutinized especially so when x x x they are not illegal.
Copies of the class cards are hereto attached as "F" hereof.28

This statement certainly does not support petitioners’ claim that respondent admitted that he was not
enrolled.1avvphi1 On the contrary, any allegation concerning the use of force or intimidation by petitioners, if
substantiated, can only serve to strengthen respondent’s complaint for damages.

33 | AEP
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 76633 October 18, 1988
EASTERN SHIPPING LINES, INC., petitioner,
vs.
PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION (POEA), MINISTER OF LABOR AND
EMPLOYMENT, HEARING OFFICER ABDUL BASAR and KATHLEEN D. SACO, respondents.
CRUZ, J.:
The private respondent in this case was awarded the sum of P192,000.00 by the Philippine Overseas Employment
Administration (POEA) for the death of her husband. The decision is challenged by the petitioner on the principal
ground that the POEA had no jurisdiction over the case as the husband was not an overseas worker.
Vitaliano Saco was Chief Officer of the M/V Eastern Polaris when he was killed in an accident in Tokyo, Japan,
March 15, 1985. His widow sued for damages under Executive Order No. 797 and Memorandum Circular No. 2 of
the POEA. The petitioner, as owner of the vessel, argued that the complaint was cognizable not by the POEA but
by the Social Security System and should have been filed against the State Insurance Fund. The POEA
nevertheless assumed jurisdiction and after considering the position papers of the parties ruled in favor of the
complainant. The award consisted of P180,000.00 as death benefits and P12,000.00 for burial expenses.
The petitioner immediately came to this Court, prompting the Solicitor General to move for dismissal on the
ground of non-exhaustion of administrative remedies.
Ordinarily, the decisions of the POEA should first be appealed to the National Labor Relations Commission, on
the theory inter alia that the agency should be given an opportunity to correct the errors, if any, of its subordinates.
This case comes under one of the exceptions, however, as the questions the petitioner is raising are essentially
questions of law. 1 Moreover, the private respondent himself has not objected to the petitioner's direct resort to
this Court, observing that the usual procedure would delay the disposition of the case to her prejudice.
The Philippine Overseas Employment Administration was created under Executive Order No. 797, promulgated
on May 1, 1982, to promote and monitor the overseas employment of Filipinos and to protect their rights. It
replaced the National Seamen Board created earlier under Article 20 of the Labor Code in 1974. Under Section
4(a) of the said executive order, the POEA is vested with "original and exclusive jurisdiction over all cases,
including money claims, involving employee-employer relations arising out of or by virtue of any law or contract
involving Filipino contract workers, including seamen." These cases, according to the 1985 Rules and Regulations
on Overseas Employment issued by the POEA, include "claims for death, disability and other benefits" arising out
of such employment. 2
The petitioner does not contend that Saco was not its employee or that the claim of his widow is not compensable.
What it does urge is that he was not an overseas worker but a 'domestic employee and consequently his widow's
34 | AEP
claim should have been filed with Social Security System, subject to appeal to the Employees Compensation
Commission.
We see no reason to disturb the factual finding of the POEA that Vitaliano Saco was an overseas employee of the
petitioner at the time he met with the fatal accident in Japan in 1985.
Under the 1985 Rules and Regulations on Overseas Employment, overseas employment is defined as
"employment of a worker outside the Philippines, including employment on board vessels plying international
waters, covered by a valid contract. 3 A contract worker is described as "any person working or who has worked
overseas under a valid employment contract and shall include seamen" 4 or "any person working overseas or who
has been employed by another which may be a local employer, foreign employer, principal or partner under a
valid employment contract and shall include seamen." 5 These definitions clearly apply to Vitaliano Saco for it is
not disputed that he died while under a contract of employment with the petitioner and alongside the petitioner's
vessel, the M/V Eastern Polaris, while berthed in a foreign country. 6
It is worth observing that the petitioner performed at least two acts which constitute implied or tacit recognition of
the nature of Saco's employment at the time of his death in 1985. The first is its submission of its shipping articles
to the POEA for processing, formalization and approval in the exercise of its regulatory power over overseas
employment under Executive Order NO. 797. 7 The second is its payment 8 of the contributions mandated by law
and regulations to the Welfare Fund for Overseas Workers, which was created by P.D. No. 1694 "for the purpose
of providing social and welfare services to Filipino overseas workers."
Significantly, the office administering this fund, in the receipt it prepared for the private respondent's signature,
described the subject of the burial benefits as "overseas contract worker Vitaliano Saco." 9 While this receipt is
certainly not controlling, it does indicate, in the light of the petitioner's own previous acts, that the petitioner and
the Fund to which it had made contributions considered Saco to be an overseas employee.
The petitioner argues that the deceased employee should be likened to the employees of the Philippine Air Lines
who, although working abroad in its international flights, are not considered overseas workers. If this be so, the
petitioner should not have found it necessary to submit its shipping articles to the POEA for processing,
formalization and approval or to contribute to the Welfare Fund which is available only to overseas workers.
Moreover, the analogy is hardly appropriate as the employees of the PAL cannot under the definitions given be
considered seamen nor are their appointments coursed through the POEA.
The award of P180,000.00 for death benefits and P12,000.00 for burial expenses was made by the POEA pursuant
to its Memorandum Circular No. 2, which became effective on February 1, 1984. This circular prescribed a
standard contract to be adopted by both foreign and domestic shipping companies in the hiring of Filipino seamen
for overseas employment. A similar contract had earlier been required by the National Seamen Board and had
been sustained in a number of cases by this Court. 10 The petitioner claims that it had never entered into such a
contract with the deceased Saco, but that is hardly a serious argument. In the first place, it should have done so as
required by the circular, which specifically declared that "all parties to the employment of any Filipino seamen on
board any ocean-going vessel are advised to adopt and use this employment contract effective 01 February 1984
and to desist from using any other format of employment contract effective that date." In the second place, even if
it had not done so, the provisions of the said circular are nevertheless deemed written into the contract with Saco
as a postulate of the police power of the State. 11
But the petitioner questions the validity of Memorandum Circular No. 2 itself as violative of the principle of non-
delegation of legislative power. It contends that no authority had been given the POEA to promulgate the said
regulation; and even with such authorization, the regulation represents an exercise of legislative discretion which,
under the principle, is not subject to delegation.
The authority to issue the said regulation is clearly provided in Section 4(a) of Executive Order No. 797, reading
as follows:
... The governing Board of the Administration (POEA), as hereunder provided shall
promulgate the necessary rules and regulations to govern the exercise of the adjudicatory
functions of the Administration (POEA).
Similar authorization had been granted the National Seamen Board, which, as earlier observed, had itself
prescribed a standard shipping contract substantially the same as the format adopted by the POEA.
The second challenge is more serious as it is true that legislative discretion as to the substantive contents of the
law cannot be delegated. What can be delegated is the discretion to determine how the law may be enforced, not
what the law shall be. The ascertainment of the latter subject is a prerogative of the legislature. This prerogative
cannot be abdicated or surrendered by the legislature to the delegate. Thus, in Ynot v. Intermediate Apellate Court
12 which annulled Executive Order No. 626, this Court held:
We also mark, on top of all this, the questionable manner of the disposition of the confiscated
property as prescribed in the questioned executive order. It is there authorized that the seized
property shall be distributed to charitable institutions and other similar institutions as the
Chairman of the National Meat Inspection Commission may see fit, in the case of carabaos.'
(Italics supplied.) The phrase "may see fit" is an extremely generous and dangerous condition,
if condition it is. It is laden with perilous opportunities for partiality and abuse, and even
corruption. One searches in vain for the usual standard and the reasonable guidelines, or better
still, the limitations that the officers must observe when they make their distribution. There is
none. Their options are apparently boundless. Who shall be the fortunate beneficiaries of their
generosity and by what criteria shall they be chosen? Only the officers named can supply the
answer, they and they alone may choose the grantee as they see fit, and in their own exclusive
discretion. Definitely, there is here a 'roving commission a wide and sweeping authority that is
not canalized within banks that keep it from overflowing,' in short a clearly profligate and
therefore invalid delegation of legislative powers.
There are two accepted tests to determine whether or not there is a valid delegation of legislative power, viz, the
completeness test and the sufficient standard test. Under the first test, the law must be complete in all its terms and
conditions when it leaves the legislature such that when it reaches the delegate the only thing he will have to do is
enforce it. 13 Under the sufficient standard test, there must be adequate guidelines or stations in the law to map out
the boundaries of the delegate's authority and prevent the delegation from running riot. 14
Both tests are intended to prevent a total transference of legislative authority to the delegate, who is not allowed to
step into the shoes of the legislature and exercise a power essentially legislative.
The principle of non-delegation of powers is applicable to all the three major powers of the Government but is
especially important in the case of the legislative power because of the many instances when its delegation is
permitted. The occasions are rare when executive or judicial powers have to be delegated by the authorities to
which they legally certain. In the case of the legislative power, however, such occasions have become more and
35 | AEP
more frequent, if not necessary. This had led to the observation that the delegation of legislative power has
become the rule and its non-delegation the exception.
The reason is the increasing complexity of the task of government and the growing inability of the legislature to
cope directly with the myriad problems demanding its attention. The growth of society has ramified its activities
and created peculiar and sophisticated problems that the legislature cannot be expected reasonably to comprehend.
Specialization even in legislation has become necessary. To many of the problems attendant upon present-day
undertakings, the legislature may not have the competence to provide the required direct and efficacious, not to
say, specific solutions. These solutions may, however, be expected from its delegates, who are supposed to be
experts in the particular fields assigned to them.
The reasons given above for the delegation of legislative powers in general are particularly applicable to
administrative bodies. With the proliferation of specialized activities and their attendant peculiar problems, the
national legislature has found it more and more necessary to entrust to administrative agencies the authority to
issue rules to carry out the general provisions of the statute. This is called the "power of subordinate legislation."
With this power, administrative bodies may implement the broad policies laid down in a statute by "filling in' the
details which the Congress may not have the opportunity or competence to provide. This is effected by their
promulgation of what are known as supplementary regulations, such as the implementing rules issued by the
Department of Labor on the new Labor Code. These regulations have the force and effect of law.
Memorandum Circular No. 2 is one such administrative regulation. The model contract prescribed thereby has
been applied in a significant number of the cases without challenge by the employer. The power of the POEA (and
before it the National Seamen Board) in requiring the model contract is not unlimited as there is a sufficient
standard guiding the delegate in the exercise of the said authority. That standard is discoverable in the executive
order itself which, in creating the Philippine Overseas Employment Administration, mandated it to protect the
rights of overseas Filipino workers to "fair and equitable employment practices."
Parenthetically, it is recalled that this Court has accepted as sufficient standards "Public interest" in People v.
Rosenthal 15 "justice and equity" in Antamok Gold Fields v. CIR 16 "public convenience and welfare" in
Calalang v. Williams 17 and "simplicity, economy and efficiency" in Cervantes v. Auditor General, 18 to mention
only a few cases. In the United States, the "sense and experience of men" was accepted in Mutual Film Corp. v.
Industrial Commission, 19 and "national security" in Hirabayashi v. United States. 20
It is not denied that the private respondent has been receiving a monthly death benefit pension of P514.42 since
March 1985 and that she was also paid a P1,000.00 funeral benefit by the Social Security System. In addition, as
already observed, she also received a P5,000.00 burial gratuity from the Welfare Fund for Overseas Workers.
These payments will not preclude allowance of the private respondent's claim against the petitioner because it is
specifically reserved in the standard contract of employment for Filipino seamen under Memorandum Circular No.
2, Series of 1984, that—
Section C. Compensation and Benefits.—
1. In case of death of the seamen during the term of his Contract, the employer shall pay his
beneficiaries the amount of:
a. P220,000.00 for master and chief engineers
 b. P180,000.00 for other officers, including radio operators and master When the conflicting interests of labor and capital are weighed on the scales of social justice, the heavier influence
electrician of the latter must be counter-balanced by the sympathy and compassion the law must accord the underprivileged
worker. This is only fair if he is to be given the opportunity and the right to assert and defend his cause not as a
c. P 130,000.00 for ratings. subordinate but as a peer of management, with which he can negotiate on even plane. Labor is not a mere
employee of capital but its active and equal partner.
2. It is understood and agreed that the benefits mentioned above shall be separate and distinct
from, and will be in addition to whatever benefits which the seaman is entitled to under WHEREFORE, the petition is DISMISSED, with costs against the petitioner. The temporary restraining order
Philippine laws. ... dated December 10, 1986 is hereby LIFTED. It is so ordered.

3. ...

c. If the remains of the seaman is buried in the Philippines, the owners

shall pay the beneficiaries of the seaman an amount not exceeding
P18,000.00 for burial expenses.

The underscored portion is merely a reiteration of Memorandum Circular No. 22, issued by the National Seamen
Board on July 12,1976, providing an follows:

Income Benefits under this Rule Shall be Considered Additional Benefits.—

All compensation benefits under Title II, Book Four of the Labor Code of the Philippines
(Employees Compensation and State Insurance Fund) shall be granted, in addition to whatever
benefits, gratuities or allowances that the seaman or his beneficiaries may be entitled to under
the employment contract approved by the NSB. If applicable, all benefits under the Social
Security Law and the Philippine Medicare Law shall be enjoyed by the seaman or his
beneficiaries in accordance with such laws.

The above provisions are manifestations of the concern of the State for the working class, consistently with the
social justice policy and the specific provisions in the Constitution for the protection of the working class and the
promotion of its interest.

One last challenge of the petitioner must be dealt with to close t case. Its argument that it has been denied due
process because the same POEA that issued Memorandum Circular No. 2 has also sustained and applied it is an
uninformed criticism of administrative law itself. Administrative agencies are vested with two basic powers, the
quasi-legislative and the quasi-judicial. The first enables them to promulgate implementing rules and regulations,
and the second enables them to interpret and apply such regulations. Examples abound: the Bureau of Internal
Revenue adjudicates on its own revenue regulations, the Central Bank on its own circulars, the Securities and
Exchange Commission on its own rules, as so too do the Philippine Patent Office and the Videogram Regulatory
Board and the Civil Aeronautics Administration and the Department of Natural Resources and so on ad infinitum
on their respective administrative regulations. Such an arrangement has been accepted as a fact of life of modern
governments and cannot be considered violative of due process as long as the cardinal rights laid down by Justice
Laurel in the landmark case of Ang Tibay v. Court of Industrial Relations 21 are observed.

Whatever doubts may still remain regarding the rights of the parties in this case are resolved in favor of the private
respondent, in line with the express mandate of the Labor Code and the principle that those with less in life should
have more in law.

36 | AEP
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 98045 June 26, 1996
DESAMPARADO VDA. DE NAZARENO and LETICIA NAZARENO TAPIA, petitioners,
vs.
THE COURT OF APPEALS, MR. & MRS. JOSE SALASALAN, MR. & MRS. LEO RABAYA, AVELINO
LABIS, HON. ROBERTO G. HILARIO, ROLLEO I. IGNACIO, ALBERTO M. GILLERA and HON.
ABELARDO G. PALAD, JR., in their official and/or private capacities, respondents.
ROMERO, J.:p
Petitioners Desamparado Vda. de Nazareno and Leticia Nazareno Tapia challenge the decision of the Court of
Appeals which affirmed the dismissal of petitioners' complaint by the Regional Trial Court of Misamis Oriental,
Branch 22. The complaint was for annulment of the verification, report and recommendation, decision and order
of the Bureau of Lands regarding a parcel of public land.
The only issue involved in this petition is whether or not petitioners exhausted administrative remedies before
having recourse to the courts.
The subject of this controversy is a parcel of land situated in Telegrapo, Puntod, Cagayan de Oro City. Said land
was formed as a result of sawdust dumped into the dried-up Balacanas Creek and along the banks of the Cagayan
river.
Sometime in 1979, private respondents Jose Salasalan and Leo Rabaya leased the subject lots on which their
houses stood from one Antonio Nazareno, petitioners' predecessor-in-interest. In the latter part of 1982, private
respondents allegedly stopped paying rentals. As a result, Antonio Nazareno and petitioners filed a case for
ejectment with the Municipal Trial Court of Cagayan de Oro City, Branch 4. A decision was rendered against
private respondents, which decision was affirmed by the Regional Trial Court of Misamis Oriental, Branch 20.
The case was remanded to the municipal trial court for execution of judgment after the same became final and
executory. Private respondents filed a case for annulment of judgment before the Regional Trial Court of Misamis
Oriental, Branch 24 which dismissed the same. Antonio Nazareno and petitioners again moved for execution of
judgment but private respondents filed another case for certiorari with prayer for restraining order and/or writ of
preliminary injunction with the Regional Trial Court of Misamis Oriental, Branch 25 which was likewise
dismissed. The decision of the lower court was finally enforced with the private respondents being ejected from
portions of the subject lots they occupied..
37 | AEP
Before he died, Antonio Nazareno caused the approval by the Bureau of Lands of the survey plan designated as
Plan Csd-106-00571 with a view to perfecting his title over the accretion area being claimed by him. Before the
approved survey plan could be released to the applicant, however, it was protested by private respondents before
the Bureau of Lands.
In compliance with the order of respondent District Land Officer Alberto M. Gillera, respondent Land Investigator
Avelino G. Labis conducted an investigation and rendered a report to the Regional Director recommending that
Survey Plan No. MSI-10-06-000571-D (equivalent to Lot No. 36302, Cad. 237) in the name of Antonio Nazareno,
be cancelled and that private respondents be directed to file appropriate public land applications.
Based on said report, respondent Regional Director of the Bureau of Lands Roberto Hilario rendered a decision
ordering the amendment of the survey plan in the name of Antonio Nazareno by segregating therefrom the areas
occupied by the private respondents who, if qualified, may file public land applications covering their respective
portions.
Antonio Nazareno filed a motion for reconsideration with respondent Rolleo Ignacio, Undersecretary of the
Department of Natural Resources and Officer-in-Charge of the Bureau of Lands who denied the motion.
Respondent Director of Lands Abelardo Palad then ordered him to vacate the portions adjudicated to private
respondents and remove whatever improvements they have introduced thereon. He also ordered that private
respondents be placed in possession thereof.
Upon the denial of the late Antonio Nazareno's motion for reconsideration, petitioners Desamparado Vda. de
Nazareno and Leticia Tapia Nazareno, filed a case before the RTC, Branch 22 for annulment of the following:
order of investigation by respondent Gillera, report and recommendation by respondent Labis, decision by
respondent Hilario, order by respondent Ignacio affirming the decision of respondent Hilario and order of
execution by respondent Palad. The RTC dismissed the complaint for failure to exhaust administrative remedies
which resulted in the finality of the administrative decision of the Bureau of Lands.
On appeal, the Court of Appeals affirmed the decision of the RTC dismissing the complaint. Applying Section 4
of C.A. No. 141, as amended, it contended that the approval of the survey plan belongs exclusively to the Director
of Lands. Hence, factual findings made by the Metropolitan Trial Court respecting the subject land cannot be held
to be controlling as the preparation and approval of said survey plans belong to the Director of Lands and the same
shall be conclusive when approved by the Secretary of Agriculture and Natural resources. 1
Furthermore, the appellate court contended that the motion for reconsideration filed by Antonio Nazareno cannot
be considered as an appeal to the Office of the Secretary of Agriculture and Natural Resources, as mandated by
C.A. No. 141 inasmuch as the same had been acted upon by respondent Undersecretary Ignacio in his capacity as
Officer-in-charge of the Bureau of Lands and not as Undersecretary acting for the Secretary of Agriculture and
Natural Resources. For the failure of Antonio Nazareno to appeal to the Secretary of Agriculture and Natural
Resources, the present case does not fall within the exception to the doctrine of exhaustion of administrative
remedies. It also held that there was no showing of oppressiveness in the manner in which the orders were issued
and executed..
Hence, this petition.
Petitioners assign the following errors:
 I. PUBLIC RESPONDENT COURT OF APPEALS IN A WHIMSICAL,
ARBITRARY AND CAPRICIOUS MANNER AFFIRMED THE DECISION OF
THE LOWER COURT WHICH IS CONTRARY TO THE PREVAILING FACTS
AND THE LAW ON THE MATTER;
II. PUBLIC RESPONDENT COURT OF APPEALS IN A WHIMSICAL,
ARBITRARY AND CAPRICIOUS MANNER AFFIRMED THE DECISION OF
THE LOWER COURT DISMISSING THE ORIGINAL CASE WHICH FAILED
TO CONSIDER THAT THE EXECUTION ORDER OF PUBLIC RESPONDENT
ABELARDO G. PALAD, JR., DIRECTOR OF LANDS, MANILA,
PRACTICALLY CHANGED THE DECISION OF PUBLIC RESPONDENT
ROBERTO HILARIO, REGIONAL DIRECTOR, BUREAU OF LANDS, REGION
10, THUS MAKING THE CASE PROPER SUBJECT FOR ANNULMENT WELL
WITHIN THE JURISDICTION OF THE LOWER COURT.
The resolution of the above issues, however, hinges on the question of whether or not the subject land is public
land. Petitioners claim that the subject land is private land being an accretion to his titled property, applying
Article 457 of the Civil Code which provides:
To the owners of lands adjoining the banks of rivers belong the accretion which they
gradually receive from the effects of the current of the waters.
In the case of Meneses v. CA, 2 this Court held that accretion, as a mode of acquiring property under Art. 457 of
the Civil Code, requires the concurrence of these requisites : (1) that the deposition of soil or sediment be gradual
and imperceptible; (2) that it be the result of the action of the waters of the river (or sea); and (3) that the land
where accretion takes place is adjacent to the banks of rivers (or the sea coast). These are called the rules on
alluvion which if present in a case, give to the owners of lands adjoining the banks of rivers or streams any
accretion gradually received from the effects of the current of waters.
For petitioners to insist on the application of these rules on alluvion to their case, the above-mentioned requisites
must be present. However, they admit that the accretion was formed by the dumping of boulders, soil and other
filling materials on portions of the Balacanas Creek and the Cagayan River bounding their land. 3 It cannot be
claimed, therefore, that the accumulation of such boulders, soil and other filling materials was gradual and
imperceptible, resulting from the action of the waters or the current of the Balacanas Creek and the Cagayan
River. In Hilario v. City of Manila, 4 this Court held that the word "current" indicates the participation of the body
of water in the ebb and flow of waters due to high and low tide. Petitioners' submission not having met the first
and second requirements of the rules on alluvion, they cannot claim the rights of a riparian owner.
In any case, this court agrees with private respondents that petitioners are estopped from denying the public
character of the subject land, as well as the jurisdiction of the Bureau of Lands when the late Antonio Nazareno
filed his Miscellaneous Sales Application MSA (G-6) 571. 5 The mere filing of said Application constituted an
admission that the land being applied for was public land, having been the subject of Survey Plan No. MSi-10-06-
000571-D (Equivalent to Lot No. 36302, Cad-237) which was conducted as a consequence of Antonio Nazareno's
Miscellaneous Sales Application wherein said land was described as an orchard. Said description by Antonio
Nazareno was, however, controverted by respondent Labis in his investigation report to respondent Hilario based
on the findings of his ocular inspection that said land actually covers a dry portion of Balacanas Creek and a
swampy portion of Cagayan River. The investigation report also states that, except for the swampy portion which
is fully planted to nipa palms, the whole area is fully occupied by a part of a big concrete bodega of petitioners and
38 | AEP
several residential houses made of light materials, including those of private respondents which were erected by
themselves sometime in the early part of 1978. 6
Furthermore, the Bureau of Lands classified the subject land as an accretion area which was formed by deposits of
sawdust in the Balacanas Creek and the Cagayan river, in accordance with the ocular inspection conducted by the
Bureau of Lands. 7 This Court has often enough held that findings of administrative agencies which have acquired
expertise because their jurisdiction is confined to specific matters are generally accorded not only respect but even
finality. 8 Again, when said factual findings are affirmed by the Court of Appeals, the same are conclusive on the
parties and not reviewable by this Court. 9
It is this Court's irresistible conclusion, therefore, that the accretion was man-made or artificial. In Republic v. CA,
10 this Court ruled that the requirement that the deposit should be due to the effect of the current of the river is
indispensable. This excludes from Art. 457 of the Civil Code all deposits caused by human intervention. Putting it
differently, alluvion must be the exclusive work of nature. Thus, in Tiongco v. Director of Lands, et al., 11 where
the land was not formed solely by the natural effect of the water current of the river bordering said land but is also
the consequence of the direct and deliberate intervention of man, it was deemed a man-made accretion and, as
such, part of the public domain.
In the case at bar, the subject land was the direct result of the dumping of sawdust by the Sun Valley Lumber Co.
consequent to its sawmill
operations. 12 Even if this Court were to take into consideration petitioners' submission that the accretion site was
the result of the late Antonio Nazareno's labor consisting in the dumping of boulders, soil and other filling
materials into the Balacanas Creek and Cagayan River bounding his land, 13 the same would still be part of the
public domain.
Having determined that the subject land is public land, a fortiori, the Bureau of Lands, as well as the Office of the
Secretary of Agriculture and Natural Resources have jurisdiction over the same in accordance with the Public
Land Law. Accordingly, the court a quo dismissed petitioners' complaint for non-exhaustion of administrative
remedies which ruling the Court of Appeals affirmed.
However, this Court agrees with petitioners that administrative remedies have been exhausted. Petitioners could
not have intended to appeal to respondent Ignacio as an Officer-In-Charge of the Bureau of Lands. The decision
being appealed from was the decision of respondent Hilario who was the Regional Director of the Bureau of
Lands. Said decision was made "for and by authority of the Director of Lands". 14 It would be incongruous to
appeal the decision of the Regional Director of the Bureau of Lands acting for the Director of the Bureau of Lands
to an Officer-In-Charge of the Bureau of Lands.
In any case, respondent Rolleo Ignacio's official designation was "Undersecretary of the Department of
Agriculture and Natural Resources." He was only an "Officer-In-Charge" of the Bureau of Lands. When he acted
on the late Antonio Nazareno's motion for reconsideration by affirming or adopting respondent Hilario's decision,
he was acting on said motion as an Undersecretary on behalf of the Secretary of the Department. In the case of
Hamoy v. Secretary of Agriculture and Natural Resources, 15 this Court held that the Undersecretary of
Agriculture and Natural Resources may modify, adopt, or set aside the orders or decisions of the Director of Lands
with respect to questions involving public lands under the administration and control of the Bureau of Lands and
the Department of Agriculture and Natural Resources. He cannot, therefore, be said to have acted beyond the
bounds of his jurisdiction under Sections 3, 4 and 5 of Commonwealth Act No. 141 16
As borne out by the administrative findings, the controverted land is public land, being an artificial accretion of SO ORDERED.
sawdust. As such, the Director of Lands has jurisdiction, authority and control over the same, as mandated under
Sections 3 and 4 of the Public Land Law (C.A. No. 141) which states, thus:

Sec. 3. The Secretary of Agriculture and Natural Resources shall be the exclusive
officer charged with carrying out the provisions of this Act through the Director of
Lands who shall act under his immediate control.

Sec. 4. Subject to said control, the Director of Lands shall have direct executive
control of the survey, classification, lease, sale or any other form of concession or
disposition and management of the lands of the public domain, and his decisions as
to questions of fact shall be conclusive when approved by the Secretary of
Agriculture and Natural Resources.

In connection with the second issue, petitioners ascribe whim, arbitrariness or capriciousness in the execution
order of public respondent Abelardo G. Palad, the Director of Lands. This Court finds otherwise since said
decision was based on the conclusive finding that the subject land was public land. Thus, this Court agrees with
the Court of Appeals that the Director of Lands acted within his rights when he issued the assailed execution
order, as mandated by the aforecited provisions.

Petitioners' allegation that respondent Palad's execution order directing them to vacate the subject land practically
changed respondent Hilario's decision is baseless. It is incorrect for petitioners to assume that respondent Palad
awarded portions of the subject land to private respondents Salasalans and Rabayas as they had not yet been issued
patents or titles over the subject land. The execution order merely directed the segregation of petitioners' titled lot
from the subject land which was actually being occupied by private respondents before they were ejected from it.
Based on the finding that private respondents were actually in possession or were actually occupying the subject
land instead of petitioners, respondent Palad, being the Director of Lands and in the exercise of his administrative
discretion, directed petitioners to vacate the subject land on the ground that private respondents have a preferential
right, being the occupants thereof.

While private respondents may not have filed their application over the land occupied by them, they nevertheless
filed their protest or opposition to petitioners' Miscellaneous Sales Application, the same being preparatory to the
filing of an application as they were in fact directed to do so. In any case, respondent Palad's execution order
merely implements respondent Hilario's order. It should be noted that petitioners' own application still has to be
given due course. 17

As Director of Lands, respondent Palad is authorized to exercise executive control over any form of concession,
disposition and management of the lands of the public domain. 18 He may issue decisions and orders as he may
see fit under the circumstances as long as they are based on the findings of fact.

In the case of Calibo v. Ballesteros, 19 this Court held that where, in the disposition of public lands, the Director
of Lands bases his decision on the evidence thus presented, he clearly acts within his jurisdiction, and if he errs in
appraising the evidence, the error is one of judgment, but not an act of grave abuse of discretion annullable by
certiorari. Thus, except for the issue of non-exhaustion of administrative remedies, this Court finds no reversible
error nor grave abuse of discretion in the decision of the Court of Appeals.

WHEREFORE, the petition is DISMISSED for lack of merit.

39 | AEP
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 110526 February 10, 1998
ASSOCIATION OF PHILIPPINE COCONUT DESICCATORS, petitioner,
vs.
PHILIPPINE COCONUT AUTHORITY, respondent.
MENDOZA, J.:
At issue in this case is the validity of a resolution, dated March 24, 1993, of the Philippine Coconut Authority in
which it declares that it will no longer require those wishing to engage in coconut processing to apply to it for a
license or permit as a condition for engaging in such business.
Petitioner Association of Philippine Coconut Desiccators (hereafter referred to as APCD) brought this suit for
certiorari and mandamus against respondent Philippine Coconut Authority (PCA) to invalidate the latter's Board
Resolution No. 018-93 and the certificates of registration issued under it on the ground that the resolution in
question is beyond the power of the PCA to adopt, and to compel said administrative agency to comply instead
with the mandatory provisions of statutes regulating the desiccated coconut industry, in particular, and the coconut
industry, in general.
As disclosed by the parties' pleadings, the facts are as follows:
On November 5, 1992, seven desiccated coconut processing companies belonging to the APCD brought suit in the
Regional Trial Court, National Capital Judicial Region in Makati, Metro Manila, to enjoin the PCA from issuing
permits to certain applicants for the establishment of new desiccated coconut processing plants. Petitioner alleged
that the issuance of licenses to the applicants would violate PCA's Administrative Order No. 02, series of 1991, as
the applicants were seeking permits to operate in areas considered "congested" under the administrative order.1
On November 6, 1992, the trial court issued a temporary restraining order and, on November 25, 1992, a writ of
preliminary injunction, enjoining the PCA from processing and issuing licenses to Primex Products, Inc., Coco
Manila, Superstar (Candelaria) and Superstar (Davao) upon the posting of a bond in the amount of P100,000.00.2
Subsequently and while the case was pending in the Regional Trial Court, the Governing Board of the PCA issued
on March 24, 1993 Resolution No. 018-93, providing for the withdrawal of the Philippine Coconut Authority from
all regulation of the coconut product processing industry. While it continues the registration of coconut product
processors, the registration would be limited to the "monitoring" of their volumes of production and administration
of quality standards. The full text of the resolution reads:
40 | AEP
RESOLUTION NO. 018-93
POLICY DECLARATION DEREGULATING
THE ESTABLISHMENT OF NEW COCONUT
PROCESSING PLANTS
WHEREAS, it is the policy of the State to promote free enterprise unhampered by protective regulations
and unnecessary bureaucratic red tapes;
WHEREAS, the deregulation of certain sectors of the coconut industry, such as marketing of coconut
oils pursuant to Presidential Decree No. 1960, the lifting of export and commodity clearances under
Executive Order No. 1016, and relaxation of regulated capacity for the desiccated coconut sector
pursuant to Presidential Memorandum of February 11, 1988, has become a centerpiece of the present
dispensation;
WHEREAS, the issuance of permits or licenses prior to business operation is a form of regulation which
is not provided in the charter of nor included among the powers of the PCA;
WHEREAS, the Governing Board of PCA has determined to follow and further support the deregulation
policy and effort of the government to promote free enterprise;
NOW THEREFORE, BE IT RESOLVED AS IT IS HEREBY RESOLVED, that, henceforth, PCA shall
no longer require any coconut oil mill, coconut oil refinery, coconut desiccator, coconut product
processor/factory, coconut fiber plant or any similar coconut processing plant to apply with PCA and the
latter shall no longer issue any form of license or permit as condition prior to establishment or operation
of such mills or plants;
RESOLVED, FURTHER, that the PCA shall limit itself only to simply registering the aforementioned
coconut product processors for the purpose of monitoring their volumes of production, administration of
quality standards with the corresponding service fees/charges.
ADOPTED this 24th day of March 1993, at Quezon City.3
The PCA then proceeded to issue "certificates of registration" to those wishing to operate desiccated coconut
processing plants, prompting petitioner to appeal to the Office of the President of the Philippines on April 26,
1993 not to approve the resolution in question. Despite follow-up letters sent on May 25 and June 2, 1993,
petitioner received no reply from the Office of the President. The "certificates of registration" issued in the
meantime by the PCA has enabled a number of new coconut mills to operate. Hence this petition.
Petitioner alleges:
I
RESPONDENT PCA'S BOARD RESOLUTION NO. 018-93 IS NULL AND VOID FOR BEING AN
UNDUE EXERCISE OF LEGISLATIVE POWER BY AN ADMINISTRATIVE BODY.
II
 ASIDE FROM BEING ULTRA-VIRES, BOARD RESOLUTION NO. 018-93 IS WITHOUT ANY
BASIS, ARBITRARY, UNREASONABLE AND THEREFORE IN VIOLATION OF SUBSTANTIVE
DUE PROCESS OF LAW.
III
IN PASSING BOARD RESOLUTION NO. 018-93, RESPONDENT PCA VIOLATED THE
PROCEDURAL DUE PROCESS REQUIREMENT OF CONSULTATION PROVIDED IN
PRESIDENTIAL DECREE NO. 1644, EXECUTIVE ORDER NO. 826 AND PCA
ADMINISTRATIVE ORDER NO. 002, SERIES OF 1991.
On the other hand, in addition to answering petitioner's arguments, respondent PCA alleges that this petition
should be denied on the ground that petitioner has a pending appeal before the Office of the President. Respondent
accuses petitioner of forum-shopping in filing this petition and of failing to exhaust available administrative
remedies before coming to this Court. Respondent anchors its argument on the general rule that one who brings an
action under Rule 65 must show that one has no appeal nor any plain, speedy, and adequate remedy in the ordinary
course of law.
I.
The rule of requiring exhaustion of administrative remedies before a party may seek judicial review, so
strenuously urged by the Solicitor General on behalf of respondent, has obviously no application here. The
resolution in question was issued by the PCA in the exercise of its rule-making or legislative power. However,
only judicial review of decisions of administrative agencies made in the exercise of their quasi-judicial function is
subject to the exhaustion doctrine. The exhaustion doctrine stands as a bar to an action which is not yet complete4
and it is clear, in the case at bar, that after its promulgation the resolution of the PCA abandoning regulation of the
desiccated coconut industry became effective. To be sure, the PCA is under the direct supervision of the President
of the Philippines but there is nothing in P.D. No. 232, P.D. No. 961, P.D. No. 1468 and P.D. No. 1644 defining
the powers and functions of the PCA which requires rules and regulations issued by it to be approved by the
President before they become effective.
In any event, although the APCD has appealed the resolution in question to the Office of the President,
considering the fact that two months after they had sent their first letter on April 26, 1993 they still had to hear
from the President's office, meanwhile respondent PCA was issuing certificates of registration indiscriminately to
new coconut millers, we hold that petitioner was justified in filing this case on June 25, 1993.5 Indeed, after
writing the Office of the President on April 26, 19936 petitioner sent inquiries to that office not once, but twice, on
May 26, 19937 and on June 2, 1993,8 but petitioner did not receive any reply.
II.
We now turn to the merit of the present petition. The Philippine Coconut Authority was originally created by P.D.
232 on June 30, 1973, to take over the powers and functions of the Coconut Coordinating Council, the Philippine
Coconut Administration and the Philippine Coconut Research Institute. On June 11, 1978, by P.D. No. 1468, it
was made "an independent public corporation . . . directly reporting to, and supervised by, the President of the
Philippines,"9 and charged with carrying out the State's policy "to promote the rapid integrated development and
growth of the coconut and other palm oil industry in all its aspects and to ensure that the coconut farmers become
direct participants in, and beneficiaries of, such development and growth."10 through a regulatory scheme set up
by law.11
41 | AEP
Through this scheme, the government, on August 28, 1982, temporarily prohibited the opening of new coconut
processing plants and, four months later, phased out some of the existing ones in view of overproduction in the
coconut industry which resulted in cut-throat competition, underselling and smuggling of poor quality products
and ultimately in the decline of the export performance of coconut-based commodities. The establishment of new
plants could be authorized only upon determination by the PCA of the existence of certain economic conditions
and the approval of the President of the Philippines. Thus, Executive Order No. 826, dated August 28, 1982,
provided:
Sec. 1. Prohibition. — Except as herein provided, no government agency or instrumentality shall
hereafter authorize, approve or grant any permit or license for the establishment or operation of new
desiccated coconut processing plants, including the importation of machinery or equipment for the
purpose. In the event of a need to establish a new plant, or expand the capacity, relocate or upgrade the
efficiencies of any existing desiccated plant, the Philippine Coconut Authority may, upon proper
determination of such need and evaluation of the condition relating to:
a. the existing market demand;
b. the production capacity prevailing in the country or locality;
c. the level and flow of raw materials; and
d. other circumstances which may affect the growth or viability of the industry concerned,
authorize or grant the application for, the establishment or expansion of capacity, relocation or
upgrading of efficiencies of such desiccated coconut processing plant, subject to the approval of the
President.
On December 6, 1982, a phase-out of some of the existing plants was ordered by the government after finding that
"a mere freeze in the present capacity of existing plants will not afford a viable solution to the problem
considering that the total available limited market is not adequate to support all the existing processing plants,
making it imperative to reduce the number of existing processing plants."12 Accordingly, it was ordered:13
Sec. 1. The Philippine Coconut Authority is hereby ordered to take such action as may be necessary to
reduce the number of existing desiccated coconut processing plants to a level which will insure the
survival of the remaining plants. The Authority is hereby directed to determine which of the existing
processing plants should be phased out and to enter into appropriate contracts with such plants for the
above purpose.
It was only on October 23, 1987 when the PCA adopted Resolution No. 058-87, authorizing the establishment and
operation of additional DCN plants, in view of the increased demand for desiccated coconut products in the
world's markets, particularly in Germany, the Netherlands and Australia. Even then, the opening of new plants was
made subject to "such implementing guidelines to be set forth by the Authority" and "subject to the final approval
of the President."
The guidelines promulgated by the PCA, as embodied in Administrative Order No. 002, series of 1991, inter alia
authorized the opening of new plants in "non-congested areas only as declared by the PCA" and subject to
compliance by applicants with "all procedures and requirements for registration under Administrative Order No.
003, series of 1981 and this Order." In addition, as the opening of new plants was premised on the increased global
demand for desiccated coconut products, the new entrants were required to submit sworn statements of the names
and addresses of prospective foreign buyers.
This form of "deregulation" was approved by President Aquino in her memorandum, dated February 11, 1988, to
the PCA. Affirming the regulatory scheme, the President stated in her memorandum:
It appears that pursuant to Executive Order No. 826 providing measures for the protection of the
Desiccated Coconut Industry, the Philippine Coconut Authority evaluated the conditions relating to: (a)
the existing market demands; (b) the production capacity prevailing in the country or locality; (c) the
level and flow of raw materials; and (d) other circumstances which may affect the growth or viability of
the industry concerned and that the result of such evaluation favored the expansion of production and
market of desiccated coconut products.
In view hereof and the favorable recommendation of the Secretary of Agriculture, the deregulation of
the Desiccated Coconut Industry as recommended in Resolution No. 058-87 adopted by the PCA
Governing Board on October 28, 1987 (sic) is hereby approved.14
These measures — the restriction in 1982 on entry into the field, the reduction the same year of the number of the
existing coconut mills and then the lifting of the restrictions in 1987 — were adopted within the framework of
regulation as established by law "to promote the rapid integrated development and growth of the coconut and other
palm oil industry in all its aspects and to ensure that the coconut farmers become direct participants in, and
beneficiaries of, such development and growth." 15 Contrary to the assertion in the dissent, the power given to the
Philippine Coconut Authority — and before it to the Philippine Coconut Administration — "to formulate and
adopt a general program of development for the coconut and other palm oils industry"16 is not a roving
commission to adopt any program deemed necessary to promote the development of the coconut and other palm
oils industry, but one to be exercised in the context of this regulatory structure.
In plain disregard of this legislative purpose, the PCA adopted on March 24, 1993 the questioned resolution which
allows not only the indiscriminate opening of new coconut processing plants but the virtual dismantling of the
regulatory infrastructure whereby, forsaking controls theretofore placed in its keeping, the PCA limits its function
to the innocuous one of "monitoring" compliance by coconut millers with quality standards and volumes of
production. In effect, the PCA would simply be compiling statistical data on these matters, but in case of
violations of standards there would be nothing much it would do. The field would be left without an umpire who
would retire to the bleachers to become a mere spectator. As the PCA provided in its Resolution No. 018-93:
NOW, THEREFORE, BE IT RESOLVED AS IT IS HEREBY RESOLVED, that, henceforth, PCA
shall no longer require any coconut oil mill, coconut oil refinery, coconut desiccator, coconut product
processor/factory, coconut fiber plant or any similar coconut processing plant to apply with PCA and the
latter shall no longer issue any form of license or permit as condition prior to establishment or operation
of such mills or plants;
RESOLVED, FURTHER, that the PCA shall limit itself only to simply registering the aforementioned
coconut product processors for the purpose of monitoring their volumes of production, administration of
quality standards with the corresponding service fees/charges.
The issue is not whether the PCA has the power to adopt this resolution to carry out its mandate under the law "to
promote the accelerated growth and development of the coconut and other palm oil industry."17 The issue rather is
42 | AEP
whether it can renounce the power to regulate implicit in the law creating it for that is what the resolution in
question actually is.
Under Art. II, § 3(a) of the Revised Coconut Code (P.D. No. 1468), the role of the PCA is "To formulate and
adopt a general program of development for the coconut and other palm oil industry in all its aspects." By limiting
the purpose of registration to merely "monitoring volumes of production [and] administration of quality standards"
of coconut processing plants, the PCA in effect abdicates its role and leaves it almost completely to market forces
how the coconut industry will develop.
Art. II, § 3 of P.D. No. 1468 further requires the PCA:
(h) To regulate the marketing and the exportation of copra and its by-products by establishing standards
for domestic trade and export and, thereafter, to conduct an inspection of all copra and its by-products
proposed for export to determine if they conform to the standards established;
Instead of determining the qualifications of market players and preventing the entry into the field of those who are
unfit, the PCA now relies entirely on competition — with all its wastefulness and inefficiency — to do the
weeding out, in its naive belief in survival of the fittest. The result can very well be a repeat of 1982 when free
enterprise degenerated into a "free-for-all," resulting in cut-throat competition, underselling, the production of
inferior products and the like, which badly affected the foreign trade performance of the coconut industry.
Indeed, by repudiating its role in the regulatory scheme, the PCA has put at risk other statutory provisions,
particularly those of P.D. No. 1644, to wit:
Sec. 1. The Philippine Coconut Authority shall have full power and authority to regulate the marketing
and export of copra, coconut oil and their by-products, in furtherance of the steps being taken to
rationalize the coconut oil milling industry.
Sec. 2. In the exercise of its powers under Section 1 hereof, the Philippine Coconut Authority may
initiate and implement such measures as may be necessary to attain the rationalization of the coconut oil
milling industry, including, but not limited to, the following measures:
(a) Imposition of floor and/or ceiling prices for all exports of copra, coconut oil and their by-products;
(b) Prescription of quality standards;
(c) Establishment of maximum quantities for particular periods and particular markets;
(d) Inspection and survey of export shipments through an independent international superintendent or
surveyor.
In the exercise of its powers hereunder, the Philippine Coconut Authority shall consult with, and be
guided by, the recommendation of the coconut farmers, through corporations owned or controlled by
them through the Coconut Industry Investment Fund and the private corporation authorized to be
organized under Letter of Instructions No. 926.
and the Revised Coconut Code (P.D. No. 1468), Art. II, § 3, to wit:
(m) Except in respect of entities owned or controlled by the Government or by the coconut farmers
under Sections 9 and 10, Article III hereof, the Authority shall have full power and authority to regulate
the production, distribution and utilization of all subsidized coconut-based products, and to require the
submission of such reports or documents as may be deemed necessary by the Authority to ascertain
whether the levy payments and/or subsidy claims are due and correct and whether the subsidized
products are distributed among, and utilized by, the consumers authorized by the Authority.
The dissent seems to be saying that in the same way that restrictions on entry into the field were imposed in 1982
and then relaxed in 1987, they can be totally lifted now without prejudice to reimposing them in the future should
it become necessary to do so. There is really no renunciation of the power to regulate, it is claimed. Trimming
down of PCA's function to registration is not an abdication of the power to regulate but is regulation itself. But
how can this be done when, under Resolution No. 018-93, the PCA no longer requires a license as condition for
the establishment or operation of a plant? If a number of processing firms go to areas which are already congested,
the PCA cannot stop them from doing so. If there is overproduction, the PCA cannot order a cut back in their
production. This is because the licensing system is the mechanism for regulation. Without it the PCA will not be
able to regulate coconut plants or mills.
In the first "whereas" clause of the questioned resolution as set out above, the PCA invokes a policy of free
enterprise that is "unhampered by protective regulations and unnecessary bureaucratic red tape" as justification for
abolishing the licensing system. There can be no quarrel with the elimination of "unnecessary red tape." That is
within the power of the PCA to do and indeed it should eliminate red tape. Its success in doing so will be
applauded. But free enterprise does not call for removal of "protective regulations."
Our Constitutions, beginning with the 1935 document, have repudiated laissez-faire as an economic principle.18
Although the present Constitution enshrines free enterprise as a policy,19 it nonetheless reserves to the
government the power to intervene whenever necessary to promote the general welfare. This is clear from the
following provisions of Art. XII of the Constitution which, so far as pertinent, state:
Sec. 6. . . . Individuals and private groups, including corporations, cooperatives, and similar collective
organizations, shall have the right to own, establish, and operate economic enterprises, subject to the
duty of the State to promote distributive justice and to intervene when the common good so demands.
Sec. 19. 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. (Emphasis added).
At all events, any change in policy must be made by the legislative department of the government. The regulatory
system has been set up by law. It is beyond the power of an administrative agency to dismantle it. Indeed,
petitioner charges the PCA of seeking to render moot a case filed by some of its members questioning the grant of
licenses to certain parties by adopting the resolution in question. It is alleged that members of petitioner
complained to the court that the PCA had authorized the establishment and operation of new plants in areas which
were already crowded, in violation of its Administrative Order No. 002, series of 1991. In response, the Regional
Trial Court issued a writ of preliminary injunction, enjoining the PCA from issuing licenses to the private
respondent in that case.
These allegations of petitioner have not been denied here. It would thus seem that instead of defending its decision
to allow new entrants into the field against petitioner's claim that the PCA decision violated the guidelines in
43 | AEP
Administrative Order No. 002, series of 1991, the PCA adopted the resolution in question to render the case moot.
In so doing, the PCA abdicated its function of regulation and left the field to untrammeled competition that is
likely to resurrect the evils of cut-throat competition, underselling and overproduction which in 1982 required the
temporary closing of the field to new players in order to save the industry.
The PCA cannot rely on the memorandum of then President Aquino for authority to adopt the resolution in
question. As already stated, what President Aquino approved in 1988 was the establishment and operation of new
DCN plants subject to the guidelines to be drawn by the PCA.20 In the first place, she could not have intended to
amend the several laws already mentioned, which set up the regulatory system, by a mere memoranda to the PCA.
In the second place, even if that had been her intention, her act would be without effect considering that, when she
issued the memorandum in question on February 11, 1988, she was no longer vested with legislative authority.21
WHEREFORE, the petition is GRANTED. PCA Resolution No. 018-93 and all certificates of registration issued
under it are hereby declared NULL and VOID for having been issued in excess of the power of the Philippine
Coconut Authority to adopt or issue.
SO ORDERED.
Narvasa, C.J., Regalado, Davide, Jr., Puno, Kapunan, Francisco, Panganiban and Martinez, JJ., concur.
Separate Opinions
ROMERO, J., dissenting;
The past decade, a distinct worldwide trend towards economic deregulation has been evident. Both developed and
developing countries have seriously considered, and extensively adopted, various measures for this purpose. The
Philippines has been no exception.
To this end, the Philippine Coconut Authority (PCA) issued Board Resolution No. 018-93 (PCA-BR No 018-93)
dated March 24, 1993, deregulating the coconut processing plant industry.1 The Association of Philippine
Desiccators (APCD) has filed this instant petition for prohibition and mandamus under Rule 65 of the Rules of
Court seeking the annulment of said resolution.
APCD questions the validity of PCA-BR No. 018-93 for being violative of the principle of non-delegability of
legislative power. It contends that in issuing the resolution deregulating the coconut industry, the PCA exercised
legislative discretion, which has not been delegated to it by Congress. It adds that when PCA deregulated the
coconut industry, it ran counter to the very laws2 which mandated it to regulate and rationalize the industry.
We see no merit in this contention. PCA's authority to issue PCA-BR No. 018-93 is clearly provided in Section
3(a) of P.D. No. 232, reading as follows:
 . . . To formulate and adopt a general program of development for the coconut and other palm oil
industry.
Similar grants of authority were made in subsequent amendatory laws.3
In this regard, we have ruled that legislative discretion, as to the substantive contents of a law, cannot be
delegated. What may be delegated is the discretion to determine how the law is to be enforced, not what the law
should be, a prerogative of the legislature which it can neither abdicate nor surrender to the delegate.4 The
principle is based on the separation and allocation of powers among the three departments of government.5
Thus, there are two accepted tests to determine whether or not there is a valid delegation of legislative power,
namely, the completeness test and the sufficient standard test. Under the first test, the law must be complete in all
its terms and conditions when it leaves the legislature such that when it reaches the delegate, the only thing he will
have to do is enforce it. Under the sufficient standard test, there must be adequate guidelines or limitations in the
law to map out the boundaries of the delegate's authority and prevent the delegation from running amiss.6
We have accepted as sufficient standards "interest of law and order,"7 "adequate and efficient instruction," 8
"public interest,"9 "justice and equity,"10 "public convenience and welfare,"11 "simplicity, economy and
efficiency,"12 "standardization and regulation of medical education,"13 and "fair and equitable employment
practices."14 Consequently, the standard may be expressed or implied. In the former, the non delegation objection
is easily met. The standard though does not have to be spelled out but need only be implied from the policy and
purpose of the act considered as a whole.15 It may also be found in other statutes on the same subject as that of the
challenged legislation.16
In no uncertain terms must it be stressed that the function of promulgating rules and regulations may be
legitimately exercised only for the purpose of carrying out the provisions of a law. The power of administrative
agencies is confined to implementing the law or putting it into effect. Corollary to this guideline is that
administrative regulation cannot extend the law and amend a legislative enactment.17
In the instant case, we believe that the PCA did not overstep the limits of its power in issuing the assailed
resolution. We need not belabor the point that one of the economic goals of our country is the increased
productivity of goods and services provided by the nation for the benefit of the people,18 since from a purely
economic standpoint, the increase in agricultural productivity is of fundamental importance.19
Considering the responsibilities and powers assigned to the PCA, as well as its underlying policy, namely, that
"the economic well-being of a major part of the population depends to a large extent on the viability of the
industry and its improvement in the areas of production, processing and marketing," the irresistible conclusion is
that PCA-BR No. 018-93 is a valid exercise of delegated legislation by the PCA. Such resolution is in harmony
with the objectives sought to be achieved by the laws regarding the coconut industry, particularly "to promote
accelerated growth and development of the coconut and other palm oil industry,"20 and "rapid integrated
development and growth of the coconut and other palm oil industry."21 These are sufficient standards to guide the
PCA. Thus, measures to achieve these policies are better left to the administrative agencies tasked with
implementing them.
It must be stressed that with increasing global trade and business and major upheavals in technology and
communications, the time has come for administrative policies and regulations to adapt to ever-changing business
needs rather than to accommodate traditional acts of the legislature.22 Even the 1987 Constitution was designed to
meet, not only contemporary events, but also future and unknown circumstances.23
44 | AEP
It is worth mentioning that the PCA, after conducting its studies, adopted the policy of deregulation to further
enhance the coconut industry competition, since any continuation of the restrictive regulation in the industry
would have detrimental effects.24 This is in consonance with the constitutional mandate that the State must "adopt
measures that help make them (locally produced goods) competitive."25 Undoubtedly, an "agency, in light of
changing circumstances, is free to alter interpretative and policy views reflected in regulations construing an
underlying statute, so long as any changed construction of the statute is consistent with express congressional
intent or embodies a permissible reading of the statute."26
Furthermore, the Constitution is cognizant of the realities of global interdependency, as it requires the pursuit of "a
trade policy that serves the general welfare and utilizes all forms and arrangements of exchanges on the basis of
equality and reciprocity."27
In sum, the policy of deregulation must be determined by the circumstances prevailing in a certain situation.28 As
we have stressed in the past, this Court is only concerned with the question of authority, not the wisdom of the
measure involved which falls within the province of the Legislature.
The ponencia presents the issue: whether it is within the power of the PCA to renounce the power to regulate
implicit in the law creating it (P.D. No. 232). (It is to be pointed out that this issue was not included in the
Assignment of Errors of Petitioner).
Underlying this formulation is the assumption/admission that PCA has the power to regulate the coconut industry,
as in fact the power is bestowed upon it by its organic act, P.D. No. 232, viz. "to promote the rapid integrated
development and growth of the coconut and other palm oils in industry in all its aspects and to ensure that the
coconut farmers become direct participants in, and beneficiaries of, such development and growth." Its broad
mandate is "to formulate and adopt a general program of development for the coconut and other palm oils
industry."
It avers that this "legislative scheme" was disregarded when the PCA adopted on March 24, 1993 the assailed
Resolution which is effect liberalized the registration and licensing requirements for the granting of permits to
operate new coconut plants. But this was effected pursuant to the October 23, 1987 PCA Board Resolution laying
down the policy of deregulating the industry and authorizing the creation of additional desiccated coconut plants.
As with any administrative agency established to promote the growth and development of any industry, the PCA
has considerable latitude to adopt policies designed to accelerate the attainment of this objective and corollarily, to
lay down rules and regulations to implement the same. We can take judicial notice of the fact that during its 25
years of existence, the PCA has achieved enough experience and expertise to introduce measures which shall
ensure the dominant role of the crop as a major dollar-producing industry, including the manipulation of market
forces to our comparative advantage, certainly an area beyond the Court's ken.
Hence, guided by guidelines already laid down, it responded to regional developments by:
(1) taking cognizance of the overproduction in the industry and curtailing the expansion of coconut processing
plants in 1982, within reasonable limits and with safeguards (hence the issuance of Executive Order Nos. 826 on
August 28, 1982 and No. 854 on December 6, 1982);
(2) five years later, responding to the demand for desiccated coconut products in the world market, liberalized its
former policy by deregulating the industry and authorizing the creation of additional desiccated coconut plants in
1987;
(3) complementing and supplementing (2), by easing registration and licensing requirements in 1993.
It bears repeating that the above measures were not taken arbitrarily but in careful compliance with guidelines
incorporated in the Executive Orders and subject to the favorable recommendation of the Secretary of Agriculture
and the approval of the President.
The crux of the ponencia is that, in the process of opening doors to foreign markets, the PCA "limited itself to
merely monitoring their volumes of production and administration of quality standards, in effect abdicating its
role and leaving it almost totally to market forces to define how the industry will develop."
Actually, the relevant provisions in the disputed resolution reads:
Resolved further, that the PCA shall limit itself only to simply registering the aforementioned coconut
product processors for the purpose of monitoring their volumes of production, administration of quality
standards with the corresponding service fees/charges.
For the sake of clarity and accuracy, it is to be stressed that the PCA did not limit itself "merely to monitoring . . ."
as the ponencia states, but to "registering the . . . processors for the purpose of monitoring their volumes of
production and administration of quality standards. . . ."
In the actual words of the Resolution, the PCA recognizes its principal function of registration so as to be able to
monitor the production and administer quality standards, both objectives of which are not merely nominal or
minimal, but substantial, even vital, aspects of the power to regulate. Put differently, there is no renunciation of
the power to regulate, for the regulation is essentially recognized and accomplished through the registration
function which enables the PCA to keep track of the volume of production and the observance of quality standards
by new entrants into the industry. In sum, trimming down its functions to registration is not an abdication of the
power to regulate but is regulation itself.
If the PCA, in light of the crucial developments in the regional and domestic coconut industry decides to open
wide its doors, allow the free entry of other players and the interplay of competitive forces to shape the
configuration of the industry, who are we to declare such policy as one characterized by "wastefulness and
inefficiency . . . based on its naive faith in survival of the fittest." Is not this a blatant incursion by the Court into
the economic arena which is better left to the administrative agency precisely tasked to promote the growth of the
industry, through the exercise of its studied discretion? To be sure, those operators already in the field, such as the
petitioner members of the Association of Philippine Coconut Desiccators, are expected to vigorously protest and
work for the nullity of what they perceive as an obnoxious, life threatening policy. But instead of opposing what
the PCA views as a timely, well-considered move, the healthy competition should spur them to improving their
product and elevating the standards they have imposed on themselves.
If, in the course of its monitoring which is a piece of the regulatory function, the PCA should detect a violation of
its guidelines that would result in a lowering of the quality of the product, or unfairness to other players, surely, it
is not powerless to impose sanctions, as categorically provided in P.D. 1469, P.D. 1644, Adm. Order No. 003,
Series of 1981 and Adm. Order No. 002, Series of 1991. Any administrative agency is empowered to establish its
implementing rules, together with sanctions guaranteed to ensure the observance of such rules, else it would be a
mere "toothless" entity.
The ponencia prognosticates, "The result can very well be a repeat of 1982 when free enterprise degenerated into a
'free-for-all,' resulting in cutthroat competition, underselling, the production of inferior products and the like,
45 | AEP
which badly affected the foreign trade performance of our coconut industry." Are we not encroaching on
legislative domain in questioning the wisdom of the action taken by the PCA which was accorded a broad mandate
by the Congress? Moreover, let us bear in mind that during those "abnormal times," forces other than merely
economic, e.g. political, dominated the economy effectively supporting, even favoring, destructive capitalistic
monopolies and, in the process suppressing healthy competition.
Not to forget, too, that we cannot close our eyes and ignore the world-wide trend towards globalization in the
economy, as in other fields, as in fact the Court recognized this economic reality in its decision in the Oil
Deregulation Case.
With the unrelenting march of globalization in our economy, the Philippines must find its market niches and be
able to adapt to these inevitable changes, for the Asia-Pacific rim is bound to become a truly dynamic region in the
economic, political and cultural arenas in the coming millennium.
ACCORDINGLY, the petition should be DISMISSED.
Bellosillo, Melo, Vitug, Quisumbing and Purisima, JJ., dissent.
Separate Opinions
ROMERO, J., dissenting;
The past decade, a distinct worldwide trend towards economic deregulation has been evident. Both developed and
developing countries have seriously considered, and extensively adopted, various measures for this purpose. The
Philippines has been no exception.
To this end, the Philippine Coconut Authority (PCA) issued Board Resolution No. 018-93 (PCA-BR No 018-93)
dated March 24, 1993, deregulating the coconut processing plant industry.1 The Association of Philippine
Desiccators (APCD) has filed this instant petition for prohibition and mandamus under Rule 65 of the Rules of
Court seeking the annulment of said resolution.
APCD questions the validity of PCA-BR No. 018-93 for being violative of the principle of non-delegability of
legislative power. It contends that in issuing the resolution deregulating the coconut industry, the PCA exercised
legislative discretion, which has not been delegated to it by Congress. It adds that when PCA deregulated the
coconut industry, it ran counter to the very laws2 which mandated it to regulate and rationalize the industry.
We see no merit in this contention. PCA's authority to issue PCA-BR No. 018-93 is clearly provided in Section
3(a) of P.D. No. 232, reading as follows:
. . . To formulate and adopt a general program of development for the coconut and other palm oil
industry.
Similar grants of authority were made in subsequent amendatory laws.3
In this regard, we have ruled that legislative discretion, as to the substantive contents of a law, cannot be
delegated. What may be delegated is the discretion to determine how the law is to be enforced, not what the law
should be, a prerogative of the legislature which it can neither abdicate nor surrender to the delegate.4 The
principle is based on the separation and allocation of powers among the three departments of government.5
Thus, there are two accepted tests to determine whether or not there is a valid delegation of legislative power,
namely, the completeness test and the sufficient standard test. Under the first test, the law must be complete in all
its terms and conditions when it leaves the legislature such that when it reaches the delegate, the only thing he will
have to do is enforce it. Under the sufficient standard test, there must be adequate guidelines or limitations in the
law to map out the boundaries of the delegate's authority and prevent the delegation from running amiss.6
We have accepted as sufficient standards "interest of law and order,"7 "adequate and efficient instruction," 8
"public interest,"9 "justice and equity,"10 "public convenience and welfare,"11 "simplicity, economy and
efficiency,"12 "standardization and regulation of medical education,"13 and "fair and equitable employment
practices."14 Consequently, the standard may be expressed or implied. In the former, the non delegation objection
is easily met. The standard though does not have to be spelled out but need only be implied from the policy and
purpose of the act considered as a whole.15 It may also be found in other statutes on the same subject as that of the
challenged legislation.16
In no uncertain terms must it be stressed that the function of promulgating rules and regulations may be
legitimately exercised only for the purpose of carrying out the provisions of a law. The power of administrative
agencies is confined to implementing the law or putting it into effect. Corollary to this guideline is that
administrative regulation cannot extend the law and amend a legislative enactment.17
In the instant case, we believe that the PCA did not overstep the limits of its power in issuing the assailed
resolution. We need not belabor the point that one of the economic goals of our country is the increased
productivity of goods and services provided by the nation for the benefit of the people,18 since from a purely
economic standpoint, the increase in agricultural productivity is of fundamental importance.19
Considering the responsibilities and powers assigned to the PCA, as well as its underlying policy, namely, that
"the economic well-being of a major part of the population depends to a large extent on the viability of the
industry and its improvement in the areas of production, processing and marketing," the irresistible conclusion is
that PCA-BR No. 018-93 is a valid exercise of delegated legislation by the PCA. Such resolution is in harmony
with the objectives sought to be achieved by the laws regarding the coconut industry, particularly "to promote
accelerated growth and development of the coconut and other palm oil industry,"20 and "rapid integrated
development and growth of the coconut and other palm oil industry."21 These are sufficient standards to guide the
PCA. Thus, measures to achieve these policies are better left to the administrative agencies tasked with
implementing them.
It must be stressed that with increasing global trade and business and major upheavals in technology and
communications, the time has come for administrative policies and regulations to adapt to ever-changing business
needs rather than to accommodate traditional acts of the legislature.22 Even the 1987 Constitution was designed to
meet, not only contemporary events, but also future and unknown circumstances.23
It is worth mentioning that the PCA, after conducting its studies, adopted the policy of deregulation to further
enhance the coconut industry competition, since any continuation of the restrictive regulation in the industry
would have detrimental effects.24 This is in consonance with the constitutional mandate that the State must "adopt
measures that help make them (locally produced goods) competitive."25 Undoubtedly, an "agency, in light of
changing circumstances, is free to alter interpretative and policy views reflected in regulations construing an
46 | AEP
underlying statute, so long as any changed construction of the statute is consistent with express congressional
intent or embodies a permissible reading of the statute."26
Furthermore, the Constitution is cognizant of the realities of global interdependency, as it requires the pursuit of "a
trade policy that serves the general welfare and utilizes all forms and arrangements of exchanges on the basis of
equality and reciprocity."27
In sum, the policy of deregulation must be determined by the circumstances prevailing in a certain situation.28 As
we have stressed in the past, this Court is only concerned with the question of authority, not the wisdom of the
measure involved which falls within the province of the Legislature.
The ponencia presents the issue: whether it is within the power of the PCA to renounce the power to regulate
implicit in the law creating it (P.D. No. 232). (It is to be pointed out that this issue was not included in the
Assignment of Errors of Petitioner).
Underlying this formulation is the assumption/admission that PCA has the power to regulate the coconut industry,
as in fact the power is bestowed upon it by its organic act, P.D. No. 232, viz. "to promote the rapid integrated
development and growth of the coconut and other palm oils in industry in all its aspects and to ensure that the
coconut farmers become direct participants in, and beneficiaries of, such development and growth." Its broad
mandate is "to formulate and adopt a general program of development for the coconut and other palm oils
industry."
It avers that this "legislative scheme" was disregarded when the PCA adopted on March 24, 1993 the assailed
Resolution which is effect liberalized the registration and licensing requirements for the granting of permits to
operate new coconut plants. But this was effected pursuant to the October 23, 1987 PCA Board Resolution laying
down the policy of deregulating the industry and authorizing the creation of additional desiccated coconut plants.
As with any administrative agency established to promote the growth and development of any industry, the PCA
has considerable latitude to adopt policies designed to accelerate the attainment of this objective and corollarily, to
lay down rules and regulations to implement the same. We can take judicial notice of the fact that during its 25
years of existence, the PCA has achieved enough experience and expertise to introduce measures which shall
ensure the dominant role of the crop as a major dollar-producing industry, including the manipulation of market
forces to our comparative advantage, certainly an area beyond the Court's ken.
Hence, guided by guidelines already laid down, it responded to regional developments by:
(1) taking cognizance of the overproduction in the industry and curtailing the expansion of coconut processing
plants in 1982, within reasonable limits and with safeguards (hence the issuance of Executive Order Nos. 826 on
August 28, 1982 and No. 854 on December 6, 1982);
(2) five years later, responding to the demand for desiccated coconut products in the world market, liberalized its
former policy by deregulating the industry and authorizing the creation of additional desiccated coconut plants in
1987;
(3) complementing and supplementing (2), by easing registration and licensing requirements in 1993.
It bears repeating that the above measures were not taken arbitrarily but in careful compliance with guidelines by the Congress? Moreover, let us bear in mind that during those "abnormal times," forces other than merely
incorporated in the Executive Orders and subject to the favorable recommendation of the Secretary of Agriculture economic, e.g. political, dominated the economy effectively supporting, even favoring, destructive capitalistic
and the approval of the President. monopolies and, in the process suppressing healthy competition.

The crux of the ponencia is that, in the process of opening doors to foreign markets, the PCA "limited itself to Not to forget, too, that we cannot close our eyes and ignore the world-wide trend towards globalization in the
merely monitoring their volumes of production and administration of quality standards, in effect abdicating its economy, as in other fields, as in fact the Court recognized this economic reality in its decision in the Oil
role and leaving it almost totally to market forces to define how the industry will develop." Deregulation Case.

Actually, the relevant provisions in the disputed resolution reads:
Resolved further, that the PCA shall limit itself only to simply registering the aforementioned coconut
product processors for the purpose of monitoring their volumes of production, administration of quality
standards with the corresponding service fees/charges.
With the unrelenting march of globalization in our economy, the Philippines must find its market niches and be
able to adapt to these inevitable changes, for the Asia-Pacific rim is bound to become a truly dynamic region in the
economic, political and cultural arenas in the coming millennium.
ACCORDINGLY, the petition should be DISMISSED.

For the sake of clarity and accuracy, it is to be stressed that the PCA did not limit itself "merely to monitoring . . ."
as the ponencia states, but to "registering the . . . processors for the purpose of monitoring their volumes of
production and administration of quality standards. . . ."

In the actual words of the Resolution, the PCA recognizes its principal function of registration so as to be able to
monitor the production and administer quality standards, both objectives of which are not merely nominal or
minimal, but substantial, even vital, aspects of the power to regulate. Put differently, there is no renunciation of
the power to regulate, for the regulation is essentially recognized and accomplished through the registration
function which enables the PCA to keep track of the volume of production and the observance of quality standards
by new entrants into the industry. In sum, trimming down its functions to registration is not an abdication of the
power to regulate but is regulation itself.

If the PCA, in light of the crucial developments in the regional and domestic coconut industry decides to open
wide its doors, allow the free entry of other players and the interplay of competitive forces to shape the
configuration of the industry, who are we to declare such policy as one characterized by "wastefulness and
inefficiency . . . based on its naive faith in survival of the fittest." Is not this a blatant incursion by the Court into
the economic arena which is better left to the administrative agency precisely tasked to promote the growth of the
industry, through the exercise of its studied discretion? To be sure, those operators already in the field, such as the
petitioner members of the Association of Philippine Coconut Desiccators, are expected to vigorously protest and
work for the nullity of what they perceive as an obnoxious, life threatening policy. But instead of opposing what
the PCA views as a timely, well-considered move, the healthy competition should spur them to improving their
product and elevating the standards they have imposed on themselves.

If, in the course of its monitoring which is a piece of the regulatory function, the PCA should detect a violation of
its guidelines that would result in a lowering of the quality of the product, or unfairness to other players, surely, it
is not powerless to impose sanctions, as categorically provided in P.D. 1469, P.D. 1644, Adm. Order No. 003,
Series of 1981 and Adm. Order No. 002, Series of 1991. Any administrative agency is empowered to establish its
implementing rules, together with sanctions guaranteed to ensure the observance of such rules, else it would be a
mere "toothless" entity.

The ponencia prognosticates, "The result can very well be a repeat of 1982 when free enterprise degenerated into a
'free-for-all,' resulting in cutthroat competition, underselling, the production of inferior products and the like,
which badly affected the foreign trade performance of our coconut industry." Are we not encroaching on
legislative domain in questioning the wisdom of the action taken by the PCA which was accorded a broad mandate
47 | AEP
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-12944 March 30, 1959
MARIA NATIVIDAD VDA. DE TAN, petitioner-appellee,
vs.
VETERANS BACKPAY COMMISSION, respondent-appellant.
Atilano R. Cinco and Aguilan and Rosero Law Offices for appellee.
Acting Solicitor General Guillermo E. Torres and Solicitor Camilo D. Quiason for appellant.
REYES, J.B.L., J.:
On March 5, 1957, petitioner-appellee, Maria Natividad vda. de Tan filed with the Court of First Instance of
Manila a verified petition for mandamus seeking an order to compel the respondent-appellant Veterans Back Pay
Commission: (1) to declare deceased Lt. Tan Chiat Bee alias Tan Lian Lay, a Chinese national, entitled to
backpay rights, privileges, and prerogatives under Republic Act No. 304, as amended by Republic Act No. 897;
and (2) to give due course to the claim of petitioner, as the widow of the said veterans, by issuing to her the
corresponding backpay certificate of indebtedness.
Respondent Commission filed its answer in due time asserting certain special and affirmative defenses, on the
basis of which, the Commission unsuccessfully moved to dismiss the petition.
The parties then submitted a stipulation of facts hereinbelow reproduced:
Come now the petitioner and respondent in the above-entitled case through their respective counsel, and
to this Honorable Court respectfully agree and stipulate that the following facts are true:
1. That the petitioner is of legal age, widow, and a resident of •400 Lallana, Tondo, Manila; that the
respondent is a government instrumentality or agency, with offices in the City of Manila, Philippines,
duly vested with authority to implement the provisions of the Backpay Law, otherwise known as
Republic Act No. 879, further amending Republic Act No. 304;
2. That the petitioner is the widow of the late Lt. Tan Chiat Bee alias Tan Lian Lay, a Chinese national,
and a bona fide member of the 1st Regiment, United States-Chinese Volunteers in the Philippines;
3. That the United States-Chinese Volunteers in the Philippines is a guerrilla organization duly
recognized by the Army of the United States and forming part and parcel of the Philippine Army;
4. That Tan Chiat Bee alias Tan Lian Lay died in the service on April 4, 1945 in the battle at Ipo Dam,
Rizal Province, Philippines; he was duly recognized as a guerrilla veteran and certified to by the Armed
48 | AEP
Forces of the Philippines as having rendered meritorious military services during the Japanese
occupation;
5. That petitioner as the widow of the said recognized deceased veteran, filed an application for back
pay under the provisions of Republic Act No. 897, the resolution of the Veterans Back Pay
Commissions dated November 19, 1953 and the letter of the Veterans Back Pay Commission dated
December 9, 1953;
6. That on June 18, 1955, the Secretary and the Chief of Office Staff of Veterans Back Pay Commission
sent a letter to General Vicente Lopez of the United States-Chinese Volunteers in the Philippines
apprising the latter that the Commission has reaffirmed its resolution granting the back pay to alien
members;
7. That the Adjutant, Armed Forces of the Philippines, has verified and certified that deceased veteran
has rendered service as a recognized guerrilla for the period indicated in his •(Adjutant's) indorsement
to the Chief, Finance Service Armed Forces of the Philippines;
8. That, likewise, the Chief of Finance Service, Camp Murphy, has computed the backpay due the
petitioner and the same was passed in audit by representatives of the Auditor General;
9. That after due liberation respondent revoked its previous stands and ruled that aliens are not entitled
to back pay;
10. That on February 13, 1957, the respondent Veterans Back Pay Commission, through its Secretary &
Chief of Office Staff, made a formal reply to the aforesaid claim of the herein petitioner denying her
request on the ground that aliens are not entitled to back pay;
11. That upon refusal of the Veterans Back Pay Commission the petitioner brought the case direct to this
Honorable Court by way of mandamus;
12. That petitioner and respondent admit the existence and authenticity of the following documents;
Annex A—Resolution of the Veterans Back Pay dated November 19, 1953.
Annex B—Letter dated December 9, 1953.
Annex C—Letter dated June 18, 1955.
Annex D—Executive Order No. 21 dated October 28, 1944.
Annex E—Executive Order No. 68 dated September 26, 1945.
Annex F—Minutes of the Resolution of the Back Pay Commission regarding the opinion of the
Secretary of Justice dated February 8, 1956.
Annex G—Letter of Back Pay Commission dated February 26, 1954 to Secretary of Justice.
 Annex H—Opinion No. 213 series of 1956 of the Secretary of Justice.
Annex I—Reply of Veterans Backpay Commission.
Annex J—Explanatory Note to House Bill No. 1953.
Annex K—Explanatory note to Senate Bill No. 10.
Annex L—Explanatory note to House Bill No. 1228, now Republic Act No. 897.
Annex M—Joint Resolution No. 5 of the First Congress of the Philippines.
13. That the parties waive the presentation of further evidence;
14. That the respondents will file its memorandum within ten (10) days from August 1, 1957 and the
petitioner may file her memorandum within ten (10) days from receipt of respondent's memorandum,
after which the case is deemed submitted for decision.
Manila, July 31, 1957.
Based on the foregoing, the lower court rendered judgment the dispositive portion of which, reads:
Wherefore, the petition is granted, ordering respondent Commission to give due course to the claim of
herein petitioner to the backpay to which her deceased husband was entitled as member of a duly
recognized guerrilla organization.
Against the decision, the respondent instituted this appeal averring once more, in its assignment of errors, the
special and affirmative defenses that the petitioner failed to exhaust available administrative remedies; that the suit
is, in effect, an action to enforce a money claim against the government without its consent; that mandamus will
not lie to compel the exercise of •a discretionary function; and that the Republic Act Nos. 304 and •897 already
referred to were never intended to benefit aliens.
We find no merit in the appeal. As to the claim that mandamus is not the proper remedy to correct the exercise of
discretion of the Commission, it may well be remembered that its discretion is limited to the facts of the case, i.e.,
in merely evaluating the evidence whether or not the claimant is a member of a guerrilla force duly recognized by
the United States Army. Nowhere in the law is the respondent Commission given the power to adjudicate or
determine rights after such facts are established. Having been satisfied that deceased Tan Chiat Bee was an officer
of a duly recognized guerrilla outfit, certified to by the Armed Forces of the Philippines, having served under the
United States-Chinese Volunteers in the Philippines, a guerrilla unit recognized by the United States army and
forming part of the Philippine Army, it becomes the ministerial duty of the respondent to give due course to his
widow's application. (See sections 1 and 6, Republic Act •897). Note that the Chief of the Finance Service, Camp
Murphy, has accepted the backpay due the petitioner's husband and the same was passed in audit by the
representatives of the Auditor General.
It is insisted by the respondent Commission that aliens are not included within the purview of the law. We
disagree. The law is contained in Republic Act Nos. 304 and 897 is explicit enough, and it extends its benefits to
49 | AEP
members of "guerrilla forces duly recognized by the Army of the United States." From the plain and clear
language thereof, we fail to see any indication that its operation should be limited to citizens of the Philippines
only, for all that is required is that the guerrilla unit be duly recognized by the Army of the United States. We are
in full accord with Opinion No. 213, series of 1956, of the Secretary of Justice, which reads:
Section 1 of the cited Act (Republic act No. 304, as amended by Republic Act No. 897), otherwise
known as the Back Pay Law, recognizes the rights to the backpay of members of "guerrilla forces duly
recognized by the Army of the United States, among others. A perusal of its provisions reveals nothing
which may be construed to mean that only Filipino citizens are entitled to back pay thereunder. On the
contrary, the statute expressly includes within its coverage "persons under contract with the Government
of the Commonwealth", which clause was construed by this office to refer to service" by the government
(Opinion No. •137, s. 1953), a majority of whom were non-citizens. Thus, the Opinion No. 30, s. 1949,
this office ruled that a civil service employee of the U.S. Coast and Geodetic Survey rendering the
service to the Philippine Government when war broke out on December 8, 1941, was entitled to back
pay.
As regards guerrillas, it seems clear that all the law requires is that they be "duly recognized by the
Army of the United States." Section 1 of the Back Pay Law, it is also noted, enumerates those who are
not entitled to its benefits; recognized guerrillas who were not Filipino citizens are not among those
expressly mentioned. The maxim expressio unius est exclusio alterius, I think, finds application here.
Moreover, Executive Order No. 21, dated October 28, 1944, expressly declared that, Sections 22 (a) and
27 of Commonwealth Act No. 1 to the contrary notwithstanding, "all persons of any nationality or
citizenship, who are actively serving in recognized military forces in the Philippines, are thereby
considered to be on active service in the Philippine Army."
It is the respondent's main argument that it could not have been the intention of Congress to extend its benefit to
aliens, as the purpose of the law was "precisely to help rehabilitate members of the Armed Forces of the
Philippines and recognized guerrillas by giving them the right to acquire public lands and public property by using
the back pay certificate", and "it is fundamental under the Constitution that aliens except American citizens cannot
acquire public lands or exploit our natural resources". Respondent Commission fails to realize that this is just one
of the various uses of the certificate; and that it may also be utilized for the payment of obligations to the
Government or to any of its branches or instrumentalities, i.e., taxes, government hospital bills, etc. (See Sec. 2,
Rep. act No. 897).
As further observed by the lower court:
It is one thing to be entitled to backpay and to receive acknowledgment therefor, and another thing to
receive backpay certificates in accordance with the resolutions of the Commission and to make use of
the same.
It was, therefore, unreasonable if not arbitrary on the part of respondent Commission to deny petitioner's claim on
the basis.
It is further contended by the Commission that the petitioner should have first exhausted her administrative
remedies by appealing to the President of the Philippines, and that her failure to do so is a bar to her action in court
(Montes vs. The Civil Service Board of Appeals, 101 Phil., 490; 54 Off. Gaz. [7] 2174. The respondent
Commission is in estoppel to invoke this rule, considering that in its resolution (Annex F of the Stipulation of
Facts) reiterating its obstinate refusal to abide by the opinion of the Secretary of Justice, who is the legal adviser of
the Executive Department, the Commission declared that —

The opinions promulgated by the Secretary of Justice are advisory in nature, which may either be
accepted or ignored by the office seeking the opinion, and any aggrieved party has the court for
recourse, (Annex F)

thereby leading the petitioner to conclude that only a final judicial ruling in her favor would be accepted by the
Commission.

Neither is there substance in the contention that the petition is, in effect, a suit against the government without its
consent. the relief prayed for is simply "the recognition of the petitioner-appellee" under the provisions of sections
1 and 2 of Republic Act No. 897, and consists in "directing an agency of the government to perform an act . . . it is
bound to perform." Republic Act Nos. 304 and 897 necessarily embody state consent to an action against the
officers entrusted with the implementation of said Acts in case of unjustified refusal to recognize the rights of
proper applicants.

The decision appealed from should be, and hereby is, affirmed. No costs. So ordered.

50 | AEP
 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 119645 August 22, 1996
SPO3 NOEL CABADA and SPO3 RODOLFO G. DE GUZMAN, petitioners,
vs.
HON. RAFAEL M. ALUNAN III, Secretary of the Department of Interior and Local Government &
Chairman, National Police Commission (NAPOLCOM); HON. ALEXIS CANONIZADO, Commissioner,
NAPOLCOM, Manila; Chairman LEODEGARIO ALFARO, Regional Appellate Board VIII; Regional
Director EDMUNDO LAVILLA LARROZA, Philippine National Police (PNP) Regional Command VIII;
and MARIO VALDEZ, respondents.
DAVIDE, JR., J.:p
This is a special civil action for certiorari under Rule 65 of the Rules of Court 1 to set aside the decision (in the
form of a letter) of 24 March 1995 2 of public respondent National Police Commission (NAPOLCOM), which
denied due course for lack of jurisdiction the appeal and the petition for review filed by petitioners SP03 Noel
Cabada and SP03 Rodolfo G. de Guzman, respectively. Challenged in the said appeal and petition for review were
the decision of 15 August 19943 and resolution of 25 October 1994 4 of the Regional Appellate Board of the
Eighth Regional Command (RAB 8), which affirmed their dismissal from the service.
The pleadings and annexes filed by the parties disclose the following factual and procedural backdrop of this case:
On 29 October 1993, a complaint against the petitioners for Grave Misconduct, Arbitrary Detention, and
Dishonesty was filed with the Office of the Commission on Human Rights in Tacloban City by private respondent
Mario Valdez.5 The complaint was referred to the Philippine National Police Eighth Regional Command (PNP-
RECOM 8) which, after conducting its own investigation, filed an administrative charge of Grave Misconduct
against the petitioners and instituted summary dismissal proceedings.
On 7 April 1994, the Regional Director of PNP-RECOM 8 handed down a decision 6 finding the petitioners guilty
of grave misconduct and ordering their dismissal from the police service. Pursuant to this decision, Special Order
No. 174, dated 23 April 1994, 7 was issued ordering, among other things, the dismissal of the petitioners from the
service.
The petitioners claimed that they were not formally furnished with a copy of the decision and that they were able
to secure a copy thereof "thru their own effort and initiative" only on 13 June 1994. 8 However, they received a
copy of Special Order No. 174 on 26 April 1994.
51 | AEP
Although they insist that the basis of the appeal before RAB 8 was Special Order No. 174, 9 petitioner Cabada
stated under oath in his
Appeal10 filed with the Department of Interior and Local Government (DILG) that he in fact seasonably filed a
motion for reconsideration of the decision of the Regional Director of PNP-RECOM 8, who, however, failed or
refused to act on the said motion, and that he asked that the said motion be treated as an appeal to the RAB.
In its decision of 15 August 1994, 11 the RAB 8 affirmed the decision of the Regional Director. In its resolution of
25 October 1994, 12 it denied the petitioners' motion for reconsideration of its decision. The petitioners received a
copy of this resolution on 26 January 1995.
Petitioners Cabada and De Guzman then filed with the Honorable Secretary of the DILG and Chairman of the
NAPOLCOM their "Appeal" 13 dated 5 February 1995 and "Petition for Review" 14 dated 4 February 1995,
respectively.
In its decision of 24 March 1995, the NAPOLCOM, through Commissioner Alexis Canonizado, denied due course
to the petitioners' appeal and petition for review for lack of jurisdiction "it appearing . . . that both the Decision
and the Resolution of the Regional Appellate Board had long become final and executory and there being no
showing that the RAB failed to decide respondents' appeal within the reglementary period of sixty (60) days." 15
In support thereof, the NAPOLCOM cited Section 23, Rule IV of NAPOLCOM Memorandum Circular No. 91-
002 and Section 5, Rule III of NAPOLCOM Memorandum Circular No. 91-006, which provide as follows:
Sec. 23. Effect of Failure to Decide Appeal. — Failure of the Regional Appellate Board to
decide the appeal within the reglementary period shall render the decision final and executory
without prejudice, however, to the filing of an appeal by either party with the Secretary of the
Department of the Interior and Local Government.
xxx xxx xxx
Sec. 5. Finality of Decision/Resolution. — The decision of the Regional Appellate Board on
an appealed case shall become final and executory after ten (10) days from receipt of a copy
thereof by the appellant, if no Motion for Reconsideration is filed within said period.
A motion for Reconsideration may be filed by either party from a Decision rendered by the
Regional Appellate Board on an appealed case, provided that the same is filed within ten (10)
days from receipt of a copy of the decision in question. However, only one (1) Motion for
Reconsideration may be allowed.
Hence, the instant petition.
The Office of the Solicitor General seeks to dismiss this petition on the ground of prematurity because the
petitioners failed to exhaust administrative remedies; they should have instead appealed to the Civil Service
Commission (CSC) pursuant to Section 47, Chapter 6, Subtitle A, Title I, Book V of the Administrative Code of
1987 (E.O. No. 292), which vests upon the CSC appellate jurisdiction over disciplinary cases of government
personnel where the penalty imposed is, inter alia, dismissal from office. The said provision reads:
Sec. 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, or removal or dismissal from office. . . .
(2) The Secretaries . . . shall have jurisdiction to investigate and decide matters involving
disciplinary action against officers and employees under their jurisdiction. . . . 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.
The Office of the Solicitor General opines that this provision covers PNP personnel, like the petitioners;
consequently, they should have appealed to the CSC. It also advances the view that the instant petition should
have been filed with the proper forum, the Regional Trial Court.
The core issues that present themselves for our determination are whether.
(1) the NAPOLCOM committed grave abuse of discretion in denying due course, for lack of
jurisdiction, the petitioners' appeal from and petition for review of the decision and resolution
of the RAB 8; and
(2) this special civil action was prematurely filed for failure of the petitioners to exhaust
administrative remedies.
I
Section 45 of the DILG Act of 1990 16 provides for the finality of disciplinary actions against members of the
PNP as follows:
Sec. 45. Finality of Disciplinary Action. — The disciplinary action imposed upon a member of
the PNP shall be final and executory: Provided, That a disciplinary action imposed by the
regional director or by the PLEB involving demotion or dismissal from the service may be
appealed to the regional appellate board within ten (10) days from receipt of the copy of the
notice of decision: Provided, further, That the disciplinary action imposed by the Chief of the
PNP involving demotion or dismissal may be appealed to the National Appellate Board within
ten (10) days from receipt thereof: Provided, furthermore, That, the regional or National
Appellate Board, as the case may be, shall decide the appeal within sixty (60) days from
receipt of the notice of appeal: Provided, finally, That failure of the regional appellate board
to act on the appeal within said period shall render the decision final and executory without
prejudice, however, to the filing of an appeal by either party with the Secretary. (emphasis
supplied)
The last proviso of this section is restated in Section 23, Rule IV of NAPOLCOM Memorandum Circular No. 91-
002. And Section 3, Rule III of NAPOLCOM Memorandum Circular No. 92-006 provides:
Sec. 3. Period Within Which to Decide Appealed Cases; Finality of RAB/NAB Decisions. —
The NAPOLCOM appellate board concerned shall decide the appealed cases within sixty (60)
days from receipt of the entire records of the case from the PNP summary dismissal authority.
52 | AEP
However, failure of the NAPOLCOM Regional Appellate Board (RAB) to act on the appeal
within said period renders the decision final and executory without prejudice to the filing of an
appeal by the respondent-appellant with the Secretary of the Department of the Interior and
Local Government. The decision rendered by the NAPOLCOM National Appellate Board
(NAB) disposing an appealed case shall be final and executory unless a timely Motion for
Reconsideration is filed within ten (10) days from receipt thereof, in which case, it shall
become final and executory upon receipt by the respondent-appellant of the resolution of the
aforesaid board denying, modifying or affirming the decision.
Section 45 of the DILG Act of 1990 specifically provides that if a RAB fails to decide an appeal within the
reglementary period of sixty days, the appealed decision becomes final and executory without, however, prejudice
to the right of the aggrieved party to appeal to the Secretary of the DILG. The said provision is, however, silent as
regards the availability of an appeal from a decision rendered by a RAB within the reglementary period.
This gap in Section 45 cannot be construed to prohibit appeals from decisions of the RAB rendered within the
reglementary period, for while the epigraph of the section is worded Finality of Disciplinary Action, there is
nothing therein that explicitly bars any further appeal. Complementary laws on discipline of government officials
and employees must then be inquired into considering that in conformity with the mandate of the Constitution that
the PNP must be national in scope and civilian in character, 17 it is now a part, as a bureau, of the reorganized
DILG. 18 As such, it falls within the definition of the civil service in Section 2 (1), Article IX-B of the
Constitution. 19 For this reason, Section 91 of the DILG Act of 1990 provides:
Sec. 91. Application of Civil Service Laws. — The Civil Service Law and its implementing
rules and regulations shall apply to all personnel of the Department.
The Civil Service Law referred to in Section 91 of the DILG Act of 1990 is Subtitle A, Title I, Book V of the
Administrative Code of 1987 (E.O. No. 292). Section 47 of Chapter 6 thereof provides, inter alia, that in cases
where the decision rendered by a bureau or office is appealable to the Commission, the same may initially be
appealed to the department and finally to the Commission.
The rules and regulations implementing the Civil Service Law referred to in Section 91 of the DILG Act of 1990
is the Omnibus Rules Implementing Book V of Executive Order No. 292 known as the Administrative Code of
1987 promulgated by the CSC. Sections 31 and 32, Rule XIV of the said Rules provide as follows:
Sec. 31. Except as otherwise provided by the Constitution or by law, the Commission shall
have the final authority to pass upon the removal, separation and suspension of all officers and
employees in the civil service and upon all matters relating to the conduct, discipline and
efficiency of such officers and employees.
Sec. 32. 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 (30) days or fine in an amount
not exceeding thirty (30) 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, then to
the Merit Systems Protection Board, 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.
Under Section 7 of E.O. No. 262, 20 the Secretary of the DILG has the power of supervision and control of his
Department. His powers and functions thereunder are recognized and affirmed in Section 10 of the DILG Act of
1990. 21
In view then of the aforementioned gap in Section 45 of the DILG Act of 1990, the provisions of the Civil Service
Law and the rules and regulations implementing it must be taken into account in light of the maxim interpretare
concordare legibus est optimus interpretandi or every statute must be so construed and harmonized with other
statutes as to form a uniform system of jurisprudence. 22
As thus construed and harmonized, it follows that if a RAB fails to decide an appealed case within sixty days from
receipt of the notice of appeal, the appealed decision is deemed final and executory, and the aggrieved party may
forthwith appeal therefrom to the Secretary of the DILG. Likewise, if the RAB has decided the appeal within the
sixty-day period, its decision may still be appealed to the Secretary of the DILG.
In the instant case, Cabada's appeal was addressed to "the Honorable Secretary of the Department of the Interior
and Local Government . . . as Chairman and Presiding Officer of the National Police Commission," 23 while De
Guzman's petition for review was addressed to "the Honorable Secretary, Department of the Interior and Local
Government and Chairman, National Police Commission, Makati City, Metro Manila." 24
We consider the appeal and the petition for review as appeals to the Secretary of the DILG under Section 45 of the
DILG Act of 1990.
Only the Secretary of the DILG can act thereon, one way or the other. The NAPOLCOM did not have authority
over the appeal and the petition for review, and just because both mentioned the Secretary of the DILG as
Chairman or Presiding Officer of the NAPOLCOM did not bring them within the jurisdiction of the
NAPOLCOM. The latter does not have such jurisdiction because Section 14 of the DILG Act of 1990 pertinently
provides as follows:
Sec. 14. Powers and Functions of the Commission. — . . .
xxx xxx xxx
(i) Affirm, reverse or modify, through the National Appellate Board, personnel disciplinary
action involving demotion or dismissal from the service imposed upon members of the
Philippine National Police by the Chief of the Philippine National Police;
(k) Exercise appellate jurisdiction through the regional appellate boards over administrative
cases against policemen and over decisions on claims for police benefits. . . .
This section clearly shows that the NAPOLCOM exercise appellate jurisdiction only on the following
cases and THROUGH (a) the NAB in personnel disciplinary actions involving demotion or dismissal
from the service imposed by the Chief of the PNP, and (b) the RAB in administrative cases against
policemen and over decisions on claims for police benefits. It has no appellate jurisdiction over
decisions rendered by the NAB and the RAB.
Consequently, the NAPOLCOM did not have the power or authority to issue, through Commissioner Alexis
Canonizado, the 24 March 1995 decision denying due course to the appeal and petition for review filed by
53 | AEP
petitioners Cabada and De Guzman, respectively, for lack of jurisdiction because of Section 5, Rule III of
NAPOLCOM Memorandum Circular No. 91-006 and Section 23, Rule IV of NAPOLCOM Memorandum
Circular No. 91-002. The reference to these rules suggest that the NAPOLCOM believes it has jurisdiction over
appeals from decisions of the RAB if the latter has not decided the appeal within the reglementary period of sixty
days. Such a suggestion is flawed because it would allow a ridiculous situation where the NAPOLCOM vests
upon itself an appellate jurisdiction from a decision rendered by it in the exercise of its appellate jurisdiction
through the RAB, per Section 14(k) of the DILG Act of 1990. Moreover, Commissioner Canonizado cannot,
singly, act for the NAPOLCOM because it is a collegial body composed of a Chairman and four Commissioners,
pursuant to Section 13 of the DILG Act of 1990.
In light of the foregoing, the petitioners could properly invoke our original jurisdiction to issue the extraordinary
writ of certiorari under Rule 65 of the Rules of Court to annul and set aside the NAPOLCOM's decision of 24
March 1995. It being a patent nullity, the filing of a motion for its reconsideration before the institution of this
special civil action may be dispensed with. 25
II
The plea of the Office of the Solicitor General that the instant action is premature for non-exhaustion of
administrative remedies is thus untenable. We would have sustained it if the Secretary of the DILG was the one
who denied due course to or dismissed the appeal of petitioner Cabada and the petition for review of petitioner De
Guzman. By then, pursuant to Section 91 of the DILG Act of 1990; Section 47, Chapter 6, Subtitle A, Title I,
Book V of the Administrative Code of 1987; and Sections 31 and 32 of the Omnibus Rules Implementing Book V
of Executive Order No. 292, the appeal would have to be filed with the CSC. And futile would be the petitioners
claim in their Reply to the Comment of the OSG that their case falls within the exceptions to the rule on
exhaustion of administrative remedies.
In view of all the foregoing, a discussion on the other issues raised by the petitioners relating to the merits of the
case and on the issue of due process is unnecessary.
WHEREFORE, premises considered, the instant petition is GRANTED. The decision (in the form of a fetter) of
the National Police Commission of 24 March 1995 is ANNULLED and SET ASIDE. The Secretary of the
Department of Interior and Local Government is DIRECTED to RESOLVE with reasonable dispatch the appeal
and petition for review of petitioners SP03 NOEL CABADA and SP03 RODOLFO G. DE Guzman, respectively,
from the decision of 15 August 1994 and resolution of 25 October 1994 of the Regional Appellate Boar, Eight
Regional Command, if the same were filed on time.
No pronouncement as to costs.

THIRD DIVISION
G.R. No. 149422 April 10, 2003
DEPARTMENT OF AGRARIAN REFORM, petitioner
vs.
APEX INVESTMENT AND FINANCING CORPORATION (now SM Investment Corporation),
respondent.
SANDOVAL-GUTIERREZ, J.:
Before us is a petition for review on certiorari1 filed by the Department of Agrarian Reform (DAR) assailing the
Decision2 of the Court of Appeals dated April 26, 2001 in CA-G.R. SP No. 55052, "Apex Investment and
Financing Corporation vs. Department of Agrarian Reform, et al.;" and its Resolution dated August 2, 2001
denying petitioner's motion for reconsideration.
Respondent Apex Investment and Financing Corporation (now SM Investments Corporation), registered under the
laws of the Philippines, owns several lots located at Barangay Paliparan, Dasmariñas, Cavite, covered by Transfer
Certificates of Title (TCT) Nos. T-72491, T-90474, T-90475, T-90476, and T-90477.
On August 24, 1994, the Municipal Agrarian Reform Office (MARO) of Dasmariñas initiated compulsory
acquisition proceedings over those lots pursuant to Republic Act No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law of 1988. The MARO issued a Notice of Coverage informing respondent of
the compulsory acquisition and inviting it to a meeting set on September 8, 1994; and Notice of Acquisition.
Copies of these notices were sent to respondent's office at 627 Echague Street, Manila. However, respondent
denied having received the same because it was no longer holding office there.
Respondent learned of the compulsory acquisition proceedings from the December 11, 1997 issue of the Balita
stating, among others, that TCT No. T-90476, covering respondent's lot consisting of 23,614 square meters, has
been placed under the compulsory acquisition program. Forthwith, petitioner sent respondent a copy of the Notice
of Land Valuation and Acquisition dated July 24, 1997, offering to pay it P229,014.33 as compensation for the lot
covered by TCT No. T-90476.
On January 12, 1998, respondent filed with the PARO a Protest rejecting the offer of compensation and
contending that its lands are not covered by R.A. No. 6657 because they were classified as residential even prior to
the effectivity of the law. Attached to its protest are copies of its land titles, tax declarations, location map and
other supporting documents.
On March 27, 1998, respondent filed with the PARO a Supplemental Protest with (a) the Certification issued by
Engineer Baltazar M. Usis, Regional Irrigation Manager of the National Irrigation Administration, Region IV,
stating that respondent's lots are not covered by any irrigation project; and (b) the Certification issued by Engineer
Gregorio Bermejo, Municipal Engineer and Deputized Zoning Administrator of Dasmariñas, Cavite, attesting that
the same lots are within the residential zone based on the Land Use Plan of the Municipality of Dasmariñas duly
54 | AEP
approved by the Housing and Land Use Regulatory Board (HLURB) in its Resolution No. R-42-A-3 dated
February 11, 1981.
It was only on February 15, 1999, or more than one year after respondent filed its protest, that the PARO
forwarded to petitioner DAR the said protest together with the records of the compulsory acquisition proceedings.
On June 21, 1999, respondent received a letter dated May 28, 1999 from petitioner requiring it to submit certified
true copies of the TCTs covering its lots and a Certification from the HLURB attesting that they are within the
residential zone of Dasmariñas based on HLURB Resolution No. R-42-A-3 dated February 11, 1981.
Thereafter, respondent learned that on June 24, 1999, the Registry of Deeds of Cavite cancelled one of its titles,
TCT No. T-90476, and in lieu thereof, issued TCT No. T-868471 in the name of the Republic of the Philippines.
On July 26, 1999, respondent came to know that TCT No. T-868471 was cancelled and in lieu thereof, TCT No.
CLOA-2473 was issued in the name of Angel M. Umali, a farmer-beneficiary allegedly occupying the land. This
prompted respondent to file with the Court of Appeals a petition for certiorari and prohibition praying that the
compulsory acquisition proceedings over its landholdings be declared void and that TCT No. CLOA-2473 issued
to Angel Umali be cancelled.
In its comment, petitioner alleged that respondent failed to exhaust all administrative remedies before filing its
petition. Hence, the same should be dismissed.
On April 26, 2001, the Court of Appeals rendered its Decision, the dispositive portion of which reads:
"WHEREFORE, the petition for certiorari is hereby granted and judgment is hereby rendered as follows:
a) declaring the compulsory acquisition under Republic Act No. 6657 as null and void ab
initio;
b) prohibiting public respondents PARO and DAR from continuing with the compulsory
acquisition proceedings over TCT No. T-72491; TCT No. T-90474; TCT No. T-90475; and
TCT No. T-90477;
compulsory acquisition proceedings over TCT No. T-72491; TCT No. T-90474; TCT No. T-
90475; and TCT No. T-90477;
c) prohibiting public respondent Register of Deeds of Cavite from cancelling the land titles of
petitioner, i.e., TCT No. T-72491; TCT No. T-90474; TCT No. T-90475; and TCT No. T-
90477 and the transferring, conveying and alienation thereof; and
d) ordering the Register of Deeds of Cavite to restore TCT No. T-90476 (now CLOA 2473) in
the name of petitioner.
"SO ORDERED."
Petitioner filed a motion for reconsideration but was denied in the Resolution dated August 2, 2001.
Hence, the instant petition for review on certiorari.
Petitioner ascribes to the Court of Appeals the following errors: (a) in ruling that respondent corporation did not
violate the principle of exhaustion of remedies; (b) in holding that respondent was deprived of its right to due
process; and (c) in concluding that the subject parcels of land are residential, hence, not covered by R.A. No.
6657.
On the first assigned error, this Court has consistently held that the doctrine of exhaustion of administrative
remedies is a relative one and is flexible depending on the peculiarity and uniqueness of the factual and
circumstantial settings of a case.3 Among others, it is disregarded where, as in this case, (a) there are
circumstances indicating the urgency of judicial intervention;4 and (b) the administrative action is patently illegal
and amounts to lack or excess of jurisdiction.5
Records show that the PARO did not take immediate action on respondent's Protest filed on January 12, 1998. It
was only on February 15, 1999, or after more than one year, that it forwarded the same to petitioner DAR. Since
then, what petitioner has done was to require respondent every now and then to submit copies of supporting
documents which were already attached to its Protest. In the meantime, respondent found that the PARO had
caused the cancellation of its title and that a new one was issued to an alleged farmer-beneficiary.
In Natalia Realty vs. Department of Agrarian Reform,6 we held that the aggrieved landowners were not supposed
to wait until the DAR acted on their letter-protests (after it had sat on them for almost a year) before resorting to
judicial process. Given the official indifference which, under the circumstances could have continued forever, the
landowners had to act to assert and protect their interests. Thus, their petition for certiorari was allowed even
though the DAR had not yet resolved their protests. In the same vein, respondent here could not be expected to
wait for petitioner DAR to resolve its protest before seeking judicial intervention. Obviously, petitioner might
continue to alienate respondent's lots during the pendency of its protest. Hence, the Court of Appeals did not err in
concluding that on the basis of the circumstances of this case, respondent need not exhaust all administrative
remedies before filing its petition for certiorari and prohibition.
As to the second assigned error, we find that petitioner was deprived of its constitutional right to due process.
Section 16 of R.A. No. 6657, provides:
"Section 16. Procedures for Acquisition of Private Lands. – For purposes of acquisition of private lands,
the following procedures shall be followed:
"(a) After having identified the land, the landowners and the beneficiaries, the DAR shall send its notice
to acquire the land to the owners thereof, by personal delivery or registered mail, and post the same in a
conspicuous place in the municipal building and barangay hall of the place where the property is
located. Said notice shall contain the offer of the DAR to pay a corresponding value in accordance with
the valuation set forth in Sections 17, 18, and other pertinent provisions hereof.
"x x x"
In Roxas & Co., Inc. vs. Court of Appeals,7 we held:
55 | AEP
"For a valid implementation of the CAR program, two notices are required: (1) the Notice of Coverage
and letter of invitation to preliminary conference sent to the landowner, the representatives of the
BARC, LBP, farmer beneficiaries and other interested parties pursuant to DAR A.O. No. 12, Series of
1989; and (2) the Notice of Acquisition sent to the landowner under Section 16 of R.A. No. 6657.
"The importance of the first notice, i.e., the Notice of Coverage and the letter of invitation to the
conference, and its actual conduct cannot be understated. They are steps designed to comply with the
requirements of administrative due process. The implementation of the CARL is an exercise of the
State's police power and the power of eminent domain. To the extent that the CARL prescribes retention
limits to the landowners, there is an exercise of police power for the regulation of private property in
accordance with the Constitution (Association of Small Landowners in the Philippines vs. Secretary of
Agrarian Reform, 175 SCRA 343, 373-374 [1989]). But where, to carry out such regulation, the owners
are deprived of lands they own in excess of the maximum area allowed there is also a taking under the
power of eminent domain. The taking contemplated is not a mere limitation of the use of the land. What
is required is the surrender of the title to and physical possession of the said excess and all beneficial
rights accruing to the owner in favor of the farmer beneficiary (id.). The Bill of Rights provides that
"[n]o person shall be deprived of life, liberty or property without de process of law" (Section 1, Article
III of the 1987 Constitution). The CARL was not intended to take away property without due process of
law (Development Bank of the Philippines vs. Court of Appeals, 262 SCRA 245, 253 [1996]). The
exercise of the power of eminent domain requires that due process be observed in the taking of private
property."
In the instant case, petitioner does not dispute that respondent did not receive the Notice of Acquisition and Notice
of Coverage sent to the latter's old address. Petitioner explained that its personnel could not effect personal service
of those notices upon respondent because it changed its juridical name from Apex Investment and Financing
Corporation to SM Investment Corporation. While it is true, that personal service could not be made, however,
there is no showing that petitioner caused the service of the notices via registered mail as required by Section
16(a) of R.A. No. 6657. On this point, petitioner claimed that the notices were sent "not only by registered mail
but also by personal delivery" and that there was actual receipt by respondent as shown by the signature appearing
at the bottom left-hand corner of petitioner's copies of the notices. But petitioner could not identify the name of
respondent's representative who allegedly received the notices. In fact, petitioner admitted that the signature
thereon is illegible. It is thus safe to conclude that respondent was not notified of the compulsory acquisition
proceedings. Clearly, respondent was deprived of its right to procedural due process. It is elementary that before a
person can be deprived of his property, he should be informed of the claim against him and the theory on which
such claim is premised.8
On the last assigned error, Section 4 of R.A. No. 6657 provides that the Comprehensive Agrarian Reform Law
shall cover, regardless of tenurial arrangement and commodity produced, "all public and private agricultural
lands." Section 3(c) defines "agricultural land," as "land devoted to agricultural activity as defined in this Act and
not classified as mineral, forest, residential, commercial or industrial land."
Respondent vehemently insists that its lots had been classified as residential prior to June 15, 1988, the date of
effectivity of R.A. No. 6657. As earlier mentioned, Engineer Gregorio Bermejo, Municipal Engineer and
Deputized Zoning Administrator of Dasmariñas, Cavite, certified that respondent's lands are within the residential
zone of Dasmariñas, based on the Land Use Plan of that municipality duly approved by the HLURB in its
Resolution No. R-42-A-3 dated February 11, 1981. We observe, however, that this factual issue was never
determined below. Thus, we cannot conclude that respondent's parcels of land are residential.
WHEREFORE, the challenged Decision dated April 26, 2001 of the Court of Appeals in CA-G.R. SP No. 55052
is AFFIRMED with MODIFICATION in the sense that we allow the DAR to conduct appropriate proceedings to
determine whether the subject parcels of land are indeed residential and are thus outside the coverage of R.A. No.
6657.

SO ORDERED.

56 | AEP

EN BANC
G.R. No. 159139 January 13, 2004
INFORMATION TECHNOLOGY FOUNDATION OF THE PHILIPPINES, MA. CORAZON M. AKOL,
MIGUEL UY, EDUARDO H. LOPEZ, AUGUSTO C. LAGMAN, REX C. DRILON, MIGUEL HILADO,
LEY SALCEDO, and MANUEL ALCUAZ JR., petitioners,
vs.
COMMISSION ON ELECTIONS; COMELEC CHAIRMAN BENJAMIN ABALOS SR.; COMELEC
BIDDING and AWARD COMMITTEE CHAIRMAN EDUARDO D. MEJOS and MEMBERS GIDEON
DE GUZMAN, JOSE F. BALBUENA, LAMBERTO P. LLAMAS, and BARTOLOME SINOCRUZ JR.;
MEGA PACIFIC eSOLUTIONS, INC.; and MEGA PACIFIC CONSORTIUM, respondents.
DECISION
PANGANIBAN, J.:
There is grave abuse of discretion (1) when an act is done contrary to the Constitution, the law or jurisprudence;1
or (2) when it is executed whimsically, capriciously or arbitrarily out of malice, ill will or personal bias.2 In the
present case, the Commission on Elections approved the assailed Resolution and awarded the subject Contract not
only in clear violation of law and jurisprudence, but also in reckless disregard of its own bidding rules and
procedure. For the automation of the counting and canvassing of the ballots in the 2004 elections, Comelec
awarded the Contract to "Mega Pacific Consortium" an entity that had not participated in the bidding. Despite this
grant, the poll body signed the actual automation Contract with "Mega Pacific eSolutions, Inc.," a company that
joined the bidding but had not met the eligibility requirements.
Comelec awarded this billion-peso undertaking with inexplicable haste, without adequately checking and
observing mandatory financial, technical and legal requirements. It also accepted the proferred computer hardware
and software even if, at the time of the award, they had undeniably failed to pass eight critical requirements
designed to safeguard the integrity of elections, especially the following three items:
· They failed to achieve the accuracy rating criteria of 99.9995 percent set-up by the Comelec itself
· They were not able to detect previously downloaded results at various canvassing or consolidation
levels and to prevent these from being inputted again
· They were unable to print the statutorily required audit trails of the count/canvass at different levels
without any loss of data
Because of the foregoing violations of law and the glaring grave abuse of discretion committed by Comelec, the
Court has no choice but to exercise its solemn "constitutional duty"3 to void the assailed Resolution and the
subject Contract. The illegal, imprudent and hasty actions of the Commission have not only desecrated legal and
jurisprudential norms, but have also cast serious doubts upon the poll body’s ability and capacity to conduct
57 | AEP
automated elections. Truly, the pith and soul of democracy -- credible, orderly, and peaceful elections -- has been
put in jeopardy by the illegal and gravely abusive acts of Comelec.
The Case
Before us is a Petition4 under Rule 65 of the Rules of Court, seeking (1) to declare null and void Resolution No.
6074 of the Commission on Elections (Comelec), which awarded "Phase II of the Modernization Project of the
Commission to Mega Pacific Consortium (MPC);" (2) to enjoin the implementation of any further contract that
may have been entered into by Comelec "either with Mega Pacific Consortium and/or Mega Pacific eSolutions,
Inc. (MPEI);" and (3) to compel Comelec to conduct a re-bidding of the project.
The Facts
The following facts are not disputed. They were culled from official documents, the parties’ pleadings, as well as
from admissions during the Oral Argument on October 7, 2003.
On June 7, 1995, Congress passed Republic Act 8046,5 which authorized Comelec to conduct a nationwide
demonstration of a computerized election system and allowed the poll body to pilot-test the system in the March
1996 elections in the Autonomous Region in Muslim Mindanao (ARMM).
On December 22, 1997, Congress enacted Republic Act 84366 authorizing Comelec to use an automated election
system (AES) for the process of voting, counting votes and canvassing/consolidating the results of the national
and local elections. It also mandated the poll body to acquire automated counting machines (ACMs), computer
equipment, devices and materials; and to adopt new electoral forms and printing materials.
Initially intending to implement the automation during the May 11, 1998 presidential elections, Comelec -- in its
Resolution No. 2985 dated February 9, 19987 -- eventually decided against full national implementation and
limited the automation to the Autonomous Region in Muslim Mindanao (ARMM). However, due to the failure of
the machines to read correctly some automated ballots in one town, the poll body later ordered their manual count
for the entire Province of Sulu.8
In the May 2001 elections, the counting and canvassing of votes for both national and local positions were also
done manually, as no additional ACMs had been acquired for that electoral exercise allegedly because of time
constraints.
On October 29, 2002, Comelec adopted in its Resolution 02-0170 a modernization program for the 2004 elections.
It resolved to conduct biddings for the three (3) phases of its Automated Election System; namely, Phase I - Voter
Registration and Validation System; Phase II - Automated Counting and Canvassing System; and Phase III -
Electronic Transmission.
On January 24, 2003, President Gloria Macapagal-Arroyo issued Executive Order No. 172, which allocated the
sum of P2.5 billion to fund the AES for the May 10, 2004 elections. Upon the request of Comelec, she authorized
the release of an additional P500 million.
On January 28, 2003, the Commission issued an "Invitation to Apply for Eligibility and to Bid," which we quote
as follows:
 "INVITATION TO APPLY FOR ELIGIBILITY AND TO BID
The Commission on Elections (COMELEC), pursuant to the mandate of Republic Act Nos. 8189 and
8436, invites interested offerors, vendors, suppliers or lessors to apply for eligibility and to bid for the
procurement by purchase, lease, lease with option to purchase, or otherwise, supplies, equipment,
materials and services needed for a comprehensive Automated Election System, consisting of three (3)
phases: (a) registration/verification of voters, (b) automated counting and consolidation of votes, and (c)
electronic transmission of election results, with an approved budget of TWO BILLION FIVE
HUNDRED MILLION (Php2,500,000,000) Pesos.
Only bids from the following entities shall be entertained:
a. Duly licensed Filipino citizens/proprietorships;
b. Partnerships duly organized under the laws of the Philippines and of which at least sixty
percent (60%) of the interest belongs to citizens of the Philippines;
c. Corporations duly organized under the laws of the Philippines, and of which at least sixty
percent (60%) of the outstanding capital stock belongs to citizens of the Philippines;
d. Manufacturers, suppliers and/or distributors forming themselves into a joint venture, i.e., a
group of two (2) or more manufacturers, suppliers and/or distributors that intend to be jointly
and severally responsible or liable for a particular contract, provided that Filipino ownership
thereof shall be at least sixty percent (60%); and
e. Cooperatives duly registered with the Cooperatives Development Authority.
Bid documents for the three (3) phases may be obtained starting 10 February 2003, during office hours
from the Bids and Awards Committee (BAC) Secretariat/Office of Commissioner Resurreccion Z.
Borra, 7th Floor, Palacio del Governador, Intramuros, Manila, upon payment at the Cash Division,
Commission on Elections, in cash or cashier’s check, payable to the Commission on Elections, of a non-
refundable amount of FIFTEEN THOUSAND PESOS (Php15,000.00) for each phase. For this purpose,
interested offerors, vendors, suppliers or lessors have the option to participate in any or all of the three
(3) phases of the comprehensive Automated Election System.
A Pre-Bid Conference is scheduled on 13 February 2003, at 9:00 a.m. at the Session Hall, Commission
on Elections, Postigo Street, Intramuros, Manila. Should there be questions on the bid documents,
bidders are required to submit their queries in writing to the BAC Secretariat prior to the scheduled Pre-
Bid Conference.
statements, the COMELEC shall disqualify the bidder upon due notice without any obligation
whatsoever for any expenses or losses that may be incurred by it in the preparation of its bid."9
On February 11, 2003, Comelec issued Resolution No. 5929 clarifying certain eligibility criteria for bidders and
the schedule of activities for the project bidding, as follows:
"1.) Open to Filipino and foreign corporation duly registered and licensed to do business and is actually
doing business in the Philippines, subject to Sec. 43 of RA 9184 (An Act providing In the
Modernization Standardization and Regulation of the Procurement Activities of the Government and for
other purposes etc.)
2.) Track Record:
a) For counting machines – should have been used in at least one (1) political exercise with no
less than Twenty Million Voters;
b) For verification of voters – the reference site of an existing data base installation using
Automated Fingerprint Identification System (AFIS) with at least Twenty Million.
3.) Ten percent (10%) equity requirement shall be based on the total project cost; and
4.) Performance bond shall be twenty percent (20%) of the bid offer.
RESOLVED moreover, that:
1) A. Due to the decision that the eligibility requirements and the rest of the Bid documents
shall be released at the same time, and the memorandum of Comm. Resurreccion Z. Borra
dated February 7, 2003, the documents to be released on Friday, February 14, 2003 at 2:00
o’clock p.m. shall be the eligibility criteria, Terms of Reference (TOR) and other pertinent
documents;
B. Pre-Bid conference shall be on February 18, 2003; and
C. Deadline for the submission and receipt of the Bids shall be on March 5, 2003.
2) The aforementioned documents will be available at the following offices:
a) Voters Validation: Office of Comm. Javier

Deadline for submission to the BAC of applications for eligibility and bid envelopes for the supply of b) Automated Counting Machines: Office of Comm. Borra
the comprehensive Automated Election System shall be at the Session Hall, Commission on Elections,
Postigo Street, Intramuros, Manila on 28 February 2003 at 9:00 a.m.
c) Electronic Transmission: Office of Comm. Tancangco"10
The COMELEC reserves the right to review the qualifications of the bidders after the bidding and before
the contract is executed. Should such review uncover any misrepresentation made in the eligibility
statements, or any changes in the situation of the bidder to materially downgrade the substance of such
58 | AEP
On February 17, 2003, the poll body released the Request for Proposal (RFP) to procure the election automation
machines. The Bids and Awards Committee (BAC) of Comelec convened a pre-bid conference on February 18,
2003 and gave prospective bidders until March 10, 2003 to submit their respective bids.
Among others, the RFP provided that bids from manufacturers, suppliers and/or distributors forming themselves
into a joint venture may be entertained, provided that the Philippine ownership thereof shall be at least 60 percent.
Joint venture is defined in the RFP as "a group of two or more manufacturers, suppliers and/or distributors that
intend to be jointly and severally responsible or liable for a particular contract."11
Basically, the public bidding was to be conducted under a two-envelope/two stage system. The bidder’s first
envelope or the Eligibility Envelope should establish the bidder’s eligibility to bid and its qualifications to perform
the acts if accepted. On the other hand, the second envelope would be the Bid Envelope itself. The RFP outlines
the bidding procedures as follows:
"25. Determination of Eligibility of Prospective Bidders
"25.1 The eligibility envelopes of prospective Bidders shall be opened first to determine their
eligibility. In case any of the requirements specified in Clause 20 is missing from the first bid
envelope, the BAC shall declare said prospective Bidder as ineligible to bid. Bid envelopes of
ineligible Bidders shall be immediately returned unopened.
"25.2 The eligibility of prospective Bidders shall be determined using simple ‘pass/fail’
criteria and shall be determined as either eligible or ineligible. If the prospective Bidder is
rated ‘passed’ for all the legal, technical and financial requirements, he shall be considered
eligible. If the prospective Bidder is rated ‘failed’ in any of the requirements, he shall be
considered ineligible.
"26. Bid Examination/Evaluation
"26.1 The BAC will examine the Bids to determine whether they are complete, whether any
computational errors have been made, whether required securities have been furnished,
whether the documents have been properly signed, and whether the Bids are generally in
order.
"26.2 The BAC shall check the submitted documents of each Bidder against the required
documents enumerated under Clause 20, to ascertain if they are all present in the Second bid
envelope (Technical Envelope). In case one (1) or more of the required documents is missing,
the BAC shall rate the Bid concerned as ‘failed’ and immediately return to the Bidder its Third
bid envelope (Financial Envelope) unopened. Otherwise, the BAC shall rate the first bid
envelope as ‘passed’.
"26.3 The BAC shall immediately open the Financial Envelopes of the Bidders whose
Technical Envelopes were passed or rated on or above the passing score. Only Bids that are
determined to contain all the bid requirements for both components shall be rated ‘passed’ and
shall immediately be considered for evaluation and comparison.
59 | AEP
"26.4 In the opening and examination of the Financial Envelope, the BAC shall announce and
tabulate the Total Bid Price as calculated. Arithmetical errors will be rectified on the following
basis: If there is a discrepancy between words and figures, the amount in words will prevail. If
there is a discrepancy between the unit price and the total price that is obtained by multiplying
the unit price and the quantity, the unit price shall prevail and the total price shall be corrected
accordingly. If there is a discrepancy between the Total Bid Price and the sum of the total
prices, the sum of the total prices prevail and the Total Bid Price shall be corrected
accordingly.
"26.5 Financial Proposals which do not clearly state the Total Bid Price shall be rejected.
Also, Total Bid Price as calculated that exceeds the approved budget for the contract shall also
be rejected.
27. Comparison of Bids
27.1 The bid price shall be deemed to embrace all costs, charges and fees associated with
carrying out all the elements of the proposed Contract, including but not limited to, license
fees, freight charges and taxes.
27.2 The BAC shall establish the calculated prices of all Bids rated ‘passed’ and rank the same
in ascending order.
xxxxxxxxx
"29. Postqualification
"29.1 The BAC will determine to its satisfaction whether the Bidder selected as having
submitted the lowest calculated bid is qualified to satisfactorily perform the Contract.
"29.2 The determination will take into account the Bidder’s financial, technical and production
capabilities/resources. It will be based upon an examination of the documentary evidence of
the Bidder’s qualification submitted by the Bidder as well as such other information as the
BAC deems necessary and appropriate.
"29.3 A bid determined as not substantially responsive will be rejected by the BAC and may
not subsequently be made responsive by the Bidder by correction of the non-conformity.
"29.4 The BAC may waive any informality or non-conformity or irregularity in a bid which
does not constitute a material deviation, provided such waiver does not prejudice or affect the
relative ranking of any Bidder.
"29.5 Should the BAC find that the Bidder complies with the legal, financial and technical
requirements, it shall make an affirmative determination which shall be a prerequisite for
award of the Contract to the Bidder. Otherwise, it will make a negative determination which
will result in rejection of the Bidder’s bid, in which event the BAC will proceed to the next
lowest calculated bid to make a similar determination of that Bidder’s capabilities to perform
satisfactorily."12
Out of the 57 bidders,13 the BAC found MPC and the Total Information Management Corporation (TIMC)
eligible. For technical evaluation, they were referred to the BAC’s Technical Working Group (TWG) and the
Department of Science and Technology (DOST).
In its Report on the Evaluation of the Technical Proposals on Phase II, DOST said that both MPC and TIMC had
obtained a number of failed marks in the technical evaluation. Notwithstanding these failures, Comelec en banc,
on April 15, 2003, promulgated Resolution No. 6074 awarding the project to MPC. The Commission publicized
this Resolution and the award of the project to MPC on May 16, 2003.
On May 29, 2003, five individuals and entities (including the herein Petitioners Information Technology
Foundation of the Philippines, represented by its president, Alfredo M. Torres; and Ma. Corazon Akol) wrote a
letter14 to Comelec Chairman Benjamin Abalos Sr. They protested the award of the Contract to Respondent MPC
"due to glaring irregularities in the manner in which the bidding process had been conducted." Citing therein the
noncompliance with eligibility as well as technical and procedural requirements (many of which have been
discussed at length in the Petition), they sought a re-bidding.
In a letter-reply dated June 6, 2003,15 the Comelec chairman -- speaking through Atty. Jaime Paz, his head
executive assistant -- rejected the protest and declared that the award "would stand up to the strictest scrutiny."
Hence, the present Petition.16
The Issues
In their Memorandum, petitioners raise the following issues for our consideration:
"1. The COMELEC awarded and contracted with a non-eligible entity; x x x
"2. Private respondents failed to pass the Technical Test as required in the RFP. Notwithstanding, such
failure was ignored. In effect, the COMELEC changed the rules after the bidding in effect changing the
nature of the contract bidded upon.
"3. Petitioners have locus standi.
"4. Instant Petition is not premature. Direct resort to the Supreme Court is justified."17
In the main, the substantive issue is whether the Commission on Elections, the agency vested with the exclusive
constitutional mandate to oversee elections, gravely abused its discretion when, in the exercise of its
administrative functions, it awarded to MPC the contract for the second phase of the comprehensive Automated
Election System.
Before discussing the validity of the award to MPC, however, we deem it proper to first pass upon the procedural
issues: the legal standing of petitioners and the alleged prematurity of the Petition.
This Court’s Ruling
The Petition is meritorious.
60 | AEP
First Procedural Issue:
Locus Standi of Petitioners
Respondents chorus that petitioners do not possess locus standi, inasmuch as they are not challenging the validity
or constitutionality of RA 8436. Moreover, petitioners supposedly admitted during the Oral Argument that no law
had been violated by the award of the Contract. Furthermore, they allegedly have no actual and material interest in
the Contract and, hence, do not stand to be injured or prejudiced on account of the award.
On the other hand, petitioners -- suing in their capacities as taxpayers, registered voters and concerned citizens --
respond that the issues central to this case are "of transcendental importance and of national interest." Allegedly,
Comelec’s flawed bidding and questionable award of the Contract to an unqualified entity would impact directly
on the success or the failure of the electoral process. Thus, any taint on the sanctity of the ballot as the expression
of the will of the people would inevitably affect their faith in the democratic system of government. Petitioners
further argue that the award of any contract for automation involves disbursement of public funds in gargantuan
amounts; therefore, public interest requires that the laws governing the transaction must be followed strictly.
We agree with petitioners. Our nation’s political and economic future virtually hangs in the balance, pending the
outcome of the 2004 elections. Hence, there can be no serious doubt that the subject matter of this case is "a matter
of public concern and imbued with public interest";18 in other words, it is of "paramount public interest"19 and
"transcendental importance."20 This fact alone would justify relaxing the rule on legal standing, following the
liberal policy of this Court whenever a case involves "an issue of overarching significance to our society."21
Petitioners’ legal standing should therefore be recognized and upheld.
Moreover, this Court has held that taxpayers are allowed to sue when there is a claim of "illegal disbursement of
public funds,"22 or if public money is being "deflected to any improper purpose";23 or when petitioners seek to
restrain respondent from "wasting public funds through the enforcement of an invalid or unconstitutional law."24
In the instant case, individual petitioners, suing as taxpayers, assert a material interest in seeing to it that public
funds are properly and lawfully used. In the Petition, they claim that the bidding was defective, the winning bidder
not a qualified entity, and the award of the Contract contrary to law and regulation. Accordingly, they seek to
restrain respondents from implementing the Contract and, necessarily, from making any unwarranted expenditure
of public funds pursuant thereto. Thus, we hold that petitioners possess locus standi.
Second Procedural Issue:
Alleged Prematurity Due to Non-Exhaustion of Administrative Remedies
Respondents claim that petitioners acted prematurely, since they had not first utilized the protest mechanism
available to them under RA 9184, the Government Procurement Reform Act, for the settlement of disputes
pertaining to procurement contracts.
Section 55 of RA 9184 states that protests against decisions of the Bidding and Awards Committee in all stages of
procurement may be lodged with the head of the procuring entity by filing a verified position paper and paying a
protest fee. Section 57 of the same law mandates that in no case shall any such protest stay or delay the bidding
process, but it must first be resolved before any award is made.
On the other hand, Section 58 provides that court action may be resorted to only after the protests contemplated by
the statute shall have been completed. Cases filed in violation of this process are to be dismissed for lack of
jurisdiction. Regional trial courts shall have jurisdiction over final decisions of the head of the procuring entity,
and court actions shall be instituted pursuant to Rule 65 of the 1997 Rules of Civil Procedure.
Respondents assert that throughout the bidding process, petitioners never questioned the BAC Report finding
MPC eligible to bid and recommending the award of the Contract to it (MPC). According to respondents, the
Report should have been appealed to the Comelc en banc, pursuant to the aforementioned sections of RA 9184. In
the absence of such appeal, the determination and recommendation of the BAC had become final.
The Court is not persuaded.
Respondent Comelec came out with its en banc Resolution No. 6074 dated April 15, 2003, awarding the project to
Respondent MPC even before the BAC managed to issue its written report and recommendation on April 21,
2003. Thus, how could petitioners have appealed the BAC’s recommendation or report to the head of the
procuring entity (the chairman of Comelec), when the Comelec en banc had already approved the award of the
contract to MPC even before petitioners learned of the BAC recommendation?
It is claimed25 by Comelec that during its April 15, 2003 session, it received and approved the verbal report and
recommendation of the BAC for the award of the Contract to MPC, and that the BAC subsequently re-affirmed its
verbal report and recommendation by submitting it in writing on April 21, 2003. Respondents insist that the law
does not require that the BAC Report be in writing before Comelec can act thereon; therefore, there is allegedly
nothing irregular about the Report as well as the en banc Resolution.
However, it is obvious that petitioners could have appealed the BAC’s report and recommendation to the head of
the procuring entity (the Comelec chair) only upon their discovery thereof, which at the very earliest would have
been on April 21, 2003, when the BAC actually put its report in writing and finally released it. Even then, what
would have been the use of protesting/appealing the report to the Comelec chair, when by that time the
Commission en banc (including the chairman himself) had already approved the BAC Report and awarded the
Contract to MPC?
And even assuming arguendo that petitioners had somehow gotten wind of the verbal BAC report on April 15,
2003 (immediately after the en banc session), at that point the Commission en banc had already given its approval
to the BAC Report along with the award to MPC. To put it bluntly, the Comelec en banc itself made it legally
impossible for petitioners to avail themselves of the administrative remedy that the Commission is so impiously
harping on. There is no doubt that they had not been accorded the opportunity to avail themselves of the process
provided under Section 55 of RA 9184, according to which a protest against a decision of the BAC may be filed
with the head of the procuring entity. Nemo tenetur ad impossible,26 to borrow private respondents’ favorite Latin
excuse.27
Some Observations on the BAC Report to the Comelec
We shall return to this issue of alleged prematurity shortly, but at this interstice, we would just want to put forward
a few observations regarding the BAC Report and the Comelec en banc’s approval thereof.
First, Comelec contends that there was nothing unusual about the fact that the Report submitted by the BAC came
only after the former had already awarded the Contract, because the latter had been asked to render its report and
recommendation orally during the Commission’s en banc session on April 15, 2003. Accordingly, Comelec
61 | AEP
supposedly acted upon such oral recommendation and approved the award to MPC on the same day, following
which the recommendation was subsequently reduced into writing on April 21, 2003. While not entirely outside
the realm of the possible, this interesting and unique spiel does not speak well of the process that Comelec
supposedly went through in making a critical decision with respect to a multi-billion-peso contract.
We can imagine that anyone else standing in the shoes of the Honorable Commissioners would have been
extremely conscious of the overarching need for utter transparency. They would have scrupulously avoided the
slightest hint of impropriety, preferring to maintain an exacting regularity in the performance of their duties,
instead of trying to break a speed record in the award of multi-billion-peso contracts. After all, between April 15
and April 21 were a mere six (6) days. Could Comelec not have waited out six more days for the written report of
the BAC, instead of rushing pell-mell into the arms of MPC? Certainly, respondents never cared to explain the
nature of the Commission’s dire need to act immediately without awaiting the formal, written BAC Report.
In short, the Court finds it difficult to reconcile the uncommon dispatch with which Comelec acted to approve the
multi-billion-peso deal, with its claim of having been impelled by only the purest and most noble of motives.
At any rate, as will be discussed later on, several other factors combine to lend negative credence to Comelec’s
tale.
Second, without necessarily ascribing any premature malice or premeditation on the part of the Comelec officials
involved, it should nevertheless be conceded that this cart-before-the-horse maneuver (awarding of the Contract
ahead of the BAC’s written report) would definitely serve as a clever and effective way of averting and frustrating
any impending protest under Section 55.
Having made the foregoing observations, we now go back to the question of exhausting administrative remedies.
Respondents may not have realized it, but the letter addressed to Chairman Benjamin Abalos Sr. dated May 29,
200328 serves to eliminate the prematurity issue as it was an actual written protest against the decision of the poll
body to award the Contract. The letter was signed by/for, inter alia, two of herein petitioners: the Information
Technology Foundation of the Philippines, represented by its president, Alfredo M. Torres; and Ma. Corazon
Akol.
Such letter-protest is sufficient compliance with the requirement to exhaust administrative remedies particularly
because it hews closely to the procedure outlined in Section 55 of RA 9184.
And even without that May 29, 2003 letter-protest, the Court still holds that petitioners need not exhaust
administrative remedies in the light of Paat v. Court of Appeals.29 Paat enumerates the instances when the rule on
exhaustion of administrative remedies may be disregarded, as follows:
"(1) when there is a violation of due process,
(2) when the issue involved is purely a legal question,
(3) when the administrative action is patently illegal amounting to lack or excess of jurisdiction,
(4) when there is estoppel on the part of the administrative agency concerned,
(5) when there is irreparable injury,
 (6) when the respondent is a department secretary whose acts as an alter ego of the President bears the
implied and assumed approval of the latter,
(7) when to require exhaustion of administrative remedies would be unreasonable,
(8) when it would amount to a nullification of a claim,
(9) when the subject matter is a private land in land case proceedings,
(10) when the rule does not provide a plain, speedy and adequate remedy, and
(11) when there are circumstances indicating the urgency of judicial intervention."30
The present controversy precisely falls within the exceptions listed as Nos. 7, 10 and 11: "(7) when to require
exhaustion of administrative remedies would be unreasonable; (10) when the rule does not provide a plain, speedy
and adequate remedy, and (11) when there are circumstances indicating the urgency of judicial intervention." As
already stated, Comelec itself made the exhaustion of administrative remedies legally impossible or, at the very
least, "unreasonable."
In any event, the peculiar circumstances surrounding the unconventional rendition of the BAC Report and the
precipitate awarding of the Contract by the Comelec en banc -- plus the fact that it was racing to have its Contract
with MPC implemented in time for the elections in May 2004 (barely four months away) -- have combined to
bring about the urgent need for judicial intervention, thus prompting this Court to dispense with the procedural
exhaustion of administrative remedies in this case.
Main Substantive Issue:
Validity of the Award to MPC
We come now to the meat of the controversy. Petitioners contend that the award is invalid, since Comelec gravely
abused its discretion when it did the following:
1. Awarded the Contract to MPC though it did not even participate in the bidding
2. Allowed MPEI to participate in the bidding despite its failure to meet the mandatory eligibility
requirements
3. Issued its Resolution of April 15, 2003 awarding the Contract to MPC despite the issuance by the
BAC of its Report, which formed the basis of the assailed Resolution, only on April 21, 200331
4. Awarded the Contract, notwithstanding the fact that during the bidding process, there were violations
of the mandatory requirements of RA 8436 as well as those set forth in Comelec’s own Request for
Proposal on the automated election system
5. Refused to declare a failed bidding and to conduct a re-bidding despite the failure of the bidders to
pass the technical tests conducted by the Department of Science and Technology
62 | AEP
6. Failed to follow strictly the provisions of RA 8436 in the conduct of the bidding for the automated
counting machines
After reviewing the slew of pleadings as well as the matters raised during the Oral Argument, the Court deems it
sufficient to focus discussion on the following major areas of concern that impinge on the issue of grave abuse of
discretion:
A. Matters pertaining to the identity, existence and eligibility of MPC as a bidder
B. Failure of the automated counting machines (ACMs) to pass the DOST technical tests
C. Remedial measures and re-testings undertaken by Comelec and DOST after the award, and their
effect on the present controversy
A.
Failure to Establish the Identity, Existence and Eligibility of the Alleged Consortium as a Bidder
On the question of the identity and the existence of the real bidder, respondents insist that, contrary to petitioners’
allegations, the bidder was not Mega Pacific eSolutions, Inc. (MPEI), which was incorporated only on February
27, 2003, or 11 days prior to the bidding itself. Rather, the bidder was Mega Pacific Consortium (MPC), of which
MPEI was but a part. As proof thereof, they point to the March 7, 2003 letter of intent to bid, signed by the
president of MPEI allegedly for and on behalf of MPC. They also call attention to the official receipt issued to
MPC, acknowledging payment for the bidding documents, as proof that it was the "consortium" that participated
in the bidding process.
We do not agree. The March 7, 2003 letter, signed by only one signatory -- "Willy U. Yu, President, Mega Pacific
eSolutions, Inc., (Lead Company/ Proponent) For: Mega Pacific Consortium" -- and without any further proof,
does not by itself prove the existence of the consortium. It does not show that MPEI or its president have been
duly pre-authorized by the other members of the putative consortium to represent them, to bid on their collective
behalf and, more important, to commit them jointly and severally to the bid undertakings. The letter is purely self-
serving and uncorroborated.
Neither does an official receipt issued to MPC, acknowledging payment for the bidding documents, constitute
proof that it was the purported consortium that participated in the bidding. Such receipts are issued by cashiers
without any legally sufficient inquiry as to the real identity orexistence of the supposed payor.
To assure itself properly of the due existence (as well as eligibility and qualification) of the putative consortium,
Comelec’s BAC should have examined the bidding documents submitted on behalf of MPC. They would have
easily discovered the following fatal flaws.
Two-Envelope,
Two-Stage System
As stated earlier in our factual presentation, the public bidding system designed by Comelec under its RFP
(Request for Proposal for the Automation of the 2004 Election) mandated the use of a two-envelope, two-stage
system. A bidder’s first envelope (Eligibility Envelope) was meant to establish its eligibility to bid and its
qualifications and capacity to perform the contract if its bid was accepted, while the second envelope would be the
Bid Envelope itself.
The Eligibility Envelope was to contain legal documents such as articles of incorporation, business registrations,
licenses and permits, mayor’s permit, VAT certification, and so forth; technical documents containing
documentary evidence to establish the track record of the bidder and its technical and production capabilities to
perform the contract; and financial documents, including audited financial statements for the last three years, to
establish the bidder’s financial capacity.
In the case of a consortium or joint venture desirous of participating in the bidding, it goes without saying that the
Eligibility Envelope would necessarily have to include a copy of the joint venture agreement, the consortium
agreement or memorandum of agreement -- or a business plan or some other instrument of similar import --
establishing the due existence, composition and scope of such aggrupation. Otherwise, how would Comelec know
who it was dealing with, and whether these parties are qualified and capable of delivering the products and
services being offered for bidding?32
In the instant case, no such instrument was submitted to Comelec during the bidding process. This fact can be
conclusively ascertained by scrutinizing the two-inch thick "Eligibility Requirements" file submitted by Comelec
last October 9, 2003, in partial compliance with this Court’s instructions given during the Oral Argument. This file
purports to replicate the eligibility documents originally submitted to Comelec by MPEI allegedly on behalf of
MPC, in connection with the bidding conducted in March 2003. Included in the file are the incorporation papers
and financial statements of the members of the supposed consortium and certain certificates, licenses and permits
issued to them.
However, there is no sign whatsoever of any joint venture agreement, consortium agreement, memorandum of
agreement, or business plan executed among the members of the purported consortium.
The only logical conclusion is that no such agreement was ever submitted to the Comelec for its consideration, as
part of the bidding process.
It thus follows that, prior the award of the Contract, there was no documentary or other basis for Comelec to
conclude that a consortium had actually been formed amongst MPEI, SK C&C and WeSolv, along with
Election.com and ePLDT.33 Neither was there anything to indicate the exact relationships between and among
these firms; their diverse roles, undertakings and prestations, if any, relative to the prosecution of the project, the
extent of their respective investments (if any) in the supposed consortium or in the project; and the precise nature
and extent of their respective liabilities with respect to the contract being offered for bidding. And apart from the
self-serving letter of March 7, 2003, there was not even any indication that MPEI was the lead company duly
authorized to act on behalf of the others.
So, it necessarily follows that, during the bidding process, Comelec had no basis at all for determining that the
alleged consortium really existed and was eligible and qualified; and that the arrangements among the members
were satisfactory and sufficient to ensure delivery on the Contract and to protect the government’s interest.
Notwithstanding such deficiencies, Comelec still deemed the "consortium" eligible to participate in the bidding,
proceeded to open its Second Envelope, and eventually awarded the bid to it, even though -- per the Comelec’s
63 | AEP
own RFP -- the BAC should have declared the MPC ineligible to bid and returned the Second (Bid) Envelope
unopened.
Inasmuch as Comelec should not have considered MPEI et al. as comprising a consortium or joint venture, it
should not have allowed them to avail themselves of the provision in Section 5.4 (b) (i) of the IRR for RA 6957
(the Build-Operate-Transfer Law), as amended by RA 7718. This provision states in part that a joint
venture/consortium proponent shall be evaluated based on the individual or collective experience of the member-
firms of the joint venture or consortium and of the contractor(s) that it has engaged for the project. Parenthetically,
respondents have uniformly argued that the said IRR of RA 6957, as amended, have suppletory application to the
instant case.
Hence, had the proponent MPEI been evaluated based solely on its own experience, financial and operational track
record or lack thereof, it would surely not have qualified and would have been immediately considered ineligible
to bid, as respondents readily admit.
At any rate, it is clear that Comelec gravely abused its discretion in arbitrarily failing to observe its own rules,
policies and guidelines with respect to the bidding process, thereby negating a fair, honest and competitive
bidding.
Commissioners Not Aware of Consortium
In this regard, the Court is beguiled by the statements of Commissioner Florentino Tuason Jr., given in open court
during the Oral Argument last October 7, 2003. The good commissioner affirmed that he was aware, of his own
personal knowledge, that there had indeed been a written agreement among the "consortium" members,34 although
it was an internal matter among them,35 and of the fact that it would be presented by counsel for private
respondent.36
However, under questioning by Chief Justice Hilario G. Davide Jr. and Justice Jose C. Vitug, Commissioner
Tuason in effect admitted that, while he was the commissioner-in-charge of Comelec’s Legal Department, he had
never seen, even up to that late date, the agreement he spoke of.37 Under further questioning, he was likewise
unable to provide any information regarding the amounts invested into the project by several members of the
claimed consortium.38 A short while later, he admitted that the Commission had not taken a look at the agreement
(if any).39
He tried to justify his position by claiming that he was not a member of the BAC. Neither was he the
commissioner-in-charge of the Phase II Modernization project (the automated election system); but that, in any
case, the BAC and the Phase II Modernization Project Team did look into the aspect of the composition of the
consortium.
It seems to the Court, though, that even if the BAC or the Phase II Team had taken charge of evaluating the
eligibility, qualifications and credentials of the consortium-bidder, still, in all probability, the former would have
referred the task to Commissioner Tuason, head of Comelec’s Legal Department. That task was the appreciation
and evaluation of the legal effects and consequences of the terms, conditions, stipulations and covenants contained
in any joint venture agreement, consortium agreement or a similar document -- assuming of course that any of
these was available at the time. The fact that Commissioner Tuason was barely aware of the situation bespeaks the
complete absence of such document, or the utter failure or neglect of the Comelec to examine it -- assuming it was
available at all -- at the time the award was made on April 15, 2003.
In any event, the Court notes for the record that Commissioner Tuason basically contradicted his statements in
open court about there being one written agreement among all the consortium members, when he subsequently
referred40 to the four (4) Memoranda of Agreement (MOAs) executed by them.41
At this juncture, one might ask: What, then, if there are four MOAs instead of one or none at all? Isn’t it enough
that there are these corporations coming together to carry out the automation project? Isn’t it true, as respondent
aver, that nowhere in the RFP issued by Comelec is it required that the members of the joint venture execute a
single written agreement to prove the existence of a joint venture. Indeed, the intention to be jointly and severally
liable may be evidenced not only by a single joint venture agreement, but also by supplementary documents
executed by the parties signifying such intention. What then is the big deal?
The problem is not that there are four agreements instead of only one. The problem is that Comelec never bothered
to check. It never based its decision on documents or other proof that would concretely establish the existence of
the claimed consortium or joint venture or agglomeration. It relied merely on the self-serving representation in an
uncorroborated letter signed by only one individual, claiming that his company represented a "consortium" of
several different corporations. It concluded forthwith that a consortium indeed existed, composed of such and such
members, and thereafter declared that the entity was eligible to bid.
True, copies of financial statements and incorporation papers of the alleged "consortium" members were
submitted. But these papers did not establish the existence of a consortium, as they could have been provided by
the companies concerned for purposes other than to prove that they were part of a consortium or joint venture. For
instance, the papers may have been intended to show that those companies were each qualified to be a sub-
contractor (and nothing more) in a major project. Those documents did not by themselves support the assumption
that a consortium or joint venture existed among the companies.
In brief, despite the absence of competent proof as to the existence and eligibility of the alleged consortium
(MPC), its capacity to deliver on the Contract, and the members’ joint and several liability therefor, Comelec
nevertheless assumed that such consortium existed and was eligible. It then went ahead and considered the bid of
MPC, to which the Contract was eventually awarded, in gross violation of the former’s own bidding rules and
procedures contained in its RFP. Therein lies Comelec’s grave abuse of discretion.
Sufficiency of the Four Agreements
Instead of one multilateral agreement executed by, and effective and binding on, all the five "consortium
members" -- as earlier claimed by Commissioner Tuason in open court -- it turns out that what was actually
executed were four (4) separate and distinct bilateral Agreements.42 Obviously, Comelec was furnished copies of
these Agreements only after the bidding process had been terminated, as these were not included in the Eligibility
Documents. These Agreements are as follows:
· A Memorandum of Agreement between MPEI and SK C&C
· A Memorandum of Agreement between MPEI and WeSolv
· A "Teaming Agreement" between MPEI and Election.com Ltd.
· A "Teaming Agreement" between MPEI and ePLDT
64 | AEP
In sum, each of the four different and separate bilateral Agreements is valid and binding only between MPEI and
the other contracting party, leaving the other "consortium" members total strangers thereto. Under this setup,
MPEI dealt separately with each of the "members," and the latter (WeSolv, SK C&C, Election.com, and ePLDT)
in turn had nothing to do with one another, each dealing only with MPEI.
Respondents assert that these four Agreements were sufficient for the purpose of enabling the corporations to still
qualify (even at that late stage) as a consortium or joint venture, since the first two Agreements had allegedly set
forth the joint and several undertakings among the parties, whereas the latter two clarified the parties’ respective
roles with regard to the Project, with MPEI being the independent contractor and Election.com and ePLDT the
subcontractors.
Additionally, the use of the phrase "particular contract" in the Comelec’s Request for Proposal (RFP), in
connection with the joint and several liabilities of companies in a joint venture, is taken by them to mean that all
the members of the joint venture need not be solidarily liable for the entire project or joint venture, because it is
sufficient that the lead company and the member in charge of a particular contract or aspect of the joint venture
agree to be solidarily liable.
At this point, it must be stressed most vigorously that the submission of the four bilateral Agreements to Comelec
after the end of the bidding process did nothing to eliminate the grave abuse of discretion it had already committed
on April 15, 2003.
Deficiencies Have Not Been "Cured"
In any event, it is also claimed that the automation Contract awarded by Comelec incorporates all documents
executed by the "consortium" members, even if these documents are not referred to therein. The basis of this
assertion appears to be the passages from Section 1.4 of the Contract, which is reproduced as follows:
"All Contract Documents shall form part of the Contract even if they or any one of them is not referred
to or mentioned in the Contract as forming a part thereof. Each of the Contract Documents shall be
mutually complementary and explanatory of each other such that what is noted in one although not
shown in the other shall be considered contained in all, and what is required by any one shall be as
binding as if required by all, unless one item is a correction of the other.
"The intent of the Contract Documents is the proper, satisfactory and timely execution and completion
of the Project, in accordance with the Contract Documents. Consequently, all items necessary for the
proper and timely execution and completion of the Project shall be deemed included in the Contract."
Thus, it is argued that whatever perceived deficiencies there were in the supplementary contracts -- those entered
into by MPEI and the other members of the "consortium" as regards their joint and several undertakings -- have
been cured. Better still, such deficiencies have supposedly been prevented from arising as a result of the above-
quoted provisions, from which it can be immediately established that each of the members of MPC assumes the
same joint and several liability as the other members.
The foregoing argument is unpersuasive. First, the contract being referred to, entitled "The Automated Counting
and Canvassing Project Contract," is between Comelec and MPEI, not the alleged consortium, MPC. To repeat, it
is MPEI -- not MPC -- that is a party to the Contract. Nowhere in that Contract is there any mention of a
consortium or joint venture, of members thereof, much less of joint and several liability. Supposedly executed
sometime in May 2003,43 the Contract bears a notarization date of June 30, 2003, and contains the signature of
Willy U. Yu signing as president of MPEI (not for and on behalf of MPC), along with that of the Comelec chair. It
provides in Section 3.2 that MPEI (not MPC) is to supply the Equipment and perform the Services under the
Contract, in accordance with the appendices thereof; nothing whatsoever is said about any consortium or joint
venture or partnership.
Second, the portions of Section 1.4 of the Contract reproduced above do not have the effect of curing (much less
preventing) deficiencies in the bilateral agreements entered into by MPEI with the other members of the
"consortium," with respect to their joint and several liabilities. The term "Contract Documents," as used in the
quoted passages of Section 1.4, has a well-defined meaning and actually refers only to the following documents:
· The Contract itself along with its appendices
· The Request for Proposal (also known as "Terms of Reference") issued by the Comelec, including the
Tender Inquiries and Bid Bulletins
· The Tender Proposal submitted by MPEI
In other words, the term "Contract Documents" cannot be understood as referring to or including the MOAs and
the Teaming Agreements entered into by MPEI with SK C&C, WeSolv, Election.com and ePLDT. This much is
very clear and admits of no debate. The attempt to use the provisions of Section 1.4 to shore up the MOAs and the
Teaming Agreements is simply unwarranted.
Third and last, we fail to see how respondents can arrive at the conclusion that, from the above-quoted provisions,
it can be immediately established that each of the members of MPC assumes the same joint and several liability as
the other members. Earlier, respondents claimed exactly the opposite -- that the two MOAs (between MPEI and
SK C&C, and between MPEI and WeSolv) had set forth the joint and several undertakings among the parties;
whereas the two Teaming Agreements clarified the parties’ respective roles with regard to the Project, with MPEI
being the independent contractor and Election.com and ePLDT the subcontractors.
Obviously, given the differences in their relationships, their respective liabilities cannot be the same. Precisely, the
very clear terms and stipulations contained in the MOAs and the Teaming Agreements -- entered into by MPEI
with SK C&C, WeSolv, Election.com and ePLDT -- negate the idea that these "members" are on a par with one
another and are, as such, assuming the same joint and several liability.
Moreover, respondents have earlier seized upon the use of the term "particular contract" in the Comelec’s Request
for Proposal (RFP), in order to argue that all the members of the joint venture did not need to be solidarily liable
for the entire project or joint venture. It was sufficient that the lead company and the member in charge of a
particular contract or aspect of the joint venture would agree to be solidarily liable. The glaring lack of consistency
leaves us at a loss. Are respondents trying to establish the same joint and solidary liability among all the
"members" or not?
Enforcement of Liabilities Problematic
Next, it is also maintained that the automation Contract between Comelec and the MPEI confirms the solidary
undertaking of the lead company and the consortium member concerned for each particular Contract, inasmuch as
the position of MPEI and anyone else performing the services contemplated under the Contract is described
therein as that of an independent contractor.
65 | AEP
The Court does not see, however, how this conclusion was arrived at. In the first place, the contractual provision
being relied upon by respondents is Article 14, "Independent Contractors," which states: "Nothing contained
herein shall be construed as establishing or creating between the COMELEC and MEGA the relationship of
employee and employer or principal and agent, it being understood that the position of MEGA and of anyone
performing the Services contemplated under this Contract, is that of an independent contractor."
Obviously, the intent behind the provision was simply to avoid the creation of an employer-employee or a
principal-agent relationship and the complications that it would produce. Hence, the Article states that the role or
position of MPEI, or anyone else performing on its behalf, is that of an independent contractor. It is obvious to the
Court that respondents are stretching matters too far when they claim that, because of this provision, the Contract
in effect confirms the solidary undertaking of the lead company and the consortium member concerned for the
particular phase of the project. This assertion is an absolute non sequitur.
Enforcement of Liabilities Under the Civil Code Not Possible
In any event, it is claimed that Comelec may still enforce the liability of the "consortium" members under the Civil
Code provisions on partnership, reasoning that MPEI et al. represented themselves as partners and members of
MPC for purposes of bidding for the Project. They are, therefore, liable to the Comelec to the extent that the latter
relied upon such representation. Their liability as partners is solidary with respect to everything chargeable to the
partnership under certain conditions.
The Court has two points to make with respect to this argument. First, it must be recalled that SK C&C, WeSolv,
Election.com and ePLDT never represented themselves as partners and members of MPC, whether for purposes of
bidding or for something else. It was MPEI alone that represented them to be members of a "consortium" it
supposedly headed. Thus, its acts may not necessarily be held against the other "members."
Second, this argument of the OSG in its Memorandum44 might possibly apply in the absence of a joint venture
agreement or some other writing that discloses the relationship of the "members" with one another. But precisely,
this case does not deal with a situation in which there is nothing in writing to serve as reference, leaving Comelec
to rely on mere representations and therefore justifying a falling back on the rules on partnership. For, again, the
terms and stipulations of the MOAs entered into by MPEI with SK C&C and WeSolv, as well as the Teaming
Agreements of MPEI with Election.com and ePLDT (copies of which have been furnished the Comelec) are very
clear with respect to the extent and the limitations of the firms’ respective liabilities.
In the case of WeSolv and SK C&C, their MOAs state that their liabilities, while joint and several with MPEI, are
limited only to the particular areas of work wherein their services are engaged or their products utilized. As for
Election.com and ePLDT, their separate "Teaming Agreements" specifically ascribe to them the role of
subcontractor vis-à-vis MPEI as contractor and, based on the terms of their particular agreements, neither
Election.com nor ePLDT is, with MPEI, jointly and severally liable to Comelec.45 It follows then that in the
instant case, there is no justification for anyone, much less Comelec, to resort to the rules on partnership and
partners’ liabilities.
Eligibility of a Consortium Based on the Collective Qualifications of Its Members
Respondents declare that, for purposes of assessing the eligibility of the bidder, the members of MPC should be
evaluated on a collective basis. Therefore, they contend, the failure of MPEI to submit financial statements (on
account of its recent incorporation) should not by itself disqualify MPC, since the other members of the
"consortium" could meet the criteria set out in the RFP.
Thus, according to respondents, the collective nature of the undertaking of the members of MPC, their
contribution of assets and sharing of risks, and the community of their interest in the performance of the Contract
lead to these reasonable conclusions: (1) that their collective qualifications should be the basis for evaluating their
eligibility; (2) that the sheer enormity of the project renders it improbable to expect any single entity to be able to
comply with all the eligibility requirements and undertake the project by itself; and (3) that, as argued by the OSG,
the RFP allows bids from manufacturers, suppliers and/or distributors that have formed themselves into a joint
venture, in recognition of the virtual impossibility of a single entity’s ability to respond to the Invitation to Bid.
Additionally, argues the Comelec, the Implementing Rules and Regulations of RA 6957 (the Build-Operate-
Transfer Law) as amended by RA 7718 would be applicable, as proponents of BOT projects usually form joint
ventures or consortiums. Under the IRR, a joint venture/consortium proponent shall be evaluated based on the
individual or the collective experience of the member-firms of the joint venture/consortium and of the contractors
the proponent has engaged for the project.
Unfortunately, this argument seems to assume that the "collective" nature of the undertaking of the members of
MPC, their contribution of assets and sharing of risks, and the "community" of their interest in the performance of
the Contract entitle MPC to be treated as a joint venture or consortium; and to be evaluated accordingly on the
basis of the members’ collective qualifications when, in fact, the evidence before the Court suggest otherwise.
This Court in Kilosbayan v. Guingona46 defined joint venture as "an association of persons or companies jointly
undertaking some commercial enterprise; generally, all contribute assets and share risks. It requires a community
of interest in the performance of the subject matter, a right to direct and govern the policy in connection therewith,
and [a] duty, which may be altered by agreement to share both in profit and losses."
Going back to the instant case, it should be recalled that the automation Contract with Comelec was not executed
by the "consortium" MPC -- or by MPEI for and on behalf of MPC -- but by MPEI, period. The said Contract
contains no mention whatsoever of any consortium or members thereof. This fact alone seems to contradict all the
suppositions about a joint undertaking that would normally apply to a joint venture or consortium: that it is a
commercial enterprise involving a community of interest, a sharing of risks, profits and losses, and so on.
Now let us consider the four bilateral Agreements, starting with the Memorandum of Agreement between MPEI
and WeSolv Open Computing, Inc., dated March 5, 2003. The body of the MOA consists of just seven (7) short
paragraphs that would easily fit in one page! It reads as follows:
"1. The parties agree to cooperate in successfully implementing the Project in the substance and form as
may be most beneficial to both parties and other subcontractors involved in the Project.
"2. Mega Pacific shall be responsible for any contract negotiations and signing with the COMELEC and,
subject to the latter’s approval, agrees to give WeSolv an opportunity to be present at meetings with the
COMELEC concerning WeSolv’s portion of the Project.
"3. WeSolv shall be jointly and severally liable with Mega Pacific only for the particular products and/or
services supplied by the former for the Project.
"4. Each party shall bear its own costs and expenses relative to this agreement unless otherwise agreed
upon by the parties.
66 | AEP
"5. The parties undertake to do all acts and such other things incidental to, necessary or desirable or the
attainment of the objectives and purposes of this Agreement.
"6. In the event that the parties fail to agree on the terms and conditions of the supply of the products
and services including but not limited to the scope of the products and services to be supplied and
payment terms, WeSolv shall cease to be bound by its obligations stated in the aforementioned
paragraphs.
"7. Any dispute arising from this Agreement shall be settled amicably by the parties whenever possible.
Should the parties be unable to do so, the parties hereby agree to settle their dispute through arbitration
in accordance with the existing laws of the Republic of the Philippines." (Underscoring supplied.)
Even shorter is the Memorandum of Agreement between MPEI and SK C&C Co. Ltd., dated March 9, 2003, the
body of which consists of only six (6) paragraphs, which we quote:
"1. All parties agree to cooperate in achieving the Consortium’s objective of successfully implementing
the Project in the substance and form as may be most beneficial to the Consortium members and in
accordance w/ the demand of the RFP.
"2. Mega Pacific shall have full powers and authority to represent the Consortium with the Comelec, and
to enter and sign, for and in behalf of its members any and all agreement/s which maybe required in the
implementation of the Project.
"3. Each of the individual members of the Consortium shall be jointly and severally liable with the Lead
Firm for the particular products and/or services supplied by such individual member for the project, in
accordance with their respective undertaking or sphere of responsibility.
"4. Each party shall bear its own costs and expenses relative to this agreement unless otherwise agreed
upon by the parties.
"5. The parties undertake to do all acts and such other things incidental to, necessary or desirable for the
attainment of the objectives and purposes of this Agreement.
"6. Any dispute arising from this Agreement shall be settled amicably by the parties whenever possible.
Should the parties be unable to do so, the parties hereby agree to settle their dispute through arbitration
in accordance with the existing laws of the Republic of the Philippines." (Underscoring supplied.)
It will be noted that the two Agreements quoted above are very similar in wording. Neither of them contains any
specifics or details as to the exact nature and scope of the parties’ respective undertakings, performances and
deliverables under the Agreement with respect to the automation project. Likewise, the two Agreements are quite
bereft of pesos-and-centavos data as to the amount of investments each party contributes, its respective share in
the revenues and/or profit from the Contract with Comelec, and so forth -- all of which are normal for agreements
of this nature. Yet, according to public and private respondents, the participation of MPEI, WeSolv and SK C&C
comprises fully 90 percent of the entire undertaking with respect to the election automation project, which is worth
about P1.3 billion.
As for Election.com and ePLDT, the separate "Teaming Agreements" they entered into with MPEI for the DOST Technical Tests Flunked by the Automated Counting Machines
remaining 10 percent of the entire project undertaking are ironically much longer and more detailed than the
MOAs discussed earlier. Although specifically ascribing to them the role of subcontractor vis-à-vis MPEI as Let us now move to the second subtopic, which deals with the substantive issue: the ACM’s failure to pass the
contractor, these Agreements are, however, completely devoid of any pricing data or payment terms. Even the tests of the Department of Science and Technology (DOST).
appended Schedules supposedly containing prices of goods and services are shorn of any price data. Again, as
mentioned earlier, based on the terms of their particular Agreements, neither Election.com nor ePLDT -- with
MPEI -- is jointly and severally liable to Comelec. After respondent "consortium" and the other bidder, TIM, had submitted their respective bids on March 10, 2003,
the Comelec’s BAC -- through its Technical Working Group (TWG) and the DOST -- evaluated their technical
proposals. Requirements that were highly technical in nature and that required the use of certain equipment in the
It is difficult to imagine how these bare Agreements -- especially the first two -- could be implemented in practice; evaluation process were referred to the DOST for testing. The Department reported thus:
and how a dispute between the parties or a claim by Comelec against them, for instance, could be resolved without
lengthy and debilitating litigations. Absent any clear-cut statement as to the exact nature and scope of the parties’
respective undertakings, commitments, deliverables and covenants, one party or another can easily dodge its
obligation and deny or contest its liability under the Agreement; or claim that it is the other party that should have
delivered but failed to. TEST RESULTS MATRIX47

Likewise, in the absence of definite indicators as to the amount of investments to be contributed by each party, Technical Evaluation of Automated Counting Machine
disbursements for expenses, the parties’ respective shares in the profits and the like, it seems to the Court that this
situation could readily give rise to all kinds of misunderstandings and disagreements over money matters.
MEGA-PACIFIC TOTAL
CONSORTIUM INFORMATION
Under such a scenario, it will be extremely difficult for Comelec to enforce the supposed joint and several KEY REQUIREMENTS
MANAGEMENT
liabilities of the members of the "consortium." The Court is not even mentioning the possibility of a situation QUESTIONS
arising from a failure of WeSolv and MPEI to agree on the scope, the terms and the conditions for the supply of YES NO YES NO
the products and services under the Agreement. In that situation, by virtue of paragraph 6 of its MOA, WeSolv
would perforce cease to be bound by its obligations -- including its joint and solidary liability with MPEI under 1. Does the machine have an accuracy rating of at least 99.995 √ √
the MOA -- and could forthwith disengage from the project. Effectively, WeSolv could at any time unilaterally percent
exit from its MOA with MPEI by simply failing to agree. Where would that outcome leave MPEI and Comelec? At COLD environmental condition √ √

To the Court, this strange and beguiling arrangement of MPEI with the other companies does not qualify them to At NORMAL environmental conditions √ √
be treated as a consortium or joint venture, at least of the type that government agencies like the Comelec should
At HARSH environmental conditions
be dealing with. With more reason is it unable to agree to the proposal to evaluate the members of MPC on a
collective basis. 2. Accurately records and reports the date and time of the start √ √
and end of counting of ballots per precinct?
In any event, the MPC members claim to be a joint venture/consortium; and respondents have consistently been
arguing that the IRR for RA 6957, as amended, should be applied to the instant case in order to allow a collective 3. Prints election returns without any loss of date during √ √
generation of such reports?
evaluation of consortium members. Surprisingly, considering these facts, respondents have not deemed it
necessary for MPC members to comply with Section 5.4 (a) (iii) of the IRR for RA 6957 as amended. 4. Uninterruptible back-up power system, that will engage
immediately to allow operation of at least 10 minutes after √ √
According to the aforementioned provision, if the project proponent is a joint venture or consortium, the members outage, power surge or abnormal electrical occurrences?
or participants thereof are required to submit a sworn statement that, if awarded the contract, they shall bind
5. Machine reads two-sided ballots in one pass? √ √
themselves to be jointly, severally and solidarily liable for the project proponent’s obligations thereunder. This
provision was supposed to mirror Section 5 of RA 6957, as amended, which states: "In all cases, a consortium that
participates in a bid must present proof that the members of the consortium have bound themselves jointly and Note: This
particular
severally to assume responsibility for any project. The withdrawal of any member of the consortium prior to the
requirement needs
implementation of the project could be a ground for the cancellation of the contract." The Court has certainly not further verification
seen any joint and several undertaking by the MPC members that even approximates the tenor of that which is
described above. We fail to see why respondents should invoke the IRR if it is for their benefit, but refuse to 6. Machine can detect previously counted ballots and prevent √ √
comply with it otherwise. previously counted ballots from being counted more than once?

B.
67 | AEP
 7. Stores results of counted votes by precinct in external √ √
(removable) storage device?
Note: This
particular
requirement needs
further verification
8. Data stored in external media is encrypted? √ √
Note: This
particular
requirement needs
further verification
9. Physical key or similar device allows, limits, or restricts √ √
operation of the machine?
10. CPU speed is at least 400mHz? √ √
Note: This
particular
requirement needs
further verification
11. Port to allow use of dot-matrix printers? √ √
12. Generates printouts of the election returns in a format
specified by the COMELEC?
Generates printouts √ √
In format specified by COMELEC √ √
13. Prints election returns without any loss of data during √ √
generation of such report?
14. Generates an audit trail of the counting machine, both hard
copy and soft copy?
Hard copy √ √
Soft copy √ √
Note: This
particular
requirement needs
further verification
15. Does the City/Municipal Canvassing System consolidate √ √
results from all precincts within it using the encrypted soft copy
of the data generated by the counting machine and stored on the
Note: This
removable data storage device?
particular
requirement needs
further verification
68 | AEP
16. Does the City/Municipal Canvassing System consolidate √ √
results from all precincts within it using the encrypted soft copy
of the data generated by the counting machine and transmitted
Note: This Note: This
through an electronic transmission media?
particular particular
requirement needs requirement needs
further verification further verification
17. Does the system output a Zero City/Municipal Canvass √ √
Report, which is printed on election day prior to the conduct of
the actual canvass operation, that shows that all totals for all the
Note: This
votes for all the candidates and other information, are indeed
particular
zero or null?
requirement needs
further verification
18. Does the system consolidate results from all precincts in the √ √
city/municipality using the data storage device coming from the
counting machine?
Note: This
particular
requirement needs
further verification
19. Is the machine 100% accurate? √ √
Note: This
particular
requirement needs
further verification
20. Is the Program able to detect previously downloaded precinct √ √
results and prevent these from being inputted again into the
System?
Note: This
particular
requirement needs
further verification
21. The System is able to print the specified reports and the audit
trail without any loss of data during generation of the above-
mentioned reports?
Prints specified reports √ √
Audit Trail √ √
22. Can the result of the city/municipal consolidation be stored in √ √
a data storage device?
Note: This
particular
requirement needs
further verification
23. Does the system consolidate results from all precincts in the √ √
provincial/district/ national using the data storage device from
different levels of consolidation?
 "The results of the evaluation conducted by the TWG and that of the DOST (14 April 2003 report),
would show the apparent advantage of Mega-Pacific over the other competitor, TIM.
Note: This
particular
requirement needs "The BAC further noted that both Mega-Pacific and TIM obtained some ‘failed marks’ in the technical
further verification evaluation. In general, the ‘failed marks’ of Total Information Management as enumerated above affect
the counting machine itself which are material in nature, constituting non-compliance to the RFP. On the
24. Is the system 100% accurate? √ √ other hand, the ‘failed marks’ of Mega-Pacific are mere formalities on certain documentary
requirements which the BAC may waive as clearly indicated in the Invitation to Bid.
Note: This
particular "In the DOST test, TIM obtained 12 failed marks and mostly attributed to the counting machine itself as
requirement needs
further verification
stated earlier. These are requirements of the RFP and therefore the BAC cannot disregard the same.

25. Is the Program able to detect previously downloaded precinct
results and prevent these from being inputted again into the
System?
26. The System is able to print the specified reports and the audit
trail without any loss of data during generation of the
abovementioned reports?
√ √ "Mega-Pacific failed in 8 items however these are mostly on the software which can be corrected by
reprogramming the software and therefore can be readily corrected.
Note: This
particular
"The BAC verbally inquired from DOST on the status of the retest of the counting machines of the TIM
requirement needs
further verification and was informed that the report will be forthcoming after the holy week. The BAC was informed that
the retest is on a different parameters they’re being two different machines being tested. One purposely
to test if previously read ballots will be read again and the other for the other features such as two sided
ballots.

Prints specified reports √ √ "The said machine and the software therefore may not be considered the same machine and program as
submitted in the Technical proposal and therefore may be considered an enhancement of the original
Audit Trail √ √ proposal.

Note: This "Advance information relayed to the BAC as of 1:40 PM of 15 April 2003 by Executive Director
particular Ronaldo T. Viloria of DOST is that the result of the test in the two counting machines of TIM contains
requirement needs substantial errors that may lead to the failure of these machines based on the specific items of the RFP
further verification that DOST has to certify.
27. Can the results of the provincial/district/national √ √
consolidation be stored in a data storage device? OPENING OF FINANCIAL BIDS
Note: This
particular "The BAC on 15 April 2003, after notifying the concerned bidders opened the financial bids in their
requirement needs presence and the results were as follows:
further verification

Mega-Pacific:
According to respondents, it was only after the TWG and the DOST had conducted their separate tests and
submitted their respective reports that the BAC, on the basis of these reports formulated its Option 1 – Outright purchase: Bid Price if Php1,248,949,088.00
comments/recommendations on the bids of the consortium and TIM.
Option 2 – Lease option:
The BAC, in its Report dated April 21, 2003, recommended that the Phase II project involving the acquisition of
automated counting machines be awarded to MPEI. It said:
70% Down payment of cost of hardware or Php642,755,757.07
"After incisive analysis of the technical reports of the DOST and the Technical Working Group for
Phase II – Automated Counting Machine, the BAC considers adaptability to advances in modern Remainder payable over 50 months or a total of Php642,755,757.07
technology to ensure an effective and efficient method, as well as the security and integrity of the
system. Discount rate of 15% p.a. or 1.2532% per month.
69 | AEP
 Total Number of Automated Counting Machine – 1,769 ACMs (Nationwide)
TIM:
Total Bid Price – Php1,297,860,560.00
Total Number of Automated Counting Machine – 2,272 ACMs (Mindanao and NCR only)
"Premises considered, it appears that the bid of Mega Pacific is the lowest calculated responsive bid, and
therefore, the Bids and Awards Committee (BAC) recommends that the Phase II project re Automated
Counting Machine be awarded to Mega Pacific eSolutions, Inc."48
The BAC, however, also stated on page 4 of its Report: "Based on the 14 April 2003 report (Table 6) of the
DOST, it appears that both Mega-Pacific and TIM (Total Information Management Corporation) failed to meet
some of the requirements. Below is a comparative presentation of the requirements wherein Mega-Pacific or TIM
or both of them failed: x x x." What followed was a list of "key requirements," referring to technical requirements,
and an indication of which of the two bidders had failed to meet them.
Failure to Meet the Required Accuracy Rating
The first of the key requirements was that the counting machines were to have an accuracy rating of at least
99.9995 percent. The BAC Report indicates that both Mega Pacific and TIM failed to meet this standard.
The key requirement of accuracy rating happens to be part and parcel of the Comelec’s Request for Proposal
(RFP). The RFP, on page 26, even states that the ballot counting machines and ballot counting software "must
have an accuracy rating of 99.9995% (not merely 99.995%) or better as certified by a reliable independent testing
agency."
When questioned on this matter during the Oral Argument, Commissioner Borra tried to wash his hands by
claiming that the required accuracy rating of 99.9995 percent had been set by a private sector group in tandem
with Comelec. He added that the Commission had merely adopted the accuracy rating as part of the group’s
recommended bid requirements, which it had not bothered to amend even after being advised by DOST that such
standard was unachievable. This excuse, however, does not in any way lessen Comelec’s responsibility to adhere
to its own published bidding rules, as well as to see to it that the consortium indeed meets the accuracy standard.
Whichever accuracy rating is the right standard -- whether 99.995 or 99.9995 percent -- the fact remains that the
machines of the so-called "consortium" failed to even reach the lesser of the two. On this basis alone, it ought to
have been disqualified and its bid rejected outright.
At this point, the Court stresses that the essence of public bidding is violated by the practice of requiring very high
standards or unrealistic specifications that cannot be met -- like the 99.9995 percent accuracy rating in this case --
only to water them down after the bid has been award. Such scheme, which discourages the entry of prospective
bona fide bidders, is in fact a sure indication of fraud in the bidding, designed to eliminate fair competition.
Certainly, if no bidder meets the mandatory requirements, standards or specifications, then no award should be
made and a failed bidding declared.
Failure of Software to Detect Previously Downloaded Data
70 | AEP
Furthermore, on page 6 of the BAC Report, it appears that the "consortium" as well as TIM failed to meet another
key requirement -- for the counting machine’s software program to be able to detect previously downloaded
precinct results and to prevent these from being entered again into the counting machine. This same
deficiency on the part of both bidders reappears on page 7 of the BAC Report, as a result of the recurrence of their
failure to meet the said key requirement.
That the ability to detect previously downloaded data at different canvassing or consolidation levels is deemed of
utmost importance can be seen from the fact that it is repeated three times in the RFP. On page 30 thereof, we find
the requirement that the city/municipal canvassing system software must be able to detect previously downloaded
precinct results and prevent these from being "inputted" again into the system. Again, on page 32 of the RFP, we
read that the provincial/district canvassing system software must be able to detect previously downloaded
city/municipal results and prevent these from being "inputted" again into the system. And once more, on page 35
of the RFP, we find the requirement that the national canvassing system software must be able to detect
previously downloaded provincial/district results and prevent these from being "inputted" again into the system.
Once again, though, Comelec chose to ignore this crucial deficiency, which should have been a cause for the
gravest concern. Come May 2004, unscrupulous persons may take advantage of and exploit such deficiency by
repeatedly downloading and feeding into the computers results favorable to a particular candidate or candidates.
We are thus confronted with the grim prospect of election fraud on a massive scale by means of just a few key
strokes. The marvels and woes of the electronic age!
Inability to Print the Audit Trail
But that grim prospect is not all. The BAC Report, on pages 6 and 7, indicate that the ACMs of both bidders were
unable to print the audit trail without any loss of data. In the case of MPC, the audit trail system was "not yet
incorporated" into its ACMs.
This particular deficiency is significant, not only to this bidding but to the cause of free and credible elections. The
purpose of requiring audit trails is to enable Comelec to trace and verify the identities of the ACM operators
responsible for data entry and downloading, as well as the times when the various data were downloaded into the
canvassing system, in order to forestall fraud and to identify the perpetrators.
Thus, the RFP on page 27 states that the ballot counting machines and ballot counting software must print an audit
trail of all machine operations for documentation and verification purposes. Furthermore, the audit trail must be
stored on the internal storage device and be available on demand for future printing and verifying. On pages 30-
31, the RFP also requires that the city/municipal canvassing system software be able to print an audit trail of the
canvassing operations, including therein such data as the date and time the canvassing program was started, the
log-in of the authorized users (the identity of the machine operators), the date and time the canvass data were
downloaded into the canvassing system, and so on and so forth. On page 33 of the RFP, we find the same audit
trail requirement with respect to the provincial/district canvassing system software; and again on pages 35-36
thereof, the same audit trail requirement with respect to the national canvassing system software.
That this requirement for printing audit trails is not to be lightly brushed aside by the BAC or Comelec itself as a
mere formality or technicality can be readily gleaned from the provisions of Section 7 of RA 8436, which
authorizes the Commission to use an automated system for elections.
The said provision which respondents have quoted several times, provides that ACMs are to possess certain
features divided into two classes: those that the statute itself considers mandatory and other features or capabilities
that the law deems optional. Among those considered mandatory are "provisions for audit trails"! Section 7 reads
as follows: "The System shall contain the following features: (a) use of appropriate ballots; (b) stand-alone
machine which can count votes and an automated system which can consolidate the results immediately; (c) with
provisions for audit trails; (d) minimum human intervention; and (e) adequate safeguard/security measures."
(Italics and emphases supplied.)
In brief, respondents cannot deny that the provision requiring audit trails is indeed mandatory, considering the
wording of Section 7 of RA 8436. Neither can Respondent Comelec deny that it has relied on the BAC Report,
which indicates that the machines or the software was deficient in that respect. And yet, the Commission simply
disregarded this shortcoming and awarded the Contract to private respondent, thereby violating the very law it was
supposed to implement.
C.
Inadequacy of Post Facto Remedial Measures
Respondents argue that the deficiencies relating to the detection of previously downloaded data, as well as
provisions for audit trails, are mere shortcomings or minor deficiencies in software or programming, which can be
rectified. Perhaps Comelec simply relied upon the BAC Report, which states on page 8 thereof that "Mega Pacific
failed in 8 items[;] however these are mostly on the software which can be corrected by re-programming x x x and
therefore can be readily corrected."
The undersigned ponente’s questions, some of which were addressed to Commissioner Borra during the Oral
Argument, remain unanswered to this day. First of all, who made the determination that the eight "fail" marks of
Mega Pacific were on account of the software -- was it DOST or TWG? How can we be sure these failures were
not the results of machine defects? How was it determined that the software could actually be re-programmed and
thereby rectified? Did a qualified technical expert read and analyze the source code49 for the programs and
conclude that these could be saved and remedied? (Such determination cannot be done by any other means save by
the examination and analysis of the source code.)
Who was this qualified technical expert? When did he carry out the study? Did he prepare a written report on his
findings? Or did the Comelec just make a wild guess? It does not follow that all defects in software programs can
be rectified, and the programs saved. In the information technology sector, it is common knowledge that there are
many badly written programs, with significant programming errors written into them; hence it does not make
economic sense to try to correct the programs; instead, programmers simply abandon them and just start from
scratch. There’s no telling if any of these programs is unrectifiable, unless a qualified programmer reads the
source code.
And if indeed a qualified expert reviewed the source code, did he also determine how much work would be needed
to rectify the programs? And how much time and money would be spent for that effort? Who would carry out the
work? After the rectification process, who would ascertain and how would it be ascertained that the programs have
indeed been properly rectified, and that they would work properly thereafter? And of course, the most important
question to ask: could the rectification be done in time for the elections in 2004?
Clearly, none of the respondents bothered to think the matter through. Comelec simply took the word of the BAC
as gospel truth, without even bothering to inquire from DOST whether it was true that the deficiencies noted could
possibly be remedied by re-programming the software. Apparently, Comelec did not care about the software, but
focused only on purchasing the machines.
71 | AEP
What really adds to the Court’s dismay is the admission made by Commissioner Borra during the Oral Argument
that the software currently being used by Comelec was merely the "demo" version, inasmuch as the final version
that would actually be used in the elections was still being developed and had not yet been finalized.
It is not clear when the final version of the software would be ready for testing and deployment. It seems to the
Court that Comelec is just keeping its fingers crossed and hoping the final product would work. Is there a "Plan B"
in case it does not? Who knows? But all these software programs are part and parcel of the bidding and the
Contract awarded to the Consortium. Why is it that the machines are already being brought in and paid for, when
there is as yet no way of knowing if the final version of the software would be able to run them properly, as well as
canvass and consolidate the results in the manner required?
The counting machines, as well as the canvassing system, will never work properly without the correct software
programs. There is an old adage that is still valid to this day: "Garbage in, garbage out." No matter how powerful,
advanced and sophisticated the computers and the servers are, if the software being utilized is defective or has
been compromised, the results will be no better than garbage. And to think that what is at stake here is the 2004
national elections -- the very basis of our democratic life.
Correction of Defects?
To their Memorandum, public respondents proudly appended 19 Certifications issued by DOST declaring that
some 285 counting machines had been tested and had passed the acceptance testing conducted by the Department
on October 8-18, 2003. Among those tested were some machines that had failed previous tests, but had undergone
adjustments and thus passed re-testing.
Unfortunately, the Certifications from DOST fail to divulge in what manner and by what standards or criteria the
condition, performance and/or readiness of the machines were re-evaluated and re-appraised and thereafter given
the passing mark. Apart from that fact, the remedial efforts of respondents were, not surprisingly, apparently
focused again on the machines -- the hardware. Nothing was said or done about the software -- the deficiencies as
to detection and prevention of downloading and entering previously downloaded data, as well as the capability to
print an audit trail. No matter how many times the machines were tested and re-tested, if nothing was done about
the programming defects and deficiencies, the same danger of massive electoral fraud remains. As anyone who
has a modicum of knowledge of computers would say, "That’s elementary!"
And only last December 5, 2003, an Inq7.net news report quoted the Comelec chair as saying that the new
automated poll system would be used nationwide in May 2004, even as the software for the system remained
unfinished. It also reported that a certain Titus Manuel of the Philippine Computer Society, which was helping
Comelec test the hardware and software, said that the software for the counting still had to be submitted on
December 15, while the software for the canvassing was due in early January.
Even as Comelec continues making payments for the ACMs, we keep asking ourselves: who is going to ensure
that the software would be tested and would work properly?
At any rate, the re-testing of the machines and/or the 100 percent testing of all machines (testing of every single
unit) would not serve to eradicate the grave abuse of discretion already committed by Comelec when it awarded
the Contract on April 15, 2003, despite the obvious and admitted flaws in the bidding process, the failure of the
"winning bidder" to qualify, and the inability of the ACMs and the intended software to meet the bid requirements
and rules.
Comelec’s Latest "Assurances" Are Unpersuasive
Even the latest pleadings filed by Comelec do not serve to allay our apprehensions. They merely affirm and
compound the serious violations of law and gravely abusive acts it has committed. Let us examine them.
The Resolution issued by this Court on December 9, 2003 required respondents to inform it as to the number of
ACMs delivered and paid for, as well as the total payment made to date for the purchase thereof. They were
likewise instructed to submit a certification from the DOST attesting to the number of ACMs tested, the number
found to be defective; and "whether the reprogrammed software has been tested and found to have complied with
the requirements under Republic Act No. 8436."50
In its "Partial Compliance and Manifestation" dated December 29, 2003, Comelec informed the Court that 1,991
ACMs had already been delivered to the Commission as of that date. It further certified that it had already paid the
supplier the sum of P849,167,697.41, which corresponded to 1,973 ACM units that had passed the acceptance
testing procedures conducted by the MIRDC-DOST51 and which had therefore been accepted by the poll body.
In the same submission, for the very first time, Comelec also disclosed to the Court the following:
"The Automated Counting and Canvassing Project involves not only the manufacturing of the ACM
hardware but also the development of three (3) types of software, which are intended for use in the
following:
1. Evaluation of Technical Bids
2. Testing and Acceptance Procedures
3. Election Day Use."
Purchase of the First Type of Software Without Evaluation
In other words, the first type of software was to be developed solely for the purpose of enabling the evaluation of
the bidder’s technical bid. Comelec explained thus: "In addition to the presentation of the ACM hardware, the
bidders were required to develop a ‘base’ software program that will enable the ACM to function properly. Since
the software program utilized during the evaluation of bids is not the actual software program to be employed on
election day, there being two (2) other types of software program that will still have to be developed and
thoroughly tested prior to actual election day use, defects in the ‘base’ software that can be readily corrected by
reprogramming are considered minor in nature, and may therefore be waived."
In short, Comelec claims that it evaluated the bids and made the decision to award the Contract to the "winning"
bidder partly on the basis of the operation of the ACMs running a "base" software. That software was therefore
nothing but a sample or "demo" software, which would not be the actual one that would be used on election day.
Keeping in mind that the Contract involves the acquisition of not just the ACMs or the hardware, but also the
software that would run them, it is now even clearer that the Contract was awarded without Comelec having seen,
much less evaluated, the final product -- the software that would finally be utilized come election day. (Not even
the "near-final" product, for that matter).
72 | AEP
What then was the point of conducting the bidding, when the software that was the subject of the Contract was
still to be created and could conceivably undergo innumerable changes before being considered as being in final
form? And that is not all!
No Explanation for Lapses in the Second Type of Software
The second phase, allegedly involving the second type of software, is simply denominated "Testing and
Acceptance Procedures." As best as we can construe, Comelec is claiming that this second type of software is also
to be developed and delivered by the supplier in connection with the "testing and acceptance" phase of the
acquisition process. The previous pleadings, though -- including the DOST reports submitted to this Court -- have
not heretofore mentioned any statement, allegation or representation to the effect that a particular set of software
was to be developed and/or delivered by the supplier in connection with the testing and acceptance of delivered
ACMs.
What the records do show is that the imported ACMs were subjected to the testing and acceptance process
conducted by the DOST. Since the initial batch delivered included a high percentage of machines that had failed
the tests, Comelec asked the DOST to conduct a 100 percent testing; that is, to test every single one of the ACMs
delivered. Among the machines tested on October 8 to 18, 2003, were some units that had failed previous tests but
had subsequently been re-tested and had passed. To repeat, however, until now, there has never been any mention
of a second set or type of software pertaining to the testing and acceptance process.
In any event, apart from making that misplaced and uncorroborated claim, Comelec in the same submission also
professes (in response to the concerns expressed by this Court) that the reprogrammed software has been tested
and found to have complied with the requirements of RA 8436. It reasoned thus: "Since the software program
is an inherent element in the automated counting system, the certification issued by the MIRDC-DOST that one
thousand nine hundred seventy-three (1,973) units passed the acceptance test procedures is an official recognition
by the MIRDC-DOST that the software component of the automated election system, which has been
reprogrammed to comply with the provisions of Republic Act No. 8436 as prescribed in the Ad Hoc Technical
Evaluation Committee’s ACM Testing and Acceptance Manual, has passed the MIRDC-DOST tests."
The facts do not support this sweeping statement of Comelec. A scrutiny of the MIRDC-DOST letter dated
December 15, 2003,52 which it relied upon, does not justify its grand conclusion. For clarity’s sake, we quote in
full the letter-certification, as follows:
"15 December 2003
"HON. RESURRECCION Z. BORRA
Commissioner-in-Charge
Phase II, Modernization Project
Commission on Elections
Intramuros, Manila
Attention: Atty. Jose M. Tolentino, Jr.
 Project Director
"Dear Commissioner Borra:
"We are pleased to submit 11 DOST Test Certifications representing 11 lots and covering 158 units of
automated counting machines (ACMs) that we have tested from 02-12 December 2003.
"To date, we have tested all the 1,991 units of ACMs, broken down as follow: (sic)
1st batch - 30 units 4th batch - 438 units
2nd batch - 288 units 5th batch - 438 units
3rd batch - 414 units 6th batch - 383 units
"It should be noted that a total of 18 units have failed the test. Out of these 18 units, only one (1) unit has
failed the retest.
"Thank you and we hope you will find everything in order.
"Very truly yours,
"ROLANDO T. VILORIA, CESO III
Executive Director cum
Chairman, DOST-Technical Evaluation Committee"
Even a cursory glance at the foregoing letter shows that it is completely bereft of anything that would remotely
support Comelec’s contention that the "software component of the automated election system x x x has been
reprogrammed to comply with" RA 8436, and "has passed the MIRDC-DOST tests." There is no mention at all of
any software reprogramming. If the MIRDC-DOST had indeed undertaken the supposed reprogramming and the
process turned out to be successful, that agency would have proudly trumpeted its singular achievement.
How Comelec came to believe that such reprogramming had been undertaken is unclear. In any event, the
Commission is not forthright and candid with the factual details. If reprogramming has been done, who performed
it and when? What exactly did the process involve? How can we be assured that it was properly performed? Since
the facts attendant to the alleged reprogramming are still shrouded in mystery, the Court cannot give any weight to
Comelec’s bare allegations.
The fact that a total of 1,973 of the machines has ultimately passed the MIRDC-DOST tests does not by itself
serve as an endorsement of the soundness of the software program, much less as a proof that it has been
reprogrammed. In the first place, nothing on record shows that the tests and re-tests conducted on the machines
were intended to address the serious deficiencies noted earlier. As a matter of fact, the MIRDC-DOST letter does
not even indicate what kinds of tests or re-tests were conducted, their exact nature and scope, and the specific
objectives thereof.53 The absence of relevant supporting documents, combined with the utter vagueness of the
73 | AEP
letter, certainly fails to inspire belief or to justify the expansive confidence displayed by Comelec. In any event, it
goes without saying that remedial measures such as the alleged reprogramming cannot in any way mitigate the
grave abuse of discretion already committed as early as April 15, 2003.
Rationale of Public Bidding Negated
by the Third Type of Software
Respondent Comelec tries to assuage this Court’s anxiety in these words: "The reprogrammed software that has
already passed the requirements of Republic Act No. 8436 during the MIRDC-DOST testing and acceptance
procedures will require further customization since the following additional elements, among other things, will
have to be considered before the final software can be used on election day: 1. Final Certified List of Candidates x
x x 2. Project of Precincts x x x 3. Official Ballot Design and Security Features x x x 4. Encryption, digital
certificates and digital signatures x x x. The certified list of candidates for national elective positions will be
finalized on or before 23 January 2004 while the final list of projects of precincts will be prepared also on the
same date. Once all the above elements are incorporated in the software program, the Test Certification Group
created by the Ad Hoc Technical Evaluation Committee will conduct meticulous testing of the final software
before the same can be used on election day. In addition to the testing to be conducted by said Test Certification
Group, the Comelec will conduct mock elections in selected areas nationwide not only for purposes of public
information but also to further test the final election day program. Public respondent Comelec, therefore, requests
that it be given up to 16 February 2004 to comply with this requirement."
The foregoing passage shows the imprudent approach adopted by Comelec in the bidding and acquisition process.
The Commission says that before the software can be utilized on election day, it will require "customization"
through addition of data -- like the list of candidates, project of precincts, and so on. And inasmuch as such data
will become available only in January 2004 anyway, there is therefore no perceived need on Comelec’s part to
rush the supplier into producing the final (or near-final) version of the software before that time. In any case,
Comelec argues that the software needed for the electoral exercise can be continuously developed, tested, adjusted
and perfected, practically all the way up to election day, at the same time that the Commission is undertaking all
the other distinct and diverse activities pertinent to the elections.
Given such a frame of mind, it is no wonder that Comelec paid little attention to the counting and canvassing
software during the entire bidding process, which took place in February-March 2003. Granted that the software
was defective, could not detect and prevent the re-use of previously downloaded data or produce the audit trail --
aside from its other shortcomings -- nevertheless, all those deficiencies could still be corrected down the road. At
any rate, the software used for bidding purposes would not be the same one that will be used on election day, so
why pay any attention to its defects? Or to the Comelec’s own bidding rules for that matter?
Clearly, such jumbled ratiocinations completely negate the rationale underlying the bidding process mandated by
law.
At the very outset, the Court has explained that Comelec flagrantly violated the public policy on public biddings
(1) by allowing MPC/MPEI to participate in the bidding even though it was not qualified to do so; and (2) by
eventually awarding the Contract to MPC/MPEI. Now, with the latest explanation given by Comelec, it is clear
that the Commission further desecrated the law on public bidding by permitting the winning bidder to change and
alter the subject of the Contract (the software), in effect allowing a substantive amendment without public bidding.
This stance is contrary to settled jurisprudence requiring the strict application of pertinent rules, regulations and
guidelines for public bidding for the purpose of placing each bidder, actual or potential, on the same footing. The
essence of public bidding is, after all, an opportunity for fair competition, and a fair basis for the precise
comparison of bids. In common parlance, public bidding aims to "level the playing field." That means each bidder
must bid under the same conditions; and be subject to the same guidelines, requirements and limitations, so that
the best offer or lowest bid may be determined, all other things being equal.
Thus, it is contrary to the very concept of public bidding to permit a variance between the conditions under which
bids are invited and those under which proposals are submitted and approved; or, as in this case, the conditions
under which the bid is won and those under which the awarded Contract will be complied with. The substantive
amendment of the contract bidded out, without any public bidding -- after the bidding process had been concluded
-- is violative of the public policy on public biddings, as well as the spirit and intent of RA 8436. The whole point
in going through the public bidding exercise was completely lost. The very rationale of public bidding was totally
subverted by the Commission.
From another perspective, the Comelec approach also fails to make sense. Granted that, before election day, the
software would still have to be customized to each precinct, municipality, city, district, and so on, there still was
nothing at all to prevent Comelec from requiring prospective suppliers/bidders to produce, at the very start of the
bidding process, the "next-to-final" versions of the software (the best software the suppliers had) -- pre-tested and
ready to be customized to the final list of candidates and project of precincts, among others, and ready to be
deployed thereafter. The satisfaction of such requirement would probably have provided far better bases for
evaluation and selection, as between suppliers, than the so-called demo software.Respondents contend that the
bidding suppliers’ counting machines were previously used in at least one political exercise with no less than 20
million voters. If so, it stands to reason that the software used in that past electoral exercise would probably still be
available and, in all likelihood, could have been adopted for use in this instance. Paying for machines and software
of that category (already tried and proven in actual elections and ready to be adopted for use) would definitely
make more sense than paying the same hundreds of millions of pesos for demo software and empty promises of
usable programs in the future.
But there is still another gut-level reason why the approach taken by Comelec is reprehensible. It rides on the
perilous assumption that nothing would go wrong; and that, come election day, the Commission and the supplier
would have developed, adjusted and "re-programmed" the software to the point where the automated system could
function as envisioned. But what if such optimistic projection does not materialize? What if, despite all their
herculean efforts, the software now being hurriedly developed and tested for the automated system performs
dismally and inaccurately or, worse, is hacked and/or manipulated?54 What then will we do with all the machines
and defective software already paid for in the amount of P849 million of our tax money? Even more important,
what will happen to our country in case of failure of the automation?
The Court cannot grant the plea of Comelec that it be given until February 16, 2004 to be able to submit a
"certification relative to the additional elements of the software that will be customized," because for us to do so
would unnecessarily delay the resolution of this case and would just give the poll body an unwarranted excuse to
postpone the 2004 elections. On the other hand, because such certification will not cure the gravely abusive
actions complained of by petitioners, it will be utterly useless.
Is this Court being overly pessimistic and perhaps even engaging in speculation? Hardly. Rather, the Court holds
that Comelec should not have gambled on the unrealistic optimism that the supplier’s software development
efforts would turn out well. The Commission should have adopted a much more prudent and judicious approach to
ensure the delivery of tried and tested software, and readied alternative courses of action in case of failure.
Considering that the nation’s future is at stake here, it should have done no less.
74 | AEP
Epilogue
Once again, the Court finds itself at the crossroads of our nation’s history. At stake in this controversy is not just
the business of a computer supplier, or a questionable proclamation by Comelec of one or more public officials.
Neither is it about whether this country should switch from the manual to the automated system of counting and
canvassing votes. At its core is the ability and capacity of the Commission on Elections to perform properly,
legally and prudently its legal mandate to implement the transition from manual to automated elections.
Unfortunately, Comelec has failed to measure up to this historic task. As stated at the start of this Decision,
Comelec has not merely gravely abused its discretion in awarding the Contract for the automation of the counting
and canvassing of the ballots. It has also put at grave risk the holding of credible and peaceful elections by
shoddily accepting electronic hardware and software that admittedly failed to pass legally mandated technical
requirements. Inadequate as they are, the remedies it proffers post facto do not cure the grave abuse of discretion it
already committed (1) on April 15, 2003, when it illegally made the award; and (2) "sometime" in May 2003 when
it executed the Contract for the purchase of defective machines and non-existent software from a non-eligible
bidder.
For these reasons, the Court finds it totally unacceptable and unconscionable to place its imprimatur on this void
and illegal transaction that seriously endangers the breakdown of our electoral system. For this Court to cop-out
and to close its eyes to these illegal transactions, while convenient, would be to abandon its constitutional duty of
safeguarding public interest.
As a necessary consequence of such nullity and illegality, the purchase of the machines and all appurtenances
thereto including the still-to-be-produced (or in Comelec’s words, to be "reprogrammed") software, as well as all
the payments made therefor, have no basis whatsoever in law. The public funds expended pursuant to the void
Resolution and Contract must therefore be recovered from the payees and/or from the persons who made possible
the illegal disbursements, without prejudice to possible criminal prosecutions against them.
Furthermore, Comelec and its officials concerned must bear full responsibility for the failed bidding and award,
and held accountable for the electoral mess wrought by their grave abuse of discretion in the performance of their
functions. The State, of course, is not bound by the mistakes and illegalities of its agents and servants.
True, our country needs to transcend our slow, manual and archaic electoral process. But before it can do so, it
must first have a diligent and competent electoral agency that can properly and prudently implement a well-
conceived automated election system.
At bottom, before the country can hope to have a speedy and fraud-free automated election, it must first be able to
procure the proper computerized hardware and software legally, based on a transparent and valid system of public
bidding. As in any democratic system, the ultimate goal of automating elections must be achieved by a legal, valid
and above-board process of acquiring the necessary tools and skills therefor. Though the Philippines needs an
automated electoral process, it cannot accept just any system shoved into its bosom through improper and illegal
methods. As the saying goes, the end never justifies the means. Penumbral contracting will not produce
enlightened results.
WHEREFORE, the Petition is GRANTED. The Court hereby declares NULL and VOID Comelec Resolution No.
6074 awarding the contract for Phase II of the AES to Mega Pacific Consortium (MPC). Also declared null and
void is the subject Contract executed between Comelec and Mega Pacific eSolutions (MPEI).55 Comelec is further
ORDERED to refrain from implementing any other contract or agreement entered into with regard to this project.
Let a copy of this Decision be furnished the Office of the Ombudsman which shall determine the criminal liability,
if any, of the public officials (and conspiring private individuals, if any) involved in the subject Resolution and
Contract. Let the Office of the Solicitor General also take measures to protect the government and vindicate public
interest from the ill effects of the illegal disbursements of public funds made by reason of the void Resolution and
Contract.

SO ORDERED.

75 | AEP
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-39195 May 16, 1975
THE SAN MIGUEL CORPORATION and FRANCISCO ANDRES, petitioners,
vs.
THE HONORABLE SECRETARY OF LABOR, NATIONAL LABOR RELATIONS COMMISSION and
GREGORIO YANGLAY, JR., respondents.
AQUINO, J.
The San Miguel Corporation in this special civil action of certiorari seeks to annul the decision of the old National
Labor Relations Commission (NLRC) dated Feb. 27, 1973, ordering the reinstatement (with back wages) of
Gregorio Yanglay, Jr. to his position of operator in the crown cork department of its Metal Closure and
Lithography Plant located at Cristobal Street, Paco, Manila. On July 9, 1974 the Secretary of Labor affirmed that
decision which also absolved the company from the charge of unfair labor practice.
Yanglay worked in the said plant with a daily wage of fourteen pesos from June 9, 1963 to July 19, 1972, when he
was dismissed by Franciso Andres, the plant manager. The cause of his dismissal was illegal trafficking in
company medicines. (According to the company Yanglay was suspended sixteen times for continuous absences
during the period from November 16, 1964 to December 16, 1971).
The record of NLRC Case No. MC-180, "Gregorio Yanglay, Jr. versus The San Miguel Corporation and Francisco
Andres", reveals that Yanglay, a thirty-year old married man residing at Cavite City, after leaving the plant at
three o'clock in the afternoon of April 22, 1972, was apprehended by Patrolman E. Reyes of the Manila Police
Department outside the company compound. Yanglay was carrying a bagful of drugs, such as prothiona tablets,
arlidin, dexopan, rovicon, etc., worth P267, which were turned over to Salvacion Mercurio, the nurse in charge of
the company's clinic.
Yanglay, in his written statement taken by Sergeant Francisco Enriquez of the company's security force at around
three-forty of that same afternoon, admitted that he was caught in possession of the said drugs which he had
bought from his co-workers and which had been given to them free of charge so as to keep them in the "pink of
health". Yanglay further admitted:têñ.£îhqwâ£
Opo, hindi ko na po uulitin ang mga bagay na ito, dala po lamang ng pangangailangan kaya ko
binibili ito, hindi na po mauulit.
Yanglay was investigated on May 15 and June 23 and 27, 1972 by Beda Gonzalez of the management in the
presence of the union counsel, a union vice-president, the shop steward and the plant superintendent.
76 | AEP
At the investigation on June 27 Yanglay denied that he was trafficking illegally in drugs of the company. He said
that he bought the drugs from his co-workers in the same way that some workers bought the rice rations of their
co-workers. He contended that he had not violated any rule of the company. He clarified that some of the
medicines were given to him by his co-workers.
On the basis of that investigation, Yanglay was dismissed on July 19, 1972. At the meeting of the union and
management panels on September 22, 1972 to thresh out Yanglay's grievance, the union representative contended
that there was no company rule against trafficking in drugs, which were no longer owned by the company after
having been issued to its workers, and that the sale of the drugs was like the sale of rice rations which sale was
allegedly tolerated by the company officials. The union conceded that suspension should be the proper disciplinary
action but not dismissal. Yanglay had been in the service of the company for nine years.
The management panel countered that it is evident that Yanglay's dismissal was not due to union activities; that
the sale of the drugs was a subversion of the company's efforts to give medical benefits to its workers and that
trafficking in rice rations cannot be cited as a justification because the value of the rice is reflected in the workers'
income tax returns.
On December 4, 1972 Yanglay filed a complaint with the NLRC alleging that there was no evidence to justify his
dismissal, that the truth was that he owned the medicines in question and that he was dismissed because of his
union activities as a "militant shop steward of the Ilaw at Buklod ng Manggagawa", the union representing the
workers of the corporation (NLRC Case No. MC-180).
An NLRC commissioner sent telegrams dated December 5, 1972, notifying the parties that the case was set for
hearing on December 18. On that date Enrique C. Cruz, as mediator-fact finder, conducted a preliminary hearing.
He found that an amicable settlement was not possible because the San Miguel Corporation insisted on the
dismissal of Yanglay.
The case was scheduled for mediation on January 10, 1973. The record does not show what transpired on that
date. On January 12, 1973 the corporation filed a memorandum wherein it contended (1) that Yanglay's case was
outside the NLRC's jurisdiction which extends only to disputes and grievances occurring after September 21,
1972; (2) that Yanglay's dismissal was justified and (3) that, if the dismissal was not justified, his remedy was to
ask for separation pay under the Termination Pay Law.
Yanglay did not submit any memorandum. On February 21, 1973 the mediator submitted a report wherein he
concluded that Yanglay "was dismissed on a shaky ground" because the employer had not shown any violation of
any company rule or regulation and that the persons to be penalized should be those who sold or delivered the
drugs to Yanglay.
Cruz admitted that the San Miguel Corporation "had not committed unfair labor practice". He recommended
Yanglay's reinstatement with back wages from July 19,1972 (when he was dismissed) up to the date of his
reinstatement.
The NLRC composed of Amado G. Inciong, Diego P. Atienza and Ricardo C. Castro, in its aforementioned
decision adopted the report of Cruz in its entirety.
The San Miguel Corporation moved for the reconsideration of the decision on the ground that it was premature
because section 14 of the NLRC's Rules and Regulations requires that the mediator's factfinding report be passed
upon by an arbitrator. The motion was treated as an appeal by the Secretary of Labor. As already stated, he denied
it in his resolution dated July 9, 1974. Thereafter, the company, instituted this certiorari proceeding.
Yanglay raised a jurisdictional question which was not brought up by respondent public officials. He contends that
this Court has no jurisdiction to review the decisions of the NLRC and the Secretary of Labor "under the principle
of separation of powers" and that judicial review is not provided for in Presidential Decree No. 21.
That contention is a flagrant error. "It is generally understood that as to administrative agencies exercising quasi-
judicial or legislative power there is an underlying power in the courts to scrutinize the acts of such agencies on
questions of law and jurisdiction even though no right of review is given by statute" (73 C.J.S. 506, note 56).
"The purpose of judicial review is to keep the administrative agency within its jurisdiction and protect substantial
rights of parties affected by its decisions" (73 C.J.S. 507, Sec. 165). It is part of the system of checks and balances
which restricts the separation of powers and forestalls arbitrary and unjust adjudications.
Judicial review is proper in case of lack of jurisdiction, grave abuse of discretion, error of law, fraud or collusion
(Timbancaya vs. Vicente, 62 O.G. 9424; Macatangay vs. Secretary of Public Works and Communications, 63
O.G. 11236; Ortua vs. Singson Encarnacion, 59 Phil. 440).
"The courts may declare an action or resolution of an administrative authority to be illegal (1) because it violates
or fails to comply with some mandatory provision of the law or (2) because it is corrupt, arbitrary or capricious"
(Borromeo vs. City of Manila and Rodriguez Lanuza, 62 Phil. 512, 516; Villegas vs. Auditor General, L-21352,
November 29, 1966, 18 SCRA 877, 891).
The San Miguel Corporation contends that the NLRC gravely abused its discretion and denied the employer due
process of law when it decided the case without giving the employer a chance to submit the case for arbitration, as
provided in section 4 of Presidential Decree No. 21 and in section 14 of its Rules and Regulations.
The Solicitor General counters that there was no denial of due process because the NLRC and the mediator
decided the case on the basis of the investigation which was conducted by a lawyer of the company pursuant to the
grievance procedure indicated in the collective bargaining agreement.
The Solicitor General made the following cogent and judicious observations to support his contention that the San
Miguel Corporation was not denied due process:têñ.£îhqwâ£
1. ... in said grievance procedure, a lengthy recorded investigation was conducted wherein the
parties were duly represented by their respective counsel and wherein the petitioner herein was
granted every opportunity to present its evidence and cross-examine witnesses in support of its
then contemplated and consequent action in the premises; that after the filing of the complaint
by the private respondent, a preliminary factfinding was had with both parties present and/or
duly represented wherein a preliminary factfinding report was rendered stating that the
respondents (petitioners herein) were adamant in their stand regarding complainants dismissal
and that the possibility of settlement between the parties was ruled out ...; that thereafter,
mediation and further factfinding were held at which hearings petitioners, instead of
presenting their evidence, opted to merely file a memorandum while complainant (private
respondent herein) elected to submit the records of the proceedings in the grievance stage; that
thereafter, a mediation Factfinding Report was rendered on February 21, 1973, on the basis of
which a decision was rendered by the respondent NLRC on February 27, 1973.
77 | AEP
xxx xxx xxx
3. It is evident from the report of the mediator factfinder that he had considered all the facts
and evidence presented by both parties. Likewise indubitably clear is the fact that the parties
no longer intended to present further evidence on the matter. Faced therefore with the
foregoing circumstances, the NLRC was left without recourse but to exercise its power of
arbitration as per section 4 of Presidential Decree No. 21 and after assessing the evidence
before it rendered its decision thereunder. So should it be in cases of this nature, since it would
have been futile to further prolong the proceedings by again setting the case for hearing when
the parties themselves no longer intended to present further evidence. In short, while the action
of the NLRC may have been summary, it cannot and does not constitute a denial of due
process.
The ultimate issue in this case is not whether the San Miguel Corporation was denied due process because the
NLRC did not adhere strictly to the procedure for arbitration. It is undeniable that the company was given a
chance to be heard. To refer now this case to an arbitrator would only unduly delay its final disposition.
The real issue is whether, considering the undisputed facts that Yanglay bought from his co-workers drugs worth
P267 which were given to them gratis, which they were not supposed to sell and which, after seizure from
Yanglay, were returned to the company, his dismissal from employment was justified.
That was the first time he was caught trafficking in company-supplied drugs. He confessed that necessity forced
him to buy the drugs. He promised not to do it again. His impression was that, like the rice rations whose sale was
tolerated by the company officials, he could engage in the buy-and-sell of the drugs. He argued that his co-
workers, who gave or sold to him the drugs, were equally culpable in sabotaging the company's practice of
rendering free medical assistance to its employees.
The misconduct of employees or workers in misrepresenting to the company that they needed medicines when in
fact their purpose was to sell the same should not be tolerated. For such misrepresentations or deceptions,
appropriate disciplinary action should be taken against them. On the other hand, in view of the high cost of living
and the difficulties of supporting a family it is not surprising that members of the wage-earning class would do
anything possible to augment their small income.(Compare with People vs. Macbul, 74 Phil. 436).
Taking into account the circumstances of the case, particularly Yanglay's initial attitude of confessing that his
error was dictated by necessity and his promise not to repeat the same mistake, we are of the opinion that his
dismissal was a drastic punishment. He should be reinstated but without back wages because the company acted in
good faith in dismissing him (Findlay Millar Timber Company vs. Philippine Land-Air-Sea Labor Union, L-18217
and L-18222, September 29, 1962, 6 SCRA 226). He has been sufficiently penalized by the loss of his wages from
July 19, 1972 up to this time.
WHEREFORE, the resolution of the Secretary of Labor and the decision of the defunct National Labor Relations
Commission are modified in the sense that Gregorio Yanglay, Jr. should be reinstated without back wages. Costs
against the petitioners.
SO ORDERED.