08-10-2012 DOJ Opinion No. 055, s. 2012
Whether the BSP is Excluded from the Coverage of R.A. No. 6657, as amended, in relation to E.O. No. 407 s. 1990
DOJ OPINION NO. 055, s. 2012
August 10, 2012
Hon. Juan De Zuniga, Jr.
Deputy Governor and General Counsel
Bangko Sentral ng Pilipinas
A. Mabini St., Malate
1004 Manila
Dear Deputy Governor De Zuniga :
We refer to your request for opinion on whether the Bangko Sentral ng Pilipinas (BSP) is excluded from the coverage of Republic Act (RA) No. 6657, as amended, 1 in relation to Executive Order (EO) No. 407, 2 dated 14 June 1990.
The query stems from Section 1 of EO No. 407, which pertinently reads —
"All Government instrumentalities, including but not limited to government agencies, government-owned and controlled corporations or financial institutions such as the Development Bank of the Philippines, Philippine National Bank, Republic Planters Bank, Asset Privatization Trust, Presidential Commission on Good Government, Department of Agriculture, State Colleges and Universities, Department of National Defense, shall immediately execute Deeds of Transfer in favor of the Republic of the Philippines as represented by the Department of Agrarian Reform and surrender to the latter department all landholdings, suitable for agriculture including all pertinent ownership documents in their custody, such as the owner's duplicate copy of the certificates of title, tax declarations and other documents necessary to effect the transfer of ownership. . . . ." (Underscoring supplied.)
Said EO was issued by then President Corazon C. Aquino to implement the provisions of RA No. 6657, as amended, distributing agricultural lands to farmer-beneficiaries "lands owned by the Government devoted to or suitable for agriculture", 3 including "all lands foreclosed by government financial institutions". 4
You posit that the BSP is not covered by the compulsory directive provided under EO No. 407 on the following grounds:
(1) The BSP is sui generis being the central money authority of the Philippines;
(2) The BSP has fiscal and administrative autonomy; and
(3) The foreclosure and acquisition by the BSP of agricultural lands is a consequence of its unique functions pertaining to monetary policy and as lender of last resort.
You also state that BSP may, however, voluntarily comply, pursuant to its fiscal and administrative autonomy, with notices of coverage issued by the Department of Agrarian Reform (DAR) over agricultural properties that BSP has foreclosed or acquired pursuant of its statutory functions and responsibilities. STIcaE
We agree.
The establishment of a central monetary authority in the Philippines finds its roots in the 1973 Constitution, 5 which designated the then Central Bank of the Philippines as such. The provision on the central monetary authority was adopted in the 1987 Constitution, which reads —
"Section 20. The Congress shall establish an independent central monetary authority, . . . . The authority shall provide policy direction in the areas of money, banking, and credit. It shall have supervision over the operations of banks and exercise such regulatory powers as may be provided by law over the operations of finance companies and other institutions performing similar functions.
"Until the Congress otherwise provides, the Central Bank of the Philippines operating under existing laws, shall function as the central monetary authority."
Pursuant to this mandate, Congress enacted R.A. No. 7653, establishing the BSP as the country's independent central monetary authority. 6 Its primary objective is to "maintain price stability conducive to a balanced and sustainable growth of the economy." 7
Owing to its "unique function and responsibility" 8 to "provide policy directions in the areas of money, banking, and credit" 9 which necessarily affect the financial stability of the government, the BSP cannot be considered as among the government-owned and controlled corporations (GOCC) or financial institutions (GFI) required to comply with EO No. 407.
It is worthy to note at this point that the Central Bank of the Philippines, the predecessor of BSP, is not among the GOCCs or GFIs expressly enumerated in the EO. The authorities at that time would have been aware that Central Bank has in its custody agricultural lands which were used as collateral to secure loans extended by it to other banking institutions. 10 Its exclusion, therefore, is a clear indication that BSP (Central Bank then) falls outside the purview of EO 407. Expressio unius est exclusio alterius. The express mention of one person, thing, or consequence implies the exclusion of all others. AcIaST
Further, realizing its important role in a developing economy, Congress deemed it fit to endow BSP with "fiscal and administrative autonomy" 11 in order to enhance its ability to fulfill its primary objective to maintain price stability.
In essence, fiscal autonomy entails freedom from outside control and limitations, other than those provided by law. It is the freedom to allocate and utilize funds granted by law, in accordance with law, and pursuant to the wisdom and dispatch its needs may require from time to time. 12 Administrative autonomy, on the other hand, is best understood within the context of local public administration. In explaining the concept of autonomy, the Supreme Court in the case Limbona v. Mangelin, 13 stated —
"Autonomy is either decentralization of administration or decentralization of power. . . . it relieves the central government of the burden of managing local affairs and enables it to concentrate on national concerns. The President exercises "general supervision" over them, but only to "ensure that local affairs are administered according to law." He has no control over their acts in the sense that he can substitute their judgments with his own. . . . ." (Emphasis ours.)
Autonomy requires operational freedom to guarantee the independence of the entity. The directive to transfer its agricultural lands to the Department of Agrarian Reform (DAR), therefore, may be considered as undue infringement on BSP's fiscal autonomy as it stifles the latter's discretion to allocate and utilize its resources in the pursuit of its primary objective. This function is properly exercised by the Bangko Sentral through the Monetary Board 14 and its officials.
Likewise, the agricultural lands held by BSP were foreclosed or acquired in the course of its regular business operations through the grant of rediscounting 15 and/or emergency 16 loans to banking institutions. These regular and mandated tasks are the necessary results of its unique functions pertaining to monetary policy and as lender of last resort. Thus, as aptly pointed out, the order to transfer these properties to DAR is a direct interference with BSP's administrative autonomy to dispose agricultural properties which it has foreclosed or acquired as a consequence of its functions consistent with its primary objective. EcDATH
The foregoing notwithstanding, we likewise do not see any objection to BSP's voluntary compliance with the directive pursuant to its fiscal and administrative autonomy, to transfer to DAR agricultural properties foreclosed or acquired by it in the exercise of its statutory functions and responsibilities.
Please be guided accordingly.
Very truly yours,
(SGD.) LEILA M. DE LIMA
Secretary
Footnotes
1. Subsequently amended by RA No. 9700, entitled "An Act Strengthening the Comprehensive Agrarian Reform Program" (2009).
2. Accelerating the Acquisition and Distribution of Agricultural Lands, Pasture Lands, Fishponds, Agro-Forestry Lands and Other Lands of the Public Domain Suitable for Agriculture (1990).
3. Section 4 thereof.
4. Section 7, ibid.
5. Section 14, Article XV.
6. Section 2 thereof.
7. Ibid.
8. Section 1 thereof.
9. Section 3 thereof.
10. Sections 86 and 87 (b), R.A. No. 265, as amended.
11. Op.cit.
12. Commission on Human Rights Employee's Association (CHREA) vs. Commission on Human Rights, G.R. No. 155336, 444 SCRA 316 (2004), citing Blaqura v. Alcala, G.R. Nos. 109406, 110642, 111494, 112056, 119597, 295 SCRA 366 (1998).
13. G.R. No. 80391, 170 SCRA 794 (1989).
14. Section 6, R.A. No. 7653.
15. Sections 81 and 82 (b), ibid.
16. Section 84, ibid.
C o p y r i g h t 2 0 1 2 C D T e c h n o l o g i e s A s i a I n c.