Abakada Guro Party List vs. Purisima | G.R. No.

166715
Aug 14, 2008 | Corona, J. | Legislative Veto

PETITIONER/S: ABAKADA GURO PARTY LIST (formerly AASJS)1 OFFICERS/MEMBERS

SAMSON S. ALCANTARA, ED VINCENT S. ALBANO, ROMEO R. ROBISO, RENE B. GOROSPE
and EDWIN R. SANDOVAL, NEPTALI A. GONZALES, ERNESTO M. MACEDA, ALBERTO G.
ROMULO, HEHERSON T. ALVAREZ, EDGARDO J. ANGARA, AGAPITO A. AQUINO, TEOFISTO T.
GUINGONA, JR., ERNESTO F. HERRERA, JOSE D. LINA, JR., JOHN OSMENA, VICENTE T.
PATERNO, RENE A. SAGUISAG, LETICIA RAMOS-SHAHANI, MAMINTAL ABDUL J. TAMANO,
WIGBERTO E. TANADA, JOVITO R. SALONGA, ORLANDO S. MERCADO, JUAN PONCE ENRILE,
JOSEPH ESTRADA, SOTERO LAUREL, AQUILINO PIMENTEL, JR., SANTANINA RASUL,
VICTOR ZIGA,
RESPONDENT/S: HON. CESAR V. PURISIMA, in his capacity as Secretary of Finance, HON.
GUILLERMO L. PARAYNO, JR., in his capacity as Commissioner of the Bureau of Internal Revenue,
and HON. ALBERTO D. LINA, in his Capacity as Commissioner of Bureau of Customs,

SUMMARY:
The case revolves around the constitutionality of Republic Act 9335, which establishes a system of
rewards and incentives for officials of the Bureau of Internal Revenue (BIR) and the Bureau of
Customs (BOC).

ISSUE/S:

Whether or not the creation of a congressional oversight committee violates the doctrine of
separation of powers.
Whether or not R.A. 9335 is constitutional

RULING:
 The Supreme Court upholds the constitutionality of Republic Act 9335, except for Section 12
which creates the congressional oversight committee.
 The Court declares Section 12, which creates the congressional oversight committee, as
unconstitutional, as it allows legislative participation in the implementation and enforcement
of the law, violating the principle of separation of powers.
 The Court finds that the petitioners have failed to show a personal stake in the outcome of the
case or an injury to themselves, making their petition procedurally infirm.
 However, the Court recognizes the public interest in resolving the constitutional issues raised
by the petitioners.
 The Court emphasizes the principle of public accountability and the presumption of
constitutionality in favor of the law.
 The Court finds the distinction between the BIR and the BOC and other government agencies
reasonable and based on substantial differences in their functions and responsibilities.
 The Court finds that the law provides sufficient standards for the President to follow in setting
revenue targets.
 DETAILED FACTS:

 This petition for prohibition1 seeks to prevent respondents from implementing and
enforcing Republic Act (RA) 93352 (Attrition Act of 2005).

 RA 9335 was enacted to optimize the revenue-generation capability and collection of the
Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC). The law intends to
encourage BIR and BOC officials and employees to exceed their revenue targets by
providing a system of rewards and sanctions through the creation of a Rewards and
Incentives Fund (Fund) and a Revenue Performance Evaluation Board (Board).3 It covers
all officials and employees of the BIR and the BOC with at least six months of service,
regardless of employment status.

 The Fund is sourced from the collection of the BIR and the BOC in excess of their revenue
targets for the year, as determined by the Development Budget and Coordinating
Committee (DBCC). Any incentive or reward is taken from the fund and allocated to the
BIR and the BOC in proportion to their contribution in the excess collection of the targeted
amount of tax revenue.

 Petitioners, invoking their right as taxpayers filed this petition challenging the
constitutionality of RA 9335, a tax reform legislation. They contend that, by establishing a
system of rewards and incentives, the law "transform[s] the officials and employees of the
BIR and the BOC into mercenaries and bounty hunters" as they will do their best only in
consideration of such rewards. Thus, the system of rewards and incentives invites
corruption and undermines the constitutionally mandated duty of these officials and
employees to serve the people with utmost responsibility, integrity, loyalty and efficiency.

 Petitioners also claim that limiting the scope of the system of rewards and incentives only
to officials and employees of the BIR and the BOC violates the constitutional guarantee of
equal protection. There is no valid basis for classification or distinction as to why such a
system should not apply to officials and employees of all other government agencies.

PRINCIPLE:

Concept and bases of congressional oversight

Broadly defined, the power of oversight embraces all activities undertaken by Congress to enhance its
understanding of and influence over the implementation of legislation it has enacted. Clearly, oversight
concerns post-enactment measures undertaken by Congress:
(a) to monitor bureaucratic compliance with program objectives,
(b) to determine whether agencies are properly administered,
(c) to eliminate executive waste and dishonesty,
(d) to prevent executive usurpation of legislative authority, and (d) to assess executive
conformity with the congressional perception of public interest.

The power of oversight has been held to be intrinsic in the grant of legislative power itself and
integral to the checks and balances inherent in a democratic system of government.
Over the years, Congress has invoked its oversight power with increased frequency to check the
perceived "exponential accumulation of power" by the executive branch. By the beginning of the 20th
century, Congress has delegated an enormous amount of legislative authority to the executive branch
and the administrative agencies. Congress, thus, uses its oversight power to make sure that the
administrative agencies perform their functions within the authority delegated to them.

3 Categories of congressional oversight functions

The acts done by Congress purportedly in the exercise of its oversight powers may be divided into
three categories, namely: scrutiny, investigation and supervision.

a. Scrutiny

Congressional scrutiny implies a lesser intensity and continuity of attention to administrative operations.
Its primary purpose is to determine economy and efficiency of the operation of government activities.
In the exercise of legislative scrutiny, Congress may request information and report from the other
branches of government. It can give recommendations or pass resolutions for consideration of the
agency involved.

b. Congressional investigation

While congressional scrutiny is regarded as a passive process of looking at the facts that are readily
available, congressional investigation involves a more intense digging of facts. The power of Congress
to conduct investigation is recognized by the 1987 Constitution under section 21, Article VI,

c. Legislative supervision

The third and most encompassing form by which Congress exercises its oversight power is thru
legislative supervision. "Supervision" connotes a continuing and informed awareness on the part of a
congressional committee regarding executive operations in a given administrative area. While both
congressional scrutiny and investigation involve inquiry into past executive branch actions in order to
influence future executive branch performance, congressional supervision allows Congress to
scrutinize the exercise of delegated law-making authority, and permits Congress to retain part of that
delegated authority.

Congress exercises supervision over the executive agencies through its veto power. It typically utilizes
veto provisions when granting the President or an executive agency the power to promulgate
regulations with the force of law. These provisions require the President or an agency to present the
proposed regulations to Congress, which retains a "right" to approve or disapprove any regulation
before it takes effect. Such legislative veto provisions usually provide that a proposed regulation will
become a law after the expiration of a certain period of time, only if Congress does not affirmatively
disapprove of the regulation in the meantime. Less frequently, the statute provides that a proposed
regulation will become law if Congress affirmatively approves it.

Legislative Veto

Legislative veto is a statutory provision requiring the President or an administrative agency to

present the proposed implementing rules and regulations of a law to Congress which, by itself
or through a committee formed by it, retains a "right" or "power" to approve or disapprove such
regulations before they take effect. As such, a legislative veto in the form of a congressional
oversight committee is in the form of an inward-turning delegation designed to attach a
congressional leash (other than through scrutiny and investigation) to an agency to which
Congress has by law initially delegated broad powers. [43] It radically changes the design or
structure of the Constitution's diagram of power as it entrusts to Congress a direct role in enforcing,
applying or implementing its own laws. [44]

Congress has two options when enacting legislation to define national policy within the broad horizons
of its legislative competence.[45] It can itself formulate the details or it can assign to the executive
branch the responsibility for making necessary managerial decisions in conformity with those
standards.[46] In the latter case, the law must be complete in all its essential terms and conditions when
it leaves the hands of the legislature.[47] Thus, what is left for the executive branch or the concerned
administrative agency when it formulates rules and regulations implementing the law is to fill up details
(supplementary rule-making) or ascertain facts necessary to bring the law into actual operation
(contingent rule-making).[48]

Administrative regulations enacted by administrative agencies to implement and interpret the law which
they are entrusted to enforce have the force of law and are entitled to respect. [49] Such rules and
regulations partake of the nature of a statute [50] and are just as binding as if they have been written
in the statute itself. As such, they have the force and effect of law and enjoy the presumption of
constitutionality and legality until they are set aside with finality in an appropriate case by a competent
court. [51] Congress, in the guise of assuming the role of an overseer, may not pass upon their
legality by subjecting them to its stamp of approval without disturbing the calculated balance
of powers established by the Constitution. In exercising discretion to approve or disapprove
the IRR based on a determination of whether or not they conformed with the provisions of RA
9335, Congress arrogated judicial power unto itself, a power exclusively vested in this Court by
the Constitution.