ADMINISTRATIVE LAW REVIEWER

Atty. Edwin Sandoval

Describe the Administrative Code of 1987. regions, the provincial, city, municipal or barangay
Held: The Code is a general law and “incorporates subdivisions or other forms of local
in a unified document the major structural, government. (Sec. 2[1], Introductory Provisions,
functional and procedural principles of Executive Order No. 292)
governance (Third Whereas Clause, Administrative
Code of 1987) and “embodies changes in What is an Agency of the Government?
administrative structures and procedures designed Ans.: Agency of the Government refers to any of
to serve the people.” (Fourth Whereas Clause, the various units of the Government, including a
Administrative Code of 1987) The Code is divided department, bureau, office, instrumentality, or
into seven (7) books. These books contain government-owned or controlled corporation, or a
provisions on the organization, powers and general local government or a distinct unit therein. (Sec.
administration of departments, bureaus and offices 2[4], Introductory Provisions, Executive Order No.
under the executive branch, the organization and 292)
functions of the Constitutional Commissions and
other constitutional bodies, the rules on the What is a Department?
national government budget, as well as guidelines Ans.: Department refers to an executive
for the exercise by administrative agencies of department created by law. For purposes of Book
quasi-legislative and quasi-judicial powers. The IV, this shall include any instrumentality, as herein
Code covers both the internal defined, having or assigned the rank of a
administration, i.e., internal organization, department, regardless of its name or
personnel and recruitment, supervision and designation. (Sec. 2[7], Introductory Provisions,
discipline, and the effects of the functions Executive Order No. 292)
performed by administrative officials on private
individuals or parties outside government. (Ople v. What is a Bureau?
Torres, G.R. No. 127685, July 23, 1998 [Puno]) Ans.: Bureau refers to any principal subdivision or
unit of any department. For purposes of Book IV,
What is Administrative Power? this shall include any principal subdivision or unit of
Held: Administrative power is concerned with the any instrumentality given or assigned the rank of a
work of applying policies and enforcing orders as bureau, regardless of actual name or designation,
determined by proper governmental organs. It as in the case of department-wide regional
enables the President to fix a uniform standard of offices. (Sec. 2[8], Introductory Provisions,
administrative efficiency and check the official Executive Order No. 292)
conduct of his agents. To this end, he can issue
administrative orders, rules and regulations. (Ople What is an Office?
v. Torres, G.R. No. 127685, July 23, 1998 [Puno]) Ans.: Office refers, within the framework of
governmental organization, to any major functional
unit of a department or bureau including regional
offices. It may also refer to any position held or
What is an Administrative Order? occupied by individual persons, whose functions are
Held: An administrative order is an ordinance defined by law or regulation. (Sec. 2[9],
issued by the President which relates to specific Introductory Provisions, Executive Order No. 292)
aspects in the administrative operation of
government. It must be in harmony with the law What is a Government Instrumentality? What are
and should be for the sole purpose of implementing included in the term Government
the law and carrying out the legislative Instrumentality?
policy. (Ople v. Torres, G.R. No. 127685, July 23, Ans.: A government instrumentality refers to any
1998 [Puno]) agency of the national government, not integrated
within the department framework, vested with
What is the Government of the Republic of the special functions or jurisdiction by law, endowed
Philippines? with some if not all corporate powers,
Ans.: The Government of the Republic of the administering special funds, enjoying operational
Philippines refers to the corporate governmental autonomy, usually through a charter. The term
entity through which the functions of the includes regulatory agencies, chartered institutions
government are exercised throughout the and government-owned or controlled
Philippines, including, save as the contrary appears corporations. (Sec. 2[10], Introductory Provisions,
from the context, the various arms through which Executive Order No. 292)
political authority is made effective in the
Philippines, whether pertaining to the autonomous
Page 1 of 10
 ADMINISTRATIVE LAW REVIEWER
Atty. Edwin Sandoval
What is a Regulatory Agency?
Ans.: A regulatory agency refers to any agency
expressly vested with jurisdiction to regulate,
administer or adjudicate matters affecting
substantial rights and interest of private persons,
the principal powers of which are exercised by a
collective body, such as a commission, board or
council. (Sec. 2[11], Introductory Provisions,
Executive Order No. 292)
What is a Chartered Institution?
Ans.: A chartered institution refers to any agency
organized or operating under a special charter, and
vested by law with functions relating to specific
constitutional policies or objectives. This term
includes state universities and colleges and the
monetary authority of the State. (Section 2[12],
Introductory Provisions, Executive Order No. 292)
What is a Government-Owned or Controlled
Corporation?
Ans.: Government-owned or controlled
corporation refers to any agency organized as a
stock or non-stock corporation, vested with
functions relating to public needs whether
governmental or proprietary in nature, and owned
by the Government directly or through its
instrumentalities either wholly, or, where
applicable as in the case of stock corporations, to
the extent of at least fifty-one (51) per cent of its
capital stock; x x x(Sec. 2[13], Introductory
Provisions, Executive Order No. 292)
When is a Government-Owned or Controlled
Corporation deemed to be performing
proprietary function? When is it deemed to be
performing governmental function?
Held: Government-owned or controlled
corporations may perform governmental or
proprietary functions or both, depending on the
purpose for which they have been created. If the
purpose is to obtain special corporate benefits or
earn pecuniary profit, the function is
proprietary. If it is in the interest of health, safety
and for the advancement of public good and
welfare, affecting the public in general, the
function is governmental. Powers classified as
“proprietary” are those intended for private
advantage and benefit. (Blaquera v. Alcala, 295
SCRA 366, 425, Sept. 11, 1998, En Banc
[Purisima])
The Philippine National Red Cross (PNRC) is a
government-owned and controlled corporation
with an original charter under R.A. No. 95, as
amended. Its charter, however, was amended to
vest in it the authority to secure loans, be
exempted from payment of all duties, taxes, fees
Page 2 of 10
and other charges, etc. With the amendnt of its
charter, has it been “impliedly converted to a
private corporation”?
Held: The test to determine whether a corporation
is government owned or controlled, or private in
nature is simple. Is it created by its own charter
for the exercise of a public function, or by
incorporation under the general corporation
law? Those with special charters are government
corporations subject to its provisions, and its
employees are under the jurisdiction of the Civil
Service Commission. The PNRC was not “impliedly
converted to a private corporation” simply because
its charter was amended to vest in it the authority
to secure loans, be exempted from payment of all
duties, taxes, fees and other charges,
etc. (Camporedondo v. NLRC, G.R. No. 129049,
Aug. 6, 1999, 1st Div. [Pardo])
When may the Government not validly invoke the
rule that prescription does not run against the
State? Illustrative Case.
Held: While it is true that prescription does not
run against the State, the same may not be invoked
by the government in this case since it is no longer
interested in the subject matter. While Camp
Wallace may have belonged to the government at
the time Rafael Galvez’s title was ordered
cancelled in Land Registration Case No. N-361, the
same no longer holds true today.
Republic Act No. 7227, otherwise known as the
Base Conversion and Development Act of 1992,
created the Bases Conversion and Development
Authority. X x x
With the transfer of Camp Wallace to the BCDA,
the government no longer has a right or interest to
protect. Consequently, the Republic is not a real
party in interest and it may not institute the
instant action. Nor may it raise the defense of
imprescriptibility, the same being applicable only
in cases where the government is a party in
interest. x x x. Being the owner of the areas
covered by Camp Wallace, it is the Bases
Conversion and Development Authority, not the
Government, which stands to be benefited if the
land covered by TCT No. T-5710 issued in the name
of petitioner is cancelled.
Nonetheless, it has been posited that the transfer
of military reservations and their extensions to the
BCDA is basically for the purpose of accelerating
the sound and balanced conversion of these
military reservations into alternative productive
uses and to enhance the benefits to be derived
from such property as a measure of promoting the
economic and social development, particularly of
Central Luzon and, in general, the country’s goal
 ADMINISTRATIVE LAW REVIEWER
Atty. Edwin Sandoval
for enhancement (Section 2, Republic Act No.
7227). It is contended that the transfer of these
military reservations to the Conversion Authority
does not amount to an abdication on the part of
the Republic of its interests, but simply a
recognition of the need to create a body corporate
which will act as its agent for the realization of its
program. It is consequently asserted that the
Republic remains to be the real party in interest
and the Conversion Authority merely its agent.
We, however, must not lose sight of the fact that
the BCDA is an entity invested with a personality
separate and distinct from the government. X x x
It may not be amiss to state at this point that the
functions of government have been classified into
governmental or constituent and proprietary or
ministrant. While public benefit and public
welfare, particularly, the promotion of the
economic and social development of Central Luzon,
may be attributable to the operation of the BCDA,
yet it is certain that the functions performed by
the BCDA are basically proprietary in nature. The
promotion of economic and social development of
Central Luzon, in particular, and the country’s goal
for enhancement, in general, do not make the
BCDA equivalent to the Government. Other
corporations have been created by government to
act as its agents for the realization of its programs,
the SSS, GSIS, NAWASA and the NIA, to count a few,
and yet, the Court has ruled that these entities,
although performing functions aimed at promoting
public interest and public welfare, are not
government-function corporations invested with
governmental attributes. It may thus be said that
the BCDA is not a mere agency of the Government
but a corporate body performing proprietary
functions.
Having the capacity to sue or be sued, it should
thus be the BCDA which may file an action to
cancel petitioner’s title, not the Republic, the
former being the real party in interest. One having
no right or interest to protect cannot invoke the
jurisdiction of the court as a party plaintiff in an
action. A suit may be dismissed if the plaintiff or
the defendant is not a real party in interest. x x x
However, E.B. Marcha Transport Co., Inc. v. IAC is
cited as authority that the Republic is the proper
party to sue for the recovery of possession of
property which at the time of the installation of
the suit was no longer held by the national
government body but by the Philippine Ports
Authrotiy. In E.B. Marcha, the Court ruled:
It can be said that in suing for the recovery of the
rentals, the Republic of the Philippines, acted as
principal of the Philippine Ports Authority, directly
exercising the commission it had earlier conferred
on the latter as its agent. We may presume that,
by doing so, the Republic of the Philippines did not
Page 3 of 10
intend to retain the said rentals for its own use,
considering that by its voluntary act it had
transferred the land in question to the Philippine
Ports Authority effective July 11, 1974. The
Republic of the Philippines had simply sought to
assist, not supplant, the Philippine Ports Authority,
whose title to the disputed property it continues to
recognize. We may expect the that the said
rentals, once collected by the Republic of the
Philippines, shall be turned over by it to the
Philippine Ports Authority conformably to the
purposes of P.D. No. 857.
E.B. Marcha is, however, not on all fours with the
case at bar. In the former, the Court considered
the Republic a proper party to sue since the claims
of the Republic and the Philippine Ports Authority
against the petitioner therein were the same. To
dismiss the complaint in E.B. Marcha would have
brought needless delay in the settlement of the
matter since the PPA would have to refile the case
on the same claim already litigated upon. Such is
not the case here since to allow the government to
sue herein enables it to raise the issue of
imprescriptibility, a claim which is not available to
the BCDA. The rule that prescription does not run
against the State does not apply to corporations or
artificial bodies created by the State for special
purposes, it being said that when the title of the
Republic has been divested, its grantees, although
artificial bodies of its own creation, are in the
same category as ordinary persons. By raising the
claim of imprescriptibility, a claim which cannot be
raised by the BCDA, the Government not only
assists the BCDA, as it did in E.B. Marcha, it even
supplants the latter, a course of action proscribed
by said case.
Moreover, to recognize the Government as a proper
party to sue in this case would set a bad precedent
as it would allow the Republic to prosecute, on
behalf of government-owned or controlled
corporations, causes of action which have already
prescribed, on the pretext that the Government is
the real party in interest against whom prescription
does not run, said corporations having been created
merely as agents for the realization of government
programs.
It should also be noted that petitioner is
unquestionably a buyer in good faith and for value,
having acquired the property in 1963, or 5 years
after the issuance of the original certificate of
title, as a third transferee. If only not to do
violence and to give some measure of respect to
the Torrens System, petitioner must be afforded
some measure of protection. (Shipside
Incorporated v. Court of Appeals, 352 SCRA 334,
Feb. 20, 2001, 3rd Div. [Melo])
 ADMINISTRATIVE LAW REVIEWER
Atty. Edwin Sandoval
Discuss the nature and functions of the National
Telecommunications Commission (NTC), and
analyze its powers and authority as well as the
laws, rules and regulations that govern its
existence and operations.
Held: The NTC was created pursuant to Executive
Order No. 546 x x x. It assumed the functions
formerly assigned to the Board of Communications
and the Communications Control Bureau, which
were both abolished under the said Executive
Order. Previously, the NTC’s function were merely
those of the defunct Public Service Commission
(PSC), created under Commonwealth Act No. 146,
as amended, otherwise known as the Public Service
Act, considering that the Board of Communications
was the successor-in-interest of the PSC. Under
Executive Order No. 125-A, issued in April 1987, the
NTC became an attached agency of the Department
of Transportation and Communications.
In the regulatory communications
industry, the NTC has the sole authority to issue
Certificates of Public Convenience and Necessity
(CPCN) for the installation, operation, and
maintenance of communications facilities and
services, radio communications systems, telephone
and telegraph systems. Such power includes the
authority to determine the areas of operations of
applicants for telecommunications
services. Specifically, Section 16 of the Public
Service Act authorizes the then PSC, upon notice
and hearing, to issue Certificates of Public
Convenience for the operation of public services
within the Philippines “whenever the Commission
finds that the operation of the public service
proposed and the authorization to do business will
promote the public interests in a proper and
suitable manner.” (Commonwealth Act No. 146,
Section 16[a]) The procedure governing the
issuance of such authorizations is set forth in
Section 29 of the said Act x x x. (Republic v.
Express Telecommunication Co., Inc., 373 SCRA
316, Jan. 15, 2002, 1st Div. [Ynares-Santiago])
Is the filing of the administrative rules and
regulations with the UP Law Center the operative
act that gives the rules force and effect?
Held: In granting Bayantel the
provisional authority to operate a CMTS, the NTC
applied Rule 15, Section 3 of its 1978 Rules of
Practice and Procedure, which provides:
Sec. 3. Provisional Relief. – Upon the filing of an
application, complaint or petition or at any stage
thereafter, the Board may grant on motion of the
pleader or on its own initiative, the relief prayed
for, based on the pleading, together with the
affidavits and supporting documents attached
thereto, without prejudice to a final decision after
completion of the hearing which shall be called
Page 4 of 10
within thirty (30) days from grant of authority
asked for.
Respondent Extelcom, however,
contends that the NTC should have applied the
Revised Rules which were filed with the Office of
the National Administrative Register on February 3,
1993. These Revised Rules deleted the phrase “on
its own initiative”; accordingly, a provisional
authority may be issued only upon filing of the
proper motion before the Commission.
In answer to this argument, the NTC,
through the Secretary of the Commission, issued a
certification to the effect that inasmuch as the
1993 Revised Rules have not been published in a
newspaper of general circulation, the NTC has been
applying the 1978 Rules.
The absence of publication, coupled
with the certification by the Commissioner of the
NTC stating that the NTC was still governed by the
1987 Rules, clearly indicate that the 1993 Revised
Rules have not taken effect at the time of the
grant of the provisional authority to Bayantel. The
fact that the 1993 Revised Rules were filed with
the UP Law Center on February 3, 1993 is of no
moment. There is nothing in the Administrative
Code of 1987 which implies that the filing of the
rules with the UP Law Center is the operative act
that gives the rules force and effect. Book VII,
Chapter 2, Section 3 thereof merely states:
Filing. – (1) Every agency shall file with the
University of the Philippines Law Center three (3)
certified copies of every rule adopted by it. Rules
in force on the date of effectivity of this Code
which are not filed within three (3) months from
the date shall not thereafter be the basis of any
sanction against any party or persons.
(2) The records officer of the agency, or his
equivalent functionary, shall carry out the
requirements of this section under pain of
disciplinary action.
(3) A permanent register of all rules shall be kept
by the issuing agency and shall be open to public
inspection.
The National Administrative Register is
merely a bulletin of codified rules and it is
furnished only to the Office of the President,
Congress, all appellate courts, the National Library,
other public offices or agencies as the Congress
may select, and to other persons at a price
sufficient to cover publication and mailing or
distribution costs (Administrative Code of 1987,
Book VII, Chapter 2, Section 7). In a similar case,
we held:
This does not imply, however, that the subject
Administrative Order is a valid exercise of such
quasi-legislative power. The original
Administrative Order issued on August 30, 1989,
under which the respondents filed their
 ADMINISTRATIVE LAW REVIEWER
Atty. Edwin Sandoval
applications for importations, was not published in
the Official Gazette or in a newspaper of general
circulation. The questioned Administrative Order,
legally, until it is published, is invalid within the
context of Article 2 of Civil Code, which reads:
“Article 2. Laws shall take effect after fifteen days
following the completion of their publication in the
Official Gazette (or in a newspaper of general
circulation in the Philippines), unless it is otherwise
provided. X x x”
The fact that the amendments to Administrative
Order No. SOCPEC 89-08-01 were filed with, and
published by the UP Law Center in the National
Administrative Register, does not cure the defect
related to the effectivity of the Administrative
Order.
This Court, in Tanada v. Tuvera stated, thus:
“We hold therefore that all statutes, including
those of local application and private laws, shall be
published as a condition for their effectivity, which
shall begin fifteen days after publication unless a
different effectivity is fixed by the legislature.
Covered by this rule are presidential decrees and
executive orders promulgated by the President in
the exercise of legislative power or, at present,
directly conferred by the
Constitution. Administrative Rules and Regulations
must also be published if their purpose is to
enforce or implement existing law pursuant also to
a valid delegation.
Interpretative regulations and those merely
internal in nature, that is, regulating only the
personnel of the administrative agency and not the
public, need not be published. Neither is
publication required of the so-called letters of
instructions issued by administrative superiors
concerning the rules or guidelines to be followed by
their subordinates in the performance of their
duties.
We agree that the publication must be in full or it
is no publication at all since its purpose is to inform
the public of the contents of the laws.”
The Administrative Order under consideration is
one of those issuances which should be published
for its effectivity, since its purpose is to enforce
and implement an existing law pursuant to a valid
delegation, i.e., P.D. 1071, in relation to LOI 444
and EO 133.
Thus, publication in the Official Gazette
or a newspaper of general circulation is a
condition sine qua non before statutes, rules or
regulations can take effect. This is explicit from
Executive Order No. 200, which repealed Article 2
of the Civil Code, and which states that:
Laws shall take effect after fifteen days following
the completion of their publication either in the
Official Gazette or in a newspaper of general
Page 5 of 10
circulation in the Philippines, unless it is otherwise
provided (E.O. 200, Section 1).
The Rules of Practice and Procedure of
the NTC, which implements Section 29 of the
Public Service Act, fall squarely within the scope of
these laws, as explicitly mentioned in the case
of Tanada v. Tuvera.
Our pronouncement in Tanada v. Tuvera is clear
and categorical. Administrative rules and
regulations must be published if their purpose is to
enforce or implement existing law pursuant to a
valid delegation. The only exception are
interpretative regulations, those merely internal in
nature, or those so-called letters of instructions
issued by administrative superiors concerning the
rules and guidelines to be followed by their
subordinates in the performance of their
duties (PHILSA International Placement & Services
Corp. v. Secretary of Labor, G.R. No. 103144, April
4, 2001, 356 SCRA 174).
Hence, the 1993 Revised Rules should be
published in the Official Gazette or in a newspaper
of general circulation before it can take
effect. Even the 1993 Revised Rules itself
mandates that said Rules shall take effect only
after their publication in a newspaper of general
circulation (Section 20 thereof). In the absence of
such publication, therefore, it is the 1978 Rules
that govern. (Republic v. Express
Telecommunication Co., Inc., 373 SCRA 316, Jan.
15, 2002, 1st Div. [Ynares-Santiago])
May a person be held liable for violation of an
administrative regulation which was not
published?
Held: Petitioner insists, however, that it
cannot be held liable for illegal exaction as POEA
Memorandum Circular No. II, Series of 1983, which
enumerated the allowable fees which may be
collected from applicants, is void for lack of
publication.
There is merit in the argument.
In Tanada v. Tuvera, the Court held, as
follows:
“We hold therefore that all statutes, including
those of local application and private laws, shall be
published as a condition for their effectivity, which
shall begin fifteen days after publication unless a
different effectivity date is fixed by the
legislature.
Covered by this rule are presidential decrees and
executive orders promulgated by the President in
the exercise of legislative powers whenever the
same are validly delegated by the legislature or, at
present, directly conferred by the
Constitution. Administrative rules and regulations
must also be published if their purpose is to
 ADMINISTRATIVE LAW REVIEWER
Atty. Edwin Sandoval
enforce or implement existing law pursuant to a
valid delegation.
Interpretative regulations and those merely
internal in nature, that is, regulating only the
personnel of the administrative agency and the
public, need not be published. Neither is
publication required of the so-called letter of
instructions issued by the administrative superiors
concerning the rules or guidelines to be followed by
their subordinates in the performance of their
duties.”
Applying this doctrine, we have
previously declared as having no force and effect
the following administrative issuances: a) Rules and
Regulations issued by the Joint Ministry of Health-
Ministry of Labor and Employment Accreditation
Committee regarding the accreditation of
hospitals, medical clinics and laboratories; b)
Letter of Instruction No. 416 ordering the
suspension of payments due and payable by
distressed copper mining companies to the national
government; c) Memorandum Circulars issued by
the POEA regulating the recruitment of domestic
helpers to Hong Kong; d) Administrative Order No.
SOCPEC 89-08-01 issued by the Philippine
International Trading Corporation regulating
applications for importation from the People’s
Republic of China; and e) Corporate Compensation
Circular No. 10 issued by the Department of Budget
and Management discontinuing the payment of
other allowances and fringe benefits to government
officials and employees. In all these cited cases,
the administrative issuances questioned therein
were uniformly struck down as they were not
published or filed with the National Administrative
Register as required by the Administrative Code of
1987.
POEA Memorandum Circular No. 2, Series
of 1983 must likewise be declared ineffective as
the same was never published or filed with the
National Administrative Register.
POEA Memorandum Circular No. 2, Series
of 1983 provides for the applicable schedule of
placement and documentation fees for private
employment agencies or authority holders. Under
the said Order, the maximum amount which may be
collected from prospective Filipino overseas
workers is P2,500.00. The said circular was
apparently issued in compliance with the provisions
of Article 32 of the Labor Code x x x.
It is thus clear that the administrative
circular under consideration is one of those
issuances which should be published for its
effectivity, since its purpose is to enforce and
implement an existing law pursuant to a valid
delegation. Considering that POEA Administrative
Circular No. 2, Series of 1983 has not as yet been
published or filed with the National Administrative
Page 6 of 10
Register, the same is ineffective and may not be
enforced. (Philsa International Placement and
Services Corporation v. Secretary of Labor and
Employment, 356 SCRA 174, April 4, 2001, 3rd Div.,
[Gonzaga-Reyes])
Does the publication requirement apply as well
to administrative regulations addressed only to a
specific group and not to the general public?
Held: The Office of the Solicitor General
likewise argues that the questioned administrative
circular is not among those requiring publication
contemplated by Tanada v. Tuvera as it is
addressed only to a specific group of persons and
not to the general public.
Again, there is no merit in this
argument.
The fact that the said circular is
addressed only to a specified group, namely private
employment agencies or authority holders, does
not take it away from the ambit of our ruling
in Tanada v. Tuvera. In the case of Phil.
Association of Service Exporters v. Torres, the
administrative circulars questioned therein were
addressed to an even smaller group, namely
Philippine and Hong Kong agencies engaged in the
recruitment of workers for Hong Kong, and still the
Court ruled therein that, for lack of proper
publication, the said circulars may not be enforced
or implemented.
Our pronouncement in Tanada v.
Tuvera is clear and categorical. Administrative
rules and regulations must be published if their
purpose is to enforce or implement existing law
pursuant to a valid delegation. The only exceptions
are interpretative regulations, those merely
internal in nature, or those so-called letters of
instructions issued by administrative superiors
concerning the rules and guidelines to be followed
by their subordinates in the performance of their
duties. Administrative Circular No. 2, Series of
1983 has not been shown to fall under any of these
exceptions.
In this regard, the Solicitor General’s reliance on
the case of Yaokasin v. Commissioner of Customs is
misplaced. In the said case, the validity of certain
Customs Memorandum Orders were upheld despite
their lack of publication as they were addressed to
a particular class of persons, the customs
collectors, who were also the subordinates of the
Commissioner of the Bureau of Customs. As such,
the said Memorandum Orders clearly fall under one
of the exceptions to the publication requirement,
namely those dealing with instructions from an
administrative superior to a subordinate regarding
the performance of their duties, a circumstance
which does not obtain in the case at bench. X x x
 ADMINISTRATIVE LAW REVIEWER
Atty. Edwin Sandoval
To summarize, petitioner should be absolved from
the three (3) counts of exaction as POEA
Administrative Circular No. 2, Series of 1983 could
not be the basis of administrative sanctions against
petitioner for lack of publication. (Philsa
International Placement and Services Corporation
v. Secretary of Labor and Employment, 356 SCRA
174, April 4, 2001, 3rd Div., [Gonzaga-Reyes])
May a successful bidder compel a government
agency to formalize a contract with it
notwithstanding that its bid exceeds the amount
appropriated by Congress for the project?
Held: Enshrined in the 1987 Philippine Constitution
is the mandate that “no money shall be paid out of
the Treasury except in pursuance of an
appropriation made by law.” (Sec. 29[1], Article VI
of the 1987 Constitution) Thus, in the execution of
government contracts, the precise import of this
constitutional restriction is to require the various
agencies to limit their expenditures within the
appropriations made by law for each fiscal year.
It is quite evident from the tenor of the language of
the law that the existence of appropriations and
the availability of funds are indispensable pre-
requisites to or conditions sine qua non for the
execution of government contracts. The obvious
intent is to impose such conditions as a
priori requisites to the validity of the proposed
contract. Using this as our premise, we cannot
accede to PHOTOKINA’s contention that there is
already a perfected contract. While we held
in Metropolitan Manila Development Authority v.
Jancom Environmental Corporation that “the effect
of an unqualified acceptance of the offer or
proposal of the bidder is to perfect a contract,
upon notice of the award to the bidder,” however,
such statement would be inconsequential in a
government where the acceptance referred to is
yet to meet certain conditions. To hold otherwise
is to allow a public officer to execute a binding
contract that would obligate the government in an
amount in excess of the appropriations for the
purpose for which the contract was attempted to
be made. This is a dangerous precedent.
In the case at bar, there seems to be an
oversight of the legal requirements as early as the
bidding stage. The first step of a Bids and Awards
Committee (BAC) is to determine whether the bids
comply with the requirements. The BAC shall rate
a bid “passed” only if it complies with all the
requirements and the submitted price does not
exceed the approved budget for the
contract.” (Implementing Rules and Regulations
[IRR] for Executive Order No. 262, supra.)
Extant on the record is the fact that the
VRIS Project was awarded to PHOTOKINA on
account of its bid in the amount of P6.588 Billion
Pesos. However, under Republic Act No.
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8760 (General Appropriations Act, FY 2000, p.
1018, supra.), the only fund appropriated for the
project was P1 Billion Pesos and under the
Certification of Available Funds (CAF) only P1.2
Billion Pesos was available. Clearly, the amount
appropriated is insufficient to cover the cost of the
entire VRIS Project. There is no way that the
COMELEC could enter into a contract with
PHOTOKINA whose accepted bid was way beyond
the amount appropriated by law for the
project. This being the case, the BAC should have
rejected the bid for being excessive or should have
withdrawn the Notice of Award on the ground that
in the eyes of the law, the same is null and void.
Even the draft contract submitted by
Commissioner Sadain that provides for a contract
price in the amount of P1.2 Billion Pesos is
unacceptable. x x x While the contract price under
the draft contract is only P1.2 Billion and, thus,
within the certified available funds, the same
covers only Phase I of the VRIS Project, i.e., the
issuance of identification cards for only 1,000,000
voters in specified areas. In effect, the
implementation of the VRIS Project will be
“segmented” or “chopped” into several
phases. Not only is such arrangement disallowed
by our budgetary laws and practices, it is also
disadvantageous to the COMELEC because of the
uncertainty that will loom over its modernization
project for an indefinite period of time. Should
Congress fail to appropriate the amount necessary
for the completion of the entire project, what good
will the accomplished Phase I serve? As expected,
the project failed “to sell” with the Department of
Budget and Management. Thus, Secretary
Benjamin Diokno, per his letter of December 1,
2000, declined the COMELEC’s request for the
issuance of the Notice of Cash Availability (NCA)
and a multi-year obligatory authority to assume
payment of the total VRIS Project for lack of legal
basis. Corollarily, under Section 33 of R.A. No.
8760, no agency shall enter into a multi-year
contract without a multi-year obligational
authority, thus:
“SECTION 33. Contracting Multi-Year Projects. – In
the implementation of multi-year projects, no
agency shall enter into a multi-year contract
without a multi-year Obligational Authority issued
by the Department of Budget and Management for
the purpose. Notwithstanding the issuance of the
multi-year Obligational Authority, the obligation to
be incurred in any given calendar year, shall in no
case exceed the amount programmed for
implementation during said calendar year.”
Petitioners are justified in refusing to formalize the
contract with PHOTOKINA. Prudence dictated
them not to enter into a contract not backed up by
sufficient appropriation and available
 ADMINISTRATIVE LAW REVIEWER
Atty. Edwin Sandoval
funds. Definitely, to act otherwise would be a
futile exercise for the contract would inevitably
suffer the vice of nullity. x x x
Verily, the contract, as expressly
declared by law, is inexistent and void ab initio
(Article 1409 of the Civil Code of the
Philippines). This is to say that the proposed
contract is without force and effect from the very
beginning or from its incipiency, as if it had never
been entered into, and hence, cannot be validated
either by lapse of time or ratification.
In fine, we rule that PHOTOKINA, though the
winning bidder, cannot compel the COMELEC to
formalize the contract. Since PHOTOKINA’s bid is
beyond the amount appropriated by Congress for
the VRIS Project, the proposed contract is not
binding upon the COMELEC and is considered void x
x x. (Commission on Elections v. Judge Ma. Luisa
Quijano-Padilla, G.R. No. 151992, Sept. 18, 2002,
En Banc [Sandoval-Gutierrez])
What is the remedy available to a party who
contracts with the government contrary to the
requirements of the law and, therefore, void ab
initio?
Held: Of course, we are not saying that the party
who contracts with the government has no other
recourse in law. The law itself affords him the
remedy. Section 48 of E.O. No. 292 explicitly
provides that any contract entered into contrary to
the above-mentioned requirements shall be void,
and “the officers entering into the contract shall
be liable to the Government or other contracting
party for any consequent damage to the same as if
the transaction had been wholly between private
parties.” So when the contracting officer
transcends his lawful and legitimate powers by
acting in excess of or beyond the limits of his
contracting authority, the Government is not bound
under the contract. It would be as if the contract
in such case were a private one, whereupon, he
binds himself, and thus, assumes personal liability
thereunder. Otherwise stated, the proposed
contract is unenforceable as to the Government.
While this is not the proceeding to
determine where the culpability lies, however, the
constitutional mandate cited above constrains us to
remind all public officers that public office is a
public trust and all public officers must at all times
be accountable to the people. The authority of
public officers to enter into government contracts
is circumscribed with a heavy burden of
responsibility. In the exercise of their contracting
prerogative, they should be the first judges of the
legality, propriety and wisdom of the contract they
entered into. They must exercise a high degree of
caution so that the Government may not be the
victim of ill-advised or improvident
Page 8 of 10
action. (Commission on Elections v. Judge Ma.
Luisa Quijano-Padilla, G.R. No. 151992, Sept. 18,
2002, En Banc [Sandoval-Gutierrez])
Does the Commission on Human Rights have the
power to adjudicate?
Held: In its Order x x x denying
petitioners’ motion to dismiss, the CHR theorizes
that the intention of the members of the
Constitutional Commission is to make CHR a quasi-
judicial body. This view, however, has not
heretofore been shared by this Court. In Carino v.
Commission on Human Rights, the Court x x x has
observed that it is “only the first of the
enumerated powers and functions that bears any
resemblance to adjudication of adjudgment,” but
that resemblance can in no way be synonymous to
the adjudicatory power itself. The Court
explained:
“x x x [T]he Commission on Human Rights x x x was
not meant by the fundamental law to be another
court or quasi-judicial agency in this country, or
duplicate much less take over the functions of the
latter.
“The most that may be conceded to the
Commission in the way of adjudicative power is
that it may investigate, i.e., receive evidence and
make findings of fact as regards claimed human
rights violations involving civil and political
rights. But fact finding is not adjudication, and
cannot be likened to the judicial function of a
court of justice, or even a quasi-judicial agency or
official. The function of receiving evidence and
ascertaining therefrom the facts of a controversy is
not a judicial function, properly speaking. To be
considered such, the faculty of receiving evidence
and making factual conclusions in a controversy
must be accompanied by the authority of applying
the law to those factual conclusions to the end that
the controversy may be decided or determined
authoritatively, finally and definitively, subject to
such appeals or modes of review as may be
provided by law. This function, to repeat, the
Commission does not have. (Simon, Jr. v.
Commission on Human Rights, 229 SCRA 117, 125,
Jan. 5, 1994, En Banc [Vitug, J.])
Does the Commission on Human Rights have
jurisdiction to issue TRO or writ of preliminary
injunction?
Held: In Export Processing Zone
Authority v. Commission on Human Rights, the
Court x x x explained:
“The constitutional provision directing the CHR to
‘provide for preventive measures and legal aid
services to the underprivileged whose human rights
have been violated or need protection’ may not be
construed to confer jurisdiction on the Commission
 ADMINISTRATIVE LAW REVIEWER
Atty. Edwin Sandoval
to issue a restraining order or writ of injunction
for, if that were the intention, the Constitution
would have expressly said so. ‘Jurisdiction is
conferred only by the Constitution or by law.’ It is
never derived by implication.”
“Evidently, the ‘preventive measures and legal aid
services’ mentioned in the Constitution refer to
extrajudicial and judicial remedies (including a writ
of preliminary injunction) which the CHR may seek
from the proper courts on behalf of the victims of
human rights violations. Not being a court of
justice, the CHR itself has no jurisdiction to issue
the writ, for a writ of preliminary injunction may
only be issued ‘by the judge of any court in which
the action is pending [within his district], or by a
Justice of the Court of Appeals, or of the Supreme
Court. x x x. A writ of preliminary injunction is an
ancillary remedy. It is available only in a pending
principal action, for the preservation or protection
of the rights and interest of a party thereto, and
for no other purpose.”
The Commission does have legal standing to
indorse, for appropriate action, its findings and
recommendations to any appropriate agency of
government. (Simon, Jr. v. Commission on Human
Rights, 229 SCRA 117, 134-135, Jan. 5, 1994, En
Banc [Vitug, J.])
Does the petition for annulment of proclamation
of a candidate merely involve the exercise by the
COMELEC of its administrative power to review,
revise and reverse the actions of the board of
canvassers and, therefore, justifies non-
observance of procedural due process, or does it
involve the exercise of the COMELEC’s quasi-
judicial function?
Held: Taking cognizance of private respondent’s
petitions for annulment of petitioner’s
proclamation, COMELEC was not merely performing
an administrative function. The administrative
powers of the COMELEC include the power to
determine the number and location of polling
places, appoint election officials and inspectors,
conduct registration of voters, deputize law
enforcement agencies and governmental
instrumentalities to ensure free, orderly, honest,
peaceful and credible elections, register political
parties, organizations or coalition, accredit
citizen’s arms of the Commission, prosecute
election offenses, and recommend to the President
the removal of or imposition of any other
disciplinary action upon any officer or employee it
has deputized for violation or disregard of its
directive, order or decision. In addition, the
Commission also has direct control and supervision
over all personnel involved in the conduct of
election. However, the resolution of the adverse
claims of private respondent and petitioner as
Page 9 of 10
regards the existence of a manifest error in the
questioned certificate of canvass requires the
COMELEC to act as an arbiter. It behooves the
Commission to hear both parties to determine the
veracity of their allegations and to decide whether
the alleged error is a manifest error. Hence, the
resolution of this issue calls for the exercise by the
COMELEC of its quasi-judicial power. It has been
said that where a power rests in judgment or
discretion, so that it is of judicial nature or
character, but does not involve the exercise of
functions of a judge, or is conferred upon an officer
other than a judicial officer, it is deemed quasi-
judicial. The COMELEC therefore, acting as quasi-
judicial tribunal, cannot ignore the requirements of
procedural due process in resolving the petitions
filed by private respondent. (Federico S. Sandoval
v. COMELEC, G.R. No. 133842, Jan. 26, 2000
[Puno])
Discuss the contempt power of the Commission
on Human Rights (CHR). When may it be validly
exercised.
Held: On its contempt powers, the CHR
is constitutionally authorized to “adopt its
operational guidelines and rules of procedure, and
cite for contempt for violations thereof in
accordance with the Rules of Court.” Accordingly,
the CHR acted within its authority in providing in
its revised rules, its power “to cite or hold any
person in direct or indirect contempt, and to
impose the appropriate penalties in accordance
with the procedure and sanctions provided for in
the Rules of Court.” That power to cite for
contempt, however, should be understood to apply
only to violations of its adopted operational
guidelines and rules of procedure essential to carry
out its investigatorial powers. To exemplify, the
power to cite for contempt could be exercised
against persons who refuse to cooperate with the
said body, or who unduly withhold relevant
information, or who decline to honor summons, and
the like, in pursuing its investigative work. The
“order to desist” (a semantic interplay for a
restraining order) in the instance before us,
however, is not investigatorial in character but
prescinds from an adjudicative power that it does
not possess. x x x (Simon, Jr. v. Commission on
Human Rights, 229 SCRA 117, 134, Jan. 5, 1994, En
Banc [Vitug, J.])
Discuss the Doctrine of Primary Jurisdiction (or
Prior Resort).
Held: Courts cannot and will not resolve a
controversy involving a question which is within the
jurisdiction of an administrative tribunal, especially
where the question demands the exercise of sound
administrative discretion requiring the special
 ADMINISTRATIVE LAW REVIEWER
Atty. Edwin Sandoval

knowledge, experience and services of the  when the administrative action is patently
administrative tribunal to determine technical and illegal amounting to lack or excess of
intricate matters of fact. jurisdiction;
In recent years, it has been the jurisprudential  when there is estoppel on the part of the
trend to apply this doctrine to cases involving administrative agency concerned;
matters that demand the special competence of  when there is irreparable injury;
administrative agencies even if the question  when the respondent is a department
involved is also judicial in character. It applies secretary whose acts as an alter ego of the
“where a claim is originally cognizable in the President bears the implied and assumed
courts, and comes into play whenever enforcement approval of the latter;
of the claim requires the resolution of issues which,  when to require exhaustion of
under a regulatory scheme, have been placed administrative remedies would be
within the special competence of an administrative unreasonable;
body; in such case, the judicial process is  when it would amount to a nullification of
suspended pending referral of such issues to the a claim;
administrative body for its view.”  when the subject matter is a private land
In cases where the doctrine of primary jurisdiction in land case proceeding;
is clearly applicable, the court cannot arrogate
 when the rule does not provide a plain,
unto itself the authority to resolve a controversy,
speedy and adequate remedy, and
the jurisdiction over which is lodged with an
 when there are circumstances indicating
administrative body of special
the urgency of judicial intervention.
competence. (Villaflor v. CA, 280 SCRA 297, Oct.
(Paat v. CA, 266 SCRA 167 [1997])
9, 1992, 3rd Div. [Panganiban])
2. Non-exhaustion of administrative remedies is
not jurisdictional. It only renders the action
Discuss the Doctrine of Exhaustion of
premature, i.e., claimed cause of action is not ripe
Administrative Remedies. What are the
for judicial determination and for that reason a
exceptions thereto?
party has no cause of action to ventilate in
Held: 1. Before a party is allowed to seek the
court. (Carale v. Abarintos, 269 SCRA 132, March
intervention of the court, it is a pre-condition that
3, 1997, 3rd Div. [Davide])
he should have availed of all the means of
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administrative processes afforded him. Hence, if a
remedy within the administrative machinery can
still be resorted to by giving the administrative
officer concerned every opportunity to decide on a
matter that comes within his jurisdiction then such
remedy should be exhausted first before the
court’s judicial power can be sought. The
premature invocation of court’s jurisdiction is fatal
to one’s cause of action. Accordingly, absent any
finding of waiver or estoppel the case is susceptible
of dismissal for lack of cause of action. This
doctrine of exhaustion of administrative remedies
was not without its practical and legal reasons, for
one thing, availment of administrative remedy
entails lesser expenses and provides for a speedier
disposition of controversies. It is no less true to
state that the courts of justice for reasons of
comity and convenience will shy away from a
dispute until the system of administrative redress
has been completed and complied with so as to
give the administrative agency concerned every
opportunity to correct its error and to dispose of
the case.
This doctrine is disregarded:
 when there is a violation of due process;
 when the issue involved is purely a legal
question;

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