july 2012 philippine supreme court decisions on political

8/10/2019 July 2012 Philippine Supreme Court Decisions on Political

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Leander illustrates how the right to informational privacy,as a specific component of the right to privacy, may yieldto an overriding legitimate state interest. In similarfashion, the determination of whether the privilege of thewrit of habeas data, being an extraordinary remedy, maybe granted in this case entails a delicate balancing of thealleged intrusion upon the private life of Gamboa and therelevant state interest involved. Gamboa v. P/Ssupt.

Marlou C. Chan, et al., G.R. No. 193636, July 24, 2012. Constitutional construction; verba legis non estrecedendum. One of the primary and basic rules instatutory construction is that where the words of a statuteare clear, plain, and free from ambiguity, it must be givenits literal meaning and applied without attemptedinterpretation. It is a well-settled principle of constitutionalconstruction that the language employed in theConstitution must be given their ordinary meaning exceptwhere technical terms are employed. As much aspossible, the words of the Constitution should be

understood in the sense they have in common use. Whatit says according to the text of the provision to beconstrued compels acceptance and negates the power ofthe courts to alter it, based on the postulate that theframers and the people mean what they say. Verba legisnon est recedendum – from the words of a statute thereshould be no departure.The raison d’ être for the rule is essentially two-fold: First, because it is assumed that the words in whichconstitutional provisions are couched express theobjective sought to be attained; andsecond , because the

Constitution is not primarily a lawyer‟s document butessentially that of the people, in whose consciousness itshould ever be present as an important condition for therule of law to prevail. Chavez v. Judicial and Bar Council ,et al., G.R. No. 202242, July 17, 2012. Eminent domain; determination of just compensation.We also declared in National Power Corporation v.Purefoods Corporation [G.R. No. 160725, September 12,2008] that Section 3A of Republic Act No. 6395, asamended (which provides a fixed formula in thecomputation of just compensation in cases of acquisition

of easements of right of way) is not binding upon thisCourt. This is in keeping with the established rule thatthe determination of “just compensation” in eminentdomain cases is a judicial function. National PowerCorporation vs. Sps. Florimon V. Lleto, et al., G.R. Nos.169957 & 171558, July 11, 2012. Executive power; emergency or calling-out powers ofPresident. [I]t has already been established that there isone repository of executive powers, and that is thePresident of the Republic. This means that when Section1, Article VII of the Constitution speaks of executive

power, it is granted to the President and no one else. Asemphasized by Justice Jose P. Laurel, in his ponencia in[Villena v. Secretary of the Interior , 67 Phil. 541 (1939)]:“With reference to the Executive Department of thegovernment, there is one purpose which is crystal-cleaand is readily visible without the projection of judiciasearchlight, and that is the establishment of a single, notplural, Executive. The first section of Article VII of the

Constitution, dealing with the Executive Departmentbegins with the enunciation of the principle that „Theexecutive power shall be vested in a President of thePhilippines.‟ This means that the President of thePhilippines is the Executive of the Government of thePhilippines, and no other.” Corollarily, it is only thePresident, as Executive, who is authorized to exerciseemergency powers as provided under Section 23, ArticleVI, of the Constitution, as well as what became known asthe calling-out powers under Section 7, Article VIthereof. Jamar M. Kulayan, et al. vs. Gov. Abdusakur M

Tan etc., et al., G.R. No. 187298, July 3, 2012. Executive power; civilian police force; authority of locaexecutives over police. Regarding the country‟s policeforce, Section 6, Article XVI of the Constitution statesthat: “The State shall establish and maintain one policeforce, which shall be national in scope and civilian incharacter, to be administered and controlled by a nationapolice commission. The authority of local executives ovethe police units in their jurisdiction shall be provided bylaw.” A local chief executive, such as the provinciagovernor, exercises operational supervision over the

police, and may exercise control only in day-to-dayoperations … In the discussions of the ConstitutionaCommission regarding the above provision it is clear thathe framers never intended for local chief executives toexercise unbridled control over the police in emergencysituations. This is without prejudice to their authority ovepolice units in their jurisdiction as provided by law, andtheir prerogative to seek assistance from the police in dayto day situations, as contemplated by the ConstitutionaCommission. But as a civilian agency of the governmentthe police, through the NAPOLCOM, properly comes

within, and is subject to, the exercise by the President othe power of executive control. Jamar M. Kulayan, et alvs. Gov. Abdusakur M. Tan etc., et al., G.R. No. 187298July 3, 2012. Executive power; emergency or calling-out powers oflocal executives. Respondents cannot rely on paragraph1, subparagraph (vii) of Article 465 [of the LocaGovernment Code], as the said provision expressly refersto calamities and disasters, whether man-made onatural. The governor, as local chief executive of theprovince, is certainly empowered to enact and implement

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emergency measures during these occurrences. But thekidnapping incident in the case at bar cannot beconsidered as a calamity or a disaster. Respondentscannot find any legal mooring under this provision to justify their actions. Paragraph 2, subparagraph (vi) ofthe same provision is equally inapplicable for tworeasons. First , the Armed Forces of the Philippines doesnot fall under the category of a “national law enforcement

agency,” to which the National Police Commission(NAPOLCOM) and its departments belong. Its mandateis to uphold the sovereignty of the Philippines, supportthe Constitution, and defend the Republic against allenemies, foreign and domestic. Its aim is also to securethe integrity of the national territory. Second , there wasno evidence or even an allegation on record that the localpolice forces were inadequate to cope with the situationor apprehend the violators. If they were inadequate, therecourse of the provincial governor was to ask theassistance of the Secretary of Interior and Local

Government, or such other authorized officials, for theassistance of national law enforcement agencies. JamarM. Kulayan, et al. vs. Gov. Abdusakur M. Tan etc., etal., G.R. No. 187298, July 3, 2012. Executive power; power of reorganization. Section 31 ofExecutive Order No. 292 (E.O. 292), otherwise known asthe Administrative Code of 1987, vests in the Presidentthe continuing authority to reorganize the offices underhim in order to achieve simplicity, economy andefficiency… In the case of Buklod ng Kawaning EIIB v. Zamora [G.R.

Nos. 142801-802, July 10, 2001], the Court affirmed thatthe President‟s authority to carry out a reorganization inany branch or agency of the executive department is anexpress grant by the legislature by virtue of E.O. 292,thus: “But of course, the list of legal basis author izing thePresident to reorganize any department or agency in theexecutive branch does not have to end here. We mustnot lose sight of the very source of the power – that whichconstitutes an express grant of power. Under Section 31,Book III of Executive Order No. 292 (otherwise known asthe Administrative Code of 1987), „the President, subject

to the policy of the Executive Office and in order toachieve simplicity, economy and efficiency, shall have thecontinuing authority to reorganize the administrativestructure of the Office of the President.‟ For this purpose,he may transfer the functions of other Departments or Agencies to the Office of the President.” Pichay, Jr. v.Office of the Deputy Executive Secretary for Legal Affairs-Investigative and Adjudicatory Division, et al., G.R.No. 196425, July 24, 2012. Executive power; power of reorganization; rationale. Andin Domingo v. Zamora [G.R. No. 142283, February 6,

2003], the Court gave the rationale behind the President‟scontinuing authority in this wise: “The law grants thePresident this power in recognition of the recurring needof every President to reorganize his office „to achievesimplicity, economy and efficiency.‟ The Office of thePresident is the nerve center of the Executive Branch. Toremain effective and efficient, the Office of the Presidentmust be capable of being shaped and reshaped by the

President in the manner he deems fit to carry out hisdirectives and policies. After all, the Office of thePresident is the command post of the President.” PichayJr. v. Office of the Deputy Executive Secretary for Lega Affairs-Investigative and Adjudicatory Division, et al., G.RNo. 196425. July 24, 2012. Executive power; power of reorganization; nature.Generally, this authority to implement organizationachanges is limited to transferring either an office or afunction from the Office of the President to anotheDepartment or Agency, and the other way around. Only

Section 31(1) [of the Administrative Code] gives thePresident a virtual freehand in dealing with the internastructure of the Office of the President Proper by allowinghim to take actions as extreme as abolition, consolidationor merger of units, apart from the less drastic move oftransferring functions and offices from one unit toanother. Again, in Domingo v. Zamora, the Court noted:“However, the President‟s power to reorganize the Officeof the President under Section 31 (2) and (3) of EO 292should be distinguished from his power to reorganize theOffice of the President Proper . Under Section 31 (1) o

EO 292, the President can reorganize the Office of thePresident Proper byabolishing, consolidating omerging units, or by transferring functions from one unito another. In contrast, under Section 31 (2) and (3) oEO 292, the President‟s power to reorganize officesoutside the Office of the President Proper but still withinthe Office of the President is limited tomerelytransferring functions or agencies from the Officeof the President to Departments or Agencies, andviceversa.” The distinction between the allowable organizationa

actions under Section 31(1) on the one hand and Section31 (2) and (3) on the other is crucial not only as it affectsemployees‟ tenurial security but also insofar as it touchesupon the validity of the reorganization, that is, whetherthe executive actions undertaken fall within the limitationsprescribed under E.O. 292. When the PAGC wascreated under E.O. 12, it was composed of a Chairmanand two (2) Commissioners who held the ranks ofPresidential Assistant II and I, respectively, and wasplaced directly “under the Office of the President.” On theother hand, the ODESLA, to which the functions of the













PAGC have now been transferred, is an office within theOffice of the President Proper . Since both of theseoffices belong to the Office of the President Proper , thereorganization by way of abolishing the PAGCandtransferring its functions to the ODESLA is allowableunder Section 31 (1) of E.O. 292. Pichay, Jr. v. Office ofthe Deputy Executive Secretary for Legal Affairs-Investigative and Adjudicatory Division, et al., G.R. No.

196425, July 24, 2012. Eminent domain; what constitutes “taking.” The NPC,relying on [Section 3A of Republic Act No. 6395], arguesthat the CA erred when it ordered the payment of justcompensation for the properties in question, given thatmost of the properties were subject only to an aerialeasement of right of way, with the NPC requiring the useof the area above the subject lands for its transmissionlines. We have already established in a number of casesthe flaw behind the NPC‟s argument. At the heart of thisargument is the mistaken assumption that what are

involved are mere liens on the property in the form ofaerial easements. While it may be true that thetransmission lines merely pass over the affectedproperties, the easement imposes the additional limitationthat the landowners are prohibited from constructing anyimprovements or planting any trees that exceed three (3)meters within the aerial right of way area. This prohibitionclearly interferes with the landowners‟ right to possessand enjoy their properties… Apart from interfering with the attributes of ownership, wehave articulated in our observation inNational Power

Corp. v. Sps. Gutierrez [271 Phil. 1 (1991)]that thesetransmission lines, because of the high-tension currentthat passes through them, pose a danger to the lives andlimbs of those in the surrounding areas, and, thus, serveto limit the activities that can be done on theselands. National Power Corporation vs. Sps. Florimon V.Lleto, et al., G.R. Nos. 169957 & 171558, July 11, 2012. Impeachment; nature of. Impeachment, described as“the most formidable weapon in the arsenal ofdemocracy,” was foreseen as creating divisions,partialities and enmities, or highlighting pre-existing

factions with the greatest danger that “the decision will beregulated more by the comparative strength of parties,than by the real demonstrations of innocence or guilt.” Given their concededly political character, the preciserole of the judiciary in impeachment cases is a matter ofutmost importance to ensure the effective functioning ofthe separate branches while preserving the structure ofchecks and balance in our government. Moreover, in this jurisdiction, the acts of any branch or instrumentality ofthe government, including those traditionally entrusted to

the political departments, are proper subjects of judiciareview if tainted with grave abuse or arbitrariness.Impeachment refers to the power of Congress to removea public official for serious crimes or misconduct asprovided in the Constitution. A mechanism designed tocheck abuse of power, impeachment has its roots in Athens and was adopted in the United States (USthrough the influence of English common law on the

Framers of the US Constitution.

Our own Constitution‟s provisions on impeachment wereadopted from the US Constitution… Corona v. Senate othe Philippines sitting as an Impeachment Court , eal., G.R. No. 200242, July 17, 2012. Impeachment; power of judicial review. In the firsimpeachment case decided by this Court,Francisco, Jr. vNagmamalasakit na mga Manananggol ng mgaManggagawang Pilipino, Inc. [G.R. No. 160261November 10, 2003], we ruled that the power of judicia

review in this jurisdiction includes the power of reviewover justiciable issues in impeachment proceedings.Subsequently, inGutierrez v. House of RepresentativesCommittee on Justice [G.R. No. 193459, February 152011], the Court resolved the question of the validity ofthe simultaneous referral of two impeachment complaintsagainst petitioner Ombudsman which was allegedly aviolation of the due process clause and of the one yeabar provision … In the meantime, the impeachment trial had beenconcluded with the conviction of petitioner by more than

the required majority vote of the Senator-Judges.Petitioner immediately accepted the verdict and withouany protest vacated his office. In fact, the Judicial andBar Council is already in the process of screeningapplicants and nominees, and the President of thePhilippines is expected to appoint a new Chief Justicewithin the prescribed 90-day period from among thosecandidates shortlisted by the JBC. Unarguably, theconstitutional issue raised by petitioner had been mootedby supervening events and his own acts. Corona vSenate of the Philippines sitting as an Impeachmen

Court , et al., G.R. No. 200242, July 17, 2012. Judicial and Bar Council; composition. As petitionecorrectly posits, the use of the singular letter “apreceding “representative of Congress” is unequivocaand leaves no room for any other construction. It isindicative of what the members of the ConstitutionaCommission had in mind, that is, Congress maydesignate only one (1) representative to the JBC. Had ibeen the intention that more than one (1) representativefrom the legislature would sit in the JBC, the Framerscould have, in no uncertain terms, so provided. Chavez













allowance (RATA); 2. Clothing and laundry allowance; 3.Subsistence allowance of marine officers and crew onboard government vessels; 4. Subsistence allowance ofhospital personnel; 5. Hazard pay; 6. Allowances offoreign service personnel stationed abroad; and 7. Suchother additional compensation not otherwise specifiedherein as may be determined by the DBM.

Only those additional compensation benefits beingreceived by incumbents as of 1 July 1989, which were notintegrated into the standardized salary rates, shallcontinue to be authorized.

In this case, the incentive allowances granted underResolution No.464 are clearly not among thoseenumerated under R.A. 6758. Neither has there beenany allegation that the allowances were specificallydetermined by the DBM to be an exception to thestandardized salary rates. Hence, such allowances can

no longer be granted after the effectivity of R.A.6758. Abellanosa, et al. v. Commission on Audit andNational Housing Authority , G.R. No. 185806, July 24,2012.

Public officers; validity of per diems paid to ex-officiomembers of PEZA. PEZA‟s insistence that there is legalbasis in its grant of per diems to the ex officio members ofits Board does not hold water. The constitutionalprohibition explained in [Civil Liberties Union v.Executive Secretary, G.R. Nos. 83896 & 83815, February

22, 1991] still stands and this Court finds no reason torevisit the doctrine laid down therein as saidinterpretation, to this Court‟s mind, is in consonance withwhat our Constitution provides … In Civil Liberties Union,this Court clarified the prohibition under Section 13, Article VII of the Constitution and emphasized that apublic official holding an ex officio position as provided bylaw has no right to receive additional compensation forthe ex officio position. This Court ruled: “It bearsrepeating though that in order that such additional dutiesor functions may not transgress the prohibition embodied

in Section 13, Article VII of the 1987 Constitution, suchadditional duties or functions must be required by the primary functions of the official concerned, who is to perform the same in an ex-officio capacity as provided bylaw, without receiving any additional compensationtherefor . The ex-officio position being actually and inlegal contemplation part of the principal office, it followsthat the official concerned has no right to receiveadditional compensation for his services in the saidposition. The reason is that these services are alreadypaid for and covered by the compensation attached to his

principal office. It should be obvious that if, say, theSecretary of Finance attends a meeting of the MonetaryBoard as an ex-officiomember thereof, he is actually andin legal contemplation performing the primary function ofhis principal office in defining policy in monetary andbanking matters, which come under the jurisdiction of hisdepartment. For such attendance, therefore, he is noentitled to collect any extra compensation, whether it be

in the form of a per diem or an honorarium or anallowance, or some other such euphemism. By whatevename it is designated, such additional compensation isprohibited by the Constitution.” Philippine EconomicZone Authority v. Commission on Audit and Reynaldo AVillar, Chairman, Commission on Audit , G.R. No. 189767July 3, 2012.

Public officers; liability of public officer executingcontract without authority. Section 103 of P.D. 1445declares that expenditures of government funds or uses

of government property in violation of law or regulationsshall be a personal liability of the official or employeefound to be directly responsible therefor. The publicofficial‟s personal liability arises only if the expenditure ofgovernment funds was made in violation of law. In thiscase, petitioner‟s act of entering into a contract on behalof the local government unit without the requisite authoritytherefor was in violation of the Local Government CodeWhile petitioner may have relied on the opinion of theCity Legal Officer, such reliance only serves to buttresshis good faith. It does not, however, exculpate him from

his personal liability under P.D. 1445. Arnold D. Vicenciov. Hon. Reynaldo A. Villar, et al.,G.R. No. 182069, July 32012.

Public officers; suspension order . While thesuspension of a public officer under [Section 13 orRepublic Act No. 3019] is mandatory, the suspensionrequires a prior hearing to determine “the validity of theinformation” filed against him, “taking into account theserious and far reaching consequences of a suspensionof an elective public official even before his conviction.”

The accused public official‟s right to challenge the validityof the information before a suspension order may beissued includes the right to challenge the (i) validity of thecriminal proceeding leading to the filing of an informationagainst him, and (ii) propriety of his prosecution on theground that the acts charged do not constitute a violationof R.A. No. 3019 or of the provisions on bribery of theRevised Penal Code. Miguel v. Sandiganbayan, G.RNo. 172035, July 4, 2012.



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Public officers; suspension order. The purpose of thelaw in requiring a pre-suspension hearing is to determinethe validity of the information so that the trial court canhave a basis to either suspend the accused and proceedwith the trial on the merits of the case, withhold thesuspension and dismiss the case, or correct any part ofthe proceedings that impairs its validity. That hearing issimilar to a challenge to the validity of the information by

way of a motion to quash.While a pre-suspension hearing is aimed at securing forthe accused fair and adequate opportunity to challengethe validity of the information or the regularity of theproceedings against him, [Luciano v. Mariano (148-BPhil. 178 [1971])]likewise emphasizes that no hard andfast rule exists in regulating its conduct. With the purposeof a pre-suspension hearing in mind, the absence ofan actual hearing alone cannot be determinative of thevalidity of a suspension order. Miguel v.Sandiganbayan, G.R. No. 172035, July 4, 2012.

No estoppel against Government. In Baybay WaterDistrict v. Commission on Audit [425 Phil. 326[2002]), this Court stated that public officers‟ erroneousapplication and enforcement of the law do not estop thegovernment from making a subsequent correction ofthose errors. Where there is an express provision of lawprohibiting the grant of certain benefits, the law must beenforced even if it prejudices certain parties on account ofan error committed by public officials in granting thebenefit. Practice, without more – no matter how long

continued – cannot give rise to any vested right if it iscontrary to law. Abellanosa, et al. v. Commission on Audit and National Housing Authority ,G.R. No. 185806,July 24, 2012.

Local government Local autonomy; devolution; reservation in favor ofnational government. While [Section 17 of the LocalGovernment Code] charges the LGUs to take on thefunctions and responsibilities that have already beendevolved upon them from the national agencies on the

aspect of providing for basic services and facilities in theirrespective jurisdictions, paragraph (c) of the sameprovision provides a categorical exception of casesinvolving nationally-funded projects, facilities, programsand services, thus: “(c) Notwithstanding the provisions ofsubsection (b) hereof, public works and infrastructureprojects and other facilities, programs and servicesfunded by the National Government under the annualGeneral Appropriations Act, other special laws, pertinentexecutive orders, and those wholly or partially fundedfrom foreign sources, are not covered under this Section,

except in those cases where the local government unitconcerned is duly designated as the implementingagency for such projects, facilities, programs andservices.” The essence of this express reservation of power by thenational government is that, unless an LGU is particularlydesignated as the implementing agency, it has no poweover a program for which funding has been provided by

the national government under the annual generaappropriations act, even if the program involves thedelivery of basic services within the jurisdiction of theLGU…

Indeed, a complete relinquishment of central governmenpowers on the matter of providing basic facilities andservices cannot be implied as the Local GovernmenCode itself weighs against it. The national government isthus, not precluded from taking a direct hand in theformulation and implementation of national development

programs especially where it is implemented locally incoordination with the LGUs concerned. Pimentel, et al. vExecutive Secretary, et al., G.R. No. 195770, July 172012.

Other laws

Agrarian reform; procedure for acquisition. Theprocedure for acquisition of private lands under Section16 (e) of the CARL is that upon receipt by the landownerof the corresponding payment or, in case of rejection o

no response from the landowner, upon deposit with anaccessible bank designated by the DAR of thecompensation in cash or in LBP bonds, the DAR shaltake immediate possession of the land and request theproper Register of Deeds to issue a TCT in the name ofthe Republic of the Philippines. Thereafter, the DAR shalproceed with the redistribution of the land to the qualifiedbeneficiaries… Diamond Farms, Inc. v. Diamond FarmWorkers Multi-Purpose Cooperative,et al., G.R. No192999, July 18, 2012.

Agrarian reform; control and possession ofagricultural land. We, however, agree that petitionemust now turn over possession of the 109-hectare land.The matter has already been settled inHacienda LuisitaIncorporated, etc. v. Presidential Agrarian ReformCouncil, et al. [G.R. No. 171101, April 24, 2012], whenwe ruled that the Constitution and the CARL intended thefarmers, individually or collectively, to have control oveagricultural lands, otherwise all rhetoric about agrarianreform will be for naught. We stressed that under Section4, Article XIII of the 1987 Constitution and Section 2 of

















the CARL, the agrarian reform program is founded on theright of farmers and regular farm workers who arelandless to own directly or collectively the lands they till.The policy on agrarian reform is that control over theagricultural land must always be in the hands of thefarmers. Diamond Farms, Inc. v. Diamond Farm WorkersMulti-Purpose Cooperative, et al., G.R. No. 192999, July18, 2012.

Government-owned and -controlled corporations;definition. From [Sections 2(10) and 2(13) of theIntroductory Provisions of the Administrative Code of1987 (Executive Order No. 292)], it is clear that a GOCCmust be “organized as a stock or non -stock corporation”while an instrumentality is vested by law with corporatepowers. Likewise, when the law makes a governmentinstrumentality operationally autonomous, theinstrumentality remains part of the National Governmentmachinery although not integrated with the department

framework.When the law vests in a government instrumentalitycorporate powers, the instrumentality does notnecessarily become a corporation. Unless thegovernment instrumentality is organized as a stock ornon-stock corporation, it remains a governmentinstrumentality exercising not only governmental but alsocorporate powers.

Many government instrumentalities are vested withcorporate powers but they do not become stock or non-

stock corporations, which is a necessary condition beforean agency or instrumentality is deemed a GOCC.Examples are the Mactan International Airport Authority,the Philippine Ports Authority, the University of thePhilippines, and Bangko Sentral ng Pilipinas. All thesegovernment instrumentalities exercise corporate powersbut they are not organized as stock or non-stockcorporations as required by Section 2(13) of theIntroductory Provisions of the Administrative Code.These government instrumentalities are sometimesloosely called government corporate entities. They are

not, however, GOCCs in the strict sense as understoodunder the Administrative Code, which is the governinglaw defining the legal relationship and status ofgovernment entities. Republic of the Philippines,represented by the Philippine Reclamation Authority(PRA) vs. City of Parañaque, G.R. No. 191109, July 18,2012.

Government-owned and -controlled corporations;definition. In the case at bench, PRA is not a GOCCbecause it is neither a stock nor a non-stock corporation.

It cannot be considered as a stock corporation becausealthough it has a capital stock divided into no par valueshares as provided in Section 74 of P.D. No. 1084, it isnot authorized to distribute dividends, surplus allotmentsor profits to stockholders. There is no provisionwhatsoever in P.D. No. 1084 or in any of the subsequenexecutive issuances pertaining to PRA, particularly, E.ONo. 525, E.O. No. 6546 and EO No. 7987 that authorizes

PRA to distribute dividends, surplus allotments or profitsto its stockholders.PRA cannot be considered a non-stock corporation eithebecause it does not have members. A non-stockcorporation must have members. Moreover, it was noorganized for any of the purposes mentioned in Section88 of the Corporation Code. Specifically, it was createdto manage all government reclamation projects. Republicof the Philippines, represented by the PhilippineReclamation Authority (PRA) vs. City of Parañaque, G.RNo. 191109, July 18, 2012.

Government-owned and -controlled corporationsConstitutional requirements. Furthermore, there isanother reason why the PRA cannot be classified as aGOCC. Section 16, Article XII of the 1987 Constitutionprovides as follows: “Section 16. The Congress shalnot, except by general law, provide for the formationorganization, or regulation of private corporationsGovernment-owned or controlled corporations may becreated or established by special charters in the interesof the common good and subject to the test of economic

viability.” The fundamental provision above authorizes Congress tocreate GOCCs through special charters on twoconditions: 1) the GOCC must be established for thecommon good; and 2) the GOCC must meet the test ofeconomic viability. In this case, PRA may have passedthe first condition of common good but failed the secondone – economic viability. Undoubtedly, the purposebehind the creation of PRA was not for economic ocommercial activities. Neither was it created to competein the market place considering that there were no other

competing reclamation companies being operated by theprivate sector. As mentioned earlier, PRA was createdessentially to perform a public service considering that itwas primarily responsible for a

coordinated, economical and efficient reclamationadministration and operation of lands belonging to thegovernment with the object of maximizing their utilizationand hastening their development consistent with thepublic interest. Republic of the Philippines, represented















by the Philippine Reclamation Authority (PRA) vs. City ofParañaque, G.R. No. 191109, July 18, 2012.

Government-owned and -controlled corporations;definition. This Court is convinced that PRA is not aGOCC either under Section 2(3) of the IntroductoryProvisions of the Administrative Code or under Section16, Article XII of the 1987 Constitution. The facts, the

evidence on record and jurisprudence on the issuesupport the position that PRA was not organized either asa stock or a non-stock corporation. Neither was it createdby Congress to operate commercially and compete in theprivate market. Instead, PRA is a governmentinstrumentality vested with corporate powers andperforming an essential public service pursuant toSection 2(10) of the Introductory Provisions of the Administrative Code. Being an incorporated governmentinstrumentality, it is exempt from payment of real propertytax. Republic of the Philippines, represented by the

Philippine Reclamation Authority (PRA) vs. City ofParañaque, G.R. No. 191109, July 18, 2012.

Government contracts; public bidding requirement. Public bidding, as a method of government procurement,is governed by the principles of transparency,competitiveness, simplicity, and accountability. By itsvery nature and characteristic, a competitive publicbidding aims to protect the public interest by giving thepublic the best possible advantages thru opencompetition and in order to avoid or preclude suspicion of

favoritism and anomalies in the execution of publiccontracts. Except only in cases in which alternativemethods of procurement are allowed, all governmentprocurement shall be done by competitive bidding. In thecase of Agan, Jr. v. Philippine International Air TerminalsCo, Inc. [G.R. Nos. 155001, 155547 & 155661, May 5,2003], the Court held: “Competition must be legitimate,fair and honest. In the field of government contract law,competition requires, not only bidding upon a commonstandard, a common basis, upon the same thing, thesame subject matter, the same undertaking, but also that

it be legitimate, fair and honest; and not designed toinjure of defraud the government.” It has been held thatthe three principles in bidding are the offer to the public,opportunity for competition, and a basis for the exactcomparison of bids. A regulation of the matter whichexcludes any of these factors destroys the distinctivecharacter of the system and thwarts the purpose of itsadoption. Philippine Sports Commission, et al. v. DearJohn Services, Inc., G.R. No. 183260, July 4, 2012.

Government contracts; public bidding requirementapproved budget of contract must be disclosed.Under the law, the PSC-BAC is mandated to disclose notonly the description of the items to be procured, and theeligibility requirements, among others, but also theapproved budget of the project. Competitive bidding is anessential element of a public bidding. Thus, it should beconducted fairly and openly with full and free opportunity

for competition among bidders. It has been held in a longline of cases that a contract granted without thecompetitive bidding required by law is void and the partyto whom it is awarded cannot benefit from it …Consequently, the provision in the “Instruction toBidders” stating that no award of the contract shall bemade to a bidder whose bid price is lower than theallowable government estimate (AGE) or AAE is novalid. The rule on the matter is clear. The PSC-BAC isobliged to observe and enforce the same in theprocurement of goods and services for the project. The

law on public bidding is not an empty formality. A stricadherence to the principles, rules and regulations onpublic bidding must be sustained if only to preserve theintegrity and the faith of the general public on theprocedure. Philippine Sports Commission, et al. v. DeaJohn Services, Inc., G.R. No. 183260, July 4, 2012. Share this post:









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