280. Describe the Administrative Code of 1987.

Held: 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 quasilegislative 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])
281. What is Administrative Power?
Held: 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])
282. What is an Administrative Order?
Held: 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])
283. What is the
Philippines?

Government

of

the

Republic

of

the

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)
284. 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)
285. 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)
286. 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)
287. 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)
288. 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)

289. 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)
290. 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)
291. 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)
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])
293. 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
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, 1 st Div.
[Pardo])
294. 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 Galvezs 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
Xxx
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
countrys 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 countrys 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.
Xxx
Having the capacity to sue or be sued, it should thus be the BCDA
which may file an action to cancel petitioners 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
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
Authrotiy. 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])

295. 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 NTCs
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.
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, 1 st Div.
[Ynares-Santiago])
296. 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 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.

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).

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.

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.

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.
Xxx
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:

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])
297. May a person be held liable for violation of
administrative regulation which was not published?

an

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 Peoples 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.
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])
298. 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.

administrative superior to a subordinate regarding the performance of

their duties, a circumstance which does not obtain in the case at bench.
Xxx
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])
299. 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?

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.

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.

In this regard, the Solicitor Generals 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

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 PHOTOKINAs contention that there is
already a perfected contract. While we held in Metropolitan Manila
Development Authority v. Jancom Environmental Corporation that the

Xxx

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.
Xxx
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
COMELECs 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 multiyear 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 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
Xxx

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.
Xxx
In fine, we rule that PHOTOKINA, though the winning bidder, cannot
compel the COMELEC to formalize the contract. Since PHOTOKINAs 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 QuijanoPadilla, G.R. No. 151992, Sept. 18, 2002, En Banc [SandovalGutierrez])
300. 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 illadvised or improvident action. (Commission on Elections v. Judge
Ma. Luisa Quijano-Padilla, G.R. No. 151992, Sept. 18, 2002, En
Banc [Sandoval-Gutierrez])
301. 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.
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.])
302. 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.])

303. 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 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])
304. 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.])

305. 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])
306. Discuss the Doctrine of Exhaustion of Administrative
Remedies. What are the exceptions thereto.
Held: 1. 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 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 courts judicial power can be sought. The premature
invocation of courts jurisdiction is fatal to ones 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:
when there is a violation of due process;
when the issue involved is purely a legal question;
when the administrative action is patently illegal amounting to lack
or excess of jurisdiction;
when there is estoppel on the part of the administrative agency
concerned;
when there is irreparable injury;
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;
when to require exhaustion of administrative remedies would be
unreasonable;
when it would amount to a nullification of a claim;

when the subject matter is a private land in land case proceeding;

when the rule does not provide a plain, speedy and adequate
remedy, and
when there are circumstances indicating the urgency of judicial
intervention.
(Paat v. CA, 266 SCRA 167 [1997])

2. 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. (Carale v. Abarintos, 269 SCRA 132,
March 3, 1997, 3rd Div. [Davide])