Blaquera Vs Alcala

Administrative Law Case Digests
Arellano University School of Law

aiza ebina/2015
BLAQUERA vs ALCALA
295 SCRA 411
Relationship of Government Owned or Controlled Corporations to
the Department
FACTS: Petitioners are officials and employees of several government
departments and agencies who were paid incentive benefits for the year
1992, pursuant to Executive Order No. 292, otherwise known as the
Administrative Code of 1987, and the Omnibus Rules Implementing Book V of
EO 292.
On January 19, 1993, then President Fidel V. Ramos issued
Administrative Order No. 29 authorizing the grant of productivity incentive
benefits for the year 1992 in the maximum amount of P1,000.00 and
reiterating the prohibition under Section 7 of Administrative Order No. 268,
enjoining the grant of productivity incentive benefits without prior approval
of the President. Section 4 of AO 29 directed all departments, offices and
agencies which authorized payment of CY 1992 Productivity Incentive Bonus
in excess of the amount authorized under Section 1 hereof are hereby
directed to immediately cause the return/refund
of the excess within a
period of six months to commence fifteen (15) days after the issuance of this
Order. In compliance therewith, the heads of the departments or agencies
of the government concerned, who are the herein respondents, caused the
deduction from petitioners salaries or allowances of the amounts needed to
cover the alleged overpayments. To prevent the respondents from making
further deductions from their salaries or allowances, the petitioners have
come before this Court to seek relief.
The petitioner, Association of Dedicated Employees of the Philippine Tourism
Authority, is an association of employees of the Philippine Tourism Authority
who were granted productivity incentive bonus for calendar year 1992
pursuant to Republic Act No. 6971, otherwise known as the Productivity
Incentives Act of 1990. Subject bonus was, however, disallowed by the
Corporate Auditor on the ground that it was prohibited under Administrative
Order No. 29 dated January 19, 1993. The disallowance of the bonus in
question was finally brought on appeal to the Commission on Audit which
denied the appeal in its Decision of March 6, 1995 on the grounds that
provisions of RA 6971 insofar as the coverage is concerned, refer to business
enterprises including government owned and/or controlled corporations
performing proprietary functions.
Section 1a of the Supplemental Rules Implementing RA 6971 classified such
coverage as:
All business enterprises, with or without existing duly certified labor

organizations, including government owned and/or controlled corporations
performing proprietary functions which are established solely for business or
profit and accordingly excluding those created, maintained or acquired in
pursuance of a policy of the State enunciated in the Constitution, or by law
and those whose officers and employees are covered by the Civil Service."
Pursuant to Section 10 of RA 6971, the Secretary of Labor and Secretary of
Finance issued Supplemental Rules to Implement the said law.
With the denial of its appeal, petitioner found its way here via the petition in
G.R. No. 119597, to seek relief from the aforesaid decision of COA.
ISSUE: Whether or not the PTA is within the ambit of RA 6971
RULING: Government-owned and controlled corporations may perform
governmental or proprietary functions or both, depending on the purpose for
which they have been created. If the purpose is to obtain special corporate
benefits or earn pecuniary profit, the function is proprietary. If it is in the
interest of health, safety and for the advancement of public good and
welfare, affecting the public in general, the function is governmental. Powers
classified as proprietary are those intended for private advantage and
benefit.
The aforecited powers and functions of PTA are predominantly governmental,
principally geared towards the development and promotion of tourism in the
scenic Philippine archipelago. But it is irrefutable that PTA also performs
proprietary functions, as envisaged by its charter. To ascertain whether PTA is
within the ambit of RA 6971, there is need to find out the legislative intent,
and to refer to other provisions of RA 6971 and other pertinent laws, that
may aid the Court in ruling on the right of officials and employees of PTA to
receive bonuses under RA 6971.
Government corporations may be created by
incorporation under the general corporation law.
charters are governed by the Civil Service Law
under the general corporation law are governed by
special charters or by
Those created by special
while those incorporated
the Labor Code.
It is thus evident that PTA, being a government-owned and controlled

corporation with original charter subject to Civil Service Law, Rules and
Regulations, is already within the scope of an incentives award system under
Section 1, Rule X of the Omnibus Rules Implementing EO 292 issued by the
Civil Service Commission (Commission). Since government-owned and
controlled corporations with original charters do have an incentive award
system, Congress enacted a law that would address the same concern of
officials and employees of government-owned and controlled corporations
incorporated under the general corporation law.

All things studiedly considered in proper perspective, the Court finds no
reversible error in the finding by respondent Commission that PTA is not
within the purview of RA 6971. As regards the promulgation of implementing
rules and regulations, it bears stressing that the power of administrative
officials to promulgate rules in the implementation of the statute is
necessarily
limited
to what
is
provided for in the legislative
enactment. In the case under scrutiny, the Supplementary Rules
Implementing RA 6971 issued by the Secretary of Labor and Employment
and the Secretary of Finance accord with the intendment and provisions of
RA 6971. Consequently, not being covered by RA 6971, AO 29 applies to the
petitioner.
RATIO: Government-owned or controlled corporations refer to any agency
organized as a stock or non-stock corporation, vested with functions relating
to public needs whether governmental or proprietary in nature, and owned
by the government directly ot through its instrumentalities either wholly, or,
where applicable, as in the case of stock corporations, to the extent of at
least 50% of its capital stock.
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Blaquera Vs Alcala

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Administrative Law Case Digests

Arellano University School of Law

All business enterprises, with or without existing duly certified labor

It is thus evident that PTA, being a government-owned and controlled

incorporated under the general corporation law.

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