An administrative body/agency is any government authority, other than a court and a legislature, that

affects the state and its citizens through rule-making, adjudication, and implementation. Its functions
are primarily executive but it exercises some form of legislative and judicial powers.

In the Administrative Code, an agency is defined to include:

any government unit authorized by law to make rules, issue licenses, grant rights or privileges, and
adjudicate cases.[1]

research institutions with respect to licensing functions.[1]

government corporations with respect to functions regulating private right, privileges, occupation or
business.[1]

officials in the exercise of disciplinary power as provided by law.[1]

Nature of Administrative Agency

An administrative agency is a general term that covers any government authority that can act as:

an executive body that serves public interests, which is the reason (rationale) for its existence; it shall
not represent any private interests.

a quasi-legislative body that establishes and prescribes rules and regulations to implement the law; it
shall not have absolute discretion to determine or change the law.

a quasi-judicial body that conducts hearings and decides on cases; it shall not have inherent powers of a
pure judicial court, and its proceedings shall not be bound by all the rules applicable to proceedings in
court.

The administrative agencies act as a mechanism that provides expertise and organizational capability for
the three branches of government.

An administrative agency may be created by

executive order; as in EO 100, s. 1986 that created PIA.

legislation; as in RA 10844 that created DICT.

constitutional provision; as in Art. 9 that created CSC, COMELEC and COA.

An agency is wholly within the power of the law that created it, that prescribes its powers and functions.
It may also be abolished in the same manner it is created if such abolition is justified by the law.

Types of Administrative Agency

The administrative agencies are classified into:

Agencies set up to function in situations wherein the government is offering some gratuity, grant, or
special priviledge; such as PVAO, NARRA, etc.

Agencies set up to function in situations wherein the government is seeking to carry on certain
government functions; such as BIR, BI, CSC, COMELEC, BSP, etc.

Agencies set up to function in situations wherein the government is performing some business service
for the public; such as PHILPOST, PNR, MWSS, CAAP, CAB, etc.

Agencies set up to function in situations wherein the government is seeking to regulate industry,
business, or private individuals; such as FDA, PhilFIDA, SEC, MTRCB, PRC, IPOPHL, etc.

Agencies set up to function in situations wherein the government is seeking to adjust individual
controversies because of some strong social policy involved; such as BALA, BLR, BWSC, ECC, PCW, etc.

Powers and Functions of Administrative Agency

The powers and functions of administrative agency are defined in the Constitution, the laws or both.

The powers of an administrative agency are:

Executive power - the authority to implement or carry out the policy set out in the law or statute.

Quasi-legislative power - the authority to adopt rules and regulations intended to better carry out the
policy; the function of rule-making.

Quasi-judicial power - the authority to hear and decide on cases in the performance of duty and to
enforce its decisions according to the law; the function of adjudication.
Incidental power - the authority necessary to effectively carry out the above express powers; the use of
enabling, directing, dispensing, examining and prosecuting functions. It is often referred to as the
determinative power.

The scope of such powers are:

expressly granted by the legislation and those necessarily implied in the exercise thereof.[2]

deprived of quasi-judicial powers unless it is expressly granted.[3]

liberally interpreted by legislation to enable the accomplishment of assigned duties in accordance with
the legislative purpose.[4]

It is considered unconstitutional for an administrative agency to act outside of its scope.

Administrative Rule-Making

main article: Administrative Rule-Making

Rule-making is the function of administrative agencies to promulgate rules and regulations to carry out
the general provisions of a law into effect. It may also be referred to as subordinate legislation.

An administrative agency must promulgate administrative/implementing rules and regulations in

harmony with the law and not in violation of the authority conferred on the agency.[5]

An administrative agency shall publish or circulate notices of proposed rules and regulations as well as
provide an opportunity to interested parties to submit their views regarding the adoption of any rule.[6]

The promulgation of implementing rules and regulations may be interrupted or set aside by the judicial
department if there is an error of law, a grave abuse of power or lack of jurisdiction or grave abuse of
discretion clearly conflicting with either the letter or the spirit of a legislative enactment.[7]

The implementing rules and regulations are also subject to amendment or repeal by the agencies that
promulgated them, or by the legislature.
Administrative Adjudication

main article: Administrative Adjudication

Administrative adjudication is the function of administrative agencies to conduct hearings and decide
on cases in the duty of carrying out a law.

An administrative agency must have jurisdiction to give validity to its determinations/decisions as a

quasi judicial body or tribunal. Such jurisdiction is limited and dependent entirely on the source of its
authority, which is either from the statutes or the Constitution.

An administrative agency is normally granted the authority to promulgate its own proceeding (rules of
procedures), provided they do not violate fundamental rights and the Constitution. Such rules of
procedures shall remain effective unless disapproved by the Supreme Court.[8]

An administrative proceedings is not required to adapt formal court rules that govern purely judicial
proceedings. However, it is essential for any proceeding to observe due process.

The decision rendered by an administrative agency in a case shall be in writing and shall clearly state the
facts and legal basis. The agency shall decide each case within 30 days following its submission.

The decision of the agency is final and executory after the receipt of copy of such decision by the party
who lost the case. However, an administrative appeal or judicial review may be perfected before the
finality of the decision.[9]

An administrative agency shall publish and make available for public inspection all decisions or final
orders in the adjudication of contested cases.[10]

Rate-Fixing
main article: Rate-Fixing Power

Rate-fixing is the function of administrative agency to fix or control the charges (rates, wages and prices)
exalted to public utility services.

The rate-fixing by an administrative agency must be accompanied with notice and hearing, specially if its
is quasi-judicial in nature.[11] It must also be reasonable and just in the absence of an express
requirement for standard by law.

The proposed rates by the agency shall be valid after their publication in a newspaper of general
circulation at least 2 weeks before the first hearing thereon.[12]

Determinative Functions

The incidental or determinative functions of administrative agency are:

Licensing - the function to permit or allow something which the law undertakes to regulate. It is simply
the issuance of license. It is also referred to as the enabling function.

Directing - the function to determine, assess, valuate and classify for corrective purposes and
compliance with the law.

Dispensing - the function to exempt one from or relax a general prohibition, or to relieve one from an
affirmative duty.

Examining - the function to require the attendance of witnesses or the production of books, papers,
documents and other pertinent data, upon request of any party before or during a hearing.[13] It is
simply the issuance of subpoena. It is also referred to as the 'investigatory function'.

Prosecuting - the power to apply compulsion or force against person or property to effectuate a legal
purpose without a judicial warrant to authorize such action. It is more often referred to as the 'summary
function'.

Administrative adjudication is the function of administrative agencies to conduct hearings and decide
on cases in the duty of carrying out a law.
An administrative agency must have jurisdiction to give validity to its determinations/decisions as a
quasi judicial body or tribunal. Such jurisdiction is limited and dependent entirely on the source of its
authority, which is either from the statutes or the Constitution.

An administrative agency is normally granted the authority to promulgate its own proceeding (rules of
procedures), provided they do not violate fundamental rights and the Constitution. An administrative
proceeding shall remain effective unless disapproved by the Supreme Court. However, such proceedings
are not required to adapt formal court rules that govern purely judicial proceedings.

It is essential for any proceeding to observed due process which is simply an opportunity to be heard, to
explain one's side, and to seek reconsideration of the decision taken. This is in order to ensure fairness
and the protection of individual rights.

The requisites of administrative due process are:

right to a notice and hearing, if required by law or if rights to liberty and property are affected.

impartiality of the tribunal and the consideration of all valid evidences presented.

substantial evidence supporting the decision of the tribunal; such evidence was presented at the hearing
or, at least, contained in the record.

transparency of records for the parties.

independent consideration by the judge/s, who must not simply accept the views of a subordinate in
arriving at a decision.

decision rendered in such a manner that the parties can know the various issues involved and the
reasons for such decision.

The absence of one of the aforementioned requisites is sufficient to question the proceeding.

The right to a notice and hearing is not required in case of:

urgency of immediate action.

exercise of discretion by a public officer vested with it upon an undisputed fact.

exercise of discretion wherein there is no grave abuse of discretion.

validity of established rules that govern future conduct of persons or enterprises, unless the law
provides otherwise.

preventive suspension of a public officer or employee pending investigation of administrative charges

against him.

valid exercise of police power.

The decision rendered by an administrative agency in a case shall be in writing and shall clearly state the
facts and legal basis. The agency shall decide each case within 30 days following its submission.

The decision of the agency is final and executory after the receipt of copy of such decision by the party
who lost the case. However, an administrative appeal or judicial review may be perfected before the
finality of the decision.

An administrative agency shall publish and make available for public inspection all decisions or final
orders in the adjudication of contested cases.

The doctrine of exhaustion of administrative remedies states that one should avail all the means of
administrative processes provided by law before seeking the intervention of the court. This is applied in
the exercise of quasi-judicial power of administrative agency.

Effect of the Doctrine

The doctrine of exhaustion of administrative remedies is held whenever there is available administrative
remedy that should be used up or exhausted before a recourse to judicial action.[1] This is in order to:

provide an orderly procedure prescribed by law with respect to matters peculiarly within the
competence of the administrative agency.[2]

give the agency an opportunity to decide on its own matters and to correct its own errors.[3][4]
prevent unnecessary and premature resort to the court.[5]

The doctrine asserts that courts, for reasons of law, comity and convenience, should not entertain cases
proper for determination by administrative agencies.[6]

Violation of the doctrine may dismiss a case due to lack of 'cause of action'.[7] A motion to dismiss must
be filled on this ground, otherwise it is deemed to be waived.

This doctrine is held in legal cases such as:

Exceptions to the Doctrine

The doctrine of exhaustion of administrative remedies does not apply:

when the issue involved is a pure question of law

when the due process is clearly violated

when the administrative action is patently illegal amounting to lack or excess of jurisdiction

when there is urgent need for judicial intervention

when there is unreasonable delay or official inaction

when there is no other plain, speedy or adequate remedy provided by law

when there is estoppel on the part of the agency concerned

when there is great and irreparable damage which can only be prevented by court action

when the resort to administrative remedy will amount to the nullification of a claim

when the law specifically provides that the issue shall be brought up to the court

when the subject matter is private land in land case proceedings

Rule-making is the function of administrative agencies to promulgate rules and regulations to carry out
the general provisions of a law into effect. It may also be referred to as subordinate legislation.

The legislature has found it necessary to delegate and entrust rule making to the administrative agencies
due to the rapid increase of specialized activities and their attendant peculiar problems.

The authority to prescribe administrative/implementing rules and regulations is somewhat legislative in

nature, but their adoption is purely an executive function.

The types of implementing rules and regulations are:

Interpretative - designed to provide explanations and guidelines to the law which the administrative
agency is in charge of implementing.

Legislative - designed to provide the details in the implementation of the law.

Supplementary - to specify the details.

Contingent - to make adequate adjustments upon the happening of unforeseen events.

A legislative rule is legally binding and have statutory force since they have been written in a statute
itself.

On the other hand, an interpretative rule or ruling is legally binding but does not have statutory force.
Instead, such rules and regulations have the presumption of constitutionality and legality until set aside
with finality in an appropriate case by a competent court.

The issuance or promulgation of implementing rules and regulations by an administrative agency is

conferred by its Charter and by the law itself. It is hence necessary for such rules and regulations to be
read in harmony with the law and not in violation of the authority conferred on the agency.

The general requisites for the validity of implementing rules and regulations are:
issuance under the authority of law.

adherence to the scope and purview of the law.

they must conform with the standards set by law.

they must be significantly relevant to the objectives and purpose of the law.

they must not restrict, expand, diminish, supplant or modify the law.

reasonable and fair adaptation; not arbitrary and capricious.

promulgation in accordance with the procedures:

they must be subject to the publication and effectivity rules of the Administrative Code.

there must be an adjudication in case of controversy.

The additional requisites for the inclusion of criminal/penal sanctions:

the law itself must declare that the violation of rules and regulations as punishable. Only the legislature
can declare what shall constitute a crime and its sanctions.

the law should define or fix the penalty for the violation.

the official publication be made before such sanctions take effect.

An administrative agency shall publish or circulate notices of proposed rules and regulations as well as
provide an opportunity to interested parties to submit their views regarding the adoption of any rule.

The promulgation of implementing rules and regulations may be interrupted or set aside by the judicial
department if there is an error of law, a grave abuse of power or lack of jurisdiction or grave abuse of
discretion clearly conflicting with either the letter or the spirit of a legislative enactment.

The implementing rules and regulations are also subject to amendment or repeal by the agencies that
promulgated them, or by the legislature.