Reviewer in Administrative Law

Describe the Administrative Code of 1987.

 The Code is a general law and “incorporates in a unified document the major structural, functional and
procedural principles of governance (Third Whereas Clause, Administrative Code of 1987) and “embodies
changes in administrative structures and procedures designed to serve the people.” (Fourth Whereas Clause,
Administrative Code of 1987) The Code is divided into seven (7) books. These books contain provisions on the
organization, powers and general administration of departments, bureaus and offices under the executive
branch, the organization and functions of the Constitutional Commissions and other constitutional bodies, the
rules on the national government budget, as well as guidelines for the exercise by administrative agencies of
quasi-legislative and quasi-judicial powers. The Code covers both the internal administration, i.e., internal
organization, personnel and recruitment, supervision and discipline, and the effects of the functions performed
by administrative officials on private individuals or parties outside government. (Ople v. Torres, G.R. No.
127685, July 23, 1998 [Puno])

What is Administrative Power?

 Administrative power is concerned with the work of applying policies and enforcing orders as determined by
proper governmental organs. It enables the President to fix a uniform standard of administrative efficiency
and check the official conduct of his agents. To this end, he can issue administrative orders, rules and
regulations. (Ople v. Torres, G.R. No. 127685, July 23, 1998 [Puno])

What is an Administrative Order?

 An administrative order is an ordinance issued by the President which relates to specific aspects in the
administrative operation of government. It must be in harmony with the law and should be for the sole purpose
of implementing the law and carrying out the legislative policy. (Ople v. Torres, G.R. No. 127685, July
23, 1998 [Puno])

What is the Government of the Republic of the Philippines?

 Ans.: The Government of the Republic of the Philippines refers to the corporate governmental entity through
which the functions of the government are exercised throughout the Philippines, including, save as the contrary
appears from the context, the various arms through which political authority is made effective in the
Philippines, whether pertaining to the autonomous regions, the provincial, city, municipal or barangay
subdivisions or other forms of local government. (Sec. 2[1], Introductory Provisions, Executive Order
No. 292)

What is an Agency of the Government?

 Ans.: Agency of the Government refers to any of the various units of the Government, including a department,
bureau, office, instrumentality, or government-owned or controlled corporation, or a local government or a
distinct unit therein. (Sec. 2[4], Introductory Provisions, Executive Order No. 292)

What is a Department?
 Ans.: Department refers to an executive department created by law. For purposes of Book IV, this shall
include any instrumentality, as herein defined, having or assigned the rank of a department, regardless of its
name or designation. (Sec. 2[7], Introductory Provisions, Executive Order No. 292)

What is a Bureau?
 Ans.: Bureau refers to any principal subdivision or unit of any department. For purposes of Book IV, this shall
include any principal subdivision or unit of any instrumentality given or assigned the rank of a bureau,
regardless of actual name or designation, as in the case of department-wide regional offices. (Sec. 2[8],
Introductory Provisions, Executive Order No. 292)

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What is an Office?
 Ans.: Office refers, within the framework of governmental organization, to any major functional unit of a
department or bureau including regional offices. It may also refer to any position held or occupied by
individual persons, whose functions are defined by law or regulation. (Sec. 2[9], Introductory
Provisions, Executive Order No. 292)

What is a Government Instrumentality? What are included in the term Government

Instrumentality?
 Ans.: A government instrumentality refers to any agency of the national government, not integrated within
the department framework, vested with special functions or jurisdiction by law, endowed with some if not all
corporate powers, administering special funds, enjoying operational autonomy, usually through a charter. The
term includes regulatory agencies, chartered institutions and government-owned or controlled
corporations. (Sec. 2[10], Introductory Provisions, Executive Order No. 292)

What is a Regulatory Agency?

 Ans.: A regulatory agency refers to any agency expressly vested with jurisdiction to regulate, administer or
adjudicate matters affecting substantial rights and interest of private persons, the principal powers of which
are exercised by a collective body, such as a commission, board or council. (Sec. 2[11], Introductory
Provisions, Executive Order No. 292)

What is a Chartered Institution?

 Ans.: A chartered institution refers to any agency organized or operating under a special charter, and vested
by law with functions relating to specific constitutional policies or objectives. This term includes state
universities and colleges and the monetary authority of the State. (Section 2[12], Introductory
Provisions, Executive Order No. 292)

What is a Government-Owned or Controlled Corporation?

 Ans.: Government-owned or controlled corporation refers to any agency organized as a stock or non-stock
corporation, vested with functions relating to public needs whether governmental or proprietary in nature, and
owned by the Government directly or through its instrumentalities either wholly, or, where applicable as in the
case of stock corporations, to the extent of at least fifty-one (51) per cent of its capital stock; x x x (Sec. 2[13],
Introductory Provisions, Executive Order No. 292)

When is a Government-Owned or Controlled Corporation deemed to be performing

proprietary function? When is it deemed to be performing governmental function?
 Held: Government-owned or controlled corporations may perform governmental or proprietary functions or
both, depending on the purpose for which they have been created. If the purpose is to obtain special corporate
benefits or earn pecuniary profit, the function is proprietary. If it is in the interest of health, safety and for the
advancement of public good and welfare, affecting the public in general, the function is governmental. Powers
classified as “proprietary” are those intended for private advantage and benefit. (Blaquera v. Alcala, 295
SCRA 366, 425, Sept. 11, 1998, En Banc [Purisima])

The Philippine National Red Cross (PNRC) is a government-owned and controlled

corporation with an original charter under R.A. No. 95, as amended. Its charter, however,
was amended to vest in it the authority to secure loans, be exempted from payment of all
duties, taxes, fees and other charges, etc. With the amendnt of its charter, has it been
“impliedly converted to a private corporation”?
 Held: The test to determine whether a corporation is government owned or controlled, or private in nature is
simple. Is it created by its own charter for the exercise of a public function, or by incorporation under the
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 general corporation law? Those with special charters are government corporations subject to its provisions,
and its employees are under the jurisdiction of the Civil Service Commission. The PNRC was not “impliedly
converted to a private corporation” simply because its charter was amended to vest in it the authority to secure
loans, be exempted from payment of all duties, taxes, fees and other charges, etc. (Camporedondo v. NLRC,
G.R. No. 129049, Aug. 6, 1999, 1st Div. [Pardo])

When may the Government not validly invoke the rule that prescription does not run against
the State? Illustrative Case.
 Held: While it is true that prescription does not run against the State, the same may not be invoked by the
government in this case since it is no longer interested in the subject matter. While Camp Wallace may have
belonged to the government at the time Rafael Galvez’s title was ordered cancelled in Land Registration Case
No. N-361, the same no longer holds true today.
 Republic Act No. 7227, otherwise known as the Base Conversion and Development Act of 1992, created the
Bases Conversion and Development Authority. X x x
 With the transfer of Camp Wallace to the BCDA, the government no longer has a right or interest to
protect. Consequently, the Republic is not a real party in interest and it may not institute the instant
action. Nor may it raise the defense of imprescriptibility, the same being applicable only in cases where the
government is a party in interest. x x x. Being the owner of the areas covered by Camp Wallace, it is the Bases
Conversion and Development Authority, not the Government, which stands to be benefited if the land covered
by TCT No. T-5710 issued in the name of petitioner is cancelled.

Nonetheless, it has been posited that the transfer of military reservations and their extensions to the BCDA is
basically for the purpose of accelerating the sound and balanced conversion of these military reservations into
alternative productive uses and to enhance the benefits to be derived from such property as a measure of
promoting the economic and social development, particularly of Central Luzon and, in general, the country’s
goal for enhancement (Section 2, Republic Act No. 7227). It is contended that the transfer of these military
reservations to the Conversion Authority does not amount to an abdication on the part of the Republic of its
interests, but simply a recognition of the need to create a body corporate which will act as its agent for the
realization of its program. It is consequently asserted that the Republic remains to be the real party in interest
and the Conversion Authority merely its agent.

We, however, must not lose sight of the fact that the BCDA is an entity invested with a personality separate
and distinct from the government. X x x

It may not be amiss to state at this point that the functions of government have been classified into
governmental or constituent and proprietary or ministrant. While public benefit and public welfare,
particularly, the promotion of the economic and social development of Central Luzon, may be attributable to
the operation of the BCDA, yet it is certain that the functions performed by the BCDA are basically proprietary
in nature. The promotion of economic and social development of Central Luzon, in particular, and the
country’s goal for enhancement, in general, do not make the BCDA equivalent to the Government. Other
corporations have been created by government to act as its agents for the realization of its programs, the SSS,
GSIS, NAWASA and the NIA, to count a few, and yet, the Court has ruled that these entities, although
performing functions aimed at promoting public interest and public welfare, are not government-function
corporations invested with governmental attributes. It may thus be said that the BCDA is not a mere agency
of the Government but a corporate body performing proprietary functions.

Having the capacity to sue or be sued, it should thus be the BCDA which may file an action to cancel petitioner’s
title, not the Republic, the former being the real party in interest. One having no right or interest to protect
cannot invoke the jurisdiction of the court as a party plaintiff in an action. A suit may be dismissed if the
plaintiff or the defendant is not a real party in interest. x x x
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 However, E.B. Marcha Transport Co., Inc. v. IAC is cited as authority that the Republic is the proper party to
sue for the recovery of possession of property which at the time of the installation of the suit was no longer
held by the national government body but by the Philippine Ports Authority. In E.B. Marcha, the Court ruled:

It can be said that in suing for the recovery of the rentals, the Republic of the Philippines, acted as principal of
the Philippine Ports Authority, directly exercising the commission it had earlier conferred on the latter as its
agent. We may presume that, by doing so, the Republic of the Philippines did not intend to retain the said
rentals for its own use, considering that by its voluntary act it had transferred the land in question to the
Philippine Ports Authority effective July 11, 1974. The Republic of the Philippines had simply sought to assist,
not supplant, the Philippine Ports Authority, whose title to the disputed property it continues to recognize. We
may expect the that the said rentals, once collected by the Republic of the Philippines, shall be turned over by
it to the Philippine Ports Authority conformably to the purposes of P.D. No. 857.

E.B. Marcha is, however, not on all fours with the case at bar. In the former, the Court considered the Republic
a proper party to sue since the claims of the Republic and the Philippine Ports Authority against the petitioner
therein were the same. To dismiss the complaint in E.B. Marcha would have brought needless delay in the
settlement of the matter since the PPA would have to refile the case on the same claim already litigated
upon. Such is not the case here since to allow the government to sue herein enables it to raise the issue of
imprescriptibility, a claim which is not available to the BCDA. The rule that prescription does not run against
the State does not apply to corporations or artificial bodies created by the State for special purposes, it being
said that when the title of the Republic has been divested, its grantees, although artificial bodies of its own
creation, are in the same category as ordinary persons. By raising the claim of imprescriptibility, a claim which
cannot be raised by the BCDA, the Government not only assists the BCDA, as it did in E.B. Marcha, it even
supplants the latter, a course of action proscribed by said case.

Moreover, to recognize the Government as a proper party to sue in this case would set a bad precedent as it
would allow the Republic to prosecute, on behalf of government-owned or controlled corporations, causes of
action which have already prescribed, on the pretext that the Government is the real party in interest against
whom prescription does not run, said corporations having been created merely as agents for the realization of
government programs.

It should also be noted that petitioner is unquestionably a buyer in good faith and for value, having acquired
the property in 1963, or 5 years after the issuance of the original certificate of title, as a third transferee. If
only not to do violence and to give some measure of respect to the Torrens System, petitioner must be afforded
some measure of protection. (Shipside Incorporated v. Court of Appeals, 352 SCRA 334, Feb. 20,
2001, 3rd Div. [Melo])

Discuss the nature and functions of the National Telecommunications Commission (NTC),
and analyze its powers and authority as well as the laws, rules and regulations that govern
its existence and operations.
 Held: The NTC was created pursuant to Executive Order No. 546 x x x. It assumed the functions formerly
assigned to the Board of Communications and the Communications Control Bureau, which were both abolished
under the said Executive Order. Previously, the NTC’s function were merely those of the defunct Public Service
Commission (PSC), created under Commonwealth Act No. 146, as amended, otherwise known as the Public
Service Act, considering that the Board of Communications was the successor-in-interest of the PSC. Under
Executive Order No. 125-A, issued in April 1987, the NTC became an attached agency of the Department of
Transportation and Communications.

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 In the regulatory communications industry, the NTC has the sole authority to issue Certificates of Public
Convenience and Necessity (CPCN) for the installation, operation, and maintenance of communications
facilities and services, radio communications systems, telephone and telegraph systems. Such power includes
the authority to determine the areas of operations of applicants for telecommunications services. Specifically,
Section 16 of the Public Service Act authorizes the then PSC, upon notice and hearing, to issue Certificates of
Public Convenience for the operation of public services within the Philippines “whenever the Commission finds
that the operation of the public service proposed and the authorization to do business will promote the public
interests in a proper and suitable manner.” (Commonwealth Act No. 146, Section 16[a]) The procedure
governing the issuance of such authorizations is set forth in Section 29 of the said Act x x x. (Republic v.
Express Telecommunication Co., Inc., 373 SCRA 316, Jan. 15, 2002, 1st Div. [Ynares-Santiago])

Is the filing of the administrative rules and regulations with the UP Law Center the
operative act that gives the rules force and effect?
 Held: In granting Bayantel the provisional authority to operate a CMTS, the NTC applied Rule 15, Section 3 of
its 1978 Rules of Practice and Procedure, which provides:

Sec. 3. Provisional Relief. – Upon the filing of an application, complaint or petition or at any stage
thereafter, the Board may grant on motion of the pleader or on its own initiative, the relief prayed
for, based on the pleading, together with the affidavits and supporting documents attached thereto,
without prejudice to a final decision after completion of the hearing which shall be called within
thirty (30) days from grant of authority asked for.

Respondent Extelcom, however, contends that the NTC should have applied the Revised Rules
which were filed with the Office of the National Administrative Register on February 3,
1993. These Revised Rules deleted the phrase “on its own initiative”; accordingly, a provisional
authority may be issued only upon filing of the proper motion before the Commission.

In answer to this argument, the NTC, through the Secretary of the Commission, issued a certification to the
effect that inasmuch as the 1993 Revised Rules have not been published in a newspaper of general circulation,
the NTC has been applying the 1978 Rules.

The absence of publication, coupled with the certification by the Commissioner of the NTC stating that the
NTC was still governed by the 1987 Rules, clearly indicate that the 1993 Revised Rules have not taken effect at
the time of the grant of the provisional authority to Bayantel. The fact that the 1993 Revised Rules were filed
with the UP Law Center on February 3, 1993 is of no moment. There is nothing in the Administrative Code of
1987 which implies that the filing of the rules with the UP Law Center is the operative act that gives the rules
force and effect. Book VII, Chapter 2, Section 3 thereof merely states:

Filing. – (1) Every agency shall file with the University of the Philippines Law Center three
(3) certified copies of every rule adopted by it. Rules in force on the date of effectivity of this
Code which are not filed within three (3) months from the date shall not thereafter be the
basis of any sanction against any party or persons.

(2) The records officer of the agency, or his equivalent functionary, shall carry out the
requirements of this section under pain of disciplinary action.

(3) A permanent register of all rules shall be kept by the issuing agency and shall be open to
public inspection.

The National Administrative Register is merely a bulletin of codified rules and it is furnished only to the
Office of the President, Congress, all appellate courts, the National Library, other public offices or agencies

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 as the Congress may select, and to other persons at a price sufficient to cover publication and mailing or
distribution costs (Administrative Code of 1987, Book VII, Chapter 2, Section 7). In a similar case, we held:

This does not imply, however, that the subject Administrative Order is a valid exercise of such quasi-
legislative power. The original Administrative Order issued on August 30, 1989, under which the
respondents filed their applications for importations, was not published in the Official Gazette or in a
newspaper of general circulation. The questioned Administrative Order, legally, until it is published, is
invalid within the context of Article 2 of Civil Code, which reads:

“Article 2. Laws shall take effect after fifteen days following the completion of their
publication in the Official Gazette (or in a newspaper of general circulation in the Philippines),
unless it is otherwise provided. X x x”

The fact that the amendments to Administrative Order No. SOCPEC 89-08-01 were filed with, and published
by the UP Law Center in the National Administrative Register, does not cure the defect related to the
effectivity of the Administrative Order.

This Court, in Tanada v. Tuvera stated, thus:

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

Covered by this rule are presidential decrees and executive orders promulgated by the
President in the exercise of legislative power or, at present, directly conferred by the
Constitution. Administrative Rules and Regulations must also be published if their purpose
is to enforce or implement existing law pursuant also to a valid delegation.

Interpretative regulations and those merely internal in nature, that is, regulating only the
personnel of the administrative agency and not the public, need not be published. Neither is
publication required of the so-called letters of instructions issued by administrative superiors
concerning the rules or guidelines to be followed by their subordinates in the performance of
their duties.

We agree that the publication must be in full or it is no publication at all since its purpose is
to inform the public of the contents of the laws.”

The Administrative Order under consideration is one of those issuances which should be published for its
effectivity, since its purpose is to enforce and implement an existing law pursuant to a valid delegation, i.e.,
P.D. 1071, in relation to LOI 444 and EO 133.
Thus, publication in the Official Gazette or a newspaper of general circulation is a condition sine qua
non before statutes, rules or regulations can take effect. This is explicit from Executive Order No. 200, which
repealed Article 2 of the Civil Code, and which states that:

Laws shall take effect after fifteen days following the completion of their publication either in the Official
Gazette or in a newspaper of general circulation in the Philippines, unless it is otherwise provided (E.O. 200,
Section 1).

The Rules of Practice and Procedure of the NTC, which implements Section 29 of the Public Service Act, fall
squarely within the scope of these laws, as explicitly mentioned in the case of Tanada v. Tuvera.

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 Our pronouncement in Tanada v. Tuvera is clear and categorical. Administrative rules and regulations must
be published if their purpose is to enforce or implement existing law pursuant to a valid delegation. The only
exception are interpretative regulations, those merely internal in nature, or those so-called letters of
instructions issued by administrative superiors concerning the rules and guidelines to be followed by their
subordinates in the performance of their duties (PHILSA International Placement & Services Corp. v.
Secretary of Labor, G.R. No. 103144, April 4, 2001, 356 SCRA 174).

Hence, the 1993 Revised Rules should be published in the Official Gazette or in a newspaper of general
circulation before it can take effect. Even the 1993 Revised Rules itself mandates that said Rules shall take
effect only after their publication in a newspaper of general circulation (Section 20 thereof). In the absence of
such publication, therefore, it is the 1978 Rules that govern. (Republic v. Express Telecommunication
Co., Inc., 373 SCRA 316, Jan. 15, 2002, 1st Div. [Ynares-Santiago])

May a person be held liable for violation of an administrative regulation which was not
published?
 Held: Petitioner insists, however, that it cannot be held liable for illegal exaction as POEA Memorandum
Circular No. II, Series of 1983, which enumerated the allowable fees which may be collected from applicants, is
void for lack of publication.

There is merit in the argument.

In Tanada v. Tuvera, the Court held, as follows:

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

Covered by this rule are presidential decrees and executive orders promulgated by the President in the exercise of
legislative powers whenever the same are validly delegated by the legislature or, at present, directly conferred by the
Constitution. Administrative rules and regulations must also be published if their purpose is to enforce or implement
existing law pursuant to a valid delegation.

Interpretative regulations and those merely internal in nature, that is, regulating only the personnel of the
administrative agency and the public, need not be published. Neither is publication required of the so-called letter of
instructions issued by the administrative superiors concerning the rules or guidelines to be followed by their
subordinates in the performance of their duties.”

Applying this doctrine, we have previously declared as having no force and effect the following administrative issuances:
a) Rules and Regulations issued by the Joint Ministry of Health-Ministry of Labor and Employment Accreditation
Committee regarding the accreditation of hospitals, medical clinics and laboratories; b) Letter of Instruction No. 416
ordering the suspension of payments due and payable by distressed copper mining companies to the national
government; c) Memorandum Circulars issued by the POEA regulating the recruitment of domestic helpers to Hong
Kong; d) Administrative Order No. SOCPEC 89-08-01 issued by the Philippine International Trading Corporation
regulating applications for importation from the People’s Republic of China; and e) Corporate Compensation Circular
No. 10 issued by the Department of Budget and Management discontinuing the payment of other allowances and fringe
benefits to government officials and employees. In all these cited cases, the administrative issuances questioned therein
were uniformly struck down as they were not published or filed with the National Administrative Register as required
by the Administrative Code of 1987.

POEA Memorandum Circular No. 2, Series of 1983 must likewise be declared ineffective as the same was never published
or filed with the National Administrative Register.

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POEA Memorandum Circular No. 2, Series of 1983 provides for the applicable schedule of placement and documentation
fees for private employment agencies or authority holders. Under the said Order, the maximum amount which may be
collected from prospective Filipino overseas workers is P2,500.00. The said circular was apparently issued in
compliance with the provisions of Article 32 of the Labor Code x x x.

It is thus clear that the administrative circular under consideration is one of those issuances which should be published
for its effectivity, since its purpose is to enforce and implement an existing law pursuant to a valid
delegation. Considering that POEA Administrative Circular No. 2, Series of 1983 has not as yet been published or filed
with the National Administrative Register, the same is ineffective and may not be enforced. (Philsa International
Placement and Services Corporation v. Secretary of Labor and Employment, 356 SCRA 174, April 4,
2001, 3rd Div., [Gonzaga-Reyes])

Does the publication requirement apply as well to administrative regulations addressed

only to a specific group and not to the general public?
 Held: The Office of the Solicitor General likewise argues that the questioned administrative circular is not
among those requiring publication contemplated by Tanada v. Tuvera as it is addressed only to a specific group
of persons and not to the general public.

Again, there is no merit in this argument.

The fact that the said circular is addressed only to a specified group, namely private employment agencies or
authority holders, does not take it away from the ambit of our ruling in Tanada v. Tuvera. In the case of Phil.
Association of Service Exporters v. Torres, the administrative circulars questioned therein were addressed to
an even smaller group, namely Philippine and Hong Kong agencies engaged in the recruitment of workers for
Hong Kong, and still the Court ruled therein that, for lack of proper publication, the said circulars may not be
enforced or implemented.

Our pronouncement in Tanada v. Tuvera is clear and categorical. Administrative rules and regulations must
be published if their purpose is to enforce or implement existing law pursuant to a valid delegation. The only
exceptions are interpretative regulations, those merely internal in nature, or those so-called letters of
instructions issued by administrative superiors concerning the rules and guidelines to be followed by their
subordinates in the performance of their duties. Administrative Circular No. 2, Series of 1983 has not been
shown to fall under any of these exceptions.

In this regard, the Solicitor General’s reliance on the case of Yaokasin v. Commissioner of Customs is
misplaced. In the said case, the validity of certain Customs Memorandum Orders were upheld despite their lack
of publication as they were addressed to a particular class of persons, the customs collectors, who were also the
subordinates of the Commissioner of the Bureau of Customs. As such, the said Memorandum Orders clearly
fall under one of the exceptions to the publication requirement, namely those dealing with instructions from an
administrative superior to a subordinate regarding the performance of their duties, a circumstance which does
not obtain in the case at bench. X x x

To summarize, petitioner should be absolved from the three (3) counts of exaction as POEA Administrative
Circular No. 2, Series of 1983 could not be the basis of administrative sanctions against petitioner for lack of
publication. (Philsa International Placement and Services Corporation v. Secretary of Labor
and Employment, 356 SCRA 174, April 4, 2001, 3rd Div., [Gonzaga-Reyes])

May a successful bidder compel a government agency to formalize a contract with it notwithstanding
that its bid exceeds the amount appropriated by Congress for the project?

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 Held: Enshrined in the 1987 Philippine Constitution is the mandate that “no money shall be paid out of the
Treasury except in pursuance of an appropriation made by law.” (Sec. 29[1], Article VI of the 1987
Constitution) Thus, in the execution of government contracts, the precise import of this constitutional
restriction is to require the various agencies to limit their expenditures within the appropriations made by law
for each fiscal year.
It is quite evident from the tenor of the language of the law that the existence of appropriations and the
availability of funds are indispensable pre-requisites to or conditions sine qua non for the execution of
government contracts. The obvious intent is to impose such conditions as a priori requisites to the validity of
the proposed contract. Using this as our premise, we cannot accede to PHOTOKINA’s contention that there is
already a perfected contract. While we held in Metropolitan Manila Development Authority v. Jancom
Environmental Corporation that “the effect of an unqualified acceptance of the offer or proposal of the bidder
is to perfect a contract, upon notice of the award to the bidder,” however, such statement would be
inconsequential in a government where the acceptance referred to is yet to meet certain conditions. To hold
otherwise is to allow a public officer to execute a binding contract that would obligate the government in an
amount in excess of the appropriations for the purpose for which the contract was attempted to be made. This
is a dangerous precedent.

In the case at bar, there seems to be an oversight of the legal requirements as early as the bidding stage. The
first step of a Bids and Awards Committee (BAC) is to determine whether the bids comply with the
requirements. The BAC shall rate a bid “passed” only if it complies with all the requirements and the submitted
price does not exceed the approved budget for the contract.”(Implementing Rules and Regulations [IRR] for
Executive Order No. 262, supra.)

Extant on the record is the fact that the VRIS Project was awarded to PHOTOKINA on account of its bid in the
amount of P6.588 Billion Pesos. However, under Republic Act No. 8760 (General Appropriations Act, FY
2000, p. 1018, supra.),the only fund appropriated for the project was P1 Billion Pesos and under the
Certification of Available Funds (CAF) only P1.2 Billion Pesos was available. Clearly, the amount appropriated
is insufficient to cover the cost of the entire VRIS Project. There is no way that the COMELEC could enter into
a contract with PHOTOKINA whose accepted bid was way beyond the amount appropriated by law for the
project. This being the case, the BAC should have rejected the bid for being excessive or should have withdrawn
the Notice of Award on the ground that in the eyes of the law, the same is null and void.

Even the draft contract submitted by Commissioner Sadain that provides for a contract price in the amount of
P1.2 Billion Pesos is unacceptable. x x x While the contract price under the draft contract is only P1.2 Billion
and, thus, within the certified available funds, the same covers only Phase I of the VRIS Project, i.e., the issuance
of identification cards for only 1,000,000 voters in specified areas. In effect, the implementation of the VRIS
Project will be “segmented” or “chopped” into several phases. Not only is such arrangement disallowed by our
budgetary laws and practices, it is also disadvantageous to the COMELEC because of the uncertainty that will
loom over its modernization project for an indefinite period of time. Should Congress fail to appropriate the
amount necessary for the completion of the entire project, what good will the accomplished Phase I serve? As
expected, the project failed “to sell” with the Department of Budget and Management. Thus, Secretary Benjamin
Diokno, per his letter of December 1, 2000, declined the COMELEC’s request for the issuance of the Notice of
Cash Availability (NCA) and a multi-year obligatory authority to assume payment of the total VRIS Project for
lack of legal basis. Corollarily, under Section 33 of R.A. No. 8760, no agency shall enter into a multi-year
contract without a multi-year obligational authority, thus:
“SECTION 33. Contracting Multi-Year Projects. – In the implementation of multi-
year projects, no agency shall enter into a multi-year contract without a multi-year
Obligational Authority issued by the Department of Budget and Management for the
purpose. Notwithstanding the issuance of the multi-year Obligational Authority, the

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 obligation to be incurred in any given calendar year, shall in no case exceed the amount
programmed for implementation during said calendar year.”

Petitioners are justified in refusing to formalize the contract with

PHOTOKINA. Prudence dictated them not to enter into a contract not backed up by
sufficient appropriation and available funds. Definitely, to act otherwise would be a
futile exercise for the contract would inevitably suffer the vice of nullity. x x x
Verily, the contract, as expressly declared by law, is inexistent and void ab initio (Article 1409 of the Civil Code
of the Philippines). This is to say that the proposed contract is without force and effect from the very beginning
or from its incipiency, as if it had never been entered into, and hence, cannot be validated either by lapse of
time or ratification.
In fine, we rule that PHOTOKINA, though the winning bidder, cannot compel the COMELEC to formalize the
contract. Since PHOTOKINA’s bid is beyond the amount appropriated by Congress for the VRIS Project, the
proposed contract is not binding upon the COMELEC and is considered void x x x. (Commission on
Elections v. Judge Ma. Luisa Quijano-Padilla, G.R. No. 151992, Sept. 18, 2002, En Banc
[Sandoval-Gutierrez])

What is the remedy available to a party who contracts with the government contrary to the
requirements of the law and, therefore, void ab initio?
 Held: Of course, we are not saying that the party who contracts with the government has no other recourse in
law. The law itself affords him the remedy. Section 48 of E.O. No. 292 explicitly provides that any contract
entered into contrary to the above-mentioned requirements shall be void, and “the officers entering into the
contract shall be liable to the Government or other contracting party for any consequent damage to the same
as if the transaction had been wholly between private parties.” So when the contracting officer transcends his
lawful and legitimate powers by acting in excess of or beyond the limits of his contracting authority, the
Government is not bound under the contract. It would be as if the contract in such case were a private one,
whereupon, he binds himself, and thus, assumes personal liability thereunder. Otherwise stated, the proposed
contract is unenforceable as to the Government.

While this is not the proceeding to determine where the culpability lies, however, the constitutional mandate
cited above constrains us to remind all public officers that public office is a public trust and all public officers
must at all times be accountable to the people. The authority of public officers to enter into government
contracts is circumscribed with a heavy burden of responsibility. In the exercise of their contracting prerogative,
they should be the first judges of the legality, propriety and wisdom of the contract they entered into. They must
exercise a high degree of caution so that the Government may not be the victim of ill-advised or improvident
action. (Commission on Elections v. Judge Ma. Luisa Quijano-Padilla, G.R. No. 151992, Sept. 18,
2002, En Banc [Sandoval-Gutierrez])

Does the Commission on Human Rights have the power to adjudicate?

 Held: In its Order x x x denying petitioners’ motion to dismiss, the CHR theorizes that the intention of the
members of the Constitutional Commission is to make CHR a quasi-judicial body. This view, however, has not
heretofore been shared by this Court. In Carino v. Commission on Human Rights, the Court x x x has observed
that it is “only the first of the enumerated powers and functions that bears any resemblance to adjudication of
adjudgment,” but that resemblance can in no way be synonymous to the adjudicatory power itself. The Court
explained:

“x x x [T]he Commission on Human Rights x x x was not meant by the fundamental

law to be another court or quasi-judicial agency in this country, or duplicate much
less take over the functions of the latter.

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 “The most that may be conceded to the Commission in the way of adjudicative power
is that it may investigate, i.e., receive evidence and make findings of fact as regards
claimed human rights violations involving civil and political rights. But fact finding
is not adjudication, and cannot be likened to the judicial function of a court of
justice, or even a quasi-judicial agency or official. The function of receiving evidence
and ascertaining therefrom the facts of a controversy is not a judicial function,
properly speaking. To be considered such, the faculty of receiving evidence and
making factual conclusions in a controversy must be accompanied by the authority
of applying the law to those factual conclusions to the end that the controversy may
be decided or determined authoritatively, finally and definitively, subject to such
appeals or modes of review as may be provided by law. This function, to repeat, the
Commission does not have. (Simon, Jr. v. Commission on Human Rights, 229
SCRA 117, 125, Jan. 5, 1994, En Banc [Vitug, J.])

Does the Commission on Human Rights have jurisdiction to issue TRO or writ of preliminary
injunction?
 Held: In Export Processing Zone Authority v. Commission on Human Rights, the Court x x x explained:

“The constitutional provision directing the CHR to ‘provide for preventive

measures and legal aid services to the underprivileged whose human rights have
been violated or need protection’ may not be construed to confer jurisdiction on
the Commission to issue a restraining order or writ of injunction for, if that were
the intention, the Constitution would have expressly said so. ‘Jurisdiction is
conferred only by the Constitution or by law.’ It is never derived by implication.”

“Evidently, the ‘preventive measures and legal aid services’ mentioned in the
Constitution refer to extrajudicial and judicial remedies (including a writ of
preliminary injunction) which the CHR may seek from the proper courts on behalf
of the victims of human rights violations. Not being a court of justice, the CHR
itself has no jurisdiction to issue the writ, for a writ of preliminary injunction may
only be issued ‘by the judge of any court in which the action is pending [within his
district], or by a Justice of the Court of Appeals, or of the Supreme Court. x x x. A
writ of preliminary injunction is an ancillary remedy. It is available only in a
pending principal action, for the preservation or protection of the rights and
interest of a party thereto, and for no other purpose.”

The Commission does have legal standing to indorse, for appropriate action, its findings and recommendations
to any appropriate agency of government. (Simon, Jr. v. Commission on Human Rights, 229 SCRA
117, 134-135, Jan. 5, 1994, En Banc [Vitug, J.])

Does the petition for annulment of proclamation of a candidate merely involve the exercise
by the COMELEC of its administrative power to review, revise and reverse the actions of the
board of canvassers and, therefore, justifies non-observance of procedural due process, or
does it involve the exercise of the COMELEC’s quasi-judicial function?
 Held: Taking cognizance of private respondent’s petitions for annulment of petitioner’s proclamation,
COMELEC was not merely performing an administrative function. The administrative powers of the COMELEC
include the power to determine the number and location of polling places, appoint election officials and
inspectors, conduct registration of voters, deputize law enforcement agencies and governmental
instrumentalities to ensure free, orderly, honest, peaceful and credible elections, register political parties,
organizations or coalition, accredit citizen’s arms of the Commission, prosecute election offenses, and
recommend to the President the removal of or imposition of any other disciplinary action upon any officer or
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 employee it has deputized for violation or disregard of its directive, order or decision. In addition, the
Commission also has direct control and supervision over all personnel involved in the conduct of
election. However, the resolution of the adverse claims of private respondent and petitioner as regards the
existence of a manifest error in the questioned certificate of canvass requires the COMELEC to act as an
arbiter. It behooves the Commission to hear both parties to determine the veracity of their allegations and to
decide whether the alleged error is a manifest error. Hence, the resolution of this issue calls for the exercise by
the COMELEC of its quasi-judicial power. It has been said that where a power rests in judgment or discretion,
so that it is of judicial nature or character, but does not involve the exercise of functions of a judge, or is conferred
upon an officer other than a judicial officer, it is deemed quasi-judicial. The COMELEC therefore, acting as
quasi-judicial tribunal, cannot ignore the requirements of procedural due process in resolving the petitions filed
by private respondent. (Federico S. Sandoval v. COMELEC, G.R. No. 133842, Jan. 26, 2000 [Puno])

Discuss the contempt power of the Commission on Human Rights (CHR). When may it be
validly exercised.

 Held: On its contempt powers, the CHR is constitutionally authorized to “adopt its operational guidelines and
rules of procedure, and cite for contempt for violations thereof in accordance with the Rules of
Court.” Accordingly, the CHR acted within its authority in providing in its revised rules, its power “to cite or
hold any person in direct or indirect contempt, and to impose the appropriate penalties in accordance with the
procedure and sanctions provided for in the Rules of Court.” That power to cite for contempt, however, should
be understood to apply only to violations of its adopted operational guidelines and rules of procedure essential
to carry out its investigatorial powers. To exemplify, the power to cite for contempt could be exercised against
persons who refuse to cooperate with the said body, or who unduly withhold relevant information, or who
decline to honor summons, and the like, in pursuing its investigative work. The “order to desist” (a semantic
interplay for a restraining order) in the instance before us, however, is not investigatorial in character but
prescinds from an adjudicative power that it does not possess. x x x (Simon, Jr. v. Commission on Human
Rights, 229 SCRA 117, 134, Jan. 5, 1994, En Banc [Vitug, J.])

Discuss the Doctrine of Primary Jurisdiction (or Prior Resort).

 Held: Courts cannot and will not resolve a controversy involving a question which is within the jurisdiction of
an administrative tribunal, especially where the question demands the exercise of sound administrative
discretion requiring the special knowledge, experience and services of the administrative tribunal to determine
technical and intricate matters of fact.
In recent years, it has been the jurisprudential trend to apply this doctrine to cases involving matters that
demand the special competence of administrative agencies even if the question involved is also judicial in
character. It applies “where a claim is originally cognizable in the courts, and comes into play whenever
enforcement of the claim requires the resolution of issues which, under a regulatory scheme, have been placed
within the special competence of an administrative body; in such case, the judicial process is suspended pending
referral of such issues to the administrative body for its view.”

In cases where the doctrine of primary jurisdiction is clearly applicable, the court cannot arrogate unto itself the
authority to resolve a controversy, the jurisdiction over which is lodged with an administrative body of special
competence. (Villaflor v. CA, 280 SCRA 297, Oct. 9, 1992, 3rd Div. [Panganiban])

Discuss the Doctrine of Exhaustion of Administrative Remedies. What are the exceptions
thereto?
Held:
 PAAT vs CA:
Before a party is allowed to seek the intervention of the court, it is a pre-condition that he should have availed of all the
means of administrative processes afforded him. Hence, if a remedy within the administrative machinery can still be

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resorted to by giving the administrative officer concerned every opportunity to decide on a matter that comes within his
jurisdiction then such remedy should be exhausted first before the court’s judicial power can be sought. The premature
invocation of court’s jurisdiction is fatal to one’s cause of action. Accordingly, absent any finding of waiver or estoppel
the case is susceptible of dismissal for lack of cause of action. This doctrine of exhaustion of administrative remedies
was not without its practical and legal reasons, for one thing, availment of administrative remedy entails lesser expenses
and provides for a speedier disposition of controversies. It is no less true to state that the courts of justice for reasons of
comity and convenience will shy away from a dispute until the system of administrative redress has been completed and
complied with so as to give the administrative agency concerned every opportunity to correct its error and to dispose of
the case.

This doctrine is disregarded:

1. when there is a violation of due process;

2. when the issue involved is purely a legal question;
3. when the administrative action is patently illegal amounting to lack or excess of jurisdiction;
4. when there is estoppel on the part of the administrative agency concerned;
5. when there is irreparable injury;
6. when the respondent is a department secretary whose acts as an alter ego of the President bears
the implied and assumed approval of the latter;
7. when to require exhaustion of administrative remedies would be unreasonable;
8. when it would amount to a nullification of a claim;
9. when the subject matter is a private land in land case proceeding;
10. when the rule does not provide a plain, speedy and adequate remedy, and
11. when there are circumstances indicating the urgency of judicial intervention.

 Carale v. Abarintos, 269 SCRA 132, March 3, 1997, 3rd Div. [Davide]:
Non-exhaustion of administrative remedies is not jurisdictional. It only renders the action premature, i.e., claimed
cause of action is not ripe for judicial determination and for that reason a party has no cause of action to ventilate
in court.

Powers of Administrative Agencies

1. Quasi-legislative power / Power of subordinate legislation
2. Quasi-judicial power/Power of adjudication
3. Determinative powers (Note: Senator Neptali Gonzales calls them incidental powers)

Definition of “Quasi-legislative power”

It is the authority delegated by the law-making body to the administrative body to adopt rules and regulations
intended to carry out the provisions of a law and implement legislative policy.

Distinctions between Quasi-legislative power and legislative power

1. LEGISLATIVE power involves the discretion to determine what the law shall be. QUASI-legislative power only
involves the discretion to determine how the law shall be enforced.
2. LEGISLATIVE power CANNOT be delegated. QUASI-legislative power CAN be delegated.

Tests of Delegation (applies to the power to promulgate administrative regulations )

1. COMPLETENESS test. This means that the law must be complete in all its terms and conditions when it leaves
the legislature so that when it reaches the delegate, it will have nothing to do but to enforce it.
2. SUFFICIENT STANDARD test. The law must offer a sufficient standard to specify the limits of the delegate’s
authority, announce the legislative policy and specify the conditions under which it is to be implemented.

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Definition of Quasi-Judicial Power
It is the power of administrative authorities to make determinations of facts in the performance of their official
duties and to apply the law as they construe it to the facts so found. The exercise of this power is only incidental
to the main function of administrative authorities, which is the enforcement of the law.

Determinative Powers
1. ENABLING powers
Those that PERMIT the doing of an act which the law undertakes to regulate and would be unlawful without
government approval.

Ex. Issuance of licenses to engage in a particular business.

2. DIRECTING powers
Those that involve the corrective powers of public utility commissions, powers of assessment under the revenue
laws, reparations under public utility laws, and awards under workmen’s compensation laws, and powers of
abstract determination such as definition-valuation, classification and fact finding

3. DISPENSING powers
Exemplified by the authority to exempt from or relax a general prohibition, or authority to relieve from an
affirmative duty. Its difference from licensing power is that dispensing power sanctions a deviation from a
standard.

4. SUMMARY powers
Those that apply compulsion or force against person or property to effectuate a legal purpose without a judicial
warrant to authorize such action. Usually without notice and hearing.

Ex. Abatement of nuisance, summary destraint, levy of property of delinquent tax payers

5. EQUITABLE powers
Those that pertain to the power to determine the law upon a particular state of facts. It refers to the right to, and
must, consider and make proper application of the rules of equity.

Ex. Power to appoint a receiver, power to issue injunctions

Kinds of Administrative Regulations

DISTINCTIONS LEGISLATIVE INTERPRETATIVE
1. Capacity that administrative agency Legislative Judicial
is acting in
2. What administrative agency is It supplements the statute by filling It says what the statute means
doing in the details
3. Force and effect Legislative regulations have the force Merely persuasive/Received by the
and effecr of law immediately upon courts with much respect but not
going into effect. Such is accorded by accorded with finality
the courts or by express provision of
statute.
Requisites of a Valid Administrative Regulation
1. Its promulgation must be authorized by the legislature.
2. It must be within the scope of the authority given by the legislature.
3. It must be promulgated in accordance with the prescribed procedure.
4. It must be reasonable

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Need for Previous Notice and Hearing
1. General Rule: Administrative rules of GENERAL application do NOT require previous notice and hearing.
2. Exception: When the legislature itself requires it and mandates that the regulation shall be based on certain
facts as determined at an appropriate investigation.
3. If the regulation is in effect a settlement of a controversy between specific parties, it is considered an
administrative adjudication, requiring notice and hearing.
Prescribing of Rates
It can be either:

1. LEGISLATIVE
If the rules/rates are meant to apply to all enterprises of a given kind throughout the country.
No prior notice and hearing is required.

2. QUASI-JUDICIAL
If the rules and rates imposed apply exclusively to a particular party, based upon a finding of fact. Prior notice
and hearing is required.

Requirement of Publication
Administrative Regulations that MUST be published:
1. Administrative regulations of GENERAL application.
2. Administrative regulations which are PENAL in nature.

Administrative regulations that do NOT NEED to be PUBLISHED:

1. Interpretative regulations
2. Internal rules and regulations governing the personnel of the administrative agency.
1. Letters of instruction issued by administrative superiors concerning guidelines to be followed by their
subordinates. (Tanada v. Tuvera)
Special Requisites of a Valid Administrative Regulation with a PENAL sanction
1. The law itself must make violation of the administrative regulation punishable.
2. The law itself must impose and specify the penalty for the violation of the regulation.
3. The regulation must be published.
Requisites for Proper Exercise of Quasi-Judicial Power
1. Jurisdiction
2. Due process

Administrative Due Process : Requirements

1. Right to Notice, be it actual or constructive

2. Reasonable opportunity to appear and defend his rights and to introduce witnesses
3. Impartial tribunal with competent jurisdiction
4. Finding or decision supported by substantial evidence

Exceptions to the Notice and Hearing Requirement

1. Urgency of immediate action
2. Tentativeness of the administrative action
3. Right was previously offered but not claimed
4. Summary abatement of a nuisance per se

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 5. Preventive suspension of a public servant facing administrative charges
6. Padlocking of filthy restaurants/theaters showing obscene movies
7. Cancellation of a passport of a person sought for criminal prosecution
8. Summary distraint and levy of properties of a delinquent taxpayer
9. Replacement of a temporary or acting appointee

Questions Reviewable on Judicial Review:

1. Questions of FACT
The general rule is that courts will not disturb the findings of administrative agencies acting within the
parameters of their own competence so long as such findings are supported by substantial evidence. By reason of
their special knowledge, expertise, and experience, the courts ordinarily accord respect if not finality to factual
findings of administrative tribunals.
2. Question of LAW
Administrative decision may be appealed to the courts independently of legislative permission.

It may be appealed even against legislative prohibition because the judiciary cannot be deprived of its inherent
power to review all decisions on questions of law.

Doctrine of Finality

Courts are reluctant to interfere with action of an administrative agency prior to its completion or finality, the
reason being that absent a final order or decision, power has not been fully and finally exercised, and there can
usually be no irreparable harm.

EXCEPTIONS: Interlocutory order affecting the merits of a controversy; Preserve status quo pending further
action by the administrative agency; Essential to the protection of the rights asserted from the injury threatened;
Officer assumes to act in violation of the Constitution and other laws; Order not reviewable in any other way;
Order made in excess of power

Doctrine of Primary Jurisdiction

1. This doctrine states that courts cannot or will not determine a controversy which requires the expertise,
specialized skills and knowledge of the proper administrative bodies because technical matters of intricate
questions of fact are involved.
2. Relief must first be obtained in an administrative proceeding before a remedy will be supplied by the court even
though the matter is within the proper jurisdiction of a court.

Doctrine of Prior Resort

When a claim originally cognizable in the courts involves issues which, under a regulatory scheme are within the
special competence of an administrative agency, judicial proceedings will be suspended pending the referral of
these issues to the administrative body for its view.

Note: The doctrines of primary jurisdiction and prior resort have been considered to be interchangeable.

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