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ATTY. SYLVIA BANDA v. EDUARDO R. ERMITA

FACTS:

The case revolves around the constitutionality of Executive Order No. 378, issued by President Gloria Macapagal Arroyo, which amends the functions and scope of the National Printing Office (NPO). The petitioners, claiming to represent the NPO employees affected by the executive order, filed a class suit challenging its constitutionality. However, it was revealed that the petitioners did not adequately represent the entire class as some petitioners withdrew from the suit and there was a divergence of opinions among the members. Consequently, the case could not be treated as a class suit.

The authority of the President to reorganize the administrative structure of the Office of the President is at the heart of this case. Section 31 of the Administrative Code of 1987 grants the President the power to restructure the internal organization of the Office of the President, including transferring functions or offices to other departments or agencies and making changes to the functional and internal structure as necessary. Executive Order No. 378 redefined the functions and scope of the NPO, allowing it to compete with the private sector for certain government printing jobs while preserving its exclusivity over election paraphernalia.

There are differing views about the scope of the President's reorganization powers, with some suggesting that it only extends to the transfer of functions and offices. However, Section 20 of the Administrative Code provides that the President may exercise residual powers unless Congress provides otherwise.

ISSUES:

  1. Whether or not the President has the power to effect less radical or less substantive changes to the functional and internal structure of the Office of the President.

  2. Whether or not the President's power to reorganize the Executive Branch includes the power to create offices and transfer functions.

  3. Whether or not the provisions of the general appropriations laws further support the President's authority to effect organizational changes in the department or agency under the executive structure.

  4. Whether the President has the authority to implement organizational changes in executive offices already funded by the appropriations act.

  5. Whether the limitation of the NPO's appropriations to its own income under Executive Order No. 378 is statutorily authorized.

  6. Whether the President has the power to reorganize government entities under the Executive Department through executive or administrative order.

  7. Whether Executive Order No. 378 limiting the appropriation of the National Printing Office (NPO) to its own income is objectionable.

  8. Whether or not Executive Order No. 378 is a valid exercise of legislative power

  9. Whether or not the reorganization of the National Printing Office (NPO) under Executive Order No. 378 is tainted with bad faith

RULING:

  1. Yes, the President has the power to effect less radical or less substantive changes to the functional and internal structure of the Office of the President as such power is concomitant to the power to abolish, merge, or consolidate offices in the Office of the President Proper and to transfer functions/offices among the offices in the Office of President Proper and the rest of the Office of the President and the Executive Branch.

  2. Yes, the President's power to reorganize the Executive Branch includes the power to create offices and transfer functions.

  3. Yes, the provisions of the general appropriations laws further support the President's authority to effect organizational changes in the department or agency under the executive structure. The Court has recognized that the President's power to effect organizational changes is authorized by specific provisions in general appropriations laws.

  4. Yes, the President has the authority to implement organizational changes in executive offices already funded by the appropriations act. The 2003 General Appropriations Act, which was reenacted in 2004, grants the President the authority to effect a wide variety of organizational changes in any department or agency in the Executive Branch. Sections 77 and 78 provide that the President may authorize changes in key positions or organizational units in any department or agency in their respective organizational structures and funded from appropriations provided by the Act. The provisions recognize the power of the President to reorganize the executive bureaucracy and modify or realign appropriations of funds as may be necessary under such reorganization.

  5. Yes, the limitation of the NPO's appropriations to its own income under Executive Order No. 378 is statutorily authorized. In the case of Bagaoisan v. National Tobacco Administration, the Court upheld the "streamlining" of an agency through a reduction of its personnel and deemed it as included in the power of the President to reorganize executive offices granted under the laws. The Court also referred to the power of the President to reorganize the Office of the President Proper and other executive offices outside the Office of the President. In this case, where there is neither an abolition nor transfer of offices, the reorganization carried out is within the authority of the President and is deemed to be done in the interest of simplicity, economy, and efficiency.

  6. Yes, the President has the power to reorganize government entities under the Executive Department through executive or administrative order. The power of the President to reorganize the executive department is constitutionally and statutorily recognized. This power is expressed in Section 17, Article VII of the 1987 Constitution which states that the President shall have control of all executive departments, bureaus, and offices. Additionally, Section 31, Book III, Chapter 10 of Executive Order No. 292, also known as the Administrative Code of 1987, grants the President continuing authority to reorganize the administrative structure of the Office of the President to achieve simplicity, economy, and efficiency. This power of the President is further affirmed by existing laws and jurisprudence (Domingo v. Zamora and Anak Mindanao Party-List Group v. Executive Secretary).

  7. No, the provision in Executive Order No. 378 limiting the appropriation of the NPO to its own income is not objectionable. The Court finds nothing objectionable in such provision as it reflects the power of the President to reorganize executive offices or agencies, including modifying and realigning appropriations for that purpose. This power is recognized in the general appropriations laws and has been consistently affirmed by the Court in previous cases.

  8. Executive Order No. 378, which redefines the functions of the NPO and limits its funding to its own income, is a valid exercise of legislative power. The President has the authority to reorganize her own office, as well as the departments, offices, and agencies of the executive branch, in accordance with the Constitution, relevant laws, and prevailing jurisprudence.

  9. The reorganization of the NPO under Executive Order No. 378 is not tainted with bad faith. The petitioners failed to substantiate their claim that the limitation of the NPO's budget to its own income would lead to the abolition of positions or removal from office of any employee. There was no sufficient evidence presented to prove that the changes in the functions of the NPO were for political considerations and not for the purpose of improving efficiency or encouraging operational economy in the agency.

PRINCIPLES:

  • The President has the power to effect less radical or less substantive changes to the functional and internal structure of the Office of the President, including the modification of functions of executive agencies, in accordance with the exigencies of the service.

  • The power of the President to reorganize the Executive Branch includes the power to create offices and transfer functions, as provided by other laws.

  • Provisions in general appropriations laws can further support the President's authority to effect organizational changes in the department or agency under the executive structure.

  • The President has the authority to implement organizational changes in executive offices already funded by the appropriations act.

  • The President's power to reorganize agencies under the executive department by executive or administrative order is constitutionally and statutorily authorized.

  • The President has the power to reorganize government entities under the Executive Department through executive or administrative order, as constitutionally and statutorily recognized.

  • The power of the President to reorganize the executive department is supported by Section 17, Article VII of the 1987 Constitution, as well as Section 31, Book III, Chapter 10 of the Administrative Code of 1987.

  • The power to reorganize is granted to the President in order to achieve simplicity, economy, and efficiency in the government.

  • The power of the President to reorganize executive offices or agencies, including modifying and realigning appropriations, is reflected in the general appropriations laws and has been consistently affirmed by the Court.

  • Reorganizations in the Philippines are regarded as valid if pursued in good faith, for the purpose of economy or making the bureaucracy more efficient. However, if reorganization is done for political reasons or to defeat security of tenure, it is considered invalid.

  • The presidential power to reorganize agencies and offices in the executive branch is subject to the condition that it is carried out in good faith.

  • Government employees do not have an absolute right to hold office, except for those holding constitutional offices.

  • The burden of proof lies with the party asserting a fact or the affirmative of an issue.