Chapter 2 instrumentality, or government-owned

Administrative Agencies or controlled corporation, or a local

government or a distinct unit therein.
a. Definition
An administrative agency may be
Department – an executive department
described as a body endowed with
created by law.
quasi-legislative and quasi-judiciary
powers for purpose of enabling it to
Bureau – Any principal subdivision of
carry out laws entrusted it for
any department.
enforcement or execution.
Office – within the framework of
Agency – defined by Administrative
government organization, to any major
Code as including: any department,
functional unit of a department or
bureau, office, commission, authority
bureau, including regular offices. It may
or officer of the National Government
also refer ‘to any position held or
authorized by law or executive order to
occupied by individual persons, whose
make rules, issues, licenses, grant of
functions are defined by law or
rights or privileges, and adjudicate cases;
regulation.
research institutions with respect to
licensing functions regulating private
Instrumentality - refer to an agency of
right, privilege, occupation, or business;
the National Government, not
and officials in the exercise of
integrated within the department
disciplinary power as provided by law.
framework, vested with some, if not all,
corporate powers, administering special
Government Instrumentality – any
funds and enjoying operational
agency of the National Government not
autonomy, usually through a charter. It
integrated within the department
includes regulatory agencies, chartered
framework, vested with special
institutions and government-owned or
functions or jurisdictions by law,
controlled corporations.
endowed with some if not all corporate
powers, administering special funds,
Agency (under the Office of the
and enjoying operational autonomy,
President) – refers to those offices
usually through a charter. (Malaga v.
placed under the chairmanship of the
Penachos)
President. (Anak Mindanao Party-List
Group v. The Executive Secretary)
Chartered Institution – any organized or
operating under a special charter, and
Attachment of an agency to a
vested by law with functions relating to
department is one of the three
specific constitutional policies or
administrative relationships under
objectives.
Administrative Code, the other two
being supervision and control and
Agency (SC definition) – is broadly
administrative supervision.
defined by statute as any of the various
units of the Government, including a
department, bureau, office,
Attachment – refers to the lateral agency to another is to attain “policy and
relationship between the department or program coordination”
its equivalent and the attached agency
Authority – has been used to designate
or corporation for the purposes of policy
both incorporated and non-incorporated
and program coordination.
agencies or instrumentalities of the
government.
Attached Agency – has a larger measure
of independence from the Department What makes a GOVERNMENT-OWNED
to which it is attached than one which is or CONTROLLED CORPORATION?
under departmental supervision and
control of administrative supervision. • Agency organized as a stock or
non-stock corporation
NOTE: • Vested with the functions
related to public needs
1. The attachment is merely for ‘policy • Whether governmental or
and program coordination’ proprietary in nature
2. With respect to administrative • Owned by government directly
matters, the independence of an or through its instrumentalities,
attached agency from Departmental either wholly or, where
control and supervision is further applicable,
reinforced by the fact that even an • as in the case of stock
agency under a Department’s corporation, to the extent of at
administrative supervision is free least 51% of its capital stock.
from departmental interference
Government agency – refers to any of
with respect to appointments and
the various units of the government of
other personnel actions ‘in
the Republic of the Philippines,
accordance with the
including a department, bureau, office,
decentralization of personnel
instrumentality or government-owned
functions’ under the Administrative
or controlled corporation, or a local
Code of 1987.
government or a distinct unit therein.
3. The administrative Code explicitly
provides that on supervision and Government-owned or controlled
control, it shall not apply to corporation – refers to any agency
chartered institutions attached to a organized as a stock or non-stock
department. corporation, vested with functions
relating to public needs whether
The administrative Code of 1987
governmental or proprietary in nature,
categorizes administrative
and owned by the Government of the
relationships:
Republic of the Philippines directly or
1. Supervision and control through its instrumentalities either
2. Administrative supervision wholly or, where applicable as in the
3. Attachment case of stock corporations, to the extent
of at least a majority of its outstanding
NOTE: the purpose of attaching one capital stock: Provided, however, That
functionality interrelated government
for purposes of this Act, the term Administration (LWUA) and the Asian
“GOCC”- shall include GICP/GCE and GFI Productivity Organization (APO).
as defined herein.
Non-chartered GOCC – refers to a GOCC
Government Financial Institutions organized and operating under Batas
(GFIs) – refer to financial institutions or Pambansa Bilang 68, or “The
corporations in which the government Corporation Code of the Philippines”.
directly or indirectly owns majority of
Manila International Airport Authority
the capital stock and. which are either:
– is a government instrumentality that
(1) registered with or directly supervised
does not qualify as a ‘government-
by the Bangko Sentral ng Pilipinas; or (2)
owned or controlled corporation.
collecting or transacting funds or
contributions from the public and places University of the Philippines –
them in financial instruments or assets considered as a government
such as deposits, loans, bonds and instrumentality, performing the State’s
equity including, but not limited to, the constitutional mandate of promoting
Government Service Insurance System quality and accessible education.
and the Social Security System.
While the said corporations are
Government Instrumentalities with government instrumentalities, they are
Corporate Powers (GICP)/Government loosely called government corporation
Corporate Entities (GCE) – refer to entities but not government-owned and
instrumentalities or agencies of the controlled corporations in strict sense.
government, which are neither
corporations nor agencies integrated Philippine National Red Cross – is not a
within the departmental framework, government-owned or controlled
but vested by law with special functions corporation,
or jurisdiction, endowed with some if Boy Scout of the Philippines – both a
not all corporate powers, administering government-controlled corporation with
special funds, and enjoying operational an original charter and as an
autonomy usually through a charter instrumentality of the Government
including, but not limited to, the within the meaning of Article IX (B) (2)
following: the Manila International (1) of the Constitution.
Airport Authority (MIAA), the Philippine
Ports Authority (PPA), the Philippine b. Nature
Deposit Insurance Corporation (PDIC),
the Metropolitan Waterworks and • May be regarded as an arm of the
Sewerage System (MWSS), the Laguna legislature insofar as it is authorized
Lake Development Authority (LLDA), the to promulgate rules that have the
Philippine Fisheries Development force of law by virtue of a valid
Authority (PFDA), the Bases Conversion delegation of legislative power.
and Development Authority (BCDA), the • It may also be loosely considered a
Cebu Port Authority (CPA), the Cagayan court because it performs functions
de Orb Port Authority, the San Fernando of a particular judicial charter; as
Port Authority, the Local Water Utilities when it decides factual and
 sometimes even legal questions as • The Metropolitan Manila
an incident of its general power of Authority is an administrative
regulation. body created by law.
• The administrative agency pertains • Other administrative bodies
to the executive department have been created by, and
because its principal function is the exclusively in the discretion of,
implementation of the law in the legislature.
accordance with the policies and • These agencies make up the
instructions laid down by the majority of the coterie of offices
legislatures. that constitute the so-called
• Administrative bodies endowed administrative department.
with quasi-judicial prerogatives are • Among these are the
essentially executive agencies, and Professional Regulation
are not considered as courts, or do Commission, the National Labor
not form part of the judiciary. Relations Commission and the
Securities and Exchange
NOTE: Court of Tax Appeal is a special
Commission.
court exercising particular expertise on
• The type of administrative
the subject of tax.
bodies have been generally
An administrative agency is composed classified as those:
of persons who are, at the outset, or at o Philippine Veterans
least eventually, experts in the Administration – to set
particular field of specialization under up to offer some
its jurisdiction. They are “appointed by gratuity, grant or special
law and informed by experience.” privileges.
o Bureau of Customs – to
The administrative body is variously
carry on certain the
called “board,” “commission,”
actual business of
“authority,” “administration,”
government.
“bureau,” “agency,” “council,”
o Bureau of Posts (now
“committee,” “office” and the like.
defunct) – to perform
some business service
for the public.
c. Creation and Abolition o Land Transportation
Franchising and
• The administrative body may be Regulatory – to regulate
created by the Constitution or business affected with
by Statute. public interest.
• CSC, COMELEC, and COA are o Securities and Exchange
independent constitutional Commission – to
bodies established under Article regulate private
IX of the fundamental law. business and individual
under the police power.
 o National Labor Relations power of the President to
Commission – to adjust reorganize the National
individual controversies Government may validly be
because of some strong delegated to his cabinet
social policy involved. members exercising control
• IF created by the over a particular executive
CONSTITUTION itself, the department.
administrative body can be • The Administrative Code of 1987
altered or abolished only by gives the President continuing
constitutional amendment. authority to reorganize and
• BUT where the body was redefine the functions of the
created by statute, the Office of the President.
legislature that breathed life
into it can amend or even repeal d. Advantages
its charter, thereby resulting
into its abolition, which is • Administrative agencies have
justified if made in good faith the advantage not only of
and not attended by grave expertise derived from
abuse of discretion. specialized training and
• In fact, as already noted, experience, as previously
modification and even abolition discussed, but also of
of administrative bodies are not adaptability to change and ease
uncommon at this time when in reacting to new and even
the contours of Administrative emergency situations, given its
Law have yet to be delineated flexible nature because of its
and the field itself has yet to basic rule-making authority and
stabilize. adjudicatory prerogatives.
• in this connection, it bears • Example in economic problems,
stressing that an administrative Legislative and Judiciary may be
body created by law may be slow in responding, but
reorganized pursuant to said law administrative bodies are more
providing for its establishment resilient. They may proceed to
or another law authorizing said the solution of the problems
reorganization. confided to their attention with
• So long as said reorganization more expeditiousness and
would not involve and abolition efficacy, owing to the flexibility
or transfer of offices and is of their powers, than can
carried out in good faith by the ordinarily be expected from the
person, usually the President, legislature.
authorized to effect the same, • In fact, it is not unusual for the
the validity of the same would legislature to create
have to be upheld. administrative bodies to
• Indeed, applying the doctrine of address new social problems,
qualified political agency, the e.g., environmental protection
 and pollution or population, and review and, if necessary, revise
vest in said agencies broad or even reverse its decisions.
guidelines for the resolutions of • Given this power of control
the said problems. exercised by the President over
the administrative agency, it
e. Relation to Regular Departments cannot claim independence
from the executive department.
• in the exercise of the powers • Insofar as the courts of justice
delegated to it by the legislature, are concerned, it is settled that
the administrative body acts as they cannot be deprived of
an agent of the law-making their inherent power to decide
body and so is bound to obey all questions of law, particularly
and implement legislative will. if they have been initially
• In fact, it cannot do otherwise. resolved by administrative
• As it is a creature of legislature, bodies only.
it may be abolished at will by its • Indeed, the courts can review, or
creator, or such of its incidents even reverse, the administrative
as the salary and emoluments or acts even of the Chief Executive.
appropriations attached • Courts may also review the
thereto, or its functions, or the factual findings of
term of the officers [including administrative offices,
incumbents], may be altered in sometimes by authority of law
the discretion of the legislature. or, when necessary, under the
• This enables the legislature to due process clause, if such
exert a great deal of influence determinations have been made
upon administrative body that arbitrarily.
can impair its independence. • The fact that Rules of Procedure
• On the other hand, the promulgated by administrative
administrative agency pertains bodies in connection with their
to the executive department exercise of their adjudicatory
and so comes under the functions are subject to the
constitutional control of the disapproval by the Supreme
President, which control Court, make administrative body
generally cannot be withdrawn also subservient to the judicial
or limited even by the department.
legislature. • Many administrative bodies
• There is therefore this have, once created, been
anomalous situation where a allowed to function with a
delegate of the legislature must minimum of interference from
not only reflect its will but the legislature chiefly because
should also, by constitutional amendment of their characters
flat, obey the President, who has become difficult owing to
may issue his own orders to the the support or protection these
administrative agency and bodies have grown to enjoy or
 may enjoy from certain body created by law may be
quarters or the public in general. reorganized pursuant to said law
• The President, although providing for its establishment
exercising control over them, is or another law authorizing said
also disposed to give wide rein reorganization.
to these administrative • So long as said reorganization
authorities or officers in would not involve and abolition
recognition of their superior or transfer of offices and is
know-how in their respective carried out in good faith by the
fields, earlier acknowledged by person, usually the President,
the President when he authorized to effect the same,
appointed them. For their part, the validity of the same would
the court of justice, as a matter have to be upheld.
of policy, review administrative • Indeed, applying the doctrine of
adjudications only as a last qualified political agency, the
resort and, usually, only when power of the President to
questions of law are involved. reorganize the National
• The view has grown that these Government may validly be
congeries of administrative delegated to his cabinet
bodies now constitute a fourth members exercising control
and separate department over a particular executive
coordinate with and practically department.
independent of the three • In Banda v. Ermita: the
traditional branches of President has the power to
government. reorganize the offices and
• Their continued existence rests agencies in the executive
upon their effectivity. department in line with his
• Their independence is founded constitutionally granted power
on their competence. of control over executive offices
• Their strength lies in their and by virtue of previous
acceptance. delegation of the legislative
• In other words, they will persist power to reorganize executive
so long as the general public offices under existing statutes.
continues to rely on the services • The Administrative Code of 1987
they offer and are satisfied with gives the President continuing
their performance of their authority to reorganize and
primordial tasks, i.e., the redefine the functions of the
regulation of private rights for Office of the President.
public welfare. • “Concomitant to such power to
abolish, merge, or consolidate
f. Reorganization (page 25-27 ata ito ha.) offices of the President Proper
and to transfer/offices not only
• in this connection, it bears among the offices in the Office
stressing that an administrative of the President and Executive
Branch, the President implicitly
has the power to effect less
radical or less substantive
change to the functional and
internal structure of the Office
of the President, including the
modification of functions of
such executive agencies as the
existing agencies of the service
may require.
Title Chrisostomo v. Court of Appeals
Doctrine ID.; ID.; ID.; TRAVEL AGENCY IS NOT A COMMON CARRIER. — It is obvious from the
above definition that respondent is not an entity engaged in the business of
transporting either passengers or goods and is therefore, neither a private nor a
common carrier. Respondent did not undertake to transport petitioner from one
place to another since its covenant with its customers is simply to make travel
arrangements in their behalf. Respondent's services as a travel agency include
procuring tickets and facilitating travel permits or visas as well as booking
customers for tours. While petitioner concededly bought her plane ticket through
the efforts of respondent company, this does not mean that the latter ipso facto is a
common carrier. At most, respondent acted merely as an agent of the airline, with
whom petitioner ultimately contracted for her carriage to Europe.

Facts Petitioner Estela L. Crisostomo contracted the services of respondent Caravan

Travel and Tours International, Inc. to facilitate her tour known as "Jewels of
Europe."

On June 12, 1991, Meriam Menor, respondent's ticketing manager as well as

petitioner's niece, delivered petitioner's travel documents and plane tickets and
informed her to be at the airport on June 15, 1991, two hours before departure.

On the stated date when the petitioner went to the airport, the flight that she was
supposed to take had departed the previous day.

She complained to Menor, but the latter prevailed upon her to take another tour
known as "British Pageant."

Upon petitioner's return from Europe, she demanded from respondent the
reimbursement of P61,421.70 representing the difference between the sum she
paid for "Jewels of Europe" and the amount she owed respondent for the "British
Pageant" tour, but despite several demands, respondent company refused to
reimburse the amount, contending that the same was non-refundable.

Thus, she filed a complaint against respondent for breach of contract of carriage
and damages.

In its answer, respondent denied the responsibility and insisted that petitioner
was duly informed of the correct departure as legibly printed on the plane ticket
two days ahead of the scheduled trip.

After trial, the lower court awarded damages to the petitioner on the basis that the
respondent was negligent, but it deducted 10% from the amount for the
contributory negligence of petitioner.

On appeal, the Court of Appeals found petitioner to be more negligent, hence, it

directed her to pay the balance of the price for the "British Pageant."

Hence, this petition.

Issue W/N the Caravan Travel and Tour s International Inc., should be held liable

Rulling No, they respondent cannot be held liable because at most they can only be seen as
agent of the airline. As stated by the Supreme Court: that respondent is not an entity
engaged in the business of transporting either passengers or goods and is therefore,
neither a private nor a common carrier.

Respondent did not undertake to transport petitioner from one place to another
since its covenant with its customers is simply to make travel arrangements in their
behalf.

Respondent's services as a travel agency include procuring tickets and facilitating

travel permits or visas as well as booking customers for tours. While petitioner
concededly bought her plane ticket through the efforts of respondent company, this
does not mean that the latter ipso facto is a common carrier.

At most, respondent acted merely as an agent of the airline, with whom petitioner
ultimately contracted for her carriage to Europe.

WHEREFORE, the instant petition is DENIED for lack of merit. The decision of the
Court of Appeals in CA-G.R. CV No. 51932 is AFFIRMED. Accordingly, petitioner is
ordered to pay respondent the amount of P12,901.00 representing the balance of
the price of the British Pageant Package Tour, with legal interest thereon at the rate
of 6% per annum, to be computed from the m was filed until the finality of this
Decision. After this Decision becomes final and executory, the rate of 12% per annum
shall be imposed until the obligation is fully settled, this interim period being
deemed to be by then an equivalent to a forbearance of credit
Important Deets
Title 2 Viola v. Alunan III
Doctrine
Facts A petition for prohibition challenging the validity of Art. III 1-2 of the Revised
Implementing Rules and Guidelines for the General Elections of the Liga ng mga
Brgy. Officers for the election of first and second and third vice presidents and for
auditors for the National Liga ng mga barangay and its chapters.

Petitioner brought this action as chairman of brgy. 167 zone 15 district II manila
against then secretary of interior and local government Rafael M. Alunan III. Et. Al
to restrain them from carrying out the elections for the questioned positions on
July 3, 1994.

Petitioner contended that the position in question are in excess of those

provided in Local Government Code of which mentions as elective positions only
those of president, vice president, and five members of the board of directors in
each chapter at the municipal, city, provincial, metropolitan political subdivision,
and national levels.

Petitioner argued that it will be in violation of the Implementing Rules expanding

the number of positions authorized of the Local Government Code.

Elections are over, but the issue raised will likely to arise in the future, hence the SC
will take cognizance of the case since it’s capable of repetition, yet evading review.

Issue W/N the board of directors of the Liga can create other positions

Rulling Yes, the BoD can create other positions. Local government code provides that:

The liga at the municipal, city, provincial, metropolitan political subdivision, and
national levels directly elect a president, a vice-president, and five (5) members of
the board of directors. The board shall appoint its secretary and treasurer and
create such other positions as it may deem necessary for the management of the
chapter.

This provision in fact requires — and not merely authorizes — the board of
directors to "create such other positions as it may deem necessary for the
management of the chapter"

That Congress can delegate the power to create positions such as these has been
settled by our decisions upholding the validity of reorganization statutes
authorizing the President of the Philippines to create, abolish or merge offices in
the executive department.
 Congress provided sufficient standard in making a delegation of this power to the
BoD

that §493 of the Local Government Code, in directing the board of directors of the
liga to "create such other positions as may be deemed necessary for the
management of the chapter[s]," embodies a fairly intelligible standard. There is
no undue delegation of power by Congress.

Hence, the BoD can create positions.

WHEREFORE, the petition for prohibition is DISMISSED for lack of merit. SO

ORDERED.
Important Deets The Board may create such other positions as it may deem necessary for the
management of the chapter.

Justice Davide contends in dissent, however, that "only the Board of Directors —
and not any other body — is vested with the power to create other positions as
may be necessary for the management of the chapter" and that, in any case, there
is no showing that the Barangay National Assembly was authorized to draft the
Constitution and By-laws because he is unable to find any law creating it.

While the board of directors of a local chapter can create additional positions to
provide for the needs of the chapter, the board of directors of the National Liga
must be deemed to have the power to create additional positions not only for its
management but also for that of all the chapters at the municipal, city, provincial
and metropolitan political subdivision levels. Otherwise the National Liga would be
no different from the local chapters. There would then be only so many local
chapters without a national one, when what is contemplated in the above-quoted
provisions of the LGC is that there should be one Liga ng mga Barangay with local
chapters at all levels of local government units.

The fact is that §493 grants the power to create positions not only to the boards
of the local chapters but to the board of the Liga at the national level as well.

NOTE ITO:
Section 493 actually gives the board the power to “[1]appoint its secretary and
treasurer and [2]create such other positions as it may deem necessary for the
management of the chapter.” The additional positions to be created need not
therefore be appointive positions.
Title Biraogo v. The Ph Truth Comission
Doctrine
Facts At the dawn of his administration, President Benigno Simeon Aquino III, on July 30,
2010, signed Executive Order No. 1 establishing the Philippine Truth Commission of
2010 (Truth Commission).

Petitioner Louis Biraogo, in his capacity as a citizen and taxpayer, assails EO No. 1 for
being violative of the legislative power of Congress under Section 1, Article VI of
the Constitution as it usurps the constitutional authority of the legislature to create
a public office and to appropriate funds therefor.

A special civil action for certiorari and prohibition was likewise filed by petitioners
Edcel C. Lagman,et al. (petitioners-legislators) as incumbent members of the House
of Representatives.

As can be gleaned from the provisions of the EO, the Philippine Truth Commission
(PTC) is a mere ad hoc body formed under the Office of the President with the
primary task to investigate reports of graft and corruption committed by third-level
public officers and employees, their co-principals, accomplices and accessories
during the previous administration, and thereafter to submit its finding and
recommendations to the President, Congress and the Ombudsman.

Though it has been described as an “independent collegial body,” it is essentially an

entity within the Office of the President Proper and subject to his control.
Doubtless, it constitutes a public office, as an ad hoc body is one.

Biraogo asserts that the Truth Commission is a public office and not merely an
adjunct body of the Office of the President. Thus, in order that the President may
create a public office he must be empowered by the Constitution, a statute or an
authorization vested in him by law. Similarly, in G.R. No. 193036, petitioners-
legislators argue that the creation of a public office lies within the province of
Congress and not with the executive branch of government.

Issue W/N the creation of the PTC falls within the power to reorganize of the President

Rulling No it does not. According to section 31 of the Revised Administrative Code:

“reorganization” as limited by the following functional and structural lines: (1)
restructuring the internal organization of the Office of the President Proper by
abolishing, consolidating or merging units thereof or transferring functions from one
unit to another; (2) transferring any function under the Office of the President to
any other Department/Agency or vice versa; or (3) transferring any agency under
the Office of the President to any other Department/Agency or vice versa.

Clearly, the provision refers to reduction of personnel, consolidation of offices, or

abolition thereof by reason of economy or redundancy of functions.
 The creation of an office is nowhere mentioned, much less envisioned in said
provision.

To say that the PTC is borne out of a restructuring of the Office of the President
under Section 31 is a misplaced supposition, even in the plainest meaning
attributable to the term “restructure”—an “alteration of an existing structure.”
Evidently, the PTC was not part of the structure of the Office of the President prior
to the enactment of Executive Order No. 1.

WHEREFORE, the petitions are GRANTED. Executive Order No. 1 is hereby declared
UNCONSTITUTIONAL insofar as it is violative of the equal protection clause of the
Constitution. As also prayed for, the respondents are hereby ordered to cease and
desist from carrying out the provisions of Executive Order No. 1. SO ORDERED.
Important Deets
Title Kapisanan ng mga Kawani ng Energy Regulatory Board vs. Commissioner Fe B.
Barin
Doctrine Administrative Law; Abolition of Office; The power to create an office carries with
it the power to abolish.—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 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.

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.

On 17 October 2001, the Commissioners issued the guidelines for the

selection and hiring of ERC employees.

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 ERB's character
as an economic regulator of the electric power industry. KERB insisted that RA 9136
merely changed the ERB's name to the ERC and expanded the ERB's functions and
objectives.

The ERC prescribed an application format, guidelines, and hired an independent

consultant to administer the necessary tests for the technical and managerial
levels.

Finally, the ERC already posted the plantilla 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 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.

Fearing of the uncertainty of the employment status of its members, the petitioner
filed present petition

Issue W/N section 38 of RA 9136is valid

W/N it is a reorganization done in bad faith

Rulling Yes, as cited by the Court: R.E. AGPALO, PHILIPPINE ADMINISTRATIVE LAW 5
(2004), 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
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 abolition
in the law itself. Section 38 of RA 9136 explicitly abolished the ERB.

Hence, the law is valid and constitutional.

However, abolition of an office and its related positions is different from removal
of an incumbent from his office. Abolition and removal are mutually 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 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 constitutional
security of tenure of civil service employees. 9 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 employment.

Where one office is abolished and replaced with another

office vested with similar functions, the abolition is a legal nullity. 11 When there
is a void abolition, the incumbent is deemed to have never ceased holding
office.

No it is not reorganization in bad faith as claimed by the petitioners. 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.

There is no question in our minds that, because of the expansion of the ERC's
functions and concerns, there was a valid abolition of the ERB. Thus, there is no
merit to KERB's allegation that there is an impairment of the security of tenure of
the ERB's employees.
 WHEREFORE, we DISMISS the petition. No costs.
Important Deets

Title CHR Employees vs. CHR

Doctrine
Facts 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.

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.

On the strength of these special provisions, the CHR, through its then Chairperson
Aurora P. Navarette-Reciña 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 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.

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. This is based on absent specific provision of law
which may be the legal basis to elevate the level of divisions to a bureau or
regional 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

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.

DITO KA NA ULI:
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 CHREA's request in a Resolution dated 16 December

1999, and reversed the recommendation of the CSC-Regional Office that the
upgrading scheme be censured.

CHREA filed a motion for reconsideration, but the CSC-Central Office denied

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 CHR's fiscal autonomy.
Issue W/N the CHR can validly implement on upgrading, reclassification, creation, and
collapsing of plantilla positions in the Commission without prior approval of the
DBM

Rulling
No they cannot, only the DBM can. The regulatory power of the DBM on matters
of compensation is encrypted not only in law, but in jurisprudence as well.

In Victorina Cruz v. Court of Appeals, the Court held that the DBM has the sole
power and discretion to administer the compensation and position classification
system of the national government.

In this case, the CHR erred when it implement on upgrading, reclassification,

creation and collapsing plantilla position because such function is not granted by
the Constitution to DBM but as well recognized in the annals of the decision of the
Supreme Court. Furthermore, CHR, while a constitutional creation, has no fiscal
autonomy by constitution or legislative fiat.

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.

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.

NOTE:
merely states its coverage to include Constitutional Commissions and Offices
enjoying fiscal autonomy. Walang batas na nag sasaad na si CHR ay may fiscal
autonomy.

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.
Important Deets
Title Anak Mindanao Party List Group v. Executive Secretary
Doctrine Same; Same; The Constitution confers, by express provision, the power of control
over executive departments, bureaus and offices in the President alone; The
Constitution’s express grant of the power of control in the President justifies an
executive action to carry out reorganization measures under a broad authority of
law.—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 Constitution’s express grant of the
power of control in the President justifies an executive action to carry out
reorganization measures under a broad authority of law.

Same; Same; 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.—In establishing an executive department, bureau
or office, the legislature necessarily ordains an executive agency’s position in the
scheme of administrative structure. Such determination is primary, but subject to
the President’s 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 to
carry out reorganization measures. The Administrative Code of 1987 is one such
law.

Same; Same; 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 efficiency.—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 efficiency.
Gauged against these guidelines, the challenged executive orders may not be said
to have been issued with grave abuse of discretion or in violation of the rule of law.

Facts E.O. No. 364, which President Gloria Macapagal-Arroyo issued on

September 27, 2004, TRANSFORMING THE DEPARTMENT OF AGRARIAN REFORM
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.

The presidential commission for urban poor (PCUP) is hereby placed under the
supervision and control of the Department of Land Reform.

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

AMENDING EXECUTIVE ORDER NO. 364 ENTITLED TRANSFORMING THE

DEPARTMENT OF AGRARIAN REFORM INTO THE DEPARTMENT OF LAND
REFORM

"Section 3. The National Commission on Indigenous Peoples (NCIP) shall be an

attached agency of the Department of Land Reform."

Petitioners contend that the two presidential issuances are unconstitutional

Issue W/N it is a valid act of the president placing the Presidential Commission for Urban
Poor under the supervision and control of Dept. Agrarian Reform and the National
Commission on Indigenous People under Dept. Agrarian Reform as an attached
agency
Rulling Yet it is a valid act of the president. The Constitution confers, by express provision,
the power of control over executive departments, bureaus and offices in the
President alone.

As stated in the case of Bagaoisan v. National Tabacco Administration: The

Constitution's express grant of the power of control in the President justifies an
executive action to carry out reorganization measures under a broad authority of
law.

The Office of the President consists of the Office of the President proper and the
agencies under it. 33 It is not disputed that PCUP and NCIP were formed as
agencies under the Office of the President.

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 efficiency.

Hence, it is clear that the president has the prerogative to reorganize and put PCUP
under control and supervision of DAR and NCIP as attached agency of DAR since
the constitution vests such power to the president. Hence, it is a valid act of the
president.

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. SO ORDERED.
Important Deets
Title Bagaoisan v. National Tabacco Administration
Doctrine POLITICAL LAW; EXECUTIVE DEPARTMENT; PRESIDENT IS
EXPRESSLY GRANTED CONTROL THEREOF; APPLICATION IN CASE AT BAR. — It
is important to emphasize that the questioned Executive Orders No. 29 and No. 36
have not abolished the National Tobacco Administration but merely mandated its
reorganization through the streamlining or reduction of its personnel. Article VII,
Section 17, of the Constitution, expressly grants the President control of all
executive departments, bureaus, agencies and offices which may justify an
executive action to inactivate the functions of a particular office or to carry out
reorganization measures under a broad authority of law. Section 78 of the General
Provisions of Republic Act No. 8522 (General Appropriations Act of FY 1998) has
decreed that the President may direct changes in the organization and key
positions in any department, bureau or agency pursuant to Article VI, Section 25,
of the Constitution, which grants to the Executive Department the authority to
recommend the budget necessary for its operation. Evidently, this grant of power
includes the authority to evaluate each and every government agency, including the
determination of the most economical and efficient staffing pattern, under the
Executive Department. In the recent case of Rosa Ligaya C. Domingo, et al. vs. Hon.
Ronaldo D. Zamora, in his capacity as the Executive Secretary, et al., this Court has
had occasion to also delve on the President's power to reorganize the Office of the
President under Section 31(2) and (3) of Executive Order No. 292 and the power to
reorganize the Office of the President Proper. The Court has there .observed: ". . .
.Under Section 31(1) of EO 292, the President can reorganize the Office of the
President Proper by abolishing, consolidating or merging units, or by transferring
functions from one unit to another. In contrast, under Section 31(2) and (3) of EO
292, the President's power to reorganize offices outside the Office of the President
Proper but still within the Office of the President is limited to merely transferring
functions or agencies from the Office of the President to Departments or Agencies,
and vice versa." The provisions of Section 31, Book III, Chapter 10, of Executive Order
No. 292 (Administrative Code of 1987), above-referred to, reads thusly: "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 reorganize the
administrative structure of the Office, of the President. For this purpose, he may take
any of the following actions: "(1) Restructure the internal organization of the Office
of the President Proper, including the immediate Offices, the Presidential Special
Assistants/Advisers System and the Common Staff Support System, by abolishing,
consolidating or merging units thereof or transferring functions from one unit to
another; "(2) Transfer any function under the Office of the President to any other
Department or Agency as well as transfer functions to the Office of the President
from other Departments and Agencies; and "(3) Transfer any agency under the Office
of the President to any other department or agency as well as transfer agencies to
the Office of the President from other departments and agencies." The first sentence
of the law is an express grant to the President of a continuing authority to reorganize
the administrative structure of the Office of the President. The succeeding
numbered paragraphs are not in the nature of provisos that unduly limit the aim and
 scope of the grant to the President of the power to reorganize but are to be viewed
in consonance therewith. Section 31(1) of Executive Order No. 292 specifically refers
to the President's power to restructure the internal organization of the Office of the
President Proper, by abolishing, consolidating or merging units hereof or
transferring functions from one unit to another, while Section 31(2) and (3) concern
executive offices outside the Office of the President Proper allowing the President
to transfer any function under the Office of the President to any other Department
or Agency and vice-versa, and the transfer of any agency under the Office of the
President to any other department or agency and vice-versa. In the present instance,
involving neither an abolition nor transfer of offices, the assailed action is a mere
reorganization under the general provisions of the law consisting mainly of
streamlining the NTA in the interest of simplicity, economy and efficiency. It is an act
well within the authority of President motivated and carried out, according to the
findings of the appellate court, in good faith, a factual assessment that this Court
could only but accept.

Facts President Joseph Estrada issued on 30 September 1998Executive Order No. 29,
entitled "Mandating the Streamlining of the National Tobacco Administration
(NTA)," a government agency under the Department of Agriculture.

the rank and file employees of NTA Batac, among whom included herein
petitioners, filed a letter-appeal with the Civil Service Commission and sought its
assistance in recalling the OSSP.

ETO FACTS:
President Joseph Estrada issued several Executive Orders reorganizing the National
Tobacco Administration (NTA). In compliance therewith, the NTA prepared and
adopted a new Organization Structure and Staffing Pattern (OSSP). Petitioners
were rank and file employees of NTA who were terminated and were not considered
in the OSSP.

They filed a petition for certiorari, prohibition and mandamus before the Regional
Trial Court of Batac, Ilocos Norte to enjoin the respondents from enforcing the notice
of termination addressed to the petitioners.

The RTC decided in favor of petitioners and thus ordered NTA to appoint
petitioners in the new OSSP.

On appeal, the Court of Appeals reversed the RTC ruling.

Issue whether or not the President, through the issuance of an executive order, can
validly carry out the reorganization of the NTA.

Rulling Yes, the president can. In the case of Buklod ng Kawaning EIIB vs. Zamora. it ruled
that the President, based on existing laws, had the authority to carry out a
reorganization in any branch or agency of the executive department.
 There are laws that grants such power to the President: 'Section 48 of R.A. 7645;
E.O. No. 132 is Section 20,

In the assailed executive order, the Court recognizes the authority of the President
to effect organizational changes in the department or agency under the executive
structure.

It was, therefore, an act well within the authority of the President motivated and
carried out, according to the findings of the appellate court, in good faith,

In the present instance, involving neither an abolition nor transfer of offices, the
assailed action is a mere reorganization under the general provisions of the law
consisting mainly of streamlining the NTA in the interest of simplicity, economy
and efficiency.

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 judgment be
made in due course. No costs. SO ORDERED.

Important Deets The general rule has always been that the power to abolish a public office is
lodged with the legislature. This proceeds from the legal precept that the power
to create includes the power to destroy. A public office is either created by the
Constitution, by statute, or by authority of law. Thus, except where the office was
created by the Constitution itself, it may be abolished by the same legislature that
brought it into existence. The exception, however, is that as far as bureaus,
agencies or offices in the executive department are concerned, the President’s
power of control may justify him to inactivate the functions of a particular office,
or certain laws may grant him the broad authority to carry out reorganization
measures.

Reorganization is carried out in 'good faith' if it is for the purpose of economy or to

make bureaucracy more efficient.

GOOD FAITH if it’s for the purpose of economy or make bureaucracy more efficient.
Title Larin v. Executive Secretary
Doctrine
Facts Petitioner was convicted by the Sandiganbayan of the crimes of violation of
Section 268 (4) of the National Internal Revenue Code and Section 3 (e) of Republic
Act 3019.

The fact of his conviction was reported to the President of the Philippines and acting
by authority of the latter, then Sr. Deputy Executive Secretary Leonardo A.
Quisumbing issued Memorandum Order No. 164 which provides for the creation of
an Executive Committee to investigate the administrative charge against petitioner.

The Committee directed the petitioner to respond to the administrative charge.

Meanwhile, the President issued the challenged Executive Order No. 132 which
mandated the streamlining of the Bureau of Internal Revenue.

The Excise Tax Service or the Specific Tax Service, of which petitioner was the
Assistant Commissioner, was one of those offices that was abolished by the said
executive order.

The President found petitioner guilty of grave misconduct and imposed upon him
the penalty of dismissal with forfeiture of all benefits and disqualification for
reappointment in the government service. I

n this petition, petitioner challenges the authority of the President to dismiss him
from office arguing that insofar as presidential appointees who are Career Executive
Service Officers are concerned, the President exercises only the power of control and
not the power to remove.

Issue W/N the challenged executive order NO. 132 is a valid reorganization? -it’s made in
bad faith.
Rulling No, it is not reorganization because it is done in bad faith. As stated by the Supreme
Court: while the President's power to reorganize cannot be denied, this does not
mean however that the reorganization itself is properly made in accordance with
law. Jurisprudence provides that, Well-settled is the rule that reorganization is
regarded as valid provided it is pursued in good faith.
 In this case, it is not a valid reorganization because: some of the provisions of the
questioned E.O. No. 132 clearly leads to an inescapable conclusion that there are
circumstances considered as evidences of bad faith in the reorganization of the BIR.

Under the Section 2 of R. A. No. 6656, it states that it is bad faith if: Where an
office is abolished and another performing substantially the same functions is
created;

Within the provision of E.O No. 132: The Intelligence and Investigation Office and
the Inspection Service are abolished. An Intelligence and Investigation Service is
hereby created to absorb the same functions of the abolished office and service. . .
." (emphasis ours)

This provision is a clear illustration of the circumstance mentioned in Section 2 (b)

of R.A. No. 6656 that an office is abolished and another one performing
substantially the same function is created.

Hence, the E.O 132 is an invalid reorganization for being faith.

IN VIEW OF THE FOREGOING, the petition is granted, and petitioner is hereby

reinstated to his position as Assistant Commissioner without loss of seniority rights
and shall be entitled to full backwages from the time of his separation from service
until actual reinstatement unless, in the meanwhile, he would have reached the
compulsory retirement age of sixty-five years in which case, he shall be deemed to
have retired at such age and entitled thereafter to the corresponding retirement
benefits. SO ORDERED.
Important Deets