G.R. No. 193978

G.R. No. 193978 ― JELBERT B. GALICTO versus H.E. PRESIDENT BENIGNO SIMEON C. AQUINO III, in his capacity as President of the Republic of the Philippines; ATTY. PACQUITO N. OCHOA, JR., in his capacity as Executive Secretary; and FLORENCIO B. ABAD, in his capacity as Secretary of the Department of Budget and Management.

Promulgated:

February 28, 2012

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S E P A R A T E O P I N I O N

CORONA, C.J.:

Most GOCCs are incurring significant financial losses. Budgetary support to the total government corporate sector (including government financial institutions, social security institutions, and GOCCs providing goods and services to the public) amounted to P80.4 billion during 20002004. In addition, indirect support, in the form of guarantees on GOCC obligations, is also in the billions of pesos. In the past 5 years, there has been a noticeable increase in the aggregate deficit of the 14 monitored GOCCs[1], bringing their financial viability into question. While the 14 monitored GOCCs current and capital expenditures fluctuated around 6% of GDP, revenues have fallen from 5% to 4.1% of GDP over 20002004, increasing the deficit of the monitored GOCCs from 0.6% to 1.8% of GDP over the same period. In 2004, the monitored GOCCs consolidated deficit was P85.4 billion, a more than fourfold increase from the 2000 level of P19.2 billion. The 2004 deficit is already about the same size as the potential new revenues collected through the expanded value-added tax law. There are various reasons for the ballooning GOCC deficits, including (i) failure to adjust tariff rates, (ii) large capital requirements, and (iii) operational and management inefficiencies.[2]

Accountability in public office requires rationality and efficiency in both administrative and financial operations of all government offices, government-owned and controlled corporations (GOCCs) included. As a corollary, public funds must be utilized in a way that will promote transparency, accountability and prudence.

The nation was recently informed that GOCCs, most of which enjoyed privileges not afforded to other offices and agencies of the National Government, suffer from serious fiscal deficit. Yet, officers and employees of these GOCCs continue to receive hefty perks and excessive allowances presenting a stark disconnect and causing the further depletion of limited resources. In the face of such situation, where the President as Chief Executive makes a decisive move to stave off the financial hemorrhage and administrative inefficiency of government corporations, the Court should not invalidate the Chief Executives action without a clear showing of grave abuse of discretion on his part.

Factual Antecedents

In his first State of the Nation Address, President Benigno Simeon C. Aquino III exposed anomalies in the financial management of the Metropolitan Waterworks and Sewerage System, the National Power Corporation and the National Food Authority. These revelations prompted the Senate to conduct legislative inquiries on the matter of the activities of GOCCs. Appalled by its findings, the Senate issued Resolution No. 17, s. 2010, urging the President to order the immediate suspension of the unusually large and excessive allowances, bonuses, incentives and other perks of members of the governing boards of GOCCs and government financial institutions (GFIs). Thus, on September 8, 2010, President Benigno Simeon C. Aquino III issued Executive Order No. 7[3] (EO 7) strengthening the supervision of the compensation levels of GOCCs and GFIs by controlling the grant of excessive salaries, allowances, incentives and other benefits.[4]

EO 7 imposes a moratorium on increases in salaries, allowances, incentives and other benefits of GOCCs and GFIs, except salary adjustments pursuant to EO 8011 dated June 17, 2009 and EO 900 dated June 23, 2010.[5] It suspended the allowances, bonuses and other perks enjoyed by the boards of directors/trustees of GOCCs and GFIs until December 31, 2010, pending the issuance of new policies and guidelines on the compensation packages of GOCCs and GFIs.[6] In addition, it provides for the creation of a Task Force on Corporate Compensation (TFCC) to undertake a review of all remunerations granted to members of the board of directors, officers and rank-and-file employees, as well as discretionary funds of GOCCs and GFIs.[7] It mandates the submission of information on all personnel remuneration from all GOCCs and GFIs to the TFCC.[8] Lastly, it establishes guiding principles as well as a total compensation framework for the rationalization of the compensation and position classification system in GOCCs and GFIs.[9]

The constitutionality of EO 7 is now being challenged by petitioner Jelbert B. Galicto who brings this petition for certiorari and prohibition in his capacity as a lawyer and as an employee of the Philippine Health Insurance Corporation (PhilHealth) Regional OfficeButuan City. Essentially, he questions the authority of the President to issue EO 7. He likewise assails the constitutionality of EO 7 for allegedly violating his right to property without due process of law.

The ponencia of Justice Arturo D. Brion dismisses the petition for being replete with formal and procedural defects and for having been rendered moot by supervening events.

I agree with the ponencias thorough discussion and correct disposition. Nevertheless, I am submitting this opinion to express my thoughts on matters which I believe to be equally important considerations in the resolution of this case.

Fundamental considerations governing the exercise of the power of judicial review require the Court to exercise restraint in nullifying the act of a co-equal and coordinate branch. Here, the justiciability doctrines of standing and mootness work against petitioner.

Moreover, a careful consideration of the respective arguments of the parties compels sustaining the validity of EO 7. The President as Chief Executive has the legal authority to issue EO 7. Furthermore, petitioner failed to show that the President committed grave abuse of discretion in directing the rationalization of the compensation and position classification system in GOCCs and GFIs.

Lack of Standing and Mootness

The power of judicial review is a sword that must be unsheathed with restraint. To ensure this, certain justiciability doctrines must be complied with as a prerequisite for the Courts exercise of its awesome power to declare the act of a co-equal branch invalid for being unconstitutional. These doctrines are important as they are intertwined with the principle of separation of powers.[10] They help define the judicial role; they determine when it is appropriate for courts to review (a legal issue) and when it is necessary to defer to the other branches of government.[11]

Among the justiciability doctrines are standing and mootness. Petitioner failed to observe both.

Courts do not decide all kinds of cases dumped on their laps and do not open their doors to all parties or entities claiming a grievance.[12] Locus standi is intended to assure a vigorous adversary presentation of the case. More importantly, it warrants the judiciarys overruling the determination of a coordinate, democratically elected organ of government. It thus goes to the very essence of representative democracies.[13]

Petitioner, for himself, asserts his right to question the constitutionality of EO 7 on two grounds. First, as an employee of PhilHealth, he allegedly stands to be prejudiced by EO 7 insofar as it suspends or imposes a moratorium on the grant of salary increases and other benefits to employees and officials of GOCCs and GFIs and curtails the prerogatives of the officers responsible for the fixing and determination of his compensation. Second, as a lawyer, he claims to have an

interest in making sure that laws and orders by government officials are legally and validly issued and implemented.

Petitioner cannot sufficiently anchor his standing to bring this action on account of his employment in PhilHealth, a GOCC covered by EO 7. He cannot reasonably expect this Court to symphatize with his lament that the law impedes or threatens to impede his right to receive future increases as well as the right of members of the board of directors of Philhealth to allowances and bonuses.

The irreducible minimum condition for the exercise of judicial power is a requirement that a party show he personally has suffered some actual or threatened injury to his rights.[14] A party who assails the constitutionality of a statute or an official act must have a direct and personal interest. He must show not only that the law or any governmental act is invalid, but also that he sustained or is in immediate danger of sustaining some direct injury as a result of its enforcement, and not merely that he suffers thereby in some indefinite way. He must show that he has

been or is about to be denied some right or privilege to which he is lawfully entitled or that he is about to be subjected to some burdens or penalties by reason of the statute or act complained of.[15]

For this reason, petitioners reliance on his status as PhilHealth employee, without more, is a frail thread that fails to sustain the burden of locus standi required of anyone who may properly invoke the Courts power of judicial review.

EO 7 simply imposes a moratorium on increases in salaries, allowances and other benefits of officials and employees of GOCCs and GFIs and directs the suspension of all allowances bonuses and incentives of GOCC and GFI officials. Moratorium is defined as an authorized postponement in the performance of an obligation or a suspension of a specific activity.[16] Section 9 of EO 7 is not a permanent prohibition on petitioners perceived right to receive future increases. Nor is it an absolute ban on salary increases as it ensures that, like all other officials and employees of the government, officials and employees of GOCCs and GFIs will continue to enjoy the salary increases mandated under EO 8011 dated June 17, 2009 and EO 900 dated June 23, 2010.

While ones employment is a constitutionally-protected property right, petitioner does not claim that his employment is at risk under EO 7. Petitioner is simply concerned about his entitlement to future salary increases. However, a public officer has a vested right only to salaries already earned or accrued.[17] Salary increases are a mere expectancy.[18] They are by nature volatile and dependent on numerous variables, including the companys fiscal situation, the employees future performance on the job, or the employees continued stay in a position.[19] Thus, petitioner does not have a right to an increase in salary. There is no vested right to salary increases.[20] There must be a lawful decree or order supporting an employees claim.[21] In this case, petitioner failed to point to any lawful decree or order supporting his entitlement to future increases in salary, as no such decree or order yet exists.

It is, however, contended that petitioner does not claim any right to any future increase. He merely seeks to remove any legal impediment to his receiving future increases. It is

asserted that, without the legal impediment provided under Section 9 of EO 7, any future increase in petitioners compensation will simply depend on the usual factors considered by the proper authorities. I fear this view is misleading and incorrect.

It is misleading because, by re-working the concept of injury, it diverts the focus from the required right-centric approach to the concept of injury as an element of locus standi. Injury or threat of injury, as an element of legal standing, refers to a denial of a right or privilege. It does not include the denial of a reasonable expectation.

The argument is likewise incorrect because petitioners reasonable expectation of any future salary increase is subject to presidential approval. Even without Section 9 of EO 7, the President may disallow any salary increase in RA 6758[22]-exempt entities. Section 9 of Joint Resolution No. 4, Section 59 of the General Provisions of RA 9970[23] and Section 56 of the General Provisions of RA 10147[24] expressly confer on the President the authority to approve or disapprove any grant of or increase in salaries, allowances, and other fringe benefits in entities exempt from the coverage of RA 6758. The approval of the President, upon the favorable recommendation of the Department of Budget and Management (DBM), is among the usual factors that will determine any future salary increase that may be reasonable expected to be received by petitioner.

Petitioner cannot also lay claim to any direct personal injury to his right or interest arising from the suspension under Section 10 of EO 7 of allowances and bonuses enjoyed by the board of directors/trustees of GOCCs and GFIs. He is not a member of the board of directors of Philhealth.

Neither can petitioner rely on his membership in the Philippine Bar to support his legal standing. Mere interest as a member of the Bar[25] and an empty invocation of a duty in making sure that laws and orders by officials of the Philippine government are legally issued and implemented does not suffice to clothe one with standing.[26]

It is clear from the foregoing that petitioner failed to satisfy the irreducible minimum condition that will trigger the exercise of judicial power. Lacking a leg on which he may base his personality to bring this action, petitioners claim of sufficient standing should fail.

Even assuming that petitioner had standing at the time he commenced this petition, subsequent events have rendered his petition moot.

For one, the effectivity of the suspension of allowances and bonuses enjoyed by the board of directors/trustees of GOCCs and GFIs under Section 10 of EO 7 already lapsed on December 31, 2010.[27] Thus, a review of the constitutionality of that provision is no longer necessary and its invalidation improper. The unnecessary invalidation of Section 10 of EO 7 might not only betray injudiciousness on the part of the Court but also needlessly put the Chief Executive, the head of a co-equal branch, in a bad light for issuing an invalid provision. Thus, the undue disregard of the mootness doctrine in connection with Section 10 of EO 7 would inflict severe collateral damage to judicial modesty and inter-branch courtesy.

Moreover, as the ponencia correctly ruled, the enactment of RA[28] 10149[29] has rendered the issue as to the validity of EO 7 effectively moot. With RA 10149, Congress affirmed the power of the President as enunciated in EO 7 to set guidelines and components of a rationalized compensation and position classification for all GOCC and GFI employees.

If a case is moot, there is no longer an actual controversy between adverse litigants.[30] Also, if events subsequent to the initiation of the lawsuit have resolved the matter, then the decision of the court on that issue is not likely to have any meaningful effect.[31]

With the recognition that RA 10149 mooted the challenge to EO 7, the Court must act with circumspection and prudence, bearing in mind that due respect for a co-equal branch necessitates that the presumption of legality and constitutionality afforded to the said provisions should no longer be disturbed.

Consistency with Existing Laws

Sections 2 to 6 of EO 7 is an enumeration of the guidelines and components of a rationalized compensation and position classification for GOCCs and GFIs that the President intends to establish. In particular, Section 2 provides the guiding principles; Section 3 discusses the total compensation framework; Section 4 pertains to the standard components of the compensation and position classification system; Section 5 involves the rationalization of indirect compensation and Section 6 lists the considerations in setting compensation levels.

Petitioner claims that these provisions are invalid because they violate existing laws, namely Section 16(n) of RA 7875[32] (the charter of Philhealth) and Section 9 of Joint Resolution No. 4[33] of the Senate and the House of Representatives.

Petitioner finds fault in the failure of EO 7 to correctly

distinguish between GOCCs and GFIs that have been exempted by law from RA 6758, as amended, and those that are within its coverage.

RA 6758, as amended, vests the Department of Budget and Management (DBM), which is under the control of the President, the authority to establish and administer a compensation and position classification system. On the other

hand, Section 16(n) of RA 7875 gives the board of directors of Philhealth the authority to appoint its own personnel and to fix their compensation, with the exception of the Philhealth president whose appointment and compensation require approval of the President. For petitioner, EO 7 violates Section 16(n) of RA 7875 by vesting on the DBM and the President the power to determine the compensation of Philhealth employees.

Joint Resolution No. 4 authorizes the President to modify the compensation and position classification system under RA 6758 of civilian personnel, among others. Section 9 of Joint Resolution No. 4 recognizes the distinct character of exempt entities and provides that such entities shall be governed by their respective compensation and position classification system. For petitioner, by using the guidelines, standards and components of standardized compensation framework provided under Joint Resolution No. 4 and applying them to all GOCCs and GFIs, EO 7 contravenes Joint Resolution No. 4 itself. In particular, EO 7 disregards the substantial distinction made under Section 9 of Joint Resolution No. 4 insofar as the right of exempt GOCCs to set their own compensation and position classification systems is concerned.

Petitioner is wrong. EO 7 is consistent with laws, including RA 7875 and Joint Resolution No. 4.

True, Congress carved exceptions to RA 6758, as amended, when it created GOCCs and GFIs which have been granted the authority to determine their own compensation and position classification system. Philhealth, governed by RA 7875, is one of these RA 6758-exempt entities.

It is likewise true that Section 9 of Joint Resolution No. 4 recognizes the authority granted to exempt entities like Philhealth to determine their own compensation and position classification system. Nonetheless, the said provision also provides that exempt entities shall observe the policies, parameters and guidelines governing position classification, salary rates, categories and rates of allowances, benefits and incentives prescribed by the President.

For purposes of clarity, Section 9 of Joint Resolution No. 4 provides:

(9) Exempt Entities ― Government agencies which by specific provision/s of laws are authorized to have their own compensation and position classification system shall not be entitled to the salary adjustments provided herein. Exempt entities shall be governed by their respective Compensation and Position Classification System: Provided, That such entities shall observe the policies, parameters and guidelines governing position classification, salary rates, categories and rates of allowances, benefits and incentives prescribed by the President: Provided, further, That any increase in the existing salary rates thereof shall be subject to the approval by the President, upon the recommendation of the DBM: Provided, finally, That exempt entities which still follow the salary rates for positions covered by [RA 6758], as amended, are entitled to the salary adjustments due to the implementation of this Joint Resolution, until such time that they have implemented their own compensation and position classification system. (Emphasis supplied)

Provisions of law should be read and understood in their entirety and all parts thereof should be seen as constituting a coherent whole. In this context, the recognition under Section 9 of Joint Resolution No. 4 of the authority granted to exempt entities like Philhealth to determine their own compensation and position classification system seeks to exclude them from the salary adjustments provided in Joint Resolution No. 4. This would have the effect of retaining the existing compensation levels in the said exempt entities at that time. It would prevent both diminution, in case their existing compensation levels are higher than the salary adjustments, and also increase, which would have enlarged the pay disparity between those covered by RA 6758 and exempt entities. To ensure observance of the distinction between RA 6758-covered and RA 6758-exempt entities and, at the same time, forestall any unnecessary or excessive dissimilarity in compensation and position classification systems may occur as a result of the distinctions, exempt entities are required to observe the policies, parameters and guidelines governing position classification, salary rates, categories and rates of allowances, benefits and incentives prescribed by the President. This is a recognition by Congress of the authority of the President to issue policies, parameters and guidelines that will govern the determination by exempt entities of their respective compensation and position classification systems. As a further safeguard against any abuse or misuse of their exclusion from RA 6758, any increase in existing salary rates of exempt entities are mandated to have the imprimatur of the President, upon the recommendation of the DBM. This second proviso complements and enhances the first proviso. It gives the President the opportunity to ascertain whether salary increases in exempt entities are in accordance with the prescribed policies, parameters and guidelines on compensation and position classification system. As a final proviso, exempt entities which still follow the salary rates for positions covered by RA 6758 are entitled to the salary adjustments under Joint Resolution No. 4, until such time as they have implemented their own compensation and position classification system. Again, this acknowledges the status of exempt entities and prevents the effective diminution of their salary rates.

Taken as a cohesive whole, Section 9 of Joint Resolution No. 4 pertains to the effect on and applicability to RA 6758-exempt entities of the salary adjustments provided under the said Joint Resolution. It prohibits RA 6758-exempt entities from availing of the beneficial effects of the salary adjustments provided therein, unless such entities still follow the salary rates for positions covered by RA 6758 and only until such time that they have implemented their own compensation and position classification system. However, there is nothing there which limits or constricts the power of the President as Chief Executive to prescribe such policies, parameters and guidelines which in his discretion would best serve public interest by regulating the compensation and position classification system of RA 6758-exempt entities. There is nothing there that prevents or prohibits him from adopting the same or similar policies, parameters and guidelines provided for in the said Joint Resolution. Viewed in this light, Sections 2 to 6 of EO 7 cohere with the objectives of Joint Resolution No. 4 and other laws relevant to it.

Petitioner further asserts as invalid insofar as Philhealth is concerned the second proviso in Section 9 of Joint Resolution No. 4. The said proviso requires that any increase in the existing salary rates in RA 6758-exempt entities shall be subject to the approval by the President, upon the recommendation of the DBM. For petitioner, this proviso amends or repeals the grant of authority under RA 7875 to fix the compensation of Philhealths personnel to Philhealths board of directors. Petitioner, however, maintains that a joint resolution cannot be used to repeal another law simply because it is not a law.

Under the Rules of both the Senate and the House of Representatives,[34] a joint resolution, like a bill, is required to be enrolled, examined, undergo three readings and signed by the presiding officer of each House. A joint resolution, like a bill, is also presented to the President for approval. There is no real difference between a bill and a joint resolution.[35] A joint resolution also satisfies the two requisites before a bill becomes law approval by both Houses of Congress after three readings and approval by the President. Thus, a joint resolution, upon approval by the President, is law. Even the Rules of the House of Representatives acknowledge this:

SEC. 58. Third Reading. x x x

No bill or joint resolution shall become law unless it passes three (3) readings on separate days and printed copies thereof in its final form are distributed to the Members three (3) days before its passage except when the President certifies to the necessity of its immediate enactment to meet a public calamity or emergency. (Emphasis supplied)

Joint Resolution No. 4 was approved by both Houses of Congress after three readings. President Gloria Macapagal-Arroyo approved it on June 17, 2009. It was published in the Manila Times on June 20, 2009 and in Volume 105, No. 34 of the Official Gazette on August 24, 2009. It is therefore a law.

As law, Joint Resolution No. 4 may therefore amend or repeal RA 7875, if the second proviso of Section 9 indeed it modifies RA 7875. However, the said proviso may be read in a way that does not require it to be seen as an implied amendment of RA 7875. It can be simply read as a necessary adjunct of the authority to prescribe policies, parameters and guidelines on compensation and position classification system for exempt entities. Without it, the President would have no way to check if the prescribed policies, parameters and guidelines are actually observed.

Nevertheless, Section 59 of the General Provisions of RA 9970 and Section 56 of the General Provisions of RA 10147 identically provide:

SEC. 59. Special Compensation and Other Benefits. GOCCs, including GFIs, who are exempt from, or are legally enjoying special compensation and other benefits which are subject to those authorized under R.A. No. 6758, as amended, shall be governed by such special laws: PROVIDED, That they shall observe the policies, parameters and guidelines governing position classification, salary rates, categories and rates of allowances, benefits, and incentives prescribed by the President; PROVIDED, FURTHER, That they shall submit their existing compensation and position classification systems and their implementation status to the DBM; PROVIDED, FURTHERMORE, That any grant of or increase in salaries, allowances, and other fringe benefits shall be subject to the approval of the President, upon favorable recommendation of the DBM: PROVIDED, FINALLY, That they shall not be entitled to benefits accruing to government employees covered by R.A. No. 6758, as amended, if they are already receiving similar or equivalent benefits under their own compensation scheme. (Emphasis supplied)

Section 59 of the General Provisions of RA 9970 and Section 56 of the General Provisions of RA 10147 completely debunk the conclusion that Sections 2 to 6 violate existing laws. Specifically with respect to all RA 6758-exempt GOCCs and GFIs, they recognize the authority of the President as exercised in Sections 2 to 6 of EO 7 to prescribe policies, parameters and guidelines governing position classification, salary rates, categories and rates of allowances, benefits, and incentives. Specifically with respect to all RA 6758-exempt GOCCs and GFIs, they acknowledge the Presidents power to approve or disapprove any grant of or increase in salaries, allowances, and other fringe benefits.

Joint Resolution No. 4, Section 59 of the General Provisions of RA 9970 and Section 56 of the General Provisions of RA 10147 reinforce the rule that sound management and effective utilization of financial resources of government are basically executive functions.[36] As a necessary incident thereof, the President as Chief Executive has the legal competence to exercise his power of control of all the executive departments, bureaus and offices,[37] including GOCCs and GFIs.[38] EO 7 is simply an exercise by the President of that power of control.

In sum, the guidelines in Sections 2 to 6 of EO 7 are

within the bounds of authority conferred on the President by the Constitution and various laws. Such regulatory powers cover all GOCCs and GFIs, regardless of coverage in or exemption from the salary standardization laws. In issuing EO 7, the President does not encroach on the authority of the legislature to make laws as he is merely enforcing the law:

While Congress is vested with the power to enact laws, the President executes the laws. The executive power is vested in the President. It is generally defined as the power to enforce and administer the laws. It is the power of carrying (out) the laws into practical operation and enforcing their due observance.[39]

It is fundamental that no person shall be deprived of life, liberty or property without due process of law.[40] Hence, the premise of a valid due process claim, whether substantive or procedural, is the dispossession of life or liberty or property. Where there is no deprivation of life, liberty or property, no meaningful claim of denial of due process may be made.

As discussed earlier, the imposition of a moratorium on increases in salaries, allowances and other benefits of officers and employees of GOCCs and GFIs, except salary adjustments under EO 8011 dated June 17, 2009 and EO 900 dated June 23, 2010, does not constitute a deprivation of property. In fact, it ensures that, like all other officials and employees of the government, officials and employees of GOCCs and GFIs will continue to enjoy the salary increases granted under EO 8011 dated June 17, 2009 and EO 900 dated June 23, 2010.

More importantly, the right of a public officer to receive compensation can only arise out of the rendition of the public services related to his or her office.[41] The right to compensation arises out of the performance by the public officer of his duties.[42] Thus, a public officers right to salary is limited only to salaries which he has already earned or accrued for services rendered.[43] Other than that, a public officer does not have a vested right to salary and his compensation may be altered, decreased or discontinued, in the absence of a constitutional prohibition.[44]

If no vested right to salary generally pertains to a public officer, there is no cogent reason to support the claim to a right to future salary increase. The grant of any salary increase in the future is something that is merely anticipatory of a prospective benefit, something that is contingent on various factors. That is why it is a mere expectancy,[45] which does not give rise to a vested right.[46]

Furthermore, the measure undertaken by the President seeks to impose a moratorium only on increases which are not authorized by existing legislation sanctioning salary adjustments.

On the matter of the suspension of allowances and bonuses (which is already moot as it was expressly made effective until December 31, 2010 only),[47] its context shows that it was meant to arrest the questionable practice by members of the board of directors/trustees of GOCCs and GFIs granting numerous and excessive allowances, bonuses, incentives and other benefits to themselves. The Presidents action as Chief executive was simply a decisive response to Senate issued Resolution No. 17, s. 2010 urging him to act on the matter and an exercise of his control and oversight powers.

More importantly, there could have been no violation of substantive due process as petitioner, or anybody for that matter, cannot properly claim a right to receive bonuses. A bonus is not a demandable and enforceable obligation.[48] By definition, a bonus is a gratuity or act of liberality of the giver which cannot be demanded as a matter of right by the recipient.[49] It is something given in addition to what is

ordinarily received by or strictly due to the recipient. The grant thereof is basically a management prerogative which cannot be forced upon the employer who may not be obliged to assume the onerous burden of granting bonuses or other benefits aside from the employees basic salaries or wages, especially so if it is incapable of doing so.[50] Thus, there can be no oppression to speak of even if these privileges (bonuses, allowances and incentives) cease to be given. All the more reason should the Presidents judgment as Chief Executive be

accorded respect if he directs the temporary stoppage of the grant of bonuses when he deems it to be prejudicial to public interest or too onerous because of the governments fiscal condition.

It is therefore clear that the suspension of the grant of bonuses and the imposition of a moratorium on salary increases under EO 7 do not deprive petitioner of any property right. As such, any declaration that such suspension or moratorium violates substantive due process cannot be justified.

Moreover, as already discussed, Section 59 of the General Provisions of RA 9970 and Section 56 of the General Provisions of RA 10147 expressly recognize the Presidents power to approve or disapprove any grant of or increase in salaries, allowances, and other fringe benefits in all RA 6758-exempt GOCCs and GFIs, including Philhealth. The power to approve or disapprove covers the lesser power to suspend the grant of allowances and bonuses or impose a moratorium on salary increases.

All told, the act of the President as Chief Executive in issuing EO 7 was not oppressive, arbitrary, capricious or whimsical. No grave abuse of discretion may be imputed to the President. Thus, as the Presidents official act which enjoys the presumption of constitutionality and regularity, EO 7 should be accorded due respect and its validity sustained.

A Final Word

Accountability of public office is a safeguard of representative democracy. All who serve in government must always be aware that they are exercising a public trust. They must bear in mind that public funds are scarce resources and should therefore be used prudently and judiciously. Hence, where there are findings that government funds are being wasted due to operational inefficiency and lack of fiscal responsibility in the executive departments, bureaus, offices or agencies, the President as Chief Executive should not be deprived of the authority to control, stop, check or at least manage the situation. Absent any showing of grave abuse of discretion on his part, the Court should recognize in the President as Chief Executive the power and duty to protect and promote public interest thru the rationalization of the compensation and position classification system in executive departments, bureaus, offices and agencies, including GOCCs and GFIs.

Accordingly, I vote that the petition be DISMISSED.

RENATO C. CORONA

Chief Justice

[1] These are Home Guaranty Corporation, Light Rail Transit Authority, Local Water Utilities Administration, Manila Waterworks and Sewerage System, National Development Corporation, National Electrification Administration, National Food Authority, National Housing Authority, National Irrigation Authority, National Power Corporation (by virtue of the Electric Power Industry Reform Act, the Power Sector Assets and Liabilities Management Corporation and the National Transmission Corporation are added to the list), Philippine Economic Zone Authority, Philippine National Oil Corporation, Philippine National Railway, and Philippine Ports Authority. There are 722 more GOCCs whose operations are barely monitored.

[2] Asian Development Bank Technical Assistance Report, Republic of the Philippines: Government-Owned and -Controlled Corporations Reform, June 2006. Accessed on 14 July 2011 through http://www.adb.org/documents/tars/phi/39606-phi-tar.pdf. Emphasis supplied.

[3] Directing the Rationalization of the Compensation and Position Classification System in Government-Owned and Controlled Corporations (GOCCs) and Government Financial Institutions (GFIs), and for Other Purposes. It took effect on September 25, 2010.

[10] Chemerinsky, Erwin, Constitutional Law: Principles and Policies, Third Edition (2006), p. 51.

[12] Lozano v. Nograles, G.R. No. 187883, June 16, 2009.

[14] Valley Forge Christian College v. Americans United for separation of Church and State, 454 U.S. 464 (1982).

[15] Southern Hemisphere Engagement Network, Inc. v. Anti-Terrorism Council, G.R. No. 178552, October 5, 2010. Emphasis supplied.

[16] Blacks Law Dictionary, Eighth Edition, page 1031.

[17] See Fisk v. Jefferson, 116 U.S. 131 (1885).

[18] House of Sara Lee v. Rey, G.R. No. 149013, August 31, 2006.

[20] Boncodin v. National Power Corporation Employees consolidated Union (NECU), G.R. No. 162716, September 27, 2006.

[22] Compensation and Position Classification Act of 1989.

[25] Francisco v. House of Representatives, G.R. No. 160261, November 10, 2003.

[26] David v. Macapagal-Arroyo, G.R. No. 171396, May 03, 2006.

^{^[27]} The suspension was extended until 31 January 2011 by EO 19 dated 30 December 2010.

[32] An Act Instituting a National Health Insurance Program for All Filipinos and Establishing the Philippine Health Insurance Corporation for the Purpose. It is otherwise known as the National Health Insurance Act of 1995.

[33] Joint Resolution Authorizing the President of the Philippines to Modify the Compensation and Position Classification System of Civilian Personnel and the Base Pay Schedule of Military and Uniformed Personnel in the Government, and for Other Purposes.

[34] Rules XXI, XXII, XXIII and XXV for the Senate and Rule X for the House of representative.

[36] Blaquera v. Alcala, G.R. No. 109406, 11 September 1998, citing Book IV of Executive Order No. 292 whose applicable provisions follow:

Section 1. Declaration of Policy. - It is the policy of the State that the Department of Finance shall be primarily responsible for the sound and efficient management of the financial resources of the Government, its subdivisions, agencies and instrumentalities. (Title II)

Section 1. Declaration of Policy. - The national budget shall be formulated and implemented as an instrument of national development, reflective of national objectives and plans; supportive of and consistent with the socio-economic development plans and oriented towards the achievement of explicit objectives and expected results, to ensure that the utilization of funds and operations of government entities are conducted effectively; formulated within the context of a regionalized governmental structure and within the totality of revenues and other receipts, expenditures and borrowings of all levels of government-owned or controlled corporations; and prepared within the context of the national long-term plans and budget programs of the Government. (Title XVII)

[37] Section 17, Article VII: The President shall have control of all the executive departments, bureaus and offices. He shall ensure that the laws be faithfully executed.

^{^[41]} 63C AmJur 2d 716, Public Officers and Employees, Sec. 272.

^{^[44]} Mechem, Floyd, A Treatise on the Law on Public Offices and Public Officers (1890), p. 577.

^{^[46]} Boncodin v. National Power Corporation Employees consolidated Union (NECU), supra note 20. Equitable Banking Corporation (now known as Equitable-PCI Bank) v. Sadac, GR No. 164772, 490 SCRA 380 (2006).

^{^[47]} As stated earlier, the suspension was extended until 31 January 2011 by EO 19 dated 30 December 2010. (See note 27.)

[48] Lepanto Ceramic, Inc. v. Lepanto Ceramics Employees Association, 614 SCRA 63 (2010).

[49] Manila Banking Corporation v. NLRC, G.R. No. 107487. September 29, 1997.