Office of the President from other Departments and Agencies; and

(3) Transfer any agency under the Office of the President

to any other Department or Agency as well as transfer
agencies to the Office of the President from other departments or
agencies.
Same; Same; Same; Presidential Anti-Graft Commission
(PAGC); The abolition of the Presidential Anti-Graft Commission
G.R. No. 196425. July 24, 2012.* (PAGC) and the transfer of its functions to a division specially
PROSPERO A. PICHAY, JR., petitioner, vs. OFFICE OF created within the Office of the Deputy Executive Secretary for
THE DEPUTY EXECUTIVE SECRETARY FOR LEGAL Legal Affairs (ODESLA) is properly within the prerogative of the
AFFAIRS–INVESTIGATIVE and ADJUDICATORY President under his continuing “delegated legislative authority to
DIVISION, HON. PAQUITO N. OCHOA, JR., in his reorganize” his own office pursuant to E.O. 292; Only Section 31(1)
capacity as Executive Secretary, and HON. CESAR V. gives the President a virtual freehand in dealing with the internal
PURISIMA, in his capacity as Secretary of Finance, and as structure of the Office of the President Proper by allowing him to
an ex officio member of the Monetary Board, respondents. take actions as extreme as abolition, consolidation or merger of
units, apart from the less drastic move of transferring functions
and offices from one unit to another.—Clearly, the abolition of the
Administrative Law; Presidency; Reorganizations;
PAGC and the transfer of its functions to a division specially
Administrative Code of 1987 (E.O. No. 292); Section 31 of
created within the ODESLA is properly within the prerogative of
Executive Order No. 292 (E.O. 292), otherwise known as the
the President under his continuing “delegated legislative authority
Administrative Code of 1987, vests in the President the continuing
to reorganize” his own office pursuant to E.O. 292. Generally, this
authority to reorganize the offices under him in order to achieve
authority to implement organizational changes is limited to
simplicity, economy and efficiency.—Section 31 of Executive Order
transferring either an office or a function from the Office of the
No. 292 (E.O. 292), otherwise known as the Administrative Code
President to another Department or Agency, and the other way
of 1987, vests in the President the continuing authority to
around. Only Section 31(1) gives the President a virtual freehand
reorganize the offices under him in order to achieve simplicity,
in dealing with the internal structure of the Office of the
economy and efficiency. E.O. 292 sanctions the following actions
President Proper by allowing him to take actions as extreme as
undertaken for such purpose: (1) Restructure the internal
abolition, consolidation or merger of units, apart from the less
organization of the Office of the President Proper,
drastic move of transferring functions and offices from one unit to
including the immediate Offices, the Presidential Special
another.
Assistants/Advisers System and the Common Staff Support
System, by abolishing, consolidating, or merging units Same; Same; Same; Same; Since both the Presidential Anti-
thereof or transfer- Graft Commission (PAGC) and the Office of the Deputy Executive
Secretary for Legal Affairs (ODESLA) belong to the Office of the
President Proper, the reorganization by way of abolishing the
_______________
PAGC and transferring its functions to the ODESLA is allowable
* EN BANC. under Section 31 (1) of E.O. 292.—The distinction between the
allowable organizational actions under Section 31(1) on the one
409
hand and Section 31 (2) and (3) on the other is crucial not only as
it affects

VOL. 677, JULY 24, 2012 409 410

Pichay, Jr. vs. Office of the Deputy Executive Secretary for Legal
Affairs-Investigative and Adjudicatory Division 410 SUPREME COURT REPORTS ANNOTATED

Pichay, Jr. vs. Office of the Deputy Executive Secretary for Legal
ring functions from one unit to another; (2) Transfer any Affairs-Investigative and Adjudicatory Division
function under the Office of the President to any other
Department or Agency as well as transfer functions to the
 Pichay, Jr. vs. Office of the Deputy Executive Secretary for Legal
employees’ tenurial security but also insofar as it touches upon
Affairs-Investigative and Adjudicatory Division
the validity of the reorganization, that is, whether the executive
actions undertaken fall within the limitations prescribed under
E.O. 292. When the PAGC was created under E.O. 12, it was initially appropriated P22 Million for the PAGC’s operation in the
composed of a Chairman and two (2) Commissioners who held the 2010 annual budget, no separate or added funding of such a
ranks of Presidential Assistant II and I, respectively, and was considerable amount was ever required after the transfer of the
placed directly “under the Office of the President.” On the other PAGC functions to the IAD-ODESLA.
hand, the ODESLA, to which the functions of the PAGC have now Administrative Agencies; The Investigative and Adjudicatory
been transferred, is an office within the Office of the President Division, Office of the Deputy Executive Secretary for Legal Affairs
Proper. Since both of these offices belong to the Office of the (IAD-ODESLA) is a fact-finding and recommendatory body to the
President Proper, the reorganization by way of abolishing the President, not having the power to settle controversies and
PAGC and transferring its functions to the ODESLA is allowable adjudicate cases.—Under E.O. 12, the PAGC was given the
under Section 31 (1) of E.O. 292. authority to “investigate or hear administrative cases or
Same; Same; Same; Same; The abolition of the Presidential complaints against all presidential appointees in the government”
Anti-Graft Commission (PAGC) did not require the creation of a and to “submit its report and recommendations to the President.”
new, additional and distinct office as the duties and functions that The IAD-ODESLA is a fact-finding and recommendatory body to
pertained to the defunct anti-graft body were simply transferred to the President, not having the power to settle controversies and
the Office of the Deputy Executive Secretary for Legal Affairs adjudicate cases.
(ODESLA), which is an existing office within the Office of the Ombudsman; The Ombudsman’s authority to investigate both
President Proper.—The abolition of the PAGC did not require the elective and appointive officials in the government, extensive as it
creation of a new, additional and distinct office as the duties and may be, is by no means exclusive. It is shared with other similarly
functions that pertained to the defunct anti-graft body were authorized government agencies.—Since the case filed before the
simply transferred to the ODESLA, which is an existing office IAD-ODESLA is an administrative disciplinary case for grave
within the Office of the President Proper. The reorganization misconduct, petitioner may not invoke the primary jurisdiction of
required no more than a mere alteration of the administrative the Ombudsman to prevent the IAD-ODESLA from proceeding
structure of the ODESLA through the establishment of a third with its investigation. In any event, the Ombudsman’s authority
division—the Investigative and Adjudicatory Division—through to investigate both elective and appointive officials in the
which ODESLA could take on the additional functions it has been government, extensive as it may be, is by no means exclusive. It is
tasked to discharge under E.O. 13. shared with other similarly authorized government agencies.
Same; Same; Same; Same; A reorganization is said to be Constitutional Law; Equal Protection of the Laws; The equal
carried out in good faith if it is done for purposes of economy and protection of the laws is a guaranty against any form of undue
efficiency.—A valid reorganization must not only be exercised favoritism or hostility from the government; The equal protection
through legitimate authority but must also be pursued in good clause, however, is not absolute but subject to reasonable
faith. A reorganization is said to be carried out in good faith if it is classification so that aggrupations bearing substantial distinctions
done for purposes of economy and efficiency. It appears in this may be treated differently from each other.—The equal protection
case that the streamlining of functions within the Office of the of the laws is a guaranty against any form of undue favoritism or
President Proper was pursued with such purposes in mind. In its hostility from the government. It is embraced under the due
Whereas clauses, E.O. 13 cites as bases for the reorganization the process concept and simply requires that, in the application of the
policy dictates of eradicating corruption in the government and law, “all persons or things similarly situated should be treated
promoting economy and efficiency in the bureaucracy. Indeed, the alike, both as to rights conferred and responsibilities imposed.”
economical effects of the reorganization is shown by the fact that The equal protection clause, however, is not absolute but subject
while Congress had to reasonable classification so that aggru-

411 412

VOL. 677, JULY 24, 2012 411 412 SUPREME COURT REPORTS ANNOTATED
 Pichay, Jr. vs. Office of the Deputy Executive Secretary for Legal Pichay, Jr. vs. Office of the Deputy Executive Secretary for
Affairs-Investigative and Adjudicatory Division Legal Affairs-Investigative and Adjudicatory Division

pations bearing substantial distinctions may be treated   Franklin C. Sunga and Althea Barbara E. Acas for
differently from each other. petitioner.
Administrative Law; Presidency; Having the power to remove
  The Solicitor General for respondents.
and/or discipline presidential appointees, the President has the
PERLAS-BERNABE, J.:
corollary authority to investigate such public officials and look
The Case
into their conduct in office.—Presidential appointees come under
This is a Petition for Certiorari and Prohibition with a
the direct disciplining authority of the President. This proceeds
prayer for the issuance of a temporary restraining order,
from the well settled principle that, in the absence of a contrary
seeking to declare as unconstitutional Executive Order No.
law, the power to remove or to discipline is lodged in the same
13, entitled, “Abolishing the Presidential Anti-Graft
authority on which the power to appoint is vested. Having the
Commission and Transferring Its Investigative,
power to remove and/or discipline presidential appointees, the
Adjudicatory and Recommendatory Functions to the Office
President has the corollary authority to investigate such public
Of The Deputy Executive Secretary For Legal Affairs, Office
officials and look into their conduct in office. Petitioner is a
of the President,”1 and to permanently prohibit respondents
presidential appointee occupying the high-level position of
from administratively proceeding against petitioner on the
Chairman of the LWUA. Necessarily, he comes under the
strength of the assailed executive order.
disciplinary jurisdiction of the President, who is well within his
The Facts
right to order an investigation into matters that require his
On April 16, 2001, then President Gloria Macapagal-
informed decision.
Arroyo issued Executive Order No. 12 (E.O. 12) creating
Administrative Proceedings; Due Process; In administrative the Presidential Anti-Graft Commission (PAGC) and
proceedings, the filing of charges and giving reasonable vesting it with the power to investigate or hear
opportunity for the person so charged to answer the accusations administrative cases or complaints for possible graft and
against him constitute the minimum requirements of due process, corruption, among others, against presidential appointees
 which simply means having the opportunity to explain one’s side. and to submit its report and recommendations to the
—In administrative proceedings, the filing of charges and giving President. Pertinent portions of E.O. 12 provide:
reasonable opportunity for the person so charged to answer the
accusations against him constitute the minimum requirements of “Section 4. Jurisdiction, Powers and Functions.—
due process, which simply means having the opportunity to (a) xxx xxx xxx
explain one’s side. Hence, as long as petitioner was given the (b) The Commission, acting as a collegial body, shall have the
opportunity to explain his side and present evidence, the authority to investigate or hear administrative cases or
requirements of due process are satisfactorily complied with complaints
because what the law abhors is an absolute lack of opportunity to
be heard. The records show that petitioner was issued an Order _______________
requiring him to submit his written explanation under oath with 1 Rollo, pp. 51-53.
respect to the charge of grave misconduct filed against him. His
414
own failure to submit his explanation despite notice defeats his
subsequent claim of denial of due process.
414 SUPREME COURT REPORTS ANNOTATED
SPECIAL CIVIL ACTION in the Supreme Court. Pichay, Jr. vs. Office of the Deputy Executive Secretary for Legal
Certiorari and Prohibition. Affairs-Investigative and Adjudicatory Division
   The facts are stated in the opinion of the Court.
against all presidential appointees in the government and any of
414
its agencies or instrumentalities  xxx
xxx xxx xxx
414 SUPREME COURT REPORTS ANNOTATED xxx xxx xxx
Section 8. Submission of Report and Recommendations.—After the National Government and may, at his discretion, create,
completing its investigation or hearing, the Commission en banc abolish, group, consolidate, merge or integrate entities, agencies,
shall submit its report and recommendations to the President. instrumentalities and units of the National Government, as well
The report and recommendations shall state, among others, the as, expand, amend, change or otherwise modify their powers,
factual findings and legal conclusions, as well as the penalty functions and authorities;
recommend (sic) to be imposed or such other action that may be WHEREAS, Section 78 of the General Provisions of Republic Act
taken.” No. 9970 (General Appropriations Act of 2010) authorizes the
President of the Philippines to direct changes in the
  organizational units or key positions in any department or
On November 15, 2010, President Benigno Simeon agency;
Aquino III issued Executive Order No. 13 (E.O. 13), NOW, THEREFORE, I, BENIGNO S. AQUINO III, President of
abolishing the PAGC and transferring its functions to the the Philippines, by virtue of the powers vested in me by law, do
Office of the Deputy Executive Secretary for Legal Affairs hereby order the following:
(ODESLA), more particularly to its newly-established SECTION 1. Declaration of Policy.—It is the policy of the
Investigative and Adjudicatory Division (IAD). The full text government to fight and eradicate graft and corruption in the
of the assailed executive order reads: different departments, bureaus, offices and other government
agencies and instrumentalities.
EXECUTIVE ORDER NO. 13
The government adopted a policy of streamlining the government
ABOLISHING THE PRESIDENTIAL ANTI-GRAFT
bureaucracy to promote economy and efficiency in the
COMMISSION AND TRANSFERRING ITS INVESTIGATIVE,
government.
ADJUDICATORY AND RECOMMENDATORY FUNCTIONS TO
SECTION 2. Abolition of Presidential Anti-Graft Commission
THE OFFICE OF THE DEPUTY EXECUTIVE SECRETARY
(PAGC).—To enable the Office of the President (OP) to directly
FOR LEGAL AFFAIRS, OFFICE OF THE PRESIDENT
investigate graft and corrupt cases of Presidential appointees in
WHEREAS, this administration has a continuing mandate and
the Executive Department including heads of government-owned
advocacy to fight and eradicate corruption in the different
and controlled corporations, the Presidential Anti-Graft
departments, bureaus, offices and other government agencies and
Commission (PAGC) is hereby abolished and their vital functions
instrumentalities;
and other powers and functions inherent or incidental thereto,
WHEREAS, the government adopted a policy of streamlining the
transferred to the Office of the Deputy Executive Secretary for
government bureaucracy to promote economy and efficiency in
Legal Affairs (ODESLA), OP in accordance with the provisions of
government;
this Executive Order.
WHEREAS, Section VII of the 1987 Philippine Constitution
SECTION 3. Restructuring of the Office of the Deputy Executive
provides that the President shall have control of all the executive
Secretary for Legal Affairs, OP.—In addition to the Legal and
departments, bureaus and offices;
Legis-
415
416

VOL. 677, JULY 24, 2012 415

416 SUPREME COURT REPORTS ANNOTATED
Pichay, Jr. vs. Office of the Deputy Executive Secretary for Legal
Affairs-Investigative and Adjudicatory Division Pichay, Jr. vs. Office of the Deputy Executive Secretary for Legal
Affairs-Investigative and Adjudicatory Division

WHEREAS, Section 31 Chapter 10, Title III, Book III of Executive

lative Divisions of the ODESLA, the Investigative and
Order 292 (Administrative Code of 1987) provides for the
Adjudicatory Division shall be created.
continuing authority of the President to reorganize the
The newly created Investigative and Adjudicatory Division
administrative structure of the Office of the President;
shall perform powers, functions and duties mentioned in Section 2
WHEREAS, Presidential Decree (PD) No. 1416 (Granting
hereof, of PAGC.
Continuing Authority to the President of the Philippines to
The Deputy Executive Secretary for Legal Affairs (DESLA) will
Reorganize the National Government), as amended by PD 1722,
be the recommending authority to the President, thru the
provides that the President of the Philippines shall have
Executive Secretary, for approval, adoption or modification of the
continuing authority to reorganize the administrative structure of
report and recommendations of the Investigative and On April 14, 2011, petitioner received an Order3 signed
Adjudicatory Division of ODESLA. by Executive Secretary Paquito N. Ochoa, Jr. requiring him
SECTION 4. Personnel Who May Be Affected By the Abolition of and his co-respondents to submit their respective written
PAGC.—The personnel who may be affected by the abolition of explanations under oath. In compliance therewith,
the PAGC shall be allowed to avail of the benefits provided under petitioner filed a Motion to Dismiss Ex Abundante Ad
existing laws if applicable. The Department of Budget and Cautelam manifesting that a case involving the same
Management (DBM) is hereby ordered to release the necessary transaction and charge of grave misconduct entitled,
funds for the benefits of the employees. “Rustico B. Tutol, et al. v. Prospero Pichay, et al.”, and
SECTION 5. Winding Up of the Operation and Disposition of docketed as OMB-C-A-10-0426-I, is already pending before
the Functions, Positions, Personnel, Assets and Liabilities of the Office of the Ombudsman.
PAGC.— The winding up of the operations of PAGC including Now alleging that no other plain, speedy and adequate
the final disposition or transfer of their functions, positions, remedy is available to him in the ordinary course of law,
personnel, assets and liabilities as may be necessary, shall be in petitioner has resorted to the instant petition for certiorari
accordance with the applicable provision(s) of the Rules and and prohibition upon the following grounds:
Regulations Implementing EO 72 (Rationalizing the Agencies
Under or Attached to the Office of the President) dated March 15, I. E.O. 13 IS UNCONSTITUTIONAL FOR USURPING THE
2002. The winding up shall be implemented not later than 31 POWER OF THE LEGISLATURE TO CREATE A PUBLIC
December 2010. OFFICE.
The Office of the Executive Secretary, with the assistance of II. E.O. 13 IS UNCONSTITUTIONAL FOR USURPING
the Department of Budget and Management, shall ensure the THE POWER OF THE LEGISLATURE TO APPROPRIATE
smooth and efficient implementation of the dispositive actions FUNDS.
and winding-up of the activities of PAGC. III. E.O. 13 IS UNCONSTITUTIONAL FOR USURPING
SECTION 6. Repealing Clause.—All executive orders, rules, THE POWER OF CONGRESS TO DELEGATE QUASI-
regulations and other issuances or parts thereof, which are JUDICIAL POWERS TO ADMINISTRATIVE AGENCIES.
inconsistent with the provisions of this Executive Order, are
hereby revoked or modified accordingly. _______________

SECTION 7. Effectivity.—This Executive Order shall take effect 2 Docketed as OP-DC Case No. 11-D-008.

immediately after its publication in a newspaper of general 3 Rollo, p. 54.

circulation.
418

417
418 SUPREME COURT REPORTS ANNOTATED

VOL. 677, JULY 24, 2012 417 Pichay, Jr. vs. Office of the Deputy Executive Secretary for Legal
Affairs-Investigative and Adjudicatory Division
Pichay, Jr. vs. Office of the Deputy Executive Secretary for
Legal Affairs-Investigative and Adjudicatory Division IV. E.O. 13 IS UNCONSTITUTIONAL FOR
ENCROACHING UPON THE POWERS OF THE
On April 6, 2011, respondent Finance Secretary Cesar V. OMBUDSMAN.
Purisima filed before the IAD-ODESLA a complaint V. E.O. 13 IS UNCONSTITUTIONAL FOR VIOLATING
affidavit2 for grave misconduct against petitioner Prospero THE GUARANTEE OF DUE PROCESS.
A. Pichay, Jr., Chairman of the Board of Trustees of the VI. E.O. 13 IS UNCONSTITUTIONAL FOR VIOLATING
Local Water Utilities Administration (LWUA), as well as THE EQUAL PROTECTION CLAUSE.
the incumbent members of the LWUA Board of Trustees,
namely, Renato Velasco, Susana Dumlao Vargas, Bonifacio Our Ruling
Mario M. Pena, Sr. and Daniel Landingin, which arose In assailing the constitutionality of E.O. 13, petitioner
from the purchase by the LWUA of Four Hundred Forty- asseverates that the President is not authorized under any
Five Thousand Three Hundred Seventy Seven (445,377) existing law to create the Investigative and Adjudicatory
shares of stock of Express Savings Bank, Inc. Division, Office of the Deputy Executive Secretary for Legal
Affairs (IAD-ODESLA) and that by creating a new,
additional and distinct office tasked with quasi-judicial “But of course, the list of legal basis authorizing the President
functions, the President has not only usurped the powers of to reorganize any department or agency in the executive branch
congress to create a public office, appropriate funds and does not have to end here. We must not lose sight of the very
delegate quasi-judicial functions to administrative agencies source of the power—that which constitutes an express grant of
but has also encroached upon the powers of the power. Under Section 31, Book III of Executive Order No. 292
Ombudsman. (otherwise known as the Administrative Code of 1987), “the
Petitioner avers that the unconstitutionality of E.O. 13 President, subject to the policy of the Executive Office and in
is also evident when weighed against the due process order to achieve simplicity, economy and efficiency, shall have
requirement and equal protection clause under the 1987 the continuing authority to reorganize the administrative
Constitution. structure of the Office of the President.” For this purpose, he
The contentions are unavailing. may transfer the functions of other Departments or Agencies to
The President has Continuing the Office of the President.” (Emphasis supplied)
Authority to Reorganize the
Executive Department under And in Domingo v. Zamora,6 the Court gave the
E.O. 292. rationale behind the President’s continuing authority in
Section 31 of Executive Order No. 292 (E.O. 292), this wise:
otherwise known as the Administrative Code of 1987, vests
in the President the continuing authority to reorganize the _______________
offices under him in order to achieve simplicity, economy 4 Section 31, Chapter 10, Book III of E.O. No. 292.
and efficiency. E.O. 292 sanctions the following actions 5 G.R. Nos. 142801-802, July 10, 2001, 360 SCRA 718, 729.
undertaken for such purpose: 6 G.R. No. 142283, February 6, 2003, 397 SCRA 56.

419 420

VOL. 677, JULY 24, 2012 419 420 SUPREME COURT REPORTS ANNOTATED
Pichay, Jr. vs. Office of the Deputy Executive Secretary for Pichay, Jr. vs. Office of the Deputy Executive Secretary for
Legal Affairs-Investigative and Adjudicatory Division Legal Affairs-Investigative and Adjudicatory Division

“(1) Restructure the internal organization of the Office of “The law grants the President this power in recognition of the
the President Proper, including the immediate Offices, the recurring need of every President to reorganize his office “to
Presidential Special Assistants/Advisers System and the Common achieve simplicity, economy and efficiency.” The Office of the
Staff Support System, by abolishing, consolidating, or President is the nerve center of the Executive Branch. To remain
merging units thereof or transferring functions from one effective and efficient, the Office of the President must be
unit to another; capable of being shaped and reshaped by the President in
(2) Transfer any function under the Office of the the manner he deems fit to carry out his directives and
President to any other Department or Agency as well as policies. After all, the Office of the President is the command
transfer functions to the Office of the President from other post of the President.” (Emphasis supplied)
Departments and Agencies; and
(3) Transfer any agency under the Office of the President Clearly, the abolition of the PAGC and the transfer of its
to any other Department or Agency as well as transfer functions to a division specially created within the
agencies to the Office of the President from other departments or ODESLA is properly within the prerogative of the
agencies.”4 President under his continuing “delegated legislative
authority to reorganize” his own office pursuant to E.O.
In the case of Buklod ng Kawaning EIIB v. Zamora the 292.
Court5 affirmed that the President’s authority to carry out Generally, this authority to implement organizational
a reorganization in any branch or agency of the executive changes is limited to transferring either an office or a
department is an express grant by the legislature by virtue function from the Office of the President to another
of E.O. 292, thus: Department or Agency, and the other way around.7 Only
Section 31(1) gives the President a virtual freehand in Petitioner, however, goes on to assert that the President
dealing with the internal structure of the Office of the went beyond the authority granted by E.O. 292 for him to
President Proper by allowing him to take actions as reorganize the executive department since his issuance of
extreme as abolition, consolidation or merger of units, E.O. 13 did not merely involve the abolition of an office but
apart from the less drastic move of transferring functions the creation of one as well. He argues that nowhere in the
and offices from one unit to another. Again, in Domingo v. legal definition laid down by the Court in several cases
Zamora8 the Court noted: does a reorganization include the act of creating an office.
The contention is misplaced.
“However, the President’s power to reorganize the Office of the The Reorganization Did not
President under Section 31 (2) and (3) of EO 292 should be Entail the Creation of a New,
distinguished from his power to reorganize the Office of the Separate and Distinct Office.
President Proper. Under Section 31 (1) of EO 292, the President
can reorganize the Office of the President Proper by abolishing,
_______________
consolidating or merging units, or by transferring functions from
9   Section 2, E.O. 12.
one unit to another. In contrast, under Section 31 (2) and (3) of
10  Section 1, E.O. 12.
EO 292, the President’s power to reorganize offices outside the
11  Section 22, Chapter 8, Book III, The Administrative Code of 1987.
Office of the President Proper but still within the Office of the
President is limited to merely trans- 422

_______________
7 Paragraphs (2) and (3) of Section 31.
422 SUPREME COURT REPORTS ANNOTATED
8 G.R. No. 142283, February 6, 2003, 397 SCRA 56. Pichay, Jr. vs. Office of the Deputy Executive Secretary for
Legal Affairs-Investigative and Adjudicatory Division
421

The abolition of the PAGC did not require the creation of

VOL. 677, JULY 24, 2012 421 a new, additional and distinct office as the duties and
Pichay, Jr. vs. Office of the Deputy Executive Secretary for Legal functions that pertained to the defunct anti-graft body were
Affairs-Investigative and Adjudicatory Division simply transferred to the ODESLA, which is an existing
office within the Office of the President Proper. The
ferring functions or agencies from the Office of the President to reorganization required no more than a mere alteration of
Departments or Agencies, and vice versa.” the administrative structure of the ODESLA through the
establishment of a third division—the Investigative and
The distinction between the allowable organizational
Adjudicatory Division—through which ODESLA could take
actions under Section 31(1) on the one hand and Section 31
on the additional functions it has been tasked to discharge
(2) and (3) on the other is crucial not only as it affects
under E.O. 13. In Canonizado v. Aguirre,12  We ruled that
employees’ tenurial security but also insofar as it touches
—
upon the validity of the reorganization, that is, whether the
executive actions undertaken fall within the limitations “Reorganization takes place when there is an alteration of the
prescribed under E.O. 292. When the PAGC was created existing structure of government offices or units therein,
under E.O. 12, it was composed of a Chairman and two (2) including the lines of control, authority and responsibility
Commissioners who held the ranks of Presidential between them. It involves a reduction of personnel, consolidation
Assistant II and I, respectively,9 and was placed directly of offices, or abolition thereof by reason of economy or redundancy
“under the Office of the President.”10  On the other hand, of functions.”
the ODESLA, to which the functions of the PAGC have now
been transferred, is an office within the Office of the The Reorganization was
President Proper.11  Since both of these offices belong to the Pursued in Good Faith.
Office of the President Proper, the reorganization by way of A valid reorganization must not only be exercised
abolishing the PAGC and transferring its functions to the through legitimate authority but must also be pursued in
ODESLA is allowable under Section 31 (1) of E.O. 292. good faith. A reorganization is said to be carried out in good
faith if it is done for purposes of economy and efficiency.13  of R.A. 9970 or the General Appropriations Act of 2010 of
It appears in this case that the streamlining of functions the President’s authority to “direct changes in the
within the Office of the President Proper was pursued with organizational units or key positions in any department or
such purposes in mind. In its Whereas clauses, E.O. 13 cites
as bases for the reorganization the policy dictates of _______________
eradicating corruption in the government and promoting 14  General Appropriations Act of 2010 (R.A. No. 9970).
economy and efficiency in the bureaucracy. Indeed, the 15  General Appropriations Act of 2011 (R.A. No. 10147).
economical effects of the reorganization is shown by the 16  Section 25 (1), Article VI, 1987 Constitution—
fact that while Congress had initially appropriated P22 The Congress may not increase the appropriations recommended by the
Million for the PAGC’s operation in the President for the operation of the Government as specified in the budget.
x x x.
_______________ 17  Bagaoisan v. National Tobacco Administration, G.R. No. 152845,
12  G.R. No. 133132, January 25, 2000, 323 SCRA 312. August 5, 2003, 408 SCRA 337, 348.
13  Malaria Employees and Workers Association of the Philippines, Inc.
(MEWAP) v. Romulo, G.R. No. 160093, July 31, 2007, 528 SCRA 673, 683. 424

423
424 SUPREME COURT REPORTS ANNOTATED
Pichay, Jr. vs. Office of the Deputy Executive Secretary for
VOL. 677, JULY 24, 2012 423 Legal Affairs-Investigative and Adjudicatory Division
Pichay, Jr. vs. Office of the Deputy Executive Secretary for
Legal Affairs-Investigative and Adjudicatory Division agency.” The aforecited provision, often and consistently
included in the general appropriations laws, recognizes the
2010 annual budget,14  no separate or added funding of extent of the President’s power to reorganize the executive
such a considerable amount was ever required after the offices and agencies under him, which is, “even to the
transfer of the PAGC functions to the IAD-ODESLA. extent of modifying and realigning appropriations for that
Apparently, the budgetary requirements that the IAD- purpose.”18
ODESLA needed to discharge its functions and maintain And to further enable the President to run the affairs of
its personnel would be sourced from the following year’s the executive department, he is likewise given
appropriation for the President’s Offices under the General constitutional authority to augment any item in the
Appropriations Act of 2011.15  Petitioner asseverates, General Appropriations Law using the savings in other
however, that since Congress did not indicate the manner items of the appropriation for his office.19  In fact, he is
by which the appropriation for the Office of the President explicitly allowed by law to transfer any fund appropriated
was to be distributed, taking therefrom the operational for the different departments, bureaus, offices and agencies
funds of the IAD-ODESLA would amount to an illegal of the Executive Department which is included in the
appropriation by the President. The contention is without General Appropriations Act, to any program, project or
legal basis. activity of any department, bureau or office included in the
There is no usurpation of the General Appropriations Act or approved after its
legislative power to appropri- enactment.20 
ate public funds. Thus, while there may be no specific amount earmarked
In the chief executive dwell the powers to run for the IAD-ODESLA from the total amount appropriated
government. Placed upon him is the power to recommend by Congress in the annual budget for the Office of the
the budget necessary for the operation of the President, the necessary funds for the IAD-ODESLA may
Government,16  which implies that he has the necessary be properly sourced from the President’s own office budget
authority to evaluate and determine the structure that without committing any illegal appropriation. After all,
each government agency in the executive department there is no usurpation of the legislature’s power to
would need to operate in the most economical and efficient appropriate funds when the President simply allocates the
manner.17  Hence, the express recognition under Section 78
existing funds previously appropriated by Congress for his _______________
office. 21  Rollo, p. 86.
22  Section 3, E.O. 13.
_______________ 23  Section 4(b), E.O. 12.
18  Banda v. Ermita, G.R. No. 166620, April 20, 2010, 618 SCRA 488, 24  Section 8, E.O. 12.

513. 25  G.R. No. 96681, December 2, 1991, 204 SCRA 483, 492.

19  Section 25 (5), Article VI, 1987 Constitution— 26  G.R. Nos. 192935 and 193036, December 7, 2010, 637 SCRA 78,

No law shall be passed authorizing any transfer of appropriations; 160.

however, the President, xxx may, by law, be authorized to augment any

426
item in the general appropriations law for their respective offices from
savings in other items of their respective appropriations.
20  Section 44, P.D. 1177 (Budget Reform Decree of 1977). 426 SUPREME COURT REPORTS ANNOTATED

425
Pichay, Jr. vs. Office of the Deputy Executive Secretary for
Legal Affairs-Investigative and Adjudicatory Division

VOL. 677, JULY 24, 2012 425 Fact-finding is not adjudication and it cannot be likened to the
Pichay, Jr. vs. Office of the Deputy Executive Secretary for judicial function of a court of justice, or even a quasi-judicial
Legal Affairs-Investigative and Adjudicatory Division agency or office. The function of receiving evidence and
ascertaining therefrom the facts of a controversy is not a judicial
The IAD-ODESLA is a fact-finding function. To be considered as such, the act of receiving evidence
and recommendatory body not and arriving at factual conclusions in a controversy must be
vested with quasi-judicial powers. accompanied by the authority of applying the law to the factual
Petitioner next avers that the IAD-ODESLA was conclusions to the end that the controversy may be decided or
illegally vested with judicial power which is reserved to the determined authoritatively, finally and definitively, subject to
Judicial Department and, by way of exception through an such appeals or modes of review as may be provided by law.”
express grant by the legislature, to administrative
The President’s authority to issue E.O. 13 and constitute
agencies. He points out that the name Investigative and
the IAD-ODESLA as his fact-finding investigator cannot be
Adjudicatory Division is proof itself that the IAD-ODESLA
doubted. After all, as Chief Executive, he is granted full
wields quasi-judicial power.
control over the Executive Department to ensure the
The argument is tenuous. As the OSG aptly explained in
enforcement of the laws. Section 17, Article VII of the
its Comment,21  while the term “adjudicatory” appears part
Constitution provides:
of its appellation, the IAD-ODESLA cannot try and resolve
cases, its authority being limited to the conduct of “Section 17. The President shall have control of all the executive
investigations, preparation of reports and submission of departments, bureaus and offices. He shall ensure that the
recommendations. E.O. 13 explicitly states that the IAD- laws be faithfully executed.”
ODESLA shall “perform powers, functions and duties xxx,
of PAGC.”22 The obligation to see to it that laws are faithfully
Under E.O. 12, the PAGC was given the authority to executed necessitates the corresponding power in the
“investigate or hear administrative cases or complaints President to conduct investigations into the conduct of
against all presidential appointees in the government”23  officials and employees in the executive department.27
and to “submit its report and recommendations to the The IAD-ODESLA does not
President.”24  The IAD-ODESLA is a fact-finding and encroach upon the powers and
recommendatory body to the President, not having the duties of the Ombudsman.
power to settle controversies and adjudicate cases. As the Contrary to petitioner’s contention, the IAD-ODESLA
Court ruled in Cariño v. Commission on Human Rights,25  did not encroach upon the Ombudsman’s primary
and later reiterated in Biraogo v. The Philippine Truth jurisdiction
Commission:26 
 _______________ _______________
27  Department of Health v. Camposano, G.R. No. 157684, April 27, 28  Flores v. Montemayor, G.R. No. 170146, June 8, 2011, 651 SCRA
2005, 457 SCRA 438, 450; Biraogo v. Philippine Truth Commission, G.R. 396, 404.
Nos. 192935 and 193036, December 7, 2010, 637 SCRA 78, 160.
428
427

428 SUPREME COURT REPORTS ANNOTATED

VOL. 677, JULY 24, 2012 427 Pichay, Jr. vs. Office of the Deputy Executive Secretary for
Pichay, Jr. vs. Office of the Deputy Executive Secretary for Legal Affairs-Investigative and Adjudicatory Division
Legal Affairs-Investigative and Adjudicatory Division
remain so until acted upon by the President. As such, it
when it took cognizance of the complaint affidavit filed commits no usurpation of the Ombudsman’s constitutional
against him notwithstanding the earlier filing of criminal duties.
and administrative cases involving the same charges and Executive Order No. 13 Does Not
allegations before the Office of the Ombudsman. The Violate Petitioner’s Right to Due
primary jurisdiction of the Ombudsman to investigate and Process and the Equal Protection
prosecute cases refers to criminal cases cognizable by the of the Laws.
Sandiganbayan and not to administrative cases. It is only Petitioner goes on to assail E.O. 13 as violative of the
in the exercise of its primary jurisdiction that the equal protection clause pointing to the arbitrariness of
Ombudsman may, at any time, take over the investigation limiting the IAD-ODESLA’s investigation only to
being conducted by another investigatory agency. Section presidential appointees occupying upper-level positions in
15 (1) of R.A. No. 6770 or the Ombudsman Act of 1989, the government. The equal protection of the laws is a
empowers the Ombudsman to— guaranty against any form of undue favoritism or hostility
from the government.29  It is embraced under the due
“(1) Investigate and prosecute on its own or on complaint by any process concept and simply requires that, in the application
person, any act or omission of any public officer or employee, of the law, “all persons or things similarly situated should
office or agency, when such act or omission appears to be illegal, be treated alike, both as to rights conferred and
unjust, improper or inefficient. It has primary jurisdiction over responsibilities imposed.”30  The equal protection clause,
cases cognizable by the Sandiganbayan and, in the exercise of its however, is not absolute but subject to reasonable
primary jurisdiction, it may take over, at any stage, from any classification so that aggrupations bearing substantial
investigatory agency of government, the investigation of distinctions may be treated differently from each other.
such cases.” (Emphasis supplied) This we ruled in Fariñas v. Executive Secretary,31  wherein
we further stated that—
Since the case filed before the IAD-ODESLA is an
administrative disciplinary case for grave misconduct, “The equal protection of the law clause is against undue favor and
petitioner may not invoke the primary jurisdiction of the individual or class privilege, as well as hostile discrimination or
Ombudsman to prevent the IAD-ODESLA from proceeding the oppression of inequality. It is not intended to prohibit
with its investigation. In any event, the Ombudsman’s legislation which is limited either in the object to which it is
authority to investigate both elective and appointive directed or by territory within which it is to operate. It does not
officials in the government, extensive as it may be, is by no demand absolute equality among residents; it merely requires
means exclusive. It is shared with other similarly that all persons shall be treated alike, under like circumstances
authorized government agencies.28 and conditions both as to
While the Ombudsman’s function goes into the
determination of the existence of probable cause and the _______________
adjudication of the merits of a criminal accusation, the 29  Biraogo v. Philippine Truth Commission, G.R. Nos. 192935 and 193036,
investigative authority of the IAD-ODESLA is limited to December 7, 2010, 637 SCRA 78, 166.
that of a fact-finding investigator whose determinations 30  Ichong v. Hernandez, 101 Phil. 1155 (1957), cited in Fariñas v. Executive
and recommendations Secretary, G.R. No. 147387, December 10, 2003, 417 SCRA 503, 525.
 31  G.R. No. 147387, December 10, 2003, 417 SCRA 503. 430 SUPREME COURT REPORTS ANNOTATED
429 Pichay, Jr. vs. Office of the Deputy Executive Secretary for
Legal Affairs-Investigative and Adjudicatory Division
VOL. 677, JULY 24, 2012 429
“Substantial distinctions clearly exist between elective
Pichay, Jr. vs. Office of the Deputy Executive Secretary for Legal
officials and appointive officials. The former occupy their
Affairs-Investigative and Adjudicatory Division
office by virtue of the mandate of the electorate. They are elected
to an office for a definite term and may be removed therefrom
privileges conferred and liabilities enforced. The equal
only upon stringent conditions. On the other hand, appointive
protection clause is not infringed by legislation which
officials hold their office by virtue of their designation
applies only to those persons falling within a specified
thereto by an appointing authority. Some appointive officials
class, if it applies alike to all persons within such class,
hold their office in a permanent capacity and are entitled to
and reasonable grounds exist for making a distinction
security of tenure while others serve at the pleasure of the
between those who fall within such class and those who do
appointing authority.
not.” (Emphasis supplied)
x x x x
Presidential appointees come under the direct An election is the embodiment of the popular will, perhaps the
disciplining authority of the President. This proceeds from purest expression of the sovereign power of the people. It involves
the well settled principle that, in the absence of a contrary the choice or selection of candidates to public office by popular
law, the power to remove or to discipline is lodged in the vote. Considering that elected officials are put in office by their
same authority on which the power to appoint is vested.32  constituents for a definite term, x  x  x complete deference is
Having the power to remove and/or discipline presidential accorded to the will of the electorate that they be served by such
appointees, the President has the corollary authority to officials until the end of the term for which they were elected. In
investigate such public officials and look into their conduct contrast, there is no such expectation insofar as appointed
in office.33  Petitioner is a presidential appointee occupying officials are concerned.” (Emphasis supplied)
the high-level position of Chairman of the LWUA.
Also, contrary to petitioner’s assertions, his right to due
Necessarily, he comes under the disciplinary jurisdiction of
process was not violated when the IAD-ODESLA took
the President, who is well within his right to order an
cognizance of the administrative complaint against him
investigation into matters that require his informed
since he was given sufficient opportunity to oppose the
decision.
formal complaint filed by Secretary Purisima. In
There are substantial distinctions that set apart
administrative proceedings, the filing of charges and giving
presidential appointees occupying upper-level positions in
reasonable opportunity for the person so charged to answer
government from non-presidential appointees and those
the accusations against him constitute the minimum
that occupy the lower positions in government. In
requirements of due process,35  which simply means having
Salumbides v. Office of the Ombudsman,34  we had ruled
the opportunity to explain one’s side.36  Hence, as long as
extensively on the substantial distinctions that exist
petitioner was given the opportunity to explain his side and
between elective and appointive public officials, thus:
present evidence, the requirements of due process are
satisfactorily complied with because what the
_______________
32  Ambas v. Buenaceda, G.R. No. 95244, September 4, 1991, 201 SCRA
_______________
308, 314, citing Lacanilao v. De Leon, No. L-76532, January 26, 1987, 147
35  Cayago v. Lina, G.R. No. 149539, January 19, 2005, 449 SCRA 29.
SCRA 286, 298; Aguirre, Jr. v. De Castro, G.R. No. 127631, December 17,
36  Libres v. National Labor Relations Commission, G.R. No. 12373,
1999, 321 SCRA 95, 104.
May 28, 1999, 307 SCRA 675.
33  See Garcia v. Pajaro, G.R. No. 141149, July 5, 2002, 384 SCRA 122,
135. 431
34  G.R. No. 180917, April 23, 2010, 619 SCRA 313.

430 VOL. 677, JULY 24, 2012 431

 Pichay, Jr. vs. Office of the Deputy Executive Secretary for Pichay, Jr. vs. Office of the Deputy Executive Secretary for
Legal Affairs-Investigative and Adjudicatory Division Legal Affairs-Investigative and Adjudicatory Division

law abhors is an absolute lack of opportunity to be heard.37  SO ORDERED.

The records show that petitioner was issued an Order
requiring him to submit his written explanation under oath Carpio, Velasco, Jr., Bersamin, Del Castillo, Abad,
with respect to the charge of grave misconduct filed against Villarama, Jr., Perez, Sereno and Reyes, JJ., concur.
him. His own failure to submit his explanation despite Leonardo-De Castro, J., On Official Leave.
notice defeats his subsequent claim of denial of due Brion and Mendoza, JJ., On Leave.
process. Peralta, J., On Official Business. 
Finally, petitioner doubts that the IAD-ODESLA can
lawfully perform its duties as an impartial tribunal, Petition dismissed.
contending that both the IAD-ODESLA and respondent
Notes.—A reorganization “involves the reduction of
Secretary Purisima are connected to the President. The
personnel, consolidation of offices, or abolition thereof by
mere suspicion of partiality will not suffice to invalidate
reason of economy or redundancy of functions”; For a
the actions of the IADODESLA. Mere allegation is not
reorganization for the purpose of economy or to make the
equivalent to proof. Bias and partiality cannot be
bureaucracy more efficient to be valid, however, it must
presumed.38  Petitioner must present substantial proof to
pass the test of good faith, otherwise it is void ab initio.
show that the IAD-ODESLA had unjustifiably sided
(Pan vs. Peña, 579 SCRA 314 [2009])
against him in the conduct of the investigation. No such
If the reorganization is done in good faith, the abolition
evidence has been presented as to defeat the presumption
of positions, which results in loss of security of tenure of
of regularity in the performance of the fact-finding
affected government employees, would be valid. (Banda vs.
investigator’s duties. The assertion, therefore, deserves
Ermita, 618 SCRA 488 [2010])
scant consideration.
——o0o—— 
Every law has in its favor the presumption of
constitutionality, and to justify its nullification, there must
be a clear and unequivocal breach of the Constitution, not a
doubtful and argumentative one.39 Petitioner has failed to
discharge the burden of proving the illegality of E.O. 13,
which is indubitably a valid exercise of the President’s
continuing authority to reorganize the Office of the © Copyright 2019 Central Book Supply, Inc. All rights reserved.
President.
WHEREFORE, premises considered, the petition is
hereby DISMISSED.

_______________
37  Montemayor v. Bundalian, G.R. No. 149335, July 1, 2003, 405
SCRA 264, 269; AMA Computer College-East Rizal, et al. v. Ignacio, G.R.
No. 178520, June 23, 2009, 590 SCRA 633.
38  Casimiro v. Tandog, G.R. No. 146137, June 08, 2005, 459 SCRA
624, 631.
39  Lacson v. Executive Secretary, G.R. No. 128096, January 20, 1999,
301 SCRA 298, 311.

432

432 SUPREME COURT REPORTS ANNOTATED