Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-6791

March 29, 1954

THE PEOPLE OF THE PHILIPPINES, plaintiffappellee,

vs.
QUE PO LAY, defendant-appellant.
Prudencio de Guzman for appellant.
First Assistant Solicitor General Ruperto Kapunan,
Jr., and Solicitor Lauro G. Marquez for appellee.
MONTEMAYOR, J.:
Que Po Lay is appealing from the decision of the
Court of First Instance of Manila, finding him guilty
of violating Central Bank Circular No. 20 in
connection with section 34 of Republic Act No. 265,
and sentencing him to suffer six months
imprisonment, to pay a fine of P1,000 with
subsidiary imprisonment in case of insolvency, and
to pay the costs.
The charge was that the appellant who was in
possession of foreign exchange consisting of U.S.
dollars, U.S. checks and U.S. money orders
amounting to about $7,000 failed to sell the same
to the Central Bank through its agents within one
day following the receipt of such foreign exchange
as required by Circular No. 20. the appeal is based
on the claim that said circular No. 20 was not
published in the Official Gazette prior to the act or
omission imputed to the appellant, and that
consequently, said circular had no force and effect.
It is contended that Commonwealth Act. No., 638
and Act 2930 both require said circular to be
published in the Official Gazette, it being an order
or notice of general applicability. The Solicitor
General answering this contention says that
Commonwealth Act. No. 638 and 2930 do not
require the publication in the Official Gazette of said
circular issued for the implementation of a law in
order to have force and effect.

We agree with the Solicitor General that the laws in

question do not require the publication of the
circulars, regulations and notices therein mentioned
in order to become binding and effective. All that
said two laws provide is that laws, resolutions,
decisions of the Supreme Court and Court of
Appeals, notices and documents required by law to
be of no force and effect. In other words, said two
Acts merely enumerate and make a list of what
should be published in the Official Gazette,
presumably, for the guidance of the different
branches of the Government issuing same, and of
the Bureau of Printing.
However, section 11 of the Revised Administrative
Code provides that statutes passed by Congress
shall, in the absence of special provision, take
effect at the beginning of the fifteenth day after the
completion of the publication of the statute in the
Official Gazette. Article 2 of the new Civil Code
(Republic Act No. 386) equally provides that laws
shall take effect after fifteen days following the
completion of their publication in the Official
Gazette, unless it is otherwise provided. It is true
that Circular No. 20 of the Central Bank is not a
statute or law but being issued for the
implementation of the law authorizing its issuance,
it has the force and effect of law according to
settled jurisprudence. (See U.S. vs. Tupasi Molina,
29 Phil., 119 and authorities cited therein.)
Moreover, as a rule, circulars and regulations
especially like the Circular No. 20 of the Central
Bank in question which prescribes a penalty for its
violation should be published before becoming
effective, this, on the general principle and theory
that before the public is bound by its contents,
especially its penal provisions, a law, regulation or
circular must first be published and the people
officially and specifically informed of said contents
and its penalties.
Our Old Civil code, ( Spanish Civil Code of 1889)
has a similar provision about the effectivity of laws,
(Article 1 thereof), namely, that laws shall be
binding twenty days after their promulgation, and
that their promulgation shall be understood as
made on the day of the termination of the
publication of the laws in the Gazette. Manresa,
commenting on this article is of the opinion that the

word "laws" include regulations and circulars issued

in accordance with the same. He says:
El Tribunal Supremo, ha interpretado el
articulo 1. del codigo Civil en Sentencia de
22 de Junio de 1910, en el sentido de que
bajo la denominacion generica de leyes, se
comprenden tambien los Reglamentos,
Reales decretos, Instrucciones, Circulares y
Reales ordenes dictadas de conformidad
con las mismas por el Gobierno en uso de
su potestad. Tambien el poder ejecutivo lo
ha venido entendiendo asi, como lo prueba
el hecho de que muchas de sus
disposiciones contienen la advertencia de
que empiezan a regir el mismo dia de su
publicacion en la Gaceta, advertencia que
seria perfectamente inutil si no fuera de
aplicacion al caso el articulo 1.o del Codigo
Civil. (Manresa, Codigo Civil Espaol, Vol. I.
p. 52).
In the present case, although circular No. 20 of the
Central Bank was issued in the year 1949, it was
not published until November 1951, that is, about 3
months after appellant's conviction of its violation. It
is clear that said circular, particularly its penal
provision, did not have any legal effect and bound
no one until its publication in the Official Gazzette
or after November 1951. In other words, appellant
could not be held liable for its violation, for it was
not binding at the time he was found to have failed
to sell the foreign exchange in his possession
thereof.
But the Solicitor General also contends that this
question of non-publication of the Circular is being
raised for the first time on appeal in this Court,
which cannot be done by appellant. Ordinarily, one
may raise on appeal any question of law or fact that
has been raised in the court below and which is
within the issues made by the parties in their
pleadings. (Section 19, Rule 48 of the Rules of
Court). But the question of non-publication is
fundamental and decisive. If as a matter of fact
Circular No. 20 had not been published as required
by law before its violation, then in the eyes of the
law there was no such circular to be violated and
consequently appellant committed no violation of

the circular or committed any offense, and the trial

court may be said to have had no jurisdiction. This
question may be raised at any stage of the
proceeding whether or not raised in the court
below.
In view of the foregoing, we reverse the decision
appealed from and acquit the appellant, with
costs de oficio.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-14283

November 29, 1960

GIL BALBUNA, ET AL., petitioners-appellants,

vs.
THE HON. SECRETARY OF EDUCATION, ET
AL., respondents-appellees.
K. V. Faylona and Juan B. Soliven for appellants.
Office of the Solicitor General Edilberto Barot and
Solicitor Ceferino Padua for appellees.
REYES, J.B.L., J.:
Appeal by members of the "Jehovah's Witnesses"
from a decision of the Court of First Instance of
Capiz, dated June 23, 1958, dismissing their
petition for prohibition and mandamus against the
Secretary of Education and the other respondents.
The action was brought to enjoin the enforcement
of Department Order No. 8, s. 1955, issued by the
Secretary of Education, promulgating rules and
regulations for the conduct of the compulsory flag
ceremony in all schools, as provided in Republic

Act No. 1265. Petitioners appellants assail the

validity of the above Department Order, for it
allegedly denies them freedom of worship and of
speech guaranteed by the Bill of Rights; that it
denies them due process of law and the equal
protection of the laws; and that it unduly restricts
their rights in the upbringing of their children. Since
the brief for the petitioners-appellants assails
Republic Act No. 1265 only as construed and
applied, the issue ultimately boils down the validity
of Department Order No. 8, s. 1955, which
promulgated the rules and regulations for the
implementation of the law.
This case, therefore, is on all fours with Gerona, et
al., vs. Secretary of Education, et al., 106 Phil., 2;
57 Off. Gaz., (5) 820, also involving Jehovah's
Witnesses, and assailing, on practically identical
grounds, the validity of the same Department Order
above-mentioned. This Court discerns no reasons
for changing its stand therein, where we said:
In conclusion, we find and hold that the
Filipino flag is not an image that requires
religious veneration; rather, it is a symbol of
the Republic of the Philippines, of
sovereignty, an emblem of freedom, liberty
and national unity; that the flag salute is not
a religious ceremony but an act and
profession of love and allegiance and
pledge of loyalty to the fatherland which the
flag stands for; that by the authority of the
Legislature of the Secretary of Education
was duly authorized to promulgate
Department Order No. 8, series of 1955;
that the requirement of observance of the
flag ceremony, or salute provided for in said
Department Order No. 8 does not violate
the Constitutional provisions about freedom
of religion and exercise of religion; that
compliance with the non-discriminatory and
reasonable rules and regulations and school
discipline, including observance of the flag
ceremony, is a prerequisite to attendance in
public schools; and that for failure and
refusal to participate in the flag ceremony,
petitioners were properly excluded and
dismissed from the public school they were
attending.

However, in their memorandum, petitionersappellants raise the new issue that that Department
Order No. 8 has no binding force and effect, not
having been published in the Official Gazette as
allegedly required by Commonwealth Act 638,
Article 2 of the New Civil Code, and Section 11 of
the Revised Administrative Code. We see no merit
in this contention. The assailed Department Order,
being addressed only to the Directors of Public and
Private Schools, and educational institutions under
their supervision, can not be said to be of general
application. Moreover, as observed in People vs.
QuePo Lay, 94 Phil., 640; 50 Off. Gaz., (10) 4850
(affirmed in Lim Hoa Ting vs. Central Bank, 104
Phil., 573; 55 Off. Gaz., [6] 1006),
the laws in question (Commonwealth Act
638 and Act 2930) do not require the
publication of the circulars, regulations or
notices therein mentioned in order to
become binding and effective. All that said
two laws provide is that laws, regulations,
decisions of the Supreme Court and Court
of Appeals, notices and documents required
by law to be published shall be published in
the Official Gazette but said two laws do not
say that unless so published they will be of
no force and effect. In other words, said two
acts merely enumerate and make a list of
what should be published in the Official
Gazette, presumably, for the guidance of
the different branches of the government
issuing the same, and of the Bureau of
Printing.
It is true, as held in the above cases, that pursuant
to Article 2 of the New Civil Code and Section 11 of
the Revised Administrative Code, statutes or laws
shall take effect fifteen days following the
completion of their publication in the Official
Gazette, unless otherwise provided. It is likewise
true that administrative rules and regulations,
issued to implement a law, have the force of law.
Nevertheless, the cases cited above involved
circulars of the Central Bank which provided for
penalties for violations thereof and that was the
primary factor that influenced the rationale of those
decisions. In the case at bar, Department Order No.
8 does not provide any penalty against those pupils

or students refusing to participate in the flag

ceremony or otherwise violating the provisions of
said order. Their expulsion was merely the
consequence of their failure to observe school
discipline which the school authorities are bound to
maintain. As observed in Gerona vs. Secretary of
Education, supra,
... for their failure or refusal to obey school
regulations about the flag salute, they were
not being prosecuted. Neither were they
being criminally prosecuted under threat of
penal sanction. If they choose not to obey
the flag salute regulation, they merely lost
the benefits of public education being
maintained at the expense of their fellow
citizens, nothing more. Having elected not
to comply with the regulations about the flag
salute, they forfeited their right to attend
public schools.
Finally, appellants contend that Republic Act No.
1265 is unconstitutional and void for being an
undue delegations of legislative power, "for its
failure to lay down any specific and definite
standard by which the Secretary of Education may
be guided in the preparation of those rules and
regulations which he has been authorized to
promulgate." With this view we again disagree.
Sections 1 and 2 of the Act read as follows:
Section 1. All educational institutions shall
henceforth, observed daily flag ceremony,
which shall be simple and dignified and
shall include the playing or singing of the
Philippine National Anthem.
Section 2. The Secretary of Education is
hereby authorized and directed to issue or
cause to be issued rules and regulations for
the proper conduct of the flag ceremony
herein provide.
In our opinion, the requirements above-quoted
constitute an adequate standard, to wit, simplicity
and dignity of the flag ceremony and the singing of
the National Anthem specially when contrasted
with other standards heretofore upheld by the
Courts: "public interest"(People vs. Rosenthal, 68

Phil. 328); "public welfare" (Municipality of Cardona

vs. Binangonan, 36 Phil. 547); Interest of law and
order"(Rubi vs. Provincial Board, 39 Phil., 669;
justice and equity and the substantial merits of the
case" (Int. Hardwood vs. Pagil Federation of
Labor, 70 Phil. 602); or "adequate and efficient
instruction" (P.A.C.U. vs. Secretary of Education, 97
Phil., 806; 51 Off. Gaz., 6230). That the Legislature
did not specify the details of the flag ceremony is
no objection to the validity of the statute, for all that
is required of it is the laying down of standards and
policy that will limit the discretion of the regulatory
agency. To require the statute to establish in detail
the manner of exercise of the delegated power
would be to destroy the administrative flexibility that
the delegation is intended to achieve.
Wherefore, the decision appealed from is affirmed.
Costs against petitioner-appellants.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-63915 April 24, 1985
LORENZO M. TAADA, ABRAHAM F.
SARMIENTO, and MOVEMENT OF ATTORNEYS
FOR BROTHERHOOD, INTEGRITY AND
NATIONALISM, INC. [MABINI], petitioners,
vs.
HON. JUAN C. TUVERA, in his capacity as
Executive Assistant to the President, HON.
JOAQUIN VENUS, in his capacity as Deputy
Executive Assistant to the President ,
MELQUIADES P. DE LA CRUZ, in his capacity as
Director, Malacaang Records Office, and
FLORENDO S. PABLO, in his capacity as
Director, Bureau of Printing, respondents.
ESCOLIN, J.:
Invoking the people's right to be informed on
matters of public concern, a right recognized in
Section 6, Article IV of the 1973 Philippine
Constitution, 1 as well as the principle that laws to

be valid and enforceable must be published in the

Official Gazette or otherwise effectively
promulgated, petitioners seek a writ of mandamus
to compel respondent public officials to publish,
and/or cause the publication in the Official Gazette
of various presidential decrees, letters of
instructions, general orders, proclamations,
executive orders, letter of implementation and
administrative orders.
Specifically, the publication of the following
presidential issuances is sought:
a] Presidential Decrees Nos. 12, 22,
37, 38, 59, 64, 103, 171, 179, 184,
197, 200, 234, 265, 286, 298, 303,
312, 324, 325, 326, 337, 355, 358,
359, 360, 361, 368, 404, 406, 415,
427, 429, 445, 447, 473, 486, 491,
503, 504, 521, 528, 551, 566, 573,
574, 594, 599, 644, 658, 661, 718,
731, 733, 793, 800, 802, 835, 836,
923, 935, 961, 1017-1030, 1050,
1060-1061, 1085, 1143, 1165, 1166,
1242, 1246, 1250, 1278, 1279,
1300, 1644, 1772, 1808, 1810,
1813-1817, 1819-1826, 1829-1840,
1842-1847.
b] Letter of Instructions Nos.: 10, 39,
49, 72, 107, 108, 116, 130, 136, 141,
150, 153, 155, 161, 173, 180, 187,
188, 192, 193, 199, 202, 204, 205,
209, 211-213, 215-224, 226-228,
231-239, 241-245, 248, 251, 253261, 263-269, 271-273, 275-283,
285-289, 291, 293, 297-299, 301303, 309, 312-315, 325, 327, 343,
346, 349, 357, 358, 362, 367, 370,
382, 385, 386, 396-397, 405, 438440, 444- 445, 473, 486, 488, 498,
501, 399, 527, 561, 576, 587, 594,
599, 600, 602, 609, 610, 611, 612,
615, 641, 642, 665, 702, 712-713,
726, 837-839, 878-879, 881, 882,
939-940, 964,997,1149-1178,11801278.

c] General Orders Nos.: 14, 52, 58,

59, 60, 62, 63, 64 & 65.
d] Proclamation Nos.: 1126, 1144,
1147, 1151, 1196, 1270, 1281, 13191526, 1529, 1532, 1535, 1538,
1540-1547, 1550-1558, 1561-1588,
1590-1595, 1594-1600, 1606-1609,
1612-1628, 1630-1649, 1694-1695,
1697-1701, 1705-1723, 1731-1734,
1737-1742, 1744, 1746-1751, 1752,
1754, 1762, 1764-1787, 1789-1795,
1797, 1800, 1802-1804, 1806-1807,
1812-1814, 1816, 1825-1826, 1829,
1831-1832, 1835-1836, 1839-1840,
1843-1844, 1846-1847, 1849, 18531858, 1860, 1866, 1868, 1870,
1876-1889, 1892, 1900, 1918, 1923,
1933, 1952, 1963, 1965-1966, 19681984, 1986-2028, 2030-2044, 20462145, 2147-2161, 2163-2244.
e] Executive Orders Nos.: 411, 413,
414, 427, 429-454, 457- 471, 474492, 494-507, 509-510, 522, 524528, 531-532, 536, 538, 543-544,
549, 551-553, 560, 563, 567-568,
570, 574, 593, 594, 598-604, 609,
611- 647, 649-677, 679-703, 705707, 712-786, 788-852, 854-857.
f] Letters of Implementation Nos.: 7,
8, 9, 10, 11-22, 25-27, 39, 50, 51,
59, 76, 80-81, 92, 94, 95, 107, 120,
122, 123.
g] Administrative Orders Nos.: 347,
348, 352-354, 360- 378, 380-433,
436-439.
The respondents, through the Solicitor General,
would have this case dismissed outright on the
ground that petitioners have no legal personality or
standing to bring the instant petition. The view is
submitted that in the absence of any showing that
petitioners are personally and directly affected or
prejudiced by the alleged non-publication of the
presidential issuances in question 2 said petitioners
are without the requisite legal personality to

institute this mandamus proceeding, they are not

being "aggrieved parties" within the meaning of
Section 3, Rule 65 of the Rules of Court, which we
quote:
SEC. 3. Petition for Mandamus.
When any tribunal, corporation,
board or person unlawfully neglects
the performance of an act which the
law specifically enjoins as a duty
resulting from an office, trust, or
station, or unlawfully excludes
another from the use a rd enjoyment
of a right or office to which such
other is entitled, and there is no
other plain, speedy and adequate
remedy in the ordinary course of law,
the person aggrieved thereby may
file a verified petition in the proper
court alleging the facts with certainty
and praying that judgment be
rendered commanding the
defendant, immediately or at some
other specified time, to do the act
required to be done to Protect the
rights of the petitioner, and to pay
the damages sustained by the
petitioner by reason of the wrongful
acts of the defendant.
Upon the other hand, petitioners maintain that since
the subject of the petition concerns a public right
and its object is to compel the performance of a
public duty, they need not show any specific
interest for their petition to be given due course.
The issue posed is not one of first impression. As
early as the 1910 case of Severino vs. Governor
General, 3 this Court held that while the general rule
is that "a writ of mandamus would be granted to a
private individual only in those cases where he has
some private or particular interest to be subserved,
or some particular right to be protected,
independent of that which he holds with the public
at large," and "it is for the public officers exclusively
to apply for the writ when public rights are to be
subserved [Mithchell vs. Boardmen, 79 M.e., 469],"
nevertheless, "when the question is one of public
right and the object of the mandamus is to procure

the enforcement of a public duty, the people are

regarded as the real party in interest and the relator
at whose instigation the proceedings are instituted
need not show that he has any legal or special
interest in the result, it being sufficient to show that
he is a citizen and as such interested in the
execution of the laws [High, Extraordinary Legal
Remedies, 3rd ed., sec. 431].
Thus, in said case, this Court recognized the relator
Lope Severino, a private individual, as a proper
party to the mandamus proceedings brought to
compel the Governor General to call a special
election for the position of municipal president in
the town of Silay, Negros Occidental. Speaking for
this Court, Mr. Justice Grant T. Trent said:
We are therefore of the opinion that
the weight of authority supports the
proposition that the relator is a
proper party to proceedings of this
character when a public right is
sought to be enforced. If the general
rule in America were otherwise, we
think that it would not be applicable
to the case at bar for the reason 'that
it is always dangerous to apply a
general rule to a particular case
without keeping in mind the reason
for the rule, because, if under the
particular circumstances the reason
for the rule does not exist, the rule
itself is not applicable and reliance
upon the rule may well lead to error'
No reason exists in the case at bar
for applying the general rule insisted
upon by counsel for the respondent.
The circumstances which surround
this case are different from those in
the United States, inasmuch as if the
relator is not a proper party to these
proceedings no other person could
be, as we have seen that it is not the
duty of the law officer of the
Government to appear and
represent the people in cases of this
character.

The reasons given by the Court in recognizing a

private citizen's legal personality in the
aforementioned case apply squarely to the present
petition. Clearly, the right sought to be enforced by
petitioners herein is a public right recognized by no
less than the fundamental law of the land. If
petitioners were not allowed to institute this
proceeding, it would indeed be difficult to conceive
of any other person to initiate the same,
considering that the Solicitor General, the
government officer generally empowered to
represent the people, has entered his appearance
for respondents in this case.
Respondents further contend that publication in the
Official Gazette is not a sine qua non requirement
for the effectivity of laws where the laws
themselves provide for their own effectivity dates. It
is thus submitted that since the presidential
issuances in question contain special provisions as
to the date they are to take effect, publication in the
Official Gazette is not indispensable for their
effectivity. The point stressed is anchored on Article
2 of the Civil Code:
Art. 2. Laws shall take effect after
fifteen days following the completion
of their publication in the Official
Gazette, unless it is otherwise
provided, ...
The interpretation given by respondent is in accord
with this Court's construction of said article. In a
long line of decisions, 4 this Court has ruled that
publication in the Official Gazette is necessary in
those cases where the legislation itself does not
provide for its effectivity date-for then the date of
publication is material for determining its date of
effectivity, which is the fifteenth day following its
publication-but not when the law itself provides for
the date when it goes into effect.
Respondents' argument, however, is logically
correct only insofar as it equates the effectivity of
laws with the fact of publication. Considered in the
light of other statutes applicable to the issue at
hand, the conclusion is easily reached that said
Article 2 does not preclude the requirement of
publication in the Official Gazette, even if the law

itself provides for the date of its effectivity. Thus,

Section 1 of Commonwealth Act 638 provides as
follows:
Section 1. There shall be published
in the Official Gazette [1] all
important legisiative acts and
resolutions of a public nature of the,
Congress of the Philippines; [2] all
executive and administrative orders
and proclamations, except such as
have no general applicability; [3]
decisions or abstracts of decisions of
the Supreme Court and the Court of
Appeals as may be deemed by said
courts of sufficient importance to be
so published; [4] such documents or
classes of documents as may be
required so to be published by law;
and [5] such documents or classes
of documents as the President of the
Philippines shall determine from time
to time to have general applicability
and legal effect, or which he may
authorize so to be published. ...
The clear object of the above-quoted provision is to
give the general public adequate notice of the
various laws which are to regulate their actions and
conduct as citizens. Without such notice and
publication, there would be no basis for the
application of the maxim "ignorantia legis non
excusat." It would be the height of injustice to
punish or otherwise burden a citizen for the
transgression of a law of which he had no notice
whatsoever, not even a constructive one.
Perhaps at no time since the establishment of the
Philippine Republic has the publication of laws
taken so vital significance that at this time when the
people have bestowed upon the President a power
heretofore enjoyed solely by the legislature. While
the people are kept abreast by the mass media of
the debates and deliberations in the Batasan
Pambansaand for the diligent ones, ready access
to the legislative recordsno such publicity
accompanies the law-making process of the
President. Thus, without publication, the people
have no means of knowing what presidential

decrees have actually been promulgated, much

less a definite way of informing themselves of the
specific contents and texts of such decrees. As the
Supreme Court of Spain ruled: "Bajo la
denominacion generica de leyes, se comprenden
tambien los reglamentos, Reales decretos,
Instrucciones, Circulares y Reales ordines dictadas
de conformidad con las mismas por el Gobierno en
uso de su potestad. 5
The very first clause of Section I of Commonwealth
Act 638 reads: "There shall be published in the
Official Gazette ... ." The word "shall" used therein
imposes upon respondent officials an imperative
duty. That duty must be enforced if the
Constitutional right of the people to be informed on
matters of public concern is to be given substance
and reality. The law itself makes a list of what
should be published in the Official Gazette. Such
listing, to our mind, leaves respondents with no
discretion whatsoever as to what must be included
or excluded from such publication.
The publication of all presidential issuances "of a
public nature" or "of general applicability" is
mandated by law. Obviously, presidential decrees
that provide for fines, forfeitures or penalties for
their violation or otherwise impose a burden or. the
people, such as tax and revenue measures, fall
within this category. Other presidential issuances
which apply only to particular persons or class of
persons such as administrative and executive
orders need not be published on the assumption
that they have been circularized to all concerned. 6
It is needless to add that the publication of
presidential issuances "of a public nature" or "of
general applicability" is a requirement of due
process. It is a rule of law that before a person may
be bound by law, he must first be officially and
specifically informed of its contents. As Justice
Claudio Teehankee said in Peralta vs. COMELEC 7:
In a time of proliferating decrees,
orders and letters of instructions
which all form part of the law of the
land, the requirement of due process
and the Rule of Law demand that
the Official Gazette as the official

government repository promulgate

and publish the texts of all such
decrees, orders and instructions so
that the people may know where to
obtain their official and specific
contents.
The Court therefore declares that presidential
issuances of general application, which have not
been published, shall have no force and effect.
Some members of the Court, quite apprehensive
about the possible unsettling effect this decision
might have on acts done in reliance of the validity
of those presidential decrees which were published
only during the pendency of this petition, have put
the question as to whether the Court's declaration
of invalidity apply to P.D.s which had been enforced
or implemented prior to their publication. The
answer is all too familiar. In similar situations in the
past this Court had taken the pragmatic and
realistic course set forth in Chicot County Drainage
District vs. Baxter Bank 8 to wit:
The courts below have proceeded
on the theory that the Act of
Congress, having been found to be
unconstitutional, was not a law; that
it was inoperative, conferring no
rights and imposing no duties, and
hence affording no basis for the
challenged decree. Norton v. Shelby
County, 118 U.S. 425, 442; Chicago,
1. & L. Ry. Co. v. Hackett, 228 U.S.
559, 566. It is quite clear, however,
that such broad statements as to the
effect of a determination of
unconstitutionality must be taken
with qualifications. The actual
existence of a statute, prior to such a
determination, is an operative fact
and may have consequences which
cannot justly be ignored. The past
cannot always be erased by a new
judicial declaration. The effect of the
subsequent ruling as to invalidity
may have to be considered in
various aspects-with respect to
particular conduct, private and
official. Questions of rights claimed

to have become vested, of status, of

prior determinations deemed to have
finality and acted upon accordingly,
of public policy in the light of the
nature both of the statute and of its
previous application, demand
examination. These questions are
among the most difficult of those
which have engaged the attention of
courts, state and federal and it is
manifest from numerous decisions
that an all-inclusive statement of a
principle of absolute retroactive
invalidity cannot be justified.
Consistently with the above principle, this Court
in Rutter vs. Esteban 9 sustained the right of a party
under the Moratorium Law, albeit said right had
accrued in his favor before said law was declared
unconstitutional by this Court.
Similarly, the implementation/enforcement of
presidential decrees prior to their publication in the
Official Gazette is "an operative fact which may
have consequences which cannot be justly ignored.
The past cannot always be erased by a new judicial
declaration ... that an all-inclusive statement of a
principle of absolute retroactive invalidity cannot be
justified."
From the report submitted to the Court by the Clerk
of Court, it appears that of the presidential decrees
sought by petitioners to be published in the Official
Gazette, only Presidential Decrees Nos. 1019 to
1030, inclusive, 1278, and 1937 to 1939, inclusive,
have not been so published. 10 Neither the subject
matters nor the texts of these PDs can be
ascertained since no copies thereof are available.
But whatever their subject matter may be, it is
undisputed that none of these unpublished PDs has
ever been implemented or enforced by the
government. In Pesigan vs. Angeles, 11 the Court,
through Justice Ramon Aquino, ruled that
"publication is necessary to apprise the public of
the contents of [penal] regulations and make the
said penalties binding on the persons affected
thereby. " The cogency of this holding is apparently
recognized by respondent officials considering the
manifestation in their comment that "the

government, as a matter of policy, refrains from

prosecuting violations of criminal laws until the
same shall have been published in the Official
Gazette or in some other publication, even though
some criminal laws provide that they shall take
effect immediately.
WHEREFORE, the Court hereby orders
respondents to publish in the Official Gazette all
unpublished presidential issuances which are of
general application, and unless so published, they
shall have no binding force and effect.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
G.R. No. L-63915 December 29, 1986
LORENZO M. TA;ADA, ABRAHAM F.
SARMIENTO, and MOVEMENT OF ATTORNEYS
FOR BROTHERHOOD, INTEGRITY AND
NATIONALISM, INC. (MABINI), petitioners,
vs.
HON. JUAN C. TUVERA, in his capacity as
Executive Assistant to the President, HON.
JOAQUIN VENUS, in his capacity as Deputy
Executive Assistant to the President,
MELQUIADES P. DE LA CRUZ, ETC., ET
AL.,respondents.
RESOLUTION

CRUZ, J.:
Due process was invoked by the petitioners in
demanding the disclosure of a number of
presidential decrees which they claimed had not
been published as required by law. The
government argued that while publication was
necessary as a rule, it was not so when it was
"otherwise provided," as when the decrees
themselves declared that they were to become
effective immediately upon their approval. In the
decision of this case on April 24, 1985, the Court
affirmed the necessity for the publication of some of

these decrees, declaring in the dispositive portion

as follows:
WHEREFORE, the Court hereby orders
respondents to publish in the Official
Gazette all unpublished presidential
issuances which are of general application,
and unless so published, they shall have no
binding force and effect.
The petitioners are now before us again, this time
to move for reconsideration/clarification of that
decision. 1Specifically, they ask the following
questions:
1. What is meant by "law of public nature" or
"general applicability"?
2. Must a distinction be made between laws of
general applicability and laws which are not?
3. What is meant by "publication"?
4. Where is the publication to be made?
5. When is the publication to be made?
Resolving their own doubts, the petitioners suggest
that there should be no distinction between laws of
general applicability and those which are not; that
publication means complete publication; and that
the publication must be made forthwith in the
Official Gazette. 2
In the Comment 3 required of the then Solicitor
General, he claimed first that the motion was a
request for an advisory opinion and should
therefore be dismissed, and, on the merits, that the
clause "unless it is otherwise provided" in Article 2
of the Civil Code meant that the publication
required therein was not always imperative; that
publication, when necessary, did not have to be
made in the Official Gazette; and that in any case
the subject decision was concurred in only by three
justices and consequently not binding. This elicited
a Reply 4 refuting these arguments. Came next the
February Revolution and the Court required the
new Solicitor General to file a Rejoinder in view of
the supervening events, under Rule 3, Section 18,
of the Rules of Court. Responding, he submitted

that issuances intended only for the internal

administration of a government agency or for
particular persons did not have to be 'Published;
that publication when necessary must be in full and
in the Official Gazette; and that, however, the
decision under reconsideration was not binding
because it was not supported by eight members of
this Court. 5
The subject of contention is Article 2 of the Civil
Code providing as follows:
ART. 2. Laws shall take effect after fifteen
days following the completion of their
publication in the Official Gazette, unless it
is otherwise provided. This Code shall take
effect one year after such publication.
After a careful study of this provision and of the
arguments of the parties, both on the original
petition and on the instant motion, we have come to
the conclusion and so hold, that the clause "unless
it is otherwise provided" refers to the date of
effectivity and not to the requirement of publication
itself, which cannot in any event be omitted. This
clause does not mean that the legislature may
make the law effective immediately upon approval,
or on any other date, without its previous
publication.
Publication is indispensable in every case, but the
legislature may in its discretion provide that the
usual fifteen-day period shall be shortened or
extended. An example, as pointed out by the
present Chief Justice in his separate concurrence
in the original decision, 6 is the Civil Code which did
not become effective after fifteen days from its
publication in the Official Gazette but "one year
after such publication." The general rule did not
apply because it was "otherwise provided. "
It is not correct to say that under the disputed
clause publication may be dispensed with
altogether. The reason. is that such omission would
offend due process insofar as it would deny the
public knowledge of the laws that are supposed to
govern the legislature could validly provide that a
law e effective immediately upon its approval
notwithstanding the lack of publication (or after an

unreasonably short period after publication), it is

not unlikely that persons not aware of it would be
prejudiced as a result and they would be so not
because of a failure to comply with but simply
because they did not know of its existence,
Significantly, this is not true only of penal laws as is
commonly supposed. One can think of many nonpenal measures, like a law on prescription, which
must also be communicated to the persons they
may affect before they can begin to operate.
We note at this point the conclusive presumption
that every person knows the law, which of course
presupposes that the law has been published if the
presumption is to have any legal justification at all.
It is no less important to remember that Section 6 of
the Bill of Rights recognizes "the right of the people
to information on matters of public concern," and
this certainly applies to, among others, and indeed
especially, the legislative enactments of the
government.
The term "laws" should refer to all laws and not
only to those of general application, for strictly
speaking all laws relate to the people in general
albeit there are some that do not apply to them
directly. An example is a law granting citizenship to
a particular individual, like a relative of President
Marcos who was decreed instant naturalization. It
surely cannot be said that such a law does not
affect the public although it unquestionably does
not apply directly to all the people. The subject of
such law is a matter of public interest which any
member of the body politic may question in the
political forums or, if he is a proper party, even in
the courts of justice. In fact, a law without any
bearing on the public would be invalid as an
intrusion of privacy or as class legislation or as
anultra vires act of the legislature. To be valid, the
law must invariably affect the public interest even if
it might be directly applicable only to one individual,
or some of the people only, and t to the public as a
whole.
We hold therefore that all statutes, including those
of local application and private laws, shall be
published as a condition for their effectivity, which
shall begin fifteen days after publication unless a
different effectivity date is fixed by the legislature.

Covered by this rule are presidential decrees and

executive orders promulgated by the President in
the exercise of legislative powers whenever the
same are validly delegated by the legislature or, at
present, directly conferred by the Constitution.
administrative rules and regulations must a also be
published if their purpose is to enforce or
implement existing law pursuant also to a valid
delegation.
Interpretative regulations and those merely internal
in nature, that is, regulating only the personnel of
the administrative agency and not the public, need
not be published. Neither is publication required of
the so-called letters of instructions issued by
administrative superiors concerning the rules or
guidelines to be followed by their subordinates in
the performance of their duties.
Accordingly, even the charter of a city must be
published notwithstanding that it applies to only a
portion of the national territory and directly affects
only the inhabitants of that place. All presidential
decrees must be published, including even, say,
those naming a public place after a favored
individual or exempting him from certain
prohibitions or requirements. The circulars issued
by the Monetary Board must be published if they
are meant not merely to interpret but to "fill in the
details" of the Central Bank Act which that body is
supposed to enforce.
However, no publication is required of the
instructions issued by, say, the Minister of Social
Welfare on the case studies to be made in petitions
for adoption or the rules laid down by the head of a
government agency on the assignments or
workload of his personnel or the wearing of office
uniforms. Parenthetically, municipal ordinances are
not covered by this rule but by the Local
Government Code.
We agree that publication must be in full or it is no
publication at all since its purpose is to inform the
public of the contents of the laws. As correctly
pointed out by the petitioners, the mere mention of
the number of the presidential decree, the title of
such decree, its whereabouts (e.g., "with Secretary
Tuvera"), the supposed date of effectivity, and in a

mere supplement of the Official Gazette cannot

satisfy the publication requirement. This is not even
substantial compliance. This was the manner,
incidentally, in which the General Appropriations Act
for FY 1975, a presidential decree undeniably of
general applicability and interest, was "published"
by the Marcos administration. 7 The evident
purpose was to withhold rather than disclose
information on this vital law.
Coming now to the original decision, it is true that
only four justices were categorically for publication
in the Official Gazette 8 and that six others felt that
publication could be made elsewhere as long as
the people were sufficiently informed. 9 One
reserved his vote 10 and another merely
acknowledged the need for due publication without
indicating where it should be made. 11 It is therefore
necessary for the present membership of this Court
to arrive at a clear consensus on this matter and to
lay down a binding decision supported by the
necessary vote.
There is much to be said of the view that the
publication need not be made in the Official
Gazette, considering its erratic releases and limited
readership. Undoubtedly, newspapers of general
circulation could better perform the function of
communicating, the laws to the people as such
periodicals are more easily available, have a wider
readership, and come out regularly. The trouble,
though, is that this kind of publication is not the one
required or authorized by existing law. As far as we
know, no amendment has been made of Article 2 of
the Civil Code. The Solicitor General has not
pointed to such a law, and we have no information
that it exists. If it does, it obviously has not yet been
published.
At any rate, this Court is not called upon to rule
upon the wisdom of a law or to repeal or modify it if
we find it impractical. That is not our function. That
function belongs to the legislature. Our task is
merely to interpret and apply the law as conceived
and approved by the political departments of the
government in accordance with the prescribed
procedure. Consequently, we have no choice but to
pronounce that under Article 2 of the Civil Code, the
publication of laws must be made in the Official

Gazett and not elsewhere, as a requirement for

their effectivity after fifteen days from such
publication or after a different period provided by
the legislature.
We also hold that the publication must be made
forthwith or at least as soon as possible, to give
effect to the law pursuant to the said Article 2.
There is that possibility, of course, although not
suggested by the parties that a law could be
rendered unenforceable by a mere refusal of the
executive, for whatever reason, to cause its
publication as required. This is a matter, however,
that we do not need to examine at this time.
Finally, the claim of the former Solicitor General
that the instant motion is a request for an advisory
opinion is untenable, to say the least, and deserves
no further comment.
The days of the secret laws and the unpublished
decrees are over. This is once again an open
society, with all the acts of the government subject
to public scrutiny and available always to public
cognizance. This has to be so if our country is to
remain democratic, with sovereignty residing in the
people and all government authority emanating
from them.
Although they have delegated the power of
legislation, they retain the authority to review the
work of their delegates and to ratify or reject it
according to their lights, through their freedom of
expression and their right of suffrage. This they
cannot do if the acts of the legislature are
concealed.
Laws must come out in the open in the clear light of
the sun instead of skulking in the shadows with
their dark, deep secrets. Mysterious
pronouncements and rumored rules cannot be
recognized as binding unless their existence and
contents are confirmed by a valid publication
intended to make full disclosure and give proper
notice to the people. The furtive law is like a
scabbarded saber that cannot feint parry or cut
unless the naked blade is drawn.

WHEREFORE, it is hereby declared that all laws as

above defined shall immediately upon their
approval, or as soon thereafter as possible, be
published in full in the Official Gazette, to become
effective only after fifteen days from their
publication, or on another date specified by the
legislature, in accordance with Article 2 of the Civil
Code.
SO ORDERED.

It appears that after personally attending the initial

NAC meetings, the three ex officio members turned
over said responsibility to their representatives who
were paid honoraria beginning December 12, 1994.
However, on October 15, 1997, NAC resident
auditor Eulalia disallowed on audit the payment
of honoraria to these representatives amounting
to P255,750 for the period December 12, 1994 to
June 27, 1997, pursuant to COA Memorandum No.
97-038. On September 1, 1998, the NGAO upheld
the auditor's order and notices of disallowance
were subsequently issued to the following:7
REPRESENTATIVES

AMOUNT

Republic of the Philippines

SUPREME COURT
Manila

1. Cesar Averilla
Department of National
Defense

P 2,500.00

EN BANC

2. Ramon Martinez
Department of National
Defense

73,750.00

3. Cielito Mindaro,
Department of Justice

18,750.00

4. Purita Deynata
Department of Justice

62,000.00

5. Alberto Bernardo
Department of the Interior
And Local Government

71,250.00

6. Stephen Villaflor
Department of the Interior and
Local Government

26,250.00

G. R. No. 156982

September 8, 2004

NATIONAL AMNESTY COMMISSION, petitioner,

vs.
COMMISSION ON AUDIT, JUANITO G. ESPINO,
Director IV, NCR, Commission on Audit, and
ERNESTO C. EULALIA, Resident Auditor,
National Amnesty Commission. respondents.
DECISION
CORONA, J.:
1

This petition for review seeks to annul the two

decisions of respondent Commission on Audit
(COA)2 dated July 26, 20013 and January 30,
2003,4 affirming the September 21, 1998 ruling5 of
the National Government Audit Office (NGAO). The
latter in turn upheld Auditor Ernesto C. Eulalia's
order disallowing the payment of honoraria to the
representatives of petitioner's ex officio members,
per COA Memorandum No. 97-038.
Petitioner National Amnesty Commission (NAC) is
a government agency created on March 25, 1994
by then President Fidel V. Ramos through
Proclamation No. 347. The NAC is tasked to
receive, process and review amnesty applications.
It is composed of seven members: a Chairperson,
three regular members appointed by the President,
and the Secretaries of Justice, National Defense
and Interior and Local Government as ex
officiomembers.6

7. Artemio Aspiras
Department of Justice

1,250.00
P255,750.00

Meanwhile, on April 28, 1999, the NAC passed

Administrative Order No. 2 (the new Implementing
Rules and Regulations of Proclamation No. 347),
which was approved by then President Joseph
Estrada on October 19, 1999. Section 1, Rule II
thereof provides:
Section 1, Composition - The NAC shall
be composed of seven (7) members:
a) A Chairperson who shall
be appointed by the President;
b) Three (3) Commissioners who
shall be appointed by the President;

c) Three (3) Ex-officio Members

1. Secretary of Justice
2. Secretary of National
Defense
3. Secretary of the Interior
and Local Government
The ex officio members
may designate their representatives to the
Commission. Said Representatives shall
be entitled to per diems, allowances,
bonuses and other benefits as may be
authorized by law.(Emphasis supplied)
Petitioner invoked Administrative Order No. 2 in
assailing before the COA the rulings of the resident
auditor and the NGAO disallowing payment
of honoraria to the ex officio members'
representatives, to no avail.
Hence, on March 14, 2003, the NAC filed the
present petition, contending that the COA
committed grave abuse of discretion in: (1)
implementing COA Memorandum No. 97-038
without the required notice and publication under
Article 2 of the Civil Code; (2) invoking paragraph 2,
Section 7, Article IX-B of the 1987 Constitution to
sustain the disallowance of honoraria under said
Memorandum; (3) applying the Memorandum to the
NAC ex officiomembers' representatives who were
all appointive officials with ranks below that of an
Assistant Secretary; (4) interpreting laws and rules
outside of its mandate and declaring Section 1,
Rule II of Administrative Order No. 2 null and void,
and (5) disallowing the payment of honoraria on the
ground of lack of authority of representatives to
attend the NAC meetings in behalf of the ex
officio members.8
We hold that the position of petitioner NAC is
against the law and jurisprudence. The COA is
correct that there is no legal basis to grant per
diem, honoraria or any allowance whatsoever to the
NAC ex officio members' official representatives.
The Constitution mandates the Commission on
Audit to ensure that the funds and properties of the
government are validly, efficiently and
conscientiously used. Thus, Article IX-D of the
Constitution ordains the COA to exercise exclusive
and broad auditing powers over all government
entities or trustees, without any exception:

Section 2. (1) The Commission on Audit

shall have the power, authority and duty
to examine, audit, and settle all accounts
pertaining to the revenue and receipts of,
and expenditures or uses of funds and
property, owned or held in trust by, or
pertaining to, the Government, or any of
its subdivisions, agencies, or
instrumentalities, including governmentowned and controlled corporations with
original charters, and on a post-audit basis:
(a) constitutional bodies, commissions and
offices that have been granted fiscal
autonomy under this Constitution; (b)
autonomous state colleges and universities;
(c) other government-owned or controlled
corporations and their subsidiaries; and (d)
such non-governmental entities receiving
subsidy or equity, directly or indirectly, from
or through the government, which are
required by law of the granting institution to
submit to such audit as a condition of
subsidy or equity. However, where the
internal control system of the audited
agencies is inadequate, the Commission
may adopt such measures, including
temporary or special pre-audit, as are
necessary and appropriate to correct the
deficiencies. It shall keep the general
accounts of the Government and, for such
period as may be provided by law, preserve
the vouchers and other supporting papers
pertaining thereto.
(2) The Commission shall have exclusive
authority, subject to the limitations in this
Article, to define the scope of its audit
and examination, establish the
techniques and methods required
therefor, and promulgate accounting and
auditing rules and regulations, including
those for the prevention and
disallowance of irregular, unnecessary,
inexpensive, extravagant, or
unconscionable expenditures, or uses of
government funds and properties.
Section 3. No law shall be
passed exempting any entity of the
Government or its subsidiary in any guise
whatever, or any investment of public
funds, from the jurisdiction of the
Commission on Audit.(Emphasis
supplied).

It is in accordance with this constitutional mandate

that the COA issued Memorandum No. 97-038 on
September 19, 1997:
COMMISSION ON AUDIT MEMORANDUM
NO. 97-038
SUBJECT: Implementation of Senate
Committee Report No. 509, Committee on
Accountability of Public Officers and
Investigations and Committee on Civil
Service and Government Reorganization.
The Commission received a copy of Senate
Committee Report No. 509 urging the
Commission on Audit to immediately
cause the disallowance of any payment
of any form of additional compensation
or remuneration to cabinet secretaries,
their deputies and assistants, or their
representatives, in violation of the rule
on multiple positions, and to effect the
refund of any and all such additional
compensation given to and received by
the officials concerned, or their
representatives, from the time of the
finality of the Supreme Court ruling
in Civil Liberties Union v. Executive
Secretary to the present. In the Civil
Liberties Union case, the Supreme Court
ruled that Cabinet Secretaries, their
deputies and assistants may not hold
any other office or employment. It
declared Executive Order 284
unconstitutional insofar as it allows
Cabinet members, their deputies and
assistants to hold other offices in
addition to their primary office and to
receive compensation therefor. The said
decision became final and executory on
August 19, 1991.
In view thereof, all unit heads/auditors/team
leaders of the national government
agencies and government owned or
controlled corporations which have effected
payment of subject allowances, are directed
to implement the recommendation
contained in the subject Senate Committee
Report by undertaking the following audit
action:
1. On accounts that have not been
audited and settled under
certificate of settlements and
balances on record from August

19, 1991 to present - to

immediately issue the Notices of
disallowance and corresponding
certificate of settlements and
balances.
2. On accounts that have been
audited and settled under certificate
of settlements and balances on
record - to review and re-open said
accounts, issue the corresponding
notices of disallowance, and certify a
new balance thereon. It is
understood that the re-opening of
accounts shall be limited to those
that were settled within the
prescriptive period of three (3)
years prescribed in Section 52 of
P.D. 1445.
3. On disallowances previously
made on these accounts - to submit
a report on the status of the
disallowances indicating whether
those have been refunded/settled or
have become final and executory
and the latest action taken by the
Auditor thereon.
All auditors concerned shall ensure that all
documents evidencing the disallowed
payments are kept intact on file in their
respective offices.
Any problem/issue arising from the
implementation of this Memorandum shall
be brought promptly to the attention of the
Committee created under COA Officer
Order No. 97-698 thru the Director
concerned, for immediate resolution.
An initial report on the implementation of
this Memorandum shall be submitted to the
Directors concerned not later than October
31, 1997. Thereafter, a quarterly progress
report on the status of disallowances made
shall be submitted, until all the
disallowances shall have been enforced.
The Committee created under COA Office
Order No. 97-698, dated September 10,
1997, shall supervise the implementation of
this Memorandum which shall take effect
immediately and shall submit a consolidated
report thereon in response to the
recommendation of the Senate Committee

on Accountability of Public Officers and

Investigation and Committee on Civil
Service and Government
Reorganization.9(Emphasis supplied)
Contrary to petitioner's claim, COA Memorandum
No. 97-038 does not need, for validity and
effectivity, the publication required by Article 2 of
the Civil Code:
Art. 2. Laws shall take effect after fifteen
days following the completion of their
publication in the Official Gazette, unless it
is otherwise provided. This Code shall take
effect one year after such publication.
We clarified this publication requirement
in Taada vs. Tuvera:10
[A]ll statutes, including those of local
application and private laws, shall be
published as a condition for their
effectivity, which shall begin fifteen
days after publication unless a
different effectivity date is fixed by
the legislature.
Covered by this rule are presidential
decrees and executive orders
promulgated by the President in the
exercise of legislative powers whenever
the same are validly delegated by the
legislature or, at present, directly
conferred by the Constitution.
Administrative rules and regulations
must also be published if their purpose
is to enforce or implement existing law
pursuant to a valid delegation.
Interpretative regulations and those
merely internal in nature, that is,
regulating only the personnel of the
administrative agency and not the
public, need not be published. Neither is
publication required of the so-called
letters of instructions issued by
administrative superiors concerning the
rules or guidelines to be followed by
their subordinates in the performance of
their duties.(Emphasis supplied.)
COA Memorandum No. 97-038 is merely an
internal and interpretative regulation or letter of
instruction which does not need publication to be
effective and valid. It is not an implementing rule or
regulation of a statute but a directive issued by the

COA to its auditors to enforce the self-executing

prohibition imposed by Section 13, Article VII of the
Constitution on the President and his official family,
their deputies and assistants, or their
representatives from holding multiple offices and
receiving double compensation.
Six years prior to the issuance of COA
Memorandum No. 97-038, the Court had the
occasion to categorically explain this constitutional
prohibition in Civil Liberties Union vs. The
Executive Secretary:11
Petitioners maintain that this Executive Order
which, in effect, allows members of the Cabinet,
their undersecretaries and assistant secretaries to
hold other government offices or positions in
addition to their primary positions, albeit subject to
the limitation therein imposed, runs counter to
Section 13, Article VII of the 1987 Constitution,
which provides as follows:
"Sec. 13. The President, Vice-President, the
Members of the Cabinet, and their deputies
or assistants shall not, unless otherwise
provided in this Constitution, hold any other
office or employment during their tenure.
They shall not, during said tenure, directly
or indirectly practice any other profession,
participate in any business, or be financially
interested in any contract with, or in any
franchise, or special privilege granted by the
Government or any subdivision, agency, or
instrumentality thereof, including
government-owned or controlled
corporations or their subsidiaries. They shall
strictly avoid conflict of interest in the
conduct of their office."
xxx

xxx

xxx

[D]oes the prohibition in Section 13,

Article VII of the 1987 Constitution
insofar as Cabinet members, their
deputies or assistants are concerned
admit of the broad exceptions made for
appointive officials in general under
Section 7, par. (2), Article IX-B which, for
easy reference is quoted anew,
thus: "Unless otherwise allowed by law or
by the primary functions of his position, no
appointive official shall hold any other office
or employment in the Government or any
subdivision, agency or instrumentality
thereof, including government-owned or
controlled corporation or their subsidiaries."

We rule in the negative.

xxx

xxx

xxx

But what is indeed significant is the fact

that although Section 7, Article IX-B
already contains a blanket prohibition
against the holding of multiple offices or
employment in the government
subsuming both elective and appointive
public officials, the Constitutional
Commission should see it fit to
formulate another provision, Sec. 13,
Article VII, specifically prohibiting the
President, Vice-President, members of
the Cabinet, their deputies and
assistants from holding any other office
or employment during their tenure,
unless otherwise provided in the
Constitution itself.
xxx

xxx

xxx

Thus, while all other appointive officials

in the civil service are allowed to hold
other office or employment in the
government during their tenure when
such is allowed by law or by the primary
functions of their positions, members of
the Cabinet, their deputies and
assistants may do so only when
expressly authorized by the Constitution
itself. In other words, Section 7, Article
IX-B is meant to lay down the general
rule applicable to all elective and
appointive public officials and
employees, while Section 13, Article VII
is meant to be the exception applicable
only to the President, the Vice-President,
Members of the Cabinet, their deputies
and assistants.
This being the case, the qualifying
phrase "unless otherwise provided in
this Constitution" in Section 13, Article
VII cannot possibly refer to the broad
exceptions provided under Section 7,
Article IX-B of the 1987 Constitution. . . .
xxx

xxx

xxx

The prohibition against holding dual or

multiple offices or employment under
Section 13, Article VII of the Constitution
must not, however, be construed as
applying to posts occupied by the

Executive officials specified therein

without additional compensation in
an ex-officio capacity as provided by law
and as required by the primary functions
of said officials' office. The reason is that
these posts do no comprise "any other
office" within the contemplation of the
constitutional prohibition but are
properly an imposition of additional
duties and functions on said officials.
xxx

xxx

xxx

[T]he prohibition under Section 13,

Article VII is not to be interpreted as
covering positions held without
additional compensation in ex-officio
capacities as provided by law and as
required by the primary functions of the
concerned official's office. The term exofficio means "from office; by virtue of
office." It refers to an "authority derived from
official character merely, not expressly
conferred upon the individual character, but
rather annexed to the official position." Exofficio likewise denotes an "act done in an
official character, or as a consequence of
office, and without any other appointment or
authority than that conferred by the office."
An ex-officio member of a board is one who
is a member by virtue of his title to a
certain office, and without further
warrant or appointment. To illustrate, by
express provision of law, the Secretary of
Transportation and Communications is the
ex-officio Chairman of the Board of the
Philippine Ports Authority, and the Light Rail
Transit Authority.
xxx

xxx

xxx

The ex-officio position being actually and in

legal contemplation part of the principal
office, it follows that the official concerned
has no right to receive additional
compensation for his services in the said
position. The reason is that these services
are already paid for and covered by the
compensation attached to his principal
office. x x x
xxx

xxx

xxx

[E]x-officio posts held by the executive

official concerned without additional
compensation as provided by law and as

required by the primary functions of his

office do not fall under the definition of
"any other office" within the
contemplation of the constitutional
prohibition... (Emphasis supplied).
Judicial decisions applying or interpreting the laws
or the Constitution, such as the Civil Liberties
Union doctrine, form part of our legal
system.12 Supreme Court decisions assume the
same authority as valid statutes.13 The Court's
interpretation of the law is part of that law as of the
date of enactment because its interpretation merely
establishes the contemporary legislative intent that
the construed law purports to carry into effect.14
COA Memorandum No. 97-038 does not, in any
manner or on its own, rule against or affect the right
of any individual, except those provided for under
the Constitution. Hence, publication of said
Memorandum is not required for it to be valid,
effective and enforceable.
In Civil Liberties Union, we elucidated on the two
constitutional prohibitions against holding multiple
positions in the government and receiving double
compensation: (1) the blanket prohibition of
paragraph 2, Section 7, Article IX-B on all
government employees against holding multiple
government offices, unless otherwise allowed by
law or the primary functions of their positions, and
(2) the stricter prohibition under Section 13, Article
VII on the President and his official family from
holding any other office, profession, business or
financial interest, whether government or private,
unless allowed by the Constitution.
The NAC ex officio members' representatives who
were all appointive officials with ranks below
Assistant Secretary are covered by the two
constitutional prohibitions.
First, the NAC ex officio members' representatives
are not exempt from the general prohibition
because there is no law or administrative order
creating a new office or position and authorizing
additional compensation therefor.
Sections 54 and 56 of the Administrative Code of
1987 reiterate the constitutional prohibition against
multiple positions in the government and receiving
additional or double compensation:
SEC. 54. Limitation on Appointment. - (1)
No elective official shall be eligible for
appointment or designation in any capacity

to any public office or position during his

tenure.
xxx

xxx

xxx

(3) Unless otherwise allowed by law or by

the primary functions of his position, no
appointive official shall hold any other office
or employment in the Government or any
subdivision, agency or instrumentality
thereof, including government-owned or
controlled corporations or their subsidiaries.
xxx

xxx

xxx

SEC. 56. Additional or Double

Compensation. -- No elective or appointive
public officer or employee shall receive
additional or double compensation unless
specifically authorized by law nor accept
without the consent of the President, any
present, emolument, office, or title of any
kind form any foreign state.
Pensions and gratuities shall not be considered as
additional, double or indirect compensation.
RA 6758, the Salary Standardization Law, also bars
the receipt of such additional emolument.
The representatives in fact assumed their
responsibilities not by virtue of a new appointment
but by mere designation from the ex
officio members who were themselves also
designated as such.
There is a considerable difference between an
appointment and designation. An appointment is
the selection by the proper authority of an individual
who is to exercise the powers and functions of a
given office; a designation merely connotes an
imposition of additional duties, usually by law, upon
a person already in the public service by virtue of
an earlier appointment.15
Designation does not entail payment of additional
benefits or grant upon the person so designated the
right to claim the salary attached to the position.
Without an appointment, a designation does not
entitle the officer to receive the salary of the
position. The legal basis of an employee's right to
claim the salary attached thereto is a duly issued
and approved appointment to the position,16 and
not a mere designation.

Second, the ex officio members' representatives

are also covered by the strict constitutional
prohibition imposed on the President and his official
family.
Again, in Civil Liberties Union, we held that cabinet
secretaries, including their deputies and assistants,
who hold positions in ex officio capacities, are
proscribed from receiving additional compensation
because their services are already paid for and
covered by the compensation attached to their
principal offices. Thus, in the attendance of the
NAC meetings, the ex officio members were not
entitled to, and were in fact prohibited from,
collecting extra compensation, whether it was
called per diem, honorarium, allowance or some
other euphemism. Such additional compensation is
prohibited by the Constitution.
Furthermore, in de la Cruz vs. COA17 and Bitonio
vs. COA,18 we upheld COA's disallowance of the
payment ofhonoraria and per diems to the officers
concerned who sat as ex officio members or
alternates. The agent, alternate or representative
cannot have a better right than his principal, the ex
officio member. The laws, rules, prohibitions or
restrictions that cover the ex officio member apply
with equal force to his representative. In short,
since the ex officio member is prohibited from
receiving additional compensation for a position
held in an ex officiocapacity, so is his
representative likewise restricted.
The Court also finds that the re-opening of the NAC
accounts within three years after its settlement is
within COA's jurisdiction under Section 52 of
Presidential Decree No. 1445, promulgated on
June 11, 1978:
SECTION 52. Opening and revision of
settled accounts. (1) At any time before the
expiration of three years after the settlement
of any account by an auditor, the
Commission may motu propio review and
revise the account or settlement and certify
a new balance.
More importantly, the Government is never
estopped by the mistake or error on the part of its
agents.19Erroneous application and enforcement of
the law by public officers do not preclude
subsequent corrective application of the statute.
In declaring Section 1, Rule II of Administrative
Order No. 2 s. 1999 null and void, the COA ruled
that:

Petitioner further contends that with the new

IRR issued by the NAC authorizing the exofficio members to designate
representatives to attend commission
meetings and entitling them to receive per
diems, honoraria and other
allowances, there is now no legal
impediment since it was approved by the
President. This Commission begs to
disagree. Said provision in the new IRR is
null and void for having been promulgated
in excess of its rule-making authority.
Proclamation No. 347, the presidential
issuance creating the NAC, makes no
mention that representatives of ex-officio
members can take the place of said exofficio members during its meetings and can
receive per diems and allowances. This
being the case, the NAC, in the exercise of
its quasi-legislative powers, cannot add,
expand or enlarge the provisions of the
issuance it seeks to implement without
committing an ultra vires act.20
We find that, on its face, Section 1, Rule II of
Administrative Order No. 2 is valid, as it merely
provides that:
The ex officio members may designate their
representatives to the Commission. Said
Representatives shall be entitled to per
diems, allowances, bonuses and other
benefits as may be authorized by
law. (Emphasis supplied).
The problem lies not in the administrative order but
how the NAC and the COA interpreted it.
First, the administrative order itself acknowledges
that payment of allowances to the representatives
must be authorized by the law, that is, the
Constitution, statutes and judicial decisions.
However, as already discussed, the payment of
such allowances is not allowed, prohibited even.
Second, the administrative order merely allows
the ex officio members to designate their
representatives to NAC meetings but not to decide
for them while attending such meetings. Section 4
of the administrative order categorically states:
Decisions of the NAC shall be arrived at by
a majority vote in a meeting where there is a
quorum consisting of at least four members.

Thus, although the administrative order

does not preclude the representatives from
attending the NAC meetings, they may do
so only as guests or witnesses to the
proceedings. They cannot substitute for
the ex officio members for purposes of
determining quorum, participating in
deliberations and making decisions.
Lastly, we disagree with NAC's position that the
representatives are de facto officers and as such
are entitled to allowances, pursuant to our
pronouncement in Civil Liberties Union:
"where there is no de jure officer, a de
facto officer, who in good faith has had
possession of the office and has discharged
the duties pertaining thereto, is legally
entitled to the emoluments of the office, and
may in appropriate action recover the
salary, fees and other compensation
attached to the office."
A de facto officer "derives his appointment
from one having colorable authority to
appoint, if the office is an appointive office,
and whose appointment is valid on its face.
(He is) one who is in possession of an office
and is discharging its duties under color of
authority, by which is meant authority
derived from an appointment, however
irregular or informal, so that the incumbent
be not a mere volunteer."21
The representatives cannot be considered de
facto officers because they were not appointed but
were merely designated to act as such.
Furthermore, they are not entitled to something
their own principals are prohibited from receiving.
Neither can they claim good faith, given the
express prohibition of the Constitution and the
finality of our decision in Civil Liberties Union prior
to their receipt of such allowances.
WHEREFORE the petition is
hereby DISMISSED for lack of merit.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC

G. R. No. 155027

February 28, 2006

THE VETERANS FEDERATION OF THE

PHILIPPINES represented by Esmeraldo R.
Acorda, Petitioner,
vs.
Hon. ANGELO T. REYES in his capacity as
Secretary of National Defense; and Hon.
EDGARDO E. BATENGA in his capacity as
Undersecretary for Civil Relations and
Administration of the Department of National
Defense, Respondents.
DECISION
CHICO-NAZARIO, J.:
This is a Petition for Certiorari with Prohibition
under Rule 65 of the 1997 Rules of Civil Procedure,
with a prayer to declare as void Department
Circular No. 04 of the Department of National
Defense (DND), dated 10 June 2002.
Petitioner in this case is the Veterans Federation of
the Philippines (VFP), a corporate body organized
under Republic Act No. 2640, dated 18 June 1960,
as amended, and duly registered with the
Securities and Exchange Commission. Respondent
Angelo T. Reyes was the Secretary of National
Defense (DND Secretary) who issued the assailed
Department Circular No. 04, dated 10 June 2002.
Respondent Edgardo E. Batenga was the DND
Undersecretary for Civil Relations and
Administration who was tasked by the respondent
DND Secretary to conduct an extensive
management audit of the records of petitioner.
The factual and procedural antecedents of this
case are as follows:
Petitioner VFP was created under Rep. Act No.
2640,1 a statute approved on 18 June 1960.
On 15 April 2002, petitioners incumbent president
received a letter dated 13 April 2002 which reads:
Col. Emmanuel V. De Ocampo (Ret.)
President

Veterans Federation of the Philippines

Makati, Metro Manila
Dear Col. De Ocampo:
Please be informed that during the preparation of
my briefing before the Cabinet and the President
last March 9, 2002, we came across some legal
bases which tended to show that there is an
organizational and management relationship
between Veterans Federation of the Philippines and
the Philippine Veterans Bank which for many years
have been inadvertently overlooked.

It is therefore in the context of clarification and

rectification of what should have been done by the
DND (Department of National Defense) for and
about the VFP and PVB that I am requesting
appropriate information and report about these two
corporate bodies.
Therefore it may become necessary that a
conference with your staffs in these two bodies be
set.
Thank you and anticipating your action on this
request.
Very truly yours,

I refer to Republic Act 2640 creating the body

corporate known as the VFP and Republic Act 3518
creating the Phil. Vets [sic] Bank.

(SGD) ANGELO T. REYES

[DND] Secretary

1. RA 2640 dated 18 June 60 Section 1 ...

"hereby created a body corporate, under the
control and supervision of the Secretary of
National Defense."
2. RA 2640 Section 12 ... "On or before the
last day of the month following the end of
each fiscal year, the Federation shall make
and transmit to the President of the
Philippines or to the Secretary of National
Defense, a report of its proceedings for the
past year, including a full, complete and
itemized report of receipts and expenditures
of whatever kind."

On 10 June 2002, respondent DND Secretary

issued the assailed DND Department Circular No.
04 entitled, "Further Implementing the Provisions of
Sections 12 and 23 of Republic Act No. 2640," the
full text of which appears as follows:
Department of National Defense
Department Circular No. 04
Subject: Further Implementing the Provisions of
Sections 1 & 2 of
Republic Act No. 2640

3. Republic Act 3518 dated 18 June 1963

(An Act Creating the Philippine Veterans
Bank, and for Other Purposes) provides in
Section 6 that ... "the affairs and business of
the Philippine Veterans Bank shall be
directed and its property managed,
controlled and preserved, unless otherwise
provided in this Act, by a Board of Directors
consisting of eleven (11) members to be
composed of three ex officio members to
wit: the Philippine Veterans Administrator,
the President of the Veterans Federation of
the Philippines and the Secretary of
National Defense x x x.

Authority: Republic Act No. 2640

Executive Order No. 292 dated July 25, 1987
Section 1
These rules shall govern and apply to the
management and operations of the Veterans
Federation of the Philippines (VFP) within the
context provided by EO 292 s-1987.
Section 2 DEFINITION OF TERMS for the
purpose of these rules, the terms, phrases or words
used herein shall, unless the context indicates
otherwise, mean or be understood as follows:

Supervision and Control it shall include authority

to act directly whenever a specific function is
entrusted by law or regulation to a subordinate;
direct the performance of a duty; restrain the
commission of acts; approve, reverse or modify
acts and decisions of subordinate officials or units;
determine priorities in the execution of plans and
programs; and prescribe standards, guidelines,
plans and programs.
Power of Control power to alter, modify, nullify or
set aside what a subordinate officer had done in the
performance of his duties and to substitute the
judgment of the former to that of the latter.
Supervision means overseeing or the power of an
officer to see to it that their subordinate officers
perform their duties; it does not allow the superior
to annul the acts of the subordinate.
Administrative Process embraces matter
concerning the procedure in the disposition of both
routine and contested matters, and the matter in
which determinations are made, enforced or
reviewed.
Government Agency as defined under PD 1445, a
government agency or agency of government or
"agency" refers to any department, bureau or office
of the national government, or any of its branches
or instrumentalities, of any political subdivision, as
well as any government owned or controlled
corporation, including its subsidiaries, or other selfgoverning board or commission of the government.
Government Owned and Controlled Corporation
(GOCC) refer to any agency organized as a stock
or non-stock corporation, vested with functions
relating to public needs whether governmental or
proprietary in nature, and owned by the
government directly or through its instrumentalities
wholly or, where applicable as in the case of stock
corporations, to the extent of at least 50% of its
capital stock.
Fund sum of money or other resources set aside
for the purpose of carrying out specific activities or
attaining certain objectives in accordance with
special regulations, restrictions or limitations and

constitutes an independent, fiscal and accounting

entity.
Government Fund includes public monies of
every sort and other resources pertaining to any
agency of the government.
Veteran any person who rendered military service
in the land, sea or air forces of the Philippines
during the revolution against Spain, the Philippine
American War, World War II, including Filipino
citizens who served in Allied Forces in the
Philippine territory and foreign nationals who
served in Philippine forces; the Korean campaign,
the Vietnam campaign, the Anti-dissidence
campaign, or other wars or military campaigns; or
who rendered military service in the Armed Forces
of the Philippines and has been honorably
discharged or separated after at least six (6) years
total cumulative active service or sooner separated
due to the death or disability arising from a wound
or injury received or sickness or disease incurred in
line of duty while in the active service.
Section 3 Relationship Between the DND and the
VFP
3.1 Sec 1 of RA 3140 provides "... the following
persons (heads of various veterans associations
and organizations in the Philippines) and their
associates and successors are hereby created a
body corporate, under the control and supervision
of the Secretary of National Defense, under the
name, style and title of "Veterans Federation of the
Philippines ..."
The Secretary of National Defense shall be
charged with the duty of supervising the veterans
and allied program under the jurisdiction of the
Department. It shall also have the responsibility of
overseeing and ensuring the judicious and effective
implementation of veterans assistance, benefits,
and utilization of VFP assets.
3.2 To effectively supervise and control the
corporate affairs of the Federation and to safeguard
the interests and welfare of the veterans who are
also wards of the State entrusted under the
protection of the DND, the Secretary may

personally or through a designated representative,

require the submission of reports, documents and
other papers regarding any or all of the
Federations business transactions particularly
those relating to the VFP functions under Section 2
of RA 2640.
The Secretary or his representative may attend
conferences of the supreme council of the VFP and
such other activities he may deem relevant.
3.3 The Secretary shall from time to time issue
guidelines, directives and other orders governing
vital government activities including, but not limited
to, the conduct of elections; the acquisition,
management and dispositions of properties, the
accounting of funds, financial interests, stocks and
bonds, corporate investments, etc. and such other
transactions which may affect the interests of the
veterans.
3.4 Financial transactions of the Federation shall
follow the provisions of the government auditing
code (PD 1445) i.e. government funds shall be
spent or used for public purposes; trust funds shall
be available and may be spent only for the specific
purpose for which the trust was created or the
funds received; fiscal responsibility shall, to the
greatest extent, be shared by all those exercising
authority over the financial affairs, transactions, and
operations of the federation; disbursements or
dispositions of government funds or property shall
invariably bear the approval of the proper officials.
Section 4 Records of the FEDERATION
As a corporate body and in accordance with
appropriate laws, it shall keep and carefully
preserve records of all business transactions,
minutes of meetings of stockholders/members of
the board of directors reflecting all details about
such activity.
All such records and minutes shall be open to
directors, trustees, stockholders, and other
members for inspection and copies of which may
be requested.
As a body corporate, it shall submit the following:
annual report; proceedings of council meetings;

report of operations together with financial

statement of its assets and liabilities and fund
balance per year; statement of revenues and
expenses per year; statement of cash flows per
year as certified by the accountant; and other
documents/reports as may be necessary or
required by the SND.
Section 5 Submission of Annual and Periodic
Report
As mandated under appropriate laws, the following
reports shall be submitted to the SND, to wit:
a. Annual Report to be submitted not later
than every January 31 of the following year.
Said report shall consist of the following:
1. Financial Report of the
Federation, signed by the Treasurer
General and Auditor General;
2. Roster of Members of the
Supreme Council;
3. Roster of Members of the
Executive Board and National
Officers; and
4. Current listing of officers and
management of VFP.
b. Report on the proceedings of each
Supreme Council Meeting to be submitted
not later than one month after the meeting;
c. Report of the VFP President as may be
required by SND or as may be found
necessary by the President of the
Federation;
d. Resolutions passed by the Executive
Board and the Supreme Council for
confirmation to be submitted not later than
one month after the approval of the
resolution;
e. After Operation/Activity Reports to be
submitted not later than one month after
such operation or activity;

Section 6 Penal Sanctions

As an attached agency to a regular department of
the government, the VFP and all its
instrumentalities, officials and personnel shall be
subject to the penal provisions of such laws, rules
and regulations applicable to the attached agencies
of the government.
In a letter dated 6 August 2002 addressed to the
President of petitioner, respondent DND Secretary
reiterated his instructions in his earlier letter of 13
April 2002.
Thereafter, petitioners President received a letter
dated 23 August 2002 from respondent
Undersecretary, informing him that Department
Order No. 129 dated 23 August 2002 directed "the
conduct of a Management Audit of the Veterans
Federation of the Philippines."4 The letter went on
to state that respondent DND Secretary "believes
that the mandate given by said law can be
meaningfully exercised if this department can better
appreciate the functions, responsibilities and
situation on the ground and this can be done by
undertaking a thorough study of the organization."5
Respondent Undersecretary also requested both
for a briefing and for documents on personnel,
ongoing projects and petitioners financial
condition. The letter ended by stating that, after the
briefing, the support staff of the Audit Committee
would begin their work to meet the one-month
target within which to submit a report.
A letter dated 28 August 2003 informed petitioners
President that the Management Audit Group
headed by the Undersecretary would be paying
petitioner a visit on 30 August 2002 for an update
on VFPs different affiliates and the financial
statement of the Federation.
Subsequently, the Secretary General of the VFP
sent an undated letter to respondent DND
Secretary, with notice to respondent
Undersecretary for Civil Relations and
Administration, complaining about the alleged
broadness of the scope of the management audit
and requesting the suspension thereof until such

time that specific areas of the audit shall have been

agreed upon.
The request was, however, denied by the
Undersecretary in a letter dated 4 September 2002
on the ground that a specific timeframe had been
set for the activity.
Petitioner thus filed this Petition for Certiorari with
Prohibition under Rule 65 of the 1997 Rules of Civil
Procedure, praying for the following reliefs:
1. For this Court to issue a temporary
restraining order and a writ of preliminary
prohibitory and mandatory injunction to
enjoin respondent Secretary and all those
acting under his discretion and authority
from: (a) implementing DND Department
Circular No. 04; and (b) continuing with the
ongoing management audit of petitioners
books of account;
2. After hearing the issues on notice
a. Declare DND Department Circular
No. 04 as null and void for being
ultra vires;
b. Convert the writ of prohibition,
preliminary prohibitory and
mandatory injunction into a
permanent one.6
GIVING DUE COURSE TO THE PETITION
Petitioner asserts that, although cases which
question the constitutionality or validity of
administrative issuances are ordinarily filed with the
lower courts, the urgency and substantive
importance of the question on hand and the public
interest attendant to the subject matter of the
petition justify its being filed with this Court directly
as an original action.7
It is settled that the Regional Trial Court and the
Court of Appeals also exercise original jurisdiction
over petitions for certiorari and prohibition. As we
have held in numerous occasions, however, such
concurrence of original jurisdiction does not mean
that the party seeking extraordinary writs has the

absolute freedom to file his petition in the court of

his choice.8 Thus, in Commissioner of Internal
Revenue v. Leal,9 we held that:

over the country. All these said, we hereby resolve

to give due course to this petition.
ISSUES

Such concurrence of original jurisdiction among the

Regional Trial Court, the Court of Appeals and this
Court, however, does not mean that the party
seeking any of the extraordinary writs has the
absolute freedom to file his petition in the court of
his choice. The hierarchy of courts in our judicial
system determines the appropriate forum for these
petitions. Thus, petitions for the issuance of the
said writs against the first level (inferior) courts
must be filed with the Regional Trial Court and
those against the latter, with the Court of Appeals. A
direct invocation of this Courts original jurisdiction
to issue these writs should be allowed only where
there are special and important reasons therefor,
specifically and sufficiently set forth in the petition.
This is the established policy to prevent inordinate
demands upon the Courts time and attention,
which are better devoted to matters within its
exclusive jurisdiction, and to prevent further overcrowding of the Courts docket. Thus, it was proper
for petitioner to institute the special civil action for
certiorari with the Court of Appeals assailing the
RTC order denying his motion to dismiss based on
lack of jurisdiction.
The petition itself, in this case, does not specifically
and sufficiently set forth the special and important
reasons why the Court should give due course to
this petition in the first instance, hereby failing to
fulfill the conditions set forth in Commissioner of
Internal Revenue v. Leal.10 While we reiterate the
policies set forth in Leal and allied cases and
continue to abhor the propensity of a number of
litigants to disregard the principle of hierarchy of
courts in our judicial system, we, however, resolve
to take judicial notice of the fact that the persons
who stand to lose in a possible protracted litigation
in this case are war veterans, many of whom have
precious little time left to enjoy the benefits that can
be conferred by petitioner corporation. This
bickering for the power over petitioner corporation,
an entity created to represent and defend the
interests of Filipino veterans, should be resolved as
soon as possible in order for it to once and for all
direct its resources to its rightful beneficiaries all

Petitioner mainly alleges that the rules and

guidelines laid down in the assailed Department
Circular No. 04 expanded the scope of "control and
supervision" beyond what has been laid down in
Rep. Act No. 2640.11Petitioner further submits the
following issues to this Court:
1. Was the challenged department circular
passed in the valid exercise of the
respondent Secretarys "control and
supervision"?
2. Could the challenged department circular
validly lay standards classifying the VFP, an
essentially civilian organization, within the
ambit of statutes only applying to
government entities?
3. Does the department circular, which
grants respondent direct management
control on the VFP, unduly encroach on the
prerogatives of VFPs governing body?
At the heart of all these issues and all of petitioners
prayers and assertions in this case is petitioners
claim that it is a private non-government
corporation.
CENTRAL ISSUE:
IS THE VFP A PRIVATE CORPORATION?
Petitioner claims that it is not a public nor a
governmental entity but a private organization, and
advances this claim to prove that the issuance of
DND Department Circular No. 04 is an invalid
exercise of respondent Secretarys control and
supervision.12
This Court has defined the power of control as "the
power of an officer to alter or modify or nullify or set
aside what a subordinate has done in the
performance of his duties and to substitute the
judgment of the former to that of the latter."13 The
power of supervision, on the other hand, means

"overseeing, or the power or authority of an officer

to see that subordinate officers perform their duties.
If the latter fail or neglect to fulfill them, the former
may take such action or step as prescribed by law
to make them perform their duties."14 These
definitions are synonymous with the definitions in
the assailed Department Circular No. 04, while the
other provisions of the assailed department circular
are mere consequences of control and supervision
as defined.
Thus, in order for petitioners premise to be able to
support its conclusion, petitioners should be
deemed to imply either of the following: (1) that it is
unconstitutional/impermissible for the law (Rep. Act
No. 2640) to grant control and/or supervision to the
Secretary of National Defense over a private
organization, or (2) that the control and/or
supervision that can be granted to the Secretary of
National Defense over a private organization is
limited, and is not as strong as they are defined
above.
The following provision of the 1935 Constitution,
the organic act controlling at the time of the
creation of the VFP in 1960, is relevant:
Section 7. The Congress shall not, except by
general law, provide for the formation, organization,
or regulation of private corporations, unless such
corporations are owned and controlled by the
Government or any subdivision or instrumentality
thereof.15
On the other hand, its counterparts in the 1973 and
1987 constitutions are the following:
Section 4. The National Assembly shall not, except
by general law, provide for the formation,
organization, or regulation of private corporations,
unless such corporations are owned or controlled
by the government or any subdivision or
instrumentality thereof.16
Sec. 16. The Congress shall not, except by general
law, provide for the formation, organization, or
regulation of private corporations. Governmentowned and controlled corporations may be created
or established by special charters in the interest of

the common good and subject to the test of

economic viability.17
From the foregoing, it is crystal clear that our
constitutions explicitly prohibit the regulation by
special laws of private corporations, with the
exception of government-owned or controlled
corporations (GOCCs). Hence, it would be
impermissible for the law to grant control of the
VFP to a public official if it were neither a public
corporation, an unincorporated governmental entity,
nor a GOCC.18 Said constitutional provisions can
even be read to prohibit the creation itself of the
VFP if it were neither of the three mentioned above,
but we cannot go into that in this case since there is
no challenge to the creation of the VFP in the
petition as to permit this Court from considering its
nullity.
Petitioner vigorously argues that the VFP is a
private non-government organization, pressing on
the following contentions:
1. The VFP does not possess the elements
which would qualify it as a public office,
particularly the possession/delegation of a
portion of sovereign power of government to
be exercised for the benefit of the public;
2. VFP funds are not public funds because

a) No budgetary appropriations or
government funds have been
released to the VFP directly or
indirectly from the Department of
Budget and Management (DBM);
b) VFP funds come from
membership dues;
c) The lease rentals raised from the
use of government lands reserved
for the VFP are private in character
and do not belong to the
government. Said rentals are fruits
of VFPs labor and efforts in
managing and administering the
lands for VFP purposes and
objectives. A close analogy would be

any Filipino citizen settling on

government land and who tills the
land for his livelihood and
sustenance. The fruits of his labor
belong to him and not to the owner
of the land. Such fruits are not public
funds.
3. Although the juridical personality of the
VFP emanates from a statutory charter, the
VFP retains its essential character as a
private, civilian federation of veterans
voluntarily formed by the veterans
themselves to attain a unity of effort,
purpose and objectives, e.g.
a. The members of the VFP are
individual members and retirees
from the public and military service;
b. Membership in the VFP is
voluntary, not compulsory;
c. The VFP is governed, not by the
Civil Service Law, the Articles of War
nor the GSIS Law, but by the Labor
Code and the SSS Law;
d. The VFP has its own Constitution
and By-Laws and is governed by a
Supreme Council who are elected
from and by the members
themselves;
4. The Administrative Code of 1987 does
not provide that the VFP is an attached
agency, nor does it provide that it is an
entity under the control and supervision of
the DND in the context of the provisions of
said code.
5. The DBM declared that the VFP is a nongovernment organization and issued a
certificate that the VFP has not been a
direct recipient of any funds released by the
DBM.
These arguments of petitioner notwithstanding, we
are constrained to rule that petitioner is in fact a
public corporation. Before responding to petitioners

allegations one by one, here are the more evident

reasons why the VFP is a public corporation:
(1) Rep. Act No. 2640 is entitled "An Act to
Create a Public Corporation to be Known as
the Veterans Federation of the Philippines,
Defining its Powers, and for Other
Purposes."
(2) Any action or decision of the Federation
or of the Supreme Council shall be subject
to the approval of the Secretary of
Defense.19
(3) The VFP is required to submit annual
reports of its proceedings for the past year,
including a full, complete and itemized
report of receipts and expenditures of
whatever kind, to the President of the
Philippines or to the Secretary of National
Defense.20
(4) Under Executive Order No. 37 dated 2
December 1992, the VFP was listed as
among the government-owned and
controlled corporations that will not be
privatized.
(5) In Ang Bagong Bayani OFW Labor
Party v. COMELEC,21 this Court held in a
minute resolution that the "VFP [Veterans
Federation Party] is an adjunct of the
government, as it is merely an incarnation of
the Veterans Federation of the Philippines.
And now to answer petitioners reasons for insisting
that it is a private corporation:
1. Petitioner claims that the VFP does not possess
the elements which would qualify it as a public
office, particularly the possession/delegation of a
portion of sovereign power of government to be
exercised for the benefit of the public;
In Laurel v. Desierto,22 we adopted the definition of
Mechem of a public office, that it is "the right,
authority and duty, created and conferred by law, by
which, for a given period, either fixed by law or
enduring at the pleasure of the creating power, an
individual is invested with some portion of the

sovereign functions of the government, to be

exercised by him for the benefit of the public."

observation of former Chief Justice Querube

Makalintal:

In the same case, we went on to adopt Mechems

view that the delegation to the individual of some of
the sovereign functions of government is "[t]he
most important characteristic" in determining
whether a position is a public office or not.23 Such
portion of the sovereignty of the country, either
legislative, executive or judicial, must attach to the
office for the time being, to be exercised for the
public benefit. Unless the powers conferred are of
this nature, the individual is not a public officer. The
most important characteristic which distinguishes
an office from an employment or contract is that the
creation and conferring of an office involves a
delegation to the individual of some of the
sovereign functions of government, to be exercised
by him for the benefit of the public; that some
portion of the sovereignty of the country, either
legislative, executive or judicial, attaches, for the
time being, to be exercised for the public benefit.
Unless the powers conferred are of this nature, the
individual is not a public officer.24 The issue,
therefore, is whether the VFAs officers have been
delegated some portion of the sovereignty of the
country, to be exercised for the public benefit.

The growing complexities of modern society,

however, have rendered this traditional
classification of the functions of government [into
constituent and ministrant functions] quite
unrealistic, not to say obsolete. The areas which
used to be left to private enterprise and initiative
and which the government was called upon to enter
optionally, and only "because it was better
equipped to administer for the public welfare than is
any private individual or group of individuals,"
continue to lose their well-defined boundaries and
to be absorbed within activities that the government
must undertake in its sovereign capacity if it is to
meet the increasing social challenges of the times.
Here[,] as almost everywhere else[,] the tendency
is undoubtedly towards a greater socialization of
economic forces. Here, of course, this development
was envisioned, indeed adopted as a national
policy, by the Constitution itself in its declaration of
principle concerning the promotion of social
justice.29 (Emphasis supplied.)

In several cases, we have dealt with the issue of

whether certain specific activities can be classified
as sovereign functions. These cases, which deal
with activities not immediately apparent to be
sovereign functions, upheld the public sovereign
nature of operations needed either to promote
social justice25 or to stimulate patriotic sentiments
and love of country.26
As regards the promotion of social justice as a
sovereign function, we held in Agricultural Credit
and Cooperative Financing Administration (ACCFA)
v. Confederation of Unions in Government
Corporations and Offices (CUGCO),27 that the
compelling urgency with which the Constitution
speaks of social justice does not leave any doubt
that land reform is not an optional but a compulsory
function of sovereignty. The same reason was used
in our declaration that socialized housing is likewise
a sovereign function.28 Highly significant here is the

It was, on the other hand, the fact that the National

Centennial Celebrations was calculated to arouse
and stimulate patriotic sentiments and love of
country that it was considered as a sovereign
function in Laurel v. Desierto.30 In Laurel, the Court
then took its cue from a similar case in the United
States involving a Fourth of July fireworks display.
The holding of the Centennial Celebrations was
held to be an executive function, as it was intended
to enforce Article XIV of the Constitution which
provides for the conservation, promotion and
popularization of the nations historical and cultural
heritage and resources, and artistic relations.
In the case at bar, the functions of petitioner
corporation enshrined in Section 4 of Rep. Act No.
264031 should most certainly fall within the category
of sovereign functions. The protection of the
interests of war veterans is not only meant to
promote social justice, but is also intended to
reward patriotism. All of the functions in Section 4
concern the well-being of war veterans, our
countrymen who risked their lives and lost their
limbs in fighting for and defending our nation. It

would be injustice of catastrophic proportions to say

that it is beyond sovereigntys power to reward the
people who defended her.
Like the holding of the National Centennial
Celebrations, the functions of the VFP are
executive functions, designed to implement not just
the provisions of Rep. Act No. 2640, but also, and
more importantly, the Constitutional mandate for
the State to provide immediate and adequate care,
benefits and other forms of assistance to war
veterans and veterans of military campaigns, their
surviving spouses and orphans.32
2. Petitioner claims that VFP funds are not public
funds.
Petitioner claims that its funds are not public funds
because no budgetary appropriations or
government funds have been released to the VFP
directly or indirectly from the DBM, and because
VFP funds come from membership dues and lease
rentals earned from administering government
lands reserved for the VFP.
The fact that no budgetary appropriations have
been released to the VFP does not prove that it is a
private corporation. The DBM indeed did not see it
fit to propose budgetary appropriations to the VFP,
having itself believed that the VFP is a private
corporation.33 If the DBM, however, is mistaken as
to its conclusion regarding the nature of VFPs
incorporation, its previous assertions will not
prevent future budgetary appropriations to the VFP.
The erroneous application of the law by public
officers does not bar a subsequent correct
application of the law.34
Nevertheless, funds in the hands of the VFP from
whatever source are public funds, and can be used
only for public purposes. This is mandated by the
following provisions of Rep. Act No. 2640:
(1) Section 2 provides that the VFP can only
"invest its funds for the exclusive benefit of
the Veterans of the Philippines;"
(2) Section 2 likewise provides that "(a)ny
action or decision of the Federation or of the
Supreme Council shall be subject to the

approval of the Secretary of National

Defense." Hence, all activities of the VFP to
which the Supreme Council can apply its
funds are subject to the approval of the
Secretary of National Defense;
(3) Section 4 provides that "the Federation
shall exist solely for the purposes of a
benevolent character, and not for the
pecuniary benefit of its
members;"1avvphil.net
(4) Section 6 provides that all funds of the
VFP in excess of operating expenses are
"reserved for disbursement, as the Supreme
Council may authorize, for the purposes
stated in Section two of this Act;"
(5) Section 10 provides that "(a)ny donation
or contribution which from time to time may
be made to the Federation by the
Government of the Philippines or any of its
subdivisions, branches, offices, agencies or
instrumentalities shall be expended by the
Supreme Council only for the purposes
mentioned in this Act."; and finally,
(6) Section 12 requires the submission of
annual reports of VFP proceedings for the
past year, including a full, complete and
itemized report of receipts and expenditures
of whatever kind, to the President of the
Philippines or to the Secretary of National
Defense.
It is important to note here that the membership
dues collected from the individual members of
VFPs affiliate organizations do not become public
funds while they are still funds of the affiliate
organizations. A close reading of Section 135 of
Rep. Act No. 2640 reveals that what has been
created as a body corporate is not the individual
membership of the affiliate organizations, but
merely the aggregation of the heads of the affiliate
organizations. Thus, only the money remitted by
the affiliate organizations to the VFP partake in the
public nature of the VFP funds.

In Republic v. COCOFED,36 we held that the

Coconut Levy Funds are public funds because,
inter alia, (1) they were meant to be for the benefit
of the coconut industry, one of the major industries
supporting the national economy, and its farmers;
and (2) the very laws governing coconut levies
recognize their public character. The same is true
with regard to the VFP funds. No less public is the
use for the VFP funds, as such use is limited to the
purposes of the VFP which we have ruled to be
sovereign functions. Likewise, the law governing
VFP funds (Rep. Act No. 2640) recognizes the
public character of the funds as shown in the
enumerated provisions above.
We also observed in the same COCOFED case
that "(e)ven if the money is allocated for a special
purpose and raised by special means, it is still
public in character."37 In the case at bar, some of
the funds were raised by even more special means,
as the contributions from affiliate organizations of
the VFP can hardly be regarded as enforced
contributions as to be considered taxes. They are
more in the nature of donations which have always
been recognized as a source of public funding.
Affiliate organizations of the VFP cannot complain
of their contributions becoming public funds upon
the receipt by the VFP, since they are presumed
aware of the provisions of Rep. Act No. 2640 which
not only specifies the exclusive purposes for which
VFP funds can be used, but also provides for the
regulation of such funds by the national
government through the Secretary of National
Defense. There is nothing wrong, whether legally or
morally, from raising revenues through nontraditional methods. As remarked by Justice
Florentino Feliciano in his concurring opinion in
Kilosbayan, Incorporated v. Guingona, Jr.38 where
he explained that the funds raised by the On-line
Lottery System were also public in nature, thus:
x x x [T]he more successful the government is in
raising revenues by non-traditional methods such
as PAGCOR operations and privatization
measures, the lesser will be the pressure upon the
traditional sources of public revenues, i.e., the
pocket books of individual taxpayers and importers.

Petitioner additionally harps on the inapplicability of

the case of Laurel v. Desierto39 which was cited by
Respondents. Petitioner claims that among the
reasons National Centennial Commission Chair
Salvador Laurel was considered a public officer
was the fact that his compensation was derived
from public funds. Having ruled that VFP funds
from whatever source are public funds, we can
safely conclude that the Supreme Councils
compensation, taken as they are from VFP funds
under the term "operating expenses" in Section 6 of
Rep. Act No. 2640, are derived from public funds.
The particular nomenclature of the compensation
taken from VFP funds is not even of relevance
here. As we said in Laurel concerning
compensation as an element of public office:
Under particular circumstances, "compensation"
has been held to include allowance for personal
expenses, commissions, expenses, fees, an
honorarium, mileage or traveling expenses,
payments for services, restitution or a balancing of
accounts, salary, and wages.40
3. Petitioner argues that it is a civilian federation
where membership is voluntary.
Petitioner claims that the Secretary of National
Defense "historically did not indulge in the direct or
micromanagement of the VFP precisely because it
is essentially a civilian organization where
membership is voluntary."41 This reliance of
petitioner on what has "historically" been done is
erroneous, since laws are not repealed by disuse,
custom, or practice to the contrary.42 Furthermore,
as earlier stated, the erroneous application of the
law by public officers does not bar a subsequent
correct application of the law.43
Neither is the civilian nature of VFP relevant in this
case. The Constitution does not contain any
prohibition, express or implied, against the grant of
control and/or supervision to the Secretary of
National Defense over a civilian organization. The
Office of the Secretary of National Defense is itself
a civilian office, its occupant being an alter ego of
the civilian Commander-in-Chief. This set-up is the
manifestation of the constitutional principle that
civilian authority is, at all times, supreme over the

military.44 There being no such constitutional

prohibition, the creation of a civilian public
organization by Rep. Act No. 2640 is not rendered
invalid by its being placed under the control and
supervision of the Secretary of National Defense.
Petitioners stand that the VFP is a private
corporation because membership thereto is
voluntary is likewise erroneous. As stated above,
the membership of the VFP is not the individual
membership of the affiliate organizations, but
merely the aggregation of the heads of such
affiliate organizations. These heads forming the
VFP then elect the Supreme Council and the other
officers,45 of this public corporation.
4. Petitioner claims that the Administrative Code of
1987 does not provide that the VFP is an attached
agency, and nor does it provide that it is an entity
under the control and supervision of the DND in the
context of the provisions of said code.
The Administrative Code, by giving definitions of
the various entities covered by it, acknowledges
that its enumeration is not exclusive. The
Administrative Code could not be said to have
repealed nor enormously modified Rep. Act No.
2640 by implication, as such repeal or enormous
modification by implication is not favored in
statutory construction.46
5. Petitioner offers as evidence the DBM opinion
that the VFP is a non-government organization in
its certification that the VFP "has not been a direct
recipient of any funds released by the DBM."
Respondents claim that the supposed declaration
of the DBM that petitioner is a non-government
organization is not persuasive, since DBM is not a
quasi-judicial agency. They aver that what we have
said of the Bureau of Local Government Finance
(BLGF) in Philippine Long Distance Telephone
Company (PLDT) v. City of Davao47 can be applied
to DBM:

In any case, it is contended, the ruling of the

Bureau of Local Government Finance (BLGF) that
petitioners exemption from local taxes has been
restored is a contemporaneous construction of
Section 23 [of R.A. No. 7925 and, as such, is
entitled to great weight.
The ruling of the BLGF has been considered in this
case. But unlike the Court of Tax Appeals, which is
a special court created for the purpose of reviewing
tax cases, the BLGF was created merely to provide
consultative services and technical assistance to
local governments and the general public on local
taxation and other related matters. Thus, the rule
that the "Court will not set aside conclusions
rendered by the CTA, which is, by the very nature
of its function, dedicated exclusively to the study
and consideration of tax problems and has
necessarily developed an expertise on the subject,
unless there has been an abuse or improvident
exercise of authority" cannot apply in the case of
the BLGF.
On this score, though, we disagree with
respondents and hold that the DBMs appraisal is
considered persuasive. Respondents misread the
PLDT case in asserting that only quasi-judicial
agencies determination can be considered
persuasive. What the PLDT case points out is that,
for an administrative agencys opinion to be
persuasive, the administrative agency involved
(whether it has quasi-judicial powers or not) must
be an expert in the field they are giving their opinion
on.
The DBM is indeed an expert on determining what
the various government agencies and corporations
are. This determination is necessary for the DBM to
fulfill its mandate:
Sec. 2. Mandate. - The Department shall be
responsible for the formulation and implementation
of the National Budget with the goal of attaining our
national socio-economic plans and objectives.
The Department shall be responsible for the
efficient and sound utilization of government funds
and revenues to effectively achieve our country's
development objectives.48

The persuasiveness of the DBM opinion has,

however, been overcome by all the previous
explanations we have laid so far. It has also been
eclipsed by another similarly persuasive opinion,
that of the Department of National Defense
embodied in Department Circular No. 04. The DND
is clearly more of an expert with respect to the
determination of the entities under it, and its
Administrative Rules and Regulations are entitled
to great respect and have in their favor the
presumption of legality.49
The DBM opinion furthermore suffers from its lack
of explanation and justification in the "certification
of non-receipt" where said opinion was given. The
DBM has not furnished, in said certification or
elsewhere, an explanation for its opinion that VFP
is a non-government organization.
THE FATE OF DEPARTMENT CIRCULAR NO. 04
Our ruling that petitioner is a public corporation is
determinative of whether or not we should grant
petitioners prayer to declare Department Circular
No. 04 void.
Petitioner assails Department Circular No. 04 on
the ground that it expanded the scope of control
and supervision beyond what has been laid down in
Rep. Act No. 2640. Petitioner alleges that "(t)he
equation of the meaning of `control and
`supervision of the Administrative Code of 1987 as
the same `control and supervision under Rep. Act
No. 2640, takes out the context of the original
legislative intent from the peculiar surrounding
circumstances and conditions that brought about
the creation of the VFP."50 Petitioner claims that the
VFP "was intended as a self-governing
autonomous body with a Supreme Council as
governing authority," and that the assailed circular
"pre-empts VFPs original self-governance and
autonomy (in) representing veterans organizations,
and substitutes government discretion and
decisions to that of the veterans own
determination."51 Petitioner says that the circulars
provisions practically render the Supreme Council
inutile, despite its being the statutory governing
body of the VFP.52

As previously mentioned, this Court has defined the

power of control as "the power of an officer to alter
or modify or nullify or set aside what a subordinate
has done in the performance of his duties and to
substitute the judgment of the former to that of the
latter."53 The power of supervision, on the other
hand, means "overseeing, or the power or authority
of an officer to see that subordinate officers perform
their duties."54 Under the Administrative Code of
1987:55
Supervision and control shall include the authority
to act directly whenever a specific function is
entrusted by law or regulation to a subordinate;
direct the performance of duty; restrain the
commission of acts; review, approve, reverse or
modify acts and decisions of subordinate officials or
units; determine priorities in the execution of plans
and programs; and prescribe standards, guidelines,
plans and programs. x x x
The definition of the power of control and
supervision under Section 2 of the assailed
Department Circular are synonymous with the
foregoing definitions. Consequently, and
considering that petitioner is a public corporation,
the provisions of the assailed Department Circular
No. 04 did not supplant nor modify the provisions of
Republic Act No. 2640, thus not violating the settled
rule that "all such (administrative) issuances must
not override, but must remain consistent and in
harmony with the law they seek to apply or
implement. Administrative rules and regulations are
intended to carry out, neither to supplant nor to
modify, the law."56
Section 3.2 of the assailed department circular,
which authorizes the Secretary of National Defense
to "x x x personally or through a designated
representative, require the submission of reports,
documents and other papers regarding any or all of
the Federations business functions, x x x."
as well as Section 3.3 which allows the Secretary of
DND to
x x x [F]rom time to time issue guidelines, directives
and other orders governing vital government
activities including, but not limited to, the conduct of

elections, the acquisition, management and

dispositions of properties, the accounting of funds,
financial interests, stocks and bonds, corporate
investments, etc. and such other transactions which
may affect the interests of the veterans.
are merely consequences of both the power of
control and supervision granted by Rep. Act No.
2640. The power to alter or modify or nullify or set
aside what a subordinate has done in the
performance of his duties, or to see to it that
subordinate officers perform their duties in
accordance with law, necessarily requires the ability
of the superior officer to monitor, as closely as it
desires, the acts of the subordinate.
The same is true with respect to Sections 4 and 5
of the assailed Department Circular No. 04, which
requires the preservation of the records of the
Federation and the submission to the Secretary of
National Defense of annual and periodic reports.
Petitioner likewise claims that the assailed DND
Department Circular No. 04 was never published,
and hence void.57 Respondents deny such nonpublication.58
We have put forth both the rule and the exception
on the publication of administrative rules and
regulations in the case of Taada v. Tuvera:59
x x x Administrative rules and regulations must also
be published if their purpose is to enforce or
implement existing law pursuant also to a valid
delegation.
Interpretative regulations and those merely internal
in nature, that is, regulating only the personnel of
the administrative agency and not the public, need
not be published. Neither is publication required of
the so-called letters of instructions issued by
administrative superiors concerning the rules on
guidelines to be followed by their subordinates in
the performance of their duties.
Even assuming that the assailed circular was not
published, its validity is not affected by such nonpublication for the reason that its provisions fall
under two of the exceptions enumerated in Taada.

Department Circular No. 04 is an internal

regulation. As we have ruled, they are meant to
regulate a public corporation under the control of
DND, and not the public in general. As likewise
discussed above, what has been created as a body
corporate by Rep. Act No. 2640 is not the individual
membership of the affiliate organizations of the
VFP, but merely the aggregation of the heads of the
affiliate organizations. Consequently, the individual
members of the affiliate organizations, who are not
public officers, are beyond the regulation of the
circular.
Sections 2, 3 and 6 of the assailed circular are
additionally merely interpretative in nature. They
add nothing to the law. They do not affect the
substantial rights of any person, whether party to
the case at bar or not. In Sections 2 and 3, control
and supervision are defined, mentioning actions
that can be performed as consequences of such
control and supervision, but without specifying the
particular actions that shall be rendered to control
and supervise the VFP. Section 6, in the same vein,
merely state what the drafters of the circular
perceived to be consequences of being an attached
agency to a regular department of the government,
enumerating sanctions and remedies provided by
law that may be availed of whenever desired.
Petitioner then objects to the implementation of
Sec. 3.4 of the assailed Department Circular, which
provides that
3.4 Financial transactions of the Federation shall
follow the provisions of the government auditing
code (PD 1445) i.e. government funds shall be
spent or used for public purposes; trust funds shall
be available and may be spent only for the specific
purpose for which the trust was created or the
funds received; fiscal responsibility shall, to the
greatest extent, be shared by all those exercising
authority over the financial affairs, transactions, and
operations of the federation; disbursements or
dispositions of government funds or property shall
invariably bear the approval of the proper officials.
Since we have also previously determined that VFP
funds are public funds, there is likewise no reason
to declare this provision invalid. Section 3.4 is

correct in requiring the VFP funds to be used for

public purposes, but only insofar the term "public
purposes" is construed to mean "public purposes
enumerated in Rep. Act No. 2640."
Having in their possession public funds, the officers
of the VFP, especially its fiscal officers, must indeed
share in the fiscal responsibility to the greatest
extent.
As to petitioners allegation that VFP was intended
as a self-governing autonomous body with a
Supreme Council as governing authority, we find
that the provisions of Rep. Act No. 2640 concerning
the control and supervision of the Secretary of
National Defense clearly withholds from the VFP
complete autonomy. To say, however, that such
provisions render the VFP inutile is an
exaggeration. An office is not rendered inutile by
the fact that it is placed under the control of a
higher office. These subordinate offices, such as
the executive offices under the control of the
President, exercise discretion at the first instance.
While their acts can be altered or even set aside by
the superior, these acts are effective and are
deemed the acts of the superior until they are
modified. Surely, we cannot say that the offices of
all the Department Secretaries are worthless
positions.
In sum, the assailed DND Department Circular No.
04 does not supplant nor modify and is, on the
contrary, perfectly in consonance with Rep. Act No.
2640. Petitioner VFP is a public corporation. As
such, it can be placed under the control and
supervision of the Secretary of National Defense,
who consequently has the power to conduct an
extensive management audit of petitioner
corporation.
WHEREFORE, the Petition is hereby DISMISSED
for lack of merit. The validity of the Department of
National Defense Department Circular No. 04 is
AFFIRMED.
SO ORDERED.

Republic of the Philippines

SUPREME COURT

Manila
SECOND DIVISION
NATIONAL ELECTRIFICATION G.R. No. 158761
ADMINISTRATION,
Petitioner, Present:
QUISUMBING, J., Chairperson,
CARPIO,
- versus - CARPIO MORALES,
TINGA, and
VELASCO, JR., JJ.
VICTORIANO B. GONZAGA, Promulgated:
Respondent.
December 4, 2007
x----------------------------------------------------------------------------------------x
DECISION
VELASCO, JR., J.:
For review under Rule 45 are the March 6,
2003 Decision[1] and June 10, 2003 Resolution[2] of
the Court of Appeals (CA) in CA-G.R. SP No.
68769, which dismissed petitioners appeal of the
July 23, 2001 Order[3] of the Pagadian City
Regional Trial Court (RTC), Branch 21 in Civil Case
No. 4282-2K, and denied petitioners Motion for
Reconsideration, respectively.
On November

13,

2000,

respondent

Victoriano B. Gonzaga filed his Certificate of

Candidacy for membership in the Board of
Directors of

Zamboanga

del Sur

II

Electric

Cooperative, Inc., District II (ZAMSURECO). Later

that day, the screening committee resolved to
disqualify respondent because his spouse was an
incumbent member of the Sangguniang Bayan of
Diplahan, Zamboanga del Sur. Based on the
Electric

Cooperative

Election

Code

(ECEC),

promulgated by petitioner National Electrification

Administration (NEA), a candidate whose spouse
occupies an elective government position higher

than Barangay Captain is prohibited to run as

exhaustion of administrative remedies cannot be

director of an electric cooperative. ZAMSURECOs

invoked in the instant case since the guidelines

by-laws, however, do not provide for such ground

prescribing the administrative remedy is a subject

for disqualification.[4]

matter of the ECEC, which is at issue, and is

exactly what is being sought to be invalidated.[6]

On November 21, 2000, respondent filed a

Petition for Prohibition and Damages, docketed as

On December 12, 2000, respondent filed a

Civil Case No. 4282-2K with the Pagadian City

motion to withdraw the amended petition, and to

RTC.

admit a second amended petition that impleaded

NEA as indispensable party. Respondent also
ZAMSURECO filed a Motion to Dismiss and

averred that the ECEC was null and void because it

Answer on November 24, 2000, which the RTC

had not been published. On December 20, 2000,

denied. However, it issued a temporary restraining

the RTC admitted the second amended petition,

order, ordering ZAMSURECOs officials to refrain

issued a writ of preliminary injunction to prevent the

from conducting the election for directorship set

conduct

onDecember 2, 2000.

summons to NEA, and required NEA to comment if

of

election

for

directorship,

issued

the ECEC was published in any newspaper of

The RTC said that the petition was

general circulation.[7]

dismissible because of the failure of respondent to

exhaust all administrative remedies, as required by

On January 29, 2001, NEA filed a motion for

Section 2, 2.C of the ECEC Guidelines on the

extension

Conduct

Electric

subsequently on April 10, 2001, a Motion for Leave

Cooperative. The section required that a protest

to Admit Pleading to which a Motion to Dismiss was

arising from disqualification shall be filed with

attached. NEA questioned the jurisdiction of the

the screening committee in not less than FIVE (5)

RTC and alleged that respondent failed to exhaust

days before the election. The screening committee

administrative remedies.[8]

of

District

Elections

for

of

time

to

file

an

answer,

and

shall decide the protest within FORTY-EIGHT (48)

hours from receipt thereof. Failure of the applicant

In its July 23, 2001 Order,[9] the RTC denied

to file his/her protest within the above-cited period

petitioners Motion to Dismiss for being filed out of

shall be deemed a waiver of his right to protest.[5]

time. More importantly, it noted NEAs failure to

state whether the ECEC was indeed published in a

As observed by the RTC, respondent had

urgently

filed

21,

New Civil Code and the Administrative Code of

2000 because the election sought to be restrained

1987. The RTC said the failure rendered the ECEC

was going to be held on December 2, 2000 and

null and void. As regards the lack of jurisdiction and

November

the

non-exhaustion of administrative remedies, the

to

RTC noted that NEA erroneously relied on Sec. 59

20

circumstances,

the

petition

was

respondent

on November

newspaper of general circulation as required by the

holiday. Under
had

little

time

exhaust the remedy in Sec. 2 of the Guidelines,

of

such that an exception could be made. More

misapplied the cases it cited.

importantly, according to the RTC, the rule on

Presidential

Decree

No.

(PD)

269

and

According to the RTC, Sec. 59 of PD 269

refers to order, ruling or decision of the NEA in the
exercise of NEAs quasi-judicial functions. And the

WHETHER OR NOT THE COURT

OF
APPEALS
ERRED
IN
UPHOLDING THE TRIAL COURTS
NULLIFICATION OF THE ECEC

RTC noted that Secs. 51 to 58 refer to hearings,

investigations, and procedures. On the other hand,
the validity of the ECEC, subject of the instant
petition, was an exercise of NEAs quasi-legislative
function or rule-making authority.
Further, according to the RTC, NEA took
Sec. 58 of PD 269 out of context when it said Sec.
58 dealt with the administrative remedy available to
petitioner. It said that Sec. 58 presupposed a ruling
or decision of the NEA and there was none in the
case before it. The RTC ruled in favor of Gonzaga,
and ordered ZAMSURECO to accept Gonzagas
certificate of candidacy for director.[10] The RTC
denied NEAs motion for reconsideration.
The CA Ruled that the Courts Have Jurisdiction
Over
Issues on Legality of Codes
Aggrieved,

petitioner

appealed

to

the

CA. The CA denied due course and dismissed the

petition. It said that NEA was not exercising its
quasi-judicial

powers

but

its

rule-making

authority. In the case before the trial court, the CA

stressed that the issue involved the interpretation of
the ECEC, and to this extent, NEA had no
jurisdiction because the issue is within the province
of the courts.
The CA denied petitioners Motion for
Reconsideration

in

its June

2003 Resolution. Hence, we have this petition.

The Issues
WHETHER OR NOT THE COURT
OF APPEALS ERRED IN NOT
APPLYING SECTION 59 OF P.D.
269

10,

Issues Involving NEAs Rule-Making Authority

Are Cognizable by Regular Courts
The petition has no merit.
Sec. 59 of PD 269 provides:
SEC. 59. Court Review.The
Supreme Court is hereby given
jurisdiction to review any order,
ruling or decision of the NEA and to
modify or set aside such order, ruling
or decision when it clearly appears
that there is no evidence before the
NEA to support reasonably such
order, ruling or decision, or that the
same is contrary to law, or that it
was without the jurisdiction of the
NEA. The evidence presented to the
NEA, together with the record of the
proceedings before the NEA, shall
be certified by the NEA to the
Supreme Court. Any order, ruling or
decision of the NEA may likewise be
reviewed by the Supreme Court
upon writ of certiorari in proper
case. The procedure for review,
except as herein provided, shall be
presented by rules of the Supreme
Court. Any order or decision of the
NEA may be reviewed on the
application of any person or public
service entity aggrieved thereby and
who was a party in the subject
proceeding,
by
certiorari
in
appropriate cases or by a petition for
review, which shall be filed within
thirty (30) days from the notification
of the NEA order, decision or ruling
on reconsideration. Said petition
shall be placed on file in the office of
the Clerk for the Supreme Court who
shall furnish copies thereof to the
NEA and other interested parties.

Petitioner

argues

that

based

on

the

foregoing provision, only the Supreme Court has

the authority to review the acts of NEA as an

the Philippines LawCenter, it offered no proof of

administrative body with adjudicative and rule-

publication

making power. It cited NEA v. Mendoza, using the

newspaper

Courts pronouncement that:

compliance with the requirement of publication, the

in
of

the Official
general

Gazette nor

in

circulation. Without

rules and regulations contained in the ECEC

[T]he power of judicial review of

NEAs order or decision pertains to
the Supreme Court as decreed in
Section 59 of P.D. 269 which vests
specifically on
the
Supreme
Court the jurisdiction to review any
order, ruling or decision of the NEA
and to modify or set aside such
orders, rulings or decisions.[11]

cannot be enforced and implemented.

Article 2 of the New Civil Code provides that
laws shall take effect after fifteen (15) days
following the completion of their publication in
the Official Gazette or in a newspaper of general
circulation in the Philippines, unless it is otherwise

It is obvious that Sec. 59 of PD 269 refers to

order, ruling or decision of NEA. What is being
challenged in this case is the decision of the
screening committee of ZAMSURECO to disqualify
respondent. Likewise assailed is the validity of the
ECEC, particularly, whether the requirement of
publication was complied with. The ECEC was
issued by NEA pursuant to its rule-making authority,
not its quasi-judicial function. Hence, the issue
regarding

the

controversy

over

respondents

disqualification and the question on the ECECs

validity are within the inherent jurisdiction of regular

provided.
Executive Order No. 292, otherwise known
as the Administrative Code of 1987, reinforced the
requirement

of

publication

and

outlined

procedure, as follows:
Sec.
3. Filing. (1)
Every
Agency shall file with the University
of the Philippines Law Center three
(3) Certified copies of every rule
adopted by it. Rules in force on the
date of effectivity of this Code which
are not filed within three (3) months
from that date shall not thereafter be
the basis of any sanction against
any party or persons.

courts to review. Petitioners reliance on NEA is

misplaced. The subject in that case was the
electricity rates charged by a cooperative, a matter
which is clearly within NEAs jurisdiction. The issue
in the present petition, however, centers on the
validity of NEAs rules in light of the publication
requirements of the Administrative Code and New
Civil Code. The present issue is cognizable by
regular courts.
With regard to the second issue, we find no
error in the appellate and trial courts nullification of
the ECEC. The CA correctly observed that while
ZAMSURECO complied with the requirements of
filing

the

code

with

the

University

of

(2) The Records Officer of

the agency, or his equivalent
functionary, shall carry out the
requirements of this section under
pain of disciplinary action.
(3) A permanent register of
all rules shall be kept by the issuing
agency and shall be open to public
inspection.
Sec. 4. Effectivity In addition
to other rule-making requirements
provided by law not inconsistent with
this Book, each rule shall become
effective fifteen (15) days from the
date of filing as above provided
unless a different date is fixed by
law, or specified in this rule.

the

Sec. 18. When Laws Take

Effect Laws shall take effect after
Fifteen (15) days following the
completion of their publication in the
Official Gazette or in a newspaper of
general circulation, unless it is
otherwise provided.

We have already emphasized and clarified

the requirement of publication in this Courts
Resolution in Taada v. Tuvera:
We hold therefore that all statutes,
including those of local application
and private laws, shall be published
as a condition for their effectivity
which shall begin fifteen (15) days
after publication unless a different
effectivity date is fixed by the
legislature.
Covered by this rule are presidential
decrees and executive orders
promulgated by the President in the
exercise of legislative powers
whenever the same are validly
delegated by the legislature or, at
present, directly conferred by the
Constitution. Administrative rules
and regulations must also be
published if their purpose is to
enforce or implement existing law
pursuant
also
to
a
valid
delegation.
Interpretative regulations and those
merely internal in nature, that is,
regulating only the personnel of the
administrative agency and not the
public,
need
not
be
published. Neither is publication
required of the so-called letters of
instructions issued by administrative
superiors concerning the rules or
guidelines to be followed by their
subordinates in the performance of
their duties. (Emphasis supplied.) [12]

In the case at bar, the ECEC was issued by

petitioner pursuant to its rule-making authority
provided in PD 269, as amended, particularly Sec.
24:
Section
24.
Board
of
Directors. (a) The Management of a
Cooperative shall be vested in its
Board, subject to the supervision
and control of NEA which shall have
the right to be represented and to
participate in all Board meetings and
deliberations and to approve all
policies and resolutions.
The
composition,
qualifications,
the
manner
of
elections and filling of vacancies, the
procedures for holding meetings and
other similar provisions shall be
defined in the By-laws of the
Cooperative subject to NEA policies,
rules and regulations x x x.

The

ECEC

applies

to

all

electric

cooperatives in the country. It is not a mere internal

memorandum,

interpretative

regulation,

or

instruction to subordinates. Thus, the ECEC should

comply with the requirements of the Civil Code and
the Administrative Code of 1987. In previous cases
involving the election of directors for electric
cooperatives, the validity of the ECEC was not put
in issue.The ECEC then enjoyed the presumption
of validity. In this case, however, respondent
directly questioned the validity of the ECEC in his
second amended petition. The trial court thus
required petitioner to show proof of publication of
the ECEC. Petitioner could have easily provided
such proof had the ECEC actually been published

reiterated

in the Official Gazette or newspaper of general

in Dadole v. Commission on Audit,[13] De Jesus v.

circulation in the country. This simple proof could

Commission on Audit,[14] andPhilippine International

have immediately laid this case to rest. Petitioners

Trading Corporation v. Commission on Audit.[15]

failure to do so only implies that the ECEC was not

The

aforequoted

ruling

was

published accordingly, a fact supported by the

certification from the National Printing Office.
Considering that the screening committee of
Lastly, petitioner avers that a petition for

the board has excluded respondent from being

mandamus and prohibition should not have been

elected

as

board

member

of

ZAMSURECO

resorted to by respondent. The proper recourse,

because of the latters improper implementation of

according to petitioner, is a petition for declaratory

the code, a petition for mandamus and prohibition

relief. Petitioner miserably errs on this point. Rule

is the proper recourse.

63 on declaratory relief states:

WHEREFORE,
Section 1. Who may file
petition.Any person interested under
a deed, will, contract or other written
instrument, or whose rights are
affected by a statute, executive
order or regulation, ordinance, or
any other governmental regulation
may, before breach or violation
thereof, bring an action in the
appropriate Regional Trial Court to
determine
any
question
of
construction or validity arising, and
for a declaration of his rights or
duties thereunder.

we DENY the

petition,

and AFFIRM IN TOTO the March 6, 2003 Decision

and June 10, 2003 Resolution in CA-G.R. SP No.
68769. Costs against petitioner.
SO ORDERED.
SECOND DIVISION
SECURITIES AND EXCHANGE G.R. No. 164026
COMMISSION,
Petitioner, Present:
QUISUMBING, J.,

As stated above, a requirement under Rule

63 is that the petition for declaratory relief must be
filed before any breach or violation the questioned
document may cause. In the instant case, it cannot
be gainsaid that a breach has not yet occurred
since an actual dispute has already arisen between
ZAMSURECO

and

respondentthe

screening

committee of the cooperative on the erroneous

Chairperson,
- versus - CARPIO MORALES,
TINGA,
CHICO-NAZARIO, and
VELASCO, JR., JJ.,
GMA NETWORK, INC.,
Respondent. Promulgated:
December 23, 2008
x---------------------------------------------------------------------------x

implementation of a code whose legality and

DECISION

implementation is being questioned.

On the other hand, it is familiar and
fundamental doctrine that a writ of prohibition or
mandamus may issue when x x x a board
unlawfully excludes another from x x x enjoyment of
a right or office to which such other is entitled x x x.
[16]

TINGA, J.:
Petitioner

Securities

and

Exchange

Commission (SEC) assails the Decision[1] dated

February 20, 2004 of the Court of Appeals in CAG.R. SP No. 68163, which directed that SEC
Memorandum Circular No. 1, Series of 1986 should

be the basis for computing the filing fee relative to

GMA Network, Inc.s (GMAs) application for the
amendment of its articles of incorporation for
purposes of extending its corporate term.

The undisputed facts as narrated by the

appellate court are as follows:
On August 19, 1995, the petitioner,
GMA NETWORK, INC., (GMA, for
brevity), a domestic corporation,
filed an application for collective
approval of various amendments to
its Articles of Incorporation and ByLaws with the respondent Securities
and Exchange Commission, (SEC,
for
brevity). The
amendments
applied for include, among others,
the change in the corporate name of
petitioner
from
Republic
Broadcasting System, Inc. to GMA
Network, Inc. as well as the
extension of the corporate term for
another fifty (50) years from and
after June 16, 2000.
Upon such filing, the petitioner had
been assessed by the SECs
Corporate and Legal Department a
separate filing fee for the application
for extension of corporate term
equivalent to 1/10 of 1% of its
authorized capital stock plus 20%
thereof
or
an
amount
of P1,212,200.00.
On September 26, 1995, the
petitioner informed the SEC of its
intention to contest the legality and
propriety of the said assessment.
However, the petitioner requested
the SEC to approve the other
amendments being requested by
the petitioner without being deemed
to have withdrawn its application for
extension of corporate term.
On October 20, 1995, the petitioner
formally protested the assessment
amounting to P1,212,200.00 for its
application
for
extension
of
corporate term.

On February 20, 1996, the SEC

approved the other amendments to
the
petitioners
Articles
of
Incorporation, specifically Article 1
thereof referring to the corporate
name of the petitioner as well as
Article 2 thereof referring to the
principal purpose for which the
petitioner was formed.
On March 19, 1996, the petitioner
requested
for
an
official
opinion/ruling from the SEC on the
validity and propriety of the
assessment for application for
extension of its corporate term.
Consequently, the respondent SEC,
through Associate Commissioner Fe
Eloisa C. Gloria, on April 18, 1996,
issued its ruling upholding the
validity
of
the
questioned
assessment, the dispositive portion
of which states:
In light of the foregoing, we
believe that the questioned
assessment is in accordance with
law. Accordingly, you are hereby
required to comply with the
required filing fee.
An
appeal
from
the aforequoted ruling
of
the
respondent SEC was subsequently
taken by the petitioner on the
ground that the assessment of filing
fees for the petitioners application
for extension of corporate term
equivalent to 1/10 of 1% of the
authorized capital stock plus 20%
thereof is not in accordance with
law.
On September 26, 2001, following
three (3) motions for early resolution
filed
by
the
petitioner,
the
respondent SEC En Banc issued
the assailed order dismissing the
petitioners
appeal,
the dispositive portion
of
which
provides as follows:

WHEREFORE, for lack of merit,

the instant Appeal is hereby
dismissed.

charges. The filing fees required by it are allegedly

SO ORDERED.[2]

essential to its supervisory and regulatory functions.

uniformly imposed on the transacting public and are

The fees are not a form of penalty or sanction and,

In its petition for review[3] with the Court of Appeals,

therefore, require no publication.

GMA argued that its application for the extension of

its corporate term is akin to an amendment and not
to a filing of new articles of incorporation. It further
averred that SEC Memorandum Circular No. 2,
Series of 1994, which the SEC used as basis for
assessing P1,212,200.00 as filing fee for the
extension of GMAs corporate term, is not valid.

For

its

part,

GMA points

out

in

its

Memorandum,[6] dated September 23, 2005, that

SEC Memorandum Circular No. 1, Series of 1986
refers to the filing fees for amended articles of
incorporation where the amendment consists of
extending the term of corporate existence. The
questioned circular, on the other hand, refers only to

The appellate court agreed with the SECs

filing fees for articles of incorporation. Thus, GMA

submission that an extension of the corporate term

argues that the former circular, being the one that

is a grant of a fresh license for a corporation to act

specifically treats of applications for the extension of

as a juridical being endowed with the powers

corporate term, should apply to its case.

expressly bestowed by the State. As such, it is not

Assuming that Memorandum Circular No. 2,

an ordinary amendment but is analogous to the

Series of 1994 is applicable, GMA avers that the

filing of new articles of incorporation.

latter did not take effect and cannot be the basis for

However, the Court of Appeals ruled that

the imposition of the fees stated therein for the

Memorandum Circular No. 2, Series of 1994 is

reasons that it was neither filed with the University

legally invalid and ineffective for not having been

of the Philippines Law Center nor published either

published in accordance with law. The challenged

in the Official Gazette or in a newspaper of general

memorandum circular, according to the appellate

circulation as required under existing laws.

court, is not merely an internal or interpretative rule,

It should be mentioned at the outset that the

but affects the public in general. Hence, its

authority of the SEC to collect and receive fees as

publication is required for its effectivity.

authorized by law is not in question.[7] Its power to

The appellate court denied reconsideration

collect fees for examining and filing articles of

incorporation and by-laws and amendments thereto,

in a Resolution dated June 9, 2004.

certificates of increase or decrease of the capital

In its Memorandum[5] dated September 6,

stock,

among

others,

is

recognized. Likewise

2005, the SEC argues that it issued the questioned

established is its power under Sec. 7 of P.D. No.

memorandum

902-A to recommend to the President the revision,

delegated

circular

legislative

in the exercise of
power

to

fix

fees

its
and

alteration, amendment or adjustment of the charges

imposing new fees and charges and deleting the

which it is authorized to collect.

maximum filing fee set forth in SEC Circular No. 1,

The subject of the present inquiry is not the

Series of 1986, such that the fee for the filing of

authority of the SEC to collect and receive fees and

articles of incorporation became 1/10 of 1% of the

charges, but rather the validity of its imposition on

authorized capital stock plus 20% thereof but not

the basis of a memorandum circular which, the

less than P500.00.

Court of Appeals held, is ineffective.

A reading of the two circulars readily reveals

Republic Act No. 3531 (R.A. No. 3531)

that they indeed pertain to different matters, as

provides that where the amendment consists in

GMA points out. SEC Memorandum Circular No. 1,

extending the term of corporate existence, the SEC

Series of 1986 refers to the filing fee for the

shall be entitled to collect and receive for the filing

amendment of articles of incorporation to extend

of the amended articles of incorporation the same

corporate life, while Memorandum Circular No. 2,

fees collectible under existing law as the filing of

Series of 1994 pertains to the filing fee for articles of

articles of incorporation.[8] As is clearly the import of

incorporation. Thus, as GMA argues, the former

this law, the SEC shall be entitled to collect and

circular, being squarely applicable and, more

receive the same fees it assesses and collects both

importantly, being more favorable to it, should be

for the filing of articles of incorporation and the filing

followed.

of

an

amended

articles

of

incorporation

for

What this proposition fails to consider,

purposes of extending the term of corporate

however, is the clear directive of R.A. No. 3531 to

existence.

impose the same fees for the filing of articles of

The SEC, effectuating its mandate under

the aforequoted law

laws,

incorporation to reflect an extension of corporate

issued SEC Memorandum Circular No. 1, Series

term. R.A. No. 3531 provides an unmistakable

of 1986, imposing the filing fee of 1/10 of 1% of the

standard which should guide the SEC in fixing and

authorized capital stock but not less than P300.00

imposing its rates and fees. If such mandate were

nor more thanP100,000.00 for stock corporations,

the only consideration, the Court would have been

and 1/10 of 1% of the authorized capital stock but

inclined to rule that the SEC was correct in

not less than P200.00 nor more thanP100,000.00

imposing

for stock corporations without par value, for the

questioned memorandum circular, GMAs argument

filing of amended articles of incorporation where the

notwithstanding.

[9]

and

other

pertinent

incorporation and the filing of amended articles of

amendment consists of extending the term of

corporate existence.
Several

years

the

filing

fees

as

outlined

in

the

However, we agree with the Court of

Appeals that the questioned memorandum circular

after,

the

SEC

issued

is invalid as it does not appear from the records that

Memorandum Circular No. 2, Series of 1994,

it has been published in the Official Gazette or in a

newspaper of general circulation. Executive Order

In Philsa International
Services

provides that laws shall take effect after fifteen days

Employment,[13] Memorandum Circular No. 2, Series

following the completion of their publication either in

of 1983 of the Philippine Overseas Employment

the Official Gazette or in a newspaper of general

Administration, which provided for the schedule of

circulation in the Philippines, unless it is otherwise

placement and documentation fees for private

provided.

employment agencies or authority holders, was

on the publication requirement, held:

v.

Secretary

of

Labor

and

No. 200, which repealed Art. 2 of the Civil Code,

In Taada v. Tuvera,[10] the Court, expounding

Corp.

Placement

and

struck down as it was not published or filed with the

National Administrative Register.
The questioned memorandum circular, it

We hold therefore that

all statutes, including those of local
application and private laws, shall
be published as a condition for
theireffectivity, which shall begin
fifteen days after publication unless
a different effectivity date is fixed by
the legislature.

should be emphasized, cannot be construed as

simply interpretative of R.A. No. 3531. This
administrative issuance is an implementation of the
mandate of R.A.
No. 3531 and indubitably regulates and affects the
public at large. It cannot, therefore, be considered a

Covered by this rule are

presidential decrees and executive
orders
promulgated
by
the
President in the exercise of
legislative powers whenever the
same are validly delegated by the
legislature, or, at present, directly
conferred by the Constitution.
Administrative rules and regulations
must also be published if their
purpose is to enforce or implement
existing law pursuant also to a valid
delegation.
Interpretative regulations and those
merely internal in nature, that is, regulating
only the personnel of the administrative
agency and not the public, need not be
published. Neither is publication required of
the so-called letters of instructions issued
by administrative superiors concerning the
rules or guidelines to be followed by their
subordinates in the performance of their
duties.[11]
The

questioned

memorandum

mere

rule

or

regulation,

nor

an

interpretation of the law, but a rule which must be

declared ineffective as it was neither published nor
filed with the Office of the National Administrative
Register.
A

related

consideration

of

factor
the

which

questioned

precludes
issuance

as

interpretative in nature merely is the fact the SECs

assessment

amounting

to P1,212,200.00

is

exceedingly unreasonable and amounts to an

imposition. A filing fee, by legal definition, is that
charged by a public official to accept a document for
processing. The fee should be just, fair, and
circular,

furthermore, has not been filed with the Office of the

National Administrative Register of the University of
the Philippines Law Center as required in the
Administrative Code of 1987.[12]

internal

proportionate to the service for which the fee is

being collected, in this case, the examination and
verification of the documents submitted by GMA to
warrant an extension of its corporate term.

Rate-fixing is a legislative function which

WHEREFORE, the petition is DENIED. The

concededly has been delegated to the SEC by R.A.

Decision of the Court of Appeals in CA-G.R. SP No.

No. 3531 and other pertinent laws. The due process

68163, dated February 20, 2004, and its Resolution,

clause, however, permits the courts to determine

dated

whether the regulation issued by the SEC is

pronouncement as to costs.

reasonable and within the bounds of its rate-fixing

authority and to strike it down when it arbitrarily
infringes on a persons right to property.

June

9,

2004,

SO ORDERED.

are

AFFIRMED.

No