admin law cases (rule-making power)

8/20/2019 Admin Law Cases (Rule-Making Power)

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G.R. No. 115381 December 23, 1994

KILUSANG MAYO UNO LABOR CENTER, petitioner,vs.HON. JESUS B. GARCIA, JR., the LAND TRANSPORTATION FRANCHISING AND REGULATORY BOARD, and thePROVINCIAL BUS OPERATORS ASSOCIATION OF THE PHILIPPINES, respondents.

Potenciano A. Flores for petitioner.

Robert Anthony C. Sison, Cesar B. Brillantes and Jose Z. Galsim for private respondent.

Jose F. Miravite for movants.

KAPUNAN, J.:

Public utilities are privately owned and operated businesses whose service are essential to the general public. They areenterprises which specially cater to the needs of the public and conduce to their comfort and convenience. As such, publicutility services are impressed with public interest and concern. The same is true with respect to the business of commoncarrier which holds such a peculiar relation to the public interest that there is superinduced upon it the right of public

regulation when private properties are affected with public interest, hence, they cease to be juris privati only. When,therefore, one devotes his property to a use in which the public has an interest, he, in effect grants to the public aninterest in that use, and must submit to the control by the public for the common good, to the extent of the interest he hasthus created.

1

An abdication of the licensing and regulatory government agencies of their functions as the instant petit ion seeks to show,is indeed lamentable. Not only is it an unsound administrative policy but it is inimical to public trust and public interest aswell.

The instant petition for certiorari assails the constitutionality and validity of certain memoranda, circulars and/or orders ofthe Department of Transportation and Communications (DOTC) and the Land Transportation Franchising and RegulatoryBoard LTFRB)

2 which, among others, (a) authorize provincial bus and jeepney operators to increase or decrease the

prescribed transportation fares without application therefor with the LTFRB and without hearing and approval thereof by

said agency in violation of Sec. 16(c) of Commonwealth Act No. 146, as amended, otherwise known as the Public Service Act, and in derogation of LTFRB's duty to fix and determine just and reasonable fares by delegating that function to busoperators, and (b) establish a presumption of public need in favor of applicants for certificates of public convenience(CPC) and place on the oppositor the burden of proving that there is no need for the proposed service, in patent violationnot only of Sec. 16(c) of CA 146, as amended, but also of Sec. 20(a) of the same Act mandating that fares should be "justand reasonable." It is, likewise, violative of the Rules of Court which places upon each party the burden to prove his ownaffirmative allegations.

3 The offending provisions contained in the questioned issuances pointed out by petitioner, have

resulted in the introduction into our highways and thoroughfares thousands of old and smoke-belching buses, many ofwhich are right-hand driven, and have exposed our consumers to the burden of spiraling costs of public transportationwithout hearing and due process.

The following memoranda, circulars and/or orders are sought to be nullified by the instant petition, viz : (a) DOTCMemorandum Order 90-395, dated June 26, 1990 relative to the implementation of a fare range scheme for provincial bus

services in the country; (b) DOTC Department Order No.92-587, dated March 30, 1992, defining the policy framework on the regulation of transport services; (c) DOTCMemorandum dated October 8, 1992, laying down rules and procedures to implement Department Order No. 92-587; (d)LTFRB Memorandum Circular No. 92-009, providing implementing guidelines on the DOTC Department Order No. 92-587; and (e) LTFRB Order dated March 24, 1994 in Case No. 94-3112.

The relevant antecedents are as follows:

On June 26, 1990; then Secretary of DOTC, Oscar M. Orbos, issued Memorandum Circular No. 90-395 to then LTFRBChairman, Remedios A.S. Fernando allowing provincial bus operators to charge passengers rates within a range of 15%above and 15% below the LTFRB official rate for a period of one (1) year. The text of the memorandum order reads in full


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One of the policy reforms and measures that is in line with the thrusts and the priorities set out in theMedium-Term Philippine Development Plan (MTPDP) 1987 — 1992) is the liberalization of regulations inthe transport sector. Along this line, the Government intends to move away gradually from regulatorypolicies and make progress towards greater reliance on free market forces.

Based on several surveys and observations, bus companies are already charging passenger rates aboveand below the official fare declared by LTFRB on many provincial routes. It is in this context that someform of liberalization on public transport fares is to be tested on a pilot basis.

In view thereof, the LTFRB is hereby directed to immediately publicize a fare range scheme for allprovincial bus routes in country (except those operating within Metro Manila). Transport Operators shallbe allowed to charge passengers within a range of fifteen percent (15%) above and fifteen percent (15%)

below the LTFRB official rate for a period of one year .

Guidelines and procedures for the said scheme shall be prepared by LTFRB in coordination with theDOTC Planning Service.

The implementation of the said fare range scheme shall start on 6 August 1990.

For compliance. (Emphasis ours.)

Finding the implementation of the fare range scheme "not legally feasible," Remedios A.S. Fernando submitted thefollowing memorandum to Oscar M. Orbos on July 24, 1990, to wit:

With reference to DOTC Memorandum Order No. 90-395 dated 26 June 1990 which the LTFRB receivedon 19 July 1990, directing the Board "to immediately publicize a fare range scheme for all provincial busroutes in the country (except those operating within Metro Manila)" that will allow operators "to chargepassengers within a range of fifteen percent (15%) above and fifteen percent (15%) below the LTFRBofficial rate for a period of one year" the undersigned is respectfully adverting the Secretary's attention tothe following for his consideration:

1. Section 16(c) of the Public Service Act prescribes the following for the fixing anddetermination of rates — (a) the rates to be approved should be proposed by publicservice operators; (b) there should be a publication and notice to concerned or affected

parties in the territory affected; (c) a public hearing should be held for the fixing of therates; hence, implementation of the proposed fare range scheme on August 6 withoutcomplying with the requirements of the Public Service Act may not be legally feasible.

2. To allow bus operators in the country to charge fares fifteen (15%) above the presentLTFRB fares in the wake of the devastation, death and suffering caused by the July 16earthquake will not be socially warranted and will be politically unsound; most likely publiccriticism against the DOTC and the LTFRB will be triggered by the untimely motu propioimplementation of the proposal by the mere expedient of publicizing the fare rangescheme without calling a public hearing, which scheme many as early as during theSecretary's predecessor know through newspaper reports and columnists' comments tobe Asian Development Bank and World Bank inspired.

3. More than inducing a reduction in bus fares by fifteen percent (15%) theimplementation of the proposal will instead trigger an upward adjustment in bus fares byfifteen percent (15%) at a time when hundreds of thousands of people in Central andNorthern Luzon, particularly in Central Pangasinan, La Union, Baguio City, Nueva Ecija,and the Cagayan Valley are suffering from the devastation and havoc caused by therecent earthquake.

4. In lieu of the said proposal, the DOTC with its agencies involved in publictransportation can consider measures and reforms in the industry that will be sociallyuplifting, especially for the people in the areas devastated by the recent earthquake.

In view of the foregoing considerations, the undersigned respectfully suggests that the implementation ofthe proposed fare range scheme this year be further studied and evaluated.


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On December 5, 1990, private respondent Provincial Bus Operators Association of the Philippines, Inc. (PBOAP) filed anapplication for fare rate increase. An across-the-board increase of eight and a half centavos (P0.085) per kilometer for alltypes of provincial buses with a minimum-maximum fare range of fifteen (15%) percent over and below the proposedbasic per kilometer fare rate, with the said minimum-maximum fare range applying only to ordinary, first class andpremium class buses and a fifty-centavo (P0.50) minimum per kilometer fare for aircon buses, was sought.

On December 6, 1990, private respondent PBOAP reduced its applied proposed fare to an across-the-board increase ofsix and a half (P0.065) centavos per kilometer for ordinary buses. The decrease was due to the drop in the expected priceof diesel.

The application was opposed by the Philippine Consumers Foundation, Inc. and Perla C. Bautista alleging that theproposed rates were exorbitant and unreasonable and that the application contained no allegation on the rate of return ofthe proposed increase in rates.

On December 14, 1990, public respondent LTFRB rendered a decision granting the fare rate increase in accordance withthe following schedule of fares on a straight computation method, viz:

AUTHORIZED FARES

LUZONMIN. OF 5 KMS. SUCCEEDING KM.

REGULAR P1.50 P0.37STUDENT P1.15 P0.28

VISAYAS/MINDANAO

REGULAR P1.60 P0.375STUDENT P1.20 P0.285FIRST CLASS (PER KM.)LUZON P0.385VISAYAS/MINDANAO P0.395PREMIERE CLASS (PER KM.)

LUZON P0.395VISAYAS/MINDANAO P0.405

AIRCON (PER KM.) P0.415. 4

On March 30, 1992, then Secretary of the Department of Transportation and Communications Pete Nicomedes Pradoissued Department Order No.92-587 defining the policy framework on the regulation of transport services. The full text of the said order is reproducedbelow in view of the importance of the provisions contained therein:

WHEREAS, Executive Order No. 125 as amended, designates the Department of Transportation andCommunications (DOTC) as the primary policy, planning, regulating and implementing agency on

transportation;

WHEREAS, to achieve the objective of a viable, efficient, and dependable transportation system, thetransportation regulatory agencies under or attached to the DOTC have to harmonize their decisions andadopt a common philosophy and direction;

WHEREAS, the government proposes to build on the successful liberalization measures pursued over thelast five years and bring the transport sector nearer to a balanced longer term regulatory framework;

NOW, THEREFORE, pursuant to the powers granted by laws to the DOTC, the following policies andprinciples in the economic regulation of land, air, and water transportation services are hereby adopted:


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1. Entry into and exit out of the industry. Following the Constitutional dictum against monopoly, nofranchise holder shall be permitted to maintain a monopoly on any route. A minimum of two franchiseholders shall be permitted to operate on any route.

The requirements to grant a certificate to operate, or certificate of public convenience, shall be: proof ofFilipino citizenship, financial capability, public need, and sufficient insurance cover to protect the ridingpublic.

In determining public need, the presumption of need for a service shall be deemed in favor of the

applicant. The burden of proving that there is no need for a proposed service shall be with theoppositor(s).

In the interest of providing efficient public transport services, the use of the "prior operator" and the"priority of filing" rules shall be discontinued. The route measured capacity test or other similar tests ofdemand for vehicle/vessel fleet on any route shall be used only as a guide in weighing the merits of eachfranchise application and not as a limit to the services offered.

Where there are limitations in facilities, such as congested road space in urban areas, or at airports andports, the use of demand management measures in conformity with market principles may be considered

The right of an operator to leave the industry is recognized as a business decision, subject only to thefiling of appropriate notice and following a phase-out period, to inform the public and to minimize

disruption of services.

2. Rate and Fare Setting. Freight rates shall be freed gradually from government controls. Passengerfares shall also be deregulated, except for the lowest class of passenger service (normally third class passenger transport) for which the government will fix indicative or reference fares. Operators of particular services may fix their own fares within a range 15% above and below the indicative or reference

rate.

Where there is lack of effective competition for services, or on specific routes, or for the transport ofparticular commodities, maximum mandatory freight rates or passenger fares shall be set temporarily bythe government pending actions to increase the level of competition.

For unserved or single operator routes, the government shall contract such services in the mostadvantageous terms to the public and the government, following public bids for the services. Theadvisability of bidding out the services or using other kinds of incentives on such routes shall be studiedby the government.

3. Special Incentives and Financing for Fleet Acquisition. As a matter of policy, the government shall notengage in special financing and incentive programs, including direct subsidies for fleet acquisition andexpansion. Only when the market situation warrants government intervention shall programs of this typebe considered. Existing programs shall be phased out gradually.

The Land Transportation Franchising and Regulatory Board, the Civil Aeronautics Board, the MaritimeIndustry Authority are hereby directed to submit to the Office of the Secretary, within forty-five (45) daysof this Order, the detailed rules and procedures for the Implementation of the policies herein set forth. In

the formulation of such rules, the concerned agencies shall be guided by the most recent studies on thesubjects, such as the Provincial Road Passenger Transport Study, the Civil Aviation Master Plan, thePresidential Task Force on the Inter-island Shipping Industry, and the Inter-island Liner Shipping RateRationalization Study.

For the compliance of all concerned. (Emphasis ours)

On October 8, 1992, public respondent Secretary of the Department of Transportation and Communications Jesus B.Garcia, Jr. issued a memorandum to the Acting Chairman of the LTFRB suggesting swift action on the adoption of rulesand procedures to implement above-quoted Department Order No. 92-587 that laid down deregulation and otherliberalization policies for the transport sector. Attached to the said memorandum was a revised draft of the required rulesand procedures covering (i) Entry Into and Exit Out of the Industry and (ii) Rate and Fare Setting, with comments andsuggestions from the World Bank incorporated therein. Likewise, resplendent from the said memorandum is the statemen


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of the DOTC Secretary that the adoption of the rules and procedures is a pre-requisite to the approval of the EconomicIntegration Loan from the World Bank.

5

On February 17, 1993, the LTFRB issued Memorandum CircularNo. 92-009 promulgating the guidelines for the implementation of DOTC Department Order No. 92-587. The Circularprovides, among others, the following challenged portions:

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IV. Policy Guidelines on the Issuance of Certificate of Public Convenience.

The issuance of a Certificate of Public Convenience is determined by public need. The presumption of public need for a service shall be deemed in favor of the applicant, while burden of proving that there is

no need for the proposed service shall be the oppositor'(s).

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V. Rate and Fare Setting

The control in pricing shall be liberalized to introduce price competition complementary with the quality ofservice, subject to prior notice and public hearing. Fares shall not be provisionally authorized without

public hearing.

A. On the General Structure of Rates

1. The existing authorized fare range system of plus or minus 15 per cent for provincial buses and jeepneys shall be widened to 20% and -25% limit in 1994 with the authorized fare to be replaced by anindicative or reference rate as the basis for the expanded fare range.

2. Fare systems for aircon buses are liberalized to cover first class and premier services.

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(Emphasis ours).

Sometime in March, 1994, private respondent PBOAP, availing itself of the deregulation policy of the DOTC allowingprovincial bus operators to collect plus 20% and minus 25% of the prescribed fare without first having filed a petition forthe purpose and without the benefit of a public hearing, announced a fare increase of twenty (20%) percent of the existingfares. Said increased fares were to be made effective on March 16, 1994.

On March 16, 1994, petitioner KMU filed a petition before the LTFRB opposing the upward adjustment of bus fares.

On March 24, 1994, the LTFRB issued one of the assailed orders dismissing the petition for lack of merit. The dispositiveportion reads:

PREMISES CONSIDERED, this Board after considering the arguments of the parties, hereby

DISMISSES FOR LACK OF MERIT the petition filed in the above-entitled case. This petition in this casewas resolved with dispatch at the request of petitioner to enable it to immediately avail of the legalremedies or options it is entitled under existing laws.

SO ORDERED. 6

Hence, the instant petition for certiorari with an urgent prayer for issuance of a temporary restraining order.

The Court, on June 20, 1994, issued a temporary restraining order enjoining, prohibiting and preventing respondents fromimplementing the bus fare rate increase as well as the questioned orders and memorandum circulars. This meant thatprovincial bus fares were rolled back to the levels duly authorized by the LTFRB prior to March 16, 1994. A moratoriumwas likewise enforced on the issuance of franchises for the operation of buses, jeepneys, and taxicabs.


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Petitioner KMU anchors its claim on two (2) grounds. First, the authority given by respondent LTFRB to provincial busoperators to set a fare range of plus or minus fifteen (15%) percent, later increased to plus twenty (20%) and minustwenty-five (-25%) percent, over and above the existing authorized fare without having to file a petition for the purpose, isunconstitutional, invalid and illegal. Second, the establishment of a presumption of public need in favor of an applicant fora proposed transport service without having to prove public necessity, is illegal for being violative of the Public Service Actand the Rules of Court.

In its Comment, private respondent PBOAP, while not actually touching upon the issues raised by the petitioner,questions the wisdom and the manner by which the instant petition was filed. It asserts that the petitioner has no legal

standing to sue or has no real interest in the case at bench and in obtaining the reliefs prayed for.

In their Comment filed by the Office of the Solicitor General, public respondents DOTC Secretary Jesus B. Garcia, Jr. andthe LTFRB asseverate that the petitioner does not have the standing to maintain the instant suit. They further claim that itis within DOTC and LTFRB's authority to set a fare range scheme and establish a presumption of public need inapplications for certificates of public convenience.

We find the instant petition impressed with merit.

At the outset, the threshold issue of locus standi must be struck. Petitioner KMU has the standing to sue.

The requirement of locus standi inheres from the definition of judicial power. Section 1 of Article VIII of the Constitutionprovides:

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Judicial power includes the duty of the courts of justice to settle actual controversies involving rightswhich are legally demandable and enforceable, and to determine whether or not there has been a graveabuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentalityof the Government.

In Lamb v. Phipps, 7 we ruled that judicial power is the power to hear and decide causes pending between parties who

have the right to sue in the courts of law and equity. Corollary to this provision is the principle of locus standi of a partylitigant. One who is directly affected by and whose interest is immediate and substantial in the controversy has thestanding to sue. The rule therefore requires that a party must show a personal stake in the outcome of the case or an

injury to himself that can be redressed by a favorable decision so as to warrant an invocation of the court's jurisdiction andto justify the exercise of the court's remedial powers in his behalf. 8

In the case at bench, petitioner, whose members had suffered and continue to suffer grave and irreparable injury anddamage from the implementation of the questioned memoranda, circulars and/or orders, has shown that it has a clearlegal right that was violated and continues to be violated with the enforcement of the challenged memoranda, circularsand/or orders. KMU members, who avail of the use of buses, trains and jeepneys everyday, are directly affected by theburdensome cost of arbitrary increase in passenger fares. They are part of the millions of commuters who comprise theriding public. Certainly, their rights must be protected, not neglected nor ignored.

Assuming arguendo that petitioner is not possessed of the standing to sue, this court is ready to brush aside this barrenprocedural infirmity and recognize the legal standing of the petitioner in view of the transcendental importance of theissues raised. And this act of liberality is not without judicial precedent. As early as the Emergency Powers Cases, this

Court had exercised its discretion and waived the requirement of proper party. In the recent case of Kilosbayan, Inc., et al.v. Teofisto Guingona, Jr., et al., 9 we ruled in the same lines and enumerated some of the cases where the same policy

was adopted, viz :

. . . A party's standing before this Court is a procedural technicality which it may, in the exercise of itsdiscretion, set aside in view of the importance of the issues raised. In the landmark Emergency PowersCases, [G.R. No. L-2044 (Araneta v. Dinglasan); G.R. No. L-2756 (Aranetav. Angeles); G.R. No. L-3054 (Rodriguez v. Tesorero de Filipinas); G.R. No. L-3055 (Guerrero v.Commissioner of Customs); and G.R. No. L-3056 (Barredo v. Commission on Elections), 84 Phil. 368(1949)], this Court brushed aside this technicality because "the transcendental importance to the public ofthese cases demands that they be settled promptly and definitely, brushing aside, if we must,technicalities of procedure. (Avelino vs. Cuenco, G.R. No. L-2621)." Insofar as taxpayers' suits areconcerned, this Court had declared that it "is not devoid of discretion as to whether or not it should be


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entertained," (Tan v. Macapagal, 43 SCRA 677, 680 [1972]) or that it "enjoys an open discretion toentertain the same or not." [Sanidad v. COMELEC, 73 SCRA 333 (1976)].

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In line with the liberal policy of this Court on locus standi , ordinary taxpayers, members of Congress, andeven association of planters, andnon-profit civic organizations were allowed to initiate and prosecute actions before this court to questionthe constitutionality or validity of laws, acts, decisions, rulings, or orders of various government agencies

or instrumentalities. Among such cases were those assailing the constitutionality of (a) R.A. No. 3836insofar as it allows retirement gratuity and commutation of vacation and sick leave to Senators andRepresentatives and to elective officials of both Houses of Congress (Philippine Constitution Association,Inc. v. Gimenez, 15 SCRA 479 [1965]); (b) Executive Order No. 284, issued by President Corazon C. Aquino on 25 July 1987, which allowed members of the cabinet, their undersecretaries, and assistantsecretaries to hold other government offices or positions (Civil Liberties Union v. Executive Secretary, 194SCRA 317 [1991]); (c) the automatic appropriation for debt service in the General Appropriations Act(Guingona v. Carague, 196 SCRA 221 [1991]; (d) R.A. No. 7056 on the holding of desynchronizedelections (Osmeña v. Commission on Elections, 199 SCRA 750 [1991]); (e) P.D. No. 1869 (the charter ofthe Philippine Amusement and Gaming Corporation) on the ground that it is contrary to morals, publicpolicy, and order (Basco v. Philippine Amusement and Gaming Corp., 197 SCRA 52 [1991]); and (f) R.A.No. 6975, establishing the Philippine National Police. (Carpio v. Executive Secretary, 206 SCRA 290[1992]).

Other cases where we have followed a liberal policy regarding locus standi include those attacking thevalidity or legality of (a) an order allowing the importation of rice in the light of the prohibition imposed byR.A. No. 3452 (Iloilo Palay and Corn Planters Association, Inc. v. Feliciano, 13 SCRA 377 [1965]; (b) P.DNos. 991 and 1033 insofar as they proposed amendments to the Constitution and P.D. No. 1031 insofaras it directed the COMELEC to supervise, control, hold, and conduct the referendum-plebiscite on 16October 1976 (Sanidad v. Commission on Elections, supra); (c) the bidding for the sale of the 3,179square meters of land at Roppongi, Minato-ku, Tokyo, Japan (Laurel v. Garcia, 187 SCRA 797 [1990]);(d) the approval without hearing by the Board of Investments of the amended application of the BataanPetrochemical Corporation to transfer the site of its plant from Bataan to Batangas and the validity of suchtransfer and the shift of feedstock from naphtha only to naphtha and/or liquefied petroleum gas (Garcia v.Board of Investments, 177 SCRA 374 [1989]; Garcia v. Board of Investments, 191 SCRA 288 [1990]); (e)the decisions, orders, rulings, and resolutions of the Executive Secretary, Secretary of Finance,Commissioner of Internal Revenue, Commissioner of Customs, and the Fiscal Incentives Review Boardexempting the National Power Corporation from indirect tax and duties (Maceda v. Macaraig, 197 SCRA771 [1991]); (f) the orders of the Energy Regulatory Board of 5 and 6 December 1990 on the ground thatthe hearings conducted on the second provisional increase in oil prices did not allow the petitionersubstantial cross-examination; (Maceda v. Energy Regulatory Board, 199 SCRA 454 [1991]); (g)Executive Order No. 478 which levied a special duty of P0.95 per liter of imported oil products (Garcia v.Executive Secretary, 211 SCRA 219 [1992]); (h) resolutions of the Commission on Elections concerningthe apportionment, by district, of the number of elective members of Sanggunians (De Guia vs.Commission on Elections, 208 SCRA 420 [1992]); and (i) memorandum orders issued by a Mayoraffecting the Chief of Police of Pasay City (Pasay Law and Conscience Union, Inc. v. Cuneta, 101 SCRA662 [1980]).

In the 1975 case of Aquino v. Commission on Elections (62 SCRA 275 [1975]), this Court, despite itsunequivocal ruling that the petitioners therein had no personality to file the petition, resolved neverthelessto pass upon the issues raised because of the far-reaching implications of the petition. We did no lessin De Guia v. COMELEC (Supra) where, although we declared that De Guia "does not appear tohave locus standi , a standing in law, a personal or substantial interest," we brushed aside the proceduralinfirmity "considering the importance of the issue involved, concerning as it does the political exercise ofqualified voters affected by the apportionment, and petitioner alleging abuse of discretion and violation ofthe Constitution by respondent."

Now on the merits of the case.

On the fare range scheme.

Section 16(c) of the Public Service Act, as amended, reads:


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Sec. 16. Proceedings of the Commission, upon notice and hearing . — The Commission shall havepower, upon proper notice and hearing in accordance with the rules and provisions of this Act, subject tothe limitations and exceptions mentioned and saving provisions to the contrary:

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(c) To fix and determine individual or joint rates, tolls, charges, classifications, or schedules thereof, aswell as commutation, mileage kilometrage, and other special rates which shall be imposed, observed, andfollowed thereafter by any public service: Provided , That the Commission may, in its discretion, approve

rates proposed by public services provisionally and without necessity of any hearing; but it shall call ahearing thereon within thirty days thereafter, upon publication and notice to the concerns operating in theterritory affected: Provided, further , That in case the public service equipment of an operator is usedprincipally or secondarily for the promotion of a private business, the net profits of said private businessshall be considered in relation with the public service of such operator for the purpose of fixing the rates.(Emphasis ours).

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Under the foregoing provision, the Legislature delegated to the defunct Public Service Commission the power offixing the rates of public services. Respondent LTFRB, the existing regulatory body today, is likewise vested withthe same under Executive Order No. 202 dated June 19, 1987. Section 5(c) of the said executive order authorizesLTFRB "to determine, prescribe, approve and periodically review and adjust, reasonable fares, rates and other

related charges, relative to the operation of public land transportation services provided by motorized vehicles."

Such delegation of legislative power to an administrative agency is permitted in order to adapt to the increasingcomplexity of modern life. As subjects for governmental regulation multiply, so does the difficulty of administering thelaws. Hence, specialization even in legislation has become necessary. Given the task of determining sensitive anddelicate matters asroute-fixing and rate-making for the transport sector, the responsible regulatory body is entrusted with the power ofsubordinate legislation. With this authority, an administrative body and in this case, the LTFRB, may implement broadpolicies laid down in a statute by "filling in" the details which the Legislature may neither have time or competence toprovide. However, nowhere under the aforesaid provisions of law are the regulatory bodies, the PSC and LTFRB alike,authorized to delegate that power to a common carrier, a transport operator, or other public service.

In the case at bench, the authority given by the LTFRB to the provincial bus operators to set a fare range over and above

the authorized existing fare, is illegal and invalid as it is tantamount to an undue delegation of legislativeauthority. Potestas delegata non delegari potest . What has been delegated cannot be delegated. This doctrine is basedon the ethical principle that such a delegated power constitutes not only a right but a duty to be performed by the delegatethrough the instrumentality of his own judgment and not through the intervening mind of another.

10 A further delegation of

such power would indeed constitute a negation of the duty in violation of the trust reposed in the delegate mandated todischarge it directly.

11 The policy of allowing the provincial bus operators to change and increase their fares at will would

result not only to a chaotic situation but to an anarchic state of affairs. This would leave the riding public at the mercy oftransport operators who may increase fares every hour, every day, every month or every year, whenever it pleases themor whenever they deem it "necessary" to do so. In Panay Autobus Co. v. Philippine Railway Co.,

12 where respondent

Philippine Railway Co. was granted by the Public Service Commission the authority to change its freight rates at will, thisCourt categorically declared that:

In our opinion, the Public Service Commission was not authorized by law to delegate to the Philippine

Railway Co. the power of altering its freight rates whenever it should find it necessary to do so in order tomeet the competition of road trucks and autobuses, or to change its freight rates at will, or to regard its present rates as maximum rates, and to fix lower rates whenever in the opinion of the Philippine RailwayCo. it would be to its advantage to do so.

The mere recital of the language of the application of the Philippine Railway Co. is enough to show that itis untenable. The Legislature has delegated to the Public Service Commission the power of fixing therates of public services, but it has not authorized the Public Service Commission to delegate that power toa common carrier or other public service. The rates of public services like the Philippine Railway Co. havebeen approved or fixed by the Public Service Commission, and any change in such rates must beauthorized or approved by the Public Service Commission after they have been shown to be just andreasonable. The public service may, of course, propose new rates, as the Philippine Railway Co. did in


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case No. 31827, but it cannot lawfully make said new rates effective without the approval of the PublicService Commission, and the Public Service Commission itself cannot authorize a public service toenforce new rates without the prior approval of said rates by the commission. The commission mustapprove new rates when they are submitted to it, if the evidence shows them to be just and reasonable,otherwise it must disapprove them. Clearly, the commission cannot determine in advance whether or notthe new rates of the Philippine Railway Co. will be just and reasonable, because it does not know whatthose rates will be.

In the present case the Philippine Railway Co. in effect asked for permission to change its freight rates at

will. It may change them every day or every hour, whenever it deems it necessary to do so in order tomeet competition or whenever in its opinion it would be to its advantage. Such a procedure would createa most unsatisfactory state of affairs and largely defeat the purposes of the public servicelaw.

13(Emphasis ours).

One veritable consequence of the deregulation of transport fares is a compounded fare. If transport operators will beauthorized to impose and collect an additional amount equivalent to 20% over and above the authorized fare over aperiod of time, this will unduly prejudice a commuter who will be made to pay a fare that has been computed in a mannersimilar to those of compounded bank interest rates.

Picture this situation. On December 14, 1990, the LTFRB authorized provincial bus operators to collect a thirty-seven(P0.37) centavo per kilometer fare for ordinary buses. At the same time, they were allowed to impose and collect a farerange of plus or minus 15% over the authorized rate. Thus P0.37 centavo per kilometer authorized fare plus P0.05

centavos (which is 15% of P0.37 centavos) is equivalent to P0.42 centavos, the allowed rate in 1990. Supposing theLTFRB grants another five (P0.05) centavo increase per kilometer in 1994, then, the base or reference for computationwould have to be P0.47 centavos (which is P0.42 + P0.05 centavos). If bus operators will exercise their authority toimpose an additional 20% over and above the authorized fare, then the fare to be collected shall amount to P0.56 (that is,P0.47 authorized LTFRB rate plus 20% of P0.47 which is P0.29). In effect, commuters will be continuously subjected, notonly to a double fare adjustment but to a compounding fare as well. On their part, transport operators shall enjoy a biggerchunk of the pie. Aside from fare increase applied for, they can still collect an additional amount by virtue of the authorizedfare range. Mathematically, the situation translates into the following:

Year ** LTFRB authorized Fare Range Fare to berate*** collected perkilometer

1990 P0.37 15% (P0.05) P0.421994 P0.42 + 0.05 = 0.47 20% (P0.09) P0.561998 P0.56 + 0.05 = 0.61 20% (P0.12) P0.732002 P0.73 + 0.05 = 0.78 20% (P0.16) P0.94

Moreover, rate making or rate fixing is not an easy task. It is a delicate and sensitive government function that requiresdexterity of judgment and sound discretion with the settled goal of arriving at a just and reasonable rate acceptable to boththe public utility and the public. Several factors, in fact, have to be taken into consideration before a balance could beachieved. A rate should not be confiscatory as would place an operator in a situation where he will continue to operate ata loss. Hence, the rate should enable public utilities to generate revenues sufficient to cover operational costs and providereasonable return on the investments. On the other hand, a rate which is too high becomes discriminatory. It is contrary topublic interest. A rate, therefore, must be reasonable and fair and must be affordable to the end user who will utilize theservices.

Given the complexity of the nature of the function of rate-fixing and its far-reaching effects on millions of commuters,government must not relinquish this important function in favor of those who would benefit and profit from the industry.Neither should the requisite notice and hearing be done away with. The people, represented by reputable oppositors,deserve to be given full opportunity to be heard in their opposition to any fare increase.

The present administrative procedure,14

to our mind, already mirrors an orderly and satisfactory arrangement for allparties involved. To do away with such a procedure and allow just one party, an interested party at that, to determine whathe rate should be, will undermine the right of the other parties to due process. The purpose of a hearing is precisely todetermine what a just and reasonable rate is.

15 Discarding such procedural and constitutional right is certainly inimical to

our fundamental law and to public interest.


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On the presumption of public need .

A certif icate of public convenience (CPC) is an authorization granted by the LTFRB for the operation of land transportationservices for public use as required by law. Pursuant to Section 16(a) of the Public Service Act, as amended, the followingrequirements must be met before a CPC may be granted, to wit: (i) the applicant must be a citizen of the Philippines, or acorporation or co-partnership, association or joint-stock company constituted and organized under the laws of thePhilippines, at least 60 per centum of its stock or paid-up capital must belong entirely to citizens of the Philippines; (ii) theapplicant must be financially capable of undertaking the proposed service and meeting the responsibilities incident to itsoperation; and (iii) the applicant must prove that the operation of the public service proposed and the authorization to do

business will promote the public interest in a proper and suitable manner . It is understood that there must be proper noticeand hearing before the PSC can exercise its power to issue a CPC.

While adopting in toto the foregoing requisites for the issuance of a CPC, LTFRB Memorandum Circular No. 92-009, PartIV, provides for yet incongruous and contradictory policy guideline on the issuance of a CPC. The guidelines states:

The issuance of a Certificate of Public Convenience is determined by public need. The presumption of public need for a service shall be deemed in favor of the applicant, while the burden of proving that there

is no need for the proposed service shall be the oppositor's. (Emphasis ours).

The above-quoted provision is entirely incompatible and inconsistent with Section 16(c)(iii) of the Public Service Act whichrequires that before a CPC will be issued, the applicant must prove by proper notice and hearing that the operation of thepublic service proposed will promote public interest in a proper and suitable manner. On the contrary, the policy guideline

states that the presumption of public need for a public service shall be deemed in favor of the applicant. In case of conflictbetween a statute and an administrative order, the former must prevail.

By its terms, public convenience or necessity generally means something fitting or suited to the public need. 16

As one ofthe basic requirements for the grant of a CPC, public convenience and necessity exists when the proposed facility orservice meets a reasonable want of the public and supply a need which the existing facilities do not adequately supply.The existence ornon-existence of public convenience and necessity is therefore a question of fact that must be established by evidence,real and/or testimonial; empirical data; statistics and such other means necessary, in a public hearing conducted for thatpurpose. The object and purpose of such procedure, among other things, is to look out for, and protect, the interests ofboth the public and the existing transport operators.

Verily, the power of a regulatory body to issue a CPC is founded on the condition that after full-dress hearing and

investigation, it shall find, as a fact, that the proposed operation is for the convenience of the public. 17 Basic convenienceis the primary consideration for which a CPC is issued, and that fact alone must be consistently borne in mind. Also,existing operators in subject routes must be given an opportunity to offer proof and oppose the application. Therefore, anapplicant must, at all times, be required to prove his capacity and capability to furnish the service which he hasundertaken torender.

18 And all this will be possible only if a public hearing were conducted for that purpose.

Otherwise stated, the establishment of public need in favor of an applicant reverses well-settled and institutionalized judicial, quasi-judicial and administrative procedures. It allows the party who initiates the proceedings to prove, by mereapplication, his affirmative allegations. Moreover, the offending provisions of the LTFRB memorandum circular in questionwould in effect amend the Rules of Court by adding another disputable presumption in the enumeration of 37presumptions under Rule 131, Section 5 of the Rules of Court. Such usurpation of this Court's authority cannot becountenanced as only this Court is mandated by law to promulgate rules concerning pleading, practice and procedure.

19

Deregulation, while it may be ideal in certain situations, may not be ideal at all in our country given the presentcircumstances. Advocacy of liberalized franchising and regulatory process is tantamount to an abdication by thegovernment of its inherent right to exercise police power, that is, the right of government to regulate public utilities forprotection of the public and the utilities themselves.

While we recognize the authority of the DOTC and the LTFRB to issue administrative orders to regulate the transportsector, we find that they committed grave abuse of discretion in issuing DOTC Department OrderNo. 92-587 defining the policy framework on the regulation of transport services and LTFRB Memorandum Circular No.92-009 promulgating the implementing guidelines on DOTC Department Order No. 92-587, the said administrativeissuances being amendatory and violative of the Public Service Act and the Rules of Court. Consequently, we rule thatthe twenty (20%) per centum fare increase imposed by respondent PBOAP on March 16, 1994 without the benefit of a


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petition and a public hearing is null and void and of no force and effect. No grave abuse of discretion however wascommitted in the issuance of DOTC Memorandum Order No. 90-395 and DOTC Memorandum dated October 8, 1992, thesame being merely internal communications between administrative officers.

WHEREFORE, in view of the foregoing, the instant petition is hereby GRANTED and the challenged administrativeissuances and orders, namely: DOTC Department Order No. 92-587, LTFRB Memorandum CircularNo. 92-009, and the order dated March 24, 1994 issued by respondent LTFRB are hereby DECLARED contrary to lawand invalid insofar as they affect provisions therein (a) delegating to provincial bus and jeepney operators the authority toincrease or decrease the duly prescribed transportation fares; and (b) creating a presumption of public need for a service

in favor of the applicant for a certificate of public convenience and placing the burden of proving that there is no need forthe proposed service to the oppositor.

The Temporary Restraining Order issued on June 20, 1994 is hereby MADE PERMANENT insofar as it enjoined the busfare rate increase granted under the provisions of the aforementioned administrative circulars, memoranda and/or ordersdeclared invalid.

No pronouncement as to costs.

SO ORDERED.


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G.R. No. 101279 August 6, 1992

PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC., petitioner,vs.HON. RUBEN D. TORRES, as Secretary of the Department of Labor & Employment, and JOSE N. SARMIENTO, asAdministrator of the PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION,respondents.

De Guzman, Meneses & Associates for petitioner.

GRIÑO-AQUINO, J.:

This petition for prohibition with temporary restraining order was filed by the Philippine Association of Service Exporters(PASEI, for short), to prohibit and enjoin the Secretary of the Department of Labor and Employment (DOLE) and the Administrator of the Philippine Overseas Employment Administration (or POEA) from enforcing and implementing DOLEDepartment Order No. 16, Series of 1991 and POEA Memorandum Circulars Nos. 30 and 37, Series of 1991, temporarilysuspending the recruitment by private employment agencies of Filipino domestic helpers for Hong Kong and vesting in theDOLE, through the facilities of the POEA, the task of processing and deploying such workers.

PASEI is the largest national organization of private employment and recruitment agencies duly licensed and authorizedby the POEA, to engaged in the business of obtaining overseas employment for Filipino landbased workers, includingdomestic helpers.

On June 1, 1991, as a result of published stories regarding the abuses suffered by Filipino housemaids employed in HongKong, DOLE Secretary Ruben D. Torres issued Department Order No. 16, Series of 1991, temporarily suspending therecruitment by private employment agencies of "Filipino domestic helpers going to Hong Kong" (p. 30, Rollo). The DOLEitself, through the POEA took over the business of deploying such Hong Kong-bound workers.

In view of the need to establish mechanisms that will enhance the protection for Filipino domestic helpersgoing to Hong Kong, the recruitment of the same by private employment agencies is hereby temporarilysuspended effective 1 July 1991. As such, the DOLE through the facilities of the Philippine OverseasEmployment Administration shall take over the processing and deployment of household workers boundfor Hong Kong, subject to guidelines to be issued for said purpose.

In support of this policy, all DOLE Regional Directors and the Bureau of Local Employment's regionaloffices are likewise directed to coordinate with the POEA in maintaining a manpower pool of prospectivedomestic helpers to Hong Kong on a regional basis.

For compliance. (Emphasis ours; p. 30, Rollo.)

Pursuant to the above DOLE circular, the POEA issued Memorandum Circular No. 30, Series of 1991, dated July 10,1991, providing GUIDELINES on the Government processing and deployment of Filipino domestic helpers to Hong Kongand the accreditation of Hong Kong recruitment agencies intending to hire Filipino domestic helpers.

Subject: Guidelines on the Temporary Government Processing and Deployment of Domestic Helpers toHong Kong.

Pursuant to Department Order No. 16, series of 1991 and in order to operationalize the temporarygovernment processing and deployment of domestic helpers (DHs) to Hong Kong resulting from thetemporary suspension of recruitment by private employment agencies for said skill and host market, thefollowing guidelines and mechanisms shall govern the implementation of said policy.

I. Creation of a joint POEA-OWWA Household Workers Placement Unit (HWPU)

An ad hoc, one stop Household Workers Placement Unit [or HWPU] under the supervision of the POEAshall take charge of the various operations involved in the Hong Kong-DH industry segment:


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The HWPU shall have the following functions in coordination with appropriate units and other entitiesconcerned:

1. Negotiations with and Accreditation of Hong Kong Recruitment Agencies

2. Manpower Pooling

3. Worker Training and Briefing

4. Processing and Deployment

5. Welfare Programs

II. Documentary Requirements and Other Conditions for Accreditation of Hong Kong Recruitment Agencies or Principals

Recruitment agencies in Hong Kong intending to hire Filipino DHs for their employers may negotiate withthe HWPU in Manila directly or through the Philippine Labor Attache's Office in Hong Kong.

xxx xxx xxx

X. Interim Arrangement

All contracts stamped in Hong Kong as of June 30 shall continue to be processed by POEA unti l 31 July1991 under the name of the Philippine agencies concerned. Thereafter, all contracts shall be processedwith the HWPU.

Recruitment agencies in Hong Kong shall submit to the Philippine Consulate General in Hong kong a listof their accepted applicants in their pool within the last week of July. The last day of acceptance shall beJuly 31 which shall then be the basis of HWPU in accepting contracts for processing. After the exhaustionof their respective pools the only source of applicants will be the POEA manpower pool.

For strict compliance of all concerned. (pp. 31-35, Rollo.)

On August 1, 1991, the POEA Administrator also issued Memorandum Circular No. 37, Series of 1991, on the processingof employment contracts of domestic workers for Hong Kong.

TO: All Philippine and Hong Kong Agencies engaged in the recruitment of Domestic helpers for HongKong

Further to Memorandum Circular No. 30, series of 1991 pertaining to the government processing anddeployment of domestic helpers (DHs) to Hong Kong, processing of employment contracts which havebeen attested by the Hong Kong Commissioner of Labor up to 30 June 1991 shall be processed by thePOEA Employment Contracts Processing Branch up to 15 August 1991 only.

Effective 16 August 1991, all Hong Kong recruitment agent/s hiring DHs from the Philippines shall recruit

under the new scheme which requires prior accreditation which the POEA.

Recruitment agencies in Hong Kong may apply for accreditation at the Office of the Labor Attache,Philippine Consulate General where a POEA team is posted until 31 August 1991. Thereafter, those whofailed to have themselves accredited in Hong Kong may proceed to the POEA-OWWA HouseholdWorkers Placement Unit in Manila for accreditation before their recruitment and processing of DHs shallbe allowed.

Recruitment agencies in Hong Kong who have some accepted applicants in their pool after the cut-offperiod shall submit this list of workers upon accreditation. Only those DHs in said list will be allowedprocessing outside of the HWPU manpower pool.


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For strict compliance of all concerned. (Emphasis supplied, p. 36, Rollo.)

On September 2, 1991, the petitioner, PASEI, filed this petition for prohibition to annul the aforementioned DOLE andPOEA circulars and to prohibit their implementation for the following reasons:

1. that the respondents acted with grave abuse of discretion and/or in excess of their rule-makingauthority in issuing said circulars;

2. that the assailed DOLE and POEA circulars are contrary to the Constitution, are unreasonable, unfair

and oppressive; and

3. that the requirements of publication and filing with the Office of the National Administrative Registerwere not complied with.

There is no merit in the first and second grounds of the petition.

Article 36 of the Labor Code grants the Labor Secretary the power to restrict and regulate recruitment and placementactivities.

Art. 36. Regulatory Power . — The Secretary of Labor shall have the power to restrict and regulate therecruitment and placement activities of all agencies within the coverage of this title [Regulation of

Recruitment and Placement Activities] and is hereby authorized to issue orders and promulgate rules andregulations to carry out the objectives and implement the provisions of this title. (Emphasis ours.)

On the other hand, the scope of the regulatory authority of the POEA, which was created by Executive Order No. 797 onMay 1, 1982 to take over the functions of the Overseas Employment Development Board, the National Seamen Board,and the overseas employment functions of the Bureau of Employment Services, is broad and far-ranging for:

1. Among the functions inherited by the POEA from the defunct Bureau of Employment Services was thepower and duty:

"2. To establish and maintain a registration and/or licensing system to regulate privatesector participation in the recruitment and placement of workers, locally and overseas, . .." (Art. 15, Labor Code, Emphasis supplied). (p. 13, Rollo.)

2. It assumed from the defunct Overseas Employment Development Board the power and duty:

3. To recruit and place workers for overseas employment of Filipino contract workers ona government to government arrangement and in such other sectors as policy maydictate . . . (Art. 17, Labor Code.) (p. 13, Rollo.)

3. From the National Seamen Board, the POEA took over:

2. To regulate and supervise the activities of agents or representatives of shippingcompanies in the hiring of seamen for overseas employment; and secure the bestpossible terms of employment for contract seamen workers and secure compliance

therewith. (Art. 20, Labor Code.)

The vesture of quasi-legislative and quasi-judicial powers in administrative bodies is not unconstitutional, unreasonableand oppressive. It has been necessitated by "the growing complexity of the modern society" (Solid Homes, Inc. vs.Payawal, 177 SCRA 72, 79). More and more administrative bodies are necessary to help in the regulation of society'sramified activities. "Specialized in the particular field assigned to them, they can deal with the problems thereof with moreexpertise and dispatch than can be expected from the legislature or the courts of justice" (Ibid .).

It is noteworthy that the assailed circulars do not prohibit the petitioner from engaging in the recruitment and deploymentof Filipino landbased workers for overseas employment. A careful reading of the challenged administrative issuancesdiscloses that the same fall within the "administrative and policing powers expressly or by necessary implicationconferred" upon the respondents (People vs. Maceren, 79 SCRA 450). The power to "restrict and regulate conferred by Article 36 of the Labor Code involves a grant of police power (City of Naga vs. Court of Appeals, 24 SCRA 898). To


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"restrict" means "to confine, limit or stop" (p. 62, Rollo) and whereas the power to "regulate" means "the power to protect,foster, promote, preserve, and control with due regard for the interests, first and foremost, of the public, then of the utilityand of its patrons" (Philippine Communications Satellite Corporation vs. Alcuaz, 180 SCRA 218).

The Solicitor General, in his Comment, aptly observed:

. . . Said Administrative Order [i.e., DOLE Administrative Order No. 16] merely restricted the scope orarea of petitioner's business operations by excluding therefrom recruitment and deployment of domestichelpers for Hong Kong till after the establishment of the "mechanisms" that will enhance the protection of

Filipino domestic helpers going to Hong Kong. In fine, other than the recruitment and deployment ofFilipino domestic helpers for Hongkong, petitioner may still deploy other class of Filipino workers either foHongkong and other countries and all other classes of Filipino workers for other countries.

Said administrative issuances, intended to curtail, if not to end, rampant violations of the rule againstexcessive collections of placement and documentation fees, travel fees and other charges committed byprivate employment agencies recruiting and deploying domestic helpers to Hongkong. [They arereasonable, valid and justified under the general welfare clause of the Constitution, since the recruitment

and deployment business, as it is conducted today, is affected with public interest.

xxx xxx xxx

The alleged takeover [of the business of recruiting and placing Filipino domestic helpers in Hongkong] is

merely a remedial measure, and expires after its purpose shall have been attained. This is evident fromthe tenor of Administrative Order No. 16 that recruitment of Filipino domestic helpers going to Hongkongby private employment agencies are hereby "temporarily suspended effective July 1, 1991."

The alleged takeover is limited in scope, being confined to recruitment of domestic helpers going toHongkong only.

xxx xxx xxx

. . . the justification for the takeover of the processing and deploying of domestic helpers for Hongkongresulting from the restriction of the scope of petitioner's business is confined solely to the unscrupulouspractice of private employment agencies victimizing applicants for employment as domestic helpers for

Hongkong and not the whole recruitment business in the Philippines. (pp. 62-65, Rollo.)

The questioned circulars are therefore a valid exercise of the police power as delegated to the executive branch ofGovernment.

Nevertheless, they are legally invalid, defective and unenforceable for lack of power publication and filing in the Office ofthe National Administrative Register as required in Article 2 of the Civil Code, Article 5 of the Labor Code and Sections3(1) and 4, Chapter 2, Book VII of the Administrative Code of 1987 which provide:

Art. 2. Laws shall take effect after fifteen (15) days following the completion of their publication in theOfficial Gazatte, unless it is otherwise provided. . . . (Civil Code.)

Art. 5. Rules and Regulations. — The Department of Labor and other government agencies charged with

the administration and enforcement of this Code or any of its parts shall promulgate the necessaryimplementing rules and regulations. Such rules and regulations shall become effective fifteen (15)daysafter announcement of their adoption in newspapers of general circulation. (Emphasis supplied,Labor Code, as amended.)

Sec. 3. Filing . — (1) Every agency shall file with the University of the Philippines Law Center, three (3)certified copies of every rule adopted by it . Rules in force on the date of effectivity of this Code which arenot filed within three (3) months shall not thereafter be the basis of any sanction against any party orpersons. (Emphasis supplied, Chapter 2, Book VII of the Administrative Code of 1987.)

Sec. 4. Effectivity . — In addition to other rule-making requirements provided by law not inconsistent withthis Book, each rule shall become effective fifteen (15) days from the date of filing as above


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provided unless a different date is fixed by law, or specified in the rule in cases of imminent danger topublic health, safety and welfare, the existence of which must be expressed in a statement accompanyingthe rule. The agency shall take appropriate measures to make emergency rules known to persons whomay be affected by them. (Emphasis supplied, Chapter 2, Book VII of the Administrative Code of 1987).

Once, more we advert to our ruling in Tañada vs. Tuvera, 146 SCRA 446 that:

. . . Administrative rules and regulations must also be published if their purpose is to enforce or implementexisting law pursuant also to a valid delegation. (p. 447.)

Interpretative regulations and those merely internal in nature, that is, regulating only the personnel of theadministrative agency and not the public, need not be published. Neither is publication required of the so-called letters of instructions issued by administrative superiors concerning the rules or guidelines to befollowed by their subordinates in the performance of their duties. (p. 448.)

We agree that publication must be in full or it is no publication at all since its purpose is to inform thepublic of the content of the laws. (p. 448.)

For lack of proper publication, the administrative circulars in question may not be enforced and implemented.

WHEREFORE, the writ of prohibition is GRANTED. The implementation of DOLE Department Order No. 16, Series of1991, and POEA Memorandum Circulars Nos. 30 and 37, Series of 1991, by the public respondents is herebySUSPENDED pending compliance with the statutory requirements of publication and filing under the aforementioned lawsof the land.

SO ORDERED.


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G.R. No. 127325 March 19, 1997

MIRIAM DEFENSOR SANTIAGO, ALEXANDER PADILLA, and MARIA ISABEL ONGPIN, petitioners,vs.COMMISSION ON ELECTIONS, JESUS DELFIN, ALBERTO PEDROSA & CARMEN PEDROSA, in their capacities asfounding members of the People's Initiative for Reforms, Modernization and Action (PIRMA), respondents.

SENATOR RAUL S. ROCO, DEMOKRASYA-IPAGTANGGOL ANG KONSTITUSYON (DIK), MOVEMENT OFATTORNEYS FOR BROTHERHOOD INTEGRITY AND NATIONALISM, INC. (MABINI), INTEGRATED BAR OF THE

PHILIPPINES (IBP), and LABAN NG DEMOKRATIKONG PILIPINO (LABAN), petitioners-intervenors.

DAVIDE, JR., J.:

The heart of this controversy brought to us by way of a petition for prohibition under Rule 65 of the Rules of Court is theright of the people to directly propose amendments to the Constitution through the system of initiative under Section 2 of Article XVII of the 1987 Constitution. Undoubtedly, this demands special attention, as this system of initiative wasunknown to the people of this country, except perhaps to a few scholars, before the drafting of the 1987 Constitution. The1986 Constitutional Commission itself, through the original proponent

1 and the main sponsor 2 of the proposed Article on Amendments or Revision of the Constitution, characterized this system as "innovative".

3 Indeed it is, for both under the1935 and 1973 Constitutions, only two methods of proposing amendments to, or revision of, the Constitution were

recognized, viz ., (1) by Congress upon a vote of three-fourths of all its members and (2) by a constitutionalconvention.

4 For this and the other reasons hereafter discussed, we resolved to give due course to this petition.

On 6 December 1996, private respondent Atty. Jesus S. Delfin filed with public respondent Commission on Elections(hereafter, COMELEC) a "Petition to Amend the Constitution, to Lift Term Limits of Elective Officials, by People's Initiative(hereafter, Delfin Petition)

5 wherein Delfin asked the COMELEC for an order

1. Fixing the time and dates for signature gathering all over the country;

2. Causing the necessary publications of said Order and the attached "Petition for Initiative on the 1987Constitution, in newspapers of general and local circulation;

3. Instructing Municipal Election Registrars in all Regions of the Philippines, to assist Petitioners andvolunteers, in establishing signing stations at the time and on the dates designated for the purpose.

Delfin alleged in his petition that he is a founding member of the Movement for People's Initiative, 6 a group of citizens

desirous to avail of the system intended to institutionalize people power; that he and the members of the Movement andother volunteers intend to exercise the power to directly propose amendments to the Constitution granted under Section2, Article XVII of the Constitution; that the exercise of that power shall be conducted in proceedings under the control andsupervision of the COMELEC; that, as required in COMELEC Resolution No. 2300, signature stations shall be establishedall over the country, with the assistance of municipal election registrars, who shall verify the signatures affixed byindividual signatories; that before the Movement and other volunteers can gather signatures, it is necessary that the timeand dates to be designated for the purpose be first fixed in an order to be issued by the COMELEC; and that toadequately inform the people of the electoral process involved, it is likewise necessary that the said order, as well as thePetition on which the signatures shall be affixed, be published in newspapers of general and local circulation, under the

control and supervision of the COMELEC.

The Delfin Petition further alleged that the provisions sought to be amended are Sections 4 and 7 of Article VI, 7Section 4

of Article VII, 8 and Section 8 of Article X 9 of the Constitution. Attached to the petition is a copy of a "Petition for Initiative

on the 1987 Constitution"10 embodying the proposed amendments which consist in the deletion from the aforecited

sections of the provisions concerning term limits, and with the following proposition:

DO YOU APPROVE OF LIFTING THE TERM LIMITS OF ALL ELECTIVE GOVERNMENT OFFICIALS, AMENDING FOR THE PURPOSE SECTIONS 4 AND 7 OF ARTICLE VI, SECTION 4 OF ARTICLE VII, AND SECTION 8 OF ARTICLE X OF THE 1987 PHILIPPINE CONSTITUTION?


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According to Delfin, the said Petition for Initiative will first be submitted to the people, and after it is signed by at leasttwelve per cent of the total number of registered voters in the country it will be formally filed with the COMELEC.

Upon the filing of the Delfin Petition, which was forthwith given the number UND 96-037 (INITIATIVE), the COMELEC,through its Chairman, issued an Order

11 (a) directing Delfin "to cause the publication of the petition, together with theattached Petition for Initiative on the 1987 Constitution (including the proposal, proposed constitutional amendment, andthe signature form), and the notice of hearing in three (3) daily newspapers of general circulation at his own expense" notlater than 9 December 1996; and (b) setting the case for hearing on 12 December 1996 at 10:00 a.m.

At the hearing of the Delfin Petition on 12 December 1996, the following appeared: Delfin and Atty. Pete Q. Quadra;representatives of the People's Initiative for Reforms, Modernization and Action (PIRMA); intervenor-oppositor SenatorRaul S. Roco, together with his two other lawyers, and representatives of, or counsel for, the Integrated Bar of thePhilippines (IBP), Demokrasya-Ipagtanggol ang Konstitusyon (DIK), Public Interest Law Center, and Laban ngDemokratikong Pilipino (LABAN).

12 Senator Roco, on that same day, filed a Motion to Dismiss the Delfin Petition on theground that it is not the initiatory petition properly cognizable by the COMELEC.

After hearing their arguments, the COMELEC directed Delfin and the oppositors to file their "memoranda and/oroppositions/memoranda" within five days.

13

On 18 December 1996, the petitioners herein — Senator Miriam Defensor Santiago, Alexander Padilla, and Maria IsabelOngpin — filed this special civil action for prohibition raising the following arguments:

(1) The constitutional provision on people's initiative to amend the Constitution can only be implementedby law to be passed by Congress. No such law has been passed; in fact, Senate Bill No. 1290 entitled An Act Prescribing and Regulating Constitution Amendments by People's Initiative, which petitioner SenatorSantiago filed on 24 November 1995, is still pending before the Senate Committee on Constitutional Amendments.

(2) It is true that R.A. No. 6735 provides for three systems of initiative, namely, initiative on theConstitution, on statutes, and on local legislation. However, it failed to provide any subtitle on initiative onthe Constitution, unlike in the other modes of initiative, which are specifically provided for in Subtitle II andSubtitle III. This deliberate omission indicates that the matter of people's initiative to amend theConstitution was left to some future law. Former Senator Arturo Tolentino stressed this deficiency in thelaw in his privilege speech delivered before the Senate in 1994: "There is not a single word in that lawwhich can be considered as implementing [the provision on constitutional initiative]. Such implementing

provisions have been obviously left to a separate law.

(3) Republic Act No. 6735 provides for the effectivity of the law after publication in print media. Thisindicates that the Act covers only laws and not constitutional amendments because the latter take effectonly upon ratification and not after publication.

(4) COMELEC Resolution No. 2300, adopted on 16 January 1991 to govern "the conduct of initiative onthe Constitution and initiative and referendum on national and local laws, is ultra vires insofarasinitiative on amendments to the Constitution is concerned, since the COMELEC has no power toprovide rules and regulations for the exercise of the right of initiative to amend the Constitution. OnlyCongress is authorized by the Constitution to pass the implementing law.

(5) The people's initiative is limited to amendments to the Constitution, not to revision thereof. Extendingor lifting of term limits constitutes a revision and is, therefore, outside the power of the people's initiative.

(6) Finally, Congress has not yet appropriated funds for people's initiative; neither the COMELEC nor anyother government department, agency, or office has realigned funds for the purpose.

To justify their recourse to us via the special civil action for prohibition, the petitioners allege that in the event theCOMELEC grants the Delfin Petition, the people's initiative spearheaded by PIRMA would entail expenses to the nationaltreasury for general re-registration of voters amounting to at least P180 million, not to mention the millions of additionalpesos in expenses which would be incurred in the conduct of the initiative itself. Hence, the transcendental importance tothe public and the nation of the issues raised demands that this petition for prohibition be settled promptly and definitely,brushing aside technicalities of procedure and calling for the admission of a taxpayer's and legislator's suit.

14 Besides,there is no other plain, speedy, and adequate remedy in the ordinary course of law.


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On 19 December 1996, this Court (a) required the respondents to comment on the petition within a non-extendible periodof ten days from notice; and (b) issued a temporary restraining order, effective immediately and continuing until furtherorders, enjoining public respondent COMELEC from proceeding with the Delfin Petition, and private respondents Albertoand Carmen Pedrosa from conducting a signature drive for people's initiative to amend the Constitution.

On 2 January 1997, private respondents, through Atty Quadra, filed their Comment15 on the petition. They argue therein

that:

1. IT IS NOT TRUE THAT "IT WOULD ENTAIL EXPENSES TO THE NATIONAL TREASURY FOR

GENERAL REGISTRATION OF VOTERS AMOUNTING TO AT LEAST PESOS: ONE HUNDREDEIGHTY MILLION (P180,000,000.00)" IF THE "COMELEC GRANTS THE PETITION FILED BYRESPONDENT DELFIN BEFORE THE COMELEC.

2. NOT A SINGLE CENTAVO WOULD BE SPENT BY THE NATIONAL GOVERNMENT IF THECOMELEC GRANTS THE PETITION OF RESPONDENT DELFIN. ALL EXPENSES IN THESIGNATURE GATHERING ARE ALL FOR THE ACCOUNT OF RESPONDENT DELFIN AND HISVOLUNTEERS PER THEIR PROGRAM OF ACTIVITIES AND EXPENDITURES SUBMITTED TO THECOMELEC. THE ESTIMATED COST OF THE DAILY PER DIEM OF THE SUPERVISING SCHOOLTEACHERS IN THE SIGNATURE GATHERING TO BE DEPOSITED and TO BE PAID BY DELFIN ANDHIS VOLUNTEERS IS P2,571,200.00;

3. THE PENDING PETITION BEFORE THE COMELEC IS ONLY ON THE SIGNATURE GATHERING

WHICH BY LAW COMELEC IS DUTY BOUND "TO SUPERVISE CLOSELY" PURSUANT TO ITS"INITIATORY JURISDICTION" UPHELD BY THE HONORABLE COURT IN ITS RECENT SEPTEMBER26, 1996 DECISION IN THE CASE OF SUBIC BAY METROPOLITAN AUTHORITY VS.COMELEC, ET AL. G.R. NO. 125416;

4. REP. ACT NO. 6735 APPROVED ON AUGUST 4, 1989 IS THE ENABLING LAW IMPLEMENTINGTHE POWER OF PEOPLE INITIATIVE TO PROPOSE AMENDMENTS TO THE CONSTITUTION.SENATOR DEFENSOR-SANTIAGO'S SENATE BILL NO. 1290 IS A DUPLICATION OF WHAT ARE ALREADY PROVIDED FOR IN REP. ACT NO. 6735;

5. COMELEC RESOLUTION NO. 2300 PROMULGATED ON JANUARY 16, 1991 PURSUANT TO REP. ACT 6735 WAS UPHELD BY THE HONORABLE COURT IN THE RECENT SEPTEMBER 26, 1996DECISION IN THE CASE OF SUBIC BAY METROPOLITAN AUTHORITY VS. COMELEC, ET AL. G.R.

NO. 125416 WHERE THE HONORABLE COURT SAID: "THE COMMISSION ON ELECTIONS CAN DONO LESS BY SEASONABLY AND JUDICIOUSLY PROMULGATING GUIDELINES AND RULES FORBOTH NATIONAL AND LOCAL USE, IN IMPLEMENTING OF THESE LAWS."

6. EVEN SENATOR DEFENSOR-SANTIAGO'S SENATE BILL NO. 1290 CONTAINS A PROVISIONDELEGATING TO THE COMELEC THE POWER TO "PROMULGATE SUCH RULES ANDREGULATIONS AS MAY BE NECESSARY TO CARRY OUT THE PURPOSES OF THIS ACT." (SEC.12, S.B. NO. 1290, ENCLOSED AS ANNEX E, PETITION);

7. THE LIFTING OF THE LIMITATION ON THE TERM OF OFFICE OF ELECTIVE OFFICIALSPROVIDED UNDER THE 1987 CONSTITUTION IS NOT A "REVISION" OF THE CONSTITUTION. IT ISONLY AN AMENDMENT. "AMENDMENT ENVISAGES AN ALTERATION OF ONE OR A FEWSPECIFIC PROVISIONS OF THE CONSTITUTION. REVISION CONTEMPLATES A RE-EXAMINATION

OF THE ENTIRE DOCUMENT TO DETERMINE HOW AND TO WHAT EXTENT IT SHOULD BE ALTERED." (PP. 412-413, 2ND. ED. 1992, 1097 PHIL. CONSTITUTION, BY JOAQUIN G. BERNAS,S.J.).

Also on 2 January 1997, private respondent Delfin filed in his own behalf a Comment16

which starts off with an assertionthat the instant petition is a "knee-jerk reaction to a draft 'Petition for Initiative on the 1987 Constitution'. . . which is notformally filed yet." What he filed on 6 December 1996 was an "Initiatory Pleading" or "Initiatory Petition," which was legallynecessary to start the signature campaign to amend the Constitution or to put the movement to gather signatures underCOMELEC power and function. On the substantive allegations of the petitioners, Delfin maintains as follows:


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(1) Contrary to the claim of the petitioners, there is a law, R.A. No. 6735, which governs the conductof initiative to amend the Constitution. The absence therein of a subtitle for such initiative is not fatal, sincesubtitles are not requirements for the validity or sufficiency of laws.

(2) Section 9(b) of R.A. No. 6735 specifically provides that the proposition in an initiative to amend theConstitution approved by the majority of the votes cast in the plebiscite shall become effective as of theday of the plebiscite.

(3) The claim that COMELEC Resolution No. 2300 is ultra vires is contradicted by (a) Section 2, Article

IX-C of the Constitution, which grants the COMELEC the power to enforce and administer all laws andregulations relative to the conduct of an election, plebiscite, initiative, referendum, and recall; and (b)Section 20 of R.A. 6735, which empowers the COMELEC to promulgate such rules and regulations asmay be necessary to carry out the purposes of the Act.

(4) The proposed initiative does not involve a revision of, but mere amendment to, the Constitutionbecause it seeks to alter only a few specific provisions of the Constitution, or more specifically, only thosewhich lay term limits. It does not seek to reexamine or overhaul the entire document.

As to the public expenditures for registration of voters, Delfin considers petitioners' estimate of P180 million as unreliable,for only the COMELEC can give the exact figure. Besides, if there will be a plebiscite it will be simultaneous with the 1997Barangay Elections. In any event, fund requirements for initiative will be a priority government expense because it will befor the exercise of the sovereign power of the people.

In the Comment17 for the public respondent COMELEC, filed also on 2 January 1997, the Office of the Solicitor General

contends that:

(1) R.A. No. 6735 deals with, inter alia, people's initiative to amend the Constitution. Its Section 2 onStatement of Policy explicitly affirms, recognizes, and guarantees that power; and its Section 3, whichenumerates the three systems of initiative, includes initiative on the Constitution and defines the same asthe power to propose amendments to the Constitution. Likewise, its Section 5 repeatedlymentionsinitiative on the Constitution.

(2) A separate subtitle on initiative on the Constitution is not necessary in R.A. No. 6735 because, beingnational in scope, that system of initiative is deemed included in the subtitle on National Initiative andReferendum; and Senator Tolentino simply overlooked pertinent provisions of the law when he claimedthat nothing therein was provided for initiative on the Constitution.

(3) Senate Bill No. 1290 is neither a competent nor a material proof that R.A. No. 6735 does not dealwith initiative on the Constitution.

(4) Extension of term limits of elected officials constitutes a mere amendment to the Constitution, not arevision thereof.

(5) COMELEC Resolution No. 2300 was validly issued under Section 20 of R.A. No. 6735 and under theOmnibus Election Code. The rule-making power of the COMELEC to implement the provisions of R.A.No. 6735 was in fact upheld by this Court in Subic Bay Metropolitan Authority vs. COMELEC .

On 14 January 1997, this Court (a) confirmed nunc pro tunc the temporary restraining order; (b) noted the aforementionedComments and the Motion to Lift Temporary Restraining Order filed by private respondents through Atty. Quadra, as wellas the latter's Manifestation stating that he is the counsel for private respondents Alberto and Carmen Pedrosa only andthe Comment he filed was for the Pedrosas; and (c) granted the Motion for Intervention filed on 6 January 1997 bySenator Raul Roco and allowed him to file his Petition in Intervention not later than 20 January 1997; and (d) set the casefor hearing on 23 January 1997 at 9:30 a.m.

On 17 January 1997, the Demokrasya-Ipagtanggol ang Konstitusyon (DIK) and the Movement of Attorneys forBrotherhood Integrity and Nationalism, Inc. (MABINI), filed a Motion for Intervention. Attached to the motion was theirPetition in Intervention, which was later replaced by an Amended Petition in Intervention wherein they contend that:


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(1) The Delfin proposal does not involve a mere amendment to, but a revision of, the Constitutionbecause, in the words of Fr. Joaquin Bernas, S.J.,

18 it would involve a change from a political philosophythat rejects unlimited tenure to one that accepts unlimited tenure; and although the change might appearto be an isolated one, it can affect other provisions, such as, on synchronization of elections and on theState policy of guaranteeing equal access to opportunities for public service and prohibiting politicaldynasties.

19 A revisioncannot be done by initiative which, by express provision of Section 2 of Article XVIof the Constitution, is limited to amendments.

(2) The prohibition against reelection of the President and the limits provided for all other national and

local elective officials are based on the philosophy of governance, "to open up the political arena to asmany as there are Filipinos qualified to handle the demands of leadership, to break the concentration ofpolitical and economic powers in the hands of a few, and to promote effective proper empowerment forparticipation in policy and decision-making for the common good"; hence, to remove the term limits is tonegate and nullify the noble vision of the 1987 Constitution.

(3) The Delfin proposal runs counter to the purpose of initiative, particularly in a conflict-of-interestsituation. Initiative is intended as a fallback position that may be availed of by the people only if they aredissatisfied with the performance of their elective officials, but not as a premium for good performance.

20

(4) R.A. No. 6735 is deficient and inadequate in itself to be called the enabling law that implements thepeople'sinitiative on amendments to the Constitution. It fails to state (a) the proper parties who may filethe petition, (b) the appropriate agency before whom the petition is to be filed, (c) the contents of the

petition, (d) the publication of the same, (e) the ways and means of gathering the signatures of the votersnationwide and 3% per legislative district, (f) the proper parties who may oppose or question the veracityof the signatures, (g) the role of the COMELEC in the verification of the signatures and the sufficiency ofthe petition, (h) the appeal from any decision of the COMELEC, (I) the holding of a plebiscite, and (g) theappropriation of funds for such people's initiative. Accordingly, there being no enabling law, theCOMELEC has no jurisdiction to hear Delfin's petition.

(5) The deficiency of R.A. No. 6735 cannot be rectified or remedied by COMELEC Resolution No. 2300,since the COMELEC is without authority to legislate the procedure for a people's initiative under Section 2of Article XVII of the Constitution. That function exclusively pertains to Congress. Section 20 of R.A. No.6735 does not constitute a legal basis for the Resolution, as the former does not set a sufficient standardfor a valid delegation of power.

On 20 January 1997, Senator Raul Roco filed his Petition inIntervention.

21 He avers that R.A. No. 6735 is the enabling law that implements the people's right to initiate constitutionalamendments. This law is a consolidation of Senate Bill No. 17 and House Bill No. 21505; he co-authored the House Billand even delivered a sponsorship speech thereon. He likewise submits that the COMELEC was empowered underSection 20 of that law to promulgate COMELEC Resolution No. 2300. Nevertheless, he contends that the respondentCommission is without jurisdiction to take cognizance of the Delfin Petition and to order its publication because the saidpetition is not the initiatory pleading contemplated under the Constitution, Republic Act No. 6735, and COMELECResolution No. 2300. What vests jurisdiction upon the COMELEC in an initiative on the Constitution is the filing of apetition for initiative which is signed by the required number of registered voters. He also submits that the proponents of aconstitutional amendment cannot avail of the authority and resources of the COMELEC to assist them is securing therequired number of signatures, as the COMELEC's role in an initiative on the Constitution is limited to the determination ofthe sufficiency of the initiative petition and the call and supervision of a plebiscite, if warranted.

On 20 January 1997, LABAN filed a Motion for Leave to Intervene.

The following day, the IBP filed a Motion for Intervention to which it attached a Petition in Intervention raising the followingarguments:

(1) Congress has failed to enact an enabling law mandated under Section 2, Article XVII of the 1987Constitution.

(2) COMELEC Resolution No. 2300 cannot substitute for the required implementing law on the initiative toamend the Constitution.


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(3) The Petition for Initiative suffers from a fatal defect in that it does not have the required number ofsignatures.

(4) The petition seeks, in effect a revision of the Constitution, which can be proposed only by Congress ora constitutional convention.

22

On 21 January 1997, we promulgated a Resolution (a) granting the Motions for Intervention filed by the DIK and MABINIand by the IBP, as well as the Motion for Leave to Intervene filed by LABAN; (b) admitting the Amended Petition inIntervention of DIK and MABINI, and the Petitions in Intervention of Senator Roco and of the IBP; (c) requiring the

respondents to file within a nonextendible period of five days their Consolidated Comments on the aforesaid Petitions inIntervention; and (d) requiring LABAN to file its Petition in Intervention within a nonextendible period of three days fromnotice, and the respondents to comment thereon within a nonextendible period of five days from receipt of the saidPetition in Intervention.

At the hearing of the case on 23 January 1997, the parties argued on the following pivotal issues, which the Courtformulated in light of the allegations and arguments raised in the pleadings so far filed:

1. Whether R.A. No. 6735, entitled An Act Providing for a System of Initiative and Referendum and Appropriating Funds Therefor, was intended to include or cover initiative on amendments to theConstitution; and if so, whether the Act, as worded, adequately covers such initiative.

2. Whether that portion of COMELEC Resolution No. 2300 (In re: Rules and Regulations Governing the

Conduct of Initiative on the Constitution, and Initiative and Referendum on National and Local Laws)regarding the conduct of initiative on amendments to the Constitution is valid , considering the absence inthe law of specific provisions on the conduct of such initiative.

3. Whether the lifting of term limits of elective national and local officials, as proposed in the draft "Petitionfor Initiative on the 1987 Constitution," would constitute a revision of, or an amendment to, theConstitution.

4. Whether the COMELEC can take cognizance of, or has jurisdiction over, a petition solely intended toobtain an order (a) fixing the time and dates for signature gathering; (b) instructing municipal electionofficers to assist Delfin's movement and volunteers in establishing signature stations; and (c) directing orcausing the publication of, inter alia, the unsigned proposed Petition for Initiative on the 1987 Constitution

5. Whether it is proper for the Supreme Court to take cognizance of the petition when there is a pendingcase before the COMELEC.

After hearing them on the issues, we required the parties to submit simultaneously their respective memoranda withintwenty days and requested intervenor Senator Roco to submit copies of the deliberations on House Bill No. 21505.

On 27 January 1997, LABAN filed its Petition in Intervention wherein it adopts the allegations and arguments in the mainPetition. It further submits that the COMELEC should have dismissed the Delfin Petition for failure to state a sufficientcause of action and that the Commission's failure or refusal to do so constituted grave abuse of discretion amounting tolack of ju

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