135) Central Bank Employees Assoc. vs. BSP (G.R. No. 148208, Dec. 15, 2004)

2/20/2021 SUPREME COURT REPORTS ANNOTATED VOLUME 446
VOL. 446, DECEMBER 15, 2004 299

Central Bank Employees Association, Inc. vs. Bangko Sentral ng
Pilipinas
*
G.R. No. 148208. December 15, 2004.
CENTRAL BANK (now Bangko Sentral ng Pilipinas)

EMPLOYEES ASSOCIATION, INC., petitioner, vs. BANGKO
SENTRAL NG PILIPINAS and the EXECUTIVE SECRETARY,
respondents.
Constitutional Law; Equal Protection Clause; The “equal protection”

clause does not prevent the Legislature from establishing classes of
individuals or objects upon which different rules shall operate—so long as
the classification is not unreasonable.—It is settled in constitutional law
that the “equal protection” clause does not prevent the Legislature from
establishing classes of individuals or objects upon which different rules
shall operate—so long as the classification is not unreasonable. As held in
Victoriano v. Elizalde Rope Workers’ Union, and reiterated in a long line of
cases: The guaranty of equal protection of the laws is not a guaranty of
equality in the application of the laws upon all citizens of the state. It is not,
therefore, a requirement, in order to avoid the constitutional prohibition
against inequality, that every man, woman and child should be affected alike
by a statute. Equality of operation of statutes does not mean indiscriminate
operation on persons merely as such, but on persons according to the
circumstances surrounding them. It guarantees equality, not identity of
rights. The Constitution does not require that things which are different in
fact be treated in law as though they were the same. The equal protection
clause does not forbid discrimination as to things that are different. It does
not prohibit legislation which is limited either in the object to which it is
directed or by the territory within which it is to operate.
Same; In the case at bar, it is clear in the legislative deliberations that
the exemption of officers (SG 20 and above) from the SSL was intended to
address the BSP’s lack of competitiveness in terms of attracting competent
officers and executives—it was not intended to discriminate against the
rank-and-file, and the resulting discrimination or distinction has a rational
basis and is not palpably, purely, and entirely arbitrary in the legislative
sense.—Congress is allowed a
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* EN BANC.
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300 SUPREME COURT REPORTS ANNOTATED
Central Bank Employees Association, Inc. vs. Bangko Sentral ng Pilipinas
wide leeway in providing for a valid classification. The equal protection

clause is not infringed by legislation which applies only to those persons
falling within a specified class. If the groupings are characterized by
substantial distinctions that make real differences, one class may be treated
and regulated differently from another. The classification must also be
germane to the purpose of the law and must apply to all those belonging to
the same class. In the case at bar, it is clear in the legislative deliberations
that the exemption of officers (SG 20 and above) from the SSL was
intended to address the BSP’s lack of competitiveness in terms of attracting
competent officers and executives. It was not intended to discriminate
against the rank-and-file. If the end-result did in fact lead to a disparity of
treatment between the officers and the rank-and-file in terms of salaries and
benefits, the discrimination or distinction has a rational basis and is not
palpably, purely, and entirely arbitrary in the legislative sense.
Same; Enrolled Bill Doctrine; As early as 1947 and reiterated in
subsequent cases, the Supreme Court has subscribed to the conclusiveness
of an enrolled bill to refuse invalidating a provision of law, on the ground
that the bill from which it originated contained no such provision and was
merely inserted by the bicameral conference committee of both Houses.—
That the provision was a product of amendments introduced during the
deliberation of the Senate Bill does not detract from its validity. As early as
1947 and reiterated in subsequent cases, this Court has subscribed to the
conclusiveness of an enrolled bill to refuse invalidating a provision of law,
on the ground that the bill from which it originated contained no such
provision and was merely inserted by the bicameral conference committee
of both Houses.
Same; Doctrine of Relative Constitutionality; A statute valid at one
time may become void at another time because of altered circumstances.—
The constitutionality of a statute cannot, in every instance, be determined by
a mere comparison of its provisions with applicable provisions of the
Constitution, since the statute may be constitutionally valid as applied to
one set of facts and invalid in its application to another. A statute valid at
one time may become void at another time because of altered
circumstances. Thus, if a statute in its practical operation becomes arbitrary
or confiscatory, its validity, even
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VOL. 446, DECEMBER 15, 2004 301
though affirmed by a former adjudication, is open to inquiry and

investigation in the light of changed conditions.
Same; Same; Government Financial Institutions (GFIs); Salary
Standardization Law (R.A. No. 6758); It is noteworthy that the subsequent
charters of the seven other GFIs share the common proviso of a blanket
exemption of all their employees from the coverage of the SSL, expressly or
impliedly.—We take judicial notice that after the new BSP charter was
enacted in 1993, Congress also undertook the amendment of the charters of
the GSIS, LBP, DBP and SSS, and three other GFIs, from 1995 to 2004,
viz.: 1. R.A. No. 7907 (1995) for Land Bank of the Philippines (LBP); 2.
R.A. No. 8282 (1997) for Social Security System (SSS); 3. R.A. No. 8289
(1997) for Small Business Guarantee and Finance Corporation, (SBGFC); 4.
R.A. No. 8291 (1997) for Government Service Insurance System (GSIS); 5.
R.A. No. 8523 (1998) for Development Bank of the Philippines (DBP); 6.
R.A. No. 8763 (2000) for Home Guaranty Corporation (HGC); and 7. R.A.
No. 9302 (2004) for Philippine Deposit Insurance Corporation (PDIC). It is
noteworthy, as petitioner points out, that the subsequent charters of the
seven other GFIs share this common proviso: a blanket exemption of all
their employees from the coverage of the SSL, expressly or impliedly.
Same; Same; Same; Same; Standards of Review; Strict Scrutiny; Two-
Tier Analysis; While the prior view on the constitutionality of R.A. No. 7653
was confined to an evaluation of its classification between the rank-and-file
and the officers of the BSP, which was found reasonable because there were
substantial distinctions that made real differences between the two classes,
subsequent enactments involving the exemption of all rank and file
employees of other GFIs constitute significant changes in circumstance that
considerably alter the reasonability of the continued operation of the last
proviso of Section 15(c), Article II of Republic Act No. 7653, thereby
exposing the proviso to more serious scrutiny.—The prior view on the
constitutionality of R.A. No. 7653 was confined to an evaluation of its
classification between the rank-and-file and the officers of the BSP, found
reasonable because there were substantial distinctions that made real
differences between the two classes. The above-mentioned subsequent
enactments, however, constitute significant changes in circumstance that
considerably alter the reasonability of the continued operation of the last
proviso of Section 15(c), Article II of Republic Act
302
No. 7653, thereby exposing the proviso to more serious scrutiny. The
scrutiny relates to the constitutionality of the classification—albeit made
indirectly as a consequence of the passage of eight other laws—between the
rank-and-file of the BSP and the seven other GFIs. The classification must
not only be reasonable, but must also apply equally to all members of the
class. The proviso may be fair on its face and impartial in appearance but it
cannot be grossly discriminatory in its operation, so as practically to make
unjust distinctions between persons who are without differences.
Same; Same; Same; Same; Same; Same; Same; The second level of
inquiry deals with the following questions—Given that Congress chose to
exempt other GFIs (aside the BSP) from the coverage of the SSL, can the
exclusion of the rank-and-file employees of the BSP stand constitutional
scrutiny in the light of the fact that Congress did not exclude the rank-and-
file employees of the other GFIs? Is Congress’ power to classify so
unbridled as to sanction unequal and discriminatory treatment, simply
because the inequity manifested itself, not instantly through a single overt
act, but gradually and progressively, through seven separate acts of
Congress? Is the right to equal protection of the law bounded in time and
space?—Stated differently, the second level of inquiry deals with the
following questions: Given that Congress chose to exempt other GFIs (aside
the BSP) from the coverage of the SSL, can the exclusion of the rankand-
file employees of the BSP stand constitutional scrutiny in the light of the
fact that Congress did not exclude the rank-and-file employees of the other
GFIs? Is Congress’ power to classify so unbridled as to sanction unequal
and discriminatory treatment, simply because the inequity manifested itself,
not instantly through a single overt act, but gradually and progressively,
through seven separate acts of Congress? Is the right to equal protection of
the law bounded in time and space that: (a) the right can only be invoked
against a classification made directly and deliberately, as opposed to a
discrimination that arises indirectly, or as a consequence of several other
acts; and (b) is the legal analysis confined to determining the validity within
the parameters of the statute or ordinance (where the inclusion or exclusion
is articulated), thereby proscribing any evaluation vis-à-vis the grouping, or
the lack thereof, among several similar enactments made over a period of
time?
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Same; Same; Same; Same; Same; Same; Same; Separation of Powers;

In the second level of scrutiny, the inequality of treatment cannot be justified
on the mere assertion that each exemption rests “on a policy consideration
by the legislature”—there is nothing inherently sacrosanct in a policy

determination by Congress or by the Executive as it cannot run riot and
overrun the ramparts of protection of the Constitution; The “policy
determination” argument may support the inequality of treatment between
the rank-and-file and the offices of the BSP, but it cannot justify the
inequality of treatment between BSP rank-and-file and other GFIs’ who are
similarly situated; In the field of equal protection, the guarantee includes
the prohibition against enacting laws that allow invidious discrimination
directly or indirectly.—In this second level of scrutiny, the inequality of
treatment cannot be justified on the mere assertion that each exemption
(granted to the seven other GFIs) rests “on a policy determination by the
legislature.” All legislative enactments necessarily rest on a policy
determination—even those that have been declared to contravene the
Constitution. Verily, if this could serve as a magic wand to sustain the
validity of a statute, then no due process and equal protection challenges
would ever prosper. There is nothing inherently sacrosanct in a policy
determination made by Congress or by the Executive; it cannot run riot and
overrun the ramparts of protection of the Constitution. In fine, the “policy
determination” argument may support the inequality of treatment between
the rank-and-file and the officers of the BSP, but it cannot justify the
inequality of treatment between BSP rank-and-file and other GFIs’ who are
similarly situated. It fails to appreciate that what is at issue in the second
level of scrutiny is not the declared policy of each law per se, but the
oppressive results of Congress’ inconsistent and unequal policy towards the
BSP rank-and-file and those of the seven other GFIs. At bottom, the second
challenge to the constitutionality of Section 15(c), Article II of Republic Act
No. 7653 is premised precisely on the irrational discriminatory policy
adopted by Congress in its treatment of persons similarly situated. In the
field of equal protection, the guarantee that “no person shall be . . . denied
the equal protection of the laws” includes the prohibition against enacting
laws that allow invidious discrimination, directly or indirectly. If a law has
the effect of denying the equal protection of the law, or permits such denial,
it is unconstitutional.
304
Same; Same; Same; Same; Same; Same; Same; As regards the

exemption from the coverage of the SSL, there exists no substantial
distinctions so as to differentiate the BSP rank-and-file from the other rank-
and-file of the seven GFIs—our legal history shows that GFIs have long
been recognized as comprising one distinct class, separate from other
government entities.—It is against this standard that the disparate treatment
of the BSP rank-and-file from the other GFIs cannot stand judicial scrutiny.
For as regards the exemption from the coverage of the SSL, there exist no
substantial distinctions so as to differentiate, the BSP rank-and-file from the

other rank-and-file of the seven GFIs. On the contrary, our legal history
shows that GFIs have long been recognized as comprising one distinct
class, separate from other governmental entities.
Same; Same; Same; Same; Same; Same; The argument that the rank-
and-file employees of the seven GFIs were exempted because of the
importance of their institution’s mandate cannot stand any more than an
empty sack can stand.—It has been proffered that legislative deliberations
justify the grant or withdrawal of exemption from the SSL, based on the
perceived need “to fulfill the mandate of the institution concerned
considering, among others, that: (1) the GOCC or GFI is essentially
proprietary in character; (2) the GOCC or GFI is in direct competition with
their [sic] counterparts in the private sector, not only in terms of the
provisions of goods or services, but also in terms of hiring and retaining
competent personnel; and (3) the GOCC or GFI are or were [sic]
experiencing difficulties filling up plantilla positions with competent
personnel and/or retaining these personnel. The need for the scope of
exemption necessarily varies with the particular circumstances of each
institution, and the corresponding variance in the benefits received by the
employees is merely incidental.” The fragility of this argument is manifest.
First, the BSP is the central monetary authority, and the banker of the
government and all its political subdivisions. It has the sole power and
authority to issue currency; provide policy directions in the areas of money,
banking, and credit; and supervise banks and regulate finance companies
and non-bank financial institutions performing quasi-banking functions,
including the exempted GFIs. Hence, the argument that the rank-and-file
employees of the seven GFIs were exempted because of the importance of
their institution’s mandate cannot stand any more than an empty sack can
stand.
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VOL. 446, DECEMBER 15, 2004 305
Same; Same; Same; Same; Same; Same; It is patent that the

classification made between the BSP rank-and-file and those of the other
seven GFIs was inadvertent, and not intended, i.e., it was not based on any
substantial distinction vis-à-vis the particular circumstances of each GFI.—
It is certainly misleading to say that “the need for the scope of exemption
necessarily varies with the particular circumstances of each institution.”
Nowhere in the deliberations is there a cogent basis for the exclusion of the
BSP rank-and-file from the exemption which was granted to the rank-and-
file of the other GFIs and the SEC. As point in fact, the BSP and the seven
GFIs are similarly situated in so far as Congress deemed it necessary for
these institutions to be exempted from the SSL. True, the SSL-exemption of
the BSP and the seven GFIs was granted in the amended charters of each
GFI, enacted separately and over a period of time. But it bears emphasis
that, while each GFI has a mandate different and distinct from that of
another, the deliberations show that the raison d’être of the SSL-exemption
was inextricably linked to and for the most part based on factors common to
the eight GFIs, i.e., (1) the pivotal role they play in the economy; (2) the
necessity of hiring and retaining qualified and effective personnel to carry
out the GFI’s mandate; and (3) the recognition that the compensation
package of these GFIs is not competitive, and fall substantially below
industry standards. Considering further that (a) the BSP was the first GFI
granted SSL exemption; and (b) the subsequent exemptions of other GFIs
did not distinguish between the officers and the rank-and-file; it is patent
that the classification made between the BSP rank-and-file and those of the
other seven GFIs was inadvertent, and NOT intended, i.e., it was not based
on any substantial distinction vis-à-vis the particular circumstances of each
GFI. Moreover, the exemption granted to two GFIs makes express reference
to allowance and fringe benefits similar to those extended to and currently
enjoyed by the employees and personnel of other GFIs, underscoring that
GFIs are a particular class within the realm of government entities.
Same; Same; Same; Same; Same; Same; It is precisely the
unpremeditated discrepancy in treatment of the rank-and-file of the BSP—
made manifest and glaring with each and every consequential grant of
blanket exemption from the SSL to the other GFIs—that cannot be
rationalized or justified. If Congress had enacted a law for the sole purpose
of exempting the eight GFIs from the coverage of the SSL, the exclusion of
the BSP rank-and-file employees would have
306
been devoid of any substantial or material basis.—It is precisely this

unpremeditated discrepancy in treatment of the rank-and-file of the BSP—
made manifest and glaring with each and every consequential grant of
blanket exemption from the SSL to the other GFIs—that cannot be
rationalized or justified. Even more so, when the SEC—which is not a GFI
—was given leave to have a compensation plan that “shall be comparable
with the prevailing compensation plan in the [BSP] and other [GFIs],” then
granted a blanket exemption from the SSL, and its rank-and-file endowed a
more preferred treatment than the rank-and-file of the BSP. The violation to
the equal protection clause becomes even more pronounced when we are
faced with this undeniable truth: that if Congress had enacted a law for the
sole purpose of exempting the eight GFIs from the coverage of the SSL, the
exclusion of the BSP rank-and-file employees would have been devoid of
any substantial or material basis. It bears no moment, therefore, that the
unlawful discrimination was not a direct result arising from one law. “Nemo
potest facere per alium quod non potest facere per directum.” No one is
allowed to do indirectly what he is prohibited to do directly.
Same; Same; Same; Same; Same; Same; As regards the exemption
from the SSL, there are no characteristics peculiar only to the seven GFIs or
their rank-and-file so as to justify the exemption which BSP rank-and-file
employees were denied—the distinction made by the law is not only
superficial, but also arbitrary.—In the case at bar, it is precisely the fact that
as regards the exemption from the SSL, there are no characteristics peculiar
only to the seven GFIs or their rank-and-file so as to justify the exemption
which BSP rank-and-file employees were denied (not to mention the
anomaly of the SEC getting one). The distinction made by the law is not
only superficial, but also arbitrary. It is not based on substantial distinctions
that make real differences between the BSP rank-and-file and the seven
other GFIs.
Same; Same; Same; Same; Same; Same; Separation of Powers; While
the granting of a privilege per se is a matter of policy exclusively within the
domain and prerogative of Congress, the validity or legality of the exercise
of this prerogative is subject to judicial review; The disparity in treatment
between BSP rank-and-file and the rank-and-file of the other seven GFIs
definitely bear the unmistakable badge of invidious discrimination.—It
bears stressing that the ex-
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VOL. 446, DECEMBER 15, 2004 307
emption from the SSL is a “privilege” fully within the legislative

prerogative to give or deny. However, its subsequent grant to the rank-and-
file of the seven other GFIs and continued denial to the BSP rank-and-file
employees breached the latter’s right to equal protection. In other words,
while the granting of a privilege per se is a matter of policy exclusively
within the domain and prerogative of Congress, the validity or legality of the
exercise of this prerogative is subject to judicial review. So when the
distinction made is superficial, and not based on substantial distinctions that
make real differences between those included and excluded, it becomes a
matter of arbitrariness that this Court has the duty and the power to correct.
As held in the United Kingdom case of Hooper v. Secretary of State for
Work and Pensions, once the State has chosen to confer benefits,
“discrimination” contrary to law may occur where favorable treatment
already afforded to one group is refused to another, even though the State is
under no obligation to provide that favorable treatment. The disparity of
treatment between BSP rank-and-file and the rank-and-file of the other
seven GFIs definitely bears the unmistakable badge of invidious
discrimination—no one can, with candor and fairness, deny the
discriminatory character of the subsequent blanket and total exemption of

the seven other GFIs from the SSL when such was withheld from the BSP.
Alikes are being treated as unalikes without any rational basis.
Same; Standards of Review; In our jurisdiction, the standard and
analysis of equal protection challenges in the main have followed the
“rational basis” test, coupled with a deferential attitude to legislative
classifications.—In our jurisdiction, the standard and analysis of equal
protection challenges in the main have followed the “rational basis” test,
coupled with a deferential attitude to legislative classifications and a
reluctance to invalidate a law unless there is a showing of a clear and
unequivocal breach of the Constitution.
Same; Same; International Law; The equality provisions in the
international instruments do not merely function as traditional “first
generation” rights, commonly viewed as concerned only with constraining
rather than requiring State action—they imposed a measure of positive
obligation on States Parties to take steps to eradicate discrimination.—
Most, if not all, international human rights instruments include some
prohibition on discrimination and/or provisions about equality. The general
international provisions pertinent to
308
discrimination and/or equality are the International Covenant on Civil and

Political Rights (ICCPR); the International Covenant on Economic, Social
and Cultural Rights (ICESCR); the International Convention on the
Elimination of all Forms of Racial Discrimination (CERD); the Convention
on the Elimination of all Forms of Discrimination against Women
(CEDAW); and the Convention on the Rights of the Child (CRC). In the
broader international context, equality is also enshrined in regional
instruments such as the American Convention on Human Rights; the
African Charter on Human and People’s Rights; the European Convention
on Human Rights; the European Social Charter of 1961 and revised Social
Charter of 1996; and the European Union Charter of Rights (of particular
importance to European states). Even the Council of the League of Arab
States has adopted the Arab Charter on Human Rights in 1994, although it
has yet to be ratified by the Member States of the League. The equality
provisions in these instruments do not merely function as traditional “first
generation” rights, commonly viewed as concerned only with constraining
rather than requiring State action. Article 26 of the ICCPR requires
“guarantee[s]” of “equal and effective protection against discrimination”
while Articles 1 and 14 of the American and European Conventions oblige
States Parties “to ensure . . . the full and free exercise of [the rights
guaranteed] . . . without any discrimination” and to “secure without

discrimination” the enjoyment of the rights guaranteed. These provisions
impose a measure of positive obligation on States Parties to take steps to
eradicate discrimination.
Same; Same; Same; Two-Tier Analysis; The two-tier analysis made in
the case at bar of the challenged provision, and its conclusion of
unconstitutionality by subsequent operation, are in cadence and in
consonance with the progressive trend of other jurisdictions and in
international law.—Thus, the two-tier analysis made in the case at bar of
the challenged provision, and its conclusion of unconstitutionality by
subsequent operation, are in cadence and in consonance with the
progressive trend of other jurisdictions and in international law. There
should be no hesitation in using the equal protection clause as a major
cutting edge to eliminate every conceivable irrational discrimination in our
society. Indeed, the social justice imperatives in the Constitution, coupled
with the special status and protection afforded to labor, compel this
approach.
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VOL. 446, DECEMBER 15, 2004 309
Same; Same; Separation of Powers; The deference to Congressional

discretion stops where the classification violates a fundamental right, or
prejudices persons accorded special protection by the Constitution, and
when these violations arise, the Supreme Court must discharge its primary
role as the vanguard of constitutional guaranties, and require a stricter and
more exacting adherence to constitutional limitations—rational basis should
not suffice.—Congress retains its wide discretion in providing for a valid
classification, and its policies should be accorded recognition and respect by
the courts of justice except when they run afoul of the Constitution. The
deference stops where the classification violates a fundamental right, or
prejudices persons accorded special protection by the Constitution. When
these violations arise, this Court must discharge its primary role as the
vanguard of constitutional guaranties, and require a stricter and more
exacting adherence to constitutional limitations. Rational basis should not
suffice.
Same; Same; Same; Legal Research; Foreign Jurisprudence; Foreign
decisions and authorities are not per se controlling in this jurisdiction—at
best, they are persuasive and have been used to support many of our
decisions—and we should not place undue and fawning reliance upon them
and regard them as indispensable mental crutches without which we cannot
come to our own decisions through the employment of our own endowments.
—Admittedly, the view that prejudice to persons accorded special protection
by the Constitution requires a stricter judicial scrutiny finds no support in
American or English jurisprudence. Nevertheless, these foreign decisions

and authorities are not per se controlling in this jurisdiction. At best, they
are persuasive and have been used to support many of our decisions. We
should not place undue and fawning reliance upon them and regard them as
indispensable mental crutches without which we cannot come to our own
decisions through the employment of our own endowments. We live in a
different ambience and must decide our own problems in the light of our
own interests and needs, and of our qualities and even idiosyncrasies as a
people, and always with our own concept of law and justice. Our laws must
be construed in accordance with the intention of our own lawmakers and
such intent may be deduced from the language of each law and the context
of other local legislation related thereto. More importantly, they must be
construed to serve our own public interest
310
which is the be-all and the end-all of all our laws. And it need not be
stressed that our public interest is distinct and different from others.
Same; Same; Same; Same; Judicial Activism; The quest for a better
and more “equal” world calls for the use of equal protection as a tool of
effective judicial intervention.—Further, the quest for a better and more
“equal” world calls for the use of equal protection as a tool of effective
judicial intervention. Equality is one ideal which cries out for bold attention
and action in the Constitution. The Preamble proclaims “equality” as an
ideal precisely in protest against crushing inequities in Philippine society.
The command to promote social justice in Article II, Section 10, in “all
phases of national development,” further explicated in Article XIII, are clear
commands to the State to take affirmative action in the direction of greater
equality . . . . [T]here is thus in the Philippine Constitution no lack of
doctrinal support for a more vigorous state effort towards achieving a
reasonable measure of equality.
Same; Same; Social Justice; Under the policy of social justice, the law
bends over backward to accommodate the interests of the working class on
the humane justification that those with less privilege in life should have
more in law.—Our present Constitution has gone further in guaranteeing
vital social and economic rights to marginalized groups of society, including
labor. Under the policy of social justice, the law bends over backward to
accommodate the interests of the working class on the humane justification
that those with less privilege in life should have more in law. And the
obligation to afford protection to labor is incumbent not only on the
legislative and executive branches but also on the judiciary to translate this
pledge into a living reality. Social justice calls for the humanization of laws
and the equalization of social and economic forces by the State so that
justice in its rational and objectively secular conception may at least be
approximated.
Same; Same; Same; Under most circumstances, the Court will exercise
judicial restraint in deciding questions of constitutionality, recognizing the
broad discretion given to Congress in exercising its legislative power.—
Concerns have been raised as to the propriety of a ruling voiding the
challenged provision. It has been proffered that the remedy of petitioner is
not with this Court, but with Congress, which alone has the power to erase
any inequity perpetrated by R.A. No. 7653. Indeed, a bill proposing the
exemption of the BSP rank-
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VOL. 446, DECEMBER 15, 2004 311
and-file from the SSL has supposedly been filed. Under most circumstances,
the Court will exercise judicial restraint in deciding questions of
constitutionality, recognizing the broad discretion given to Congress in
exercising its legislative power. Judicial scrutiny would be based on the
“rational basis” test, and the legislative discretion would be given
deferential treatment. But if the challenge to the statute is premised on the
denial of a fundamental right, or the perpetuation of prejudice against
persons favored by the Constitution with special protection, judicial scrutiny
ought to be more strict. A weak and watered down view would call for the
abdication of this Court’s solemn duty to strike down any law repugnant to
the Constitution and the rights it enshrines. This is true whether the actor
committing the unconstitutional act is a private person or the government
itself or one of its instrumentalities. Oppressive acts will be struck down
regardless of the character or nature of the actor.
Same; Same; Same; Considering that majority, if not all, the rank-and-
file employees consist of people whose status and rank in life are less and
limited, especially in terms of job marketability, it is they—and not the
officers—who have the real economic and financial need for the adjustment.
—In the case at bar, the challenged proviso operates on the basis of the
salary grade or officer-employee status. It is akin to a distinction based on
economic class and status, with the higher grades as recipients of a benefit
specifically withheld from the lower grades. Officers of the BSP now
receive higher compensation packages that are competitive with the
industry, while the poorer, low-salaried employees are limited to the rates
prescribed by the SSL. The implications are quite disturbing: BSP rank-and-
file employees are paid the strictly regimented rates of the SSL while
employees higher in rank—possessing higher and better education and
opportunities for career advancement—are given higher compensation
packages to entice them to stay. Considering that majority, if not all, the
rank-and-file employees consist of people whose status and rank in life are
less and limited, especially in terms of job marketability, it is they—and not
the officers—who have the real economic and financial need for the
adjustment. This is in accord with the policy of the Constitution “to free the
people from poverty, provide adequate social services, extend to them a
decent standard of living, and improve the quality of life for all.” Any act of
Congress that runs counter to this constitutional desideratum deserves strict
scrutiny by this Court before it can pass muster.
312

Pilipinas
PANGANIBAN, J., Dissenting Opinion:
Doctrine of Relative Constitutionality; From the manner in which it

has been utilized in American and Philippine jurisprudence, the novel
theory of relative constitutionality finds relevance only when the factual
situation covered by an assailed law changes, not when another law is
passed pertaining to subjects not directly covered by the former.—The
ponencia advocates the application of the theory of relative constitutionality
to the present case. The theory says that a statute valid at one time may
become unconstitutional at another, because of altered circumstances or
changed conditions that make the practical operation of such a statute
arbitrary or confiscatory. Thus, the provisions of that statute, which may be
valid as applied to one set of facts but invalid as applied to another, cannot
be merely compared with those applicable under the Constitution. From the
manner in which it has been utilized in American and Philippine
jurisprudence, however, this novel theory finds relevance only when the
factual situation covered by an assailed law changes, not when another law
is passed pertaining to subjects not directly covered by the former. Thus, the
theory applies only when circumstances that were specifically addressed
upon the passage of the law change. It does not apply to changes or
alterations extraneous to those specifically addressed.
Same; A statute that is declared invalid because of a change in
circumstances affecting its validity belongs only to a class of emergency
laws; Unlike congested traffic or motor-driven vehicles on public roads, the
payment of salaries at differing scales in various GFIs vis-à-vis in the BSP,
is not such a change in conditions as would cause deprivation of property
without due process of law.—With due respect, the ponencia’s reference to
“changed conditions” is totally misplaced. In the above-cited US cases, this
phrase never referred to subsequent laws or executive pronouncements, but
rather to the facts and circumstances that the law or ordinance specifically
addressed upon its passage or adoption. A statute that is declared invalid
because of a change in circumstances affecting its validity belongs only to a

class of emergency laws. Being a manifestation of the State’s exercise of its
police power, it is valid at the time of its enactment. In contrast thereto, RA
7653 cannot be regarded as an emergency measure that is merely temporary
in operation. It is not even a statute limited to the exigency that brought it
about. The
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VOL. 446, DECEMBER 15, 2004 313
facts and circumstances it specifically addressed upon its passage have not
been shown to have changed at all. Hence, the assailed provision of such a
declaratory statute cannot be invalidated. Unlike congested traffic or motor-
driven vehicles on public roads, the payment of salaries at differing scales in
various GFIs vis-à-vis in the BSP, is not such a change in conditions as
would cause deprivation of property without due process of law. Petitioner’s
members have not been deprived of their right to income as mandated by
law. They have not received less than what they were entitled to ever since
RA 7653 was passed eleven years ago.
Same; Separation of Powers; Applying the concept of relative
constitutionality strongly advocated in the ponencia not only goes beyond
the parameters of traditional constitutionalism, but also finds no express
basis in positive law; In a constitutional order that commands respect for
coequal branches of government, speculation by the judiciary becomes
incendiary and deserves no respectable place in our judicial chronicles.—
Applying the concept of relative constitutionality strongly advocated in the
ponencia, therefore, not only goes beyond the parameters of traditional
constitutionalism, but also finds no express basis in positive law. While it
has been asserted that “a statute valid when enacted may become invalid by
change in conditions to which it is applied,” the present case has shown no
such change in conditions that would warrant the invalidation of the
assailed provision if applied under such conditions. Hence, no semblance of
constitutional impuissance, other than its conjured possibility, can be seen.
In a constitutional order that commands respect for coequal branches of
government, speculation by the judiciary becomes incendiary and deserves
no respectable place in our judicial chronicles.
Same; International Law; Government employees at the BSP with
salary grades 19 and below are not entities vested with international
personality—any possible discrimination as to them, in the light of the
principles and application of international law would be too far-fetched.—
The ponencia further contends that the principles of international law can
operate to render a valid law unconstitutional. The generally accepted
definition states that international law is a body of legal rules that apply
between sovereign states and such other entities as have been granted
international personality. Government employees at the BSP with salary
grades 19 and below are
314
not such entities vested with international personality; any possible

discrimination as to them, in the light of the principles and application of
international law would be too far-fetched.
Same; The ponencia overlooks the fact that the Bangko Sentral is not a
GFI but a regulatory body of GFIs and other financial-banking institutions
—it should not be compared with them as there is no parity.—The
dangerous consequences of the majority’s Decision in the present case
cannot and should not be ignored. Will there now be an automatic SSL
exemption for employees of other GFIs and financial regulatory agencies?
Will such exemption not infringe on Congress’ prerogative? The ponencia
overlooks the fact that the Bangko Sentral is not a GFI, but a regulatory
body of GFIs and other financial/banking institutions. Therefore, it should
not be compared with them. There is no parity. The Bangko Sentral is more
akin to the Insurance Commission, the National Telecommunications
Commission, and the Energy Regulatory Commission. Should not more
appropriate comparisons be made with such regulatory bodies and their
employees?
Same; Separation of Powers; Judicial Activism; The trust reposed in
this Court is “not to formulate policy but to determine its legality as tested
by the Constitution”; Judicial activism should not be allowed to become
judicial exuberance.—The trust reposed in this Court is “not to formulate
policy but to determine its legality as tested by the Constitution.” “It does
not extend to an unwarranted intrusion into that broad and legitimate
sphere of discretion enjoyed by the political branches to determine the
policies to be pursued. This Court should ever be on the alert lest, without
design or intent, it oversteps the boundary of judicial competence.” Judicial
activism should not be allowed to become judicial exuberance. “As was so
well put by Justice Malcolm: ‘Just as the Supreme Court, as the guardian of
constitutional rights, should not sanction usurpations by any other
department of the government, so should it as strictly confine its own sphere
of influence to the powers expressly or by implication conferred on it by the
Organic Act.’ ”
Same; Same; Same; The remedy against any perceived legislative
failure to enact corrective legislation is a resort, not to the Supreme Court,
but to the bar of public opinion.—Since Congress itself did not commit any
constitutional violation or gravely abusive conduct when it enacted RA

7653, it should not be summarily blamed
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VOL. 446, DECEMBER 15, 2004 315
for what the ponencia calls “altered circumstances.” Congress should be

given the opportunity to correct the problem, if any. I repeat, I am not
against exemption from the SSL of Bangko Sentral employees with salary
grades 19 and below. Neither am I against increases in their pay. However, it
is Congress, not this Court, that should provide a solution to their
predicament, at least in the first instance. The remedy against any perceived
legislative failure to enact corrective legislation is a resort, not to this Court,
but to the bar of public opinion. The electorate can refuse to return to
Congress members who, in their view, have been remiss in the discharge of
their constitutional duties. Our Constitution presumes that, absent any
inference of antipathy, improvident legislative decisions “will eventually be
rectified by the democratic processes”; and that judicial intervention is
unwarranted, no matter how unwisely a political branch may have acted.
Same; Same; Same; To compel this Court to make a more decisive but
unnecessary action in advance of what Congress will do is a downright
derogation of the Constitution itself, for it converts the judiciary into a
super-legislature and invests it with a power that to it has never belonged.—
It is only the legislature, not the courts, that “must be appealed to for the
change.” If, however, Congress decides to act, the choice of appropriate
measure lies within its discretion. Once determined, the measure chosen
cannot be attacked on the ground that it is not the best solution, or that it is
unwise or inefficacious. A law that advances a legitimate governmental
interest will be sustained, even if it “works to the disadvantage of a
particular group, or x x x the rationale for it seems tenuous.” To compel this
Court to make a more decisive but unnecessary action in advance of what
Congress will do is a downright derogation of the Constitution itself, for it
converts the judiciary into a super-legislature and invests it with a power
that to it has never belonged.
Same; It is equally true that the levels of difficulty and responsibility
for BSP employees with salary grades 19 and below are different from those
of other BSP employees with salary grades 20 and above; To assert, as
petitioner does, that the statutory classification is just an “artifice based on
arbitrariness,” without more, is nothing more than throwing a few jabs at
an imaginary foe.—While it is true that all employees of the BSP are
appointed under the authority of the Monetary Board, observe the same set
of office rules and regula-
316
tions, and perform their work in practically the same offices, it is equally
true that the levels of difficulty and responsibility for BSP employees with
salary grades 19 and below are different from those of other BSP employees
with salary grades 20 and above. All those classes of position belonging to
the Professional Supervisory Category of the Position Classification System
under RA 6758, for instance, are obviously not subjected to the same levels
of difficulty, responsibility, and qualification requirements as those
belonging to the Professional Non-Supervisory Category, although to both
categories are assigned positions that include salary grades 19 and 20. To
assert, as petitioner does, that the statutory classification is just an “artifice
based on arbitrariness,” without more, is nothing more than throwing a few
jabs at an imaginary foe.
Same; The BSP and the GFIs cited in the ponencia do not belong to the
same category of government institutions, although it may be said that both
are, broadly speaking, “involved” in banking and finance—while the former
performs primarily governmental or regulatory functions, the latter execute
purely proprietary ones.—In like manner, petitioner’s denunciation of the
proviso for allegedly discriminating against its members vis-à-vis the rank
and filers of other GFIs ignores the fact that the BSP and the GFIs cited in
the ponencia do not belong to the same category of government institutions,
although it may be said that both are, broadly speaking, “involved” in
banking and finance. While the former performs primarily governmental or
regulatory functions, the latter execute purely proprietary ones.
Same; Judicial Review; Canons of Judicial Avoidance; One such canon
of avoidance is that the Court must not anticipate a question of
constitutional law in advance of the necessity of deciding it; Applying to this
case the contours of constitutional avoidance Brandeis brilliantly
summarized, this Court may choose to ignore the constitutional question
presented by petitioner, since there is indeed some other ground upon which
this case can be disposed of.—In the United States more than sixty years
ago, Justice Brandeis delineated the famous canons of avoidance under
which their Supreme Court had refrained from passing upon constitutional
questions. One such canon is that the Court must “not anticipate a question
of constitutional law in advance of the necessity of deciding it x x x. It is not
the habit of the Court to decide questions of a constitutional nature
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VOL. 446, DECEMBER 15, 2004 317
unless absolutely necessary to a decision of the case.” In addition, the Court

must not “pass upon a constitutional question although properly presented
by the record, if there is also present some other ground upon which the
case may be disposed of.” Applying to this case the contours of
constitutional avoidance Brandeis brilliantly summarized, this Court may
choose to ignore the constitutional question presented by petitioner, since
there is indeed some other ground upon which this case can be disposed of
—its clear lack of urgency, by reason of which Congress should be allowed
to do its primary task of reviewing and possibly amending the law.
Same; Same; Same; Since the authority to declare a legal provision
void is of a “delicate and awful nature,” the Court should “never resort to
that authority, but in a clear and urgent case.”—Taking cognizance of this
case and disposing of, or altogether ignoring, the constitutional question
leads us to the same inevitable conclusion: the assailed provision should not
be declared “unconstitutional, unless it is clearly so.” Whichever path is
chosen by this Court, I am of the firm belief that such provision cannot and
should not be declared unconstitutional. Since the authority to declare a
legal provision void is of a “delicate and awful nature,” the Court should
“never resort to that authority, but in a clear and urgent case.” If ever there
is doubt—and clearly there is, as manifested herein by a sharply divided
Court—“the expressed will of the legislature should be sustained.”
Same; Same; Same; Future changes in both legislation and its
executive implementation should certainly not be the benchmark for a
preemptive declaration of unconstitutionality, especially when the said
provision is not even constitutionally infirm to begin with.—Indeed, this
Court is of the unanimous opinion that the assailed provision was at the
outset constitutional; however, with recent amendments to related laws, the
majority now feels that said provision could no longer pass constitutional
muster. To nail my colors to the mast, such proclivity to declare it
immediately unconstitutional not only imprudently creeps into the
legislative sphere, but also sorely clings to the strands of obscurantism.
Future changes in both legislation and its executive implementation should
certainly not be the benchmark for a preemptive declaration of
unconstitutionality, especially when the said provision is not even
constitutionally infirm to begin with.
318
Same; Same; Same; This Court should bide its time, for it has neither
the authority nor the competence to contemplate laws, much less to create
or amend them.—The congressional enactment into law of pending bills on
the compensation of BSP employees—or even those related thereto—will
certainly affect the assailed provision. This Court should bide its time, for it
has neither the authority nor the competence to contemplate laws, much less
to create or amend them. Given the current status of these pending bills, the
arguments raised by petitioner against the assailed provision become all the
more tenuous and amorphous. I feel we should leave that provision
untouched, and instead just accord proper courtesy to our legislators to
determine at the proper time and in the manner they deem best the
appropriate content of any modifications to it. Besides, there is an
omnipresent presumption of constitutionality in every legislative enactment.
No confutation of the proviso was ever shown before; none should be
considered now.
Same; Same; Same; A judicial determination is fallow when inspired
by purely cerebral casuistry or emotional puffery, especially during
rowelling times.—It would be wise “not to anticipate the serious
constitutional law problems that would arise under situations where only a
tentative judgment is dictated by prudence.” Attempts “at abstraction could
only lead to dialectics and barren legal questions and to sterile conclusions
unrelated to actualities.” A judicial determination is fallow when inspired
by purely cerebral casuistry or emotional puffery, especially during
rowelling times.
Same; Same; Standards of Review; Under the first tier or the rational
relationship or rational basis test, courts will uphold a classification if it
bears a rational relationship to an accepted governmental end—it must be
“rationally related to a legitimate state interest.”—Under the first tier or
the rational relationship or rational basis test, courts will uphold a
classification if it bears a rational relationship to an accepted governmental
end. In other words, it must be “rationally related to a legitimate state
interest.” To be reasonable, such classification must be (1) based on
substantial distinction that makes for real differences; (2) germane to the
purposes of the law; (3) not limited to existing conditions only; and (4)
equally applicable to all members of the same class.
319
VOL. 446, DECEMBER 15, 2004 319
Same; Same; Same; The retention of the best and the brightest officials
in an independent central monetary authority is a valid governmental
objective that can be reasonably met by a corresponding exemption from a
salary standardization scheme that is based on graduated salary levels.—
Murphy states that when a governmental classification is attacked on equal
protection grounds, such classification is in most instances reviewed under

the standard rational basis test. Accordingly, courts will not overturn that
classification, unless the varying treatments of different groups are so
unrelated to the achievement of any legitimate purpose that the courts can
only conclude that the governmental actions are irrational. A classification
must “be reasonable, not arbitrary, and x x x rest upon some ground of
difference having a fair and substantial relation to the object of the
legislation, so that all persons similarly circumstanced shall be treated
alike.” All these conditions are met in the present case. The retention of the
best and the brightest officials in an independent central monetary authority
is a valid governmental objective that can be reasonably met by a
corresponding exemption from a salary standardization scheme that is based
on graduated salary levels. The legislature in fact enjoys a wide berth in
continually classifying whenever it enacts a law, provided that no persons
similarly situated within a given class are treated differently. To contend
otherwise is to be presumptuous about the legislative intent or lack of it.
Same; Same; Same; Separation of Powers; Comity with and courtesy
to a coequal branch dictate that our lawmakers be given sufficient time and
leeway to address the alleged problem of differing pay scales—“Only by
faithful adherence to this guiding principle of judicial review of legislation
is it possible to preserve to the legislative branch its rightful independence
and its ability to function.”—The Philippine Deposit Insurance Corporation
(PDIC) is also a government regulatory agency almost on the same level of
importance as the BSP. However, its charter was only amended very
recently—to be more precise, on July 27, 2004. Consequently, it would be
most unfair to implicitly accuse Congress of inaction, discrimination and
unequal treatment. Comity with and courtesy to a coequal branch dictate
that our lawmakers be given sufficient time and leeway to address the
alleged problem of differing pay scales. “Only by faithful adherence to this
guiding principle of judicial review of legislation is it possible to preserve to
the legislative branch its rightful independ-
320
ence and its ability to function.” Besides, it is a cardinal rule that courts first
ascertain whether construction of a statute is fairly possible by which any
constitutional question therein may be avoided.
Same; Same; Same; The validity of a law is to be determined not by its
effects on a particular case or by an incidental result arising therefrom, but
by the purpose and efficacy of the law in accomplishing that effect or result.
—The validity of a law is to be determined not by its effects on a particular
case or by an incidental result arising therefrom, but by the purpose and
efficacy of the law in accomplishing that effect or result. This point confirms
my earlier position that the enactment of a law is not the same as its
operation. Unlike Vera in which the Court invalidated the law on probation
because of the unequal effect in the operation of such law, the assailed
provision in the present case suffers from no such invidious discrimination.
It very well achieves its purpose, and it applies equally to all government
employees within the BSP. Furthermore, the application of this provision is
not made subject to any discretion, uneven appropriation of funds, or time
limitation. Consequently, such a law neither denies equal protection nor
permits of such denial.
Same; Same; Same; Under the second tier or the strict scrutiny test, the
Court will require the government to show a compelling or overriding end
to justify (1) the limitation on fundamental rights or (2) the implication of
suspect classes.—Under the second tier or the strict scrutiny test, the Court
will require the government to show a compelling or overriding end to
justify (1) the limitation on fundamental rights or (2) the implication of
suspect classes. Where a statutory classification impinges upon a
fundamental right or burdens a suspect class, such classification is subjected
to strict scrutiny. It will be upheld only if it is shown to be “suitably tailored
to serve a compelling state interest.” Therefore, all legal restrictions that
curtail the civil rights of a suspect class, like a single racial or ethnic group,
are immediately suspect. “That is not to say that all such restrictions are
unconstitutional. It is to say that courts must subject them to the most rigid
scrutiny.” Pressing public necessity, for instance, may justify the existence
of those restrictions, but antagonism toward such suspect classes never can.
321
VOL. 446, DECEMBER 15, 2004 321
Same; Same; Same; Salary grade or class of position is not a

fundamental right like marriage, procreation, voting, speech and interstate
travel.—To date, no American case—federal or state—has yet been decided
involving equal pay schemes as applied either to government employees vis-
à-vis private ones, or within the governmental ranks. Salary grade or class
of position is not a fundamental right like marriage, procreation, voting,
speech and interstate travel. American courts have in fact even refused to
declare government employment a fundamental right.
Same; Same; Same; For purposes of equal protection analysis,
financial need alone does not identify a suspect class.—In fact, for purposes
of equal protection analysis, financial need alone does not identify a suspect
class. And even if it were to consider government pay to be akin to wealth, it
has already been held that “where wealth is involved, the Equal Protection
Clause does not require absolute equality or precisely equal advantages.”
After all, a law does not become invalid “because of simple inequality,”
financial or otherwise.
Same; Same; Same; Since employment in the government is not a
fundamental right and government employees below salary grade 20 are not
a suspect class, the government is not required to present a compelling
objective to justify a possible infringement under the strict scrutiny test.—
Since employment in the government is not a fundamental right and
government employees below salary grade 20 are not a suspect class, the
government is not required to present a compelling objective to justify a
possible infringement under the strict scrutiny test. The assailed provision
thus cannot be invalidated via the strict scrutiny gauntlet. “In areas of social
and economic policy, a statutory classification that neither proceeds along
suspect lines nor infringes fundamental constitutional rights must be upheld
against equal protection challenge if there is any reasonably conceivable
state of facts that could provide a rational basis for the classification.”
Same; Same; Same; Under the third tier or the intensified means test,
the Court should accept the legislative end, but should closely scrutinize its
relationship to the classification made; There exist classifications, which
have not been deemed to involve suspect classes or fundamental rights thus
not subjected to the strict scrutiny test, are subjected to a higher or
intermediate degree of scrutiny than
322
the deferential or traditional rational basis test.—Under the third tier or the
intensified means test, the Court should accept the legislative end, but
should closely scrutinize its relationship to the classification made. There
exist classifications that are subjected to a higher or intermediate degree of
scrutiny than the deferential or traditional rational basis test. These
classifications, however, have not been deemed to involve suspect classes or
fundamental rights; thus, they have not been subjected to the strict scrutiny
test. In other words, such classifications must be “substantially related to a
sufficiently important governmental interest.” Examples of these so-called
“quasi-suspect” classifications are those based on gender, legitimacy under
certain circumstances, legal residency with regard to availment of free
public education, civil service employment preference for armed forces
veterans who are state residents upon entry to military service, and the right
to practice for compensation the profession for which certain persons have
been qualified and licensed.
Same; Same; Same; Non-exempt government employees may be a
sensitive but not a suspect class, and their employment status may be
important although not fundamental; In the area of economics and social
welfare, a State does not violate the Equal Protection Clause merely
because the classifications made by its laws are imperfect.—Non-exempt
government employees may be a sensitive but not a suspect class, and their
employment status may be important although not fundamental. Yet, the
enactment of the assailed provision is a reasonable means by which the
State seeks to advance its interest. Since such provision sufficiently serves
important governmental interests and is substantially related to the
achievement thereof, then, again it stands. “In the area of economics and
social welfare, a State does not violate the Equal Protection Clause merely
because the classifications made by its laws are imperfect. If the
classification has some ‘reasonable basis,’ it does not offend the
Constitution simply because the classification ‘is not made with
mathematical nicety or because in practice it results in some inequality.’ ”
“The very idea of classification is that of inequality, so that x x x the fact of
inequality in no manner determines the matter of constitutionality.”
Same; Same; Separation of Powers; Since relative constitutionality
was not discussed by the parties in any of their pleadings, fundamental
fairness and evenhandedness still dictate that Congress be
323
VOL. 446, DECEMBER 15, 2004 323
heard on this concept before the Court imposes it in a definitive ruling.—In

our jurisdiction, relative constitutionality is a rarely utilized theory having
radical consequences; hence, I believe it should not be imposed by the Court
unilaterally. Even in the US, it applies only when there is a change in factual
circumstances covered by the law, not when there is an enactment of
another law pertaining to subjects not directly covered by the assailed law.
Whether factual conditions have so changed as to call for a partial or even a
total abrogation of the law is a matter that rests primarily within the
constitutional prerogative of Congress to determine. To justify a judicial
nullification, the constitutional breach of a legal provision must be very
clear and unequivocal, not doubtful or argumentative. In short, this Court
can go no further than to inquire whether Congress had the power to enact a
law; it cannot delve into the wisdom of policies it adopts or into the
adequacy under existing conditions of measures it enacts. The equal
protection clause is not a license for the courts “to judge the wisdom,
fairness, or logic of legislative choices.” Since relative constitutionality was
not discussed by the parties in any of their pleadings, fundamental fairness
and evenhandedness still dictate that Congress be heard on this concept
before the Court imposes it in a definitive ruling.
CARPIO,J., Dissenting Opinion:
Judicial Review; Judicial Legislation; The majority opinion does not

annul a law but enacts a pending bill in Congress into law.—The majority
opinion does not annul a law but enacts a pending bill in Congress into law.
The majority opinion invades the legislative domain by enacting into law a
bill that the 13th Congress is now considering for approval. The majority
opinion does this in the guise of annulling a proviso in Section 15(c), Article
II of Republic Act No. 7653 (“RA 7653”).
Equal Protection; Government Financial Institutions (GFIs); The
majority opinion erroneously classifies the Bangko Sentral ng Pilipinas
(“BSP”), a regulatory agency exercising sovereign functions, in the same
category as non-regulatory corporations exercising purely commercial
functions.—The majority opinion erroneously classifies the Bangko Sentral
ng Pilipinas (“BSP”), a regulatory agency exercising sovereign functions, in
the same category as non-regulatory corporations exercising purely
commercial functions like Land Bank
324
of the Philippines (“LBP”), Social Security System (“SSS”), Government

Service Insurance System (“GSIS”), Development Bank of the Philippines
(“DBP”), Small Borrowers Guarantee Fund Corporation (“SBGFC”), and
Home Guarantee Corporation (“HGC”).
Same; Same; Separation of Powers; Salary Standardization Law
(SSL); The Supreme Court cannot simply ordain an exemption from SSL
without considering serious ramifications on fiscal policies of the
government—the Court cannot intrude into fiscal policies that are the
province of the Executive and Legislative Departments.—The grant of SSL
exemption to GFIs has ramifications on the deepening budget deficit of the
government. Under Republic Act No. 7656, all GFIs are required to remit to
the National Treasury at least 50% of their annual net earnings. This
remittance forms part of the government revenues that fund the annual
appropriations act. If the remittances from GFIs decrease, the national
revenues funding the annual appropriations act correspondingly decrease.
This results in widening even more the budget deficit. A bigger budget
deficit means there are no revenues to fund salary increases of all
government employees who are paid out of the annual appropriations act.
The exemption of GFIs from SSL may delay or even prevent a general
increase in the salary of all government employees, including rank-and-file
employees in the judiciary. This Court cannot simply ordain an exemption
from SSL without considering serious ramifications on fiscal policies of the
government. This is a matter better left to the Executive and Legislative
Departments. This Court cannot intrude into fiscal policies that are the
province of the Executive and Legislative Departments.
Same; Same; Same; Same; Judicial Review; The Supreme Court
cannot exercise its power of judicial review before Congress has enacted the
questioned law.—The power of judicial review of legislative acts presumes
that Congress has enacted a law that may violate the Constitution. This
Court cannot exercise its power of judicial review before Congress has
enacted the questioned law. In this case, Congress is still considering the bill
exempting BSP rank-and-file employees from the SSL. There is still no
opportunity for this Court to exercise its review power because there is
nothing to review.
Same; Same; Same; Same; The power to exempt a government agency
from the SSL is a legislative power, not a judicial power.—
325
VOL. 446, DECEMBER 15, 2004 325
The majority opinion, however, claims that because of the failure of

Congress to enact the bill exempting BSP rank-and-file employees from the
SSL, this Court should now annul the proviso in Section 15(c) of RA 7653
to totally exempt BSP from the SSL. This is no longer an exercise of the
power of judicial review but an exercise of the power of legislation—a
power that this Court does not possess. The power to exempt a government
agency from the SSL is a legislative power, not a judicial power. By
annulling a prior valid law that has the effect of exempting BSP from the
SSL, this Court is exercising a legislative power.
Same; Same; Same; Same; By annulling the proviso in Section 15(c) of
R.A. 7653, BSP is not reverted to its previous situation but brought to a new
situation that BSP cannot attain without a new legislation.—The power of
judicial review is the power to strike down an unconstitutional act of a
department or agency of government, not the power to initiate or perform an
act that is lodged in another department or agency of government. If this
Court strikes down the law exempting PDIC from the SSL because it is
discriminatory against other government agencies similarly situated, this
Court is exercising its judicial review power. The effect is to revert PDIC to
its previous situation of being subject to the SSL, the same situation
governing BSP and other agencies similarly situated. However, by annulling
the proviso in Section 15(c) of RA 7653, BSP is not reverted to its previous
situation but brought to a new situation that BSP cannot attain without a
new legislation. Other government agencies similarly situated as BSP
remain in their old situation—still being subject to the SSL. This is not an
annulment of a legislative act but an enactment of legislation exempting one
agency from the SSL without exempting the remaining agencies similarly
situated.
CARPIO-MORALES, J., Dissenting Opinion:
Equal Protection Clause; Standards of Review; In the United States,

from where the equal protection provision of our Constitution has its roots,
the Rational Basis Test remains a primary standard for evaluating the
constitutionality of a statute.—The Rational Basis Test has been described
as adopting a “deferential” attitude towards legislative classifications. As
previously discussed, this “deference” comes from the recognition that
classification is often an unavoidable element of the task of legislation
which, under the separation of
326
powers embodied in our Constitution, is primarily the prerogative of

Congress. Indeed, in the United States, from where the equal protection
provision of our Constitution has its roots, the Rational Basis Test remains a
primary standard for evaluating the constitutionality of a statute.
Same; Same; Strict scrutiny is applied when the challenged statute
either (1) classifies on the basis of an inherently suspect characteristic or
(2) infringes fundamental constitutional rights.—While in the Philippines
the Rational Basis Test has, so far, served as a sufficient standard for
evaluating governmental actions against the Constitutional guaranty of
equal protection, the American Federal Supreme Court, as pointed out in the
main opinion, has developed a more demanding standard as a complement
to the traditional deferential test, which it applies in certain well-defined
circumstances. This more demanding standard is often referred to as Strict
Scrutiny. Briefly stated, Strict Scrutiny is applied when the challenged
statute either (1) classifies on the basis of an inherently suspect
characteristic or (2) infringes fundamental constitutional rights. With respect
to such classifications, the usual presumption of constitutionality is
reversed, and it is incumbent upon the government to demonstrate that its
classification has been narrowly tailored to further compelling governmental
interests, otherwise the law shall be declared unconstitutional for being
violative of the Equal Protection Clause.
Same; Same; The central purpose of the Equal Protection Clause was
to eliminate racial discrimination from official sources in the States.—The
central purpose of the Equal Protection Clause was to eliminate racial
discrimination emanating from official sources in the States. Like other
rights guaranteed by the post-Civil War Amendments, the Equal Protection
Clause (also known as the Fourteenth Amendment) was motivated in large
part by a desire to protect the civil rights of African-Americans recently
freed from slavery. Thus, initially, the U.S. Supreme Court attempted to
limit the scope of the Equal Protection Clause to discrimination claims

brought by African-Americans. In Strauder v. West Virginia, the American
Supreme Court in striking down a West Virginia statute which prohibited a
“colored man” from serving in a jury, traced the roots of the Equal
Protection Clause.
327
VOL. 446, DECEMBER 15, 2004 327
Same; Same; Over the years the Equal Protection Clause has been
applied against unreasonable governmental discrimination directed at any
identifiable group.—Over the years however, the Equal Protection Clause
has been applied against unreasonable governmental discrimination directed
at any identifiable group. In what Laurence H. Tribe and Michael C. Dorf
call the most famous footnote in American constitutional law, Justice Stone
in U.S. v. Carolene Products Co. maintained that state-sanctioned
discriminatory practices against discrete and insular minorities are entitled
to a diminished presumption of constitutionality.
Same; Same; Words and Phrases; The use of the term “suspect”
originated in the case of Korematsu v. U.S., 323 U.S. 214 (1944).—The use
of the term “suspect” originated in the case of Korematsu v. U.S. In
Korematsu, the American Supreme Court upheld the constitutionality of
Civilian Exclusion Order No. 34 of the Commanding General of the
Western Command, U.S. Army, which directed that all persons of Japanese
ancestry should be excluded from San Leandro California, a military area,
beginning May 9, 1942. However, in reviewing the validity of laws which
employ race as a means of classification, the Court held: It should be noted,
to begin with, that all legal restrictions which curtail the civil rights of a
single racial group are immediately suspect. That is not to say that all
such restrictions are unconstitutional. It is to say that courts must
subject them to the most rigid scrutiny. Pressing public necessity may
sometimes justify the existence of such restrictions; racial antagonism never
can. (Emphasis and italics supplied)
Same; Same; Same; The underlying rationale of the suspect
classification theory is that where legislation affects discrete and insular
minorities, the presumption of constitutionality fades because traditional
political processes may have broken down.—Racial classifications are
generally thought to be “suspect” because throughout the United States’
history these have generally been used to discriminate officially against
groups which are politically subordinate and subject to private prejudice and
discrimination. Thus, the U.S. Supreme Court has “consistently repudiated
distinctions between citizens solely because of their ancestry as being
odious to a free people whose institutions are founded upon the doctrine of
equality.” The underlying rationale of the suspect classification theory is

that where legislation affects discrete and insular minorities, the pre-
328
sumption of constitutionality fades because traditional political processes

may have broken down. Moreover, classifications based on race, alienage or
national origin are so seldom relevant to the achievement of any legitimate
state interest that laws grounded on such considerations are deemed to
reflect prejudice and antipathy—a view that those in the burdened class are
not as worthy or deserving as others.
Same; Same; Precisely because statutes infringing upon fundamental
constitutionally protected rights affect fundamental liberties, any experiment
involving basic freedoms which the legislature conducts must be critically
examined under the lens of Strict Scrutiny.—The application of Strict
Scrutiny has not been limited to statutes which proceed along suspect lines
but has been utilized on statutes infringing upon fundamental
constitutionally protected rights. Most fundamental rights cases decided in
the United States require equal protection analysis because these cases
would involve a review of statutes which classify persons and impose
differing restrictions on the ability of a certain class of persons to exercise a
fundamental right. Fundamental rights include only those basic liberties
explicitly or implicitly guaranteed by the U.S. Constitution. And precisely
because these statutes affect, fundamental liberties, any experiment
involving basic freedoms which the legislature conducts must be critically
examined under the lens of Strict Scrutiny. Fundamental rights which give
rise to Strict Scrutiny include the right of procreation, the right to marry, the
right to exercise First Amendment freedoms such as free speech, political
expression, press, assembly, and so forth, the right to travel, and the right to
vote.
Same; Same; Because Strict Scrutiny involves statutes which either
classifies on the basis of an inherently suspect characteristic or infringes
fundamental constitutional rights, the presumption of constitutionality is
reversed—such legislation is assumed to be unconstitutional until the
government demonstrates otherwise.—Because Strict Scrutiny involves
statutes which either classifies on the basis of an inherently suspect
characteristic or infringes fundamental constitutional rights, the presumption
of constitutionality is reversed; that is, such legislation is assumed to be
unconstitutional until the government demonstrates otherwise. The
government must show that the statute is supported by a compelling
governmental
329
VOL. 446, DECEMBER 15, 2004 329
interest and the means chosen to accomplish that interest are narrowly
tailored. Gerald Gunther explains as follows: . . . The intensive review
associated with the new equal protection imposed two demands a demand
not only as to means but also as to ends. Legislation qualifying for strict
scrutiny required a far closer fit between classification and statutory purpose
than the rough and ready flexibility traditionally tolerated by the old equal
protection: means had to be shown “necessary” to achieve statutory ends,
not merely “reasonably related.” Moreover, equal protection became a
source of ends scrutiny as well: legislation in the areas of the new equal
protection had to be justified by “compelling” state interests, not merely the
wide spectrum of “legitimate” state ends. Furthermore, the legislature must
adopt the least burdensome or least drastic means available for achieving the
governmental objective.
Same; Same; Since the United States’ conception of the Equal
Protection Clause was largely influenced by its history of systematically
discriminating along racial lines, it is perhaps no surprise that the
Philippines which does not have any comparable experience has not found a
similar occasion to apply this particular American approach to Equal
Protection of applying Strict Scrutiny to certain legislative classifications.—
While Strict Scrutiny has, as yet, not found widespread application in this
jurisdiction, the tenet that legislative classifications involving fundamental
rights require a more rigorous justification under more stringent standards of
analysis has been acknowledged in a number of Philippine cases. Since the
United States’ conception of the Equal Protection Clause was largely
influenced by its history of systematically discriminating along racial lines,
it is perhaps no surprise that the Philippines which does not have any
comparable experience has not found a similar occasion to apply this
particular American approach of Equal Protection.
Same; Same; The U.S. Supreme Court has generally applied
Intermediate or Heightened Scrutiny when the challenged statute’s
classification is based on either (1) gender or (2) illegitimacy—gender-
based classifications are presumed unconstitutional as such classifications
generally provide no sensible ground for differential treatment, and
classifications based on illegitimacy are also presumed unconstitutional as
illegitimacy is beyond the individual’s control and bears no relation to the
individual’s ability to participate
330
in and contribute to society.—Despite numerous criticisms from American

legal luminaries, the U.S. Supreme Court has not done away with the
Rational Basis Test and Strict Scrutiny as they continue to remain viable
approaches in equal protection analysis. On the contrary, the American
Court has developed yet a third tier of equal protection review, falling
between the Rational Basis Test and Strict Scrutiny—Intermediate Scrutiny
(also known as Heightened Scrutiny). The U.S. Supreme Court has
generally applied Intermediate or Heightened Scrutiny when the challenged
statute’s classification is based on either (1) gender or (2) illegitimacy.
Gender-based classifications are presumed unconstitutional as such
classifications generally provide no sensible ground for differential
treatment. In City of Cleburne, Texas v. Cleburne Living Center, the United
States Supreme Court said: “[W]hat differentiates sex from such nonsuspect
statuses as intelligence or physical disability ... is that the sex characteristic
frequently bears no relation to ability to perform or contribute to society.”
Frontiero v. Richardson, 411 U.S. 677, 686, 93 S.Ct. 1764, 1770, 36 L.Ed.2d
583 (1973) (plurality opinion). Rather than resting on meaningful
considerations, statutes distributing benefits and burdens between the sexes
in different ways very likely reflect outmoded notions of the relative
capabilities of men and women. In the same manner, classifications based
on illegitimacy are also presumed unconstitutional as illegitimacy is beyond
the individual’s control and bears no relation to the individual’s ability to
participate in and contribute to society. Similar to Strict Scrutiny, the burden
of justification for the classification rests entirely on the government. Thus,
the government must show at least that the statute serves an important
purpose and that the discriminatory means employed is substantially related
to the achievement of those objectives.
Same; Same; I fail to see the justification for the use of a “double
standard” in determining the constitutionality of the questioned proviso—
why a “deferential test” for one comparison (between the executives and
rank and file of the BSP) and a “strict test” for the other (between the rank
and file of the BSP and the rank and file of the other GOCCs/GFIs).—As
noted earlier, the main opinion, in arriving at its conclusion, simultaneously
makes use of both the Rational Basis Test and the Strict Scrutiny Test. Thus,
in assessing the validity of the classification between executive and rank and
file employees in Section 15 (c) of The New Central Bank Act, the Ra-
331
VOL. 446, DECEMBER 15, 2004 331
tional Basis Test was applied. In evaluating the distinction between the rank
and file employees of the BSP and the rank and file employees of the LBP,
DBP, SSS and GSIS, the Strict Scrutiny Test was employed. Despite my
best efforts, I fail to see the justification for the use of this “double standard”
in determining the constitutionality of the questioned proviso. Why a
“deferential test” for one comparison (between the executives and rank and
file of the BSP) and a “strict test” for the other (between the rank and file of
the BSP and the rank and file of the other GOCCs/GFIs)?
Same; Same; Legal Research; Foreign Jurisprudence; To my
knowledge, the American Court has never applied more than one standard
to a given set of facts, and where one standard was found to be appropriate,
the U.S. Supreme Court has deliberately eschewed any discussion of
another; Assuming that the equal protection standards evolved by the U.S.
Supreme Court may be adopted in this jurisdiction, there is no reason why
the exclusive manner of their application should not be adopted also.—As
the preceding review of the standards developed by the U.S. Federal
Supreme Court shows, the choice of the appropriate test for evaluating a
legislative classification is dependent on the nature of the rights affected
(i.e. whether “fundamental” or not) and the character of the persons
allegedly discriminated against (i.e. whether belonging to a “suspect class”
or not). As determined by these two parameters, the scope of application of
each standard is distinct and exclusive of the others. Indeed, to my
knowledge, the American Court has never applied more than one standard
to a given set of facts, and where one standard was found to be appropriate,
the U.S. Supreme Court has deliberately eschewed any discussion of
another. Assuming that the equal protection standards evolved by the U.S.
Supreme Court may be adopted in this jurisdiction, there is no reason why
the exclusive manner of their application should not be adopted also.
Same; Same; Doctrine of Relative Constitutionality; “Substantial
distinctions” must necessarily be derived from the objective factual
circumstances of the classes or groups that a statute seeks to differentiate.
—“Substantial distinctions” must necessarily be derived from the objective
factual circumstances of the classes or groups that a statute seeks to
differentiate. The classification must be real and factual and not wholly
abstract, artificial, or contrived. Thus, in Victoriano v. Elizalde Rope
Workers’ Union, this Court stated: We
332
believe that Republic Act No. 3350 satisfies the aforementioned

requirements. The Act classifies employees and workers, as to the effect and
coverage of union shop security agreements, into those who by reason of
their religious beliefs and convictions cannot sign up with a labor union, and
those whose religion does not prohibit membership in labor unions. The
classification rests on real or substantial, not merely imaginary or
whimsical, distinctions. There is such real distinction in the beliefs, feelings
and sentiments of employees. Employees do not believe in the same
religious faith and different religions differ in their dogmas and cannons.
Religious beliefs, manifestations and practices, though they are found in all
places, and in all times, take so many varied forms as to be almost beyond
imagination. There are many views that comprise the broad spectrum of
religious beliefs among the people. There are diverse manners in which
beliefs, equally paramount in the lives of their possessors, may be
articulated. Today the country is far more heterogenous in religion than
before, differences in religion do exist, and these differences are important
and should not be ignored. (Emphasis supplied)
Same; Same; Same; In the absence of factual changes which may have
occurred vis-à-vis the BSP personnel, it is difficult to see how relative
constitutionality may be applied in the instant petition.—In the case at bar,
however, petitioner does not allege a comparable change in the factual
milieu as regards the compensation, position classification and qualifications
standards of the employees of the BSP (whether of the executive level or of
the rank and file) since the enactment of The New Central Bank Act.
Neither does the main opinion identify the relevant factual changes which
may have occurred vis-à-vis the BSP personnel that may justify the
application of the principle of relative constitutionality as above-discussed.
Nor, to my knowledge, are there any relevant factual changes of which this
Court may take judicial knowledge. Hence, it is difficult to see how relative
constitutionality may be applied to the instant petition.
Same; Same; While it is true that the Equal Protection Clause is found
in the Bill of Rights of both the American and Philippine Constitutions, for
strict scrutiny to apply there must be a violation of a Constitutional right
other than the right to equal protection of the laws.—Strict Scrutiny cannot
be applied in the case at bar since nowhere in the petition does petitioner
allege that Article II, Section
333
VOL. 446, DECEMBER 15, 2004 333
15 (c) of the New Central Bank Act burdens a fundamental right of its
members. The petition merely states that “the proviso in question violates
the right to equal protection of the laws of the BSP rank and file employees
who are members of the petitioner.” While it is true that the Equal
Protection Clause is found in the Bill of Rights of both the American and
Philippine Constitutions, for strict scrutiny to apply there must be a
violation of a Constitutional right other than the right to equal protection of

the laws. To hold otherwise would be absurd as any invocation of a
violation of the equal protection clause would automatically result in the
application of Strict Scrutiny.
Same; Same; The main opinion fails to show that financial need is an
inherently suspect trait.—The main opinion however seeks to justify the
application of Strict Scrutiny on the theory that the rank and file employees
of the BSP constitute a suspect class “considering that majority (if not all) of
the rank and file employees consist of people whose status and rank in life
are less and limited, especially in terms of job marketability, it is they—and
not the officers—who have the real economic and financial need for the
adjustment.” The ponencia concludes that since the challenged proviso
operates on the basis of the salary grade or office-employee status a
distinction based on economic class and status is created. With all due
respect, the main opinion fails to show that financial need is an inherently
suspect trait. The claim that the rank and file employees of the BSP are an
economically disadvantaged group is unsupported by the facts on record.
Moreover, as priorly discussed, classifications based on financial need have
been characterized by the U.S. Supreme Court as not suspect. Instead, the
American Court has resorted to the Rational Basis Test.
Same; Same; Legal Research; Foreign Jurisprudence; After an
excessive dependence by the main opinion to American jurisprudence it
contradicted itself when it stated that “American jurisprudence and
authorities, much less the American Constitution, are of dubious application
for these are no longer controlling within our jurisdiction and have only
limited persuasive merit.”—Notably, the main opinion, after discussing
lengthily the developments in equal protection analysis in the United States
and Europe, and finding no support thereto, incongruously concluded that
“in resolving constitutional disputes, this Court should not be beguiled by
foreign jurisprudence
334
some of which are hardly applicable because they have been dictated by
different constitutional settings and needs.” After an excessive dependence
by the main opinion to American jurisprudence it contradicted itself when it
stated that “American jurisprudence and authorities, much less the
American Constitution, are of dubious application for these are no longer
controlling within our jurisdiction and have only limited persuasive merit.”
Same; Salary Standardization Law (R.A. 6758); Neither the text nor the
legislative record of the Salary Standardization Law manifests the intent to
provide “favored treatment” for GOCCs and GFIs.—Neither the text nor
the legislative record of the Salary Standardization Law manifests the intent
to provide “favored treatment” for GOCCs and GFIs. Thus, Section 3 (b),
erroneously cited by the main opinion, provides for the general principle
that compensation for all government personnel, whether employed in a
GOCC/GFI or not, should generally be comparable with that in the private
sector.
Same; Same; During the Bicameral Conference Committee
deliberations, the sentiment was that exemptions from the general
Compensation Classification System applicable to all government
employees would be limited only to key positions in order not to lose these
personnel to the private sector.—During the Bicameral Conference
Committee deliberations, the sentiment was that exemptions from the
general Compensation Classification System applicable to all government
employees would be limited only to key positions in order not to lose these
personnel to the private sector. A provision was moreover inserted
empowering the President to, in truly exceptional cases, approve higher
compensation, exceeding Salary Grade 30, to the chairman, president,
general manager, and the board of directors of government-owned or
controlled corporations and financial institutions.
Same; Same; The basis for the exemption of certain employees of
GOCCs or GFIs from the coverage of the Salary Standardization Law rests
not on the mere fact that they are employees of GOCCs or GFIs, but on a
policy determination by the legislature that such exemption is needed to
fulfill the mandate of the institution concerned.—In sum, the basis for the
exemption of certain employees of GOCCs or GFIs from the coverage of
the Salary Standardization Law rests not on the mere fact that they are
employees of GOCCs or
335
VOL. 446, DECEMBER 15, 2004 335
GFIs, but on a policy determination by the legislature that such exemption is

needed to fulfill the mandate of the institution concerned considering,
among others, that: (1) the GOCC or GFI is essentially proprietary in
character; (2) the GOCC or GFI is in direct competition with their
counterparts in the private sector, not only in terms of the provision of goods
or services, but also in terms of hiring and retaining competent personnel;
and (3) the GOCC or GFI are or were experiencing difficulties filling up
plantilla positions with competent personnel and/or retaining these
personnel. The need for and the scope of exemption necessarily varies with
the particular circumstances of each institution, and the corresponding
variance in the benefits received by the employees is merely incidental.
Same; Same; The fact that certain persons have some attributes in
common does not automatically make them members of the same class with
respect to a legislative classification.—There can be no doubt that the
employees of the BSP share a common attribute with the employees of the
LBP, SSS, GSIS and DBP in that all are employees of GOCCs performing
fiduciary functions. It may also be reasonable to assume that BSP
employees with SG 19 and below perform functions analogous to those
carried out by employees of the other GOCCs with the corresponding salary
grades. Nonetheless, these similarities alone are not sufficient to support the
conclusion that rank-and-file employees of the BSP may be lumped together
with similar employees of the other GOCCs for purposes of compensation,
position classification and qualifications standards. The fact that certain
persons have some attributes in common does not automatically make them
members of the same class with respect to a legislative classification.
Same; Judicial Review; Judicial Legislation; Considering that the
record fails to show (1) that the statutory provision in question affects either
a fundamental right or a suspect class, and, more importantly, (2) that the
classification contained therein was completely bereft of any possible
rational and real basis, it would appear that judicial restraint is not merely
preferred but is in fact mandatory, lest this Court stray from its function of
adjudication and trespass into the realm of legislation.—While the main
opinion acknowledges the propriety of judicial restraint “under most
circumstances” when deciding questions of constitutionality, in recognition
of the “broad discretion given to Congress in exercising its legislative
power,” it
336
nevertheless advocates active intervention with respect to the exemption of

the BSP rank and file employees from the Compensation Classification
System of the Salary Standardization Law. Considering, however, that the
record fails to show (1) that the statutory provision in question affects either
a fundamental right or a suspect class, and, more importantly, (2) that the
classification contained therein was completely bereft of any possible
rational and real basis, it would appear that judicial restraint is not merely
preferred but is in fact mandatory, lest this Court stray from its function of
adjudication and trespass into the realm of legislation. To be sure, inasmuch
as exemption from the Salary Standardization Law requires a factually
grounded policy determination by the legislature that such exemption is
necessary and desirable for a government agency or GOCC to accomplish
its purpose, the appropriate remedy of petitioner is with Congress and not
with the courts. As the branch of government entrusted with the plenary
power to make and amend laws, it is well within the powers of Congress to
grant exceptions to, or to amend where necessary, the Salary
Standardization Law, where the public good so requires. At the same time,
in line with its duty to determine the proper allocation of powers between
the several departments, this Court is naturally hesitant to intrude too readily
into the domain of another co-equal branch of government where the
absence of reason and the vice of arbitrariness are not clearly and
unmistakably established.
Same; Same; Same; For the Supreme Court to intervene now, when no
intervention is called for, would be to prematurely curtail the public debate
on the issue of compensation of the employees of the GOCCs and GFIs, and
effectively substitute this Court’s policy judgments for those of the
legislature, with whom the “power of the purse” is constitutionally lodged.
—Whether any of the foregoing measures will actually be implemented by
the Congress still remains to be seen. However, what is important is that
Congress is actively reviewing the policies concerning GOCCs and GFIs
with respect to the Salary Standardization Law. Hence, for this Court to
intervene now, when no intervention is called for, would be to prematurely
curtail the public debate on the issue of compensation of the employees of
the GOCCs and GFIs, and effectively substitute this Court’s policy
judgments for those of the legislature, with whom the “power of the purse”
is constitutionally lodged. Such would not only constitute an improper
exercise of the Court’s power of judicial, review, but may
337
VOL. 446, DECEMBER 15, 2004 337
also effectively stunt the growth and maturity of the nation as a political
body as well.
Same; Same; Same; Surely to grant the rank and file of the BSP
exemption solely for the reason that other GOCC or GFI employees have
been exempted, without regard for the reasons which impelled the
legislature to provide for those exemptions, would be to crystallize into our
law what Justice Holmes sardonically described as “merely idealizing
envy.”—How then are the aims of social justice served by removing the
BSP rank and file personnel from the ambit of the Salary Standardization
Law? In the alternative, what other public purpose would be served by
ordering such an exemption? Surely to grant the rank and file of the BSP
exemption solely for the reason that other GOCC or GFI employees have
been exempted, without regard for the reasons which impelled the
legislature to provide for those exemptions, would be to crystallize into our
law what Justice Holmes sardonically described as “merely idealizing
envy.”
Same; Social Justice; Certainly, social justice is more than picking and
choosing lines from Philippine and foreign instruments, statutes and
jurisprudence, like ripe cherries, in an effort to justify preferential treatment
of a favored group.—Certainly, social justice is more than picking and
choosing lines from Philippine and foreign instruments, statutes and
jurisprudence, like ripe cherries, in an effort to justify preferential treatment
of a favored group. In the immortal words of Justice Laurel in Calalang v.
Williams: The petitioner finally avers that the rules and regulations
complained of infringe upon the constitutional precept regarding the
promotion of social justice to insure the well-being and economic security
of all the people. The promotion of social justice, however, is to be
achieved not through a mistaken sympathy towards any given group.
Social justice is “neither communism, nor despotism, nor atomism, nor
anarchy,” but the humanization of laws and the equalization of social
and economic forces by the State so that justice in its rational and
objectively secular conception may at least be approximated. Social
justice means the promotion of the welfare of all the people, the adoption by
the Government of measures calculated to insure economic stability of all
the competent elements of society, through the maintenance of a proper
economic and social equilibrium in the interrelations of the members of
338
the community, constitutionally, through the adoption of measures legally

justifiable, or extra-constitutionally, through the exercise of powers
underlying the existence of all governments on the time-honored principle
of salus populi est suprema lex. (Emphasis and italics supplied)
CHICO-NAZARIO, J., Concurring Opinion:
Equal Protection; If BSP needs an exemption from R.A. No. 6758 for
key positions in order that it may hire the best and brightest economists,
accountants, lawyers and other technical and professional people, the
exemption must not begin only in SG 20—under the circumstances, the cut-
off point, the great divide, between SG 19 and 20 is entirely arbitrary as it
does not have a reasonable or rational foundation.—Classification in law is
the grouping of persons/objects because they agree with one another in
certain particulars and differ from others in those same particulars. In the
instant case, however, SG 20 and up do not differ from SG 19 and down in
terms of technical and professional expertise needed as the entire range of
positions all “require intense and thorough knowledge of a specialized field
usually acquired from completion of a bachelor’s degree or higher courses.”
Consequently, if BSP needs an exemption from Rep. Act No. 6758 for key
positions in order that it may hire the best and brightest economists,
exemption must not begin only in SG 20. Under the circumstances, the cut-
off point, the great divide, between SG 19 and 20 is entirely arbitrary as it
does not have a reasonable or rational foundation. This conclusion finds
support in no less than the records of the congressional deliberations, the
bicameral conference committee having pegged the cut-off period at SG 20
despite previous discussions in the Senate that the “executive group” is
“probably” SG 23 and above.
SPECIAL CIVIL ACTION in the Supreme Court. Prohibition.
The facts are stated in the opinion of the Court.

Edgardo G. Pena for petitioner.
The Solicitor General for respondents.
339
VOL. 446, DECEMBER 15, 2004 339

Pilipinas
PUNO, J.:
Can a provision of law, initially valid, become subsequently

unconstitutional, on the ground that its continued operation would
violate the equal protection of the law? We hold that with the
passage of the subsequent laws amending the charter of seven (7)
other governmental financial institutions (GFIs), the continued
operation of the last proviso of Section 15(c), Article II of Republic
Act (R.A.) No. 7653, constitutes invidious discrimination on the
2,994 rank-and-file employees of the Bangko Sentral ng Pilipinas
(BSP).
I. The Case
First the facts.

On July 3, 1993, R.A. No. 7653 (the New Central Bank Act) took
effect. It abolished the old Central Bank of the Philippines, and
created a new BSP.
On June 8, 2001, almost eight years after the effectivity of R.A.
No. 7653, petitioner Central Bank (now BSP) Employees
Association, Inc., filed a petition for prohibition against BSP and the
Executive Secretary of the Office of the President, to restrain
respondents from further implementing the last proviso in Section
15(c), Article II of R.A. No. 7653, on the ground that it is
unconstitutional.
Article II, Section 15(c) of R.A. No. 7653 provides:
Section 15. Exercise of Authority.—In the exercise of its authority, the

Monetary Board shall:
xxx xxx xxx
(c) establish a human resource management system which shall govern
the selection, hiring, appointment, transfer, promotion, or dismissal of all
personnel. Such system shall aim to establish
340

professionalism and excellence at all levels of the Bangko Sentral in

accordance with sound principles of management.
A compensation structure, based on job evaluation studies and wage
surveys and subject to the Board’s approval, shall be instituted as an integral
component of the Bangko Sentral’s human resource development program:
Provided, That the Monetary Board shall make its own system conform as
closely as possible with the principles provided for under Republic Act No.
6758 [Salary Standardization Act]. Provided, however, That compensation
and wage structure of employees whose positions fall under salary
grade 19 and below shall be in accordance with the rates prescribed
under Republic Act No. 6758. [emphasis supplied]
The thrust of petitioner’s challenge is that the above proviso makes

an unconstitutional cut between two classes of employees in the
BSP, viz.: (1) the BSP officers or those exempted from the coverage
of the Salary Standardization Law (SSL) (exempt class); and (2) the
rank-and-file (Salary Grade [SG] 19 and below), or those not
exempted from the coverage of the SSL (non-exempt class). It is
contended that this classification is “a classic case of class
legislation,” allegedly not based on substantial distinctions which
make real differences, but solely on the SG of the BSP personnel’s
position. Petitioner also claims that it is not germane to the purposes
of Section 15(c), Article II of R.A. No. 7653, the most important of
which is1 to establish professionalism and excellence at all levels in
the BSP. Petitioner offers the following sub-set of arguments:
a. the legislative history of R.A. No. 7653 shows that the

questioned proviso does not appear in the original and
amended versions of House Bill No. 2 7037, nor in the
original version of Senate Bill No. 1235;
b. subjecting the compensation of the BSP rank-and-file
employees to the rate prescribed by the SSL actually
defeats the
_______________
1 Rollo, p. 7.
2 Id., p. 9.
341
VOL. 446, DECEMBER 15, 2004 341

Pilipinas
3
purpose of the law of4 establishing professionalism and excellence at
all levels in the BSP; (emphasis supplied)
c. the assailed proviso was the product of amendments

introduced during the deliberation of Senate Bill No. 1235,
without showing its relevance to the objectives of the law,
and even admitted by one senator as5 discriminatory against
low-salaried employees of the BSP;
d. GSIS, LBP, DBP and SSS personnel are all exempted from
the coverage of the SSL; thus within the class of rank-and-
file personnel of government financial institutions
6
(GFIs),
the BSP rankand-file are also discriminated upon; and
e. the assailed proviso has caused the demoralization among
the BSP rank-and-file and resulted in the gross disparity 7
between their compensation and that of the BSP officers’.
In sum, petitioner posits that the classification is not reasonable but

arbitrary and capricious,
8
and violates the equal protection clause of
the Constitution. Petitioner also stresses: (a) that R.A. No. 7653 has
a separability clause, which will allow the declaration of the
unconstitutionality of the proviso in question without affecting the
other provisions; and (b) the urgency and propriety of the petition, as
some 2,994 BSP rank-and-file employees have been prejudiced since
1994 when the proviso was implemented. Petitioner concludes that:
(1) since the inequitable proviso has no force and effect of law,
respondents’ implementation of such amounts to lack of jurisdiction;
and (2) it has no appeal nor any other plain, speedy
_______________
3 i.e., (1) make the salary of the BSP personnel competitive to attract highly
competent personnel; (2) establish professionalism and excellence at all levels in the
BSP; and (3) ensure the administrative autonomy of the BSP as the central monetary
authority.
4 Rollo, pp. 8-10.
5 Id., pp. 10-12, quoting Former Senator Maceda, Record of the Senate, First
Regular Session, March 15 to June 10, 1993, Vol. IV, No. 86, p. 1087.
6 Id., pp. 12-14.
7 Id., p. 14.
8 Id., pp. 2-5.
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and adequate remedy in the ordinary course except through this

petition for prohibition, which this Court should take cognizance of,
considering
9
the transcendental importance of the legal issue
involved. 10
Respondent BSP, in its comment, contends that the provision
does not violate the equal protection clause and can stand the
constitutional test, provided it is construed in harmony with other
provisions of the same law, such as “fiscal and administrative
autonomy of BSP,” and the mandate of the Monetary Board to
“establish professionalism and excellence at all levels in accordance
with sound principles of management.”
The Solicitor General, on behalf of respondent Executive
Secretary, also defends the validity of the provision. Quite
simplistically, he argues that the classification is based on actual and
real differentiation, even as it adheres to the enunciated policy of
R.A. No. 7653 to establish professionalism and excellence within
the BSP subject
11
to prevailing laws and policies of the national
government.
II. Issue
Thus, the sole—albeit significant—issue to be resolved in this case

is whether the last paragraph of Section 15(c), Article II of R.A. No.
7653, runs afoul of the constitutional mandate12that “No person shall
be. . . denied the equal protection of the laws.”
_______________
9 Id., pp. 14-15.

10 Id., pp. 62-75.
11 Id., pp. 76-90.
12 1987 Constitution, Art. III, § 1.
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III. Ruling
A. UNDER THE PRESENT STANDARDS OF EQUAL

PROTECTION, SECTION 15(c), ARTICLE II OF R.A.
NO. 7653 IS VALID.
Jurisprudential standards for equal protection challenges indubitably

show that the classification created by the questioned proviso, on its
face and in its operation, bears no constitutional infirmities.
It is settled in constitutional law that the “equal protection”
clause does not prevent the Legislature from establishing classes of
individuals or objects upon which different rules shall operate—so
long as the classification is not unreasonable.
13
As held in Victoriano
v. Elizalde
14
Rope Workers’ Union, and reiterated in a long line of
cases:
_______________
13 No. L-25246, 59 SCRA 54, 77-78 (September 12, 1974).

14 Basa v. Federacion Obrera de la Industria Tabaquera y Otros Trabajadores de
Filipinas (FOITAF), No. L-27113, 61 SCRA 93, 110-111 (November 19, 1974);
Anucension v. National Labor Union, No. L-26097, 80 SCRA 350, 372-373
(November 29, 1977); Villegas v. Hiu Chiong Tsai Pao Ho, No. L-29646, 86 SCRA
270, 275 (November 10, 1978); Dumlao v. Commission on Elections, No. L-52245,
95 SCRA 392, 404 (January 22, 1980); Ceniza v. Commission on Elections, G.R. No.
L-52304, 95 SCRA 763, 772-773 (January 28, 1980); Himagan v. People, G.R. No.
113811, 237 SCRA 538 (October 7, 1994); The Conference of Maritime Manning
Agencies, Inc. v. Philippine Overseas Employment Agency, G.R. No. 114714, 243
SCRA 666, 677 (April 21, 1995); JMM Promotion and Management, Inc. v. Court of
Appeals, G.R. No. 120095, 260 SCRA 319, 331–332 (August 5, 1996); and Tiu v.
Court of Appeals, G.R. No. 127410, 301 SCRA 278, 288-289 (January 20, 1999). See
also Ichong v. Hernandez, No. L-7995, 101 Phil. 1155 (May 31, 1957); Vera v.
Cuevas, Nos. L-33693-94, 90 SCRA 379, 388 (May 31, 1979); and Tolentino v.
Secretary of Finance, G.R. Nos. 115455, 115525, 115543, 115544, 115754, 115781,
115852, 115873, and 115931, 235 SCRA 630, 684 (August 25, 1994).
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The guaranty of equal protection of the laws is not a guaranty of equality in

the application of the laws upon all citizens of the state. It is not, therefore, a
requirement, in order to avoid the constitutional prohibition against
inequality, that every man, woman and child should be affected alike by a
statute. Equality of operation of statutes does not mean indiscriminate

operation on persons merely as such, but on persons according to the
circumstances surrounding them. It guarantees equality, not identity of
rights. The Constitution does not require that things which are different in
fact be treated in law as though they were the same. The equal protection
clause does not forbid discrimination as to things that are different. It does
not prohibit legislation which is limited either in the object to which it is
directed or by the territory within which it is to operate.
The equal protection of the laws clause of the Constitution allows
classification. Classification in law, as in the other departments of
knowledge or practice, is the grouping of things in speculation or practice
because they agree with one another in certain particulars. A law is not
invalid because of simple inequality. The very idea of classification is that
of inequality, so that it goes without saying that the mere fact of inequality
in no manner determines the matter of constitutionality. All that is required
of a valid classification is that it be reasonable, which means that the
classification should be based on substantial distinctions which make for
real differences, that it must be germane to the purpose of the law; that it
must not be limited to existing conditions only; and that it must apply
equally to each member of the class. This Court has held that the standard is
satisfied if the classification or distinction is based on a reasonable
foundation or rational basis and is not palpably arbitrary.
In the exercise of its power to make classifications for the purpose of
enacting laws over matters within its jurisdiction, the state is recognized as
enjoying a wide range of discretion. It is not necessary that the classification
be based on scientific or marked differences of things or in their relation.
Neither is it necessary that the classification be made with mathematical
nicety. Hence, legislative classification may in many cases properly rest on
narrow distinctions, for the equal protection guaranty does not preclude the
legislature from recognizing degrees of evil or harm, and legislation is
addressed to evils as they may appear. (citations omitted)
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Congress is 15allowed a wide leeway in providing for a valid

classification. The equal protection clause is not infringed by
legislation which
16
applies only to those persons falling within a
specified class. If the groupings are characterized by substantial
distinctions that make real differences,
17
one class may be treated and
regulated differently from another. The classification must also be
germane to the purpose of18 the law and must apply to all those
belonging to the same class.
_______________
15 Association of Small Landowners in the Philippines, Inc. v. Secretary of

Agrarian Reform, G.R. Nos. 78742, 79310, 79744, and 79777, 175 SCRA 343 (July
14, 1989). See Tiu v. Court of Appeals, G.R. No. 127410, 301 SCRA 278 (January 20,
1999).
16 Ichong v. Hernandez, No. L-7995, 101 Phil. 1155 (May 31, 1957), citing 2
Cooley, Constitutional Limitations, pp. 824-825.
17 Tiu v. Court of Appeals, G.R. No. 127410, 301 SCRA 278 (January 20, 1999);
Dumlao v. Commission on Elections, No. L-52245, 95 SCRA 392, 404 (January 22,
1980); and Himagan v. People, G.R. No. 113811, 237 SCRA 538 (October 7, 1994).
See also JMM Promotion and Management, Inc. v. Court of Appeals, G.R. No.
120095, 260 SCRA 319, 331-332 (August 5, 1996); The Conference of Maritime
Manning Agencies, Inc. v. Philippine Overseas Employment Agency, G.R. No.
114714, 243 SCRA 666, 677 (April 21, 1995); Ceniza v. Commission on Elections,
No. L-52304, 95 SCRA 763, 772 (January 28, 1980); Vera v. Cuevas, Nos. L-33693-
94, 90 SCRA 379 (May 31, 1979); and Tolentino v. Secretary of Finance, G.R. Nos.
115455, 115525, 115543, 115544, 115754, 115781, 115852, 115873 and 115931, 235
SCRA 630 (August 25, 1994).
18 Dumlao v. Commission on Elections, No. L-52245, 95 SCRA 392, 405 (January
22, 1980), citing Peralta v. Commission on Elections, No. L-47771, No. L-47803, No.
L-47816, No. L-47767, No. L-47791 and No. L-47827, 82 SCRA 30 (March 11,
1978); Rafael v. Embroidery and Apparel Control and Inspection Board, No. L-
19978, 21 SCRA 336 (September 29, 1967); and Ichong, v. Hernandez, No. L-7995,
101 Phil. 1155 (May 31, 1957). See also JMM Promotion and Management, Inc. v.
Court of Appeals, G.R. No. 120095, 260 SCRA 319 (August 5, 1996); Philippine
Judges Association v. Prado, G.R. No. 105371, 227 SCRA 703 (November 11, 1993);
and Villegas v. Hiu Chiong Tsai Pao Ho, No. L-29646, 86 SCRA 270, 275 (November
10, 1978).
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In the case at bar, it is clear in the legislative deliberations that the

exemption of officers (SG 20 and above) from the SSL was intended
to address the BSP’s lack of competitiveness in terms of attracting
competent officers and executives. It was not intended to
discriminate against the rank-and-file. If the end-result did in fact
lead to a disparity of treatment between the officers and the rank-
and-file in terms of salaries and benefits, the discrimination or
distinction has a rational basis and is19 not palpably, purely, and
entirely arbitrary in the legislative sense.
That the provision was a product of amendments introduced
during the deliberation of the Senate Bill does not detract from 20
its
validity. As early as 1947 and reiterated in subsequent cases, this
Court has subscribed to the conclusiveness of an enrolled bill to

refuse invalidating a provision of law, on the ground that the bill
from which it originated contained no such provision and was
merely inserted by the bicameral conference committee of both
Houses.
Moreover, it is a fundamental and familiar teaching that all
reasonable doubts should21 be resolved in favor of the
constitutionality of a statute. An act of the legislature, approved by22
the executive, is presumed to be within constitutional limitations.
To justify the nullification of a law, there must
_______________
19 People v. Carlos, No. L-239, 78 Phil. 535 (June 30, 1947).

20 See Mabanag v. Lopez Vito, No. L-1123, 78 Phil. 1 (March 5, 1947); Casco
Philippine Chemical Co., Inc. v. Gimenez, No. L-17931, 7 SCRA 347 (February 28,
1963); Morales v. Subido, No. L-29658, 27 SCRA 131 (February 27, 1969); and
Philippine Judges Association v. Prado, G.R. No. 105371, 227 SCRA 703 (November
11, 1993).
21 People v. Vera, No. 45685, 65 Phil. 56 (November 16, 1937).
22 Id., citing U.S. v. Ten Yu, 24 Phil. 1, 10 (December 28, 1912); Case v. Board of
Health, 24 Phil. 250, 276 (February 4, 1913); and U.S. v. Joson, No. 7019, 26 Phil. 1
(October 29, 1913).
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be a clear and unequivocal

23
breach of the Constitution, not a doubtful
and equivocal breach.
B. THE ENACTMENT, HOWEVER, OF SUBSEQUENT

LAWS—EXEMPTING ALL OTHER RANK-AND-FILE
EMPLOYEES OF GFIs FROM THE SSL—RENDERS
THE CONTINUED APPLICATION OF THE
CHALLENGED PROVISION A VIOLATION OF THE
EQUAL PROTECTION CLAUSE.
While R.A. No. 7653 started as a valid measure well within the
legislature’s power, we hold that the enactment of subsequent laws
exempting all rank-and-file employees of other GFIs leeched all
validity out of the challenged proviso.
1. The concept of relative constitutionality.

The constitutionality of a statute cannot, in every instance, be
determined by a mere comparison of its provisions with applicable
provisions of the Constitution, since the statute may be

constitutionally valid as
24
applied to one set of facts and invalid in its
application to another.
A statute valid at one time may 25
become void at another time
because of altered circumstances. Thus, if a statute in its practical
operation becomes arbitrary or confiscatory, its validity, even though
affirmed by a former adjudication, is
_______________
23 Dumlao v. Commission on Elections, No. L-52245, 95 SCRA 392, 404 (January

22, 1980).
24 Medill v. State, 477 N.W.2d 703 (Minn. 1991) (followed with reservations by, In
re Cook, 138 B.R. 943 [Bankr. D. Minn. 1992]).
25 Nashville, C. & St. L. Ry. v. Walters, 294 U.S. 405, 55 S. Ct. 486, 79 L. Ed. 949
(1935); Atlantic Coast Line R. Co. v. Ivey, 148 Fla. 680, 5 So. 2d 244, 139 A.L.R. 973
(1941); Louisville & N. R. Co. v. Faulkner, 3 G.R. No. L-29646 07 S.W.2d 196 (Ky.
1957); and Vernon Park Realty v. City of Mount Vernon, 307 N.Y. 493, 121 N.E.2d
517 (1954).
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open to inquiry
26
and investigation in the light of changed
conditions.
Demonstrative27
of this doctrine is Vernon Park Realty v. City of
Mount Vernon, where the Court of Appeals of New York declared
as unreasonable and arbitrary a zoning ordinance which placed the
plaintiff's property in a residential district, although it was located in
the center of a business area. Later amendments to the ordinance
then prohibited the use of the property except for parking and
storage of automobiles, and service station within a parking area.
The Court found the ordinance to constitute an invasion of property
rights which was contrary to constitutional due process. It ruled:
While the common council has the unquestioned right to enact zoning laws
respecting the use of property in accordance with a well-considered and
comprehensive plan designed to promote public health, safety and general
welfare, such power is subject to the constitutional limitation that it may not
be exerted arbitrarily or unreasonably and this is so whenever the zoning
ordinance precludes the use of the property for any purpose for which it is
reasonably adapted. By the same token, an ordinance valid when adopted
will nevertheless be stricken down as invalid when, at a later time, its
operation under changed conditions proves confiscatory such, for
instance, as when the greater part of its value is destroyed, for which the
28
28
courts will afford relief in an appropriate case. (citations omitted, emphasis
supplied)
In the Philippine setting, this Court declared the continued

enforcement of a valid law as unconstitutional as a consequence
29
of
significant changes in circumstances. Rutter v. Esteban upheld the
constitutionality of the moratorium law—its enactment and
operation being a valid exercise by
_______________
26 Murphy v. Edmonds, 325 Md. 342, 601 A.2d 102 (1992).

27 307 N.Y. 493, 121 N.E.2d 517 (1954).
28 Id.
29 No. L-3708, 93 Phil. 68 (May 18, 1953).
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30
the State of its police power —but also ruled that the continued
enforcement of the otherwise valid law would be unreasonable and
oppressive. It noted the subsequent changes in the country’s
business, industry and agriculture. Thus, the law was set aside
because its continued operation would be grossly discriminatory and 31
lead to the oppression of the creditors. The landmark ruling states:
The question now to be determined is, is the period of eight (8) years which
Republic Act No. 342 grants to debtors of a monetary obligation contracted
before the last global war and who is a war sufferer with a claim duly
approved by the Philippine War Damage Commission reasonable under the
present circumstances?
It should be noted that Republic Act No. 342 only extends relief to
debtors of prewar obligations who suffered from the ravages of the last war
and who filed a claim for their losses with the Philippine War Damage
Commission. It is therein provided that said obligation shall not be due and
demandable for a period of eight (8) years from and after settlement of the
claim filed by the debtor with said Com-
_______________
30 On the constitutionality of Republic Act No. 342, Section 2 provides that all debts and
other monetary obligations contracted before December 8, 1941, any provision in the contract
creating the same or in any subsequent agreement affecting such obligation to the contrary
notwithstanding, shall not be due and demandable for a period of eight (8) years from and after
settlement of the war damage claim of the debtor by the Philippine War Damage Commission;
and Section 3 of said Act provides that should the provision of Section 2 be declared void and
unenforceable, then as regards the obligation affected thereby, the provisions of Executive
Order No. 25 dated November 18, 1944, as amended by Executive Order No. 32, dated March
10, 1945, relative to debt moratorium, shall continue to be in force and effect, any contract
affecting the same to the contrary notwithstanding, until subsequently repealed or amended by
a legislative enactment. It thus clearly appears in said Act that the nullification of its provisions
will have the effect of reviving the previous moratorium orders issued by the President of the
Philippines.
31 Rutter v. Esteban, G.R. No. L-3708, 93 Phil. 68 (May 18, 1953).
350

mission. The purpose of the law is to afford to prewar debtors an

opportunity to rehabilitate themselves by giving them a reasonable time
within which to pay their prewar debts so as to prevent them from being
victimized by their creditors. While it is admitted in said law that since
liberation conditions have gradually returned to normal, this is not so with
regard to those who have suffered the ravages of war and so it was therein
declared as a policy that as to them the debt moratorium should be
continued in force (Section 1).
But we should not lose sight of the fact that these obligations had been
pending since 1945 as a result of the issuance of Executive Orders Nos. 25
and 32 and at present their enforcement is still inhibited because of the
enactment of Republic Act No. 342 and would continue to be unenforceable
during the eight-year period granted to prewar debtors to afford them an
opportunity to rehabilitate themselves, which in plain language means that
the creditors would have to observe a vigil of at least twelve (12) years
before they could effect a liquidation of their investment dating as far back
as 1941. This period seems to us unreasonable, if not oppressive. While the
purpose of Congress is plausible, and should be commended, the relief
accorded works injustice to creditors who are practically left at the mercy of
the debtors. Their hope to effect collection becomes extremely remote, more
so if the credits are unsecured. And the injustice is more patent when, under
the law, the debtor is not even required to pay interest during the operation
of the relief, unlike similar statutes in the United States.
xxx xxx xxx
In the face of the foregoing observations, and consistent with what we
believe to be as the only course dictated by justice, fairness and
righteousness, we feel that the only way open to us under the present
circumstances is to declare that the continued operation and
enforcement of Republic Act No. 342 at the present time is
unreasonable and oppressive, and should not be prolonged a minute
longer, and, therefore, the same should be declared null and void and
without effect. (emphasis supplied, citations omitted)
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2. Applicability of the equal protection clause.

In the realm of32 equal protection, the U.S. case of Atlantic Coast Line
R. Co. v. Ivey is illuminating. The Supreme Court of Florida ruled
against the continued application of statutes authorizing the recovery
of double damages plus attorney’s fees against railroad companies,
for animals killed on unfenced railroad right of way without proof of
negligence. Competitive motor carriers, though creating greater
hazards, were not subjected to similar liability because they were not
yet in existence when the statutes were enacted. The Court ruled that
the statutes became invalid as denying “equal protection of the law,”
in view of changed conditions since their enactment. 33
In another U.S. case, Louisville & N.R. Co. v. Faulkner, the
Court of Appeals of Kentucky declared unconstitutional a provision
of a statute which imposed a duty upon a railroad company of
proving that it was free from negligence in the killing or injury of
cattle by its engine or cars. This, notwithstanding that the
constitutionality of the statute, enacted in 1893, had been previously
sustained. Ruled the Court:
The constitutionality of such legislation was sustained because it applied to

all similar corporations and had for its object the safety of persons on a train
and the protection of property…. Of course, there were no automobiles in
those days. The subsequent inauguration and development of transportation
by motor vehicles on the public highways by common carriers of freight and
passengers created even greater risks to the safety of occupants of the
vehicles and of danger of injury and death of domestic animals. Yet, under
the law the operators of that mode of competitive transportation are not
subject to the same extraordinary legal responsibility for killing such
animals on the public roads as are railroad companies for killing them on
their private rights of way.
_______________
32 148 Fla. 680, 5 So. 2d 244, 139 A.L.R. 973 (1941).

33 307 S.W.2d 196 (Ky. 1957).
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The Supreme Court, speaking through Justice Brandeis in Nashville, C. &

St. L. Ry. Co. v. Walters, 294 U.S. 405, 55 S.Ct. 486, 488, 79 L.Ed. 949,
stated, “A statute valid when enacted may become invalid by change in the
conditions to which it is applied. The police power is subject to the
constitutional limitation that it may not be exerted arbitrarily or
unreasonably.” A number of prior opinions of that court are cited in support
of the statement. The State of Florida for many years had a statute, F.S.A. §
356.01 et seq. imposing extraordinary and special duties upon railroad
companies, among which was that a railroad company was liable for double
damages and an attorney’s fee for killing livestock by a train without the
owner having to prove any act of negligence on the part of the carrier in the
operation of its train. In Atlantic Coast Line Railroad Co. v. Ivey, it was held
that the changed conditions brought about by motor vehicle transportation
rendered the statute unconstitutional since if a common carrier by motor
vehicle had killed the same animal, the owner would have been required to
prove negligence in the operation of its equipment.
34
Said the court, “This
certainly is not equal protection of the law.” (emphasis supplied)
Echoes of these rulings resonate in our case law, viz.:
[C]ourts are not confined to the language of the statute under challenge
in determining whether that statute has any discriminatory effect. A statute
nondiscriminatory on its face may be grossly discriminatory in its
operation. Though the law itself be fair on its face and impartial in
appearance, yet, if it is applied and administered by public authority with an
evil eye and unequal hand, so as practically to make unjust and illegal
discriminations between persons in similar circumstances, material to their
rights, the denial
35
of equal justice is still within the prohibition of the
Constitution. (emphasis supplied, citations omitted)
[W]e see no difference between a law which denies equal protection
and a law which permits of such denial. A law may appear to be fair on its
face and impartial in appearance, yet, if it permits of unjust and illegal
discrimination, it is within the constitu-
_______________
34 Id.
35 People v. Dela Piedra, G.R. No. 121777, 350 SCRA 163 (January 24, 2001).
353
VOL. 446, DECEMBER 15, 2004 353

tional prohibition….. In other words, statutes may be adjudged

unconstitutional because of their effect in operation…. If a law has the 36
effect of denying the equal protection of the law it is unconstitutional. ….
(emphasis supplied, citations omitted)
3. Enactment of R.A. Nos. 7907 + 8282 + 8289 + 8291 + 8523 +

8763 + 9302 = consequential unconstitutionality of challenged
proviso.
According to petitioner, the last proviso of Section 15(c), Article II
of R.A. No. 7653 is also violative of the equal protection clause
because after it was enacted, the charters of the GSIS, LBP, DBP
and SSS were also amended, but the personnel 37of the latter GFIs
were all exempted from the coverage of the SSL. Thus, within the
class of rank-and-file personnel of GFIs, the BSP rank-and-file are
also discriminated upon.
Indeed, we take judicial notice that after the new BSP charter was
enacted in 1993, Congress also undertook the amendment of the
charters of the GSIS, LBP, DBP and SSS, and three other GFIs, from
1995 to 2004, viz.:
1. R.A. No. 7907 (1995) for Land Bank of the Philippines

(LBP);
2. R.A. No. 8282 (1997) for Social Security System (SSS);
3. R.A. No. 8289 (1997) for Small Business Guarantee and
Finance Corporation, (SBGFC);
_______________
36 People v. Vera, No. 45685, 65 Phil. 56 (November 16, 1937). Parenthetically,

this doctrine was first enunciated in the 1886 case of Yick Wo v. Hopkins (118 U.S.
356, 6 S.Ct. 1064, 30 L.Ed. 220), wherein the U.S. Supreme Court, speaking through
Justice Matthews, declared: “. . . Though the law itself be fair on its face and
impartial in appearances, yet, if it is applied and administered by public authority with
an evil eye and an unequal hand, so as practically to make unjust and illegal
discriminations between persons in similar circumstances, material to their rights, the
denial of equal justice is still within the prohibition of the Constitution.”
37 Rollo, pp. 12-14.
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Pilipinas
4. R.A. No. 8291 (1997) for Government Service Insurance

System (GSIS);
5. R.A. No. 8523 (1998) for Development Bank of the
Philippines (DBP);
6. R.A. No.
38
8763 (2000) for Home Guaranty Corporation
(HGC); and
7. R.A. No. 9302 (2004) for Philippine Deposit Insurance

Corporation (PDIC).
It is noteworthy, as petitioner points out, that the subsequent

charters of the seven other GFIs share this common proviso: a
blanket exemption of all their employees from the coverage of the
SSL, expressly or impliedly, as illustrated below:
1. LBP (R.A. No. 7907)
Section 10. Section 90 of [R.A. No. 3844] is hereby amended to read as

follows:
Section 90. Personnel.—

xxx xxx xxx
All positions in the Bank shall be governed by a compensation, position
classification system and qualification standards approved by the Bank’s Board of
Directors based on a comprehensive job analysis and audit of actual duties and
responsibilities. The compensation plan shall be comparable with the prevailing
compensation plans in the private sector and shall be subject to periodic review by
the Board no more than once every two (2) years without prejudice to yearly merit
reviews or increases based on productivity and profitability. The Bank shall
therefore be exempt from existing laws, rules and regulations on compensation,
position classification and qualification standards. It shall however endeavor to
make its system conform as closely as possible with the principles under Republic
Act No. 6758. (emphasis supplied)
_______________
38 Formerly the Home Insurance and Guaranty Corporation (HIGC).
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xxx xxx xxx
2. SSS (R.A. No. 8282)
Section 1. [Amending R.A. No. 1161, Section 3(c)]:

xxx xxx xxx
(c) The Commission, upon the recommendation of the SSS President, shall appoint
an actuary and such other personnel as may [be] deemed necessary; fix their
reasonable compensation, allowances and other benefits; prescribe their duties and
establish such methods and procedures as may be necessary to insure the efficient,
honest and economical administration of the provisions and purposes of this Act:
Provided, however, That the personnel of the SSS below the rank of Vice President
shall be appointed by the SSS President: Provided, further, That the personnel
appointed by the SSS President, except those below the rank of assistant manager,
shall be subject to the confirmation by the Commission; Provided further, That the
personnel of the SSS shall be selected only from civil service eligibles and be subject
to civil service rules and regulations: Provided, finally, That the SSS shall be
exempt from the provisions of Republic Act No. 6758 and Republic Act No.
7430. (emphasis supplied)
3. SBGFC (R.A. No. 8289)
Section 8. [Amending R.A. No. 6977, Section 11]:

xxx xxx xxx
The Small Business Guarantee and Finance Corporation shall:
xxx xxx xxx
(e) notwithstanding the provisions of Republic Act No. 6758, and
Compensation Circular No. 10, series of 1989 issued by the Department of
Budget and Management, the Board of Directors of SBGFC shall have the
authority to extend to the employees and personnel thereof the allowance and
fringe benefits similar to those extended to and currently enjoyed by the
employees and personnel of other government financial institutions. (emphases
supplied)
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4. GSIS (R.A. No. 8291)
Section 1. [Amending Section 43(d)].

xxx xxx xxx
Sec. 43. Powers and Functions of the Board of Trustees.—The Board of
Trustees shall have the following powers and functions:
xxx xxx xxx
(d) upon the recommendation of the President and General Manager, to approve the
GSIS’ organizational and administrative structures and staffing pattern, and to
establish, fix, review, revise and adjust the appropriate compensation package for the
officers and employees of the GSIS with reasonable allowances, incentives, bonuses,
privileges and other benefits as may be necessary or proper for the effective
management, operation and administration of the GSIS, which shall be exempt from
Republic Act No. 6758, otherwise known as the Salary Standardization Law and
Republic Act No. 7430, otherwise known as the Attrition Law. (emphasis supplied)
xxx xxx xxx
5. DBP (R.A. No. 8523)
Section 6. [Amending E.O. No. 81, Section 13]:
Section 13. Other Officers and Employees.—The Board of Directors shall provide
for an organization and staff of officers and employees of the Bank and upon
recommendation of the President of the Bank, fix their remunerations and other
emoluments. All positions in the Bank shall be governed by the compensation,
position classification system and qualification standards approved by the Board of
Directors based on a comprehensive job analysis of actual duties and responsibilities.
The compensation plan shall be comparable with the prevailing compensation plans
in the private sector and shall be subject to periodic review by the Board of Directors
once every two (2) years, without prejudice to yearly merit or increases based on the
Bank’s productivity and profitability. The Bank shall, therefore, be exempt from
existing laws, rules, and regulations on compensation, position classification and
qualification standards. The Bank shall however, endeavor to make its system
conform as closely as possible
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with the principles under Compensation and Position Classification Act of 1989
(Republic Act No. 6758, as amended). (emphasis supplied)
6. HGC (R.A. No. 8763)
Section 9. Powers, Functions and Duties of the Board of Directors.—

The Board shall have the following powers, functions and duties:
xxx xxx xxx

(e) To create offices or positions necessary for the efficient management,
operation and administration of the Corporation: Provided, That all positions in the
Home Guaranty Corporation (HGC) shall be governed by a compensation and
position classification system and qualifications standards approved by the
Corporation’s Board of Directors based on a comprehensive job analysis and audit of
actual duties and responsibilities: Provided, further, That the compensation plan
shall be comparable with the prevailing compensation plans in the private sector
and which shall be exempt from Republic Act No. 6758, otherwise known as the
Salary Standardization Law, and from other laws, rules and regulations on salaries
and compensations; and to establish a Provident Fund and determine the
Corporation’s and the employee’s contributions to the Fund; (emphasis supplied)
xxx xxx xxx
7. PDIC (R.A. No. 9302)
Section 2. Section 2 of [Republic Act No. 3591, as amended] is hereby

further amended to read:
xxx xxx xxx
3.
xxx xxx xxx
A compensation structure, based on job evaluation studies and wage surveys and
subject to the Board’s approval, shall be instituted as an integral component of the
Corporation’s human resource development program: Provided, That all positions in
the Corporation shall be governed by a compensation, position
358

classification system and qualification standards approved by the Board based on a

comprehensive job analysis and audit of actual duties and responsibilities. The
compensation plan shall be comparable with the prevailing compensation plans
of other government financial institutions and shall be subject to review by the
Board no more than once every two (2) years without prejudice to yearly merit
reviews or increases based on productivity and profitability. The Corporation shall
therefore be exempt from existing laws, rules and regulations on compensation,
position classification and qualification standards. It shall however endeavor to
make its system conform as closely as possible with the principles under Republic
Act No. 6758, as amended. (emphases supplied)
Thus, eleven years after the amendment of the BSP charter, the rank-
and-file of seven other GFIs were granted the exemption that was
specifically denied to the rank-and-file of the BSP. And as if to add
insult to petitioner’s injury, even the Securities and Exchange
Commission (SEC) 39
was granted the same blanket exemption from
the SSL in 2000!
_______________
39 R.A. No. 8799 (2000), Section 7.2 provides: All positions of the Commission
shall be governed by a compensation and position classification systems and
qualification standards approved by the Commission based on a comprehensive job
analysis and audit of actual duties and responsibilities. The compensation plan shall
be comparable with the prevailing compensation plan in the Bangko Sentral ng
Pilipinas and other government financial institutions and shall be subject to periodic
review by the Commission no more than once every two (2) years without prejudice
to yearly merit reviews or increases based on productivity and efficiency. The
Commission shall, therefore, be exempt from laws, rules, and regulations on
compensation, position classification and qualification standards. The Commission
shall, however, endeavor to make its system conform as closely as possible with the
principles under the Compensation and Position Classification Act of 1989 (Republic
Act No. 6758, as amended).
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The prior view on the constitutionality of R.A. No. 7653 was

confined to an evaluation of its classification between the rank-and-
file and the officers of the BSP, found reasonable because there were
substantial distinctions that made real differences between the two
classes.
The above-mentioned subsequent enactments, however, constitute
significant changes in circumstance that considerably alter the
reasonability of the continued operation of the last proviso of
Section 15(c), Article II of Republic Act No. 7653, thereby exposing
the proviso to more serious scrutiny. This time, the scrutiny relates
to the constitutionality of the classification—albeit made indirectly
as a consequence of the passage of eight other laws—between the
rank-and-file of the BSP and the seven other GFIs. The
classification must not only be reasonable, but must also apply
equally to all members of the class. The proviso may be fair on its
face and impartial in appearance but it cannot be grossly
discriminatory in its operation, so as practically to make 40
unjust
distinctions between persons who are without differences.
Stated differently, the second level of inquiry deals with the
following questions: Given that Congress chose to exempt other
GFIs (aside the BSP) from the coverage of the SSL, can the
exclusion of the rank-and-file employees of the BSP stand
constitutional scrutiny in the light of the fact that Congress did not
exclude the rank-and-file employees of the other GFIs? Is Congress’
power to classify so unbridled as to sanction unequal and
discriminatory treatment, simply because the inequity manifested
itself, not instantly through a single overt act, but gradually and
progressively, through seven separate acts of Congress? Is the right
to equal protection of the law bounded in time and space that: (a) the
right can only be invoked against a classification made directly and
deliberately, as opposed to a discrimination that arises indirectly, or
_______________
40 People v. Dela Piedra, G.R. No. 121777, 350 SCRA 163 (January 24, 2001).
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as a consequence of several other acts; and (b) is the legal analysis

confined to determining the validity within the parameters of the
statute or ordinance (where the inclusion or exclusion is articulated),
thereby proscribing any evaluation vis-à-vis the grouping, or the lack
thereof, among several similar enactments made over a period of

time?
In this second level of scrutiny, the inequality of treatment cannot
be justified on the mere assertion that each exemption (granted to
the seven other GFIs) rests “on a policy determination by the
legislature.” All legislative enactments necessarily rest on a policy
determination—even those that have been declared to contravene
the Constitution. Verily, if this could serve as a magic wand to
sustain the validity of a statute, then no due process and equal
protection challenges would ever prosper. There is nothing
inherently sacrosanct in a policy determination made by Congress or
by the Executive; it cannot run riot and overrun the ramparts of
protection of the Constitution.
In fine, the “policy determination” argument may support the
inequality of treatment between the rank-and-file and the officers of
the BSP, but it cannot justify the inequality of treatment between
BSP rank-and-file and other GFIs’ who are similarly situated. It fails
to appreciate that what is at issue in the second level of scrutiny is
not the declared policy of each law per se, but the oppressive results
of Congress’ inconsistent and unequal policy towards the BSP rank-
and-file and those of the seven other GFIs. At bottom, the second
challenge to the constitutionality of Section 15(c), Article II of
Republic Act No. 7653 is premised precisely on the irrational
discriminatory policy adopted by Congress in its treatment of
persons similarly situated. In the field of equal protection, the
guarantee that “no person shall be … denied the equal protection of
the laws” includes the prohibition against enacting laws that allow
invidious discrimination, directly or indi-
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rectly. If a law has the effect of denying the equal 41

protection of the
law, or permits such denial, it is unconstitutional.
It is against this standard that the disparate treatment of the BSP
rank-and-file from the other GFIs cannot stand judicial scrutiny. For
as regards the exemption from the coverage of the SSL, there exist
no substantial distinctions so as to differentiate, the BSP rank-and-
file from the other rank-and-file of the seven GFIs. On the contrary,
our legal history shows that GFIs have long been recognized as
comprising one distinct class, separate from other governmental
entities.
Before the SSL, Presidential Decree (P.D.) No. 985 (1976)
declared it as a State policy (1) to provide equal pay for substantially
equal work, and (2) to base differences in pay upon substantive
differences in duties and responsibilities, and qualification

requirements of the positions. P.D. No. 985 was passed to address
disparities in pay among similar or comparable positions which had
given rise to dissension among government employees. But even
then, GFIs and government-owned and/or controlled corporations
(GOCCs) were already identified as a distinct class among
government employees. Thus, Section 2 also provided, “[t]hat
notwithstanding a standardized salary system established for all
employees, additional financial incentives may be established by
government corporation and financial institutions for their
employees to be supported fully from their corporate funds and for
such technical positions as may42
be approved by the President in
critical government agencies.”
The same favored treatment is made for the GFIs and the GOCCs
under the SSL. Section 3(b) provides that one of the principles
governing the Compensation and Position Classification System of
the Government is that: “[b]asic compensation for all personnel in
the government and government-owned or controlled corporations
and financial institutions
_______________
41 People v. Vera, No. 45685, 65 Phil. 56 (November 16, 1937).

42 P.D. No. 985 (August 22, 1976).
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shall generally be comparable with those in the private sector doing

comparable work, and must be in accordance with prevailing laws
on minimum wages.”
Thus, the BSP and all other GFIs and GOCCs were under the
unified
43
Compensation and Position Classification System of the
SSL, but rates of pay under the SSL were determined on the basis
of, among others, prevailing rates in the private sector for
comparable work. Notably, the Compensation and Position
Classification System was to be governed by the following
principles: (a) just and equitable wages, with the ratio of
compensation
44
between pay distinctions maintained at equitable
levels; and (b) basic compensation generally comparable with the
private45 sector, in accordance with prevailing laws on minimum
wages. Also, the Department of Budget and Management was
directed to use, as guide for preparing the Index of Occupational
Services, 46
the Benchmark Position Schedule, and the following
factors:
(1) the education and experience required to perform the duties

and responsibilities of the positions;
_______________
43 R.A. No. 6758, Section 2, the policy of which is to “provide equal pay for
substantially equal work and to base differences in pay upon substantive differences
in duties and responsibilities, and qualification requirements of the positions.”
44 Section 3(a) provides that “All government personnel shall be paid just and
equitable wages; and while pay distinctions must necessarily exist in keeping with
work distinctions, the ratio of compensation for those occupying higher ranks to those
at lower ranks should be maintained at equitable levels giving due consideration to
higher percentages of increases to lower level positions and lower percentage
increases to higher level positions.”
45 Section 3(b) states that “Basic compensation for all personnel in the
government, and government-owned or controlled corporations (GOCCs) and
financial institutions (GFIs) shall generally be comparable with those in the private
sector doing comparable work, and must be in accordance with prevailing laws on
minimum wages.”
46 Id., Section 9.
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(2) the nature and complexity of the work to be performed;

(3) the kind of supervision received;
(4) mental and/or physical strain required in the completion of
the work;
(5) nature and extent of internal and external relationships;
(6) kind of supervision exercised;
(7) decision-making responsibility;
(8) responsibility for accuracy of records and reports;
(9) accountability for funds, properties and equipment; and
(10) hardship, hazard and personal risk involved in the job.
The Benchmark Position Schedule enumerates the position titles that

fall within Salary Grades 1 to 20.
Clearly, under R.A. No. 6758, the rank-and-file of all GFIs were
similarly situated in all aspects pertaining to compensation and
position classification, in47 consonance with Section 5, Article IX-B
of the 1997 Constitution.
Then came the enactment of the amended charter of the BSP,
implicitly exempting the Monetary Board from the SSL by giving it
express authority to determine and institute its own compensation

and wage structure. However, employees whose positions fall under
SG 19 and below were specifically limited to the rates prescribed
under the SSL.
Subsequent amendments to the charters of other GFIs followed.
Significantly, each government financial institution (GFI) was not
only expressly authorized to determine and institute its own
compensation and wage structure, but also explicitly exempted—
without distinction as to salary grade or position—all employees of
the GFI from the SSL.
_______________
47 Section 5 of the 1987 Constitution provides: “The Congress shall provide for the
standardization of compensation of government officials, including those in
government-owned or controlled corporations with original charters, taking into
account the nature of the responsibilities pertaining to, and the qualifications required
for their positions.”
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It has been proffered that legislative deliberations justify the grant or

withdrawal of exemption from the SSL, based on the perceived need
“to fulfill the mandate of the institution concerned considering,
among others, that: (1) the GOCC or GFI is essentially proprietary
in character; (2) the GOCC or GFI is in direct competition with
their [sic] counterparts in the private sector, not only in terms of the
provisions of goods or services, but also in terms of hiring and
retaining competent personnel; and (3) the GOCC or GFI are or
were [sic] experiencing difficulties filling up plantilla positions with
competent personnel and/or retaining these personnel. The need for
the scope of exemption necessarily varies with the particular
circumstances of each institution, and the corresponding variance in
the benefits received by the employees is merely incidental.”
The fragility of this argument
48
is manifest. First, the BSP is the
central monetary authority, 49and the banker of the government and
all its political 50subdivisions. It has the sole power and authority to
issue currency; provide policy directions in the areas of money,
banking, and credit; and supervise banks and regulate finance
companies and non-bank financial institutions performing 51
quasi-
banking functions, including the exempted GFIs. Hence, the
argument that the rank-and-file employees of the seven GFIs were
exempted because of the importance of their institution’s mandate
cannot stand any more than an empty sack can stand.
Second, it is certainly misleading to say that “the need for the

scope of exemption necessarily varies with the particular
circumstances of each institution.” Nowhere in the deliberations is
there a cogent basis for the exclusion of the BSP rank-and-file from
the exemption which was granted to the rank-and-file of the other
GFIs and the SEC. As point in fact, the
_______________
48 R.A. No. 7653, Sections 1 and 3.

49 Id., Sections 110 and 113.
50 R.A. No. 7653, Section 50.
51 Id., Sections 1 and 3.
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BSP and the seven GFIs are similarly situated in so far as Congress
deemed it necessary for these institutions to be exempted from the
SSL. True, the SSL-exemption of the BSP and the seven GFIs was
granted in the amended charters of each GFI, enacted separately and
over a period of time. But it bears emphasis that, while each GFI has
a mandate different and distinct from that of another, the
deliberations show that the raison d’être of the SSL-exemption was
inextricably linked to and for the most part based on factors
common to the eight GFIs, i.e., (1) the pivotal role they play in the
economy; (2) the necessity of hiring and retaining qualified and
effective personnel to carry out the GFI’s mandate; and (3) the
recognition that the compensation package of these GFIs is not
competitive, and fall substantially below industry standards.
Considering further that (a) the BSP was the first GFI granted SSL
exemption; and (b) the subsequent exemptions of other GFIs did not
distinguish between the officers and the rank-and-file; it is patent
that the classification made between the BSP rank-and-file and those
of the other seven GFIs was inadvertent, and NOT intended, i.e., it
was not based on any substantial distinction vis-à-vis the particular
circumstances of each GFI. Moreover, the exemption granted to two
GFIs makes express reference to allowance and fringe benefits
similar to those extended to and 52currently enjoyed by the employees
and personnel of other GFIs, underscoring that GFIs are a
particular class within the realm of government entities.
It is precisely this unpremeditated discrepancy in treatment of the
rank-and-file of the BSP—made manifest and glaring with each and
every consequential grant of blanket exemption from the SSL to the
other GFIs—that cannot be rationalized or justified. Even more so,
when the SEC—which is not a GFI—was given leave to have a

compensation plan that “shall be comparable with the prevailing
compensation
_______________
52 R.A. No. 8289 [SBGFC], Section 8; R.A. No. 9302 [PDIC], Section 2.
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53
plan in the [BSP] and other [GFIs],” then granted a blanket
exemption from the SSL, and its rank-and-file endowed a more
preferred treatment than the rank-and-file of the BSP.
The violation to the equal protection clause becomes even more
pronounced when we are faced with this undeniable truth: that if
Congress had enacted a law for the sole purpose of exempting the
eight GFIs from the coverage of the SSL, the exclusion of the BSP
rank-and-file employees would have been devoid of any substantial
or material basis. It bears no moment, therefore, that the unlawful
discrimination was not a direct result arising from one law. “Nemo
potest facere per alium quod non potest facere per directum.” No
one is allowed to do indirectly what he is prohibited to do directly.
It has also been proffered that “similarities alone are not
sufficient to support the conclusion that rank-and-file employees of
the BSP may be lumped together with similar employees of the
other GOCCs for purposes of compensation, position classification
and qualification standards. The fact that certain persons have some
attributes in common does not automatically make them members of
the same class with respect to a legislative
54
classification.” Cited is
the ruling in Johnson v. Robinson: “this finding of similarity
ignores that a common characteristic shared by beneficiaries and
nonbeneficiaries alike, is not sufficient to invalidate a statute when
other characteristics peculiar to only one group rationally explain the
statute’s different treatment of the two groups.”
The reference to Johnson is inapropos. In Johnson, the US Court
sustained the validity of the classification as there were quantitative
and qualitative distinctions, expressly recognized by Congress,
which formed a rational basis for the classification limiting
educational benefits to military service veterans as a means of
helping them readjust to civilian life. The Court listed the peculiar
characteristics as follows:
_______________
53 R.A. No. 8799 (2000), Section 7.2.

54 415 U.S. 361 (1974).
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First, the disruption caused by military service is quantitatively greater than

that caused by alternative civilian service. A conscientious objector
performing alternative service is obligated to work for two years. Service in
the Armed Forces, on the other hand, involves a six-year commitment . . .
xxx xxx xxx
Second, the disruptions suffered by military veterans and alternative
service performers are qualitatively different. Military veterans suffer a far
greater loss of personal freedom during their service careers. Uprooted from
civilian life, the military veteran becomes part of the military establishment,
subject to its discipline and potentially hazardous duty. Congress was
acutely aware of the peculiar disabilities caused by military service, in
consequence of which 55military servicemen have a special need for
readjustment benefits . . . (citations omitted)
In the case at bar, it is precisely the fact that as regards the

exemption from the SSL, there are no characteristics peculiar only to
the seven GFIs or their rank-and-file so as to justify the exemption
which BSP rank-and-file employees were denied (not to mention the
anomaly of the SEC56getting one). The distinction made by the law is
not only superficial, but also arbitrary. It is not based on substantial
distinctions that make real differences between the BSP rank-and-
file and the seven other GFIs.
Moreover, the issue in this case is not—as the dissenting opinion
of Mme. Justice Carpio-Morales would put it—whether “being an
employee of a GOCC or GFI is reasonable and sufficient basis for
exemption” from R.A. No. 6758. It is Congress itself that
distinguished the GFIs from other government agencies, not once
but eight times, through the enactment of R.A. Nos. 7653, 7907,
8282, 8289, 8291, 8523, 8763, and 9302. These laws may have
created a “preferred sub-class within government employees,” but
the present
_______________
55 Id.
56 Philippine Judges Association v. Prado, G.R. No. 105371, 227 SCRA 703
(November 11, 1993).
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challenge is not directed at the wisdom of these laws. Rather, it is a

legal conundrum involving the exercise of legislative power, the
validity of which must be measured not only by looking at the
specific exercise in and by itself (R.A. No. 7653), but also as to the
legal effects brought about by seven separate exercises—albeit
indirectly and without intent.
Thus, even if petitioner had not alleged “a comparable change in
the factual milieu as regards the compensation, position
classification and qualification standards of the employees of the
BSP (whether of the executive level or of the rank-and-file) since
the enactment of the new57 Central Bank Act” is of no moment. In
GSIS v. Montesclaros, this Court resolved the issue of
constitutionality notwithstanding that claimant had manifested that
she was no longer interested in pursuing the case, and even when the
constitutionality of the said provision was not squarely raised as an
issue, because the issue involved not only the claimant but also
others similarly situated and whose claims GSIS would also deny
based on the challenged proviso. The Court held that social justice
and public interest demanded the resolution of the constitutionality
of the proviso. And so it is with the challenged proviso in the case at
bar.
It bears stressing that the exemption from the SSL is a
“privilege” fully within the legislative prerogative to give or deny.
However, its subsequent grant to the rank-and-file of the seven other
GFIs and continued denial to the BSP rank-and-file employees
breached the latter’s right to equal protection. In other words, while
the granting of a privilege per se is a matter of policy exclusively
within the domain and prerogative of Congress, the validity or
legality58 of the exercise of this prerogative is subject to judicial
review. So when the distinction made is superficial, and not based
on substantial distinctions that make real differences between those
included and
_______________
57 G.R. No. 146494; 434 SCRA 441 (July 14, 2004).

58 Constitution, Article VIII, Section 1.
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excluded, it becomes a matter 59of arbitrariness that this Court has the
duty and the power to correct. As held in the United Kingdom 60
case
of Hooper v. Secretary of State for Work and Pensions, once the
State has chosen to confer benefits, “discrimination” contrary to law
may occur where favorable treatment already afforded to one group
is refused to another, even though61
the State is under no obligation to
provide that favorable treatment.
The disparity of treatment between BSP rank-and-file and the
rank-and-file of the other seven GFIs definitely bears the
unmistakable badge of invidious discrimination—no one can, with
candor and fairness, deny the discriminatory character of the
subsequent blanket and total exemption of the seven other GFIs
from the SSL when such was withheld from the BSP. Alikes are
being treated as unalikes without any rational basis.
Again, it must be emphasized that the equal protection clause
does not demand absolute equality but it requires that all persons
shall be treated alike, under like circumstances and conditions both
as to privileges conferred and liabilities enforced. Favoritism and
undue preference cannot be allowed. For the principle is that equal
protection and security shall be
_______________
59 See Philippine Judges Association v. Prado, G.R. No. 105371, 227 SCRA 703,
713-715 (November 11, 1993).
60 [2002] EWHC 191 (Admin).
61 Id. The significance of international human rights instruments in the European
context should not be underestimated. In Hooper for example, the case was brought
on the alleged denial of a right guaranteed by the ECHR, given domestic effect in the
U.K. through its Human Rights Act 1998 (HRA), and the ECHR, as one of the
contracting parties. Also, in Wilson v. United Kingdom, (30668/96) (2002) 35
E.H.R.R. 20 (ECHR), the European Court of Human Rights took into account the
requirements of ILO Conventions Nos. 87 and 98, and of the European Social Charter
of 1961, in ruling that the United Kingdom had breached the applicants’ freedom of
association. See Aileen McColgan, Principles of Equality and Protection from
Discrimination, 2 E.H.R.L.R. 157 (2003).
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given to every person under circumstances which, if not identical,

are analogous. If law be looked upon in terms of burden or charges,
those that fall within a class should be treated in the same fashion;
whatever62 restrictions cast on some in the group is equally binding on
the rest.
In light of the lack of real and substantial distinctions that would

justify the unequal treatment between the rank-and-file of BSP from
the seven other GFIs, it is clear that the enactment of the seven
subsequent charters has rendered the continued application of the
challenged proviso anathema to the equal protection of the law, and
the same should be declared as an outlaw.
IV. Equal Protection Under International Lens
In our jurisdiction, the standard and analysis of equal protection

challenges in the main have followed the “rational basis”63 test,
coupled with a deferential attitude to legislative classifications and
a reluctance to invalidate a law unless there64 is a showing of a clear
and unequivocal breach of the Constitution.
_______________
62 J.M. Tuason and Co., Inc. v. Land Tenure Administration, No. L-21064, 31
SCRA 413, 435 (February 18, 1970).
63 See Association of Small Landowners in the Philippines v. Secretary of Agrarian
Reform, G.R. Nos. 78742, 79310, 79744, and 79777; 175 SCRA 343 (July 14, 1989).
64 People v. Vera, supra, citing U.S. v. Ten Yu, 24 Phil. 1, 10 (December 28, 1912);
Case v. Board of Health and Heiser, supra; and U.S. v. Joson, supra. See Peralta v.
Commission on Elections, No. L-47771, No. L-47803, No. L-47816, No. L-47767,
No. L-47791 and No. L-47826, 82 SCRA 30 (March 11, 1978), citing Cooper v.
Telfair, 4 Dall. 14; DODD, CASES ON CONSTITUTIONAL LAW 56 (3rd ed. 1942).
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A. Equal Protection
in the United States
In contrast, jurisprudence in the U.S. has gone beyond the static

“rational basis” test. Professor Gunther highlights65the development
in equal protection jurisprudential analysis, to wit:
Traditionally, equal protection supported only minimal judicial intervention

in most contexts. Ordinarily, the command of equal protection was only that
government must not impose differences in treatment “except upon some
reasonable differentiation fairly related to the object of regulation.” The old
variety of equal protection scrutiny focused solely on the means used by the
legislature: it insisted merely that the classification in the statute reasonably
relates to the legislative purpose. Unlike substantive due process, equal
protection scrutiny was not typically concerned with identifying
“fundamental values” and restraining legislative ends. And usually the

rational classification requirement was readily satisfied: the courts did not
demand a tight fit between classification and purpose; perfect congruence
between means and ends was not required.
xxx xxx xxx
[From marginal intervention to major cutting edge: The Warren Court’s
“new equal protection” and the two-tier approach.]
From its traditional modest role, equal protection burgeoned into a major
intervention tool during the Warren era, especially in the 1960s. The Warren
Court did not abandon the deferential ingredients of the old equal
protection: in most areas of economic and social legislation, the demands
imposed by equal protection remained as minimal as ever . . . But the Court
launched an equal protection revolution by finding large new areas for strict
rather than deferential scrutiny. A sharply differentiated two-tier approach
evolved by the late 1960s: in addition to the deferential “old” equal
protection, a “new” equal protection, connoting strict scrutiny, arose . . . The
intensive review associated with the new equal protection imposed two
demands—a demand not only as to means but also one as to ends.
_______________
65 GERALD GUNTHER, CONSTITUTIONAL LAW 586-589 (11th ed. 1985).
372

Legislation qualifying for strict scrutiny required a far closer fit between
classification and statutory purpose than the rough and ready flexibility
traditionally tolerated by the old equal protection: means had to be shown
“necessary” to achieve statutory ends, not merely “reasonably related”
ones. Moreover, equal protection became a source of ends scrutiny as well:
legislation in the areas of the new equal protection had to be justified by
“compelling” state interests, not merely the wide spectrum of “legitimate”
state ends.
The Warren Court identified the areas appropriate for strict scrutiny by
searching for two characteristics: the presence of a “suspect” classification;
or an impact on “fundamental” rights or interests. In the category of
“suspect classifications,” the Warren Court’s major contribution was to
intensify the strict scrutiny in the traditionally interventionist area of racial
classifications. But other cases also suggested that there might be more
other suspect categories as well: illegitimacy and wealth for example. But it
was the ‘fundamental interests” ingredient of the new equal protection that
proved particularly dynamic, open-ended, and amorphous . . . . [Other
fundamental interests included voting, criminal appeals, and the right of
interstate travel . . . .]
xxx xxx xxx
The Burger Court and Equal Protection.

The Burger Court was reluctant to expand the scope of the new equal
protection, although its best established ingredient retains vitality. There
was also mounting discontent with the rigid two-tier formulations of the
Warren Court’s equal protection doctrine. It was prepared to use the clause
as an interventionist tool without resorting to the strict language of the new
equal protection . . . . [Among the fundamental interests identified during
this time were voting and access to the ballot, while “suspect”
classifications included sex, alienage and illegitimacy.]
xxx xxx xxx
Even while the two-tier scheme has often been adhered to in form, there
has also been an increasingly noticeable resistance to the sharp difference
between deferential “old” and interventionist “new” equal protection. A
number of justices sought formulations that would blur the sharp
distinctions of the two-tiered approach or that would narrow the gap
between strict scrutiny and deferential re-
373
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view. The most elaborate attack came from Justice Marshall, whose
frequently stated position
66
was developed most elaborately in his dissent in
the Rodriguez case:
The Court apparently seeks to establish [that] equal protection cases fall into one of
two neat categories which dictate the appropriate standard of review—strict scrutiny
or mere rationality. But this (sic) Court’s [decisions] defy such easy categorization.
A principled reading of what this Court has done reveals that it has applied a
spectrum of standards in reviewing discrimination allegedly violative of the equal
protection clause. This spectrum clearly comprehends variations in the degree of
care with which Court will scrutinize particular classification, depending, I believe,
on the constitutional and societal importance of the interests adversely affected and
the recognized invidiousness of the basis upon which the particular classification is
drawn.
Justice Marshall’s “sliding scale” approach describes many of the

modern decisions, although it is a formulation that the majority refused to
embrace. But the Burger Court’s results indicate at least two significant
changes in equal protection law: First, invocation of the “old” equal
protection formula no longer signals, as it did with the Warren Court, an
extreme deference to legislative classifications and a virtually automatic
validation of challenged statutes. Instead, several cases, even while voicing
the minimal “rationality” “hands-off” standards of the old equal protection,
proceed to find the statute unconstitutional. Second, in some areas the
modern Court has put forth standards for equal protection review that, while
clearly more intensive than the deference of the “old” equal protection, are
less demanding than the strictness of the “new” equal protection. Sex
discrimination is the best established example of an “intermediate” level of

review. Thus, in one case, the Court said that “classifications by gender must
serve important governmental objectives and must be substantially related
to achievement of those objectives.” That standard is “intermediate” with
respect to both ends and means: where ends must be “compelling” to
survive strict scrutiny and merely “legitimate” under the “old” mode,
“important” objectives are required here; and where means must be
“necessary” under the
_______________
66 San Antonio Independent School District v. Rodriguez, 411 U.S. 1 (1973).
374

“new” equal protection, and merely “rationally related” under the “old”
equal protection, they must be “substantially related” to survive the
“intermediate” level of review. (emphasis supplied, citations omitted)
B. Equal Protection
in Europe
The United Kingdom and other members of the European

Community have also gone forward in discriminatory legislation and
jurisprudence. Within the United Kingdom domestic law, the most
extensive list of protected grounds can be found in Article 14 of the
European Convention on Human Rights (ECHR). It prohibits
discrimination on grounds such as “sex, race, colour, language,
religion, political or other opinion, national or social origin,
association with a national minority, property, birth or other status.”
This list is illustrative and not exhaustive. Discrimination on the
basis of race, sex and religion is regarded as grounds that require
strict scrutiny. A further indication that certain forms of
discrimination are regarded as particularly suspect under the
Covenant can be gleaned from Article 4, which, while allowing
states to derogate from certain Covenant articles in times of national
emergency, prohibits derogation by measures that discriminate
solely on67
the grounds of “race, colour, language, religion or social
origin.”
Moreover, the European Court of Human Rights has developed a
test of justification which varies
68
with the ground of discrimination.
In the Belgian Linguistics case the European Court set the standard
of justification at a low level: discrimination would contravene the
Convention only if it had no
_______________
67 See Gay Moon, Complying with Its International Human Rights Obligations:
The United Kingdom and Article 26 of the International Covenant on Civil and
Political Rights, 3 E.H.R.L.R. 283-307 (2003).
68 (No. 2) (A/6) 1 E.H.R.R. 252 (1979-80) (ECHR).
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legitimate aim, or there was no reasonable relationship of

proportionality
69
between the means employed and the aim sought to
be realised. But over the years, the European Court has developed
a hierarchy of grounds covered by Article 14 of the ECHR, a much
higher level of justification being required in respect of those
regarded as “suspect” (sex, race, nationality, illegitimacy,
70
or sexual
orientation) than of others. Thus, in Abdulaziz, the European Court
declared that:
. . . [t]he advancement of the equality of the sexes is today a major goal in

the member States of the Council of Europe. This means that very weighty
reasons would have to be advanced before a difference of treatment on the
ground of sex could be regarded as compatible with the Convention.
71
And in Gaygusuz v. Austria, the European Court held that “very
weighty reasons would have to be put forward before the Court
could regard a difference of treatment based exclusively on 72
the
ground of nationality as compatible with the Convention.” The
European Court will then permit States a very much narrower
margin of appreciation in relation to discrimination on grounds of
sex, race, etc., in the application of the Convention rights than it will
in relation to distinctions drawn
73
by states between, for example,
large and small landowners.
_______________
69 The European Court has also taken an even more restricted approach to Article
14, asking only whether the treatment at issue had a justified aim in view or whether
the authorities pursued “other and ill-intentioned designs.” National Union of Belgian
Police v. Belgium, 1 E.H.R.R. 578 (1979-80); and Swedish Engine Drivers’ Union v.
Sweden 1 E.H.R.R. 617 (1979-80).
70 Abdulaziz v. United Kingdom, (A/94) 7 E.H.R.R. 471 (1985) (ECHR).
71 23 E.H.R.R. 364 (1997).
72 Id.
73 Aileen McColgan, Principles of Equality and Protection from Discrimination, 2
E.H.R.L.R. 157 (2003).
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C. Equality under
International Law
The principle of equality has long been recognized under

international law. Article 1 of the Universal Declaration of Human
Rights proclaims that all human beings are born free and equal in
dignity and rights. Non-discrimination, together with equality before
the law and equal protection of the law without any discrimination,
74
constitutes basic principles in the protection of human rights.
Most, if not all, international human rights instruments include
some prohibition
75
on discrimination and/or provisions about
equality. The general international provisions pertinent to
discrimination and/or equality are 76the International Covenant on
Civil and Political Rights (ICCPR); the International Covenant on
Economic, Social and Cultural Rights (ICESCR); the International
Convention on the 77Elimination of all Forms of Racial
Discrimination (CERD); the Convention on the Elimination of all
Forms of Discrimination against
_______________

E.H.R.L.R. 157 (2003). See Tufyal Choudhury, Interpreting the Right to Equality
under Article 26 of the International Covenant on Civil and Political Rights, 1
E.H.R.L.R. 24-52 (2003).
E.H.R.L.R. 157 (2003).
76 Article 26 of the ICCPR provides that:
“All persons are equal before the law and are entitled without any discrimination to the equal
protection of the law. In this respect, the law shall prohibit any discrimination and guarantee to
all persons equal and effective protection against discrimination on any ground such as race,
colour, sex, language, religion, political or other opinion, national or social origin, property,
birth or other status.”
77 Article 5(b) of CERD requires States to protect individuals from (racially

discriminatory) violence “whether inflicted by government officials or by any
individual group or institution.”
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Women (CEDAW); and the Convention on the Rights of the Child

(CRC).
In the broader international context, equality is also enshrined in
regional78 instruments such as the American Convention on Human 79
Rights; the African Charter on Human and 80
People’s Rights; the
European Convention on Human Rights; the European Social
Charter of 1961 and revised Social Charter of 1996; and the
European Union Charter of Rights (of particular importance to
European states). Even the Council of the League of Arab States has
adopted the Arab Charter on Human Rights in 1994, 81although it has
yet to be ratified by the Member States of the League.
_______________
78 Article 1 of the American Conventions on Human Rights provides that:
“The States Parties to this Convention undertake to respect the rights and freedoms recognized
herein and to ensure to all persons subject to their jurisdiction the free and full exercise of those
rights and freedoms, without any discrimination for reasons of race, color, sex, language,
religion, political or other opinion, national or social origin, economic status, birth, or any other
social condition; . . .”
79 Article 26 of the ICCPR is echoed in its broad proscription of discrimination by

Article 3 of the African Charter which provides that:
“1. Every individual shall be equal before the law.

2. Every individual shall be entitled to equal protection of the law.”
80 Article 14 of the European Conventions on Human Rights provides that:
“The enjoyment of the rights and freedoms set forth in this Convention shall be secured without
discrimination on any ground such as sex, race, colour, language, religion, political or other
opinion, national or social origin, association with a national minority, property, birth or other
status.”
81 See Aileen McColgan, Principles of Equality and Protection from

Discrimination, 2 E.H.R.L.R. 157 (2003); and Tufyal Choudhury, Interpreting the
Right to Equality under Article 26 of the Inter-
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The equality provisions in these instruments do not merely function

as traditional “first generation” rights, commonly viewed as
concerned only with constraining rather than requiring State action.

Article 26 of the ICCPR requires “guarantee[s]” of “equal and
effective protection against discrimination” while Articles 1 and 14
of the American and European Conventions oblige States Parties “to
ensure . . . the full and free exercise of [the rights guaranteed] . . .
without any discrimination” and to “secure
82
without discrimination”
the enjoyment of the rights guaranteed. These provisions impose a
measure of positive obligation on States Parties to take steps to
eradicate discrimination.
In the employment field, basic detailed minimum standards
ensuring equality and prevention of discrimination, are laid
_______________
national Covenant on Civil and Political Rights, 1 E.H.R.L.R. 24-52 (2003).

82 Also, Articles 2 and 3 of the ICCPR require that Contracting States agree to
“respect and to ensure to all individuals within its territory and subject to its
jurisdiction the rights recognized in the present Covenant, without distinction of any
kind, such as race, colour, sex, language, religion, political or other opinion, national
or social origin, property, birth or other status,” and (Article 3) “to ensure the equal
right of men and women to the enjoyment of all civil and political rights set forth in
the present may not involve discrimination solely on the ground of race, colour, sex,
language, religion or social origin.” Other examples include: Article 2 of CEDAW,
which require States Parties to the Convention not only to “embody the principle of
the equality of men and women in their national constitutions or other appropriate
legislation” but also “to ensure, through law and other appropriate means, the
practical realization of this principle”; and Article 5(b) of CERD requires States to
protect individuals from (racially discriminatory) violence “whether inflicted by
government officials or by any individual group or institution.” See also Articles 2
and 3 CSECR, and Article 2 of the African Charter, which is similar to Article 2 of
the ICCPR. Aileen McColgan, Principles of Equality and Protection from
Discrimination, 2 E.H.R.L.R. 157 (2003).
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83
down in the ICESCR and in a very large number of Conventions
administered by
84
the International Labour Organisation, a United
Nations body. Additionally, many of the other international and
regional human85rights instruments have specific provisions relating
to employment.
_______________
83 Article 7 of the ICESCR provides the right:
“. . . to the enjoyment of just and favourable conditions of work . . . in particular . . . fair wages
and equal remuneration for work of equal value without distinction of any kind, in particular
women being guaranteed conditions of work not inferior to those enjoyed by men, with equal
pay for equal work [and] . . . equal opportunity for everyone to be promoted in his employment
to an appropriate higher level, subject to no considerations other than those of seniority and
competence.”
84 See Convention Nos. 100 of 1951, 103 of 1952, 111 of 1958, 118 of 1962 and
156 of 1981 which deal respectively with equal pay for men and women; maternity
rights; discrimination in employment and occupation; equality of treatment in social
security; and workers with family responsibilities. Convention No. 100 has been
ratified by no less than 159 countries and Convention No. 111 by 156 (these being
two of the eight fundamental Conventions the ratification of which is all but
compulsory). Conventions Nos. 103, 118 and 156 have been ratified by 40, 38 and 34
countries, respectively.
85 For example, Articles 11, 12 and 13 of CEDAW require the taking of “all
appropriate measures” to eliminate discrimination against women in the fields of
employment, health care, and other areas of economic life including the right to
benefits and financial services. Article 15 of the African Charter provides a right for
“every individual” to “equal pay for equal work,” which, like Article 7 of the
ICESCR, applies whether an individual is employed by the state or by a private body.
The Council of Europe’s Revised Social Charter provides for the “right to equal
opportunities and equal treatment in matters of employment and occupation without
discrimination on the grounds of sex” and to the protection of workers with family
responsibilities. The Social Charter of the Council of Europe also incorporates a
commitment on the part of Contracting States to “recognise the right of men and
women workers to equal pay for work of equal value” as well as that of children,
young persons and women to protection in employment (the latter group in
connection
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The United Nations Human Rights Committee has also gone beyond
the earlier tendency to view the prohibition against
86
discrimination
87
(Article 26) as 88confined to the ICCPR rights. In Broeks and
Zwaan-de Vries, the issue before the Committee was whether
discriminatory provisions in the Dutch Unemployment Benefits Act
(WWV) fell within the scope of Article 26. The Dutch government
submitted that discrimination in social security benefit provision was
not within the scope of Article 26, as the right was contained in the
ICESCR and not the ICCPR. They accepted that Article 26 could go
beyond the rights contained in the Covenant to other civil and
political rights, such as discrimination in the field of taxation, but
contended that Article 26 did not extend to the social, economic, and
cultural rights contained in ICESCR. The Committee rejected this

argument. In its view, Article 26 applied to rights beyond the
Covenant including the rights in other international treaties such as
the right to social security found in ICESCR:
Although Article 26 requires that legislation should prohibit discrimination,

it does not of itself contain any obligation with respect
_______________
with pregnancy and childbirth), and rights for migrant workers. Article 5 CERD does not
merely require Contracting States to eliminate race discrimination in their own practices but
also obliges them to prohibit race discrimination “in all its forms and to guarantee the right of
everyone, without distinction as to race, colour, or national or ethnic origin, to equality before
the law, notably in the enjoyment of economic, social and cultural rights,” in particular,
employment rights including rights to “just and favourable conditions of work”, protection
against unemployment, “just and favourable remuneration” and to form and join trade unions.
See Aileen McColgan, Principles of Equality and Protection from Discrimination, 2
E.H.R.L.R. 157 (2003).
86 Tufyal Choudhury, Interpreting the Right to Equality under Article 26 of the International
Covenant on Civil and Political Rights, 1 E.H.R.L.R. 24-52 (2003).
87 SWM Broeks v. the Netherlands (172/1984).
88 F.H. Zwaan-de Vries v. the Netherlands (182/1984).
381
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to the matters that may be provided for by legislation. Thus it does not, for
example, require any state to enact legislation to provide for social security.
However, when such legislation is adopted in the exercise of a State’s
sovereign 89power, then such legislation must comply with Article 26 of the
Covenant.
Breaches of the right to equal protection occur directly or indirectly.

A classification may be struck down if it has the purpose or effect of
violating the right to equal protection. International law recognizes
that discrimination
90
may occur indirectly, as the Human Rights
Committee took into account the definitions of discrimination
adopted by CERD and CEDAW in declaring that:
. . . “discrimination” as used in the [ICCPR] should be understood to imply

any distinction, exclusion, restriction or preference which is based on any
ground such as race, colour, sex, language, religion, political or other
opinion, national or social origin, property, birth or other status, and which
has the purpose or effect of nullifying or impairing the recognition,
enjoyment91or exercise by all persons, on an equal footing, of all rights and
freedoms. (emphasis supplied)
_______________
89 S.W.M. Broeks v. Netherlands (172/1984), paragraph 12.4.

90 Human Rights Committee, General Comment No. 18 (1989).
91 Id. In the Belgian Linguistics case, (No. 2) (A/6) (1979-80) 1 E.H.R.R. 252
(ECHR), the European Court of Human Rights referred to the “aims and effects” of
the measure challenged under Article14 of the European Convention, implying that
indirect as well as direct discrimination could be contrary to the provision. And in
Thlimmenos v. Greece, 31 E.H.R.R. 15 (2001), the European Court ruled that
discrimination contrary to the European Convention had occurred when a man who
had been criminalised because of his refusal (as a Jehovah’s Witness and, therefore, a
pacifist) to wear a military uniform during compulsory military service, was
subsequently refused access to the chartered accountancy profession because of a rule
which barred those with criminal convictions from being chartered. According to the
Court:
“[We have] so far considered that the right under Article 14 not to be
discriminated against in the enjoyment of the rights guaranteed under the Convention
is violated when States treat differently
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Thus, the two-tier analysis made in the case at bar of the challenged
provision, and its conclusion of unconstitutionality by subsequent
operation, are in cadence and in consonance with the progressive
trend of other jurisdictions and in international law. There should be
no hesitation in using the equal protection clause as a major cutting
edge to eliminate every conceivable irrational discrimination in our
society. Indeed, the social justice imperatives in the Constitution,
coupled with the special
92
status and protection afforded to labor,
compel this approach.
_______________
persons in analogous situations without providing an objective and reasonable

justification . . . However, the Court considers that this is not the only facet of the
prohibition of discrimination in Article 14. The right not to be discriminated against
in the enjoyment of the rights guaranteed under the Convention is also violated when
States without an objective and reasonable justification fail to treat differently persons
whose situations are significantly different.”
See also Jordan v. United Kingdom (App. No. 24746/94), para. 154. Aileen
McColgan, Principles of Equality and Protection from Discrimination, 2 E.H.R.L.R.
157 (2003).
92 The 1987 Constitutional provisions pertinent to social justice and the protection
granted to Labor are:
PREAMBLE:
We, the sovereign Filipino people, imploring the aid of Almighty God, in order to build a just
and humane society and establish a Government that shall embody our ideals and aspirations,
promote the common good, conserve and develop our patrimony, and secure to ourselves and
our posterity the blessings of independence and democracy under the rule of law and a regime
of truth, justice, freedom, love, equality and peace, do ordain and promulgate this Constitution.
ARTICLE II: DECLARATION OF PRINCIPLES AND STATE POLICIES: PRINCIPLES
SECTION 9. The State shall promote a just and dynamic social order that will ensure the
prosperity and independence of the nation and free the people from poverty through policies
that provide adequate social services, promote
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Apropos the special protection afforded to labor under our
_______________
full employment, a rising standard of living, and an improved quality of life for all.
SECTION 10. The State shall promote social justice in all phases of national development.
SECTION 11. The State values the dignity of every human person and guarantees full
respect for human rights.
SECTION 18. The State affirms labor as a primary social economic force. It shall protect
the rights of workers and promote their welfare.
ARTICLE III: BILL OF RIGHTS
SECTION 1. No person shall be deprived of life, liberty or property without due process of
law, nor shall any person be denied the equal protection of the laws.
ARTICLE IX: CONSTITUTIONAL COMMISSIONS

B. THE CIVIL SERVICE COMMISSION
SECTION 5. The Congress shall provide for the standardization of compensation of

government officials and employees, including those in government-owned or controlled
corporations with original charters, taking into account the nature of the responsibilities
pertaining to, and the qualifications required for their positions.
ARTICLE XII: NATIONAL ECONOMY AND PATRIMONY
SECTION 1. The goals of the national economy are a more equitable distribution of
opportunities, income, and wealth; a sustained increase in the amount of goods and services
produced by the nation for the benefit of the people; and an expanding productivity as the key
to raising the quality of life for all, especially the underprivileged.
The State shall promote industrialization and full employment based on sound agricultural
development and agrarian reform, through industries that make full and efficient use of human
and natural resources, and which are competitive in both domestic and foreign markets.
However, the State shall
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Constitution and international law, we held in Interna-
_______________
protect Filipino enterprises against unfair foreign competition and trade practices.
In the pursuit of these goals, all sectors of the economy and all regions of the country shall
be given optimum opportunity to develop. Private enterprises, including corporations,
cooperatives, and similar collective organizations, shall be encouraged to broaden the base of
their ownership.
SECTION 22. Acts which circumvent or negate any of the provisions of this Article shall be
considered inimical to the national interest and subject to criminal and civil sanctions, as may
be provided by law.
ARTICLE XIII: SOCIAL JUSTICE AND HUMAN RIGHTS
SECTION 1. The Congress shall give highest priority to the enactment of measures that
protect and enhance the right of all the people to human dignity, reduce social, economic, and
political inequalities, and remove cultural inequities by equitably diffusing wealth and political
power for the common good.
To this end, the State shall regulate the acquisition, ownership, use, and disposition of
property and its increments.
LABOR
SECTION 3. The State shall afford full protection to labor, local and overseas, organized
and unorganized, and promote full employment and equality of employment opportunities for
all.
It shall guarantee the rights of all workers to self-organization, collective bargaining and
negotiations, and peaceful concerted activities, including the right to strike in accordance with
law. They shall be entitled to security of tenure, humane conditions of work, and a living wage.
They shall also participate in policy and decision-making processes affecting their rights and
benefits as may be provided by law.
The State shall promote the principle of shared responsibility between workers and
employers and the preferential use of voluntary modes in settling disputes, including
conciliation,
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93
tional School Alliance of Educators v. Quisumbing:
That public policy abhors inequality and discrimination is beyond

contention. Our Constitution and laws reflect the policy against these evils.
The Constitution in the Article on Social Justice and Human Rights exhorts
Congress to “give highest priority to the enactment of measures that protect
and enhance the right of all people to human dignity, reduce social,
economic, and political inequalities.” The very broad Article 19 of the Civil
Code requires every person, “in the exercise of his rights and in the
performance of his duties, [to] act with justice, give everyone his due, and
observe honesty and good faith.”
International law, which springs from general principles of law, likewise
proscribes discrimination. General principles of law include principles of
equity, i.e., the general principles of fairness and justice, based on the test of
what is reasonable. The Universal Declaration of Human Rights, the
International Covenant on Economic, Social, and Cultural Rights, the
International Convention on the Elimination of All Forms of Racial
Discrimination, the Convention against Discrimination in Education, the
Convention (No. 111) Concerning Discrimination in Respect of
Employment and Occupation—all embody the general principle against
discrimination, the very antithesis of fairness and justice. The Philippines,
through its Constitution, has incorporated this principle as part of its
national laws.
In the workplace, where the relations between capital and labor are often
skewed in favor of capital, inequality and discrimination by the employer
are all the more reprehensible.
The Constitution specifically provides that labor is entitled to “humane
conditions of work.” These conditions are not restricted to the
_______________
and shall enforce their mutual compliance therewith to foster industrial peace.
The State shall regulate the relations between workers and employers, recognizing the right of labor to
its just share in the fruits of production and the right of enterprises to reasonable returns on investments,
and to expansion and growth.
93 International School Alliance of Educators v. Quisumbing, G.R. No. 128845, 333 SCRA
13 (June 1, 2000).
386

physical workplace—the factory, the office or the field—but include as well

the manner by which employers treat their employees.
The Constitution also directs the State to promote “equality of
employment opportunities for all.” Similarly, the Labor Code provides that
the State shall “ensure equal work opportunities regardless of sex, race or
creed.” It would be an affront to both the spirit and letter of these provisions
if the State, in spite of its primordial obligation to promote and ensure equal
employment opportunities, closes its eyes to unequal and discriminatory

terms and conditions of employment.
xxx xxx xxx
Notably, the International Covenant on Economic, Social, and Cultural
Rights, in Article 7 thereof, provides:
The States Parties to the present Covenant recognize the right of everyone to the
enjoyment of just and [favorable] conditions of work, which ensure, in particular:
a. Remuneration which provides all workers, as a minimum, with:
i. Fair wages and equal remuneration for work of equal value without distinction
of any kind, in particular women being guaranteed conditions of work not inferior to
those enjoyed by men, with equal pay for equal work;
xxx xxx xxx
The foregoing provisions impregnably institutionalize in this jurisdiction

the long honored legal truism of “equal pay for equal work.” Persons who
work with substantially equal qualifications, skill, effort and responsibility,
under similar conditions, should be paid similar salaries. (citations omitted)
Congress retains its wide discretion in providing for a valid

classification, and its policies should be accorded recognition and
respect by the94
courts of justice except when they run afoul of the
Constitution. The deference stops where the classification violates
a fundamental right, or prejudices persons
_______________
94 See Association of Small Landowners in the Philippines, Inc. v. Secretary of

Agrarian Reform, G.R. Nos. 78742, 79310, 79744, and 79777, 175 SCRA 343 (July
14, 1989).
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accorded special protection by the Constitution. When these

violations arise, this Court must discharge its primary role as the
vanguard of constitutional guaranties, and require a stricter and
more exacting adherence to constitutional limitations. Rational basis
should not suffice.
Admittedly, the view that prejudice to persons accorded special
protection by the Constitution requires a stricter judicial scrutiny
finds no support in American or English jurisprudence.
Nevertheless, these foreign decisions and authorities are not per se
controlling in this jurisdiction. At best, they are
95
persuasive and have
been used to support many of our decisions. We should not place
undue and fawning reliance upon them and regard them as
indispensable mental crutches without which we cannot come to our

own decisions through the employment of our own endowments. We
live in a different ambience and must decide our own problems in
the light of our own interests and needs, and of our qualities and
even idiosyncrasies
96
as a people, and always with our own concept of
law and justice. Our laws must be construed in accordance with the
intention of our own lawmakers and such intent may be deduced
from the language of each law and the context of other local
legislation related thereto. More importantly, they must be construed
to serve our own public interest which is the be-all and the end-all of
all our laws. And it need not be 97stressed that our public interest is
distinct and different from others.
In the 2003 case of Francisco v. House of Representatives, this
Court has stated that: “[A]merican jurisprudence and authorities,
much less the American Constitution, are of dubious application for
these are no longer controlling within
_______________
95 Republic v. MERALCO, G.R. Nos. 141314 and 141369, 401 SCRA 130 (April
9, 2003).
96 Sanders v. Veridiano II, No. L-46930, 162 SCRA 88 (June 10, 1988).
97 Republic v. MERALCO, G.R. Nos. 141314 and 141369, 401 SCRA 130 (April
9, 2003).
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Pilipinas
our jurisdiction and have only limited persuasive merit insofar as

Philippine constitutional law is concerned....[I]n resolving
constitutional disputes, [this Court] should not be beguiled by
foreign jurisprudence some of which are hardly applicable because
they have
98
been dictated by different constitutional settings and
needs.” Indeed, although the Philippine Constitution can trace its
origins to that of the99 United States, their paths of development have
long since diverged.
Further, the quest for a better and more “equal” world calls for
the use of equal protection as a tool of effective judicial intervention.
Equality is one ideal which cries out for bold attention and action in the
Constitution. The Preamble proclaims “equality” as an ideal precisely in
protest against crushing inequities in Philippine society. The command to
promote social justice in Article II, Section 10, in “all phases of national
development,” further explicated in Article XIII, are clear commands to the
State to take affirmative action in the direction of greater equality . . .
[T]here is thus in the Philippine Constitution no lack of doctrinal support for

a more 100vigorous state effort towards achieving a reasonable measure of
equality.
Our present Constitution has gone further in guaranteeing vital

social and economic
101
rights to marginalized groups of society,
including labor. Under the policy of social justice, the law bends
over backward to accommodate the interests of the working class on
the humane justification
102
that those with less privilege in life should
have more in law. And the obli-
_______________
98 Francisco, Jr. v. House of Representatives, G.R. No. 160261, 415 SCRA 44

(November 10, 2003).
99 Id.
100 JOAQUIN G. BERNAS, S.J., THE CONSTITUTION OF THE REPUBLIC OF
THE PHILIPPINES 160 (2003).
101 Globe-Mackay Cable and Radio Corp. v. National Labor Relations
Commission, G.R. No. 82511, 206 SCRA 701 (March 3, 1992).
102 Uy v. Commission on Audit, G.R. No. 130685, 328 SCRA 607 (March 21,
2000).
389
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gation to afford protection to labor is incumbent not only on the

legislative and executive branches but103 also on the judiciary to
translate this pledge into a living reality. Social justice calls for the
humanization of laws and the equalization of social and economic
forces by the State so that justice in its rational104
and objectively
secular conception may at least be approximated.
V. A Final Word
Finally, concerns have been raised as to the propriety of a ruling

voiding the challenged provision. It has been proffered that the
remedy of petitioner is not with this Court, but with Congress, which
alone has the power to erase any inequity perpetrated by R.A. No.
7653. Indeed, a bill proposing the exemption of the BSP rank-and-
file from the SSL has supposedly been filed.
Under most circumstances, the Court will exercise judicial
restraint in deciding questions of constitutionality, recognizing the
broad discretion given to Congress in exercising its legislative
power. Judicial scrutiny would be based on the “rational basis” test,

105
and the legislative discretion would be given deferential treatment.
_______________
103 Ibid.
104 Calalang vs. Williams, No. 47800, 70 Phil. 726 (December 2, 1940).
105 See Dumlao v. Commission on Elections, No. L-52245, 95 SCRA 392, 404
(January 22, 1980); Peralta v. Commission on Elec-tions, Nos. L-47771, L-47803, L-
47816, L-47767, L-47791, and L-47827, 82 SCRA 30 (March 11, 1978); Felwa v.
Salas, No. L-26511, 18 SCRA 606 (October 29, 1966); Rafael v. Embroidery and
Apparel Control and Inspection Board, No. L-19978, 21 SCRA 336, (September 29,
1967); People v. Carlos, No. L-239, 78 Phil. 535 (June 30, 1947); and Ichong v.
Hernandez, No. L-7995, 101 Phil. 1155 (May 31, 1957).
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Pilipinas
But if the challenge to the statute is premised on the denial of a

fundamental right, or the perpetuation of prejudice against persons
favored by the Constitution with special protection, judicial scrutiny
ought to be more strict. A weak and watered down view would call
for the abdication of this Court’s solemn duty to strike down any law
repugnant to the Constitution and the rights it enshrines. This is true
whether the actor committing the unconstitutional act is a private
person or the government itself or one of its instrumentalities.
Oppressive acts will106
be struck down regardless of the character or
nature of the actor.
Accordingly, when the grant of power is qualified, conditional or subject to

limitations, the issue on whether or not the prescribed qualifications or
conditions have been met, or the limitations respected, is justiciable or non-
political, the crux of the problem being one of legality or validity of the
contested act, not its wisdom. Otherwise, said qualifications, conditions or
limitations—particularly those prescribed or imposed by the Constitution—
would be set at naught. What is more, the judicial inquiry into such issue
and the settlement thereof are the main functions of courts of justice under
the Presidential form of government adopted in our 1935 Constitution, and
the system of checks and balances, one of its basic predicates. As a
consequence, We have neither the authority nor the discretion to decline
passing upon said issue, but are under the ineluctable obligation—made
particularly more exacting and peremptory by our oath, as members of the
highest Court of the land, to support and defend the Constitution—to settle
it. This explains why, in Miller v. Johnson, it was held that courts have a
“duty, rather than a power”, to determine whether another branch of the
government has “kept within constitutional limits.” Not satisfied with this
postulate, the court went farther and stressed that, if the Constitution
provides how it may be amended—as it is in our 1935 Constitution—“then,
unless the manner is followed, the judiciary as the interpreter of that
constitution, will declare the amendment invalid.” In fact, this very Court—
speaking through Justice Laurel, an outstanding authority on Philippine
Constitutional Law, as well as one of the highly
_______________
106 Belarmino v. Employees’ Compensation Commission, G.R. No. 90204, 185 SCRA 304
(May 11, 1990).
391
VOL. 446, DECEMBER 15, 2004 391

respected and foremost leaders of the Convention that drafted the 1935
Constitution—declared, as early as July 15, 1936, that “(i)n times of social
disquietude or political excitement, the great landmarks of the Constitution
are apt to be forgotten or marred, if not entirely obliterated. In cases of
conflict, the judicial department is the only constitutional organ which can
be called upon to determine the proper allocation
107
of powers between the
several departments” of the government. (citations omitted; emphasis
supplied)
In the case at bar, the challenged proviso operates on the basis of the
salary grade or officer-employee status. It is akin to a distinction
based on economic class and status, with the higher grades as
recipients of a benefit specifically withheld from the lower grades.
Officers of the BSP now receive higher compensation packages that
are competitive with the industry, while the poorer, low-salaried
employees are limited to the rates prescribed by the SSL. The
implications are quite disturbing: BSP rank-and-file employees are
paid the strictly regimented rates of the SSL while employees higher
in rank possessing higher and better education and opportunities for
career advancement—are given higher compensation packages to
entice them to stay. Considering that majority, if not all, the rank-
and-file employees consist of people whose status and rank in life
are less and limited, especially in terms of job marketability, it is
they—and not the officers - who have the real economic and
financial need for the adjustment. This is in accord with the policy
of the Constitution “to free the people from poverty, provide
adequate social services, extend to them108a decent standard of living,
and improve the quality of life for all.” Any act of Congress that
runs counter to this constitutional desideratum deserves strict
scrutiny by this Court before it can pass muster.
To be sure, the BSP rank-and-file employees merit greater

concern from this Court. They represent the more impotent
_______________
107 Javellana v. The Executive Secretary, No. L-36142, L-36164, L-36165, L-

36236 and L-36283, 50 SCRA 30 (March 31, 1973).
108 1987 Constitution, Article II, Section 9.
392

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rank-and-file government employees who, unlike employees in the

private sector, have no specific right to organize as a collective
bargaining unit and negotiate for better terms and conditions of
employment, nor the power to hold a strike to protest unfair labor
practices. Not only are they impotent as a labor unit, but their
efficacy to lobby in Congress is almost nil as R.A. No. 7653
effectively isolated them from the other GFI rank-and-file in
compensation. These BSP rank-and-file employees represent the
politically powerless and they should not be compelled to seek a
political solution to their unequal and iniquitous treatment. Indeed,
they have waited for many years for the legislature to act. They
cannot be asked to wait some more for discrimination cannot be
given any waiting time. Unless the equal protection clause of the
Constitution is a mere platitude, it is the Court’s duty to save them
from reasonless discrimination.
IN VIEW WHEREOF, we hold that the continued operation and
implementation of the last proviso of Section 15(c), Article II of
Republic Act No. 7653 is unconstitutional.
Davide, Jr. (C.J.), Quisumbing, Ynares-Santiago, Sandoval-

Gutierrez, Austria-Martinez, Azcuna, Tinga and Chico-Nazario, JJ.,
concur.
Panganiban and Carpio, JJ., See Dissenting Opinion.
Corona and Callejo, Sr., JJ., On Leave.
Carpio-Morales, J., Pls. see my dissenting opinion.
Garcia, J., Concur with dissenting opinion of J. Carpio.
DISSENTING OPINION
PANGANIBAN, J.:
With all due respect, I dissent. I believe that it would be uncalled for,
untimely and imprudent for this Court to void the last proviso of the
second paragraph of Section 15(c) of
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Chapter 1 of Article II of Republic Act (RA) 7653. In the first place,

the assailed provision is not unconstitutional, either on its face or as
applied, and the theory of relative constitutionality finds no
application to the case at bar. In the second place, a becoming
respect on the part of this Court for Congress as a coequal and
coordinate branch of government dictates that Congress should be
given ample opportunity to study the situation, weigh its options and
exercise its constitutional prerogative to enact whatever legislation it
may deem appropriate to address the alleged inequity pointed out by
petitioner.
For the record, I am not against the exemption from the Salary
Standardization Law of the Bangko Sentral ng Pilipinas (BSP) rank
and file employees (with Salary Grade 19 and below). Neither am I
against increases in their pay. I simply submit that (1) the factual
milieu of this case does not show a denial of equal protection, (2) the
theory of relative constitutionality does not come into play, and (3)
petitioner should have addressed its plaint, not to this Court, but to
Congress in the first instance. I am confident that given sufficient
opportunity, the legislature will perform its constitutional duty
accordingly. Hence, there is no need or warrant for this Court to
intervene in legislative work.
Theory of Relative Constitutionality

Not Applicable to Extraneous Circumstances
The ponencia advocates the application of the theory of relative

constitutionality to the present case. The theory says that a statute
valid at one time may become unconstitutional at another, because
of altered circumstances or changed conditions that make the
practical operation of such a statute arbitrary or confiscatory. Thus,
the provisions of that statute, which may be valid as applied to one
set of facts but invalid as applied to another, cannot be merely
compared with those applicable under the Constitution.
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Pilipinas
From the manner in which it has been utilized in American and

Philippine jurisprudence, however, this novel theory finds relevance
only when the factual situation covered by an assailed law changes,
not when another law is passed pertaining to subjects not directly
covered by the former. Thus, the theory applies only when
circumstances that were specifically addressed upon the passage of
the law change. It does not apply to changes or alterations
extraneous to those specifically addressed. To prove my point, allow
1
me then to tackle seriatim the cases relied upon in the ponencia.
Cited American Cases Not Applicable to and Not in Pari Materia

with Present Facts
2
Medill. The constitutionality issue in Medill v. State was raised by a
bankruptcy trustee in regard to a statute exempting damages that
were awarded to the 3
claimants who suffered as a result of an
automobile accident. Specifically, the contested provision exempted
from “attachment, garnishment, or sale on any final process issued
from any court” (1) general damages and (2) future special damages
awarded in rights of action filed for
4
injuries that were caused to the
person of a debtor or of a relative.
The Supreme Court of Minnesota said that the general damages
portion of the right of action filed by claimants for personal injuries
sustained in fact represented the monetary restoration of the
physically and mentally damaged person; hence, claims for such
damages could never 5
constitute unreasonable amounts for
exemption purposes. Such claims were
_______________
1 See ponencia, footnote nos. 24, 25, 26, 27 and 28.

2 Medill v. State, 477 NW 2d 703, November 22, 1991.
3 Id., p. 704.
4 Ibid.
5 Id., pp. 706-707.
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thus fully exempt. It added that the legislature had assigned the role
of determining 6 the amounts that were reasonable to the state’s
judicial process.
While a statute may be constitutional and valid as applied to one

set of facts and invalid in its application to another, the said Court7
limited its discussion only to the set of facts as presented
8
before it
and held that the statute was “not unconstitutional.” Distinguishing9
the facts of that case from those found in its earlier rulings, it
concluded that—by limiting
10
the assets that were available for
distribution to creditors —the contested provision therein
11
was a
bankruptcy relief for protecting not only human capital, but also the
debtor’s fundamental
12
needs.
Cook. The bankruptcy trustee in In re Cook also objected to the
same statutory exemption, inter alia, asserted by the debtors in
another personal injury claim.
The US Bankruptcy Court, following Medill, held that such 13
exemption was “violative of x x x the Minnesota
14
Constitution,” as
applied to pre-petition
15
special damages, but not as applied to
general damages. The statute did not provide for any limitation on
the amount of exemption as to the former
_______________
6 Id., pp. 705-708.

7 Id., p. 708.
8 Id., p. 709, per Yetka, J.
9 These rulings were on fraternal benefit and homestead exemptions. Id., p. 708.
10 Ibid.
11 Ibid.
12 In re Cook, 138 BR 943, April 15, 1992.
13 Id., p. 946, per Kressel, C.J.
14 These are damages accruing at the time a petition is filed and include existing
medical costs; actual lost income; existing non-medical costs and expenses; and
property lost, damaged or destroyed in the incident that caused the injury. Id., p. 945.
15 These damages include temporary or permanent physical and mental loss or
impairment; pain or suffering; and future medical costs. Id., pp. 945-946.
396

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16
type of damages. Neither did it set any 17
objective criteria by which
the bankruptcy18
court may limit its size.
Nashville. The plaintiff in Nashville v. Walters questioned the
constitutionality of a Tennessee statute imposing upon railroad
companies one half of the total cost of grade separation in every
instance that the state’s Highway Commission issued an order for
the elimination of a grade crossing. The plaintiff rested its
contention not on the exercise of police power that promoted the
safety of travel, but on the arbitrariness and unreasonableness of the

19
imposition that deprived it of property without due process of law.
Reversing the judgment that the Supreme Court of Tennessee had
rendered against the plaintiff, the US Supreme
20
Court however did
not declare the statute unconstitutional. Instead, it remanded the
case, because the determination of facts showing arbitrariness and
unreasonableness should21have been made by the Tennessee Supreme
Court in the first place. It enumerated the revolutionary changes
incident to transportation wrought in the 1930s by the widespread
introduction of motor vehicles; the assumption by the federal
government of the functions of a road builder; the resulting
depletion of rail revenues; the change in the character, construction
and use of highways; the change in the occasion for the elimination
of grade crossings, and in the purpose and beneficiaries of such
elimination; and the change in the relative
_______________
16 As to general damages, however, reliance was made upon Medill, Id., p. 946.
17 In fact, in Medill it was held that because special damages reimbursed an
individual for expenses that would ordinarily be discharged in a bankruptcy
proceeding, their exemption would be a windfall to the debtor. Medill v. State; supra,
p. 706.
18 Nashville, Chattanooga, & St. Louis Railway v. Walters, 294 US 405, 415, 79
L.ed. 949, 955, March 4, 1935.
19 Id., p. 413.
20 Id., p. 434.
21 Id., p. 433.
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22
responsibility of railroads and vehicles moving on the highways. In
addition, it held that the promotion of public convenience did not
justify requiring a railroad company—any more than others—to
spend money, unless it was shown that 23
the duty to provide such
convenience rested upon that company. Providing an underpass at
one’s own expense for private convenience,24 and not primarily as a
safety measure,
25
was a denial of due process.
Atlantic. In Atlantic v. Ivey, the plaintiff filed an action for
damages against the railroad company for the killing of a cow on an
unfenced right of way of the railway. The defendant pointed out that
the original Florida Act of 1889 and its later amendments in the
1940s had required railroad companies to fence their tracks for the
protection and safety of the traveling public and their property
against livestock roaming at large. Thus, the defendant averred that

—without imposing a similar fencing requirement on the owners of
automobiles, trucks and buses that carry passengers upon unfenced
public highways of the state where such vehicles operated—the
equal protection guarantees
26
of the state and federal constitutions
would be violated.
Reversing the lower court’s judgment for the plaintiff, the
Supreme Court of Florida held that the application of the contested
statutes under then27
existing conditions was violative of the equal
protection clause. Citing Nashville, that Court took judicial notice
of the fact that there were no motor carriers on public roads when
the statutes were originally enacted. It also reasoned that the statutes
were enacted in
_______________
22 Id., pp. 415-416.

23 Id., pp. 428-429.
24 Id., p. 429.
25 Atlantic Coast Line R. Co. v. Ivey, 5 So.2d, 244, 247, January 8, 1942.
26 Id., pp. 245-246.
27 Id., p. 247.
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28
the exercise of the state’s police power and were intended for the
protection of everyone against accidents involving public
transportation. Although motor-driven vehicles and railroad carriers
were under a similar obligation to protect everyone against accidents
to life and property when conducting their respective businesses, the
hazard of accidents by reason of cattle straying onto the line of
traffic of motor-driven vehicles was greater than that which 29arose
when cattle strayed onto the line of traffic of railroad carriers. Yet
the burden of expenses and penalties that were rendered in favor of
individuals who were neither
30
shippers nor passengers was imposed
only on railroad carriers.
In addition, the railroad carriers would be held liable for
attorney’s fees and double the value of the animals killed in their
railways, without even requiring the plaintiffs who had sued them to31
prove the negligence of such carriers in operating their equipment.
Although it was argued that motordriven vehicles had no authority
to fence on state and county highways over which they operated, the
legislature could nevertheless authorize and require them to provide
similar protection; or, in default thereof, to suffer similar penalties
that were incidental to32using such public roads for generating profit
and serving the33
public.
Louisville. The plaintiff in Louisville v. Faulkner also filed an
action against defendant-railroad company to recover the value of
her mule that had strayed from 34
her premises and got struck and
killed by the company’s train. The judgment of the lower court for
the plaintiff was based on the fact that the
_______________
28 Id., p. 246.
29 Ibid.
30 Id., p. 247.
31 Ibid.
32 Ibid.
33 Louisville & Nashville Railroad Co. v. Faulkner, 307 SW 2d. 196, November
15, 1957.
34 Id., pp. 196-197.
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defendant did not offer any evidence to rebut the prima 35facie
presumption of the latter’s negligence under Kentucky statutes.
The Court of Appeals of Kentucky held the contested 36
provision
unconstitutional and reversed the said judgment. Citing both
Nashville and Atlantic, the appellate court said that because such
legislation applied to all similar corporations and was aimed at the
safety of all persons on a train and the protection of their property, it
was sustained from its inception in 1893; however, under changed
conditions, it could no longer be so. The court recognized the fact
that, in the 1950s, the inauguration and development of
transportation by motor vehicles on public highways created even
greater risks, not only
37
to the occupants of such vehicles but also to
domestic animals. Yet, the operators of these vehicles were not
subjected to the same extraordinary legal responsibility of proving
that for the killing of those animals on public roads, they were free
from negligence, unlike railroad companies
38
that struck and killed
such animals39
on private rights of way.
Vernon. The plaintiff in Vernon v. City of Mount Vernon sought
to declare unconstitutional a city zoning ordinance which had
limited the business use of its realty, locally known as the “Plaza,”
40
only to the parking of automobiles and its incidental services.
The Court of 41Appeals of New York ruled that the ordinance was
unconstitutional. That ruling also affirmed the unanimous judgment
earlier rendered in favor of the plaintiff. Again citing Nashville, the

New York court ruled in the main
_______________
35 Id., p. 197.
36 Id., p. 198.
37 Id., pp. 197-198.
38 Id., p. 197.
39 Vernon Park Realty, Inc. v. City of Mount Vernon, 121 N.E.2d 517, 307 NY 493,
July 14, 1954.
40 Id., p. 518.
41 Id., pp. 520-521.
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that, no matter how compelling and acute the community traffic

problem might be as to reach a strangulation point, the solution did
not lie in placing an undue and uncompensated burden on 42a
landowner in the guise of a regulation issued for a public purpose.
Although for a long time the plaintiff’s land had already been
devoted to parking, the ordinance that prohibited any43 other use for it
was not “a reasonable exercise of the police power.”
While the city’s common council had the right to pass ordinances
respecting the use of property according to well-considered and
comprehensive plans designed to promote public health, safety and
general welfare, the exercise of such right was still subject to the
constitutional limitation that it may not be exerted arbitrarily or
unreasonably. Thus, the zoning ordinance could not preclude the use44
of property for any purpose for which it was reasonably adapted.
Although valid when adopted in 1927, the ordinance was stricken
down, because its operation under changed conditions in the 1950s
proved confiscatory, especially when the value of the greater part of
the land—to be used, for instance, 45
in the erection of a retail
shopping center—was destroyed. 46
Finally, Murphy v. Edmonds. An automobile driver and her
husband brought action against a tractor-trailer driver and his
employer and sought damages for the severe injuries she had
sustained in a collision. Raised in issue mainly was the
constitutionality of the47statutory cap on noneconomic damages in
personal injury actions.
Affirming the judgment of the Court of Special Appeals rejecting
all challenges to the validity of the law, the Court of
_______________
42 Id., p. 519.
43 Ibid., per Dye, J.
44 Ibid.
45 Id., pp. 518-519.
46 Murphy v. Edmonds, 601 A.2d 102, 325 Md. 342, February 7, 1992.
47 Id., p. 104.
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Appeals of Maryland held that there was no irrationality,

arbitrariness, or violation of equal protection in the legislative
classification drawn between (1) the less seriously injured tort
claimants whose noneconomic damages were less than the statutory
cap; and (2) the more seriously injured tort claimants whose
noneconomic48damages were greater than, and thus subject to, the
statutory cap. Although no express equal protection clause could be
found in Maryland’s Constitution, the due process clause therein
nevertheless embodied equal protection 49
to the same extent as 50that
found in the Fourteenth Amendment of the federal Constitution.
Indeed, the right to recover full damages for a noneconomic
injury was recognized by common law even before the adoption of
the state’s Constitution, but the said court declared that51there was no
vested interest in any rule ordained by common law. Concluding
that only the traditional “rational basis test” should be used, the
appellate court also rejected the lower court’s view of the right to
press a claim for pain and suffering as an “important right” requiring
52
a “heightened scrutiny test” of the legislative classification. Under
the “rational basis test,” such legislative classification enjoyed a
strong presumption of constitutionality and, 53
not being clearly
arbitrary, could not therefore be invalidated.
Moreover, the law was an economic response to a legislatively
perceived crisis concerning not only the54
availability, but also the cost
of liability insurance in the state. Putting a statutory cap on
noneconomic damages was “reasonably re-
_______________
48 Id., pp. 105-106, 116 & 119.

49 This amendment to the U.S. Constitution provides that “[n]o State shall x x x
deny to any person within its jurisdiction the equal protection of the laws.”
50 Murphy v. Edmonds; supra, p. 107.
51 Id., pp. 105 & 112.
52 Id., pp. 105-106.

53 Id., p. 108.
54 Id., pp. 111 & 114.
402

Pilipinas
55
lated to a legitimate legislative objective,” for it led to a greater
ease in the calculation of insurance premiums, thus making the
market more attractive to insurers. Also, it ultimately reduced the
cost of such premiums and made insurance more affordable to
individuals
56
and organizations that perform needed medical
services.
From the foregoing discussion, it is immediately evident that not
one of the above-cited cases is either applicable to or in pari materia
with the present case.
Medill not only upheld the constitutionality of the contested
provision therein, but also categorically stated that the peculiar facts
of the case prompted such declaration. General damages were
declared exempt; the law allowing their exemption was
constitutional. Cook simply affirmed Medill when the same
contested provision was applied to an issue similar to that which was
raised in the latter case, but then declared that provision
unconstitutional when applied to another issue. Thus, while general
damages were also declared exempt, the claims for special damages
filed prior to the filing of a petition for relief were not, and the law
allowing the latter’s exemption was unconstitutional.
The court’s action was to be expected, because the issue on
special damages in Cook was not at all raised in Medill, and there
was no precedent on the matter in Minnesota, other57 than the obiter
dictum—if it can be called one—in the latter case. Had that issue
been raised in Medill, a similar conclusion would inevitably have
been reached. In fact, that case already stated that while the court
“need not decide whether special damages incurred prior to58
judgment x x x [were] to be exempt in order to decide the question”
on general damages
_______________
55 Id., p. 115, per Eldridge, J.

56 Ibid.
57 In re Cook; supra, p. 945 (citing Medill v. State; supra, p. 708).
58 Medill v. State, supra, p. 708.
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raised therein, it felt that exempting special damages appeared

reasonable and59
likely to be applied, following an earlier ruling in
another case.
Moreover, the facts of both Medill and Cook are not at all akin to
so-called “changed conditions” prompting the declarations of
constitutionality in the former and unconstitutionality in the latter.
Such “altered circumstances” or “changed conditions” in these two
cases refer to the non-exemption of special damages—a subject
matter distinct and separable, although covered by the same assailed
statute. In fact, Cook precisely emphasized that “where a statute is
not inherently unconstitutional, it may be found constitutional as
applied to some separable
60
subject matters, and unconstitutional as
applied to others.” In other words, it was the application of the
contested provision therein to an entirely different and separable
subject matter—not the contested provision itself—that was
declared unconstitutional, but the statute itself was not inherently
unconstitutional to begin with.
Equally important, Nashville skirted the issue on
constitutionality. The “changed conditions” referred to in that case,
as well as in Atlantic and Louisville, were the revolutionary changes
in the mode of transportation that were specifically covered by the
statutes respectively imposing additional costs upon railroad
companies only, requiring the fencing of their tracks, or solely
compelling them to present evidence to rebut the presumption of
their negligence. In Vernon, these “changed conditions” were
deemed to be the economic changes in the 1950s, through which the
normal business use of the land was unduly limited by the zoning
ordinance that was intended to address the acute traffic problem in
the community.
_______________
59 This refers to In re Bailey decided in 1988 in the state of Minnesota. Id., pp.
705-706 and 708.
60 In re Cook; supra, pp. 944-945.
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Nashville simply took judicial notice of the change in conditions

which, together with the continued imposition of statutory charges
and fees, caused deprivation of property without due process of law.
Atlantic, Louisville and Vernon all relied upon Nashville, but then
went further by rendering their respective contested provisions
unconstitutional, because—in the application of such provisions
under “changed conditions”—those similarly situated were no
longer treated alike.
Finally, Murphy—obviously misplaced because it made no
reference at all to the quoted sentence in the ponencia—even upheld
the validity of its contested provision. There was no trace, either, of
any “changed conditions.” If at all, the legislative classification
therein was declared constitutional, because it was in fact a valid
economic response to a legislatively perceived crisis concerning the
availability and cost of liability insurance.
In the present case, no “altered circumstances” or “changed
conditions” in the application of the assailed provision can be found.
It verily pertains to only one subject matter, not separable subject
matters as earlier pointed out in both Medill and Cook. Hence, its
application remains and will remain consistent. Not inherently
unconstitutional to begin with, it cannot now be declared
unconstitutional. Moreover, herein petitioner miserably fails to
demonstrate—unlike in Nashville, Atlantic, Louisville, and Vernon—
how those similarly situated have not been treated alike in the
application of the assailed provision.
Ponencia’s Reference to
“Changed Conditions” Misplaced
From Nashville to Murphy, it can be seen that all the contested
statutes were passed in the exercise of police power—the inherent
power of the State to regulate
61
liberty and property for the promotion
of the general welfare. The police
_______________
61 Cruz, Constitutional Law (2003 ed.), p. 37.
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measure may be struck down when an activity or property that ought

to be regulated does not affect the public welfare; or when the means
employed are not reasonably necessary for the accomplishment of
the statute’s purpose, and they become unduly oppressive upon
62
62
individuals. As Justice Brandeis stresses 63
in Nashville, “it may not
be exerted arbitrarily or unreasonably.”
In the case before us today, the assailed provision can be
considered a police measure that regulates the income of BSP
employees. Indisputably, the regulation of such income affects the
public welfare, because it concerns not only these employees, but
also the public in general—from whose various credits the banks
earn their income, the CB generates its revenues, and eventually
these employees get their salaries and other emoluments.
Additionally, with the passage of RAs 6758 and 7653, the means
employed by the State to accomplish its objectives are not unduly
oppressive. They are in fact reasonably necessary, not only to attract
the best and brightest bank regulatory personnel, but also to
establish professionalism and excellence within the BSP in
accordance with sound principles of management. Nothing,
therefore, is arbitrary in the assailed provision; it cannot be stricken
down.
With due respect, the ponencia’s reference to “changed
conditions” is totally misplaced. In the above-cited US cases, this
phrase never referred to subsequent laws or executive
pronouncements, but rather to the facts and circumstances that the
law or ordinance specifically addressed upon its passage or
adoption. A statute that is declared invalid because of a change in
circumstances affecting
64
its validity belongs only to a class of
emergency laws. Being a manifestation of the
_______________
62 Id., p. 49.
63 Nashville, Chattanooga, & St. Louis Railway v. Walters; supra, p. 415.
64 Agpalo, Statutory Construction (2nd ed., 1990), p. 27.
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State’s exercise of its police power, it is valid at the time of its

enactment.
In contrast thereto, RA 7653 cannot be regarded as an emergency
measure that is merely temporary in operation. It is not even a
statute limited to the exigency that brought it about. The facts and
circumstances it specifically addressed upon its passage have not
been shown to have changed at all. Hence, the assailed provision of
such a declaratory statute cannot be invalidated.
Unlike congested traffic or motor-driven vehicles on public
roads, the payment of salaries at differing scales in various GFIs vis-
à-vis in the BSP, is not such a change in conditions as would cause

deprivation of property without due process of law. Petitioner’s
members have not been deprived of their right to income as
mandated by law. They have not received less than what they were
entitled to ever since RA 7653 was passed eleven years ago.
To repeat, the factual situation that the assailed provision
specifically addressed upon passage of this law has not changed.
The same substantive rights to a competitive and structured
human resource development program existing then still exist
now. Only the laws external to and not amendatory of this law
did. Even if these new laws were to be considered as “changed
conditions,” those who have been affected in the BSP (as will be
shown later) are not at all similarly situated as those in the GFIs
to compel their like treatment in application.
In addition, the rulings in all 65the above-cited American cases—
although entitled 66to great weight —are merely of persuasive effect
in our jurisdiction and cannot be stare
_______________
65 Id., p. 78.
66 “In interpreting and applying the bulk of the written laws of this jurisdiction,
and in rendering its decisions in cases not covered by the letter of the written law, this
court relies upon the theories and
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67 68
decisis. These are not direct rulings of 69
our Supreme Court that
form part of the Philippine legal system.
Granting gratia argumenti that the cited cases are to be
considered binding precedents in our jurisdiction, Nashville—the
only one federal in character—does not even make a categorical
declaration on constitutionality. Furthermore, Murphy maintains that
“[s]imply because a legal principle is part of the common law x x x
does not70give it any greater degree of insulation from legislative
change.” Common law, after all, is “a growing 71
and ever-changing
system of legal principles and theories x x x.” 72
Every statute is presumed constitutional. This axiom reflects the
respect that must be accorded to the wisdom, integrity and
patriotism of73 the legislature that passed it and to the executive who
approved it. Understandably, 74
therefore, the judiciary should be
reluctant to invalidate laws. Medill pre-
_______________
precedents of Anglo-American cases, subject to the limited exception of those

instances where the remnants of the Spanish written law present well-defined civil law
theories and of the few cases where such precedents are inconsistent with local
customs and institutions.” In re Shoop, 41 Phil. 213, 254-255, November 29, 1920,
per Malcolm, J.
67 “Stare decisis” means one should follow past precedents and should not disturb
what has been settled. See Agpalo, supra, p. 92.
68 To be controlling, the ruling must be categorically rendered by our Supreme
Court on an issue expressly raised by the parties. Ibid.
69 Article 8 of the Civil Code.
70 Murphy v. Edmonds; supra, p. 112, per Eldridge, J.
71 In re Shoop; supra, pp. 220-221, per Malcolm, J.
While it may be argued that we are not a common law country, our peculiar national legal
system has blended both civil and common law principles. Gamboa, An Introduction to
Philippine Law, 7th ed., 1969 p. 59.
72 Salas v. Jarencio, 150-B Phil. 670, 690; 46 SCRA 734, August 30, 1972.
73 Agpalo, supra, p. 20.
74 In re Cook; supra, p. 944.
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cisely emphasizes that the “court’s power to declare a statute

unconstitutional should be exercised
75
with extreme caution and only
when absolutely necessary.” Although that case continues by
saying that unless it is inherently unconstitutional, a law “must stand
or fall x x x not upon assumptions” the court may make, the
ponencia is still dauntless in relying thereon to support its
arguments.
Rutter Does Not Even Apply

Again 76with due respect, the ponencia’s citation of a local case,
Rutter, is also inappropriate. In the said case, appellant instituted an
action to recover the balance, and interest thereon, of a contract of
sale entered into barely
77
four months prior to the outbreak of the78
Second World War. The lower court, 79
however, rendered judgment
for appellee80who set up as defense the moratorium clause embodied
in RA 342. The lower court reasoned further that the obligation 81
sought to be enforced was not yet demandable under 82
that law.
Reversing
83
the judgment, this Court invalidated the moratorium
clause, not because the law was unconstitutional, but because both
its continued operation and enforcement had become unreasonable
and oppressive under postwar circumstances of observable
reconstruction, rehabilitation and re-
_______________
75 Medill v. State; supra, p. 704.

76 Rutter v. Esteban, 93 Phil. 68, May 18, 1953.
77 Rutter v. Esteban; supra, p. 70.
78 Id., p. 71.
79 Id., p. 70.
80 Approved by Congress on July 26, 1948.
81 Rutter v. Esteban; supra, p. 71.
82 Id., p. 83.
Moreover, Executive Order Nos. 25 and 32, issued on November 18, 1944 and March 10, 1945,
were respectively voided. §1 of RA 342, 45 OG No. 4, p. 1680.
83 §2 of RA 342, 45 OG No. 4, p. 1681.
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84
covery of the country’s general financial condition. The forced
vigil suffered by prewar creditors was not only unwittingly extended
from eight to twelve years, but was also imposed without providing
85
for the payment of the corresponding interest in the interim.
Thus, the success of their collection efforts, especially
86
when their
credits were unsecured, was extremely remote. Moreover, the
settlement of claims filed with the United States-Philippine War
Damage Commission was not only uncertain but was also
practically futile, for it depended entirely on the appropriations to be
made by the US Congress.
The contested clause in Rutter was definitely a remedial measure
passed to accord prewar debtors who suffered the ravages of war an
opportunity to rehabilitate themselves within a reasonable time and
to pay their prewar debts thereafter, thus preventing them from being
victimized in the interim by their prewar creditors. The purpose
having been achieved during the eight-year period, there was
therefore no more reason for the law. Cessante ratione legis cessat et
ipsa lex. When the reason for the law ceases, the law itself ceases.
But it does not become unconstitutional.
The altered circumstances or changed conditions in Rutter were
specifically the very circumstances that the law addressed at its
passage; they were not at all extraneous circumstances like
subsequent laws or executive pronouncements. The eight-year
moratorium period having lapsed, the debtors’ concerns had been
adequately addressed. It was now the turn of the creditors to be
protected for the pre-war loans they granted.
In stark contrast, the contested proviso in the instant case is not a

remedial measure. It is not subject to a period
_______________
84 Rutter v. Esteban; supra, pp. 81-82.

85 Id., p. 77.
86 Ibid.
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within which a right of action or a remedy is suspended. Since the

reason for the law still subsists, the law itself including the
challenged proviso must continue in existence and operation.
Relative Constitutionality
Not Based on Positive Law
Applying the concept of relative constitutionality strongly advocated
in the ponencia, therefore, not only goes beyond the parameters of
traditional constitutionalism,
87
but also finds no express basis in
positive law. While it has been asserted that “a statute valid when
enacted may
88
become invalid by change in conditions to which it is
applied,” the present case has shown no such change in conditions
that would warrant the invalidation of the assailed provision if
applied under such conditions. Hence, no semblance of
constitutional impuissance, other than its conjured possibility, can be
seen. In a constitutional order that commands respect for coequal
branches of government, speculation by the judiciary becomes
incendiary and deserves no respectable place in our judicial
chronicles.
The ponencia further contends that the principles of international
law can operate to render a valid law unconstitutional. The generally
accepted definition states that international law is a body of legal
rules that apply between sovereign states and such other entities as
have been granted in-
_______________
87 “Conventions and laws are x x x needed to join rights to duties and refer justice
to its object. x x x In the state of society all rights are fixed by law x x x.” Rousseau,
The Social Contract, 1762, translated by G.D.H. Cole.
http://www.constitution.org/jjr/socon.htm (Last visited September 16, 2004; 12:04:50
p.m. PST).
88 Atlantic Coast Line R. Co. v. Ivey; supra, per Buford, J. (citing Nashville,
Chattanooga, & St. Louis Railway v. Walters; supra, per Brandeis, J.)
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89
ternational personality. Government employees at the BSP with
salary grades 19 and below are not such entities vested with
international personality; any possible discrimination as to them, in
the light of the principles and application of international law would
be too far-fetched.
The dangerous consequences of the majority’s Decision in the
present case cannot and should not be ignored. Will there now be an
automatic SSL exemption for employees of other GFIs and financial
regulatory agencies? Will such exemption not infringe on Congress’
prerogative? The ponencia overlooks the fact that the Bangko
Sentral is not a GFI, but a regulatory body of GFIs and other
financial/banking institutions. Therefore, it should not be compared
with them. There is no parity. The Bangko Sentral is more akin to the
Insurance Commission, the National Telecommunications
Commission, and the Energy Regulatory Commission. Should not
more appropriate comparisons be made with such regulatory bodies
and their employees?
_______________
89 Cruz, International Law (1990), p. 1; and Salonga and Yap, Public International
Law (1992), p. 1.
International legal subjects—in the modern sense of international law as a process rather than
as a set of rules—refer to states, international organizations, insurgents, peoples represented by
liberation movements, and individuals by virtue of the doctrine of human rights and its implicit
acceptance of their right to call upon states to account before international bodies. Defensor-
Santiago, International Law with Philippine Cases and Materials and ASEAN Instruments
(1999), pp. 15-24.
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Respect for
Coequal Branch
The trust reposed in this Court is “not to formulate policy but to

determine its legality as tested by the Constitution.”90 “It does not
extend to an unwarranted intrusion into that broad and legitimate
sphere of discretion enjoyed by the political branches to determine
the policies to be pursued. This Court should ever be on the alert
lest, without design
91
or intent, it oversteps the boundary of judicial
competence.” Judicial activism should not be allowed to become
judicial exuberance. “As was so well put by Justice Malcolm: ‘Just
as the Supreme Court, as the guardian of constitutional rights,
should not sanction usurpations by any other department of the
government, so should it as strictly confine its own sphere of
influence to the powers92
expressly or by implication conferred on it
by the Organic Act.’ ”
Since Congress itself did not commit any constitutional violation
or gravely abusive conduct when it enacted RA 7653, it should not
be summarily blamed for what the ponencia calls
_______________
90 Peralta v. Commission on Elections, 82 SCRA 30, 77, March 11, 1978, per
concurring and dissenting opinion of Fernando, J. (later CJ.).
“Indeed, whether an enactment is wise or unwise, whether it is based on sound economic

theory, whether it is the best means to achieve the desired results, whether, in short, the
legislative discretion within its prescribed limits should be exercised in a particular manner are
matters for the judgment of the legislature, and the serious conflict of opinions does not suffice
to bring them within the range of judicial cognizance.” Fariñas v. The Executive Secretary,
G.R. No. 147387, December 10, 2003, 417 SCRA 503, per Callejo Sr., J.
91 Id., p. 78, per concurring and dissenting opinion of Fernando, J. (later C.J.;
citing Manila Electric Co. v. Pasay Transportation Co., Inc., 57 Phil. 600, 605,
November 25, 1932, per Malcolm, J.).
92 Ibid., per concurring and dissenting opinion of Fernando, J. (later CJ; citing
Ibid., per Malcolm, J.).
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93
“altered circumstances.” Congress should be given the opportunity
to correct the problem, if any. I repeat, I am not against exemption
from the SSL of Bangko Sentral employees with salary grades 19
and below. Neither am I against increases in their pay. However, it is
Congress, not this Court, that should provide a solution to their
predicament, at least in the first instance.
The remedy against any perceived legislative failure to enact
corrective legislation is a resort, not to this Court, but to the bar of
public opinion. The electorate can refuse to return to Congress

members who, in their view, 94
have been remiss in the discharge of
their constitutional duties. Our Constitution presumes that, absent
any inference of antipathy, improvident legislative decisions 95
“will
eventually be rectified by the democratic processes”; and that
judicial intervention is unwarranted, 96
no matter how unwisely a
political branch may have acted.
It is only the 97legislature, not the courts, that “must be appealed to
for the change.” If, however, Congress decides to act, the choice of
appropriate measure lies within its discretion. Once determined, the
measure chosen cannot be attacked on the ground that it is not the
best solution, or that it
_______________
93 See ponencia.
94 Cruz, Constitutional Law, supra, pp. 46-47.
“For protection against abuses by legislatures the people must resort to the polls, not to the
courts.” Munn v. Illinois; supra, 134, per Waite, CJ.
95 City of Cleburne, Texas v. Cleburne Living Center, 473 US 432, 440, 105 S.Ct.
3249, 3254, July 1, 1985, per White, J.
96 Federal Communications Commission v. Beach Communications, Inc., 508 US
307, 314, 113 S.Ct. 2096, 2101, June 1, 1993 (citing Vance v. Bradley, 440 US 93, 97,
99 S.Ct. 939, 942-943, February 22, 1979).
97 Peik v. Chicago and North-Western Railway Co.; supra, p. 178, per Waite, CJ.
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98
is unwise or inefficacious. A law that advances a legitimate
governmental interest will be sustained, even if it “works to the
disadvantage of99 a particular group, or x x x the rationale for it
seems tenuous.” To compel this Court to make a more decisive but
unnecessary action in advance of what Congress will do is a
downright derogation of the Constitution itself, for it converts the
judiciary into a super-legislature
100
and invests it with a power that to it
has never belonged.
In the words of the great Sir William Blackstone, “there is no
court that has power to defeat the intent of the Legislature, when
couched in such evident and express words, as leave no 101 doubt
whether it was the intent of the Legislature, or no[t].” As
Rousseau further puts it, “according to the fundamental compact,
only the general will can bind the individuals, and there can be no
assurance that a particular will is in conformity with the general
102
102
will, until it has been put to the free vote of the people.” Thus,
instead of this Court invalidating a sovereign act, Congress should
be given the opportunity to enact the appropriate measure to address
the so-called “changed conditions.”
We cannot second-guess the mind of the legislature as the
repository of the sovereign will. For all we know, amidst the fiscal
crisis and financial morass we are experiencing, Congress may
altogether remove 103
the blanket exemption, put a salary cap on the
highest echelons, lower the salary grade
_______________
98 Cruz, Constitutional Law, supra, p. 47.

99 Romer v. Evans, 517 US 620, 632, 116 S.Ct. 1620, 1627, May 20, 1996, per
Kennedy, J.
100 Cruz, Constitutional Law, supra, p. 47.
101 Calder v. Bull; supra, p. 399; p. 8, per seriatim opinion of Iredell, J. (citing 1
Bl. Com. 91).
102 Rousseau, supra.
103 In fact, under §1 of pending House Bill No. 2295, it is proposed that “[a]ll
officials and employees of government owned or controlled corporations and
government financial institutions which, by virtue of their Charters, are exempted
from the Compensation and
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scales subject to SSL exemption, adopt performance-based

compensation structures, or even amend or repeal the SSL itself, but
within the constitutional mandate that “at the earliest possible time,
the Government shall increase the salary scales
104
of x x x officials and
employees of the National Government.” Legislative reforms of
whatever nature or scope may be taken one step at a time,
addressing 105
phases of problems that seem to the legislative mind
most acute. Rightly so, our legislators must have “flexibility and
freedom from judicial
106
oversight in shaping and limiting their
remedial efforts.” Where there are plausible
107
reasons for their
action, the Court’s “inquiry is at an end.”
Under the doctrine of separation of powers and the concomitant
respect for coequal and coordinate branches of government, the
exercise of prudent restraint by this Court would still be best under
the present circumstances.
Not Grossly Discriminatory
There is no question that Congress neither violated the Constitution

nor gravely abused its discretion when it enacted
_______________
Position Classification System [or the SSL] providing for the salary
standardization of government employees shall receive compensation of no more than
twice the salaries of equivalent ranks and positions in other government agencies.”
This proves that Congress can, inter alia, put a statutory limit to the salaries currently
being received by such officials and employees.
104 §18 of Art. XVIII of the 1987 Constitution.
105 Federal Communications Commission v. Beach Communications, Inc.; supra,
p. 316; supra, p. 2102 (citing Williamson v. Lee Optical of Oklahoma, Inc., 348 US
483, 489, 75 S.Ct. 461, 465, March 28, 1955).
106 City of Cleburne, Texas v. Cleburne Living Center; supra, p. 445; supra, p.
3257, per White, J.
pp. 313-314; supra, p. 2101, per Thomas, J. (citing United States Railroad Retirement
Board v. Fritz, 449 US 166, 179, 101 S.Ct. 453, 461, December 9, 1980, per
Rehnquist, J.).
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“The 108
New Central Bank Act” to establish and organize the BSP in
1993. Indeed, RA 7653 is a valid legislative measure. Even the
majority concedes that in enacting that law, Congress was well
within its legislative powers. However, the ponencia argues that the
subsequent enactment of laws granting “blanket exemption” 109
from
the coverage of the SSL of all employees in seven GFIs has 110made
the contested proviso “grossly discriminatory in its operation” and
therefore unconstitutional.
This conclusion, to my mind, is a non sequitur. The mere
possible effect of related or unrelated laws on another law does not
ipso facto make the latter unconstitutional. Besides, as already
discussed, the theory of relative constitutionality is plainly
inapplicable to the present facts. Moreover, the ponencia has
assumed without proof that the BSP rank and file employees are
factually and actually similarly situated as the rank and filers of
Land Bank, SSS, GSIS, etc., and it is clear from the discussion in
Mme. Justice Carpio Morales’ Dissenting Opinion that that is not
really the case. In fact, there exist some substantial differences in
scope of work, job responsibilities and so forth that would negate the
ponencia’s assumption.
_______________
108 This law was approved on June 14, 1993 and published on August 9, 1993. 89
OG 32, p. 4425. See also Villegas, Global Finance Capital and the Philippine
Financial System (2000), p. 48.
109 These GFIs are the LBP and DBP mentioned earlier, as well as the Social
Security System (SSS); the Small Business Guarantee and Finance Corporation
(SBGFC); the Government Service Insurance System (GSIS); the Home Guaranty
Corporation (HGC, formerly the Home Insurance and Guaranty Corporation
[HIGC]); and the Philippine Deposit Insurance Corporation (PDIC). See ponencia.
110 See ponencia.
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No Indicium of Urgency
Other than its bare assertion
111
that the continued implementation of
the assailed 112
provision would cause “irreparable damage and
prejudice” to its members, petitioner also fails to show a minimum
indicium of such extreme urgency as would impel this Court to
second-guess Congress.
Briefly, petitioner contends that (1) the creation of two classes of
employees within113the BSP based on the salary grade corresponding
to their positions
114
is unreasonable, arbitrary and capricious class
legislation; and (2) the law itself discriminates115against rank and
file employees of the BSP vis-à-vis those of GFIs.
These contentions are utterly unsubstantiated. They find no
support in law for granting the relief prayed for.
While it is true that all employees of the BSP are appointed under
the authority of the Monetary Board, observe the same set of office
rules and
116
regulations, and perform their work in practically the same
offices, it is equally true that the levels of difficulty and
responsibility for BSP employees with salary grades 19 and below
are different from those of other BSP
_______________
111 The last proviso of the 2nd paragraph of §15(c) of RA 7653, copied verbatim
including italics, provides:
“Provided, however, That compensation and wage structure of employees whose positions fall
under salary grade 19 and below shall be in accordance with the rates prescribed under
Republic Act No. 6758.”
112 Petition, p. 13; Rollo, p. 15.
113 A “salary grade” under §3.s. of Pres. Decree No. (PD) 985 refers to “the
numerical place on the Salary x x x Schedule representing multiple steps or rates x x x
assigned to a class,” while a “position” under §3.m. means the “ set of duties and
responsibilities, assigned or delegated by competent authority and performed by an
individual either on full-time or part-time basis.”
115 Id., pp. 10 & 12.
116 Id., pp. 4-5 & 6-7.
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employees with salary grades 20 and above. All those classes 117
of
position belonging to the Professional
118
Supervisory Category of the
Position Classification System under RA 6758, for instance, are
obviously not subjected to the same levels of difficulty,
responsibility, and qualification requirements as 119
those belonging to
the Professional Non-Supervisory Category, although to both
categories
120
are assigned positions that include salary grades 19 and
20. To assert, as petitioner does, that the 121
statutory classification is
just an “artifice based on arbitrariness,” without more, is nothing
more than throwing a few jabs at an imaginary foe.
In like manner, petitioner’s denunciation of the proviso for
allegedly discriminating against its members vis-à-vis the rank and
filers of other GFIs ignores the fact that the BSP and the GFIs cited
in the ponencia do not belong to the same category of government
institutions, although it may be said that
122
both are, broadly speaking,
“involved” in banking and finance. While the former performs
primarily governmental
_______________
117 §5(a) of RA 6758.

118 Ibid.
119 §5(b) of RA 6758.
120 A “class of position” is “the basic unit of the Position Classification System”
under §3.c. of PD 985. It “ consists of all those positions in the system which are
sufficiently similar as to (1) kind or subject matter of work, (2) level of difficulty and
responsibility, and (3) the qualification requirements of the work, to warrant similar
treatment in personnel and pay administration.”
A “grade,” on the other hand, under §3.h. thereof, “ includes all classes of
positions which, although different with respect to kind or subject matter of work, are
sufficiently equivalent as to level of difficulty and responsibility and level of
qualification requirements of the work to warrant the inclusion of such classes of
positions within one range of basic compensation.”

122 The BSP, on the one hand, has authority and responsibility over the Philippine
financial system. Aside from credit control, monopoly of currency issues, clearing
functions, and custody and man-
419
VOL. 446, DECEMBER 15, 2004 419

Pilipinas
or regulatory functions, the latter execute purely proprietary ones.

Moreover, the extent of damage or prejudice inflicted upon the
BSP rank and file employees as a result of the proviso is not shown
by any evidence on record. Indeed, neither123 the petitioner nor the
ponencia demonstrate the injuries sustained.
There is no indication whatsoever of the precise nature and
extent of damages caused or to be caused to petitioner’s members by
the continued implementation of such provision. Surely, with no leg
to stand on, the allegation of petitioner that there is great disparity in
compensation, allowances or benefits, cannot be considered to be
stigmatizing
124
and wounding to the psyche of thousands of its
members. In fact, BSP employees, in general, also share the same
tribulations of
_______________
agement of foreign exchange reserves, it also regulates and supervises the entire
banking system. Workers Desk, IBON Databank and Research Center, IBON
Foundation, Inc., The Philippine Banking Sector (2003), pp. 13-14.
The cited GFIs, on the other, perform under special charters purely banking,
finance, or related insurance functions that may include safekeeping, accepting
deposits and drafts, issuing letters of credit, discounting and negotiating notes and
other evidences of indebtedness, lending money against real or personal property,
investing in equities of allied undertakings, insuring bank deposits of insolvent banks,
and extending social security protection to workers or employees and their
beneficiaries. Workers Desk, IBON Databank and Research Center, IBON
Foundation, Inc., The Philippine Banking Sector; supra, pp. 16-17. See also Villegas,
Global Finance Capital and the Philippine Financial System; supra, p. 27; §§2 and 4
of RA 8282, otherwise known as the “Social Security Law of 1997,” which amended
RA 1161; and RA 8291, otherwise known as “The Government Service Insurance
System Act of 1997,” which amended PD No. 1146.
123 For a longer discourse on this point, see the Dissenting Opinion of Carpio-
Morales, J.
124 Consolidated Reply, p. 10; Rollo, p. 105.
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125
workers and employees in other regulatory government offices.
Not even petitioner’s
126
broad and bare claim of “transcendental
importance” can ipso facto generate alacrity on the part of this
Court.
In the United States more than sixty years ago, Justice Brandeis
delineated the famous canons of avoidance under which their
Supreme Court had refrained from passing upon constitutional
questions. One such canon is that the Court must “not anticipate a
question of constitutional law in advance of the necessity of deciding
it x x x. It is not the habit of the Court to decide questions of a
constitutional
127
nature unless absolutely necessary to a decision of the
case.” In addition, the Court must not “pass upon a constitutional
question although properly presented by the record, if there is also
present
128
some other ground upon which the case may be disposed
of.”
Applying to this case the contours of constitutional avoidance
Brandeis brilliantly summarized, this Court may choose to ignore
the constitutional question presented by petitioner, since there is
indeed some other ground upon which this case can be disposed of
—its clear lack of urgency, by reason of which Congress should be
allowed to do its primary task of reviewing and possibly amending
the law.
Taking cognizance of this case and disposing of, or altogether
ignoring, the constitutional question leads us to the same inevitable
conclusion: the assailed provision should 129
not be declared
“unconstitutional, unless it is clearly so.” Whichever path is
chosen by this Court, I am of the firm belief that such provision
cannot and should not be declared unconstitutional. Since the
authority to declare a legal provision void is
_______________
125 See Workers Desk, IBON Databank and Research Center, IBON Foundation,
Inc., The Philippine Banking Sector; supra, p. 59.
127 Ashwander v. Tennessee Valley Authority, 297 US 288, 346-347, 56 S.Ct. 466,
483, February 17, 1936, per Brandeis, J.
128 Id., p. 347; Ibid., per Brandeis, J.
129 Munn v. Illinois; supra, per Waite, CJ.
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VOL. 446, DECEMBER 15, 2004 421

Pilipinas
130
of a “delicate and awful nature,” the Court should 131
“never resort to
that authority, but in a clear and urgent case.” If ever there is
doubt—and clearly there is, as manifested herein by a sharply
divided Court—“the
132
expressed will of the legislature should be
sustained.”
Indeed, this Court is of the unanimous opinion that the assailed
provision was at the outset 133 constitutional; however, with recent
amendments to related laws, the majority now feels that said
provision could no longer pass constitutional muster. To nail my
colors to the mast, such proclivity to declare it immediately
unconstitutional not only imprudently creeps into the legislative
sphere, but also sorely clings to the strands of obscurantism. Future
changes in both legislation and its executive implementation should
certainly not be the benchmark for a preemptive declaration of
unconstitutionality, especially when the said provision is not even
constitutionally infirm to begin with.
Moreover,
134
the congressional enactment into law of pending
bills on the compensation of BSP employees—or even those
_______________
130 Calder v. Bull; supra, p. 399; p. 9, per seriatim opinion of Iredell, J.

131 Ibid.
132 Munn v. Illinois; supra, p. 123.
133 These amendments pertain to the charters of the Land Bank of the Philippines
(LBP) and the Development Bank of the Philippines (DBP).
134 To date, there are two pending bills in the House of Representatives that may
have an impact—direct or indirect—on the assailed provision. These are:
(1) HB 00123 which was filed on July 1, 2004 by Rep. Joey Sarte Salceda,
entitled “An Act Amending Republic Act No. 7653, otherwise known as The
New Central Bank Act,” and pending with the Committee on Banks and
Financial Intermediaries since July 27, 2004; and
(2) HB 02295 which was filed on August 10, 2004 by Rep. Monico O.
Puentebella, entitled “An Act Providing for the Rationalization of Salaries,
Allowances and Benefits of Offi-
422

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related thereto—will certainly affect the assailed provision. This

Court should bide its time, for it has neither the authority nor the
competence to contemplate laws, much less to create or amend

them.
Given the current status of these pending bills, the arguments
raised by petitioner against the assailed provision become all the
more tenuous and amorphous. I feel we should leave that provision
untouched, and instead just accord proper courtesy to our
legislators to determine at the proper time and in the manner they
deem best the appropriate content of any
_______________
cials and Employees of Government Owned or Controlled Corporations and Government

Financial Institutions Exempted from the Compensation and Position Classification System,”
and pending first reading.
There are also other pending bills advocating for similar exemption from the
Salary Standardization Law (SSL). These are:
(1) HB 01926 which was filed on July 29, 2004 by Rep. Robert Ace S. Barbers,
entitled “An Act Granting Exemption to the Public School Teachers from the
Coverage of Republic Act 6758, otherwise known as the Salary
Standardization Law and Authorizing the Appropriation of Funds Therefor,”
and pending with the Committee on Appropriations since August 9, 2004;
(2) HB 01442 which was filed on July 14, 2004 by Rep. Hussin U. Amin,
entitled “An Act Providing for a Separate Compensation Scheme for Lawyer
Positions in the Office of the Secretary of Justice, Department of Justice,
thereby Exempting The Said Positions from Republic Act No. 6758,
otherwise known as the Salary Standardization Law,” and pending with the
Committee on Appropriations since August 3, 2004; and
(3) HB 00949 which was filed on July 1, 2004 by Rep. Judy J. Syjuco, entitled
“An Act Providing for a Salary Standardization for Military and Police
Personnel amending for the Purpose Republic Act No. 6758 otherwise
known as the ‘Compensation and Position Classification Act of 1989’ and
for other Purposes,” and also pending with the Committee on Appropriations
since August 28, 2004.
423
VOL. 446, DECEMBER 15, 2004 423

Pilipinas
modifications to it. Besides, there is an omnipresent

135
presumption of
constitutionality in every legislative enactment. No confutation of
the proviso was ever shown before; none should be considered now.
Congress Willing
to Perform Duty
Far from being remiss in its duty, Congress is in fact presently

deliberating upon HB 00123, which precisely136seeks to amend RA
7653137by, inter alia, exempting from the SSL all positions in the
BSP. Accordingly, this Court should not
_______________
135 Peralta v. Commission on Elections; supra, p. 79, per concurring and

dissenting opinion of Fernando, J. (later CJ.).
136 RA 6758.
137 §2 of HB 00123 provides:
“Section 2. Section 15, paragraph (c) of the same Act is hereby amended to read as follows:
“x x x xxx xxx
“A compensation structure, based on job evaluation studies and wage surveys and subject to
the Board’s approval, shall be instituted as an integral component of the Bangko Sentral’s
human resource development program: x x x Provided, that all position (sic) in the Bangko
Sentral ng Pilipinas shall be governed by a compensation, position classification system and
qualification standards approved by the Monetary Board based on comprehensive job analysis
and audit of actual duties and responsibilities. The compensation plan shall be comparable with
the prevailing compensation plans of other government financial institutions and shall be
subject to review by the Board no more than once every two (2) years without prejudice to
yearly merit reviews or increases based on productivity and profitability. The Bangko Sentral
shall therefore be exempt from existing laws, rules and regulations on compensation, position
classification and qualification standards. It shall however endeavor to make its system
conform as closely as possible with the principles under Republic Act No. 6758, as amended.”
424

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preempt Congress, especially when the latter has already 138

shown its
willingness and ability to perform its constitutional duty. After all,
petitioner has not proven any extreme urgency for this Court to
shove Congress aside in terms of providing the proper solution.
Lawmaking is not a pool this Court should wade into.
The Monetary Board has enough leeway to devise its own human
resource management system, subject to the standards of
professionalism and excellence
139
that are in accordance with sound
principles of management. This system must also be in close
conformity to the principles provided for, as well as with the rates
prescribed, under RA 6758.
More specifically, there should be “equal pay for substantially
equal work” and any differences in pay should be based “upon
substantive differences in duties and 140 responsibilities, and
qualification requirements of the positions.” In determining the
basic compensation of all government personnel, due regard should

be given by the said Board to the prevail-
_______________
138 See “Should The Supreme Court Presume that Congress Acts
Constitutionally?: The Role of the Canon of Avoidance and Reliance on Early
Legislative Practice in Constitutional Interpretation.” 116 Harv. L. Rev. 1798, April
2003.
139 The 1st paragraph of §15(c) of RA 7653, copied verbatim including italics,
provides:
“Sec. 15. Exercise of Authority.—In the exercise of its authority, the Monetary Board shall:
“x x x xxx xxx
“(c) establish a human resource management system which shall govern the selection,
hiring, appointment, transfer, promotion, or dismissal of all personnel. Such system shall aim to
establish professionalism and excellence at all levels of the Bangko Sentral in accordance with
sound principles of management.
“x x x xxx x x x.”
140 §2 of RA 6758.
425
VOL. 446, DECEMBER 15, 2004 425

Pilipinas
141
ing rates for comparable work in the private sector. Furthermore,
the reasonableness of142such compensation should be in proportion to
the national budget and to the possible erosion 143
in purchasing
power as a result of inflation and other factors. It should also abide
by the Index of Occupational Services prepared by the Department
of Budget and Management in accordance with the Benchmark 144
Position Schedule and other factors prescribed thereunder.
This Court has not been apprised as to how precisely the human
resource management system of the BSP has been misused. In the
absence of any evidence to 145
the contrary, it is therefore presumed that
the law has146 been obeyed, and that official duty has been regularly
performed in implementing the said law. Where additional
implementing rules would still be necessary to put the assailed
provision into continued
147
effect, any “attack on their constitutionality
would be premature.”
Surely, it would be wise “not to anticipate the serious
constitutional law problems that would arise under situations
148
where
only a tentative judgment is dictated by prudence.” Attempts “at
abstraction could only lead to dialectics and barren legal 149
questions
and to sterile conclusions unrelated to actualities.” A judicial
determination is fallow when in-
_______________
141 §§2 and 3(b) of RA 6758.

142 §3(c) of RA 6758.
143 §3(d) of RA 6758.
144 §9 of RA 6758.
145 §3(ff) of Rule 131 of the Rules of Court.
146 §3(m) of Rule 131 of the Rules of Court.
147 Ople v. Torres, 354 Phil. 948, 1011; 293 SCRA 141, 196, July 23, 1998, per
dissenting opinion of Mendoza, J. (citing Garcia v. Executive Secretary, 204 SCRA
516, 522, December 2, 1991).
148 Peralta v. Commission on Elections; supra, p. 96, per concurring and
dissenting opinion of Fernando, J. (later CJ.).
149 Id., p. 79, per concurring and dissenting opinion of Fernando, J. (later CJ.).
426

Pilipinas
spired by purely cerebral casuistry or emotional puffery, especially

during rowelling times.
No Denial of Equal Protection
Even if the matter of urgency is set aside for150the nonce, and the
Court exercises
151
its power of judicial review over acts of the
legislature, I respectfully submit that the Petition should still be
dismissed because the assailed provision’s continued operation will
not result in a denial of equal protection.
Neither the passage of RA 7653 nor its implementation has been
“committed with grave152 abuse of discretion amounting to lack or
excess of jurisdiction.” Every statute is intended by the legislature
153
to operate “no further than may be necessary to effectuate” its
specific purpose. In the absence of a clear finding as to its arbitrary,
whimsical or capricious application, the assailed provision cannot be
struck down as violative of the fundamental law. 154
Moreover, “[u]nder the ‘enrolled bill doctrine,’ the signing of a
bill by the Speaker of the House and the Senate President and the
certification of the [s]ecretaries
155
of both Houses of Congress that it
was passed, are conclusive” “not only of its pro-
_______________
150 §1 of Article VIII of the 1987 Constitution. See also Angara v. The Electoral
Commission, 63 Phil. 139, 158, July 15, 1936; and Marbury v. Madison; supra, p.
178, per Marshall, CJ.
151 Arceta v. Hon. Mangrobang, G.R. No. 152895, 432 SCRA 136, 140, June 15,
2004, per Quisumbing, J.
152 Francisco, Jr. v. The House of Representatives, supra, p. 222, per separate
opinion of Vitug, J.
153 Fariñas v. The Executive Secretary; supra, p. 14.
154 This was pronounced as early as 1947 in Mabanag v. Lopez Vito, 78 Phil. 1, 3,
18-19, March 5, 1947. See Tatad v. Secretary of the Department of Energy, 346 Phil.
321, 394; 281 SCRA 330, 385, November 5, 1997, per dissenting opinion of Melo, J.
155 Fariñas v. The Executive Secretary; supra, p. 26.
427
VOL. 446, DECEMBER 15, 2004 427

Pilipinas
156
visions but also of its due enactment.” It is therefore futile to
welter in the thought that the original and amended versions of the157
corresponding bill have no reference to the proviso in question.
Floor deliberations are either expansive or restrictive. Bills filed
cannot be expected to remain static; they transmute in form and
substance. Whatever doubts there may be as to the validity of any
provision therein must necessarily be resolved in its favor.
Brief Background of the Equal Protection Clause

Despite the egalitarian commitment in the Declaration of
Independence that “all men are created equal,” the framers of the
original Constitution of the United States omitted any constitutional
rule of equal protection. Not until 1868, when the Fourteenth
Amendment thereto 158 was ratified by the legislatures of the several
states of the Union,159 did the concept of equal protection have a
constitutional basis; and not until
_______________
156 Tatad v. Secretary of the Department of Energy; supra, p. 394; p. 385, per
dissenting opinion of Melo, J.
157 Petition, p. 6; rollo, p. 8.
158 Article XIV was proposed by Congress and ratified pursuant to the 5th Article
of the 1787 U.S. Constitution.
159 “Had those who drew and ratified the Due Process Clauses of the Fifth
Amendment or the Fourteenth Amendment known the components of liberty in its
manifold possibilities, they might have been more specific. They did not presume to
have this insight.” Lawrence v. Texas, 123 S.Ct. 2472, June 26, 2003, per Kennedy, J.
http://web2.westlaw.com/result/default.wl?RS=WLW4.08&VR=2.0&SV=Split&
FN=_top&MT=WestlawInternational&DB=SCT&Method=TNC&Qu_
ery=%22EQUAL+PROTECTION%22&RLTDB=CLID_DB122318&Rl
t=CLID_QRYRLT1522318&Cnt=DOC&DocSample=False&n=1&Cx
t=RL&SCxt=WL&SS=CXT&Service=Search&FCL=True&EQ=search
&CFID=1&bLinkedCiteList=False&Dups=False&RP=%2fsearch%2f
default.wl&nStartListItem=1&TF=507&TC=6. (Last visited September 13, 2004,
8:01:18 a.m. PST).
428

Pilipinas
the modern era did the United States Supreme Court give it enduring
constitutional significance.
From its inception, therefore, the equal protection clause in “the 160
broad and benign provisions of the Fourteenth Amendment”
already sought “to place all persons similarly situated upon a plane
of equality and to render 161
it impossible for any class to obtain
preferred treatment.” Its original understanding was the 162
proscription only of certain discriminatory acts based on race,
although its proper construction, when called to the attention of the
US Supreme Court in 163
the Slaughter-House Cases, first involved
exclusive privileges. Eventually, other disfavored bases of
governmental action were identified. Labeled as morally irrelevant
traits, gender, illegitimacy and alienage were included in this list.
Today, this clause is “the single most 164
important concept x x x for
the protection of individual
165
rights.” It does not, however, create
substantive rights. Its guaranty 166
is merely “a pledge of the
protection of equal laws.” Its “promise that no person shall be
denied the equal protection of the laws must coexist with the
practical necessity that most legislation classi-
_______________
160 Yick Wo v. Hopkins, 118 US 356, 373, 6 S.Ct. 1064, 1073, 30 L.ed. 220, 227,
May 10, 1886, per Matthews, J.
161 Louisville & Nashville Railroad Co. v. Faulkner; supra, p. 198, per Stanley, J.
162 Defensor-Santiago, The “New” Equal Protection, 58 Phil. Law Journal 1, 3,
March 1983.
163 Plessy v. Ferguson, 163 US 537, 543, 16 S.Ct. 1138, 1140, May 18, 1896.
164 Defensor-Santiago, The “New” Equal Protection, supra, p. 1.
165 Vacco v. Quill, 521 US 793, 799, 117 S.Ct. 2293, 2297, June 26, 1997, per
Rehnquist, CJ.
166 Romer v. Evans; supra, pp. 633-634; supra, p. 1628, per Kennedy, J. (citing
Skinner v. Oklahoma ex rel. Williamson, 316 US 535, 541, 62 S.Ct. 1110, 1113, June
1, 1942, per Douglas, J., quoting Yick Wo v. Hopkins; supra, p. 369; supra, p. 1070;
supra, p. 226, per Matthews, J.).
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VOL. 446, DECEMBER 15, 2004 429

Pilipinas
fies for one purpose or another,

167
with resulting disadvantage to
various groups or persons.” 168
As mirrored in our Constitution, this 169
clause enjoys the
interpretation given by its American framers and magistrates. In
fact, a century ago, this Court already enunciated that “the mere act
of cession of the Philippines to the United States did not extend the
[US] Constitution here, except such parts as fall within the general
principles of fundamental limitations in favor of personal rights
formulated in the [US] Constitution and its amendments, and which
exist rather by inference and the general spirit of the [US]
Constitution, and except those express provisions of the [US]
Constitution which prohibit Congress from passing 170
laws in their
contravention under any circumstances x x x.” Being one such
limitation in favor of personal rights enshrined in the Fourteenth
Amendment, equal protection is thus deemed extended to our
jurisdiction.
Notably, Justice Malcolm himself said that the constitutional law
of Spain, then171
in effect, was “entirely abrogated by the change of
sovereignty.” As a result, it was the constitutional law of the
United States that was transposed to our fledgling political and legal
system. To be precise, the principal organic acts of the Philippines
included President McKinley’s Instructions to the Second Philippine
Commission of April 7, 1900, to which this Court recognized the
United
_______________
167 Romer v. Evans; supra, p. 631; supra, p. 1627, per Kennedy, J.

168 §1 of Article III of the 1987 Constitution provides: “No person shall be x x x
denied the equal protection of the laws.”
169 Foremost of these were the proponents of The Federalist Papers, namely:
Alexander Hamilton, James Madison, and John Jay.
170 US v. Dorr, 2 Phil. 269, 283-284, May 16, 1903, per Cooper, J.
171 In re Shoop; supra, p. 223.
430

Pilipinas
172
States Constitution as a limitation upon the powers173
of the military
governor then in charge of the Philippine Islands.
In a catena of constitutional cases decided after the change in

sovereignty, this Court consistently held that the equal protection
clause requires all persons or things similarly situated to “be treated
alike, both as to rights conferred and responsibilities imposed.
Similar subjects x x x should not be treated differently, so as to174give
undue favor to some and unjustly discriminate against175others.” 176
Being a constitutional
177
limitation first recognized in Rubi —
citing Yick Wo —as one “derived from 178
the Fourteenth Amendment
to the United States Constitution,” this clause prescribes certain
requirements for validity: the challenged statute must be applicable
to all members of a class, reasonable, and enforced by the regular
methods of procedure
_______________
172 Duarte v. Dade, 32 Phil. 36, 50, October 20, 1915.

173 Mendoza, From McKinley’s Instructions to the New Constitution: Documents
on the Philippine Constitutional System (1978), pp. 5-6.
174 Cruz, Constitutional Law, supra, p. 124 (citing Lao H. Ichong v. Hernandez,
101 Phil. 1155, 1164, 1175-1176, May 31, 1957, per Labrador, J.).
175 Actually, the equal protection clause was first raised on appeal in US v.
Mendezona, 2 Phil. 353, July 25, 1903, but was not discussed by this Court thru
Torres, J. It was in fact only briefly mentioned in the Court’s denial of accused-
appellee’s Motion for Rehearing. Moreover, it referred to the clause as embodied not
in our own Constitution but in that of the United States.
176 Rubi v. The Provincial Board of Mindoro, 39 Phil. 660, March 7, 1919.
177 Yick Wo v. Hopkins; supra, p. 373; supra, pp. 1072-1073; supra, p. 227, per
Matthews, J.
178 Rubi v. The Provincial Board of Mindoro; supra, p. 703, per Malcolm, J.
(citing Yick Wo v. Hopkins; supra, p. 369; supra, p. 1070; supra, p. 226, per
Matthews, J.)
431
VOL. 446, DECEMBER 15, 2004 431

Pilipinas
179
prescribed, rather than by purely arbitrary means. Its
180
reasonableness must meet the181requirements enumerated in Vera
and later summarized in Cayat.
Three Tests Passed by Assailed Provision

I respectfully submit that the assailed provision passes the three-
tiered standard of review for equal protection that has been
developed by the courts through all these years.
The Rational Basis Test

Under the first tier or the rational relationship or rational basis test,
courts will uphold a classification 182
if it bears a rational relationship to
an accepted governmental end. In other words, 183
it must be
“rationally related to a legitimate state interest.” To be reasonable,
such classification must be (1) based on substantial distinction that
makes for real differences; (2) germane to the purposes of the law;
(3) not limited
_______________
179 Rubi v. The Provincial Board of Mindoro; supra, pp. 707 and 718.
180 People v. Vera, 65 Phil. 56, 126, November 16, 1937.
181 People v. Cayat, 68 Phil. 12, May 5, 1939.
“A century of Supreme Court adjudication under the Equal Protection Clause affirmatively
supports the application of the traditional standard of review, which requires only that the
State’s system be shown to bear some rational relationship to legitimate state purposes.” San
Antonio School District v. Rodriguez, 411 US 1, 40, 36 L.Ed. 2d 16, 47, March 21, 1973, per
Powell, J. http://caselaw.lp.findlaw.com/scripts/getcase.pl? navby=case&court=us&
vol=411&page=1. (Last visited September 13, 2004, 2:12:45 p.m. PST).
3254, per White, J.
432

Pilipinas
to existing conditions only; 184

and (4) equally applicable to all
members of the same class.
Murphy states that when a governmental classification is attacked
on equal protection grounds, such classification is in185most instances
reviewed under the standard rational basis test. Accordingly,
courts will not overturn that classification, unless the varying
treatments of different groups are so unrelated to the achievement of
any legitimate purpose that the courts 186
can only conclude that the
governmental actions are irrational. A classification must “be
reasonable, not arbitrary, and x x x rest upon some ground of
difference having a fair and substantial relation to the object of the
legislation, so187that all persons similarly circumstanced shall be
treated alike.”
All these conditions are met in the present case. The retention of
the best and the 188brightest officials in an independent central
monetary authority is a valid governmental objective that can be
reasonably met by a corresponding exemption from a salary
standardization scheme that is based on graduated salary levels. The
legislature in fact enjoys a189wide berth in continually classifying

whenever it enacts a law, provided that no persons similarly
situated within a given class are treated differently. To contend
otherwise is to be presumptuous about the legislative intent or lack
of it.
_______________
184 People v. Vera; supra, p. 126. See People v. Cayat; supra, p. 18.
186 Ibid.
187 Johnson v. Robison, 415 US 361, 374-375, 94 S.Ct. 1160, 1169, March 4, 1974,
per Brennan, J. (citing Reed v. Reed, 404 US 71, 76, 92 S.Ct. 251, 254, November 22,
1971).
188 §20 of Article XII of the 1987 Constitution.
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VOL. 446, DECEMBER 15, 2004 433

Pilipinas
Whether it would have been a better policy to make a190more

comprehensive classification “is not our province to decide.” The
absence of legislative facts supporting191a classification chosen has no
significance in the rational basis test. In fact, “a legislative choice
is not subject to courtroom fact-finding and may be based on 192
rational speculation unsupported by evidence or empirical data.”
Requiring Congress 193to justify its efforts may even “lead it to refrain
from acting at all.” In addition, Murphy holds that the statutory
classification “enjoys a strong presumption of constitutionality, and
a reasonable
194
doubt as to its constitutionality is sufficient to sustain
it.”
Respectfully, therefore, I again differ from the ponencia’s
contention that the195amendments of the charters of the seven GFIs
from 1995 to 2004 have already “unconstitutionalized”
_______________
190 International Harvester Co. of America v. Missouri, 234 US 199, 210, 34 S.Ct.
859, 863, June 8, 1914, per McKenna, J.
p. 315; supra, p. 2102 (citing Nordlinger v. Hahn, 505 US 1, 15, 112 S.Ct. 2326,
2334, June 18, 1992).
192 Ibid., Ibid., per Thomas, J.
3257, per White, J.

195 These amendments as enumerated in the ponencia are:
1. RA No. 7907 (1995) for Land Bank of the Philippines (LBP);

2. RA No. 8282 (1997) for Social Security System (SSS);
3. RA No. 8289 (1987) for Small Business Guarantee and Finance Corporation
(SBGFC);
4. RA No. 8291 (1997) for Government Service Insurance System (GSIS);
5. RA No. 8523 (1998) for Development Bank of the Philippines (DBP);
6. RA No. 8763 (2000) for Home Guaranty Corporation (HGC); and
434

Pilipinas
the continued implementation of the BSP proviso. Be it remembered

that the first six GFIs mentioned by Mr. Justice Puno—namely the
LBP, SSS, SBGFC, GSIS, DBP 196
and HGC—do not stand in the same
class and category as the BSP.
While the BSP, as mentioned earlier, is a regulatory agency
performing governmental functions, the six aforementioned GFIs
perform proprietary functions that chiefly compete with private
banks and other non-bank financial institutions. Thus, the so-called
concept of relative constitutionality again finds no application.
Under the rational relationship test, there can be no unequal
protection of the law between employees of the BSP and those of the
GFIs. Further, the 197equal protection clause “guarantees equality, not
identity of rights.” A law remains
198
valid even if it is limited “in the
object to which it is directed.”
“Defining the class of persons subject to a regulatory
requirement x x x inevitably requires that some persons who have an
almost equally strong claim to favored treatment be placed on
different sides of the line, and the fact that the line might have been
drawn differently at some points199
is a matter for legislative, rather
than judicial, consideration.” In fact,
_______________
7. RA No. 9302 (2004) for Philippine Deposit Insurance Corporation (PDIC).
196 In fact, as of April 1, 2002, the LBP and DBP already perform universal
banking functions, thus allowing them to combine their resources with those of
investment houses and to generate long-term investment capital. As expanded
commercial banks today, these two institutions are certainly subject to the regulatory
and supervisory powers of the BSP. Workers Desk, IBON Databank and Research
Center, IBON Foundation, Inc., The Philippine Banking Sector, supra, pp. 17-18.
197 Victoriano v. Elizalde Rope Workers’ Union, 59 SCRA 54, 77, September 12,
1974, per Zaldivar, J.
198 Ibid.
pp. 315-316; supra, p. 2102, per Thomas, J. (citing
435
VOL. 446, DECEMBER 15, 2004 435

Pilipinas
as long as “the basic classification is rationally based, uneven

effects upon particular groups
200
within a class are ordinarily of no
constitutional concern.” “It is not the province of this Court to
create substantive constitutional
201
rights in the name of guaranteeing
equal protection of the laws.”
On the other hand, the Philippine Deposit Insurance Corporation
(PDIC) is also a government regulatory agency almost on the same
level of importance as the BSP. However, its charter was only 202
amended very recently—to be more precise, on July 27, 2004.
Consequently, it would be most unfair to implicitly accuse Congress
of inaction, discrimination and unequal treatment. Comity with and
courtesy to a coequal branch dictate that our lawmakers be given
sufficient time and leeway to address the alleged problem of
differing pay scales. “Only by faithful adherence to this guiding
principle of judicial review of legislation is it possible to preserve to
the legislative
203
branch its rightful independence and its ability to
function.” Besides, it is a cardinal rule that courts first ascertain
whether construction of a statute is fairly possible
204
by which any
constitutional question therein may be avoided.
To explain further, while the possible changes contemplated by
Congress in HB 00123 are similar, if not identical,
_______________
United States Railroad Retirement Board v. Fritz; supra, p. 179; supra, p. 461, per
Rehnquist, J. [later CJ.]).
200 Vacco v. Quill; supra, p. 801; supra, p. 2298, per Rehnquist, CJ.
201 San Antonio School District v. Rodriguez; supra, p. 33; supra, p. 43, per
Powell, J.
202 The effectivity date is August 12, 2004. http://www.pdic.gov. ph/ra9302.htm.
(Last visited September 1, 2004; 9:06:01 a.m. PST).
p. 315; supra, p. 2102, per Thomas, J. (citing Lehnhausen v. Lake Shore Auto Parts
Co., 410 US 356, 365, 93 S.Ct. 1001, 1006, February 22, 1973, per Douglas, J.,
quoting Carmichael v. Southern Coal & Coke Co., 301 US 495, 510, 57 S.Ct. 868,
872, May 24, 1937, per Stone, J.).
204 Johnson v. Robison; supra, pp. 366-367; supra, p. 1165.
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to those found in the amended charters of the seven other GFIs

already mentioned, the governmental objectives as explicitly stated
in the explanatory note remain—to ascertain BSP’s effectiveness
and to strengthen its supervisory capability in promoting a more
stable banking system. This fact merely confirms that the present
classification and distinction under the assailed provision still bear a
rational relationship to the same legitimate governmental objectives
and should, therefore, not be invalidated.
The validity of a law is to be determined not by its effects on a
particular case or by an incidental result arising therefrom, but by
the purpose
205
and efficacy of the law in accomplishing that effect or
result. This point confirms my earlier position that the enactment
of a law is not the same as its operation. Unlike Vera in which the
Court invalidated the law on 206
probation because of the unequal effect
in the operation of such law, the assailed provision in the present
case suffers from no such invidious discrimination. It very well
achieves its purpose, and it applies equally to all government
employees within the BSP. Furthermore, the application of this
provision is not made subject to any discretion, uneven
appropriation of funds, or time limitation. Consequently, such a law
neither denies equal protection nor permits of such denial.
The Strict Scrutiny Test

Under the second tier or the strict scrutiny test, the Court will
require the government to show a compelling or overriding end to
justify (1) the limitation
207
on fundamental rights or (2) the implication
of suspect classes. Where a statutory classification impinges upon
a fundamental right or burdens a suspect class, such classification is
subjected to strict scru-
_______________
205 Victoriano v. Elizalde Rope Workers’ Union; supra, p. 82.

206 People v. Vera; supra, p. 128.
207 Defensor-Santiago, The “New” Equal Protection, supra, pp. 7 & 9.
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208
tiny. It will be upheld only if it is209shown to be “suitably tailored to
serve a compelling state interest.”
Therefore, all legal restrictions that curtail the civil rights of a
suspect class, like a single racial or ethnic group, are immediately
suspect. “That is not to say that all such restrictions are
unconstitutional. It is210 to say that courts must subject them to the
most rigid scrutiny.” Pressing public necessity, for instance, may
justify the existence of those restrictions, but antagonism toward
such suspect classes never can.
To date, no American case—federal or state—has yet been
decided involving equal pay schemes as applied either to
government employees vis-à-vis private ones, or within the
governmental ranks. Salary grade 211
or class of
212
position213 is not 214a
fundamental right like215
marriage, procreation, voting, speech
and interstate travel. American courts have in fact even 216
refused to
declare government employment a fundamental right.
_______________

209 Ibid., per Eldridge, J. See City of Cleburne, Texas v. Cleburne Living Center;
supra, p. 440; supra, p. 3254, per White, J.
210 Korematsu v. US, 323 US 214, 216, 65 S.Ct. 193, 194, December 18, 1944, per
Black, J.
211 Loving v. Commonwealth of Virginia, 388 US 1, 12, 87 S.Ct. 1817, 1824, June
12, 1967.
212 Skinner v. Oklahoma ex rel. Williamson; supra, p. 541; supra, p. 1113.
213 Kramer v. Union Free School District No. 15, 395 US 621, 626, 89 S.Ct. 1886,
1889, June 16, 1969.
214 Speech here refers to the right to engage in political expression. Austin v.
Michigan Chamber of Commerce, 494 US 652, 666, 110 S.Ct. 1391, 1401, March 27,
1990.
215 Attorney General of New York v. Soto-Lopez, 476 US 898, 903-904, 106 S.Ct.
2317, 2321-2322, June 17, 1986. See Murphy v. Edmonds; supra, p. 109.
216 Defensor-Santiago, The “New” Equal Protection, supra, p. 11, March 1983.
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As to suspect classes, non-exempt government employees (those

with salary grades below 20) are not a group “saddled with such
disabilities, or subjected to such a history of purposeful unequal
treatment, or relegated to such a position of political powerlessness,

as to command extraordinary
217
protection from the majoritarian 218
political process.”
219
They
220
are a group so much unlike 221
race,
nationality, alienage or denominational preference —factors
that are “seldom relevant to the achievement of any legitimate state
interest that laws grounded in such 222considerations are deemed to
reflect prejudice and antipathy x x x.” 223 224
Again, with due respect, the ponencia’s reference to Yick Wo,
therefore, is unbefitting. Indeed that case held that “[t]hough the law
itself be fair on its face and impartial in appearance, yet, if it is
applied and administered by public
_______________
217 Massachusetts Bd. of Retirement v. Murgia, 96 S.Ct. 2562, US Mass., June 25,
1976, per curiam (citing San Antonio Independent School District v. Rodriguez;
supra, p. 28; supra, p. 40, per Powell, J.).
http://web2.westlaw.com/find/default.wl?SerialNum=
1976142431&FindType=Y&AP=&RS=WLW4.08&R=2.0&FN=_top&
S=Split&MT=WestlawInternational&RLT=CLID_FQRLT425229&n
=1 (Last visited September 2, 2004; 09:36:35 a.m. PST).
218 For instance, it has long been declared by the US Supreme Court that “racial
discrimination in public education is unconstitutional.” Brown v. Board of Education
of Topeka, Shawnee County, Kansas, 349 US 294, 298, 75 S.Ct. 753, 755, May 31,
1955, per Warren, CJ.
219 Grutter v. Bollinger, 539 US 306, 326, 123 S.Ct. 2325, 2337-2338, June 23,
2003.
220 In re Griffiths, 413 US 717, 721-724, 93 S.Ct. 2851, 2854-2856, June 25, 1973.
221 Larson v. Valente, 456 US 228, 246, 102 S.Ct. 1673, 1684, April 21, 1982.
3254, per White, J.
223 See ponencia.
224 Yick Wo v. Hopkins; supra, p. 220; supra, p. 1064; supra, p. 356.
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authority with an evil eye and an unequal hand, so as practically to

make unjust and illegal discriminations between persons in similar
circumstances, material to their rights, the denial225of equal justice is
still within the prohibition of the [C]onstitution.” The facts in Yick
Wo clearly point out that the questioned ordinances therein—
regulating the use of wooden buildings in the business of keeping
and conducting laundries—operated in hostility to the race and
nationality to which plaintiffs belonged, being aliens and subjects of
226
226
the Emperor of China. To a board of supervisors was given the
arbitrary power to withhold permits to carry on a harmless and 227
useful occupation on which the plaintiffs depended for livelihood.
In contrast, no such arbitrariness is found in the case at bar.
Neither is there any allegation of abuse of discretion in the
implementation of a human resource development program. There is
also no allegation of hostility shown toward employees receiving
salaries below grade 20.
In fact, for purposes of equal protection
228
analysis, financial need
alone does not identify a suspect class. And even if it were to
consider government pay to be akin to wealth, it has already been
held that “where wealth is involved, the Equal Protection Clause 229
does not require absolute equality or precisely equal advantages.”
After all, a law does not become
_______________
225 Id., pp. 373-374; Id., p. 1073; Id., p. 227, per Matthews, J.
226 Id., pp. 366, 368 and 374; Id., pp. 1069, 1070, and 1073; Id., pp. 225-226, and
228.
227 Id., pp. 366 and 374; Id., pp. 1069 and 1073; Id., pp. 225 and 228.
228 Maher v. Roe, 432 US 464, 470-471, 97 S.Ct. 2376, 2380-2381, June 20, 1977.
229 San Antonio Independent School District v. Rodriquez; supra, p. 24; supra, p.
37, per Powell, J.
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230
invalid “because of simple inequality,” financial or otherwise.
Since employment in the government is not a fundamental right
and government employees below salary grade 20 are not a suspect
class, the government is not required to present a compelling
objective to justify a possible infringement under the strict scrutiny
test. The assailed provision thus cannot be invalidated via the strict
scrutiny gauntlet. “In areas of social and economic policy, a
statutory classification that neither proceeds along suspect lines nor
infringes fundamental constitutional rights must be upheld against
equal protection challenge if there is any reasonably conceivable
state of facts231 that could provide a rational basis for the
classification.”
The Intensified Means Test

Under the third tier or the intensified means test, the Court should
accept the legislative end, but should 232
closely scrutinize its
relationship to the classification made. There exist classifications
that are subjected to a higher or intermediate degree of scrutiny than

the deferential or traditional rational basis test. These
classifications, however, have not been deemed to involve suspect
classes or fundamental rights; thus, they have not been subjected to
the strict scrutiny test. In other words, such classifications must be
“substantially
_______________
230 Victoriano v. Elizalde Rope Workers’ Union; supra, p. 77, per Zaldivar, J.
(citing International Harvester Co. v. Missouri; supra, p. 210; supra, p. 862, per
McKenna, J.).
p. 313; supra, p. 2101, per Thomas, J.
In City of Cleburne, Texas v. Cleburne Living Center; supra, p. 442; supra, p. 3255, the Court
implied that the rational basis test is the standard of judicial review normally accorded
economic and social legislation.
232 Defensor-Santiago, The “New” Equal Protection, supra, pp. 7-8.
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233
related to a sufficiently important governmental interest.”
Examples of these234so-called “quasi-suspect” classifications are
235
those
based on gender, legitimacy under certain circumstances, legal
residency with regard to availment of free public education, civil
service employment preference for armed forces veterans who are
state residents upon entry to military service, and the right to
practice for compensation the profession
236
for which certain persons
have been qualified and licensed.
Non-exempt government employees may be a sensitive but not a
suspect class, and their employment status may be important
although not fundamental. Yet, the enactment of the assailed
provision is237a reasonable means by which the State seeks to advance
its interest. Since such provision sufficiently serves important
governmental interests and is substantially related to the
achievement thereof, then, again it stands.
“In the area of economics and social welfare, a State does not
violate the Equal Protection Clause merely because the
classifications made by its laws are imperfect. If the classification
has some ‘reasonable basis,’ it does not offend the Constitution
simply because the classification ‘is not made with mathematical
238
nicety or because in practice it results in some inequality.’ ” “The
very idea of classification is that of ine-
_______________
3255, per White, J.
234 Id., pp. 440-441; Id., pp. 3254-3255.
235 Id., p. 441; Id., p. 3255.
236 Murphy v. Edmonds; supra, pp. 109-110.
237 San Antonio Independent School District v. Rodriguez; supra, p. 98; supra, pp.
80-81, per dissenting opinion of Marshall, J.
238 Dandridge v. Williams, 90 S.Ct. 1153, US Md., April 6, 1970, per Stewart, J.
(citing Lindsley v. Natural Carbonic Gas Co., 220 US 61, 78, 31 S.Ct. 337, 340,
March 13, 1911, per Van Devanter, J.).
http://web2.westlaw.com/find/default.wl?SerialNum=197013420&
FindType=Y&AP=&RS=WLW4.08&VR=2.0&FN=_top&SV=Split&
MT=WestlawInternational&RLT=CLID_FQRLT111229&n=1. (Last
442

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quality, so that x x x the fact of239inequality in no manner determines

the matter of constitutionality.”
A statute, therefore, “is not invalid under the Constitution
because it might have gone farther than it did, or because it may not 240
succeed in bringing about the result that it tends to produce.”241
Congress does not have to “strike at all evils at the same time.”
Quoting Justice Holmes, a law “aimed at what is deemed an evil,
and hitting it presumably where experience shows it to be most felt,
is not to be upset by thinking up and enumerating other instances to
which [the law] might have been applied equally well, so far as the
court can see.242That is for the legislature to judge[,] unless the case
is very clear.” This Court is without power to disturb a legislative
judgment, unless “there is no fair reason for the law that would not
require with243 equal force its extension to others whom it leaves
untouched.” To find fault with a legislative244policy “is not to
establish the invalidity of the law based upon it.”
_______________
Visited September 3, 2004; 3:01:49 p.m. PST). See also Murphy v. Edmonds,
supra, p. 114.
239 International Harvester Co. of America v. Missouri; supra, p. 210; supra, p.
862, per McKenna, J. (citing Atchison, T.& S.F.R. Co. v. Matthews, 174 US 96, 106,
19 S.Ct. 609, 613, April 17, 1899, per Brewer, J.).
240 Goesært v. Cleary, 335 US 464, 467, 69 S.Ct. 198, 200, December 20, 1948,
per Frankfurter, J. (citing Roschen v. Ward, 279 US 337, 339, 49 S.Ct. 336, April 22,
1929, per Holmes, J.).

241 Katzenbach v. Morgan, 384 US 641, 657, 16 L.Ed. 2d 828, 839, June 13, 1966,
per Brennan, J. (citing Semler v. Oregon State Board of Dental Examiners, 294 US
608, 610, 55 S.Ct. 570, 571, 79 L.Ed. 1086, 1089, April 1, 1935, per Hughes, C.J.).
242 Churchill v. Rafferty, 32 Phil. 580, 611-612, December 21, 1915, per Trent, J.
(quoting Keokee Consolidated Coke Co. v. Taylor, 234 US 224, 227, 34 S.Ct. 856,
857, June 8, 1914, per Holmes, J.).
243 International Harvester Co. of America v. Missouri; supra, p. 214; supra, p.
864, per McKenna, J. (citing Missouri, Kansas, & Texas Railway Co. of Texas v. May,
194 US 267, 269, 24 S.Ct. 638, 639, May 2, 1904, per Holmes, J.).
244 Id., p. 215; Id., p. 865, per McKenna, J.
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Epilogue
After that rather lengthy discourse, permit me to summarize. I

respectfully submit that the assailed provision is not unconstitutional
either on its face or as applied.
First, the theory of relative constitutionality is inapplicable to
and not in pari materia with the present facts. It pertains only to the
circumstances that an assailed law specifically addressed upon its
passage, and not to extraneous circumstances.
The American cases cited in the ponencia prove my point. The
laws therein that have been declared invalid because of “altered
circumstances” or “changed conditions” are of the emergency type
passed in the exercise of the State’s police power, unlike the law
involved in the present case. Moreover, our ruling in Rutter does not
apply, because the assailed provision in the present case is not a
remedial measure subject to a period within which a right of action
or a remedy is suspended. Since the reason for the passage of the
law still continues, the law itself must continue.
Second, this Court should respect Congress as a coequal branch
of government. No urgency has been shown as to require the
peremptory striking down of the assailed provision, and no injuries
have been demonstrated to have been sustained as to require
immediate action on the judiciary’s part.
The legislative classification of BSP employees into exempt and
non-exempt, based on the salary grade of their positions, and their
further distinction (albeit perhaps not by design) from the employees
of various GFIs are nevertheless valid and reasonable in achieving
the standards of professionalism and excellence within the BSP—
standards that are in accordance with sound principles of

management and the other principles provided for under RA 6758.
They are employees not subjected to the same levels of difficulty,
responsibility, and qualification requirements. Besides, the BSP
performs
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primarily governmental or regulatory functions, while the GFIs

cited in the ponencia execute purely proprietary ones.
Congress is in fact presently deliberating upon possible
amendments to the assailed provision. Since there is no question that
it validly exercised its power and did not gravely abuse its discretion
when it enacted the law, its will must be sustained. Under the
doctrine of separation of powers with concomitant respect for
coequal and coordinate branches of government, this Court has
neither the authority nor the competence to create or amend laws.
Third, the assailed provision passes the three-tiered standard of
review for equal protection. It is both a social and an economic
measure rationally related to a governmental end that is not
prohibited. Since salary grade, class of position, and government
employment are not fundamental or constitutional rights, and non-
exempt government employees or their financial need are not
suspect classes, the government is not at all required to show a
compelling state interest to justify the classification made. The
provision is also substantially related to the achievement of
sufficiently important governmental objectives. A law does not
become invalid because of simple inequality, or because it did not
strike at all evils at the same time.
At bottom, whichever constitutional test is used, the assailed
provision is not unconstitutional. Moreover, a thorough scrutiny of
the Petition reveals that the issue of equal protection has been raised
only in regard
245
to the unconstitutionality of the proviso at its
inception, and not by reason of the alleged “changed conditions”
propounded by the ponencia. With greater reason then that the
Petition should be denied.
In our jurisdiction, relative constitutionality is a rarely utilized
theory having radical consequences; hence, I believe it should not be
imposed by the Court unilaterally. Even in the US, it applies only
when there is a change in factual circum-
_______________
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stances covered by the law, not when there is an enactment of

another law pertaining to subjects not directly covered by the
assailed law. Whether factual conditions have so changed as to call
for a partial or even a total abrogation of the law is a matter that
rests primarily
246
within the constitutional prerogative of Congress to
determine. To justify a judicial nullification, the constitutional
breach of a legal provision247must be very clear and unequivocal, not
doubtful or argumentative.
In short, this Court can go no further than to inquire whether
Congress had the power to enact a law; it cannot delve into the
wisdom of policies it adopts or248 into the adequacy under existing
conditions of measures it enacts. The equal protection clause is not
a license for the courts249
“to judge the wisdom, fairness, or logic of
legislative choices.” Since relative constitutionality was not
discussed by the parties in any of their pleadings, fundamental
fairness and evenhandedness still dictate that Congress be heard on
this concept before the Court imposes it in a definitive ruling.
Just a final observation at this juncture. It seems to me that when
RA 7653 was enacted, the real focus of the second paragraph of
Section 15(c) of Chapter 1 of Article II of the statute was to enable
the officers and executives of the BSP to enjoy a wider scope of
exemption from the Compensation Classification System than that
stated in the last part of Section 9 of the Salary Standardization Law.
As can be gleaned from the deliberations on the bill, the mention of
BSP employees with salary grade 19 and below seems to have been
purely incidental in the process of defining who were part of the
executive and officer corps. It appears that the “classification” (if we
can call it that) of the rank and filers with salary grade 19 and below,
via the challenged proviso, came about
_______________
246 People v. Cayat; supra, p. 21.

247 Peralta v. Commission on Elections; supra, p. 55.
248 People v. Cayat; supra, p. 21.
p. 313; supra, p. 2101, per Thomas, J.
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not by design. And it was only after the later pieces of legislation
were promulgated affecting the charters of the LBP, GSIS, SSS,
DBP, etc. that the proviso came to be considered as “discriminatory.”
In these trying times, I cannot but sympathize with the BSP rank
and filers on account of the situation they have found themselves in,
and I do not mean to begrudge them the opportunity to receive a
higher compensation package than what they are receiving now.
However, they are operating on the simplistic assumption that, being
rank and file employees employed in a GFI, they are automatically
entitled to the same benefits, privileges, increases and the like
enjoyed by any other rank and file employee of a GFI, seeing as they
are all working for one and the same government anyway.
It could also have something to do with the fact that Central
Bank employees were quite well paid in the past. They may have
overlooked the fact that the different GFIs are regulated by their
respective charters, and are mandated to perform different functions
(governmental or proprietary). Consequently, their requirements and
priorities are likewise different, and differ in importance in the
overall scheme of things, thus necessitating some degree of
differentiation and calibration in respect of resource allocation,
budgets and appropriations, and the like.
The long and short of it is that there can be no such thing as an
automatic entitlement to increases in compensation, benefits and so
forth, whether we consider the BSP rank and filers similarly situated
along with other rank and filers of GFIs, or as being in a class by
themselves. This is because the BSP is, strictly speaking, not a GFI
but rather, the regulatory agency of GFIs.
The foregoing becomes even more starkly clear when mention is
again made of the fiscal/budget deficit hobbling the national
government, which has, not surprisingly, triggered waves of belt
tightening measures throughout every part of the bureaucracy. This
particular scenario puts Congress
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somewhat at odds with itself. On the one hand, it is studying HB

00123 with the end in view of precisely addressing the principal
concern of the petitioner. On the other hand, it is also looking into
how the various exemptions from the Salary Standardization Law
can be rationalized or done away with, in the hope of ultimately
reducing the gargantuan deficit.
Thankfully, the Court is not the one having to grapple with such a
conundrum. It behooves us to give Congress, in the exercise of its
constitutional mandate and prerogative, as much elbow room and
breathing space as it needs in order to tackle and perhaps vanquish
the many headed monster.
And while we all watch from the sidelines, we can all console
ourselves and one another that after all, whether we find ourselves
classified-out as BSP rank and filers, or officers and executives, or
employees and members of the judiciary, we are—all of us—in the
same boat, for we have all chosen to be in “public service,” as the
term is correctly understood. And what is public service if it does
not entail a certain amount of personal sacrifice on the part of each
one of us, all for the greater good of our society and country. We
each make our respective sacrifices, sharing in the burden today, in
the hope of a better tomorrow for our children and loved ones, and
our society as a whole. It makes us strong. For this we can be
thankful as well.
WHEREFORE, I vote to DISMISS the Petition. I maintain that
the last proviso of the second paragraph of Section 15(c) of Chapter
1 of Article II of Republic Act No. 7653 is constitutional. Congress
should be given adequate opportunity to enact the appropriate
legislation that will address the issue raised by petitioner and clear
the proviso of any possible or perceived infringement of the equal
protection clause. At the very least, Congress and herein respondents
should be given notice and opportunity to respond to the possible
application of the theory of relative constitutionality before it is, if at
all, imposed by this Court.
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DISSENTING OPINION
CARPIO, J.:
I dissent from the majority opinion.

First, the majority opinion does not annul a law but enacts a
pending bill in Congress into law. The majority opinion invades the
legislative domain by enacting into law a bill that the 13th Congress
is now considering for approval. The majority opinion does this in
the guise of annulling a proviso in Section 15(c), Article II of
Republic Act No. 7653 (“RA 7653”).
Second, the majority opinion erroneously classifies the Bangko

Sentral ng Pilipinas (“BSP”), a regulatory agency exercising
sovereign functions, in the same category as non-regulatory
corporations exercising purely commercial functions like Land Bank
of the Philippines (“LBP”), Social Security System (“SSS”),
Government Service Insurance System (“GSIS”), Development
Bank of the Philippines (“DBP”), Small Borrowers Guarantee Fund
Corporation (“SBGFC”), and Home Guarantee Corporation
(“HGC”).
Usurpation of Legislative Power

There is a bill now pending in Congress, House Bill No. 123,
seeking to exempt the rank-and-file employees of BSP from the
Salary Standardization Law (“SSL”). A similar bill was filed in the
12th Congress together with the bill exempting from the SSL all
officials and employees of Philippine Deposit Insurance Corporation
(“PDIC”). The bill exempting PDIC employees from SSL was
approved on 27 July 2004 in the dying days of the 12th Congress.
However, due to lack of time, the bill exempting BSP rank-and-file
employees did not reach third reading.
What the majority opinion wants is to preempt Congress by
declaring through a judicial decision that BSP rank-and-file
employees are now exempt from the SSL. The majority opin-
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ion seeks to legislate the exemption from SSL by declaring void the
proviso in Section 15(c), Article II of RA 7653 (“proviso”), which
states:
A compensation structure, based on job evaluation studies and wage surveys

and subject to the Board’s approval, shall be instituted as an integral
component of the Bangko Sentral’s human resource development program:
Provided, That the Monetary Board shall make its own system conform as
closely as possible with the principles provided for under Republic Act No.
6758. Provided, however, That compensation and wage structure of
employees whose positions fall under salary grade 19 and below shall be
in accordance with the rates prescribed under Republic Act No. 6758.
(Emphasis supplied)
The majority opinion justifies its action by saying that while the
proviso was valid when first enacted, it is now invalid because its
continued operation is discriminatory against BSP rank-and-file
employees. All officials and employees of other government
financial institutions (“GFIs”) like GSIS, LBP, DBP, SSS, SBGFC,

HGC and PDIC are now exempt from the SSL. Congress granted the
exemptions over the years, for LBP in 1995, SSS in 1997, GSIS in
1997, SBGFC in 1997, DBP in 1998, HGC in 2000, and PDIC in
2004.
Among the GFIs granted exemption from SSL, only PDIC is a
regulatory agency. PDIC received its SSL exemption only this year—
2004. PDIC is the first regulatory GFI whose rank-and-file
employees are exempt from the SSL. Rank-and-file employees of
BSP, a GFI exercising regulatory functions, cannot at this time claim
any unreasonable or oppressive delay in securing legislative
exemption from SSL, assuming Congress is disposed to grant an
exemption.
At this time, this Court cannot say that the continued validity of
the proviso in Section 15(c) of RA 7653 is unreasonable and
oppressive on BSP rank-and-file employees. This Court cannot say
that Congress gravely abused its jurisdiction in not exempting BSP
rank-and-file employees from the SSL at the same time as PDIC.
Congress is now considering
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BSP’s exemption, and this Court cannot imperiously conclude that

Congress had more than enough time to act on BSP’s exemption.
Even if Congress does not act on BSP’s exemption for more than
one year, it does not follow that this Court should then exempt BSP
rank-and-file employees from the SSL. As the law now stands,
PDIC is the only regulatory GFI whose rank-and-file employees are
exempt from SSL. All other GFIs exercising regulatory functions are
not exempt from the SSL, including BSP whose rank-and file
employees are subject to the SSL.
The grant of exemption to PDIC is the legislative act that is
questionable for being discriminatory against all other self-
sustaining government agencies exercising regulatory functions.
Such grant to one regulatory agency, without a similar grant to other
regulatory agencies whose incomes exceed their expenses, creates a
class of exemption that has dubious basis. In short, the singular
exemption of PDIC from the SSL discriminates against all other
self-sustaining government agencies that exercise regulatory
functions.
The grant of SSL exemption to GFIs has ramifications on the
deepening1 budget deficit of the government. Under Republic Act
No. 7656, all GFIs are required to remit to the
_______________
1 Sections 2 and 3 of Republic Act No. 7656 provide:
Section 3. Dividends.—All government-owned or -controlled corporations shall declare and

remit at least fifty percent (50%) of their annual net earnings as cash, stock or property
dividends to the National Government. This section shall also apply to those government-
owned or -controlled corporations whose profit distribution is provided by their respective
charters or by special law, but shall exclude those enumerated in Section 4 hereof: Provided,
That such dividends accruing to the National Government shall be received by the National
Treasury and recorded as income of the General Fund.
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National Treasury at least 50% of their annual net earnings. This

remittance forms part of the government revenues that fund the
annual appropriations act. If the remittances from GFIs decrease, the
national revenues funding the annual appropriations act
correspondingly decrease. This results in widening even more the
budget deficit.
A bigger budget deficit means there are no revenues to fund
salary increases of all government employees who are paid out of
the annual appropriations act. The exemption of GFIs from SSL may
delay or even prevent a general increase in the salary of all
government employees, including rank-and-file employees in the
judiciary. This Court cannot simply ordain an exemption from SSL
without considering serious ramifications on fiscal policies of the
government. This is a matter better left to the Executive and
Legislative Departments. This Court cannot intrude into fiscal
policies that are the province of the Executive and Legislative
Departments.
Indeed, Congress should pass a law rationalizing the exemptions
of all government agencies from the SSL. The piecemeal grant of
exemptions is creating distortions in the salary structure of
government employees similarly situated. Such rationalization,
however, is not the function of the Court. Even as a practical matter,
this Court does not have the necessary data to rationalize the
exemptions of all government agencies from the SSL.
The power of judicial review of legislative acts presumes that
Congress has enacted a law that may violate the Consti-
_______________
Section 4. Exemptions.—The provisions of the preceding section notwithstanding, government-

owned or -controlled corporations created or organized by law to administer real or personal
properties or funds held in trust for the use and the benefit of its members, shall not be covered
by this Act such as, but not limited to: the Government Service Insurance System, the Home
Development Mutual Fund, the Employees’ Compensation Commission, the Overseas Workers
Welfare Administration, and the Philippine Medical Care Commission.
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tution. This Court cannot exercise its power of judicial review

before Congress has enacted the questioned law. In this case,
Congress is still considering the bill exempting BSP rank-and-file
employees from the SSL. There is still no opportunity for this Court
to exercise its review power because there is nothing to review.
The majority opinion, however, claims that because of the failure
of Congress to enact the bill exempting BSP rank-and-file
employees from the SSL, this Court should now annul the proviso in
Section 15(c) of RA 7653 to totally exempt BSP from the SSL. This
is no longer an exercise of the power of judicial review but an
exercise of the power of legislation—a power that this Court does
not possess. The power to exempt a government agency from the
SSL is a legislative power, not a judicial power. By annulling a prior
valid law that has the effect of exempting BSP from the SSL, this
Court is exercising a legislative power.
The power of judicial review is the power to strike down an
unconstitutional act of a department or agency of government, not
the power to initiate or perform an act that is lodged in another
department or agency of government. If this Court strikes down the
law exempting PDIC from the SSL because it is discriminatory
against other government agencies similarly situated, this Court is
exercising its judicial review power. The effect is to revert PDIC to
its previous situation of being subject to the SSL, the same situation
governing BSP and other agencies similarly situated.
However, by annulling the proviso in Section 15(c) of RA 7653,
BSP is not reverted to its previous situation but brought to a new
situation that BSP cannot attain without a new legislation. Other
government agencies similarly situated as BSP remain in their old
situation—still being subject to the SSL. This is not an annulment of
a legislative act but an enactment of legislation exempting one
agency from the SSL without exempting the remaining agencies
similarly situated.
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2
The majority opinion cites Rutter v. Esteban as precedent for
declaring the proviso in Section 15(c) of RA 7653 unconstitutional.
Rutter is not applicable to the present case. In Rutter, the Court
declared on 18 May 1953 that while the Debt Moratorium Law was
valid when enacted on 26 July 1948, its “continued operation and
enforcement x x x is unreasonable and oppressive, and should not be
prolonged a minute longer.” With the discontinuance of the
effectivity of the Debt Moratorium Law, the debtors who benefited
from the law were returned to their original situation prior to the
enactment of the law. This meant that the creditors could resume
collecting from the debtors the debts the payment of which was
suspended by the Debt Moratorium Law. The creditors and debtors
were restored to their original situation before the enactment of the
Debt Moratorium Law. No debtor or creditor was placed in a new
situation that required the enactment of a new law.
In the present case, declaring the proviso in Section 15(c) of RA
7653 no longer legally effective does not restore the BSP rank-and-
file employees to their original situation, which subjected them to
the SSL. Instead, the discontinuance of the validity of the proviso
brings the BSP rank-and-file employees to a new situation that they
are not entitled without the enactment of a new law. The effect of the
majority decision is to legislate a new law that brings the BSP rank-
and-file employees to a new situation. Clearly, the Rutter doctrine
does not apply to the present case.
Erroneous Classification of BSP as GFI Similar to LBP, DBP and

Others
The majority opinion classifies BSP as a GFI just like GSIS, LBP,
DBP, SSS, SBGFC, HGC and PDIC. Here lies the basic error of the
majority opinion. GSIS, LBP, DBP, SSS, SBGFC and HGC are GFIs
but are not regulatory agencies.
_______________
2 93 Phil. 68 (1953).
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BSP and PDIC are GFIs but are also regulatory agencies just like
other governmental regulatory agencies. The majority opinion is
comparing apples with oranges. GFIs that do not exercise regulatory
functions operate just like commercial financial institutions.

However, GFIs that exercise regulatory functions, like BSP and
PDIC, are unlike commercial financial institutions. BSP and PDIC
exercise sovereign functions unlike the other non-regulatory GFIs.
Non-regulatory GFIs derive their income solely from commercial
transactions. They compete head on with private financial
institutions. Their operating expenses, including employees’
salaries, come from their own self-generated income from
commercial activities. However, regulatory GFIs like BSP and PDIC
derive their income from fees, charges and other impositions that all
banks are by law required to pay. Regulatory GFIs have no
competitors in the private sector. Obviously, BSP and PDIC do not
belong to the same class of GFIs as LBP, SSS, GSIS, SBGFC, DBP
and HGC.
Exempting non-regulatory GFIs from the SSL is justified
because these GFIs operate just like private commercial entities.
Their revenues, from which they pay the salaries of their employees,
come solely from commercial operations. None of their revenues
comes from mandatory government exactions. This is not the case of
GFIs like BSP and PDIC which impose regulatory fees and charges.
Conclusion
Under the Constitution, Congress is an independent department that
is a co-equal of the Supreme Court. This Court has always accorded
Congress the great respect that it deserves under the Constitution.
The power to legislate belongs to Congress. The power to review
enacted legislation belongs to the Supreme Court. The Supreme
Court has no power to declare a pending bill in Congress as deemed
enacted into law. That is not the power to review legislation but the
power to usurp a legislative function.
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The majority opinion is leading this Court into usurping the primary
jurisdiction of Congress to enact laws. The majority opinion brings
this Court and Congress into a needless clash of powers—whether
the power of judicial review of legislative acts includes the power to
initiate legislative acts if this Court becomes impatient with the pace
of legislative process. Clearly, this Court does not have the power to
legislate. Congress has a right to guard zealously its primary power
to enact laws as much as this Court has a right to guard zealously its
power to review enacted legislations.
Accordingly, I vote to dismiss the petition.
DISSENTING OPINION
CARPIO-MORALES, J.:
Is being an employee of a Government Owned or Controlled

Corporation (GOCC) or a Government Financial Institution (GFI) a
reasonable and sufficient basis for exemption from the compensation
and position classification system for 1
all government personnel
provided in Republic Act No. 6758, entitled Compensation and
Position Classification Act of 1989, also known as the Salary
Standardization Law?
The main opinion, by simultaneously applying two different
standards for determining compliance with the constitutional
requirement of equal protection—the “rational basis test” and the
“strict scrutiny test”—under the rubric of “relative constitutionality,”
holds that it is.
Upon studied reflection, however, I find that such conclusion is
contrary to the weight of the applicable legal authorities; involves an
evaluation of the wisdom of the law and a pre-emption of the
congressional power of appropriation, which are both beyond the
scope of judicial review; and re-
_______________
1 Entitled “AN ACT PRESCRIBING A REVISED COMPENSATION AND

POSITION CLASSIFICATION SYSTEM IN THE GOVERNMENT AND FOR
OTHER PURPOSES.”
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sults in increased, rather than reduced, inequality within the

government service—creating, as it does, a preferred subclass of
government employees, i.e. employees of GFIs, devoid of either a
rational factual basis or a discernable public purpose for such
classification.
Consequently, I am constrained to respectfully register my
dissent.
The relevant antecedents of this case are as follows:
On August 21, 1989, R.A. No. 6758 (the Salary Standardization
Law), amending Presidential Decree 2
No. 985 (the Old Salary
Standardization Law), was enacted in response to the mandate to
provide for a standardized compensation scale for all government
employees, including those employed in GOCCs, under Section 5,

Article IX-B, of the Constitution:
Sec. 5. The Congress shall provide for the standardization of compensation

of government officials and employees, including those in government-
owned or controlled corporations with original charters, taking into account
the nature of the responsibilities pertaining to, and the qualifications
required for their positions.
This provision was taken from the 1973 Constitution in order to

address the wide disparity of compensation between government
employees employed in proprietary corporations and those strictly
performing governmental functions, the disparity, having been
brought about by the increasing number of exemptions of
proprietary corporations through special
_______________
2 The Salary Standardization Law took effect on July 1, 1989 pursuant to Section
23 thereof:
Sec. 23. Effectivity.—This Act shall take effect July 1, 1989. The DBM shall, within sixty (60)
days after its approval, allocate all positions in their appropriate position titles and salary grades
and prepare and issue the necessary guidelines to implement the same.
Vide Philippine Ports Authority v. Commission on Audit, 214 SCRA 653, 655
(1992).
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legislation from
3
the coverage of the then Integrated Reorganization
Plan of 1972. Part III, Chapter II, Article II of the latter stated:
4
Article II—Reexamination of the WAPCO Plans
After thirteen years in operation, the WAPCO Plans have been undermined
by the increasing number of exemptions from its coverage through special
legislation. Moreover, through court decisions and the opinions of the
Secretary of Justice, the so-called proprietary corporations are no longer
subject to the Plans. Through collective bargaining, employees of
government corporations have been able to secure not only higher salaries
but liberal fringe benefits as well. As revealed by the 1970 Presidential
Committee to Study Corporate Salary Scales, the average compensation in
some of these corporations, using the average compensation of positions
covered by the WAPCO Plans as base (100%), is as follows: 5
DBP - 203%,
CB - 196%, GSIS -147%, SSS - 150%, and NWSA - 111%.
Thus, the stated policy behind the Salary Standardization Law is to

provide equal pay for substantially equal work and-to base
differences in pay upon substantive differences in duties and
responsibilities, and qualification requirements of the positions,
while giving due regard to, among others, prevailing rates in the
private sector for comparable work:
SECTION 2. Statement of Policy.—It is hereby declared the policy of the

State to provide equal pay for substantially equal work and to base
differences in pay upon substantive differences in duties and
responsibilities, and qualification requirements of the positions. In
determining rates of pay, due regard shall be given to, among others,
prevailing rates in the private sector for comparable work. For this
purpose, the Department of Budget and Managements (DBM) is hereby
directed to establish and administer a unified Compensation and Position
_______________
3 J. BERNAS, S.J. THE 1987 CONSTITUTION OF THE REPUBLIC OF THE

PHILIPPINES: A COMMENTARY 1029 (2003).
4 Wage and Position Classification Office.
5 Id., at pp. 1029-1030.
458

Classification System, hereinafter referred to as the System, as provided for

in Presidential Decree No. 985, as amended, that shall be applied for all
government entities, as mandated by the Constitution.
x x x (Emphasis supplied)
The Salary Standardization Law applies to all positions, whether

elective or appointive within the entire length and breadth of the
Civil Service including those in the GOCCs and GFIs:
Sec. 4. Coverage.—The Compensation and Position Classification

System herein provided shall apply to all positions, appointive or
elective, on full or part-time basis, now existing or hereafter created in
the government, including government-owned or controlled corporations
and government financial institutions.
The term “government” refers to the Executive, the Legislative and the
Judicial Branches and the Constitutional Commissions and shall include all,
but shall not be limited to, departments, bureaus, offices, boards,
commissions, courts, tribunals, councils, authorities, administrations,
centers, institutes, state colleges and universities, local government units,
and the armed forces. The term “government-owned or controlled
corporations and financial institutions” shall include all corporations and
financial institutions owned or controlled by the National Government,

whether such corporations and financial institutions perform governmental
or proprietary functions. (Emphasis and italics supplied)
Nota bene, Section 21 of the Salary Standardization Law provides

that “[a]ll provisions of Presidential Decree No. 985, as amended by
Presidential Decree No. 1597, which are not inconsistent with this
Act and are not expressly modified, revoked or repealed in this Act
shall continue to be in full force and effect.” Thus, the definition of
terms found in Section 3 of P.D. No. 985 continues to be applicable
to the Salary Standardization Law, including:
SECTION 3. Definition of Terms.—As used in this Decree, the following

shall mean:
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xxx
c. Class (of position)—The basic unit of the Position Classification

System. A class consists of all those positions in the system which
are sufficiently similar as to (1) kind or subject matter of work, (2)
level of difficulty and responsibility, and (3) the qualification
requirements of the work, to warrant similar treatment in personnel
and pay administration.
d. Class Specification or Standards—A written description of a class
of position(s). It distinguishes the duties, responsibilities and
qualification requirements of positions in a given class from those
of other classes in the Position Classification System.
e. Classification—The act of arranging positions according to broad
occupational groupings and determining differences of classes
within each group.
xxx
g. Compensation or Pay System—A system for determining rates of
pay for positions and employees based on equitable principles to be
applied uniformly to similar cases. It consists, among others, of the
Salary and Wage Schedules for all positions, and the rules and
regulations for its administration.
h. Grade—Includes all classes of positions which, although different
with respect to kind or subject matter of work, are sufficiently
equivalent as to level of difficulty and responsibility and level of
qualification requirements of the work to warrant the inclusion of
such classes of positions within one range of basic compensation.
xxx
m. Position—A set of duties and responsibilities, assigned or delegated

by competent authority and performed by an individual either on
full-time or part-time basis. A position may be filled or vacant.
n. Position Classification—The grouping of positions into classes on
the basis of similarity of kind and level of work, and the
determination of the relative worth of those classes of positions.
o. Position Classification System—A system for classifying positions
by occupational groups, series and classes, according to similarities
or differences in duties and responsibilities, and qualification
requirements. It consists of (1) classes and class specifications and
(2) the rules and regulations for its installation and mainte-
460

nance and for the interpretation, amendment and alternation of the

classes and class specifications to keep pace with the changes in the service
and the positions therein.
xxx
q. Reclassification or Reallocation—A change in the classification of

a position either as a result of a change in its duties and
responsibilities sufficient to warrant placing the position in a
different class, or as result of a reevaluation of a position without a
significant change in duties and responsibilities.
r. Salary or Wage Adjustment—A salary or wage increase towards
the minimum of the grade, or an increase from a non-prescribed
rate to a prescribed rate within the grade.
s. Salary or Wage Grade—The numerical place on the salary or Wage
Schedule representing multiple steps or rates which is assigned to a
class.
t. Salary or Wage Schedule—A numerical structure in the
Compensation System consisting of several grades, each grade with
multiple steps with a percentage differential throughout the pay
table. A classified position is assigned a corresponding grade in the
Schedule.
u. Salary or Wage Step Increment—An increase in salary or wage
from one step to another step within the grade from the minimum
to maximum. Also known as within grade increase.
xxx
At the same time, Section 16 of the Salary Standardization Law

expressly repealed all laws, decrees, executive orders, corporate
charters, and other issuances or parts thereof that exempted
government agencies, including GOCCs and GFIs from the
coverage of the new Compensation and Position Classification

System:
Sec. 16. Repeal of Special Salary Laws and Regulations.—All laws,

decrees, executive orders, corporate charters, and other issuances or parts
thereof, that exempt agencies from the coverage of the System, or that
authorize and fix position classification, salaries, pay rates or allowances of
specified positions, or groups of officials and employees or of agencies,
which are inconsistent with the System,
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VOL. 446, DECEMBER 15, 2004 461

including the proviso under Section 2, and Section 16 of Presidential Decree

No. 985 are hereby repealed.
Thus, all exemptions from the integrated Compensation

Classification System granted prior to the effectivity of6 the Salary
7
Standardization Law, including those under Sections 2 and 16 of
Presidential Decree No. 985 (the Old Salary
_______________
6 Sec. 2. Declaration of Policy.—It is hereby declared to be the policy of the

national government to provide equal pay for substantially equal work and to base
differences in pay upon substantive differences in duties and responsibilities, and
qualification requirements of the positions. In determining rates of pay, due regard
shall be given to, among others, prevailing rates in private industry for comparable
work. For this purpose, there is hereby established a system of compensation
standardization and position classification in the national government for all
departments, bureaus, agencies, and offices including government-owned or
controlled corporations and financial institutions: Provided, That notwithstanding a
standardized salary system established for all employees, additional financial
incentives may be established by government corporation and financial institutions
for their employees to be supported fully from their corporate funds and for such
technical positions as may be approved by the President in critical government
agencies. (Italics supplied)
7 SECTION 16. Compensation Committees.—Subject to the approval of the
President, compensation committees may be created under the leadership of the
Commissioner of the Budget whose purposes shall be to recommend on compensation
standards, policies, rules and regulations that shall apply to critical government
agencies, including those of government-owned or controlled corporations and
financial institutions. For purposes of compensation standardization, corporations
may be grouped into financial institutions, industrial, commercial, service or
development corporations. The OCPC shall provide secretariat assistance to the
compensation committees, and shall be responsible for implementing and enforcing
all compensation policies, rules and regulations adopted. Salary expenditures in all
agencies of the national government, including those of the government-owned or

controlled corporations and financial institutions shall conform to policies to be laid
down by the
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Pilipinas
Standardization Law) as well as 8

under the respective GOCC and
GFI charters, were repealed,
9
subject to the non-diminution
provision of Section 12. As a result, the general rule is that all
government employees, including employees of GOCCs and GFIs,
are covered by the Compensation Classification System provided for
by the Salary Standardization Law.
Nonetheless, Congress acknowledged the need of GOCCs and
GFIs performing proprietary functions to maintain competitive
salaries comparable to the private sector with respect to key top-level
positions in order not to lose these personnel to the private sector.
Thus, Section 9 of the Salary Standardization Law empowers the
President, in truly exceptional cases, to approve higher
compensation, exceeding Salary Grade 30, to the chairman,
president, general manager, and the board of
_______________
Budget Commission in consultation with the heads of the agencies and

corporations concerned and which policies, upon prior approval by the President,
shall be monitored and implemented through its Office of Compensation and Position
Classification. (Italics supplied)
8 Vide Philippine Ports Authority v. Commission on Audit, supra at p. 662;
Philippine International Trading Corp. v. Commission on Audit, 309 SCRA 177, 190-
192 (1999); Social Security System v. Commission on Audit, 384 SCRA 548, 555-559
(2002).
9 SECTION 12. Consolidation of Allowances and Compensation.—All
allowances, except for representation and transportation allowances; clothing and
laundry allowances; subsistence allowance of marine officers and crew on board
government vessels and hospital personnel; hazard pay; allowances of foreign service
personnel stationed abroad; and such other additional compensation not otherwise
specified herein as may be determined by the DBM, shall be deemed included in the
standardized salary rates herein prescribed. Such other additional compensation,
whether in cash or in kind, being received by incumbents only as of July 1, 1989
not integrated into the standardized salary rates shall continue to be authorized.
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Pilipinas
directors of government-owned or controlled corporations and

financial institutions:
SECTION 9. Salary Grade Assignments for Other Positions.—For positions

below the Officials mentioned under Section 8 hereof and their equivalent,
whether in the National Government, local government units, government-
owned or controlled corporations or financial institutions, the Department of
Budget and Management is hereby directed to prepare the Index of
Occupational Services to be guided by the Benchmark Position Schedule
prescribed hereunder and the following factors: (1) the education and
experience required to perform the duties and responsibilities of the
positions; (2) the nature and complexity of the work to be performed; (3) the
kind of supervision received; (4) mental and/or physical strain required in
the completion of the work; (5) nature and extent of internal and external
relationships; (6) kind of supervision exercised; (7) decision-making
responsibility; (8) responsibility for accuracy of records and reports; (9)
accountability for funds, properties and equipment; and (10) hardship,
hazard and personal risk involved in the job.
xxx
In no case shall the salary of the chairman, president, general
manager or administrator, and the board of directors of government-
owned or controlled corporations and financial institutions exceed
Salary Grade 30: Provided, That the President may, in truly exceptional
cases, approve higher compensation for the aforesaid officials. (Emphasis
and italics supplied)
On July 3, 1993, Republic Act No. 7653, The New Central Bank
Act, took effect. Section 15 (c) thereof authorizes the Monetary
Board of the Bangko Sentral ng Pilipinas (BSP) to institute a
compensation structure based on job evaluation studies and wage
surveys as an integral component of the BSP’s human resource
development program, thereby implicitly providing for a wider
scope of exemption from the Compensation Classification System
than that found in the last paragraph of Section 9 of the Salary
Standardization Law, to wit:
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Pilipinas
SEC. 15. Exercise of Authority.—In the exercise of its authority, the

Monetary Board shall;
xxx
personnel. Such system shall aim to establish professionalism and
excellence at all levels of the Bangko Sentral in accordance with sound
principles of management.
surveys and subject to the Board’s approval, shall be instituted as an
integral component of the Bangko Sentral’s human resource
development program: Provided, That the Monetary Board shall make its
own system conform as closely as possible with the principles provided for
under Republic Act No. 6758. Provided, however, That compensation
and wage structure of employees whose positions fall under salary
grade 19 and below shall be in accordance with the rates prescribed
under Republic Act No. 6758. (Emphasis supplied; italics in the original)
However, the last proviso of Section 15 (c) expressly provides that

the compensation and wage structure of employees whose positions
fall under Salary Grade (SG) 19 and below shall, like all other
government employees, be in accordance with the rates prescribed
under the Salary Standardization Law.
Thus, on account of the above-quoted provision, BSP rank and
file employees with (SG) 19 and below, like their counterparts in the
other branches of the civil service, are paid in accordance with the
rates prescribed in the New Salary Scale under the Salary
Standardization Law, while officers with SG 20 and above are
exempt from the coverage of said law, they being paid 10
pursuant to
the New Salary Scale containing Salary Grades A to J issued by the
Monetary Board which took effect on January 1, 2000.
_______________
10 Rollo at p. 6.
z
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The Case for the Petitioner

The Central Bank (now Bangko Sentral ng Pilipinas) Employees
Association, Inc., via the instant petition for prohibition filed on
June 8, 2001, seeks to prohibit herein respondents BSP and the
Executive Secretary of the Office of the President from further
implementing the last proviso of Chapter I, Article II, Section 15 (c)
of The New Central Bank Act, which it11 assails as unconstitutional

for violating the equal protection clause, hence, null and void.
It is petitioner’s allegation that the application of the
Compensation Classification System under the Salary
Standardization Law to the rank and file employees, but not the
BSP’s officers, would violate the equal protection clause as the
former are placed in a less favorable position compared to the latter.
Petitioner asserts that the classification of BSP employees into
two classes based solely on the SG of their positions is not based on
substantial distinctions which make real differences. For, so
petitioner contends, all BSP personnel are similarly situated since,
regardless of the salary grade, they are appointed by the Monetary
Board and required to possess civil service eligibilities, observe the
same office rules and regulations, and work at the same national or
regional offices, and, even if their individual duties differ, directly or
indirectly their work 12would still pertain to the operation and
functions of the BSP. More specifically, it argues that there is
“nothing between SGs 19 and 20 that should warrant the
_______________
11 CONST., Art. III, see. 1, viz.:
Section 1. No person shall be deprived of life, liberty, or property without due process of law,
nor shall any person be denied the equal protection of the laws. (Emphasis supplied)
12 Rollo at pp. 6-7.
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parting of the BSP ‘Red Sea’ of civil servants 13

into two distinct
camps of the privileged and the less privileged.”
Petitioner further submits that the personnel of the Government
Service Insurance System (GSIS), Land Bank of the Philippines
(LBP), Development Bank of the Philippines (DBP) and the Social
Security System (SSS) are all exempted from the coverage of the
Salary Standardization Law. Thus, within the class of rank and file
personnel of government financial institutions,
14
the BSP rank and file
personnel are also discriminated upon.
The Case for Respondent Executive Secretary

On the other hand, respondent Executive Secretary, through the
Solicitor General, contends that the assailed proviso does not violate
the equal protection clause. He submits that the classification of BSP
employees relative to compensation, structure is based on actual and
real differentiation between employees

15
exercising managerial
functions and the rank and file, even as it strictly adheres to the
enunciated policy in The New Central Bank Act to establish
professionalism and excellence within the BSP 16
subject to prevailing
laws and policies of the national government.
In addition, he notes that Article II, Section 15 (c) serves as an
exemption to the Salary Standardization Law which, for all intents
and purposes is a general law applicable to all government
employees. As such, the provision exempting certain 17
BSP
employees from its coverage must be strictly construed.
_______________
13 Id., at p. 7.
14 Id., at pp. 12-13.
15 Id., at p. 83.
16 Id., at pp. 79-80.
17 Id., at p. 84.
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The Case for Respondent Bangko Sentral

Likewise advancing the view that the assailed proviso is
constitutional, respondent BSP argues that Congress, in passing the
New Central Bank Act, has in fact determined that there are
substantial reasons for classifying BSP employees into those
covered by the Salary Standardization
18
Law and those not covered by
the Salary Standardization Law.
However, BSP additionally claims that while the assailed proviso
is constitutional, the manner by which it is implemented
19
may give
rise to the question of constitutional infirmity. It thus proffers that
the assailed provision should be interpreted together with the other
provisions of The New Central Bank Act, such as that vesting it with
“fiscal and administrative autonomy” and that directing the
Monetary Board to “establish professionalism and excellence in20 all
levels in accordance with sound principles of management.” It
concludes that the assailed provision does not adopt provisions of
the Salary Standardization Law in their entirety, but refers only to
the basic pay of the employees and does not cover other benefits21
which it (the BSP) may deem necessary to grant its employees.
Admittedly, the BSP Monetary Board has endeavored to grant
additional allowances to the “rank and file” so that they may be
given substantially similar benefits being enjoyed by the officers.
The Commission on Audit (COA), however, disallowed these

additional allowances on the ground that the grant of the same
violates the provisions 22of the Salary Standardization Law and The
New Central Bank Act.
_______________
18 Id., at p. 65.
19 Id., at p. 63.
20 Ibid.
21 Id., at p. 69.
22 Id., at pp. 69-70.
468

Pilipinas
Issues for Resolution

In essence, petitioner asserts that its members are similarly situated
to both the executive/officer corps of the BSP and the rank and file
employees of the LBP, DBP, SSS and GSIS such that the operation
of the equal protection guaranty in either case would entitle them to
be placed under a compensation and position classification system
outside of that mandated by the Salary Standardization Law.
Clearly, the resolution of the instant petition hinges on a
determination of whether the right of petitioner’s members to the
equal protection of the laws has been violated by (a) the
classification in The New Central Bank Act between the executive
personnel (those with SG 20 and above), who are exempt from the
Compensation Classification System mandated under the Salary
Standardization Law, and the rank and file employees (those with
SG 19 and below) who are covered by the latter; and/or (b) the
disparity in treatment between the rank and file employees of the
BSP and the rank and file employees of the LBP, DBP, SSS and
GSIS, who were subsequently exempted from said Compensation
Classification System by their amended charters.
Put differently, the instant Petition presents two principal issues
for resolution: (1) whether the distinction between managerial and
rank and file employees in The New Central Bank Act partakes of
an invidious discrimination proscribed by the equal protection
clause; and (2) whether, by operation of the equal protection clause,
the rank and file employees of the BSP are entitled to exemption
from the Compensation Classification System mandated under the
Salary Standardization Law as a consequence of the exemption of
the rank and file employees of the LBP, DBP, SSS and GSIS.
Standards for Equal Protection Analysis

Before proceeding to resolve these issues, it may serve the ends of
clarity to first review the basic framework by which
469
VOL. 446, DECEMBER 15, 2004 469

Pilipinas
the courts analyze challenges to the constitutionality of statutes as

well as the standards by which compliance with the equal protection
clause may be determined.
Presumption of Constitutionality
It is a basic axiom of constitutional law that all presumptions are
indulged in favor of constitutionality and a liberal interpretation of
the constitution in favor of the constitutionality of legislation should
be adopted. Thus, if any reasonable basis may be conceived which
supports the statute, the same should be upheld. Consequently, the
burden is squarely on the shoulders of the one alleging
unconstitutionality to prove invalidity beyond a reasonable doubt by
negating23
all possible bases for24 the constitutionality of a
statute. Verily, to doubt is to sustain.
The rationale for this presumption in favor of constitutionality
and the corresponding restraint on the part of the judicial branch was25
expounded upon by Justice Laurel in the case of People v. Vera,
viz.:
This court is not unmindful of the fundamental criteria in cases of this

nature that all reasonable doubts should be resolved in favor of the
constitutionality of a statute. An act of the legislature approved by the
executive, is presumed to be within constitutional limitations. The
responsibility of upholding the Constitution rests not on the courts alone but
on the legislature as well. “The question of the validity of every statute is
first determined by the legislative department of the government itself.”
(U.S. vs. Ten Yu [1912], 24 Phil. 1, 10; Case vs. Board of Health and Heiser
[1913], 24 Phil. 250, 276; U.S. vs. Joson [1913], 26 Phil. 1.) And a statute
finally comes before the courts sustained by the sanction of the execu-
_______________
23 Victoriano v. Elizalde Rope Workers’ Union, 59 SCRA 54, 66 (1974).

24 Philippine Judges Association v. Prado, 227 SCRA 703, 706 (1993); Basco v. Phil.
Amusements and Gaming Corp., 191 SCRA 57, 68-69 (1991).
25 65 Phil. 56 (1937).
470

tive. The members of the Legislature and the Chief Executive have
taken an oath to support the Constitution and it must be presumed that
they have been true to this oath and that in enacting and sanctioning a
particular law they did not intend to violate the Constitution. The
courts cannot but cautiously exercise its power to overturn the solemn
declarations of two of the three grand departments of the government.
(6 R. C. L., p. 101.) Then, there is that peculiar political philosophy which
bids the judiciary to reflect the wisdom of the people as expressed through
an elective Legislature and an elective Chief Executive. It follows,
therefore, that the courts will not set aside a law as violative of the
Constitution except in a clear26 case. This is a proposition too plain to
require a citation of authorities. (Emphasis and italics supplied)
Indeed, it 27has been observed that classification is the essence of

legislation. On this point, the observation of the United States
Supreme Court in the recent
28
case of Personnel Administrator of
Massachusetts v. Feeney is illuminating:
The equal protection guarantee of the Fourteenth Amendment does not take
from the States all power of classification. Most laws classify, and many
affect certain groups unevenly, even though the law itself treats them no
differently from all other members of the class described by the law.
When the basic classification is rationally based, uneven effects upon
particular groups within a class are ordinarily of no constitutional concern.
The calculus of effects, the manner in which a particular law
reverberates in a society is a legislative and not a judicial responsibility.
In assessing an equal protection challenge, a court is called upon only to
measure the basic validity of the legislative classification. When some
other independent right is not at stake and when there is no “reason to
infer antipathy,” it is presumed that “even improvident decisions will
eventually
_______________
26 Id., at p. 95; vide Angara v. Electoral Commission, 63 Phil. 139, 159 (1936).
27 Vide Sison v. Ancheta, 130 SCRA 654, 662-663 (1984); Tolentino v. Secretary of Finance,
249 SCRA 628, 663-664 (1995).
28 442 U.S. 256 (1979).
471
VOL. 446, DECEMBER 15, 2004 471

29
29
be rectified by the democratic process . . .” (Emphasis supplied; citations
omitted)
Hence, in enacting laws, the legislature is accorded the widest scope

of discretion within the bounds of the Constitution; and the courts, in
exercising their power of judicial review, do not inquire into the
wisdom of the law. On this point,
30
this Court in Ichong, etc., et al. v.
Hernandez, etc., and Sarmiento, stated:
e. Legislative discretion not subject to judicial review.—

Now, in this matter of equitable balancing, what is the proper place and
role of the courts? It must not be overlooked, in the first place, that the
legislature, which is the constitutional repository of police power and
exercises the prerogative of determining the policy of the State, is by
force of circumstances primarily the judge of necessity, adequacy or
reasonableness and wisdom, of any law promulgated in the exercise of
the police power, or of the measures adopted to implement the public
policy or to achieve public interest. On the other hand, courts, although
zealous guardians of individual liberty and right, have nevertheless
evinced a reluctance to interfere with the exercise of the legislative
prerogative. They have done so early where there has been a clear,
patent or palpable arbitrary and unreasonable abuse of the legislative
prerogative. Moreover, courts are not supposed to override31 legitimate
policy, and courts never inquire into the wisdom of the law. (Emphasis
supplied)
Only by faithful adherence to this principle of judicial review is it

possible to preserve to the legislature 32
its prerogatives under the
Constitution and its ability to function.
_______________
29 Id., at pp. 271-272.

30 101 Phil. 1155 (1957).
31 Id., at 1165-1166.
32 Vide Carmichael v. Southern Coal & Coke, 301 U.S. 495, 510 (1937);
Lehnhausen v. Lake Shore Auto Parts Co., 410 U.S. 356, 365 (1973).
472

Pilipinas
The presumption of constitutionality notwithstanding, the courts are

nevertheless duty bound to strike down any statute which transcends
the bounds of the Constitution including any classification which is
proven to be unreasonable, arbitrary, capricious or oppressive.
The question that arises then is by what standard(s) should the

reasonableness, and therefore the validity, of a legislative
classification be measured?
The Rational Basis Test

It may be observed that, in the Philippines, the traditional and oft-
applied standard is the so-called “rational basis test,” the requisites
of which were first summarized by33 Justice (later Chief Justice)
Moran in the case of People v. Cayat, to wit:
It is an established principle of constitutional law that the guaranty of the

equal protection of the laws is not violated by a legislation based on
reasonable classification. And the classification, to be reasonable, (1)
must rest on substantial distinctions; (2) must be germane to the
purposes of the law; (3) must not be limited to existing conditions
34
only;
and (4) must apply equally to all members of the same class. (Emphasis
supplied; citations omitted)
To the foregoing may be added the following 35observations of the

Court in Philippine Judges Association v. Prado, to wit:
The equal protection of the laws is embraced in the concept of due process,
as every unfair discrimination offends the requirements of justice and fair
play. It has nonetheless been embodied in a separate clause in Article III
Sec. 1, of the Constitution to provide for a more specific guaranty against
any form of undue favoritism or
_______________
33 68 Phil. 12 (1939).
34 Id., at p. 18.
35 Supra.
473
VOL. 446, DECEMBER 15, 2004 473

hostility from the government. Arbitrariness in general may be challenged

on the basis of the due process clause. But if the particular act assailed
partakes of an unwarranted partiality or prejudice, the sharper weapon to cut
it down is the equal protection clause.
According to a long line of decisions, equal protection simply requires
that all persons or things similarly situated should be treated alike, both
as to rights conferred and responsibilities imposed. Similar subjects, in
other words, should not be treated differently, so as to give undue favor
to some and unjustly discriminate against others.
The equal protection clause does not require the universal
application of the laws on all persons or things without distinction. This
might in fact sometimes result in unequal protection, as where, for

example, a law prohibiting mature books to all persons, regardless of age,
would benefit the morals of the youth but violate the liberty of adults. What
the clause requires is equality among equals as determined according to
a valid classification. By classification is meant the grouping of persons
or things similar to each other in certain 36
particulars and different from
all others in these same particulars. (Emphasis supplied; footnotes
omitted)
The Rational Basis Test has been described as adopting a

“deferential” attitude towards legislative classifications. As
previously discussed, this “deference” comes from the recognition
that classification is often an unavoidable element of the task of
legislation which, under the separation of powers embodied in our
Constitution, is primarily the prerogative of Congress.
Indeed, in the United States, from where the equal protection
provision of our Constitution has its roots, the Rational Basis Test
remains a primary standard for evaluating the constitutionality of a
statute.
Thus, in Lying v. International Union, United Automobile,
Aerospace and Agricultural Implement Workers of America,
_______________
36 Id., at pp. 711-712.
474

Pilipinas
37
UAW, where a statute providing that no household may become
eligible to participate in the food stamp program while any of its
members are on strike, or receive an increase in the allotment of
food stamps already being received because the income of the
striking member has decreased, the U.S. Supreme Court held:
Because the statute challenged here has no substantial impact on any

fundamental interest and does not “affect with particularity any
protected class,” we confine our consideration to whether the statutory
classification is “rationally related to a legitimate governmental
interest.” We have stressed that this standard of review is typically quite
deferential; legislative classifications are “presumed to be valid,” largely
for the reason that “the drawing of lines that create distinctions is
peculiarly a legislative task and unavoidable one.”
xxx
We have little trouble in concluding that § 109 is rationally related to the

legitimate governmental objective of avoiding undue favoritism to one side
or the other in private labor disputes. The Senate Report declared: “Public
policy demands an end to the food stamp subsidization of all strikers who
become eligible for the program solely through the temporary loss of
income during a strike. Union strike funds should be responsible for
providing support and benefits to strikers during labor-management
disputes.” It was not part of the purposes of the Food Stamp Act to establish
a program that would serve as a weapon in labor disputes; the Act was
passed to alleviate hunger and malnutrition and to strengthen the
agricultural economy. The Senate Report stated that “allowing strikers to be
eligible for food stamps has damaged the program’s public integrity” and
thus endangers these other goals served by the program. Congress acted in
response to these problems.
xxx
It is true that in terms of the scope and extent of their ineligibility for
food stamps, § 109 is harder on strikers than on “voluntary quitters.” But the
concern about neutrality in labor disputes does not
_______________
37 485 U.S. 360 (1988).
475
VOL. 446, DECEMBER 15, 2004 475

arise with respect to those who, for one reason or another, simply quit their
jobs. As we have stated in a related context, even if the statute “provides
only ‘rough justice,’ its treatment ... is far from irrational.” Congress need
not draw a statutory classification to the satisfaction of the most sharp-
eyed observers in order to meet the limitations that the Constitution
imposes in this setting. And we are not authorized to ignore Congress’
considered efforts to avoid favoritism in labor disputes, which are
evidenced also by the two significant provisos contained in the statute.
The first proviso preserves eligibility for the program of any household that
was eligible to receive stamps “immediately prior to such strike.” The
second proviso makes clear that the statutory ineligibility for food stamps
does not apply “to any household that does not contain a member on strike,
if any of its members refuses to accept employment at a plant or site
because of a strike or lockout.” In light of all this, the statute is rationally
related to38 the stated objective of maintaining neutrality in private labor
disputes. (Emphasis and italics supplied; citations and footnotes omitted)
More recently, the American Court summarized the principles

behind the application of the Rational Basis Test in its jurisdiction in
Federal
39
Communications Commission v. Beach Communications,
Inc., as follows:
Whether embodied in the Fourteenth Amendment or inferred from the Fifth,

equal protection is not a license for courts to judge the wisdom,
fairness, or logic of legislative choices. In areas of social and economic
policy, a statutory classification that neither proceeds along suspect
lines nor infringes fundamental constitutional rights must be upheld
against equal protection challenge if there is any reasonably conceivable
state of facts that could provide a rational basis for the classification.
See Sullivan v. Stroop, 496 U.S. 478, 485, 110 S.Ct. 2499, 2504, 110 L.Ed.2d
438 (1990); Bowen v. Gilliard, 483 U.S. 587, 600-603, 107 S.Ct. 3008,
3016-3018, 97 L.Ed.2d 485 (1987); United States Railroad Retirement Bd.
v. Fritz, 449 U.S. 166, 174-179, 101 S.Ct. 453, 459-462, 66 L.Ed.2d 368
(1980); Dandridge v. Williams,
_______________
38 Id., at pp. 370-373.

39 508 U.S. 307 (1993).
476

397 U.S. 471, 484-485, 90 S.Ct. 1153, 1161, 25 L.Ed.2d 491 (1970). Where
there are “plausible reasons” for Congress’ action, “our inquiry is at an
end.” United States Railroad Retirement Bd. v. Fritz, supra, 449 U.S., at
179, 101 S.Ct, at 461. This standard of review is a paradigm of judicial
restraint. “The Constitution presumes that, absent some reason to infer
antipathy, even improvident decisions will eventually be rectified by the
democratic process and that judicial intervention is generally
unwarranted no matter how unwisely we may think a political branch has
acted.” Vance v. Bradley, 440 U.S. 93, 97, 99 S.Ct. 939, 942-943, 59
L.Ed.2d 171 (1979).
On rational-basis review, a classification in a statute such as the Cable
Act comes to us bearing a strong presumption of validity, see Lyng v.
Automobile Workers, 485 U.S. 360, 370, 108 S.Ct. 1184, 1192, 99 L.Ed.2d
380 (1988), and those attacking the rationality of the legislative
classification have the burden “to negative every conceivable basis
which might support it.” Lehnhausen v. Lake Shore Auto Parts Co., 410
U.S. 356, 364, 93 S.Ct. 1001, 1006, 35 L.Ed.2d 351 (1973) (internal
quotation marks omitted). See also Hodel v. Indiana, 452 U.S. 314, 331-332,
101 S.Ct. 2376, 2387, 69 L.Ed.2d 40 (1981). Moreover, because we never
require a legislature to articulate its reasons for enacting a statute, it is
entirely irrelevant for constitutional purposes whether the conceived reason
for the challenged distinction actually motivated the legislature. United
States Railroad Retirement Bd. v. Fritz, supra, 449 U.S., at 179, 101 S.Ct., at
461. See Flemming v. Nestor, 363 U.S. 603, 612, 80 S.Ct. 1367, 1373, 4
L.Ed.2d 1435 (1960). Thus, the absence of “ ‘legislative facts’ ” explaining
the distinction “[o]n the record,” 294 U.S.App.D.C, at 389, 959 F.2d, at 987,
has no significance in rational-basis analysis. See Nordlinger v. Hahn, 505
U.S. 1, 15, 112 S.Ct. 2326, 2334, 120 L.Ed.2d 1 (1992). In other words, a
legislative choice is not subject to courtroom fact-finding and may be based
on rational speculation unsupported by evidence or empirical data. See
Vance v. Bradley, supra, 440 U.S., at 111, 99 S.Ct., at 949, See also
Minnesota v. Clover Leaf Creamery Co., 449 U.S. 456, 464, 101 S.Ct. 715,
723, 66 L.Ed.2d 659 (1981). “ ‘Only by faithful adherence to this guiding
principle of judicial review of legislation is it possible to preserve to the
legislative branch its rightful independence and its ability to function.’ ”
Lehnhausen, supra, 410 U.S., at 365, 93 S.Ct., at 1006 (quoting
477
VOL. 446, DECEMBER 15, 2004 477

Carmichael v. Southern Coal & Coke Co., 301 U.S. 495, 510, 57 S.Ct. 868,
872, 81 L.Ed. 1245 (1937).
These restraints on judicial review have added force “where the
legislature must necessarily engage in a process of line-drawing.” United
States Railroad Retirement Bd. v. Fritz, 449 U.S., at 179, 101 S.Ct, at 461.
Defining the class of persons subject to a regulatory requirement—
much like classifying governmental beneficiaries—“inevitably requires
that some persons who have an almost equally strong claim to favored
treatment be placed on different sides of the line, and the fact [that] the
line might have been drawn differently at some points is a matter for
legislative, rather than judicial, consideration.” Ibid. (internal quotation
marks and citation omitted). The distinction at issue here represents such a
line: By excluding from the definition of “cable system” those facilities that
serve commonly owned or managed buildings without using public rights-
of-way, § 602(7)(B) delineates the bounds of the regulatory field. Such
scope-of-coverage provisions are unavoidable components of most
economic or social legislation. In establishing the franchise requirement,
Congress had to draw the line somewhere; it had to choose which facilities
to franchise. This necessity renders the precise coordinates of the resulting
legislative judgment virtually unreviewable, since the legislature must be
allowed leeway to approach a perceived problem incrementally. See, e.g.,
Williamson v. Lee Optical of Okla., Inc., 348 U.S. 483, 75 S.Ct. 461, 99
L.Ed. 563 (1955):
“The problem of legislative classification is a perennial one, admitting of no

doctrinaire definition. Evils in the same field may be of different dimensions
and proportions, requiring different remedies. Or so the legislature may think.
Or the reform may take one step at a time, addressing itself to the phase of the
problem which seems most acute to the legislative mind. The legislature may
select one phase of one field and apply a remedy there, neglecting the others.
The prohibition of the Equal Protection Clause goes no further than the
40
invidious discrimination.” (Emphasis and italics supplied; footnotes omitted)
_______________
40 Id., at pp. 313-316.
478

Pilipinas
Deferential or not, in the Philippines, the Rational Basis Test has

proven to be an effective tool 41for curbing invidious discrimination.
Thus, in People v. Vera, this Court held as unconstitutional
Section 11 of Act No. 4221, which provided that the Probation Law
“shall apply only in those provinces in which the respective
provincial boards have provided for the salary of a probation officer42
at rates not lower than those now provided for provincial fiscals.”
The Court held that the challenged provision was an undue
delegation of legislative power since it left the operation or non-
operation of the law entirely up to the absolute and unlimited (and43
therefore completely arbitrary) discretion of the provincial boards.
The Court went on to demonstrate that this unwarranted delegation
of legislative power created “a situation 44in which discrimination and
inequality [were] permitted or allowed” since “a person otherwise
coming within the purview of the law would be liable to enjoy the
benefits of probation in one province while another person similarly 45
situated in another province would be denied those same benefits,”
despite the absence of substantial differences germane to the purpose
of the law. For this reason the questioned provision was also held
unconstitutional
46
and void for being repugnant to the equal protection
clause. 47
In Viray v. City of Caloocan, the Court invalidated on equal
protection grounds, among others, an Ordinance providing for the
collection of “entrance fees” for cadavers coming from outside
Caloocan City for burial in private cemeteries within the city. The
city government had sought to justify the
_______________
41 Supra.
42 Id., at p. 115.
43 Id., at p. 120.
44 Id., at p. 127.
45 Id., at p. 126.
46 Id., at p. 129.
47 20 SCRA 791 (1967).
479
VOL. 446, DECEMBER 15, 2004 479

Pilipinas
fees as an exercise of police power claiming that policemen using

the city’s motorcycles or cars had to be assigned to escort funeral48
processions and reroute traffic to minimize public inconvenience.
This Court, through Justice J.B.L. Reyes held that:
While undeniably the above-described activity of city officers is called for

by every funeral procession, yet we are left without explanation why the
Ordinance should collect the prescribed fees solely in the case of cadavers
coming from places outside the territory of Caloocan City for burial in
private cemeteries within the City. Surely, whether the corpse comes from
without or within the City limits, and whether interment is to be made in
private or public cemeteries, the City police must regulate traffic, and must
use their City cars or motorcycles to maintain order; and the City streets
must suffer some degree of erosion. Clearly, then, the ordinance in question
does unjustifiably discriminate against private cemeteries, in violation of the
equal protection clause of the Constitution,
49
a defect adequate to invalidate
the questioned portion of the measure. (Italics in the original)
50
In Philippine Judges Association
51
v. Prado, this Court ruled that
Section 35 of R.A.
52
No. 7354, withdrawing the franking privileges
of the Judiciary but retaining the same
_______________
48 Id., at p. 796.
49 Id., at pp. 796-797.
50 Supra.
51 “AN ACT CREATING THE PHILIPPINE POSTAL CORPORATION,
DEFINING ITS POWER, FUNCTIONS AND RESPONSIBILITIES, PROVIDING
FOR REGULATION OF THE INDUSTRY AND FOR OTHER PURPOSES
CONNECTED THEREWITH.”
52 Id., at p. 711; the privilege was also withdrawn from the Office of Adult
Education; the Institute of National Language; the Telecommunications Office; the
Philippine Deposit Insurance Corporation; the National Historical Commission; the
Armed Forces of the Philippines; the Armed Forces of the Philippines Ladies Steering
Committee; the City and Provincial Prosecutors; the Tanodbayan (Office of Special
Prosecutor); the Kabataang Barangay; the Com-
480

Pilipinas
for the President, the Vice-President, 53Senators and Members of the

House of Representatives, and others, violated the equal protection
clause. In analyzing the questioned legislative classification, the
Court concluded that the only reasonable criteria for classification
vis-à-vis the grant of the franking privilege was “the perceived need
of the grantee for the accommodation, which would justify a waiver
of substantial revenue by the Corporation in the interest of providing
for a smoother
54
flow of communication between the government and
the people.” The Court then went on to state that:
Assuming that basis, we cannot understand why, of all the departments of

the government, it is the Judiciary that has been denied the franking
privilege. There is no question that if there is any major branch of the
government that needs the privilege, it is the Judicial Department, as the
respondents themselves point out. Curiously, the respondents would justify
the distinction on the basis precisely of this need and, on this basis, deny the
Judiciary the franking privilege while extending it to others less deserving.
xxx
In lumping the Judiciary with the other offices from which the franking
privilege has been withdrawn, Section 35 has placed the courts of justice in
a category to which it does not belong. If it recognizes the need of the
President of the Philippines and the members of Congress for the franking
privilege, there is no reason why it should not recognize a similar and in fact
greater need on the part of the Judiciary for such privilege. While we may
appreciate the withdrawal of the franking privilege from the Armed Forces
of the Philippines Ladies Steering Committee, we fail to understand why the
_______________
mission on the Filipino Language; the Provincial and City Assessors; and the National
Council for the Welfare of Disabled Persons.
53 Ibid. The franking privilege was also retained for the Commission on Elections; former
Presidents of the Philippines; widows of former Presidents of the Philippines; the National
Census and Statistics Office; and the general public in the filing of complaints against public
offices or officers violated the guaranty of equal protection.
54 Id., at p. 713.
481
VOL. 446, DECEMBER 15, 2004 481

Supreme Court should be similarly treated as that Committee. And while we

may concede the need of the National Census and Statistics Office for the
franking privilege, we are intrigued that a similar if not greater need is not
recognized in the courts of justice.
xxx
We are unable to agree with the respondents that Section 35 of R.A. No.
7354 represents a valid exercise of discretion by the Legislature under the
police power. On the contrary, we find its repealing clause to be a
discriminatory provision that denies the Judiciary the equal protection of the
laws guaranteed for all persons or things similarly situated. The distinction
made by the law is superficial. It is not based on substantial distinctions that
make real differences between the Judiciary and the grantees of the franking
privilege.
This is not a question of wisdom or power into which the Judiciary may
not intrude. It is 55a matter of arbitrariness that this Court has the duty and
power to correct.
More recently,56
in Government Service Insurance System v.
Montesclaros, 57 this Court ruled that the proviso in Section 18 of
P.D. No. 1146, which prohibited a dependent spouse from receiving
survivorship pension if such dependent spouse married the pensioner
within three years before the pensioner qualified for the pension,
was unconstitutional for, among others, violating the equal
protection clause. Said the Court:
The surviving spouse of a government employee is entitled to receive

survivor’s benefits under a pension system. However, statutes sometimes
require that the spouse should have married the employee for a certain
period before the employee’s death to prevent sham marriages contracted
for monetary gain. One example is the Illinois Pension Code which restricts
survivor’s annuity benefits to a surviving spouse who was married to a state
employee for at least one year before the employee’s death. The Illinois
pension system classifies spouses into those married less than one year
before a member’s death and those married one year or more. The
classifica-
_______________
55 Id., at pp. 713-715.

56 G.R. No. 146494, July 14, 2004, 434 SCRA 441.
57 The Revised Government Service Insurance Act of 1977.
482

tion seeks to prevent conscious adverse risk selection of deathbed marriages

where a terminally ill member of the pension system marries another so that
person becomes eligible for benefits. In Sneddon v. The State Employee’s
Retirement System of Illinois, the Appellate Court of Illinois held that such
classification was based on difference in situation and circumstance, bore a

rational relation to the purpose of the statute, and was therefore not in
violation of constitutional guarantees of due process and equal protection.
A statute based on reasonable classification does not violate the
constitutional guaranty of the equal protection of the law. The requirements
for a valid and reasonable classification are: (1) it must rest on substantial
distinctions; (2) it must be germane to the purpose of the law; (3) it must not
be limited to existing conditions only; and (4) it must apply equally to all
members of the same class. Thus, the law may treat and regulate one class
differently from another class provided there are real and substantial
differences to distinguish one class from another.
The proviso in question does not satisfy these requirements. The proviso
discriminates against the dependent spouse who contracts marriage to the
pensioner within three years before the pensioner qualified for the pension.
Under the proviso, even if the dependent spouse married the pensioner more
than three years before the pensioner’s death, the dependent spouse would
still not receive survivorship pension if the marriage took place within three
years before the pensioner qualified for pension. The object of the
prohibition is vague. There is no reasonable connection between the means
employed and the purpose intended. The law itself does not provide any
reason or purpose for such a prohibition. If the purpose of the proviso is to
prevent “deathbed marriages” then we do not see why the proviso reckons
the three-year prohibition from the date the pensioner qualified for pension
and not from the date the pensioner died. The classification does not rest on
substantial distinctions. Worse, the classification lumps all those marriages
contracted within three years before the pensioner qualified for pension as
having been contracted primarily for financial convenience to avail of
pension benefits. (Footnotes omitted)
Even in the American context, the application of the “deferential”

Rational Basis Test has not automatically resulted in the affirmation
of the challenged legislation.
483
VOL. 446, DECEMBER 15, 2004 483

Pilipinas
58
Thus, in City of Cleburne Texas v. Cleburne Living Center, a city’s
zoning ordinance requiring a special permit for the operation of a
group home for the mentally retarded was challenged on equal
protection grounds. The American Court, ruling that the Rational
Basis Test was applicable and limiting itself to the facts of the
particular case, held that there was no rational basis for believing
that the mentally retarded condition of those living in the affected
group home posed any special threat to the city’s legitimate interests
any more than those living in boarding houses, nursing homes and
hospitals, for which no special permit was required. Thus, it

concluded, the permit
59
requirement violated the respondent’s right to
equal protection.
_______________
58 473 U.S. 432 (1985).

59 The U.S. Supreme Court stated:
The constitutional issue is clearly posed. The city does not require a special use permit in an R-
3 zone for apartment houses, multiple dwellings, boarding and lodging houses, fraternity or
sorority houses, dormitories, apartment hotels, hospitals, sanitariums, nursing homes for
convalescents or the aged (other than for the insane or feebleminded or alcoholics or drug
addicts), private clubs or fraternal orders, and other specified uses. It does, however, insist on a
special permit for the Featherston home, and it does so, as the District Court found, because it
would be a facility for the mentally retarded. May the city require the permit for this facility
when other care and multiple-dwelling facilities are freely permitted?
It is true, as already pointed out, that the mentally retarded as a group are indeed different
from others not sharing their misfortune, and in this respect they may be different from those
who would occupy other facilities that would be permitted in an R-3 zone without a special
permit. But this difference is largely irrelevant unless the Featherston home and those who
would occupy it would threaten legitimate interests of the city in a way that other permitted
uses such as boarding houses and hospitals would not. Because in our view the record does not
reveal any rational basis for believing that the Featherston home would pose any special threat
to the city’s legiti-
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60
And, in Romer v. Evans, the U.S. Supreme Court invalidated
Amendment 2 of the Colorado State Constitution which precluded
all legislative, executive, or judicial action at any level of state or
local government designed to protect the status of persons based61 on
their homosexual orientation, conduct, practices or relationships.
_______________
mate interests, we affirm the judgment below insofar as it holds the ordinance invalid as
applied in this case.
xxx
The short of it is that requiring the permit in this case appears to us to rest on an irrational
prejudice against the mentally retarded, including those who would occupy the Featherston
facility and who would live under the closely supervised and highly regulated conditions
expressly provided for by state and federal law. (At pp. 447-450; citations omitted)
60 517 U.S. 620 (1996).
61 The U.S. Supreme Court explained the reasons for its decision in this wise:
x x x Amendment 2, however, in making a general announcement that gays and lesbians shall
not have any particular protections from the law, inflicts on them immediate, continuing, and
real injuries that outrun and belie any legitimate justifications that may be claimed for it. We
conclude that, in addition to the far-reaching deficiencies of Amendment 2 that we have noted,
the principles it offends, in another sense, are conventional and venerable; a law must bear a
rational relationship to a legitimate governmental purpose, and Amendment 2 does not.
The primary rationale the State offers for Amendment 2 is respect for other citizens’
freedom of association, and in particular the liberties of landlords or employers who have
personal or religious objections to homosexuality. Colorado also cites its interest in conserving
resources to fight discrimination against other groups. The breadth of the amendment is so far
removed from these particular justifications that we find it impossible to credit them. We
cannot say that Amendment 2 is directed to any identifiable legitimate purpose or discrete
objective. It is a status-based enactment divorced from any fac-
485
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Strict Scrutiny
While in the Philippines the Rational Basis Test has, so far, served as
a sufficient standard for evaluating governmental actions against the
Constitutional guaranty of equal protection, the American Federal
Supreme Court, as pointed out in the main opinion, has developed a
more demanding standard as a complement to the traditional
deferential test, which it applies in certain well-defined
circumstances. This more demanding standard is often referred to as
Strict Scrutiny.
Briefly stated, Strict Scrutiny is applied when the challenged
statute either (1) classifies on the basis of an inherently suspect62
characteristic or (2) infringes fundamental constitutional rights.
With respect to such classifications, the usual presumption of
constitutionality is reversed, and it is incumbent upon the
government to demonstrate that its classification has63been narrowly
tailored to further compelling governmental interests, otherwise the
law shall be declared unconstitutional for being violative of the
Equal Protection Clause.
The central purpose of the Equal Protection Clause was to
eliminate racial discrimination emanating from official
_______________
tual context from which we could discern a relationship to legitimate state interests; it is a
classification of persons undertaken for its own sake, something the Equal Protection Clause
does not permit. “[C]lass legislation . . . [is] obnoxious to the prohibitions of the Fourteenth
Amendment . . . .”
We must conclude that Amendment 2 classifies homosexuals not to further a proper
legislative end but to make them unequal to everyone else. This Colorado cannot do. A State
cannot so deem a class of persons a stranger to its laws. Amendment 2 violates the Equal
Protection Clause, and the judgment of the Supreme Court of Colorado is affirmed. (At 631-
636; citations omitted)
62 Plyler v. Doe, 457 U.S. 202, 216-217 (1982); Clements v. Fashing, 457 U.S.
957, 963 (1982).
63 Mclaughlin v. State of Florida, 379 U.S. 184, 196 (1964).
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64
sources in the States. Like other rights guaranteed by the post-Civil
War Amendments, the Equal Protection Clause (also known as the
Fourteenth Amendment) was motivated in large part by a desire to
protect the civil rights of African-Americans recently freed from
slavery. Thus, initially, the U.S. Supreme Court attempted to limit
the scope of the Equal Protection65
Clause to discrimination claims
66
brought by African-Americans. In Strauder v. West Virginia, the
American Supreme Court in striking down a West Virginia statute
which prohibited a “colored man” from serving in a jury, traced the
roots of the Equal Protection Clause:
This is one of a series of constitutional provisions having a common

purpose; namely, securing to a race recently emancipated, a race that
through many generations had been held in slavery, all the civil rights that
the superior race enjoy. The true spirit and meaning of the amendments, as
we said in the Slaughter-House Cases (16 Wall. 36), cannot be understood
without keeping in view the history of the times when they were adopted,
and the general objects they plainly sought to accomplish. At the time when
they were incorporated into the Constitution, it required little knowledge of
human nature to anticipate that those who had long been regarded as an
inferior and subject race would, when suddenly raised to the rank of
citizenship, be looked upon with jealousy and positive dislike, and that State
laws might be enacted or enforced to perpetuate the distinctions that had
before existed. x x x To quote the language used by us in the Slaughter-
House Cases, “No one can fail to be impressed with the one pervading
purpose found in all the amendments, lying at the foundation of each, and
without which none of them would have been suggested,—we mean the
freedom of the slave race, the security and firm establishment of that
freedom, and the protection of the newly made freeman and citizen from the
oppressions of those
_______________
64 Loving v. Commonwealth of Virginia, 388 U.S. 1, 10 (1967); Shaw v. Reno, 509 U.S. 630,
642 (1993); Adarand Constructors, Inc. v. Pena, 515 U.S. 200, 216 (1995); Shaw v. Hunt, 517
U.S. 899, 907 (1996).
65 O. STEPHENS & J. SCHEB II, AMERICAN CONSTITUTIONAL LAW 737 (2nd Ed.,
1999).
66 100 U.S. 303 (1879).
487
VOL. 446, DECEMBER 15, 2004 487

who had formerly exercised unlimited dominion over them.” So again: “The
existence of laws in the States where the newly emancipated negroes
resided, which discriminated with gross injustice and hardship against them
as a class, was the evil to be remedied, and by it [the Fourteenth
Amendment] such laws were forbidden. If, however, the States did not
conform their laws to its requirements, then, by the fifth section of the
article of amendment, Congress was authorized to enforce it by suitable
legislation.” And it was added, “We doubt very much whether any action of
a State, not directed by way of discrimination against the negroes, as a class,
will ever be held to come within the purview of this provision.”
x x x It ordains that no State shall deprive any person of life, liberty, or
property, without due process of law, or deny to any person within its
jurisdiction the equal protection of the laws. What is this but declaring that
the law in the States shall be the same for the black as for the white; that all
persons, whether colored or white, shall stand equal before the laws of the
States, and, in regard to the colored race, for whose protection the
amendment was primarily designed, that no discrimination shall be made
against them by law because of their color? The words of the amendment, it
is true, are prohibitory, but they contain a necessary implication of a positive
immunity, or right, most valuable to the colored race,—the right to
exemption from unfriendly legislation against them distinctively as colored,
—exemption from legal discriminations, implying inferiority in civil
society, lessening the security of their enjoyment of the rights which others
enjoy, and discriminations which are steps towards reducing them to the
condition of a subject race.
That the West Virginia statute respecting juries-the statute that controlled
the selection of the grand and petit jury in the case of the plaintiff in error—
is such a discrimination ought not to be doubted. Nor would it be if the
persons excluded by it were white men. If in those States where the colored
people constitute a majority of the entire population a law should be enacted
excluding all white men from jury service, thus denying to them the
privilege of participating equally with the blacks in the administration of
justice, we apprehend no one would be heard to claim that it would not be a
denial to white men of the equal protection of the laws. Nor if a law should
be passed excluding all naturalized Celtic Irishmen, would there by any

doubt of its inconsistency with the spirit of the amendment. The very fact
that colored people are singled out and expressly denied by a statute all right
to participate in the administration of
488

the law, as jurors, because of their color, though they are citizens, and may
be in other respects fully qualified, is practically a brand upon them, affixed
by the law, an assertion of their inferiority, and a stimulant to that race
prejudice which is an impediment to securing to individuals67
of the race that
equal justice which the law aims to secure to all others.
Over the years however, the Equal Protection Clause has been
applied against unreasonable
68
governmental discrimination directed
at any identifiable group. In what Laurence H. Tribe and Michael
C. Dorf
69
call the most famous footnote in American constitutional
70
law, Justice Stone in U.S. v. Carolene Products Co. maintained
that state-sanctioned discriminatory practices against discrete and
insular minorities are entitled to a diminished presumption of
constitutionality:
x x x the existence of facts supporting the legislative judgment is to be

presumed, for regulatory legislation affecting ordinary commercial
transactions is not to be pronounced unconstitutional unless in the light of
the facts made known or generally assumed it is of such a character as to
preclude the assumption that it rests upon some rational basis within the
knowledge and experience of the legislators. [FN4] x x x
FN4 There may be narrower scope for operation of the presumption of

constitutionality when legislation appears on its face to be within a specific
prohibition of the Constitution, such as those of the first ten Amendments,
which are deemed equally specific when held to be embraced within the
Fourteenth. See Stromberg v. California, 283 U.S. 359, 369, 370, 51 S.Ct. 532, 535,
536, 75 L.Ed. 1117, 73 A.L.R. 1484; Lovell v. Griffin, 303 U.S. 444, 58 S.Ct. 666, 82
L.Ed. 949, decided March 28, 1938.
_______________
67 Id., at pp. 303, 306-310.

68 O. STEPHENS & J. SCHEB II, AMERICAN CONSTITUTIONAL LAW 738
(2nd Ed., 1999).
69 L. TRIBE & M. DORF, ONREADING THE CONSTITUTION 72 (1991).
70 304 U.S. 144 (1938).
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It is unnecessary to consider now whether legislation which restricts those

political processes which can ordinarily be expected to bring about repeal of
undesirable legislation, is to be subjected to more exacting judicial scrutiny
under the general prohibitions of the Fourteenth Amendment than are most
other types of legislation. On restrictions upon the right to vote, see Nixon v.
Herndon, 273 U.S. 536, 47 S.Ct. 446, 71 L.Ed. 759; Nixon v. Condon, 286
U.S. 73, 52 S.Ct. 484, 76 L.Ed. 984, 88 A.L.R. 458; on restraints upon the
dissemination of information, see Near v. Minnesota, 283 U.S. 697, 713—
714, 718-720, 722, 51 S.Ct. 625, 630, 632, 633, 75 L.Ed. 1357; Grosjean v.
American Press Co., 297 U.S. 233, 56 S.Ct. 444, 80 L.Ed. 660; Lovell v.
Griffin, supra; on interferences with political organizations, see Stromberg v.
California, supra, 283 U.S. 359, 369, 51 S.Ct. 532, 535, 75 L.Ed. 1117, 73
A.L.R. 1484; Fiske v. Kansas, 274 U.S. 380, 47 S.Ct. 655, 71 L.Ed. 1108;
Whitney v. California, 274 U.S. 357, 373-378, 47 S.Ct. 641, 647, 649, 71
L.Ed. 1095; Herndon v. Lowry, 301 U.S. 242, 57 S.Ct. 732, 81 L.Ed. 1066;
and see Holmes, J., in Gitlow v. New York, 268 U.S. 652, 673, 45 S.Ct. 625,
69 L.Ed. 1138; as to prohibition of peaceable assembly, see De Jonge v.
Oregon, 299 U.S. 353, 365, 57 S.Ct. 255, 260, 81 L.Ed. 278.
Nor need we enquire whether similar considerations enter into the review
of statutes directed at particular religious, Pierce v. Society of Sisters, 268
U.S. 510, 45 S.Ct. 571, 69 L.Ed. 1070, 39 A.L.R. 468, or national, Meyer v.
Nebraska, 262 U.S. 390, 43 S.Ct. 625, 67 L.Ed. 1042, 29 A.L.R. 1446;
Bartels v. Iowa, 262 U.S. 404, 43 S.Ct. 628, 67 L.Ed. 1047; Farrington v.
Tokushige, 273 U.S. 284, 47 S.Ct. 406, 71 L.Ed. 646, or racial minorities.
Nixon v. Herndon, supra; Nixon v. Condon, supra; whether prejudice
against discrete and insular minorities may be a special condition, which
tends seriously to curtail the operation of those political processes
ordinarily to be relied upon to protect minorities, and which may call for a
correspondingly more searching judicial inquiry. Compare McCulloch v.
Maryland, 4 Wheat. 316, 428, 4 L.Ed. 579; South Carolina State Highway
Department v. Barnwell Bros., 303 U.S.
490

177, 58 S.Ct.
71
510, 82 L.Ed. 734, decided February 14, 1938, note 2, and
cases cited. (Emphasis and italics supplied)
The 72use of the term “suspect”

73
originated in the case of Korematsu v.
U.S. In Korematsu, the American Supreme Court upheld the
constitutionality of Civilian Exclusion Order No. 34 of the
Commanding General of the Western Command, U.S. Army, which
directed that all persons of Japanese ancestry should be excluded

from San Leandro California, a military area, beginning May 9,
1942. However, in reviewing the validity of laws which employ race
as a means of classification, the Court held:
It should be noted, to begin with, that all legal restrictions which curtail the
civil rights of a single racial group are immediately suspect. That is not to
say that all such restrictions are unconstitutional. It is to say that courts
must subject them to the most rigid scrutiny. Pressing public necessity
may sometimes
74
justify the existence of such restrictions; racial antagonism
never can. (Emphasis and italics supplied)
Racial classifications are generally thought to be “suspect” because

throughout the United States’ history these have generally been used
to discriminate officially against groups which are politically75
subordinate and subject to private prejudice and discrimination.
Thus, the U.S. Supreme Court has “consistently repudiated
distinctions between citizens solely because of their ancestry as
being odious to a free people
76
whose institutions are founded upon
the doctrine of equality.” The underly-
_______________
71 Id., at p. 153
72 J. NOWAK & R. ROTUNDA, CONSTITUTIONAL LAW 576 (4th Ed., 1991).
73 323 U.S. 214 (1944).
74 Id., at p. 216.
75 Developments in the Law—Equal Protection, 82 HARV. L. REV. 1065, 1107-
1108 (1969).
76 Loving v. Commonwealth of Virginia, 388 U.S. 1, 11 (1967); Wygant v. Jackson
Board of Education, 476 U.S. 267, 273 (1986).
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ing rationale of the suspect classification theory is that where

legislation affects discrete and insular minorities, the presumption of
constitutionality fades 77
because traditional political processes may
have broken down. Moreover, classifications based on race,
alienage or national origin are so seldom relevant to the achievement
of any legitimate state interest that laws grounded on such
considerations are deemed to reflect prejudice and antipathy—a
view that 78those in the burdened class are not as worthy or deserving
as others.
Almost three decades after Korematsu, in the landmark 79

case of
San Antonio Independent School District v. Rodriguez, the U.S.
Supreme Court in identifying a “suspect class” as a class saddled
with such disabilities, or subjected to such a history of purposeful
unequal treatment, or relegated to such a position of political
powerlessness as to command extraordinary
80
protection from the
majoritarian political process, articulated that suspect
classifications were not limited to classifications based on race,
alienage or national
81
origin but could also be applied to other criteria
such as religion.
_______________
77 Johnson v. Robison, 415 U.S. 361, 375 (1974).

78 City of Cleburne, Texas v. Cleburne Living Center, 413 U.S. 432, 440 (1985).
79 411 U.S. 1 (1973).
80 Id., at p. 28 (1973). The definition was reiterated in Matthews v. Lucas, 427 U.S.
495, 506 (1976).
81 In City of New Orleans v. Dukes, 427 U.S. 297, 303 (1976), the U.S. Supreme
Court said:
When local economic regulation is challenged solely as violating the Equal Protection Clause,
this Court consistently defers to legislative determinations as to the desirability of particular
statutory discriminations. See, E.g., Lehnhausen v. Lake Shore Auto Parts Co., 410 U.S. 356,
93 S.Ct. 1001, 35 L.Ed.2d 351 (1973). Unless a classification trammels fundamental personal
rights or is drawn upon inherently suspect distinctions such as race, religion, or alienage,
our decisions presume the constitutionality of the statutory discriminations and require only
that the classification challenged be rationally related to a legitimate state interest . . .
(Emphasis and Italics supplied)
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Thus, the U.S. Supreme Court has ruled that suspect classifications
deserving
82
of Strict
83
Scrutiny include
84
those based on race or national
origin, alienage and religion while classifications
_______________
82 Grutter v. Bollinger, 539 U.S. 306, 326 (2003).
We have held that all racial classifications imposed by government “must be analyzed by a
reviewing court under strict scrutiny.” Ibid. This means that such classifications are
constitutional only if they are narrowly tailored to further compelling governmental interests.
“Absent searching judicial inquiry into the justification for such race-based measures,” we have
no way to determine what “classifications are ‘benign’ or ‘remedial’ and what classifications
are in fact motivated by illegitimate notions of racial inferiority or simple racial politics.”
Richmond v. J.A. Croson Co., 488 U.S. 469, 493, 109 S.Ct. 706, 102 L.Ed.2d 854 (1989)
(plurality opinion). We apply strict scrutiny to all racial classifications to ‘smoke out’
illegitimate uses of race by assuring that [government] is pursuing a goal important enough to
warrant use of a highly suspect tool.” Ibid. (Emphasis and underscoring supplied)
83 In re Griffiths, 413 U.S. 717, 721-724 (1973).
The Court has consistently emphasized that a State which adopts a suspect classification
‘bears a heavy burden of justification,’ McLaughlin v. Florida, 379 U.S. 184, 196, 85 S.Ct
283, 290, 13 L.Ed.2d 222 (1964), a burden which, though variously formulated, requires the
State to meet certain standards of proof. In order to justify the use of a suspect classification, a
State must show that its purpose or interest is both constitutionally permissible and substantial,
and that its use of the classification is ‘necessary . . . to the accomplishment’ of its purpose or
the safeguarding of its interest.
Resident aliens, like citizens, pay taxes, support the economy, serve in the Armed
Forces, and contribute in myriad other ways to our society. It is appropriate that a State
bear a heavy burden when it deprives them of employment opportunities. (Emphasis and
italics supplied)
84 In Larson v. Valente, 456 U.S. 228, 246 (1982), the Supreme Court through
Justice Brennan held that the Minnesota statute, in imposing certain registration and
reporting requirements upon only those religious organizations that solicit more than
50% of their funds from nonmembers discriminates against such organizations in
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85 86 87
based on gender, illegitimacy, financial need, conscien-
_______________
violation of the establishment clause of the First Amendment. In so doing, the

Court said:
Since Everson v. Board of Education, 330 U.S. 1, 67 S.Ct. 504, 91 L.Ed. 711 (1947), this Court
has adhered to the principle, clearly manifested in the history and logic of the Establishment
Clause, that no State can “pass laws which aid one religion” or that “prefer one religion over
another.” Id., at pp. 15, 67 S.Ct., at 511. This principle of denominational neutrality has been
restated on many occasions. In Zorach v. Clauson, 343 U.S. 306, 72 S.Ct. 679, 96 L.Ed. 954
(1952), we said that “[t]he government must be neutral when it comes to competition between
sects.” Id., at 314, 72 S.Ct., at 684. In Epperson v. Arkansas, 393 U.S. 97, 89 S.Ct. 266, 21
L.Ed.2d 228 (1968), we stated unambiguously: “The First Amendment mandates governmental
neutrality between religion and religion . . . . The State may not adopt programs or practices . . .
which ‘aid or oppose’ any religion . . . . This prohibition is absolute.” Id., at pp. 104, 106, 89
S.Ct., at 270, 271, citing Abington School District v. Schempp, 374 U.S. 203, 225, 83 S.Ct.
1560, 1573, 10 L.Ed.2d 844 (1963). And Justice Goldberg cogently articulated the relationship
between the Establishment Clause and the Free Exercise Clause when he said that “[t]he fullest
realization of true religious liberty requires that government . . . effect no favoritism among
sects . . . and that it work deterrence of no religious belief.” Abington School District, supra, at
305, 81 S.Ct., at 1615. In short, when we are presented with a state law granting a
denominational preference, our precedents demand that we treat the law as suspect and
that we apply strict scrutiny in adjudging its constitutionality. (Emphasis and italics supplied)
While the Court viewed the case from perspective of the Non-Establishment Clause of the
First Amendment, the principles on Equal Protection would also apply since the Non-
Establishment Clause stripped to its bare essentials is in reality merely a more specific type of
equal protection clause but with regards to religion.
85 See discussion on the Intermediate Scrutiny Test.

86 Ibid.
87 Maher v. Roe, 432 U.S. 464, 470-471 (1977).
This case involves no discrimination against a suspect class. An indigent woman desiring
an abortion does not come within the limited category of disadvantaged classes
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88 89
tious objection and age have been held not to constitute suspect
classifications.
_______________
so recognized by our cases. Nor does the fact that the impact of the regulation falls upon those
who cannot pay lead to a different conclusion. In a sense, every denial of welfare to an indigent
creates a wealth classification as compared to nonindigents who are able to pay for the desired
goods or services. But this Court has never held that financial need alone identifies a suspect
class for purposes of equal protection analysis. See Rodriguez, supra, 411 U.S. at 29, 93 S.Ct.,
at 1294; Dandridge v. Williams, 397 U.S. 471, 90 SCt 1153, 25 L.Ed.2d 491 (1970). (Emphasis
and italics supplied).
88 Johnson v. Robison, 415 U.S. 361, 375 (1974), footnote number 14, states:
Appellee argues that the statutory classification should be subject to strict scrutiny and upheld
only if a compelling governmental justification is demonstrated because (1) the challenged
classification interferes with the fundamental constitutional right to the free exercise of
religion, and (2) I—O conscientious objectors are a suspect class deserving special judicial
protection. We find no merit in either contention. Unquestionably, the free exercise of religion
is a fundamental constitutional right. However, since we hold in Part III, infra, that the Act
does not violate appellee’s right of free exercise of religion, we have no occasion to apply to
the challenged classification a standard of scrutiny stricter than the traditional rational-basis
test. With respect to appellee’s second contention, we find the traditional indicia of
suspectedness lacking in this case. The class does not possess an ‘immutable characteristic
determined solely by the accident of birth,’ Frontiero v. Richardson, 411 U.S., at 686, 93
S.Ct., at 1770, nor is the class ‘saddled with such disabilities, or subjected to such a history
of purposeful unequal treatment, or relegated to such a position of political powerlessness
as to command extraordinary protection from the majoritarian political process,’ San
Antonio Independent School District v. Rodriguez, 411 U.S. 1, 28, 93 S.Ct. 1278, 1298, 36
L.Ed.2d 16 (1973). (Emphasis and italics supplied)
89 Massachusetts Board of Retirement v. Murgia, 427 U.S. 307, 313-314 (1976).
Nor does the class of uniformed state police officers over 50 constitute a suspect class for
purposes of equal protection analysis. Rodriguez, supra, 411 U.S. at 28, 93 S.Ct. at 1294,
observed that a
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As priorly mentioned, the application of Strict Scrutiny has not been

limited to statutes which proceed along suspect lines but has been
utilized on statutes infringing upon fundamental constitutionally
protected rights. Most fundamental rights cases decided in the
United States require equal protection analysis because these cases
would involve a review of statutes which classify persons and
impose differing restrictions on the ability
90
of a certain class of
persons to exercise a fundamental right. Fundamental rights include
only those basic liberties
91
explicitly or implicitly guaranteed by the
U.S. Constitution. And precisely because these statutes affect,
fundamental liberties, any experiment involving basic freedoms
_______________
suspect class is one “saddled with such disabilities, or subjected to such a history of purposeful
unequal treatment, or relegated to such a position of political powerlessness as to command
extraordinary protection from the majoritarian political process.” While the treatment of the
aged in this Nation has not been wholly free of discrimination, such persons, unlike, say, those
who have been discriminated against on the basis of race or national origin, have not
experienced a “history of purposeful unequal treatment” or been subjected to unique disabilities
on the basis of stereotyped characteristics not truly indicative of their abilities. The class
subject to the compulsory retirement feature of the Massachusetts statute consists of uniformed
state police officers over the age of 50. It cannot be said to discriminate only against the
elderly. Rather, it draws the line at a certain age in middle life. But even old age does not define
a “discrete and insular” group, United States v. Carolene Products Co., 304 U.S. 144, 152-153,
n. 4, 58 S.Ct. 778, 783, 82 L.Ed. 1234 (1938), in need of “extraordinary protection from the
majoritarian political process.” Instead, it marks a stage that each of us will reach if we live out
our normal span. Even if the statute could be said to impose a penalty upon a class defined as
the aged, it would not impose a distinction sufficiently akin to those classifications that we have
found suspect to call for strict judicial scrutiny. (Emphasis and italics supplied)
90 J. NOWAK 7 R. ROTUNDA, CONSTITUTIONAL LAW 577 (4th Ed., 1991).

91 San Antonio Independent School District v. Rodriguez, 411 U.S. 1, 17 (1973);
Plyler v. Doe, 457 U.S. 202, 218 (1982).
496

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which the legislature conducts must be critically examined under the

lens of Strict Scrutiny.
Fundamental rights 92
which give rise to
93
Strict Scrutiny include the
right of procreation, the right to marry, the right to
_______________
92 Skinner v. State of Oklahoma ex rel. Williamson, 316 U.S. 535, 541 (1942).
But the instant legislation runs afoul of the equal protection clause, though we give Oklahoma
that large deference which the rule of the foregoing cases requires. We are dealing here with
legislation which involves one of the basic civil rights of man. Marriage and procreation are
fundamental to the very existence and survival of the race. The power to sterilize, if exercised,
may have subtle, far reaching and devastating effects. In evil or reckless hands it can cause
races or types which are inimical to the dominant group to wither and disappear. There is no
redemption for the individual whom the law touches. Any experiment which the State conducts
is to his irreparable injury. He is forever deprived of a basic liberty. We mention these matters
not to reexamine the scope of the police power of the States. We advert to them merely in
emphasis of our view that strict scrutiny of the classification which a State makes in a
sterilization law is essential, lest unwittingly or otherwise invidious discriminations are
made against groups or types of individuals in violation of the constitutional guaranty of
just and equal laws . . . (Emphasis and italics supplied)
93 Loving v. Commonwealth of Virginia, 388 U.S. 1, 12 (1967).
Marriage is one of the ‘basic civil rights of man,’ fundamental to our very existence and
survival. Skinner v. State of Oklahoma, 316 U.S. 535, 541, 62 S.Ct. 1110, 1113, 86 L.Ed. 1655
(1942). See also Maynard v. Hill, 125 U.S. 190, 8 S.Ct. 723, 31 L.Ed. 654 (1888). To deny this
fundamental freedom on so unsupportable a basis as the racial classifications embodied in these
statutes, classifications so directly subversive of the principle of equality at the heart of the
Fourteenth Amendment, is surely to deprive all the State’s citizens of liberty without due
process of law. The Fourteenth Amendment requires that the freedom of choice to marry not be
restricted
497
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exercise First Amendment freedoms such 94

as free speech, political
95
expression, press, assembly, and so forth, the right to travel,
_______________
by invidious racial discriminations. Under our Constitution, the freedom to marry or not marry,
a person of another race resides with the individual and cannot be infringed by the State.
(Emphasis and italics supplied)
94 Austin v. Michigan Chamber of Commerce, 494 U.S. 652, 666 (1990).
Because the right to engage in political expression is fundamental to our constitutional system,
statutory classifications impinging upon that right must be narrowly tailored to serve a
compelling governmental interest. Police Department of Chicago v. Mosley, 408 U.S. 92, 101,
92 S.Ct. 2286, 2293, 33 L.Ed.2d 212 (1972). We find that, even under such strict scrutiny, the
statute’s classifications pass muster under the Equal Protection Clause. As we explained in the
context of our discussions of whether the statute was overinclusive, supra, at 1397-1398, or
underinclusive, supra, at 1400-1401, the State’s decision to regulate only corporations is
precisely tailored to serve the compelling state interest of eliminating from the political process
the corrosive effect of political “war chests” amassed with the aid of the legal advantages given
to corporations. (Emphasis and italics supplied)
95 Attorney General of New York v. Soto-Lopez, 476 U.S. 898, 903-904 (1986).
A state law implicates the right to travel when it actually deters such travel, see, e.g., Crandall
v. Nevada, supra, at 46; see also Shapiro, supra 394 U.S., at 629, 89 S.Ct., at 1328, when
impeding travel is its primary objective, see Zobel supra 457 U.S., at 62, n. 9, 102 S.Ct., at
2314, n. 9; Shapiro, supra 394 U.S., at 628-631, 89 S.Ct., at 1328-1329, or when it uses “ ‘any
classification which serves to penalize the exercise of that right.’ ” Dunn, supra 405 U.S., at
340, 92 S.Ct., at 1002 (quoting Shapiro, supra 394 U.S., at 634, 89 S.Ct., at 1331). Our right-
to-migrate cases have principally involved the latter, indirect manner of burdening the right.
More particularly, our recent cases have dealt with state laws that, by classifying residents
according to the time they established residence, re-
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96
and the right to vote.
_______________
sulted in the unequal distribution of rights and benefits among otherwise qualified bona fide
residents. Hooper, supra; Zobel v. Williams, 457 U.S. 55, 102 S.Ct. 2309, 72 L.Ed.2d 672
(1982); Sosna v. Iowa, 419 U.S., 393, 95 S.Ct. 553, 42 L.Ed.2d 532 (1975); Memorial Hospital,
supra; Dunn v. Blumstein, 405 U.S. 330, 92 S.Ct. 995, 31 L.Ed.2d 274 (1972); Shapiro, supra.
Because the creation of different classes of residents raises equal protection concerns, we
have also relied upon the Equal Protection Clause in these cases. Whenever a state law
infringes a constitutionally protected right, we undertake intensified equal protection scrutiny
of that law. See, e.g., Cleburne v. Cleburne Living Center, Inc., 473 U.S. 432, 440, 105 S.Ct.
3249, 3254, 87 L.Ed.2d 313 (1985); Martinez v. Bynum, 461 U.S. 321, 328, n. 7, 103 S.Ct.
1838, 1842, n. 7, 75 L.Ed.2d 879 (1983); Plyler v. Doe, 457 U.S. 202, 216-217 and n. 15, 102
S.Ct. 2382, 2394-2395 and n. 15, 72 L.Ed.2d 786 (1982); Memorial Hospital, supra 415 U.S.,
at 258, 262, 94 S.Ct., at 1082, 1084; San Antonio Independent School District v. Rodriguez, 411
U.S. 1, 16 and n. 39, 30-32, 40, 93 S.Ct. 1278, 1287 and n. 39, 1295-1296, 1300, 36 L.Ed.2d 16
(1973); Police Dept. of Chicago v. Mosley, 408 U.S. 92, 101, 92 S.Ct. 2286, 2293, 33 L.Ed.2d
212 (1972); Dunn, supra 405 U.S., at 335, 342, 92 S.Ct., at 999, 1003; Shapiro, supra 394
U.S., at 634, 89 S.Ct., at 1331. Thus, in several cases, we asked expressly whether the
distinction drawn by the State between older and newer residents burdens the right to
migrate. Where we found such a burden, we required the State to come forward with a
compelling justification. See, e.g., Shapiro, supra; Dunn, supra; Memorial Hospital v.
Maricopa County, 415 U.S. 250, 94 S.Ct. 1076, 39 L.Ed.2d 306 (1974)... (Emphasis and italics
supplied)
96 Kramer v. Union Free School District No. 15, 395 U.S. 621 (1969).
‘In determining whether or not a state law violates the Equal Protection Clause, we must
consider the facts and circumstances behind the law, the interests which the State claims to be
protecting, and the interests of those who are disadvantaged by the classification.’ Williams v.
Rhodes, 393 U.S.
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Because Strict Scrutiny involves statutes which either classifies on

the basis of an inherently suspect characteristic or infringes
fundamental constitutional rights, the presumption of
constitutionality is reversed; that is, such legislation is assumed to be
unconstitutional until the government demonstrates otherwise. The
government must show that the statute is supported by a compelling
governmental interest and the 97
means chosen to accomplish that
interest are narrowly tailored. Gerald Gunther explains as follows:
. . . The intensive review associated with the new equal protection imposed
two demands a demand not only as to means but also as to
_______________
23, 30, 89 S.Ct. 5, 10, 21 L.Ed.2d 24 (1968). And, in this case, we must give the statute a close and
exacting examination. ‘(S)ince the right to exercise the franchise in a free and unimpaired manner is
preservative of other basic civil and political rights, any alleged infringement of the right of citizens
to vote must be carefully and meticulously scrutinized.’ Reynolds v. Sims, 377 U.S. 533, 562, 84 S.Ct.
1362, 1381, 12 L.Ed.2d 506 (1964). See Williams v. Rhodes, supra, 393 U.S. at 31, 89 S.Ct, at 10;
Wesberry v. Sanders, 376 U.S. 1, 17, 84 S.Ct. 526, 535, 11 L.Ed.2d 481 (1964). This careful examination
is necessary because statutes distributing the franchise constitute the foundation of our representative
society. Any unjustified discrimination in determining who may participate in political affairs or in the
selection of public officials undermines the legitimacy of representative government.
x x x Statutes granting the franchise to residents on a selective basis always pose the danger of denying
some citizens any effective voice in the governmental affairs which substantially affect their lives.
Therefore, if a challenged state statute grants the right to vote to some bona fide residents of requisite age
and citizenship and denies the franchise to others, the Court must determine whether the exclusions are
necessary to promote a compelling state interest. See Carrington v. Rash, supra, 380 U.S., at 96, 85 S.Ct.,
at 780. (Emphasis and italics supplied)
97 Adarand Constructors, Inc. v. Peña, 515 U.S. 200, 235 (1995).
500

ends. Legislation qualifying for strict scrutiny required a far closer fit
between classification and statutory purpose than the rough and ready
flexibility traditionally tolerated by the old equal protection: means had to
be shown “necessary” to achieve statutory ends, not merely “reasonably
related.” Moreover, equal protection became a source of ends scrutiny as
well: legislation in the areas of the new equal protection had to be justified
by “compelling” state98 interests, not merely the wide spectrum of
“legitimate” state ends.
Furthermore, the legislature must adopt the least burdensome or

least drastic
99
means available for achieving the governmental
objective.
While Strict Scrutiny has, as yet, not found widespread
application in this jurisdiction, the tenet that legislative
classifications involving fundamental rights require a more rigorous
justification under more stringent standards of100analysis has been
acknowledged in a number of Philippine cases. Since the United
States’ conception of the Equal Protection Clause was largely
influenced by its history of systematically discriminating along
racial lines, it is perhaps no surprise that the Philippines which does
not have any comparable experience has not found a similar
occasion to apply this particular American approach of Equal
Protection.
Intermediate Scrutiny
The Rational Basis Test and Strict Scrutiny form what Gerald
Gunther termed as the two-tier approach to equal protection analysis
—the first tier consisting of the Rational Basis Test (also called by
Gunther as the old equal protection) while
_______________
98 http://www.marquette.edu/polisci/wolfe/gunther.htm quoting excerpts from

Chapter 9 of G. GUNTHER, CONSTITUTIONAL LAW (12th Ed., 1991).
99 Gunther, Foreword: In Search of Evolving Doctrine on a Changing Court: A
Model for a Newer Equal Protection, 86 HARV. L. REV. 1, 21 (1972).
100 Vide Bautista v. Juinio, 121 SCRA 329, 341 (1984).
501
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the second tier consisting of 101

Strict Scrutiny (also called by Gunther
as the new equal protection). Gunther however described the two-
tier approach employed by the U.S. Supreme Court as being rigid,
criticizing the aggressive102
new equal protection for being “strict in
theory and fatal in fact”
_______________
101 Vide Gunther, Foreword: In Search of Evolving Doctrine on a Changing Court:

A Model for a Newer Equal Protection, 86 HARV. L. REV. 1 (1972).
102 To this observation, the U.S. Supreme Court in Adarand Constructors, Inc. v.
Peña (515 U.S. 200, 237 [1995]) said:
Finally, we wish to dispel the notion that strict scrutiny is “strict in theory, but fatal in fact.”
Fullilove, supra, at 519, 100 S.Ct., at 2795 (Marshall, J., concurring in judgment). The unhappy
persistence of both the practice and the lingering effects of racial discrimination against
minority groups in this country is an unfortunate reality, and government is not disqualified
from acting in response to it. As recently as 1987, for example, every Justice of this Court
agreed that the Alabama Department of Public Safety’s “pervasive, systematic, and obstinate
discriminatory conduct” justified a narrowly tailored race-based remedy. See United States v.
Paradise, 480 U.S., at 167, 107 S.Ct., at 1064 (plurality opinion of Brennan, J.); id., at 190,
107 S.Ct., at 1076 (STEVENS, J., concurring in judgment); id., at p. 196, 107 S.Ct., at 1079-
1080 (O’CONNOR, J., dissenting). When race-based action is necessary to further a
compelling interest, such action is within constitutional constraints if it satisfies the “narrow
tailoring” test this Court has set out in previous cases.
And in Grutter v. Bollinger (539 U.S. 306, 326-327 [2003]), the same Court said:
Strict scrutiny is not “strict in theory, but fatal in fact.” Adarand Constructors, Inc. v. Peña,
supra, at 237, 115 S.Ct. 2097 (internal quotation marks and citation omitted). Although all
governmental uses of race are subject to strict scrutiny, not all are invalidated by it. As we have
explained, “whenever the government treats any person unequally because of his or her race,
that person has suffered an injury that falls squarely within the language and spirit of the
Constitution’s guarantee of equal protection.” 515 U.S., at 229-230, 115
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and the deferential old equal protection

103
as “minimal scrutiny in
theory and virtually none in fact.”
Gunther’s sentiments were also shared by certain members of the
Burger Court, most notably Justice Marshall who advocated a
Sliding Scale Approach which he elaborated on in his dissenting 104
opinion in San Antonio Independent School District v. Rodriguez:
To begin, I must once more voice my disagreement with the Court’s

rigidified approach to equal protection analysis. See Dandridge v. Williams,
397 U.S. 471, 519-521, 90 S.Ct 1153, 1178-1180, 25 L.Ed.2d 491 (1970)
(dissenting opinion); Richardson v. Belcher, 404 U.S. 78, 90, 92 S.Ct. 254,
261, 30 L.Ed.2d 231 (1971) (dissenting opinion). The Court apparently
seeks to establish today that equal protection cases fall into one of two neat
categories which dictate the appropriate standard of review-strict scrutiny or
mere rationality. But this Court’s decisions in the field of equal protection
defy such easy categorization. A principled reading of what this Court has
done reveals that it has applied a spectrum of standards in reviewing
discrimination allegedly violative of the Equal Protection Clause. This
spectrum clearly comprehends variations in the degree of care with which
the Court will scrutinize particular classifications, depending, I believe, on
the constitutional and societal importance of the interest adversely affected
and the recognized invidiousness of the basis upon which the particular
classification is drawn. I find in fact that many of the Court’s recent
decisions embody the very sort of reasoned approach to equal protection
analysis for which I previously argued—that is, an approach in which
‘concentration (is)
_______________
S.Ct. 2097. But that observation “says nothing about the ultimate validity of any particular law; that
determination is the job of the court applying strict scrutiny.” Id., at p. 230, 115 S.Ct. 2097. When race-
based action is necessary to further a compelling governmental interest, such action does not violate the
constitutional guarantee of equal protection so long as the narrow-tailoring requirement is also satisfied.
103 Gunther, Foreword: In Search of Evolving Doctrine on a Changing Court: A Model for a
Newer Equal Protection, 86 HARV. L. REV. 1, 8 (1972).
104 411 U.S. 1 (1973).
503
VOL. 446, DECEMBER 15, 2004 503

placed upon the character of the classification in question, the relative

importance to individuals in the class discriminated against of the
governmental benefits that they do not receive, and the asserted state
interests in support of the classification.’ Dandridge v. Williams,
105
supra, 397
U.S., at 520-521, 90 S.Ct., at 1180 (dissenting opinion).
Shortly before his retirement in 1991, Justice Marshall suggested to

the Supreme Court that it adopt a 106Sliding Scale that would embrace
a spectrum of standards of review.
Other sources of discontent in the U.S. Supreme Court are Justice
Stevens who argues for a return to the Rational Basis Test which he
believes to be adequate to invalidate all invidious forms of
discrimination and Chief Justice Rehnquist who is disgruntled with
the Court’s107special solicitude for the claims of discrete and insular
minorities.
Yet, despite numerous criticisms from American legal luminaries,
the U.S. Supreme Court has not done away with the Rational Basis
Test and Strict Scrutiny as they continue to remain viable
approaches in equal protection analysis. On the contrary, the
American Court has developed yet a third tier of equal protection
review, falling between the Rational Basis Test and Strict Scrutiny—
Intermediate Scrutiny (also known as Heightened Scrutiny).
The U.S. Supreme Court has generally applied Intermediate or
Heightened Scrutiny when the challenged statute’s
108
classification is
based on either (1) gender or (2) illegitimacy.
Gender-based classifications are presumed unconstitutional as
such classifications generally provide no sensible ground for
differential treatment. In City of Cleburne, Texas
_______________
105 Id., at pp. 98-99.

106 O. STEPHENS & J. SCHEB II, AMERICAN CONSTITUTIONAL LAW 741
(2nd Ed., 1999).
107 Ibid.
108 Clark v. Jeter, 486 U.S. 456, 461 (1988).
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109
v. Cleburne Living Center, the United States Supreme Court said:
“[W]hat differentiates sex from such nonsuspect statuses as intelligence or

physical disability . . . is that the sex characteristic frequently bears no
relation to ability to perform or contribute to society.” Frontiero v.
Richardson, 411 U.S. 677, 686, 93 S.Ct. 1764, 1770, 36 L.Ed.2d 583 (1973)
(plurality opinion). Rather than resting on meaningful considerations,
statutes distributing benefits and burdens between the sexes in different

ways very likely
110
reflect outmoded notions of the relative capabilities of men
and women.
In the same manner, classifications based on illegitimacy are also

presumed unconstitutional as illegitimacy is beyond the individual’s
control and bears no relation111to the individual’s ability to participate
in and contribute to society. Similar to Strict Scrutiny, the burden
of justification
112
for the classification rests entirely on the
government. Thus, the government must show at least that the
statute serves an important purpose and that the discriminatory
means employed
113
is substantially related to the achievement of those
objectives.
Summary of the American Supreme Court Approach to Equal

Protection
In fine, the three standards currently employed by the U.S. Federal
Supreme Court for determining the constitutional validity of a
statutory classification
114
in the light of the equal protection clause may
be summarized as follows:
_______________
109 473 U.S. 432 (1985).

110 Id., at pp. 440-441.
111 Id., at p. 441.
112 Mississippi University for Women v. Hogan, 458 U.S. 718, 724 (1982).
113 U.S. v. Virginia, 518 U.S. 515, 533 (1996).
114 Vide City of Cleburne Texas v. Cleburne Living Center, supra at 441; Clark v.
Jeter, 486 U.S. 456, 461 (1988).
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Equal Protection Standards

Rational Basis Strict Intermediate
Scrutiny Scrutiny
Applicable Legislative Legislative Legislative
To classifications in classifications classifications
general, such as those affecting based on
pertaining to fundamental gender or
economic or social rights or illegitimacy
legislation, which do suspect
not affect fundamental classes.
rights or suspect
classes; or is not
based on gender or
illegitimacy.
Legislative Must be legitimate. Must be Must be
Purpose compelling. important.
Relationship Classification must be Classification Classification
of rationally related to must be must be
Classification the legislative necessary and substantially
to Purpose purpose. narrowly related to the
tailored to legislative
achieve the purpose.
legislative
purpose.
Appropriate Standard for Evaluating the Present Case

Which of the foregoing three standards should be applied in arriving
at a resolution of the instant petition?
Impropriety of a double standard for evaluating compliance with

the equal protection guaranty
As noted earlier, the main opinion, in arriving at its conclusion,

simultaneously makes use of both the Rational Basis Test and the
Strict Scrutiny Test. Thus, in assessing the va-
506

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lidity of the classification between executi0ve and rank and file

employees in Section 15 (c) of The New Central Bank Act, the
Rational Basis Test was applied. In evaluating the distinction
between the rank and file employees of the BSP and the rank and
file employees of the LBP, DBP, SSS and GSIS, the Strict Scrutiny
Test was employed.
Despite my best efforts, I fail to see the justification for the use of
this “double standard” in determining the constitutionality of the
questioned proviso. Why a “deferential test” for one comparison
(between the executives and rank and file of the BSP) and a “strict
test” for the other (between the rank and file of the BSP and the rank
and file of the other GOCCs/GFIs)?
As the preceding review of the standards developed by the U.S.
Federal Supreme Court shows, the choice of the appropriate test for
evaluating a legislative classification is dependent on the nature of
the rights affected (i.e. whether “fundamental” or not) and the

character of the persons allegedly discriminated against (i.e. whether
belonging to a “suspect class” or not). As determined by these two
parameters, the scope of application of each standard is distinct and
exclusive of the others. Indeed, to my knowledge, the American
Court has never applied more than one standard to a given set of
facts, and where one standard was found to be appropriate, the U.S.
Supreme115 Court has deliberately eschewed any discussion of
another.
Assuming that the equal protection standards evolved by the U.S.
Supreme Court may be adopted in this jurisdiction,
_______________
115 Vide Lying v. International Union, United Automobile, Aerospace and

Agricultural Implement Workers of America, UAW, supra at 370:
Because the statute challenged here has no substantial impact on any fundamental interest and
does not “affect with particularity any protected class,” we confine our consideration to
whether the statutory classification is rationally related to a legitimate government interest. x x
x (Italics supplied)
507
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there is no reason why the exclusive manner of their application

should not be adopted also.
In the present case, the persons allegedly discriminated against
(i.e. the rank and file employees of the BSP) and the rights they are
asserting (to be exempted from the Compensation Classification
System prescribed by the Salary Standardization Law) remain the
same, whether the classification under review is between them and
the executive officers of the BSP or the rank and file employees of
the LBP, DBP, SSS and GSIS.
It therefore stands to reason that the test or standard—whether
Rational Basis, Strict Scrutiny or Intermediate Scrutiny—against
which petitioner’s claims should be measured should likewise be the
same, regardless of whether the evaluation pertains to the
constitutionality of (1) the classification expressly made in Section
15 (c) of The New Central Bank Act or (2) the classification
resulting from the amendments of the charters of the other
GOCCs/GFIs.
To illustrate further, if petitioner’s constitutional challenge is
premised on the denial of a “fundamental right” or the perpetuation
of prejudice against a “suspect class,” as suggested (but not fully
explicated) in the closing pages of the main opinion; then, following

the trend in American jurisprudence, the Strict Scrutiny Test would
be applicable, whether the classification being reviewed is that
between the officers and rank and file of the BSP or between the
rank and file of the BSP and the rank and file of the other
GOCCs/GFIs.
But certainly, the same group of BSP rank and file personnel
cannot be considered a “non-suspect class” when compared to the
BSP executive corps, but members of a “suspect class” when
compared to the rank and file employees of the other GOCCs/GFIs.
Neither could the rights they assert be simultaneously “fundamental”
and “less than fundamental.” Consequently, it would be improper to
apply the Rational Basis Test as the standard for one comparison and
the Strict Scrutiny Test for the other. To do so would be to apply the
law
508

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unevenly and, accordingly, deny the persons concerned “the equal

protection of the laws.”
“Relative Constitutionality” Not A Justification for the Double

Standard
It would appear that the employment of a “double standard” in the
present case is sought to be justified somehow by the concept of
relative constitutionality invoked by the main opinion. Thus, the
main opinion holds that the “subsequent enactments, however,
constitute-significant changes in circumstance that considerably alter
the reasonability of the continued operation of the last proviso of
Section 15 (c), Article II of Republic Act No. 7653, and exposes the
proviso to more serious scrutiny.”
The ponencia likewise invites this Court to reflect on the
following questions: “Given that Congress chose to exempt other
GFIs (aside the BSP) from the coverage of the SSL, can the
exclusion of the rank-and-file employees of the BSP stand
constitutional scrutiny in the light of the fact that Congress did not
exclude the rank-and-file employees of the other GFIs? Is Congress’
power to classify unbridled as to sanction unequal and
discriminatory treatment, simply because the inequity manifested
not instantly through a single overt act, but gradually through seven
separate acts? Is the right to equal protection bounded in time and
space that: (a) the right can be invoked only against classification
made directly and deliberately, as opposed to discrimination that
arises indirectly as a consequence of several other acts? and (b) is
the legal analysis confined to determining the validity within the

parameters of the statute x x x thereby proscribing any evaluation
vis-à-vis the groupings or the lack thereof
116
among several similar
enactments made over a period of time?”
To clarify, it was never suggested that judicial review should be
confined or limited to the questioned statute itself
_______________
116 Main Opinion at 24-25.
509
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without considering other related laws. It is well within the powers

of this Court to resolve the issue of whether the subsequent
amendments of the charters of other GOCCs and other GFIs altered
the constitutionality of Section 15 (c) of the New Central Bank Act.
It is, however, what to me is the improper resort by the main
opinion to relative constitutionality, and as to be subsequently
demonstrated, the use of an inappropriate standard for equal
protection analysis, that constrained me to register my dissent.
As illustrated in the main opinion, “relative constitutionality”
refers to the principle that a statute may be constitutionally valid as
applied to one set of facts and invalid in its application to another set
of facts. Thus, a statute valid at one time may become void at
another time because of altered factual circumstances.
This principle is really a corollary to the requirements that a valid
classification (a) must be based on real and substantial (not merely
superficial) distinctions and (b) must not be limited to existing
conditions only.
“Substantial distinctions” must necessarily be derived from the
objective factual circumstances of the classes or groups that a statute
seeks to differentiate. The classification must be real and factual and
not wholly abstract, artificial, 117or contrived. Thus, in Victoriano v.
Elizalde Rope Workers’ Union, this Court stated:
We believe that Republic Act No. 3350 satisfies the aforementioned

requirements. The Act classifies employees and workers, as to the effect and
coverage of union shop security agreements, into those who by reason of
their religious beliefs and convictions cannot sign up with a labor union, and
those whose religion does not prohibit membership in labor unions. The
classification rests on real or substantial, not merely imaginary or
whimsical, distinctions. There is such real distinction in the beliefs, feelings
and sentiments of em-
_______________
117 Supra.
510

ployees. Employees do not believe in the same religious faith and different
religions differ in their dogmas and cannons. Religious beliefs,
manifestations and practices, though they are found in all places, and in all
times, take so many varied forms as to be almost beyond imagination. There
are many views that comprise the broad spectrum of religious beliefs among
the people. There are diverse manners in which beliefs, equally paramount
in the lives of their possessors, may be articulated. Today the country is far
more heterogenous in religion than before, differences in religion
118
do exist,
and these differences are important and should not be ignored. (Emphasis
supplied)
In the words of Justice Jackson of119 the U.S. Supreme Court in

Walters v. City of St. Louis, Missouri:
x x x Equal protection does not require identity of treatment. It only

requires that classification rest on real and not feigned differences, that
the distinctions have some relevance to the purpose for which the
classification is made, and that the different treatments be not so
disparate, relative
120
to the difference in classification, as to be wholly
arbitrary. x x x (Emphasis and italics supplied)
For this reason, in reviewing legislation challenged on equal

protection grounds—particularly when a statute otherwise valid on
its face is alleged to be discriminatory in its application—a court
must often look beyond the four corners of the statute and carefully
examine the factual circumstances of the case before it.
Thus, in Ermita-Malate Hotel and
121
Motel Operators Associations,
Inc. v. Hon. City Mayor of Manila, this Court, in reversing a trial
court decision invalidating an ordinance regulating the operation of
motels and hotels in Manila, held:
_______________
118 Id., at pp. 78-79.

119 347 U.S. 231 (1954).
120 Id., at p. 237.
121 127 Phil. 306; 20 SCRA 849 (1967).
511
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Primarily what calls for a reversal of such a decision is the absence of any
evidence to offset the presumption of validity that attaches to a challenged
statute or ordinance. As was expressed categorically by Justice Malcolm:
“The presumption is all in favor of validity . . . . The action of the elected
representatives of the people cannot be lightly set aside. The councilors
must, in the very nature of things, be familiar with the necessities of their
particular municipality and with all the facts and circumstances which
surround the subject and necessitate action. The local legislative body, by
enacting the ordinance, has in effect given notice that the regulations are
essential to the well being of the people . . . The Judiciary should not lightly
set aside legislative action when there is not a clear invasion of personal or
property rights under the guise of police regulation.”
It admits of no doubt therefore that there being a presumption of
validity, the necessity for evidence to rebut it is unavoidable, unless the
statute or ordinance is void on its face, which is not the case here. The
principle has been nowhere better expressed than in the leading case of
O’Gorman & Young v. Hartford Fire Insurance Co., where the American
Supreme Court through Justice Brandeis tersely and succinctly summed up
the matter thus: “The statute here questioned deals with a subject clearly
within the scope of the police power. We are asked to declare it void on the
ground that the specific method of regulation prescribed is unreasonable and
hence deprives the plaintiff of due process of law. As underlying questions
of fact may condition the constitutionality of legislation of this character,
the presumption of constitutionality must prevail in the absence of some
factual foundation of record for overthrowing the statute.” No such
factual foundation being laid in the present case, the lower court deciding
the matter on the pleadings and the stipulation of facts, the presumption of 122
validity must prevail and the judgment against the ordinance set aside.
_______________
122 Id., at pp. 314-315; Motion for Reconsideration denied in Ermita-Malate Hotel
and Motel Operators Associations, Inc. v. Hon. City Mayor of Manila, 128 Phil. 473,
21 SCRA 449 (1967); vide Peralta v. Commission on Elections, supra, at p. 55.
512

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123
And in Peralta v. Commission on Elections, this Court stated:
The equal protection clause does not forbid all legal classifications. What
[it] proscribes is a classification which is arbitrary and unreasonable. It is
not violated by a reasonable classification based upon substantial
distinctions, where the classification is germane to the purpose of the law
and applies equally to all those belonging to the same class. The equal
protection clause is not infringed by legislation which applies only to those
persons falling within a specified class, if it applies alike to all persons
within such class, and reasonable grounds exist for making a distinction
between those who fall within the class and those who do not. There is, of
course, no concise or easy answer as to what an arbitrary classification
is. No definite rule has been or can be laid down on the basis of which
such question may be resolved. The determination must be made in
accordance with the facts presented by the particular case. The general
rule, which is well-settled by the authorities, is that a classification, to
be valid, must rest upon material differences between the persons,
activities or things included and those excluded.’ There must, in other
words, be a basis for distinction. Furthermore, such classification must be
germane and pertinent to the purpose of the law. And, finally, the basis of
classification must, in general, be so drawn that those who stand in
substantially
124
the same position with respect to the law are treated alike. x x
x (Emphasis and italics supplied)
125
A similar thought was expressed
126
in Medill v. State of Minnesota,
cited in the main opinion, where the State Supreme
_______________
123 82 SCRA 30 (1978).

124 Id., at p. 54.
125 477 N.W. 2d 703 (1991).
126 The case of In re: Cook, 138 B.R. 943 (1992) decided by the U.S. Bankruptcy
Court and cited in the main opinion as following Medill with reservations does not
appear to be in point. The former cites Medill with respect to the matter of punitive
damages, to wit:
Last, the Medill court found that “punitive damages are not in the nature of compensatory
damages and thus are not exempt from creditors.” While the Medill opinion gave a clear
answer, I am still confused. The opinion lacks any reasons for
513
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127
Court of Minnesota reversed a decision of the U.S. Bankruptcy
Court and held that a statute exempting “[r]ights of
_______________
the conclusion. I don’t know if the court’s decision was based on the Minnesota Constitution,
the exemption statute or both, i.e., Is the court saying that punitive damages are not within the
scope of § 550.37, subd. 22 or is it saying that the statute is unconstitutional as applied to
punitive damages. Once again, it does not really matter. The result is clear. A claim for punitive
damages is not exempt. (At 946)
127 Citing the earlier State case of Grobe v. Oak Center Creamery Co., 113 N.W.
2d 458, where the Minnesota Supreme Court stated:
We cannot agree with the relators that a review of the facts bearing upon the application of the
statute is not necessary to determine the constitutional issue. The constitutionality of a statute
cannot in every instance be determined by a mere comparison of its provisions with the
applicable provisions of the constitution. A statute may be constitutional and valid as
applied to one set of facts and invalid in its application to another. This is particularly true
of statutes granting the right of eminent domain. We have in recent years considered a
number of cases involving the constitutionality of such statutes and have considered that
question against the factual background of each case. The records in each of these cases,
including the Dairyland case which was reviewed on certiorari, came to us with a settled case.
The legislation comes to this court with a presumption in favor of its constitutionality.
Where, as here, we cannot say the statute is inherently unconstitutional, its validity must
stand or fall upon the record before the lower court and not upon assumptions this court
might make in the absence of proof incorporated in a settled case. This is not a case where
the constitutional facts are adequately ascertainable by judicial notice or even judicial
assumption. Because of the absence of a settled case or a certificate of the trial judge as to
the accuracy and completeness of the record, we decline to pass upon the constitutionality
of the act. (At 460; emphasis supplied; citations omitted)
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action for injuries to the person of the debtor or of a relative” from

“attachment, garnishment, or sale on any final process, issued from
any court,” did not contravene the provisions of the Minnesota
Constitution limiting exemptions to a “reasonable amount” to be
determined by law. The Minnesota Court held:
x x x we must determine here whether there is an objective measure which

limits the amount or extent of the personal injury right of action exemption
since there is no dollar limit or “to the extent reasonably necessary” limiting
language on the face of the provision. The trustee argues that the case is
“incredibly simple” because there is no language on the face of the statute
purporting to limit the exemption. The state and debtors argue that the
judicial determination of general damages in a personal injury action is
based on objective criteria; therefore, the amount of the exemption is
reasonable and “determined by law” under article 1, section 12. We think

that the latter interpretation is reasonable and that the trustee has failed to
meet his burden of proving beyond a reasonable doubt that the provision is
unconstitutional.
xxx
Here, the resolution of the Medills’ personal injury action involved a
judicial determination of an amount that reasonably compensated them for
their injuries. The Medills’ recovery was reasonably limited by a jury’s
determination of damages, which was then approved by a court. Contrary to
the trustee’s argument, we believe that the limits on out-of-court settlements
are similarly reasonable. First, unless a statute is inherently
unconstitutional, “its validity must stand or fall upon the record before
the court and not upon assumptions this court might [otherwise] make
* * *.” Grobe v. Oak Center Creamery Co., 262 Minn. 60, 63, 113 N.W.2d
458, 460 (1962). Moreover, even in the case of an out-of-court settlement,
the “inherent” limitation on the right of action still exists; the amount of a
settlement is limited to or by the extent of injury, and no party will agree to
an “unreasonable” settlement.
The trustee vigorously argues that the court must go considerably beyond
the plain language of the statute and rules of statutory construction to
impose the required constitutional limit on the exemption provision at issue
here. However, the constitutionality of a statute cannot in every instance
be determined by a mere comparison of its provisions with the
applicable provi-
515
VOL. 446, DECEMBER 15, 2004 515

sions of the constitution. A statute may be constitutional and valid as

applied to one set of facts and invalid in its application to another.
Grobe, 262 Minn. at 62, 113 N.W.2d at 460. Thus, unless we find the
exemption unconstitutional on its face, it must be unconstitutional as
128
applied to the facts of the instant case in order to be stricken.
(Emphasis supplied)
This does not mean that the factual differences must be prominent
for the distinction between two classes to be substantial. Nor are fine
distinctions between two classes, otherwise sharing several common
attributes, prohibited. Thus, the Court in Peralta, went on to state:
x x x It is, however, conceded that it is almost impossible in some matters to

foresee and provide for every imaginable and exceptional case. Exactness
in division is impossible and never looked for in applying the legal test.
All that is required is that there must be, in general, some reasonable
basis on general lines for the division. Classification which has some
reasonable basis does not offend the equal protection clause merely
because it is not made with mathematical nicety. (Emphasis supplied;

citations omitted)
The pronouncement
129
in Victoriano v. Elizalde Rope Workers’
Union, is also instructive:
In the exercise of its power to make classifications for the purpose of

enacting laws over matters within its jurisdiction, the state is recognized as
enjoying a wide range of discretion. It is not necessary that the
classification be based on scientific or marked differences of things or in
their relation. Neither is it necessary that the classification be made
with mathematical nicety. Hence legislative classification may in many
cases properly rest on narrow distinctions, for the equal protection
guaranty does not preclude the legislature from recognizing degrees of evil 130
or harm, and legislation is addressed to evils as they may appear.
(Emphasis supplied; citations omitted)
_______________
128 Supra at pp. 706-708.

129 Supra.
130 Id., at p. 78.
516

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To be sure, this Court has adjudged as valid statutes providing for

differences
131
in treatment between: inter-urban buses and provincial
buses; taxpayers
132
receiving compensation income and other 133
taxpayers; male overseas workers and female 134
overseas workers;
electric cooperatives and other cooperatives; businesses inside the
secured area of the 135
Subic Special Economic Zone and those outside
the secured area; public officers with pending criminal cases which
have not yet gone to136 trial and those with cases wherein trial has
already commenced; and City and Municipal Election Officers of
the Commission
137
On Elections (COMELEC) and other COMELEC
officials.
Nevertheless, to be substantial, these distinctions, no matter how
finely drawn, must still be rooted on some objective factual
foundation; and cannot be left to the arbitrary, whimsical or
capricious imagination of the law maker.
Thus, relative constitutionality, as I understand it, merely
acknowledges that the factual circumstances which form the bases
for the substantial and real distinctions between two classes may
change over time. Thus, it is entirely possible that a legislative
classification held to be valid at one time upon a particular state of

facts may be subsequently invalidated if the factual basis for the
substantial distinctions that existed between the two 138
classes has
ceased to exist. Cessante ratione legis, cessat ipsa lex.
_______________
131 Luque v. Villegas, 30 SCRA 408 (1969).

132 Sison v. Ancheta, supra.
133 Philippine Association of Service Exporters, Inc. v. Drilon, 163 SCRA 386
(1988).
134 Tolentino v. Secretary of Finance, supra.
135 Tiu v. Court of Appeals, G.R. No. 127410, January 20, 1999, 301 SCRA 278.
136 Lacson v. Executive Secretary, G.R. No. 128096, January 20, 1999, 301 SCRA
298.
137 De Guzman v. Commission on Elections, 336 SCRA 188 (2000).
138 When the reason of the law ceases, the law itself ceases.
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Just such a possibility was acknowledged by139 the U.S. Supreme

Court in Chastleton Corporation v. Sinclair, where the Court,
speaking through Justice Holmes, declared:
The original Act of October 22, 1919, c. 80, tit. 2, 41 Stat. 297, considered
in Block v. Hirsh, was limited to expire in two years. Section 122. The Act
of August 24, 1921, c. 91, 42 Stat. 200, purported to continue it in force,
with some amendments, until May 22, 1922. On that day a new act declared
that the emergency described in the original title 2 still existed, reenacted
with further amendments the amended Act of 1919, and provided that it was
continued until May 22, 1924. Act of May 22, 1922, c. 197, 42 Stat. 543.
We repeat what was stated in Block v. Hirsh, as to the respect due to a
declaration of this kind by the Legislature so far as it relates to present facts.
But even as to them a Court is not at liberty to shut its eyes to an obvious
mistake, when the validity of the law depends upon the truth of what is
declared. And still more obviously so far as this declaration looks to the
future it can be no more than prophecy and is liable to be controlled by
events. A law depending upon the existence of an emergency or other
certain state of facts to uphold it may cease to operate if the emergency 140
ceases or the facts change even though valid when passed. x x x
(Emphasis supplied; citations omitted)
141
Indeed, this appears to be the thrust of the cases cited by the main
opinion to illustrate relative constitutionality:
_______________
139 265 U.S. 543 (1924).

140 Id., at pp. 547-548.
141 Murphy v. Edmonds, 601 A. 2d 102 (1992), decided by the Maryland Supreme
Court, is cited in the main opinion in support of the proposition that “a statute valid at
one time may become void at another time because of altered circumstances.”
However, the text of the decision does not appear to touch on relative
constitutionality. In Murphy, appellants challenged the constitutionality of a statute
providing for a US$350,000 statutory cap on non-economic damages in personal
injury actions. The Maryland Supreme Court held:
We reject the plaintiffs’ contention that the classification created by § 11-108 of the Courts and
Judicial Proceedings Article is subject to any level of scrutiny higher than the traditional, def-
518

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142
The case of Vernon Park Realty v. City of Mount Vernon concerned
a parcel of land adjacent to a railroad station and located in the
middle of a highly developed business district had continually been
used as a car park. In 1927 it was placed in a Residence ‘B’ district
under a zoning ordinance under
_______________
erential rational basis test. Moreover, we disagree with the holdings in the above-cited cases
applying heightened scrutiny to legislative caps upon recoverable damages. Whatever may be
the appropriate mode of equal protection analysis for some other statutory classifications, in
our view a legislative cap of $350,000 upon the amount of noneconomic damages which can be
awarded to a tort plaintiff does not implicate such an important “right” as to trigger any
enhanced scrutiny. Instead, the statute represents the type of economic regulation which has
regularly been reviewed under the traditional rational basis test by this Court and by the
Supreme Court.
xxx
The General Assembly’s objective in enacting the cap was to assure the availability of
sufficient liability insurance, at a reasonable cost, in order to cover claims for personal injuries
to members of the public. This is obviously a legitimate legislative objective. A cap on
noneconomic damages may lead to greater ease in calculating premiums, thus making the
market more attractive to insurers, and ultimately may lead to reduced premiums, making
insurance more affordable for individuals and organizations performing needed services. The
cap, therefore, is reasonably related to a legitimate legislative objective.
Since, the General Assembly had before it several studies which concluded that $250,000
would cover most noneconomic damage claims, the Legislature did not act arbitrarily in
enacting the cap at $350,000. It is also significant that the cap applies to all personal injury
claimants equally rather than singling out one category of claimants. Therefore, we hold that
the legislative classification drawn by § 11-108 between tort claimants whose noneconomic
damages are less that $350,000 and tort claimants whose noneconomic damages are greater
than $350,000, and who are thus subject to the cap, is not irrational or arbitrary. It does not
violate the equal protection component of Article 24 of the Declaration of Rights. (At 115-116;
citations omitted).
142 307 N.Y. 493 (1954).
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which its use as a car park remained a valid nonconforming use. In

1951, the area was sold to Vernon Park Realty which applied for, but
did not obtain, a permit to build a retail shopping center (prohibited
under the 1927 ordinance). In 1952, after Vernon Park had brought
suit to declare the 1927 ordinance unconstitutional, the city’s
common council amended the zoning ordinance to prohibit the use
of the property for any purpose except the parking and storage of
automobiles and the continuance of prior nonconforming uses. The
Court of Appeals of New York found the 1927 zoning ordinance and
the 1952 amendment illegal and void, ruling that:
While the common council has the unquestioned right to enact zoning laws
respecting the use of property in accordance with a well-considered and
comprehensive plan designed to promote public health, safety and general
welfare, such power is subject to the constitutional limitation that it may not
be exerted arbitrarily or unreasonably and this is so whenever the zoning
ordinance precludes the use of the property for any purpose for which it is
reasonably adapted. By the same token, an ordinance valid when adopted
will nevertheless be stricken down as invalid when, at a later time, its
operation under changed conditions proves confiscatory such, for instance,
as when the greater part of its value143
is destroyed for which the courts will
afford relief in an appropriate case. (Emphasis supplied; citations omitted)
144
In Nashville, Chatanooga & St. Louise Railways v. Walters, the
petitioners questioned the constitutionality of a provision of the
Tennessee Public Acts of 1921, which authorized the state highway
commissioner to require the separation of grades whenever a state
highway crosses a railroad if in its discretion “the elimination of
such grade crossing is necessary for the protection of persons
traveling on any such highway or any such railroad” and requiring
the railroad company to pay in every case, one-half of the total cost
of the separation of grades. In remanding the case to the Supreme
_______________
143 Id., at pp. 498-499.

144 294 U.S. 405 (1935).
520

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Court of Tennessee, the U.S. Federal Supreme Court declared:
The Supreme Court [of Tennessee] declined to consider the Special facts
relied upon as showing that the order, and the statute as applied, were
arbitrary and unreasonable; and did not pass upon the question whether the
evidence sustained those findings. It held that the statute was, upon its face,
constitutional; that when it was passed the state had, in the exercise of its
police power, authority to impose upon railroads one-half of the cost of
eliminating existing or future grade crossings; and that the court could not
“any more” consider “whether the provisions of the act in question have
been rendered burdensome or unreasonable by changed economic and
transportation conditions,” than it “could consider changed mental attitudes
to determine the constitutionality or enforceability of a statute.” A rule to
the contrary is settled by the decisions of this Court. A statute valid as to
one set of facts may be invalid as to another. A statute valid when enacted
may become invalid by change in the conditions to which it is applied. The
police power is subject to the constitutional limitation that it may not be
exerted arbitrarily or unreasonably. To this limitation, attention was
specifically called in cases which have applied most broadly the power to
impose upon railroads the cost of separation of grades.
First. Unless the evidence and the special facts relied upon were of such
a nature that they could not conceivably establish that the action of the state
in imposing upon the railway one-half of the cost of the underpass was
arbitrary and unreasonable, the Supreme Court [of Tennessee] obviously
erred in refusing to consider them. The charge of arbitrariness is based
primarily upon the revolutionary changes incident to transportation
wrought in recent years by the widespread introduction of motor
vehicles; the assumption by the federal government of the functions of
road builder; the resulting depletion of rail revenues; the change in the
character, the construction, and the use of highways; the change in the
occasion for elimination of grade crossings, in the purpose of such
elimination, and in the chief beneficiaries thereof; and the change in the
relative responsibility of the railroads and vehicles moving on the
highways as elements of danger and causes of accidents. x x x
xxx
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Second. x x x The promotion of public convenience will not justify

requiring of a railroad, any more than of others, the expenditure of money,
unless it145can be shown that a duty to provide the particular convenience rests
upon it. (Emphasis supplied; citations omitted)
146
In Atlantic Coast Line Railroad Co. v. Ivey, an action for damages
was filed against the Atlantic Coast Line Railroad Company for the
killing of a cow on an unfenced right of way under certain Florida
statutes authorizing the recovery of double damages plus attorney’s
fees for animals killed on unfenced railroad right of way, without
proof of negligence. The railroad company alleged that several
changes in economic, transportation and safety 147
conditions had
occurred since these statutes were passed in 1899 and that, in view
_______________
145 Id., at pp. 414-429.

146 5 So. 2d 244 (1941).
147 Atlantic Coast Line Railroad Co. alleged:
“In the year 1899 when said statutes were passed, there were no paved highways in the State of
Florida, no automobiles, no motor busses, no motor trucks, and substantially all the freight and
passenger traffic into, in and out of the State of Florida was transported by railroads; today
there are many thousands of paved highways in Florida, thousands of automobiles, and
hundreds of motor busses and motor trucks carrying and transporting daily, besides their
operators, property of great value and thousands of passengers at rates of speed fairly
comparable to, and in many instances exceeding, the rate of speed at which the Defendant
operates its trains; much of said freight and passenger transportation is for hire and is in
competition with the transportation of passengers and freight by the defendant and other
railroad companies in the State, and at some seasons of the year more passengers in number are
carried by said automobile, bus and truck transportation upon the paved highways of the State
than by all the railroads operating within said State; whatever hazard, jeopardy or danger there
now may be to property or to passengers on railroad trains from the failure to fence the railroad
tracks, exists to an equal, and in many instances, to a greater degree in re-
522

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of these changes, it was unfair, unjust and inequitable to require

railroad companies to fence their tracks to protect against livestock
roaming at large without making a similar requirement for the
owners of automobiles, trucks and buses carrying passengers on the
unfenced public highways. In ruling that the questioned statutes

violated the equal protection guaranty, the Supreme Court of Florida
reasoned:
It stands adjudicated that the purpose of the statutes, supra, is the protection
against accidents to life and property in conducting public transportation
and that such statutes are in the exercise of the police power. It cannot be
questioned that those transportation companies engaged as common carriers
on the public roads and those so engaged on their privately owned roads
such as railroad companies, owe like duties to the public and are under like
obligations for the protection against accidents to life and property in
conducting such business.
_______________
spect to the property and passengers carried in such automobiles, trucks and busses; since the
year 1889, the numbers of domestic livestock roaming at large in Florida have continuously
decreased so that at all times mentioned in the Declaration herein approximately 70% of the
domestic livestock in Florida does not and did not roam at large, whereas in 1889 practically all
domestic live stock in Florida did roam at large, and by consequence of such changed
conditions the burden placed by said statutes upon this Defendant as a railroad company has
become and is greatly disproportionate to the public good or benefit, and an unreasonable
expense on this Defendant; it has been many years since any property being carried by a
railroad train in Florida has been damaged, injured or destroyed, or any persons being so
carried killed or injured, as a result of a collision between a railroad train and domestic live
stock; but injury to and death of persons being carried in automobiles and trucks upon the
public highways of the State resulting in collisions between motor driven vehicles and domestic
live stock are a matter of almost daily occurrence, and in each of the years 1937, 1938 and
1939, from 20 to 25 persons were so killed; x x x (at pp. 245-246).
523
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It is well settled that a statute valid when enacted may become invalid by
change in conditions to which it is applied. The allegations of the pleas are
sufficient to show, and the demurrer admits, that compliance with the statute
places a burden of expense on the railroad company to provide for the safety
of life and property of those whom it assumes to serve which is not required
to be borne by competitive motor carriers which subject the lives and
property of those whom they assume to serve to greater hazards of the
identical character which the railroad is required to so guard against and it is
also shown that under the statutes penalties are imposed on the railway
earlier in favor of individuals who are neither shippers nor passengers.
Under the statutes, as shown by the record here, the railway common
carrier is not only required to carry the burden of fencing its traffic line for
the protection of the persons and property it transports, while other common
carriers are not required to provide the like protection, but in addition to
this, there is another gross inequality imposed by the statute, viz.: Under the
statutes the plaintiff to whom the carrier, as such, was under no
obligations, was allowed to recover double the value of the animal
killed, plus $50 as attorney’s fees, and was not required to prove any act
of negligence on the part of the carrier in the operation of its
equipment, while if a common carrier bus or truck had by the
operation of its equipment killed the same animal in the same locality,
the plaintiff would have been required to prove negligence in the
operation of the equipment and the common carrier would have been
liable only for the value 148
of the animal. This certainly is not equal
protection of the law. (Emphasis and underscoring supplied; citations
omitted)
Similarly,149 the case of Louisville & Nashville Railroad Co. v.

Faulkner concerned an action to recover the value of a mule killed
by the railroad company’s train under a Kentucky statute which
made the killing or injury of cattle by railroad engines or cars prima
facie evidence of negligence on the part of the railroad’s agents or
servants. The Kentucky Supreme
_______________
148 Supra at pp. 246-247.

149 307 S.W. 2d 196 (1957).
524

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Court, following the rulings in Nashville and Atlantic Coast,

adjudged the questioned statute to be unconstitutional, viz.:
The present statute which places the duty upon a railroad company to prove
it was free from negligence in killing an animal upon its track is an act of
1893. The genesis of the legislation, however, goes back to the beginning of
railroad transportation in the state. The constitutionality of such
legislation was sustained because it applied to all similar corporations
and had for its object the safety of persons on a train and the protection
of property. Louisville & N. R. Co. v. Belcher, 89 Ky. 193, 12 S.W. 195, 11
Ky. Law Rep. 393, a decision rendered in 1889.
Of course, there were no automobiles in those days. The subsequent
inauguration and development of transportation by motor vehicles on
the public highways by common carriers of freight and passengers
created even greater risks to the safety of occupants of the vehicles and
of danger of injury and death of domestic animals. Yet, under the law
the operators of that mode of competitive transportation are not subject
to the same extraordinary legal responsibility for killing such animals
on the public roads as are railroad companies for killing them on their
private rights of way.
The Supreme Court, speaking through Justice Brandeis in Nashville, C.
& St. L. Ry. Co. v. Walters, 294 U.S. 405, 55 S.Ct. 486, 488, 79 L.Ed. 949,
stated, ‘A statute valid when enacted may become invalid by change in
the conditions to which it is applied. The police power is subject to the
limitation that it may not be exerted arbitrarily or unreasonably.’ A number
of prior opinions of that court are cited in support of the statement. See 11
Am.Jur., Constitutional Law, § 102.
The State of Florida for many years had a statute, F.S.A, § 356.01 et seq.
imposing extraordinary and special duties upon railroad companies, among
which was that a railroad company was liable for double damages and an
attorney’s fee for killing livestock by a train without the owner having to
prove any act of negligence on the part of the carrier in the operation of his
train. In Atlantic Coast Line Railroad Co. v. Ivey, 148 Fla. 680, 5 So.2d 244,
247, 139 A.L.R. 973, it was held that the changed conditions brought
about by motor vehicle transportation rendered the statute
unconstitutional since if a common carrier by motor vehicle
525
VOL. 446, DECEMBER 15, 2004 525

had killed the same animal, the owner would have been required to
prove negligence in the operation of its equipment. Said the court, ‘This
certainly is not equal protection of the law.’
As stated in Markendorf v. Friedman, 280 Ky. 484, 133 S.W.2d 516, 127
A.L.R. 416, appeal dismissed Friedman v. Markendorf, 309 U.S. 627, 60
S.Ct. 610, 84 L.Ed. 987, the purpose of the provisions of §§ 3 and 59 of
the Kentucky Constitution and of the Fourteenth Amendment to the
Federal Constitution is to place all persons similarly situated upon a
plane of equality and to render it impossible for any class to obtain
preferred treatment. Applying this proscription of inequality and
unreasonable discrimination, we held invalid an amendment to a statute
regulating motor transportation for hire which exempted from the operation
of the statute such vehicles engaged in transporting farm products. Priest v.
State Tax Commission, 258 Ky. 391, 80 S.W.2d 43.
We, therefore, hold that the part of KRS 277.330 which imposes a duty
upon a railroad company of proving that it was free from negligence in the
killing or injury 150
of cattle by its engine or cars is invalid and
unconstitutional. (Emphasis supplied; italics in the original)
151
Finally, in Rutter v. Esteban, this Court invalidated Section 2 of
R.A. No. 342 providing for an eight-year moratorium period within
which a creditor could not demand payment of a monetary

obligation contracted before December 8, 1941 (counted from the
settlement of the war damage claim of the debtor) after taking
judicial notice of the significant change in the nation’s economic
circumstances in 1953, thus it held:
x x x We do not need to go far to appreciate this situation. We can see it and

feel it as we gaze around to observe the wave of reconstruction and
rehabilitation that has swept the country since liberation thanks to the aid of
America and the innate progressive spirit of our people. This aid and this
spirit have worked wonders in so short a time that it can now be safely
stated that in the main the financial
_______________
150 Id., at pp. 197-198.

151 93 Phil. 68 (1953).
526

condition of our country and our people, individually and collectively, has
practically returned to normal notwithstanding occasional reverses caused
by local dissidence and the sporadic disturbance of peace and order in our
midst. Business, industry and agriculture have picked up and developed at
such stride that we can say that we are now well on the road to recovery and
progress. This is so not only as far as our observation and knowledge are
capable to take note and comprehend but also because of the official
pronouncements made by our Chief Executive in public addresses and in
several messages he submitted to Congress on the general state of the
nation. x x x
xxx
In the face of the foregoing observations, and consistent with what we
believe to be as the only course dictated by justice, fairness and
righteousness, we feel that the only way open to us under the present
circumstances is to declare that the continued operation and
enforcement of Republic Act No. 342 at the present time is
unreasonable and oppressive, and should not be prolonged a minute
longer, and, therefore,
152
the same should be declared null and void and
without effect. x x x (Emphasis supplied)
As the financial ruin and economic devastation which provided the

rationale for the enactment of R.A. No. 342 was no longer present,
this Court did not hesitate to rule that the continued enforcement of
the statute was “unreasonable and oppressive, and should not be
prolonged a minute longer.”
In the case at bar, however, petitioner does not allege a

comparable change in the factual milieu as regards the
compensation, position classification and qualifications standards of
the employees of the BSP (whether of the executive level or of the
rank and file) since the enactment of The New Central Bank Act.
Neither does the main opinion identify the relevant factual changes
which may have occurred vis-à-vis the BSP personnel that may
justify the application of the principle of relative constitutionality as
above-discussed. Nor, to my knowledge, are there any relevant
factual changes of which
_______________
152 Id., at pp. 81-82.
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this Court may take judicial knowledge. Hence, it is difficult to see

how relative constitutionality may be applied to the instant petition.
Moreover, even if such factual changes were alleged and proved
or judicially discoverable, still there is absolutely nothing in any of
the cases above-cited which would justify the simultaneous
application of both the Rational Basis Test and the Strict Scrutiny 153
Test. In fact, in the case of Louisville & Nashville Railroad Co.,
wherein a statute previously held to have complied with the
requirements of the equal protection clause in 1889 was
subsequently ruled to have violated the equal protection guaranty in
1957 due to changed factual conditions, 154
the only test applied in both
instances was the Rational Basis Test.
It is true that petitioner alleges that its members’ claim to
exemption from the Compensation Classification System under the
Salary Standardization Law was bolstered by the amendments to the
charters of the LBP, DBP, SSS and GSIS, which exempted all the
employees of these GOCCs/GFIs from said Compensation
Classification System. However, these subsequent amendments do
not constitute factual changes in the context of relative
constitutionality. Rather, they involve subsequent legislative
classifications which should be evaluated in accordance with the
appropriate standard.
To assess the validity of the questioned proviso in the light of
subsequent legislation, all that need 155be applied is the familiar rule
that statutes that are in pari materia should 156
be read together. As
this Court declared in City of Naga v. Agna, viz.:
_______________
153 Supra.
154 Notably, the application of “rigid scrutiny” in equal protection analysis was
espoused as early as 1944 in the case of Korematsu v. U.S., supra.
155 I.e. relating to the same matter.
156 71 SCRA 176 (1976).
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x x x Every new statute should be construed in connection with those

already existing in relation to the same subject matter and all should be
made to harmonize and stand together, if they can be done by any fair
and reasonable interpretation . . . . It will also be noted that Section 2309
of the Revised Administrative Code and Section 2 of Republic Act No. 2264
(Local Autonomy Act) refer to the same subject matter—enactment and
effectivity of a tax ordinance. In this respect they can be considered in pari
materia. Statutes are said to be in pari materia when they relate to the
same person or thing, or to the same class of persons or things, or have
the same purpose or object. When statutes are in pari materia, the rule of
statutory construction dictates that they should be construed together.
This is because enactments of the same legislature on the same subject
matter are supposed to form part of one uniform system; that later
statutes are supplementary or complimentary to the earlier enactments
and in the passage of its acts the legislature is supposed to have in mind
the existing legislation on the same subject and to have enacted its new
act with reference thereto. Having thus in mind the previous statutes
relating to the same subject matter, whenever the legislature enacts a
new law, it is deemed to have enacted the new provision in accordance
with the legislative policy embodied in those prior statutes unless there
is an express
157
repeal of the old and they all should be construed
together. (Emphasis and italics supplied; citations omitted)
Here, it can be said that the Salary Standardization Law, the New
Central Bank Act, and the amended charters of the other GOCCs
and GFIs are in pari materia insofar as they pertain to compensation
and position classification system(s) covering government
employees. Consequently, the provisions of these statutes concerning
compensation and position classi-
_______________
157 Id., at pp. 183-184; vide C & C Commercial Corporation v. National

Waterworks and Sewerage Authority, G.R. L-27275, November 18, 1967; Maceda v.
Macaraig, 223 SCRA 217 (1993); Natividad v. Felix, 229 SCRA 680 (1994); Manila
Jockey Club, Inc. v. Court of Appeals, 300 SCRA 181 (1998); Vda. de Urbano v.
Government Service Insurance System, 367 SCRA 672 (2001).
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fication, including the legislative classifications made therein,

should all be read and evaluated together in the light of the equal
protection clause. Consequently, the relevant question is whether
these statutes, taken together as one uniform system of
compensation for government employees, comply with the requisites
of the equal protection guaranty.
Rational Basis Test Appropriate to the Case at Bar

Turning then to the determination of the standard appropriate to the
issues presented by the instant petition, it is immediately apparent
that Intermediate Scrutiny, inasmuch as its application has been
limited only to classifications based on gender and illegitimacy,
finds no application to the case at bar.
The choice of the appropriate standard is thus narrowed between
Strict Scrutiny and the Rational Basis Test. As has been observed,
Strict Scrutiny has been applied in the American context when a
legislative classification intrudes upon a fundamental right or
classifies on the basis of an inherently suspect characteristic.
Strict Scrutiny cannot be applied in the case at bar since nowhere
in the petition does petitioner allege that Article II, Section 15 (c) of
the New Central Bank Act burdens a fundamental right of its
members. The petition merely states that “the proviso in question
violates the right to equal protection of the laws of 158
the BSP rank and
file employees who are members of the petitioner.” While it is true
that the Equal Protection Clause is found in the Bill of Rights of
both the American and Philippine Constitutions, for strict scrutiny to
apply there must be a violation of a Constitutional right other than
the right to equal protection of the laws. To hold otherwise would be
absurd as any invocation of a violation of the equal
_______________
158 Rollo at p. 5.
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protection clause would automatically result in the application of

Strict Scrutiny. 159
In Vacco v. Quill, several physicians challenged a New York
statute which prohibits assistance to suicide. They argued that
although it was consistent with the standards of their medical
practice to prescribe lethal medication for mentally competent,
terminally ill patients who are suffering great pain and desire a
doctor’s help in taking their own lives, they are
160
deterred from doing
so by New York’s ban on assisting suicide. They contend that
because New York permits a competent person to refuse life-
sustaining medical treatment and because the refusal of such
treatment is “essentially the same thing” as physician-assisted
161
suicide, the ban violates the Equal Protection Clause. A unanimous
U.S. Supreme Court applied the Rational Basis Test as the statute
did not infringe fundamental rights. Moreover, the Court held that
the guarantee of equal protection is not a source of substantive rights
or liberties.
The Equal Protection Clause commands that no State shall “deny to any
person within its jurisdiction the equal protection of the laws.” This
provision creates no substantive rights. San Antonio Independent School
Dist. v. Rodriguez, 411 U.S. 1, 33, 93 S.Ct. 1278, 1296-1297, 36 L.Ed.2d 16
(1973); id., at 59, 93 S.Ct., at 1310 (Stewart, J., concurring). Instead, it
embodies a general rule that States must treat like cases alike but may treat
unlike cases accordingly. Plyler v. Doe, 457 U.S. 202, 216, 102 S.Ct. 2382,
2394, 72 L.Ed.2d 786 (1982) (“ ‘[T]he Constitution does not require things
which are different in fact or opinion to be treated in law as though they
were the same’ ”) (quoting Tigner v. Texas, 310 U.S. 141, 147, 60 S.Ct. 879,
882, 84 L.Ed. 1124 [1940]). If a legislative classification or distinction
“neither burdens a fundamental right nor targets a suspect class, we will
uphold [it] so long as it bears a rational relation to some legitimate end.”
Romer v. Evans, 517 U.S. 620, 631, 116 S.Ct. 1620, 1627, 134 L.Ed.2d 855
(1996).
_______________
159 521 U.S. 793 (1997).

160 Id., at p. 797.
161 Id., at p. 798.
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New York’s statutes outlawing assisting suicide affect and address

matters of profound significance to all New Yorkers alike. They neither
infringe fundamental rights nor involve suspect classifications.
Washington v. Glucksberg, at 719-728, 117 S.Ct., at 2267-2271; see 80 F.3d,
at 726; San Antonio School Dist., 411 U.S., at 28, 93 S.Ct, at 1294 (“The
system of alleged discrimination and the class it defines have none of the
traditional indicia of suspectness”); id., at 33-35, 93_ S.Ct., at 1296-1298
(courts must look to the Constitution, not the “importance” of the asserted
right, when deciding whether an asserted right is “fundamental”). These
laws are therefore entitled to a “strong presumption of validity.” Heller 162
v.
Doe, 509 U.S. 312, 319, 113 S.Ct. 2637, 2642, 125 L.Ed.2d 257 (1993).
Neither does the main opinion identify what fundamental right the
challenged proviso of the New Central Bank Act infringes upon.
Instead the ponencia cites the following Constitutional provisions:
PREAMBLE:
We, the sovereign Filipino people, imploring the aid of Almighty God, in
order to build a just and humane society and establish a Government that
shall embody our ideals and aspirations, promote the common good,
conserve and develop our patrimony, and secure to ourselves and our
posterity the blessings of independence and democracy under the rule of law
and a regime of truth, justice, freedom, love, equality, and peace, do ordain
and promulgate this Constitution.
ARTICLE II: Declaration of Principles and State Policies
SECTION 9. The State shall promote a just and dynamic social order
that will ensure the prosperity and independence of the nation and free the
people from poverty through policies that provide adequate social service,
promote full employment, a rising standard of living, and an improved
quality of life for all.
SECTION 10. The State shall promote social justice in all phases of
national development.
_______________
162 Id., at pp. 799-800.
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SECTION 11. The State values the dignity of every human person and
guarantees full respect for human rights.
SECTION 18. The State affirms labor as a primary social economic
force. It shall protect the rights of workers and promote their welfare.
ARTICLE III: Bill of Rights

SECTION 1. No person shall be deprived of life, liberty, or property
without due process of law, nor shall any person be denied the equal
protection of the laws.
ARTICLE IX: Constitutional Commissions
B. The Civil Service Commission
SECTION 5. The Congress shall provide for the standardization of
compensation of government officials, including those in government-
owned or controlled corporations with original charters, taking into account
the nature of the responsibilities pertaining to, and the qualifications
required for their positions.
ARTICLE XII: National Economy and Patrimony
SECTION 1. The goals of the national economy are a more equitable
distribution of opportunities, income, and wealth; a sustained increase in the
amount of goods and services produced by the nation for the benefit of the
people; and an expanding productivity as the key raising the quality of life
for all, especially the underprivileged.
The State shall promote industrialization and full employment based on
sound agricultural development and agrarian reform, through industries that
make full and efficient use of human and natural resources, and which are
competitive in both domestic and foreign markets. However, the State shall
protect Filipino enterprises against unfair foreign competition and trade
practices.
In pursuit of these goals, all sectors of the economy and all regions of the
country shall be given optimum opportunity to develop. Private enterprises,
including corporations, cooperatives, and similar collective organizations,
shall be encouraged to broaden the base of their ownership.
SECTION 22. Acts which circumvent or negate any of the provisions of
this Article shall be considered inimical to the national interest and subject
to criminal and civil sanctions, as may be provided by law.
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ARTICLE XIII: Social Justice and Human Rights

SECTION 1. The Congress shall give highest priority to the enactment
of measures that protect and enhance the right of all the people to human
dignity, reduce social, economic, and political inequalities, and remove
cultural inequities by equitably diffusing wealth and political power for the
common good.
To this end, the State shall regulate the acquisition, ownership, use, and
disposition of property and its increments.
Labor
SECTION 3. The State shall afford full protection to labor, local and
oversea, organized and unorganized, and promote full employment and
equality of employment opportunities for all.
It shall guarantee the rights of all workers to self-organizations, and
peaceful concerted activities, including the right to strike in accordance with
law. They shall be entitled to security of tenure, humane conditions of work,
and a living wage. They shall also participate in policy and decision-making
processes affecting their rights and benefits as may be provided by law.
The State shall promote the principle of shared responsibility between
workers and employers and the preferential use of voluntary modes in
settling disputes, including conciliation, and shall enforce their mutual
compliance therewith to foster industrial peace.
The State shall regulate the relations between workers and employers,
recognizing the right of labor to its just share in the fruits of production and
the right of enterprises to reasonable returns on investments, and to
expansion and growth.
With the exception of Section I, Article III and Section 3, Article

XIII, the foregoing Constitutional provisions do not 163
embody any
particular right but espouse principles and policies. As previously
discussed, mere reliance on the Equal
_______________
163 It should be noted however that not all rights enumerated in the Constitution
are found in the Bill of Rights. Though the right to a balanced and healthful ecology
is found under the Declaration of Principles and States Policies and not under the Bill
of Rights, this Court in Oposa v. Factoran, Jr. (224 SCRA 792, 804-805 [1993]) held
534

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Protection Clause which is in the Bill of Rights is not sufficient to

justify the application of Strict Scrutiny. While Section 3 of Article
XIII enumerates the seven basic rights of workers—the right to
organize, the right to conduct collective bargaining or negotiation
with management, the right to engage in peaceful concerted
activities including the right to strike in accordance with law, the
right to enjoy security of tenure, the right to work under humane
conditions, the right to receive a living wage, and the right to
participate in policy and decision-processes affecting their rights and
benefits as may be provided by law—I fail to see how Article II,
Section 15 (c) of the New Central Bank Act can impinge on any of
these seven rights.
Another reason why Strict Scrutiny is inappropriate is the

absence of a classification which is based on an inherently suspect
characteristic. There is no suspect class involved in the case at bar.
By no stretch of the imagination can the rank and file employees of
the BSP be considered a suspect class—a class saddled with such
disabilities, or subjected to such a history of purposeful unequal
treatment, or relegated to such a position of political powerlessness
as to command extraordinary protection from the majoritarian
political process. As examined earlier, in applying this definition of
suspect class, the U.S. Supreme Court has labeled very few
classifications as suspect. In particular, the Court has limited the
term suspect class to classifications based on race or national origin,
alienage and religion. It is at once apparent that Article II, Section
15 (c) of the New Central Bank Act, in exempting the BSP officers
from the coverage of the Salary Standardization Law and not
exempting the rank and file employees of the BSP, does not classify
based on race, national origin, alienage or religion.
_______________
that the said right was legally enforceable without need for further legislation—a
self-executing provision.
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The main opinion however seeks to justify the application of Strict

Scrutiny on the theory that the rank and file employees of the BSP
constitute a suspect class “considering that majority (if not all) of the
rank and file employees consist of people whose status and rank in
life are less and limited, especially in terms of job marketability, it is
they—and not the officers—who have the real economic and
financial need for the adjustment.” The ponencia concludes that
since the challenged proviso operates on the basis of the salary grade
or office-employee status a distinction based on economic class and
status is created.
With all due respect, the main opinion fails to show that financial
need is an inherently suspect trait. The claim that the rank and file
employees of the BSP are an economically disadvantaged group is
unsupported by the facts on record. Moreover, as priorly discussed,
classifications based on financial need have been characterized by
the U.S. Supreme Court as not suspect. Instead, the American Court
has resorted to the Rational Basis Test.
The case164
of San Antonio Independent School District v.
Rodriquez is instructive. In the said case, the financing of public,
elementary and secondary schools in Texas is a product of state and

local participation. Almost half of the revenues are derived from a
largely state-funded program designed to provide a basic minimum
educational offering in every school. Each district supplements state
aid through an ad valorem tax on property within its jurisdiction. A
class action suit was brought on behalf of school children said to be
members of poor families who reside in school districts having a
low property tax base. They argue that the Texas system’s reliance
on local property taxation favors the more affluent and violates the
equal protection clause because of substantial inter-district
disparities in per pupil expenditures resulting primarily from
differences in the value of assessable prop-
_______________
164 Id., at p. 29.
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erty among the districts. The Court held that wealth discrimination165
alone does not provide adequate basis for invoking strict scrutiny.
The wealth discrimination discovered by the District Court in this case, and
by several other courts that have recently struck down school-financing laws
in other States, is quite unlike any of the forms of wealth discrimination
heretofore reviewed by this Court. Rather than focusing on the unique
features of the alleged discrimination, the courts in these cases have
virtually assumed their findings of a suspect classification through a
simplistic process of analysis: since, under the traditional systems of
financing public schools, some poorer people receive less expensive
educations than other more affluent people, these systems discriminate on
the basis of wealth. This approach largely ignores the hard threshold
questions, including whether it makes a difference for purposes of
consideration under the Constitution that the class of disadvantaged
‘poor’ cannot be identified or defined in customary equal protection
terms, and whether the relative—rather than absolute—nature of the
asserted deprivation is of significant consequence. Before a State’s laws
and the justifications for the classifications they create are subjected to strict
judicial scrutiny, we think these threshold considerations must be analyzed
more closely than they were in the court below.
The case comes to us with no definitive description of the classifying
facts or delineation of the disfavored class. Examination of the District
Court’s opinion and of appellees’ complaint, briefs, and contentions at oral
argument suggests, however, at least three ways in which the discrimination
claimed here might be described. The Texas system of school financing

might be regarded as discriminating (1) against ‘poor’ persons whose
incomes fall below some identifiable level of poverty or who might be
characterized as functionally indigent, or (2) against those who are
relatively poorer than others, or (3) against all those who, irrespective
of their personal incomes, happen to reside in relatively poorer school
districts. Our task must be to ascertain whether, in fact, the Texas system
has
_______________
165 411 U.S. 1, 29 (1973).
537
VOL. 446, DECEMBER 15, 2004 537

been shown to discriminate on any of these possible bases and, if so,

whether the resulting classification may be regarded as suspect.
The precedents of this Court provide the proper starting point. The
individuals, or groups of individuals, who constituted the class
discriminated against in our prior cases shared two distinguishing
characteristics: because of their impecunity they were completely unable
to pay for some desired benefit, and as a consequence, they sustained an
absolute deprivation of a meaningful opportunity to enjoy that benefit. In
Griffin v. Illinois, 351 U.S. 12, 76 S.Ct. 585, 100 L.Ed. 891 (1956), and its
progeny the Court invalidated state laws that prevented an indigent criminal
defendant from acquiring a transcript, or an adequate substitute for a
transcript, for use at several stages of the trial and appeal process. The
payment requirements in each case were found to occasion de facto
discrimination against those who, because of their indigency, were totally
unable to pay for transcripts. And the Court in each case emphasized that no
constitutional violation would have been shown if the State had provided
some ‘adequate substitute’ for a full stenographic transcript.
xxx
Only appellees’ first possible basis for describing the class
disadvantaged by the Texas school-financing system-discrimination against
a class of defineably ‘poor’ persons—might arguably meet the criteria
established in these prior cases. Even a cursory examination, however,
demonstrates that neither of the two distinguishing characteristics of wealth
classifications can be found here. First in support of their charge that the
system discriminates against the ‘poor,’ appellees have made no effort to
demonstrate that it operates to the peculiar disadvantage of any class
fairly definable as indigent, or as composed of persons whose incomes are
beneath any designated poverty level. Indeed, there is reason to believe that
the poorest families are not necessarily clustered in the poorest property
districts. x x x
Second, neither appellees nor the District Court addressed the fact that,
unlike each of the foregoing cases, lack of personal resources has not
occasioned an absolute deprivation of the desired benefit. The argument
here is not that the children in districts having relatively low assessable
property values are receiving no public education; rather, it is that they are
receiving a poorer quality education than that available to children in
districts
538

having more assessable wealth. Apart from the unsettled and disputed
question whether the quality of education may be determined by the amount
of money expended for it, a sufficient answer to appellees’ argument is that,
at least where wealth is involved, the Equal Protection Clause does not
require absolute equality or precisely equal advantages. Nor indeed, in
view of the infinite variables affecting the educational process, can any
system assure equal quality of education except in the most relative sense.
Texas asserts that the Minimum Foundation Program provides an ‘adequate’
education for all children in the State. By providing 12 years of free public-
school education, and by assuring teachers, books, transportation, and
operating funds, the Texas Legislature has endeavored to ‘guarantee, for the
welfare of the state as a whole, that all people shall have at least an adequate
program of education. x x x
For these two reasons—the absence of any evidence that the financing
system discriminates against any definable category of ‘poor’ people or
that it results in the absolute deprivation of education—the disadvantaged
class is not susceptible of identification in traditional terms.
xxx
This brings us, then, to the third way in which the classification scheme
might be defined—district wealth discrimination. Since the only correlation
indicated by the evidence is between district property wealth and
expenditures, it may be argued that discrimination might be found without
regard to the individual income characteristics of district residents.
Assuming a perfect correlation between district property wealth and
expenditures from top to bottom, the disadvantaged class might be viewed
as encompassing every child in every district except the district that has the
most assessable wealth and spends the most on education. Alternatively, as
suggested in Mr. Justice MARSHALL’S dissenting opinion the class might
be defined more restrictively to include children in districts with assessable
property which falls below the statewide average, or median, or below some
other artificially defined level.
However described, it is clear that appellees’ suit asks this Court to
extend its most exacting scrutiny to review a system that allegedly
discriminates against a large, diverse, and amorphous class, unified only
by the common factor of residence in districts that happen to have less

taxable wealth
539
VOL. 446, DECEMBER 15, 2004 539

than other districts. The system of alleged discrimination and the class it
defines have none of the traditional indicia of suspectness: the class is not
saddled with such disabilities, or subjected to such a history of purposeful
unequal treatment or relegated to such a position of political
powerlessness as to command extraordinary protection from the
majoritarian political process.
We thus conclude that the Texas system does not operate to the peculiar
disadvantage of any suspect class. But in recognition of the fact that this
Court has never heretofore held that wealth discrimination alone provides
an adequate basis for invoking166strict scrutiny, appellees have not relied
solely on this contention. x x x (Emphasis and italics supplied; citations
and footnotes omitted)
To further bolster the theory that a classification based on financial

need is inherently suspect, the main opinion cites a number of
international conventions as well as foreign and international
jurisprudence, but to no avail.
The reliance by the main opinion on these international
conventions is misplaced. The ponencia cites the American
Convention on Human Rights, the African Charter of Human and
Peoples’ Rights, the European Convention on Human Rights, the
European Social Charter of 1996 and the Arab Charter on Human
Rights of 1994. It should be noted that the Philippines is not a
signatory to any of these conventions.
The main opinion also cites the Universal Declaration of Human
Rights, the International Covenant on Civil and Political Rights, the
International Covenant on Economic, Social and Cultural Rights, the
International Convention on the Elimination of all Forms of Racial
Discrimination, the Convention on the Elimination of all Forms of
Discrimination against Women and the Convention on the Rights of
the Child. While it is true that these instruments which the
Philippines is a party to include provisions prohibiting discrimi-
_______________
166 Id., at pp. 18-29.
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Pilipinas
nation, none of them explicitly prohibits discrimination on the basis

of financial need.
While certain conventions mention that distinctions based on
“other status” is prohibited, the scope of this term is undefined. Even
Gay Moon, on whom the main opinion relies, explains thus:
The [UN Human Rights] Committee provides little guidance on how it

decides whether a difference in treatment comes within the rubric of167“other
status”. Its approach to this issue lacks consistency and transparency.
Furthermore, the U.K. cases cited in the main opinion are not in
point since these cases do not support the thesis that classification
based on financial need is inherently suspect. In Hooper v. Secretary
of State for Work and Pension168 the discrimination in question was
based on gender, that is, whether the widowers are entitled to the
pension granted by the State to169
widows. In Abdulaziz, Cabales and
Balkandali v. United Kingdom the discrimination was 170
based on sex
and race; In Wilson and Others v. United Kingdom the questioned
law allows employers to discriminate against their employees who
were trade union members.
Notably, the main opinion, after discussing lengthily the
developments in equal protection analysis in the United States and
Europe, and finding no support thereto, incongruously concluded
that “in resolving constitutional disputes, this Court should not be
beguiled by foreign jurisprudence some of which are hardly
applicable because they have171 been dictated by different
constitutional settings and needs.” After an
_______________
167 Gay Moon, Complying with its International Human Rights Obligations: The
United Kingdom and Article 26 of the International Covenant on Civil and Political
Rights, E.H.R.L.R. 2003, 3, 283-307.
168 (2002) U.K.H.R.R. 785; (2002) EWHC 191).
169 (1985) 7 E.H.R.R. 471.
170 (2002) 35 E.H.R.R. 20).
171 Main Opinion at 56.
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excessive dependence by the main opinion to American

jurisprudence it contradicted itself when it stated that “American
jurisprudence and authorities, much less the American Constitution,
are of dubious application for these are no longer controlling
172
within
our jurisdiction and have only limited persuasive merit.”
Intrinsic Constitutionality of Section 15(c) of the New Central Bank

Act
Is the classification between the officers and rank and file employees
in Section 15 (c) of the New Central Bank Act in violation of the
equal protection clause?
Petitioner, contending that there are no substantial distinctions
between these two groups of BSP employees, argues that it is.
On the other hand, the main opinion, applying the Rational Basis
Test, finds the classification between the executive level and the
rank and file of the BSP to be based on substantial and real
differences which are germane to the purpose of the law. Thus, it
concludes:
In the case at bar, it is clear in the legislative deliberations that the

exemption of officers (SG 20 and above) from the SSL was intended to
address the BSP’s lack of competitiveness in terms of attracting competent
officers and executives. It was not intended to discriminate against the rank-
and-file. If the end-result did in fact lead to a disparity of treatment between
the officers and the rank-and-file in terms of salaries and benefits, the
discrimination or distinction has a rational basis and is not palpably, purely,
and entirely arbitrary in the legislative sense.
and declines to grant the petition on this ground.

For her part, Justice Chico-Nazario, in her separate concurring
opinion, sides with petitioner believing that the dif-
_______________
172 Id., at p. 56.
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ference in treatment is “purely arbitrary” and thus violates the

Constitutional guaranty of equal protection of the laws.
On this point, I am in accord with the main opinion.
For ease of reference, Section 15 (c) is reproduced hereunder:
SEC. 15. Exercise of Authority.—In the exercise of its authority, the

Monetary Board shall:
xxx
personnel. Such system shall aim to establish professionalism and
excellence at all levels of the Bangko Sentral in accordance with sound
principles of management.
surveys and subject to the Board’s approval, shall be instituted as an
integral component of the Bangko Sentral’s human resource
development program: Provided, That the Monetary Board shall make its
own system conform as closely as possible with the principles provided for
under Republic Act No. 6758. Provided, however, That compensation and
wage structure of employees whose positions fall under salary grade 19
and below shall be in accordance with the rates prescribed under
Republic Act No. 6758. (Emphasis supplied)
It is readily apparent that Section 15 (c), by implicitly exempting the

executive corps of the BSP (those with SG 20 and above) from the
Compensation Classification System under the Salary
Standardization Law, makes a classification between the officers and
the rank and file of the BSP and, who, like all other government
employees, are squarely within the ambit of the Compensation
Classification System by the Salary Standardization Law.
To be valid, therefore, the difference in treatment as to
compensation between the executive level and the rank and file of
the BSP must be based on real differences between the two groups.
Moreover, this classification must also have a
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rational relationship to the purpose of the New Central Bank Act.

An examination of the legislative history of the New Central
Bank Act may thus prove useful.
Legislative History of the New Central Bank Act

An examination of the legislative deliberations of both the House of
Representatives and the Senate shows that it was never the intention
of both houses to provide all BSP personnel with a blanket
exemption from the coverage of the Salary Standardization Law.
Thus, while House Bill No. 7037 (the House of Representatives
version of the New Central Bank Act) did not expressly mention that
the Salary Standardization Law was to apply to a particular category
of BSP employees, the deliberations in the lower house show that
the position and compensation plans which the BSP was authorized
to adopt were to be in accordance with the provisions of applicable

laws, including the Salary Standardization Law:
MR. JAVIER (E.). No, Mr. Speaker, we have that phrase in Section
14 (c). The power to organize, the power to classify positions, the
power to adopt compensation plans are subject to the provisions
of applicable laws. The bill is clear, so I do not think we should
have a quarrel on whether the Monetary Board has absolute
power over the organization and compensation plans of the
Bangko Sentral ng Pilipinas. Of course, this power is subject to
applicable laws, and one of these laws is the Salary
Standardization Law, Mr. Speaker.
MR. ARROYO. To cut the argument short, Mr. Speaker, in effect, he
is now saying that the proposed bill will authorize the Bangko
Sentral to fix its own salary scale for its employees?
MR. JAVIER (E.). That is correct, Mr. Speaker, but in accordance
with the provisions of applicable laws.
544

Pilipinas
MR. ARROYO. I am only asking if it will be able to fix its own

salary scale.
MR. JAVIER (E.). Yes, in accordance with the provisions of
applicable laws.
MR. ARROYO. May I know Mr. Speaker, what is the applicable
law that will curtail this?
MR. JAVIER (E). The Salary Standardization Law.
MR. ARROYO. So, the Gentleman is now suggesting that the
Standardization Law will apply to
173
this?
MR. JAVIER (E.). Yes, Mr. Speaker. (Emphasis supplied)
In fact, the 174

deliberations show that, in keeping with the recognition
in Section 9 of the Salary Standardization Law
_______________
173 V Records of the House of Representatives, 9th Congress, 1st Session 182
(March 2, 1993).
174 For ease of reference, Section 9 of the Salary Standardization Law is
reproduced hereunder:
SECTION 9. Salary Grade Assignments for Other Positions.—For positions below the
Officials mentioned under Section 8 hereof and their equivalent, whether in the National
Government, local government units, government-owned or controlled corporations or
financial institutions, the Department of Budget and Management is hereby directed to prepare
the Index of Occupational Services to be guided by the Benchmark Position Schedule

prescribed hereunder and the following factors: (1) the education and experience required to
perform the duties and responsibilities of the positions; (2) the nature and complexity of the
work to be performed; (3) the kind of supervision received; (4) mental and/or physical strain
required in the completion of the work; (5) nature and extent of internal and external
relationships; (6) kind of supervision exercised; (7) decision-making responsibility; (8)
responsibility for accuracy of records and reports; (9) accountability for funds, properties and
equipment; and (10) hardship, hazard and personal risk involved in the job. x x x
In no case shall the salary of the chairman, president, general manager or
administrator, and the board
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Pilipinas
that compensation higher than SG 30 might be necessary in certain

exceptional cases to attract and retain competent toplevel personnel,
the initial intention of the drafters of the House Bill was to exempt
only the Governor and the Monetary Board from the coverage of the
Compensation Classification System:
MR. LACSON. Mr. Speaker, Section 12 mentions only the

remuneration of the governor and the members of the
monetary board.
MR. CHAVES. So, it will not cover any other employees of the
Central Bank because the limitation set forth under the
Salary Standardization Law will apply to them. I just want to
make that sure because if it is not clear in the law, then we
can refer to the debates on the floor.
MR. LACSON. Mr. Speaker, Section 12 mentions only the
governor and the members of the monetary board. All the
rest in the lower echelons are covered by law.
MR. CHAVES. In other words, I just want to make it clear whether
or not they are covered by the Salary Standardization Law
because later on if there is any conflict on the remuneration of
employees lower than the governor and members of the
Monetary Board, we have limits set under the Salary
Standardization Law. 175
MR. LACSON. Under the Salary Standardization Law. (Emphasis
and italics supplied)
The application of the Salary Standardization Law to all other

personnel of the BSP raised some concerns, however, on
_______________
of directors of government-owned or controlled corporations and financial institutions

exceed Salary Grade 30: Provided, That the President may, in truly exceptional cases,
approve higher compensation for the aforesaid officials. (Emphasis and italics supplied)
175 Id., at p. 787 (March 31, 1993).
546

Pilipinas
the part of some legislators. They felt the need to reconcile the
demand for competent people to help in the management of the 176
economy with the provisions of the Salary Standardization Law.
The Senate thus sought to address these concerns by allowing the
BSP to determine a separate salary scale for the executive level.
The purpose behind the exemption of officers with SG 20 and
above from the Salary Standardization Law was to increase the
BSP’s competitiveness in the industry’s labor market such that by
offering attractive salary packages, top executives and officials
would be enticed and competent officers would be deterred from
leaving.
Senator Maceda. x x x
We have a salary grade range, if I am not
mistaken, Mr. President, up to Grade 32. Those
executive
types are probably between Grade 23 to Grade
32.
If we really want to make sure that the vice-
president types of the banks will come in, it
should
be cut off at around Grade 23 level and that the
Standardization Act should still refer to those
around Grade 22 and below. But if we cut it off at
Grade 9 and below, we are just hitting only the
drivers,
the janitors, the filing clerks, the messengers.
The Gentleman will only be cutting off a part of my
heart again if he does that. My heart
bleeds for this people, Mr. President.
Senator If that is an amendment, Mr. President, I
Osmeña. move that we reconsider the prior approval of my
amendment which was accepted by the Sponsor,
and I
will accept the amendment of Senator Maceda that
the
grade level should not be Grade 9 but Grade 22

instead.
Senator After consulting the principal Author
Maceda. of the Standardization Law, the distinguished
Majority Leader, he confirms that the executive
group
_______________
176 VI Records of the House of Representatives, 9th Congress, 1st Session 353
(May 18, 1993).
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Pilipinas
is really Grade 23 and above. I think that is where the

Gentleman really wants to have some leeway to get some
people in at the executive level. So I propose
177
the amendment
to the amendment to Grade 22 and below. (Italics supplied;
emphasis in the original)
Ultimately, the Bicameral Conference Committee on Banks, in

consultation with the BSP, determined that the BSP’s executive level
began at SG 20 and resolved to exempt those at that level and above
from the Compensation Classification System under the Salary
Standardization Law, leaving the rank-and-file employees, or those
personnel with a SG of 19 and below, under the coverage of the said
compensation system. This is clear from the deliberations as
reproduced by the petitioner itself:
CHAIRMAN xxx xxx xxx

ROCO.
Number 4, on compensation of personnel. We have
checked. The exemption from the Salary
Standardization Law shall apply only from Salary
Grade 21 and above. The division chief is salary
grade 22.
CHAIRMAN I understood, Mr. Chairman, from the Central
ZAMORA. Bank itself that their range for rank-and-file starts
from range 19 and downward. So what we should
propose is that we subject all personnel to salary
standardization starting from range 19 going
down, and exempt them from range 20 and going
up.
CHAIRMAN That will cover also assistant division chiefs?

ROCO.
CHAIRMAN That includes assistant division chiefs, division
ZAMORA. chiefs, and obviously higher personnel.
CHAIRMAN Yes, because in terms of x x x We are being more
ROCO. generous than original. So assistant division
_______________
177 IV Record of the Senate, 9th Congress, 1st Session 1986-1987 (June 5, 1993).
548

Pilipinas
chiefs shall be exempted

178
already from the salary
standardization. (Emphasis and italics supplied)
The Classification is Based on Real Differences between the

Officers and the Rank and File of the BSP, and is Germane to the
Purpose of the Law
179
As pointed out by the Office of the Solicitor General, the
foregoing classification of BSP personnel into managerial and rank-
and-file is based on real differences as to the scope of work and
degree of responsibility between these two classes of employees. At
the same time, the exemption of the BSP managerial personnel from
the Salary Standardization Law bears180a rational relationship to the
purpose of the New Central Bank Act. In the words of the Solicitor
General:
x x x Article II, Section 15 (c) of RA 7653 was purposely adopted to

attract highly competent personnel, to ensure professionalism and
excellence at the BSP as well as to ensure its independence through fiscal
and administrative autonomy in the conduct of monetary policy. This
purpose is undoubtedly being assured by exempting the
executive/management level from the Salary Standardization Law so
that the best and the brightest may be induced to join the BSP. After all,
the managers/executives are the ones responsible for running the BSP and
for
_______________
178 Transcript of Stenographic Notes (TSN), Bicameral Conference Committee on Banks

(CMA), June 9, 1993, 1:20 p.m. at p. 39.
179 Rollo at pp. 82-83.
180 Section 1. Declaration of Policy.—The State shall maintain a central monetary authority
that shall function and operate as an independent and accountable body corporate in the
discharge of its mandated responsibilities concerning money, banking and credit. In line with
this policy, and considering its unique functions and responsibilities, the central monetary
authority established under this Act, while being a government-owned corporation, shall enjoy
fiscal and administrative autonomy.
549
VOL. 446, DECEMBER 15, 2004 549

181
implementing its monetary policies. (Emphasis and italics supplied)
In the light of the foregoing, Justice Chico-Nazario’s conclusion that

the distinction is “purely arbitrary” does not appear to hold water.
In support of her view, Justice Chico-Nazario cites Section 5 (a)
of the Salary Standardization Law, which provides that positions in
the Professional Supervisory Category are assigned SG 9 to SG 33.
Thus, she argues:
x x x SG 20 and up do not differ from SG 19 and down in terms of technical

and professional expertise needed as the entire range of positions all require
intense and thorough knowledge of a specialized field usually acquired from
completion of a bachelor’s degree or higher courses.
Consequently, if BSP needs an exemption from R.A. No. 6758 for key
positions in order that it may hire the best and brightest economists,
exemption must not begin only in SG 20.
However, it is clear that while it is possible to group classes of

positions according to the four main categories as provided under
Section 5 of the Salary Standardization Law, viz.:
SECTION 5. Position Classification System.—The Position Classification

System shall consist of classes of positions grouped into four main
categories, namely: professional supervisory, professional non-
supervisory, sub-professional supervisory, and sub-professional non-
supervisory, and the rules and regulations for its implementation.
Categorization of these classes of positions shall be guided by the
following considerations:
(a) Professional Supervisory Category.—This category includes
responsible positions of a managerial character involving the exercise of
management functions such as planning, organizing, directing, coordinating,
controlling and overseeing within delegated
_______________
181 Rollo at pp. 83-84.
550

authority the activities of an organization, a unit thereof or of a group,

requiring some degree of professional, technical or scientific knowledge and
experience, application of managerial or supervisory skills required to carry
out their basic duties and responsibilities involving functional guidance and
control, leadership, as well as line supervision. These positions require
intensive and thorough knowledge of a specialized field usually acquired
from completion of a bachelor’s degree or higher degree courses.
The positions in this category are assigned Salary Grade 9 to Salary
Grade 33.
(b) Professional Non-Supervisory Category.—This category includes

positions performing task which usually require the exercise of a
particular profession or application of knowledge acquired through
formal training in a particular field or just the exercise of a natural,
creative and artistic ability or talent in literature, drama, music and
other branches of arts and letters. Also included are positions
involved in research and application of professional knowledge and
methods to a variety of technological, economic, social, industrial
and governmental functions; the performance of technical tasks
auxiliary to scientific research and development; and in the
performance of religious, educational, legal, artistic or literary
functions.
These positions require thorough knowledge in the field of arts and
sciences or learning acquired through completion of at least four
(4) years of college studies.
Grade 30.
(c) Sub-Professional Supervisory Category.—This category includes
positions performing supervisory functions over a group of
employees engaged in responsible work along technical, manual or
clerical lines of work which are short of professional work,
requiring training and moderate experience or lower training but
considerable experience and knowledge of a limited subject matter
or skills in arts, crafts or trades. These positions require knowledge
acquired from secondary or vocational education or completion of
up to two (2) years of college education.
Grade 18.
(d) Sub-Professional Non-Supervisory Category.—This category
includes positions involves in structured work in support of
551
VOL. 446, DECEMBER 15, 2004 551

office or fiscal operations or those engaged in crafts, trades or manual

work. These positions usually require skills acquired through training and
experience of completion of elementary education, secondary or vocational
education or completion of up to two (2) years of college education.
Grade 10. (Emphasis supplied)
the same does not preclude classifying classes of positions, although

different with respect to kind or subject matter of work, according to
level of difficulty and responsibility and 182
level of qualification
requirements—that is, according to grade.
It should be borne in mind that the concept of “grade” from the
Old Salary Standardization Law is maintained in the present one.
Thus Sections 8 and 9 of the present Salary Standardization Law
provide for the general assignment of the various salary grades to
certain positions in the civil service according to the degree of
responsibility and level of qualifications required:
SECTION 8. Salaries of Constitutional Officials and their Equivalent.—

Pursuant to Section 17, Article XVIII of the Constitution, the salary of the
following officials shall be in accordance with the Salary Grades indicated
hereunder:
Salary Grades
President of the Philippines 33
_______________
182 Vide: Section 3 (h), P.D. 995, viz.:
SECTION 3. Definition of Terms.—As used in this Decree, the following shall mean:
xxx
h. Grade—Includes all classes of positions which, although different with respect to kind or
subject matter of work, are sufficiently equivalent as to level of difficulty and responsibility and
level of qualification requirements of the work to warrant the inclusion of such classes of
positions within one range of basic compensation.
552

Pilipinas
Vice-President of the Philippines 32

President of the Senate 32
Speaker of the House of Representatives 32
Chief Justice of the Supreme Court 32
Senator 31
Member of the House of Representatives 31
Associate Justices of the Supreme Court 31
Chairman of a Constitutional Commission under Article IX, 1987 31
Constitution
Member of a Constitutional Commission under Article IX, 1987 30
Constitution
The Department of Budget and Management is hereby authorized to

determine the officials who are of equivalent rank to the foregoing Officials,
where applicable, and may be assigned the same Salary Grades based on the
following guidelines:
GRADE 33—This Grade is assigned to the President of the Republic of the

Philippines as the highest position in the government. No other position in the
government service is considered to be of equivalent rank.
GRADE 32—This Grade is limited to the Vice-President of the Republic of the
Philippines and those positions which head the Legislative and Judicial Branches of
the government, namely: the Senate President, Speaker of the House of
Representatives and Chief Justice of the Supreme Court. No other positions in the
government service are considered to be of equivalent rank.
GRADE 31—This Grade is assigned to Senators and Members of the House of
Representatives and those with equivalent rank as follows: the Executive Secretary,
Department Secretary, Presidential Spokesman, Ombudsman, Press Secretary,
Presidential Assistant with Cabinet Rank, Presidential Adviser, National Economic
and Development Authority Director General, Court of Appeals Presiding Justice,
Sandiganbayan Presiding Justice, Secretary of the Senate, Secretary of the House of
Representatives, and President of the University of the Philippines.
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Pilipinas
An entity with a broad functional scope of operations and wide area of coverage
ranging from top level policy formulation to the provision of technical and
administrative support to the units under it, with functions comparable to the
aforesaid positions in the preceding paragraph, can be considered organizationally
equivalent to a Department, and its head to that of a Department Secretary.
GRADE 30—Positions included are those of Department Undersecretary,
Cabinet Undersecretary, Presidential Assistant, Solicitor General, Government
Corporate Counsel, Court Administrator of the Supreme Court, Chief of Staff of the
Office of the Vice-President, National Economic and Development Authority

Deputy Director General, Presidential Management Staff Executive Director, Deputy
Ombudsman, Associate Justices of the Court of Appeals, Associate Justices of the
Sandiganbayan, Special Prosecutor, University of the Philippines Executive Vice-
President, Mindanao State University President, Polytechnic University of the
Philippines President of and President of other state universities and colleges of the
same class.
Heads of councils, commissions, boards and similar entities whose operations cut
across offices or departments or are serving a sizeable portion of the general public
and whose coverage is nationwide or whose functions are comparable to the
aforecited positions in the preceding paragraph, may be placed at this level.
The equivalent rank of positions not mentioned herein or those that may be
created hereafter shall be determined based on these guidelines.
The Provisions of this Act as far as they upgrade the compensation of
Constitutional Officials and their equivalent under this section shall,
however, take effect only in accordance with the Constitution: Provided,
That with respect to the President and Vice-President of the Republic of the
Philippines, the President of the Senate, the Speaker of the House of
Representatives, the Senators, and the Members of the House of
Representatives, no increase in salary shall take effect even beyond 1992,
until this Act is amended: Provided, further, That the implementation of this
Act with respect to Assistant Secretaries and Undersecretaries shall be
deferred for one (1) year from the effectivity of this Act and for Secretaries,
until
554

July 1, 1992: Provided, finally, That in the case of Assistant Secretaries,

Undersecretaries and Secretaries, the salary rates authorized herein shall be
used in the computation of the retirement benefits for those who retire under
the existing retirement laws within the aforesaid period.
SECTION 9. Salary Grade Assignments for Other Positions.—For
positions below the Officials mentioned under Section 8 hereof and their
equivalent, whether in the National Government, local government units,
government-owned or controlled corporations or financial institutions, the
Department of Budget and Management is hereby directed to prepare the
Index of Occupational Services to be guided by the Benchmark Position
Schedule prescribed hereunder and the following factors: (1) the education
and experience required to perform the duties and responsibilities of the
positions; (2) the nature and complexity of the work to be performed; (3) the
kind of supervision received; (4) mental and/or physical strain required in
the completion of the work; (5) nature and extent of internal and external
relationships; (6) kind of supervision exercised; (7) decision-making
responsibility; (8) responsibility for accuracy of records and reports; (9)
accountability for funds, properties and equipment; and (10) hardship,

hazard and personal risk involved in the job.
Benchmark Position Schedule

Position Title Salary Grade
Laborer I 1
Messenger 2
Clerk I 3
Driver I 3
Stenographer I 4
Mechanic I 4
Carpenter II 5
Electrician II 6
Secretary I 7
Bookkeeper 8
Administrative Assistant 8
Education Research Assistant I 9
Cashier I 10
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VOL. 446, DECEMBER 15, 2004 555

Pilipinas
Nurse I 10
Teacher I 10
Agrarian Reform Program Technologist 10
Budget Officer I 11
Chemist I 11
Agriculturist I 11
Social Welfare Officer I 11
Engineer I 12
Veterinarian I 13
Legal Officer I 14
Administrative Officer II 15
Dentist II 16
Postmaster IV 17
Forester III 18
Associate Professor I 19
Rural Health Physician 20
In no case shall the salary of the chairman, president, general manager or

administrator, and the board of directors of government-owned or controlled
corporations and financial institutions exceed Salary Grade 30: Provided,
That the President may, in truly exceptional cases, approve higher
compensation for the aforesaid officials. (Emphasis supplied)
Thus, while the positions of Agriculturist I with SG 11 and the

President of the Philippines with SG 33 may both belong to the
Professional Supervisory Category because of the nature of their
duties and responsibilities as well as the knowledge and experience
required to discharge them, nevertheless, there can be no doubt that
the level of difficulty and responsibility of the latter is significantly
greater than that of the former.
It may be that the legislature might have chosen the four
categories of the position classification system as the basis for the
classification in Section 15 (c), as suggested by Justice Chico-
Nazario, or even that no distinction might have been
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Pilipinas
made at all. But these are matters pertaining to the wisdom of the
legislative classification and not to its constitutional validity as
measured against the requirements of the183equal protection clause. As
this Court stated in Ichong v. Hernandez:
x x x Some may disagree with the wisdom of the legislature’s

classification. To this we answer, that this is the prerogative of the law-
making power. Since the Court finds that the classification is actual, real
and reasonable, and all persons of one class are treated alike, and as it
cannot be said that the classification is patently unreasonable and
unfounded, it is on duty bound to declare that the legislature acted within
its legitimate prerogative and it cannot declare that the act
184
transcends the
limit of equal protection established by the Constitution. (Emphasis and
italics supplied)
At this juncture, it is curious to note that while the main opinion

initially states that the classification contained in Section 15 (c) of
the New Central Bank Act “has a rational basis and is not palpably,
purely, and entirely arbitrary in the legislative sense,” and is thus
valid on its face; the same opinion subsequently opines that:
In the case at bar, the challenged proviso operates on the basis of salary
grade or officer-employee status. It is a distinction based on economic
class and status, with the higher grades as recipients of a benefit
specifically withheld from the lower grades. (Emphasis and italics supplied)
Significantly, petitioner never advanced this argument anywhere in

its pleadings. Moreover, there is absolutely nothing in the pleadings
or records of this petition to suggest that: (1) petitioner’s members
belong to a separate economic class than those with SG 20 and
above; and (2) that the distinction
_______________
183 Supra.
184 Id., at p. 1176.
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Pilipinas
between the officers and the rank and file in Section 15(c) is based
on such economic, status.
What is more, the foregoing statement flies in the face of a basis
of classification well-established in our law and jurisprudence.
Indeed, the distinction between “officers” and “employees” in the
government service was clearly established as early as 1917 with the
enactment of the Old Revised Administrative Code and later
incorporated into the language of the Constitution:
In terms of personnel, the system includes both “officers and employees.”

The distinction between these two types of government personnel is
expressed by Section 2 of the Old Revised Administrative Code (1917) thus:
Employee, when generally used in reference to persons in the public service,

includes any person in the service of the Government or any branch thereof of
whatever grade or class. Officer, as distinguished from clerk or employee, refers to
those officials whose duties, not being of a clerical or manual nature, may be
considered to involve the exercise of discretion in the performance of the
functions of government, whether such duties are precisely defined by law or
not.
Officer, when used with reference to a person having authority to do a particular
act or perform a particular function in the exercise of governmental power, shall
include any Government employee, agent, or body having authority to do the act or
exercise of the function in question.
It is in these senses that the terms “officers and employees” are used
in the Constitution and it is this sense which should also be applied,
mutatis mutandis, to officers and employees of government-owned
185
and
or controlled corporations with original charter. (Emphasis supplied;
italics in the original)
_______________
185 J.S. BERNAS, S.J. THE 1987 CONSTITUTION OF THE REPUBLIC OF THE
PHILIPPINES, A COMMENTARY at pp. 910-911 (2003 Ed.).
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Clearly, classification on the basis of salary grade or between

officers and rank and file employees within the civil service are
intended to be rationally and objectively based on merit, fitness and
degree of responsibility, and not on economic
186
status. As this Court
summarized in Rodrigo v. Sandiganbayan:
Section 5, Article IX-C of the Constitution provides that:
The Congress shall provide for the standardization of compensation of government

officials and employees, including those in government-owned or controlled
corporations with original charters, taking into account the nature of the
responsibilities pertaining to, and the qualifications required for their positions.
This provision is not unique to the 1987 Constitution. The 1973

Constitution, in Section 6, Article XII thereof, contains a very similar
provision pursuant to which then President Marcos, in the exercise of his
legislative powers, issued Presidential Decree No. 985.
However, with the advent of the new Constitution, and in compliance
therewith, Congress enacted R.A. No. 6758. Section 2 thereof declares it the
policy of the State “to provide equal pay for substantially equal work and to
base differences in pay upon substantive differences in duties and
responsibilities, and qualification requirements of the positions.”
To give life to this policy, as well as the constitutional prescription to
“(take) into account the nature of the responsibilities pertaining to, and the
qualifications required” for the positions of government officials and
employees, Congress adopted the scheme employed in P.D. No. 985 for
classifying positions with comparable responsibilities and qualifications for
the purpose of according such positions similar salaries. This scheme is
known as the “Grade,” defined in P.D. No. 985 as:
Includ[ing] all classes of positions which, although different with respect to kind or
subject matter of work, are sufficiently equivalent as to level of difficulty and
responsibilities and level of qualification requirements of the work to warrant
_______________
186 303 SCRA 309 (1999).
559
VOL. 446, DECEMBER 15, 2004 559

the inclusion of such classes of positions within one range of basic compensation.
The Grade is therefore a means of grouping positions “sufficiently

equivalent as to level of difficulty and responsibilities and level of
qualification requirements of the work” so that they may be lumped together
in “one range of basic compensation.”
Thus, Congress, under Section 8 of R.A. No. 6758, fixed the Salary
Grades of officials holding constitutional positions, as follows x x x
xxx
x x x Congress delegated the rest of this tedious task (of fixing Salary
Grades) to the DBM, subject to the standards contained in R.A. No. 6758,
by authorizing the DBM to “determine the officials who are of equivalent
rank to the foregoing officials, where applicable,” and to assign them the
same Salary Grades subject to a set of guidelines found in said section.
For positions below those mentioned under Section 8, Section 9 directs
the DBM to prepare the “Index of Occupational Services” guided by (a) the
Benchmark Position prescribed in Section 9, and (b) the following factors:
(1) the education and experience required to perform the duties and
responsibilities of the position;
(2) nature and complexity of the work to be performed;
(3) the kind of supervision received;
(4) mental and/or physical strain required in the completion of the
work;
(5) nature and extent of internal and external relationships;
(6) kind of supervision exercised;
(7) decision-making responsibility;
(8) responsibility for accuracy of records and reports;
(9) accountability for funds, properties and equipment; and
(10) hardship, hazard and personal risk involved in the job.
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Pilipinas
Pursuant to such authority, the DBM drafted the 1989 Index of Occupational
187
Services, Position Titles and Salary Grades, later revised in 1997. x x x
(Emphasis supplied)
In view of the foregoing, the statement in the latter portion of the

main opinion to the effect that the classification between the officers
and the rank and file of the BSP is founded on economic status, and
not on the level of difficulty and responsibility as well as the

qualification requirements of the work to be performed, must be
considered extremely suspect—a conclusion without legal or factual
tether bordering on sophistry.
En passant, it may be observed that the distinction between the
managerial personnel and the rank and file of the BSP in the New
Central Bank Act is similar to the distinction between Justices,
Judges and those of equivalent judicial rank on the one hand188and
other court personnel on the other hand in R.A. No. 9227. In
furtherance of the declared policy “to guarantee the independence of
the Judiciary x x x ensure impartial administration of justice, as well
as an effective
189
and efficient system worthy of public trust and
confidence,” Section 2 of R.A. No. 9227 provides:
Sec. 2. Grant of Special Allowances.—All justices, judges and all other

positions in the Judiciary with the equivalent rank of justices of the Court of
Appeals and judges of the Regional Trial Court as authorized under existing
laws shall be granted special allowances equivalent to one hundred percent
(100%) of the basic monthly salary specified for their respective salary
grades under Republic Act
_______________
187 Id., at pp. 329-333.

188 AN ACT GRANTING ADDITIONAL COMPENSATION IN THE FORM OF
SPECIAL ALLOWANCES FOR JUSTICES,JUDGES AND ALL OTHER PERSONS IN THE
JUDICIARY WITH THE EQUIVALENT RANK OF JUSTICES OF THE COURT OF
APPEALS AND JUDGES OF THE REGIONAL TRIAL COURT AND FOR OTHER
PURPOSES.
189 R.A. No. 9227, sec. 1.
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VOL. 446, DECEMBER 15, 2004 561

No. 6758, as amended, otherwise known as the Salary Standardization Law,

to be implemented for a period of four (4) years.
The grant of special allowances shall be implemented uniformly in such
sums or amounts equivalent to twenty-five percent (25%) of the basic
salaries of the positions covered hereof. Subsequent implementation shall be
in such sums and amounts and up to the extent only that can be supported by
the funding source specified in Section 3 hereof.
190
Under the foregoing, personnel with judicial rank are entitled to
the grant of certain special allowances while the other personnel of
the judiciary are not. The reason for the difference in
191
treatment may
be gleaned from the legislative deliberations wherein the
legislature, while acknowledging the need to augment the salaries
and emoluments of members of the judiciary in order to attract and

retain competent personnel and insulate them from possible outside
influence, nevertheless had to take into consideration the limited
resources of the government as well as the primary aim of the law,
and consequently prioritized those holding judicial offices or with
judicial rank over other court personnel.
_______________
190 Interestingly, R.A. No. 9227 is the subject of a pending Administrative Matter
captioned Re: Grant of Distortion Allowance to Positions in the Judiciary with Rank
of Judges of Metropolitan Trial Court, A.M. No. 03-10-05-SC and A.M. 03-11-25-
SC, wherein certain personnel of the judicial branch not holding judicial office, but
with judicial rank below that of a judge of the Regional Trial Court are questioning
their non-inclusion in Sec. 2 on equal protection grounds.
191 Transcript of Stenographic Notes (TSN) of the Bicameral Conference
Committee On The Disagreeing Provisions on S. No. 2018 and H. No. 5178
(Compensation Benefits & Privileges of Members of the Judiciary) (Committee on
Justice & Human Rights), September 3, 2003.
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The Subsequent Amendment of the Charters of the other GOCCs and

GFIs Did Not Alter the Constitutionality of Section 15 (c)
By operation of the equal protection clause, are the rank and file
employees of the BSP entitled to exemption from the Compensation
Classification System provided for under the Salary Standardization
Law as a consequence of the exemption of the rank and file
employees of certain other GOCCs and GFIs?
Petitioner argues in the affirmative maintaining that:
This Honorable Court may take judicial notice of the fact that the rank-and-
file employees of the other government financial institutions, such as the
Government Service Insurance System (GSIS), Land Bank of the
Philippines (LBP), Development Bank of the Philippines (DBP), and the
Social Security System (SSS), together with the officers of such institutions,
are exempted from the coverage of the SSL under their respective charters x
x x Thus, within the class of rank-and-file employees of the government
financial institutions,
192
the rank-and-file employees of the BSP are also
discriminated upon. (Emphasis supplied)
The charters, of the GOCCs/GFIs adverted to by petitioner, together

with their relevant provisions are as follows:
(1) R.A. No. 7907, which took effect on February 23, 1995 and
amended Section 90 of R.A. 3844, the Agrarian Land Reform Code,
giving the Board of Directors of the LBP authority to approve the
bank’s own compensation, position classification system and
qualification standards:
SECTION 10. Section 90 of the same Act is hereby amended to read as

follows:
“Sec. 90. Personnel.—The Board of Directors shall provide for an
organization and staff of officers and employees of the Bank and upon
recommendation of the President of the Bank, appoint and fix
_______________
192 Rollo at p. 13.
563
VOL. 446, DECEMBER 15, 2004 563

their remunerations and other emoluments, and remove such officers and
employees: Provided, That the Board shall have exclusive and final
authority to promote, transfer, assign or reassign personnel of the Bank, any
provisions of existing law to the contrary notwithstanding.
All positions in the Bank shall be governed by a compensation, position
classification system and qualification standards approved by the Bank’s
Board of Directors based on a comprehensive job analysis and audit of
actual duties and responsibilities. The compensation plan shall be
comparable with the prevailing compensation plans in the private sector and
shall be subject to periodic review by the Board no more than once every
two (2) years without prejudice to yearly merit reviews or increases based
on productivity and profitability. The Bank shall therefore be exempt
from existing laws, rules and regulations on compensation, position
classification and qualification standards. It shall however endeavor to
make its system conform as closely as possible with the principles under
Republic Act No. 6758.
The Bank officers and employees, including all members of the Board,
shall not engage directly or indirectly in partisan activities or take part in
any election except to vote.
No officer or employee of the Bank subject to the Civil Service Law and
Regulations shall be removed or suspended except for cause as provided by
law.” (Emphasis supplied)
(2) R.A. No. 8282, the Social Security System Act of 1997,
approved on May 1, 1997, Section 3 (c) of which exempts
all SSS employees from the provisions of the Salary
Standardization Law:
Section 3. x x x
(c) The Commission, upon the recommendation of the SSS President,
shall appoint an actuary and such other personnel as may be deemed
necessary; fix their reasonable compensation, allowances and other benefits,
prescribe, their duties and establish such methods and procedures as may be
necessary to insure the efficient, honest and economical administration of
the provisions and purposes of this Act: Provided, however, That the
personnel of the SSS below the rank of Vice-President shall be appointed by
the SSS President: Provided, further, That the personnel appointed by the
SSS Presi-
564

dent, except those below the rank of assistant manager, shall be subject to
the confirmation by the Commission: Provided, further, That the personnel
of the SSS shall be selected only from civil service eligibles and be subject
to civil service rules and regulations: Provided, finally, That the SSS shall
be exempt from the provisions of Republic Act No. 6758 and Republic
Act No. 7430. (Emphasis supplied)
(3) R.A. No. 8291, the Government Service Insurance System

Act of 1997, approved on May 31, 1997, which empowers
its Board of Trustees of the GSIS to approve a
compensation and position classification system and
qualifications standards for its employees:
SECTION 43. Powers and Functions of the Board of Trustees.—The Board

of Trustees shall have the following powers and functions:
xxx
(d) upon the recommendation of the President and General Manager, to
approve the GSIS’ organizational and administrative structures and staffing
pattern, and to establish, fix, review, revise and adjust the appropriate
compensation package for the officers and the employees of the GSIS with
reasonable allowances, incentives, bonuses, privileges and other benefits as
may be necessary or proper for the effective management, operation and
administration of the GSIS, which shall be exempt from Republic Act No.
6758, otherwise known as the Salary Standardization Law and Republic
Act No. 7430, otherwise known as the Attrition Law;
(4) R.A. No. 8523, which amended the Charter of the DBP on
May 31, 1997 and exempted the bank from the coverage of
the existing Salary Standardization Law:
SECTION 6. Section 13 of the same Charter is hereby amended to read as

follows:
“SEC. 13. Other Officers and Employees.—The Board of Directors shall
provide for an organization and staff of officers and employees of the Bank
and upon recommendation of the President of
565
VOL. 446, DECEMBER 15, 2004 565

the Bank, fix their remunerations and other emoluments. All positions in the
Bank shall be governed by the compensation, position classification system
and qualification standards approved by the Board of Directors based on a
comprehensive job analysis of actual duties and responsibilities. The
compensation plan shall be comparable with the prevailing compensation
plans in the private sector and shall be subject to periodic review by the
Board of Directors once every two (2) years, without prejudice to yearly
merit or increases based on the Bank’s productivity and profitability. The
Bank shall, therefore, be exempt from existing laws, rules, and
regulations on compensation, position classification and qualification
standard. The Bank shall however, endeavor to make its system
conform as possible with the principles under Compensation and
Position Classification Act of 1989 (Republic Act No. 6758, as
amended).
No officer or employee of the Bank subject to Civil Service Law shall be
dismissed except for cause as provided by law.” (Emphasis supplied)
Following this second line of argument, it appears that petitioner

bases its claim to exemption from the Compensation Classification
System of the Salary Standardization Law not only on (1) a direct
challenge to the constitutionality of the proviso in Section 15(c) of
The New Central Bank Act, which expressly places the rank and file
employees of the BSP under the coverage of the former; but also on
(2) an indirect assertion that the rank and file employees of the BSP
are entitled to benefit from the subsequent exemptions of the rank
and file personnel of certain GOCCs/GFIs from the coverage of the
Salary Standardization Law.
This second argument, that the rank and file employees of the
BSP may benefit from subsequent classifications in other statutes
pertaining to other GFI employees, on the theory that the former and
the latter are identically or analogously situated (i.e. members of the
same class), is not entirely new and is apparently founded on the
fourth requisite of the Rational Basis Test—that is, that a reasonable
classification must apply equally to all members of the same class.
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193
Thus, in Rubio v. People’s Homesite & Housing Corporation, the
Court applied Section 76 of B.P. Blg. 337, the old Local
Government Code, to benefit employees of the People’s Homesite &
Housing Corporation who had been illegally dismissed some 23
years earlier, even though the latter were not local government
employees. The Court, speaking through Justice (later Chief Justice)
Andres Narvasa held:
Batas Pambansa Bilang 337, otherwise known as the Local Government

Code, was passed by the legislature and became effective on February 10,
1983. Section 76 thereof (under Title Four: Personnel Administration)
provides as follows:
SEC. 76. Abolition of Position.—When the position of an official or employee under

the civil service is abolished by law or ordinance the official or employee so affected
shall be reinstated in another vacant position without diminution of salary. Should
such position not be available, the official or employee affected shall be granted a
separation pay equivalent to one month salary for every year of service over and
above the monetary privileges granted to officials and employees under existing law.
To be sure, the provision on its face is apparently intended for the

benefit only of officers and employees in the local political subdivisions.
The Court however sees no reason why it should not be applied as well
to other personnel of the government, including those in the People’s
Homesite and Housing Corporation, which was then considered part of
the Civil Service. A contrary conclusion would make the provision
questionable under the equal protection clause of the Constitution as
there appears to be no substantial distinction between civil servants in
the local government and those in other branches of government to
justify their disparate treatment. Since the petitioners are “employees
under the civil service,” the matter of their reinstatement to their former
positions at this time should logically and justly be governed by the above
cited statute although enacted many years after the abolition of their
positions. And since, too, it may reasonably be assumed that rein-
_______________
193 185 SCRA 656 (1990).
567
VOL. 446, DECEMBER 15, 2004 567

statement to their former positions is no longer possible, or feasible, or even

desired or desirable, the petitioners or their heirs must be deemed
194
entitled to
receive the separation pay provided by said BP Blg. 337. (Emphasis
supplied)
Some Basic Principles of Legislative Classification

Considering that the thrust of petitioner’s second argument is that its
members belong to the same class as other GFI employees (such
that they are also entitled to exemption from the Compensation
Classification System of the Salary Standardization Law), a brief
discussion on legislative classification is in order.
As adverted to earlier, classification has been defined as “the
grouping of persons or things similar to each other in certain 195
particulars and different from all other in these same particulars.”
To this may be added the following observations of196Joseph Tussman
and Jacobus tenBroek 197in their influential article on The Equal
Protection of the Laws, viz.:
We begin with an elementary proposition: To define a class is simply to

designate a quality or characteristic or trait or relation, or any
combination of these, the possession of which, by an individual,
determines his membership in or inclusion within the class. A legislature
defines a class, or “classifies,” when it enacts a law applying to “all aliens
ineligible for citizenship,” or “all persons convicted of three felonies,” or
“all citizens
_______________
194 Id., at pp. 663-664.

195 Vide Philippine Judges Association v. Prado, supra.
196 Cited in G. Gunther In Search of Evolving Doctrine on a Changing Court: A Model for a
Newer Equal Protection, 86 HARVARD LAW REVIEW 1 (1972); Village of Arlington Heights
v. Metropolitan Housing Development Corp., 429 U.S. 252 (1977); Regents of the University of
California v. Bakke, 438 U.S. 265 (1978); Vance v. Bradley, 440 U.S. 93 (1979).
197 37 CALIFORNIA LAW REVIEW 341 (1949).
568

between the ages of 19 and 25” or “foreign corporations doing business

within the state.”
This sense of “classify” (i.e., “to define a class”) must be distinguished
from the sense in which “to classify” refers to the act of determining
whether an individual is a member of a particular class, that is, whether the
individual possesses the traits which define the class. x x x
It is also elementary that membership in a class is determined by the

possession of the traits which define that class. Individual X is a member
of class A if, and only if, X possesses the traits which define class A.
Whatever the defining characteristics of a class may be, every member of
that class will possess those characteristics.
Turning now to the reasonableness of legislative classifications, the cue
is to be taken from our earlier reference to the requirement that those
similarly situated be similarly treated. A reasonable classification is one
which includes all who are similarly situated and none who are not. The
question is, however, what does that ambiguous and crucial phrase
“similarly situated” mean? And in answering this question we must
first dispose of two errors into which the Court has sometimes fallen.
First, “similarly situated” cannot mean simply “similar in the
possession of the classifying trait.” All members of any class are
similarly situated in this respect and consequently, any classification
whatsoever would be reasonable by this test. x x x
xxx
The second error in the interpretation of the meaning of similarly
situated arises out of the notion that some classes are unnatural or
artificial. That is, a classification is sometimes held to be unreasonable
if it includes individuals who do not belong to the same “natural” class.
We call this an error without pausing to fight the ancient controversy about
the natural status of classes. All legislative classifications are artificial in the
sense that they are artifacts, no matter what the defining traits may be. And
they are all real enough for the purposes of law, whether they be the class of
American citizens of Japanese ancestry, or the class of makers of margarine,
or the class of stockyards receiving
569
VOL. 446, DECEMBER 15, 2004 569

more than one hundred head of cattle per day, or the class of feebleminded
confined to institutions.
The issue is not whether, in defining a class, the legislature has carved
the universe at a natural joint. If we want to know if such classifications are
reasonable, it is fruitless to consider whether or not they correspond to some
“natural” grouping or separate those who naturally belong together.
But if we avoid these two errors, where are we to look for the test of
similarity of situation which determines the reasonableness of a
classification? The inescapable answer is that we must look beyond the
classification to the purpose of the law. A reasonable classification is one
which includes all 198persons who are similarly situated with respect to the
purpose of the law. (Emphasis and italics supplied; italics in the original)
Moreover, Tussman and tenBroek go on to describe the task of the

courts in evaluating the reasonableness of a legislative classification:
Since it is impossible to judge the reasonableness of a classification

without relating it to the purpose of the law, the first phase of the
judicial task is the identification of the law’s purpose. x x x
xxx
It is thus evident that the attempt to identify the purpose of a law—an
attempt made mandatory by the equal protection requirement—involves the
Court in the thornier aspects of judicial review. At best, the Court must
uncritically and often unrealistically accept a legislative avowal at its face
value. Wt worst, it must challenge legislative integrity and push beyond the
express statement into unconfined realms of inference. Having accepted or
discovered the elusive “purpose” the Court must then, under the
discriminatory legislation doctrine, make a judgment as to the purity of
legislative motive and, under substantive equal protection, determine the
legitimacy of the end. Only after the purpose of the law has thus been
discovered and subjected to this scrutiny can the Court proceed with the
classification problem.
_______________
198 Id., at pp. 344-346.
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x x x Except when the class in the law is itself defined by the mischief [to be
eliminated], the assertion that any particular relation holds between the
[classifying trait and the purpose] is an empirical statement. The mere
assertion that a particular relation exists does not establish the truth of
the assertion. A legislature may assert that all “three-time felons” are
“hereditary criminals” and that all “hereditary criminals” are “three-time
felons.” But whether this is the case is a question of fact, not fiat.
Consequently, the Court, in determining the actual relation between
the classes [i.e. the classifying trait and the purpose of the law] is engaged
in fact-finding or in criticism of legislative fact finding. Thus the Court is
confronted with a number of alternative formulations of the question: 1)
what is the legislative belief about the relation between the classes? and, 2)
is this belief
199
reasonable? or simply, 3) what relation exists between the two
classes?
With the foregoing in mind, the relevant question then (as regards
petitioner’s second line of argument) is whether in fact petitioner’s
members and the other GFI employees are so similarly situated as to
members of a single class for purposes of compensation and position
classification.
There is no Basis for the Classification of GFI Employees as a

Discrete Class, entitled to “Special Treatment” with respect to
Compensation Classification
Without identifying the legislative purpose for exemption from the
coverage of the Compensation Classification System mandated by
the Salary Standardization Law, the main opinion concludes that the
classifying trait among those exempted from the coverage is their
status as GFI employees. On this basis, it would grant the instant
petition upon the assumption that “there exist no substantial
distinctions so as to differen-
_______________
199 Id., at p. 366.
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Pilipinas
tiate the BSP rank and file from the other rank and file of the [other]
GFIs.”
The foregoing tacitly rests on the assumptions that, with respect
to their compensation, position classification and qualifications
standards, (1) the rank-and-file employees of the BSP together with
the rank-and-file employees of the LBP, SSS, GSIS and DBP belong
to a single class; and (2) there are no reasonable distinctions
between the rank-and-file employees of the BSP and the exempted
employees of the other GOCCs/GFIs.
However, these assumptions are unfounded, and the assertion
that “GFIs have long been recognized as one distinct class, separate
from other governmental entities” is demonstrably 200
false.
As previously discussed, Section 2 of P.D. 985 cited in support
of the foregoing proposition has been expressly repealed by Section
16 of Salary Standardization Law.
Sec. 16. Repeal of Special Salary Laws and Regulations.—All laws,

decrees, executive orders, corporate charters, and
_______________
200 SECTION 2. Declaration of Policy.—It is hereby declared to be the policy of the

national government to provide equal pay for substantially equal work and to base differences
in pay upon substantive differences in duties and responsibilities, and qualification
requirements of the positions. In determining rates of pay, due regard shall be given to, among
others, prevailing rates in private industry for comparable work. For this purpose, there is
hereby established a system of compensation standardization and position classification in the

national government for all departments, bureaus, agencies, and offices including government-
owned or controlled corporations and financial institutions: Provided, That notwithstanding a
standardized salary system established for all employees, additional financial incentives may
be established by government corporation and financial institutions for their employees to be
supported fully from their corporate funds and for such technical positions as may be approved
by the President in critical government agencies. (Emphasis supplied)
572

other issuances or parts thereof, that exempt agencies from the

coverage of the System, or that authorize and fix position classification,
salaries, pay rates or allowances of specified positions, or groups of officials
and employees or of agencies, which are inconsistent with the System,
including the proviso under Section 2, and Section 16 of Presidential
Decree No. 985 are hereby repealed. (Emphasis supplied)
Moreover, neither the text nor the legislative record of the Salary
Standardization Law manifests the intent to provide “favored
treatment” for GOCCs and GFIs. Thus, Section 3 (b), erroneously
cited by the main opinion, provides for the general principle that
compensation for all government personnel, whether employed in a
GOCC/GFI or not, should generally be comparable with that in the
private sector, to wit:
SECTION 3. General Provisions.—The following principles shall govern

the Compensation and Position Classification System of the Government:
(a) All government personnel shall be paid just and equitable wages;
and while pay distinctions must necessarily exist in keeping with
work distinctions, the ratio of compensation for those occupying
higher ranks to those at lower ranks should be maintained at
equitable levels, giving due consideration to higher percentage of
increases to lower level positions and lower percentage increases to
higher level positions;
(b) Basic compensation for all personnel in the government and
government-owned or controlled corporations and financial
institutions shall generally be comparable with those in the
private sector doing comparable work, and must be in
accordance with prevailing laws on minimum wages;
(c) The total compensation provided for government personnel must be
maintained at a reasonable level in proportion to the national
budget;
(d) A review of government compensation rates, taking into account
possible erosion in purchasing power due to inflation and other
factors, shall be conducted periodically. (Emphasis and italics

supplied)
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Pilipinas
Indeed, Section 4 of the Salary Standardization Law expressly

provides the general rule that GFIs, like other GOCCs and all other
members of the civil service, are within the coverage of the law:
SECTION 4. Coverage.—The Compensation and Position Classification

System herein provided shall apply to all positions, appointive or
elective, on full or part-time basis, now existing or hereafter created in
the government, including government-owned or controlled corporations
and government financial institutions.
The term “government” refers to the Executive, the Legislative and the
Judicial Branches and the Constitutional Commissions and shall include all,
but shall not be limited to, departments, bureaus, offices, boards,
commissions, courts, tribunals, councils, authorities, administrations,
centers, institutes, state colleges and Universities, local government units,
and the armed forces. The term “govern-ment-owned or controlled
corporations and financial institu-tions” shall include all corporations
and financial institutions owned or controlled by the National
Government, whether such corporations and financial institutions
perform governmental or proprietary functions. (Emphasis and italics
supplied)
Furthermore, a reading of the deliberations on what eventually

became the Salary Standardization Law leaves no doubt that one of
its goals was to provide for a common compensation system for all
so that the stark disparities in pay between employees of the GOCCs
and GFIs and other government employees would be minimized if
not eliminated, as the following excerpt plainly shows:
Senator Guingona. Mrs. President, the PNB and DBP transferred

nonperforming assets and liabilities to the National Government in the sum
of over P120 billion in 1986. They are reportedly having profits of, I think
over P1 billion. They have not declared dividends so that the National
Government is the one that absorbed the indebtedness. The financial
institutions are enjoying clean books and increased profits. Yet, employees
of these institu-
574
tions are receiving far more, whereas, the employees of the National
Government which absorbed the nonperforming assets are receiving less.
And the Central Bank is dumping into the National Government liabilities
of more than P5 billion...
Senator Romulo. Eventually P34 billion.
Senator Guingona. And, yet, the janitor in the Central Bank is receiving
a higher rate of salary than the clerk or even the minor executives in some
National Government agencies and bureaus. This does not seem just and
violates the equal pay for equal work principle which 201
the distinguished
Sponsor has nobly established in the policy statement.
Thus, during the Bicameral Conference Committee deliberations,

the sentiment was that exemptions from the general Compensation
Classification System applicable to all government employees
would be limited only to key positions in order not to lose these
personnel to the private sector. A provision was moreover inserted
empowering the President to, in truly exceptional cases, approve
higher compensation, exceeding Salary Grade 30, to the chairman,
president, general manger, and the board of directors of government-
202
owned or controlled corporations and financial institutions:
SEC. CARAGUE. Actually, we are requesting that government

corporations that are performing proprietary functions and therefore
competing with the private sector should evolve a salary structure in
respect to key positions. There are some positions in banking, for example,
that are not present in the ordinary government offices.
I can understand for example, if the government corporation, like NIA, it
is performing a governmental function. I believe it is not strictly a
proprietary function—NIA and NAWASA. But there are government
corporations that are engaged in very obviously proprietary type of function.
For example, transportation companies of the government; banking
institution; insurance functions. I feel that
_______________
201 IV Records of the Senate 1526 (June 8, 1989).

202 Republic Act No. 6758, Section 9.
575
VOL. 446, DECEMBER 15, 2004 575

they have to be competitive with the private sector, not with respect to
all positions. Like, for example, janitor or messenger, because there is
no danger of losing this out to the private sector; you can always get
this. But there are certain key position—even the key men of the
government corporations performing proprietary functions, sometimes

they got—the market analyst, commodities analyst and so on—they
have certain functions that are not normal in government, and it is very
difficult to get this specialists.
So, I was wondering if we could provide a provision that government
corporations engaged in proprietary activities, that positions that are
peculiar to them should be allowed a different compensation structure.
THE CHAIRMAN (Rep. Andaya). But203that can be solved, when
implemented, you just assign him a higher rate. (Italics supplied)
xxx
THE CHAIRMAN (Sen. Rasul). Mr. Chairman, I am just wondering if
perhaps we should also include “financial institutions,” not just
“government-owned or controlled corporation.”
SEC. CARAGUE. I think it is broad enough, Madam Senator.
THE CHAIRMAN (Sen. Rasul). Broad enough?
SEC. CARAGUE. Yes.
THE CHAIRMAN (Rep. Andaya). It covers everybody. Everybody is
covered that way.
REP. LAGUDA. Mr. Chairman, if we go back to the amendment of
Senator Rasul, I think what she has put there is that it is the President’s
discretion, because in the House version, it is an across-the-board-thing.
There is no mention of the President’s discretion here. So maybe we should
accept the amendment of Senator Rasul that “it is the President who shall
decide.” In other words, when she said “the President may,” it is the
discretion of the President rather than automatic.
SEC. CARAGUE. Yes. Like for example, there are, I think, quite a
number of Vice Presidents that really are also important
_______________
203 Bicameral Conference Committee Deliberations 55-56 (August 4, 1989).
576

because it is very difficult if the President will have a salary that is so way,
way above the Vice Presidents. And usually the Vice Presidents are the ones
that support, that provided teamwork for the President.
Sometimes there are certain key people, like money market specialists
that are difficult to keep because they easily transfer to another company.
xxx
SEC. CARAGUE. In the end, Your Honor, it may be more expensive to
limit the salaries of these kind of people because if you don’t get good
people, the viability of the corporation, the profitability goes down. So you
actually, in the end, lose more. You don’t see it because it is just loss of
revenue, in lack of profitability,204

but actually it costs you more. And that is
the problem of this kind of. . . . (Emphasis and italics supplied)
What is more, the exemption of the personnel of the Securities and

Exchange Commission (SEC) from the coverage of the
Compensation
205
Classification System, as pointed out in the main
opinion, only underscores the error in maintaining employment in
a GFI as the defining trait of employees exempted from said System.
In actual fact, the employees of a number of GFIs remain206
within
the coverage of the Compensation207 Classification System, while
employees of several other GOCCs and gov-
_______________
204 Id., at pp. 60-61.

205 Together with the exemptions of the employees of the Small Business
Guarantee and Finance Corporation (SBGFC) , the Home Guaranty Corporation
(HGC) and the Philippine Deposit Insurance Corporation (PDIC).
206 Among them the employees of the National Development Company (NDC),
National Home Mortgage Finance Corporation (NHMFC), Philippine Crop Insurance
Corporation (PCIC), Philippine Health Insurance Corporation (PHILHEALTH), and
the Quedan Rural Credit and Guarantee Corporation (QUEDANCOR).
207 Including the National Power Corporation (NAPOCOR), National
Transmission Corporation (TRANSCO), Philippine Postal
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VOL. 446, DECEMBER 15, 2004 577

Pilipinas
208
ernment agencies have been exempted from the same. Hence, GFI
employment, as advocated by the main opinion, cannot be
reasonably considered to be the basis for exemption for the
Compensation Classification System of the Salary Standardization
Law.
Curiously, how could the exemption of the SEC personnel “add
insult to petitioner’s injury” when, going by what the main opinion
holds to be the defining characteristic of the class to which
petitioner’s members belong—that is, employment in a GFI, the two
groups of employees would obviously not be comparable?
Mere Employment in a GOCC or GFI is not Determinative of

Exemption from the Salary Standardization Law
More importantly, an examination of the legislative proceedings
leading up to the amendment of the charters of the GOCCs and GFIs
exempted from the coverage of the Compensation Classification
System discloses that mere employment in a GFI was not the
decisive characteristic which prompted the legislature to provide for

such exemption.
Thus, Republic Act No. 3844 (R.A. No. 3844) otherwise known
as the “Agrarian Reform Code” created the Land Bank which is
mandated to be the financing arm of the Agrarian Reform Program
of the government. More specifically, the Land Bank is tasked to be
the primary government agency in the mobilization and the
provision of credit to the small farmers and fisher folk sector in their
various economic activities such as production, processing, storage,
transport and the marketing of farm produce. Since its inception, the
Land Bank has transformed into a universal bank, seeking to con-
_______________
Corporation (PHILPOST), and the Power Sector Assets and Liabilities

Management Corporation (PSALM).
208 Such as the Energy Regulatory Commission (ERC).
578

Pilipinas
tinually fortify the agricultural sector by delivering countryside

credit and support services.
In order to continue performing its mandate of providing non-
traditional banking services and developmental assistance to farmers
and fishermen, Congress saw the need to strengthen the bank by
introducing amendments to R.A. No. 3844. Republic Act No. 7907
(R.A. No. 7907) amended R.A. No. 3844 by strengthening the Land
Bank not only for the purpose of implementing agrarian209
reform, but
also to make it more competitive with foreign banks.
One of the salient points of R.A. No. 7907 is the exemption of all
of the Land Bank’s personnel from the Salary Standardization Law,
authorizing at the same time its board of directors to provide
compensation, position classification system and qualification
standards.
The discussion of the House of Representatives’ Committee on
Banks and Financial Intermediaries reveals the surrounding
circumstances then prevailing, which prompted Congress to exempt
the Land Bank from the Salary Standardization Law. The Committee
likewise recognized the role of the rank and file employees in
fulfilling its unique task of providing credit to support the
agricultural sector.
MR. GOLEZ. Madam Speaker, the points of the distinguished

sponsor are very well taken. But what I would like to emphasize
is that the Land Bank as already stated, is not just almost unique,
it is unique. It cannot be likened to a conventional commercial
bank even in the case of the Philippine National Bank where its
employees can very easily move from one bank to another. An
employee, an average employee in the Philippine National Bank
can easily transfer to a private commercial bank and vice-versa.
So in fact we are witnessing almost on a daily basis these
periodic transfers, piracy of executives, employees from one
commercial bank to another. However, in the case of the
Land Bank
_______________
209 III Records of the Senate, 9th Congress, 806 (January 16, 1995).
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precisely because of its very unique operations, the very life

of the viability of the Land Bank of the Philippines depends
decisively and critically on its core group, which in this
particular case would be the rank and file, the technical
employee below the level of managers. They are not
substitutable at all. They are very critical. And as such, the
position of this Representation, Madam Speaker, Your Honor, is that
that critical role gives them the importance as well as the inherent
right 210
to be represented in the highest policy making body of the
bank. (Emphasis supplied)
xxx
MR. APOSTOL. Now, may I know why the employees of Land
Bank should be exempted from the compensation and position
classification?
MR. FUENTEBELLA. Are we now in Section 87, your Honor?
MR. APOSTOL. Yes.
MR. FUENTEBELLA. The present compensation package of
the employees of the bank are no longer competitive with the
banking industry. In fact, the turnover of bank personnel is
concerned, I think they had a turnover of more than 127 rank
and file and more than 43 or 50 officer level. For the reason
that the present compensation through bank officers and
personnel are no longer competitive with the other banks despite
the fact that there is a provision in our Constitution and this is
sanctioned by existing provisions of the Civil Service, that we
may enact laws to make the position classification of certain
sectors in the government comparable with the same industry.

That is the reason why. . .
MR. APOSTOL. Is it not that the compensation of officials and
employees of the Land Bank must be similar or comparable to
the salaries and compensation of government banks or financial
institutions?
_______________
210 Deliberations of the House of Representatives (March 2, 1994).
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Pilipinas
MR. FUENTEBELLA. Yes. In fact, the Philippine National Bank

has a better financial compensation package compared to the
Land Bank.
MR. APOSTOL. Yes, it should and it must because PNB is already
privatized, Land Bank is not yet.
MR. FUENTEBELLA. Not yet, your Honor.
MR. APOSTOL. If the compensation package of the employees
of Land Bank should be similar to PNB, then why not privatize so
that Land Bank will be exempted from this...
MR. FUENTEBELLA. Well, as I said, your Honor, in due time, we
can go into that aspect of privatization. We are not closing our
eyes to that possibility. But for the moment that the bank is still
tasked with numerous problems, particularly on agrarian reform,
and for as long as the bank has not been able to perform its major
task in helping the government provide the necessary
mechanisms to solve and address the problems of agrarian
reform, then we cannot talk about privatization yet. Because the
function of the bank is not purely for profit orientation, your
Honor. Whatever profits are generated under the commercial
banking transactions are channeled
211
to the agrarian sector, which
is a losing proposition actually. (Emphasis supplied)
Like the Land Bank, the Development Bank of the Philippines

(DBP), the country’s premier development bank, was also exempt
from the Salary Standardization Law. Republic Act No. 8523 (RA
8523) amended Executive Order No. 81 otherwise known as the
“1986 Revised Charter of the Development Bank of the Philippines”
to enable DBP to effectively contribute to the nation’s attainment of
its socio-economic objectives and fill the gaps left by the private
sector which might be unwilling or unprepared to take on critical
projects and programs.
_______________
211 Deliberations of the House of Representatives (March 16, 1994).
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The bottom line of this bill which seeks to amend the existing charter of the
Development Bank of the Philippines is to enable the DBP as the country’s
premier development bank to effectively contribute to the nation’s
attainment of its socio-economic objectives, such as the alleviation of
poverty, creation of employment opportunities, and provision of basic needs
such as food, shelter, health and education.
Given the present state of financial intermediation and capital markets in
the Philippines, economic activities and projects still remain which private
financial institutions may not be willing to finance because of the risks
involves. And even if some of these private institutions are willing to do so,
they may not have the capability to assist such projects and activities.
Development lending is much more than simply providing medium to long-
term funds to economically viable projects.
The proposed DBP charter amendment will help remodel DBP in the
financial community as a predominantly development bank that works
closely with individuals, institutions and associations which can provide
resources and other 212types of assistance to projects with clearly-defined
development impact.
In order to achieve DBP’s vision as the country’s premier

development bank in a rapidly growing economic environment, the
legislature sought to (1) increase the authorized capital of DBP from
P5 billion to P10 billion; and (2) restructure DBP’s organization into
one which is market-responsive, product focused, horizontally
aligned, and with a lean, highly motivated work force by removing
the DBP from the coverage of the Salary Standardization Law. The
DBP’s exemption from the Salary Standardization Law was justified
by the fact that it is an institution engaged in development activities
which should
213
be given the same opportunities as the private sector to
compete.
_______________
212 Deliberations of the House of Representatives (January 20, 1998).

213 III Records of the Senate, 10th Congress, 627 (December 16, 1997).
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The exemption from the Salary Standardization Law does not only
involve banks but government entities that manage pension funds
such as the SSS and the GSIS.
Republic Act No. 1161 (R.A. No. 1161) established the SSS
pursuant to a state policy of providing meaningful protection to
members and their beneficiaries against the hazards of disability,
sickness, maternity, old age, death, and other contingencies,
resulting in loss of income or financial burden. Republic Act No.
8282 amended R.A. No. 1161 by providing for better benefit
packages, expansion of coverage, flexibility in investments, stiffer
penalties for violators of the law, condonation of penalties of
delinquent employers and the establishment of a voluntary provident
fund for members.
The fund that the SSS administers comes from the compulsory
remittances of the employer on behalf of his employees. The House
of Representatives noted that the fund in 1996 amounted 5.5 billion
dollars, the sheer enormity of which necessitated that it be exempt
from the Salary Standardization Law in order for it to attract quality
personnel to ensure that the funds will not be mismanaged, abused
or dissipated due to the negligence of its personnel. Moreover, the
SSS, like the Land Bank and the DBP, was facing a massive exodus
of its personnel who were migrating to greener pastures.
MR. VALENCIA. x x x Now, the other law refers to the law on

salary standardization. Again, we are in a situation where we
are competing for personnel with the private sector,
especially the financial institutions. We compete with banks,
we compete with insurance companies for people. So what
happens invariably is we lost our people after we have
trained them, after they have proven themselves with a track
record, with the very low pay that is being given to our
people. We believe that with the magnitude of the
accountability that we have, (We are accountable for 5.5
billion dollars, some 132 million pesos) ah, we think that we
deserve the quality of people to ensure that these funds . . .
and the pay out by the billions of pesos in terms of benefits
and we collect by the billions of pesos, we believe that the
magnitude of money and
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accountability we have is even higher than that of the local

financial institutions. And the pay, for example, of the
Administrator is similar to a small branch in a bank. So, I don’t think
our pay will be very competitive but certainly it’s too low
considering the accountability that is on the shoulder of the
employees. If we end up with poor quality of personnel, what would
happen is these funds could be mismanaged, abused or just out of
pure negligence could be dissipated.
HON. PADILLA. Mr. Chairman.
THE CHAIRMAN. Congressman Padilla.
HON. PADILLA. With the Standardization Law, how can we
resolve that problem just mentioned by the Administrator?
MR. VALENCIA. What will happen, Sir, is that we will ask outside
assistance to work out a salary structure that would be modest but
at the same time at least make it more difficult (sic) that will
attract new people, new blood to the System—quality personnel,
and will also help make it 214
a bit more difficult for private sector to
pirate from the institution. (Emphasis supplied)
As the SSS exercises the same functions as the GSIS—the handling

of sensitive and important funds—the GSIS’ exemption from the
Salary Standardization Law was easily justifiable, viz.:
HON. TUAZON. x x x Now, the GSIS and the SSS, they are
more or less performing the same functions. So I am asking
whether in the proposed amendments on the charter of the GSIS
they also have similar proposal, because if I still recall, there was
a time when the GSIS employees were the envy—not the SSS
because the SSS has never been the envy of government
employees because they really never have been paid very good
salaries.—There was a time when the GSIS was the envy of other
government employees because they had fat bonuses, they had
quarterly bonus, they had mid-year bonus, they had 3 months
bonus, Christmas bonus and their salaries were very much higher
than their counterparts in the
_______________
214 Deliberations of the House of Representatives (August 7, 1996).
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government and they are saying, “By golly, the GSIS, they are
only using the funds of the government employees and yet they are
receiving fat salaries from the contributions of the government
employees. That was one of the complaints I was hearing at that
time—I was still First Year College—, so the next time I realized, all
these fat salaries of the Central Bank . . . Central Bank was also the
envy of the other government employees, PNB, but SSS has never
been noted to be paying fat salaries that will be sufficient to attract
well qualified employees from the other sectors. So, the reason for
my question is that, if we grant SSS, we have also to grant GSIS
on the rationale
215
that they are both performing the same
functions. (Emphasis supplied)
In sum, the basis for the exemption of certain employees of GOCCs

or GFIs from the coverage of the Salary Standardization Law rests
not on the mere fact that they are employees of GOCCs or GFIs, but
on a policy determination by the legislature that such exemption is
needed to fulfill the mandate of the institution concerned
considering, among others, that: (1) the GOCC or GFI is essentially
proprietary in character; (2) the GOCC or GFI is in direct
competition with their counterparts in the private sector, not only in
terms of the provision of goods or services, but also in terms of
hiring and retaining competent personnel; and (3) the GOCC or GFI
are or were experiencing difficulties filling up plantilla positions
with competent personnel and/or retaining these personnel. The need
for and the scope of exemption necessarily varies with the particular
circumstances of each institution, and the corresponding variance in
the benefits received by the employees is merely incidental.
_______________
215 Deliberations of the House of Representatives (August 7, 1996).
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There are real differences between the Rank & File of the BSP and
the Exempted Rank & File Employees of the other GOCCs/GFIs
There can be no doubt that the employees of the BSP share a
common attribute with the employees of the LBP, SSS, GSIS and
DBP in that all are employees of GOCCs performing fiduciary
functions. It may also be reasonable to assume that BSP employees
with SG 19 and below perform functions analogous to those carried
out by employees of the other GOCCs with the corresponding salary

grades.
Nonetheless, these similarities alone are not sufficient to support
the conclusion that rank-and-file employees of the BSP may be
lumped together with similar employees of the other GOCCs for
purposes of compensation, position classification and qualifications
standards. The fact that certain persons have some attributes in
common does not automatically make them members of the same
class with respect to a legislative
216
classification. Thus, in Johnson, et
al. v. Robison, et al., involving the alleged violation of a
conscientious objector’s right to equal protection, the U.S. Supreme
Court had occasion to observe:
Of course, merely labeling the class of beneficiaries under the Act as those
having served on active duty in the Armed Services cannot rationalize a
statutory discrimination against conscientious objectors who have
performed alternative civilian service, if, in fact, the lives of the latter were
equally disrupted and equally in need of readjustment. The District Court
found that military veterans and alternative service performers share the
characteristic during their respective service careers of “inability to pursue
the educational and economic objectives that persons not subject to the draft
law could pursue.” But this finding of similarity ignores that a common
characteristic shared by beneficiaries and nonbeneficiaries alike, is not
sufficient to invalidate a statute when other characteristics peculiar to only
one group rationally explain the statute’s different
_______________
216 415 U.S. 361 (1974).
586

treatment of the two groups. Congress expressly recognized that significant

differences exist between military service veterans and alternative service
performers, particularly in respect of the Act’s purpose to provide benefits
to assist in readjusting to civilian life. These differences “afford
217
the basis for
a different treatment within a constitutional framework.” (Italics and
emphasis supplied; citations omitted)
Indeed, from the foregoing examination of the legislative records of

the amended charters of the exempt GOCCs and GFIs, the following
real and material differences are readily manifest:
First, unlike the LBP, DBP, SSS218
and GSIS, the BSP, in particular
the Central Monetary Authority, performs a primarily government
function, not a proprietary or business function. In this respect it is
more similar to the other government agencies involved in the
management of the economy, such as the National Economic

Development Authority (NEDA), than a commercial bank.
Second, while the importance of its functions is undoubted, the
BSP, unlike the LBP, DBP, SSS and GSIS, is not subject to cut throat
competition or the pressures of either the financial or job markets.
Third, there is no indication in the record that the BSP, unlike the
LBP, DBP, SSS and GSIS, is experiencing difficulty in filling up or
maintaining competent personnel in the positions with SG 19 and
below.
_______________
217 Id., at pp. 378-379.

218 Section 1 of the New Central Bank Act provides:
Sec. 1. The State shall maintain a central monetary, authority that shall function and operate as
an independent and accountable body corporate in the discharge of its mandated responsibilities
concerning money, banking and credit. In line with this policy, and considering its unique
functions and responsibilities, the central monetary authority established under this Act, while
being a government-owned corporation, shall enjoy fiscal and administrative autonomy.
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The Questioned Proviso Cannot be Considered Oppressive or

Discriminatory in Its Implementation
Given the factual basis for the classification between exempt and
non-exempt employees (i.e. real distinctions as to the proprietary or
governmental character of the GOCC/GFI, competition with the
private sector, and difficulty in attracting and maintaining competent
personnel) and the reasonable relationship of this classification to
the attainment of the objectives of the laws involved, the questioned
proviso cannot be considered oppressive or discriminatory in its
implementation.
Significantly, neither the petitioner nor the main opinion
demonstrates what injuries petitioner’s members have sustained as a
result of the proviso in Section 15 (c) of The New Central Bank Act,
whether or not the same is read together with subsequent legislative
enactments. This is unsurprising for how could a provision which
places the BSP rank and file at par with all other government
employees in terms of compensation and position classification be
considered oppressive or discriminatory?
Moreover, Congressional records show that 219 House Bill 123 has
been filed with the present Thirteenth Congress seeking to amend
The New Central Bank Act by, among other things, exempting all
positions in the BSP from the Salary Standardization Law. Thus, it
cannot be said that Congress has closed its mind to all possibility of
amending the New Central Bank Act to provide for the exemption of
the BSP rank and file from the Compensation Classification System
of the Salary Standardization Law.
_______________
219 House Bill No. 1833 containing similar provisions was filed with the Twelfth
Congress; House Bill No. 9427 containing similar provisions was filed with the
Eleventh Congress.
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In fine, judged under the Rational Basis Test, the classification in

Section 15 (c) of the New Central Bank Act complies with the
requirements of the equal protection clause, even taken together with
the subsequent amendments of the charters of the other GOCCs and
GFIs.
Petitioner’s Members’ Remedy is with Congress and Not With The

Courts
While the main opinion acknowledges the propriety of judicial
restraint “under most circumstances” when deciding questions of
constitutionality, in recognition of the “broad discretion given to
Congress in exercising its legislative power,” it nevertheless
advocates active intervention with respect to the exemption of the
BSP rank and file employees from the Compensation Classification
System of the Salary Standardization Law.
Considering, however, that the record fails to show (1) that the
statutory provision in question affects either a fundamental right or a
suspect class, and, more importantly, (2) that the classification
contained therein was completely bereft of any possible rational and
real basis, it would appear that judicial restraint is not merely
preferred but is in fact mandatory, lest this Court stray from its
function of adjudication and trespass into the realm of legislation.
To be sure, inasmuch as exemption from the Salary
Standardization Law requires a factually grounded policy
determination by the legislature that such exemption is necessary
and desirable for a government agency or GOCC to accomplish its
purpose, the appropriate remedy of petitioner is with Congress and
not with the courts. As the branch of government
220
entrusted with the
plenary power to make and amend laws, it is well within the
powers of Congress to grant exceptions to, or to amend where

necessary, the Salary Standardization Law, where the public good so
requires. At the
_______________
220 CONST., Art. VI, Sec. 1.
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same time, in line with its duty to determine221

the proper allocation of
powers between the several departments, this Court is naturally
hesitant to intrude too readily into the domain of another co-equal
branch of government where the absence of reason and the vice of
arbitrariness are not clearly and unmistakably established.
The contention in the main opinion that herein petitioner
represents the “politically powerless,” and therefore should not be
compelled to seek a political solution, rings hollow.
First, as pointed out by the U.S. Supreme 222
Court in City of
Cleburne Texas v. Cleburne Living Center, “[a]ny minority can be
said to be powerless to assert direct control over the legislature, but
if that were a criterion for higher level scrutiny by the courts,
223
much
economic and social legislation would now be suspect.”
Second, there is nothing of record which would explain why the
rank and file employees of the BSP in particular should be
considered more “powerless” than the rank and file employees of the
other GOCCs and GFIs, particularly those to whom Congress has
granted exemption.
Third, as already mentioned, House Bill 123, providing for,
among others, the exemption of all BSP employees from the
coverage of the Compensation Classification System of the Salary
Standardization Law is already pending in Congress. Thus, it would
seem that the petitioner and its members are not without any support
from within that legislative body.
Moreover, in view of the tight fiscal and budgetary situation
confronting the national government, both the executive and
legislative branches of the government are actively reassessing the
statutes which have exempted certain GOCCs and
_______________
221 Angara v. Electoral Commission, 63 Phil. 139, 157 (1936).

222 Supra.
223 Id., at p. 444.
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Pilipinas
GFIs from the Salary Standardization224 Law, as reported in a number

of newspapers of general circulation.
Thus, in line with the austerity program set under Administrative
Order 130 issued by the President on August 31, 2004, the
Department of Budget and Management is 225 reviewing the pay
packages of 1,126 GOCCs and their subsidiaries, particularly those
which have been exempted from the Compensation
226
Classification
System of the Salary Standardization
227
Law, to bring their salaries at
par with national agencies. Additionally, the Department of Budget
has moved for the removal of all the exemptions of the GOCCs from
the Salary Standardization law and the slashing of sala-
_______________
224 Vide: “Pay Cuts for Gov’t Fat Cats: GSIS, SSS heads vow to back austerity
plan,” Philippine Daily Inquirer at A1, September 17, 2004; “Gov’t Fat Cats Under
Fire, Boncodin: Perks, pay of execs not illegal” Philippine Daily Inquirer at A1,
September 16, 2004; “GOCC Execs Get P5M to P9M in pay, Boncodin tells
Senators” Philippine Daily Inquirer at A1, September 15, 2004; “Senate ‘WMD’ to
hit GOCCs” The Philippines Star, September 17, 2004; “Gov’t Execs Get Top,
P9.85M a year for ex-PCSO chief” The Manila Times, September 15, 2004; “Gov’t
Execs Told To Cut Salaries, GOCCs & GFIs ordered to help in austerity campaign”
The Manila Bulletin, http://www.mb.com.ph/MAIN2004091118212.html; “Clamor
for GOCC pay cuts spreads to the House” The Manila Times, September 9, 2004;
“GOCCs Carry bulk of R5.4-T National Debt, The Manila Bulletin,
http://www.mb.com.ph/MTNN2004090817955.html; “State Firms Fuel Crisis,
Senators blame GOCC officials,” The Manila Times, September 8, 2004.
225 “GMA: GOCCs wiped into line, Retain your fat paychecks and get fired,
GOCC execs warned,” Manila Bulletin at 1, 6, September 17, 2004.
226 “Poor provinces protest decrease in pork barrel, GOCC pay cut plan “Manila
Bulletin at A1, A4, September 16, 2004.
227 “GOCC execs agree to pay cut,” Manila Times, September 17, 2004
(http://manila times.net/national/2004/sept/17/yehey/top_
stories/20040927top3.html).
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ries of some
228
GOCC officials to help ease the government’s financial
problems.
There have also been229suggestions to shift to a performance-based
compensation structure, or to amend the charters of the GOCCs
exempted from the Salary Standardization 230Law to allow the
President to set limits on the compensation received by their
personnel. Budget Secretary Emilia Boncodin has also disclosed that
the President had mandated “a cut in pay of members of the board
and officers of GOCCs that are not competing with the private
sector,” adding that those who “d[o] not compete with the private 231
sector would have to observe the Salary Standardization Law.”
Together with these developments, House Majority Leader
Prospero Nograles has called on Congress to step in232and institute
amendments to existing charters of GFI’s and GOCCs which have
been exempted from the Compensation Classification System of the
Salary Standardization Law; and, thereafter, pass a law standardizing
233
the salaries of GOCC and GFI employees and executives. Other
members of the House of Representatives, particularly the party-list
lawmakers, have
_______________
228 “Budget dept eyes cut in pay of GOCC officials,” September 11, 2004
(http://money.inq7.net/topstories/view_topstories.php?
yyy=2004&mon=09&dd=11&file=3.
(http://manilatimes.net/national/2004/sept/17/yehey/top_stories/20040927top3.html).
230 “Gov’t fat cats under fire,” Philippine Daily Inquirer at A1. September 16,
2004.
231 “Pay cuts for gov’t fat cats, GSIS, SEC heads vow to back austerity plan,”
Philippine Daily Inquirer at A1, September 17, 2004.
232 “GMA: GOCC wiped into line, Retain your fat paychecks and get fired, GOCC
execs warned,” Manila Bulletin at 1, 6, September 17, 2004.
(http.//manilatimes.net/national/2004/sept/17/yehey/top_stories/20040917top3.html.
592

Pilipinas
suggested a cut on the salary schemes of GOCC executives, with the

funds saved to be channeled to a “special fund”
234
for giving lowly
paid government employees a salary increase.
Whether any of the foregoing measures will actually be
implemented by the Congress still remains to be seen. However,
what is important is that Congress is actively reviewing the policies
concerning GOCCs and GFIs with respect to the Salary

Standardization Law.
Hence, for this Court to intervene now, when no intervention is
called for, would be to prematurely curtail the public debate on the
issue of compensation of the employees of the GOCCs and GFIs,
and effectively substitute this Court’s policy judgments for those of
the legislature, with whom the “power of the purse” is
constitutionally lodged. Such would not only constitute an improper
exercise of the Court’s power of judicial, review, but may also
effectively stunt the growth and maturity of the nation as a political
body as well.
In this regard, it may be worthwhile to reflect upon the words of
Mr. Chief Justice Berger 235
of the American Court in his dissenting
opinion in Plyler v. Doe, to wit:
The Court makes no attempt to disguise that it is acting to make up for

Congress’ lack of “effective leadership” in dealing with the serious
national problems caused by the influx of uncountable millions of illegal
aliens across our borders. The failure of enforcement of the immigration
laws over more than a decade and the inherent difficulty and expense of
sealing our vast borders have combined to create a grave socioeconomic
dilemma. It is a dilemma that has not yet been fully assessed, let alone
addressed. However, it is not the function of the Judiciary to provide
“effective leadership” simply because the political branches of
government fail to do so.
_______________
234 Gov’t fat cats under fire, Boncodin: Perks, pay of execs not illegal,” Philippine
Daily Inquirer at A1, September 16, 2004.
235 Supra.
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The Court’s holding today manifests the justly criticized judicial

tendency to attempt speedy and wholesale formulation of “remedies”
for the failures—or simply the laggard pace—of the political processes
of our system of government. The Court employs, and in my view abuses,
the Fourteenth Amendment in an effort to become an omnipotent and
omniscient problem solver. That the motives for doing so are noble and
compassionate does not alter the fact that the Court distorts our
constitutional function to make amends for the defaults of others.
xxx
The Constitution does not provide a cure for every social ill, nor does
it vest judges with a mandate to try to remedy every social problem.
Moreover, when this Court rushes to remedy what it perceives to be the
failing of the political processes, it deprives those processes of an
opportunity to function. When the political institutions are not forced to
exercise constitutionally allocated powers and responsibilities, those
powers, like muscles not used, tend to atrophy. Today’s cases, I regret to
say, present yet another example of unwarranted judicial action which
in the long
236
run tends to contribute to the weakening of our political
processes. (Emphasis supplied; citations and footnotes omitted)
The Social Justice Provisions of the Constitution do not Justify the

Grant of the Instant Petition
May this Court depart from established rules in equal protection
analysis to grant a group of government employees, the Bangko
Sentral ng Pilipinas’ rank and file, adjustments in their salaries and
wages? Can the exemption from a law mandating the salary
standardization of all government employees be justified based on
the economic and financial needs of the employees, and on the
assertion that those who have less in life should have more in law?
Can the social justice provisions in the Constitution override the
strong presump-
_______________
236 Id., at pp. 242-253.
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Pilipinas
tion of constitutionality of the law and place the burden, under the
test of “strict scrutiny”, upon the government to demonstrate that its
classification has been narrowly tailored to further compelling
governmental interests?
Notwithstanding the lack of support from both local and foreign
jurisprudence to justify the grant of the instant petition, the main
opinion maintains that the 237policy of social justice and the special
protection afforded to labor require the use of equal protection as a
tool of effective intervention, and the adoption of 238
a less deferential
attitude by this Court to legislative classification.
The citation of the social justice provisions of the Constitution,
are non sequitur. As previously discussed, neither the petitioner nor
the main opinion has clearly explained how a provision placing the
rank and file of the BSP on equal footing with all other government
employees in terms of compensation and position classification can

be considered oppressive or discriminatory.
In this regard, the citation
239
of International School Alliance of
Educators v. Quisumbing is doubly ironic. For to demonstrate the
institutionalization of the principle of “equal pay for equal work” in
our legal system, footnote 22 of the decision refers specifically to
the Salary Standardization Law as embodying said principle:
Indeed, the government employs this rule “equal pay for equal work” in
fixing the compensation of government employees. Thus, Republic Act No.
6758 (An Act Prescribing a Revised Compensation and Position
Classification System in Government and for Other Purposes) declares it
“the policy of the State to provide equal pay for substantially equal work
and to base differences in pay upon substantive differences in duties and
responsibilities, and qualification requirements of the positions. See also the
Preamble of Presidential
_______________
237 Main Opinion at p. 57.

238 Id., at p. 55.
239 Supra.
595
VOL. 446, DECEMBER 15, 2004 595

Decree No. 985 (A Decree Revising the Position Classification and

Compensation
240
Systems in the National Government, and Integrating the
same)
At the same time, the General Provisions of the Salary

Standardization Law clearly incorporate the spirit and intent of the
social justice provisions cited in the main opinion, to wit:
SECTION 3. General Provisions.—The following principles shall govern

the Compensation and Position Classification System of the Government:
(a) All government personnel shall be paid just and equitable wages;
and while pay distinctions must necessarily exist in keeping with
work distinctions, the ratio of compensation for those occupying
higher ranks to those at lower ranks should be maintained at
equitable levels, giving due consideration to higher percentage of
increases to lower level positions and lower percentage increases to
higher level positions;
(b) Basic compensation for all personnel in the government and
government-owned or controlled corporations and financial
institutions shall generally be comparable with those in the private
sector doing comparable work, and must be in accordance with

prevailing laws on minimum wages;
(c) The total compensation provided for government personnel must be
maintained at a reasonable level in proportion to the national
budget;
(d) A review of government compensation rates, taking into account
possible erosion in purchasing power due to inflation and other
factors, shall be conducted periodically.
How then are the aims of social justice served by removing the BSP
rank and file personnel from the ambit of the Salary Standardization
Law? In the alternative, what other public purpose would be served
by ordering such an exemption? Surely to grant the rank and file of
the BSP exemption solely for the reason that other GOCC or GFI
employees have been
_______________
240 Ibid.
596

Pilipinas
exempted, without regard for the reasons which impelled the

legislature to provide for those exemptions, would be to crystallize
into our law what241Justice Holmes sardonically described as “merely
idealizing envy.”
Similarly, the justification that petitioner and its members
represent “the more impotent rank and file government employees
who, unlike employees in the private sector, have no specific rights
to organize as a collective bargaining unit and negotiate for better
terms and conditions for employment, nor the power to hold a strike
to protest unfair labor practices” is unconvincing. This Court’s
discussion of the differences between employment in the
GOCCs/GFIs and the private sector, to my mind, is more insightful:
The general rule in the past and up to the present is that “the terms and
conditions of employment in the Government, including any political
subdivision or instrumentality thereof are governed by law” (Section 11, the
Industrial Peace Act, R.A. No. 875, as amended and Article, 277, the Labor
Code, P.D. No. 442, as amended). Since the terms and conditions of
government employment are fixed by law, government workers cannot
use the same weapons employed by workers in the private sector to
secure concessions from their employers. The principle behind labor
unionism in private industry is that industrial peace cannot be secured
through compulsion by law. Relations between private employers and

their employees rest on an essentially voluntary basis. Subject to the
minimum requirements of wage laws and other labor and welfare
legislation, the terms and conditions of employment in the unionized
private sector are settled through the process of collective bargaining.
In government employment, however, it is the legislature and, where
properly given delegated power, the administrative heads of government
which fix the terms and conditions of employment. And this is effected
through statutes or administrative circulars, rules, and regulations, not
through collective bargaining agreements.
_______________
241 Quoted in F.A. HAYEK, THE CONSTITUTION OF LIBERTY 85 (1960 Ed.).
597
VOL. 446, DECEMBER 15, 2004 597

Pilipinas
xxx
Personnel of government-owned or controlled corporations are now
part of the civil service. It would not be fair to allow them to engage in
concerted activities to wring higher salaries or fringe benefits from
Government even as other civil service personnel such as the hundreds
of thousands of public school teachers, soldiers, policemen, health
personnel, and other government workers are denied the right to
engage in similar activities.
To say that the words “all employers” in P.D. No. 851 includes the
Government and all its agencies, instrumentalities, and government-owned
or controlled corporations would also result in nightmarish budgetary
problems.
For instance, the Supreme Court is trying its best to alleviate the
financial difficulties of courts, judges, and court personnel in the entire
country but it can do so only within the limits of budgetary appropriations.
Public school teachers have been resorting to what was formerly
unthinkable, to mass leaves and demonstrations, to get not a 13th-month pay
but promised increases in basic salaries and small allowances for school
uniforms. The budget of the Ministry of Education, Culture and Sports has
to be supplemented every now and then for this purpose. The point is,
salaries and fringe benefits of those embraced by the civil service are fixed
by law. Any increases must come from law, from appropriations or savings
under the law, and not from concerted activity.
The Government Corporate Counsel, Justice Manuel Lazaro, in his
consolidated comment for respondents GSIS, MWSS, and PVTA gives the
background of the amendment which includes every government-owned or
controlled corporation in the embrace of the civil service:
xxx
“ ‘Moreover, determination of employment conditions as well as supervision of the

management of the public service is in the hands of legislative bodies. It is further
emphasized that government agencies in the performance of their duties have a right
to demand undivided allegiance from their workers and must always maintain a
pronounced esprit de corps or firm discipline among their staff members. It would be
highly incompatible with these requirements of the public service, if
598

personnel took orders from union leaders or put solidarity with members of the
working class above solidarity with the Government. This would be inimical to the
public interest.
xxx
“Similarly, Delegate Leandro P. Garcia, expressing support for the inclusion of
government-owned or controlled corporations in the Civil Service, argued:
“‘It is meretricious to contend that because Government-owned or controlled
corporations yield profits, their employees are entitled to better wages and fringe
benefits than employees of Government other than Government-owned and
controlled corporations which are not making profits. There is no gainsaying the fact
that the capital they use is the people’s money.’ (see: Records of the 1971
Constitutional Convention).
“Summarizing the deliberations of the 1971 Constitutional Convention on the
inclusion of Government-owned or controlled corporations, Dean Joaquin G. Bernas,
SJ., of the Ateneo de Manila University Professional School of Law, stated that
government-owned corporations came under attack as milking cows of a
privileged few enjoying salaries far higher than their counterparts in the
various branches of government, while the capital of these corporations belongs
to the Government and government money is pumped into them whenever on
the brink of disaster, and they should therefore come under the stric[t]
surveillance of the Civil Service System. (Bernas, The 1973 Philippine
Constitution, Notes and Cases, 1974 ed., p. 524).”
xxx
Section 6, Article XII-B of the Constitution gives added reasons why

the government employees represented by the petitioners cannot expect
treatment in matters of salaries different from that extended to all other
government personnel. The provision states:
“SEC. 6. The National Assembly shall provide for the standardization of

compensation of government officials and employees, including those in
government-owned or controlled corporations, taking into account the nature of the
responsibili-
599
VOL. 446, DECEMBER 15, 2004 599

ties pertaining to, and the qualifications required for the positions concerned.”
It is the legislature or, in proper cases, the administrative heads of

government and not the collective bargaining process nor the
concessions wrung by labor unions from management that determine
how much the workers in government-owned or controlled
corporations may receive in terms of salaries, 13th month pay, and
other conditions or terms of employment. There are government
institutions which can afford to pay two weeks, three weeks, or even 13th-
month salaries to their personnel from their budgetary appropriations. 242
However, these payments must be pursuant to law or regulation.
(Emphasis supplied)
Certainly, social justice is more than picking and choosing lines

from Philippine and foreign instruments, statutes and jurisprudence,
like ripe cherries, in an effort to justify preferential treatment of a
favored group.
243
In the immortal words of Justice Laurel in Calalang
v. Williams:
The petitioner finally avers that the rules and regulations complained of
infringe upon the constitutional precept regarding the promotion of social
justice to insure the well-being and economic security of all the people. The
promotion of social justice, however, is to be achieved not through a
mistaken sympathy towards any given group. Social justice is “neither
communism, nor despotism, nor atomism, nor anarchy,” but the
humanization of laws and the equalization of social and economic forces
by the State so that justice in its rational and objectively secular
conception may at least be approximated. Social justice means the
promotion of the welfare of all the people, the adoption by the Government
of measures calculated to insure economic stability of all the competent
elements of society, through the maintenance of a proper economic and
social equilibrium in the interrelations of the members of the community,
constitutionally, through the adoption of measures legally justifiable, or
extra-
_______________
242 Alliance of Government Workers v. Minister of Labor and Employment, 124 SCRA 1,
13-20 (1983).
243 70 Phil. 726 (1940).
600

constitutionally, through the exercise of powers underlying the existence of

all governments
244
on the time-honored principle of salus populi est suprema
lex. (Emphasis and italics supplied)
Postscript
I agree wholeheartedly with the main opinion’s statement that
“[t]here should be no hesitation in using the equal protection clause
as a major cutting edge to eliminate every conceivable irrational
discrimination in our society.”
However, because I find that the classification contained in the
questioned proviso is based on real differences between the
executive level and the rank and file of the BSP; is rationally related
to the attainment of the objectives of the new Central Bank Act; and,
further, that the subsequent amendments to the charters of certain
other GOCCs and GFIs did not materially affect the rational basis
for this classification, I do not believe that the classification in the
case at bar is impressed with the vice of irrationality.
The mere fact that petitioner’s members are employees of the
Bangko Sentral ng Pilipinas, admittedly perhaps the biggest among
the GFIs, does not, to my mind, automatically justify their
exemption provided for by the Salary Standardization Law. In my
humble view, the equal protection clause ought not to be used as a
means of “reserving greener pastures to sacred cows” in
contravention of the Constitutional mandate to “provide for the
standardization of compensation of government officials and
employees, including those in government-owned or controlled
corporations with original charters, taking into account the nature of
the responsibilities pertaining to, and the qualifications required for
their positions.”
WHEREFORE, I vote to deny the instant petition.
_______________
244 Id., at pp. 734-735.
601
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Pilipinas
CONCURRING OPINION
CHICO-NAZARIO, J.:
1
1
Does Sec. 15(c), Article II, Republic Act No. 6753, which allows
the exemption of BSP employees occupying salary 2
grade (SG) 20
and above from the coverage of Rep. Act No. 6758 result in a denial
of petitioner’s constitutional right to equal protection of the law?
I submit that it does and said provision should therefore be
declared unconstitutional on the ground that the division between
BSP employees covered from SG 19 down and from SG 20 up is
purely arbitrary. Even given the wide discretion vested in Congress
to make classifications, it is nonetheless clear that the lawmaking
body abused its discretion in making such classification.
It is not disputed that all that is required for a valid classification
is that it must be reasonable, i.e., that it must be based on substantial
distinctions which make for real differences; it must be germane to
the purpose of the law; it must not be limited to existing 3
conditions
and it must apply equally to each member of the class.
In the instant case, the classification was justified on the need of
the BSP to compete in the labor market for economists, accountants,
lawyers, experts in security, printing, commercial and rural banking,
financial intermediation fund management, 4
and other highly
technical and professional personnel, which it could not do unless
personnel occupying top positions are exempted from the coverage
of Rep. Act No. 6758, the Salary Standardization Law.
_______________
1 New Central Bank Act.

2 Salary Standardization Law.
3 People v. Vera, 65 Phil. 56.
4 V Records of the House of Representatives, 9th Congress, 1st Session 783 (31
March 1993) at 166.
602

Pilipinas
Under Rep. Act No. 6758, however, professional supervisory

positions are covered by SG 9 to SG 33 which includes:
(R)esponsible positions of a managerial character involving the exercise of

management functions such as planning, organizing, directing, coordinating,
controlling and overseeing within delegated authority the activities of an
organization, a unit thereof or of a group, requiring some degree of
professional, technical or scientific knowledge and experience, application
of managerial or supervisory skills required to carry out their basic duties
and responsibilities involving functional guidance and control, leadership,
as well as line supervision. These positions require intense and thorough
knowledge of a specialized field usually acquired from completion of a

bachelor’s degree or higher degree courses.
The positions
5
in this category are assigned Salary Grade 9 to Salary
Grade 33. (Italics supplied)
SG 33 is assigned to the President of the Philippines; SG 32 is for

the Vice-President, Senate President, Speaker of the House and
Chief Justice of this Court. SG 31 is for senators, associate justices
of this Court, chairpersons of the constitutional commissions,
department secretaries and other positions of equivalent rank while
SG 30 is assigned to the constitutional
6
commissioners and other
positions of equivalent rank.
Economists, accountants, lawyers and other highly technical and
professional personnel are covered under SG 9 to 29 as already
adverted to.
Classification in law is the grouping of persons/objects because
they agree with one another in certain particulars and differ from
others in those same particulars. In the instant case, however, SG 20
and up do not differ from SG 19 and down in terms of technical and
professional expertise needed as the entire range of positions all
“require intense and thor-
_______________
5 Section 5(a), Rep. Act No. 6758.

6 Sections 7 and 8, ibid.
603
VOL. 446, DECEMBER 15, 2004 603

Pilipinas
ough knowledge of a specialized field usually acquired from

completion of a bachelor’s degree or higher courses.”
Consequently, if BSP needs an exemption from Rep. Act No.
6758 for key positions in order that it may hire the best and brightest
economists, accountants, lawyers and other technical and
professional people, the exemption must not begin only in SG 20.
Under the circumstances, the cut-off point, the great divide,
between SG 19 and 20 is entirely arbitrary as it does not have a
reasonable or rational foundation. This conclusion finds support in
no less than the records of the congressional deliberations, the
bicameral conference committee having pegged the cut-off period at
SG 20 despite previous discussions in the7
Senate that the “executive
group” is “probably” SG 23 and above.
Moreover, even assuming that the classification is reasonable,
nonetheless, its continued operation will result in hostile
discrimination against those occupying grades 19 and below.

As pointed out by Mr. Justice Puno, some other government
corporations, by law, now exempt all their employees from the
coverage of Rep. Act No. 6758. BSP employees occupying SG 19
and below, however, shall remain under Rep. Act No. 6758
considering the rule that the subject classification, to be valid, must
not be limited only to conditions existing as of the time the law was
passed. Thus, while BSP employees from SG 19 down will continue
to be covered under Rep. Act No. 6758, other government
employees of the same class and occupying the same positions in
government corporations will be exempt.
I therefore concur with Justice Puno in that respect and,
considering his thorough discussion, I have nothing more to add
thereto.
_______________
7 IV Records of the Senate, 9th Congress, 1st Session 1086-87 (05 June 1993).
604

Pilipinas
Section 15(c), Article II, RA No. 7653 declared unconstitutional.
Notes.—So much for the authorities. For the nonce we would

prefer to forget them entirely, and here in the Philippines, being in
the agreeable state of breaking new ground, would rather desire our
decision to rest on a strong foundation of reason and justice than on
a weak one of blind adherence to tradition and precedent. (Villaflor
vs. Summers, 41 Phil. 62 [1920])
Under the policy of social justice, the law bends over backward
to accommodate the interests of the working class on the humane
justification that those with less privilege in life should have more in
law. Rightly, we have stressed that social justice legislation, to be
truly meaningful and rewarding to our workers, must not be
hampered in its application by longwinded arbitration and
litigation. Rights must be asserted and benefits received with the
least inconvenience. (Uy vs. Commission on Audit, 328 SCRA 607
[2000])
——o0o——
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2/20/2021 SUPREME COURT REPORTS ANNOTATED VOLUME 446

VOL. 446, DECEMBER 15, 2004 299

CENTRAL BANK (now Bangko Sentral ng Pilipinas)

Constitutional Law; Equal Protection Clause; The “equal protection”

300 SUPREME COURT REPORTS ANNOTATED

Central Bank Employees Association, Inc. vs. Bangko Sentral ng Pilipinas

wide leeway in providing for a valid classification. The equal protection

VOL. 446, DECEMBER 15, 2004 301

Central Bank Employees Association, Inc. vs. Bangko Sentral ng Pilipinas

though affirmed by a former adjudication, is open to inquiry and

302 SUPREME COURT REPORTS ANNOTATED

Central Bank Employees Association, Inc. vs. Bangko Sentral ng Pilipinas

VOL. 446, DECEMBER 15, 2004 303

Central Bank Employees Association, Inc. vs. Bangko Sentral ng Pilipinas

Same; Same; Same; Same; Same; Same; Same; Separation of Powers;

by the legislature”—there is nothing inherently sacrosanct in a policy

304 SUPREME COURT REPORTS ANNOTATED

Central Bank Employees Association, Inc. vs. Bangko Sentral ng Pilipinas

Same; Same; Same; Same; Same; Same; Same; As regards the

substantial distinctions so as to differentiate, the BSP rank-and-file from the

VOL. 446, DECEMBER 15, 2004 305

Central Bank Employees Association, Inc. vs. Bangko Sentral ng Pilipinas

Same; Same; Same; Same; Same; Same; It is patent that the

306 SUPREME COURT REPORTS ANNOTATED

Central Bank Employees Association, Inc. vs. Bangko Sentral ng Pilipinas

been devoid of any substantial or material basis.—It is precisely this

VOL. 446, DECEMBER 15, 2004 307

Central Bank Employees Association, Inc. vs. Bangko Sentral ng Pilipinas

emption from the SSL is a “privilege” fully within the legislative

discriminatory character of the subsequent blanket and total exemption of

308 SUPREME COURT REPORTS ANNOTATED

Central Bank Employees Association, Inc. vs. Bangko Sentral ng Pilipinas

discrimination and/or equality are the International Covenant on Civil and

guaranteed] . . . without any discrimination” and to “secure without

VOL. 446, DECEMBER 15, 2004 309

Central Bank Employees Association, Inc. vs. Bangko Sentral ng Pilipinas

Same; Same; Separation of Powers; The deference to Congressional

American or English jurisprudence. Nevertheless, these foreign decisions

310 SUPREME COURT REPORTS ANNOTATED

Central Bank Employees Association, Inc. vs. Bangko Sentral ng Pilipinas

VOL. 446, DECEMBER 15, 2004 311

Central Bank Employees Association, Inc. vs. Bangko Sentral ng Pilipinas

312 SUPREME COURT REPORTS ANNOTATED

PANGANIBAN, J., Dissenting Opinion:

Doctrine of Relative Constitutionality; From the manner in which it

because of a change in circumstances affecting its validity belongs only to a

VOL. 446, DECEMBER 15, 2004 313

Central Bank Employees Association, Inc. vs. Bangko Sentral ng Pilipinas

314 SUPREME COURT REPORTS ANNOTATED

Central Bank Employees Association, Inc. vs. Bangko Sentral ng Pilipinas

not such entities vested with international personality; any possible

constitutional violation or gravely abusive conduct when it enacted RA

VOL. 446, DECEMBER 15, 2004 315

Central Bank Employees Association, Inc. vs. Bangko Sentral ng Pilipinas

for what the ponencia calls “altered circumstances.” Congress should be

316 SUPREME COURT REPORTS ANNOTATED

Central Bank Employees Association, Inc. vs. Bangko Sentral ng Pilipinas

VOL. 446, DECEMBER 15, 2004 317

Central Bank Employees Association, Inc. vs. Bangko Sentral ng Pilipinas

unless absolutely necessary to a decision of the case.” In addition, the Court