G.R. No. 215650

G.R. No. 215650, March 28, 2023,
♦ Decision, Lopez, [J]
♦ Concurring Opinion, Gesmundo, [CJ]
♦ Concurring Opinion, Lazaro-Javier, [J]
♦ Concurring and Dissenting Opinion, Caguioa, [J]
♦ Separate Concurring Opinion, Leonen, [J]

AUGUSTO L. SYJUCO, JR., PETITIONER, VS. JOSEPH EMILIO A. ABAYA, IN HIS CAPACITY AS SECRETARY OF THE DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS; HONORITO D. CHANECO, IN HIS CAPACITY AS ADMINISTRATOR OF LIGHT RAIL TRANSIT AUTHORITY; AND RENATO Z. SAN JOSE, IN HIS CAPACITY AS OFFICER-IN-CHARGE OF THE METRO RAIL TRANSPORT 3 OFFICE, RESPONDENTS.

BAGONG ALYANSANG MAKABAYAN, REPRESENTED BY ITS SECRETARY GENERAL, RENATO REYES, JR.; TEODORO CASIÑO; MELQUIADES A. ROBLES; ELMER C. LABOG; SAMMY T. MALUNES; FERDINAND R. GAITE; VENCER CRISOSTOMO; JOSSEL I. EBESATE; GLORIA G. ARELLANO; HERMAN TIU LAUREL; MYRLEON E. PERALTA; AMORSOLO L. COMPETENTE; ELVIRA Y. MEDINA; MARIA DONNA GREY MIRANDA; ANGELO VILLANUEVA SUAREZ; JOSE SONNY G. MATULA; DAVID L. DIWA; JAMES BERNARD E. RELATIVO; AND GIOVANNI A. TAPANG, PETITIONERS, VS. JOSEPH EMILIO A. ABAYA, IN HIS CAPACITY AS SECRETARY OF THE DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS; RENATO Z. SAN JOSE, IN HIS CAPACITY AS OFFICER-IN-CHARGE OF METRO RAIL TRANSPORT 3 OFFICE; LIGHT RAIL TRANSIT AUTHORITY, REPRESENTED BY HONORITO D. CHANECO AS ADMINISTRATOR; METRO RAIL TRANSIT CORPORATION; AND LIGHT RAIL MANILA CORPORATION, RESPONDENTS.

UNITED FILIPINO CONSUMERS AND COMMUTERS, INC., REPRESENTED BY ITS PRESIDENT, RODOLFO B. JAVELLANA, JR., PETITIONER, VS. JOSEPH EMILIO A. ABAYA, IN HIS CAPACITY AS SECRETARY OF THE DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS; METRO RAIL TRANSIT CORPORATION; AND LIGHT RAIL TRANSIT AUTHORITY, RESPONDENTS.

BAYAN MUNA REPRESENTATIVE NERI JAVIER COLMENARES; BAYAN MUNA REPRESENTATIVE CARLOS ISAGANI ZARATE; ANTHONY IAN CRUZ; IMELDA V. LUNA; AND CARL ANTHONY ALA, PETITIONERS, VS. JOSEPH EMILIO A. ABAYA, IN HIS CAPACITY AS SECRETARY OF THE DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS; LIGHT RAIL TRANSIT AUTHORITY; AND RENATO Z. SAN JOSE, IN HIS CAPACITY AS OFFICER-IN-CHARGE OF METRO RAIL TRANSIT 3 OFFICE, RESPONDENTS.

JOSEPH VICTOR G. EJERCITO, JOSE L. ATIENZA, JR., IRWIN C. TIENG, MARIANO MICHAEL DEL MONTE VELARDE, JR., LEAH D. PAQUIZ, GUSTAVO S. TAMBUNTING, JESUS CRISPIN C. REMULLA, ALAN A. TANJUSAY, ALLAN S. MONTAÑO, LEODY Q. DE GUZMAN, RENATO B. MAGTUBO; AND ANNIE E. GERON, PETITIONERS, VS. WINSTON M. GINEZ, IN HIS CAPACITY AS CHAIRPERSON OF THE LAND TRANSPORTATION FRANCHISING AND REGULATORY BOARD; JOSE EMILIO A. ABAYA, IN HIS CAPACITY AS SECRETARY OF DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS; RENATO Z. SAN JOSE, IN HIS CAPACITY AS OFFICER-IN-CHARGE OF METRO RAIL TRANSIT 3 OFFICE; LIGHT RAIL TRANSIT AUTHORITY; METRO RAIL TRANSPORT CORPORATION; AND LIGHT RAIL MANILA CORPORATION, RESPONDENTS.

The doctrine in Vigan Electric Light Company, Inc. v. Public Service Commission1 on dispensing with the requirements of notice and hearing when the administrative body acts in a quasi-legislative capacity does not apply in cases where the law itself expressly provides for the procedure and requirements for the validity of an administrative rule. In such cases, the Court-as the stronghold for the Rule of Law---has no other recourse but to apply the law.

This Court resolves the consolidated Petitions for Certiorari and/or Prohibition,2 assailing the constitutionality of Department of Transportation and Communications (DOTC)3 Department Order No. 2014-014 (D.O. No. 2014-014), which mandated the application of the "user-pays" principle and adopted a uniform base fare for the Light Rail Transit (LRT) Lines 1 and 2 and the Metro Rail Transit (MRT) Line 3 of PHP 11.00 plus PHP 1.00 per kilometer of distance traveled.

In the Resolution4 dated March 10, 2015, this Court ordered the consolidation of G.R. Nos. 215650, 215653, 215703, 215704, and 216735.

Petitioners alleged, in substance, that D.O. No. 2014-014 violates the due process clause of the Constitution as it was issued without prior notice and hearing.5 They insisted that the effective 50 to 87% increase in the fare rates is ruthless, arbitrary,6 and without basis in fact and in law.7 Ultimately, they pray that D.O. No. 2014-014 be struck down as illegal and unconstitutional, and that respondents be permanently enjoined from implementing the provisions thereof.

During the 1970s, road traffic in Metro Manila had become so notorious and systematic that the government started exploring the possibility of introducing a modem mass transit system. The goal was to "relieve traffic congestion, improve the urban environment[,] and develop alternative economic and residential areas away from the city center."8

From 1976 to 1977, the World Bank funded a study conducted by Freeman Fox and Associates, which suggested a street-level light railway. Upon review of the then Ministry of Transportation and Communications (MOTC), it recommended that because of the many intersections along the proposed route, an elevated light railway is the best option. In relation to this, the MOTC commissioned another foreign firm for a supplementary study that was completed within three months.9

On July 12, 1980, then President Ferdinand E. Marcos signed Executive Order No. 603 (E.O. No. 603), creating respondent Light Rail Transit Authority (LRTA), a government instrumentality vested with corporate powers10 and an attached agency to the DOTC.11 Under E.O. No. 603, the LRTA is "primarily responsible for the construction, operation, maintenance, and/or lease of light rail transit systems in the Philippines xx x."12

To finance the LRT project, the Philippines obtained from the Belgian government a soft and interest-free loan for PHP 300,000,000.00 payable in 30 years. An additional loan in the amount of PHP 700,000,000.00 was further provided by a Belgian consortium, which also provided cars, signaling, power control, telecommunications, training, and technical assistance.13

On December 1, 1984, the LRT-Taft Avenue Line was officially opened to the public. Today, the LRT Line 1 (LRT-1) is a 19.65-kilometer elevated railway system servicing 19 stations14 along the route of Taft Avenue in Baclaran, Pasay City to Roosevelt Station in Quezon City.15 The LRTA originally managed the operations and maintenance of the LRT-1 until it was turned over to respondent Light Rail Manila Corporation (LRMC), pursuant to a 32-year concession agreement executed in September 2015 between the now Department of Transportation (DOTr), LRMC, and the LRTA.16

Meanwhile, in 1996, construction for the LRT Line 2 (LRT-2), popularly known as The Megatren, began. The PHP 31-billion-peso construction was funded by soft loans secured mainly from the Japan Bank for International Corporation.17 Phase One of the LRT-2 covering the stations of Santolan, Katipunan, Anonas, and Araneta Center-Cubao began operations on April 5, 2003, while Phase Two servicing stations from Betty Go-Belmonte to Legarda was inaugurated on April 5, 2004.18 The LRT-2 East Extension Project, which added two new stations in Marikina-Pasig and Antipolo, respectively, was inaugurated on July 1, 2021 and was opened to the public in the same month.19 The operations and maintenance of the LRT-2 is under the management of the LRTA.

The MRT Line 3 (MRT-3), on the other hand, is a 16.9-kilometer modern rail system traversing the stretch of Epifanio Delos Santos Avenue (EDSA), with stations from North Avenue in Quezon City to Taft Avenue in Pasay City. It was intended to alleviate the chronic traffic congestion along EDSA.20 In 1992, the DOTC entered into a Build-Lease-and-Transfer Agreement (BLT Agreement) with EDSA LRT Corporation LTD for the construction of the MRT-3 system. EDSA LRT Corporation LTD was later purchased by respondent Metro Rail Transit Corporation (MRTC), which then began the construction of the MRT-3 in 1996.21 On August 8, 1997,a revised BLT Agreement was signed between the DOTC and the MRTC, under which the MRTC will own, build, and maintain the system, while the DOTC will hold the franchise and run the operations, including the collection of fares.22 The MRT-3 was officially completed and inaugurated for full operations on July 20, 2000.23

Demand for the rail transit systems has consistently grown over its years of operation. According to the 2014 Annual Report of the LRTA, LRT-1 carried a total of 170.73 million passengers, while the LRT-2 ferried a total of 72.85 million riders that year. The daily average passenger ridership for both systems was 475,798 and 201,794, respectively.24 Based on the report, moreover, ridership for LRT-1 and LRT-2 has continually increased over the past five years, suggesting the commuting public's preference over the rail system due to its affordability and efficiency.25 Meanwhile, the MRT-3 transported a total of 167.82 million passengers in 2014, with an average daily ridership of 464,871,26 over the capacity of the system that was designed to carry 360,000 to 380,000 passengers only.27

The operations of the LRT and the MRT are, as a policy, subsidized by the national government to maintain affordable fares and boost ridership. In 2014, the LRTA was allotted a budget of PHP 9,567,612,000.00 to augment its income for payment of personnel services, maintenance and other operating expenses, as well as capital outlay and debt servicing.28 Meanwhile, the MRT-3 was allotted PHP 4,091,473,000.0029 as subsidy for mass transport, which shall be used in case its fare box revenue and non-rail income is not sufficient to cover the amount needed for payment of prior and current years' equity rental and maintenance fees and other obligations to the MRTC.30

In view of reducing government subsidy, the Office of the President, on August 5, 2010, directed the LRTA to conduct a comparative study on the operating costs of the LRT and the MRT vis-à-vis public utility buses.31 On August 25, 2011, the LRTA management presented the result of the study to the LRTA Board for its consideration. Upon request of the LRTA Board, DOTC Assistant Secretary George Esguerra also presented a report based on the Transportation Society of the Philippines's review, which it made as part of its volunteer work with the DOTC. Thereafter, the LRTA Board instructed the LRTA management to conduct a joint study with Assistant Secretary Esguerra (the Team). In September 2010, the Team presented their Fare Rationalization Study Report to the LRTA management.32 The DOTC presented the report to the top officials of the DOTC and the LRTA Board during its meeting in October 2010.33 On October 27, 2010, the Secretary of Finance, the Secretary of Budget and Management, the Secretary of Transportation and Communications, and the Secretary of Socio-Economic Planning (economic managers) executed a Memorandum for the President regarding the LRT fare adjustment.34

Eventually, the study report was submitted to the LRTA Board for its approval during its regular meeting on January 11, 2011. During the meeting, the LRTA Board provisionally approved the fare adjustment of PHP 11.00 boarding fare plus PHP 1.00/km, with the corresponding fare matrices, subject to a public consultation to be held on two occasions-February 4 and 5, 2011.35

The LRTA management published the Notice of Public Consultation in the Philippine Daily Inquirer on January 20, 2011 and in The Manilla Bulletin on January 27, 2011.36 On February 24, 2011, the LRTA Administrator issued a Memorandum to the LRTA Board on the Report on the Public Consultation Conducted for the LRTA's Fare Adjustment and Request for Approval of Management's Recommendation for a Revised Fare Legal for LRT-1 and LRT-2.37 The Report suggested that the proposed fare adjustment was not acceptable to the public.38

After duly considering the result of the public consultation, the LRTA Board approved its fare adjustment of distance-based fare scheme of PHP 11.00 plus PHP 1.00/km with the 20% student discount, to be implemented after consultation with the LTFRB and 30 days from the last day of proper publication. On April 20, 2011, the LTFRB concurred with the approved PHP 11.00 plus PHP 1.00/km fare adjustment and granting of a 20% student discount. Yet, on May 9, 2011, the LRTA Board and the DOTC decided to indefinitely defer the implementation of the fare increase.39

During its meeting on June 26, 2013, the LRTA Board approved anew the PHP 11.00 plus PHP 1.00/km fare adjustment for LRT-1 and LRT-2 but withdrew the 20% discount for students. During former President Benigno Simeon Aquino III's State of the Nation Address (SONA) on July 22, 2013, he reiterated the need to adjust the LRTA's and MRTC's fares so that the government subsidy for the MRTC and the LRTA can be used for other social services.40 In a Secretary's Certificate dated November 26, 2013, the LRTA Board affirmed the PHP 11.00 plus PHP 1.00/km fare adjustment for LRT-1 and LRT-2, as previously approved in 2011. The 1st step fare adjustment was scheduled to be implemented on August 1, 2013, while the 2nd step implementation shall be decided after the public consultation.41 Therefore, another public consultation was held on December 12, 2013.42

On December 18, 2013, the LRTA Board confirmed the LRT fare adjustment using the PHP 11.00 plus PHP 1.00/km formula, subject to consultation with the LTFRB.43 In a letter dated December 19, 2013, the LTFRB Chairman signified that the LTFRB had no objections to the fare adjustment.44

On December 18, 2014, public respondent DOTC Secretary Jose Emilio A. Abaya issued D.O. No. 2014-014.45 It was published in the Philippine Daily Inquirer on December 20, 2014 and became effective 15 days after, or on January 4, 2015.46 D.O. No. 2014-014 states that the imposition of the uniform base fare of PHP 11.00 plus PHP 1.00 per kilometer of distance traveled is in accordance with the LRTA's Board Resolution, as concurred in by the Land Transportation Franchising Regulatory Board (LTFRB) and recommended by the MRT-3 Office.

D.O. No. 2014-014 effectively increased the total fare per ride for all the three rail systems by 50% to 87%. Prior to its issuance, single-journey fares for the LRT-1, LRT-2, and the MRT-3 range from PHP 12.00 to PHP 20.00, PHP 12.00 to PHP 15.00, and PHP 10.00 to PHP 15.00, respectively. Under D.O. No. 2014-014, the new fare ranges are PHP 15.00 to PHP 30.00, PHP 15.00 to PHP 25.00, and PHP 13.00 to PHP 28.00.47 It is the first increase for the LRT-2 and the MRT-3 since formal operations began, and the most recent for the LRT-1 since 2003.

Following the issuance of D.O. No. 2014-014 are the consolidated Petitions filed before this Court assailing the constitutionality and legality of the fare increase mandated by the DOTC.

Petitioners are former and present members of the House of Representatives;48 labor groups and unions49 and/or their members and officers;50 as well as citizens, taxpayers, and regular commuters.51 They argue that they have the standing to question the validity of D.O. No. 2014-014 because the riding public in general "actually and specifically suffer direct and substantial injury" as a result of the implementation of the fare increase in the LRT and the MRT.52 Thus, they meet the requirement of the direct injury test, as they are directly affected by the "untimely, unreasonable, arbitrary, and capricious imposition of the fare hikes."53

Petitioners also argue that a direct invocation of this Court's jurisdiction is justified in the present case. They assert that the petitions fall under the exceptions to the principle of hierarchy of court since they raise issues affecting the public in general and the advancement of public interests.54 Thus, these are matters of transcendental importance that involve genuine constitutional issues which are for the Court to resolve.55

In the same vein, petitioners contend that the present case is an exception to the application of the doctrine of exhaustion of administrative remedies because D.O. No. 2014-014 is a patent nullity, the "implementation of which is detrimental to public interest." Moreover, there is no other plain, speedy, and adequate remedy to address the issues raised by petitioners.56

Petitioners also aver that certiorari and prohibition under Rule 65 of the Rules of Court are the proper vehicles to assail the constitutionality of D.O. No. 2014-014. They argue that public respondents, in issuing D.O. No. 2014-014, exceeded their authority as conferred by law and acted in violation of the prescribed procedure for the setting of public transportation fares.57 Further, the issuance of D.O. No. 2014-014 is quasi-judicial in nature, correctible through certiorari.58

On the merits, petitioners claim that the DOTC Secretary has no power to implement a fare increase for the LRT and the MRT. Under Executive Order No. 202 issued on June 19, 1987, the quasi-judicial powers and functions to adjudicate fare adjustments were transferred from the DOTC to the LTFRB.59 Moreover, the operation of the LRT and the MRT is subject to the same regulatory impositions applicable to public services under Commonwealth Act No. 146 (CA No. 146).60 Here, the DOTC did not comply with the requirements for fixing and determination of rates provided in Section 16(c) of CA No. 146.61 Neither does the LRTA have the power to approve fare increases for the light rail system in the absence of a delegation of legislative authority in its favor.62

Petitioners also posit that D.O. No. 2014-014 was issued without the required notice and hearing in violation of the due process clause and the right to full public disclosure under the Constitution. What transpired during the so-called public consultation on December 12, 2013 by the DOTC was merely a presentation of the new fare matrix of the LRT and the MRT, without meaningful public participation. Thus, petitioners' right to information on matters of public concern was similarly violated since the basis of the fare adjustment was not made public. More importantly, D.O. No. 2014-014 violates the state policy of protecting the rights of workers and promoting their welfare under Section 18, Article II of the Constitution. The fare increase will diminish the measly salary of the laborers earning minimum wage or below who represent majority of the ridership of the LRT and the MRT.63

Finally, petitioners argue that the fare increase is not necessary because the legislature already granted the DOTC an approved total agency budget of PHP 2.65 billion for 2015 and an additional supplemental budget amounting to PHP 1.207 billion for 2014, which included an allocation to supplement the ridership of the LRT and the MRT and to pay for the maintenance, repairs, and rehabilitation of both rail systems.64

Petitioners pray that D.O. No. 2014-014 be declared null and void and that respondents be enjoined from further implementing the fare increase provided thereunder.65

For their part, public respondents counter that petitioners have no standing to bring the present suit for failure to establish direct injury as a result of the issuance of D.O. No. 2014-014. The fare increase under D.O. No. 2014-014 only implements a reduction of government subsidy, the grant of which is not a legally demandable right. Petitioners-legislators similarly do not have the standing to file the present case since there is no allegation of usurpation of the powers of Congress. Finally, petitioners cannot invoke their status as taxpayers, since D.O. No. 2014-014 is neither a tax measure nor a form of disbursement of public funds.66

Anent the propriety of the present petitions, LRMC avers that the remedies of certiorari and prohibition are not proper modes to review and question the executive department's economic policy decisions, including which sectors of the society or activities of the government to subsidize. No one has a vested right to a government subsidy, and its grant or withdrawal is purely a discretionary prerogative of the executive and judicial departments.67

On substantive issues, respondents argue that it is the DOTC and the LRTA which have the authority to determine the fare rates of the MRT and the LRT, respectively. Contrary to petitioners' assertion, the determination of the fare rates of the LRT and the MRT is governed by E.O. No. 292, otherwise known as the Administrative Code of 1987, and the LRTA Charter, and not by CA No. 146.68

The LRTA adds that, not being a regulatory body with quasi-judicial function, its power is quasi-legislative in nature where notice and hearing is not a requirement of due process. Nevertheless, the LRTA complied with the requirement of public participation under Section 9, Chapter 2, Book VII of the Administrative Code of 1987 when it published the Notice of Public Consultation twice for the February 4 and 5, 2011 public consultations, and twice for the December 21, 2013 public consultation.69

Respondents insist that the fare adjustment under D.O. No. 2014-014 is merely a reduction of government subsidy. On this score, petitioners have no right to demand that the current levels of subsidy from the government for the LRT and the MRT be maintained. The adoption of the user-pays principle is also pursuant to the 2011 to 2016 Medium-Term Philippine Development Plan and was "envisioned to result in an equitable distribution of government funds currently dedicated to [subsidizing] the operations of the [LRT/MRT] rail lines in Metro Manila to much-needed development projects and relief operations in other parts of Luzon, the Visayas, and Mindanao."70 Thus, the decision to grant subsidies is a discretionary question and a non-ministerial prerogative of the executive and legislative department which cannot be enjoined or compelled.71 What petitioners dispute in the present case is the wisdom of extending or withholding government subsidies, a policy question over which the Court has no jurisdiction.72

In the Resolution73 dated August 23, 2022, this Court required the parties to move in the premises and update Us on the current situation regarding the rates in the LRT, and whether the fares were charged to commuters, within 30 days from notice.

In their Joint Manifestation and Compliance74 dated December 19, 2022 in G.R. Nos. 215653 and 215704, petitioners, through counsel, manifested that the LRMC petitioned for a fare increase in 2016, 2018, and 2022, which were all denied by the government. This prompted the LRMC to file an arbitration request with the International Chamber of Commerce on May 6, 2022 against the DOTC and the LRTA in a disclosure made by the Metro Pacific Investments Corporation which holds a stake in the LRMC. The LRMC claimed that as of March 31, 2022, the money claims for fare differentials and losses, costs, and expenses amounted to approximately PHP 2.67 billion. These are in addition to the long overdue fare adjustments which the LRMC asserts it is authorized to do every two years under its concession agreement. Petitioners emphasized that the fares for LRT-1, LRT-2, and MRT-3 have remained the same as it were in 2015.75

Meanwhile, the LRTA, in its Compliance76 dated December 19, 2022, also stated that the fares being implemented in LRT-1 and LRT-2 today are still based on the formula provided in D.O. No. 2014-014. The LRTA likewise confirmed the ongoing arbitration request filed by the LRMC against it and the DOTC before the International Chamber of Commerce.

First, whether the present case is justiciable. Subsumed under this issue are the following:

Second, whether D.O. No. 2014-014 is valid and constitutional. This involves the resolution of:

The Judiciary is a stronghold for the Rule of Law. Because it can view issues through the lens of objectivity and isolate itself from political tension and external influences,77 the Judiciary is a refuge that society can trust to dispense justice and carry out noble principles like due process and even equity, in appropriate circumstances. Consistent with the tripartite allocation of powers, the Judiciary will neither inquire into the wisdom of the law78 nor engage in socio-economic or political experimentations.79 The Judiciary is only concerned with what the law says, and when called upon to exercise judicial power, it will not hesitate to say what the law is.80 The extent of judicial power was best enunciated in Marbury v. Madison:81

It is emphatically the province and duty of the Judicial Department to say what the law is. Those who apply the rule to particular cases must, of necessity, expound and interpret that rule. If two laws conflict with each other, the Courts must decide on the operation of each.

So, if a law be in opposition to the Constitution, if both the law and the Constitution apply to a particular case, so that the Court must either decide that case conformably to the law, disregarding the Constitution, or conformably to the Constitution, disregarding the law, the Court must determine which of these conflicting rules governs the case. This is of the very essence of judicial duty.82

In a century of uncertainty, with the political climate being in a state of flux, the Court's exercise of judicial review is powerful enough to bring balance and restore equilibrium.83 It can rein in the unauthorized exercise of power by the legislative or executive branches of government.84

Section 1, Article VIII of the 1987 Constitution on the power of judicial review serves as the Court's guide to determine the propriety of seeking redress from the Court. Thus:

SECTION 1. The judicial power shall be vested in one Supreme Court and in such lower courts as may be established by law.

Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government.

From the foregoing flows the Court's power to not only settle actual controversies involving rights which are legally demandable and enforceable but also determine if any branch or instrumentality of the government has acted beyond the scope of its powers.85 The latter is known as the expanded scope of judicial power.

The driving force behind the evolution of a court's judicial power varies depending on jurisdiction. Here, the court's judicial power was ushered in by a deep, dark, and disturbing past-"the use and abuse of the political question doctrine during the martial law era under former President Ferdinand Marcos."86 The past may have been bleak, nonetheless, this Court's expanded scope of judicial power shaped the landscape of the Philippine judiciary and ensured "the potency of the power of judicial review to curb grave abuse of discretion by any branch or instrumentality of the government."87 Indeed, the parties must not think the judiciary is too weak, as to put the other branches of government beyond its reach, or too strong, as to engage in judicial legislation. As a guardian of the law and the Constitution, it is the judiciary's duty to ease any tension in the separation of powers and harmonize the tripartite allocation thereof.

To address grave abuse of discretion by any government branch or instrumentality, parties can invoke Sections 1 and/or 2, Rule 65 of the Rules of Court, which provides:

Textually, Sections 1 and 2 above refer only to the acts or proceedings of a tribunal, board, or officer exercising judicial, quasi-judicial, or ministerial functions. It is well-settled, however, that an administrative agency may exercise either quasi-judicial or quasi-legislative powers, or a mixture of both.88 Thus, parties are often confounded about the proper remedy to assail the validity or constitutionality of a rule or regulation issued by an administrative agency in the performance of its quasi-legislative functions. Certainly, the capacity in which the administrative agency exercises its power affects a party's appropriate remedy to assail its acts or proceedings.89

In the present case, the DOTC, being an administrative agency,90 issued D.O. No. 2014-014 pursuant to its quasi-legislative powers. In arguing that certiorari is the appropriate remedy to question the validity of D.O. No. 2014-014, petitioners assert that the DOTC Secretary usurped a quasi-judicial function.91 They allege that in issuing D.O. No. 2014-014, the DOTC had to determine facts and circumstances to establish a just and reasonable ground to allow the fare increase.92 Private respondent LRMC, on the other hand, contests the propriety of prohibition and certiorari as remedies to challenge the validity of D.O. No. 2014-014.93 According to it, certiorari and prohibition are not available as a means to review and question the executive department's economic or governance policy decisions as to what sectors or activities merit government support through subsidies, which are exclusively executive and legislative prerogative decisions.94

In Confederation for Unity, Recognition and Advancement of Government Employees v. Abad,95 this Court differentiated between quasi-judicial and quasi-legislative functions:

Quasi-judicial or adjudicatory functions refer to "the power to hear and determine questions of fact to which the legislative policy is to apply and to decide in accordance with the standards laid down by the law itself in enforcing and administering the same law." Quasi-legislative or rule-making functions refer to "the power to make rules and regulations which results in delegated legislation that is within the confines of the granting statute and the doctrine of non-delegability and separability of powers."96

Here, public respondent DOTC Secretary Abaya was exercising rule-making functions when he issued D.O. No. 2014-014. Section 3(15), Chapter 1, Title XV, Book IV of the Administrative Code of 1987 authorizes the DOTC to determine, fix, or prescribe charges or rates pertinent to the operation of land transportation utility facilities and services. The power to fix rates is also a result of delegated legislation. As early as 1991, this Court, citing the Shreveport Rate Cases,97 had already characterized rate-fixing as an act of Congress, which may exercise the power to delegate.98

Ordinarily, regular courts have the jurisdiction to pass upon the validity or constitutionality of a rule or regulation issued by an administrative agency in the performance of its quasi-legislative function.99 For instance, this Court, in Smart Communications, Inc. v. National Telecommunications Commission100 ruled that since the National Telecommunications Commission (NTC) issued Memorandum Circular No. 13-6-2000 and the Memorandum dated October 6, 2000 in the exercise of its quasi-legislative or rule-making power, petitioners therein correctly lodged an action for declaration of nullity in the Regional Trial Court (RTC). Certiorari petitions also often get confused with ones for declaratory relief. In the dissent of our esteemed colleague, Senior Associate Justice Marvic M.V.F. Leonen, in Association of Medical Clinics for Overseas Workers, Inc. (AMCOW) v. GCC Approved Medical Centers Association, Inc.,101 he noted that the confusion with certiorari may have been caused by actions that were acted upon by the court as certiorari petitions but should have really been considered as ones for declaratory relief.102

Assimilating the thrust of our jurisprudence103 on the matter so far, what is clear is that whether the action of the administrative agency is in the exercise of its quasi-judicial or quasi-legislative power, the Court has taken the invocation of Sections 1 and/or 2 of Rule 65 to include the expanded scope of judicial power.104 This means they are "appropriate remedies to raise constitutional issues and to review and/or prohibit or nullify, when proper, acts of legislative and executive officials."105 As long as petitioner can prima facie106 show that the governmental branch or instrumentality has gravely abused its discretion amounting to lack or excess of jurisdiction, and has overstepped the delimitations of its powers, the courts may "set right, undo, or restrain"107 such act by way of certiorari and prohibition.108

Direct invocation of the Court's jurisdiction and the doctrine of hierarchy of courts

That being said, the foregoing discussion does not excuse petitioners from complying with the doctrine of hierarchy of courts. This Court's, the Court of Appeals' (CA), and the RTC's concurrent jurisdiction to issue writs of certiorari, prohibition, and similar writs does not give petitioners an unbridled discretion to choose any forum.109 In Private Hospitals Association of the Philippines, Inc. v. Medialdea, 110 this Court explained the doctrine in greater detail:

To warrant a direct invocation of this Court's original jurisdiction to issue these writs, petitioners must cite special and important reasons therefor, like when the issues involved are of transcendental importance, the time element or exigency in certain situations, or the petition includes questions that are dictated by public welfare or demanded by the broader interest of justice.112 As will be discussed momentarily, this Court finds that all these cited exceptions prevail so as to justify the exercise of the Court's original jurisdiction.

Going back to the propriety of a Rule 65 petition, this Court's pronouncement in Francisco, Jr., et al. v. Toll Regulatory Board, et al.113 is instructive. There, this Court considered the petitions for certiorari and prohibition as appropriate, considering that petitioners ascribed grave abuse of discretion against the Toll Regulatory Board (TRB) for entering into contracts or agreements without the required public bidding mandated by law, among others. The Court explained:

Petitions for certiorari and prohibition are, as here, appropriate remedies to raise constitutional issues and to review and/or prohibit or nullify, when proper, acts of legislative and executive officials. The present petitions allege that then President Ramos had exercised vis-à-vis an assignment of franchise, a function legislative in character. As alleged, too, the TRB, in the guise of entering into contracts or agreements with PNCC and other juridical entities, virtually enlarged, modified to the core and/or extended the statutory franchise of PNCC, thereby usurping a legislative prerogative. The usurpation came in the form of executing the assailed STOAs and the issuance of TOCs. Grave abuse of discretion is also laid on the doorstep of the TRB for its act of entering into these same contracts or agreements without the required public bidding mandated by law, specifically the BOT Law (R.A. 6957, as amended) and the Government Procurement Reform Act (R.A. 9184).

In fine, the certiorari petitions impute on then President Ramos and the TRB, the commission of acts that translate inter alia into usurpation of the congressional authority to grant franchises and violation of extant statutes. The petitions make a prima facie case for certiorari and prohibition; an actual case or controversy ripe for judicial review exists. Verily, when an act of a branch of government is seriously alleged to have infringed the Constitution, it becomes not only the right but in fact the duty of the judiciary to settle the dispute. In doing so, the judiciary merely defends the sanctity of its duties and powers under the Constitution.114 (Citations omitted)

As in this case, petitioners likewise ascribe grave abuse of discretion against: (1) public respondent DOTC Secretary Abaya for issuing D.O. No. 2014-014 when he had no jurisdiction to decide on the issue of rate hikes;115 and (2) the LRTA, for having no authority to approve fare rate increases for the LRT system.116 According to petitioners, D.O. No. 2014-014 was issued with grave abuse of discretion for violating the due process requirements of notice and hearing117 and for being unreasonable.118 They argue that the fare hike as a policy choice is in grave abuse of discretion.119 Additionally, they seek that public respondents be enjoined from implementing D.O. No. 2014-014. Thus, this Court finds the petitions for certiorari and prohibition as appropriate remedies. Nonetheless, petitioners must still comply with the requisites for judicial review.

Although "[i]t is emphatically the province and duty of the judicial department to say what the law is,"120 the power of judicial review does not exist in a vacuum. Questions involving the constitutionality or validity of a law or governmental act may only be heard and decided by this Court provided that the requirements for judicial inquiry are complied with,121 which are: "(a) there must be an actual case or controversy calling for the exercise of judicial power; (b) the person challenging the act must have the standing to question the validity of the subject act or issuance; (c) the question of constitutionality must be raised at the earliest opportunity; and (d) the issue of constitutionality must be the very lis mota of the case."122 The power of judicial review is limited by these four exacting requisites.123

Preliminarily, this Court deems it proper to address respondents' assertion that this Court has no jurisdiction over the consolidated Petitions on the ground that the issues raised involve a question of wisdom and policy.

Public respondents DOTC Secretary Abaya and Renato Z. San Jose, the Officer-in-Charge of the MRT-3 Office, posit that the fare adjustment was a policy change.124 They maintain that there is no right to demand a government subsidy because questions of whom to subsidize and which socio-economic objectives to advance are policy choices determined by the political departments.125 That benefits were previously enjoyed by certain sectors in the country is not a ground to judicially compel the government to adhere to the same policy.126 Since the fare adjustment under D.O. No. 2014-014 is operationally equivalent to a reduction of government subsidy, the policy cannot be judicially constrained.127

Private respondents LRMC and MRTC second public respondents' contentions by interposing that what D.O. No. 2014-014 does is merely to announce, for the guidance of the rail systems' riders and the general public, that the DOTC, and therefore, the executive department, will propose a budget for the next fiscal year that will reduce the rail systems' subsidies.128 Since D.O. No. 2014-014 simply announces a reduction of government subsidies, rather than a mere upward adjustment of fares for the rail systems, then its issuance is not governed by the jurisdictional and procedural requirements for fare hike applications but by the rules for the grant, maintenance, reduction, or withdrawal of government subsidies.129 Resultantly, there is no prior notice and hearing required for the Executive Department to be able to make that decision and announcement.130

According to private respondents, because the decision to grant subsidies is a discretionary question or a non-ministerial prerogative as to what economic philosophy/policy and program of government an elected administration thinks best to adopt, petitioners can cite no duty on the part of, and so no clear right to enjoin or compel, the Executive and the Legislative Departments to continue providing fare subsidies of whatever amount to the rail system's riders. This means that petitioners may also not enjoin the DOTC from announcing or implementing any Executive decision not to propose, and not to ask the Legislature to approve, a budget earmarking funds to maintain previous subsidies for that class of commuters at their former, or at any other, levels.131 Petitioners' views are competing economic and governance philosophies regarding the wisdom of extending or withholding government subsidies to or from certain beneficiaries under certain circumstances.132 In short, they are economic policy arguments meant for the electorate or halls of Congress.133

Questions of policy or wisdom, oftentimes referred to as political questions, were defined in the early case of Tañada, et al. v. Cuenca, et al.134 as:

[T]hose questions which, under the Constitution, are to be decided by the people in their sovereign capacity, or in regard to which full discretionary authority has been delegated to the Legislature or executive branch of the Government. It is concerned with issues dependent upon the wisdom, not legality, of a particular measure.135 (Emphasis in the original).

As a general assertion, the political question doctrine prohibits the courts from interfering with the workings of a co-equal branch of government.136 It is predicated on the principle of separation of powers, such that this Court cannot substitute its judgment and decide a matter which by its nature or by law, is exclusively lodged on the concerned executive or legislative official.137 It rests on prudential considerations138 and serves to preserve the complementary nature of the political and judicial branches to the end of upholding the rights of the general public at all times.139

However, the invocation of the political question doctrine does not automatically prevent this Court from inquiring into and very narrowly and specifically crossing the exclusive domain of the two other branches of government when called upon to exercise power of judicial review. In Francisco, Jr. v. The House of Representative,140 We emphasized that the expanded scope of judicial power under Section 1, Article VIII of the 1987 Constitution covers questions that are "not truly political in nature," reviewable by the courts if only to the extent of determining whether the political branch acted within the constitutional limits of its powers, thus:

Indeed, the 1987 Constitution greatly limited the applicability of the political question doctrine when it expanded the court's power of judicial review to include the determination of whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the government. As it is, the political question doctrine is "no longer [an] insurmountable obstacle of judicial power" which protects executive and legislative actions from judicial review.142 Thus, while this Court cannot substitute its judgment for that of the executive or legislative branches, it may look into the question whether the exercise of their power has been made in grave abuse of discretion.143

It is accurate to point out that the grant or withdrawal of subsidy to government projects involves a question of policy or wisdom. The grant of subsidy and/or budget to various government activities and programs goes through the national budgeting process, a function that is shared exclusively between the executive and legislative department. Thus, the Executive Branch determines the government budgetary priorities and activities in line with available revenues and borrowing limits. The Congress, in turn, deliberates and acts on the budget proposals of the President.144 Once the Congress approves the national budget and legislates the General Appropriations Act, the executive department "exercises all roles and prerogatives" in the implementation and enforcement thereof, unless otherwise provided by the Constitution.145 In this regard, this Court, in Araullo, et al. v. Pres. Aquino, et al.,146 recognized that the President, "in keeping with [his/her] duty to faithfully execute laws," has "sufficient discretion during the execution of the budget to adapt the budget to changes in the country's economic situation."147

Evidently, the decision on whether to grant, withdraw, or reduce government subsidy is a question of economic policy cognizable only by the executive and legislative departments. It involves an evaluation of various socio-economic factors and an examination of factual considerations matters which are simply beyond the competence of this Court.

In the present case, while D.O. No. 2014-014 has for its purpose the reduction of government subsidy, the determination of the actual rates thereunder involved rate-fixing principles. Indeed, the objective was for the rates to be updated and sustainable enough to cover a huge portion of the operating costs of the system, to the end that government subsidy of the individual fares will be considerably lessened. Respondents themselves mentioned that some of the key decision points for the fare adjustment under D.O. No. 2014-014 were: (1) non-alignment of the LRT and MRT fares with those of road-based public utility vehicles;148 and (2) improvement of facilities and continuous provision of better services with the LRTA's investment on rehabilitation and upgrading of the system.149

In other words, the fare adjustment under D.O. No. 2014-014 was not simply an outright result of a decrease in government subsidy. On the contrary, the rates thereunder were arrived at after consideration and balancing of economic factors and interests. It was, to be sure, an exercise of the DOTC's and the LRTA's rate-fixing power which called "for a technical examination and a specialized review of specific details primarily entrusted to the administrative or regulating authority."150 As it involved rate-fixing, the issuance of D.O. No. 2014-014 necessarily warranted compliance with the requirements provided by the law.

Verily, the present case does not involve purely questions of policy or wisdom. What is involved here is the administrative agencies' rate-fixing power, the exercise of which is circumscribed by specific requirements of law. In other words, the question is whether or not there has been grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the government, over which this Court undoubtedly has jurisdiction.

More significantly, petitioners raise a grave violation of the Constitution and domestic laws as a result of the fare increase for the LRT and the MRT. The issue, therefore, is "judicial rather than political."151 Indeed, when a case is brought before this Court with serious allegations that a law or executive issuance infringes upon the Constitution, "it becomes not only the right but in fact the duty of the [Court] to settle the dispute."152

In Belgica, et al. v. Hon. Sec. Ochoa, et al.,153 the Court elucidated on the requirement of an actual case or controversy, in connection with ripeness, thus:

... Jurisprudence provides that an actual case or controversy is one which "involves a conflict of legal rights, an assertion of opposite legal claims, susceptible of judicial resolution as distinguished from a hypothetical or abstract difference or dispute." In other words, "[t]here must be a contrariety of legal rights that can be interpreted and enforced on the basis of existing law and jurisprudence." Related to the requirement of an actual case or controversy is the requirement of "ripeness," meaning that the questions raised for constitutional scrutiny are already ripe for adjudication. "A question is ripe for adjudication when the act being challenged has had a direct adverse effect on the individual challenging it. It is a prerequisite that something had then been accomplished or performed by either branch before a court may come into the picture, and the petitioner must allege the existence of an immediate or threatened injury to itself as a result of the challenged action." "Withal, courts will decline to pass upon constitutional issues through advisory opinions, bereft as they are of authority to resolve hypothetical or moot questions."154 (Emphasis supplied; Citations omitted)

There is an actual case or controversy in the present case. The parties do not dispute that D.O. No. 2014-014 has already been implemented as of January 4, 2015. Petitioners' insistence on the nullity of D.O. No. 2014-014 and respondents' assertion of its validity, together with the grounds in support of their respective arguments, portray their conflicting legal rights. Petitioners, on the one hand, claim that the fare increase brought about by D.O. No. 2014-014 violated their right to due process for having been issued without notice and hearing.155 They also posit that public respondents DOTC and LRTA acted with grave abuse of discretion by acting beyond the scope of their jurisdiction. Respondents, on the other hand, argue that the implementation of the fare adjustment scheme did not require notice and hearing156 and that petitioners do not have any right to demand a government subsidy.157

These polarizing views on the alleged nullity of D.O. No. 2014-014 can be interpreted and enforced based on existing law and jurisprudence and, therefore, make it a case susceptible of judicial resolution. In fact, D.O. No. 2014-014 has been in force and effect for almost eight (8) years now. This also makes it ripe for adjudication, as the injury is neither merely immediate nor threatened; it is currently being endured.

As mentioned above, closely related to the requirement of an actual case or controversy is the element of ripeness, that is, whether the constitutional questions raised before the court are ripe for adjudication. A case that is ripe for adjudication presupposes that "something had by then been accomplished or performed by either branch [of government],"158 at which point the Court may step in and determine the validity of the assailed act. The element of ripeness, "as an aspect of the timing of a case or controversy," is essential whether the petition for certiorari assailing a government act was filed under Rule 65 of the Rules of Court or pursuant to the expanded jurisdiction of this Court under the Constitution.159

In dealing with ripeness, this Court has consistently inquired into whether the "act being challenged has had a direct adverse effect on the individual challenging it."160 In Atty. Lozano, et al. v. Speaker Nograles,161 this Court also said that whether a case is ripe for adjudication is determined by an evaluation of two aspects: "first, the fitness of the issues for judicial decision; and second, the hardship to the parties entailed by withholding court consideration."162

With respect particularly to the acts of administrative agencies, this Court, in Kilusang Mayo Uno, et al. v. Hon. Aquino, et al.,163 said that "ripeness is ensured under the doctrine of exhaustion of administrative remedies."164 The doctrine precludes the court from taking cognizance of a case unless all remedies within the administrative machinery have been exhausted by the petitioner. It allows administrative officers "every opportunity to decide a matter that comes within [their] jurisdiction."165 Indeed, failure to exhaust administrative remedies available is fatal to a party's cause of action and absent a finding of waiver or estoppel, renders the case dismissible for lack of cause of action.166 In Association of Medical Clinics for Overseas Workers, Inc. (AMCOW) v. GCC Approved Medical Centers Association, Inc.,167 this Court ruled that the doctrine finds application in a petition for certiorari questioning the act of an administrative agency, without distinction on whether the act is quasi-judicial, quasi-legislative, or purely regulatory in nature.168

Admittedly, petitioners in the present case failed to establish that they availed of any administrative remedy before seeking relief from this Court. The records do not show that petitioners previously asked for reconsideration from the DOTC, the LRTA, or the Office of the President regarding the issuance of D.O. No. 2014-014. Nevertheless, the doctrine of exhaustion of administrative remedies, grounded on sound public policy and practical considerations, is not an inflexible rule.169 In Spouses Chua v. Hon. Ang, et al.,170 the Court held that prior exhaustion of administrative remedies may be dispensed with:

(a) when there is a violation of due process; (b) when the issue involved is purely a legal question; (c) when the administrative action is patently illegal amounting to lack or excess of jurisdiction; (d) when there is estoppel on the part of the administrative agency concerned; (e) when there is irreparable injury; (f) when the respondent is a department secretary whose acts as an alter ego of the President bear the implied and assumed approval of the latter; (g) when to require exhaustion of administrative remedies would be unreasonable; (h) when it would amount to a nullification of a claim; (i) when the subject matter is a private land in land case proceedings; (j) when the rule does not provide a plain, speedy and adequate remedy; or (k) when there are circumstances indicating the urgency of judicial intervention.171 (Emphasis supplied)

This Court finds the presence of three (3) compelling reasons why petitioners' non-exhaustion of administrative remedies and direct resort to this Court are justified in the present case.

First, the question raised by petitioners, i.e., the validity and constitutionality of the fare increase under D.O. No. 2014-014, is purely legal since "it does not involve an examination of the probative value of the evidence presented by the parties" and "does not require technical knowledge and experience but one that would involve the interpretation and application of law."172 Indeed, the issues surrounding the issuance of D.O. No. 2014-014 may be resolved by this Court based on prevailing law and jurisprudence.

Second, D.O. No. 2014-014 was issued by public respondent DOTC Secretary Abaya, whose acts as an alter ego bear the implied and assumed approval of the president. In any event, former President Aquino III himself, during his SONA on July 22, 2013, announced the need to increase the LRT and MRT fares in order to decrease government subsidy and allocate more budget for other social services.

Third, the records disclose that the first petition, docketed as G.R. No. 215650, was filed on January 5, 2015. Considering that this case has been pending for more than seven (7) years, the interests of justice dictate that it be resolved now, lest further harm and injury be inflicted on petitioners who claim to be directly affected by the fare increase under D.O. No. 2014-014. The public interest involved in the issues raised justifies a departure from the established rule and calls for a speedy resolution of the case that will ultimately need to be resolved by this Court.

If the constitutional question or assailed illegal act is not brought by a party who has locus standi, or the standing to challenge it, then the Court may still refuse to exercise judicial review.173 The definition of locus standi is straightforward. It is simply a "right of appearance in a court of justice on a given question."174 In public suits, however, the determination of locus standi becomes more difficult.175 The plaintiff, who is a representative of the public, may be a citizen or a taxpayer, in which case, he or she must show entitlement to seek judicial protection.176

In recent times, the judicial landscape has allowed both citizen and taxpayer standing in public suits, but against such suits the aggrieved plaintiff must show a direct injury.177 This Court enumerated:

To have standing, one must establish that he has a "personal and substantial interest in the case such that he has sustained, or will sustain, direct injury as a result of its enforcement." Particularly, he must show that (1) he has suffered some actual or threatened injury as a result of the allegedly illegal conduct of the government; (2) the injury is fairly traceable to the challenged action; and (3) the injury is likely to be redressed by a favorable action.178 (Citations omitted)

The petitioners come before this Court as concerned citizens, taxpayers, various organizations of workers, students, and the youth, labor groups and unions, regular commuters, or members of the commuting public, and either former or present members of the House of Representatives. Regarding taxpayers, public respondent DOTC Secretary Abaya argues that petitioners cannot sue as such because DO No. 2014-014 is neither a tax measure nor a form of disbursement of public funds.179 Respondent LRMC, on the other hand, contends that petitioners as taxpayers do not challenge the unlawful use of public funds but seek to compel the use of public funds to benefit their own limited class.180 As for the members of the House of Representatives, public respondent DOTC Secretary Abaya also posits that they do not have standing as legislators because they did not allege that there was a usurpation of the powers of Congress as a body to which they belong as members.181 Finally, most of respondents are in accord that DO No. 2014-014 merely implements a reduction of government subsidy, although resulting in the adjustment of fares.182

True, DO No. 2014-014 may neither be a tax measure nor a form of disbursement of public funds. Taxpayer suits, however, are broad enough to include claims "that public funds are illegally disbursed or that public money is being deflected to any improper purpose, or that public funds are wasted through the enforcement of an invalid or unconstitutional law."183 Respondents do not deny, in fact they passionately profess, that DO No. 2014-014 is a reduction of government subsidy. The 2nd paragraph of DO No. 2014- 014 states:

It is envisioned that this fare scheme will result in an equitable distribution of government funds currently dedicated to subsidizing the operations of the above rail lines in Metro Manila to much-needed development projects and relief operations in other parts of Luzon, the Visayas and Mindanao. (Emphasis and italics supplied)

That these government funds are being re-directed to unknown development projects and relief operations in other parts of the country is enough to bring a taxpayer's suit, considering that public money is under threat of being deflected to an improper purpose. These subsidies are still government funds emanating from the National Treasury, the coffers of which petitioners as taxpayers religiously contribute to.

Then again, "the rule on standing is a matter of procedural technicality, which may be relaxed when the subject in issue or the legal question to be resolved is of transcendental importance to the public."184 In Francisco, Jr., et al. v. Toll Regulatory Board, et al.,185 this Court acknowledged that the other petitioners, as taxpayers and/or mere users of the tollways or representatives of such users, would ordinarily not be clothed with the requisite standing, nevertheless, it relaxed the rule on locus standi "owing to the transcendental importance and the paramount public interest in the implementation of the laws on the Luzon tollways, a roadway complex used daily by hundreds of thousands of motorists."186

Similarly, the issue in the present case, involving as it does the LRT and the MRT, is of transcendental importance. True, "transcendental importance" is not a magic wand that can be waived to prompt the Court to act liberally and imbue petitioners with standing where they possess none, but the paramount public interest in the implementation of the laws on the rail transit systems cannot be denied. The preamble of E.O. No 603, the law creating the LRTA, has itself recognized:

In declaring that the LRTA is a government instrumentality exercising corporate powers and therefore, exempt from real property tax, this Court in Light Rail Transit Authority v. Quezon City187 declared that the light rail transit undoubtedly performs a crucial role in the lives of the people in Metro Manila:

Prof David v. Pres. Macapagal-Arroyo189 reminded the bench, the bar, and the public that "the question of locus standi is but corollary to the bigger question of proper exercise of judicial power. This is the underlying legal tenet of the 'liberality doctrine' on legal standing."190 Given the notability of the rail transit systems' role in providing mass transportation to millions of Filipinos in the metro, this Court will shirk its avowed duty to render justice through the law if it were to pass upon an issue as vital as the one involved here. In the interest of judicial economy,191 this Court will not evade its Constitutional responsibility to settle, once and for all, the issue of the alleged invalidity of these transit systems' fare increases.

Petitioners BAYAN et al. argue that public respondent DOTC Secretary Abaya issued D.O. No. 2014-014 without jurisdiction.192 As such, it is void and without legal effect.193 They cite 5 reasons why: first, the DOTC is the contracting party of the MRTC in the Build-Lease-Transfer Agreement;194 second, the DOTC agreed to recommendations made by an amorphous office, designated as MRT-3 Office;195 third, the DOTC Secretary is the President's alter ego who clings to the latter's penchant for disregarding Congress' duly appropriated item for the light railway transit subsidies; fourth, there are reports that "the DOTC people" have ties to the private investors, at least, for the LRT-1 and LRT-2 projects;196 and fifth, public respondents have eliminated themselves from being possible avenues for relief.197 Petitioners BAYAN et al., however, have not substantiated these arguments. Consequently, they fade in the face of the DOTC's clear authority to implement a fair increase over the railway transit systems. Against petitioners BAYAN et al.'s speculative arguments are the DOTC's rate-fixing power, galvanized not only in law but also in jurisprudence.

As early as Ynchausti Steamship Co. v. Public Utility Commissioner,198 this Court has characterized rate-fixing as "a legislative and governmental power over which the Government has complete control."199 Indeed, ratefixing is "essentially a legislative power."200 In Philippine Interisland Shipping Association of the Philippines v. Court of Appeals,201 this Court recalled how in the 1920s, there was once a great battle over the validity of the exercise of the rate-fixing power by administrative agencies-an issue of undue delegation arose because the power delegated was legislative.202 But three factors catapulted the creation of administrative agencies and the delegation to them of legislative power-the growing complexity of modern society, the multiplication of the subjects of government regulations, and the increased difficulty of administering the laws.203

Philippine lnterisland recognized that as then President Marcos could delegate the rate-making power to the Philippine Ports Authority (PPA), having been granted legislative power under Amendment No. 6 of the 1973 Constitution, he could also exercise it in certain instances. In other words, since the power is legislative in nature, then President Marcos had the authority to fix rates for as long as he wielded legislative power. The president's exercise of the power, however, did not imply a withdrawal of the same power vested in the PPA to impose, fix, and prescribe rates through subordinate legislation.

Subordinate legislation is "the rule-making power of agencies tasked with the administration of government."204 In Quezon City PTCA Federation, Inc. v. Department of Education,205 this Court explained that subordinate legislation is borne out of"the exigencies that contemporary governance must address:"206

The exercise of subordinate legislation must always be circumscribed by the completeness test and the sufficient standard test.208 For a valid delegation of legislative power, the legislature must have: (1) set forth the policy to be executed, carried out, or implemented by the delegate; and (2) prescribed sufficient guidelines or limitations in the law to map out the boundaries of the delegate's authority.209 Thus, when an administrative agency establishes a rate, "its act must both be non-confiscatory and must have been established in the manner prescribed by the legislature; otherwise, in the absence of a fixed standard, the delegation of power becomes unconstitutional."210

Petitioners Bayan Muna et al. contend that the DOTC has no authority to regulate fare schedules of the light railway systems in the absence of a statute or law that confers it the power to decide on rate increases.211

The Administrative Code of 1987 sets forth the DOTC's mandate and declared policy:

SECTION 1. Declaration of Policy. - The State is committed to the maintenance and expansion of viable, efficient, fast, safe and dependable transportation and communications systems as effective instruments for national recovery and economic progress. It shall not compete as a matter of policy with private enterprise and shall operate transportation and communications facilities only in those areas where private initiatives are inadequate or non-existent.

SECTION 2. Mandate.-The Department of Transportation and Communications shall be the primary policy, planning, programming, coordinating, implementing, regulating and administrative entity of the Executive Branch of the government in the promotion, development and regulation of dependable and coordinated networks of transportation and communications systems as well as in the fast, safe, efficient and reliable postal, transportation and communications services.212 (Emphasis supplied)

To pursue such mandate, Section 3 (15), Chapter 1, Title XV, Book IV vested in the Department the power, among others, to:

Further, the Administrative Code of 1987 has vested in the secretaries of each department the authority and responsibility for the exercise of the mandate of the department and for the discharge of its powers and functions.213 The department secretary shall have supervision and control over the department.214

Concomitantly, the same Code has granted the department secretaries the express power to:

Considering all the foregoing provisions, the then DOTC, in the exercise of its rate-fixing and rule-making power, is limited by the DOTC's declared policy and mandate - viability, efficiency, speed, safety, dependability, and reliability. In other words, the legislature validly delegated its rate-fixing power to the DOTC, such power having been appropriately circumscribed by complete policies and sufficient guidelines. Anyhow, this Court has ruled that when it comes to rate-fixing, "the only standard which the legislature is required to prescribe for the guidance of the administrative authority is that the rate be reasonable and just."216 In the absence of an express requirement as to reasonableness, the standard is considered implied.217

Clearly, public respondent DOTC Secretary Abaya merely exercised such rate-fixing and rule-making authority through subordinate regulation by promulgating D.O. No. 2014-014, or "Light Right Transit (LRT) Lines 1 & 2 and Metro Rail Transit (MRT) Line 3 Fare Adjustment."

The then DOTC's power to determine, fix, or prescribe charges or rates undoubtedly extends to the MRT-3, LRT-1, and LRT-2. Without a doubt, these railway transit systems fall within the purview of "public land transportation utility facilities and services" over which the DOTC can exercise its rate-fixing power pursuant to Section 3(15), Chapter 1, Title XV, Book IV of the Administrative Code of 1987. Yet, with respect to the LRT, the power of the DOTC is limited by the LRTA's authority to prescribe its fares under its own charter.

To recall, E.O. No. 603 dated July 12, 1980 created the LRTA as the agency "primarily responsible for the construction, operation, maintenance, and/or lease of light rail systems in the Philippines."218 Upon the issuance of the Administrative Code of 1987, the LRTA was designated as an attached agency of the then DOTC.219 As an attached agency, the LRTA was mandated to continue to operate and function in accordance with its charter, E.O. No. 603, except insofar as it conflicts with the provisions of the Code.220

Under Article 2, Section 4 of E.O. No. 603, the general powers of the LRTA, which shall be exercised by its Board of Directors, are:

Clearly, E.O. No. 603 vests the LRTA with the authority to determine the fares for the light rail system, subject only to consultation with the defunct Board of Transportation, the functions and powers of which are now exercised by the LTFRB. In the present case, the LRTA exercised this power when its Board of Directors issued a Resolution providing for the increase of fares for LRT-1 and LRT-2 under D.O. No. 2014-014, duly concurred in by the LTFRB.

Petitioners Bayan Muna et al. argue that in any case, the LRTA cannot implement fare increases for the light rail system without government regulation. They insist that the power of the LRTA to determine fares under Section 4(13) of E.O. No. 603 should be read in connection with the purpose of the LRTA as a government owned and controlled corporation (GOCC), which is primarily proprietary in nature. Thus, while the LRTA is authorized to determine fares, this may be implemented only upon the approval of a regulatory agency. Otherwise, it would be contrary to public policy and detrimental to public interest if the LRTA is allowed to unilaterally increase its fares.221

In Light Rail Transit Authority v. Quezon City,222 this Court already ruled that the LRTA cannot be classified as a GOCC because it was not organized as a stock or non-stock corporation. The LRTA is actually a government instrumentality vested with corporate powers because first, it performs functions which are "less commercial than governmental, and more for public use and public welfare than for profit-oriented service," and second, "it enjoys operational autonomy, as it exists by virtue of its Charter, and its powers and functions are vested in and exercised by its Board of Directors."223

More importantly, in the same case, this Court had the opportunity to revisit its earlier ruling in Light Rail Transit Authority v. Central Board of Assessment Appeals (LRTA-CBAA Case),224 where the LRTA was found to be "engaged in a service-oriented commercial endeavor," and was therefore liable for payment of real property tax for its patrimonial properties, particularly its carriageways and terminal stations.225 We said that the ruling in the LRTA-CBAA Case must now be understood in light of the developments brought about by this Court's decision in Manila International Airport Authority (MIAA) v. Court of Appeals,226 promulgated on July 20, 2006. In finding anew that the LRTA is "not engaged in a profit-earning business like a private corporation," this Court said in Light Rail Transit Authority v. Quezon City:227

Thus, it is now settled that the LRTA is a service entity created for a public purpose, that is, to ensure the reliability and quality of the light rail systems in the country for the benefit of the riding public and motorists around the metro. The LRTA's power to impose the fares for the use of the light rail systems is not pursuant to a commercial or profit-making venture, but is actually incidental and necessary to achieve the public purpose for which it was created. Contrary to petitioners' insistence, therefore, the LRTA's implementation of a fare increase for the light rail systems need not be approved by a separate regulatory agency to be valid. Its power in this regard is complete in itself and is conferred by no less than its charter, E.O. No. 603. On this score, it is necessary to stress that the rate-fixing power of the LRTA, similar to the DOTC's, is in the nature of subordinate legislation.

E.O. No. 603 was issued by President Marcos pursuant to Presidential Decree No. 1416 (P.D. No. 1416),229 which granted the president the continuing authority to reorganize the national government. P.D. No. 1416, to recall, was promulgated on June 9, 1978 in the exercise of President Marcos' legislative powers under Section 3(2) of Article XVII of the 1973 Constitution,230 and consequently, had the force and effect of law at the time.231 The preamble of P.D. No. 1416 states:

Specifically, P.D. No. 1416 allowed the President, at his discretion, to "[a]bolish departments, offices, agencies or functions which may not be necessary, or create those which are necessary, for the efficient conduct of government functions, services and activities,"232 among others. In Larin v. Executive Secretary,233 this Court recognized P.D. No. 1416, later expanded by P.D. No. 1772,234 as a valid source of the president's "power to group, consolidate bureaus and agencies, to abolish offices, to transfer functions, to create and classify functions, services and activities and to standardize salaries and materials" in the national government.235

Thus, it is clear that there is a valid delegation of legislative power to the LRTA to fix the rates for the LRT-1 and the LRT-2. This power is circumscribed by a standard that is found in the policy underlying the grant to the President of the authority to reorganize the national government-to effect economy and promote efficiency in the government, as well as in the conduct of its functions, services and activities. To be sure, as early as the case of Cervantes v. Auditor General,236 this Court already considered the promotion of "simplicity, economy, and efficiency" in operations as sufficient standard for the delegation of legislative power to the president to create the defunct Government Enterprises Council in order to effect reforms and changes in government owned and controlled corporations.237

All told, the authority of the DOTC and the LRTA to impose and regulate the fares for the MRT and the LRT, respectively, is beyond cavil. In fact, this Court has ruled that the grant of rate-fixing powers to administrative agencies is "now commonplace."238 In holding that the TRB, LTFRB, National Telecommunications Commission, and Energy Regulatory Commission (ERC) all exercise similar delegated rate-fixing powers, this Court in Francisco, Jr., et al. v. Toll Regulatory Board, et al.239 recognized the crucial role played by administrative bodies vested with more expertise and specialized knowledge and even acknowledged their position in the bureaucracy as the "fourth department of the government."240

The LTFRB does not have the authority to implement and/or adjudicate fare increases for the rail transit system

The rate-fixing authority of the DOTC and the LRTA having been established, this Court finds it necessary, in order to obviate any lingering questions on the matter, to clarify the extent of the LTFRB' s regulatory powers over fare, rates, and charges of public land transportation services, which petitioners Joseph Ejercito et al. insist extend to the operation of rail transit systems.

Briefly, petitioners Joseph Ejercito et al. posit that E.O. No. 125-A gave the DOTC mere direct line supervision and control over its regional offices and the duty to formulate, develop, and implement its plans, policies, programs, and projects. They allege that under E.O. No. 202, the quasi-judicial powers and functions to adjudicate fare adjustments of the DOTC are transferred to the LTFRB. Consequently, it is now the LTFRB which has the power to impose and implement any fare increase for the MRT and the LRT.241

The LTFRB was created by virtue of E.O. No. 202 signed by President Corazon C. Aquino on June 19, 1987. It is under the administrative control and supervision of the DOTC Secretary,242 which also exercises appellate jurisdiction over its decisions, orders, or resolutions.243 Based on Section 5 of E.O. No. 202, the powers and functions of the LTFRB are:

According to Section 5(c) of E.O. No. 202, the power of the LTFRB to determine, prescribe, approve, and periodically review fares, rates, and other related charges applies specifically to the operation of public land transportation services provided by motorized vehicles. There can be no issue as to the nature of the LRT and the MRT as a public land transportation service. The question is whether they are considered motorized vehicles as to fall under the LTFRB's fare-setting power. Admittedly, E.O. No. 202 does not define what is considered a motorized vehicle. The term "motor vehicle" first appeared in R.A. No. 4136245 and was defined as:

(a) "Motor Vehicle" shall mean any vehicle propelled by any power other than muscular power using the public highways, but excepting road rollers, trolley cars, street-sweepers, sprinklers, lawn mowers, bulldozers, graders, fork-lifts, amphibian trucks, and cranes if not used on public highways, vehicles which run only on rails or tracks, and tractors, trailers and traction engines of all kinds used exclusively for agricultural purposes.

R.A. No. 4136 regulates vehicles that use the public highway. It provides for the rules governing application, registration, and operation of these vehicles, as well as licensing of owners, dealers, and driver, and other similar matters. Following the definition under R.A. No. 4136, the MRT and the LRT are not considered motor vehicles since both run on rail or tracks only.

Nevertheless, the extent of the LTFRB 's fare-setting authority may be viewed and understood more clearly in light of its regulatory tool set and the nature of its functions. Under E.O. No. 202, the LTFRB is mandated to regulate the operation of public land transportation services provided by motorized vehicles primarily by a) prescribing and regulating the routes of service, capacities, and zones or areas of operation; and b) issuing, amending, revising, suspending, or canceling Certificates of Public Convenience or permits. Clearly, these regulatory mechanisms apply to entities or persons that are operating or are seeking to operate public transportation utilities. They do not apply to the LRT and the MRT, the nature of which is sui generis and unlike any other existing public service or utilities. For one, the routes of service of the LRT and the MRT are already pre-determined by the respective layouts of their rail systems. For another, the operations of the LRT and the MRT do not require a Certificate of Public Convenience or a permit, since they are owned and operated, respectively, by an instrumentality of the national government.246

It should be pointed out that E.O. No. 202 creating the LTFRB was issued prior to the effectivity of the Administrative Code of 1987, which took effect only on July 15, 1987. Under the Administrative Code of 1987, the LRTA was designated as an attached agency of DOTC247 and was expressly allowed to continue operating in accordance with its charter, except insofar as it conflicts with the provisions of the Code.248 In short, the LRTA retained all its powers and functions under E.O. No. 603, including the authority to regulate the fares for the LRT, even after the creation of the LTFRB.

Meanwhile, contrary to petitioners Joseph Ejercito et al.'s insistence, E.O. No. 125-A249 granted the DOTC the power to:

(p) Determine, fix and/or prescribe charges and/or rates pertinent to the operation of public air and land transportation utility facilities and services, except such rates and/or charges as may be prescribed by the Civil Aeronautics Board under its charter, and, in cases where charges or rates are established by international bodies or associations of which the Philippines is a participating member or by bodies or associations recognized by the Philippine government as the proper arbiter of such charges or rates.250

When the Administrative Code of 1987 took effect, this provision was carried over to the functions and power the DOTC under Book IV, Title XV, Chapter 1, Section 3(15).251 From the foregoing, it is clear that the creation of the LTFRB did not operate to altogether remove the power of the DOTC to regulate the fares of public land transportation utilities and services. On the contrary, the DOTC retained this power, except only to the extent that it has been vested to other administrative agencies like the LRTA, the LTFRB, and the Civil Aeronautics Board.

This Court is mindful of decisions pronouncing that notice and hearing are not essential when an administrative agency acts pursuant to its rule-making power or in the exercise of legislative functions.252 In the early case of Vigan Electric Light Company, Inc. v. Public Service Commission (Vigan Electric),253 this Court has delineated when the exercise of an administrative agency's rate fixing-power partakes either of a legislative or quasi-judicial character. When such rules and/or rates are meant to apply to all enterprises of a given kind throughout the Philippines, they partake of a legislative character.254 Meanwhile, when the rule applies exclusively to a specific party and a predicated upon the finding of a fact, the function performed partakes of a quasi-judicial character.255

Vigan Electric further drew a line between when notice and hearing are required and when they are not. When the administrative agency performs a quasi-judicial function, notice and hearing are required. Otherwise, when the administrative agency performs a legislative function, notice and hearing are not required.

Here, the rate fixed by D.O. No. 2014-014 affects all Filipinos riding the railway transit systems without distinction. Undoubtedly, and as earlier discussed, the DOTC exercised a legislative function when it issued D.O. No. 2014-014. Nevertheless, it must be clarified that the doctrine laid down in Vigan Electric has since been modified by this Court when it comes to the notice and hearing requirements. As it now stands, the rule that prior notice and hearing are not requirements of due process when the administrative rule was issued in the agency's exercise of legislative function, does not apply where when the law itself expressly requires it,256 as in this case.

Section 9, Chapter 2, Book VII of the Administrative Code of 1987 explicitly provides that when it comes to rate-fixing, the proposed rates must have been published in a newspaper of general circulation at least two weeks before the first hearing thereon. Hence:

The foregoing provision is clear, straightforward, and admits of no room for interpretation. Rate-fixing requires notice and hearing, which notice must come at least two weeks before the hearing.

In Manila International Airport Authority (MIAA) v. Airspan Corporation,257 this Court ruled that MIAA, an attached agency of the DOTC, cannot validly raise fees, charges, and rates without prior notice and public hearing. As an attached agency, the MIAA is governed by the Administrative Code of 1987, which specifically requires notice and public hearing in the fixing of rates, therefore:

Section 38, Chapter 7, Book IV of the Administrative Code of 1987 provides that there are three kinds of administrative relationships: (1) supervision and control; (2) administrative supervision; and (3) attachment.259 The same Section defines the three relationships as follows:

Among the three, attachment is the most lenient since the relationship is merely for policy and program coordination. Moreover, the provisions on supervision and control do not apply to chartered institutions attached to a department. Peñafrancia Shipping Corporation, et al. v. 168 Shipping Lines, Inc.260 distinguished among the three relationships:

Among the three, the relationship of supervision and control between a department and a subordinate agency is the most stringent since the department has the power to review the decisions of the subordinate agency. This power is not available in administrative supervision as Section 38 expressly states that the department shall have no power to review the decisions of regulatory agencies in the exercise of their regulatory or quasi-judicial functions. As to the relationship of attachment, while the law is silent on the presence or absence of such power to review by the department, Section 38(3) would indicate that the Legislature did not intend that the decisions of an attached agency be subject to review by the department prior to appealing before the proper court. Section 38(3) indicates the most lenient kind of administrative relationship since the lateral relationship is limited to policy and program coordination. Thus, in Beja v. Court of Appeals, we distinguished an attached agency from one which is under departmental supervision and control or administrative supervision:

An attached agency has a larger measure of independence from the Department to which it is attached than one which is under departmental supervision and control or administrative supervision. This is borne out by the "lateral relationship" between the Department and the attached agency. The attachment is merely for "policy and program coordination." With respect to administrative matters, the independence of an attached agency from Departmental control and supervision is further reinforced by the fact that even an agency under a Department's administrative supervision is free from Departmental interference with respect to appointments and other personnel actions "in accordance with the decentralization of personnel functions" under the Administrative Code of 1987. Moreover, the Administrative Code explicitly provides that Chapter 8 of Book IV on supervision and control shall not apply to chartered institutions attached to a Department. (Emphasis supplied; Citations omitted)261

Despite having a larger measure of independence from the department to which it is attached, MIAA has already established that attached agencies are still governed by the provisions of the Administrative Code on notice and public hearing in the fixing of rates. This goes without saying that as an attached agency of the DOTC, the LRTA should similarly follow the requirements in Section 9, Chapter 2, Book VII of the Administrative Code of 1987.

Regarding the MRT-3 Office, Section 39, Chapter 8, Book IV of the Administrative Code of 1987 expressly provides that the Secretary shall have supervision and control over the bureaus, offices, and agencies under him or her:

Thus, in the absence of a provision prescribing that the relationship between a department and its subordinate agency is either of attachment or administrative supervision, the authority of the Secretary to exercise supervision and control over all bureaus, offices, and agencies under him or her prevails. Admittedly, the MRT-3 Office is an office under the DOTC. It is neither a chartered institution nor a government-owned or controlled corporation attached to the department, and the Administrative Code of 1987 has not specified its relationship with the DOTC as either one of attachment or administrative supervision. Following Section 39 above, the DOTC and the MRT-3 Office are governed by the relationship of supervision and control. With more reason, therefore, should the provision on notice and hearing in the fixing of rates apply to the MRT-3 Office.

In any case, this Court has held that when an administrative rule substantially increases the burden of those governed, the agency must afford those directly affected a chance to be heard and be duly informed before the issuance is given the force and effect of law. In Department of Environment and Natural Resources Employees Union v. Abad, 262 We said:

While DENR referred to the requirement of publication, the principle remains the same. More importantly, DENR applied the requirement of publication under Chapter 2, Book VIII of the Administrative Code of 1987, which similarly houses the requirement of public participation under Section 9 thereof. Here, since D.O. No. 2014-014 substantially increased the burden of the commuting public due to the fare increase, compliance with the requirements of notice and hearing is indispensable.

D.O. No. 2014-014 substantially complied with the requirements of notice and hearing

Petitioners argue that D.O. No. 2014-014 was issued without the required notice and hearing. Thus, they were deprived of the opportunity to confront and cross-examine the DOTC's resource and point persons and fully determine the basis of the fare increase. Petitioners insist that for lack of notice and hearing, D.O. No. 2014-014 is null and void.264

Petitioners lament that the hearings conducted in 2011 and 2013 violate their right to due process since the conditions and grounds relied upon by the public respondents for the fare increase under D.O. No. 2014-014 are different from those in 2011 and 2013 when the rate hike was withdrawn due to the public's opposition. They contend that the public is entitled to a new and original round of notice and hearing since the issuance of D.O. No. 2014-014 represents a change in the withdrawal of the proposed fare hike in the previous years.265

The records show that plans to increase the fare increase of the LRT and the MRT started as early as 2010. On August 5, 2010, in view of reducing government subsidy, the Office of the President directed the LRTA to conduct a comparative study on the operating costs of the LRT and the MRT vis-à-vis public utility buses.266 On August 25, 2011, the LRTA management presented the result of the study to the LRTA Board for its consideration.267 Subsequently, the LRTA management also conducted a joint study with the DOTC regarding the possible fare increase for the LRT and the MRT. On October 27, 2010, the DOTC and the LRTA issued a Fare Restructuring Executive Report268 stating that a fare increase in the LRT and the MRT will considerably reduce government subsidy and will generate additional income for the operation of the rail lines. The DOTC-LRTA Study Team ultimately recommended a fare structure of PHP 11.00 plus PHP 1.00/km for the LRT. The DOTC then presented the report to the top officials of the DOTC and the LRTA Board during its meeting in October 2010.269 On October 27, 2010, the Secretary of Finance, the Secretary of Budget and Management, the Secretary of Transportation and Communications, and the Secretary of Socio-Economic Planning (economic managers) executed a Memorandum270 for the President regarding the LRT fare adjustment.

This precipitated the first official proposal to increase the fares of the LRT and the MRT. On January 20 and 27, 2011 a Notice of Public Consultation271 was published in the Philippine Daily Inquirer and the Manila Bulletin for the proposed fare adjustment in LRT-1, LRT-2, and MRT-3. After duly considering the result of the public consultation, the fare adjustment of distance-based fare scheme of PHP 11.00 plus PHP 1.00/km with the 20% student discount was approved. Yet, on May 9, 2011, the LRTA Board and the DOTC decided to indefinitely defer the implementation of the fare increase.272

During former President Benigno Simeon Aquino III's SONA on July 22, 2013, he reiterated the need to adjust the LRT's and MRT's fares so that the government subsidy for the MRTC and the LRTA can be used for other social services.273 In a Secretary's Certificate dated November 26, 2013, the LRTA Board affirmed the PHP 11.00 plus PHP 1.00/km fare adjustment for LRT-1 and LRT-2, as previously approved in 2011. Notices of Public Consultation274 were again published in the Philippine Daily Inquirer and the Manila Bulletin on December 5, 2013 for the proposed fare adjustments in the LRT and MRT lines. On December 12, 2013, the public hearing was conducted. Present were DOTC Undersecretary Eduardo S.L. Oban and respondent Renato San Jose, then Officer-in-Charge of the MRT-3 Office.275

On December 18, 2014, public respondent DOTC Secretary Jose Emilio A. Abaya issued D.O. No. 2014-014.276 In the Press Release277 issued by the DOTC on December 20, 2014 regarding D.O. No. 2014-014, it stated that the fare increase adopts the user-pay principle which requires riders to pay an amount close to the actual cost of their trip. This will result in the reduction of government subsidy which, in turn, will free up budget that may be used for development projects and relief operations in other parts of the country.

It is clear that prior to the issuance of D.O. No. 2014-014, public consultations were held on February 4 and 5, 2011, and on December 12, 2013 after due notice. While the fare increase eventually materialized only on December 20, 2014 through the issuance of D.O. No. 2014-014, the basis of and purpose for the proposed hike remained the same ever since-the reduction of government subsidy over the operations of the LRT and the MRT. Notably, D.O. No. 2014-014 even retained the initially proposed fare structure of PHP 11.00 plus PHP 1.00/km for the LRT and the MRT back in 2010.

As pointed out by Associate Justice Amy C. Lazaro-Javier, "there is no requirement in Section 9(2) or anywhere in the Administrative Code of 1987 that the hearings or public consultations ought to be held within a particular time frame before the adoption of the final order of fare or rate adjustments."278

Since D.O. No. 2014-014 is a mere reiteration of the proposed fare increases in 2011 and 2013, the public consultations previously held substantially serve the purpose of the hearing requirement under Section 9, Chapter 2, Book VII of the Administrative Code of 1987. Chief Justice Alexander G. Gesmundo accurately noted that in the present case, "there is no showing of any drastic changes in social and economic conditions that have occurred between December 2013 to December 2014 as to radically alter the perspectives of those who attended the prior year's consultation and other persons affected by the issuance."279

It should be emphasized that the requirements of notice and hearing in the present case are not empty formalities. They are at the core of procedural due process which "concerns itself with government action adhering to established process when it makes an intrusion into the private sphere."280 The conduct of notice and hearing gives affected stakeholders an opportunity to evaluate and oppose a measure that will heavily affect their everyday lives.

On this score, this Court has held that "the essence of due process is simply an opportunity to be heard, or as applied to administrative proceedings, a fair and reasonable opportunity to explain one's side."281 Indeed, there is no required format or template by which the hearing is to be conducted. Section 9, Chapter 2, Book VII of the Administrative Code of 1987 also does not prescribe any particular manner as to how public participation should be undertaken. As stated by Associate Justice Alfredo Benjamin S. Caguioa, "due process is not a rigid and inflexible concept." Depending on the circumstances, it "varies with the subject matter and necessities of the situation."282 In relation to administrative proceedings, "due process should not be tantamount to the requirements for judicial or adjudicatory processes.283

As raised by Associate Justice Maria Filomena D. Singh during the public consultations on February 4 and 5, 2011, the attendees were able to express their concerns and opposition to the proposed fare adjustment. The participants even articulated their own recommendations regarding the fare increase. Meanwhile, petitioners in G.R. No. 216735 admitted that during the public consultation on December 12, 2013, those present were given the chance to participate in the discussion and that one of the participants even asked about the authority of those presiding the consultation to hear the case of a proposed fare hike.284 Unlike what petitioners insist, there is no inherent right to confront or cross-examine the other party in proceedings of this nature. So long as interested parties are given an adequate opportunity and avenue to air their views prior to the adoption of a new rule, the essence of due process is deemed served.

Petitioners posit that the fare increase is arbitrary because it provided no basis or formula for computation of the fare increases presented. The fare increase is, therefore, unjust and unreasonable.285

It bears reiterating that "the power to fix rates is a legislative function, whether exercised by the legislature itself or delegated through an administrative agency."286 In case exercised by an administrative agency, the only required standard is for the rate to be reasonable and just.287

Nevertheless, "a determination of whether the rates so fixed are reasonable and just is a purely judicial question and is subject to the review of the courts."288 Moreover, the determination of the justness and reasonableness of a certain rate is a question of fact calling for the exercise of discretion, good sense, and a fair, enlightened, and independent judgment.289 Being a question of fact, high regard is given to the factual findings of administrative bodies in the fixing of their rates, it being a technical matter within their area of expertise.290 Rate-fixing calls for no less than a technical examination and a specialized review of specific details that courts may not be equipped to partake.291 As such, these matters are primarily entrusted to the administrative or regulating authority.292

In NASECORE v. MERALCO,293 this Court affirmed the ERC's approval of MERALCO's applications for the translation distribution rates of the ERC-approved Annual Revenue Requirement, using the Performance Based Regulation methodology, covering the first and second regulatory years 2007 to 2011 period. This Court sustained the reasonableness of the rates approved by the ERC after finding that MERALCO's rate applications were approved only after the ERC "conducted the necessary proceedings, received evidence in support of the applications and, thereafter, made an independent evaluation of the same.1aшphi1"294 Thus:

In the present case, petitioners failed to prove that the rates under D.O. No. 2014-014 were unreasonable or unjust. To note, the proposed fare increase of PHP 11.00 plus PHP 1.00/k.m was initially determined by the DOTC-LRTA Study Team in 2010 after conducting an examination of the various factors affecting the operations and status of the rail lines. According to the team's Fare Restructuring Executive Report,296 the rail lines are not generating substantial revenues, requiring greater government subsidies to cover operating and maintenance costs. It was also pointed out that the LRT and MRT fares have fallen below the fare levels of Metro Manila buses and jeepneys for the end-to-end travel of the rail lines. Thus, three fare options were initially considered to approximate the prevailing fare of air-conditioned buses in the metro: (1) PHP 9.00 [boarding fee] plus PHP 1.00/km; (2) PHP 10.00 [boarding fee] plus PHP 1.00/krn; and (3) PHP 11.00 [boarding fee] plus PHP 1.00/km. Ultimately, the team proposed the increase of PHP 11.00 plus PHP 1.00/km since it will reduce government subsidy the most.297

From the foregoing, it cannot be said that the fare increase under D.O. No. 2014-014 was arrived at arbitrarily. Clearly, the rates thereunder were determined after a thorough and independent evaluation made by the DOTC and the LRTA. Moreover, the DOTC and the LRTA followed the prescribed procedure in implementing the fare increase. As discussed above, due notice was issued and public consultations were held before D.O. No. 2014-014 took effect.

Without a clear showing that the DOTC or the LRTA acted arbitrarily or capriciously, this Court shall not interfere in the exercise of their statutorily granted powers.298 Their findings and conclusions with regard to the fare increase under D.O. No. 2014-014 must thus be respected.

This Court reiterates that with regard to any changes in the rates of the LRT and the MRT fares, the requirements under Section 9, Chapter 2, Book VII of the Administrative Code of 1987 must be strictly observed. The twin requirements on notice and hearing are not dispensable. Otherwise, any proposed changes or fare increase shall be void and of no effect.

In this case, there was substantial compliance with the requirements of notice and hearing. The purpose for which these requirements were enacted was sufficiently served. Perforce, the validity of D.O. No. 2014-014 must be sustained.

As a final note, this Court clarifies that the result of the pending arbitration request filed by the LRMC with the International Chamber of Commerce on May 6, 2022 against the DOTr and the LRTA will have no effect on our ruling on the consolidated Petitions. The arbitration request involves the petition for fare increase in 2016, 2018, and 2022 made by the LRMC which were all denied by the government. It does not deal with the fare increase mandated under D.O. 2014-014.

ACCORDINGLY, the Petitions are DISMISSED. This Court upholds the validity of the Department of Transportation and Communications Department Order No. 2014-014.

Hernando, Inting, Zalameda, M. Lopez, Gaerlan, Rosario, Dimaampao, Marquez, Kho, Jr., and Singh, JJ., concur.

Leonen,* SAJ., See separate concurring opinion. On official leave but left his vote.