[G.R. No. 112745.

October 16, 1997]

AQUILINO T.
LARIN,
petitioner,
vs.
THE
EXECUTIVE
SECRETARY, SECRETARY OF FINANCE, COMMISSIONER OF THE
BUREAU OF INTERNAL REVENUE AND THE COMMITTEE
CREATED TO INVESTIGATE THE ADMINISTRATIVE COMPLAINT
AGAINST AQUILINO T. LARIN, COMPOSED OF FRUMENCIO A.
LAGUSTAN, JOSE B. ALEJANDRINO and JAIME M. MAZA,
respondents.
TORRES, JR., J.:
Challenge in this petition is the validity of petitioners removal from
service as Assistant Commissioner of the Excise Tax Service of the
Bureau of Internal Revenue. Incidentally, he questions Memorandum
order no. 164 issued by the Office of the President, which provides for
the creation of A Committee to Investigate the Administrative
Complaint Against Aquilino T. Larin, Assistant Commissioner, Bureau
of Internal Revenue as well as the investigation made in pursuance
thereto and Administrative Order No. 101 dated December 2, 1993
which found him guilty of grave misconduct in the administrative
charge and imposed upon him the penalty of dismissal from office.
Likewise, petitioner seeks to assail the legality of Executive Order No.
132, issued by President Ramos on October 26, 1993, which provides
for the Streamlining of the Bureau of Internal Revenue, and of its
implementing rules issued by the Bureau of Internal Revenue,
namely: a) Administrative Order No. 4-93, which provides for the
Organizational Structure and Statement of General Functions of
Offices in the National Office and b) Administrative Order No. 5-93,
which provides for Redefining the Areas of Jurisdiction and
Renumbering of Regional And District Offices.

Galban, Jr.) of the crimes of violation of Section 268 (4) of the

National Internal Revenue Code and Section 3 (e) of R.A. 3019 in
Criminal Cases Nos. 14208-14209, entitled People of the Philippines,
Plaintiff vs. Aquilino T. Larin, Teodoro T. Pareno, Justino E. Galban, Jr.
and Potenciana N. Evangelista, Accused, the dispositive portion of the
judgment reads:
"WHEREFORE, judgment is now rendered in Criminal Cases Nos.
14208 and 14209 convicting accused Assistant Commissioner for
Specific Tax Aquilino T. Larin, Chief of the Alcohol tax Division
TEODORO P. PARENO, and Chief of the Revenue accounting Division
POTENCIANA M. EVANGELISTA:
xxx
SO ORDERED.
The fact of petitioners conviction was reported to the President of the
Philippines by the then Acting Finance Secretary Leong through a
memorandum dated June 4, 1993. The memorandum states, inter
alia:
This is a report in the case of Assistant Commissioner AQUILINO T.
LARIN of the Excise tax Service, Bureau of Internal Revenue, a
presidential appointee, one of those convicted in the Criminal Case
Nos. 14208-14209, entitled People of the Philippines vs. Aquilino T.
Larin, et. al. Referred to the Department of Finace by the
Commissioner of Internal Revenue.
The cases against Pareno and Evangelista are being acted upon by
the Bureau of Internal revenue as they non-presidential appointees.
xxx

The antecedent facts of the instant case as succinctly related by the

Solicitor General are as follows:
On September 18, 1992, [1] a decision was rendered by the
Sandiganbayan convicting herein petitioner Aquilino T. Larin,
Revenue Specific Tax Officer, then Assistant Commisioner of the
Bureau of Internal Revenue and his co-accused (except Justino E.

It is clear from the foregoing that Mr. Larin has found beyond
reasonable doubt to have committed acts constituting grave
misconduct. Under the Civil Service Laws and Rules which require
only preponderance of evidence, grave misconduct is punishable by
dismissal.

Acting by authority of the President, Sr. Deputy Executive Secretary

Leonardo A. Quisumbing issued Memorandum Order No. 164 dated
August 25, 1993 which provides for the creation of an Executive
Committee to investigate the administrative charge against herein
petitioner Aquilino T. Larin. It states thus:

you which are also the subject of the Criminal Cases No. 14208 and
14209 entitled People of the Philippines vs. Aquilino T. Larin, et. al.

A Committee is hereby created to investigate the administrative

complaint filed against Aquilino T. Larin, Assistant Commissioner,
Bureau of Internal Revenue, to be composed of:

Pursuant to Presidential Memorandum Order No. 164, you are hereby

directed to file your position paper on the aforementioned charges
within seven (7) days from receipt hereof xxx.

Atty. Frumencio A. Lagustan Chairman

Assistant Executive Secretary for Legislation
Mr. Jose B. Alejandro Member
Presidential Assistant

Failure to file the required position paper shall be considered as a

waiver on your part to submit such paper or to be heard, in which
case, the Committee shall deem the case submitted on the basis of
the documents and records at hand.

Atty. Jaime M. Maza Member

Assistant commissioner of Inspector services
Bureau of Internal Revenue

In compliance, petitioner submitted a letter dated September 30,

1993 which was addressed to Atty. Frumencio A. Lagustan , the
Chairman of the Investigating Committee. In said latter, he asserts
that,

The Committee shall have the powers and prerogatives of (an)

investigating committee under the administrative Code of 1987
including the power to summon witnesses, administer oath or take
testimony or evidence relevant to the investigation by subpoena ad
testificandum and subpoena duces tecum:

The committee has its possession a certified true copy of the

Decision of the Sandiganbayan in the above-mentioned cases.

The case being sub-judice, I may not , therefore, comment on the

merits of issues involved for fear of being cited in contempt of Court.
This position paper is thus limited to furnishing the Committee
pertinent documents submitted with the Supreme Court and other
tribunal which took cognizance of the case in the past, as follows:

xxx
xxx
The Committee shall convene immediately, conduct the investigation
in the most expeditious manner, and terminate the same as soon as
practicable from its first scheduled date of hearing.
xxx
Consequently, the Committee directed the petitioner to respond to
the administrative charge leveled against him through a letter dated
September 17, 1993, thus:
Presidential Memorandum Order No. 164 dated August 25, 1993, a
xerox copy of which is hereto attached for your ready reference,
created an Investigation Committee to look into the charges against

The foregoing documents readily show that I am not administratively

liable or criminally culpable of the charges leveled against me, and
that the aforesaid cases are mere prosecutions caused to be filed and
are being orchestrated by taxpayers who were prejudiced by multimillion peso assessments I caused to be issued against them in my
official capacity as Assistant Commissioner, Excise Tax office of
Bureau of Internal Revenue.
In the same letter, petitioner claims that the administrative
complaint against him is already barred: a) on jurisdictional ground
as the Office of the Ombudsman had already taken cognizance of the
case and had caused the filing only of the criminal charges against

him, b) by res judicata, c) double jeopardy, and d) because to

proceed with the case would be redundant, oppressive and a plain
persecution against him.

Aggrieved, petitioner filed directly with this Court the instant petition
on December 13, 1993 to question basically his alleged unlawful
removal from office.

Meanwhile, the President issued the challenged Executive order No.

132 dated October 26, 1993 which mandates for the streamlining of
the Bureau of Internal Revenue. Under said order, some positions and
functions are either abolished, renamed, decentralized or transferred
to other offices, while other offices are also created. The Excise Tax
Service or the Specific Tax Service, of which petitioner was the
Assistant Commissioner, was one of those offices that was abolished
by said executive order.

On April 17, 1996 and while the instant petition is pending, this Court
set aside the conviction of the petitioner in Criminal Case Nos. 14208
and 14209.

The corresponding implementing rules of Executive Order No. 132,

namely, revenue Administrative Orders Nos. 4-93 and 5-93, were
subsequently issued .by the Bureau of Internal Revenue.
On October 27, 1993, or one day after the promulgation of Executive
Order No.132, the President appointed the following as BIR Assistant
Commissioners:
1. Bernardo A. Frianeza
2. Dominador L. Galura
3. Jaime D. Gonzales
4. Lilia C. Guillermo
5. Rizalina S. Magalona
6. Victorino C. Mamalateo
7. Jaime M. Masa
8. Antonio N. Pangilinan
9. Melchor S. Ramos
10. Joel L. Tan-Torres
Consequently, the president, in the assailed Administrative Order No.
101 dated December 2, 1993, found petitioner guilty of grave
misconduct in the administrative charge and imposed upon him the
penalty of dismissal with forfeiture of his leave credits and retirement
benefits including disqualification for reappointment in the
government service.

In his petition, petitioner challenged the authority of the President to

dismiss him from office. He argued that in so far as presidential
appointees who are Career Executive Service Officers are concerned,
the President exercises only the power of control not the power to
remove. He also averred that the administrative investigation
conducted under Memorandum Order No. 164 is void as it violated
his right to due process. According to him, the letter of the
Committee dated September 17, 1993 and his position paper dated
September 30, 1993 are not sufficient for purposes of complying with
the requirements of due process. He alleged that he was not
informed of the administrative charges leveled against him nor was
he given official notice of his dismissal.
Petitioner likewise claimed that he was removed as a result of the
reorganization made by the Executive Department in the BIR
pursuant to Executive Order No. 132. Thus, he assailed said
Executive Order No. 132 and its implementing rules, namely,
Revenue Administrative Orders 4-93 and 5-93 for being ultra vires.
He claimed that there is yet no law enacted by Congress which
authorizes the reorganization by the Executive Department of
executive agencies, particularly the Bureau of Internal revenue. He
said that the reorganization sought to be effected by the Executive
Department on the basis of E.O. No. 132 is tainted with bad faith in
apparent violation of Section 2 of R.A. 6656, otherwise known as the
Act Protecting the Security of Tenure of Civil Service Officers and
Employees in the Implementation of Government Reorganization.
On the other hand, respondents contended that since petitioner is
the presidential appointee, he falls under the disciplining authority of
the President. They also contended that E.O. No. 132 and its
implementing rules were validly issued pursuant to Sections 48 and
62 of Republic Act No. 7645. Apart from this, the other legal bases of

E.O. No. 132 as stated in its preamble are Section 63 of E.O No.127
(Reorganizing the Ministry of Finance), and Section 20, Book III of E.O.
No. 292, otherwise known as the Administrative Code of 1987. In
addition, it is clear that in Section 11 of R.A No.6656 future
reorganization is expressly contemplated and nothing in said law that
prohibits subsequent reorganization through an executive order.
Significantly, respondents clarified that petitioner was not dismissed
by virtue of EO 132. Respondents claimed that he was removed from
office because he was found guilty of grave misconduct in the
administrative cases filed against him.
The ultimate issue to be resolved in the instant case falls on the
determination of the validity of petitioners dismissal from office.
Incidentally, in order to resolve this matter, it is imperative that We
consider these questions : a) Who has the power to discipline the
petitioner?, b) Were the proceedings taken pursuant to Memorandum
Order No. 164 in accord with due process?, c) What is the effect of
petitioners acquittal in the criminal case to his administrative
charge? d) Does the President have the power to reorganize the BIR
or to issue the questioned E.O. NO. 132?, e) Is the reorganization of
BIR pursuant to E.O. No. 132 tainted with bad faith?
At the outset, it is worthy to note that the position of the Assistant
Commissioner of the BIR is part of the Career Executive Service.[2]
Under the law,[3] Career Executive Service officers, namely
Undersecretary, Assistant Secretary, Bureau director, Assistant
Bureau Director, Regional Director, Assistant Regional Director, Chief
of Department Service and other officers of equivalent rank as may
be identified by the Career Executive Service Board, are all appointed
by the President. Concededly, petitioner was appointed as Assistant
Commissioner in January, 1987 by then President Aquino. Thus,
petitioner is a presidential appointee who belongs to career service of
the Civil Service. Being a presidential appointee, he comes under the
direct diciplining authority of the President. This is in line with the
well settled principle that the power to remove is inherent in the
power to appoint conferred to the President by Section 16, Article VII
of the Constitution. Thus, it is ineluctably clear that Memorandum
Order No. 164, which created a committee to investigate the
administrative charge against petitioner, was issued pursuant to the
power of removal of the President. This power of removal, however, is

not an absolute one which accepts no reservation. It must be pointed

out that petitioner is a career service officer. Under the
Administrative Code of 1987, career service is characterized by the
existence of security of tenure, as contra-distinguished from noncareer service whose tenure is co-terminus with that of the
appointing or subject to his pleasure, or limited to a period specified
by law or to the duration of a particular project for which purpose the
employment was made. As a career service officer, petitioner enjoys
the right to security of tenure. No less than the 1987 Constitution
guarantees the right of security of tenure of the employees of the
civil service. Specifically, Section 36 of P.D. No. 807, as amended,
otherwise known as Civil Service Decree of the Philippines, is
emphatic that career service officers and employees who enjoy
security of tenure may be removed only for any of the causes
enumerated in said law. In other words, the fact that the petitioner is
a presidential appointee does not give the appointing authority the
license to remove him at will or at his pleasure for it is an admitted
fact that he is likewise a career service officer who under the law is
the recipient of tenurial protection, thus, may only be removed for a
cause and in accordance with procedural due process.
Was petitioner then removed from office for a legal cause under a
valid proceeding?
Although the proceedings taken complied with the requirements of
procedural due process, this Court, however, considers that
petitioner was not dismissed for a valid cause.
It should be noted that what precipitated the creation of the
investigative committee to look into the administrative charge
against petitioner is his conviction by the Sandiganbayan in criminal
Case Nos. 14208 and 14209. As admitted by the respondents, the
administrative case against petitioner is based on the Sandiganbayan
Decision of September 18, 1992. Thus, in the Administrative Order
No. 101 issued by Senior Deputy Executive Secretary Quisumbing
which found petitioner guilty of grave misconduct, it clearly states
that:
"This pertains to the administrative charge against Assistant
Commissioner Aquilino T. Larin of the Bureau of Internal Revenue, for

grave misconduct by virtue of a Memorandum signed by Acting

Secretary Leong of the Department of Finance, on the basis of
decision handed down by the Hon. Sandiganbayan convicting Larin,
et. al. in Criminal Cases No. 14208 and 14209."[4]
In a nutshell, the criminal cases against petitioner refer to his alleged
violation of Section 268 (4) of the National Internal Revenue Code
and of section 3(e) of R.A. No.3019 as a consequence of his act of
favorably recommending the grant of tax credit to Tanduay Distillery,
Inc.. The pertinent portion of the judgment of the Sandiganbayan
reads:
"As above pointed out, the accused had conspired in knowingly
preparing false memoranda and certification in order to effect a fraud
upon taxes due to the government. By their separate acts which had
resulted in an appropriate tax credit of P180,701,682.00 in favor of
Tanduay. The government had been defrauded of a tax revenue - for
the full amount, if one is to look at the availments or utilization
thereof (Exhibits 'AA' to 'AA-31-a'), or for a substantial portion thereof
(P73,000,000.00) if we are to rely on the letter of Deputy
Commissioner Eufracio D. Santos (Exhibits '21' for all the accused).
As pointed out above, the confluence of acts and omissions
committed by accused Larin, Pareno and Evangelista adequately
prove conspiracy among them for no other purpose than to bring
about a tax credit which Tanduay did not deserve. These
misrepresentations as to how much Tanduay had paid in ad valorem
taxes obviously constituted a fraud of tax revenue of the government
xxx.'[5]
However, it must be stressed at this juncture that the conviction of
petitioner by the Sandiganbayan was set aside by this court in our
decision promulgated on April 17, 1996 in G.R. Nos. 108037-38 and
107119-20. We specifically ruled in no uncertain terms that : a)
petitioner cannot be held negligent in relying on the certification of a
co-equal unit in the BIR, b) it is not incumbent upon Larin to go
beyond the certification made by the Revenue Accounting Division
that Tanduay Distillery, Inc. had paid the ad valorem taxes, c) there is
nothing irregular or anything false in Larin's marginal note on the
memorandum addressed to Pareno, the Chief of Alcohol Tax Division

who was also one of the accused, but eventually acquitted, in the
said criminal cases, and d) there is no proof of actual agreement
between the accused, including petitioner, to commit the illegal acts
charged. We are emphatic in our resolution in said cases that there is
nothing "illegal with the acts committed by the petitioner(s)." We also
declare that "there is no showing that petitioner(s) had acted
irregularly, or performed acts outside of his (their) official functions."
Significantly, these acts which We categorically declare to be not
unlawful and improper in G.R. Nos. 108037-38 and G.R. Nos. 10711920 are the very same acts for which petitioner is held to be
administratively responsible. Any charge of malfeasance or
misfeasance on the part of the petitioner is clearly belied by our
conclusion in said cases. In the light of this decisive pronouncement,
We see no reason for the administrative charge to continue - it must,
thus, be dismissed.
We are not unaware of the rule that since administrative cases are
independent from criminal actions for the same act or omission, the
dismissal or acquittal of the criminal charge does not foreclose the
institution of administrative action nor carry with it the relief from
administrative liability.[6] However, the circumstantial setting of the
instant case sets it miles apart from the foregoing rule and placed it
well within the exception. Corollarily, where the very basis of the
administrative case against petitioner is his conviction in the criminal
action which was later on set aside by this court upon a categorical
and clear findings that the acts for which he was administratively
held liable are not unlawful and irregular, the acquittal of the
petitioner in the criminal case necessarily entails the dismissal of the
administrative action against him, because in such a case, there is no
basis nor justifiable reason to maintain the administrative suit.
On the aspect of procedural due process, suffice it to say that
petitioner was given every chance to present his side. The rule is well
settled that the essence of due process in administrative proceedings
is that a party be afforded a reasonable opportunity to be heard and
to submit any evidence he may have in support of his defense.[7]
The records clearly show that on October 1, 1993 petitioner
submitted his letter-response dated September 30, 1993 to the
administrative charged filed against him. Aside from his letter, he
also submitted various documents attached as annexes to his letter,

all of which are evidences supporting his defense. Prior to this, he

received a letter dated September 17, 1993 from the Investigation
Committee requiring him to explain his side concerning the charge. It
cannot therefore be argued that petitioner was denied of due
process.
Let us now examine Executive Order No. 132.
As stated earlier, with the issuance of Executive Order No. 132, some
of the positions and offices, including the office of Excise Tax Services
of which petitioner was the Assistant Commissioner, were abolished
or otherwise decentralized. Consequently, the President released the
list of appointed Assistant Commissioners of the BIR. Apparently,
petitioner was not included.
Initially, it is argued that there is no law yet which empowers the
President to issue E.O. No. 132 or to reorganize the BIR.
We do not agree.
Under its Preamble, E.O. No. 132 lays down the legal basis of its
issuance, namely: a) Section 48 and 62 of R.A. No. 7645, b) Section
63 of E.O. No. 127, and c) Section 20, Book III of E.O. No. 292.
Section 48 of R.A. 7645 provides that:
"Sec. 48. Scaling Down and Phase Out of Activities of Agencies Within
the Executive Branch. -- The heads of departments, bureaus and
offices and agencies are hereby directed to identify their respective
activities which are no longer essential in the delivery of public
services and which may be scaled down, phased out or abolished,
subject to civil rules and regulations. xxx. Actual scaling down,
phasing out or abolition of the activities shall be effective pursuant to
Circulars or Orders issued for the purpose by the Office of the
President." (italics ours)
Said provision clearly mentions the acts of "scaling down, phasing
out and abolition" of offices only and does not cover the creation of
offices or transfer of functions. Nevertheless, the act of creating and

decentralizing is included in the subsequent provision of Section 62,

which provides that:
"Sec. 62, Unauthorized Organizational Charges. -- Unless otherwise
created by law or directed by the President of the Philippines, no
organizational unit or changes in key positions in any department or
agency shall be authorized in their respective organization structures
and be funded from appropriations by this Act." (italics ours)
The foregoing provision evidently shows that the President is
authorized to effect organizational changes including the creation of
offices in the department or agency concerned.
The contention of petitioner that the two provisions are riders
deserves scant consideration. Well settled is the rule that every law
has in its favor the presumption of constitutionality.[8] Unless and
until a specific provision of the law is declared invalid and
unconstitutional, the same is valid and binding for all intents and
purposes.
Another legal basis of E.O. No. 132 is Section 20, Book III of E.O. No.
292 which states:
"Sec.20. Residual Powers. -- Unless Congress provides otherwise, the
President shall exercise such other powers and functions vested in
the President which are provided for under the laws and which are
not specifically enumerated above or which are not delegated by the
President in accordance with law." (italics ours)
This provision speaks of such other powers vested in the President
under the law. What law then which gives him the power to
reorganize? It is Presidential Decree No. 1772[9] which amended
Presidential Decree No. 1416. These decrees expressly grant the
President of the Philippines the continuing authority to reorganize the
national government, which includes the power to group, consolidate
bureaus and agencies, to abolish offices, to transfer functions, to
create and classify functions, services and activities and to
standardize salaries and materials. The validity of these two decrees
are unquestionable. The 1987 Constitution clearly provides that "all
laws, decrees, executive orders, proclamations, letters of instructions

and other executive issuances not inconsistent with this Constitution

shall remain operative until amended, repealed or revoked."[10] So
far, there is yet no law amending or repealing said decrees.
Significantly, the Constitution itself recognizes future reorganizations
in the government as what is revealed in Section 16 of Article XVIII,
thus:
"Sec. 16. Career civil service employees separated from service not
for cause but as a result of the xxx reorganization following the
ratification of this Constitution shall be entitled to appropriate
separation pay xxx."
However, We can not consider E.O. No. 127 signed on January 30,
1987 as a legal basis for the reorganization of the BIR. E.O. No. 127
should be related to the second paragraph of Section 11 of Republic
Act No. 6656.
Section 11 provides inter alia:
"xxx
In the case of the 1987 reorganization of the executive branch, all
departments and agencies which are authorized by executive orders
promulgated by the President to reorganize shall have ninety days
from the approval of this act within which to implement their
respective reorganization plans in accordance with the provisions of
this Act." (italics ours)
Executive Order No. 127 was part of the 1987 reorganization
contemplated under said provision. Obviously, it had become stale by
virtue of the expiration of the ninety day deadline period. It can not
thus be used as a proper basis for the reorganization of the BIR.
Nevertheless, as shown earlier, there are other legal bases to sustain
the authority of the President to issue the questioned E.O. No. 132.
While the President's power to reorganize can not be denied, this
does not mean however that the reorganization itself is properly
made in accordance with law. Well-settled is the rule that
reorganization is regarded as valid provided it is pursued in good

faith. Thus, in Dario vs. Mison, this court has had the occasion to
clarify that:
"As a general rule, a reorganization is carried out in good faith if it is
for the purpose of economy or to make bureaucracy more efficient. In
that event no dismissal or separation actually occurs because the
position itself ceases to exist. And in that case the security of tenure
would not be a Chinese Wall. Be that as it may, if the abolition which
is nothing else but a separation or removal, is done for political
reasons or purposely to defeat security of tenure, or otherwise not in
good faith, no valid abolition takes place and whatever abolition is
done is void ab initio. There is an invalid abolition as where there is
merely a change of nomenclature of positions or where claims of
economy are belied by the existence of ample funds."[11]
In this regard, it is worth mentioning that Section 2 of R.A. No. 6656
lists down the circumstances evidencing bad faith in the removal of
employees as a result of the reorganization, thus:
Sec. 2. No officer or employee in the career service shall be removed
except for a valid cause and after due notice and hearing. A valid
cause for removal exist when, pursuant to a bona fide reorganization,
a position has been abolished or rendered redundant or there is a
need to merge, divide, or consolidate positions in order to meet the
exigencies of the service, or other lawful causes allowed by the Civil
Service Law. The existence of any or some of the following
circumstances may be considered as evidence of bad faith in the
removals made as a result of the reorganization, giving rise to a
claim for reinstatement or reappointment by an aggrieved party:
a) Where there is a significant increase in the number of positions in
the new staffing pattern of the department or agency concerned;
b) Where an office is abolished and another performing substantially
the same functions is created;
c) Where incumbents are replaced by those less qualified in terms of
status of appointment, performance and merit;

d) Where there is a reclassification of offices in the department or

agency concerned and the reclassified offices perform substantially
the same functions as the original offices;
e) Where the removal violates the order of separation provided in
Section 3 hereof."
A reading of some of the provisions of the questioned E.O. No. 132
clearly leads us to an inescapable conclusion that there are
circumstances considered as evidences of bad faith in the
reorganization of the BIR.
Section 1.1.2 of said executive order provides that:
"1.1.2 The Intelligence and Investigation Office and the Inspection
Service are abolished. An Intelligence and Investigation Service is
hereby created to absorb the same functions of the abolished office
and service. xxx" (italics ours)
This provision is a clear illustration of the circumstance mentioned in
Section 2 (b) of R.A. No. 6656 that an office is abolished and another
one performing substantially the same function is created.
Another circumstance is the creation of services and divisions in the
BIR resulting to a significant increase in the number of positions in
the said bureau as contemplated in paragraph (a) of section 2 of R.A.
No. 6656. Under Section 1.3 of E.O. No. 132, the Information Systems
Group has two newly created Systems Services. Aside from this, six
new divisions are also created. Under Section 1.2.1, three more
divisions of the Assessment Service are formed. With this newly
created offices, there is no doubt that a significant increase of
positions will correspondingly follow.
Furthermore, it is perceivable that the non-reappointment of the
petitioner as Assistant Commissioner violates Section 4 of R.A. No.
6656. Under said provision, officers holding permanent appointments
are given preference for appointment to the new positions in the
approved staffing pattern comparable to their former position or in
case there are not enough comparable positions to positions next
lower in rank. It is undeniable that petitioner is a career executive

officer who is holding a permanent position. Hence, he should have

given preference for appointment in the position of Assistant
Commissioner. As claimed by petitioner, Antonio Pangilinan who was
one of those appointed as Assistant Commissioner, "is an outsider of
sorts to the bureau, not having been an incumbent officer of the
bureau at the time of the reorganization." We should not lose sight of
the second paragraph of Section 4 of R.A. No. 6656 which explicitly
states that no new employees shall be taken in until all permanent
officers shall have been appointed for permanent position.
IN VIEW OF THE FOREGOING, the petition is granted, and petitioner is
hereby reinstated to his position as Assistant Commissioner without
loss of seniority rights and shall be entitled to full backwages from
the time of his separation from service until actual reinstatement
unless, in the meanwhile, he would have reached the compulsory
retirement age of sixty-five years in which case, he shall be deemed
to have retired at such age and entitled thereafter to the
corresponding retirement benefits.
G.R. No. 81954

August 8, 1989

CESAR Z. DARIO, petitioner,

vs.
HON. SALVADOR M. MISON, HON. VICENTE JAYME and HON.
CATALINO MACARAIG, JR., in their respective capacities as
Commissioner of Customs, Secretary of Finance, and
Executive Secretary, respondents.
G.R. No. 81967

August 8, 1989

VICENTE A. FERIA JR., petitioner,

vs.
HON. SALVADOR M. MISON, HON. VICENTE JAYME, and HON.
CATALINO MACARAIG, JR., in their respective capacities as
Commissioner of Customs, Secretary of Finance, and Executive
Secretary, respondents.
G.R. No. 82023

August 8, 1989

ADOLFO CASARENO, PACIFICO LAGLEVA, JULIAN C. ESPIRITU, DENNIS

A. AZARRAGA, RENATO DE JESUS, NICASIO C. GAMBOA, CORAZON
RALLOS NIEVES, FELICITACION R. GELUZ, LEODEGARIO H. FLORESCA,
SUBAER PACASUM, ZENAIDA LANARIA, JOSE B. ORTIZ, GLICERIO R.
DOLAR, CORNELIO NAPA, PABLO B. SANTOS, FERMIN RODRIGUEZ,
DALISAY BAUTISTA, LEONARDO JOSE, ALBERTO LONTOK, PORFIRIO
TABINO, JOSE BARREDO, ROBERTO ARNALDO, ESTER TAN, PEDRO
BAKAL, ROSARIO DAVID, RODOLFO AFUANG, LORENZO CATRE,
LEONCIA CATRE, ROBERTO ABADA, petitioners,
vs.
COMMISSIONER SALVADOR M. MISON, COMMISSIONER, BUREAU OF
CUSTOMS, respondent.
G.R. No. 83737

August 8, 1989

BENEDICTO L. AMASA and WILLIAM S. DIONISIO, petitioners,

vs.
PATRICIA A. STO. TOMAS, in her capacity as Chairman of the Civil
Service Commission and SALVADOR MISON, in his capacity as
Commissioner of the Bureau of Customs, respondents.
G.R. No. 85310

August 8, 1989

SALVADOR M. MISON, in his capacity as Commissioner of Customs,

petitioner,
vs.
CIVIL SERVICE COMMISSION, ABACA, SISINIO T., ABAD, ROGELIO C.,
ABADIANO, JOSE P., ABCEDE, NEMECIO C., ABIOG, ELY F., ABLAZA,
AURORA M., AGBAYANI, NELSON I., AGRES ANICETO, AGUILAR, FLOR,
AGUILUCHO MA. TERESA R., AGUSTIN, BONIFACIO T., ALANO, ALEX P.,
ALBA, MAXIMO F. JR., ALBANO, ROBERT B., ALCANTARA, JOSE G.,
ALMARIO, RODOLFO F., ALVEZ, ROMUALDO R., AMISTAD RUDY M.,
AMOS, FRANCIS F., ANDRES, RODRIGO V., ANGELES, RICARDO S.,
ANOLIN, MILAGROS H., AQUINO, PASCASIO E., ARABE, MELINDA M.,
ARCANGEL, AGUSTIN S., JR., ARPON, ULPLIANO U., JR., ARREZA,
ARTEMIO M., JR., ARROJO, ANTONIO P., ARVISU, ALEXANDER S.,
ASCA;O, ANTONIO T., ASLAHON, JULAHON P., ASUNCION, VICTOR R.,
ATANGAN, LORNA S., ATIENZA, ALEXANDER R., BACAL, URSULINO C.,
BA;AGA, MARLOWE, Z., BANTA, ALBERTO T., BARREDO, JOSE B.,
BARROS, VICTOR C., BARTOLOME, FELIPE A., BAYSAC, REYNALDO S.,

BELENO, ANTONIO B., BERNARDO, ROMEO D., BERNAS, MARCIANO

S., BOHOL, AUXILIADOR G., BRAVO, VICTOR M., BULEG, BALILIS R.,
CALNEA, MERCEDES M., CALVO, HONESTO G., CAMACHO, CARLOS V.,
CAMPOS, RODOLFO C., CAPULONG, RODRIGO G., CARINGAL, GRACIA
Z., CARLOS, LORENZO B., CARRANTO, FIDEL U., CARUNGCONG,
ALFREDO M., CASTRO, PATRICIA J., CATELO, ROGELIO B., CATURLA,
MANUEL B., CENIZAL, JOSEFINA F., CINCO, LUISITO, CONDE0, JOSE C.,
JR., CORCUERA, FIDEL S., CORNETA, VICENTE S., CORONADO,
RICARDO S., CRUZ, EDUARDO S., CRUZ, EDILBERTO A., CRUZ,
EFIGENIA B., CRUZADO, MARCIAL C., CUSTODIO, RODOLFO M.,
DABON, NORMA M., DALINDIN, EDNA MAE D., DANDAL, EDEN F.,
DATUHARON, SATA A., DAZO, GODOFREDO L., DE CASTRO, LEOPAPA,
DE GUZMAN, ANTONIO A., DE GUZMAN, RENATO E., DE LA CRUZ,
AMADO A., JR., DE LA CRUZ, FRANCISCO C., DE LA PE;A, LEONARDO,
DEL CAMPO, ORLANDO, DEL RIO, MAMERTO P., JR., DEMESA,
WILHELMINA T., DIMAKUTA, SALIC L., DIZON, FELICITAS A., DOCTOR,
HEIDY M., DOLAR, GLICERIO R., DOMINGO, NICANOR J., DOMINGO,
PERFECTO V., JR., DUAY, JUANA G., DYSANGCO, RENATO F., EDILLOR,
ALFREDO P., ELEVAZO, LEONARDO A., ESCUYOS, MANUEL M., JR.,
ESMERIA, ANTONIO E., ESPALDON, MA. LOURDES H., ESPINA, FRANCO
A., ESTURCO, RODOLFO C., EVANGELINO, FERMIN I., FELIX, ERNESTO
G., FERNANDEZ, ANDREW M., FERRAREN, ANTONIO C., FERRERA,
WENCESLAO A., FRANCISCO, PELAGIO S., JR., FUENTES, RUDY L.,
GAGALANG, RENATO V., GALANG, EDGARDO R., GAMBOA, ANTONIO
C., GAN, ALBERTO R., GARCIA, GILBERT M., GARCIA, EDNA V., GARCIA,
JUAN L., GAVIOLA, LILIAN V., GEMPARO, SEGUNDINA G.,
GOBENCIONG, FLORDELIZ B., GRATE, FREDERICK R., GREGORIO,
LAURO P., GUARTICO, AMMON H., GUIANG, MYRNA N., GUINTO,
DELFIN C., HERNANDEZ, LUCAS A., HONRALES, LORETO N., HUERTO,
LEOPOLDO H., HULAR , LANNYROSS E., IBA;EZ, ESTER C., ILAGAN,
HONORATO C., INFANTE, REYNALDO C., ISAIS, RAY C., ISMAEL, HADJI
AKRAM B., JANOLO, VIRGILIO M., JAVIER, AMADOR L., JAVIER,
ROBERTO S., JAVIER, WILLIAM R., JOVEN, MEMIA A., JULIAN,
REYNALDO V., JUMAMOY, ABUNDIO A., JUMAQUIAO, DOMINGO F.,
KAINDOY, PASCUAL B., JR., KOH, NANIE G., LABILLES, ERNESTO S.,
LABRADOR, WILFREDO M., LAGA, BIENVENIDO M., LAGLEVA, PACIFICO
Z., LAGMAN, EVANGELINE G., LAMPONG, WILFREDO G., LANDICHO,
RESTITUTO A., LAPITAN, CAMILO M., LAURENTE, REYNALDO A.,
LICARTE, EVARISTO R., LIPIO, VICTOR O., LITTAUA, FRANKLIN Z.,
LOPEZ, MELENCIO L., LUMBA, OLIVIA., MACAISA, BENITO T., MACAISA,

ERLINDA C., MAGAT, ELPIDIO, MAGLAYA, FERNANDO P., MALABANAN,

ALFREDO C., MALIBIRAN, ROSITA D., MALIJAN, LAZARO V., MALLI,
JAVIER M., MANAHAN, RAMON S., MANUEL, ELPIDIO R., MARAVILLA,
GIL B., MARCELO, GIL C., MARI;AS, RODOLFO V., MAROKET, JESUS
C., MARTIN, NEMENCIO A., MARTINEZ, ROMEO M., MARTINEZ,
ROSELINA M., MATIBAG, ANGELINA G., MATUGAS, ERNESTO T.,
MATUGAS, FRANCISCO T., MAYUGA, PORTIA E., MEDINA, NESTOR M.,
MEDINA, ROLANDO S., MENDAVIA, AVELINO I., MENDOZA,
POTENCIANO G., MIL, RAY M., MIRAVALLES, ANASTACIA L.,
MONFORTE, EUGENIO, JR., G., MONTANO, ERNESTO F., MONTERO,
JUAN M. III., MORALDE, ESMERALDO B., JR., MORALES, CONCHITA D.L.,
MORALES, NESTOR P., MORALES, SHIRLEY S., MUNAR, JUANITA L.,
MU;OZ, VICENTE R., MURILLO, MANUEL M., NACION, PEDRO R.,
NAGAL, HENRY N., NAPA, CORNELIO B., NAVARRO, HENRY L., NEJAL,
FREDRICK E., NICOLAS, REYNALDO S., NIEVES, RUFINO A., OLAIVAR,
SEBASTIAN T., OLEGARIO, LEO Q., ORTEGA, ARLENE R., ORTEGA,
JESUS R., OSORIO, ABNER S., PAPIO, FLORENTINO T. II, PASCUA,
ARNULFO A., PASTOR, ROSARIO, PELAYO, ROSARIO L., PE;A, AIDA C.,
PEREZ, ESPERIDION B., PEREZ, JESUS BAYANI M., PRE, ISIDRO A.,
PRUDENCIADO, EULOGIA S., PUNZALAN, LAMBERTO N., PURA,
ARNOLD T., QUINONES, EDGARDO I., QUINTOS, AMADEO C., JR.,
QUIRAY, NICOLAS C., RAMIREZ, ROBERTO P., RA;ADA, RODRIGO C.,
RARAS, ANTONIO A., RAVAL, VIOLETA V., RAZAL, BETTY R., REGALA,
PONCE F., REYES, LIBERATO R., REYES, MANUEL E., REYES, NORMA Z.,
REYES, TELESFORO F., RIVERA, ROSITA L., ROCES, ROBERTO V.,
ROQUE, TERESITA S., ROSANES, MARILOU M., ROSETE, ADAN I.,
RUANTO, REY, CRISTO C., JR., SABLADA, PASCASIO G., SALAZAR,
SILVERIA S., SALAZAR, VICTORIA A., SALIMBACOD, PERLITA C.,
SALMINGO, LOURDES M., SANTIAGO, EMELITA B., SATINA, PORFIRIO
C., SEKITO, COSME B., JR., SIMON, RAMON P., SINGSON, MELECIO C.,
SORIANO, ANGELO L., SORIANO, MAGDALENA R., SUMULONG, ISIDRO
L., JR., SUNICO, ABELARDO T., TABIJE, EMMA B., TAN, RUDY,
GOROSPE, TAN, ESTER S., TAN, JULITA S., TECSON, BEATRIZ B.,
TOLENTINO, BENIGNO A., TURINGAN, ENRICO T., JR., UMPA, ALI A.,
VALIC, LUCIO E., VASQUEZ, NICANOR B., VELARDE, EDGARDO C.,
VERA, AVELINO A., VERAME, OSCAR E., VIADO, LILIAN T., VIERNES,
NAPOLEON K., VILLALON, DENNIS A., VILLAR, LUZ L., VILLALUZ,
EMELITO V., ZATA, ANGEL A., JR., ACHARON, CRISTETO, ALBA,
RENATO B., AMON, JULITA C., AUSTRIA, ERNESTO C., CALO,
RAYMUNDO M., CENTENO, BENJAMIN R., DE CASTRO, LEOPAPA C .,

DONATO, ESTELITA P., DONATO, FELIPE S., FLORES, PEDRITO S.,

GALAROSA, RENATO, MALAWI, MAUYAG, MONTENEGRO, FRANCISCO
M., OMEGA, PETRONILO T., SANTOS, GUILLERMO F., TEMPLO, CELSO,
VALDERAMA, JAIME B., and VALDEZ, NORA M., respondents.
G.R. No. 85335

August 8, 1989

FRANKLIN Z. LITTAUA, ADAN I. ROSETE, FRANCISCO T. MATUGAS, MA.

J. ANGELINA G. MATIBAG, LEODEGARDIO H. FLORESCA, LEONARDO A.
DELA PE;A, ABELARDO T. SUNICO, MELENCIO L. LOPEZ, NEMENCIO
A. MARTIN, RUDY M. AMISTAD, ERNESTO T. MATUGAS, SILVERIA S.
SALAZAR, LILLIAN V. GAVIOLA, MILAGROS ANOLIN, JOSE B. ORTIZ,
ARTEMIO ARREZA, JR., GILVERTO M. GARCIA, ANTONIO A. RARAS,
FLORDELINA B. GOBENCIONG, ANICETO AGRES, EDGAR Y. QUINONES,
MANUEL B. CATURLA, ELY F. ABIOG, RODRIGO C. RANADA, LAURO
GREGORIO, ALBERTO I. GAN, EDGARDO GALANG, RAY C. ISAIS,
NICANOR B. VASQUEZ, MANUEL ESCUYOS, JR., ANTONIO B. BELENO,
ELPIO R. MANUEL, AUXILIADOR C. BOHOL, LEONARDO ELEVAZO,
VICENTE S. CORNETA, petitioners,
vs.
COM. SALVADOR M. MISON/BUREAU OF CUSTOMS and the CIVIL
SERVICE COMMISSION, respondents.
G.R. No. 86241

August 8, 1989

SALVADOR M. MISON, in his capacity as Commissioner of Customs,

petitioner,
vs.
CIVIL SERVICE COMMISSION, SENEN S. DIMAGUILA, ROMEO P. ARABE
BERNARDO S. QUINTONG, GREGORIO P. REYES, and ROMULO C.
BADILLO respondents

SARMIENTO, J.:

The Court writes finis to this contreversy that has raged bitterly for
the several months. It does so out of ligitimate presentement of more
suits reaching it as a consequence of the government reorganization
and the instability it has wrought on the performance and efficiency

of the bureaucracy. The Court is apprehensive that unless the final

word is given and the ground rules are settled, the issue will fester,
and likely foment on the constitutional crisis for the nation, itself
biset with grave and serious problems.
The facts are not in dispute.
On March 25, 1986, President Corazon Aquino promulgated
Proclamation No. 3, "DECLARING A NATIONAL POLICY TO IMPLEMENT
THE REFORMS MANDATED BY THE PEOPLE, PROTECTING THEIR BASIC
RIGHTS, ADOPTING A PROVISIONAL CONSTITUTION, AND PROVIDING
FOR AN ORDERLY TRANSITION TO A GOVERNMENT UNDER A NEW
CONSTITUTION." Among other things, Proclamation No. 3 provided:
SECTION 1. ...
The President shall give priority to measures to achieve the mandate
of the people to:
(a)
Completely reorganize the government, eradicate unjust and
oppressive structures, and all iniquitous vestiges of the previous
regime; 1
...
Pursuant thereto, it was also provided:
SECTION 1.
In the reorganization of the government, priority shall
be given to measures to promote economy, efficiency, and the
eradication of graft and corruption.
SECTION 2.
All elective and appointive officials and employees
under the 1973 Constitution shall continue in office until otherwise
provided by proclamation or executive order or upon the
appointment and qualification of their successors, if such is made
within a period of one year from February 25, 1986.
SECTION 3.
service as

Any public officer or employee separated from the

a result of the organization effected under this

Proclamation shall, if entitled under the laws then in force, receive

the retirement and other benefits accruing thereunder.
SECTION 4.
The records, equipment, buildings, facilities and other
properties of all government offices shall be carefully preserved. In
case any office or body is abolished or reorganized pursuant to this
Proclamation, its FUNDS and properties shall be transferred to the
office or body to which its powers, functions and responsibilities
substantially pertain. 2
Actually, the reorganization process started as early as February 25,
1986, when the President, in her first act in office, called upon "all
appointive public officials to submit their courtesy resignation(s)
beginning with the members of the Supreme Court."3 Later on, she
abolished the Batasang Pambansa4 and the positions of Prime
Minister and Cabinet 5 under the 1973 Constitution.
Since then, the President has issued a number of executive orders
and directives reorganizing various other government offices, a
number of which, with respect to elected local officials, has been
challenged in this Court, 6 and two of which, with respect to
appointed functionaries, have likewise been questioned herein. 7
On May 28, 1986, the President enacted Executive Order No. 17,
"PRESCRIBING RULES AND REGULATIONS FOR THE IMPLEMENTATION
OF SECTION 2, ARTICLE III OF THE FREEDOM CONSTITUTION."
Executive Order No. 17 recognized the "unnecessary anxiety and
demoralization among the deserving officials and employees" the
ongoing government reorganization had generated, and prescribed
as "grounds for the separation/replacement of personnel," the
following:
SECTION 3.
The following shall be the grounds for separation
replacement of personnel:
1)
Existence of a case for summary dismissal pursuant to Section
40 of the Civil Service Law;

2)
Existence of a probable cause for violation of the Anti-Graft
and Corrupt Practices Act as determined by the Mnistry Head
concerned;

Commissioner Mison addressed several notices to various Customs

officials, in the tenor as follows:
Sir:

3)
Gross incompetence or inefficiency in the discharge of
functions;
4)

Misuse of public office for partisan political purposes;

5)
Any other analogous ground showing that the incumbent is
unfit to remain in the service or his separation/replacement is in the
interest of the service.8
On January 30, 1987, the President promulgated Executive Order No.
127, "REORGANIZING THE MINISTRY OF FINANCE." 9 Among other
offices, Executive Order No. 127 provided for the reorganization of
the Bureau of Customs 10 and prescribed a new staffing pattern
therefor.

Please be informed that the Bureau is now in the process of

implementing the Reorganization Program under Executive Order No.
127.
Pursuant to Section 59 of the same Executive Order, all officers and
employees of the Department of Finance, or the Bureau of Customs
in particular, shall continue to perform their respective duties and
responsibilities in a hold-over capacity, and that those incumbents
whose positions are not carried in the new reorganization pattern, or
who are not re- appointed, shall be deemed separated from the
service.

Three days later, on February 2, 1987, 11 the Filipino people adopted

the new Constitution.

In this connection, we regret to inform you that your services are

hereby terminated as of February 28, 1988. Subject to the normal
clearances, you may receive the retirement benefits to which you
may be entitled under existing laws, rules and regulations.

On January 6, 1988, incumbent Commissioner of Customs Salvador

Mison issued a Memorandum, in the nature of "Guidelines on the
Implementation of Reorganization Executive Orders," 12 prescribing
the procedure in personnel placement. It also provided:

In the meantime, your name will be included in the consolidated list

compiled by the Civil Service Commission so that you may be given
priority for future employment with the Government as the need
arises.

1.
By February 28, 1988, the employees covered by Executive
Order 127 and the grace period extended to the Bureau of Customs
by the President of the Philippines on reorganization shall be:

Sincerely yours,
(Sgd) SALVADOR M. MISON
Commissioner15

a)

informed of their re-appointment, or

b)

offered another position in the same department or agency or

As far as the records will yield, the following were recipients of these
notices:
1.
CESAR DARIO

c)

informed of their termination. 13

xxx

On the same date, Commissioner Mison constituted a Reorganization

Appeals Board charged with adjudicating appeals from removals
under the above Memorandum. 14 On January 26, 1988,

Cesar Dario is the petitioner in G.R. No. 81954; Vicente Feria, Jr., is
the petitioner in G.R. No. 81967; Messrs. Adolfo Caserano Pacifico
Lagleva Julian C. Espiritu, Dennis A. Azarraga Renato de Jesus,

Nicasio C. Gamboa, Mesdames Corazon Rallos Nieves and Felicitacion

R. Geluz Messrs. Leodegario H. Floresca, Subaer Pacasum Ms.
Zenaida Lanaria Mr. Jose B. Ortiz, Ms. Gliceria R. Dolar, Ms. Cornelia
Napa, Pablo B. Santos, Fermin Rodriguez, Ms. Daligay Bautista,
Messrs. Leonardo Jose, Alberto Lontok, Porfirio Tabino Jose Barredo,
Roberto Arnaldo, Ms. Ester Tan, Messrs. Pedro Bakal, Rosario David,
Rodolfo Afuang, Lorenzo Catre,, Ms. Leoncia Catre, and Roberto
Abaca, are the petitioners in G.R. No. 82023; the last 279 16
individuals mentioned are the private respondents in G.R. No. 85310.
As far as the records will likewise reveal, 17 a total of 394 officials
and employees of the Bureau of Customs were given individual
notices of separation. A number supposedly sought reinstatement
with the Reorganization Appeals Board while others went to the Civil
Service Commission. The first thirty-one mentioned above came
directly to this Court.
On June 30, 1988, the Civil Service Commission promulgated its
ruling ordering the reinstatement of the 279 employees, the 279
private respondents in G.R. No. 85310, the dispositive portion of
which reads as follows:
WHEREFORE, it is hereby ordered that:
1.
Appellants be immediately reappointed to positions of
comparable or equivalent rank in the Bureau of Customs without loss
of seniority rights;
2.
Appellants be paid their back salaries reckoned from the dates
of their illegal termination based on the rates under the approved
new staffing pattern but not lower than their former salaries.
This action of the Commission should not, however, be interpreted as
an exoneration of the appellants from any accusation of wrongdoing
and, therefore, their reappointments are without prejudice to:
1.
Proceeding with investigation of appellants with pending
administrative cases, and where investigations have been finished, to
promptly, render the appropriate decisions;

2.
The filing of appropriate administrative complaints against
appellants with derogatory reports or information if evidence so
warrants.
SO ORDERED. 18
On July 15, 1988, Commissioner Mison, represented by the Solicitor
General, filed a motion for reconsideration Acting on the motion, the
Civil Service Commission, on September 20, 1988, denied
reconsideration. 19
On October 20, 1988, Commissioner Mison instituted certiorari
proceedings with this Court, docketed, as above-stated, as G.R. No.
85310 of this Court.
On November 16,1988, the Civil Service Commission further disposed
the appeal (from the resolution of the Reorganization Appeals Board)
of five more employees, holding as follows:
WHEREFORE, it is hereby ordered that:
1.
Appellants be immediately reappointed to positions of
comparable or equivalent rank in the Bureau of Customs without loss
of seniority rights; and
2.
Appellants be paid their back salaries to be reckoned from the
date of their illegal termination based on the rates under the
approved new staffing pattern but not lower than their former
salaries.
This action of the Commission should not, however, be interpreted as
an exoneration of the herein appellants from any accusation of any
wrongdoing and therefore, their reappointments are without
prejudice to:
1.
Proceeding with investigation of appellants with pending
administrative cases, if any, and where investigations have been
finished, to promptly, render the appropriate decisions; and

2.
The filing of appropriate administrative complaints against
appellant with derogatory reports or information, if any, and if
evidence so warrants.
SO ORDERED. 20
On January 6, 1989, Commissioner Mison challenged the Civil Service
Commission's Resolution in this Court; his petitioner has been
docketed herein as G.R. No. 86241. The employees ordered to be
reinstated are Senen Dimaguila, Romeo Arabe, Bemardo
Quintong,Gregorio Reyes, and Romulo Badillo. 21
On June 10, 1988, Republic Act No. 6656, "AN ACT TO PROTECT THE
SECURITY OF TENURE OF CIVIL SERVICE OFFICERS AND EMPLOYEES
IN THE IMPLEMENTATION OF GOVERNMENT REORGANIZATION," 22
was signed into law. Under Section 7, thereof:
Sec. 9. All officers and employees who are found by the Civil Service
Commission to have been separated in violation of the provisions of
this Act, shall be ordered reinstated or reappointed as the case may
be without loss of seniority and shall be entitled to full pay for the
period of separation. Unless also separated for cause, all officers and
employees, including casuals and temporary employees, who have
been separated pursuant to reorganization shall, if entitled thereto,
be paid the appropriate separation pay and retirement and other
benefits under existing laws within ninety (90) days from the date of
the effectivity of their separation or from the date of the receipt of
the resolution of their appeals as the case may be: Provided, That
application for clearance has been filed and no action thereon has
been made by the corresponding department or agency. Those who
are not entitled to said benefits shall be paid a separation gratuity in
the amount equivalent to one (1) month salary for every year of
service. Such separation pay and retirement benefits shall have
priority of payment out of the savings of the department or agency
concerned. 23
On June 23, 1988, Benedicto Amasa and William Dionisio, customs
examiners appointed by Commissioner Mison pursuant to the
ostensible reorganization subject of this controversy, petitioned the

Court to contest the validity of the statute. The petition is docketed

as G.R. No. 83737.
On October 21, 1988, thirty-five more Customs officials whom the
Civil Service Commission had ordered reinstated by its June 30,1988
Resolution filed their own petition to compel the Commissioner of
Customs to comply with the said Resolution. The petition is docketed
as G.R. No. 85335.
On November 29, 1988, we resolved to consolidate all seven
petitions.
On the same date, we resolved to set the matter for hearing on
January 12, 1989. At the said hearing, the parties, represented by
their counsels (a) retired Justice Ruperto Martin; (b) retired Justice
Lino Patajo. (c) former Dean Froilan Bacungan (d) Atty. Lester Escobar
(e) Atty. Faustino Tugade and (f) Atty. Alexander Padilla, presented
their arguments. Solicitor General Francisco Chavez argued on behalf
of the Commissioner of Customs (except in G.R. 85335, in which he
represented the Bureau of Customs and the Civil Service
Commission).lwph1.t Former Senator Ambrosio Padilla also
appeared and argued as amicus curiae Thereafter, we resolved to
require the parties to submit their respective memoranda which they
did in due time.
There is no question that the administration may validly carry out a
government reorganization insofar as these cases are concerned,
the reorganization of the Bureau of Customs by mandate not only
of the Provisional Constitution, supra, but also of the various
Executive Orders decreed by the Chief Executive in her capacity as
sole lawmaking authority under the 1986-1987 revolutionary
government. It should also be noted that under the present
Constitution, there is a recognition, albeit implied, that a government
reorganization may be legitimately undertaken, subject to certain
conditions. 24
The Court understands that the parties are agreed on the validity of a
reorganization per se the only question being, as shall be later seen:
What is the nature and extent of this government reorganization?

The Court disregards the questions raised as to procedure, failure to

exhaust administrative remedies, the standing of certain parties to
sue, 25 and other technical objections, for two reasons, "[b]ecause of
the demands of public interest, including the need for stability in the
public service,"26 and because of the serious implications of these
cases on the administration of the Philippine civil service and the
rights of public servants.
The urgings in G.R. Nos. 85335 and 85310, that the Civil Service
Commission's Resolution dated June 30, 1988 had attained a
character of finality for failure of Commissioner Mison to apply for
judicial review or ask for reconsideration seasonalbly under
Presidential Decree No. 807, 27 or under Republic Act No. 6656, 28 or
under the Constitution, 29 are likewise rejected. The records show
that the Bureau of Customs had until July 15, 1988 to ask for
reconsideration or come to this Court pursuant to Section 39 of
Presidential Decree No. 807. The records likewise show that the
Solicitor General filed a motion for reconsideration on July 15,
1988.30 The Civil Service Commission issued its Resolution denying
reconsideration on September 20, 1988; a copy of this Resolution
was received by the Bureau on September 23, 1988.31 Hence the
Bureau had until October 23, 1988 to elevate the matter on certiorari
to this Court.32 Since the Bureau's petition was filed on October 20,
1988, it was filed on time.
We reject, finally, contentions that the Bureau's petition (in G.R.
85310) raises no jurisdictional questions, and is therefore bereft of
any basis as a petition for certiorari under Rule 65 of the Rules of
Court. 33 We find that the questions raised in Commissioner Mison's
petition (in G.R. 85310) are, indeed, proper for certiorari, if by
"jurisdictional questions" we mean questions having to do with "an
indifferent disregard of the law, arbitrariness and caprice, or omission
to weigh pertinent considerations, a decision arrived at without
rational deliberation, 34 as distinguished from questions that require
"digging into the merits and unearthing errors of judgment 35 which
is the office, on the other hand, of review under Rule 45 of the said
Rules. What cannot be denied is the fact that the act of the Civil
Service Commission of reinstating hundreds of Customs employees
Commissioner Mison had separated, has implications not only on the
entire reorganization process decreed no less than by the Provisional

Constitution, but on the Philippine bureaucracy in general; these

implications are of such a magnitude that it cannot be said that
assuming that the Civil Service Commission erred the Commission
committed a plain "error of judgment" that Aratuc says cannot be
corrected by the extraordinary remedy of certiorari or any special
civil action. We reaffirm the teaching of Aratuc as regards recourse
to this Court with respect to rulings of the Civil Service Commission
which is that judgments of the Commission may be brought to the
Supreme Court through certiorari alone, under Rule 65 of the Rules of
Court.
In Aratuc we declared:
It is once evident from these constitutional and statutory
modifications that there is a definite tendency to enhance and
invigorate the role of the Commission on Elections as the
independent constitutional body charged with the safeguarding of
free, peaceful and honest elections. The framers of the new
Constitution must be presumed to have definite knowledge of what it
means to make the decisions, orders and rulings of the Commission
"subject to review by the Supreme Court'. And since instead of
maintaining that provision intact, it ordained that the Commission's
actuations be instead 'brought to the Supreme Court on certiorari",
We cannot insist that there was no intent to change the nature of the
remedy, considering that the limited scope of certiorari, compared to
a review, is well known in remedial law.36
We observe no fundamental difference between the Commission on
Elections and the Civil Service Commission (or the Commission on
Audit for that matter) in terms of the constitutional intent to leave
the constitutional bodies alone in the enforcement of laws relative to
elections, with respect to the former, and the civil service, with
respect to the latter (or the audit of government accounts, with
respect to the Commission on Audit). As the poll body is the "sole
judge" 37 of all election cases, so is the Civil Service Commission the
single arbiter of all controversies pertaining to the civil service.
It should also be noted that under the new Constitution, as under the
1973 Charter, "any decision, order, or ruling of each Commission may
be brought to the Supreme Court on certiorari," 38 which, as Aratuc

tells us, "technically connotes something less than saying that the
same 'shall be subject to review by the Supreme Court,' " 39 which in
turn suggests an appeal by petition for review under Rule 45.
Therefore, our jurisdiction over cases emanating from the Civil
Service Commission is limited to complaints of lack or excess of
jurisdiction or grave abuse of discretion tantamount to lack or excess
of jurisdiction, complaints that justify certiorari under Rule 65.
While Republic Act No. 6656 states that judgments of the
Commission are "final and executory"40 and hence, unappealable,
under Rule 65, certiorari precisely lies in the absence of an appeal.
41
Accordingly, we accept Commissioner Mison petition (G.R. No. 85310)
which clearly charges the Civil Service Commission with grave abuse
of discretion, a proper subject of certiorari, although it may not have
so stated in explicit terms.
As to charges that the said petition has been filed out of time, we
reiterate that it has been filed seasonably. It is to be stressed that the
Solicitor General had thirty days from September 23, 1988 (the date
the Resolution, dated September 20,1988, of the Civil Service
Commission, denying reconsideration, was received) to commence
the instant certiorari proceedings. As we stated, under the
Constitution, an aggrieved party has thirty days within which to
challenge "any decision, order, or ruling" 42 of the Commission. To
say that the period should be counted from the Solicitor's receipt of
the main Resolution, dated June 30, 1988, is to say that he should not
have asked for reconsideration But to say that is to deny him the
right to contest (by a motion for reconsideration) any ruling, other
than the main decision, when, precisely, the Constitution gives him
such a right. That is also to place him at a "no-win" situation because
if he did not move for a reconsideration, he would have been faulted
for demanding certiorari too early, under the general rule that a
motion for reconsideration should preface a resort to a special civil
action. 43 Hence, we must reckon the thirty-day period from receipt
of the order of denial.
We come to the merits of these cases.

G.R. Nos. 81954, 81967, 82023, and 85335:

The Case for the Employees
The petitioner in G.R. No. 81954, Cesar Dario was one of the Deputy
Commissioners of the Bureau of Customs until his relief on orders of
Commissioner Mison on January 26, 1988. In essence, he questions
the legality of his dismiss, which he alleges was upon the authority of
Section 59 of Executive Order No. 127, supra, hereinbelow
reproduced as follows:
SEC. 59.
New Structure and Pattern. Upon approval of this
Executive Order, the officers and employees of the Ministry shall, in a
holdover capacity, continue to perform their respective duties and
responsibilities and receive the corresponding salaries and benefits
unless in the meantime they are separated from government service
pursuant to Executive Order No. 17 (1986) or Article III of the
Freedom Constitution.
The new position structure and staffing pattern of the Ministry shall
be approved and prescribed by the Minister within one hundred
twenty (120) days from the approval of this Executive Order and the
authorized positions created hereunder shall be filled with regular
appointments by him or by the President, as the case may be. Those
incumbents whose positions are not included therein or who are not
reappointed shall be deemed separated from the service. Those
separated from the service shall receive the retirement benefits to
which they may be entitled under existing laws, rules and
regulations. Otherwise, they shall be paid the equivalent of one
month basic salary for every year of service, or the equivalent
nearest fraction thereof favorable to them on the basis of highest
salary received but in no case shall such payment exceed the
equivalent of 12 months salary.
No court or administrative body shall issue any writ of preliminary
injunction or restraining order to enjoin the separation/replacement
of any officer or employee effected under this Executive Order.44
a provision he claims the Commissioner could not have legally
invoked. He avers that he could not have been legally deemed to be

an "[incumbent] whose [position] [is] not included therein or who [is]

not reappointed"45 to justify his separation from the service. He
contends that neither the Executive Order (under the second
paragraph of the section) nor the staffing pattern proposed by the
Secretary of Finance 46 abolished the office of Deputy Commissioner
of Customs, but, rather, increased it to three. 47 Nor can it be said,
so he further maintains, that he had not been "reappointed" 48
(under
the
second
paragraph
of
the
section)
because
"[[r]eappointment therein presupposes that the position to which it
refers is a new one in lieu of that which has been abolished or
although an existing one, has absorbed that which has been
abolished." 49 He claims, finally, that under the Provisional
Constitution, the power to dismiss public officials without cause
ended on February 25, 1987,50 and that thereafter, public officials
enjoyed security of tenure under the provisions of the 1987
Constitution.51

In his comments, the Commissioner relies on this Court's resolution in

Jose v. Arroyo54 in which the following statement appears in the last
paragraph thereof:

Like Dario Vicente Feria, the petitioner in G.R. No. 81967, was a
Deputy Commissioner at the Bureau until his separation directed by
Commissioner Mison. And like Dario he claims that under the 1987
Constitution, he has acquired security of tenure and that he cannot
be said to be covered by Section 59 of Executive Order No. 127,
having been appointed on April 22, 1986 during the effectivity of
the Provisional Constitution. He adds that under Executive Order No.
39, "ENLARGING THE POWERS AND FUNCTIONS OF THE
COMMISSIONER OF CUSTOMS,"52 the Commissioner of Customs has
the power "[t]o appoint all Bureau personnel, except those appointed
by the President," 53 and that his position, which is that of a
Presidential appointee, is beyond the control of Commissioner Mison
for purposes of reorganization.

For this reason, Mison posits, claims of violation of security of tenure

are allegedly no defense. He further states that the deadline
prescribed by the Provisional Constitution (February 25, 1987) has
been superseded by the 1987 Constitution, specifically, the transitory
provisions thereof, 56 which allows a reorganization thereafter (after
February 25, 1987) as this very Court has so declared in Jose v.
Arroyo. Mison submits that contrary to the employees' argument,
Section 59 of Executive Order No. 127 is applicable (in particular, to
Dario and Feria in the sense that retention in the Bureau, under the
Executive Order, depends on either retention of the position in the
new staffing pattern or reappointment of the incumbent, and since
the dismissed employees had not been reappointed, they had been
considered legally separated. Moreover, Mison proffers that under
Section 59 incumbents are considered on holdover status, "which
means that all those positions were considered vacant." 57 The
Solicitor General denies the applicability of Palma-Fernandez v. De la
Paz 58 because that case supposedly involved a mere transfer and
not a separation. He rejects, finally, the force and effect of Executive
Order Nos. 17 and 39 for the reason that Executive Order No. 17,
which was meant to implement the Provisional Constitution, 59 had
ceased to have force and effect upon the ratification of the 1987
Constitution, and that, under Executive Order No. 39, the dismissals
contemplated were "for cause" while the separations now under

The petitioners in G.R. No. 82023, collectors and examiners in venous

ports of the Philippines, say, on the other hand, that the purpose of
reorganization is to end corruption at the Bureau of Customs and that
since there is no finding that they are guilty of corruption, they
cannot be validly dismissed from the service.
The Case for Commissioner Mison

The contention of petitioner that Executive Order No. 127 is violative

of the provision of the 1987 Constitution guaranteeing career civil
service employees security of tenure overlooks the provisions of
Section 16, Article XVIII (Transitory Provisions) which explicitly
authorize the removal of career civil service employees "not for
cause but as a result of the reorganization pursuant to Proclamation
No. 3 dated March 25, 1986 and the reorganization following the
ratification of this Constitution." By virtue of said provision, the
reorganization of the Bureau of Customs under Executive Order No.
127 may continue even after the ratification of the Constitution, and
career civil service employees may be separated from the service
without cause as a result of such reorganization.55

question were "not for cause" and were a result of government

reorganize organization decreed by Executive Order No. 127. Anent
Republic Act No. 6656, he expresses doubts on the constitutionality
of the grant of retroactivity therein (as regards the reinforcement of
security of tenure) since the new Constitution clearly allows
reorganization after its effectivity.
G.R. Nos. 85310 and 86241
The Position of Commissioner Mison
Commissioner's twin petitions are direct challenges to three rulings
of the Civil Service Commission: (1) the Resolution, dated June 30,
1988, reinstating the 265 customs employees above-stated; (2) the
Resolution, dated September 20, 1988, denying reconsideration; and
(3) the Resolution, dated November 16, 1988, reinstating five
employees. The Commissioner's arguments are as follows:
1.
The ongoing government reorganization is in the nature of a
"progressive" 60 reorganization "impelled by the need to overhaul
the entire government bureaucracy" 61 following the people power
revolution of 1986;

1.
Reorganizations occur where there has
personnel or redundancy of functions; there is
reorganization in question has been carried out
on the contrary, the dismissals now disputed
mere service of notices;

been a reduction in
no showing that the
for either purpose
were carried out by

2.
The current Customs reorganization has not been made
according to Malaca;ang guidelines; information on file with the
Commission shows that Commissioner Mison has been appointing
unqualified personnel;
3.
Jose v. Arroyo, in validating Executive Order No. 127, did not
countenance illegal removals;
4.
Republic Act No. 6656 protects security of tenure in the course
of reorganizations.
The Court's ruling
Reorganization, Fundamental Principles of.
I.

2.
There was faithful compliance by the Bureau of the various
guidelines issued by the President, in particular, as to deliberation,
and selection of personnel for appointment under the new staffing
pattern;
3.
The separated employees have been, under Section 59 of
Executive Order No. 127, on mere holdover standing, "which means
that all positions are declared vacant;" 62
4.
Jose v. Arroyo has declared the validity of Executive Order No.
127 under the transitory provisions of the 1987 Constitution;
5.

Republic Act No. 6656 is of doubtful constitutionality.

The Ruling of the Civil Service Commission

The position of the Civil Service Commission is as follows:

The core provision of law involved is Section 16 Article XVIII, of the

1987 Constitution. We quote:
Sec. 16.
Career civil service employees separated from the
service not for cause but as a result of the reorganization pursuant to
Proclamation No. 3 dated March 25, 1986 and the reorganization
following the ratification of this Constitution shag be entitled to
appropriate separation pay and to retirement and other benefits
accruing to them under the laws of general application in force at the
time of their separation. In lieul thereof, at the option of the
employees, they may be considered for employment in the
Government or in any of its subdivisions, instrumentalities, or
agencies, including government-owned or controlled corporations
and their subsidiaries. This provision also applies to career officers
whose resignation, tendered in line with the existing policy, had been
accepted. 63

The Court considers the above provision critical for two reasons: (1) It
is the only provision in so far as it mentions removals not for cause
that would arguably support the challenged dismissals by mere
notice, and (2) It is the single existing law on reorganization after the
ratification of the 1987 Charter, except Republic Act No. 6656, which
came much later, on June 10, 1988. [Nota been Executive Orders No.
116 (covering the Ministry of Agriculture & Food), 117 (Ministry of
Education, Culture & Sports), 119 (Health), 120 (Tourism), 123 (Social
Welfare & Development), 124 (Public Works & Highways), 125
transportation & Communications), 126 (Labor & Employment), 127
(Finance), 128 (Science & Technology), 129 (Agrarian Reform), 131
(Natural Resources), 132 (Foreign Affairs), and 133 (Trade & Industry)
were all promulgated on January 30,1987, prior to the adoption of the
Constitution on February 2, 1987].64
It is also to be observed that unlike the grants of power to effect
reorganizations under the past Constitutions, the above provision
comes as a mere recognition of the right of the Government to
reorganize its offices, bureaus, and instrumentalities. Under Section
4, Article XVI, of the 1935 Constitution:
Section 4. All officers and employees in the existing Government of
the Philippine Islands shall continue in office until the Congress shall
provide otherwise, but all officers whose appointments are by this
Constitution vested in the President shall vacate their respective
office(s) upon the appointment and qualification of their successors,
if such appointment is made within a period of one year from the
date of the inauguration of the Commonwealth of the Philippines. 65
Under Section 9, Article XVII, of the 1973 Charter:
Section 9. All officials and employees in the existing Government of
the Republic of the Philippines shall continue in office until otherwise
provided by law or decreed by the incumbent President of the
Philippines, but all officials whose appointments are by this
Constitution vested in the Prime Minister shall vacate their respective
offices upon the appointment and qualification of their successors. 66

The Freedom Constitution is, as earlier seen, couched in similar

language:
SECTION 2.
All elective and appointive officials and employees
under the 1973 Constitution shall continue in office until otherwise
provided by proclamation or executive order or upon the
appointment and qualification of their successors, if such is made
within a period of one year from February 25, 1986.67
Other than references to "reorganization following the ratification of
this Constitution," there is no provision for "automatic" vacancies
under the 1987 Constitution.
Invariably, transition periods are characterized by provisions for
"automatic" vacancies. They are dictated by the need to hasten the
passage from the old to the new Constitution free from the "fetters"
of due process and security of tenure.
At this point, we must distinguish removals from separations arising
from abolition of office (not by virtue of the Constitution) as a result
of reorganization carried out by reason of economy or to remove
redundancy of functions. In the latter case, the Government is
obliged to prove good faith.68 In case of removals undertaken to
comply with clear and explicit constitutional mandates, the
Government is not hard put to prove anything, plainly and simply
because the Constitution allows it.
Evidently, the question is whether or not Section 16 of Article XVIII of
the 1987 Constitution is a grant of a license upon the Government to
remove career public officials it could have validly done under an
"automatic" vacancy-authority and to remove them without rhyme or
reason.
As we have seen, since 1935, transition periods have been
characterized by provisions for "automatic" vacancies. We take the
silence of the 1987 Constitution on this matter as a restraint upon
the Government to dismiss public servants at a moment's notice.

What is, indeed, apparent is the fact that if the present Charter
envisioned an "automatic" vacancy, it should have said so in clearer
terms, as its 1935, 1973, and 1986 counterparts had so stated.
The constitutional "lapse" means either one of two things: (1) The
Constitution meant to continue the reorganization under the prior
Charter (of the Revolutionary Government), in the sense that the
latter provides for "automatic" vacancies, or (2) It meant to put a
stop to those 'automatic" vacancies. By itself, however, it is
ambiguous, referring as it does to two stages of reorganization the
first, to its conferment or authorization under Proclamation No. 3
(Freedom Charter) and the second, to its implementation on its
effectivity date (February 2, 1987).lwph1.t But as we asserted, if
the intent of Section 16 of Article XVIII of the 1987 Constitution were
to extend the effects of reorganize tion under the Freedom
Constitution, it should have said so in clear terms. It is illogical why it
should talk of two phases of reorganization when it could have simply
acknowledged the continuing effect of the first reorganization.
Second, plainly the concern of Section 16 is to ensure compensation
for victims" of constitutional revamps whether under the Freedom
or existing Constitution and only secondarily and impliedly, to
allow reorganization. We turn to the records of the Constitutional
Commission:
INQUIRY OF MR. PADILLA
On the query of Mr. Padilla whether there is a need for a specific
reference to Proclamation No. 3 and not merely state "result of the
reorganization following the ratification of this Constitution', Mr.
Suarez, on behalf of the Committee, replied that it is necessary,
inasmuch as there are two stages of reorganization covered by the
Section.
Mr. Padilla pointed out that since the proposal of the Commission on
Government Reorganization have not been implemented yet, it would
be better to use the phrase "reorganization before or after the
ratification of the Constitution' to simplify the Section. Mr. Suarez
instead suggested the phrase "as a result of the reorganization
effected before or after the ratification of the Constitution' on the

understanding that the provision would apply to employees

terminated because of the reorganization pursuant to Proclamation
No. 3 and even those affected by the reorganization during the
Marcos regime. Additionally, Mr. Suarez pointed out that it is also for
this reason that the Committee specified the two Constitutions the
Freedom Constitution and the 1986 [1987] Constitution. 69
Simply, the provision benefits career civil service employees
separated from the service. And the separation contemplated must
be due to or the result of (1) the reorganization pursuant to
Proclamation No. 3 dated March 25, 1986, (2) the reorganization from
February 2, 1987, and (3) the resignations of career officers tendered
in line with the existing policy and which resignations have been
accepted. The phrase "not for cause" is clearly and primarily
exclusionary, to exclude those career civil service employees
separated "for cause." In other words, in order to be entitled to the
benefits granted under Section 16 of Article XVIII of the Constitution
of 1987, two requisites, one negative and the other positive, must
concur, to wit:
1.

the separation must not be for cause, and

2.
the separation must be due to any of the three situations
mentioned above.
By its terms, the authority to remove public officials under the
Provisional Constitution ended on February 25, 1987, advanced by
jurisprudence to February 2, 1987. 70 It Can only mean, then, that
whatever reorganization is taking place is upon the authority of the
present Charter, and necessarily, upon the mantle of its provisions
and safeguards. Hence, it can not be legitimately stated that we are
merely continuing what the revolutionary Constitution of the
Revolutionary Government had started. We are through with
reorganization under the Freedom Constitution the first stage. We
are on the second stage that inferred from the provisions of
Section 16 of Article XVIII of the permanent basic document.
This is confirmed not only by the deliberations of the Constitutional
Commission, supra, but is apparent from the Charter's own words. It
also warrants our holding in Esguerra and Palma-Fernandez, in which

we categorically declared that after February 2, 1987, incumbent

officials and employees have acquired security of tenure, which is not
a deterrent against separation by reorganization under the quondam
fundamental law.
Finally, there is the concern of the State to ensure that this
reorganization is no "purge" like the execrated reorganizations under
martial rule. And, of course, we also have the democratic character
of the Charter itself.
Commissioner Mison would have had a point, insofar as he contends
that the reorganization is open-ended ("progressive"), had it been a
reorganization under the revolutionary authority, specifically of the
Provisional Constitution. For then, the power to remove government
employees would have been truly wide ranging and limitless, not
only because Proclamation No. 3 permitted it, but because of the
nature of revolutionary authority itself, its totalitarian tendencies,
and the monopoly of power in the men and women who wield it.
What must be understood, however, is that notwithstanding her
immense revolutionary powers, the President was, nevertheless,
magnanimous in her rule. This is apparent from Executive Order No.
17, which established safeguards against the strong arm and ruthless
propensity that accompanies reorganizations notwithstanding the
fact that removals arising therefrom were "not for cause," and in
spite of the fact that such removals would have been valid and
unquestionable. Despite that, the Chief Executive saw, as we said,
the "unnecessary anxiety and demoralization" in the government
rank and file that reorganization was causing, and prescribed
guidelines for personnel action. Specifically, she said on May 28,
1986:
WHEREAS, in order to obviate unnecessary anxiety and
demoralization among the deserving officials and employees,
particularly in the career civil service, it is necessary to prescribe the
rules and regulations for implementing the said constitutional
provision to protect career civil servants whose qualifications and
performance meet the standards of service demanded by the New
Government, and to ensure that only those found corrupt, inefficient
and undeserving are separated from the government service; 71

Noteworthy is the injunction embodied in the Executive Order that

dismissals should be made on the basis of findings of inefficiency,
graft, and unfitness to render public service.*
The President's Memorandum of October
furthermore be considered. We quote, in part:

14,

1987

should

Further to the Memorandum dated October 2, 1987 on the same

subject, I have ordered that there will be no further layoffs this year
of personnel as a result of the government reorganization. 72
Assuming, then, that this reorganization allows removals "not for
cause" in a manner that would have been permissible in a
revolutionary setting as Commissioner Mison so purports, it would
seem that the Commissioner would have been powerless, in any
event, to order dismissals at the Customs Bureau left and right.
Hence, even if we accepted his "progressive" reorganization theory,
he would still have to come to terms with the Chief Executive's
subsequent directives moderating the revolutionary authority's
plenary power to separate government officials and employees.
Reorganization under the 1987 Constitution, Nature, Extent, and
Limitations of; Jose v. Arroyo, clarified.
The controversy seems to be that we have, ourselves, supposedly
extended the effects of government reorganization under the
Provisional Constitution to the regime of the 1987 Constitution. Jose
v. Arroyo73 is said to be the authority for this argument. Evidently, if
Arroyo indeed so ruled, Arroyo would be inconsistent with the earlier
pronouncement of Esguerra and the later holding of PalmaFernandez. The question, however, is: Did Arroyo, in fact, extend the
effects of reorganization under the revolutionary Charter to the era of
the new Constitution?
There are a few points about Arroyo that have to be explained. First,
the opinion expressed therein that "[b]y virtue of said provision the
reorganization of the Bureau of Customs under Executive Order No.
127 may continue even after the ratification of this constitution and

career civil service employees may be separated from the service

without cause as a result of such reorganization" 74 is in the nature
of an obiter dictum. We dismissed Jose's petition 75 primarily
because it was "clearly premature, speculative, and purely
anticipatory, based merely on newspaper reports which do not show
any direct or threatened injury," 76 it appearing that the
reorganization of the Bureau of Customs had not been, then, set in
motion. Jose therefore had no cause for complaint, which was enough
basis to dismiss the petition. The remark anent separation "without
cause" was therefore not necessary for the disposition of the case. In
Morales v. Parades,77 it was held that an obiter dictum "lacks the
force of an adjudication and should not ordinarily be regarded as
such."78
Secondly, Arroyo is an unsigned resolution while Palma Fernandez is
a full-blown decision, although both are en banc cases. While a
resolution of the Court is no less forceful than a decision, the latter
has a special weight.
Thirdly, Palma-Fernandez v. De la Paz comes as
v. Arroyo was promulgated on August 11,
Fernandez was decided on August 31, 1987.)
that a later judgment supersedes a prior
inconsistency.

a later doctrine. (Jose

1987 while PalmaIt is well-established
one in case of an

As we have suggested, the transitory provisions of the 1987

Constitution allude to two stages of the reorganization, the first stage
being the reorganization under Proclamation No. 3 which had
already been consummated the second stage being that adverted
to in the transitory provisions themselves which is underway.
Hence, when we spoke, in Arroyo, of reorganization after the
effectivity of the new Constitution, we referred to the second stage of
the reorganization. Accordingly, we cannot be said to have carried
over reorganization under the Freedom Constitution to its 1987
counterpart.
Finally, Arroyo is not necessarily incompatible with Palma-Fernandez
(or Esguerra).

As we have demonstrated, reorganization under the aegis of the

1987 Constitution is not as stern as reorganization under the prior
Charter. Whereas the latter, sans the President's subsequently
imposed constraints, envisioned a purgation, the same cannot be
said of the reorganization inferred under the new Constitution
because, precisely, the new Constitution seeks to usher in a
democratic regime. But even if we concede ex gratia argumenti that
Section 16 is an exception to due process and no-removal-"except for
cause provided by law" principles enshrined in the very same 1987
Constitution, 79 which may possibly justify removals "not for cause,"
there is no contradiction in terms here because, while the former
Constitution left the axe to fall where it might, the present organic
act requires that removals "not for cause" must be as a result of
reorganization. As we observed, the Constitution does not provide for
"automatic" vacancies. It must also pass the test of good faith a
test not obviously required under the revolutionary government
formerly prevailing, but a test well-established in democratic
societies and in this government under a democratic Charter.
When, therefore, Arroyo permitted a reorganization under Executive
Order No. 127 after the ratification of the 1987 Constitution, Arroyo
permitted a reorganization provided that it is done in good faith.
Otherwise, security of tenure would be an insuperable implement. 80
Reorganizations in this jurisdiction have been regarded as valid
provided they are pursued in good faith. 81 As a general rule, a
reorganization is carried out in "good faith" if it is for the purpose of
economy or to make bureaucracy more efficient. In that event, no
dismissal (in case of a dismissal) or separation actually occurs
because the position itself ceases to exist. And in that case, security
of tenure would not be a Chinese wall. Be that as it may, if the
"abolition," which is nothing else but a separation or removal, is done
for political reasons or purposely to defeat sty of tenure, or otherwise
not in good faith, no valid "abolition' takes place and whatever
"abolition' is done, is void ab initio. There is an invalid "abolition" as
where there is merely a change of nomenclature of positions, 82 or
where claims of economy are belied by the existence of ample funds.
83

It is to be stressed that by predisposing a reorganization to the

yardstick of good faith, we are not, as a consequence, imposing a
"cause" for restructuring. Retrenchment in the course of a
reorganization in good faith is still removal "not for cause," if by
"cause" we refer to "grounds" or conditions that call for disciplinary
action.**
Good faith, as a component of a reorganization under a constitutional
regime, is judged from the facts of each case. However, under
Republic Act No. 6656, we are told:
SEC. 2.No officer or employee in the career service shall be removed
except for a valid cause and after due notice and hearing. A valid
cause for removal exists when, pursuant to a bona fide
reorganization, a position has been abolished or rendered redundant
or there is a need to merge, divide, or consolidate positions in order
to meet the exigencies of the service, or other lawful causes allowed
by the Civil Service Law. The existence of any or some of the
following circumstances may be considered as evidence of bad faith
in the removals made as a result of reorganization, giving rise to a
claim for reinstatement or reappointment by an aggrieved party: (a)
Where there is a significant increase in the number of positions in the
new staffing pattern of the department or agency concerned; (b)
Where an office is abolished and another performing substantially the
same functions is created; (c) Where incumbents are replaced by
those less qualified in terms of status of appointment, performance
and merit; (d) Where there is a reclassification of offices in the
department or agency concerned and the reclassified offices perform
substantially the same functions as the original offices; (e) Where the
removal violates the order of separation provided in Section 3 hereof.
84
It is in light hereof that we take up questions about Commissioner
Mison's good faith, or lack of it.
Reorganization of the Bureau of Customs,
Lack of Good Faith in.
The Court finds that after February 2, 1987 no perceptible
restructuring of the Customs hierarchy except for the change of

personnel has occurred, which would have justified (an things

being equal) the contested dismisses. The contention that the
staffing pattern at the Bureau (which would have furnished a
justification for a personnel movement) is the same s pattern
prescribed by Section 34 of Executive Order No. 127 already
prevailing when Commissioner Mison took over the Customs helm,
has not been successfully contradicted 85 There is no showing that
legitimate structural changes have been made or a reorganization
actually undertaken, for that matter at the Bureau since
Commissioner Mison assumed office, which would have validly
prompted him to hire and fire employees. There can therefore be no
actual reorganization to speak of, in the sense, say, of reduction of
personnel, consolidation of offices, or abolition thereof by reason of
economy or redundancy of functions, but a revamp of personnel pure
and simple.
The records indeed show that Commissioner Mison separated about
394 Customs personnel but replaced them with 522 as of August 18,
1988. 86 This betrays a clear intent to "pack" the Bureau of Customs.
He did so, furthermore, in defiance of the President's directive to halt
further layoffs as a consequence of reorganization. 87 Finally, he was
aware that layoffs should observe the procedure laid down by
Executive Order No. 17.
We are not, of course, striking down Executive Order No. 127 for
repugnancy to the Constitution. While the act is valid, still and all, the
means with which it was implemented is not. 88
Executive Order No. 127, Specific Case of.
With respect to Executive Order No. 127, Commissioner Mison
submits that under Section 59 thereof, "[t]hose incumbents whose
positions are not included therein or who are not reappointed shall be
deemed separated from the service." He submits that because the
394 removed personnel have not been "reappointed," they are
considered terminated. To begin with, the Commissioner's appointing
power is subject to the provisions of Executive Order No. 39. Under
Executive Order No. 39, the Commissioner of Customs may "appoint
all Bureau personnel, except those appointed by the President." 89

Accordingly, with respect to Deputy Commissioners Cesar Dario and

Vicente Feria, Jr., Commissioner Mison could not have validly
terminated them, they being Presidential appointees.
Secondly, and as we have asserted, Section 59 has been rendered
inoperative according to our holding in Palma-Fernandez.
That Customs employees, under Section 59 of Executive Order No.
127 had been on a mere holdover status cannot mean that the
positions held by them had become vacant. In Palma-Fernandez, we
said in no uncertain terms:
The argument that, on the basis of this provision, petitioner's term of
office ended on 30 January 1987 and that she continued in the
performance of her duties merely in a hold over capacity and could
be transferred to another position without violating any of her legal
rights, is untenable. The occupancy of a position in a hold-over
capacity was conceived to facilitate reorganization and would have
lapsed on 25 February 1987 (under the Provisional Constitution), but
advanced to February 2, 1987 when the 1987 Constitution became
effective (De Leon. et al., vs. Hon. Benjamin B. Esquerra, et. al., G.R.
No. 78059, 31 August 1987). After the said date the provisions of the
latter on security of tenure govern. 90
It should be seen, finally, that we are not barring Commissioner
Mison from carrying out a reorganization under the transitory
provisions of the 1987 Constitution. But such a reorganization should
be subject to the criterion of good faith.
Resume.
In resume, we restate as follows:
1.
The President could have validly removed government
employees, elected or appointed, without cause but only before the
effectivity of the 1987 Constitution on February 2, 1987 (De Leon v.
Esguerra, supra; Palma-Fernandez vs. De la Paz, supra); in this
connection, Section 59 (on non-reappointment of incumbents) of
Executive Order No. 127 cannot be a basis for termination;

2.
In such a case, dismissed employees shall be paid separation
and retirement benefits or upon their option be given reemployment
opportunities (CONST. [1987], art. XVIII, sec. 16; Rep. Act No. 6656,
sec. 9);
3.
From February 2, 1987, the State does not lose the right to
reorganize the Government resulting in the separation of career civil
service employees [CONST. (1987), supra] provided, that such a
reorganization is made in good faith. (Rep. Act No. 6656, supra.)
G.R. No. 83737
This disposition also resolves G.R. No. 83737. As we have indicated,
G.R. No. 83737 is a challenge to the validity of Republic Act No. 6656.
In brief, it is argued that the Act, insofar as it strengthens security of
tenure 91 and as far as it provides for a retroactive effect, 92 runs
counter to the transitory provisions of the new Constitution on
removals not for cause.
It can be seen that the Act, insofar as it provides for reinstatament of
employees separated without "a valid cause and after due notice and
hearing" 93 is not contrary to the transitory provisions of the new
Constitution. The Court reiterates that although the Charter's
transitory provisions mention separations "not for cause,"
separations thereunder must nevertheless be on account of a valid
reorganization and which do not come about automatically.
Otherwise, security of tenure may be invoked. Moreover, it can be
seen that the statute itself recognizes removals without cause.
However, it also acknowledges the possibility of the leadership using
the artifice of reorganization to frustrate security of tenure. For this
reason, it has installed safeguards. There is nothing unconstitutional
about the Act.
We recognize the injury Commissioner Mison's replacements would
sustain. We also commisserate with them. But our concern is the
greater wrong inflicted on the dismissed employees on account of
their regal separation from the civil service.
WHEREFORE, THE RESOLUTIONS OF THE CIVIL SERVICE COMMISSION,
DATED JUNE 30, 1988, SEPTEMBER 20, 1988, NOVEMBER 16, 1988,

INVOLVED IN G.R. NOS. 85310, 85335, AND 86241, AND MAY 8, 1989,
INVOLVED IN G.R. NO. 85310, ARE AFFIRMED.
THE PETITIONS IN G.R. NOS. 81954, 81967, 82023, AND 85335 ARE
GRANTED. THE PETITIONS IN G.R. NOS. 83737, 85310 AND 86241
ARE DISMISSED.
THE COMMISSIONER OF CUSTOMS IS ORDERED TO REINSTATE THE
EMPLOYEES SEPARATED AS A RESULT OF HIS NOTICES DATED
JANUARY 26, 1988.
THE EMPLOYEES WHOM COMMISSIONER MISON MAY HAVE
APPOINTED AS REPLACEMENTS ARE ORDERED TO VACATE THEIR
POSTS SUBJECT TO THE PAYMENT OF WHATEVER BENEFITS THAT MAY
BE PROVIDED BY LAW.
NO COSTS.
IT IS SO ORDERED.

[G.R. No. 152845. August 5, 2003]

DRIANITA BAGAOISAN, FELY MADRIAGA, SHIRLY TAGABAN,
RICARDO SARANDI, SUSAN IMPERIAL, BENJAMIN DEMDEM,
RODOLFO DAGA, EDGARDO BACLIG, GREGORIO LABAYAN,
HILARIO JEREZ, and MARIA CORAZON CUANANG, petitioners,
vs. NATIONAL TOBACCO ADMINISTRATION, represented by
ANTONIO DE GUZMAN and PERLITA BAULA, respondents.
VITUG, J.:
President Joseph Estrada issued on 30 September 1998 Executive
Order No. 29, entitled Mandating the Streamlining of the National
Tobacco Administration (NTA), a government agency under the
Department of Agriculture. The order was followed by another
issuance, on 27 October 1998, by President Estrada of Executive
Order No. 36, amending Executive Order No. 29, insofar as the new
staffing pattern was concerned, by increasing from four hundred
(400) to not exceeding seven hundred fifty (750) the positions
affected thereby. In compliance therewith, the NTA prepared and
adopted a new Organization Structure and Staffing Pattern (OSSP)
which, on 29 October 1998, was submitted to the Office of the
President.
On 11 November 1998, the rank and file employees of NTA Batac,
among whom included herein petitioners, filed a letter-appeal with
the Civil Service Commission and sought its assistance in recalling
the OSSP. On 04 December 1998, the OSSP was approved by the
Department of Budget and Management (DBM) subject to certain
revisions. On even date, the NTA created a placement committee to
assist the appointing authority in the selection and placement of
permanent personnel in the revised OSSP. The results of the
evaluation by the committee on the individual qualifications of
applicants to the positions in the new OSSP were then disseminated
and posted at the central and provincial offices of the NTA.

On 10 June 1996, petitioners, all occupying different positions at the

NTA office in Batac, Ilocos Norte, received individual notices of
termination of their employment with the NTA effective thirty (30)
days from receipt thereof. Finding themselves without any immediate
relief from their dismissal from the service, petitioners filed a petition
for certiorari, prohibition and mandamus, with prayer for preliminary
mandatory injunction and/or temporary restraining order, with the
Regional Trial Court (RTC) of Batac, Ilocos Norte, and prayed -

first refusal to appointments/reappointments in the new Organization

Structure And Staffing Pattern (OSSP) of respondent NTA.

1) that a restraining order be immediately issued enjoining the

respondents from enforcing the notice of termination addressed
individually to the petitioners and/or from committing further acts of
dispossession and/or ousting the petitioners from their respective
offices;

IV. Whether or not the validity of E.O. Nos. 29 and 36 can be put in
issue in the instant case/appeal.[2]

2) that a writ of preliminary injunction be issued against the

respondents, commanding them to maintain the status quo to
protect the rights of the petitioners pending the determination of the
validity of the implementation of their dismissal from the service; and

Petitioners went to this Court to assail the decision of the Court of

Appeals, contending that -

3) that, after trial on the merits, judgment be rendered declaring the

notice of termination of the petitioners illegal and the reorganization
null and void and ordering their reinstatement with backwages, if
applicable, commanding the respondents to desist from further
terminating their services, and making the injunction permanent.[1]
The RTC, on 09 September 2000, ordered the NTA to appoint
petitioners in the new OSSP to positions similar or comparable to
their respective former assignments. A motion for reconsideration
filed by the NTA was denied by the trial court in its order of 28
February 2001. Thereupon, the NTA filed an appeal with the Court of
Appeals, raising the following issues:
I. Whether or not respondents submitted evidence as proof that
petitioners, individually, were not the best qualified and most
deserving among the incumbent applicant-employees.
II. Whether or not incumbent permanent employees, including herein
petitioners, automatically enjoy a preferential right and the right of

III. Whether or not respondent NTA in implementing the mandated

reorganization pursuant to E.O. No. 29, as amended by E.O. No. 36,
strictly adhere to the implementing rules on reorganization,
particularly RA 6656 and of the Civil Service Commission Rules on
Government Reorganization.

On 20 February 2002, the appellate court rendered a decision

reversing and setting aside the assailed orders of the trial court.

I. The Court of Appeals erred in making a finding that went beyond

the issues of the case and which are contrary to those of the trial
court and that it overlooked certain relevant facts not disputed by the
parties and which, if properly considered, would justify a different
conclusion;
II. The Court of Appeals erred in upholding Executive Order Nos. 29
and 36 of the Office of the President which are mere administrative
issuances which do not have the force and effect of a law to warrant
abolition of positions and/or effecting total reorganization;
III. The Court of Appeals erred in holding that petitioners removal
from the service is in accordance with law;
IV. The Court of Appeals erred in holding that respondent NTA was not
guilty of bad faith in the termination of the services of petitioners;
(and)
V. The Court of Appeals erred in ignoring case law/jurisprudence in
the abolition of an office.[3]

In its resolution of 10 July 2002, the Court required the NTA to file its
comment on the petition. On 18 November 2002, after the NTA had
filed its comment of 23 September 2002, the Court issued its
resolution denying the petition for failure of petitioners to sufficiently
show any reversible error on the part of the appellate court in its
challenged decision so as to warrant the exercise by this Court of its
discretionary appellate jurisdiction. A motion for reconsideration filed
by petitioners was denied in the Courts resolution of 20 January
2002.
On 21 February 2003, petitioners submitted a Motion to Admit
Petition For En Banc Resolution of the case allegedly to address a
basic question, i.e., the legal and constitutional issue on whether the
NTA may be reorganized by an executive fiat, not by legislative
action.[4] In their Petition for an En Banc Resolution petitioners would
have it that 1. The Court of Appeals decision upholding the reorganization of the
National Tobacco Administration sets a dangerous precedent in that:
a) A mere Executive Order issued by the Office of the President and
procured by a government functionary would have the effect of a
blanket authority to reorganize a bureau, office or agency attached to
the various executive departments;
b) The President of the Philippines would have the plenary power to
reorganize the entire government Bureaucracy through the issuance
of an Executive Order, an administrative issuance without the benefit
of due deliberation, debate and discussion of members of both
chambers of the Congress of the Philippines;
c) The right to security of tenure to a career position created by law
or statute would be defeated by the mere adoption of an
Organizational Structure and Staffing Pattern issued pursuant to an
Executive Order which is not a law and could thus not abolish an
office created by law;
2. The case law on abolition of an office would be disregarded,
ignored and abandoned if the Court of Appeals decision subject
matter of this Petition would remain undisturbed and untouched. In

other words, previous doctrines and precedents of this Highest Court

would in effect be reversed and/or modified with the Court of Appeals
judgment, should it remain unchallenged.
3. Section 4 of Executive Order No. 245 dated July 24, 1987 (Annex
D, Petition), issued by the Revolutionary government of former
President Corazon Aquino, and the law creating NTA, which provides
that the governing body of NTA is the Board of Directors, would be
rendered meaningless, ineffective and a dead letter law because the
challenged NTA reorganization which was erroneously upheld by the
Court of Appeals was adopted and implemented by then NTA
Administrator Antonio de Guzman without the corresponding
authority from the Board of Directors as mandated therein. In brief,
the reorganization is an ultra vires act of the NTA Administrator.
4. The challenged Executive Order No. 29 issued by former President
Joseph Estrada but unsigned by then Executive Secretary Ronaldo
Zamora would in effect be erroneously upheld and given legal effect
as to supersede, amend and/or modify Executive Order No. 245, a
law issued during the Freedom Constitution of President Corazon
Aquino. In brief, a mere executive order would amend, supersede
and/or render ineffective a law or statute.[5]
In order to allow the parties a full opportunity to ventilate their views
on the matter, the Court ultimately resolved to hear the parties in
oral argument. Essentially, the core question raised by them is
whether or not the President, through the issuance of an executive
order, can validly carry out the reorganization of the NTA.
Notwithstanding the apparent procedural lapse on the part of
petitioner to implead the Office of the President as party respondent
pursuant to Section 7, Rule 3, of the 1997 Revised Rules of Civil
Procedure, [6] this Court resolved to rule on the merits of the
petition.
Buklod ng Kawaning EIIB vs. Zamora[7] ruled that the President,
based on existing laws, had the authority to carry out a
reorganization in any branch or agency of the executive department.
In said case, Buklod ng Kawaning EIIB challenged the issuance, and
sought the nullification, of Executive Order No. 191 (Deactivation of

the Economic Intelligence and Investigation Bureau) and Executive

Order No. 223 (Supplementary Executive Order No. 191 on the
Deactivation of the Economic Intelligence and Investigation Bureau
and for Other Matters) on the ground that they were issued by the
President with grave abuse of discretion and in violation of their
constitutional right to security of tenure. The Court explained:
The general rule has always been that the power to abolish a public
office is lodged with the legislature. This proceeds from the legal
precept that the power to create includes the power to destroy. A
public office is either created by the Constitution, by statute, or by
authority of law. Thus, except where the office was created by the
Constitution itself, it may be abolished by the same legislature that
brought it into existence.
The exception, however, is that as far as bureaus, agencies or offices
in the executive department are concerned, the Presidents power of
control may justify him to inactivate the functions of a particular
office, or certain laws may grant him the broad authority to carry out
reorganization measures. The case in point is Larin v. Executive
Secretary [280 SCRA 713]. In this case, it was argued that there is no
law which empowers the President to reorganize the BIR. In
decreeing otherwise, this Court sustained the following legal basis,
thus:
`Initially, it is argued that there is no law yet which empowers the
President to issue E.O. No. 132 or to reorganize the BIR.
`We do not agree.

down, phasing out or abolition of the activities shall be effected

pursuant to Circulars or Orders issued for the purpose by the Office of
the President.
`Said provision clearly mentions the acts of `scaling down, phasing
out and abolition of offices only and does not cover the creation of
offices or transfer of functions. Nevertheless, the act of creating and
decentralizing is included in the subsequent provision of Section 62
which provides that:
``Sec. 62. Unauthorized organizational changes. Unless otherwise
created by law or directed by the President of the Philippines, no
organizational unit or changes in key positions in any department or
agency shall be authorized in their respective organization structures
and be funded from appropriations by this Act.
`The foregoing provision evidently shows that the President is
authorized to effect organizational changes including the creation of
offices in the department or agency concerned.
`x x x x x x
`Another legal basis of E.O. No. 132 is Section 20, Book III of E.O. No.
292 which states:
``Sec. 20. Residual Powers. Unless Congress provides otherwise, the
President shall exercise such other powers and functions vested in
the President which are provided for under the laws and which are
not specifically enumerated above or which are not delegated by the
President in accordance with law.

`x x x x x x
`Section 48 of R.A. 7645 provides that:
``Sec. 48. Scaling Down and Phase Out of Activities of Agencies
Within the Executive Branch. The heads of departments, bureaus and
offices and agencies are hereby directed to identify their respective
activities which are no longer essential in the delivery of public
services and which may be scaled down, phased out or abolished,
subject to civil service rules and regulations. x x x. Actual scaling

`This provision speaks of such other powers vested in the President

under the law. What law then gives him the power to reorganize? It is
Presidential Decree No. 1772 which amended Presidential Decree No.
1416. These decrees expressly grant the President of the Philippines
the continuing authority to reorganize the national government,
which includes the power to group, consolidate bureaus and
agencies, to abolish offices, to transfer functions, to create and
classify functions, services and activities and to standardize salaries
and materials. The validity of these two decrees are unquestionable.

The 1987 Constitution clearly provides that `all laws, decrees,

executive orders, proclamations, letter of instructions and other
executive issuances not inconsistent with this Constitution shall
remain operative until amended, repealed or revoked. So far, there is
yet no law amending or repealing said decrees.
Now, let us take a look at the assailed executive order.
In the whereas clause of E.O. No. 191, former President Estrada
anchored his authority to deactivate EIIB on Section 77 of Republic
Act 8745 (FY 1999 General Appropriations Act), a provision similar to
Section 62 of R.A. 7645 quoted in Larin, thus:
`Sec. 77. Organized Changes. Unless otherwise provided by law or
directed by the President of the Philippines, no changes in key
positions or organizational units in any department or agency shall
be authorized in their respective organizational structures and
funded from appropriations provided by this Act.
We adhere to the x x x ruling in Larin that this provision recognizes
the authority of the President to effect organizational changes in the
department or agency under the executive structure. Such a ruling
further finds support in Section 78 of Republic Act No. 8760. Under
this law, the heads of departments, bureaus, offices and agencies
and other entities in the Executive Branch are directed (a) to conduct
a comprehensive review of this respective mandates, missions,
objectives, functions, programs, projects, activities and systems and
procedures; (b) identify activities which are no longer essential in the
delivery of public services and which may be scaled down, phasedout or abolished; and (c) adopt measures that will result in the
streamlined organization and improved overall performance of their
respective agencies. Section 78 ends up with the mandate that the
actual streamlining and productivity improvement in agency
organization and operation shall be effected pursuant to Circulars or
Orders issued for the purpose by the Office of the President. The law
has spoken clearly. We are left only with the duty to sustain.
But of course, the list of legal basis authorizing the President to
reorganize any department or agency in the executive branch does
not have to end here. We must not lose sight of the very source of

the power that which constitutes an express grant of power. Under

Section 31, Book III of Executive Order No. 292 (otherwise known as
the Administrative Code of 1987), the President, subject to the policy
in the Executive Office and in order to achieve simplicity, economy
and efficiency, shall have the continuing authority to reorganize the
administrative structure of the Office of the President. For this
purpose, he may transfer the functions of other Departments or
Agencies to the Office of the President. In Canonizado vs. Aguirre
[323 SCRA 312], we ruled that reorganization involves the reduction
of personnel, consolidation of offices, or abolition thereof by reason
of economy or redundancy of functions. It takes place when there is
an alteration of the existing structure of government offices or units
therein, including the lines of control, authority and responsibility
between them. The EIIB is a bureau attached to the Department of
Finance. It falls under the Office of the President. Hence, it is subject
to the Presidents continuing authority to reorganize.

It having been duly established that the President has the authority
to carry out reorganization in any branch or agency of the executive
department, what is then left for us to resolve is whether or not the
reorganization is valid. In this jurisdiction, reorganizations have been
regarded as valid provided they are pursued in good faith.
Reorganization is carried out in `good faith if it is for the purpose of
economy or to make bureaucracy more efficient. Pertinently, Republic
Act No. 6656 provides for the circumstances which may be
considered as evidence of bad faith in the removal of civil service
employees made as a result of reorganization, to wit: (a) where there
is a significant increase in the number of positions in the new staffing
pattern of the department or agency concerned; (b) where an office
is abolished and another performing substantially the same functions
is created; (c) where incumbents are replaced by those less qualified
in terms of status of appointment, performance and merit; (d) where
there is a classification of offices in the department or agency
concerned and the reclassified offices perform substantially the same
functions as the original offices, and (e) where the removal violates
the order of separation.[8]
The Court of Appeals, in its now assailed decision, has found no
evidence of bad faith on the part of the NTA; thus -

In the case at bar, we find no evidence that the respondents

committed bad faith in issuing the notices of non-appointment to the
petitioners.
Firstly, the number of positions in the new staffing pattern did not
increase. Rather, it decreased from 1,125 positions to 750. It is thus
natural that ones position may be lost through the removal or
abolition of an office.
Secondly, the petitioners failed to specifically show which offices
were abolished and the new ones that were created performing
substantially the same functions.
Thirdly, the petitioners likewise failed to prove that less qualified
employees were appointed to the positions to which they applied.
x x x x x x x x x.
Fourthly, the preference stated in Section 4 of R.A. 6656, only means
that old employees should be considered first, but it does not
necessarily follow that they should then automatically be appointed.
This is because the law does not preclude the infusion of new blood,
younger dynamism, or necessary talents into the government
service, provided that the acts of the appointing power are bonafide
for the best interest of the public service and the person chosen has
the needed qualifications.[9]
These findings of the appellate court are basically factual which this
Court must respect and be held bound.
It is important to emphasize that the questioned Executive Orders
No. 29 and No. 36 have not abolished the National Tobacco
Administration but merely mandated its reorganization through the
streamlining or reduction of its personnel. Article VII, Section 17,[10]
of the Constitution, expressly grants the President control of all
executive departments, bureaus, agencies and offices which may
justify an executive action to inactivate the functions of a particular
office or to carry out reorganization measures under a broad
authority of law.[11] Section 78 of the General Provisions of Republic

Act No. 8522 (General Appropriations Act of FY 1998) has decreed

that the President may direct changes in the organization and key
positions in any department, bureau or agency pursuant to Article VI,
Section 25,[12] of the Constitution, which grants to the Executive
Department the authority to recommend the budget necessary for its
operation. Evidently, this grant of power includes the authority to
evaluate each and every government agency, including the
determination of the most economical and efficient staffing pattern,
under the Executive Department.
In the recent case of Rosa Ligaya C. Domingo, et al. vs. Hon. Ronaldo
D. Zamora, in his capacity as the Executive Secretary, et al.,[13] this
Court has had occasion to also delve on the Presidents power to
reorganize the Office of the President under Section 31(2) and (3) of
Executive Order No. 292 and the power to reorganize the Office of
the President Proper. The Court has there observed:
x x x. Under Section 31(1) of EO 292, the President can reorganize
the Office of the President Proper by abolishing, consolidating or
merging units, or by transferring functions from one unit to another.
In contrast, under Section 31(2) and (3) of EO 292, the Presidents
power to reorganize offices outside the Office of the President Proper
but still within the Office of the President is limited to merely
transferring functions or agencies from the Office of the President to
Departments or Agencies, and vice versa.
The provisions of Section 31, Book III, Chapter 10, of Executive Order
No. 292 (Administrative Code of 1987), above-referred to, reads
thusly:
SEC. 31. Continuing Authority of the President to Reorganize his
Office. The President, subject to the policy in the Executive Office and
in order to achieve simplicity, economy and efficiency, shall have
continuing authority to reorganize the administrative structure of the
Office of the President. For this purpose, he may take any of the
following actions:
(1) Restructure the internal organization of the Office of the President
Proper, including the immediate Offices, the Presidential Special
Assistants/Advisers System and the Common Staff Support System,

by abolishing, consolidating or merging units thereof or transferring

functions from one unit to another;
(2) Transfer any function under the Office of the President to any
other Department or Agency as well as transfer functions to the
Office of the President from other Departments and Agencies; and
(3) Transfer any agency under the Office of the President to any other
department or agency as well as transfer agencies to the Office of
the President from other departments and agencies.
The first sentence of the law is an express grant to the President of a
continuing authority to reorganize the administrative structure of the
Office of the President. The succeeding numbered paragraphs are not
in the nature of provisos that unduly limit the aim and scope of the
grant to the President of the power to reorganize but are to be
viewed in consonance therewith. Section 31(1) of Executive Order
No. 292 specifically refers to the Presidents power to restructure the
internal organization of the Office of the President Proper, by
abolishing, consolidating or merging units hereof or transferring
functions from one unit to another, while Section 31(2) and (3)
concern executive offices outside the Office of the President Proper
allowing the President to transfer any function under the Office of the
President to any other Department or Agency and vice-versa, and the
transfer of any agency under the Office of the President to any other
department or agency and vice-versa.[14]
In the present instance, involving neither an abolition nor transfer of
offices, the assailed action is a mere reorganization under the
general provisions of the law consisting mainly of streamlining the
NTA in the interest of simplicity, economy and efficiency. It is an act
well within the authority of President motivated and carried out,
according to the findings of the appellate court, in good faith, a
factual assessment that this Court could only but accept.[15]
In passing, relative to petitioners Motion for an En Banc Resolution of
the Case, it may be well to remind counsel, that the Court En Banc is
not an appellate tribunal to which appeals from a Division of the
Court may be taken. A Division of the Court is the Supreme Court as
fully and veritably as the Court En Banc itself and a decision of its

Division is as authoritative and final as a decision of the Court En

Banc. Referrals of cases from a Division to the Court En Banc do not
take place as just a matter of routine but only on such specified
grounds as the Court in its discretion may allow.[16]
WHEREFORE, the Motion to Admit Petition for En Banc resolution and
the Petition for an En Banc Resolution are DENIED for lack of merit.
Let entry of judgment be made in due course. No costs.
SO ORDERED.

sabotage, smuggling, tax evasion, and dollar-salting, investigate the

same and aid in the prosecution of cases;
(b) Coordinate with external agencies in monitoring the financial and
economic activities of persons or entities, whether domestic or
foreign, which may adversely affect national financial interest with
the goal of regulating, controlling or preventing said activities;
[G.R. No. 142801-802. July 10, 2001]
BUKLOD NG KAWANING EIIB, CESAR POSADA, REMEDIOS G.
PRINCESA,
BENJAMIN
KHO,
BENIGNO
MANGA,
LULU
MENDOZA, petitioners, vs. HON. EXECUTIVE SECRETARY
RONALDO B. ZAMORA, HON. SECRETARY JOSE PARDO,
DEPARTMENT OF FINANCE, HON. SECRETARY BENJAMIN
DIOKNO, DEPARTMENT OF BUDGET AND MANAGEMENT, HON.
SECRETARY ARTEMIO TUQUERO, DEPARTMENT OF JUSTICE,
respondents.
SANDOVAL-GUTIERREZ, J.:
In this petition for certiorari, prohibition and mandamus, petitioners
Buklod Ng Kawaning EIIB, Cesar Posada, Remedios Princesa,
Benjamin Kho, Benigno Manga and Lulu Mendoza, for themselves and
in behalf of others with whom they share a common or general
interest, seek the nullification of Executive Order No. 191[1] and
Executive Order No. 223[2] on the ground that they were issued by
the Office of the President with grave abuse of discretion and in
violation of their constitutional right to security of tenure.
The facts are undisputed:
On June 30, 1987, former President Corazon C. Aquino, issued
Executive Order No. 127[3] establishing the Economic Intelligence
and Investigation Bureau (EIIB) as part of the structural organization
of the Ministry of Finance.[4] The EIIB was designated to perform the
following functions:
(a) Receive, gather and evaluate intelligence reports and information
and evidence on the nature, modes and extent of illegal activities
affecting the national economy, such as, but not limited to, economic

(c) Provide all intelligence units of operating Bureaus or Offices under

the Ministry with the general framework and guidelines in the
conduct of intelligence and investigating works;
(d) Supervise, monitor and coordinate all the intelligence and
investigation operations of the operating Bureaus and Offices under
the Ministry;
(e) Investigate, hear and file, upon clearance by the Minister, antigraft and corruption cases against personnel of the Ministry and its
constituents units;
(f) Perform such other appropriate functions as may be assigned by
the Minister or his deputies.[5]
In a desire to achieve harmony of efforts and to prevent possible
conflicts among agencies in the course of their anti-smuggling
operations, President Aquino issued Memorandum Order No. 225 on
March 17, 1989, providing, among others, that the EIIB shall be the
agency of primary responsibility for anti-smuggling operations in all
land areas and inland waters and waterways outside the areas of sole
jurisdiction of the Bureau of Customs.[6]
Eleven years after, or on January 7, 2000, President Joseph Estrada
issued Executive Order No. 191 entitled Deactivation of the Economic
Intelligence and Investigation Bureau.[7] Motivated by the fact that
the designated functions of the EIIB are also being performed by the
other existing agencies of the government and that there is a need to
constantly monitor the overlapping of functions among these
agencies, former President Estrada ordered the deactivation of EIIB
and the transfer of its functions to the Bureau of Customs and the
National Bureau of Investigation.

Meanwhile, President Estrada issued Executive Order No. 196[8]

creating the Presidential Anti-Smuggling Task Force Aduana.[9]
Then the day feared by the EIIB employees came. On March 29,
2000, President Estrada issued Executive Order No. 223[10] providing
that all EIIB personnel occupying positions specified therein shall be
deemed separated from the service effective April 30, 2000, pursuant
to a bona fide reorganization resulting to abolition, redundancy,
merger, division, or consolidation of positions.[11]

Arguing in behalf of respondents, the Solicitor General maintains

that: (a) the President enjoys the totality of the executive power
provided under Sections 1 and 7, Article VII of the Constitution, thus,
he has the authority to issue Executive Order Nos. 191 and 223; (b)
the said executive orders were issued in the interest of national
economy, to avoid duplicity of work and to streamline the functions
of the bureaucracy; and (c) the EIIB was not abolished, it was only
deactivated.
The petition is bereft of merit.

Agonizing over the loss of their employment, petitioners now come

before this Court invoking our power of judicial review of Executive
Order Nos. 191 and 223. They anchor their petition on the following
arguments:
A
Executive Order Nos. 191 and 223 should be annulled as they are
unconstitutional for being violative of Section 2(3), Article IX-B of the
Philippine Constitution and/or for having been issued with grave
abuse of discretion amounting to lack or excess of jurisdiction.
B.
The abolition of the EIIB is a hoax. Similarly, if Executive Order Nos.
191 and 223 are considered to effect a reorganization of the EIIB,
such reorganization was made in bad faith.
C.
The President has no authority to abolish the EIIB.
Petitioners contend that the issuance of the afore-mentioned
executive orders is: (a) a violation of their right to security of tenure;
(b) tainted with bad faith as they were not actually intended to make
the bureaucracy more efficient but to give way to Task Force Aduana,
the functions of which are essentially and substantially the same as
that of EIIB; and (c) a usurpation of the power of Congress to decide
whether or not to abolish the EIIB.

Despite the presence of some procedural flaws in the instant petition,

such as, petitioners disregard of the hierarchy of courts and the nonexhaustion of administrative remedies, we deem it necessary to
address the issues. It is in the interest of the State that questions
relating to the status and existence of a public office be settled
without delay. We are not without precedent. In Dario v. Mison,[12]
we liberally decreed:
The Court disregards the questions raised as to procedure, failure to
exhaust administrative remedies, the standing of certain parties to
sue, for two reasons, `[b]ecause of the demands of public interest,
including the need for stability in the public service,' and because of
the serious implications of these cases on the administration of the
Philippine civil service and the rights of public servants.
At first glance, it seems that the resolution of this case hinges on the
question - Does the deactivation of EIIB constitute abolition of an
office? However, after coming to terms with the prevailing law and
jurisprudence, we are certain that the ultimate queries should be a)
Does the President have the authority to reorganize the executive
department? and, b) How should the reorganization be carried out?
Surely, there exists a distinction between the words deactivate and
abolish. To deactivate means to render inactive or ineffective or to
break up by discharging or reassigning personnel,[13] while to
abolish means to do away with, to annul, abrogate or destroy
completely.[14] In essence, abolition denotes an intention to do away
with the office wholly and permanently.[15] Thus, while in abolition,

the office ceases to exist, the same is not true in deactivation where
the office continues to exist, albeit remaining dormant or inoperative.
Be that as it may, deactivation and abolition are both reorganization
measures.
The Solicitor General only invokes the above distinctions on the
mistaken assumption that the President has no power to abolish an
office.
The general rule has always been that the power to abolish a public
office is lodged with the legislature.[16] This proceeds from the legal
precept that the power to create includes the power to destroy. A
public office is either created by the Constitution, by statute, or by
authority of law.[17] Thus, except where the office was created by
the Constitution itself, it may be abolished by the same legislature
that brought it into existence.[18]
The exception, however, is that as far as bureaus, agencies or offices
in the executive department are concerned, the Presidents power of
control may justify him to inactivate the functions of a particular
office,[19] or certain laws may grant him the broad authority to carry
out reorganization measures.[20] The case in point is Larin v.
Executive Secretary.[21] In this case, it was argued that there is no
law which empowers the President to reorganize the BIR. In
decreeing otherwise, this Court sustained the following legal basis,
thus:
Initially, it is argued that there is no law yet which empowers the
President to issue E.O. No. 132 or to reorganize the BIR.
We do not agree.

services and which may be scaled down, phased out or abolished,

subject to civil service rules and regulations. X x x. Actual scaling
down, phasing out or abolition of the activities shall be effected
pursuant to Circulars or Orders issued for the purpose by the Office of
the President.
Said provision clearly mentions the acts of scaling down, phasing out
and abolition of offices only and does not cover the creation of offices
or transfer of functions. Nevertheless, the act of creating and
decentralizing is included in the subsequent provision of Section 62
which provides that:
Sec. 62. Unauthorized organizational charges.- Unless otherwise
created by law or directed by the President of the Philippines, no
organizational unit or changes in key positions in any department or
agency shall be authorized in their respective organization structures
and be funded from appropriations by this Act. (italics ours)
The foregoing provision evidently shows that the President is
authorized to effect organizational changes including the creation of
offices in the department or agency concerned.
xxxxxx
Another legal basis of E.O. No. 132 is Section 20, Book III of E.O. No.
292 which states:
Sec. 20. Residual Powers. Unless Congress provides otherwise, the
President shall exercise such other powers and functions vested in
the President which are provided for under the laws and which are
not specifically enumerated above or which are not delegated by the
President in accordance with law. (italic ours)

xxxxxx
Section 48 of R.A. 7645 provides that:
Sec. 48. Scaling Down and Phase Out of Activities of Agencies Within
the Executive Branch. The heads of departments, bureaus and offices
and agencies are hereby directed to identify their respective
activities which are no longer essential in the delivery of public

This provision speaks of such other powers vested in the President

under the law. What law then gives him the power to reorganize? It is
Presidential Decree No. 1772 which amended Presidential Decree No.
1416. These decrees expressly grant the President of the Philippines
the continuing authority to reorganize the national government,
which includes the power to group, consolidate bureaus and
agencies, to abolish offices, to transfer functions, to create and

classify functions, services and activities and to standardize salaries

and materials. The validity of these two decrees are unquestionable.
The 1987 Constitution clearly provides that all laws, decrees,
executive orders, proclamations, letters of instructions and other
executive issuances not inconsistent with this Constitution shall
remain operative until amended, repealed or revoked. So far, there is
yet no law amending or repealing said decrees. (Emphasis supplied)
Now, let us take a look at the assailed executive order.
In the whereas clause of E.O. No. 191, former President Estrada
anchored his authority to deactivate EIIB on Section 77 of Republic
Act 8745 (FY 1999 General Appropriations Act), a provision similar to
Section 62 of R.A. 7645 quoted in Larin, thus;
Sec. 77. Organized Changes. Unless otherwise provided by law or
directed by the President of the Philippines, no changes in key
positions or organizational units in any department or agency shall
be authorized in their respective organizational structures and
funded from appropriations provided by this Act.
We adhere to the precedent or ruling in Larin that this provision
recognizes the authority of the President to effect organizational
changes in the department or agency under the executive structure.
Such a ruling further finds support in Section 78 of Republic Act No.
8760.[22] Under this law, the heads of departments, bureaus, offices
and agencies and other entities in the Executive Branch are directed
(a) to conduct a comprehensive review of their respective mandates,
missions, objectives, functions, programs, projects, activities and
systems and procedures; (b) identify activities which are no longer
essential in the delivery of public services and which may be scaled
down, phased-out or abolished; and (c) adopt measures that will
result in the streamlined organization and improved overall
performance of their respective agencies.[23] Section 78 ends up
with the mandate that the actual streamlining and productivity
improvement in agency organization and operation shall be effected
pursuant to Circulars or Orders issued for the purpose by the Office of
the President.[24] The law has spoken clearly. We are left only with
the duty to sustain.

But of course, the list of legal basis authorizing the President to

reorganize any department or agency in the executive branch does
not have to end here. We must not lose sight of the very source of
the power that which constitutes an express grant of power. Under
Section 31, Book III of Executive Order No. 292 (otherwise known as
the Administrative Code of 1987), the President, subject to the policy
in the Executive Office and in order to achieve simplicity, economy
and efficiency, shall have the continuing authority to reorganize the
administrative structure of the Office of the President. For this
purpose, he may transfer the functions of other Departments or
Agencies to the Office of the President. In Canonizado v. Aguirre,[25]
we ruled that reorganization involves the reduction of personnel,
consolidation of offices, or abolition thereof by reason of economy or
redundancy of functions. It takes place when there is an alteration of
the existing structure of government offices or units therein,
including the lines of control, authority and responsibility between
them. The EIIB is a bureau attached to the Department of Finance.
[26] It falls under the Office of the President. Hence, it is subject to
the Presidents continuing authority to reorganize.
It having been duly established that the President has the authority
to carry out reorganization in any branch or agency of the executive
department, what is then left for us to resolve is whether or not the
reorganization is valid. In this jurisdiction, reorganizations have been
regarded as valid provided they are pursued in good faith.
Reorganization is carried out in good faith if it is for the purpose of
economy or to make bureaucracy more efficient.[27] Pertinently,
Republic Act No. 6656[28] provides for the circumstances which may
be considered as evidence of bad faith in the removal of civil service
employees made as a result of reorganization, to wit: (a) where there
is a significant increase in the number of positions in the new staffing
pattern of the department or agency concerned; (b) where an office
is abolished and another performing substantially the same functions
is created; (c) where incumbents are replaced by those less qualified
in terms of status of appointment, performance and merit; (d) where
there is a classification of offices in the department or agency
concerned and the reclassified offices perform substantially the same
functions as the original offices, and (e) where the removal violates
the order of separation.[29]

Petitioners claim that the deactivation of EIIB was done in bad faith
because four days after its deactivation, President Estrada created
the Task Force Aduana.
We are not convinced.
An examination of the pertinent Executive Orders[30] shows that the
deactivation of EIIB and the creation of Task Force Aduana were done
in good faith. It was not for the purpose of removing the EIIB
employees, but to achieve the ultimate purpose of E.O. No. 191,
which is economy. While Task Force Aduana was created to take the
place of EIIB, its creation does not entail expense to the government.
Firstly, there is no employment of new personnel to man the Task
Force. E.O. No. 196 provides that the technical, administrative and
special staffs of EIIB are to be composed of people who are already in
the public service, they being employees of other existing agencies.
Their tenure with the Task Force would only be temporary, i.e., only
when the agency where they belong is called upon to assist the Task
Force. Since their employment with the Task force is only by way of
detail or assignment, they retain their employment with the existing
agencies. And should the need for them cease, they would be sent
back to the agency concerned.
Secondly, the thrust of E.O. No. 196 is to have a small group of
military men under the direct control and supervision of the President
as base of the governments anti-smuggling campaign. Such a smaller
base has the necessary powers 1) to enlist the assistance of any
department, bureau, or office and to use their respective personnel,
facilities and resources; and 2) to select and recruit personnel from
within the PSG and ISAFP for assignment to the Task Force.
Obviously, the idea is to encourage the utilization of personnel,
facilities and resources of the already existing departments,
agencies, bureaus, etc., instead of maintaining an independent office
with a whole set of personnel and facilities. The EIIB had proven itself
burdensome for the government because it maintained separate
offices in every region in the Philippines.
And thirdly, it is evident from the yearly budget appropriation of the
government that the creation of the Task Force Aduana was

especially intended to lessen EIIBs expenses. Tracing from the yearly

General Appropriations Act, it appears that the allotted amount for
the EIIBs general administration, support, and operations for the year
1995, was P128,031,000;[31] for 1996, P182,156,000;[32] for 1998,
P219,889,000;[33] and, for 1999, P238,743,000.[34] These amounts
were far above the P50,000,000[35] allocation to the Task Force
Aduana for the year 2000.
While basically, the functions of the EIIB have devolved upon the Task
Force Aduana, we find the latter to have additional new powers. The
Task Force Aduana, being composed of elements from the
Presidential Security Group (PSG) and Intelligence Service Armed
Forces of the Philippines (ISAFP),[36] has the essential power to
effect searches, seizures and arrests. The EIIB did not have this
power. The Task Force Aduana has the power to enlist the assistance
of any department, bureau, office, or instrumentality of the
government, including government-owned or controlled corporations;
and to use their personnel, facilities and resources. Again, the EIIB
did not have this power. And, the Task Force Aduana has the
additional authority to conduct investigation of cases involving illgotten wealth. This was not expressly granted to the EIIB.
Consequently, it cannot be said that there is a feigned
reorganization. In Blaquera v. Civil Sevice Commission, [37] we ruled
that a reorganization in good faith is one designed to trim the fat off
the bureaucracy and institute economy and greater efficiency in its
operation.
Lastly, we hold that petitioners right to security of tenure is not
violated. Nothing is better settled in our law than that the abolition of
an office within the competence of a legitimate body if done in good
faith suffers from no infirmity. Valid abolition of offices is neither
removal nor separation of the incumbents.[38] In the instructive
words laid down by this Court in Dario v. Mison,[39] through Justice
Abraham F. Sarmiento:
Reorganizations in this jurisdiction have been regarded as valid
provided they are pursued in good faith. As a general rule, a
reorganization is carried out in good faith if it is for the purpose of
economy or to make bureaucracy more efficient. In that event, no

dismissal (in case of dismissal) or separation actually occurs because

the position itself ceases to exist. And in that case, security of tenure
would not be a Chinese wall. Be that as it may, if the abolition, which
is nothing else but a separation or removal, is done for political
reasons or purposely to defeat security of tenure, otherwise not in
good faith, no valid abolition takes and whatever abolition is done, is
void ab initio. There is an invalid abolition as where there is merely a
change of nomenclature of positions, or where claims of economy are
belied by the existence of ample funds.
Indeed, there is no such thing as an absolute right to hold office.
Except constitutional offices which provide for special immunity as
regards salary and tenure, no one can be said to have any vested
right in an office or its salary.[40]
While we cast a commiserating look upon the plight of all the EIIB
employees whose lives perhaps are now torn with uncertainties, we
cannot ignore the unfortunate reality that our government is also
battling the impact of a plummeting economy. Unless the
government is given the chance to recuperate by instituting economy
and efficiency in its system, the EIIB will not be the last agency to
suffer the impact. We cannot frustrate valid measures which are
designed to rebuild the executive department.

[G.R. No. 142283. February 6, 2003]

ROSA LIGAYA C. DOMINGO, ROMEO M. FERNANDEZ, VICTORIA
S. ESTRADA, JULIETA C. FAJARDO, ADELAIDA B. GAWIRAN,
MARCIANO M. SERVO, VICTORIA S. DAOANG, FELICIANO N.
TOLEDO III, JAYNELYN D. FLORES, MA. LIZA B. LLOREN,
ROMELIA A. CONTAPAY, MARIVIC B. TOLITOL, PAZ LEVITA G.
VILLANUEVA, EDITHA C. HERNANDEZ, JOSE HERNANDEZ, JR.,
VERONICA C. BELLES, AMELITA S. BUCE, MERCELITA C.
MARANAN,
CRISTITUTO
C.
LLOREN,
HERNANDO
M.
EVANGELISTA, and CARLOS BACAY, JR., petitioners, vs. HON.
RONALDO D. ZAMORA, in his capacity as the Executive
Secretary, HON. ANDREW B. GONZALES, in his capacity as the
Secretary of Education, and HON. CARLOS D. TUASON, in his
capacity as the Chairman of the Philippine Sports
Commission, respondents.
CARPIO, J.:

WHEREFORE, the petition is hereby DENIED. No costs.

The Case

SO ORDERED.

This is a petition for certiorari and prohibition[1] with prayer for

temporary restraining order seeking to nullify Executive Order No. 81
and Memoranda Nos. 01592 and 01594.[2] The assailed executive
order transferred the sports development programs and activities of
the Department of Education, Culture and Sports (DECS for brevity)
to the Philippine Sports Commission (PSC for brevity). The questioned
memoranda (DECS Memoranda for brevity), on the other hand,
reassigned all Bureau of Physical Education and School Sports (BPESS
for brevity) personnel named in the DECS Memoranda to various
offices within the DECS.
The Facts

On March 5, 1999, former President Joseph E. Estrada issued

Executive Order No. 81[3] (EO 81 for brevity) entitled Transferring the
Sports Programs and Activities of the Department of Education,
Culture and Sports to the Philippine Sports Commission and Defining
the Role of DECS in School-Based Sports.
EO 81 provided thus:
Section 1. Transferring the Sports Program and Activities to the PSC.
All the functions, programs and activities of DECS related to sports
development as provided for in Sec. 16 of EO 117 (s. 1987) are
hereby transferred to PSC.
Section 2. Defining the Role of DECS in School-Based Sports. The
DECS shall have jurisdiction and function over the enhancement of
Physical Education (P.E.) curriculum and its application in whatever
form inside schools.
Section 3. The Role of PSC. As the primary agency tasked to
formulate policies and oversee the national sports development
program, the management and implementation of all school-based
sports competitions among schools at the district, provincial,
regional, national and international levels, in coordination with
concerned public and private entities shall be transferred to the PSC.
Pursuant to EO 81, former DECS Secretary Andrew B. Gonzales
(Secretary Gonzales for brevity) issued Memorandum No. 01592 on
January 10, 2000. Memorandum No. 01592 temporarily reassigned, in
the exigency of the service, all remaining BPESS Staff to other
divisions or bureaus of the DECS effective March 15, 2000.

Petitioners maintain that the Presidents issuance of EO 81 violated

the principle of separation of powers. Petitioners also challenge the
DECS Memoranda for violating their right to security of tenure.
Petitioners seek to nullify EO 81 and the DECS Memoranda.
Petitioners pray that this Court prohibit the PSC from performing
functions related to school sports development. Petitioners further
pray that, upon filing of the petition, this Court issue a temporary
restraining order against respondents to desist from implementing
EO 81.
During the pendency of the case, Republic Act No. 9155 (RA 9155 for
brevity), otherwise known as the Governance of Basic Education Act
of 2001, was enacted on August 11, 2001. RA 9155 expressly
abolished the BPESS and transferred the functions, programs and
activities of the DECS relating to sports competition to the PSC. The
pertinent provision thereof reads:
SEC. 9. Abolition of BPESS. All functions, programs and activities of
the Department of Education related to sports competition shall be
transferred to the Philippine Sports Commission (PSC). The Program
for school sports and physical fitness shall remain part of the basic
education curriculum.
The Bureau of Physical Education and School Sports (BPESS) is
hereby abolished. The personnel of the BPESS, presently detailed
with the PSC, are hereby transferred to the PSC without loss of rank,
including the plantilla positions they occupy. All other BPESS
personnel shall be retained by the Department.
The Issue

On January 21, 2000, Secretary Gonzales issued Memorandum No.

01594 reassigning the BPESS staff named in the Memorandum to
various offices within the DECS effective March 15, 2000. Petitioners
were among the BPESS personnel affected by Memorandum No.
01594. Dissatisfied with their reassignment, petitioners filed the
instant petition.

The issue to resolve is whether EO 81 and the DECS Memoranda are

valid.
The Courts Ruling
We dismiss this petition for being moot and academic.

In their Petition, petitioners argue that EO 81 is void and

unconstitutional for being an undue legislation by President Estrada.

As manifested by both petitioners[4] and respondents,[5] the

subsequent enactment of RA 9155 has rendered the issues in the
present case moot and academic. Since RA 9155 abolished the
BPESS and transferred the DECS functions relating to sports
competition to the PSC, petitioners now admit that it is no longer
plausible to raise any ultra vires assumption by the PSC of the
functions of the BPESS.[6] Moreover, since RA 9155 provides that
BPESS personnel not transferred to the PSC shall be retained by the
DECS, petitioners now accept that the law explicitly protects and
preserves[7] their right to security of tenure.
Although the issue is already academic, its significance constrains
the Court to point out that Executive Order No. 292 (EO 292 for
brevity), otherwise known as the Administrative Code of 1987,
expressly grants the President continuing authority to reorganize the
Office of the President. Section 31 of EO 292 provides:
SEC. 31. Continuing Authority of the President to Reorganize his
Office. The President, subject to the policy in the Executive Office and
in order to achieve simplicity, economy and efficiency, shall have
continuing authority to reorganize the administrative structure of the
Office of the President. For this purpose, he may take any of the
following actions:
(1) Restructure the internal organization of the Office of the President
Proper, including the immediate Offices, the Presidential Special
Assistants/Advisers System and the Common Support System, by
abolishing, consolidating or merging units thereof or transferring
functions from one unit to another;
(2) Transfer any function under the Office of the President to any
other Department or Agency as well as transfer functions to the
Office of the President from other Departments and Agencies; and
(3) Transfer any agency under the Office of the President to any other
department or agency as well as transfer agencies to the Office of
the President from other Departments or Agencies. (Emphasis
supplied.)

Since EO 81 is based on the Presidents continuing authority under

Section 31 (2) and (3) of EO 292,[8] EO 81 is a valid exercise of the
Presidents delegated power to reorganize the Office of the President.
The law grants the President this power in recognition of the
recurring need of every President to reorganize his office to achieve
simplicity, economy and efficiency. The Office of the President is the
nerve center of the Executive Branch. To remain effective and
efficient, the Office of the President must be capable of being shaped
and reshaped by the President in the manner he deems fit to carry
out his directives and policies. After all, the Office of the President is
the command post of the President. This is the rationale behind the
Presidents continuing authority to reorganize the administrative
structure of the Office of the President.
Petitioners contention that the DECS is not part of the Office of the
President is immaterial. Under EO 292, the DECS is indisputably a
Department of the Executive Branch. Even if the DECS is not part of
the Office of the President, Section 31 (2) and (3) of EO 292 clearly
authorizes the President to transfer any function or agency of the
DECS to the Office of the President. Under its charter, the PSC is
attached to the Office of the President.[9] Therefore, the President
has the authority to transfer the functions, programs and activities of
DECS related to sports development[10] to the PSC, making EO 81 a
valid presidential issuance.
However, the Presidents power to reorganize the Office of the
President under Section 31 (2) and (3) of EO 292 should be
distinguished from his power to reorganize the Office of the President
Proper. Under Section 31 (1) of EO 292, the President can reorganize
the Office of the President Proper by abolishing, consolidating or
merging units, or by transferring functions from one unit to another.
In contrast, under Section 31 (2) and (3) of EO 292, the Presidents
power to reorganize offices outside the Office of the President Proper
but still within the Office of the President is limited to merely
transferring functions or agencies from the Office of the President to
Departments or Agencies, and vice versa.
This distinction is crucial as it affects the security of tenure of
employees. The abolition of an office in good faith necessarily results
in the employees cessation in office, but in such event there is no

dismissal or separation because the office itself ceases to exist.[11]

On the other hand, the transfer of functions or agencies does not
result in the employees cessation in office because his office
continues to exist although in another department, agency or office.
In the instant case, the BPESS employees who were not transferred
to PSC were at first temporarily, then later permanently reassigned to
other offices of the DECS, ensuring their continued employment. At

any rate, RA 9155 now mandates that these employees shall be

retained by the Department.
WHEREFORE, the instant petition is DISMISSED. No pronouncement
as to costs.
SO ORDERED.