San Juan vs. Civil Service Commission

The Provincial Governor's power to recommend nominees for the position of Provincial Budget Officer under Executive Order No. 112 is mandatory, not directory, and the DBM Secretary may appoint only from the list of qualified recommendees nominated by the Governor; if none qualifies, the list must be returned to the Governor with an explanation and a request for new nominees.

The petitioner was the Governor of the Province of Rizal. The position of Provincial Budget Officer (PBO) was nationalized under Executive Order No. 112, promulgated on December 24, 1986, which transferred the appointing authority from the Governor to the Minister (now Secretary) of Budget and Management while retaining the Governor's power to recommend nominees. Prior to E.O. No. 112, Batas Pambansa Blg. 337, the then-existing Local Government Code, vested the power to appoint the PBO directly in the Governor, subject to civil service rules. The 1987 Constitution enshrines local autonomy as a state policy under Article II, Section 25, and guarantees it under Article X, Sections 2 and 3, providing the constitutional backdrop against which the scope of the Governor's recommending power was measured.

On March 22, 1988, the position of Provincial Budget Officer (PBO) for the Province of Rizal was left vacant by its former holder, Henedima del Rosario. The petitioner, Governor Reynaldo San Juan, issued a memorandum designating Ms. Dalisay Santos, then Municipal Budget Officer of Taytay, Rizal, as Acting PBO. In a letter dated April 18, 1988, the petitioner informed DBM Region IV Director Reynaldo Abella of Santos's assumption of office and requested endorsement of her appointment to the contested position.

Director Abella conducted a comparative study of all Municipal Budget Officers of Rizal, which included three nominees of the petitioner. In a memorandum dated July 26, 1988 addressed to the DBM Secretary, Abella recommended the appointment of private respondent Cecilia Almajose as PBO, finding her the most qualified since she was the only Certified Public Accountant among the contenders. On August 1, 1988, DBM Undersecretary Nazario S. Cabuquit, Jr. signed the appointment papers of Almajose upon Abella's recommendation. Two days later, the petitioner wrote Secretary Carague reiterating his request for Santos's appointment, unaware that Cabuquit had already formalized Almajose's appointment.

On August 31, 1988, DBM Regional Director Agripino G. Galvez informed the petitioner that Santos and his other recommendees did not meet the minimum requirements under Local Budget Circular No. 31 for the position of local budget officer. Galvez, whether or not through oversight, further required the petitioner to submit at least three other qualified nominees for evaluation and processing. On November 2, 1988, having been informed of Almajose's appointment, the petitioner wrote Secretary Carague protesting the appointment on the grounds that Cabuquit as DBM Undersecretary was not legally authorized to appoint the PBO, that Almajose lacked the required three years' work experience under Local Budget Circular No. 31, and that under Executive Order No. 112, it was the Provincial Governor who had the power to recommend nominees for the position.

The DBM, through its Bureau of Legal and Legislative Affairs Director Virgilio A. Afurung, issued a memorandum on January 9, 1989 ruling that the petitioner's protest was without merit, finding that the DBM validly exercised its prerogative since none of the petitioner's nominees met the prescribed requirements. The petitioner's motion for reconsideration was denied by the DBM Secretary on February 28, 1989. The petitioner then protested to the CSC on March 27, 1989, reiterating his position. The CSC issued Resolution No. 89-868 on November 21, 1989 dismissing the appeal and upholding Almajose's appointment, and Resolution No. 90-150 on February 9, 1990 denying the motion for reconsideration. The CSC found that the Governor's recommendation was merely directory and not a condition sine qua non to the DBM Secretary's appointing prerogative, reasoning that the PBO is a nationalized officer whose independence from the local government unit must be preserved.

• Sole Right to Recommend: Petitioner maintained that under Section 1 of Executive Order No. 112, he has the sole right and privilege to recommend nominees to the position of PBO, and that the appointee should come only from his nominees.
• Mandatory Application of Recommendation: Petitioner argued that the phrase "upon recommendation of the local chief executive concerned" must be given mandatory application in consonance with the state policy of local autonomy guaranteed by the 1987 Constitution under Article II, Section 25 and Article X, Section 2.
• Invalidity of Local Budget Circular No. 31: Petitioner contended that his power to recommend cannot validly be defeated by a mere administrative issuance of the DBM reserving to itself the right to fill any existing vacancy in case the Governor's nominees do not meet qualification requirements.
• Lack of Authority of Undersecretary: Petitioner argued that DBM Undersecretary Cabuquit was not legally authorized to appoint the PBO.
• Lack of Qualifications of Appointee: Petitioner contended that Almajose lacked the required three years' work experience as provided in Local Budget Circular No. 31.
• Denial of Opportunity to Submit New Nominees: Petitioner argued that the CSC and DBM gravely abused their discretion in not allowing him to submit new nominees who could meet the required qualifications.

• Directory Nature of Recommendation: Respondent CSC countered that the recommendation of the local chief executive is merely directory and not a condition sine qua non to the exercise by the DBM Secretary of his appointing prerogative, as the PBO has been nationalized and is directly under the control and supervision of the DBM Secretary.
• Independence of the PBO: Respondent CSC argued that to preserve and maintain the independence of the PBO from the local government unit, the officer must be primarily the choice of the national appointing official, analogous to a Commission on Audit resident auditor.
• Unrestricted Selection: Respondent CSC maintained that the appointing official is not restricted or circumscribed to the list submitted by the local chief executive and may consider other nominees vis-à-vis the Governor's nominees in the final selection.

• Mandatory vs. Directory Nature of Recommendation: Whether the Governor's power to recommend nominees for the position of PBO under Section 1 of Executive Order No. 112 is mandatory or merely directory.
• Validity of Local Budget Circular No. 31, Section 6.0: Whether Section 6.0 of Local Budget Circular No. 31, reserving the DBM's right to fill vacancies when none of the Governor's nominees meet prescribed requirements, is valid.
• Validity of Almajose's Appointment: Whether the appointment of Cecilia Almajose as PBO of Rizal by the DBM Undersecretary, made outside the Governor's list and before the Governor was informed of his nominees' rejection, is valid.

• Mandatory vs. Directory Nature of Recommendation: The Governor's recommending power is mandatory, not directory. The DBM Secretary may appoint only from the list of qualified recommendees nominated by the Governor, pursuant to the constitutional policy of local autonomy.
• Validity of Local Budget Circular No. 31, Section 6.0: Section 6.0 of Local Budget Circular No. 31 is ultra vires and was set aside. The DBM cannot reserve the right to fill vacancies with a person of its own choice outside the Governor's list of nominees.
• Validity of Almajose's Appointment: No. The appointment was nullified because it was made outside the Governor's list of nominees and formalized before the Governor was informed that his nominees had been rejected, constituting grave abuse of discretion.

• Mandatory vs. Directory Nature of Recommendation: The constitutional policy of local autonomy, enshrined in Article II, Section 25 and Article X, Sections 2 and 3 of the 1987 Constitution, requires that the Governor's recommendation be given mandatory effect. Where a law is capable of two interpretations—one favoring centralized power in Malacañang and the other beneficial to local autonomy—the scales must be weighed in favor of autonomy. The nomination and appointment process for the PBO involves a sharing of power between local and national levels of government, requiring genuine interplay, a balancing of viewpoints, and a harmonization of proposals. Provincial and municipal budgets are prepared at the local level by officials who must work within their constraints; they are not formulated in the DBM and unilaterally imposed on local governments. The historical evolution from the 1935 Constitution's limitation of presidential power to "general supervision as may be provided by law," through R.A. No. 2264 and R.A. No. 5185, to the 1973 and 1987 Constitutions' explicit autonomy guarantees, confirms the constitutional direction toward meaningful local self-governance. Interpreting the Governor's recommending power as merely directory would frustrate this goal by allowing national officers to ignore the right of local governments to develop self-reliance in handling their own funds.

• Validity of Local Budget Circular No. 31, Section 6.0: Section 6.0 of Local Budget Circular No. 31, which reserves the DBM's right to fill vacancies when none of the Governor's nominees meet prescribed requirements, is ultra vires because it defeats the Governor's recommending power through a mere administrative issuance. The DBM may appoint only from the list of qualified recommendees nominated by the Governor. If none is qualified, the DBM must return the list to the Governor, explaining why no one meets the legal requirements, and ask for new recommendees who possess the necessary eligibilities and qualifications. By analogy, under Article VIII of the Constitution, the President appoints justices and judges from the list of nominees submitted by the Judicial and Bar Council and cannot reject all Council nominees to appoint a person of personal choice. The same principle applies: there can be no reservation of the right to fill a position with a person of the appointing power's personal choice.

• Validity of Almajose's Appointment: The appointment was formalized by DBM Undersecretary Cabuquit on August 1, 1988, upon Director Abella's recommendation, before the Governor was extended the courtesy of being informed that his nominees had been rejected. Director Galvez's subsequent requirement that the Governor submit at least three other names was a meaningless exercise, as Almajose's appointment had already been finalized. This complete disregard of the local government's prerogative, coupled with the smug belief that the DBM possessed absolute wisdom, authority, and discretion, constituted grave abuse of discretion. The appointment was accordingly nullified, and the DBM was ordered to appoint the PBO from among qualified nominees submitted by the Governor.

• Constitutional Preference for Local Autonomy in Statutory Interpretation — Where a law is capable of two interpretations, one favoring centralized power and the other beneficial to local autonomy, the scales must be weighed in favor of autonomy. The Court applied this principle to hold that the Governor's recommending power under E.O. No. 112 is mandatory, not directory, because the directory interpretation would frustrate the constitutional policy of local autonomy.

• Mandatory Recommendation in Shared Appointment Processes — The phrase "upon recommendation of the local chief executive concerned" in Executive Order No. 112 must be given mandatory effect. The appointing authority (DBM Secretary) may appoint only from the list of qualified recommendees nominated by the Governor. If none qualifies, the list must be returned to the Governor with an explanation and a request for new nominees. The appointment process involves a sharing of power between local and national levels of government, requiring genuine interplay and harmonization of proposals.

• Ultra Vires Administrative Issuances — An administrative circular cannot defeat or diminish a power granted by law or executive order. Section 6.0 of Local Budget Circular No. 31, reserving the DBM's right to fill vacancies outside the Governor's nominees, was declared ultra vires because it defeated the Governor's recommending power through a mere administrative issuance rather than through legislative or executive authority.

• Distinction Between Control and Supervision — Supervision goes no further than overseeing or the power of an officer to see that subordinate officers perform their duties. Control means the power to alter, modify, nullify, or set aside what a subordinate has done and to substitute the judgment of the former for that of the latter. The President has control over executive departments but only general supervision over local governments, as provided by law.

• "Where a law is capable of two interpretations, one in favor of centralized power in Malacañang and the other beneficial to local autonomy, the scales must be weighed in favor of autonomy." — This is the ratio decidendi, establishing the interpretive principle that constitutional policy on local autonomy tilts the balance in favor of decentralized power when statutory language is ambiguous.

• "The DBM may appoint only from the list of qualified recommendees nominated by the Governor. If none is qualified, he must return the list of nominees to the Governor explaining why no one meets the legal requirements and ask for new recommendees who have the necessary eligibilities and qualifications." — This defines the operative procedure mandated by the Court and nullifies the DBM's reserved power under Local Budget Circular No. 31.

• "It is for this reason that there should be a genuine interplay, a balancing of viewpoints, and a harmonization of proposals from both the local and national officials. It is for this reason that the nomination and appointment process involves a sharing of power between the two levels of government." — This articulates the doctrinal basis for treating the Governor's recommendation as a mandatory component of a shared appointment process, not a dispensable courtesy.

• Tecson vs. Salas, 34 SCRA 275 (1970) — Followed for the distinction between presidential control and supervision over local governments, establishing that the President's power over local governments is limited to general supervision as provided by law, not control. The Court relied on this distinction to underscore that national officers cannot unilaterally override local government prerogatives.

• Hebron vs. Reyes, 104 Phil. 175 (1958) — Referenced within Tecson vs. Salas for clarifying that presidential competence over local governments is general supervision as may be provided by law, and that the President must abide by statutory provisions governing disciplinary action against municipal officials.

• Mondano vs. Silvosa, 97 Phil. 143 (1955) — Referenced for the canonical definitions of supervision ("overseeing") and control (the power to alter or nullify subordinate actions), distinguishing the scope of executive authority over local governments.

• Section 1, Executive Order No. 112 — Provides that budget officers of provinces, cities, and municipalities shall be appointed by the Minister of Budget and Management upon recommendation of the local chief executive concerned, subject to civil service law, rules, and regulations. The Court interpreted the recommendation requirement as mandatory, not directory, in light of the constitutional policy on local autonomy.

• Article II, Section 25, 1987 Constitution — Declares the state policy ensuring the autonomy of local governments. Applied as the constitutional basis for favoring local autonomy in the interpretation of E.O. No. 112.

• Article X, Sections 2 and 3, 1987 Constitution — Guarantees that local government units shall enjoy local autonomy and mandates Congress to enact a local government code providing for decentralization. Applied as the constitutional framework supporting the mandatory nature of the Governor's recommending power.

• Section 6.0, Local Budget Circular No. 31 — Reserved the DBM's right to fill any existing vacancy where none of the nominees of the local chief executive meet prescribed requirements. Declared ultra vires and set aside for defeating the Governor's recommending power through a mere administrative issuance.

• Section 216, Batas Pambansa Blg. 337 — Vested the power to appoint the PBO in the Governor and prescribed the qualifications for the position. Cited as historical background showing the prior arrangement before E.O. No. 112 transferred the appointing power to the DBM Secretary.

• Section 11, Article VII, 1935 Constitution — Distinguished presidential control over executive departments from general supervision over local governments. Cited for the historical evolution of the local autonomy doctrine from the earliest organic act through the 1987 Constitution.

Fernan, C.J., Narvasa, Melencio-Herrera, Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Sarmiento, Griño-Aquino, Medialdea, Regalado, and Davide, Jr., JJ.