FUNA v. DUQUE III ○ The charters of said GOCCs do not forbid the inclusion of the CSC Chairman.

Sec. 14, Chap. 3, Title I-A, Book V of the Admin. Code of 1987 - the Chairman of the CSC shall be a ISSUE #1: W/N Sec. 14, Chap. 3, Title I-A, Book V of the Admin. Code is unconstitutional - NO
member of the BOD or of other governing bodies of government entities whose functions affect the career ● The CSC Chairman’s membership in a governing body is dependent on the condition that
development, employment, status, rights, privileges, and welfare of government officials and employees, such the functions of the government entity where he will sit as its Board member must affect
as the GSIS, Foreign Service Board, Foreign Trade Service Board, National Board for Teachers, and such
the career development, employment status, rights, privileges, and welfare of government
other similar boards as may be created by law.
officials and employees. Based on this, there is no irregularity in said provision because
Sec. 13, Art. 7, 1987 Constitution - The President, VP, the Members of the Cabinet, and their deputies or matters affecting the career development, rights and welfare of government employees are
assistants shall not, unless otherwise provided in this Constitution, hold any other office or employment during among the primary functions of the CSC and the Chairman’s membership therein must be
their tenure. They shall not, during said tenure, directly or indirectly, practice any other profession, participate considered to be derived from his position as such.
in any business, or be financially interested in any contract with, or in any franchise, or special privilege
granted by the Government or any subdivision, agency, or instrumentality thereof, including GOCCs or their ISSUE #2: W/N EO 894 and Duque’s inclusion in the BOD are unconstitutional - YES
subsidiaries. They shall strictly avoid conflict of interest in the conduct of their office.
● Being an appointive public official who does not occupy a Cabinet position (enumerated under
Sec. 1 Art. 9-A, 1987 Constitution - The Constitutional Commissions, which shall be independent, are the Sec. 13, Art. 7), Duque was thus covered by Sec. 7, par. 2, Article 9-B. He can hold any other
CSC, the COMELEC, and the COA. office or employment in the Government during his tenure if such holding is allowed by law or by
the primary functions of his position (meaning in an ex officio capacity).
Sec. 2 Art. 9-A, 1987 Constitution - No Member of a Constitutional Commission shall, during his tenure, ○ The term ex officio means “from office or by virtue of office.” It refers to an authority
hold any other office or employment. Neither shall he engage in the practice of any profession or in the active derived from official character merely, not expressly conferred upon the individual
management or control of any business which in any way may be affected by the functions of his office, nor character, but rather annexed to the official position.
shall he be financially interested, directly or indirectly, in any contract with, or in any franchise or privilege
● The Constitution describes the CSC as the central personnel agency of the government and is
granted by the Government, any of its subdivisions, agencies, or instrumentalities, including GOCCs or their
subsidiaries. principally mandated to establish a career service and adopt measures to promote morale,
efficiency, integrity, responsiveness, progressiveness, and courtesy in the civil service; to
Sec. 7, par. 2, Article 9-B, 1987 Constitution - Unless otherwise allowed by law or the primary functions of strengthen the merit and rewards system; to integrate all human resources development programs
his position, no appointive official shall hold any other office or employment in the Government or any for all levels and ranks; and to institutionalize a management climate conducive to public
subdivision, agency or instrumentality thereof, including GOCCs or their subsidiaries. accountability.
● Said GOCCs are vested by their respective charters with various powers and functions to carry out
FACTS:
the purposes for which they were created. While powers and functions associated with
● PGMA appointed Francisco Duque III (Duque) as the Acting CSC Chairman. Soon after, PGMA
appointments, compensation and benefits affect the career development, employment status,
passed EO 864, which included the CSC Chairman in the Board of Directors (BOD) of the GSIS,
rights, privileges, and welfare of government officials and employees, said GOCCs are also tasked
the Philippine Health Insurance Corp. (PHIC), the Employees’ Compensation Commission (ECC),
to perform other corporate powers and functions that are not personnel-related. All of these
and the Home Dev’t Mutual Fund (HDMF) - collectively pertained to as GOCC’s hereinafter.
powers and functions, whether personnel-related or not, are carried out and exercised by the BOD
● Dennis Funa, in his capacity as taxpayer, concerned citizen and lawyer, filed a petition challenging
of said GOCCs.
the constitutionality of EO 864, as well as Section 14, Chapter 3, Title I-A, Book V of the Admin.
○ When the CSC Chairman sits as a member of the BOD of said GOCCs, he may
Code (Admin. Code, for brevity), and the designation of Duque as a member of the BOD of said
exercise these powers and functions, which are not anymore derived from his position
GOCCs.
as CSC Chairman, such as imposing interest on unpaid or unremitted contributions,
● Funa’s arguments:
issuing guidelines for the accreditation of healthcare providers, or approving
○ EO 864 and the said provision of the Admin. Code violate the independence of the
restructuring proposals in the payment of unpaid loan amortizations.
CSC, which was constitutionally created to be protected from outside influences and
○ Duque’s designation as member of the governing Boards of said GOCCs entitles him
political pressures due to the significance of its government functions. Since said
to receive per diem, a form of additional compensation that is disallowed by the
GOCCs belong under the Executive Dept., this effectively places Duque under the
concept of an ex officio position by virtue of its clear contravention of the proscription
control of the President, thereby violating the independence of the CSC.
set by the Constitution.
○ Said provision of the Admin. Code unconstitutionally expands the role of the CSC,
● PHILHEALTH and ECC have the status of a government corporation and are deemed attached to
which is primarily centered on personnel-related concerns involving government
the DOH and the DOLE respectively. On the other hand, the GSIS and HDMF fall under the OP.
workers, to include insurance, housing and health matters of employees in the
○ The corporate powers of these GOCCs are exercised thru their BOD, members of
government service. The independence of the CSC will not be compromised if these
which are all appointed by the President Thus, said GOCCs are under the control of
matters are instead addressed by entering into a MOA or by issuing joint circulars with
the President and Duque’s inclusion would ultimately impair the CSC’s independence.
said GOCCs, rather than allowing a member of the CSC to sit as a member of the BOD
● All official actions of Duque as a Director/Trustee of said GOCCs are presumed valid, binding and
of these GOCCs.
effective as if he was the officer legally appointed and qualified for the office. The acts of the de
○ EO 864 and said provision of the Admin. Code violate the prohibition imposed upon
facto officer are just as valid for all purposes as those of a de jure officer, insofar as the public or
members of constitutional commissions from holding any other office/employment;
third persons who are interested therein are concerned.
consequently, a conflict of interest may arise.
● Duque’s arguments, thru the Solicitor General: PETITION PARTIALLY GRANTED. ADMIN. CODE PROVISION IS VALID, EO 894 and DUQUE’S
○ Said GOCCs have original charters which exempt them from the control of the APPOINTMENT IS INVALID AND UNCONSTITUTIONAL.
President, thus Duque’s designation does not impair the CSC’s independence.
○ Duque’s membership in said GOCCs merely imposes additional duties and functions
as an incident and necessary consequence of his appointment as CSC Chairman.
Thus, he merely holds these directorships in an ex officio capacity, invoking the ruling
in Civil Liberties v. Exec. Sec.