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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
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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
Page 5VOLUME II, ISSUE No. 12
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
Page 6 L C A LINES
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).
REVENUE MEMORAN-DUM CIRCULAR NO.
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.
REVENUE MEMORAN-DUM CIRCULAR NO.
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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SUPREME COURT ISSUANCES
Page 7VOLUME II, ISSUE No. 12
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
The memorandum order
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.
The memorandum order
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.
SUPREME COURT ISSUANCES
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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Page 9VOLUME II, ISSUE No. 12
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.
SUPREME COURT ISSUANCES
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-
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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;
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(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.
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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
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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
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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
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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.
ISSUE: Whether or not
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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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.
ISSUE: Whether or not
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),
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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
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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-
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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
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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