De Jesus vs. Commission on Audit

Administrative rules and regulations intended to enforce or implement existing law must be published in the Official Gazette or a newspaper of general circulation to be effective; interpretative regulations and those merely internal in nature need not be published. The Court held that DBM-CCC No. 10, which completely disallowed the payment of allowances and additional compensation, was a substantive implementing rule rather than a mere interpretative regulation, thus requiring publication to be valid and enforceable.

Petitioners, personnel of the Local Water Utilities Administration (LWUA), received honoraria as designated members of the LWUA Board Secretariat and the Pre-Qualification, Bids and Awards Committee prior to July 1, 1989. On July 1, 1989, Republic Act No. 6758 took effect, prescribing a revised compensation and position classification system. Section 12 of the law consolidated allowances into standardized salary rates but provided that additional compensation received by incumbents as of July 1, 1989, which was not integrated into the standardized salary rates, would continue to be authorized. To implement Republic Act No. 6758, the Department of Budget and Management (DBM) issued Corporate Compensation Circular No. 10 (DBM-CCC No. 10), which discontinued all allowances and fringe benefits granted on top of basic salary effective November 1, 1989.

• Nature: Petition for Certiorari assailing the January 29, 1993 Decision of the Commission on Audit (COA), which upheld the disallowance of petitioners' honoraria.
• The Prior Honoraria: Before July 1, 1989, petitioners, as LWUA employees, were receiving honoraria as designated members of the LWUA Board Secretariat and the Pre-Qualification, Bids and Awards Committee.
• Effectivity of R.A. 6758: Republic Act No. 6758 took effect on July 1, 1989. Section 12 of the law consolidated allowances into standardized salary rates, with specific exceptions, and stated that additional compensation received by incumbents as of July 1, 1989, not integrated into the standardized salary rates, shall continue to be authorized.
• Issuance of DBM-CCC No. 10: To implement R.A. 6758, the DBM issued DBM-CCC No. 10. Paragraph 5.6 thereof discontinued, without qualification, the payment of all allowances, fringe benefits, and other forms of compensation granted on top of basic salary effective November 1, 1989. It further declared payments made after said date as illegal disbursements of public funds.
• The Disallowance: Pursuant to R.A. 6758 and DBM-CCC No. 10, respondent Leonardo Jamoralin, in his capacity as COA-LWUA Corporate Auditor, disallowed the payment of honoraria to the petitioners on post-audit.

• Petitioners maintained that Paragraph 5.6 of DBM-CCC No. 10 is void for being inconsistent with and repugnant to Section 12 of Republic Act No. 6758, the law it seeks to implement. They argued that the circular prohibited fringe benefits and allowances that the statute itself authorized to continue.
• Petitioners argued that DBM-CCC No. 10 is without force and effect because it was not published in the Official Gazette as required by law.

• Respondent COA countered that allowing honoraria without statutory, presidential, or DBM authority would violate Section 8, Article IX-B of the Constitution, which prohibits the payment of additional or double compensation unless specifically authorized by law.
• Respondent COA argued that DBM-CCC No. 10 need not be published because it is merely an interpretative regulation of a law already published.
• The DBM Secretary, intervening, asserted that the honoraria in question are considered included in the basic salary because they are not listed as exceptions under Section 12 of Republic Act No. 6758.

• Procedural Issues: N/A
• Substantive Issues: Whether DBM-CCC No. 10 has legal force and effect notwithstanding the absence of its publication in the Official Gazette or a newspaper of general circulation. Whether Paragraph 5.6 of DBM-CCC No. 10 can supplant or negate the express provisions of Section 12 of Republic Act No. 6758 which it seeks to implement.

• Procedural: N/A
• Substantive: The Court ruled that DBM-CCC No. 10 must be published to be effective and enforceable. Following the doctrine in Tañada v. Tuvera, administrative rules and regulations whose purpose is to enforce or implement existing law pursuant to a valid delegation must be published. The Court found that DBM-CCC No. 10 was not a mere interpretative or internal regulation; rather, it substantively deprived government workers of their allowances and additional compensation. Because the circular tended to substantially reduce the income of government officials and employees, publication was required to apprise them and afford them the opportunity to voice their opposition. Since DBM-CCC No. 10 was not published in the Official Gazette or a newspaper of general circulation, it had no legal force and effect. In light of this ruling on publication, the Court found it unnecessary to resolve the second issue regarding whether the circular could supplant the provisions of Republic Act No. 6758.

• **Doctrine of Publication of Administrative Rules and Regulations — Administrative rules and regulations must be published if their purpose is to enforce or implement existing law pursuant to a valid delegation. Interpretative regulations and those merely internal in nature—that is, regulating only the personnel of the administrative agency and not the public—need not be published. The Court applied this doctrine by classifying DBM-CCC No. 10 as a substantive implementing rule that deprived government employees of benefits, rather than a mere interpretative regulation, thus requiring publication to be valid and enforceable.

• "Administrative rules and regulations must also be published if their purpose is to enforced or implement existing law pursuant to a valid delegation. Interpretative regulations and those merely internal in nature, that is, regulating only the personnel of the administrative agency and not the public, need not be published."
• "In the present case under scrutiny, it is decisively clear that DBM-CCC No. 10, which completely disallows payment of allowances and other additional compensation to government officials and employees, starting November 1, 1989, is not a mere interpretative or internal regulation. It is something more than that."

• Tañada v. Tuvera, 146 SCRA 453 — Controlling precedent. Established the rule that all statutes, including administrative rules and regulations meant to enforce or implement existing law, must be published as a condition for their effectivity. The Court relied on this case to hold that DBM-CCC No. 10, being a substantive implementing rule, required publication.
• Philippine Association of Service Exporters, Inc. vs. Torres, 212 SCRA 299 — Followed. Reiterated the ruling in Tañada v. Tuvera regarding the necessity of publication for administrative rules that implement existing law.

• Article 2, New Civil Code — Provides that laws shall take effect after fifteen days following the completion of their publication in the Official Gazette, unless otherwise provided. The Court applied this provision to administrative rules implementing existing law, holding that publication is a condition precedent to effectivity.
• Section 12, Republic Act No. 6758 — Consolidates allowances and additional compensation into standardized salary rates but provides that additional compensation received by incumbents as of July 1, 1989, not integrated into the standardized salary rates, shall continue to be authorized. Petitioners relied on the second paragraph to argue their honoraria should continue.
• Section 8, Article IX-B, 1987 Constitution — Prohibits the payment of additional or double compensation unless specifically authorized by law. Respondent COA invoked this provision to justify the disallowance of the honoraria absent specific statutory or DBM authority.
• Executive Order No. 200 — Allows publication of laws in a newspaper of general circulation in the Philippines, in addition to the Official Gazette. The Court cited this issuance to clarify that publication in either medium satisfies the requirement.

Narvasa, C.J., Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza, Panganiban, Martinez and Quisumbing, JJ., concur.