|By @tchi_kira|

ESLAO vs. COMMISSION ON AUDIT

In 1988, Pangasinan State University (PSU) collaborated with the Department of Environment and Natural Resources
(DENR) to evaluate reforestation programs in Pangasinan, funded by an Asian Development Bank loan. PSU approved
honoraria rates for personnel involved. PSU reduced the amount per National Compensation Circular #53. In 1989,
PSU's auditor alleged overpayment based on Compensation Policy Guidelines #80-4. PSU sought clarification from
the Department of Budget Management (DBM), which confirmed NCC #53 applied. The Commission on Audit (COA)
disagreed, citing the project's local nature and DBM's ruling's lack of basis. COA argued that loan proceeds become
public funds, making ADB-funded projects locally funded.
ISSUE: WON the NCC #53 should govern the payment of honoraria and per diem to the personnel of PSU
involved in the DENR and PSU project. (YES)
R: The determination of whether NCC #53 should govern the payment of honoraria and per diem to PSU personnel
involved in the DENR and PSU project lies within the scope of the DBM's authority to classify positions and set
appropriate salaries, as outlined in the Administration Code of 1987. Additionally, COA's role is to ensure compliance
with government laws and regulations during post-audit activities, rather than to substitute its own judgement
regarding the applicability of specific regulations. Its post-audit function involves ensuring compliance with
government laws and regulations, such as verifying budget allocations, legality of transactions, and proper
documentation, rather than interpreting which law is more applicable.Therefore, the decision regarding the governing
regulation for honoraria and per diem payments should be guided by the DBM's classification and the relevant
administrative regulations.

BPI vs. CA
BPI Leasing Corporation, Inc. (BLC) paid "contractor’s percentage tax" for 1986 based on its gross rentals, as
required by Section 205 of the NIRC. However, on November 10, 1986, the Commissioner of Internal Revenue
(CIR) issued RR 19-86, shifting finance and leasing companies to a "gross receipts tax" regime under Section 260 of
the NIRC. BLC recalculated its tax liability accordingly and sought a refund for overpaid taxes. The Court of Tax
Appeals (CTA) denied the refund, stating that RR 19-86 applies prospectively from January 1, 1987, and since
BLC's rental income was earned before this date, it was not covered. BLC appealed to the Court of Appeals, arguing
for retroactive application of RR 19-86, but respondents insisted on its clear and unequivocal prospective
application, leading to a legal dispute over the interpretation of the regulation's effective date.

Issue 1: WON RR 19-86 is legislative or interpretive in nature.

BLC argues that RR 19-86 is legislative rather than interpretative, contending that it should retroactively apply. The
Court agrees, noting that RR 19-86 was issued pursuant to the Secretary of Finance's rule-making power, making it
legislative. BLC also claims invalidity due to lack of due process, citing a case where a revenue memorandum
circular was nullified for similar reasons. However, the Court finds that RR 19-86 benefits taxpayers by reducing
taxes, and BLC itself relies on it for a refund claim. Thus, if deemed invalid, BLC would lose its basis for the
refund.

Issue 2: WON RR 19-86 is prospective or retroactive in nature.

The Court now resolves whether its application should be prospective or retroactive. Statutes, including
administrative rules and regulations, operate prospectively only, unless the legislative intent to the contrary is
manifest by express terms or by necessary implication. In the present case, there is no indication that the RR may
operate retroactively. Furthermore, there is an express provision stating that it "shall take effect on January 1, 1987,"
and that it "shall be applicable to all leases written on or after the said date." Thus, BLC is not in a position to
invoke the provisions of RR 19-86 for lease rentals it received prior to January 1, 1987.

ISSUE 3: WON BPI failed to meet the quantum of evidence required in refund cases.

Tax refunds are in the nature of tax exemptions. As such, these are to be strictly construed against the person or
entity claiming the exemption. The burden of proof is upon him who claims the exemption and he must be able to
justify his claim by the clearest grant under Constitutional or statutory law, and he cannot be permitted to rely upon
vague implications. Nothing that BLC has raised justifies a tax refund.

FALLO: WHEREFORE, the petition for review is hereby DENIED, and the assailed decision and resolution of the
Court of Appeals are AFFIRMED. No pronouncement as to costs. SO ORDERED. PRINCIPLES INVOLVED:
Legislative or Interpretive nature of Statute Prospective or Retroactive effect of Ordinances
 CIR vs CA
RA 7654, enacted on June 10, 1993, amended Sec. 142 (c) of the NIRC, affecting the taxation of cigarette brands
such as Hope, More, and Champion, which were previously considered local brands. Under the amended law, these
brands should be taxed at 20 to 45%. However, on July 1, 1993, the Commissioner of Internal Revenue issued
Revenue Memorandum Circular 37-93, reclassifying the brands as locally manufactured cigarettes with foreign
branding, subjecting them to a 55% ad valorem tax. This reclassification occurred before RA 7654 took effect and
without prior notice and hearing. The CIR argued that the circular was interpretative and therefore did not require
notice and hearing.

Whether or not RMC 37-93 was valid and enforceable. (NO)

The lack of notice and hearing in the issuance of Revenue Memorandum Circular 37-93 violated the due process
required for promulgated rules, and it infringed upon the principle of uniformity of taxation and equal protection.
The circular, which reclassified certain cigarette brands and raised their tax rates, was not merely interpretative but
legislative in nature, as it went beyond interpreting the law and effectively created new regulations. Administrative
agencies like the Bureau of Internal Revenue have the power to make rules, which may be either legislative or
interpretative. Legislative rules act as subordinate legislation, filling in the details of statutes under specific
delegation of power. In such cases, affected parties should be given the opportunity to be heard before the new rules
take effect, ensuring fairness and transparency in the regulatory process.

ISRAEL PERALTA vs. CA

Peralta, the head of the Parole and Probation Administration (PPA) Region XII, faced allegations of mismanagement
when the Central Office inadvertently reported Olegario's position as unfilled, resulting in the non-release of funds
for her salary. Peralta used the office's savings to pay Olegario but later issued an illegal order for her and another
employee to cease work due to insufficient funds, despite warnings from the Civil Service Commission (CSC).
Despite CSC's advice to allow Olegario to return to work, Peralta persisted until receiving an allotment for their
salaries from the Department of Budget and Management (DBM). The Office of the Ombudsman (OMB) found
Peralta guilty of grave abuse of discretion, leading to his preventive suspension.

Whether or not the Regional Office of CSC has authority to enforce civil service laws. (YES)

The Regional Office of the Civil Service Commission (CSC) holds the authority to enforce civil service laws, as
established by Presidential Decree No. 807 and Executive Order No. 292. This authority encompasses the
enforcement of personnel management standards and actions within government agencies. Consequently, the CSC
Regional Office has the power to issue opinions and rulings on personnel management matters, which are binding
on government agencies. The CSC's ruling that the memorandum issued by Peralta directing Nida Olegario to cease
her duties and go on leave without pay is contrary to civil service laws and rules, is therefore binding on Peralta.
Additionally, both PD No. 807 and EO No. 292 emphasize that no officer or employee in the Civil Service shall be
suspended or dismissed except for cause and after due process, further supporting the CSC's ruling in this case.

LA BUGAL-B’LAAN TRIBAL ASSOCIATION, INC vs. RAMOS

The Philippine government granted a Mineral Production Sharing Agreement (MPSA) to Western Mining
Corporation (WMC) over certain areas in South Cotabato, Sultan Kudarat, and Davao del Sur. La Bugal B’Laan
Tribal Association, Inc. (LBTA), representing the indigenous peoples in the area, filed a petition with the Supreme
Court challenging the constitutionality of the Mining Act of 1995 and its implementing rules and regulations. They
argued that the law violated their constitutional rights to a balanced and healthful ecology, ancestral domain, self-
determination, and cultural integrity. They also contended that the MPSA granted to WMC was unconstitutional.

WON FTAA is unconstitutional and the prohibition and mandamus against the public respondents,
alleging that they acted without or in excess of jurisdiction in implementing the FTAA? (NO) [Re:
Mandamus against respondents – GAD]

The Supreme Court ultimately ruled in favor of the respondents, upholding the constitutionality of the Mining Act
of 1995 and the FTAAs. The Court determined that the provisions of the Mining Act did not infringe upon the rights
of indigenous peoples or contravene the constitutional mandate to protect the environment. It emphasized the state's
authority to regulate mining activities for national development purposes, while also acknowledging the importance
of respecting the rights of indigenous communities and ensuring environmental sustainability.
HELD:

In its ruling, the Supreme Court affirmed the legality of the FTAAs and the authority of the government
agencies involved in their implementation. The decision had significant implications for mining policies
in the Philippines, providing clarity on the legal framework governing mining activities, indigenous
rights, and environmental conservation. While recognizing the importance of balancing development
objectives with environmental and social concerns, the Court's ruling underscored the need for proper
implementation and compliance with laws and regulations to address the legitimate interests of affected
communities and safeguard the environment.

The FTAA, deemed constitutional by the Supreme Court, must adhere to legislative requirements and
ensure due process in its implementation. Despite this validation, the Court's issuance of a writ of
mandamus against the respondents highlights their lapses in adhering to proper consultation with
indigenous groups, addressing environmental concerns, and upholding due process. This underscores the
importance of adhering to legal procedures and transparency in resource utilization, even within the
framework of constitutionally upheld agreements.

Sierra Madre Trust vs. Secretary of Agriculture and Natural Resources 121 SCRA 384
On July 26, 1962, the Sierra Madre Trust filed with the Bureau of Mines an Adverse Claim against LLA No. V-7872 (Amd) of the
Jusan Trust Mining Company over six (6) lode mineral claims, with the office of the Mining Recorder of Nueva Vizcaya, and all
situated in Sitio Maghanay, Barrio Abaca Municipality of Dupax, Province of Nueva Vizcaya. The Director of mines dismissed
the claim, and Secretary of Agriculture and Natural Resources affirmed the decision the latter.
Whether or not Private Agricultural lots donated to the Department of Education is subject to the Comprehensive
Agrarian Reform Program and can be distributed to farmer-beneficiaries identified by the administrative agency?

Yes, agricultural lots previously held as alienable and disposable subsequently donated to the DECS which is not exclusively for
educational purposes but was leased to Anglo Agricultural Corporation is not exempted from the coverage of the CARP but is
subject to distribution for farmer-beneficiaries identified by the DAR, the administrative agency authorized to do so. the petition
is GRANTED. The decision of the Court of Appeals is REVERSED and SET ASIDE. The decision of the Secretary of Agrarian
Reform placing the subject lands under CARP coverage, is REINSTATED.
Whether or not the Director of Mines lapsed in validly locating the mining claims?
No. The officials responsible for administering the Mining Law have determined that there are no conflicts or overlaps regarding
the claims in question. Therefore, the answers to any questions raised by the petitioner are unlikely to significantly benefit their
interests. It's worth noting that the interpretations made by officers overseeing laws within their jurisdiction deserve considerable
respect. In his ruling, the Secretary of Agriculture and Natural Resources affirmed that the mining claims of the appellees were
properly located, surveyed, and registered, aligning with the findings of the Director of Mines.

ESPAÑOL vs. PVA

Maria U. Español, widow of deceased veteran German Español, applied for a monthly pension under the
Philippine Veterans Administration (PVA).Her pension was cancelled on November 1, 1951.After more
than 22 years, Maria filed a petition for mandamus with the Court of First Instance (CFI) of Manila on
February 25, 1974, seeking the restoration and continued payment of her monthly pension.

Whether Maria's action to compel the restoration of her monthly pension, as well as that of her
children, has already prescribed. (NO)

Maria Español's case sought the reinstatement of her monthly pension cancelled by the Philippine
Veterans Administration (PVA) in 1951. The Supreme Court ruled in her favor, stating her action had not
expired. The Court clarified that the 10-year prescriptive period started from a previous case on June 27,
1973. Maria's claim, filed in 1974, fell within this timeframe. The Court found her entitled to her
pension, rejecting arguments about appropriation issues. Maria's action prospered without exhausting
administrative remedies, as it involved legal questions. The Court ordered the PVA to pay Maria her
monthly pension from November 1, 1951, including dependent's pension for her minor children.
 Executive Secretary vs. Southwing Heavy Industries
Several petitions seek to overturn the Regional Trial Court's rulings that deemed a section of Executive Order 156,
issued by President Gloria Macapagal Arroyo in 2002, unconstitutional. This order prohibits the importation of used
vehicles in the Philippines, including the Subic Bay Freeport Zone, with exceptions. Southwing Heavy Industries
Inc., Subic Integrated Macro Ventures Corp, and Motor Vehicle Importers Association of Subic Bay Freeport Inc
filed separate actions challenging the constitutionality of this provision. The Regional Trial Court held that it
exceeds the President's authority and infringes on legislative power, as per the Constitution and Republic Act 7227.
Despite appealing to the Court of Appeals, the petitioners' appeal was denied, with the court asserting that regulating
the importation of used motor vehicles is a legislative prerogative. Hence, without an enabling law, the President's
exercise of this power through executive issuance is deemed void.

Whether or not the Executive Order prohibiting the importation of used motor vehicles is valid. (YES)
The constitutionality of Executive Order 156 is upheld, as it was issued pursuant to EO 226, also known as the
Omnibus Investment Code. However, the application of EO 156 to the Freeport Zone is deemed valid because the
guarantee of RA 7227 on the free flow of goods into the zone is an exemption from customs duties and taxes, not an
unlimited allowance for all goods without restriction. The petition is considered partially meritorious. The decisions
of the Regional Trial Court and the Court of Appeals are modified to the extent that Article 2 Section 3.1 of EO 156
is not void in its entirety.

1. Authorization by the legislature: Delegation of legislative powers to the President is permitted in Section 28(2) of
Article VI of the Constitution. Relevant laws include Tariff and Customs Code, EO 226, and RA 8800.

2. Promulgation in accordance with prescribed procedure: No question was raised regarding procedural due process.
It is presumed to have complied with procedures and limitations imposed by law.

3. Scope of authority given by the legislature: EO 156 exceeded its scope by extending the importation ban on used
cars to the Freeport Zone, which is considered a foreign territory under Republic Act 7227.

4. Reasonableness: The Court found EO 156 unreasonable as it applied the importation ban to the Freeport Zone,
where it did not logically address the intended protection of the domestic industry.
Article 2, Section 3.1 of EO 156 is declared VOID within the secured fenced-in former Subic Naval Base area BUT
VALID for the customs territory or Philippine territory outside this area. Hence, used motor vehicles entering via
the former Subic Naval Base area may be stored, used, traded, or exported, but cannot be imported into Philippine
territory outside this area. The petitions are partially granted, affirming the validity of EO 156 in specific contexts
while voiding it in others.

CHINA BANK CORP. vs. MEMBERS OF BOARD OF TRUSTEES OF HDMF

CBC and CBC-PCCI were granted certificates of waiver by the Home Development Mutual Fund (HDMF) under PD 1752 for a
Superior Retirement Plan. However, after RA 7742 amended PD 1752, requiring a company to have a superior
provident/retirement and housing plan to be exempt from fund coverage, their applications for renewal of waiver were denied
because their retirement plan was not deemed superior to the PAG-IBIG Fund. In response, they filed a petition seeking to annul
the Amendment and Guidelines, alleging that the HDMF Board exceeded its rule-making power. The Regional Trial Court
dismissed the petition, stating that the denial or grant of waiver applications falls within the authority of the HDMF Board.
Petitioners acknowledged the HDMF's power to issue rules but argued that the Amendment and Guidelines were inconsistent
with PD 1752 as amended by RA 7742, which only requires the existence of either a superior provident (retirement) plan or a
superior housing plan for exemption.

WoN the HDMF acted in excess of jurisdiction or with grave abuse of discretion amounting to lack of jurisdiction in
issuing the assailed amendment. (YES)
The principle is established that rules and regulations, derived from delegated power to create new legal provisions with the force
of law, must align with the statutory authority granted by the legislature to the administrative agency. In this case, the term
"and/or" in Section 19 of P.D. No. 1752 signifies that an employer with a provident plan or an employee housing plan superior to
that of the fund may obtain exemption from coverage. The legislative intent behind the use of "and/or" is to allow flexibility,
meaning the employer need only possess one of the superior plans, not both. Therefore, by removing the disjunctive "or" in the
implementing rules, the respondent Board exceeded its authority. While requiring both plans may enhance the effectiveness of
the Home Development Mutual Fund, adherence to the basic law prevails, and rules cannot surpass its terms. Consequently, the
petition is given due course, and the assailed orders are set aside, with the rules declared null and void.
 BOIE-TAKEDA vs. Dela Serma
This case involves the inclusion of commissions in calculating thirteenth-month pay, as prescribed by Presidential Decree No. 851 (P.D.
851), also known as the Thirteenth Month Pay Law. The dispute arises from whether the Revised Guidelines issued by then Labor
Secretary Franklin Drilon, which include commissions in the computation, align with P.D. 851. Petitioners argued that including
commissions exceeded the authority of P.D. 851, contending that commissions should be excluded as they are not part of basic salary.
Respondents defended the Guidelines, asserting they clarified a legal gray area and were based on a reasonable employee classification.
The court ruled in favor of the petitioners, declaring the provision of the Revised Guidelines null and void for violating P.D. 851. It
emphasized that administrative regulations must align with the law they implement. The ruling upheld that thirteenth-month pay should
solely derive from the employee's basic salary, excluding other remunerations or earnings beyond what's defined by P.D. 851 and its
regulations.

Whether or not the respondent labor officials committed “grave abuse of discretion amounting to lack of jurisdiction” by giving
effect to Section 5 of the Revised Guidelines on the implementation of the Thirteenth Month Pay (Presidential Decree No. 851)
promulgated by then Secretary of Labor and Employment (YES)

The court ruled that the respondent labor officials committed "grave abuse of discretion amounting to lack of jurisdiction" by giving
effect to Section 5 of the Revised Guidelines on the implementation of the Thirteenth Month Pay. This section of the Revised Guidelines
included commissions in the computation of the thirteenth-month pay, which the court found to be in violation of the Thirteenth Month
Pay Law (Presidential Decree No. 851). The court held that the inclusion of commissions expanded the concept of "basic salary" beyond
what was intended by the law. Consequently, the court declared Section 5 of the Revised Guidelines null and void. This ruling affirmed
the principle that thirteenth-month pay should be based solely on the employee's basic salary, excluding other remunerations or earnings
not part of the regular or basic salary as defined by the law and its implementing regulations.

CONTE vs. COA

Avelina B. Conte and Leticia Boiser-Palma, former employees of the Social Security System (SSS) who retired from government
service, availed themselves of compulsory retirement benefits under Republic Act No. 660. The SSS Resolution No. 56, approved
in 1971, aimed to incentivize SSS employees to choose retirement benefits under RA 660 (life annuity) rather than RA 1616
(gratuity). It offered "financial assistance" equivalent to the difference between what a retiree would receive under RA 1616 and
what they were entitled to under RA 660. This resolution aimed to ensure that retirement benefits provided a periodic income
close to the monthly income the retiree would have received during their remaining years of employment, aligning with the
Social Security Commission's policy to promote and protect the interests of SSS employees and emphasizing savings through life
annuities. However, a dispute arose when the petitioners claimed SSS "financial assistance" benefits under Resolution No. 56 in
addition to their compulsory retirement benefits under RA 660. The Commission on Audit (COA) denied their request for
reconsideration, disapproving their claims for financial assistance under SSS Resolution No. 56.

I: WON the public respondent abuse its discretion when it disallowed in audit petitioners' claims for benefits under SSS
Res. 562 (NO)
The public respondent did not abuse its discretion in denying petitioner's' claims for benefits under SSS Resolution No. 56. The
Supreme Court dismissed the petition for lack of merit, affirming the decision of the public respondent. The court declared
Resolution No. 56 illegal, void, and of no effect due to its contravention of statutory law. Since Resolution No. 56 was
invalidated, there was no basis for the public respondent to grant petitioners' claims under that resolution. Additionally, the court
emphasized that equity cannot be applied to validate Resolution No. 56, as it directly contradicts the provisions of RA 4968.
Therefore, the public respondent's decision to deny petitioners' claims was in line with the court's ruling on the invalidity of
Resolution No. 56.

CIR vs. CENTRAL LUZON DRUG CORP. (2006)

Central Luzon Drug Corporation, a domestic corporation specializing in retailing medicines and pharmaceutical products,
adhered to Republic Act No. 7432 by offering a 20% sales discount to eligible senior citizens on their medicine purchases
throughout 1996. The total sum granted as discounts during this period amounted to ₱904,769.00. However, when the
corporation filed its Annual Income Tax Return for the taxable year 1996 in April 1997, it reported net losses from its operations.
Subsequently, on January 16, 1998, Central Luzon Drug Corporation submitted a claim to the Commissioner of Internal Revenue,
seeking a tax refund or credit equivalent to the ₱904,769.00 granted as senior citizen discounts. Despite these efforts, the Court of
Tax Appeals (CTA) dismissed the corporation's petition on the grounds of lacking merit. The CTA stipulated that a tax refund or
credit could only be pursued if there was an actual collection and receipt of the tax amount by the government, a condition not
met in this instance.

Whether or not the CA erred in holding that respondent may claim the 20% sales discount as a tax credit instead of as a
deduction from gross income or gross sales (NO)

The court ruled that under RA 7432, private establishments are explicitly allowed to claim the amount of discounts they grant to
senior citizens as a tax credit, not merely as a deduction from gross income. The law's plain mandate, along with its implementing
regulations, clearly outlines the procedures for claiming this tax credit. The legislative intent behind RA 7432 was to provide a
straightforward tax credit to private establishments without requiring any cash outlay from the government . Additionally, since
RA 7432 is an earlier law not repealed by the Tax Code, its provision allowing for tax credits prevails over any conflicting
provisions or requirements in the Tax Code. Therefore, the court held that the denial of the tax credit to Central Luzon Drug
Corporation was indefensible in light of the clear provisions and intent of RA 7432.
 BIT-ONON vs. HON. FERNANDEZ and QUEJANO JR.
Joel Bito-Onon and Elegio Quejano Jr., both barangay leaders in Palawan, contested the Executive Vice-President position in the
Liga ng Barangay Provincial Chapter election. Bito-Onon won, but Quejano disputed the result before the Board of Election
Supervisors (BES), which ruled against him. Quejano appealed to the Regional Trial Court (RTC), prompting Bito-Onon to
challenge the RTC's jurisdiction, arguing that the Department of the Interior and Local Government's (DILG) circular allowing
RTC review was void. The RTC disagreed, citing the DILG Secretary's authority under the Administrative Code. Bito-Onon then
petitioned the Supreme Court to contest the RTC's decision.

WHETHER OR NOT THE QUESTIONED PROVISION IN MEMORANDUM CIRCULAR 97-193 WAS ISSUED BY
THE DILG SECRETARY IN EXCESS OF HIS AUTHORITY (YES)

WHETHER OR NOT THE RESPONDENT JUDGE COMMITTED GRAVE ABUSE OF DISCRETION IN ISSUING
THE QUESTIONED ORDERS.(YES)

The Supreme Court held that the Department of the Interior and Local Government (DILG) Secretary exceeded their authority by
issuing Memorandum Circular No. 97-193, which allowed the filing of a petition for review with regular courts regarding
decisions of the Board of Election Supervisors (BES) in barangay elections. This circular effectively amended the guidelines set
by the National Liga Board, a power beyond the DILG's scope of supervision. By doing so, the DILG Secretary exercised control
over the Liga, a function reserved for local governance. While the DILG has the power to issue regulations, its authority is
limited to monitoring compliance, not altering rules established by the Liga. Therefore, the court ruled in favor of greater
autonomy for local governments and invalidated the memorandum circular.

ABELLA vs. CSS

Francisco Abella, a retired lawyer from the Export Processing Zone Authority (EPZA), sought permanent employment at the
Subic Bay Metropolitan Authority (SBMA). However, his appointment as Department Manager III was disapproved by the Civil
Service Commission (CSC) due to concerns about his eligibility under a memorandum circular issued in 1994, which expanded
the coverage of the Career Executive Service (CES).Abella appealed the decision to the CSC, but his appeal was denied. He then
filed a motion for reconsideration, which was also denied. Despite his efforts, the Court of Appeals (CA) ruled that only the
appointing officer could request reconsideration of CSC decisions on appointments. As Abella was not the appointing officer, the
CA concluded that he lacked legal standing to challenge the decision. Therefore, the CA upheld the CSC's decision to disapprove
Abella's appointment based on procedural grounds.

WON the CA committed grave abuse of discretion amounting to lack of jurisdiction in ruling that petitioner lacks the
personality to question the disapproval by respondent office of petitioner's appointment as Department Manager III,
Labor and Employment Center, SBMA. (NO)

The approval of permanent appointments in the civil service is crucial to ensure that appointees meet the required qualifications.
The Civil Service Commission (CSC) has the authority to approve or disapprove appointments based on eligibility and
qualifications. In the discussed case, the petitioner's appointment to a Career Executive Service (CES) position required a Career
Service Executive Eligibility (CSEE), which he lacked. Despite holding another eligibility, it was deemed insufficient for the
CES position. Consequently, the CSC rightfully denied his permanent appointment. While the petitioner had the right to appeal,
he failed to demonstrate eligibility for the position, leading to the denial of his appeal. The Court of Appeals (CA) correctly ruled
that only the appointing officer could challenge the CSC's decision, based on established legal principles governing civil service
appointments. Therefore, the CA's decision was within its jurisdiction and aligned with legal standards.

FREEDOM FROM DEBT COALITION vs. ENERGY REGULATORY COMMISSION

MERALCO, seeking a rate increase, applied to the Energy Regulatory Commission (ERC) and requested
provisional authority to implement the hike, which ERC granted ex parte. Subsequently, the ERC scheduled a
hearing but did not revoke MERALCO's provisional approval. Without moving for reconsideration, petitioner FDC
filed a petition, alleging that the ERC's order lacked legal basis and that a provision in the Implementing Rules of
the Electric Power Industry Reform Act (EPIRA) was unconstitutional for delegating legislative power. FDC further
claimed that ERC acted with grave abuse of discretion and bias. The ERC defended its actions, asserting its
authority to issue provisional orders and arguing against any limitation on its powers as the successor to the Energy
Regulatory Board (ERB).

Whether the ERC has legal authority to grant provisional rate adjustments under Republic Act (R.A.) No.
9136, otherwise known as the "Electric Power Industry Reform Act of 2001" (EPIRA) - (YES)

The authority of the Energy Regulatory Commission (ERC) to grant provisional rate adjustments is firmly
established in Sections 44 and 80 of the Electric Power Industry Reform Act (EPIRA). Section 44 transfers the
powers and functions of the Energy Regulatory Board (ERB) to the ERC, including the power to approve
provisional rate adjustments. This transfer is not inconsistent with any provision of the EPIRA and complements the
ERC's existing powers under Section 43.
Section 80 reinforces Section 44 by ensuring the continued effectiveness of relevant provisions of laws like the
Public Service Act and Executive Order 172 (ERB Charter), which grant similar authority to approve provisional
rates. These provisions were not repealed or modified by the EPIRA, indicating a clear intent to transfer the power
to the ERC. The principal powers of the ERB concerning electric public utilities, such as regulating power rates and
approving provisional electric rates, are thus vested in the ERC under the EPIRA.

W/N the grant by ERC of the provisional rate adjustment was committed with grave abuse of discretion -
(YES)

Under the law, the Energy Regulatory Commission (ERC) has the authority to grant provisional rate adjustments
without conducting a prior hearing, but it is required to hold a hearing within 30 days of issuing the provisional
order to determine the propriety of the adjustment. However, the ERC must also ensure that the application for the
rate adjustment is published, not just a notice of hearing, and consider the comments of consumers and Local
Government Units (LGUs) before granting provisional authority. In this case, both the ERC and Meralco failed to
comply with these requirements. Meralco only published a notice of intent, not the actual application, and the ERC
approved the rate increase despite pending motions and without considering arguments from oppositors. As a result,
the court declared the ERC's order void for grave abuse of discretion.

SENATE OF THE PHILIPPINES vs. ERMITA

The Senate, through its committee, invited executive department officials and military personnel to a public hearing on
various issues, including the North Rail Project and wiretapping of the President. However, many officials were unable to
attend due to prior commitments. Subsequently, Executive Order No. 464 (EO 464) was issued by the President, requiring
heads of executive departments to secure her consent before appearing before Congress. This led to several officials
declining Senate invitations, citing EO 464.Senators argued that EO 464 undermined the Senate's investigative powers
and hindered its ability to fulfill legislative duties. Consequently, the Senate, along with several senators, challenged the
constitutionality of EO 464 through consolidated petitions for Certiorari and Prohibition. They contended that EO 464
violated multiple constitutional provisions, including those related to separation of powers, legislative inquiries, due
process, and transparency in government.

Whether or not Executive Order (EO) No. 464 contravenes the power of inquiry vested in Congress-YES

EO 464 restricts Congress's access to essential information by prohibiting executive officials from appearing before
Congress without the President's consent. This impedes Congress's power of inquiry, recognized in the Constitution,
which allows it to compel executive officials' attendance for legislative purposes. While exemptions exist under executive
privilege, EO 464's provisions hinder Congress's oversight function without requiring a valid claim of privilege. The
distinction between Sec. 21 (Inquiry in Aid of Legislation) and Sec. 22 (Question Hour) highlights Congress's authority to
compel attendance for legislative inquiries, with only the President and Supreme Court members exempt. Although
executive privilege is constitutional, EO 464 infringes upon Congress's legislative function and disrupts the constitutional
balance of powers.

PASEI vs. HON. TORRES

The Philippine Association of Service Exporters, Inc. (PASEI) filed a petition against the Secretary of the
Department of Labor and Employment (DOLE) and the Administrator of the Philippine Overseas Employment
Administration (POEA), challenging the execution and application of DOLE Department Order No. 16, issued in
1991, and POEA Memorandum Circulars Nos. 30 and 37 from the same year. These orders temporarily suspended
the recruitment by private employment agencies of Filipino domestic helpers for Hong Kong, transferring the task
of processing and deploying such workers to the DOLE through the POEA. The issuance of Department Order No.
16 followed reports of abuses suffered by Filipino housemaids employed in Hong Kong, prompting the DOLE to
take over the deployment of workers to Hong Kong through the POEA.
Whether or not respondents acted with grave abuse of discretion and/or in excess of rule-making authority in issuing said
circulars (NO)
Article 36 of the Labor Code empowers the Secretary of Labor to regulate recruitment and placement activities, granting
authority to issue orders and establish rules to achieve the code's objectives. The Philippine Overseas Employment
Administration (POEA), established through Executive Order No. 797 in 1982, inherited broad regulatory authority from
predecessor agencies. From the Bureau of Employment Services, it assumed responsibility for registering and licensing private
sector involvement in local and overseas recruitment. Furthermore, it acquired the mandate from the Overseas Employment
Development Board to recruit and place Filipino contract workers overseas under government-to-government arrangements.
Lastly, it absorbed functions from the National Seamen Board to regulate agents of shipping companies in hiring seamen for
overseas employment, ensuring favorable terms and compliance.
Whether or not the questioned circulars are a valid exercise of the Police power as delegated to the executive branch of
Government (YES)

Delegating quasi-legislative and quasi-judicial powers to administrative bodies is essential in managing society's complexity.
These bodies, equipped with specialized expertise, efficiently regulate various sectors. In the case discussed, the challenged
circulars pertain to the regulation of overseas employment recruitment, falling within administrative and policing powers. They
aim to curb violations, particularly excessive fees charged by private employment agencies, in the public interest. Justified under
the Constitution's general welfare clause, these measures are temporary and limited, serving a remedial purpose. Overall, the
circulars represent a valid exercise of police power by the executive branch to protect Filipino workers' interests and address
public concerns.
Whether or not the requirements of publication and filing with the Office of the National Administrative Register were not
complied with (YES)

The validity and enforceability of issued orders and circulars are called into question due to deficiencies in publication and filing,
as outlined by legal mandates. According to Article 2 of the Civil Code, laws must undergo proper publication in the Official
Gazette to become effective, ensuring public awareness and adherence. Similarly, Article 5 of the Labor Code emphasizes the
importance of disseminating implementing rules and regulations through newspapers, granting them legal force only after this
announcement. Moreover, Sections 3(1) and 4, Chapter 2, Book VII of the Administrative Code of 1987 establish a procedural
framework mandating agencies to file their rules with the University of the Philippines Law Center. Failure to comply within
three months renders such rules ineffective for sanctioning purposes. Adherence to these procedural requirements is vital to
ensure the legal standing of orders and circulars issued by government entities.

PNOC vs. CA
The case revolves around a compromise agreement between the Bureau of Internal Revenue (BIR), the Philippine
National Oil Company (PNOC), and the Philippine National Bank (PNB) regarding tax liabilities on PNOC's money
placements with PNB. The BIR accepted PNOC's offer to compromise its tax liability by paying 30% of the basic
tax due, which was in accordance with Executive Order (E.O.) No. 44. However, a private respondent, Savellano,
contested the legality of the compromise agreement, arguing that the tax liability should have been collected in full.
Despite receiving installments of an informer's reward from the BIR, Savellano demanded the payment of the
remaining balance. The Court of Tax Appeals (CTA) and the Court of Appeals (CA) both ruled in favor of
Savellano, declaring the compromise agreement void and directing the BIR to enforce the tax assessment against
PNB. The case was brought to the court via a petition challenging the CA's decision.

Whether the Court of Tax Appeals had jurisdiction to question the compromise agreement entered into by the
Commissioner of International Revenue. (YES)

The Court of Tax Appeals (CTA) had jurisdiction to question the compromise agreement between the Bureau of
Internal Revenue (BIR) and the Philippine National Oil Company (PNOC) due to allegations of grave abuse of
discretion and a whimsical exercise of jurisdiction by the BIR Commissioner. While administrative officers have
discretionary powers, these powers must be exercised within the parameters set by law.

The discretion granted to the BIR Commissioner to compromise tax liabilities is not absolute and can be subject to
judicial review if abused. Although compromises are generally favored, they can be rejected if they are contrary to law,
public policy, or morals. In this case, the compromise agreement between the BIR and PNOC lacked legal basis and was
contrary to public policy because it would have deprived the government of significant tax revenues. Despite arguments
of good faith, the demands of law and public policy must prevail, especially when significant tax revenues are at stake.
Therefore, compromises involving taxes may be subject to closer scrutiny by the courts due to their broader impact on the
nation.

Whether the CTA had no jurisdiction to review and set aside the compromise agreement(NO)

The court ruled in the negative regarding the jurisdiction of the Court of Tax Appeals (CTA) to question the compromise
agreement between the Bureau of Internal Revenue (BIR) and the Philippine National Oil Company (PNOC). While
acknowledging that administrative officers' discretionary functions are generally not interfered with by the courts, the
court emphasized that if such functions are tainted by a failure to abide by the law, it becomes the court's duty to
intervene. The court asserted that the BIR Commissioner's discretionary power to compromise taxes cannot override the
power of judicial review. Although the BIR Commissioner has authority to compromise taxes under certain
circumstances, this authority must be exercised within the parameters set by law. In this case, the court determined that
the compromise agreement did not qualify under the relevant statutes, and therefore, the BIR Commissioner's decision to
agree to the compromise should have been reviewed. Consequently, the court denied the petitions of PNOC and PNB.
 PERALTA vs. CSC
Petitioner was appointed Trade-Specialist II on 25 September 1989 in the Department of Trade and Industry (DTI).
His appointment was classified as "Reinstatement/Permanent". He received his initial salary, covering the period
from September to October 1989. Since he had no accumulated leave credits, DTI deducted from his salary the
amount corresponding to his absences during the covered period, inclusive of Saturdays and Sundays. Petitioner
sent a memorandum to the Chief General Administrative Service inquiring as to the law on salary deductions if the
employee has no leave credits and was advised that it will be without pay based on the Handbook of Information on
the Philippine Civil Service. Thus, petitioner sent a letter addressed to CSC Chairman Patricia Santo Tomas raising
the same question, as withholding (or deduction) of the same is tantamount to a deprivation of property without due
process of law. Respondent Commission promulgated Resolution No. 90- 497, which ruled that the action of the
DTI in deducting from the salary of petitioner (6 days) is in order.

Whether or not the policy that had been adopted and in force since 1965 is valid.(No)
It refers only to government employees who have earned leave credits against which their absences may be charged
with pay, as its letters speak only of leaves of absence with full pay. Under the present law, in computing these
periods of leaves, Saturday, Sunday and holidays are included in the computation so that if an employee should
become sick and absent himself on a Friday and then he reports for work on a Tuesday, in the computation of the
leave the Saturday and Sunday will be included, so that he will be considered as having had a leave of Friday,

Saturday, Sunday and Monday, or four days. R.A. 2625 specifically provides that government employees are
entitled to fifteen (15) days vacation leave of absence with full pay and fifteen (15) days sick leave with full pay,
exclusive of Saturdays, Sundays and Holidays in both cases.Thus, the law speaks of the granting of a right and
the law does not provide for a distinction between those who have accumulated leave credits and those who
have exhausted their leave credits in order to enjoy such right.

Whether the affected government employees, similarly situated as petitioner herein, allowed to claim their
deducted salaries. (YES)

Yes, it was acknowledged by the Supreme Court that it would cause quite a heavy financial burden on the national
and local governments considering the length of time that such policy has been effective. Administrative and
practical considerations must be taken into account if this ruling will have a strict retrospective application.

After CSC Memorandum Circular No. 16 Series of 1991 was promulgated on 26 April 1991, amending the herein
invalidated policy, deductions from salaries made after said date must
be restored to the government employees concerned.

CIR vs. MJ Lhuiller Pawnshop Inc.

In 1991, CIR Ong issued RMO No. 15-91, along with RMC No. 43-91, imposing a 5% lending investor’s tax on
pawnshops, considering them as lending investors subject to documentary stamp taxes under the Tax Code.
Respondent Lhuillier Pawnshop Inc. contested this, arguing that pawnshops are distinct from lending investors and
that RMO No. 15-91 was an unauthorized tax measure, implying an amendment to the Tax Code. Despite protests,
the BIR issued an assessment against Lhuillier, leading to a legal battle. CIR argued that the RMOs were valid
interpretations of the Tax Code, as pawnshops fit the legal definition of lending investors. However, the CTA
declared the RMOs void, leading to the cancellation of Lhuillier's assessments. This decision was upheld by the CA,
prompting the CIR to file a petition for review.
Are RMO No. 15-91 and RMC No. 43-91 valid, even without its publication?(NO)
RMO No. 15-91 and RMC No. 43-91 are deemed invalid due to the absence of publication. Administrative
issuances can either be legislative rules or interpretative rules, with legislative rules acting as subordinate legislation
implementing primary laws and interpretative rules providing guidelines for enforcing existing laws. While
interpretative rules can be applied upon issuance, legislative rules that significantly affect those governed require
prior notice and opportunity for affected parties to be heard. In this case, RMO No. 15-91 and RMC No. 43-91 were
not mere interpretative rules but rather amendatory provisions imposing a 5% percentage tax on pawnshops, thus
necessitating proper publication and consultation. Consequently, the petition is dismissed for lack of merit, and the
decision of the Court of Appeals affirming the invalidity of the disputed CIR issuances is upheld.
 HONASAN II vs. PANEL OF INVESTIGATING PROSECUTORS OF DOJ
On August 4, 2003, CIDG-PNP/P Director Edguardo Matillano took significant steps in addressing an affidavit-complaint
filed with the Department of Justice (DOJ) concerning a coup d'état allegedly involving military personnel occupying
Oakwood and Senator Gregorio “Gringo” Honasan, II. The complaint detailed a meeting on June 4, 2003, presided over
by Senator Honasan, where the use of force and armed struggle to achieve a vision known as the National Recovery
Agenda (NRA) was discussed. Major Perfecto Ragil corroborated this, citing Senator Honasan's alleged threats and the
formation of a junta to run a new government. On July 27, 2003, Captain Gerardo Gambala publicly announced the
rebels' withdrawal of support from the government, citing allegiance to Senator Honasan's NRA. Additionally, the
similarity between the letter "I" in rebel insignia and a blood compact wound mentioned in Major Ragil's statement raised
suspicion. Senator Honasan challenged the jurisdiction of the DOJ over the case, arguing that as the alleged acts were
related to his public office and involved public officials, jurisdiction should belong to the Office of the Ombudsman and
the Sandiganbayan. He filed motions and petitions against the DOJ's preliminary investigation, alleging grave abuse of
discretion.

Whether in regards to Ombudsman-DOJ Circular no. 95-001, the office of the Ombudsman should deputize the
prosecutors of the DOJ to conduct the preliminary investigation. (NO)
The distinction between Ombudsman cases lies in whether they fall under the jurisdiction of the Sandiganbayan or the
regular courts, with the authority to investigate differing from the authority to prosecute. The power to investigate such
cases may be exercised by various entities, including the Office of the Ombudsman, Provincial or City Prosecutors, or
their deputies.

While a circular suggests an internal agreement between the Ombudsman and the DOJ, various legal instruments such as the
Constitution, The Ombudsman Act of 1989, Administrative Order No. 8 of the Office of the Ombudsman, prevailing
jurisprudence, and the Revised Rules on Criminal Procedure recognize the concurrent jurisdiction of both the Ombudsman and
the DOJ to conduct preliminary investigations against public officials. The DOJ's authority to conduct such investigations stems
from its role as the principal law agency of the government, as stated in the Revised Administrative Code. Thus, the DOJ Panel
doesn't require authorization or deputization from the Ombudsman to conduct preliminary investigations. However, the
Ombudsman retains the right to assert its primary jurisdiction at any stage of the investigation process.
Whether the Ombudsman-DOJ Joint Circular no. 95-001 is ineffective on the ground that it was not published(NO)
The OMB-DOJ Joint Circulars no. 95-001 is an internal agreement between the Department of Justice (DOJ) and the Office of the
Ombudsman, outlining authority and responsibilities among their respective prosecutors regarding preliminary investigations.
However, according to legal precedents such as People vs. Que Po Lay (94 Phil. 640, 1954) and Taňada v. Tuvera (146 Scra 453,
1986), circulars and regulations that prescribe penalties for violations should be published before becoming effective.
Interpretative regulations and those internal in nature, affecting only administrative agency personnel and not the public, do not
require publication. Thus, the OMB-DOJ Joint Circulars no. 95-001, being internal and not regulating the conduct of the public,
need not be published.
Whether the Ombudsman has jurisdiction to conduct the preliminary investigation because the petitioner is a
public officer with salary grade 31 (Grade 27 or Higher) thereby falling within the jurisdiction of the Sandigan
Bayan. (NO)
Whether or not the offense is within exclusive jurisdiction or not will not resolve the present petition so as not to pre-empt the
result of the investigation conducted by the DOJ Panel.

Public Schools District Supervisors Association vs. De Jesus

The Public Schools District Supervisors Association (PSDSA) filed a petition for prohibition and mandamus against
the Department of Education (DepEd) and Department of Budget and Management (DBM) regarding certain
provisions of RA 9155, known as the "Governance of Basic Education Act 2001." The petition contests the DepEd's
issuance of Implementing Rules and Regulations (IRR), which retained the office of school district supervisors but
excluded their administrative supervision over schools within their districts. PSDSA argues that this action goes
against the letter and spirit of RA 9155. Additionally, the petition seeks to declare certain provisions related to the
responsibilities and salary grade level of district supervisors, as well as reporting requirements for donations and
grants received by them, as unconstitutional.
Whether or not the DepED secretary erred in removing the administrative supervision of the District
Supervisor over the Elementary and Secondary School (NO)
Section 7 of RA 9155 outlines the responsibilities of school district supervisors, which notably exclude
administrative supervision over school heads. While the implementing rules and regulations (IRR) cannot extend or
expand the coverage of the law, administrative bodies have the authority to fill in details within the broad policies
laid down by statutes. As a matter of policy, courts defer to administrative authorities' decisions due to their
presumed knowledge and expertise in enforcing laws. Congress's specific enumeration of a district supervisor's
duties implies an intention to restrict or limit their scope. Courts cannot interpret statutes to include situations not
provided for or intended by Congress, but must adhere to the statutory limitations as enumerated.
Whether the IRR for RA 9155 is a valid exercise of quasi legislative power of DepEd. (partly, yes)
Administrative supervision refers to the oversight or authority of an officer to ensure that subordinate officers fulfill their
duties. If the latter fails to do so, the former may take prescribed legal action to compel compliance. In statutory
construction, the principle of express mention dictates that when a statute explicitly mentions certain persons, things, acts,
or consequences, all others are excluded. Congress enumerated the duties of district supervisors in RA 9155, limiting their
responsibilities to those specified in Section 7(D) of the law. This limitation was a deliberate decision to align with the
law's objectives and ensure adherence to its thrust.
BRIEF BACKGROUND: The Department of Education (DepEd) historically centralized its management in its Manila
office, with schools at various levels implementing orders from the Education Secretary. Recognizing the need for change
due to evolving learning processes and technological advancements, a study was conducted to improve DepEd's
governance. Senator Tessie Aquino-Oreta proposed Senate Bill No. 2191 to shift focus to schools, emphasizing shared
governance and accountability for better learning outcomes. This bill evolved into RA 9155, the Governance of Basic
Education Act of 2001, which retained the office of the school district supervisor but limited their responsibilities. The
Public Schools District Supervisors Association (PSDSA) sought to restore supervisors' functions and upgrade their salary
grade level, requesting consultation with the DepEd Secretary. However, when the Secretary failed to respond, DECS
Office Order No. 1 was issued, implementing the rules and regulations of RA 9155. PSDSA filed a petition with the
Supreme Court, arguing that the law should align with existing educational laws. The Solicitor General countered, stating
that RA 9155 limited the district supervisor's responsibilities, with disciplinary authority lying with the Education
Secretary and regional directors.

FORT BONIFACIO DEVELOPMENT CORP. vs. CIR

In 1995, Fort Bonifacio Development Corporation (FBDC) acquired a large tract of land in Fort Bonifacio Global City from the
national government, exempt from VAT due to the sale predating the EVAT law. Upon the enactment of RA 7716, real estate
transactions became subject to VAT, rendering FBDC liable to remit output VAT and claim transitional input tax credits based on
its land inventory. FBDC's letters to the Commissioner of Internal Revenue (CIR) regarding presumptive input VAT on land
inventory were disallowed based on Revenue Regulation 7-95 (RR 7-95) and Revenue Memorandum Circular 3-96 (RMC 3-96).
FBDC argued that the definition of "goods" in RR 7-95 should include the real properties themselves, not just improvements.
After appeals to the Court of Tax Appeals (CTA) and the Court of Appeals, FBDC filed two petitions with the Supreme Court
(SC): G.R. No. 158885, seeking reversal of CTA decisions for transitional/presumptive input tax credits in the fourth quarter of
1996, and G.R. No. 170680, concerning similar credits for the third quarter of 1997.

Whether or not Section 105 of the Old NIRC may be interpreted in such a way as to restrict its application in
the case of real estate dealers only to the improvements on the real property belonging to their beginning
inventory, and not the entire real property itself. (NO)

Section 105 of the old NIRC doesn't explicitly prohibit including real properties, along with improvements, in the beginning
inventory for computing transitional input tax credits. Goods, in a business sense, refer to products offered for sale to the public.
For real estate dealers, their "goods" include the real properties themselves, as they're operating assets. Administrative regulations
can't contradict the law they're based on; agencies can't limit or extend statutes beyond their terms. The BIR's interpretation in
Revenue Regulations No. 7-95 was deemed inconsistent with the NIRC's definition of "goods." The Court stressed that
administrative rules must align with legal standards and not modify explicit provisions of the law.

PLANTERS PRODUCT INC. vs. FERTIPHIL CORPORATION

Petitioner and respondent are private corporations engaged in the importation and distribution of fertilizers,
pesticides, and agricultural chemicals. In 1985, then-President Ferdinand Marcos issued LOI No. 1465, imposing a
capital recovery component (CRC) on domestic fertilizer sales. Fertiphil, the petitioner, paid ₱10 per bag of
fertilizer to the Fertilizer and Pesticide Authority (FPA), totaling ₱6,689,144 from July 1985 to January 1986. After
the 1986 Edsa Revolution, FPA ceased the ₱10 levy. Fertiphil demanded a refund from the Philippine Phosphate
Inc. (PPI), but PPI refused. Fertiphil filed a complaint against FPA and PPI, questioning the constitutionality of LOI
No. 1465. The lower courts ruled in favor of Fertiphil, declaring the levy invalid for violating taxation principles.
The Court of Appeals affirmed the decision, leading Fertiphil to appeal to the Supreme Court.

Petitioner PPI argues that LOI No. 1465 is a valid exercise of either the police power or the power of taxation. It
contends that the LOI aimed to ensure the country's fertilizer supply and benefit a foundation established by law to
hold in trust for millions of farmers their stock ownership in PPI. On the other hand, Fertiphil argues that the LOI
is unconstitutional as it was enacted to benefit a private company. Fertiphil asserts that the levy was imposed to pay
PPI's corporate debt and, even if enacted under the police power, it fails to promote the general welfare or public
interest.

Whether or not LOI constitutes a valid legislation pursuant to 1.) The exercise of Taxation or 2. ) Police
Power for public purposes (NO)
 1) TAXATION POWER

The ₱10 levy imposed under LOI No. 1465 appears excessively burdensome for a mere regulatory purpose,
significantly increasing the cost of fertilizer by up to five percent for sellers and consumers alike. Moreover, the
language of the LOI suggests that the levy was primarily intended for revenue generation rather than serving a
public purpose. Specifically, the provision stated that the levy was imposed "until adequate capital is raised to make
PPI viable," indicating a focus on the financial viability of a private company rather than the welfare of the public.
Additionally, the direct remittance and deposit of the levies by the depositary bank of PPI, as well as the use of the
levy to pay PPI's corporate debts, further suggest that the imposition was designed to benefit the private company
rather than the public interest.

2) WHAT IF WE CONSIDER LOI NO. 1465 ENACTED UNDER THE POLICE POWER OF THE
STATE?
The validity of LOI No. 1695 is further called into question as it fails to meet the test of "lawful subjects" and
"lawful means" required for exercising governmental powers. The law did not serve the interest of the public at
large but instead provided undue advantage to a private corporation, which contradicts the principle that
governmental actions should benefit the general public. Moreover, the means employed by LOI No. 1695 were not
reasonably necessary for achieving any legitimate public purpose and were unduly oppressive upon individuals,
particularly farmers and consumers burdened by the excessive levy.

Therefore, in light of these deficiencies, the law is deemed invalid as it did not promote the public interest.
Consequently, the general rule applies that an unconstitutional law is void, rendering the doctrine of operative fact
inapplicable in this case.
3) APPLYING DOCTRINE OF OPERATIVE FACT (NO)
The doctrine of operative fact is an exception to the general rule that an unconstitutional law is void. It recognizes
that certain legal consequences may have occurred due to the existence of a statute before it was declared
unconstitutional, and these consequences cannot always be disregarded. However, the doctrine only applies as a
matter of equity and fair play. In this case, the Court finds the doctrine to be inapplicable. Allowing PPI to retain the
levies paid under LOI No. 1465, even if it is subsequently declared unconstitutional, would result in unjust
enrichment. Therefore, justice and equity demand that PPI refund the amounts paid by Fertiphil, as it would be
unfair for PPI to profit from an unconstitutional law.
NOTES:
Limitation Public Purpose An inherent limitation on the power of taxation is public purpose. Taxes are exacted only
for a public purpose. They cannot be used for purely private purposes or for the exclusive benefit of private persons.
Itis the heart of a tax law. Itis an elastic concept but when a tax law is only a mask to exact funds from the public
when its true intent is to give undue benefit and advantage to a private enterprise,thatlaw will not satisfy the
requirement of "public purpose. "

La Bugal B’Laan Tribal Association vs. Ramos, 421 SCRA 148

President Corazon C. Aquino's Executive Order No. 2796 in 1987 authorized the DENR Secretary to consider proposals
from foreign entities for mineral exploration contracts, followed by President Fidel V. Ramos' approval of Republic Act
No. 7942 in 1995, regulating mineral resource exploration and utilization. Before the enactment of R.A. No. 7942, an
FTAA was signed between the President and WMCP, covering extensive land areas. DENR Secretary Victor O. Ramos
subsequently issued Implementing Rules and Regulations through DAO No. 95-23, replaced by DAO No. 96-40,
prompting petitioners to challenge these actions as exceeding the DENR Secretary's jurisdiction. Petitioners sought court
intervention, aiming to halt FTAA processing, declare R.A. No. 7942 and its implementing rules unconstitutional, and
cancel the FTAA granted to Western Mining Philippines, Inc.

Whether or not Republic Act No. 7942 is unconstitutional (YES) [re: RA 7942]
The Philippine Mining Act of 1995 (RA 7942) is deemed unconstitutional due to its allowance of fully foreign-owned
corporations to exploit the country's natural resources. This contravenes Article XII Section 2 of the 1987 Constitution,
which upholds the Regalian Doctrine, asserting state ownership over all natural resources and placing their exploration
and utilization under state control. Notably, the 1987 Constitution does not authorize the granting of licenses or leases for
resource exploitation as previous charters did, prohibiting such actions. RA 7942's provision for Financial or Technical
Assistance Agreements (FTAA) is seen as an exception that must be strictly construed against non-Filipino participation
in resource utilization. Despite employing language suggesting limited involvement, the law's provisions effectively grant
foreign contractors beneficial ownership over mineral resources, infringing upon constitutional principles. Therefore,
foreign-owned corporations are restricted to providing technical or financial assistance, rather than assuming control over
mining operations, as outlined in the Constitution.