G.R. No.

210500

KILUSANG MAYO UNO, represented by its Secretary General ROGELIO SOLUTA; REP.
FERNANDO HICAP for himself and as representative of the ANAKPAWIS PARTY-LIST; CENTER
FOR TRADE UNION AND HUMAN RIGHTS, represented by its Executive Director DAISY ARAGO;
JOSELITO USTAREZ and SALVADOR CARRANZA, for themselves and in representation of the
NATIONAL FEDERATION OF LABOR UNIONS-KMU; NENITA GONZAGA, PRESCILA A. MANI
QUIZ, RED EN ALCANTARA,, Petitioners
vs.
Hon. BENIGNO SIMEON C. AQUINO III, Hon. PAQUITO N. OCHOA, JR., SOCIAL SECURITY
COMMISSION, SOCIAL SECURITY SYSTEM, AND EMILIO S. DE QUIROS, JR., Respondents

DECISION

LEONEN, J.:

This Court is called to determine the validity of the Social Security System premium hike, which took
effect in January 2014. The case also involves the application of doctrines on judicial review, valid
delegation of powers, and the exercise of police power.

This resolves a Petition for Certiorari and Prohibition,1 praying that a temporary restraining order
and/or writ of preliminary injunction be issued to annul the Social Security System premium hike
embodied in the following issuances: (1) Resolution No. 262-s. 2013 dated April 19, 2013;2 (2)
Resolution No. 711-s. 2013 dated September 20, 2013; 3 and (3) Circular No. 2013-0104 dated
October 2, 2013 (collectively, the assailed issuances). Kilusang Mayo Uno, together with
representatives from recognized labor centers, labor federations, party-list groups, and Social
Security System members (collectively, Kilusang Mayo Uno, et al.), filed the case against
government officials and agencies involved in issuing the assailed issuances.

On April 19, 2013, the Social Security Commission issued Resolution No. 262-s. 2013,5 which
provided an increase in: (1) the Social Security System members' contribution rate from 10.4% to
11%; and (2) the maximum monthly salary credit from ₱15,000.00 to ₱16,000.00. The increase was
made subject to the approval of the President of the Philippines.6

In a September 6, 2013 Memorandum, the President approved the increase. 7

On September 20, 2013, the Social Security Commission issued Resolution No. 711-s. 2013,8 which
approved, among others, the increase in contribution rate and maximum monthly salary credit.

On October 2, 2013, the Social Security System, through President and Chief Executive Officer
Emilio S. De Quiros, Jr., issued Circular No. 2013-010,9 which provided the revised schedule of
contributions that would be in effect in January 2014. Per the circular, the employer and the
employee shall equally shoulder the 0.6% increase in contributions. Thus, the employer would pay a
contribution rate of 7.37% (from 7.07%); the employee, 3.63% (from 3.33%).

On January 10, 2014, Kilusang Mayo Uno, et al. filed this Petition for Certiorari and
Prohibition,10 questioning the validity of the assailed issuances.

Maintaining that a majority of them are Social Security System members directly affected by the
premium hike, petitioners assert having the requisite locus standi to file the Petition.11 Citing David v.
Macapagal-Arroyo,12 they further argue that the other petitioners' legal personality arises from the
transcendental importance of the Petition's issues.13

Petitioners claim that the assailed issuances were issued per an unlawful delegation of power to
respondent Social Security Commission based on Republic Act No. 8282, or the Social Security Act.
In particular, Section 1814 allegedly offers vague and unclear standards, and are incomplete in its
terms and conditions. This provision, they claim, has allowed respondent Social Security
Commission to fix contribution rates from time to time, subject to the President's approval.
Petitioners claim that the delegation of the power had no adequate legal guidelines to map out the
boundaries of the delegate's authority.15

In addition, petitioners claim that the increase in contribution rate violates Section 4(b)(2) of the
Social Security Act,16 which states that the "increases in benefits shall not require any increase in the
rate of contribution[.]" They argue that this proviso prohibits the increase in contributions if there was
no corresponding increase in benefits. 17

Petitioners then argue that the increase in contributions is an invalid exercise of police power for not
being reasonably necessary for the attainment of the purpose sought, as well as for being unduly
oppressive on the labor sector.18 According to them, the Social Security System can extend actuarial
life and decrease its unfunded liability without increasing the premiums they pay. 19

Petitioners further insist that the revised ratio of contributions between employers and employees,
per the assailed issuances, is grossly unjust to the working class and is beyond respondents'
powers. They claim that for the purposes of justice and consistency, respondents should have
maintained the 70%-30% ratio in the premium increase. Changing it, they add, is grossly unfair and
detrimental to employees.20

Petitioners further emphasize that the State is required to protect the rights of workers and promote
their welfare under the Constitution.21

Lastly, petitioners pray that a temporary restraining order and/or writ of preliminary injunction be
issued to stop the implementation of the increase in contributions. They aver that stopping it is
necessary to protect their substantive rights and interests. They point out that their earnings for food
and other basic needs would be reduced and allocated instead to defraying the amount needed for
contributions.22

The issues for this Court's resolution are:

First, whether or not this Court can exercise its power of judicial review;

Second, whether or not there is an actual case or controversy;

Third, whether or not the doctrine of exhaustion of administrative remedies applies;

Fourth, whether or not petitioners have legal standing to file the Petition; and

Finally, whether or not the assailed issuances were issued in violation of laws and with grave abuse
of discretion.

In connection with the fifth issue, this Court further resolves:

First, whether or not the assailed issuances are void for having been issued under vague and
unclear standards contained in the Social Security Act;

Second, whether or not the increase in Social Security System contributions is reasonably
necessary for the attainment of the purpose sought and is unduly oppressive upon the labor sector;
and

Finally, whether or not the revised ratio of contributions between employers and employees is
grossly unjust to the working class and beyond respondent Social Security Commission's power to
enact.

This Court denies the Petition for lack of merit.

Procedural infirmities attend the filing of this Petition. To begin with, former President Benigno
Simeon C. Aquino III, as President of the Philippines, is improperly impleaded here.

The president is the head of the executive branch, 23 a co-equal of the judiciary under the
Constitution. His or her prerogative is entitled to respect from other branches of government. 24 Inter-
branch courtesy25 is but a consequence of the doctrine of separation of powers. 26

As such, the president cannot be charged with any suit, civil or criminal in nature, during his or her
incumbency in office. This is in line with the doctrine of the president's immunity from suit. 27

In David,28 this Court explained why it is improper to implead the incumbent President of the
Philippines. The doctrine has both policy and practical considerations:

Settled is the doctrine that the President, during his tenure of office or actual incumbency, may not
be sued in any civil or criminal case, and there is no need to provide for it in the Constitution or law.
It will degrade the dignity of the high office of the President, the Head of State, if he can be dragged
into court litigations while serving as such. Furthermore, it is important that he be freed from any
form of harassment, hindrance or distraction to enable him to fully attend to the performance of his
official duties and functions. Unlike the legislative and judicial branch, only one constitutes the
executive branch and anything which impairs his usefulness in the discharge of the many great and
important duties imposed upon him by the Constitution necessarily impairs the operation of the
Government. However, this does not mean that the President is not accountable to anyone. Like any
other official, he remains accountable to the people but he may be removed from office only in the
mode provided by law and that is by impeachment. 29 (Emphasis in the original, citations omitted)

As to the propriety of seeking redress from this Court, it is best to be guided by the power of judicial
review as provided in Article VIII, Section 1 of the 1987 Constitution:

ARTICLE VIII

Judicial Department

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. (Emphasis supplied)

This Court has discussed in several cases how the 1987 Constitution has expanded the scope of
judicial power from its traditional understanding. As such, courts are not only expected to "settle
actual controversies involving rights which are legally demandable and enforceable[,]"30 but are also
empowered to determine if any government branch or instrumentality has acted beyond the scope of
its powers, such that there is grave abuse of discretion.31

This development of the courts' judicial power arose from the use and abuse of the political question
doctrine during the martial law era under former President Ferdinand Marcos. In Association of
Medical Clinics for Overseas Workers, Inc. v. GCC Approved Medical Centers Association,
Inc.,32 this Court held:

In Francisco v. The House of Representatives, we recognized that this expanded jurisdiction was
meant "to ensure the potency of the power of judicial review to curb grave abuse of discretion by
'any branch or instrumentalities of government.'" Thus, the second paragraph of Article VIII, Section
1 engraves, for the first time in its history, into black letter law the "expanded certiorari jurisdiction" of
this Court, whose nature and purpose had been provided in the sponsorship speech of its
proponent, former Chief Justice Constitutional Commissioner Roberto Concepcion[:]

....

The first section starts with a sentence copied from former Constitutions. It says:

The judicial power shall be vested in one Supreme Court and in such lower courts as may be
established by law.

I suppose nobody can question it.

The next provision is new in our constitutional law. I will read it first and explain.

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.

Fellow Members of this Commission, this is actually a product of our experience during martial law.
As a matter of fact, it has some antecedents in the past, but the role of the judiciary during the
deposed regime was marred considerably by the circumstance that in a number of cases against the
government, which then had no legal defense at all, the solicitor general set up the defense of
political question and got away with it. As a consequence, certain principles concerning particularly
the writ of habeas corpus, that is, the authority of courts to order the release of political detainees,
and other matters related to the operation and effect of martial law failed because the government
set up the defense of political question. And the Supreme Court

said: "Well, since it is political, we have no authority to pass upon it." The Committee on the Judiciary
feels that this was not a proper solution of the questions involved. It did not merely request an
encroachment upon the rights of the people, but it, in effect, encouraged further violations thereof
during the martial law regime.

....

Briefly stated, courts of justice determine the limits of power of the agencies and offices of the
government as well as those of its officers. In other words, the judiciary is the final arbiter on the
question whether or not a branch of government or any of its officials has acted without jurisdiction
or in excess of jurisdiction, or so capriciously as to constitute an abuse of discretion amounting to
excess of jurisdiction or lack of jurisdiction. This is not only a judicial power but a duty to pass
judgment on matters of this nature.

This is the background of paragraph 2 of Section 1, which means that the courts cannot hereafter
evade the duty to settle matters of this nature, by claiming that such matters constitute a political
question.33 (Emphasis in the original, citations omitted)

Rule 65, Sections 1 and 2 of the Rules of Court provides remedies to address grave abuse of
discretion by any government branch or instrumentality, particularly through petitions
for certiorari and prohibition:

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 of 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.

While these provisions pertain to a tribunal's, board's, or an officer's exercise of discretion in judicial,
quasi-judicial, or ministerial functions, Rule 65 still applies to invoke the expanded scope of judicial
power. In Araullo v. Aquino III,34 this Court differentiated certiorari from prohibition, and clarified that
Rule 65 is the remedy to "set right, undo[,] and restrain any act of grave abuse of discretion
amounting to lack or excess of jurisdiction by any branch or instrumentality of the Government, even
if the latter does not exercise judicial, quasi-judicial[J or ministerial functions."35
This Court further explained:

The present Rules of Court uses two special civil actions for determining and correcting grave abuse
of discretion amounting to lack or excess of jurisdiction. These are the special civil actions
for certiorari and prohibition, and both are governed by Rule 65. . . .

The ordinary nature and function of the writ of certiorari in our present system are aptly explained
in Delos Santos v. Metropolitan Bank and Trust Company:

....

The sole office of the writ of certiorari is the correction of errors of jurisdiction, which includes the
commission of grave abuse of discretion amounting to lack of jurisdiction. In this regard, mere abuse
of discretion is not enough to warrant the issuance of the writ. The abuse of discretion must be
grave, which means either that the judicial or quasi-judicial power was exercised in an arbitrary or
despotic manner by reason of passion or personal hostility, or that the respondent judge, tribunal or
board evaded a positive duty, or virtually refused to perform the duty enjoined or to act in
contemplation of law, such as when such judge, tribunal or board exercising judicial or quasi-judicial
powers acted in a capricious or whimsical manner as to be equivalent to lack of jurisdiction.

Although similar to prohibition in that it will lie for want or excess of jurisdiction, certiorari is to be
distinguished from prohibition by the fact that it is a corrective remedy used for the re-examination of
some action of an inferior tribunal, and is directed to the cause or proceeding in the lower court and
not to the court itself, while prohibition is a preventative remedy issuing to restrain future action, and
is directed to the court itself. The Court expounded on the nature and function of the writ of
prohibition in Holy Spirit Homeowners Association, Inc. v. Defensor:

A petition for prohibition is also not the proper remedy to assail an IRR issued in the exercise of a
quasi-legislative function. Prohibition is an extraordinary writ directed against any tribunal,
corporation, board, officer or person, whether exercising judicial, quasi-judicial or ministerial
functions, ordering said entity or person to desist from further proceedings when said proceedings
are without or in excess of said entity's or person's jurisdiction, or are accompanied with grave abuse
of discretion, and there is no appeal or any other plain, speedy and adequate remedy in the ordinary
course of law. Prohibition lies against judicial or ministerial functions, but not against legislative or
quasi-legislative functions. Generally, the purpose of a writ of prohibition is to keep a lower court
within the limits of its jurisdiction in order to maintain the administration of justice in orderly channels.
Prohibition is the proper remedy to afford relief against usurpation of jurisdiction or power by an
inferior court, or when, in the exercise of jurisdiction in handling matters clearly within its cognizance
the inferior court transgresses the bounds prescribed to it by the law, or where there is no adequate
remedy available in the ordinary course of law by which such relief can be obtained. Where the
principal relief sought is to invalidate an IRR, petitioners' remedy is an ordinary action for its
nullification, an action which properly falls under the jurisdiction of the Regional Trial Court. In any
case, petitioners' allegation that "respondents are performing or threatening to perform functions
without or in excess of their jurisdiction" may appropriately be enjoined by the trial court through a
writ of injunction or a temporary restraining order.

With respect to the Court, however, the remedies of certiorari and prohibition are necessarily
broader in scope and reach, and the writ of certiorari or prohibition may be issued to correct errors of
jurisdiction committed not only by a tribunal, corporation, board or officer exercising judicial, quasi-
judicial or ministerial functions but also to set right, undo and restrain any act of grave abuse of
discretion amounting to lack or excess of jurisdiction by any branch or instrumentality of the
Government, even if the latter does not exercise judicial, quasi-judicial or ministerial functions. This
application is expressly authorized by the text of the second paragraph of Section 1, . . . .

Thus, petitions for certiorari and prohibition are appropriate remedies to raise constitutional issues
and to review and/or prohibit or nullify the acts of legislative and executive officials. 36 (Emphasis in
the original, citations omitted)

Here, petitioners filed a Petition for both certiorari and prohibition to determine whether respondents
Social Security System and Social Security Commission committed grave abuse of discretion in
releasing the assailed issuances. According to them, these issuances violated the provisions of the
Constitution on the protection of workers, promotion of social justice, and respect for human
rights.37 They further claim that the assailed issuances are void for having been issued based on
vague and unclear standards. They also argue that the increase in contributions is an invalid
exercise of police power as it is not reasonably necessary and, thus, unduly oppressive to the labor
sector. Lastly, they insist that the revised ratio in contributions is grossly unjust to the working class. 38

Petitioners must, thus, comply with the requisites for the exercise of the power of judicial review: (1)
there must be an actual case or justiciable controversy before this Court; (2) the question before this
Court must be ripe for adjudication; (3) the person challenging the act must be a proper party; and
(4) the issue of constitutionality must be raised at the earliest opportunity and must be the very litis
mota of the case.39

I (A)

Most important in this list of requisites is the existence of an actual case or controversy. 40 In every
exercise of judicial power, whether in the traditional or expanded sense, this is an absolute
necessity.

There is an actual case or controversy if there is a "conflict of legal right, an opposite legal claims
susceptible of judicial resolution."41 A petitioner bringing a case before this Court must establish that
there is a legally demandable and enforceable right under the Constitution. There must be a real and
substantial controversy, with definite and concrete issues involving the legal relations of the parties,
and admitting of specific relief that courts can grant. 42

This requirement goes into the nature of the judiciary as a co-equal branch of government. It is
bound by the doctrine of separation of powers, and will not rule on any matter or cause the
invalidation of any act, law, or regulation, if there is no actual or sufficiently imminent breach of or
injury to a right. The courts interpret laws, but the ambiguities may only be clarified in the existence
of an actual situation.

In Lozano v. Nograles,43 the petitions assailing House Resolution No. 1109 were dismissed due to
the absence of an actual case or controversy. This Court held that the "determination of the nature,
scope[,] and extent of the powers of government is the exclusive province of the judiciary, such that
any mediation on the part of the latter for the allocation of constitutional boundaries would amount,
not to its supremacy, but to its mere fulfillment of its 'solemn and sacred obligation' under the
Constitution."44The judiciary's awesome power of review is limited in application. 45

Jurisprudence lays down guidelines in determining an actual case or controversy. In Information

Technology Foundation of the Philippines v. Commission on Elections,46 this Court required that "the
pleadings must show an active antagonistic assertion of a legal right, on the one hand, and a denial
thereof on the other; that is, it must concern a real and not a merely theoretical question or
issue."47 Further, there must be "an actual and substantial controversy admitting of specific relief
through a decree conclusive in nature, as distinguished from an opinion advising what the law would
be upon a hypothetical state of facts."48

Courts, thus, cannot decide on theoretical circumstances. They are neither advisory bodies, nor are
they tasked with taking measures to prevent imagined possibilities of abuse.

Hence, in Southern Hemisphere Engagement Network, Inc. v. Anti-Terrorism Council,49 this Court
ruled:

Without any justiciable controversy, the petitions have become pleas for declaratory relief, over
which the Court has no original jurisdiction. Then again, declaratory actions characterized by "double
contingency," where both the activity the petitioners intend to undertake and the anticipated reaction
to it of a public official are merely theorized, lie beyond judicial review for lack of ripeness.

The possibility of abuse in the implementation of RA 9372 does not avail to take the present petitions
out of the realm of the surreal and merely imagined, . . . Allegations of abuse must be anchored on
real events before courts may step in to settle actual controversies involving rights which are legally
demandable and enforceable.50 (Emphasis supplied, citations omitted)

In Republic v. Roque,51 this Court further qualified the meaning of a justiciable controversy. In
dismissing the Petition for declaratory relief before the Regional Trial Court, which assailed several
provisions of the Human Security Act, we explained that justiciable controversy or ripening seeds
refer to:

. . . an existing case or controversy that is appropriate or ripe for judicial determination, not one that
is conjectural or merely anticipatory. Corollary thereto, by "ripening seeds" it is meant, not that
sufficient accrued facts may be dispensed with, but that a dispute may be tried at its inception before
it has accumulated the asperity, distemper, animosity, passion, and violence of a full blown battle
that looms ahead. The concept describes a state of facts indicating imminent and inevitable litigation
provided that the issue is not settled and stabilized by tranquilizing declaration. 52 (Emphasis supplied,
citations omitted)

The existence of an actual case or controversy depends on the allegations pleaded. 53

Here, petitioners allege that the premium hike, through the assailed issuances, violates their rights
as workers whose welfare is mandated to be protected under the Constitution. 54 They further allege
that the issuances are grossly unjust to the working class and were issued beyond the scope of
constitutional powers.55

Thus, petitioners' allegations present violations of rights provided for under the Constitution on the
protection of workers, and promotion of social justice.56 They likewise assert that respondents Social
Security Commission and Social Security System acted beyond the scope of their powers.

This Court, however, notes that petitioners failed to prove how the assailed issuances violated
workers' constitutional rights such that it would warrant a judicial review. Petitioners cannot merely
cite and rely on the Constitution without specifying how these rights translate to being legally entitled
to a fixed amount and proportion of Social Security System contributions.

Moreover, an actual case or controversy requires that the right must be enforceable and legally
demandable. A complaining party's right is, thus, affected by the rest of the requirements for the
exercise of judicial power: (1) the issue's ripeness and prematurity; (2) the moot and academic
principle; and (3) the party's standing. 57

I (B)

A case is ripe for adjudication when the challenged governmental act is a completed action such that
there is a direct, concrete, and adverse effect on the petitioner. 58 It is, thus, required that something
had been performed by the government branch or instrumentality before the court may step in, and
the petitioner must allege the existence of an immediate or threatened injury to itself as a result of
the challenged action.59

In connection with acts of administrative agencies, ripeness is ensured under the doctrine of
exhaustion of administrative remedies. Courts may only take cognizance of a case or controversy if
the petitioner has exhausted all remedies available to it under the law. The doctrine ensures that the
administrative agency exercised its power to its full extent, including its authority to correct or
reconsider its actions. It would, thus, be premature for courts to take cognizance of the case prior to
the exhaustion of remedies, not to mention it would violate the principle of separation of powers.
Thus, in Rule 65 petitions, it is required that no other plain, speedy, or adequate remedy is available
to the party. In Association of Medical Clinics for Overseas Workers, Inc.:

The doctrine of exhaustion of administrative remedies applies to a petition for certiorari, regardless
of the act of the administrative agency concerned, i.e., whether the act concerns a quasi-judicial, or
quasi-legislative function, or is purely regulatory.

Consider in this regard that once an administrative agency has been empowered by Congress to
undertake a sovereign function, the agency should be allowed to perform its function to the full
extent that the law grants. This full extent covers the authority of superior officers in the
administrative agencies to correct the actions of subordinates, or for collegial bodies to reconsider
their own decisions on a motion for reconsideration. Premature judicial intervention would interfere
with this administrative mandate, leaving administrative action incomplete; if allowed, such
premature judicial action through a writ of certiorari, would be a usurpation that violates the
separation of powers principle that underlies our Constitution.

In every case, remedies within the agency's administrative process must be exhausted before
external remedies can be applied. Thus, even if a governmental entity may have committed a grave
abuse of discretion, litigants should, as a rule, first ask reconsideration from the body itself, or a
review thereof before the agency concerned. This step ensures that by the time the grave abuse of
discretion issue reaches the court, the administrative agency concerned would have fully exercised
its jurisdiction and the court can focus its attention on the questions of law presented before it.

Additionally, the failure to exhaust administrative remedies affects the ripeness to adjudicate
the constitutionality of a governmental act, which in turn affects the existence of the need for
an actual case or controversy for the courts to exercise their power of judicial review. The
need for ripeness — an aspect of the timing of a case or controversy — does not change regardless
of whether the issue of constitutionality reaches the Court through the traditional means, or through
the Court's expanded jurisdiction. In fact, separately from ripeness, one other concept pertaining to
judicial review is intrinsically connected to it: the concept of a case being moot and academic.

Both these concepts relate to the timing of the presentation of a controversy before the Court —
ripeness relates to its prematurity, while mootness relates to a belated or unnecessary judgment on
the issues. The Court cannot preempt the actions of the parties, and neither should it (as a rule)
render judgment after the issue has already been resolved by or through external developments.
The importance of timing in the exercise of judicial review highlights and reinforces the need for an
actual case or controversy — an act that may violate a party's right. Without any completed action or
a concrete threat of injury to the petitioning party, the act is not yet ripe for adjudication. It is merely a
hypothetical problem. The challenged act must have been accomplished or performed by either
branch or instrumentality of government 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.

In these lights, a constitutional challenge, whether presented through the traditional route or through
the Court's expanded jurisdiction, requires compliance with the ripeness requirement. In the case of
administrative acts, ripeness manifests itself through compliance with the doctrine of exhaustion of
administrative remedies.60 (Emphasis in the original, citations omitted)

Here, it is clear that petitioners failed to exhaust their administrative remedies.

Petitioners allege that they "have no appeal nor any plain, speedy[,] and adequate remedy under the
ordinary course of law except through the instant Petition." 61

However, Sections 4 and 5 of the Social Security Act are clear that the Social Security Commission
has jurisdiction over any dispute arising from the law regarding coverage, benefits, contributions,
and penalties. The law further provides that the aggrieved party must first exhaust all administrative
remedies available before seeking review from the courts:

SECTION 4. Powers and Duties of the Commission and SSS. — (a) The Commission. — For the
attainment of its main objectives as set forth in Section 2 hereof, the Commission shall have the
following powers and duties:

(1) To adopt, amend and rescind, subject to the approval of the President of the Philippines, such
rules and regulations as may be necessary to carry out the provisions and purposes of this Act;

....

SECTION 5. Settlement of Disputes. — (a) Any dispute arising under this Act with respect to
coverage, benefits, contributions and penalties thereon or any other matter related thereto, shall be
cognizable by the Commission, and any case filed with respect thereto shall be heard by the
Commission, or any of its members, or by hearing officers duly authorized by the Commission and
decided within the mandatory period of twenty (20) days after the submission of the evidence. The
filing, determination and settlement of disputes shall be governed by the rules and regulations
promulgated by the Commission.

(b) Appeal to Courts. — Any decision of the Commission, in the absence of an appeal therefrom as
herein provided, shall become final and executory fifteen (15) days after the date of notification,
and judicial review thereof shall be permitted only after any party claiming to be aggrieved thereby
has exhausted his remedies before the Commission. The Commission shall be deemed to be a party
to any judicial action involving any such decision and may be represented by an attorney employed
by the Commission, or when requested by the Commission, by the Solicitor General or any public
prosecutor. (Emphasis supplied)

In Luzon Stevedoring Corporation v. Social Security Commission,62 this Court upheld the jurisdiction
and competence of the Social Security Commission with regard to the grant of authority under the
unambiguous provisions of the Republic Act No. 8282. 63 This Court stated:
Section 5 of the Social Security Act . . . on its face, would show that any dispute arising therein "with
respect to coverage entitlement to benefits, collection and settlement of premium contributions and
penalties thereon, or any other matter related thereto, shall be cognizable by the Commission . . . ."
On its face, support for the competence of respondent Commission to decide . . . would thus seem
to be evident.64 (Emphasis supplied, citations omitted)

In Enorme v. Social Security System,65 this Court categorically sustained the Social Security
Commission's exclusive power and jurisdiction to take cognizance of all disputes covered under the
Social Security Act.66 Consequently, plaintiffs must first exhaust all administrative remedies before
judicial recourse is allowed.67

In Social Security Commission v. Court of Appeals,68 this Court upheld the rules of procedure of the
Social Security Commission with regard to the rule on exhaustion of administrative remedies before
a resort to the courts may be permitted:

It now becomes apparent that the permissive nature of a motion for reconsideration with the SSC
must be read in conjunction with the requirements for judicial review, or the conditions sine qua non
before a party can institute certain civil actions. A combined reading of Section 5 of Rule VI, quoted
earlier, and Section 1 of Rule VII of the SSC's 1997 Revised Rules of Procedure reveals that the
petitioners are correct in asserting that a motion for reconsideration is mandatory in the sense that it
is a precondition to the institution of an appeal or a petition for review before the Court of
Appeals. Stated differently, while Rago certainly had the option to file a motion for reconsideration
before the SSC, it was nevertheless mandatory that he do so if he wanted to subsequently avail of
judicial remedies.

....

The policy of judicial bodies to give quasi-judicial agencies, such as the SSC, an opportunity to
correct its mistakes by way of motions for reconsideration or other statutory remedies before
accepting appeals therefrom finds extensive doctrinal support in the well-entrenched principle of
exhaustion of administrative remedies.

The reason for the principle rests upon the presumption that the administrative body, if given the
chance to correct its mistake or error, may amend its decision on a given matter and decide it
properly. The principle insures orderly procedure and withholds judicial interference until the
administrative process would have been allowed to duly run its course. This is but practical since
availing of administrative remedies entails lesser expenses and provides for a speedier disposition of
controversies. Even comity dictates that unless the available administrative remedies have been
resorted to and appropriate authorities given an opportunity to act and correct the errors committed
in the administrative forum, judicial recourse must be held to be inappropriate, impermissible,
premature, and even unnecessary.69 (Emphasis supplied, citations omitted)

Furthermore, jurisdiction is determined by laws enacted by Congress. The doctrine of exhaustion of

administrative remedies ensures that this legislative power is respected by courts. Courts cannot
ignore Congress' determination that the Social Security Commission is the entity with jurisdiction
over any dispute arising from the Social Security Act with respect to coverage, benefits,
contributions, and penalties.

Here, nothing in the records shows that petitioners filed a case before the Social Security
Commission or asked for a reconsideration of the assailed issuances. Moreover, petitioners did not
even try to show that their Petition falls under one (1) of the exceptions to the doctrine of exhaustion
of administrative remedies:
However, we are not unmindful of the doctrine that the principle of exhaustion of administrative
remedies is not an ironclad rule. It may be disregarded (1) when there is a violation of due process,
(2) when the issue involved is purely a legal question, (3) when the administrative action is patently
illegal amounting to lack or excess of jurisdiction, (4) when there is estoppel on the part of the
administrative agency concerned, (5) when there is irreparable injury, (6) when the respondent is a
department secretary whose acts as an alter ego of the President bears the implied and assumed
approval of the latter, (7) when to require exhaustion of administrative remedies would be
unreasonable, (8) when it would amount to a nullification of a claim, (9) when the subject matter is a
private land in land case proceedings, (10) when the rule does not provide a plain, speedy and
adequate remedy, (11) when there are circumstances indicating the urgency of judicial intervention,
(12) when no administrative review is provided by law, (13) where the rule of qualified political
agency applies, and (14) when the issue of non-exhaustion of administrative remedies has been
rendered moot.70 (Emphasis in the original, citations omitted)

The doctrine of exhaustion of administrative remedies is settled in jurisprudence. 71 As early as 1967,

this Court has recognized the requirement that parties must exhaust all administrative remedies
available before the Social Security Commission. 72 The Social Security Commission, then, must be
given a chance to render a decision on the issue, or to correct any alleged mistake or error, before
the courts can exercise their power of judicial review. This Court ruled:

In the case at bar, plaintiff has not exhausted its remedies before the Commission. The Commission
has not even been given a chance to render a decision on the issue raised by plaintiff
herein, because the latter has not appealed to the Commission from the action taken by the System
in insisting upon the enforcement of Circular No. 34.73 (Emphasis in the original)

Thus, petitioners have prematurely invoked this Court's power of judicial review in violation of the
doctrine of exhaustion of administrative remedies.

Notably, petitioners failed to abide by the principle of primary administrative jurisdiction. This
principle states that:

. . . courts cannot or will not determine a controversy involving a question which is within the
jurisdiction

of the administrative tribunal prior to the resolution of that question by the administrative tribunal,
where the question demands the exercise of sound administrative discretion requiring the special
knowledge, experience and services of the administrative tribunal to determine technical and
intricate matters of fact.74

In Republic v. Gallo:75

[U]nder the doctrine of primary administrative jurisdiction, if an administrative tribunal has jurisdiction
over a controversy, courts should not resolve the issue even if it may be within its proper jurisdiction.
This is especially true when the question involves its sound discretion requiring special knowledge,
experience, and services to determine technical and intricate matters of fact.

In Republic v. Lacap:

Corollary to the doctrine of exhaustion of administrative remedies is the doctrine of primary

jurisdiction; that is, courts cannot or will not determine a controversy involving a question which is
within the jurisdiction of the administrative tribunal prior to the resolution of that question by the
administrative tribunal, where the question demands the exercise of sound administrative discretion
requiring the special knowledge, experience and services of the administrative tribunal to determine
technical and intricate matters of fact. . . .

Thus, the doctrine of primary administrative jurisdiction refers to the competence of a court to take
cognizance of a case at first instance. Unlike the doctrine of exhaustion of administrative remedies, it
cannot be waived.76 (Emphasis in the original, citations omitted)

Here, respondent Social Security Commission qualifies as an administrative tribunal, given sound
administrative discretion requiring the special knowledge, experience, and services of the
administrative tribunal to determine technical and intricate matters of fact. This is evident from the
qualifications of its members and its powers and duties under Sections 3 and 4 of the Social Security
Act:

SECTION 3. Social Security System. — (a) . . . The SSS shall be directed and controlled by a Social
Security Commission, hereinafter referred to as 'Commission', composed of the Secretary of Labor
and Employment or his duly designated undersecretary, the SSS president and seven (7) appointive
members, three (3) of whom shall represent the workers' group, at least one (1) of whom shall be a
woman; three (3), the employers' group, at least one (1) of whom shall be a woman; and one (1), the
general public whose representative shall have adequate knowledge and experience regarding
social security, to be appointed by the President of the Philippines. The six (6) members
representing workers and employers shall be chosen from among the nominees of workers' and
employers' organizations, respectively. . . .

(b) The general conduct of the operations and management functions of the SSS shall be vested in
the SSS President who shall serve as the chief executive officer immediately responsible for carrying
out the program of the SSS and the policies of the Commission. The SSS President shall be a
person who has had previous experience in technical and administrative fields related to the
purposes of this Act. . . .

(c) The Commission, upon the recommendation of the SSS President, shall appoint an actuary and
such other personnel as may be deemed necessary; fix their reasonable compensation, allowances
and other benefits; prescribe their duties and establish such methods and procedures as may be
necessary to insure the efficient, honest and economical administration of the provisions and
purposes of this Act: . . . Provided, further, That the personnel of the SSS shall be selected only from
civil service eligibles and be subject to civil service rules and regulations:. . .

SECTION 4. Powers and Duties of the Commission and SSS. — (a) The Commission. — For the
attainment of its main objectives as set forth in Section 2 hereof, the Commission shall have the
following powers and duties:

(1) To adopt, amend and rescind, subject to the approval of the President of the Philippines, such
rules and regulations as may be necessary to carry out the provisions and purposes of this Act;

(2) To establish a provident fund for the members which will consist of voluntary contributions of
employers and/or employees, self-employed and voluntary members and their earnings, for the
payment of benefits to such members or their beneficiaries, subject to such rules and regulations as
it may promulgate and approved by the President of the Philippines;

(3) To maintain a Provident Fund which consists of contributions made by both the SSS and its
officials and employees and their earnings, for the payment of benefits to such officials and
employees or their heirs under such terms and conditions as it may prescribe;
(4) To approve restructuring proposals for the payment of due but unremitted contributions and
unpaid loan amortizations under such terms and conditions as it may prescribe;

(5) To authorize cooperatives registered with the cooperative development authority or associations
registered with the appropriate government agency to act as collecting agents of the SSS with
respect to their members: Provided, That the SSS shall accredit the cooperative or
association: Provided, further, That the persons authorized to collect are bonded;

(6) To compromise or release, in whole or in part any interest, penalty or any civil liability to SSS in
connection with the investments authorized under Section 26 hereof, under such terms and
conditions as it may prescribe and approved by the President of the Philippines; and

(7) To approve, confirm, pass upon or review any and all actions of the SSS in the proper and
necessary exercise of its powers and duties hereinafter enumerated. (Emphasis supplied)

Thus, under the doctrine of primary administrative jurisdiction, petitioners should have first filed their
case before respondent Social Security Commission.

I (C)

As for mootness, as earlier mentioned, moot cases prevent the actual case or controversy from
becoming justiciable. Courts cannot render judgment after the issue has already been resolved by or
through external developments. This entails that they can no longer grant or deny the relief prayed
for by the complaining party.77

This is consistent with this Court's deference to the powers of the other branches of government.
This Court must be wary that it is ruling on existing facts before it invalidates any act or rule. 78

Nonetheless, this Court has enumerated circumstances when it may still rule on moot issues.
In David:

Courts will decide cases, otherwise moot and academic, if: first, there is a grave violation of the
Constitution; second, the exceptional character of the situation and the paramount public interest is
involved; third, when constitutional issue raised requires formulation of controlling principles to guide
the bench, the bar, and the public; and fourth, the case is capable of repetition yet evading
review.79 (Emphasis in the original, citations omitted)

The third exception is corollary to this Court's power under Article VIII, Section 5(5) of the 1987
Constitution.80 This Court has the power to promulgate rules and procedures for the protection and
enforcement of constitutional rights, pleading, practice, and procedure in all courts. It applies where
there is a clear need to clarify principles and processes for the protection of rights.

As for the rest of the exceptions, however, all three (3) circumstances must be present before this
Court may rule on a moot issue. There must be an issue raising a grave violation of the Constitution,
involving an exceptional situation of paramount public interest that is capable of repetition yet
evading review.

Here, since respondent Social Security Commission is set to issue new resolutions for the Social
Security System members' contributions, the issue on the assailed issuances' validity may be
rendered moot. Nonetheless, all the discussed exceptions are present: (1) petitioners raise violations
of constitutional rights; (2) the situation is of paramount public interest; (3) there is a need to guide
the bench, the bar, and the public on the power of respondent Social Security Commission to
increase the contributions; and (4) the matter is capable of repetition yet evading review, as it
involves a question of law that can recur. Thus, this Court may rule on this case.

I (D)

Petitioners argue that they have the legal standing to file the Petition since: (1) a majority of them are
Social Security System members and are directly affected by the increase in contributions; 81 and (2)
other petitioners argue that the standing requirement must be relaxed since the issues they raise are
of transcendental importance.82

On the contrary, not all petitioners have shown the requisite legal standing to bring the case before
this Court.

Legal standing is the personal and substantial interest of a party in a case "such that the party has
sustained or will sustain direct injury as a result of the governmental act that is being challenged,
alleging more than a generalized grievance." 83

Petitioners Joselito Ustarez, Salvador T. Carranza, Nenita Gonzaga, Prescila A. Maniquiz, Reden R.
Alcantara, and Anakpawis Party-List Representative Fernando Hicap, for himself, are Social Security
System members who stand to suffer direct and material injury from the assailed issuances'
enforcement. They are, thus, clothed with legal personality to assail the imposed increase in
contribution rates and maximum monthly salary credit.

On the other hand, petitioners Kilusang Mayo Uno, Anakpawis Party-List, Center for Trade Union
and Human Rights, and National Federation of Labor Unions-Kilusang Mayo Uno all failed to show
how they will suffer direct and material injury from the enforcement of the assailed issuances.

However, jurisprudence is replete with instances when a liberal approach to determining legal
standing was adopted. This has allowed "ordinary citizens, members of Congress, and civic
organizations to prosecute actions involving the constitutionality or validity of laws, regulations[,] and
rulings."84

This Court has provided instructive guides to determine whether a matter is of transcendental
importance: "(1) the character of the funds or other assets involved in the case; (2) the presence of a
clear case of disregard of a constitutional or statutory prohibition by the public respondent agency or
instrumentality of the government; and (3) the lack of any other party with a more direct and specific
interest in the questions being raised." 85

Here, the assailed issuances set the new contribution rate and its date of effectivity. The increase in
contributions has been in effect since January 2014. As such, the issue of the validity of increase in
contributions is of transcendental importance. The required legal standing for petitioners must be
relaxed.

It is worth noting that this issue affects millions of Filipinos working here and abroad. A substantial
portion of members' salaries goes to the Social Security System fund. To delay the resolution of
such an important issue would be a great disservice to this Court's duty enshrined in the
Constitution.

For all these reasons, and despite the technical infirmities in this Petition, this Court reviews the
assailed issuances.
II

Petitioners' attack on the increase in contribution rate and maximum monthly salary credit is two (2)-
tiered: (1) they assail the validity of the exercise of respondents Social Security System and Social
Security Commission's power under the law; and (2) they assail the validity of the delegation of
power to respondent Social Security Commission.

Petitioners argue that the assailed issuances are void for being issued under vague and unclear
standards under the Social Security Act. They admit that Section 18 allows the Social Security
Commission to fix the contribution rate subject to several conditions. However, petitioners claim that
the term "actuarial calculations" is too vague and general, and the relationship between the rate of
benefits and actuarial calculations is not clearly defined. Thus, they conclude that the delegation of
power to fix the contribution rate is incomplete in all its terms and conditions.

Petitioners' argument lacks merit.

Petitioners are putting in issue not only the validity of the exercise of the delegated power, but also
the validity of the delegation itself. They are, thus, collaterally attacking the validity of the Social
Security Act's provisions.

Collateral attacks on a presumably valid law are not allowed. Unless a law, rule, or act is annulled in
a direct proceeding, it is presumed valid.86

Furthermore, the "delegation of legislative power to various specialized administrative agencies is

allowed in the face of increasing complexity of modern life." 87 In Equi-Asia Placement, Inc. v.
Department of Foreign Affairs:88

Given the volume and variety of interactions involving the members of today's society, it is doubtful if
the legislature can promulgate laws dealing with the minutiae aspects of everyday life. Hence, the
need to delegate to administrative bodies, as the principal agencies tasked to execute laws with
respect to their specialized fields, the authority to promulgate rules and regulations to implement a
given statute and effectuate its policies. 89

For a valid exercise of delegation, this Court enumerated the following requisites:

All that is required for the valid exercise of this power of subordinate legislation is that the regulation
must 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. Under the first test or
the so-called completeness test, the law must be complete in all its terms and conditions when it
leaves the legislature such that when it reaches the delegate, the only thing he will have to do is to
enforce it. The second test or the sufficient standard test, mandates that there should be adequate
guidelines or limitations in the law to determine the boundaries of the delegate's authority and
prevent the delegation from running riot. 90

Simply put, what are needed for a valid delegation are: (1) the completeness of the statute making
the delegation; and (2) the presence of a sufficient standard. 91

To determine completeness, all of the terms and provisions of the law must leave nothing to the
delegate except to implement it. "What only can be delegated is not the discretion to determine what
the law shall be but the discretion to determine how the law shall be enforced." 92
More relevant here, however, is the presence of a sufficient standard under the law. Enforcement of
a delegated power may only be effected in conformity with a sufficient standard, which is used "to
map out the boundaries of the delegate's authority and thus 'prevent the delegation from running
riot.'"93 The law must contain the limitations or guidelines to determine the scope of authority of the
delegate.

Not only is the Social Security Act complete in its terms; it also contains a sufficient standard for the
Social Security Commission to fix the monthly contribution rate and the minimum and maximum
monthly salary credits.

Section 18 states:

SECTION 18. Employee's Contribution. — (a) Beginning as of the last day of the calendar month
when an employee's compulsory coverage takes effect and every month thereafter during his
employment, the employer shall deduct and withhold from such employee's monthly salary, wage,
compensation or earnings, the employee's contribution in an amount corresponding to his salary,
wage, compensation or earnings during the month in accordance with the following schedule:

SALARY RANGE OF MONTHLY MONTHLY CONTRIBUTION

BRACKET COMPENSATION SALARY
CREDIT EMPLOYER EMPLOYEE TOTAL

I 1,000.00- 1000 50.70 33.30 84.00

1,249.99
II 1,250.00- 1500 76.00 50.00 126.00
1,749.99
III 1,750.00- 2000 101.30 66.70 168.00
2,249.99
IV 2,25.00-2,749.99 2500 126.70 83.30 210.00
V 2,750.00- 3000 152.00 100.00 252.00
3,249.99
VI 3,250.00- 3500 177.30 116.70 294.00
3,749.99
VII 3,750.00- 4000 202.70 133.30 336.00
4,249.99
VIII 4,250.00- 4500 228.00 150.00 378.00
4,749.99
IX 4,750.00- 5000 253.30 166.70 420.00
5,249.99
X 5,250.00- 5500 278.70 183.70 462.40
5,749.99
XI 5,750.00- 6000 304.00 200.00 504.00
6,249.99
XII 6,250.00- 6500 329.30 216.70 546.00
6,749.99
XIII 6,750.00- 7000 354.70 233.30 588.00
7,249.99
XIV 7,250.00- 7500 380.00 250.00 630.00
7,749.99
XV 7,750.00- 8000 405.30 266.70 672.00
8,249.99
XVI 8,250.00- 8500 430.70 283.30 714.00
8,749.99
XVII 8,750.00-OVER 9000 456.00 300.00 756.00

The foregoing schedule of contribution shall also apply to self-employed and voluntary members.

The maximum monthly salary credit shall be Nine thousand pesos (P9,000.00) effective January
Nineteen hundred and ninety six (1996): Provided, That it shall be increased by One thousand pesos
(P1,000.00) every year thereafter until it shall have reached Twelve thousand pesos (P12,000.00) by
Nineteen hundred and ninety nine (1999): Provided, further, That the minimum and maximum
monthly salary credits as well as the rate of contributions may be fixed from time to time by the
Commission through rules and regulations taking into consideration actuarial calculations and rate of
benefits, subject to the approval of the President of the Philippines. (Emphasis supplied)

In relation to Section 18, Section 4(a) prescribes the powers and duties of the Social Security
Commission. It provides:

SECTION 4. Powers and Duties of the Commission and SSS. — (a) The Commission. — For the
attainment of its main objectives as set forth in Section 2 hereof, the Commission shall have the
following powers and duties:

(1) To adopt, amend and rescind, subject to the approval of the President of the Philippines, such
rules and regulations as may be necessary to carry out the provisions and purposes of this Act;

....

(7) To approve, confirm, pass upon or review any and all actions of the SSS in the proper and
necessary exercise of its powers and duties hereinafter enumerated.

It is evident from these provisions that the legislature has vested the necessary powers in the Social
Security Commission to fix the minimum and maximum amounts of monthly salary credits and the
contribution rate. The agency does not have to do anything except implement the provisions based
on the standards and limitations provided by law.

In fixing the contribution rate and the minimum and maximum amounts of monthly salary credits, the
legislature specified the factors that should be considered: "actuarial calculations and rate of
benefits"94 as an additional limit to the Social Security Commission's rate fixing power under Section
18, the legislature required the approval of the President of the Philippines.

The Social Security Act clearly specifies the limitations and identifies when and how the Social
Security Commission will fix the contribution rate and the monthly salary credits.
Actuarial science is derived from the concepts of utilitarianism and risk aversion. Thus:

Just as economic systems are the realm of the economist, social systems are the realm of the
sociologist, and electrical systems are the realm of the electrical engineer, financial security systems
have become the realm of the actuary. The uniqueness of the actuarial profession lies in the
actuary's understanding of financial security systems in general, and the inner workings of the many
different types in particular. The role of the actuary is that of the designer, the adaptor, the problem
solver, the risk estimator, the innovator, and the technician of the continually changing field of
financial security systems.

....

Utilitarianism as a philosophy, and risk aversion as a feature of human psychology, lead to the
evolution of financial security systems as a means of reducing the financial consequences of
unfavorable events. Actuaries are those professionals with a deep understanding of, and training in,
financial security systems; their reason for being, their complexity, their mathematics, and the way
they work.95 (Emphasis supplied)

Actuarial science is "primarily concerned with the study of consequences of events that involve risk
and uncertainty. Actuarial practice identifies, analyzes and assists in the management of the
outcomes—including costs and benefits—associated with events that involve risk and uncertainty." 96

Actuarial science is relevant to the operation of a social security system, in that "the actuary plays a
crucial role in analysing [the system's] financial status and recommending appropriate action to
ensure its viability. More specifically, the work of the actuary includes assessing the financial
implications of establishing a new scheme, regularly following up its financial status and estimating
the effect of various modifications that might have a bearing on the scheme during its existence." 97

The application of actuarial calculations in the operation of a social system scheme requires the
determination of benefits.98 To question the use of "actual calculations" as factor for fixing rates is to
question the policy or wisdom of the legislature, which is a co-equal branch of government.

As a component of the doctrine of separation of powers, courts must never go into the question of
the wisdom of the policy of the law.99 In Magtajas v. Pryce Properties Corporation, Inc.,100 where this
Court resolved the issue of the morality of gambling, this Court held:

The morality of gambling is not a justiciable issue. Gambling is not illegal per se. While it is generally
considered inimical to the interests of the people, there is nothing in the Constitution categorically
proscribing or penalizing gambling or, for that matter, even mentioning it at all. It is left to Congress
to deal with the activity as it sees fit. In the exercise of its own discretion, the legislature may prohibit
gambling altogether or allow it without limitation or it may prohibit some forms of gambling and allow
others for whatever reasons it may consider sufficient. Thus, it has prohibited jueteng and monte but
permits lotteries, cockfighting and horse-racing. In making such choices, Congress has consulted its
own wisdom, which this Court has no authority to review, much less reverse. Well has it been said
that courts do no[t] sit to resolve the merits of conflicting theories. That is the prerogative of the
political departments. It is settled that questions regarding the wisdom, morality, or practicibility of
statutes are not addressed to the judiciary but may be resolved only by the legislative and executive
departments, to which the function belongs in our scheme of government. That function is exclusive.
Whichever way these branches decide, they are answerable only to their own conscience and the
constituents who will ultimately judge their acts, and not to the courts of justice. 101 (Emphasis
supplied, citation omitted)
Recently, in Garcia v. Drilon,102 this Court has upheld the long-settled principle that courts do not go
into the wisdom of the law:

It is settled that courts are not concerned with the wisdom, justice, policy, or expediency of a statute.
Hence, we dare not venture into the real motivations and wisdom of the members of Congress . .
. Congress has made its choice and it is not our prerogative to supplant this judgment. The choice
may be perceived as erroneous but even then, the remedy against it is to seek its amendment or
repeal by the legislative. By the principle of separation of powers, it is the legislative that determines
the necessity, adequacy, wisdom and expediency of any law. We only step in when there is a
violation of the Constitution.103 (Emphasis supplied, citations omitted)

Hence, the Social Security Act has validly delegated the power to fix the contribution rate and the
minimum and maximum amounts for the monthly salary credits. It is within the scope of the Social
Security Commission's power to fix them, as clearly laid out in the law.

III

On the question of the validity of the exercise of respondents Social Security Commission and Social
Security System's powers, this Court disagrees with petitioners' argument that the increase in
contribution rate is prohibited by Section 4(b)(2) of the Social Security Act. The provision states:

SECTION 4. Powers and Duties of the Commission and SSS. . . .

(b) The Social Security System. — Subject to the provision of Section four (4), paragraph seven (7)
hereof, the SSS shall have the following powers and duties:

....

(2) To require the actuary to submit a valuation report on the SSS benefit program every four (4)
years, or more frequently as may be necessary, to undertake the necessary actuarial studies and
calculations concerning increases in benefits taking into account inflation and the financial stability of
the SSS, and to provide for feasible increases in benefits every four (4) years, including the addition
of new ones, under such rules and regulations as the Commission may adopt, subject to the
approval of the President of the Philippines: Provided, That the actuarial soundness of the reserve
fund shall be guaranteed: Provided, further, That such increases in benefits shall not require any
increase in the rate of contribution[.] (Emphasis supplied)

However, an examination of the provision and the assailed issuances reveals that the questioned
increase in contribution rate was not solely for the increase in members' benefits, but also to extend
actuarial life.

Social Security Commission Resolution No. 262-s.2013 provides:

RESOLVED, That the Commission approve and confirm, as it hereby approves and confirms, the
SSS 2013 Reform Agenda, the effectivity of which shall be as approved by the President of the
Philippines, which aims to address SSS' unfunded liability, extend SSS' fund life to a more secure
level and provide improved benefits for current and future generations of SSS members, consisting
of the following:

1. Increase in the contribution rate from 10.4% to 11%; and

2. Increase in the maximum monthly salary credit (MSC) from ₱15,000 to ₱16,000.

The above is based on the recommendation of the President and CEO in his memorandum dated 19
November 2012.104

The provisos in Section 4(b)(2) must not be read in isolation, but within the context of the provision,
as well as the policy of the law.

The two (2) provisos refer to the last part of Section 4(b)(2), or on the System's duty to "provide for
feasible increases in benefits every four (4) years, including the addition of new ones[.]" Section
4(b)(2) states that the "actuarial soundness of the reserve fund shall be guaranteed" in providing any
increase in benefits. As established earlier, Congress has expressly provided the Social Security
System, through the Social Security Commission, power to fix the minimum and maximum monthly
salary credits and the contribution rate.

To disregard actuarial soundness of the reserves would be to go against the policy of the law on
maintaining a sustainable social security system:

SECTION 2. Declaration of Policy. — It is the policy of the State to establish, develop, promote and
perfect a sound and viable tax-exempt social security system suitable to the needs of the people
throughout the Philippines which shall promote social justice and provide meaningful protection to
members and their beneficiaries against the hazards of disability, sickness, maternity, old age,
death, and other contingencies resulting in loss of income or financial burden. Towards this end, the
State shall endeavor to extend social security protection to workers and their beneficiaries.
(Emphasis supplied)

Petitioners' argument is, thus, bereft of merit.

In arguing that the increase in contributions is unduly oppressive upon the labor sector, petitioners
are again asking this Court to inquire into the wisdom of the policy behind the issuances made by
the executive branch. This, as earlier said, we cannot and will not do. 105

Furthermore, this Court is not persuaded by petitioners' argument that the increase in contributions
constitutes an unlawful exercise of police power.

Police power has been defined as:

. . . state authority to enact legislation that may interfere with personal liberty or property in order to
promote the general welfare. Persons and property could thus "be subjected to all kinds of restraints
and burdens in order to secure the general comfort, health and prosperity of the state." [It is] "the
power to prescribe regulations to promote the health, morals, peace, education, good order or
safety, and general welfare of the people." 106

To be a valid exercise of police power, there must be a lawful subject and the power is exercised
through lawful means.107 The second requisite requires a reasonable relation between the purpose
and the means.108

Using the parameters above, we hold that the increases reflected in the issuances of respondents
are reasonably necessary to observe the constitutional mandate of promoting social justice under
the Social Security Act. The public interest involved here refers to the State's goal of establishing,
developing, promoting, and perfecting a sound and viable tax-exempt social security system. To
achieve this, the Social Security System and the Social Security Commission are empowered to
adjust from time to time the contribution rate and the monthly salary credits. Given the past
increases since the inception of the law, the contribution rate increase of 0.6% applied to the
corresponding monthly salary credit does not scream of unreasonableness or injustice.

Moreover, this Court will not delve into petitioners' argument that the revised ratio of contributions
was supposedly inconsistent with previous schemes. 109 Nothing in the law requires that the ratio of
contributions must be set at a 70%-30% sharing in favor of the employee. Supplanting the executive
branch's determination of the proper ratio of contribution would result in judicial legislation, which is
beyond this Court's power.

A parameter of judicial review is determining who can read the Constitution. Interpreting its text has
never been within the exclusive province of the courts. Other branches of government are equally
able to provide their own interpretation of the provisions of our organic law, especially on the powers
conferred by the Constitution and those delegated by Congress to administrative agencies.

However, other departments' reading or interpretation is limited only to a preliminary determination.

Only this Court can read the text of the Constitution with finality.

In People v. Vera,110 Associate Justice Jose Laurel elucidated on how laws must be accorded
presumption of constitutionality due to the premise that the Constitution binds all three (3) branches
of government. He explained:

Under a doctrine peculiarly American, it is the office and duty of the judiciary to enforce the
Constitution. This court, by clear implication from the provisions of section 2, subsection 1, and
section 10, of Article VIII of the Constitution, may declare an act of the national legislature invalid
because in conflict with the fundamental law. It will not shirk from its sworn duty to enforce the
Constitution. And, in clear cases, it will not hesitate to give effect to the supreme law by setting aside
a statute in conflict therewith. This is of the essence of judicial duty.

This court is not unmindful of the fundamental criteria in cases of this nature that all reasonable
doubts should be resolved in favor of the constitutionality of a statute. An act of the legislature
approved by the executive, is presumed to be within constitutional limitations. The responsibility of
upholding the Constitution rests not on the courts alone but on the legislature as well. "The question
of the validity of every statute is first determined by the legislative department of the government
itself." . . . And a statute finally comes before the courts sustained by the sanction of the executive.
The members of the Legislature and the Chief Executive have taken an oath to support the
Constitution and it must be presumed that they have been true to this oath and that in enacting and
sanctioning a particular law they did not intend to violate the Constitution. The courts cannot but
cautiously exercise its power to overturn the solemn declarations of two of the three grand
departments of the government. . . . Then, there is that peculiar political philosophy which bids the
judiciary to reflect the wisdom of the people as expressed through an elective Legislature and an
elective Chief Executive. It follows, therefore, that the courts will not set aside a law as violative of
the Constitution except in a clear case. This is a proposition too plain to require a citation of
authorities.111 (Emphasis supplied, citations omitted)

As such, courts, in exercising judicial review, should also account for the concept of "pragmatic
adjudication."112 As another parameter of judicial review, adjudicative pragmatism entails deciding a
case with regard to the "present and the future, unchecked by any felt duty to secure consistency in
principle with what other officials have done in the past[.]" 113 The pragmatist judge is:
. . . not uninterested in past decisions, in statutes, and so forth. Far from it. For one thing, these are
1âшphi1

repositories of knowledge, even, sometimes, of wisdom, and so it would be folly to ignore them even
if they had no authoritative significance. For another, a decision that destabilized the law by
departing too abruptly from precedent might have, on balance, bad results. There is often a trade-off
between rendering substantive justice in the case under consideration and maintaining the law's
certainty and predictability. This trade-off, which is perhaps clearest in cases in which a defense of
statute of limitations is raised, will sometimes justify sacrificing substantive justice in the individual
case to consistency with previous cases or with statutes or, in short, with well-founded expectations
necessary to the orderly management of society's business. Another reason not to ignore the past is
that often it is difficult to determine the purpose and scope of a rule without tracing the rule to its
origins.

The pragmatist judge thus regards precedent, statutes, and constitutions both as sources of
potentially valuable information about the likely best result in the present case and as signposts that
must not be obliterated or obscured gratuitously, because people may be relying upon them.114

Going into the validity of respondents' actions, petitioners must show that the assailed issuances
were made without any reference to any law, or that respondents knowingly issued resolutions in
excess of the authority granted to them under the Social Security Act to constitute grave abuse of
discretion.

Grave abuse of discretion denotes a "capricious, arbitrary[,] and whimsical exercise of power. The
abuse of discretion must be patent and gross as to amount to an evasion of positive duty or to a
virtual refusal to perform a duty enjoined by law, as not to act at all in contemplation of law, or where
the power is exercised in an arbitrary and despotic manner by reason of passion or hostility."115

Any act of a government branch, agency, or instrumentality that violates a statute or a treaty is grave
abuse of discretion.116 However, grave abuse of discretion pertains to acts of discretion exercised in
areas outside an agency's granted authority and, thus, abusing the power granted to it.117 Moreover,
it is the agency's exercise of its power that is examined and adjudged, not whether its application of
the law is correct.118

Here, respondents were only complying with their duties under the Social Security Act when they
issued the assailed issuances. There is no showing that respondents went beyond the powers under
the law that amounts to lack of or in excess of their jurisdiction. Petitioners' claims are
unsubstantiated and, as such, merit no finding of grave abuse of discretion.

IV

Petitioners have failed to show that there was an invasion of a material and substantial right, or that
they were entitled to such a right. Moreover, they failed to show that "there is an urgent and
paramount necessity for the writ to prevent serious and irreparable damage."119 Accordingly,
petitioners' prayer for the issuance of a temporary restraining order and/or writ of preliminary
injunction is denied.

WHEREFORE, the Petition is DENIED for lack of merit. Resolution Nos. 262-s. 2013 and 711-s.
2013 issued by the Social Security Commission, as well as Circular No. 2013-010 issued by the
Social Security System, are valid. The prayer for the issuance of a temporary restraining order
and/or writ of preliminary injunction is also DENIED.

SO ORDERED.
Bersamin (C.J.), Carpio, Peralta, Del Castillo, Perlas-Bernabe, Caguioa, A. Reyes, Jr., Gesmundo,
Carandang and Lazaro-Javier, JJ., concur.
Jardeleza, J., no part and on official business.
J. Reyes, Jr., J., on official leave.
Hernando, J., on leave.