nine (9) directors.

Petitioner was elected Expocorp Chief petitioner to submit his counter-affidavit and those of his
G.R. No. 145368 April 12, 2002 Executive Officer. witnesses.
SALVADOR H. LAUREL, petitioner, On August 5, 1998, Senator Ana Dominique Coseteng delivered a On April 24, 2000, petitioner filed with the Office of the
vs. privilege speech in the Senate denouncing alleged anomalies in Ombudsman a Motion to Dismiss questioning the jurisdiction of
HON. ANIANO A. DESIERTO, in his capacity as the construction and operation of the Centennial Exposition said office.
Ombudsman, respondent. Project at the Clark Special Economic Zone. Upon motion of
Senator Franklin Drilon, Senator Coseteng’s privilege speech was In an Order dated June 13, 2000, the Ombudsman denied
KAPUNAN, J.: petitioner’s motion to dismiss.
referred to the Committee on Accountability of Public Officers and
On June 13, 1991, President Corazon C. Aquino issued Investigation (The Blue Ribbon Committee) and several other On July 3, 2000, petitioner moved for a reconsideration of the
Administrative Order No. 223 "constituting a Committee for the Senate Committees for investigation. June 13, 2000 Order but the motion was denied in an Order dated
preparation of the National Centennial Celebration in 1998." The October 5, 2000.
Committee was mandated "to take charge of the nationwide On February 24, 1999, President Joseph Estrada issued
preparations for the National Celebration of the Philippine Administrative Order No. 35, creating an ad hoc and independent On October 25, 2000, petitioner filed the present petition for
Centennial of the Declaration of Philippine Independence and the citizens’ committee to investigate all the facts and circumstances certiorari.
Inauguration of the Malolos Congress."1 surrounding the Philippine centennial projects, including its
component activities. Former Senator Rene A.V. Saguisag was On November 14, 2000, the Evaluation and Preliminary
Subsequently, President Fidel V. Ramos issued Executive Order appointed to chair the Committee. Investigation Bureau issued a resolution finding "probable cause
No. 128, "reconstituting the Committee for the preparation of the to indict respondents SALVADOR H. LAUREL and TEODORO Q.
National Centennial Celebrations in 1988." It renamed the On March 23, 1999, the Senate Blue Ribbon Committee filed with PEÑA before the Sandiganbayan for conspiring to violate Section
Committee as the "National Centennial Commission." Appointed the Secretary of the Senate its Committee Final Report No. 30 3(e) of Republic Act No. 3019, in relation to Republic Act No.
to chair the reconstituted Commission was Vice-President dated February 26, 1999. Among the Committee’s 1594." The resolution also directed that an information for
Salvador H. Laurel. Presidents Diosdado M. Macapagal and recommendations was "the prosecution by the Ombudsman/DOJ violation of the said law be filed against Laurel and Peña.
Corazon C. Aquino were named Honorary Chairpersons.2 of Dr. Salvador Laurel, chair of NCC and of EXPOCORP for Ombudsman Aniano A. Desierto approved the resolution with
violating the rules on public bidding, relative to the award of respect to Laurel but dismissed the charge against Peña.
Characterized as an "i body," the existence of the Commission centennial contracts to AK (Asia Construction & Development
"shall terminate upon the completion of all activities related to the Corp.); for exhibiting manifest bias in the issuance of the NTP In a Resolution dated September 24, 2001, the Court issued a
Centennial Celebrations."3 Like its predecessor Committee, the (Notice to Proceed) to AK to construct the FR (Freedom Ring) temporary restraining order, commanding respondents to desist
Commission was tasked to "take charge of the nationwide even in the absence of a valid contract that has caused material from filing any information before the Sandiganbayan or any court
preparations for the National Celebration of the Philippine injury to government and for participating in the scheme to against petitioner for alleged violation of Section 3(e) of the Anti-
Centennial of the Declaration of Philippine Independence and the preclude audit by COA of the funds infused by the government for Graft and Corrupt Practices Act.
Inauguration of the Malolos Congress." the implementation of the said contracts all in violation… of the
anti-graft law."5 On November 14, 2001, the Court, upon motion of petitioner,
Per Section 6 of the Executive Order, the Commission was also heard the parties in oral argument.
charged with the responsibility to "prepare, for approval of the Later, on November 5, 1999, the Saguisag Committee issued its
President, a Comprehensive Plan for the Centennial Celebrations own report. It recommended "the further investigation by the Petitioner assails the jurisdiction of the Ombudsman on the
within six (6) months from the effectivity of" the Executive Order. Ombudsman, and indictment, in proper cases of," among others, ground that he is not a public officer because:
NCC Chair Salvador H. Laurel for violations of Section 3(e) of A.
E.O. No. 128 also contained provisions for staff support and R.A. No. 3019, Section 4(a) in relation to Section 11 of R.A. No.
funding: 6713, and Article 217 of the Revised Penal Code. EXPOCORP, THE CORPORATION CHAIRED BY PETITIONER
Sec. 3. The Commission shall be provided with LAUREL WHICH UNDERTOOK THE FREEDOM RING
The Reports of the Senate Blue Ribbon and the Saguisag PROJECT IN CONNECTION WITH WHICH VIOLATIONS OF
technical and administrative staff support by a Committee were apparently referred to the Fact-finding and
Secretariat to be composed of, among others, detailed THE ANTI-GRAFT AND CORRUPT PRACTICES WERE
Intelligence Bureau of the Office of the Ombudsman. On January ALLEGEDLY COMMITTED, WAS A PRIVATE CORPORATION,
personnel from the Presidential Management Staff, the 27, 2000, the Bureau issued its Evaluation Report,
National Commission for Culture and the Arts, and the NOT A GOVERNMENT-OWNED OR CONTROLLED
recommending: CORPORATION.
National Historical Institute. Said Secretariat shall be
headed by a full time Executive Director who shall be 1. that a formal complaint be filed and preliminary B.
designated by the President. investigation be conducted before the Evaluation and
Preliminary Investigation Bureau (EPIB), Office of the THE NATIONAL CENTENNIAL COMMISSION (NCC) WAS NOT
Sec. 4. The Commission shall be funded with an initial Ombudsman against former NCC and EXPOCORP A PUBLIC OFFICE.
budget to be drawn from the Department of Tourism chair Salvador H. Laurel, former EXPOCORP President
and the president’s Contingent Fund, in an amount to Teodoro Q. Peña and AK President Edgardo H. C.
be recommended by the Commission, and approved by Angeles for violation of Sec. 3(e) and (g) of R.A. No.
the President. Appropriations for succeeding years shall PETITIONER, BOTH AS CHAIRMAN OF THE NCC AND OF
3019, as amended in relation to PD 1594 and COA EXPOCORP WAS NOT A "PUBLIC OFFICER" AS DEFINED
be incorporated in the budget of the Office of the Rules and Regulations;
President. UNDER THE ANTI-GRAFT & CORRUPT PRACTICES ACT.7
2. That the Fact Finding and Intelligence Bureau of this In addition, petitioner in his reply8 invokes this Court’s decision
Subsequently, a corporation named the Philippine Centennial Office, act as the nominal complainant.6
Expo ’98 Corporation (Expocorp) was created.4Petitioner was in Uy vs. Sandiganbayan,9 where it was held that the jurisdiction
among the nine (9) Expocorp incorporators, who were also its first In an Order dated April 10, 2000, Pelagio S. Apostol, OIC-Director of the Ombudsman was limited to cases cognizable by the
of the Evaluation and Preliminary Investigation Bureau, directed Sandiganbayan, i.e., over public officers of Grade 27 and higher.
As petitioner’s position was purportedly not classified as Grade 27
or higher, the Sandiganbayan and, consequently, the and prosecutory power of the Ombudsman to such Having disposed of this contention, we proceed to the principal
Ombudsman, would have no jurisdiction over him. cases. grounds upon which petitioner relies. We first address the
argument that petitioner, as Chair of the NCC, was not a public
This last contention is easily dismissed. In the Court’s decision in Section 15 of RA 6770 gives the Ombudsman primary officer.
Uy, we held that "it is the prosecutor, not the Ombudsman, who jurisdiction over cases cognizable by the
has the authority to file the corresponding information/s against Sandiganbayan. The law defines such primary The Constitution10 describes the Ombudsman and his Deputies as
petitioner in the regional trial court. The Ombudsman exercises jurisdiction as authorizing the Ombudsman "to take "protectors of the people," who "shall act promptly on complaints
prosecutorial powers only in cases cognizable by the over, at any stage, from any investigatory agency of the filed in any form or manner against public officials or employees
Sandiganbayan." government, the investigation of such cases." The grant of the government, or any subdivision, agency or instrumentality
of this authority does not necessarily imply the thereof, including government-owned or controlled corporations."
In its Resolution of February 22, 2000, the Court expounded: exclusion from its jurisdiction of cases involving public Among the awesome powers, functions, and duties vested by the
The clear import of such pronouncement is to recognize officers and employees by other courts. The exercise Constitution11 upon the Office of the Ombudsman is to
the authority of the State and regular provincial and city by the Ombudsman of his primary jurisdiction over "[i]nvestigate… any act or omission of any public official,
prosecutors under the Department of Justice to have cases cognizable by the Sandiganbayan is not employee, office or agency, when such act or omission appears
control over prosecution of cases falling within the incompatible with the discharge of his duty to to be illegal, unjust, improper, or inefficient."
jurisdiction of the regular courts. The investigation and investigate and prosecute other offenses committed by
public officers and employees. Indeed, it must be The foregoing constitutional provisions are substantially
prosecutorial powers of the Ombudsman relate to reproduced in R.A. No. 6770, otherwise known as the
cases rightfully falling within the jurisdiction of the stressed that the powers granted by the legislature to
the Ombudsman are very broad and encompass all "Ombudsman Act of 1989." Sections 13 and 15(1) of said law
Sandiganbayan under Section 15 (1) of R.A. 6770 ("An respectively provide:
Act Providing for the Functional and Structural kinds of malfeasance, misfeasance and non-feasance
Organization of the Office of the Ombudsman, and for committed by public officers and employees during their SEC. 13. Mandate. – The Ombudsman and his
other purposes") which vests upon the Ombudsman tenure of office. Deputies, as protectors of the people shall act promptly
"primary jurisdiction over cases cognizable by the Moreover, the jurisdiction of the Office of the on complaints file in any form or manner against
Sandiganbayan…" And this is further buttressed by Ombudsman should not be equated with the limited officers or employees of the Government, or of any
Section 11 (4a) of R.A. 6770 which emphasizes that the authority of the Special Prosecutor under Section 11 of subdivision, agency or instrumentality thereof, including
Office of the Special Prosecutor shall have the power to RA 6770. The Office of the Special Prosecutor is government-owned or controlled corporations, and
"conduct preliminary investigation and prosecute merely a component of the Office of the Ombudsman enforce their administrative, civil and criminal liability in
criminal cases within the jurisdiction of the and may only act under the supervision and control and every case where the evidence warrants in order to
Sandiganbayan." Thus, repeated references to the upon authority of the Ombudsman. Its power to conduct promote efficient service by the Government to the
Sandiganbayan’s jurisdiction clearly serve to limit the preliminary investigation and to prosecute is limited people.
Ombudsman’s and Special Prosecutor’s authority to to criminal cases within the jurisdiction of the
cases cognizable by the Sandiganbayan. [Emphasis in SEC. 15. Powers, Functions and Duties. – The Office of
Sandiganbayan. Certainly, the lawmakers did not intend the Ombudsman shall have the following powers,
the original.] to confine the investigatory and prosecutory power of functions and duties:
The foregoing ruling in Uy, however, was short-lived. Upon motion the Ombudsman to these types of cases. The
for clarification by the Ombudsman in the same case, the Court Ombudsman is mandated by law to act on all (1) Investigate and prosecute on its own or on
set aside the foregoing pronouncement in its Resolution dated complaints against officers and employees of the complaint by any person, any act or omission of any
March 20, 2001. The Court explained the rationale for this government and to enforce their administrative, civil public officer or employee, office or agency, when such
reversal: and criminal liability in every case where the evidence act or omission appears to be illegal unjust, improper or
warrants. To carry out this duty, the law allows him to inefficient. It has primary jurisdiction over cases
The power to investigate and to prosecute granted by utilize the personnel of his office and/or designate any cognizable by the Sandiganbayan and, in the exercise
law to the Ombudsman is plenary and unqualified. It fiscal, state prosecutor or lawyer in the government of this primary jurisdiction, it may take over, at any
pertains to any act or omission of any public officer or service to act as special investigator or prosecutor to stage, from any investigatory agency of Government,
employee when such act or omission appears to be assist in the investigation and prosecution of certain the investigation of such cases;
illegal, unjust, improper or inefficient. The law does not cases. Those designated or deputized to assist him
make a distinction between cases cognizable by the work under his supervision and control. The law x x x.
Sandiganbayan and those cognizable by regular courts. likewise allows him to direct the Special Prosecutor to The coverage of the law appears to be limited only by Section 16,
It has been held that the clause "any illegal act or prosecute cases outside the Sandiganbayan’s in relation to Section 13, supra:
omission of any public official" is broad enough to jurisdiction in accordance with Section 11 (4c) of RA
embrace any crime committed by a public officer or 6770. SEC 16. Applicability. – The provisions of this Act shall
employee. apply to all kinds of malfeasance, misfeasance and
The prosecution of offenses committed by public non-feasance that have been committed by any officer
The reference made by RA 6770 to cases cognizable officers and employees is one of the most important or employee as mentioned in Section 13 hereof, during
by the Sandiganbayan, particularly in Section 15(1) functions of the Ombudsman. In passing RA 6770, the his tenure of office.
giving the Ombudsman primary jurisdiction over cases Congress deliberately endowed the Ombudsman with
cognizable by the Sandiganbayan, and Section 11(4) such power to make him a more active and effective In sum, the Ombudsman has the power to investigate any
granting the Special Prosecutor the power to conduct agent of the people in ensuring accountability in public malfeasance, misfeasance and non-feasance by a public officer
preliminary investigation and prosecute criminal cases office. A review of the development of our Ombudsman or employee of the government, or of any subdivision, agency or
within the jurisdiction of the Sandiganbayan, should not law reveals this intent. [Emphasis in the original.] instrumentality thereof, including government-owned or controlled
be construed as confining the scope of the investigatory corporations.12
Neither the Constitution nor the Ombudsman Act of 1989, Whereas, the birth of the Republic of the Philippines is arrangements) to ensure the preservation and
however, defines who public officers are. A definition of public to be celebrated in 1998, and the centennial presents maintenance of the historical sites and structures;
officers cited in jurisprudence13 is that provided by Mechem, a an important vehicle for fostering nationhood and a
recognized authority on the subject: strong sense of Filipino identity; (f) To call upon any government agency or
instrumentality and corporation, and to invite private
A public office is the right, authority and duty, created Whereas, the centennial can effectively showcase individuals and organizations to assist it in the
and conferred by law, by which, for a given period, Filipino heritage and thereby strengthen Filipino values; performance of its tasks; and,
either fixed by law or enduring at the pleasure of the
creating power, an individual is invested with some Whereas, the success of the Centennial Celebrations (g) Submit regular reports to the President on the plans,
portion of the sovereign functions of the government, to may be insured only through long-range planning and programs, projects, activities as well as the status of the
be exercised by him for the benefit of the public. The continuous developmental programming; preparations for the Celebration.18
individual so invested is a public officer.14 Whereas, the active participation of the private sector in It bears noting the President, upon whom the executive power is
The characteristics of a public office, according to Mechem, all areas of special expertise and capability, particularly vested,19 created the NCC by executive order. Book III (Office of
include the delegation of sovereign functions, its creation by law in communication and information dissemination, is the President), Chapter 2 (Ordinance Power), Section 2 describes
and not by contract, an oath, salary, continuance of the position, necessary for long-range planning and continuous the nature of executive orders:
scope of duties, and the designation of the position as an office. 15 developmental programming;
SEC. 2. Executive Orders. – Acts of the President
Petitioner submits that some of these characteristics are not Whereas, there is a need to create a body which shall providing for rules of a general or permanent character
present in the position of NCC Chair, namely: (1) the delegation of initiate and undertake the primary task of harnessing in implementation or execution of constitutional or
sovereign functions; (2) salary, since he purportedly did not the multisectoral components from the business, statutory powers shall be promulgated in executive
receive any compensation; and (3) continuance, the tenure of the cultural, and business sectors to serve as effective orders. [Underscoring ours.]
NCC being temporary. instruments from the launching and overseeing of this
long-term project; Furthermore, the NCC was not without a role in the country’s
Mechem describes the delegation to the individual of some of the economic development, especially in Central Luzon. Petitioner
sovereign functions of government as "[t]he most important x x x. himself admitted as much in the oral arguments before this Court:
characteristic" in determining whether a position is a public office E.O. No. 128, reconstituting the Committee for the National MR. JUSTICE REYNATO S. PUNO:
or not. Centennial Celebrations in 1998, cited the "need to strengthen the
said Committee to ensure a more coordinated and synchronized And in addition to that expounded by Former
The most important characteristic which distinguishes President Ramos, don’t you agree that the
an office from an employment or contract is that the celebrations of the Philippine Centennial and wider participation
from the government and non-government or private task of the centennial commission was also
creation and conferring of an office involves a to focus on the long term over all socio
delegation to the individual of some of the sovereign organizations." It also referred to the "need to rationalize the
relevance of historical links with other countries." economic development of the zone and
functions of government, to be exercised by him for the Central Luzon by attracting investors in the
benefit of the public; – that some portion of the The NCC was precisely created to execute the foregoing policies area because of the eruption of Mt. Pinatubo.
sovereignty of the country, either legislative, executive and objectives, to carry them into effect. Thus, the Commission
or judicial, attaches, for the time being, to be exercised was vested with the following functions: FORMER VICE PRESIDENT SALVADOR H. LAUREL:
for the public benefit. Unless the powers conferred are
of this nature, the individual is not a public officer.16 (a) To undertake the overall study, conceptualization, I am glad Your Honor touched on that
formulation and implementation of programs and because that is something I wanted to touch
Did E.O. 128 delegate the NCC with some of the sovereign projects on the utilization of culture, arts, literature and on by lack of material time I could not but that
functions of government? Certainly, the law did not delegate upon media as vehicles for history, economic endeavors, and is a very important point. When I was made
the NCC functions that can be described as legislative or judicial. reinvigorating the spirit of national unity and sense of Chairman I wanted the Expo to be in
May the functions of the NCC then be described as executive? accomplishment in every Filipino in the context of the Batangas because I am a Batangeño but
Centennial Celebrations. In this regard, it shall include a President Ramos said Mr. Vice President the
We hold that the NCC performs executive functions. The Central Luzon is suffering, suffering because
executive power "is generally defined as the power to enforce and Philippine National Exposition ’98 within Metro Manila,
the original eight provinces, and Clark Air Base as its of the eruption of Mt. Pinatubo let us try to
administer the laws. It is the power of carrying the laws into catalize [sic] economic recovery in that area
practical operation and enforcing their due observance."17 The major venues;
by putting this Expo in Clark Field and so it
executive function, therefore, concerns the implementation of the (b) To act as principal coordinator for all the activities was done I agreed and Your Honor if I may
policies as set forth by law. related to awareness and celebration of the Centennial; also mention we wanted to generate
The Constitution provides in Article XIV (Education, Science and employment aside from attracting business
(c) To serve as the clearing house for the preparation investments and employment. And the
Technology, Arts, Culture, and Sports) thereof: and dissemination of all information about the plans and Estrada administration decided to junk this
Sec. 15. Arts and letters shall enjoy the patronage of events for the Centennial Celebrations; project there 48, 40 thousand people who lost
the State. The State shall conserve, promote, and (d) To constitute working groups which shall undertake job, they were employed in Expo. And our
popularize the nation’s historical and cultural heritage the implementation of the programs and projects; target was to provide 75 thousand jobs. It
and resources, as well as artistic creations. would have really calibrated, accelerated the
(e) To prioritize the refurbishment of historical sites and development of Central Luzon. Now, I think
In its preamble, A.O. No. 223 states the purposes for the creation structures nationwide. In this regard, the Commission they are going back to that because they had
of the Committee for the National Centennial Celebrations in shall formulate schemes (e.g. lease-maintained-and- the airport and there are plan to revive the
1998: transfer, build-operate-transfer, and similar
 Expo site into key park which was the original defense that the city was engaged in the performance Oh, yes, certainly the State is interested in the unity of
plan. of a public governmental duty from which it received no the people, we wanted to rekindle the love for freedom,
pecuniary benefit and for negligence in the performance love for country, that is the over-all goal that has to
There can hardly be any dispute that the promotion of of which no statutory liability is imposed. This demurrer make everybody feel proud that he is a Filipino, proud
industrialization and full employment is a fundamental state was sustained by the Superior Court of New Haven of our history, proud of what our forefather did in their
policy.20 Country. Plaintiff sought to amend his complaint to time. x x x.
Petitioner invokes the ruling of this Court in Torio vs. allege that the celebration was for the corporate
advantage of the city. This was denied. In affirming the Clearly, the NCC performs sovereign functions. It is, therefore, a
Fontanilla21 that the holding by a municipality of a town fiesta is a public office, and petitioner, as its Chair, is a public officer.
proprietary rather than a governmental function. Petitioner argues order, the Supreme Court of Errors of Connecticut
that the "holding of a nationwide celebration which marked the held inter alia: That petitioner allegedly did not receive any compensation during
nation’s 100th birthday may be likened to a national fiesta which Municipal corporations are exempt from liability for the his tenure is of little consequence. A salary is a usual but not a
involved only the exercise of the national government’s negligent performance of purely public governmental necessary criterion for determining the nature of the position. It is
proprietary function."22 In Torio, we held: duties, unless made liable by statute…. not conclusive. The salary is a mere incident and forms no part of
the office. Where a salary or fees is annexed, the office is
[Section 2282 of the Chapter on Municipal Law of the A municipality corporation, which under permissive provided for it is a naked or honorary office, and is supposed to
Revised Administrative Code] simply gives authority to authority of its charter or of statute, conducted a public be accepted merely for the public good.23 Hence, the office of
the municipality to [celebrate] a yearly fiesta but it does Fourth of July celebration, including a display of petitioner as NCC Chair may be characterized as an honorary
not impose upon it a duty to observe one. Holding a fireworks, and sent up a bomb intended to explode in office, as opposed to a lucrative office or an office of profit, i.e.,
fiesta even if the purpose is to commemorate a the air, but which failed to explode until it reached the one to which salary, compensation or fees are attached.24 But it is
religious or historical event of the town is in essence an ground, and then killed a spectator, was engaged in the a public office, nonetheless.
act for the special benefit of the community and not for performance of a governmental duty. (99 A.R. 51)
the general welfare of the public performed in Neither is the fact that the NCC was characterized by E.O. No.
pursuance of a policy of the state. The mere fact that This decision was concurred in by three Judges while 128 as an "ad-hoc body" make said commission less of a public
the celebration, as claimed, was not to secure profit or two dissented. office.
gain but merely to provide entertainment to the town
inhabitants is not a conclusive test. For instance, the At any rate the rationale of the Majority Opinion is The term office, it is said, embraces the idea of tenure
maintenance of parks is not a source of income for the evident from [this] excerpt: and duration, and certainly a position which is merely
town, nonetheless it is [a] private undertaking as temporary and local cannot ordinarily be considered an
"July 4th, when that date falls upon Sunday, July 5th, is office. "But," says Chief Justice Marshall, "if a duty be a
distinguished from the maintenance of public schools, made a public holiday, called Independence Day, by
jails, and the like which are for public service. continuing one, which is defined by rules prescribed by
our statutes. All or nearly all of the other states have the government and not by contract, which an individual
As stated earlier, there can be no hard and fast rule for similar statutes. While there is no United States statute is appointed by government to perform, who enters on
purposes of determining the true nature of an making a similar provision, the different departments of the duties pertaining to his station without any contract
undertaking or function of a municipality; the the government recognize, and have recognized since defining them, if those duties continue though the
surrounding circumstances of a particular case are to the government was established, July 4th as a national person be changed, -- it seems very difficult to
be considered and will be decisive. The basic element, holiday. Throughout the country it has been recognized distinguish such a charge or employment from an office
however beneficial to the public the undertaking may and celebrated as such. These celebrations, calculated of the person who performs the duties from an officer."
be, is that it is government in essence, otherwise, the to entertain and instruct the people generally and to
function becomes private or propriety in character. arouse and stimulate patriotic sentiments and love of At the same time, however, this element of continuance
Easily, no governmental or public policy of the state is country, frequently take the form of literary exercises can not be considered as indispensable, for, if the other
involved in the celebration of a town fiesta. consisting of patriotic speeches and the reading of the elements are present "it can make no difference," says
Constitution, accompanied by a musical program Pearson, C.J., "whether there be but one act or a series
Torio, however, did not intend to lay down an all-encompassing including patriotic air sometimes preceded by the firing of acts to be done, -- whether the office expires as soon
doctrine. Note that the Court cautioned that "there can be no hard of cannon and followed by fireworks. That such as the one act is done, or is to be held for years or
and fast rule for purposes of determining the true nature of an celebrations are of advantage to the general public and during good behavior."25
undertaking or function of a municipality; the surrounding their promotion a proper subject of legislation can
circumstances of a particular case are to be considered and will hardly be questioned. x x x" Our conclusion that petitioner is a public officer finds support in In
be decisive." Thus, in footnote 15 of Torio, the Court, citing an Re Corliss.26 There the Supreme Court of Rhode Island ruled that
American case, illustrated how the "surrounding circumstances Surely, a town fiesta cannot compare to the National Centennial the office of Commissioner of the United States Centennial
plus the political, social, and cultural backgrounds" could produce Celebrations. The Centennial Celebrations was meant to Commission is an "office of trust" as to disqualify its holder as
a conclusion different from that in Torio: commemorate the birth of our nation after centuries of struggle elector of the United States President and Vice-President. (Under
against our former colonial master, to memorialize the liberation Article II of the United States Constitution, a person holding an
We came across an interesting case which shows that of our people from oppression by a foreign power. 1998 marked office of trust or profit under the United States is disqualified from
surrounding circumstances plus the political, social, and 100 years of independence and sovereignty as one united nation. being appointed an elector.)
cultural backgrounds may have a decisive bearing on The Celebrations was an occasion to reflect upon our history and
this question. The case of Pope v. City of New Haven, reinvigorate our patriotism. As A.O. 223 put it, it was a "vehicle for x x x. We think a Commissioner of the United States
et al. was an action to recover damages for personal fostering nationhood and a strong sense of Filipino identity," an Centennial Commission holds an office of trust under
injuries caused during a Fourth of July fireworks display opportunity to "showcase Filipino heritage and thereby strengthen the United States, and that he is therefore disqualified
resulting in the death of a bystander alleged to have Filipino values." The significance of the Celebrations could not for the office of elector of President and Vice-President
been caused by defendants’ negligence. The have been lost on petitioner, who remarked during the hearing: of the United States.
defendants demurred to the complaint invoking the
The commission was created under a statute of the are, properly speaking, officers, and that the places It is clear from Section 2 (b), above, that the definition of a "public
United States approved March 3, 1871. That statute which they hold are offices. It appears, moreover, that officer" is expressly limited to the application of R.A. No. 3019.
provides for the holding of an exhibition of American they were originally regarded as officers by Congress; Said definition does not apply for purposes of determining the
and foreign arts, products, and manufactures, "under for the act under which they were appointed declares, Ombudsman’s jurisdiction, as defined by the Constitution and the
the auspices of the government of the United States," section 7, that "no compensation for services shall be Ombudsman Act of 1989.
and for the constitution of a commission, to consist of paid to the commissioners or other officers, provided for
more than one delegate from each State and from each in this act, from the treasury of the United States." The Moreover, the question of whether petitioner is a public officer
Territory of the United States, "whose functions shall only other officers provided for were the "alternates" under the Anti-Graft and Corrupt Practices Act involves the
continue until close of the exhibition," and "whose duty appointed to serve as commissioners when the appreciation of evidence and interpretation of law, matters that
it shall be to prepare and superintend the execution of commissioners were unable to attend. are best resolved at trial.
the plan for holding the exhibition." Under the statute To illustrate, the use of the term "includes" in Section 2 (b)
the commissioners are appointed by the President of Having arrived at the conclusion that the NCC performs executive
functions and is, therefore, a public office, we need no longer indicates that the definition is not restrictive.28 The Anti-Graft and
the United States, on the nomination of the governor of Corrupt Practices Act is just one of several laws that define
the States and Territories respectively. Various duties delve at length on the issue of whether Expocorp is a private or a
public corporation. Even assuming that Expocorp is a private "public officers." Article 203 of the Revised Penal Code, for
were imposed upon the commission, and under the example, provides that a public officer is:
statute provision was to be made for it to have corporation, petitioner’s position as Chief Executive Officer (CEO)
exclusive control of the exhibit before the President of Expocorp arose from his Chairmanship of the NCC. x x x any person who, by direct provision of law,
should announce, by proclamation, the date and place Consequently, his acts or omissions as CEO of Expocorp must be popular election or appointment by competent authority,
of opening and holding the exhibition. By an act of viewed in the light of his powers and functions as NCC Chair.27 takes part in the performance of public functions in the
Congress approved June 1st, 1872, the duties and Finally, it is contended that since petitioner supposedly did not Government of Philippines, or performs in said
functions of the commission were further increased and receive any compensation for his services as NCC or Expocorp Government or in any of its branches public duties as
defined. That act created a corporation, called "The Chair, he is not a public officer as defined in Republic Act No. an employee, agent or subordinate official, of any rank
Centennial Board of Finance," to cooperate with the 3019 (The Anti-Graft and Corrupt Practices Act) and is, therefore, or class.
commission and to raise and disburse the funds. It was beyond the jurisdiction of the Ombudsman.
to be organized under the direction of the commission. Section 2 (14) of the Introductory Provisions of the Administrative
The seventh section of the act provides "that the Respondent seeks to charge petitioner with violation of Section 3 Code of 1987,29 on the other hand, states:
grounds for exhibition shall be prepared and the (e) of said law, which reads: Officer – as distinguished from "clerk" or "employee",
buildings erected by the corporation, in accordance with refers to a person whose duties not being of a clerical
plans which shall have been adopted by the United SEC. 3. Corrupt practices of public officers. – In
addition to acts or omissions of public officers already or manual nature, involves the exercise of discretion in
States Centennial Commission; and the rules and the performance of the functions of the government.
regulations of said corporation, governing rates for penalized by existing law, the following shall constitute
corrupt practices of any public officer and are hereby When used with reference to a person having authority
entrance and admission fees, or otherwise affecting the to do a particular act or perform a particular person in
rights, privileges, or interests of the exhibitors, or of the declared to be unlawful:
the exercise of governmental power, "officer" includes
public, shall be fixed and established by the United xxx any government employee, agent or body having
States Centennial Commission; and no grant conferring authority to do the act or exercise that function.
rights or privileges of any description connected with (e) Causing any undue injury to any party, including the
said grounds or buildings, or relating to said exhibition Government, or giving any private party any It bears noting that under Section 3 (b) of Republic Act No. 6713
or celebration, shall be made without the consent of the unwarranted benefits, advantage or preference in the (The Code of Conduct and Ethical Standards for Public Officials
United States Centennial Commission, and said discharge of his official, administrative or judicial and Employees), one may be considered a "public official"
commission shall have power to control, change, or functions through manifest partiality, evident bad faith whether or not one receives compensation, thus:
revoke all such grants, and shall appoint all judges and or gross inexcusable negligence. This provision shall
examiners and award all premiums." The tenth section apply to officers and employees of offices or "Public Officials" include elective and appointive
government corporations charged with the grant of officials and employees, permanent or temporary,
of the act provides that "it shall be the duty of the
United States Centennial Commission to supervise the licenses or permits or other concessions. whether in the career or non-career service including
closing up of the affairs of said corporation, to audit its military and police personnel, whether or not they
A "public officer," under R.A. No. 3019, is defined by Section 2 of receive compensation, regardless of amount.
accounts, and submit in a report to the President of the
United States the financial results of the centennial said law as follows:
Which of these definitions should apply, if at all?
exhibition." SEC. 2. Definition of terms. – As used in this Act, the
term – Assuming that the definition of public officer in R.A. No. 3019 is
It is apparent from this statement, which is but partial, exclusive, the term "compensation," which is not defined by said
that the duties and functions of the commission were xxx law, has many meanings.
various, delicate, and important; that they could be
successfully performed only by men of large experience (b) "Public officer" includes elective and appointive Under particular circumstances, "compensation" has
and knowledge of affairs; and that they were not merely officials and employees, permanent or temporary, been held to include allowance for personal expenses,
subordinate and provisional, but in the highest degree whether in the classified or unclassified or exemption commissions, expenses, fees, an honorarium, mileage
authoritative, discretionary, and final in their character. service receiving compensation, even nominal, from the or traveling expenses, payments for services, restitution
We think that persons performing such duties and government as defined in the preceding paragraph. or a balancing of accounts, salary, and wages.30
exercising such functions, in pursuance of statutory [Emphasis supplied.]
How then is "compensation," as the term is used in Section 2 (b)
direction and authority, are not to be regarded as mere
of R.A. No. 3019, to be interpreted?
employees, agents, or committee men, but that they
Did petitioner receive any compensation at all as NCC Chair? Each Board has the duty to (1) prescribe the rules and guidelines BOC because the functions they perform are distinct from those
Granting that petitioner did not receive any salary, the records do for the allocation, distribution and release of the Fund; (2) set of the other government agencies and instrumentalities.
not reveal if he received any allowance, fee, honorarium, or some criteria and procedures for removing from the service officials and Moreover, the law provides a sufficient standard that will guide the
other form of compensation. Notably, under the by-laws of employees whose revenue collection falls short of the target; (3) executive in the implementation of its provisions. Lastly, the
Expocorp, the CEO is entitled to per diems and terminate personnel in accordance with the criteria adopted by the creation of the congressional oversight committee under the law
compensation.31 Would such fact bear any significance? Board; (4) prescribe a system for performance evaluation; (5) enhances, rather than violates, separation of powers. It ensures
perform other functions, including the issuance of rules and the fulfillment of the legislative policy and serves as a check to
Obviously, this proceeding is not the proper forum to settle these regulations and (6) submit an annual report to Congress.7 any over-accumulation of power on the part of the executive and
issues lest we preempt the trial court from resolving them. the implementing agencies.
The DOF, DBM, NEDA, BIR, BOC and the Civil Service
WHEREFORE, the petition is DISMISSED. The preliminary Commission (CSC) were tasked to promulgate and issue the After a careful consideration of the conflicting contentions of the
injunction issued in the Court’s Resolution dated September 24, implementing rules and regulations of RA 9335,8 to be approved parties, the Court finds that petitioners have failed to overcome
2001 is hereby LIFTED. by a Joint Congressional Oversight Committee created for such the presumption of constitutionality in favor of RA 9335, except as
SO ORDERED. purpose.9 shall hereafter be discussed.

G.R. No. 166715 August 14, 2008 Petitioners, invoking their right as taxpayers filed this petition Actual Case And Ripeness
challenging the constitutionality of RA 9335, a tax reform
ABAKADA GURO PARTY LIST (formerly legislation. They contend that, by establishing a system of An actual case or controversy involves a conflict of legal rights, an
AASJS)1 OFFICERS/MEMBERS SAMSON S. ALCANTARA, ED rewards and incentives, the law "transform[s] the officials and assertion of opposite legal claims susceptible of judicial
VINCENT S. ALBANO, ROMEO R. ROBISO, RENE B. employees of the BIR and the BOC into mercenaries and bounty adjudication.10 A closely related requirement is ripeness, that is,
GOROSPE and EDWIN R. SANDOVAL, petitioners, hunters" as they will do their best only in consideration of such the question must be ripe for adjudication. And a constitutional
vs. rewards. Thus, the system of rewards and incentives invites question is ripe for adjudication when the governmental act being
HON. CESAR V. PURISIMA, in his capacity as Secretary of corruption and undermines the constitutionally mandated duty of challenged has a direct adverse effect on the individual
Finance, HON. GUILLERMO L. PARAYNO, JR., in his capacity these officials and employees to serve the people with utmost challenging it.11Thus, to be ripe for judicial adjudication, the
as Commissioner of the Bureau of Internal Revenue, and responsibility, integrity, loyalty and efficiency. petitioner must show a personal stake in the outcome of the case
HON. ALBERTO D. LINA, in his Capacity as Commissioner of or an injury to himself that can be redressed by a favorable
Bureau of Customs, respondents. Petitioners also claim that limiting the scope of the system of decision of the Court.12
rewards and incentives only to officials and employees of the BIR
DECISION and the BOC violates the constitutional guarantee of equal In this case, aside from the general claim that the dispute has
protection. There is no valid basis for classification or distinction ripened into a judicial controversy by the mere enactment of the
CORONA, J.: as to why such a system should not apply to officials and law even without any further overt act,13 petitioners fail either to
employees of all other government agencies. assert any specific and concrete legal claim or to demonstrate
This petition for prohibition1 seeks to prevent respondents from any direct adverse effect of the law on them. They are unable to
implementing and enforcing Republic Act (RA) 93352 (Attrition Act In addition, petitioners assert that the law unduly delegates the show a personal stake in the outcome of this case or an injury to
of 2005). power to fix revenue targets to the President as it lacks a themselves. On this account, their petition is procedurally infirm.
RA 9335 was enacted to optimize the revenue-generation sufficient standard on that matter. While Section 7(b) and (c) of
RA 9335 provides that BIR and BOC officials may be dismissed This notwithstanding, public interest requires the resolution of the
capability and collection of the Bureau of Internal Revenue (BIR) constitutional issues raised by petitioners. The grave nature of
and the Bureau of Customs (BOC). The law intends to encourage from the service if their revenue collections fall short of the target
by at least 7.5%, the law does not, however, fix the revenue their allegations tends to cast a cloud on the presumption of
BIR and BOC officials and employees to exceed their revenue constitutionality in favor of the law. And where an action of the
targets by providing a system of rewards and sanctions through targets to be achieved. Instead, the fixing of revenue targets has
been delegated to the President without sufficient standards. It legislative branch is alleged to have infringed the Constitution, it
the creation of a Rewards and Incentives Fund (Fund) and a becomes not only the right but in fact the duty of the judiciary to
Revenue Performance Evaluation Board (Board).3 It covers all will therefore be easy for the President to fix an unrealistic and
unattainable target in order to dismiss BIR or BOC personnel. settle the dispute.14
officials and employees of the BIR and the BOC with at least six
months of service, regardless of employment status.4 Finally, petitioners assail the creation of a congressional oversight Accountability of
committee on the ground that it violates the doctrine of separation Public Officers
The Fund is sourced from the collection of the BIR and the BOC
in excess of their revenue targets for the year, as determined by of powers. While the legislative function is deemed accomplished Section 1, Article 11 of the Constitution states:
the Development Budget and Coordinating Committee (DBCC). and completed upon the enactment and approval of the law, the
Any incentive or reward is taken from the fund and allocated to creation of the congressional oversight committee permits Sec. 1. Public office is a public trust. Public officers and
the BIR and the BOC in proportion to their contribution in the legislative participation in the implementation and enforcement of employees must at all times be accountable to the
excess collection of the targeted amount of tax revenue.5 the law. people, serve them with utmost responsibility, integrity,
loyalty, and efficiency, act with patriotism, and justice,
The Boards in the BIR and the BOC are composed of the In their comment, respondents, through the Office of the Solicitor and lead modest lives.
Secretary of the Department of Finance (DOF) or his/her General, question the petition for being premature as there is no
Undersecretary, the Secretary of the Department of Budget and actual case or controversy yet. Petitioners have not asserted any Public office is a public trust. It must be discharged by its holder
Management (DBM) or his/her Undersecretary, the Director right or claim that will necessitate the exercise of this Court’s not for his own personal gain but for the benefit of the public for
General of the National Economic Development Authority (NEDA) jurisdiction. Nevertheless, respondents acknowledge that public whom he holds it in trust. By demanding accountability and
or his/her Deputy Director General, the Commissioners of the BIR policy requires the resolution of the constitutional issues involved service with responsibility, integrity, loyalty, efficiency, patriotism
and the BOC or their Deputy Commissioners, two representatives in this case. They assert that the allegation that the reward and justice, all government officials and employees have the duty
from the rank-and-file employees and a representative from the system will breed mercenaries is mere speculation and does not to be responsive to the needs of the people they are called upon
officials nominated by their recognized organization.6 suffice to invalidate the law. Seen in conjunction with the declared to serve.
objective of RA 9335, the law validly classifies the BIR and the
Public officers enjoy the presumption of regularity in the extraordinary diligence in the performance of their classification be based on scientific or marked
performance of their duties. This presumption necessarily obtains duties shall be held liable for any loss or injury suffered differences of things or in their relation. Neither is it
in favor of BIR and BOC officials and employees. RA 9335 by any business establishment or taxpayer as a result necessary that the classification be made with
operates on the basis thereof and reinforces it by providing a of such violation, negligence, abuse, malfeasance, mathematical nicety. Hence, legislative classification
system of rewards and sanctions for the purpose of encouraging misfeasance or failure to exercise extraordinary may in many cases properly rest on narrow distinctions,
the officials and employees of the BIR and the BOC to exceed diligence. for the equal protection guaranty does not preclude the
their revenue targets and optimize their revenue-generation legislature from recognizing degrees of evil or harm,
capability and collection.15 Equal Protection and legislation is addressed to evils as they may
Equality guaranteed under the equal protection clause is equality appear.21 (emphasis supplied)
The presumption is disputable but proof to the contrary is required
to rebut it. It cannot be overturned by mere conjecture or denied under the same conditions and among persons similarly situated; The equal protection clause recognizes a valid classification, that
in advance (as petitioners would have the Court do) specially in it is equality among equals, not similarity of treatment of persons is, a classification that has a reasonable foundation or rational
this case where it is an underlying principle to advance a declared who are classified based on substantial differences in relation to basis and not arbitrary.22 With respect to RA 9335, its expressed
public policy. the object to be accomplished.19When things or persons are public policy is the optimization of the revenue-generation
different in fact or circumstance, they may be treated in law capability and collection of the BIR and the BOC.23 Since the
Petitioners’ claim that the implementation of RA 9335 will turn BIR differently. In Victoriano v. Elizalde Rope Workers’ Union,20 this subject of the law is the revenue- generation capability and
and BOC officials and employees into "bounty hunters and Court declared: collection of the BIR and the BOC, the incentives and/or sanctions
mercenaries" is not only without any factual and legal basis; it is provided in the law should logically pertain to the said agencies.
also purely speculative. The guaranty of equal protection of the laws is not a
guaranty of equality in the application of the laws upon Moreover, the law concerns only the BIR and the BOC because
A law enacted by Congress enjoys the strong presumption of all citizens of the [S]tate. It is not, therefore, a they have the common distinct primary function of generating
constitutionality. To justify its nullification, there must be a clear requirement, in order to avoid the constitutional revenues for the national government through the collection of
and unequivocal breach of the Constitution, not a doubtful and prohibition against inequality, that every man, woman taxes, customs duties, fees and charges.
equivocal one.16 To invalidate RA 9335 based on petitioners’ and child should be affected alike by a statute. Equality The BIR performs the following functions:
baseless supposition is an affront to the wisdom not only of the of operation of statutes does not mean indiscriminate
legislature that passed it but also of the executive which approved operation on persons merely as such, but on persons Sec. 18. The Bureau of Internal Revenue. – The
it. according to the circumstances surrounding them. It Bureau of Internal Revenue, which shall be headed by
guarantees equality, not identity of rights. The and subject to the supervision and control of the
Public service is its own reward. Nevertheless, public officers may Constitution does not require that things which are Commissioner of Internal Revenue, who shall be
by law be rewarded for exemplary and exceptional performance. different in fact be treated in law as though they appointed by the President upon the recommendation
A system of incentives for exceeding the set expectations of a were the same. The equal protection clause does of the Secretary [of the DOF], shall have the following
public office is not anathema to the concept of public not forbid discrimination as to things that are functions:
accountability. In fact, it recognizes and reinforces dedication to different. It does not prohibit legislation which is
duty, industry, efficiency and loyalty to public service of deserving limited either in the object to which it is directed or (1) Assess and collect all taxes, fees and charges
government personnel. by the territory within which it is to operate. and account for all revenues collected;
In United States v. Matthews,17 the U.S. Supreme Court validated The equal protection of the laws clause of the (2) Exercise duly delegated police powers for the
a law which awards to officers of the customs as well as other Constitution allows classification. Classification in law, proper performance of its functions and duties;
parties an amount not exceeding one-half of the net proceeds of as in the other departments of knowledge or practice, is
forfeitures in violation of the laws against smuggling. (3) Prevent and prosecute tax evasions and all other
the grouping of things in speculation or practice illegal economic activities;
Citing Dorsheimer v. United States,18 the U.S. Supreme Court because they agree with one another in certain
said: particulars. A law is not invalid because of simple (4) Exercise supervision and control over its constituent
The offer of a portion of such penalties to the collectors inequality. The very idea of classification is that of and subordinate units; and
is to stimulate and reward their zeal and industry in inequality, so that it goes without saying that the mere
fact of inequality in no manner determines the matter of (5) Perform such other functions as may be provided by
detecting fraudulent attempts to evade payment of law.24
duties and taxes. constitutionality. All that is required of a valid
classification is that it be reasonable, which means xxx xxx xxx (emphasis supplied)
In the same vein, employees of the BIR and the BOC may by law that the classification should be based on
be entitled to a reward when, as a consequence of their zeal in substantial distinctions which make for real On the other hand, the BOC has the following functions:
the enforcement of tax and customs laws, they exceed their differences, that it must be germane to the purpose
revenue targets. In addition, RA 9335 establishes safeguards to of the law; that it must not be limited to existing Sec. 23. The Bureau of Customs. – The Bureau of
ensure that the reward will not be claimed if it will be either the conditions only; and that it must apply equally to Customs which shall be headed and subject to the
fruit of "bounty hunting or mercenary activity" or the product of the each member of the class. This Court has held management and control of the Commissioner of
irregular performance of official duties. One of these that the standard is satisfied if the classification or Customs, who shall be appointed by the President upon
precautionary measures is embodied in Section 8 of the law: distinction is based on a reasonable foundation or the recommendation of the Secretary[of the DOF] and
rational basis and is not palpably arbitrary. hereinafter referred to as Commissioner, shall have the
SEC. 8. Liability of Officials, Examiners and Employees following functions:
of the BIR and the BOC. – The officials, examiners, and In the exercise of its power to make classifications for
employees of the [BIR] and the [BOC] who violate this (1) Collect custom duties, taxes and the
the purpose of enacting laws over matters within its
Act or who are guilty of negligence, abuses or acts of corresponding fees, charges and penalties;
jurisdiction, the state is recognized as enjoying a wide
malfeasance or misfeasance or fail to exercise range of discretion. It is not necessary that the (2) Account for all customs revenues collected;
 (3) Exercise police authority for the enforcement of tariff SEC. 4. Rewards and Incentives Fund. – A Rewards with substantive and procedural due process:
and customs laws; and Incentives Fund, hereinafter referred to as the Provided, That the following exemptions shall apply:
Fund, is hereby created, to be sourced from the
(4) Prevent and suppress smuggling, pilferage and all collection of the BIR and the BOC in excess of their 1. Where the district or area of responsibility
other economic frauds within all ports of entry; respective revenue targets of the year, as is newly-created, not exceeding two years in
determined by the Development Budget and operation, as has no historical record of
(5) Supervise and control exports, imports, foreign collection performance that can be used as
mails and the clearance of vessels and aircrafts in all Coordinating Committee (DBCC), in the following
percentages: basis for evaluation; and
ports of entry;
2. Where the revenue or customs official or
(6) Administer all legal requirements that are Excess of Collection of the Excess the employee
Percent (%) of the Excess Collection is a recent
to Accrue transferee in the middle
to the Fund
appropriate; Revenue Targets of the period under consideration unless the
(7) Prevent and prosecute smuggling and other illegal transfer was due to nonperformance of
activities in all ports under its jurisdiction; revenue targets or potential nonperformance
30% or below – 15%
of revenue targets: Provided, however, That
(8) Exercise supervision and control over its constituent when the district or area of responsibility
units; More than 30% – 15% of the first 30% plus 20% covered by revenue
of the remaining or customs officials or
excess
employees has suffered from economic
(9) Perform such other functions as may be provided by difficulties brought about by natural calamities
law.25 The Fund shall be deemed automatically appropriated
the year immediately following the year when the or force majeure or economic causes as may
xxx xxx xxx (emphasis supplied) revenue collection target was exceeded and shall be be determined by the Board, termination shall
released on the same fiscal year. be considered only after careful and proper
Both the BIR and the BOC are bureaus under the DOF. They review by the Board.
principally perform the special function of being the Revenue targets shall refer to the original estimated
instrumentalities through which the State exercises one of its revenue collection expected of the BIR and the BOC (c) To terminate personnel in accordance with the
great inherent functions – taxation. Indubitably, such substantial for a given fiscal year as stated in the Budget of criteria adopted in the preceding paragraph: Provided,
distinction is germane and intimately related to the purpose of the Expenditures and Sources of Financing (BESF) That such decision shall be immediately executory:
law. Hence, the classification and treatment accorded to the BIR submitted by the President to Congress. The BIR Provided, further, That the application of the criteria
and the BOC under RA 9335 fully satisfy the demands of equal and the BOC shall submit to the DBCC the distribution for the separation of an official or employee from
protection. of the agencies’ revenue targets as allocated among its service under this Act shall be without prejudice to
revenue districts in the case of the BIR, and the the application of other relevant laws on
Undue Delegation accountability of public officers and employees,
collection districts in the case of the BOC.
such as the Code of Conduct and Ethical Standards
Two tests determine the validity of delegation of legislative power: of Public Officers and Employees and the Anti-Graft
xxx xxx xxx (emphasis supplied)
(1) the completeness test and (2) the sufficient standard test. A and Corrupt Practices Act;
law is complete when it sets forth therein the policy to be Revenue targets are based on the original estimated revenue
executed, carried out or implemented by the delegate.26 It lays collection expected respectively of the BIR and the BOC for a xxx xxx xxx (emphasis supplied)
down a sufficient standard when it provides adequate guidelines given fiscal year as approved by the DBCC and stated in the
or limitations in the law to map out the boundaries of the BESF submitted by the President to Congress.30 Thus, the Clearly, RA 9335 in no way violates the security of tenure of
delegate’s authority and prevent the delegation from running determination of revenue targets does not rest solely on the officials and employees of the BIR and the BOC. The guarantee
riot.27 To be sufficient, the standard must specify the limits of the President as it also undergoes the scrutiny of the DBCC. of security of tenure only means that an employee cannot be
delegate’s authority, announce the legislative policy and identify dismissed from the service for causes other than those provided
the conditions under which it is to be implemented.28 On the other hand, Section 7 specifies the limits of the Board’s by law and only after due process is accorded the employee.31 In
authority and identifies the conditions under which officials and the case of RA 9335, it lays down a reasonable yardstick for
RA 9335 adequately states the policy and standards to guide the employees whose revenue collection falls short of the target by at removal (when the revenue collection falls short of the target by at
President in fixing revenue targets and the implementing agencies least 7.5% may be removed from the service: least 7.5%) with due consideration of all relevant factors affecting
in carrying out the provisions of the law. Section 2 spells out the the level of collection. This standard is analogous to inefficiency
policy of the law: SEC. 7. Powers and Functions of the Board. – The and incompetence in the performance of official duties, a ground
Board in the agency shall have the following powers for disciplinary action under civil service laws.32 The action for
SEC. 2. Declaration of Policy. – It is the policy of the and functions: removal is also subject to civil service laws, rules and regulations
State to optimize the revenue-generation capability and
xxx xxx xxx and compliance with substantive and procedural due process.
collection of the Bureau of Internal Revenue (BIR) and
the Bureau of Customs (BOC) by providing for a system (b) To set the criteria and procedures for removing At any rate, this Court has recognized the following as sufficient
of rewards and sanctions through the creation of a standards: "public interest," "justice and equity," "public
from service officials and employees whose
Rewards and Incentives Fund and a Revenue revenue collection falls short of the target by at convenience and welfare" and "simplicity, economy and
Performance Evaluation Board in the above agencies least seven and a half percent (7.5%), with due welfare."33 In this case, the declared policy of optimization of the
for the purpose of encouraging their officials and revenue-generation capability and collection of the BIR and the
consideration of all relevant factors affecting the
employees to exceed their revenue targets. level of collection as provided in the rules and BOC is infused with public interest.
Section 4 "canalized within banks that keep it from regulations promulgated under this Act, subject to civil Separation Of Powers
overflowing"29 the delegated power to the President to fix revenue service laws, rules and regulations and compliance
targets: Section 12 of RA 9335 provides:
 SEC. 12. Joint Congressional Oversight Committee. – their functions within the authority delegated to them. x the meantime. Less frequently, the statute provides that
There is hereby created a Joint Congressional xxxxxxxx a proposed regulation will become law if Congress
Oversight Committee composed of seven Members affirmatively approves it.
from the Senate and seven Members from the House of Categories of congressional oversight functions
Representatives. The Members from the Senate shall Supporters of legislative veto stress that it is necessary
The acts done by Congress purportedly in the exercise to maintain the balance of power between the
be appointed by the Senate President, with at least two of its oversight powers may be divided
senators representing the minority. The Members from legislative and the executive branches of government
into three categories, as it offers lawmakers a way to delegate vast power to
the House of Representatives shall be appointed by the namely: scrutiny, investigation and supervision.
Speaker with at least two members representing the the executive branch or to independent agencies while
minority. After the Oversight Committee will have a. Scrutiny retaining the option to cancel particular exercise of such
approved the implementing rules and regulations (IRR) power without having to pass new legislation or to
it shall thereafter become functus officio and therefore Congressional scrutiny implies a lesser repeal existing law. They contend that this arrangement
cease to exist. intensity and continuity of attention to promotes democratic accountability as it provides
administrative operations. Its primary purpose legislative check on the activities of unelected
The Joint Congressional Oversight Committee in RA 9335 was is to determine economy and efficiency of the administrative agencies. One proponent thus explains:
created for the purpose of approving the implementing rules and operation of government activities. In the
regulations (IRR) formulated by the DOF, DBM, NEDA, BIR, BOC exercise of legislative scrutiny, Congress may It is too late to debate the merits of this
and CSC. On May 22, 2006, it approved the said IRR. From then request information and report from the other delegation policy: the policy is too deeply
on, it became functus officio and ceased to exist. Hence, the branches of government. It can give embedded in our law and practice. It suffices
issue of its alleged encroachment on the executive function of recommendations or pass resolutions for to say that the complexities of modern
implementing and enforcing the law may be considered moot and consideration of the agency involved. government have often led Congress-
academic. whether by actual or perceived necessity- to
xxx xxx xxx legislate by declaring broad policy goals and
This notwithstanding, this might be as good a time as any for the general statutory standards, leaving the
Court to confront the issue of the constitutionality of the Joint b. Congressional investigation choice of policy options to the discretion of an
Congressional Oversight Committee created under RA 9335 (or While congressional scrutiny is regarded as a executive officer. Congress articulates
other similar laws for that matter). passive process of looking at the facts that legislative aims, but leaves their
are readily available, congressional implementation to the judgment of parties
The scholarly discourse of Mr. Justice (now Chief Justice) Puno who may or may not have participated in or
on the concept of congressional oversight in Macalintal v. investigation involves a more intense digging
of facts. The power of Congress to conduct agreed with the development of those aims.
Commission on Elections34 is illuminating: Consequently, absent safeguards, in many
investigation is recognized by the 1987
Concept and bases of congressional oversight Constitution under section 21, Article VI, instances the reverse of our constitutional
xxx xxx xxx scheme could be effected: Congress
Broadly defined, the power of oversight embraces all proposes, the Executive disposes. One
activities undertaken by Congress to enhance its c. Legislative supervision safeguard, of course, is the legislative power
understanding of and influence over to enact new legislation or to change existing
the implementation of legislation it has enacted. The third and most encompassing form by which law. But without some means of overseeing
Clearly, oversight concerns post- Congress exercises its oversight power is thru post enactment activities of the executive
enactment measures undertaken by Congress: (a) legislative supervision. "Supervision" connotes a
branch, Congress would be unable to
to monitor bureaucratic compliance with program continuing and informed awareness on the part of a determine whether its policies have been
objectives, (b) to determine whether agencies are congressional committee regarding executive implemented in accordance with legislative
properly administered, (c) to eliminate executive operations in a given administrative area. While both
intent and thus whether legislative
waste and dishonesty, (d) to prevent executive congressional scrutiny and investigation involve inquiry intervention is appropriate.
usurpation of legislative authority, and (d) to into past executive branch actions in order to influence
assess executive conformity with the congressional future executive branch performance, congressional Its opponents, however, criticize the legislative
perception of public interest. supervision allows Congress to scrutinize the exercise veto as undue encroachment upon the executive
of delegated law-making authority, and permits prerogatives. They urge that any post-enactment
The power of oversight has been held to be intrinsic in Congress to retain part of that delegated authority. measures undertaken by the legislative branch
the grant of legislative power itself and integral to the should be limited to scrutiny and investigation; any
checks and balances inherent in a democratic system Congress exercises supervision over the executive measure beyond that would undermine the
of government. x x x x x x x x x agencies through its veto power. It typically utilizes veto separation of powers guaranteed by the
provisions when granting the President or an executive Constitution. They contend that legislative veto
Over the years, Congress has invoked its oversight agency the power to promulgate regulations with the constitutes an impermissible evasion of the President’s
power with increased frequency to check the perceived force of law. These provisions require the President or veto authority and intrusion into the powers vested in
"exponential accumulation of power" by the executive an agency to present the proposed regulations to
the executive or judicial branches of government.
branch. By the beginning of the 20th century, Congress Congress, which retains a "right" to approve or Proponents counter that legislative veto enhances
has delegated an enormous amount of legislative disapprove any regulation before it takes effect. Such separation of powers as it prevents the executive
authority to the executive branch and the administrative legislative veto provisions usually provide that a
branch and independent agencies from accumulating
agencies. Congress, thus, uses its oversight power to proposed regulation will become a law after the too much power. They submit that reporting
make sure that the administrative agencies perform expiration of a certain period of time, only if Congress requirements and congressional committee
does not affirmatively disapprove of the regulation in
investigations allow Congress to scrutinize only the
exercise of delegated law-making authority. They do provisions were not even exercised.35(emphasis structure of the Constitution’s diagram of power as it entrusts to
not allow Congress to review executive proposals supplied) Congress a direct role in enforcing, applying or implementing its
before they take effect and they do not afford the own laws.44
opportunity for ongoing and binding expressions of In Macalintal, given the concept and configuration of the power of
congressional intent. In contrast, legislative veto congressional oversight and considering the nature and powers of Congress has two options when enacting legislation to define
permits Congress to participate prospectively in the a constitutional body like the Commission on Elections, the Court national policy within the broad horizons of its legislative
approval or disapproval of "subordinate law" or those struck down the provision in RA 9189 (The Overseas Absentee competence.45 It can itself formulate the details or it can assign to
enacted by the executive branch pursuant to a Voting Act of 2003) creating a Joint Congressional Committee. the executive branch the responsibility for making necessary
delegation of authority by Congress. They further argue The committee was tasked not only to monitor and evaluate the managerial decisions in conformity with those standards.46 In the
that legislative veto "is a necessary response by implementation of the said law but also to review, revise, amend latter case, the law must be complete in all its essential terms and
Congress to the accretion of policy control by forces and approve the IRR promulgated by the Commission on conditions when it leaves the hands of the legislature. 47 Thus,
outside its chambers." In an era of delegated authority, Elections. The Court held that these functions infringed on the what is left for the executive branch or the concerned
they point out that legislative veto "is the most efficient constitutional independence of the Commission on Elections.36 administrative agency when it formulates rules and regulations
means Congress has yet devised to retain control over implementing the law is to fill up details (supplementary rule-
With this backdrop, it is clear that congressional oversight is not making) or ascertain facts necessary to bring the law into actual
the evolution and implementation of its policy as unconstitutional per se, meaning, it neither necessarily constitutes
declared by statute." operation (contingent rule-making).48
an encroachment on the executive power to implement laws nor
In Immigration and Naturalization Service v. undermines the constitutional separation of powers. Rather, it is Administrative regulations enacted by administrative agencies to
Chadha, the U.S. Supreme Court resolved the integral to the checks and balances inherent in a democratic implement and interpret the law which they are entrusted to
validity of legislative veto provisions. The case system of government. It may in fact even enhance the separation enforce have the force of law and are entitled to respect.49 Such
arose from the order of the immigration judge of powers as it prevents the over-accumulation of power in the rules and regulations partake of the nature of a statute50 and are
suspending the deportation of Chadha pursuant to § executive branch. just as binding as if they have been written in the statute itself. As
244(c)(1) of the Immigration and Nationality Act. The such, they have the force and effect of law and enjoy the
However, to forestall the danger of congressional encroachment presumption of constitutionality and legality until they are set
United States House of Representatives passed a "beyond the legislative sphere," the Constitution imposes two
resolution vetoing the suspension pursuant to § aside with finality in an appropriate case by a competent
basic and related constraints on Congress.37 It may not vest itself, court.51 Congress, in the guise of assuming the role of an
244(c)(2) authorizing either House of Congress, by any of its committees or its members with either executive or
resolution, to invalidate the decision of the executive overseer, may not pass upon their legality by subjecting them to
judicial power.38 And, when it exercises its legislative power, it its stamp of approval without disturbing the calculated balance of
branch to allow a particular deportable alien to remain must follow the "single, finely wrought and exhaustively
in the United States. The immigration judge reopened powers established by the Constitution. In exercising discretion to
considered, procedures" specified under the approve or disapprove the IRR based on a determination of
the deportation proceedings to implement the House Constitution,39 including the procedure for enactment of laws and
order and the alien was ordered deported. The Board of whether or not they conformed with the provisions of RA 9335,
presentment. Congress arrogated judicial power unto itself, a power exclusively
Immigration Appeals dismissed the alien’s appeal,
holding that it had no power to declare unconstitutional Thus, any post-enactment congressional measure such as this vested in this Court by the Constitution.
an act of Congress. The United States Court of Appeals should be limited to scrutiny and investigation. In particular, Considered Opinion of
for Ninth Circuit held that the House was without congressional oversight must be confined to the following: Mr. Justice Dante O. Tinga
constitutional authority to order the alien’s deportation
and that § 244(c)(2) violated the constitutional doctrine (1) scrutiny based primarily on Congress’ power of Moreover, the requirement that the implementing rules of a law be
on separation of powers. appropriation and the budget hearings conducted in subjected to approval by Congress as a condition for their
connection with it, its power to ask heads of effectivity violates the cardinal constitutional principles of
On appeal, the U.S. Supreme Court declared § departments to appear before and be heard by either of bicameralism and the rule on presentment.52
244(c)(2) unconstitutional. But the Court shied away its Houses on any matter pertaining to their
from the issue of separation of powers and instead departments and its power of confirmation40 and Section 1, Article VI of the Constitution states:
held that the provision violates the presentment clause 41
and bicameralism. It held that the one-house veto was (2) investigation and monitoring of the implementation Section 1. The legislative power shall be vested in
essentially legislative in purpose and effect. As such, it of laws pursuant to the power of Congress to conduct the Congress of the Philippines which shall consist
is subject to the procedures set out in Article I of the inquiries in aid of legislation.42 of a Senate and a House of Representatives, except
Constitution requiring the passage by a majority of both to the extent reserved to the people by the provision on
Any action or step beyond that will undermine the separation of initiative and referendum. (emphasis supplied)
Houses and presentment to the President. x x x x x x x powers guaranteed by the Constitution. Legislative vetoes fall in
xx this class. Legislative power (or the power to propose, enact, amend and
Two weeks after the Chadha decision, the Court repeal laws)53 is vested in Congress which consists of two
Legislative veto is a statutory provision requiring the President or chambers, the Senate and the House of Representatives. A valid
upheld, in memorandum decision, two lower court an administrative agency to present the proposed implementing
decisions invalidating the legislative veto provisions in exercise of legislative power requires the act of both chambers.
rules and regulations of a law to Congress which, by itself or Corrollarily, it can be exercised neither solely by one of the two
the Natural Gas Policy Act of 1978 and the Federal through a committee formed by it, retains a "right" or "power" to
Trade Commission Improvement Act of 1980. Following chambers nor by a committee of either or both chambers. Thus,
approve or disapprove such regulations before they take effect. assuming the validity of a legislative veto, both a single-chamber
this precedence, lower courts invalidated statutes As such, a legislative veto in the form of a congressional oversight
containing legislative veto provisions although some of legislative veto and a congressional committee legislative veto are
committee is in the form of an inward-turning delegation designed invalid.
these provisions required the approval of both Houses to attach a congressional leash (other than through scrutiny and
of Congress and thus met the bicameralism investigation) to an agency to which Congress has by law initially Additionally, Section 27(1), Article VI of the Constitution provides:
requirement of Article I. Indeed, some of these veto delegated broad powers.43 It radically changes the design or
 Section 27. (1) Every bill passed by the Congress Once the bill passes third reading, it is sent to the other such declaration of invalidity shall remain in force and
shall, before it becomes a law, be presented to the chamber, where it will also undergo the three readings. If effect.
President. If he approves the same, he shall sign it, there are differences between the versions approved by the
otherwise, he shall veto it and return the same with his two chambers, a conference committee58 representing both In Tatad v. Secretary of the Department of Energy,65 the Court
objections to the House where it originated, which shall Houses will draft a compromise measure that if ratified by laid down the following rules:
enter the objections at large in its Journal and proceed the Senate and the House of Representatives will then be The general rule is that where part of a statute is void as
to reconsider it. If, after such reconsideration, two-thirds submitted to the President for his consideration. repugnant to the Constitution, while another part is valid, the
of all the Members of such House shall agree to pass valid portion, if separable from the invalid, may stand and be
the bill, it shall be sent, together with the objections, to The bill is enrolled when printed as finally approved by the
Congress, thereafter authenticated with the signatures of enforced. The presence of a separability clause in a statute
the other House by which it shall likewise be creates the presumption that the legislature intended
reconsidered, and if approved by two-thirds of all the the Senate President, the Speaker, and the Secretaries of
their respective chambers…59 separability, rather than complete nullity of the statute. To
Members of that House, it shall become a law. In all justify this result, the valid portion must be so far
such cases, the votes of each House shall be The President’s role in law-making. independent of the invalid portion that it is fair to presume
determined by yeas or nays, and the names of the that the legislature would have enacted it by itself if it had
members voting for or against shall be entered in its The final step is submission to the President for approval. supposed that it could not constitutionally enact the other.
Journal. The President shall communicate his veto of Once approved, it takes effect as law after the required Enough must remain to make a complete, intelligible and
any bill to the House where it originated within thirty publication.60 valid statute, which carries out the legislative intent. x x x
days after the date of receipt thereof; otherwise, it shall
become a law as if he had signed it. (emphasis Where Congress delegates the formulation of rules to implement The exception to the general rule is that when the parts of a
supplied) the law it has enacted pursuant to sufficient standards established statute are so mutually dependent and connected, as
in the said law, the law must be complete in all its essential terms conditions, considerations, inducements, or compensations
Every bill passed by Congress must be presented to the and conditions when it leaves the hands of the legislature. And it for each other, as to warrant a belief that the legislature
President for approval or veto. In the absence of presentment to may be deemed to have left the hands of the legislature when it intended them as a whole, the nullity of one part will vitiate
the President, no bill passed by Congress can become a law. In becomes effective because it is only upon effectivity of the statute the rest. In making the parts of the statute dependent,
this sense, law-making under the Constitution is a joint act of the that legal rights and obligations become available to those entitled conditional, or connected with one another, the legislature
Legislature and of the Executive. Assuming that legislative veto is by the language of the statute. Subject to the indispensable intended the statute to be carried out as a whole and would
a valid legislative act with the force of law, it cannot take effect requisite of publication under the due process clause,61 the not have enacted it if one part is void, in which case if some
without such presentment even if approved by both chambers of determination as to when a law takes effect is wholly the parts are unconstitutional, all the other provisions thus
Congress. prerogative of Congress.62 As such, it is only upon its effectivity dependent, conditional, or connected must fall with them.
that a law may be executed and the executive branch acquires
In sum, two steps are required before a bill becomes a law. First, the duties and powers to execute the said law. Before that point, The separability clause of RA 9335 reveals the intention of the
it must be approved by both Houses of Congress.54 Second, it the role of the executive branch, particularly of the President, is legislature to isolate and detach any invalid provision from the
must be presented to and approved by the President.55 As limited to approving or vetoing the law.63 other provisions so that the latter may continue in force and effect.
summarized by Justice Isagani Cruz56 and Fr. Joaquin G. Bernas, The valid portions can stand independently of the invalid section.
S.J.57, the following is the procedure for the approval of bills: From the moment the law becomes effective, any provision of law Without Section 12, the remaining provisions still constitute a
that empowers Congress or any of its members to play any role in complete, intelligible and valid law which carries out the legislative
A bill is introduced by any member of the House of the implementation or enforcement of the law violates the
Representatives or the Senate except for some measures intent to optimize the revenue-generation capability and collection
principle of separation of powers and is thus unconstitutional. of the BIR and the BOC by providing for a system of rewards and
that must originate only in the former chamber. Under this principle, a provision that requires Congress or its sanctions through the Rewards and Incentives Fund and a
The first reading involves only a reading of the number and members to approve the implementing rules of a law after it has Revenue Performance Evaluation Board.
title of the measure and its referral by the Senate President already taken effect shall be unconstitutional, as is a provision
or the Speaker to the proper committee for study. that allows Congress or its members to overturn any directive or To be effective, administrative rules and regulations must be
ruling made by the members of the executive branch charged with published in full if their purpose is to enforce or implement existing
The bill may be "killed" in the committee or it may be the implementation of the law. law pursuant to a valid delegation. The IRR of RA 9335 were
recommended for approval, with or without amendments, published on May 30, 2006 in two newspapers of general
sometimes after public hearings are first held thereon. If Following this rationale, Section 12 of RA 9335 should be struck circulation66 and became effective 15 days thereafter.67 Until and
there are other bills of the same nature or purpose, they down as unconstitutional. While there may be similar provisions of unless the contrary is shown, the IRR are presumed valid and
may all be consolidated into one bill under common other laws that may be invalidated for failure to pass this effective even without the approval of the Joint Congressional
authorship or as a committee bill. standard, the Court refrains from invalidating them wholesale but Oversight Committee.
will do so at the proper time when an appropriate case assailing
Once reported out, the bill shall be calendared for second those provisions is brought before us.64 WHEREFORE, the petition is hereby PARTIALLY
reading. It is at this stage that the bill is read in its entirety, GRANTED. Section 12 of RA 9335 creating a Joint Congressional
scrutinized, debated upon and amended when desired. The The next question to be resolved is: what is the effect of the Oversight Committee to approve the implementing rules and
second reading is the most important stage in the passage unconstitutionality of Section 12 of RA 9335 on the other regulations of the law is declared UNCONSTITUTIONAL and
of a bill. provisions of the law? Will it render the entire law therefore NULL and VOID. The constitutionality of the remaining
unconstitutional? No. provisions of RA 9335 is UPHELD. Pursuant to Section 13 of RA
The bill as approved on second reading is printed in its final 9335, the rest of the provisions remain in force and effect.
form and copies thereof are distributed at least three days Section 13 of RA 9335 provides:
before the third reading. On the third reading, the members SEC. 13. Separability Clause. – If any provision of this SO ORDERED.
merely register their votes and explain them if they are Act is declared invalid by a competent court, the
allowed by the rules. No further debate is allowed. remainder of this Act or any provision not affected by