STATUTES AS A WHOLE
58;
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-28329 August 17, 1975
COMMISSIONER OF CUSTOMS, petitioner,
vs.
ESSO STANDARD EASTERN, INC., (Formerly: Standard-Vacuum
Refining Corp. (Phil.), respondent.
Office of the Solicitor General Antonio P. Barredo, Assistant Solicitor
General Antonio A. Torres and Solicitor Antonio M. Martinez for
petitioner.
Carlos J. Valdez & Associates for respondent.
ESGUERRA, J.:
Appeal from the decision of the Court of Tax Appeals reversing the
Commissioner of Customs' decision holding respondent ESSO
Standard Eastern, Inc., (formerly the Standard-Vacuum Refining
Corporation (Phil.) and hereinafter referred to as ESSO) liable in the
total sum of P775.62 as special import tax on certain articles imported
by the latter under Republic Act No. 387, otherwise known as the
Petroleum Act of 1949.
Respondent ESSO is the holder of Refining Concession No. 2, issued
by the Secretary of Agriculture and Natural Resources on December
9, 1957, and operates a petroleum refining plant in Limay Bataan.
Under Article 103 of Republic Act No. 387 which provides: "During the
five years following the granting of any concession, the concessionaire
may import free of customs duty, all equipment, machinery, material,
instruments, supplies and accessories," respondent imported and was
assessed the special import tax (which it paid under protest) on the
following separate importations:
1) One carton, scientific instruments with C & F value
of assessed a special import tax in the amount of
P31.98 (Airport Protest No. 10);
2) One carton of recorder parts with C & F value of
$221.56; assessed special import tax in the amount
of P43.82 (Airport Protest No. 11);
3) One carton of valves with C & F value of $310.
assessed special import tax in the amount of P60.72
(Airport Protest No. 12);
4) One box of parts for Conversion boilers and
Auxiliary Equipment with C & F value of $2,389.69;
assessed special import tax in the amount of P467.00
(Airport Protest No. 15);
5) One carton of X-ray films with C & F value of
$132.80; assessed special import tax in the amount
of P26.00 (Airport Protest No. 16); and
6) One carton of recorder parts with C & F value of
$750.39; assessed special import tax in the amount
of P147.00 (Airport Protest No. 17).1
The Collector of Customs on February 16, 1962, held that respondent
ESSO was subject to the payment of the special import tax provided
in Republic Act No. 1394, as amended by R.A. No. 2352, and
dismissed the protest.2
On March 1, 1962, respondent appealed the ruling of the Collector of
Customs to the Commissioner of Customs who, on March 19, 1965,
affirmed the decision of said Collector of Customs.3
On July 2, 1965, respondent ESSO filed a petition with the Court of
Tax Appeals for review of the decision of the Commissioner of
Customs.
The Court of Tax Appeals, on September 30, 1967, reversed the
decision of herein petitioner Commissioner of Customs and ordered
refund of the amount of P775.62 to respondent ESSO which the latter
had paid under protest.4
This decision of the Court of Tax Appeals is now before this Court for
review.
Petitioner contends that the special import tax under Republic Act No.
1394 is separate and distinct from the customs duty prescribed by the
Tariff and Customs Code, and that the exemption enjoyed by
respondent ESSO from the payment of customs duties under the
Petroleum net of 1949 does not include exemption from the payment
of the special import tax provided in R.A. No. 1394. 5
For its stand petitioner puts forward this rationale:
A perusal of the provisions of R.A. No. 1394 will show
that the legislature considered the special import tax
as a tax distinct from customs duties as witness the
fact that Section 2(a) of the said law made separate
 mention of customs duties and special import tax
when it provided that ... if as a result of the application
of the schedule therein, the total revenue derived from
the customs duties and from the special import tax on
goods, ... imported from the United States is less in
any calendar year than the proceeds from the
exchange tax imposed under Republic Act Numbered
Six Hundred and One, as amended, on such goods,
articles or products during the calendar year 1955, the
President may, by proclamation, suspend the
reduction of the special import tax for the next
succeeding calendar year ....
If it were the intention of Congress to exempt the
holders of petroleum refinery concessions like the
protestant (respondent herein), such exemption
should have been clearly stated in the statute.
Exemptions are never presumed. They must be
expressed in the clearest and most unambiguous
language and not left to mere implication.6
Specifically, petitioner in his brief submitted two assignment of errors
allegedly committed by the Court of Tax Appeals in the controverted
decision, to wit:
1st assignment of error:
THE COURT OF TAX APPEALS ERRED IN
HOLDING THAT THE TERM "CUSTOMS DUTY" IN
ARTICLE 103 OF REPUBLIC ACT NO. 387
INCLUDES THE SPECIAL IMPORT TAX IMPOSED
BY REPUBLIC ACT NO. 1394;
2nd assignment of error:
THE COURT OF TAX APPEALS ERRED IN
HOLDING THAT EXEMPTION FROM PAYMENT OF
CUSTOMS DUTIES UNDER REPUBLIC ACT NO.
387 INCLUDES EXEMPTION FROM PAYMENT OF
THE SPECIAL IMPORT TAX.
On the other hand, the Court of Tax Appeals rationalized the ground
for its ruling thus:
If we are to adhere, as we should, to the plain and
obvious meaning of words in consonance with settled
rules of interpretation, it seems clear that the special
import tax is an impost or a charge on the importation
or bringing into the Philippines of all goods, articles or
products subject thereto, for the phrase "import tax on
all goods, articles or products imported or brought into
the Philippines" in explicit and unambiguous terms
simply means customs duties. It is hardly necessary
to add that "customs duties" are simply taxes
assessed on merchandise imported from, or exported
to a foreign country.
And being a charge upon importation, the special
import tax is essentially a customs duty, or at least
partakes of the character thereof.
Citing numberous American decisions and definitions of terms
"customs duties," "duties," "imposts," "levies," "tax," and "tolls," and
their distinctions, including some pronouncements of this Court on the
subject, the Court of Tax Appeals in its decision, went to great lengths
to show that the term "special import tax" as used in R.A. No. 1394
includes customs duties. It sees the special import tax as nothing but
an impost or a charge on the importation or bringing into the
Philippines of goods, articles or products.7
To clinch its theory the Court of Tax Appeals cited the similarity in the
basis of computation of the customs duty as well as the similarity in
the phraseology of Section 3 of Republic Act No. 1394 (which
established the special import tax) and Section 9-01 of the Tariff &
Customs code (the basic law providing for and regulating the
imposition of customs duties and imposts on importations).8
For its part, private respondent, ESSO, in its answer to the petition,
leaned heavily on the same arguments as those given by the Tax
Court, the burden of which is that the special import tax law is a
customs law. 9
It is clear that the only issue involved in this case is whether or not the
exemption enjoyed by herein private respondent ESSO Standard
Eastern, Inc. from customs duties granted by Republic Act No. 387, or
the Petroleum Act of 1949, should embrace or include the special
import tax imposed by R.A. No. 1394, or the Special Import Tax Law.
We have examined the records of this case thoroughly and carefully
considered the arguments presented by both parties and We are
convinced that the only thing left to this Court to do is to determine the
intention of the legislature through interpretation of the two statutes
involved, i.e., Republic Act No. 1394 and Republic Act No. 387.
It is a well accepted principle that where a statute is ambiguous, as
Republic Act No. 1394 appears to be, courts may examine both the
printed pages of the published Act as well as those extrinsic matters
that may aid in construing the meaning of the statute, such as the
history of its enactment, the reasons for the passage of the bill and
purposes to be accomplished by the measure. 10
Petitioner in the first assignment of error took exception to the finding
of the Court of Tax Appeals that "The language of Republic Act No.
1394 seems to leave no room for doubt that the law intends that the
phrase 'Special import tax' is taken to include customs duties" and
countered with the argument that "An examination of the provisions of
Republic Act No. 1394 will indubitably reveal that Congress
considered the special import tax as a tax different from customs
duties, as may be seen from the fact that Section 2(a) of said law made
separate mention of customs duties and special import tax ..." Thus:
... if as a result of the application of the schedule
therein the total revenue derived from the customs
duties and from the special import tax on goods, ...
imported from the United States is less in any
calendar year than the proceeds from the exchange
tax imposed under Republic Act Numbered Six
Hundred and One, as amended, on such goods,
articles or products during the calendar year 1955, the
President may, by proclamation, suspend the
reduction of the special import tax for the next
succeeding calendar year ...
Petitioner further argues:
Customs duties are prescribed by the Tariff and
Customs Code, while the special import tax is
provided for by Republic Act No. 1394. If our
legislature had intended to classify the special import
tax as customs duty, the said Art would not have
expressly exempted from payment of the special
Import tax importations of machinery, equipment,
accessories, and spare parts for use of industries,
without distinguishing whether the industries referred
to are the industries exempt from the payment of
Customs duties or the non-exempt ones (Sec. 6). It is
sufficient that the imported machinery, etc., is for the
use of any industry. 11
A study of petitioner's two assignments of errors shows that one is
anchored on practically the same ground as the other: both involve the
interpretation of R.A. No. 387 (The Petroleum Act of 1949) in relation
with R.A. No. 1394 (The Special Import Tax Law).
While the petitioner harps on particular clauses and phrases found in
the two cited laws, which in a way was likewise resorted to by the
respondent ESSO, it would do Us well to restate the fundamental rule
in the construction of a statute.
In order to determine the true intent of the legislature, the particular
clauses and phrases of the statute should not be taken as detached
and isolated expressions, but the whole and every part thereof must
be considered in fixing the meaning of any of its parts. In fact every
statute should receive such construction as will make it harmonize with
the pre-existing body of laws. Antagonism between the Act to be
interpreted and existing or previous laws is to be avoided, unless it
was clearly the intention of the legislature that such antagonism should
arise and one amends or repeals the other, either expressly or by
implication.
Another rule applied by this Court is that the courts may take judicial
notice of the origin and history of the statutes which they are called
upon to construe and administer, and of facts which affect their
derivation, validity and operation. 12
Applying the above stated rules and principles, let us consider the
history, the purpose and objectives of Republic Act No. 387 as it
relates to Republic Act No. 1394 and other laws passed by the
Congress of the Philippines insofar as they relate to each other.
Republic Act No. 387, the Petroleum Act of 1949, has this for its title,
to wit:
AN ACT TO PROMOTE THE EXPLORATION,
DEVELOPMENT, EXPLOITATION, AND
UTILIZATION OF THE PETROLEUM RESOURCES
OF THE PHILIPPINES; TO ENCOURAGE THE
CONSERVATION OF SUCH PETROLEUM
RESOURCES; TO AUTHORIZE THE SECRETARY
OF AGRICULTURE AND NATURAL RESOURCES
TO CREATE AN ADMINISTRATION UNIT AND A
TECHNICAL BOARD IN THE BUREAU OF MINES;
TO APPROPRIATE FUNDS THEREFORE; AND
FOR OTHER PURPOSES.
Art. 103 of said Act reads:
 ART. 103. Customs duties. — During the five years
following the granting of any concessions, the
concessionaire may import free of customs duty, all
equipment, machinery, material, instruments,
supplies and accessories.
xxx xxx xxx
Art. 102 of the Same law insofar as pertinent, provides:
ART. 102. Work obligations, taxes, royalties not to be
charged. — ...; nor shall any other special taxes or
levies be applied to such concessions, nor shall
concessionaires under this Act be subjected to any
provincial, municipal, or other local taxes or levies;
nor shall any sales tax be charged on any petroleum
produced from the concession or portion thereof,
manufactured by the concessionaire and used in the
working of his concession. ....
Art. 104, still of the same Act, reads:
ART. 104. No export to be imposed. — No export tax
shall be levied upon petroleum produced from
concessions granted under this Act.
The title of Republic Act No. 387 and the provisions of its three articles
just cited give a clue to the intent of the Philippine legislature, which is
to encourage the exploitation and development of the petroleum
resources of the country. Through the instrumentality of said law, it
declared in no uncertain terms that the intensification of the
exploration for petroleum must be carried on unflinchingly even if, for
the time being, no taxes, both national and local, may be collected
from the industry. This is the unequivocal intention of the Philippine
Congress when the language of the Petroleum Act is examined. Until
this law or any substantial portion thereof is clearly amended or
repealed by subsequent statutes, the intention of the legislature must
be upheld.
Against this unambiguous language of R.A. No. 387, there is the
subsequent legislation, R.A. No. 1394, the Special Import Tax Law,
which, according to the herein petitioner, shows that the legislature
considered the special import tax as a tax distinct from customs duties.
Republic Act No. 1394, otherwise known as the Special Import Tax
Law, is entitled as follows:
AN ACT TO IMPOSE A SPECIAL IMPORT TAX ON
ALL GOODS, ARTICLES OR PRODUCTS
IMPORTED OR BROUGHT INTO THE
PHILIPPINES, AND TO REPEAL REPUBLIC ACTS
NUMBERED SIX HUNDRED AND ONE, EIGHT
HUNDRED AND FOURTEEN, EIGHT HUNDRED
AND SEVENTY-ONE, ELEVEN HUNDRED AND
SEVENTY-FIVE. ELEVEN HUNDRED AND NINETY-
SEVEN AND THIRTEEN HUNDRED AND SEVENTY
FIVE.
The title indicates unmistakably that it is repealing six prior statutes.
As will be seen later, all these laws dealt with the imposition of a
special excise tax on foreign exchange or other form of levy on
importation of goods into the country.
Section I of Republic Act No. 1394 reads as follows:
SECTION 1. Except as herein otherwise provided,
there shall be levied, collected and paid as special
import tax on all goods, articles or products imported
or brought into the Philippines, irrespective of source,
during the period and in accordance with the rates
provided for in the following schedule:
xxx xxx xxx
It would appear that by the provision of Section 1 of this Act, the
pertinent provision of the Petroleum Law, for which there appears to
be no proviso to the contrary has been modified or altered.
Section 6 of Republic Act No. 1394 declares that the tax provided for
in its Section I shall not be imposed against importation into the
Philippines of machinery and/or raw materials to be used by new and
necessary industries as determined in accordance with R A. No. 901
and a long list of other goods, articles, machinery, equipment,
accessories and others.
We shall now examine the six statutes repealed by R.A. No. 1394,
namely:
R.A. No. 601 is an Act imposing a special excise tax
of 17% on foreign exchange sold by the Central Bank
or its agents. This is known as the Exchange Tax Law;
R.A. No. 814 amended Sections one, two and five
and repealed Sections three and four of R.A. No. 601;
R.A. No. 871 amended Sections one and two of R.A.
No. 601, as amended earlier by R.A. No. 814;
R.A. No. 1175 amended further Sections one and two
of R.A. No. 601, as amended;
 R.A. No. 1197 amended furthermore R.A. No. 601 as
amended previously by R.A. No. 1175;
R.A. No. 1375 amended Sections one and two of R.A.
No. 601 as amended by R.A. Nos. 1175 and 1197.
As can be seen from the foregoing, in one fell swoop,
Republic Act No. 1394 repealed and revoked six
earlier statutes which had something to do with the
imposition of special levies and/or exemption of
certain importations from the burden of the special
import taxes or levies. On the other hand, it is
apparent that R.A. No. 387, the Petroleum Act, had
been spared from the pruning knife of Congress,
although this latter law had granted more concessions
and tax exemption privileges than any of the statutes
that were amended, repealed or revoked by R.A. No.
1394. The answer must be that the Congress of the
Philippine saw fit to preserve the privileges granted
under the Petroleum Law of 1949 in order to keep the
door open to the exploitation and development of the
petroleum resources of the country with such
incentives as are given under that law.
This ascertained will and intention of the legislature
finds a parallelism in a case brought earlier before this
Court.
A fishpond owner was slapped with taxes as a "merchant" by the
Collector of Internal Revenue. He paid under protest and filed an
action to recover the taxes paid, claiming that he was an agriculturist
and not a merchant. When this Court was called upon to interpret the
provisions of the Internal Revenue Law on whether fish is an
agricultural product which falls under the exemption provisions of said
law, it inquired into the purpose of the legislature in establishing the
exemption for agricultural products. We held:
The first inquiry, therefore, must relate to the purpose
the legislature had in mind in establishing the
exemption contained in the clause now under
consideration. It seems reasonable to assume that it
was due to the belief on the part of the law-making
body that by exempting agricultural products from this
tax the farming industry would be favored and the
development of the resources of the country
encouraged. .... 13
Having this in mind, particularly the manner in which extrinsic aids the
history of the enactment of the statute and purpose of the legislature
in employing a clause or provision in the law had been applied in
determining the true intent of the lawmaking body, We are convinced
that R.A. No. 387, The Petroleum Act of 1949, was intended to
encourage the exploitation, exploration and development of the
petroleum resources of the country by giving it the necessary incentive
in the form of tax exemptions. This is the raison d etre for the generous
grant of tax exemptions to those who would invest their financial
resources towards the achievement of this national economic goal.
On the contention of herein petitioner that the exemptions enjoyed by
respondent ESSO under R.A. No. 387 have been abrogated by R.A.
No. 1394, We hold that repeal by implication is not favored unless it is
manifest that the legislature so intended. As laws are presumed to be
passed with deliberation and with full knowledge of all existing ones
on the subject, it is logical to conclude that in passing a statute it was
not intended to interfere with or abrogate any former law relating to the
same matter, unless the repugnancy between the two is not only
irreconcilable but also clear and convincing as a result of the language
used, or unless the latter act fully embraces the subject matter of the
earlier. 14
As observed earlier, Congress lined up for revocation by Republic Act
No. 1394 six statutes dealing with the imposition of special imposts or
levies or the granting of exemptions from special import taxes. Yet,
considering the tremendous amount of revenues it was losing under
the Petroleum Law of 1949, it failed to include the latter statute among
those it chose to bury by the Special Import Taw Law. The reason for
this is very clear: The legislature wanted to continue the incentives for
the continuing development of the petroleum industry.
It is not amiss to mention herein passing that contrary to the theory of
the herein petitioner, R.A. No. 387 had not been repealed by R.A. No.
2352 which expressly abrogated Section 6 of R.A. No. 1394 but did
not repeal any part of R.A. No. 387. Therefore, the exemption granted
by Republic Act No. 387 still stands.
WHEREFORE, taking into consideration the weight given by this Court
to the findings and conclusions of the Court of Tax Appeals on a matter
it is well-equipped to handle, which findings and conclusions We find
no reason to overturn, the petition of the Commissioner of Customs to
reverse the decision of the Court of Tax Appeals should be, as it is
hereby, denied.
No costs.
SO ORDERED.
Castro (Chairman), Makasiar, Muñoz Palma and Martin, JJ., concur.
G.R. No. 109835 November 22, 1993
JMM PROMOTIONS & MANAGEMENT, INC., petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and ULPIANO L.
DE LOS SANTOS, respondent.
Don P. Porciuncula for petitioner.
Eulogio Nones, Jr. for private respondent.
CRUZ, J.:
The sole issue submitted in this case is the validity of the order of
respondent National Labor Relations Commission dated October 30,
1992, dismissing the petitioner's appeal from a decision of the
Philippine Overseas Employment Administration on the ground of
failure to post the required appeal bond.1
The respondent cited the second paragraph of Article 223 of the Labor
Code as amended, providing that:
In the case of a judgment involving a monetary award, an appeal by
the employer may be perfected only upon the posting of a cash or
surety bond issued by a reputable bonding company duly accredited
by the Commission in an amount equivalent to the monetary award in
the judgment appealed from.
and Rule VI, Section 6 of the new Rules of Procedure of the NLRC, as
amended, reading as follows:
Sec. 6. Bond — In case the decision of a Labor Arbiter involves a
monetary award, an appeal by the employer shall be perfected only
upon the posting of a cash or surety bond issued by a reputable
bonding company duly accredited by the Commission or the Supreme
Court in an amount equivalent to the monetary award.
The petitioner contends that the NLRC committed grave abuse of
discretion in applying these rules to decisions rendered by the POEA.
It insists that the appeal bond is not necessary in the case of licensed
recruiters for overseas employment because they are already required
under Section 4, Rule II, Book II of the POEA Rules not only to pay a
license fee of P30,000 but also to post a cash bond of P100,000 and
a surety bond of P50,000, thus:
Upon approval of the application, the applicant shall pay a license fee
of P30,000. It shall also post a cash bond of P100,000 and surety bond
of P50,000 from a bonding company acceptable to the Administration
and duly accredited by the Insurance Commission. The bonds shall
answer for all valid and legal claims arising from violations of the
conditions for the grant and use of the license, and/or accreditation
and contracts of employment. The bonds shall likewise guarantee
compliance with the provisions of the Code and its implementing rules
and regulations relating to recruitment and placement, the Rules of the
Administration and relevant issuances of the Department and all
liabilities which the Administration may impose. The surety bonds shall
include the condition that the notice to the principal is notice to the
surety and that any judgment against the principal in connection with
matters falling under POEA's jurisdiction shall be binding and
conclusive on the surety. The surety bonds shall be co-terminus with
the validity period of license. (Emphasis supplied)
In addition, the petitioner claims it has placed in escrow the sum of
P200,000 with the Philippine National Bank in compliance with Section
17, Rule II, Book II of the same Rule, "to primarily answer for valid and
legal claims of recruited workers as a result of recruitment violations
or money claims."
Required to comment, the Solicitor General sustains the appeal bond
requirement but suggest that the rules cited by the NLRC are
applicable only to decisions of the Labor Arbiters and not of the POEA.
Appeals from decisions of the POEA, he says, are governed by the
following provisions of Rule V, Book VII of the POEA Rules:
Sec. 5. Requisites for Perfection of Appeal. The appeal shall be filed
within the reglementary period as provided in Section 1 of this Rule;
shall be under oath with proof of payment of the required appeal fee
and the posting of a cash or surety bond as provided in Section 6 of
this Rule; shall be accompanied by a memorandum of appeal which
shall state the grounds relied upon and the arguments in support
thereof; the relief prayed for; and a statement of the date when the
appellant received the appealed decision and/or award and proof of
service on the other party of such appeal.
A mere notice of appeal without complying with the other requisites
aforestated shall not stop the running of the period for perfecting an
appeal.
Sec. 6. Bond. In case the decision of the Administration involves a
monetary award, an appeal by the employer shall be perfected only
upon the posting of a cash or surety bond issued by a reputable
bonding company duly accredited by the Commission in an amount
equivalent to the monetary award. (Emphasis supplied)
The question is, having posted the total bond of P150,000 and placed
in escrow the amount of P200,000 as required by the POEA Rules,
was the petitioner still required to post an appeal bond to perfect its
appeal from a decision of the POEA to the NLRC?
It was.
The POEA Rules are clear. A reading thereof readily shows that in
addition to the cash and surety bonds and the escrow money, an
appeal bond in an amount equivalent to the monetary award is
required to perfect an appeal from a decision of the POEA. Obviously,
the appeal bond is intended to further insure the payment of the
monetary award in favor of the employee if it is eventually affirmed on
appeal to the NLRC.
It is true that the cash and surety bonds and the money placed in
escrow are supposed to guarantee the payment of all valid and legal
claims against the employer, but these claims are not limited to
monetary awards to employees whose contracts of employment have
been violated. The POEA can go against these bonds also for
violations by the recruiter of the conditions of its license, the provisions
of the Labor Code and its implementing rules, E.O. 247 (reorganizing
POEA) and the POEA Rules, as well as the settlement of other
liabilities the recruiter may incur.
As for the escrow agreement, it was presumably intended to provide
for a standing fund, as it were, to be used only as a last resort and not
to be reduced with the enforcement against it of every claim of
recruited workers that may be adjudged against the employer. This
amount may not even be enough to cover such claims and, even if it
could initially, may eventually be exhausted after satisfying other
subsequent claims.
As it happens, the decision sought to be appealed grants a monetary
award of about P170,000 to the dismissed employee, the herein
private respondent. The standby guarantees required by the POEA
Rules would be depleted if this award were to be enforced not against
the appeal bond but against the bonds and the escrow money, making
them inadequate for the satisfaction of the other obligations the
recruiter may incur.
Indeed, it is possible for the monetary award in favor of the employee
to exceed the amount of P350,000, which is the sum of the bonds and
escrow money required of the recruiter.
It is true that these standby guarantees are not imposed on local
employers, as the petitioner observes, but there is a simple
explanation for this distinction. Overseas recruiters are subject to more
stringent requirement because of the special risks to which our
workers abroad are subjected by their foreign employers, against
whom there is usually no direct or effective recourse. The overseas
recruiter is solidarily liable with a foreign employer. The bonds and the
escrow money are intended to insure more care on the part of the local
agent in its choice of the foreign principal to whom our overseas
workers are to be sent.
It is a principle of legal hermeneutics that in interpreting a statute (or a
set of rules as in this case), care should be taken that every part
thereof be given effect, on the theory that it was enacted as an
integrated measure and not as a hodge-podge of conflicting
provisions. Ut res magis valeat quam pereat. 2 Under the petitioner's
interpretation, the appeal bond required by Section 6 of the
aforementioned POEA Rule should be disregarded because of the
earlier bonds and escrow money it has posted. The petitioner would
in effect nullify Section 6 as a superfluity but we do not see any such
redundancy; on the contrary, we find that Section 6 complements
Section 4 and Section 17. The rule is that a construction that would
render a provision inoperative should be avoided; instead, apparently
inconsistent provisions should be reconciled whenever possible as
parts of a coordinated and harmonious whole.
Accordingly, we hold that in addition to the monetary obligations of the
overseas recruiter prescribed in Section 4, Rule II, Book II of the POEA
Rules and the escrow agreement under Section 17 of the same Rule,
it is necessary to post the appeal bond required under Section 6, Rule
V, Book VII of the POEA Rules, as a condition for perfecting an appeal
from a decision of the POEA.
Every intendment of the law must be interpreted in favor of the working
class, conformably to the mandate of the Constitution. By sustaining
rather than annulling the appeal bond as a further protection to the
claimant employee, this Court affirms once again its commitment to
the interest of labor.
WHEREFORE, the petition is DISMISSED, with costs against the
petitioner. It is so ordered.
Davide and Quiason, JJ., concur.
Bellosillo, J, is on leave.
EN BANC
[G.R. No. 143596. December 11, 2003]
JUDGE TOMAS C. LEYNES, petitioner, vs. THE COMMISSION ON
AUDIT (COA), HON. GREGORIA S. ONG, DIRECTOR,
COMMISSION ON AUDIT and HON. SALVACION DALISAY,
PROVINCIAL AUDITOR, respondents.
DECISION
CORONA, J.:
Before us is a petition for certiorari under Rule 65 in relation to Section
2, Rule 64 of the Rules of Court, seeking to reverse and set aside the
decision[1] dated September 14, 1999 of the Commission on Audit
(COA), affirming the resolution of COA Regional
Director Gregoria S. Ong dated March 29, 1994 which in turn affirmed
the opinion dated October 19, 1993 of the Provincial Auditor of
Oriental Mindoro, Salvacion M. Dalisay. All three denied the grant
of P1,600 monthly allowance to petitioner Judge Tomas C. Leynes by
the Municipality of Naujan, Oriental Mindoro.
FACTUAL ANTECEDENTS
Petitioner Judge Tomas C. Leynes who, at present, is the presiding
judge of the Regional Trial Court of Calapan City, Oriental Mindoro,
Branch 40 was formerly assigned to the Municipality of Naujan,
Oriental Mindoro as the sole presiding judge of the Municipal Trial
Court thereof. As such, his salary and representation and
transportation allowance (RATA) were drawn from the budget of the
Supreme Court. In addition, petitioner received a monthly allowance
of P944 from the local funds[2] of the Municipality of Naujan starting
1984.[3]
On March 15, 1993, the Sangguniang Bayan of Naujan, through
Resolution No. 057, sought the opinion of the Provincial Auditor and
the Provincial Budget Officer regarding any budgetary limitation on the
grant of a monthly allowance by the municipality to petitioner judge.
On May 7, 1993, the Sangguniang Bayan unanimously approved
Resolution No. 101 increasing petitioner judges monthly allowance
from P944 to P1,600 (an increase of P656) starting May 1993.[4] By
virtue of said resolution, the municipal government (the Municipal
Mayor and the Sangguniang Bayan) approved a supplemental budget
which was likewise approved by the Sangguniang Panlalawigan and
the Office of Provincial Budget and Management of Oriental Mindoro.
In 1994, the Municipal Government of Naujan again provided for
petitioner judges P1,600 monthly allowance in its annual budget which
was again approved by the SangguniangPanlalawigan and the Office
of Provincial Budget and Management of Oriental Mindoro.[5]
On February 17, 1994, Provincial Auditor Salvacion M. Dalisay sent a
letter to the Municipal Mayor and
the Sangguniang Bayan of Naujan directing them to stop the payment
of the P1,600 monthly allowance or RATA to petitioner judge and to
require the immediate refund of the amounts previously paid to the
latter. She opined that the Municipality of Naujan could not grant
RATA to petitioner judge in addition to the RATA the latter was already
receiving from the Supreme Court. Her directive was based on the
following:
Section 36, RA No. 7645, General Appropriations Act of 1993
Representation and Transportation Allowances. The following officials
and those of equivalent rank as may be determined by the Department
of Budget and Management (DBM) while in the actual performance of
their respective functions are hereby granted monthly commutable
representation and transportation allowances payable from the
programmed appropriations provided for their respective offices, not
exceeding the rates indicated below . . .
National Compensation Circular No. 67 dated January 1, 1992, of the
Department of Budget and Management
Subject: Representation and Transportation Allowances of National
Government Officials and Employees
xxxxxxxxx
4. Funding Source: In all cases, commutable and reimbursable RATA
shall be paid from the amount appropriated for the purpose and other
personal services savings of the agency or project from where the
officials and employees covered under this Circular draw their
salaries. No one shall be allowed to collect RATA from more than one
source.[6] (emphasis supplied)
Petitioner judge appealed to COA Regional
Director Gregoria S. Ong who, however, upheld the opinion of
Provincial Auditor Dalisay and who added that Resolution No. 101,
Series of 1993 of the Sangguniang Bayan of Naujan failed to comply
with Section 3 of Local Budget Circular No. 53 dated September 1,
1993 outlining the conditions for the grant of allowances to judges and
other national officials or employees by the local government units
(LGUs). Section 3 of the said budget circular provides that:
Sec. 3 Allowances. ─ LGUs may grant allowances/additional
compensation to the national government officials/employees
assigned to their locality at rates authorized by law, rules and
regulations and subject to the following preconditions:
a. That the annual income or finances of the municipality, city or
province as certified by the Accountant concerned will allow the grant
of the allowances/additional compensation without exceeding the
general limitations for personal services under Section 325 of RA
7160;
b. That the budgetary requirements under Section 324 of RA 7160
including the full requirement of RA 6758 have been satisfied and
provided fully in the budget as certified by the Budget Officer and COA
representative in the LGU concerned;
c. That the LGU has fully implemented the devolution of
personnel/functions in accordance with the provisions of RA 7160;
d. That the LGU has already created mandatory positions prescribed
in RA 7160; and
e. That similar allowances/additional compensation are not granted by
the national government to the officials/employees assigned to the
LGU.[7]
Petitioner judge appealed the unfavorable resolution of the Regional
Director to the Commission on Audit. In the meantime, a disallowance
of the payment of the P1,600 monthly allowance to petitioner was
issued. Thus he received his P1,600 monthly allowance from
the Municipality of Naujan only for the period May 1993 to January
1994.
On September 14, 1999, the COA issued its decision affirming the
resolution of Regional Director Gregoria S. Ong:
The main issue . . . is whether or not the Municipality of Naujan,
Oriental Mindoro can validly provide RATA to its Municipal Judge, in
addition to that provided by the Supreme Court.
Generally, the grant of (RATA) [sic] to qualified national government
officials and employees pursuant to Section 36 of R.A. 7645 [General
Appropriations Act of 1993] and NCC No. 67 dated 01 January 1992
is subject to the following conditions to wit:
1. Payable from the programmed /appropriated amount and others
from personal services savings of the respective offices where the
officials or employees draw their salaries;
2. Not exceeding the rates prescribed by the Annual General
Appropriations Act;
3. Officials /employees on detail with other offices or assigned to serve
other offices or agencies shall be paid from their parent agencies;
4. No one shall be allowed to collect RATA from more than one source.
On the other hand, the municipal government may provide additional
allowances and other benefits to judges and other national
government officials or employees assigned or stationed in the
municipality, provided, that the finances of the municipality allow the
grant thereof pursuant to Section 447, Par. 1 (xi), R.A. 7160, and
provided further, that similar allowance/additional compensation are
not granted by the national government to the official/employee
assigned to the local government unit as provided under Section 3(e)
of Local Budget Circular No. 53, dated 01 September 1993.
The conflicting provisions of Section 447, Par. (1) (xi) of the Local
Government Code of 1991 and Section 36 of the General
Appropriations Act of 1993 [RA 7645] have been harmonized by the
Local Budget Circular No. 53 dated 01 September 1993, issued by the
Department of Budget and Management pursuant to its powers under
Section 25 and Section 327 of the Local Government Code. The said
circular must be adhered to by the local government units particularly
Section 3 thereof which provides the implementing guidelines of
Section 447, Par. (1) (xi) of the Local Government Code of 1991 in the
grant of allowances to national government officials/employees
assigned or stationed in their respective local government units.
Consequently, the subject SB Resolution No. 101 dated 11 May
1993 of the Sangguniang Bayan of Naujan, Oriental Mindoro, having
failed to comply with the inherent precondition as defined in Section 3
(e). . . is null and void. Furthermore, the Honorable Judge Tomas
C. Leynes, being a national government official is prohibited to receive
additional RATA from the local government fund pursuant to Section
36 of the General Appropriations Act (R.A. 7645 for 1993) and
National Compensation Circular No. 67 dated 1 January
1992.[8] (emphasis ours)
ASSIGNMENTS OF ERROR
Petitioner judge filed a motion for reconsideration of the above
decision but it was denied by the Commission in a resolution
dated May 30, 2000. Aggrieved, petitioner filed the instant petition,
raising the following assignments of error for our consideration:
I the Supreme Court.[9] Respondent bases its contention on the
WHETHER OR NOT RESOLUTION NO. 1O1, SERIES OF 1993 OF
NAUJAN, ORIENTAL MINDORO, WHICH GRANTED ADDITIONAL
ALLOWANCE TO THE MUNICIPAL TRIAL JUDGE OF NAUJAN,
ORIENTAL MINDORO AND INCREASING HIS CURRENT
REPRESENTATION AND TRAVELLING ALLOWANCE (RATA) TO
AN AMOUNT EQUIVALENT TO THAT RECEIVED MONTHLY BY
SANGGUNIANG MEMBERS IN PESOS: ONE THOUSAND SIX
HUNDRED (P1,600.00) EFFECTIVE 1993, IS VALID.
II
WHETHER OR NOT THE POWER OF MUNICIPAL GOVERNMENTS
TO GRANT ADDITIONAL ALLOWANCES AND OTHER BENEFITS
TO NATIONAL GOVERNMENT EMPLOYEES STATIONED IN
THEIR MUNICIPALITY IS VERY EXPLICIT AND UNEQUIVOCAL
UNDER THE LOCAL GOVERNMENT CODE OF 1991
PARTICULARLY SECTION 447 IN RELATION TO SECTIONS 17
AND 22 THEREOF.
III
WHETHER OR NOT THE DEPARTMENT OF BUDGET AND
MANAGEMENT (DBM) CAN, BY THE ISSUANCE OF BUDGET
CIRCULARS, RESTRICT A MUNICIPAL GOVERNMENT FROM
EXERCISING ITS GIVEN LEGISLATIVE POWERS OF PROVIDING
ADDITIONAL ALLOWANCES AND OTHER BENEFITS TO
NATIONAL EMPLOYEES STATIONED OR ASSIGNED TO THEIR
MUNICIPALITY FOR AS LONG AS THEIR FINANCES SO ALLOW.
IV
WHETHER OR NOT THE LOCAL GOVERNMENT CODE OF 1991
PARTICULARLY SECTION 447 (a) (1) (xi) WAS EXPRESSLY OR
IMPLIEDLY REPEALED OR MODIFIED BY REPUBLIC ACT 7645
AND THE GENERAL APPROPRIATIONS ACT OF 1993.
V modify or amend, the provisions of the law it seeks to implement.[11]
WHETHER OR NOT PETITIONER WAS ENTITLED TO RECEIVE
THE ADDITIONAL ALLOWANCES GRANTED TO HIM BY THE
MUNICIPALITY OF NAUJAN, ORIENTAL MINDORO BY VIRTUE OF
ITS RESOLUTION NO. 101, SERIES OF 1993.
POSITION OF COA
Respondent Commission on Audit opposes the grant by
the Municipality of Naujan of the P1,600 monthly allowance to
petitioner Judge Leynes for the reason that the municipality could not
grant RATA to judges in addition to the RATA already received from
following:
1. National Compensation Circular No. 67 (hereafter NCC No. 67)
dated January 1, 1992 of the Department of Budget and Management
(DBM) which provides that (a) the RATA of national officials and
employees shall be payable from the programmed appropriations or
personal services savings of the agency where such officials or
employees draw their salary and (b) no one shall be allowed to collect
RATA from more than one source;
2. the General Appropriations Act of 1993 (RA 7645) which provided
that the RATA of national officials shall be payable from the
programmed appropriations of their respective offices and
3. Local Budget Circular No. 53 (hereafter LBC No. 53) dated
September 1, 1993 of the DBM which prohibits local government units
from granting allowances to national government officials or
employees stationed in their localities when such allowances are also
granted by the national government or are similar to the allowances
granted by the national government to such officials or employees.[10]
POSITION OF PETITIONER
Petitioner judge, on the other hand, asserts that the municipality is
expressly and unequivocally empowered by RA 7160 (the Local
Government Code of 1991) to enact appropriation ordinances granting
allowances and other benefits to judges stationed in its territory.
Section 447(a)(1)(xi) of the Local Government Code of 1991 imposes
only one condition, that is, when the finances of the municipal
government allow. The Code does not impose any other restrictions
in the exercise of such power by the municipality. Petitioner also
asserts that the DBM cannot amend or modify a substantive law like
the Local Government Code of 1991 through mere budget circulars.
Petitioner emphasizes that budget circulars must conform to, not
HISTORY OF GRANT OF
ALLOWANCES TO JUDGES
The power of local government units (LGUs) to grant allowances to
judges stationed in their respective territories was originally provided
by Letter of Instruction No. 1418 dated July 18, 1984 (hereafter LOI
No. 1418):
WHEREAS, the State is cognizant of the need to maintain the
independence of the Judiciary;
WHEREAS, the budgetary allotment of the Judiciary constitutes only
a small percentage of the national budget;
WHEREAS, present economic conditions adversely affected the
livelihood of the members of the Judiciary;
WHEREAS, some local government units are ready, willing and able
to pay additional allowances to Judges of various courts within their
respective territorial jurisdiction;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Republic of the Philippines, do hereby direct:
1. Section 3 of Letter of Implementation No. 96 is hereby amended to
read as follows:
3. The allowances provided in this letter shall be borne exclusively by
the National Government. However, provincial, city and municipal
governments may pay additional allowances to the members and
personnel of the Judiciary assigned in their respective areas out of
available local funds but not to exceed P1,500.00; Provided, that in
Metropolitan Manila, the city and municipal governments therein may
pay additional allowances not exceeding P3,000.00. (emphasis
ours)[12]
On June 25, 1991, the DBM issued Circular No. 91-7 outlining the
guidelines for the continued receipt of allowances by judges
from LGUs:
Consistent with the constitutional provision on the fiscal autonomy of
the judiciary and the policy of the National Government of allowing
greater autonomy to local government units, judges of the Judiciary
are hereby allowed to continue to receive allowances at the same
rates which they have been receiving from the Local Government
Units as of June 30, 1989, subject to the following guidelines:
1. That the continuance of payment of subject allowance to the
recipient judge shall be entirely voluntary and non-compulsory on the
part of the Local Government Units;
2. That payment of the above shall always be subject to the availability
of local funds;
3. That it shall be made only in compliance with the policy of non-
diminution of compensation received by the recipient judge before the
implementation of the salary standardization;
4. That the subject allowance shall be given only to judges who were
receiving the same as of June 30, 1989 and shall be co-terminous with
the incumbent judges; and
5. That the subject allowance shall automatically terminate upon
transfer of a judge from one local government unit to another local
government unit. (emphasis ours)
On October 10, 1991, Congress enacted RA 7160, otherwise known
as the Local Government Code of 1991.[13] The power of the LGUs to
grant allowances and other benefits to judges and other national
officials stationed in their respective territories was expressly provided
in Sections 447(a)(1)(xi), 458(a)(1)(xi) and 468(a)(1)(xi) of the Code.
On March 15, 1994, the DBM issued Local Budget Circular No. 55
(hereafter LBC No. 55) setting out the maximum amount of allowances
that LGUs may grant to judges. For provinces and cities, the amount
should not exceed P1,000 and for municipalities, P700.
On December 3, 2002, we struck down the above circular in Dadole,
et al. vs. COA.[14] We ruled there that the Local Government Code of
1991 clearly provided that LGUs could grant allowances to judges,
subject only to the condition that the finances of the LGUs allowed
it. We held that setting a uniform amount for the grant of allowances
(was) an inappropriate way of enforcing said criterion. Accordingly, we
declared that the DBM exceeded its power of supervision
over LGUs by imposing a prohibition that did not jibe with the Local
Government Code of 1991.[15]
ESTABLISHED PRINCIPLES INVOLVED
From the foregoing history of the power of LGUs to grant allowances
to judges, the following principles should be noted:
1. the power of LGUs to grant allowances to judges has long been
recognized (since 1984 by virtue of LOI No. 1418) and, at present, it
is expressly and unequivocally provided in Sections 447, 458 and 468
of the Local Government Code of 1991;
2. the issuance of DBM Circular No. 91-7 dated June 25, 1991 and
LBC No. 55 dated March 15, 1994 indicates that the national
government recognizes the power of LGUs to grant such allowances
to judges;
3. in Circular No. 91-7, the national government
merely provides the guidelines for the continued receipt of
allowances by judges from LGUs while in LBC No. 55, the national
government merely tries to limit the amount of allowances LGUs may
grant to judges and
4. in the recent case of Dadole, et al. vs. COA, the Court upheld the
constitutionally enshrined autonomy of LGUs to grant allowances to
judges in any amount deemed appropriate, depending on availability
of funds, in accordance with the Local Government Code of 1991.
OUR RULING
We rule in favor of petitioner judge. Respondent COA erred in
opposing the grant of the P1,600 monthly allowance by
the Municipality of Naujan to petitioner Judge Leynes.
DISCUSSION OF OUR RULING
Section 447(a)(1)(xi) of RA 7160, the Local Government Code of
1991, provides:
(a) The sangguniang bayan, as the legislative body of the
municipality, shall enact ordinances, approve resolutions and
appropriate funds for the general welfare of the municipality and its
inhabitants . . ., and shall:
(1) Approve ordinances and pass resolutions necessary for an
efficient and effective municipal government, and in this connection
shall:
xxxxxxxxx
(xi) When the finances of the municipal government allow, provide for
additional allowances and other benefits to judges, prosecutors, public
elementary and high school teachers, and other national government
officials stationed in or assigned to the municipality; (emphasis ours)
Respondent COA, however, contends that the above section has been
repealed, modified or amended by NCC No. 67 dated January 1,
1992, RA 7645 (the General Appropriations Act of 1993) and LBC No.
53 dated September 1, 1993.[16]
It is elementary in statutory construction that an administrative circular
cannot supersede, abrogate, modify or nullify a statute. A statute is
superior to an administrative circular, thus the latter cannot repeal or
amend it.[17] In the present case, NCC No. 67, being a mere
administrative circular, cannot repeal a substantive law like RA 7160.
It is also an elementary principle in statutory construction that repeal
of statutes by implication is not favored, unless it is manifest that the
legislature so intended. The legislature is assumed to know the
existing laws on the subject and cannot be presumed to have enacted
inconsistent or conflicting statutes.[18] Respondent COA alleges that
Section 36 of RA 7645 (the GAA of 1993) repealed Section
447(a)(l)(xi) of RA 7160 (the LGC of 1991). A review of the two laws,
however, shows that this was not so. Section 36 of RA 7645 merely
provided for the different rates of RATA payable to national
government officials or employees, depending on their position, and
stated that these amounts were payable from the programmed
appropriations of the parent agencies to which the concerned national
officials or employees belonged. Furthermore, there was no other
provision in RA 7645 from which a repeal of Section 447(a) (l)(xi) of
RA 7160 could be implied. In the absence, therefore, of any clear
repeal of Section 447(a)(l)(xi) of RA 7160, we cannot presume such
intention on the part of the legislature.
Moreover, the presumption against implied repeal becomes stronger
when, as in this case, one law is special and the other is
general.[19] The principle is expressed in the
maxim generaliaspecialibus non derogant, a general law does not
nullify a specific or special law. The reason for this is that the
legislature, in passing a law of special character, considers and makes
special provisions for the particular circumstances dealt with by the
special law. This being so, the legislature, by adopting a general law
containing provisions repugnant to those of the special law and without
making any mention of its intention to amend or modify such special
law, cannot be deemed to have intended an amendment, repeal or
modification of the latter.[20]
In this case, RA 7160 (the LGC of 1991) is a special law[21] which
exclusively deals with local government units (LGUs), outlining their
powers and functions in consonance with the constitutionally
mandated policy of local autonomy. RA 7645 (the GAA of 1993), on
the other hand, was a general law[22] which outlined the share in the
national fund of all branches of the national government. RA 7645
therefore, being a general law, could not have, by mere implication,
repealed RA 7160. Rather, RA 7160 should be taken as the exception
to RA 7645 in the absence of circumstances warranting a contrary
conclusion.[23]
The controversy actually centers on the seemingly sweeping provision
in NCC No. 67 which states that no one shall be allowed to collect
RATA from more than one source. Does this mean that judges cannot
receive allowances from LGUs in addition to the RATA from the
Supreme Court? For reasons that will hereinafter be discussed, we
answer in the negative.
The pertinent provisions of NCC No. 67 read:
3. Rules and Regulations:
3.1.1 Payment of RATA, whether commutable or reimbursable, shall
be in accordance with the rates prescribed for each of the following
officials and employees and those of equivalent ranks, and the
conditions enumerated under the pertinent sections of the General
Provisions of the annual General Appropriations Act (GAA):
xxxxxxxxx
4. Funding Source:
In all cases, commutable and reimbursable RATA shall be paid from
the amount appropriated for the purpose and other personal services
savings of the agency or project from where the officials and
employees covered under this Circular draw their salaries. No one
shall be allowed to collect RATA from more than one
source. (emphasis ours)
In construing NCC No. 67, we apply the principle in statutory
construction that force and effect should not be narrowly given to
isolated and disjoined clauses of the law but to its spirit, broadly taking
all its provisions together in one rational view. [24] Because a statute is
enacted as a whole and not in parts or sections, that is, one part is as
important as the others, the statute should be construed and given
effect as a whole. A provision or section which is unclear by itself may
be clarified by reading and construing it in relation to the whole
statute.[25]
Taking NCC No. 67 as a whole then, what it seeks to prevent is the
dual collection of RATA by a national official from the budgets of more
than one national agency. We emphasize that the other
source referred to in the prohibition is another national agency. This
can be gleaned from the fact that the sentence no one shall be allowed
to collect RATA from more than one source (the
controversial prohibition) immediately follows the sentence that RATA
shall be paid from the budget of the national agency where the
concerned national officials and employees draw their salaries. The
fact that the other source is another national agency is supported by
RA 7645 (the GAA of 1993) invoked by respondent COA itself and, in
fact, by all subsequent GAAs for that matter, because the GAAs all
essentially provide that (1) the RATA of national officials shall be
payable from the budgets of their respective national agencies and (2)
those officials on detail with other national agencies shall be paid their
RATA only from the budget of their parent national agency:
Section 36, RA 7645, General Appropriations Act of 1993:
Representation and Transportation Allowances. The following officials
and those of equivalent rank as may be determined by the Department
of Budget and Management (DBM) while in the actual performance of
their respective functions are hereby granted monthly commutable
representation and transportation allowances payable from the
programmed appropriations provided for their respective offices, not
exceeding the rates indicated below, which shall apply to each type of
allowance:
xxxxxxxxx
Officials on detail with other offices, including officials of the
Commission of Audit assigned to serve other offices or agencies, shall
be paid the allowance herein authorized from the appropriations of
their parent agencies. (emphasis ours)
Clearly therefore, the prohibition in NCC No. 67 is only against the
dual or multiple collection of RATA by a national official from the
budgets of two or more national agencies. Stated otherwise, when a
national official is on detail with another national agency, he should
get his RATA only from his parent national agency and not from the
other national agency he is detailed to.
Since the other source referred in the controversial prohibition
is another national agency, said prohibition clearly does not apply
to LGUs like the Municipality of Naujan. National agency of course
refers to the different offices, bureaus and departments comprising the
national government. The budgets of these departments or offices are
fixed annually by Congress in the General Appropriations Act.[26] An
LGU is obviously not a national agency. Its annual budget is fixed by
its own legislative council
(Sangguniang Bayan, Panlungsod or Panlalawigan), not by
Congress. Without doubt, NCC No. 67 does not apply to LGUs.
The prohibition in NCC No. 67 is in fact an administrative tool of the
DBM to prevent the much-abused practice of multiple allowances, thus
standardizing the grant of RATA by national agencies. Thus, the
purpose clause of NCC No. 67 reads:
This Circular is being issued to ensure uniformity and consistency of
actions on claims for representation and transportation allowance
(RATA) which is primarily granted by law to national government
officials and employees to cover expenses incurred in the discharge
or performance of their duties and responsibilities.
By no stretch of the imagination can NCC No. 67 be construed as
nullifying the power of LGUs to grant allowances to judges under the
Local Government Code of 1991. It was issued primarily to make the
grant of RATA to national officials under the national budget uniform.
In other words, it applies only to the national funds administered by
the DBM, not the local funds of LGUs.
To rule against the power of LGUs to grant allowances to judges as
what respondent COA would like us to do will subvert the principle of
local autonomy zealously guaranteed by the Constitution.[27] The Local
Government Code of 1991 was specially promulgated by Congress to
ensure the autonomy of local governments as mandated by the
Constitution. By upholding, in the present case, the power of LGUs to
grant allowances to judges and leaving to their discretion the amount
of allowances they may want to grant, depending on the availability of
local funds, we ensure the genuine and meaningful local autonomy
of LGUs.
We now discuss the next contention of respondent COA: that the
resolution of the Sangguniang Bayan of Naujan granting the P1,600
monthly allowance to petitioner judge was null and void because it
failed to comply with LBC No. 53 dated September 1, 1993:
Sec. 3 Allowances. ─ LGUs may grant allowances/additional
compensation to the national government officials/employees
assigned to their locality at rates authorized by law, rules and
regulations and subject to the following preconditions:
a. That the annual income or finances of the municipality, city or
province as certified by the Accountant concerned will allow the grant
of the allowances/additional compensation without exceeding the
general limitations for personal services under Section 325 of RA
7160;
b. That the budgetary requirements under Section 324 of RA 7160
including the full requirement of RA 6758 have been satisfied and
provided fully in the budget as certified by the Budget Officer and COA
representative in the LGU concerned;
c. That the LGU has fully implemented the devolution of
personnel/functions in accordance with the provisions of RA 7160;
d. That the LGU has already created mandatory positions prescribed
in RA 7160.
e. That similar allowances/additional compensation are not granted by
the national government to the officials/employees assigned to the
LGU.
Though LBC No. 53 of the DBM may be considered within the ambit
of the President's power of general supervision over LGUs,[28] we rule
that Section 3, paragraph (e) thereof is invalid. RA 7160, the Local
Government Code of 1991, clearly provides that provincial, city and
municipal governments may grant allowances to judges as long as
their finances allow. Section 3, paragraph (e) of LBC No. 53,
by outrightly prohibiting LGUs from granting allowances to judges
whenever such allowances are (1) also granted by the national
government or (2) similar to the allowances granted by the national
government, violates Section 447(a)(l)(xi) of the Local Government
Code of 1991.[29] As already stated, a circular must conform to the law
it seeks to implement and should not modify or amend it.[30]
Moreover, by prohibiting LGUs from granting allowances similar to the
allowances granted by the national government, Section 3 (e) of LBC
No. 53 practically prohibits LGUs from granting allowances to judges
and, in effect, totally nullifies their statutory power to do so. Being
unduly restrictive therefore of the statutory power of LGUs to grant
allowances to judges and being violative of their autonomy
guaranteed by the Constitution, Section 3, paragraph (e) of LBC No.
53 is hereby declared null and void.
Paragraphs (a) to (d) of said circular, however, are valid as they are in
accordance with Sections 324[31] and 325[32] of the Local Government
Code of 1991; these respectively provide for the budgetary
requirements and general limitations on the use of provincial, city and
municipal funds. Paragraphs (a) to (d) are proper guidelines for the
condition provided in Sections 447, 458 and 468 of the Local
Government Code of 1991 that LGUs may grant allowances to judges
if their funds allow.[33]
Respondent COA also argues that Resolution No. 101 of
the Sangguniang Bayan of Naujan failed to comply with paragraphs
(a) to (d) of LBC No. 53, thus it was null and void.
The argument is misplaced.
Guidelines (a) to (d) were met when the Sangguniang Panlalawigan of
Oriental Mindoro approved Resolution No. 101 of
the Sangguniang Bayan of Naujan granting the P1,600 monthly
allowance to petitioner judge as well as the corresponding budgets of
the municipality providing for the said monthly allowance to petitioner
judge. Under Section 327 of the Local Government Code of 1991,
the Sangguniang Panlalawigan was specifically tasked to review the
appropriation ordinances of its component municipalities to ensure
compliance with Sections 324 and 325 of the Code. Considering said
duty of the Sangguniang Panlalawigan, we will assume, in the
absence of proof to the contrary, that
the Sangguniang Panlalawigan of Oriental Mindoroperformed what
the law required it to do, that is, review the resolution and the
corresponding budgets of the Municipality of Naujan to make sure that
they complied with Sections 324 and 325 of the Code.[34] We presume
the regularity of the Sangguniang Panlalawigans official act.
Moreover, it is well-settled that an ordinance must be presumed valid
in the absence of evidence showing that it is not in accordance with
the law.[35] Respondent COA had the burden of proving that
Resolution No. 101 of the Sangguniang Bayan of Naujan did not
comply with the condition provided in Section 447 of the Code, the
budgetary requirements and general limitations on the use of
municipal funds provided in Sections 324 and 325 of the Code and the
implementing guidelines issued by the DBM, i.e., paragraphs (a) to
(d), Section 3 of LBC No. 53. Respondent COA also had the burden
of showing that the Sangguniang Panlalawigan of
Oriental Mindoro erroneously approved said resolution despite its
non-compliance with the requirements of the law. It failed to discharge
such burden. On the contrary, we find that the resolution of
the Municipality of Naujan granting the P1,600 monthly allowance to
petitioner judge fully complied with the law. Thus, we uphold its
validity.
In sum, we hereby affirm the power of the Municipality of Naujan to
grant the questioned allowance to petitioner Judge Leynes in
accordance with the constitutionally mandated policy of local
autonomy and the provisions of the Local Government Code of 1991.
We also sustain the validity of Resolution No. 101, Series of 1993, of
the Sangguniang Bayan of Naujan for being in accordance with the
law.
WHEREFORE, the petition is hereby GRANTED. The assailed
decision dated September 14, 1999 of the Commission of Audit is
hereby SET ASIDE and Section 3, paragraph (e) of LBC No. 53 is
hereby declared NULL and VOID.
No costs.
SO ORDERED.
Davide, Jr., C.J., Puno, Vitug, Panganiban, Quisumbing, Ynares-
Santiago, Sandoval-Gutierrez, Carpio, Austria-Martinez, Carpio-
Morales, Callejo, Sr., Azcuna, and Tinga, JJ., concur.