ADMINISTRATIVE LAW: ADMINISTRATIVE AGENCIES

I. Definition and Nature of Administrative Agencies

Administrative agencies are specialized government bodies created by law or executive issuance to perform specific functions related to the implementation of statutes, regulations, or public policy. They exercise delegated powers from either the legislative or executive branches of government to carry out these functions. These agencies form part of the Executive Department but may be conferred with quasi-legislative, quasi-judicial, and administrative functions.

II. Creation of Administrative Agencies

By Constitution: The Constitution may create certain administrative bodies, such as constitutional commissions (e.g., Commission on Elections, Commission on Audit, and Civil Service Commission).
By Legislative Enactment: Congress may create administrative agencies through statutory laws. Examples include the Securities and Exchange Commission (SEC) and the National Telecommunications Commission (NTC).
By Executive Issuance: The President may also create agencies under the executive department to handle particular administrative tasks, within the framework of existing laws.

III. Powers of Administrative Agencies

Administrative agencies typically possess three categories of powers:

Quasi-legislative (Rule-making) Powers
- Agencies are authorized to promulgate rules and regulations to implement the laws they are tasked to enforce. These rules must be within the bounds of the agency’s delegated authority and should not extend beyond what is provided by law.
- Administrative rules and regulations have the force and effect of law when issued in accordance with enabling legislation and proper procedures (such as publication and public hearings).
- The Administrative Code of 1987 provides the general framework for rule-making processes.
Quasi-judicial (Adjudicatory) Powers
- Agencies may conduct hearings, receive evidence, and render decisions in matters involving their particular expertise.
- Quasi-judicial proceedings may result in the issuance of orders, decisions, or penalties that affect the rights and obligations of private persons or entities.
- Key requirements include due process in administrative adjudication, meaning notice, hearing, and the opportunity to present evidence and argument.
- Appeals from quasi-judicial rulings are generally made to the Court of Appeals through a petition for review under Rule 43 of the Rules of Court, except where laws provide otherwise.
Purely Administrative Functions
- Administrative agencies carry out duties directly related to the implementation and execution of laws. These may include issuing permits and licenses, conducting inspections, and overseeing compliance with regulations.

IV. Delegation of Powers to Administrative Agencies

Doctrine of Delegation: Under the Constitution, legislative power cannot generally be delegated to another body. However, delegation is allowed when legislative authority delegates rule-making powers to administrative agencies to fill in the details of a statute.
Tests of Valid Delegation:
- Completeness Test: The law delegating powers must be complete in all its essential terms and conditions so that all that remains for the administrative agency is to enforce the law.
- Sufficient Standard Test: The delegating law must prescribe sufficient standards to guide the administrative agency in the exercise of its functions. The sufficient standard ensures that the delegated discretion will not be arbitrary and must be based on clear legislative policies.

V. Limitations on Administrative Agencies

Doctrine of Non-delegation: Administrative agencies cannot delegate their own delegated powers unless expressly authorized by the enabling statute.
Due Process and Equal Protection: As creatures of law, agencies must act within the bounds of due process and equal protection guarantees. Any administrative action must follow fair procedure and not violate fundamental rights.
Judicial Review: Courts can review actions of administrative agencies under the following circumstances:
- When there is grave abuse of discretion.
- When the agency acts without or in excess of jurisdiction.
- When the action violates constitutional rights.
- Review may involve questioning the factual findings, legal conclusions, or both. However, as a general rule, factual findings of administrative agencies are given great weight and are respected by courts, provided they are supported by substantial evidence.

VI. Administrative Procedures

Rule-Making Procedure:
- Rule-making requires strict compliance with procedural requirements under the Administrative Code.
- Steps generally include:
  1. Publication of proposed rules.
  2. Public hearing or consultation where stakeholders may present their views.
  3. Submission of comments by interested parties.
  4. Final publication of the rules before they become effective.
  5. Effectivity: Rules become effective 15 days after the completion of publication unless otherwise provided by law.
Adjudication Procedure:
- The adjudicatory process involves hearings where evidence is presented and evaluated by the agency. The rules of evidence in administrative proceedings are generally more relaxed compared to judicial processes, but the right to a fair hearing must be upheld.
- Decisions must be supported by substantial evidence, and parties are entitled to be notified of the ruling and to appeal as provided by law.
Administrative Remedies:
- Exhaustion of administrative remedies is a prerequisite to judicial recourse. The doctrine requires aggrieved parties to first seek resolution of their grievances through the mechanisms provided by the agency itself before resorting to the courts. Exceptions exist where:
  1. Administrative remedies are inadequate.
  2. Agency action is patently illegal.
  3. Immediate judicial intervention is necessary to prevent irreparable harm.
  4. Where exhaustion would be futile.

VII. Independence and Autonomy of Administrative Agencies

Some administrative agencies are granted fiscal autonomy, meaning they have independence in managing their budgetary allocations (e.g., constitutional commissions).
Other agencies may enjoy functional independence from political control, though subject to oversight mechanisms such as congressional inquiry or executive supervision.

VIII. Discretion of Administrative Agencies

Administrative Discretion: Agencies have discretion in interpreting laws or regulations they administer, as long as they act within the limits set by law.
The courts generally defer to an agency’s interpretation of the law, especially when the agency is tasked with enforcing a law in its area of expertise. This is known as the doctrine of primary jurisdiction or administrative expertise.

IX. Doctrine of Exhaustion of Administrative Remedies

Before an individual can seek judicial review, they must exhaust all available administrative remedies. The rationale behind this doctrine is that agencies are better equipped to handle technical issues and provide faster resolution.
Exceptions to the Doctrine:
1. When the issue involves a purely legal question.
2. When administrative remedies are either unavailable or ineffective.
3. When requiring exhaustion would be patently unreasonable under the circumstances.

X. Judicial Review of Administrative Actions

Grounds for Review: Judicial review is allowed on questions of law, jurisdiction, or grave abuse of discretion. The factual findings of administrative agencies, if supported by substantial evidence, are generally respected by courts.
Finality of Administrative Actions: Administrative decisions become final and executory when no appeal or motion for reconsideration is filed within the prescribed period.

XI. Separation of Powers and Administrative Agencies

While administrative agencies perform functions that overlap with the powers of the three branches of government (e.g., quasi-legislative and quasi-judicial powers), they remain primarily part of the Executive Branch. The delegation of powers to agencies must adhere to the principle of separation of powers and constitutional limits.

XII. Examples of Administrative Agencies in the Philippines

Civil Service Commission (CSC) – Oversees the civil service system.
National Labor Relations Commission (NLRC) – Handles labor disputes.
Energy Regulatory Commission (ERC) – Regulates the energy industry.
Department of Environment and Natural Resources (DENR) – Oversees environmental conservation and land use policies.
Philippine Competition Commission (PCC) – Ensures competitive practices in the market.

In summary, administrative agencies serve crucial roles in government by providing specialized regulation, adjudication, and implementation of statutes. Their powers are constitutionally and statutorily derived, subject to limits of judicial review, the rule of law, and procedural fairness.