G.R. No.

108399 July 31, 1997

ALUNAN III v MIRASOL

Facts
In 1991, Republic act No. 7160, otherwise known as the Local Government Code was enacted into law,
transferring control and responsibility of delivering basic services to the hands of local government units
(LGU).

Petitioners sought the review on certiorari, they cite Sec 532(d) of the RA 7160 which provides:
“The term of office of the kabataang barangay officials elected within the said period shall be extended
correspondingly to coincide with the term of office of those elected under this Code.”

Section 423 of the Code provides for a SK in every barangay, to be composed of a chairman, seven (7)
members, a secretary, and a treasurer. Section 532(a) provides that the first elections for the SK shall be
held thirty (30) days after the next local elections. The Code took effect on January 1, 1992.

The Commission on Elections issued Resolution No. 2499, providing guidelines for the holding of the
general elections for the SK on September 30, 1992 The guidelines placed the SK elections under the
direct control and supervision of the DILG, with the technical assistance of the COMELEC.2 After two
postponements, the elections were finally scheduled on December 4, 1992.

DILG, through then Secretary Rafael M. Alunan III

Art IX Sec 2(1):

Sec. 2. The Commission on Elections shall exercise the following powers and functions:
(1) Enforce and administer all laws and regulations relative to the conduct of an election, plebiscite,
initiative, referendum, and recall.

Issue(s)
The preliminary question is whether the holding of the second elections on May 13, 1996 rendered this
case moot and academic.
 Whether or not the Secretary of Interior and Local Government can "exempt" a local government
unit from holding elections for SK officers on December 4, 1992
 Whether or not the COMELEC can provide that "the Department of Interior and Local Government
shall have direct control and supervision over the election of sangguniang kabataan with the
technical assistance by the Commission on Elections."

Ruling

[1] The DILG followed Res No. 2499 issued by COMELEC and did not contravene Art IX Sec 2(1). Contests
involving SK elections do not fall within the jurisdiction of COMELEC;
[2] The authority granted was nothing more than the ascertainment of a fact, namely, whether between
January 1, 1988 and January 1, 1992 elections had been held in a given kabataang barangay;
[3] Section §532(d) may thus be deemed to be a curative law;
[4] The fact was that they already had their own, just two years before on May 26, 1990. Respondents'
equal protection argument violates the dictum that one wrong does not make another wrong right.

WHEREFORE, the decision of the Regional Trial Court of Manila, Branch 36 is REVERSED and the case
filed against petitioner by private respondents is DISMISSED.

G.R. Nos. 209287 January 3, 2015

ARAULLO v AQUINO
(Motion for Reconsideration)
PONENTE: Bersamin

TOPIC: Constitutionality of DAP, cross-border transfer

RULING OF THE COURT:

1.) The Court’s power of judicial review

Argument: The respondents argue that the Executive has not violated the GAA because savings as a
concept is an ordinary species of interpretation that calls for legislative, instead of judicial, determination.

Held: Untenable. The interpretation of the GAA and its definition of savings is a foremost judicial function.
This is because the power of judicial review vested in the Court is exclusive.

Endencia and Jugo v. David: The interpretation and application of said laws belong exclusively to the
Judicial department. And this authority to interpret and apply the laws extends to the Constitution. Before
the courts can determine whether a law is constitutional or not, it will have to interpret and ascertain the
meaning not only of said law, but also of the pertinent portion of the Constitution in order to decide whether
there is a conflict between the two, because if there is, then the law will have to give way and has to be
declared invalid and unconstitutional.

2.) Strict construction on the accumulation and utilization of savings

The exercise of the power to augment shall be strictly construed by virtue of its being an exception to the
general rule that the funding of PAPs shall be limited to the amount fixed by Congress for the purpose.
Necessarily, savings, their utilization and their management will also be strictly construed against expanding
the scope of the power to augment.15 Such a strict interpretation is essential in order to keep the Executive
and other budget implementors within the limits of their prerogatives during budget execution, and to
prevent them from unduly transgressing Congress’ power of the purse.

Pertinent provisions

Section 25(5), Article VI of the Constitution states:

No law shall be passed authorizing any transfer of appropriations; however, the President, the President of
the Senate, the Speaker of the House of Representatives, the Chief Justice of the Supreme Court, and the
heads of Constitutional Commissions may, by law, be authorized to augment any item in the general
appropriations law for their respective offices from savings in other items of their respective appropriations.

Section 38 and Section 39, Chapter 5, Book VI of the Administrative Code provide:

Section 38. Suspension of Expenditure of Appropriations. – Except as otherwise provided in the

General Appropriations Act and whenever in his judgment the public interest so requires, the President,
upon notice to the head of office concerned, is authorized to suspend or otherwise stop further expenditure
of funds allotted for any agency, or any other expenditure authorized in the General Appropriations Act,
except for personal services appropriations used for permanent officials and employees.

Section 39. Authority to Use Savings in Appropriations to Cover Deficits.—Except as otherwise

provided in the General Appropriations Act, any savings in the regular appropriations authorized in the
General Appropriations Act for programs and projects of any department, office or agency, may,
with the approval of the President, be used to cover a deficit in any other item of the regular
appropriations: Provided, that the creation of new positions or increase of salaries shall not be allowed to
be funded from budgetary savings except when specifically authorized by law: Provided, further, that
whenever authorized positions are transferred from one program or project to another within the same
department, office or agency, the corresponding amounts appropriated for personal services are also
deemed transferred, without, however increasing the total outlay for personal services of the department,
office or agency concerned.

Section 38 refers to the authority of the President “to suspend or otherwise stop further expenditure of funds
allotted for any agency, or any other expenditure authorized in the General Appropriations Act.” When the
President suspends or stops expenditure of funds, savings are not automatically generated until it has been
established that such funds or appropriations are free from any obligation or encumbrance, and that the
work, activity or purpose for which the appropriation is authorized has been completed, discontinued or
abandoned.

Although the withdrawal of unobligated allotments may have effectively resulted in the suspension or
stoppage of expenditures through the issuance of negative Special Allotment Release Orders (SARO), the
reissuance of withdrawn allotments to the original programs and projects is a clear indication that the
program or project from which the allotments were withdrawn has not been discontinued or abandoned.

At this point, it is likewise important to underscore that the reversion to the General Fund of unexpended
balances of appropriations – savings included – pursuant to Section 28 Chapter IV, Book VI of the
Administrative Code does not apply to the Constitutional Fiscal Autonomy Group (CFAG), which include
the Judiciary, Civil Service Commission, Commission on Audit, Commission on Elections, Commission on
Human Rights, and the Office of the Ombudsman.

On the other hand, Section 39 is evidently in conflict with the plain text of Section 25(5), Article VI of the
Constitution because it allows the President to approve the use of any savings in the regular appropriations
authorized in the GAA for programs and projects of any department, office or agency to cover a deficit in
any other item of the regular appropriations. As such, Section 39 violates the mandate of Section 25(5)
because the latter expressly limits the authority of the President to augment an item in the GAA to only
those in his own Department out of the savings in other items of his own Department’s appropriations.
Accordingly, Section 39 cannot serve as a valid authority to justify cross-border transfers under the DAP.

Augmentations under the DAP which are made by the Executive within its department shall, however,
remain valid so long as the requisites under Section 25(5) are complied with.

3.) The power to augment cannot be used to fund non-existent provisions in the GAA

Argument: The respondents assert, however, that there is no constitutional requirement for Congress to
create allotment classes within an item. What is required is for Congress to create items to comply with the
line-item veto of the President.

Held: Tenable. The Court reversed its ruling.

Indeed, Section 25(5) of the 1987 Constitution mentions of the term item that may be the object
of augmentation by the President, the Senate President, the Speaker of the House, the Chief Justice, and
the heads of the Constitutional Commissions. In Belgica v. Ochoa, we said that an item that is the distinct
and several part of the appropriation bill, in line with the item veto power of the President, must contain
“specific appropriations of money” and not be only general provisions.

Item, definition: the particulars, the details, the distinct and severable parts of the appropriation or of
the bill. an item of appropriation must be an item characterized by singular correspondence – meaning an
allocation of a specified singular amount for a specified singular purpose, otherwise known as a “line-item.”
This treatment not only allows the item to be consistent with its definition as a “specific appropriation of
money” but also ensures that the President may discernibly veto the same.
 Accordingly, the item referred to by Section 25(5) of the Constitution is the last and indivisible purpose of a
program in the appropriation law, which is distinct from the expense category or allotment class. There is
no specificity, indeed, either in the Constitution or in the relevant GAAs that the object
of augmentation should be the expense category or allotment class. In the same vein, the President
cannot exercise his veto power over an expense category; he may only veto the item to which that expense
category belongs to.

Further, in Nazareth v. Villar, we clarified that there must be an existing item, project or activity, purpose or
object of expenditure with an appropriation to which savings may be transferred for the purpose of
augmentation. Accordingly, so long as there is an item in the GAA for which Congress had set aside a
specified amount of public fund, savings may be transferred thereto for augmentation purposes.

Nonetheless, this modified interpretation does not take away the caveat that only DAP projects found in the
appropriate GAAs may be the subject of augmentation by legally accumulated savings. Whether or not the
116 DAP-funded projects had appropriation cover and were validly augmented require factual
determination that is not within the scope of the present consolidated petitions under Rule 65.

4. Cross-border transfers are constitutionally impermissible

Argument: Section 25(5), Article VI of the Constitution prohibits only the transfer of appropriation, not
savings.

Held: Section 25(5) is clear. The Court stood by its previous pronouncement

G.R. No. 118295 May 2, 1997

WIGBERTO E. TAÑADA v EDGARDO ANGARA
Facts:
Petitioners prayed for the nullification, on constitutional grounds, of the concurrence of the Philippine Senate
in the ratification by the President of the Philippines of the Agreement Establishing the World Trade
Organization (WTO Agreement, for brevity) and for the prohibition of its implementation and enforcement
through the release and utilization of public funds, the assignment of public officials and employees, as well
as the use of government properties and resources by respondent-heads of various executive offices
concerned therewith.

They contended that WTO agreement violates the mandate of the 1987 Constitution to “develop a self-
reliant and independent national economy effectively controlled by Filipinos x x x (to) give preference to
qualified Filipinos (and to) promote the preferential use of Filipino labor, domestic materials and locally
produced goods” as (1) the WTO requires the Philippines “to place nationals and products of member-
countries on the same footing as Filipinos and local products” and (2) that the WTO “intrudes, limits and/or
impairs” the constitutional powers of both Congress and the Supreme Court.

Issue:
Whether provisions of the Agreement Establishing the World Trade Organization unduly limit, restrict and
impair Philippine sovereignty specifically the legislative power which, under Sec. 2, Article VI, 1987
Philippine Constitution is ‘vested in the Congress of the Philippines.

Held:
No, the WTO agreement does not unduly limit, restrict, and impair the Philippine sovereignty, particularly
the legislative power granted by the Philippine Constitution. The Senate was acting in the proper manner
when it concurred with the President’s ratification of the agreement.

While sovereignty has traditionally been deemed absolute and all-encompassing on the domestic level, it
is however subject to restrictions and limitations voluntarily agreed to by the Philippines, expressly or
impliedly, as a member of the family of nations. Unquestionably, the Constitution did not envision a hermit-
type isolation of the country from the rest of the world. In its Declaration of Principles and State Policies,
the Constitution “adopts the generally accepted principles of international law as part of the law of the land,
and adheres to the policy of peace, equality, justice, freedom, cooperation and amity, with all nations.” By
the doctrine of incorporation, the country is bound by generally accepted principles of international law,
which are considered to be automatically part of our own laws. One of the oldest and most fundamental
rules in international law is pacta sunt servanda — international agreements must be performed in good
faith. “A treaty engagement is not a mere moral obligation but creates a legally binding obligation on the
parties x x x. A state which has contracted valid international obligations is bound to make in its legislations
such modifications as may be necessary to ensure the fulfillment of the obligations undertaken.”

By their inherent nature, treaties really limit or restrict the absoluteness of sovereignty. By their voluntary
act, nations may surrender some aspects of their state power in exchange for greater benefits granted by
or derived from a convention or pact. After all, states, like individuals, live with coequals, and in pursuit of
mutually covenanted objectives and benefits, they also commonly agree to limit the exercise of their
otherwise absolute rights. Thus, treaties have been used to record agreements between States concerning
such widely diverse matters as, for example, the lease of naval bases, the sale or cession of territory, the
termination of war, the regulation of conduct of hostilities, the formation of alliances, the regulation of
commercial relations, the settling of claims, the laying down of rules governing conduct in peace and the
establishment of international organizations. The sovereignty of a state therefore cannot in fact and in reality
be considered absolute. Certain restrictions enter into the picture: (1) limitations imposed by the very nature
of membership in the family of nations and (2) limitations imposed by treaty stipulations. As aptly put by
John F. Kennedy, “Today, no nation can build its destiny alone. The age of self-sufficient nationalism is
over. The age of interdependence is here.”

The WTO reliance on “most favored nation,” “national treatment,” and “trade without discrimination” cannot
be struck down as unconstitutional as in fact they are rules of equality and reciprocity that apply to all WTO
members. Aside from envisioning a trade policy based on “equality and reciprocity,” the fundamental law
encourages industries that are “competitive in both domestic and foreign markets,” thereby demonstrating
a clear policy against a sheltered domestic trade environment, but one in favor of the gradual development
of robust industries that can compete with the best in the foreign markets. Indeed, Filipino managers and
Filipino enterprises have shown capability and tenacity to compete internationally. And given a free trade
environment, Filipino entrepreneurs and managers in Hongkong have demonstrated the Filipino capacity
to grow and to prosper against the best offered under a policy of laissez faire.

WHEREFORE, the petition is DISMISSED for lack of merit.

G.R. No. L-119694 May 22, 1995

People Press Institute v COMELEC

FACTS: COMELEC issued resolution 2772 directing newspapers to provide provide free print space of not
less than one half (1/2) page for use as “COMELEC Space” which shall be allocated by the Commission,
free of charge, among all candidates within the area in which the newspaper, magazine or periodical is
circulated to enable the candidates to make known their qualifications, their stand on public issues and their
platforms and programs of government. Philippine Press Institute, a non-stock, non-profit organization of
newspaper and magazine publishers asks the Court to declare said resolution unconstitutional and void on
the ground that it violates the prohibition imposed by the Constitution upon the government, and any of its
agencies, against the taking of private property for public use without just compensation.
The Office of the Solicitor General, on behalf of COMELEC alleged that the resolution does not impose
upon the publishers any obligation to provide free print space in the newspapers. It merely established
guidelines to be followed in connection with the procurement of “COMELEC space”. And if it is viewed as
mandatory, the same would nevertheless be valid as an exercise of the police power of the State- a
permissible exercise of the power of supervision or regulation of the COMELEC over the communication
and information operations of print media enterprises during the election period to safeguard and ensure a
fair, impartial and credible election.
ISSUE: Whether the resolution was a valid exercise of the power of eminent domain?
HELD: No. The court held that the resolution does not constitute a valid exercise of the power of eminent
domain. To compel print media companies to donate “COMELEC-space” amounts to “taking” of private
personal property for public use or purposes without the requisite just compensation. The extent of the
taking or deprivation is not insubstantial; this is not a case of a de minimis temporary limitation or restraint
upon the use of private property. The monetary value of the compulsory “donation,” measured by the
advertising rates ordinarily charged by newspaper publishers whether in cities or in non-urban areas, may
be very substantial indeed.
The threshold requisites for a lawful taking of private property for public use are the necessity for the taking
and the legal authority to effect the taking. The element of necessity for the taking has not been shown by
respondent COMELEC. It has not been suggested that the members of PPI are unwilling to sell print space
at their normal rates to COMELEC for election purposes. Indeed, the unwillingness or reluctance of
COMELEC to buy print space lies at the heart of the problem. Similarly, it has not been suggested, let
alone demonstrated, that COMELEC has been granted the power of eminent domain either by the
Constitution or by the legislative authority. A reasonable relationship between that power and the
enforcement and administration of election laws by COMELEC must be shown; it is not casually to be
assumed.

The taking of private property for public use is, of course, authorized by the Constitution, but not without
payment of “just compensation” (Article III, Section 9). And apparently the necessity of paying compensation
for “COMELEC space” is precisely what is sought to be avoided by respondent Commission.

WHEREFORE, for all the foregoing, the Petition for Certiorari and Prohibition is GRANTED in part and
Section 2 of Resolution No. 2772 in its present form and the related letter-directives dated 22 March 1995
are hereby SET ASIDE as null and void, and the Temporary Restraining Order is hereby MADE
PERMANENT. The Petition is DISMISSED in part, to the extent it relates to Section 8 of Resolution No.
2772. No pronouncement as to costs.

G.R. No. 174697 July 8, 2010

CHAMBER OF REAL ESTATE AND BUILDERS' ASSOCIATIONS, INC. (CREBA)
vs.
ENERGY REGULATORY COMMISSION (ERC) and MANILA ELECTRIC COMPANY (MERALCO)

DECISION

BRION, J.:
This is a Petition for Certiorari with Prayer for the Issuance of a Temporary Restraining Order
and/or Writ of Preliminary Injunction[1] to nullify Section 2.6 of the Distribution Services and Open Access
Rules (DSOAR), promulgated by respondent Energy Regulatory Commission (ERC) on January 18,
2006. Petitioner Chamber of Real Estate and Builders Associations, Inc. asserts that Section 2.6 of the
DSOAR, which obligates certain customers to advance the amount needed to cover the expenses of
extending lines and installing additional facilities, is unconstitutional and contrary to Republic Act No. 9136,
otherwise known as The Electric Power Industry Reform Act of 2001 (EPIRA).
THE BACKGROUND FACTS
The petitioner is a non-stock, non-profit corporation, organized under the laws of the Republic of
the Philippines, with principal office at 3/F CREBA Center, Don Alejandro Roces Avenue cor. South A
Street, Quezon City. It has almost 4,500 members, comprising of developers, brokers, appraisers,
contractors, manufacturers, suppliers, engineers, architects, and other persons or entities engaged in the
housing and real estate business.[2]
 The ERC is a quasi-judicial and quasi-legislative regulatory body created under Section 38 of the
EPIRA, with office address at the Pacific Center Building, San Miguel
Avenue, Ortigas Center, Pasig City. It is an administrative agency vested with broad regulatory and
monitoring functions over the Philippine electric industry to ensure its successful restructuring and
modernization, while, at the same time, promoting consumer interest.[3]

Respondent Manila Electric Company (MERALCO) is a corporation organized under the laws of
the Republic of the Philippines, with principal office at Lopez Building, Ortigas Avenue, Pasig City. It is
engaged primarily in the business of power production, transmission, and distribution. It is the largest
distributor of electricity in the Philippines.[4]

Pursuant to its rule-making powers under the EPIRA, the ERC promulgated the Magna Carta for
Residential Electricity Consumers (Magna Carta), which establishes residential consumers rights to have
access to electricity and electric service, subject to the requirements set by local government units and
distribution utilities (DUs).[5] Article 14 of the Magna Carta pertains to the rights of consumers to avail of
extension lines or additional facilities. It also distinguishes between consumers located within 30 meters
from existing lines and those who are located beyond 30 meters; the latter have the obligation to advance
the costs of the requested lines and facilities, to wit:

Article 14. Right to Extension of Lines and Facilities.A consumer located within
thirty (30) meters from the distribution utilities existing secondary low voltage lines, has the
right to an extension of lines or installation of additional facilities, other than a service drop,
at the expense of the utility inasmuch as said assets will eventually form part of the rate
base of the private distribution utilities, or will be sourced from the reinvestment funds of
the electric cooperatives. However, if a prospective customer is beyond the said distance,
or his demand load requires that the utility extend lines and facilities, the customer may
initially fund the necessary expenditures.
Article 14 of the Magna Carta continues with a provision on how the costs advanced by the residential end-
user can be recovered:
To recover his aforementioned expenditures, the customer may either demand the
issuance of a notes payable from the distribution utility or refund at the rate of twenty-five
(25) percent of the gross distribution revenue derived for the calendar year, or, if available,
the purchase of preferred shares.

Revenue derived from additional customers tapped directly to the poles and
facilities so extended shall be considered in determining the revenues derived from the
extension of facilities.

The same article specifies that if a developer initially pays the cost of the extension lines but passes it to
the registered customer, the customer would still be entitled to recover the cost in the manner provided
under this article:
 When a developer initially paid the cost of the extension of lines to provide electric
service to a specific property and incorporated these expenses in the cost thereof, and that
property was purchased and transferred in the name of the registered customer, the latter
shall be entitled to the refund of the cost of the extension of lines, and exercise the options
for refund provided in this article.

On January 18, 2006, the ERC modified this provision when it issued the DSOAR. Section 2.6.1
reiterates the old rule requiring consumers located beyond 30 meters from existing lines to advance the
costs of the requested lines and facilities. Section 2.6.2 likewise provides that the costs advanced by
consumers may be refunded at the rate of 25% of the annual gross distribution revenue derived from all
customers connected to the line extension. However, Section 2.6.2 amends Article 14 of the Magna Carta
by limiting the period for the refund to five years, whether or not the amount advanced by the consumer is
fully paid. Section 2.6 of the DSOAR decrees that:

2.6. MODIFICATIONS AND NEW PHYSICAL CONNECTIONS: RESIDENTIAL

2.6.1 RIGHT TO EXTENSION OF LINES AND FACILITIES In accordance with the Magna
Carta, a residential End-user located within thirty (30) meters from the distribution utilities
existing secondary low voltage lines has the right to an extension of lines or installation of
additional facilities, other than a service drop, at the expense of the utility. However, if a
prospective customer is beyond the said distance, the customer shall advance the amounts
necessary to cover the expenditures on the facilities beyond thirty (30) meters.

2.6.2 REFUNDTo recover the aforementioned advanced payment, the customer may
either demand the issuance of a notes payable from the distribution utility or a refund at
the rate of twenty-five (25) percent of the gross distribution revenue derived from all
customers connected to the line extension for the calendar year until such amounts are
fully refunded or for five (5) years whichever period is shorter, or, if available, the purchase
of preferred shares. Revenue derived from additional customers tapped directly to the
poles and facilities so extended shall be considered in determining the revenues derived
from the extension of facilities.

Distribution Connection Assets paid for through advances from residential End-users shall
be deemed plant in service in the accounts of the DU. Unpaid advances shall be a
reduction to plant in service. If replacement becomes necessary at any time for any
Distribution Connection Assets paid for by residential End-users, the DU shall be solely
responsible for the cost of such replacement which shall become plant in service in the
accounts of the DU, and shall not require another advanced payment from the connected
residential End-users unless the replacement is due to End-user fault.

The petitioner alleged that the entities it represented applied for electrical power service, and
MERALCO required them to sign pro forma contracts that (1) obligated them to advance the cost of the
construction of new lines and other facilities and (2) allowed annual refunds at 25% of the gross distribution
revenue derived from the customers electric service, until the amount advanced is fully paid, pursuant to
Section 2.6 of the DSOAR.[6]
The petitioner seeks to nullify Section 2.6 of the DSOAR, on the following grounds: (1) it is
unconstitutional since it is oppressive and it violates the due process and equal protection clauses; (2) it
contravenes the provisions of the EPIRA; and (3) it violates the principle of unjust enrichment. [7]
 Petitioner claims that Section 2.6 of the DSOAR is unconstitutional as it is oppressive to the affected
end-users who must advance the amount for the installation of additional facilities. Burdening residential
end-users with the installation costs of additional facilities defeats the objective of the law the electrification
of residential areas and contradicts the provisions of the legislative franchise, requiring DUs to be financially
capable of providing the distribution service. Moreover, the questioned provision violates the equal
protection clause since the difference in treatment between end-users residing within 30 meters of the
existing lines and those beyond 30 meters does not rest on substantial distinctions. [8]

In addition, the petitioner alleges that the assailed provision contravenes Sections 2, 23, 41 and 43
of the EPIRA[9] which are geared towards ensuring the affordability of electric power and the protection of
consumers.[10] Lastly, requiring consumers to provide the huge capital for the installation of the facilities,
which will be owned by distribution utilities such as MERALCO, results in unjust enrichment.[11]
THE RESPONDENTS CASE
a. The ERC Position

Contradicting the petitioners arguments, the ERC avers that it issued Section 2.6 of the DSOAR as
an exercise of police power directed at promoting the general welfare. The rule seeks to address the
inequitable situation where the cost of an extension facility benefiting one or a few consumers is equally
shared by them.[12]

The ERC likewise asserts that the equal protection clause is observed since the distinction between
end-users residing within 30 meters of the existing lines and those beyond 30 meters is based on real and
substantial differences, namely: (1) proximity of end-user service drop to the main distribution lines; (2)
manner of checking status service; (3) system loss risk; (4) cost in installing the facilities; and (5) additional
risk posed by the possibility of the customer defaulting in his electric service with the DU. [13]

The ERC also maintains that Section 2 of the DSOAR is consistent with Sections 2, 23, 41 and 43
of the EPIRA. By not subjecting most consumers to the payment of installation costs benefitting customers
located beyond a reasonably-set boundary, the provision in question gives effect to the EPIRA policy to
ensure that the prices of electricity remain affordable, transparent, and reasonable to the majority. The
policy of accelerating the total electrification of the country is also served when the residents of far-flung
areas are given the option to apply for extension lines. This option is subject only to the condition that the
cost of the extension of existing lines is advanced by the end-user, who will eventually be reimbursed;
without such condition, businesses will be reluctant to provide service connection in remote areas.[14]

Additionally, the ERC points out that the DSOAR provisions do not result in unjust enrichment since
the DUs do not stand to be materially benefited by the customers advances. The DUs have the obligation
to reimburse the customers the advances within five years, and whatever advances are unpaid during the
five-year period are recorded as reductions in plant in service.[15]
 Finally, it argues that petitioner lacks the standing to file the present suit since the petitioner is not
an end-user who will sustain a direct injury as a result of the issuance and implementation of the DSOAR.
The ERC likewise maintains the petition for certiorari must fail since petitioner fails to impute grave abuse
of discretion to the ERC.[16]
b. The MERALCO Position
MERALCO reiterates the defenses raised by the ERC. It also contends that the present petition
does not involve the ERCs judicial and quasi-judicial functions so that a petition for certiorari is an improper
remedy. MERALCO likewise argues that the petition for certiorari, assuming it to be a correct remedy,
should be dismissed since the petitioner failed to observe the doctrine of hierarchy of courts by filing an
original petition with this Court.

On the merits, MERALCO points out that even if Section 2.6 of the DSOAR is struck down, the
provision in the Magna Carta, on the same point, would nevertheless require end-users located beyond 30
meters from existing lines to advance the cost. The petitioners members are not also end-users, but
subdivision developers, brokers, and various entities who are not affected by the questioned provision; if a
developer would apply for electric service, the terms and conditions of the service will not be governed by
Section 2.6 of the DSOAR.[17]

MERALCO also elaborates on why the provision does not result in unjust enrichment and justifies
the distinction between end-users within the 30-meter limit and those located outside of this limit. The
DSOAR provides that the unpaid amounts that the end-users advanced for the electrical facilities are not
included in plant in service. The total plant in service is the basis in fixing the rates collected by the DU from
all its customers. By having the end-users, located 30 meters away from existing lines, advance the amount,
this amount is no longer included in the rates passed on to regular consumers. The DSOAR further limits
the subsidies by regular consumers, by limiting the amount to be recovered to 25% and to five years. Thus,
if the costs of the lines are too great and the revenues are too small, it is the end-user who would bear the
cost and not the regular customers.[18]
THE ISSUES
The petitioner summarizes the issues as follows:
Procedural Issues:
A. Whether petitioner can challenge the constitutionality of a quasi-legislative act (i.e., the
Rules) in a petition for certiorari under Rule 65 of the Rules of Court.
B. Whether the Honorable Supreme [Court] has original jurisdiction over this case.
C. Whether petitioner has legal standing to sue.
D. Whether petitioner is authorized to file this suit.

Substantive issues:
A. Whether Section 2.6 of the Rules violates the due process and equal protection clause
of the Constitution.
B. Whether Section 2.6 of the Rules violates R.A. No. 9136.
C. Whether Section 2.6 of the Rules violates the rule against unjust enrichment.
D. Whether Section 2.6 of the Rules is a valid exercise of police power.[19]
 THE COURTS RULING

We resolve to dismiss the petition for its serious procedural and technical defects.

a. The Petitioner Has No Legal Standing

We do not see the petitioner as an entity with the required standing to assail the validity of Section
2.6 of the DSOAR.

Legal standing or locus standi refers to a partys personal and substantial interest in a case, arising
from the direct injury it has sustained or will sustain as a result of the challenged governmental action. Legal
standing calls for more than just a generalized grievance. The term interest means a material interest, an
interest in issue affected by the governmental action, as distinguished from mere interest in the question
involved, or a mere incidental interest. Unless a persons constitutional rights are adversely affected by a
statute or governmental action, he has no legal standing to challenge the statute or governmental action. [20]

The petitioner expressly enumerates its members to be the following: developers, brokers,
appraisers, contractors, manufacturers, suppliers, engineers, architects, and other persons or entities
engaged in the housing and real estate business.[21] It does not question the challenged DSOAR provision
as a residential end-user and it cannot because the challenged provision only refers to the rights and
obligations of DUs and residential end-users; neither the petitioner nor its members are residential end-
users. In fact, the DSOAR has separate provisions for the extension of lines or installation of additional
facilities for non-residential end-users, under its Section 2.7 entitled Modifications and New Connections:
Non-Residential. Thus, neither the petitioner nor its members can claim any injury, as residential end-users,
arising from the challenged Section 2.6 of the DSOAR, nor cite any benefit accruing to them as residential
end-users that would result from the invalidation of the assailed provision.

The petitioner meets the objection to its capacity to bring suit through the claim that subdivision
developers are directly affected by the assailed provision because MERALCO has asked them to advance
the cost of installing additional lines and facilities, in accordance with Section 2.6 of the DSOAR. [22] This
claim is specious.

Section 1, Rule I of the Revised Rules and Regulations Implementing the Subdivision and
Condominium Buyers Protective Decree (PD 957) and Other Related Laws provides the minimum design
standards for subdivisions. These minimum standards include an electrical power supply, described under
subsection C(7) thus:

7. Electrical Power Supply System

 Mandatory individual household connection to primary and/or alternate sources of power.

Provision of street lighting per pole is mandatory at 50-meter distance and every other pole
if distance is less than 50 meters.

Thus, subdivision developers are obligated under these rules to include in their design an electrical power
supply system that would link individual households within their subdivision to primary and/or alternate
sources of power. This requirement is intended to protect the rights of prospective subdivision
homeowners,[23] and exists regardless of the validity of Section 2.6 of the DSOAR.

In other words, the invalidation of Section 2.6 of the DSOAR would not permit subdivision
developers to renege from their duty to ensure power supply and to pass the costs of installing a proper
electrical power supply system to MERALCO. In this light, it is immaterial that MERALCO did require certain
developers to sign the Agreement for Extension of Lines And/Or Additional Facilities [24] as this was required
under the provisions of the Magna Carta, not under the assailed DSOAR provision that, in the first place,
does not govern the relationship of subdivision developers (who are not residential end-users) and
MERALCO.
a. 1. No Transcendental Issue Involved

The petitioner cites instances when the Court, in the exercise of its discretion, waived the
procedural rule on standing in cases that raised issues of transcendental importance. We do not, however,
view the present case as one involving a matter of transcendental importance so that a waiver of the locus
standi rule should be recognized.

The Court, through Associate Justice Florentino P. Feliciano (now retired), provided the following
instructive guides as determinants in determining whether a matter is of transcendental importance: (1) the
character of the funds or other assets involved in the case; (2) the presence of a clear case of disregard of
a constitutional or statutory prohibition by the public respondent agency or instrumentality of the
government; and (3) the lack of any other party with a more direct and specific interest in the questions
being raised.[25]

In this case, the three determinants are glaringly absent. Public funds are not involved. The allegations of
constitutional and statutory violations of the public respondent agency are unsubstantiated by facts and are
mere challenges on the wisdom of the rules, a matter that will be further discussed in this Decision. In
addition, parties with a more direct and specific interest in the questions being raised the residential end-
users undoubtedly exist and are not included as parties to the petition. As the Court did in Anak Mindanao
Party-List Group v. Executive Secretary,[26] we cannot waive the rule on standing where the three
determinants were not established.
b. Rule 65 is both a Wrong and Misapplied Remedy
 The petitioner’s choice of remedy a petition for certiorari under Rule 65 of the Rules of Court is an
incorrect remedy.

Rule 65, Section 1 of the Rules of Court mandates that the remedy of certiorari is directed against
a tribunal, board, or officer exercising judicial or quasi-judicial functions:

Section 1. Petition for certiorari.When any tribunal, board or officer exercising judicial or
quasi-judicial functions has acted without or in excess of its or his jurisdiction, or with
grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no
appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law, a person
aggrieved thereby may file a verified petition in the proper court, alleging the facts with
certainty and praying that judgment be rendered annulling or modifying the proceedings of
such tribunal, board or officer, and granting such incidental reliefs as law and justice may
require.

Judicial functions are exercised by a body or officer clothed with authority to determine what the law is and
what the legal rights of the parties are with respect to the matter in controversy. [27] Quasi-judicial function is
a term that applies to the action or discretion of public administrative officers or bodies given the authority
to investigate facts or ascertain the existence of facts, hold hearings, and draw conclusions from them as
a basis for their official action using discretion of a judicial nature.[28] Thus, in Philnabank Employees
Association v. Estanislao, we did not grant a petition for certiorari against the Department Secretary who
did not act in any judicial or quasi-judicial capacity but merely promulgated the questioned implementing
rules under the mandate of Republic Act No. 6971, the applicable law in this cited case. [29]

Contrary to Section 2, Rule III of the Rules of Court, the petitioner and its members are not even
parties who are aggrieved by the assailed DSOAR provision, as already discussed above. Even if they had
been properly aggrieved parties, the petition must still be dismissed for violation of yet another basic
principle applicable to Rule 65. This rule requires, for a petition for certiorarito be an appropriate remedy,
that there be no appeal or plain, speedy, and adequate remedy in the ordinary course of law. [30]Since the
petitioner assails the validity of a rule or statute and seeks our declaration that the rule is unconstitutional,
a petition for declaratory relief under Section 1, Rule 63 of the Rules of Court [31] provides a remedy more
appropriate than certiorari.

Furthermore, the Court of Appeals and the Supreme Court have original concurrent jurisdiction
over petitions for certiorari; the rule on hierarchy of courts determines the venue of recourses to these
courts. In original petitions for certiorari, the Supreme Court will not directly entertain this special civil action
as in the present case unless the redress desired cannot be obtained elsewhere based on exceptional and
compelling circumstances justifying immediate resort to this Court.[32]

In the present case, the petitioner alleges that the constitutionality and legality of the assailed
provision are of immense importance to the public[33] and are a recipe for financial ruin of the affected
parties.[34] Moreover, it maintains that its petition raises transcendental and weighty issues that would merit
the Honorable Courts exercise of original jurisdiction.[35] To support its position, it cites the cases of
the Senate of the Philippines v. Ermita[36] and Ople v. Torres.[37]

Senate of the Philippines v. Ermita[38] was a case for certiorari and prohibition, while our Decision
in Ople v. Torres[39]did not clearly state whether the case was filed as a petition for certiorari. But granting
that both cases were filed as petitions for certiorari, they prompted the Court to suspend its rules of
procedure as they involved clear violations of the Constitution which urgently needed to be
addressed. Moreover, they were unquestionably filed by the proper parties.

The petitioners in the Ermita case included the Philippine Senate, which assailed Executive Order
No. 464 for infringing on their prerogatives as legislators, to conduct inquiries in aid of legislation. [40] We
had to immediately resolve this case since the implementation of the challenged order had already resulted
in the absence of officials invited to Senate hearings.
In the Ople case, Senator Blas F. Ople sought to invalidate Administrative Order No. 308, which
establishes a system of identification that is all-encompassing in its scope, [and that] affects the life and
liberty of every Filipino citizen and foreign resident.[41] The petition was based on two important
constitutional grounds: (1) usurpation of the power of Congress to legislate and (2) impermissible intrusion
into the citizenrys protected zone of privacy.
In the present case, the petitioner cannot come before this Court using an incorrect remedy and
claim that it was oppressed, or that its rights to due process and equal protection have been violated by an
administrative issuance that does not even affect its rights and obligations. The writ of certiorari is an
extraordinary remedy that the Court issues only under closely defined grounds and procedures that litigants
and their lawyers must scrupulously observe. They cannot seek refuge under the umbrella of this remedy
on the basis of an undemonstrated claim that they raise issues of transcendental importance, while at the
same time flouting the basic ground rules for the remedys grant.[42]
These conclusions render any further discussion of the improperly raised substantive issues
unnecessary.

WHEREFORE, premises considered, we hereby DISMISS the petition for its serious procedural and
technical defects. Costs against the petitioner.