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G.R. No. 143867 August 22, 2001PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, INC.,petitioner,vs.CITY OF DAVAO and ADELAIDA B. BARCELONA, in her capacity as the City Treasurer of Davao,respondents.

MENDOZA,J.:This is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure of the resolution, 1 dated June 23, 2000, of the Regional Trial Court, Branch 13, Davao City, affirming the tax assessment of petitioner and the denial of its claim for tax refund by the City Treasurer of Davao.

The facts are as follows:

On January 1999, petitioner Philippine Long Distance Telephone Co., Inc. (PLDT) applied for a Mayor's Permit to operate its Davao Metro Exchange. Respondent City of Davao withheld action on the application pending payment by petitioner of the local franchise tax in the amount of P3,681,985.72 for the first to the fourth quarter of 1999. 2 In a letter dated May 31, 1999, 3 petitioner protested the assessment of the local franchise tax and requested a refund of the franchise tax paid by it for the year 1997 and the first to the third quarters of 1998. Petitioner contended that it was exempt from the payment of franchise tax based on an opinion of the Bureau of Local Government Finance (BLGF), dated June 2, 1998, which reads as follows:

PLDT: Section 12 of RA 7082 provides as follows:

"SECTION 12. The grantee, its successors or assigns shall be liable to pay the same taxes on their real estate, buildings, and personal property, exclusive of this franchise, as other persons or corporations are now or hereafter may be required by law to pay. In addition thereto, the grantee, its successors or assigns shall pay a franchise tax equivalent to three percent (3%) of all gross receipts of the telephone or other telecommunications businesses transacted under this franchise by the grantee, its successors or assigns, and the said percentage shall be in lieu of all taxes on this franchise or earnings thereof . . ."

It appears that RA 7082 further amending Act No. 3436 which granted to PLDT a franchise to install, operate and maintain a telephone system throughout the Philippine Islands was approved on August 3, 1991. Section 12 of said franchise, likewise, contains the "in lieu of all taxes" proviso.

In this connection, Section 23 of RA 7925, quoted hereunder, which was approved on March 1, 1995, provides for the equality of treatment in the telecommunications industry:

"SECTION 23. Equality of Treatment in the Telecommunications Industry. Any advantage, favor, privilege, exemption, or immunity granted under existing franchises, or may hereafter be granted, shallipso facto become part of previously granted telecommunications franchiseand shall be accorded immediately and unconditionally to the grantees of such franchises:Provided,however, That the foregoing shall neither apply to nor affect provisions of telecommunications franchises concerning territory covered by the franchise, the life span of the franchise, or the type of service authorized by the franchise." (Italics supplied.)

On the basis of the aforequoted Section 23 of RA 7925, PLDT as a telecommunications franchise holder becomes automatically covered by the tax exemption provisions of RA 7925, which took effect on March 16, 1995.

Accordingly, PLDT shall be exempt from the payment of franchise and business taxes imposable by LGUs under Sections 137 and 143 (sic), respectively, of the LGC, upon the effectivity of RA 7925 on March 16, 1995. However, PLDT shall be liable to pay the franchise and business taxes on its gross receipts realized from January 1, 1992 up to March 15, 1995, during which period PLDT was not enjoying the "most favored clause" proviso of RA 7025 (sic).4In a letter dated September 27, 1999, respondent Adelaida B. Barcelona, City Treasurer of Davao, denied the protest and claim for tax refund of petitioner,5citing the legal opinion of the City Legal Officer of Davao and Art. 10, 1 of Ordinance No. 230, Series of 1991, as amended by Ordinance No. 519, Series of 1992, which provides:

Notwithstanding any exemption granted by any law or other special law, there is hereby imposed a tax on businesses enjoying a franchise, at a rate of Seventy-five percent (75%) of one percent (1%) of the gross annual receipts for the preceding calendar year based on the income or receipts realized within the territorial jurisdiction of Davao City.6Petitioner received respondent City Treasurer's order of denial on October 1, 1999. On November 3, 1999, it filed a petition in the Regional Trial Court of Davao seeking a reversal of respondent City Treasurer's denial of petitioner's protest and the refund of the franchise tax paid by it for the year 1998 in the amount of P2,580,829.23. The petition was filed pursuant to 195 and 196 of the Local Government Code (R.A. No. 7160). No claim for refund of franchise taxes paid in 1997 was made as the same had already prescribed under 196 of the LGC, which provides that claims for the refund of taxes paid under it must be made within two (2) years from the date of payment of such taxes.7The trial court denied petitioner's appeal and affirmed the City Treasurer's decision. It ruled that the LGC withdrew all tax exemptions previously enjoyed by all persons and authorized local government units to impose a tax on businesses enjoying a franchise notwithstanding the grant of tax exemption to them. The trial court likewise denied petitioner's claim for exemption under R.A. No. 7925 for the following reasons: (1) it is clear from the wording of 193 of the Local Government Code that Congress did not intend to exempt any franchise holder from the payment of local franchise and business taxes; (2) the opinion of the Executive Director of the Bureau of Local Government Finance to the contrary is not binding on respondents; and (3) petitioner failed to present any proof that Globe and Smart were enjoying local franchise and business tax exemptions.

Hence, this petition for review based on the following grounds:

I. THE LOWER COURT ERRED IN APPLYING SECTION 137 OF THE LOCAL GOVERNMENT CODE, WHICH ALLOWS A CITY TO IMPOSE A FRANCHISE TAX, AND SECTION 193 THEREOF, WHICH PROVIDES FOR WITHDRAWAL OF TAX EXEMPTION PRIVILEGES.

II. THE LOWER COURT ERRED IN NOT HOLDING THAT UNDER PETITIONER'S FRANCHISE, AS IMPLICITLY AMENDED AND EXPANDED BY SECTION 23 OF REPUBLIC ACT NO. 7925 (PUBLIC TELECOMMUNICATIONS POLICY ACT), TAKING INTO ACCOUNT THE FRANCHISES OF GLOBE TELECOM, INC. AND SMART COMMUNICATIONS, INC., WHICH WERE ENACTED SUBSEQUENT TO THE LOCAL GOVERNMENT CODE, NO FRANCHISE AND BUSINESS TAXES MAY BE IMPOSED ON PETITIONER BY RESPONDENT CITY.

III. THE LOWER COURT ERRED IN NOT GIVING WEIGHT TO THE RULING OF THE BUREAU OF LOCAL GOVERNMENT FINANCE THAT PETITIONER IS EXEMPT FROM THE PAYMENT OF FRANCHISE AND BUSINESS TAXES, AMONG OTHERS, IMPOSABLE BY LOCAL GOVERNMENT UNITS UNDER THE LOCAL GOVERNMENT CODE.

First. The LGC, which took effect on January 1, 1992, provides:

SECTION 137. Franchise Tax. Notwithstanding any exemption granted by any law or other special law, the province may impose a tax on businesses enjoying a franchise, at a rate not exceeding fifty percent (50%) of one percent (1%) of the gross annual receipts for the preceding calendar year based on the incoming receipt, or realized, within its territorial jurisdiction.

In the case of a newly started business, the tax shall not exceed one-twentieth (1/20) of one percent (1%) of the capital investment. In the succeeding calendar year, regardless of when the business started to operate, the tax shall be based on the gross receipts for the preceding calendar year, or any fraction thereof, as provided herein.8SECTION 193. Withdrawal of Tax Exemption Privileges. Unless otherwise provided in this Code, tax exemptions or incentives granted to, or presently enjoyed by all persons, whether natural or juridical, including government-owned or -controlled corporations, except local water districts, cooperatives duly registered under R.A. 6938, non-stock and non-profit hospitals and educational institutions, are hereby withdrawn upon the effectivity of this Code.

The trial court held that, under these provisions, all exemptions granted to all persons, whether natural and juridical, including those which in the future might be granted, are withdrawn unless the law granting the exemption expressly states that the exemption also applies to local taxes. We disagree. Sec. 137 does not state that it covers future exemptions. InPhilippine Airlines, Inc. v. Edu,9where a provision of the Tax Code enacted on June 27, 1968 (R.A. 5431) withdrew the exemption enjoyed by PAL, it was held that a subsequent amendment of PAL's franchise, exempting it from all other taxes except that imposed by its franchise, again entitled PAL to exemption from the date of the enactment of such amendment. The Tax Code provision withdrawing the tax exemption was not construed as prohibiting future grants of exemptions from all taxes.

Indeed, the grant of taxing powers to local government units under the Constitution and the LGC does not affect the power of Congress to grant exemptions to certain persons, pursuant to a declared national policy. The legal effect of the constitutional grant to local governments simply means that in interpreting statutory provisions on municipal taxing powers, doubts must be resolved in favor of municipal corporations.10The question, therefore, is whether, after the withdrawal of its exemption by virtue of 137 of the LGC, petitioner has again become entitled to exemption from local franchise tax. Petitioner answers in the affirmative and points to 23 of R.A. No. 7925, in relation to the franchises of Globe Telecom (Globe) and Smart Communications, Inc. (Smart), which allegedly grant the latter exemption from local franchise taxes.

To begin with, tax exemptions are highly disfavored. The reason for this was explained by this Court inAsiatic Petroleum Co. v. Llanes,11in which it was held:

. . . Exemptions from taxation are highly disfavored, so much so that they may almost be said to be odious to the law. He who claims an exemption must be able to point to some positive provision of law creating the right. . . As was said by the Supreme Court of Tennessee in Memphis vs. U. & P. Bank (91 Tenn., 546, 550), "The right of taxation is inherent in the State. It is a prerogative essential to the perpetuity of the government; and he who claims an exemption from the common burden must justify his claim by the clearest grant of organic or statute law." Other utterances equally or more emphatic come readily to hand from the highest authority. In Ohio Life Ins. and Trust Co. vs. Debolt (16 Howard, 416), it was said by Chief Justice Taney, that the right of taxation will not be held to have been surrendered, "unless the intention to surrender is manifested by words too plain to be mistaken." In the case of the Delaware Railroad Tax (18 Wallace, 206, 226), the Supreme Court of the United States said that the surrender, when claimed, must be shown by clear, unambiguous language, which will admit of no reasonable construction consistent with the reservation of the power. If a doubt arises as to the intent of the legislature, that doubt must be solved in favor of the State. In Erie Railway Company vs. Commonwealth of Pennsylvania (21 Wallace, 492, 499), Mr. Justice Hunt, speaking of exemptions, observed that a State cannot strip itself of the most essential power of taxation by doubtful words. "It cannot, by ambiguous language, be deprived of this highest attribute of sovereignty." In Tennessee vs. Whitworth (117 U.S., 129, 136), it was said: "In all cases of this kind the question is as to the intent of the legislature, the presumption always being against any surrender of the taxing power." In Farrington vs. Tennessee and County of Shelby (95 U.S., 679, 686), Mr. Justice Swayne said: ". . . When exemption is claimed, it must be shown indubitably to exist. At the outset, every presumption is against it. A well-founded doubt is fatal to the claim. It is only when the terms of the concession are too explicit to admit fairly of any other construction that the proposition can be supported."

The tax exemption must be expressed in the statute in clear language that leaves no doubt of the intention of the legislature to grant such exemption. And, even if it is granted, the exemption must be interpreted instrictissimi jurisagainst the taxpayer and liberally in favor of the taxing authority.12In the present case, petitioner justifies its claim of tax exemption by strained inferences. First, it cites R.A. No. 7925, otherwise known as the Public Telecommunications Policy Act of the Philippines, 23 of which reads:

SECTION 23. Equality of Treatment in the Telecommunications Industry. Any advantage, favor, privilege, exemption, or immunity granted under existing franchises, or may hereafter be granted, shall ipso facto become part of previously granted telecommunications franchises and shall be accorded immediately and unconditionally to the grantees of such franchises:Provided,however, That the foregoing shall neither apply to nor affect provisions of telecommunications franchises concerning territory covered by the franchise, the life span of the franchise, or the type of service authorized by the franchise.

Petitioner then claims that Smart and Globe enjoy exemption from the payment of the franchise tax by virtue of their legislative franchises per opinion of the Bureau of Local Government Finance of the Department of Finance. Finally, it argues that because Smart and Globe are exempt from the franchise tax, it follows that it must likewise be exempt from the tax being collected by the City of Davao because the grant of tax exemption to Smart and Globeipso factoextended the same exemption to it.

The acceptance of petitioner's theory would result in absurd consequences. To illustrate: In its franchise, Globe is required to pay a franchise tax of only one and one-half percentum (1%) of all gross receipts from its transactions while Smart is required to pay a tax of three percent (3%) on all gross receipts from business transacted. Petitioner's theory would require that, to level the playing field, any "advantage, favor, privilege, exemption, or immunity" granted to Globe must be extended to all telecommunications companies, including Smart. If, later, Congress again grants a franchise to another telecommunications company imposing, say, one percent (1%) franchise tax, then all other telecommunications franchises will have to be adjusted to "level the playing field" so to speak. This could not have been the intent of Congress in enacting 23 of Rep. Act 7925. Petitioner's theory will leave the Government with the burden of having to keep track of all granted telecommunications franchises, lest some companies be treated unequally. It is different if Congress enacts a law specifically granting uniform advantages, favor, privilege, exemption, or immunity to all telecommunications entities.

The fact is that the term "exemption" in 23 is too general. A cardinal rule in statutory construction is that legislative intent must be ascertained from a consideration of the statute as a whole and not merely of a particular provision. For, taken in the abstract, a word or phrase might easily convey a meaning which is different from the one actually intended. A general provision may actually have a limited application if read together with other provisions.13Hence, a consideration of the law itself in its entirety and the proceedings of both Houses of Congress is in order.14Art. I of Rep. Act No. 7925 contains the general provisions, stating that the Act shall be known as the Public Telecommunications Policy Act of the Philippines, and a definition of terms.15Art. II provides for its policies and objectives, which is to foster the improvement and expansion of telecommunications services in the country through: (1) the construction of telecommunications infrastructure and interconnection facilities, having in mind the efficient use of the radio frequency spectrum and extension of basic services to areas not yet served; (2) fair, just, and reasonable rates and tariff charges; (3) stable, transparent, and fair administrative processes; (4) reliance on private enterprise for direct provision of telecommunications services; (5) dispersal of ownership of telecommunications entities in compliance with the constitutional mandate to democratize the ownership of public utilities; (6) encouragement of the establishment of interconnection with other countries to provide access to international communications highways and development of a competitive export-oriented domestic telecommunications manufacturing industry; and (7) development of human resources skills and capabilities to sustain the growth and development of telecommunications.16Art. III provides for its administration. The operational and administrative functions are delegated to the National Telecommunications Commission (NTC), while policy-making, research, and negotiations in international telecommunications matters are left with the Department of Transportation and Communications.17Art. IV classifies the categories of telecommunications entities as: Local Exchange Operator, Inter-Exchange Carrier, International Carrier, Value-Added Service Provider, Mobile Radio Services, and Radio Paging Services.18Art. V provides for the use of other services and facilities, such as customer premises equipment, which may be used within the premises of telecommunications subscribers subject only to the requirement that it is type-approved by the NTC, and radio frequency spectrum, the assignment of which shall be subject to periodic review.19Art. VI, entitled Franchise, Rates and Revenue Determination, provides for the requirement to obtain a franchise from Congress and a Certificate of Public Convenience and Necessity from the NTC before a telecommunications entity can begin its operations. It also provides for the NTC's residual power to regulate the rates or tariffs when ruinous competition results or when a monopoly or a cartel or combination in restraint of free competition exists and the rates or tariffs are distorted or unable to function freely and the public is adversely affected. There is also a provision relating to revenue sharing arrangements between inter-connecting carriers.20Art. VII provides for the rights of telecommunications users.21Art. VIII, entitled Telecommunications Development, where 23 is found, provides for public ownership of telecommunications entities, privatization of existing facilities, and the equality of treatment provision.22Art. IX contains the Final Provisions.23R.A. No. 7925 is thus a legislative enactment designed to set the national policy on telecommunications and provide the structures to implement it to keep up with the technological advances in the industry and the needs of the public. The thrust of the law is to promote gradually the deregulation of the entry, pricing, and operations of all public telecommunications entities and thus promote a level playing field in the telecommunications industry.24There is nothing in the language of 23 nor in the proceedings of both the House of Representatives and the Senate in enacting R.A. No. 7925 which shows that it contemplates the grant of tax exemptions to all telecommunications entities, including those whose exemptions had been withdrawn by the LGC.

What this Court said inAsiatic Petroleum Co. v. Llanes25appliesmutatis mutandisto this case: "When exemption is claimed, it must be shown indubitably to exist. At the outset, every presumption is against it. A well-founded doubt is fatal to the claim. It is only when the terms of the concession are too explicit to admit fairly of any other construction that the proposition can be supported." In this case, the word "exemption" in 23 of R.A. No. 7925 could contemplate exemption from certain regulatory or reporting requirements, bearing in mind the policy of the law. It is noteworthy that, in holding Smart and Globe exempt from local taxes, the BLGF did not base its opinion on 23 but on the fact that the franchises granted to them after the effectivity of the LGC exempted them from the payment of local franchise and business taxes.

Second. In the case of petitioner, the BLGF opined that 23 of R.A. No. 7925 amended the franchise of petitioner and in effect restored its exemptions from local taxes. Petitioner contends that courts should not set aside conclusions reached by the BLGF because its function is precisely the study of local tax problems and it has necessarily developed an expertise on the subject.

To be sure, the BLGF is not an administrative agency whose findings on questions of fact are given weight and deference in the courts. The authorities cited by petitioner pertain to the Court of Tax Appeals,26a highly specialized court which performs judicial functions as it was created for the review of tax cases.27In contrast, the BLGF was created merely to provide consultative services and technical assistance to local governments and the general public on local taxation, real property assessment, and other related matters, among others.28The question raised by petitioner is a legal question, to wit, the interpretation of 23 of R.A. No. 7925. There is, therefore, no basis for claiming expertise for the BLGF that administrative agencies are said to possess in their respective fields.

Petitioner likewise argues that the BLGF enjoys the presumption of regularity in the performance of its duty. It does enjoy this presumption, but this has nothing to do with the question in this case. This case does not concern the regularity of performance of the BLGF in the exercise of its duties, but the correctness of its interpretation of a provision of law.

In sum, it does not appear that, in approving 23 of R.A. No. 7925, Congress intended it to operate as a blanket tax exemption to all telecommunications entities. Applying the rule of strict construction of laws granting tax exemptions and the rule that doubts should be resolved in favor of municipal corporations in interpreting statutory provisions on municipal taxing powers, we hold that 23 of R.A. No. 7925 cannot be considered as having amended petitioner's franchise so as to entitle it to exemption from the imposition of local franchise taxes. Consequently, we hold that petitioner is liable to pay local franchise taxes in the amount of P3,681,985.72 for the period covering the first to the fourth quarter of 1999 and that it is not entitled to a refund of taxes paid by it for the period covering the first to the third quarter of 1998.

WHEREFORE, the petition for review on certiorari is DENIED and the decision of the Regional Trial Court, Branch 13, Davao City is AFFIRMED.

__________________________________________________________________________________________________[G.R. No. 143596. December 11, 2003]

JUDGE TOMAS C. LEYNES, petitioner, vs. THE COMMISSION ON AUDIT (COA), HON. GREGORIA S. ONG, DIRECTOR, COMMISSION ON AUDIT and HON. SALVACION DALISAY, PROVINCIAL AUDITOR, respondents.

D E C I S I O N

CORONA, J.:

Before us is a petition for certiorari under Rule 65 in relation to Section 2, Rule 64 of the Rules of Court, seeking to reverse and set aside the decision[1] dated September 14, 1999 of the Commission on Audit (COA), affirming the resolution of COA Regional Director Gregoria S. Ong dated March 29, 1994 which in turn affirmed the opinion dated October 19, 1993 of the Provincial Auditor of Oriental Mindoro, Salvacion M. Dalisay. All three denied the grant of P1,600 monthly allowance to petitioner Judge Tomas C. Leynes by the Municipality of Naujan, Oriental Mindoro.

FACTUAL ANTECEDENTS

Petitioner Judge Tomas C. Leynes who, at present, is the presiding judge of the Regional Trial Court of Calapan City, Oriental Mindoro, Branch 40 was formerly assigned to the Municipality of Naujan, Oriental Mindoro as the sole presiding judge of the Municipal Trial Court thereof. As such, his salary and representation and transportation allowance (RATA) were drawn from the budget of the Supreme Court. In addition, petitioner received a monthly allowance of P944 from the local funds[2] of the Municipality of Naujan starting 1984.[3]

On March 15, 1993, the Sangguniang Bayan of Naujan, through Resolution No. 057, sought the opinion of the Provincial Auditor and the Provincial Budget Officer regarding any budgetary limitation on the grant of a monthly allowance by the municipality to petitioner judge. On May 7, 1993, the Sangguniang Bayan unanimously approved Resolution No. 101 increasing petitioner judges monthly allowance from P944 to P1,600 (an increase of P656) starting May 1993.[4] By virtue of said resolution, the municipal government (the Municipal Mayor and the Sangguniang Bayan) approved a supplemental budget which was likewise approved by the Sangguniang Panlalawigan and the Office of Provincial Budget and Management of Oriental Mindoro. In 1994, the Municipal Government of Naujan again provided for petitioner judges P1,600 monthly allowance in its annual budget which was again approved by the Sangguniang Panlalawigan and the Office of Provincial Budget and Management of Oriental Mindoro.

On February 17, 1994, Provincial Auditor Salvacion M. Dalisay sent a letter to the Municipal Mayor and the Sangguniang Bayan of Naujan directing them to stop the payment of the P1,600 monthly allowance or RATA to petitioner judge and to require the immediate refund of the amounts previously paid to the latter. She opined that the Municipality of Naujan could not grant RATA to petitioner judge in addition to the RATA the latter was already receiving from the Supreme Court. Her directive was based on the following:

Section 36, RA No. 7645, General Appropriations Act of 1993

Representation and Transportation Allowances. The following officials and those of equivalent rank as may be determined by the Department of Budget and Management (DBM) while in the actual performance of their respective functions are hereby granted monthly commutable representation and transportation allowances payable from the programmed appropriations provided for their respective offices, not exceeding the rates indicated below . . .

National Compensation Circular No. 67 dated January 1, 1992, of the Department of Budget and Management

Subject: Representation and Transportation Allowances of National Government Officials and Employees

4. Funding Source: In all cases, commutable and reimbursable RATA shall be paid from the amount appropriated for the purpose and other personal services savings of the agency or project from where the officials and employees covered under this Circular draw their salaries. No one shall be allowed to collect RATA from more than one source.[6] (emphasis supplied)

Petitioner judge appealed to COA Regional Director Gregoria S. Ong who, however, upheld the opinion of Provincial Auditor Dalisay and who added that Resolution No. 101, Series of 1993 of the Sangguniang Bayan of Naujan failed to comply with Section 3 of Local Budget Circular No. 53 dated September 1, 1993 outlining the conditions for the grant of allowances to judges and other national officials or employees by the local government units (LGUs). Section 3 of the said budget circular provides that:

Sec. 3 Allowances. LGUs may grant allowances/additional compensation to the national government officials/employees assigned to their locality at rates authorized by law, rules and regulations and subject to the following preconditions:

a. That the annual income or finances of the municipality, city or province as certified by the Accountant concerned will allow the grant of the allowances/additional compensation without exceeding the general limitations for personal services under Section 325 of RA 7160;

b. That the budgetary requirements under Section 324 of RA 7160 including the full requirement of RA 6758 have been satisfied and provided fully in the budget as certified by the Budget Officer and COA representative in the LGU concerned;

c. That the LGU has fully implemented the devolution of personnel/functions in accordance with the provisions of RA 7160;

d. That the LGU has already created mandatory positions prescribed in RA 7160; and

e. That similar allowances/additional compensation are not granted by the national government to the officials/employees assigned to the LGU.[7]

Petitioner judge appealed the unfavorable resolution of the Regional Director to the Commission on Audit. In the meantime, a disallowance of the payment of the P1,600 monthly allowance to petitioner was issued. Thus he received his P1,600 monthly allowance from the Municipality of Naujan only for the period May 1993 to January 1994.

On September 14, 1999, the COA issued its decision affirming the resolution of Regional Director Gregoria S. Ong:

The main issue . . . is whether or not the Municipality of Naujan, Oriental Mindoro can validly provide RATA to its Municipal Judge, in addition to that provided by the Supreme Court.

Generally, the grant of (RATA) [sic] to qualified national government officials and employees pursuant to Section 36 of R.A. 7645 [General Appropriations Act of 1993] and NCC No. 67 dated 01 January 1992 is subject to the following conditions to wit:

1. Payable from the programmed /appropriated amount and others from personal services savings of the respective offices where the officials or employees draw their salaries;

2. Not exceeding the rates prescribed by the Annual General Appropriations Act;

3. Officials /employees on detail with other offices or assigned to serve other offices or agencies shall be paid from their parent agencies;

4. No one shall be allowed to collect RATA from more than one source.

On the other hand, the municipal government may provide additional allowances and other benefits to judges and other national government officials or employees assigned or stationed in the municipality, provided, that the finances of the municipality allow the grant thereof pursuant to Section 447, Par. 1 (xi), R.A. 7160, and provided further, that similar allowance/additional compensation are not granted by the national government to the official/employee assigned to the local government unit as provided under Section 3(e) of Local Budget Circular No. 53, dated 01 September 1993.

The conflicting provisions of Section 447, Par. (1) (xi) of the Local Government Code of 1991 and Section 36 of the General Appropriations Act of 1993 [RA 7645] have been harmonized by the Local Budget Circular No. 53 dated 01 September 1993, issued by the Department of Budget and Management pursuant to its powers under Section 25 and Section 327 of the Local Government Code. The said circular must be adhered to by the local government units particularly Section 3 thereof which provides the implementing guidelines of Section 447, Par. (1) (xi) of the Local Government Code of 1991 in the grant of allowances to national government officials/employees assigned or stationed in their respective local government units.

Consequently, the subject SB Resolution No. 101 dated 11 May 1993 of the Sangguniang Bayan of Naujan, Oriental Mindoro, having failed to comply with the inherent precondition as defined in Section 3 (e). . . is null and void. Furthermore, the Honorable Judge Tomas C. Leynes, being a national government official is prohibited to receive additional RATA from the local government fund pursuant to Section 36 of the General Appropriations Act (R.A. 7645 for 1993) and National Compensation Circular No. 67 dated 1 January 1992.[8] (emphasis ours)

ASSIGNMENTS OF ERROR

Petitioner judge filed a motion for reconsideration of the above decision but it was denied by the Commission in a resolution dated May 30, 2000. Aggrieved, petitioner filed the instant petition, raising the following assignments of error for our consideration:

I. WHETHER OR NOT RESOLUTION NO. 1O1, SERIES OF 1993 OF NAUJAN, ORIENTAL MINDORO, WHICH GRANTED ADDITIONAL ALLOWANCE TO THE MUNICIPAL TRIAL JUDGE OF NAUJAN, ORIENTAL MINDORO AND INCREASING HIS CURRENT REPRESENTATION AND TRAVELLING ALLOWANCE (RATA) TO AN AMOUNT EQUIVALENT TO THAT RECEIVED MONTHLY BY SANGGUNIANG MEMBERS IN PESOS: ONE THOUSAND SIX HUNDRED (P1,600.00) EFFECTIVE 1993, IS VALID.

II. WHETHER OR NOT THE POWER OF MUNICIPAL GOVERNMENTS TO GRANT ADDITIONAL ALLOWANCES AND OTHER BENEFITS TO NATIONAL GOVERNMENT EMPLOYEES STATIONED IN THEIR MUNICIPALITY IS VERY EXPLICIT AND UNEQUIVOCAL UNDER THE LOCAL GOVERNMENT CODE OF 1991 PARTICULARLY SECTION 447 IN RELATION TO SECTIONS 17 AND 22 THEREOF.

III. WHETHER OR NOT THE DEPARTMENT OF BUDGET AND MANAGEMENT (DBM) CAN, BY THE ISSUANCE OF BUDGET CIRCULARS, RESTRICT A MUNICIPAL GOVERNMENT FROM EXERCISING ITS GIVEN LEGISLATIVE POWERS OF PROVIDING ADDITIONAL ALLOWANCES AND OTHER BENEFITS TO NATIONAL EMPLOYEES STATIONED OR ASSIGNED TO THEIR MUNICIPALITY FOR AS LONG AS THEIR FINANCES SO ALLOW.

IV. WHETHER OR NOT THE LOCAL GOVERNMENT CODE OF 1991 PARTICULARLY SECTION 447 (a) (1) (xi) WAS EXPRESSLY OR IMPLIEDLY REPEALED OR MODIFIED BY REPUBLIC ACT 7645 AND THE GENERAL APPROPRIATIONS ACT OF 1993.

V. WHETHER OR NOT PETITIONER WAS ENTITLED TO RECEIVE THE ADDITIONAL ALLOWANCES GRANTED TO HIM BY THE MUNICIPALITY OF NAUJAN, ORIENTAL MINDORO BY VIRTUE OF ITS RESOLUTION NO. 101, SERIES OF 1993.

POSITION OF COA

Respondent Commission on Audit opposes the grant by the Municipality of Naujan of the P1,600 monthly allowance to petitioner Judge Leynes for the reason that the municipality could not grant RATA to judges in addition to the RATA already received from the Supreme Court.[9] Respondent bases its contention on the following:

1. National Compensation Circular No. 67 (hereafter NCC No. 67) dated January 1, 1992 of the Department of Budget and Management (DBM) which provides that (a) the RATA of national officials and employees shall be payable from the programmed appropriations or personal services savings of the agency where such officials or employees draw their salary and (b) no one shall be allowed to collect RATA from more than one source;

2. the General Appropriations Act of 1993 (RA 7645) which provided that the RATA of national officials shall be payable from the programmed appropriations of their respective offices and

3. Local Budget Circular No. 53 (hereafter LBC No. 53) dated September 1, 1993 of the DBM which prohibits local government units from granting allowances to national government officials or employees stationed in their localities when such allowances are also granted by the national government or are similar to the allowances granted by the national government to such officials or employees.[10]

POSITION OF PETITIONER

Petitioner judge, on the other hand, asserts that the municipality is expressly and unequivocally empowered by RA 7160 (the Local Government Code of 1991) to enact appropriation ordinances granting allowances and other benefits to judges stationed in its territory. Section 447(a)(1)(xi) of the Local Government Code of 1991 imposes only one condition, that is, when the finances of the municipal government allow. The Code does not impose any other restrictions in the exercise of such power by the municipality. Petitioner also asserts that the DBM cannot amend or modify a substantive law like the Local Government Code of 1991 through mere budget circulars. Petitioner emphasizes that budget circulars must conform to, not modify or amend, the provisions of the law it seeks to implement.[11]

HISTORY OF GRANT OF ALLOWANCES TO JUDGES

The power of local government units (LGUs) to grant allowances to judges stationed in their respective territories was originally provided by Letter of Instruction No. 1418 dated July 18, 1984 (hereafter LOI No. 1418):

WHEREAS, the State is cognizant of the need to maintain the independence of the Judiciary;

WHEREAS, the budgetary allotment of the Judiciary constitutes only a small percentage of the national budget;

WHEREAS, present economic conditions adversely affected the livelihood of the members of the Judiciary;

WHEREAS, some local government units are ready, willing and able to pay additional allowances to Judges of various courts within their respective territorial jurisdiction;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Republic of the Philippines, do hereby direct:

1. Section 3 of Letter of Implementation No. 96 is hereby amended to read as follows:

3. The allowances provided in this letter shall be borne exclusively by the National Government. However, provincial, city and municipal governments may pay additional allowances to the members and personnel of the Judiciary assigned in their respective areas out of available local funds but not to exceed P1,500.00; Provided, that in Metropolitan Manila, the city and municipal governments therein may pay additional allowances not exceeding P3,000.00. (emphasis ours)[12]

On June 25, 1991, the DBM issued Circular No. 91-7 outlining the guidelines for the continued receipt of allowances by judges from LGUs:

Consistent with the constitutional provision on the fiscal autonomy of the judiciary and the policy of the National Government of allowing greater autonomy to local government units, judges of the Judiciary are hereby allowed to continue to receive allowances at the same rates which they have been receiving from the Local Government Units as of June 30, 1989, subject to the following guidelines:

1. That the continuance of payment of subject allowance to the recipient judge shall be entirely voluntary and non-compulsory on the part of the Local Government Units;

2. That payment of the above shall always be subject to the availability of local funds;

3. That it shall be made only in compliance with the policy of non-diminution of compensation received by the recipient judge before the implementation of the salary standardization;

4. That the subject allowance shall be given only to judges who were receiving the same as of June 30, 1989 and shall be co-terminous with the incumbent judges; and

5. That the subject allowance shall automatically terminate upon transfer of a judge from one local government unit to another local government unit. (emphasis ours)

On October 10, 1991, Congress enacted RA 7160, otherwise known as the Local Government Code of 1991.[13] The power of the LGUs to grant allowances and other benefits to judges and other national officials stationed in their respective territories was expressly provided in Sections 447(a)(1)(xi), 458(a)(1)(xi) and 468(a)(1)(xi) of the Code.

On March 15, 1994, the DBM issued Local Budget Circular No. 55 (hereafter LBC No. 55) setting out the maximum amount of allowances that LGUs may grant to judges. For provinces and cities, the amount should not exceed P1,000 and for municipalities, P700.

On December 3, 2002, we struck down the above circular in Dadole, et al. vs. COA.[14] We ruled there that the Local Government Code of 1991 clearly provided that LGUs could grant allowances to judges, subject only to the condition that the finances of the LGUs allowed it. We held that setting a uniform amount for the grant of allowances (was) an inappropriate way of enforcing said criterion. Accordingly, we declared that the DBM exceeded its power of supervision over LGUs by imposing a prohibition that did not jibe with the Local Government Code of 1991.[15]

ESTABLISHED PRINCIPLES INVOLVED

From the foregoing history of the power of LGUs to grant allowances to judges, the following principles should be noted:

1. the power of LGUs to grant allowances to judges has long been recognized (since 1984 by virtue of LOI No. 1418) and, at present, it is expressly and unequivocally provided in Sections 447, 458 and 468 of the Local Government Code of 1991;

2. the issuance of DBM Circular No. 91-7 dated June 25, 1991 and LBC No. 55 dated March 15, 1994 indicates that the national government recognizes the power of LGUs to grant such allowances to judges;

3. in Circular No. 91-7, the national government merely provides the guidelines for the continued receipt of allowances by judges from LGUs while in LBC No. 55, the national government merely tries to limit the amount of allowances LGUs may grant to judges and

4. in the recent case of Dadole, et al. vs. COA, the Court upheld the constitutionally enshrined autonomy of LGUs to grant allowances to judges in any amount deemed appropriate, depending on availability of funds, in accordance with the Local Government Code of 1991.

OUR RULING

We rule in favor of petitioner judge. Respondent COA erred in opposing the grant of the P1,600 monthly allowance by the Municipality of Naujan to petitioner Judge Leynes.

DISCUSSION OF OUR RULING

Section 447(a)(1)(xi) of RA 7160, the Local Government Code of 1991, provides:

(a) The sangguniang bayan, as the legislative body of the municipality, shall enact ordinances, approve resolutions and appropriate funds for the general welfare of the municipality and its inhabitants . . ., and shall:

(1) Approve ordinances and pass resolutions necessary for an efficient and effective municipal government, and in this connection shall:

(xi) When the finances of the municipal government allow, provide for additional allowances and other benefits to judges, prosecutors, public elementary and high school teachers, and other national government officials stationed in or assigned to the municipality; (emphasis ours)

Respondent COA, however, contends that the above section has been repealed, modified or amended by NCC No. 67 dated January 1, 1992, RA 7645 (the General Appropriations Act of 1993) and LBC No. 53 dated September 1, 1993.[16]

It is elementary in statutory construction that an administrative circular cannot supersede, abrogate, modify or nullify a statute. A statute is superior to an administrative circular, thus the latter cannot repeal or amend it.[17] In the present case, NCC No. 67, being a mere administrative circular, cannot repeal a substantive law like RA 7160.

It is also an elementary principle in statutory construction that repeal of statutes by implication is not favored, unless it is manifest that the legislature so intended. The legislature is assumed to know the existing laws on the subject and cannot be presumed to have enacted inconsistent or conflicting statutes.[18] Respondent COA alleges that Section 36 of RA 7645 (the GAA of 1993) repealed Section 447(a)(l)(xi) of RA 7160 (the LGC of 1991). A review of the two laws, however, shows that this was not so. Section 36 of RA 7645 merely provided for the different rates of RATA payable to national government officials or employees, depending on their position, and stated that these amounts were payable from the programmed appropriations of the parent agencies to which the concerned national officials or employees belonged. Furthermore, there was no other provision in RA 7645 from which a repeal of Section 447(a) (l)(xi) of RA 7160 could be implied. In the absence, therefore, of any clear repeal of Section 447(a)(l)(xi) of RA 7160, we cannot presume such intention on the part of the legislature.

Moreover, the presumption against implied repeal becomes stronger when, as in this case, one law is special and the other is general.[19] The principle is expressed in the maxim generalia specialibus non derogant, a general law does not nullify a specific or special law. The reason for this is that the legislature, in passing a law of special character, considers and makes special provisions for the particular circumstances dealt with by the special law. This being so, the legislature, by adopting a general law containing provisions repugnant to those of the special law and without making any mention of its intention to amend or modify such special law, cannot be deemed to have intended an amendment, repeal or modification of the latter.[20]

In this case, RA 7160 (the LGC of 1991) is a special law[21] which exclusively deals with local government units (LGUs), outlining their powers and functions in consonance with the constitutionally mandated policy of local autonomy. RA 7645 (the GAA of 1993), on the other hand, was a general law[22] which outlined the share in the national fund of all branches of the national government. RA 7645 therefore, being a general law, could not have, by mere implication, repealed RA 7160. Rather, RA 7160 should be taken as the exception to RA 7645 in the absence of circumstances warranting a contrary conclusion.[23]

The controversy actually centers on the seemingly sweeping provision in NCC No. 67 which states that no one shall be allowed to collect RATA from more than one source. Does this mean that judges cannot receive allowances from LGUs in addition to the RATA from the Supreme Court? For reasons that will hereinafter be discussed, we answer in the negative.

The pertinent provisions of NCC No. 67 read:

3. Rules and Regulations:

3.1.1 Payment of RATA, whether commutable or reimbursable, shall be in accordance with the rates prescribed for each of the following officials and employees and those of equivalent ranks, and the conditions enumerated under the pertinent sections of the General Provisions of the annual General Appropriations Act (GAA):

4. Funding Source:

In all cases, commutable and reimbursable RATA shall be paid from the amount appropriated for the purpose and other personal services savings of the agency or project from where the officials and employees covered under this Circular draw their salaries. No one shall be allowed to collect RATA from more than one source. (emphasis ours)

In construing NCC No. 67, we apply the principle in statutory construction that force and effect should not be narrowly given to isolated and disjoined clauses of the law but to its spirit, broadly taking all its provisions together in one rational view.[24] Because a statute is enacted as a whole and not in parts or sections, that is, one part is as important as the others, the statute should be construed and given effect as a whole. A provision or section which is unclear by itself may be clarified by reading and construing it in relation to the whole statute.[25]

Taking NCC No. 67 as a whole then, what it seeks to prevent is the dual collection of RATA by a national official from the budgets of more than one national agency. We emphasize that the other source referred to in the prohibition is another national agency. This can be gleaned from the fact that the sentence no one shall be allowed to collect RATA from more than one source (the controversial prohibition) immediately follows the sentence that RATA shall be paid from the budget of the national agency where the concerned national officials and employees draw their salaries. The fact that the other source is another national agency is supported by RA 7645 (the GAA of 1993) invoked by respondent COA itself and, in fact, by all subsequent GAAs for that matter, because the GAAs all essentially provide that (1) the RATA of national officials shall be payable from the budgets of their respective national agencies and (2) those officials on detail with other national agencies shall be paid their RATA only from the budget of their parent national agency:

Section 36, RA 7645, General Appropriations Act of 1993:

Representation and Transportation Allowances. The following officials and those of equivalent rank as may be determined by the Department of Budget and Management (DBM) while in the actual performance of their respective functions are hereby granted monthly commutable representation and transportation allowances payable from the programmed appropriations provided for their respective offices, not exceeding the rates indicated below, which shall apply to each type of allowance:

Officials on detail with other offices, including officials of the Commission of Audit assigned to serve other offices or agencies, shall be paid the allowance herein authorized from the appropriations of their parent agencies. (emphasis ours)

Clearly therefore, the prohibition in NCC No. 67 is only against the dual or multiple collection of RATA by a national official from the budgets of two or more national agencies. Stated otherwise, when a national official is on detail with another national agency, he should get his RATA only from his parent national agency and not from the other national agency he is detailed to.

Since the other source referred in the controversial prohibition is another national agency, said prohibition clearly does not apply to LGUs like the Municipality of Naujan. National agency of course refers to the different offices, bureaus and departments comprising the national government. The budgets of these departments or offices are fixed annually by Congress in the General Appropriations Act.[26] An LGU is obviously not a national agency. Its annual budget is fixed by its own legislative council (Sangguniang Bayan, Panlungsod or Panlalawigan), not by Congress. Without doubt, NCC No. 67 does not apply to LGUs.

The prohibition in NCC No. 67 is in fact an administrative tool of the DBM to prevent the much-abused practice of multiple allowances, thus standardizing the grant of RATA by national agencies. Thus, the purpose clause of NCC No. 67 reads:

This Circular is being issued to ensure uniformity and consistency of actions on claims for representation and transportation allowance (RATA) which is primarily granted by law to national government officials and employees to cover expenses incurred in the discharge or performance of their duties and responsibilities.

By no stretch of the imagination can NCC No. 67 be construed as nullifying the power of LGUs to grant allowances to judges under the Local Government Code of 1991. It was issued primarily to make the grant of RATA to national officials under the national budget uniform. In other words, it applies only to the national funds administered by the DBM, not the local funds of LGUs.

To rule against the power of LGUs to grant allowances to judges as what respondent COA would like us to do will subvert the principle of local autonomy zealously guaranteed by the Constitution.[27] The Local Government Code of 1991 was specially promulgated by Congress to ensure the autonomy of local governments as mandated by the Constitution. By upholding, in the present case, the power of LGUs to grant allowances to judges and leaving to their discretion the amount of allowances they may want to grant, depending on the availability of local funds, we ensure the genuine and meaningful local autonomy of LGUs.

We now discuss the next contention of respondent COA: that the resolution of the Sangguniang Bayan of Naujan granting the P1,600 monthly allowance to petitioner judge was null and void because it failed to comply with LBC No. 53 dated September 1, 1993:

Sec. 3 Allowances. LGUs may grant allowances/additional compensation to the national government officials/employees assigned to their locality at rates authorized by law, rules and regulations and subject to the following preconditions:

a. That the annual income or finances of the municipality, city or province as certified by the Accountant concerned will allow the grant of the allowances/additional compensation without exceeding the general limitations for personal services under Section 325 of RA 7160;

b. That the budgetary requirements under Section 324 of RA 7160 including the full requirement of RA 6758 have been satisfied and provided fully in the budget as certified by the Budget Officer and COA representative in the LGU concerned;

c. That the LGU has fully implemented the devolution of personnel/functions in accordance with the provisions of RA 7160;

d. That the LGU has already created mandatory positions prescribed in RA 7160.

e. That similar allowances/additional compensation are not granted by the national government to the officials/employees assigned to the LGU.

Though LBC No. 53 of the DBM may be considered within the ambit of the President's power of general supervision over LGUs,[28] we rule that Section 3, paragraph (e) thereof is invalid. RA 7160, the Local Government Code of 1991, clearly provides that provincial, city and municipal governments may grant allowances to judges as long as their finances allow. Section 3, paragraph (e) of LBC No. 53, by outrightly prohibiting LGUs from granting allowances to judges whenever such allowances are (1) also granted by the national government or (2) similar to the allowances granted by the national government, violates Section 447(a)(l)(xi) of the Local Government Code of 1991.[29] As already stated, a circular must conform to the law it seeks to implement and should not modify or amend it.[30]

Moreover, by prohibiting LGUs from granting allowances similar to the allowances granted by the national government, Section 3 (e) of LBC No. 53 practically prohibits LGUs from granting allowances to judges and, in effect, totally nullifies their statutory power to do so. Being unduly restrictive therefore of the statutory power of LGUs to grant allowances to judges and being violative of their autonomy guaranteed by the Constitution, Section 3, paragraph (e) of LBC No. 53 is hereby declared null and void.

Paragraphs (a) to (d) of said circular, however, are valid as they are in accordance with Sections 324[31] and 325[32] of the Local Government Code of 1991; these respectively provide for the budgetary requirements and general limitations on the use of provincial, city and municipal funds. Paragraphs (a) to (d) are proper guidelines for the condition provided in Sections 447, 458 and 468 of the Local Government Code of 1991 that LGUs may grant allowances to judges if their funds allow.[33]

Respondent COA also argues that Resolution No. 101 of the Sangguniang Bayan of Naujan failed to comply with paragraphs (a) to (d) of LBC No. 53, thus it was null and void.

The argument is misplaced.

Guidelines (a) to (d) were met when the Sangguniang Panlalawigan of Oriental Mindoro approved Resolution No. 101 of the Sangguniang Bayan of Naujan granting the P1,600 monthly allowance to petitioner judge as well as the corresponding budgets of the municipality providing for the said monthly allowance to petitioner judge. Under Section 327 of the Local Government Code of 1991, the Sangguniang Panlalawigan was specifically tasked to review the appropriation ordinances of its component municipalities to ensure compliance with Sections 324 and 325 of the Code. Considering said duty of the Sangguniang Panlalawigan, we will assume, in the absence of proof to the contrary, that the Sangguniang Panlalawigan of Oriental Mindoro performed what the law required it to do, that is, review the resolution and the corresponding budgets of the Municipality of Naujan to make sure that they complied with Sections 324 and 325 of the Code.[34] We presume the regularity of the Sangguniang Panlalawigans official act.

Moreover, it is well-settled that an ordinance must be presumed valid in the absence of evidence showing that it is not in accordance with the law.[35] Respondent COA had the burden of proving that Resolution No. 101 of the Sangguniang Bayan of Naujan did not comply with the condition provided in Section 447 of the Code, the budgetary requirements and general limitations on the use of municipal funds provided in Sections 324 and 325 of the Code and the implementing guidelines issued by the DBM, i.e., paragraphs (a) to (d), Section 3 of LBC No. 53. Respondent COA also had the burden of showing that the Sangguniang Panlalawigan of Oriental Mindoro erroneously approved said resolution despite its non-compliance with the requirements of the law. It failed to discharge such burden. On the contrary, we find that the resolution of the Municipality of Naujan granting the P1,600 monthly allowance to petitioner judge fully complied with the law. Thus, we uphold its validity.

In sum, we hereby affirm the power of the Municipality of Naujan to grant the questioned allowance to petitioner Judge Leynes in accordance with the constitutionally mandated policy of local autonomy and the provisions of the Local Government Code of 1991. We also sustain the validity of Resolution No. 101, Series of 1993, of the Sangguniang Bayan of Naujan for being in accordance with the law.

WHEREFORE, the petition is hereby GRANTED. The assailed decision dated September 14, 1999 of the Commission of Audit is hereby SET ASIDE and Section 3, paragraph (e) of LBC No. 53 is hereby declared NULL and VOID.G.R. No. 109835 November 22, 1993JMM PROMOTIONS & MANAGEMENT, INC., petitioner, vs.NATIONAL LABOR RELATIONS COMMISSION and ULPIANO L. DE LOS SANTOS, respondent.

Don P. Porciuncula for petitioner.

Eulogio Nones, Jr. for private respondent.

CRUZ, J.:The sole issue submitted in this case is the validity of the order of respondent National Labor Relations Commission dated October 30, 1992, dismissing the petitioner's appeal from a decision of the Philippine Overseas Employment Administration on the ground of failure to post the required appeal bond. 1The respondent cited the second paragraph of Article 223 of the Labor Code as amended, providing that:

In the case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission in an amount equivalent to the monetary award in the judgment appealed from.

and Rule VI, Section 6 of the new Rules of Procedure of the NLRC, as amended, reading as follows:

Sec. 6. Bond In case the decision of a Labor Arbiter involves a monetary award, an appeal by the employer shall be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission or the Supreme Court in an amount equivalent to the monetary award.

The petitioner contends that the NLRC committed grave abuse of discretion in applying these rules to decisions rendered by the POEA. It insists that the appeal bond is not necessary in the case of licensed recruiters for overseas employment because they are already required under Section 4, Rule II, Book II of the POEA Rules not only to pay a license fee of P30,000 but also to post a cash bond of P100,000 and a surety bond of P50,000, thus:

Upon approval of the application, the applicant shall pay a license fee of P30,000. It shall also post a cash bond of P100,000 and surety bond of P50,000 from a bonding company acceptable to the Administration and duly accredited by the Insurance Commission. The bonds shall answer for all valid and legal claims arising from violations of the conditions for the grant and use of the license, and/or accreditation and contracts of employment. The bonds shall likewise guarantee compliance with the provisions of the Code and its implementing rules and regulations relating to recruitment and placement, the Rules of the Administration and relevant issuances of the Department and all liabilities which the Administration may impose. The surety bonds shall include the condition that the notice to the principal is notice to the surety and that any judgment against the principal in connection with matters falling under POEA's jurisdiction shall be binding and conclusive on the surety. The surety bonds shall be co-terminus with the validity period of license. (Emphasis supplied)

In addition, the petitioner claims it has placed in escrow the sum of P200,000 with the Philippine National Bank in compliance with Section 17, Rule II, Book II of the same Rule, "to primarily answer for valid and legal claims of recruited workers as a result of recruitment violations or money claims."

Required to comment, the Solicitor General sustains the appeal bond requirement but suggest that the rules cited by the NLRC are applicable only to decisions of the Labor Arbiters and not of the POEA. Appeals from decisions of the POEA, he says, are governed by the following provisions of Rule V, Book VII of the POEA Rules:

Sec. 5. Requisites for Perfection of Appeal. The appeal shall be filed within the reglementary period as provided in Section 1 of this Rule; shall be under oath with proof of payment of the required appeal fee and the posting of a cash or surety bond as provided in Section 6 of this Rule; shall be accompanied by a memorandum of appeal which shall state the grounds relied upon and the arguments in support thereof; the relief prayed for; and a statement of the date when the appellant received the appealed decision and/or award and proof of service on the other party of such appeal.

A mere notice of appeal without complying with the other requisites aforestated shall not stop the running of the period for perfecting an appeal.

Sec. 6. Bond. In case the decision of the Administration involves a monetary award, an appeal by the employer shall be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission in an amount equivalent to the monetary award. (Emphasis supplied)

The question is, having posted the total bond of P150,000 and placed in escrow the amount of P200,000 as required by the POEA Rules, was the petitioner still required to post an appeal bond to perfect its appeal from a decision of the POEA to the NLRC?

It was.

The POEA Rules are clear. A reading thereof readily shows that in addition to the cash and surety bonds and the escrow money, an appeal bond in an amount equivalent to the monetary award is required to perfect an appeal from a decision of the POEA. Obviously, the appeal bond is intended to further insure the payment of the monetary award in favor of the employee if it is eventually affirmed on appeal to the NLRC.

It is true that the cash and surety bonds and the money placed in escrow are supposed to guarantee the payment of all valid and legal claims against the employer, but these claims are not limited to monetary awards to employees whose contracts of employment have been violated. The POEA can go against these bonds also for violations by the recruiter of the conditions of its license, the provisions of the Labor Code and its implementing rules, E.O. 247 (reorganizing POEA) and the POEA Rules, as well as the settlement of other liabilities the recruiter may incur.

As for the escrow agreement, it was presumably intended to provide for a standing fund, as it were, to be used only as a last resort and not to be reduced with the enforcement against it of every claim of recruited workers that may be adjudged against the employer. This amount may not even be enough to cover such claims and, even if it could initially, may eventually be exhausted after satisfying other subsequent claims.

As it happens, the decision sought to be appealed grants a monetary award of about P170,000 to the dismissed employee, the herein private respondent. The standby guarantees required by the POEA Rules would be depleted if this award were to be enforced not against the appeal bond but against the bonds and the escrow money, making them inadequate for the satisfaction of the other obligations the recruiter may incur.

Indeed, it is possible for the monetary award in favor of the employee to exceed the amount of P350,000, which is the sum of the bonds and escrow money required of the recruiter.

It is true that these standby guarantees are not imposed on local employers, as the petitioner observes, but there is a simple explanation for this distinction. Overseas recruiters are subject to more stringent requirement because of the special risks to which our workers abroad are subjected by their foreign employers, against whom there is usually no direct or effective recourse. The overseas recruiter is solidarily liable with a foreign employer. The bonds and the escrow money are intended to insure more care on the part of the local agent in its choice of the foreign principal to whom our overseas workers are to be sent.

It is a principle of legal hermeneutics that in interpreting a statute (or a set of rules as in this case), care should be taken that every part thereof be given effect, on the theory that it was enacted as an integrated measure and not as a hodge-podge of conflicting provisions. Ut res magis valeat quam pereat. 2 Under the petitioner's interpretation, the appeal bond required by Section 6 of the aforementioned POEA Rule should be disregarded because of the earlier bonds and escrow money it has posted. The petitioner would in effect nullify Section 6 as a superfluity but we do not see any such redundancy; on the contrary, we find that Section 6 complements Section 4 and Section 17. The rule is that a construction that would render a provision inoperative should be avoided; instead, apparently inconsistent provisions should be reconciled whenever possible as parts of a coordinated and harmonious whole.

Accordingly, we hold that in addition to the monetary obligations of the overseas recruiter prescribed in Section 4, Rule II, Book II of the POEA Rules and the escrow agreement under Section 17 of the same Rule, it is necessary to post the appeal bond required under Section 6, Rule V, Book VII of the POEA Rules, as a condition for perfecting an appeal from a decision of the POEA.

Every intendment of the law must be interpreted in favor of the working class, conformably to the mandate of the Constitution. By sustaining rather than annulling the appeal bond as a further protection to the claimant employee, this Court affirms once again its commitment to the interest of labor.

WHEREFORE, the petition is DISMISSED, with costs against the petitioner. It is so ordered.

Davide and Quiason, JJ., concur.Bellosillo, J, is on leave.

# Footnotes

1 Order issued by NLRC Commissioner Domingo H. Zapanta, Second Division, dated October 30, 1992.

2 "That the thing may rather have effect than be destroyed." Simonds v. Walker, 100 Mass. 113; National Pemberton Bank v. Lougee, 108 Mass. 373, 11 Am. Rep. 367. Charitable bequests are also governed by this maxim. Kieg v. Richardson, C.C.A. N.C., B6 F. 2d 849, 858.

Republic of the PhilippinesSUPREME COURTManila

THIRD DIVISION

G.R. No. 75222 July 18, 1991

RADIOLA-TOSHIBA PHILIPPINES, INC., through its assignee-in-insolvency VICENTE J. CUNA, petitioner, vs.THE INTERMEDIATE APPELLATE COURT, HON. LEONARDO I. CRUZ, as Judge of the Regional Trial Court of Angeles City, Branch No. LVI, EMILIO C. PATINO, as assignee-in-insolvency of CARLOS and TERESITA GATMAYTAN, SHERIFF OF ANGELES CITY, REGISTER OF DEEDS OF ANGELES CITY, SANYO MARKETING CORPORATION, S & T ENTERPRISES INC., REFRIGERATION INDUSTRIES INC., and DELTA MOTOR CORPORATION, respondents.

Quisumbing, Torres & Evangelista for petitioner.

Procopio S. Beltran, Jr. for private respondents.

BIDIN, J.:pThis is a petition for certiorari of the March 31, 1986 Decision of the then Intermediate Appellate Court * in A.C-G.R. SP No. 04160 entitled "Radiola-Toshiba Philippines, Inc. vs. Hon. Leonardo I. Cruz, et al." denying the petition for certiorari and mandamus; and its Resolution of July 1, 1986 denying the motion for reconsideration.

The antecedent facts of this case, as found by the then Intermediate Appellate Court, are as follows:

On July 2, 1980, three creditors filed a petition for the involuntary insolvency of Carlos Gatmaytan and Teresita Gatmaytan, the private respondents herein, the case docketed as Special Proceeding No. 1548 of the then Court of First Instance (now Regional Trial Court) of Pampanga and Angeles City.

On July 9, 1980, the respondent court issued an order taking cognizance of the said petition and stating inter alia that:

. . . the Court forbids the payment of any debts, and the delivery of any property owing and belonging to said respondents-debtors from other persons, or, to any other persons for the use and benefit of the same respondents-debtors and/or the transfer of any property by and for the said respondents-debtors to another, upon petitioners' putting up a bond by way of certified and reputable sureties. (Annex 1, Comment).

Counsel for the petitioners-creditors informed respondent sheriff Angeles City of the aforesaid order (Annex 2, Ibid) and on March 26, 1981, also communicated with counsel for the petitioner herein regarding same order, apprising the latter that "the personal and real property which have been levied upon and/or attached should be preserved till the final determination of the petition aforementioned." (Annex 3, Ibid).

On April 12, 1983, petitioners-creditors filed second urgent motion for issuance of insolvency order and resolution of the case, alleging among other things, that in November, 1982, they filed an urgent motion to issue insolvency order; on December 2, 1982, they presented a motion to prohibit the city sheriff of Angeles City from disposing the personal and real properties of the insolvent debtors, Carlos Gatmaytan and Teresita Gatmaytan; on January 18, 1983, they (sic) appealed in the Bulletin Today issue of even date a news item to the effect that Radiola-Toshiba Phil. Inc. has already shut down its factory, sometime in March 1983, through their representative, they caused to be investigated the real properties in the names of Carlos Gatmaytan and Teresita Gatmaytan and they were surprised to find out that some of the aforesaid properties were already transferred to Radiola-Toshiba Phil. Inc.; and that in view of such development, it is their submission that without an insolvency order and a resolution of the case which was ripe for resolution as early as March 3, 1982, the rights and interest of petitioners-creditors would be injured and jeopardized. (Annex "C").

On April 15, 1983, petitioner filed an opposition to the said motion vis-a-vis the prayer that the insolvency order (which has not been rendered yet by the court) be annotated on the transfer certificates of title already issued in its name (Annex "D").

On April 22, 1983, judgment was rendered declaring the insolvency of respondents-debtors Carlos Gatmaytan and Teresita Gatmaytan.

On April 28, 1983, petitioner filed a supplemental opposition to the same second urgent motion and motion to direct respondent sheriff to issue a final certificate of sale for the properties covered by TCT Nos. 18905 and 40430 in its favor (Annex "E").

On February 3, 1984, acting upon petitioner's motion claiming that ownership of certain real properties of the insolvents had passed to it by virtue of foreclosure proceedings conducted in Civil Case No. 35946 of the former Court of First Instance of Rizal, Branch II, Pasig, Metro Manila, which properties were not redeemed within the period of redemption, respondent court issued an order disposing, thus:

WHEREFORE, the Court hereby, confirms the election of Mr. Emilio C. Patino, as assignee of all the registered claimants in this case, and, in consequence thereof, the said assignee is hereby directed to post a bond in the amount of P30,000.00 and to take his oath thereafter so as to be able to perform his duties and discharge his functions, as such.

The Court, likewise, sets the meeting of all the creditors with the attendance, of course, of the assignee, on March 9, 1984, at 8:30., as by that time the proposals, which the respective representatives of the parties-claimants desire to clear with their principals, shall have already been reported.

The assignee shall see to it that the properties of the insolvents which are now in the actual or constructive custody and management of the receiver previously appointed by the Court on petitioners' and claimants' proposals be placed under this actual or constructive custody and management, such as he is able to do so, as the Court hereby dissolves the receivership previously authorized, it having become a superfluity. (Annex "F").

On May 18, 1984, the Regional Trial Court, Branch CLII, Pasig, Metro Manila, in Civil Case No. 35946, issued an order directing respondent Sheriff of Angeles City, or whoever is acting in his behalf, to issue within seven (7) days from notice thereof a final deed of sale over the two (2) parcels of land covered by Transfer Certificates of Titles Nos. 18905 and 40430 in favor of petitioner. (Annex "G").

In said Civil Case No. 35946, a case for collection of sum of money covering the proceeds of television sets and other appliances, the then Court of First Instance of Rizal, Branch II, Pasig, Metro Manila, issued a writ of preliminary attachment on February 15, 1980 upon application of the petitioner, as plaintiff, which put up a bond of P350,000.00. On March 4, 1980, 3:00 P.M., levy on attachment was done in favor of petitioner on the real properties registered in the names of spouses Carlos Gatmaytan and Teresita Gatmaytan under TCT Nos. 18905 and 40430 of the Registry of Deeds of Angeles City, per Entry No. 7216 on said titles. (Annex "A" and "B").

On December 10, 1980, a decision was rendered in favor of petitioner, ordering private respondents and their co-defendant Peoples Appliance Center, Inc. to pay petitioner, jointly and severally, the sum of P721,825.91 plus interest thereon of 14% per annum from October 12, 1979 until fully paid; P20,000.00, for and attorney's fees; and the costs of suit (Annex "5", Comment). After the said decision in the aforementioned Civil Case No. 35946 became final and executory, a writ of execution for the satisfaction thereof issued on March 18, 1981; and on May 4, 1981, respondent sheriff of Angeles City sold at auction sale the attached properties covered by TCT Nos. 18905 and 40430, to petitioner as the highest bidder, and the certificate of sale was accordingly issued in its favor.

On September 21, 1982, the court ordered the consolidation of ownership of petitioner over said properties; but respondent sheriff of Angeles City refused to issue a final certificate of sale in favor of petitioner.

On May 30, 1984, petitioners-creditors interposed their opposition, stating among other things, that subject motion is improper and premature because it treats of matters foreign to the insolvency proceedings; and premature, for the reason that the properties covered by TCT Nos. 18905 and 40430-Angeles City were brought to the jurisdiction of the insolvency court for the determination of the assets of the insolvents available for distribution to the approved credits/liabilities of the insolvents. Petitioners-creditors theorized that the insolvency court is devoid of jurisdiction to grant the motion referring to matters involved in a case pending before a coordinate court in another jurisdiction (Annex "l").

Prior thereto or on July 13, 1984, to be precise, respondent court came out with its assailed extended order with the following decretal portion:

WHEREFORE, and also for the reason stated in the aforequoted order issued in pursuance of a similar motion of the movant, the Court denies, as it is hereby denied the motion of Radiola-Toshiba, dated May 28, 1984 and directs the latter to participate in the supposed meeting of all the creditors/claimants presided by the duly elected assignee. (Annex "J").

On September 8, 1984, herein petitioner Radiola-Toshiba Philippines, Inc. (RTPI, for short) filed a petition for certiorari and mandamus with respondent Intermediate Appellate Court.

The then Intermediate Appellate Court, in a Decision promulgated on March 31, 1986, denied petitioner's aforesaid petition. On April 19, 1986, petitioner filed a motion for reconsideration, but the same was denied in a Resolution dated July 1, 1986.

Hence, the instant petition. Herein petitioner raised two issues

1. WHETHER OR NOT CERTIORARI IS A REMEDY DESIGNATED FOR THE CORRECTION OF ERRORS OF JURISDICTION ONLY; and

2. WHETHER OR NOT THE REFUSAL OF THE COURTS TO ENFORCE THE LIEN OF PETITIONER ARISING FROM A LEVY OF ATTACHMENT NOT MADE WITHIN ONE MONTH NEXT PRECEDING THE COMMENCEMENT OF THE INSOLVENCY PROCEEDING IS GRAVE ABUSE OF DISCRETION.

The main issue in this case is whether or not the levy on attachment in favor of the petitioner is dissolved by the insolvency proceedings against respondent spouses commenced four months after said attachment.

On this issue, Section 32 of the Insolvency Law (Act No. 1956, as amended), provides:

Sec. 32 As soon as an assignee is elected or appointed and qualified, the clerk of the court shall, by an instrument under his hand and seal of the court, assign and convey to the assignee all the real and personal property, estate, and effects of the debtor with all his deeds, books, and papers relating thereto, and such assignment shall relate back to the commencement of the proceedings in insolvency, and shall relate back to the acts upon the adjudication was founded, and by operation of law shall vest the title to all such property, estate, and effects in the assignee, although the same is then attached on mesne process, as the property of the debtor. Such assignment shall operate to vest in the assignee all of the estate of the insolvent debtor not exempt by law from execution. It shall dissolve any attachment levied within one month next preceding the commencement of the insolvency proceedings and vacate and set aside any judgment entered in any action commenced within thirty days immediately prior to the commencement of insolvency proceedings and shall set aside any judgment entered by default or consent of the debtor within thirty days immediately prior to the commencement of the insolvency proceedings. (Emphasis supplied)

Relative thereto, the findings of the then Intermediate Appellate Court are undisputed that the levy on attachment against the subject properties of the Gatmaytans, issued by the then Court of First Instance of Pasig in Civil Case No. 35946, was on March 4, 1980 while the insolvency proceeding in the then Court of First Instance of Angeles City, Special Proceeding No. 1548, was commenced only on July 2, 1980, or more than four (4) months after the issuance of the said attachment. Under the circumstances, petitioner contends that its lien on the subject properties overrode the insolvency proceeding and was not dissolved thereby.

Private respondents, on the other hand, relying on Section 79 of the said law, which reads:

Sec. 79. When an attachment has been made and is not dissolved before the commencement of proceedings in insolvency, or is dissolved by an undertaking given by the defendant, if the claim upon which the attachment suit was commenced is proved against the estate of the debtor, the plaintiff may prove the legal costs and disbursements of the suit, and of the keeping of the property, and the amount thereof shall be a preferred debt.

and the fact that petitioner and its counsel have full knowledge of the proceedings in the insolvent case, argue that the subsequent Certificate of Sale on August 3, 1981, issued in favor of petitioner over the subject properties, was issued in bad faith, in violation of the law and is not equitable for the creditors of the insolvent debtors; and pursuant to the above quoted Section 79, petitioner should not be entitled to the transfer of the subject properties in its name.

Petitioner's contention is impressed with merit. The provision of the above-quoted Section 32, of the Insolvency Law is very clear that attachments dissolved are those levied within one (1) month next preceding the commencement of the insolvency proceedings and judgments vacated and set aside are judgments entered in any action, including judgment entered by default or consent of the debtor, where the action was filed within thirty (30) days immediately prior to the commencement of the insolvency proceedings. In short, there is a cut off period one (1) month in attachment cases and thirty (30) days in judgments entered in actions commenced prior to the insolvency proceedings. Section 79, on the other hand, relied upon by private respondents, provides for the right of the plaintiff if the attachment is not dissolved before the commencement of proceedings in insolvency, or is dissolved by an undertaking given by the defendant, if the claim upon which the attachment suit was commenced is proved against the estate of the debtor. Therefore, there is no conflict between the two provisions.

But even granting that such conflict exists, it may be stated that in construing a statute, courts should adopt a construction that will give effect to every part of a statute, if at all possible. This rule is expressed in the maxim, ut maqis valeat quam pereat or that construction is to be sought which gives effect to the whole of the statute its every word. Hence, where a statute is susceptible of more than one interpretation, the court should adopt such reasonable and beneficial construction as will render the provision thereof operative and effective and harmonious with each other (Javellana vs. Tayo, 6 SCRA 1042 [1962]; Statutory Construction by Ruben E. Agpalo, p. 182).

Neither can the sheriff's sale in execution of the judgment in favor of the petitioner be considered as a fraudulent transfer or preference by the insolvent debtors, which constitute a violation of Sec. 70 of the Insolvency Law. In the case of Velayo vs. Shell Co. of the Philippines (100 Phil. 187, [1956]), this Court ruled that Sections 32 and 70 contemplate only acts and transactions occurring within 30 days prior to the commencement of the proceedings in insolvency and, consequently, all other acts outside of the 30-day period cannot possibly be considered as coming within the orbit of their operation.

Finally, petitioner correctly argued that the properties in question were never placed under the jurisdiction of respondent insolvency court so as to be made available for the payment of claim filed against the Gatmaytans in the insolvency proceedings.

Hence, the denial by respondent insolvency court to give due course to the attachment and execution of Civil Case No. 35946 of the CFI of Rizal constitutes a freezing of the disposition of subject properties by the former which were not within its jurisdiction; undeniably, a grave abuse of discretion amounting to want of jurisdiction, correctable by certiorari.

WHEREFORE, the March 31, 1986 decision of the then Intermediate Appellate Court is hereby Reversed and SET ASIDE. The attachment and execution sale in Civil Case No. 35946 of the former CFI of Rizal are given due course and petitioner's ownership of subject properties covered by TCT Nos. 18905 and 40430 is ordered consolidated.

SO ORDERED.

Fernan, C.J., Gutierrez, Jr., Feliciano and Davide, Jr., JJ., concur.

Footnotes

* Penned by Associate Justice Fidel P. Purisima and concurred in by Associate Justices Carolina C. Grio-Aquino, Jose F. Racela, Jr., and Jorge S. Imperial.

Republic of the PhilippinesSUPREME COURTManila

EN BANC

G.R. No. 104712 May 6, 1992

MANUEL T. DE GUIA, in his capacity as Councilor of the Municipality of Paraaque, Metro Manila, petitioner, vs.HON. COMMISSION ON ELECTIONS, respondent.

BELLOSILLO, J.:This is a petition for certiorari and prohibition assailing the validity and the enforcement by respondent Commission on Elections (COMELEC) of its RESOLUTION NO. 2313, adopting rules and guidelines in the apportionment, by district, of the number of elective members of the Sangguniang Panlalawigan in provinces with only one (1) legislative district and the Sangguniang Bayan of municipalities in the Metro Manila Area for the preparation of the Project of District Apportionment by the Provincial Election Supervisors and Election Registrars (Annex "A", Petition), RESOLUTION NO. 2379, approving the Project of District Apportionment submitted pursuant to Resolution No. 2313 (Annex "B", Petition), and RESOLUTION UND. 92-010 holding that pars. (a), (b) and (c), and the first sentence of par. (d), all of Sec. 3, R.A. 7166, apply to the May 11, 1992 elections (Annex "C", Petition).

Petitioner Manuel T. De Guia is an incumbent Member of the Sangguniang Bayan of the Municipality of Paraaque, Metro Manila, having been elected in the January 1988 local elections. He prays, more particularly, for reversal of the position of respondent insofar as it affects the municipality of Paraaque and all the other municipalities in the Metro Manila Area. He claims that the second proviso of par. (c), Sec. 3 of R.A. 7166, which requires the apportionment into districts of said municipalities does not specify when the members of their Sangguniang Bayan will be elected by district. He would consequently lean on par. (d) of Sec. 3, which immediately succeeds par. (c), to support his view that the elected members of these municipalities mentioned in par. (c) should continue to be elected at large in the May 11, 1992 elections.

Paragraph (d) states that "[F]or purposes of the regular elections on May 11, 1992, elective members of the Sangguniang Panlunsod and Sangguniang Bayan shall be elected at large in accordance with existing laws. However, beginning with the regular elections in 1995, they shall be elected by district." Petitioner therefore insists that the elected members of the Sangguniang Bayan of Paraaque fall under this category so that they should continue to be elected at large until the 1995 regular elections.

Before addressing the crux of the controversy, the Court observes that petitioner does not allege that he is running for reelection, much less, that he is prejudiced by the election, by district, in Paraaque. As such, he does not appear to have a locus standi, a standing in law, personal or substantial interest. 1 He does not also allege any legal right that has been violated by respondent. If for this alone, petitioner does not appear to have any cause of action.

However, considering the importance of the issue involved, concerning as it does the political exercise of qualified voters affected by the apportionment, and petitioner alleging abuse of discretion and violation of the Constitution by respondent, We resolve to brush aside the question of procedural infirmity, even as We perceive the petition to be one of declaratory relief. We so held similarly through Mr. Justice Edgardo L. Paras in Osmea v. Commission on Elections. 2Now on the meat of the dispute.

On November 18, 1991, Congress passed R.A. 7166, signed into law by the President on November 26, 1991. It is "An Act Providing for Synchronized National and Local Elections and for Electoral Reforms, Authorizing Appropriations Therefor, and for Other Purposes." At issue in this case is the proper interpretation of Sec. 3 thereof which provides:

Sec. 3. Elections of Members of the Sangguniang Panlalawigan, Sangguniang Panlungsod and Sangguniang Bayan. The elective members of the Sangguniang Panlalawigan, Sangguniang Panlungsod and Sangguniang Bayan shall be elected as follows:

(a) For provinces with two (2) or more legislative districts, the elective members of the Sangguniang Panlalawigan shall be elected by legislative districts . . .

(b) For provinces with only one (1) legislative district, the Commission shall divide them into two (2) districts for purposes of electing the members of the Sangguniang Panlalawigan . . .

(c) The number and election of elective members of the Sangguniang Panlungsod and Sangguniang Bayan in the Metro Manila Area, City of Cebu, City of Davao and any other city with two (2) or more legislative districts shall continue to be governed by the provisions of Sections 2 and 3 of Republic Act No. 6636 . . . Provided, further, That, the Commission shall divide each of the municipalities in Metro Manila Area into two (2) districts by barangay for purposes of representation in the Sangguniang Bayan . . . . and,

(d) For purposes of the regular elections on May 11, 1992, elective members of the Sangguniang Panlungsod and Sangguniang Bayan shall be elected at large in accordance with existing laws. However, beginning with the regular elections in 1995, they shall be elected by district . . . .

On November 20, 1991, respondent COMELEC, invoking authority of the Constitution, the Omnibus Election Code, R.A. 6636, R.A. 6646 and R.A. 7166, 3 issued R