G.R. No. 196425; July 24, 2012
PROSPERO A. PICHAY, JR., Petitioner, vs. OFFICE OF THE DEPUTY EXECUTIVE SECRETARY FOR LEGAL AFFAIRS INVESTIGATIVE AND ADJUDICATORY DIVISION, HON. PAQUITO N. OCHOA, JR., in his capacity as Executive Secretary, and HON. CESAR V. PURISIMA, in his capacity as Secretary of Finance, and as an ex-officio member of the Monetary Board, Respondents.

FACTS

On April 16, 2001, President Gloria Macapagal-Arroyo issued Executive Order No. 12, creating the Presidential Anti-Graft Commission (PAGC). The PAGC was vested with the authority to investigate and hear administrative cases against presidential appointees for graft and corruption and to submit its report and recommendations directly to the President. Petitioner Prospero A. Pichay, Jr., a presidential appointee, was under investigation by the PAGC for alleged graft and corruption.
Subsequently, on November 15, 2010, President Benigno Simeon Aquino III issued Executive Order No. 13, which abolished the PAGC. E.O. No. 13 transferred the PAGC’s investigative, adjudicatory, and recommendatory functions to the newly created Investigative and Adjudicatory Division (IAD) within the Office of the Deputy Executive Secretary for Legal Affairs (ODESLA) of the Office of the President. Relying on this new executive order, the ODESLA-IAD continued the administrative proceedings against Pichay. This prompted Pichay to file a Petition for Certiorari and Prohibition, seeking to declare E.O. No. 13 unconstitutional and to prohibit respondents from proceeding against him.

ISSUE

Whether Executive Order No. 13, which abolished the PAGC and transferred its functions to the ODESLA-IAD, is unconstitutional for violating the doctrine of separation of powers and for constituting an invalid exercise of the President’s power of control and authority to reorganize.

RULING

The Supreme Court DISMISSED the petition and upheld the constitutionality of Executive Order No. 13. The Court ruled that the issuance of E.O. No. 13 was a valid exercise of the President’s constitutional power of control over the executive department and his statutory authority to reorganize the Office of the President. The legal logic is anchored on the President’s inherent mandate to ensure a streamlined, efficient, and economical bureaucracy. The Constitution vests the President with control of all executive departments, bureaus, and offices. This control includes the authority to reorganize the administrative structure of the Office of the President, as explicitly provided under Section 31, Title III, Book III of the Administrative Code of 1987.
The Court emphasized that the abolition of the PAGC and the transfer of its functions to an existing unit within the Office of the President did not constitute legislation or an encroachment on congressional power. The President did not create a new office with a new function but merely consolidated existing investigative and adjudicatory functions within the Office of the President to promote efficiency and economy. The power to investigate presidential appointees for administrative offenses is an inherent component of the President’s power of control and discipline. Therefore, transferring this function from one executive body (PAGC) to another (ODESLA-IAD) is a permissible internal reorganization. The Court also found that E.O. No. 13 was issued pursuant to valid statutory grants, including provisions in the General Appropriations Acts and related laws, which authorize the President to effect organizational changes. Consequently, the continued administrative proceedings against Pichay by the ODESLA-IAD were valid.