Automatic Price Control

The president can freeze the prices of basic necessities in a given area at their prevailing prices in any of the following instances:

1.) State of calamity/disaster area

2.) State of emergency

3.) Suspension of the privilege of the writ of habeas corpus

4.) Martial law

5.) State of rebellion

6.) State of war

“Calamity” and “disaster” can be either natural or man-made.

If the prevailing price is unreasonable or excessive, the implementing agency in question can recommend the imposition of a ceiling price for the basic necessity different from the prevailing price. This power of price control has a maximum duration of 60 days.

Mandated Price Ceiling

The president, on the recommendation of the agency concerned or the Price Coordinating Council (which consists of the Secretary of the DTI as chair, the secretaries of Agriculture, Health, DENR DILG, DOJ and DOTC, Director General of the NEDA, 1 representative each from the consumers', agricultural producers', trading and manufacturers' sectors,) can impose a ceiling price on any basic necessity/prime commodity under any of the following conditions:

1.) Impendency, existence or effects of a calamity

2.) Threat, existence or effect of an emergency

3.) Prevalence/widespread acts of illegal price manipulation

4.) Impendency, existence or effect of any event causing artificial and unreasonable in the price of the basic necessity/prime commodity in question

5.) If the prevailing price of the basic necessity/prime commodity has risen to unreasonable levels

Determination of Price Ceilings

The following factors will be considered to determine a reasonable price ceiling:

1.) The average price of the last 3 months immediately before the proclamation of the price ceiling

2.) Supply availability in the market

3.) The cost to the producer, manufacturer, distributor or seller, including:

4.) The peso to foreign currency exchange rate to which the basic necessity/prime commodity or any of its components, ingredients or raw materials was paid for

5.) Changes in the amortization costs of machinery because of fluctuations in the foreign currency exchange rate with which the machinery was bought through credit facilities

6.) Changes in labor costs caused by changes in the minimum wage

7.) Changes in transportation costs

Government Interference in Patents

Here are 2 instances when the government, by virtue of its police and eminent domain powers, can interfere with the rights of the patent holder without his consent.

Exploitation

The government, or third persons it so authorizes, can exploit an invention without the patent holder's consent if the following requisites:

1.) It is required by public interest (national security, etc.)
2.) The patent holder's way of exploiting his invention is anti-competitive (this is determined by a judicial or administrative body)

The owner of the patent is, of course, entitled to just compensation.

Compulsory Licensing

A person who is capable of exploiting the invention in question can be granted the license by the Director of Legal Affairs to exploit it, even if against the patent holder's wish, if any of the following circumstances are present:

1.) National emergency or similar circumstances that are extremely urgent
2.) Public interest requires
3.) A judicial or administrative body has found the patent holder's exploitation of the invention to be anti-competitive (see exploitation)
4.) The invention is used publicly, but not commercially, and without a satisfactory reason
5.) The invention isn't worked in the Philippines on a commercial scale without satisfactory reason, even if it can be worked on such a scale

In all instances, the patent holder is entitled to just compensation.

Instances 1 to 4 can be raised any time after the patent is granted. 5, on the other hand, can't be invoked until 4 years after the patent holder applied for the patent, or 3 years after the patent was issued, whichever happens last. Also, if the invention wasn't worked in the Philippines but was successfully worked in another country, the government can't deprive the patent holder of his license.

RA 7080: The Plunder Law

Plunder is committed when a public officer amasses ill-gotten wealth of at least Php50 million by an act or series of overt (read: not secret) criminal acts that may constitute different offenses. It isn't necessary to prove each act distinctly. Simply proving that the acts show a pattern of accumulation is enough. The series of acts are considered a continuing crime. It may be committed by the public officer himself or in connivance with family members and relatives (whether by affinity or consanguinity,) business associates, subordinates or other persons. The crime must, however, be committed in relation to the office of the public officer or another set of laws will apply (Organo vs. Sandiganbayan, GR 136916, December 14, 1999.)

The penalty is reclusion perpetua for the offender and anyone who participated with him in an offense that led to the crime of plunder. It used to be reclusion perpetua to death until the death penalty was abolished in 2006. The court will also declare any and all ill-gotten wealth and their interests and other income and assets (including properties and shares of stock that came from the transactions in question) forfeited in favor of the state.

During the pendency of the case, the official will be suspended. If he's found guilty, he'll lose all retirement and gratuity benefits under any law. If acquitted, he'll be automatically reinstated and entitled to the salaries and other benefits he failed to receive during his suspension unless administrative proceeding have also been filed against him.

If the officer in question belongs to Salary Grade 27 or higher under RA 6758 (Compensation and Position Classification Act) then he will be tried in the Sandiganbayan. If he's grade 26 or lower, he'll be tried in the lower courts (Organo vs. Sandiganbayan.)

In Estrada vs. Sandiganbayan (GR 148560, November 19, 2001) the nature of plunder is that of malum in se (evil in itself.) Mitigating and aggravating circumstances therefore can be applied.

Ill-Gotten Wealth

These are assets, properties, business enterprises or material possessions of the errant public officer (as well as his co-accused outside government) that he acquired directly or indirectly through dummies, nominees, agents, subordinates and/or business associates by a combination or series of the following (or similar) means:

1.) Misappropriation, misuse, conversion or malversation of public funds of raids on the public treasury

2.) Directly or indirectly receiving commissions, gifts, shares, percentages, kickbacks or equities in connection with any government contract or project or by reason of the office/position of the officer in question

3.) Illegal/fraudulent conveyance or disposition of assets belonging to the national government or any of its subdivisions, agencies or instrumentalities (including government-owned/controlled corporations)

4.) Directly or indirectly receiving, obtaining or accepting any shares of stock, equity or any other form of interest or participation (including the promise of future employment in any business enterprise or undertaking)

5.) Establishing agricultural, industrial or commercial monopolies or other combinations and/or implementing decrees and orders intended to benefit particular persons or special interests

6.) Taking undue advantage of official position, authority, relationship, influence or connection to unjustly enrich oneself at the expense of the Filipino people and the Republic of the Philippines

A "combination"  under the definition of ill-gotten wealth refers to at least 2 of any of the above categories. A "series" refers to 2 or more overt criminal acts within each category.

The plunder law's constitutionality has been questioned because of supposedly general terms or vague ones that lack definition. However, this claim has been debunked because there are parameters that it has set (like the Php50 million amount) that make it clear and don't violate the constitutional rights of the accused. If the acts of the public officer in question don't meet the definition of plunder and ill-gotten wealth, other laws like RA 3019, including its provisions on SALN will come into view. The non-government people also have the same law's non-government provisions in case they can't be charged under RA 7080.

Then, of course, there are other related laws. The crime of plunder has a prescriptive period of 20 years.

Local Government Units: the City

The city consists of several urbanized and developed barangays. Like the municipality, it serves as a general purpose government for the coordination of basic, regular and direct services and effective governance of the inhabitants of its territorial jurisdiction. There are 3 kinds of cities:

1.) Component Cities

2.) Independent Component Cities

3.) Highly Urbanized Cities

Component cities are subordinate to the province. Hence, their mayors answer to the governor. Independent component cities are component cities whose charters say nothing about electing their provincial officials and are independent of the province. Highly urbanized cities are also independent of the province and have other characteristics that differentiate them from independent component cities.

A city is created, merged, abolished or have its boundaries substantially altered only by law. The law must be approved in a plebiscite held by COMELEC in the LGU/s directly affected. The plebiscite must be held within 120 days from the passage of the law in question unless the law itself specifies another date or time frame.

Requisites (component and independent component cities:)

1.) Average annual income of Php 20 million for the last 2 consecutive years (certified by the Department of Finance)

2.) Contiguous territory of at least 100 sq. km.(certified by the Lands Management Bureau)

3.) Population of at least 150,000 inhabitants (certified by the NSO)

The creation can't reduce the land area, population and income of the original LGU/s to below the minimum requisites. The territory requirement won't apply if the city in question consists of more than 1 island; it also doesn't have to be contiguous if it comprises 2 or more islands. The average annual income includes the income going to the general fund and excludes specific funds, transfers and non-recurring income.

Requisites (highly urbanized cities:)

1.) Minimum population of at least 200,000 inhabitants (certified by the NSO)

2.) Latest annual income of at least Php50 million based on 1991 constant prices (certified by the city treasurer, not the Department of Finance)

3.) Declaration by the President within 30 days after the city has met the minimum requirements

4.) Approval in a plebiscite (same rules as a component or independent component city)

It's clear from the requirements of a highly urbanized city that it needs to be a city first. Also, if a city doesn't meet the above requirements, it will be considered a component city of the province where it's located in; and if it's located within the boundaries of 2 or more provinces, it will be considered a component city of the province where it used to be a municipality.

Local Government Units: the Municipality

The municipality is a group of barangays. It serves as a general purpose government for the delivery of basic, regular and direct services and effective governance of the inhabitants of its territory. It is created by law, not by ordinance., and subject to a plebiscite held by the COMELEC in the LGU/s directly affected. Once the plebiscite is held, the creation of the municipality takes effect within 120 days from the holding of the plebiscite unless the law creating the municipality specified a different date or time frame.

Requisites:

1.) Average annual income of at least Php 2.5 million (certified by the provincial treasurer) for at least 2 consecutive years

2.) Minimum population of 25,000 inhabitants (certified by the NSO)

3.) Contiguous territory of at least 50 sq. km

The creation of a new municipality must not reduce the territory and population of the original municipalities to below the minimum requisites.

Contiguity of territory isn't necessary if the municipalities consist of 2 or more islands. The territorial jurisdiction of the municipality, like the barangay, must be properly identified.

The average annual income includes the income accruing to the municipality's general fund, excluding special funds, transfers and non-recurring income.

Local Government Units: the Barangay

The baragnay is the basic political unit of the Philippines and serves as the primary planning and implementing unit of government policies, plans, programs, projects and community activities. It is also the forum where the people's collective views are brought out and where disputes can be settled amicably.

Barangays are created, merged, abolished substantially altered in its boundaries either by a law or an ordinance passed by the provincial (in case of a municipality) or city sanggunian. The law or ordinance, however must be approved in a plebiscite held by COMELEC in the LGU concerned. In case the barangay is created, etc. by the provincial sanggunian, there must be a recommendation by the municipal sanggunian for that purpose.

Requirements:

1.) Contiguous territory with a minimum population of 2,000 inhabitants (certified by the NSO) or 5,000 in case highly urbanized cities as well as cities and municipalities within the NCR (the creation of a new barangay must not reduce the population of the previous one)

2.) Territorial jurisdiction must be clearly defined, taking into consideration natural boundaries (rivers, lakes, etc.)

3.) A contiguous territory isn't necessary if the barangay consists of 2 or more islands

Barangays may be created within indigenous cultural communities by law in order to facilitate the delivery of basic services.

The governor or city mayor can prepare a consolidation plan for the barangays within his/her jurisdiction and submit it to the appropriate sanggunian for appropriate action. For municipalities within the NCR, the municipal mayor can do the same thing and submit the plan to the municipal sanggunian.

Disciplinary Actions for Elective Local Officials

Grounds

Disciplinary actions for elective local officials are found in sec. 60 to 68 of the Local government Code (RA 7160.) The grounds for discipline, suspension or removal from office for local elective officials are listed below. If proven, the proper court may order the official's removal:

1.) Disloyalty to the Republic of the Philippines

2.) Culpable violation of the Constitution

3.) Dishonesty, oppression, misconduct in office, gross negligence or dereliction of duty

4.) Commission of any offense involving moral turpitude or an offense punishable by at least prision mayor

5.) Abuse of authority

6.) Unauthorized absence for 15 consecutive days (except in case of members of the sanggunians)

7.) Application for/acquisition of foreign citizenship, residence or immigrant status in another country

8.) Other grounds provided for in the Local Government Code and other laws

If the complaint is filed with the courts, then we have to follow court procedure. Elective officials with a Salary Grade of 27 and above will be tried by the Sandiganbayan. Below that, the regular courts come into play. 

Below is the administrative procedure of disciplining local elective officials. The rule on exhaustion of remedies, the question of whether we go straight to the courts or follow administrative process, is applicable here.

Administrative Complaints

A.) Form and Notice

A verified complaint must be filed against the elective local official in question and must be filed with the following government offices:

1.) The Office of the President: for elective officials of a province or city (whether highly urbanized, independent component or component)

2.) The sangguniang panlalawigan: for the officials of a municipality (appealable to the president)

3.) The city or municipal sanggunian: for elective barangay officials (the decision becomes final and executory)

Within 7 days from the filing of the complaint, the president or sanggunian concerned will order the official in question to submit a verified answer within 15 days from receipt of the order. Investigation will begin within 10 days after receiving the answer of the official in question.

Take note of "verified." No verification means that the complaint will be junked.

If the official in question is of a province or highly urbanized city, the hearing and investigation will be done in the place where he holds office. Other elective officials will be heard and investigated in the sanggunian concerned.

An investigation can't be held within 90 days before any local election; the same holds true for a preventive suspension. If  preventive suspension has been imposed before the 90-day period before the local election, it will automatically be lifted when the 90-day period starts. This is because the courts have recognized the electorate's power to forgive and condone an erring official through the local elections (Salalima vs. Guingona, 257 SCRA 55) but this forgiveness can't apply to criminal acts.

B.) Preventive Suspension

Preventive suspension may be imposed by the following:

1.) The president: if the official in question belongs to a province or a highly urbanized or independent component city

2.) The governor: if the official in question belongs to a component city or municipality

3.) The mayor: if it's a barangay official

Preventive suspension can be imposed at any time after the issues in the complaint are joined and the evidence of guilt is strong; taking into consideration also the gravity of the offense and the possibility that the official in question could influence witnesses or pose a threat to the integrity of the investigation's records and evidence. Preventive suspension lasts for a maximum of 60 days, but if several complaints are filed against the same official he can't be suspended for more than 90 days in a single year for the same ground/s existing at the time of the first suspension. 

After the suspension period expires, the official is automatically reinstated but the investigation will continue. The investigation lasts for a maximum of 120 days, beginning from the time the official in question was formally notified of the case against him. If he causes delays in the investigation through request, fault or neglect (but not appeal) the period of delay won't be included in the 120-day period.

Abuses in the power of preventive suspension are to be treated as an abuse of authority. 

The official in question won't receive his salary or compensation while the suspension is in effect, but if exonerated and reinstated he'll be paid his salary and other emoluments including the ones that accrued during his suspension. Indefinite preventive suspension is not allowed (Layno vs. Sandiganbayan, 136 SCRA 536.)

The 120-day period mentioned above is divided into 2 parts: a maximum of 90 days investigation proper and a maximum of 30 days period after the end of the investigation within which a decision is to be rendered. If found guilty and the penalty is suspension, the suspension term can't last longer than 6 months for every administrative offense. If an elected official has been punished with suspension, he can still run for office as long as he's still qualified. This won't be the case if he's removed from office. If removal is the appropriate penalty, that official will be barred from running for any elective office.

C.) Appeals

Appeals are to be made within 30 days from receipt of the decision. In case the decision is made by a municipal or component city sanggunian, an appeal is to be made to the provincial sanggunian. If the decision in question comes from the provincial, highly urbanized or independent component city sanggunian, appeals are to be made to the president. 

Appeals will not prevent a decision from becoming final and executory. While on appeal, the official in question will be treated as being preventively suspended.

Suspension

When a public officer is on trial in a criminal case under either RA 3019, the Revised Penal Code or related laws, can be suspended while the case is ongoing. If convicted by final judgment, he loses all his retirement and gratuity benefits. If acquitted, he will be reinstated and the salaries an all other benefits due him during the period of trial will be paid to him (unless administrative charges were filed against him while the criminal case was pending.)

Suspension, though mandatory, isn't automatic. The official in question is still entitled to a hearing that is required to determine the validity of the accusations against him because of his right to due process. Only when it is determined during the hearing that suspension is proper that an order for suspension will be issued. Therefore, a suspension may or may not be put into effect while an official is on trial; it all depends on the findings of the pre-suspension hearing. 

In Santiago vs. Sandiganbayan (GR128055, April 18, 2001) there are 3 specific arguments given as to why a pre-suspension hearing is required, since due process is too broad a justification:

1.) Whether or not he was given the right to a preliminary investigation

2.) Whether or not the acts complained of constitute a violation of RA 3019 or related laws

3.) Whether the grounds for a motion to quash under Rule 117 of the Rules of Court are available to him

It is curious to note also that, under the wording of sec. 13 of RA 3019 itself, lifting of suspension requires an acquittal. If the case is dismissed, there is no acquittal and therefore the official will remain suspended.

Suspension by nature is not considered a penalty because the suspended official will be entitled to reinstatement and unpaid benefits if he's acquitted. It is, instead, a preventive measure aimed at keeping the official in question from making use of his powers to frustrate the investigation (intimidation, etc.) It is therefore not considered ex post facto. 

Suspension also can't be indefinite; to do so would constitute another violation the official's right to due process. The period of suspension will vary according to which branch of service the public officer belongs to. Also suspension of a member of Congress follows rules that are different from those of public officers from other branches of government.

SALN and Unexplained Wealth

Under the anti-graft law, every public officer is required to submit a true detailed and sworn statement of assets and liabilities (SALN) within 30 days from assuming office. This SALN should also include a statement of the amounts and sources of his income, personal and family expenses as well as the amount of income taxes he paid in the previous year. He must also submit a SALN:

1.) Every year on or before April 15

2.) On the expiration of his term of office

3.) On his resignation, retirement or separation (read: removal) from office

If he assumes office less than 2 months before the end of the calendar year, he can file his SALN on or before April 15 of the next year.

Violations with regard to the SALN are punished with a fine of Php 1,000-5,000 and/or imprisonment of up to 1year and 6 months. There is no minimum prison term. If the violation is proven in an administrative proceeding, perpetual dismissal is proper even if there are no criminal charges filed. An elected official who has been dismissed under RA  3019 can't be reelected.

If (in accordance with RA 1379) an official during his incumbency acquires in his name or for other people money or property that is clearly out of proportion to his salary and other lawful income, that's a ground for dismissal or removal. Properties in the name of his spouse and unmarried children will be considered in the investigation if their acquisition through lawful means can't be proven. This includes bank deposits; ergo, this is an exception to the bank secrecy law.

Other People Under RA 3019

Now that you know about the offenses of public officers under RA 3019, here are the provisions of the same law that target other offenders. The penalties that cover these offenses are the same as those of public officers.

Persons with family ties or close personal relations with any public official are prohibited from taking advantage of such ties or relationships by directly or indirectly asking for or receiving any gift or material/pecuniary advantage from people or entities who have business, transactions or contracts with the government wherein the official concerned is required to intervene. "Family ties" include the spouse as well as relatives up to the 3rd civil degree. "Close personal relation" includes close personal friendship and professional employment that gives rise to intimacy and assures free access to the official in question. This includes membership in social and fraternal organizations.

Relatives within the 3rd civil degree of the President, Vice-President, Senate President and House Speaker are not allowed to intervene directly or indirectly in any business, contract or transaction with the government. The exceptions are:

1.) If the transaction, etc. in question was already going on when the official in question assumed office

2.) If the official in question was already dealing with the government on the same line of business before he assumed office

3.) If the approval of application filed by the officer in question isn't discretionary but depends on requirements set down by law, rules and regulations

4.) If the act is lawfully performed in an official capacity or in the exercise of a profession (be careful of this part)

A member of Congress (meaning both the Senate and House of Representatives,) during his term in office, is not allowed to acquire or receive any personal pecuniary interest in any specific business enterprise that will indirectly or directly benefit from any law or resolution authored by him previously approved or adopted by Congress during said member's term. This extends to other public officers who recommended the initiation of such law or resolution in Congress and who later acquire or receive such interest during their incumbency. Furthermore all officers, whether members of Congress or not, so long as they have an interest in the business enterprise in question, are prohibited from retaining the interest in question if it continues for 30 days after its approval.

Corrupt Practices of Public Officers

The following, which are listed in Sec. 3 of RA 3019 (the anti-graft law,)  are consider corrupt practices of government officers under the anti-graft law. Even contractual employees of the government as well as reelected public officials can be prosecuted under this law.

1.) A public officer influencing or inducing another public officer to commit an offense in connection with his (the latter's) duties or an act that violates rules and regulations promulgated by competent authority; or if a public officer allows himself to be influenced or induced to commit the offense in question. In both instances, the corrupting party and corrupted are liable.

2.) Demanding, requesting and/or receiving any gift, share, percentage or benefit, for oneself or any other person, in connection with any contract or transaction between the government and any other entity wherein a public official is required to intervene in an official capacity under the law. Any or all of the three (demanding, etc.) are punishable.

3.) Directly/indirectly requesting/receiving any gift, pecuniary/material benefit, etc. for oneself or another, from any person for whom the public officer has secured or obtained (or will secure or obtain) in any capacity, any government permit or license in exchange for help given/already given without prejudice to sec. 13 of the same law (suspension.)

4.) Accepting or having any family member accept employment in a private enterprise that has pending official business with the officer in question during the pendency of the transaction or within a year after the transaction is terminated.

5.) Causing undue damage to any party (including the government) or giving any private party unwarranted benefits, preference etc. in the discharge of official administrative/judicial functions via obvious partiality, clear bad faith or gross inexcusable negligence. This also extends to employees of government corporations that have the duty to grant licenses, permits or other concessions.

6.) Neglecting/refusing without sufficient justification after being requested or demanded to act within a reasonable time on any case pending before a public officer for the purposes of directly/indirectly obtaining some pecuniary/material benefit from any person interested in the case, favoring the officer's own interests, or giving undue advantage in favor of or discriminating against other interested parties.

7.) Entering on the government's behalf into any contract or transaction that is clearly and grossly disadvantageous to the government regardless of whether or not the public officer in question has profited or will profit from the contract/transaction. The officer in question must have the authority to conclude the transaction/contract and bind the government to it and must not have been rescinded.

8.) Directly/indirectly having financial interest in any business, contract or transaction in connection with which one intervenes or participates in an official capacity or in which law or the constitution forbids such interest.

9.) Directly/indirectly becoming interested, for personal gain, or having a material interest, in any act/transaction that requires the approval of a board, panel, etc. where the public officer is a member and the approval requires discretion. Even if he votes against the approval or doesn't participate in the action of the board, he's still liable. Personal interest is presumed by the law itself against the members of the panel/board responsible for the approval of clearly irregular, illegal, etc. transactions of the board.

10.) Knowingly approving or granting licenses, privileges, benefits or permits to unqualified persons or those not legally entitled to such privilege, etc. or to dummies or representatives of unqualified persons/entities.

11.) Divulging valuable confidential information acquired by the officer's office (or by him on account of his official position) to unauthorized persons or releasing such information before its authorized release date.

The person offering or giving the gift in # 2 and 3 or making the offer of employment to the public officer in #4, as well as the one who urges the divulging of the information will be meted out the same penalty as the officer in question and, at the court's discretion, be temporarily or permanently disqualified from doing business with the government in any form.

Violations are penalized by the following:

1.) Imprisonment for 1 to 10 years;

2.) Perpetual disqualification from public office; and,

3.) Government confiscation/forfeiture of any prohibited interest and unexplained wealth clearly out of proportion to the officer's lawful salary and other legitimate income 

In case of conviction the complaining party on whose complaint the criminal case was filed will be entitled to recover the amount of money or thing given to the accused (or its value.) The prescriptive period of violations of the anti-graft and corrupt practices act is 15 years.

Judicial Review of Administrative Decisions

Post No. 100 enumerated the exceptions to the exhaustion of remedies doctrine. This one covers the overall view of what judicial review of administrative decisions constitute. The questions to be raised in cases of judicial review of administrative bodies are grouped into the following:

1.) Questions of Law

2.) Questions of Fact

Generally, factual findings are binding on the court if backed by evidence. The court will not entertain questions of fact unless any of the following are present:

a.) The law clearly allows it.

b.) There was fraud, an imposition or a mistake other than an error in judgment when the evidence was evaluated.

c.) The body committed an error in appreciating the pleadings or interpreting the documentary evidence.

3.) Questions of Mixed Law and Fact

If factual findings are involved in and dependent on resolving a legal question.

Factual findings are given attention if they're supported by sufficient evidence (see Levels of Evidence.) Findngs based on the expertise of the different agencies are given a lot of respect. Factual findings, however can be challenged if their credibility is called to question. In that case, the court will try to come up with a finding that is close to the evidence. Administrative findings can only be set aside if there is proof of fraud, grave abuse of discretion or errors of law.

A judicial review is not a de novo trial. It's an inquiry into whether the findings of the administrative bodies are consistent with law, supported by evidence and fraud-free.

Exhaustion of Remedies

This is my 100^th post; a milestone. Hurray!

If you have a problem in an administrative body and it hands you an unfavorable decision in your case, going to court isn't automatic. The body must be given a chance to correct its errors. For the sake of comity and convenience, the courts won't come into the picture until the administrative processes are finished. Accordingly and depending on the particular administrative body, appeals should go through the regional director and all the way to the appropriate department secretary before you go to court. Once started, an administrative action must be pursued until its completion (doctrine of finality of administrative action.) If you back a way, you have a problem.

Even if you file a special civil action, the courts will dismiss it if they see that you didn't take the other remedies available. That includes questioning the legality of a tax. Even a certiorari can be turned down if you didn't exhaust the other available remedies.

The courts will not touch an administrative body's decision because they presuppose that the body's technical knowledge should first be applied before they can examine any claim of wrongdoing. Decisions of the administrative bodies are given considerable thought by the courts, and in many cases can even influence a court decision. This is known as the doctrine of prior resort.

There are, however, exceptions to the rule on exhaustion of remedies. These are the following:

1.) The alter ego doctrine/doctrine of qualified political agency

All official acts of a member of the cabinet are considered official acts of the president himself. Consequently, if a department undersecretary makes a ruling it's as if it was made by the department secretary himself. In that case, the next resort is the courts. Some departments even have rules that specify which court the decision should be appealed to. Decisions of the DAR secretary, for instance, can be brought to the CA.

2.) The remedy is pointless/useless

3.) The administrative agency is in estoppel

Estoppel is a defense of one party if the other party doesn't act despite the opportunity given.

4.) If the issue in the case involves a pure legal question

There is a question of law when there are doubts about what the law says caused by the facts proven in the case. One example would be somebody questioning the penalty for a particular violation, calling it excessive, but admitting to his own wrongdoing (Castro vs. Secretary, GR 132174, August 20, 2001.)

5.) The administrative action is illegal

If the action is made beyond the jurisdiction set by law, or obviously gross.

6.) Unreasonable delay or inaction on the part of the administrative body

7.) If court action is necessary to prevent irreparable damage

8.) In land cases where the subject matter is private land

9.) If the law itself doesn't make exhaustion as a requirement for later judicial action

Ex. See my post “Paths to the CTA.”

10.) If observing the rule on exhaustion of remedies will obliterate the claim

11.) When there are special reasons or circumstances that need immediate court action

If there are no remedies available in the administrative body, then resort can be made to the courts. The SC laid down 2 requirements for this: first, the circumstances show that a court action is urgent; and second, the administrative action is clearly illegal and the body lacks jurisdiction.

12.) If there is a clear violation of the right to due process

Ex. if the government confiscated your land for public purposes but didn't inform you nor pay compensation.

13.) If the rules don't provide an adequate and fast remedy

Exhaustion may be disregarded in any of the following instances: denial of due process, pure legal questions, a grossly illegal action, estoppel, irreparable damage, secretaries acting as the president's alter ego, if exhaustion is unreasonable, if the claim will be lost in the process of exhaustion, private land in land cases, judicial intervention is necessary and no other adequate remedy is available.

Powers of the Administrative Bodies

The powers of the administrative bodies are the following:

1.) Rule-making/Quasi-legislative

2.) Quasi-judicial/adjudicating

3.) Determinative

Rule-making/Quasi-legislative

Powers delegated by the government to any of its offices can't be delegated by these offices to others further down the line. The rule-making power is the power of a government office to set the details in the enforcement of the law/laws which the office operates under. These rules and regulations have the force and effect of law; they bind whoever comes under them and the courts can take judicial notice of them. There are 3 kinds of administrative rules and regulations:

1.) Supplementary/Detailed

These rules establish the details  in enforcing policies mentioned in the law, such as the Implementing Rules of the Labor Code.

2.) Interpretative Legislation

These guide the decisions of administrative rulings by interpreting the laws to be enforced (ex. liberal interpretation of tax laws in favor of the taxpayer.)

3.) Contingent Legislation

These rules are made because of certain things which influence law enforcement. They're avoided today because of the risk involved.

To be valid, they have to be issued  in accordance with law and are limited to the extent that the law allows them. If they exceed the limit, they can be attacked. They can, however, be used to fill in gaps that the law has. Rules and regulations that are inconsistent with law have no effect. The rules must also be reasonable because decisions of the administrative bodies only require substantial compliance, not preponderance of evidence or proof beyond reasonable doubt. They must also be published in the Official Gazette, the government's official newspaper, or, under EO 200, in a newspaper of general circulation. Unpublished rules  have no effect; they deny the individual the constitutional right to due process. If the rules are procedural or just legal opinions, they don't need notification. Hearing also isn't necessary for the issuance of a rule.

In case the administrative rules have penalties, the law itself must fix the penalty for the violation of the rules and declare these violations as punishable.

Determinative

There are 5 of these:

1.) Enabling

These powers permit activities which the law wants to regulate (ex. issuing of business licenses.)

2.) Directing

These are exercised when, for instance the BIR performs an assessment.

3.) Dispensing

These grant exemptions from a general prohibition or relieve a person or entity from an affirmative duty.

4.) Examining/Investigation

The production of documents, evidence and witnesses can be demanded. Although calling of witnesses isn't inherent in an administrative body, administrative officers can summon witnesses, administer oaths, etc. An administrative body can't punish non-compliance with contempt unless the law allows it.

5.) Summary

The power to use force against persons or property  without a judicial warrant in order to accomplish a legal purpose (such as in abating nuisances.)

Quasi-judicial/Adjudicatory

Decisions of administrative bodies  have the following requisites:

1.) Right to a hearing (and the right against self-incrimination)

2.) The body must consider the evidence presented

3.) The decision must be well-based

4.) The evidence must be substantial

5.) The decision must be based on the evidence, contained in the record and communicated to the parties

6.) The members of the body must act according to their own individual assessment of the facts

7.) The decision must inform the parties of the issues involved and how the conclusion was reached

Administrative due process is not equal to judicial due process, both in application of rules and the degree weight of the evidence. You have to bring your case all the way up to the president, who has review powers over the different branches and can directly or indirectly (alter ego doctrine) take consideration of the case (with certain exceptions, of course.) After that, you have to go to the courts; administrative decisions aren't part of the legal system.

There are, however, certain cases where notice and hearing are dispensed with:

1.) Granting provisional authority to increase rates or engaging in a particular line of business

2.) Summary proceedings for distraint and levy in the case of delinquent taxpayers

3.) Cancellation of a passport if the DFA secretary didn't commit an abuse of discretion

4.) Summary abatement of nuisances per se

5.) Preventive suspension of a public officer while under investigation

De Facto Officers

The case of Torres vs. Ribo (81 Phil 44) defines a de facto officer as "one who has the reputation of the officer that he assumes to be, and yet is not a good officer in point of law." He must have acted as a officer long enough and came to power under a colorable (read: defective) authority or by the acquiescence of the people and local authorities. The actions of a de facto officer are considered to have legal effect and are binding. This is for the protection of  people who get involved in the official acts of a person performing the duties of a public office.

These are the elements:

1.) A validly existing public office

2.) Actual physical possession of that office

3.) The title to the office is colorable/defective

The office has a colorable title in any of the following instances:

1.) By reputation/aquiescence: everybody supposes that the person holding the office is the legal occupant and nobody questions it. Usually, it happens when somebody has been holding the office for a considerable length of time and everybody as a result thinks he is the officer that he claims to be.

2.) There is a valid appointment or election but the officer didn't meet certain requirements prescribed by the law (like not taking the oath of office.)

3.) There is an appointment or election that is void because the officer in question isn't eligible or the appointing/electing authority had no power  and nobody knew that this was so (ex. the president appointing somebody to an elected position.)

4.) Coming to officer through a known appointment or election under a certain law that was later declared unconstitutional.

The rightful officer can recover all the salaries and other benefits from the de facto officer even if the de facto officer assumed office in good faith. What matters, in the first place, is that there is color/doubt to this title. If, however, there is no de jure (lawful) officer the de facto officer is entitled to the salaries and benefits of his office and can even file a case to recover them. Also, if the officer committed unlawful acts before legally assuming office, he can be held liable for damages.

Administrative Law: General Principles

Administrative law is the part of public law establishing the framework and determining the competence of administrative authorities (offices of the government) and provides the individual person with remedies in case his rights are violated. It is made up of laws which organize administrative bodies; rules, regulations and orders issued by these bodies, decisions over controversies in their particular field of specialization; and doctrines dealing with their creating, operation and effect of their decisions and regulations

As a function, administration refers to the implementations of the laws in non-judicial matters by competent authority. As an organization, it refers to the people controlling it for the time being.

Administration is classified into internal and external. Internal refers to the legal side of public administration (personnel, budgeting, etc.) External refers to problems of government regulations (regulation of profession, business, etc.)

Administrative Bodies

An administrative body is a government organ that is neither a court nor a legislative body (Senate, etc.) which affects the rights of parties either through its rule-making or quasi-judicial powers. They created either by the Constitution, law or by authority of law. Even though an administrative agency conducts hearings and settles controversies, its function is primarily regulatory since these hearings are part of its regulatory duty. The rule-making power is administrative if it sets down the details for the enforcement of law and doesn't have the discretion to determine what the law says.

Types of Administrative Bodies:

1.) Those set up to make the government a private party (ex. the GOCCs)

2.) Those set up for situations where the government offers grants or special privileges (ex. Bureau of Lands)

3.) Those where police power is needed to regulate private businesses and persons (ex. SEC)

4.) Those set up to adjust individual controversies because of strong social policies

3.) Those set up to perform some business service to the public (ex. COWD)

6.) Those set up to regulate business that affect public interest

7.) Those set up to carry out actual government business (ex. BIR)

Public Officers: Constitutional Disqualifications

The qualification of public officers may refer either to endowments/qualities or the act of assuming office. Both are indispensable requisites. Regarding endowments or qualifications, the loss of these qualifications, such as citizenship, is a ground for termination. Besides citizenship, other qualifications are prescribed by the Constitution and are generally exclusive unless there is a specific provision. 

Laws that create government bodies also have qualifications, but these are to be in line with the purpose of their offices under these particular laws. The qualifications, however, are not too stringent to fit a particular person because it would deprive the appointing power of the discretion needed to appoint a suitable person to the post.

Disqualifications are also provided for by the Constitution and laws. We will take up the general  and  specific disqualifications under the Constitution here. General and specific qualifications of other offices will be taken up in other posts.

General Disqualifications

1.) Candidates who lose an election can't be appointed to any government office within 1 year after that particular election.

2.) Elected officials aren't eligible for appointment to any public office during their term. If they are appointed, they have to leave their elected offices (doctrine of incompatible offices.)

3.) Appointed officials can't hold any other government office unless allowed by law or the primary functions of his position (ex. the Secretary of Finance can be a member of the Monetary Board.) Ex officio positions are part of the official's main job, but he's not entitled to receive extra compensation for the ex officio position.

Specific Disqualifications

1.) The president, vice-president, members of the cabinet and their deputies and assistants can't hold any other office during their term unless the Constitution provides or if the position is ex officio.

2.) Senators and congressmen can't hold any other government office, including GOCCs (Government-Owned or Controlled Corporations) during their terms. If they do, they lose their seats in congress or the Senate. They also can't be appointed to any office created during their term or have its emoluments (benefits and salaries) increased during that same term.

3.) SC and CA justices and judges of the lower courts can't be appointed to agencies that perform quasi-judicial or administrative functions.

4.) Members of the constitutional commissions (Comelec, COA and CSC) can't hold any other office during their term. That also includes the Ombudsman and his deputies.

5.) The Ombudsman and his deputies are not qualified to run for any office in the election that comes immediately after they finished their term.

6.) The Ombudsman, his deputies and members of the constitutional commissions must not have run for office in the election that came immediately before their appointment.

7.) The Ombudsman, his deputies and members of the constitutional commissions can't be reappointed after finishing their 7-year term.

8.) The spouse of the president, as well as his relatives up to the 4th civil degree can't be appointed as members of the cabinet, the constitutional commissions, the Ombudsman, or as chairmen or heads of bureaus and offices -including GOCCs.

Tax Quarters

Paying of of a year's income tax is preferably done in quarters, though it may be done in a single payment. There are two (2) kinds of taxable years: Calendar and Fiscal. A calendar year is the year we are all familiar with. It starts from January 1 and ends on December 31. A fiscal year has a different date for starting and beginning.

Corporations are required to file their income tax returns on a quarterly basis. If the corporation chooses the Calendar Year, it must file its Quarterly Income Tax Returns in the following order:

1st return: on or before May 30

2nd return: on or before August 29

3rd return: on or before November 29

Final Adjustment Return: on or before April 15 of the next year.

If the corporation chooses the fiscal year, another date is set for the beginning of the first quarter. For fiscal years, the rule is that the 1st, 2nd and 3rd quarterly income tax returns are filed within 60 days from the end of the quarter. The Final Adjustment Return is filed on the 15th day of the 4th month after the end of the taxable year.

Remember that a quarter is three (3) months. Therefore, after the quarter ends the corporation has 60 days to pay its income tax for that particular quarter. Therefore if a corporation, for example, chooses February 1 as the beginning of its fiscal year it must file its returns on the following dates:

June 29 -1st return

September 29 -2nd return

December 30 -3rd return

May 15 -Final Adjustment Return

The incomes and expenses in each return are computed on a cumulative basis from the first to the final return for corporate income taxes. All income and expenses for the taxable year must be included in the Final Adjustment Return. If there is an excess of payment for a quarter, the taxpayer will not pay any tax for that quarter. If there is an excess in the Final Adjustment Return, however, the taxpayer can either have the excess refunded to him or credited to his taxes for the next succeeding quarter. This must be indicated in the tax return.

The Final Adjustment Return is crucial. It is where the necessary adjustments for the taxpayer's income taxes are made (which is why it's called "adjustment.")

The Intellectual Property Office

The IPO is the government office responsible for the registration and licensing of patents and trademarks. It does not handle copyrights, however.

It is headed by a Director General, who is assisted by two (2) deputies. Beneath them are six (6) bureaus: Patents; Trademarks; Legal Affairs; MIS and EDP; Admin, Financial and Personnel Services; and, Documentation, Information and Technology Transfer.

The Director General manages all the IPO's functions and has exclusive appellate jurisdiction over decisions of the directors of Legal Affairs, Patents, Trademarks and DITT. This means that a case decided in any of these bureaus must be appealed to the Director General (you' can't go to the regular courts -they'll dismiss your case.) If a case from the Legal Affairs, Patents or Trademarks gets and unfavorable ruling from the Director General, you have to appeal to the Court of Appeals under Rule 43 of the Rules of Court within fifteen (15) days after you received the decision. If the Court of Appeals' decision isn't favorable, you have to go to the Supreme Court under Rule 45 Certiorari of the Rules of Court. Again, you have 15 days after you received the Court of Appeals' decision to go to the Supreme Court.

Appealed decisions from the DITT are further appealed from the Director General to the Secretary of Trade and Industry. The same thing happens in case of license disputes. You can't appeal a license dispute to the courts. It must go to the IPO Director General.

The Legal Affairs Bureau has the following powers:

1.) Deciding cases on opposition to the application for registration of marks; cancellation of trademarks; cancellation of patents, utility models and industrial designs; and, compulsory licensing of patents. Regarding cancellation of patents, utility models and industrial designs, highly technical matters require investigation by the director of Legal Affairs and two (2) experts.

2.) Hold original jurisdiction in administrative cases involving the violation of rights in intellectual property law, so long as the damages claimed are at least Php 200,000. Note: original jurisdiction and exclusive original jurisdiction aren't the same. "Original" means the case starts in that office, but can also be taken up in court. "Exclusive original" means only that office can take the case and starting it in a court won't do. The Legal Affairs Bureau can also use provisional remedies, like contempt.

3.) Impose the following penalties:

a.) Cease and Desist Order

b.) Accept voluntary assurance of imposed compliance or discontinuance

c.) Condemnation or seizure of the products involved in the offense

d.) Forfeit the materials and real and personal property involved in the offense

e.) Fine of Php 5,000 to 150,000 plus up to Php 1,000 for every day of continued violation

f.) Assessment of damages

g.) Censure

h.) Withholding, cancellation or suspension (up to 1 year) of permits, authorities or registrations granted by the IPO

i.) Other related penalties and sanctions.

The Best Evidence Rule

This is a rule that is as misunderstood as it is misused. The Best Evidence Rule is the lowest in the priority of evidence. Contrary to what its abusers say, it can only be used as a last resort and applies only to documents and their contents. Also, the rule WON'T apply to xerox copies (there's a case on that, CIR vs. Hantex 454 SCRA 301) if the original can't be found. Basically the Best Evidence Rule is about using a document to prove another document. It can only be used to prevent fraud as well as mistakes in interpretation.

The Best Evidence Rule can only be used when an original document has either been lost or destroyed without the fault of the person offering it, is in the hands of the other party in the case, consists of a lot of materials that can be examined only after a long (long!) period of time, or if it is a public document in the hands of a government person/office.

For the BIR, the only valid way to use the rule is to make inquiries with other people and businesses that the taxpayer did business with. The only times it can do this is if the taxpayer submits a fake tax return or if the return isn't submitted within the time prescribed by law.

Remember this: even if you're on the correct side in a trial, you could lose if you don't object when the other side uses the Best Evidence Rule. If you don't object if the other side shows a xerox copy, you could lose a case.