SECOND DIVISION

and harassment, grave misconduct, nepotism and dishonesty. The administrative cases, which were filed with the Office of the President, were subsequently referred to the Office of the Solicitor General for investigation. Charges of violations of R.A. No. 3019, 3 (e) and R.A. No. 992, 20-21 and R.A. No. 733, 14 were likewise filed against him with the Office of Tanodbayan. On June 14, 1976, three (3) informations for violation of Sec. 3 (e) of the Anti-Graft and Corrupt Practices Act (R.A. No. 3019, as amended) were filed against him. The informations alleged that he appropriated for himself a bahay kubo, which was intended for the College, and construction materials worth P250,000.00, more or less. Petitioner was also accused of using a driver of the [1] College as his personal and family driver. On October 22, 1976, petitioner was preventively suspended from office pursuant to R.A. No. 3019, 13, as amended. In his place Dr. Pablo T. Mateo, Jr. was designated as officer-in-charge on November 10, 1976, and then as Acting President on May 13, 1977. On April 1, 1978, P.D. No. 1341 was issued by then President Ferdinand E. Marcos, CONVERTING THE PHILIPPINE COLLEGE OF COMMERCE INTO A POLYTECHNIC UNIVERSITY, DEFINING ITS OBJECTIVES, ORGANIZATIONAL STRUCTURE AND FUNCTIONS, AND EXPANDING ITS CURRICULAR OFFERINGS. Mateo continued as the head of the new University. On April 3, 1979, he was appointed Acting President and on March 28, 1980, as President for a term of six (6) years. On July 11, 1980, the Circuit Criminal Court of Manila rendered judgment acquitting petitioner of the charges against him. The dispositive portion of the decision reads: WHEREFORE, the Court finds the accused, Isabelo T. Crisostomo, not guilty of the violations charged in all these three cases and hereby acquits him therefrom, with costs de oficio. The bail bonds filed by said accused for his provisional liberty are hereby cancelled and released. Pursuant to the provisions of Section 13, R.A. No. 3019, as amended, otherwise known as The Anti-Graft and Corrupt Practices Act, and under which the accused

[G.R. No. 106296. July 5, 1996]

ISABELO T. CRISOSTOMO, petitioner, vs. THE COURT OF APPEALS and the * PEOPLE OF THE PHILIPPINES, respondents. DECISION MENDOZA, J.: This is a petition to review the decision of the Court of Appeals dated July 15, 1992, the dispositive portion of which reads: WHEREFORE, the present petition is partially granted. The questioned Orders and writs directing (1) reinstatement of respondent Isabelo T. Crisostomo to the position of President of the Polytechnic University of the Philippines, and (2) payment of salaries and benefits which said respondent failed to receive during his suspension insofar as such payment includes those accruing after the abolition of the PCC and its transfer to the PUP, are hereby set aside. Accordingly, further proceedings consistent with this decision may be taken by the court a quo to determine the correct amounts due and payable to said respondent by the said university. The background of this case is as follows: Petitioner Isabelo Crisostomo was President of the Philippine College of Commerce (PCC), having been appointed to that position by the President of the Philippines on July 17, 1974. During his incumbency as president of the PCC, two administrative cases were filed against petitioner for illegal use of government vehicles, misappropriation of construction materials belonging to the college, oppression

has been suspended by this Court in an Order dated October 22, 1976, said accused is hereby ordered reinstated to the position of President of the Philippine College of Commerce, now known as the Polytechnic University of the Philippines, from which he has been suspended. By virtue of said reinstatement, he is entitled to receive the salaries and other benefits which he failed to receive during suspension, unless in the meantime administrative proceedings have been filed against him. The bail bonds filed by the accused for his provisional liberty in these cases are hereby cancelled and released. SO ORDERED. The cases filed before the Tanodbayan (now the Ombudsman) were likewise dismissed on August 8, 1991 on the ground that they had become moot and academic. On the other hand, the administrative cases were dismissed for failure of the complainants to prosecute them. On February 12, 1992, petitioner filed with the Regional Trial Court a motion for execution of the judgment, particularly the part ordering his reinstatement to the position of president of the PUP and the payment of his salaries and other benefits during the period of suspension. The motion was granted and a partial writ of execution was issued by the trial court on March 6, 1992. On March 26, 1992, however, President Corazon C. Aquino appointed Dr. Jaime Gellor as acting president of the PUP, following the expiration of the term of office of Dr. Nemesio Prudente, who had succeeded Dr. Mateo. Petitioner was one of the five nominees considered by the President of the Philippines for the position. On April 24, 1992, the Regional Trial Court, through respondent Judge Teresita Dy-Liaco Flores, issued another order, reiterating her earlier order for the reinstatement of petitioner to the position of PUP president. A writ of execution, ordering the sheriff to implement the order of reinstatement, was issued. In his return dated April 28, 1992, the sheriff stated that he had executed the writ by installing petitioner as President of the PUP, although Dr. Gellor did

not vacate the office as he wanted to consult with the President of the Philippines first. This led to a contempt citation against Dr. Gellor. A hearing was set on May 7, 1992. On May 5, 1992, petitioner also moved to cite Department of Education, Culture and Sports Secretary Isidro Cario in contempt of court. Petitioner assumed the office of president of the PUP. On May 18, 1992, therefore, the People of the Philippines filed a petition for certiorari and prohibition (CA G.R. No. 27931), assailing the two orders and the writs of execution issued by the trial court. It also asked for a temporary restraining order. On June 25, 1992, the Court of Appeals issued a temporary restraining order, enjoining petitioner to cease and desist from acting as president of the PUP pursuant to the reinstatement orders of the trial court, and enjoining further proceedings in Criminal Cases Nos. VI-2329-2331. On July 15, 1992, the Seventh Division of the Court of Appeals rendered a [2] decision, the dispositive portion of which is set forth at the beginning of this opinion. Said decision set aside the orders and writ of reinstatement issued by the trial court. The payment of salaries and benefits to petitioner accruing after the conversion of the PCC to the PUP was disallowed. Recovery of salaries and benefits was limited to those accruing from the time of petitioners suspension until the conversion of the PCC to the PUP. The case was remanded to the trial court for a determination of the amounts due and payable to petitioner. Hence this petition. Petitioner argues that P.D. No. 1341, which converted the PCC into the PUP, did not abolish the PCC. He contends that if the law had intended the PCC to lose its existence, it would have specified that the PCC was being abolished rather than converted and that if the PUP was intended to be a new institution, the law would have said it was being created. Petitioner claims that the PUP is merely a continuation of the existence of the PCC, and, hence, he could be reinstated to his former position as president. In part the contention is well taken, but, as will presently be explained, reinstatement is no longer possible because of the promulgation of P.D. No. 1437 by the President of the Philippines on June 10, 1978. P.D. No. 1341 did not abolish, but only changed, the former Philippine College of Commerce into what is now the Polytechnic University of the

Philippines, in the same way that earlier in 1952, R.A. No. 778 had converted what was then the Philippine School of Commerce into the Philippine College of Commerce. What took place was a change in academic status of the educational institution, not in its corporate life. Hence the change in its name, the expansion of its curricular offerings, and the changes in its structure and organization. As petitioner correctly points out, when the purpose is to abolish a department or an office or an organization and to replace it with another one, the lawmaking authority says so. He cites the following examples: E.O. No. 709: 1. There is hereby created a Ministry of Trade and Industry, hereinafter referred to as the Ministry. The existing Ministry of Trade established pursuant to Presidential Decree No. 721 as amended, and the existing Ministry established pursuant to Presidential Decree No. 488 as amended, are abolished together with their services, bureaus and similar agencies, regional offices, and all other entities under their supervision and control. . . . E.O. No. 710: 1. There is hereby created a Ministry of Public Works and Highways, hereinafter referred to as the Ministry. The existing Ministry of Public Works established pursuant to Executive Order No. 546 as amended, and the existing Ministry of Public Highways established pursuant to Presidential Decree No. 458 as amended, are abolished together with their services, bureaus and similar agencies, regional offices, and all other entities within their supervision and control. . . . R.A. No. 6975: 13. Creation and Composition. - A National Police Commission, hereinafter referred to as the Commission, is hereby created for the purpose of effectively discharging the functions prescribed in the Constitution and provided in this Act. The Commission shall be a collegial body within the Department. It shall be composed of a Chairman and four (4) regular commissioners, one (1) of whom

shall be designated as Vice-Chairman by the President. The Secretary of the Department shall be the ex-officio Chairman of the Commission, while the ViceChairman shall act as the executive officer of the Commission. xxx xxx xxx

90. Status of Present NAPOLCOM, PC-INP. - Upon the effectivity of this Act, the present National Police Commission, and the Philippine Constabulary-Integrated National Police shall cease to exist. The Philippine Constabulary, which is the nucleus of the integrated Philippine Constabulary-Integrated National Police, shall cease to be a major service of the Armed Forces of the Philippines. The Integrated National Police, which is the civilian component of the Philippine Constabulary-Integrated National Police, shall cease to be the national police force and in lieu thereof, a new police force shall be established and constituted pursuant to this Act. In contrast, P.D. No. 1341, provides: 1. The present Philippine College of Commerce is hereby converted into a university to be known as the Polytechnic University of the Philippines, hereinafter referred to in this Decree as the University. As already noted, R.A. No. 778 earlier provided: 1. The present Philippine School of Commerce, located in the City of Manila, Philippines, is hereby granted full college status and converted into the Philippine College of Commerce, which will offer not only its present one-year and two-year vocational commercial curricula, the latter leading to the titles of Associate in Business Education and/or Associate in Commerce, but also four-year courses leading to the degrees of Bachelor of Science in Business in Education and Bachelor of Science in Commerce, and five-year courses leading to the degrees of Master of Arts in Business Education and Master of Arts in Commerce, respectively.

The appellate court ruled, however, that the PUP and the PCC are not one and the same institution but two different entities and that since petitioner Crisostomos term was coterminous with the legal existence of the PCC, petitioners term expired upon the abolition of the PCC. In reaching this conclusion, the Court of Appeals took into account the following: a) After respondent Crisostomos suspension, P.D. No. 1341 (entitled CONVERTING THE PHILIPPINE COLLEGE OF COMMERCE INTO A POLYTECHNIC UNIVERSITY, DEFINING ITS OBJECTIVES, ORGANIZATIONAL STRUCTURE AND FUNCTIONS, AND EXPANDING ITS CURRICULAR OFFERINGS) was issued on April 1, 1978. This decree explicitly provides that PUPs objectives and purposes cover not only PCCs offering of programs in the field of commerce and business administration but also programs in other polytechnic areas and in other fields such as agriculture, arts and trades and fisheries . . . (section 2). Being a university, PUP was conceived as a bigger institution absorbing, merging and integrating the entire PCC and other national schools as may be transferred to this new state university. b) The manner of selection and appointment of the university head is substantially different from that provided by the PCC Charter. The PUP President shall be appointed by the President of the Philippines upon recommendation of the Secretary of Education and Culture after consultation with the University Board of Regents (section 4, P.D. 1341). The President of PCC, on the other hand, was appointed by the President of the Philippines upon recommendation of the Board of Trustees (Section 4, R.A. 778). c) The composition of the new universitys Board of Regents is likewise different from that of the PCC Board of Trustees (which included the chairman of the Senate Committee on Education and the chairman of the House Committee on Education, the President of the PCC Alumni Association as well as the President of the Chamber of Commerce of the Philippines). Whereas, among others, the NEDA Director-General, the Secretary of Industry and the Secretary of Labor are members of the PUP Board of Regents. (Section 6, P.D. 1341). d) The decree moreover transferred to the new university all the properties including equipment and facilities:

. . . owned by the Philippine College of Commerce and such other National Schools as may be integrated . . . including their obligations and appropriations . . [3] . (Sec. 12; Italics supplied). But these are hardly indicia of an intent to abolish an existing institution and to create a new one. New course offerings can be added to the curriculum of a school without affecting its legal existence. Nor will changes in its existing structure and organization bring about its abolition and the creation of a new one. Only an express declaration to that effect by the lawmaking authority will. The Court of Appeals also cites the provision of P.D. No. 1341 as allegedly implying the abolition of the PCC and the creation of a new one the PUP in its stead: 12. All parcels of land, buildings, equipment and facilities owned by the Philippine College of Commerce and such other national schools as may be integrated by virtue of this decree, including their obligations and appropriations thereof, shall stand transferred to the Polytechnic University of the Philippines, provided, however, that said national schools shall continue to receive their corresponding shares from the special education fund of the municipal/provincial/city government concerned as are now enjoyed by them in accordance with existing laws and/or decrees. The law does not state that the lands, buildings and equipment owned by the PCC were being transferred to the PUP but only that they stand transferred to it. Stand transferred simply means, for example, that lands transferred to the PCC were to be understood as transferred to the PUP as the new name of the institution. But the reinstatement of petitioner to the position of president of the PUP could not be ordered by the trial court because on June 10, 1978, P.D. No. 1437 had been promulgated fixing the term of office of presidents of state universities and colleges at six (6) years, renewable for another term of six (6) years, and authorizing the President of the Philippines to terminate the terms of incumbents who were not reappointed. P.D. No. 1437 provides:

 6. The head of the university or college shall be known as the President of the university or college. He shall be qualified for the position and appointed for a term of six (6) years by the President of the Philippines upon recommendation of the Secretary of Education and Culture after consulting with the Board which may be renewed for another term upon recommendation of the Secretary of Education and Culture after consulting the Board. In case of vacancy by reason of death, absence or resignation, the Secretary of Education and Culture shall have the authority to designate an officer in charge of the college or university pending the appointment of the President. The powers and duties of the President of the university or college, in addition to those specifically provided for in this Decree shall be those usually pertaining to the office of the president of a university or college. 7. The incumbent president of a chartered state college or university whose term may be terminated according to this Decree, shall be entitled to full retirement benefits: provided that he has served the government for at least twenty (20) years; and provided, further that in case the number of years served is less than 20 years, he shall be entitled to one month pay for every year of service. In this case, Dr. Pablo T. Mateo Jr., who had been acting president of the university since April 3, 1979, was appointed president of PUP for a term of six (6) years on March 28, 1980, with the result that petitioners term was cut short. In accordance with 7 of the law, therefore, petitioner became entitled only to retirement benefits or the payment of separation pay. Petitioner must have recognized this fact, that is why in 1992 he asked then President Aquino to consider him for appointment to the same position after it had become vacant in consequence of the retirement of Dr. Prudente. WHEREFORE, the decision of the Court of Appeals is MODIFIED by SETTING ASIDE the questioned orders of the Regional Trial Court directing the reinstatement of the petitioner Isabelo T. Crisostomo to the position of president of the Polytechnic University of the Philippines and the payment to him of salaries and benefits which he failed to receive during his suspension in so far as such payment would include salaries accruing after March 28, 1980 when

petitioner Crisostomos term was terminated. Further proceedings in accordance with this decision may be taken by the trial court to determine the amount due and payable to petitioner by the university up to March 28, 1980. SECOND DIVISION KAPISANAN NG MGA KAWANI NG ENERGY REGULATORY BOARD, Petitioner, G.R. No. 150974 Present: QUISUMBING, J., Chairperson, ** CARPIO, CARPIO MORALES, TINGA, and VELASCO, JR., JJ.
*

- versus -

COMMISSIONER FE B. BARIN, DEPUTY COMMISSIONERS CARLOS R. ALINDADA, LETICIA V. IBAY, OLIVER B. BUTALID, and MARY ANNE B. COLAYCO, of the ENERGY REGULATORY COMMISSION, Respondents.

Promulgated:

June 29, 2007 x-------------------------------------------------- x

DECISION CARPIO, J.: The Case

This is a special civil action for certiorari and [1] prohibition of the selection and appointment of employees of the Energy Regulatory Commission (ERC) by the ERC Board of Commissioners. Petitioner Kapisanan ng mga Kawani ng Energy Regulatory Board (KERB) seeks to declare Section 38 of Republic Act No. 9136 (RA 9136), which abolished the Energy Regulatory Board (ERB) and created the ERC, as unconstitutional and to prohibit the ERC Commissioners from filling up the ERCs plantilla.

The Chairman and members of the Commission shall assume office at the beginning of their terms: Provided, That, if upon the effectivity of this Act, the Commission has not been constituted and the new staffing pattern and plantilla positions have not been approved and filled-up, the current Board and existing personnel of ERB shall continue to hold office.

The Facts RA 9136, popularly known as EPIRA (for Electric Power Industry Reform Act of 2001), was enacted on 8 June 2001 and took effect on 26 June 2001. Section 38 of RA 9136 provides for the abolition of the ERB and the creation of the ERC. The pertinent portions of Section 38 read: Creation of the Energy Regulatory Commission. There is hereby created an independent, quasi-judicial regulatory board to be named the Energy Regulatory Commission (ERC). For this purpose, the existing Energy Regulatory Board (ERB) created under Executive Order No. 172, as amended, is hereby abolished. The Commission shall be composed of a Chairman and four (4) members to be appointed by the President of the Philippines. x x x Within three (3) months from the creation of the ERC, the Chairman shall submit for the approval of the President of the Philippines the new organizational structure and plantilla positions necessary to carry out the powers and functions of the ERC. xxxx

The existing personnel of the ERB, if qualified, shall be given preference in the filling up of plantilla positions created in the ERC, subject to existing civil service rules and regulations.

At the time of the filing of this petition, the ERC was composed of Commissioner Fe B. Barin and Deputy Commissioners Carlos R. Alindada, Leticia V. Ibay, Oliver B.Butalid, and Mary Anne B. Colayco (collectively, Commissioners). The Commissioners assumed office on 15 August 2001. Pursuant to Section 38 of RA 9136, the Commissioners issued the proposed Table of Organization, Staffing Pattern, and Salary Structure on 25 September 2001 which the President of the Philippines approved on 13 November 2001. Meanwhile, KERB submitted to the Commissioners its Resolution No. 2001-02 on 13 September 2001. Resolution No. 2001-02 requested the Commissioners for an opportunity to be informed on the proposed plantilla positions with their equivalent qualification standards. On 17 October 2001, the Commissioners issued the guidelines for the selection and hiring of ERC employees. A portion of the guidelines reflects the Commissioners view on the selection and hiring of the ERC employees vis-avis Civil Service rules, thus: Since R.A. 9136 has abolished the Energy Regulatory Board (ERB), it is the view of the Commission that the provisions of Republic Act No. 6656 (An Act to Protect the Security of [Tenure of] Civil Service Officers and Employees in the Implementation of Government Reorganization) will not

directly apply to ERCs current efforts to establish a new organization. Civil Service laws, rules and regulations, however, will have suppletory application to the extent possible in regard to the selection and placement of employees in the [2] ERC. (Emphasis supplied)

On 5 December 2001, the ERC published a classified advertisement in the Philippine Star. Two days later, the CSC received a list of vacancies and qualification standards from the ERC. The ERC formed a Selection Committee to process all applications. KERB, fearful of the uncertainty of the employment status of its members, filed the present petition on 20 December 2001. KERB later filed an Urgent Ex Parte Motion to Enjoin Termination of Petitioner ERB Employees on 2 January 2002. However, before the ERC received KERBs pleadings, the Selection Committee already presented its list of proposed appointees to the Commissioners. In their Comment, the Commissioners describe the status of the ERB employees appointment in the ERC as follows: As of February 1, 2002, of the two hundred twelve (212) ERB employees, one hundred thirty eighty [sic] (138) were rehired and appointed to ERC plantilla positions and sixty six (66) opted to retire or be separated from the service. Those who were rehired and those who opted to retire or be separated constituted about ninety six (96%) percent of the entire ERB employees. The list of the ERB employees appointed to new positions in the ERC is attached hereto as Annex 1. Only eight (8) ERB employees could not be appointed to new positions due to the reduction of the ERC plantilla and the absence of positions appropriate to their respective qualifications and skills. The appropriate notice was issued to each of them informing them of their separation from the service and assuring them of their entitlement to separation [3] pay and other benefits in accordance with existing laws.

On 5 November 2005, KERB sent a letter to the Commissioners stating the KERB members objection to the Commissioners stand that Civil Service laws, rules and regulations have suppletory application in the selection and placement of the ERC employees. KERB asserted that RA 9136 did not abolish the ERB or change the ERBscharacter as an economic regulator of the electric power industry. KERB insisted that RA 9136 merely changed the ERBs name to the ERC and expanded the ERBs functions and objectives. KERB sent the Commissioners yet another letter on 13 November 2001. KERB made a number of requests: (1) the issuance of a formal letter related to the date of filing of job applications, including the use of Civil Service application form no. 212; (2) the creation of a placement/recruitment committee and setting guidelines relative to its functions, without prejudice to existing Civil Service rules and regulations; and (3) copies of the plantilla positions and their corresponding qualification standards duly approved by either the President of the Philippines or the Civil Service Commission (CSC). Commissioner Barin replied to KERBs letter on 15 November 2001. She stated that Civil Service application form no. 212 and the ERC-prescribed application format are substantially the same. Furthermore, the creation of a placement/recruitment committee is no longer necessary because there is already a prescribed set of guidelines for the recruitment of personnel. The ERC hired an independent consultant to administer the necessary tests for the technical and managerial levels. Finally, the ERC already posted theplantilla positions, which prescribe higher standards, as approved by the Department of Budget and Management. Commissioner Barin stated that positions in the ERC do not need the prior approval of the CSC, as the ERC is only required to submit the qualification standards to the CSC.

The Issues KERB raises the following issues before this Court:

1.

Whether Section 38 of RA 9136 abolishing the ERB is constitutional; and Whether the Commissioners of the ERC were correct in disregarding and considering merely suppletory in character the protective mantle of RA 6656 as to the [4] ERB employees or petitioner in this case.

2.

exclusive concepts. From a legal standpoint, there is no occupant in an abolished office. Where there is no occupant, there is no tenure to speak of. Thus, impairment of the constitutional guarantee of security of tenure does not arise in the abolition of an office. On the other hand, removal implies that the office and its related positions subsist and that the occupants are merely separated from [8] their positions. A valid order of abolition must not only come from a legitimate body, it must also be made in good faith. An abolition is made in good faith when it is not made for political or personal reasons, or when it does not circumvent the [9] constitutional security of tenure of civil service employees. Abolition of an office may be brought about by reasons of economy, or to remove redundancy of functions, or a clear and explicit constitutional mandate for such termination of [10] employment. Where one office is abolished and replaced with another office [11] vested with similar functions, the abolition is a legal nullity. When there is a void abolition, the incumbent is deemed to have never ceased holding office. KERB asserts that there was no valid abolition of the ERB but there was merely a reorganization done in bad faith. Evidences of bad faith are [12] enumerated in Section 2 of Republic Act No. 6656 (RA 6656), Section 2 of RA 6656 reads: No officer or employee in the career service shall be removed except for a valid cause and after due notice and hearing. A valid cause for removal exists when, pursuant to a bona fidereorganization, a position has been abolished or rendered redundant or there is a need to merge, divide, or consolidate positions in order to meet the exigencies of the service, or other lawful causes allowed by the Civil Service Law. The existence of any or some of the following circumstances may be considered as evidence of bad faith in the removals made as a result of reorganization, giving rise to a claim for reinstatement or reappointment by an aggrieved party:

The Ruling of the Court The petition has no merit. We disregard the procedural defects in the petition, such as KERBs personality to file the petition on behalf of its alleged members and Elmar Agirs authority to institute the action, because of the demands of [5] public interest.

Constitutionality of the ERBs Abolition and the ERCs Creation All laws enjoy the presumption of constitutionality. To justify the nullification of a law, there must be a clear and unequivocal breach of the Constitution. KERB failed to show any breach of the Constitution. A public office is created by the Constitution or by law or by an officer or tribunal to which the power to create the office has been delegated by the [6] legislature. The power to create an office carries with it the power to abolish. President Corazon C. Aquino, then exercising her legislative powers, created the ERB by issuing Executive Order No. 172 on 8 May 1987. The question of whether a law abolishes an office is a question of legislative intent. There should not be any controversy if there is an explicit declaration of [7] abolition in the law itself. Section 38 of RA 9136 explicitly abolished the ERB. However, abolition of an office and its related positions is different from removal of an incumbent from his office. Abolition and removal are mutually

(a) Where there is a significant increase in the number of positions in the new staffing pattern of the department or agency concerned; (b) Where an office is abolished and another performing substantially the same functions is created; (c) Where incumbents are replaced by those less qualified in terms of status of appointment, performance and merit; (d) Where there is a reclassification of offices in the department or agency concerned and the reclassified offices perform substantially the same function as the original offices; (e) Where the removal violates the order of separation provided in Section 3 hereof.

methane gas, geothermal and hydroelectric sources of energy, uranium and other similar radioactive minerals, solar energy, tidal power, as well as non-conventional existing and potential sources. The Board shall, upon proper notice and hearing, exercise the following, among other powers and functions: (a) Fix and regulate the prices of petroleum products; (b) Fix and regulate the rate schedule or prices of piped gas to be charged by duly franchised gas companies which distribute gas by means of underground pipe system; (c) Fix and regulate the rates of pipeline concessionaires under the provisions of Republic Act No. 387, as amended, otherwise known as the Petroleum Act of 1949, as amended by Presidential Decree No. 1700; (d) Regulate the capacities of new refineries or additional capacities of existing refineries and license refineries that may be organized after the issuance of this Executive Order, under such terms and conditions as are consistent with the national interest; (e) Whenever the Board has determined that there is a shortage of any petroleum product, or when public interest so requires, it may take such steps as it may consider necessary, including the temporary adjustment of the levels of prices of petroleum products and the payment to the Oil Price Stabilization Fund created under Presidential Decree No. 1956 by persons or entities engaged in the petroleum industry of such amounts as may be determined by the Board, which will enable the importer to recover its cost of importation.

KERB claims that the present case falls under the situation described in Section 2(b) of RA 6656. We thus need to compare the provisions enumerating the powers and functions of the ERB and the ERC to see whether they have substantially the same functions. Under Executive Order No. 172, the ERB has the following powers and functions: SEC. 3. Jurisdiction, Powers and Functions of the Board. When warranted and only when public necessity requires, the Board may regulate the business of importing, exporting, re-exporting, shipping, transporting, processing, refining, marketing and distributing energy resources. Energy resource means any substance or phenomenon which by itself or in combination with others, or after processing or refining or the application to it of technology, emanates, generates or causes the emanation or generation of energy, such as but not limited to, petroleum or petroleum products, coal, marsh gas,

SEC. 4. Reorganized or Abolished Agency. (a) The Board of Energy is hereby reconstituted into the Energy Regulatory Board, and the formers powers and functions under Republic Act No. 6173, as amended by Presidential Decree No. 1208, as amended, are transferred to the latter. (b) The regulatory and adjudicatory powers and functions exercised by the Bureau of Energy Utilization under Presidential Decree No. 1206, as amended, are transferred to the Board, the provisions of Executive Order No. 131 notwithstanding. SEC. 5. Other Transferred Powers and Functions. The power of the Land Transportation Commission to determine, fix and/or prescribe rates or charges pertaining to the hauling of petroleum products are transferred to the Board. The power to fix and regulate the rates or charges pertinent to shipping or transporting of petroleum products shall also be exercised by the Board. The foregoing transfer of powers and functions shall include applicable funds and appropriations, records, equipment, property and such personnel as may be necessary; Provided, That with reference to paragraph (b) of Section 4 hereof, only such amount of funds and appropriations of the Bureau of Energy Utilization, as well as only the personnel thereof who are completely or primarily involved in the exercise by said Bureau of its regulatory and adjudicatory powers and functions, shall be affected by such transfer: Provided, further, That the funds and appropriations as well as the records, equipment, property and all personnel of the reorganized Board of Energy shall be transferred to the Energy Regulatory Board. SEC. 6. Power to Promulgate Rules and Perform Other Acts. The Board shall have the power to promulgate rules

and regulations relevant to procedures governing hearings before it and enforce compliance with any rule, regulation, order or other requirements: Provided, That said rules and regulations shall take effect fifteen (15) days after publication in the Official Gazette. It shall also perform such other acts as may be necessary or conducive to the exercise of its powers and functions, and the attainment of the purposes of this Order.

On the other hand, Section 43 of RA 9136 enumerates the basic functions of the ERC. SEC. 43. Functions of the ERC. The ERC shall promote competition, encourage market development, ensure customer choice and discourage/penalize abuse of market power in the restructured electricity industry. In appropriate cases, the ERC is authorized to issue cease and desist order after due notice and hearing. Towards this end, it shall be responsible for the following key functions in the restructured industry: (a) Enforce the implementing rules and regulations of this Act; (b) Within six (6) months from the effectivity of this Act, promulgate and enforce, in accordance with law, a National Grid Code and a Distribution Code which shall include, but not limited to, the following: (i) Performance standards for TRANSCO O & M Concessionaire, distribution utilities and suppliers: Provided, That in the establishment of the performance standards, the nature and function of the entities shall be considered; and

(ii) Financial capability standards for the generating companies, the TRANSCO, distribution utilities and suppliers: Provided, That in the formulation of the financial capability standards, the nature and function of the entity shall be considered: Provided, further, That such standards are set to ensure that the electric power industry participants meet the minimum financial standards to protect the public interest. Determine, fix, and approve, after due notice and public hearings the universal charge, to be imposed on all electricity end-users pursuant to Section 34 hereof; (c) Enforce the rules and regulations governing the operations of the electricity spot market and the activities of the spot market operator and other participants in the spot market, for the purpose of ensuring a greater supply and rational pricing of electricity; (d) Determine the level of cross subsidies in the existing retail rate until the same is removed pursuant to Section 73 hereof; (e) Amend or revoke, after due notice and hearing, the authority to operate of any person or entity which fails to comply with the provisions hereof, the IRR or any order or resolution of the ERC. In the event a divestment is required, the ERC shall allow the affected party sufficient time to remedy the infraction or for an orderly disposal, but shall in no case exceed twelve (12) months from the issuance of the order; (f) In the public interest, establish and enforce a methodology for setting transmission and distribution wheeling rates and retail rates for the captive market of a distribution utility, taking into account all relevant considerations, including the efficiency or inefficiency of the regulated entities. The rates must be such as to allow the recovery of just and reasonable

costs and a reasonable return on rate base (RORB) to enable the entity to operate viably. The ERC may adopt alternative forms of internationally-accepted rate setting methodology as it may deem appropriate. The rate-setting methodology so adopted and applied must ensure a reasonable price of electricity. The rates prescribed shall be non-discriminatory. To achieve this objective and to ensure the complete removal of cross subsidies, the cap on the recoverable rate of system losses prescribed in Section 10 of Republic Act No. 7832, is hereby amended and shall be replaced by caps which shall be determined by the ERC based on load density, sales mix, cost of service, delivery voltage and other technical considerations it may promulgate. The ERC shall determine such form of ratesetting methodology, which shall promote efficiency. In case the rate setting methodology used is RORB, it shall be subject to the following guidelines: (i) For purposes of determining the rate base, the TRANSCO or any distribution utility may be allowed to revalue its eligible assets not more than once every three (3) years by an independent appraisal company: Provided, however, That ERC may give an exemption in case of unusual devaluation: Provided, further, That the ERC shall exert efforts to minimize price shocks in order to protect the consumers; (ii) Interest expenses are not allowable deductions from permissible return on rate base; (iii) In determining eligible cost of services that will be passed on to the end-users, the ERC shall establish minimum efficiency performance standards for the TRANSCO and distribution utilities including systems losses, interruption frequency rates, and collection efficiency;

(iv) Further, in determining rate base, the TRANSCO or any distribution utility shall not be allowed to include management inefficiencies like cost of project delays not excused by forcemajeure, penalties and related interest during construction applicable to these unexcused delays; and

(k) Monitor and take measures in accordance with this Act to penalize abuse of market power, cartelization, and anticompetitive or discriminatory behavior by any electric power industry participant; (l) Impose fines or penalties for any non-compliance with or breach of this Act, the IRR of this Act and the rules and regulations which it promulgates or administers; (m) Take any other action delegated to it pursuant to this Act;

(v) Any significant operating costs or project investments of TRANSCO and distribution utilities which shall become part of the rate base shall be subject to the verification of the ERC to ensure that the contracting and procurement of the equipment, assets and services have been subjected to transparent and accepted industry procurement and purchasing practices to protect the public interest. (g) Three (3) years after the imposition of the universal charge, ensure that the charges of the TRANSCO or any distribution utility shall bear no cross subsidies between grids, within grids, or between classes of customers, except as provided herein; (h) Review and approve any changes on the terms and conditions of service of the TRANSCO or any distribution utility; (i) Allow the TRANSCO to charge user fees for ancillary services to all electric power industry participants or selfgenerating entities connected to the grid. Such fees shall be fixed by the ERC after due notice and public hearing; (j) Set a lifeline rate for the marginalized end-users;

(n) Before the end of April of each year, submit to the Office of the President of the Philippines and Congress, copy furnished the DOE, an annual report containing such matters or cases which have been filed before or referred to it during the preceding year, the actions and proceedings undertaken and its decision or resolution in each case. The ERC shall make copies of such reports available to any interested party upon payment of a charge which reflects the printing costs. The ERC shall publish all its decisions involving rates and anticompetitive cases in at least one (1) newspaper of general circulation, and/or post electronically and circulate to all interested electric power industry participants copies of its resolutions to ensure fair and impartial treatment; (o) Monitor the activities of the generation and supply of the electric power industry with the end in view of promoting free market competition and ensuring that the allocation or pass through of bulk purchase cost by distributors is transparent, non-discriminatory and that any existing subsidies shall be divided pro rata among all retail suppliers;

(p) Act on applications for or modifications of certificates of public convenience and/or necessity, licenses or permits of franchised electric utilities in accordance with law and revoke, review and modify such certificates, licenses or permits in appropriate cases, such as in cases of violations of the Grid Code, Distribution Code and other rules and regulations issued by the ERC in accordance with law; (q) Act on applications for cost recovery and return on demand side management projects; (r) In the exercise of its investigative and quasi-judicial powers, act against any participant or player in the energy sector for violations of any law, rule and regulation governing the same, including the rules on cross ownership, anticompetitive practices, abuse of market positions and similar or related acts by any participant in the energy sector, or by any person as may be provided by law, and require any person or entity to submit any report or data relative to any investigation or hearing conducted pursuant to this Act; (s) Inspect, on its own or through duly authorized representatives, the premises, books of accounts and records of any person or entity at any time, in the exercise of its quasijudicial power for purposes of determining the existence of any anticompetitive behavior and/or market power abuse and any violation of rules and regulations issued by the ERC; (t) Perform such other regulatory functions as are appropriate and necessary in order to ensure the successful restructuring and modernization of the electric power industry, such as, but not limited to, the rules and guidelines under which generation companies, distribution utilities which are not publicly listed shall offer and sell to the public a portion not less than fifteen percent (15%) of their common shares of stocks: Provided, however, That generation companies,

distribution utilities or their respective holding companies that are already listed in the PSE are deemed in compliance. For existing companies, such public offering shall be implemented not later than five (5) years from the effectivity of this Act. New companies shall implement their respective public offerings not later than five (5) years from the issuance of their certificate of compliance; and (u) The ERC shall have the original and exclusive jurisdiction over all cases contesting rates, fees, fines and penalties imposed by the ERC in the exercise of the abovementioned powers, functions and responsibilities and over all cases involving disputes between and among participants or players in the energy sector. All notices of hearings to be conducted by the ERC for the purpose of fixing rates or fees shall be published at least twice for two successive weeks in two (2) newspapers of nationwide circulation.

Aside from Section 43, additional functions of the ERC are scattered throughout RA 9136: 1. SEC. 6. Generation Sector. Generation of electric power, a business affected with public interest, shall be competitive and open. Upon the effectivity of this Act, any new generation company shall, before it operates, secure from the Energy Regulatory Commission (ERC) a certificate of compliance pursuant to the standards set forth in this Act, as well as health, safety and environmental clearances from the appropriate government agencies under existing laws.

xxxx 2. SEC. 8. Creation of the National Transmission Company. x x x That the subtransmission assets shall be operated and maintained by TRANSCO until their disposal to qualified distribution utilities which are in a position to take over the responsibility for operating, maintaining, upgrading, and expanding said assets. xxx In case of disagreement in valuation, procedures, ownership participation and other issues, the ERC shall resolve such issues. xxxx 3. SEC. 23. Functions of Distribution Utilities. x x x Distribution utilities shall submit to the ERC a statement of their compliance with the technical specifications prescribed in the Distribution Code and the performance standards prescribed in the IRR of this Act. Distribution utilities which do not comply with any of the prescribed technical specifications and performance standards shall submit to the ERC a plan to comply, within three (3) years, with said prescribed technical specifications and performance standards. The ERC shall, within sixty (60) days upon receipt of such plan, evaluate the same and notify the distribution utility concerned of its action. Failure to submit a feasible and credible plan and/or failure to implement the same shall serve as grounds for the imposition of appropriate sanctions, fines or penalties. 4.

xxxx SEC. 28. De-monopolization and Shareholding Dispersal. In compliance with the constitutional mandate for dispersal of ownership and demonopolization of public utilities, the holdings of persons, natural or juridical, including directors, officers, stockholders and related interests, in a distribution utility and their respective holding companies shall not exceed twenty-five (25%) percent of the voting shares of stock unless the utility or the company holding the shares or its controlling stockholders are already listed in the Philippine Stock Exchange (PSE): Provided, That controlling stockholders of small distribution utilities are hereby required to list in the PSE within five (5) years from the enactment of this Act if they already own the stocks. New controlling stockholders shall undertake such listing within five (5) years from the time they acquire ownership and control. A small distribution company is one whose peak demand is equal to Ten megawatts (10MW). The ERC shall, within sixty (60) days from the effectivity of this Act, promulgate the rules and regulations to implement and effect this provision. xxxx 5. SEC. 29. Supply Sector. x x x all suppliers of electricity to the contestable market shall require a license from the ERC. For this purpose, the ERC shall promulgate rules and regulations prescribing the qualifications of electricity suppliers which shall include, among other

requirements, a demonstration of their technical capability, financial capability, and creditworthiness: Provided, That the ERC shall have authority to require electricity suppliers to furnish a bond or other evidence of the ability of a supplier to withstand market disturbances or other events that may increase the cost of providing service. xxxx 6. SEC. 30. Wholesale Electricity Spot Market. x x x Subject to the compliance with the membership criteria, all generating companies, distribution utilities, suppliers, bulk consumers/end-users and other similar entities authorized by the ERC shall be eligible to become members of the wholesale electricity spot market. The ERC may authorize other similar entities to become eligible as members, either directly or indirectly, of the wholesale electricity spot market. xxxx 7. SEC. 31. Retail Competition and Open Access. x x x Upon the initial implementation of open access, the ERC shall allow all electricity end-users with a monthly average peak demand of at least one megawatt (1MW) for the preceding twelve (12) months to be the contestable market. xxx Subsequently and every year thereafter, the ERC shall evaluate the performance of the market. x x x

8.

SEC. 32. NPC Stranded Debt and Contract Cost Recovery. xxx The ERC shall verify the reasonable amounts and determine the manner and duration for the full recovery of stranded debt and stranded contract costs as defined herein x x x x

9.

SEC. 34. Universal Charge. Within one (1) year from the effectivity of this Act, a universal charge to be determined, fixed and approved by the ERC, shall be imposed on all electricity end-users x x x x

10. SEC. 35. Royalties, Returns and Tax Rates for Indigenous Energy Resources. x x x To ensure lower rates for end-users, the ERC shall forthwith reduce the rates of power from all indigenous sources of energy. 11. SEC. 36. Unbundling of Rates and Functions. x x x each distribution utility shall file its revised rates for the approval by the ERC. x x x x 12. SEC. 40. Enhancement of Technical Competence. The ERC shall establish rigorous training programs for its staff for the purpose of enhancing the technical competence of the ERC in the following areas: evaluation of technical performance and monitoring of compliance with service and performance standards, performance-based ratesetting reform, environmental standards and such other areas as will enable the ERC to adequately perform its duties and functions.

13. SEC. 41. Promotion of Consumer Interests. The ERC shall handle consumer complaints and ensure the adequate promotion of consumer interests. 14. SEC. 45. Cross Ownership, Market Power Abuse and Anti-Competitive Behavior. No participant in the electricity industry may engage in any anti-competitive behavior including, but not limited to, crosssubsidization, price or market manipulation, or other unfair trade practices detrimental to the encouragement and protection of contestable markets. xxxx

The ERC shall, motu proprio, monitor and penalize any market power abuse or anticompetitive or discriminatory act or behavior by any participant in the electric power industry. 15. SEC. 51. Powers. The PSALM Corp. shall, in the performance of its functions and for the attainment of its objective, have the following powers: x x x (e) To liquidate the NPC stranded contract costs utilizing proceeds from sales and other property contributed to it, including the proceeds from the universal charge; xxxx

(c) x x x The ERC shall, within one (1) year from the effectivity of this Act, promulgate rules and regulations to promote competition, encourage market development and customer choice and discourage/penalize abuse of market power, cartelization and any anticompetitive or discriminatory behavior, in order to further the intent of this Act and protect the public interest. Such rules and regulations shall define the following: (a) the relevant markets for purposes of establishing abuse or misuse of monopoly or market position; (b) areas of isolated grids; and (c) the periodic reportorial requirements of electric power industry participants as may be necessary to enforce the provisions of this Section.

16. SEC. 60. Debts of Electric Cooperatives. x x x The ERC shall ensure a reduction in the rates of electric cooperatives commensurate with the resulting savings due to the removal of the amortization payments of their loans. xxxx 17. SEC. 62. Joint Congressional Power Commission. x x x x x x the Power Commission is hereby empowered to require the DOE, ERC, NEA, TRANSCO, generation companies, distribution utilities, suppliers and other electric power industry participants to submit reports and all pertinent data and information relating to the performance of their respective functions in the industry. xxx xxxx

18. SEC. 65. Environmental Protection. Participants in the generation, distribution and transmission subsectors of the industry shall comply with all environmental laws, rules, regulations and standards promulgated by the Department of Environment and Natural Resources including, in appropriate cases, the establishment of an environmental guarantee fund.

Commission for approval. The ERC shall ensure that all savings realized from the reduction of said mark-ups shall be passed on to all end-users.

19. SEC. 67. NPC Offer of Transition Supply Contracts. Within six (6) months from the effectivity of this Act, NPC shall file with the ERC for its approval a transition supply contract duly negotiated with the distribution utilities containing the terms and conditions of supply and a corresponding schedule of rates, consistent with the provisions hereof, including adjustments and/or indexation formulas which shall apply to the term of such contracts. xxxx 20. SEC. 69. Renegotiation of Power Purchase and Energy Conversion Agreements between Government Entities. Within three (3) months from the effectivity of this Act, all power purchase and energy conversion agreements between the PNOCEnergy Development Corporation (PNOC-EDC) and NPC, including but not limited to the Palimpinon, Tongonan and Mt. Apo Geothermal complexes, shall be reviewed by the ERC and the terms thereof amended to remove any hidden costs or extraordinary mark-ups in the cost of power or steam above their true costs. All amended contracts shall be submitted to the Joint Congressional Power

After comparing the functions of the ERB and the ERC, we find that the ERC indeed assumed the functions of the ERB. However, the overlap in the functions of the ERB and of the ERC does not mean that there is no valid abolition of the ERB. The ERC has new and expanded functions which are intended to meet the specific needs of a deregulated power industry. Indeed, National Land Titles and Deeds Registration Administration v. Civil Service Commission stated that: [I]f the newly created office has substantially new, different or additional functions, duties or powers, so that it may be said in fact to create an office different from the one abolished, even though it embraces all or some of the duties of the old office it will be considered as an abolition of one office and the creation of a new or different one. The same is true if one office is abolished and its duties, for reasons of economy are given to [13] an existing officer or office.

KERB argues that RA 9136 did not abolish the ERB nor did it alter its essential character as an economic regulator of the electric power industry. x x x RA 9136 rather changed merely ERBs name and title to that of the ERC even as it expanded its functions and objectives to keep pace with the times. To uphold KERBs argument regarding the invalidity of the ERBs abolition is to ignore the developments in the history of energy regulation. The regulation of public services started way back in 1902 with the enactment of Act No. 520 which created the Coastwise Rate Commission. In 1906, Act No. 1507 was passed

creating the Supervising Railway Expert. The following year, Act No. 1779 was enacted creating the Board of Rate Regulation. Then, Act No 2307, which was patterned after the Public Service Law of the State of New Jersey, was approved by the Philippine Commission in 1914, creating the Board of Public Utility Commissioners, composed of three members, which absorbed all the functions of the Coastwise Rate Commission, the Supervising Railway Expert, and the Board of Rate Regulation. Thereafter, several laws were enacted on public utility regulation. On November 7, 1936, Commonwealth Act No. 146, otherwise known as the Public Service Law, was enacted by the National Assembly. The Public Service Commission (PSC) had jurisdiction, supervision, and control over all public services, including the electric power service. After almost four decades, significant developments in the energy sector changed the landscape of economic regulation in the country. April 30, 1971 R.A. No. 6173 was passed creating the Oil Industry Commission (OIC), which was tasked to regulate the oil industry and to ensure the adequate supply of petroleum products at reasonable prices. September 24, 1972 then President Ferdinand E. Marcos issued Presidential Decree No. 1 which ordered the preparation of the Integrated Reorganization Plan by the Commission on Reorganization. The Plan abolished the PSC and transferred the regulatory and adjudicatory functions pertaining to the electricity industry and water resources to then Board of Power and Waterworks (BOPW).

October 6, 1977 the government created the Department of Energy (DOE) and consequently abolished the OIC, which was replaced by the creation of the Board of Energy (BOE) through Presidential Decree No. 1206. The BOE, in addition, assumed the powers and functions of the BOPW over the electric power industry. May 8, 1987 the BOE was reconstituted into the Energy Regulatory Board (ERB), pursuant to Executive Order No. 172 issued by then President Corazon C. Aquino as part of her governments reorganization program. The rationale was to consolidate and entrust into a single body all the regulatory and adjudicatory functions pertaining to the energy sector. Thus, the power to regulate the power rates and services of private electric utilities was transferred to the ERB. December 28, 1992 Republic Act No. 7638 signed, where the power to fix the rates of the National Power Corporation (NPC) and the rural electric cooperatives (RECs) was passed on to the ERB. Non-pricing functions of the ERB with respect to the petroleum industry were transferred to the DOE, i.e., regulating the capacities of new refineries. February 10, 1998 enactment of Republic Act 8479: Downstream Oil Industry Deregulation Act of 1998, which prescribed a five-month transition period, before full deregulation of the oil industry, during which ERB would implement an automatic pricing mechanism (APM) for petroleum products every month.

June 12, 1998 the Philippine oil industry was fully deregulated, thus, ERBs focus of responsibility centered on the electric industry. June 8, 2001 enactment of Republic Act No. 9136, otherwise known as the Electric Power Industry Reform Act (EPIRA) of 2001. The Act abolished the ERB and created in its place the Energy Regulatory Commission (ERC) which is a purely independent regulatory body performing the combined quasijudicial, quasi-legislative and administrative functions [14] in the electric industry.

To achieve its aforestated goal, the law has reconfigured [15] the organization of the regulatory body. x x x

There is no question in our minds that, because of the expansion of the ERCs functions and concerns, there was a valid abolition of the ERB. Thus, there is no merit toKERBs allegation that there is an impairment of the security of tenure of the ERBs employees. WHEREFORE, we DISMISS the petition. No costs. SO ORDERED.

Throughout the years, the scope of the regulation has gradually narrowed from that of public services in 1902 to the electricity industry and water resources in 1972 to the electric power industry and oil industry in 1977 to the electric industry alone in 1998. The ERC retains the ERBs traditional rate and service regulation functions. However, the ERC now also has to promote competitive operations in the electricity market. RA 9136 expanded the ERCs concerns to encompass both the consumers and the utility investors. Thus, the EPIRA provides a framework for the restructuring of the industry, including the privatization of the assets of the National Power Corporation (NPC), the transition to a competitive structure, and the delineation of the roles of various government agencies and the private entities. The law ordains the division of the industry into four (4) distinct sectors, namely: generation, transmission, distribution and supply. Corollarily, the NPC generating plants have to privatized and its transmission business spun off and privatized thereafter. In tandem with the restructuring of the industry is the establishment of a strong and purely independent regulatory body. Thus, the law created the ERC in place of the Energy Regulatory Board (ERB).

SECOND DIVISION

[G.R. No. 155336. November 25, 2004]

COMMISSION ON HUMAN RIGHTS EMPLOYEES ASSOCIATION (CHREA) Represented by its President, MARCIAL A. SANCHEZ, JR., petitioner, vs.COMMISSION ON HUMAN RIGHTS, respondent. DECISION CHICO-NAZARIO, J.: Can the Commission on Human Rights lawfully implement an upgrading and reclassification of personnel positions without the prior approval of the Department of Budget and Management? Before this Court is a petition for review filed by petitioner Commission on [1] Human Rights Employees Association (CHREA) challenging the Decision dated

29 November 2001 of the Court of Appeals in CA-G.R. SP No. 59678 affirming the [2] Resolutions dated 16 December 1999 and 09 June 2000 of the Civil Service Commission (CSC), which sustained the validity of the upgrading and reclassification of certain personnel positions in the Commission on Human Rights (CHR) despite the disapproval thereof by the Department of Budget and Management (DBM). Also assailed is the resolution dated 11 September 2002 of the Court of Appeals denying the motion for reconsideration filed by petitioner. The antecedent facts which spawned the present controversy are as follows: On 14 February 1998, Congress passed Republic Act No. 8522, otherwise known as the General Appropriations Act of 1998. It provided for Special Provisions Applicable to All Constitutional Offices Enjoying Fiscal Autonomy. The last portion of Article XXXIII covers the appropriations of the CHR. These special provisions state: 1. Organizational Structure. Any provision of law to the contrary notwithstanding and within the limits of their respective appropriations as authorized in this Act, the Constitutional Commissions and Offices enjoying fiscal autonomy are authorized to formulate and implement the organizational structures of their respective offices, to fix and determine the salaries, allowances, and other benefits of their personnel, and whenever public interest so requires, make adjustments in their personal services itemization including, but not limited to, the transfer of item or creation of new positions in their respective offices:PROVIDED, That officers and employees whose positions are affected by such reorganization or adjustments shall be granted retirement gratuities and separation pay in accordance with existing laws, which shall be payable from any unexpended balance of, or savings in the appropriations of their respective offices: PROVIDED, FURTHER, That the implementation hereof shall be in accordance with salary rates, allowances and other benefits authorized under compensation standardization laws. 2. Use of Savings. The Constitutional Commissions and Offices enjoying fiscal autonomy are hereby authorized to use savings in their respective appropriations for: (a) printing and/or publication of decisions, resolutions, and training information materials; (b) repair, maintenance and improvement of central and

regional offices, facilities and equipment; (c) purchase of books, journals, periodicals and equipment; (d) necessary expenses for the employment of temporary, contractual and casual employees; (e) payment of extraordinary and miscellaneous expenses, commutable representation and transportation allowances, and fringe benefits for their officials and employees as may be authorized by law; and (f) other official purposes, subject to accounting and auditing rules and regulations. (Emphases supplied) On the strength of these special provisions, the CHR, through its then Chairperson Aurora P. Navarette-Recia and Commissioners Nasser A. Marohomsalic, Mercedes V. Contreras, Vicente P. Sibulo, and Jorge R. Coquia, promulgated Resolution No. A98-047 on 04 September 1998, adopting an upgrading and reclassification scheme among selected positions in the Commission, to wit: WHEREAS, the General Appropriations Act, FY 1998, R.A. No. 8522 has provided special provisions applicable to all Constitutional Offices enjoying Fiscal Autonomy, particularly on organizational structures and authorizes the same to formulate and implement the organizational structures of their respective offices to fix and determine the salaries, allowances and other benefits of their personnel and whenever public interest so requires, make adjustments in the personnel services itemization including, but not limited to, the transfer of item or creation of new positions in their respective offices: PROVIDED, That officers and employees whose positions are affected by such reorganization or adjustments shall be granted retirement gratuities and separation pay in accordance with existing laws, which shall be payable from any unexpanded balance of, or savings in the appropriations of their respective offices; WHEREAS, the Commission on Human Rights is a member of the Constitutional Fiscal Autonomy Group (CFAG) and on July 24, 1998, CFAG passed an approved Joint Resolution No. 49 adopting internal rules implementing the special provisions heretoforth mentioned; NOW THEREFORE, the Commission by virtue of its fiscal autonomy hereby approves and authorizes the upgrading and augmentation of the commensurate

amount generated from savings under Personal Services to support the implementation of this resolution effective Calendar Year 1998; Let the Human Resources Development Division (HRDD) prepare the necessary Notice of Salary Adjustment and other appropriate documents to implement this [3] resolution; . . . . (Emphasis supplied) Annexed to said resolution is the proposed creation of ten additional plantilla positions, namely: one Director IV position, with Salary Grade 28 for the Caraga Regional Office, four Security Officer II with Salary Grade 15, and five Process Servers, with Salary Grade 5 under the Office of the [4] Commissioners. On 19 October 1998, CHR issued Resolution No. A98-055 providing for the upgrading or raising of salary grades of the following positions in the Commission: Number of Positions 12 Position Title From Attorney VI (In the Regional Field Offices) Director III Salary Grade
[5]

Accountant 1 1 Cashier III Information Officer V Cashier V Director IV 18 24 24 28 51,756.00 36,744.00

[6]

It, likewise, provided for the creation and upgrading of the following positions: A. Creation Number of Positions 4 Total Salary Requirements Position Title Salary Grade Total Salary Requirements 684,780.00

Security Officer II (Coterminous)

15

To Director IV

From 26

To 28

B. Upgrading P229,104.00 Number of 38,928.00 Positions 1 36,744.00 2 Position Title From Attorney V Security Officer I To Director IV Security Officer II Salary Grade From 25 11 To 28 15

4 1

Director IV Director IV

27 24

28 28

Total Sal Requirem

Financial & Management Officer II Budget Officer III Accountant III

P28,092. 57,456.0

Budget Officer IV Chief

18

24

51,756.00 Total 3 51,756.00

------------

P 85,548

18

24

To support the implementation of such scheme, the CHR, in the same resolution, authorized the augmentation of a commensurate amount generated from savings under Personnel Services. By virtue of Resolution No. A98-062 dated 17 November 1998, the CHR collapsed the vacant positions in the body to provide additional source of funding for said staffing modification. Among the positions collapsed were: one Attorney III, four Attorney IV, one Chemist III, three Special Investigator I, one [8] Clerk III, and one Accounting Clerk II. The CHR forwarded said staffing modification and upgrading scheme to the DBM with a request for its approval, but the then DBM secretary Benjamin Diokno denied the request on the following justification: Based on the evaluations made the request was not favorably considered as it effectively involved the elevation of the field units from divisions to services. The present proposal seeks further to upgrade the twelve (12) positions of Attorney VI, SG-26 to Director IV, SG-28. This would elevate the field units to a bureau or regional office, a level even higher than the one previously denied. The request to upgrade the three (3) positions of Director III, SG-27 to Director IV, SG-28, in the Central Office in effect would elevate the services to Office and change the context from support to substantive without actual change in functions. In the absence of a specific provision of law which may be used as a legal basis to elevate the level of divisions to a bureau or regional office, and the services to offices, we reiterate our previous stand denying the upgrading of the twelve (12) positions of Attorney VI, SG-26 to Director III, SG-27 or Director IV, SG-28, in the Field Operations Office (FOO) and three (3) Director III, SG-27 to Director IV, SG28 in the Central Office. As represented, President Ramos then issued a Memorandum to the DBM Secretary dated 10 December 1997, directing the latter to increase the number of Plantilla positions in the CHR both Central and Regional Offices to implement the Philippine Decade Plan on Human Rights Education, the Philippine Human

Rights Plan and Barangay Rights Actions Center in accordance with existing laws. (Emphasis in the original) Pursuant to Section 78 of the General Provisions of the General Appropriations Act (GAA) FY 1998, no organizational unit or changes in key positions shall be authorized unless provided by law or directed by the President, thus, the creation of a Finance Management Office and a Public Affairs Office cannot be given favorable recommendation. Moreover, as provided under Section 2 of RA No. 6758, otherwise known as the Compensation Standardization Law, the Department of Budget and Management is directed to establish and administer a unified compensation and position classification system in the government. The Supreme Court ruled in the case of Victorina Cruz vs. Court of Appeals, G.R. No. 119155, dated January 30, 1996, that this Department has the sole power and discretion to administer the compensation and position classification system of the National Government. Being a member of the fiscal autonomy group does not vest the agency with the authority to reclassify, upgrade, and create positions without approval of the DBM. While the members of the Group are authorized to formulate and implement the organizational structures of their respective offices and determine the compensation of their personnel, such authority is not absolute and must be exercised within the parameters of the Unified Position Classification and Compensation System established under RA 6758 more popularly known as the Compensation Standardization Law. We therefore reiterate our previous stand [9] on the matter. (Emphases supplied) In light of the DBMs disapproval of the proposed personnel modification scheme, the CSC-National Capital Region Office, through a memorandum dated 29 March 1999, recommended to the CSC-Central Office that the subject appointments be rejected owing to the DBMs disapproval of the plantilla reclassification. Meanwhile, the officers of petitioner CHREA, in representation of the rank and file employees of the CHR, requested the CSC-Central Office to affirm the recommendation of the CSC-Regional Office. CHREA stood its ground in saying

that the DBM is the only agency with appropriate authority mandated by law to evaluate and approve matters of reclassification and upgrading, as well as creation of positions. The CSC-Central Office denied CHREAs request in a Resolution dated 16 December 1999, and reversed the recommendation of the CSC-Regional Office that the upgrading scheme be censured. The decretal portion of which reads: WHEREFORE, the request of Ronnie N. Rosero, Hubert V. Ruiz, Flordeliza A. [10] Briones, George Q. Dumlao [and], Corazon A. Santos-Tiu, is hereby denied. CHREA filed a motion for reconsideration, but the CSC-Central Office denied the same on 09 June 2000. Given the cacophony of judgments between the DBM and the CSC, petitioner CHREA elevated the matter to the Court of Appeals. The Court of Appeals affirmed the pronouncement of the CSC-Central Office and upheld the validity of the upgrading, retitling, and reclassification scheme in the CHR on the justification that such action is within the ambit of CHRs fiscal autonomy. Thefallo of the Court of Appeals decision provides: IN VIEW OF ALL THE FOREGOING, the instant petition is ordered DISMISSED and the questioned Civil Service Commission Resolution No. 99-2800 dated December 16, 1999 as well as No. 001354 dated June 9, 2000, are hereby [11] AFFIRMED. No cost. Unperturbed, petitioner filed this petition in this Court contending that: A. THE COURT OF APPEALS GRAVELY ERRED WHEN IT HELD THAT UNDER THE 1987 CONSTITUTION, THE COMMISSION ON HUMAN RIGHTS ENJOYS FISCAL AUTONOMY. B.

THE COURT OF APPEALS SERIOUSLY ERRED IN UPHOLDING THE CONSTRUCTION OF THE COMMISSION ON HUMAN RIGHTS OF REPUBLIC ACT NO. 8522 (THE GENERAL APPROPRIATIONS ACT FOR THE FISCAL YEAR 1998) DESPITE ITS BEING IN SHARP CONFLICT WITH THE 1987 CONSTITUTION AND THE STATUTE ITSELF. C. THE COURT OF APPEALS SERIOUSLY AND GRAVELY ERRED IN AFFIRMING THE VALIDITY OF THE CIVIL SERVICE COMMISSION RESOLUTION NOS. 992800 AND 001354 AS WELL AS THAT OF THE OPINION OF THE DEPARTMENT OF JUSTICE IN STATING THAT THE COMMISSION ON HUMAN RIGHTS ENJOYS FISCAL AUTONOMY UNDER THE 1987 CONSTITUTION AND THAT THIS FISCAL AUTONOMY INCLUDES THE ACTION TAKEN BY IT IN COLLAPSING, UPGRADING [12] AND RECLASSIFICATION OF POSITIONS THEREIN. The central question we must answer in order to resolve this case is: Can the Commission on Human Rights validly implement an upgrading, reclassification, creation, and collapsing ofplantilla positions in the Commission without the prior approval of the Department of Budget and Management? Petitioner CHREA grouses that the Court of Appeals and the CSC-Central Office both erred in sanctioning the CHRs alleged blanket authority to upgrade, reclassify, and create positions inasmuch as the approval of the DBM relative to such scheme is still indispensable. Petitioner bewails that the CSC and the Court of Appeals erroneously assumed that CHR enjoys fiscal autonomy insofar as financial matters are concerned, particularly with regard to the upgrading and reclassification of positions therein. Respondent CHR sharply retorts that petitioner has no locus standi considering that there exists no official written record in the Commission recognizing petitioner as a bona fideorganization of its employees nor is there anything in the records to show that its president, Marcial A. Sanchez, Jr., has the authority to sue the CHR. The CHR contends that it has the authority to cause the upgrading, reclassification, plantilla creation, and collapsing scheme sans the approval of the DBM because it enjoys fiscal autonomy.

After a thorough consideration of the arguments of both parties and an assiduous scrutiny of the records in the case at bar, it is the Courts opinion that the present petition is imbued with merit. On petitioners personality to bring this suit, we held in a multitude of cases that a proper party is one who has sustained or is in immediate danger of [13] sustaining an injury as a result of the act complained of. Here, petitioner, which consists of rank and file employees of respondent CHR, protests that the upgrading and collapsing of positions benefited only a select few in the upper level positions in the Commission resulting to the demoralization of the rank and file employees. This sufficiently meets the injury test. Indeed, the CHRs upgrading scheme, if found to be valid, potentially entails eating up the Commissions savings or that portion of its budgetary pie otherwise allocated for Personnel Services, from which the benefits of the employees, including those in the rank and file, are derived. Further, the personality of petitioner to file this case was recognized by the CSC when it took cognizance of the CHREAs request to affirm the recommendation of the CSC-National Capital Region Office. CHREAs personality to bring the suit was a non-issue in the Court of Appeals when it passed upon the merits of this case. Thus, neither should our hands be tied by this technical concern. Indeed, it is settled jurisprudence that an issue that was neither raised in the complaint nor in the court below cannot be raised for the first time on appeal, as to do so would be offensive to the basic rules of fair play, justice, and [14] due process. We now delve into the main issue of whether or not the approval by the DBM is a condition precedent to the enactment of an upgrading, reclassification, creation and collapsing of plantillapositions in the CHR. Germane to our discussion is Rep. Act No. 6758, An Act Prescribing a Revised Compensation and Position Classification System in the Government and For Other Purposes, or theSalary Standardization Law, dated 01 July 1989, which provides in Sections 2 and 4 thereof that it is the DBM that shall establish and administer a unified Compensation and Position Classification System. Thus:

SEC. 2. Statement of Policy. -- It is hereby declared the policy of the State to provide equal pay for substantially equal work and to base differences in pay upon substantive differences in duties and responsibilities, and qualification requirements of the positions. In determining rates of pay, due regard shall be given to, among others, prevailing rates in the private sector for comparable work. For this purpose, the Department of Budget and Management (DBM) is hereby directed to establish and administer a unified Compensation and Position Classification System, hereinafter referred to as the System as provided for in Presidential Decree No. 985, as amended, that shall be applied for all government entities, as mandated by the Constitution. (Emphasis supplied.) SEC. 4. Coverage. The Compensation and Position Classification System herein provided shall apply to all positions, appointive or elective, on full or part-time basis, now existing or hereafter created in the government, including government-owned or controlled corporations and government financial institutions. The term government refers to the Executive, the Legislative and the Judicial Branches and the Constitutional Commissions and shall include all, but shall not be limited to, departments, bureaus, offices, boards, commissions, courts, tribunals, councils, authorities, administrations, centers, institutes, state colleges and universities, local government units, and the armed forces. The term government-owned or controlled corporations and financial institutions shall include all corporations and financial institutions owned or controlled by the National Government, whether such corporations and financial institutions perform governmental or proprietary functions. (Emphasis supplied.) The disputation of the Court of Appeals that the CHR is exempt from the long arm of the Salary Standardization Law is flawed considering that the coverage thereof, as defined above, encompasses the entire gamut of government offices, sans qualification. This power to administer is not purely ministerial in character as erroneously held by the Court of Appeals. The word to administer means to control or regulate in behalf of others; to direct or superintend the execution,

application or conduct of; and to manage or conduct public affairs, as to [15] administer the government of the state. The regulatory power of the DBM on matters of compensation is encrypted not only in law, but in jurisprudence as well. In the recent case [16] of Philippine Retirement Authority (PRA) v. Jesusito L. Buag, this Court, speaking through Mr. Justice Reynato Puno, ruled that compensation, allowances, and other benefits received by PRA officials and employees without the requisite approval or authority of the DBM are unauthorized and irregular. In the words of the Court Despite the power granted to the Board of Directors of PRA to establish and fix a compensation and benefits scheme for its employees, the same is subject to the review of the Department of Budget and Management. However, in view of the express powers granted to PRA under its charter, the extent of the review authority of the Department of Budget and Management is limited. As stated in Intia, the task of the Department of Budget and Management is simply to review the compensation and benefits plan of the government agency or entity concerned and determine if the same complies with the prescribed policies and guidelines issued in this regard. The role of the Department of Budget and Management is supervisorial in nature, its main duty being to ascertain that the proposed compensation, benefits and other incentives to be given to PRA officials and employees adhere to the policies and guidelines issued in accordance with applicable laws. In Victorina Cruz v. Court of Appeals, we held that the DBM has the sole power and discretion to administer the compensation and position classification system of the national government. In Intia, Jr. v. Commission on Audit, the Court held that although the [19] charter of the Philippine Postal Corporation (PPC) grants it the power to fix the compensation and benefits of its employees and exempts PPC from the coverage of the rules and regulations of the Compensation and Position Classification Office, by virtue of Section 6 of P.D. No. 1597, the compensation system established by the PPC is, nonetheless, subject to the review of the DBM. This Court intoned:
[18] [17]

It should be emphasized that the review by the DBM of any PPC resolution affecting the compensation structure of its personnel should not be interpreted to mean that the DBM can dictate upon the PPC Board of Directors and deprive the latter of its discretion on the matter. Rather, the DBMs function is merely to ensure that the action taken by the Board of Directors complies with the requirements of the law, specifically, that PPCs compensation system conforms as closely as possible with that provided for under R.A. No. 6758. (Emphasis supplied.) As measured by the foregoing legal and jurisprudential yardsticks, the imprimatur of the DBM must first be sought prior to implementation of any reclassification or upgrading of positions in government. This is consonant to the mandate of the DBM under the Revised Administrative Code of 1987, Section 3, Chapter 1, Title XVII, to wit: SEC. 3. Powers and Functions. The Department of Budget and Management shall assist the President in the preparation of a national resources and expenditures budget, preparation, execution and control of the National Budget, preparation and maintenance of accounting systems essential to the budgetary process, achievement of more economy and efficiency in the management of government operations, administration of compensation and position classification systems, assessment of organizational effectiveness and review and evaluation of legislative proposals having budgetary or organizational implications. (Emphasis supplied.) Irrefragably, it is within the turf of the DBM Secretary to disallow the upgrading, reclassification, and creation of additional plantilla positions in the CHR based on its finding that such scheme lacks legal justification. Notably, the CHR itself recognizes the authority of the DBM to deny or approve the proposed reclassification of positions as evidenced by its three letters to the DBM requesting approval thereof. As such, it is now estopped from now claiming that the nod of approval it has previously sought from the DBM is a superfluity.

The Court of Appeals incorrectly relied on the pronouncement of the CSCCentral Office that the CHR is a constitutional commission, and as such enjoys [20] fiscal autonomy. Palpably, the Court of Appeals Decision was based on the mistaken premise that the CHR belongs to the species of constitutional commissions. But, Article IX of the Constitution states in no uncertain terms that only the CSC, the Commission on Elections, and the Commission on Audit shall be tagged as Constitutional Commissions with the appurtenant right to fiscal autonomy. Thus: Sec. 1. The Constitutional Commissions, which shall be independent, are the Civil Service Commission, the Commission on Elections, and the Commission on Audit. Sec. 5. The Commission shall enjoy fiscal autonomy. Their approved annual appropriations shall be automatically and regularly released. Along the same vein, the Administrative Code, in Chapter 5, Sections 24 and 26 of Book II on Distribution of Powers of Government, the constitutional commissions shall include only the Civil Service Commission, the Commission on Elections, and the Commission on Audit, which are granted independence and fiscal autonomy. In contrast, Chapter 5, Section 29 thereof, is silent on the grant of similar powers to the other bodies including the CHR. Thus: SEC. 24. Constitutional Commissions. The Constitutional Commissions, which shall be independent, are the Civil Service Commission, the Commission on Elections, and the Commission on Audit. SEC. 26. Fiscal Autonomy. The Constitutional Commissions shall enjoy fiscal autonomy. The approved annual appropriations shall be automatically and regularly released. SEC. 29. Other Bodies. There shall be in accordance with the Constitution, an Office of the Ombudsman, a Commission on Human Rights, and independent central monetary authority, and a national police commission. Likewise, as provided in the Constitution, Congress may establish an independent economic and planning agency. (Emphasis ours.)

From the 1987 Constitution and the Administrative Code, it is abundantly clear that the CHR is not among the class of Constitutional Commissions. As expressed in the oft-repeated maxim expressio unius est exclusio alterius, the express mention of one person, thing, act or consequence excludes all others. Stated otherwise, expressium facit cessare tacitum what is expressed puts an [21] end to what is implied. Nor is there any legal basis to support the contention that the CHR enjoys fiscal autonomy. In essence, fiscal autonomy entails freedom from outside control and limitations, other than those provided by law. It is the freedom to allocate and utilize funds granted by law, in accordance with law, and pursuant to the wisdom and dispatch its needs may require from time to [22] [23] time. InBlaquera v. Alcala and Bengzon v. Drilon, it is understood that it is only the Judiciary, the Civil Service Commission, the Commission on Audit, the Commission on Elections, and the Office of the Ombudsman, which enjoy fiscal [24] autonomy. Thus, in Bengzon, we explained: As envisioned in the Constitution, the fiscal autonomy enjoyed by the Judiciary, the Civil Service Commission, the Commission on Audit, the Commission on Elections, and the Office of the Ombudsman contemplates a guarantee of full flexibility to allocate and utilize their resources with the wisdom and dispatch that their needs require. It recognizes the power and authority to levy, assess and collect fees, fix rates of compensation not exceeding the highest rates authorized by law for compensation and pay plans of the government and allocate and disburse such sums as may be provided by law or prescribed by them in the course of the discharge of their functions. ... The Judiciary, the Constitutional Commissions, and the Ombudsman must have the independence and flexibility needed in the discharge of their constitutional duties. The imposition of restrictions and constraints on the manner the independent constitutional offices allocate and utilize the funds appropriated for their operations is anathema to fiscal autonomy and violative not only of the express mandate of the Constitution but especially as regards the Supreme Court, of the independence and separation of powers upon which the entire

fabric of our constitutional system is based. In the interest of comity and cooperation, the Supreme Court, [the] Constitutional Commissions, and the Ombudsman have so far limited their objections to constant reminders. We now agree with the petitioners that this grant of autonomy should cease to be a meaningless provision. (Emphasis supplied.) Neither does the fact that the CHR was admitted as a member by the Constitutional Fiscal Autonomy Group (CFAG) ipso facto clothed it with fiscal autonomy. Fiscal autonomy is a constitutional grant, not a tag obtainable by membership. We note with interest that the special provision under Rep. Act No. 8522, while cited under the heading of the CHR, did not specifically mention CHR as among those offices to which the special provision to formulate and implement organizational structures apply, but merely states its coverage to include Constitutional Commissions and Offices enjoying fiscal autonomy. In contrast, the Special Provision Applicable to the Judiciary under Article XXVIII of the General Appropriations Act of 1998 specifically mentions that such special provision applies to the judiciary and had categorically authorized the Chief Justice of the Supreme Court to formulate and implement the organizational structure of the Judiciary, to wit: 1. Organizational Structure. Any provision of law to the contrary notwithstanding and within the limits of their respective appropriations authorized in this Act, the Chief Justice of the Supreme Court is authorized to formulate and implement organizational structure of the Judiciary, to fix and determine the salaries, allowances, and other benefits of their personnel, and whenever public interest so requires, make adjustments in the personal services itemization including, but not limited to, the transfer of item or creation of new positions in the Judiciary; PROVIDED, That officers and employees whose positions are affected by such reorganization or adjustments shall be granted retirement gratuities and separation pay in accordance with existing law, which shall be payable from any unexpended balance of, or savings in the appropriations of their respective offices: PROVIDED, FURTHER, That the implementation hereof shall be in accordance with salary rates, allowances and other benefits authorized under compensation standardization laws. (Emphasis supplied.)

All told, the CHR, although admittedly a constitutional creation is, nonetheless, not included in the genus of offices accorded fiscal autonomy by constitutional or legislative fiat. Even assuming en arguendo that the CHR enjoys fiscal autonomy, we share the stance of the DBM that the grant of fiscal autonomy notwithstanding, all government offices must, all the same, kowtow to the Salary Standardization Law. We are of the same mind with the DBM on its standpoint, thusBeing a member of the fiscal autonomy group does not vest the agency with the authority to reclassify, upgrade, and create positions without approval of the DBM. While the members of the Group are authorized to formulate and implement the organizational structures of their respective offices and determine the compensation of their personnel, such authority is not absolute and must be exercised within the parameters of the Unified Position Classification and Compensation System established under RA 6758 more popularly known as [25] the Compensation Standardization Law. (Emphasis supplied.) The most lucid argument against the stand of respondent, however, is the provision of Rep. Act No. 8522 that the implementation hereof shall be in accordance with salary rates, allowances and other benefits authorized under [26] compensation standardization laws. Indeed, the law upon which respondent heavily anchors its case upon has expressly provided that any form of adjustment in the organizational structure must be within the parameters of the Salary Standardization Law. The Salary Standardization Law has gained impetus in addressing one of the [27] basic causes of discontent of many civil servants. For this purpose, Congress has delegated to the DBM the power to administer the Salary Standardization Law and to ensure that the spirit behind it is observed. This power is part of the system of checks and balances or system of restraints in our government. The DBMs exercise of such authority is not in itself an arrogation inasmuch as it is pursuant to the paramount law of the land, the Salary Standardization Law and the Administrative Code. In line with its role to breathe life into the policy behind the Salary Standardization Law of providing equal pay for substantially equal work and to

base differences in pay upon substantive differences in duties and responsibilities, and qualification requirements of the positions, the DBM, in the case under review, made a determination, after a thorough evaluation, that the reclassification and upgrading scheme proposed by the CHR lacks legal rationalization. The DBM expounded that Section 78 of the general provisions of the General Appropriations Act FY 1998, which the CHR heavily relies upon to justify its reclassification scheme, explicitly provides that no organizational unit or changes in key positions shall be authorized unless provided by law or directed by the President. Here, the DBM discerned that there is no law authorizing the creation of a Finance Management Office and a Public Affairs Office in the CHR. Anent CHRs proposal to upgrade twelve positions of Attorney VI, SG-26 to Director IV, SG-28, and four positions of Director III, SG-27 to Director IV, SG-28, in the Central Office, the DBM denied the same as this would change the context from support to substantive without actual change in functions. This view of the DBM, as the laws designated body to implement and administer a unified compensation system, is beyond cavil. The interpretation of an administrative government agency, which is tasked to implement a statute is accorded great respect and ordinarily controls the construction of the courts. [28] In Energy Regulatory Board v. Court of Appeals, we echoed the basic rule that the courts will not interfere in matters which are addressed to the sound discretion of government agencies entrusted with the regulation of activities coming under the special technical knowledge and training of such agencies. To be sure, considering his expertise on matters affecting the nations coffers, the Secretary of the DBM, as the Presidents alter ego, knows from where he speaks inasmuch as he has the front seat view of the adverse effects of an unwarranted upgrading or creation of positions in the CHR in particular and in the entire government in general. WHEREFORE, the petition is GRANTED, the Decision dated 29 November 2001 of the Court of Appeals in CA-G.R. SP No. 59678 and its Resolution dated 11 September 2002 are hereby REVERSED and SET ASIDE. The ruling dated 29 March 1999 of the Civil Service Commision-National Capital Region is REINSTATED. The Commission on Human Rights Resolution No. A98-047 dated 04 September 1998, Resolution No. A98-055 dated 19 October 1998 and

Resolution No. A98-062 dated 17 November 1998 without the approval of the Department of Budget and Management are disallowed. No pronouncement as to costs. SO ORDERED. Puno, Acting C.J., Austria-Martinez, Callejo, Sr., and Tinga, JJ., concur. EN BANC

ANAK MINDANAO PARTY-LIST GROUP, as represented by Rep. Mujiv S. Hataman, and MAMALO DESCENDANTS ORGANIZATION, INC., as represented by its Chairman Romy Pardi, Petitioners,

G.R. No. 166052

Present:

PUNO, C.J., QUISUMBING, YNARES-SANTIAGO, SANDOVAL-GUTIERREZ,

- versus -

CARPIO, AUSTRIA-MARTINEZ, CORONA, CARPIO MORALES, AZCUNA,

THE

EXECUTIVE

TINGA, CHICO-NAZARIO,

SECRETARY, THE HON. EDUARDO R. ERMITA, and THE SECRETARY OF

AGRARIAN/LAND REFORM, THE HON. RENE C. VILLA, Respondents.

GARCIA, VELASCO, JR., NACHURA, and REYES, JJ.

E.O. No. 364, which President Gloria Macapagal-Arroyo issued on September 27, 2004, reads:

EXECUTIVE ORDER NO. 364

Promulgated:

TRANSFORMING THE DEPARTMENT OF AGRARIAN REFORM INTO THE DEPARTMENT OF LAND REFORM

August 29, 2007 x----------------------------------------------------------------------------------------x

WHEREAS, one of the five reform packages of the Arroyo administration is Social Justice and Basic [N]eeds;

WHEREAS, one of the five anti-poverty measures for social justice is asset reform; DECISION WHEREAS, asset reforms covers [sic] agrarian reform, urban land reform, and ancestral domain reform; CARPIO MORALES, J.: WHEREAS, urban land reform is a concern of the Presidential Commission [for] the Urban Poor (PCUP) and ancestral domain reform is a concern of the National Commission on Indigenous Peoples (NCIP);

Petitioners Anak Mindanao Party-List Group (AMIN) and Mamalo Descendants Organization, Inc. (MDOI) assail the constitutionality of Executive Order (E.O.) Nos. 364 and 379, both issued in 2004, via the present Petition for Certiorari and Prohibition with prayer for injunctive relief.

WHEREAS, another of the five reform packages of the Arroyo administration is Anti-Corruption and Good Government;

WHEREAS, one of the Good Government reforms of the Arroyo administration is rationalizing the bureaucracy by consolidating related functions into one department;

of the NCIP shall be ex-officio Undersecretary of the Department of Land Reform for Ancestral Domain Reform.

WHEREAS, under law and jurisprudence, the President of the Philippines has broad powers to reorganize the offices under her supervision and control;

SECTION 4. The PCUP and the NCIP shall have access to the services provided by the Departments Finance, Management and Administrative Office; Policy, Planning and Legal Affairs Office, Field Operations and Support Services Office, and all other offices of the Department of Land Reform.

NOW[,] THEREFORE[,] I, Gloria Macapagal-Arroyo, by the powers vested in me as President of the Republic of the Philippines, do hereby order:

SECTION 5. All previous issuances that conflict with this Executive Order are hereby repealed or modified accordingly.

SECTION 1. The Department of Agrarian Reform is hereby transformed into the Department of Land Reform. It shall be responsible for all land reform in the country, including agrarian reform, urban land reform, and ancestral domain reform.

SECTION 6. This Executive Order takes effect immediately. (Emphasis and underscoring supplied)

E.O. No. 379, which amended E.O. No. 364 a month later or on October 26, 2004, reads:

SECTION 2. The PCUP is hereby placed under the supervision and control of the Department of Land Reform. The Chairman of the PCUP shall be ex-officio Undersecretary of the Department of Land Reform for Urban Land Reform.

EXECUTIVE ORDER NO. 379

SECTION 3. The NCIP is hereby placed under the supervision and control of the Department of Land Reform. The Chairman

AMENDING EXECUTIVE ORDER NO. 364 ENTITLED TRANSFORMING THE DEPARTMENT OF AGRARIAN REFORM INTO THE DEPARTMENT OF LAND REFORM

WHEREAS, Republic Act No. 8371 created the National Commission on Indigenous Peoples;

WHEREAS, pursuant to the Administrative Code of 1987, the President has the continuing authority to reorganize the administrative structure of the National Government.

Section 4. Effectivity. This Executive Order shall take effect immediately. (Emphasis and underscoring in the original)

NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO, President of the Republic of the Philippines, by virtue of the powers vested in me by the Constitution and existing laws, do hereby order:

Petitioners contend that the two presidential issuances are unconstitutional for violating:

THE CONSTITUTIONAL PRINCIPLES OF SEPARATION OF POWERS AND OF THE RULE OF LAW[;] THE CONSTITUTIONAL SCHEME AND POLICIES FOR AGRARIAN REFORM, URBAN LAND REFORM, INDIGENOUS PEOPLES RIGHTS AND ANCESTRAL DOMAIN*; AND+ THE CONSTITUTIONAL RIGHT OF THE PEOPLE AND THEIR ORGANIZATIONS TO EFFECTIVE AND REASONABLE PARTICIPATION IN DECISION-MAKING, INCLUDING [1] THROUGH ADEQUATE CONSULTATION[.]

Section 1. Amending Section 3 of Executive Order No. 364. Section 3 of Executive Order No. 364, dated September 27, 2004 shall now read as follows:

Section 3. The National Commission on Indigenous Peoples (NCIP) shall be an attached agency of the Department of Land Reform.

Section 2. Compensation. The Chairperson shall suffer no diminution in rank and salary.

By Resolution of December 6, 2005, this Court gave due course to the Petition and required the submission of memoranda, with which petitioners and respondents complied on March 24, 2006 and April 11, 2006, respectively.

Section 3. Repealing Clause. All executive issuances, rules and regulations or parts thereof which are inconsistent with this Executive Order are hereby revoked, amended or modified accordingly.

The issue on the transformation of the Department of Agrarian Reform (DAR) into the Department of Land Reform (DLR) became moot and academic,

however, the department having reverted to its former name by virtue of E.O. [2] No. 456 which was issued on August 23, 2005.

The OSG questions, however, the standing of MDOI, a registered peoples organization of Teduray and Lambangian tribesfolk of (North) Upi and South Upi in theprovince of Maguindanao.

The Court is thus left with the sole issue of the legality of placing the [3] Presidential Commission for the Urban Poor (PCUP) under the supervision and control of the DAR, and the National Commission on Indigenous Peoples (NCIP) under the DAR as an attached agency.

As co-petitioner, MDOI alleges that it is concerned with the negative impact of NCIPs becoming an attached agency of the DAR on the processing of ancestral domain claims. It fears that transferring the NCIP to the DAR would affect the processing of ancestral domain claims filed by its members.

Before inquiring into the validity of the reorganization, petitioners locus [4] standi or legal standing, inter alia, becomes a preliminary question.

The Office of the Solicitor General (OSG), on behalf of respondents, [5] concedes that AMIN has the requisite legal standing to file this suit as [6] member of Congress.

Locus standi or legal standing has been defined as a personal and substantial interest in a case such that the party has sustained or will sustain direct injury as a result of the governmental act that is being challenged. The gist of the question of standing is whether a party alleges such personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court depends for [10] illumination of difficult constitutional questions.

Petitioners find it impermissible for the Executive to intrude into the domain of the Legislature. They posit that an act of the Executive which injures the institution of Congress causes a derivative but nonetheless substantial injury, [7] which can be questioned by a member of Congress. They add that to the extent that the powers of Congress are impaired, so is the power of each member thereof, since his office confers a right to participate in the exercise of [8] the powers of that institution.

It has been held that a party who assails the constitutionality of a statute must have a direct and personal interest. It must show not only that the law or any governmental act is invalid, but also that it sustained or is in immediate danger of sustaining some direct injury as a result of its enforcement, and not merely that it suffers thereby in some indefinite way. It must show that it has been or is about to be denied some right or privilege to which it is lawfully entitled or that it is about to be subjected to some burdens or penalties by [11] reason of the statute or act complained of.

Indeed, a member of the House of Representatives has standing to maintain inviolate the prerogatives, powers and privileges vested by the [9] Constitution in his office.

For a concerned party to be allowed to raise a constitutional question, it must show that (1) it has personally suffered some actual or threatened injury as a result of the allegedly illegal conduct of the government, (2) the injury is fairly

traceable to the challenged action, and (3) the injury is likely to be redressed by a [12] favorable action.

direct and specific interest in raising the questions being raised. The presence of these elements MDOI failed to establish, much less allege.

An examination of MDOIs nebulous claims of negative impact and [13] probable setbacks shows that they are too abstract to be considered judicially cognizable. And the line of causation it proffers between the challenged action and alleged injury is too attenuated.

Francisco, Jr. v. Fernando more specifically declares that the transcendental importance of the issues raised must relate to the merits of the petition.

[18]

Vague propositions that the implementation of the assailed orders will work injustice and violate the rights of its members cannot clothe MDOI with the requisite standing. Neither would its status as a peoples organization vest it [14] with the legal standing to assail the validity of the executive orders.

This Court, not being a venue for the ventilation of generalized grievances, must thus deny adjudication of the matters raised by MDOI.

Now, on AMINs position. AMIN charges the Executive Department with transgression of the principle of separation of powers.

La Bugal-Blaan Tribal Association, Inc. v. Ramos, which MDOI cites in support of its claim to legal standing, is inapplicable as it is not similarly situated with the therein petitioners who alleged personal and substantial injury resulting from the mining activities permitted by the assailed statute. And so is Cruz v. [16] Secretary of Environment and Natural Resources, for the indigenous peoples leaders and organizations were not the petitioners therein, who necessarily had to satisfy the locus standi requirement, but were intervenors who sought and were allowed to be impleaded, not to assail but to defend the constitutionality of the statute.

[15]

Under the principle of separation of powers, Congress, the President, and the Judiciary may not encroach on fields allocated to each of them. The legislature is generally limited to the enactment of laws, the executive to the enforcement of laws, and the judiciary to their interpretation and application to cases and controversies. The principle presupposes mutual respect by and between the executive, legislative and judicial departments of the government [19] and calls for them to be left alone to discharge their duties as they see fit.

Moreover, MDOI raises no issue of transcendental importance to justify a relaxation of the rule on legal standing. To be accorded standing on the ground [17] of transcendental importance, Senate of the Philippines v. Ermita requires that the following elements must be established: (1) the public character of the funds or other assets involved in the case, (2) the presence of a clear case of disregard of a constitutional or statutory prohibition by the public respondent agency or instrumentality of government, and (3) the lack of any other party with a more

AMIN contends that since the DAR, PCUP and NCIP were created by [20] statutes, they can only be transformed, merged or attached by statutes, not by mere executive orders.

While AMIN concedes that the executive power is vested in the [21] President who, as Chief Executive, holds the power of control of all the

executive departments, bureaus, and offices, it posits that this broad power of control including the power to reorganize is qualified and limited, for it cannot be [23] exercised in a manner contrary to law, citing the constitutional duty of the President to ensure that the laws, including those creating the agencies, be faithfully executed.

[22]

comprehensive. The legislative body possesses plenary power for all purposes of civil government. Any power, deemed to be legislative by usage and tradition, is necessarily possessed by Congress,unless the Constitution has lodged it elsewhere. In fine, except as limited by the Constitution, either expressly or impliedly, legislative power embraces all subjects and extends to matters of general concern or common interest.

AMIN cites the naming of the PCUP as a presidential commission to be clearly an extension of the President, and the creation of the NCIP as an [24] independent agency under the Office of the President. It thus argues that since the legislature had seen fit to create these agencies at separate times and with distinct mandates, the President should respect that legislative disposition.

While Congress is vested with the power to enact laws, the President executes the laws. The executive power is vested in the President. It is generally defined as the power to enforce and administer the laws. It is the power of carrying the laws into practical operation and enforcing their due observance.

In fine, AMIN contends that any reorganization of these administrative agencies should be the subject of a statute. As head of the Executive Department, the President is the Chief Executive. He represents the government as a whole and sees to it that all laws are enforced by the officials and employees of his department. He has control over the executive department, bureaus and offices. This means that he has the authority to assume directly the functions of the executive department, bureau and office, or interfere with the discretion of its officials. Corollary to the power of control, the President also has the duty of supervising and enforcement of laws for the maintenance of general peace and public order. Thus, he is granted administrative power over bureaus and offices under his control to enable him to discharge his [25] duties effectively. (Italics omitted, underscoring supplied)

AMINs position fails to impress.

The Constitution confers, by express provision, the power of control over executive departments, bureaus and offices in the President alone. And it lays down a limitation on the legislative power.

The line that delineates the Legislative and Executive power is not indistinct. Legislative power is the authority, under the Constitution, to make laws, and to alter and repeal them. The Constitution, as the will of the people in their original, sovereign and unlimited capacity, has vested this power in the Congress of the Philippines. The grant of legislative power to Congress is broad, general and

The Constitutions express grant of the power of control in the President justifies an executive action to carry out reorganization measures under a broad [26] authority of law.

reorganize the administrative structure of the Office of the President. For this purpose, he may take any of the following actions:

In enacting a statute, the legislature is presumed to have deliberated with [27] full knowledge of all existing laws and jurisprudence on the subject. It is thus reasonable to conclude that in passing a statute which places an agency under the Office of the President, it was in accordance with existing laws and jurisprudence on the Presidents power to reorganize.

(1) Restructure the internal organization of the Office of the President Proper, including the immediate Offices, the Presidential Special Assistants/Advisers System and the Common Staff Support System, by abolishing, consolidating, or merging units thereof or transferring functions from one unit to another;

In establishing an executive department, bureau or office, the legislature necessarily ordains an executive agencys position in the scheme of [28] administrative structure. Such determination is primary, but subject to the Presidents continuing authority to reorganize the administrative structure. As far as bureaus, agencies or offices in the executive department are concerned, the power of control may justify the President to deactivate the functions of a particular office. Or a law may expressly grant the President the broad authority [29] to carry out reorganization measures. The Administrative Code of 1987 is one [30] such law:

(2) Transfer any function under the Office of the President to any other Department or Agency as well as transfer functions to the Office of the President from other Departments and Agencies; and

SEC. 30. Functions of Agencies under the Office of the President. Agencies under the Office of the President shall continue to operate and function in accordance with their respective charters or laws creating them, except as otherwise provided in this Code or by law.

(3) Transfer any agency under the Office of the President to any other department or agency as well as transfer agencies to the Office of the President from other departments or [31] agencies. (Italics in the original; emphasis and underscoring supplied)

SEC. 31. Continuing Authority of the President to Reorganize his Office. The President, subject to the policy in the Executive Office and in order to achieve simplicity, economy and efficiency, shall have continuing authority to

In carrying out the laws into practical operation, the President is best equipped to assess whether an executive agency ought to continue operating in accordance with its charter or the law creating it. This is not to say that the legislature is incapable of making a similar assessment and appropriate action within its plenary power. The Administrative Code of 1987 merely underscores the need to provide the President with suitable solutions to situations on hand to

meet the exigencies of the service that may call for the exercise of the power of control.

may not be said to have been issued with grave abuse of discretion or in violation of the rule of law.

x x x The law grants the President this power in recognition of the recurring need of every President to reorganize his office to achieve simplicity, economy and efficiency. The Office of the President is the nerve center of the Executive Branch. To remain effective and efficient, the Office of the President must be capable of being shaped and reshaped by the President in the manner he deems fit to carry out his directives and policies. After all, the Office of the President is the command post of the President. This is the rationale behind the Presidents continuing authority to reorganize the administrative structure of the Office of the [32] President.

The references in E.O. 364 to asset reform as an anti-poverty measure for social justice and to rationalization of the bureaucracy in furtherance of good [37] government encapsulate a portion of the existing policy in the Executive Office. As averred by the OSG, the President saw it fit to streamline the [38] agencies so as not to hinder the delivery of crucial social reforms.

The consolidation of functions in E.O. 364 aims to attain the objectives of simplicity, economy and efficiency as gathered from the provision granting PCUP and NCIP access to the range of services provided by the DARs technical [39] offices and support systems.

The Office of the President consists of the Office of the President proper [33] and the agencies under it. It is not disputed that PCUP and NCIP were formed [34] as agencies under the Office of the President. The Agencies under the Office of the President refer to those offices placed under the chairmanship of the President, those under the supervision and control of the President, those under the administrative supervision of the Office of the President, those attached to the Office for policy and program coordination, and those that are not placed by [35] law or order creating them under any special department.

The characterization of the NCIP as an independent agency under the Office of the President does not remove said body from the Presidents control and supervision with respect to its performance of administrative functions. So it has been opined:

As thus provided by law, the President may transfer any agency under the Office of the President to any other department or agency, subject to the policy in the Executive Office and in order to achieve simplicity, economy and [36] efficiency. Gauged against these guidelines, the challenged executive orders

That Congress did not intend to place the NCIP under the control of the President in all instances is evident in the IPRA itself, which provides that the decisions of the NCIP in the exercise of its quasi-judicial functions shall be appealable to the Court of Appeals, like those of the National Labor Relations Commission (NLRC) and the Securities and Exchange Commission (SEC). Nevertheless, the NCIP, although independent to a certain degree, was placed by Congress under the office of the President and, as such, is still subject to the Presidents power of control and supervision granted under Section 17, Article VII of the Constitution with respect to

its performance of administrative functions[.] supplied)

[40]

(Underscoring

as reflected in separate provisions in different parts of the Constitution. It argues that the Constitution did not intend an over-arching concept of agrarian reform to encompass the two other areas, and that how the law is ordered in a certain way should not be undermined by mere executive orders in the guise of administrative efficiency.

[46]

In transferring the NCIP to the DAR as an attached agency, the President effectively tempered the exercise of presidential authority and considerably recognized that degree of independence.

The Court is not persuaded.

The Administrative Code of 1987 categorizes administrative relationships into (1) supervision and control, (2) administrative supervision, and (3) [41] attachment. With respect to the third category, it has been held that an attached agency has a larger measure of independence from the Department to which it is attached than one which is under departmental supervision and control or administrative supervision. This is borne out by the lateral relationship between the Department and the attached agency. The [42] attachment is merely for policy and program coordination. Indeed, the essential autonomous character of a board is not negated by its attachment to a [43] commission.

The interplay of various areas of reform in the promotion of social justice is [47] not something implausible or unlikely. Their interlocking nature cuts across labels and works against a rigid pigeonholing of executive tasks among the members of the Presidents official family. Notably, the Constitution inhibited from identifying and compartmentalizing the composition of the Cabinet. In vesting executive power in one person rather than in a plural executive, the [48] evident intention was to invest the power holder with energy.

AMIN argues, however, that there is an anachronism of sorts because there can be no policy and program coordination between conceptually different areas of reform. It claims that the new framework subsuming agrarian reform, urban land reform and ancestral domain reform is fundamentally incoherent in view of [44] the widely different contexts. And it posits that it is a substantive transformation or reorientation that runs contrary to the constitutional scheme and policies.

AMIN takes premium on the severed treatment of these reform areas in marked provisions of the Constitution. It is a precept, however, that inferences drawn from title, chapter or section headings are entitled to very little [49] [50] weight. And so must reliance on sub-headings, or the lack thereof, to support a strained deduction be given the weight of helium.

AMIN goes on to proffer the concept of ordering the law which, so it alleges, can be said of the Constitutions distinct treatment of these three areas,

[45]

Secondary aids may be consulted to remove, not to create [51] doubt. AMINs thesis unsettles, more than settles the order of things in construing the Constitution. Its interpretation fails to clearly establish that the so-called ordering or arrangement of provisions in the Constitution was

consciously adopted to imply a signification in terms of government hierarchy from where a constitutional mandate can per se be derived or asserted. It fails to demonstrate that the ordering or layout was not simply a matter of style in constitutional drafting but one of intention in government structuring. With its inherent ambiguity, the proposed interpretation cannot be made a basis for declaring a law or governmental act unconstitutional.

jurisdiction and adjudicatory functions of the NCIP concerning all claims and disputes involving rights of indigenous cultural communities and

A law has in its favor the presumption of constitutionality. For it to be nullified, it must be shown that there is a clear and unequivocal breach of the Constitution. The ground for nullity must be clear and beyond reasonable [52] doubt. Any reasonable doubt should, following the universal rule of legal [53] hermeneutics, be resolved in favor of the constitutionality of a law.

Ople v. Torres on which AMIN relies is unavailing. In that case, an administrative order involved a system of identification that required a delicate adjustment of various contending state policies properly lodged in the legislative arena. It was declared unconstitutional for dealing with a subject that should be covered by law and for violating the right to privacy.

[54]

In the present case, AMIN glaringly failed to show how the reorganization by executive fiat would hamper the exercise of citizens rights and privileges. It rested on the ambiguous conclusion that the reorganization jeopardizes economic, social and cultural rights. It intimated, without expounding, that the agendum behind the issuances is to weaken the indigenous peoples rights in favor of the mining industry. And it raised concerns about the possible retrogression in DARs performance as the added workload may impede the implementation of the comprehensive agrarian reform program.

AMIN has not shown, however, that by placing the NCIP as an attached agency of the DAR, the President altered the nature and dynamics of the

indigenous peoples. Nor has it been shown, nay alleged, that the reorganization [55] was made in bad faith.

WHEREFORE, the petition is DISMISSED. Executive Order Nos. 364 and 379 issued on September 27, 2004 and October 26, 2004, respectively, are declared not unconstitutional.

As for the other arguments raised by AMIN which pertain to the wisdom or soundness of the executive decision, the Court finds it unnecessary to pass upon them. The raging debate on the most fitting framework in the delivery of social services is endless in the political arena. It is not the business of this Court to join in the fray. Courts have no judicial power to review cases involving political questions and, as a rule, will desist from taking cognizance of speculative or [56] hypothetical cases, advisory opinions and cases that have become moot.

SO ORDERED.

Finally, a word on the last ground proffered for declaring the unconstitutionality of the assailed issuances that they violate Section 16, Article [57] XIII of the Constitution on the peoples right to participate in decision-making through adequate consultation mechanisms.

The framers of the Constitution recognized that the consultation mechanisms were already operating without the States action by law, such that the role of the State would be mere facilitation, not necessarily creation of these consultation mechanisms. The State provides the support, but eventually it is the people, properly organized in their associations, who can assert the right and pursue the objective. Penalty for failure on the part of the government to consult could only be reflected in the ballot box and would not nullify [58] government action.

Bagaoisan vs Nat'l Tobacco Administration. G.R. No. 152845 : August 5, 2003. ADMINISTRATIVE CASE. BY C Y. DRIANITA BAGAOISAN, FELY MADRIAGA, SHIRLY TAGABAN, RICARDO SARANDI, SUSAN IMPERIAL, BENJAMIN DEMDEM, RODOLFO DAGA, EDGARDO BACLIG, GREGORIO LABAYAN, HILARIO JEREZ, and MARIA CORAZON CUANANG, petitioners, vs. NATIONAL TOBACCO ADMINISTRATION, represented by ANTONIO DE GUZMAN and PERLITA BAULA, respondents. VITUG, J.: FACTS 1. The petitioner was terminated from there position in the national tobacco administration as a result of the executive order issued by president Estradawhic mandates for the stream lining of the national tobacco administration, a government agency under the department of agriculture. 2. The petitioners filed a letter of appeal to the civil service commission to recall the ossp. 3. Petitioner all file a petition for certiorari with prohibition an mandamus with prayer for preliminary mandatory injunction and a temporary restraining order with the regional trial court of Batak to prevent the respondent from enforcing the notice of termination and from austing the petitioners in there respective offices 4. The regional trial court issued an order ordering the national tobacco administration to appoint the petitioner to the osspto position similar to the one that they hold before. 5. The national tobacco administration appealed to the court of appeals who reversed the decision of the RTC 6. Petitioner appealed to the supreme court. ISSUE: Whether or not, the reorganization of the national tobacco administration is

valid true issuance of executive orderby the president. According to the supreme court,The president has the power to reorganized an office to achieve simplicity ,economy and efficiency as provided under executive order 292 sec. 31 and section 48 of RA 7645 which provides that activities ofexecutive agencies may be scaled down if it is no longer essential for thedelivery of public service. WHEREFORE, the Motion to Admit Petition for En Banc resolution and the Petition for an En Banc Resolution are DENIED for lack of merit. Let entry of judgmen be made in due course. No costs National Land Titles and Deeds Registration Administration v. Civil Service Commission FACTS Violeta Garcia was appointed Deputy Register of Deeds VII under permanent status, and was later reclassified to DeputyRegister of Deeds III. EO No. 649 (Reorganizing the Land Registration Commission into the NALTDRA) abolished all existing positions in theLRC. Garcia was issued appointment under temporary status for not being a member of the Philippine Bar. She appealed. She waslater on terminated for receiving bribery. Her ap peal was dropped by the Merit Systems Protection Board due to theexpiration of her temporary status. However, the CSC directed that Garcia be restored to her position under the vested righttheory, stating that the new requirement of bar membership applied prospectively, or to lawyer positions on or after February 9, 1981, when EO 649 took effect. Petitioner NALTDRA filed a petition for review on certiorari of the resolution of the CSC. It argued that EO 649 abolishedall existing positions in the LRC and created new offices which required the issuance of new appointments to qualified officeholders. Thus, EO 649 applies to Garcia.ISSUES1 . W / N E O 6 4 9 abolished the LRC? YES2.W/N the abolition was done in g o o d f a i t h ? Y E S 3.W/N Garcia has a vested right in the position ? NORATIO1. W/N EO 649 abolished the LRC?

YES. The question of wh ether of not a law abolishes an office is one of legislative intent about which there can be nocontroversy if there is an explicit declaration in the law itself. EO 649 expressly provided for the abolition of existing positions under Section 8, to wit: Abolition of Existing Positions in the Land Registration Commission .All structural units in the LRC and in the registries of deeds, and all positions therein shall cease to exist from the date specified in the implementing order to be issued by the President pursuant to the preceding paragraph. Their pertinent functions,applicable appropriations, record s, equip ment and propert y shall be tran sferred to the appropriate staff or offices thereincrea ted. Abolition - there is in law no occupant. Thus, there can be no tenure to speak of. Removal - the post subsists and that one is merely separated therefrom.2. W/N the abolition was done in good faith? YES The power to reorganize is not absolute. But it is valid if it is pursued in good faith, as when it is for the purpose of economyor to make bureaucracy more efficient. If the newly created office has substantially new, different or additional functions, duties or powers, so that it may be said infact to create an office different from the one abolished, even though it embraces all or some of the duties of the old office itwill be considered as an abolition of one office and the creation or a new or different one. To this end, the requirement of bar memb ership to qualify for key position s in the NALTDRA was imposed to meet the changing circumstances and new development of the times.3. W/N Garcia has a vested right in the position? NO

Private Garcia did not have such qualification. The additional qualification was not intended to remove her from office.Rather it was a criterion imposed concomitant with a valid reorganization measure There is no such thing as a vested interest or an estate in an office, or even an absolute right to hold it. Except f o r constitutional offices which provide for special immunity as regards salary and tenure, no one can be said to have any vestedright in an office or salary. There is no vested property right to be re-employed in a reorganized office Republic of the Philippines SUPREME COURT Manila EN BANC

G.R. No. 103121 September 10, 1993 REMEDIOS T. BLAQUERA, HERMINIO GUTIERREZ, AUGUSTO R. ORAA, VIRGINIA MALLILLIN, NENA T. AQUINO, RIZALYN DELA CRUZ, SATURNINO Y. CANMANGONAN, ALICIA S. UMEREZ, PRESENTACION C. DIEZ, VICTORIO M. VILLAGRACIA, FELISA C. GALARAGA, NELIA D. CANUELA, EDITHA P. FRIGILLANA, GLORIA T. DACANAY, BERNARD M. DE LARA, NORMA G. SORIANO, ADELAIDA CALOOY, VIRGINIA B. MILLANO, ADONIS S. JAVIER, SYLVIA C. ABUNGAN, BENJAMIN S. CADAWAN, NOEL V. FERRER, JOSUE PEREZ, RAMON QUEBRAL, ALFONSO DELA CRUZ, JOEL ALMOSARA, IMELDA CLARION, ANTONIO P. GUANSING, JR., WILFREDO VILLANUEVA, WENCESLAO MAGO, ANTONIO DEQUINA, ANGELO A. JAVIER, JOSE DE GUZMAN, REYNALDO VECINO, JOSEFA CAABAY, EXPEDITO SORIA, LAMBERTO MELAD, REBE LOZANO, DANILO C. ADINA, JOSE P. ARZADON, EDWIN L. DE VERA, BERNARDO M. MENDOZA, TITA H. MACARAEG, FELIFE B. SANTOS, LUCIO R. SUYAT, SANTIAGO R. FRAGANTE, FRANCISCA D. CANUEL, EVELYN B. LORQUE, LUIS MENDOZA, JAIME GATAN, PROTACIO ARAGON, JR., ARTURO T. SANTOS, R0GELIO S. GALANG, JOSEFA B.

PELIAS, EDWARD P. FRANCO, DOMINADOR ABAD, MAXIMIANO ISADA, JR., MAMAO C. MACAPODI, JUAN CANLAS, SALVADOR PATA, ROLANDO LACANDASO, ALFONSO DE LEON, RODOLFO VELASCO, JR., DALMACIO H. NADAL, RENE CILINDRO, ELENA CASIS, ISABEL AMISCARAY, ELIZABETH VIDAL, MANUEL D. DE GUZMAN, ESTRELLA S. PABAIRA, VIOLETA S. TUVERA, LILIA T. TABENA, EDNA L. DOLLAGA, RODOLFO E. SIBAYAN, ALEXANDER R. PAYUMO, VIRGILIO R. ABAYA, TEMPOLOK G. AMIR, VICTOR B. BALDE, LULLA V. BERNANDO, ANGEL CADIZ, LUZ F. CADIZ, GUADALUPE P. CORLONCITO, FLORDELIZA P. FEDERIS, BERNANDO P. IBE, SALAMBAI A. KADATUAN, ZENAIDA A. LEANDER, TEDDY B. MARASIGAN, PASTOLERO A. NOEMI, ROBERTO C. DELA PAZ, AUGUSTO J. SANTOS, SAGUNDINA A. SARONA, IRISH S. TINO, CRISENTE C. MANIO, PUREZA T. SAYON, PETRONIO TADIOSA, HERMINIGILDO S. ALLASCO, ELVIRA C. SABANDO, SERGIO ABUAN, MITCHELL A. LACHICA, CELEDONIO C. BERNABE, MA. THERESA G. AQUINO, ALEJANDRO R. SIBUCAO, JR., EVELYN V. MENDEZ, DIGNICITA G. SERRANO, LILIA, J. RADA, NICASIO F. ROMERO, ANGELINA B. FERNANDEZ, INOCENCIA M. SANTOS, WILFREDO H. ZAPANTA, SATURNINA V. VITE, GUADENCIA V. FLORES, PEDRO VICTORIA, CATALINO ALCONIZ, MARIA REBECCA B. BURGOS, MA. MAGDALENA ESPEJO-MORENO, ROLANDO I. ETEROSA, ROMEO L. MANOSO, SATOR H. ALTAREJOS, NENITA N. AQUINO, FAUSTO S. BERNARDO, ROSARION MERLINDA B. BELLEDO, MANUEL V. DELA CRUZ, EMMIE L. IGNACIO, ANABELL C. LABORTE, ALBERT A. MAGALANG, JAIME P. MALLARE, CONCEPCION C. OCAMPO, FLORENTINO C. PALO, REGULO S. QUEJADA, LUIS FIDEL B. RONQUILLO, NELIA M. SANTOS, MALANE DELOS SANTOS, REBECCA E. SARACHO, LIZ Y. VELARDE, ANITA R. ABIERA, ARMANDO V. ACOSTA, ADVINCULA B. ADVINCULA, FELIMON J. ALANO, ASUNCION T. AMIN, LORELIE N. ANDRES, RAUEL A. BALAJADIA, ROSARIO B. BATOON, DOLORES B. BETRAN, PRIMA M. CABRAL, ROSARIO H. CAPILI, BRIGIDA N. DE CASTRO, TEODORO A. DE CASTRO, DUNN HERMANN C. DALIRE, JOCOBO G. FESALBON, FE G. GAMBA, MARIA JAY A. GENCIANA, ROSARIO G. GUIRON, CONSTANTINO C. GODOY, FRANCISCO F. GODOY, JOVITA C. GOMEZ, TEODORA R. KUIZON, JOSEPHINE G. L. LAUCHENGCO, PUBLIO P. MALLINLLIN, JULIE C. MANALO, ROSALINDA P. MEMPIN, HERNANI G. DEL MUNDO, EDERLINA C. MUSNGI, FE V. NOCHE, PERCIDA G. NORTON, EVA A. NUGUIM, EMELITA S. DEL PRADO, EMERICO B. PUMARADA, BENJAMINA QUINACUAN, ISABEL C. RIVERA, RAQUEL P. DEL ROSARIO, OLYMPIA M. DE SAGUN, JAIME F. SANTOS, MARIO L. SANTOS, VIRGILIO M. SARMIENTO,

LILIBETH M. SOAN, LOIDA S. VALENCIA, ANGELINA A. VELASQUEZ, ADELINA B. VICTORIA, MA. ROSARIO MANZANO, ROSALINDA C. BALANCIO, GLORIA KABIGTING, MARIO N. TOLENTINO, VICTORIA C. TIONGSON, EMILIO S. MEDINA, SYLVIA H. CASTRO ABUNGAN, DEMCIA T. BRAGANZA, MARINO K. SANTOS, TERESITA B. TOMAS, PEDRILLO B. ALFAREJOS, JANETTE L. GARCIA, DON E. ABARRIENTOS, REYNALDO M. CENTENO, CRISTETA A. CASTRO, WILFREDO B. BONILLA, DELIA C. SERRANO, CONCESA IMPOS-ALDAY, RESTITUTO P. PARDIAS, EVANGELINE T. CORCUERA, ANICETO D. ORDEN, ESTELITA S.I. FLORES, PATRIA ABUNALES, SELFA C. FERNANDEZ, VIOLETA A. BUAGAS, LYDIA VILLARIN, LULU CORRALES, ZENAIDA MALLATE, RAQUEL FUENTES, EMELINA GAMBA, JEAN MIN LADIA, CHONA ZAMORA, ALICIA CIMATU, REYNALDO P. ALCANCES, MARINELA CECILIA T. PASCUA and DOLORES T. TOLENTINO, petitioners, CONRADO SALVADOR and MIGUEL CAISIP, Intervenors, vs. THE CIVIL SERVICE COMMISSION, HON. FULGENCIO S. FACTORAN, JR., as the Secretary of the Department of Environment and Natural Resources, HON. GUILLERMO N. CARAGUE, as the Secretary of the Department of Budget and Management, respondents. Padilla, Jimenez, Kintanar & Asuncion Law Office for petitioners. The Solicitor General for respondents.

Reorganization and transferred its remaining functions to the Department of Budget and Management (DBM for brevity), DENR Secretary Fulgencio S. Factoran, Jr. submitted to the DBM a staffing pattern consisting of 28,106 positions. The DBM approved only 22,956 positions and the petitioners' positions were among those trimmed off the new plantilla. As the lean plantilla did not meet the manpower requirements of the DENR, Secretary Factoran submitted a staffing pattern consisting of 24,614 positions. On July 4, 1988, the DBM released a revised staffing pattern containing 23,612 positions only which was 1,002 positions less than what the DENR Secretary requested and which still did not include the positions of the petitioners. On July 29, 1988, the DENR requested the DBM to restore 839 positions which DBM had disapproved earlier. The request was approved on September 14, 1988 after long negotiations between the DENR and DBM, subject to the condition that these positions shall be coterminous with the appointees but not to exceed three (3) years. The implications of this are: 1. If the appointee desires to retire, resign, transfer to other office or leave his employment for any reason whatsoever, the position is automatically abolished, even if the three-year period has not lapsed. 2. By the end of the 3rd year, the employee holding a coterminous position is automatically separated. (p. 7, Rollo.)

GRIO-AQUINO, J.: The petitioners and intervenors who are permanent employees in the Department of Environment and Natural Resources (DENR) filed this petition for prohibition and mandamus with a prayer for the issuance of a writ of preliminary injunction and/or restraining order, to stop the respondents from removing them from their positions in the DENR pursuant to the 1987 reorganization of that department under Executive Order No. 192 dated June 10, 1987. To carry out said reorganization, and pursuant to Executive Order No. 165 of May 5, 1987 which abolished the Commission of Government Meanwhile, on June 10, 1988, Republic Act No. 6656 "An Act to Protect the Security of Tenure of Civil Service Officers and Employees In the Implementation of Government Reorganization," was passed. Section 11 thereof orders all departments and agencies to complete the 1987 reorganization of the executive branch within ninety (90) days from the approval of the law, or on or before September 8, 1988. The directors of the affected bureaus (the Environmental Management Bureau, Forestry Management Bureau, Parks and Wildlife Bureau, Mines and Geosciences Bureau) requested the DENR and DBM Secretaries to convert the coterminous

positions to permanent. The DENR Secretary favorably endorsed their request citing changes in the functions of the DENR as justification for the request (Annex B). The request was reiterated by the DENR Assistant Secretary for Services Management but it was denied on December 19, 1990 by DBM Secretary Guillermo Carague. The DENR Secretary's motion for reconsideration was not acted upon by Secretary Carague. Meanwhile, the General Appropriations Act of FY 1991 (R.A. No. 7078) provided for the salaries of the coterminous employees in the DENR until December 31 ,1991. On August 6, 1991, DENR Secretary Factoran submitted a memorandum to President Aquino, through Executive Secretary Franklin Drilon, requesting that the 597 coterminous positions of the DENR (which would expire on September 15, 1991) be extended up to December 31, 1991, without prejudice to DBM's action on his (Secretary Factoran's) motion for reconsideration. The Office of the President granted the request. But as Secretary Factoran's request for reconsideration of Secretary Carague's order remained unacted upon, the petitioners filed in this Court on December 2 3 19, 1991, the present petition for prohibition and mandamus with a prayer for the issuance of a restraining order/preliminary injunction. The grounds relied upon by the petitioners are: 1. That the impending mass dismissal of petitioners from employment on December 31, 1991 would violate their right to security of tenure and the provisions of Republic Act. No. 6656; 2. That the appointment of the petitioners to the so-called coterminous positions deprived them of the right to due process;

3. The creation of positions "coterminous with the incumbent but not exceeding three years" is not in accordance with civil service laws, rules and regulations; and 4. Respondent DBM Secretary has no discretion but to grant respondent DENR Secretary's request for regularization of the coterminous positions. Upon receipt of the petition, the Court issued a temporary restraining order directing the DENR Secretary to "cease and desist from terminating the services of the petitioners effective December 31, 1991 and from preventing them from performing their duties and functions as officials and employees of the DENR corresponding to their respective positions" (p. 51, Rollo). On January 23, 1992, petitioners filed an "Urgent Motion to Cite Respondents for Contempt" for failure to pay their salaries, allowances and such other benefits due them while they continue to perform their respective duties and responsibilities in the DENR. On March 2, 1992, petitioners filed a Supplemental Motion for Contempt on the ground that besides not paying their salaries respondents made them sign new appointments making them "coterminous with the incumbent." These acts of the respondents allegedly violate the Restraining Order issued by this Court on December 27, 1991. In its Comment, the Office of the Solicitor General denied that public respondents have violated the temporary restraining order. Respondent DENR Secretary complied with the TRO by not terminating the services of the petitioners. Non-payment of the petitioners' salaries was due to the lack of an appropriation of funds for their salaries. Besides, the TRO did not require the DBM to appropriate funds for their salaries. The DBM did not violate the TRO when it required petitioners to sign new appointments making their positions coterminous with the incumbent for it (DBM) was not directed by the TRO to desist from committing any act. On January 23, 1992, Reynaldo Alcances, Marinela Cecilia T. Pascua and Dolores T. Tolentino, through the petitioners counsel, asked to be included as petitioners because their names had been inadvertently omitted from the list of petitioners.

Their motion may be granted for they are similarly situated as the original petitioners who have continued to work in the DENR beyond December 31, 1991. On February 24, 1992, a Motion for Leave to Intervene was filed by Conrado Salvador and Miguel Caisip which was not opposed by the petitioners. Before the Court could grant them leave to intervene, they filed a complaint in Intervention on July 20, 1993. On March 6, 1992, Alfredo S. Marchadesch, Jr. and Carolina S. Cavan withdrew as petitioners because they had accepted new appointments in the DENR. On April 13, 1992, the public respondents, through the Solicitor General, filed their Comment on the petition. The petitioners argue that their dismissal on December 31, 1991, would violate their right to security of tenure safeguarded by paragraph (3), Section 2 of Article IX-B of the Constitution, and the 2nd paragraph, Section 3 of Article XIII thereof. They also invoke Sections 1 and 11 of Republic Act No. 6656, which provide that "departments and agencies of the government have only ninety (90) days from the approval of the Act to undertake the complete implementation of their respective reorganization plan, hence, the DENR had only up to September 8, 1988, to reorganize. Their dismissal on December 31, 1991, goes beyond the period allowed by law for the reorganization of the DENR. We find merit in the petition. It may be recalled that upon her assumption of office as President of the Philippines after the EDSA Revolution, President Corazon Aquino invested herself under Sections 1 and 2, Article III of the Freedom Constitution (Proclamation No. 3, March 25, 1986) with power and authority to reorganize the Government "by proclamation or executive order or by designation or appointment and qualification of the successor of any elective and appointive officials under the 1973 Constitution." The reorganization was to be completed within one year from February 25, 1986, or by February 25, 1987.

Sec. 1. In the reorganization of the government, priority shall be given to measures to promote economy, efficiency, and the eradication of graft and corruption. Sec. 2. All elective and appointive officials and employees under the 1973 Constitution shall continue in office until otherwise provided by proclamation or executive order or upon the designation or appointment and qualification of their successors, if such is made within a period of one year from February 25, 1986. (Emphasis ours.) However, "in order to obviate unnecessary anxiety and demoralization among the deserving officials and employees, particularly in the Career Civil Service" arising from the reorganization of the government, the President issued E. O. No. 17 on May 28, 1986 providing guidelines for the implementation of the reorganization "to protect career civil servants whose qualifications and performance meet the standards of service demanded by the new Government, and to ensure that only those found corrupt, inefficient and undeserving are separated from the government service." The head of each Ministry (now Department) was tasked to "see to it that the separation and replacement of officers and employees is made only for justifiable reasons" which are: Sec. 3. The following shall be the grounds for separation/ replacement of personnel: 1. Existence of a case for summary dismissal pursuant to Section 40 of the Civil Service Law; 2. Existence of a probable cause for violation of the Anti-Graft and Corrupt Practice Act as determined by the Ministry Head concerned; 3. Gross incompetence or inefficiency in the discharge of functions;

4. Misuse of public office for partisan political purposes; 5. Any other analogous ground showing that the incumbent is unfit to remain in the service or his separation/replacement is in the interest of the service. (E.O. No. 17.) Excluded from the protection of E.O. No. 17 are: Sec. 11. This Executive Order shall not apply to elective officials or those designated to replace them, presidential appointees, casual and contractual employees, or officials and employees removed pursuant to disciplinary proceedings under the Civil Service Law and Rules, and to those laid off as a result of the reorganization undertaken pursuant to Executive Order No. 5. (Emphasis supplied.) As a result of the ratification of the 1987 Constitution by the nation, the reorganization deadline in Proclamation No. 3 (February 25, 1987) was advanced to February 2, 1987. Although the security of tenure of government employees is protected by Section 2, subpar. (3), Title B, Article IX of the 1987 Constitution, thus: Sec. 2. (3) No officer or employee of the civil service shall be removed or suspended except for cause provided by law. Section 16 of Article XVIII (Transitory Provisions) of the Constitution still allows the separation of employees "not for cause but as a result of the reorganization pursuant to Proclamation No. 3 . . . and the reorganization following the ratification of this Constitution." Section 16 is quoted hereunder: Sec. 16. Career civil service employees separated from the service not for cause but as a result of the reorganization pursuant to Proclamation No. 3 dated March 25, 1986 and

the reorganization following the ratification of this Constitution shall be entitled to appropriate separation pay and to retirement and other benefits accruing to them under the laws of general application in force at the time of their separation. In lieu thereof, at the option of the employees, they may be considered for employment in the Government or in any of its subdivision, instrumentalities, or agencies, including government-owned or controlled corporations and their subsidiaries. This provision also applies to career officers whose resignation, tendered in line with the existing policy, had been accepted. (Emphasis ours.) E. O. No. 192 dated June 10, 1987 "PROVIDING FOR THE REORGANIZATION OF THE DEPARTMENT OF ENVIRONMENT, ENERGY AND NATURAL RESOURCES, RENAMING IT THE DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES, AND FOR OTHER PURPOSES" is a "reorganization following the ratification of this Constitution." Although impliedly sanctioned under Section 16 of the Transitory Provisions of the 1987 Constitution, it must nevertheless pass the test of good 4 faith to be valid. Good faith, we ruled in Dario vs. Mison is a basic ingredient for the validity of any government reorganization. It is the golden thread that holds together the fabric of the reorganization. Without it, the cloth would disintegrate. Reorganization is a recognized valid ground for separation of civil service employees, subject only to the condition that it be done in good faith. No less than the Constitution itself in Section 16 of the Transitory Provisions, together with Sections 33 and 34 of Executive Order No. 6656, support this conclusion with the declaration that all those not so appointed in the implementation of said reorganization shall be deemed separated from the service with the concomitant recognition of their entitlement to appropriate separation benefits and/or retirement plans of the reorganized government agency. (Domingo vs. Development Bank of the Phils., 207 SCRA 766.)

A reorganization in good faith is one designed to trim the fat off the bureaucracy and institute economy and greater efficiency in its operation. It is not a mere tool of the spoils system to change the face of the bureaucracy and destroy the livelihood of hordes of career employees in the civil service so that the newpowers-that-be may put their own people in control of the machinery of government. Reorganizations in this jurisdiction have been regarded as valid provided they are pursued in good faith. As a general rule, a reorganization is carried out in "good faith" if it is for the purpose of economy or to make bureaucracy more efficient. In that event, no dismissal (in case of dismissal) or separation actually occurs because the position itself ceases to exist. And in that case, security of tenure would not be a Chinese wall. Be that as it may, if the "abolition," which is nothing else but a separation or removal, is done for political reasons or purposely to defeat security of tenure, or otherwise not in good faith, no valid "abolition" takes place and whatever "abolition" is done, is void ab initio. There is an invalid "abolition" as where there is merely a change of nomenclature of positions, or where claims of economy are belied by the existence of ample funds. (Dario vs. Mison, 176 SCRA 84, 92-93.) There is no dispute over the power to reorganize whether traditional, progressive, or whatever adjective is appended to it. However, the essence of constitutional government is adherence to basic rules. The rule of law requires that no government official should feel free to do as he pleases using only his avowedly sincere intentions and conscience to guide him. The fundamental standards of fairness embodied in the bona fide rule cannot be disregarded. More particularly, the auto-limitations imposed by the President when she proclaimed the Provisional Constitution and issued executive orders as sole law maker and the standards and restrictions prescribed by the present Constitution and the Congress established under it,

must be obeyed. Absent this compliance, we cannot say that a reorganization is bona fide. (Mendoza vs. Quisumbing, 186 SCRA 108.) In fact, the right of the state to reorganize the Government resulting in the separation of career civil service employees under the 1987 Constitution is beyond dispute, but as emphasized in the Mison case (G.R. Nos. 81954, 81967 and 82023, August 8, 1989) and in the cases of Bondoc vs. Sec. of Science and Technology (G.R. No. 83025), Quisumbing vs. Tupas (G.R. No. 87401) and Hamed vs.Civil service Commission (G.R. No. 89069), all of which having been promulgated on July 19, 1990,said reorganization, ouster, and appointments of successors must be made in GOOD FAITH. (Emphasis supplied; Siete vs. Santos, 190 SCRA 50, 51-52.) There appears to be no sufficient justification for the reorganization of the DENR, as revised by the DBM. The fact that Section 25 of E.O. No. 192 changed the status of all the officers and employees of the DENR from permanent or regular to mere "hold-overs," flagrantly violating the employees' right to due process, taints the reorganization process. Section 25 provides: Sec. 25. New Structure and Pattern. Upon approval of this executive Order, the officers and employees of the Department shall in a hold-over capacity, continue to perform their respective duties and responsibilities and receive the corresponding salaries and benefits unless in the meantime they are separated from government service. . . . Those incumbents whose positions are not included therein, or, who are not reappointed, shall be deemed separated from the service. . . .

In Domingo vs. DBP, 207 SCRA 766, the Court emphasized that a reorganization "does not justify a detraction from the mandatory requirement of notice and hearing" (emphasis ours) to the affected officials and employees. Section 2 of Republic Act No. 6656 provides that "no officer or employee in the career service shall be removed except for a valid cause and after due notice and hearing." Thus, there is no question that while dismissal due to a bona fide reorganization is recognized as a valid cause, this does not justify a detraction from the mandatory requirement of notice and hearing. . . . (Emphasis supplied; Domingo vs. Development Bank of the Philippines, 207 SCRA 766.) In Mendoza vs. Quisumbing, 186 SCRA 108, the Court noted the pernicious effect of the "hold-over" provision (Sec. 24) in Executive Order No. 117 reorganizing the Department of Education and Culture which uprooted thousands of school teachers and employees, thus: . . . Pursuant to the above provision [Sec. 24, E. O. No. 117], around 400,000 school teachers, janitors, clerks, principals, supervisors, administrators, and higher officials were placed on "hold-over status." When a public officer is placed on hold-over status, it means that his term has expired or his services terminated but he should continue holding his office until his successor is appointed or chosen and has qualified. (See Topacio Nueno vs. Angeles, 76 Phil. 12 [1946]). (Mendoza vs. Quisumbing, 186 SCRA 108, 110-111.) That the reorganization of the DENR was not intended to achieve economy and efficiency, is revealed by the admission in page 16 of the public respondents' Comment that the new staffing pattern of the department contains "991 positions more than the total number of permanent positions in the DENR before the reorganization." In fact, DENR Secretary Fulgencio Factoran (who is presumed to know better than anyone else the needs of his department) had urged the DBM to restore the positions of the petitioners because they are "vital to the functions, mandates and objectives of the DENR" (p. 30, Comment).

Since the abolition of their positions will not conduce to either "efficiency" or "economy" in the Service, which are the principal justifications for any government overhaul, then, obviously, the reorganization of the DENR is not justified. The conversion of the petitioners from permanent to "coterminous" employees is a wholesale demotion of personnel which is tantamount to removal without cause and without due process. (Floreza vs. Ongpin, 182 SCRA 692, 693.) It is therefore null and void. WHEREFORE, the petition for certiorari in GRANTED. The removal of the petitioners and intervenors from office is declared null and void. The respondent Secretary of the Department of Environment and Natural Resources (DENR), or his successor in office, is ordered to reinstate the petitioners to their former or equivalent positions in the DENR without loss of seniority and other benefits, and to issue regular and permanent appointments to them for the positions in the new organization and staffing pattern corresponding to their positions in the 1986 plantilla. The respondent Secretary of the Department of Budget and Management, or his successor in office, is ordered to reinstate the appropriation for the salaries of the petitioners and intervenors. The temporary restraining order which the Court issued in this case is made permanent. The petitioners' motion to cite the public respondents for contempt of court is DENIED for having become moot after the latter's resignation from office upon the change of administration on June 30, 1992. No costs. SO ORDERED.

G.R. No. 115863 March 31, 1995AIDA D. EUGENIO, petitioner,vs. CIVIL SERVICE COMMISSION, HON. TEOFISTO T.GUINGONA, JR. & HON. SALVADOR ENRIQUEZ, JR., respondents.

FACTS: The power of the Civil Service Commission to abolish theCareer Executive Service Board is challenged in thispetition for certiorari and prohibition. Petitioner is the Deputy Director of the Philippine NuclearResearch Institute. She applied for a Career ExecutiveService (CES) Eligibility and a CESO rank on August 2,1993, she was given a CES eligibility. On September 15,1993, she was recommended to the President for a CESOrank by the Career Executive Service Board.All was not to turn well for petitioner. On October 1, 1993,respondent Civil Service Commissionpassed ResolutionNo. 93-4359.The above resolution became an impediment to theappointment of petitioner as Civil Service Officer, Rank IV.Finding herself bereft of further administrative relief asthe Career Executive Service Board which recommendedher CESO Rank IV has been abolished, petitioner filed thepetition at bench to annul, among others, resolution No.93-4359. The petition is anchored on the following arguments: (1)ESPONDENT COMMISSION USURPED THE LEGISLATIVEFUNCTIONS OF CONGRESS WHEN IT ABOLISHED THECESB, AN OFFICE CREATED BY LAW also, (2)RESPONDENT CSC USURPED THE LEGISLATIVEFUNCTIONS OF CONGRESS WHEN IT ILLEGALLYAUTHORIZED THE TRANSFER OF PUBLIC MONEY The Solicitor General agreed with the contentions of petitioner. Respondent Commission, however, chose todefend its ground. ISSUE: WON respondent commission has the power to abolishthe Career Executive Service Board. HELD: We find merit in the petition. The controlling fact is that the Career Executive ServiceBoard (CESB) was created in the Presidential Decree(P.D.) No. 1 on September 1, 1974 which adopted theIntegrated Plan.It cannot be disputed, therefore, that as the CESB wascreated by law, it can only be abolished by thelegislature. This follows an unbroken stream of rulingsthat the creation and abolition of public offices isprimarily a legislative function. In the petition at bench, the legislature has not enactedany law authorizing the abolition of the CESB. On thecontrary, in all the General Appropriations Acts from 1975to 1993, the legislature has set aside funds for theoperation of CESB.- R e s p o n d e n t C o m m i s s i o n , h o w e v e r , i n v o k e s S e c t i o n 1 7 , Chapter 3, Subtitle A. Title I, Book V of the AdministrativeCode of 1987 as the source of its power to abolish theCESB. Section 17 provides:Sec. 17. Organizational Structure

. Each office of the Commission shall be headed by a Director with atleast one Assistant Director, and may have suchdivisions as are necessary independent constitutionalbody, the Commission may effect changes inthe organization as the need arises. But as well pointed out by petitioner and the SolicitorGeneral, Section 17 must be read together with Section16 of the said Code which enumerates the offices underthe respondent Commission. As read together, the inescapable conclusion is thatrespondent Commission's power to reorganize is limitedto offices under its control as enumerated in Section 16 From its inception, the CESB was intended to be anautonomous entity, albeit administratively attached torespondent Commission. As conceptualized by theReorganization Committee "the CESB shall beautonomous. The essential autonomous character of the CESB is notnegated by its attachment to respondent Commission. Bysaid attachment, CESB was not made to fall within thecontrol of respondent Commission. Under the Administrative Code of 1987, the purpose of attaching one functionally inter-related governmentagency to another is to attain "policy and programcoordination." Petition granted Larin vs. Executive SecretaryGR. No. L- 112745, October 16, 1997FACTS: Facts: The Sandiganbayan convicted petitioner Aquilino T. Larin, Revenue Specific TaxOfficer, then Assistant Commissioner of the Bureau of Internal Revenue and his co-accused of the crimes of violation of some provisions of the National Internal Revenue Code and R.A 3019.His conviction was reported to the President of Philippines through a memorandum. Sr. DeputyExecutive Secretary Leonardo Quisumbing acting under the authority of the President issuedMemorandum Order No. 164 which provides for the creation of an executive Committee toinvestigate the administrative charge against petitioner. The petitioner questioned theadministrative complaint filed against him.Meanwhile, the President issued E.O. No. 132 which mandates for the streamlining of theBureau of Internal Revenue. Under said order, some positions and functions are either abolished,renamed, decentralized or transferred to other offices, while other offices are also created. TheExcise Tax Service, of which the petitioner was the Assistant Commissioner, was one of

thoseoffices that was abolished. Consequently, under A.O. No. 101, petitioner was found guilty of grave misconduct in the administrative charge and imposed upon him the penalty of dismissalwith forfeiture of his leave credits and retirement benefits including disqualification for reappointment in the government service. Petitioner questioned his unlawful removal fromoffice. Petitioner challenged the authority of the President to dismiss him from office. He arguedthat in so far as presidential appointees who are Career Executive Service Officers, the Presidentexercises only the power of control not the power to remove. He likewise assailed that he wasremoved as a result of the reorganization made by the Executive Department in the BIR pursuantto E.O. No. 132. He claimed that there is yet no law enacted by Congress which authorizes thereorganization by the Executive Department of executive agencies, particularly the BIR. On theother hand, the respondents contended that since petitioner is a presidential appointee, he fallsunder the disciplining authority of the President. Respondents claimed that he was not dismissed by virtue of EO 132 but because he was found guilty of grave misconduct in the administrativecases filed against him. ISSUES: Is the President has the power to discipline the petitioner?2. Is the petitioners acquittal in the criminal case entails the dismissal of theadministrative charge against him?3. Is the reorganization of the BIR pursuant to EO No. 132 tainted with bad faith? DECISION: ESPetitioner is a presidential appointee who belongs to career service of the CivilService. Being a presidential appointee, he comes under the direct disciplining authorityof the President. This is in line with the well settled principle that the power to remove isinherent the power to appoint conferred to the President by Sec. 16, Art. VII of theConstitution. Thus, Memorandum Order No. 164, which created a committee toinvestigate the administrative charge against petitioner, was issued pursuant to the power of removal of the President.This power of removal, however, is not an absolute one which accepts noreservation. Under the Administrative Code of 1987, career service is characterized bythe

existence of security of tenure, as contra-distinguished from non-career service whosetenure is co-terminus with that of the appointing authority or subject to his pleasure, or limited to a period specified by law or to the duration of a particular project for which purpose the employment was made. The fact that petitioner is a presidential appointeedoes not give the appointing authority the license to remove him at will or at his pleasurefor it is admitted fact that he is likewise a career service officer who under the law is therecipient of tenurial protection, thus, may only be removed for a cause and in accordancewith procedural due process.2. Y ESWhere the very basis of the administrative case against petitioner is hisconviction in the criminal action which was later on set aside by this Court upon acategorical and clear finding that the acts for which he was administratively held liableare not unlawful and irregular, the acquittal of the petitioner in the criminal case necessarily entails the dismissal of the administrative action against him, because in sucha case, there is no more basis nor justifiable reason to maintain the administrative suit.3. Y ESWhile the Presidents power to reorganize cannot be denied, this does not meanhowever that the reorganization itself is properly made in accordance with law. Well-settled is the rule that reorganization is regarded as valid provided it is pursued in goodfaith. Thus, in Dario vs. Mison, this Court has had the occasion to clarify that: As ageneral rule, a reorganization is carried out in good faith if it is for the purpose of economy or to make the bureaucracy more efficient. In that event no dismissal or separation actually occurs because the position itself ceases to exist. And in that case thesecurity of tenure would not be a Chinese wall. Be that as it may, if the abolition which isnothing else but a separation or removal, is done for political reasons or purposely todefeat security of tenure, or otherwise not in good faith, no valid abolition takes place andwhatever abolition is done is void ab initio. There is an invalid abolition as where there ismerely a change of nomenclature of positions or where claims of economy are belied bythe existence of ample funds.