G.R. No. L-16704. March 17, 1962. VICTORIAS MILLING COMPANY, INC., petitioner-appellant, vs. SOCIAL SECURITY COMMISSION, respondent-appellee.
FACTS

The Social Security Commission (SSC) issued Circular No. 22 on October 15, 1958, directing employers to include bonuses and overtime pay in calculating the employee’s monthly remuneration for determining social security premium contributions, effective November 1, 1958. This circular reversed a prior circular (No. 7) which had expressly excluded such payments. Victorias Milling Company protested, arguing the circular contradicted the earlier interpretation and was invalid for lack of presidential approval and publication in the Official Gazette, as required for rules and regulations under the Social Security Act (Republic Act No. 1161). The SSC overruled the protest, asserting Circular No. 22 was merely an administrative interpretation of the law as amended, not a rule requiring such formalities.

ISSUE

Whether Circular No. 22 is a rule or regulation requiring presidential approval and publication, or merely an interpretative statement of policy.

RULING

The Supreme Court affirmed the SSC’s resolution, holding Circular No. 22 was an interpretative statement, not a rule or regulation. The legal logic distinguishes between an administrative rule, which creates new law with statutory force and requires delegated legislative compliance (including presidential approval and publication), and an administrative interpretation, which merely construes pre-existing law and is advisory until courts finally determine the law’s meaning. Circular No. 22 fell into the latter category. It was issued to advise on the effect of Republic Act No. 1792, which amended the Social Security Act’s definition of “compensation” by deleting the express exclusions for “bonuses, allowances or overtime pay” that were present in the original law. The circular did not add any new legal duty or detail but merely stated the SSC’s understanding that, following the legislative deletion, such payments must now be included in the compensation base for contributions. The penalty for non-compliance would arise from violating the statute itself, not the circular. Therefore, presidential approval and publication were not required for its effectivity. The Court also found the SSC’s interpretation correct, as the amended law’s clear text mandated the inclusion of bonuses and overtime pay actually given, regardless of their general legal character as non-demandable benefits.