BIR ISSUANCES FOR THE MONTH OF DECEMBER

DECEMBER 2009 VOLUME II, ISSUE No. 12

L C A L C A L C A
LINES LINES LINES
Inside this issue:
BIR issuances
for the month
of December
(continuation)
2
Supreme
Court Issu-
ances
8
RA 9775 10
RA 9729 13
Jurisprudence
14
JLs Corner 21


REVENUE REGULA-
TIONS NO. 9-2009
The general require-
ments for Electronic
Bookkeeping are
the following:

1. A taxpayer shall
maintain all records
that are necessary
for the determina-
tion of the correct
tax liability under
Section 32 of the
NIRC. All required
records must be
made available on
request by the
Commissioner of
Internal Revenue on
its authorized repre-
sentatives.

2. If a taxpayer re-
tains records re-
quired to be kept
under this regula-
tion in both elec-
tronic and hard-
copy formats, the
taxpayer shall make
the records availa-
ble to the Bureau of
Internal Revenue in
electronic format
upon request of the
Commissioner or its
authorized repre-
sentative.

3. Nothing in this
regulation shall be
construed to prohib-
it a taxpayer from
demonstrating tax
compliance with
traditional hard-
copy documents or
reproductions there-
of, in whole or in
part, whether or not
such taxpayer also
has retained or has
the capability to
retain records on
electronic or other
storage media in
accordance with this
regulation. Howev-
er, this subsection
shall not relieve the
taxpayer of the obli-
gation to comply
with the previous
subsection of this
regulation.
The requirements
for Electronic
Recordkeeping for
Large Taxpayers are
the following:

1. All Large Taxpay-
ers classified under
Revenue Regula-
tions No. 1-98 are
required to maintain
Computerized Ac-
counting System
(CAS) or compo-
nents thereof. Ac-
cordingly, all books
of accounts and ac-
counting records
shall be in electronic
formats.

2. All Large Taxpay-
ers who are cur-
rently maintaining
their books of ac-
counts and account-
ing records in mutu-
al form are required
to register their
Computerized Ac-
counting System
not later than De-
cember 31, 2009.

3. A Large Taxpayer
using commercial
and/or customized
software to keep
books and records
electronically is not
relieved of the re-
sponsibility to keep
adequate electronic
records because of
deficiencies in the
software.
The requirements
for Electronic
Recordkeeping of
Electronic Records:

A. General Require-
ments

1. Electronic records
used to establish tax
compliance shall con-
tain sufficient trans-
action-level detail
information so that
the details underly-
ing the electronic
records can be iden-
tified and made
available to the Bu-
reau of Internal Rev-
enue upon request. A
taxpayer has discre-
tion to discard dupli-
cated records and
redundant infor-
mation provided its
responsibilities under
this regulation are
met.

2. At the time of an
examination, the
retained records
must be capable of
being retrieved and
converted to a
standard record for-
mat in accordance
with Revenue Regu-
lations No. 16-2006.

3. Taxpayers are not
required to construct
electronic records
other than those created
in the ordinary course of
business. A taxpayer who
does not create the elec-
tronic equivalent of a
traditional paper docu-
ment in the ordinary
course of business is not
required to construct
such a record for tax
purposes.
B. Electronic Data Inter-
change Requirements

1. Where a taxpayer us-
es electronic data inter-
change processes and
technology, the level of
record detail, in combi-
nation with other records
related to the transac-
tions, must be equivalent
to that contained in an
acceptable paper record.
For example, the re-
tained records should
contain such information
as vendor name, invoice
date, product descrip-
tion, quantity purchased,
price, amount of tax,
indication of tax status,
shipping detail, etc.
Codes may be used to
identify some or all of
the data elements, pro-
vided that the taxpayer
shall provide a method
which would allow the
Bureau of Internal Reve-
nue to convert the coded
information into an au-
ditable data.

2. The taxpayer may
capture the information
necessary to satisfy the
previous requirement at
any level within the ac-
counting system and
need not retain the origi-
nal EDI transaction rec-
ords provided the audit
trail, authenticity, and
BIR ISSUANCES
Page 2 L C A LINES
integrity of the retained
records can be estab-
lished.
C. Electronic Data Pro-
cessing Systems Re-
quirements

1. The requirements for
an electronic data pro-
cessing accounting sys-
tem should be similar to
that of a manual ac-
counting system, in that
an adequately designed
accounting system
should incorporate meth-
ods and records that will
satisfy the requirements
of this regulation.

2. The information that is
required to re-create a
sequence of events relat-
ed to a business transac-
tion must include suffi-
cient detail to substanti-
ate summarized infor-
mation. The electronic
records must show an
audit trail from the
source information. The
electronic records must
show an audit trail from
the source document(s),
whether paper or elec-
tronic, to the summa-
rized financial accounts.
In addition the trail may
also include a number of
links to other associated
processes and events
such as front-end sys-
tems (e-commerce, Point
of Sale), receipts, pay-
ments, and stock inven-
tories, all of which may
have their own system
audit trails. It is the tax-
payers responsibility to
ensure the reliability and
readability of these
transaction records.

3. Taxpayers keeping
electronics records must
also retain source docu-
ments. A source docu-
ment includes items such
as sales invoices, pur-
chase invoices, cash reg-
ister receipts, formal writ-
ten contracts, credit card
receipts, delivery slips,
deposit slips, work orders,
dockets, cheques, bank
statements, tax returns,
and could also include
emails and other general
correspondence where
relevant for tax purposes.

D. Business process Infor-
mation

1. Upon the request of the
Commissioner of Internal
Revenue or its authorized
representative, the tax-
payer shall provide a de-
scription of the business
process that created the
retained records. Such
description shall include
the relationship between
the records and the tax
documents prepared by
the taxpayer and the
measures employed to
ensure the integrity of the
records.

2. The taxpayer shall be
capable of demonstrating,
among others, the follow-
ing:

A. The functions being
performed as they re-
late to the flow of data
through the system;
B. The internal controls
used to ensure accurate
and reliable processing;
and
C. The internal controls
used to prevent unau-
thorized addition, alter-
ation, or deletion of
retained records

3. The documentation
required for electronic
records retained shall,
among others, include
the following:

A. Record formats or
layouts;
B. Field definitions
(including the meaning
of all codes used to
represent information);
C. File descriptions
(e.g., dataset name);
and
D. Detailed charts of
accounts and account
descriptions.

4. The following fields
are mandatory for the
following:
4.1. General Ledger
-Date
-Reference
-Brief Description/
Explanation
-Account Title (Or
Account Code if
Chart of Accounts
Master file is availa-
ble)
-Debits
-Credits

4.2. General Journal
-Date
-Reference
-Brief Description/
Explanation
-Account Title (Or
Account Code if
Chart of Accounts
Master file is availa-
ble)
-Debits
-Credits

4.3. Sales journal
-Date
-Customers TIN

1. The taxpayers com-
puter hardware or soft-
ware shall accommodate
the extraction and con-
version of retained elec-
tronic records in accord-
ance with Revenue Regu-
lations No. 16-2006.

2. Records that are re-
tained by copying or
backing up the data to
another medium must be
done so in accordance
with the media manufac-
turers suggested proce-
dures with particular at-
tention given to the sug-
gested shelf life of the
medium. Information
recorded on rewritable
media such as computer
hard disks must be
backed up on CD-R/DVD-
R, tape or other suitable
medium to avoid acci-
dental loss, deletion, or
erasure of the recorded
information. The media
containing the recorded
information must be
stored in an environment
free hazards that could
affect the media, such as
magnetic fields, direct
light, excessive moisture,
and temperature ex-
tremes.

3. It is the taxpayers
responsibility to ensure
that current and/or prior
period data files have
been archived or backed
up properly and ade-
quately to meet books
and recordkeeping obli-
gations.


4. When backups of elec-
tronic files are being
used as a method of rec-
ord retention, procedures
must be put in place to:
A. Ensure that the
backed up data files
can be restored in as
format that will be
accessible and usea-
ble by the BIR.

B. Ensure that the
intended data is ac-
tually being written
to the medium being
used.

C. Ensure that the
backup procedure
does not overwrite
prior period backups
or logs, destroying
them.

D. Ensure that the
medium is uniquely
labeled in a readily
identifiable manner.
E. Ensure that a log
is prepared to identi-
fy what records and
data have been rec-
orded on such medi-
um.

E. Ensure that the
log states how long
this medium is to be
retained before it can
be overwritten or
discarded.

F. Ensure that the
name of the software
and the version num-
ber used to create
the records are noted
on the medium label
and in the log.

G. Ensure that the
proper electronic
business system soft-
ware and operating
system are available
to restore the backed
Page 3 VOLUME II, ISSUE No. 12
up files to their orig-
inal environment.

H. Ensure that there
is periodic testing of
backed up records
to verify that the
backed up records
can be restored into
an electronically
readable format.

The Electronic Records
Location Requirements
are as follows:

1. Records must be kept
at the taxpayers place
of business in the Philip-
pines or another place
designated by the Com-
missioner of Internal
Revenue and must, up-
on request, be made
available to Revenue
Officers of the BIR for
audit purposes during
business hours. Records
kept outside the Philip-
pines and accessed
electronically from the
Philippines are not con-
sidered to be records in
the Philippines. Howev-
er, where records are
maintained electronical-
ly in a location outside
the Philippines, the BIR
may accept a copy of
the records, provided
these are made availa-
ble in the Philippines in
an electronically reada-
ble and useable format
for BIR officials and
they contain adequate
details to support the
tax returns filed with
the BIR.

2. All retained records
must be clearly labeled
and stored in a secure
BIR ISSUANCES
-Customers Name
(Or Customer Code
if Customer Master
file is available)
-Address (Not neces-
sary if Customer
Master file is availa-
ble)
-Description
-Reference/ Docu-
ment No./ Sales
Invoice
-Amount
-Discount
-VAT amount
(Output tax)
-Net Sales

4.4. Purchase Journal
-Date
-Suppliers TIN
-Vendors Name (Or
Vendors Code if
Vendor Master file
is available)
-Address (Not nec-
essary if Vendors
Master file is avail-
able)
-Description
-Reference/ docu-
ment No./ Sales
Invoice
-Amount
-Discount
-VAT Amount (Input
Tax)
-Net Purchases

4.5. Inventory Book
-Date
-Product Name (Or
Product Code if
Product Description
Master file is avail-
able)
-Description
-Unit
-Price per unit
-Amount

The Electronic Records
Maintenance Require-
ments are as follows:
BIR ISSUANCES
Page 4 L C A LINES
environment in the Philip-
pines. Authorization to
maintain records else-
where may be granted,
subject to such terms and
conditions as the Com-
missioner of Internal Rev-
enue may specify in writ-
ing. These terms and con-
ditions which are identical
to records maintained in
the Philippines and which
apply to electronic rec-
ords, specify that records
stored outside the Philip-
pines are to be made
available to officials of the
BIR for audit purposes
during business hours in
accordance with the pro-
vision of National Internal
Revenue Code as amend-
ed and this Revenue Reg-
ulations. The authoriza-
tion may be obtained by
writing to Office of the
Commissioner of Internal
Revenue or its authorized
representative.


3. Normally a back-up of
the electronic records are
stored at a site other than
the business location for
security and precaution-
ary purpose (in case of
fire, flood, theft, or other
cause), the BIR requires
this business practice and
back-up copies must be
maintained at a location
within the Philippines.

4. It is the taxpayers re-
sponsibility to produce the
records for inspection no
matter where those rec-
ords are located.

5. Businesses that oper-
ate via the Internet and
are hosted on a server
located outside of the
Philippines should be cog-
nizant of their responsibil-
ity to maintain their rec-
ords within the Philip-
pines. Internet based
businesses have the same
responsibilities related to
record retention as all
other business operations.

The access and submis-
sion of electronic records
will be provided in one or
more of the following
manners:

1. The taxpayer may ar-
range to provide the BIR
with the hardware, soft-
ware and personnel re-
sources to access the
electronic records.

2. The taxpayer may ar-
range for a third-party to
provide the hardware,
software and personnel
resources necessary to
access the electronic rec-
ords.

3. The taxpayer may con-
vert the electronic records
to a standard record for-
mat specified by Revenue
Regulations No. 16-2006,
including copies of files,
on a magnetic medium
that is agreed to by the
BIR. The original files
(unconverted files or files
in its native form) should
also be submitted along
with copies of the con-
verted files.

4. The taxpayer and the
BIR may agree on other
means of providing access
to the electronic records.

Microfilm, microfiche or
other storage-only imag-
ing systems shall com-
ply, among others, with
the following require-
ments:

1. Documentation estab-
lishing the procedures
for converting the hard-
copy documents to mi-
crofilm, microfiche or
other storage-only imag-
ing system must be
maintained and made
available on request.

2. Procedure must be
established for the effec-
tive identification, pro-
cessing, storage and
preservation of the
stored documents and
for making them availa-
ble for the period they
are required to be re-
tained.

3. A person in authority
within the organization
has confirmed in writing
that the program will be
part of the usual and
ordinary activity of the
organizations business.
The said person must
execute a sworn state-
ment that the original
source documents have
been converted strictly in
accordance with the
standards and verified to
insure its integrity and
completeness.

4. Upon request by the
Commissioner of Internal
Revenue or its duly Au-
thorized Representative,
a taxpayer must provide
facilities and equipment
for reading, locating, and
reproducing any docu-
ments maintained on
BIR ISSUANCES
Page 5 VOLUME II, ISSUE No. 12
microfilm, microfiche or
other storage-only imag-
ing system.

5. When displayed on
such equipment or re-
produced on paper, the
documents must exhibit
a high degree of legibility
and readability.

6. All data stored on mi-
crofilm, microfiche or
other storage-only imag-
ing systems must be
maintained and arranged
in a manner that permits
the location of any par-
ticular record.


7. A logbook shall be
maintained to include,
among others, the fol-
lowing information:

A. The date of the
imaging

B. The signatures of
the persons authoriz-
ing and performing
the imaging

C. A description of
the records imaged;
and

D. Whether source
documents are de-
stroyed or disposed
of after imaging and
the date a source
document was de-
stroyed or disposed
of.

8. Prior permit from the
BIR is required before
use of microfilm, micro-
fiche and other storage-
only imaging systems.
The effect on hard-copy
recordkeeping require-
ments shall be the fol-
lowing:

1. Except as otherwise
provided in this section,
the provisions of this
regulation do not relieve
taxpayers of the respon-
sibility to retain hard-
copy records that are
created or received in
the ordinary course of
business as required by
existing laws and regula-
tions.

2. If hard-copy records
are not produced or re-
ceived in the ordinary
course of transacting
business, such hard-copy
records need not be cre-
ated.

3. Hard-copy records
generated at the time of
a transaction using a
credit or debit card must
be retained unless all the
details necessary to de-
termine correct tax liabil-
ity relating to the trans-
action are subsequently
received and retained by
the taxpayer in accord-
ance with this regulation.

3. Computer printouts
that are created for vali-
dation, control, or other
temporary purposes
need not be retained.

4. Nothing in this section
shall prevent the BIR
from requesting hard-
copy printouts in lieu of
retained electronic rec-
ords at the time of ex-
amination.
All records required to be
retained under this regu-
lation shall be preserved
pursuant to Section 235
of the NIRC unless the
BIR has provided in writ-
ing that the records are
no longer required.


All computerized books
of accounts, electronic
record keeping, electron-
ic business systems and
components thereof shall
be registered with the
Bureau of Internal Reve-
nue in accordance with
Revenue Memorandum
Order No. 29-2002 and
all other pertinent issu-
ances.

REVENUE REGULA-
TION NO. 10-2009


These Regulations are
hereby promulgated
providing for amend-
ments to Revenue Regu-
lations No. 8 -2009,
where sub -paragraph
(W) should be sub -
paragraph (X), and other
concerns.

The amendments to Sec.
2.58 of Revenue Regula-
tions No. 2-98, as
amended are the follow-
ing:

1.Those not engaged in
trade/business or prac-
tice of profession for a
limited time during the
election period designat-
ed as withholding agent
pursuant to Section
Sec.2.57.3 (D) and re-
quired to withhold in-
come payment under
2.57.2 (X) using only
Alphanumeric Tax Code
Withholding Tax Individ-
ual (WI) 680 or With-
holding Tax Corporation
(WC) 680 in the remit-
tance of taxes withheld
using Monthly Remit-
tance Return on Credita-
ble Withholding Taxes at
Source (BIR Form No.
1601-E) shall not be re-
quired to attach the
Monthly Alphalist of Pay-
ees (MAP).

2. The payor is required
to file with the BIR -
Large Taxpayers Assis-
tance Division, Large
Taxpayer District Office
or Excise Taxpayers As-
sistance Division, or the
Revenue District Office
where the payor/
employer is registered as
Withholding Agent, on or
before March 1 of the
following year in which
payments were made, an
Annual Information Re-
turn of Creditable Taxes
Withheld (Expanded)/
Income Payments Ex-
empt from Withholding
Tax (BIR Form No.
1604E) except withhold-
ing agents for a limited
time during the election
period under Sec.2.57.3
(D) who are not engaged
in business or practice of
profession and using on-
ly Alphanumeric Tax
Code Withholding Tax
Individual (WI) 680 or
Withholding Tax Corpo-
ration (WC) 680 whose
due date shall be within
thirty (30) days after the
day of election, and on
or before January 31 of
the said year an Annual
SUPREME COURT ISSUANCES
Page 6 L C A LINES
Philippine Association of
Local Treasurers and As-
sessors, Inc. (PHALTRA)
signed on 16 December
2009 at the BIR National
Training Center Auditori-
um.

Based on the MOA, the
abovementioned parties
agreed on the following:

A. The BIR shall:

i. Establish Taxpayer
Service Areas/BIR
help desks in city/
municipal halls every
January of each year
during the time of
application or renewal
for Mayors Permits
and Business Licens-
es, for them to assist
taxpayers in their reg-
istration with the BIR
and payment of regis-
tration fees; issue
Taxpayer Identifica-
tion Numbers (TINs)
and respond to que-
ries from taxpayers.

ii. Utilize the date pro-
vided by Local Gov-
ernment Units (LGUs)
and BGLF in its pro-
gram, to augment the
revenue base and in-
crease tax collection
efficiency.

iii. Share information
with the local treasur-
ers on the names and
addresses of the reg-
istered taxpayers.

iv. Improve the coop-
eration and coordina-
tion with the local as-
sessors in the updat-
ing the zonal values
on real properties.

v. Recognize the ef-
forts of the most co-
operative treasurers
and assessors who
have given the most
cooperation and ef-
forts in this under-
taking, in appropri-
ate awarding cere-
monies to be orga-
nized for this pur-
pose.
vi. Issue necessary
circulars and orders
to implement the
provisions of the
MOA.
B. The BGLF shall:

i. Issue the neces-
sary circulars or or-
ders to implement
the provisions of the
MOA.

ii. Disseminate and
circulate the same to
all municipal, city
and provincial treas-
urers all over the
country to ensure its
uniform and effective
implementation.

C. All Local Government
Unit Treasurers and/or
Assessors through PHAL-
TRA shall:

i. Require the
presentation of the
Certificate of Regis-
tration (BIR Form
No. 2303) and cur-
rent years annual
Registration Fee (BIR
Form No. 0605), by
persons and business
establishments se-
curing or renewing
business permits.

actions.
Based on the MOA, the
LTO and the BIR agreed
that the requirement TIN
submission under Execu-
tive Order (E.O.) No. 98
shall not cover the fol-
lowing individuals for the
purpose of transacting
business with the LTO:

A. Accredited foreign
personnel of diplomatic
missions and interna-
tional organizations;

B. Individuals not en-
gaged in business,
such as minors, stu-
dents, househelpers,
housewives,
balikbayans and the
like, provided that they
are securing a nonpro-
fessional drivers li-
cense;

C. Foreigners such as
tourists, foreign stu-
dents, foreign mission-
aries and the like; and

D. Professional mem-
bers or religious organ-
izations, such as
priests, pastors, nuns,
lay ministers, mission-
aries and the like.


REVENUE MEMORAN-
DUM CIRCULAR NO.
71-2009

Issued on 17 December
2009, the circular pub-
lishes the full text of the
Memorandum of Agree-
ment (MOA) between the
Bureau of Internal Reve-
nue (BIR) and the Bu-
reau of Local Govern-
ment Finance (BLGF) and
Information Return on
Income Taxes Withheld
on Compensation and
Final Withholding Taxes
(BIR Form No. 1604-
CF).


REVENUE MEMORAN-
DUM CIRCULAR NO.
63-2009

Issued on 12 November
2009, the circular pro-
vides questions and an-
swers relative to the
Creditable Withholding
Tax (CWT) on campaign
expenditures in Reve-
nue Regulation No. 8-
2009.

It provides for the with-
holding of a 5% CWT by
candidates of local and
national elections, their
political parties and
their contributors on
their payments to their
suppliers of campaign-
related goods and ser-
vices.



REVENUE MEMORAN-
DUM CIRCULAR NO.
65-2009

The circular publishes
the full text of the Mem-
orandum of Agreement
(MOA) between the
Land Transportation
Office (LTO) and the
Bureau of Internal Rev-
enue (BIR) signed on 25
November 2009 clarify-
ing the coverage of sub-
mission of the Taxpayer
Identification Number
(TIN) in relation to the
processing of LTO trans-
SUPREME COURT ISSUANCES
Page 7 VOLUME II, ISSUE No. 12
ii. Require that the
presentation of TIN
be part of the re-
quirements in all ap-
plications for govern-
ment permit, license,
clearance, official
paper or any other
similar document as
prescribed under Ex-
ecutive Order No.
98, Series of 1999.

iii. Share information
with the BIR on the
declared amount of
gross sales/gross
receipt and other
data of taxpayers
base.

iv. Improve the co-
operation and coordi-
nation with the BIR
in updating zonal
values on real prop-
erties.

REVENUE MEMORAN-
DUM CIRCULAR NO.
72-2009

Issued on 21 December
2009 reiterates Revenue
Memorandum Circular
(RMC) No. 52-2005 im-
posing the Value-Added
Tax (VAT) on the Tollway
Operators, as premised
under Section 108(A) of
the National Internal
Revenue Code.

Based on the exception
provided under Section
119 of the Tax Code, as
amended by Republic Act
No. 9337, the services
being rendered by the
Tollway Operators are
subject to VAT since said
services do not fall under
the exceptions specified
under Section 119 of the
Tax Code. The tax is-
sues, including VAT of all
Tollway Operators for the
years 2007 to 2009 shall
be under the jurisdiction
of the Task Force on Toll-
way Operators created
pursuant to Revenue
Special Order No. 617-
2009.

All Tollway Operators are
required to follow the
invoicing/receipting for-
mat prescribed in RMC
No. 40-2005.

REVENUE MEMORAN-
DUM ORDER NO. 33-
2009

RMO No. 33-2009 is is-
sued to facilitate the
proper identification and
monitoring of certain tax
payments subject to
Creditable Expanded
Withholding Tax pursu-
ant to Revenue Regula-
tion No. 8-2009 subject-
ing to Creditable With-
holding Tax the Income
Payments made by Politi-
cal Parties and Candi-
dates of Local and Na-
tional Elections of All
their Campaign Expendi-
tures and Income Pay-
ments made by an Indi-
vidual or Juridical Person
forming part of their Cam-
paign Contributions to
Candidates of Local and
National Elections and to
Political Parties. The fol-
lowing ATCs are hereby
created:
KIND OF TAX LEGAL
BA-
SIS/
REA-
SONS
BIR
FORM
NO.
ATC TAX
RAT
E
Subject to
Creditable
Withholding
Tax
Income pay-
ments made by
Political Parties
and Candidates
of Local and
National Elec-
tions of all their
Campaign Ex-
penditures, and
Income Pay-
ments made by
Individuals or
Juridical Per-
sons for their
Purchases of
goods and ser-
vices intended
to be given as
campaign con-
tribution to po-
litical parties
and candidates:
i) Individual
ii) Corporate


RR No.
8-
2009


1601E











WI6
80
WC6
80











5%
5%


The memorandum is is-
sued to further enhance
the procedures of the
LGU Assurance System
ensuring that those
found not registered with
the BIR shall be assisted
for them to conveniently
comply with tax laws,
rules, and regulations
and other related issu-
ances and to direct all
government agencies,
instrumentalities, local
government units, and
government-owned and/
or controlled corpora-
tions to include the Tax
Identification Number
(TIN) as one of the re-
quirement in all applica-
tion for all government
permits, license, clear-
ance, official paper or
other similar documents.


Page 8
L C A LINES
BIR ISSUANCE
This activity shall be con-
cluded in July 2010.
REVENUE MEMORAN-
DUM ORDER 41-2009


Issued on 23 December
2009, the memorandum
order discusses the imple-
mentation of the guide-
lines on the Memorandum
of Agreement between
the Bureau of Internal
Revenue, Bureau of Local
Government Finance and
the Philippine Association
of Local Treasurers and
Assessors on the coordi-
nation and cooperation to
improve the services to
the taxpayers and to en-
hance tax collection and
administration. The
memorandum provides
guidelines to increase tax
base and revenue using
records, documents, data
and information culled
from the local treasurer
and assessors office.
REVENUE MEMORAN-
DUM ORDER 35-2009


The memorandum order
is issued to lay down the
task of the Regional Di-
rector with regard to Pro-
ject Iboto Mothe Re-
gional Director shall un-
dertake the necessary
communication and con-
duct information cam-
paign, and submit month-
ly reports to the Task
Force.
The memorandum like-
wise laid down the duty of
the Revenue District Of-
ficer to ensure the regis-
tration of all political par-
ties, candidates of local
and national elections and
campaign contributors
within their respective
jurisdiction. The Revenue
District Officer is tasked
to coordinate with COME-
LEC with regard to the
issuance of the Applica-
tion of Registration and the
filing of Certificate of Can-
didacy of candidates in the
upcoming elections.


REVENUE MEMORAN-
DUM ORDER 40-2009


The memorandum order
lays down the policies and
procedures prescribing the
guidelines and procedures
in the observation of in-
ventory taking of good for
purposes of determining
the 2009 ending inventory.
The memorandum order
also lists down the reports
which shall be prepared
and submitted by the Rev-
enue District Officer.
For the purpose of this ac-
tivity, the taxable year
2009 shall cover the 2009
calendar year and all fiscal
years ending on the first
six (6) months of 2010.
SUPREME COURT ISSUANCES
A.M. No. 08-8-7-SC
THE RULE OF PROCE-
DURE FOR SMALL
CLAIMS CASES


R E S O L U T I O N
Sections 11, 12, 14, 16,
21, and 22 of the Rule of
Procedure for Small
Claims Cases, are
AMENDED to read as fol-
lows:

Section 11. Response. -
The defendant shall file
with the court and serve
on the plaintiff a duly ac-
complished and verified
Response within a non-
extendible period of ten
(10) days from receipt of
summons. The Response
shall be accompanied by
certified photocopies of
documents, as well as affi-
davits of witnesses and
other evidence in support
thereof. No evidence shall
be allowed during the
hearing which was not
attached to or submitted
together with the Re-
sponse, unless good
cause is shown for the
admission of additional
evidence.

THE GROUNDS FOR THE
DISMISSAL OF THE
CLAIM, UNDER RULE
16 OF THE RULES OF
COURT, SHOULD BE
PLEADED.
Section 12. Effect of
Failure to File Response.
- Should the defendant
fail to file his Response
within the required peri-
od, AND LIKEWISE
FAIL TO APPEAR AT
THE DATE SET FOR
HEARING, THE COURT
Page 9 VOLUME II, ISSUE No. 12
SHALL RENDER
JUDGMENT ON THE
SAME DAY, AS MAY
BE WARRANTED BY
THE FACTS.

SHOULD THE DE-
FENDANT FAIL TO
FILE RESPONSE
WITHIN THE RE-
QUIRED PERIOD BUT
APPEARS AT THE
DATE SET FOR HEAR-
ING, THE COURT
SHALL ASCERTAIN
WHAT DEFENSE HE
HAS TO OFFER AND
PROCEED TO HEAR,
MEDIATE OR ADJUDI-
CATE THE CASE ON
THE SAME DAY AS IF
A RESPONSE HAS
BEEN FILED.

Section 14. Prohibited
Pleadings and Motions. -
The following pleadings,
motions, or petitions
shall not be allowed in
the cases covered by
this Rule:
(a) MOTION TO
DISMISS THE
COMPLAINT;
(b) Motion for a bill
of particulars;
(c) Motion for new
trial, or for recon-
sideration of a judg-
ment, or for reopen-
ing of trial;
(d) Petition for relief
from judgment;
(e) Motion for ex-
tension of time to
file pleadings, affi-
davits, or any other
paper;
(f) Memoranda;
(g) Petition for certio-
rari, mandamus, or
prohibition against
any interlocutory or-
der issued by the
court;
(h) Motion to declare
the defendant in de-
fault;
(i) Dilatory motions
for postponement;
(j) Reply;
(k) Third-party com-
plaints; and
(l) Interventions.

Section 16. Appearance .
- The parties shall appear
at the designated date of
hearing personally.
APPEARANCE
THROUGH A REPRE-
SENTATIVE MUST
BE FOR A VALID
CAUSE. THE REPRE-
SENTATIVE OF AN
INDIVIDUAL-PARTY
MUST NOT BE A
LAWYER, AND MUST
BE RELATED TO OR
NEXT-OF-SKIN OF
THE INDIVIDUAL-
PARTY. JURIDICAL
ENTITIES SHALL
NOT BE REPRE-
SENTED BY A LAW-
YER IN ANY CAPAC-
ITY.

THE REPRESENTATIVE
MUST BE authorized un-
der a Special Power of
Attorney to enter into an
amicable SETTLEMENT OF
THE DISPUTE and to en-
ter into stipulations or
admissions of facts and of
documentary exhibits.

Section 21. HEARING. -
At the hearing, the judge
shall EXERT EFFORTS
TO BRING THE PAR-
TIES TO AN AMICABLE
SETTLEMENT OF THEIR
DISPUTE. Any settle-
ment or resolution of the
dispute shall be reduced
into writing, signed by the
parties and submitted to
the court for approval.

SETTLEMENT DISCUS-
SIONS SHALL BE
STRICTLY CONFIDEN-
TIAL AND ANY REFER-
ENCE TO ANY SETTLE-
MENT MADE IN THE
COURSE OF SUCH DIS-
CUSSIONS SHALL BE
PUNISHABLE BY CON-
TEMPT.

Section 22. Failure of
SETTLEMENT. - If EF-
FORTS AT SETTLEMENT
FAIL, the hearing shall
proceed in an informal
and expenditious manner
and BE terminated within
one (1) day. EITHER
PARTY MAY MOVE IN
WRITING TO HAVE AN-
OTHER JUDGE HEAR
AND DECIDE THE CASE.
THE REASSIGNMENT
WITH EXISTING ISSU-
ANCES.
THE REFERRAL BY THE
ORIGINAL JUDGE TO
THE EXECUTIVE JUGDE
SHALL BE MADE WITH-
IN THE SAME DAY THE
MOTION IS FILED AND
GRANTED, AND BY THE
EXECUTIVE JUDGE TO
THE DESIGNATED
JUDGE WITHIN THE
SAME DAY OF THE RE-
FERRAL. THE NEW
JUDGE SHALL HEAR
AND DECIDE THE CASE
WITHIN FIVE (5)
WORKING DAYS FROM
RECEIPT OF THE OR-
DER OF REASIGNMENT.



A. M. NO. 99-8-09-SC
AMENDED RULES ON
WHO SHALL RESOLVE
MOTIONS FOR RECON-
SIDERATION OF DECI-
SIONS OR SIGNED
RESOLUTIONS INCAS-
ES ASSIGNED TO THE
DIVISION OF THE
COURT


This Resoltion supersedes
the Resolution promulgat-
ed on February 15, 2000.
The new rules on who
resolve motions for recon-
sideration of Decisions or
signed Resolutions in cas-
es assigned to the Divi-
sions of the Court are as
follows:
1. Motions for reconsid-
eration/clarification of
a Decision or of a
signed Resolutions in
cases shall be acted
upon by the Ponente
and the other Mem-
bers of the Division,
whether special or
regular, who partici-
pated in the rendition
of the Decision or
si gned Resol uti on
sought to be reconsid-
ered, irrespective of
whether or not such
members are already
in other Divisions at
the time the motion
for reconsideration/
clarification is filed or
acted upon; for this
purpose, they shall be
deemed constituted
as a Special Division
of the Division to
which the Ponente
belonged at the time
of promulgation of the
Decision or the Signed
Resolution.

2. If the Ponente is dis-
qualified or has inhib-
ited himself/herself
from acting on the
motion for reconsider-
ation/clarification, he/
she shall be replaced
by another Justice
who shall be chosen
by raffle from among
the remaining Mem-
bers of the Division
who participated in
the rendition of the
Decision or signed
Resolution and who
concurred therein. If
only one member of
the Court who partici-
pated and concurred
in the rendition of the
Decision or signed
Resolution remains,
he/she shall be desig-
nated as the Ponente.
3. If the Ponente retires
or is otherwise no
longer a Member of
the Court, a new Po-
nente for all his/her
Decision or signed
Resolution that may
be subject of motions
for reconsideration/
clarification shall be
designated by raffle
from among the re-
maining Members of
the Division who par-
ticipated and con-
curred in the Decision
or signed Resolution.
In Decisions or signed
Resolutions of the re-
tired Ponente that the
new Ponente did not
participate and concur
in another Ponente
shall be chosen by
raffle from among
those who participat-
ed and concurred in
the Decision or signed
Resolutions.
4. If a Member (not the
Ponente) retires or is
otherwise no longer a
Member of the
Court, a Justice
shall be designated
by raffle from the
other Divisions to
replace him/her in
all Decisions or
signed Resolutions
to which he/she
participated in and
where such Deci-
sions or signed Res-
olutions are the
subject of further
motions, until anew
Justice is appointed
as replacement for
the retired Justice.
Upon the appoint-
ment of a new jus-
tice, he/she shall
replace the desig-
nated Justice in
such Decisions or
signed Resolutions.
SUPREME COURT ISSUANCES
REPUBLIC ACT NO. 9775
AN ACT DEFINING THE CRIME OF CHILD PORNOGRAPHY, PRESCRIBING PENAL-
TIES THEREFOR AND FOR OTHER PURPOSES
Unlawful or Prohibited
Acts. - It shall be unlaw-
ful for a person to commit
any of the following acts:

(a) To hire, employ, use,
persuade, induce or
coerce a child to per-
form in the creation
or production of child
pornography;
(b) To produce, direct,
manufacture or create
any form of child por-
nography and child
pornography materi-
als;
(c) To sell, offer, adver-
tise and promote child
pornography and child
pornography materi-
als;
(d) To possess, download,
purchase, reproduce
or make available
child pornography
materials with the
intent of selling or
distributing them;
(e) To publish, post, ex-
hibit, disseminate,
distribute, transmit or
broadcast child por-
nography or child por-
nography materials;
(f) To knowingly possess,
view, download, pur-
chase or in any way
take steps to procure,
obtain or access for
personal use child
pornography materi-
als; and
(g) To attempt to commit
child pornography by
luring or grooming a
child.


Duties of an Internet
Service Provider (ISP).
- An ISP shall:

(a) Prevent access or
transmittal of child
pornography mate-
rials by any person
and shall install a
blocking system to
prevent access to
such materials;
(b) Within seven (7)
days, report the
presence thereof, as
well as the particu-
lars of the person
maintaining, host-
ing, distributing or
in any manner con-
tributing to the In-
ternet address, to
the proper authori-
Page 10 L C A LINES
ties; and
(c) Preserve such evi-
dence for purposes of
investigation and
prosecution by rele-
vant authorities.

An ISP shall, upon the
request of proper authori-
ties, furnish the particu-
lars of users who gained
or attempted to gain ac-
cess to an Internet ad-
dress which contains child
pornography materials.

An ISP who shall know-
ingly, willfully and inten-
tionally violate this provi-
sion shall be subject to
the penalty provided un-
der Section 13(e) of this
Act.

Duties of an Internet
Content Host. - An In-
ternet content host shall:
(a) Not host any child
pornography on its
Internet address;
(b) Within seven (7) days,
report the presence of
child pornography, as
well as the particulars
of the person main-
taining, hosting, dis-
tributing or in any
manner contributing
to such Internet ad-
dress, to the proper
authorities; and
(c) Preserve such evi-
dence for purposes of
investigation and
prosecution by rele-
vant authorities.

An Internet content host
shall, upon the request of
proper authorities, furnish
the particulars of users
who gained or attempted
to gain access to an Inter-
net address that contains
child pornography materi-
als.

An Internet content host
who shall knowingly,
willfully and intentionally
violate this provision
shall be subject to the
penalty provided under
Section 13(e) of this Act.

Duty to Provide Block-
ing System or Soft-
ware. - The following
shall also have the duty
to install blocking system
or software to prevent
transmittal of or access
to the child pornography
materials:

(a) Internet caf estab-
lishments;
(b) Private and public
educational institu-
tions;
(c) Public and private
offices; and
(d) Service providers
such as telephone
companies and oth-
ers.

Duty to Report. - Photo
developers, information
technology (IT) profes-
sionals, credit card com-
panies and banks, and
any person who has di-
rect knowledge of any
child pornography activi-
ties shall have the duty
to report any suspected
child pornography mate-
rials or transactions to
the proper authorities
within seven (7) days
from discovery thereof.

Providing Venue for
Commission of Prohib-
ited Acts. - It shall be
unlawful for a person to
knowingly, willfully and
intentionally provide a
venue for the commis-
sion of prohibited acts
such as, but not limited
to, dens, private rooms,
cubicles in Internet
cafes, cinemas, secluded
areas in residential hous-
es or in establishments
purporting to be a legiti-
mate business.

Common Penal
Provisions.

(a) The penalty provided
under this Act shall be
imposed in its maximum
period if the offender has
been previously convict-
ed under this Act.

(b) When the offender is
a corporation, partner-
ship or association, the
officer or employee
thereof who is responsi-
ble for the violation of
this Act shall suffer the
penalty imposed in its
maximum period.
(c) When the perpetrator
is an ascendant, parent,
guardian, step-parent or
collateral relative within
the second degree of
consanguinity, the per-
petrator thereof who is
responsible for the viola-
tion of this Act shall suf-
fer the penalty imposed
in its maximum period.

(d) The penalty provided
for in this Act shall be
imposed in its maximum
period if the offender is a
public officer or employ-
ee: Provided, That if the
penalty imposed is reclu-
sion perpetua or reclu-
sion temporal, then the
penalty of perpetual or
temporary absolute dis-
qualification shall also be
imposed.

(e) Any attempt to com-
mit any of the prohibited
acts under Section 4
hereof shall be punished
by a penalty two (2) de-
grees lower than that
prescribed for the con-
summated acts.

(f) If the offender is a for-
eigner, he/she shall be
immediately deported
after serving his/her sen-
tence and be barred per-
manently from entering
the country.

(g) In all cases, any per-
son found guilty of
providing venue for the
commission of prohibited
acts under Section 4
hereof shall be treated as
a principal and penalized
as such.

(h) Any person found
guilty of facilitating the
commission of any pro-
hibited acts shall be pun-
ished with a penalty two
(2) degrees lower than
that prescribed by the
offense.

(i) Any business establish-
ment used in the commis-
sion of the prohibited acts
provided herein shall be
immediately closed, the
authority or license to
operate cancelled, with-
out prejudice to the for-
feiture of the proceeds
and investments, and
without prejudice to the
prosecution of the owner,
president, managers or
responsible officer who
participated in the com-
mission of the offense or
who shall knowingly per-
mit or fail to prevent its
commission.



Who May File a Com-
plaint. - Complaints on
cases of child pornogra-
phy and other offenses
may be filed by the fol-
lowing:

(a) Offended party;

(b) Parents or guardians;
Page 11 VOLUME II, ISSUE No. 12


(c) Ascendant or collateral
relative within the third
degree of consanguinity;

(d) Officer, social worker
or representative of a li-
censed child-caring insti-
tution;

(e) Officer or social work-
er of the Department of
Social Welfare and Devel-
opment (DSWD);

(f) Local social welfare
development officer;

(g) Barangay chairman;

(h) At least three (3) con-
cerned responsible citi-
zens where the violation
occurred; or

(i) Any person who has
personal knowledge of the
circumstances of the com-
mission of any offense
under this Act.

Venue.

A criminal action arising
from a violation of this Act
shall be filed where the
offense was committed,
or where any of its ele-
ments occurred, or where
the child is found or actu-
ally resides at the time of
the commission of the
offense: Provided, That
the court where the crimi-
nal action is first filed
shall acquire jurisdiction
to the exclusion of the
other courts.
Authority to Regulate
Internet Caf or Kiosk.

The local government unit
(LGU) of the city or mu-
nicipality where an Inter-
net caf or kiosk is locat-
ed shall have the authori-
ty to monitor and regulate
the establishment and
operation of the same or
similar establishments in
order to prevent violation
of the provisions of this
Act.

Legal Protection to Vic-
tims of Child Pornogra-
phy.

The child who is a victim
of child pornography shall
be recognized as a victim
of violent crime defined
under Section 3(d) of Re-
public Act No. 7309, or
"An Act Creating a Board
of Claims under the De-
partment of Justice for
Victims of Unjust Impris-
onment or Detention and
Victims of Violent Crimes
and for Other Purposes"
so that the child may
claim compensation
therein. The child and
family shall be entitled to
protection as well as the
rights and benefits of wit-
nesses under Republic Act
No. 6981, or the "Witness
Protection, Security and
Benefit Act".


Confiscation and For-
feiture of the Proceeds
and Instruments De-
rived from Child Por-
nography.


In addition to the penalty
imposed for the violation
of this Act, the court shall
order the confiscation and
forfeiture, in favor of the
government, of all the
proceeds and properties
derived from the commis-
sion of the crime, unless
they are the property of a
third person not liable for
the unlawful act: Provid-
ed, however, That all
awards for damages shall
be taken from the person-
al and separate properties
of the offender:
Provided, further, That if
such properties are insuf-
ficient, the balance shall
be taken from the confis-
cated and forfeited prop-
erties.

When the proceeds, prop-
erties and instruments of
the offense have been
destroyed or diminished
in value or otherwise ren-
dered worthless by any
act or omission, directly
or indirectly, of the of-
fender, or it has been
concealed, removed, con-
verted or transferred to
prevent the same from
being found or to avoid
forfeiture or confiscation,
the offender shall be or-
dered to pay the amount
equal to the value of the
proceeds, property or in-
struments of the offense.


Extradition. - The DOJ,
in consultation with the
Department of Foreign
Affairs, shall endeavor to
include child pornography
among extraditable of-
fenses in future treaties.
Page 12 L C A LINES





Creation of the Climate
Change Commission

The Commission shall be
an independent and au-
tonomous body and shall
have the same status as
that of a national govern-
ment agency. It shall be
attached to the Office of
the President.

The Commission shall be
the sole policy-making
body of the government
which shall be tasked to
coordinate, monitor and
evaluate the programs
and action plans of the
government relating to
climate change pursuant
to the provisions of this
Act.


Framework Strategy
and Program on Cli-
mate Change

The Commission shall,
within six (6) months
from the effectivity of this
Act, formulate a Frame-
work Strategy on Climate
Change. The Framework
shall serve as the basis
for a program for climate
change planning, research
and development, exten-
sion, and monitoring of
activities to protect vul-
nerable communities from
the adverse effects of cli-
mate change.

The Framework shall be
formulated based on cli-
mate change vulnerabili-
ties, specific adaptation
needs, and mitigation po-
tential, and in accordance
with the international
agreements.
The Framework shall be
reviewed every three (3)
years, or as may be
deemed necessary.


Components of the
Framework Strategy
and Program on Cli-
mate Change

The Framework shall in-
clude, but not limited to,
the following components:

(a) National priorities;

(b) Impact, vulnerability
and adaptation assess-
ments;

(c) Policy formulation;

(d) Compliance with
international commit-
ments;

(e) Research and devel-
opment;

(f) Database develop-
ment and management;

(g) Academic programs,
capability building and
mainstreaming;

(h) Advocacy and infor-
mation dissemination;

(i) Monitoring and eval-
uation; and

(j) Gender mainstream-
ing.

National Climate
Change Action Plan.

The Commission shall for-
mulate a National Climate
Change Action Plan in ac-
cordance with the Frame-
work within one (1) year
after the formulation of
the latter.

The National Climate
Change Action Plan shall
include, but not limited
to, the following compo-
nents:

(a) Assessment of the
national impact of climate
change;

(b) The identification of
the most vulnerable com-
munities/areas, including
ecosystems to the im-
pacts of climate change,
variability and extremes;

(c) The identification of
differential impacts of cli-
mate change on men,
women and children;

(d) The assessment and
management of risk and
vulnerability;

(e) The identification of
GHG mitigation poten-
tials; and

(f) The identification of
options, prioritization of
appropriate adaptation
measures for joint pro-
jects of national and local
governments.

Local Climate Change
Action Plan

The LGUs shall be the
frontline agencies in the
formulation, planning and
implementation of climate
change action plans in
their respective areas,
consistent with the provi-
sions of the Local Govern-
ment Code, the Frame-
work, and the National
Climate Change Action
Plan.

Barangays shall be direct-
ly involved with municipal
and city governments in
prioritizing climate change
issues and in identifying
and implementing best
practices and other solu-
tions. Municipal and city
governments shall consid-
er climate change adapta-
tion, as one of their regu-
lar functions. Provincial
governments shall provide
technical assistance, en-
forcement and infor-
mation management in
support of municipal and
city climate change action
plans. Inter-local govern-
ment unit collaboration
shall be maximized in the
conduct of climate- relat-
ed activities.

Local Government Units
(LGUs) shall regularly up-
date their respective ac-
tion plans to reflect
changing social, econom-
ic, and environmental
conditions and emerging
issues. The LGUs shall
furnish the Commission
with copies of their action
REPUBLIC ACT NO. 9729
AN ACT MAINSTREAMING CLIMATE CHANGE INTO GOVERNMENT POLICY FORMULATIONS, ESTAB-
LISHING THE FRAMEWORK STRATEGY AND PROGRAM ON CLIMATE CHANGE, CREATING FOR THIS
PURPOSE THE CLIMATE CHANGE COMMISSION, AND FOR OTHER PURPOSES
Climate Change Act of 2009
Page 13 VOLUME II, ISSUE No. 12

plans
and all subsequent
amendments, modifica-
tions and revisions there-
of, within one (1) month
from their adoption. The
LGUs shall mobilize and
allocate necessary per-
sonnel, resources and
logistics to effectively im-
plement their respective
action plans.

The local chief executive
shall appoint the person
responsible for the formu-
lation and implementation
of the local action plan.

It shall be the responsibil-
ity of the national govern-
ment to extend technical
and financial assistance to
LGUs for the accomplish-
ment of their Local Cli-
mate Change Action
Plans.

The LGU is hereby ex-
pressly authorized to ap-
propriate and use the
amount from its Internal
Revenue Allotment neces-
sary to implement said
local plan effectively, any
provision in the Local
Government Code to the
contrary notwithstanding.



Appropriations

The sum of Fifty million
pesos
(Php50,000,000.00) is
appropriated as initial op-
erating fund in addition to
the unutilized fund of the
Presidential Task Force on
Climate Change and the
Office of the Presidential
Adviser on Global Warm-
ing and Climate Change.
The sum shall be sourced
from the Presidents con-
tingent fund.

Thereafter, the amount
necessary to effectively
carry out the provisions of
the Climate Change Act
shall be included in the
annual General Appropria-
tions Act.


JURISPRUDENCE
LINTANG BEDOL
vs.
COMMISSION ON
ELECTIONS
G.R. No. 179830 De-
cember 3, 2009



FACTS: On May 14,
2007, the National and
Local elections were
held.

As Chair of the Provincial
Board of Canvassers
(PBOC) for the province
of Maguindanao, Lintang
Bedol (Bedol) discharged
his official functions and
was able to ensure the
PBOCs performance of
its ministerial duty to
canvass the Certificates
of Canvass coming from
the twenty two (22) city
and municipalities in the
province.

At that time, Bedol also
was charged with the
duty of being the concur-
rent Provincial Elections
Supervisor for the Prov-
ince of Shariff Kabun-
suan, a neighboring
province of Maguinda-
nao.

Bedol failed to attend the
scheduled canvassing of
the Provincial Certificates
of Canvass (PCOC) of
Maguindanao of which he
is the Provincial Election
Supervisor.

Bedol later appeared be-
fore the Commission, en
banc sitting as the Nation-
al Board of Canvassers
(NBOC) for the election of
senators to submit the
provincial certificate of
canvass for Maguindanao.
Due to certain
observations on the pro-
vincial certificates of can-
vass by certain parties,
canvassing of the certifi-
cate was held in abeyance
and Bedol was queried on
the alleged fraud which
attended the conduct of
elections in his area.

He was already informed
of the resetting of the
canvassing but failed to
appear despite prior
knowledge.

A certification was later
issued that as of even
date, the canvassing doc-
uments for all municipali-
ties of the province of
Maguindanao in connec-
tion with the May 2007
elections were not trans-
mitted by the Provincial
Election Supervisor of said
province nor the respec-
tive Board of Canvassers.

The Commission and the
NBOC created the Task
Force Maguindanao, which
was tasked to conduct a
fact-finding investigation
on the conduct of elec-
tions and certificates of
canvass from the city and
municipalities in Magu-
indanao.

Bedol appeared before the
Task Force fact finding
activity and responded to
Page 14 L C A LINES

the queries from the chair
who later on admitted
that the election para-
phernalia was lost. An-
other investigative pro-
ceeding was scheduled,
however, Bedol failed to
appear. Also, Bedol failed
to submit a written expla-
nation of his absences on
time.

Bedol came out on nation-
al newspapers, in an ex-
clusive interview with the
Inquirer and GMA-7, with
a gleaming 45 caliber pis-
tol strapped to his side,
and in clear defiance of
the Commission posted
the challenge by saying
that those that are saying
that there was cheating in
Maguindanao, file a case
against me tomorrow, the
next day. They should
file a case now and I will
answer their accusa-
tions.(Words in brackets
ours)

The COMELEC issued a
Contempt Charge and
Show Cause Order against
Bedol citing various viola-
tions of the COMELEC
Rules of Procedure.

Bedol was later arrested
by members of the Philip-
pine National Police (PNP)
on the basis of an Order
of Arrest after repeatedly
failing to appear during
the fact-finding proceed-
ings before Task Force
Maguindanao.

The COMELEC en banc
issued a resolution finding
Bedol guilty of contempt.

Aggrieved, Bedol filed a
motion for reconsideration
which was denied by the
COMELEC.


ISSUE: Whether or not
the COMELEC has jurisdic-
tion to initiate or prose-
cute the contempt pro-
ceedings against Bedol.

RULING: The COMELEC
has jurisdiction to initiate
or prosecute the con-
tempt proceedings
against Bedol.

The COMELEC possesses
the power to conduct in-
vestigations as an adjunct
to its constitutional duty
to enforce and administer
all election laws.
The quasi-judicial
or administrative adjudi-
catory power of the
COMELEC is the power to
hear and determine ques-
tions of fact to which the
legislative policy is to ap-
ply, and to decide in ac-
cordance with the stand-
ards laid down by the law
itself in enforcing and ad-
ministering the same law.

The COMELEC, through
the Task Force Maguinda-
nao, was exercising its
quasi-judicial power in
pursuit of the truth behind
the allegations of massive
fraud during the elections
in Maguindanao. To
achieve its objective, the
Task Force conducted
hearings and required the
attendance of the parties
concerned and their coun-
sels to give them the op-
portunity to argue and
support their respective
positions.

The effectiveness of the
quasijudicial power vest-
ed by law on a govern-
ment institution hinges on
its authority to compel
attendance of the parties
and/or their witnesses at
the hearings or proceed-
ings.

In the same vein, to with-
hold from the COMELEC
the power to punish indi-
viduals who refuse to ap-
pear during a fact-finding
investigation, despite a
previous notice and order
to attend, would render
nugatory the COMELECs
investigative power,
which is an essential inci-
dent to its constitutional
mandate to secure the
conduct of honest and
credible elections. In this
case, the purpose of the
investigation was however
derailed when Bedol ob-
stinately refused to ap-
pear during said hearings
and to answer questions
regarding the various
election documents which,
he claimed, were stolen
while
they were in his posses-
sion and custody. Un-
doubtedly, the COMELEC
could punish Bedol for
such contumacious refusal
to attend the Task Force
hearings.

On the procedure adopted
by the COMELEC in pro-
ceeding with the indirect
contempt charges against
Bedol, Section 52 (e),
Article VII of the Omnibus
Election Code pertinently
provides:

Section 52. Powers and
functions of the Com-
mission on Elections.

xxx

(e) Punish con-
tempts provided for
in the Rules of Court
in the same pro-
cedure and with
the same penal-
ties provided therin.
Any violation of any
final and executory
decision, order or
ruling of the Com-
mission shall consti-
tute contempt
thereof.

The aforecited provision
of law is implemented by
Rule 29 of COMELECs
Rules of Procedure, Sec-
tion 2 of which states:

Rule 29 Con-
tempt

Sec. 1. xxx

Sec. 2. Indirect Con-
tempt. After charge
Page 15 VOLUME II, ISSUE No. 12

in writing has been
filed with the Commis-
sion or Division, as
the case may be, and
an opportunity given
to the respondent to
be heard by himself or
counsel, a person
guilty of the following
acts may be punished
for indirect contempt:

(a) Misbehavior of
the responsible of-
ficer of the Commis-
sion in the perfor-
mance of his official
duties or in his offi-
cial transactions;

(b) Disobedience of
or resistance to a
lawful writ, process,
order, judgment or
command of the
Commission or any
of its Divisions, or
injunction or re-
straining order
granted by it;

(c) Any abuse of or
any inlawful inter-
ference with the
process or proceed-
ings of the Commis-
sion or any of its
Divisions not consti-
tuting direct con-
tempt under Section
1 of this Rules;

(d) Any improper
conduct tending,
directly or indirectly,
to impede, obstruct,
or degrade the ad-
ministration of jus-
tice by the Commis-
sion or any of its
Divisions;

(e) Assuming to be
an attorney and act-
ing as such without
authority; and

(f) Failure to obey a
subpoena duly
served.

SEC. 3 Penalty for
Indirect Contempt.
If adjudged guilty, the
accused may be pun-
ished by a fine not
exceeding one thou-
sand (P1,000.00) pe-
sos or imprisonment
for not more than six
(6) months, or both,
at the discretion of the
Commission or Divi-
sion.

GOVERNOR ORLANDO
A. FUA, JR.,
*
IN REPRESENTATION
OF THE PROVINCIAL
GOVERNMENT OF SI-
QUIJOR
and ALL ITS OFFICIALS
AND EMPLOYEES
vs.
THE COMMISSION ON
AUDIT and ELIZABETH
S. ZOSA,
DIRECTOR IV, LEGAL
AND ADJUDICATION
OFFICE-LOCAL COM-
MISSION OF AUDIT,
QUEZON CTY, PHILIP-
PINES
G.R. No. 175803 De-
cember 4, 2009


FACTS: The Sangguni-
ang Panlalawigan of the
Province of Siquijor
adopted a resolution
granting extra Christmas
bonus to all its officials
and employees.
Governor Orlando A. Fua
Jr. (Fua) wrote a letter to
the President reiterating
said request. On said
letter, the President then
wrote a marginal note
reading, NO OBJECTION.
The provincial govern-
ment, relying on the reso-
lutions and the Presidents
marginal note, then pro-
ceeded to release the ex-
tra Christmas bonus to its
officials and employees.
However, a post-audit
was conducted and there-
after questioned the le-
gality of the payment of
said bonuses.
Atty. Roy L. Ursal (Ursal),
Regional Cluster Director,
Commission on Audit Re-
gion VII disallowed the
payments and issued No-
tices of Disallowance for
violation of Budget Circu-
lars.

Fua filed a motion for re-
consideration but the
same was denied by Ur-
sal.

Fua appealed to the Com-
mission on Audit-Legal
and Adjudication Office
(COA-LAO-Local) which
issued a Decision affirm-
ing the Regional Cluster
Directors Notice of Disal-
lowance.

ISSUE: Whether or not
Fua exhausted all the
remedies available to him.
RULING: Fua failed to
exhaust the administra-
tive remedies available to
him.

The general rule is that
before a party may seek
the intervention of the
court, he should first avail
himself of all the means
afforded him by adminis-
trative processes. The
issues which administra-
tive agencies are author-
ized to decide should not
be summarily taken from
them and submitted to
the court without first giv-
ing such administrative
agency the opportunity to
dispose of the same after
due deliberation.

The non-observance of
the doctrine results in the
petition having no cause
of action, thus, justifying
its dismissal.

The Commission Proper,
which is the tribunal pos-
sessing special
knowledge, experience
and tools to determine
technical and intricate
matters of fact involved in
the conduct of the audit,
would still be the best
body to determine wheth-
er the marginal note of
No Objection on petition-
ers letter-request to the
President is indeed au-
thentic and tantamount to
the required approval.

Fua having failed to pur-
JURISPRUDENCE
Page 16 L C A LINES

Page 17
JURISPRUDENCE
sue an appeal with the
Commission Proper, the
Decision issued by the COA
-LAO-Local has become
final and executory.



PEOPLE OF THE PHILIP-
PINES
vs.
FERNANDO GUTIERREZ
y GATSO
G.R. No. 177777 De-
cember 4, 2009

FACTS: Fernando
Gutierrez y Gatso
(Gutierrez) was caught in
possession of two (2) small
plastic [sachets] containing
white crystalline substance
weighing more or less
14.052 grams of shabu
while inside a kubo with a
companion.
Upon arraignment, Fernan-
do, assisted by counsel de
officio, entered a plea of
not guilty.
The Regional Trial Court
(RTC), found Fernando
guilty beyond reasonable
doubt.
The Court of Appeals (CA)
affirmed the decision of the
RTC.

ISSUE: Whether or not
the Trial Court erred in
finding Gutierrez guilty
beyond reasonable doubt
for violation of Section 11,
Article II, R.A. No. 9165.

RULING: The Trial Court
did not err in finding
Gutierrez guilty beyond
reasonable doubt for vio-
lation of Section 11, Arti-
cle II, R.A. No. 9165.

The Supreme Court (SC)
reviewed the transcript of
stenographic notes taken
during the trial and found
nothing to support
Gutierrezs allegations of
inconsistencies between
or among the prosecution
witnesses versions of rel-
evant events.

The Court will not disturb
the trial courts evaluation
of the credibility of wit-
nesses, save when it had
overlooked, misunder-
stood, or misapplied some
facts or circumstances of
weight and substance
which, when considered,
will alter the assailed de-
cision or affect the result
of the case. None of the
exceptions obtain in the
case at bar.

At the trial, Gutierrezs
invoked the defenses of
denial and frame-up,
claiming at every oppor-
tunity that the bag con-
taining the shabu sachets
and drug paraphernalia
belonged to Cortez, not to
him, as the arresting of-
ficers would make it ap-
pear. To prove this point,
Gutierrezs testified that
among the items found in
the bag were Cortezs
drivers license and wal-
let.

As time and again held,
the defense of denial or
frame-up, like alibi, has
been invariably viewed
with disfavor for it can
easily be concocted and is
a common defense ploy in
most prosecutions for vio-
lation of the Dangerous
Drugs Act.
Here, no clear and con-
vincing evidence was ad-
duced to prove Gutierrezs
defense of denial or frame
-up. On the contrary,
Gutierrezs action while
the policemen were un-
dertaking follow-up oper-
ations was what took him
behind the bars. The ref-
erence, of course, is to
the fact that he hastily
fled from the scene of the
crime upon noticing the
arrival of the police at the
target area.
YUN KWAN BYUNG
vs.
PHILIPPINE AMUSE-
MENT AND GAMING
CORPORATION
G.R. No. 163553 De-
cember 11, 2009

FACTS: PAGCOR is a
government-owned and
controlled corporation
tasked to establish and
operate gambling clubs
and casinos as a means
to promote tourism and
generate sources of reve-
nue for the government.
To achieve these objec-
tives, PAGCOR is vested
with the power to enter
into contracts of every
kind and for any lawful
purpose that pertains to
its business. Pursuant to
this authority, PAGCOR
launched its Foreign High-
roller Marketing Program
(Program). The Program
aims to invite patrons
from foreign countries to
play at the dollar pit of
designated PAGCOR-
operated casinos under
specified terms and con-
ditions and in accordance
with industry practice.

The Korean-based ABS
Corporation was one of
the international groups
that availed of the Pro-
gram.

Yun Kwan Byung (Byung),
VOLUME II, ISSUE No. 12

a Korean national, alleges
that he came to the Phil-
ippines four times to play
for high stakes at the Ca-
sino Filipino. That he was
able to accumulate gam-
bling chips worth US$2.1
million. And that when he
presented the gambling
chips for encashment with
PAGCORs employees or
agents, PAGCOR refused
to redeem them.

PAGCOR argues that
Byung is not a PAGCOR
player, but ABS Corpora-
tions (ABS) junket play-
er.

Byung brought an action
against PAGCOR seeking
the redemption of gam-
bling chips valued at
US$2.1 million.

The Regional Trial Court
(RTC) dismissed the com-
plaint and counterclaim.
Byung appealed the RTC
decision but the Court of
Appeals (CA) affirmed the
RTC decision.

ISSUE: Whether
or not the CA erred in
holding that the Junket
Agreement entered into
by PAGCOR and ABS val-
id.

RULING: The CA erred
in holding that the Junket
Agreement entered into
by PAGCOR and ABS is
valid.


The Junket Agreement
would be valid if under
Section 3(h) of PAGCORs
charter, PAGCOR could
share its gambling fran-
chise with another entity.

PAGCOR HAS THE SOLE
AND EXCLUSIVE AUTHOR-
ITY TO OPERATE A GAM-
BLING ACTIVITY. WHILE
PAGCOR IS ALLOWED
UNDER ITS CHARTER TO
ENTER INTO OPERATORS
OR MANAGEMENT CON-
TRACTS, PAGCOR IS NOT
ALLOWED UNDER THE
SAME CHARTER TO RE-
LINQUISH OR SHARE ITS
FRANCHISE. PAGCOR
CANNOT DELEGATE ITS
POWER IN VIEW OF THE
LEGAL PRINCIPLE OF
DELEGATA POTESTAS
DELEGARE NON POTEST,
INASMUCH AS THERE IS
NOTHING IN THE CHAR-
TER TO SHOW THAT IT
HAS BEEN EXPRESSLY
AUTHORIZED TO DO SO.

PAGCOR, by taking only a
percentage of the earn-
ings of ABS from its for-
eign currency collection,
allowed ABS Corporation
to operate gaming tables
in the dollar pit. The Jun-
ket Agreement is in direct
violation of PAGCORs
charter and is therefore
void.

Since the Junket Agree-
ment violates PAGCORs
charter, gambling be-
tween the junket player
and the junket operator
under such agreement is
illegal and may not be
enforced by the courts.
Article 2014 of the Civil
Code, which refers to ille-
gal gambling, states that
no action can be main-
tained by the winner for
the collection of what he
has won in a game of
chance.




JURISPRUDENCE
Page 18 L C A LINES

Page 19
JURISPRUDENCE
PACIFIC STEAM LAUN-
DRY, INC.
vs.
LAGUNA LAKE DEVEL-
OPMENT
AUTHORITY
G.R. No. 165299 De-
cember 18, 2009


FACTS: Pacific Steam
Laundry, Inc. (Pacific) is a
company engaged in the
business of laundry ser-
vices. The Environmental
Management Bureau of the
Department of Environ-
ment and Natural Re-
sources (DENR) endorsed
to Laguna Lake Develop-
ment Authority (LLDA) the
inspection report on the
complaint of black smoke
emission from Pacific
Steam Laundry Inc.s
(Pacific Steam) plant.
LLDA conducted an investi-
gation and found that un-
treated wastewater gener-
ated from Pacific Steams
laundry washing activities
was discharged directly to
the San Francisco Del Mon-
te River. Furthermore, the
Investigation Report stated
that Pacific Steam was op-
erating without LLDA clear-
ance, AC/PO-ESI, and Dis-
charge Permit from LLDA.
The Environmental Quality
Management Division of
LLDA conducted
wastewater sampling of
Pacific Steams effluent.
The result of the laboratory
analysis showed non-
compliance with effluent
standards. Consequent-
ly, LLDA issued to Pacific
Steam a Notice of Viola-
tion.

Numerous wastewater
sampling was conducted
but all the results re-
vealed that Pacific Steam
still failed to conform with
the effluent standards in
terms of Oil/Grease Con-
centration.

A Pollution Control and
Abatement case was filed
against Pacific Steam be-
fore the LLDA. During the
public hearing another
wastewater sampling was
conducted. The laboratory
results of the wastewater
sampling finally showed
compliance with the efflu-
ent standard in all param-
eters. An issue arose re-
garding the payment of
the accumulated daily
penalty.

Pacific Steam was ordered
to pay a penalty on a dai-
ly rate.

Pacific Steam filed a mo-
tion for reconsideration,
which the LLDA denied in
its Order.

The Court of Appeals (CA)
denied the petition for
review and motion for
reconsideration filed by
Pacific Steam.


ISSUE: Whether or not
the grant of implied pow-
er to LLDA to impose pen-
alties violate the rule on
non-delegation of legisla-
tive power.


RULING: The grant of
implied power to LLDA to
impose penalties does not
violate the rule on non-
delegation of legislative
power.

LLDAs power to impose
fines is not unrestricted.
In this case, LLDA investi-
gated the pollution com-
plaint against Pacific
Steam and conducted
wastewater sampling of
Pacific Steams effluent. It
was only after the investi-
gation result showing its
failure to meet the estab-
lished water and effluent
quality standards that
LLDA imposed a fine
against Pacific Steam. The
P1,000 penalty per day is
in accordance with the
amount of penalty pre-
scribed under PD 984:

SEC. 8. Prohibi-
tions. No person
shall throw, run,
drain, or otherwise
dispose into any of
the water, air and/
or land resources
of the Philippines,
or cause, permit,
suffer to be
thrown, run, drain,
allow to seep or
otherwise dispose
thereto any organic
or inorganic matter
or any substance in
gaseous or liquid
form that shall
cause pollution
thereof.
x x x

SEC 9. Penalties.
x x x

(b) Any person
who shall violate
any of the previous
provisions of Sec-
tion Eight of this
Decree or its imple-
menting rules and
regulations, or any
Order or Decision
of the Commission,
shall be liable to a
penalty of not to
exceed one thou-
sand pesos each
day during which
the violation con-
tinues, or by im-
prisonment of from
two years to six
years, or by both
fine and imprison-
ment, and in addi-
tion such person
may be required or
enjoined from con-
tinuing such viola-
VOLUME II, ISSUE No. 12

tion as hereinafter
provided.
x x x


Clearly, there are ade-
quate statutory limita-
tions on LLDAs power to
impose fines which obvi-
ates unbridled discretion
in the exercise of such
power.

JURISPRUDENCE
Page 20 L C A LINES


John dies and goes to heaven

He gets to meet God and asks him a few questions:

JOHN: God can I ask you a question?

GOD: Go ahead John

JOHN: Why did you make women so pretty?

GOD: So you would like them!

JOHN: Then why did you make them so beautiful?

GOD: So you WOULD love them!

John ponders a moment then asks

JOHN: But why did you make them such airheads?

GOD: So they would love you


LAGUNDI-CARONAN AND ASSOC.
J
L
s
C
O
R
N
E
R

issue
December
Lagundi-Caronan and Associates
Rhem Square Bldg.
Carig Sur
Tuguegarao City