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ROMULO v. HOME DEVELOPMENT MUTUAL FUND

FACTS:

The law firm Romulo, Mabanta, Buenaventura, Sayoc and De Los Angeles (petitioner) had been exempted from Pag-IBIG Fund coverage for the period January 1 to December 31, 1995, due to its superior retirement plan. However, the Home Development Mutual Fund (HDMF) issued Board Resolution No. 1011, Series of 1995, which amended the Rules and Regulations Implementing Republic Act No. 7742. The amendment required a company to have a plan providing for both provident/retirement and housing benefits in order to be exempt from Pag-IBIG Fund coverage. Petitioner filed an application for waiver or suspension of Fund coverage, asserting that the 1995 Amendments were invalid. HDMF disapproved petitioner's application, arguing that the requirement for both provident retirement fund and housing plan is clear in the use of the phrase "and/or." Despite petitioner's appeal and petition to the Court of Appeals, their claims were denied by both forums. Hence, petitioner filed a petition before the Supreme Court, contending that the amendments were contrary to law and that a public hearing should have been conducted prior to their adoption.

ISSUES:

  1. Whether the 1995 Amendments to the Rules and Regulations Implementing Republic Act No. 7742, which require the existence of a plan providing for both provident/retirement and housing benefits, are valid.

  2. Whether the 1996 Amendments to the Rules and Regulations Implementing Republic Act No. 7742, which abolished the exemption granted by Section 19 of P.D. 1752, as amended, are valid.

  3. Whether the HDMF complied with the requirement of public participation in the promulgation of the amendments.

  4. Whether the HDMF complied with the requirement of filing the rules with the University of the Philippines Law Center.

RULING:

  1. The 1995 Amendments to the Rules and Regulations Implementing Republic Act No. 7742, which require the existence of a plan providing for both provident/retirement and housing benefits for exemption from the Pag-IBIG Fund coverage, are valid. The Board of Trustees of the HDMF is authorized to promulgate rules and regulations, as well as amendments thereto, concerning the extension, waiver, or suspension of coverage under the Pag-IBIG Fund. The publication requirement was also met, as the amendments were published in a newspaper of general circulation.

  2. The 1996 Amendments to the Rules and Regulations Implementing Republic Act No. 7742, which abolished the exemption granted by Section 19 of P.D. 1752, as amended, are valid. The Board of Trustees has the power to amend the rules and regulations in order to effectively implement the Pag-IBIG Fund Law. The repeal of the exemption granted by Section 19 involves the exercise of rule-making power and is within the authority of the HDMF.

  3. The HDMF did not comply with the requirement of public participation as provided in Section 9(1), Chapter 2, Book VII of the Administrative Code of 1987. The imposition of an additional burden through the amendments should have been preceded by a public hearing to allow interested parties, such as the employers, to present their views.

  4. The HDMF did not comply with the requirement of filing the rules with the University of the Philippines Law Center, as provided in Section 3, Chapter 2, Book VII of the Administrative Code of 1987. This failure to file the rules renders the amendments void.

PRINCIPLES:

  • The Board of Trustees of the HDMF is authorized to promulgate rules and regulations, as well as amendments thereto, concerning the extension, waiver, or suspension of coverage under the Pag-IBIG Fund.

  • The publication requirement for rules and regulations is met when the amendments are published in a newspaper of general circulation.

  • The imposition of an additional burden through amendments to rules and regulations should be preceded by a public hearing to allow interested parties to present their views.

  • Rules and regulations must be filed with the University of the Philippines Law Center in compliance with the Administrative Code of 1987.