1
EN BANC case is considered moot and academic when its purpose has become stale,2 or when it ceases to present
G.R. No. 192791 April 24, 2012
DENNIS A. B. FUNA, Petitioner,
vs.
THE CHAIRMAN, COMMISSION ON AUDIT, REYNALDO A. VILLAR, Respondent.
DECISION
VELASCO, JR., J.:
In this Petition for Certiorari and Prohibition under Rule 65, Dennis A. B. Funa challenges the
constitutionality of the appointment of Reynaldo A. Villar as Chairman of the Commission on Audit and
accordingly prays that a judgment issue "declaring the unconstitutionality" of the appointment.
The facts of the case are as follows:
On February 15, 2001, President Gloria Macapagal-Arroyo (President Macapagal-Arroyo) appointed
Guillermo N. Carague (Carague) as Chairman of the Commission on Audit (COA) for a term of seven (7)
years, pursuant to the 1987 Constitution.1 Carague’s term of office started on February 2, 2001 to end on
February 2, 2008.
Meanwhile, on February 7, 2004, President Macapagal-Arroyo appointed Reynaldo A. Villar (Villar) as the
third member of the COA for a term of seven (7) years starting February 2, 2004 until February 2, 2011.
Following the retirement of Carague on February 2, 2008 and during the fourth year of Villar as COA
Commissioner, Villar was designated as Acting Chairman of COA from February 4, 2008 to April 14, 2008.
Subsequently, on April 18, 2008, Villar was nominated and appointed as Chairman of the COA. Shortly
thereafter, on June 11, 2008, the Commission on Appointments confirmed his appointment. He was to
serve as Chairman of COA, as expressly indicated in the appointment papers, until the expiration of the
original term of his office as COA Commissioner or on February 2, 2011. Challenged in this recourse,
Villar, in an obvious bid to lend color of title to his hold on the chairmanship, insists that his appointment
as COA Chairman accorded him a fresh term of seven (7) years which is yet to lapse. He would argue, in
fine, that his term of office, as such chairman, is up to February 2, 2015, or 7 years reckoned from
February 2, 2008 when he was appointed to that position.
Meanwhile, Evelyn R. San Buenaventura (San Buenaventura) was appointed as COA Commissioner to
serve the unexpired term of Villar as Commissioner or up to February 2, 2011.
Before the Court could resolve this petition, Villar, via a letter dated February 22, 2011 addressed to
President Benigno S. Aquino III, signified his intention to step down from office upon the appointment of
his replacement. True to his word, Villar vacated his position when President Benigno Simeon Aquino III
named Ma. Gracia Pulido-Tan (Chairman Tan) COA Chairman. This development has rendered this
petition and the main issue tendered therein moot and academic.
a justiciable controversy owing to the onset of supervening events,3 so that a resolution of the case or a
declaration on the issue would be of no practical value or use.4 In such instance, there is no actual
substantial relief which a petitioner would be entitled to, and which will anyway be negated by the
dismissal of the basic petition.5 As a general rule, it is not within Our charge and function to act upon and
decide a moot case. However, in David v. Macapagal-Arroyo,6 We acknowledged and accepted certain
exceptions to the issue of mootness, thus:
The "moot and academic" principle is not a magical formula that can automatically dissuade the courts in
resolving a case. Courts will decide cases, otherwise moot and academic, if: first, there is a grave
violation of the Constitution, second, the exceptional character of the situation and the paramount
public interest is involved, third, when constitutional issue raised requires formulation of controlling
principles to guide the bench, the bar, and the public, and fourth, the case is capable of repetition yet
evading review.
Although deemed moot due to the intervening appointment of Chairman Tan and the resignation of
Villar, We consider the instant case as falling within the requirements for review of a moot and academic
case, since it asserts at least four exceptions to the mootness rule discussed in David, namely: there is a
grave violation of the Constitution; the case involves a situation of exceptional character and is of
paramount public interest; the constitutional issue raised requires the formulation of controlling
principles to guide the bench, the bar and the public; and the case is capable of repetition yet evading
review.7 The situation presently obtaining is definitely of such exceptional nature as to necessarily call for
the promulgation of principles that will henceforth "guide the bench, the bar and the public" should like
circumstance arise. Confusion in similar future situations would be smoothed out if the contentious
issues advanced in the instant case are resolved straightaway and settled definitely. There are times
when although the dispute has disappeared, as in this case, it nevertheless cries out to be addressed. To
borrow from Javier v. Pacificador,8 "Justice demands that we act then, not only for the vindication of the
outraged right, though gone, but also for the guidance of and as a restraint in the future."
Both procedural and substantive issues are raised in this proceeding. The procedural aspect comes down
to the question of whether or not the following requisites for the exercise of judicial review of an
executive act obtain in this petition, viz: (1) there must be an actual case or justiciable controversy
before the court; (2) the question before it must be ripe for adjudication; (3) the person challenging the
act must be a proper party; and (4) the issue of constitutionality must be raised at the earliest
opportunity and must be the very litis mota of the case.9
To Villar, all the requisites have not been met, it being alleged in particular that petitioner, suing as a
taxpayer and citizen, lacks the necessary standing to challenge his appointment.10 On the other hand, the
Office of the Solicitor General (OSG), while recognizing the validity of Villar’s appointment for the period
ending February 11, 2011, has expressed the view that petitioner should have had filed a petition for
declaratory relief or quo warranto under Rule 63 or Rule 66, respectively, of the Rules of Court instead of
certiorari under Rule 65.
Villar’s posture on the absence of some of the mandatory requisites for the exercise by the Court of its
power of judicial review must fail. As a general rule, a petitioner must have the necessary personality or
standing (locus standi) before a court will recognize the issues presented. In Integrated Bar of the
Philippines v. Zamora, We defined locus standi as:
 2

x x x a personal and substantial interest in the case such that the party has sustained or will sustain a
direct injury as a result of the governmental act that is being challenged. The term "interest" means a
material interest, an interest in issue affected by the decree, as distinguished from mere interest in the
question involved, or a mere incidental interest. The gist of the question of standing is whether a party
alleges "such personal stake in the outcome of the controversy as to assure the concrete adverseness
which sharpens the presentation of issues upon which the court depends for illumination of difficult
constitutional questions."11
To have legal standing, therefore, a suitor must show that he has sustained or will sustain a "direct
injury" as a result of a government action, or have a "material interest" in the issue affected by the
challenged official act.12 However, the Court has time and again acted liberally on the locus standi
requirements and has accorded certain individuals, not otherwise directly injured, or with material
interest affected, by a Government act, standing to sue provided a constitutional issue of critical
significance is at stake.13 The rule on locus standi is after all a mere procedural technicality in relation to
which the Court, in a catena of cases involving a subject of transcendental import, has waived, or
relaxed, thus allowing non-traditional plaintiffs, such as concerned citizens, taxpayers, voters or
legislators, to sue in the public interest, albeit they may not have been personally injured by the
operation of a law or any other government act.14 In David, the Court laid out the bare minimum norm
before the so-called "non-traditional suitors" may be extended standing to sue, thusly:
1.) For taxpayers, there must be a claim of illegal disbursement of public funds or that the tax
measure is unconstitutional;
2.) For voters, there must be a showing of obvious interest in the validity of the election law
in question;
3.) For concerned citizens, there must be a showing that the issues raised are of
transcendental importance which must be settled early; and
4.) For legislators, there must be a claim that the official action complained of infringes their
prerogatives as legislators.
We find the remedy of certiorari applicable to the instant case in view of the allegation that then
President Macapagal-Arroyo exercised her appointing power in a manner constituting grave abuse of
discretion.
This brings Us to the pivotal substantive issue of whether or not Villar’s appointment as COA Chairman,
while sitting in that body and after having served for four (4) years of his seven (7) year term as COA
commissioner, is valid in light of the term limitations imposed under, and the circumscribing concepts
tucked in, Sec. 1 (2), Art. IX(D) of the Constitution, which reads:
(2) The Chairman and Commissioners [on Audit] shall be appointed by the President with the consent of
the Commission on Appointments for a term of seven years without reappointment. Of those first
appointed, the Chairman shall hold office for seven years, one commissioner for five years, and the other
commissioner for three years, without reappointment. Appointment to any vacancy shall be only for the
unexpired portion of the term of the predecessor. In no case shall any member be appointed or
designated in a temporary or acting capacity. (Emphasis added.)17
And if valid, for how long can he serve?
At once clear from a perusal of the aforequoted provision are the defined restricting features in the
matter of the composition of COA and the appointment of its members (commissioners and chairman)
designed to safeguard the independence and impartiality of the commission as a body and that of its
individual members.18 These are, first, the rotational plan or the staggering term in the commission
membership, such that the appointment of commission members subsequent to the original set
appointed after the effectivity of the 1987 Constitution shall occur every two years; second, the
maximum but a fixed term-limit of seven (7) years for all commission members whose appointments
came about by reason of the expiration of term save the aforementioned first set of appointees and
those made to fill up vacancies resulting from certain causes; third, the prohibition against
reappointment of commission members who served the full term of seven years or of members first
appointed under the Constitution who served their respective terms of office; fourth, the limitation of
the term of a member to the unexpired portion of the term of the predecessor; and fifth, the
proscription against temporary appointment or designation.

To elucidate on the mechanics of and the adverted limitations on the matter of COA-member
This case before Us is of transcendental importance, since it obviously has "far-reaching implications,"
appointments with fixed but staggered terms of office, the Court lays down the following postulates
and there is a need to promulgate rules that will guide the bench, bar, and the public in future analogous
deducible from pertinent constitutional provisions, as construed by the Court:
cases. We, thus, assume a liberal stance and allow petitioner to institute the instant petition.

1. The terms of office and appointments of the first set of commissioners, or the seven, five
Anent the aforestated posture of the OSG, there is no serious disagreement as to the propriety of the
and three-year termers referred to in Sec. 1(2), Art. IX(D) of the Constitution, had already
availment of certiorari as a medium to inquire on whether the assailed appointment of respondent Villar
expired. Hence, their respective terms of office find relevancy for the most part only in
as COA Chairman infringed the constitution or was infected with grave abuse of discretion. For under the
understanding the operation of the rotational plan. In Gaminde v. Commission on Audit,19 the
expanded concept of judicial review under the 1987 Constitution, the corrective hand of certiorari may
Court described how the smooth functioning of the rotational system contemplated in said
be invoked not only "to settle actual controversies involving rights which are legally demandable and
and like provisions covering the two other independent commissions is achieved thru the
enforceable," but also "to determine whether or not there has been a grave abuse of discretion
staggering of terms:
amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the
government."15 "Grave abuse of discretion" denotes:
x x x [T]he terms of the first Chairmen and Commissioners of the Constitutional Commissions
under the 1987 Constitution must start on a common date [February 02, 1987, when the
such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction, or, in other
1987 Constitution was ratified] irrespective of the variations in the dates of appointments and
words, where the power is exercised in an arbitrary or despotic manner by reason of passion or personal
qualifications of the appointees in order that the expiration of the first terms of seven, five
hostility, and it must be so patent and gross as to amount to an evasion of positive duty or to a virtual
refusal to perform the duty enjoined or to act in contemplation of law.16

and three years should lead to the regular recurrence of the two-year interval between the
expiration of the terms.
x x x In case of a belated appointment, the interval between the start of the terms and the
actual appointment shall be counted against the appointee.
Early on, in Republic v. Imperial,21 the Court wrote of two conditions, "both
indispensable to [the] workability" of the rotational plan. These conditions may be
described as follows: (a) that the terms of the first batch of commissioners should
start on a common date; and (b) that any vacancy due to death, resignation or
disability before the expiration of the term should be filled only for the unexpired
balance of the term. Otherwise, Imperial continued, "the regularity of the intervals
between appointments would be destroyed." There appears to be near unanimity
as to the purpose/s of the rotational system, as originally conceived, i.e., to place
in the commission a new appointee at a fixed interval (every two years presently),
thus preventing a four-year administration appointing more than one permanent
and regular commissioner,22 or to borrow from Commissioner Monsod of the 1986
CONCOM, "to prevent one person (the President of the Philippines) from
dominating the commissions."23 It has been declared too that the rotational plan
ensures continuity in, and, as indicated earlier, secure the independence of, the
commissions as a body.24
2. An appointment to any vacancy in COA, which arose from an expiration of a term, after the
first chairman and commissioners appointed under the 1987 Constitution have bowed out,
shall, by express constitutional fiat, be for a term of seven (7) years, save when the
appointment is to fill up a vacancy for the corresponding unserved term of an outgoing
member. In that case, the appointment shall only be for the unexpired portion of the
departing commissioner’s term of office. There can only be an unexpired portion when, as a
direct result of his demise, disability, resignation or impeachment, as the case may be, a
sitting member is unable to complete his term of office.25 To repeat, should the vacancy arise
out of the expiration of the term of the incumbent, then there is technically no unexpired
portion to speak of. The vacancy is for a new and complete seven-year term and, ergo, the
appointment thereto shall in all instances be for a maximum seven (7) years.
3. Sec. 1(2), Art. IX(D) of the 1987 Constitution prohibits the "reappointment" of a member of
COA after his appointment for seven (7) years. Writing for the Court in Nacionalista Party v.
De Vera,26 a case involving the promotion of then COMELEC Commissioner De Vera to the
position of chairman, then Chief Justice Manuel Moran called attention to the fact that the
prohibition against "reappointment" comes as a continuation of the requirement that the
commissioners––referring to members of the COMELEC under the 1935 Constitution––shall
hold office for a term of nine (9) years. This sentence formulation imports, notes Chief Justice
Moran, that reappointment is not an absolute prohibition.
4. The adverted system of regular rotation or the staggering of appointments and terms in the
membership for all three constitutional commissions, namely the COA, Commission on
Elections (COMELEC) and Civil Service Commission (CSC) found in the 1987 Constitution was
patterned after the amended 1935 Constitution for the appointment of the members of
COMELEC27 with this difference: the 1935 version entailed a regular interval of vacancy every
three (3) years, instead of the present two (2) years and there was no express provision on
3
appointment to any vacancy being limited to the unexpired portion of the his predecessor’s
term. The model 1935 provision reads:
Section 1. There shall be an independent Commission on Elections composed of a Chairman and two
other members to be appointed by the President with the consent of the Commission on Appointments,
who shall hold office for a term of nine years and may not be reappointed. Of the Members of the
Commission first appointed, one shall hold office for nine years, another for six years and the third for
three years. x x x
Petitioner now asseverates the view that Sec. 1(2), Art. IX(D) of the 1987 Constitution proscribes
reappointment of any kind within the commission, the point being that a second appointment, be it for
the same position (commissioner to another position of commissioner) or upgraded position
(commissioner to chairperson) is a prohibited reappointment and is a nullity ab initio. Attention is drawn
in this regard to the Court’s disposition in Matibag v. Benipayo.28
Villar’s promotional appointment, so it is argued, is void from the start, constituting as it did a
reappointment enjoined by the Constitution, since it actually needed another appointment to a different
office and requiring another confirmation by the Commission on Appointments.
Central to the adjudication of the instant petition is the correct meaning to be given to Sec. 1(2), Article
IX(D) of the Constitution on the ban against reappointment in relation to the appointment issued to
respondent Villar to the position of COA Chairman.
Without question, the parties have presented two (2) contrasting and conflicting positions. Petitioner
contends that Villar’s appointment is proscribed by the constitutional ban on reappointment under the
aforecited constitutional provision. On the other hand, respondent Villar initially asserted that his
appointment as COA Chairman is valid up to February 2, 2015 pursuant to the same provision.
The Court finds petitioner’s position bereft of merit. The flaw lies in regarding the word "reappointment"
as, in context, embracing any and all species of appointment.
The rule is that if a statute or constitutional provision is clear, plain and free from ambiguity, it must be
given its literal meaning and applied without attempted interpretation.29 This is known as the plain
meaning rule enunciated by the maxim verba legis non est recedendum, or from the words of a statute
there should be no departure.30
The primary source whence to ascertain constitutional intent or purpose is the language of the provision
itself.31 If possible, the words in the Constitution must be given their ordinary meaning, save where
technical terms are employed. J.M. Tuason & Co., Inc. v. Land Tenure Administration illustrates the
verbal legis rule in this wise:
We look to the language of the document itself in our search for its meaning. We do not of course stop
there, but that is where we begin. It is to be assumed that the words in which constitutional provisions
are couched express the objective sought to be attained. They are to be given their ordinary meaning
except where technical terms are employed in which case the significance thus attached to them
prevails. As the Constitution is not primarily a lawyer’s document, it being essential for the rule of law to
obtain that it should ever be present in the people’s consciousness, its language as much as possible
should be understood in the sense they have in common use. What it says according to the text of the

provision to be construed compels acceptance and negates the power of the courts to alter it, based on
the postulate that the framers and the people mean what they say. Thus there are cases where the need
for construction is reduced to a minimum.32 (Emphasis supplied.)
Let us dissect and examine closely the provision in question:
(2) The Chairman and Commissioners [on Audit] shall be appointed by the President with the consent of
the Commission on Appointments for a term of seven years without reappointment. Of those first
appointed, the Chairman shall hold office for seven years, one commissioner for five years, and the other
commissioner for three years, without reappointment. Appointment to any vacancy shall be only for the
unexpired portion of the term of the predecessor. x x x (Emphasis added.)
The first sentence is unequivocal enough. The COA Chairman shall be appointed by the President for a
term of seven years, and if he has served the full term, then he can no longer be reappointed or
extended another appointment. In the same vein, a Commissioner who was appointed for a term of
seven years who likewise served the full term is barred from being reappointed. In short, once the
Chairman or Commissioner shall have served the full term of seven years, then he can no longer be
reappointed to either the position of Chairman or Commissioner. The obvious intent of the framers is to
prevent the president from "dominating" the Commission by allowing him to appoint an additional or
two more commissioners.
The same purpose obtains in the second sentence of Sec. 1(2). The Constitutional Convention barred
reappointment to be extended to commissioner-members first appointed under the 1987 Constitution
to prevent the President from controlling the commission. Thus, the first Chairman appointed under the
1987 Constitution who served the full term of seven years can no longer be extended a reappointment.
Neither can the Commissioners first appointed for the terms of five years and three years be eligible for
reappointment. This is the plain meaning attached to the second sentence of Sec. 1(2), Article IX(D).
On the other hand, the provision, on its face, does not prohibit a promotional appointment from
commissioner to chairman as long as the commissioner has not served the full term of seven years,
further qualified by the third sentence of Sec. 1(2), Article IX (D) that "the appointment to any vacancy
shall be only for the unexpired portion of the term of the predecessor." In addition, such promotional
appointment to the position of Chairman must conform to the rotational plan or the staggering of terms
in the commission membership such that the aggregate of the service of the Commissioner in said
position and the term to which he will be appointed to the position of Chairman must not exceed seven
years so as not to disrupt the rotational system in the commission prescribed by Sec. 1(2), Art. IX(D).
In conclusion, there is nothing in Sec. 1(2), Article IX(D) that explicitly precludes a promotional
appointment from Commissioner to Chairman, provided it is made under the aforestated circumstances
or conditions.
It may be argued that there is doubt or ambiguity on whether Sec. 1(2), Art. IX(D), as couched, allows a
promotional appointment from Commissioner to Chairman. Even if We concede the existence of an
ambiguity, the outcome will remain the same. J.M. Tuason & Co., Inc.33 teaches that in case of doubt as
to the import and react of a constitutional provision, resort should be made to extraneous aids of
construction, such as debates and proceedings of the Constitutional Convention, to shed light on and
ascertain the intent of the framers or the purpose of the provision being construed.
4
The understanding of the Convention as to what was meant by the terms of the constitutional provision
which was the subject of the deliberation goes a long way toward explaining the understanding of the
people when they ratified it. The Court applied this principle in Civil Liberties Union v. Executive
Secretary:
A foolproof yardstick in constitutional construction is the intention underlying the provision under
consideration. Thus, it has been held that the Court in construing a Constitution should bear in mind the
object sought to be accomplished by its adoption, and the evils, if any, sought to be prevented or
remedied. A doubtful provision will be examined in the light of the history of the times, and the
condition and circumstances under which the Constitution was framed. The object is to ascertain the
reason which induced the framers of the Constitution to enact the particular provision and the purpose
sought to be accomplished thereby, in order to construe the whole as to make the words consonant to
that reason and calculated to effect that purpose.34 (Emphasis added.)
And again in Nitafan v. Commissioner on Internal Revenue:
x x x The ascertainment of that intent is but in keeping with the fundamental principle of constitutional
construction that the intent of the framers of the organic law and of the people adopting it should be
given effect. The primary task in constitutional construction is to ascertain and thereafter assure the
realization of the purpose of the framers and of the people in the adoption of the Constitution. It may
also be safely assumed that the people in ratifying the Constitution were guided mainly by the
explanation offered by the framers.35 (Emphasis added.)
Much weight and due respect must be accorded to the intent of the framers of the Constitution in
interpreting its provisions.
Far from prohibiting reappointment of any kind, including a situation where a commissioner is upgraded
to the position of chairman, the 1987 Constitution in fact unequivocally allows promotional
appointment, but subject to defined parameters. The ensuing exchanges during the deliberations of the
1986 Constitutional Commission (CONCOM) on a draft proposal of what would eventually be Sec. 1(2),
Art. IX(D) of the present Constitution amply support the thesis that a promotional appointment is
allowed provided no one may be in the COA for an aggregate threshold period of 7 years:
MS. AQUINO: In the same paragraph, I would propose an amendment x x x. Between x x x the sentence
which begins with "In no case," insert THE APPOINTEE SHALL IN NO CASE SERVE AN AGGREGATE PERIOD
OF MORE THAN SEVEN YEARS. I was thinking that this may approximate the situation wherein a
commissioner is first appointed as chairman. I am willing to withdraw that amendment if there is a
representation on the part of the Committee that there is an implicit intention to prohibit a term that in
the aggregate will exceed more than seven years. If that is the intention, I am willing to withdraw my
amendment.
MR. MONSOD: If the [Gentlewoman] will read the whole Article, she will notice that there is no
reappointment of any kind and, therefore, as a whole there is no way somebody can serve for more than
seven years. The purpose of the last sentence is to make sure that this does not happen by including in
the appointment both temporary and acting capacities.
MS. AQUINO. Yes. Reappointment is fine; that is accounted for. But I was thinking of a situation wherein
a commissioner is upgraded to a position of chairman. But if this provision is intended to cover that kind
of situation, then I am willing to withdraw my amendment.

MR. MONSOD. It is covered.
MR. FOZ. There is a provision on line 29 precisely to cover that situation. It states: "Appointment to any
vacancy shall be only for the unexpired portion of the predecessor." In other words, if there is upgrading
of position from commissioner to chairman, the appointee can serve only the unexpired portion of the
term of the predecessor.
MS. AQUINO: But we have to be very specific x x x because it might shorten the term because he serves
only the unexpired portion of the term of the predecessor.
MR. FOZ: He takes it at his own risk. He knows that he will only have to serve the unexpired portion of
the term of the predecessor. (Emphasis added.)36
The phrase "upgrading of position" found in the underscored portion unmistakably shows that Sec. 1(2),
Art. IX(D) of the 1987 Constitution, for all its caveat against reappointment, does not per se preclude, in
any and all cases, the promotional appointment or upgrade of a commissioner to chairman, subject to
this proviso: the appointee’s tenure in office does not exceed 7 years in all. Indeed, such appointment
does not contextually come within the restricting phrase "without reappointment" twice written in that
section. Delegate Foz even cautioned, as a matter of fact, that a sitting commissioner accepting a
promotional appointment to fill up an unexpired portion pertaining to the higher office does so at the
risk of shortening his original term. To illustrate the Foz’s concern: assume that Carague left COA for
reasons other than the expiration of his threshold 7-year term and Villar accepted an appointment to fill
up the vacancy. In this situation, the latter can only stay at the COA and served the unexpired portion of
Carague’s unexpired term as departing COA Chairman, even if, in the process, his (Villar’s) own 7-year
term as COA commissioner has not yet come to an end. In this illustration, the inviolable regularity of the
intervals between appointments in the COA is preserved.
Moreover, jurisprudence tells us that the word "reappointment" means a second appointment to one
and the same office.37 As Justice Arsenio Dizon (Justice Dizon) aptly observed in his dissent in Visarra v.
Miraflor,38 the constitutional prohibition against the reappointment of a commissioner refers to his
second appointment to the same office after holding it for nine years.39 As Justice Dizon observed, "[T]he
occupant of an office obviously needs no such second appointment unless, for some valid cause, such as
the expiration of his term or resignation, he had ceased to be the legal occupant thereof." 40 The
inevitable implication of Justice Dizon’s cogent observation is that a promotion from commissioner to
chairman, albeit entailing a second appointment, involves a different office and, hence, not, in the strict
legal viewpoint, a reappointment. Stated a bit differently, "reappointment" refers to a movement to one
and the same office. Necessarily, a movement to a different position within the commission (from
Commissioner to Chairman) would constitute an appointment, or a second appointment, to be precise,
but not reappointment.
A similar opinion was expressed in the same Visarra case by the concurring Justice Angelo Bautista,
although he expressly alluded to a promotional appointment as not being a prohibited appointment
under Art. X of the 1935 Constitution.
Petitioner’s invocation of Matibag as additional argument to contest the constitutionality of Villar’s
elevation to the COA chairmanship is inapposite. In Matibag, then President Macapagal-Arroyo
appointed, ad interim, Alfredo Benipayo as COMELEC Chairman and Resurreccion Borra and Florentino
Tuason as Commissioners, each for a term of office of seven (7) years. All three immediately took their
oath of, and assumed, office. These appointments were twice renewed because the Commission on
5
Appointments failed to act on the first two ad interim appointments. Via a petition for prohibition, some
disgruntled COMELEC officials assail as infirm the appointments of Benipayo, et al.
Matibag lists (4) four situations where the prohibition on reappointment would arise, or to be specific,
where the proviso "[t]he Chairman and the Commissioners shall be appointed x x x for a term of seven
years without reappointment" shall apply. Justice Antonio T. Carpio declares in his dissent that Villar’s
appointment falls under a combination of two of the four situations.
Conceding for the nonce the correctness of the premises depicted in the situations referred to in
Matibag, that case is of doubtful applicability to the instant petition. Not only is it cast against a different
milieu, but the lis mota of the case, as expressly declared in the main opinion, "is the very constitutional
issue raised by petitioner."41 And what is/are this/these issue/s? Only two defined issues in Matibag are
relevant, viz: (1) the nature of an ad interim appointment and subsumed thereto the effect of a by-
passed ad interim appointment; and (2) the constitutionality of renewals of ad interim appointments.
The opinion defined these issues in the following wise: "Petitioner [Matibag] filed the instant petition
questioning the appointment and the right to remain in office of Benipayo, Borra and Tuason as
Chairman and Commissioners of the COMELEC, respectively. Petitioner claims that the ad interim
appointments of Benipayo, et al. violate the constitutional provisions on the independence of COMELEC,
as well as on the prohibitions on temporary appointments and reappointments of its Chairman and
members." As may distinctly be noted, an upgrade or promotion was not in issue in Matibag.
We shall briefly address the four adverted situations outlined in Matibag, in which, as there urged, the
uniform proviso on no reappointment––after a member of any of the three constitutional commissions is
appointed for a term of seven (7) years––shall apply. Matibag made the following formulation:
The first situation is where an ad interim appointee after confirmation by the Commission on
Appointments serves his full 7-year term. Such person cannot be reappointed whether as a member or
as chairman because he will then be actually serving more than seven (7) years.
The second situation is where the appointee, after confirmation, serves part of his term and then resigns
before his seven-year term of office ends. Such person cannot be reappointed whether as a member or
as chair to a vacancy arising from retirement because a reappointment will result in the appointee
serving more than seven years.
The third situation is where the appointee is confirmed to serve the unexpired portion of someone who
died or resigned, and the appointee completes the unexpired term. Such person cannot be reappointed
whether as a member or as chair to a vacancy arising from retirement because a reappointment will
result in the appointee also serving more than seven (7) years.
The fourth situation is where the appointee has previously served a term of less than seven (7) years,
and a vacancy arises from death or resignation. Even if it will not result in his serving more than seven
years, a reappointment of such person to serve an unexpired term is also prohibited because his
situation will be similar to those appointed under the second sentence of Sec. 1(20), Art. IX-C of the
Constitution [referring to the first set of appointees (the 5 and 3 year termers) whose term of office are
less than 7 years but are barred from being reappointed under any situation]."
The situations just described constitute an obiter dictum, hence without the force of adjudication, for
the corresponding formulation of the four situations was not in any way necessary to resolve any of the
determinative issues specifically defined in Matibag. An opinion entirely unnecessary for the decision of

the case or one expressed upon a point not necessarily involved in the determination of the case is an
obiter.43
There can be no serious objection to the scenarios depicted in the first, second and third situations, both
hewing with the proposition that no one can stay in any of the three independent commissions for an
aggregate period of more than seven (7) years. The fourth situation, however, does not commend itself
for concurrence inasmuch as it is basically predicated on the postulate that reappointment, as earlier
herein defined, of any kind is prohibited under any and all circumstances. To reiterate, the word
"reappointment" means a second appointment to one and the same office; and Sec. 1(2), Art. IX(D) of
the 1987 Constitution and similar provisions do not peremptorily prohibit the promotional appointment
of a commissioner to chairman, provided the new appointee’s tenure in both capacities does not exceed
seven (7) years in all. The statements in Matibag enunciating the ban on reappointment in the aforecited
fourth situation, perforce, must be abandoned, for, indeed, a promotional appointment from the
position of Commissioner to that of Chairman is constitutionally permissible and not barred by Sec. 1(2),
Art. IX (D) of the Constitution.
One of the aims behind the prohibition on reappointment, petitioner urges, is to ensure and preserve
the independence of COA and its members,44 citing what the dissenting Justice J.B.L Reyes wrote in
Visarra, that once appointed and confirmed, the commissioners should be free to act as their conscience
demands, without fear of retaliation or hope or reward. Pursued to its logical conclusion, petitioner’s
thesis is that a COA member may no longer act with independence if he or she can be rewarded with a
promotion or appointment, for then he or she will do the bidding of the appointing authority in the hope
of being promoted or reappointed.
The unstated reason behind Justice J.B.L. Reyes’ counsel is that independence is really a matter of
choice. Without taking anything away from the gem imparted by the eminent jurist, what Chief Justice
Moran said on the subject of independence is just as logically sound and perhaps even more compelling,
as follows:
A Commissioner, hopeful of reappointment may strive to do good. Whereas, without that hope or other
hope of material reward, his enthusiasm may decline as the end of his term approaches and he may
even lean to abuses if there is no higher restrain in his moral character. Moral character is no doubt the
most effective safeguard of independence. With moral integrity, a commissioner will be independent
with or without the possibility of reappointment.45
The Court is likewise unable to sustain Villar’s proposition that his promotional appointment as COA
Chairman gave him a completely fresh 7-year term––from February 2008 to February 2015––given his
four (4)-year tenure as COA commissioner devalues all the past pronouncements made by this Court,
starting in De Vera, then Imperial, Visarra, and finally Matibag. While there had been divergence of
opinion as to the import of the word "reappointment," there has been unanimity on the dictum that in
no case can one be a COA member, either as chairman or commissioner, or a mix of both positions, for
an aggregate term of more than 7 years. A contrary view would allow a circumvention of the aggregate
7-year service limitation and would be constitutionally offensive as it would wreak havoc to the spirit of
the rotational system of succession. Imperial, passing upon the rotational system as it applied to the
then organizational set-up of the COMELEC, stated:
The provision that of the first three commissioners appointed "one shall hold office for 9 years, another
for 6 years and the third for 3 years," when taken together with the prescribed term of office for 9 years
6
without reappointment, evinces a deliberate plan to have a regular rotation or cycle in the membership
of the commission, by having subsequent members appointable only once every three years.46
To be sure, Villar’s appointment as COA Chairman partakes of a promotional appointment which, under
appropriate setting, would be outside the purview of the constitutional reappointment ban in Sec 1(2),
Art. IX(D) of the Constitution. Nonetheless, such appointment, even for the term appearing in the
underlying appointment paper, ought still to be struck down as unconstitutional for the reason as shall
be explained.
Consider:
In a mandatory tone, the aforecited constitutional provision decrees that the appointment of a COA
member shall be for a fixed 7-year term if the vacancy results from the expiration of the term of the
predecessor. We reproduce in its pertinent part the provision referred to:
(2) The Chairman and Commissioners [on Audit] shall be appointed x x x for a term of seven years
without reappointment. x x x Appointment to any vacancy shall be only for the unexpired portion of the
term of the predecessor. x x x
Accordingly, the promotional appointment as COA Chairman of Villar for a stated fixed term of less than
seven (7) years is void for violating a clear, but mandatory constitutional prescription. There can be no
denying that the vacancy in the position of COA chairman when Carague stepped down in February 2,
2008 resulted from the expiration of his 7-year term. Hence, the appointment to the vacancy thus
created ought to have been one for seven (7) years in line with the verbal legis approach47 of interpreting
the Constitution. It is to be understood, however, following Gaminde, that in case of a belated
appointment, the interval between the start of the term and the actual appointment shall be counted
against the 7-year term of the appointee. Posing, however, as an insurmountable barrier to a full 7-year
appointment for Villar is the rule against one serving the commission for an aggregate term of more than
seven (7) years.
Where the Constitution or, for that matter, a statute, has fixed the term of office of a public official, the
appointing authority is without authority to specify in the appointment a term shorter or longer than
what the law provides. If the vacancy calls for a full seven-year appointment, the President is without
discretion to extend a promotional appointment for more or for less than seven (7) years. There is no in
between. He or she cannot split terms. It is not within the power of the appointing authority to override
the positive provision of the Constitution which dictates that the term of office of members of
constitutional bodies shall be seven (7) years.48 A contrary reasoning "would make the term of office to
depend upon the pleasure or caprice of the [appointing authority] and not upon the will [of the framers
of the Constitution] of the legislature as expressed in plain and undoubted language in the law."49
In net effect, then President Macapagal-Arroyo could not have had, under any circumstance, validly
appointed Villar as COA Chairman, for a full 7-year appointment, as the Constitution decrees, was not
legally feasible in light of the 7-year aggregate rule. Villar had already served 4 years of his 7-year term as
COA Commissioner. A shorter term, however, to comply with said rule would also be invalid as the
corresponding appointment would effectively breach the clear purpose of the Constitution of giving to
every appointee so appointed subsequent to the first set of commissioners, a fixed term of office of 7
years. To recapitulate, a COA commissioner like respondent Villar who serves for a period less than seven
(7) years cannot be appointed as chairman when such position became vacant as a result of the
expiration of the 7-year term of the predecessor (Carague). Such appointment to a full term is not valid

and constitutional, as the appointee will be allowed to serve more than seven (7) years under the
constitutional ban.
On the other hand, a commissioner who resigned before serving his 7- year term can be extended an
appointment to the position of chairman for the unexpired period of the term of the latter, provided the
aggregate of the period he served as commissioner and the period he will serve as chairman will not
exceed seven (7) years. This situation will only obtain when the chairman leaves the office by reason of
death, disability, resignation or impeachment. Let us consider, in the concrete, the situation of then
Chairman Carague and his successor, Villar. Carague was appointed COA Chairman effective February 2,
2001 for a term of seven (7) years, or up to February 2, 2008. Villar was appointed as Commissioner on
February 2, 2004 with a 7-year term to end on February 2, 2011. If Carague for some reason vacated the
chairmanship in 2007, then Villar can resign as commissioner in the same year and later be appointed as
chairman to serve only up to February 2, 2008, the end of the unexpired portion of Carague’s term. In
this hypothetical scenario, Villar’s appointment to the position of chairman is valid and constitutional as
the aggregate periods of his two (2) appointments will only be five (5) years which neither distorts the
rotational scheme nor violates the rule that the sum total of said appointments shall not exceed seven
(7) years. Villar would, however, forfeit two (2) years of his original seven (7)-year term as Commissioner,
since, by accepting an upgraded appointment to Carague’s position, he agreed to serve the unexpired
portion of the term of the predecessor. As illustrated earlier, following Mr. Foz’s line, if there is an
upgrading of position from commissioner to chairman, the appointee takes the risk of cutting short his
original term, knowing pretty well before hand that he will serve only the unexpired portion of the term
of his predecessor, the outgoing COA chairman.
In the extreme hypothetical situation that Villar vacates the position of chairman for causes other than
the expiration of the original term of Carague, the President can only appoint the successor of Villar for
the unexpired portion of the Carague term in line with Sec. 1(2), Art. IX(D) of the Constitution. Upon the
expiration of the original 7-year term of Carague, the President can appoint a new chairman for a term of
seven (7) full years.
In his separate dissent, my esteemed colleague, Mr. Justice Mendoza, takes strong exception to the view
that the promotional appointment of a sitting commissioner is plausible only when he is appointed to
the position of chairman for the unexpired portion of the term of said official who leaves the office by
reason of any the following reasons: death, disability, resignation or impeachment, not when the
vacancy arises out as a result of the expiration of the 7-year term of the past chairman. There is nothing
in the Constitution, so Justice Mendoza counters, that restricts the promotion of an incumbent
commissioner to the chairmanship only in instances where the tenure of his predecessor was cut short
by any of the four events referred to. As earlier explained, the majority view springs from the interplay of
the following premises: The explicit command of the Constitution is that the "Chairman and the
Commissioners shall be appointed by the President x x x for a term of seven years [and] appointment to
any vacancy shall be only for the unexpired portion of the term of the predecessor." To repeat, the
President has two and only two options on term appointments. Either he extends an appointment for a
full 7-year term when the vacancy results from the expiration of term, or for a shorter period
corresponding to the unexpired term of the predecessor when the vacancy occurs by reason of death,
physical disability, resignation or impeachment. If the vacancy calls for a full seven-year appointment,
the Chief Executive is barred from extending a promotional appointment for less than seven years. Else,
the President can trifle with terms of office fixed by the Constitution.
Justice Mendoza likewise invites attention to an instance in history when a commissioner had been
promoted chairman after the expiration of the term of his predecessor, referring specifically to the
appointment of then COMELEC Commissioner Gaudencio Garcia to succeed Jose P. Carag after the
7
expiration of the latter’s term in 1959 as COMELEC chairman. Such appointment to the position of
chairman is not constitutionally permissible under the 1987 Constitution because of the policy and intent
of its framers that a COA member who has served his full term of seven (7) years or even for a shorter
period can no longer be extended another appointment to the position of chairman for a full term of
seven (7) years. As revealed in the deliberations of the Constitutional Commission that crafted the 1987
Constitution, a member of COA who also served as a commissioner for less than seven (7) years in said
position cannot be appointed to the position of chairman for a full term of seven (7) years since the
aggregate will exceed seven (7) years. Thus, the adverted Garcia appointment in 1959 made under the
1935 Constitution cannot be used as a precedent to an appointment of such nature under the 1987
Constitution. The dissent further notes that the upgrading remained uncontested. In this regard, suffice
it to state that the promotion in question was either legal or it was not. If it were not, no amount of
repetitive practices would clear it of invalidating taint.
Lastly, Villar’s appointment as chairman ending February 2, 2011 which Justice Mendoza considers as
valid is likewise unconstitutional, as it will destroy the rationale and policy behind the rotational system
or the staggering of appointments and terms in COA as prescribed in the Constitution. It disturbs in a
way the staggered rotational system of appointment under Sec. 1(2), Art. IX(D) of the 1987 Constitution.
Consider: If Villar’s term as COA chairman up to February 2, 2011 is viewed as valid and constitutional as
espoused by my esteemed colleague, then two vacancies have simultaneously occurred and two (2) COA
members going out of office at once, opening positions for two (2) appointables on that date as
Commissioner San Buenaventura’s term also expired on that day. This is precisely one of the mischiefs
the staggering of terms and the regular intervals appointments seek to address. Note that San
Buenaventura was specifically appointed to succeed Villar as commissioner, meaning she merely
occupied the position vacated by her predecessor whose term as such commissioner expired on
February 2, 2011. The result is what the framers of the Constitution doubtless sought to avoid, a sitting
President with a 6-year term of office, like President Benigno C. Aquino III, appointing all or at least two
(2) members of the three-man Commission during his term. He appointed Ma. Gracia Pulido-Tan as
Chairman for the term ending February 2, 2015 upon the relinquishment of the post by respondent
Villar, and Heidi Mendoza was appointed Commissioner for a 7-year term ending February 2, 2018 to
replace San Buenaventura. If Justice Mendoza’s version is adopted, then situations like the one which
obtains in the Commission will definitely be replicated in gross breach of the Constitution and in clear
contravention of the intent of its framers. Presidents in the future can easily control the Commission
depriving it of its independence and impartiality.
To sum up, the Court restates its ruling on Sec. 1(2), Art. IX(D) of the Constitution, viz:
1. The appointment of members of any of the three constitutional commissions, after the
expiration of the uneven terms of office of the first set of commissioners, shall always be for a
fixed term of seven (7) years; an appointment for a lesser period is void and unconstitutional.
The appointing authority cannot validly shorten the full term of seven (7) years in case of the
expiration of the term as this will result in the distortion of the rotational system prescribed
by the Constitution.
2. Appointments to vacancies resulting from certain causes (death, resignation, disability or
impeachment) shall only be for the unexpired portion of the term of the predecessor, but
such appointments cannot be less than the unexpired portion as this will likewise disrupt the
staggering of terms laid down under Sec. 1(2), Art. IX(D).

3. Members of the Commission, e.g. COA, COMELEC or CSC, who were appointed for a full
term of seven years and who served the entire period, are barred from reappointment to any
position in the Commission. Corollarily, the first appointees in the Commission under the
Constitution are also covered by the prohibition against reappointment.
4. A commissioner who resigns after serving in the Commission for less than seven years is
eligible for an appointment to the position of Chairman for the unexpired portion of the term
of the departing chairman. Such appointment is not covered by the ban on reappointment,
provided that the aggregate period of the length of service as commissioner and the
unexpired period of the term of the predecessor will not exceed seven (7) years and provided
further that the vacancy in the position of Chairman resulted from death, resignation,
disability or removal by impeachment. The Court clarifies that "reappointment" found in Sec.
1(2), Art. IX(D) means a movement to one and the same office (Commissioner to
Commissioner or Chairman to Chairman). On the other hand, an appointment involving a
movement to a different position or office (Commissioner to Chairman) would constitute a
new appointment and, hence, not, in the strict legal sense, a reappointment barred under the
Constitution.
5. Any member of the Commission cannot be appointed or designated in a temporary or
acting capacity.
WHEREFORE the petition is PARTLY GRANTED. The appointment of then Commissioner Reynaldo A. Villar
to the position of Chairman of the Commission on Audit to replace Guillermo N. Carague, whose term of
office as such chairman has expired, is hereby declared UNCONSTITUTIONAL for violation of Sec. 1(2),
Art. IX(D) of the Constitution.
SO ORDERED.
SUBJECT MATTER:Powers and Functions of the President; Power of Appointment
CASE SUMMARY:
In this case, after Carague (former COA chairman) finished his 7-year term, the respondent was
appointed as COA Chairman while serving his fourth year as commissioner. However, he was to serve for
3 years only, the unexpired portion of Villar’s 7-year term of office. Villar insists that his appointment
accorded him a fresh 7-year term and should serve full 7 years as chairman instead of 3 years. The SC
ruled that while his appointment is not a reappointment, it is still unconstitutional, as the president does
not have the power to extend a promotional appointment for more or less than 7 years. It is also not
possible for Villar to serve the full 7-year term as he has already served 4 years as commissioner.
DOCTRINES:
Sec. 1 (2), Art. IX(D) of the Constitution:
The Chairman and Commissioners [on Audit] shall be appointed by the President with the consent of the
Commission on Appointments for a term of seven years without reappointment. Of those first
appointed, the Chairman shall hold office for seven years, one commissioner for five years, and the other
commissioner for three years, without reappointment. Appointment to any vacancy shall be only for the
unexpired portion of the term of the predecessor. In no case shall any member be appointed or
designated in a temporary or acting capacity.
8
Jurisprudence tells us that the word “reappointment” means a second appointment to one and the same
office; Necessarily, a movement to a different position within the commission (from Commissioner to
Chairman) would constitute an appointment, or a second appointment, to be precise, but not
reappointment.
Where the Constitution or, for that matter, a statute, has fixed the term of office of a public official, the
appointing authority is without authority to specify in the appointment a term shorter or longer than
what the law provides—if the vacancy calls for a full seven-year appointment, the President is without
discretion to extend a promotional appointment for more or for less than seven (7) years.
The explicit command of the Constitution is that the “Chairman and the Commissioners shall be
appointed by the President xxx for a term of seven years [and] appointment to any vacancy shall be only
for the unexpired portion of the term of the predecessor.
A commissioner who resigns after serving in the Commission for less than seven years is eligible for an
appointment to the position of Chairman for the unexpired portion of the term of the departing
chairman
FACTS:
 This is a petition for Certiorari and Prohibition filed by Dennis A. B. Funa challenging the
constitutionality of the appointment of Reynaldo A. Villar as Chairman of the Commission on Audit.
 On February 15, 2001, President Gloria MacapagalArroyo appointed Guillermo N. Carague as
Chairman of the Commission on Audit (COA) for a term of seven (7) years, pursuant to the 1987
Constitution. Carague’s term of office started on February 2, 2001 to end on February 2, 2008.
 Meanwhile, on February 7, 2004, President Macapagal Arroyo appointed Reynaldo A. Villar as the
third member of the COA for a term of seven (7) years starting February 2, 2004 until February 2,
2011.
 Following Carague’sretirement on February 2, 2008 and during the fourth year of Villar as COA
Commissioner, Villar was appointed as COA Chairman on April 18, 2008.
 He was to serve as Chairman of COA, as expressly indicated in the appointment papers, until the
expiration of the original term of his office as COA Commissioner or on February 2, 2011.
 Villar insists that his appointment as COA Chairman accorded him a fresh term of seven (7) years
which is yet to lapse. His term of office as chairman is up to February 2, 2015 or 7 years reckoned
from February 2, 2008 when he was appointed to that position.
ISSUE/S: Whether the assailed appointment of respondent Villar as COA Chairman is
unconstitutional.(YES)
HOLDING:
Yes, the appointment of Villar as COA Chairman is unconstitutional because according to Sec. 1 (2), Art.
IX(D) of the Constitution, “The Chairman and Commissioners [on Audit] shall be appointed by the
President with the consent of the Commission on Appointments for a term of seven years without
reappointment. Of those first appointed, the Chairman shall hold office for seven years, one
commissioner for five years, and the other commissioner for three years, without reappointment.
 9

Appointment to any vacancy shall be only for the unexpired portion of the term of the predecessor. In no
case shall any member be appointed or designated in a temporary or acting capacity.

The appointment of Villar, from Commissioner to Chairman, was not a reappointment. Jurisprudence
tells us that the word “reappointment” means a second appointment to one and the same
office.Necessarily, a movement to a different position within the commission (from Commissioner to
Chairman) would constitute an appointment, or a second appointment, to be precise, but not
reappointment.

However, the vacancy in the position of COA chairman when Carague stepped down in February 2, 2008
resulted from the expiration of his 7-year term. Therefore there in no unexpired portion of the
Carague’sterm. Thus the next appointed COA chairman should serve a 7-year term. However, in this
case, Villar has already served four years as commissioner, serving as COA chairman for full 7-year
term as COA chairman would unduly extend his term beyond the 7 years fixed by the constitution.
Where the Constitution or, for that matter, a statute, has fixed the term of office of a public official, the
appointing authority is without authority to specify in the appointment a term shorter or longer than
what the law provides—if the vacancy calls for a full seven-year appointment, the President is without
discretion to extend a promotional appointment for more or for less than seven (7) years. The explicit
command of the Constitution is that the “Chairman and the Commissioners shall be appointed by the
President for a term of seven years and appointment to any vacancy shall be only for the unexpired
portion of the term of the predecessor.
A commissioner who resigns after serving in the Commission for less than seven years is eligible for an
appointment to the position of Chairman for the unexpired portion of the term of the departing
chairman terms of office and appointments had already expired.

Petition is PARTLY GRANTED. The appointment of then Commissioner Reynaldo A. Villar to the
position of Chairman of the Commission on Audit to replace Guillermo N. Carague, whose term of
office as such chairman has expired, is hereby declared UNCONSTITUTIONAL for violation of Sec. 1(2),
Art. IX(D) of the Constitution.

EN BANC
G.R. No. 191672 November 25, 2014
DENNIS A. B. FUNA, Petitioner,
vs.
THE CHAIRMAN, CIVIL SERVICE COMMISSION, FRANCISCO T. DUQUE III, EXECUTIVE SECRETARY
LEANDRO R. MENDOZA, OFFICE OF THE PRESIDENT, Respondents.
DECISION
BERSAMIN, J.:
The independence of the Civil Service Commission (CSC) is explicitly mandated under Section 1,1 Article
IX-A of the 1987 Constitution. Additionally, Section 2,2 Article IX-A of the 1987 Constitution prohibits its
Members, during their tenure, from holding any other office or employment.
These constitutional provisions3 are central to this special civil action for certiorari and prohibition
brought to assail the designation of Hon. Francisco T. Duque III, Chairman of the CSC, as a member of the
Board of Directors or Trustees in an ex officio capacity of the (a) Government Service Insurance System
(GSIS); (b) Philippine Health Insurance Corporation (PHILHEALTH), (c) the Employees Compensation
Commission (ECC), and (d) the Home Development Mutual Fund (HDMF).
Antecedents
On January 11, 2010, then President Gloria Macapagal-Arroyo appointed Duque as Chairman of the CSC.
The Commission on Appointments confirmed Duque’s appointment on February 3, 2010.
On February 22, 2010,President Arroyo issued Executive Order No. 864 (EO 864), whose complete text is
quoted as follows:
EXECUTIVE ORDER NO. 864
INCLUSION OF THE CHAIRMAN OF THE CIVIL SERVICE COMMISSION IN THE BOARD OF
TRUSTEES/DIRECTORS OF THE GOVERNMENT SERVICE INSURANCE SYSTEM, PHILIPPINE HEALTH
INSURANCE CORPORATION, EMPLOYEES’ COMPENSATION COMMISSION AND THE HOME
DEVELOPMENT MUTUAL FUND
WHEREAS, Section 2 (1), Article IX-B of the 1987 Philippine Constitution provides that the civil service
embraces all branches, subdivisions, instrumentalities, and agencies of the Government, including
government-owned or controlled corporations with original charters;
WHEREAS, Section 3, Article IX-B of the 1987 Constitution mandates, among others, that the Civil Service
Commission (CSC), as the central personnel agency of the government, shall establish a career service
and adopt measures to promote morale, efficiency, integrity, responsiveness, progressiveness, and
courtesy in the civil service, and shall strengthen the merit and rewards system, integrate all human
10
resources development programs for all levels and ranks, and institutionalize a management climate
conducive to public accountability; WHEREAS, Section 14, Chapter 3, Title I-A, Book V of the
Administrative Code of 1987 (Executive Order No. 292) expressly states that the Chairman of the CSC
shall bea member of the Board of Directors or of other governing bodies of government entities whose
functions affect the career development, employment, status, rights, privileges, and welfare of
government officials and employees, such as the Government Service Insurance System, Foreign Service
Board, Foreign Trade Service Board, National Board for Teachers, and such other similar boards as may
be created by law;
WHEREAS, Presidential Decree No. 1 dated September 24, 1972, explicitly empowers the President of
the Republic of the Philippines to reorganize the entire Executive Branch of the National Government, as
a vital and priority measure to effect the desired changes and reforms in the social, economic and
political structure of the country;
WHEREAS, Section 18 (a), ArticleIV of Republic Act No. 7875 (An Act Instituting a National Health
Insurance Program For All Filipinos and Establishing the Philippine Health Insurance Corporation For The
Purpose) or otherwise known as the "National Health Insurance Act of 1995", Section 42 (G) of Republic
Act No. 8291 (An Act Amending Presidential Decree No. 1146, as amended, Expanding and Increasing the
Coverage of Benefits of the Government Service Insurance System, Instituting Reforms Therein and For
Other Purposes) or otherwise known as "The Government Service Insurance System Act of 1997, Article
176, Chapter 3 of Presidential Decree No. 626 (Employees’ Compensation and State Insurance Fund), and
Presidential Decree No. 1530 (Instituting a System of Voluntary Contributions for Housing Purpose[s]) or
otherwise known as the "Pag-ibig Fund" reveal that while the Chairman of the CSC is not included in the
list of those who could sit as a member of the Board of Directors of the Philhealth or of the Board of
Trustees of the GSIS, ECC and the Pag-ibig Fund, said laws did not expressly repeal Section 14, Chapter 3,
Title I-A, Book V of the Administrative Code of 1987 and Presidential Decree No. 1; WHEREAS, it is settled
that repeals by implication are not favored as laws are presumed to be passed with deliberation and full
knowledge of all laws existing on the subject;
WHEREAS, a scrutiny of the mandated functions and duties of the Board of Trustees of the GSIS, ECC and
HDMF and the Board of Directors of the PhilHealth shows that the same are all geared towards the
advancement of the welfare of government officials and employees, which functions fall within the
province of the CSC;
NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO, President of the Republic of the Philippines, by
virtue of the powers vested in me by law, do hereby order and direct:
Section 1. The Chairman of the Civil Service Commission shall sit as an Ex-Officio member of the Board of
Trustees of the Government Service Insurance System, Employees’ Compensation Commission and the
Home Development Mutual Fund and the Board of Directors of the Philippine Health Insurance
Corporation pursuant to Section 14, Chapter 3, Title I-A, Book V of Executive Order No. 292
(Administrative Code of 1987).
Section 2. This Executive Order shall take effect immediately.
Done in the City of Manila, this 22nd day of February, in the year of Our Lord, Two Thousand and Ten.4

Pursuant to EO 864, Duque was designated as a member of the Board of Directors or Trustees of the
following government-owned or government- controlled corporations (GOCCs): (a) GSIS; (b)
PHILHEALTH;(c) ECC; and (d) HDMF.
On April 8, 2010, petitioner Dennis A.B. Funa, in his capacity as taxpayer, concerned citizen and lawyer,
filed the instant petition challenging the constitutionality of EO 864, as well as Section 14, Chapter 3,
Title I-A, Book V of Executive Order No. 292 (EO 292), otherwise known as The Administrative Code of
1987, and the designation of Duque as a member of the Board of Directors or Trustees of the GSIS, PHIC,
ECC and HDMF for being clear violations of Section 1 and Section 2, Article IX-A of the 1987 Constitution.
The Case
The Court is confronted with the proper interpretation of Section 1 and Section 2, Article IX-A of the
1987 Constitution and Section 14, Chapter 3, Title I-A, Book V of EO 292 to ascertain the constitutionality
of the designation of Duque, in an ex officio capacity, as Director or Trustee of the GSIS, PHIC, ECC and
HDMF.
Petitioner asserts that EO 864 and Section 14, Chapter 3, Title I-A, Book V of EO 292 violate the
independence of the CSC, which was constitutionally created to be protected from outside influences
and political pressures due to the significance of its government functions. 5 He further asserts that such
independence is violated by the fact that the CSC is not a part of the Executive Branch of Government
while the concerned GOCCs are considered instrumentalities of the Executive Branch of the
Government.6 In this situation, the President may exercise his power of control over the CSC considering
that the GOCCs in which Duque sits as Board member are attached to the Executive Department.7
Petitioner argues that Section 14, Chapter 3, Title I-A, Book V of EO 292 unduly and unconstitutionally
expands the role of the CSC, which is primarily centered on personnel-related concerns involving
government workers, to include insurance, housing and health matters of employees in the government
service.8 He observes that the independence of the CSC will not be compromised if these matters are
instead addressed by entering into a memorandum of agreement or by issuing joint circulars with the
concerned agencies, rather than allowing a member of the CSC to sit as a member of the governing
Boards of these agencies.9
Petitioner notes that the charters of the GSIS, PHILHEALTH, ECC and HDMF do not mention that the CSC
Chairman sits as a member of their governing Boards in an ex officiocapacity.10 Such being the case, the
President may not amend the charters, which are enacted by Congress, by the mere issuance of an
executive order.11
Petitioner posits that EO 864 and Section 14, Chapter 3, Title I-A, Book V of EO 292 violate the
prohibition imposed upon members of constitutional commissions from holding any other office or
employment.12 A conflict of interest may arise in the event that a Board decision of the GSIS,
PHILHEALTH, ECC and HDMF concerning personnel-related matters is elevated to the CSC considering
that such GOCCs have original charters, and their employees are governed by CSC laws, rules and
regulations.13
In their Comment, respondents maintain that Duque’s membership in the governing Boards of the GSIS,
PHILHEALTH, ECC and HDMF is constitutional. They explain that EO 864 and Section 14, Chapter 3, Title
IA, Book V of EO 292 preserve the independence of the CSC considering that GOCCs with original
charters such as the GSIS, PHILHEALTH, ECC and HDMF are excluded from the supervision and control
11
that secretaries and heads exercise over the departments to which these GOCCs are
attached.14 Ultimately, these GOCCs are exempted from the executive control of the President.15
As to the matter of conflict of interest, respondents point out that Duque is just one member of the CSC,
or of the Boards of the GSIS, PHILHEALTH, ECC and HDMF, such that matters resolved by these bodies
may be resolved with or without Duque’s participation.16 Respondents submit that the prohibition
against holding any other office or employment under Section 2, Article IX-A of the 1987 Constitution
does not cover positions held without additional compensation in ex officio capacities. Relying on the
pronouncement in Civil Liberties Union v. Executive Secretary,17 they assert that since the 1987
Constitution, which provides a stricter prohibition against the holding of multiple offices by executive
officials, allows them to hold positions in ex officio capacities, the same rule is applicable to members of
the Constitutional Commissions.18 Moreover, the mandatory tenor of Section 14, Chapter 3, Title I-A,
Book V of EO 292 clearly indicates that the CSC Chairman’s membership in the governing bodies
mentioned therein merely imposes additional duties and functions as an incident and necessary
consequence of his appointment as CSC Chairman.19
Respondents insist that EO 864 and Section 14, Chapter 3, Title I-A, Book V of EO 292, as well as the
charters of the GSIS, PHILHEALTH, ECC and HDMF, are consistent with each other. While the charters of
these GOCCs do not provide that CSC Chairman shall be a member of their respective governing Boards,
there islikewise no prohibition mentioned under said charters.20 EO 864, issued in conformity with
Section 14, Chapter 3, Title I-A, Book V of EO 292, could not have impliedly amended the charters of the
GSIS, PHILHEALTH, ECC and HDMF because the former relates to the law on the CSC while the latter
involve the creation and incorporation of the respective GOCCs.21 As their subject matters differ from
each other, the enactment of the subsequent law is not deemed to repeal or amend the charters of the
GOCCs, being considered prior laws.22
Issue
Does the designation of Duque as member of the Board of Directors or Trustees of the GSIS,
PHILHEALTH, ECC and HDMF, in an ex officio capacity, impair the independence of the CSC and violate
the constitutional prohibition against the holding of dual or multiple offices for the Members of the
Constitutional Commissions?
Our Ruling
The Court partially grants the petition. The Court upholds the constitutionality of Section 14, Chapter 3,
Title I-A, Book V of EO 292, but declares unconstitutional EO 864 and the designation of Duque in an ex
officio capacity as a member of the Board of Directors or Trustees of the GSIS, PHILHEALTH, ECC and
HDMF.
1. Requisites of judicial review
Like almost all powers conferred by the Constitution, the power of judicial review is subject to
limitations, to wit: (1) there must be an actual case or controversy calling for the exercise of judicial
power; (2) the person challenging the act must have the standing to question the validity of the subject
act or issuance; otherwise stated, he must have a personal and substantial interest in the case such that
he has sustained, or will sustain, direct injury as a result of its enforcement; (3) the question of
constitutionality must be raised at the earliest opportunity; and (4) the issue of constitutionality must be
the very lis motaof the case.23

Here, the Office of the Solicitor General (OSG) only disputes the locus standi of petitioner who has filed
this suit in his capacity as taxpayer, concerned citizen and lawyer.24 In view of the earlier dispositions by
the Court in similar public law cases initiated by petitioner, we again affirm his locus standito bring a suit
of this nature. In Funa v. Agra,25 the Court has recently held:
x x x [T]he locus standi of the petitioner as a taxpayer, a concerned citizen and a lawyer to bring a suit
ofthis nature has already been settled in his favor in rulings by the Court on several other public law
litigations he brought. In Funa v. Villar, for one, the Court has held:
To have legal standing, therefore, a suitor must show that he has sustained or will sustain a "direct
injury" as a result of a government action, or have a "material interest" in the issue affected by the
challenged official act. However, the Court has time and again acted liberally on the locus standi
requirements and has accorded certain individuals, not otherwise directly injured, or with material
interest affected, by a Government act, standing to sue provided a constitutional issue of critical
significance is at stake. The rule on locus standi is after all a mere procedural technicality in relation to
which the Court, in a catena of cases involving a subject of transcendental import, has waived, or
relaxed, thus allowing non-traditional plaintiffs, such as concerned citizens, taxpayers, voters or
legislators, to sue in the public interest, albeit they may not have been personally injured by the
operation of a law or any other government act. In David, the Court laid out the bare minimum norm
before the so-called "non-traditional suitors" may be extended standing to sue, thusly:
1.) For taxpayers, there must be a claim of illegal disbursement of public funds or that the tax
measure is unconstitutional;
2.) For voters, there must be a showing of obvious interest in the validity of the election law
in question;
3.) For concerned citizens, there must be a showing that the issues raised are of
transcendental importance which must be settled early; and
4.) For legislators, there must be a claim that the official action complained of infringes their
prerogatives as legislators.
This case before Us is of transcendental importance, since it obviously has "far-reaching implications,"
and there is a need to promulgate rules that will guide the bench, bar, and the public in future analogous
cases. We, thus, assume a liberal stance and allow petitioner to institute the instant petition.20 (Bold
emphasis supplied)
In Funa v. Ermita, the Court recognized the locus standi of the petitioner as a taxpayer, a concerned
citizen and a lawyer because the issue raised therein involved a subject of transcendental importance
whose resolution was necessary to promulgate rules to guide the Bench, Bar, and the public in similar
cases.
The Court notes, however, that during the pendency of this petition, Duque’s designation as Director or
Trustee of the GSIS, PHILHEALTH, ECC and PHIC could have terminated or been rendered invalid by the
enactment of Republic Act No. 10149,26 thus causing this petition and the main issue tendered herein
moot and academic. Pertinent provisions of Republic Act No.10149, which took effect on June 6, 2011,
state:
12
SEC. 13. Number of Directors/Trustees.—The present number of Directors/Trustees provided in the
charter of the GOCCs shall be maintained.
SEC. 14. Ex Officio Alternates.—The ex officio members of the GOCC may designate their respective
alternates who shall be the officials next-in-rank to them and whose acts shall be considered the acts of
their principals.
SEC. 15. Appointment of the Board of Directors/Trustees of GOCCs.—An Appointive Director shall be
appointed by the President of the Philippines from a shortlist prepared by the GCG.
The GCG shall formulate its rules and criteria in the selection and nomination of prospective appointees
and shall cause the creation of search committees to achieve the same. All nominees included in the list
submitted by the GCG to the President shall meet the Fit and Proper Rule as defined un this Act and such
other qualifications which the GCG may determine taking into consideration the unique requirements of
each GOCC. The GCG shall ensure that the shortlist shall exceed by at least fifty percent (50%) of the
number of directors /trustees tobe appointed. In the event that the President does not see fit to appoint
any of the nominees included in the shortlist, the President shall ask the GCG to submit additional
nominees.
SEC. 17. Term of Office.—Any provision in the charters of each GOCC to the contrary notwithstanding,
the term of office of each Appointive Director shall be for one(1) year, unless sooner removed for cause:
Provided, however,That the Appointive Director shall continue to hold office until the successor is
appointed. An Appointive Director may be nominated by the GCG for reappointment by the President
only if one obtains a performance score of above average or its equivalent or higher in the immediately
preceding year of tenure as Appointive Director based on the performance criteria for Appointive
Directors for the GOCC.
Appointed to any vacancy shall be only for the unexpired term of the predecessor. The appointment of a
director to fill such vacancy shall be in accordance with the manner provided in Section 15 of this Act.
Any provision of law to the contrary notwithstanding, all incumbent CEOs and appointive members of
the Board of GOCCs shall, upon approval of this Act, have a term of office until June 30, 2011, unless
sooner replaced by the President: Provided, however, That the incumbent CEOs and appointive
members of the Board shall continue in office until the successor have been appointed by the President.
A moot and academic case is one thatceases to present a justiciable controversy by virtue of supervening
events, so that a declaration thereon would be of no practical use or value.27
2. Unconstitutionality of Duque’sdesignation as member of the governing boards of the GSIS,
PHIC, ECC and HDMF
Nonetheless, this Court has exercised its power of judicial review in cases otherwise rendered moot and
academic by supervening events on the basis of certain recognized exceptions, namely: (1) there is a
grave violation of the Constitution; (2) the case involves a situation of exceptional character and is of
paramount public interest; (3) the constitutional issue raised requires the formulation of controlling
principles to guide the Bench, the Bar and the public; and (4) the case is capable of repetition yet evading
review.28

The situation now obtaining definitely falls under the requirements for the review of a moot and
academic case. For the guidance of and as a restraint upon the future,29 the Court will not abstain from
exercising its power of judicial review, the cessation of the controversy notwithstanding. We proceed to
resolve the substantive issue concerning the constitutionality of Duque’s ex officio designation as
member of the Board of Directors or Trustees of the GSIS, PHILHEALTH, ECC and HDMF.
The underlying principle for the resolution of the present controversy rests on the correct application of
Section 1 and Section 2, Article IX-A of the 1987 Constitution, which provide: Section 1. The
Constitutional Commissions, which shall be independent, are the Civil Service Commission, the
Commission on Elections, and the Commission on Audit.
Section 2. No Member of a Constitutional Commission shall, during his tenure, hold any other office or
employment. Neither shall he engage in the practice of any profession or in the active management or
control of any business which in any way may be affected by the functions of his office, nor shall he be
financially interested, directly or indirectly, in any contract with, or in any franchise or privilege granted
by the Government, any of its subdivisions, agencies, or instrumentalities, including government-owned
or controlled corporations or their subsidiaries. Section 1, Article IX-A of the 1987 Constitution expressly
describes all the Constitutional Commissions as "independent."Although their respective functions are
essentially executive in nature, they are not under the control of the President of the Philippines in the
discharge of such functions. Each of the Constitutional Commissions conducts its own proceedings under
the applicable laws and its own rules and in the exercise of its own discretion. Its decisions, orders and
rulings are subject only to review on certiorariby the Court as provided by Section 7, Article IX-A of the
1987 Constitution.30 To safeguard the independence of these Commissions, the 1987 Constitution,
among others,31 imposes under Section 2, Article IX-A of the Constitution certain inhibitions and
disqualifications upon the Chairmen and members to strengthen their integrity, to wit:
(a) Holding any other office or employment during their tenure;
(b) Engaging in the practice of any profession;
(c) Engaging in the active management or control of any business which in any way may be
affected by the functions of his office; and
(d) Being financially interested, directly or indirectly, in any contract with, or in any franchise
or privilege granted by the Government, any of its subdivisions, agencies or instrumentalities,
including government-owned or – controlled corporations or their subsidiaries.32
The issue herein involves the first disqualification abovementioned, which is the disqualification from
holding any other office or employment during Duque’s tenure as Chairman of the CSC. The Court finds it
imperative to interpret this disqualification in relation to Section 7, paragraph (2), Article IX-B of the
Constitution and the Court’s pronouncement in Civil Liberties Union v. Executive Secretary.
Section 7, paragraph (2),Article IX-B reads:
Section 7. x x x
13
Unless otherwise allowed by law or the primary functions of his position, no appointive official shall hold
any other office or employment in the Government or any subdivision, agency or instrumentality
thereof,including government-owned or controlled corporations or their subsidiaries.
In Funa v. Ermita,33 where petitioner challenged the concurrent appointment of Elena H. Bautista as
Undersecretary of the Department of Transportation and Communication and as Officer-in-Charge of the
Maritime Industry Authority, the Court reiterated the pronouncement in Civil Liberties Union v.The
Executive Secretary on the intent of the Framers on the foregoing provision of the 1987 Constitution, to
wit:
Thus, while all other appointive officials in the civil service are allowed to hold other office or
employment in the government during their tenure when such is allowed by law orby the primary
functions of their positions, members of the Cabinet, their deputies and assistants may do so only when
expressly authorized by the Constitution itself. In other words, Section 7, Article IX-B is meant to lay
down the general rule applicable to all elective and appointive public officials and employees, while
Section 13, Article VII is meant to be the exception applicable only to the President, the Vice-President,
Members of the Cabinet, their deputies and assistants.
Since the evident purpose of the framers of the 1987 Constitution is to impose a stricter prohibition on
the President, Vice-President, members of the Cabinet, their deputies and assistants with respect to
holding multiple offices or employment in the government during their tenure, the exception to this
prohibition must be read with equal severity. On its face, the language of Section 13, Article VII is
prohibitory so that it must be understood as intended to bea positive and unequivocal negation of the
privilege of holding multiple government offices or employment. Verily, wherever the language used in
the constitution is prohibitory, it is to be understood as intended to be a positive and unequivocal
negation. The phrase "unless otherwise provided in this Constitution" must be given a literal
interpretation to refer only to those particular instances cited in the Constitution itself, to wit: the Vice-
President being appointed as a member of the Cabinet under Section 3, par. (2),Article VII; or acting as
President in those instances provided under Section 7, pars. (2) and (3), Article VII; and, the Secretary of
Justice being ex-officio member of the Judicial and Bar Council by virtue of Section 8 (1), Article VIII.34
Being an appointive public official who does not occupy a Cabinet position (i.e., President, the Vice-
President, Members of the Cabinet, their deputies and assistants), Duque was thus covered by the
general rule enunciated under Section 7, paragraph (2), Article IX-B. He can hold any other office or
employment in the Government during his tenure if such holding is allowed by law or by the primary
functions of his position.
Respondents insist that Duque’s ex officio designation as member of the governing Boards of the GSIS,
PHILHEALTH, ECC and HDMF is allowed by the primary functions of his position as the CSC Chairman. To
support this claim, they cite Section 14, Chapter 3, Title I-A, Book V of EO 292, to wit:
Section 14. Membership of the Chairman in Boards.—The Chairman shall be a member of the Board of
Directors or of other governing bodies of government entities whose functions affect the career
development, employment status, rights, privileges, and welfare of government officials and employees,
such as the Government Service Insurance System, Foreign Service Board, Foreign Trade Service Board,
National Board for Teachers, and such other similar boards as may be created by law.
As to the meaning of ex officio, the Court has decreed in Civil Liberties Union v. Executive Secretary that
–
 14

x x x x The term ex officiomeans "from office; by virtue of office." It refers to an "authority derived from (8) Prescribe all forms for Civil Service examinations, appointments, reports and such other
official character merely, not expressly conferred upon the individual character, but rather annexed to forms as may be required by law, rules and regulations;
the official position." Ex officio likewise denotes an "act done in an official character, or as a
consequence of office, and without any other appointment or authority other than that conferred by the
(9) Declare positions in the Civil Service as may properly be primarily confidential, highly
office." An ex officio member of a board is one who is a member by virtue of his title to a certain office,
technical or policy determining;
and without further warrant or appointment. x x x

(10) Formulate, administer and evaluate programs relative to the development and retention
The ex officio position being actually and in legal contemplation part of the principal office, it follows
of qualified and competent work force in the public service;
that the official concerned has no right to receive additional compensation for his services in the said
position. The reason is that these services are already paid for and covered by the compensation
attached to his principal office. x x x35 (11) Hear and decide administrative cases instituted by or brought before it directly or on
appeal, including contested appointments, and review decisions and actions of its offices and
of the agencies attached to it. Officials and employees who fail to comply with such decisions,
Section 3, Article IX-B of the 1987 Constitution describes the CSC as the central personnel agency of the
orders, or rulings shall be liable for contempt of the Commission. Its decisions, orders, or
government and is principally mandated to establish a career service and adopt measures to promote
rulings shall be final and executory. Such decisions, orders, or rulings may be brought to the
morale, efficiency, integrity, responsiveness, progressiveness, and courtesy in the civil service; to
Supreme Court on certiorari by the aggrieved party within thirty (30) daysfrom receipt of a
strengthen the merit and rewards system; to integrate all human resources development programs for
copy thereof;
all levels and ranks; and to institutionalize a management climate conducive to public accountability. Its
specific powers and functions are as follows:
(12) Issue subpoena and subpoena duces tecum for the production of documents and records
pertinent to investigation and inquiries conducted by it in accordance withits authority
(1) Administer and enforce the constitutional and statutory provisions on the merit system for
conferred by the Constitution and pertinent laws;
all levels and ranks in the Civil Service;

(13) Advise the President on all matters involving personnel management in the government
(2) Prescribe, amend and enforce rules and regulations for carrying into effect the provisions
service and submit to the President an annual report on the personnel programs;
of the Civil Service Law and other pertinent laws;

(14) Take appropriate action on all appointments and other personnel matters in the Civil
(3) Promulgate policies, standards and guidelines for the Civil Service and adopt plans and
Service including extension of Service beyond retirement age;
programs to promote economical, efficient and effective personnel administration in the
government;
(15) Inspect and audit the personnel actions and programs of the departments, agencies,
bureaus, offices, local government units and other instrumentalities of the government
(4) Formulate policies and regulations for the administration, maintenance and
including government-owned or controlled corporations; conduct periodic review of the
implementation of position classification and compensation and set standards for the
decisions and actions of offices or officials to whom authority has been delegated by the
establishment, allocation and reallocation of pay scales, classes and positions;
Commission as well as the conduct of the officials and the employees in these offices and
apply appropriate sanctions when necessary;
(5) Render opinion and rulings on all personnel and other Civil Service matters which shall be
binding on all heads of departments, offices and agencies and which may be brought to the
(16) Delegate authority for the performance of any functions to departments, agencies and
Supreme Court on certiorari;
offices where such functions may be effectively performed;

(6) Appoint and discipline its officials and employees in accordance with law and exercise
(17) Administer the retirement program for government officials and employees, and accredit
control and supervision over the activities of the Commission;
government services and evaluate qualifications for retirement;

(7) Control, supervise and coordinate Civil Service examinations. Any entity or official in
(18) Keep and maintain personnel records of all officials and employees in the Civil Service;
government may be called upon by the Commission to assist in the preparation and conduct
and
of said examinations including security, use of buildings and facilities as well as personnel and

(19) Perform all functions properly belonging to a central personnel agency and such other
transportation of examination materials which shall be exempt from inspection regulations;
functions as may be provided by law.36

On the other hand, enumerated below are the specific duties and responsibilities of the CSC Chairman,
namely:
(1) Direct all operations of the Commission;
(2) Establish procedures for the effective operations of the Commission;
(3) Transmit to the President rules and regulations, and other guidelines adopted by the
Chairman which require Presidential attention including annual and other periodic reports;
(4) Issue appointments to, and enforce decisions on administrative discipline involving
officials and employees of the Commission;
(5) Delegate authority for the performance of any function to officials and employees of the
Commission;
(6) Approve and submit the annual and supplemental budget of the Commission; and
(7) Perform such other functionsas may be provided by law.37
Section 14, Chapter 3, Title I-A, Book V of EO 292 is clear that the CSC Chairman’s membership in a
governing body is dependent on the condition that the functions of the government entity where he will
sit as its Board member must affect the career development, employment status, rights, privileges, and
welfare of government officials and employees. Based on this, the Court finds no irregularity in Section
14, Chapter 3, Title I-A, Book V of EO 292 because matters affecting the career development, rights and
welfare of government employees are among the primary functions of the CSC and are consequently
exercised through its Chairman. The CSC Chairman’s membership therein must, therefore, be considered
to be derived from his position as such. Accordingly, the constitutionality of Section 14, Chapter 3, Title I-
A, Book V of EO 292 is upheld.
However, there is a need to determine further whether Duque’s designation as Board member of the
GSIS, PHILHEALTH, ECC and HDMF is in accordance with the 1987 Constitution and the condition laid
down in Section 14, Chapter 3, Title I-A, Book V of EO 292. It is necessary for this purpose to examine the
functions of these government entities under their respective charters, to wit:
The GSIS Charter, Republic Act No. 8291
SECTION 41. Powers and Functions of the GSIS. — The GSIS shall exercise the following powers and
functions:
(a) to formulate, adopt, amend and/or rescind such rules and regulations as may be necessary
to carry out the provisions and purposes of this Act, as well as the effective exercise of the
powers and functions, and the discharge of duties and responsibilities of the GSIS, its officers
and employees;
15
(b) to adopt or approve the annual and supplemental budget of receipts and expenditures
including salaries and allowances of the GSIS personnel; to authorize such capital and
operating expenditures and disbursements of the GSIS as may be necessary and proper for
the effective management and operation of the GSIS;
(c) to invest the funds of the GSIS, directly or indirectly, in accordance with the provisions of
this Act;
(d) to acquire, utilize or dispose of, in any manner recognized by law, real or personal
property in the Philippines or elsewhere necessary to carry out the purposes of this Act;
(e) to conduct continuing actuarialand statistical studies and valuations to determine the
financial condition of the GSIS and taking into consideration such studies and valuations and
the limitations herein provided, re-adjust the benefits, contributions, premium rates, interest
rates or the allocation or re-allocation of the funds to the contingencies covered;
(f) to have the power of succession;
(g) to sue and be sued;
(h) to enter into, make, perform and carry out contracts of every kind and description with
any person, firm or association or corporation, domestic or foreign;
(i) to carry on any other lawful business whatsoever in pursuance of, or in connection with the
provisions of this Act;
(j) to have one or more offices in and outside of the Philippines, and to conduct its business
and exercise its powers throughout and in any part of the Republic of the Philippines and/or
in any or all foreign countries, states and territories: Provided, That the GSIS shall maintain a
branch office in every province where there exists a minimum of fifteen thousand (15,000)
membership; (k) to borrow funds from any source, private or government, foreign or
domestic, only as an incident in the securitization of housing mortgages of the GSIS and on
account of its receivables from any government or private entity;
(l) to invest, own or otherwise participate in equity in any establishment, firm or entity;
(m) to approve appointments in the GSIS except appointments to positions which are policy
determining, primarily confidential or highly technical in nature according to the Civil Service
rules and regulations: Provided, That all positions in the GSIS shall be governed by a
compensation and position classification system and qualifications standards approved bythe
GSIS Board of Trustees based on a comprehensive job analysis and audit of actual duties and
responsibilities: Provided, further, That the compensation plan shall be comparable with the
prevailing compensation plans in the private sector and shall be subject to the periodic review
by the Board no more than once every four (4) years without prejudice to yearly merit
reviews or increases based on productivity and profitability;

(n) to design and adopt an Early Retirement Incentive Plan (ERIP) and/or financial assistance
for the purpose of retirement for its own personnel;
(o) to fix and periodically review and adjust the rates of interest and other terms and
conditions for loans and credits extended to members or other persons, whether natural or
juridical;
(p) to enter into agreement with the Social Security System or any other entity, enterprise,
corporation or partnership for the benefit of members transferring from one system to
another subject to the provision of Republic Act No. 7699, otherwise known as the Portability
Law;
(q) to be able to float proper instrument to liquefy long-term maturity by pooling funds for
short-term secondary market;
(r) to submit annually, not later thanJune 30, a publicreport to the President of the Philippines
and the Congress of the Philippines regarding its activities in the administration and
enforcement of this Act during the preceding year including information and
recommendations on broad policies for the development and perfection of the programs of
the GSIS;
(s) to maintain a provident fund, which consists of contributions made by both the GSIS and
its officials and employees and their earnings, for the payment of benefits to such officials
and employees or their heirs under such terms and conditions as it may prescribe;
(t) to approve and adopt guidelines affecting investments, insurance coverage of government
properties, settlement of claims, disposition of acquired assets, privatization or expansion of
subsidiaries, development of housing projects, increased benefit and loan packages to
members, and the enforcement of the provisions of this Act;
(u) any provision of law to the contrary notwithstanding, to authorize the payment of extra
remuneration to the officials and employees directly involved in the collection and/or
remittance of contributions, loan repayments, and other monies due to the GSIS at such rates
and under such conditions as itmay adopt. Provided, That the best interest of the GSIS shall
be observed thereby;
(v) to determine, fix and impose interest upon unpaid premiums due from employers and
employees;
(w) to ensure the collection or recovery of all indebtedness, liabilities and/or accountabilities,
includingunpaid premiums or contributions in favor of the GSISarising from any cause or
source whatsoever, due from all obligors, whether public or private. The Board shall demand
payment or settlement of the obligations referred to herein within thirty (30) days from the
date the obligation becomes due, and in the event of failure or refusal of the obligor or
debtor to comply with the demand, to initiate or institute the necessary or proper actions or
suits, criminal, civil or administrative or otherwise, before the courts, tribunals, commissions,
boards, or bodies of proper jurisdiction within thirty (30) days reckoned from the expiry
dateof the period fixed in the demand within which to pay or settle the account;
16
(x) to design and implement programs that will promote and mobilize savings and provide
additional resources for social security expansion and at the same time afford individual
members appropriate returns on their savings/investments. The programs shall be so
designed as to spur socio-economic take-off and maintain continued growth; and
(y) to exercise such powers and perform such other acts as may be necessary, useful,
incidental or auxiliary to carry out the provisions of this Act, or to attain the purposesand
objectives of this Act.
The PHILHEALTH Charter, Republic Act No. 7875
SEC. 16. Powers and Functions – The Corporation shall have the following powers and functions:
(a) to administer the National Health Insurance Program;
(b) to formulate and promulgate policies for the sound administration of the Program;
(c) to set standards, rules, and regulations necessary to ensure quality of care, appropriate
utilization of services, fund viability, member satisfaction, and overall accomplishment of
Program objectives;
(d) to formulate and implement guidelines on contributions and benefits; portability of
benefits, cost containment and quality assurance; and health care provider
arrangements,payment, methods, and referral systems;
(e) to establish branch offices as mandated in Article V of this Act;
(f) to receive and manage grants, donations, and other forms of assistance;
(g) to sue and be sued in court;
(h) to acquire property, real and personal, which may be necessary or expedient for the
attainment of the purposes of this Act;
(i) to collect, deposit, invest, administer, and disburse the National Health Insurance Fund in
accordance with the provisions of this Act;
(j) to negotiate and enter into contracts with health care institutions, professionals, and other
persons, juridical or natural, regarding the pricing, payment mechanisms, design and
implementation of administrative and operating systems and procedures, financing, and
delivery of health services;
(k) to authorize Local Health Insurance Offices to negotiate and enter into contracts in the
name and on behalf of the Corporation with any accredited government or private sector
health provider organization, including but not limited to health maintenance organizations,

cooperatives and medical foundations, for the provision ofat least the minimum package of
personal health services prescribed by the Corporation;
(l) to determine requirements and issue guidelines for the accreditation of health care
providers for the Program in accordance with this Act;
(m) to supervise the provision of health benefits with the power to inspect medical and
financial records of health careproviders and patients who are participants in or members of
the Program, and the power to enter and inspect accredited health care institutions, subject
to the rules and regulations to be promulgated by the Corporation;
(n) to organize its office, fix the compensation of and appoint personnel as may be deemed
necessary and upon the recommendation of the president of the Corporation;
(o) to submit to the President of the Philippines and to both Houses of Congress its Annual
Report which shall contain the status of the National Health Insurance Fund, its total
disbursements, reserves, average costing to beneficiaries, any request for additional
appropriation, and other data pertinent to the implementation of the Program and publish a
synopsis of such report in two (2) newspapers of general circulation;
(p) to keep records of the operations of the Corporation and investments of the National
Health Insurance Fund; and
(q) to perform such other acts as it may deem appropriate for the attainment of the
objectives of the Corporation and for the proper enforcement of the provisions of this Act
The HDMF Charter, Republic Act No. 9679
SEC. 13. Powers and Functions of the Fund.– The Fund shall have the powers and functions specified in
this Act and the usual corporate powers:
(a) To formulate, adopt, amend and/or rescind such rules and regulations as may be
necessary to carry out the provisions and purposes of this Act, as well as the effective exercise
of the powers and functions, and the discharge of duties and responsibilities of the Fund, its
officers and employees;
(b) To adopt or approve the annual and supplemental budget of receipts and expenditures
including salaries and allowances of the Fund personnel, to authorize such capital and
operating expenditures and disbursements of the Fund as may be necessary and proper for
the effective management and operation of the Fund;
(c) To submit annually to the President of the Philippines not later than March 15, a report of
its activities and the state of the Fund during the preceding year, including information and
recommendations for the development and improvement thereof;
(d) To invest not less than seventy percent (70%) of its investible funds to housing, in
accordance with this Act;
17
(e) To acquire, utilize, or dispose of, in any manner recognized by law, real or personal
properties to carry out the purposes of this Act;
(f) To set up its own accounting and computer systems; to conduct continuing actuarial and
statistical studies and valuations to determine the financial viability of the Fund and its
project; to require reports, compilations and analysis of statistical and economic data, as well
as make such other studies and surveys asmay be needed for the proper administration and
development of the Fund;
(g) To have the power of succession; to sue and be sued; to adopt and use a corporate seal;
(h) To enter into and carry out contracts of every kind and description with any person, firm
or association or corporation, domestic or foreign;
(i) To borrow funds from any source, private or government, foreign or domestic;
(j) To invest, own or otherwise participate in equity in any establishment, or entity; to form,
organize, invest in or establish and maintain a subsidiary or subsidiaries in relation to any of
its purposes;
(k) To approve appointments in the Fund except appointments to positions which are policy
determining, primarily confidential or highly technical in nature according to the civil service
rules and regulations: Provided, That all positions in the Fund shall be governed by a
compensation and position classification system and qualification standards approved by the
Fund's Board of Trustees based on a comprehensive job analysis, wage compensation study
and audit of actual duties and responsibilities: Provided, further, That the compensation plan
shall be comparable with prevailing compensation plans in the private sector and shall be
subject to the periodic review of the Board no more than once everyfour (4) years without
prejudice to yearly merit reviews or increases based on productivity and profitability. The
Fund shall, therefore, be exempt from any laws, rules and regulations on salaries and
compensations;
(l) To maintain a provident fund, which shall consist of contributions made by both the Fund
and its officers and employees and their earnings, for the payment ofbenefits to such officials
and employees or their heirs under such terms and conditions as it may prescribe;
(m)To design and adopt an early retirement incentive plan (ERIP) for its own personnel;
(n) To establish field offices and to conduct its business and exercise its powers in these
places; (o) To approve restructuring proposalfor the payment of due but unremitted
contributions and unpaid loan amortizations under such terms and conditions as the Board
ofTrustees may prescribe;
(p) To determine, fix and impose interest and penalties upon unpaid contributions due from
employers and employees;

(q) To ensure the collection and recovery of all indebtedness, liabilities and/or
accountabilities, including unpaid contributions in favor of the Fund arising from any cause or
source or whatsoever, due from all obligors, whether public or private; to demand payment
of the obligations referred to herein, and in the event of failure or refusal of the obligor or
debtor to comply with the demand, to initiate or institute the necessary or proper actions or
suits, criminal, civil, administrative, or otherwise, before the courts, tribunals, commissions,
boards or bodies of proper jurisdiction: Provided, however, That the Fund may compromise
or release, in whole or in part, any interest, penalty or civil liability to the Fund in connection
with the collection of contributions and the lending operations of the Fund, under such terms
and conditions as prescribed by the Board of Trustees: Provided, further, That the Board may,
upon recommendation of the Chief Executive Officer, deputize any member of the Fund's
legal staff to act as special sheriff in foreclosure cases, in the sale or attachment of the
debtor's properties, and in the enforcement ofcourt writs and processes in cases involving the
Fund. The special sheriff of the Fund shall make a report to the proper court after any action
taken by him, which shall treat such action as if it were an act of its own sheriffs in all
respects;
(r) To design and implement other programs that will further promote and mobilize savings
and provide additional resources for the mutual benefit of the members with appropriate
returns on the savings/investments. The program shall be so designed as to spur
socioeconomic take-off and maintain continued growth;
(s) To conduct continuing actuarialand statistical studies and valuations to determine the
financial condition of the Fund and taking into consideration such studies and valuations and
the limitations herein provided, readjust the benefits, contributions, interest rates of the
allocation or reallocation of the funds to the contingencies covered; and
(t) To exercise such powers and perform such acts as may be necessary, useful, incidental or
auxiliary to carry out the provisions of this Act.
The ECC Charter, Presidential Decree No. 626
ART. 177. Powers and duties. - The Commission shall have the following powers and duties:
(a) To assess and fix a rate of contribution from all employers;
(b) To determine the rate of contribution payable by an employer whose records show a high
frequency of work accidents or occupational disease due to failure by the said employer to
observe adequate safety measures;
(c) To approve rules and regulations governing the processing of claims and the settlement of
disputes arising therefrom as prescribed by the System;
(d) To initiate policies and programs toward adequate occupational health and safety and
accident prevention in the working environment, rehabilitation other than those provided for
under Art. 190 hereof, and other related programs and activities, and to appropriate funds
therefor. (As amended by Sec. 3, P.D. 1368).
18
(e) To make the necessary actuarial studies and calculations concerning the grant of constant
help and income benefits for permanent disability or death, and the rationalization of the
benefits for permanent disability and death under the Title with benefits payable by the
System for similar contingencies; Provided; That the Commission may upgrade benefits and
add new ones subject toapproval of the President; and Provided, Further, That the actuarial
stabilityof the State Insurance Fund shall be guaranteed; Provided, Finally, that such increases
in benefits shall not require any increases in contribution, except as provided for in paragraph
(b) hereof. (As amended by Sec. 3, P.D. 1641).
(f) To appoint the personnel of its staff, subject to civil service law and rules, but exempt from
WAPCO law and regulations;
(g) To adopt annually a budget of expenditures of the Commission and its staff chargeable
against the State Insurance Fund: Provided, that the SSS and GSIS shall advance on a quarterly
basis the remittances of allotment of the loading fund for this Commission's operational
expenses based on its annual budget as duly approved by the Ministry of Budget and
Management. (As amended by Sec. 3, P.D. 1921).
(h) To have the power to administeroath and affirmation, and to issue subpoena and
subpoena duces tecum in connection with any question or issue arising from appealed cases
under this Title.
(i) To sue and be sued in court;
(j) To acquire property, real or personal, which may be necessary or expedient for the
attainment of the purposes of this Title;
(k) To enter into agreements or contracts for such services or aid as may be needed for the
proper, efficient and stable administration of the program;
(l) To perform such other acts as it may deem appropriate for the attainment of the purposes
of the Commission and proper enforcement of the provisions of thisTitle. (As amended by
Sec. 18, P.D.850). (Emphasis supplied.)
The GSIS, PHILHEALTH, ECC and HDMF are vested by their respective charters with various powers and
functions to carry out the purposes for which they were created. While powers and functions associated
with appointments, compensation and benefits affect the career development, employment status,
rights, privileges, and welfare of government officials and employees, the GSIS, PHILHEALTH, ECC and
HDMF are also tasked to perform other corporate powers and functions that are not personnel-related.
All of these powers and functions, whether personnel-related or not, are carried out and exercised by
the respective Boards of the GSIS, PHILHEALTH, ECC and HDMF. Hence, when the CSC Chairman sits as a
member of the governing Boards of the GSIS, PHILHEALTH, ECC and HDMF, he may exercise these
powers and functions, which are not anymore derived from his position as CSC Chairman, such as
imposing intereston unpaid or unremitted contributions,38 issuing guidelines for the accreditation of
health care providers,39 or approving restructuring proposals in the payment of unpaid loan
amortizations.40 The Court also notes that Duque’s designation as member of the governing Boards of
the GSIS, PHILHEALTH, ECC and HDMF entitles him to receive per diem,41 a form of additional
compensation that is disallowed by the concept of an ex officioposition by virtue of its clear

contravention of the proscription set by Section 2, Article IX-A of the 1987 Constitution. This situation
goes against the principle behind an ex officio position, and must, therefore, be held unconstitutional.
Apart from violating the prohibition against holding multiple offices, Duque’s designation as member of
the governing Boards of the GSIS, PHILHEALTH, ECC and HDMF impairs the independence of the CSC.
Under Section 17,42Article VII of the Constitution, the President exercises control over all government
offices in the Executive Branch. An office that is legally not under the control of the President is not part
of the Executive Branch.43 The Court has aptly explained in Rufino v. Endriga:44
Every government office, entity, or agency must fall under the Executive, Legislative, or Judicial
branches, or must belong to one of the independent constitutional bodies, ormust be a quasi-judicial
body or local government unit. Otherwise, such government office, entity, or agency has no legal and
constitutional basis for its existence.
The CCP does not fall under the Legislative or Judicial branches of government.1âwphi1 The CCP is also
not one of the independent constitutional bodies. Neither is the CCP a quasi-judicial body nor a local
government unit. Thus, the CCP must fall underthe Executive branch. Under the Revised Administrative
Code of 1987, any agency "not placed by law or order creating them under any specific department" falls
"under the Office of the President."
Since the President exercises control over "all the executive departments, bureaus, and offices," the
President necessarily exercises control over the CCP which is an office in the Executive branch. In
mandating that the President "shall have control of all executive . . . offices," x x x Section 17, Article VII
of the 1987 Constitution does not exempt any executive office — oneperforming executive functions
outside of the independent constitutional bodies — from the President’s power of control. There is no
dispute that the CCP performs executive, and not legislative, judicial, or quasi-judicial functions.
The President’s power of control applies to the acts or decisions of all officers in the Executive branch.
This is true whether such officers are appointed by the President or by heads of departments, agencies,
commissions, or boards. The power of control means the power to revise or reverse the acts or decisions
of a subordinate officer involving the exercise of discretion.
In short, the President sits at the apex of the Executive branch, and exercises "control of all the executive
departments, bureaus, and offices." There can be no instance under the Constitution where an officer of
the Executive branch is outside the control of the President. The Executive branch is unitary since there
is only one President vested with executive power exercising control over the entire Executive branch.
Any office in the Executive branch that is not under the control of the President is a lost command whose
existence is withoutany legal or constitutional basis. (Emphasis supplied)
As provided in their respective charters, PHILHEALTH and ECC have the status of a government
corporation and are deemed attached to the Department of Health45 and the Department of
Labor,46 respectively. On the other hand, the GSIS and HDMF fall under the Office of the President.47 The
corporate powers of the GSIS, PHILHEALTH, ECC and HDMF are exercised through their governing
Boards, members of which are all appointed by the President of the Philippines. Undoubtedly, the GSIS,
PHILHEALTH, ECC and HDMF and the members of their respective governing Boards are under the
control of the President. As such, the CSC Chairman cannot be a member of a government entity that is
under the control of the President without impairing the independence vested in the CSC by the 1987
Constitution.
19
3. Effect of declaration of unconstitutionality of Duque’s designation as member of the governing
Boards of theGSIS, PHILHEALTH, ECC and HDMF - The De FactoOfficer Doctrine
In view of the application of the prohibition under Section 2, Article IX-A of the 1987 Constitution, Duque
did not validly hold office as Director or Trustee of the GSIS, PHILHEALTH, ECC and HDMF concurrently
with his position of CSC Chairman. Accordingly, he was not to be considered as a de jure officer while he
served his term as Director or Trustee of these GOCCs. A de jure officer is one who is deemed, in all
respects, legally appointed and qualified and whose term of office has not expired.48
That notwithstanding, Duque was a de facto officer during his tenure as a Director or Trustee of the GSIS,
PHILHEALTH, ECC and HDMF. In Civil Liberties Union v. Executive Secretary,49 the Court has said:
During their tenure in the questioned positions, respondents may be considered de facto officers and as
such entitled to emoluments for actual services rendered. Ithas been held that "in cases where there is
no de jure, officer, a de facto officer, who, in good faith has had possession of the office and has
discharged the duties pertaining thereto, is legally entitled to the emoluments of the office, and may in
an appropriate action recover the salary, fees and other compensations attached to the office. This
doctrine is, undoubtedly, supported on equitable grounds since it seems unjust that the public should
benefit by the services of an officer de facto and then be freed from all liability to pay any one for such
services. Any per diem, allowances or other emoluments received by the respondents by virtue of actual
services rendered in the questioned positions may therefore be retained by them.
A de facto officer is one who derives his appointment from one having colorable authority to appoint,
ifthe office is an appointive office, and whose appointment is valid on its face.50 He may also be one who
is in possession of an office, and is discharging its duties under color of authority, by which is meant
authority derived from an appointment, however irregular or informal, so that the incumbent is not a
mere volunteer.51 Consequently, the acts of the de facto officer are just as valid for all purposes as those
of a de jure officer, in so far as the public or third persons who are interested therein are concerned.52
In order to be clear, therefore, the Court holds that all official actions of Duque as a Director or Trustee
of the GSIS, PHILHEAL TH, ECC and HDMF, were presumed valid, binding and effective as if he was the
officer legally appointed and qualified for the office.53 This clarification is necessary in order to protect
the sanctity and integrity of the dealings by the public with persons whose ostensible authority
emanates from the State. Duque's official actions covered by this clarification extend but are not limited
to the issuance of Board resolutions and memoranda approving appointments to positions in the
concerned GOCCs, promulgation of policies and guidelines on compensation and employee benefits, and
adoption of programs to carry out the corporate powers of the GSIS, PHILHEAL TH, ECC and HDMF.
WHEREFORE, the petition is PARTIALLY GRANTED. The Court UPHOLDS THE CONSTITUTIONALITY of
Section 14, Chapter 3, Title I-A, Book V of Executive Order No. 292; ANNULS AND VOIDS Executive Order
No. 864 dated February 22, 2010 and the designation of Hon. Francisco T. Duque III as a Member of the
Board of Directors/Trustees of the Government Service Insurance System; Philippine Health Insurance
Corporation; Employees Compensation Commission; and Home Development Mutual Fund in an ex
officio capacity in relation to his appointment as Chairman of the Civil Service Commission for being
UNCONSTITUTIONAL AND VIOLATIVE of Sections 1 and 2, Article IX-A of the 1987 Constitution; and
DECLARES that Hon. Francisco T. Duque III was a de facto officer during his tenure as Director/Trustee of
the Government Service Insurance System; Philippine Health Insurance Corporation; Employees
Compensation Commission; and Home Development Mutual Fund.

No pronouncement on costs of suit. SO ORDERED.
DENNIS A. B. FUNA v. THE CHAIRMAN, CIVIL SERVICE COMMISSION, FRANCISCO T. DUQUE III, et. al.
G.R. No. 191672, 25 November 2014, EN BANC
Section 1, Article IX-A of the 1987 Constitution expressly describes all the Constitutional Commissions as
“independent.” Although their respective functions are essentially executive in nature, they are not
under the control of the President of the Philippines in the discharge of such functions. Each of the
Constitutional Commissions conducts its own proceedings under the applicable laws and its own rules
and in the exercise of its own discretion.
In 2010, then President Gloria Macapagal-Arroyo appointed Francisco T. Duque III (Duque) as Chairman
of the Civil Service Commission, which was thereafter confirmed by the Commission on Appointments.
Subsequently, President Arroyo issued Executive Order No. 864 (EO 864). Pursuant to it, Duque was
designated as a member of the Board of Directors or Trustees in an ex officio capacity of the following
government-owned or government-controlled corporations: (a) Government Service Insurance System
(GSIS); (b) Philippine Health Insurance Corporation (PHILHEALTH), (c) the Employees Compensation
Commission (ECC), and (d) the Home Development Mutual Fund (HDMF).
Petitioner Dennis A.B. Funa, in his capacity as taxpayer, concerned citizen and lawyer, filed the instant
petition challenging the constitutionality of EO 864, as well as Section 14, Chapter 3, Title I-A, Book V of
Executive Order No. 292 (EO 292), otherwise known as The Administrative Code of 1987, and the
designation of Duque as a member of the Board of Directors or Trustees of the GSIS, PHIC, ECC and
HDMF for being clear violations of Section 1 and Section 2, Article IX-A of the 1987 Constitution.
ISSUE: Does the designation of Duque as member of the Board of Directors or Trustees of the GSIS,
PHILHEALTH, ECC and HDMF, in an ex officio capacity, impair the independence of the CSC and violate
the constitutional prohibition against the holding of dual or multiple offices for the Members of the
Constitutional Commissions?
RULING:
Yes. The Court partially grants the petition. The Court upholds the constitutionality of Section 14,
Chapter 3, Title I-A, Book V of EO 292, but declares unconstitutional EO 864 and the designation of
Duque in an ex officio capacity as a member of the Board of Directors or Trustees of the GSIS,
PHILHEALTH, ECC and HDMF.
Section 1, Article IX-A of the 1987 Constitution expressly describes all the Constitutional Commissions as
“independent.” Although their respective functions are essentially executive in nature, they are not
under the control of the President of the Philippines in the discharge of such functions. Each of the
Constitutional Commissions conducts its own proceedings under the applicable laws and its own rules
and in the exercise of its own discretion. Its decisions, orders and rulings are subject only to review on
certiorari by the Court as provided by Section 7, Article IXA of the 1987 Constitution. To safeguard the
independence of these Commissions, the 1987 Constitution, among others, imposes under Section 2,
20
Article IX-A of the Constitution certain inhibitions and disqualifications upon the Chairmen and members
to strengthen their integrity, to wit:
(a) Holding any other office or employment during their tenure;
(b) Engaging in the practice of any profession;
(c) Engaging in the active management or control of any business which in any way may be affected by
the functions of his office; and
(d) Being financially interested, directly or indirectly, in any contract with, or in any franchise or privilege
granted by the Government, any of its subdivisions, agencies or instrumentalities, including government
owned or -controlled corporations or their subsidiaries.
The issue herein involves the first disqualification abovementioned, which is the disqualification from
holding any other office or employment during Duque’s tenure as Chairman of the CSC. The Court finds it
imperative to interpret this disqualification in relation to Section 7, paragraph (2), Article IX-B of the
Constitution and the Court’s pronouncement in Civil Liberties Union v. Executive Secretary. Section 7,
paragraph (2), Article IX-B reads:
Section 7. x x x
Unless otherwise allowed by law or the primary functions of his position, no appointive official shall hold
any other office or employment in the Government or any subdivision, agency or instrumentality
thereof, including government-owned or controlled corporations or their subsidiaries.
Being an appointive public official who does not occupy a Cabinet position (i.e., President, the Vice-
President, Members of the Cabinet, their deputies and assistants), Duque was thus covered by the
general rule enunciated under Section 7, paragraph (2), Article IX-B. He can hold any other office or
employment in the Government during his tenure if such holding is allowed by law or by the primary
functions of his position.
Section 3, Article IX-B of the 1987 Constitution describes the CSC as the central personnel agency of the
government and is principally mandated to establish a career service and adopt measures to promote
morale, efficiency, integrity, responsiveness, progressiveness, and courtesy in the civil service; to
strengthen the merit and rewards system; to integrate all human resources development programs for
all levels and ranks; and to institutionalize a management climate conducive to public accountability.
Section 14, Chapter 3, Title I-A, Book V of EO 292 is clear that the CSC Chairman’s membership in a
governing body is dependent on the condition that the functions of the government entity where he will
sit as its Board member must affect the career development, employment status, rights, privileges, and
welfare of government officials and employees. Based on this, the Court finds no irregularity in Section
14, Chapter 3, Title I-A, Book V of EO 292 because matters affecting the career development, rights and
welfare of government employees are among the primary functions of the CSC and are consequently
exercised through its Chairman.
 21

The CSC Chairman’s membership therein must, therefore, be considered to be derived from his position
as such. Accordingly, the constitutionality of Section 14, Chapter 3, Title I-A, Book V of EO 292 is upheld.
The GSIS, PHILHEALTH, ECC and HDMF are vested by their respective charters with various powers and
functions to carry out the purposes for which they were created. While powers and functions associated
with appointments, compensation and benefits affect the career development, employment status,
rights, privileges, and welfare of government officials and employees, the GSIS, PHILHEALTH, ECC and
HDMF are also tasked to perform other corporate powers and functions that are not personnel-related.
All of these powers and functions, whether personnel-related or not, are carried out and exercised by
the respective Boards of the GSIS, PHILHEALTH, ECC and HDMF. Hence, when the CSC Chairman sits as a
member of the governing Boards of the GSIS, PHILHEALTH, ECC and HDMF, he may exercise these
powers and functions, which are not anymore derived from his position as CSC Chairman, such as
imposing interest on unpaid or unremitted contributions, issuing guidelines for the accreditation of
health care providers, or approving restructuring proposals in the payment of unpaid loan amortizations.
The Court also notes that Duque’s designation as member of the governing Boards of the GSIS,
PHILHEALTH, ECC and HDMF entitles him to receive per diem, a form of additional compensation that is
disallowed by the concept of an ex officio position by virtue of its clear contravention of the proscription
set by Section 2, Article IX-A of the 1987 Constitution. This situation goes against the principle behind an
ex officio position, and must, therefore, be held unconstitutional.
A de facto officer is one who derives his appointment from one having colorable authority to appoint, if
the office is an appointive office, and whose appointment is valid on its face. He may also be one who is
in possession of an office, and is discharging its duties under color of authority, by which is meant
authority derived from an appointment, however irregular or informal, so that the incumbent is not a
mere volunteer. Consequently, the acts of the de facto officer are just as valid for all purposes as those
of a de jure officer, in so far as the public or third persons who are interested therein are concerned.
In order to be clear, therefore, the Court holds that all official actions of Duque as a Director or Trustee
of the GSIS, PHILHEALTH, ECC and HDMF, were presumed valid, binding and effective as if he was the
officer legally appointed and qualified for the office. This clarification is necessary in order to protect the
sanctity and integrity of the dealings by the public with persons whose ostensible authority emanates
from the State. Duque’s official actions covered by this clarification extend but are not limited to the
issuance of Board resolutions and memoranda approving appointments to positions in the concerned
GOCCs, promulgation of policies and guidelines on compensation and employee benefits, and adoption
of programs to carry out the corporate powers of the GSIS, PHILHEALTH, ECC and HDMF.

Apart from violating the prohibition against holding multiple offices, Duque’s designation as member of
the governing Boards of the GSIS, PHILHEALTH, ECC and HDMF impairs the independence of the CSC.
Under Section 17, Article VII of the Constitution, the President exercises control over all government
offices in the Executive Branch. An office that is legally not under the control of the President is not part
of the Executive Branch.

As provided in their respective charters, PHILHEALTH and ECC have the status of a government
corporation and are deemed attached to the Department of Health and the Department of Labor,
respectively. On the other hand, the GSIS and HDMF fall under the Office of the President. The corporate
powers of the GSIS, PHILHEALTH, ECC and HDMF are exercised through their governing Boards, members
of which are all appointed by the President of the Philippines.

Undoubtedly, the GSIS, PHILHEALTH, ECC and HDMF and the members of their respective governing
Boards are under the control of the President. As such, the CSC Chairman cannot be a member of a
government entity that is under the control of the President without impairing the independence vested
in the CSC by the 1987 Constitution.

In view of the application of the prohibition under Section 2, Article IX-A of the 1987 Constitution, Duque
did not validly hold office as Director or Trustee of the GSIS, PHILHEALTH, ECC and HDMF concurrently
with his position of CSC Chairman. Accordingly, he was not to be considered as a de jure officer while he
served his term as Director or Trustee of these GOCCs. A de jure officer is one who is deemed, in all
respects, legally appointed and qualified and whose term of office has not expired.That notwithstanding,
Duque was a de facto officer during his tenure as a Director or Trustee of the GSIS, PHILHEALTH, ECC and
HDMF.

EN BANC
G.R. No. 173264 February 22, 2008
CIVIL SERVICE COMMISSION, petitioner,
vs.
NITA P. JAVIER, respondent.
DECISION
AUSTRIA-MARTINEZ, J.:
Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, seeking to
reverse the Decision1 of the Court of Appeals (CA) dated September 29, 2005, as well as its Resolution of
June 5, 2006, in CA-G.R. SP No. 88568, which set aside the resolutions and orders of the Civil Service
Commission (CSC) invalidating the appointment of respondent as Corporate Secretary of the Board of
Trustees of the Government Service and Insurance System (GSIS).
The facts are undisputed.
According to her service record,2 respondent was first employed as Private Secretary in the GSIS, a
government owned and controlled corporation (GOCC), on February 23, 1960, on a "confidential" status.
On July 1, 1962, respondent was promoted to Tabulating Equipment Operator with "permanent" status.
The "permanent" status stayed with respondent throughout her career. She spent her entire career with
GSIS, earning several more promotions, until on December 16, 1986, she was appointed Corporate
Secretary of the Board of Trustees of the corporation.
On July 16, 2001, a month shy of her 64th birthday,3 respondent opted for early retirement and received
the corresponding monetary benefits.4
On April 3, 2002, GSIS President Winston F. Garcia, with the approval of the Board of Trustees,
reappointed respondent as Corporate Secretary, the same position she left and retired from barely a
year earlier. Respondent was 64 years old at the time of her reappointment.5 In its Resolution, the Board
of Trustees classified her appointment as "confidential in nature and the tenure of office is at the
pleasure of the Board."6
Petitioner alleges that respondent's reappointment on confidential status was meant to illegally extend
her service and circumvent the laws on compulsory retirement.7 This is because under Republic Act (R.A.)
No. 8291, or the Government Service Insurance System Act of 1997, the compulsory retirement age for
government employees is 65 years, thus:
Sec. 13. x x x
(b) Unless the service is extended by appropriate authorities, retirement shall be compulsory
for an employee at sixty-five (65) years of age with at least fifteen (15) years of service:
Provided, That if he has less than fifteen (15) years of service, he may be allowed to continue
in the service in accordance with existing civil service rules and regulations.
22
Under the civil service regulations, those who are in primarily confidential positions may serve even
beyond the age of 65 years. Rule XIII of the Revised Omnibus Rules on Appointments and Other
Personnel Actions, as amended, provides that:
Sec. 12. (a) No person who has reached the compulsory retirement age of 65 years can be
appointed to any position in the government, subject only to the exception provided under
sub-section (b) hereof.
b. A person who has already reached the compulsory retirement age of 65 can still be
appointed to a coterminous/primarily confidential position in the government.
A person appointed to a coterminous/primarily confidential position who reaches the age of
65 is considered automatically extended in the service until the expiry date of his/her
appointment or until his/her services are earlier terminated.8
It is for these obvious reasons that respondent's appointment was characterized as "confidential" by the
GSIS.
On October 10, 2002, petitioner issued Resolution No. 021314, invalidating the reappointment of
respondent as Corporate Secretary, on the ground that the
position is a permanent, career position and not primarily confidential.9
On November 2, 2002, the CSC, in a letter of even date, through its Chairperson Karina Constantino-
David, informed GSIS of CSC's invalidation of respondent's appointment, stating, thus:
Records show that Ms. Javier was formerly appointed as Corporate Secretary in a
"Permanent" capacity until her retirement in July 16, 2001. The Plantilla of Positions shows
that said position is a career position. However, she was re-employed as Corporate Secretary,
a position now declared as confidential by the Board of Trustees pursuant to Board
Resolution No. 94 dated April 3, 2002.
Since the position was not declared primarily confidential by the Civil Service Commission or
by any law, the appointment of Ms. Javier as Corporate Secretary is hereby invalidated.10
Respondent and GSIS sought to reconsider the ruling of petitioner. CSC replied that the position of
Corporate Secretary is a permanent (career) position, and not primarily confidential (non-career); thus, it
was wrong to appoint respondent to this position since she no longer complies with eligibility
requirements for a permanent career status. More importantly, as respondent by then has reached
compulsory retirement at age 65, respondent was no longer qualified for a permanent career
position.11 With the denial of respondent's plea for reconsideration, she filed a Petition for Review with
the Court of Appeals.
On September 29, 2005, the CA rendered a Decision setting aside the resolution of petitioner
invalidating respondent's appointment.12 The CA ruled that in determining whether a position is
primarily confidential or otherwise, the nature of its functions, duties and responsibilities must be looked
into, and not just its formal classification.13 Examining the functions, duties and responsibilities of the
 23

GSIS Corporate Secretary, the CA concluded that indeed, such a position is primarily confidential in Examples of positions in the non-career service enumerated in the Administrative Code are:
nature.
Sec. 9. Non-Career Service. - x x x
Petitioner filed a motion for reconsideration, which was denied by the CA on June 5, 2006.
The Non-Career Service shall include:
Hence, herein petition.
(1) Elective officials and their personal or confidential staff;
The petition assails the CA Decision, contending that the position of Corporate Secretary is a career
position and not primarily confidential in nature.14 Further, it adds that the power to declare whether
(2) Secretaries and other officials of Cabinet rank who hold their positions at the pleasure of
any position in government is primarily confidential, highly technical or policy determining rests solely in
the President and their personal or confidential staff(s);
petitioner by virtue of its constitutional power as the central personnel agency of the government.15

(3) Chairman and members of commissions and boards with fixed terms of office and their
Respondent avers otherwise, maintaining that the position of Corporate Secretary is confidential in
personal or confidential staff;
nature and that it is within the powers of the GSIS Board of Trustees to declare it so.16 She argues that in
determining the proper classification of a position, one should be guided by the nature of the office or
position, and not by its formal designation.17 (4) Contractual personnel or those whose employment in the government is in accordance
with a special contract to undertake a specific work or job, requiring special or technical skills
not available in the employing agency, to be accomplished within a specific period, which in
Thus, the Court is confronted with the following issues: whether the courts may determine the proper
no case shall exceed one year, and performs or accomplishes the specific work or job, under
classification of a position in government; and whether the position of corporate secretary in a GOCC is
his own responsibility with a minimum of direction and supervision from the hiring agency;
primarily confidential in nature.
and

The Court's Ruling

(5) Emergency and seasonal personnel. (Emphasis supplied)

The courts may determine the proper classification of a position in government.

Under Executive Order No. 292, or the Administrative Code of 1987, civil service positions are currently
classified into either 1) career service and 2) non-career service positions.18
Career positions are characterized by: (1) entrance based on merit and fitness to be determined as far
as practicable by competitive examinations, or based on highly technical qualifications; (2) opportunity
for advancement to higher career positions; and (3) security of tenure.19
In addition, the Administrative Code, under its Book V, sub-classifies career positions according to
"appointment status," divided into: 1) permanent - which is issued to a person who meets all the
requirements for the positions to which he is being appointed, including the appropriate eligibility
prescribed, in accordance with the provisions of law, rules and standards promulgated in pursuance
thereof; and 2) temporary - which is issued, in the absence of appropriate eligibles and when it becomes
necessary in the public interest to fill a vacancy, to a person who meets all the requirements for the
position to which he is being appointed except the appropriate civil service eligibility; provided, that such
temporary appointment shall not exceed twelve months, and the appointee may be replaced sooner if a
qualified civil service eligible becomes available.20
Positions that do not fall under the career service are considered non-career positions, which are
characterized by: (1) entrance on bases other than those of the usual tests of merit and fitness utilized
for the career service; and (2) tenure which is limited to a period specified by law, or which is co-
terminous with that of the appointing authority or subject to his pleasure, or which is limited to the
duration of a particular project for which purpose employment was made.21
A strict reading of the law reveals that primarily confidential positions fall under the non-career service.
It is also clear that, unlike career positions, primarily confidential and other non-career positions do not
have security of tenure. The tenure of a confidential employee is co-terminous with that of the
appointing authority, or is at the latter's pleasure. However, the confidential employee may be
appointed or remain in the position even beyond the compulsory retirement age of 65 years.22
Stated differently, the instant petition raises the question of whether the position of corporate secretary
in a GOCC, currently classified by the CSC as belonging to the permanent, career service, should be
classified as primarily confidential, i.e., belonging to the non-career service. The current GSIS Board holds
the affirmative view, which is ardently opposed by petitioner. Petitioner maintains that it alone can
classify government positions, and that the determination it made earlier, classifying the position of
GOCC corporate secretary as a permanent, career position, should be maintained.
At present, there is no law enacted by the legislature that defines or sets definite criteria for determining
primarily confidential positions in the civil service. Neither is there a law that gives an enumeration of
positions classified as primarily confidential.
What is available is only petitioner's own classification of civil service positions, as well as jurisprudence
which describe or give examples of confidential positions in government.
Thus, the corollary issue arises: should the Court be bound by a classification of a position as confidential
already made by an agency or branch of government?

Jurisprudence establishes that the Court is not bound by the classification of positions in the civil service
made by the legislative or executive branches, or even by a constitutional body like the petitioner.23 The
Court is expected to make its own determination as to the nature of a particular position, such as
whether it is a primarily confidential position or not, without being bound by prior classifications made
by other bodies.24 The findings of the other branches of government are merely considered initial and
not conclusive to the Court.25 Moreover, it is well-established that in case the findings of various
agencies of government, such as the petitioner and the CA in the instant case, are in conflict, the Court
must exercise its constitutional role as final arbiter of all justiciable controversies and disputes.26
Piñero v. Hechanova,27 interpreting R.A. No. 2260, or the Civil Service Act of 1959, emphasized how the
legislature refrained from declaring which positions in the bureaucracy are primarily confidential, policy
determining or highly technical in nature, and declared that such a determination is better left to the
judgment of the courts. The Court, with the ponencia of Justice J.B.L. Reyes, expounded, thus:
The change from the original wording of the bill (expressly declared by law x x x to be policy
determining, etc.) to that finally approved and enacted ("or which are policy determining, etc.
in nature") came about because of the observations of Senator Tañada, that as originally
worded the proposed bill gave Congress power to declare by fiat of law a certain position as
primarily confidential or policy determining, which should not be the case. The Senator
urged that since the Constitution speaks of positions which are "primarily confidential, policy
determining or highly technical in nature," it is not within the power of Congress to declare
what positions are primarily confidential or policy determining. "It is the nature alone of
the position that determines whether it is policy determining or primarily
confidential."Hence, the Senator further observed, the matter should be left to the "proper
implementation of the laws, depending upon the nature of the position to be filled", and if
the position is "highly confidential" then the President and the Civil Service Commissioner
must implement the law.
To a question of Senator Tolentino, "But in positions that involved both confidential
matters and matters which are routine, x x x who is going to determine whether it is
primarily confidential?" Senator Tañada replied:
"SENATOR TAÑADA: Well. at the first instance, it is the appointing power that
determines that: the nature of the position. In case of conflict then it is the Court
that determines whether the position is primarily confidential or not.
"I remember a case that has been decided by the Supreme Court involving the
position of a district engineer in Baguio, and there. precisely, the nature of the
position was in issue. It was the Supreme Court that passed upon the nature of the
position, and held that the President could not transfer the district engineer in
Baguio against his consent."
Senator Tañada, therefore, proposed an amendment to section 5 of the bill, deleting the
words "to be" and inserting in lieu thereof the words "Positions which are by their nature"
policy determining, etc., and deleting the last words "in nature". Subsequently, Senator
Padilla presented an amendment to the Tañada amendment by adopting the very words of
the Constitution, i.e., "those which are policy determining, primarily confidential and highly
technical in nature". The Padilla amendment was adopted, and it was this last wording with
24
which section 5 was passed and was enacted (Senate Journal, May 10, 1959, Vol. 11, No. 32,
pp. 679-681).
It is plain that, at least since the enactment of the 1959 Civil Service Act (R. A. 2260), it is the
nature of the position which finally determines whether a position is primarily confidential,
policy determining or highly technical. Executive pronouncements can be no more than
initial determinations that are not conclusive in case of conflict. And it must be so, or else it
would then lie within the discretion of title Chief Executive to deny to any officer, by
executive fiat, the protection of section 4, Article XII, of the Constitution.28(Emphasis and
underscoring supplied)
This doctrine in Piñero was reiterated in several succeeding cases.29
Presently, it is still the rule that executive and legislative identification or classification of primarily
confidential, policy-determining or highly technical positions in government is no more than mere
declarations, and does not foreclose judicial review, especially in the event of conflict. Far from what is
merely declared by executive or legislative fiat, it is the nature of the position which finally determines
whether it is primarily confidential, policy determining or highly technical, and no department in
government is better qualified to make such an ultimate finding than the judicial branch.
Judicial review was also extended to determinations made by petitioner. In Griño v. Civil Service
Commission,30 the Court held:
The fact that the position of respondent Arandela as provincial attorney has already been
classified as one under the career service and certified as permanent by the Civil Service
Commission cannot conceal or alter its highly confidential nature. As in Cadiente where the
position of the city legal officer was duly attested as permanent by the Civil Service
Commission before this Court declared that the same was primarily confidential, this Court
holds that the position of respondent Arandela as the provincial attorney of Iloilo is also a
primarily confidential position. To rule otherwise would be tantamount to classifying two
positions with the same nature and functions in two incompatible categories.31
The framers of the 1987 Constitution were of the same disposition. Section 2 (2) Article IX (B) of the
Constitution provides that:
Appointments in the civil service shall be made only according to merit and fitness to be
determined, as far as practicable, and, except to positions which are policy-determining,
primarily confidential, or highly technical, by competitive examination.
The phrase "in nature" after the phrase "policy-determining, primarily confidential, or highly technical"
was deleted from the 1987 Constitution.32 However, the intent to lay in the courts the power to
determine the nature of a position is evident in the following deliberation:
MR. FOZ. Which department of government has the power or authority to determine
whether a position is policy-determining or primarily confidential or highly technical?
FR. BERNAS: The initial decision is made by the legislative body or by the executive
department, but the final decision is done by the court. The Supreme Court has constantly

held that whether or not a position is policy-determining, primarily confidential or highly
technical, it is determined not by the title but by the nature of the task that is entrusted to
it. For instance, we might have a case where a position is created requiring that the holder of
that position should be a member of the Bar and the law classifies this position as highly
technical. However, the Supreme Court has said before that a position which requires mere
membership in the Bar is not a highly technical position. Since the term 'highly technical'
means something beyond the ordinary requirements of the profession, it is always a question
of fact.
MR. FOZ. Does not Commissioner Bernas agree that the general rule should be that the merit
system or the competitive system should be upheld?
FR. BERNAS. I agree that that it should be the general rule; that is why we are putting this as
an exception.
MR. FOZ. The declaration that certain positions are policy-determining, primarily confidential
or highly technical has been the source of practices which amount to the spoils system.
FR. BERNAS. The Supreme Court has always said that, but if the law of the administrative
agency says that a position is primarily confidential when in fact it is not, we can always
challenge that in court. It is not enough that the law calls it primarily confidential to make it
such; it is the nature of the duties which makes a position primarily confidential.
MR. FOZ. The effect of a declaration that a position is policy-determining, primarily
confidential or highly technical - as an exception - is to take it away from the usual rules and
provisions of the Civil Service Law and to place it in a class by itself so that it can avail itself of
certain privileges not available to the ordinary run of government employees and officers.
FR. BERNAS. As I have already said, this classification does not do away with the requirement
of merit and fitness. All it says is that there are certain positions which should not be
determined by competitive examination.
For instance, I have just mentioned a position in the Atomic Energy Commission. Shall we
require a physicist to undergo a competitive examination before appointment? Or a
confidential secretary or any position in policy-determining administrative bodies, for that
matter? There are other ways of determining merit and fitness than competitive examination.
This is not a denial of the requirement of merit and fitness.33 (Emphasis supplied)
This explicit intent of the framers was recognized in Civil Service Commission v. Salas,34 and Philippine
Amusement and Gaming Corporation v. Rilloraza,35 which leave no doubt that the question of whether
the position of Corporate Secretary of GSIS is confidential in nature may be determined by the Court.
The position of corporate secretary in a government owned
and controlled corporation, currently classified as a permanent
career position, is primarily confidential in nature.
First, there is a need to examine how the term "primarily confidential in nature" is described
in jurisprudence. According to Salas,36
25
Prior to the passage of the x x x Civil Service Act of 1959 (R.A. No. 2260), there were two
recognized instances when a position may be considered primarily confidential: Firstly, when
the President, upon recommendation of the Commissioner of Civil Service, has declared the
position to be primarily confidential; and, secondly in the absence of such declaration, when
by the nature of the functions of the office there exists "close intimacy" between the
appointee and appointing power which insures freedom of intercourse without
embarrassment or freedom from misgivings of betrayals of personal trust or confidential
matters of state.37(Emphasis supplied)
However, Salas declared that since the enactment of R.A. No. 2260 and Piñero,38 it is the nature of the
position which finally determines whether a position is primarily confidential or not, without regard to
existing executive or legislative pronouncements either way, since the latter will not bind the courts in
case of conflict.
A position that is primarily confidential in nature is defined as early as 1950 in De los Santos v.
Mallare,39 through the ponencia of Justice Pedro Tuason, to wit:
x x x These positions (policy-determining, primarily confidential and highly technical
positions), involve the highest degree of confidence, or are closely bound up with and
dependent on other positions to which they are subordinate, or are temporary in nature. It
may truly be said that the good of the service itself demands that appointments coming
under this category be terminable at the will of the officer that makes them.
Every appointment implies confidence, but much more than ordinary confidence is reposed
in the occupant of a position that is primarily confidential. The latter phrase denotes not
only confidence in the aptitude of the appointee for the duties of the office but primarily
close intimacy which insures freedom of [discussion, delegation and reporting] without
embarrassment or freedom from misgivings of betrayals of personal trust or confidential
matters of state. x x x40 (Emphasis supplied)
Since the definition in De los Santos came out, it has guided numerous other cases.41 Thus, it still stands
that a position is primarily confidential when by the nature of the functions of the office there exists
"close intimacy" between the appointee and appointing power which insures freedom of intercourse
without embarrassment or freedom from misgivings of betrayals of personal trust or confidential
matters of state.
In classifying a position as primarily confidential, its functions must not be routinary, ordinary and day to
day in character.42 A position is not necessarily confidential though the one in office may sometimes
handle confidential matters or documents.43 Only ordinary confidence is required for all positions in the
bureaucracy. But, as held in De los Santos,[44] for someone holding a primarily confidential position,
more than ordinary confidence is required.
In Ingles v. Mutuc,45 the Court, through Chief Justice Roberto Concepcion as ponente, stated:
Indeed, physicians handle confidential matters. Judges, fiscals and court stenographers
generally handle matters of similar nature. The Presiding and Associate Justices of the Court
of Appeals sometimes investigate, by designation of the Supreme Court, administrative
complaints against judges of first instance, which are confidential in nature. Officers of the
Department of Justice, likewise, investigate charges against municipal judges. Assistant

Solicitors in the Office of the Solicitor General often investigate malpractice charges against
members of the Bar. All of these are "confidential" matters, but such fact does not warrant
the conclusion that the office or position of all government physicians and all Judges, as
well as the aforementioned assistant solicitors and officers of the Department of Justice
are primarilyconfidential in character.46 (Emphasis supplied)
It is from De los Santos that the so-called "proximity rule" was derived. A position is considered to be
primarily confidential when there is a primarily close intimacy between the appointing authority and the
appointee, which ensures the highest degree of trust and unfettered communication and discussion on
the most confidential of matters.47 This means that where the position occupied is already remote from
that of the appointing authority, the element of trust between them is no longer predominant.48 On
further interpretation in Griño, this was clarified to mean that a confidential nature would be limited to
those positions not separated from the position of the appointing authority by an intervening public
officer, or series of public officers, in the bureaucratic hierarchy.49
Consequently, brought upon by their remoteness to the position of the appointing authority, the
following were declared by the Court to be not primarily confidential positions: City Engineer;50 Assistant
Secretary to the Mayor;51members of the Customs Police Force or Port Patrol;52 Special Assistant of the
Governor of the Central Bank, Export Department;53 Senior Executive Assistant, Clerk I and Supervising
Clerk I and Stenographer in the Office of the President;54 Management and Audit Analyst I of the Finance
Ministry Intelligence Bureau;55 Provincial Administrator;56 Internal Security Staff of the Philippine
Amusement and Gaming Corporation (PAGCOR);57 Casino Operations Manager;58 and Slot Machine
Attendant.59 All positions were declared to be not primarily confidential despite having been previously
declared such either by their respective appointing authorities or the legislature.
The following were declared in jurisprudence to be primarily confidential positions: Chief Legal Counsel
of the Philippine National Bank;60 Confidential Agent of the Office of the Auditor, GSIS;61 Secretary of
the SangguniangBayan;62 Secretary to the City Mayor;63 Senior Security and Security Guard in the Office
of the Vice Mayor;64Secretary to the Board of a government corporation;65 City Legal Counsel, City Legal
Officer or City Attorney;66Provincial Attorney;67 Private Secretary;68 and Board Secretary II of the
Philippine State College of Aeronautics.69
In fine, a primarily confidential position is characterized by the close proximity of the positions of the
appointer and appointee as well as the high degree of trust and confidence inherent in their relationship.
Ineluctably therefore, the position of Corporate Secretary of GSIS, or any GOCC, for that matter, is a
primarily confidential position. The position is clearly in close proximity and intimacy with the appointing
power. It also calls for the highest degree of confidence between the appointer and appointee.
In classifying the position of Corporate Secretary of GSIS as primarily
confidential, the Court took into consideration the proximity rule together with the duties of the
corporate secretary, enumerated as follows:70
1. Performs all duties, and exercises the power, as defined and enumerated in Section 4, Title
IX, P.D. No. 1146;
26
2. Undertakes research into past Board resolutions, policies, decisions, directives and other
Board action, and relate these to present matters under Board consideration;
3. Analyzes and evaluates the impact, effects and relevance of matters under Board
consideration on existing Board policies and provide the individual Board members with these
information so as to guide or enlighten them in their Board decision;
4. Records, documents and reproduces in sufficient number all proceedings of Board
meetings and disseminate relevant Board decisions/information to those units concerned;
5. Coordinates with all functional areas and units concerned and monitors the manner of
implementation of approved Board resolutions, policies and directives;
6. Maintains a permanent, complete, systematic and secure compilation of all previous
minutes of Board meetings, together with all their supporting documents;
7. Attends, testifies and produces in Court or in administrative bodies duly certified copies of
Board resolutions, whenever required;
8. Undertakes the necessary physical preparations for scheduled Board meetings;
9. Pays honoraria of the members of the Board who attend Board meetings;
10. Takes custody of the corporate seal and safeguards against unauthorized use; and
11. Performs such other functions as the Board may direct and/or require.
The nature of the duties and functions attached to the position points to its highly confidential
character.71 The secretary reports directly to the board of directors, without an intervening officer in
between them.72 In such an arrangement, the board expects from the secretary nothing less than the
highest degree of honesty, integrity and loyalty, which is crucial to maintaining between them "freedom
of intercourse without embarrassment or freedom from misgivings or betrayals of personal trust or
confidential matters of state."73
The responsibilities of the corporate secretary are not merely clerical or routinary in nature. The work
involves constant exposure to sensitive policy matters and confidential deliberations that are not always
open to the public, as unscrupulous persons may use them to harm the corporation. Board members
must have the highest confidence in the secretary to ensure that their honest sentiments are always and
fully expressed, in the interest of the corporation. In this respect, the nature of the corporate secretary's
work is akin to that of a personal secretary of a public official, a position long recognized to be primarily
confidential in nature.74 The only distinction is that the corporate secretary is secretary to the entire
board, composed of a number of persons, but who essentially act as one body, while the private
secretary works for only one person. However, the degree of confidence involved is essentially the same.
Not only do the tasks listed point to sensitive and confidential acts that the corporate secretary must
perform, they also include "such other functions as the Board may direct and/or require," a clear
 27

indication of a closely intimate relationship that exists between the secretary and the board. In such a
highly acquainted relation, great trust and confidence between appointer and appointee is required.
The loss of such trust or confidence could easily result in the board's termination of the secretary's
services and ending of his term. This is understandably justified, as the board could not be expected to
function freely with a suspicious officer in its midst. It is for these same reasons that jurisprudence, as
earlier cited, has consistently characterized personal or private secretaries, and board secretaries, as
positions of a primarily confidential nature.75
• Apr. 3, 2002 – GSIS President Winston F. Garcia, with the approval of the BOT reappointed Nita as the
Corporate Secretary classifying her position as “confidential in nature and tenure of office is at the
pleasure of the Board”
Side of the Petitioner/Appellee:
• CSC alleges that Nita’s reappointment on confidential status was meant to illegally extend her service
and circumvent the laws on compulsory retirement

The CA did not err in declaring that the position of Corporate Secretary of GSIS is primarily confidential in
• Under RA 8291, the compulsory retirement age is 65 years old, however ‘a person who has reached the
nature and does not belong to the career service.
age compulsory retirement may still be appointed in a confidential position’

The Court is aware that this decision has repercussions on the tenure of other corporate secretaries in
• CSC also noted that the position of Corporate Secretary is a permanent position (career) and not
various GOCCs. The officers likely assumed their positions on permanent career status, expecting
primarily confidential (non-career)
protection for their tenure and appointments, but are now re-classified as primarily confidential
appointees. Such concern is unfounded, however, since the statutes themselves do not classify the
position of corporate secretary as permanent and career in nature. Moreover, there is no absolute Side of the Respondent/Appellant:
guarantee that it will not be classified as confidential when a dispute arises. As earlier stated, the Court,
by legal tradition, has the power to make a final determination as to which positions in government are • GSIS and Nita Javier insist that the position of Corporate Secretary is one of primarily confidential
primarily confidential or otherwise. In the light of the instant controversy, the Court's view is that the nature
greater public interest is served if the position of a corporate secretary is classified as primarily
confidential in nature.
CA RULING:

Moreover, it is a basic tenet in the country's constitutional system that "public office is a public
trust,"76 and that there is no vested right in public office, nor an absolute right to hold office.77 No • Sept 29, 2005 – CA ruled that the position of Corporate Secretary is a position of primarily confidential
proprietary title attaches to a public office, as public service is not a property right.78 Excepting nature
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.79 The rule is that offices in government, except those created • Petitioner CSC filed for reconsideration but this was denied, hence present petition
by the constitution, may be abolished, altered, or created anytime by statute.80 And any issues on the
classification for a position in government may be brought to and determined by the courts.81
ISSUE: WON position of Corporate Secretary is primarily confidential in nature – YES

WHEREFORE, premises considered, the Petition is DENIED. The Decision of the Court of Appeals dated
September 29, 2005, in CA-G.R. SP No. 88568, as well as its Resolution of June 5, 2006 are
hereby AFFIRMED in toto. No costs. SO ORDERED.
NATURE OF ACTION: Petition for review on certiorari of the decision and resolution of the CA
FACTS:
• Respondent Nita Javier was first employed as a Private Secretary at the GSIS on a confidential status,
she was then promoted to Tabulating Equipment Operator with a permanent status, this status stayed
with her throughout her career
HELD:
According to Jurisprudence, there are two recognized instances when a position may be considered
primarily confidential;
(1) when the President has declared the position to be primarily confidential
(2) in absence of such declaration, when by the nature of the functions of the office there exists “close
intimacy” between the appointee and the appointing power which insures freedom of intercourse
without embarrassment or freedom from misgivings of betrayals of personal trust or confidential
matters of state

• Years later, she was appointed Corporate Secretary of the Board of Trustees of the corporation The position of Corporate Secretary of GSIS is clearly in close proximity and intimacy with the appointing
power, it also calls for the highest degree of confidence between the appointer and appointee. The Court
therefore held that Nita reappointment valid and that the CA did not err when it ruled the position to be
• In 2001, shy of her 64th birthday, Nita opted for early retirement primarily confidential in nature.

EN BANC
G.R. No. 193677 September 6, 2011
LUCIANO VELOSO, ABRAHAM CABOCHAN, JOCELYN DAWIS-ASUNCION and MARLON M.
LACSON,Petitioners,
vs.
COMMISSION ON AUDIT, Respondent.
DECISION
PERALTA, J.:
This is a Petition for Review on Certiorari under Rule 65 of the Rules of Court assailing Decision No. 2008-
0881dated September 26, 2008 and Decision No. 2010-0772 dated August 23, 2010 of the Commission on
Audit (COA) sustaining Notice of Disallowance (ND) No. 06-010-100-053 dated May 24, 2006 disallowing
the payment of monetary reward as part of the Exemplary Public Service Award (EPSA) to former three-
term councilors of the City of Manila authorized by City Ordinance No. 8040.
The facts of the case are as follows:
On December 7, 2000, the City Council of Manila enacted Ordinance No. 8040 entitled An Ordinance
Authorizing the Conferment of Exemplary Public Service Award to Elective Local Officials of Manila Who
Have Been Elected for Three (3) Consecutive Terms in the Same Position. Section 2 thereof provides:
SEC. 2. The EPSA shall consist of a Plaque of Appreciation, retirement and gratuity pay remuneration
equivalent to the actual time served in the position for three (3) consecutive terms, subject to the
availability of funds as certified by the City Treasurer. PROVIDED, That [it] shall be accorded to qualified
elected City Officials on or before the first day of service in an appropriated public ceremony to be
conducted for the purpose. PROVIDED FURTHER, That this Ordinance shall only cover the Position of
Mayor, Vice-Mayor and Councilor: PROVIDED FURTHERMORE, That those who were elected for this term
and run for higher elective position thereafter, after being elected shall still be eligible for this award for
the actual time served: PROVIDED FINALLY That the necessary and incidental expenses needed to
implement the provisions of this Ordinance shall be appropriated and be included in the executive
budget for the year when any city official will qualify for the Award.4
The ordinance was deemed approved on August 23, 2002.
Pursuant to the ordinance, the City made partial payments in favor of the following former councilors:
Councilor/Recipients Check Date Amount
Abraham C. Cabochan 353010 06/07/05 ₱1,658,989.09
Julio E. Logarta, Jr. 353156 06/14/05 ₱1,658,989.08
Luciano M. Veloso 353778 06/30/05 ₱1,658,989.08
28
Jocelyn Dawis-Asuncion 353155 06/14/05 ₱1,658,989.08
Marlon M. Lacson 353157 06/14/05 ₱1,658,989.08
Heirs of Hilarion C. Silva 353093 06/09/05 ₱1,628,311.59
5
TOTAL ₱9,923,257.00
On August 8, 2005, Atty. Gabriel J. Espina (Atty. Espina), Supervising Auditor of the City of Manila, issued
Audit Observation Memorandum (AOM) No. 2005-100(05)07(05)6 with the following observations:
1. The initial payment of monetary reward as part of Exemplary Public Service Award (EPSA)
amounting to ₱9,923,257.00 to former councilors of the City Government of Manila who have
been elected for three (3) consecutive terms to the same position as authorized by City
Ordinance No. 8040 is without legal basis.
2. The amount granted as monetary reward is excessive and tantamount to double
compensation in contravention to Article 170 (c) of the IRR of RA 7160 which provides that no
elective or appointive local official shall receive additional, double or indirect compensation
unless specifically authorized by law.
3. The appropriations for retirement gratuity to implement EPSA ordinance was classified as
Maintenance and Other Operating Expenses instead of Personal Services contrary to Section
7, Volume III of the Manual on the New Government Accounting System (NGAS) for local
government units and COA Circular No. 2004-008 dated September 20, 2004 which provide
the updated description of accounts under the NGAS.7
After evaluation of the AOM, the Director, Legal and Adjudication Office (LAO)-Local of the COA issued
ND No. 06-010-100-058 dated May 24, 2006.
On November 9, 2006, former councilors Jocelyn Dawis-Asuncion (Dawis-Asuncion), Luciano M. Veloso
(Veloso), Abraham C. Cabochan (Cabochan), Marlon M. Lacson (Lacson), Julio E. Logarta, Jr., and Monina
U. Silva, City Accountant Gloria C. Quilantang, City Budget Officer Alicia Moscaya and then Vice Mayor
and Presiding Officer Danilo B. Lacuna filed a Motion to Lift the Notice of Disallowance.9 In its Decision
No. 2007-17110 dated November 29, 2007, the LAO-Local decided in favor of the movants, the pertinent
portion of which reads:
WHEREFORE, premises considered, the motion of former Vice- Mayor Danilo B. Lacuna, et al., is
GRANTED and ND No. 06-010-100-05 dated May 24, 2006 is hereby ordered lifted as the reasons for the
disallowance have been sufficiently explained. This decision, however, should not be taken as
precedence (sic) to other or similar personal benefits that a local government unit may extend which
should be appreciated based on their separate and peculiar circumstances.11
Citing Article 170 of the Implementing Rules and Regulations (IRR) of Republic Act (RA) No. 7160, the
LAO-Local held that the monetary reward given to the former councilors can be one of gratuity and,
therefore, cannot be considered as additional, double or indirect compensation. Giving importance to
the principle of local autonomy, the LAO-local upheld the power of local government units (LGUs) to
grant allowances. More importantly, it emphasized that the Department of Budget and Management

(DBM) did not disapprove the appropriation for the EPSA of the City which indicate that the same is
valid.12
Upon review, the COA rendered the assailed Decision No. 2008-088 sustaining ND No. 06-010-100-
05.13 The motion for reconsideration was likewise denied in Decision No. 2010-077.14 The COA opined
that the monetary reward under the EPSA is covered by the term "compensation." Though it recognizes
the local autonomy of LGUs, it emphasized the limitations thereof set forth in the Salary Standardization
Law (SSL). It explained that the SSL does not authorize the grant of such monetary reward or gratuity. It
also stressed the absence of a specific law passed by Congress which ordains the conferment of such
monetary reward or gratuity to the former councilors.15 In Decision No. 2010-077, in response to the
question on its jurisdiction to rule on the legality of the disbursement, the COA held that it is vested by
the Constitution the power to determine whether government entities comply with laws and regulations
in disbursing government funds and to disallow irregular disbursements.16
Aggrieved, petitioners Veloso, Cabochan, Dawis-Asuncion and Lacson come before the Court in this
special civil action for certiorari alleging grave abuse of discretion on the part of the COA. Specifically,
petitioners claim that:
The respondent Commission on Audit did not only commit a reversible error but was, in fact, guilty of
grave abuse of discretion amounting to lack or excess of jurisdiction when it ruled that the monetary
award given under the EPSA partakes of the nature of an additional compensation prohibited under the
Salary Standardization Law, and other existing laws, rules and regulations, and not a GRATUITY
"voluntarily given in return for a favor or services rendered purely out of generosity of the giver or
grantor." (Plastic Tower Corporation vs. NLRC, 172 SCRA 580-581).
Apart from being totally oblivious of the fact that the monetary award given under the EPSA was
intended or given in return for the exemplary service rendered by its recipient(s), the respondent COA
further committed grave abuse of discretion when it effectively nullified a duly-enacted ordinance which
is essentially a judicial function. In other words, in the guise of disallowing the disbursement in question,
the respondent Commission arrogated unto itself an authority it did not possess, and a prerogative it did
not have.17
On November 30, 2010, the Court issued a Status Quo Ante Order18 requiring the parties to maintain the
status quo prevailing before the implementation of the assailed COA decisions.
There are two issues for resolution: (1) whether the COA has the authority to disallow the disbursement
of local government funds; and (2) whether the COA committed grave abuse of discretion in affirming
the disallowance of ₱9,923,257.00 covering the EPSA of former three-term councilors of the City of
Manila authorized by Ordinance No. 8040.
In their Reply,19 petitioners insist that the power and authority of the COA to audit government funds
and accounts does not carry with it in all instances the power to disallow a particular
disbursement.20 Citing Guevara v. Gimenez,21 petitioners claim that the COA has no discretion or
authority to disapprove payments on the ground that the same was unwise or that the amount is
unreasonable. The COA's remedy, according to petitioners, is to bring to the attention of the proper
administrative officer such expenditures that, in its opinion, are irregular, unnecessary, excessive or
extravagant.22 While admitting that the cited case was decided by the Court under the 1935 Constitution,
petitioners submit that the same principle applies in the present case.
29
We do not agree.
As held in National Electrification Administration v. Commission on Audit,23 the ruling in Guevara cited by
petitioners has already been overturned by the Court in Caltex Philippines, Inc. v. Commission on
Audit.24 The Court explained25 that under the 1935 Constitution, the Auditor General could not correct
irregular, unnecessary, excessive or extravagant expenditures of public funds, but could only bring the
matter to the attention of the proper administrative officer. Under the 1987 Constitution, however, the
COA is vested with the authority to determine whether government entities, including LGUs, comply
with laws and regulations in disbursing government funds, and to disallow illegal or irregular
disbursements of these funds.
Section 2, Article IX-D of the Constitution gives a broad outline of the powers and functions of the COA,
to wit:
Section 2. (1) The Commission on Audit shall have the power, authority, and duty to examine, audit, and
settle all accounts pertaining to the revenue and receipts of, and expenditures or uses of funds and
property, owned or held in trust by, or pertaining to, the Government, or any of its subdivisions,
agencies, or instrumentalities, including government-owned or controlled corporations with original
charters, and on a post-audit basis: (a) constitutional bodies, commissions and offices that have been
granted fiscal autonomy under this Constitution; (b) autonomous state colleges and universities; (c)
other government-owned or controlled corporations and their subsidiaries; and (d) such non-
governmental entities receiving subsidy or equity, directly or indirectly, from or through the
Government, which are required by law or the granting institution to submit to such audit as a condition
of subsidy or equity. However, where the internal control system of the audited agencies is inadequate,
the Commission may adopt such measures, including temporary or special pre-audit, as are necessary
and appropriate to correct the deficiencies. It shall keep the general accounts of the Government and,
for such period as may be provided by law, preserve the vouchers and other supporting papers
pertaining thereto.
(2) The Commission shall have exclusive authority, subject to the limitations in this Article, to define the
scope of its audit and examination, establish the techniques and methods required therefor, and
promulgate accounting and auditing rules and regulations, including those for the prevention and
disallowance of irregular, unnecessary, excessive, extravagant, or unconscionable expenditures, or
uses of government funds and properties.26
Section 11, Chapter 4, Subtitle B, Title I, Book V of the Administrative Code of 1987 echoes this
constitutional mandate to COA.
Under the first paragraph of the above provision, the COA's audit jurisdiction extends to the
government, or any of its subdivisions, agencies, or instrumentalities, including government-owned or
controlled corporations with original charters. Its jurisdiction likewise covers, albeit on a post-audit basis,
the constitutional bodies, commissions and offices that have been granted fiscal autonomy, autonomous
state colleges and universities, other government-owned or controlled corporations and their
subsidiaries, and such non-governmental entities receiving subsidy or equity from or through the
government. The power of the COA to examine and audit government agencies cannot be taken away
from it as Section 3, Article IX-D of the Constitution mandates that "no law shall be passed exempting
any entity of the Government or its subsidiary in any guise whatever, or any investment of public funds,
from the jurisdiction of the [COA]."

Pursuant to its mandate as the guardian of public funds, the COA is vested with broad powers over all
accounts pertaining to government revenue and expenditures and the uses of public funds and
property.27 This includes the exclusive authority to define the scope of its audit and examination,
establish the techniques and methods for such review, and promulgate accounting and auditing rules
and regulations.28 The COA is endowed with enough latitude to determine, prevent and disallow
irregular, unnecessary, excessive, extravagant or unconscionable expenditures of government funds.29 It
is tasked to be vigilant and conscientious in safeguarding the proper use of the government's, and
ultimately the people's, property.30 The exercise of its general audit power is among the constitutional
mechanisms that gives life to the check and balance system inherent in our form of government.31
The Court had therefore previously upheld the authority of the COA to disapprove payments which it
finds excessive and disadvantageous to the Government; to determine the meaning of "public bidding"
and when there is failure in the bidding; to disallow expenditures which it finds unnecessary according to
its rules even if disallowance will mean discontinuance of foreign aid; to disallow a contract even after it
has been executed and goods have been delivered.32
Thus, LGUs, though granted local fiscal autonomy, are still within the audit jurisdiction of the COA.
Now on the more important issue of whether the COA properly exercised its jurisdiction in disallowing
the disbursement of the City of Manila's funds for the EPSA of its former three-term councilors.
It is the general policy of the Court to sustain the decisions of administrative authorities, especially one
which is constitutionally-created not only on the basis of the doctrine of separation of powers but also
for their presumed expertise in the laws they are entrusted to enforce. Findings of administrative
agencies are accorded not only respect but also finality when the decision and order are not tainted with
unfairness or arbitrariness that would amount to grave abuse of discretion. 33 It is only when the COA has
acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess
of jurisdiction, that this Court entertains a petition questioning its rulings.34 There is grave abuse of
discretion when there is an evasion of a positive duty or a virtual refusal to perform a duty enjoined by
law or to act in contemplation of law as when the judgment rendered is not based on law and evidence
but on caprice, whim and despotism.35
In this case, we find no grave abuse of discretion on the part of the COA in issuing the assailed decisions
as will be discussed below.
Petitioners claim that the grant of the retirement and gratuity pay remuneration is a valid exercise of the
powers of the Sangguniang Panlungsod set forth in RA 7160.
We disagree.
Indeed, Section 458 of RA 7160 defines the power, duties, functions and compensation of the
Sangguniang Panlungsod, to wit:
SEC. 458. Powers, Duties, Functions and Compensation. - (a) The Sangguniang Panlungsod, as the
legislative body of the city, shall enact ordinances, approve resolutions and appropriate funds for the
general welfare of the city and its inhabitants pursuant to Section 16 of this Code and in the proper
exercise of the corporate powers of the city as provided for under Section 22 of this Code, and shall:
30
(viii) Determine the positions and salaries, wages, allowances and other emoluments and benefits of
officials and employees paid wholly or mainly from city funds and provide for expenditures necessary for
the proper conduct of programs, projects, services, and activities of the city government.
In the exercise of the above power, the City Council of Manila enacted on December 7, 2000 Ordinance
No. 8040, but the same was deemed approved on August 23, 2002. The ordinance authorized the
conferment of the EPSA to the former three-term councilors and, as part of the award, the qualified city
officials were to be given "retirement and gratuity pay remuneration." We believe that the award is a
"gratuity" which is a free gift, a present, or benefit of pecuniary value bestowed without claim or
demand, or without consideration.36
However, as correctly held by the COA, the above power is not without limitations. These limitations are
embodied in Section 81 of RA 7160, to wit:
SEC. 81. Compensation of Local Officials and Employees. The compensation of local officials and
personnel shall be determined by the sanggunian concerned: Provided, That the increase in
compensation of elective local officials shall take effect only after the terms of office of those approving
such increase shall have expired: Provided, further, That the increase in compensation of the appointive
officials and employees shall take effect as provided in the ordinance authorizing such increase; Provided
however, That said increases shall not exceed the limitations on budgetary allocations for personal
services provided under Title Five, Book II of this Code: Provided finally, That such compensation may be
based upon the pertinent provisions of Republic Act Numbered Sixty-seven fifty-eight (R.A. No. 6758),
otherwise known as the "Compensation and Position Classification Act of 1989.
Moreover, the IRR of RA 7160 reproduced the Constitutional provision that "no elective or appointive
local official or employee shall receive additional, double, or indirect compensation, unless specifically
authorized by law, nor accept without the consent of the Congress, any present, emoluments, office, or
title of any kind from any foreign government." Section 325 of the law limit the total appropriations for
personal services37 of a local government unit to not more than 45% of its total annual income from
regular sources realized in the next preceding fiscal year.
While it may be true that the above appropriation did not exceed the budgetary limitation set by RA
7160, we find that the COA is correct in sustaining ND No. 06-010-100-05.
Section 2 of Ordinance No. 8040 provides for the payment of "retirement and gratuity pay
remuneration equivalent to the actual time served in the position for three (3) consecutive terms" as
part of the EPSA. The recomputation of the award disclosed that it is equivalent to the total
compensation received by each awardee for nine years that includes basic salary, additional
compensation, Personnel Economic Relief Allowance, representation and transportation allowance, rice
allowance, financial assistance, clothing allowance, 13th month pay and cash gift.38 This is not disputed
by petitioners. There is nothing wrong with the local government granting additional benefits to the
officials and employees. The laws even encourage the granting of incentive benefits aimed at improving
the services of these employees. Considering, however, that the payment of these benefits constitute
disbursement of public funds, it must not contravene the law on disbursement of public funds.39 lawphi1
As clearly explained by the Court in Yap v. Commission on Audit,40 the disbursement of public funds,
salaries and benefits of government officers and employees should be granted to compensate them for
valuable public services rendered, and the salaries or benefits paid to such officers or employees must be
commensurate with services rendered. In the same vein, additional allowances and benefits must be

shown to be necessary or relevant to the fulfillment of the official duties and functions of the
government officers and employees. Without this limitation, government officers and employees may be
paid enormous sums without limit or without justification necessary other than that such sums are being
paid to someone employed by the government. Public funds are the property of the people and must be
used prudently at all times with a view to prevent dissipation and waste.41
Undoubtedly, the above computation of the awardees' reward is excessive and tantamount to double
and additional compensation. This cannot be justified by the mere fact that the awardees have been
elected for three (3) consecutive terms in the same position. Neither can it be justified that the reward is
given as a gratuity at the end of the last term of the qualified elective official. The fact remains that the
remuneration is equivalent to everything that the awardees received during the entire period that he
served as such official. Indirectly, their salaries and benefits are doubled, only that they receive half of
them at the end of their last term.
The purpose of the prohibition against additional or double compensation is best expressed in Peralta v.
Auditor General,42 to wit:
This is to manifest a commitment to the fundamental principle that a public office is a public trust. It is
expected of a government official or employee that he keeps uppermost in mind the demands of public
welfare. He is there to render public service. He is of course entitled to be rewarded for the performance
of the functions entrusted to him, but that should not be the overriding consideration. The intrusion of
the thought of private gain should be unwelcome. The temptation to further personal ends, public
employment as a means for the acquisition of wealth, is to be resisted. That at least is the idea. There is
then to be an awareness on the part of the officer or employee of the government that he is to receive
only such compensation as may be fixed by law. With such a realization, he is expected not to avail
himself of devious or circuitous means to increase the remuneration attached to his position.43
Verily, the COA's assailed decisions were made in faithful compliance with its mandate and in judicious
exercise of its general audit power as conferred on it by the Constitution.44 The COA adheres to the
policy that government funds and property should be fully protected and conserved and that irregular,
unnecessary, excessive or extravagant expenditures or uses of such funds and property should be
prevented.45
However, in line with existing jurisprudence,46 we need not require the refund of the disallowed amount
because all the parties acted in good faith. In this case, the questioned disbursement was made pursuant
to an ordinance enacted as early as December 7, 2000 although deemed approved only on August 22,
2002. The city officials disbursed the retirement and gratuity pay remuneration in the honest belief that
the amounts given were due to the recipients and the latter accepted the same with gratitude, confident
that they richly deserve such reward.
WHEREFORE, the petition is DISMISSED. Decision No. 2008-088 dated September 26, 2008 and Decision
No. 2010-077 dated August 23, 2010 of the Commission on Audit, are AFFIRMED WITH MODIFICATION.
The recipients need not refund the retirement and gratuity pay remuneration that they already received.
Accordingly, the Status Quo Ante Order issued by the Court on November 30, 2010 is
hereby RECALLED. In view, however, of this Court's decision not to require the refund of the amounts
already received, the Commission on Audit is ORDERED to cease and desist from enforcing the Notice of
Finality of Decision47 dated October 5, 2010.
31
SO ORDERED.
G.R. No. 193677 September 6, 2011
LUCIANO VELOSO, ABRAHAM CABOCHAN, JOCELYN DAWIS-ASUNCION and MARLON M. LACSON,
Petitioners,
vs.
COMMISSION ON AUDIT, Respondent.
Facts:
On December 7, 2000, the City Council of Manila enacted Ordinance No. 8040 entitled An Ordinance
Authorizing the Conferment of Exemplary Public Service Award to Elective Local Officials of Manila Who
Have Been Elected for Three (3) Consecutive Terms in the Same Position. Section 2 thereof provides:
SEC. 2. The EPSA shall consist of a Plaque of Appreciation, retirement and gratuity
pay remuneration equivalent to the actual time served in the position for three (3)
consecutive terms, subject to the availability of funds as certified by the City
Treasurer. ….xxx…..
Pursuant to the ordinance, the City made partial payments to some former city councilors
including herein petitioners the total amount of P9, 923,257.00.
On August 8,2005, Atty. Gabriel J. Espina (Atty. Espina), Supervising Auditor of the City of Manila, issued
Audit Observation Memorandum (AOM) No. 2005-100(05)07(05) stating that Ordinance No. 8040 is
without legal basis and the amount granted as monetary reward is excessive and tantamount to double
compensation. After evaluation of the AOM, the Director, Legal and Adjudication Office (LAO)-Local of
the COA issued a Notice of Disallowance.
Upon review, the COA rendered the assailed the decision sustaining ND (Notice of Disallowance) No. 06-
010-100-05. The motion for reconsideration was likewise denied. The COA opined that the monetary
reward under the EPSA is covered by the term compensation. Though it recognizes the local autonomy
of LGUs, it emphasized the limitations thereof set forth in the Salary Standardization Law (SSL). It
explained that the SSL does not authorize the grant of such monetary reward or gratuity. It also stressed
the absence of a specific law passed by Congress which ordains the conferment of such monetary reward
or gratuity to the former councilors. In response to the question on its jurisdiction to rule on the legality
of the disbursement, the COA held that it is vested by the Constitution the power to determine whether
government entities comply with laws and regulations in disbursing government funds and to disallow
irregular disbursements.
The petitioners come before the court claiming that the respondent committed a grave abuse of
discretion amounting to lack or excess of jurisdiction when it ruled that the monetary award given under
the EPSA partakes of the nature of an additional compensation prohibited under the Salary
Standardization Law, and other existing laws, rules and regulations, and not a GRATUITY voluntarily given
in return for a favor or services rendered purely out of generosity of the giver or grantor.
 32

Issues:

1. Whether or not the awardees’ reward is excessive and tantamount to double and additional
compensation.
2. Whether or not the COA has authority to disallow the disbursement of local government
funds.
3. Whether or not the COA committed grave abuse of discretion in affirming the disallowance
of P9, 923,257.00 covering the EPSA of former three-term councilors of the City of Manila
authorized by Ordinance No. 8040.

Ruling:

1. Yes, the computation of the awardees' reward is excessive and tantamount to

double and additional compensation. This cannot be justified by the mere fact that the
awardees have been elected for three (3) consecutive terms in the same position. Neither can
it be justified that the reward is given as a gratuity at the end of the last term of the qualified
elective official. The fact remains that the remuneration is equivalent to everything that the
awardees received during the entire period that he served as such official. Indirectly, their
salaries and benefits are doubled, only that they receive half of them at the end of their last
term.

**Computation:

The recomputation of the award disclosed that it is equivalent to the total compensation
received by each awardee for nine years that includes basic salary, additional
compensation, Personnel Economic Relief Allowance, representation and transportation
allowance, rice allowance, financial assistance, clothing allowance, 13th month pay and
cash gift. This is not disputed by petitioners.

2. Under the 1987 Constitution, however, the COA is vested with the authority to determine whether
government entities, including LGUs, comply with laws and regulations in disbursing government funds,
and to disallow illegal or irregular disbursements of these funds.

Sec. 2 par 2 of Article IX-D of the Constitution:

The Commission shall have exclusive authority, subject to the limitations in this
Article, to define the scope of its audit and examination, establish the techniques
and methods required therefor, and promulgate accounting and auditing rules and
regulations, including those for the prevention and disallowance of irregular,
unnecessary, excessive, extravagant, or unconscionable expenditures, or uses of
government funds and properties.

Thus, LGUs, though granted local fiscal autonomy, are still within the audit jurisdiction of the COA.

3. The Court find no grave abuse of discretion on the part of the COA in issuing the assailed decisions. It
is the general policy of the Court to sustain the decisions of administrative authorities, especially one
which is constitutionally-created not only on the basis of the doctrine of separation of powers but also
for their presumed expertise in the laws they are entrusted to enforce.
 33

THIRD DIVISION
3. Terminal Pay 352,075.48 58,398.18 22,633.25

G.R. No. 154952 July 16, 2012 4. Last Month

Gross Salary 17,410.00 15,815.00 13,555.50
HILARION F. DIMAGIBA, IRMA MENDOZA, and ELLEN RASCO, Petitioners,
5. Service Award 10,000.00 10,000.00 10,000.00
vs.
JULITA ESPARTERO, MA. BERNARDITA L. CARREON and MELINA SAN PEDRO, Respondents.
TOTAL ₱1,153,665.48 ₱1,031,385.00 ₱678,169.91
DECISION

PERALTA, J.:
Assailed in this petition for review on certiorari are the Decision1 dated May 30, 2002 and the
Resolution2 dated August 28, 2002 of the Court of Appeals issued in CA-G.R. SP No. 61261.
Petitioners Hilarion Dimagiba (Dimagiba), Irma Mendoza (Mendoza), and Ellen Rasco (Rasco) were
employees of The Livelihood Corporation (LIVECOR), a government-owned and controlled corporation
created under Executive Order No. 866. Petitioner Dimagiba was the Group Manager, Asset
Development and Management Group; petitioner Mendoza was the
The HSDC resolved to terminate petitioners' services because the latter's separation from LIVECOR
would no longer allow them to perform their functions at the HSDC. However, the HSDC, through its OIC,
Jose Rufino, wrote the Office of the Government Corporate Counsel (OGCC) and sought its opinion on
the legality of HSDC's granting gratuity pay to petitioners.
On April 8, 1998, the OGCC rendered Opinion No. 078,8 series of 1998, which resolved among others the
grant of gratuity pay to petitioners. The OGCC found that it is within the power of the Board to grant
reasonable Gratuity Pay/Package to petitioners subject to the usual rules of the
Commission on Audit (COA) pertaining to allowances/benefits and disbursements of funds.

Division Chief III, Asset Development and Management Group; and petitioner Rasco was the Project
On May 19, 1998, the HSDC Board passed Resolution No. 05-19-A9 terminating petitioners' services but
Evaluation Officer IV, Asset Development and Management Group.
resolved to grant petitioners their Gratuity Package/Pay, as follows:

On March 8, 1990, LIVECOR and the Human Settlement Development Corporation (HSDC), now known as
Strategic Investment and Development Corporation (SIDCOR), also a government-owned and controlled
corporation, created under Presidential Decree (P.D.) 1396, entered into a Trust Agreement3 whereby
the former would undertake the task of managing, administering, disposing and liquidating the
corporate assets, projects and accounts of HSDC. In HSDC Board Resolution No. 3-26-A4 dated March 26,
1990, it was provided that in order to carry out the trust agreement, LIVECOR personnel must be
designated concurrently to operate certain basic HSDC/SIDCOR functions, thus, LIVECOR personnel,
namely, petitioners Dimagiba and Mendoza were designated as Assistant General Manager for
Operations and Head, Inter-Agency Committee on Assets Disposal and as Treasurer and Controller,
respectively. The same resolution provided for the designees' monthly honoraria and commutable
reimbursable representation allowances (CRRA). Petitioner Rasco was designated as Technical Assistant
to the Officer-in-Charge (OIC), also with CRRA, under HSDC Board Resolution No. 05-19-B5 dated May 19,
1993.
1. MR. HILARION DIMAGIBA is hereby granted a Gratuity Package as follows:
1.1 Gratuity Pay in the amount of SEVEN HUNDRED THOUSAND PESOS
(P700,000.00);
1.2 Termination of LBP Lease Agreement No. 282-C/Lease Schedule I (Nissan
Sentra UDC 919) effective 15 July 1998 in favor of Mr. Dimagiba, with Mr.
Dimagiba paying LBP Leasing Corporation all charges, fees penalties, etc., including
pre-termination charges;
2. MS. IRMA MENDOZA is hereby granted a Gratuity Pay in the amount of ONE HUNDRED
EIGHTY THOUSAND (P180,000.00) PESOS;

In a letter6 dated November 14, 1997, the Department of Budget and Management informed LIVECOR of
the approval of its organization/staffing pattern modifications which resulted in the abolition of 3. MS. ELLEN RASCO is hereby granted a Gratuity Pay in the amount of SIXTY THOUSAND
petitioners' positions. As a result, petitioners were separated from the service effective June 30, 1998 PESOS (P60,000.00).
and were each given a separation package7 as follows:
RESOLVED FURTHER, That the total budgetary requirement and disbursement of the above Gratuity Pay
is hereby approved and allocated from Corporate Funds;
Dimagiba Mendoza Rasco

1. Separation Pay ₱608,580.00 ₱815,021.91 ₱519,125.16 RESOLVED FINALLY, That the Officer-in-Charge and the Trustee of corporate funds are hereby directed
and authorized to disburse funds and execute the necessary documentation, acts and deeds relative to
2. Gratuity Pay 165,600.00 132,150.00 112,555.00 the immediate and full implementation of this resolution.10

In a Memorandum dated July 17, 1998 issued by LIVECOR Administrator Manuel Portes (Portes), it was
stated that any payment of gratuities by the HSDC/SIDCOR to LIVECOR officers concurrently performing
HSDC functions shall not be processed without prior clearance from him as the same shall be first cleared
with the COA and OGCC to avoid any legal problem. Portes then sought the opinion of LIVECOR’s
Resident COA Auditor, Alejandro Fumar, regarding petitioners' claim for additional gratuity, who opined
that such gratuity payment would amount to double compensation.
Subsequently, petitioners wrote a letter11 dated July 29, 1998 addressed to Portes requesting for the
processing of their HSDC gratuity pay. Attached in their letter were OGCC Opinion No. 078 and a
letter12 from the Presidential Management Staff (PMS), dated June 29, 1998, concurring with the OGCC's
opinion.
Portes then instructed respondent Atty. Ma. Bernardita L. Carreon (Carreon), Attorney IV of LIVECOR’s
Legal Services Department and a designated member of Special Task Force for HSDC, to draft a letter
seeking clarification on OGCC Opinion No. 078. He likewise requested the LIVECOR Legal Services
Department to issue an opinion on the matter of petitioners' HSDC/SIDCOR gratuity pay.
In a Memorandum13 dated August 25, 1998 addressed to Portes, respondent Atty. Julita A. Espartero
(Espartero), then LIVECOR'S Chief Legal Counsel, wrote that petitioners' designation as HSDC officers
would not entitle them to receive any gratuity pay because:
First, the purpose for which Mr. Dimagiba, Ms. Mendoza and Ms. Rasco were elected or designated as
SIDCOR officers is already made clear in the subject Resolution which provides as follows, viz: WHEREAS,
in order to carry out the trust, LIVECOR personnel must be designated/elected concurrently to operate
certain basic SIDCOR corporate offices/positions.
The election or designation of Mr. Dimagiba, Ms. Mendoza and Ms. Rasco as SIDCOR officers were not
intended to be independent of or separate from their employment with LIVECOR but was made precisely
because of their being LIVECOR personnel tasked to carry out the Trust Agreement between SIDCOR and
LIVECOR.
Second, Mr. Dimagiba, Ms. Mendoza and Ms. Rasco do not receive salaries or wages from SIDCOR but
CRREs. This clearly shows that they are not organic SIDCOR employees but, as heretofore indicated,
LIVECOR officers merely holding concurrent positions in SIDCOR.
The reason for the above-mentioned arrangement (grant of CRREs and not salaries or wages) is that:
"While dual appointments in two government- owned corporations are permissible, dual compensation
is not."
To allow Mr. Dimagiba, Ms. Mendoza and Ms. Rasco, therefore, to receive gratuity pay/package apart
from what they are entitled to receive or have already received from LIVECOR will be to subvert or
indirectly circumvent the above-stated legal principle.
Third, not being organic SIDCOR employees but LIVECOR officers merely holding concurrent positions in
SIDCOR, Mr. Dimagiba, Ms. Mendoza and Ms. Rasco cannot be said to have been "separated" from
SIDCOR.14
34
In the meantime, petitioners had requested respondent Melina San Pedro (San Pedro), LIVECOR's
Financial Analyst, to sign and process the disbursement vouchers for the payment of their gratuity pay
but the latter refused to do so because of the adverse opinion of the LIVECOR Legal Department and
based on the memorandum issued by Portes.
In October 1998, Portes was replaced by Atty. Salvador C. Medialdea (Atty. Medialdea) to whom
petitioners subsequently referred the matter of their gratuity payment. In a letter15 dated June 14, 1999,
Atty. Medialdea sought clarification from the OGCC regarding its Opinion No. 078. The OGCC responded
with the issuance of its Opinion No. 019,16 s. 2000 on January 31, 2000, where it declared that HSDC
Resolution No. 05-19-A, granting gratuities in favor of petitioners, could not be implemented as the
intended beneficiaries were prohibited by law from receiving the same, citing Section 8 of Article IX-B of
the Constitution, i.e., proscription on double compensation.
On October 27, 1998, petitioners filed with the Office of the Ombudsman a Complaint-Affidavit charging
Administrator Portes, Atty. Christine Tomas-Espinosa, Chief of Staff of the Office of the Administrator,
respondents Espartero, Carreon, and San Pedro, with grave misconduct, conduct prejudicial to the best
interest of the service, inefficiency and incompetence in the performance of official functions, and
violation of Section 5 (a), Republic Act (RA) No. 6713.
In their complaint-affidavit, petitioners alleged that respondents conspired in refusing to release their
gratuity pay and that such refusal for an unreasonable length of time despite repeated demands
constituted the offenses charged.
Respondents filed their respective Counter-Affidavits denying the charges against them. Respondent
Espartero contended that her actions relative to the processing of gratuity pay merely consisted of
rendering an opinion that such gratuity would amount to double compensation, while respondent
Carreon alleged that her only participation with regard to petitioners' claims for additional gratuity was
to draft a letter addressed to the OGCC. On the other hand, respondent San Pedro claimed that her
refusal to affix her signature on petitioners' disbursement vouchers for the release of said gratuity pay
was based on the memorandum of Administrator Portes preventing LIVECOR officers and employees
from acting on any claims for gratuity without the latter's prior approval.
On June 2, 2000, the Ombudsman rendered its Decision,17 the dispositive portion of which reads:
WHEREFORE, foregoing premises considered, respondents JULITA ESPARTERO, BERNARDITA CARREON
and MELINA SAN PEDRO are hereby found guilty of Gross Neglect of Duty, Oppression, Conduct
Prejudicial to the Best Interest of Service, Inefficiency and Incompetence, and Violation of Section 5 (a),
Republic Act No. 6713, and are hereby meted out the penalty of DISMISSAL from the service coupled
with the accessory penalties of cancellation of their eligibilities, forfeiture of leave credits and retirement
benefits as well as disqualification of reemployment in the government service pursuant to Sections 9,
17 and 22, Rule XIV of the Omnibus Rules Implementing Book V of Executive Order No. 292.
On the contrary, the instant complaint against respondents MANUEL PORTES and CHRISTINE TOMAS-
ESPINOSA is DISMISSED for being moot and academic, they being already out of the government service
without prejudice to any civil or criminal actions filed against them.
Furthermore, pursuant to Section 15 (2), Republic Act No. 6770, the incumbent Administrator of the
Livelihood Corporation and other public officers concerned are hereby directed to facilitate the

processing and payment of complainants’ gratuity in accordance with HSDC Board Resolution No. 05-19-
A, s. 1998.
The Honorable Administrator, Livelihood Corporation (LIVECOR), 7/F Hanston Building, Emerald Avenue,
Pasig City, is hereby tasked to implement this Decision in accordance with law informing this Office of
the action taken thereon within ten (10) days upon receipt hereof.
Let copies of this Decision be furnished the Civil Service Commission for their guidance and reference.
SO ORDERED.18
In so ruling, the Ombudsman stated that the prohibition on double compensation would not apply to
pensions or gratuities because they are gifts or bounty given in recognition of the employees' past
services. It found that the HSDC Board had the discretion and authority to decide on matters which were
within its competence and jurisdiction, such as granting of benefits and retirement gratuities to its
officers and employees. It concluded that payment of petitioners' gratuities did not involve judgment or
discretion on LIVECOR's part, hence, a ministerial act; and that Resolution No. 05-19-A which granted the
gratuity pay to petitioners directed LIVECOR as HSDC's trustee to disburse funds and execute the
necessary documentation for the full implementation of the same.
Respondents filed their motions for reconsideration, which the Ombudsman disposed in an
Order19 dated August 8, 2000 in this wise:
WHEREFORE, except as to the finding of guilt on respondent ESPARTERO’s alleged violation of Section 5
(a), Republic Act No. 6713, the assailed June 23, 2000 DECISION is affirmed with finality.20
SO ORDERED.
On September 7, 2000, the Ombudsman issued an Order21 directing the implementation of its decision;
thus, LIVECOR's Final Notice of Dismissal from Service were subsequently served on respondents.
Petitioners' gratuity pay were then released.
Respondents filed with the CA a petition for review under Rule 43 with application for a writ of
preliminary mandatory injunction and/or temporary restraining order (TRO) and/or writ of preliminary
prohibitory injunction. The CA issued a TRO22 and later granted the writ of preliminary injunction.23
On May 30, 2002, the CA rendered its assailed Decision, the dispositive portion of which reads:
WHEREFORE, the petition is hereby GRANTED and the assailed decision of the Office of the Ombudsman,
dated June 2, 2000, and the Order dated August 8, 2000, are REVERSED and SET ASIDE and judgment is
hereby rendered:
1. Reinstating petitioners to their positions held prior to their dismissal from office with full
backwages and benefits;
2. Ordering private respondents to return the gratuity packages received from HSDC; and
35
3. Granting a permanent and final injunction enjoining the Office of the Ombudsman from
executing the assailed decision and Order.24
The CA found that the gratuity packages received by petitioners from HSDC constituted the prohibited
additional or double compensation under the Constitution. It found no evidence to support the
Ombudsman decision finding respondents guilty of the administrative charges as they acted accordingly
as public officers. Anent the issue of the timeliness of the filing of the petition, the CA ruled that
petitioners filed their appeal within the 15-day period prescribed under Section 4 of Rule 43 of the Rules
of Court, relying on the case of Fabian v. Desierto.25 However, since there was no clear pronouncement
that appeals of Ombudsman decision in administrative cases cannot be made under Section 4 of Rule 43,
the dismissal of the petition on the ground that it was filed beyond the 10-day period provided under
Section 27 of RA 6770, or the Ombudsman Act of 1989, would result to glaring injustice to respondents;
and that dismissal of appeals purely on technical grounds is frowned upon especially if it will result to
injustice.
Petitioners' motion for reconsideration was denied by the CA in a Resolution dated August 28, 2002.
Hence, this petition for review. Petitioners raise the following issues:
WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED WHEN IT GAVE DUE COURSE TO
RESPONDENTS' PETITION FOR REVIEW DESPITE BEING FILED BEYOND THE REGLEMENTARY PERIOD OF
TEN (10) DAYS SET BY SECTION 27 OF REPUBLIC ACT 6770.
WHETHER OR NOT THE COURT OF APPEALS ERRED WHEN IT RULED THAT THE GRATUITIES GRANTED TO
PETITIONERS DIMAGIBA, MENDOZA AND RASCO BY HSDC CONSTITUTE DOUBLE COMPENSATION
PROHIBITED UNDER ARTICLE IX (B), SECTION 8 OF THE 1987 CONSTITUTION DESPITE THE FACT THAT
SAID GRATUITIES CLEARLY FALL UNDER THE EXCEPTION UNDER THE SAME PROVISION.26
Anent the first issue, petitioners contend that the CA erred in acting on the petition which was filed
beyond the 10-day reglementary period for filing the same as provided under Section 27 of RA 6770.
They claim that respondents received the Ombudsman order denying their motion for reconsideration
on August 25, 2000 and filed a motion for extension of time with the CA on September 11, 2000, which
was the 15th day from receipt of the order, relying on our ruling in Fabian v. Desierto27 and Rule 43 of
the Rules of Court. Petitioners cite the cases of Lapid v. CA28 and Barata v. Abalos, Jr.29 to support the
application of the 10-day period for filing the petition in the CA from receipt of the Ombudsman order.
We are not persuaded.
Section 27 of RA 6770 provides as follows:
Section 27. Effectivity and Finality of Decisions. - All provisionary orders of the Office of the Ombudsman
are immediately effective and executory.
Findings of fact by the Office of the Ombudsman when supported by substantial evidence are conclusive.
Any order, directive or decision imposing the penalty of public censure or reprimand, suspension of not
more than one month's salary shall be final and unappealable.

In all administrative disciplinary cases, orders, directives or decisions of the Office of the Ombudsman
may be appealed to the Supreme Court by filing a petition for certiorari within ten (10) days from receipt
of the written notice of the order, directive or decision or denial of the motion for reconsideration in
accordance with Rule 45 of the Rules of Court.
The then Rules of Procedure of the Office of the Ombudsman likewise contain a similar provision.
Section 7, Rule III of Administrative Order (A.O.) No. 0730 provides as follows:
Sec. 7. Finality and Execution of Decision - Where the respondent is absolved of the charge and in case of
conviction where the penalty imposed is public censure or reprimand, suspension of not more than one
month, or a fine equivalent to one month salary, the decision shall be final, executory and unappealable.
In all other cases, the decision shall become final after the expiration of ten (10) days from receipt
thereof by the respondent, unless a motion for reconsideration or petition for certiorari, shall have been
filed by him as prescribed in Section 27 of R.A. 6770.
In Fabian v. Desierto,31 we declared unconstitutional Section 27 of RA 6770 and Section 7, Rule III of A.O.
No. 7 and any other provision of law implementing the aforesaid Act and insofar as they provide for
appeals in administrative disciplinary cases from the Office of the Ombudsman to the Supreme Court.
We held that such provision was violative of Section 30, Article VI of the Constitution as it expanded our
appellate jurisdiction without our advice and concurrence; and that it was also inconsistent with Section
1, Rule 45 of the Rules of Court which provides that a petition for review on certiorari shall apply only to
a review of judgments or final orders of the Court of Appeals, the Sandiganbayan, the Court of Tax
Appeals, the Regional Trial Court, or other courts authorized by law. We then said:
As a consequence of our ratiocination that Section 27 of Republic Act No. 6770 should be struck down as
unconstitutional, and in line with the regulatory philosophy adopted in appeals from quasi-judicial
agencies in the 1997 Revised Rules of Civil Procedure, appeals from decisions of the Office of the
Ombudsman in administrative disciplinary cases should be taken to the Court of Appeals under the
provisions of Rule 43.32
Subsequently, in Lapid v. CA33 which involved the issue of whether or not the decision of the
Ombudsman finding then Governor Manuel Lapid administratively liable for misconduct and imposing on
him a penalty of one year suspension without pay is immediately executory. We then ruled:
x x x The only provision affected by the Fabian ruling is the designation of the Court of Appeals as the
proper forum and of Rule 43 of the Rules of Court as the proper mode of appeal. All other matters
included in said Section 27, including the finality or non-finality of decisions, are not affected and still
stand.34
Thus, we said that since the penalty imposed on Lapid which was one year suspension was not among
those enumerated under Section 27 as final and unappealable, an appeal timely filed by Lapid will stay
the immediate implementation of the decision of the Ombudsman appealed from.
Later came the case of Barata v. Abalos, Jr.35 which was decided in 2001. The issue brought to us then
was whether the CA committed grave abuse of discretion in ruling that the Ombudsman decision
exonerating respondent Mayor Abalos, Jr. of an administrative charge is not appealable, which we
answered in the negative. We also said that even on the assumption that appeal is allowed, the same
can no longer prosper, thus:
36
This notwithstanding, even on the assumption that appeal is allowed, the same can no longer prosper.
As correctly pointed out by private respondent, since the Order dated September 10, 1999 of the
Ombudsman denying the motion for reconsideration was received by petitioner on October 15, 1999,
petitioner had until October 25, 1999 to appeal in accordance with Section 27, R.A. 6770 or at the most,
until November 24, 1999, if he availed of the 30-day extension provided under Section 2, Rule 43 of the
1997 Rules on Civil Procedure. However, the petition was filed with the Court of Appeals only on
February 1, 2000, way beyond the reglementary period.36
Thus, it appeared that the period provided under Section 27 of RA 6770 which is ten days must be
observed in filing a petition with the CA assailing the Ombudsman decision in administrative case.
In this case, respondents filed with the CA their motion for extension of time to file petition for review
under Rule 43 on September 11, 2000, i.e., on the 15th day from receipt of the Ombudsman order
denying their motion for reconsideration, and filed the petition on September 19, 2000. At the time the
petition was filed, the matter of which reglementary period must apply, whether 10 days under Section
27 of RA 6770 or 15 days under Section 4, Rule 43 of the Rules of Court, had not been established with
definiteness until the Barata case was decided later. Considering that the Fabian ruling stated that Rule
43 of the Rules of Court should be the proper mode of appeal from an Ombudsman decision in
administrative cases, and Section 4 of Rule 43 provides for 15 days from receipt of the order appealed
from, the motion for extension to file petition which was filed on the 15th day from receipt of the
Ombudsman order is considered timely filed.
Moreover, as correctly stated by the CA, dismissal of appeals on purely technical ground is frowned upon
especially if it will result to unfairness as in this case. In Baylon v. Fact-Finding Intelligence Bureau,37 we
cited reasons or justifications to resist the strict adherence to procedure, to wit: (1) matters of life,
liberty, honor and property; (2) counsel's negligence without the participatory negligence on the part of
the client; (3) the existence of special or compelling circumstances; (4) the merits of the case; (5) a cause
not entirely attributable to the fault or negligence of the party favored by the suspension of the rules; (6)
a lack of any showing that the review sought is merely frivolous and dilatory; and (7) the other party will
not be unjustly prejudiced thereby.
Here, the Ombudsman found respondents guilty of the charges filed against them and imposed upon
them the penalty of dismissal from the service. The penalty of dismissal is a severe punishment, because
it blemishes a person's record in government service.38 It is an injury to one's reputation and honor which
produces irreversible effects on one's career and private life. Worse, it implies loss of livelihood to the
employee and his family.39 If only to assure the judicial mind that no injustice is allowed to take place due
to a blind adherence to rules of procedure, the dismissal on technicality of respondents' petition, which
is aimed at establishing not just their innocence but the truth, cannot stand.40
As to the second issue, petitioners contend that the gratuity given to them by the HSDC Board cannot be
considered as additional or double compensation which is prohibited by the Constitution.
We find no merit in this argument.
The additional grant of gratuity pay to petitioners amounted to additional compensation prohibited by
the Constitution.
As provided under Section 8 of Article IX-B of the 1987 Constitution:
 37

Section 8. No elective or appointive public officer or employee shall receive additional, double, or
indirect compensation, unless specifically authorized by law, nor accept without the consent of the
Congress, any present, emolument, office, or title of any kind from any foreign government.
Pensions or gratuities shall not be considered as additional, double, or indirect compensation.
carry out the trust agreement, LIVECOR personnel must be designated/elected concurrently to operate
certain basic SIDCOR corporate offices and positions."
Petitioners claim that the proscription against double compensation does not include pensions and
gratuity.1âwphi1

Clearly, the only exception for an employee to receive additional, double and indirect compensation is We are not persuaded. We quote with approval what the CA said, thus:
where the law allows him to receive extra compensation for services rendered in another position which
is an extension or is connected with his basic work. The prohibition against additional or double
The second paragraph of Section 8, Article IX specifically adds that "pensions and gratuities shall not be
compensation, except when specifically authorized by law, is considered a "constitutional curb" on the
considered as additional, double or indirect compensation." This has reference to compensation already
spending power of the government. In Peralta v. Mathay,41 we stated the purpose of the prohibition, to
earned, for instance by a retiree. A retiree receiving pensions or gratuities after retirement can continue
wit:
to receive such pension or gratuity even if he accepts another government position to which another
compensation is attached.
x x x This is to manifest a commitment to the fundamental principle that a public office is a public trust. It
is expected of a government official or employee that he keeps uppermost in mind the demands of
The grant to designees Dimagiba et al. of another gratuity from HSDC would not fall under the exception
public welfare. He is there to render public service. He is of course entitled to be rewarded for the
in the second paragraph as the same had not been primarily earned, but rather being granted for service
performance of the functions entrusted to him, but that should not be the overriding consideration. The
simultaneously rendered to LIVECOR and HSDC. Hence, to allow the release of the second gratuity from
intrusion of the thought of private gain should be unwelcome. The temptation to further personal ends,
HSDC would run afoul over the well-settled rule that "in the absence of an express legal exception,
public employment as a means for the acquisition of wealth, is to be resisted. That at least is the ideal.
pension or gratuity laws should be construed as to preclude any person from receiving double
There is then to be awareness on the part of an officer or employee of the government that he is to
compensation.44
receive only such compensation as may be fixed by law. With such a realization, he is expected not to
avail himself of devious or circuitous means to increase the remuneration attached to his position.42x x x
We thus find no reversible error committed by theCA in granting the petition filed by respondents and
reversing the Ombudsman decision finding them guilty of the administrative charges.
The gratuity pay being given to petitioners by the HSDC Board was by reason of the satisfactory
performance of their work under the trust agreement. It is considered a bonus and by its very nature, a
bonus partakes of an additional remuneration or compensation.43 It bears stressing that when WHEREFORE, the petition for review is DENIED. The Decision dated May 30, 2002 and the Resolution
petitioners were separated from LIVECOR, they were given separation pay which also included gratuity dated August 28, 2002 of the Court of Appeals are hereby AFFIRMED.
pay for all the years they worked thereat and concurrently in HSDC/SIDCOR. Granting them another
gratuity pay for the works done in HSDC under the trust agreement would be indirectly giving them SO ORDERED.
additional compensation for services rendered in another position which is an extension or is connected
with his basic work which is prohibited. This can only be allowed if there is a law which specifically
authorizes them to receive an additional payment of gratuity. The HSDC Board Resolution No. 05-19-A FACTS:
granting petitioners’ gratuity pay is not a law which would exempt them from the Constitutional
proscription against additional, double or indirect compensation. Petitioners Hilarion Dimagiba (Dimagiba), Irma Mendoza (Mendoza), and Ellen Rasco (Rasco) were
employees of The Livelihood Corporation (LIVECOR), a government-owned and controlled corporation
Neither does the HSDC law under P.D. 1396 contain a provision allowing the grant of such gratuity pay to created under Executive Order No. 866. Petitioner Dimagiba was the Group Manager, Petitioners
petitioners.1âwphi1 Section 9 of P.D. 1396 provides: HilarionDimagiba (Dimagiba), Irma Mendoza (Mendoza), and Ellen Rasco (Rasco) were employees of The
Livelihood Corporation (LIVECOR), a government-owned and controlled corporation created under
Section 9. Appointment, Control and Discipline of Personnel. – The Board, upon recommendation of the Executive Order No. 866. Petitioner Dimagiba was the Group Manager, LIVECOR and the Human
General Manager of the Corporation, shall appoint the officers, and employees of the Corporation and Settlement Development Corporation (HSDC), now known as Strategic Investment and Development
its subsidiaries; fix their compensation, allowances and benefits, their working hours and such other Corporation (SIDCOR), also a government-owned and controlled corporation, created under Presidential
conditions of employment as it may deem proper; grant them leaves of absence under such regulations Decree (P.D.) 1396, entered into a Trust Agreement3 whereby the former would undertake the task of
as it may promulgate; discipline and/or remove them for cause; and establish and maintain a managing, administering, disposing and liquidating the corporate assets, projects and accounts of HSDC.
recruitment and merit system for the Corporation and its affiliates and subsidiaries.
In HSDC Board Resolution No. 3- 26-A4 dated March 26, 1990, it was provided that in order to carry out
the trust agreement, LIVECOR personnel must be designated concurrently to operate certain basic
The above-quoted provision applies to the persons appointed as employees of the HSDC and does not HSDC/SIDCOR functions, thus, LIVECOR personnel, namely, petitioners Dimagiba and Mendoza were
extend to petitioners who were LIVECOR employees merely designated in HSDC under a trust
designated as Assistant General Manager for Operations and Head, Inter-Agency Committee on Assets
agreement. The fact that they were not HSDC employees was emphatically stated in Resolution No. 3-26-
A passed by the HSDC Board of Directors on March 26, 1990, where it was provided that "in order to
 38

Disposal and as Treasurer and Controller, respectively. The same resolution provided for the designees'
monthly honoraria and commutable reimbursable representation allowances (CRRA).
In a letter6 dated November 14, 1997, the Department of Budget and Management informed LIVECOR of
the approval of its organization/staffing pattern modifications which resulted in the abolition of
petitioners' positions. As a result, petitioners were separated from the service which entitled them to
separation pay which includes granting gratuity pay
In a Memorandum dated July 17, 1998 issued by LIVECOR Administrator Manuel Portes (Portes), it was
stated that any payment of gratuities by the HSDC/SIDCOR to LIVECOR officers concurrently performing
HSDC functions shall not be processed without prior clearance from him as the same shall be first cleared
with the COA and OGCC to avoid any legal problem. Portes then sought the opinion of LIVECOR’s
Resident COA Auditor, Alejandro Fumar, regarding petitioners' claim for additional gratuity, who opined
that such gratuity payment would amount to double compensation.
ISSUE: W/N the gratuities granted to petitioners dimagiba, mendoza and rasco by hsdc constitute double
compensation prohibited under article ix (b), section 8 of the 1987 constitution
authorizes them to receive an additional payment of gratuity. The HSDC Board Resolution No. 05-19-A
granting petitioners’ gratuity pay is not a law which would exempt them from the Constitutional
proscription against additional, double or indirect compensation. Neither does the HSDC law under P.D.
1396 contain a provision allowing the grant of such gratuity pay to petitioners.
The second paragraph of Section 8, Article IX specifically adds that "pensions and gratuities shall not be
considered as additional, double or indirect compensation." This has reference to compensation already
earned, for instance by a retiree. A retiree receiving pensions or gratuities after retirement can continue
to receive such pension or gratuity even if he accepts another government position to which another
compensation is attached. The grant to designees Dimagiba et al. of another gratuity from HSDC would
not fall under the exception in the second paragraph as the same had not been primarily earned, but
rather being granted for service simultaneously rendered to LIVECOR and HSDC. Hence, to allow the
release of the second gratuity from HSDC would run afoul over the wellsettled rule that "in the absence
of an express legal exception, pension or gratuity laws should be construed as to preclude any person
from receiving double compensation.

RULING:

YES The additional grant of gratuity pay to petitioners amounted to additional compensation prohibited
by the Constitution. Clearly, the only exception for an employee to receive additional, double and
indirect compensation is where the law allows him to receive extra compensation for services rendered
in another position which is an extension or is connected with his basic work. The prohibition against
additional or double compensation, except when specifically authorized by law, is considered a
“constitutional curb” on the spending power of the government.

In Peralta v. Mathay, 41 we stated the purpose of the prohibition, to wit: x xxThis is to manifest a
commitment to the fundamental principle that a public office is a public trust. It is expected of a
government official or employee that he keeps uppermost in mind the demands of public welfare. He is
there to render public service. He is of course entitled to be rewarded for the performance of the
functions entrusted to him, but that should not be the overriding consideration. The intrusion of the
thought of private gain should be unwelcome. The temptation to further personal ends, public
employment as a means for the acquisition of wealth, is to be resisted. That at least is the ideal. There is
then to be awareness on the part of an officer or employee of the government that he is to receive only
such compensation as may be fixed by law. With such a realization, he is expected not to avail himself of
devious or circuitous means to increase the remuneration attached to his position.42 x xx

The gratuity pay being given to petitioners by the HSDC Board was by reason of the satisfactory
performance of their work under the trust agreement. It is considered a bonus and by its very nature, a
bonus partakes of an additional remuneration or compensation.43 It bears stressing that when
petitioners were separated from LIVECOR, they were given separation pay which also included gratuity
pay for all the years they worked thereat and concurrently in HSDC/SIDCOR. Granting them another
gratuity pay for the works done in HSDC under the trust agreement would be indirectly giving them
additional compensation for services rendered in another position which is an extension or is connected
with his basic work which is prohibited. This can only be allowed if there is a law which specifically

EN BANC
G.R. No. 169752 September 25, 2007
PHILIPPINE SOCIETY FOR THE PREVENTION OF CRUELTY TO ANIMALS, Petitioners,
vs.
COMMISSION ON AUDIT, DIR. RODULFO J. ARIESGA (in his official capacity as Director of the
Commission on Audit), MS. MERLE M. VALENTIN and MS. SUSAN GUARDIAN (in their official capacities
as Team Leader and Team Member, respectively, of the audit Team of the Commission on
Audit), Respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
Before the Court is a special civil action for Certiorari and Prohibition under Rule 65 of the Rules of Court,
in relation to Section 2 of Rule 64, filed by the petitioner assailing Office Order No. 2005-0211 dated
September 14, 2005 issued by the respondents which constituted the audit team, as well as its
September 23, 2005 Letter2 informing the petitioner that respondents’ audit team shall conduct an audit
survey on the petitioner for a detailed audit of its accounts, operations, and financial transactions. No
temporary restraining order was issued.
The petitioner was incorporated as a juridical entity over one hundred years ago by virtue of Act No.
1285, enacted on January 19, 1905, by the Philippine Commission. The petitioner, at the time it was
created, was composed of animal aficionados and animal propagandists. The objects of the petitioner, as
stated in Section 2 of its charter, shall be to enforce laws relating to cruelty inflicted upon animals or the
protection of animals in the Philippine Islands, and generally, to do and perform all things which may
tend in any way to alleviate the suffering of animals and promote their welfare.3
At the time of the enactment of Act No. 1285, the original Corporation Law, Act No. 1459, was not yet in
existence. Act No. 1285 antedated both the Corporation Law and the constitution of the Securities and
Exchange Commission. Important to note is that the nature of the petitioner as a corporate entity is
distinguished from the sociedad anonimas under the Spanish Code of Commerce.
For the purpose of enhancing its powers in promoting animal welfare and enforcing laws for the
protection of animals, the petitioner was initially imbued under its charter with the power to apprehend
violators of animal welfare laws. In addition, the petitioner was to share one-half (1/2) of the fines
imposed and collected through its efforts for violations of the laws related thereto. As originally worded,
Sections 4 and 5 of Act No. 1285 provide:
SEC. 4. The said society is authorized to appoint not to exceed five agents in the City of Manila, and not
to exceed two in each of the provinces of the Philippine Islands who shall have all the power and
authority of a police officer to make arrests for violation of the laws enacted for the prevention of cruelty
to animals and the protection of animals, and to serve any process in connection with the execution of
such laws; and in addition thereto, all the police force of the Philippine Islands, wherever organized,
shall, as occasion requires, assist said society, its members or agents, in the enforcement of all such laws.
39
SEC. 5. One-half of all the fines imposed and collected through the efforts of said society, its members or
its agents, for violations of the laws enacted for the prevention of cruelty to animals and for their
protection, shall belong to said society and shall be used to promote its objects.
(emphasis supplied)
Subsequently, however, the power to make arrests as well as the privilege to retain a portion of the fines
collected for violation of animal-related laws were recalled by virtue of Commonwealth Act (C.A.) No.
148,4 which reads, in its entirety, thus:
Be it enacted by the National Assembly of the Philippines:
Section 1. Section four of Act Numbered Twelve hundred and eighty-five as amended by Act Numbered
Thirty five hundred and forty-eight, is hereby further amended so as to read as follows:
Sec. 4. The said society is authorized to appoint not to exceed ten agents in the City of Manila, and not to
exceed one in each municipality of the Philippines who shall have the authority to denounce to regular
peace officers any violation of the laws enacted for the prevention of cruelty to animals and the
protection of animals and to cooperate with said peace officers in the prosecution of transgressors of
such laws.
Sec. 2. The full amount of the fines collected for violation of the laws against cruelty to animals and for
the protection of animals, shall accrue to the general fund of the Municipality where the offense was
committed.
Sec. 3. This Act shall take effect upon its approval.
Approved, November 8, 1936. (Emphasis supplied)
Immediately thereafter, then President Manuel L. Quezon issued Executive Order (E.O.) No. 63 dated
November 12, 1936, portions of which provide:
Whereas, during the first regular session of the National Assembly, Commonwealth Act Numbered One
Hundred Forty Eight was enacted depriving the agents of the Society for the Prevention of Cruelty to
Animals of their power to arrest persons who have violated the laws prohibiting cruelty to
animals thereby correcting a serious defect in one of the laws existing in our statute books.
Whereas, the cruel treatment of animals is an offense against the State, penalized under our statutes,
which the Government is duty bound to enforce;
Now, therefore, I, Manuel L. Quezon, President of the Philippines, pursuant to the authority conferred
upon me by the Constitution, hereby decree, order, and direct the Commissioner of Public Safety, the
Provost Marshal General as head of the Constabulary Division of the Philippine Army, every Mayor of a
chartered city, and every municipal president to detail and organize special members of the police force,
local, national, and the Constabulary to watch, capture, and prosecute offenders against the laws
enacted to prevent cruelty to animals. (Emphasis supplied)

On December 1, 2003, an audit team from respondent Commission on Audit (COA) visited the office of
the petitioner to conduct an audit survey pursuant to COA Office Order No. 2003-051 dated November
18, 20035addressed to the petitioner. The petitioner demurred on the ground that it was a private entity
not under the jurisdiction of COA, citing Section 2(1) of Article IX of the Constitution which specifies the
general jurisdiction of the COA, viz:
Section 1. General Jurisdiction. The Commission on Audit shall have the power, authority, and duty to
examine, audit, and settle all accounts pertaining to the revenue and receipts of, and expenditures or
uses of funds and property, owned or held in trust by, or pertaining to the Government, or any of its
subdivisions, agencies, or instrumentalities, including government-owned and controlled corporations
with original charters, and on a post-audit basis: (a) constitutional bodies, commissions and officers that
have been granted fiscal autonomy under the Constitution; (b) autonomous state colleges and
universities; (c) other government-owned or controlled corporations and their subsidiaries; and (d) such
non-governmental entities receiving subsidy or equity, directly or indirectly, from or through the
government, which are required by law or the granting institution to submit to such audit as a condition
of subsidy or equity. However, where the internal control system of the audited agencies is inadequate,
the Commission may adopt such measures, including temporary or special pre-audit, as are necessary
and appropriate to correct the deficiencies. It shall keep the general accounts of the Government, and
for such period as may be provided by law, preserve the vouchers and other supporting papers
pertaining thereto. (Emphasis supplied)
Petitioner explained thus:
a. Although the petitioner was created by special legislation, this necessarily came about
because in January 1905 there was as yet neither a Corporation Law or any other general law
under which it may be organized and incorporated, nor a Securities and Exchange
Commission which would have passed upon its organization and incorporation.
b. That Executive Order No. 63, issued during the Commonwealth period, effectively deprived
the petitioner of its power to make arrests, and that the petitioner lost its operational
funding, underscore the fact that it exercises no governmental function. In fine, the
government itself, by its overt acts, confirmed petitioner’s status as a private juridical entity.
The COA General Counsel issued a Memorandum6 dated May 6, 2004, asserting that the petitioner was
subject to its audit authority. In a letter dated May 17, 2004,7 respondent COA informed the petitioner of
the result of the evaluation, furnishing it with a copy of said Memorandum dated May 6, 2004 of the
General Counsel.
Petitioner thereafter filed with the respondent COA a Request for Re-evaluation dated May 19,
2004,8 insisting that it was a private domestic corporation.
Acting on the said request, the General Counsel of respondent COA, in a Memorandum dated July 13,
2004,9affirmed her earlier opinion that the petitioner was a government entity that was subject to the
audit jurisdiction of respondent COA. In a letter dated September 14, 2004, the respondent COA
informed the petitioner of the result of the re-evaluation, maintaining its position that the petitioner was
subject to its audit jurisdiction, and requested an initial conference with the respondents.
40
In a Memorandum dated September 16, 2004, Director Delfin Aguilar reported to COA Assistant
Commissioner Juanito Espino, Corporate Government Sector, that the audit survey was not conducted
due to the refusal of the petitioner because the latter maintained that it was a private corporation.
Petitioner received on September 27, 2005 the subject COA Office Order 2005-021 dated September 14,
2005 and the COA Letter dated September 23, 2005.
Hence, herein Petition on the following grounds:
A.
RESPONDENT COMMISSION ON AUDIT COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT RULED THAT PETITIONER IS
SUBJECT TO ITS AUDIT AUTHORITY.
B.
PETITIONER IS ENTITLED TO THE RELIEF SOUGHT, THERE BEING NO APPEAL, NOR ANY PLAIN,
SPEEDY AND ADEQUATE REMEDY IN THE ORDINARY COURSE OF LAW AVAILABLE TO IT.10
The essential question before this Court is whether the petitioner qualifies as a government agency that
may be subject to audit by respondent COA.
Petitioner argues: first, even though it was created by special legislation in 1905 as there was no general
law then existing under which it may be organized or incorporated, it exercises no governmental
functions because these have been revoked by C.A. No. 148 and E.O. No. 63; second, nowhere in its
charter is it indicated that it is a public corporation, unlike, for instance, C.A. No. 111 which created the
Boy Scouts of the Philippines, defined its powers and purposes, and specifically stated that it was "An Act
to Create a Public Corporation" in which, even as amended by Presidential Decree No. 460, the law still
adverted to the Boy Scouts of the Philippines as a "public corporation," all of which are not obtaining in
the charter of the petitioner; third, if it were a government body, there would have been no need for the
State to grant it tax exemptions under Republic Act No. 1178, and the fact that it was so exempted
strengthens its position that it is a private institution; fourth, the employees of the petitioner are
registered and covered by the Social Security System at the latter’s initiative and not through the
Government Service Insurance System, which should have been the case had the employees been
considered government employees; fifth, the petitioner does not receive any form of financial assistance
from the government, since C.A. No. 148, amending Section 5 of Act No. 1285, states that the "full
amount of the fines, collected for violation of the laws against cruelty to animals and for the protection
of animals, shall accrue to the general fund of the Municipality where the offense was committed"; sixth,
C.A. No. 148 effectively deprived the petitioner of its powers to make arrests and serve processes as
these functions were placed in the hands of the police force; seventh, no government appointee or
representative sits on the board of trustees of the petitioner; eighth, a reading of the provisions of its
charter (Act No. 1285) fails to show that any act or decision of the petitioner is subject to the approval of
or control by any government agency, except to the extent that it is governed by the law on private
corporations in general; and finally, ninth, the Committee on Animal Welfare, under the Animal Welfare
Act of 1998, includes members from both the private and the public sectors.

The respondents contend that since the petitioner is a "body politic" created by virtue of a special
legislation and endowed with a governmental purpose, then, indubitably, the COA may audit the
financial activities of the latter. Respondents in effect divide their contentions into six strains: first, the
test to determine whether an entity is a government corporation lies in the manner of its creation, and,
since the petitioner was created by virtue of a special charter, it is thus a government corporation
subject to respondents’ auditing power; second, the petitioner exercises "sovereign powers," that is, it is
tasked to enforce the laws for the protection and welfare of animals which "ultimately redound to the
public good and welfare," and, therefore, it is deemed to be a government "instrumentality" as defined
under the Administrative Code of 1987, the purpose of which is connected with the administration of
government, as purportedly affirmed by American jurisprudence; third, by virtue of Section 23,11Title II,
Book III of the same Code, the Office of the President exercises supervision or control over the
petitioner; fourth, under the same Code, the requirement under its special charter for the petitioner to
render a report to the Civil Governor, whose functions have been inherited by the Office of the
President, clearly reflects the nature of the petitioner as a government instrumentality; fifth, despite the
passage of the Corporation Code, the law creating the petitioner had not been abolished, nor had it been
re-incorporated under any general corporation law; and finally, sixth, Republic Act No. 8485, otherwise
known as the "Animal Welfare Act of 1998," designates the petitioner as a member of its Committee on
Animal Welfare which is attached to the Department of Agriculture.
In view of the phrase "One-half of all the fines imposed and collected through the efforts of said society,"
the Court, in a Resolution dated January 30, 2007, required the Office of the Solicitor General (OSG) and
the parties to comment on: a) petitioner's authority to impose fines and the validity of the provisions of
Act No. 1285 and Commonwealth Act No. 148 considering that there are no standard measures provided
for in the aforecited laws as to the manner of implementation, the specific violations of the law, the
person/s authorized to impose fine and in what amount; and, b) the effect of the 1935 and 1987
Constitutions on whether petitioner continues to exist or should organize as a private corporation under
the Corporation Code, B.P. Blg. 68 as amended.
Petitioner and the OSG filed their respective Comments. Respondents filed a Manifestation stating that
since they were being represented by the OSG which filed its Comment, they opted to dispense with the
filing of a separate one and adopt for the purpose that of the OSG.
The petitioner avers that it does not have the authority to impose fines for violation of animal welfare
laws; it only enjoyed the privilege of sharing in the fines imposed and collected from its efforts in the
enforcement of animal welfare laws; such privilege, however, was subsequently abolished by C.A. No.
148; that it continues to exist as a private corporation since it was created by the Philippine Commission
before the effectivity of the Corporation law, Act No. 1459; and the 1935 and 1987 Constitutions.
The OSG submits that Act No. 1285 and its amendatory laws did not give petitioner the authority to
impose fines for violation of laws12 relating to the prevention of cruelty to animals and the protection of
animals; that even prior to the amendment of Act No. 1285, petitioner was only entitled to share in the
fines imposed; C.A. No. 148 abolished that privilege to share in the fines collected; that petitioner is a
public corporation and has continued to exist since Act No. 1285; petitioner was not repealed by the
1935 and 1987 Constitutions which contain transitory provisions maintaining all laws issued not
inconsistent therewith until amended, modified or repealed.
The petition is impressed with merit.
The arguments of the parties, interlaced as they are, can be disposed of in five points.
41
First, the Court agrees with the petitioner that the "charter test" cannot be applied.
Essentially, the "charter test" as it stands today provides:
[T]he test to determine whether a corporation is government owned or controlled, or private in nature is
simple. Is it created by its own charter for the exercise of a public function, or by incorporation under the
general corporation law? Those with special charters are government corporations subject to its
provisions, and its employees are under the jurisdiction of the Civil Service Commission, and are
compulsory members of the Government Service Insurance System. xxx (Emphasis supplied)13
The petitioner is correct in stating that the charter test is predicated, at best, on the legal regime
established by the 1935 Constitution, Section 7, Article XIII, which states:
Sec. 7. The National Assembly shall not, except by general law, provide for the formation, organization,
or regulation of private corporations, unless such corporations are owned or controlled by the
Government or any subdivision or instrumentality thereof.14
The foregoing proscription has been carried over to the 1973 and the 1987 Constitutions. Section 16 of
Article XII of the present Constitution provides:
Sec. 16. The Congress shall not, except by general law, provide for the formation, organization, or
regulation of private corporations. Government-owned or controlled corporations may be created or
established by special charters in the interest of the common good and subject to the test of economic
viability.
Section 16 is essentially a re-enactment of Section 7 of Article XVI of the 1935 Constitution and Section 4
of Article XIV of the 1973 Constitution.
During the formulation of the 1935 Constitution, the Committee on Franchises recommended the
foregoing proscription to prevent the pressure of special interests upon the lawmaking body in the
creation of corporations or in the regulation of the same. To permit the lawmaking body by special law
to provide for the organization, formation, or regulation of private corporations would be in effect to
offer to it the temptation in many cases to favor certain groups, to the prejudice of others or to the
prejudice of the interests of the country.15
And since the underpinnings of the charter test had been introduced by the 1935 Constitution and not
earlier, it follows that the test cannot apply to the petitioner, which was incorporated by virtue of Act
No. 1285, enacted on January 19, 1905. Settled is the rule that laws in general have no retroactive effect,
unless the contrary is provided.16 All statutes are to be construed as having only a prospective operation,
unless the purpose and intention of the legislature to give them a retrospective effect is expressly
declared or is necessarily implied from the language used. In case of doubt, the doubt must be resolved
against the retrospective effect.17
There are a few exceptions. Statutes can be given retroactive effect in the following cases: (1) when the
law itself so expressly provides; (2) in case of remedial statutes; (3) in case of curative statutes; (4) in
case of laws interpreting others; and (5) in case of laws creating new rights.18 None of the exceptions is
present in the instant case.
 42

The general principle of prospectivity of the law likewise applies to Act No. 1459, otherwise known as the
Corporation Law, which had been enacted by virtue of the plenary powers of the Philippine Commission
on March 1, 1906, a little over a year after January 19, 1905, the time the petitioner emerged as a
juridical entity. Even the Corporation Law respects the rights and powers of juridical entities organized
beforehand, viz:
SEC. 75. Any corporation or sociedad anonima formed, organized, and existing under the laws of the
Philippine Islands and lawfully transacting business in the Philippine Islands on the date of the passage of
this Act, shall be subject to the provisions hereof so far as such provisions may be applicable and shall be
entitled at its option either to continue business as such corporation or to reform and organize under and
by virtue of the provisions of this Act, transferring all corporate interests to the new corporation which, if
a stock corporation, is authorized to issue its shares of stock at par to the stockholders or members of
the old corporation according to their interests. (Emphasis supplied).
As pointed out by the OSG, both the 1935 and 1987 Constitutions contain transitory provisions
maintaining all laws issued not inconsistent therewith until amended, modified or repealed.19
In a legal regime where the charter test doctrine cannot be applied, the mere fact that a corporation has
been created by virtue of a special law does not necessarily qualify it as a public corporation.
What then is the nature of the petitioner as a corporate entity? What legal regime governs its rights,
powers, and duties?
As stated, at the time the petitioner was formed, the applicable law was the Philippine Bill of 1902, and,
emphatically, as also stated above, no proscription similar to the charter test can be found therein.
The textual foundation of the charter test, which placed a limitation on the power of the legislature, first
appeared in the 1935 Constitution. However, the petitioner was incorporated in 1905 by virtue of Act
No. 1258, a law antedating the Corporation Law (Act No. 1459) by a year, and the 1935 Constitution, by
thirty years. There being neither a general law on the formation and organization of private corporations
nor a restriction on the legislature to create private corporations by direct legislation, the Philippine
Commission at that moment in history was well within its powers in 1905 to constitute the petitioner as
a private juridical entity.1âwphi1
Time and again the Court must caution even the most brilliant scholars of the law and all constitutional
historians on the danger of imposing legal concepts of a later date on facts of an earlier date.20
Second, a reading of petitioner’s charter shows that it is not subject to control or supervision by any
agency of the State, unlike government-owned and -controlled corporations. No government
representative sits on the board of trustees of the petitioner. Like all private corporations, the successors
of its members are determined voluntarily and solely by the petitioner in accordance with its by-laws,
and may exercise those powers generally accorded to private corporations, such as the powers to hold
property, to sue and be sued, to use a common seal, and so forth. It may adopt by-laws for its internal
operations: the petitioner shall be managed or operated by its officers "in accordance with its by-laws in
force." The pertinent provisions of the charter provide:
Section 1. Anna L. Ide, Kate S. Wright, John L. Chamberlain, William F. Tucker, Mary S. Fergusson, Amasa
S. Crossfield, Spencer Cosby, Sealy B. Rossiter, Richard P. Strong, Jose Robles Lahesa, Josefina R. de
Luzuriaga, and such other persons as may be associated with them in conformity with this act, and their
successors, are hereby constituted and created a body politic and corporate at law, under the name and
style of "The Philippines Society for the Prevention of Cruelty to Animals."
As incorporated by this Act, said society shall have the power to add to its organization such and as many
members as it desires, to provide for and choose such officers as it may deem advisable, and in such
manner as it may wish, and to remove members as it shall provide.
It shall have the right to sue and be sued, to use a common seal, to receive legacies and donations, to
conduct social enterprises for the purpose of obtaining funds, to levy dues upon its members and
provide for their collection to hold real and personal estate such as may be necessary for the
accomplishment of the purposes of the society, and to adopt such by-laws for its government as may not
be inconsistent with law or this charter.
Sec. 3. The said society shall be operated under the direction of its officers, in accordance with its by-
laws in force, and this charter.
Sec. 6. The principal office of the society shall be kept in the city of Manila, and the society shall have full
power to locate and establish branch offices of the society wherever it may deem advisable in the
Philippine Islands, such branch offices to be under the supervision and control of the principal office.
Third. The employees of the petitioner are registered and covered by the Social Security System at the
latter’s initiative, and not through the Government Service Insurance System, which should be the case if
the employees are considered government employees. This is another indication of petitioner’s nature
as a private entity. Section 1 of Republic Act No. 1161, as amended by Republic Act No. 8282, otherwise
known as the Social Security Act of 1997, defines the employer:

The amendments introduced by C.A. No. 148 made it clear that the petitioner was a private corporation
Employer – Any person, natural or juridical, domestic or foreign, who carries on in the Philippines any
and not an agency of the government. This was evident in Executive Order No. 63, issued by then
trade, business, industry, undertaking or activity of any kind and uses the services of another person who
President of the Philippines Manuel L. Quezon, declaring that the revocation of the powers of the
is under his orders as regards the employment, except the Government and any of its political
petitioner to appoint agents with powers of arrest "corrected a serious defect" in one of the laws
subdivisions, branches or instrumentalities, including corporations owned or controlled by the
existing in the statute books.
Government: Provided, That a self-employed person shall be both employee and employer at the same
time. (Emphasis supplied)
As a curative statute, and based on the doctrines so far discussed, C.A. No. 148 has to be given
retroactive effect, thereby freeing all doubt as to which class of corporations the petitioner belongs, that
Fourth. The respondents contend that the petitioner is a "body politic" because its primary purpose is to
is, it is a quasi-public corporation, a kind of private domestic corporation, which the Court will further
secure the protection and welfare of animals which, in turn, redounds to the public good.
elaborate on under the fourth point.

This argument, is, at best, specious. The fact that a certain juridical entity is impressed with public
interest does not, by that circumstance alone, make the entity a public corporation, inasmuch as a
corporation may be private although its charter contains provisions of a public character, incorporated
solely for the public good. This class of corporations may be considered quasi-public corporations, which
are private corporations that render public service, supply public wants,21 or pursue other eleemosynary
objectives. While purposely organized for the gain or benefit of its members, they are required by law to
discharge functions for the public benefit. Examples of these corporations are utility,22 railroad,
warehouse, telegraph, telephone, water supply corporations and transportation companies.23 It must be
stressed that a quasi-public corporation is a species of private corporations, but the qualifying factor is
the type of service the former renders to the public: if it performs a public service, then it becomes a
quasi-public corporation.241âwphi1
Authorities are of the view that the purpose alone of the corporation cannot be taken as a safe guide, for
the fact is that almost all corporations are nowadays created to promote the interest, good, or
convenience of the public. A bank, for example, is a private corporation; yet, it is created for a public
benefit. Private schools and universities are likewise private corporations; and yet, they are rendering
public service. Private hospitals and wards are charged with heavy social responsibilities. More so with
all common carriers. On the other hand, there may exist a public corporation even if it is endowed with
gifts or donations from private individuals.
The true criterion, therefore, to determine whether a corporation is public or private is found in the
totality of the relation of the corporation to the State. If the corporation is created by the State as the
latter’s own agency or instrumentality to help it in carrying out its governmental functions, then that
corporation is considered public; otherwise, it is private. Applying the above test, provinces, chartered
cities, and barangays can best exemplify public corporations. They are created by the State as its own
device and agency for the accomplishment of parts of its own public works.25
It is clear that the amendments introduced by C.A. No. 148 revoked the powers of the petitioner to
arrest offenders of animal welfare laws and the power to serve processes in connection therewith.
Fifth. The respondents argue that since the charter of the petitioner requires the latter to render
periodic reports to the Civil Governor, whose functions have been inherited by the President, the
petitioner is, therefore, a government instrumentality.
This contention is inconclusive. By virtue of the fiction that all corporations owe their very existence and
powers to the State, the reportorial requirement is applicable to all corporations of whatever nature,
whether they are public, quasi-public, or private corporations—as creatures of the State, there is a
reserved right in the legislature to investigate the activities of a corporation to determine whether it
acted within its powers. In other words, the reportorial requirement is the principal means by which the
State may see to it that its creature acted according to the powers and functions conferred upon it.
These principles were extensively discussed in Bataan Shipyard & Engineering Co., Inc. v. Presidential
Commission on Good Government.26 Here, the Court, in holding that the subject corporation could not
invoke the right against self-incrimination whenever the State demanded the production of its corporate
books and papers, extensively discussed the purpose of reportorial requirements, viz:
x x x The corporation is a creature of the state. It is presumed to be incorporated for the benefit of the
public. It received certain special privileges and franchises, and holds them subject to the laws of the
state and the limitations of its charter. Its powers are limited by law. It can make no contract not
authorized by its charter. Its rights to act as a corporation are only preserved to it so long as it obeys the
43
laws of its creation. There is a reserve[d] right in the legislature to investigate its contracts and find out
whether it has exceeded its powers. It would be a strange anomaly to hold that a state, having chartered
a corporation to make use of certain franchises, could not, in the exercise of sovereignty, inquire how
these franchises had been employed, and whether they had been abused, and demand the production of
the corporate books and papers for that purpose. The defense amounts to this, that an officer of the
corporation which is charged with a criminal violation of the statute may plead the criminality of such
corporation as a refusal to produce its books. To state this proposition is to answer it. While an individual
may lawfully refuse to answer incriminating questions unless protected by an immunity statute, it does
not follow that a corporation vested with special privileges and franchises may refuse to show its hand
when charged with an abuse of such privileges. (Wilson v. United States, 55 Law Ed., 771, 780.)27
WHEREFORE, the petition is GRANTED. Petitioner is DECLARED a private domestic corporation subject to
the jurisdiction of the Securities and Exchange Commission. The respondents are ENJOINED from
investigating, examining and auditing the petitioner's fiscal and financial affairs.
SO ORDERED.
FACTS:
The petitioner was incorporated as a juridical entity over one hundred years ago by virtue of Act No.
1285, enacted on January 19, 1905, by the Philippine Commission. The petitioner, at the time it was
created, was composed of animal aficionados and animal propagandists. The objects of the petitioner,
as stated in Section 2 of its charter, shall be to enforce laws relating to cruelty inflicted upon animals or
the protection of animals in the Philippine Islands, and generally, to do and perform all things which may
tend in any way to alleviate the suffering of animals and promote their welfare.
At the time of the enactment of Act No. 1285, the original Corporation Law, Act No. 1459, was not yet in
existence. Act No. 1285 antedated both the Corporation Law and the constitution of the SEC.
For the purpose of enhancing its powers in promoting animal welfare and enforcing laws for the
protection of animals, the petitioner was initially imbued under its charter with the power to apprehend
violators of animal welfare laws. In addition, the petitioner was to share 1/2 of the fines imposed and
collected through its efforts for violations of the laws related thereto.
Subsequently, however, the power to make arrests as well as the privilege to retain a portion of the fines
collected for violation of animal-related laws were recalled by virtue of C.A. No. 148. Whereas, the cruel
treatment of animals is now an offense against the State, penalized under our statutes, which the
Government is duty bound to enforce;
When the COA was to perform an audit on them they refuse to do so, by the reason that they are a
private entity and not under the said commission. It argued that COA covers only government entities.
On the other hand the COA decided that it is a government entity.
ISSUE: WON the said petitioner is a private entity.
RULING:
YES. First, the Court agrees with the petitioner that the “charter test” cannot be applied. Essentially, the
“charter test” provides that the test to determine whether a corporation is government owned or
controlled, or private in nature is simple. Is it created by its own charter for the exercise of a public
function, or by incorporation under the general corporation law? Those with special charters are
 44

government corporations subject to its provisions, and its employees are under the jurisdiction of the acted within its powers. In other words, the reportorial requirement is the principal means by which the
CSC, and are compulsory members of the GSIS. State may see to it that its creature acted according to the powers and functions conferred upon it.
And since the “charter test” had been introduced by the 1935 Constitution and not earlier, it follows that
the test cannot apply to the petitioner, which was incorporated by virtue of Act No. 1285, enacted on
January 19, 1905. Settled is the rule that laws in general have no retroactive effect, unless the contrary
is provided. All statutes are to be construed as having only a prospective operation, unless the purpose
and intention of the legislature to give them a retrospective effect is expressly declared or is necessarily
implied from the language used. In case of doubt, the doubt must be resolved against the retrospective
effect.
Second, a reading of petitioner’s charter shows that it is not subject to control or supervision by any
agency of the State, unlike GOCCs. No government representative sits on the board of trustees of the
petitioner. Like all private corporations, the successors of its members are determined voluntarily and
solely by the petitioner in accordance with its by-laws, and may exercise those powers generally
accorded to private corporations, such as the powers to hold property, to sue and be sued, to use a
common seal, and so forth. It may adopt by-laws for its internal operations: the petitioner shall be
managed or operated by its officers “in accordance with its by-laws in force.”
Third. The employees of the petitioner are registered and covered by the SSS at the latter’s
initiative, and not through the GSIS, which should be the case if the employees are considered
government employees. This is another indication of petitioner’s nature as a private entity.
Fourth. The respondents contend that the petitioner is a “body politic” because its primary purpose
is to secure the protection and welfare of animals which, in turn, redounds to the public good. This
argument, is not tenable. The fact that a certain juridical entity is impressed with public interest does
not, by that circumstance alone, make the entity a public corporation, inasmuch as a corporation may be
private although its charter contains provisions of a public character, incorporated solely for the public
good. This class of corporations may be considered quasi-public corporations, which are private
corporations that render public service, supply public wants, or pursue other eleemosynary objectives.
While purposely organized for the gain or benefit of its members, they are required by law to discharge
functions for the public benefit. Examples of these corporations are utility, railroad, warehouse,
telegraph, telephone, water supply corporations and transportation companies. It must be stressed that
a quasi-public corporation is a species of private corporations, but the qualifying factor is the type of
service the former renders to the public: if it performs a public service, then it becomes a quasi-public
corporation.
Authorities are of the view that the purpose alone of the corporation cannot be taken as a safe guide, for
the fact is that almost all corporations are nowadays created to promote the interest, good, or
convenience of the public. A bank, for example, is a private corporation; yet, it is created for a public
benefit. Private schools and universities are likewise private corporations; and yet, they are rendering
public service. Private hospitals and wards are charged with heavy social responsibilities. More so with
all common carriers. On the other hand, there may exist a public corporation even if it is endowed with
gifts or donations from private individuals.
The true criterion, therefore, to determine whether a corporation is public or private is found in the
totality of the relation of the corporation to the State. If the corporation is created by the State as the
latter’s own agency or instrumentality to help it in carrying out its governmental functions, then that
corporation is considered public; otherwise, it is private. Applying the above test, provinces, chartered
cities, and barangays can best exemplify public corporations. They are created by the State as its own
device and agency for the accomplishment of parts of its own public works.
Fifth. The respondents argue that since the charter of the petitioner requires the latter to render
periodic reports to the Civil Governor, whose functions have been inherited by the President, the
petitioner is, therefore, a government instrumentality.
This contention is inconclusive. By virtue of the fiction that all corporations owe their very existence
and powers to the State, the reportorial requirement is applicable to all corporations of whatever
nature, whether they are public, quasi-public, or private corporations—as creatures of the State, there is
a reserved right in the legislature to investigate the activities of a corporation to determine whether it

THIRD DIVISION
January 18, 2016
G.R. No. 199440
MARY LOU GETURBOS TORRES, Petitioner,
vs.
CORAZON ALMA G. DE LEON, in her capacity as Secretary General of the Philippine National Red Cross
and THE BOARD OF GOVERNORS of the PHILIPPINE NATIONAL RED CROSS, National
Headquarters,Respondents.
DECISION
PERALTA, J.:
For this Court's consideration is the Petition for Review on Certiorari,1 under Rule 45 of the Rules of
Court, dated December 23, 2011 of petitioner Mary Lou Geturbos Torres seeking the reversal of the
Decision2 of the Court of Appeals (CA), dated June 30, 2011 that affirmed Resolution No. 080691 dated
April 2 l, 2008 and Resolution No. 081845 dated September 26, 2008, both of the Civil Service
Commission (CSC) that imposed upon her the penalty of dismissal from service as Chapter Administrator
of the Philippine National Red Cross (PNRC), General Santos City Chapter for grave misconduct.
The facts follow.
When petitioner was the Chapter Administrator of the PNRC, General Santos City Chapter, the PNRC
Internal Auditing Office conducted an audit of the funds and accounts of the PNRC, General Santos City
Chapter for the period November 6, 2002 to March 14, 2006, and based on the audit report submitted to
respondent Corazon Alma G. De Leon (De Leon), petitioner incurred a "technical shortage" in the amount
of P4,306,574.23.
Hence, respondent De Leon in a Memorandum dated January 3, 2007, formally charged petitioner with
Grave Misconduct for violating PNRC Financial Policies on Oversubscription, Remittances and
Disbursement of Funds.
After the completion of the investigation of the case against petitioner, respondent issued a
Memorandum dated June 12, 2007 imposing upon petitioner the penalties of one month suspension
effective July 1-31, 2007 and transfer to the National Headquarters effective August 1, 2007.
Petitioner filed a motion for reconsideration, but it was denied in a Memorandum dated June 28, 2007.
Thereafter, petitioner filed a Notice of Appeal addressed to the Board of Governors of the PNRC through
respondent and furnished a copy thereof to the CSC. Petitioner addressed her appeal memorandum to
the CSC and sent copies thereof to the PNRC and the CSC. Respondent, in a memorandum dated August
13, 2007, denied petitioner's appeal.
45
The CSC, on April 21, 2008, promulgated a Resolution dismissing petitioner's appeal and imposing upon
her the penalty of dismissal from service. Petitioner filed a motion for reconsideration with the CSC, but
the same was denied.
Thus, petitioner filed a petition for review under Rule 43 with the CA, and in its assailed Decision dated
June 30, 2011, the CA denied the said petition. Petitioner's motion for reconsideration was likewise
denied on October 6, 2011.
Hence, the present petition with the following grounds relied upon:
GROUNDS FOR THE PETITION
1
THE COURT A QUO ERRED IN NOT FINDING THAT THE CIVIL SERVICE COMMISSION (CSC) HAS NO
APPELLATE JURISDICTION OVER THE CASE;
2
THE COURT A QUO SERIOUSLY ERRED IN FAILING TO REALIZE THAT RESPONDENT DE LEON HAS NO
INTENTION TO DISMISS PETITIONER FROM THE SERVICE AND IT WAS SERIOUS ERROR ON THE PART OF
THE CSC TO MODIFY THE SAME OR TERMINATE PETITIONER FROM THE SERVICE WITHOUT ANY
AUTHORITY;
3
GRANTING ARGUENDO THAT THE CSC HAS CONSTITUTIONAL CONTROL OVER THE PNRC, THE COURT A
QUO ERRED IN NOT FINDING THAT THE CSC DID NOT ACQUIRE OR HAD LOST APPELLATE JURISDICTION
OVER THE CASE; [and]
4
THE COURT A QUO ERRED IN NOT FINDING THAT THE COMMENT (INITIATORY PLEADING) FILED BY THE
KAPUNAN LOTILLA FLORES GARCIA & CASTILLO LAW FIRM IN BEHALF OF THE RESPONDENTS, DATED
MARCH 31, 2009, IS NOT VERIFIED NOR ACCOMPANIED BY A CERTIFICATION AGAINST FORUM
SHOPPING.
According to petitioner, this Court has decided that PNRC is not a government-owned and controlled
corporation (GOCC), hence, the CSC has no jurisdiction or authority to review the appeal that she herself
filed. As such, she insists that the CSC committed grave abuse of discretion in modifying the decision of
respondent De Leon. She further argues that the PNRC did not give due course to her notice of appeal
since petitioner's counsel erroneously addressed and filed her notice of appeal to the office of
respondent PNRC NHQ BOGs through the office of respondent De Leon instead of filing it directly with
the CSC, and respondent De Leon denied due course to the notice of appeal, thus, according to
petitioner, there was no more appeal to speak of. Petitioner also claims that she voluntarily served the
sentence of one month suspension and transfer of assignment before her counsel erroneously filed the
notice of appeal, hence, when the notice of appeal was filed, the decision of respondent De Leon was
 46

already final. Finally, petitioner asserts that the CA erred in not finding that the comment filed by the law
firm in behalf of the respondents, dated March 31, 2009, violated the rules against forum shopping.
The petition lacks merit.
The auxiliary status of [a] Red Cross Society means that it is at one and the same time a private
institution and a public service organization because the very nature of its work implies cooperation with
the authorities, a link with the State. In carrying out their major functions, Red Cross Societies give their
humanitarian support to official bodies, in general having larger resources than the Societies, working
towards comparable ends in a given sector.

As ruled by this Court in Liban, et al. v. Gordon,3 the PNRC, although not a GOCC, is sui generis in
x x x No other organization has a duty to be its government's humanitarian partner while remaining
character, thus, requiring this Court to approach controversies involving the PNRC on a case-to-case
independent.
basis. As discussed:

It is in recognition of this sui generis character of the PNRC that R.A. No. 95 has remained valid and
A closer look at the nature of the PNRC would show that there is none like it not just in terms of
effective from the time of its enactment in March 22, 1947 under the 1935 Constitution and during the
structure, but also in terms of history, public service and official status accorded to it by the State and
effectivity of the 1973 Constitution and the 1987 Constitution.
the international community. There is merit in PNRC's contention that its structure is sui generis.

The PNRC Charter and its amendatory laws have not been questioned or challenged on constitutional
National Societies such as the PNRC act as auxiliaries to the public authorities of their own countries in
grounds, not even in this case before the Court now.
the humanitarian field and provide a range of services including disaster relief and health and social
programmes.
By requiring the PNRC to organize under the Corporation Code just like any other private corporation,
the Decision of July 15, 2009 lost sight of the PNRC's special status under international humanitarian law
The International Federation of Red Cross (IFRC) and Red Crescent Societies (RCS) Position Paper,
and as an auxiliary of the State, designated to assist it in discharging its obligations under the Geneva
submitted by the PNRC, is instructive with regard to the elements of the specific nature of the National
Conventions. Although the PNRC is called to be independent under its Fundamental Principles, it
Societies such as the PNRC, to wit:
interprets such independence as inclusive of its duty to be the government's humanitarian partner. To be
recognized in the International Committee, the PNRC must have an autonomous status, and carry out its
National Societies, such as the Philippine National Red Cross and its sister Red Cross and Red Crescent humanitarian mission in a neutral and impartial manner.
Societies, have certain specificities deriving from the 1949 Geneva Convention and the Statutes of the
International Red Cross and Red Crescent Movement (the Movement). They are also guided by the seven
However, in accordance with the Fundamental Principle of Voluntary Service of National Societies of the
Fundamental Principles of the Red Cross and Red Crescent Movement: Humanity, Impartiality,
Movement, the PNRC must be distinguished from private and profit-making entities. It is the main
Neutrality, Independence, Voluntary Service, Unity and Universality.
characteristic of National Societies that they "are not inspired by the desire for financial gain but by
individual commitment and devotion to a humanitarian purpose freely chosen or accepted as part of the
A National Society partakes of a sui generis character. It is a protected component of the Red Cross service that National Societies through its volunteers and/or members render to the Community."
movement under Articles 24 and 26 of the First Geneva Convention, especially in times of armed conflict.
These provisions require that the staff of a National Society shall be respected and protected in all
The PNRC, as a National Society of the International Red Cross and Red Crescent Movement, can neither
circumstances. Such protection is not ordinarily afforded by an international treaty to ordinary private
"be classified as an instrumentality of the State, so as not to lose its character of neutrality" as well as its
entities or even non-governmental organizations (NGOs). This sui generis character is also emphasized by
independence, nor strictly as a private corporation since it is regulated by international humanitarian law
the Fourth Geneva Convention which holds that an Occupying Power cannot require any change in the
and is treated as an auxiliary of the State.
personnel or structure of a National Society. National societies are therefore organizations that are
directly regulated by international humanitarian law, in contrast to other ordinary private entities,
including NGOs. Based on the above, the sui generis status of the PNRC is now sufficiently established. Although it is
neither a subdivision, agency, or instrumentality of the government, nor a government-owned or -
controlled corporation or a subsidiary thereof, as succinctly explained in the Decision of July 15, 2009, so
In addition, National Societies are not only officially recognized by their public authorities as voluntary
much so that respondent, under the Decision, was correctly allowed to hold his position as Chairman
aid societies, auxiliary to the public authorities in the humanitarian field, but also benefit from
thereof concurrently while he served as a Senator, such a conclusion does not ipso facto imply that the
recognition at the International level. This is considered to be an element distinguishing National
PNRC is a "private corporation" within the contemplation of the provision of the Constitution, that must
Societies from other organizations (mainly NGOs) and other forms of humanitarian response.
be organized under the Corporation Code. As correctly mentioned by Justice Roberto A. Abad, the sui
generis character of PNRC requires us to approach controversies involving the PNRC on a case-to-case
x x x No other organization belongs to a world-wide Movement in which all Societies have equal status basis.4
and share equal responsibilities and duties in helping each other. This is considered to be the essence of
the Fundamental Principle of Universality.
In this particular case, the CA did not err in ruling that the CSC has jurisdiction over the PNRC because
the issue at hand is the enforcement of labor laws and penal statutes, thus, in this particular matter, the
Furthermore, the National Societies are considered to be auxiliaries to the public authorities in the PNRC can be treated as a GOCC, and as such, it is within the ambit of Rule I, Section 1 of the
humanitarian field. x x x. Implementing Rules of Republic Act 67135, stating that:

Section 1. These Rules shall cover all officials and employees in the government, elective and appointive,
permanent or temporary, whether in the career or non-career service, including military and police
personnel, whether or not they receive compensation, regardless of amount.
Thus, having jurisdiction over the PNRC, the CSC had authority to modify the penalty and order the
dismissal of petitioner from the service. Under the Administrative Code of 1987,6 as well as decisions7 of
this Court, the CSC has appellate jurisdiction on administrative disciplinary cases involving the imposition
of a penalty of suspension for more than thirty (30) days, or fine in an amount exceeding thirty (30) days
salary. The CA, therefore, did not err when it agreed with the CSC that the latter had appellate
jurisdiction, thus:
The Court cites with approval the disquisition of the CSC in this regard:
The Commission is fully aware that under the Civil Service Law and rules and jurisprudence, it has
appellate jurisdiction only on administrative disciplinary cases involving the imposition of a penalty of
suspension for more than thirty (30) days, or fine in an amount exceeding thirty (30) days' salary.
In the instant case, although the decision appealed from states that Torres was imposed the penalty of
"one month" suspension from the service, it is unequivocally spelled out therein that the period of her
suspension is from July 1-31, 2007." This specifically written period unmistakably indicates that Torres
was actually imposed the penalty of thirty-one (31) days and not merely thirty (30) days or one (1)
month.1âwphi1
Petitioner submits that the actual duration of the period of her suspension was only thirty (30) days since
July 1, 2007 was a legal holiday, it being a Sunday. This submission, however, is flawed considering that
she was imposed the penalty of "One Month Suspension effective July 1-31, 2007" or for a period of
thirty-one (31) days.
Even granting that petitioner was imposed the penalty of suspension for thirty (30) days only, it should
be noted that she was also imposed another penalty of "Transfer to the NHQ effective August 01, 2007."
Hence, the CSC would still have appellate jurisdiction.8
Neither can it be considered that the CSC had lost its appellate jurisdiction because, as claimed by
petitioner, she voluntarily served the sentence of one month suspension and transfer of assignment
before her counsel filed the notice of appeal, hence, the decision of the PNRC was already final even
before a notice of appeal was filed with the CSC. The CA was correct in finding that petitioner's appeal
was properly and timely made with the CSC under the Uniform Rules on Administrative Cases in the Civil
Service (URACCS). It ruled:
As enunciated in the cases cited by petitioner, a decision becomes final even before the lapse of the
fifteen-day period to appeal when the defendant voluntarily submits to the execution of the sentence. In
the present case, however, it cannot be said that she voluntarily served her penalty in view of the fact
that she appealed therefrom. Moreover, the service of the penalty is pursuant to Section 47 of the
Uniform Rules on Administrative Cases in the Civil Service (URACCS) which reads:
Section 47. Effect of filing. - An appeal shall not stop the decision from being executory, and in case the
penalty is suspension or removal, the respondent shall be considered as having been under preventive
suspension during the pendency of the appeal, in the event he wins the appeal.
47
Petitioner's claim that the Notice of Appeal and the Appeal Memorandum were filed with the PNRC and
not with the CSC deserves scant consideration. Section 43 of the URACCS pertinently provides:
Section 43. Filing of Appeals. -
A notice of appeal including the appeal memorandum shall be filed with the appellate authority, copy
furnished the disciplining office. The latter shall submit the records of the case, which shall be
systematically and chronologically arranged, paged and securely bound to prevent loss, with its
comment, within fifteen (15) days, to the appellate authority.
An examination of the Notice of Appeal shows that the same was addressed to the PNRC and copy
furnished the CSC. On the other hand, an examination of the Appeal Memorandum shows that the same
was addressed to the CSC and copies thereof were sent to both the PNRC and the CSC. It is thus clear
that a copy of the Notice of Appeal was furnished the CSC and the Appeal Memorandum was filed with
it. While the rules required that the notice of appeal including the appeal memorandum shall be filed
with the CSC, it is undeniable that furnishing a copy of the Notice of Appeal with the CSC and filing with it
the Appeal Memorandum substantially complied with the rule. The important thing is that the Appeal
Memorandum was clearly addressed to the CSC.9
Anent the issue that respondents' Comment filed before the CA lacks verification and a certificate of
non-forum shopping, such is inconsequential because a comment is not an initiatory pleading but a
responsive pleading. [T]he required certification against forum shopping is intended to cover an
"initiatory pleading," meaning an "incipient application of a party asserting a claim for relief."10 A
comment, required by an appellate tribunal, to a petition filed with it is not a pleading but merely an
expression of the views and observations of the respondent for the purpose of giving the court sufficient
information as to whether the petition is legally proper as a remedy to the acts complained of.11
Based on the above disquisitions, all other issues presented by petitioner are rendered immaterial.
WHEREFORE, the Petition for Review on Certiorari under Rule 45 of the Rules of Court dated December
23, 2011 of petitioner Mary Lou Geturbos Torres is DENIED for lack of merit. The Decision of the Court of
Appeals, dated June 30, 2011, is therefore AFFIRMED.
SO ORDERED.
Mary Lou Geturbos Torres v. Corazon Alma C. De Leon, G.R. No. 199440, January 18, 2016, Third
Division, Peralta.
Civil Service Commission’s Appellate Jurisdiction
Philippine National Red Cross (PNRC) Internal Auditing Office conducted an audit of the funds and
accounts of the PNRC General Santos City chapter. Based on the audit report, Torres incurred a technical
shortage in the amount of 4.3 Million. De Leon, as secretary general of PNRC, charged Torres with Grace
Misconduct. De Leon issued a memorandum imposing penalties of one-month suspension (July 1-31) and
transfer to national headquarters against Torres. The latter filed a notice of appeal addressed to the
Board of Governors of the PNRC and furnished copy to the CSC. The appeal memorandum was addressed
to the CSC and copies were sent to the PNRC. De Leon denied the appeal. However, the CSC promulgated
a resolution imposing a penalty of dismissal from service against Torres. The latter questioned the
jurisdiction of the CSC because the PNRC is not a government-owned and controlled corporation.
 48

Do the Civil Service Commission have appellate jurisdiction over the case?

Yes. The PNRC, although not a GOCC, is sui generis in character. The sui generis character of PNRC
requires the court to approach controversies involving the PNRC on a case-to-case basis. Since the issue
involves in the enforcement of labor laws and penal statutes, PNRC can be treated as a GOCC. Thus, the
CSC has jurisdiction. Having jurisdiction over the PNRC, the CSC had authority to modify the penalty and
order the dismissal of Torres from the service. Moreover, the CSC has appellate jurisdiction on
administrative disciplinary cases involving the imposition of a penalty of suspension for more than thirty
days or fine in an amount exceeding thirty days’ salary.

Did the CSC lose its appellate jurisdiction when Torres voluntarily served the one-month suspension?

The CSC did not lose its appellate jurisdiction. A decision becomes final even before the lapse of the
fifteen-day period to appeal when the defendant voluntarily submits to the execution of the sentence. In
the present case, however, it cannot be said that she voluntarily served her penalty in view of the fact
that she appealed therefrom. Moreover, an appeal shall not stop the decision from being executory, and
in case the penalty is suspension or removal, the respondent shall be considered as having been under
preventive suspension during the pendency of the appeal, in the event he wins the appeal.

Was the Notice of Appeal properly filed at the CSC?

Yes. An examination of the Notice of Appeal shows that the same was addressed to the PNRC and copy
furnished the CSC. On the other hand, an examination of the Appeal Memorandum shows that the same
was addressed to the CSC and copies thereof were sent to both the PNRC and the CSC. It is thus clear
that a copy of the Notice of Appeal was furnished the CSC and the Appeal Memorandum was filed with
it. While the rules required that the notice of appeal including the appeal memorandum shall be filed
with the CSC, it is undeniable that furnishing a copy of the Notice of Appeal with the CSC and filing with it
the Appeal Memorandum substantially complied with the rule. The important thing is that the Appeal
Memorandum was clearly addressed to the CSC.

En Banc
March 7, 2017
G.R. No. 197762
CAREER EXECUTIVE SERVICE BOARD represented by CHAIRPERSON BERNARDO P. ABESAMIS,
EXECUTIVE DIRECTOR MA. ANTHONETTE VELASCO-ALLONES, and DEPUTY EXECUTIVE DIRECTOR
ARTURO M. LACHICA, Petitioner
vs
CIVIL SERVICE COMMISSION represented by CHAIRMAN FRANCISCO T. DUQUE III AND PUBLIC
ATTORNEY'S OFFICE, CHIEF PUBLIC ATTORNEY PERSIDA V. RUEDA-ACOSTA, DEPUTY CHIEF PUBLIC
ATTORNEYS MACAPANGCAT A. MAMA, SYLVESTRE A. MOSING, REGIONAL PUBLIC ATTORNEYS
CYNTHIA M. VARGAS, FRISCO F. DOMALSIN, TOMAS B. PADILLA, RENATO T. CABRIDO, SALVADOR S.
HIPOLITO, ELPIDIO C. BACUYAG, DIOSDADO S. SAVELLANO, RAMON N. GOMEZ, MARIE G-REE R.
CALINAWAN, FLORENCIO M. DILOY, EDGARDO D. GONZALEZ, NUNILA P. GARCIA, FRANCIS A.
CALATRAVA, DATUMANONG A. DUMAMBA, EDGAR Q. BALANSAG, PUBLIC ATTORNEY IV MARVIN R.
OSIAS, PUBLIC ATTORNEY IV HOWARD B. AREZA, PUBLIC ATTORNEY IV IMELDA C. ALFORTE-
GANANCIAL, Respondents
DECISION
SERENO, CJ.:
The dispute in this case concerns the classification of certain positions in the Public Attorney's Office
(PAO).The Court is asked to determine, in particular, whether these positions are properly included in
the Career Executive Service (CES); and whether the occupants of these positions must obtain third-level
eligibility to qualify for permanent appointment. To resolve these questions, the Court must also
delineate the respective jurisdictions granted by law to the competing authorities involved in this case -
the Civil Service Commission (CSC) and the Career Executive Service Board (CESB).
FACTUAL ANTECEDENTS
In this Petition for Certiorari and Prohibition,1 the CESB2 seeks the reversal of the Decision3 and
Resolution4 of the CSC declaring that (a) it had the jurisdiction to resolve an appeal from a CESB
Resolution5 refusing to declassify certain positions in PAO; and (b) the PAO positions involved in the
appeal do not require third-level eligibility.
The facts leading to the controversy are not in dispute.
On 24 September 2010, the PAO received a copy of the CESB Report on the CES Occupancy of the
Department of Justice (DOJ).6 This document stated, among others, that out of 35 filled positions in the
PAO, 33 were occupied by persons without the required CES eligibility.
In response to the report, PAO Deputy Chief Public Attorney Silvestre A. Mosing (Deputy Chief Mosing)
sent a letter7 to CESB Executive Director Maria Anthonette V. Allones. He informed her that the positions
of Chief Public Attorney, Deputy Chief Public Attorneys, and Regional Public Attorneys (subject positions)
49
were already permanent in nature pursuant to Section 68 of Republic Act No. (R.A.) 9406, which
accorded security of tenure to the occupants thereof.
A second letter dated 9 November 20109 was sent to the CESB by Deputy Chief Mosing to reiterate its
earlier communication. The letter also contained supplementary arguments in support of the assertion
that the subject positions were permanent posts; hence, their occupants may only be removed for cause
provided by law. Based on the foregoing premises, the PAO requested the deletion of its office from the
Data on CES Occupancy for the Department of Justice (DOJ).
On 18 November 2010, the PAO received the reply sent to Deputy Chief Mosing by the CESB, through
Deputy Executive Director Arturo M. Lachica.10 The latter informed Deputy Chief Mosing that the CESB
would conduct a position classification study on the specified PAO positions to determine whether they
may still be considered CES positions in the DOJ.
The DOJ Legal Opinion
While the matter was pending, PAO Deputy Chief Mosing wrote a letter to then DOJ Secretary Leila M.
de Lima to inform her about the communications sent by the PAO to the CESB.11 He also reiterated the
PAO's opinion that the subject positions must be considered permanent in nature, and not subject to CES
requirements.12
In a letter13 sent to Chief Public Attorney Persida V. Rueda-Acosta on 3 January 2011, Chief State Counsel
Ricardo V. Paras III elucidated the legal opinion of the DOJ on the matter:
Based on the foregoing, your claim that the appointments of the top-level officials of the PAO are
permanent is without merit. For one, the positions of the Chief Public Attorney, Deputy Chief Public
Attorney and Regional Public Attorneys are part of the CES. xxx
Secondly, since the Chief Public Attorney, Deputy Chief Public Attorneys and Regional Public Attorneys
are occupying CES positions, it is required by law that they should be CES eligibles to become permanent
appointees to the said position. x x x.
This leads to the inevitable conclusion that the appointments of the Chief Public Attorney, Deputy Chief
Public Attorneys and Regional Public Attorneys are not permanent, despite your claims to the contrary,
considering that they do not possess the required CES eligibility for the said positions. As such, they
cannot invoke their right to security of tenure even if it was expressly guaranteed to them by the PAO
Law.
Considering that the appointments of the Chief Public Attorney, Deputy Chief Public Attorneys and
Regional Public Attorneys are temporary, they are required to subsequently take the CES examination. In
the absence of any evidence that would show compliance with the said condition, it is presumed that the
top-level officials of the PAO are non-CES eligibles; therefore they may be removed from office by the
appointing authority without violating their constitutional and statutory rights to security of tenure.14
The DOJ also noted that the permanent nature of an appointment does not automatically translate to an
exemption from CES coverage, as it is only the CESB that has the authority to exempt certain positions
from CES requirements.15 The DOJ further rejected the claim that the occupants of the subject positions
were exercising quasi-judicial functions. It explained that while the lawyers of the PAO regularly conduct

mediation, conciliation or arbitration of disputes, their functions do not entail the rendition of judgments
or decisions - an essential element of the exercise of quasi-judicial functions.16
The CSC Legal Opinion
It appears that while waiting for the CESB to respond to its letters, the PAO wrote to the CSC to request a
legal opinion on the same matter.17 The PAO thereafter informed the CESB of the former's decision to
seek the opinion and requested the latter to issue no further opinion or statement, oral or written,
relative to the qualifications of the PAO officials.18
On 7 January 2011, the CSC issued the requested legal opinion.19 Citing its mandate as an independent
constitutional commission and its authority under the Administrative Code to "render opinions and
rulings on all personnel and other civil service matters," the CSC declared that third-level eligibility is not
required for the subject positions in the PAO:
The law is explicit that the positions [of] Chief Public Attorney, Deputy Chief Public Attorney and Regional
Public Attorney in PAO shall have the same qualifications for appointment, among other things, as those
of the Chief State Prosecutor, Assistant Chief State Prosecutor and Regional State Prosecutor,
respectively. These, of course include, the eligibility requirement for these positions. x x x.
The Prosecution Service Act of 2010 explicitly provides that the Prosecutor General (the retitled position
of Chief State Prosecutor) has the same qualifications for appointment, among other things, as those of
the Presiding Justice of the Court of Appeals (CA). Further, the Senior Deputy State Prosecutor and the
Regional Prosecutor have the same qualifications as those of an associate justice of the CA. x x x.
No less than the Constitution provides that justices and judges in the judiciary are required, among other
things, practice of law as requirement for appointment thereto. Pointedly, the Presiding Justice and the
Associate Justice of the Court of Appeals (CA) have the same qualifications as those provided for in the
Constitution for Justices of the Supreme Court[,] which includes, among other requirements, practice of
law. This means that the Constitution and the Civil Service Law prescribe RA 1080 (BAR) as the
appropriate civil service eligibility therefor. Accordingly, any imposition of a third-level eligibility (e.g.
CESE, CSEE) is not proper, if not, illegal under the circumstances. In fact, even in the 1997 Qualification
Standards Manual of the Commission, all of these positions require RA 1080 BAR eligibility for purposes
of appointment.
Thus, it is the Commission's op1mon that for purposes of permanent appointment to the positions of
Chief Public Attorney, Deputy Chief Public Attorney and Regional Public Attorney, no thirdlevel eligibility
is required but only RA 1080 (BAR) civil service eligibility.20
CESB Resolution No. 918
On 12 January 2011, the CESB issued Resolution No. 91821 (CESB Resolution No, 918) denying the PAO's
request to declassify the subject positions. Citing the Position Classification Study22 submitted by its
secretariat, the CESB noted that the positions in question "require leadership and managerial
competence"23 and were thus part of the CES. Hence, the appointment of persons without third-level
eligibility for these posts cannot be considered permanent. The CESB explained:
50
WHEREAS, pursuant to its mandate to identify positions of equivalent rank as CES positions, the
Secretariat revisited its previous classification as part of the CES [ ofj the above positions of PAO and
conducted a position classification of the above positions and arrived at the following findings:
1. The positions of Chief Public Attorney, Deputy Chief Public Attorneys, Regional Public Attorneys and
Assistant Regional Public Attorneys who are all presidential appointees fall within the criteria set under
CESB Resolution No. 299, s. 2009, namely:
a. The position is a career position;
b. The position is above division chief level;
c. The duties and responsibilities of the position require the performance of executive or
managerial functions.
2. While Section 3 of Republic Act 9406 which provides that:
SEC. 3. A new Section 14-A, is hereby inserted in Chapter 5, Title III, Book IV of Executive Order No. 292,
otherwise known as the "Administrative Code of 1987", to read as follows:
"SEC. 14-A Powers and Functions. - The PAO shall independently discharge its mandate to render, free of
charge, legal representation, assistance, and counselling to indigent persons in criminal, civil, labor,
administrative and other quasi-judicial cases. In the exigency of the service, the PAO may be called upon
by proper government authorities to render such service to other persons, subject to existing laws, rules
and regulations."
The aforecited provision does not limit the mandate of PAO to perform only non-executive functions. All
that the aforecited provision states is that the PAO is mandated to render legal representation,
assistance and counseling to indigent persons in criminal, civil, labor, administrative and other quasi-
judicial cases, free of charge. Notably, the positions of Chief Public Attorney, Deputy Chief Public
Attorney, Regional Public Attorneys and Assistant Regional Public Attorneys evidently require leadership
and managerial competence.
WHEREAS, it is undisputed that the subject pos1t10ns are CES in nature and as such, the eligibility
requirement for appointment thereto is CES eligibility.
With regard to the question of its jurisdiction over the matter as against that of the CSC, the CESB stated:
WHEREAS, under Section 8, Chapter 2, Book V of EO 292, it is the Board which has the mandate over
Third-level positions in the Career Service and not the CSC. Section 8, Chapter 2, Book V of EO 292
provides:
Section 8. Classes of Positions in the Civil Service. - (l) Classes of positions in the career service,
appointment to which requires examinations shall be grouped into three major levels as follows:
(c) The third-level shall cover positions in the Career Executive Service.

(2) x x x Entrance to the third-level shall be prescribed by the Career Executive Service Board.
WHEREAS, in the case of De Jesus v. People, G.R. No. 61998, February 22, 1983, 120 SCRA 760, the
Supreme Court ruled that "where there are two acts, one of which is special and particular and the other
general which, if standing alone, would include the same matter and thus conflict with the special act,
the special must prevail since it evinces the legislative intent more clearly than that of a general statute
and must be taken as intended to constitute an exception to the general act."
WHEREAS, following the above-cited rule, it is clear that Section 8, Chapter 2, Book V of EO 292 is the
exception to [the] general act pertaining to the authority of the CSC;
WHEREAS, it is clear that the mandate of the Board is in accordance with existing laws and pertinent
jurisprudence on matters pertaining to the CES[.]24
Aggrieved by the CESB Resolution, the PAO filed a Verified Notice of Appeal25 and an Urgent Notice of
Appeal26with the CSC.
PROCEEDINGS BEFORE THE CSC
Before the CSC, the PAO assailed CESB Resolution No. 918 on the following grounds: (a) the resolution
was rendered contrary to R.A. 9406 in relation to R.A. 10071,27 the 1987 Constitution and the CSC letter-
opinion; and (b) the CESB usurped the legislative function of Congress when the former required
additional qualifications for appointment to certain PAO positions. The PAO likewise asserted that its
appeal had been brought to the CSC, because the latter had the power to review decisions and actions of
one of its attached agencies - the CESB.
In an Order28 dated 17 January 2011, the CSC directed the CESB to comment on the appeal.
Instead of submitting a comment, however, the CESB filed a Motion for Clarification29 to assail the
authority of the CSC to review its Decision. It asserted that the CSC had no jurisdiction to decide the
appeal given that (a) the appeal involved a controversy between two government entities regarding
questions of law;30 and (b) the CESB was an autonomous agency whose actions were appealable to the
Office of the President.31 In addition, the CESB emphasized the inability of the CSC to render an unbiased
ruling on the case, considering the latter's previous legal opinion on the appropriate eligibility for key
positions in the PA0.32
In a Decision33 dated 15 February 2011, the CSC granted the appeal and reversed CESB Resolution No.
918.
As a preliminary matter, the CSC ruled that it could assume jurisdiction over the appeal, which involved
the employment status and qualification standards of employees belonging to the civil service. It was
supposedly a matter falling within its broad and plenary authority under the Constitution and the
Administrative Code. The CSC also declared that the authority of the CESB over third-level employees
was limited to the imposition of entry requirements and "should not be interpreted as cutting off the
reach of the Commission over this particular class of positions."34 Moreover, the CESB was declared
subject to the revisory power of the CSC, given that an attached office is not entirely and totally
insulated from its mother agency.35 With respect to the provision in the Integrated Reorganization
51
Plan36 on appeals from the CESB to the Office of the President, the CSC construed this requirement as
pertaining only to disciplinary proceedings.37
On the merits, the CSC ruled in favor of the PAO officials. It declared that the CESB would be in violation
of R.A. 9406 if the latter would require an additional qualification - in this case, third-level eligibility - for
purposes of permanent appointments to certain PAO positions:
The foregoing elaboration shows the qualifications of the subject PAO positions under the existing laws.
It is gleaned that nowhere in these laws is there a reference to third-level eligibility and CESO rank as
qualification requirements for attaining tenurial security. All that the laws uniformly prescribe for the
positions in question is practice of law for certain period of time, which presupposes a bar license. This
being the case, the CESB cannot, in the guise of enforcing and administering the policies of the third-
level, validly impose qualifications in addition to what the laws prescribe. It cannot add another layer of
qualification requirement which is not otherwise specified in the statutes. As an administrative agency,
the CESB can only promulgate rules and regulations which must be consistent with and in harmony with
the provisions of the laws, and it cannot add or subtract thereto. Most evidently, therefore, in
promulgating the assailed resolution, which sets out additional qualifications for the subject positions in
the PAO, the CESB has overstepped the bounds of its authority. x x x.
In so saying, the Commission does not lose sight of the power of the CESB to identify other positions
equivalent to those enumerated in the Administrative Code of 1987 as being part of the third-level or
CES for as long as they come within the ambit of the appointing prerogative of the President. Yet, such
grant of authority is derived from a general law (the Administrative Code) and hence, it must be deemed
circumscribed or qualified by the special law governing the PAO. Reiteratively, the PAO Law, in
conjunction with other laws, merely fixes practice of law as the principal qualification requirement for
the positions of Acosta, et al.
WHEREFORE, foregoing premises considered, the instant appeal is hereby GRANTED. Accordingly, the
CESB Resolution No. 918 dated Jnaury 12, 2011 is REVERSED and SET ASIDE for not being in conformity
with law and jurisprudence. It is declared that the following key positions in the Public Attorney's Office
do not require third-level eligibility and CESO rank for purposes of tenurial security:
1. Chief Public Attorney;
2. Deputy Chief Public Attorneys;
3. Regional Public Attorneys; and
4. Assistant Regional Public Attorneys.38
The CESB sought reconsideration of the Decision, but its motion was denied.39
PROCEEDINGS BEFORE THIS COURT
On 9 August 2011, the CESB filed the instant Petition40 imputing grave abuse of discretion to respondent
CSC. It asserts that (a) the CSC has no jurisdiction to review the Resolution of the CESB, given the latter's
autonomy as an attached agency; (b) CESB Resolution No. 918 should have been appealed to the Office

of the President, and not to the CSC, in accordance with Article IV, Part III of the Integrated
Reorganization Plan. The subject PAO positions are supposedly part of the CES, based on criteria
established by the CESB.41 These criteria were set pursuant to the latter's power to identify positions
belonging to the third-level of the civil service and to prescribe the requirements for entry thereto. The
Petition further reiterates the alleged inability of the CSC to decide the case with impartiality.
42
In its Comment, the CSC contends that the Petition filed by the CESB before this Court should be
dismissed outright for being an improper remedy and for violating the hierarchy of courts. The CSC
further asserts its jurisdiction over the PAO's appeal from the CESB Resolution in this case. Citing its
mandate as the central personnel agency of the government based on the 1987 Constitution and the
Administrative Code, the CSC insists that it has broad authority to administer and enforce the
constitutional and statutory provisions on the merit system for all levels and ranks of the civil service.
This authority allegedly encompasses the power to review and revise the decisions and actions of offices
attached to it, such as the CESB. It also claims that the present dispute involves a personnel action that is
within its jurisdiction.
Respondents PAO and its officials have also filed their own Comment43 on the Petition. They assert that
(a) the Petition should be dismissed outright as it is tainted with serious procedural and jurisdictional
flaws; (b) the CSC properly exercised its jurisdiction when it resolved the appeal in this case; and (c) CESB
Resolution No. 918 contravened R.A. 9406 in relation to the 1987 Constitution, R.A. 10071 and the CSC
letteropinion dated 7 January 2011.
Because the instant case involves the contradictory views of two government offices, the Court likewise
required the Office of the Solicitor General (OSG) to comment on the matter as the lawyer of the
government tasked to uphold the best interest of the latter.
On 28 February 2012, the OSG filed the required Comment.44 On the issue of jurisdiction, it supports the
view of the CSC and the PAO. It cites the Constitution and the Administrative Code as the sources of the
authority of the CSC to review rulings of the CESB, particularly with regard to personnel matters such as
the reclassification of positions.
As to the merits of the case, the OSG asserts that the subject positions in the PAO should be declassified
from the CES. It points out that the primary function of these PAO officials -- the provision of legal
assistance to the indigent - is specialized in nature; in contrast, their managerial functions are merely
incidental to their role. The OSG further contends that the manifest intent of the law is to require PAO
officials to have the same qualifications as their counterpmis in the National Prosecution Service (NPS).
Consequently, the OSG argued that the decision of the CESB to declassify certain posts in the NPS should
have likewise resulted in the declassification of the corresponding positions in the PAO.
In its Reply to the Comment of the OSG,45 the CESB urges the Court to adhere to the alleged limitations
on the general authority of the CSC over all matters concerning the civil service. In particular, the CESB
asserts its specific and exclusive mandate to administer all matters pertaining to the third-level of the
career service. Included in these matters is the power to promulgate rules, standards and procedures for
the selection, classification, compensation and career development of its members. Moreover, the CESB
insists that it is an agency within the Executive Department under the Integrated Reorganization Plan;
hence, its decisions are appealable only to the Office of the President. Lastly, the CESB maintains that the
subject positions properly belong to the CES, considering that executive and managerial functions must
be exercised by the occupants thereof.
52
ISSUES
The following issues are presented for resolution:
(1) Whether a petition for certiorari and prohibition was the proper remedy to question the assailed CSC
Decision and Resolution
(2) Whether the CSC had the jurisdiction to resolve the appeal filed by the PAO and to reverse CESB
Resolution No. 918
(3) Whether the CSC acted in accordance with law when it reversed the CESB and declared that third-
level eligibility is not required for occupants of the subject PAO positions
OUR RULING
We DENY the Petition.
At the outset, we note that the CESB availed itself of an improper remedy to challenge the ruling of the
CSC. In any event, after a judicious consideration of the case, we find that the CSC acted within its
jurisdiction when it resolved the PAO's appeal and reversed CESB Resolution No. 918. The CSC also
correctly ruled that third-level eligibility is not required for the subject positions.
A petition for certiorari and prohibitinn is
not the appropriate remedy to challenge
the ruling of the CSC.
As a preliminary matter, this Court must address the objections of respondents to the remedy availed of
by the CESB to question the ruling of the CSC.
Respondents contend that the Petition for Certiorari and Prohibition filed by the CESB before this Court
was improper, because the remedy of appeal was available via a petition for review under Rule 43. On
the other hand, the CESB insists that a Rule 65 petition is proper, because it is disputing the authority
and jurisdiction of the CSC.
We find in favor of respondents.
It is settled that a resort to the extraordinary remedies of certiorari and prohibition is proper only in
cases where (a) a tribunal, a board or an officer exercising judicial or quasi-judicial functions has acted
without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of
jurisdiction; and (b) there is no appeal or any plain, speedy, and adequate remedy in the ordinary course
of law. Rule 65 of the Rules of Civil Procedure requires the concurrence of both these requisites:
Section l. Petition for certiorari. - When any tribunal, board or officer exercising judicial or quasi-judicial
functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion
amounting to lack or excess of jurisdiction, and there is no appeal, or any plain, speedy, and adequate
remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the
 53

proper court, alleging the facts with certainty and praying that judgment be rendered annulling or In an attempt to justify its resort to certiorari and prohibition under Rule 65, the CESB asserts that the
modifying the proceedings of such tribunal, board or officer, and granting such incidental reliefs as law allegations in its Petition - the patent illegality of the assailed Decision and Resolution of the CSC, as well
and justice may require.1âwphi1 as the lack of jurisdiction and the grave abuse of discretion attending the latter's ruling - are not suitable
for an appeal under Rule 43. It argues that since these grounds properly pertain to a petition
for certiorari and prohibition, this remedy is more appropriate.
The petition shall be accompanied by a certified true copy of the judgment, order or resolution subject
thereof, copies of all pleadings and documents relevant and pertinent thereto, and a sworn certification
of non-forum shopping as provided in the third paragraph of section 3, Rule 46. We find the CESB's contention untenable. As previously stated, certiorari and prohibition are proper only
if both requirements are present, that is, if the appropriate grounds are invoked; and an appeal or any
plain, speedy, and adequate remedy is unavailable. Mere reference to a ground under Rule 65 is not
Section 2. Petition for prohibition. - When the proceedings of any tribunal, corporation, board, officer or
sufficient. This Court has, in fact, dismissed a Petition for Certiorari assailing another CSC Resolution
person, whether exercising judicial, quasi-judicial or ministerial functions, are without or in excess of its
precisely on this ground. In Mahinay v. Court of Appeals,46 the Court ruled:
or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there
is no appeal or any other plain, speedy, and adequate remedy in the ordinary course of law, a person
aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and As provided by Rule 43 of the Rules of Court, the proper mode of appeal from the decision of a quasi-
praying that judgment he rendered commanding the respondent to desist from further proceedings in judicial agency, like the CSC, is a petition for review filed with the CA.
the action or matter specified therein, or otherwise granting such incidental reliefs as law and justice
may require.
The special civil action of certiorari under Rule 65 of the Rules of Court may be resorted to only when any
tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess of
The petition shall likewise be accompanied by a certified true copy of the judgment, order or resolution its/his jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there
subject thereof copies of all pleadings and documents relevant and pertinent thereto, and a sworn is no appeal, or any plain, speedy, and adequate remedy in the ordinary course of law.
certification of non-forum shopping as provided in the third paragraph of section 3, Rule 46. (Emphasis
supplied)
In this case, petitioner clearly had the remedy of appeal provided by Rule 43 of the Rules of
Court. Madrigal Tran.\port, Inc. v. Lapanday Holdings Corporation held:
In this case, the second requirement is plainly absent. As respondents correctly observed, there was an
appeal available to the CESB in the form of a petition for review under Rule 43 of the Rules of Civil
Where appeal is available to the aggrieved party, the action for certiorari will not be entertained.
Procedure. Section 1 of Rule 43 specifically provides for appeals from decisions of the CSC:
Remedies of appeal (including petitions for review) and certiorari are mutually exclusive, not alternative
or successive. Hence, certiorari is not and cannot be a substitute for an appeal, especially if one's own
Section 1. Scope. - This Rule shall apply to appeals from judgments or final orders of the Court of Tax negligence or error in one's choice of remedy occasioned such loss or lapse. One of the requisites
Appeals and from awards, judgments, final orders or resolutions of or authorized by any quasi-judicial of certiorari is that there be no available appeal or any plain, speedy and adequate remedy. Where an
agency in the exercise of its quasi-judicial functions. Among these agencies are the Civil Service appeal is available, certiorari will not prosper, even if the ground therefor is grave abuse of discretion.
Commission, Central Board of Assessment Appeals, Securities and Exchange Commission, Office of the (Emphasis and underscoring supplied)
President, Land Registration Authority, Social Security Commission, Civil Aeronautics Board, Bureau of
Patents, Trademarks and Technology Transfer, National Electrification Administration, Energy Regulatory
Here, the CESB could have appealed the CSC Decision and Resolution to the CA via a petition for review
Board, National Telecommunications Commission, Department of Agrarian Reform under Republic Act
under Rule 43. Hence, the filing of the instant Petition for Certiorari and Prohibition is improper
No. 6657, Government Service Insurance System, Employees Compensation Commission, Agricultural
regardless of the grounds invoked therein.
Invention Board, Insurance Commission, Philippine Atomic Energy Commission, Board of Investments,
Construction Industry Arbitration Commission, and voluntary arbitrators authorized by law.
Moreover, we find no reason to allow the CESB to avail itself of the extraordinary remedies
of certiorari and prohibition. Indeed, the petition itself cites no exceptional circumstance47 other than
Section 5. How appeal taken. - Appeal shall be taken by filing a verified petition for review in seven (7)
the supposed transcendental importance of the issues raised, "as the assailed CSC Decision is gravely
legible copies with the Court of Appeals, with proof of service of a copy thereof on the adverse party and
prejudicial to the mandate of the Petitioner." Even when confronted by respondents with regard to the
on the court or agency a quo. The original copy of the petition intended for the Court of Appeals shall be
availability of an appeal, the CESB still failed to cite any special justification for its refusal to avail itself of
indicated as such by the petitioner.
an appeal. Instead, it opted to focus on the nature of the grounds asserted in its Petition. For the reasons
stated above, a mere reference to grave abuse of discretion cannot justify a resort to a petition under
Upon the filing of the petition, the petitioner shall pay to the clerk of court of the Court of Appeals the Rule 65.
docketing and other lawful fees and deposit the sum of ₱500.00 for costs. Exemption from payment of
docketing and other lawful fees and the deposit for costs may be granted by the Court of Appeals upon a
Considering the failure of the CESB to offer a compelling explanation for its insistence upon the special
verified motion setting forth valid grounds therefor. If the Court of Appeals denies the motion, the
remedies of certiorari and prohibition, the Court finds no justification for a liberal application of the
petitioner shall pay the docketing and other lawful fees and deposit for costs within fifteen (15) days
rules.
from notice of the denial. (Emphasis supplied)

In any event, the contentions of the CESB are without merit. As will be further explained, we find no
grave abuse of discretion on the part of the CSC. In resolving the appeal filed by the PAO, the CSC merely
exercised the authority granted to it by the Constitution as the central personnel agency of the
government.
The CSC acted within its }urisdiction when it resolved the PAO's appeal and reversed CESB Resolution No.
918.
At its core, this case requires the Court to delineate the respective authorities granted by law to two
agencies involved in the management of government personnel - the CSC and the CESB. This particular
dispute involves not only the jurisdiction of each office over personnel belonging to the third-level of the
civil service, but also the relationship between the two offices.
On the one hand, the CESB asserts its jurisdiction over members of the CES. Specifically, it refers to the
identification and classification of positions belonging to the third-level, as well as the establishment of
the qualifications for appointment to those posts. The CESB further emphasizes its autonomy from the
CSC on the basis of this Court's ruling that its status as an attached agency only pertains to policy and
program coordination.
The CSC, on the other hand, defends its authority to review actions and decisions of its attached
agencies, including the CESB. The CSC further claims original and appellate jurisdiction over
administrative cases involving contested appointments, pursuant to its constitutional mandate as the
central personnel agency of the government.
In the interest of the effective and efficient organization of the civil service, this Court must ensure that
the respective powers and functions of the CSC and the CESB are well-defined. After analyzing and
harmonizing the legal provisions pertaining to each of these two agencies, the Court concludes that the
CSC has the authority to review CESB Resolution No. 918. We have arrived at this conclusion after a
consideration of (a) the broad mandate of the CSC under the Constitution and the Administrative Code;
and (b) the specific and narrowly tailored powers granted to the CESB in the Integrated Reorganization
Plan and the Administrative Code.
As the central personnel agency of the government, the CSC has broad authority to pass upon all civil
service matters.
Article IX-B of the 1987 Constitution entrusts to the CSC48 the administration of the civil service, which is
comprised of "all branches, subdivisions, instrumentalities, and agencies of the Government, including
government-owned or controlled corporations with original charters."49 In particular, Section 3 of Article
IX-B provides for the mandate of this independent constitutional commission:
SECTION 3. The Civil Service Commission, as the central personnel agency of the Government, shall
establish a career service and adopt measures to promote morale, efficiency, integrity, responsiveness,
progressiveness, and courtesy in the civil service. It shall strengthen the merit and rewards system,
integrate all human resources development programs for all levels and ranks, and institutionalize a
management climate conducive to public accountability. It shall submit to the President and the
Congress an annual report on its personnel programs. (Emphases supplied)
54
The proceedings of the 1986 Constitutional Commission reveal the intention to emphasize the status of
the CSC as the "central personnel agency of the Government with all powers and functions inherent in
and incidental to human resources management."50 As a matter of fact, the original proposed provision
on the functions of the CSC reads:
Sec. 3. The Civil Service Commission, as the central personnel agency of the government. shall establish a
career service, promulgate and enforce policies on personnel actions, classif[y] positions, prescribe
conditions of employment except as to compensation and other monetary benefits which shall be
provided by law, and exercise alt powers and functions inherent in and incidental to human resources
management, to promote morale, efficiency, and integrity in the Civil Service. It shall submit to the
President and the Congress an aimual report on its personnel programs, and perform such other
functions as may be provided by law.51 (Emphases supplied)
Although the specific powers of the CSC are not enumerated in the final version of 1987 Constitution,52 it
is evident from the deliberations of the framers that the concept of a "central personnel agency" was
considered all-encompassing. The concept was understood to be sufficiently broad as to include the
authority to promulgate and enforce policies on personnel actions, to classify positions, and to exercise
all powers and functions inherent in and incidental to human resources management:
MR. FOZ. Will the amendment reduce the powers and functions of the Civil Service as embodied in our
original draft?
MS. AQUINO: No, it will not. The proposed deletion of lines 35 to 40 of page 2 until line 1 of page 3
would not in any way minimize the powers of the Civil Service (Commission] because they are deemed
implicitly included in the all-embracing definition and concept of "central personnel agency of the
government." I believe that the lines we have mentioned are but redundant articulation of that same
concept, unnecessary surplusage.
MR. FOZ. For instance, will the power or function to promulgate policies on personnel actions be
encompassed by the Commissioner's amendment?
MS. AQUINO. It is not an amendment because I am retaining lines 33 to 35. I proposed an amendment
after the words "career service.'' I am only doing away with unnecessary redundancy.
MR. FOZ. Can we say that all of the powers enumerated in the original provision are still being granted
by the Civil Service Commission despite the elimination of the listing of these powers and functions?
MS. AQUINO. Yes, Mr. Presiding Officer, in the nature of a central personnel agency, it would have to
necessarily execute all of these functions.
MR. FOZ. And will the elimination of all these specific functions be a source of ambiguity and
controversies later on as to the extent of the powers and functions of the commission?
MS. AQUINO. I submit that this would not be susceptible of ambiguity because the concept of a central
personnel agency is a generally accepted concept and as experience would bear out, this function is
actually being carried out already by the Civil Service Commission, except that we are integrating this
concept. I do not think that it would be susceptible of any ambiguity.

MR. REGALADO. Mr. Presiding Officer.
THE PRESIDING OFFICER (Mr. Treñas). Yes, Commissioner Regalado is recognized.
MR. REGALADO. This is more for clarification.
The original Section 3 states, among others, the functions of the Civil Service Commission - to
promulgate and enforce policies on personnel actions. Will Commissioner Aquino kindly indicate to us
the corresponding provisions and her proposed amendment which would encompass the powers to
promulgate and enforce policies on personnel actions?
MS. AQUINO. It is my submission that the same functions are already subsumed under the concept of a
central personnel agency.
MR. REGALADO. In other words, all those functions enumerated from line 35 on page 2 to line I of page 3
inclusive, are understood to be encompassed in the phrase "central personnel agency of the
government."
MS. AQUINO. Yes, Mr. Presiding Officer, except that on line 40 of page 2 and line 1 of the subsequent
page, it was only subjected to a little modification.
MR. REGALADO. May we, therefore, make it of record that the phrase"... promulgate and enforce
policies on personnel actions, classify positions, prescribe conditions of employment except as to
compensation and other monetary benefits which shall be provided by law" is understood to be
subsumed under and included in the concept of a central personnel agency.
MS. AQUINO. I would have no objection to that.53 (Emphases and underscoring supplied)
In accordance with the foregoing deliberations, the mandate of the CSC should therefore be read as the
comprehensive authority to perform all functions necessary to ensure the efficient administration of
the entire civil service, including the CES.
The Administrative Code of 1987 further reinforces this view. Book V, Title I, Subtitle A, Chapter 3,
Section 12 thereof enumerates the specific powers and functions of the CSC while recognizing its
comprehensive authority over all civil service matters. Section 12, Items (1) to (5), (11), (14), and (19),
are of particular relevance to this dispute:
SECTION 12. Powers and Functions.-The Commission shall have the following powers and functions:
(1) Administer and enforce the constitutional and statutory provisions on the merit system for all levels
and ranks in the Civil Service;
(2) Prescribe, amend and enforce rules and regulations for carrying into effect the provisions of the Civil
Service Law and other pertinent laws;
55
(3) Promulgate policies, standards and guidelines for the Civil Service and adopt plans and programs to
promote economical, efficient and effective personnel administration in the government;
(4) Formulate policies and regulations for the administration, maintenance and implementation of
position classification and compensation and set standards for the establishment, allocation and
reallocation of pay scales, classes and positions;
(5) Render opinion and rulings on all personnel and other Civil Service matters which shall be binding on
all heads of departments, offices and agencies and which may be brought to the Supreme Court
on certiorari;
(11) Hear and decide administrative cases instituted by or brought before it directly or on appeal,
including contested appointments, and review decisions and actions of its offices and of the agencies
attached to it. Officials and employees who fail to comply with such decisions, orders, or rulings shall be
liable for contempt of the Commission. Its decisions, orders, or rulings shall be final and executory. Such
decisions, orders, or rulings may be brought to the Supreme Court on certiorari by the aggrieved party
within thirty (30) days from receipt of a copy thereof;
(14) Take appropriate action on all appointments and other personnel matters in the Civil Service
including extension of Service beyond retirement age;
(19) Perform all functions properly belonging to a central personnel agency and such other functions as
may be provided by law.
It is evident from the foregoing constitutional and statutory provisions that the CSC, as the central
personnel agency of the government, has been granted the broad authority and the specific powers to
pass upon all civil service matters. The question before the Court today is whether this broad authority
encompasses matters pertaining to the CES and are, as such, recognized to be within the jurisdiction of
the CESB.
To allow us to understand the legal framework governing the two agencies and to harmonize the
provisions of law, it is now necessary for the Court to examine the history and the mandate of the CESB.
It may thereby determine the proper relation between the CSC and the CESB.
The CESB has been granted specific and limited powers under the law.
On 9 September 1968, Congress enacted R.A. 5435 authorizing the President to reorganize different
executive departments, bureaus, offices, agencies, and instrumentalities of the government. The statute
also created a Commission on Reorganization with the mandate to study and investigate the status of all
offices in the executive branch. This commission was also tasked to submit an integrated reorganization
plan to the President, and later on to Congress, for approval. The Commission was given until 31
December 1970 to present its plan to the President.54
After the conduct of hearings and intensive studies, a proposed Integrated Reorganization Plan55 was
submitted to then President Ferdinand E. Marcos on 31 December 1970. The plan included a proposal to
develop a professionalized and competent civil service through the establishment of the CES - a group of
senior administrators carefully selected for managerial posts in the higher levels.56 To promulgate
standards for the CES, the Commission on Reorganization recommended the creation of the CESB:
 56

To promulgate standards, rules and procedures regarding the selection, classification, compensation and
career development of members of the Career Executive Service, a Board is proposed to be established.
The Board shall be composed of high-level officials to provide a government-wide view and to ensure
effective support for the establishment and development of a corps of highly competent, professional
administrators.57
On the other hand, the CSC asserts its jurisdiction to act upon the appeal from CESB Resolution No. 918
by virtue of its status as the central personnel agency of the government. It contends that the CESB 's
authority to prescribe entrance requirements for the third-level of the civil service does not mean that
the CSC no longer has jurisdiction over that class of positions. It also points out that the case involves a
personnel action that is within the jurisdiction conferred upon it by law.

The plan was referred to a presidential commission for review, but Martial Law was declared before the We uphold the position of the CSC.
proposal could be acted upon. Four days after the declaration of Martial Law, however, the Integrated
Reorganization Plan was approved by former President Marcos through Presidential Decree No. 1.58This
It is a basic principle in statutory construction that statutes must be interpreted in harmony with the
approved plan included the creation of the CES and the CESB.
Constitution and other laws.70 In this case, the specific powers of the CESB over members of the CES
must be interpreted in a manner that takes into account the comprehensive mandate of the CSC under
The CES was created to "form a continuing pool of well-selected and development-oriented career the Constitution and other statutes.
administrators who shall provide competent and faithful service."59 The CESB was likewise established to
serve as the governing body of the CES60 with the following functions: (a) to promulgate rules, standards
The present case involves the classification of positions belonging to the CES and the qualifications for
and procedures for the selection, classification, compensation and career development of members of
these posts. These are matters clearly within the scope of the powers granted to the CESB under the
the CES;61 (b) to set up the organization and operation of the civil service in accordance with the
Administrative Code and the Integrated Reorganization Plan. However, this fact alone does not push the
guidelines provided in the plan;62 (c) to prepare a program of training and career development for
matter beyond the reach of the CSC.
members of the CES;63 (d) to investigate and adjudicate administrative complaints against members of
the CES.64
As previously discussed, the CSC, as the central personnel agency of the government, is given the
comprehensive mandate to administer the civil service under Article IX-B, Section 3 of the 1987
When the Administrative Code was enacted in 1987, the CESB was given the additional authority to (a)
Constitution; and Section 12, Items (4), (5), and (14) of the Administrative Code. It has also been
identify other officers belonging to the CES in keeping with the conditions imposed by law;65 and (b)
expressly granted the power to promulgate policies, standards, and guidelines for the civil service; and to
prescribe requirements for entrance to the third-level.66
render opinions and rulings on all personne1 and other civilservice matters.71

Based on the foregoing provisions, it is clear that the powers granted to the CESB are specific and
Here, the question of whether the subject PAO positions belong to the CES is clearly a civil service matter
limited. This Court must now determine whether it is possible to interpret these powers in harmony with
falling within the comprehensive jurisdiction of the CSC. Further, considering the repercussions of the
the broad constitutional mandate of the CSC.
issue concerning the appointments of those occupying the posts in question, the jurisdiction of the CSC
over personnel actions is implicated.
The specific powers of the CESB must be narrowly interpreted as exceptions to the comprehensive
authority granted to the CSC by the Constitution and relevant statutes.
It must likewise be emphasized that the CSC has been granted the authority to review the decisions of
agencies attached to it under Section 12(11), Chapter 3, Subtitle A, Title I, Book V of the Administrative
As we have earlier observed, the interplay between the broad mandate of the CSC and the specific Code:
authority granted to the CESB is at the root of this controversy. The question we must resolve, in
particular, is whether the CSC had the authority to review and ultimately reverse CESB Resolution No.
SECTION 12. Powers and Functions.--The Commission shall have the following powers and functions:
918, upon the appeal of the PAO.

(11) Hear and decide administrative cases instituted by or brought before it directly or on appeal,
For its part, the CESB contends that the Integrated Reorganization Plan and the Administrative Code
including contested appointments, and review decisions and actions of its offices and of the agencies
have granted it the exclusive authority to identify the positions belonging to the third-level of the civil
attached to it. Officials and employees who fail to comply with such decisions, orders, or rulings shall be
service and to prescribe the eligibility requirements for appointments thereto.67 It thus asserts that the
liable for contempt of the Commission. Its decisions, orders, or rulings shall be final and executory. Such
foregoing matters are beyond the revisory jurisdiction of the CSC, and must instead be appealed to the
decisions, orders, or rulings may be brought to the Supreme Court on certiorari by the aggrieved party
Office of the President in accordance with the specific provisions of the aforementioned laws. This
within thirty (30) days from receipt of a copy thereof;
special mandate must allegedly prevail over the general authority granted to the CSC.

Since the CESB is an attached agency of the CSC,72 the former's decisions are expressly subject to the
As to its status as an attached agency, the CESB cites this Court's pronouncement in Eugenio v. CSC68on
CSC's review on appeal.
its autonomy from its mother agency. The CESB contends that its attachment to the CSC is only for the
purpose of "policy and program coordination."69 Allegedly, this attachment does not mean that the
former's decisions, particularly CESB Resolution No. 918, are subject to the CSC's review. Against the express mandate given to the CSC in the foregoing provision, the contention of the CESB that
its decisions may only be appealed to the Office of the President must fail. We note that the supporting

provision73 cited by the CESB in support of its argument refers only to administrative cases involving
the discipline of members of the CES:
5. The Board shall promulgate rules, standards and procedures on the selection, classification,
compensation and career development of members of the Career Executive Service. The Board shall set
up the organization and operation of the Service in accordance with the following guidelines:
h. Discipline. Investigation and adjudication of administrative complaints against members of the Career
Executive Service shall be governed by Article VI, Chapter II and Paragraph I (d) of Article II, Chapter III of
this Part; provided that appeals shall be made to the Career Executive Service Board instead of the Civil
Service Commission. Administrative cases involving members of the Service on assignment with the
Board shall be investigated and adjudicated by the Board with the right to appeal to the Office of the
President. (Emphasis supplied)
In our view, the foregoing rule on appeals to the Office of the President only covers disciplinary
cases involving members of the CES. It is evident that this special rule was created for that particular
type of case, because members of the CES arc all presidential appointees. Given that the power to
appoint generally carries with it the power to discipline,74 it is only reasonable for the president to be
given the ultimate authority to discipline presidential appointees. But this special rule cannot apply to
the matter at hand, because CESB Resolution No. 918 did not involve a disciplinary case. Since it was
clearly outside the scope of the foregoing provision, the Resolution did not come within the jurisdiction
of the Office of the President. It was therefore correctly appealed to the CSC.
From the above discussion, it is evident that the CSC acted within its jurisdiction when it resolved the
PAO's appeal. The arguments of the CESB on this point must perforce be rejected.
The CSC correctly ruled that third level eligibility is not required for the subject positions.
The Court now comes to the final issue for resolution - whether the CSC ruled in accordance with law
when the latter declared that it was not necessary for occupants of the subject PAO posts to possess
third-level eligibility.
On this point, the CESB argues that third-level eligibility is required for the positions pursuant to R.A.
9406 in relation to R.A. 10071. It avers that R.A. 9406 requires the Chief Public Attorney, Deputy Chief
Public Attorneys, Regional Public Attorneys and Assistant Regional Public Attorneys to have the same
qualifications for appointment, rank, salaries, allowances and retirement privileges as the Chief State
Prosecutor, Assistant Chief State Prosecutor, Regional State Prosecutor and Assistant Regional State
Prosecutor of the NPS under P.D. 1275. The latter law is the old one that governs the NPS and requires
third-level eligibility for senior prosecutorial posts. According to the CESB, R.A. 10071 cannot apply,
because R.A. 9406 could not have referred to a law that had not yet been enacted at the time. It also
asserts that the subsequent declassification of prosecutors cannot benefit members of the PAO, because
the prosecutors exercise quasi-judicial functions while the PAO members do not.
On the other hand, the CSC argues that nowhere in R.A. 9406, P.D. 1275, R.A. 10071 or Batas Pambansa
Blg. (B.P.) 129 is there a reference to third-level eligibility and CESO rank as qualification requirements. It
emphasizes that the CESB cannot add to the provisions of these laws, which only require the practice of
law for a certain period of time and presuppose a bar license. The PAO, for its part, maintains that the
posts concerned are highly technical in nature because they primarily involve legal practice, and any
managerial functions performed are merely incidental to their principal roles. It also claims that the
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legislature could never have intended to require third-level eligibility for occupants of the subject posts
when it enacted R.A. 9406.
After a careful consideration of the relevant statutes and rules, this Court agrees with the conclusion of
the CSC. To require the occupants of the subject PAO positions to possess third-level eligibility would be
to amend the law and defeat its spirit and intent.
The CESB effectively amended the law when it required the occupants of the subject PAO positions to
obtain third-level eligibility.
The authority to prescribe qualifications for pos1t10ns in the government is lodged in Congress75 as part
of its plenary legislative power to create, abolish and modify public offices to meet societal
demands.76 From this authority emanates the right to change the qualifications for existing statutory
offices.77
It was in the exercise of this power that the legislature enacted Section 5 of R.A. 9406, which provides for
the qualifications for the Chief Public Attorney, Deputy Chief Public Attorneys, Regional Public Attorneys
and Assistant Regional Public Attorneys:
SEC. 5. Section 16, Chapter 5, Title III, Book IV of Executive Order No. 292, as amended, is hereby further
amended to read as follows:
SEC. 16. The Chief Public Attorney and Other PAO Officials. - The PAO shall be headed by a Chief Public
Attorney and shall be assisted by two (2) Deputy Chief Public Attorneys. Each
PAO Regional Office established in each of the administrative regions of the country shall be headed by a
Regional Public Attorney who shall be assisted by an Assistant Regional Public
Attorney. The authority and responsibility for the exercise of the mandate of the PAO and for the
discharge of its powers and functions shall be vested in the Chief Public Attorney.
The Chief Public Attorney shall have the same qualifications for appointment, rank, salaries, allowances,
and retirement privileges as those of the Chief State Prosecutor of the National Prosecution Service. The
Deputy Chief Public Attorneys shall have the same qualifications for appointment, rank, salaries,
allowances, and retirement privileges as those of the Assistant Chief State Prosecutor of the National
Prosecution Service.
The Regional Public Attorney and the Assistant Regional Public Attorney shall have the same
qualifications for appointment, rank, salaries, allowances, and retirement privileges as those of a
Regional State Prosecutor and the Assistant Regional State Prosecutor of the National Prosecution
Service respectively.
At the time of the enactment of R.A. 9406, the qualifications of officials of the NPS, to which the
foregoing provision referred, were provided by Section 3 of P.D. 1275:

Section 3. Prosecution Staff; Organization, Qualifications, Appointment. The Prosecution Staff shall be
composed of prosecuting officers in such number as hereinbelow determined. It shall be headed by a
Chief State Prosecutor who shall be assisted by three Assistants Chief State Prosecutors.
The Chief State Prosecutor, the three Assistants Chief State Prosecutors; and the members of the
Prosecution Staff shall be selected from among qualified and professionally trained members of the legal
profession who arc of proven integrity and competence and have been in the actual practice of the legal
profession for at least five (5) years prior to their appointment or have held during like period, any
position requiring the qualifications of a lawyer. (Emphases supplied)
Soon after, R.A. 10071 or the Prosecution Service Act of 201078 was passed. In updating the qualifications
for senior positions in the NPS, Congress again opted to refer to another set of positions, this time in the
judiciary:
SECTION 14. Qualifications, Rank and Appointment of the Prosecutor General. - The Prosecutor General
shall have the same qualifications for appointment, rank, category, prerogatives, salary grade and
salaries, allowances, emoluments and other privileges, shall be subject to the same inhibitions and
disqualifications, and shall enjoy the same retirement and other benefits as those of the Presiding Justice
of the Court of Appeals and shall be appointed by the President.
SECTION 15. Ranks of Prosecutors. - The Prosecutors m the National Prosecution Service shall have the
following ranks:
Rank Position/Title
Prosecutor V (I) Senior Deputy State Prosecutors;
(2) Regional Prosecutors; and
(3) Provincial Prosecutors or City Prosecutors of provinces or cities with at least twenty-five
(25) prosecutors and City Prosecutors of cities within a metropolitan area established by law Prosecutor
IV (1) Deputy State Prosecutors;
(2) Deputy Regional Prosecutors
(3) Provincial Prosecutors or City Prosecutors of provinces or cities with less than twenty-five (25)
prosecutors; and
(4) Deputy Provincial Prosecutors or Deputy City Prosecutors of provinces or cities with at least twenty-
five (25) prosecutors; and Deputy City Prosecutors of cities within a metropolitan area established by
law.
SECTION 16. Qualifications, Ranks and Appointments of Prosecutors and Other Prosecution Officers. -
Prosecutors with the rank of Prosecutor V shall have the same qualifications for appointment, rank,
category, prerogatives, salary grade and salaries, allowances, emoluments and other privileges, shall be
58
subject to the same inhibitions and disqualifications, and shall enjoy the same retirement and other
benefits as those of an Associate Justice of the Court of Appeals.
Prosecutors with the rank of Prosecutor IV shall have the same qualifications for appointment, rank,
category, prerogatives, salary grade and salaries, allowances, emoluments and other privileges, shall be
subject to the same inhibitions and disqualifications, and shall enjoy the same retirement and other
benefits as those of a Judge of the
Regional Trial Court.
A reading of B.P. 129 reveals, in turn, that the Presiding Justice and the Associate Justices of the Court of
Appeals79are required to have the same qualifications as the members of this Court. 80 On the other
hand, judges of the regional trial courts are governed by a separate provision.81
Based on the foregoing, it is clear that occupants of the subject PAO positions are only mandated to
comply with requirements as to age, citizenship, education, and experience. Since third-level eligibility is
not at all mentioned in the law, it would be improper for the CESB to impose this additional qualification
as a prerequisite to permanent appointments.82 To do so would be to amend the law and to overrule
Congress.
While the CESB has been granted the power to prescribe entrance requirements for the third-level of the
civil service, this power cannot be construed as the authority to modify the qualifications specifically set
by law for certain positions. Hence, even granting that the occupants of the subject positions indeed
exercise managerial and executive functions as incidents of their primary roles, the CESB has no power to
impose additional qualifications for them. It cannot use the authority granted to it by Congress itself to
defeat the express provisions of statutes enacted by the latter.
It is also beyond the power of the CESB to question or overrule the specific qualifications imposed by
Congress for the subject positions. The legislature must be deemed to have considered the entirety of
the functions attendant to these posts when it enacted R.A. 9406 and prescribed the relevant
qualifications for each position. The choice not to require third level eligibility in this instance must be
respected - not only by the CESB but also by this Court - as a matter that goes into the wisdom and the
policy of a statute.83
The intent of R.A. 9406 to establish and maintain the parity in qualifications between the senior officials
of the PAO and the NPS must he respected.
This Court must likewise reject the CESB's contention that the declassification of positions in the NPS (as
a result of the enactment of R.A. 10071) cannot benefit the PAO because of a supposed difference in
their functions. This argument goes against the express terms and the clear intent of R.A. 9406 and is
therefore untenable.
As stated previously, Section 5 of R.A. 9406 amended the Administrative Code of 1987. The amendment
was done to provide for "the same qualifications for appointment, rank, salaries, allowances, and
retirement privileges" of senior officials of both the PAO and the NPS. The deliberations of Congress on
R.A. 9406 reveal its intention to establish parity between the two offices. The lawmakers clearly viewed
these officers as counterparts in the administration of justice:

Senator Enrile. Well, I agree with the gentleman. As I said, we should equalize the prosecution and the
defense. The PAO Office is actually an arm of the same government to protect those who need
protection.
Senator Pimentel. That is right.
Senator Enrile. At the same time, the Prosecution Service is the arm of the government to punish those
who would need punishment. So, these two perform the same class of service for the nation and they
should be equalized.
Senator Pimentel. Yes, I totally agree with that, that is why precisely I made this observation that talking
alone of starting pay, the level of starting pay of a PAO lawyer should not be lower than the starting pay
of a prosecutor.
Now maybe at the proper time we can insert that amendment.
Senator Enrile. I will be glad to receive the proposed amendment.84 (Emphases supplied)
During the bicameral conference on the proposed bill, Senator Franklin M. Drilon explained that equal
treatment of the two offices was essential:
SEN. DRILON. Yes, this is our amendment that the PAO chief should have the same salary as the Chief
State Prosecutor and down the line, the Assistant Chief State Prosecutor, etcetera. And I want to put this
on record because there are PAO lawyers here. There are PAO lawyers here before us and we want to
explain why we have placed this.
SEN. DRILON. All right. As I said - you know, I want to put on record why we had tried to streamline the
salary structure and place it at the same level as the Chief State Prosecutor. Because we do not want a
salary distortion in the Department of Justice where you have the PAO higher than the prosecutors.
That's why we want to put them on equal footing rather than mag - you know, there'll be whipsawing.
You place the prosecutors below the PAO. I can assure you that tomorrow the PAO will come to us - the
prosecutors will come to us and say, "Put us higher than the PAO lawyers." So you will have whipsawing
here.85
Although these statements were made to address the specific issue of salary, this Court considers them
as manifestations of the intent to create and maintain parity between prosecutors and public attorneys.
In Re: Vicente S. E. Veloso,86 this Court considered similar provisions in other laws as confirmations of the
legislative intent to grant equal treatment to certain classes of public officers:
Nonetheless, there are existing laws which expressly require the qualifications for appointment, confer
the rank, and grant the salaries, privileges, and benefits of members of the Judiciary on other public
officers in the Executive Department, such as the following:
(a) the Solicitor General and Assistant Solicitor Generals of the Office of the Solicitor General (OSG); and
(b) the Chief Legal Counsel and the Assistant Chief Legal Counsel, the Chief State Prosecutor, and the
members of the National Prosecution Service (NPS) in the Department of Justice.
59
The intention of the above laws is to establish a parity in qualifications required, the rank conferred, and
the salaries and benefits given to members of the Judiciary and the public officers covered by the said
laws. The said laws seek to give equal treatment to the specific public officers in the executive
department and the Judges and Justices who are covered by Batas Pambansa Blg. 129, as amended, and
other relevant laws. In effect, these laws recognize that public officers who are expressly identified in the
laws by the special nature of their official functions render services which are as important as the
services rendered by the Judges and Justices. They acknowledge the respective roles of those public
officers and of the members of the Judiciary in the promotion of justice and the proper functioning of
our legal and judicial systems.
To fulfill the legislative intent to accord equal treatment to senior officials of the PAO and the NPS, parity
in their qualifications for appointment must be maintained. Accordingly, the revised qualifications of
those in the NPS must also be considered applicable to those in the PAO. The declassification of positions
in the NPS should thus benefit their counterpart positions in the PAO. There is no justification for
treating the two offices differently, given the plain provisions and the rationale of the law.
This Court would render nugatory both the terms and the intent of the law if it sustains the view of the
CESB. We cannot construe R.A. 9046 in relation to P.D. 1275 only, while disregarding the amendments
brought about by R.A. 10071. To do so would defeat the legislature's very purpose, which is to equalize
the qualifications of the NPS and the PAO.
Based on the foregoing discussion, it is evident that the CSC acted within its jurisdiction and authority as
the central personnel agency of the government when it passed upon the appeal filed by the PAO from
CESB Resolution No. 918. Further, there was no grave abuse of discretion on the part of the CSC when it
reversed the said resolution, which refused to declassify the subject PAO positions. As the CSC noted, the
third-level eligibility required by the CESB as an additional qualification for these posts contravened not
only the express terms, but also the clear intent of R.A. 9406.
For the reasons stated above, and as a consequence of the improper remedy the CESB has resorted to,
this Court must dismiss the instant petition.
WHEREFORE, the Petition for Certiorari and Prohibition is DISMISSED for lack of merit. CSC Decision No.
110067 and Resolution No. 1100719 dated 15 February 2011 and 1 June 2011, respectively, are
hereby AFFIRMED.
SO ORDERED.