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Yazaki Torres v. CA, GR No. 130584, June 27, 2006

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1/25/2021 SUPREME COURT REPORTS ANNOTATED VOLUME 493

86 SUPREME COURT REPORTS ANNOTATED


Yazaki Torres Manufacturing, Inc. vs. Court of Appeals

*
G.R. No. 130584. June 27, 2006.

YAZAKI TORRES MANUFACTURING, INC., petitioner,


vs. THE COURT OF APPEALS, THE HOME
DEVELOPMENT MUTUAL FUND, through its Board of
Trustees, and HONORABLE ZORAYDA AMELIA C.
ALONZO, in her capacity as President of the Home
Development Mutual Fund, respondents.

Administrative Law; Doctrine of Primary Jurisdiction; It is a


doctrine of long-standing that courts will not interfere in matters
which are addressed to the sound discretion of the government
agency entrusted with regulation of activities coming under the
special and technical training and knowledge of such agency—the
exercise of administrative discretion is a policy decision and a
matter that best be discharged by the government agency
concerned and not by the courts.—It is a doctrine of long-standing
that courts will not interfere in matters which are addressed to
the sound discretion of the government agency entrusted with
regulation of activities coming under the special and technical
training and knowledge of such agency. For the exercise of
administrative discretion is a policy decision and a matter that
best be discharged by the government agency concerned and not
by the courts. In this case, there is no showing that the HDMF
arbitrarily, whimsically or capriciously denied petitioner’s
application for renewal of its waiver. It conducted the necessary
investigation, comparison, evaluation, and deliberation of
petitioner’s retirement plan vis-à-vis the Fund. This Court thus
holds that the Court of Appeals committed no grave abuse of
discretion amounting to lack or excess of jurisdiction when it
affirmed the denial of petitioner’s application for renewal of
waiver by the HDMF.

Same; Same; Home Development Mutual Fund (PAG-IBIG);


The grant of waiver or exemption from the coverage of the Pag-Ibig
Fund is but a mere privilege granted by the State, and that task of
determining whether an application for exemption should be
granted is best discharged by the HDMF, not by the courts.—The
grant of waiver or exemption from the coverage of the Fund is but
a mere privilege granted by the State. A privilege is a particular
and pecu-

_______________

* SECOND DIVISION.

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Yazaki Torres Manufacturing, Inc. vs. Court of Appeals

liar benefit or advantage enjoyed by a person, company, or class


beyond the common advantages of other citizens. Like any other
privilege or exemption, it may be withdrawn by the State on a
finding that the recipient is no longer entitled to it. There is no
provision whatsoever in R.A. No. 7742 or its Implementing Rules
and Regulations that the HDMF shall automatically renew a
waiver from the Fund coverage upon an application for renewal.
The task of determining whether such application should be
granted is best discharged by the HDMF, not by the courts.
Absent a showing that the denial of petitioner’s application by the
HDMF is tainted by caprice, arbitrariness, or despotism, this
Court will not interfere in the exercise of its discretion.

Same; Legislative Power; Subordinate Legislation; Words and


Phrases; The legislative power has been described generally as the
power to make, alter, and repeal laws; The details and manner of
carrying out the law are left to the administrative agency charged
with its implementation—in this sense, rules and regulations
promulgated by an administrative agency are the product of a
delegated power to create new or additional legal provisions that
have the effect of law.—The legislative power has been described
generally as the power to make, alter, and repeal laws. The
authority to amend, change, or modify a law is thus part of such
legislative power. It is the peculiar province of the legislature to
prescribe general rules for the government of society. However,
the legislature cannot foresee every contingency involved in a
particular problem that it seeks to address. Thus, it has become
customary for it to delegate to instrumentalities of the executive
department, known as administrative agencies, the power to
make rules and regulations. This is because statutes are generally
couched in general terms which express the policies, purposes,
objectives, remedies and sanctions intended by the legislature.
The details and manner of carrying out the law are left to the
administrative agency charged with its implementation. In this
sense, rules and regulations promulgated by an administrative
agency are the product of a delegated power to create new or
additional legal provisions that have the effect of law. Hence, in
general, rules and regulations issued by an administrative
agency, pursuant to the authority conferred upon it by law, have
the force and effect, or partake of the nature, of a statute.

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Yazaki Torres Manufacturing, Inc. vs. Court of Appeals

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Same; Same; Same; Doctrine of Necessary Implication; The


grant of express power to formulate implementing rules and
regulations must necessarily include the power to amend, revise,
alter, or repeal the same.—The law delegated to the HDMF the
rule-making power since this is necessary for the proper exercise
of its authority to administer the Fund. Following the doctrine of
necessary implication, this grant of express power to formulate
implementing rules and regulations must necessarily include the
power to amend, revise, alter, or repeal the same.

SPECIAL CIVIL ACTION in the Supreme Court.


Certiorari.
The facts are stated in the opinion of the Court.
     Batino Law Offices for petitioner.
     Fernando M. Anos for respondent HDMF.

SANDOVAL-GUTIERREZ, J.:

This is a petition for certiorari under Rule 65 of the 1997


Rules of 1Civil Procedure, as amended, seeking to annul the
Decision of the Court of Appeals (Special Eighth Division),
dated February 5, 1997, in CA-G.R. SP No. 41487 for
having been issued with grave abuse of discretion.
The Home Development Mutual Fund (HDMF) is the
government 2
agency tasked with the administration of the
PAG-IBIG Fund (Fund) created under Presidential Decree
(P.D.) No. 1530, signed into law on June 11, 1978. The
Fund has been intended for housing purposes to be sourced
from voluntary contributions from its members.

_______________

1 Rollo, pp. 36-54. Ponencia by Associate Justice Corona Ibay-Somera


(retired), with Associate Justice Romeo J. Callejo, Sr. (now a member of
this Court), and Associate Justice Salvador J. Valdez, Jr. (retired),
concurring.
2 The acronym stands for “PAGTUTULUNGAN SA KINABUKASAN:
IKAW, BANGKO, INDUSTRIYA, GOBYERNO.”

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Yazaki Torres Manufacturing, Inc. vs. Court of Appeals

On December 14, 1980, P.D. No. 1530 was amended by P.D.


No. 1752 providing that membership in the Fund is
mandatory for all gainfully-employed Filipinos.
On June 17, 1994, P.D. No. 1752 was amended by
Republic Act (R.A.) No. 7742 which took effect on January
1, 1995. Under the new law, the coverage of the Fund
extends to all members of the Social Security System and
Government Service Insurance System, as well as their
employers. However, membership is voluntary for
employees earning less than P4,000.00 a month.
On July 18, 1994, the HDMF Board of Trustees
promulgated Rules and Regulations implementing R.A. No.
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7742. Rule VII provides:

RULE VII

WAIVER OR SUSPENSION

SEC. 1. Waiver or Suspension, Existing Provident or Retirement


Plan.—An employer and/or employee group who has an existing
provident or retirement plan as of the effectivity of Republic Act
No. 7742, qualified under Republic Act No. 4917 and actuarially
determined to be sound and reasonable by an independent
actuary duly accredited by the Insurance Commission may apply
with the Fund for waiver or suspension of coverage. Such waiver
or suspension may be granted by the President of the Fund on the
basis of verification that the waiver or suspension does not
contravene any effective collective bargaining or other existing
agreement and that the features of the plan or plans are
superior to the Fund and continue to be so. The certificate of
waiver or suspension of coverage issued therein shall only be for a
period of one (1) year but the same may be renewed for another
year upon the filing of a proper application within a period of
sixty (60) days prior to the expiration of the existing waiver or
suspension.
SEC. 2. Waiver or Suspension, Existing Housing Plan.—An
employer and/or employee group who has an existing housing
plan as of the effectivity of Republic Act No. 7742 may apply with
the Fund for waiver or suspension of coverage. Such waiver or
suspension may be granted by the President of the Fund on the
basis of verification that the waiver or suspension does not
contravene any

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Yazaki Torres Manufacturing, Inc. vs. Court of Appeals

effective collective bargaining or other existing agreement and


that the features of the plan or plans are superior to the Fund and
continue to be so. The certificate of waiver or suspension of
coverage issued therein shall only be for a period of one (1) year
but the same may be renewed for another year upon the filing of a
proper application within a period of sixty (60) days prior to the
expiration of the existing waiver or suspension.
xxx
SEC. 4. Effects of Waiver or Suspension, Existing Provident or
Retirement/Housing Plan.—Waiver or suspension of coverage
granted to an employer under Sections 1 and 2 of this Rule shall
likewise apply to his employees who are members of the
employer’s private plan; Provided, That such members are not
member-borrowers of the Fund. A member-borrower shall
continue to pay and remit to the fund his monthly contributions
together with the employer contributions to be shouldered by him.
A member-saver may opt to remain in good standing by remitting
to the Fund his monthly contributions with or without employer
contribution.
Employees who are non-members of the employer’s private
plan at the time of the certificate of waiver or suspension of
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coverage is granted shall continue to be mandatorily covered by


the Fund and their employer is required to set aside and remit to
the Fund the employee contributions together with the employer
contributions.

Yazaki Torres Manufacturing, Inc., petitioner herein, a


corporation organized under Philippine laws, applied for
and was granted by the HDMF a waiver from the Fund
coverage for the period from January 1 to December 31,
1995. The HDMF found that petitioner’s retirement plan
for its employees is superior to that offered by the Fund.
On September 1, 1995, the HDMF Board of Trustees
amended Rule VII of the Rules and Regulations
implementing R.A. No. 7742. The amended Rule provides:

SEC. 1. Waiver or Suspension Because of Existing


Provident/Retirement and Housing Plan.—An employer with a
plan providing both for a provident/retirement and housing
benefits for all his employees and existing as of December 14,
1980, the effectivity date of Presidential Decree No. 1752, may
apply with the Fund

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Yazaki Torres Manufacturing, Inc. vs. Court of Appeals

for waiver or suspension of the coverage. The


provident/retirement aspect of the plan must be qualified under
Republic Act No. 4917 and actuarially determined to be sound
and reasonable by an independent actuary duly accredited by the
Insurance Commission. The provident/retirement and housing
benefits as provided for under the plan must be superior to
the provident/retirement and housing benefits offered by
the Fund.
Such waiver or suspension may be granted by the Fund on the
basis of actual certification that the waiver or suspension does not
contravene any collective bargaining agreement, any other
existing agreement or clearly spelled out management policy and
that features of the plan or plans are superior to the Fund and
continue to be so.
Provided, further, That the application must be endorsed by
the labor union representing a majority of the employees or in the
absence thereof by at least a majority vote for all the employees in
the said establishment in a meeting specifically called for the
purpose; Provided, furthermore, That such a meeting be held or
conducted under the supervision of an authorized representative
from the Fund.
The certificate of waiver or suspension of coverage issued
herein shall only be for a period of one (1) year effective upon
issuance thereof. No certificate of waiver issued by the President
of the Fund shall have retroactive effect. Application for renewal
must be filed within sixty (60) days prior to the expiration of the
existing waiver or suspension and such application for renewal
shall only be granted based on the same conditions and
requirements under which the original application was approved.

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Pending the approval of the application for waiver or


suspension of coverage or the application for renewal, the
employer and his covered employees shall continue to be
mandatorily covered by the Fund as provided for under Republic
Act No. 7742.
xxx
SEC. 3. Effects of Waiver or Suspension; Existing Provident or
Retirement/Housing Plan.—Waiver or suspension of coverage
granted to an employer under Section 1 shall likewise apply to his
employees who are members of the employer’s private plan;
Provided, That such members are not member-borrowers of the
Fund. A member-borrower shall continue to pay and remit to the
Fund his

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Yazaki Torres Manufacturing, Inc. vs. Court of Appeals

monthly contributions together with the employer contribution to


be shouldered by him. A member-saver may opt to remain in good
standing by remitting to the Fund his monthly contributions with
or without employer contributions. Notwithstanding the
certificate of waiver or suspension granted to the employer, it is
still the obligation of the employer to service this type of
contributing employee-member by deducting through salary
deductions and remitting to the Fund the contribution as required
herein.
Employees who are non-members of the employer’s private
plan at the time the certificate of waiver or suspension of coverage
is granted shall continue to be mandatorily covered by the Fund
and their employer is required to set aside and remit to the Fund
the employee contributions together with the employer’s required
contributions.
xxx

After its waiver from the Fund coverage lapsed, petitioner


applied for a renewal. The ground relied upon was once
again its “superior retirement plan” to that of the Fund.
On February 16, 1996, the HDMF Chief Executive
Officer disapproved petitioner’s application on the ground
that its retirement plan is not superior to that provided by
the Fund. Petitioner was then directed “to register its
employees with the Fund and to remit their monthly
contributions together with the mandatory employer’s
share.”
Petitioner interposed an appeal to the HDMF Board of
Trustees, but in a Resolution dated May 29, 1996, the
Board denied the appeal.
Thereupon, petitioner filed with the Court of Appeals a
petition for review, docketed as CA-G.R. SP No. 41487.
In a Decision dated February 5, 1997, the Court of
Appeals (Special Eighth Division) denied the petition,
holding that:

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“Petitioner contends that the existing rules and regulations


cannot be amended unless and until R.A. No. 7742 is likewise
amended and since the September 1, 1995 amendment on Rule
VII of the HDMF rules and regulations was beyond the 60-day
period required under Section 5 of R.A. No. 7742, the same is
invalid. To

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Yazaki Torres Manufacturing, Inc. vs. Court of Appeals

uphold these arguments would render the administrative agency


inutile to correct the rules and regulations duly promulgated by
it. A contario, such rules and regulations or orders may be
amended, modified or revoked to conform to the requirements of
the law or the demands of justice (Benito v. Public Service
Commission, 86 Phil. 624 [1950]; Raymundo Transportation Co. v.
Tanay Transit Co., 63 Phil. 1064 [1936]). The only limitation is
that the administrative regulations cannot extend the law and
amend a legislative enactment for settled is the rule that
administrative regulations must be in harmony with the
provisions of the law (Land Bank of the Philippines v. Court of
Appeals, 249 SCRA 149 [1995]). In case of discrepancy between
the basic law and an implementing rule or regulation, the former
prevails (Shell Philippines, Inc. v. Central Bank of the
Philippines, 162 SCRA 628 [1988]).
The September 1, 1995 amendment to the rules requiring both
provident/retirement and housing plans to the employees in order
that the employer may be granted a waiver or suspension of the
Pag-ibig Fund coverage is in harmony with WHEREAS clauses of
Presidential Decree No. 1752, thus:

WHEREAS, the Government, in pursuit of the Constitutional mandates


on the promotion of public welfare through ample social services, as well
as its humanist commitment to the interests of the working group, in
relation particularly to their need for decent shelter has established the
Home Development Mutual Fund, under Presidential Decree 1530, a
system of employee—employer contributions for housing purposes; and
WHEREAS, there is need to strengthen the Home Development
Mutual Funds and make it more effective both as savings generation and
home building program for the gainfully-employed members of the
Philippine society; (Emphasis supplied)

The governing law which is Section 19 of Pres. Decree No. 1752


states:

SEC. 19. Existing Provident/Housing Plans.—An employer and/or


employee—group who, at the time this Decree becomes effective have
their own provident and/or employee—housing plans, may register with
the Fund, for any of the following purposes:

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(a) For annual certification of waiver or suspension from coverage or


participation in the Fund, which shall be granted on the basis of
verification that the waiver or suspension does not contravene any
effective collective bargaining agreement and that the features of the
plan or plans are superior to the Fund or continue to be so; or
x x x      x x x      x x x

x x x The grant of the certification of waiver to the petitioner was


only for a specific period, i.e., from January 1, 1995 to December
31, 1995 but subject to the condition that the same may be
renewed for another year upon the filing of the proper application
within 60 days prior to the expiration of the existing waiver or
suspension. The grant is merely a privilege which the State in the
exercise of its police power has the right not to renew the same as
the exigency of the case warrants. After the lapse of the specified
period, the HDMF is not automatically required to enter another
contract with the petitioner as long as the latter applies for
renewal of certification. To reiterate, Section 1 of the original
HDMF rules, the law in force at the time of the granting of the
certification of waiver to the petitioner, provides “[s]uch waiver or
suspension may be granted by the President of the Fund on the
basis of verification that the waiver or suspension does not
contravene any effective collective bargaining or other existing
agreement and that the features of the plan or plans are superior
to the Fund and continue to be so.” The word “may” is merely
permissive and operates to confer discretion upon a party (Capati
v. Ocampo, 113 SCRA 794 [1982]). The disapproval of the
petitioner’s application for renewal of waiver from the Pag-ibig
Fund coverage was by reason that the petitioner’s retirement plan
was not superior to Pag-ibig Fund (Annex “D,” Petition, p. 30,
Rollo). It is well-settled principle that the finding of facts by the
administrative bodies which has acquired the expertise in the
field is entitled to great respect and, should not be disturbed on
appeal unless it is shown that it has patently misappreciated the
facts. Petitioner however failed to prove by sufficient evidence
that the findings
3
of the President of the Fund was patently
erroneous.”

_______________

3 Rollo, pp. 46-49, 52-53.

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Yazaki Torres Manufacturing, Inc. vs. Court of Appeals

Petitioner filed its Motion for Reconsideration, but it was


denied in a Resolution dated June 17, 1997.4
Hence, the instant petition for certiorari.
Petitioner contends that the Court of Appeals acted with
grave abuse of discretion in upholding the HDMF’s
Resolution denying petitioner’s application for renewal of
waiver of the Fund membership coverage; and in
confirming the authority of the HDMF to amend the
implementing Rules of the Fund. It claims that Section 5 of

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R.A. No. 7742 does not grant HDMF the power to amend
the implementing Rules and Regulations, contending that
“the power to make laws does not necessarily include the
power to alter or repeal the same.” Since the HDMF is
merely an administrative agency tasked to implement the
law, its authority to promulgate implementing Rules does
not include the power to amend or revise them.
It is a doctrine of long-standing that courts will not
interfere in matters which are addressed to the sound
discretion of the government agency entrusted with
regulation of activities coming under the special 5
and
technical training and knowledge of such agency. For the
exercise of administrative discretion is a policy decision
and a matter that best be discharged by 6
the government
agency concerned and not by the courts. In this case, there
is no showing that the HDMF arbitrarily, whimsically or
capriciously denied petitioner’s application for renewal of
its waiver. It conducted the necessary

_______________

4 What petitioner should have filed was a petition for review on


certiorari. Considering that this Court required private respondents to file
their comment on the petition, and in the interest of justice, the same is
given due course.
5 Republic v. Express Telecommunications Co., Inc., G.R. Nos. 147096 &
147210, January 15, 2002, 373 SCRA 316, 346, citing Concerned Officials
of the Metropolitan Waterworks & Sewerage System (MWSS) v. Vasquez,
240 SCRA 502 (1995).
6 First Lepanto Ceramics, Inc. v. Court of Appeals, G.R. No. 117680,
February 9, 1996, 253 SCRA 552, 558, citing Bureau Veritas v. Office of
the President, 205 SCRA 705 (1992).

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Yazaki Torres Manufacturing, Inc. vs. Court of Appeals

investigation, comparison, evaluation, and deliberation of


petitioner’s retirement plan vis-à-vis the Fund. This Court
thus holds that the Court of Appeals committed no grave
abuse of discretion amounting to lack or excess of
jurisdiction when it affirmed the denial of petitioner’s
application for renewal of waiver by the HDMF.
Moreover, the grant of waiver or exemption from the
coverage of the Fund is but a mere privilege granted by the
State. A privilege is a particular and peculiar benefit or
advantage enjoyed by a person, company,7 or class beyond
the common advantages of other citizens. Like any other
privilege or exemption, it may be withdrawn by the State
on a finding that the recipient is no longer entitled to it.
There is no provision whatsoever in R.A. No. 7742 or its
Implementing Rules and Regulations that the HDMF shall
automatically renew a waiver from the Fund coverage upon
an application for renewal. The task of determining

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whether such application should be granted is best


discharged by the HDMF, not by the courts. Absent a
showing that the denial of petitioner’s application by the
HDMF is tainted by caprice, arbitrariness, or despotism,
this Court will not interfere in the exercise of its discretion.
Petitioner claims that under the original Implementing
Rules and Regulations of the HDMF, superior retirement
plan and superior housing plan were separate and
alternative grounds for the waiver of the Fund coverage.
However, under the Amended Rules and Regulations,
superior retirement plan and superior housing plan are
joint requirements. Since petitioner does not have a
housing plan, this is the reason why its retirement plan
was not considered superior to that of the Fund. Hence, its
application for renewal of waiver was denied.
Consequently, it insists that the HDMF exceeded its
authority when it amended its original Rules and
Regulations.

_______________

7 BLACK’S LAW DICTIONARY (6th Ed. 1990) 1197.

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Yazaki Torres Manufacturing, Inc. vs. Court of Appeals

The legislative power is granted pursuant to Section 1,


Article VI of the Constitution which provides:

SEC. 1. The legislative power shall be vested in the Congress of


the Philippines which shall consist of a Senate and a House of
Representatives, except to the extent reserved to the people by the
provision on initiative and referendum.

The legislative power has been described 8


generally as the
power to make, alter, and repeal laws. The authority to
amend, change, or modify a law is thus part of such
legislative power. It is the peculiar province of the
legislature to prescribe general rules for the government of
society. However, the legislature cannot foresee every
contingency involved in a particular problem that it seeks
to address. Thus, it has become customary for it to delegate
to instrumentalities of the executive department, known as
administrative agencies, the power to make rules and
regulations. This is because statutes are generally couched
in general terms which express the policies, purposes,
objectives, remedies and sanctions intended by the
legislature. The details and manner of carrying out the law
are left to the administrative agency charged with its
implementation. In this sense, rules and regulations
promulgated by an administrative agency are the product
of a delegated power to create new 9 or additional legal
provisions that have the effect of law. Hence, in general,
rules and regulations issued by an administrative agency,

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pursuant to the authority conferred upon it by law, have 10


the force and effect, or partake of the nature, of a statute.

_______________

8 Occeña v. Commission on Elections, G.R. No. 52265, January 28,


1980, 95 SCRA 755, 759.
9 Victorias Milling Co., Inc. v. Social Security Commission, 114 Phil.
555, 558; 4 SCRA 627, 630 (1962).
10 Commissioner of Internal Revenue v. Solidbank Corp., G.R. No.
148191, November 25, 2003, 416 SCRA 436, 448, citing Victorias Milling
Co., Inc, v. Social Security Commission, supra.

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98 SUPREME COURT REPORTS ANNOTATED


Yazaki Torres Manufacturing, Inc. vs. Court of Appeals

The law delegated to the HDMF the rule-making power


since this is necessary for the proper exercise of its
authority to administer the Fund. Following the doctrine of
necessary implication, this grant of express power to
formulate implementing rules and regulations must
necessarily include the power to amend, revise, alter, or
repeal the same.
WHEREFORE, the petition is DISMISSED. The
Decision and Resolution of the Court of Appeals dated
February 5 and July 17, 1997 in CA-G.R. SP No. 41487 are
AFFIRMED IN TOTO. Costs against petitioner.
SO ORDERED.

          Puno (Chairperson), Corona, Azcuna and Garcia,


JJ., concur.

Petition dismissed, judgment and resolution affirmed in


toto.

Notes.—It is a settled rule of construction that where a


general power is conferred or duty enjoined, every
particular power necessary for the exercise of the one or the
performance of the other is also conferred. The power of the
Department Secretary to promulgate internal rules of
administrative procedure is lodged in him by necessary
implication as part of his express power to “promulgate
rules and regulations necessary to carry out department
objectives, policies, functions, plans, programs and
projects.” (Valencia vs. Court of Appeals, 401 SCRA 666
[2003])
The doctrine of necessary implication states that what is
implied in a statute is as much a part thereof as that which
is expressed—every statute is understood, by implication,
to contain all such provisions as may be necessary to
effectuate its object and purpose, or to make effective
rights, powers, privileges or jurisdiction which it grants,
including all such collateral and subsidiary consequences

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as may be fairly and logically inferred from its terms.


(Atienza vs. Villarosa, 458 SCRA 385 [2005])

——o0o——

99

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