G.R. No. 215650Per Curiam
Case Information
Primary Source
Manila
EN BANC
[ G.R. No. 215650, March 28, 2023 ]
AUGUSTO L. SYJUCO, JR., PETITIONER, VS. JOSEPH EMILIO A. ABAYA, IN HIS CAPACITY AS SECRETARY OF THE DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS; HONORITO D. CHANECO, IN HIS CAPACITY AS ADMINISTRATOR OF LIGHT RAIL TRANSIT AUTHORITY; AND RENATO Z. SAN JOSE, IN HIS CAPACITY AS OFFICER-IN-CHARGE OF THE METRO RAIL TRANSPORT 3 OFFICE, RESPONDENTS.
G.R. No. 215653
BAGONG ALYANSANG MAKABAYAN, REPRESENTED BY ITS SECRETARY GENERAL, RENATO REYES, JR.; TEODORO CASI'O; MELQUIADES A. ROBLES; ELMER C. LABOG; SAMMY T. MALUNES; FERDINAND R. GAITE; VENCER CRISOSTOMO; JOSSEL I. EBESATE; GLORIA G. ARELLANO; HERMAN TIU LAUREL; MYRLEON E. PERALTA; AMORSOLO L. COMPETENTE; ELVIRA Y. MEDINA; MARIA DONNA GREY MIRANDA; ANGELO VILLANUEVA SUAREZ; JOSE SONNY G. MATULA; DAVID L. DIWA; JAMES BERNARD E. RELATIVO; AND GIOVANNI A. TAPANG, PETITIONERS, VS. JOSEPH EMILIO A. ABAYA, IN HIS CAPACITY AS SECRETARY OF THE DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS; RENATO Z. SAN JOSE, IN HIS CAPACITY AS OFFICER-IN-CHARGE OF METRO RAIL TRANSPORT 3 OFFICE; LIGHT RAIL TRANSIT AUTHORITY, REPRESENTED BY HONORITO D. CHANECO AS ADMINISTRATOR; METRO RAIL TRANSIT CORPORATION; AND LIGHT RAIL MANILA CORPORATION, RESPONDENTS.
G.R. No. 215703
UNITED FILIPINO CONSUMERS AND COMMUTERS, INC., REPRESENTED BY ITS PRESIDENT, RODOLFO B. JAVELLANA, JR., PETITIONER, VS. JOSEPH EMILIO A. ABAYA, IN HIS CAPACITY AS SECRETARY OF THE DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS; METRO RAIL TRANSIT CORPORATION; AND LIGHT RAIL TRANSIT AUTHORITY, RESPONDENTS.
G.R. No. 215704
BAYAN MUNA REPRESENTATIVE NERI JAVIER COLMENARES; BAYAN MUNA REPRESENTATIVE CARLOS ISAGANI ZARATE; ANTHONY IAN CRUZ; IMELDA V. LUNA; AND CARL ANTHONY ALA, PETITIONERS, VS. JOSEPH EMILIO A. ABAYA, IN HIS CAPACITY AS SECRETARY OF THE DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS; LIGHT RAIL TRANSIT AUTHORITY; AND RENATO Z. SAN JOSE, IN HIS CAPACITY AS OFFICER-IN-CHARGE OF METRO RAIL TRANSIT 3 OFFICE, RESPONDENTS.
G.R. No. 216735
JOSEPH VICTOR G. EJERCITO, JOSE L. ATIENZA, JR., IRWIN C. TIENG, MARIANO MICHAEL DEL MONTE VELARDE, JR., LEAH D. PAQUIZ, GUSTAVO S. TAMBUNTING, JESUS CRISPIN C. REMULLA, ALAN A. TANJUSAY, ALLAN S. MONTA'O, LEODY Q. DE GUZMAN, RENATO B. MAGTUBO; AND ANNIE E. GERON, PETITIONERS, VS. WINSTON M. GINEZ, IN HIS CAPACITY AS CHAIRPERSON OF THE LAND TRANSPORTATION FRANCHISING AND REGULATORY BOARD; JOSE EMILIO A. ABAYA, IN HIS CAPACITY AS SECRETARY OF DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS; RENATO Z. SAN JOSE, IN HIS CAPACITY AS OFFICER-IN-CHARGE OF METRO RAIL TRANSIT 3 OFFICE; LIGHT RAIL TRANSIT AUTHORITY; METRO RAIL TRANSPORT CORPORATION; AND LIGHT RAIL MANILA CORPORATION, RESPONDENTS.
LOPEZ, J., J.:
The doctrine in'Vigan Electric Light Company, Inc. v. Public Service Commission1'on dispensing with the requirements of notice and hearing when the administrative body acts in a quasi-legislative capacity does not apply in cases where the law itself expressly provides for the procedure and requirements for the validity of an administrative rule. In such cases, the Court-as the stronghold for the'Rule of Law---has no other recourse but to apply the law.
This Court resolves the consolidated Petitions for'Certiorari'and/or Prohibition,2'assailing the constitutionality of Department of Transportation and Communications (DOTC)3'Department Order No. 2014-014 (D.O. No. 2014-014), which mandated the application of the "user-pays" principle and adopted a uniform base fare for the Light Rail Transit (LRT) Lines 1 and 2 and the Metro Rail Transit (MRT) Line 3 of PHP 11.00 plus PHP 1.00 per kilometer of distance traveled.
In the Resolution4'dated March 10, 2015, this Court ordered the consolidation of G.R. Nos. 215650, 215653, 215703, 215704, and 216735.
Petitioners alleged, in substance, that D.O. No. 2014-014 violates the due process clause of the Constitution as it was issued without prior notice and hearing.5'They insisted that the effective 50 to 87% increase in the fare rates is ruthless, arbitrary,6'and without basis in fact and in law.7'Ultimately, they pray that D.O. No. 2014-014 be struck down as illegal and unconstitutional, and that respondents be permanently enjoined from implementing the provisions thereof.
A Brief History of the LRT and MRT Systems in the Philippines
During the 1970s, road traffic in Metro Manila had become so notorious and systematic that the government started exploring the possibility of introducing a modem mass transit system. The goal was to "relieve traffic congestion, improve the urban environment[,] and develop alternative economic and residential areas away from the city center."8
From 1976 to 1977, the World Bank funded a study conducted by Freeman Fox and Associates, which suggested a street-level light railway. Upon review of the then Ministry of Transportation and Communications (MOTC), it recommended that because of the many intersections along the proposed route, an elevated light railway is the best option. In relation to this, the MOTC commissioned another foreign firm for a supplementary study that was completed within three months.9
On July 12, 1980, then President Ferdinand E. Marcos signed Executive Order No. 603 (E.O. No. 603), creating respondent Light Rail Transit Authority (LRTA), a government instrumentality vested with corporate powers10'and an attached agency to the DOTC.11'Under E.O. No. 603, the LRTA is "primarily responsible for the construction, operation, maintenance, and/or lease of light rail transit systems in the Philippines xx x."12
To finance the LRT project, the Philippines obtained from the Belgian government a soft and interest-free loan for PHP 300,000,000.00 payable in 30 years. An additional loan in the amount of PHP 700,000,000.00 was further provided by a Belgian consortium, which also provided cars, signaling, power control, telecommunications, training, and technical assistance.13
On December 1, 1984, the LRT-Taft Avenue Line was officially opened to the public. Today, the LRT Line 1 (LRT-1) is a 19.65-kilometer elevated railway system servicing 19 stations14'along the route of Taft Avenue in Baclaran, Pasay City to Roosevelt Station in Quezon City.15'The LRTA originally managed the operations and maintenance of the LRT-1 until it was turned over to respondent Light Rail Manila Corporation (LRMC), pursuant to a 32-year concession agreement executed in September 2015 between the now Department of Transportation (DOTr), LRMC, and the LRTA.16
Meanwhile, in 1996, construction for the LRT Line 2 (LRT-2), popularly known as'The Megatren,'began. The PHP 31-billion-peso construction was funded by soft loans secured mainly from the Japan Bank for International Corporation.17'Phase One of the LRT-2 covering the stations of Santolan, Katipunan, Anonas, and Araneta Center-Cubao began operations on April 5, 2003, while Phase Two servicing stations from Betty Go-Belmonte to Legarda was inaugurated on April 5, 2004.18'The LRT-2 East Extension Project, which added two new stations in Marikina-Pasig and Antipolo, respectively, was inaugurated on July 1, 2021 and was opened to the public in the same month.19'The operations and maintenance of the LRT-2 is under the management of the LRTA.
The MRT Line 3 (MRT-3), on the other hand, is a 16.9-kilometer modern rail system traversing the stretch of Epifanio Delos Santos Avenue (EDSA), with stations from North Avenue in Quezon City to Taft Avenue in Pasay City. It was intended to alleviate the chronic traffic congestion along EDSA.20'In 1992, the DOTC entered into a Build-Lease-and-Transfer Agreement (BLT Agreement) with EDSA LRT Corporation LTD for the construction of the MRT-3 system. EDSA LRT Corporation LTD was later purchased by respondent Metro Rail Transit Corporation (MRTC), which then began the construction of the MRT-3 in 1996.21'On August 8, 1997,a revised BLT Agreement was signed between the DOTC and the MRTC, under which the MRTC will own, build, and maintain the system, while the DOTC will hold the franchise and run the operations, including the collection of fares.22'The MRT-3 was officially completed and inaugurated for full operations on July 20, 2000.23
Demand for the rail transit systems has consistently grown over its years of operation. According to the 2014 Annual Report of the LRTA, LRT-1 carried a total of 170.73 million passengers, while the LRT-2 ferried a total of 72.85 million riders that year. The daily average passenger ridership for both systems was 475,798 and 201,794, respectively.24'Based on the report, moreover, ridership for LRT-1 and LRT-2 has continually increased over the past five years, suggesting the commuting public's preference over the rail system due to its affordability and efficiency.25'Meanwhile, the MRT-3 transported a total of 167.82 million passengers in 2014, with an average daily ridership of 464,871,26'over the capacity of the system that was designed to carry 360,000 to 380,000 passengers only.27
Antecedents of D.O. No. 2014-014
The operations of the LRT and the MRT are, as a policy, subsidized by the national government to maintain affordable fares and boost ridership. In 2014, the LRTA was allotted a budget of PHP 9,567,612,000.00 to augment its income for payment of personnel services, maintenance and other operating expenses, as well as capital outlay and debt servicing.28'Meanwhile, the MRT-3 was allotted PHP 4,091,473,000.0029'as subsidy for mass transport, which shall be used in case its fare box revenue and non-rail income is not sufficient to cover the amount needed for payment of prior and current years' equity rental and maintenance fees and other obligations to the MRTC.30
In view of reducing government subsidy, the Office of the President, on August 5, 2010, directed the LRTA to conduct a comparative study on the operating costs of the LRT and the MRT'vis-'-vis'public utility buses.31'On August 25, 2011, the LRTA management presented the result of the study to the LRTA Board for its consideration. Upon request of the LRTA Board, DOTC Assistant Secretary George Esguerra also presented a report based on the Transportation Society of the Philippines's review, which it made as part of its volunteer work with the DOTC. Thereafter, the LRTA Board instructed the LRTA management to conduct a joint study with Assistant Secretary Esguerra (the Team). In September 2010, the Team presented their Fare Rationalization Study Report to the LRTA management.32'The DOTC presented the report to the top officials of the DOTC and the LRTA Board during its meeting in October 2010.33'On October 27, 2010, the Secretary of Finance, the Secretary of Budget and Management, the Secretary of Transportation and Communications, and the Secretary of Socio-Economic Planning (economic managers) executed a Memorandum for the President regarding the LRT fare adjustment.34
Eventually, the study report was submitted to the LRTA Board for its approval during its regular meeting on January 11, 2011. During the meeting, the LRTA Board provisionally approved the fare adjustment of PHP 11.00 boarding fare plus PHP 1.00/km, with the corresponding fare matrices, subject to a public consultation to be held on two occasions-February 4 and 5, 2011.35
The LRTA management published the Notice of Public Consultation in the Philippine Daily Inquirer on January 20, 2011 and in The Manilla Bulletin on January 27, 2011.36'On February 24, 2011, the LRTA Administrator issued a Memorandum to the LRTA Board on the Report on the Public Consultation Conducted for the LRTA's Fare Adjustment and Request for Approval of Management's Recommendation for a Revised Fare Legal for LRT-1 and LRT-2.37'The Report suggested that the proposed fare adjustment was not acceptable to the public.38
After duly considering the result of the public consultation, the LRTA Board approved its fare adjustment of distance-based fare scheme of PHP 11.00 plus PHP 1.00/km with the 20% student discount, to be implemented after consultation with the LTFRB and 30 days from the last day of proper publication. On April 20, 2011, the LTFRB concurred with the approved PHP 11.00 plus PHP 1.00/km fare adjustment and granting of a 20% student discount. Yet, on May 9, 2011, the LRTA Board and the DOTC decided to indefinitely defer the implementation of the fare increase.39
During its meeting on June 26, 2013, the LRTA Board approved anew the PHP 11.00 plus PHP 1.00/km fare adjustment for LRT-1 and LRT-2 but withdrew the 20% discount for students. During former President Benigno Simeon Aquino III's State of the Nation Address (SONA) on July 22, 2013, he reiterated the need to adjust the LRTA's and MRTC's fares so that the government subsidy for the MRTC and the LRTA can be used for other social services.40'In a Secretary's Certificate dated November 26, 2013, the LRTA Board affirmed the PHP 11.00 plus PHP 1.00/km fare adjustment for LRT-1 and LRT-2, as previously approved in 2011. The 1st'step fare adjustment was scheduled to be implemented on August 1, 2013, while the 2nd'step implementation shall be decided after the public consultation.41'Therefore, another public consultation was held on December 12, 2013.42
On December 18, 2013, the LRTA Board confirmed the LRT fare adjustment using the PHP 11.00 plus PHP 1.00/km formula, subject to consultation with the LTFRB.43'In a letter dated December 19, 2013, the LTFRB Chairman signified that the LTFRB had no objections to the fare adjustment.44
On December 18, 2014, public respondent DOTC Secretary Jose Emilio A. Abaya issued D.O. No. 2014-014.45'It was published in the Philippine Daily Inquirer on December 20, 2014 and became effective 15 days after, or on January 4, 2015.46'D.O. No. 2014-014 states that the imposition of the uniform base fare of PHP 11.00 plus PHP 1.00 per kilometer of distance traveled is in accordance with the LRTA's Board Resolution, as concurred in by the Land Transportation Franchising Regulatory Board (LTFRB) and recommended by the MRT-3 Office.
D.O. No. 2014-014 effectively increased the total fare per ride for all the three rail systems by 50% to 87%. Prior to its issuance, single-journey fares for the LRT-1, LRT-2, and the MRT-3 range from PHP 12.00 to PHP 20.00, PHP 12.00 to PHP 15.00, and PHP 10.00 to PHP 15.00, respectively. Under D.O. No. 2014-014, the new fare ranges are PHP 15.00 to PHP 30.00, PHP 15.00 to PHP 25.00, and PHP 13.00 to PHP 28.00.47'It is the first increase for the LRT-2 and the MRT-3 since formal operations began, and the most recent for the LRT-1 since 2003.
The Petitions Before this Court
Following the issuance of D.O. No. 2014-014 are the consolidated Petitions filed before this Court assailing the constitutionality and legality of the fare increase mandated by the DOTC.
Petitioners are former and present members of the House of Representatives;48'labor groups and unions49'and/or their members and officers;50'as well as citizens, taxpayers, and regular commuters.51'They argue that they have the standing to question the validity of D.O. No. 2014-014 because the riding public in general "actually and specifically suffer direct and substantial injury" as a result of the implementation of the fare increase in the LRT and the MRT.52'Thus, they meet the requirement of the direct injury test, as they are directly affected by the "untimely, unreasonable, arbitrary, and capricious imposition of the fare hikes."53
Petitioners also argue that a direct invocation of this Court's jurisdiction is justified in the present case. They assert that the petitions fall under the exceptions to the principle of hierarchy of court since they raise issues affecting the public in general and the advancement of public interests.54'Thus, these are matters of transcendental importance that involve genuine constitutional issues which are for the Court to resolve.55
In the same vein, petitioners contend that the present case is an exception to the application of the doctrine of exhaustion of administrative remedies because D.O. No. 2014-014 is a patent nullity, the "implementation of which is detrimental to public interest." Moreover, there is no other plain, speedy, and adequate remedy to address the issues raised by petitioners.56
Petitioners also aver that'certiorari'and prohibition under Rule 65 of the Rules of Court are the proper vehicles to assail the constitutionality of D.O. No. 2014-014. They argue that public respondents, in issuing D.O. No. 2014-014, exceeded their authority as conferred by law and acted in violation of the prescribed procedure for the setting of public transportation fares.57'Further, the issuance of D.O. No. 2014-014 is quasi-judicial in nature, correctible through'certiorari.58
On the merits, petitioners claim that the DOTC Secretary has no power to implement a fare increase for the LRT and the MRT. Under Executive Order No. 202 issued on June 19, 1987, the quasi-judicial powers and functions to adjudicate fare adjustments were transferred from the DOTC to the LTFRB.59'Moreover, the operation of the LRT and the MRT is subject to the same regulatory impositions applicable to public services under Commonwealth Act No. 146 (CA No. 146).60'Here, the DOTC did not comply with the requirements for fixing and determination of rates provided in Section 16(c) of CA No. 146.61'Neither does the LRTA have the power to approve fare increases for the light rail system in the absence of a delegation of legislative authority in its favor.62
Petitioners also posit that D.O. No. 2014-014 was issued without the required notice and hearing in violation of the due process clause and the right to full public disclosure under the Constitution. What transpired during the so-'called public consultation on December 12, 2013 by the DOTC was merely a presentation of the new fare matrix of the LRT and the MRT, without meaningful public participation. Thus, petitioners' right to information on matters of public concern was similarly violated since the basis of the fare adjustment was not made public. More importantly, D.O. No. 2014-014 violates the state policy of protecting the rights of workers and promoting their welfare under Section 18, Article II of the Constitution. The fare increase will diminish the measly salary of the laborers earning minimum wage or below who represent majority of the ridership of the LRT and the MRT.63
Finally, petitioners argue that the fare increase is not necessary because the legislature already granted the DOTC an approved total agency budget of PHP 2.65 billion for 2015 and an additional supplemental budget amounting to PHP 1.207 billion for 2014, which included an allocation to supplement the ridership of the LRT and the MRT and to pay for the maintenance, repairs, and rehabilitation of both rail systems.64
Petitioners pray that D.O. No. 2014-014 be declared null and void and that respondents be enjoined from further implementing the fare increase provided thereunder.65
For their part, public respondents counter that petitioners have no standing to bring the present suit for failure to establish direct injury as a result of the issuance of D.O. No. 2014-014. The fare increase under D.O. No. 2014-014 only implements a reduction of government subsidy, the grant of which is not a legally demandable right. Petitioners-legislators similarly do not have the standing to file the present case since there is no allegation of usurpation of the powers of Congress. Finally, petitioners cannot invoke their status as taxpayers, since D.O. No. 2014-014 is neither a tax measure nor a form of disbursement of public funds.66
Anent the propriety of the present petitions, LRMC avers that the remedies of'certiorari'and prohibition are not proper modes to review and question the executive department's economic policy decisions, including which sectors of the society or activities of the government to subsidize. No one has a vested right to a government subsidy, and its grant or withdrawal is purely a discretionary prerogative of the executive and judicial departments.67
On substantive issues, respondents argue that it is the DOTC and the LRTA which have the authority to determine the fare rates of the MRT and the LRT, respectively. Contrary to petitioners' assertion, the determination of the fare rates of the LRT and the MRT is governed by E.O. No. 292, otherwise known as the Administrative Code of 1987, and the LRTA Charter, and not by CA No. 146.68
The LRTA adds that, not being a regulatory body with quasi-judicial function, its power is quasi-legislative in nature where notice and hearing is not a requirement of due process. Nevertheless, the LRTA complied with the requirement of public participation under Section 9, Chapter 2, Book VII of the Administrative Code of 1987 when it published the Notice of Public Consultation twice for the February 4 and 5, 2011 public consultations, and twice for the December 21, 2013 public consultation.69
Respondents insist that the fare adjustment under D.O. No. 2014-014 is merely a reduction of government subsidy. On this score, petitioners have no right to demand that the current levels of subsidy from the government for the LRT and the MRT be maintained. The adoption of the user-pays principle is also pursuant to the 2011 to 2016 Medium-Term Philippine Development Plan and was "envisioned to result in an equitable distribution of government funds currently dedicated to [subsidizing] the operations of the [LRT/MRT] rail lines in Metro Manila to much-needed development projects and relief operations in other parts of Luzon, the Visayas, and Mindanao."70'Thus, the decision to grant subsidies is a discretionary question and a non-ministerial prerogative of the executive and legislative department which cannot be enjoined or compelled.71'What petitioners dispute in the present case is the wisdom of extending or withholding government subsidies, a policy question over which the Court has no jurisdiction.72
Respondents pray that the consolidated Petitions be denied for lack of merit.
In the Resolution73'dated August 23, 2022, this Court required the parties to move in the premises and update Us on the current situation regarding the rates in the LRT, and whether the fares were charged to commuters, within 30 days from notice.
In their Joint Manifestation and Compliance74'dated December 19, 2022 in G.R. Nos. 215653 and 215704, petitioners, through counsel, manifested that the LRMC petitioned for a fare increase in 2016, 2018, and 2022, which were all denied by the government. This prompted the LRMC to file an arbitration request with the International Chamber of Commerce on May 6, 2022 against the DOTC and the LRTA in a disclosure made by the Metro Pacific Investments Corporation which holds a stake in the LRMC. The LRMC claimed that as of March 31, 2022, the money claims for fare differentials and losses, costs, and expenses amounted to approximately PHP 2.67 billion. These are in addition to the long overdue fare adjustments which the LRMC asserts it is authorized to do every two years under its concession agreement. Petitioners emphasized that the fares for LRT-1, LRT-2, and MRT-3 have remained the same as it were in 2015.75
Meanwhile, the LRTA, in its Compliance76'dated December 19, 2022, also stated that the fares being implemented in LRT-1 and LRT-2 today are still based on the formula provided in D.O. No. 2014-014. The LRTA likewise confirmed the ongoing arbitration request filed by the LRMC against it and the DOTC before the International Chamber of Commerce.
For this Court's resolution are the following issues:
First,'whether the present case is justiciable. Subsumed under this issue are the following:
1. Whether the remedies of'certiorari'and prohibition are proper;
2. Whether the consolidated Petitions were filed in violation of the principle of hierarchy of courts and the doctrine of exhaustion of administrative remedies;
3. Whether the issues raised are policy questions over which the Court has no jurisdiction;
4. Whether the case is ripe for adjudication; and
5. Whether petitioners have the requisite standing to file their respective Petitions.
Second,'whether D.O. No. 2014-014 is valid and constitutional. This involves the resolution of:
1. Whether the DOTC or the LRTA has the power to regulate the fares for the MRT and the LRT, respectively;
2. Whether the issuance of D.O. No. 2014-014 requires notice and hearing; and
3. Whether the fare increase is reasonable.
This Court's Ruling
The present Petitions must be DISMISSED.
I.
The Judiciary is a stronghold for the'Rule of Law.'Because it can view issues through the lens of objectivity and isolate itself from political tension and external influences,77'the Judiciary is a refuge that society can trust to dispense justice and carry out noble principles like due process and even equity, in appropriate circumstances. Consistent with the tripartite allocation of powers, the Judiciary will neither inquire into the wisdom of the law78'nor engage in socio-economic or political experimentations.79'The Judiciary is only concerned with what the law says, and when called upon to exercise judicial power, it will not hesitate to say what the law is.80'The extent of judicial power was best enunciated in'Marbury v. Madison:81
It is emphatically the province and duty of the Judicial Department to say what the law is. Those who apply the rule to particular cases must, of necessity, expound and interpret that rule. If two laws conflict with each other, the Courts must decide on the operation of each.
So, if a law be in opposition to the Constitution, if both the law and the Constitution apply to a particular case, so that the Court must either decide that case conformably to the law, disregarding the Constitution, or conformably to the Constitution, disregarding the law, the Court must determine which of these conflicting rules governs the case. This is of the very essence of judicial duty.82
In a century of uncertainty, with the political climate being in a state of flux, the Court's exercise of judicial review is powerful enough to bring balance and restore equilibrium.83'It can rein in the unauthorized exercise of power by the legislative or executive branches of government.84
Certiorari as the appropriate remedy
Section 1, Article VIII of the 1987 Constitution on the power of judicial review serves as the Court's guide to determine the propriety of seeking redress from the Court. Thus:
SECTION 1. The judicial power shall be vested in one Supreme Court and in such lower courts as may be established by law.
Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government.
From the foregoing flows the Court's power to not only settle actual controversies involving rights which are legally demandable and enforceable but also determine if any branch or instrumentality of the government has acted beyond the scope of its powers.85'The latter is known as the expanded scope of judicial power.
The driving force behind the evolution of a court's judicial power varies depending on jurisdiction. Here, the court's judicial power was ushered in by a deep, dark, and disturbing past-"the use and abuse of the political question doctrine during the martial law era under former President Ferdinand Marcos."86'The past may have been bleak, nonetheless, this Court's expanded scope of judicial power shaped the landscape of the Philippine judiciary and ensured "the potency of the power of judicial review to curb grave abuse of discretion by any branch or instrumentality of the government."87'Indeed, the parties must not think the judiciary is too weak, as to put the other branches of government beyond its reach, or too strong, as to engage in judicial legislation. As a guardian of the law and the Constitution, it is the judiciary's duty to ease any tension in the separation of powers and harmonize the tripartite allocation thereof.
To address grave abuse of discretion by any government branch or instrumentality, parties can invoke Sections 1 and/or 2, Rule 65 of the Rules of Court, which provides:
SECTION 1.'Petition for Certiorari.'- When any tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, or any plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered annulling or modifying the proceedings or such tribunal, board or officer, and granting such incidental reliefs as law and justice may require.
The petition shall be accompanied by a certified true copy of the judgment, order or resolution subject thereof, copies of all pleadings and documents relevant and pertinent thereto, and a sworn certification of non'-forum shopping as provided in the paragraph of Section 3, Rule 46.
SECTION 2.'Petition for Prohibition.'- When the proceedings of any tribunal, corporation, board, officer or person, whether exercising judicial, quasi-judicial or ministerial functions, are without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal or any other plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered commanding the respondent to desist from further proceedings in the action or matter specified therein, or otherwise granting such incidental reliefs as law and justice may require.
The petition shall likewise be accompanied by a certified true copy of the judgment, order or resolution subject thereof, copies of all pleadings and documents relevant and pertinent thereto, and a sworn certification of non-forum shopping as provided in the third paragraph of Section 3, Rule 46.
Textually, Sections 1 and 2 above refer only to the acts or proceedings of a tribunal, board, or officer exercising judicial, quasi-judicial, or ministerial functions. It is well-settled, however, that an administrative agency may exercise either quasi-judicial or quasi-legislative powers, or a mixture of both.88'Thus, parties are often confounded about the proper remedy to assail the validity or constitutionality of a rule or regulation issued by an administrative agency in the performance of its quasi-legislative functions. Certainly, the capacity in which the administrative agency exercises its power affects a party's appropriate remedy to assail its acts or proceedings.89
Quasi-legislative versus quasi-judicial powers of administrative agencies
In the present case, the DOTC, being an administrative agency,90'issued D.O. No. 2014-014 pursuant to its quasi-legislative powers. In arguing that'certiorari'is the appropriate remedy to question the validity of D.O. No. 2014-014, petitioners assert that the DOTC Secretary usurped a quasi-judicial function.91'They allege that in issuing D.O. No. 2014-014, the DOTC had to determine facts and circumstances to establish a just and reasonable ground to allow the fare increase.92'Private respondent LRMC, on the other hand, contests the propriety of prohibition and'certiorari'as remedies to challenge the validity of D.O. No. 2014-014.93'According to it,'certiorari'and prohibition are not available as a means to review and question the executive department's economic or governance policy decisions as to what sectors or activities merit government support through subsidies, which are exclusively executive and legislative prerogative decisions.94
In'Confederation for Unity, Recognition and Advancement of Government Employees v. Abad,95'this Court differentiated between quasi'-judicial and quasi-legislative functions:
Quasi-judicial or adjudicatory functions refer to "the power to hear and determine questions of fact to which the legislative policy is to apply and to decide in accordance with the standards laid down by the law itself in enforcing and administering the same law." Quasi-legislative or rule'-making functions refer to "the power to make rules and regulations which results in delegated legislation that is within the confines of the granting statute and the doctrine of non-delegability and separability of powers."96
Here, public respondent DOTC Secretary Abaya was exercising rule'-making functions when he issued D.O. No. 2014-014. Section 3(15), Chapter 1, Title XV, Book IV of the Administrative Code of 1987 authorizes the DOTC to determine, fix, or prescribe charges or rates pertinent to the operation of land transportation utility facilities and services. The power to fix rates is also a result of delegated legislation. As early as 1991, this Court, citing the'Shreveport Rate Cases,97'had already characterized rate-fixing as an act of Congress, which may exercise the power to delegate.98
Ordinarily, regular courts have the jurisdiction to pass upon the validity or constitutionality of a rule or regulation issued by an administrative agency in the performance of its quasi-legislative function.99'For instance, this Court, in'Smart Communications, Inc. v. National Telecommunications Commission100'ruled that since the National Telecommunications Commission (NTC) issued Memorandum Circular No. 13-6-2000 and the Memorandum dated October 6, 2000 in the exercise of its quasi-legislative or rule-making power, petitioners therein correctly lodged an action for declaration of nullity in the Regional Trial Court (RTC).'Certiorari'petitions also often get confused with ones for declaratory relief. In the dissent of our esteemed colleague, Senior Associate Justice Marvic M.V.F. Leonen, in'Association of Medical Clinics for Overseas Workers, Inc. (AMCOW) v. GCC Approved Medical Centers Association, Inc.,101'he noted that the confusion with'certiorari'may have been caused by actions that were acted upon by the court as'certiorari'petitions but should have really been considered as ones for declaratory relief.102
Assimilating the thrust of our jurisprudence103'on the matter so far, what is clear is that whether the action of the administrative agency is in the exercise of its quasi-judicial or quasi-legislative power, the Court has taken the invocation of Sections 1 and/or 2 of Rule 65 to include the expanded scope of judicial power.104'This means they are "appropriate remedies to raise constitutional issues and to review and/or prohibit or nullify, when proper, acts of legislative and executive officials."105'As long as petitioner can'prima facie106'show that the governmental branch or instrumentality has gravely abused its discretion amounting to lack or excess of jurisdiction, and has overstepped the delimitations of its powers, the courts may "set right, undo, or restrain"107'such act by way of'certiorari'and prohibition.108
Direct invocation of the Court's jurisdiction and the doctrine of hierarchy of courts
That being said, the foregoing discussion does not excuse petitioners from complying with the doctrine of hierarchy of courts. This Court's, the Court of Appeals' (CA), and the RTC's concurrent jurisdiction to issue writs of'certiorari, prohibition, and similar writs does not give petitioners an unbridled discretion to choose any forum.109'In'Private Hospitals Association of the Philippines, Inc. v. Medialdea,'110'this Court explained the doctrine in greater detail:
Jurisdiction over petitions for'certiorari'and prohibition are shared by this Court, the Court of Appeals, the Sandiganbayan and the Regional Trial Courts. Since the remedies of'certiorari'and prohibition are available to assail the constitutionality of a law, the question as to which court should the petition be properly filed consequently arises given that the hierarchy of courts "also serves as a general determinant of the appropriate forum for petitions for the extraordinary writs."
Respondents argue that direct resort to this Court is unjustified and thus violates the doctrine of hierarchy of courts.
Under the doctrine of hierarchy of courts, "recourse must first be made to the lower-ranked court exercising concurrent jurisdiction with a higher court." As a rule, "direct recourse to this Court is improper because the Supreme Court is a court of last resort and must remain to be so in order for it to satisfactorily perform its constitutional functions, thereby allowing it to devote its time and attention to matters within its exclusive jurisdiction and preventing the overcrowding of its docket."
Nevertheless, we cautioned in'The Diocese of Bacolod, et al. v. COMELEC, et al.,'that the Supreme Court's role to interpret the Constitution and act in order to protect constitutional rights when these become exigent is never meant to be emasculated by the doctrine of hierarchy of courts. As such, this Court possesses full discretionary authority to assume jurisdiction over extraordinary actions for'certiorari'filed directly before it for exceptionally compelling reasons, or if warranted by the nature of the issues clearly and specifically raised in the petition.
As developed by case law, the instances when direct resort to this Court is allowed are enumerated in'The Diocese of Bacolod'as follows: (a) when there are genuine issues of constitutionality that must be addressed at the most immediate time; (b) when the issues involved are of transcendental importance; (c) in cases of first impression; (d) the constitutional issues raised are better decided by the Supreme Court; (e) the time element or exigency in certain situations; (f) the filed petition reviews an act of a constitutional organ; (g) when there is no other plain, speedy, and adequate remedy in the ordinary course of law; (h) the petition includes questions that are dictated by public welfare and the advancement of public policy, or demanded by the broader interest of justice, or the orders complained of were found to be patent nullities, or the appeal was considered as clearly an inappropriate remedy.
The present petition, while directed against an act of a co-equal branch of the government and concerns a legislative measure directly affecting the health and well-being of the people, actually presents no'prima facie'challenge, as hereunder expounded, as to be so exceptionally compelling to justify direct resort to this Court.111'(Citations omitted)
To warrant a direct invocation of this Court's original jurisdiction to issue these writs, petitioners must cite special and important reasons therefor, like when the issues involved are of transcendental importance, the time element or exigency in certain situations, or the petition includes questions that are dictated by public welfare or demanded by the broader interest of justice.112'As will be discussed momentarily, this Court finds that all these cited exceptions prevail so as to justify the exercise of the Court's original jurisdiction.
Going back to the propriety of a Rule 65 petition, this Court's pronouncement in'Francisco, Jr., et al. v. Toll Regulatory Board, et al.113'is instructive. There, this Court considered the petitions for'certiorari'and prohibition as appropriate, considering that petitioners ascribed grave abuse of discretion against the Toll Regulatory Board (TRB) for entering into contracts or agreements without the required public bidding mandated by law, among others. The Court explained:
Petitions for'certiorari'and prohibition are, as here, appropriate remedies to raise constitutional issues and to review and/or prohibit or nullify, when proper, acts of legislative and executive officials. The present petitions allege that then President Ramos had exercised vis-'-vis an assignment of franchise, a function legislative in character. As alleged, too, the TRB, in the guise of entering into contracts or agreements with PNCC and other juridical entities, virtually enlarged, modified to the core and/or extended the statutory franchise of PNCC, thereby usurping a legislative prerogative. The usurpation came in the form of executing the assailed STOAs and the issuance of TOCs. Grave abuse of discretion is also laid on the doorstep of the TRB for its act of entering into these same contracts or agreements without the required public bidding mandated by law, specifically the BOT Law (R.A. 6957, as amended) and the Government Procurement Reform Act (R.A. 9184).
In fine, the'certiorari'petitions impute on then President Ramos and the TRB, the commission of acts that translate'inter alia'into usurpation of the congressional authority to grant franchises and violation of extant statutes. The petitions make a'prima facie'case for'certiorari'and prohibition; an actual case or controversy ripe for judicial review exists. Verily, when an act of a branch of government is seriously alleged to have infringed the Constitution, it becomes not only the right but in fact the duty of the judiciary to settle the dispute. In doing so, the judiciary merely defends the sanctity of its duties and powers under the Constitution.114'(Citations omitted)
As in this case, petitioners likewise ascribe grave abuse of discretion against: (1) public respondent DOTC Secretary Abaya for issuing D.O. No. 2014-014 when he had no jurisdiction to decide on the issue of rate hikes;115'and (2) the LRTA, for having no authority to approve fare rate increases for the LRT system.116'According to petitioners, D.O. No. 2014-014 was issued with grave abuse of discretion for violating the due process requirements of notice and hearing117'and for being unreasonable.118'They argue that the fare hike as a policy choice is in grave abuse of discretion.119'Additionally, they seek that public respondents be enjoined from implementing D.O. No. 2014-014. Thus, this Court finds the petitions for'certiorari'and prohibition as appropriate remedies. Nonetheless, petitioners must still comply with the requisites for judicial review.
This Court's power of judicial review
Although "[i]t is emphatically the province and duty of the judicial department to say what the law is,"120'the power of judicial review does not exist in a vacuum. Questions involving the constitutionality or validity of a law or governmental act may only be heard and decided by this Court provided that the requirements for judicial inquiry are complied with,121'which are: "(a) there must be an actual case or controversy calling for the exercise of judicial power; (b) the person challenging the act must have the standing to question the validity of the subject act or issuance; (c) the question of constitutionality must be raised at the earliest opportunity; and (d) the issue of constitutionality must be the very'lis mota'of the case."122'The power of judicial review is limited by these four exacting requisites.123
Justiciability
Preliminarily, this Court deems it proper to address respondents' assertion that this Court has no jurisdiction over the consolidated Petitions on the ground that the issues raised involve a question of wisdom and policy.
Public respondents DOTC Secretary Abaya and Renato Z. San Jose, the Officer-in-Charge of the MRT-3 Office, posit that the fare adjustment was a policy change.124'They maintain that there is no right to demand a government subsidy because questions of whom to subsidize and which socio-economic objectives to advance are policy choices determined by the political departments.125'That benefits were previously enjoyed by certain sectors in the country is not a ground to judicially compel the government to adhere to the same policy.126'Since the fare adjustment under D.O. No. 2014-014 is operationally equivalent to a reduction of government subsidy, the policy cannot be judicially constrained.127
Private respondents LRMC and MRTC second public respondents' contentions by interposing that what D.O. No. 2014-014 does is merely to announce, for the guidance of the rail systems' riders and the general public, that the DOTC, and therefore, the executive department, will propose a budget for the next fiscal year that will reduce the rail systems' subsidies.128'Since D.O. No. 2014-014 simply announces a reduction of government subsidies, rather than a mere upward adjustment of fares for the rail systems, then its issuance is not governed by the jurisdictional and procedural requirements for fare hike applications but by the rules for the grant, maintenance, reduction, or withdrawal of government subsidies.129'Resultantly, there is no prior notice and hearing required for the Executive Department to be able to make that decision and announcement.130
According to private respondents, because the decision to grant subsidies is a discretionary question or a non-ministerial prerogative as to what economic philosophy/policy and program of government an elected administration thinks best to adopt, petitioners can cite no duty on the part of, and so no clear right to enjoin or compel, the Executive and the Legislative Departments to continue providing fare subsidies of whatever amount to the rail system's riders. This means that petitioners may also not enjoin the DOTC from announcing or implementing any Executive decision not to propose, and not to ask the Legislature to approve, a budget earmarking funds to maintain previous subsidies for that class of commuters at their former, or at any other, levels.131'Petitioners' views are competing economic and governance philosophies regarding the wisdom of extending or withholding government subsidies to or from certain beneficiaries under certain circumstances.132'In short, they are economic policy arguments meant for the electorate or halls of Congress.133
We disagree.
Questions of policy or wisdom, oftentimes referred to as political questions, were defined in the early case of'Ta'ada, et al. v. Cuenca, et al.134'as:
[T]hose questions which, under the Constitution, are to be'decided by the people'in their sovereign capacity, or in regard to which'full discretionary authority'has been delegated to the Legislature or executive branch of the Government. It is concerned with issues dependent upon the'wisdom,'not legality, of a particular measure.135'(Emphasis in the original).
As a general assertion, the political question doctrine prohibits the courts from interfering with the workings of a co-equal branch of government.136'It is predicated on the principle of separation of powers, such that this Court cannot substitute its judgment and decide a matter which by its nature or by law, is exclusively lodged on the concerned executive or legislative official.137'It rests on prudential considerations138'and serves to preserve the complementary nature of the political and judicial branches to the end of upholding the rights of the general public at all times.139
However, the invocation of the political question doctrine does not automatically prevent this Court from inquiring into and very narrowly and specifically crossing the exclusive domain of the two other branches of government when called upon to exercise power of judicial review. In'Francisco, Jr. v. The House of Representative,140'We emphasized that the expanded scope of judicial power under Section 1, Article VIII of the 1987 Constitution covers questions that are "not truly political in nature," reviewable by the courts if only to the extent of determining whether the political branch acted within the constitutional limits of its powers, thus:
From the foregoing record of the proceedings of the 1986 Constitutional Commission, it is clear that judicial power is not only a power; it is also a'duty, a duty which cannot be abdicated by the mere specter of this creature called the political question doctrine. Chief Justice Concepcion hastened to clarify, however, that Section 1, Article VIII was not intended to do away with "truly political questions." From this clarification it is gathered that there are two species of political questions: (1) "truly political questions" and (2) those which "are not truly political questions."
Truly political questions are thus beyond judicial review, the reason being that respect for the doctrine of separation of powers must be maintained. On the other hand, by virtue of Section 1, Article VIII of the Constitution, courts can review questions which are not truly political in nature.
As pointed out by'amicus curiae'former dean Pacifico Agabin of the UP College of Law, this Court has in fact in a number of cases taken jurisdiction over questions which are not truly political following the effectivity of the present Constitution.
In'Marcos v. Manglapus,'this Court, speaking through Madame Justice Irene Cortes, held:
The present Constitution limits resort to the political question doctrine and broadens the scope of judicial inquiry into areas which the Court, under previous constitutions, would have normally left to the political departments to decide.
In'Bengzon v. Senate Blue Ribbon Committee,'through Justice Teodoro Padilla, this Court declared:
The "allocation of constitutional boundaries" is a task that this Court must perform under the Constitution. Moreover, as held in a recent case,'"(t)he political question doctrine neither interposes an obstacle to judicial determination of the rival claims. The jurisdiction to delimit constitutional boundaries has been given to this Court. It cannot abdicate that obligation mandated by the 1987 Constitution, although said provision by no means does away with the applicability of the principle in appropriate cases."
And in'Daza v. Singson,'speaking through Justice Isagani Cruz, this Court ruled:
In the case now before us, the jurisdictional objection becomes even less tenable and decisive.'The reason is that, even if we were to assume that the issue presented before us was political in nature, we would still not be precluded from resolving it under the expanded jurisdiction conferred upon us that now covers, in proper cases, even the political question.
Section 1, Article VIII, of the Court does not define what are justiciable political questions and non-justiciable political questions, however. Identification of these two species of political questions may be problematic. There has been no clear standard. The American case of'Baker v. Carr'attempts to provide some:
x x x Prominent on the surface of any case held to involve a political question is found a'textually demonstrable constitutional commitment'of the issue to a coordinate political department; or a'lack of judicially discoverable and manageable standards for resolving it;'or the'impossibility of deciding without an initial policy determination of a kind clearly for non-judicial discretion; or the impossibility of a court's undertaking independent resolution without expressing lack of the respect due coordinate branches of government;'or an'unusual need for questioning adherence to a political decision already made;'or the'potentiality of embarrassment from multifarious pronouncements by various departments on one question.
Of these standards, the more reliable have been the first three: (1) a textually demonstrable constitutional commitment of the issue to a coordinate political department; (2) the lack of judicially discoverable and manageable standards for resolving it; and (3) the impossibility of deciding without an initial policy determination of a kind clearly for non-judicial discretion. These standards are not separate and distinct concepts but are interrelated to each in that the presence of one strengthens the conclusion that the others are also present.
The problem in applying the foregoing standards is that the American concept of judicial review is radically different from our current concept, for Section 1, Article VIII of the Constitution provides our courts with far less discretion in determining whether they should pass upon a constitutional issue.
In our jurisdiction, the determination of a truly political question from a non-justiciable political question lies in the answer to the question of whether there are constitutionally imposed limits on powers or functions conferred upon political bodies. If there are, then our courts are duty-bound to examine whether the branch or instrumentality of the government properly acted within such limits.'141'(Emphasis supplied)
Indeed, the 1987 Constitution greatly limited the applicability of the political question doctrine when it expanded the court's power of judicial review to include the determination of whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the government. As it is, the political question doctrine is "no longer [an] insurmountable obstacle of judicial power" which protects executive and legislative actions from judicial review.142'Thus, while this Court cannot substitute its judgment for that of the executive or legislative branches, it may look into the question whether the exercise of their power has been made in grave abuse of discretion.143
It is accurate to point out that the grant or withdrawal of subsidy to government projects involves a question of policy or wisdom. The grant of subsidy and/or budget to various government activities and programs goes through the national budgeting process, a function that is shared exclusively between the executive and legislative department. Thus, the Executive Branch determines the government budgetary priorities and activities in line with available revenues and borrowing limits. The Congress, in turn, deliberates and acts on the budget proposals of the President.144'Once the Congress approves the national budget and legislates the General Appropriations Act, the executive department "exercises all roles and prerogatives" in the implementation and enforcement thereof, unless otherwise provided by the Constitution.145'In this regard, this Court, in'Araullo, et al. v. Pres. Aquino, et al.,146'recognized that the President, "in keeping with [his/her] duty to faithfully execute laws," has "sufficient discretion during the execution of the budget to adapt the budget to changes in the country's economic situation."147
Evidently, the decision on whether to grant, withdraw, or reduce government subsidy is a question of economic policy cognizable only by the executive and legislative departments. It involves an evaluation of various socio-economic factors and an examination of factual considerations matters which are simply beyond the competence of this Court.
In the present case, while D.O. No. 2014-014 has for its purpose the reduction of government subsidy, the determination of the actual rates thereunder involved rate-fixing principles. Indeed, the objective was for the rates to be updated and sustainable enough to cover a huge portion of the operating costs of the system, to the end that government subsidy of the individual fares will be considerably lessened. Respondents themselves mentioned that some of the key decision points for the fare adjustment under D.O. No. 2014-014 were: (1) non-alignment of the LRT and MRT fares with those of road-based public utility vehicles;148'and (2) improvement of facilities and continuous provision of better services with the LRTA's investment on rehabilitation and upgrading of the system.149
In other words, the fare adjustment under D.O. No. 2014-014 was not simply an outright result of a decrease in government subsidy. On the contrary, the rates thereunder were arrived at after consideration and balancing of economic factors and interests. It was, to be sure, an exercise of the DOTC's and the LRTA's rate-fixing power which called "for a technical examination and a specialized review of specific details primarily entrusted to the administrative or regulating authority."150'As it involved rate-fixing, the issuance of D.O. No. 2014-014 necessarily warranted compliance with the requirements provided by the law.
Verily, the present case does not involve purely questions of policy or wisdom. What is involved here is the administrative agencies' rate-fixing power, the exercise of which is circumscribed by specific requirements of law. In other words, the question is whether or not there has been grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the government, over which this Court undoubtedly has jurisdiction.
More significantly, petitioners raise a grave violation of the Constitution and domestic laws as a result of the fare increase for the LRT and the MRT. The issue, therefore, is "judicial rather than political."151'Indeed, when a case is brought before this Court with serious allegations that a law or executive issuance infringes upon the Constitution, "it becomes not only the right but in fact the duty of the [Court] to settle the dispute."152
Actual case or controversy
In'Belgica, et al. v. Hon. Sec. Ochoa, et al.,153'the Court elucidated on the requirement of an actual case or controversy, in connection with ripeness, thus:
... Jurisprudence provides that an actual case or controversy is one which "involves a conflict of legal rights, an assertion of opposite legal claims, susceptible of judicial resolution as distinguished from a hypothetical or abstract difference or dispute." In other words, "[t]here must be'a contrariety of legal rights that can be interpreted and enforced on the basis of existing law and jurisprudence." Related to the requirement of an actual case or controversy is the requirement of "ripeness," meaning that the questions raised for constitutional scrutiny are already ripe for adjudication. "A question is ripe for adjudication when the act being challenged has had a direct adverse effect on the individual challenging it. It is a prerequisite that something had then been accomplished or performed by either branch before a court may come into the picture, and the petitioner must allege the'existence of an immediate or threatened injury to itself as a result of the challenged action." "Withal, courts will decline to pass upon constitutional issues through advisory opinions, bereft as they are of authority to resolve hypothetical or moot questions."154'(Emphasis supplied; Citations omitted)
There is an actual case or controversy in the present case. The parties do not dispute that D.O. No. 2014-014 has already been implemented as of January 4, 2015. Petitioners' insistence on the nullity of D.O. No. 2014-014 and respondents' assertion of its validity, together with the grounds in support of their respective arguments, portray their conflicting legal rights. Petitioners, on the one hand, claim that the fare increase brought about by D.O. No. 2014-014 violated their right to due process for having been issued without notice and hearing.155'They also posit that public respondents DOTC and LRTA acted with grave abuse of discretion by acting beyond the scope of their jurisdiction. Respondents, on the other hand, argue that the implementation of the fare adjustment scheme did not require notice and hearing156'and that petitioners do not have any right to demand a government subsidy.157
These polarizing views on the alleged nullity of D.O. No. 2014-014 can be interpreted and enforced based on existing law and jurisprudence and, therefore, make it a case susceptible of judicial resolution. In fact, D.O. No. 2014-014 has been in force and effect for almost eight (8) years now. This also makes it ripe for adjudication, as the injury is neither merely immediate nor threatened; it is currently being endured.
Ripeness
As mentioned above, closely related to the requirement of an actual case or controversy is the element of ripeness, that is, whether the constitutional questions raised before the court are ripe for adjudication. A case that is ripe for adjudication presupposes that "something had by then been accomplished or performed by either branch [of government],"158'at which point the Court may step in and determine the validity of the assailed act. The element of ripeness, "as an aspect of the timing of a case or controversy," is essential whether the petition for'certiorari'assailing a government act was filed under Rule 65 of the Rules of Court or pursuant to the expanded jurisdiction of this Court under the Constitution.159
In dealing with ripeness, this Court has consistently inquired into whether the "act being challenged has had a direct adverse effect on the individual challenging it."160'In'Atty. Lozano, et al. v. Speaker Nograles,161'this Court also said that whether a case is ripe for adjudication is determined by an evaluation of two aspects: "first, the fitness of the issues for judicial decision; and second, the hardship to the parties entailed by withholding court consideration."162
With respect particularly to the acts of administrative agencies, this Court, in'Kilusang Mayo Uno, et al. v. Hon. Aquino, et al.,163'said that "ripeness is ensured under the doctrine of exhaustion of administrative remedies."164'The doctrine precludes the court from taking cognizance of a case unless all remedies within the administrative machinery have been exhausted by the petitioner. It allows administrative officers "every opportunity to decide a matter that comes within [their] jurisdiction."165'Indeed, failure to exhaust administrative remedies available is fatal to a party's cause of action and absent a finding of waiver or estoppel, renders the case dismissible for lack of cause of action.166'In'Association of Medical Clinics for Overseas Workers, Inc. (AMCOW) v. GCC Approved Medical Centers Association, Inc.,167'this Court ruled that the doctrine finds application in a petition for'certiorari'questioning the act of an administrative agency, without distinction on whether the act is quasi-judicial, quasi-legislative, or purely regulatory in nature.168
Admittedly, petitioners in the present case failed to establish that they availed of any administrative remedy before seeking relief from this Court. The records do not show that petitioners previously asked for reconsideration from the DOTC, the LRTA, or the Office of the President regarding the issuance of D.O. No. 2014-014. Nevertheless, the doctrine of exhaustion of administrative remedies, grounded on sound public policy and practical considerations, is not an inflexible rule.169'In'Spouses Chua v. Hon. Ang, et al.,170'the Court held that prior exhaustion of administrative remedies may be dispensed with:
(a) when there is a violation of due process; (b)'when the issue involved is purely a legal question;'(c) when the administrative action is patently illegal amounting to lack or excess of jurisdiction; (d) when there is estoppel on the part of the administrative agency concerned; (e) when there is irreparable injury; (f)'when the respondent is a department secretary whose acts as an alter ego of the President bear the implied and assumed approval of the latter;'(g) when to require exhaustion of administrative remedies would be unreasonable; (h) when it would amount to a nullification of a claim; (i) when the subject matter is a private land in land case proceedings; (j) when the rule does not provide a plain, speedy and adequate remedy; or (k) when there are circumstances indicating the urgency of judicial intervention.171'(Emphasis supplied)
This Court finds the presence of three (3) compelling reasons why petitioners' non-exhaustion of administrative remedies and direct resort to this Court are justified in the present case.
First,'the question raised by petitioners,'i.e.,'the validity and constitutionality of the fare increase under D.O. No. 2014-014, is purely legal since "it does not involve an examination of the probative value of the evidence presented by the parties" and "does not require technical knowledge and experience but one that would involve the interpretation and application of law."172'Indeed, the issues surrounding the issuance of D.O. No. 2014-014 may be resolved by this Court based on prevailing law and jurisprudence.
Second,'D.O. No. 2014-014 was issued by public respondent DOTC Secretary Abaya, whose acts as an alter ego bear the implied and assumed approval of the president. In any event, former President Aquino III himself, during his SONA on July 22, 2013, announced the need to increase the LRT and MRT fares in order to decrease government subsidy and allocate more budget for other social services.
Third,'the records disclose that the first petition, docketed as G.R. No. 215650, was filed on January 5, 2015. Considering that this case has been pending for more than seven (7) years, the interests of justice dictate that it be resolved now, lest further harm and injury be inflicted on petitioners who claim to be directly affected by the fare increase under D.O. No. 2014-014. The public interest involved in the issues raised justifies a departure from the established rule and calls for a speedy resolution of the case that will ultimately need to be resolved by this Court.
Locus standi
If the constitutional question or assailed illegal act is not brought by a party who has'locus standi,'or the standing to challenge it, then the Court may still refuse to exercise judicial review.173'The definition of'locus standi'is straightforward. It is simply a "right of appearance in a court of justice on a given question."174'In public suits, however, the determination of'locus standi'becomes more difficult.175'The plaintiff, who is a representative of the public, may be a citizen or a taxpayer, in which case, he or she must show entitlement to seek judicial protection.176
In recent times, the judicial landscape has allowed both citizen and taxpayer standing in public suits, but against such suits the aggrieved plaintiff must show a direct injury.177'This Court enumerated:
To have standing, one must establish that he has a "personal and substantial interest in the case such that he has sustained, or will sustain, direct injury as a result of its enforcement." Particularly, he must show that (1) he has suffered some actual or threatened injury as a result of the allegedly illegal conduct of the government; (2) the injury is fairly traceable to the challenged action; and (3) the injury is likely to be redressed by a favorable action.178'(Citations omitted)
The petitioners come before this Court as concerned citizens, taxpayers, various organizations of workers, students, and the youth, labor groups and unions, regular commuters, or members of the commuting public, and either former or present members of the House of Representatives. Regarding taxpayers, public respondent DOTC Secretary Abaya argues that petitioners cannot sue as such because DO No. 2014-014 is neither a tax measure nor a form of disbursement of public funds.179'Respondent LRMC, on the other hand, contends that petitioners as taxpayers do not challenge the unlawful use of public funds but seek to compel the use of public funds to benefit their own limited class.180'As for the members of the House of Representatives, public respondent DOTC Secretary Abaya also posits that they do not have standing as legislators because they did not allege that there was a usurpation of the powers of Congress as a body to which they belong as members.181'Finally, most of respondents are in accord that DO No. 2014-014 merely implements a reduction of government subsidy, although resulting in the adjustment of fares.182
True, DO No. 2014-014 may neither be a tax measure nor a form of disbursement of public funds. Taxpayer suits, however, are broad enough to include claims "that public funds are illegally disbursed or that public money is being deflected to any improper purpose, or that public funds are wasted through the enforcement of an invalid or unconstitutional law."183'Respondents do not deny, in fact they passionately profess, that DO No. 2014-014 is a reduction of government subsidy. The 2nd'paragraph of DO No. 2014- 014 states:
It is envisioned that this fare scheme will result in an equitable distribution of'government funds'currently dedicated to subsidizing the operations of the above rail lines in Metro Manila to much-needed development projects and relief operations in other parts of Luzon, the Visayas and Mindanao. (Emphasis and italics supplied)
That these government funds are being re-directed to unknown development projects and relief operations in other parts of the country is enough to bring a taxpayer's suit, considering that public money is under threat of being deflected to an improper purpose. These subsidies are still government funds emanating from the National Treasury, the coffers of which petitioners as taxpayers religiously contribute to.
Then again, "the rule on standing is a matter of procedural technicality, which may be relaxed when the subject in issue or the legal question to be resolved is of transcendental importance to the public."184'In'Francisco, Jr., et al. v. Toll Regulatory Board, et al.,185'this Court acknowledged that the other petitioners, as taxpayers and/or mere users of the tollways or representatives of such users, would ordinarily not be clothed with the requisite standing, nevertheless, it relaxed the rule on'locus standi'"owing to the transcendental importance and the paramount public interest in the implementation of the laws on the Luzon tollways, a roadway complex used daily by hundreds of thousands of motorists."186
Similarly, the issue in the present case, involving as it does the LRT and the MRT, is of transcendental importance. True, "transcendental importance" is not a magic wand that can be waived to prompt the Court to act liberally and imbue petitioners with standing where they possess none, but the paramount public interest in the implementation of the laws on the rail transit systems cannot be denied. The preamble of E.O. No 603, the law creating the LRTA, has itself recognized:
WHEREAS,'the economic growth, stability and security of the Nation require an efficient, adequate, economical, safe, convenient, and dependable transportation system that shall truly be responsive to the demands of the populace consistent with the total scope of metropolitan needs;
WHEREAS, Metropolitan Manila, as the premier metropolis of the country,'requires an efficient mass transportation system which can provide its people with safe, fast and reliable mobility;
WHEREAS, a Metropolitan Manila transportation, land use and development planning study was conducted to guide transportation investments and operations, and such study indicates that a light rail transit system is recommended, among others, to alleviate the worsening traffic and transportation situation in Metropolitan Manila, within the context of a rational land use pattern;
. . . (Emphasis and italics supplied)
In declaring that the LRTA is a government instrumentality exercising corporate powers and therefore, exempt from real property tax, this Court in'Light Rail Transit Authority v. Quezon City187'declared that the light rail transit undoubtedly performs a crucial role in the lives of the people in Metro Manila:
As both a matter of social data and acceptable legal reasoning, it is erroneous to conclude that to date, the LRTA has been engaged in profit-making business. More than ever, its gargantuan tasks are to establish and operate a viable public transportation system via the light rail trains to address the demands of the riding public and to alleviate the worsening traffic and transportation situation at least in Metro Manila.
Given the mandate and purpose of the LRTA, it stands to reason that the LRTA's railroads, carriageways, terminal stations, and the lots on which they are found and/or constructed are properties of public dominion intended for public use. As such, they are exempt from real property tax under Section 234 (a) of the Local Government Code.
. . . .
The light rail transit system is one of the major means of transportation in Metro Manila. The bulk of public commuters takes the light rail transit to go to and from their residences and places of work and other places of social interaction.
Undoubtedly, the light rail transit performs a crucial role in the lives of the people in Metro Manila. And the fact that by necessary implication, it has to pass through several local government units, the protection accorded to properties of public dominion for public use must be extended to the LRTA and its properties. xx x188'(Citations omitted)
Prof David v. Pres. Macapagal-Arroyo189'reminded the bench, the bar, and the public that "the question of'locus standi'is but corollary to the bigger question of proper exercise of judicial power. This is the underlying legal tenet of the 'liberality doctrine' on legal standing."190'Given the notability of the rail transit systems' role in providing mass transportation to millions of Filipinos in the metro, this Court will shirk its avowed duty to render justice through the law if it were to pass upon an issue as vital as the one involved here. In the interest of judicial economy,191'this Court will not evade its Constitutional responsibility to settle, once and for all, the issue of the alleged invalidity of these transit systems' fare increases.
II (A).
The DOTC has the authority to implement a fare increase over the MRT-3
Petitioners BAYAN'et al.'argue that public respondent DOTC Secretary Abaya issued D.O. No. 2014-014 without jurisdiction.192'As such, it is void and without legal effect.193'They cite 5 reasons why:'first, the DOTC is the contracting party of the MRTC in the Build-Lease-Transfer Agreement;194'second, the DOTC agreed to recommendations made by an amorphous office, designated as MRT-3 Office;195'third, the DOTC Secretary is the President's alter ego who clings to the latter's penchant for disregarding Congress' duly appropriated item for the light railway transit subsidies;'fourth, there are reports that "the DOTC people" have ties to the private investors, at least, for the LRT-1 and LRT-2 projects;196'and'fifth, public respondents have eliminated themselves from being possible avenues for relief.197'Petitioners BAYAN'et al., however, have not substantiated these arguments. Consequently, they fade in the face of the DOTC's clear authority to implement a fair increase over the railway transit systems. Against petitioners BAYAN'et al.'s speculative arguments are the DOTC's rate-fixing power, galvanized not only in law but also in jurisprudence.
As early as'Ynchausti Steamship Co. v. Public Utility Commissioner,198'this Court has characterized rate-fixing as "a legislative and governmental power over which the Government has complete control."199'Indeed, rate'fixing is "essentially a legislative power."200'In'Philippine Interisland Shipping Association of the Philippines v. Court of Appeals,201'this Court recalled how in the 1920s, there was once a great battle over the validity of the exercise of the rate-fixing power by administrative agencies-an issue of undue delegation arose because the power delegated was legislative.202'But three factors catapulted the creation of administrative agencies and the delegation to them of legislative power-the growing complexity of modern society, the multiplication of the subjects of government regulations, and the increased difficulty of administering the laws.203
Philippine lnterisland'recognized that as then President Marcos could delegate the rate-making power to the Philippine Ports Authority (PPA), having been granted legislative power under Amendment No. 6 of the 1973 Constitution, he could also exercise it in certain instances. In other words, since the power is legislative in nature, then President Marcos had the authority to fix rates for as long as he wielded legislative power. The president's exercise of the power, however, did not imply a withdrawal of the same power vested in the PPA to impose, fix, and prescribe rates through subordinate legislation.
Subordinate legislation is "the rule-making power of agencies tasked with the administration of government."204'In'Quezon City PTCA Federation, Inc. v. Department of Education,205'this Court explained that subordinate legislation is borne out of"the exigencies that contemporary governance must address:"206
The three powers of government-executive, legislative, and judicial-have been generally viewed as non-delegable. However, in recognition of the exigencies that contemporary governance must address, our legal system has recognized the validity of "subordinate legislation," or the rule-making power of agencies tasked with the administration of government. In'Eastern Shipping Lines v. Philippine Overseas Employment Administration:
The principle of non-delegation of powers is applicable to all the three major powers of the Government but is especially important in the case of the legislative power because of the many instances when its delegation is permitted. The occasions are rare when executive or judicial powers have to be delegated by the authorities to which they legally pertain. In the case of the legislative power, however, such occasions have become more and more frequent, if not necessary. This has led to the observation that the delegation of legislative power has become the rule and its non' delegation the exception.
The reason is the increasing complexity of the task of government and the growing inability of the legislature to cope directly with the myriad problems demanding its attention. The growth of society has ramified its activities and created peculiar and sophisticated problems that the legislature cannot be expected reasonably to comprehend. Specialization even in legislation has become necessary. To many of the problems attendant upon present-day undertakings, the legislature may not have the competence to provide the required direct and efficacious, not to say, specific solutions. These solutions may, however, be expected from its delegates, who are supposed to be experts in the particular fields assigned to them.
The reasons given above for the delegation of legislative powers in general are particularly applicable to administrative bodies. With the proliferation of specialized activities and their attendant peculiar problems, the national legislature has found it more and more necessary to entrust to administrative agencies the authority to issue rules to carry out the general provisions of the statute. This is called the "power of subordinate legislation."
With this power, administrative bodies may implement the broad policies laid down in a statute by "filling in" the details which the Congress may not have the opportunity or competence to provide. This is effected by their promulgation of what are known as supplementary regulations, such as the implementing rules issued by the Department of Labor on the new Labor Code. These regulations have the force and effect of law."
Administrative agencies, however, are not given unfettered power to promulgate rules. As noted in'Gerochi v. Department of Energy, two requisites must be satisfied in order that rules issued by administrative agencies may be considered valid: the completeness test and the sufficient standard test:
In the face of the increasing complexity of modern life, delegation of legislative power to various specialized administrative agencies is allowed as an exception to this principle. Given the volume and variety of interactions in today's society, it is doubtful if the legislature can promulgate laws that will deal adequately with and respond promptly to the minutiae of everyday life. Hence, the need to delegate to administrative bodies-the principal agencies tasked to execute laws in their specialized fields-the authority to promulgate rules and regulations to implement a given statute and effectuate its policies.'All that is required for the valid exercise of this power of subordinate legislation is that the regulation be germane to the objects and purposes of the law and that the regulation be not in contradiction to, but in conformity with, the standards prescribed by the law. These requirements are denominated as the'completeness test'and the'sufficient standard test."207'(Emphasis supplied; Citations omitted)
The exercise of subordinate legislation must always be circumscribed by the completeness test and the sufficient standard test.208'For a valid delegation of legislative power, the legislature must have: (1) set forth the policy to be executed, carried out, or implemented by the delegate; and (2) prescribed sufficient guidelines or limitations in the law to map out the boundaries of the delegate's authority.209'Thus, when an administrative agency establishes a rate, "its act must both be non-confiscatory and must have been established in the manner prescribed by the legislature; otherwise, in the absence of a fixed standard, the delegation of power becomes unconstitutional."210
Petitioners'Bayan Muna'et al.'contend that the DOTC has no authority to regulate fare schedules of the light railway systems in the absence of a statute or law that confers it the power to decide on rate increases.211
This Court disagrees.
The Administrative Code of 1987 sets forth the DOTC's mandate and declared policy:
SECTION 1. Declaration of Policy. - The State is committed to the maintenance and expansion of'viable, efficient, fast, safe and dependable'transportation and communications systems as effective instruments for national recovery and economic progress. It shall not compete as a matter of policy with private enterprise and shall operate transportation and communications facilities only in those areas where private initiatives are inadequate or non-existent.
SECTION 2.'Mandate.-The Department of Transportation and Communications shall be the primary policy, planning, programming, coordinating, implementing, regulating and administrative entity of the Executive Branch of the government in the promotion, development and regulation of'dependable and coordinated'networks of transportation and communications systems as well as in the'fast, safe, efficient and reliable'postal, transportation and communications services.212'(Emphasis supplied)
To pursue such mandate, Section 3 (15), Chapter 1, Title XV, Book IV vested in the Department the power, among others, to:
SECTION 3.'Powers and Functions.--To accomplish its mandate, the Department shall:
(15)'Determine, fix or prescribe charges or rates pertinent'to postal services and'to the operation of public air and land transportation utility facilities and services,'except such rates or charges as may be prescribed by the Civil Aeronautics Board under its charter and, in cases where charges or rates are established by international bodies or associations of which the Philippines is a participating member or by bodies or associations recognized by the Philippine government as the proper arbiter of such charges or rates;
... (Emphasis supplied)
Further, the Administrative Code of 1987 has vested in the secretaries of each department the authority and responsibility for the exercise of the mandate of the department and for the discharge of its powers and functions.213'The department secretary shall have supervision and control over the department.214
Concomitantly, the same Code has granted the department secretaries the express power to:
SECTION 7.'Powers and Functions of the Secretary.'- The Secretary shall:
. . .
(3) Promulgate rules and regulations necessary to carry out department objectives, policies, functions, plans, programs and projects;
. . .215
Considering all the foregoing provisions, the then DOTC, in the exercise of its rate-fixing and rule-making power, is limited by the DOTC's declared policy and mandate - viability, efficiency, speed, safety, dependability, and reliability. In other words, the legislature validly delegated its rate-fixing power to the DOTC, such power having been appropriately circumscribed by complete policies and sufficient guidelines. Anyhow, this Court has ruled that when it comes to rate-fixing, "the only standard which the legislature is required to prescribe for the guidance of the administrative authority is that the rate be reasonable and just."216'In the absence of an express requirement as to reasonableness, the standard is considered implied.217
Clearly, public respondent DOTC Secretary Abaya merely exercised such rate-fixing and rule-making authority through subordinate regulation by promulgating D.O. No. 2014-014, or "Light Right Transit (LRT) Lines 1 & 2 and Metro Rail Transit (MRT) Line 3 Fare Adjustment."
The then DOTC's power to determine, fix, or prescribe charges or rates undoubtedly extends to the MRT-3, LRT-1, and LRT-2. Without a doubt, these railway transit systems fall within the purview of "public land transportation utility facilities and services" over which the DOTC can exercise its rate-fixing power pursuant to Section 3(15), Chapter 1, Title XV, Book IV of the Administrative Code of 1987. Yet, with respect to the LRT, the power of the DOTC is limited by the LRTA's authority to prescribe its fares under its own charter.
The LRTA has the authority to implement a fare increase over LRT-1 and LRT-2
To recall, E.O. No. 603 dated July 12, 1980 created the LRTA as the agency "primarily responsible for the construction, operation, maintenance, and/or lease of light rail systems in the Philippines."218'Upon the issuance of the Administrative Code of 1987, the LRTA was designated as an attached agency of the then DOTC.219'As an attached agency, the LRTA was mandated to continue to operate and function in accordance with its charter, E.O. No. 603, except insofar as it conflicts with the provisions of the Code.220
Under Article 2, Section 4 of E.O. No. 603, the general powers of the LRTA, which shall be exercised by its Board of Directors, are:
SEC. 4.'General Powers.'- The Authority, through the Board of Directors, may undertake such action as are expedient for or conducive to the attainment of the purposes and objectives of the Authority, or of any purpose reasonably incidental to or consequential upon any of these purposes. As such, the Authority shall have the following general powers:
(13) To determine the fares payable by persons travelling on the light rail system, in consultation with the Board of Transportation;
(16) To exercise such powers and perform such duties as may be necessary to carry out the business and purposes for which the Authority was established or which from time to time, may be declared by the Board of Directors to be necessary, useful, incidental or auxiliary to accomplish such purposes; and generally, to exercise all powers of an Authority under the Corporation Law that are not inconsistent with the provisions of this Order, or with orders pertaining to government corporate budgeting, organization, borrowing, or compensation. (Emphasis supplied)
Clearly, E.O. No. 603 vests the LRTA with the authority to determine the fares for the light rail system, subject only to consultation with the defunct Board of Transportation, the functions and powers of which are now exercised by the LTFRB. In the present case, the LRTA exercised this power when its Board of Directors issued a Resolution providing for the increase of fares for LRT-1 and LRT-2 under D.O. No. 2014-014, duly concurred in by the LTFRB.
Petitioners'Bayan Muna'et al.'argue that in any case, the LRTA cannot implement fare increases for the light rail system without government regulation. They insist that the power of the LRTA to determine fares under Section 4(13) of E.O. No. 603 should be read in connection with the purpose of the LRTA as a government owned and controlled corporation (GOCC), which is primarily proprietary in nature. Thus, while the LRTA is authorized to determine fares, this may be implemented only upon the approval of a regulatory agency. Otherwise, it would be contrary to public policy and detrimental to public interest if the LRTA is allowed to unilaterally increase its fares.221
In'Light Rail Transit Authority v. Quezon City,222'this Court already ruled that the LRTA cannot be classified as a GOCC because it was not organized as a stock or non-stock corporation. The LRTA is actually a government instrumentality vested with corporate powers because'first,'it performs functions which are "less commercial than governmental, and more for public use and public welfare than for profit-oriented service," and'second,'"it enjoys operational autonomy, as it exists by virtue of its Charter, and its powers and functions are vested in and exercised by its Board of Directors."223
More importantly, in the same case, this Court had the opportunity to revisit its earlier ruling in'Light Rail Transit Authority v. Central Board of Assessment Appeals (LRTA-CBAA Case),224'where the LRTA was found to be "engaged in a service-oriented commercial endeavor," and was therefore liable for payment of real property tax for its patrimonial properties, particularly its carriageways and terminal stations.225'We said that the ruling in the LRTA-CBAA Case must now be understood in light of the developments brought about by this Court's decision in'Manila International Airport Authority'(MIAA) v. Court of Appeals,226'promulgated on July 20, 2006. In finding anew that the LRTA is "not engaged in a profit-earning business like a private corporation," this Court said in'Light Rail Transit Authority v. Quezon City:227
. . .'LRTA v. CBOA'held that LRTA was engaged in an ordinary business because it was charging fees for the use of its properties. This reasoning no longer holds water. We adopt in full the disquisition of the En Banc in'MIAA v. CA:
The Airport Lands and Buildings are devoted to public use because they are used by the public for international and domestic travel and transportation. The fact that the MIAA collects terminal fees and other charges from the public does not remove the character of the Airport Lands and Buildings as properties for public use. The operation by the government of a tollway does not change the character of the road as one for public use. Someone must pay for the maintenance of the road, either the public indirectly through the taxes they pay the government, or only those among the public who actually use the road through the toll fees they pay upon using the road. The tollway system is even a more efficient and equitable manner of taxing the public for the maintenance of public roads.
The charging of fees to the public does not determine the character of the property whether it is of public dominion or not. Article 420 of the Civil Code defines property of public dominion as one "intended for public use." Even if the government collects toll fees, the road is still "intended for public use" if anyone can use the road under the same terms and conditions as the rest of the public. The charging of fees, the limitation on the kind of vehicles that can use the road, the speed restrictions and other conditions for the use of the road do not affect the public character of the road.
The terminal fees MIAA charges to passengers, as well as the landing fees MIAA charges to airlines, constitute the bulk of the income that maintains the operations of MIAA.
The collection of such fees does not change the character of MIAA as an airport for public use. Such fees are often termed user's tax. This means taxing those among the public who actually use a public facility instead of taxing all the public including those who never use the particular public facility. A user's tax is more equitable- a principle of taxation mandated in the 1987 Constitution.
Verily,'MIAA v. CA'relevantly addresses the present social milieu which the provision of public transportation plays in the lives of our people. Indeed, with so much public expenses to take care of, the government cannot be left alone to fully fund all public services which are essential to the viability of our communities, most especially our means of public transportation. Hence, the mere fact that consumers must pay all, or in the case of the operations of our light rail transit, some of the expenses, should not detract from the nature of the service the government entity offers or the characterization of all the infrastructure which the operations require.
To be sure, the LRTA and its properties are tasked to establish the light rail transit in the country. To pursue this mandate and purpose, the LRTA pioneered the construction of light rail transit infrastructure, which was financed through foreign loans. The revenues from the LRTA operations were designed to pay for the loans incurred for its construction. The LRTA operations were intended as a public utility rather than as a profit-making mechanism. The income which the LRTA generates is being used for its operations, especially the maintenance of rail tracks and trains. Section 2 of EO 603 provides for the re-capitalization of excess revenues and for such other purposes that will enhance the LRTA's mandate and purpose:
The Authority shall conduct its business, according to prudent commercial principles and shall ensure, as far as possible, that its revenues for any given year are, at least sufficient to meet its expenditures. Any excess of revenues over expenditure in any fiscal year may be applied by the Authority in any way consistent with this Order, including such provisions for the renewal of capital assets and the repayment of loans, as the Authority may consider prudent.
Based on an independent 2008-2009 field survey report, the LRTA income barely covered costs for operating expenses. The operating profit from the operation of Lines 1 and 2 was in a deficit. Reasons for plus net income in certain years were due to foreign exchange gain and infusion of subsidies from the government.
As both a matter of social data and acceptable legal reasoning, it is erroneous to conclude that'to date, the LRTA has been engaged in profit' making business.'More than ever,'its gargantuan tasks are to establish and operate a viable public transportation system via the light rail trains to address the demands of the riding public and to alleviate the worsening traffic and transportation situation at least in Metro Manila.228'(Emphasis in the original)
Thus, it is now settled that the LRTA is a service entity created for a public purpose, that is, to ensure the reliability and quality of the light rail systems in the country for the benefit of the riding public and motorists around the metro. The LRTA's power to impose the fares for the use of the light rail systems is not pursuant to a commercial or profit-making venture, but is actually incidental and necessary to achieve the public purpose for which it was created. Contrary to petitioners' insistence, therefore, the LRTA's implementation of a fare increase for the light rail systems need not be approved by a separate regulatory agency to be valid. Its power in this regard is complete in itself and is conferred by no less than its charter, E.O. No. 603. On this score, it is necessary to stress that the rate-fixing power of the LRTA, similar to the DOTC's, is in the nature of subordinate legislation.
E.O. No. 603 was issued by President Marcos pursuant to Presidential Decree No. 1416 (P.D. No. 1416),229'which granted the president the continuing authority to reorganize the national government. P.D. No. 1416, to recall, was promulgated on June 9, 1978 in the exercise of President Marcos' legislative powers under Section 3(2) of Article XVII of the 1973 Constitution,230'and consequently, had the force and effect of law at the time.231'The preamble of P.D. No. 1416 states:
WHEREAS, the organizational structure of the national government should continuously be attuned and responsive to the current needs and requirements of the national development program;
WHEREAS, there is a need to periodically review the organizational structure in order that needed administrative reforms can be expeditiously effected to attain an efficient government machinery;
WHEREAS, it is'necessary to effect economy and promote efficiency in the government[.]
Specifically, P.D. No. 1416 allowed the President, at his discretion, to "[a]bolish departments, offices, agencies or functions which may not be necessary,'or create those which are necessary, for the efficient conduct of government functions, services and activities,"232'among others. In'Larin v. Executive Secretary,233'this Court recognized P.D. No. 1416, later expanded by P.D. No. 1772,234'as a valid source of the president's "power to group, consolidate bureaus and agencies, to abolish offices, to transfer functions, to create and classify functions, services and activities and to standardize salaries and materials" in the national government.235
Thus, it is clear that there is a valid delegation of legislative power to the LRTA to fix the rates for the LRT-1 and the LRT-2. This power is circumscribed by a standard that is found in the policy underlying the grant to the President of the authority to reorganize the national government-to effect economy and promote efficiency in the government, as well as in the conduct of its functions, services and activities. To be sure, as early as the case of'Cervantes v. Auditor General,236'this Court already considered the promotion of "simplicity, economy, and efficiency" in operations as sufficient standard for the delegation of legislative power to the president to create the defunct Government Enterprises Council in order to effect reforms and changes in government owned and controlled corporations.237
All told, the authority of the DOTC and the LRTA to impose and regulate the fares for the MRT and the LRT, respectively, is beyond cavil. In fact, this Court has ruled that the grant of rate-fixing powers to administrative agencies is "now commonplace."238'In holding that the TRB, LTFRB, National Telecommunications Commission, and Energy Regulatory Commission (ERC) all exercise similar delegated rate-fixing powers, this Court in'Francisco, Jr., et al. v. Toll Regulatory Board, et al.239'recognized the crucial role played by administrative bodies vested with more expertise and specialized knowledge and even acknowledged their position in the bureaucracy as the "fourth department of the government."240
The LTFRB does not have the authority to implement and/or adjudicate fare increases for the rail transit system
The rate-fixing authority of the DOTC and the LRTA having been established, this Court finds it necessary, in order to obviate any lingering questions on the matter, to clarify the extent of the LTFRB' s regulatory powers over fare, rates, and charges of public land transportation services, which petitioners Joseph Ejercito'et al.'insist extend to the operation of rail transit systems.
Briefly, petitioners Joseph Ejercito'et al.'posit that E.O. No. 125-A gave the DOTC mere direct line supervision and control over its regional offices and the duty to formulate, develop, and implement its plans, policies, programs, and projects. They allege that under E.O. No. 202, the quasi'-judicial powers and functions to adjudicate fare adjustments of the DOTC are transferred to the LTFRB. Consequently, it is now the LTFRB which has the power to impose and implement any fare increase for the MRT and the LRT.241
The LTFRB was created by virtue of E.O. No. 202 signed by President Corazon C. Aquino on June 19, 1987. It is under the administrative control and supervision of the DOTC Secretary,242'which also exercises appellate jurisdiction over its decisions, orders, or resolutions.243'Based on Section 5 of E.O. No. 202, the powers and functions of the LTFRB are:
a. To prescribe and regulate routes of service, economically viable capacities and zones or areas of operation I of public land transportation services provided by motorized vehicles in accordance with the public land transportation development plans and programs approved by the Department of Transportation and Communications;
b. To issue, amend, revise, suspend or cancel Certificates of Public Convenience or permits authorizing the operation of public land transportation services provided by motorized vehicles, and to prescribe the appropriate terms and conditions therefor;
c. To determine, prescribe and approve and periodically review and adjust, reasonable fares, rates and other related charges, relative to the operation of'public land transportation services provided by motorized vehicles[.]244
According to Section 5(c) of E.O. No. 202, the power of the LTFRB to determine, prescribe, approve, and periodically review fares, rates, and other related charges applies specifically to the operation of public land transportation services'provided by motorized vehicles.'There can be no issue as to the nature of the LRT and the MRT as a public land transportation service. The question is whether they are considered'motorized vehicles'as to fall under the LTFRB's fare-setting power. Admittedly, E.O. No. 202 does not define what is considered a'motorized vehicle.'The term "motor vehicle" first appeared in R.A. No. 4136245'and was defined as:
(a) "Motor Vehicle" shall mean any vehicle propelled by any power other than muscular power'using the public highways,'but'excepting'road rollers, trolley cars, street-sweepers, sprinklers, lawn mowers, bulldozers, graders, fork-lifts, amphibian trucks, and cranes if not used on public highways,'vehicles which run only on rails or tracks,'and tractors, trailers and traction engines of all kinds used exclusively for agricultural purposes.
R.A. No. 4136 regulates vehicles that use the public highway. It provides for the rules governing application, registration, and operation of these vehicles, as well as licensing of owners, dealers, and driver, and other similar matters. Following the definition under R.A. No. 4136, the MRT and the LRT are not considered motor vehicles since both run on rail or tracks only.
Nevertheless, the extent of the LTFRB 's fare-setting authority may be viewed and understood more clearly in light of its regulatory tool set and the nature of its functions. Under E.O. No. 202, the LTFRB is mandated to regulate the operation of public land transportation services provided by motorized vehicles primarily by a) prescribing and regulating the routes of service, capacities, and zones or areas of operation; and b) issuing, amending, revising, suspending, or canceling Certificates of Public Convenience or permits. Clearly, these regulatory mechanisms apply to entities or persons that are operating or are seeking to operate public transportation utilities. They do not apply to the LRT and the MRT, the nature of which is'sui generis'and unlike any other existing public service or utilities. For one, the routes of service of the LRT and the MRT are already pre-determined by the respective layouts of their rail systems. For another, the operations of the LRT and the MRT do not require a Certificate of Public Convenience or a permit, since they are owned and operated, respectively, by an instrumentality of the national government.246
It should be pointed out that E.O. No. 202 creating the LTFRB was issued prior to the effectivity of the Administrative Code of 1987, which took effect only on July 15, 1987. Under the Administrative Code of 1987, the LRTA was designated as an attached agency of DOTC247'and was expressly allowed to continue operating in accordance with its charter, except insofar as it conflicts with the provisions of the Code.248'In short, the LRTA retained all its powers and functions under E.O. No. 603, including the authority to regulate the fares for the LRT, even after the creation of the LTFRB.
Meanwhile, contrary to petitioners Joseph Ejercito'et al.'s'insistence, E.O. No. 125-A249'granted the DOTC the power to:
(p)'Determine, fix and/or prescribe charges and/or rates pertinent to the operation of public air and land transportation utility facilities and services,'except such rates and/or charges as may be prescribed by the Civil Aeronautics Board under its charter, and, in cases where charges or rates are established by international bodies or associations of which the Philippines is a participating member or by bodies or associations recognized by the Philippine government as the proper arbiter of such charges or rates.250
When the Administrative Code of 1987 took effect, this provision was carried over to the functions and power the DOTC under Book IV, Title XV, Chapter 1, Section 3(15).251'From the foregoing, it is clear that the creation of the LTFRB did not operate to altogether remove the power of the DOTC to regulate the fares of public land transportation utilities and services. On the contrary, the DOTC retained this power, except only to the extent that it has been vested to other administrative agencies like the LRTA, the LTFRB, and the Civil Aeronautics Board.
II (B).
Notice and hearing are required for any fare increase in the LRT and the MRT
This Court is mindful of decisions pronouncing that notice and hearing are not essential when an administrative agency acts pursuant to its rule'-making power or in the exercise of legislative functions.252'In the early case of'Vigan Electric Light Company, Inc. v. Public Service Commission (Vigan Electric),253'this Court has delineated when the exercise of an administrative agency's rate fixing-power partakes either of a legislative or quasi-judicial character. When such rules and/or rates are meant to apply to all enterprises of a given kind throughout the Philippines, they partake of a legislative character.254'Meanwhile, when the rule applies exclusively to a specific party and a predicated upon the finding of a fact, the function performed partakes of a quasi-judicial character.255
Vigan Electric'further drew a line between when notice and hearing are required and when they are not. When the administrative agency performs a quasi-judicial function, notice and hearing are required. Otherwise, when the administrative agency performs a legislative function, notice and hearing are not required.
Here, the rate fixed by D.O. No. 2014-014 affects all Filipinos riding the railway transit systems without distinction. Undoubtedly, and as earlier discussed, the DOTC exercised a legislative function when it issued D.O. No. 2014-014. Nevertheless, it must be clarified that the doctrine laid down in'Vigan Electric'has since been modified by this Court when it comes to the notice and hearing requirements. As it now stands, the rule that prior notice and hearing are not requirements of due process when the administrative rule was issued in the agency's exercise of legislative function, does not apply where when the law itself expressly requires it,256'as in this case.
Section 9, Chapter 2, Book VII of the Administrative Code of 1987 explicitly provides that when it comes to rate-fixing, the proposed rates must have been published in a newspaper of general circulation at least two weeks before the first hearing thereon. Hence:
SECTION 9. Public Participation.-(1) If not otherwise required by law, an agency shall, as far as practicable, publish or circulate notices of proposed rules and afford interested parties the opportunity to submit their views prior to the adoption of any rule.
(2)'In the fixing of rates, no rule or final order shall be valid unless the proposed rates shall have been published in a newspaper of general circulation at least two (2) weeks before the first hearing thereon.
(3) In case of opposition, the rules on contested cases shall be observed. (Emphasis supplied)
The foregoing provision is clear, straightforward, and admits of no room for interpretation. Rate-fixing requires notice and hearing, which notice must come at least two weeks before the hearing.
In'Manila International Airport Authority (MIAA) v. Airspan Corporation,257'this Court ruled that MIAA, an attached agency of the DOTC, cannot validly raise fees, charges, and rates without prior notice and public hearing. As an attached agency, the MIAA is governed by the Administrative Code of 1987, which specifically requires notice and public hearing in the fixing of rates, therefore:
As an attached agency of the DOTC, the MIAA is governed by the Administrative Code of 1987. The Administrative Code specifically requires notice and public hearing in the fixing of rates:
BOOK VII. - Administrative Procedure
SEC. 9.'Public Participation.'- . . . (2) In the fixing of rates, no rule or final order shall be valid unless the proposed rates shall have been published in a newspaper of general circulation at least two (2) weeks before the first hearing thereon.
It follows that the rate increases imposed by petitioner are invalid for lack of the required prior notice and public hearing. They are also ultra vires because, to begin with, petitioner is not the official authorized to increase the subject fees, charges, or rates, but rather the DOTC Secretary.
To conclude, petitioner's Resolutions Nos. 98-30 and 99-11 and the corresponding administrative orders, which increased the fees, charges, and rates specified therein, without the required prior notice and hearing as well as approval of the DOTC Secretary, are null and void. The RTC Decision, which permanently enjoined petitioner from collecting said increases and ordered refund to respondents of the amounts paid pursuant to the said Resolutions, must be upheld. However, any refund should cover only the differential brought about by the unauthorized increases contained in said Resolutions.258
Section 38, Chapter 7, Book IV of the Administrative Code of 1987 provides that there are three kinds of administrative relationships: (1) supervision and control; (2) administrative supervision; and (3) attachment.259'The same Section defines the three relationships as follows:
CHAPTER 7Administrative Relationships
SECTION 38. Definition of Administrative Relationships.-Unless otherwise expressly stated in the Code or in other laws defining the special relationships of particular agencies, administrative relationships shall be categorized and defined as follows:
(1) Supervision and Control. - Supervision and control shall include authority to act directly whenever a specific function is entrusted by law or regulation to a subordinate; direct the performance of duty; restrain the commission of acts; review, approve, reverse or modify acts and decisions of subordinate officials or units; determine priorities in the execution of plans and programs; and prescribe standards, guidelines, plans and programs. Unless a different meaning is explicitly provided in the specific law governing the relationship of particular agencies, the word "control" shall encompass supervision and control as defined in this paragraph.
(2) Administrative Supervision. - (a) Administrative supervision which shall govern the administrative relationship between a department or its equivalent and regulatory agencies or other agencies as may be provided by law, shall be limited to the authority of the department or its equivalent to generally oversee the operations of such agencies and to insure that they are managed effectively, efficiently and economically but without interference with day-to-day activities; or require the submission of reports and cause the conduct of management audit, performance evaluation and inspection to determine compliance with policies, standards and guidelines of the department; to take such action as may be necessary for the proper performance of official functions, including rectification of violations, abuses and other forms of maladministration; and to review and pass upon budget proposals of such agencies but may not increase or add to them;
(b) Such authority shall not, however, extend to: (1) appointments and other personnel actions in accordance with the decentralization of personnel functions under the Code, except when appeal is made from an action of the appointing authority, in which case the appeal shall be initially sent to the department or its equivalent, subject to appeal in accordance with law; (2) contracts entered into by the agency in the pursuit of its objectives, the review of which and other procedures related thereto shall be governed by appropriate laws, rules and regulations; and (3) the power to review, reverse, revise, or modify the decisions of regulatory agencies in the exercise of their regulatory or quasi-judicial functions; and
(c) Unless a different meaning is explicitly provided in the specific law governing the relationship of particular agencies, the word "supervision" shall encompass administrative supervision as defined in this paragraph.
(3) Attachment. - (a) This refers to the lateral relationship between the department or its equivalent and the attached agency or corporation for purposes of policy and program coordination. The coordination may be accomplished by having the department represented in the governing board of the attached agency or corporation, either as chairman or as a member, with or without voting rights, if this is permitted by the charter; having the attached corporation or agency comply with a system of periodic reporting which shall reflect the progress of programs and projects; and having the department or its equivalent provide general policies through its representative in the board, which shall serve as the framework for the internal policies of the attached corporation or agency;
(b) Matters of day-to-day administration or all those pertaining to internal operations shall be left to the discretion or judgment of the executive officer of the agency or corporation. In the event that the Secretary and the head of the board or the attached agency or corporation strongly disagree on the interpretation and application of policies, and the Secretary is unable to resolve the disagreement, he shall bring the matter to the President for resolution and direction;
(c) Government-owned or controlled corporations attached to a department shall submit to the Secretary concerned their audited financial statements within sixty (60) days after the close of the fiscal year; and
(d) Pending submission of the required financial statements, the corporation shall continue to operate on the basis of the preceding year's budget until the financial statements shall have been submitted. Should any government' owned or controlled corporation incur an operating deficit at the close of its fiscal year, it shall be subject to administrative supervision of the department; and the corporation's operating and capital budget shall be subject to the department's examination, review, modification and approval.
Among the three, attachment is the most lenient since the relationship is merely for policy and program coordination. Moreover, the provisions on supervision and control do not apply to chartered institutions attached to a department.'Pe'afrancia Shipping Corporation, et al. v. 168 Shipping Lines, Inc.260'distinguished among the three relationships:
Among the three, the relationship of supervision and control between a department and a subordinate agency is the most stringent since the department has the power to review the decisions of the subordinate agency. This power is not available in administrative supervision as Section 38 expressly states that the department shall have no power to review the decisions of regulatory agencies in the exercise of their regulatory or quasi-'judicial functions. As to the relationship of attachment, while the law is silent on the presence or absence of such power to review by the department, Section 38(3) would indicate that the Legislature did not intend that the decisions of an attached agency be subject to review by the department prior to appealing before the proper court. Section 38(3) indicates the most lenient kind of administrative relationship since the'lateral'relationship is limited to policy and program coordination. Thus, in'Beja v. Court of Appeals,'we distinguished an attached agency from one which is under departmental supervision and control or administrative supervision:
An attached agency has a larger measure of independence from the Department to which it is attached than one which is under departmental supervision and control or administrative supervision. This is borne out by the "lateral relationship" between the Department and the attached agency. The attachment is merely for "policy and program coordination." With respect to administrative matters, the independence of an attached agency from Departmental control and supervision is further reinforced by the fact that even an agency under a Department's administrative supervision is free from Departmental interference with respect to appointments and other personnel actions "in accordance with the decentralization of personnel functions" under the Administrative Code of 1987.'Moreover, the Administrative Code explicitly provides that Chapter 8 of Book IV on supervision and control shall not apply to chartered institutions attached to a Department.'(Emphasis supplied; Citations omitted)261
Despite having a larger measure of independence from the department to which it is attached,'MIAA'has already established that attached agencies are still governed by the provisions of the Administrative Code on notice and public hearing in the fixing of rates. This goes without saying that as an attached agency of the DOTC, the LRTA should similarly follow the requirements in Section 9, Chapter 2, Book VII of the Administrative Code of 1987.
Regarding the MRT-3 Office, Section 39, Chapter 8, Book IV of the Administrative Code of 1987 expressly provides that the Secretary shall have supervision and control over the bureaus, offices, and agencies under him or her:
Sec. 39.'Secretary's Authority.'-
(1) The Secretary shall have supervision and control over the bureaus, offices, and agencies under him, subject to the following guidelines:
(2) This Chapter shall not apply to chartered institutions or government' owned or controlled corporations attached to the department.
Thus, in the absence of a provision prescribing that the relationship between a department and its subordinate agency is either of attachment or administrative supervision, the authority of the Secretary to exercise supervision and control over all bureaus, offices, and agencies under him or her prevails. Admittedly, the MRT-3 Office is an office under the DOTC. It is neither a chartered institution nor a government-owned or controlled corporation attached to the department, and the Administrative Code of 1987 has not specified its relationship with the DOTC as either one of attachment or administrative supervision. Following Section 39 above, the DOTC and the MRT-3 Office are governed by the relationship of supervision and control. With more reason, therefore, should the provision on notice and hearing in the fixing of rates apply to the MRT-3 Office.
In any case, this Court has held that when an administrative rule substantially increases the burden of those governed, the agency must afford those directly affected a chance to be heard and be duly informed before the issuance is given the force and effect of law. In'Department of Environment and Natural Resources Employees Union v. Abad,'262'We said:
Accordingly, an administrative regulation can be construed as simply interpretative or internal in nature, dispensing with the requirement of publication, when its applicability needs nothing further than its bare issuance, for it gives no real consequence more than what the law itself has already prescribed. When, however, the administrative rule goes beyond merely providing for the means that can facilitate or render least cumbersome the implementation of the law but substantially increases the burden of those governed, it behooves the agency to accord at least to those directly affected a chance to be heard, and thereafter, to be duly informed, before that new issuance is given the force and effect of law.
In this case, while the assailed DBM Budget Circular No. 2011-5 dated December 26, 2011 was, in fact, published in the Philippine Star, it was done only on February 25, 2012, or two months after the issuance of the same on December 29, 2011, and two months after the DENR's grant of the CNA incentive on December 28, 2011. In addition, as certified by the U.P. Law Center-ONAR, the circular was not filed therewith as mandated by the Administrative Code of 1987.
As previously discussed, this would not have mattered had the said circular been merely interpretative or internal in nature. Unfortunately, however, DBM Budget Circular No. 2011-5 cannot be said to give no real consequence more than what the law itself has already prescribed nor can it be said that it does not affect substantial rights of any person. Prior issuances on the matter of the CNA incentive merely require that the CNA Incentive shall be derived from savings generated by an agency which are no longer intended for any specific purpose after all its planned targets, programs, and services for the year have been accomplished. They do not, however, impose any maximum allowable amount which government agencies must limit the incentive to. Otherwise put, without the disputed circular, there would be no maximum allowable amount of P25,000.00 for the CNA incentive per qualified employee. As such, the circular was issued not to simply interpret the law.
Neither was it issued to regulate only the personnel of an administrative agency, nor issued by an administrative superior concerning guidelines to be followed by their subordinates in the performance of their duties.'The subject circular actually increases the burden of those governed, encompassing not merely the personnel of a particular administrative agency, such as the DENR in this case, but employees of all NGAs, SUCs, LGUs, GOCCs, and GFIs in the country. Its publication, therefore, cannot be dispensed with.263'(Emphasis supplied; Citations omitted)
While'DENR'referred to the requirement of publication, the principle remains the same. More importantly,'DENR'applied the requirement of publication under Chapter 2, Book VIII of the Administrative Code of 1987, which similarly houses the requirement of public participation under Section 9 thereof. Here, since D.O. No. 2014-014 substantially increased the burden of the commuting public due to the fare increase, compliance with the requirements of notice and hearing is indispensable.
D.O. No. 2014-014 substantially complied with the requirements of notice and hearing
Petitioners argue that D.O. No. 2014-014 was issued without the required notice and hearing. Thus, they were deprived of the opportunity to confront and cross-examine the DOTC's resource and point persons and fully determine the basis of the fare increase. Petitioners insist that for lack of notice and hearing, D.O. No. 2014-014 is null and void.264
Petitioners lament that the hearings conducted in 2011 and 2013 violate their right to due process since the conditions and grounds relied upon by the public respondents for the fare increase under D.O. No. 2014-014 are different from those in 2011 and 2013 when the rate hike was withdrawn due to the public's opposition. They contend that the public is entitled to a new and original round of notice and hearing since the issuance of D.O. No. 2014-014 represents a change in the withdrawal of the proposed fare hike in the previous years.265
The records show that plans to increase the fare increase of the LRT and the MRT started as early as 2010. On August 5, 2010, in view of reducing government subsidy, the Office of the President directed the LRTA to conduct a comparative study on the operating costs of the LRT and the MRT'vis-'-vis'public utility buses.266'On August 25, 2011, the LRTA management presented the result of the study to the LRTA Board for its consideration.267'Subsequently, the LRTA management also conducted a joint study with the DOTC regarding the possible fare increase for the LRT and the MRT. On October 27, 2010, the DOTC and the LRTA issued a Fare Restructuring Executive Report268'stating that a fare increase in the LRT and the MRT will considerably reduce government subsidy and will generate additional income for the operation of the rail lines. The DOTC-LRTA Study Team ultimately recommended a fare structure of PHP 11.00 plus PHP 1.00/km for the LRT. The DOTC then presented the report to the top officials of the DOTC and the LRTA Board during its meeting in October 2010.269'On October 27, 2010, the Secretary of Finance, the Secretary of Budget and Management, the Secretary of Transportation and Communications, and the Secretary of Socio-Economic Planning (economic managers) executed a Memorandum270'for the President regarding the LRT fare adjustment.
This precipitated the first official proposal to increase the fares of the LRT and the MRT. On January 20 and 27, 2011 a Notice of Public Consultation271'was published in the Philippine Daily Inquirer and the Manila Bulletin for the proposed fare adjustment in LRT-1, LRT-2, and MRT-3. After duly considering the result of the public consultation, the fare adjustment of distance-based fare scheme of PHP 11.00 plus PHP 1.00/km with the 20% student discount was approved. Yet, on May 9, 2011, the LRTA Board and the DOTC decided to indefinitely defer the implementation of the fare increase.272
During former President Benigno Simeon Aquino III's SONA on July 22, 2013, he reiterated the need to adjust the LRT's and MRT's fares so that the government subsidy for the MRTC and the LRTA can be used for other social services.273'In a Secretary's Certificate dated November 26, 2013, the LRTA Board affirmed the PHP 11.00 plus PHP 1.00/km fare adjustment for LRT-1 and LRT-2, as previously approved in 2011. Notices of Public Consultation274'were again published in the Philippine Daily Inquirer and the Manila Bulletin on December 5, 2013 for the proposed fare adjustments in the LRT and MRT lines. On December 12, 2013, the public hearing was conducted. Present were DOTC Undersecretary Eduardo S.L. Oban and respondent Renato San Jose, then Officer-in-Charge of the MRT-3 Office.275
On December 18, 2014, public respondent DOTC Secretary Jose Emilio A. Abaya issued D.O. No. 2014-014.276'In the Press Release277'issued by the DOTC on December 20, 2014 regarding D.O. No. 2014-014, it stated that the fare increase adopts the user-pay principle which requires riders to pay an amount close to the actual cost of their trip. This will result in the reduction of government subsidy which, in turn, will free up budget that may be used for development projects and relief operations in other parts of the country.
It is clear that prior to the issuance of D.O. No. 2014-014, public consultations were held on February 4 and 5, 2011, and on December 12, 2013 after due notice. While the fare increase eventually materialized only on December 20, 2014 through the issuance of D.O. No. 2014-014, the basis of and purpose for the proposed hike remained the same ever since-the reduction of government subsidy over the operations of the LRT and the MRT. Notably, D.O. No. 2014-014 even retained the initially proposed fare structure of PHP 11.00 plus PHP 1.00/km for the LRT and the MRT back in 2010.
As pointed out by Associate Justice Amy C. Lazaro-Javier, "there is no requirement in Section 9(2) or anywhere in the Administrative Code of 1987 that the hearings or public consultations ought to be held within a particular time frame before the adoption of the final order of fare or rate adjustments."278
Since D.O. No. 2014-014 is a mere reiteration of the proposed fare increases in 2011 and 2013, the public consultations previously held substantially serve the purpose of the hearing requirement under Section 9, Chapter 2, Book VII of the Administrative Code of 1987. Chief Justice Alexander G. Gesmundo accurately noted that in the present case, "there is no showing of any drastic changes in social and economic conditions that have occurred between December 2013 to December 2014 as to radically alter the perspectives of those who attended the prior year's consultation and other persons affected by the issuance."279
It should be emphasized that the requirements of notice and hearing in the present case are not empty formalities. They are at the core of procedural due process which "concerns itself with government action adhering to established process when it makes an intrusion into the private sphere."280'The conduct of notice and hearing gives affected stakeholders an opportunity to evaluate and oppose a measure that will heavily affect their everyday lives.
On this score, this Court has held that "the essence of due process is simply an opportunity to be heard, or as applied to administrative proceedings, a fair and reasonable opportunity to explain one's side."281'Indeed, there is no required format or template by which the hearing is to be conducted. Section 9, Chapter 2, Book VII of the Administrative Code of 1987 also does not prescribe any particular manner as to how public participation should be undertaken. As stated by Associate Justice Alfredo Benjamin S. Caguioa, "due process is not a rigid and inflexible concept." Depending on the circumstances, it "varies with the subject matter and necessities of the situation."282'In relation to administrative proceedings, "due process should not be tantamount to the requirements for judicial or adjudicatory processes.283
As raised by Associate Justice Maria Filomena D. Singh during the public consultations on February 4 and 5, 2011, the attendees were able to express their concerns and opposition to the proposed fare adjustment. The participants even articulated their own recommendations regarding the fare increase. Meanwhile, petitioners in G.R. No. 216735 admitted that during the public consultation on December 12, 2013, those present were given the chance to participate in the discussion and that one of the participants even asked about the authority of those presiding the consultation to hear the case of a proposed fare hike.284'Unlike what petitioners insist, there is no inherent right to confront or cross-examine the other party in proceedings of this nature. So long as interested parties are given an adequate opportunity and avenue to air their views prior to the adoption of a new rule, the essence of due process is deemed served.
II (C).
The rates under D.O. No. 2014-014 are reasonable and just
Petitioners posit that the fare increase is arbitrary because it provided no basis or formula for computation of the fare increases presented. The fare increase is, therefore, unjust and unreasonable.285
It bears reiterating that "the power to fix rates is a legislative function, whether exercised by the legislature itself or delegated through an administrative agency."286'In case exercised by an administrative agency, the only required standard is for the rate to be reasonable and just.287
Nevertheless, "a determination of whether the rates so fixed are reasonable and just is a purely judicial question and is subject to the review of the courts."288'Moreover, the determination of the justness and reasonableness of a certain rate is a question of fact calling for the exercise of discretion, good sense, and a fair, enlightened, and independent judgment.289'Being a question of fact, high regard is given to the factual findings of administrative bodies in the fixing of their rates, it being a technical matter within their area of expertise.290'Rate-fixing calls for no less than a technical examination and a specialized review of specific details that courts may not be equipped to partake.291'As such, these matters are primarily entrusted to the administrative or regulating authority.292
In'NASECORE v. MERALCO,293'this Court affirmed the ERC's approval of MERALCO's applications for the translation distribution rates of the ERC-approved Annual Revenue Requirement, using the Performance' Based Regulation methodology, covering the first and second regulatory years 2007 to 2011 period. This Court sustained the reasonableness of the rates approved by the ERC after finding that MERALCO's rate applications were approved only after the ERC "conducted the necessary proceedings, received evidence in support of the applications and, thereafter, made an independent evaluation of the same.1aшphi1"294'Thus:
It must be stressed that since rate-fixing calls for a technical examination and a specialized review of specific details which the courts are ill-equipped to enter, such matters are primarily entrusted to the administrative or regulating authority. Hence, the factual findings of administrative officials and agencies that have acquired expertise in the performance of their official duties and the exercise of their primary jurisdiction are generally accorded not only respect but, at times, even finality if such findings are supported by substantial evidence. Absent any of the exceptions laid down by jurisprudence, such factual findings of quasi'-judicial agencies, especially when affirmed by the CA, are binding on this Court.
As determined by the ERC, which was affirmed by the CA, petitioners failed to sufficiently show that the rates approved in the proceedings below were unreasonable as they claimed to be. As pointed out by the CA, MERALCO's rate applications were approved only after the ERC conducted the necessary proceedings, received evidence in support of the applications and, thereafter, made an independent evaluation of the same. Thus, the CA cannot be faulted in sustaining the reasonableness of the rates approved by the ERC. In'Ynchausti Steamship Co. v. Public Utility Commissioner,'this Court articulated that "[t]here is a legal presumption that the fixed rates are reasonable, and it must be conceded that the fixing of rates by the Government, through its authorized agents, involves the exercise of reasonable discretion and unless there is an abuse of that discretion, the courts will not interfere."
For another, petitioners decry the ERC's failure to wait for and take into consideration the complete audit on the books, records, and accounts of MERALCO by the COA before approving MERALCO's new rates. According to them,'Lualhati'directed the ERC to request the COA to perform such audit relative to MERALCO's provisionally-approved increase and unbundled rates. Petitioners further add that due to ERC's unbridled approval of new rates, MERALCO was able to amass excess profits in the amount of P39,208,556,000.00 for the period of 2003-2008, thus, giving it an average annual return of investment of 51%, which is way above the 12% return on investment generally allowed for public utilities.295'(Citations omitted).
In the present case, petitioners failed to prove that the rates under D.O. No. 2014-014 were unreasonable or unjust. To note, the proposed fare increase of PHP 11.00 plus PHP 1.00/k.m was initially determined by the DOTC-LRTA Study Team in 2010 after conducting an examination of the various factors affecting the operations and status of the rail lines. According to the team's Fare Restructuring Executive Report,296'the rail lines are not generating substantial revenues, requiring greater government subsidies to cover operating and maintenance costs. It was also pointed out that the LRT and MRT fares have fallen below the fare levels of Metro Manila buses and jeepneys for the end-to-end travel of the rail lines. Thus, three fare options were initially considered to approximate the prevailing fare of air-conditioned buses in the metro: (1) PHP 9.00 [boarding fee] plus PHP 1.00/km; (2) PHP 10.00 [boarding fee] plus PHP 1.00/krn; and (3) PHP 11.00 [boarding fee] plus PHP 1.00/km. Ultimately, the team proposed the increase of PHP 11.00 plus PHP 1.00/km since it will reduce government subsidy the most.297
From the foregoing, it cannot be said that the fare increase under D.O. No. 2014-014 was arrived at arbitrarily. Clearly, the rates thereunder were determined after a thorough and independent evaluation made by the DOTC and the LRTA. Moreover, the DOTC and the LRTA followed the prescribed procedure in implementing the fare increase. As discussed above, due notice was issued and public consultations were held before D.O. No. 2014-014 took effect.
Without a clear showing that the DOTC or the LRTA acted arbitrarily or capriciously, this Court shall not interfere in the exercise of their statutorily' granted powers.298'Their findings and conclusions with regard to the fare increase under D.O. No. 2014-014 must thus be respected.
This Court reiterates that with regard to any changes in the rates of the LRT and the MRT fares, the requirements under Section 9, Chapter 2, Book VII of the Administrative Code of 1987 must be strictly observed. The twin requirements on notice and hearing are not dispensable. Otherwise, any proposed changes or fare increase shall be void and of no effect.
In this case, there was substantial compliance with the requirements of notice and hearing. The purpose for which these requirements were enacted was sufficiently served. Perforce, the validity of D.O. No. 2014-014 must be sustained.
As a final note, this Court clarifies that the result of the pending arbitration request filed by the LRMC with the International Chamber of Commerce on May 6, 2022 against the DOTr and the LRTA will have no effect on our ruling on the consolidated Petitions. The arbitration request involves the petition for fare increase in 2016, 2018, and 2022 made by the LRMC which were all denied by the government. It does not deal with the fare increase mandated under D.O. 2014-014.
ACCORDINGLY,'the Petitions are'DISMISSED.'This Court upholds the validity of the Department of Transportation and Communications Department Order No. 2014-014.
SO ORDERED.
Hernando, Inting, Zalameda, M. Lopez, Gaerlan, Rosario, Dimaampao, Marquez, Kho, Jr.,'and'Singh, JJ., concur.
Gesmundo, C.J.,'see separate concurring opinion.
Leonen,*'SAJ.,'See separate concurring opinion. On official leave but left his vote.
Caguioa, J.,'see concurring and dissenting.
Lazaro-Javier, J.,'Please see concurrence.
Footnotes
*'On official leave.
1'119 Phil. 304 (1964).
2'Rollo'(G.R. No. 215650), Vol. I, pp. 3-24;'Rollo'(G.R. No. 215653), Vol. I, pp. 3-110;'Rollo'(G.R. No. 215703) Vol. I, pp. 3-39;'Rollo'(G.R. No. 215704), Vol. I, pp. 3-42;'Rollo'(G.R. No. 216735), Vol. I, pp. 3-153.
3'Renamed as the Department of Transportation by virtue of Republic Act No. 10844, also known as the "Department of Information and Communications Technology Act of 2015."
4'Rollo'(G.R. No. 216735), Vol. I, p. 154.
5'Rollo'(G.R. No. 215653), Vol. III, pp. 1062-1063.
6'Rollo'(G.R. No. 216735), Vol. II, p. 785.
7'Rollo'(G.R. No. 215650), Vol. I, p. 11.
8'Ricardo T. Jose, Marco Stefan B. Lagman, Daniel L. Mabazza, Jose Regin F. Regidor, Jonathan M. Villasper, Planning Metro Manila's Mass Transit System'< https://riles.upd.edu.ph/wp'content/uploads/2018/02/001-Planning-Metro-Manila_s-Transport-System_-Jose-Lagman-Mabazza'Regidor-Villasper.pdfs>'accessed on April 10, 2022, citing Kawabata, Y. and Aoki, H. (2009) Republic of the Philippines Metro Manila Mass Rail Transit Development (I), (II), (III). Field Survey 2008-2009.
9'LRTA History,'< https://www.lrta.gov.ph/lrta-history>'accessed on April 10, 2022.
10'Light Rail Transit Authority v. Quezon City,'864 Phil. 963, 981 (2019).
11'Administrative Code, Book IV, Title XV, Chapter 6, Sec. 24.
12'Executive Order No. 603 (1980), Sec. 2.
13'LRTA History'< https://www.lrta.gov.ph/lrta-history>'accessed on April 10, 2022.
14'The Roosevelt Station of LRT-1 is temporarily closed since September 2020 for the construction of the common station that will connect the LRT-1, MRT Line 3, and the MRT Line 7, which is expected to open by 2022.'< https://www.philstar.com/nation/2020/08/08/2033672/lrt-1-close-roosevelt-station>'accessed on April 10, 2022.
15'LRTA History'< https://www.lrta.gov.ph/lrta-history>'accessed on April 10, 2022.
16'LRMC Company Profile'< https://lrmc.ph/about/company-profile>'accessed on April 10, 2022.
17'LRTA History'< https://www.lrta.gov.ph/lrta-history>'accessed on April 10, 2022.
18'LRT Line 2 Operations and Maintenance Project Information Memorandum'< https://ppp.gov.ph/wp'content/uploads/2014/08/LRT2-OM-ProjectInfoMemo-FINAL.pdf>'accessed on April 10, 2022.
19'PHL President Duterte LRT-2 inaugurates East Extension Project'< https://www.lrta.gov.ph/phl'president-duterte-inaugurates-lrt-2-east-extension-project/>'accessed on April 10, 2022.
20'DOTR MRT 3 History'< http://www.dotrmrt3.gov.ph/about>'accessed on April 10, 2022.
21'History of MRT 3'< http://www.mrt3.com/index.php/menu-about.html>'accessed on April 10, 2022.
22'DOTR MRT 3 History'< http://www.dotrmrt3.gov.ph/about>'accessed on April 10, 2022.
23'Id.
24'2014 LRTA Annual Report'< https://www.lrta.gov.ph/wp-content/uploads/2021/03/Annual-Report-2014.pdf>'accessed on April 10, 2022.
25'Id.
26'MRT 3 Daily Average Ridership 1999-2016'< https://dotr.gov.ph/railways-sector/mrt/ridership.html#mrt3-daily-average-ridership-1999-2020>'accessed on April 10, 2022.
27'Abaya: MRT-3 Operating at Overcapacity'< https://news.abs-cbn.com/nation/metro-manila/02/26/14/abaya-mrt-3-operating-over-capacity>'accessed on April 10, 2022.
28'LRTC Corporate Budget for Calendar Year 2014 as approved by the Department of Budget and Management'< https://www.lrta.gov.ph/wp-content/uploads/2020/12/COB-2014.pdf>'accessed on April 10, 2022.
29'Details of FY 2014 Budget, Title XXIII. Sec. A.
30'General Appropriations Act of 2014, Title XXIII, Special Provisions:
4. Servicing of Metro Rail Transit Obligations. The amount needed for the payment of prior and current years' obligations for equity rental and maintenances fees and other obligations, such as, staffing and administrative cost, agency fee, cost for special repairs, and systems insurance due to the Metro Rail Transport Corporation (MRTC), as specified in the build-lease-and-transfer agreement executed between the DOTC and MRTC, shall be charged against the fare box revenue and all non-rail collections/income of the Metro Rail Transit (MRT) 3: PROVIDED, That in case of insufficient collections/income, the same may be augmented by the amounts appropriated herein for mass transport subsidy.
31'Rollo'(G.R. No. 215650), Vol. I, p. 114.
32'Id.
33'Id.'at 114 and 105.
34'Id.'at 1000.
35'Id.'at 114 and 105.
36'Id.
37'Rollo'(G.R. No. 215650), Vol. II, p. 1000.
38'Rollo'(G.R. No. 215650), Vol. I, p. 118.
39'Rollo'(G.R. No. 215650), Vol. II, pp. 1000-1001.
40'Id.
41'Rollo'(G.R. No. 215650), Vol. I, p. 122.
42'Id.'at 131-132.
43'Id.'at 124.
44'Id.'at 134.
45'Rollo'(G.R. No. 215653), Vol. I, p. 84.
46'Rollo'(G.R. No. 215650), Vol. I, p. 70.
47'Id.'at 133.
48'Rollo,'(G.R. No. 215704), Vol. I, pp. 10-11;'Rollo'(G.R. No. 216735), Vol. I, pp. 10-11.
49'Rollo'(G.R. No. 215653), Vol. I, p. 6;'Rollo'(G.R. No. 215703), Vol. I, p. 5.
50'Rollo'(G.R. No. 215653), Vol. I, pp. 7-8;'Rollo'(G.R. No. 216735), Vol. I, pp. 12-13.
51'Rollo'(G.R. No. 215650), Vol. I, p. 4;'Rollo'(G.R. No. 215653), Vol. I, pp. 7-8;'Rollo'(G.R. No. 215704), Vol. I, pp. 10-11;'Rollo'(G.R. No. 216735), Vol. I, p. 11.
52'Rollo'(G.R. No. 215650), Vol. III. p. 1046.
53'Rollo'(G.R. No. 215703), Vol. I, pp. 6-9.
54'Rollo'(G.R. No. 216735), Vol. II, p. 790.
55'Rollo'(G.R. No. 215653), Vol. Ill, pp. 1049-1050.
56'Rollo'(G.R. No. 215704), Vol. II, pp. 807-808.
57'Rollo'(G.R. No. 216735), Vol. II, p. 746.
58'Rollo'(G.R. No. 215653), Vol. III, p. 1052.
59'Rollo'(G.R. No. 216735), Vol. II, p. 779.
60'Rollo'(G.R. No. 215650), Vol. II, p. 1054.
61'Rollo'(G.R. No. 216735), Vol. II, p. 784.
62'Rollo'(G.R. No. 215704), Vol. II, p. 816.
63'Rollo'(G.R. No. 216735), Vol. II, pp. 774-778.
64'Id.'at 777.
65'Rollo'(G.R. No. 215650), Vol. I, p. 16;'Rollo'(G.R. No. 215653) Vol. I, p 58;'Rollo'(G.R. No. 215703), Vol. I, p. 26;'Rollo'(G.R. No. 215704), Vol. I, p. 30;'Rollo'(G.R. No. 216735), Vol. I, p. 48.
66'Rollo'(G.R. No. 215650), Vol. II, pp. 976-977.
67'Rollo'(G.R. No. 215650), Vol. III, pp. 1192-1193.
68'Rollo'(G.R. No. 216735), Vol. II, pp. 864-866.
69'Id.'at 887-890.
70'Rollo'(G.R. No. 215650), Vol. II, pp. 983-986.
71'Rollo'(G.R. No. 215650), Vol. III. pp. 1178-1179.
72'Id'at 1184.
73'Rollo'(G.R. No. 215650), Vol. IV, p. 1665.
74'Id.'at 1691-1705.
75'Id.'at 1693-1694.
76'Not yet attached to the'rollo.
77'Rene B. Gorospe, Political Law 546 (2016 Edition).
78'Ta'ada v. Tuvera,'230 Phil. 528, 537 (1986).
79'Atong Paglaum, Inc. v. Commission on Elections,'707 Phil. 454, 549 (2013).
80'Marbury v. Madison,'5 U.S. 137, 177 (1803), also cited in RENE B. GOROSPE, POLITICAL LAW 546 (2016).
81'5 U.S. 137 (1803).
82'Id.'at 177-178.
83'Separate Opinion of Associate Justice Renato C. Corona in'Francisco, Jr. v. House of Representatives,'460 Phil. 830, 1022 (2003), also cited in RENE B. GOROSPE, POLITICAL LAW 557 (2016).
84'Id.
85'Kilusang Mayo Uno, et al. v. Hon. Aquino. et al.,'850 Phil. 1168, 1181-1182 (2019).
86'Id.'at 1182.
87'Id.,'citing'Francisco, Jr. v. The House of Representatives,'460 Phil. 830, 883 (2003).
88'Holy Spirit Homeowners Association, Inc. v. Sec. Defensor, 529 Phil. 573, 585 (2006).
89'Confederation for Unity, Recognition and Advancement of Government Employees v. Abad, G.R. No. 200418,'November 10, 2020.
90'See Administrative Code, Introductory Provisions, Secs. 2(4) and (7). An agency of the government refers to any of the various units of the Government, including a department, which refers to an executive department created by law. See also ADM. CODE, BOOK IV, TITLE XV, CHAPTER 1, where the DOTC is listed as one of the departments under the Executive Branch.
91'Rollo'(G.R. No. 215650), Vol. III, p. 1052.
92'Id.
93'Id.'at 1192.
94'Id.
95'Supra'note 89.
96'Id.
97'Houston East and West Texas Railway Company v. United States,'234 U.S. 342 (1914).
98'Employers Confederation of the Philippines v. National Wages and Productivity Commission,'278 Phil. 747, 753 (1991).
99'Smart Communications, Inc. v. National Telecommunications Commission,'456 Phil. 145, 158 (2003).
100'456 Phil. 145 (2003).
101'802 Phil. 116 (2016).
102'In his dissent, Justice Leonen cited'Spouses Imbong v. Hon. Ochoa, et al.,'732 Phil. 1 (2014) and'Disini, Jr. et al. v. The Secretary of Justice,'727 Phil. 28 (2014), where the Court took cognizance of the petitioners despite having no actual controversies yet.
103'See'Confederation for Unity, Recognition and Advancement of Government Employees v. Abad,'G.R. No. 200418,'supra'note 89, a case that sanctioned the use of'certiorari'and prohibition as remedies to assail the action of an administrative agency in the exercise of its quasi-legislative power (Confederation). See also'DENR Employees Union v. Abad, G.R. No. 204152,'January 19, 2021, where the Court recognized that although Budget Circular No. 2011-5 was issued by the Department of Budget and Management Secretary's rule-making or quasi-legislative functions, the Court's judicial power under Article VIII, Section 1 of the 1987 Constitution is broad enough "to include the determination of whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government even in their exercise of legislative and quasi-legislative functions."'But see'Private Hospitals Association of the Philippines. Inc, v. Medialdea,'842 Phil. 747 (2018), which, although recognizing'certiorari'and prohibition as proper legal vehicles to assail the constitutionality of R.A. No. 10932, nevertheless, dismissed the petition for failing to satisfy the requirements of the exercise of the Court's expanded scope of judicial power.
104'Kilusang Mayo Uno, et al v. Hon. Aquino, et al.,'supra'note 85, at 1183.
105'Francisco, Jr., et al. v. Toll Regulatory Board, et al,'648 Phil. 54, 86 (2010).
106'Association of Medical Clinics for Overseas Workers, Inc. (AMCOW) v. GCC Approved Medical Centers Association, Inc.,'supra'note 101, at 141.
107'Confederation for Unity, Recognition and Advancement of Government Employees v. Abad,'supra'note 89, citing'Araullo, et al. v. Pres. Aquino, et al.,'737 Phil. 457, 531(2014).
108'Private Hospitals Association of the Philippines, Inc. v. Medialdea,'supra'note 103.
109'Holy Spirit Homeowner Association, lnc. v. Sec. Defensor, 529 Phil. 573, 587 (2006).
110'Supra'note 103.
111'Id.'at 779-781.
112'Id.'at 781. (Citations omitted)
113'648 Phil. 54 (2010).
114'Id.'at 86-87.
115'Rollo'(G.R. No. 215650), p. 1061.
116'Id.'at 1057.
117'Id.'at 1062.
118'Id.'at 1074.
119'Id.'at 1072.
120'Marbury v. Madison,'supra'note 81, at 177.
121'Belgica, et al. v. Hon. Sec. Ochoa, Jr., et al.,'721 Phil. 416, 519 (2013).
122'Id.'(Emphasis and citations omitted).
121'Spouses Imbong v. Hon. Ochoa, et al.,'supra'note 102, at 122.
124'Rollo'(G.R. No. 215650), Vol. II, p. 983.
125'Id.
126'Id.
121'Id.
128'Rollo'(G.R. No. 215650), Vol. III, p. 1175.
129'Id.'at 1174.
130'Id.'at 1175.
131'Id.'at 1178-1179.
132'Id.'at 1184.
133'Id.
134'103 Phil. 1051 (1957).
135'Id.'at 1067.
136'Integrated Bar of the Philippines v. Hon. Zamora,'392 Phil. 618, 637 (2000).
137'Marcos v. Sec. Manglapus,'258 Phil. 479, 507 (1989).
138'Estrada v. Desierto,'406 Phil. 1, 41 (2011).
139'The Diocese of Bacolod, et al. v. Commission on Elections, et al.,'751 Phil. 301, 337 (2015).
140'460 Phil. 830 (2003).
141'Id.'at 910-912.
142'Oposa v. Hon. Factoran,'296 Phil. 694, 718 (1993).
143'Integrated Bar of the Philippines v. Hon. Zamora,'392 Phil. 618, 639 (2000).
144'The Government budgeting process consists of four major phases:
1.'Budget preparation.'The first step is essentially tasked upon the Executive Branch and covers the estimation of government revenues, the determination of budgetary priorities and activities within the constraints imposed by'available revenues'and by'borrowing limits,'and the translation of desired priorities and activities into expenditure levels.
Budget preparation starts with the budget call issued by the Department of Budget and Management. Each agency is required to submit agency budget estimates in line with the requirements consistent with the general ceilings set by the Development Budget Coordinating Council (DBCC).
2.'Legislative authorization.'- At this stage, Congress enters the picture and deliberates or acts on the budget proposals of the President, and Congress in the exercise of its own judgment and wisdom'formulates'an appropriation act precisely following the process established by the Constitution, which specifies that no money may be paid from the Treasury except in accordance with an appropriation made by law.
3.'Budget Execution.'Tasked on the Executive, the third phase of the budget process covers the various'operational'aspects of budgeting. The establishment of obligation authority ceilings, the evaluation of work and financial plans for individual activities, the continuing review of government fiscal position, the regulation of funds releases, the implementation of cash payment schedules, and other related activities comprise this phase of the budget cycle.
4.'Budget accountability.'The fourth phase refers to the evaluation of actual performance and initially approved work targets, obligations incurred, personnel hired and work accomplished are compared with the targets set at the time the agency budgets were approved. (Guingona, Jr. v Hon. Carague,'273 Phil. 443, 460 461 [1991]).
145'Belgica, et al. v. Hon. Sec. Ochoa, Jr., et al.,'721 Phil. 416, 536 (2013).
146'737 Phil. 457 (2014).
147'Id.'at 571, citing Daniel Tomassi, "Budget Execution," in Budgeting and Budgetary Institutions, ed. Anwar Shah (Washington: The International Bank for Reconstruction and Development/World Bank, 2007), p. 279.
148'LRTA Fare Restructuring Study,'Rollo'(G.R. No. 215650), Vol. I, p. 89.
149'Rollo'(G.R. No. 215650), Vol. II, pp. 1011-1012.
150'National Power Corporation v. Philippine Electric Plant Owners Association (PEPOA), Inc.,'521 Phil. 73, 85 (2006).
151'Ta'ada v. Angara,'338 Phil. 546, 574 (1997), citing'Aquino, Jr. v. Ponce Enrile,'158-A Phil. 1 (1974).
152'Id.
153'721 Phil. 416 (2013).
154'Id.'at 519-520.
155'Rollo'(G.R. No. 215650), Vol. IV, p. 1062.
156'Rollo'(G.R. No. 215650), Vol. I, p. 978.
157'Id.'at 983.
158'Francisco, Jr. v. The House of Representatives,'supra'note 140, at 902, citing v.'Tan, et al. v. Macapagal, etc.,'150 PhiI. 778, 784 (1972).
159'Association of Medical Clinics for Overseas Workers, Inc. (AMCOW) v. GCC Approved Medical Centers Association, Inc.,'supra'note 101, at 145.
160'Belgica, et al. v. Hon. Sec. Ochoa, Jr., et al.,'supra'note 121. In'Belgica, this Court ruled that there exists an immediate or threatened injury to petitioners arising from the unconstitutional use of funds under the "Pork Barrel System" since the challenged funds and the provisions allowing for their utilizations were then existing and operational. See also'Council of Staff Teachers and Staff of Colleges and Universities of the Philippines v. Secretary of Education,'841 Phil. 724 (2018), where this Court held that since R.A. No. 10533 (K to 12 Law), RA No. 10157 (Kindergarten Education Act), and their related executive issuances have already taken effect, the petitioners who are faculty members, students, and parents, are directly and considerably affected by their implementation;'Inmates of the New Bilibid Prison, Muntinlupa City v. De Lima,'854 Phil. 675, 694 (2019), where this Court ruled that Section 4, Rule 1 of the Implementing Rules and Regulations of R.A. No. 10592 (An Act Amending Articles 29, 94, 97, 98 and 99 of Act No. 3185, As Amended, Otherwise Known as the Revised Penal Code) providing for the prospective application of the new procedures and standards of behavior for the grant of good conduct time allowance has a direct adverse effect on petitioners and those detained and convicted who are similarly situated.
161'607 Phil. 334 (2009).
162'Id.'at 341.
163'850 Phil. 1168 (2019).
164'Id.'at 1192.
165'Spouses Conzales v. Marmaine Really Corporation,'778 Phil. 451, 456 (2016).
166'Id.'at 457.
167'Supra'note 101.
168'Id.'at 144.
169'Republic of the Philippines v. Lacap,'546 Phil. 87, 97 (2007).
170'614 Phil. 416 (2009).
171'Id.'at 425.
172'Republic of the Philippines v. Lacap,'supra'note 169, at 98.
173'Francisco, Jr., et al. v. Toll Regulatory Board, et al.,'supra'note 105.
174'Prof. David v. Pres. Macapagal-Arroyo,'522 Phil. 705, 755 (2006). (Citations omitted)
175'Id.'at 756.
176'Id.
177'Id.'at 757.
178'Francisco, Jr., et al. v. Toll Regulatory Board, et al.,'supra'note 105.
179'Rollo'(G.R. No. 215650), Vol. II, p. 977.
180'Rollo'(G.R. No. 215650), Vol. III, p. 1191.
181'Id.
182'Id.'at 1190-1192;'Rollo'(G.R. No. 215650), Vol. II, 976.
183'Belgica, et al. v. Hon. Sec. Ochoa, Jr.. et al.,'supra'note 153, at 528.
184'Francisco, Jr.. et al. v. Toll Regulatory Board, et al.,'648 Phil. 54, 87 (2010). (Citations omitted)
185'Francisco, Jr., et al. v. Toll Regulatory Board, et al.,'648 Phil. 54 (2010).
186'Id.'at 87-88.
187'Supra'note 10.
188'Id.
189'Prof. David v. Pres. Macapagal-Arroyo,'522 Phil. 705 (2006).
190'Id.'at 763.
191'Confederation for Unity, Recognition and Advancement of Government Employees v. Abad,'supra'note 89.
192'Rollo'(G.R. No. 215650), Vol. IV, p. 1061.
193'Id.
194'Id.'at 1069.
195'Id.'at 1071.
196'Id.
197'Id.
198'42 Phil. 621 (1922).
199'Id.'at 624.
200'Philippine lnterisland Shipping Association of the Philippines v. Court of Appeals, 334 Phil. 449,463 (1997).
201'334 Phil. 449 (1997).
202'Id.'at 463.
203'Id.
204'Quezon City PTCA Federation, Inc. v. Department of Education,'781 Phil. 399, 422 (2016).
205'781 Phil. 399 (2016).
206'Id.'at 422.
207'Id.'at 422-424.
208'Id.'at 424.
209'Id.,'citing'ABAKADA GURO Party List (formerly AASJS, et al.) v. Hon Purisima, et al.,'584 Phil. 246 (2008).
210'Philippine Communications Satellite Corporation v. Alcuaz,'259 Phil. 707, 715 (1989).
211'Rollo'(G.R. No. 215704), Vol. I, p. 22.
212'Adm. Code, Book IV, Title XV, Chapter 1, Secs. 1 and 2.
213'Adm. Code, Book IV, Chapter 2, Sec. 6.
214'Id.
215'Adm. Code, Book IV, Chapter 2, Sec. 7.
216'Philippine Communications Satellite Corporation v. Alcuaz,'259 Phil. 707, 715 (1989).
217'Id.
218'E.O. No. 603, Art. 1, Sec. 2.
219'Adm. Code, Book IV, Title XV, Chapter 6, Sec. 23.
220'E.O. No. 292, Book IV, Title XV, Chapter 6, Sec. 24 provides:
SECTION 24. Functions of Attached Agencies and Corporations.- The Agencies attached to the Department shall continue to operate and function in accordance with the respective charters or laws creating them, except when they conflict with this Code.
221'Rollo'(G.R. No. 215704), Vol. II, pp. 814-817.
222'864 Phil. 963 (2019).
223'Id.'at 981.
224'396 Phil. 860 (2000).
225'Id.'at 870.
226'528 PhiI. 181 (2006).
227'Supra'note 222.
228'Light Rail Transit Authority v. Quezon City,'supra'note 222, at 987-989.
229'GRANTING CONTINUING AUTHORITY TO THE PRESIDENT OF THE REPUBLIC OF THE PHILIPPINES TO REORGANIZE THE NATIONAL GOVERNMENT; The last paragraph of the preamble clause of E.O. No. 603 states:
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of powers vested in me by Presidential Decree No. 1416, do hereby order the creation and organization of a Light Rail Transit Authority.
230'(2) All proclamations, orders, decrees, instructions, and acts promulgated, issued, or done by the incumbent President shall be part of the law of the land, and shall remain valid, legal, binding, and effective even after lifting of martial law or the ratification of this Constitution, unless modified, revoked, or superseded by subsequent proclamations, orders, decrees, instructions, or other acts of the incumbent President, or unless expressly and explicitly modified or repealed by the regular National Assembly.
231'See'Aquino, Jr. v. Commission on Elections,'159 Phil. 328 (1975).
232'P.D. No. 1416, Sec. 2(b).
233'345 Phil. 962 (1997).
234'Amending Presidential Decree No. 1416.
235'Larin v. Executive Secretary,'supra'note 232, at 979. But note that in'Biraogo v. The Philippine Truth Commission of 2010'(651 Phil. 374, 447 [2010]), this Court held that P.D. No. 1416 is "already stale, anachronistic, and inoperable," and became'functus officio'when the President lost legislative powers upon the convening of the first Congress pursuant to Section VI, Article XVIII of the 1987 Constitution. Concomitantly, it can no longer be invoked to justify the president's act of creating a public office under the 1987 Constitution.
236'91 Phil. 359 (1952).
237'Id.'at 362.
238'Francisco, Jr., et al. v. Toll Regulatory Board, et al.,'supra'note 185, at 107.
239'Id.
240'Id.
241'Rollo'(G.R. No. 216735), Vol. II, pp. 779-781.
242'E.O. No. 202, Sec. 4 provides:
SECTION 4.'Supervision and Control Over the Board.'-The Secretary of Transportation and Communications, through his duly designated Undersecretary, shall exercise administrative supervision and control over the Land Transportation Franchising and Regulatory Board.
243'E.O. No. 202, Sec. 6 provides:
SECTION 6.'Decision of the Board; Appeals therefrom and/or Review thereof.'The Board, in the exercise of its powers and functions, shall sit and render its decision en banc. Every such decision, order, or resolution of the Board must bear the concurrence and signature of at least two (2) members thereof. The decision, order or resolution of the Board shall be appealable to the Secretary within thirty (30) days from receipt of the decision: Provided, That the Secretary may motu proprio review any decision or action of the Board before the same becomes final.
244'E.O. No. 202, Sec. 5.
245'Also known as "The Land Transportation and Traffic Code," which took effect on June 20, 1964.
246'See'Olongapo and Electric Light and Power Corporation v. National Power Corporation,'233 Phil. 153 (1987), where this Court, citing Sections 13(a) and 14 of Commonwealth Act No. 46, also known as the Public Service Act, said that public services owned or operated by any instrumentality of the national government or by any government owned and controlled corporation are not required to secure certificates of public convenience.
247'Adm. Code, Book IV, Title XV, Chapter 6, Sec. 23.
248'Adm. Code, Book IV, Title XV, Chapter 6, Sec. 24 provides:
SECTION 24. Functions of Attached Agencies and Corporations.-The Agencies attached to the Department shall continue to operate and function in accordance with the respective charters or laws creating them, except when they conflict with this Code.
249'Amending Executive Order No. 125, Entitled "Reorganizing the Ministry of Transportation and Communications Defining Its Powers and Functions, And For Other Purposes." Approved on April 19, 1987.
250'Section 1 amending Section 5 of E.O. No. 125.
251'Adm. Code, Book IV, Title XV, Chapter I, Sec. 3(15) provides:
(15)'Determine, fix and/or prescribe charges and/or rates pertinent to the operation of public air and land transportation utility facilities and services,'except such rates and/or charges as may be prescribed by the Civil Aeronautics Board under its charter, and, in cases where charges or rates are established by international bodies or associations of which the Philippines is a participating member or by bodies or associations recognized by the Philippine government as the proper arbiter of such charges or rates
252'Quezon City PTCA Federation, Inc. v. Department of Education,'781 Phil. 399, 444 (2016), citing'Central Bank of the Philippines v. Cloribel,'150-A Phil. 86 (1972).
253'Supra'note 1.
254'Id.'at 312.
255'Id.
256'Association of International Shipping Lines, Inc. v. Philippine Ports Authority,'494 Phil. 664, 677 (2005).
257'486 Phil. 1136 (2004).
258'Id.'at 1145-1146,
259'Pe'afrancia Shipping Corporation, et al. v. 168 Shipping Lines, Inc.,'795 Phil. 753, 772 (2016).
260'795 Phil. 753 (2016).
261'Id.'at 772-774.
262'Supra'note 103.
263'Id.
264'Rollo'(G.R. No. 215650), Vol. I, p. 1066.
265'Id.
266'Rollo'(G.R. No. 215650), Vol. I, p. 114.
267'Id.
268'Id.'at 108-110.
269'Id.'at 105 and 114.
270'Id.'at 105-108.
271'Id.'at 109.
272'Rollo'(G.R. No. 215650), Vol. II, pp. 1000-1001.
273'Id.
274'Id.'at 131-132.
275'Rollo'(G.R. No. 215653), Vol. I, p. 95.
276'Id.'at 84.
277'Id.'at 106-107.
278'Concurring Opinion, p. 4.
279'Id.
280'White Light Corporation, et al. v. City of Manila,'596 Phil. 444, 461 (2009).
281'Association of International Shipping Lines, Inc. v. Philippine Ports Authority,'supra'note 256, at 679, citing'National Semiconductor (HK) Distribution, Ltd. v. National Labor Relations Commission,'353 Phil. 551, 558 (1998).
282'Concurring Opinion, p. 14, citing'Rubi v. Provincial Board of Mindoro,'39 Phil. 660, 707 (1919) and'Saunar v. Exec. Sec. Ermita, et al.,'822 Phil. 536, 546 (2017).
283'Id.
284'Rollo'(G.R. No. 215650) Vol. II, pp. 876-877.
285'Rollo'(G.R. No. 215650), Vol. III, p. 1074.
286'Republic of the Philippines v. Manila Electric Company,'440 Phil. 389, 398 (2002).
287'Philippine Communications Satellite Corporation v. Alcuaz,'259 Phil. 707, 715 (1989).
288'Republic of the Philippines v. Manila Electric Campany,'440 Phil. 389 (2002).
289'Id.'at 399.
290'Id.
291'NASECORE v. MERALCO,'797 Phil. 12, 30 (2016).
292'Id.
293'797 Phil. 12 (2016).
294'Id.'at 31.
295'Id.'at 30-31.
296'Rollo'(G.R. No. 215653), Vol. I, pp. 108-110.
297'Id.
298'Republic of the Philippines v. Manila Electric Company,'supra'note 289, at 400.
Trust and Verification
