Beja, Sr. v.

CA, 207 SCRA 689

The instant petition for certiorari questions the jurisdiction of the Secretary of the
Department of Transportation and Communications (DOTC) and/or its Administrative Action
Board (AAB) over administrative cases involving personnel below the rank of Assistant
General Manager of the Philippine Ports Authority (PPA), an agency attached to the said
Department.
Petitioner Fidencio Y. Beja, Sr. 1 was first employed by the PPA as arrastre supervisor in
1975. He became Assistant Port Operations Officer in 1976 and Port Operations Officer in
1977. In February 1988, as a result of the reorganization of the PPA, he was appointed
Terminal Supervisor.
On October 21, 1988, the PPA General Manager, Rogelio A. Dayan, filed Administrative
Case No. 11-04-88 against petitioner Beja and Hernando G. Villaluz for grave dishonesty,
grave misconduct, willful violation of reasonable office rules and regulations and conduct
prejudicial to the best interest of the service. Beja and Villaluz allegedly erroneously
assessed storage fees resulting in the loss of P38,150.77 on the part of the PPA.
Consequently, they were preventively suspended for the charges. After a preliminary
investigation conducted by the district attorney for Region X, Administrative Case No. 11-0488 was "considered closed for lack of merit."
On December 13, 1988, another charge sheet, docketed as Administrative Case No. 12-0188, was filed against Beja by the PPA General Manager also for dishonesty, grave
misconduct, violation of reasonable office rules and regulations, conduct prejudicial to the
best interest of the service and for being notoriously undesirable. The charge consisted of
six (6) different specifications of administrative offenses including fraud against the PPA in
the total amount of P218,000.00. Beja was also placed under preventive suspension
pursuant to Sec. 41 of P.D. No. 807.
The case was redocketed as Administrative Case No. PPA-AAB-1-049-89 and thereafter,
the PPA general manager indorsed it to the AAB for "appropriate action." At the scheduled
hearing, Beja asked for continuance on the ground that he needed time to study the
charges against him. The AAB proceeded to hear the case and gave Beja an opportunity to
present evidence. However, on February 20, 1989, Beja filed a petition for certiorari with
preliminary injunction before the Regional Trial Court of Misamis Oriental. 2 Two days later,

he filed with the AAB a manifestation and motion to suspend the hearing of Administrative
Case No. PPA-AAB-1-049-89 on account of the pendency of the certiorari proceeding
before the court. AAB denied the motion and continued with the hearing of the
administrative case.
Thereafter, Beja moved for the dismissal of the certiorari case below and proceeded to file
before this Court a petition for certiorari with preliminary injunction and/or temporary
restraining order. The case was docketed as G.R. No. 87352 captioned "Fidencio Y. Beja v.
Hon. Reinerio 0. Reyes, etc., et al." In the en banc resolution of March 30, 1989, this Court
referred the case to the Court of Appeals for "appropriate action." 3 G.R. No. 87352 was
docketed in the Court of Appeals as CA-G.R. SP No. 17270.
Meanwhile, a decision was rendered by the AAB in Administrative Case No. PPA-AAB-04989. Its dispositive portion reads:
WHEREFORE, judgment is hereby rendered, adjudging the following,
namely:
a) That respondents Geronimo Beja, Jr. and Hernando Villaluz are
exonerated from the charge against them;
b) That respondent Fidencio Y. Beja be dismissed from the service;
c) That his leave credits and retirement benefits are declared forfeited;
d) That he be disqualified from re-employment in the government service;
e) That his eligibility is recommended to be cancelled.
Pasig, Metro Manila, February 28, 1989.
On December 10, 1990, after appropriate proceedings, the Court of Appeals also rendered
a decision 4 in CA-G.R. SP No. 17270 dismissing the petition for certiorari for lack of merit.
Hence, Beja elevated the case back to this Court through an "appeal by certiorari with
preliminary injunction and/or temporary restraining order."

We find the pleadings filed in this case to be sufficient bases for arriving at a decision and
hence, the filing of memoranda has been dispensed with.
In his petition, Beja assails the Court of Appeals for having "decided questions of substance
in a way probably not in accord with law or with the applicable decisions" of this
Court. 5 Specifically, Beja contends that the Court of Appeals failed to declare that: (a) he
was denied due process; (b) the PPA general manager has no power to issue a preventive
suspension order without the necessary approval of the PPA board of directors; (c) the PPA
general manager has no power to refer the administrative case filed against him to the
DOTC-AAB, and (d) the DOTC Secretary, the Chairman of the DOTC-AAB and DOTC-AAB
itself as an adjudicatory body, have no jurisdiction to try the administrative case against him.
Simply put, Beja challenges the legality of the preventive suspension and the jurisdiction of
the DOTC Secretary and/or the AAB to initiate and hear administrative cases against PPA
personnel below the rank of Assistant General Manager.
Petitioner anchors his contention that the PPA general manager cannot subject him to a
preventive suspension on the following provision of Sec. 8, Art. V of Presidential Decree No.
857 reorganizing the PPA:
(d) the General Manager shall, subject to the approval of the Board, appoint
and remove personnel below the rank of Assistant General Manager.
(Emphasis supplied.)
Petitioner contends that under this provision, the PPA Board of Directors and not the PPA
General Manager is the "proper disciplining authority. 6
As correctly observed by the Solicitor General, the petitioner erroneously equates
"preventive suspension" as a remedial measure with "suspension" as a penalty for
administrative dereliction. The imposition of preventive suspension on a government
employee charged with an administrative offense is subject to the following provision of the
Civil Service Law, P.D. No. 807:
Sec. 41. Preventive Suspension. The proper disciplining authority may
preventively suspend any subordinate officer or employee under his authority
pending an investigation, if the charge against such officer or employee
involves dishonesty, oppression or grave misconduct, or neglect in the

performance of duty, or if there are reasons to believe that the respondent is

guilty of charges which would warrant his removal from the service.
Imposed during the pendency of an administrative investigation, preventive suspension is
not a penalty in itself. It is merely a measure of precaution so that the employee who is
charged may be separated, for obvious reasons, from the scene of his alleged misfeasance
while the same is being investigated. 7 Thus, preventive suspension is distinct from the
administrative penalty of removal from office such as the one mentioned in Sec. 8(d) of P.D.
No 857. While the former may be imposed on a respondent during the investigation of the
charges against him, the latter is the penalty which may only be meted upon him at the
termination of the investigation or the final disposition of the case.
The PPA general manager is the disciplining authority who may, by himself and without the
approval of the PPA Board of Directors, subject a respondent in an administrative case to
preventive suspension. His disciplinary powers are sanctioned, not only by Sec. 8 of P.D.
No. 857 aforequoted, but also by Sec. 37 of P.D. No. 807 granting heads of agencies the
"jurisdiction to investigate and decide matters involving disciplinary actions against officers
and employees" in the PPA.
Parenthetically, the period of preventive suspension is limited. It may be lifted even if the
disciplining authority has not finally decided the administrative case provided the ninety-day
period from the effectivity of the preventive suspension has been exhausted. The employee
concerned may then be reinstated. 8 However, the said ninety-day period may be
interrupted. Section 42 of P.D. No. 807 also mandates that any fault, negligence or petition
of a suspended employee may not be considered in the computation of the said period.
Thus, when a suspended employee obtains from a court of justice a restraining order or a
preliminary injunction inhibiting proceedings in an administrative case, the lifespan of such
court order should be excluded in the reckoning of the permissible period of the preventive
suspension. 9
With respect to the issue of whether or not the DOTC Secretary and/or the AAB may initiate
and hear administrative cases against PPA Personnel below the rank of Assistant General
Manager, the Court qualifiedlyrules in favor of petitioner.
The PPA was created through P.D. No. 505 dated July 11, 1974. Under that Law, the
corporate powers of the PPA were vested in a governing Board of Directors known as the

Philippine Port Authority Council. Sec. 5(i) of the same decree gave the Council the power
"to appoint, discipline and remove, and determine the composition of the technical staff of
the Authority and other personnel."
On December 23, 1975, P.D. No. 505 was substituted by P.D. No. 857, See. 4(a) thereof
created the Philippine Ports Authority which would be "attached" to the then Department of
Public Works, Transportation and Communication. When Executive Order No. 125 dated
January 30, 1987 reorganizing the Ministry of Transportation and Communications was
issued, the PPA retained its "attached" status. 10 Even Executive Order No. 292 or the
Administrative Code of 1987 classified the PPA as an agency "attached" to the Department
of Transportation and Communications (DOTC). Sec. 24 of Book IV, Title XV, Chapter 6 of
the same Code provides that the agencies attached to the DOTC "shall continue to operate
and function in accordance with the respective charters or laws creating them, except when
they conflict with this Code."
Attachment of an agency to a Department is one of the three administrative relationships
mentioned in Book IV, Chapter 7 of the Administrative Code of 1987, the other two being
supervision and control and administrative supervision. "Attachment" is defined in Sec. 38
thereof as follows:
(3) Attachment. (a) This refers to the lateral relationship between the
Department or its equivalent and the attached agency or corporation for
purposes of policy and program coordination. The coordination shall be
accomplished by having the department represented in the governing board
of the attached agency or corporation, either as chairman or as a member,
with or without voting rights, if this is permitted by the charter; having the
attached corporation or agency comply with a system of periodic reporting
which shall reflect the progress of programs and projects; and having the
department or its equivalent provide general policies through its
representative in the board, which shall serve as the framework for the
internal policies of the attached corporation or agency;
(b) Matters of day-to-day administration or all those pertaining to internal
operations shall he left to the discretion or judgment of the executive officer of
the agency or corporation. In the event that the Secretary and the head of the
board or the attached agency or corporation strongly disagree on the

interpretation and application of policies, and the Secretary is unable to

resolve the disagreement, he shall bring the matter to the President for
resolution and direction;
(c) Government-owned or controlled corporations attached to a department
shall submit to the Secretary concerned their audited financial statements
within sixty (60) days after the close of the fiscal year; and
(d) Pending submission of the required financial statements, the corporation
shall continue to operate on the basis of the preceding year's budget until the
financial statements shall have been submitted. Should any governmentowned or controlled corporation incur an operation deficit at the close of its
fiscal year, it shall be subject to administrative supervision of the department;
and the corporation's operating and capital budget shall be subject to the
department's examination, review, modification and approval. (emphasis
supplied.)
An attached agency has a larger measure of independence from the Department to which it
is attached than one which is under departmental supervision and control or administrative
supervision. This is borne out by the "lateral relationship" between the Department and the
attached agency. The attachment is merely for "policy and program coordination." With
respect to administrative matters, the independence of an attached agency from
Departmental control and supervision is further reinforced by the fact that even an agency
under a Department's administrative supervision is free from Departmental interference with
respect to appointments and other personnel actions "in accordance with the
decentralization of personnel functions" under the Administrative Code of 1987. 11 Moreover,
the Administrative Code explicitly provides that Chapter 8 of Book IV on supervision and
control shall not apply to chartered institutions attached to a Department. 12
Hence, the inescapable conclusion is that with respect to the management of personnel, an
attached agency is, to a certain extent, free from Departmental interference and control.
This is more explicitly shown by P.D. No. 857 which provides:
Sec. 8. Management and Staff. a) The President shall, upon the
recommendation of the Board, appoint the General Manager and the
Assistant General Managers.

(b) All other officials and employees of the Authority shall be selected and
appointed on the basis of merit and fitness based on a comprehensive and
progressive merit system to be established by the Authority immediately upon
its organization and consistent with Civil Service rules and regulations.The
recruitment, transfer, promotion, and dismissal of all personnel of the
Authority, including temporary workers, shall be governed by such merit
system.
(c) The General Manager shall, subject to the approval of the Board,
determine the staffing pattern and the number of personnel of the Authority,
define their duties and responsibilities, and fix their salaries and emoluments.
For professional and technical positions, the General Manager shall
recommend salaries and emoluments that are comparable to those of similar
positions in other government-owned corporations, the provisions of existing
rules and regulations on wage and position classification notwithstanding.
(d) The General Manager shall, subject to the approval by the Board, appoint
and remove personnel below the rank of Assistant General Manager.
xxx xxx xxx
(emphasis supplied.)
Although the foregoing section does not expressly provide for a mechanism for an
administrative investigation of personnel, by vesting the power to remove erring employees
on the General Manager, with the approval of the PPA Board of Directors, the law impliedly
grants said officials the power to investigate its personnel below the rank of Assistant
Manager who may be charged with an administrative offense. During such investigation, the
PPA General Manager, as earlier stated, may subject the employee concerned to preventive
suspension. The investigation should be conducted in accordance with the procedure set
out in Sec. 38 of P.D. No. 807. 13 Only after gathering sufficient facts may the PPA General
Manager impose the proper penalty in accordance with law. It is the latter action which
requires the approval of the PPA Board of Directors. 14
From an adverse decision of the PPA General Manager and the Board of Directors, the
employee concerned mayelevate the matter to the Department Head or Secretary.

Otherwise, he may appeal directly to the Civil Service Commission. The permissive
recourse to the Department Secretary is sanctioned by the Civil Service Law (P.D. No. 807)
under the following provisions:
Sec. 37. Disciplinary Jurisdiction. (a) The Commission shall decide upon
appeal all administrative disciplinary cases involving the imposition of a
penalty of suspension for more than thirty days, or fine in an amount
exceeding thirty days salary, demotion in rank or salary or transfer, removal or
dismissal from office. A complaint may be filed directly with the Commission
by a private citizen against a government official or employee in which case it
may hear and decide the case or it may deputize any department or agency
or official or group of officials to conduct the investigation. The results of the
investigation shall be submitted to the Commission with recommendation as
to the penalty to be imposed or other action to be taken.
(b) The heads of departments, agencies and instrumentalities, provinces,
cities and municipalities shall have jurisdiction to investigate and decide
matters involving disciplinary action against officers and employees under
their jurisdiction. The decisions shall be final in case the penalty imposed is
suspension for not more than thirty days or fine in an amount not exceeding
thirty days' salary. In case the decision rendered by a bureau or office head is
appealable to the Commission, the same may be initially appealed to the
department and finally to the Commission and pending appeal, the same shall
be executory except when the penalty is removal, in which case the same
shall be executory only after confirmation by the department head.
xxx xxx xxx
(Emphasis supplied.)
It is, therefore, clear that the transmittal of the complaint by the PPA General Manager to the
AAB was premature. The PPA General Manager should have first conducted an
investigation, made the proper recommendation for the imposable penalty and sought its
approval by the PPA Board of Directors. It was discretionary on the part of the herein
petitioner to elevate the case to the then DOTC Secretary Reyes. Only then could the AAB
take jurisdiction of the case.

The AAB, which was created during the tenure of Secretary Reyes under Office Order No.
88-318 dated July 1, 1988, was designed to act, decide and recommend to him "all cases of
administrative malfeasance, irregularities, grafts and acts of corruption in the Department."
Composed of a Chairman and two (2) members, the AAB came into being pursuant to
Administrative Order No. 25 issued by the President on May 25, 1987. 15 Its special nature
as a quasi-judicial administrative body notwithstanding, the AAB is not exempt from the
observance of due process in its proceedings. 16 We are not satisfied that it did so in this
case the respondents protestation that petitioner waived his right to be heard
notwithstanding. It should be observed that petitioner was precisely questioning the AAB's
jurisdiction when it sought judicial recourse.
WHEREFORE, the decision of the Court of Appeals is AFFIRMED insofar as it upholds the
power of the PPA General Manager to subject petitioner to preventive suspension and
REVERSED insofar as it validates the jurisdiction of the DOTC and/or the AAB to act on
Administrative Case No. PPA-AAB-1-049-89 and rules that due process has been accorded
the petitioner.
The AAB decision in said case is hereby declared NULL and VOID and the case in
REMANDED to the PPA whose General Manager shall conduct with dispatch its
reinvestigation.
The preventive suspension of petitioner shall continue unless after a determination of its
duration, it is found that he had served the total of ninety (90) days in which case he shall be
reinstated immediately.
SO ORDERED.
Hugo v. Light Rail Transit Authority, 616 SCRA 155
Respondent Light Rail Transit Authority (LRTA), a government-owned and controlled
corporation, constructed a light rail transit system which traverses
from Baclaran in Paraaque City to Monumento in Kalookan City, Metro Manila pursuant to
its mandate under its charter, Executive Order No. 603, Series of 1980, as amended. 1
To effectively carry out its mandate, LRTA entered into a ten-year Agreement for the
Management and Operation of the Metro Manila Light Rail Transit System (the Agreement)

from June 8, 1984 until June 8, 1994 with Metro Transit Organization, Inc. (METRO). 2 One
of the stipulations in the Agreement was
METRO shall be free to employ such employees and officers as it shall deem necessary in
order to carry out the requirements of the Agreement. Such employees and officers shall be
the employees of METRO and not of LRTA. METRO shall prepare a compensation
schedule for the salaries and fringe benefits of its personnel (Article 3, par.
3.05).3 (emphasis and underscoring supplied)
METRO thus hired its own employees including herein petitioners-members of the Pinagisang Lakas ng Manggagawa sa METRO, Inc.-National Federation of Labor, otherwise
known as PIGLAS-METRO, INC.-NFL-KMU (the Union), the certified exclusive collective
bargaining representative of METROs rank-and-file employees.
LRTA later purchased the shares of stocks of METRO via Deed of Sale of June 9, 1989.
The two entities, however, continued with their distinct and
separate juridical personalities such that when the ten-year Agreement expired on June 8,
1994, they renewed the same.4
On July 25, 2000, on account of a deadlock in the negotiation for the forging of a new
collective bargaining agreement between METRO and the Union, petitioners filed a Notice
of Strike before the National Conciliation and Mediation Board, National Capital Region
(NCR). On even date, the Union went on strike, completely paralyzing the operations of the
light rail transit system.
Then Secretary of Labor Bienvenido E. Laguesma assumed jurisdiction over the conflict and
directed the striking employees including herein petitioners to immediately return to work
and METRO to accept them back under the same terms and conditions of employment
prevailing prior to the strike.
By LRTAs claim, the striking employees including petitioners defied the return-to-work
order. Contradicting such claim, petitioners alleged that upon learning of the order, they
attempted to comply with it but the security guards of METRO barred them from entering
their workplace for security reasons, the latter being afraid that they (the striking employees)
might sabotage the vital machineries and equipment of the light rail transit system. 5

When the Agreement expired on July 31, 2000, LRTA did not renew it. It instead took over
the management and operations of the light rail transit system, hiring new personnel for the
purpose.
METRO
thus
considered
the
employment
of
all
its
personnel terminated effective September 30, 2000.
On February 28, 2002, petitioners filed a complaint 6 for illegal dismissal and unfair labor
practice with prayer for reinstatement and damages against METRO and LRTA before the
NCR Arbitration Branch, National Labor Relations Commission (NLRC), docketed as NLRC
Case No. NCR-30-02-01191-02.
In impleading LRTA in their complaint, petitioners alleged that the "non-renewal of the
[Agreement] is but an ingenious, albeit unlawful, scheme carried out by the respondents to
get rid of personnel they perceived as activists and troublemakers, thus, terminating the
complainants without any just or lawful cause." 7
LRTA filed a motion to dismiss8 the complaint on the ground that the Labor Arbiter and the
NLRC have nojurisdiction over it, for, by petitioners own admission, there was no employeremployee relationship between it and petitioners.
By Order9 of December 17, 2002, Labor Arbiter Felipe P. Pati granted the motion of LRTA
and accordinglydismissed petitioners complaint for lack of jurisdiction.
On appeal by petitioners, the NLRC, by Resolution 10 of July 31, 2003, reversed the Labor
Arbiters dismissal of petitioners complaint and rendered a new one "declaring that the
Labor Arbiter and this Commission can exercise jurisdiction over the person of Respondent
LRTA," LRTA being considered an "indirect employer" on account of the Agreement; and
that LRTA is a "necessary party" which ought to be joined as party for a complete
determination of petitioners claims that the non-renewal of the Agreement by LRTA and the
cessation of business by METRO were carried out with the intent to cover up the illegal
dismissal of petitioners. The NLRC thus ordered the remand of the records of the case to
the Labor Arbiter for further proceedings.111avvphi1
After the conclusion of the proceedings before his office, Labor Arbiter Pati found for
petitioners, by Decision of August 18, 2004.

LRTA
appealed
the
decision
to
the
NLRC
a motion for leave to post a property bond in lieu of cash orsurety bond.

and

filed

By Resolution12 of April 28, 2005, the NLRC dismissed LRTAs appeal due to
its failure to perfect the same, nocash or surety bond having been posted.
Its motion for reconsideration13 having been denied by Resolution of August 31, 2005, LRTA
filed a Petition for Certiorari before the Court of Appeals which, by the challenged
Decision14 of February 20, 2008, it granted and accordingly reversed the assailed issuances
of the NLRC.
The appellate court, holding that "(t)he property bond offered by LRTA should be deemed
substantial compliance with the rules," 15 directed the NLRC to give due course to LRTAs
appeal upon filing of the appeal bond within such reasonable period of time it may set.
Hence, petitioners present Petition for Review on Certiorari alleging that, inter alia, LRTAs
failure to perfect its appeal by posting a cash or surety bond "renders the [Labor Arbiters]
judgment final and executory and the appeal ineffective and invalid." 16
The Labor Arbiter and the NLRC do not have jurisdiction over LRTA. Petitioners
themselves admitted in their complaint that LRTA "is a government agency organized and
existing
pursuant
to
an original charter (ExecutiveOrder No. 603),"
and
that they are employees of METRO.
Light Rail Transit Authority v. Venus, Jr., 17 which has a similar factual backdrop, holds that
LRTA, being a government-owned or controlled corporation created by an original charter, is
beyond the reach of the Department of Labor and Employment which has jurisdiction over
workers in the private sector, viz:
. . . [E]mployees of petitioner METRO cannot be considered as employees of petitioner
LRTA. The employees hired by METRO are covered by the Labor Code and are under the
jurisdiction of the Department of Labor and Employment, whereas the employees of
petitioner LRTA, a government-owned and controlled corporation with original charter,
are covered by civil service rules. Herein private respondent workers cannot have the best
of two worlds, e.g., be considered government employees of petitioner LRTA, yet allowed to
strike as private employees under our labor laws. x x x.

xxxx
. . . [I]t is inappropriate to pierce the corporate veil of petitioner METRO. x x x.
In the instant case, petitioner METRO, formerly Meralco Transit Organization, Inc., was
originally owned by the Manila Electric Company and registered with the Securities and
Exchange Commission more than a decade before the labor dispute. It then entered into a
ten-year agreement with petitioner LRTA in 1984. And, even if petitioner LRTA eventually
purchased METRO in 1989, both parties maintained their separate and distinct juridical
personality and allowed the agreement to proceed. In 1990, this Court, in Light Rail Transit
Authority v. Commission on Audit (G.R. No. 88365, January 9, 1990), even upheld the
validity of the said agreement. Consequently, the agreement was extended beyond its tenyear period. In 1995, METROs separate juridical identity was again recognized when it
entered into a collective bargaining agreement with the workers union. All these years,
METROs distinct corporate personality continued quiescently, separate and apart from the
juridical personality of petitioner LRTA.
The labor dispute only arose in 2000, after a deadlock occurred during the collective
bargaining between petitioner METRO and the workers union. This alone is not a
justification to pierce the corporate veil of petitioner METRO and make petitioner LRTA liable
to private respondent workers. There are no badges of fraud or any wrongdoing to pierce
the corporate veil of petitioner METRO.
xxxx
In sum, petitioner LRTA cannot be held liable to the employees of petitioner
METRO.18 (emphasis and underscoring supplied)
IN FINE, the Labor Arbiters decision against LRTA was rendered without jurisdiction, hence,
it is void, thus rendering it improper for the remand of the case to the NLRC, as ordered by
the appellate court, for it (NLRC) to give due course to LRTAs appeal.
A final word. It bears emphasis that this Courts present Decision treats only with respect to
the Labor Arbiters decision against respondent LRTA.

WHEREFORE, the assailed Decision of the Court of the Appeals is REVERSED and SET
ASIDE. Petitioners complaint in NLRC Case No. NCR-30-02-01191-02, insofar as herein
respondent Light Rail Transit Authority is concerned, is DISMISSED.
SO ORDERED.
Chiongbian v. Orbos, 245 SCRA 253
These suits challenge the validity of a provision of the Organic Act for the Autonomous
Region in Muslim Mindanao (R.A. No. 6734), authorizing the President of the Philippines to
"merge" by administrative determination the regions remaining after the establishment of the
Autonomous Region, and the Executive Order issued by the President pursuant to such
authority, "Providing for the Reorganization of Administrative Regions in Mindanao." A
temporary restraining order prayed for by the petitioners was issued by this Court on
January 29, 1991, enjoining the respondents from enforcing the Executive Order and statute
in question.
The facts are as follows:
Pursuant to Art. X, 18 of the 1987 Constitution, Congress passed R.A. No. 6734, the
Organic Act for the Autonomous Region in Muslim Mindanao, calling for a plebiscite to be
held in the provinces of Basilan, Cotobato, Davao del Sur, Lanao del Norte, Lanao del Sur,
Maguindanao, Palawan, South Cotabato, Sultan Kudarat, Sulu, Tawi-Tawi, Zamboanga del
Norte, and Zamboanga del Sur, and the cities of Cotabato, Dapitan, Dipolog, General
Santos, Iligan, Marawi, Pagadian, Puerto Princesa and Zamboanga. In the ensuing
plebiscite held on November 16, 1989, four provinces voted in favor of creating an
autonomous region. These are the provinces of Lanao del Sur, Maguindanao, Sulu and
Tawi-Tawi. In accordance with the constitutional provision, these provinces became the
Autonomous Region in Muslim Mindanao.
On the other hand, with respect to provinces and cities not voting in favor of the
Autonomous Region, Art. XIX, 13 of R.A. No. 6734 provides,
That only the provinces and cities voting favorably in such plebiscites shall be
included in the Autonomous Region in Muslim Mindanao. The provinces and
cities which in the plebiscite do not vote for inclusion in the Autonomous
Region shall remain in the existing administrative regions. Provided, however,

that the President may, by administrative determination, merge the existing

regions.
Pursuant to the authority granted by this provision, then President Corazon C. Aquino
issued on October 12, 1990 Executive Order No. 429, "providing for the Reorganization of
the Administrative Regions in Mindanao." Under this Order, as amended by E.O. No. 439
(1) Misamis Occidental, at present part of Region X, will become part of
Region IX.
(2) Oroquieta City, Tangub City and Ozamiz City, at present parts of Region X
will become parts of Region IX.
(3) South Cotobato, at present a part of Region XI, will become part of Region
XII.
(4) General Santos City, at present part of Region XI, will become part of
Region XII.
(5) Lanao del Norte, at present part of Region XII, will become part of Region
IX.
(6) Iligan City and Marawi City, at present part of Region XII, will become part
of Region IX.
Petitioners in G.R. No. 96754 are, or at least at the time of the filing of their petition,
members of Congress representing various legislative districts in South Cotobato,
Zamboanga del Norte, Basilan, Lanao del Norte and Zamboanga City. On November 12,
1990, they wrote then President Aquino protesting E.O. No. 429. They contended that
There is no law which authorizes the President to pick certain provinces and
cities within the existing regions some of which did not even take part in
the plebiscite as in the case of the province of Misamis Occidental and the
cities of Oroquieta, Tangub and Ozamiz and restructure them to new
administrative regions. On the other hand, the law (Sec. 13, Art. XIX, R.A.
6734) is specific to the point, that is, that "the provinces and cities which in the

plebiscite do not vote for inclusion in the Autonomous Region shall remain in
the existing administrative regions."
The transfer of the provinces of Misamis Occidental from Region X to Region
IX; Lanao del Norte from Region XII to Region IX, and South Cotobato from
Region XI to Region XII are alterations of the existing structures of
governmental units, in other words, reorganization. This can be gleaned from
Executive Order No. 429, thus
Whereas, there is an urgent need to reorganize the
administrative regions in Mindanao to guarantee the effective
delivery of field services of government agencies taking into
consideration the formation of the Autonomous Region in
Muslim Mindanao.
With due respect to Her Excellency, we submit that while the authority
necessarily includes the authority to merge, the authority to merge does not
include the authority to reorganize. Therefore, the President's authority under
RA 6734 to "merge existing regions" cannot be construed to include the
authority to reorganize them. To do so will violate the rules of statutory
construction.
The transfer of regional centers under Executive Order 429 is actually a
restructuring (reorganization) of administrative regions. While this
reorganization, as in Executive Order 429, does not affect the apportionment
of congressional representatives, the same is not valid under the penultimate
paragraph of Sec. 13, Art. XIX of R.A. 6734 and Ordinance appended to the
1986 Constitution apportioning the seats of the House of Representatives of
Congress of the Philippines to the different legislative districts in provinces
and cities. 1
As their protest went unheeded, while Inauguration Ceremonies of the New Administrative
Region IX were scheduled on January 26, 1991, petitioners brought this suit
for certiorari and prohibition.

On the other hand, the petitioner in G.R. No. 96673, Immanuel Jaldon, is a resident of
Zamboanga City, who is suing in the capacity of taxpayer and citizen of the Republic of the
Philippines.
Petitioners in both cases contend that Art. XIX, 13 of R.A. No. 6734 is unconstitutional
because (1) it unduly delegates legislative power to the President by authorizing him to
"merge [by administrative determination] the existing regions" or at any rate provides no
standard for the exercise of the power delegated and (2) the power granted is not
expressed in the title of the law.
In addition, petitioner in G.R. No. 96673 challenges the validity of E.O. No. 429 on the
ground that the power granted by Art. XIX, 13 to the President is only to "merge regions IX
and XII" but not to reorganize the entire administrative regions in Mindanao and certainly
not to transfer the regional center of Region IX from Zamboanga City to Pagadian City.
The Solicitor General defends the reorganization of regions in Mindanao by E.O. No. 429 as
merely the exercise of a power "traditionally lodged in the President," as held in Abbas
v. Comelec, 2 and as a mere incident of his power of general supervision over local
governments and control of executive departments, bureaus and offices under Art. X, 16
and Art. VII, 17, respectively, of the Constitution.
He contends that there is no undue delegation of legislative power but only a grant of the
power to "fill up" or provide the details of legislation because Congress did not have the
facility to provide for them. He cites by analogy the case of Municipality of Cardona
v. Municipality of Binangonan, 3 in which the power of the Governor-General to fix municipal
boundaries was sustained on the ground that
[such power] is simply a transference of certain details with respect to
provinces, municipalities, and townships, many of them newly created, and all
of them subject to a more or less rapid change both in development and
centers of population, the proper regulation of which might require not only
prompt action but action of such a detailed character as not to permit the
legislative body, as such, to take it efficiently.
The Solicitor General justifies the grant to the President of the power "to merge the existing
regions" as something fairly embraced in the title of R.A. No. 6734, to wit, "An Act Providing

for an Organic Act for the Autonomous Region in Muslim Mindanao," because it is germane
to it.
He argues that the power is not limited to the merger of those regions in which the
provinces and cities which took part in the plebiscite are located but that it extends to all
regions in Mindanao as necessitated by the establishment of the autonomous region.
Finally, he invokes P.D. No. 1416, as amended by P.D. No. 1772 which provides:
1. The President of the Philippines shall have the continuing authority to
reorganize the National Government. In exercising this authority, the
President shall be guided by generally acceptable principles of good
government and responsive national government, including but not limited to
the following guidelines for a more efficient, effective, economical and
development-oriented governmental framework:
(a) More effective planning implementation, and review
functions;
(b) Greater decentralization and responsiveness in decisionmaking process;
(c) Further minimization, if not, elimination, of duplication or
overlapping of purposes, functions, activities, and programs;
(d) Further development of as standardized as possible
ministerial, sub-ministerial and corporate organizational
structures;
(e) Further development of the regionalization process; and
(f) Further rationalization of the functions of and administrative
relationships among government entities.
For purposes of this Decree, the coverage of the continuing
authority of the President to reorganize shall be interpreted to
encompass all agencies, entities, instrumentalities, and units of

the National Government, including all government owned or

controlled corporations as well as the entire range of the
powers, functions, authorities, administrative relationships, acid
related aspects pertaining to these agencies, entities,
instrumentalities, and units.
2. [T]he President may, at his discretion, take the following actions:
xxx xxx xxx
f. Create, abolish, group, consolidate, merge, or integrate
entities, agencies, instrumentalities, and units of the National
Government, as well as expand, amend, change, or otherwise
modify their powers, functions and authorities, including, with
respect to government-owned or controlled corporations, their
corporate life, capitalization, and other relevant aspects of their
charters.
g. Take such other related actions as may be necessary to
carry out the purposes and objectives of this Decree.
Considering the arguments of the parties, the issues are:
(1) whether the power to "merge" administrative regions is legislative in character, as
petitioners contend, or whether it is executive in character, as respondents claim it is, and,
in any event, whether Art. XIX, 13 is invalid because it contains no standard to guide the
President's discretion;
(2) whether the power given is fairly expressed in the title of the statute; and
(3) whether the power granted authorizes the reorganization even of regions the provinces
and cities in which either did not take part in the plebiscite on the creation of the
Autonomous Region or did not vote in favor of it; and
(4) whether the power granted to the President includes the power to transfer the regional
center of Region IX from Zamboanga City to Pagadian City.

It will be useful to recall first the nature of administrative regions and the basis and purpose
for their creation. On September 9, 1968, R.A. No. 5435 was passed "authorizing the
President of the Philippines, with the help of a Commission on Reorganization, to
reorganize the different executive departments, bureaus, offices, agencies and
instrumentalities of the government, including banking or financial institutions and
corporations owned or controlled by it." The purpose was to promote "simplicity, economy
and efficiency in the government." 4 The Commission on Reorganization created under the
law was required to submit an integrated reorganization plan not later than December 31,
1969 to the President who was in turn required to submit the plan to Congress within forty
days after the opening of its next regular session. The law provided that any reorganization
plan submitted would become effective only upon the approval of Congress. 5
Accordingly, the Reorganization Commission prepared an Integrated Reorganization Plan
which divided the country into eleven administrative regions. 6 By P.D. No. 1, the Plan was
approved and made part of the law of the land on September 24, 1972. P.D. No. 1 was
twice amended in 1975, first by P.D. No. 742 which "restructur[ed] the regional organization
of Mindanao, Basilan, Sulu and Tawi-Tawi" and later by P.D. No. 773 which further
"restructur[ed] the regional organization of Mindanao and divid[ed] Region IX into two subregions." In 1978, P.D. No. 1555 transferred the regional center of Region IX from Jolo to
Zamboanga City.
Thus the creation and subsequent reorganization of administrative regions have been by
the President pursuant to authority granted to him by law. In conferring on the President the
power "to merge [by administrative determination] the existing regions" following the
establishment of the Autonomous Region in Muslim Mindanao, Congress merely followed
the pattern set in previous legislation dating back to the initial organization of administrative
regions in 1972. The choice of the President as delegate is logical because the division of
the country into regions is intended to facilitate not only the administration of local
governments but also the direction of executive departments which the law requires should
have regional offices. As this Court observed in Abbas, "while the power to merge
administrative regions is not expressly provided for in the Constitution, it is a power which
has traditionally been lodged with the President to facilitate the exercise of the power of
general supervision over local governments [see Art. X, 4 of the Constitution]." The regions
themselves are not territorial and political divisions like provinces, cities, municipalities and
barangays but are "mere groupings of contiguous provinces for administrative

purposes." 7 The power conferred on the President is similar to the power to adjust
municipal boundaries 8which has been described in Pelaez v. Auditor General 9 or as
"administrative in nature."
There is, therefore, no abdication by Congress of its legislative power in conferring on the
President the power to merge administrative regions. The question is whether Congress has
provided a sufficient standard by which the President is to be guided in the exercise of the
power granted and whether in any event the grant of power to him is included in the subject
expressed in the title of the law.
First, the question of standard. A legislative standard need not be expressed. It may simply
be gathered or implied. 10 Nor need it be found in the law challenged because it may be
embodied in other statutes on the same subject as that of the challenged legislation. 11
With respect to the power to merge existing administrative regions, the standard is to be
found in the same policy underlying the grant to the President in R.A. No. 5435 of the power
to reorganize the Executive Department, to wit: "to promote simplicity, economy and
efficiency in the government to enable it to pursue programs consistent with national goals
for accelerated social and economic development and to improve the service in the
transaction of the public business." 12 Indeed, as the original eleven administrative regions
were established in accordance with this policy, it is logical to suppose that in authorizing
the President to "merge [by administrative determination] the existing regions" in view of the
withdrawal from some of those regions of the provinces now constituting the Autonomous
Region, the purpose of Congress was to reconstitute the original basis for the organization
of administrative regions.
Nor is Art. XIX, 13 susceptible to charge that its subject is not embraced in the title of R.A.
No. 6734. The constitutional requirement that "every bill passed by the Congress shall
embrace only one subject which shall be expressed in the title thereof" 13 has always been
given a practical rather than a technical construction. The title is not required to be an index
of the content of the bill. It is a sufficient compliance with the constitutional requirement if the
title expresses the general subject and all provisions of the statute are germane to that
subject. 14 Certainly the reorganization of the remaining administrative regions is germane to
the general subject of R.A. No. 6734, which is the establishment of the Autonomous Region
in Muslim Mindanao.

Finally, it is contended that the power granted to the President is limited to the
reorganization of administrative regions in which some of the provinces and cities which
voted in favor of regional autonomy are found, because Art. XIX, 13 provides that those
which did not vote for autonomy "shall remain in the existing administrative regions." More
specifically, petitioner in G.R. No. 96673 claims:
The questioned Executive Order No. 429 distorted and, in fact, contravened
the clear intent of this provision by moving out or transferring certain political
subdivisions (provinces/cities) out of their legally designated regions.
Aggravating this unacceptable or untenable situation is EO No. 429's effecting
certain movements on areas which did not even participate in the November
19, 1989 plebiscite. The unauthorized action of the President, as effected by
and under the questioned EO No. 429, is shown by the following dispositions:
(1) Misamis Occidental, formerly of Region X and which did not even
participate in the plebiscite, was moved from said Region X to Region IX; (2)
the cities of Ozamis, Oroquieta, and Tangub, all formerly belonging to Region
X, which likewise did not participate in the said plebiscite, were transferred to
Region IX; (3) South Cotobato, from Region XI to Region XII; (4) General
Santos City: from Region XI to Region XII; (5) Lanao del Norte, from Region
XII to Region IX; and (6) the cities of Marawi and Iligan from Region XII to
Region IX. All of the said provinces and cities voted "NO", and thereby
rejected their entry into the Autonomous Region in Muslim Mindanao, as
provided under RA No. 6734. 15
The contention has no merit. While Art. XIX, 13 provides that "The provinces and cities
which do not vote for inclusion in the Autonomous Region shall remain in the existing
administrative regions," this provision is subject to the qualification that "the President may
by administrative determination merge the existing regions." This means that while nonassenting provinces and cities are to remain in the regions as designated upon the creation
of the Autonomous Region, they may nevertheless be regrouped with contiguous provinces
forming other regions as the exigency of administration may require.
The regrouping is done only on paper. It involves no more than are definition or redrawing of
the lines separating administrative regions for the purpose of facilitating the administrative
supervision of local government units by the President and insuring the efficient delivery of

essential services. There will be no "transfer" of local governments from one region to
another except as they may thus be regrouped so that a province like Lanao del Norte,
which is at present part of Region XII, will become part of Region IX.
The regrouping of contiguous provinces is not even analogous to a redistricting or to the
division or merger of local governments, which all have political consequences on the right
of people residing in those political units to vote and to be voted for. It cannot be
overemphasized that administrative regions are mere groupings of contiguous provinces for
administrative purposes, not for political representation.
Petitioners nonetheless insist that only those regions, in which the provinces and cities
which voted for inclusion in the Autonomous Region are located, can be "merged" by the
President.
To be fundamental reason Art. XIX, 13 is not so limited. But the more fundamental reason
is that the President's power cannot be so limited without neglecting the necessities of
administration. It is noteworthy that the petitioners do not claim that the reorganization of the
regions in E.O. No. 429 is irrational. The fact is that, as they themselves admit, the
reorganization of administrative regions in E.O. No. 429 is based on relevant criteria, to wit:
(1) contiguity and geographical features; (2) transportation and communication facilities; (3)
cultural and language groupings; (4) land area and population; (5) existing regional centers
adopted by several agencies; (6) socio-economic development programs in the regions and
(7) number of provinces and cities.
What has been said above applies to the change of the regional center from Zamboanga
City to Pagadian City. Petitioners contend that the determination of provincial capitals has
always been by act of Congress. But as, this Court said in Abbas, 16 administrative regions
are mere "groupings of contiguous provinces for administrative purposes, . . . [They] are not
territorial and political subdivisions like provinces, cities, municipalities and barangays."
There is, therefore, no basis for contending that only Congress can change or determine
regional centers. To the contrary, the examples of P.D. Nos. 1, 742, 773 and 1555 suggest
that the power to reorganize administrative regions carries with it the power to determine the
regional center.
It may be that the transfer of the regional center in Region IX from Zamboanga City to
Pagadian City may entail the expenditure of large sums of money for the construction of

buildings and other infrastructure to house regional offices. That contention is addressed to
the wisdom of the transfer rather than to its legality and it is settled that courts are not the
arbiters of the wisdom or expediency of legislation. In any event this is a question that we
will consider only if fully briefed and upon a more adequate record than that presented by
petitioners.
WHEREFORE, the petitions for certiorari and prohibition are DISMISSED for lack of merit.
SO ORDERED.
Presidential Anti-Dollar Salting Task Force v. CA, 171 SCRA 348
The petitioner, the Presidential Anti-Dollar Salting Task Force, the President's arm assigned
to investigate and prosecute so-called "dollar salting" activities in the country (per
Presidential Decree No. 1936 as amended by Presidential Decree No. 2002), asks the
Court to hold as null and void two Resolutions of the Court of Appeals, dated September 24,
1987 1 and May 20, 1988, 2 reversing its Decision, dated October 24, 1986. 3 The Decision
set aside an Order, dated April 16, 1985, of the Regional Trial Court, 4 as well as its Order,
dated August 21, 1985. The Resolution, dated September 24, 1987 disposed of, and
granted, the private respondent Karamfil Import-Export Co., Inc.'s motion for reconsideration
of the October 24, 1986 Decision; the Resolution dated May 20, 1988, in turn, denied the
petitioner's own motion for reconsideration.
The facts are not in controversy. We quote:
On March 12, 1985, State Prosecutor Jose B. Rosales, who is assigned with
the Presidential Anti-Dollar Salting Task Force hereinafter referred to as PADS
Task Force for purposes of convenience, issued search warrants Nos. 156,
157, 158, 159, 160 and 161 against the petitioners Karamfil Import-Export
Co., Inc., P & B Enterprises Co., Inc., Philippine Veterans Corporation,
Philippine Veterans Development Corporation, Philippine Construction
Development Corporation, Philippine Lauan Industries Corporation, Intertrade Development (Alvin Aquino), Amelili U. Malaquiok Enterprises and
Jaime P. Lucman Enterprises.
The application for the issuance of said search warrants was filed by Atty. Napoleon
Gatmaytan of the Bureau of Customs who is a deputized member of the PADS Task Force.

Attached to the said application is the affidavit of Josefin M. Castro who is an operative and
investigator of the PADS Task Force. Said Josefin M. Castro is likewise the sole deponent in
the purported deposition to support the application for the issuance of the six (6) search
warrants involved in this case. The application filed by Atty. Gatmaytan, the affidavit and
deposition of Josefin M. Castro are all dated March 12, 1985. 5
Shortly thereafter, the private respondent (the petitioner below) went to the Regional Trial
Court on a petition to enjoin the implementation of the search warrants in question. 6 On
March 13, 1985, the trial court issued a temporary restraining order [effective "for a period of
five (5) days notice " 7 ] and set the case for hearing on March 18, 1985.
In disposing of the petition, the said court found the material issues to be:
1) Competency of this Court to act on petition filed by the petitioners;
2) Validity of the search warrants issued by respondent State Prosecutor;
3) Whether or not the petition has become moot and academic because all
the search warrants sought to be quashed had already been implemented
and executed. 8
On April 16, 1985, the lower court issued the first of its challenged Orders, and held:
WHEREFORE, in view of all the foregoing, the Court hereby declares Search
Warrant Nos. 156, 157, 158, 159, 160, and 161 to be null and void.
Accordingly, the respondents are hereby ordered to return and surrender
immediately all the personal properties and documents seized by them from
the petitioners by virtue of the aforementioned search warrants.
SO ORDERED. 9
On August 21, 1985, the trial court denied reconsideration.
On April 4, 1986, the Presidential Anti-Dollar Salting Task Force went to the respondent
Court of Appeals to contest, on certiorari, the twin Order(s) of the lower court.
In ruling initially for the Task Force, the Appellate Court held:

Herein petitioner is a special quasi-judicial body with express powers

enumerated under PD 1936 to prosecute foreign exchange violations defined
and punished under P.D. No. 1883.
The petitioner, in exercising its quasi-judicial powers, ranks with the Regional
Trial Courts, and the latter in the case at bar had no jurisdiction to declare the
search warrants in question null and void.
Besides as correctly pointed out by the Assistant Solicitor General the
decision of the Presidential Anti-Dollar Salting Task Force is appealable to the
Office of the President.10
On November 12, 1986, Karamfil Import-Export Co., Inc. sought a reconsideration, on the
question primarily of whether or not the Presidential Anti-Dollar Salting Task Force is "such
other responsible officer' countenanced by the 1973 Constitution to issue warrants of search
and seizure.
As we have indicated, the Court of Appeals, on Karamfil's motion, reversed itself and issued
its Resolution, dated September 1987, and subsequently, its Resolution, dated May 20,
1988, denying the petitioner's motion for reconsideration.
In its petition to this Court, the petitioner alleges that in so issuing the Resolution(s) abovementioned, the respondent Court of Appeals "committed grave abuse of discretion and/or
acted in excess of its appellate jurisdiction," 11 specifically:
a) In deviating from the settled policy and rulings of the Supreme Court that
no Regional Trial Courts may countermand or restrain the enforcement of
lawful writs or decrees issued by a quasi-judicial body of equal and coordinate
rank, like the PADS Task Force;
b) For resorting to judicial legislation to arrive at its erroneous basis for
reconsidering its previous Decision dated October 24, 1986 (see Annex "I")
and thus promulgated the questioned Resolutions (Annexes "A" and "B"),
which violated the constitutional doctrine on separation of powers;
c) In not resolving directly the other important issues raised by the petitioner
in its Petition in CA-G.R. No. 08622-SP despite the fact that petitioner has

demonstrated sufficiently and convincingly that respondent RTC, in issuing

the questioned Orders in Special Proceeding No. M-624 (see Annexes "C"
and 'D"), committed grave abuse of discretion and/or acted in excess of
jurisdiction:
1. In ruling that (a) the description of the things to be seized as stated in the
contested search warrant were too general which allegedly render the search
warrants null and void; (b) the applications for the contested search warrants
actually charged two offenses in contravention of the 2nd paragraph, Section
3, Rule 126 of the Rules of Court; and (c) this case has not become moot and
academic, even if the contested search warrants had already been fully
implemented with positive results; and
2. In ruling that the petitioner PADS Task Force has not been granted under
PD 1936 'judicial or quasi-judicial jurisdiction. 12
We find, upon the foregoing facts, that the essential questions that confront us are- (i) is the
Presidential Anti-Dollar Salting Task Force a quasi-judicial body, and one co-equal in rank
and standing with the Regional Trial Court, and accordingly, beyond the latter's jurisdiction;
and (ii) may the said presidential body be said to be "such other responsible officer as may
be authorized by law" to issue search warrants under the 1973 Constitution questions we
take up seriatim.**
In submitting that it is a quasi-judicial entity, the petitioner states that it is endowed with
"express powers and functions under PD No. 1936, to prosecute foreign exchange
violations as defined and punished under PD No. 1883." 13 "By the very nature of its
express powers as conferred by the laws," so it is contended, "which are decidedly quasijudicial or discretionary function, such as to conduct preliminary investigation on the charges
of foreign exchange violations, issue search warrants or warrants of arrest, hold departure
orders, among others, and depending upon the evidence presented, to dismiss the charges
or to file the corresponding information in court of Executive Order No. 934, PD No. 1936
and its Implementing Rules and Regulations effective August 26, 1984), petitioner exercises
quasi-judicial power or the power of adjudication ." 14
The Court of Appeals, in its Resolution now assailed, 15 was of the opinion that "[t]he grant
of quasi-judicial powers to petitioner did not diminish the regular courts' judicial power of

interpretation. The right to interpret a law and, if necessary to declare one unconstitutional,
exclusively pertains to the judiciary. In assuming this function, courts do not proceed on the
theory that the judiciary is superior to the two other coordinate branches of the government,
but solely on the theory that they are required to declare the law in every case which come
before them." 16
This Court finds the Appellate Court to be in error, since what the petitioner puts to question
is the Regional Trial Court's act of assuming jurisdiction over the private respondent's
petition below and its subsequent countermand of the Presidential Anti-Dollar Salting Task
Force's orders of search and seizure, for the reason that the presidential body, as an entity
(allegedly) coordinate and co-equal with the Regional Trial Court, was (is) not vested with
such a jurisdiction. An examination of the Presidential Anti-Dollar Salting Task Force's
petition shows indeed its recognition of judicial review (of the acts of Government) as a
basic privilege of the courts. Its objection, precisely, is whether it is the Regional Trial Court,
or the superior courts, that may undertake such a review.
Under the Judiciary Reorganization Act of 1980, 17 the Court of Appeals exercises:
(3) Exclusive appellate jurisdiction over all final judgments, decisions,
resolutions, orders or awards of Regional Trial Court and quasi-judicial
agencies, instrumentalities, boards or commissions, except those falling
within the appellate jurisdiction of the Supreme Court in accordance with the
Constitution, the provisions of this Act, and of subparagraph (1) of the third
paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the
Judiciary Act of 1948. 18
xxx xxx xxx
Under the present Constitution, with respect to its provisions on Constitutional
Commissions, it is provided, in part that:
... Unless otherwise provided by this Constitution or by law, any decision,
order, or ruling of each Commission may be brought to the Supreme Court on
certiorari by the aggrieved party within thirty days from receipt of a copy
thereof. 19

On the other hand, Regional Trial Courts have exclusive original jurisdiction:
(6) In all cases not within the exclusive jurisdiction of any court, tribunal,
person or body exercising judicial or quasi-judicial functions. 20
xxx xxx xxx
Likewise:
... The Supreme Court may designate certain branches of the Regional Trial
Court to handle exclusively criminal cases, juvenile and domestic relations
cases, agrarian case, urban land reform cases which do not fall under the
jurisdiction of quasi- judicial bodies and agencies and/or such other special
cases as the Supreme Court may determine in the interest of a speedy and
efficient administration of justice. 21
xxx xxx xxx
Under our Resolution dated January 11, 1983: 22
... The appeals to the Intermediate Appellate Court [now, Court of Appeals]
from quasi-judicial bodies shall continue to be governed by the provisions of
Republic Act No. 5434 insofar as the same is not inconsistent with the
provisions of B.P. Blg. 129. 23
The pertinent provisions of Republic Act No. 5434 are as follows:
SECTION 1. Appeals from specified agencies. Any provision of existing law
or Rule of Court to the contrary notwithstanding, parties aggrieved by a final
ruling, award, order, decision, or judgment of the Court of Agrarian Relations;
the Secretary of Labor under Section 7 of Republic Act Numbered Six
hundred and two, also known as the "Minimum Wage Law"; the Department
of Labor under Section 23 of Republic Act Numbered Eight hundred seventyfive, also known as the "Industrial Peace Act"; the Land Registration
Commission; the Securities and Exchange Commission; the Social Security
Commission; the Civil Aeronautics Board; the Patent Office and the
Agricultural Inventions Board, may appeal therefrom to the Court of Appeals,

within the period and in the manner herein provided, whether the appeal
involves questions of fact, mixed questions of fact and law, or questions of
law, or all three kinds of questions. From final judgments or decisions of the
Court of Appeals, the aggrieved party may appeal by certiorari to the
Supreme Court as provided in Rule 45 of the Rules of Court. 24
Because of subsequent amendments, including the abolition of various special
courts, 25 jurisdiction over quasi-judicial bodies has to be, consequently, determined by the
corresponding amendatory statutes. Under the Labor Code, decisions and awards of the
National Labor Relations Commission are final and executory, but, nevertheless, 'reviewable
by this Court through a petition for certiorari and not by way of appeal." 26
Under the Property Registration Decree, decisions of the Commission of Land Registration,
en consults, are appealable to the Court of Appeals. 27
The decisions of the Securities and Exchange Commission are likewise appealable to the
Appellate Court, 28 and so are decisions of the Social Security Commission.29
As a rule, where legislation provides for an appeal from decisions of certain administrative
bodies to the Court of Appeals, it means that such bodies are co-equal with the Regional
Trial Courts, in terms of rank and stature, and logically, beyond the control of the latter.
As we have observed, the question is whether or not the Presidential Anti-Dollar Salting
Task Force is, in the first place, a quasi-judicial body, and one whose decisions may not be
challenged before the regular courts, other than the higher tribunals the Court of Appeals
and this Court.
A quasi-judicial body has been defined as "an organ of government other than a court and
other than a legislature, which affects the rights of private parties through either adjudication
or rule making." 30 The most common types of such bodies have been listed as follows:
(1) Agencies created to function in situations wherein the government is
offering some gratuity, grant, or special privilege, like the defunct Philippine
Veterans Board, Board on Pensions for Veterans, and NARRA, and Philippine
Veterans Administration.

(2) Agencies set up to function in situations wherein the government is

seeking to carry on certain government functions, like the Bureau of
Immigration, the Bureau of Internal Revenue, the Board of Special Inquiry and
Board of Commissioners, the Civil Service Commission, the Central Bank of
the Philippines.
(3) Agencies set up to function in situations wherein the government is
performing some business service for the public, like the Bureau of Posts, the
Postal Savings Bank, Metropolitan Waterworks & Sewerage Authority,
Philippine National Railways, the Civil Aeronautics Administration.
(4) Agencies set up to function in situations wherein the government is
seeking to regulate business affected with public interest, like the Fiber
Inspections Board, the Philippine Patent Office, Office of the Insurance
Commissioner.
(5) Agencies set up to function in situations wherein the government is
seeking under the police power to regulate private business and individuals,
like the Securities & Exchange Commission, Board of Food Inspectors, the
Board of Review for Moving Pictures, and the Professional Regulation
Commission.
(6) Agencies set up to function in situations wherein the government is
seeking to adjust individual controversies because of some strong social
policy involved, such as the National Labor Relations Commission, the Court
of Agrarian Relations, the Regional Offices of the Ministry of Labor, the Social
Security Commission, Bureau of Labor Standards, Women and Minors
Bureau. 31
As may be seen, it is the basic function of these bodies to adjudicate claims and/or to
determine rights, and unless its decision are seasonably appealed to the proper reviewing
authorities, the same attain finality and become executory. A perusal of the Presidential AntiDollar Salting Task Force's organic act, Presidential Decree No. 1936, as amended by
Presidential Decree No. 2002, convinces the Court that the Task Force was not meant to
exercise quasi-judicial functions, that is, to try and decide claims and execute its judgments.
As the President's arm called upon to combat the vice of "dollar salting" or the

blackmarketing and salting of foreign exchange, 32 it is tasked alone by the Decree to

handle the prosecution of such activities, but nothing more. We quote:
SECTION 1. Powers of the Presidential Anti-Dollar Salting Task Force.-The
Presidential Anti-Dollar Salting Task Force, hereinafter referred to as Task
Force, shall have the following powers and authority:
a) Motu proprio or upon complaint, to investigate and prosecute all dollar
salting activities, including the overvaluation of imports and the
undervaluation of exports;
b) To administer oaths, summon persons or issue subpoenas requiring the
attendance and testimony of witnesses or the production of such books,
papers, contracts, records, statements of accounts, agreements, and other as
may be necessary in the conduct of investigation;
c) To appoint or designate experts, consultants, state prosecutors or fiscals,
investigators and hearing officers to assist the Task Force in the discharge of
its duties and responsibilities; gather data, information or documents; conduct
hearings, receive evidence, both oral and documentary, in all cases involving
violation of foreign exchange laws or regulations; and submit reports
containing findings and recommendations for consideration of appropriate
authorities;
d) To punish direct and indirect contempts with the appropriate penalties
therefor under Rule 71 of the Rules of Court; and to adopt such measures
and take such actions as may be necessary to implement this Decree.
xxx xxx xxx
f. After due investigation but prior to the filing of the appropriate criminal
charges with the fiscal's office or the courts as the case may be, to impose a
fine and/or administrative sanctions as the circumstances warrant, upon any
person found committing or to have committed acts constituting
blackmarketing or salting abroad of foreign exchange, provided said person
voluntarily admits the facts and circumstances constituting the offense and

presents proof that the foreign exchange retained abroad has already been
brought into the country.
Thereafter, no further civil or criminal action may be instituted against said
person before any other judicial regulatory or administrative body for violation
of Presidential Decree No. 1883.
The amount of the fine shall be determined by the Chairman of the
Presidential Anti- Dollar Salting Task Force and paid in Pesos taking into
consideration the amount of foreign exchange retained abroad, the exchange
rate differentials, uncollected taxes and duties thereon, undeclared profits,
interest rates and such other relevant factors.
The fine shall be paid to the Task Force which shall retain Twenty percent (20
%) thereof. The informer, if any, shall be entitled to Twenty percent (20 %) of
the fine. Should there be no informer, the Task Force shall be entitle to retain
Forty percent (40 %) of the fine and the balance shall accrue to the general
funds of the National government. The amount of the fine to be retained by
the Task Force shall form part of its Confidential Fund and be utilized for the
operations of the Task Force . 33
The Court sees nothing in the aforequoted provisions (except with respect to the Task
Force's powers to issue search warrants) that will reveal a legislative intendment to confer it
with quasi-judicial responsibilities relative to offenses punished by Presidential Decree No.
1883. Its undertaking, as we said, is simply, to determine whether or not probable cause
exists to warrant the filing of charges with the proper court, meaning to say, to conduct an
inquiry preliminary to a judicial recourse, and to recommend action "of appropriate
authorities". It is not unlike a fiscal's office that conducts a preliminary investigation to
determine whether or not prima facie evidence exists to justify haling the respondent to
court, and yet, while it makes that determination, it cannot be said to be acting as a quasicourt. For it is the courts, ultimately, that pass judgment on the accused, not the fiscal.
It is not unlike the Presidential Commission on Good Government either, the executive body
appointed to investigate and prosecute cases involving "ill-gotten wealth". It had been
vested with enormous powers, like the issuance of writs of sequestration, freeze orders, and
similar processes, but that did not, on account thereof alone, make it a quasi-judicial entity

as defined by recognized authorities. It cannot pronounce judgement of the accused's

culpability, the jurisdiction to do which is exclusive upon the Sandiganbayan. 34
If the Presidential Anti-Dollar Salting Task Force is not, hence, a quasi-judicial body, it
cannot be said to be co-equal or coordinate with the Regional Trial Court. There is nothing
in its enabling statutes that would demonstrate its standing at par with the said court.
In that respect, we do not find error in the respondent Court of Appeal's resolution
sustaining the assumption of jurisdiction by the court a quo.
It will not do to say that the fact that the Presidential Task Force has been empowered to
issue warrants of arrest, search, and seizure, makes it, ergo, a "semi-court". Precisely, it is
the objection interposed by the private respondent, whether or not it can under the 1973
Charter, issue such kinds of processes.
It must be observed that under the present Constitution, the powers of arrest and search are
exclusive upon judges. 35 To that extent, the case has become moot and academic.
Nevertheless, since the question has been specifically put to the Court, we find it
unavoidable to resolve it as the final arbiter of legal controversies, pursuant to the provisions
of the 1973 Constitution during whose regime the case was commenced.
Since the 1973 Constitution took force and effect and until it was so unceremoniously
discarded in 1986, its provisions conferring the power to issue arrest and search warrants
upon an officer, other than a judge, by fiat of legislation have been at best controversial.
In Lim v. Ponce de Leon, 36 a 1975 decision, this Court ruled that a fiscal has no authority
to issue search warrants, but held in the same vein that, by virtue of the responsible officer"
clause of the 1973 Bill of Rights, "any lawful officer authorized by law can issue a search
warrant or warrant of arrest.37 Authorities, however, have continued to express reservations
whether or not fiscals may, by statute, be given such a power. 38
Less than a year later, we promulgated Collector of Customs v. Villaluz, 39 in which we
categorically averred: Until now only the judge can issue the warrant of arrest." 40 "No law
or presidential decree has been enacted or promulgated vesting the same authority in a
particular responsible officer ." 41

Apparently, Villaluz had settled the debate, but the same question persisted following this
Courts subsequent rulings upholding the President's alleged emergency arrest powers .
42 [Mr. Justice Hugo Gutierrez would hold, however, that a Presidential Commitment Order
(PCO) is (was) not a species of "arrest" in its technical sense, and that the (deposed) Chief
Executive, in issuing one, does not do so in his capacity as a "responsible officer" under the
1973 Charter, but rather, as Commander-in-Chief of the Armed Forces in times of
emergency, or in order to carry out the deportation of undesirable aliens.43 In the
distinguished Justice's opinion then, these are acts that can be done without need of judicial
intervention because they are not, precisely, judicial but Presidential actions.]
In Ponsica v. Ignalaga,44 however, we held that the mayor has been made a "responsible
officer' by the Local Government Code, 45 but had ceased to be one with the approval of
the 1987 Constitution according judges sole authority to issue arrest and search warrants.
But in the same breath, we did not rule the grant under the Code unconstitutional based on
the provisions of the former Constitution. We were agreed, though, that the "responsible
officer" referred to by the fundamental law should be one capable of approximating "the cold
neutrality of an impartial judge." 46
In striking down Presidential Decree No. 1936 the respondent Court relied on American
jurisprudence, notably,Katz v. United States, 47 Johnson v. United States, 48 and Coolidge
v. New Hampshire 49 in which the American Supreme Court ruled that prosecutors (like the
petitioner) cannot be given such powers because of their incapacity for a "detached
scrutiny" 50 of the cases before them. We affirm the Appellate Court.
We agree that the Presidential Anti-Dollar Salting Task Force exercises, or was meant to
exercise, prosecutorial powers, and on that ground, it cannot be said to be a neutral and
detached "judge" to determine the existence of probable cause for purposes of arrest or
search. Unlike a magistrate, a prosecutor is naturally interested in the success of his case.
Although his office "is to see that justice is done and not necessarily to secure the conviction
of the person accused," 51 he stands, invariably, as the accused's adversary and his
accuser. To permit him to issue search warrants and indeed, warrants of arrest, is to make
him both judge and jury in his own right, when he is neither. That makes, to our mind and to
that extent, Presidential Decree No. 1936 as amended by Presidential Decree No. 2002,
unconstitutional.

It is our ruling, thus, that when the 1973 Constitution spoke of "responsible officer" to whom
the authority to issue arrest and search warrants may be delegated by legislation, it did not
furnish the legislator with the license to give that authority to whomsoever it pleased. It is to
be noted that the Charter itself makes the qualification that the officer himself must be
"responsible". We are not saying, of course, that the Presidential Anti-Dollar Salting Task
Force (or any similar prosecutor) is or has been irresponsible in discharging its duty. Rather,
we take "responsibility", as used by the Constitution, to mean not only skill and competence
but more significantly, neutrality and independence comparable to the impartiality presumed
of a judicial officer. A prosecutor can in no manner be said to be possessed of the latter
qualities.
According to the Court of Appeals, the implied exclusion of prosecutors under the 1973
Constitution was founded on the requirements of due process, notably, the assurance to the
respondent of an unbiased inquiry of the charges against him prior to the arrest of his
person or seizure of his property. We add that the exclusion is also demanded by the
principle of separation of powers on which our republican structure rests. Prosecutors
exercise essentially an executive function (the petitioner itself is chaired by the Minister, now
Secretary, of Trade and Industry), since under the Constitution, the President has pledged
to execute the laws. 52 As such, they cannot be made to issue judicial processes without
unlawfully impinging the prerogative of the courts.
At any rate, Ponsica v. Ignalaga should foreclose all questions on the matter, although the
Court hopes that this disposition has clarified a controversy that had generated often bitter
debates and bickerings.
The Court joins the Government in its campaign against the scourge of "dollar- salting", a
pernicious practice that has substantially drained the nation's coffers and has seriously
threatened its economy. We recognize the menace it has posed (and continues to pose)
unto the very stability of the country, the urgency for tough measures designed to contain if
not eradicate it, and foremost, the need for cooperation from the citizenry in an all-out
campaign. But while we support the State's efforts, we do so not at the expense of
fundamental rights and liberties and constitutional safeguards against arbitrary and
unreasonable acts of Government. If in the event that as a result of this ruling, we prove to
be an "obstacle" to the vital endeavour of stamping out the blackmarketing of valuable

foreign exchange, we do not relish it and certainly, do not mean it. The Constitution simply
does not leave us much choice.
WHEREFORE, the petition is DISMISSED. No costs. SO ORDERED.