Art.

6
Sec. 1
Abakada Guro Party List v. Purisima, 562 SCRA 251
FACTS:
1. This petition for prohibition seeks to prevent respondents from implementing
and enforcing Republic Act (RA) 9335 (Attrition Act of 2005).
RA 9335 was enacted to optimize the revenue-generation capability and
collection of the Bureau of Internal Revenue (BIR) and the Bureau of Customs
(BOC). The law intends to encourage BIR and BOC officials and employees to
exceed their revenue targets by providing a system of rewards and sanctions
through the creation of a Rewards and Incentives Fund (Fund) and a Revenue
Performance Evaluation Board (Board). It covers all officials and employees of
the BIR and the BOC with at least six months of service, regardless of
employment status
2. Petitioners, invoking their right as taxpayers filed this petition challenging the
constitutionality of RA 9335, a tax reform legislation. They contend that, by
establishing a system of rewards and incentives, the law
"transform[s] the officials and employees of the BIR and the BOC into
mercenaries and bounty hunters" as they will do their best only in
consideration of such rewards. Petitioners also assail the creation of
a congressional oversight committee on the ground that it violates
the doctrine of separation of powers, for it permits legislative
participation in the implementation and enforcement of the law.
ISSUE:
WON the joint congressional committee is valid and constitutional
HELD:
No. It is unconstitutional.
In the case of Macalintal, in the discussion of J. Puno, the power of oversight
embraces all activities undertaken by Congress to enhance its
understanding of and influence over the implementation of legislation it has
enacted. Clearly, oversight concerns post-enactment measures undertaken
by Congress: (a) to monitor bureaucratic compliance with program
objectives, (b) to determine whether agencies are properly administered, (c)
to eliminate executive waste and dishonesty, (d) to prevent executive
usurpation of legislative authority, and (d) to assess executive conformity
with the congressional perception of public interest. The power of oversight has
been held to be intrinsic in the grant of legislative power itself and integral to the
checks and balances inherent in a democratic system of government
With this backdrop, it is clear that congressional oversight is not unconstitutional per
se, meaning, it neither necessarily constitutes an encroachment on the executive
power to implement laws nor undermines the constitutional separation of powers.
Rather, it is integral to the checks and balances inherent in a democratic system of
government. It may in fact even enhance the separation of powers as it prevents the
over-accumulation of power in the executive branch.
However, to forestall the danger of congressional encroachment "beyond the
legislative sphere," the Constitution imposes two basic and related
constraints on Congress. It may not vest itself, any of its committees or its
members with either executive or judicial power. And, when it exercises its legislative
power, it must follow the "single, finely wrought and exhaustively considered,
procedures" specified under the Constitution including the procedure for enactment of
laws and presentment.
Thus, any post-enactment congressional measure such as this should be limited to

scrutiny and investigation. In particular, congressional oversight must be confined to

the following:
(1)
scrutiny based primarily on Congress' power of appropriation and the budget
hearings conducted in connection with it, its power to ask heads of departments
to appear before and be heard by either of its Houses on any matter pertaining to
their departments and its power of confirmation and
(2)

investigation and monitoring of the implementation of laws pursuant to the power

of Congress to conduct inquiries in aid of legislation.

Any action or step beyond that will undermine the separation of powers
guaranteed by the Constitution. Legislative vetoes fall in this class.
Legislative veto is a statutory provision requiring the President or an administrative
agency to present the proposed implementing rules and regulations of a law to
Congress which, by itself or through a committee formed by it, retains a "right" or
"power" to approve or disapprove such regulations before they take effect. As such, a
legislative veto in the form of a congressional oversight committee is in the form of an
inward-turning delegation designed to attach a congressional leash (other than
through scrutiny and investigation) to an agency to which Congress has by law initially
delegated broad powers. It radically changes the design or structure of the
Constitution's diagram of power as it entrusts to Congress a direct role in enforcing,
applying or implementing its own laws.

People v. Rosenthal, 68 Phil. 328

68 Phil. 328 Political Law Delegation of Power Administrative Bodies Public
Interest as Sufficient Test
Jacob Rosenthal and Nicasio Osmea were founders and shareholders of the ORO Oil
Company. Later, Rosenthal and Osmea were found guilty of selling their shares to
individuals without actual tangible assets. Their shares were merely based on
speculations and future gains. This is in violation of Sections 2 and 5 of Act No. 2581.
Section 2 provides that every person, partnership, association, or corporation
attempting to offer to sell in the Philippines speculative securities of any kind or
character whatsoever, is under obligation to file previously with the Insular Treasurer
the various documents and papers enumerated therein and to pay the required tax of
twenty-pesos.
Section 5, on the other hand, provides that whenever the said Treasurer of the
Philippine Islands is satisfied, either with or without the examination herein provided,
that any person, partnership, association or corporation is entitled to the right to offer
its securities as above defined and provided for sale in the Philippine Islands, he shall
issue to such person, partnership, association or corporation a certificate or permit
reciting that such person, partnership, association or corporation has complied with
the provisions of this act, and that such person, partnership, association or
corporation, its brokers or agents are entitled to order the securities named in said
certificate or permit for sale; that said Treasurer shall furthermore have authority,
when ever in his judgment it is in the public interest, to cancel said certificate or
permit, and that an appeal from the decision of the Insular Treasurer may be had
within the period of thirty days to the Secretary of Finance.
Rosenthal argued that Act 2581 is unconstitutional because no standard or rule is
fixed in the Act which can guide said official in determining the cases in which a

certificate or permit ought to be issued, thereby making his opinion the sole criterion
in the matter of its issuance, with the result that, legislative powers being unduly
delegated to the Insular Treasurer.
ISSUE: Whether or not there is undue delegation of power to the Internal Treasurer.
HELD: No. The Supreme Court ruled that the Act furnishes a sufficient standard for
the Insular Treasurer to follow in reaching a decision regarding the issuance or
cancellation of a certificate or permit. The certificate or permit to be issued under the
Act must recite that the person, partnership, association or corporation applying
therefor has complied with the provisions of this Act, and this requirement,
construed in relation to the other provisions of the law, means that a certificate or
permit shall be issued by the Insular Treasurer when the provisions of Act No. 2581
have been complied with. Upon the other hand, the authority of the Insular Treasurer
to cancel a certificate or permit is expressly conditioned upon a finding that such
cancellation is in the public interest.
In view of the intention and purpose of Act No. 2581 to protect the public against
speculative schemes which have no more basis than so many feet of blue sky and
against the sale of stock in fly-by-night concerns, visionary oil wells, distant gold
mines, and other like fraudulent exploitations, the SC held that public interest
in this case is a sufficient standard to guide the Insular Treasurer in reaching a
decision on a matter pertaining to the issuance or cancellation of certificates or
permits.
Rosenthal insists that the delegation of authority to the Commission is invalid because
the stated criterion is uncertain. That criterion is the public interest. It is a mistaken
assumption that this is a mere general reference to public welfare without any
standard to guide determinations. The purpose of the Act, the requirement it imposes,
and the context of the provision in question show the contrary. . .
Facts:
Jacob Rosenthal and Nicasio Osmea were founders and shareholders of the
O.R.O. Oil Company. The main objects and purposes of the company are to mine,
refine, market, buy and sell petroleum, natural gas and other oil products.
Rosenthal and Osmea were found guilty by the RTC in two cases of selling their
shares to individuals without first obtaining the corresponding written permit or
license from the Insular Treasurer of the Commonwealth of the Philippines.
This is in violation of Sections 2 & 5 of Act No. 2581, commonly known as the
Blue Sky Law.
o Section 2 of said law provides that every person, partnership, association, or
corporation attempting to offer to sell in the Philippines speculative securities of any
kind or character whatsoever, is under obligation to file previously with the Insular
Treasurer the various documents and papers enumerated therein and to pay the
required tax of twenty-pesos.
o Sec 5, on the other hand, provides that whatever the said Treasurer of the
Philippine Islands is satisfied, either with or without the examination herein provided,
that any person, partnership, association or corporation is entitled to the right to offer
its securities as above defined and provided for sale in the Philippine Islands, he shall
issue to such person, partnership, association or corporation a certificate or permit
reciting that such person, partnership, association or corporation has complied with

the provisions of this act, and that such person, partnership, association or
corporation, its brokers or agents are entitled to order the securities named in said
certificate or permit for sale; that said Treasurer shall furthermore have authority,
whenever in his judgment it is in the public interest, to cancel said certificate or
permit, and that an appeal from the decision of the Insular Treasurer may be had
within the period of thirty days to the Secretary of Finance.
The shares are said to be speculative because their value materially depended upon
a promise of future promotion and development of the oil business, rather than on
actual tangible assets.
On appeal, Rosenthal & Osmena argued that Act 2581 is unconstitutional on three
grounds:
o 1) That it constitutes undue delegation of legislative authority to the Insular
treasurer
o 2) that it does not afford equal protection before the law
o 3) that it is vague and ambiguous
Issue: WON the law is unconstitutional in any of the three grounds
Held: The law is CONSTITUTIONAL on all grounds alleged by the appellants.
Ratio:

That it constitutes undue delegation of legislative authority to the Insular

treasurer
The Act furnishes a sufficient standard for the Treasurer to follow in reaching a
decision regarding the issuance or cancellation of a certificate or permit. The
certificate or permit to be issued under the Act must recite that the person ,partnership,
association or corporation applying therefor has complied with the provisions of this
Act, and this requirement, construed in relation to the other provisions of the law,
means that a certificate or permit shall be issued by the Insular Treasurer when the
provisions of Act 2581 have been complied with. Upon the other hand, the authority
of the Insular Treasurer to cancel a certificate or permit is expressly conditioned upon
a finding that such cancellation is in the public interest. In view of the intention and
purpose of Act 2581 to protect the public against speculative schemes which have no
more basis than so many feet of blue sky and against the sale of stock infly-by-night
concerns, visionary oil wells, distant gold mines, and other like fraudulent
exploitations, we hold that public interest in this case is a sufficient standard to
guide the Insular Treasurer in reaching a decision on a matter pertaining to the
issuance or cancellation of certificates or permits.
Act 2581 allows appeal from the decision of the Treasurer to the Sec of Finance.
Hence, it cannot be contended that the Treasurer can act and decide without any
restraining influence.
The theory of the separation of powers is designed by its originators to secure action
and at the same time to forestall over action which necessarily results from undue
concentration of powers, and thereby obtain efficiency and prevent despotism.
Thereby, the rule of law was established which narrows the range of governmental
action and makes it subject to control by certain legal devices. As a corollary, we find
the rule prohibiting delegation of legislative authority, and from the earliest time
American legal authorities have proceeded on the theory that legislative power must
be exercised by the legislative alone. It is frankness, however, to confess that as one
delves into the mass of judicial pronouncements, he finds a great deal of confusion.

the maxim delegatus non potest delegare or delegata potestas non potest delegare
has beenmade to adapt itself to the complexities of modern governments, giving rise
to the adoption, within certain limits, of the principle of subordinate legislation, in
practically all modern governments. Difficulty lies in fixing the limit and extent of the
authority. While courts have undertaken to laydown general principles, the safest is to
decide each case according to its peculiar environment, having in mind the
wholesome legislative purpose intended to be achieved.
Hall v Geiger-Jones: it is well-settled principle of law in this state that by legislative
act a commission or board may be empowered to ascertain the existence of facts,
upon the finding of which may depend the right to continue in the practice of a
profession or a regulated business.

that it does not afford equal protection before the law

o Another ground relied upon by appellants in contending that Act No. 2581 is
unconstitutional is that it denies equal protection of the laws because the law
discriminates between an owner who sells his securities in a single transaction and
one who disposes of them in repeated and successive transactions.
o Hall vs. Geiger-Jones Co: "Prominent among such discriminations are . . .
between an owner who sells his securities in a single transaction and one who
disposes of them in successive transactions; . . . " If a class is deemed to present a
conspicuous example of what the legislature seeks to prevent, the 14th Amendment
allows it to be dealt with although otherwise and merely logically not distinguishable
from others not embraced in the law

that it is vague and ambiguous

o People vs. Fernandez and Trinidad. An Act will be declared void and inoperative
on the ground of vagueness and uncertainty only upon a showing that the defect is
such that the courts are unable to determine, with any reasonable degree of certainty,
what the legislature intended.
o In this connection we cannot pretermit reference to the rule that legislation
should not be held invalid on the ground of uncertainty if susceptible of any
reasonable construction that will support and give it effect. An Act will not be
declared inoperative and ineffectual on the ground that it furnishes no adequate means
to secure the purpose for which it is passed, if men of common sense and reason can
devise and provide the means, and all the instrumentalities necessary for its execution
are within the reach of those intrusted therewith.
Judgement of lower court is affirmed, with modifications that the fines are reduced.
Rosenthal: from P500 -> P200 in each case
Osmena: from P1000 -> P500, from P2000 -> P1000
Subsidiary imprisonment for both in case of insolvency, and costs.
Agustin v. Edu, 88 SCRA 1
Facts:
Leovillo Agustin, the owner of a Beetle, challenged the constitutionality of Letter
of Instruction 229 and its implementing order No. 1 issued by LTO Commissioner
Romeo Edu. His car already had warning lights and did not want to use this.
The letter was promulgation for the requirement of an early warning device
installed on a vehicle to reduce accidents between moving vehicles and parked
cars.

The LTO was the issuer of the device at the rate of not more than 15% of the
acquisition cost.
The triangular reflector plates were set when the car parked on any street
or highway for 30 minutes. It was mandatory.
Petitioner: 1. LOI violated the provisions and delegation of police power, equal
protection, and due process/
2. It was oppressive because the make manufacturers and car dealers millionaires
at the expense f car owners at 56-72 pesos per set.
Hence the petition.
The OSG denied the allegations in par X and XI of the petition with regard to the
unconstitutionality and undue delegation of police power to such acts.
The Philippines was also a member of the 1968 Vienna convention of UN on road
signs as a regulation. To the petitioner, this was still an unlawful delegation of
police power.
Issue:
Is the LOI constitutional? If it is, is it a valid delegation of police power?
Held: Yes on both. Petition dismissed.
Ratio:
Police power, according to the case of Edu v Ericta, which cited J. Taney, is nothing
more or less than the power of government inherent in every sovereignty.
The case also says that police power is state authority to enact legislation that
may interfere with personal liberty or property to promote the general welfare.
Primicias v Fulgoso- It is the power to describe regulations to promote the health,
morals, peace, education, good order, and general welfare of the people.
J. Carazo- government limitations to protect constitutional rights did not also
intend to enable a citizen to obstruct unreasonable the enactment of measures
calculated to insure communal peace.
There was no factual foundation on petitioner to refute validity.
Ermita Malate Hotel-The presumption of constitutionality must prevail in the
absence of factual record in over throwing the statute.
Brandeis- constitutionality must prevail in the absence of some factual foundation
in overthrowing the statute.
Even if the car had blinking lights, he must still buy reflectors. His claims that the
statute was oppressive was fantastic because the reflectors were not expensive.
SC- blinking lights may lead to confusion whether the nature and purpose of the
driver is concerned.
Unlike the triangular reflectors, whose nature is evident because its installed
when parked for 30 minutes and placed from 400 meters from the car allowing
drivers to see clearly.
There was no constitutional basis for petitioner because the law doesnt violate
any constitutional provision.
LOI 229 doesnt force motor vehicle owners to purchase the reflector from the
LTO. It only prescribes rge requirement from any source.
The objective is public safety.

The Vienna convention on road rights and PD 207 both recommended

enforcement for installation of ewds. Bother possess relevance in applying rules
with the decvlaration of principles in the Constitution.
On the unlawful delegation of legislative power, the petitioners have no settled
legal doctrines.

Chiongbian v. Orbos, 245 SCRA 253

FACTS:
Pursuant to the Constitution, Congress passed R.A 6734, the Organic Act for the
Autonomous Region in Muslim Mindanao calling for a plebiscite to create an
autonomous region. The provinces of Lanao Del Sur, Maguindanao, Sulu and TawiTawi, which voted for the creation of such region were later on known as the
Autonomous Region in Muslim Mindanao. Consistent with the authority granted by
Article XIX, Section 13 of RA 6734 which authorizes the President to merge the
existing regions, President Corazon Aquino issued E.O No. 429 providing
for the Reorganization of the Administrative Regions in Mindanao. Petitioners
contend that Art. XIX, Section 13 of R.A. No. 6734 is unconstitutional
because 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
that the power granted is not expressed in the title of the law.aw They also
challenge the validity of E.O. No. 429 on the ground that the power granted by RA
6734 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.
ISSUE:
Whether or not the R.A 6734 is invalid because it contains no standard to guide
the Presidents discretion.
HELD:
No, 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 offi ces.
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. (Abbas v. COMELEC) 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. The power conferred on the President is similar to the
power to adjust municipal boundaries which has been described as
"administrative in nature. (Pelaez v. Auditor General)Thus, 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

Rubi v. Provincial Board, 39 Phil. 660

FACTS:
The case is an application for habeas corpus in favor of Rubi and other
Manguianes of the Province of Mindoro. It is alleged that the Maguianes are being
illegally deprived of their liberty by the provincial officials of that province. Rubi
and his companions are said to be held on the reservation established at Tigbao,
Mindoro, against their will, and one Dabalos is said to be held under the custody
of the provincial sheriff in the prison at Calapan for having run away from the
reservation.
The provincial governor of Mindoro and the provincial board thereof directed the
Manguianes in question to take up their habitation in Tigbao, a site on the shore of
Lake Naujan, selected by the provincial governor and approved by the provincial
board. The action was taken in accordance with section 2145 of the Administrative
Code of 1917, and was duly approved by the Secretary of the Interior as required
by said action.
Section 2145 of the Administrative Code of 1917 reads as follows:
SEC. 2145. Establishment of non-Christian upon sites selected by provincial
governor. With the prior approval of the Department Head, the provincial
governor of any province in which non-Christian inhabitants are found is
authorized, when such a course is deemed necessary in the interest of law and
order, to direct such inhabitants to take up their habitation on sites on unoccupied
public lands to be selected by him an approved by the provincial board.
Petitioners, however, challenge the validity of this section of the Administrative
Code.
ISSUE:
Does section 2145 of the Administrative Code of 1917 constitute an unlawful
delegation of legislative power by the Philippine Legislature to a provincial official
and a department head, therefore making it unconstitutional?
HELD:
No. The Philippine Legislature has here conferred authority upon the Province of
Mindoro, to be exercised by the provincial governor and the provincial board.

In determining whether the delegation of legislative power is valid or not, the

distinction is between the delegation of power to make the law, which necessarily
involves a discretion as to what it shall be, and conferring an authority or
discretion as to its execution, to be exercised under and in pursuance of the law.
The first cannot be done; to the later no valid objection can be made. Discretion
may be committed by the Legislature to an executive department or official. The
Legislature may make decisions of executive departments of subordinate official
thereof, to whom it has committed the execution of certain acts, final on
questions of fact. The growing tendency in the decision is to give prominence to
the "necessity" of the case.
In enacting the said provision of the Administrative Code, the Legislature merely
conferred upon the provincial governor, with the approval of the provincial board
and the Department Head, discretionary authority as to the execution of the law.
This is necessary since the provincial governor and the provincial board, as the
official representatives of the province, are better qualified to judge when such
as course is deemed necessary in the interest of law and order. As officials
charged with the administration of the province and the protection of its
inhabitants, they are better fitted to select sites which have the conditions most
favorable for improving the people who have the misfortune of being in a
backward state.

Hence, Section 2145 of the Administrative Code of 1917 is not an unlawful

delegation of legislative power by the Philippine Legislature to provincial official
and a department head.

People v. Vera, 65 Phil. 56

FACTS:
- The criminal case, People v. Cu Unjieng was filed in the Court of First
Instance (CFI) in Manila, with HSBC intervening in the case as private
prosecutor.
- The CFI rendered a judgment of conviction sentencing Cu Unjieng to an
indeterminate penalty ranging from four years and two months of prision
correccional to eight years of prison mayor. (Jan. 8, 1934)
- Upon appeal, it was modified to an indeterminate penalty of from five
years and six months of prison correccional to seven years, six months and
twenty-seven days of prison mayor, but affirmed the judgments in all other
respects.
- Cu Unjieng filed a Motion for Reconsideration and four successive motions
for new trial which were all denied on December 17, 1935. Final judgment
was entered on Dec. 18, 1935. He filed for certiorari to the Supreme Court
but got denied on Nov 1936. The SC subsequently denied Cu Unjiengs
petition for leave to file a second alternative motion for reconsideration or
new trial, then remanded the case to the court of origin for execution of
judgment.
- Cu Unjieng filed an application for probation before the trial court, under
the provisions of Act 4221 of the defunct Philippine Legislature. He states

he is innocent of the crime; he has no criminal record; and that he would

observe good conduct in the future.
CFI Manila Judge Jose Vera set the petition for hearing for probation on
April 5, 1937.
HSBC questioned the authority of Vera to hold such hearings and assailed
the constitutionality of the Probation Act since it violates the equal
protection of laws and gives unlawful and improper delegation to provincial
boards.
Section 11 of Art 4221 states that the act shall only be applied in those
provinces wherein the probationary officer is granted salary not lower than
provincial fiscals by respective provincial boards.
The City Fiscal of Manila files a supplementary petition affirming issues
raised by HSBC, arguing that probation is a form of reprieve, hence Act
4221 bypasses this exclusive power of the Chief Executive.
Hence this petition in the Supreme Court.

ISSUES:
1. Whether or not the constitutionality of Act 4221 has been properly raised
in these proceedings;
2. If in the affirmative, whether or not Act 4221 is constitutional based on
these three grounds:
a. It encroaches upon the pardoning power of the executive
b. It constitutes an undue delegation of legislative power
c. It denies the equal protection of the laws
HELD/RATIO:
1. Yes. Constitutional questions will not be determined by the courts unless
properly raised and presented in appropriate cases and is necessary to a
determination of the case, lis mota. Constitutionality issues may be raised
in prohibition and certiorari proceedings, as they may also be raised in
mandamus, quo warranto, and habeas corpus proceedings. The general
rule states that constitutionality should be raised in the earliest possible
opportunity (during proceedings in initial/inferior courts). It may be said
that the state can challenge the validity of its own laws, as in this case.
The well-settled rule is that the person impugning validity must have
personal and substantial interest in the case (i.e. he has sustained, or will
sustain direct injury as a result of its enforcement). If Act 4221 is
unconstitutional, the People of the Philippines have substantial interest in
having it set aside.
2.

a. No. There exists a distinction between pardon and probation.

Pardoning power is solely within the power of the Executive.
Probation has an effect of temporary suspension, and the
probationer is still not exempt from the entire punishment which
the law inflicts upon him as he remains to be in legal custody for
the time being.
b. Yes. The Probation Act does not lay down any definite standards by
which the administrative boards may be guided in the exercise of
discretionary powers, hence they have the power to determine for
themselves, whether or not to apply the law or not. This therefore
becomes a surrender of legislative power to the provincial boards. It
is unconstitutional.
c. Yes. Due to the unwarranted delegation of legislative power, some
provinces may choose to adopt the law or not, thus denying the
equal protection of laws. It is unconstitutional.

Philippine Coconut Producers Federation, Inc., v. Republic, 663 SCRA 514

FACTS: The declaration of martial law in September 1972 saw the issuance of several presidential decrees
(P.Ds.) purportedly designed to improve the coconut industry through the collection and use of the coconut levy
fund particularly P.D. Nos. 755, 961 and 1468 . Charged with the duty of collecting and administering the
Fund was PCA. Later, PCA entered into an Agreement for the Acquisition of a Commercial Bank for

the Benefit of the Coconut Farmers of the Philippines. Under paragraph 8 of the second
agreement, PCA agreed to expeditiously distribute the FUB (First United Bank) shares
purchased to such coconut farmers holding registered COCOFUND receipts on equitable
basis.
Then came the 1986 EDSA event. One of the priorities of then President Corazon C. Aquinos
revolutionary government was the recovery of ill-gotten wealth reportedly amassed by the
Marcos family and close relatives, their nominees and associates. The PCGG instituted before
the Sandiganbayan a recovery suit against petitioners. As found by the Sandiganbayan, the
PCA appropriated, out of its own fund, an amount for the purchase. Petitioners COCOFED et
al. and Ursua uniformly scored the Sandiganbayan for abusing its power of judicial review and wrongly
encroaching into the exclusive domain of Congress when it declared certain provisions of the coconut levy laws
and PCA administrative issuances as unconstitutional.

ISSUE: Whether the coconut farmers may own the coconut levy fund which was reclassified
into private fund through P.D. Nos. 755, 961 and 1468.
HELD: NO. The coconut levy funds are in the nature of taxes and can only be used for public
purpose. Consequently, they cannot be used to purchase shares of stocks to be given for free to private
individuals. Needless to stress, courts do not, as they cannot, allow by judicial fiat the

conversion of special funds into a private fund for the benefit of private individuals.
To recapitulate, Article VI, Section 29 (3) of the 1987 Constitution, restating a general
principle on taxation, enjoins the disbursement of a special fund in accordance with the
special purpose for which it was collected, the balance, if there be any, after the purpose has
been fulfilled or is no longer forthcoming, to be transferred to the general funds of the
government. If only to stress the point, P.D. No. 1234 expressly stated that coconut levies are
special funds to be remitted to the Treasury in the General Fund of the State, but treated as
Special Accounts.
Case Background:
The case is related to the various petitions for review on certiorari of the decisions of the
Sandiganbayan with regards to the Coco levy and ill-gotten wealth of the Marcoses.
Facts:
In 1971, Republic Act No. 6260 was enacted creating the Coconut Investment Fund (CIF).
The source of the CIF was a P0.55 levy on the sale of every 100 kilo of copra. The Philippine
Coconut Administration was tasked to collect and administer the Fund. Out of 0.55 levy, P0.02
was placed at the disposition of the COCOFED, the recognized national association of
coconut producers declared by PCA. Coco fund receipts were ought to be issued to every
copra seller.
During the Martial Law regime, then President Ferdinand Marcos issued Presidential Decrees
purportedly for the improvement of the coconut industry. The most relevant among these is
P.D. No. 755 section 2, which permitted the use of the Fund by PCA for the acquisition
of commercial bank for the benefit of the coconut farmers and the distribution of the
shares of the stock of the bank it acquired free to the coconut farmers.
Thus, the PCA acquired the First United Bank, later renamed United Coconut Planters Bank
(UCPB). The PCA bought the 72.2% of the outstanding capital stock or 137,866 shares at 200
per share from Pedro Cojuangco in behalf of the coconut farmers. The rest of the fund was
deposited to the UCPB interest free.
Farmers who had paid the CIF and registered their receipts with PCA were given
corresponding UCPB stock certificates. Only 16 million worth of COCOFUND receipts were

registered and a large number of the coconut farmers opted to sell all/part of their UCPB
shares to private individuals.
Parts of the coconut levy funds went directly or indirectly to various projects and/or was
converted into different assets or investments through the years.
After EDSA Revolution, President Corazon Aquino issued Executive Order 1 which created
the Presidential Commission on Good Government (PCGG). The PCGG aimed to assist the
President in the recovery of ill-gotten wealth accumulated by the Marcoses and their cronies.
PCGG was empowered to file cases for sequestration in the Sadiganbayan.
Among the sequestered properties were the shares of stock in the UCPB registered in the
name of over a million coconut farmers held trust by the PCA. The Sandiganbayan allowed
the sequestration by ruling in a Partial Summary Judgment that the Coconut Levy Funds are
prima facie public funds and that Section 2 of PD No. 755 was unconstitutional.
The COCOFED representing the over a million coconut farmers via Petition for review under
Rule 45 sought the reversal of the ruling contending among others that the sequestration
amounted to the taking of private property without just compensation and impairment of
vested right of ownership.
Issue:
What is the Nature of the Coconut Levy Fund?
Ruling:
The Supreme Court ruled in favor of the Republic, the Coconut Levy was imposed in the
exercise of the States inherent power of taxation. Indeed, the Coconut Levy Funds partake
the nature of Taxes. The Funds were generated by virtue of statutory enactments by the
proper legislative authorities and for public purpose.
P.D No. 755 which permitted the use of the Fund by PCA for the acquisition of commercial
bank for the benefit of the coconut farmers and the distribution of the shares of the stock of
the bank it acquired free to the coconut farmers, involves invalid delegation of legislative
power. It is fundamental that Congress may not delegate its legislative power, what cannot be
delegated is the authority to make laws and to alter and repeal them.
The test is the completeness of the statute in all term and provisions when it leaves the hands
of the legislature. To determine whether or not there is an undue delegation of the legislative
power, the inquiry must be directed to the scope and definiteness of the measure enacted.
The legislature does not abdicate its functions when it describes what job must be done, who
is to do it, and what the scope of his authority is. There must be a standard, which implies at
the very least that the legislature itself determines matters of principle and lays down
fundamental policy.
A standard thus defines the legislative policy, marks its limits, maps out its boundaries and
specifies the public agency to apply it. It indicates the circumstances under which the
legislative command is to be effected. It is the criterion by which the legislative purpose
maybe carried out.
To determine the validity of the delegated power, two test must be complied, (1)
completeness test A law is complete when it set forth therein the policy to be executed,
carried out or implemented by the delegate. And (2) the sufficient standard test when it
provides adequate guidelines or limitations in the law to map out the boundaries of the
delegates authority and prevent the delegation from running riot. To be sufficient, the
standard must specify the limits of the delegates authority, announce the legislative policy to
identify the conditions under which it is to be implemented.

United States v. Panlilio, 28 Phil. 608

Doctrine:
The orders, rules and regulations of an administrative officers or body issued
pursuant to a statute have the force of law but are not penal in nature and a
violation of such orders is not a offense punishable by law unless the statute
expressly penalizes such violation.

FACTS:
In Feb. 1913, all of the carabaos belonging to accused, Panlilio having been
exposed to the dangerous and contagious disease known as rinderpest, were, in
accordance with an order of duly-authorized agent of the Director of Agriculture,
duly quarantined in a corral in the barrio of Masamat, Pampanga; that, on said
place, Panlilio, illegally and voluntarily and without being authorized so to do, and
while the quarantine against said carabaos was still in force, permitted and
ordered said carabaos to be taken from the corral in which they were then
quarantined and conducted from one place to another; that by virtue of said
orders of the accused, his servants and agents took the said carabaos from the
said corral and drove them from one place to another for the purpose of working
them.
The accused was convicted of violation of Act 1760 relating to the quarantining of
animals suffering from dangerous communicable or contagious diseases and
sentencing him to pay a fine of P40 with subsidiary imprisonment in case of
insolvency and to pay the costs of trial. The accused contends that the facts
alleged in the information and proved on the trial do not constitute a violation of
Act No. 1760
ISSUE:
Whether accused can be penalized for violation of the order of the Bureau of
Agriculture?
HELD:
NO. Nowhere in the law is the violation of the orders of the Bureau of Agriculture
prohibited or made unlawful, nor is there provided any punishment for a violation
of such orders. Section 8 of Act No. 1760 provides that any person violating any of
the provisions of the Act shall, upon conviction, be punished. However, the only
sections of the Act which prohibit acts and pronounce them as unlawful are
Sections 3, 4 and 5. This case does not fall within any of them. A violation of the
orders of the Bureau of Agriculture, as authorized by paragraph, is not a violation
of the provision of the Act. The orders of the Bureau of Agriculture, while they may
possibly be said to have the force of law, are statutes and particularly not penal
statutes, and a violation of such orders is not a penal offense unless the statute
itself somewhere makes a violation thereof unlawful and penalizes it. Nowhere in
Act No. 1760 is a violation of the orders of the Bureau of Agriculture made a penal
offense, nor is such violation punished in any way therein. However, the accused
did violate Art. 581, par 2 of the Penal Code which punishes any person who
violates regulations or ordinances with reference to epidemic disease among
animals.

Sec.5
Atong Panglaam, Inc., v. Commission on Elections, 694 SCRA 477
694 SCRA 477 Political Law Constitutional Law Legislative Department
Party-List System
This case partially abandoned the
COMELEC andBANAT vs COMELEC.

rulings

in Ang

Bagong

Bayani

vs

Atong Paglaum, Inc. and 51 other parties were disqualified by the Commission on
Elections in the May 2013 party-list elections for various reasons but primarily for not
being qualified as representatives for marginalized or underrepresented sectors.
Atong Paglaum et al then filed a petition for certiorari against COMELEC alleging
grave abuse of discretion on the part of COMELEC in disqualifying them.
ISSUE: Whether or not the COMELEC committed grave abuse of discretion in
disqualifying the said party-lists.
HELD: No. The COMELEC merely followed the guidelines set in the cases of Ang
Bagong Bayani and BANAT. However, the Supreme Court remanded the cases back to
the COMELEC as the Supreme Court now provides for new guidelines which
abandoned some principles established in the two aforestated cases. The new
guidelines are as follows:
I. Parameters. In qualifying party-lists, the COMELEC must use the following
parameters:
1. Three different groups may participate in the party-list system: (1) national parties
or organizations, (2) regional parties or organizations, and (3) sectoral parties or
organizations.
2. National parties or organizations and regional parties or organizations do not need
to organize along sectoral lines and do not need to represent any marginalized and
underrepresented sector.
3. Political parties can participate in party-list elections provided they register under
the party-list system and do not field candidates in legislative district elections. A
political party, whether major or not, that fields candidates in legislative district
elections can participate in party-list elections only through its sectoral wing that can
separately register under the party-list system. The sectoral wing is by itself an
independent sectoral party, and is linked to a political party through a coalition.
4. Sectoral parties or organizations may either be marginalized and
underrepresented or lacking in well-defined political constituencies. It is enough
that their principal advocacy pertains to the special interest and concerns of their
sector. The sectors that are marginalized and underrepresented include labor,
peasant, fisherfolk, urban poor, indigenous cultural communities, handicapped,
veterans, and overseas workers. The sectors that lack well-defined political
constituencies include professionals, the elderly, women, and the youth.
5. A majority of the members of sectoral parties or organizations that represent the
marginalized and underrepresented must belong to the marginalized and
underrepresented sector they represent. Similarly, a majority of the members of
sectoral parties or organizations that lack well-defined political constituencies must
belong to the sector they represent. The nominees of sectoral parties or organizations

that represent the marginalized and underrepresented, or that represent those who
lack well-defined political constituencies, either must belong to their respective
sectors, or must have a track record of advocacy for their respective sectors. The
nominees of national and regional parties or organizations must be bona-fide
members of such parties or organizations.
6. National, regional, and sectoral parties or organizations shall not be disqualified if
some of their nominees are disqualified, provided that they have at least one nominee
who remains qualified.
II. In the BANAT case, major political parties are disallowed, as has always been the
practice, from participating in the party-list elections. But, since theres really no
constitutional prohibition nor a statutory prohibition, major political parties can now
participate in the party-list system provided that they do so through their bona fide
sectoral wing (see parameter 3 above).
Allowing major political parties to participate, albeit indirectly, in the party-list
elections will encourage them to work assiduously in extending their constituencies to
the marginalized and underrepresented and to those who lack well-defined
political constituencies.
Ultimately, the Supreme Court gave weight to the deliberations of the Constitutional
Commission when they were drafting the party-list system provision of the
Constitution. The Commissioners deliberated that it was their intention to include all
parties into the party-list elections in order to develop a political system which is
pluralistic and multiparty. (In the BANAT case, Justice Puno emphasized that the will
of the people should defeat the intent of the framers; and that the intent of the people,
in ratifying the 1987 Constitution, is that the party-list system should be reserved for
the marginalized sectors.)
III. The Supreme Court also emphasized that the party-list system is NOT
RESERVED for the marginalized and underrepresented or for parties who lack
well-defined political constituencies. It is also for national or regional parties. It is
also for small ideology-based and cause-oriented parties who lack well-defined
political constituencies. The common denominator however is that all of them
cannot, they do not have the machinery unlike major political parties, to field or
sponsor candidates in the legislative districts but they can acquire the needed votes in
a national election system like the party-list system of elections.
If the party-list system is only reserved for marginalized representation, then the
system itself unduly excludes other cause-oriented groups from running for a seat in
the lower house.
As explained by the Supreme Court, party-list representation should not be
understood to include only labor, peasant, fisherfolk, urban poor, indigenous cultural
communities, handicapped, veterans, overseas workers, and other sectors that by their

nature are economically at the margins of society. It should be noted that Section 5 of
Republic Act 7941 includes, among others, in its provision for sectoral representation
groups of professionals, which are not per se economically marginalized but are still
qualified as marginalized, underrepresented, and do not have well-defined political
constituencies as they are ideologically marginalized.
Background of the case
52 party-list groups and organizations filed separate petitions totaling 54 with the
Supreme Court (SC) in an effort to reverse various resolutions by the Commission on
Elections (Comelec) disqualifying them from the May 2013 party-list race. The
Comelec, in its assailed resolutions issued in October, November and December of
2012, ruled, among others, that these party-list groups and organizations failed to
represent a marginalized and underrepresented sector, their nominees do not come
from a marginalized and underrepresented sector, and/or some of the organizations
or groups are not truly representative of the sector they intend to represent in
Congress.
Petitioners argued that the poll body committed grave abuse of discretion in denying
some of the petitioners application for accreditation and cancelling the existing
accreditation of the rest. They also lamented the poll bodys denial to accord them
due process in the evaluation proceedings.
The high court consolidated these cases; Senior Associate Justice Antonio Carpio was
tasked as the Member-in-charge of the case.
Status quo ante orders (SQAO) were issued in all 54 petitions which restored the
status quo prior to the disqualification of petitioners. However, only 39 of the 52
petitioners or only 41 petitions were able to secure a mandatory injunction, directing
the Comelec to include their names in the printing of official ballots.
THE RULING
In a Decision promulgated on April 2, 2013, the high court, through Carpios
ponencia, ruled in favor of the 54 petitions and remanded these petitions to the
Comelec. The party-list groups and organizations covered by the 41 petitions that
obtained mandatory injunction orders from the high court still stand a chance to make
it to the 2013 party-list race as the high court ordered the poll body to determine
whether petitioners are qualified to register under the party-list system and to
participate in the 13 May 2013 party-list elections under the new parameters set forth
in the Decision. The rest, meaning, the 13 other petitions, were remanded to the poll

body merely for purposes of determining whether they may be granted accreditation
under the new parameters but may not participate in the May 2013 elections.
The Decision, however, clarified that the poll body may not be faulted for acting on
the basis of previous rulings (Ang Bagong Bayani, BANAT) of the high court
regarding the party-list system. These earlier rulings enumerated guidelines on who
may participate in the party-list system.
New parameters set forth in the Decision on who may participate in the May
2013 party-list race and subsequent party-list elections
The Decision identified three groups that may participate in the party-list system: (1)
national parties or organizations, (2) regional parties or organizations, and (3) sectoral
parties or organizations.
On the part of national parties or organizations and regional parties or organizations
which intend to participate in the party-list race, the new guidelines state that these
parties do not need to organize along sectoral lines and do not need to represent any
marginalized or underrepresented sector.'
As for political parties, they may participate in the party-list race by registering under
the party-list system and no longer field congressional candidates. These parties, if
they field congressional candidates, however, are not barred from participating in the
party-list elections; what they need to do is register their sectoral wing or party under
the party-list system. This sectoral wing shall be considered an independent sectoral
party linked to a political party through a coalition.
The question is: where does representation of marginalized and underrepresented
sectors come in?
The answer: on the sectoral parties or organizations that intend to participate in the
party-list system.
The high court held that purely sectoral parties or organizations may either represent
marginalized and underrepresented constituencies or those lacking well-defined
political constituencies. The high court went on to enumerate marginalized and
underrepresented sectors, as follows: labor, peasant, fisherfolk, urban poor,
indigenous cultural communities, handicapped, veterans, and overseas workers. The
sectors that lack well-defined political constituencies include professionals, the
elderly, women, and the youth.

The rule on nominees and members coming from the sector they intend to represent
also applies only to the sectoral parties or organizations. The high court ruled that it is
enough that [a] majority of the members of the sectoral parties or organizations
must belong to the marginalized and underrepresented sector they represent.' The
same is true for those who lack well-defined political constituencies.
As for the nominees of these sectoral parties and organizations, the new guidelines
provide that they must either be members of the sector or have a track record of
advocacy for their sector.
Should some of the nominees of these national, regional, and sectoral parties or
organizations be disqualified, the party or organization itself will not be disqualified
provided that they have at least one nominee who remains qualified.
The party-list system, according to the Decision
Quoting Christian Monsod, the main proponent of the party-list system, the high court
stated that it is not synonymous with that of the sectoral representation. The high
court stressed that the framers of the 1987 Constitution did not intend to leave out
non-sectoral parties in the party-list system and exclusively limit it to sectoral
groups.
The framers intended the sectoral parties to constitute a part, but not the entirety, of
the party-list system In fact, the framers voted down , 19-22, a proposal to reserve
the party-list system exclusively to sectoral parties.
There can be no doubt whatsoever that the framers of the 1987 Constitution
expressly rejected the proposal to make the party-list system exclusively for sectoral
parties only, and that they clearly intended the party-list system to include both
sectoral and non-sectoral parties, the Decision read.
To amplify its position, the high court pointed out Sec. 5(1), Art. VI of the 1987
Constitution, which states:
Section 5. (1) The House of Representatives shall be composed of not more than two
hundred and fifty members, unless otherwise fixed by law, who shall be elected from
legislative districts apportioned among the provinces, cities, and the Metropolitan
Manila area in accordance with the number of their respective inhabitants, and on the
basis of a uniform and progressive ratio, and those who, as provided by law, shall be
elected through a party-list system of registered national, regional, and sectoral
parties or organizations.

The Decision also pointed out pertinent provisions of Republic Act (RA) No. 7941,
also known as the Party-list System Act, specifically from Sec. 3 (Definition of
Terms):
(b) A party means either a political party or a sectoral party or a coalition of parties
(c) A political party refers to an organized group of citizens advocating an ideology
or platform, principles and policies for the general conduct of government and which,
as the most immediate means of securing their adoption, regularly nominates and
supports certain of its leaders and members as candidates for public office
(d) A sectoral party refers to an organized group of citizens belonging to any of the
sectors enumerated in Section 5 hereof whose principal advocacy pertains to the
special interest and concerns of their sector
Again, the high court noted that defining these parties or groups, one from the others,
could only mean that they are not one and the same.
Previous rulings reversed by Atong Paglaum
As earlier stated, there are previous rulings on the party-list system in the case of Ang
Bagong
Bayani
v.
Comelec
(http://sc.judiciary.gov.ph/jurisprudence/2001/jun2001/147589_decision.htm)
and
BANAT
v.
Comelec
(http://sc.judiciary.gov.ph/jurisprudence/2009/april2009/179271.htm).
In Ang Bagong Bayanis parameters for the party-list system, guideline 2 states that
while even major political parties are expressly allowed by RA 7941 and the
Constitution to participate in the party-list system, they must comply with the
declared statutory policy of enabling Filipino citizens belonging to marginalized and
underrepresented sectors to be elected to the House of Representatives.'
However, in its latest Decision, in Atong Paglaum, the high court pointed out that
there was an inherent inconsistency in the Ang Bagong Bayani guidelines since the
requirement that the major political parties should represent the marginalized and
underrepresented sectors essentially automatically disqualified these major parties
from the party-list system.
As for BANAT, incidentally also penned by Carpio, the high court said that the
guidelines in this ruling merely formalized the prevailing practice when it
prohibited major political parties from participating in the party-list elections even if
through their allied sectoral organizations.

My 2-cents
Flip-flopped as it may have in the case of Atong Paglaum, I agree with the Supreme
Court in this Decision. No less than the Constitution provides in Sec. 5(1), Art. VI that
national, regional, and sectoral parties and organizations may participate in the
party-list system a fact that may not be denied in spite of where public discourse
and sentiment tend to sway in as far as the party-list system is concerned.
If we want the party-list system to truly represent marginalized and
underrepresented sectors and party-list groups to come from the non-traditional
political parties, then what needs to be done is amend the law. The Supreme Court
cannot go beyond its duty of interpreting the law and may not perform a constitutional
function and mandate which is solely that of the legislative branch. Doing so would
be tantamount to judicial legislation.
I totally agree that allowing national and major political parties to participate in the
party-list elections does not make any sense if there were no distinction or
requirement that the marginalized and underrepresented should be the constituency.
Why then create a separate system if it is, in fact, free for all?
But this is an issue best left to Congress to resolve, heart-wrenching as this may sound
to those whose desire is to provide a platform for a truly non-traditional mode of
politics. For now, let us accept that we cannot go beyond what the law provides.

Barangay Associationfor National Advancement Transparency v. Commission on

Elections, 586 SCRA 210
586 SCRA 210 Political Law Constitutional Law Legislative Department
Party List System; Proportional Representation; Proper Computation
Statutory Construction Rule in Interpreting the Constitution Intent of the Framers
vs Intent of the People
NOTE: This case is consolidated with BAYAN Muna vs COMELEC (G.R. No.
179295).
In July and August 2007, the COMELEC, sitting as the National Board of Canvassers,
made a partial proclamation of the winners in the party-list elections which was held
in May 2007.
In proclaiming the winners and apportioning their seats, the COMELEC considered
the following rules:

1. In the lower house, 80% shall comprise the seats for legislative districts, while the
remaining 20% shall come from party-list representatives (Sec. 5, Article VI, 1987
Constitution);
2. Pursuant to Sec. 11b of R.A. 7941 or the Party-List System Act, a party-list which
garners at least 2% of the total votes cast in the party-list elections shall be entitled to
one seat;
3. If a party-list garners at least 4%, then it is entitled to 2 seats; if it garners at least
6%, then it is entitled to 3 seats this is pursuant to the 2-4-6 rule or thePanganiban
Formula from the case of Veterans Federation Party vs COMELEC.
4. In no way shall a party be given more than three seats even if if garners more than
6% of the votes cast for the party-list election (3 seat cap rule, same case).
The Barangay Association for National Advancement and Transparency (BANAT), a
party-list candidate, questioned the proclamation as well as the formula being used.
BANAT averred that the 2% threshold is invalid; Sec. 11 of RA 7941 is void because
its provision that a party-list, to qualify for a congressional seat, must garner at least
2% of the votes cast in the party-list election, is not supported by the Constitution.
Further, the 2% rule creates a mathematical impossibility to meet the 20% party-list
seat prescribed by the Constitution.
BANAT also questions if the 20% rule is a mere ceiling or is it mandatory. If it is
mandatory, then with the 2% qualifying vote, there would be instances when it would
be impossible to fill the prescribed 20% share of party-lists in the lower house.
BANAT also proposes a new computation (which shall be discussed in the HELD
portion of this digest).
On the other hand, BAYAN MUNA, another party-list candidate, questions the
validity of the 3 seat rule (Section 11a of RA 7941). It also raised the issue of whether
or not major political parties are allowed to participate in the party-list elections or is
the said elections limited to sectoral parties.
ISSUES:
I. How is the 80-20 rule observed in apportioning the seats in the lower house?
II. Whether or not the 20% allocation for party-list representatives mandatory or a
mere ceiling.
III. Whether or not the 2% threshold to qualify for a seat valid.
IV. How are party-list seats allocated?
V. Whether or not major political parties are allowed to participate in the party-list
elections.
VI. Whether or not the 3 seat cap rule (3 Seat Limit Rule) is valid.

HELD:
I. The 80-20 rule is observed in the following manner: for every 5 seats allotted for
legislative districts, there shall be one seat allotted for a party-list representative.
Originally, the 1987 Constitution provides that there shall be not more than 250
members of the lower house. Using the 80-20 rule, 200 of that will be from legislative
districts, and 50 would be from party-list representatives. However, the Constitution
also allowed Congress to fix the number of the membership of the lower house as in
fact, it can create additional legislative districts as it may deem appropriate. As can be
seen in the May 2007 elections, there were 220 district representatives, hence
applying the 80-20 rule or the 5:1 ratio, there should be 55 seats allotted for party-list
representatives.
How did the Supreme Court arrive at 55? This is the formula:
(Current Number of Legislative DistrictRepresentatives 0.80) x (0.20) = Number of
Seats Available to Party-List Representatives
Hence,
(220 0.80) x (0.20) = 55
II. The 20% allocation for party-list representatives is merely a ceiling meaning, the
number of party-list representatives shall not exceed 20% of the total number of the
members of the lower house. However, it is not mandatory that the 20% shall be
filled.
III. No. Section 11b of RA 7941 is unconstitutional. There is no constitutional basis to
allow that only party-lists which garnered 2% of the votes cast are qualified for a seat
and those which garnered less than 2% are disqualified. Further, the 2% threshold
creates a mathematical impossibility to attain the ideal 80-20 apportionment. The
Supreme Court explained:
To illustrate: There are 55 available party-list seats. Suppose there are 50 million
votes cast for the 100 participants in the party list elections. A party that has two
percent of the votes cast, or one million votes, gets a guaranteed seat. Let us further
assume that the first 50 parties all get one million votes. Only 50 parties get a seat
despite the availability of 55 seats. Because of the operation of the two percent
threshold, this situation will repeat itself even if we increase the available party-list
seats to 60 seats and even if we increase the votes cast to 100 million. Thus, even if
the maximum number of parties get two percent of the votes for every party, it is
always impossible for the number of occupied party-list seats to exceed 50 seats as
long as the two percent threshold is present.
It is therefore clear that the two percent threshold presents an unwarranted obstacle to
the full implementation of Section 5(2), Article VI of the Constitution and prevents
the attainment of the broadest possible representation of party, sectoral or group
interests in the House of Representatives.

IV. Instead, the 2% rule should mean that if a party-list garners 2% of the votes cast,
then it is guaranteed a seat, and not qualified. This allows those party-lists
garnering less than 2% to also get a seat.
But how? The Supreme Court laid down the following rules:
1. The parties, organizations, and coalitions shall be ranked from the highest to the
lowest based on the number of votes they garnered during the elections.
2. The parties, organizations, and coalitions receiving at least two percent (2%) of the
total votes cast for the party-list system shall be entitled to one guaranteed seat each.
3. Those garnering sufficient number of votes, according to the ranking in paragraph
1, shall be entitled to additional seats in proportion to their total number of votes until
all the additional seats are allocated.
4. Each party, organization, or coalition shall be entitled to not more than three (3)
seats.
In computing the additional seats, the guaranteed seats shall no longer be included
because they have already been allocated, at one seat each, to every two-percenter.
Thus, the remaining available seats for allocation as additional seats are the
maximum seats reserved under the Party List System less the guaranteed seats.
Fractional seats are disregarded in the absence of a provision in R.A. No. 7941
allowing for a rounding off of fractional seats.
In short, there shall be two rounds in determining the allocation of the seats. In the
first round, all party-lists which garnered at least 2% of the votes cast (called the twopercenters) are given their one seat each. The total number of seats given to these
two-percenters are then deducted from the total available seats for party-lists. In this
case, 17 party-lists were able to garner 2% each. There are a total 55 seats available
for party-lists hence, 55 minus 17 = 38 remaining seats. (Please refer to the full text of
the case for the tabulation).
The number of remaining seats, in this case 38, shall be used in the second round,
particularly, in determining, first, the additional seats for the two-percenters, and
second, in determining seats for the party-lists that did not garner at least 2% of the
votes cast, and in the process filling up the 20% allocation for party-list
representatives.
How is this done?
Get the total percentage of votes garnered by the party and multiply it against the
remaining number of seats. The product, which shall not be rounded off, will be the
additional number of seats allotted for the party list but the 3 seat limit rule shall
still be observed.
Example:

In this case, the BUHAY party-list garnered the highest total vote of 1,169,234 which
is 7.33% of the total votes cast for the party-list elections (15,950,900).
Applying the formula above: (Percentage of vote garnered) x (remaining seats) =
number of additional seat
Hence, 7.33% x 38 = 2.79
Rounding off to the next higher number is not allowed so 2.79 remains 2. BUHAY is
a two-percenter which means it has a guaranteed one seat PLUS additional 2 seats or
a total of 3 seats. Now if it so happens that BUHAY got 20% of the votes cast, it will
still get 3 seats because the 3 seat limit rule prohibits it from having more than 3 seats.
Now after all the tw0-percenters were given their guaranteed and additional seats, and
there are still unoccupied seats, those seats shall be distributed to the remaining partylists and those higher in rank in the voting shall be prioritized until all the seats are
occupied.
V. No. By a vote of 8-7, the Supreme Court continued to disallow major political
parties (the likes of UNIDO, LABAN, etc) from participating in the party-list
elections.
Although the ponencia (Justice Carpio) did point out that there is no prohibition either
from the Constitution or from RA 7941 against major political parties from
participating in the party-list elections as the word party was not qualified and that
even the framers of the Constitution in their deliberations deliberately allowed major
political parties to participate in the party-list elections provided that they establish a
sectoral wing which represents the marginalized (indirect participation), Justice Puno,
in his separate opinion, concurred by 7 other justices, explained that the will of the
people defeats the will of the framers of the Constitution precisely because it is the
people who ultimately ratified the Constitution and the will of the people is that
only the marginalized sections of the country shall participate in the party-list
elections. Hence, major political parties cannot participate in the party-list elections,
directly or indirectly.
VI. Yes, the 3 seat limit rule is valid. This is one way to ensure that no one party shall
dominate the party-list system.