BOARD OF TRUSTEES GSIS V.

VELASCO

FACTS:

On May 23, 2002, respondents Albert Velasco and Mario Molina, GSIS employees, were
charged with grave misconduct and were placed in preventive suspension for 90 days for
the alleged participation in the demonstration held by some GSIS employees for the removal
of GSIS president Winston Garcia from his position.

On Apr 4, 2003, respondent Molina requested for his step increment and was denied by GSIS
VP citing the Board resolution no. 372 which provides for the withholding of step increment
for those employees under preventive suspension. Respondents additionally asked for their
Christmas raffle benefits provided for in Resolution no. 306, but was similarly denied. A third
resolution was issued, resolution no. 197, adopting the policy where employees with pending
administrative case shall be disqualified from various benefits including step increment.

Hence, the petition for prohibition and writ of prelim injunction was filed by the respondents
before the RTC as they were denied of the benefits that they were entitled to and the Board
violated their right to be heard. They prayed the restraint and prohibition of the three
resolutions argued that those be rendered ineffective as they failed to register it with the UP
law center.

RTC then granted respondents petition and declared the resolutions 372 and 197 null and
void. The trial court also found that the assailed resolutions were not registered with the UP
Law Center, per certification of the Office of the National Administrative Register (ONAR),
thus, declaring that the assailed resolutions have not become effective. (Walang declaration
for Reso 306 na re: Christmas benefits so pag angat sa SC nidisregard sya)

ISSUE:

1. Whether internal rules and regulations need not require publication with the Office of
the National [Administrative] Register for their effectivity

HELD:

No. Only those of general or of permanent character are to be filed. According to the UP Law
Centers guidelines for receiving and publication of rules and regulations, 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 filed with the UP Law Center.
Resolution No. 372 was about the new GSIS salary structure, Resolution No. 306 was about
the authority to pay the 2002 Christmas Package, and Resolution No. 197 was about the
GSIS merit selection and promotion plan. Clearly, the assailed resolutions pertained only to
internal rules meant to regulate the personnel of the GSIS. There was no need for the
publication or filing of these resolutions with the UP Law Center.
BPI LEASING C ORP VS. CA

FACTS:

BLC paid P 1,139,041.49 contractors percentage tax (CPT hereinafter bes) for the calendar
year 1986 which is 4 % of its gross rentals from equipment leasing. On Nov. 10, 1986, CIR
issued Revenue Regulation 19-86 subjecting finance and leasing companies to gross receipt
tax (GRT hereinafter) of 5%-3%-1% on actual income earned which releases the liability of
companies such as BLC for contractors percentage tax but instead subject them to gross
receipts tax. After re-computation, BLC arrived at the amt of P361, 924.44 as its GRT. On
Apr 11, 1988, BLC filed a claim for refund with CIR for the amount of P 777,117.05
(difference of the two figures mentioned above, CPT less GRT) since it should have paid for
GRT instead of what was earlier paid which is the CPT.

BLC filed a petition for review with CTA which was dismissed and denied as the said
Resolution 19-86 may only be applied prospectively covering leases on or after Jan 1, 1987.
A motion for consideration was filed and was denied which lead BLC to file an appeal before
the CA but affirmed the decision of CTA.

Hence, the present petition.

BLCs contention: Court of Appeals and the CTA erred in not ruling that Revenue Regulation
19-86 may be applied retroactively so as to allow BLCs claim for a refund of P777,117.05.

CTAs contention: the provision on the date of effectivity of Revenue Regulation 19-86 is
clear and unequivocal, leaving no room for interpretation on its prospective application.

ISSUES:

1. Whether revenue regulation 19-86, as amended, is legislative or interpretative in

nature.

2. Whether revenue regulation 19-86, as amended, is prospective or retroactive in its

application.

HELD:

1st Issue

BLC attempts to convince the Court that Revenue Regulation 19-86 is legislative rather
than interpretative in character and hence, should retroact to the date of effectivity of
the law it seeks to interpret.

Administrative issuances may be distinguished according to their nature and substance:

legislative and interpretative. A legislative rule is in the matter of subordinate legislation,
designed to implement a primary legislation by providing the details thereof. An
 interpretative rule, on the other hand, is designed to provide guidelines to the law which
the administrative agency is in charge of enforcing. [15]

The Court finds the questioned revenue regulation to be legislative in nature. Section 1
of Revenue Regulation 19-86 plainly states that it was promulgated pursuant to Section
277 of the NIRC. Section 277 (now Section 244) is an express grant of authority to the
Secretary of Finance to promulgate all needful rules and regulations for the effective
enforcement of the provisions of the NIRC. In Paper Industries Corporation of the
Philippines v. Court of Appeals,[16] the Court recognized that the application of Section
277 calls for none other than the exercise of quasi-legislative or rule-making
authority. Verily, it cannot be disputed that Revenue Regulation 19-86 was issued
pursuant to the rule-making power of the Secretary of Finance, thus making it legislative,
and not interpretative as alleged by BLC

2nd Issue

After upholding the validity of Revenue Regulation 19-86, the Court now resolves
whether its application should be prospective or retroactive.

The principle is well entrenched that statutes, including administrative rules and
regulations, operate prospectively only, unless the legislative intent to the contrary is
manifest by express terms or by necessary implication. [19] In the present case, there is no
indication that the revenue regulation may operate retroactively. Furthermore, there is an
express provision stating that it shall take effect on January 1, 1987, and that it shall be
applicable to all leases written on or after the said date. Being clear on its prospective
application, it must be given its literal meaning and applied without further
interpretation.[20] Thus, BLC is not in a position to invoke the provisions of Revenue
Regulation 19-86 for lease rentals it received prior to January 1, 1987.

GUTIERREZ VS DBM

FACTS:

RA 6758, or the Compensation and Position Classification Act of 1989 aimed to rationalize
the compensation of govt employees and directed the consolidation of allowances and other
compensation already being enjoyed into their standard salary rates. DBM thereafter issued
National Compensation Circular 59 on Sep 30, 89 covering offices of national govt, SUCs,
and the said Circular included COLA and Inflation Connected Allowance (ICA) in those
allowances and additional compensation which were deemed integrated in the basic salary
rate. NCC 59 was re-issued and published the same only on May3 04. DBM also issued
the counterpart of NCC 59, which is the Corporate Compensation Circular (CCC) 10 which
covered all GOCCs and government financial institutions. It was also re-issued and first
published on a later date. Budget Circular 2001-03, also issued by DBM, clarified those
exempted allowances under RA 6758 which do not include COLA and ICA, thus payment of
such allowances outside the basic salary were considered unauthorized.

On Oct 26, 2005, DBM issued National Budget Circular which provided that all Supreme
Court Rulings on integration of allowances, including COLA, of govt employees under RA
6758 applied only to specific GOCCs. COLA and ICA shall remain prohibited until otherwise
provided by law or ruled by the Court. Those officials who authorized the grant of COLA and
other allowances shall be held liable as provided also in the said Circular.

Hence, the consolidated petitions questioning inclusion of certain allowances and fringe
benefits specifically the COLA and ICA into the standardized salary rates

ISSUES:

1. Whether the COLA should be deemed integrated into the standardized salary rates of
the concerned government employees by virtue of Section 12 of R.A. 6758;
2. Whether the non-publication of NCC 59 dated September 30, 1989 in the Official
Gazette or newspaper of general circulation nullifies the integration of the COLA into
the standardized salary rates; and

HELD:

1st Issue: YES

Congress has endowed administrative agencies like respondent DBM with the power to
make rules and regulations to implement a given legislation and effectuate its
policies. Such power is, however, necessarily limited to what the law
provides. Implementing rules and regulations cannot extend the law or expand its
coverage, as the power to amend or repeal a statute belongs to the
legislature. Administrative agencies implement the broad policies laid down in a law by
filling in only its details. The regulations must be germane to the objectives and purposes
of the law and must conform to the standards prescribed by law.

In any event, the Court finds the inclusion of COLA in the standardized salary
rates proper. In National Tobacco Administration v. Commission on Audit, the Court
ruled that the enumerated fringe benefits in items (1) to (6) have one thing in common
they belong to one category of privilege called allowances which are usually granted to
officials and employees of the government to defray or reimburse the expenses incurred
in the performance of their official functions. Consequently, if these allowances are
consolidated with the standardized salary rates, then the government official or
employee will be compelled to spend his personal funds in attending to his duties. On the
other hand, item (7) is a catch-all proviso for benefits in the nature of allowances similar
to those enumerated.
 Clearly, COLA is not in the nature of an allowance intended to reimburse expenses
incurred by officials and employees of the government in the performance of their official
functions. It is not payment in consideration of the fulfillment of official duty. As defined,
cost of living refers to the level of prices relating to a range of everyday items or the cost
of purchasing those goods and services which are included in an accepted standard level
of consumption. Based on this premise, COLA is a benefit intended to cover increases in
the cost of living. Thus, it is and should be integrated into the standardized salary rates.

2nd Issue: NO

Petitioners argue that since CCC 10 dated October 2, 1989 covering all government-
owned or controlled corporations and government financial institutions was ineffective
until its re-issuance and publication on March 16, 1999, its counterpart, NCC 59 dated
September 30, 1989 covering the offices of the national government, state universities
and colleges, and local government units should also be regarded as ineffective until its
re-issuance and publication on May 3, 2004. Thus, the COLA should not be deemed
integrated into the standardized salary rates from 1989 to 2004. Respondents counter
that the fact that NCC 59 was not published should not be considered as an obstacle to
the integration of COLA into the standardized salary rates. Accordingly, Budget Circular
2001-03, insofar as it reiterates NCC 59, should not be treated as ineffective since it
merely reaffirms the fact of consolidation of COLA into the employees salary as
mandated by Section 12 of R.A. 6758.

It is a settled rule that publication is required as a condition precedent to

the effectivity of a law to inform the public of its contents before their rights and
interests are affected by the same. Administrative rules and regulations must also be
published if their purpose is to enforce or implement existing law pursuant also to a valid
delegation.

Nonetheless, as previously discussed, the integration of COLA into the

standardized salary rates is not dependent on the publication of CCC 10 and
NCC 59. This benefit is deemed included in the standardized salary rates of government
employees since it falls under the general rule of integration all allowances.

More importantly, the integration was not by mere legal fiction since it was factually
integrated into the employees salaries. Records show that the government employees
were informed by their respective offices of their new position titles and their
corresponding salary grades when they were furnished with the Notices of Position
Allocation and Salary Adjustment (NPASA). The NPASA provided the breakdown of the
employees gross monthly salary as of June 30, 1989 and the composition of his
 standardized pay under R.A. 6758. Notably, the COLA was considered part of the
employees monthly income.

In truth, petitioners never really suffered any diminution in pay as a consequence of the
consolidation of COLA into their standardized salary rates. There is thus nothing in these
cases which can be the subject of a back pay since the amount corresponding to COLA
was never withheld from petitioners in the first place.

Consequently, the non-publication of CCC 10 and NCC 59 in the Official Gazette

or newspaper of general circulation does not nullify the integration of COLA
into the standardized salary rates upon the effectivity of R.A. 6758. As the
Court has said in Philippine International Trading Corporation v. Commission
on Audit the validity of R.A. 6758 should not be made to depend on the
validity of its implementing rules.

SALAO

1. ABAKADA Guro Party List v. Purisima, G.R. No. 166715, August 14, 2008

Lessons: (1) Clarifying the 2 tests. (2) It is unlawful for congress to exercise veto on the IRRs of an
administrative agency.

SCs words:

On the 2 tests: Two tests determine the validity of delegation of legislative power: (1) the
completeness test and (2) the sufficient standard test. A law is complete when it sets forth therein the
policy to be executed, carried out or implemented by the delegate. It lays down a sufficient standard
when it provides adequate guidelines or limitations in the law to map out the boundaries of the
delegates authority and prevent the delegation from running riot. To be sufficient, the standard
must specify the limits of the delegates authority, announce the legislative policy and identify the
conditions under which it is to be implemented.

RA 9335 adequately states the policy and standards to guide the President in fixing revenue targets
and the implementing agencies in carrying out the provisions of the law. Section 2 spells out the policy
of the law:

SEC. 2. Declaration of Policy. It is the policy of the State to optimize the revenue-generation
capability and collection of the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) by
providing for a system of rewards and sanctions through the creation of a Rewards and Incentives
Fund and a Revenue Performance Evaluation Board in the above agencies for the purpose of
encouraging their officials and employees to exceed their revenue targets.

Section 4 canalized within banks that keep it from overflowing the delegated power to the President
to fix revenue targets:
SEC. 4. Rewards and Incentives Fund. A Rewards and Incentives Fund, hereinafter referred to as the
Fund, is hereby created, to be sourced from the collection of the BIR and the BOC in excess of their
respective revenue targets of the year, as determined by the Development Budget and
Coordinating Committee (DBCC), in the following percentages:
Excess of Collection of the Percent (%) of the Excess
Excess the Revenue Targets Collection to Accrue to the Fund

30% or below 15%

More than 30% 15% of the first 30%

plus 20% of the
remaining excess

The Fund shall be deemed automatically appropriated the year immediately following the year when
the revenue collection target was exceeded and shall be released on the same fiscal year.

Revenue targets shall refer to the original estimated revenue collection expected of the BIR
and the BOC for a given fiscal year as stated in the Budget of Expenditures and Sources of
Financing (BESF) submitted by the President to Congress. The BIR and the BOC shall submit to
the DBCC the distribution of the agencies revenue targets as allocated among its revenue districts in
the case of the BIR, and the collection districts in the case of the BOC.

xxx xxx xxx (emphasis supplied)

Revenue targets are based on the original estimated revenue collection expected respectively of the
BIR and the BOC for a given fiscal year as approved by the DBCC and stated in the BESF submitted by
the President to Congress. Thus, the determination of revenue targets does not rest solely on the
President as it also undergoes the scrutiny of the DBCC.

On the other hand, Section 7 specifies the limits of the Boards authority and identifies the conditions
under which officials and employees whose revenue collection falls short of the target by at least 7.5%
may be removed from the service:

SEC. 7. Powers and Functions of the Board. The Board in the agency shall have the following powers
and functions:

xxx xxx xxx

(b) To set the criteria and procedures for removing from service officials and employees whose
revenue collection falls short of the target by at least seven and a half percent (7.5%), with
due consideration of all relevant factors affecting the level of collection as provided in the
rules and regulations promulgated under this Act, subject to civil service laws, rules and
regulations and compliance with substantive and procedural due process: Provided, That the
following exemptions shall apply:

On legislative veto: The Joint Congressional Oversight Committee in RA 9335 was created for the
purpose of approving the implementing rules and regulations (IRR) formulated by the DOF, DBM,
NEDA, BIR, BOC and CSC. On May 22, 2006, it approved the said IRR. From then on, it
became functus officio and ceased to exist. Hence, the issue of its alleged encroachment on the
executive function of implementing and enforcing the law may be considered moot and academic.

Concept and bases of congressional oversight

Broadly defined, the power of oversight embraces all activities undertaken by Congress to enhance its
understanding of and influence over the implementation of legislation it has enacted. Clearly, oversight
concerns post-enactment measures undertaken by Congress: (a) to monitor bureaucratic compliance
with program objectives, (b) to determine whether agencies are properly administered, (c) to
eliminate executive waste and dishonesty, (d) to prevent executive usurpation of legislative authority,
and (d) to assess executive conformity with the congressional perception of public interest.

Categories of congressional oversight functions

The acts done by Congress purportedly in the exercise of its oversight powers may be divided
into three categories, namely: scrutiny, investigation and supervision.

a. Scrutiny - Congressional scrutiny implies a lesser intensity and continuity of attention to

administrative operations. Its primary purpose is to determine economy and efficiency of the operation
of government activities. In the exercise of legislative scrutiny, Congress may request information and
report from the other branches of government. It can give recommendations or pass resolutions for
consideration of the agency involved.

b. Congressional investigation - While congressional scrutiny is regarded as a passive process of

looking at the facts that are readily available, congressional investigation involves a more intense
digging of facts. The power of Congress to conduct investigation is recognized by the 1987
Constitution under section 21, Article VI,
c. Legislative supervision - The third and most encompassing form by which Congress exercises its
oversight power is thru legislative supervision. Supervision connotes a continuing and informed
awareness on the part of a congressional committee regarding executive operationsin a given
administrative area. While both congressional scrutiny and investigation involve inquiry into past
executive branch actions in order to influence future executive branch performance, congressional
supervision allows Congress to scrutinize the exercise of delegated law-making authority, and permits
Congress to retain part of that delegated authority.

Congress has two options when enacting legislation to define national policy within the broad horizons
of its legislative competence. It can itself formulate the details or it can assign to the executive branch
the responsibility for making necessary managerial decisions in conformity with those standards.

In the latter case, the law must be complete in all its essential terms and conditions when it leaves the
hands of the legislature. Thus, what is left for the executive branch or the concerned administrative
agency when it formulates rules and regulations implementing the law is to fill up details
(supplementary rule-making) or ascertain facts necessary to bring the law into actual operation
(contingent rule-making).

Administrative regulations enacted by administrative agencies to implement and interpret the law
which they are entrusted to enforce have the force of law and are entitled to respect. Such rules and
regulations partake of the nature of a statute and are just as binding as if they have been written in
the statute itself. As such, they have the force and effect of law and enjoy the presumption of
constitutionality and legality until they are set aside with finality in an appropriate case by a
competent court. Congress, in the guise of assuming the role of an overseer, may not pass upon their
legality by subjecting them to its stamp of approval without disturbing the calculated balance of
powers established by the Constitution. In exercising discretion to approve or disapprove the IRR
based on a determination of whether or not they conformed with the provisions of RA 9335, Congress
arrogated judicial power unto itself, a power exclusively vested in this Court by the Constitution.

Cases:
1. Dagan v. Philippine Racing Commission, G.R. No. 175220, February 12,
2009

Lesson: Requisites, explained.

SCs words: The validity of an administrative issuance, such as the assailed

guidelines, hinges on compliance with the following requisites:
1. Its promulgation must be authorized by the legislature;
2. It must be promulgated in accordance with the prescribed procedure;
3. It must be within the scope of the authority given by the legislature;
4. It must be reasonable.
All the prescribed requisites are met as regards the questioned issuances.
Philracoms authority is drawn from P.D. No. 420. The delegation made in the
presidential decree is valid. Philracom did not exceed its authority. And the
issuances are fair and reasonable. Xxx

P.D. No. 420 hurdles the tests of completeness and standards sufficiency.

Philracom was created for the purpose of carrying out the declared policy in Section
1 which is to promote and direct the accelerated development and continued
growth of horse racing not only in pursuance of the sports development program
but also in order to insure the full exploitation of the sport as a source of revenue
and employment. Furthermore, Philracom was granted exclusive jurisdiction and
control over every aspect of the conduct of horse racing, including the framing and
scheduling of races, the construction and safety of race tracks, andthe security of
racing. P.D. No. 420 is already complete in itself.

Clearly, there is a proper legislative delegation of rule-making power to

Philracom. Clearly too, for its part Philracom has exercised its rule-making power in
a proper and reasonable manner. More specifically, its discretion to rid the facilities
of MJCI and PRCI of horses afflicted with EIA is aimed at preserving the security
and integrity of horse races.

Petitioners also question the supposed delegation by Philracom of its rule-making

powers to MJCI and PRCI.

There is no delegation of power to speak of between Philracom, as the delegator

and MJCI and PRCI as delegates. The Philracom directive is merely instructive in
character. Philracom had instructed PRCI and MJCI to immediately come up with
Clubs House Rule to address the problem and rid their facilities of horses infected
with EIA. PRCI and MJCI followed-up when they ordered the racehorse owners to
submit blood samples and subject their race horses to blood testing. Compliance
with the Philracoms directive is part of the mandate of PRCI and MJCI under
Sections 11 of R.A. No. 7953 and Sections 1 and 2 of 8407.
As correctly proferred by MJCI, its duty is not derived from the delegated authority
of Philracom but arises from the franchise granted to them by Congress allowing
MJCI to do and carry out all such acts, deeds and things as may be necessary to
give effect to the foregoing. As justified by PRCI, obeying the terms of the
franchise and abiding by whatever rules enacted by Philracom is its duty.

As to the second requisite, petitioners raise some infirmities relating to Philracoms

guidelines. They question the supposed belated issuance of the guidelines, that is,
only after the collection of blood samples for the Coggins Test was ordered. While
it is conceded that the guidelines were issued a month after Philracoms directive,
this circumstance does not render the directive nor the guidelines void. The
directives validity and effectivity are not dependent on any supplemental
guidelines. Philracom has every right to issue directives to MJCI and PRCI with
respect to the conduct of horse racing, with or without implementing guidelines.

On publication: Petitioners also argue that Philracoms guidelines have no force and
effect for lack of publication and failure to file copies with the University of the
Philippines (UP) Law Center as required by law.

As a rule, the issuance of rules and regulations in the exercise of an administrative

agency of its quasi-legislative power does not require notice and
hearing, In Abella, Jr. v. Civil Service Commission, this Court had the occasion to
rule that prior notice and hearing are not essential to the validity of rules or
regulations issued in the exercise of quasi-legislative powers since there is no
determination of past events or facts that have to be established or ascertained.

The third requisite for the validity of an administrative issuance is that it must be
within the limits of the powers granted to it. The administrative body may not
make rules and regulations which are inconsistent with the provisions of the
Constitution or a statute, particularly the statute it is administering or which
created it, or which are in derogation of, or defeat, the purpose of a statute.

The assailed guidelines prescribe the procedure for monitoring and eradicating
EIA. These guidelines are in accord with Philracoms mandate under the law to
regulate the conduct of horse racing in the country.

Anent the fourth requisite, the assailed guidelines do not appear to be unreasonable
or discriminatory. In fact, all horses stabled at the MJCI and PRCIs premises
underwent the same procedure. The guidelines implemented were undoubtedly
reasonable as they bear a reasonable relation to the purpose sought to be
accomplished, i.e., the complete riddance of horses infected with EIA.
It also appears from the records that MJCI properly notified the racehorse owners
before the test was conducted. Those who failed to comply were repeatedly warned
of certain consequences and sanctions.

Furthermore, extant from the records are circumstances which allow respondents to
determine from time to time the eligibility of horses as race entries. The lease
contract executed between petitioner and MJC contains a proviso reserving the right
of the lessor, MJCI in this case, the right to determine whether a particular horse is
a qualified horse. In addition, Philracoms rules and regulations on horse racing
provide that horses must be free from any contagious disease or illness in order to
be eligible as race entries.

All told, we find no grave abuse of discretion on the part of Philracom in issuing the
contested guidelines and on the part MJCI and PRCI in complying with Philracoms
directive.

2. Smart Communications Inc., v. NTC, G.R. No. 151908, August 12, 2003

Lesson: Rule-making and Adjudication distinguished.

SCs words: Administrative agencies possess quasi-legislative or rule-making

powers and quasi-judicial or administrative adjudicatory powers. Quasi-legislative
or rule-making power is the power to make rules and regulations which results in
delegated legislation that is within the confines of the granting statute and the
doctrine of non-delegability and separability of powers.

The rules and regulations that administrative agencies promulgate, which are the
product of a delegated legislative power to create new and additional legal
provisions that have the effect of law, should be within the scope of the statutory
authority granted by the legislature to the administrative agency. It is required that
the regulation be germane to the objects and purposes of the law, and be not in
contradiction to, but in conformity with, the standards prescribed by law. They must
conform to and be consistent with the provisions of the enabling statute in order for
such rule or regulation to be valid. Constitutional and statutory provisions control
with respect to what rules and regulations may be promulgated by an
administrative body, as well as with respect to what fields are subject to regulation
by it. It may not make rules and regulations which are inconsistent with the
provisions of the Constitution or a statute, particularly the statute it is
administering or which created it, or which are in derogation of, or defeat, the
purpose of a statute. In case of conflict between a statute and an administrative
order, the former must prevail.

Not to be confused with the quasi-legislative or rule-making power of an

administrative agency is its quasi-judicial or administrative adjudicatory power. This
is the power to hear and determine questions of fact to which the legislative policy
is to apply and to decide in accordance with the standards laid down by the law
itself in enforcing and administering the same law. The administrative body
exercises its quasi-judicial power when it performs in a judicial manner an act which
is essentially of an executive or administrative nature, where the power to act in
such manner is incidental to or reasonably necessary for the performance of the
executive or administrative duty entrusted to it. In carrying out their quasi-judicial
functions, the administrative officers or bodies are required to investigate facts or
ascertain the existence of facts, hold hearings, weigh evidence, and draw
conclusions from them as basis for their official action and exercise of discretion in
a judicial nature.

In questioning the validity or constitutionality of a rule or regulation issued by an

administrative agency, a party need not exhaust administrative remedies before
going to court. This principle applies only where the act of the administrative
agency concerned was performed pursuant to its quasi-judicial function, and not
when the assailed act pertained to its rule-making or quasi-legislative power. In
Association of Philippine Coconut Dessicators v. Philippine Coconut Authority, it was
held: The rule of requiring exhaustion of administrative remedies before a party
may seek judicial review, so strenuously urged by the Solicitor General on behalf of
respondent, has obviously no application here. The resolution in question was
issued by the PCA in the exercise of its rule- making or legislative power. However,
only judicial review of decisions of administrative agencies made in the exercise of
their quasi-judicial function is subject to the exhaustion doctrine.

3. Conte v. Commission on Audit, 76 SCAD 16 or 264 SCRA 19 (1996)

Lesson: Administrative issuances should adhere to the statutes that they are
supposed to implement.

SCs words: It is doctrinal that in case of conflict between a statute and an

administrative order, the former must prevail. A rule or regulation must conform to
and be consistent with the provisions of the enabling statute in order for such rule
or regulation to be valid. The rule-making power of a public administrative body is a
delegated legislative power, which it may not use either to abridge the authority
given it by the Congress or the Constitution or to enlarge its power beyond the
scope intended. Constitutional and statutory provisions control with respect to
what rules and regulations may be promulgated by such a body, as well as with
respect to what fields are subject to regulation by it. It may not make rules and
regulations which are inconsistent with the provisions of the Constitution or a
statute, particularly the statute it is administering or which created it, or which are
in derogation of, or defeat, the purpose of a statute. Though well-settled is the rule
that retirement laws are liberally interpreted in favor of the retiree, nevertheless,
there is really nothing to interpret in either RA 4968 or Res. 56, and
correspondingly, the absence of any doubt as to the ultra-vires nature and illegality
of the disputed resolution constrains us to rule against petitioners.

As a necessary consequence of the invalidity of Res. 56, we can hardly impute

abuse of discretion of any sort to respondent Commission for denying petitioners
request for reconsideration of the 3rd Indorsement of July 10, 1989. On the
contrary, we hold that public respondent in its assailed Decision acted with
circumspection in denying petitioners claim. It reasoned thus: After a careful
evaluation of the facts herein obtaining, this Commission finds the instant request
to be devoid of merit. It bears stress that the financial assistance contemplated
under SSS Resolution No. 56 is granted to SSS employees who opt to retire under
R.A. No. 660. In fact, by the aggrieved parties own admission (page 2 of the
request for reconsideration dated January 12, 1993), it is a financial assistance
granted by the SSS management to its employees, in addition to the retirement
benefits under Republic Act No. 660. (underscoring supplied for emphasis) There is
therefore no question, that the said financial assistance partakes of the nature of a
retirement benefit that has the effect of modifying existing retirement laws
particularly R.A. No. 660.

g. Penal rules and regulations

1. People v. Santos, 63 Phil. 300 (1936)

FACTS:

Lesson: Effect when administrative agency issue orders that are beyond its
authority.

SCs words: The herein accused and appellee Augusto A. Santos is charged
with having ordered his fishermen to manage and operate the motor
launches Malabon II and Malabon III registered in his name and to fish,
loiter and anchor within three kilometers of the shore line of the Island of
Corregidor over which jurisdiction is exercised by naval and military
authorities of the United States, without permission from the Secretary of
Agriculture and Commerce.

These acts constitute a violation of the conditional clause of section 28 above

quoted, which reads as follows: "Provided, That boats not subject to license
under Act No. 4003 and this order may fish within the areas mentioned
above (within 3 kilometers of the shore line of islands and reservations over
which jurisdiction is exercised by naval and military authorities of the United
States, particularly Corregidor) only upon receiving written permission
therefor, which permission may be granted by the Secretary of Agriculture
and Commerce upon recommendation of the military or naval authorities
concerned."

Act No. 4003 contains no similar provision prohibiting boats not subject to
license from fishing within three kilometers of the shore line of islands and
reservations over which jurisdiction is exercised by naval and military
authorities of the United States, without permission from the Secretary of
Agriculture and Commerce upon recommendation of the military and naval
authorities concerned. Inasmuch as the only authority granted to the
Secretary of Agriculture and Commerce, by section 4 of Act No. 4003, is to
issue from time to time such instructions, orders, rules and regulations
consistent with said Act, as may be necessary and proper to carry into effect
the provisions thereof and for the conduct of proceedings arising under such
provisions; and inasmuch as said Act No. 4003, as stated, contains no
provisions similar to those contained in the above quoted conditional clause
of section 28 of Administrative Order No. 2, the conditional clause in
question supplies a defect of the law, extending it. This is equivalent to
legislating on the matter, a power which has not been and cannot be
delegated to him, it being exclusively reserved to the then Philippine
Legislature by the Jones Law, and now to the National Assembly by the
Constitution of the Philippines. Such act constitutes not only an excess of the
regulatory power conferred upon the Secretary of Agriculture and
Commerce, but also an exercise of a legislative power which he does not
have, and therefore said conditional clause is null and void and without
effect (12 Corpus Juris, 845; Rubi vs. Provincial Board of Mindoro, 39 Phil.,
660; U. S. vs. Ang Tang Ho, 43 Phil., 1; U. S. vs. Barrias, 11 Phil., 327).

For the foregoing considerations, we are of the opinion and so hold that the
conditional clause of section 28 of Administrative Order No. 2, issued by the
Secretary of Agriculture and Commerce, is null and void and without effect,
as constituting an excess of the regulatory power conferred upon him by
section 4 of Act No. 4003 and an exercise of a legislative power which has
not been and cannot be delegated to him.

2. People v. Que Po Lay, 94 Phil. (1954)

FACTS:

Lesson: Necessity of publication.

SCs words: 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.

3. People v. Maceren, 79 SCRA 450 (1977)

FACTS:

Lesson: The rule-making power must be confined to details for regulating

the mode or proceeding to carry into effect the law as it has been enacted.

SCs words: The inclusion in that decree of provisions defining and penalizing
electro fishing is a clear recognition of the deficiency or silence on that point
of the old Fisheries Law. It is an admission that a mere executive regulation
is not legally adequate to penalize electro fishing.

The rule-making power must be confined to details for regulating the mode
or proceeding to carry into effect the law as it has been enacted. The power
cannot be extended to amending or expanding the statutory requirements or
to embrace matters not covered by the statute. Rules that subvert the
statute cannot be sanctioned. (University of Santo Tomas vs. Board of Tax
Appeals, 93 Phil. 376, 382, citing 12 C.J. 845-46. As to invalid regulations,
see Collector of Internal Revenue vs. Villaflor, 69 Phil. 319; Wise & Co. vs.
Meer, 78 Phil. 655, 676; Del Mar vs. Phil. Veterans Administration, L-27299,
June 27, 1973, 51 SCRA 340, 349).

There is no question that the Secretary of Agriculture and Natural Resources

has rule-making powers. Section 4 of the Fisheries Law provides that the
Secretary "shall from time to time issue instructions, orders, and regulations
consistent" with that law, "as may be necessary and proper to carry into
effect the provisions thereof. That power is now vested in the Secretary of
Natural Resources by section 7 of the Revised Fisheries Law, Presidential
Decree No. 704.

Section 4(h) of Republic Act No. 3512 empower the Commissioner of

Fisheries "to prepare and execute upon the approval of the Secretary of
Agriculture and Natural Resources, forms, instructions, rules and regulations
consistent with the purpose" of that enactment "and for the development of
fisheries."

A penal statute is strictly construed. While an administrative agency has the

right to make rules and regulations to carry into effect a law already
enacted, that power should not be confused with the power to enact a
criminal statute. An administrative agency can have only the administrative
or policing powers expressly or by necessary implication conferred upon it.
(Glustrom vs. State, 206 Ga. 734, 58 SE 2d 534; See 2 Am. Jr. 2nd 129-
130).

Where the legislature has delegated to executive or administrative officers

and boards authority to promulgate rules to carry out an express legislative
purpose, the rules of administrative officers and boards, which have the
effect of extending, or which conflict with the authority-granting statute, do
not represent a valid exercise of the rule-making power but constitute an
attempt by an administrative body to legislate (State vs. Miles, 5 Wash. 2nd
322; 105 Pac. 2nd 51).

In a prosecution for a violation of an administrative order, it must clearly

appear that the order is one which falls within the scope of the authority
conferred upon the administrative body, and the order will be scrutinized
with special care. (State vs. Miles, supra).