EN BANC

G.R. No. 196425   July 24, 2012

Topic: Legislative Power

FACTS:

On April 16, 2001, then President Gloria Macapagal-Arroyo issued Executive Order No. 12 creating
the Presidential Anti-Graft Commission (PAGC) and vesting it with the power to investigate or hear
administrative cases or complaints for possible graft and corruption, among others, against

On November 15, 2010, President Benigno Simeon Aquino III issued Executive Order No. 13,
abolishing the PAGC and transferring its functions to the Office of the Deputy Executive Secretary for
Legal Affairs (ODESLA), more particularly to its newly-established Investigative and Adjudicatory
Division (IAD). (IAD-ODESLA)

On April 6, 2011, respondent Finance Secretary Cesar V. Purisima filed before the IAD-ODESLA a
complaint affidavit for grave misconduct against petitioner Prospero A. Pichay, Jr., Chairman
(LWUA), as well as the incumbent members of the LWUA Board of Trustees, which arose from the
purchase by the LWUA of Four Hundred Forty-Five Thousand Three Hundred Seventy Seven
(445,377) shares of stock of Express Savings Bank, Inc.

Petitioner assails the constitutionality of E.O. 13, claiming that the President is not authorized under
any existing law to create the Investigative and Adjudicatory 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 functions, the President has not only usurped the powers of congress to
create a public office, appropriate funds and delegate quasi-judicial functions to administrative
agencies.

ISSUES:

I. WON E.O. 13 IS UNCONSTITUTIONAL FOR USURPING THE POWER OF THE

II. WON E.O. 13 IS UNCONSTITUTIONAL FOR USURPING THE POWER OF THE

III. WON E.O. 13 IS UNCONSTITUTIONAL FOR USURPING THE POWER OF CONGRESS

HELD:

No, the President has Continuing Authority to Reorganize the Executive Department under
E.O. 292 and the Reorganization Did not Entail the Creation of a New, Separate and Distinct
Office.

Clearly, the abolition of the PAGC and the transfer of its functions to a division specially created
within the ODESLA is properly within the prerogative of the President under his continuing
"delegated legislative authority to reorganize" his own office pursuant to E.O. 292.

Section 31 of Executive Order No. 292 (E.O. 292), 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 and efficiency.
The abolition of the PAGC did not require the creation of a new, additional and distinct office as the
duties and functions that pertained to the defunct anti-graft body were simply transferred to the
ODESLA, which is an existing office within the Office of the President Proper. The reorganization
required no more than a mere alteration of the administrative structure of the ODESLA through the
establishment of a third division – the Investigative and Adjudicatory Division – through which
ODESLA could take on the additional functions it has been tasked to discharge under E.O. 13.

In Canonizado v. Aguirre, We ruled that – Reorganization takes place when there is an alteration of
the existing structure of government offices or units therein, including the lines of control, authority
and responsibility between them. It involves a reduction of personnel, consolidation of offices, or
abolition thereof by reason of economy or redundancy of functions.

A valid reorganization must not only be exercised through legitimate authority but must also be
pursued in good faith. A reorganization is said to be carried out in good faith if it is done for purposes
of economy and efficiency. It appears in this case that the streamlining of functions within the Office of
the President Proper was pursued with such purposes in mind. The Reorganization was Pursued in
Good Faith.

II

No, there is no usurpation of the legislative power to appropriate public funds.

In the chief executive dwell the powers to run government. Placed upon him is the power to
recommend the budget necessary for the operation of the Government,  which implies that he has the
necessary authority to evaluate and determine the structure that each government agency in the
executive department would need to operate in the most economical and efficient manner. Hence, the
express recognition under Section 78 of R.A. 9970 or the General Appropriations Act of 2010 of the
President’s authority to "direct changes in the organizational units or key positions in any department
or agency." The aforecited provision, often and consistently included in the general appropriations
laws, recognizes the extent of the President’s power to reorganize the executive offices and agencies
under him, which is, "even to the extent of modifying and realigning appropriations for that purpose."

And to further enable the President to run the affairs of the executive department, he is likewise given
constitutional authority to augment any item in the General Appropriations Law using the savings in
other items of the appropriation for his office. In fact, he is explicitly allowed by law to transfer any
fund appropriated for the different departments, bureaus, offices and agencies of the Executive
Department which is included in the General Appropriations Act, to any program, project or activity of
any department, bureau or office included in the General Appropriations Act or approved after its
enactment.

Thus, while there may be no specific amount earmarked for the IAD-ODESLA from the total amount
appropriated by Congress in the annual budget for the Office of the President, the necessary funds
for the IAD-ODESLA may be properly sourced from the President's own office budget without
committing any illegal appropriation. After all, there is no usurpation of the legislature's power to
appropriate funds when the President simply allocates the existing funds previously appropriated by
Congress for his office.

III

No, the IAD-ODESLA is a fact-finding and recommendatory body not vested with quasi-judicial
powers.

As the OSG aptly explained in its Comment, while the term "adjudicatory" appears part of its
appellation, the IAD-ODESLA cannot try and resolve cases, its authority being limited to the conduct
of investigations, preparation of reports and submission of recommendations. E.O. 13 explicitly states
that the IAD-ODESLA shall "perform powers, functions and duties xxx, of PAGC."
Under E.O. 12, the PAGC was given the authority to "investigate or hear administrative cases or
complaints against all presidential appointees in the government"  and to "submit its report and
recommendations to the President." The IAD-ODESLA is a fact-finding and recommendatory body to
the President, not having the power to settle controversies and adjudicate cases. As the Court ruled
in Cariño v. Commission on Human Rights,and later reiterated in Biraogo v. The Philippine Truth
Commission:

Fact-finding is not adjudication and it cannot be likened to the judicial function of a court of justice,
or even a quasi-judicial agency or office. The function of receiving evidence and ascertaining
therefrom the facts of a controversy is not a judicial function. To be considered as such, the act of
receiving evidence and arriving at factual conclusions in a controversy must be accompanied by the
authority of applying the law to the factual conclusions to the end that the controversy may be
decided or determined authoritatively, finally and definitively, subject to such appeals or modes of
review as may be provided by law.

The President's authority to issue E.O. 13 and constitute the IAD-ODESLA as his fact-finding
investigator cannot be doubted. After all, as Chief Executive, he is granted full control over the
Executive Department to ensure the enforcement of the laws. Section 17, Article VII of the
Constitution provides:

Section 17. The President shall have control of all the executive departments, bureaus and offices.
He shall ensure that the laws be faithfully executed.

The obligation to see to it that laws are faithfully executed necessitates the corresponding power in
the President to conduct investigations into the conduct of officials and employees in the executive
department.

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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.
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 President.

WHEREFORE, premises considered, the petition IS hereby DISMISSED.