GUDANI VS.

SENGA

GR No. 170165, August 15, 2006 [Article VI Sec. 22: Congress' Power of Inquiry;
Legislative Investigation]

FACTS:
The Senate invited Gen. Gudani and Lt. Col. Balutan to clarify allegations of 2004
election fraud and the surfacing of the “Hello Garci” tapes. PGMA issued EO 464
enjoining officials of the executive department including the military establishment
from appearing in any legislative inquiry without her consent. AFP Chief of Staff
Gen. Senga issued a Memorandum, prohibiting Gen. Gudani, Col. Balutan et
al from appearing before the Senate Committee without Presidential
approval. However, the two appeared before the Senate in spite the fact that a
directive has been given to them. As a result, the two were relieved of their
assignments for allegedly violating the Articles of War and the time honoured
principle of the “Chain of Command.” Gen. Senga ordered them to be subjected
before the General Court Martial proceedings for willfuly violating an order of a
superior officer.

ISSUE:
Whether or not the President has the authority to issue an order to the members of
the AFP preventing them from testifying before a legislative inquiry.

RULING:
Yes. The SC hold that President has constitutional authority to do so, by virtue of
her power as commander-in-chief, and that as a consequence a military officer who
defies such injunction is liable under military justice. At the same time, any
chamber of Congress which seeks the appearance before it of a military officer
against the consent of the President has adequate remedies under law to compel
such attendance. Any military official whom Congress summons to testify before it
may be compelled to do so by the President. If the President is not so inclined, the
President may be commanded by judicial order to compel the attendance of the
military officer. Final judicial orders have the force of the law of the land which the
President has the duty to faithfully execute.
SC ruled in Senate v. Ermita that the President may not issue a blanket requirement
of prior consent on executive officials summoned by the legislature to attend a
congressional hearing. In doing so, the Court recognized the considerable
limitations on executive privilege, and affirmed that the privilege must be formally
invoked on specified grounds. However, the ability of the President to prevent
military officers from testifying before Congress does not turn on executive
privilege, but on the Chief Executive’s power as commander-in-chief to control the
actions and speech of members of the armed forces. The President’s prerogatives
as commander-in-chief are not hampered by the same limitations as in executive
privilege.

At the same time, the refusal of the President to allow members of the military to
appear before Congress is still subject to judicial relief. The Constitution itself
recognizes as one of the legislature’s functions is the conduct of inquiries in aid of
legislation. Inasmuch as it is ill-advised for Congress to interfere with the
President’s power as commander-in-chief, it is similarly detrimental for the
President to unduly interfere with Congress’s right to conduct legislative inquiries.
The impasse did not come to pass in this petition, since petitioners testified anyway
despite the presidential prohibition. Yet the Court is aware that with its
pronouncement today that the President has the right to require prior consent from
members of the armed forces, the clash may soon loom or actualize.

The duty falls on the shoulders of the President, as commander-in-chief, to

authorize the appearance of the military officers before Congress. Even if the
President has earlier disagreed with the notion of officers appearing before the
legislature to testify, the Chief Executive is nonetheless obliged to comply with the
final orders of the courts.

ROMULO NERI VS SENATE COMMITTEE ON ACCOUNTABILITY of Public

Officers G.R No. 180643
In April April 2007, DOTC entered into a contract with Zhong Xing
Telecommunications Equipment (ZTE) for the supply of equipment and services for
the National Broadband Network (NBN) Project in the amount of $329,481,290.00
(approximately P16 Billion Pesos). The Project was to be financed by the People’s
Republic of China. The Senate passed various resolutions relative to the NBN deal.
On the other hand, Joe De Venecia issued a statement that several high executive
officials and power brokers were using their influence to push the approval of the
NBN Project by the NEDA.
Neri, the head of NEDA, was then invited to testify before the Senate Blue Ribbon.
He appeared in one hearing wherein he was interrogated for 11 hrs and during
which he admitted that Abalos of COMELEC tried to bribe him with P200M in
exchange for his approval of the NBN project. He further narrated that he informed
President Arroyo about the bribery attempt and that she instructed him not to
accept the bribe. However, when probed further on what they discussed about the
NBN Project, Neri refused to answer, invoking “executive privilege“. In particular,
he refused to answer the questions on (a) whether or not President Arroyo followed
up the NBN Project, (b) whether or not she directed him to prioritize it, and (c)
whether or not she directed him to approve. He later refused to attend the other
hearings and Ermita sent a letter to the SBRC averring that the communications
between GMA and Neri is privileged and that the jurisprudence laid down in Senate
vs Ermita be applied. The SBRC cited Neri for contempt.
ISSUE: Whether or not the three questions sought by the SBRC to be answered
falls under executive privilege.
HELD: The oversight function of Congress may be facilitated by compulsory
process only to the extent that it is performed in pursuit of legislation.
The communications elicited by the three (3) questions are covered by
the presidential communications privilege.
1st, the communications relate to a “quintessential and non-delegable
power” of the President, i.e. the power to enter into an executive agreement with
other countries. This authority of the President to enter into executive
agreements without the concurrence of the Legislature has traditionally been
recognized in Philippine jurisprudence.
2nd, the communications are “received” by a close advisor of the President. Under
the “operational proximity” test, petitioner can be considered a close advisor,
being a member of President Arroyo’s cabinet. And
3rd, there is no adequate showing of a compelling need that would justify the
limitation of the privilege and of the unavailability of the information elsewhere
by an appropriate investigating authority.

REGHIS M. ROMERO II v. SENATOR JINGGOY E. ESTRADA, GR No. 174105,

2009-04-02
Facts:
petitioner Reghis Romero II, as owner of R-II Builders, Inc., received from the
Committee an invitation,[1] signed by the Legislative Committee Secretary,... the
Committee on Labor, Employment and Human Resources Development chaired by
Sen. Jinggoy Ejercito Estrada will conduct a public hearing at 1:00 p.m. on the 23rd
day of August 2006 at
The inquiry/investigation is specifically intended to aid the Senate in the review and
possible amendments to the pertinent provisions of R.A. 8042, "the Migrant
Workers Act"... and to craft a much needed legislation relative to the stated subject
matter... petitioner Romero II requested to be excused from appearing and
testifying before the Committee at its scheduled hearings of the subject matter and
purpose of Philippine Senate (PS) Resolution Nos. 537 and 543... his request, being
unmeritorious, was denied
Senator Jinggoy Estrada, as Chairperson of the Committee, caused the service of a
subpoena ad testificandum[4] on petitioner Romero II... directing him to appear
and testify before the Committee at its hearing on September 4, 2006 relative to
the aforesaid Senate resolutions.
On August 30, 2006, petitioners filed the instant petition, docketed as G.R. No.
174105, seeking to bar the Committee from continuing with its inquiry and to
enjoin it from compelling petitioners to appear before it pursuant to the invitations
thus issued.
observing that the Senate's motives in calling for an investigation in aid of...
legislation were a political question. T
Respondents averred that the subject matter of the investigation focused on the
alleged dissipation of OWWA funds and the purpose of the probe was to aid the
Senate determine the propriety of amending Republic Act No. 8042 or The Migrant
Workers Act of 1995 and enacting... laws to protect OWWA funds in the future.
Issues:
since the investigation has been intended to ascertain petitioners' criminal liability
for plunder, it is... not in aid of legislation
Whether or not the subject matter of the Committee's inquiry is sub judice
Ruling:
The same directors and officers contend that the Senate is barred from inquiring
into the same issues being litigated before the Court of Appeals and the
Sandiganbayan. Suffice it to state that the Senate Rules of Procedure Governing
Inquiries in Aid of
Legislation provide that the filing or pendency of any prosecution or administrative
action should not stop or abate any inquiry to carry out a legislative purpose...
inquiries in aid of legislation are, inter alia, undertaken as tools to enable the
legislative body to gather information and, thus, legislate wisely and effectively;[17]
and to determine whether there is a need... to improve existing laws or enact new
or remedial legislation,[18] albeit the inquiry need not result in any potential
legislation.
On-going judicial proceedings do not preclude congressional hearings in aid of
legislation.
[T]he mere filing of a criminal or an administrative complaint before a court or
quasi-judicial body should not automatically bar the conduct of legislative
investigation. Otherwise, it would be extremely easy to subvert any intended
inquiry by Congress through the... convenient ploy of instituting a criminal or an
administrative complaint. Surely, the exercise of sovereign legislative authority, of
which the power of legislative inquiry is an essential component, cannot be made
subordinate to a criminal or administrative investigation.
all pending matters and proceedings, i.e., unpassed bills and even legislative
investigations, of the Senate of a particular Congress are considered terminated
upon the expiration of that Congress and it is merely optional... on the Senate of
the succeeding Congress to take up such unfinished matters, not in the same status,
but as if presented for the first time... when the Committee issued invitations and
subpoenas to petitioners to appear before it in connection with its investigation of
the aforementioned... investments, it did so pursuant to its authority to conduct
inquiries in aid of legislation. This is clearly provided in Art. VI, Sec. 21 of the
Constitution, which was quoted at the outset. And the Court has no authority to
prohibit a Senate committee from requiring persons to... appear and testify before
it in connection with an inquiry in aid of legislation in accordance with its duly
published rules of procedure.
The... unremitting obligation of every citizen is to respond to subpoenae, to respect
the dignity of the Congress and its Committees, and to testify fully with respect to
matters within the realm of proper investigation.[22] (Emphasis... supplied.)...
there is no more investigation to be continued by virtue of said resolutions; there is
no more investigation the constitutionality of which is subject to a challenge.
WHEREFORE, the petition is DENIED

ARTURO TOLENTINO VS SECRETARY OF FINANCE

235 SCRA 630 (1994) – 249 SCRA 635 (1995) – Political Law – Origination of
Revenue Bills – EVAT – Amendment by Substitution
Arturo Tolentino et al are questioning the constitutionality of RA 7716 otherwise
known as the Expanded Value Added Tax (EVAT) Law. Tolentino averred that this
revenue bill did not exclusively originate from the House of Representatives as
required by Section 24, Article 6 of the Constitution. Even though RA 7716
originated as HB 11197 and that it passed the 3 readings in the HoR, the same did
not complete the 3 readings in Senate for after the 1st reading it was referred to
the Senate Ways & Means Committee thereafter Senate passed its own version
known as Senate Bill 1630. Tolentino averred that what Senate could have done is
amend HB 11197 by striking out its text and substituting it with the text of SB 1630
in that way “the bill remains a House Bill and the Senate version just becomes the
text (only the text) of the HB”. (It’s ironic however to note that Tolentino and
co-petitioner Raul Roco even signed the said Senate Bill.)
ISSUE: Whether or not the EVAT law is procedurally infirm.
HELD: No. By a 9-6 vote, the Supreme Court rejected the challenge, holding that
such consolidation was consistent with the power of the Senate to propose or
concur with amendments to the version originated in the HoR. What the
Constitution simply means, according to the 9 justices, is that the initiative must
come from the HoR. Note also that there were several instances before where
Senate passed its own version rather than having the HoR version as far as revenue
and other such bills are concerned. This practice of amendment by substitution has
always been accepted. The proposition of Tolentino concerns a mere matter of
form. There is no showing that it would make a significant difference if Senate were
to adopt his over what has been done.

HEHERSON ALVAREZ VS TEOFISTO GUINGONA, JR.

252 SCRA 695 – Political Law – Municipal Corporation – LGU Requirement – Income
– Inclusion of IRAs
In April 1993, House Bill 8817 (An Act Converting the Municipality of Santiago into
an Independent Component City to be known as the City of Santiago) was passed
in the House of Representatives.
In May 1993, a Senate Bill (SB 1243) of similar title and content with that of HB
8817 was introduced in the Senate.
In January 1994, HB 8817 was transmitted to the Senate. In February 1994, the
Senate conducted a public hearing on SB 1243. In March 1994, the Senate
Committee on Local Government rolled out its recommendation for approval of HB
8817 as it was totally the same with SB 1243. Eventually, HB 8817 became a law
(RA 7720).
Now Senator Heherson Alvarez et al are assailing the constitutionality of the said
law on the ground that the bill creating the law did not originate from the lower
house and that City of Santiago was not able to comply with the income of at least
P20M per annum in order for it to be a city. That in the computation of the reported
average income of P20,974,581.97, the IRA was included which should not be.
ISSUES:
1. Whether or not RA 7720 is invalid for not being originally from the HOR.
2. Whether or not the IRA should be included in the computation of an LGU’s
income.
HELD: 1. NO. The house bill was filed first before the senate bill as the record
shows. Further, the Senate held in abeyance any hearing on the said SB while the
HB was on its 1st, 2nd and 3rd reading in the HOR. The Senate only conducted its
1st hearing on the said SB one month after the HB was transmitted to the Senate
(in anticipation of the said HB as well).
2. YES. The IRA should be added in the computation of an LGU’s average
annual income as was done in the case at bar. The IRAs are items of income
because they form part of the gross accretion of the funds of the local government
unit. The IRAs regularly and automatically accrue to the local treasury without need
of any further action on the part of the local government unit. They thus constitute
income which the local government can invariably rely upon as the source of much
needed funds.
To reiterate, IRAs are a regular, recurring item of income; nil is there a basis, too,
to classify the same as a special fund or transfer, since IRAs have a technical
definition and meaning all its own as used in the Local Government Code that
unequivocally makes it distinct from special funds or transfers referred to when the
Code speaks of “funding support from the national government, its
instrumentalities and government-owned-or-controlled corporations.

Garcia vs Mata Digest

Garcia vs Mata

G.R. No. L-33713 July 30, 1975

Facts:

The donation of the property to the government to make the property public does
not cure the constitutional defect. The fact that the law was passed when the said
property was still a private property cannot be ignored. “In accordance with the
rule that the taxing power must be exercised for public purposes only, money
raised by taxation can be expanded only for public purposes and not for the
advantage of private individuals.” Inasmuch as the land on which the projected
feeder roads were to be constructed belonged then to Zulueta, the result is that
said appropriation sought a private purpose, and, hence, was null and void.
Issue:

Whether RA 1600 is valid. Does it contain rider in an appropriation bill?

Held:

The incongruity and irrelevancy are already evident. Section 11 of RA 1600 fails to
disclose the relevance to any appropriation item. RA 1600 is an appropriation law
for the operation of government while Section 11 refers to a fundamental
governmental policy of calling to active duty and the reversion of inactive statute
of reserve officers in the AFP.

Hence it was A NON-APPROPRIATION ITEM INSERTED IN AN APPROPRIATION

MEASURE, in violation of the constitutional prohibition against RIDERS to the
general appropriation act. It was indeed a new and completely unrelated provision
attached to the GAA.

It also violates the rule on one-bill, one subject. The subject to be considered must
be expressed in the title of the act. When an act contains provisions which are
clearly not embraced in the subject of the act, as expressed in the title, such
provisions are void, inoperative and without effect.

SECTION 11 is unconstitutional. Garcia cannot compel the AFP to reinstate him.

DEMETRIO DEMETRIA VS MANUEL ALBA

148 SCRA 208 – Political Law – Transfer of Funds – Power of the President to
Realign Funds
Demetrio Demetria et al as taxpayers and members of the Batasan Pambansa
sought to prohibit Manuel Alba, then Minister of the Budget, from disbursing funds
pursuant to Presidential Decree No. 1177 or the Budget Reform Decree of 1977.
Demetria assailed the constitutionality of paragraph 1, Section 44 of the said PD.
This Section provides that:
“The President shall have the authority to transfer any fund,
appropriated for the different departments, bureaus, offices and
agencies of the Executive Department, which are included in the
General Appropriations Act, to any program, project or activity of
any department, bureau, or office included in the General
Appropriations Act or approved after its enactment.”
Demetria averred that this is unconstitutional for it violates the 1973 Constitution.
ISSUE: Whether or not Paragraph 1, Section 44, of PD 1177 is constitutional.
HELD: No. The Constitution provides that no law shall be passed authorizing any
transfer of appropriations, however, the President, the Prime Minister, the Speaker,
the Chief Justice of the Supreme Court, and the heads of constitutional
commissions may by law be authorized to augment any item in the general
appropriations law for their respective offices from savings in other items of their
respective appropriations.
However, paragraph 1 of Section 44 of PD 1177 unduly overextends the privilege
granted under the Constitution. It empowers the President to indiscriminately
transfer funds from one department, bureau, office or agency of the Executive
Department to any program, project or activity of any department, bureau or
office included in the General Appropriations Act or approved after its
enactment, without regard as to whether or not the funds to be
transferred are actually savings in the item from which the same are to
be taken, or whether or not the transfer is for the purpose of augmenting the
item to which said transfer is to be made. It does not only completely disregard the
standards set in the fundamental law, thereby amounting to an undue delegation
of legislative powers, but likewise goes beyond the tenor thereof. Indeed, such
constitutional infirmities render the provision in question null and void.
But it should be noted, transfers of savings within one department from one item
to another in the GAA may be allowed by law in the interest of expediency and
efficiency. There is no transfer from one department to another here.

PHILCONSA VS ENRIQUEZ
Posted by kaye lee on 9:14 AM

G.R. No. 113105 August 19 1994 [Article VI Section 25 - Appropriations]

FACTS:
Petitioners assailed the validity of RA 7663 or General Appropriations Act of 1994.
GAA contains a special provision that allows any members of the Congress the
REalignment of Allocation for Operational Expenses, provided that the total of said
allocation is not exceeded.
Philconsa claims that only the Senate President and the Speaker of the House of
Representatives are the ones authorized under the Constitution to realign savings,
not the individual members of Congress themselves.
President signed the law, but Vetoes certain provisions of the law and imposed
certain provisional conditions: that the AFP Chief of Staff is authorized to use
savings to augment the pension funds under the Retirement and Separation
Benefits of the AFP.

ISSUE:
Whether or not RA 7663 is violative of Article VI, Section 25 (5) of 1987 Constitution.

RULING:
Yes. Only the Senate President and the Speaker of the House are allowed to
approve the realignment.
Furthermore, two conditions must be met: 1) the funds to be realigned are actually
savings, and 2) the transfer is for the purpose of augmenting the items of
expenditures to which said transfer to be made.

As to the certain condition given to the AFP Chief of Staff, it is violative of of

Sections 25(5) and 29(1) of the Article VI of the Constitution. The list of those who
may be authorized to transfer funds is exclusive. the AFP Chief of Staff may not be
given authority.

PHILIPPINE CONSTITUTION ASSOCIATION, INC. VS PEDRO GIMENEZ

15 SCRA 479 – Political Law – Salaries of the Members of Congress – Other

Emolument
Philippine Constitution Association, Inc (PHILCONSA) assails the validity of
Republic Act No. 3836 insofar as the same allows retirement gratuity and
commutation of vacation and sick leave to Senators and Representatives.
PHILCONSA now seeks to enjoin Pedor Gimenez, the Auditor General, from
disbursing funds therefor.
According to PHILCONSA, the provision on retirement gratuity is an attempt to
circumvent the Constitutional ban on increase of salaries of the members of
Congress during their term of office, contrary to the provisions of Article VI,
Section 14 of the Constitution. The same provision constitutes “selfish class
legislation” because it allows members and officers of Congress to retire after
twelve (12) years of service and gives them a gratuity equivalent to one year
salary for every four years of service, which is not refundable in case of
reinstatement or re-election of the retiree, while all other officers and employees
of the government can retire only after at least twenty (20) years of service and
are given a gratuity which is only equivalent to one month salary for every year of
service, which, in any case, cannot exceed 24 months. The provision on vacation
and sick leave, commutable at the highest rate received, insofar as members of
Congress are concerned, is another attempt of the legislator to further increase
their compensation in violation of the Constitution.
The Solicitor General, arguing for Congress, averred that the grant of retirement or
pension benefits under Republic Act No. 3836 to the officers does not constitute
“forbidden compensation” within the meaning of Section 14 of Article VI of the
Philippine Constitution. The law in question does not constitute class legislation.
The payment of commutable vacation and sick leave benefits under the said Act is
merely “in the nature of a basis for computing the gratuity due each retiring
member” and, therefore, is not an indirect scheme to increase their salary.
ISSUE: Whether or not RA 3836 is constitutional.
HELD: No, the said law is unconstitutional. Section 14, Article VI, of the
Constitution, provides:
The senators and the Members of the House of Representatives shall,
unless otherwise provided by law, receive an annual compensation of
seven thousand two hundred pesos each, including per diems and
other emoluments or allowances, and exclusive only of travelling
expenses to and from their respective district in the case of Members
of the House of Representatives and to and from their places of
residence in the case of Senators, when attending sessions of the
Congress. No increase in said compensation shall take effect until
after the expiration of the full term of all the Members of the Senate
and of the House of Representatives approving such increase. Until
otherwise provided by law, the President of the Senate and the
Speaker of the House of Representatives shall each receive an annual
compensation of sixteen thousand pesos.
When the Constitutional Convention first determined the compensation for the
Members of Congress, the amount fixed by it was only P5,000.00 per annum but it
embodies a special proviso which reads as follows:
 No increase in said compensation shall take effect until after the
expiration of the full term of all the members of the National
Assembly elected subsequent to approval of such increase.
In other words, under the original constitutional provision regarding the power of
the National Assembly to increase the salaries of its members, no increase would
take effect until after the expiration of the full term of the members of the
Assembly elected subsequent to the approval of such increase.
The Constitutional provision in the aforementioned Section 14, Article VI, includes
in the term compensation “other emoluments”.
“Emolument” is “the profit arising from office or employment; that which is
received as compensation for services or which is annexed to the possession of an
office, as salary, fees and perquisites.”
It is evident that retirement benefit is a form or another species of emolument,
because it is a part of compensation for services of one possessing any office.
RA 3836 provides for an increase in the emoluments of Senators and Members of
the House of Representatives, to take effect upon the approval of said Act, which
was on June 22, 1963. Retirement benefits were immediately available thereunder,
without awaiting the expiration of the full term of all the Members of the Senate
and the House of Representatives approving such increase. Such provision clearly
runs counter to the prohibition in Article VI, Section 14 of the Constitution. RA
3836 is hereby declared unconstitutional by the SC.

VALENTIN TIO VS VIDEOGRAM REGULATORY BOARD

151 SCRA 208 – Political Law – The Embrace of Only One Subject by a Bill
Delegation of Power – Delegation to Administrative Bodies
In 1985, Presidential Dedree No. 1987 entitled “An Act Creating the Videogram
Regulatory Board” was enacted which gave broad powers to the VRB to regulate
and supervise the videogram industry. The said law sought to minimize the
economic effects of piracy. There was a need to regulate the sale of videograms as
it has adverse effects to the movie industry. The proliferation of videograms has
significantly lessened the revenue being acquired from the movie industry, and
that such loss may be recovered if videograms are to be taxed. Section 10 of the
PD imposes a 30% tax on the gross receipts payable to the LGUs.
In 1986, Valentin Tio assailed the said PD as he averred that it is unconstitutional
on the following grounds:
1. Section 10 thereof, which imposed the 30% tax on gross receipts, is a rider and
is not germane to the subject matter of the law.
2. There is also undue delegation of legislative power to the VRB, an administrative
body, because the law allowed the VRB to deputize, upon its discretion, other
government agencies to assist the VRB in enforcing the said PD.
ISSUE: Whether or not the Valentin Tio’s arguments are correct.
HELD: No.
1. The Constitutional requirement that “every bill shall embrace only one subject
which shall be expressed in the title thereof” is sufficiently complied with if the title
be comprehensive enough to include the general purpose which a statute seeks to
achieve. In the case at bar, the questioned provision is allied and germane to, and
is reasonably necessary for the accomplishment of, the general object of the PD,
which is the regulation of the video industry through the VRB as expressed in its
title. The tax provision is not inconsistent with, nor foreign to that general subject
and title. As a tool for regulation it is simply one of the regulatory and control
mechanisms scattered throughout the PD.
2. There is no undue delegation of legislative powers to the VRB. VRB is not being
tasked to legislate. What was conferred to the VRB was the authority or discretion
to seek assistance in the execution, enforcement, and implementation of the
law. Besides, in the very language of the decree, the authority of the BOARD to
solicit such assistance is for a “fixed and limited period” with the deputized
agencies concerned being “subject to the direction and control of the [VRB].”

Philippine Judges Association vs Pete Prado

227 SCRA 703 – Political Law – Constitutional Law – Bill of Rights – Equal Protection
– Franking Privilege of the Judiciary
Section 35 of Republic Act No. 7354 authorized the Philippine Postal Corporation
(PPC) to withdraw franking privileges from certain government agencies. Franking
privilege is a privilege granted to certain agencies to make use of the Philippine
postal service free of charge.
In 1992, a study came about where it was determined that the bulk of the
expenditure of the postal service comes from the judiciary’s use of the postal
service (issuance of court processes). Hence, the postal service recommended that
the franking privilege be withdrawn from the judiciary. AS a result, the PPC issued
a circular withdrawing the said franking privilege.
The Philippine Judges Association (PJA) assailed the circular and questioned the
validity of Section 35 of RA 7354. PJA claimed that the said provision is violative of
the equal protection clause.
ISSUE: Whether or not the withdrawal of the franking privilege from the judiciary
is valid.
HELD: No. The Supreme Court ruled that there is a violation of the equal
protection clause. The judiciary needs the franking privilege so badly as it is vital to
its operation. Evident to that need is the high expense allotted to the judiciary’s
franking needs. The Postmaster cannot be sustained in contending that the
removal of the franking privilege from the judiciary is in order to cut expenditure.
This is untenable for if the Postmaster would intend to cut expenditure by
removing the franking privilege of the judiciary, then they should have removed
the franking privilege all at once from all the other departments. If the problem is
the loss of revenues from the franking privilege, the remedy is to withdraw it
altogether from all agencies of the government, including those who do not need it.
The problem is not solved by retaining it for some and withdrawing it from others,
especially where there is no substantial distinction between those favored, which
may or may not need it at all, and the Judiciary, which definitely needs it. The
problem is not solved by violating the Constitution.
The equal protection clause does not require the universal application of the laws
on all persons or things without distinction (it is true that the postmaster withdraw
the franking privileges from other agencies of the government but still, the
judiciary is different because its operation largely relies on the mailing of court
processes). This might in fact sometimes result in unequal protection, as where,
for example, a law prohibiting mature books to all persons, regardless of age,
would benefit the morals of the youth but violate the liberty of adults. What the
clause requires is equality among equals as determined according to a valid
classification. By classification is meant the grouping of persons or things similar to
each other in certain particulars and different from all others in these same
particulars.
In lumping the Judiciary with the other offices from which the franking privilege
has been withdrawn, Sec 35 has placed the courts of justice in a category to which
it does not belong. If it recognizes the need of the President of the Philippines and
the members of Congress for the franking privilege, there is no reason why it
should not recognize a similar and in fact greater need on the part of the Judiciary
for such privilege.

Arturo Tolentino vs Secretary of Finance

235 SCRA 630 (1994) – 249 SCRA 635 (1995) – Political Law – Origination of
Revenue Bills – EVAT – Amendment by Substitution
Arturo Tolentino et al are questioning the constitutionality of RA 7716 otherwise
known as the Expanded Value Added Tax (EVAT) Law. Tolentino averred that this
revenue bill did not exclusively originate from the House of Representatives as
required by Section 24, Article 6 of the Constitution. Even though RA 7716
originated as HB 11197 and that it passed the 3 readings in the HoR, the same did
not complete the 3 readings in Senate for after the 1st reading it was referred to
the Senate Ways & Means Committee thereafter Senate passed its own version
known as Senate Bill 1630. Tolentino averred that what Senate could have done is
amend HB 11197 by striking out its text and substituting it with the text of SB 1630
in that way “the bill remains a House Bill and the Senate version just becomes the
text (only the text) of the HB”. (It’s ironic however to note that Tolentino and
co-petitioner Raul Roco even signed the said Senate Bill.)
ISSUE: Whether or not the EVAT law is procedurally infirm.
HELD: No. By a 9-6 vote, the Supreme Court rejected the challenge, holding that
such consolidation was consistent with the power of the Senate to propose or
concur with amendments to the version originated in the HoR. What the
Constitution simply means, according to the 9 justices, is that the initiative must
come from the HoR. Note also that there were several instances before where
Senate passed its own version rather than having the HoR version as far as
revenue and other such bills are concerned. This practice of amendment by
substitution has always been accepted. The proposition of Tolentino concerns a
mere matter of form. There is no showing that it would make a significant
difference if Senate were to adopt his over what has been done.

Tan vs. Del Rosario

237 SCRA 324

Facts:

Petitioners challenge the constitutionality of RA 7496 or the

simplified income taxation scheme (SNIT) under Arts (26) and (28) and III (1).
The SNIT contained changes in the tax schedules and different treatment in the
professionals which petitioners assail as unconstitutional for being isolative of the
equal protection clause in the constitution.

Issue:
Is the contention meritorious?

Ruling:

No. uniformity of taxation, like the hindered concept of equal

protection, merely require that all subjects or objects of taxation similarly situated
are to be treated alike both privileges and liabilities. Uniformity, does not offend
classification as long as it rest on substantial distinctions, it is germane to the
purpose of the law. It is not limited to existing only and must apply equally to all
members of the same class.

The legislative intent is to increasingly shift the income tax

system towards the scheduled approach in taxation of individual taxpayers and
maintain the present global treatment on taxable corporations. This classification
is neither arbitrary nor inappropriate.

NEPTALI GONZALES VS MACARAIG

Political Law – Veto Power – Inappropriate Provision in an Appropriation Bill

Gonzales, together w/ 22 other senators, assailed the constitutionality of Cory’s
veto of Section 55 of the 1989 Appropriations Bill (Sec 55 FY ’89, and subsequently
of its counterpart Section 16 of the 1990 Appropriations Bill (Sec 16 FY ’90).
Gonzalez averred the following: (1) the President’s line-veto power as regards
appropriation bills is limited to item/s and does not cover provision/s; therefore,
she exceeded her authority when she vetoed Section 55 (FY ’89) and Section 16
(FY ’90) which are provision; (2) when the President objects to a provision of an
appropriation bill, she cannot exercise the item-veto power but should veto the
entire bill; (3) the item-veto power does not carry with it the power to strike out
conditions or restrictions for that would be legislation, in violation of the doctrine of
separation of powers; and (4) the power of augmentation in Article VI, Section 25
[5] of the 1987 Constitution, has to be provided for by law and, therefore,
Congress is also vested with the prerogative to impose restrictions on the exercise
of that power.
ISSUE: Whether or not the President exceeded the item-veto power accorded by
the Constitution. Or differently put, has the President the power to veto
`provisions’ of an Appropriations Bill.
HELD: SC ruled that Congress cannot include in a general appropriations bill
matters that should be more properly enacted in separate legislation, and if it does
that, the inappropriate provisions inserted by it must be treated as “item,” which
can be vetoed by the President in the exercise of his item-veto power. The SC went
one step further and rules that even assuming arguendo that “provisions” are
beyond the executive power to veto, and Section 55 (FY ’89) and Section 16
(FY ’90) were not “provisions” in the budgetary sense of the term, they are
“inappropriate provisions” that should be treated as “items” for the purpose of the
President’s veto power.

Kapatiran ng mga Naglilingkod sa Pamahalaan v Tan (1988)

Kapatiran ng mga Naglilingkod sa Pamahalaan v Tan GR No 81311 June 30, 1988

FACTS:
EO 372 was issued by the President of the Philippines which amended the Revenue
Code, adopting the value-added tax (VAT) effective January 1, 1988. Four
petitions assailed the validity of the VAT Law from being beyond the President to
enact; for being oppressive, discriminatory, regressive and violative of the due
process and equal protection clauses, among others, of the Constitution. The
Integrated Customs Brokers Association particularly contend that it unduly
discriminate against customs brokers (Section 103r) as the amended provision of
the Tax Code provides that “service performed in the exercise of profession or
calling (except custom brokers) subject to occupational tax under the Local Tax
Code and professional services performed by registered general professional
partnerships are exempt from VAT.

ISSUE:
Whether the E-VAT law is void for being discriminatory against customs brokers

RULING:
No. The phrase “except custom brokers” is not meant to discriminate against
custom brokers but to avert a potential conflict between Sections 102 and 103 of
the Tax Code, as amended. The distinction of the customs brokers from the other
professionals who are subject to occupation tax under the Local Tax Code is based
on material differences, in that the activities of customs partake more of a
business, rather than a profession and were thus subjected to the percentage tax
under Section 174 of the Tax Code prior to its amendment by EO 273. EO 273
abolished the percentage tax and replaced it with the VAT. If the Association did
not protest the classification of customs brokers then, there is no reason why it
should protest now.

PROVINCE OF ABRA VS HAROLD HERNANDO

107 SCRA 104 – Political Law – Exemption From Taxes – The Church
The Province of Abra sought to tax the properties of the Roman Catholic Bishop,
Inc. of Bangued. Judge Harold Hernando dismissed the petition of Abra without
hearing its side. Hernando ruled that there “is no question that the real properties
sought to be taxed by the Province of Abra are properties of the respondent
Roman Catholic Bishop of Bangued, Inc.” Likewise, there is no dispute that the
properties including their produce are actually, directly and exclusively used by the
Roman Catholic Bishop of Bangued, Inc. for religious or charitable purposes.”
ISSUE: Whether or not the properties of the church (in this case) is exempt from
taxes.
HELD: No, they are not tax exempt. It is true that the Constitution provides that
“charitable institutions, mosques, and non-profit cemeteries” are required that for
the exemption of “lands, buildings, and improvements,” they should not only be
“exclusively” but also “actually” and “directly” used for religious or charitable
purposes. The exemption from taxation is not favored and is never presumed, so
that if granted it must be strictly construed against the taxpayer. However, in this
case, there is no showing that the said properties are actually and directly used for
religious or charitable uses.
ABRA VALLEY COLLEGE, INC vs AQUINO

ABRA VALLEY COLLEGE, INC. represented by PEDRO V.

BORGONIA,petitioner, vs. HON. JUAN P. AQUINO, Judge, Court of First
Instance, Abra;ARMIN M. CARIAGA, Provincial Treasurer, Abra; GASPAR V.
BOSQUE, Municipal Treasurer, Bangued, Abra; HEIRS OF PATERNO
MILLARE, respondents.

FACTS: On June 8, 1972 the properties of the Abra Valley Junior College, Inc. was
sold at public auction for the satisfaction of the unpaid real property taxes thereon
and the same was sold to Paterno Millare who offered the highest bid of P6,000.00
and a Certificate of Sale in his favor was issued by the defendant Municipal
Treasurer.

(a) that the school is recognized by the government and is offering Primary, High
School and College Courses, and has a school population of more than one
thousand students all in all; (b) that it is located right in the heart of the town of
Bangued, a few meters from the plaza and about 120 meters from the Court of
First Instance building; (c) that the elementary pupils are housed in a two-storey
building across the street; (d) that the high school and college students are
housed in the main building; (e) that the Director with his family is in the second
floor of the main building; and (f) that the annual gross income of the school
reaches more than one hundred thousand pesos.

The only issue left for the Court to determine and as agreed by the parties, is
whether or not the lot and building in question are used exclusively for educational
purposes.

ISSUE: Whether or not the properties are exclusively for education purposes?

HELD: Petitioner contends that the primary use of the lot and building for
educational purposes, and not the incidental use thereof, determines and
exemption from property taxes under Section 22 (3), Article VI of the 1935
Constitution. Hence, the seizure and sale of subject college lot and building, which
are contrary thereto as well as to the provision of Commonwealth Act No. 470,
otherwise known as the Assessment Law, are without legal basis and therefore
void.

On the other hand, private respondents maintain that the college lot and building
in question which were subjected to seizure and sale to answer for the unpaid tax
are used: (1) for the educational purposes of the college; (2) as the permanent
residence of the President and Director thereof, Mr. Pedro V. Borgonia, and his
family including the in-laws and grandchildren; and (3) for commercial purposes
because the ground floor of the college building is being used and rented by a
commercial establishment, the Northern Marketing Corporation

The phrase “exclusively used for educational purposes” was further clarified by this
Court, thus““Moreover, the exemption in favor of property used exclusively for
charitable or educational purposes is ‘not limited to property actually
indispensable’ therefor, but extends to facilities which are incidental to and
reasonably necessary for the accomplishment of said purposes, such as in the case
of hospitals, ‘a school for training nurses, a nurses’ home, property use to provide
housing facilities for interns, resident doctors, superintendents, and other
members of the hospital staff, and recreational facilities for student nurses, interns,
and residents’ (84 CJS 6621), such as ‘athletic fields’ including ‘a firm used for the
inmates of the institution.’ ”

The exemption extends to facilities which are incidental to and reasonably

necessary for the accomplishment of the main purpose the lease of the first floor
to the Northern Marketing Corporation cannot by any stretch of the imagination be
considered incidental to the purposes of education; Case at bar.—It must be
stressed however, that while this Court allows a more liberal and non-restrictive
interpretation of the phrase “exclusively used for educational purposes” as
provided for in Article VI, Section 22, paragraph 3 of the 1935 Philippine
Constitution, reasonable emphasis has always been made that exemption extends
to facilities which are incidental to and reasonably necessary for the
accomplishment of the main purposes. Otherwise stated, the use of the school
building or lot for commercial purposes is neither contemplated by law, nor by
jurisprudence. Thus, while the use of the second floor of the main building in the
case at bar for residential purposes of the Director and his family, may find
justification under the concept of incidental use, which is complimentary to the
main or primary pur-pose—educational, the lease of the first floor thereof to the
Northern Marketing Corporation cannot by any stretch of the imagination be
considered incidental to the purposes of education.

Trial Court correct in imposing the tax not because the second floor is being used
by the Director and his family for residential purposes but because the first floor is
being used for commercial purposes.—Under the 1935 Constitution, the trial court
correctly arrived at the conclusion that the school building as well as the lot where
it is built, should be taxed, not because the second floor of the same is being used
by the Director and his family for residential purposes, but because the first floor
thereof is being used for commercial purposes. However, since only a portion is
used for purposes of commerce, it is only fair that half of the assessed tax be
returned to the school involved.

WENCESLAO PASCUAL VS SECRETARY OF PUBLIC WORKS AND

COMMUNICATIONS
110 Phil. 331 – Political Law – Appropriation For Private Use Not Allowed
In 1953, Republic Act No. 920 was passed. This law appropriated P85,000.00 “for
the construction, reconstruction, repair, extension and improvement Pasig feeder
road terminals”. Wenceslao Pascual, then governor of Rizal, assailed the validity of
the law. He claimed that the appropriation was actually going to be used for
private use for the terminals sought to be improved were part of the Antonio
Subdivision. The said Subdivision is owned by Senator Jose Zulueta who was a
member of the same Senate that passed and approved the same RA. Pascual
claimed that Zulueta misrepresented in Congress the fact that he owns those
terminals and that his property would be unlawfully enriched at the expense of the
taxpayers if the said RA would be upheld. Pascual then prayed that the Secretary
of Public Works and Communications be restrained from releasing funds for such
purpose. Zulueta, on the other hand, perhaps as an afterthought, donated the said
property to the City of Pasig.
ISSUE: Whether or not the appropriation is valid.
HELD: No, the appropriation is void for being an appropriation for a private
purpose. The subsequent donation of the property to the government to make the
property public does not cure the constitutional defect. The fact that the law was
passed when the said property was still a private property cannot be ignored. “In
accordance with the rule that the taxing power must be exercised for public
purposes only, money raised by taxation can be expanded only for public purposes
and not for the advantage of private individuals.” Inasmuch as the land on which
the projected feeder roads were to be constructed belonged then to Zulueta, the
result is that said appropriation sought a private purpose, and, hence, was null and
void.

AGLIPAY VS. RUIZ [64 PHIL 201; G.R. NO. 45459; 13 MAR 1937]

Facts: Petitioner seeks the issuance of a writ of prohibition against respondent

Director of Posts from issuing and selling postage stamps commemorative of the
33rd International Eucharistic Congress. Petitioner contends that such act is a
violation of the Constitutional provision stating that no public funds shall be
appropriated or used in the benefit of any church, system of religion, etc. This
provision is a result of the principle of the separation of church and state, for the
purpose of avoiding the occasion wherein the state will use the church, or vice
versa, as a weapon to further their ends and aims. Respondent contends that such
issuance is in accordance to Act No. 4052, providing for the appropriation funds to
respondent for the production and issuance of postage stamps as would be
advantageous to the government.

Issue: Whether or Not there was a violation of the freedom to religion.

Held: What is guaranteed by our Constitution is religious freedom and not mere
religious toleration. It is however not an inhibition of profound reverence for
religion and is not a denial of its influence in human affairs. Religion as a
profession of faith to an active power that binds and elevates man to his Creator is
recognized. And in so far as it instills into the minds the purest principles of
morality, its influence is deeply felt and highly appreciated. The phrase in Act No.
4052 “advantageous to the government” does not authorize violation of the
Constitution. The issuance of the stamps was not inspired by any feeling to favor a
particular church or religious denomination. They were not sold for the benefit of
the Roman Catholic Church. The postage stamps, instead of showing a Catholic
chalice as originally planned, contains a map of the Philippines and the location of
Manila, with the words “Seat XXXIII International Eucharistic Congress.” The focus
of the stamps was not the Eucharistic Congress but the city of Manila, being the
seat of that congress. This was to “to advertise the Philippines and attract more
tourists,” the officials merely took advantage of an event considered of
international importance. Although such issuance and sale may be inseparably
linked with the Roman Catholic Church, any benefit and propaganda incidentally
resulting from it was no the aim or purpose of the Government.

Guingona, Jr. vs. Carague

G.R. No. 94571. April 22, 1991

FACTS:

The 1990 budget consists of P98.4 Billion in automatic appropriation (with P86.8
Billion for debt service) and P155.3 Billion appropriated under RA 6831, otherwise
known as the General Approriations Act, or a total of P233.5 Billion, while the
appropriations for the DECS amount to P27,017,813,000.00.

The said automatic appropriation for debt service is authorized by PD No. 18,
entitled “ Amending Certain Provisions of Republic Act Numbered Four Thousand
Eight Hundred Sixty, as Amended (Re: Foreign Borrowing Act), “by PD No. 1177,
entitled “Revising the Budget Process in Order to Institutionalize the Budgetary
Innovations of the New Society,” and by PD No.1967, entitled “An Act
Strengthening the Guarantee and Payment Positions of the Republic of the
Philippines on its Contingent Liabilities Arising out of Relent and Guaranteed Loans
by Appropriating Funds For The Purpose.”

The petitioners were questioning the constitutionality of the automatic

appropriation for debt service, it being higher than the budget for education,
therefore it is against Section 5(5), Article XIV of the Constitution which mandates
to “assign the highest budgetary priority to education.”

ISSUE:

Whether or not the automatic appropriation for debt service is unconstitutional; it

being higher than the budget for education.

HELD:

No. While it is true that under Section 5(5), Article XIV of the Constitution
Congress is mandated to “assign the highest budgetary priority to education,” it
does not thereby follow that the hands of Congress are so hamstrung as to deprive
it the power to respond to the imperatives of the national interest and for the
attainment of other state policies or objectives.

Congress is certainly not without any power, guided only by its good judgment, to
provide an appropriation, that can reasonably service our enormous debt…It is not
only a matter of honor and to protect the credit standing of the country. More
especially, the very survival of our economy is at stake. Thus, if in the process
Congress appropriated an amount for debt service bigger than the share allocated
to education, the Court finds and so holds that said appropriation cannot be
thereby assailed as unconstitutional.

OSMEÑA vs. ORBOS

220 SCRA 703

GR No. 99886, March 31, 1993

" To avoid the taint of unlawful delegation of the power to tax, there must be a
standard which implies that the legislature determines matter of principle and lays
down fundamental policy."

FACTS: Senator John Osmeña assails the constitutionality of paragraph 1c of PD

1956, as amended by EO 137, empowering the Energy Regulatory Board (ERB) to
approve the increase of fuel prices or impose additional amounts on petroleum
products which proceeds shall accrue to the Oil Price Stabilization Fund (OPSF)
established for the reimbursement to ailing oil companies in the event of sudden
price increases. The petitioner avers that the collection on oil products
establishments is an undue and invalid delegation of legislative power to tax.
Further, the petitioner points out that since a 'special fund' consists of monies
collected through the taxing power of a State, such amounts belong to the State,
although the use thereof is limited to the special purpose/objective for which it
was created. It thus appears that the challenge posed by the petitioner is premised
primarily on the view that the powers granted to the ERB under P.D. 1956, as
amended, partake of the nature of the taxation power of the State.

ISSUE: Is there an undue delegation of the legislative power of taxation?

HELD: None. It seems clear that while the funds collected may be referred to as
taxes, they are exacted in the exercise of the police power of the State. Moreover,
that the OPSF as a special fund is plain from the special treatment given it by E.O.
137. It is segregated from the general fund; and while it is placed in what the law
refers to as a "trust liability account," the fund nonetheless remains subject to the
scrutiny and review of the COA. The Court is satisfied that these measures comply
with the constitutional description of a "special fund." With regard to the alleged
undue delegation of legislative power, the Court finds that the provision conferring
the authority upon the ERB to impose additional amounts on petroleum products
provides a sufficient standard by which the authority must be exercised. In
addition to the general policy of the law to protect the local consumer by stabilizing
and subsidizing domestic pump rates, P.D. 1956 expressly authorizes the ERB to
impose additional amounts to augment the resources of the Fund.

FIRST LEPANTO CERAMIC V CA

Facts:

1. Petitioner assailed the conflicting provisions of B.P. 129, EO 226 (Art. 82)
and a circular, 1-91 issued by the Supreme Court which deals with the
jurisdiction of courts for appeal of cases decided by quasi-judicial agencies
such as the Board of Investments (BOI).

2. BOI granted petitioner First Lepanto Ceramics, Inc.'s application to amend

its BOI certificate of registration by changing the scope of its registered
product from "glazed floor tiles" to "ceramic tiles." Oppositor Mariwasa filed
a motion for reconsideration of the said BOI decision while oppositor
Fil-Hispano Ceramics, Inc. did not move to reconsider the same nor appeal
therefrom. Soon rebuffed in its bid for reconsideration, Mariwasa filed a
petition for review with CA.

4. CA temporarily restrained the BOI from implementing its decision. The TRO
lapsed by its own terms twenty (20) days after its issuance, without
respondent court issuing any preliminary injunction.

5. Petitioner filed a motion to dismiss and to lift the restraining order

contending that CA does not have jurisdiction over the BOI case, since the
same is exclusively vested with the Supreme Court pursuant to Article 82 of
the Omnibus Investments Code of 1987.

6. Petitioner argued that the Judiciary Reorganization Act of 1980 or B.P. 129
and Circular 1-91, "Prescribing the Rules Governing Appeals to the Court of
Appeals from a Final Order or Decision of the Court of Tax Appeals and
Quasi-Judicial Agencies" cannot be the basis of Mariwasa's appeal to
respondent court because the procedure for appeal laid down therein runs
contrary to Article 82 of E.O. 226, which provides that appeals from
decisions or orders of the BOI shall be filed directly with the Supreme Court.
 7. While Mariwasa maintains that whatever inconsistency there may have
been between B.P. 129 and Article 82 of E.O. 226 on the question of venue
for appeal, has already been resolved by Circular 1-91 of the Supreme Court,
which was promulgated on February 27, 1991 or four (4) years after E.O.
226 was enacted.

ISSUE: Whether or not the Court of Appeals has jurisdiction over the
case

YES. Circular 1-91 effectively repealed or superseded Article 82 of E.O. 226

insofar as the manner and method of enforcing the right to appeal from
decisions of the BOI are concerned. Appeals from decisions of the BOI, which
by statute was previously allowed to be filed directly with the Supreme Court,
should now be brought to the Court of Appeals.

Diaz v. CA

G.R. No. L-109698 December 5, 1

Bellossillo, J.

Facts:

On 23 January 1991, Davao Light and Power Company, Inc. (DLPC)

filed with the Energy Regulatory Board (ERB) an application for the approval of the
sound value appraisal of its property in service.

The Asian Appraisal Company valued the property and equipment of

DLPC as of 12 March 1990 at One Billion One Hundred Forty One Million Seven
Hundred Seventy Four Thousand Pesos (P1,141,774,000.00).

On 6 December 1992, ERB approved the application of DLPC after

deducting Fourteen Million Eight Hundred Thousand Pesos (P14,800,000.00)
worth of property and equipment which were not used by DLPC in its operation.

On 6 July 1992, petitioners filed a petition for review on certiorari

before the Supreme Court assailing the decision of ERB on the ground of lack of
jurisdiction and/or grave abuse of discretion amounting to lack of jurisdiction.

In our resolution of 8 September 1992, the Supreme Court referred

the case for proper disposition to the Court of Appeals which subsequently
dismissed the petition on the ground that (1) the filing of the petition for review
with the Supreme Court was a wrong mode of appeal, and (2) the petition did not
comply with the provisions of Supreme Court Circular 1-88 in that (a) it did not
state the date when the petitioners received notice of the ERB decision, (b) it did
not state the date when the petitioners filed a motion for reconsideration, and (c)
it inconsistently alleged different dates when petitioners supposedly received the
denial of their motion by ERB.

On 18 December 1992, petitioners filed a motion for reconsideration

contending that our resolution of 8 September 1992 was a directive for the Court
of Appeals to disregard the above circular.

In its resolution of 24 March 1993, the Court of Appeals denied the motion for
reconsideration for lack of merit.

Issue:

whether or not E.O. No. 172 is violative of Section 30, Article VI of the
Constitution

Held:

Yes. Since Sec. 10 of E.O. No. 172 was enacted without the advice and
concurrence of the Supreme Court, this provision never became effective, with the
result that it cannot be deemed to have amended the Judiciary Reorganization Act
of 1980. Consequently, the authority of the Court of Appeals to decide cases from
the Board of Energy, now ERB, remains.

SUBIC BAY METROPOLITAN AUTHORITY vs. COMELEC

SUBIC BAY METROPOLITAN AUTHORITY vs. COMELEC

G.R. No. 125416 September 26, 1996

FACTS:

On March 13, 1992, Congress enacted RA. 7227 (The Bases Conversion and
Development Act of 1992), which created the Subic Economic Zone. RA 7227
likewise created SBMA to implement the declared national policy of converting the
Subic military reservation into alternative productive uses.

On November 24, 1992, the American navy turned over the Subic military
reservation to the Philippines government. Immediately,petitioner commenced the
implementation of its task, particularly the preservation of the sea-ports, airport,
buildings, houses and other installations left by the American navy.

On April 1993, the Sangguniang Bayan of Morong, Bataan passed Pambayang

Kapasyahan Bilang 10, Serye 1993, expressing therein its absolute concurrence, as
required by said Sec. 12 of RA 7227, to join the Subic Special Economic Zone and
submitted such to the Office of the President.

On May 24, 1993, respondents Garcia filed a petition with the Sangguniang Bayan
of Morong to annul Pambayang Kapasyahan Blg.10, Serye 1993.

The petition prayed for the following: a) to nullify PambayangKapasyang Blg. 10

for Morong to join the Subic Special Economi Zone,b) to allow Morong to join
provided conditions are met.

The Sangguniang Bayan ng Morong acted upon the petition by promulgating

Pambayang Kapasyahan Blg. 18, Serye 1993, requesting Congress of the
Philippines so amend certain provisions of RA 7227.

Not satisfied, respondents resorted to their power initiative under the LGC of 1991.

On July 6, 1993, COMELEC denied the petition for local initiative on the ground
that the subject thereof was merely a resolution and not an ordinance.

On February 1, 1995, the President issued Proclamation No. 532 defining the
metes and bounds of the SSEZ including therein the portion of the former naval
base within the territorial jurisdiction of the Municipality of Morong.

On June 18, 19956, respondent Comelec issued Resolution No. 2845and 2848,
adopting a "Calendar of Activities for local referendum and providing for "the rules
and guidelines to govern the conduct of the referendum.

On July 10, 1996, SBMA instituted a petition for certiorari contesting the validity of
Resolution No. 2848 alleging that public respondent is intent on proceeding with a
local initiative that proposes an amendment of a national law.

Issue:
1. WON Comelec committed grave abuse of discretion in promulgating Resolution
No. 2848 which governs the conduct of the referendum proposing to annul or
repeal Pambayang Kapasyahan Blg. 10

2. WON the questioned local initiative covers a subject within the powersof the
people of Morong to enact; i.e., whether such initiative "seeks the amendment of a
national law."
Ruling:
1. YES. COMELEC committed grave abuse of discretion.

FIRST. The process started by private respondents was an INITIATIVE but

respondent Comelec made preparations for a REFERENDUM only.

In fact, in the body of the Resolution as reproduced in the footnote below,the word
"referendum" is repeated at least 27 times, but "initiative" is not mentioned at all.
The Comelec labeled the exercise as a "Referendum"; the counting of votes was
entrusted to a "Referendum Committee"; the documents were called "referendum
returns"; the canvassers, "Referendum Board of Canvassers" and the ballots
themselves bore the description"referendum". To repeat, not once was the word
"initiative" used in said body of Resolution No. 2848. And yet, this exercise is
unquestionably an INITIATIVE.

As defined, Initiative is the power of the people to propose bills and laws,and to
enact or reject them at the polls independent of the legislative assembly. On the
other hand, referendum is the right reserved to the people to adopt or reject any
act or measure which has been passed by a legislative body and which in most
cases would without action on the part of electors become a law.

In initiative and referendum, the Comelec exercises administration and supervision

of the process itself, akin to its powers over the conduct of elections. These
law-making powers belong to the people, hence the respondent Commission
cannot control or change the substance or the content of legislation.

2. The local initiative is NOT ultra vires because the municipal resolution is still in
the proposal stage and not yet an approved law.

The municipal resolution is still in the proposal stage. It is not yet an approved law.
Should the people reject it, then there would be nothing to contest and to
adjudicate. It is only when the people have voted for it and it has become an
approved ordinance or resolution that rights and obligations can be enforced or
implemented thereunder. At this point, it is merely a proposal and the writ or
prohibition cannot issue upon a mere conjecture or possibility. Constitutionally
speaking, courts may decide only actual controversies, not hypothetical questions
or cases.

In the present case, it is quite clear that the Court has authority to review Comelec
Resolution No. 2848 to determine the commission of grave abuse of discretion.
However, it does not have the same authority in regard to the proposed initiative
since it has not been promulgated or approved, or passed upon by any "branch or
instrumentality" or lower court, for that matter. The Commission on Elections itself
has made no reviewable pronouncements about the issues brought by the
pleadings. The Comelec simply included verbatim the proposal in its questioned
Resolution No. 2848. Hence, there is really no decision or action made by a branch,
instrumentality or court which this Court could take cognizance of and acquire
jurisdiction over, in the exercise of its review powers.