China Banking Corp. v.

Members of the Board of Trustees

G.R. No. 131787/ May 19, 1999 / GONZAGA-REYES, J./ADMIN-LIMITS ON RULE-MAKING ISSUES & RATIO.
POWER/CUSTODIO 1. WoN the HDMF acted in excess of jurisdiction or with grave abuse of discretion
amounting to lack of jurisdiction in issuing the assailed amendment. (YES)
NATURE Petition for Certiorari
PETITIONERS China Banking Corp. and CBC Properties and Computer Cetner, Inc. It is well settled that the rules and regulations which are the product of a delegated
RESPONDENTS Members of the Board of Trustees Home Development Mutual Fund power to create new legal provisions that have the effect of law, should be within the
(HDMF), HDMF President and HDMF scope of the statutory authority granted by the legislature to the Administrative
agency. Department zeal may not be permitted to outrun the authority conferred by
SUMMARY. CBC filed for a certificate of waiver from participating in the PAG-IBIG fund statute.
but were denied by the HDMF for having an inferior retirement plan. CBC is assailing the
validity of the rules and regulations implemented by HDMF, requiring that a company must In the instant case, the legal meaning of the words “and/or” should be taken in its ordinary
have a provident/retirement and housing plan superior to that provided under the PAG-IBIG signification. The term is used to avoid a construction which by the use of the disjunctive “or”
Fund to be entitled to exemption/waiver from fund coverage. This, according to CBC, is in alone will exclude the combination of several of the alternatives or by the use of the
excess of HDMF’s rule-making powers. conjunctive “and” will exclude the efficacy of any one of the alternatives standing alone. The
The Court held that the respondents went beyond their jurisdiction when they required two intention of the legislature in using the term “and/or” is that the word “and” and the word “or”
superior plans because the basic law from which the IRR was based states that a superior are to be used interchangeably.
retirement and/or housing plan/s would be enough to qualify for the exemption.
DOCTRINE. The rules and regulations which are the product of a delegated power to create It is clear that Section 19 of P.D. No. 1752, intended that an employer with a provident
new or additional legal provisions that have the effect of law should be within the scope of the plan or an employee housing plan superior to that of the fund may obtain exemption from
statutory authority granted by the legislature to the administrative agency. Department zeal coverage. If the law had intended that the employee should have both a superior provident
may not be permitted to outrun the authority conferred by statute. plan and a housing plan in order to qualify for exemption, it would have used the words “and”
instead of “and/or”. By removing the disjunctive word “or” in the implementing rules the
FACTS. respondent Board has exceeded its authority. 
 Pursuant to Section 19 of PD 1752 (Home Development Mutual Fund Law of 1980),
CBC and CBC-PCCI were granted by the HDMF certificates of waiver dated 7 July 1995 While it may be conceded that the requirement of the concurrence of both plans to qualify for
and January 19,1996 for a Superior Retirement Plan. exemption would strengthen the Home Development Mutual Fund and make it more effective
 In June 1994, RA 7742 amended PD 1752, stating that a company must have a both as a savings generation and a house building program, the basic law should prevail as the
provident/retirement and housing plan superior to that provided under the PAG-IBIG embodiment of the legislative purpose, and the rules and regulations issued to implement said
Fund to be entitled to exemption/waiver from fund coverage. law cannot go beyond its terms and provisions.
 CBC and CBC-PCCI applied for renewal of waiver of coverage from the fund for 1996,
but applications were disapproved because it was indicated that their retirement plan was DECISION.
not superior to PAG-IBIG Fund. Petition given due course; assailed orders set aside. Assailed rules declared null and void.
 CBC and CBC-PCCI filed a petition for certiorari and prohibition before the RTC of
Makati seeking to annul and declare void the Amendment and the Guidelines for having
been issued in excess of jurisdiction and with grave abuse of discretion amounting to lack
of jurisdiction alleging that in requiring the employer to have both a retirement/provident
plan and an employee housing plan in order to be entitled to a certificate of waiver or
suspension of coverage from the HDMF, the HDMF Board exceeded its rule-making
power.
 RTC: Dismissed the petition for certiorari, stating that the denial or grant of an
application for waiver/coverage is within the power and authority of the HDMF Board,
and the said Board did not exceed its jurisdiction or act with grave abuse of discretion in
denying the applications
 Petitioners do not question the power of respondent HDMF, as an administrative agency,
to issue rules and regulations to implement PD 1752 and Section 5 of RA 7742; however,
the subject amendment and guidelines issued by it should be set aside and declared null
and void for being inconsistent with the enabling law PD 1752 as amended by RA 7742,
which merely requires a pre- condition for exemption of coverage, the existence of either
a superior provident (retirement) plan or a superior housing plan and not the concurrence
of both plans.