10068058tondo medical v ca.docx

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Technical Working Group after a series of workshops and analyses with inputs fromseveral consultants, program managers andtechnical staff possessing the adequateexpertise and experience in the health sector. It

provided for five general areas of reform: (1) toprovide fiscal autonomy to governmenthospitals; (2) secure funding for priority publichealth programs; (3) promote the developmentof local health systems and ensure its effectiveperformance; (4) strengthen the capacities of health regulatory agencies; and (5) expand thecoverage of the National Health InsuranceProgram (NHIP) .[2]

Petitioners questioned the first reform

agenda involving the fiscal autonomy of government hospitals, particularly the collectionof socialized user fees and the corporaterestructuring of government hospitals. The saidprovision under the HSRA reads:

Provide fiscal autonomy togovernmenthospitals . Governmenthospitals must be allowed tocollect socialized user fees sothey can reduce thedependence on direct subsidiesfrom the government. Their critical capacities like diagnosticequipment, laboratory facilitiesand medical staff capabilitymust be upgraded to effectivelyexercise fiscal autonomy. Suchinvestment must be cognizant of complimentary capacityprovided by public-privatenetworks. Moreover suchcapacities will allow governmenthospitals to supplement priority

public healthprograms. Appropriateinstitutional arrangement mustbe introduced such as allowingthem autonomy towardsconverting them intogovernment corporationswithout compromising their social responsibilities. As aresult, government hospitals are

expected to be morecompetitive and responsive tohealth needs.

Petitioners also assailed the issuance of a draftadministrative order issued by the DOH, dated 5January 2001, entitled Guidelines andProcedure in the Implementation of theCorporate Restructuring of Selected DOHHospitals to Achieve Fiscal Autonomy, andManagerial Flexibility to Start by January2001; [3] and Administrative Order No. 172 of the DOH, entitled Policies and Guidelines onthe Private Practice of Medical and ParamedicalProfessionals in Government HealthFacilities, [4] dated 9 January 2001, for imposing

an added burden to indigent Filipinos, whocannot afford to pay for medicine and medicalservices .[5]

Petitioners alleged that theimplementation of the aforementioned reformshad resulted in making free medicine and freemedical services inaccessible to economicallydisadvantaged Filipinos. Thus, they alleged thatthe HSRA is void for being in violation of thefollowing constitutional provisions :[6]

ART. III, SEC. 1. No personshall be deprived of life, libertyor property without due processof law, nor shall any person bedenied the equal protection of the law.

ART II, SEC. 5. Themaintenance of peace andorder, the protection of life,liberty, and property, and thepromotion of the general welfare

are essential for the enjoymentof all the people of the blessingsof democracy.

ART II, SEC. 9. The State shallpromote a just and dynamicsocial order that will ensure theprosperity and independence of the nation and free the peoplefrom poverty through policies
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that provide adequate socialservices, promote fullemployment, a rising standardof living and an improved qualityof life for all.

ART II, SEC. 10. The Stateshall promote social justice in allphases of national development.

ART II, SEC. 11. The Statevalues the dignity of everyhuman person and guaranteesfull respect for human rights.

ART II, SEC. 13. The Staterecognizes the vital role of theyouth in nation-building andshall promote and protect their physical, moral, spiritual,intellectual and social well-beingx x x.

ART II, SEC. 18. The Stateaffirms labor as a primary socialeconomic force. It shall protectthe rights of workers andpromote their welfare.

ART XV, SEC. 1. The Staterecognizes the Filipino family asthe foundation of thenation. Accordingly, it shall

strengthen its solidarity andactively promote its totaldevelopment.

ART XV, SEC. 3. The Stateshall defend:

x x x x

(2) the right of children toassistance, including proper care and nutrition, and specialprotection from all forms of

neglect, abuse, cruelty,exploitation and other conditionsprejudicial to their development.

x x x x

ART XIII, SEC. 14. The Stateshall protect working women byproviding safe and healthfulworking conditions, taking into

account their maternalfunctions, and such facilities andopportunities that will enhancetheir welfare and enable them torealize their full potential in theservice of the nation.

ART II, SEC. 15. The Stateshall protect and promote theright to health of the people andinstill health consciousnessamong them.

ART XIII, SEC. 11. The Stateshall adopt an integrated andcomprehensive approach tohealth development which shallendeavor to make essentialgoods, health and other socialservices available to all peopleat affordable cost. There shallbe priority for the needs of theunderprivileged sick, elderly,disabled, women, and children.The State shall endeavor toprovide free medical care topaupers.

EXECUTIVE ORDER NO. 102

On 24 May 1999, then PresidentJoseph Ejercito Estrada issued Executive Order No. 102, entitled Redirecting the Functions andOperations of the Department of Health, whichprovided for the changes in the roles, functions,and organizational processes of theDOH. Under the assailed executive order, theDOH refocused its mandate from being the soleprovider of health services to being a provider of specific health services and technicalassistance, as a result of the devolution of basic

services to local government units. Theprovisions for the streamlining of the DOH andthe deployment of DOH personnel to regionaloffices and hospitals read:

Sec. 4. Preparation of aRationalization and StreamliningPlan. In view of the functionaland operational redirection in


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the DOH, and to effect efficiencyand effectiveness in itsactivities, the Department shallprepare a Rationalization andStreamlining Plan (RSP) whichshall be the basis of theintended changes. The RSPshall contain the following:

a) the specific shift inpolicy directions,functions, programs andactivities/strategies;

b) the structural andorganizational shift,stating the specificfunctions and activitiesby organizational unitand the relationship of each units;

c) the staffing shift,highlighting anditemizing the existingfilled and unfilledpositions; and

d) the resourceallocation shift,specifying the effects of the streamline set-up onthe agency budgetaryallocation and indicatingwhere possible, savingshave been generated.

The RSP shall [be] submitted tothe Department of Budget andManagement for approvalbefore the corresponding shiftsshall be affected (sic) by theDOH Secretary.

Sec. 5. Redeployment of Personnel. The redeploymentof officials and other personnelon the basis of the approvedRSP shall not result in

diminution in rank andcompensation of existingpersonnel. It shall take intoaccount all pertinent CivilService laws and rules.

Section 6. Funding. Thefinancial resources needed toimplement the Rationalizationand Streamlining Plan shall be

taken from funds available in theDOH, provided that the totalrequirements for theimplementation of the revisedstaffing pattern shall not exceedavailable funds for PersonnelServices.

Section 7. SeparationBenefits. Personnel who opt tobe separated from the serviceas a consequence of theimplementation of this ExecutiveOrder shall be entitled to thebenefits under existing laws. Inthe case of those who are notcovered by existing laws, theyshall be entitled to separationbenefits equivalent to onemonth basic salary for everyyear of service or proportionateshare thereof in addition to theterminal fee benefits to whichhe/she is entitled under existinglaws.

Executive Order No. 102 was enactedpursuant to Section 17 of the Local GovernmentCode (Republic Act No. 7160), which providedfor the devolution to the local government unitsof basic services and facilities, as well asspecific health-related functions andresponsibilities .[7]

Petitioners contended that a law, suchas Executive Order No. 102, which effects thereorganization of the DOH, should be enactedby Congress in the exercise of its legislativefunction. They argued that Executive Order No.102 is void, having been issued in excess of thePresidents authority .[8]

Moreover, petitioners averred that theimplementation of the Rationalization andStreamlining Plan (RSP) was not in accordancewith law. The RSP was allegedly implementedeven before the Department of Budget andManagement (DBM) approved it. They alsomaintained that the Office of the President
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with the implementation of the RSP, only after both the DBM andPresidential Committee onEffective Governance (PCEG) approved theRSP on 8 July 2000 and 17 July 2000,respectively.

Petitioners filed with the Court of Appealsa Motion for Reconsideration of the Decisionrendered on 26 November 2004, but the samewas denied in a Resolution dated 7 March 2005.

Hence, the present petition, where thefollowing issues are raised:

I.

THE HONORABLE COURT OF APPEALS COMMITTEDMANIFEST ERROR IN RULINGTHAT ANY QUESTION ONTHE WISDOM AND EFFICACYOF THE HEALTH SECTORREFORM AGENDA IS NOT AJUSTICIABLE CONTROVERSY

AND THAT THECONSTITUTIONALPROVISIONS PROTECTINGTHE HEALTH OF THEFILIPINO PEOPLE ARE NOTJUDICIALLY ENFORCEABLE;

II.

THE HONORABLE COURT OF APPEALS COMMITTEDMANIFEST ERROR IN RULINGTHAT PETITIONERSCOMPLAINT THATEXECUTIVE ORDER NO. 102IS DETRIMENTAL TO THEFILIPINO IS LIKEWISE NOT AJUSTICIABLE CONTROVERSY

AND THAT THE PRESIDENT

HAS THE AUTHORITY TOISSUE SAID ORDER; AND

III.

THE HONORABLE COURT OF APPEALS COMMITTEDMANIFEST ERROR INUPHOLDING TECHNICALITIESOVER AND ABOVE THE

ISSUES OFTRANSCENDENTALIMPORTANCE RAISED IN THEPETITION BELOW. [16]

The Court finds the present petition to bewithout merit.

Petitioners allege that the HSRA shouldbe declared void, since it runs counter to theaspiration and ideals of the Filipino people asembodied in the Constitution .[17] They claim thatthe HSRAs policies of fiscal autonomy, incomegeneration, and revenue enhancement violateSections 5, 9, 10, 11, 13, 15 and 18 of Article II,Section 1 of Article III; Sections 11 and 14 of

Article XIII; and Sections 1 and 3 of Article XV of the 1987 Constitution. Such policies allegedlyresulted in making inaccessible free medicineand free medical services. This contention isunfounded.

As a general rule, the provisions of theConstitution are considered self-executing, anddo not require future legislation for their enforcement. For if they are not treated as self-executing, the mandate of the fundamental lawcan be easily nullified by the inaction of Congress .[18] However, some provisions havealready been categorically declared by thisCourt as non self-executing.

In Tanada v. Angara ,[19] the Courtspecifically set apart the sections found under

Article II of the 1987 Constitution as non self-executing and ruled that such broad principlesneed legislative enactments before they can be

implemented:

By its very title, Article IIof the Constitution is adeclaration of principles andstate policies. x x x. Theseprinciples in Article II are notintended to be self-executingprinciples ready for enforcement
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through the courts. They areused by the judiciary as aids or as guides in the exercise of itspower of judicial review, and bythe legislature in its enactmentof laws.

In Basco v. Philippine Amusement and Gaming Corporation ,[20] this Court declared thatSections 11, 12, and 13 of Article II; Section 13of Article XIII; and Section 2 of Article XIV of the1987 Constitution are not self-executingprovisions. In Tolentino v. Secretary of Finance ,[21] the Court referred to Section 1 of

Article XIII and Section 2 of Article XIV of theConstitution as moral incentives to legislation,

not as judicially enforceable rights. Theseprovisions, which merely lay down a generalprinciple, are distinguished from other constitutional provisions as non self-executingand, therefore, cannot give rise to a cause of action in the courts; they do not embody

judicially enforceable constitutional rights . [22]

Some of the constitutional provisionsinvoked in the present case were taken from

Article II of the Constitution -- specifically,

Sections 5, 9, 10, 11, 13, 15 and 18 -- theprovisions of which the Court categorically ruledto be non self-executing in the aforecited caseof Taada v. Angara .[23]

Moreover, the records are devoid of anyexplanation of how the HSRA supposedlyviolated the equal protection and due processclauses that are embodied in Section 1 of ArticleIII of the Constitution. There were no allegationsof discrimination or of the lack of due process in

connection with the HSRA. Since they failed tosubstantiate how these constitutionalguarantees were breached, petitioners areunsuccessful in establishing the relevance of this provision to the petition, and consequently,in annulling the HSRA.

In the remaining provisions, Sections 11and 14 of Article XIII and Sections 1 and 3 of

Article XV, the State accords recognition to theprotection of working women and the provisionfor safe and healthful working conditions; to the

adoption of an integrated and comprehensiveapproach to health; to the Filipino family; and tothe right of children to assistance and specialprotection, including proper care andnutrition. Like the provisions that were declaredas non self-executory in the cases of Basco v.Philippine Amusement and Gaming Corporation [24] and Tolentino v. Secretary of Finance ,[25] they are mere statements of principles and policies. As such, they are meredirectives addressed to the executive and the

legislative departments. If unheeded, theremedy will not lie with the courts; but rather, theelectorates displeasure may be manifested intheir votes.

The rationale for this is given by JusticeDante Tinga in his Separate Opinion in the caseof Agabon v. National Labor RelationsCommissio n [26]:

x x x However, to declare thatthe constitutional provisions areenough to guarantee the fullexercise of the rights embodiedtherein, and the realization of the ideals therein expressed,would be impractical, if notunrealistic. The espousal of such view presents thedangerous tendency of beingoverbroad andexaggerated. x x x Subsequentlegislation is still needed todefine the parameters of these

guaranteedrights. x x x Without specificand pertinent legislation, judicialbodies will be at a loss,formulating their own conclusionto approximate at least the aimsof the Constitution.
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The HSRA cannot be nullified basedso lely on petitioners bare allegations that itviolates the general principles expressed in thenon self-executing provisions they citeherein. There are two reasons for denying a

cause of action to an alleged infringement of broad constitutional principles: basicconsiderations of due process and thelimitations of judicial power . [27]

Petitioners also claim that ExecutiveOrder No. 102 is void on the ground that it wasissued by the President in excess of hisauthority. They maintain that the structural andfunctional reorganization of the DOH is anexercise of legislative functions, which the

President usurped when he issued ExecutiveOrder No. 102 .[28] This line of argument iswithout basis.

This Court has already ruled in anumber of cases that the President may, byexecutive or administrative order, direct thereorganization of government entities under theExecutive Department .[29] This is alsosanctioned under the Constitution, as well asother statutes.

Section 17, Article VII of the 1987Constitution, clearly states: [T]he presidentshall have control of all executive departments,bureaus and offices. Section 31, Book III,Chapter 10 of Executive Order No. 292, alsoknown as the Administrative Code of 1987reads:

SEC. 31. Continuing Authority of the Presidentto Reorganize his Office - ThePresident, subject to the policyin the Executive Office and inorder to achieve simplicity,economy and efficiency, shallhave continuing authority toreorganize the administrativestructure of the Office of thePresident. For this purpose, he

may take any of the followingactions:

(1) Restructure theinternal organization of theOffice of the President Proper,including the immediate offices,the Presidential Special

Assistants/Advisers System andthe Common Staff SupportSystem, by abolishingconsolidating or merging unitsthereof or transferring functionsfrom one unit to another;

(2) Transfer anyfunction under the Office of thePresident to any other Department or Agency as wellas transfer functions to theOffice of the President fromother Departments or Agencies;and

(3) Transfer anyagency under the Office of thePresident to any other department or agency as well astransfer agencies to the Officeof the President from other Departments or agencies.

In Domingo v. Zamora ,[30] this Courtexplained the rationale behind the Presidentscontinuing authority under the AdministrativeCode to reorganize the administrative structureof the Office of the President. The law grantsthe President the power to reorganize the Officeof the President in recognition of the recurringneed of every President to reorganize his or her office to achieve simplicity, economy andefficiency. To remain effective and efficient, itmust be capable of being shaped and reshapedby the President in the manner the Chief Executive deems fit to carry out presidentialdirectives and policies.

The Administrative Code provides thatthe Office of the President consists of the Officeof the President Proper and the agencies under
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Sec. 77. OrganizedChanges. Unless otherwiseprovided by law or directed bythe President of the Philippines,no changes in key positions or organizational units in anydepartment or agency shall beauthorized in their respectiveorganizational structures andfunded from appropriationsprovided by this Act.

Clearly, Executive Order No. 102 is wellwithin the constitutional power of the Presidentto issue. The President did not usurp anylegislative prerogative in issuing Executive Order No. 102. It is an exercise of the Presidents

constitutional power of control over theexecutive department, supported by theprovisions of the Administrative Code,recognized by other statutes, and consistentlyaffirmed by this Court.

Petitioners also pointed out severalflaws in the implementation of Executive Order No. 102, particularly the RSP. However, thesecontentions are without merit and are insufficientto invalidate the executive order.

The RSP was allegedly implementedeven before the DBM approved it. The factsshow otherwise. It was only after the DBMapproved the Notice of Organization, Staffingand Compensation Action on 8 July 2000 ,[33] andafter the Presidential Committee on EffectiveGovernance (PCEG) issued on 17 July 2000Memorandum Circular No. 62 ,[34]approving theRSP, that then DOH Secretary AlbertoG. Romualdez issued on 28 July 2000

Department Circular No. 275-C, Series of 2000 ,[35] creating the different committees toimplement the RSP.

Petitioners also maintain that the Officeof the President should have issued anadministrative order to carry out thestreamlining, but that it failed to do so. Such

objection cannot be given any weightconsidering that the acts of the DOH Secretary,as an alter ego of the President, are presumedto be the acts of the President. The members of the Cabinet are subject at all times to the

disposition of the President since they aremerely his alter egos .[36] Thus, their acts,performed and promulgated in the regular course of business, are, unless disapproved bythe President, presumptively acts of thePresident .[37] Significantly, the acts of the DOHSecretary were clearly authorized by thePresident, who, thru the PCEG, issued theaforementioned Memorandum Circular No. 62,sanctioning the implementation of the RSP.

PetitionersElsa Odonzo Guevarra, Arcadio B. Gonzales,Jose G. Galang, Domingo P. Manay, EduardoP. Galope, Remedios M. Ysmael, AlfredoU. Bacuata, andEdgardo Damicog, all DOHemployees, assailed the validity of ExecutiveOrder No. 102 on the ground that they werelikely to lose their jobs, and that some of themwere suffering from the inconvenience of havingto travel a longer distance to get to their newplace of work, while other DOH employees hadto relocate to far-flung areas.

In several cases, this Court regardedreorganizations of government units or departments as valid, for so long as they arepursued in good faith that is, for the purpose of economy or to make bureaucracy moreefficient .[38] On the other hand, if thereorganization is done for the purpose of defeating security of tenure or for ill-motivated

political purposes, any abolition of positionwould be invalid. None of these circumstancesare applicable since none of the petitioners wereremoved from public service, nor did theyidentify any action taken by the DOH that wouldunquestionably result in their dismissal. Thereorganization that was pursued in the presentcase was made in good faith. The RSP was
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purpose and its efficiency to accomplish the enddesired, not from its effects in a particular case .[40]

In a number of cases , [41] the Court

upheld the standing of citizens who filed suits,wherein the transcendental importance of theconstitutional question justified the granting of relief. In spite of these rulings, the Court,in Domingo v. Carague ,[42] dismissed the petitionwhen petitioners therein failed to show anypresent substantial interest. It demonstrated howeven in the cases in which the Court declaredthat the matter of the case was of transcendental importance, the petitioners mustbe able to assert substantial interest. Present

substantial interest, which will enable a party toquestion the validity of the law, requires that aparty sustained or will sustain direct injury as aresult of its enforcement .[43] It is distinguishedfrom a mere expectancy or future, contingent,subordinate, or inconsequential interest . [44]

In the same way, the Court,in Telecommunications & Broadcast Attorneys of the Philippines, Inc. v. Comelec ,[45] ruled that acitizen is allowed to raise a constitutionalquestion only when he can show that he haspersonally suffered some actual or threatenedinjury as a result of the allegedly illegal conductof the government; the injury is fairly traceable tothe challenged action; and the injury is likely tobe redressed by a favorable action. This caselikewise stressed that the rule on constitutionalquestions which are of transcendentalimportance cannot be in voked where a partyssubstantive claim is without merit. Thus, a

partys standing is determined by thesubstantive merit of his case or a preliminaryestimate thereof. After a careful scrutiny of thepetitioners substantive claims, this Court findsthat the petitioners miserably failed to show anymerit to their claims.

IN VIEW OF THE FOREGOING, theinstant Petition is DENIED. ThisCourt AFFIRMSthe assailed Decision of theCourt of Appeals, promulgated on 26 November 2004, declaring both the HSRA and Executive

Order No. 102 as valid. No costs.

SO ORDERED.

MINITA V. CHICO-NAZARIO

Associa te Ju s t ice

WE CONCUR:

REYNATO S. PUNOChief Justice

LEONARDO A. QUISUMBING Associate Justice

C

ANGELINA SANDOVAL-GUTIERREZ Associate Justice

MA. ALICIA AUSTRIA-MARTINEZ Associate Justice

CONCHITA CARPIO MORALES Associate Justice
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DANTE O. TINGA Associate Justice

CANCIO C. GARCIA Associate Justice

PRESBITERO J. VELASCO, JR. Associate Justice

ANTONIO EDUARDO B. NACHURA Associate Justice

C E R T I F I C A T I O N

Pursuant to Article VIII, Section 13 of theConstitution, it is hereby certified that theconclusions in the above Decision were reachedin consultation before the case was assigned tothe writer of the opinion of the Court.

REYNATO S. PUNOChief Justice

[1] Penned by Associate Justice CeliaC. Librea-Leagogo with AssociateJustices Andres B. Reyes, Jr. and LucasP. Bersamin, concurring; rollo, pp. 214-254.

[2] Id. at 294-296.[3] The rationale for this draftadministrative order reads:

In line with the goal of theHealth Sector Reform Agenda (HSRA)of providing equitable quality healthservices, the hospital reforms wereinitiated to complement the other HSRAcomponents. The objectives of theHospital Reform component includeamong others, the following to promoteefficiency in hospital operations and

management; to enhance thecapabilities through facilities and humanresource upgrading; and to attain fiscalautonomy and managerial flexibilitywhile maintain the governments socialresponsibility for the indigentpatients.

With this framework, thecorporate restructuring of DOHHospitals into government owned

and controlled corporations (GOCC)was identified as the most effectivemeans to attain the above objectives.

[4] The rationale for this administrativeorder reads:

The Department of Healthencourages the employment of physicians and paramedical personnelwho are experts in their field of practicein various government hospitals andother government health facilities. It isenvisioned to attract the best and thebrightest professionals for medical andparamedical positions, in order to 1)provide adequate quality medical care topatients especially the indigent; 2)teach, train and interact with the other medical and paramedical professionalsand; 3) Conduct relevant studies andresearch thereby enhancing the qualityof medical and health care deliverysystems.

As an incentive and inrecognition for their commitment toremain as Members of the hospital staff for a longer period for continuousimprovement of the health care deliveryservice of the facility, private practice isallowed.

[5] Rollo , pp. 96-98.[6] Id. at 98-102.[7] SEC. 17. Basic Services and

Facilities. - (a) Local government units

shall endeavor to be self-reliant andshall continue exercising the powersand discharging the duties and functionscurrently vested upon them. They shallalso discharge the functions andresponsibilities of national agenciesand offices devolved to them pursuantto this Code. Local government unitsshall likewise exercise such other powers and discharge such other functions and responsibilities as arenecessary, appropriate, or incidental toefficient and effective provision of the

basic services and facilities enumeratedherein.(b) Such basic services and facilities

include, but are not limited to, thefollowing:

(1) For a Barangay:x x x x

(ii) Health and social welfareservices which include
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In order to properly andimmediately address the appeals,issues and concerns of personnel, thefollowing rules shall apply:1. Appeals, oversights, issues

and concerns related to personnelselection and placement shall behandled by an AppealsCommittee.

2. For proper documentation, allappeals shall be made inwriting. An Appeals Form shall bemade available for all personnel.

3. All personnel concerned shallbe given opportunity to presenttheir side to assure utmostobjectivity and impartiality. If andwhen necessary, hearings shallbe conducted.

4. The Appeals Committee shallbe expected to resolve issues,recommend options to theEXECOM or the concerned

personnel within 15 working daysupon receipt of the said appeal.

[40] David v. Macapagal-Arroyo , G.R.Nos. 171396, 171409, 171485, 171483,171400, 171489, 171424, 3 May 2006,489 SCRA 160, 258.

[41] Agan, Sr. v. Philippine International Air Terminals Co., Inc., 450 Phil. 744,803-804 (2003); Chavez v. Public Estates Authority , 433 Phil. 506, 526-528 (2002); and Kilosbayan, Inc.v. Guingona , G.R. 113375, 5 May 1994,232 SCRA 110, 139.

[42] G.R. No. 161065, 15 April 2005, 456SCRA 450, 454-456.[43] National Economic Protectionism

Association v. Ongpin , G.R. No.67752, 10 April 1989, 171 SCRA 657,665.

[44] Montesclaros v. Commission onElections , 433 Phil. 620, 635-636 (2002).[45] 352 Phil. 153, 168-169 (1998).
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