J.A.B. Bulao & Associates

CASE 2011-0207: PHILIPPINE ECONOMIC ZONE AUTHORITY VS. GREEN ASIA CONSTRUCTION & DEVELOPMENT CORPORATION REPRESENTED BY MR. RENATO P. LEGASPI, PRESIDENT/CEO (G.R. NO. 188866, 19 OCTOBER 2011, SERENO J.) SUBJECTS: PD 1594; PD 454; PRICE ESCALATION. (BRIEF TITLE: PEZA VS. GREEN ASIA)

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DISPOSITIVE:

IN VIEW OF THE FOREGOING, the assailed 15 July 2009 Decision of the Court of Appeals is hereby AFFIRMED in toto.  Let a copy of this Decision be served on the Office of the President, the Senate President and the Speaker of the House of Representatives.

          SO ORDERED.   

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Republic of thePhilippines

Supreme Court

Manila

SECOND DIVISION

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DECISION

SERENO, J.:

          The Court, in this Petition for Review on Certiorari, is called upon to rule on a contractor’s entitlement to a price escalation in a government infrastructure contract.  Further, the Court is asked to rule on whether  there is a need to prove first that direct acts of the government influenced the increase of construction materials.    

The Factual Backdrop

          The parties to this case — petitioner Philippine Economic Zone Authority (PEZA), formerly the Export Processing Zone Authority (EPZA),  and respondent Green Asia Construction & Development Corporation (hereinafter Green Asia) – were parties to a contract for a road network/storm drainage project.  The project was awarded to Green Asia on 14 September 1992 with a contract price of P130,595,337.40.^[1][1]  Tagumpay R. Jardiniano, administrator of the then EPZA and Renato P. Legaspi, the president of Green Asia, signed the contract on 23 September 1992.^[2][2]  The stipulations in the  contract include the contract price,^[3][3] the mode of payment, advance payment, and the progress payment.^[4][4] These stipulations found in Articles III to VI of the contract comprised all the liabilities pertaining to EPZA.  EPZA was later on effectively succeeded by PEZA.    

          On 26 March 1996, Green Asia sent a letter to the PEZA Director General through Atty. Eugenio V. Vigo, Project Director for Construction of the PEZA Development Project.  The letter, invoking Presidential Decree (PD) No. 1594,  notified PEZA of Green Asia’s claim for price escalation in the amount of P 9,860,169.58.^[5][5]  This claim was denied by PEZA through a letter signed by the Acting Corporate Secretary Atty. Nestor Hun Nadal.  The denial of the claim was anchored on Section 8, PD 1594, requiring proof of the increase or decrease in construction cost due to the direct acts of the government.  Alleging that  Green Asia failed to present proof, PEZA stated in its letter as follows:^[6][6]

As per the records, it has not been established or proven that the increase/s in the cost of labor, equipment, materials and supplies required for the construction was/were due to the direct acts of the government.

Moreover, the claim that the grant of claims for price escalation is “a normal process in the construction industry” was not enough to persuade the Board.

Having failed to comply with the condition provided for by law, the Board decided to deny your claim for price escalation.

          Despite the denial, Green Asia insisted on its claim and followed it up with three letters sent to PEZA from 1997 to 2000.  Through Director General Lilia B. de Lima, PEZA reiterated the denial of the claim.^[7][7]  Because of these repeated denials, Green Asia made a “final demand,” which was received by PEZA on 29 November 2006 and signed by one Atty. Larry Ignacio.  Atty. Ignacio included in the demand the amount of P 2,500,357.11 for the price escalation of another project, legal interest, and a collection fee of 1% of the total amount due.^[8][8]  The exchanges of correspondence pertaining to Green Asia’s claim continued until 2006.^[9][9]  PEZA was, however, consistent in its position that Green Asia was not entitled to its claim, as the latter failed to prove the legal necessity of applying the price escalation provided for in PD 1594.  In its letter dated 30 November 2006, PEZA pointed out that the contract price was fixed, as stipulated in Article IV of the contract, and that this provision was in effect a waiver of the provisions of PD 1594.^[10][10] 

          On 2 August 2007, Green Asia sent to PEZA another notice, labelled “final demand notice,” a copy of which was furnished to the Office of the President.  This notice was for unpaid claims for the price escalation of the road network and drainage system in the amount of P 9,860,169.58, as well as for the sewage treatment plant  in the amount of P 2,500,357.11.  Green Asia disagreed with PEZA and posited that the fact that the contract stipulated a fixed   price did not mean that it was the final receivable amount for  the contractor.  The fixed price, according to Green Asia, would apply only when the work orders in the construction did not vary during the construction period.  Green Asia explained that it was “impossible and unrealistic” to stay within the original budgeted amount.  Thus, there was a need for price escalation under Cl 12.1 of the Implementing Rules and Regulations (IRR) of PD 1594.  Green Asia stressed that the basis of its claim was the price escalation under the IRR, and not merely the price adjustment provided in Section 8 of PD 1594.^[11][11] 

          Subsequent to the final demand notice to PEZA, Green Asia sent then President Gloria Macapagal Arroyo, on 14 November 2007, a letter with the heading “Appeal for the Settlement of Unpaid Claims for Price Escalation Under Project of the Philippines Economic Zone Authority.”  In this letter, Green Asia asked her to intervene for the affirmative resolution of its claim against PEZA in the amount of P 12,360,525.69.^[12][12]  The Office of the President (OP) took cognizance of the letter as an appeal, docketed it as O.P. Case No. 07-K-451, and ordered Green Asia to pay the appeal fee and PEZA to forward the complete records of the case.^[13][13]    

          After summary proceedings in the OP, the case was decided in favor of Green Asia.  The dispositive portion of the OP Decision reads as follows:

WHEREFORE, herein claim for Price Escalation Payment sought by Green Asia Construction & Development Corp. through its President/CEO Renato P. Legaspi is hereby GRANTED.

Respondent Philippine Economic Zone Authority (PEZA) is hereby ordered to pay claimant the total amount of P12,360,526.70, subject to its verification by PEZA using the parametric formula provided in Cl 12, IRR, PD 1594.

In addition, PEZA is liable to pay interest upon the total unpaid claims at the legal interest of 6% per annum reckoned from the date Green Asia made the final demand notice on August 6, 2007 up to finality of this Decision, and 12% interest from its finality up to full payment.

SO ORDERED.^[14][14]    

          The OP’s reason for granting Green Asia’s claim was that proof of increase in relevant construction prices due to the direct acts of the government was not required by law, before a price escalation may be invoked.  The OP cited Item 6, Cl 12.1 of the IRR of PD 1594, quoting the following portions:

          Escalation of prices for work accomplishment on infrastructure construction x x x shall be made x x x using the parametric formula as described below, to compensate for fluctuation of prices of construction supplies and materials, equipment and labor which would bring about during the period under consideration an increase or decrease of more than five percent (5%) of the original OR ADJUSTED contract unit price of items of work.  

          The OP also interpreted the phrase “due to direct acts of the Government.”  It held that PD 454,^[15][15] a prior enactment on government infrastructure projects, authorized price escalation; and that “direct acts of the government” included increases in the prices of gasoline, fuel oil and cement.  It was, therefore, not necessary to actually show that the prices  of those commodities increased because of the direct acts of the government.  In effect, the OP Decision held that price escalation is automatically awarded to contractors of all government infrastructure projects.  

          The Court of Appeals (CA), in CA-G.R. SP No. 105430,^[16][16] sustained the OP Decision.  It found the OP’s construction of PD 1594, in connection with PD 454, proper.  Since PD 454 was not expressly repealed by PD 1594, and since there was no apparent conflict between the two laws, the appellate court deemed it best to harmonize them. The result was again a favorable Decision to Green Asia.

          The OP Decision was, however, modified by the CA as to the amount of the price escalation awarded to Green Asia. Citing paragraphs 6 and 7, Cl 12.1 of the IRR of PD 1594, the appellate court ordered the parties to compute the price escalation using the parametric formula provided therein.  The Court of Appeals held:

…[W]e find that petitioner correctly faults the Office of the President for ordering the payment of respondent’s claim for price escalation in the sum of P12,360,526.70 – with legal interest from respondent’s August 6, 2007 demand – despite the absence of showing of how said amount was computed.  Granted that the assailed decision prov[i]des that payment is “subject to verification,” it cannot be gainsaid that paragraphs 6 and 7, CI 12.1 of the Amended Rules and Regulations implementing Presidential Decree No. 1594 provide as follows:

   “6.  Escalation of prices for work accomplishment on infrastructure construction, rehabilitation and/or improvement projects shall be made periodically, using the parametric formula as described below, to compensate for fluctuation of prices of construction supplies and materials, equipment and labor which would bring about during the period under consideration an increase or decrease of more than five percent (5%) of the original or adjusted contract unit price of items of work.

     7.         Price escalation shall be reckoned from the month of bidding of the project, and shall be allowed for every progress billing.  When the contract has not been the subject of competitive bidding, price escalation shall be reckoned from the month agreed upon in the contract and shall be granted for every progress billing.  For construction and related materials under government-controlled prices, the computation of price escalation shall be reckoned from the actual date of bidding the projects, or the actual date agreed upon in the contract has not been the subject of competitive project.”            

            To  our mind, the present quandary regarding the amount due is attributable to petitioner’s outright and unjustified denial of the price escalation claimed by respondent as well as the concomitant failure on the part of the latter to submit the computation thereof.  Given the practical and legal import of the foregoing provisions and respondent’s right to the price escalation provided under Section 8 of Presidential Decree No. 1594, it consequently behooves the parties to compute the same in accordance with the parametric formula provided under CI12 of the Implementing Rules and Regulations of said law.  Considering respondent’s long-standing demand therefor, however, we find it equitable that payment of interest on the amount of price escalation due shall accrue upon determination of the amount due in accordance with the aforesaid parametric formula.      

          Hence, this petition for review.

The Issue

 Whether Presidential Decree 1594 requires the contractor to prove that the price increase of construction materials was due to the direct acts of the government before a price escalation is granted in this payment dispute in a construction contract

          PEZA argues that there was no need for any statutory construction of PD 1594, since the provisions thereof are not ambiguous.  It insists that Section 8 thereof requires certain conditions before an adjustment of the contract price may be made.^[17][17]  These conditions obtain when there is a concurrence of the following: there was an increase or a decrease in the cost of labor, equipment, materials and  supplies for construction; and the said increase or decrease is due to the direct acts of the government.  PEZA stresses that respondent Green Asia has failed to show the existence of these conditions.^[18][18]

          Green Asia, in its Comment,^[19][19] claims that it has proved the increase or decrease in the cost of labor and construction materials.  It has allegedly relied on the official indices of prices regularly issued by the National Statistics Office (NSO) for Calendar Years 1992-1999.  It was on these indices that it based the amount of its claim.^[20][20] 

The Court’s Ruling

          We sustain the assailed Decision.

          After a painstaking study of the records before us and the relevant laws, we are of the opinion that the Court of Appeals was correct in its disposition of the case.

          We agree with the ruling of the appellate court that the OP correctly construed PD 1594 as being in pari materia to PD 454.  Since the two presidential decrees are in pari materia, there is a need to construe them together.  Thus explained the Court in Honasan v. The Panel of the Investigating Prosecutors of the Department of Justice:^[21][21]

Statutes are in pari materia when they relate to the same person or thing or to the same class of persons or things, or object, or cover the same specific or particular subject matter.

It is axiomatic in statutory construction that a statute must be interpreted, not only to be consistent with itself, but also to harmonize with other laws on the same subject matter, as to form a complete, coherent and intelligible system.  The rule is expressed in the maxim, “interpretare et concordare legibus est optimus interpretandi,” or every statute must be so construed and harmonized with other statutes as to form a uniform system of jurisprudence.^[22][22]

         PD 454 which was enacted prior to PD 1594, was where the phrase “direct acts of the government” was explained to cover the increase of prices during the effectivity of a government infrastructure contract.  The phrase was first used in Republic Act (RA) No. 1595, which was amended by PD 454.  The latter amended R.A. No. 1595 by supplying the meaning of the phrase “direct acts of the government” and expressly including the increase of prices of gasoline within the coverage of that phrase.  Consequently, when PD 1594 reproduced the phrase without supplying a contrary or different definition, the definition provided by the earlier enacted PD 454 was deemed adopted by the later decree.  Thus, proof of an increase in fuel and cement price and a subsequent increase in the cost of labor and relevant construction materials during the contract period are considered a compliance with the IRR requirements for a claim for price escalation.                      

          The parties separately invoke PD 1594^[23][23] and its IRR.  A reading of their provisions, however, leads to the conclusion that “price adjustment” under PD 1594 is actually the same as “price escalation” under the IRR.  Just as the term “price escalation” is not found in PD 1594, so is “price adjustment” in the IRR.  These concepts are, evidently, one and the same.  They have different names, but pertain to the same thing — the adjustment of the contract price due to certain circumstances.  The computation of the adjustment has been explained in detail as price escalation in the IRR, found in CI 12.  At first glance, price escalation may be considered as an expansion of the concept of price adjustment.  In truth, however, the IRR did not expand anything, but merely laid out a guideline for the computation of the adjustment or escalation of price.  The two provisions are therefore not separate and must be read together.  Otherwise, if we accept the arguments of both parties that one is invoking either PD 1594 or the IRR, two different rights would arise therefrom, which is obviously not intended by the law.

          Price escalation, as explained in paragraph 6 of Cl 2.1 of the IRR, is meant to compensate for changes in the prices of relevant construction necessities during the effectivity of the contract, resulting in more than 5% increase or decrease in the unit price of those items.  It is thus the prices of the items that have actually increased that become the basis of the computation.  It is also stated in the IRR that in case of advance payment, the materials to which the advance payment has been applied will not be adjusted for a price escalation.^[24][24]  The government will charge an interest on the amount it has paid in advance to the contractor.  This interest will be deducted from the succeeding price escalation that may be due the contractor.^[25][25]

          It should also be mentioned that in National Steel Corporation v. The Regional Trial Court of Lanao del Norte,^[26][26] the Supreme Court held:

[P]rice escalation is expressly allowed under Presidential Decree 1594, which law allows price escalation in all contracts involving government projects including contracts entered into by government entities and instrumentalities and Government Owned or Controlled Corporations (GOCCs). It is a basic rule in contracts that the law is deemed written into the contract between the parties. And when there is no prohibitory clause on price escalation, the Court will allow payment therefor.

The contract between PEZA and Green Asia did not incorporate provisions prohibiting price escalation or any clause that may be interpreted as a waiver of the price escalation.  Consequently, payment of price escalation is deemed to have included the provision for the payment of price escalation.

          It was therefore wrong for PEZA to disregard PD 454 by automatically denying the claim of Green Asia for price escalation or to require the latter to prove that the increase in the construction cost was due to the direct acts of the government.  PD 454 actually bridges the gap between PD 1594 and its IRR.  PD 1594 no longer explains the provision on price adjustment, because it is already found in PD 454 and in older laws.  In its Whereas Clause, PD 454 states:

          WHEREAS, the Government feels that amendment of the existing escalatory clause is a fair and equitable way of dealing with the situation.

            The “amendment of the existing escalatory clause” referred to is found in Section 1 of PD 454, which provides:

            “The provisions of Section 10(b) of Republic Act No. 5979 and other existing laws, or presidential decrees to the contrary notwithstanding, adjustment of contract prices for public works project is hereby authorized, should any or both of the following conditions occur:

            (a) If during the effectivity of the contract, the cost of labor, materials, equipment rentals and supplies for construction should increase or decrease due to the direct acts of the government; and for purposes of this Decree the increase of prices of gasoline and other fuel oils, and of cement shall be considered direct acts of the Government;

            (b) If during the effectivity of the contract, the costs of labor, equipment rentals, construction materials and supplies used in the project should cause the sum total of the prices of bid items to increase or decrease by more than five (5%) percent compared with the total contract price.

            The increase or decrease in the contract price shall be determined by application of the appropriate official indices.” (emphasis and underscoring supplied)  

          We find that the assigned error allegedly committed by the Court of Appeals is absent.  The appellate court was, thus, correct in granting respondent’s claim for payment of price escalation, and the assailed Decision must be upheld.

It will appear strange, to today’s consumer, that the government would automatically accept — nay, decree under the express terms of PD 454 — that “the increase of prices of gasoline and other fuel oils, and of cement shall be considered direct acts of the Government,” such that the effects of these
price increases in the form of escalation of the prices of contracts with the government would be absorbed by it and, indirectly, by the taxpayer.  It would appear that the context in which this policy decision to absorb costs from price increases was made in an era in which the government was strictly monitoring oil, cement and gasoline prices, and was itself controlling the price of oil before the Downstream Oil Deregulation Law^[27][27] was passed. 

          Considering the deregulation of the oil industry and the removal of price control on gasoline and other fuel oils, we believe that the wisdom behind Section 1 of PD 454 may no longer hold true. Government is significantly less responsible today for the price of gasoline and other fuel oils, as well as cement, than it used to be. The dynamics of pricing of these commodities has changed dramatically. This law merits a thorough reevaluation.  Congress and the Executive Department, it is suggested, must look at whether this policy should be maintained.

          IN VIEW OF THE FOREGOING, the assailed 15 July 2009 Decision of the Court of Appeals is hereby AFFIRMED in toto.  Let a copy of this Decision be served on the Office of the President, the Senate President and the Speaker of the House of Representatives.

          SO ORDERED.   

MARIA LOURDES P. A. SERENO

Associate Justice

WE CONCUR:

ANTONIO T. CARPIO

Associate Justice

Chairperson

ARTURO D. BRION                                  BIENVENIDO L. REYES

             Associate Justice                                                Associate Justice

ESTELA M. PERLAS-BERNABE

Associate Justice

A T T E S T A T I O N

          I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

                                                            ANTONIO T. CARPIO

                                                                  Associate Justice

                                                                      Chairperson, Second Division

C E R T I F I C A T I O N

                Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson’s Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

RENATO C. CORONA

                                                                             Chief Justice

CASE 2011-0206: DATU MICHAEL ABAS KIDA, IN HIS PERSONAL CAPACITY, AND IN REPRESENTATION OF MAGUINDANAO FEDERATION OF AUTONOMOUS IRRIGATORS ASSOCIATION, INC., HADJI MUHMINA J. USMAN, JOHN ANTHONY L. LIM, JAMILON T. ODIN, ASRIN TIMBOL JAIYARI, MUJIB M. KALANG, ALIH AL-SAIDI J. SAPI-E, KESSAR DAMSIE ABDIL, AND BASSAM ALUH SAUPI VS. SENATE OF THE PHILIPPINES, REPRESENTED BY ITS PRESIDENT JUAN PONCE ENRILE, HOUSE OF REPRESENTATIVES, THRU SPEAKER FELICIANO BELMONTE, COMMISSION ON ELECTIONS, THRU ITS CHAIRMAN, SIXTO BRILLANTES, JR., PAQUITO OCHOA, JR., OFFICE OF THE PRESIDENT EXECUTIVE SECRETARY, FLORENCIO ABAD, JR., SECRETARY OF BUDGET, AND ROBERTO TAN, TREASURER OF THE PHILIPPINES (G.R. NO. 196271);

BASARI D. MAPUPUNO VS. SIXTO BRILLANTES, IN HIS CAPACITY AS CHAIRMAN OF THE COMMISSION ON ELECTIONS, FLORENCIO ABAD, JR. IN HIS CAPACITY AS SECRETARY OF THE DEPARTMENT OF BUDGET AND MANAGEMENT, PACQUITO OCHOA, JR., IN HIS CAPACITY AS EXECUTIVE SECRETARY, JUAN PONCE ENRILE, IN HIS CAPACITY AS SENATE PRESIDENT, AND FELICIANO BELMONTE, IN HIS CAPACITY AS SPEAKER OF THE HOUSE OF REPRESENTATIVES (G.R. NO. 196305);

REP. EDCEL C. LAGMAN VS. PAQUITO N. OCHOA, JR., IN HIS CAPACITY AS THE EXECUTIVE SECRETARY, AND THE COMMISSION ON ELECTIONS (G.R. NO. 197221);

ALMARIM CENTI TILLAH, DATU CASAN CONDING CANA, AND PARTIDO DEMOKRATIKO PILIPINO LAKAS NG BAYAN (PDP-LABAN) VS. THE COMMISSION ON ELECTIONS, THROUGH ITS CHAIRMAN, SIXTO BRILLANTES, JR., HON. PAQUITO N. OCHOA, JR., IN HIS CAPACITY AS EXECUTIVE SECRETARY, HON. FLORENCIO B. ABAD, JR., IN HIS CAPACITY AS SECRETARY OF THE DEPARTMENT OF BUDGET AND MANAGEMENT, AND HON. ROBERTO B. TAN, IN HIS CAPACITY AS TREASURER OF THE PHILIPPINES (G.R. NO. 197280);

ATTY. ROMULO B. MACALINTAL VS. COMMISSION  ON ELECTIONS AND THE OFFICE OF THE PRESIDENT, THROUGH EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR. (G.R. NO. 197282);

LUIS “BAROK” BIRAOGO VS. THE  COMMISSION ON ELECTIONS AND EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR. (G.R. NO.  197392)

JACINTO V. PARAS VS. EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR., AND THE COMMISSION ON ELECTIONS (G.R. NO. 197454)

MINORITY RIGHTS FORUM, PHILIPPINES, INC., RESPONDENTS-INTERVENOR.

(18 OCTOBER 2011, J. BRION)

 SUBJECT: CONSTITUTIONALITY OF RA No. 10153.

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DISPOSITIVE:

WHEREFORE, premises considered, we DISMISS the consolidated petitions assailing the validity of RA No. 10153 for lack of merit, and UPHOLD the constitutionality of this law.  We likewise LIFT the temporary restraining order we issued in our Resolution of September 13, 2011.  No costs.

SO ORDERED.

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Republic of thePhilippines

Supreme Court

Manila

EN BANC

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D E C I S I O N

BRION, J.:

On June 30, 2011, Republic Act (RA) No. 10153, entitled “An Act Providing for the Synchronization of the Elections in the Autonomous Region in Muslim Mindanao (ARMM) with the National and Local Elections and for Other Purposes” was enacted. The law reset the ARMM elections from  the 8^th  of August 2011, to the second Monday of May 2013 and every three (3) years thereafter, to coincide with the country’s regular national and local elections. The law as well granted the President the power to “appoint officers-in-charge (OICs) for the Office of the Regional Governor, the Regional Vice-Governor, and the Members of the Regional Legislative Assembly, who shall perform the functions pertaining to the said offices until the officials duly elected in the May 2013 elections shall have qualified and assumed office.”

Even before its formal passage, the bills that became RA No. 10153 already spawned petitions against their validity; House Bill No. 4146 and Senate Bill No. 2756 were challenged in petitions filed with this Court.  These petitions multiplied after RA No. 10153 was passed. 

Factual Antecedents

The State, through Sections 15 to 22, Article X of the 1987 Constitution, mandated the creation of autonomous regions in Muslim Mindanao and theCordilleras.  Section 15 states:

Section 15. There shall be created autonomous regions in Muslim Mindanao and in the Cordilleras consisting of provinces, cities, municipalities, and geographical areas sharing common and distinctive historical and cultural heritage, economic and social structures, and other relevant characteristics within the framework of this Constitution and the national sovereignty as well as territorial integrity of the Republic of thePhilippines.         

Section 18 of the Article, on the other hand, directed Congress to enact an organic act for these autonomous regions to concretely carry into effect the granted autonomy.

Section 18. The Congress shall enact an organic act for each autonomous region with the assistance and participation of the regional consultative commission composed of representatives appointed by the President from a list of nominees from multisectoral bodies. The organic act shall define the basic structure of government for the region consisting of the executive department and legislative assembly, both of which shall be elective and representative of the constituent political units. The organic acts shall likewise provide for special courts with personal, family and property law jurisdiction consistent with the provisions of this Constitution and national laws.

The creation of the autonomous region shall be effective when approved by a majority of the votes cast by the constituent units in a plebiscite called for the purpose, provided that only provinces, cities, and geographic areas voting favorably in such plebiscite shall be included in the autonomous region.

On August 1, 1989 or two years after the effectivity of the 1987 Constitution, Congress acted through Republic Act (RA) No. 6734 entitled “An Act Providing for an Organic Act for the Autonomous Region in Muslim Mindanao.”  A plebiscite was held on November 6, 1990 as required by Section 18(2), Article X of RA No. 6734, thus fully establishing the Autonomous Region of Muslim Mindanao (ARMM).  The initially assenting provinces were Lanao del Sur, Maguindanao, Sulu and Tawi-tawi.  RA No. 6734 scheduled the first regular elections for the regional officials of the ARMM on a date not earlier than 60 days nor later than 90 days after its ratification.

          RA No. 9054 (entitled “An Act to Strengthen and Expand the Organic Act for the Autonomous Region in Muslim Mindanao, Amending for the Purpose Republic Act No. 6734, entitled An Act Providing for the Autonomous Region in Muslim Mindanao, as Amended”) was the next legislative act passed.  This law provided further refinement in the basic ARMM structure first defined in the original organic act, and reset the regular elections for the ARMM regional officials to the second Monday of September 2001.

Congress passed the next law affecting ARMM – RA No. 9140^[1][1] – on June 22, 2001.  This law reset the first regular elections originally scheduled under RA No. 9054, to November 26, 2001.  It likewise set the plebiscite to ratify RA No. 9054 to not later than August 15, 2001.

RA No. 9054 was ratified in a plebiscite held on August 14, 2001. TheprovinceofBasilanandMarawiCityvoted to join ARMM on the same date. 

RA No. 9333^[2][2] was subsequently passed by Congress to reset the ARMM regional elections to the 2^nd Monday of August 2005, and on the same date every 3 years thereafter. Unlike RA No. 6734 and RA No. 9054, RA No. 9333 was not ratified in a plebiscite.

Pursuant to RA No. 9333, the next ARMM regional elections should have been held on August 8, 2011. COMELEC had begun preparations for these elections and had accepted certificates of candidacies for the various regional offices to be elected.  But on June 30, 2011, RA No. 10153 was enacted, resetting the ARMM elections to May 2013, to coincide with the regular national and local elections of the country.

RA No. 10153 originated in the House of Representatives as House Bill (HB) No. 4146, seeking the postponement of the ARMM elections scheduled on August 8, 2011. On March 22, 2011, the House of Representatives passed HB No. 4146, with one hundred ninety one (191) Members voting in its favor.

After the Senate received HB No. 4146, it adopted its own version, Senate Bill No. 2756 (SB No. 2756), on June 6, 2011. Thirteen (13) Senators voted favorably for its passage. On June 7, 2011, the House of Representative concurred with the Senate amendments, and on June 30, 2011, the President signed RA No. 10153 into law.

As mentioned, the early challenge to RA No. 10153 came through a petition filed with this Court – G.R. No. 196271^[3][3] – assailing the constitutionality of both HB No. 4146 and SB No. 2756, and challenging the validity of  RA No. 9333 as well for non-compliance with the constitutional plebiscite requirement. Thereafter, petitioner Basari Mapupuno in G.R. No. 196305 filed another petition^[4][4] also assailing the validity of RA No. 9333.  

With the enactment into law of RA No. 10153, the COMELEC stopped its preparations for the ARMM elections.  The law gave rise as well to the filing of the following petitions against its constitutionality:

a)     Petition for Certiorari and Prohibition^[5][5] filed by Rep. Edcel Lagman as a member of the House of Representatives against Paquito Ochoa, Jr. (in his capacity as the Executive Secretary) and the COMELEC, docketed as G.R. No. 197221;

b)    Petition for Mandamus and Prohibition^[6][6] filed by Atty. Romulo Macalintal as a taxpayer against the COMELEC, docketed as G.R. No. 197282;

c)     Petition for Certiorari and Mandamus, Injunction and Preliminary Injunction^[7][7] filed by Louis “Barok” Biraogo against the COMELEC and Executive Secretary Paquito N. Ochoa, Jr., docketed as G.R. No. 197392; and

d)    Petition for Certiorari and Mandamus^[8][8] filed by Jacinto Paras as a member of the House of Representatives against Executive Secretary Paquito Ochoa, Jr. and the COMELEC, docketed as G.R. No. 197454.

Petitioners Alamarim Centi Tillah and Datu Casan Conding Cana as registered voters from the ARMM, with the Partido Demokratiko Pilipino Lakas ng Bayan (a political party with candidates in the ARMM regional elections scheduled for August 8, 2011), also filed a Petition for Prohibition and Mandamus^[9][9] against the COMELEC, docketed as G.R. No. 197280, to assail the constitutionality of RA No. 9140, RA No. 9333 and RA No. 10153.

          Subsequently, Anak Mindanao Party-List, Minority Rights Forum Philippines, Inc. and Bangsamoro Solidarity Movement filed their own  Motion for Leave to Admit their Motion for Intervention and Comment-in-Intervention dated July 18, 2011. On July 26, 2011, the Court granted the motion. In the same Resolution, the Court ordered the consolidation of all the petitions relating to the constitutionality of HB No. 4146, SB No. 2756, RA No. 9333, and RA No. 10153.

          Oral arguments were held on August 9, 2011 and August 16, 2011.  Thereafter, the parties were instructed to submit their respective memoranda within twenty (20) days.

          On September 13, 2011, the Court issued a temporary restraining order enjoining the implementation of RA No. 10153 and ordering the incumbent elective officials of ARMM to continue to perform their functions should these cases not be decided by the end of their term on September 30, 2011. 

The Arguments

          The petitioners assailing RA No. 9140, RA No. 9333 and RA No. 10153 assert that these laws amend RA No. 9054 and thus, have to comply with the supermajority vote and plebiscite requirements prescribed under Sections 1 and 3, Article XVII of RA No. 9094 in order to become effective.

          The petitions assailing RA No. 10153 further maintain that it is unconstitutional for its failure to comply with the three-reading requirement of Section 26(2), Article VI of the Constitution.  Also cited as grounds are the alleged violations of the right of suffrage of the people of ARMM, as well as the failure to adhere to the “elective and representative” character of the executive and legislative departments of the ARMM. Lastly, the petitioners challenged the grant to the President of the power to appoint OICs to undertake the functions of the elective ARMM officials until the officials elected under the May 2013 regular elections shall have assumed office. Corrolarily, they also argue that the power of appointment also gave the President the power of control over the ARMM, in complete violation of Section 16, Article X of the Constitution.

The Issues

          From the parties’ submissions, the following issues were recognized and argued by the parties in the oral arguments of August 9 and 16, 2011:

1. Whether the 1987 Constitution mandates the synchronization of elections

1. Whether the passage of RA No. 10153 violates Section 26(2), Article VI of the 1987 Constitution

III. Whether the passage of RA No. 10153 requires a supermajority vote and plebiscite

1. Does the postponement of the ARMM regular elections constitute an amendment to Section 7, Article XVIII of RA No. 9054?

1. Does the requirement of a supermajority vote for amendments or revisions to RA No. 9054 violate Section 1 and Section 16(2), Article VI of the 1987 Constitution and the corollary doctrine on irrepealable laws?

1. Does the requirement of a plebiscite apply only in the creation of autonomous regions under paragraph 2, Section 18, Article X of the 1987 Constitution?

1. Whether RA No. 10153 violates the autonomy granted to the ARMM

1. Whether the grant of the power to appoint OICs violates:

1. Section 15, Article X of the 1987 Constitution

1. Section 16, Article X of the 1987 Constitution

1. Section 18, Article X of the 1987 Constitution

1. Whether the proposal to hold special elections is constitutional and legal.

We shall discuss these issues in the order they are presented above.

OUR RULING

We resolve to DISMISS the petitions and thereby UPHOLD the constitutionality of RA No. 10153 in toto.

I.  Synchronization as a recognized constitutional mandate

          The respondent Office of the Solicitor General (OSG) argues that the Constitution mandates synchronization, and in support of this position, cites Sections 1, 2 and 5, Article XVIII (Transitory Provisions) of the 1987 Constitution, which provides:

Section 1. The first elections of Members of the Congress under this Constitution shall be held on the second Monday of May, 1987.

The first local elections shall be held on a date to be determined by the President, which may be simultaneous with the election of the Members of the Congress. It shall include the election of all Members of the city or municipal councils in the Metropolitan Manila area.

Section 2. The Senators, Members of the House of Representatives and the local officials first elected under this Constitution shall serve until noon of June 30, 1992.

Of the Senators elected in the election in 1992, the first twelve obtaining the highest number of votes shall serve for six year and the remaining twelve for three years.

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Section 5. The six-year term of the incumbent President and Vice President elected in the February 7, 1986 election is, for purposes of synchronization of elections, hereby extended to noon of June 30, 1992.

The first regular elections for President and Vice-President under this Constitution shall be held on the second Monday of May, 1992.

We agree with this position.

While the Constitution does not expressly state that Congress has to synchronize national and local elections, the clear intent towards this objective can be gleaned from the Transitory Provisions (Article XVIII) of the Constitution,^[10][10] which show the extent to which the Constitutional Commission, by deliberately making adjustments to the terms of the incumbent officials, sought to attain synchronization of elections.^[11][11]

The objective behind setting a common termination date for all elective officials, done among others through the shortening the terms of the twelve winning senators with the least number of votes, is to synchronize the holding of all future elections – whether national or local – to once every three years.^[12][12] This intention finds full support in the discussions during the Constitutional Commission deliberations.^[13][13]

These Constitutional Commission exchanges, read with the provisions of the Transitory Provisions of the Constitution, all serve as patent indicators of the constitutional mandate to hold synchronized national and local elections, starting the second Monday of May, 1992 and for all the following elections.

This Court was not left behind in recognizing the synchronization of the national and local elections as a constitutional mandate. In Osmeña v. Commission on Elections,^[14][14] we explained:

It is clear from the aforequoted provisions of the 1987 Constitution that the terms of office of Senators, Members of the House of Representatives, the local officials, the President and the Vice-President have been synchronized to end on the same hour, date and year — noon of June 30, 1992.

It is likewise evident from the wording of the above-mentioned Sections that the term of synchronization is used synonymously as the phrase holding simultaneously since this is the precise intent in terminating their Office Tenure on the same day or occasion. This common termination date will synchronize future elections to once every three years (Bernas, the Constitution of the Republic of the Philippines, Vol. II, p. 605).

That the election for Senators, Members of the House of Representatives and the local officials (under Sec. 2, Art. XVIII) will have to be synchronized with the election for President and Vice President (under Sec. 5, Art. XVIII) is likewise evident from the x x x  records of the proceedings in the Constitutional Commission. [Emphasis supplied.]

Although called regional elections, the ARMM elections should be included among the elections to be synchronized as it is a “local” election based on the wording and structure of the Constitution.

A basic rule in constitutional construction is that the words used should be understood in the sense that they have in common use and given their ordinary meaning, except when technical terms are employed, in which case the significance thus attached to them prevails.^[15][15] As this Court explained in People v. Derilo,^[16][16] “[a]s the Constitution is not primarily a lawyer’s document, its language should be understood in the sense that it may have in common. Its words should be given their ordinary meaning except where technical terms are employed.”

          Understood in its ordinary sense, the word “local” refers to something that primarily serves the needs of a particular limited district, often a community or minor political subdivision.^[17][17] Regional elections in the ARMM for the positions of governor, vice-governor and regional assembly representatives obviously fall within this classification, since they pertain to the elected officials who will serve within the limited region of ARMM.

From the perspective of the Constitution, autonomous regions are considered one of the forms of local governments, as evident from Article X  of the Constitution entitled “Local Government.”  Autonomous regions are established and discussed under Sections 15 to 21 of this Article – the article wholly devoted to Local Government. That an autonomous region is considered a form of local government is also reflected in Section 1, Article X of the Constitution, which provides:

Section 1. The territorial and political subdivisions of the Republic of thePhilippinesare the provinces, cities, municipalities, and barangays. There shall be autonomous regions in Muslim Mindanao, and theCordillerasas hereinafter provided. 

Thus, we find the contention – that the synchronization mandated by  the Constitution does not include the regional elections of the ARMM –unmeritorious.  We shall refer to synchronization in the course of our discussions below, as this concept permeates the consideration of the various issues posed in this case and must be recalled time and again for its complete resolution.

II.  The President’s Certification on the Urgency of RA No. 10153

The petitioners in G.R. No. 197280 also challenge the validity of RA No. 10153 for its alleged failure to comply with Section 26(2), Article VI of the Constitution^[18][18] which provides that before bills passed by either the House or the Senate can become laws, they must pass through three readings on separate days. The exception is when the President certifies to the necessity of the bill’s immediate enactment.

The Court, in Tolentino v. Secretary of Finance,^[19][19] explained the effect of the President’s certification of necessity in the following manner:

The presidential certification dispensed with the requirement not only of printing but also that of reading the bill on separate days. The phrase “except when the President certifies to the necessity of its immediate enactment, etc.” in Art. VI, Section 26[2] qualifies the two stated conditions before a bill can become a law: [i] the bill has passed three readings on separate days and [ii] it has been printed in its final form and distributed three days before it is finally approved.

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That upon the certification of a bill by the President, the requirement of three readings on separate days and of printing and distribution can be dispensed with is supported by the weight of legislative practice. For example, the bill defining the certiorari jurisdiction of this Court which, in consolidation with the Senate version, became Republic Act No. 5440, was passed on second and third readings in the House of Representatives on the same day [May 14, 1968] after the bill had been certified by the President as urgent.

In the present case, the records show that the President wrote to the Speaker of the House of Representatives to certify the necessity of the immediate enactment of a law synchronizing the ARMM elections with the national and local elections.^[20][20]  Following our Tolentino ruling, the President’s certification exempted both the House and the Senate from having to comply with the three separate readings requirement. 

On the follow-up contention that no necessity existed for the immediate enactment of these bills since there was no public calamity or emergency that had to be met, again we hark back to our ruling in Tolentino:

The sufficiency of the factual basis of the suspension of the writ of habeas corpus or declaration of martial law Art. VII, Section 18, or the existence of a national emergency justifying the delegation of extraordinary powers to the President under Art. VI, Section 23(2) is subject to judicial review because basic rights of individuals may be of hazard. But the factual basis of presidential certification of bills, which involves doing away with procedural requirements designed to insure that bills are duly considered by members of Congress, certainly should elicit a different standard of review. [Emphasis supplied.]

The House of Representatives and the Senate – in the exercise of their legislative discretion – gave full recognition to the President’s certification and promptly enacted RA No. 10153.  Under the circumstances, nothing short of grave abuse of discretion on the part of the two houses of Congress can justify our intrusion under our power of judicial review.^[21][21]

The petitioners, however, failed to provide us with any cause or justification for this course of action.  Hence, while the judicial department and this Court are not bound by the acceptance of the President’s certification by both the House of Representatives and the Senate, prudent exercise of our powers and respect due our co-equal branches of government in matters committed to them by the Constitution, caution a stay of the judicial hand.^[22][22]

In any case, despite the President’s certification, the two-fold purpose that underlies the requirement for three readings on separate days of every bill must always be observed to enable our legislators and other parties interested in pending bills to intelligently respond to them.  Specifically,  the purpose with respect to Members of Congress is: (1) to inform the legislators of the matters they shall vote on and (2) to give them notice that a measure is in progress through the enactment process.^[23][23]

We find, based on the records of the deliberations on the law, that both advocates and the opponents of the proposed measure had sufficient opportunities to present their views. In this light, no reason exists to nullify RA No. 10153 on the cited ground. 

III.  A.  RA No. 9333 and RA No. 10153 are not amendments to RA No. 9054 

The effectivity of RA No. 9333 and RA No. 10153 has also been challenged because they did not comply with Sections 1 and 3, Article XVII of RA No. 9054 in amending this law. These provisions require:

Section 1. Consistent with the provisions of the Constitution, this Organic Act may be reamended or revised by the Congress of the Philippines upon a vote of two-thirds (2/3) of the Members of the House of Representatives and of the Senate voting separately.

Section 3. Any amendment to or revision of this Organic Act shall become effective only when approved by a majority of the vote cast in a plebiscite called for the purpose, which shall be held not earlier than sixty (60) days or later than ninety (90) days after the approval of such amendment or revision.

We find no merit in this contention.

In the first place, neither RA No. 9333 nor RA No. 10153 amends RA No. 9054.  As an examination of these laws will show, RA No. 9054 only provides for the schedule of the first ARMM elections and does not fix the date of the regular elections.  A need therefore existed for the Congress to fix the date of the subsequent ARMM regular elections, which it did by enacting RA No. 9333 and thereafter, RA No. 10153. Obviously, these subsequent laws – RA No. 9333 and RA No. 10153 – cannot be considered amendments to RA No. 9054 as they did not change or revise any provision in the latter law; they merely filled in a gap in RA No. 9054 or supplemented the law by providing the date of the subsequent regular elections.

This view – that Congress thought it best to leave the determination of the date of succeeding ARMM elections to legislative discretion – finds support in ARMM’s recent history.

To recall, RA No. 10153 is not the first law passed that rescheduled the ARMM elections.  The First Organic Act – RA No. 6734 – not only did not fix the date of the subsequent elections; it did not even fix the specific date of the first ARMM elections,^[24][24] leaving the date to be fixed in another legislative enactment. Consequently, RA No. 7647,^[25][25] RA No. 8176,^[26][26] RA No. 8746,^[27][27] RA No. 8753,^[28][28] and RA No. 9012^[29][29] were all enacted by Congress to fix the dates of the ARMM elections. Since these laws did not change or modify any part or provision of RA No. 6734, they were not amendments to this latter law.  Consequently, there was no need to submit them to any plebiscite for ratification.

The Second Organic Act – RA No. 9054 – which lapsed into law on March 31, 2001, provided that the first elections would be held on the second Monday of September 2001. Thereafter, Congress passed RA No. 9140^[30][30] to reset the date of the ARMM elections.  Significantly, while RA No. 9140 also scheduled the plebiscite for the ratification of the Second Organic Act (RA No. 9054), the new date of the ARMM regional elections fixed in RA No. 9140 was not among the provisions ratified in the plebiscite held to approve RA No. 9054. Thereafter, Congress passed RA No. 9333,^[31][31] which further reset the date of the ARMM regional elections. Again, this law was not ratified through a plebiscite.

From these legislative actions, we see the clear intention of Congress to treat the laws which fix the date of the subsequent ARMM elections as separate and distinct from the Organic Acts. Congress only acted consistently with this intent when it passed RA No. 10153 without requiring compliance with the amendment prerequisites embodied in Section 1 and Section 3, Article XVII of RA No. 9054.

III. B. Supermajority voting requirement unconstitutional for giving RA No. 9054 the character of an irrepealable law

Even assuming that RA No. 9333 and RA No. 10153 did in fact amend RA No. 9054, the supermajority (2/3) voting requirement required under Section 1, Article XVII of RA No. 9054^[32][32] has to be struck down for giving RA No. 9054 the character of an irrepealable law by requiring more than what the Constitution demands.

Section 16(2), Article VI of the Constitution provides that a “majority of each House shall constitute a quorum to do business.” In other words, as long as majority of the members of the House of Representatives or the Senate are present, these bodies have the quorum needed to conduct business and hold session.  Within a quorum, a vote of majority is generally sufficient to enact laws or approve acts. 

In contrast, Section 1, Article XVII of RA No. 9054 requires a vote of no less than two-thirds (2/3) of the Members of the House of Representatives and of the Senate, voting separately, in order to effectively amend RA No. 9054. Clearly, this 2/3 voting requirement is higher than what the Constitution requires for the passage of bills, and served to restrain the plenary powers of Congress to amend, revise or repeal the laws it had passed.  The Court’s pronouncement in City of Davao v. GSIS^[33][33] on this subject best explains the basis and reason for the unconstitutionality:

Moreover, it would be noxious anathema to democratic principles for a legislative body to have the ability to bind the actions of future legislative body, considering that both assemblies are regarded with equal footing, exercising as they do the same plenary powers. Perpetual infallibility is not one of the attributes desired in a legislative body, and a legislature which attempts to forestall future amendments or repeals of its enactments labors under delusions of omniscience.

xxx

A state legislature has a plenary law-making power over all subjects, whether pertaining to persons or things, within its territorial jurisdiction, either to introduce new laws or repeal the old, unless prohibited expressly or by implication by the federal constitution or limited or restrained by its own. It cannot bind itself or its successors by enacting irrepealable laws except when so restrained. Every legislative body may modify or abolish the acts passed by itself or its predecessors. This power of repeal may be exercised at the same session at which the original act was passed; and even while a bill is in its progress and before it becomes a law. This legislature cannot bind a future legislature to a particular mode of repeal. It cannot declare in advance the intent of subsequent legislatures or the effect of subsequent legislation upon existing statutes.^[34][34] (Emphasis ours.)

Thus, while a supermajority is not a total ban against a repeal, it is a limitation in excess of what the Constitution requires on the passage of bills and is constitutionally obnoxious because it significantly constricts the future legislators’ room for action and flexibility.

III. C. Section 3, Article XVII of RA No. 9054 excessively enlarged the plebiscite requirement found in Section 18, Article X of the Constitution

The requirements of RA No. 9054 not only required an unwarranted supermajority, but enlarged as well the plebiscite requirement, as embodied in its Section 3, Article XVII of that Act.  As we did on the supermajority requirement, we find the enlargement of the plebiscite requirement required under Section 18, Article X of the Constitution to be excessive to point of absurdity and, hence, a violation of the Constitution. 

Section 18, Article X of the Constitution states that the plebiscite is required only for the creation of autonomous regions and for determining which provinces, cities and geographic areas will be included in the autonomous regions. While the settled rule is that amendments to the Organic Act have to comply with the plebiscite requirement in order to become effective,^[35][35] questions on the extent of the matters requiring ratification may unavoidably arise because of the seemingly general terms of the Constitution and the obvious absurdity that would result if a plebiscite were to be required for every statutory amendment.

Section 18, Article X of the Constitution plainly states that “The creation of the autonomous region shall be effective when approved by the majority of the votes case by the constituent units in a plebiscite called for the purpose.”  With these wordings as standard, we interpret the requirement to mean that only amendments to, or revisions of, the Organic Act constitutionally-essential to the creation of autonomous regions – i.e., those aspects specifically mentioned in the Constitution which Congress must provide for in the Organic Act – require ratification through a plebiscite.  These amendments to the Organic Act are those that relate to: (a) the basic structure of the regional government; (b) the region’s judicial system, i.e., the  special  courts  with  personal, family, and property law jurisdiction; and, (c) the grant and extent of the legislative powers constitutionally conceded to the regional government under Section 20, Article X of the Constitution.^[36][36]

The date of the ARMM elections does not fall under any of the matters that the Constitution specifically mandated Congress to provide for in the Organic Act. Therefore, even assuming that the supermajority votes and the plebiscite requirements are valid, any change in the date of elections cannot be construed as a substantial amendment of the Organic Act that would require compliance with these requirements.

IV.  The synchronization issue

As we discussed above, synchronization of national and local elections is a constitutional mandate that Congress must provide for and this synchronization must include the ARMM elections.  On this point, an existing law in fact already exists – RA No. 7166 – as the forerunner of the current RA No. 10153. RA No. 7166 already provides for the synchronization of local elections with the national and congressional elections.  Thus, what RA No. 10153 provides is an old matter for local governments (with the exception of barangay and Sanggunian Kabataan elections where the terms are not constitutionally provided) and is technically a reiteration of what is already reflected in the law, given that regional elections are in reality local elections by express constitutional recognition.^[37][37]

To achieve synchronization, Congress necessarily has to reconcile the schedule of the ARMM’s regular elections (which should have been held in August 2011 based on RA No. 9333) with the fixed schedule of the national and local elections (fixed by RA No. 7166 to be held in May 2013). 

During the oral arguments, the Court identified the three options open to Congress in order to resolve this problem. These options are: (1) to allow the elective officials in the ARMM to remain in office in a hold over capacity, pursuant to Section 7(1), Article VII of RA No. 9054, until those elected in the synchronized elections assume office;^[38][38] (2) to hold special elections in the ARMM, with the terms of those elected to expire when those elected in the synchronized elections assume office; or (3) to authorize the President to appoint OICs, pursuant to Section 3 of RA No. 10153, also until those elected in the synchronized elections assume office.

As will be abundantly clear in the discussion below, Congress, in choosing to grant the President the power to appoint OICs, chose the correct option and passed RA No. 10153 as a completely valid law.

1. V.                           The Constitutionality of RA No. 10153

1. A.              Basic Underlying Premises

To fully appreciate the available options, certain underlying material premises must be fully understood.  The first is the extent of the powers of Congress to legislate; the second is the constitutional mandate for the synchronization of elections; and the third is on the concept of autonomy as recognized and established under the 1987 Constitution. 

The grant of legislative power to Congress is broad, general and comprehensive.^[39][39] The legislative body possesses plenary power for all purposes of civil government.^[40][40] Any power, deemed to be legislative by usage and tradition, is necessarily possessed by Congress, unless the Constitution has lodged it elsewhere.^[41][41]  Except as limited by the Constitution, either expressly or impliedly, legislative power embraces all subjects and extends to all matters of general concern or common interest.^[42][42]

The constitutional limitations on legislative power are either express or implied. The express limitations are generally provided in some provisions of the Declaration of Principles and State Policies (Article 2) and in the provisions Bill of Rights (Article 3).  Other constitutional provisions (such as the initiative and referendum clause of Article 6, Sections 1 and 32, and the autonomy provisions of Article X) provide their own express limitations. The implied limitations are found “in the evident purpose which was in view and the circumstances and historical events which led to the enactment of the particular provision as a part of organic law.”^[43][43] 

The constitutional provisions on autonomy – specifically, Sections 15 to 21 of Article X of the Constitution – constitute express limitations on legislative power as they define autonomy, its requirements and its parameters, thus limiting what is otherwise the unlimited power of Congress to legislate on the governance of the autonomous region.

Of particular relevance to the issues of the present case are the limitations posed by the prescribed basic structure of government – i.e., that the government must have an executive department and a legislative assembly, both of which must be elective and representative of the constituent political units; national government, too, must not encroach on the legislative powers granted under Section 20, Article X.  Conversely and as expressly reflected in Section 17, Article X, “all powers and functions not granted by this Constitution or by law to the autonomous regions shall be vested in the National Government.”

The totality of Sections 15 to 21 of Article X should likewise serve as a standard that Congress must observe in dealing with legislation touching on the affairs of the autonomous regions.  The terms of these sections leave no doubt on what the Constitution intends – the idea of self-rule or self-government, in particular, the power to legislate on a wide array of social, economic and administrative matters.  But equally clear under these provisions are the permeating principles of national sovereignty and the territorial integrity of the Republic, as expressed in the above-quoted Section 17 and in Section 15.^[44][44]  In other words, the Constitution and the supporting jurisprudence, as they now stand, reject the notion of imperium et imperio^[45][45] in the relationship between the national and the regional governments.

In relation with synchronization, both autonomy and the synchronization of national and local elections are recognized and established constitutional mandates, with one being as compelling as the other.  If their compelling force differs at all, the difference is in their coverage; synchronization operates on and affects the whole country, while regional autonomy – as the term suggests – directly carries a narrower regional effect although its national effect cannot be discounted.

These underlying basic concepts characterize the powers and limitations of Congress when it acted on RA No. 10153.  To succinctly describe the legal situation that faced Congress then, its decision to synchronize the regional elections with the national, congressional and all other local elections (save for barangay and sangguniang kabataan  elections) left it with the problem of how to provide the ARMM with governance in the intervening period between the expiration of the term of those elected in August 2008 and the assumption to office – twenty-one (21) months away – of those who will win in the synchronized elections on May 13, 2013. 

The problem, in other words, was for interim measures for this period, consistent with the terms of the Constitution and its established supporting jurisprudence, and with the respect due to the concept of autonomy.  Interim measures, to be sure, is not a strange phenomenon in the Philippine legal landscape. The Constitution’s Transitory Provisions themselves collectively provide measures for transition from the old constitution to the new^[46][46]  and for the introduction of new concepts.^[47][47]  As previously mentioned, the adjustment of elective terms and of elections towards the goal of synchronization first transpired under the Transitory Provisions.  The adjustments, however, failed to look far enough or deeply enough, particularly into the problems that synchronizing regional autonomous elections would entail; thus, the present problem is with us today.

The creation of local government units also represents instances when interim measures are required.  In the creation of Quezon del Sur^[48][48] and Dinagat Islands,^[49][49] the creating statutes authorized the President to appoint an interim governor, vice-governor and members of the sangguniang panlalawigan although these positions are essentially elective in character; the appointive officials were to serve until a new set of provincial officials shall have been elected and qualified.^[50][50]  A similar authority to appoint is provided in the transition of a local government from a sub-province to a province.^[51][51]

In all these, the need for interim measures is dictated by necessity; out-of-the-way arrangements and approaches were adopted or used in order to adjust to the goal or objective in sight in a manner that does not do violence to the Constitution and to reasonably accepted norms.  Under these limitations, the choice of measures was a question of wisdom left to congressional discretion.

To return to the underlying basic concepts, these concepts shall serve as the guideposts and markers in our discussion of the options available to Congress to address the problems brought about by the synchronization of the ARMM elections, properly understood as interim measures that Congress had to provide.  The proper understanding of the options as interim measures assume prime materiality as it is under these terms that the passage of RA No. 10153 should be measured, i.e., given the constitutional objective of synchronization that cannot legally be faulted, did Congress gravely abuse its discretion or violate the Constitution when it addressed through RA No. 10153 the concomitant problems that the adjustment of elections necessarily brought with it? 

B. Holdover Option is Unconstitutional

We rule out the first option – holdover for those who were elected in executive and legislative positions in the ARMM during the 2008-2011 term – as an option that Congress could have chosen because a holdover violates Section 8, Article X of the Constitution.  This provision states:

Section 8. The term of office of elective local officials, except barangay officials, which shall be determined by law, shall be three years and no such official shall serve for more than three consecutive terms. [emphases ours]

Since elective ARMM officials are local officials, they are covered and bound by the three-year term limit prescribed by the Constitution; they cannot extend their term through a holdover. As this Court put in Osmeña v. COMELEC:^[52][52]

It is not competent for the legislature to extend the term of officers by providing that they shall hold over until their successors are elected and qualified where the constitution has in effect or by clear implication prescribed the term and when the Constitution fixes the day on which the official term shall begin, there is no legislative authority to continue the office beyond that period, even though the successors fail to qualify within the time.

In American Jurisprudence it has been stated as follows:

“It has been broadly stated that the legislature cannot, by an act postponing the election to fill an office the term of which is limited by the Constitution, extend the term of the incumbent beyond the period as limited by the Constitution.” [Emphasis ours.]

Independently of the Osmeña ruling, the primacy of the Constitution as the supreme law of the land dictates that where the Constitution has itself made a determination or given its mandate, then the matters so determined or mandated should be respected until the Constitution itself is changed by amendment or repeal through the applicable constitutional process. A necessary corollary is that none of the three branches of government can deviate from the constitutional mandate except only as the Constitution itself may allow.^[53][53] If at all, Congress may only pass legislation filing in details to fully operationalize the constitutional command or to implement it by legislation if it is non-self-executing; this Court, on the other hand, may only interpret the mandate if an interpretation is appropriate and called for.^[54][54]

          In the case of the terms of local officials, their term has been fixed clearly and unequivocally, allowing no room for any implementing legislation with respect to the fixed term itself and no vagueness that would allow an interpretation from this Court. Thus, the term of three years for local officials should stay at three (3) years as fixed by the Constitution and cannot be extended by holdover by Congress.

         If it will be claimed that the holdover period is effectively another term mandated by Congress, the net result is for Congress to create a new term and to appoint the occupant for the new term. This view – like the  extension of the elective term – is constitutionally infirm because Congress cannot do indirectly what it cannot do directly, i.e., to act in a way that would effectively extend the term of the incumbents. Indeed, if acts that cannot be legally done directly can be done indirectly, then all laws would be illusory.^[55][55] Congress cannot also create a new term and effectively appoint the occupant of the position for the new term. This is effectively an act of appointment by Congress and an unconstitutional intrusion into the constitutional appointment power of the President.^[56][56] Hence, holdover – whichever way it is viewed – is a constitutionally infirm option that Congress could not have undertaken.

          Jurisprudence, of course, is not without examples of cases where the question of holdover was brought before, and given the imprimatur of approval by, this Court. The present case though differs significantly from past cases with contrary rulings, particularly from Sambarani v. COMELEC,^[57][57] Adap v. Comelec,^[58][58] and Montesclaros v. Comelec,^[59][59]  where the Court ruled that the elective officials could hold on to their positions in a hold over capacity.

All these past cases refer to elective barangay or sangguniang kabataan  officials  whose  terms of office are  not explicitly provided for in  the  Constitution;  the present case, on the other hand, refers to local elective officials – the ARMM Governor, the ARMM Vice-Governor, and the members of the Regional Legislative Assembly – whose terms fall within the three-year term limit set by Section 8, Article X of the Constitution. Because of their constitutionally limited term, Congress cannot legislate an extension beyond the term for which they were originally elected.

Even assuming that holdover is constitutionally permissible, and there had been statutory basis for it (namely Section 7, Article VII of RA No. 9054) in the past,^[60][60] we have to remember that the rule of holdover can only apply as an available option where no express or implied legislative intent to the contrary exists; it cannot apply where such contrary intent is evident.^[61][61]

Congress, in passing RA No. 10153, made it explicitly clear that it had the intention of suppressing the holdover rule that prevailed under RA No. 9054 by completely removing this provision. The deletion is a policy decision that is wholly within the discretion of Congress to make in the exercise of its plenary legislative powers; this Court cannot pass upon questions of wisdom, justice or expediency of legislation,^[62][62] except where an attendant unconstitutionality or grave abuse of discretion results.

C.  The COMELEC has no authority to order special elections

Another option proposed by the petitioner in G.R. No. 197282 is for this Court to compel COMELEC to immediately conduct special elections pursuant to Section 5 and 6 of Batas Pambansa Bilang (BP) 881.

The power to fix the date of elections is essentially legislative in nature, as evident from, and exemplified by, the following provisions of the Constitution:

Section 8, Article VI, applicable to the legislature, provides:

Section 8.  Unless otherwise provided by law, the regular election of the Senators and the Members of the House of Representatives shall be held on the second Monday of May. [Emphasis ours]

Section 4(3), Article VII, with the same tenor but applicable solely to the President and Vice-President, states:

xxxx

Section 4. xxx Unless otherwise provided by law, the regular election for President and Vice-President shall be held on the second Monday of May. [Emphasis ours]

while Section 3, Article X, on local government, provides:

Section 3. The Congress shall enact a local government code which shall provide for xxx the qualifications, election, appointment and removal, term, salaries, powers and functions and duties of local officials[.] [Emphases ours] 

These provisions support the conclusion that no elections may be held on any other date for the positions of President, Vice President, Members of Congress and local officials, except when so provided by another Act of Congress, or upon orders of a body or officer to whom Congress may have delegated either the power or the authority to ascertain or fill in the details in the execution of that power.^[63][63]

Notably, Congress has acted on the ARMM elections by postponing the scheduled August 2011 elections and setting another date – May 13, 2011 – for regional elections synchronized with the presidential, congressional and other local elections.  By so doing, Congress itself has made a policy decision in the exercise of its legislative wisdom that it shall not call special elections as an adjustment measure in synchronizing the ARMM elections with the other elections.

After Congress has so acted, neither the Executive nor the Judiciary can act to the contrary by ordering special elections instead at the call of the COMELEC.  This Court, particularly, cannot make this call without thereby supplanting the legislative decision and effectively legislating.  To be sure, the Court is not without the power to declare an act of Congress null and void for being unconstitutional or for having been exercised in grave abuse of discretion.^[64][64]  But our power rests on very narrow ground and is merely to annul a contravening act of Congress; it is not to supplant the decision of Congress nor to mandate what Congress itself should have done in the exercise of its legislative powers.  Thus, contrary to what the petition in G.R. No. 197282 urges, we cannot compel COMELEC to call for special elections.

Furthermore, we have to bear in mind that the constitutional power of the COMELEC, in contrast with the power of Congress to call for, and to set the date of, elections, is limited to enforcing and administering all laws and regulations relative to the conduct of an election.^[65][65] Statutorily, COMELEC has no power to call for the holding of special elections unless pursuant to a specific statutory grant.  True, Congress did grant, via Sections 5 and 6 of BP 881, COMELEC with the power to postpone elections to another date. However, this power is limited to, and can only be exercised within, the specific terms and circumstances provided for in the law. We quote:

Section 5. Postponement of election. – When for any serious cause such as violence, terrorism, loss or destruction of election paraphernalia or records, force majeure, and other analogous causes of such a nature that the holding of a free, orderly and honest election should become impossible in any political subdivision, the Commission, motu proprio or upon a verified petition by any interested party, and after due notice and hearing, whereby all interested parties are afforded equal opportunity to be heard, shall postpone the election therein to a date which should be reasonably close to the date of the election not held, suspended or which resulted in a failure to elect but not later than thirty days after the cessation of the cause for such postponement or suspension of the election or failure to elect.

Section 6. Failure of election. – If, on account of force majeure, violence, terrorism, fraud, or other analogous causes the election in any polling place has not been held on the date fixed, or had been suspended before the hour fixed by law for the closing of the voting, or after the voting and during the preparation and the transmission of the election returns or in the custody or canvass thereof, such election results in a failure to elect, and in any of such cases the failure or suspension of election would affect the result of the election, the Commission shall, on the basis of a verified petition by any interested party and after due notice and hearing, call for the holding or continuation of the election not held, suspended or which resulted in a failure to elect on a date reasonably close to the date of the election not held, suspended or which resulted in a failure to elect but not later than thirty days after the cessation of the cause of such postponement or suspension of the election or failure to elect. [Emphasis ours]

A close reading of Section 5 of BP 881 reveals that it is meant to address instances where elections have already been scheduled to take place but have to be postponed because of (a) violence, (b) terrorism, (c) loss or destruction of election paraphernalia or records, (d) force majeure, and (e) other analogous causes of such a nature that the holding of a free, orderly and honest election should become impossible in any political subdivision.  Under the principle of ejusdem generis, the term “analogous causes” will be restricted to those unforeseen or unexpected events that prevent the holding of the scheduled elections. These “analogous causes” are further defined by the phrase “of such nature that the holding of a free, orderly and honest election should become impossible.”

Similarly, Section 6 of BP 881 applies only to those situations where elections have already been scheduled but do not take place because of (a) force majeure, (b) violence, (c) terrorism, (d) fraud, or (e) other analogous causes the election in any polling place has not been held on the date fixed, or had been suspended before the hour fixed by law for the closing of the voting, or after the voting and during the preparation and the transmission of the election returns or in the custody or canvass thereof, such election results in a failure to elect. As in Section 5 of BP 881, Section 6 addresses instances where the elections do not occur or had to be suspended because of unexpected and unforeseen circumstances.

In the present case, the postponement of the ARMM elections is by law – i.e., by congressional policy – and is pursuant to the constitutional mandate of synchronization of national and local elections. By no stretch of the imagination can these reasons be given the same character as the circumstances contemplated by Section 5 or Section 6 of BP 881, which all pertain to extralegal causes that obstruct the holding of elections.  Courts, to be sure, cannot enlarge the scope of a statute under the guise of interpretation, nor include situations not provided nor intended by the lawmakers.^[66][66] Clearly, neither Section 5 nor Section 6 of BP 881 can apply to the present case and this Court has absolutely no legal basis to compel the COMELEC to hold special elections.

D.  The Court has no power to shorten the terms of elective officials

Even assuming that it is legally permissible for the Court to compel the COMELEC to hold special elections, no legal basis likewise exists to rule that the newly elected ARMM officials shall hold office only until the ARMM officials elected in the synchronized elections shall have assumed office. 

In the first place, the Court is not empowered to adjust the terms of elective officials. Based on the Constitution, the power to fix the term of office of elective officials, which can be exercised only in the case of barangay officials,^[67][67] is specifically given to Congress. Even Congress itself may be denied such power, as shown when the Constitution shortened the terms of twelve Senators obtaining the least votes,^[68][68] and extended the terms of the President and the Vice-President^[69][69] in order to synchronize elections; Congress was not granted this same power.  The settled rule is that terms fixed by the Constitution cannot be changed by mere statute.^[70][70]  More particularly, not even Congress and certainly not this Court, has the authority to fix the terms of elective local officials in the ARMM for less, or more, than the constitutionally mandated three years^[71][71] as this tinkering would directly contravene Section 8, Article X of the Constitution as we ruled in Osmena.

Thus, in the same way that the term of elective ARMM officials cannot be extended through a holdover, the term cannot be shortened by putting an expiration date earlier than the three (3) years that the Constitution itself commands.  This is what will happen – a term of less than two years – if a call for special elections shall prevail. In sum, while synchronization is achieved, the result is at the cost of a violation of an express provision of the Constitution. 

Neither we nor Congress can opt to shorten the tenure of those officials to be elected in the ARMM elections instead of acting on their term (where the “term” means the time during which the officer may claim to hold office as of right and fixes the interval after which the several incumbents shall succeed one another, while the “tenure” represents the term during which the incumbent actually holds the office).^[72][72] As with the fixing of the elective term, neither Congress nor the Court has any legal basis to shorten the tenure of elective ARMM officials. They would commit an unconstitutional act and gravely abuse their discretion if they do so.

E.  The President’s Power to Appoint OICs

The above considerations leave only Congress’ chosen interim measure – RA No. 10153 and the appointment by the President of OICs to govern the ARMM during the pre-synchronization period pursuant to Sections 3, 4 and 5 of this law – as the only measure that Congress can make.  This choice itself, however, should be examined for any attendant constitutional infirmity.

At the outset, the power to appoint is essentially executive in nature, and the limitations on or qualifications to the exercise of this power should be strictly construed; these limitations or qualifications must be clearly stated in order to be recognized.^[73][73] The appointing power is embodied in Section 16, Article VII of the Constitution, which states:

Section 16. The President shall nominate and, with the consent of the Commission on Appointments, appoint the heads of the executive departments, ambassadors, other public ministers and consuls or officers of the armed forces from the rank of colonel or naval captain, and other officers whose appointments are vested in him in this Constitution. He shall also appoint all other officers of the Government whose appointments are not otherwise provided for by law, and those whom he may be authorized by law to appoint. The Congress may, by law, vest the appointment of other officers lower in rank in the President alone, in the courts, or in the heads of departments, agencies, commissions, or boards. [emphasis ours]

This provision classifies into four groups the officers that the President can appoint. These are:

First, the heads of the executive departments; ambassadors; other public ministers and consuls; officers of the Armed Forces of the Philippines, from the rank of colonel or naval captain; and other officers whose appointments are vested in the President in this Constitution;

Second, all other officers of the government whose appointments are not otherwise provided for by law;

Third, those whom the President may be authorized by law to appoint; and

Fourth, officers lower in rank whose appointments the Congress may by law vest in the President alone.^[74][74]

Since the President’s authority to appoint OICs emanates from RA No. 10153, it falls under the third group of officials that the President can appoint pursuant to Section 16, Article VII of the Constitution. Thus, the assailed law facially rests on clear constitutional basis. 

If at all, the gravest challenge posed by the petitions to the authority to appoint OICs under Section 3 of RA No. 10153 is the assertion that the Constitution requires that the ARMM executive and legislative officials to be “elective and representative of the constituent political units.” This requirement indeed is an express limitation whose non-observance in the assailed law leaves the appointment of OICs constitutionally defective. 

After fully examining the issue, we hold that this alleged  constitutional problem is more apparent than real and becomes very real only if RA No. 10153 were to be mistakenly read as a law that changes the elective and representative character of ARMM positions.  RA No. 10153, however, does not in any way amend what the organic law of the ARMM  (RA No. 9054) sets outs in terms of structure of governance.  What RA No. 10153 in fact only does is to “appoint officers-in-charge for the Office of the Regional Governor, Regional Vice Governor and Members of the Regional Legislative Assembly who shall perform the functions pertaining to the said offices until the officials duly elected in the May 2013 elections shall have qualified and assumed office.”  This power is far different from appointing elective ARMM officials for the abbreviated term ending on the assumption to office of the officials elected in the May 2013 elections.

As we have already established in our discussion of the supermajority and plebiscite requirements, the legal reality is that RA No. 10153 did not amend RA No. 9054.  RA No. 10153, in fact, provides only for synchronization of elections and for the interim measures that must in the meanwhile prevail.  And this is how RA No. 10153 should be read – in the manner it was written and based on its unambiguous facial terms.^[75][75] Aside from its order for synchronization, it is purely and simply an interim measure responding to the adjustments that the synchronization requires. 

Thus, the appropriate question to ask is whether the interim measure is an unreasonable move for Congress to adopt, given the legal situation that the synchronization unavoidably brought with it.  In more concrete terms and based on the above considerations, given the plain unconstitutionality of providing for a holdover and the unavailability of constitutional possibilities for lengthening or shortening the term of the elected ARMM officials, is the choice of the President’s power to appoint – for a fixed and specific period as an interim measure, and as allowed under Section 16, Article VII of the Constitution – an unconstitutional or unreasonable choice for Congress to make?

Admittedly, the grant of the power to the President under other situations or where the power of appointment would extend beyond the adjustment period for synchronization would be to foster a government that is not “democratic and republican.” For then, the people’s right to choose the leaders to govern them may be said to be systemically withdrawn to the point of fostering an undemocratic regime.  This is the grant that would frontally breach the “elective and representative” governance requirement of Section 18, Article X of the Constitution. 

But this conclusion would not be true under the very limited circumstances contemplated in RA No. 10153 where the period is fixed and, more importantly, the terms of governance – both under Section 18, Article X of the Constitution and RA No. 9054 – will not systemically be touched nor affected at all.  To repeat what has previously been said, RA No. 9054 will govern unchanged and continuously, with full effect in accordance with the Constitution, save only for the interim and temporary measures that synchronization of elections requires.  

Viewed from another perspective, synchronization will temporarily disrupt the election process in a local community, the ARMM, as well as the community’s choice of leaders, but this will take place under a situation of necessity and as an interim measure in the manner that interim measures have been adopted and used in the creation of local government units^[76][76] and the adjustments of sub-provinces to the status of provinces.^[77][77] These measures, too, are used in light of the wider national demand for the synchronization of elections (considered vis-à-vis the regional interests involved).  The adoption of these measures, in other words, is no different from the exercise by Congress of the inherent police power of the State, where one of the essential tests is the reasonableness of the interim measure taken in light of the given circumstances.

Furthermore, the “representative” character of the chosen leaders need not necessarily be affected by the appointment of OICs as this requirement is really a function of the appointment process; only the “elective” aspect shall be supplanted by the appointment of OICs.  In this regard, RA No. 10153 significantly seeks to address concerns arising from the appointments by providing, under Sections 3, 4 and 5 of the assailed law, concrete terms in the Appointment of OIC, the Manner and Procedure of Appointing OICs, and their Qualifications.

Based on these considerations, we hold that RA No. 10153 – viewed in its proper context – is a law that is not violative of the Constitution (specifically, its autonomy provisions), and one that is reasonable as well under the circumstances.

VI. Other Constitutional Concerns

Outside of the above concerns, it has been argued during the oral arguments that upholding the constitutionality of RA No. 10153 would set a dangerous precedent of giving the President the power to cancel elections anywhere in the country, thus allowing him to replace elective officials with OICs. 

This claim apparently misunderstands that an across-the-board cancellation of elections is a matter for Congress, not for the President, to address. It is a power that falls within the powers of Congress in the exercise of its legislative powers.  Even Congress, as discussed above, is limited in what it can legislatively undertake with respect to elections. 

If RA No. 10153 cancelled the regular August 2011 elections, it was for a very specific and limited purpose – the synchronization of elections.  It was a temporary means to a lasting end – the synchronization of elections. Thus, RA No. 10153 and the support that the Court gives this legislation are likewise clear and specific, and cannot be transferred or applied to any other cause for the cancellation of elections. Any other localized cancellation of elections and call for special elections can occur only in accordance with the power already delegated by Congress to the COMELEC, as above discussed.   

Given that the incumbent ARMM elective officials cannot continue to act in a holdover capacity upon the expiration of their terms, and this Court cannot compel the COMELEC to conduct special elections, the Court now has to deal with the dilemma of a vacuum in governance in the ARMM.

To emphasize the dire situation a vacuum brings, it should not be forgotten that a period of 21 months – or close to 2 years – intervenes from the time that the incumbent ARMM elective officials’ terms expired and the time the new ARMM elective officials begin their terms in 2013. As the lessons of our Mindanaohistory – past and current – teach us, many developments, some of them critical and adverse, can transpire in the country’s Muslim areas in this span of time in the way they transpired in the past.^[78][78]  Thus, it would be reckless to assume that the presence of an acting ARMM Governor, an acting Vice-Governor and a fully functioning Regional Legislative Assembly can be done away with even temporarily.  To our mind, the appointment of OICs under the present circumstances is an absolute necessity.

Significantly, the grant to the President of the power to appoint OICs to undertake the functions of the elective members of the Regional Legislative Assembly is neither novel nor innovative.  We hark back to our earlier pronouncement in Menzon v. Petilla, etc., et al.:^[79][79]

It may be noted that under Commonwealth Act No. 588 and the Revised Administrative Code of 1987, the President is empowered to make temporary appointments in certain public offices, in case of any vacancy that may occur. Albeit both laws deal only with the filling of vacancies in appointive positions. However, in the absence of any contrary provision in the Local Government Code and in the best interest of public service, we see no cogent reason why the procedure thus outlined by the two laws may not be similarly applied in the present case. The respondents contend that the provincial board is the correct appointing power. This argument has no merit. As between the President who has supervision over local governments as provided by law and the members of the board who are junior to the vice-governor, we have no problem ruling in favor of the President, until the law provides otherwise.

A vacancy creates an anomalous situation and finds no approbation under the law for it deprives the constituents of their right of representation and governance in their own local government.

In a republican form of government, the majority rules through their chosen few, and if one of them is incapacitated or absent, etc., the management of governmental affairs is, to that extent, may be hampered. Necessarily, there will be a consequent delay in the delivery of basic services to the people of Leyte if the Governor or the Vice-Governor is missing.^[80][80](Emphasis ours.)

As in Menzon, leaving the positions of ARMM Governor, Vice Governor, and members of the Regional Legislative Assembly vacant for 21 months, or almost 2 years, would clearly cause disruptions and delays in the delivery of basic services to the people, in the proper management of the affairs of the regional government, and in responding to critical developments that may arise. When viewed in this context, allowing the President in the exercise of his constitutionally-recognized appointment power to appoint OICs is, in our judgment, a reasonable measure to take.

B.  Autonomy in the ARMM

It is further argued that while synchronization may be constitutionally mandated, it cannot be used to defeat or to impede the autonomy that the Constitution granted to the ARMM. Phrased in this manner, one would presume that there exists a conflict between two recognized Constitutional mandates – synchronization and regional autonomy – such that it is necessary to choose one over the other.

We find this to be an erroneous approach that violates a basic principle in constitutional construction – ut magis valeat quam pereat: that the Constitution is to be interpreted as a whole,^[81][81] and one mandate should not be given importance over the other except where the primacy of one over the other is clear.^[82][82]  We refer to the Court’s declaration in Ang-Angco v. Castillo, et al.,^[83][83] thus:

A provision of the constitution should not be construed in isolation from the rest. Rather, the constitution must be interpreted as a whole, and apparently, conflicting provisions should be reconciled and harmonized in a manner that may give to all of them full force and effect. [Emphasis supplied.]

Synchronization is an interest that is as constitutionally entrenched as regional autonomy. They are interests that this Court should reconcile and give effect to, in the way that Congress did in RA No. 10153 which provides the measure to transit to synchronized regional elections with the least disturbance on the interests that must be respected.  Particularly, regional autonomy will be respected instead of being sidelined, as the law does not in any way alter, change or modify its governing features, except in a very temporary manner and only as necessitated by the attendant circumstances.  

          Elsewhere, it has also been argued that the ARMM elections should not be synchronized with the national and local elections in order to maintain the autonomy of the ARMM and insulate its own electoral processes from the rough and tumble of nationwide and local elections.  This argument leaves us far from convinced of its merits.

As heretofore mentioned and discussed, while autonomous regions are granted political autonomy, the framers of the Constitution never equated autonomy with independence. The ARMM as a regional entity thus continues to operate within the larger framework of the State and is still subject to the national policies set by the national government, save only for those specific areas reserved by the Constitution for regional autonomous determination. As reflected during the constitutional deliberations of the provisions on autonomous regions:

Mr. Bennagen. xxx We do not see here a complete separation from the central government, but rather an efficient working relationship between the autonomous region and the central government. We see this as an effective partnership, not a separation.

Mr. Romulo. Therefore, complete autonomy is not really thought of as complete independence.

Mr. Ople. We define it as a measure of self-government within the larger political framework of the nation.^[84][84] [Emphasis supplied.]

This exchange of course is fully and expressly reflected in the above-quoted Section 17, Article X of the Constitution, and by the express reservation under Section 1 of the same Article that autonomy shall be “within the framework of this Constitution and the national sovereignty as well as the territorial integrity of the Republic of the Philippines.”

Interestingly, the framers of the Constitution initially proposed to remove Section 17 of Article X, believing it to be unnecessary in light of the enumeration of powers granted to autonomous regions in Section 20, Article X of the Constitution. Upon further reflection, the framers decided to reinstate the provision in order to “make it clear, once and for all, that these are the limits of the powers of the autonomous government. Those not enumerated are actually to be exercised by the national government[.]”^[85][85] Of note is the Court’s pronouncement in Pimentel, Jr. v. Hon. Aguirre^[86][86] which we quote:

Under the Philippine concept of local autonomy, the national government has not completely relinquished all its powers over local governments, including autonomous regions.  Only administrative powers over local affairs are delegated to political subdivisions.  The purpose of the delegation is to make governance more directly responsive and effective at the local levels.  In turn, economic, political and social development at the smaller political units are expected to propel social and economic growth and development.  But to enable the country to develop as a whole, the programs and policies effected locally must be integrated and coordinated towards a common national goal.  Thus, policy-setting for the entire country still lies in the President and Congress. [Emphasis ours.]

In other words, the autonomy granted to the ARMM cannot be invoked to defeat national policies and concerns. Since the synchronization of elections is not just a regional concern but a national one, the ARMM is subject to it; the regional autonomy granted to the ARMM cannot be used to exempt the region from having to act in accordance with a national policy mandated by no less than the Constitution. 

Conclusion

Congress acted within its powers and pursuant to a constitutional mandate – the synchronization of national and local elections – when it enacted RA No. 10153.  This Court cannot question the manner by which Congress undertook this task; the Judiciary does not and cannot pass upon questions of wisdom, justice or expediency of legislation.^[87][87] As judges, we can only interpret and apply the law and, despite our doubts about its wisdom, cannot repeal or amend it.^[88][88]

Nor can the Court presume to dictate the means by which Congress should address what is essentially a legislative problem. It is not within the Court’s power to enlarge or abridge laws; otherwise, the Court will be guilty of usurping the exclusive prerogative of Congress.^[89][89] The petitioners, in asking this Court to compel COMELEC to hold special elections despite its lack of authority to do so, are essentially asking us to venture into the realm of judicial legislation, which is abhorrent to one of the most basic principles of a republican and democratic government – the separation of powers. 

The petitioners allege, too, that we should act because Congress acted with grave abuse of discretion in enacting RA No. 10153. Grave abuse of discretion is such capricious and whimsical exercise of judgment that is patent and gross as to amount to an evasion of a positive duty or to a virtual refusal to perform a duty enjoined by law or to act at all in contemplation of the law as where the power is exercised in an arbitrary and despotic manner by reason of passion and hostility.^[90][90] 

We find that Congress, in passing RA No. 10153, acted strictly within its constitutional mandate. Given an array of choices, it acted within due constitutional bounds and with marked reasonableness in light of the necessary adjustments that synchronization demands. Congress, therefore, cannot be accused of any evasion of a positive duty or of a refusal to perform its duty.  We thus find no reason to accord merit to the petitioners’ claims of grave abuse of discretion.

On the general claim that RA No. 10153 is unconstitutional, we can only reiterate the established rule that every statute is presumed valid.^[91][91] Congress, thus, has in its favor the presumption of constitutionality of its acts, and the party challenging the validity of a statute has the onerous task of rebutting this presumption.^[92][92] Any reasonable doubt about the validity of the law should be resolved in favor of its constitutionality.^[93][93] As this Court declared in Garcia v. Executive Secretary:^[94][94]

The policy of the courts is to avoid ruling on constitutional questions and to presume that the acts of the political departments are valid in the absence of a clear and unmistakable showing to the contrary.  To doubt is to sustain.  This presumption is based on the doctrine of separation of powers which enjoins upon each department a becoming respect for the acts of the other departments.  The theory is that as the joint act of Congress and the President of the Philippines, a law has been carefully studied and determined to be in accordance with the fundamental law before it was finally enacted.^[95][95] [Emphasis ours.]

Given the failure of the petitioners to rebut the presumption of constitutionality in favor of RA No. 10153, we must support and confirm its validity.

WHEREFORE, premises considered, we DISMISS the consolidated petitions assailing the validity of RA No. 10153 for lack of merit, and UPHOLD the constitutionality of this law.  We likewise LIFT the temporary restraining order we issued in our Resolution of September 13, 2011.  No costs.

SO ORDERED.

                                                ARTURO D. BRION

                                                Associate Justice

WE CONCUR:

I join the dissent of J. Velasco with respect to the appointment
of the OIC Governor and vote to hold the law as unconstitutional
RENATO C. CORONA

Chief Justice

ESTELA M. PERLAS-BERNABE

Associate Justice

C E R T I F I C A T I O N

          Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court.

                                                RENATO C. CORONA

                                                Chief Justice

CASE 2011-0205: ENRIQUE U. BETOY VS. THE BOARD OF DIRECTORS, NATIONAL POWER CORPORATION (G.R. NOS. 156556-57, 04 OCTOBER 2011, PERALTA, J.) SUBJECTS: EPIRA; REORGANIZATION OF NPC (BRIEF TITLE: BETOY VS. NPC)

=========================

DISPOSITIVE:

        WHEREFORE, premises considered and subject to the above disquisitions, the Petition for Certiorari and the Supplemental Petition for Mandamus are Dismissed for lack of merit.

        SO ORDERED.

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Republic of thePhilippines

Supreme Court

Manila

EN BANC

x – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – -x

D E C I S I O N

PERALTA, J.:

          Before this Court is a special civil action for certiorari^[1][1] and supplemental petition for mandamus,^[2][2] specifically assailing National Power Board Resolutions No. 2002-124 and No. 2002-125, as well as Sections 11, 34, 38, 48, 52 and 63 of Republic Act (R.A.) No. 9136, otherwise known as the Electric Power Industry Reform Act of 2001 (EPIRA).  Also assailed is Rule 33 of the Implementing Rules and Regulations (IRR) of the EPIRA. 

          The facts of the case are as follows:

          OnJune 8, 2001, the EPIRA was enacted by Congress with the goal of restructuring the electric power industry and privatization of the assets of the National Power Corporation (NPC).

          Pursuant to Section 48^[3][3] of the EPIRA, a new National Power Board of Directors (NPB) was created. On February 27, 2002, pursuant to Section 77^[4][4] of the EPIRA, the Secretary of the Department of Energy promulgated the IRR.

          On the other hand, Section 63 of the EPIRA provides for separation benefits to officials and employees who would be affected by the restructuring of the electric power industry and the privatization of the assets of the NPC, to wit:

          Section 63. Separation Benefits of Officials and Employees of Affected Agencies. – National Government employees displaced or separated from the service as a result of the restructuring of the electricity industry and privatization of NPC assets pursuant to this Act, shall be entitled to either a separation pay and other benefits in accordance with existing laws, rules or regulations or be entitled to avail of the privileges provided under a separation plan which shall be one and one-half month salary for every year of service in the government: Provided, however, That those who avail of such privileges shall start their government service anew if absorbed by any government-owned successor company. In no case shall there be any diminution of benefits under the separation plan until the full implementation of the restructuring and privatization.

             Displaced or separated personnel as a result of the privatization, if qualified, shall be given preference in the hiring of the manpower requirements of the privatized companies. x x x^[5][5]

            Rule 33^[6][6] of the IRR provided for the coverage and the guidelines for

the separation benefits to be given to the employees affected.

          On November 18, 2002, pursuant to Section 63 of the EPIRA and Rule 33 of the IRR, the NPB passed NPB Resolution No. 2002-124^[7][7] which, among others, resolved that all NPC personnel shall be legally terminated on January 31, 2003 and shall be entitled to separation benefits. On the same day, the NPB passed NPB Resolution No. 2002-125^[8][8] which created a transition team to manage and implement the separation program.

          As a result of the foregoing NPB Resolutions, petitioner Enrique U. Betoy, together with thousands of his co-employees from the NPC were terminated.

          Hence, herein petition for certiorari with petitioner praying for the grant of the following reliefs from this Court, to wit:

1.  Declaring National Power Board Resolution Nos. 2002-124 and 2002-125 and its Annex “B” Null and Void, the fact [that] it was done with extraordinary haste and in secrecy without the able participation of the Napocor Employees Consolidated Union (NECU) to represent all career civil service employees on issues affecting their rights to due process, equity, security of tenure, social benefits accrued to them, and as well as the disclosure of public transaction provisions of the 1987 Constitution because during its proceeding the National Power Board had acted with grave abuse of discretion and disregarding constitutional and statutory injunctions on removal of public servants and non-diminution of social benefits accrued to separated employees, thus, amounting to excess of jurisdiction;

2.  Striking down Section 11, Section 48 and Section 52 of RA 9136 (EPIRA) for being violative of Section 13, Article VII of the 1987 Constitution and, therefore, unconstitutional;

3. Striking Section 34 of RA 9136 (EPIRA) for being exorbitant display of State Power and was not premised on the welfare of the FILIPINO PEOPLE or principle of salus populi est suprema lex;

            4.  Striking down Section 38 for RA 9136 (EPIRA) for being a prelude to Charter Change without a valid referendum for ratification of the entire voter citizens of the Philippine Republic;

            5.  Striking down all other provisions of RA 9136 (EPIRA) found repugnant to the 1987 Constitution;

            6.  Striking down all provisions of the Implementing Rules and Regulations (IRR) of the EPIRA found repugnant to the 1987 Constitution;

            7. Striking down Section 63 of RA 9136 (EPIRA) for classifying such provisions in the same vein with Proclamation No. 50 used against MWSS employees and its failure to classify which condition comes first whether the restructuring effecting total reorganization of the electric power industry making NPC financially viable or the privatization of NPC assets where manpower reduction or sweeping/lay-off or termination of career civil service employees follows the disposal of NPC assets. This is a clear case of violation of the EQUAL PROTECTION CLAUSE, therefore, unconstitutional;

            8. Striking down Rule 33 of the Implementing Rules [and] Regulations (IRR) for disregarding the constitutional and statutory injunction on arbitrary removal of career civil service employees; and

            9.  For such other reliefs deemed equitable with justice and fairness to more than EIGHT THOUSAND (8,000) EMPLOYEES of the National Power Corporation (NPC) whose fate lies in the sound disposition of the Honorable Supreme Court.^[9][9]

In addition, petitioner also filed a supplemental petition for mandamus praying for his reinstatement.       

          The petition is without merit.

          Before anything else, this Court shall first tackle whether it was proper for petitioner to directly question the constitutionality of the EPIRA before this Court. 

          Section 5(1) and (2), Article VIII of the 1987 Constitutionprovides that:

SECTION 5. The Supreme Court shall have the following powers:

1. Exercise original jurisdiction over cases affecting ambassadors, other public ministers and consuls, and over petitions for certiorari, prohibition, mandamus, quo warranto, and habeas corpus.

2. Review, revise, reverse, modify, or affirm on appeal or certiorari, as the law or the rules of court may provide, final judgments and orders of lower courts in:

(a)                All cases in which the constitutionality or validity of any treaty, international or executive agreement, law, presidential decree, proclamation, order, instruction, ordinance, or regulation is in question.^[10][10]

          Based on the foregoing, this Court’s jurisdiction to issue writs of certiorari, prohibition, mandamus, quo warranto, and habeas corpus, while concurrent with that of the Regional Trial Courts and the Court of Appeals, does not give litigants unrestrained freedom of choice of forum from which to seek such relief.^[11][11] The determination of whether the assailed law and its implementing rules and regulations contravene the Constitution is within the jurisdiction of regular courts. The Constitution vests the power of judicial review or the power to declare a law, treaty, international or executive agreement, presidential decree, order, instruction, ordinance, or regulation in the courts, including the Regional Trial Courts.^[12][12]

          It has long been established that this Court will not entertain direct resort to it unless the redress desired cannot be obtained in the appropriate courts, or where exceptional and compelling circumstances justify availment of a remedy within and call for the exercise of our primary jurisdiction.^[13][13] Thus, herein petition should already be dismissed at the outset; however, since similar petitions have already been resolved by this Court tackling the validity of NPB Resolutions No. 2002-124 and No. 2002-125, as well as the constitutionality of certain provisions of the EPIRA, this Court shall disregard the procedural defect.

Validity of NPB Resolutions No. 2002-124 and No. 2002-125

          The main issue raised by petitioner deals with the validity of NPB Resolutions No. 2002-124 and No. 2002-125.

          In NPC Drivers and Mechanics Association (NPC DAMA) v. National Power Corporation (NPC),^[14][14] this Court had already ruled that NPB Resolutions No. 2002-124 and No. 2002-125 are void and of no legal effect.

          NPC Drivers involved a special civil action for Injunction seeking to enjoin the implementation of the same assailed NPB Resolutions.  Petitioners therein put in issue the fact that the NPB Resolutions were not concluded by a duly constituted Board of Directors since no quorum in accordance with Section 48 of the EPIRA existed.  In addition, petitioners therein argued that the assailed NPB Resolutions cannot be given legal effect as it failed to comply with Section 47 of the EPIRA which required the endorsement of the Joint Congressional Power Commission and the President of thePhilippines. Ruling in favor of petitioners therein, this Court ruled that NPB Resolutions No. 2002-124 and No. 2002-125 are void and of no legal effect for failure to comply with Section 48 of the EPIRA, to wit:

                   We agree with petitioners. In enumerating under Section 48 those who shall compose the National Power Board of Directors, the legislature has vested upon these persons the power to exercise their judgment and discretion in running the affairs of the NPC. Discretion may be defined as “the act or the liberty to decide according to the principles of justice and one’s ideas of what is right and proper under the circumstances, without willfulness or favor. Discretion, when applied to public functionaries, means a power or right conferred upon them by law of acting officially in certain circumstances, according to the dictates of their own judgment and conscience, uncontrolled by the judgment or conscience of others. It is to be presumed that in naming the respective department heads as members of the board of directors, the legislature chose these secretaries of the various executive departments on the basis of their personal qualifications and acumen which made them eligible to occupy their present positions as department heads. Thus, the department secretaries cannot delegate their duties as members of the NPB, much less their power to vote and approve board resolutions, because it is their personal judgment that must be exercised in the fulfilment of such responsibility.

                        x x x x

                        In the case at bar, it is not difficult to comprehend that in approving NPB Resolutions No. 2002-124 and No. 2002-125, it is the representatives of the secretaries of the different executive departments and not the secretaries themselves who exercised judgment in passing the assailed Resolution, as shown by the fact that it is the signatures of the respective representatives that are affixed to the questioned Resolutions. This, to our mind, violates the duty imposed upon the specifically enumerated department heads to employ their own sound discretion in exercising the corporate powers of the NPC. Evidently, the votes cast by these mere representatives in favor of the adoption of the said Resolutions must not be considered in determining whether or not the necessary number of votes was garnered in order that the assailed Resolutions may be validly enacted. Hence, there being only three valid votes cast out of the nine board members, namely those of DOE Secretary Vincent S. Perez, Jr.; Department of Budget and Management Secretary Emilia T. Boncodin; and NPC OIC-President Rolando S. Quilala, NPB Resolutions No. 2002-124 and No. 2002-125 are void and are of no legal effect.^[15][15]

           However, a supervening event occurred in NPC Drivers when it was brought to this Court’s attention that NPB Resolution No. 2007-55 was promulgated onSeptember 14, 2007 confirming and adopting the principles and guidelines enunciated in NPB Resolutions No. 2002-124 and No. 2002-125. 

          On December 2, 2009, this Court promulgated a Resolution^[16][16] clarifying the amount due the individual employees of NPC in view of NPB Resolution No. 2007-55.  In said Resolution, this Court clarified the exact date of the legal termination of each class of NPC employees, thus:

            From all these, it is clear that our ruling, pursuant to NPB Resolution No. 2002-124, covers all employees of the NPC and not only the 16 employees as contended by the NPC. However, as regards their right to reinstatement, or separation pay in lieu of reinstatement, pursuant to a validly approved Separation Program, plus backwages, wage adjustments, and other benefits, the same shall be computed from the date of legal termination as stated in NPC Circular No. 2003-09, to wit:

a) The legal termination of key officials, i.e., the Corporate Secretary, Vice-Presidents and Senior Vice-Presidents who were appointed under NP Board Resolution No. 2003-12, shall be at the close of office hours of January 31, 2003.

b) The legal termination of personnel who availed of the early leavers’ scheme shall be on the last day of service in NPC but not beyond January 15, 2003.
            c) The legal termination of personnel who were no longer employed in NPC after June 26, 2001 shall be the date of actual separation in NPC.
            d) For all other NPC personnel, their legal termination shall be at the close of office hours/shift schedule of February 28, 2003.^[17][17]

          As to the validity of NPB Resolution No. 2007-55, this Court ruled that the same will have a prospective effect, to wit:

                   What then is the effect of the approval of NPB Resolution No. 2007-55 on 14 September 2007? The approval of NPB Resolution No. 2007-55, supposedly by a majority of the National Power Board as designated by law, that adopted, confirmed and approved the contents of NPB Resolutions No. 2002-124 and No. 2002-125 will have a prospective effect, not a retroactive effect. The approval of NPB Resolution No. 2007-55 cannot ratify and validate NPB Resolutions No. 2002-124 and No. 2002-125 as to make the termination of the services of all NPC personnel/employees on31 January 2003 valid, because said resolutions were void.
                        The approval of NPB Resolution No. 2007-55 on 14 September 2007 means that the services of all NPC employees have been legally terminated on this date. All separation pay and other benefits to be received by said employees will be deemed cut on this date. The computation thereof shall, therefore, be from the date of their illegal termination pursuant to NPB Resolutions No. 2002-124 and No. 2002-125 as clarified by NPB Resolution No. 2003-11 and NPC Resolution No. 2003-09 up to 14 September 2007. Although the validity of NPB Resolution No. 2007-55 has not yet been passed upon by the Court, same has to be given effect because NPB Resolution No. 2007-55 enjoys the presumption of regularity of official acts. The presumption of regularity of official acts may be rebutted by affirmative evidence of irregularity or failure to perform a duty. Thus, until and unless there is clear and convincing evidence that rebuts this presumption, we have no option but to rule that said resolution is valid and effective as of 14 September 2007.^[18][18]

          Based on the foregoing, this Court concluded that the computation of the amounts due the employees who were terminated and/or separated as a result of, or pursuant to, the nullified NPB Board Resolutions No. 2002-124 and No. 2002-125 shall be from their date of illegal termination up to September 14, 2007 when NPB Resolution No. 2007-55 was issued.

          Thus, the resolution of the validity of NPB Board Resolutions No. 2002-124 and No. 2002-125 is, therefore, moot and academic in view of the Court’s pronouncements in NPC Drivers.

          Anent the question of the constitutionality of Section 63 of RA 9136, as well as Rule 33 of the IRR, this Court finds that the same is without merit.

          A reorganization involves the reduction of personnel, consolidation of offices, or abolition thereof by reason of economy or redundancy of functions.^[19][19] It could result in the loss of one’s position through removal or abolition of an office. However, for a reorganization for the purpose of economy or to make the bureaucracy more efficient to be valid, it must pass the test of good faith; otherwise, it is void ab initio.^[20][20]

          It is undisputed that NPC was in financial distress and the solution found by Congress was to pursue a policy towards its privatization. The privatization of NPC necessarily demanded the restructuring of its operations.  To carry out the purpose, there was a need to terminate employees and re-hire some depending on the manpower requirements of the privatized companies. The privatization and restructuring of the NPC was, therefore, done in good faith as its primary purpose was for economy and to make the bureaucracy more efficient.

          In Freedom from Debt Coalition v. Energy Regulatory Commission,^[21][21] this Court discussed why there was a need for a shift towards the privatization and restructuring of the electric power industry, to wit:

          One of the landmark pieces of legislation enacted by Congress in recent years is the EPIRA. It established a new policy, legal structure and regulatory framework for the electric power industry.

            The new thrust is to tap private capital for the expansion and improvement of the industry as the large government debt and the highly capital-intensive character of the industry itself have long been acknowledged as the critical constraints to the program. To attract private investment, largely foreign, the jaded structure of the industry had to be addressed. While the generation and transmission sectors were centralized and monopolistic, the distribution side was fragmented with over 130 utilities, mostly small and uneconomic. The pervasive flaws have caused a low utilization of existing generation capacity; extremely high and uncompetitive power rates; poor quality of service to consumers; dismal to forgettable performance of the government power sector; high system losses; and an inability to develop a clear strategy for overcoming these shortcomings.

            Thus, the EPIRA provides a framework for the restructuring of the industry, including the privatization of the assets of the National Power Corporation (NPC), the transition to a competitive structure, and the delineation of the roles of various government agencies and the private entities. The law ordains the division of the industry into four (4) distinct sectors, namely: generation, transmission, distribution and supply. Corollarily, the NPC generating plants have to be privatized and its transmission business spun off and privatized thereafter.^[22][22]

          Petitioner argues that bad faith is clearly manifested as the reorganization has an eye to replace current favorite less competent appointees. In addition, petitioner contends that qualifications and behavioral aspect were being set aside.^[23][23]

          Section 2 of R.A. No. 6656^[24][24] cites certain circumstances showing bad faith in the removal of employees as a result of any reorganization, thus:

Sec. 2. No officer or employee in the career service shall be removed except for a valid cause and after due notice and hearing. A valid cause for removal exist when, pursuant to a bona fide reorganization, a position has been abolished or rendered redundant or there is a need to merge, divide, or consolidate positions in order to meet the exigencies of the service, or other lawful causes allowed by the Civil Service Law. The existence of any or some of the following circumstances may be considered as evidence of bad faithin the removals made as a result of the reorganization, giving rise to a claim for reinstatement or reappointment by an aggrieved party:

a) Where there is a significant increase in the number of positions in the new staffing pattern of the department or agency concerned;

b) Where an office is abolished and another performing substantially the same functions is created;           

c) Where incumbents are replaced by those less qualified in terms of status of appointment, performance and merit;

d) Where there is a reclassification of offices in the department or agency concerned and the reclassified offices perform substantially the same functions as the original offices; and

e) Where the removal violates the order of separation provided in Section 3 hereof.

          The Solicitor General, however, argues that petitioner has not shown any circumstance to prove that the restructuring of NPC was done in bad faith.  We agree.

          Petitioner’s allegation that the reorganization was merely undertaken to accommodate new appointees is at most speculative and bereft of any evidence on record. It is settled that bad faith must be duly proved and not merely presumed.  It must be proved by clear and convincing evidence,^[25][25] which is absent in the case at bar. 

          In addition, petitioner has no legal or vested right to be reinstated as Section 63 of the EPIRA as well as Section 5, Rule 33 of the IRR clearly state that the displaced or separated personnel as a result of the privatization, if qualified, shall be given preference in the hiring of the manpower requirements of the privatized companies. Clearly, the law only speaks of preference and by no stretch of the imagination can the same amount to a legal right to the position. Undoubtedly, not all the terminated employees will be re-hired by the selection committee as the manpower requirement of the privatized companies will be different.  As correctly observed by the Solicitor General, the selection of employees for purposes of re-hiring them necessarily entails the exercise of discretion or judgment.^[26][26] Such being the case, petitioner, cannot, by way of mandamus, compel the selection committee to include him in the re-hired employees, more so, since there is no evidence showing that said committee acted with grave abuse of discretion or that the re-hired employees were merely accommodated and not qualified.

Validity of Sections 11, 48, and 52 of RA 9136

          Petitioner argues that Sections 11,^[27][27] 48,^[28][28] and 52^[29][29] of the EPIRA are unconstitutional for violating Section 13, Article VII of the 1987 Constitution.

          Section 13, Article VII of the 1987 Constitution provides:

            Sec. 13. The President, Vice-President, the Members of the Cabinet, and their deputies or assistants shall not, unless otherwise provided in this Constitution, hold any other office or employment during their tenure. They shall not, during said tenure, directly or indirectly practice any other profession, participate in any business, or be financially interested in any contract with, or in any franchise, or special privilege granted by the Government or any subdivision, agency, or instrumentality thereof, including government-owned or controlled corporations or their subsidiaries. They shall strictly avoid conflict of interest in the conduct of their office.

               x x x x.^[30][30]

          In Civil Liberties Union v. Executive Secretary,^[31][31] this Court explained that the prohibition contained in Section 13, Article VII of the 1987 Constitution does not apply to posts occupied by the Executive officials specified therein without additional compensation in an ex-officio capacity as provided by law and as required by the primary function of said official’s office, to wit:

                   The prohibition against holding dual or multiple offices or employment under Section 13, Article VII of the Constitution must not, however, be construed as applying to posts occupied by the Executive officials specified therein without additional compensation in an ex-officio capacity as provided by law and as required  by the primary functions of said officials’ office. The reason is that these posts do not comprise “any other office” within the contemplation of the constitutional prohibition but are properly an imposition of additional duties and functions on said officials.  To characterize these posts otherwise would lead to absurd consequences, among which are: The President of thePhilippines cannot chair the National Security Council reorganized under Executive Order No. 115 (December 24, 1986). Neither can the Vice-President, the Executive Secretary, and the Secretaries of National Defence, Justice, Labor and Employment and Local Government sit in this Council, which would then have no reason to exist for lack of a chairperson and members. The respective undersecretaries and assistant secretaries, would also be prohibited.

                        x x x x

                        The term “primary” used to describe “functions” refers to the order of importance and thus means chief or principal function. The term is not restricted to the singular but may refer to the plural. The additional duties must not only be closely related to, but must be required by the official’s primary functions. Examples of designations to positions by virtue of one’s primary functions are the Secretaries of Finance and Budget, sitting as members of the Monetary Board, and the Secretary of Transportation and Communications, acting as Chairman of the Maritime Industry Authority and the Civil Aeronautics Board.^[32][32]

          The designation of the members of the Cabinet to form the NPB does not violate the prohibition contained in our Constitution as the privatization and restructuring of the electric power industry involves the close coordination and policy determination of various government agencies. Section 2 of the EPIRA clearly shows that the policy toward privatization would involve financial, budgetary and environmental concerns as well as coordination with local government units, to wit: 

SECTION 2. Declaration of Policy. – It is hereby declared the policy of the State:

(a) To ensure and accelerate the total electrification of the country;

(b) To ensure the quality, reliability, security and affordability of the supply of electric power;

(c) To ensure transparent and reasonable prices of electricity in a regime of free and fair competition and full public accountability to achieve greater operational and economic efficiency and enhance the competitiveness of Philippine products in the global market;

(d) To enhance the inflow of private capital and broaden the ownership base of the power generation, transmission and distribution sectors;

(e) To ensure fair and non-discriminatory treatment of public and private sector entities

in the process of restructuring the electric power industry;

(f) To protect the public interest as it is affected by the rates and services of electric utilities and other providers of electric power;

(g) To assure socially and environmentally compatible energy sources and infrastructure;

(h) To promote the utilization of indigenous and new and renewable energy resources in power generation in order to reduce dependence on imported energy;

(i) To provide for an orderly and transparent privatization of the assets and liabilities of the National Power Corporation (NPC);

(j) To establish a strong and purely independent regulatory body and system to ensure consumer protection and enhance the competitive operation of the electricity market; and

(k) To encourage the efficient use of energy and other modalities of demand side management.

          As can be gleaned from the foregoing enumeration, the restructuring of the electric power industry inherently involves the participation of various government agencies. In Civil Liberties, this Court explained that mandating additional duties and functions to Cabinet members which are not inconsistent with those already prescribed by their offices or appointments by virtue of their special knowledge, expertise and skill in their respective executive offices, is a practice long-recognized in many jurisdictions. It is a practice justified by the demands of efficiency, policy direction, continuity and coordination among the different offices in the Executive Branch in the discharge of its multifarious tasks of executing and implementing laws affecting national interest and general welfare and delivering basic services to the people.^[33][33]

          The production and supply of energy is undoubtedly one of national interest and is a basic commodity expected by the people. This Court, therefore, finds the designation of the respective members of the Cabinet, as ex-officio members of the NPB, valid. 

          This Court is not unmindful, however, that Section 48 of the EPIRA is not categorical in proclaiming that the concerned Cabinet secretaries compose the NPB Board only in an ex-officio capacity.  It is only in Section 52 creating the Power Sector Assets and Liabilities Management Corporation (PSALM) that they are so designated in an ex-officio capacity.  Sections 4 and 6 of the EPIRA provides:

Section 4. TRANSCO Board of Directors.

            All the powers of the TRANSCO shall be vested in and exercised by a Board of Directors. The Board shall be composed of a Chairman and six (6) members. The Secretary of the DOF shall be the ex-officio Chairman of the Board. The other members of the TRANSCO Board shall include the Secretary of the DOE, the Secretary of the DENR, the President of TRANSCO, and three (3) members to be appointed by the President of thePhilippines, each representing Luzon, Visayas andMindanao, one of whom shall be the President of PSALM.

            x x x x.

Section 6. PSALM Board of Directors.

            PSALM shall be administered, and its powers and functions exercised, by a Board of Directors which shall be composed of the Secretary of the DOF as the Chairman, and the Secretary of the DOE, the Secretary of the DBM, the Director-General of the NEDA, the Secretary of the DOJ, the Secretary of the DTI and the President of the PSALM as ex-officio members thereof.

Nonetheless, this Court agrees with the contention of the Solicitor General that the constitutional prohibition was not violated, considering that the concerned Cabinet secretaries were merely imposed additional duties and their posts in the NPB do not constitute “any other office” within the contemplation of the constitutional prohibition.

          The delegation of the said official to the respective Board of Directors were designation by Congress of additional functions and duties to the officials concerned, i.e., they were designated as members of the Board of Directors.  Designation connotes an imposition of additional duties, usually by law, upon a person already in the public service by virtue of an earlier appointment.^[34][34]  Designation does not entail payment of additional benefits or grant upon the person so designated the right to claim the salary attached to the position. Without an appointment, a designation does not entitle the officer to receive the salary of the position. The legal basis of an employee’s right to claim the salary attached thereto is a duly issued and approved appointment to the position, and not a mere designation.^[35][35]

Hence, Congress specifically intended that the position of member of the Board of NPB shall be ex-officio or automatically attached to the respective offices of the members composing the board.  It is clear from the wordings of the law that it was the intention of Congress that the subject posts will be adjunct to the respective offices of the official designated to such posts.

          The foregoing discussion, notwithstanding, the concerned officials should not receive any additional compensation pursuant to their designation as ruled in Civil Liberties, thus:

          The ex-officio position being actually and in legal contemplation part of the principal office, it follows that the official concerned has no right to receive additional compensation for his services in the said position. The reason is that these services are already paid for and covered by the compensation attached to his principal office. It should be obvious that if, say, the Secretary of Finance attends a meeting of the Monetary Board as an ex-officio member thereof, he is actually and in legal contemplation performing the primary function of his principal office in defining policy in monetary and banking matters, which come under the jurisdiction of his department. For such attendance, therefore, he is not entitled to collect any extra compensation, whether it be in the form of a per diem or an honorarium or an allowance, or some other such euphemism. By whatever name it is designated, such additional compensation is prohibited by the Constitution.

          In relation thereto, Section 14 of the EPIRA provides:

            SEC. 14. Board Per Diems and Allowances. – The members of the Board shall receive per diem for each regular or special meeting of the board actually attended by them and, upon approval of the Secretary of the Department of Finance, such other allowances as the Board may prescribe.

          Section 14 relates to Section 11 which sets the composition of the TRANSCO Board naming the Secretary of the Department of Finance as the ex officio Chairman of the Board. The other members of the TRANSCO Board include the Secretary of the Department of Energy and the Secretary of the Department of Environment and Natural Resources.  However, considering the constitutional prohibition, it is clear that such emoluments or additional compensation to be received by the members of the NPB do not apply and should not be received by those covered by the constitutional prohibition, i.e., the Cabinet secretaries.  It is to be noted that three of the members of the NPB are to be appointed by the President, who would be representing the interests of those in Luzon, Visayas, andMindanao, who may be entitled to such honorarium or allowance if they do not fall within the constitutional prohibition.

          Hence, the said cabinet officials cannot receive any form of additional compensation by way of per diems and allowances.  Moreover, any amount received by them in their capacity as members of the Board of Directors should be reimbursed to the government, since they are prohibited from collecting additional compensation by the Constitution.

          These interpretations are consistent with the fundamental rule of statutory construction that a statute is to be read in a manner that would breathe life into it, rather than defeat it,^[36][36]and is supported by the criteria in cases of this nature that all reasonable doubts should be resolved in favor of the constitutionality of a statute.^[37][37]

Constitutionality of Section 34^[38][38] of the EPIRA

          The Constitutionality of Section 34 of the EPIRA has already been passed upon by this Court in Gerochi v. Department of Energy,^[39][39] to wit:

          Finally, every law has in its favor the presumption of constitutionality, and to justify its nullification, there must be a clear and unequivocal breach of the Constitution and not one that is doubtful, speculative, or argumentative. Indubitably, petitioners failed to overcome this presumption in favor of the EPIRA. We find no clear violation of the Constitution which would warrant a pronouncement that Sec. 34 of the EPIRA and Rule 18 of its IRR are unconstitutional and void.^[40][40]

          In Gerochi, this Court ruled that the Universal Charge is not a tax but an exaction in the exercise of the State’s police power.  The Universal Charge is imposed to ensure the viability of the country’s electric power industry.

          Petitioner argues that the imposition of a universal charge to address the stranded debts and contract made by the government through the NCC-IPP contracts or Power Utility-IPP contracts or simply the bilateral agreements or contracts is an added burden to the electricity-consuming public on their monthly power bills. It would mean that the electricity-consuming public will suffer in carrying this burden for the errors committed by those in power who runs the affairs of the State. This is an exorbitant display of State Power at the expense of its people.^[41][41]

          It is basic that the determination of whether or not a tax is excessive oppressive or confiscatory is an issue which essentially involves a question of fact and, thus, this Court is precluded from reviewing the same.

Validity of Section 38^[42][42] of the EPIRA

          Petitioner argues that the abolishment of the ERB and its replacement of a very powerful quasi-judicial body named the Energy Regulatory Commission (ERC), pursuant to Section 38 up to Section 43 of the EPIRA or RA 9136, which is tasked to dictate the day-to-day affairs of the entire electric power industry, seems a prelude to Charter Change. Petitioner submits that under the 1987 Constitution, there are only three constitutionally-recognized Commissions, they are: the Civil Service Commission (CSC), the Commission on Audit (COA) and the Commission on Elections (COMELEC).^[43][43]

          Petitioner’s argument that the creation of the ERC seems to be a prelude to charter change is flimsy and finds no support in law.  This Court cannot subscribe to petitioner’s thesis that “in order for the newly-enacted RA 9136 or EPIRA to become a valid law, we should have to call first a referendum to amend or totally change the People’s Charter.”^[44][44]

          In any case, the constitutionality of the abolition of the ERB and the creation of the ERC has already been settled in Kapisanan ng mga Kawani ng Energy Regulatory Board v. Commissioner Fe Barin,^[45][45] to wit:

            All laws enjoy the presumption of constitutionality. To justify the nullification of a law, there must be a clear and unequivocal breach of the Constitution. KERB failed to show any breach of the Constitution.

            A public office is created by the Constitution or by law or by an officer or tribunal to which the power to create the office has been delegated by the legislature. The power to create an office carries with it the power to abolish. President Corazon C. Aquino, then exercising her legislative powers, created the ERB by issuing Executive Order No. 172 on8 May 1987.

            The question of whether a law abolishes an office is a question of legislative intent. There should not be any controversy if there is an explicit declaration of abolition in the law itself. Section 38 of RA 9136 explicitly abolished the ERB. x x x^[46][46]

Moreover, in Kapisanan, this Court ruled that because of the expansion of the ERC’s functions and concerns, there was a valid abolition of the ERB.^[47][47]

Validity of Section 63^[48][48]

          Contrary to petitioner’s argument, Section 63 of the EPIRA and Section 33 of the IRR of the EPIRA did not impair the vested rights of NPC personnel to claim benefits under existing laws.  Neither does the EPIRA cut short the years of service of the employees concerned.  If an employee availed of the separation pay and other benefits in accordance with existing laws or the superior separation pay under the NPC restructuring plan, it is but logical that those who availed of such privilege will start their government service anew if they will later be employed by any government-owned successor company or government instrumentality. 

It is to be noted that this Court ruled in the case of Herrera v. National Power Corporation,^[49][49] that Section 63 of the EPIRA precluded the receipt by the terminated employee of both separation and retirement benefits under the Government Service Insurance System (GSIS) organic law, or Commonwealth Act (C.A.) No. 186.^[50][50]

          However,  it  must  be  clarified  that this  Court’s  pronouncements  in

Herrera that separated and retired employees of the NPC “are not entitled to receive retirement benefits under C.A. No. 186,” referred only to the gratuity benefits granted by R.A. No. 1616,^[51][51] which was to be paid by NPC as the last employer.  It did not proscribe the payment of retirement benefits to qualified retirees under R.A. No. 660,^[52][52] Presidential Decree (P.D.) No. 1146,^[53][53] R.A. No. 8291,^[54][54] and other GSIS and social security laws.

The factual and procedural antecedents of Herrera reveal that it arose from a case between NPC and several of its separated employees who were asking additional benefits from NPC under R.A. No. 1616 after receiving from the former separation benefits under Section 63 of R.A. No. 9136.

Unable to resolve the issue with its former employees amicably, NPC filed a petition for declaratory relief, docketed as Civil Case SCA No. Q-03-50681,^[55][55] before the Regional Trial Court of Quezon City, raising the issue of whether or not the employees of NPC are entitled to receive retirement benefits under R.A. No. 1616 over and above the separation benefits granted by R.A. No. 9136.^[56][56]

Under R.A. No. 1616, a gratuity benefit is given to qualified retiring members of the GSIS, which is payable by the last employer.  In addition to said gratuity benefits, the qualified employee shall also be entitled to a refund of retirement premiums paid, consisting of personal contributions of the employee plus interest, and government share without interest, payable by the GSIS.  It effectively amended Section 12 (c) of C.A. No. 186, as follows:

(c) Retirement is likewise allowed to any official or employee, appointive or elective, regardless of age and employment status, who has rendered a total of at least twenty years of service, the last three years of which are continuous. The benefit shall, in addition to the return of his personal contributions with interest compounded monthly and the payment of the corresponding employer’s premiums described in subsection (a) of Section five hereof, without interest, be only a gratuity equivalent to one month’s salary for every year of the first twenty years of service, plus one and one-half months’ salary for every year of service over twenty but below thirty years and two months’ salary for every year of service over thirty years in case of employees based on the highest rate received and in case of elected officials on the rates of pay as provided by law. This gratuity is payable on the rates of pay as provided by law. This gratuity is payable by the employer or officer concerned which is hereby authorized to provide the necessary appropriation or pay the same from any unexpended items of appropriations or savings in its appropriations. Officials and employees retired under this Act shall be entitled to the commutation of the unused vacation and sick leave, based on the highest rate received, which they may have to their credit at the time of retirement. x x x^[57][57] (Emphasis supplied.)

After trial, the RTC rendered a Decision ruling against the NPC employees, the decretal portion of which reads:

WHEREFORE, premises considered, Republic Act No. 9136 DID NOT SPECIFICALLY AUTHORIZE the National Power Corporation to grant retirement benefits under Republic Act No. 1616 in addition to separation pay under Republic Act No. 9136.

SO ORDERED.^[58][58]

Petitioners therein then sought recourse directly to this Court on a pure question of law.  In the preparatory statement of the Petition for Review on Certiorari,^[59][59] it is apparent that the case was limited only to the interpretation of Section 63 of R.A. No. 9136, in relation to R.A. No. 1616, on the matter of retirement benefits, to wit:

          This is a case of first impression limited to the interpretation of Section 63, R.A. 9136 (EPIRA), granting separation pay to terminated NAPOCOR employees, in relation to R.A. 1616, on the matter of retirement benefits.  Respondents NAPOCOR and DEPARTMENT OF BUDGET AND MANAGEMENT erroneously contend that the entitlement to the separation pay under R.A. 9136 forfeits the retirement benefit under R.A. 1616.  Petitioners most respectfully submit that since R.A. 9136 and R.A. 1616 are not inconsistent with each other and they have distinct noble purposes, entitlement to separation pay will not disqualify the separated employee who is qualified to retire from receiving retirement benefits allowed under another law. x x x^[60][60]

However, in the Decision dated December 18, 2009, it was held that petitioners therein were not only entitled to receive retirement benefits under R.A. No. 1616 but also were “not entitled to receive retirement benefits under Commonwealth Act No. 186, as amended,” which, in effect, might lead to the conclusion that the declaration encompassed all other benefits granted by C.A. No. 186 to its qualified members.

In relation to R.A. No. 1616, Herrera should have affected only the payment of gratuity benefits by NPC, being the last employer, to its separated employees.  It was even categorically stated that petitioners therein were “entitled to a refund of their contributions to the retirement fund, and the monetary value of any accumulated vacation and sick leaves,”^[61][61] which is clearly congruous to the mandate of R.A. No. 1616. The matter of availment of retirement benefits of qualified employees under any other law to be paid by the GSIS should not and was not covered by the decision.  In the first place, it was never an issue.

In the case of Santos v. Servier Philippines, Inc.,^[62][62] citing Aquino v. National Labor Relations Commission,^[63][63] We declared that the receipt of retirement benefits does not bar the retiree from receiving separation pay.  Separation pay is a statutory right designed to provide the employee with the wherewithal during the period that he/she is looking for another employment.  On the other hand, retirement benefits are intended to help the employee enjoy the remaining years of his life, lessening the burden of worrying about his financial support, and are a form of reward for his loyalty and service to the employer.  A separation pay is given during one’s employable years, while retirement benefits are given during one’s unemployable years.  Hence, they are not mutually exclusive.^[64][64]

Even in the deliberations of Congress during the passage of R.A. No. 9136, it was manifest that it was not the intention of the law to infringe upon the vested rights of NPC personnel to claim benefits under existing laws.  To assure the worried and uneasy NPC employees, Congress guaranteed their entitlement to a separation pay to tide them over in the meantime.^[65][65]  More importantly, to further allay the fears of the NPC employees, especially those who were nearing retirement age, Congress repeatedly assured them in several public and congressional hearings that on top of their separation benefits, they would still receive their retirement benefits, as long as they would qualify and meet the requirements for its entitlement.

The transcripts of the Public Consultative Meeting on the Power Bill held onFebruary 16, 2001, disclose the following:

x x x x

THE CHAIRMAN (SEN. J. OSMENA).  Well, the other labor representation here is Mr. Anguluan.

MR. ANGULUAN: Yes, Your Honor.

THE CHAIRMAN (SEN. J. OSMENA). Okay. Will you present your paper?

MR. ANGULUAN:  We have prepared a paper which we have sent to the honorable members of the Bicam. x x x.

THE CHAIRMAN (SEN. J. OSMENA).  I don’t think anyone is going to deprive you of your rights under the law.  You will enjoy all your rights. You will receive retirement benefits, separation pay, and all of the rights that are provided to you by law. What we have objected to in the Senate is retirement benefits higher than what everybody else gets, like 150 percent or subject to the approval of the board which means sky is the limit. So, we have objected to that.  But what you are entitled to under the law, you will get under the law and nobody will deprive you of that.^[66][66]

A year later, onFebruary 12, 2002, the Joint Congressional Power Commission was held.  The transcripts of the hearing bare the following:

x x x x

THE CHAIRMAN (REP. BADELLES).  They will still be subject to the same conditions. Meaning, NPC has the discretion whether to reabsorb or hire back those that avail of the separation benefits.

SEN. OSMENA (J). No. But they are not being – – the plants are not being sold, so they are – but what we are giving them is a special concession of retiring early.

No, okay. You consider . . .

THE CHAIRMAN (REP. BADELLES).  We are not speaking of retirement here, we are speaking of their separation benefits . . .

SEN. OSMENA (J). Okay, separation benefits.

THE CHAIRMAN (REP. BADELLES). Precisely, if they are considered terminated.

SEN. OSMENA (J). All right. Separation . . .

THE CHAIRMAN (REP. BADELLES). A retirement plan is a different program than separation.

SEN. OSMENA (J). Separation benefits, okay.

THE CHAIRMAN (REP. BADELLES). All right.^[67][67]

Thus, it is clear that a separation pay at the time of the reorganization of the NPC and retirement benefits at the appropriate future time are two separate and distinct entitlements.  Stated otherwise, a retirement plan is a different program from a separation package.

There is a whale of a difference between R.A. No. 1616 and C.A. No. 186, together with its amendatory laws.  They have different legal bases, different sources of funds and different intents.

In R.A. No. 1616, which is the subject issue in Herrera, the retirees are entitled to gratuity benefits to be paid by the last employer and refund of premiums to be paid by the GSIS.  On the other hand, retirement benefits under C.A. No. 186, as amended by R.A. No. 8291, are to be paid by the GSIS.  Stated otherwise, under R.A. No. 1616, what would be paid by the last employer, NPC, would be gratuity benefits, and GSIS would merely refund the retirement premiums consisting of personal contributions of the employee plus interest, and the employer’s share without interest.  Under C.A. No. 186, as amended, it is the GSIS who would pay the qualified employees their retirement benefits.

Indeed, with several  amendments to C.A. No. 186,^[68][68]  the Court finds it necessary to clarify Herrera and categorically declare that it affected only those  seeking  benefits  under  R.A. No. 1616.^[69][69]   It could not have meant to affect those  employees  who retired, and who will retire, under the different amendatory  laws  of  C.A. No. 186  like R.A. No. 660,^[70][70] P.D. No. 1146^[71][71] and R.A. No. 8291.^[72][72]

At any rate, entitlement of qualified employees to receive separation pay and retirement benefits is not proscribed by the 1987 Constitution. Section 8 of Article IX (B) of the 1987 Constitution reads:

SEC. 8. No elective or appointive public officer or employee shall receive additional, double or indirect compensation, unless specifically authorized by law, nor accept without the consent of the Congress, any present, emolument, office, or title of any kind from any foreign government.

Pensions or gratuities shall not be considered as additional, double, or indirect compensation.^[73][73]

Moreover, retirement benefits under C.A. No. 186 are not even considered as compensation.  Section 2 (e) of C.A. No. 186 categorically states that 

          Benefits granted by this Act by virtue of such life or retirement insurance shall not be considered as compensation or emolument.^[74][74]

Under the GSIS law, the retired employees earned their vested right under their contract of insurance after they religiously paid premiums to GSIS. Under the contract, GSIS is bound to pay the retirement benefits as it received the premiums from the employees and NPC.

In Marasigan v. Cruz,^[75][75] this Court ratiocinated that:

A retirement law such as C.A. 186 and amendatory laws is in the nature of a contract between the government and its employees.  When an employee joins the government service, he has a right to expect that after rendering the required length of service and fulfilled the conditions stated in the laws on retirement, he would be able to enjoy the benefits provided in said laws.  He regularly pays the dues prescribed therefore.  It would be cruel to deny him the benefits he had been expecting at the end of his service by imposing conditions for his retirement, which are not found in the law.  It is believed to be a legal duty as well as a moral obligation on the part of the government to honor its commitments to its employees when as in this case, they have met all the conditions prescribed by law and are therefore entitled to receive their retirement benefits.^[76][76]

Thus, where the employee retires and meets the eligibility requirements, he acquires a vested right to benefits that is protected by the due process clause. Retirees enjoy a protected property interest whenever they acquire a right to immediate payment under pre-existing law.  Thus, a pensioner acquires a vested right to benefits that have become due as provided under the terms of the public employees’ pension statute.  No law can deprive such person of his pension rights without due process of law, that is, without notice and opportunity to be heard.^[77][77]  Verily, when an employee has complied with the statutory requirements to be entitled to receive his retirement benefits, his right to retire and receive what is due him by virtue thereof becomes vested and may not thereafter be revoked or impaired.

Moreover, Section 63 of the EPIRA law, if misinterpreted as proscribing payment of retirement benefits under the GSIS law, would be unconstitutional as it would be violative of Section 10, Article III of the 1987 Constitution^[78][78] or the provision on non-impairment of contracts.

In view of the fact that separation pay and retirement benefits are different entitlements, as they have different legal bases, different sources of funds, and different intents, the “exclusiveness of benefits” rule provided under R.A. No. 8291 is not applicable.  Section 55 of R.A. No. 8291 states: “Whenever other laws provide similar benefits for the same contingencies covered by this Act, the member who qualifies to the benefits shall have the option to choose which benefits will be paid to him.”

Accordingly, the Court declares that separated, displaced, retiring, and retired employees of NPC are legally entitled to the retirement benefits pursuant to the intent of Congress and as guaranteed by the GSIS laws.  Thus, the Court reiterates:

1] that the dispositive portion in Herrera holding that separated and retired employees “are not entitled to receive retirement benefits under Commonwealth Act No. 186,” referred only to the gratuity benefits under R.A. No. 1616, which was to be paid by NPC, being the last employer;

2] that it did not proscribe the payment of the retirement benefits to qualified retirees under R.A. No. 660, P.D. No. 1146, R.A. No. 8291, and other GSIS and social security laws; and

3] that separated, rehired, retiring, and retired employees should receive, and continue to receive, the retirement benefits to which they are legally entitled.

Petition for Mandamus

          As for petitioner’s prayer that he be reinstated, suffice it to state that the issue has been rendered moot by the Decision and Resolutions of this Court in the case of NPC Drivers and Mechanics Association (NPC DAMA) v. National Power Corporation (NPC)^[79][79] and by the above disquisitions.

In Conclusion

          While we commend petitioner’s attempt to argue against the privatization of the NPC, it is not the proper subject of herein petition. Petitioner belabored on alleging facts to prove his point which, however, go into policy decisions which this Court must not delve into less we violate separation of powers. The wisdom of the privatization of the NPC cannot be looked into by this Court as it would certainly violate this guarded principle. The wisdom and propriety of legislation is not for this Court to pass upon.^[80][80] Every law has in its favor the presumption of constitutionality, and to justify its nullification, there must be a clear and unequivocal breach of the Constitution, and not one that is doubtful, speculative or argumentative.^[81][81]  

As in National Power Corporation Employees Consolidated Union (NECU) v. National Power Corporation (NPC),^[82][82] this Court held:

          Whether the State’s policy of privatizing the electric power industry is wise, just, or expedient is not for this Court to decide. The formulation of State policy is a legislative concern. Hence, the primary judge of the necessity, adequacy, wisdom, reasonableness and expediency of any law is primarily the function of the legislature.^[83][83]

          WHEREFORE, premises considered and subject to the above disquisitions, the Petition for Certiorari and the Supplemental Petition for Mandamus are Dismissed for lack of merit.

          SO ORDERED.

                                                DIOSDADO M. PERALTA

                                                Associate Justice

WE CONCUR:

RENATO C. CORONA

         Chief Justice

          ANTONIO T. CARPIO                         PRESBITERO J. VELASCO, JR.

                 Associate Justice                                     Associate Justice

          TERESITA J. LEONARDO-DE CASTRO           ARTURO D. BRION

                            Associate Justice                                       Associate Justice

                    LUCAS P. BERSAMIN                            MARIANO C. DEL CASTILLO

                            Associate Justice                                       Associate Justice

                   ROBERTO A. ABAD                       MARTIN S. VILLARAMA, JR.

                         Associate Justice                                          Associate Justice

              JOSE PORTUGAL PEREZ                    JOSE CATRAL MENDOZA

                         Associate Justice                                        Associate Justice

MARIA LOURDES P. A. SERENO             BIENVENIDO L. REYES

                        Associate Justice                                      Associate Justice

ESTELA M. PERLAS-BERNABE

Associate Justice

CERTIFICATION

          Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court.

                                                                   RENATO C. CORONA

                                                                  Chief Justice