LCA LINES | Volume II, Issue No. 12

8/12/2019 LCA LINES | Volume II, Issue No. 12

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BIR ISSUANCES FOR THE MONTH OF DECEMBER

DECEMBER 2009VOLUME II, ISSUE No. 12

L C AL C AL C A

LINESLINESLINES

Inside this issue:

BIR issuancesfor the monthof December(continuation)

2

SupremeCourt Issu-ances

8

RA 9775 10

RA 9729 13

Jurisprudence 14

JLs Corner 21

REVENUE REGULA-TIONS NO. 9-2009

The general require-ments for ElectronicBookkeeping arethe following:

1. A taxpayer shallmaintain all recordsthat are necessaryfor the determina-tion of the correcttax liability under

Section 32 of theNIRC. All requiredrecords must bemade available onrequest by theCommissioner ofInternal Revenue onits authorized repre-sentatives.

2. If a taxpayer re-tains records re-quired to be keptunder this regula-

tion in both elec-tronic and hard-copy formats, thetaxpayer shall makethe records availa-ble to the Bureau ofInternal Revenue inelectronic formatupon request of theCommissioner or itsauthorized repre-

sentative.

3. Nothing in thisregulation shall beconstrued to prohib-it a taxpayer fromdemonstrating taxcompliance withtraditional hard-copy documents orreproductions there-of, in whole or inpart, whether or notsuch taxpayer alsohas retained or has

the capability toretain records onelectronic or otherstorage media inaccordance with thisregulation. Howev-er, this subsectionshall not relieve thetaxpayer of the obli-gation to complywith the previoussubsection of thisregulation.

The requirementsfor ElectronicRecordkeeping forLarge Taxpayers arethe following:

1. All Large Taxpay-ers classified underRevenue Regula-tions No. 1-98 arerequired to maintain

Computerized Ac-

counting System(CAS) or compo-nents thereof. Ac-cordingly, all booksof accounts and ac-counting recordsshall be in electronicformats.

2. All Large Taxpay-ers who are cur-rently maintainingtheir books of ac-counts and account-

ing records in mutu-al form are requiredto register theirComputerized Ac-counting Systemnot later than De-cember 31, 2009.

3. A Large Taxpayerusing commercialand/or customizedsoftware to keepbooks and recordselectronically is not

relieved of the re-sponsibility to keepadequate electronicrecords because ofdeficiencies in thesoftware.

The requirementsfor ElectronicRecordkeeping ofElectronic Records:

A. General Require-ments

1. Electronic recordsused to establish taxcompliance shall con-tain sufficient trans-action-level detailinformation so thatthe details underly-ing the electronicrecords can be iden-tified and madeavailable to the Bu-

reau of Internal Rev-enue upon request. Ataxpayer has discre-tion to discard dupli-cated records andredundant infor-mation provided itsresponsibilities underthis regulation aremet.

2. At the time of anexamination, theretained records

must be capable ofbeing retrieved andconverted to astandard record for-mat in accordancewith Revenue Regu-lations No. 16-2006.

3. Taxpayers are notrequired to constructelectronic records


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other than those createdin the ordinary course ofbusiness. A taxpayer whodoes not create the elec-tronic equivalent of atraditional paper docu-ment in the ordinarycourse of business is notrequired to constructsuch a record for taxpurposes.

B. Electronic Data Inter-change Requirements

1. Where a taxpayer us-es electronic data inter-change processes andtechnology, the level ofrecord detail, in combi-nation with other recordsrelated to the transac-tions, must be equivalentto that contained in anacceptable paper record.For example, the re-tained records shouldcontain such informationas vendor name, invoicedate, product descrip-tion, quantity purchased,price, amount of tax,indication of tax status,shipping detail, etc.Codes may be used toidentify some or all ofthe data elements, pro-vided that the taxpayershall provide a methodwhich would allow theBureau of Internal Reve-nue to convert the codedinformation into an au-ditable data.

2. The taxpayer maycapture the informationnecessary to satisfy theprevious requirement atany level within the ac-counting system andneed not retain the origi-nal EDI transaction rec-ords provided the audittrail, authenticity, and

BIR ISSUANCES

Page 2 L C A LINES

integrity of the retainedrecords can be estab-lished.

C. Electronic Data Pro-cessing Systems Re-quirements

1. The requirements foran electronic data pro-cessing accounting sys-tem should be similar tothat of a manual ac-counting system, in thatan adequately designedaccounting systemshould incorporate meth-ods and records that willsatisfy the requirementsof this regulation.

2. The information that isrequired to re-create asequence of events relat-ed to a business transac-tion must include suffi-cient detail to substanti-ate summarized infor-mation. The electronicrecords must show anaudit trail from thesource information. Theelectronic records mustshow an audit trail fromthe source document(s),whether paper or elec-tronic, to the summa-rized financial accounts.In addition the trail mayalso include a number oflinks to other associatedprocesses and eventssuch as front-end sys-tems (e-commerce, Point

of Sale), receipts, pay-ments, and stock inven-tories, all of which mayhave their own systemaudit trails. It is the tax-payers responsibility toensure the reliability andreadability of thesetransaction records.

3. Taxpayers keeping

electronics records mustalso retain source docu-ments. A source docu-ment includes items suchas sales invoices, pur-chase invoices, cash reg-ister receipts, formal writ-ten contracts, credit cardreceipts, delivery slips,deposit slips, work orders,dockets, cheques, bankstatements, tax returns,and could also includeemails and other generalcorrespondence whererelevant for tax purposes.

D. Business process Infor-mation

1. Upon the request of theCommissioner of InternalRevenue or its authorizedrepresentative, the tax-payer shall provide a de-scription of the businessprocess that created theretained records. Suchdescription shall includethe relationship betweenthe records and the taxdocuments prepared bythe taxpayer and themeasures employed toensure the integrity of therecords.

2. The taxpayer shall becapable of demonstrating,among others, the follow-ing:

A. The functions beingperformed as they re-late to the flow of datathrough the system;B. The internal controlsused to ensure accurateand reliable processing;andC. The internal controlsused to prevent unau-thorized addition, alter-

ation, or deletion ofretained records

3. The documentationrequired for electronicrecords retained shall,among others, includethe following:

A. Record formats orlayouts;B. Field definitions(including the meaningof all codes used torepresent information);C. File descriptions

(e.g., dataset name);andD. Detailed charts ofaccounts and accountdescriptions.

4. The following fieldsare mandatory for thefollowing:

4.1. General Ledger-Date-Reference-Brief Description/Explanation

-Account Title (OrAccount Code ifChart of AccountsMaster file is availa-ble)

-Debits-Credits

4.2. General Journal-Date-Reference-Brief Description/Explanation

-Account Title (Or

Account Code ifChart of AccountsMaster file is availa-ble)

-Debits-Credits

4.3. Sales journal-Date-Customers TIN


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1. The taxpayers com-puter hardware or soft-ware shall accommodatethe extraction and con-version of retained elec-tronic records in accord-ance with Revenue Regu-lations No. 16-2006.

2. Records that are re-tained by copying orbacking up the data toanother medium must bedone so in accordancewith the media manufac-

turers suggested proce-dures with particular at-tention given to the sug-gested shelf life of themedium. Informationrecorded on rewritablemedia such as computerhard disks must bebacked up on CD-R/DVD-R, tape or other suitablemedium to avoid acci-dental loss, deletion, orerasure of the recordedinformation. The media

containing the recordedinformation must bestored in an environmentfree hazards that couldaffect the media, such asmagnetic fields, directlight, excessive moisture,and temperature ex-tremes.

3. It is the taxpayersresponsibility to ensurethat current and/or priorperiod data files have

been archived or backedup properly and ade-quately to meet booksand recordkeeping obli-gations.

4. When backups of elec-tronic files are beingused as a method of rec-

ord retention, proceduresmust be put in place to:

A. Ensure that thebacked up data filescan be restored in asformat that will beaccessible and usea-ble by the BIR.

B. Ensure that theintended data is ac-tually being writtento the medium beingused.

C. Ensure that thebackup proceduredoes not overwriteprior period backupsor logs, destroyingthem.

D. Ensure that themedium is uniquelylabeled in a readilyidentifiable manner.E. Ensure that a logis prepared to identi-fy what records and

data have been rec-orded on such medi-um.

E. Ensure that thelog states how longthis medium is to beretained before it canbe overwritten ordiscarded.

F. Ensure that thename of the softwareand the version num-

ber used to createthe records are notedon the medium labeland in the log.

G. Ensure that theproper electronicbusiness system soft-ware and operatingsystem are availableto restore the backed

Page 3VOLUME II, ISSUE No. 12

up files to their orig-inal environment.

H. Ensure that thereis periodic testing ofbacked up recordsto verify that thebacked up recordscan be restored intoan electronicallyreadable format.

The Electronic RecordsLocation Requirementsare as follows:

1. Records must be keptat the taxpayers placeof business in the Philip-pines or another placedesignated by the Com-missioner of InternalRevenue and must, up-on request, be madeavailable to RevenueOfficers of the BIR foraudit purposes duringbusiness hours. Recordskept outside the Philip-pines and accessedelectronically from thePhilippines are not con-sidered to be records inthe Philippines. Howev-er, where records aremaintained electronical-ly in a location outsidethe Philippines, the BIRmay accept a copy ofthe records, providedthese are made availa-ble in the Philippines inan electronically reada-ble and useable formatfor BIR officials andthey contain adequatedetails to support thetax returns filed withthe BIR.

2. All retained recordsmust be clearly labeledand stored in a secure

BIR ISSUANCES

-Customers Name(Or Customer Codeif Customer Masterfile is available)-Address (Not neces-sary if CustomerMaster file is availa-ble)

-Description-Reference/ Docu-ment No./ SalesInvoice

-Amount-Discount-VAT amount(Output tax)

-Net Sales

4.4. Purchase Journal-Date-Suppliers TIN-Vendors Name (OrVendors Code ifVendor Master fileis available)

-Address (Not nec-essary if VendorsMaster file is avail-able)

-Description

-Reference/ docu-ment No./ SalesInvoice

-Amount-Discount-VAT Amount (InputTax)

-Net Purchases

4.5. Inventory Book-Date-Product Name (OrProduct Code ifProduct Description

Master file is avail-able)

-Description-Unit-Price per unit-Amount

The Electronic RecordsMaintenance Require-ments are as follows:


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BIR ISSUANCES

Page 4 L C A LINES

environment in the Philip-pines. Authorization tomaintain records else-where may be granted,subject to such terms andconditions as the Com-missioner of Internal Rev-enue may specify in writ-ing. These terms and con-ditions which are identicalto records maintained inthe Philippines and whichapply to electronic rec-ords, specify that recordsstored outside the Philip-pines are to be made

available to officials of theBIR for audit purposesduring business hours inaccordance with the pro-vision of National InternalRevenue Code as amend-ed and this Revenue Reg-ulations. The authoriza-tion may be obtained bywriting to Office of theCommissioner of InternalRevenue or its authorizedrepresentative.

3. Normally a back-up ofthe electronic records arestored at a site other thanthe business location forsecurity and precaution-ary purpose (in case offire, flood, theft, or othercause), the BIR requiresthis business practice andback-up copies must bemaintained at a locationwithin the Philippines.

4. It is the taxpayers re-sponsibility to produce therecords for inspection nomatter where those rec-ords are located.

5. Businesses that oper-ate via the Internet andare hosted on a serverlocated outside of the

Philippines should be cog-nizant of their responsibil-ity to maintain their rec-ords within the Philip-pines. Internet basedbusinesses have the sameresponsibilities related torecord retention as allother business operations.

The access and submis-sion of electronic recordswill be provided in one ormore of the followingmanners:

1. The taxpayer may ar-range to provide the BIRwith the hardware, soft-ware and personnel re-sources to access theelectronic records.

2. The taxpayer may ar-range for a third-party toprovide the hardware,software and personnelresources necessary toaccess the electronic rec-ords.

3. The taxpayer may con-vert the electronic recordsto a standard record for-mat specified by RevenueRegulations No. 16-2006,including copies of files,on a magnetic mediumthat is agreed to by theBIR. The original files(unconverted files or filesin its native form) shouldalso be submitted alongwith copies of the con-verted files.

4. The taxpayer and theBIR may agree on othermeans of providing accessto the electronic records.

Microfilm, microfiche orother storage-only imag-ing systems shall com-ply, among others, withthe following require-ments:

1. Documentation estab-lishing the proceduresfor converting the hard-copy documents to mi-crofilm, microfiche orother storage-only imag-ing system must bemaintained and madeavailable on request.

2. Procedure must beestablished for the effec-tive identification, pro-cessing, storage andpreservation of thestored documents andfor making them availa-ble for the period theyare required to be re-tained.

3. A person in authoritywithin the organization

has confirmed in writingthat the program will bepart of the usual andordinary activity of theorganizations business.The said person mustexecute a sworn state-ment that the originalsource documents havebeen converted strictly inaccordance with thestandards and verified toinsure its integrity andcompleteness.

4. Upon request by theCommissioner of InternalRevenue or its duly Au-thorized Representative,a taxpayer must providefacilities and equipmentfor reading, locating, andreproducing any docu-ments maintained on


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BIR ISSUANCES


microfilm, microfiche orother storage-only imag-ing system.

5. When displayed onsuch equipment or re-produced on paper, thedocuments must exhibita high degree of legibilityand readability.

6. All data stored on mi-crofilm, microfiche orother storage-only imag-ing systems must bemaintained and arranged

in a manner that permitsthe location of any par-ticular record.

7. A logbook shall bemaintained to include,among others, the fol-lowing information:

A. The date of theimaging

B. The signatures of

the persons authoriz-ing and performingthe imaging

C. A description ofthe records imaged;and

D. Whether sourcedocuments are de-stroyed or disposedof after imaging andthe date a sourcedocument was de-

stroyed or disposedof.

8. Prior permit from theBIR is required beforeuse of microfilm, micro-fiche and other storage-only imaging systems.

The effect on hard-copy

recordkeeping require-ments shall be the fol-lowing:

1. Except as otherwiseprovided in this section,the provisions of thisregulation do not relievetaxpayers of the respon-sibility to retain hard-copy records that arecreated or received inthe ordinary course ofbusiness as required byexisting laws and regula-tions.

2. If hard-copy recordsare not produced or re-ceived in the ordinarycourse of transactingbusiness, such hard-copyrecords need not be cre-ated.

3. Hard-copy recordsgenerated at the time ofa transaction using acredit or debit card mustbe retained unless all the

details necessary to de-termine correct tax liabil-ity relating to the trans-action are subsequentlyreceived and retained bythe taxpayer in accord-ance with this regulation.

3. Computer printoutsthat are created for vali-dation, control, or othertemporary purposesneed not be retained.

4. Nothing in this sectionshall prevent the BIRfrom requesting hard-copy printouts in lieu ofretained electronic rec-ords at the time of ex-amination.

All records required to beretained under this regu-

lation shall be preservedpursuant to Section 235of the NIRC unless theBIR has provided in writ-ing that the records areno longer required.

All computerized books

of accounts, electronic

record keeping, electron-

ic business systems and

components thereof shall

be registered with the

Bureau of Internal Reve-

nue in accordance withRevenue Memorandum

Order No. 29-2002 and

all other pertinent issu-

ances.

REVENUE REGULA-TION NO. 10-2009

These Regulations arehereby promulgatedproviding for amend-ments to Revenue Regu-lations No. 8 -2009,where sub -paragraph(W) should be sub -paragraph (X), and otherconcerns.

The amendments to Sec.2.58 of Revenue Regula-tions No. 2-98, asamended are the follow-ing:

1.Those not engaged intrade/business or prac-tice of profession for alimited time during theelection period designat-ed as withholding agentpursuant to SectionSec.2.57.3 (D) and re-quired to withhold in-

come payment under2.57.2 (X) using onlyAlphanumeric Tax CodeWithholding Tax Individ-ual (WI) 680 or With-holding Tax Corporation(WC) 680 in the remit-tance of taxes withheldusing Monthly Remit-tance Return on Credita-ble Withholding Taxes atSource (BIR Form No.1601-E) shall not be re-quired to attach theMonthly Alphalist of Pay-ees (MAP).

2. The payor is requiredto file with the BIR -Large Taxpayers Assis-tance Division, LargeTaxpayer District Officeor Excise Taxpayers As-sistance Division, or theRevenue District Officewhere the payor/employer is registered asWithholding Agent, on orbefore March 1 of thefollowing year in which

payments were made, anAnnual Information Re-turn of Creditable TaxesWithheld (Expanded)/Income Payments Ex-empt from WithholdingTax (BIR Form No.1604E) except withhold-ing agents for a limitedtime during the electionperiod under Sec.2.57.3(D) who are not engagedin business or practice ofprofession and using on-

ly Alphanumeric TaxCode Withholding TaxIndividual (WI) 680 orWithholding Tax Corpo-ration (WC) 680 whosedue date shall be withinthirty (30) days after theday of election, and onor before January 31 ofthe said year an Annual


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SUPREME COURT ISSUANCES

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Philippine Association ofLocal Treasurers and As-sessors, Inc. (PHALTRA)signed on 16 December2009 at the BIR NationalTraining Center Auditori-um.

Based on the MOA, theabovementioned partiesagreed on the following:

A. The BIR shall:

i. Establish TaxpayerService Areas/BIR

help desks in city/municipal halls everyJanuary of each yearduring the time ofapplication or renewalfor Mayors Permitsand Business Licens-es, for them to assisttaxpayers in their reg-istration with the BIRand payment of regis-tration fees; issueTaxpayer Identifica-tion Numbers (TINs)

and respond to que-ries from taxpayers.

ii. Utilize the date pro-vided by Local Gov-ernment Units (LGUs)and BGLF in its pro-gram, to augment therevenue base and in-crease tax collectionefficiency.

iii. Share informationwith the local treasur-

ers on the names andaddresses of the reg-istered taxpayers.

iv. Improve the coop-eration and coordina-tion with the local as-sessors in the updat-ing the zonal valueson real properties.

v. Recognize the ef-forts of the most co-operative treasurersand assessors whohave given the mostcooperation and ef-forts in this under-taking, in appropri-ate awarding cere-monies to be orga-nized for this pur-pose.vi. Issue necessarycirculars and ordersto implement theprovisions of the

MOA.

B. The BGLF shall:

i. Issue the neces-sary circulars or or-ders to implementthe provisions of theMOA.

ii. Disseminate andcirculate the same toall municipal, cityand provincial treas-

urers all over thecountry to ensure itsuniform and effectiveimplementation.

C. All Local GovernmentUnit Treasurers and/orAssessors through PHAL-TRA shall:

i. Require thepresentation of theCertificate of Regis-tration (BIR FormNo. 2303) and cur-rent years annualRegistration Fee (BIRForm No. 0605), bypersons and businessestablishments se-curing or renewingbusiness permits.

actions.Based on the MOA, theLTO and the BIR agreedthat the requirement TINsubmission under Execu-tive Order (E.O.) No. 98shall not cover the fol-lowing individuals for thepurpose of transactingbusiness with the LTO:

A. Accredited foreignpersonnel of diplomaticmissions and interna-tional organizations;

B. Individuals not en-gaged in business,such as minors, stu-dents, househelpers,housewives,balikbayans and thelike, provided that theyare securing a nonpro-fessional drivers li-cense;

C. Foreigners such astourists, foreign stu-dents, foreign mission-

aries and the like; and

D. Professional mem-bers or religious organ-izations, such aspriests, pastors, nuns,lay ministers, mission-aries and the like.

REVENUE MEMORAN-DUM CIRCULAR NO.

71-2009

Issued on 17 December2009, the circular pub-lishes the full text of theMemorandum of Agree-ment (MOA) between theBureau of Internal Reve-nue (BIR) and the Bu-reau of Local Govern-ment Finance (BLGF) and

Information Return onIncome Taxes Withheldon Compensation andFinal Withholding Taxes(BIR Form No. 1604-CF).


63-2009

Issued on 12 November2009, the circular pro-

vides questions and an-swers relative to theCreditable WithholdingTax (CWT) on campaignexpenditures in Reve-nue Regulation No. 8-2009.

It provides for the with-holding of a 5% CWT bycandidates of local andnational elections, theirpolitical parties andtheir contributors on

their payments to theirsuppliers of campaign-related goods and ser-vices.


65-2009

The circular publishesthe full text of the Mem-orandum of Agreement

(MOA) between theLand TransportationOffice (LTO) and theBureau of Internal Rev-enue (BIR) signed on 25November 2009 clarify-ing the coverage of sub-mission of the TaxpayerIdentification Number(TIN) in relation to theprocessing of LTO trans-


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ii. Require that thepresentation of TINbe part of the re-quirements in all ap-plications for govern-ment permit, license,clearance, officialpaper or any othersimilar document asprescribed under Ex-ecutive Order No.98, Series of 1999.

iii. Share informationwith the BIR on thedeclared amount of

gross sales/grossreceipt and otherdata of taxpayersbase.

iv. Improve the co-operation and coordi-nation with the BIRin updating zonalvalues on real prop-erties.

REVENUE MEMORAN-DUM CIRCULAR NO.72-2009

Issued on 21 December2009 reiterates RevenueMemorandum Circular(RMC) No. 52-2005 im-posing the Value-AddedTax (VAT) on the TollwayOperators, as premisedunder Section 108(A) ofthe National Internal

Revenue Code.

Based on the exceptionprovided under Section119 of the Tax Code, asamended by Republic ActNo. 9337, the servicesbeing rendered by theTollway Operators aresubject to VAT since saidservices do not fall under

the exceptions specifiedunder Section 119 of theTax Code. The tax is-sues, including VAT of allTollway Operators for theyears 2007 to 2009 shallbe under the jurisdictionof the Task Force on Toll-way Operators createdpursuant to RevenueSpecial Order No. 617-2009.

All Tollway Operators are

required to follow the

invoicing/receipting for-

mat prescribed in RMC

No. 40-2005.

REVENUE MEMORAN-DUM ORDER NO. 33-

2009

RMO No. 33-2009 is is-sued to facilitate theproper identification andmonitoring of certain taxpayments subject toCreditable ExpandedWithholding Tax pursu-

ant to Revenue Regula-tion No. 8-2009 subject-ing to Creditable With-holding Tax the IncomePayments made by Politi-cal Parties and Candi-dates of Local and Na-tional Elections of Alltheir Campaign Expendi-tures and Income Pay-

ments made by an Indi-vidual or Juridical Personforming part of their Cam-paign Contributions toCandidates of Local andNational Elections and toPolitical Parties. The fol-lowing ATCs are herebycreated:

KIND OF TAX LEGALBA-SIS/REA-SONS

BIRFORMNO.

ATC TAXRATE

Subject toCreditableWithholdingTaxIncome pay-ments made byPolitical Partiesand Candidatesof Local andNational Elec-tions of all theirCampaign Ex-

penditures, andIncome Pay-ments made byIndividuals orJuridical Per-sons for theirPurchases ofgoods and ser-vices intendedto be given ascampaign con-tribution to po-litical partiesand candidates:i) Individualii) Corporate

RR No.8-2009

1601E

WI680WC680

5%5%


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The memorandum is is-

sued to further enhance

the procedures of theLGU Assurance System

ensuring that those

found not registered with

the BIR shall be assisted

for them to conveniently

comply with tax laws,

rules, and regulations

and other related issu-

ances and to direct all

government agencies,

instrumentalities, localgovernment units, and

government-owned and/

or controlled corpora-

tions to include the Tax

Identification Number

(TIN) as one of the re-

quirement in all applica-

tion for all government

permits, license, clear-

ance, official paper or

other similar documents.

Page 8 L C A LINES

BIR ISSUANCE

This activity shall be con-

cluded in July 2010.

REVENUE MEMORAN-

DUM ORDER 41-2009

Issued on 23 December

2009, the memorandum

order discusses the imple-

mentation of the guide-

lines on the Memorandum

of Agreement between

the Bureau of Internal

Revenue, Bureau of Local

Government Finance and

the Philippine Associationof Local Treasurers and

Assessors on the coordi-

nation and cooperation to

improve the services to

the taxpayers and to en-

hance tax collection and

administration. The

memorandum provides

guidelines to increase tax

base and revenue using

records, documents, dataand information culled

from the local treasurer

and assessors office.

REVENUE MEMORAN-DUM ORDER 35-2009

The memorandum order

is issued to lay down the

task of the Regional Di-

rector with regard to Pro-

ject Iboto Mothe Re-

gional Director shall un-

dertake the necessary

communication and con-

duct information cam-

paign, and submit month-

ly reports to the Task

Force.The memorandum like-

wise laid down the duty of

the Revenue District Of-

ficer to ensure the regis-

tration of all political par-

ties, candidates of local

and national elections and

campaign contributors

within their respective

jurisdiction. The Revenue

District Officer is taskedto coordinate with COME-

LEC with regard to the

issuance of the Applica-

tion of Registration and the

filing of Certificate of Can-

didacy of candidates in the

upcoming elections.

REVENUE MEMORAN-DUM ORDER 40-2009


lays down the policies and

procedures prescribing the

guidelines and procedures

in the observation of in-

ventory taking of good for

purposes of determining

the 2009 ending inventory.


also lists down the reports

which shall be prepared

and submitted by the Rev-

enue District Officer.

For the purpose of this ac-

tivity, the taxable year

2009 shall cover the 2009

calendar year and all fiscal

years ending on the first

six (6) months of 2010.


A.M. No. 08-8-7-SCTHE RULE OF PROCE-

DURE FOR SMALLCLAIMS CASES

R E S O L U T I O N

Sections 11, 12, 14, 16,

21, and 22 of the Rule of

Procedure for Small

Claims Cases, are

AMENDED to read as fol-

lows:

Section 11. Response. -

The defendant shall file

with the court and serve

on the plaintiff a duly ac-

complished and verifiedResponse within a non-

extendible period of ten

(10) days from receipt of

summons. The Response

shall be accompanied by

certified photocopies of

documents, as well as affi-

davits of witnesses and

other evidence in support

thereof. No evidence shall

be allowed during the

hearing which was not

attached to or submittedtogether with the Re-

sponse, unless good

cause is shown for the

admission of additional

evidence.

THE GROUNDS FOR THE

DISMISSAL OF THE

CLAIM, UNDER RULE

16 OF THE RULES OF

COURT, SHOULD BE

PLEADED.

Section 12. Effect ofFailure to File Response.

- Should the defendant

fail to file his Response

within the required peri-

od, AND LIKEWISE

FAIL TO APPEAR AT

THE DATE SET FOR

HEARING, THE COURT


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SHALL RENDER

JUDGMENT ON THE

SAME DAY, AS MAY

BE WARRANTED BY

THE FACTS.

SHOULD THE DE-

FENDANT FAIL TO

FILE RESPONSE

WITHIN THE RE-

QUIRED PERIOD BUT

APPEARS AT THE

DATE SET FOR HEAR-

ING, THE COURT

SHALL ASCERTAIN

WHAT DEFENSE HE

HAS TO OFFER AND

PROCEED TO HEAR,

MEDIATE OR ADJUDI-

CATE THE CASE ON

THE SAME DAY AS IF

A RESPONSE HAS

BEEN FILED.

Section 14. Prohibited

Pleadings and Motions.-

The following pleadings,

motions, or petitions

shall not be allowed in

the cases covered by

this Rule:

(a) MOTION TO

DISMISS THE

COMPLAINT;

(b) Motion for a bill

of particulars;

(c) Motion for new

trial, or for recon-

sideration of a judg-

ment, or for reopen-

ing of trial;

(d) Petition for relief

from judgment;

(e) Motion for ex-

tension of time to

file pleadings, affi-

davits, or any other

paper;

(f) Memoranda;

(g) Petition for certio-

rari, mandamus, or

prohibition against

any interlocutory or-der issued by the

court;

(h) Motion to declare

the defendant in de-

fault;

(i) Dilatory motions

for postponement;

(j) Reply;

(k) Third-party com-

plaints; and

(l) Interventions.

Section 16.Appearance.

- The parties shall appear

at the designated date of

hearing personally.

APPEARANCE

THROUGH A REPRE-

SENTATIVE MUST

BE FOR A VALID

CAUSE. THE REPRE-

SENTATIVE OF AN

INDIVIDUAL-PARTY

MUST NOT BE A

LAWYER, AND MUST

BE RELATED TO OR

NEXT-OF-SKIN OF

THE INDIVIDUAL-

PARTY. JURIDICAL

ENTITIES SHALL

NOT BE REPRE-

SENTED BY A LAW-

YER IN ANY CAPAC-

ITY.

THE REPRESENTATIVE

MUST BE authorized un-

der a Special Power of

Attorney to enter into an

amicable SETTLEMENT OF

THE DISPUTE and to en-

ter into stipulations or

admissions of facts and of

documentary exhibits.

Section 21. HEARING.-

At the hearing, the judgeshall EXERT EFFORTS

TO BRING THE PAR-

TIES TO AN AMICABLE

SETTLEMENT OF THEIR

DISPUTE. Any settle-

ment or resolution of the

dispute shall be reduced

into writing, signed by the

parties and submitted to

the court for approval.

SETTLEMENT DISCUS-

SIONS SHALL BE

STRICTLY CONFIDEN-

TIAL AND ANY REFER-

ENCE TO ANY SETTLE-

MENT MADE IN THE

COURSE OF SUCH DIS-

CUSSIONS SHALL BE

PUNISHABLE BY CON-

TEMPT.

Section 22. Failure of

SETTLEMENT. - If EF-

FORTS AT SETTLEMENT

FAIL, the hearing shall

proceed in an informal

and expenditious manner

and BE terminated within

one (1) day. EITHER

PARTY MAY MOVE IN

WRITING TO HAVE AN-

OTHER JUDGE HEAR

AND DECIDE THE CASE.

THE REASSIGNMENT

WITH EXISTING ISSU-

ANCES.

THE REFERRAL BY THE

ORIGINAL JUDGE TO

THE EXECUTIVE JUGDE

SHALL BE MADE WITH-

IN THE SAME DAY THE

MOTION IS FILED AND

GRANTED, AND BY THE

EXECUTIVE JUDGE TO

THE DESIGNATED

JUDGE WITHIN THESAME DAY OF THE RE-

FERRAL. THE NEW

JUDGE SHALL HEAR

AND DECIDE THE CASE

WITHIN FIVE (5)

WORKING DAYS FROM

RECEIPT OF THE OR-

DER OF REASIGNMENT.

A. M. NO. 99-8-09-SCAMENDED RULES ONWHO SHALL RESOLVEMOTIONS FOR RECON-SIDERATION OF DECI-

SIONS OR SIGNEDRESOLUTIONS INCAS-ES ASSIGNED TO THE

DIVISION OF THECOURT

This Resoltion supersedes

the Resolution promulgat-ed on February 15, 2000.

The new rules on who

resolve motions for recon-

sideration of Decisions or

signed Resolutions in cas-

es assigned to the Divi-

sions of the Court are as

follows:

1. Motions for reconsid-

eration/clarification of

a Decision or of asigned Resolutions in

cases shall be acted

upon by the Ponente

and the other Mem-

bers of the Division,

whether special or

regular, who partici-

pated in the rendition


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of the Decision or

signed Resolution

sought to be reconsid-

ered, irrespective ofwhether or not such

members are already

in other Divisions at

the time the motion

for reconsideration/

clarification is filed or

acted upon; for this

purpose, they shall be

deemed constituted

as a Special Division

of the Division to

which the Ponente

belonged at the time

of promulgation of the

Decision or the Signed

Resolution.

2. If the Ponente is dis-

qualified or has inhib-

ited himself/herself

from acting on the

motion for reconsider-

ation/clarification, he/

she shall be replaced

by another Justice

who shall be chosenby raffle from among

the remaining Mem-

bers of the Division

who participated in

the rendition of the

Decision or signed

Resolution and who

concurred therein. If

only one member of

the Court who partici-

pated and concurred

in the rendition of the

Decision or signed

Resolution remains,

he/she shall be desig-

nated as the Ponente.

3. If the Ponente retires

or is otherwise no

longer a Member of

the Court, a new Po-

nente for all his/her

Decision or signed

Resolution that may

be subject of motions

for reconsideration/

clarification shall bedesignated by raffle

from among the re-

maining Members of

the Division who par-

ticipated and con-

curred in the Decision

or signed Resolution.

In Decisions or signed

Resolutions of the re-

tired Ponentethat the

new Ponente did not

participate and concur

in another Ponente

shall be chosen by

raffle from among

those who participat-

ed and concurred in

the Decision or signed

Resolutions.

4. If a Member (not the

Ponente) retires or is

otherwise no longer a

Member of the

Court, a Justice

shall be designated

by raffle from theother Divisions to

replace him/her in

all Decisions or

signed Resolutions

to which he/she

participated in and

where such Deci-

sions or signed Res-

olutions are the

subject of further

motions, until anew

Justice is appointed

as replacement for

the retired Justice.

Upon the appoint-

ment of a new jus-

tice, he/she shall

replace the desig-

nated Justice in

such Decisions or

signed Resolutions.


REPUBLIC ACT NO. 9775AN ACT DEFINING THE CRIME OF CHILD PORNOGRAPHY, PRESCRIBING PENAL-

TIES THEREFOR AND FOR OTHER PURPOSES

Unlawful or ProhibitedActs.- It shall be unlaw-ful for a person to commitany of the following acts:

(a) To hire, employ, use,persuade, induce or

coerce a child to per-form in the creationor production of childpornography;

(b) To produce, direct,manufacture or createany form of child por-nography and childpornography materi-als;

(c) To sell, offer, adver-

tise and promote childpornography and childpornography materi-als;

(d) To possess, download,purchase, reproduceor make available

child pornographymaterials with theintent of selling ordistributing them;

(e) To publish, post, ex-hibit, disseminate,distribute, transmit orbroadcast child por-nography or child por-nography materials;

(f) To knowingly possess,

view, download, pur-chase or in any waytake steps to procure,obtain or access forpersonal use childpornography materi-als; and

(g) To attempt to commitchild pornography byluring or grooming achild.

Duties of an InternetService Provider (ISP).

- An ISP shall:

(a) Prevent access or

transmittal of childpornography mate-rials by any personand shall install ablocking system toprevent access tosuch materials;

(b) Within seven (7)days, report thepresence thereof, aswell as the particu-lars of the personmaintaining, host-ing, distributing orin any manner con-tributing to the In-ternet address, tothe proper authori-

Page 10 L C A LINES


11/21

ties; and(c) Preserve such evi-

dence for purposes ofinvestigation andprosecution by rele-vant authorities.

An ISP shall, upon therequest of proper authori-ties, furnish the particu-lars of users who gainedor attempted to gain ac-cess to an Internet ad-dress which contains childpornography materials.

An ISP who shall know-ingly, willfully and inten-tionally violate this provi-sion shall be subject tothe penalty provided un-der Section 13(e) of thisAct.

Duties of an InternetContent Host.- An In-ternet content host shall:(a) Not host any child

pornography on itsInternet address;

(b) Within seven (7) days,report the presence ofchild pornography, as

well as the particularsof the person main-taining, hosting, dis-tributing or in anymanner contributingto such Internet ad-dress, to the properauthorities; and

(c) Preserve such evi-dence for purposes ofinvestigation andprosecution by rele-vant authorities.

An Internet content hostshall, upon the request ofproper authorities, furnishthe particulars of userswho gained or attemptedto gain access to an Inter-net address that containschild pornography materi-als.

An Internet content host

who shall knowingly,willfully and intentionallyviolate this provisionshall be subject to thepenalty provided underSection 13(e) of this Act.

Duty to Provide Block-ing System or Soft-ware. - The followingshall also have the dutyto install blocking systemor software to preventtransmittal of or accessto the child pornographymaterials:

(a) Internet caf estab-lishments;

(b) Private and publiceducational institu-tions;

(c) Public and privateoffices; and

(d) Service providerssuch as telephonecompanies and oth-ers.

Duty to Report.- Photodevelopers, informationtechnology (IT) profes-sionals, credit card com-

panies and banks, andany person who has di-rect knowledge of anychild pornography activi-ties shall have the dutyto report any suspectedchild pornography mate-rials or transactions tothe proper authoritieswithin seven (7) daysfrom discovery thereof.

Providing Venue forCommission of Prohib-

ited Acts. - It shall beunlawful for a person toknowingly, willfully andintentionally provide avenue for the commis-sion of prohibited actssuch as, but not limitedto, dens, private rooms,cubicles in Internetcafes, cinemas, secludedareas in residential hous-

es or in establishmentspurporting to be a legiti-mate business.

Common PenalProvisions.

(a) The penalty providedunder this Act shall beimposed in its maximumperiod if the offender hasbeen previously convict-ed under this Act.

(b) When the offender isa corporation, partner-ship or association, theofficer or employee

thereof who is responsi-ble for the violation ofthis Act shall suffer thepenalty imposed in itsmaximum period.(c) When the perpetratoris an ascendant, parent,guardian, step-parent orcollateral relative withinthe second degree ofconsanguinity, the per-petrator thereof who isresponsible for the viola-tion of this Act shall suf-

fer the penalty imposedin its maximum period.

(d) The penalty providedfor in this Act shall beimposed in its maximumperiod if the offender is apublic officer or employ-ee: Provided, That if thepenalty imposed is reclu-sion perpetua or reclu-sion temporal, then thepenalty of perpetual ortemporary absolute dis-

qualification shall also beimposed.

(e) Any attempt to com-mit any of the prohibitedacts under Section 4hereof shall be punishedby a penalty two (2) de-grees lower than thatprescribed for the con-summated acts.

(f) If the offender is a for-eigner, he/she shall beimmediately deportedafter serving his/her sen-tence and be barred per-manently from enteringthe country.

(g) In all cases, any per-son found guilty ofproviding venue for thecommission of prohibitedacts under Section 4hereof shall be treated asa principal and penalizedas such.

(h) Any person foundguilty of facilitating thecommission of any pro-hibited acts shall be pun-ished with a penalty two(2) degrees lower thanthat prescribed by theoffense.

(i) Any business establish-ment used in the commis-sion of the prohibited actsprovided herein shall beimmediately closed, theauthority or license tooperate cancelled, with-out prejudice to the for-feiture of the proceedsand investments, andwithout prejudice to theprosecution of the owner,president, managers orresponsible officer whoparticipated in the com-mission of the offense orwho shall knowingly per-mit or fail to prevent itscommission.

Who May File a Com-plaint. - Complaints oncases of child pornogra-phy and other offensesmay be filed by the fol-lowing:

(a) Offended party;

(b) Parents or guardians;



12/21

(c) Ascendant or collateralrelative within the thirddegree of consanguinity;

(d) Officer, social workeror representative of a li-censed child-caring insti-tution;

(e) Officer or social work-er of the Department ofSocial Welfare and Devel-opment (DSWD);

(f) Local social welfaredevelopment officer;

(g) Barangay chairman;

(h) At least three (3) con-cerned responsible citi-zens where the violationoccurred; or

(i) Any person who haspersonal knowledge of thecircumstances of the com-mission of any offenseunder this Act.

Venue.

A criminal action arising

from a violation of this Actshall be filed where theoffense was committed,or where any of its ele-ments occurred, or wherethe child is found or actu-ally resides at the time ofthe commission of theoffense: Provided, Thatthe court where the crimi-nal action is first filedshall acquire jurisdiction

to the exclusion of theother courts.

Authority to RegulateInternet Caf or Kiosk.

The local government unit(LGU) of the city or mu-nicipality where an Inter-net caf or kiosk is locat-ed shall have the authori-ty to monitor and regulatethe establishment andoperation of the same orsimilar establishments inorder to prevent violationof the provisions of thisAct.

Legal Protection to Vic-tims of Child Pornogra-

phy.

The child who is a victimof child pornography shallbe recognized as a victimof violent crime definedunder Section 3(d) of Re-public Act No. 7309, or"An Act Creating a Boardof Claims under the De-partment of Justice forVictims of Unjust Impris-onment or Detention andVictims of Violent Crimesand for Other Purposes"so that the child mayclaim compensationtherein. The child andfamily shall be entitled toprotection as well as therights and benefits of wit-nesses under Republic ActNo. 6981, or the "WitnessProtection, Security andBenefit Act".

Confiscation and For-feiture of the Proceedsand Instruments De-rived from Child Por-

nography.

In addition to the penaltyimposed for the violationof this Act, the court shallorder the confiscation and

forfeiture, in favor of thegovernment, of all theproceeds and propertiesderived from the commis-sion of the crime, unlessthey are the property of athird person not liable forthe unlawful act: Provid-ed, however, That all

awards for damages shallbe taken from the person-al and separate propertiesof the offender:Provided, further, That ifsuch properties are insuf-ficient, the balance shallbe taken from the confis-cated and forfeited prop-erties.

When the proceeds, prop-erties and instruments ofthe offense have been

destroyed or diminishedin value or otherwise ren-dered worthless by anyact or omission, directlyor indirectly, of the of-fender, or it has beenconcealed, removed, con-verted or transferred toprevent the same frombeing found or to avoidforfeiture or confiscation,the offender shall be or-dered to pay the amountequal to the value of the

proceeds, property or in-struments of the offense.

Extradition. - The DOJ,in consultation with theDepartment of ForeignAffairs, shall endeavor toinclude child pornographyamong extraditable of-fenses in future treaties.

Page 12 L C A LINES


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Creation of the ClimateChange Commission

The Commission shall bean independent and au-tonomous body and shallhave the same status asthat of a national govern-ment agency. It shall beattached to the Office ofthe President.

The Commission shall bethe sole policy-makingbody of the governmentwhich shall be tasked tocoordinate, monitor andevaluate the programsand action plans of thegovernment relating toclimate change pursuantto the provisions of thisAct.

Framework Strategyand Program on Cli-

mate Change

The Commission shall,within six (6) monthsfrom the effectivity of thisAct, formulate a Frame-work Strategy on ClimateChange. The Frameworkshall serve as the basisfor a program for climatechange planning, researchand development, exten-sion, and monitoring ofactivities to protect vul-nerable communities fromthe adverse effects of cli-mate change.

The Framework shall beformulated based on cli-mate change vulnerabili-ties, specific adaptation

needs, and mitigation po-tential, and in accordancewith the internationalagreements.The Framework shall bereviewed every three (3)years, or as may bedeemed necessary.

Components of theFramework Strategyand Program on Cli-

mate Change

The Framework shall in-clude, but not limited to,the following components:

(a) National priorities;

(b) Impact, vulnerabilityand adaptation assess-ments;

(c) Policy formulation;

(d) Compliance with

international commit-ments;

(e) Research and devel-opment;

(f) Database develop-ment and management;

(g) Academic programs,capability building andmainstreaming;

(h) Advocacy and infor-

mation dissemination;

(i) Monitoring and eval-uation; and

(j) Gender mainstream-

ing.

National ClimateChange Action Plan.

The Commission shall for-mulate a National ClimateChange Action Plan in ac-cordance with the Frame-work within one (1) yearafter the formulation ofthe latter.

The National ClimateChange Action Plan shallinclude, but not limitedto, the following compo-nents:

(a) Assessment of thenational impact of climatechange;

(b) The identification ofthe most vulnerable com-munities/areas, includingecosystems to the im-pacts of climate change,variability and extremes;

(c) The identification ofdifferential impacts of cli-

mate change on men,women and children;

(d) The assessment andmanagement of risk andvulnerability;

(e) The identification ofGHG mitigation poten-tials; and

(f) The identification ofoptions, prioritization ofappropriate adaptation

measures for joint pro-

jects of national and localgovernments.

Local Climate ChangeAction Plan

The LGUs shall be thefrontline agencies in theformulation, planning andimplementation of climatechange action plans intheir respective areas,consistent with the provi-sions of the Local Govern-

ment Code, the Frame-work, and the NationalClimate Change ActionPlan.

Barangays shall be direct-ly involved with municipaland city governments inprioritizing climate changeissues and in identifyingand implementing bestpractices and other solu-tions. Municipal and citygovernments shall consid-

er climate change adapta-tion, as one of their regu-lar functions. Provincialgovernments shall providetechnical assistance, en-forcement and infor-mation management insupport of municipal andcity climate change actionplans. Inter-local govern-ment unit collaborationshall be maximized in theconduct of climate- relat-ed activities.

Local Government Units(LGUs) shall regularly up-date their respective ac-tion plans to reflectchanging social, econom-ic, and environmentalconditions and emergingissues. The LGUs shallfurnish the Commissionwith copies of their action

REPUBLIC ACT NO. 9729AN ACT MAINSTREAMING CLIMATE CHANGE INTO GOVERNMENT POLICY FORMULATIONS, ESTAB-LISHING THE FRAMEWORK STRATEGY AND PROGRAM ON CLIMATE CHANGE, CREATING FOR THIS

PURPOSE THE CLIMATE CHANGE COMMISSION, AND FOR OTHER PURPOSESClimate Change Act of 2009



14/21

plansand all subsequentamendments, modifica-tions and revisions there-of, within one (1) monthfrom their adoption. TheLGUs shall mobilize andallocate necessary per-sonnel, resources andlogistics to effectively im-plement their respectiveaction plans.

The local chief executiveshall appoint the personresponsible for the formu-lation and implementationof the local action plan.

It shall be the responsibil-ity of the national govern-ment to extend technicaland financial assistance to

LGUs for the accomplish-ment of their Local Cli-mate Change ActionPlans.

The LGU is hereby ex-pressly authorized to ap-propriate and use theamount from its InternalRevenue Allotment neces-sary to implement saidlocal plan effectively, anyprovision in the LocalGovernment Code to thecontrary notwithstanding.

Appropriations

The sum of Fifty millionpesos

(Php50,000,000.00) isappropriated as initial op-erating fund in addition tothe unutilized fund of thePresidential Task Force onClimate Change and theOffice of the PresidentialAdviser on Global Warm-ing and Climate Change.The sum shall be sourcedfrom the Presidents con-tingent fund.

Thereafter, the amountnecessary to effectivelycarry out the provisions ofthe Climate Change Actshall be included in theannual General Appropria-tions Act.

JURISPRUDENCE

LINTANG BEDOL

vs.

COMMISSION ONELECTIONS

G.R. No. 179830 De-

cember 3, 2009

FACTS: On May 14,

2007, the National and

Local elections were

held.

As Chair of the Provincial

Board of Canvassers

(PBOC) for the provinceof Maguindanao, Lintang

Bedol (Bedol) discharged

his official functions and

was able to ensure the

PBOCs performance of

its ministerial duty to

canvass the Certificates

of Canvass coming from

the twenty two (22) city

and municipalities in the

province.

At that time, Bedol also

was charged with the

duty of being the concur-

rent Provincial Elections

Supervisor for the Prov-

ince of Shariff Kabun-

suan, a neighboring

province of Maguinda-

nao.

Bedol failed to attend the

scheduled canvassing of

the Provincial Certificates

of Canvass (PCOC) of

Maguindanao of which he

is the Provincial Election

Supervisor.

Bedol later appeared be-

fore the Commission, en

banc sitting as the Nation-

al Board of Canvassers

(NBOC) for the election of

senators to submit the

provincial certificate of

canvass for Maguindanao.

Due to certain

observations on the pro-

vincial certificates of can-

vass by certain parties,

canvassing of the certifi-

cate was held in abeyance

and Bedol was queried on

the alleged fraud which

attended the conduct of

elections in his area.

He was already informed

of the resetting of the

canvassing but failed to

appear despite prior

knowledge.

A certification was later

issued that as of even

date, the canvassing doc-

uments for all municipali-

ties of the province of

Maguindanao in connec-

tion with the May 2007

elections were not trans-

mitted by the Provincial

Election Supervisor of said

province nor the respec-

tive Board of Canvassers.

The Commission and the

NBOC created the Task

Force Maguindanao, which

was tasked to conduct a

fact-finding investigation

on the conduct of elec-

tions and certificates of

canvass from the city and

municipalities in Magu-

indanao.

Bedol appeared before the

Task Force fact finding

activity and responded to

Page 14 L C A LINES


15/21

the queries from the chair

who later on admitted

that the election para-

phernalia was lost. An-

other investigative pro-ceeding was scheduled,

however, Bedol failed to

appear. Also, Bedol failed

to submit a written expla-

nation of his absences on

time.

Bedol came out on nation-

al newspapers, in an ex-

clusive interview with the

Inquirerand GMA-7, with

a gleaming 45 caliber pis-

tol strapped to his side,

and in clear defiance of

the Commission posted

the challenge by saying

that those that are saying

that there was cheating in

Maguindanao, file a case

against me tomorrow, the

next day. They should

file a case now and I will

answer their accusa-

tions.(Words in brackets

ours)

The COMELEC issued a

Contempt Charge and

Show Cause Order against

Bedol citing various viola-

tions of the COMELEC

Rules of Procedure.

Bedol was later arrested

by members of the Philip-

pine National Police (PNP)

on the basis of an Order

of Arrest after repeatedly

failing to appear during

the fact-finding proceed-

ings before Task Force

Maguindanao.

The COMELEC en banc

issued a resolution finding

Bedol guilty of contempt.

Aggrieved, Bedol filed a

motion for reconsideration

which was denied by the

COMELEC.

ISSUE: Whether or not

the COMELEC has jurisdic-

tion to initiate or prose-

cute the contempt pro-

ceedings against Bedol.

RULING: The COMELEC

has jurisdiction to initiate

or prosecute the con-

tempt proceedings

against Bedol.

The COMELEC possesses

the power to conduct in-

vestigations as an adjunct

to its constitutional duty

to enforce and administer

all election laws.

The quasi-judicial

or administrative adjudi-

catory power of the

COMELEC is the power to

hear and determine ques-

tions of fact to which the

legislative policy is to ap-

ply, and to decide in ac-

cordance with the stand-

ards laid down by the law

itself in enforcing and ad-

ministering the same law.

The COMELEC, through

the Task Force Maguinda-

nao, was exercising its

quasi-judicial power in

pursuit of the truth behind

the allegations of massive

fraud during the elections

in Maguindanao. To

achieve its objective, the

Task Force conductedhearings and required the

attendance of the parties

concerned and their coun-

sels to give them the op-

portunity to argue and

support their respective

positions.

The effectiveness of the

quasijudicial power vest-

ed by law on a govern-

ment institution hinges on

its authority to compel

attendance of the parties

and/or their witnesses at

the hearings or proceed-

ings.

In the same vein, to with-

hold from the COMELEC

the power to punish indi-

viduals who refuse to ap-

pear during a fact-finding

investigation, despite a

previous notice and order

to attend, would render

nugatory the COMELECs

investigative power,

which is an essential inci-

dent to its constitutional

mandate to secure the

conduct of honest and

credible elections. In this

case, the purpose of the

investigation was however

derailed when Bedol ob-

stinately refused to ap-

pear during said hearings

and to answer questions

regarding the various

election documents which,

he claimed, were stolen

while

they were in his posses-

sion and custody. Un-

doubtedly, the COMELEC

could punish Bedol for

such contumacious refusalto attend the Task Force

hearings.

On the procedure adopted

by the COMELEC in pro-

ceeding with the indirect

contempt charges against

Bedol, Section 52 (e),

Article VII of the Omnibus

Election Code pertinently

provides:

Section 52.Powers andfunctions of the Com-mission on Elections.

xxx

(e) Punish con-tempts provided forin the Rules of Courtin the same pro-cedure and withthe same penal-

tiesprovided therin.Any violation of anyfinal and executorydecision, order orruling of the Com-mission shall consti-tute contemptthereof.

The aforecited provision

of law is implemented by

Rule 29 of COMELECs

Rules of Procedure, Sec-tion 2 of which states:

Rule 29 Con-tempt

Sec. 1. xxx

Sec. 2. Indirect Con-tempt. After charge



16/21

in writing has beenfiled with the Commis-sion or Division, asthe case may be, and

an opportunity givento the respondent tobe heard by himself orcounsel, a personguilty of the followingacts may be punishedfor indirect contempt:

(a) Misbehavior ofthe responsible of-ficer of the Commis-sion in the perfor-mance of his officialduties or in his offi-cial transactions;

(b) Disobedience ofor resistance to alawful writ, process,order, judgment orcommand of theCommission or anyof its Divisions, orinjunction or re-straining ordergranted by it;

(c) Any abuse of orany inlawful inter-ference with theprocess or proceed-ings of the Commis-sion or any of itsDivisions not consti-tuting direct con-tempt under Section1 of this Rules;

(d) Any improperconduct tending,directly or indirectly,to impede, obstruct,or degrade the ad-ministration of jus-tice by the Commis-sion or any of itsDivisions;

(e) Assuming to bean attorney and act-ing as such withoutauthority; and

(f) Failure to obey asubpoena dulyserved.

SEC. 3 Penalty forIndirect Contempt. If adjudged guilty, theaccused may be pun-ished by a fine notexceeding one thou-sand (P1,000.00) pe-sos or imprisonmentfor not more than six(6) months, or both,at the discretion of theCommission or Divi-sion.

GOVERNOR ORLANDOA. FUA, JR.,

*IN REPRESENTATIONOF THE PROVINCIAL

GOVERNMENT OF SI-QUIJOR

and ALL ITS OFFICIALSAND EMPLOYEES

vs.

THE COMMISSION ONAUDIT and ELIZABETH

S. ZOSA,DIRECTOR IV, LEGALAND ADJUDICATIONOFFICE-LOCAL COM-MISSION OF AUDIT,

QUEZON CTY, PHILIP-PINES

G.R. No. 175803 De-cember 4, 2009

FACTS: The Sangguni-

ang Panlalawigan of the

Province of Siquijor

adopted a resolution

granting extra Christmas

bonus to all its officials

and employees.

Governor Orlando A. Fua

Jr. (Fua) wrote a letter to

the President reiterating

said request. On said

letter, the President then

wrote a marginal note

reading, NO OBJECTION.

The provincial govern-

ment, relying on the reso-lutions and the Presidents

marginal note, then pro-

ceeded to release the ex-

tra Christmas bonus to its

officials and employees.

However, a post-audit

was conducted and there-

after questioned the le-

gality of the payment of

said bonuses.

Atty. Roy L. Ursal (Ursal),Regional Cluster Director,

Commission on Audit Re-

gion VII disallowed the

payments and issued No-

tices of Disallowance for

violation of Budget Circu-

lars.

Fua filed a motion for re-

consideration but the

same was denied by Ur-

sal.

Fua appealed to the Com-

mission on Audit-Legal

and Adjudication Office

(COA-LAO-Local) which

issued a Decision affirm-

ing the Regional Cluster

Directors Notice of Disal-

lowance.


Fua exhausted all the

remedies available to him.

RULING: Fua failed to

exhaust the administra-

tive remedies available to

him.

The general rule is that

before a party may seekthe intervention of the

court, he should first avail

himself of all the means

afforded him by adminis-

trative processes. The

issues which administra-

tive agencies are author-

ized to decide should not

be summarily taken from

them and submitted to

the court without first giv-ing such administrative

agency the opportunity to

dispose of the same after

due deliberation.

The non-observance of

the doctrine results in the

petition having no cause

of action, thus, justifying

its dismissal.

The Commission Proper,

which is the tribunal pos-

sessing special

knowledge, experience

and tools to determine

technical and intricate

matters of fact involved in

the conduct of the audit,

would still be the best

body to determine wheth-

er the marginal note of

No Objection on petition-

ers letter-request to the

President is indeed au-

thentic and tantamount to

the required approval.

Fua having failed to pur-

JURISPRUDENCE

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Page 17

JURISPRUDENCE

sue an appeal with the

Commission Proper, the

Decision issued by the COA

-LAO-Local has becomefinal and executory.

PEOPLE OF THE PHILIP-PINES

vs.FERNANDO GUTIERREZ

y GATSOG.R. No. 177777 De-

cember 4, 2009

FACTS: Fernando

Gutierrez y Gatso

(Gutierrez) was caught in

possession of two (2) small

plastic [sachets] containing

white crystalline substance

weighing more or less

14.052 grams of shabu

while inside a kubowith a

companion.

Upon arraignment, Fernan-

do, assisted by counsel de

officio, entered a plea of

not guilty.

The Regional Trial Court

(RTC), found Fernando

guilty beyond reasonable

doubt.

The Court of Appeals (CA)

affirmed the decision of the

RTC.


the Trial Court erred in

finding Gutierrez guilty

beyond reasonable doubt

for violation of Section 11,

Article II, R.A. No. 9165.

RULING: The Trial Courtdid not err in finding

Gutierrez guilty beyond

reasonable doubt for vio-

lation of Section 11, Arti-

cle II, R.A. No. 9165.

The Supreme Court (SC)

reviewed the transcript of

stenographic notes taken

during the trial and found

nothing to support

Gutierrezs allegations of

inconsistencies between

or among the prosecution

witnesses versions of rel-

evant events.

The Court will not disturb

the trial courts evaluation

of the credibility of wit-

nesses, save when it hadoverlooked, misunder-

stood, or misapplied some

facts or circumstances of

weight and substance

which, when considered,

will alter the assailed de-

cision or affect the result

of the case. None of the

exceptions obtain in the

case at bar.

At the trial, Gutierrezs

invoked the defenses of

denial and frame-up,

claiming at every oppor-

tunity that the bag con-

taining the shabu sachets

and drug paraphernalia

belonged to Cortez, not to

him, as the arresting of-

ficers would make it ap-

pear. To prove this point,Gutierrezs testified that

among the items found in

the bag were Cortezs

drivers license and wal-

let.

As time and again held,

the defense of denial or

frame-up, like alibi, has

been invariably viewed

with disfavor for it can

easily be concocted and is

a common defense ploy in

most prosecutions for vio-

lation of the Dangerous

Drugs Act.

Here, no clear and con-

vincing evidence was ad-

duced to prove Gutierrezs

defense of denial or frame

-up. On the contrary,

Gutierrezs action while

the policemen were un-

dertaking follow-up oper-

ations was what took him

behind the bars. The ref-

erence, of course, is to

the fact that he hastily

fled from the scene of the

crime upon noticing the

arrival of the police at thetarget area.

YUN KWAN BYUNGvs.

PHILIPPINE AMUSE-MENT AND GAMING

CORPORATIONG.R. No. 163553 De-

cember 11, 2009

FACTS: PAGCOR is a

government-owned and

controlled corporation

tasked to establish and

operate gambling clubs

and casinos as a means

to promote tourism and

generate sources of reve-nue for the government.

To achieve these objec-

tives, PAGCOR is vested

with the power to enter

into contracts of every

kind and for any lawful

purpose that pertains to

its business. Pursuant to

this authority, PAGCOR

launched its Foreign High-

roller Marketing Program(Program). The Program

aims to invite patrons

from foreign countries to

play at the dollar pit of

designated PAGCOR-

operated casinos under

specified terms and con-

ditions and in accordance

with industry practice.

The Korean-based ABS

Corporation was one of

the international groups

that availed of the Pro-

gram.

Yun Kwan Byung (Byung),

VOLUME II, ISSUE No. 12


18/21

a Korean national, alleges

that he came to the Phil-

ippines four times to play

for high stakes at the Ca-

sino Filipino. That he was

able to accumulate gam-

bling chips worth US$2.1

million. And that when he

presented the gambling

chips for encashment with

PAGCORs employees or

agents, PAGCOR refused

to redeem them.

PAGCOR argues that

Byung is not a PAGCOR

player, but ABS Corpora-

tions (ABS) junket play-

er.

Byung brought an action

against PAGCOR seeking

the redemption of gam-

bling chips valued at

US$2.1 million.

The Regional Trial Court

(RTC) dismissed the com-

plaint and counterclaim.

Byung appealed the RTC

decision but the Court of

Appeals (CA) affirmed the

RTC decision.

ISSUE: Whether

or not the CA erred in

holding that the Junket

Agreement entered into

by PAGCOR and ABS val-

id.

RULING: The CA erred

in holding that the Junket

Agreement entered into

by PAGCOR and ABS is

valid.

The Junket Agreement

would be valid if under

Section 3(h) of PAGCORs

charter, PAGCOR could

share its gambling fran-

chise with another entity.

PAGCOR HAS THE SOLE

AND EXCLUSIVE AUTHOR-

ITY TO OPERATE A GAM-

BLING ACTIVITY. WHILE

PAGCOR IS ALLOWED

UNDER ITS CHARTER TO

ENTER INTO OPERATORS

OR MANAGEMENT CON-

TRACTS, PAGCOR IS NOT

ALLOWED UNDER THE

SAME CHARTER TO RE-

LINQUISH OR SHARE ITS

FRANCHISE. PAGCOR

CANNOT DELEGATE ITS

POWER IN VIEW OF THE

LEGAL PRINCIPLE OF

DELEGATA POTESTAS

DELEGARE NON POTEST,

INASMUCH AS THERE IS

NOTHING IN THE CHAR-

TER TO SHOW THAT IT

HAS BEEN EXPRESSLY

AUTHORIZED TO DO SO.

PAGCOR, by taking only a

percentage of the earn-

ings of ABS from its for-

eign currency collection,

allowed ABS Corporation

to operate gaming tables

in the dollar pit. The Jun-

ket Agreement is in direct

violation of PAGCORs

charter and is therefore

void.

Since the Junket Agree-

ment violates PAGCORs

charter, gambling be-

tween the junket player

and the junket operator

under such agreement is

illegal and may not be

enforced by the courts.

Article 2014 of the Civil

Code, which refers to ille-

gal gambling, states that

no action can be main-

tained by the winner for

the collection of what he

has won in a game of

chance.

JURISPRUDENCE

Page 18 L C A LINES


19/21

Page 19

JURISPRUDENCE

PACIFIC STEAM LAUN-DRY, INC.

vs.

LAGUNA LAKE DEVEL-

OPMENTAUTHORITY

G.R. No. 165299 De-cember 18, 2009

FACTS: Pacific Steam

Laundry, Inc. (Pacific) is a

company engaged in the

business of laundry ser-

vices. The Environmental

Management Bureau of theDepartment of Environ-

ment and Natural Re-

sources (DENR) endorsed

to Laguna Lake Develop-

ment Authority (LLDA) the

inspection report on the

complaint of black smoke

emission from Pacific

Steam Laundry Inc.s

(Pacific Steam) plant.

LLDA conducted an investi-

gation and found that un-

treated wastewater gener-

ated from Pacific Steams

laundry washing activities

was discharged directly to

the San Francisco Del Mon-

te River. Furthermore, the

Investigation Report stated

that Pacific Steam was op-

erating without LLDA clear-

ance, AC/PO-ESI, and Dis-

charge Permit from LLDA.

The Environmental Quality

Management Division of

LLDA conducted

wastewater sampling of

Pacific Steams effluent.

The result of the laboratory

analysis showed non-

compliance with effluent

standards. Consequent-

ly, LLDA issued to Pacific

Steam a Notice of Viola-tion.

Numerous wastewater

sampling was conducted

but all the results re-

vealed that Pacific Steam

still failed to conform with

the effluent standards in

terms of Oil/Grease Con-

centration.

A Pollution Control and

Abatement case was filed

against Pacific Steam be-

fore the LLDA. During the

public hearing another

wastewater sampling was

conducted. The laboratory

results of the wastewater

sampling finally showed

compliance with the efflu-

ent standard in all param-eters. An issue arose re-

garding the payment of

the accumulated daily

penalty.

Pacific Steam was ordered

to pay a penalty on a dai-

ly rate.

Pacific Steam filed a mo-

tion for reconsideration,

which the LLDA denied in

its Order.

The Court of Appeals (CA)

denied the petition for

review and motion for

reconsideration filed by

Pacific Steam.

ISSUE: Whether or notthe grant of implied pow-

er to LLDA to impose pen-

alties violate the rule on

non-delegation of legisla-

tive power.

RULING: The grant of

implied power to LLDA to

impose penalties does not

violate the rule on non-delegation of legislative

power.

LLDAs power to impose

fines is not unrestricted.

In this case, LLDA investi-

gated the pollution com-

plaint against Pacific

Steam and conducted

wastewater sampling of

Pacific Steams effluent. Itwas only after the investi-

gation result showing its

failure to meet the estab-

lished water and effluent

quality standards that

LLDA imposed a fine

against Pacific Steam. The

P1,000 penalty per day is

in accordance with the

amount of penalty pre-

scribed under PD 984:

SEC. 8. Prohibi-tions. No personshall throw, run,drain, or otherwisedispose into any ofthe water, air and/or land resourcesof the Philippines,or cause, permit,suffer to bethrown, run, drain,allow to seep orotherwise dispose

thereto any organicor inorganic matteror any substance ingaseous or liquidform that shallcause pollutionthereof.

x x x

SEC 9. Penalties. x x x

(b) Any personwho shall violate

any of the previousprovisions of Sec-tion Eight of thisDecree or its imple-menting rules andregulations, or anyOrder or Decisionof the Commission,shall be liable to apenalty of not toexceed one thou-sand pesos eachday during whichthe violation con-tinues, or by im-prisonment of fromtwo years to sixyears, or by bothfine and imprison-ment, and in addi-tion such personmay be required orenjoined from con-tinuing such viola-

VOLUME II, ISSUE No. 12


20/21

tion as hereinafterprovided.

x x x

Clearly, there are ade-

quate statutory limita-

tions on LLDAs power to

impose fines which obvi-

ates unbridled discretion

in the exercise of such

power.

JURISPRUDENCE

Page 20 L C A LINES


21/21

John dies and goes to heaven

He gets to meet God and asks him a few questions:

JOHN: God can I ask you a question?

GOD: Go ahead John

JOHN: Why did you make women so pretty?

GOD: So you would like them!

JOHN: Then why did you make them so beautiful?

GOD: So you WOULD love them!

John ponders a moment then asks

JOHN: But why did you make them such airheads?

GOD: So they would love you

LAGUNDI-CARONAN AND ASSOC.

JLsCORNER

issue

December

Lagundi-Caronan and AssociatesRhem Square Bldg.

Carig SurTuguegarao City

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