1

CASE 1

PROF. MERLIN M. MAGALLONA, ET AL G.R No. 187167
Petitioners,

- versus -
HON. EDUARDO ERMITA, IN HIS CAPACITY AS EXECUTIVE
SECRETARY, ET
Respondents. July 16, 2011
x -----------------------------------------------------------------------------------------x

D E C I S I O N

CARPIO, J.:

The Case

This original action for the writs of certiorari and prohibition assails the constitutionality of Republic
Act No. 9522
1
(RA 9522) adjusting the countrys archipelagic baselines and classifying the baseline
regime of nearby territories.

The Antecedents

In 1961, Congress passed Republic Act No. 3046 (RA 3046)
2
demarcating the maritime baselines of
the Philippines as an archipelagic State.
3
This law followed the framing of the Convention on the
Territorial Sea and the Contiguous Zone in 1958 (UNCLOS I),
4
codifying, among others, the sovereign
right of States parties over their territorial sea, the breadth of which, however, was left
undetermined. Attempts to fill this void during the second round of negotiations in Geneva in 1960
(UNCLOS II) proved futile. Thus, domestically, RA 3046 remained unchanged for nearly five decades,
save for legislation passed in 1968 (Republic Act No. 5446 [RA 5446]) correcting typographical errors
and reserving the drawing of baselines around Sabah in North Borneo.

In March 2009, Congress amended RA 3046 by enacting RA 9522, the statute now under scrutiny.
The change was prompted by the need to make RA 3046 compliant with the terms of the United
Nations Convention on the Law of the Sea (UNCLOS III),
5
which the Philippines ratified on 27 February
1984.
6
Among others, UNCLOS III prescribes the water-land ratio, length, and contour of baselines of
archipelagic States like the Philippines
7
and sets the deadline for the filing of application for the
extended continental shelf.
8
Complying with these requirements, RA 9522 shortened one baseline,
optimized the location of some basepoints around the Philippine archipelago and classified
adjacent territories, namely, the Kalayaan Island Group (KIG) and the Scarborough Shoal, as
regimes of islands whose islands generate their own applicable maritime zones.

Petitioners, professors of law, law students and a legislator, in their respective capacities as citizens,
taxpayers or x x x legislators,
9
as the case may be, assail the constitutionality of RA 9522 on two
principal grounds, namely: (1) RA 9522 reduces Philippine maritime territory, and logically, the reach
of the Philippine states sovereign power, in violation of Article 1 of the 1987
Constitution,
10
embodying the terms of the Treaty of Paris
11
and ancillary treaties,
12
and (2) RA 9522
opens the countrys waters landward of the baselines to maritime passage by all vessels and
aircrafts, undermining Philippine sovereignty and national security, contravening the countrys
nuclear-free policy, and damaging marine resources, in violation of relevant constitutional
provisions.
13


2

In addition, petitioners contend that RA 9522s treatment of the KIG as regime of islands not
only results in the loss of a large maritime area but also prejudices the livelihood of subsistence
fishermen.
14
To buttress their argument of territorial diminution, petitioners facially attack RA 9522 for
what it excluded and included its failure to reference either the Treaty of Paris or Sabah and its use
of UNCLOS IIIs framework of regime of islands to determine the maritime zones of the KIG and the
Scarborough Shoal.

Commenting on the petition, respondent officials raised threshold issues questioning (1) the petitions
compliance with the case or controversy requirement for judicial review grounded on petitioners
alleged lack of locus standi and (2) the propriety of the writs of certiorari and prohibition to assail the
constitutionality of RA 9522. On the merits, respondents defended RA 9522 as the countrys
compliance with the terms of UNCLOS III, preserving Philippine territory over the KIG or Scarborough
Shoal. Respondents add that RA 9522 does not undermine the countrys security, environment and
economic interests or relinquish the Philippines claim over Sabah.

Respondents also question the normative force, under international law, of petitioners
assertion that what Spain ceded to the United States under the Treaty of Paris were the islands
and all the waters found within the boundaries of the rectangular area drawn under the Treaty of
Paris.

We left unacted petitioners prayer for an injunctive writ.

The Issues

The petition raises the following issues:

1. Preliminarily

1. Whether petitioners possess locus standi to bring this suit; and
2. Whether the writs of certiorari and prohibition are the proper remedies to assail the
constitutionality of RA 9522.

2. On the merits, whether RA 9522 is unconstitutional.

The Ruling of the Court
On the threshold issues, we hold that (1) petitioners possess locus standi to bring this suit as citizens
and (2) the writs of certiorari and prohibition are proper remedies to test the constitutionality of RA
9522. On the merits, we find no basis to declare RA 9522 unconstitutional.

On the Threshold Issues

Petitioners Possess Locus Standi as Citizens

Petitioners themselves undermine their assertion of locus standi as legislators and taxpayers because
the petition alleges neither infringement of legislative prerogative
15
nor misuse of public
funds,
16
occasioned by the passage and implementation of RA 9522. Nonetheless, we recognize
petitioners locus standias citizens with constitutionally sufficient interest in the resolution of the merits
of the case which undoubtedly raises issues of national significance necessitating urgent resolution.
Indeed, owing to the peculiar nature of RA 9522, it is understandably difficult to find other litigants
possessing a more direct and specific interest to bring the suit, thus satisfying one of the
requirements for granting citizenship standing.
17


The Writs of Certiorari and Prohibition Are Proper Remedies to Test the Constitutionality of Statutes
3


In praying for the dismissal of the petition on preliminary grounds, respondents seek a strict
observance of the offices of the writs of certiorari and prohibition, noting that the writs cannot issue
absent any showing of grave abuse of discretion in the exercise of judicial, quasi-judicial or
ministerial powers on the part of respondents and resulting prejudice on the part of petitioners.
18


Respondents submission holds true in ordinary civil proceedings. When this Court exercises its
constitutional power of judicial review, however, we have, by tradition, viewed the writs of certiorari
and prohibition as proper remedial vehicles to test the constitutionality of statutes,
19
and indeed, of
acts of other branches of government.
20
Issues of constitutional import are sometimes crafted out of
statutes which, while having no bearing on the personal interests of the petitioners, carry such
relevance in the life of this nation that the Court inevitably finds itself constrained to take
cognizance of the case and pass upon the issues raised, non-compliance with the letter of
procedural rules notwithstanding. The statute sought to be reviewed here is one such law.

RA 9522 is Not Unconstitutional

RA 9522 is a Statutory Tool to Demarcate the Countrys Maritime Zones and Continental
Shelf Under UNCLOS III, not to Delineate Philippine Territory

Petitioners submit that RA 9522 dismembers a large portion of the national territory
21
because it
discards the pre-UNCLOS III demarcation of Philippine territory under the Treaty of Paris and related
treaties, successively encoded in the definition of national territory under the 1935, 1973 and 1987
Constitutions. Petitioners theorize that this constitutional definition trumps any treaty or statutory
provision denying the Philippines sovereign control over waters, beyond the territorial sea recognized
at the time of the Treaty of Paris, that Spain supposedly ceded to the United States. Petitioners argue
that from the Treaty of Paris technical description, Philippine sovereignty over territorial waters
extends hundreds of nautical miles around the Philippine archipelago, embracing the rectangular
area delineated in the Treaty of Paris.
22


Petitioners theory fails to persuade us.

UNCLOS III has nothing to do with the acquisition (or loss) of territory. It is a multilateral treaty
regulating, among others, sea-use rights over maritime zones (i.e., the territorial waters [12 nautical
miles from the baselines], contiguous zone [24 nautical miles from the baselines], exclusive economic
zone [200 nautical miles from the baselines]), and continental shelves that UNCLOS III
delimits.
23
UNCLOS III was the culmination of decades-long negotiations among United Nations
members to codify norms regulating the conduct of States in the worlds oceans and submarine
areas, recognizing coastal and archipelagic States graduated authority over a limited span of
waters and submarine lands along their coasts.

On the other hand, baselines laws such as RA 9522 are enacted by UNCLOS III States parties
to mark-out specific basepoints along their coasts from which baselines are drawn, either straight or
contoured, to serve as geographic starting points to measure the breadth of the maritime zones and
continental shelf. Article 48 of UNCLOS III on archipelagic States like ours could not be any clearer:

Article 48. Measurement of the breadth of the territorial sea, the contiguous zone, the
exclusive economic zone and the continental shelf. The breadth of the territorial sea, the
contiguous zone, the exclusive economic zone and the continental shelf shall be measured
from archipelagic baselines drawn in accordance with article 47. (Emphasis supplied)

Thus, baselines laws are nothing but statutory mechanisms for UNCLOS III States parties to
delimit with precision the extent of their maritime zones and continental shelves. In turn, this gives
4

notice to the rest of the international community of the scope of the maritime space and submarine
areas within which States parties exercise treaty-based rights, namely, the exercise of sovereignty
over territorial waters (Article 2), the jurisdiction to enforce customs, fiscal, immigration, and
sanitation laws in the contiguous zone (Article 33), and the right to exploit the living and non-living
resources in the exclusive economic zone (Article 56) and continental shelf (Article 77).

Even under petitioners theory that the Philippine territory embraces the islands and all the
waters within the rectangular area delimited in the Treaty of Paris, the baselines of the Philippines
would still have to be drawn in accordance with RA 9522 because this is the only way to draw the
baselines in conformity with UNCLOS III. The baselines cannot be drawn from the boundaries or other
portions of the rectangular area delineated in the Treaty of Paris, but from the outermost islands
and drying reefs of the archipelago.
24


UNCLOS III and its ancillary baselines laws play no role in the acquisition, enlargement or, as
petitioners claim, diminution of territory. Under traditional international law typology, States acquire
(or conversely, lose) territory through occupation, accretion, cession and prescription,
25
not by
executing multilateral treaties on the regulations of sea-use rights or enacting statutes to comply
with the treatys terms to delimit maritime zones and continental shelves. Territorial claims to land
features are outside UNCLOS III, and are instead governed by the rules on general international
law.
26


RA 9522s Use of the Framework of Regime of Islands to Determine the Maritime Zones of the KIG and
the Scarborough Shoal, not Inconsistent with the Philippines Claim of Sovereignty
Over these Areas

Petitioners next submit that RA 9522s use of UNCLOS IIIs regime of islands framework to draw the
baselines, and to measure the breadth of the applicable maritime zones of the KIG, weakens our
territorial claim over that area.
27
Petitioners add that the KIGs (and Scarborough Shoals) exclusion
from the Philippine archipelagic baselines results in the loss of about 15,000 square nautical miles of
territorial waters, prejudicing the livelihood of subsistence fishermen.
28
A comparison of the
configuration of the baselines drawn under RA 3046 and RA 9522 and the extent of maritime space
encompassed by each law, coupled with a reading of the text of RA 9522 and its congressional
deliberations, vis--vis the Philippines obligations under UNCLOS III, belie this view.

The configuration of the baselines drawn under RA 3046 and RA 9522 shows that RA 9522 merely
followed the basepoints mapped by RA 3046, save for at least nine basepoints that RA 9522 skipped
to optimize the location of basepoints and adjust the length of one baseline (and thus comply with
UNCLOS IIIs limitation on the maximum length of baselines). Under RA 3046, as under RA 9522, the
KIG and the Scarborough Shoal lie outside of the baselines drawn around the Philippine
archipelago. This undeniable cartographic fact takes the wind out of petitioners argument
branding RA 9522 as a statutory renunciation of the Philippines claim over the KIG, assuming that
baselines are relevant for this purpose.

Petitioners assertion of loss of about 15,000 square nautical miles of territorial waters under RA 9522
is similarly unfounded both in fact and law. On the contrary, RA 9522, by optimizing the location of
basepoints, increased the Philippines total maritime space (covering its internal waters, territorial
sea and exclusive economic zone) by 145,216 square nautical miles, as shown in the table below:
29

Extent of maritime area using RA 3046,
as amended, taking into account the
Treaty of Paris delimitation (in square
nautical miles)
Extent of maritime area using
RA 9522, taking into account
UNCLOS III (in square nautical
miles)
5

Internal or archipelagic
waters

166,858

171,435
Territorial Sea 274,136 32,106
Exclusive Economic
Zone

382,669
TOTAL 440,994 586,210

Thus, as the map below shows, the reach of the exclusive economic zone drawn under RA 9522
even extends way beyond the waters covered by the rectangular demarcation under the Treaty of
Paris. Of course, where there are overlapping exclusive economic zones of opposite or adjacent
States, there will have to be a delineation of maritime boundaries in accordance with UNCLOS III.
30


Further, petitioners argument that the KIG now lies outside Philippine territory because the baselines
that RA 9522 draws do not enclose the KIG is negated by RA 9522 itself. Section 2 of the law commits
to text the Philippines continued claim of sovereignty and jurisdiction over the KIG and the
Scarborough Shoal:

SEC. 2. The baselines in the following areas over which the Philippines likewise
exercises sovereignty and jurisdiction shall be determined as Regime of Islands under the
Republic of the Philippines consistent with Article 121 of the United Nations Convention on the
Law of the Sea (UNCLOS):
a) The Kalayaan Island Group as constituted under Presidential Decree No. 1596 and
b) Bajo de Masinloc, also known as Scarborough Shoal. (Emphasis supplied)


Had Congress in RA 9522 enclosed the KIG and the Scarborough Shoal as part of the
Philippine archipelago, adverse legal effects would have ensued. The Philippines would have
committed a breach of two provisions of UNCLOS III. First, Article 47 (3) of UNCLOS III requires that
[t]he drawing of such baselines shall not depart to any appreciable extent from the general
configuration of the archipelago. Second, Article 47 (2) of UNCLOS III requires that the length of
the baselines shall not exceed 100 nautical miles, save for three per cent (3%) of the total number
of baselines which can reach up to 125 nautical miles.
31


Although the Philippines has consistently claimed sovereignty over the KIG
32
and the
Scarborough Shoal for several decades, these outlying areas are located at an appreciable
distance from the nearest shoreline of the Philippine archipelago,
33
such that any straight baseline
loped around them from the nearest basepoint will inevitably depart to an appreciable extent
from the general configuration of the archipelago.

The principal sponsor of RA 9522 in the Senate, Senator Miriam Defensor-Santiago, took pains
to emphasize the foregoing during the Senate deliberations:

What we call the Kalayaan Island Group or what the rest of the world call[] the Spratlys
and the Scarborough Shoal are outside our archipelagic baseline becauseif we put them
inside our baselines we might be accused of violating the provision of international law which
states: The drawing of such baseline shall not depart to any appreciable extent from the
general configuration of the archipelago. So sa loob ng ating baseline, dapat magkalapit
ang mga islands. Dahil malayo ang Scarborough Shoal, hindi natin masasabing malapit sila
sa atin although we are still allowed by international law to claim them as our own.
6


This is called contested islands outside our configuration. We see that our archipelago is
defined by the orange line which [we] call[] archipelagic baseline. Ngayon, tingnan ninyo
ang maliit na circle doon sa itaas, that is Scarborough Shoal, itong malaking circle sa ibaba,
that is Kalayaan Group or the Spratlys. Malayo na sila sa ating archipelago kaya kung ilihis pa
natin ang dating archipelagic baselines para lamang masama itong dalawang circles, hindi
na sila magkalapit at baka hindi na tatanggapin ng United Nations because of the rule that it
should follow the natural configuration of the archipelago.
34
(Emphasis supplied)


Similarly, the length of one baseline that RA 3046 drew exceeded UNCLOS IIIs limits. The need
to shorten this baseline, and in addition, to optimize the location of basepoints using current maps,
became imperative as discussed by respondents:

[T]he amendment of the baselines law was necessary to enable the Philippines to
draw the outer limits of its maritime zones including the extended continental shelf in the
manner provided by Article 47 of [UNCLOS III]. As defined by R.A. 3046, as amended by R.A.
5446, the baselines suffer from some technical deficiencies, to wit:

1. The length of the baseline across Moro Gulf (from Middle of 3 Rock Awash to Tongquil Point)
is 140.06 nautical miles x x x. This exceeds the maximum length allowed under Article 47(2) of
the [UNCLOS III], which states that The length of such baselines shall not exceed 100 nautical
miles, except that up to 3 per cent of the total number of baselines enclosing any
archipelago may exceed that length, up to a maximum length of 125 nautical miles.
2. The selection of basepoints is not optimal. At least 9 basepoints can be skipped or deleted
from the baselines system. This will enclose an additional 2,195 nautical miles of water.
3. Finally, the basepoints were drawn from maps existing in 1968, and not established by
geodetic survey methods. Accordingly, some of the points, particularly along the west coasts
of Luzon down to Palawan were later found to be located either inland or on water, not on
low-water line and drying reefs as prescribed by Article 47.
35



Hence, far from surrendering the Philippines claim over the KIG and the Scarborough Shoal,
Congress decision to classify the KIG and the Scarborough Shoal as Regime[s] of Islands under
the Republic of the Philippines consistent with Article 121
36
of UNCLOS III manifests the Philippine
States responsible observance of its pacta sunt servanda obligation under UNCLOS III. Under Article
121 of UNCLOS III, any naturally formed area of land, surrounded by water, which is above water at
high tide, such as portions of the KIG, qualifies under the category of regime of islands, whose
islands generate their own applicable maritime zones.
37


Statutory Claim Over Sabah under
RA 5446 Retained

Petitioners argument for the invalidity of RA 9522 for its failure to textualize the Philippines claim
over Sabah in North Borneo is also untenable. Section 2 of RA 5446, which RA 9522 did not repeal,
keeps open the door for drawing the baselines of Sabah:

Section 2. The definition of the baselines of the territorial sea of the Philippine
Archipelago as provided in this Act is without prejudice to the delineation of the baselines of
the territorial sea around the territory of Sabah, situated in North Borneo, over which the
Republic of the Philippines has acquired dominion and sovereignty. (Emphasis supplied)


7

UNCLOS III and RA 9522 not Incompatible with the Constitutions Delineation of Internal Waters

As their final argument against the validity of RA 9522, petitioners contend that the law
unconstitutionally converts internal waters into archipelagic waters, hence subjecting these waters
to the right of innocent and sea lanes passage under UNCLOS III, including overflight. Petitioners
extrapolate that these passage rights indubitably expose Philippine internal waters to nuclear and
maritime pollution hazards, in violation of the Constitution.
38


Whether referred to as Philippine internal waters under Article I of the Constitution
39
or as
archipelagic waters under UNCLOS III (Article 49 [1]), the Philippines exercises sovereignty over the
body of water lying landward of the baselines, including the air space over it and the submarine
areas underneath. UNCLOS III affirms this:

Article 49. Legal status of archipelagic waters, of the air space over archipelagic
waters and of their bed and subsoil.

1. The sovereignty of an archipelagic State extends to the waters enclosed by the
archipelagic baselines drawn in accordance with article 47, described as
archipelagic waters, regardless of their depth or distance from the coast.
2. This sovereignty extends to the air space over the archipelagic waters, as well
as to their bed and subsoil, and the resources contained therein.
x x x x

4. The regime of archipelagic sea lanes passage established in this Part shall not in
other respects affect the status of the archipelagic waters, including the sea lanes, or the
exercise by the archipelagic State of its sovereignty over such waters and their air space, bed
and subsoil, and the resources contained therein. (Emphasis supplied)

The fact of sovereignty, however, does not preclude the operation of municipal and international
law norms subjecting the territorial sea or archipelagic waters to necessary, if not marginal, burdens
in the interest of maintaining unimpeded, expeditious international navigation, consistent with the
international law principle of freedom of navigation. Thus, domestically, the political branches of the
Philippine government, in the competent discharge of their constitutional powers, may pass
legislation designating routes within the archipelagic waters to regulate innocent and sea lanes
passage.
40
Indeed, bills drawing nautical highways for sea lanes passage are now pending in
Congress.
41


In the absence of municipal legislation, international law norms, now codified in UNCLOS III,
operate to grant innocent passage rights over the territorial sea or archipelagic waters, subject to
the treatys limitations and conditions for their exercise.
42
Significantly, the right of innocent passage
is a customary international law,
43
thus automatically incorporated in the corpus of Philippine
law.
44
No modern State can validly invoke its sovereignty to absolutely forbid innocent passage that
is exercised in accordance with customary international law without risking retaliatory measures from
the international community.
The fact that for archipelagic States, their archipelagic waters are subject to both the right of
innocent passage and sea lanes passage
45
does not place them in lesser footing vis--
vis continental coastal States which are subject, in their territorial sea, to the right of innocent
passage and the right of transit passage through international straits. The imposition of these
passage rights through archipelagic waters under UNCLOS III was a concession by archipelagic
States, in exchange for their right to claim all the waters landward of their baselines, regardless of
their depth or distance from the coast, as archipelagic waters subject to their territorial sovereignty.
More importantly, the recognition of archipelagic States archipelago and the waters enclosed by
their baselines as one cohesive entity prevents the treatment of their islands as separate islands
8

under UNCLOS III.
46
Separate islands generate their own maritime zones, placing the waters
between islands separated by more than 24 nautical miles beyond the States territorial sovereignty,
subjecting these waters to the rights of other States under UNCLOS III.
47



Petitioners invocation of non-executory constitutional provisions in Article II (Declaration of
Principles and State Policies)
48
must also fail. Our present state of jurisprudence considers the
provisions in Article II as mere legislative guides, which, absent enabling legislation, do not embody
judicially enforceable constitutional rights x x x.
49
Article II provisions serve as guides in formulating
and interpreting implementing legislation, as well as in interpreting executory provisions of the
Constitution. Although Oposa v. Factoran
50
treated the right to a healthful and balanced ecology
under Section 16 of Article II as an exception, the present petition lacks factual basis to substantiate
the claimed constitutional violation. The other provisions petitioners cite, relating to the protection of
marine wealth (Article XII, Section 2, paragraph 2
51
) and subsistence fishermen (Article XIII, Section
7
52
), are not violated by RA 9522.

In fact, the demarcation of the baselines enables the Philippines to delimit its exclusive
economic zone, reserving solely to the Philippines the exploitation of all living and non-living
resources within such zone. Such a maritime delineation binds the international community since the
delineation is in strict observance of UNCLOS III. If the maritime delineation is contrary to UNCLOS III,
the international community will of course reject it and will refuse to be bound by it.

UNCLOS III favors States with a long coastline like the Philippines. UNCLOS III creates a sui
generis maritime space the exclusive economic zone in waters previously part of the high seas.
UNCLOS III grants new rights to coastal States to exclusively exploit the resources found within this
zone up to 200 nautical miles.
53
UNCLOS III, however, preserves the traditional freedom of navigation
of other States that attached to this zone beyond the territorial sea before UNCLOS III.

RA 9522 and the Philippines Maritime Zones

Petitioners hold the view that, based on the permissive text of UNCLOS III, Congress was not
bound to pass RA 9522.
54
We have looked at the relevant provision of UNCLOS III
55
and we find
petitioners reading plausible. Nevertheless, the prerogative of choosing this option belongs to
Congress, not to this Court. Moreover, the luxury of choosing this option comes at a very steep price.
Absent an UNCLOS III compliant baselines law, an archipelagic State like the Philippines will find itself
devoid of internationally acceptable baselines from where the breadth of its maritime zones and
continental shelf is measured. This is recipe for a two-fronted disaster: first, it sends an open invitation
to the seafaring powers to freely enter and exploit the resources in the waters and submarine areas
around our archipelago; and second, it weakens the countrys case in any international dispute
over Philippine maritime space. These are consequences Congress wisely avoided.

The enactment of UNCLOS III compliant baselines law for the Philippine archipelago and
adjacent areas, as embodied in RA 9522, allows an internationally-recognized delimitation of the
breadth of the Philippines maritime zones and continental shelf. RA 9522 is therefore a most vital
step on the part of the Philippines in safeguarding its maritime zones, consistent with the Constitution
and our national interest.

WHEREFORE, we DISMISS the petition.

SO ORDERED.

9

G.R. No. 183591 October 14, 2008
THE PROVINCE OF NORTH COTABATO, duly represented by GOVERNOR JESUS SACDALAN and/or
VICE-GOVERNOR EMMANUEL PIOL, for and in his own behalf, petitioners,
vs.
THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE PANEL ON ANCESTRAL DOMAIN (GRP),
, respondents.
x--------------------------------------------x
D E C I S I O N
CARPIO MORALES, J.:
Subject of these consolidated cases is the extent of the powers of the President in pursuing the
peace process.While the facts surrounding this controversy center on the armed conflict in
Mindanao between the government and the Moro Islamic Liberation Front (MILF), the legal issue
involved has a bearing on all areas in the country where there has been a long-standing armed
conflict. Yet again, the Court is tasked to perform a delicate balancing act. It must
uncompromisingly delineate the bounds within which the President may lawfully exercise her
discretion, but it must do so in strict adherence to the Constitution, lest its ruling unduly restricts the
freedom of action vested by that same Constitution in the Chief Executive precisely to enable her to
pursue the peace process effectively.
I. FACTUAL ANTECEDENTS OF THE PETITIONS
On August 5, 2008, the Government of the Republic of the Philippines (GRP) and the MILF, through
the Chairpersons of their respective peace negotiating panels, were scheduled to sign a
Memorandum of Agreement on the Ancestral Domain (MOA-AD) Aspect of the GRP-MILF Tripoli
Agreement on Peace of 2001 in Kuala Lumpur, Malaysia.
The MILF is a rebel group which was established in March 1984 when, under the leadership of the
late Salamat Hashim, it splintered from the Moro National Liberation Front (MNLF) then headed by
Nur Misuari, on the ground, among others, of what Salamat perceived to be the manipulation of the
MNLF away from an Islamic basis towards Marxist-Maoist orientations.
1

The signing of the MOA-AD between the GRP and the MILF was not to materialize, however, for
upon motion of petitioners, specifically those who filed their cases before the scheduled signing of
the MOA-AD, this Court issued a Temporary Restraining Order enjoining the GRP from signing the
same.
The MOA-AD was preceded by a long process of negotiation and the concluding of several prior
agreements between the two parties beginning in 1996, when the GRP-MILF peace negotiations
began. On July 18, 1997, the GRP and MILF Peace Panels signed the Agreement on General
Cessation of Hostilities. The following year, they signed the General Framework of Agreement of
Intent on August 27, 1998.
The Solicitor General, who represents respondents, summarizes the MOA-AD by stating that the same
contained, among others, the commitment of the parties to pursue peace negotiations, protect
and respect human rights, negotiate with sincerity in the resolution and pacific settlement of the
conflict, and refrain from the use of threat or force to attain undue advantage while the peace
negotiations on the substantive agenda are on-going.
2

10

Early on, however, it was evident that there was not going to be any smooth sailing in the GRP-MILF
peace process. Towards the end of 1999 up to early 2000, the MILF attacked a number of
municipalities in Central Mindanao and, in March 2000, it took control of the town hall of
Kauswagan, Lanao del Norte.
3
In response, then President Joseph Estrada declared and carried out
an "all-out-war" against the MILF.
When President Gloria Macapagal-Arroyo assumed office, the military offensive against the MILF
was suspended and the government sought a resumption of the peace talks. The MILF, according
to a leading MILF member, initially responded with deep reservation, but when President Arroyo
asked the Government of Malaysia through Prime Minister Mahathir Mohammad to help convince
the MILF to return to the negotiating table, the MILF convened its Central Committee to seriously
discuss the matter and, eventually, decided to meet with the GRP.
4

The parties met in Kuala Lumpur on March 24, 2001, with the talks being facilitated by the Malaysian
government, the parties signing on the same date the Agreement on the General Framework for the
Resumption of Peace Talks Between the GRP and the MILF. The MILF thereafter suspended all its
military actions.
5

Formal peace talks between the parties were held in Tripoli, Libya from June 20-22, 2001, the
outcome of which was the GRP-MILF Tripoli Agreement on Peace (Tripoli Agreement 2001)
containing the basic principles and agenda on the following aspects of the
negotiation: Security Aspect, Rehabilitation Aspect, and Ancestral Domain Aspect. With regard to
the Ancestral Domain Aspect, the parties in Tripoli Agreement 2001 simply agreed "that the same be
discussed further by the Parties in their next meeting."
A second round of peace talks was held in Cyberjaya, Malaysia on August 5-7, 2001 which ended
with the signing of the Implementing Guidelines on the Security Aspect of the Tripoli Agreement 2001
leading to a ceasefire status between the parties. This was followed by the Implementing Guidelines
on the Humanitarian Rehabilitation and Development Aspects of the Tripoli Agreement 2001, which
was signed on May 7, 2002 at Putrajaya, Malaysia. Nonetheless, there were many incidence of
violence between government forces and the MILF from 2002 to 2003.
Meanwhile, then MILF Chairman Salamat Hashim passed away on July 13, 2003 and he was
replaced by Al Haj Murad, who was then the chief peace negotiator of the MILF. Murad's position as
chief peace negotiator was taken over by Mohagher Iqbal.
6

In 2005, several exploratory talks were held between the parties in Kuala Lumpur, eventually leading
to the crafting of the draft MOA-AD in its final form, which, as mentioned, was set to be signed last
August 5, 2008.
II. STATEMENT OF THE PROCEEDINGS
Before the Court is what is perhaps the most contentious "consensus" ever embodied in an
instrument - the MOA-AD which is assailed principally by the present petitions bearing docket
numbers 183591, 183752, 183893, 183951 and 183962.
Commonly impleaded as respondents are the GRP Peace Panel on Ancestral Domain
7
and the
Presidential Adviser on the Peace Process (PAPP) Hermogenes Esperon, Jr.
On July 23, 2008, the Province of North Cotabato
8
and Vice-Governor Emmanuel Piol filed a
petition, docketed as G.R. No. 183591, for Mandamus and Prohibition with Prayer for the Issuance of
Writ of Preliminary Injunction and Temporary Restraining Order.
9
Invoking the right to information on
matters of public concern, petitioners seek to compel respondents to disclose and furnish them the
11

complete and official copies of the MOA-AD including its attachments, and to prohibit the slated
signing of the MOA-AD, pending the disclosure of the contents of the MOA-AD and the holding of a
public consultation thereon. Supplementarily, petitioners pray that the MOA-AD be declared
unconstitutional.
10

This initial petition was followed by another one, docketed as G.R. No. 183752, also for Mandamus
and Prohibition
11
filed by the City of Zamboanga,
12
Mayor Celso Lobregat, Rep. Ma. Isabelle
Climaco and Rep. Erico Basilio Fabian who likewise pray for similar injunctive reliefs. Petitioners herein
moreover pray that the City of Zamboanga be excluded from the Bangsamoro Homeland and/or
Bangsamoro Juridical Entity and, in the alternative, that the MOA-AD be declared null and void.
By Resolution of August 4, 2008, the Court issued a Temporary Restraining Order commanding and
directing public respondents and their agents to cease and desist from formally signing the MOA-
AD.
13
The Court also required the Solicitor General to submit to the Court and petitioners the official
copy of the final draft of the MOA-AD,
14
to which she complied.
15

Meanwhile, the City of Iligan
16
filed a petition for Injunction and/or Declaratory Relief, docketed
as G.R. No. 183893, praying that respondents be enjoined from signing the MOA-AD or, if the same
had already been signed, from implementing the same, and that the MOA-AD be declared
unconstitutional. Petitioners herein additionally implead Executive Secretary Eduardo Ermita as
respondent.
The Province of Zamboanga del Norte,
17
Governor Rolando Yebes, Vice-Governor Francis Olvis, Rep.
Cecilia Jalosjos-Carreon, Rep. Cesar Jalosjos, and the members
18
of the Sangguniang Panlalawigan
of Zamboanga del Norte filed on August 15, 2008 a petition for Certiorari, Mandamus and
Prohibition,
19
docketed as G.R. No. 183951. They pray, inter alia, that the MOA-AD be declared null
and void and without operative effect, and that respondents be enjoined from executing the MOA-
AD.
On August 19, 2008, Ernesto Maceda, Jejomar Binay, and Aquilino Pimentel III filed a petition for
Prohibition,
20
docketed as G.R. No. 183962, praying for a judgment prohibiting and permanently
enjoining respondents from formally signing and executing the MOA-AD and or any other
agreement derived therefrom or similar thereto, and nullifying the MOA-AD for being
unconstitutional and illegal. Petitioners herein additionally implead as respondent the MILF Peace
Negotiating Panel represented by its Chairman Mohagher Iqbal.
Various parties moved to intervene and were granted leave of court to file their petitions-
/comments-in-intervention. Petitioners-in-Intervention include Senator Manuel A. Roxas, former
Senate President Franklin Drilon and Atty. Adel Tamano, the City of Isabela
21
and Mayor Cherrylyn
Santos-Akbar, the Province of Sultan Kudarat
22
and Gov. Suharto Mangudadatu, the Municipality of
Linamon in Lanao del Norte,
23
Ruy Elias Lopez of Davao City and of the Bagobo tribe, Sangguniang
Panlungsod member Marino Ridao and businessman Kisin Buxani, both of Cotabato City; and
lawyers Carlo Gomez, Gerardo Dilig, Nesario Awat, Joselito Alisuag, Richalex Jagmis, all of Palawan
City. The Muslim Legal Assistance Foundation, Inc. (Muslaf) and the Muslim Multi-Sectoral Movement
for Peace and Development (MMMPD) filed their respective Comments-in-Intervention.
By subsequent Resolutions, the Court ordered the consolidation of the petitions. Respondents filed
Comments on the petitions, while some of petitioners submitted their respective Replies.
Respondents, by Manifestation and Motion of August 19, 2008, stated that the Executive
Department shall thoroughly review the MOA-AD and pursue further negotiations to address the
issues hurled against it, and thus moved to dismiss the cases. In the succeeding exchange of
pleadings, respondents' motion was met with vigorous opposition from petitioners.
12

The cases were heard on oral argument on August 15, 22 and 29, 2008 that tackled the following
principal issues:
1. Whether the petitions have become moot and academic
(i) insofar as the mandamus aspect is concerned, in view of the disclosure of official
copies of the final draft of the Memorandum of Agreement (MOA); and
(ii) insofar as the prohibition aspect involving the Local Government Units is concerned,
if it is considered that consultation has become fait accompli with the finalization of
the draft;
2. Whether the constitutionality and the legality of the MOA is ripe for adjudication;
3. Whether respondent Government of the Republic of the Philippines Peace Panel
committed grave abuse of discretion amounting to lack or excess of jurisdiction when it
negotiated and initiated the MOA vis--vis ISSUES Nos. 4 and 5;
4. Whether there is a violation of the people's right to information on matters of public
concern (1987 Constitution, Article III, Sec. 7) under a state policy of full disclosure of all its
transactions involving public interest (1987 Constitution, Article II, Sec. 28) including public
consultation under Republic Act No. 7160 (LOCAL GOVERNMENT CODE OF 1991)[;]
If it is in the affirmative, whether prohibition under Rule 65 of the 1997 Rules of Civil Procedure
is an appropriate remedy;
5. Whether by signing the MOA, the Government of the Republic of the Philippines would be
BINDING itself
a) to create and recognize the Bangsamoro Juridical Entity (BJE) as a separate state,
or a juridical, territorial or political subdivision not recognized by law;
b) to revise or amend the Constitution and existing laws to conform to the MOA;
c) to concede to or recognize the claim of the Moro Islamic Liberation Front for
ancestral domain in violation of Republic Act No. 8371 (THE INDIGENOUS PEOPLES
RIGHTS ACT OF 1997), particularly Section 3(g) & Chapter VII (DELINEATION,
RECOGNITION OF ANCESTRAL DOMAINS)[;]
If in the affirmative, whether the Executive Branch has the authority to so bind the
Government of the Republic of the Philippines;
6. Whether the inclusion/exclusion of the Province of North Cotabato, Cities of Zamboanga,
Iligan and Isabela, and the Municipality of Linamon, Lanao del Norte in/from the areas
covered by the projected Bangsamoro Homeland is a justiciable question; and
7. Whether desistance from signing the MOA derogates any prior valid commitments of the
Government of the Republic of the Philippines.
24

The Court, thereafter, ordered the parties to submit their respective Memoranda. Most of the parties
submitted their memoranda on time.
13

III. OVERVIEW OF THE MOA-AD
As a necessary backdrop to the consideration of the objections raised in the subject five petitions
and six petitions-in-intervention against the MOA-AD, as well as the two comments-in-intervention in
favor of the MOA-AD, the Court takes an overview of the MOA.
The MOA-AD identifies the Parties to it as the GRP and the MILF.
Under the heading "Terms of Reference" (TOR), the MOA-AD includes not only four earlier
agreements between the GRP and MILF, but also two agreements between the GRP and the MNLF:
the 1976 Tripoli Agreement, and the Final Peace Agreement on the Implementation of the 1976
Tripoli Agreement, signed on September 2, 1996 during the administration of President Fidel Ramos.
The MOA-AD also identifies as TOR two local statutes - the organic act for the Autonomous Region in
Muslim Mindanao (ARMM)
25
and the Indigenous Peoples Rights Act (IPRA),
26
and several
international law instruments - the ILO Convention No. 169 Concerning Indigenous and Tribal Peoples
in Independent Countries in relation to the UN Declaration on the Rights of the Indigenous Peoples,
and the UN Charter, among others.
The MOA-AD includes as a final TOR the generic category of "compact rights entrenchment
emanating from the regime of dar-ul-mua'hada (or territory under compact) and dar-ul-sulh (or
territory under peace agreement) that partakes the nature of a treaty device."
During the height of the Muslim Empire, early Muslim jurists tended to see the world through a simple
dichotomy: there was the dar-ul-Islam (the Abode of Islam) and dar-ul-harb (the Abode of War). The
first referred to those lands where Islamic laws held sway, while the second denoted those lands
where Muslims were persecuted or where Muslim laws were outlawed or ineffective.
27
This way of
viewing the world, however, became more complex through the centuries as the Islamic world
became part of the international community of nations.
As Muslim States entered into treaties with their neighbors, even with distant States and inter-
governmental organizations, the classical division of the world into dar-ul-Islam and dar-ul-
harb eventually lost its meaning. New terms were drawn up to describe novel ways of perceiving
non-Muslim territories. For instance, areas like dar-ul-mua'hada (land of compact) and dar-ul-
sulh (land of treaty) referred to countries which, though under a secular regime, maintained
peaceful and cooperative relations with Muslim States, having been bound to each other by treaty
or agreement. Dar-ul-aman (land of order), on the other hand, referred to countries which, though
not bound by treaty with Muslim States, maintained freedom of religion for Muslims.
28

It thus appears that the "compact rights entrenchment" emanating from the regime of dar-ul-
mua'hada and dar-ul-sulh simply refers to all other agreements between the MILF and the Philippine
government - the Philippines being the land of compact and peace agreement - that partake of
the nature of a treaty device, "treaty" being broadly defined as "any solemn agreement in writing
that sets out understandings, obligations, and benefits for both parties which provides for a
framework that elaborates the principles declared in the [MOA-AD]."
29

The MOA-AD states that the Parties "HAVE AGREED AND ACKNOWLEDGED AS FOLLOWS," and starts
with its main body.
The main body of the MOA-AD is divided into four strands, namely, Concepts and Principles,
Territory, Resources, and Governance.
A. CONCEPTS AND PRINCIPLES
14

This strand begins with the statement that it is "the birthright of all Moros and all Indigenous peoples
of Mindanao to identify themselves and be accepted as Bangsamoros.'" It defines "Bangsamoro
people" as the natives or original inhabitants of Mindanao and its adjacent islands including
Palawan and the Sulu archipelago at the time of conquest or colonization, and their
descendants whether mixed or of full blood, including their spouses.
30

Thus, the concept of "Bangsamoro," as defined in this strand of the MOA-AD, includes not only
"Moros" as traditionally understood even by Muslims,
31
but all indigenous peoples of Mindanao and
its adjacent islands. The MOA-AD adds that the freedom of choice of indigenous peoples shall be
respected. What this freedom of choice consists in has not been specifically defined.
The MOA-AD proceeds to refer to the "Bangsamoro homeland," the ownership of which is vested
exclusively in the Bangsamoro people by virtue of their prior rights of occupation.
32
Both parties to
the MOA-AD acknowledge that ancestral domain does not form part of the public domain.
33

The Bangsamoro people are acknowledged as having the right to self-governance, which right is
said to be rooted on ancestral territoriality exercised originally under the suzerain authority of their
sultanates and the Pat a Pangampong ku Ranaw. The sultanates were described as states or
"karajaan/kadatuan" resembling a body politic endowed with all the elements of a nation-state in
the modern sense.
34

The MOA-AD thus grounds the right to self-governance of the Bangsamoro people on the past
suzerain authority of the sultanates. As gathered, the territory defined as the Bangsamoro homeland
was ruled by several sultanates and, specifically in the case of the Maranao, by the Pat a
Pangampong ku Ranaw, a confederation of independent principalities (pangampong) each ruled
by datus and sultans, none of whom was supreme over the others.
35

The MOA-AD goes on to describe the Bangsamoro people as "the First Nation' with defined territory
and with a system of government having entered into treaties of amity and commerce with foreign
nations."
The term "First Nation" is of Canadian origin referring to the indigenous peoples of that territory,
particularly those known as Indians. In Canada, each of these indigenous peoples is equally entitled
to be called "First Nation," hence, all of them are usually described collectively by the plural "First
Nations."
36
To that extent, the MOA-AD, by identifying the Bangsamoro people as "the First Nation" -
suggesting its exclusive entitlement to that designation - departs from the Canadian usage of the
term.
The MOA-AD then mentions for the first time the "Bangsamoro Juridical Entity" (BJE) to which it
grants the authority and jurisdiction over the Ancestral Domain and Ancestral Lands of the
Bangsamoro.
37

B. TERRITORY
The territory of the Bangsamoro homeland is described as the land mass as well as the maritime,
terrestrial, fluvial and alluvial domains, including the aerial domain and the atmospheric space
above it, embracing the Mindanao-Sulu-Palawan geographic region.
38

More specifically, the core of the BJE is defined as the present geographic area of the ARMM - thus
constituting the following areas: Lanao del Sur, Maguindanao, Sulu, Tawi-Tawi, Basilan, and Marawi
City. Significantly, this core also includes certain municipalities of Lanao del Norte that voted for
inclusion in the ARMM in the 2001 plebiscite.
39

15

Outside of this core, the BJE is to cover other provinces, cities, municipalities and barangays, which
are grouped into two categories, Category A and Category B. Each of these areas is to be
subjected to a plebiscite to be held on different dates, years apart from each other. Thus, Category
A areas are to be subjected to a plebiscite not later than twelve (12) months following the signing of
the MOA-AD.
40
Category B areas, also called "Special Intervention Areas," on the other hand, are to
be subjected to a plebiscite twenty-five (25) years from the signing of a separate agreement - the
Comprehensive Compact.
41

The Parties to the MOA-AD stipulate that the BJE shall have jurisdiction over all natural resources
within its "internal waters," defined as extending fifteen (15) kilometers from the coastline of the BJE
area;
42
that the BJE shall also have "territorial waters," which shall stretch beyond the BJE internal
waters up to the baselines of the Republic of the Philippines (RP) south east and south west of
mainland Mindanao; and that within these territorialwaters, the BJE and the "Central
Government" (used interchangeably with RP) shall exercise joint jurisdiction, authority and
management over all natural resources.
43
Notably, the jurisdiction over the internal waters is not
similarly described as "joint."
The MOA-AD further provides for the sharing of minerals on the territorial waters between the Central
Government and the BJE, in favor of the latter, through production sharing and economic
cooperation agreement.
44
The activities which the Parties are allowed to conduct on
the territorial waters are enumerated, among which are the exploration and utilization of natural
resources, regulation of shipping and fishing activities, and the enforcement of police and safety
measures.
45
There is no similar provision on the sharing of minerals and allowed activities with respect
to the internal waters of the BJE.
C. RESOURCES
The MOA-AD states that the BJE is free to enter into any economic cooperation and trade relations
with foreign countries and shall have the option to establish trade missions in those countries. Such
relationships and understandings, however, are not to include aggression against the GRP. The BJE
may also enter into environmental cooperation agreements.
46

The external defense of the BJE is to remain the duty and obligation of the Central Government. The
Central Government is also bound to "take necessary steps to ensure the BJE's participation in
international meetings and events" like those of the ASEAN and the specialized agencies of the UN.
The BJE is to be entitled to participate in Philippine official missions and delegations for the
negotiation of border agreements or protocols for environmental protection and equitable sharing
of incomes and revenues involving the bodies of water adjacent to or between the islands forming
part of the ancestral domain.
47

With regard to the right of exploring for, producing, and obtaining all potential sources of energy,
petroleum, fossil fuel, mineral oil and natural gas, the jurisdiction and control thereon is to be vested
in the BJE "as the party having control within its territorial jurisdiction." This right carries the proviso that,
"in times of national emergency, when public interest so requires," the Central Government may, for
a fixed period and under reasonable terms as may be agreed upon by both Parties, assume or
direct the operation of such resources.
48

The sharing between the Central Government and the BJE of total production pertaining to natural
resources is to be 75:25 in favor of the BJE.
49

The MOA-AD provides that legitimate grievances of the Bangsamoro people arising from any unjust
dispossession of their territorial and proprietary rights, customary land tenures, or their marginalization
16

shall be acknowledged. Whenever restoration is no longer possible, reparation is to be in such form
as mutually determined by the Parties.
50

The BJE may modify or cancel the forest concessions, timber licenses, contracts or agreements,
mining concessions, Mineral Production and Sharing Agreements (MPSA), Industrial Forest
Management Agreements (IFMA), and other land tenure instruments granted by the Philippine
Government, including those issued by the present ARMM.
51

D. GOVERNANCE
The MOA-AD binds the Parties to invite a multinational third-party to observe and monitor the
implementation of the Comprehensive Compact. This compact is to embody the "details for the
effective enforcement" and "the mechanisms and modalities for the actual implementation" of the
MOA-AD. The MOA-AD explicitly provides that the participation of the third party shall not in any
way affect the status of the relationship between the Central Government and the BJE.
52

The "associative" relationship between the Central Government and the BJE
The MOA-AD describes the relationship of the Central Government and the BJE as "associative,"
characterized by shared authority and responsibility. And it states that the structure of governance is
to be based on executive, legislative, judicial, and administrative institutions with defined powers
and functions in the Comprehensive Compact.
The MOA-AD provides that its provisions requiring "amendments to the existing legal framework" shall
take effect upon signing of the Comprehensive Compact and upon effecting the aforesaid
amendments, with due regard to the non-derogation of prior agreements and within the stipulated
timeframe to be contained in the Comprehensive Compact. As will be discussed later, much of the
present controversy hangs on the legality of this provision.
The BJE is granted the power to build, develop and maintain its own institutions inclusive of civil
service, electoral, financial and banking, education, legislation, legal, economic, police and internal
security force, judicial system and correctional institutions, the details of which shall be discussed in
the negotiation of the comprehensive compact.
As stated early on, the MOA-AD was set to be signed on August 5, 2008 by Rodolfo Garcia and
Mohagher Iqbal, Chairpersons of the Peace Negotiating Panels of the GRP and the MILF,
respectively. Notably, the penultimate paragraph of the MOA-AD identifies the signatories as "the
representatives of the Parties," meaning the GRP and MILF themselves, and not merely of the
negotiating panels.
53
In addition, the signature page of the MOA-AD states that it is "WITNESSED BY"
Datuk Othman Bin Abd Razak, Special Adviser to the Prime Minister of Malaysia, "ENDORSED BY"
Ambassador Sayed Elmasry, Adviser to Organization of the Islamic Conference (OIC) Secretary
General and Special Envoy for Peace Process in Southern Philippines, and SIGNED "IN THE PRESENCE
OF" Dr. Albert G. Romulo, Secretary of Foreign Affairs of RP and Dato' Seri Utama Dr. Rais Bin Yatim,
Minister of Foreign Affairs, Malaysia, all of whom were scheduled to sign the Agreement last August
5, 2008.
Annexed to the MOA-AD are two documents containing the respective lists cum maps of the
provinces, municipalities, and barangays under Categories A and B earlier mentioned in the
discussion on the strand on TERRITORY.

IV. PROCEDURAL ISSUES
17

A. RIPENESS
The power of judicial review is limited to actual cases or controversies.
54
Courts decline to issue
advisory opinions or to resolve hypothetical or feigned problems, or mere academic questions.
55
The
limitation of the power of judicial review to actual cases and controversies defines the role assigned
to the judiciary in a tripartite allocation of power, to assure that the courts will not intrude into areas
committed to the other branches of government.
56

An actual case or controversy 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. There must be a contrariety of legal rights that can be interpreted and enforced on the
basis of existing law and jurisprudence.
57
The Court can decide the constitutionality of an act or
treaty only when a proper case between opposing parties is submitted for judicial determination.
58

Related to the requirement of an actual case or controversy is the requirement of ripeness. A
question is ripe for adjudication when the act being challenged has had a direct adverse effect on
the individual challenging it.
59
For a case to be considered ripe for adjudication, it is a prerequisite
that something had then been accomplished or performed by either branch before a court may
come into the picture,
60
and the petitioner must allege the existence of an immediate or threatened
injury to itself as a result of the challenged action.
61
He must show that he has sustained or is
immediately in danger of sustaining some direct injury as a result of the act complained of.
62

The Solicitor General argues that there is no justiciable controversy that is ripe for judicial review in
the present petitions, reasoning that
The unsigned MOA-AD is simply a list of consensus points subject to further negotiations and
legislative enactments as well as constitutional processes aimed at attaining a final peaceful
agreement. Simply put, the MOA-AD remains to be a proposal that does not automatically
create legally demandable rights and obligations until the list of operative acts required have
been duly complied with. x x x
x x x x
In the cases at bar, it is respectfully submitted that this Honorable Court has no authority to
pass upon issues based on hypothetical or feigned constitutional problems or interests with no
concrete bases. Considering the preliminary character of the MOA-AD, there are no
concrete acts that could possibly violate petitioners' and intervenors' rights since the acts
complained of are mere contemplated steps toward the formulation of a final peace
agreement. Plainly, petitioners and intervenors' perceived injury, if at all, is merely imaginary
and illusory apart from being unfounded and based on mere conjectures. (Underscoring
supplied)
The Solicitor General cites
63
the following provisions of the MOA-AD:
TERRITORY
x x x x
2. Toward this end, the Parties enter into the following stipulations:
x x x x
18

d. Without derogating from the requirements of prior agreements, the Government stipulates
to conduct and deliver, using all possible legal measures, within twelve (12) months following
the signing of the MOA-AD, a plebiscite covering the areas as enumerated in the list and
depicted in the map as Category A attached herein (the "Annex"). The Annex constitutes an
integral part of this framework agreement. Toward this end, the Parties shall endeavor to
complete the negotiations and resolve all outstanding issues on the Comprehensive
Compact within fifteen (15) months from the signing of the MOA-AD.
x x x x
GOVERNANCE
x x x x
7. The Parties agree that mechanisms and modalities for the actual implementation of this
MOA-AD shall be spelt out in the Comprehensive Compact to mutually take such steps to
enable it to occur effectively.
Any provisions of the MOA-AD requiring amendments to the existing legal framework shall
come into forceupon the signing of a Comprehensive Compact and upon effecting the
necessary changes to the legal framework with due regard to non-derogation of prior
agreements and within the stipulated timeframe to be contained in the Comprehensive
Compact.
64
(Underscoring supplied)
The Solicitor General's arguments fail to persuade.
Concrete acts under the MOA-AD are not necessary to render the present controversy ripe.
In Pimentel, Jr. v. Aguirre,
65
this Court held:
x x x [B]y the mere enactment of the questioned law or the approval of the challenged
action, the dispute is said to have ripened into a judicial controversy even without any other
overt act. Indeed, even a singular violation of the Constitution and/or the law is enough to
awaken judicial duty.
x x x x
By the same token, when an act of the President, who in our constitutional scheme is a
coequal of Congress, is seriously alleged to have infringed the Constitution and the laws x x x
settling the dispute becomes the duty and the responsibility of the courts.
66

In Santa Fe Independent School District v. Doe,
67
the United States Supreme Court held that the
challenge to the constitutionality of the school's policy allowing student-led prayers and speeches
before games was ripe for adjudication, even if no public prayer had yet been led under the policy,
because the policy was being challenged as unconstitutional on its face.
68

That the law or act in question is not yet effective does not negate ripeness. For example, in New
York v. United States,
69
decided in 1992, the United States Supreme Court held that the action by the
State of New York challenging the provisions of the Low-Level Radioactive Waste Policy Act was ripe
for adjudication even if the questioned provision was not to take effect until January 1, 1996,
because the parties agreed that New York had to take immediate action to avoid the provision's
consequences.
70

19

The present petitions pray for Certiorari,
71
Prohibition, and Mandamus. Certiorari and Prohibition are
remedies granted by law when any tribunal, board or officer has acted, in the case of certiorari, or is
proceeding, in the case of prohibition, without or in excess of its jurisdiction or with grave abuse of
discretion amounting to lack or excess of jurisdiction.
72
Mandamus is a remedy granted by law when
any tribunal, corporation, board, officer or person unlawfully neglects the performance of an act
which the law specifically enjoins as a duty resulting from an office, trust, or station, or unlawfully
excludes another from the use or enjoyment of a right or office to which such other is
entitled.
73
Certiorari, Mandamus and Prohibition are appropriate remedies to raise constitutional
issues and to review and/or prohibit/nullify, when proper, acts of legislative and executive officials.
74

The authority of the GRP Negotiating Panel is defined by Executive Order No. 3 (E.O. No. 3), issued
on February 28, 2001.
75
The said executive order requires that "[t]he government's policy framework
for peace, including the systematic approach and the administrative structure for carrying out the
comprehensive peace process x x x be governed by this Executive Order."
76

The present petitions allege that respondents GRP Panel and PAPP Esperon drafted the terms of the
MOA-AD without consulting the local government units or communities affected, nor informing them
of the proceedings. As will be discussed in greater detail later, such omission, by itself, constitutes a
departure by respondents from their mandate under E.O. No. 3.
Furthermore, the petitions allege that the provisions of the MOA-AD violate the Constitution. The
MOA-AD provides that "any provisions of the MOA-AD requiring amendments to the existing legal
framework shall come into force upon the signing of a Comprehensive Compact and upon
effecting the necessary changes to the legal framework," implying an amendment of the
Constitution to accommodate the MOA-AD. This stipulation, in effect,guaranteed to the MILF the
amendment of the Constitution. Such act constitutes another violation of its authority. Again, these
points will be discussed in more detail later.
As the petitions allege acts or omissions on the part of respondent that exceed their authority, by
violating their duties under E.O. No. 3 and the provisions of the Constitution and statutes, the
petitions make a prima facie case for Certiorari, Prohibition, and Mandamus, and an actual case or
controversy ripe for adjudication exists. 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.
77

B. LOCUS STANDI
For a party to have locus standi, one must allege "such a personal stake in the outcome of the
controversy as to assure that concrete adverseness which sharpens the presentation of issues upon
which the court so largely depends for illumination of difficult constitutional questions."
78

Because constitutional cases are often public actions in which the relief sought is likely to affect
other persons, a preliminary question frequently arises as to this interest in the constitutional question
raised.
79

When suing as a citizen, the person complaining must allege that he has been or is about to be
denied some right or privilege to which he is lawfully entitled or that he is about to be subjected to
some burdens or penalties by reason of the statute or act complained of.
80
When the issue concerns
a public right, it is sufficient that the petitioner is a citizen and has an interest in the execution of the
laws.
81

For a taxpayer, one is allowed to sue where there is an assertion that public funds are illegally
disbursed or deflected to an illegal purpose, or that there is a wastage of public funds through the
20

enforcement of an invalid or unconstitutional law.
82
The Court retains discretion whether or not to
allow a taxpayer's suit.
83

In the case of a legislator or member of Congress, an act of the Executive that injures the institution
of Congress causes a derivative but nonetheless substantial injury that can be questioned by
legislators. A member of the House of Representatives has standing to maintain inviolate the
prerogatives, powers and privileges vested by the Constitution in his office.
84

An organization may be granted standing to assert the rights of its members,
85
but the mere
invocation by theIntegrated Bar of the Philippines or any member of the legal profession of the duty
to preserve the rule of law does not suffice to clothe it with standing.
86

As regards a local government unit (LGU), it can seek relief in order to protect or vindicate an
interest of its own, and of the other LGUs.
87

Intervenors, meanwhile, may be given legal standing upon showing of facts that satisfy the
requirements of the law authorizing intervention,
88
such as a legal interest in the matter in litigation,
or in the success of either of the parties.
In any case, the Court has discretion to relax the procedural technicality on locus standi, given the
liberal attitude it has exercised, highlighted in the case of David v. Macapagal-Arroyo,
89
where
technicalities of procedure were brushed aside, the constitutional issues raised being of paramount
public interest or of transcendental importance deserving the attention of the Court in view of their
seriousness, novelty and weight as precedents.
90
The Court's forbearing stance on locus standi on
issues involving constitutional issues has for its purpose the protection of fundamental rights.
In not a few cases, the Court, in keeping with its duty under the Constitution to determine whether
the other branches of government have kept themselves within the limits of the Constitution and the
laws and have not abused the discretion given them, has brushed aside technical rules of
procedure.
91

In the petitions at bar, petitioners Province of North Cotabato (G.R. No. 183591) Province of
Zamboanga del Norte (G.R. No. 183951), City of Iligan (G.R. No. 183893) and City of
Zamboanga (G.R. No. 183752) and petitioners-in-intervention Province of Sultan Kudarat, City of
Isabela and Municipality of Linamon havelocus standi in view of the direct and substantial injury that
they, as LGUs, would suffer as their territories, whether in whole or in part, are to be included in the
intended domain of the BJE. These petitioners allege that they did not vote for their inclusion in the
ARMM which would be expanded to form the BJE territory. Petitioners' legal standing is thus beyond
doubt.
In G.R. No. 183962, petitioners Ernesto Maceda, Jejomar Binay and Aquilino Pimentel III would have
no standing as citizens and taxpayers for their failure to specify that they would be denied some
right or privilege or there would be wastage of public funds. The fact that they are a former Senator,
an incumbent mayor of Makati City, and a resident of Cagayan de Oro, respectively, is of no
consequence. Considering their invocation of the transcendental importance of the issues at hand,
however, the Court grants them standing.
Intervenors Franklin Drilon and Adel Tamano, in alleging their standing as taxpayers, assert that
government funds would be expended for the conduct of an illegal and unconstitutional plebiscite
to delineate the BJE territory. On that score alone, they can be given legal standing. Their allegation
that the issues involved in these petitions are of "undeniable transcendental importance" clothes
them with added basis for their personality to intervene in these petitions.
21

With regard to Senator Manuel Roxas, his standing is premised on his being a member of the Senate
and a citizen to enforce compliance by respondents of the public's constitutional right to be
informed of the MOA-AD, as well as on a genuine legal interest in the matter in litigation, or in the
success or failure of either of the parties. He thus possesses the requisite standing as an intervenor.
With respect to Intervenors Ruy Elias Lopez, as a former congressman of the 3
rd
district of Davao City,
a taxpayer and a member of the Bagobo tribe; Carlo B. Gomez, et al., as members of the IBP
Palawan chapter, citizens and taxpayers; Marino Ridao, as taxpayer, resident and member of
the Sangguniang Panlungsod of Cotabato City; and Kisin Buxani, as taxpayer, they failed to allege
any proper legal interest in the present petitions. Just the same, the Court exercises its discretion to
relax the procedural technicality on locus standi given the paramount public interest in the issues at
hand.
Intervening respondents Muslim Multi-Sectoral Movement for Peace and Development, an
advocacy group for justice and the attainment of peace and prosperity in Muslim Mindanao;
and Muslim Legal Assistance Foundation Inc., a non-government organization of Muslim lawyers,
allege that they stand to be benefited or prejudiced, as the case may be, in the resolution of the
petitions concerning the MOA-AD, and prays for the denial of the petitions on the grounds therein
stated. Such legal interest suffices to clothe them with standing.
B. MOOTNESS
Respondents insist that the present petitions have been rendered moot with the satisfaction of all the
reliefs prayed for by petitioners and the subsequent pronouncement of the Executive Secretary that
"[n]o matter what the Supreme Court ultimately decides[,] the government will not sign the MOA."
92

In lending credence to this policy decision, the Solicitor General points out that the President had
already disbanded the GRP Peace Panel.
93

In David v. Macapagal-Arroyo,
94
this Court held that the "moot and academic" principle not being a
magical formula that automatically dissuades courts in resolving a case, it will decide cases,
otherwise moot and academic, if it finds that (a) there is a grave violation of the Constitution;
95
(b)
the situation is of exceptional character and paramount public interest is involved;
96
(c) the
constitutional issue raised requires formulation of controlling principles to guide the bench, the bar,
and the public;
97
and (d) the case is capable of repetition yet evading review.
98

Another exclusionary circumstance that may be considered is where there is
a voluntary cessation of the activity complained of by the defendant or doer. Thus, once a suit is
filed and the doer voluntarily ceases the challenged conduct, it does not automatically deprive the
tribunal of power to hear and determine the case and does not render the case moot especially
when the plaintiff seeks damages or prays for injunctive relief against the possible recurrence of the
violation.
99

The present petitions fall squarely into these exceptions to thus thrust them into the domain of judicial
review. The grounds cited above in David are just as applicable in the present cases as they were,
not only in David, but also in Province of Batangas v. Romulo
100
and Manalo v. Calderon
101
where
the Court similarly decided them on the merits, supervening events that would ordinarily have
rendered the same moot notwithstanding.
Petitions not mooted
Contrary then to the asseverations of respondents, the non-signing of the MOA-AD and the eventual
dissolution of the GRP Peace Panel did not moot the present petitions. It bears emphasis that the
22

signing of the MOA-AD did not push through due to the Court's issuance of a Temporary Restraining
Order.
Contrary too to respondents' position, the MOA-AD cannot be considered a mere "list of consensus
points," especially given its nomenclature, the need to have it signed or initialed by all the parties
concerned on August 5, 2008, and the far-reaching Constitutional implications of these "consensus
points," foremost of which is the creation of the BJE.
In fact, as what will, in the main, be discussed, there is a commitment on the part of respondents to
amend and effect necessary changes to the existing legal framework for certain provisions of the
MOA-AD to take effect. Consequently, the present petitions are not confined to the terms and
provisions of the MOA-AD, but to other on-going and future negotiations and agreements necessary
for its realization. The petitions have not, therefore, been rendered moot and academic simply by
the public disclosure of the MOA-AD,
102
the manifestation that it will not be signed as well as the
disbanding of the GRP Panel not withstanding.
Petitions are imbued with paramount public interest
There is no gainsaying that the petitions are imbued with paramount public interest, involving a
significant part of the country's territory and the wide-ranging political modifications of affected
LGUs. The assertion that the MOA-AD is subject to further legal enactments including possible
Constitutional amendments more than ever provides impetus for the Court to formulate controlling
principles to guide the bench, the bar, the public and, in this case, the government and its
negotiating entity.
Respondents cite Suplico v. NEDA, et al.
103
where the Court did not "pontificat[e] on issues which no
longer legitimately constitute an actual case or controversy [as this] will do more harm than good to
the nation as a whole."
The present petitions must be differentiated from Suplico. Primarily, in Suplico, what was assailed and
eventually cancelled was a stand-alone government procurement contract for a national
broadband network involving a one-time contractual relation between two parties-the government
and a private foreign corporation. As the issues therein involved specific government procurement
policies and standard principles on contracts, the majority opinion in Suplico found nothing
exceptional therein, the factual circumstances being peculiar only to the transactions and parties
involved in the controversy.
The MOA-AD is part of a series of agreements
In the present controversy, the MOA-AD is a significant part of a series of agreements necessary to
carry out the Tripoli Agreement 2001. The MOA-AD which dwells on the Ancestral Domain Aspect of
said Tripoli Agreement is the third such component to be undertaken following the implementation
of the Security Aspect in August 2001 and the Humanitarian, Rehabilitation and Development
Aspect in May 2002.
Accordingly, even if the Executive Secretary, in his Memorandum of August 28, 2008 to the Solicitor
General, has stated that "no matter what the Supreme Court ultimately decides[,] the government
will not sign the MOA[-AD],"mootness will not set in in light of the terms of the Tripoli Agreement 2001.
Need to formulate principles-guidelines
Surely, the present MOA-AD can be renegotiated or another one will be drawn up to carry out the
Ancestral Domain Aspect of the Tripoli Agreement 2001, in another or in any form, which could
23

contain similar or significantly drastic provisions. While the Court notes the word of the Executive
Secretary that the government "is committed to securing an agreement that is both constitutional
and equitable because that is the only way that long-lasting peace can be assured," it is minded to
render a decision on the merits in the present petitions toformulate controlling principles to guide the
bench, the bar, the public and, most especially, the government in negotiating with the MILF
regarding Ancestral Domain.
Respondents invite the Court's attention to the separate opinion of then Chief Justice Artemio
Panganiban inSanlakas v. Reyes
104
in which he stated that the doctrine of "capable of repetition yet
evading review" can override mootness, "provided the party raising it in a proper case has been
and/or continue to be prejudiced or damaged as a direct result of their issuance." They contend
that the Court must have jurisdiction over the subject matter for the doctrine to be invoked.
The present petitions all contain prayers for Prohibition over which this Court exercises original
jurisdiction. While G.R. No. 183893 (City of Iligan v. GRP) is a petition for Injunction and Declaratory
Relief, the Court will treat it as one for Prohibition as it has far reaching implications and raises
questions that need to be resolved.
105
At all events, the Court has jurisdiction over most if not the rest
of the petitions.
Indeed, the present petitions afford a proper venue for the Court to again apply the doctrine
immediately referred to as what it had done in a number of landmark cases.
106
There is
a reasonable expectation that petitioners, particularly the Provinces of North Cotabato,
Zamboanga del Norte and Sultan Kudarat, the Cities of Zamboanga, Iligan and Isabela, and the
Municipality of Linamon, will again be subjected to the same problem in the future as respondents'
actions are capable of repetition, in another or any form.
It is with respect to the prayers for Mandamus that the petitions have become moot, respondents
having, by Compliance of August 7, 2008, provided this Court and petitioners with official copies of
the final draft of the MOA-AD and its annexes. Too, intervenors have been furnished, or have
procured for themselves, copies of the MOA-AD.
V. SUBSTANTIVE ISSUES
As culled from the Petitions and Petitions-in-Intervention, there are basically two SUBSTANTIVE issues
to be resolved, one relating to the manner in which the MOA-AD was negotiated and finalized, the
other relating to its provisions, viz:
1. Did respondents violate constitutional and statutory provisions on public consultation and the right
to information when they negotiated and later initialed the MOA-AD?
2. Do the contents of the MOA-AD violate the Constitution and the laws?
ON THE FIRST SUBSTANTIVE ISSUE
Petitioners invoke their constitutional right to information on matters of public concern, as provided in
Section 7, Article III on the Bill of Rights:
Sec. 7. The right of the people to information on matters of public concern shall be
recognized. Access to official records, and to documents, and papers pertaining to official
acts, transactions, or decisions, as well as to government research data used as basis for
policy development, shall be afforded the citizen, subject to such limitations as may be
provided by law.
107

24

As early as 1948, in Subido v. Ozaeta,
108
the Court has recognized the statutory right to examine and
inspect public records, a right which was eventually accorded constitutional status.
The right of access to public documents, as enshrined in both the 1973 Constitution and the 1987
Constitution, has been recognized as a self-executory constitutional right.
109

In the 1976 case of Baldoza v. Hon. Judge Dimaano,
110
the Court ruled that access to public records
is predicated on the right of the people to acquire information on matters of public concern since,
undoubtedly, in a democracy, the pubic has a legitimate interest in matters of social and political
significance.
x x x The incorporation of this right in the Constitution is a recognition of the fundamental role of free
exchange of information in a democracy. There can be no realistic perception by the public of the
nation's problems, nor a meaningful democratic decision-making if they are denied access to
information of general interest. Information is needed to enable the members of society to cope
with the exigencies of the times. As has been aptly observed: "Maintaining the flow of such
information depends on protection for both its acquisition and its dissemination since, if either
process is interrupted, the flow inevitably ceases." x x x
111

In the same way that free discussion enables members of society to cope with the exigencies of
their time, access to information of general interest aids the people in democratic decision-making
by giving them a better perspective of the vital issues confronting the nation
112
so that they may be
able to criticize and participate in the affairs of the government in a responsible, reasonable and
effective manner. It is by ensuring an unfettered and uninhibited exchange of ideas among a well-
informed public that a government remains responsive to the changes desired by the people.
113

The MOA-AD is a matter of public concern
That the subject of the information sought in the present cases is a matter of public concern
114
faces
no serious challenge. In fact, respondents admit that the MOA-AD is indeed of public concern.
115
In
previous cases, the Court found that the regularity of real estate transactions entered in the Register
of Deeds,
116
the need for adequate notice to the public of the various laws,
117
the civil service
eligibility of a public employee,
118
the proper management of GSIS funds allegedly used to grant
loans to public officials,
119
the recovery of the Marcoses' alleged ill-gotten wealth,
120
and the identity
of party-list nominees,
121
among others, are matters of public concern. Undoubtedly, the MOA-AD
subject of the present cases is of public concern, involving as it does thesovereignty and territorial
integrity of the State, which directly affects the lives of the public at large.
Matters of public concern covered by the right to information include steps and negotiations
leading to the consummation of the contract. In not distinguishing as to the executory nature or
commercial character of agreements, the Court has categorically ruled:
x x x [T]he right to information "contemplates inclusion of negotiations leading to the
consummation of the transaction." Certainly, a consummated contract is not a requirement
for the exercise of the right to information. Otherwise, the people can never exercise the right
if no contract is consummated, and if one is consummated, it may be too late for the public
to expose its defects.
Requiring a consummated contract will keep the public in the dark until the contract, which
may be grossly disadvantageous to the government or even illegal, becomes fait accompli.
This negates the State policy of full transparency on matters of public concern, a situation
which the framers of the Constitution could not have intended. Such a requirement will
prevent the citizenry from participating in the public discussion of any proposed contract,
25

effectively truncating a basic right enshrined in the Bill of Rights. We can allow neither an
emasculation of a constitutional right, nor a retreat by the State of its avowed "policy of full
disclosure of all its transactions involving public interest."
122
(Emphasis and italics in the original)
Intended as a "splendid symmetry"
123
to the right to information under the Bill of Rights is the policy of
public disclosure under Section 28, Article II of the Constitution reading:
Sec. 28. Subject to reasonable conditions prescribed by law, the State adopts and
implements a policy of full public disclosure of all its transactions involving public interest.
124

The policy of full public disclosure enunciated in above-quoted Section 28 complements the right of
access to information on matters of public concern found in the Bill of Rights. The right to information
guarantees the right of the people to demand information, while Section 28 recognizes the duty of
officialdom to give information even if nobody demands.
125

The policy of public disclosure establishes a concrete ethical principle for the conduct of public
affairs in a genuinely open democracy, with the people's right to know as the centerpiece. It is a
mandate of the State to be accountable by following such policy.
126
These provisions are vital to the
exercise of the freedom of expression and essential to hold public officials at all times accountable
to the people.
127

Whether Section 28 is self-executory, the records of the deliberations of the Constitutional
Commission so disclose:
MR. SUAREZ. And since this is not self-executory, this policy will not be enunciated or will not
be in force and effect until after Congress shall have provided it.
MR. OPLE. I expect it to influence the climate of public ethics immediately but, of course, the
implementing law will have to be enacted by Congress, Mr. Presiding Officer.
128

The following discourse, after Commissioner Hilario Davide, Jr., sought clarification on the issue, is
enlightening.
MR. DAVIDE. I would like to get some clarifications on this. Mr. Presiding Officer, did I get the
Gentleman correctly as having said that this is not a self-executing provision? It would require
a legislation by Congress to implement?
MR. OPLE. Yes. Originally, it was going to be self-executing, but I accepted an amendment
from Commissioner Regalado, so that the safeguards on national interest are modified by the
clause "as may be provided by law"
MR. DAVIDE. But as worded, does it not mean that this will immediately take effect and
Congress may provide for reasonable safeguards on the sole ground national interest?
MR. OPLE. Yes. I think so, Mr. Presiding Officer, I said earlier that it should immediately
influence the climate of the conduct of public affairs but, of course, Congress here may no
longer pass a law revoking it, or if this is approved, revoking this principle, which is inconsistent
with this policy.
129
(Emphasis supplied)
Indubitably, the effectivity of the policy of public disclosure need not await the passing of a statute.
As Congress cannot revoke this principle, it is merely directed to provide for "reasonable safeguards."
The complete and effective exercise of the right to information necessitates that its complementary
provision on public disclosure derive the same self-executory nature. Since both provisions go hand-
26

in-hand, it is absurd to say that the broader
130
right to information on matters of public concern is
already enforceable while the correlative duty of the State to disclose its transactions involving
public interest is not enforceable until there is an enabling law.Respondents cannot thus point to the
absence of an implementing legislation as an excuse in not effecting such policy.
An essential element of these freedoms is to keep open a continuing dialogue or process of
communication between the government and the people. It is in the interest of the State that the
channels for free political discussion be maintained to the end that the government may perceive
and be responsive to the people's will.
131
Envisioned to be corollary to the twin rights to information
and disclosure is the design for feedback mechanisms.
MS. ROSARIO BRAID. Yes. And lastly, Mr. Presiding Officer, will the people be able to
participate? Will the government provide feedback mechanisms so that the people can
participate and can react where the existing media facilities are not able to provide full
feedback mechanisms to the government? I suppose this will be part of the government
implementing operational mechanisms.
MR. OPLE. Yes. I think through their elected representatives and that is how these courses take
place. There is a message and a feedback, both ways.
x x x x
MS. ROSARIO BRAID. Mr. Presiding Officer, may I just make one last sentence?
I think when we talk about the feedback network, we are not talking about public officials but
also network of private business o[r] community-based organizations that will be reacting. As
a matter of fact, we will put more credence or credibility on the private network of volunteers
and voluntary community-based organizations. So I do not think we are afraid that there will
be another OMA in the making.
132
(Emphasis supplied)
The imperative of a public consultation, as a species of the right to information, is evident in the
"marching orders" to respondents. The mechanics for the duty to disclose information and to
conduct public consultation regarding the peace agenda and process is manifestly provided by
E.O. No. 3.
133
The preambulatory clause of E.O. No. 3 declares that there is a need to further
enhance the contribution of civil society to the comprehensive peace process by institutionalizing
the people's participation.
One of the three underlying principles of the comprehensive peace process is that it "should be
community-based, reflecting the sentiments, values and principles important to all Filipinos" and
"shall be defined not by the government alone, nor by the different contending groups only, but by
all Filipinos as one community."
134
Included as a component of the comprehensive peace process is
consensus-building and empowerment for peace, which includes "continuing consultations on both
national and local levels to build consensus for a peace agenda and process, and the mobilization
and facilitation of people's participation in the peace process."
135

Clearly, E.O. No. 3 contemplates not just the conduct of a plebiscite to effectuate "continuing"
consultations, contrary to respondents' position that plebiscite is "more than sufficient
consultation."
136

Further, E.O. No. 3 enumerates the functions and responsibilities of the PAPP, one of which is to
"[c]onductregular dialogues with the National Peace Forum (NPF) and other peace partners to seek
relevant information, comments, recommendations as well as to render appropriate and timely
reports on the progress of the comprehensive peace process."
137
E.O. No. 3 mandates the
27

establishment of the NPF to be "the principal forumfor the PAPP to consult with and seek advi[c]e
from the peace advocates, peace partners and concerned sectors of society on both national and
local levels, on the implementation of the comprehensive peace process, as well as for
government[-]civil society dialogue and consensus-building on peace agenda and initiatives."
138

In fine, E.O. No. 3 establishes petitioners' right to be consulted on the peace agenda, as a corollary
to the constitutional right to information and disclosure.
PAPP Esperon committed grave abuse of discretion
The PAPP committed grave abuse of discretion when he failed to carry out the pertinent
consultation. The furtive process by which the MOA-AD was designed and crafted runs contrary to
and in excess of the legal authority, and amounts to a whimsical, capricious, oppressive, arbitrary
and despotic exercise thereof.
The Court may not, of course, require the PAPP to conduct the consultation in a particular way or
manner. It may, however, require him to comply with the law and discharge the functions within the
authority granted by the President.
139

Petitioners are not claiming a seat at the negotiating table, contrary to respondents' retort in
justifying the denial of petitioners' right to be consulted. Respondents' stance manifests the manner
by which they treat the salient provisions of E.O. No. 3 on people's participation. Such disregard of
the express mandate of the President is not much different from superficial conduct toward token
provisos that border on classic lip service.
140
It illustrates a gross evasion of positive duty and a virtual
refusal to perform the duty enjoined.
As for respondents' invocation of the doctrine of executive privilege, it is not tenable under the
premises. The argument defies sound reason when contrasted with E.O. No. 3's explicit provisions on
continuing consultation and dialogue on both national and local levels. The executive order even
recognizes the exercise of the public's right even before the GRP makes its official
recommendations or before the government proffers its definite propositions.
141
It bear emphasis
that E.O. No. 3 seeks to elicit relevant advice, information, comments and recommendations from
the people through dialogue.
AT ALL EVENTS, respondents effectively waived the defense of executive privilege in view of their
unqualified disclosure of the official copies of the final draft of the MOA-AD. By unconditionally
complying with the Court's August 4, 2008 Resolution, without a prayer for the document's
disclosure in camera, or without a manifestation that it was complying therewith ex abundante ad
cautelam.
Petitioners' assertion that the Local Government Code (LGC) of 1991 declares it a State policy to
"require all national agencies and offices to conduct periodic consultations with appropriate local
government units, non-governmental and people's organizations, and other concerned sectors of
the community before any project or program is implemented in their respective jurisdictions"
142
is
well-taken. The LGC chapter on intergovernmental relations puts flesh into this avowed policy:
Prior Consultations Required. - No project or program shall be implemented by government
authoritiesunless the consultations mentioned in Sections 2 (c) and 26 hereof are complied
with, and prior approval of the sanggunian concerned is obtained: Provided, That occupants
in areas where such projects are to be implemented shall not be evicted unless appropriate
relocation sites have been provided, in accordance with the provisions of the
Constitution.
143
(Italics and underscoring supplied)
28

In Lina, Jr. v. Hon. Pao,
144
the Court held that the above-stated policy and above-quoted provision
of the LGU apply only to national programs or projects which are to be implemented in a particular
local community. Among the programs and projects covered are those that are critical to the
environment and human ecology including those that may call for the eviction of a particular group
of people residing in the locality where these will be implemented.
145
The MOA-AD is one peculiar
program that unequivocally and unilaterally vests ownership of a vast territory to the Bangsamoro
people,
146
which could pervasively and drastically result to the diaspora or displacement of a great
number of inhabitants from their total environment.
With respect to the indigenous cultural communities/indigenous peoples (ICCs/IPs), whose interests
are represented herein by petitioner Lopez and are adversely affected by the MOA-AD, the ICCs/IPs
have, under the IPRA, the right to participate fully at all levels of decision-making in matters which
may affect their rights, lives and destinies.
147
The MOA-AD, an instrument recognizing ancestral
domain, failed to justify its non-compliance with the clear-cut mechanisms ordained in said
Act,
148
which entails, among other things, the observance of the free and prior informed consent of
the ICCs/IPs.
Notably, the IPRA does not grant the Executive Department or any government agency the power
to delineate and recognize an ancestral domain claim by mere agreement or compromise. The
recognition of the ancestral domain is the raison d'etre of the MOA-AD, without which all other
stipulations or "consensus points" necessarily must fail. In proceeding to make a sweeping
declaration on ancestral domain, without complying with the IPRA, which is cited as one of the TOR
of the MOA-AD, respondents clearly transcended the boundaries of their authority. As it seems, even
the heart of the MOA-AD is still subject to necessary changes to the legal framework. While
paragraph 7 on Governance suspends the effectivity of all provisions requiring changes to the legal
framework, such clause is itself invalid, as will be discussed in the following section.
Indeed, ours is an open society, with all the acts of the government subject to public scrutiny and
available always to public cognizance. This has to be so if the country is to remain democratic, with
sovereignty residing in the people and all government authority emanating from them.
149

ON THE SECOND SUBSTANTIVE ISSUE
With regard to the provisions of the MOA-AD, there can be no question that they cannot all be
accommodated under the present Constitution and laws. Respondents have admitted as much in
the oral arguments before this Court, and the MOA-AD itself recognizes the need to amend the
existing legal framework to render effective at least some of its provisions. Respondents, nonetheless,
counter that the MOA-AD is free of any legal infirmity because any provisions therein which are
inconsistent with the present legal framework will not be effective until the necessary changes to
that framework are made. The validity of this argument will be considered later. For now, the Court
shall pass upon how
The MOA-AD is inconsistent with the Constitution and laws as presently worded.
In general, the objections against the MOA-AD center on the extent of the powers conceded
therein to the BJE. Petitioners assert that the powers granted to the BJE exceed those granted to any
local government under present laws, and even go beyond those of the present ARMM. Before
assessing some of the specific powers that would have been vested in the BJE, however, it would be
useful to turn first to a general idea that serves as a unifying link to the different provisions of the
MOA-AD, namely, the international law concept of association. Significantly, the MOA-AD explicitly
alludes to this concept, indicating that the Parties actually framed its provisions with it in mind.
29

Association is referred to in paragraph 3 on TERRITORY, paragraph 11 on RESOURCES, and
paragraph 4 on GOVERNANCE. It is in the last mentioned provision, however, that the MOA-AD most
clearly uses it to describe theenvisioned relationship between the BJE and the Central Government.
4. The relationship between the Central Government and the Bangsamoro juridical entity shall
beassociative characterized by shared authority and responsibility with a structure of
governance based on executive, legislative, judicial and administrative institutions with
defined powers and functions in the comprehensive compact. A period of transition shall be
established in a comprehensive peace compact specifying the relationship between the
Central Government and the BJE. (Emphasis and underscoring supplied)
The nature of the "associative" relationship may have been intended to be defined more precisely in
the still to be forged Comprehensive Compact. Nonetheless, given that there is a concept of
"association" in international law, and the MOA-AD - by its inclusion of international law instruments in
its TOR- placed itself in an international legal context, that concept of association may be brought
to bear in understanding the use of the term "associative" in the MOA-AD.
Keitner and Reisman state that
[a]n association is formed when two states of unequal power voluntarily establish durable
links. In the basic model, one state, the associate, delegates certain responsibilities to the
other, the principal, while maintaining its international status as a state. Free associations
represent a middle ground between integration and independence. x x x
150
(Emphasis and
underscoring supplied)
For purposes of illustration, the Republic of the Marshall Islands and the Federated States of
Micronesia (FSM), formerly part of the U.S.-administered Trust Territory of the Pacific Islands,
151
are
associated states of the U.S. pursuant to a Compact of Free Association. The currency in these
countries is the U.S. dollar, indicating their very close ties with the U.S., yet they issue their own travel
documents, which is a mark of their statehood. Their international legal status as states was
confirmed by the UN Security Council and by their admission to UN membership.
According to their compacts of free association, the Marshall Islands and the FSM generally have
the capacity to conduct foreign affairs in their own name and right, such capacity extending to
matters such as the law of the sea, marine resources, trade, banking, postal, civil aviation, and
cultural relations. The U.S. government, when conducting its foreign affairs, is obligated to consult
with the governments of the Marshall Islands or the FSM on matters which it (U.S. government)
regards as relating to or affecting either government.
In the event of attacks or threats against the Marshall Islands or the FSM, the U.S. government has the
authority and obligation to defend them as if they were part of U.S. territory. The U.S. government,
moreover, has the option of establishing and using military areas and facilities within these
associated states and has the right to bar the military personnel of any third country from having
access to these territories for military purposes.
It bears noting that in U.S. constitutional and international practice, free association is understood as
an international association between sovereigns. The Compact of Free Association is a treaty which
is subordinate to the associated nation's national constitution, and each party may terminate the
association consistent with the right of independence. It has been said that, with the admission of
the U.S.-associated states to the UN in 1990, the UN recognized that the American model of free
association is actually based on an underlying status of independence.
152

30

In international practice, the "associated state" arrangement has usually been used as a transitional
device of former colonies on their way to full independence. Examples of states that have passed
through the status of associated states as a transitional phase are Antigua, St. Kitts-Nevis-Anguilla,
Dominica, St. Lucia, St. Vincent and Grenada. All have since become independent states.
153

Back to the MOA-AD, it contains many provisions which are consistent with the international legal
concept ofassociation, specifically the following: the BJE's capacity to enter into economic and
trade relations with foreign countries, the commitment of the Central Government to ensure the
BJE's participation in meetings and events in the ASEAN and the specialized UN agencies, and the
continuing responsibility of the Central Government over external defense. Moreover, the BJE's right
to participate in Philippine official missions bearing on negotiation of border agreements,
environmental protection, and sharing of revenues pertaining to the bodies of water adjacent to or
between the islands forming part of the ancestral domain, resembles the right of the governments of
FSM and the Marshall Islands to be consulted by the U.S. government on any foreign affairs matter
affecting them.
These provisions of the MOA indicate, among other things, that the Parties aimed to vest in the BJE
the status of an associated state or, at any rate, a status closely approximating it.
The concept of association is not recognized under the present Constitution
No province, city, or municipality, not even the ARMM, is recognized under our laws as having an
"associative" relationship with the national government. Indeed, the concept implies powers that go
beyond anything ever granted by the Constitution to any local or regional government. It also
implies the recognition of the associated entity as a state. The Constitution, however, does not
contemplate any state in this jurisdiction other than the Philippine State, much less does it provide for
a transitory status that aims to prepare any part of Philippine territory for independence.
Even the mere concept animating many of the MOA-AD's provisions, therefore, already requires for
its validity the amendment of constitutional provisions, specifically the following provisions of Article
X:
SECTION 1. The territorial and political subdivisions of the Republic of the Philippines are
the provinces, cities, municipalities, and barangays. There shall be autonomous regions in
Muslim Mindanao and the Cordilleras as hereinafter provided.
SECTION 15. There shall be created autonomous regions in Muslim Mindanao and in the
Cordilleras consisting of provinces, cities, municipalities, and geographical areas sharing
common and distinctive historical and cultural heritage, economic and social structures, and
other relevant characteristics within the framework of this Constitution and the national
sovereignty as well as territorial integrity of the Republic of the Philippines.
The BJE is a far more powerful
entity than the autonomous region
recognized in the Constitution
It is not merely an expanded version of the ARMM, the status of its relationship with the national
government being fundamentally different from that of the ARMM. Indeed, BJE is a state in all but
name as it meets the criteria of a state laid down in the Montevideo Convention,
154
namely,
a permanent population, a defined territory, a government, and a capacity to enter into relations
with other states.
31

Even assuming arguendo that the MOA-AD would not necessarily sever any portion of Philippine
territory, the spirit animating it - which has betrayed itself by its use of the concept of association -
runs counter to the national sovereignty and territorial integrity of the Republic.
The defining concept underlying the relationship between the national government and the BJE
being itself contrary to the present Constitution, it is not surprising that many of the specific provisions
of the MOA-AD on the formation and powers of the BJE are in conflict with the Constitution and the
laws.
Article X, Section 18 of the Constitution provides that "[t]he creation of the autonomous region shall
be effective when approved by a majority of the votes cast by the constituent units in a plebiscite
called for the purpose, provided that only provinces, cities, and geographic areas voting favorably
in such plebiscite shall be included in the autonomous region." (Emphasis supplied)
As reflected above, the BJE is more of a state than an autonomous region. But even assuming that it
is covered by the term "autonomous region" in the constitutional provision just quoted, the MOA-AD
would still be in conflict with it. Under paragraph 2(c) on TERRITORY in relation to 2(d) and 2(e), the
present geographic area of the ARMM and, in addition, the municipalities of Lanao del Norte which
voted for inclusion in the ARMM during the 2001 plebiscite - Baloi, Munai, Nunungan, Pantar,
Tagoloan and Tangkal - are automatically part of the BJE without need of another plebiscite, in
contrast to the areas under Categories A and B mentioned earlier in the overview. That the present
components of the ARMM and the above-mentioned municipalities voted for inclusion therein in
2001, however, does not render another plebiscite unnecessary under the Constitution, precisely
because what these areas voted for then was their inclusion in the ARMM, not the BJE.
The MOA-AD, moreover, would not
comply with Article X, Section 20 of
the Constitution
since that provision defines the powers of autonomous regions as follows:
SECTION 20. Within its territorial jurisdiction and subject to the provisions of this Constitution and
national laws, the organic act of autonomous regions shall provide for legislative powers over:
(1) Administrative organization;
(2) Creation of sources of revenues;
(3) Ancestral domain and natural resources;
(4) Personal, family, and property relations;
(5) Regional urban and rural planning development;
(6) Economic, social, and tourism development;
(7) Educational policies;
(8) Preservation and development of the cultural heritage; and
(9) Such other matters as may be authorized by law for the promotion of the general welfare
of the people of the region. (Underscoring supplied)
Again on the premise that the BJE may be regarded as an autonomous region, the MOA-AD would
require an amendment that would expand the above-quoted provision. The mere passage of new
legislation pursuant to sub-paragraph No. 9 of said constitutional provision would not suffice, since
any new law that might vest in the BJE the powers found in the MOA-AD must, itself, comply with
other provisions of the Constitution. It would not do, for instance, to merely pass legislation vesting
the BJE with treaty-making power in order to accommodate paragraph 4 of the strand on
RESOURCES which states: "The BJE is free to enter into any economic cooperation and trade
relations with foreign countries: provided, however, that such relationships and understandings do
32

not include aggression against the Government of the Republic of the Philippines x x x." Under our
constitutional system, it is only the President who has that power. Pimentel v. Executive
Secretary
155
instructs:
In our system of government, the President, being the head of state, is regarded as the sole
organ and authority in external relations and is the country's sole representative with foreign
nations. As the chief architect of foreign policy, the President acts as the country's
mouthpiece with respect to international affairs. Hence, the President is vested with the
authority to deal with foreign states and governments, extend or withhold
recognition, maintain diplomatic relations, enter into treaties, and otherwise transact the
business of foreign relations. In the realm of treaty-making, the President has the sole authority
to negotiate with other states. (Emphasis and underscoring supplied)
Article II, Section 22 of the Constitution must also be amended if the scheme envisioned in the MOA-
AD is to be effected. That constitutional provision states: "The State recognizes and promotes the
rights ofindigenous cultural communities within the framework of national unity and development."
(Underscoring supplied)An associative arrangement does not uphold national unity. While there
may be a semblance of unity because of the associative ties between the BJE and the national
government, the act of placing a portion of Philippine territory in a status which, in international
practice, has generally been a preparation for independence, is certainly not conducive
to national unity.
Besides being irreconcilable with the Constitution, the MOA-AD is also inconsistent with prevailing
statutory law, among which are R.A. No. 9054
156
or the Organic Act of the ARMM, and the IPRA.
157

Article X, Section 3 of the Organic Act of the ARMM is a bar to the adoption of the definition of
"Bangsamoro people" used in the MOA-AD. Paragraph 1 on Concepts and Principles states:
1. It is the birthright of all Moros and all Indigenous peoples of Mindanao to identify
themselves and be accepted as "Bangsamoros". The Bangsamoro people refers to those who
are natives or original inhabitants of Mindanao and its adjacent islands including Palawan
and the Sulu archipelago at the time of conquest or colonization of its descendants whether
mixed or of full blood. Spouses and their descendants are classified as Bangsamoro. The
freedom of choice of the Indigenous people shall be respected. (Emphasis and underscoring
supplied)
This use of the term Bangsamoro sharply contrasts with that found in the Article X, Section 3 of the
Organic Act, which, rather than lumping together the identities of the Bangsamoro and other
indigenous peoples living in Mindanao, clearly distinguishes between Bangsamoro people and Tribal
peoples, as follows:
"As used in this Organic Act, the phrase "indigenous cultural community" refers to Filipino
citizens residing in the autonomous region who are:
(a) Tribal peoples. These are citizens whose social, cultural and economic conditions
distinguish them from other sectors of the national community; and
(b) Bangsa Moro people. These are citizens who are believers in Islam and who have retained
some or all of their own social, economic, cultural, and political institutions."
Respecting the IPRA, it lays down the prevailing procedure for the delineation and recognition of
ancestral domains. The MOA-AD's manner of delineating the ancestral domain of the Bangsamoro
people is a clear departure from that procedure. By paragraph 1 of Territory, the Parties simply
33

agree that, subject to the delimitations in the agreed Schedules, "[t]he Bangsamoro homeland and
historic territory refer to the land mass as well as the maritime, terrestrial, fluvial and alluvial domains,
and the aerial domain, the atmospheric space above it, embracing the Mindanao-Sulu-Palawan
geographic region."
Chapter VIII of the IPRA, on the other hand, lays down a detailed procedure, as illustrated in the
following provisions thereof:
SECTION 52. Delineation Process. - The identification and delineation of ancestral domains
shall be done in accordance with the following procedures:
x x x x
b) Petition for Delineation. - The process of delineating a specific perimeter may be initiated
by the NCIP with the consent of the ICC/IP concerned, or through a Petition for Delineation
filed with the NCIP, by a majority of the members of the ICCs/IPs;
c) Delineation Proper. - The official delineation of ancestral domain boundaries including
census of all community members therein, shall be immediately undertaken by the Ancestral
Domains Office upon filing of the application by the ICCs/IPs concerned. Delineation will be
done in coordination with the community concerned and shall at all times include genuine
involvement and participation by the members of the communities concerned;
d) Proof Required. - Proof of Ancestral Domain Claims shall include the testimony of elders or
community under oath, and other documents directly or indirectly attesting to the possession
or occupation of the area since time immemorial by such ICCs/IPs in the concept of owners
which shall be any one (1) of the following authentic documents:
1) Written accounts of the ICCs/IPs customs and traditions;
2) Written accounts of the ICCs/IPs political structure and institution;
3) Pictures showing long term occupation such as those of old improvements, burial
grounds, sacred places and old villages;
4) Historical accounts, including pacts and agreements concerning boundaries
entered into by the ICCs/IPs concerned with other ICCs/IPs;
5) Survey plans and sketch maps;
6) Anthropological data;
7) Genealogical surveys;
8) Pictures and descriptive histories of traditional communal forests and hunting
grounds;
9) Pictures and descriptive histories of traditional landmarks such as mountains, rivers,
creeks, ridges, hills, terraces and the like; and
10) Write-ups of names and places derived from the native dialect of the community.
e) Preparation of Maps. - On the basis of such investigation and the findings of fact based
thereon, the Ancestral Domains Office of the NCIP shall prepare a perimeter map, complete
with technical descriptions, and a description of the natural features and landmarks
embraced therein;
f) Report of Investigation and Other Documents. - A complete copy of the preliminary census
and a report of investigation, shall be prepared by the Ancestral Domains Office of the NCIP;
g) Notice and Publication. - A copy of each document, including a translation in the native
language of the ICCs/IPs concerned shall be posted in a prominent place therein for at least
34

fifteen (15) days. A copy of the document shall also be posted at the local, provincial and
regional offices of the NCIP, and shall be published in a newspaper of general circulation
once a week for two (2) consecutive weeks to allow other claimants to file opposition thereto
within fifteen (15) days from date of such publication: Provided, That in areas where no such
newspaper exists, broadcasting in a radio station will be a valid substitute: Provided, further,
That mere posting shall be deemed sufficient if both newspaper and radio station are not
available;
h) Endorsement to NCIP. - Within fifteen (15) days from publication, and of the inspection
process, the Ancestral Domains Office shall prepare a report to the NCIP endorsing a
favorable action upon a claim that is deemed to have sufficient proof. However, if the proof
is deemed insufficient, the Ancestral Domains Office shall require the submission of additional
evidence: Provided, That the Ancestral Domains Office shall reject any claim that is deemed
patently false or fraudulent after inspection and verification: Provided, further, That in case of
rejection, the Ancestral Domains Office shall give the applicant due notice, copy furnished all
concerned, containing the grounds for denial. The denial shall be appealable to the NCIP:
Provided, furthermore, That in cases where there are conflicting claims among ICCs/IPs on
the boundaries of ancestral domain claims, the Ancestral Domains Office shall cause the
contending parties to meet and assist them in coming up with a preliminary resolution of the
conflict, without prejudice to its full adjudication according to the section below.
x x x x
To remove all doubts about the irreconcilability of the MOA-AD with the present legal system, a
discussion of not only the Constitution and domestic statutes, but also of international law is in order,
for
Article II, Section 2 of the Constitution states that the Philippines "adopts the generally accepted
principles of international law as part of the law of the land."
Applying this provision of the Constitution, the Court, in Mejoff v. Director of Prisons,
158
held that the
Universal Declaration of Human Rights is part of the law of the land on account of which it ordered
the release on bail of a detained alien of Russian descent whose deportation order had not been
executed even after two years. Similarly, the Court in Agustin v. Edu
159
applied the aforesaid
constitutional provision to the 1968 Vienna Convention on Road Signs and Signals.
International law has long recognized the right to self-determination of "peoples," understood not
merely as the entire population of a State but also a portion thereof. In considering the question of
whether the people of Quebec had a right to unilaterally secede from Canada, the Canadian
Supreme Court in REFERENCE RE SECESSION OF QUEBEC
160
had occasion to acknowledge that "the
right of a people to self-determination is now so widely recognized in international conventions that
the principle has acquired a status beyond convention' and is considered a general principle of
international law."
Among the conventions referred to are the International Covenant on Civil and Political
Rights
161
and the International Covenant on Economic, Social and Cultural Rights
162
which state, in
Article 1 of both covenants, that all peoples, by virtue of the right of self-determination, "freely
determine their political status and freely pursue their economic, social, and cultural development."
The people's right to self-determination should not, however, be understood as extending to a
unilateral right of secession. A distinction should be made between the right of internal and external
self-determination. REFERENCE RE SECESSION OF QUEBEC is again instructive:
35

"(ii) Scope of the Right to Self-determination
126. The recognized sources of international law establish that the right to self-determination
of a people is normally fulfilled through internal self-determination - a people's pursuit of its
political, economic, social and cultural development within the framework of an existing
state. A right toexternal self-determination (which in this case potentially takes the form of the
assertion of a right to unilateral secession) arises in only the most extreme of cases and, even
then, under carefully defined circumstances. x x x
External self-determination can be defined as in the following statement from the Declaration
on Friendly Relations, supra, as
The establishment of a sovereign and independent State, the free association or integration
with an independent State or the emergence into any other political status freely determined
by apeople constitute modes of implementing the right of self-determination by that people.
(Emphasis added)
127. The international law principle of self-determination has evolved within a framework of
respect for the territorial integrity of existing states. The various international documents that
support the existence of a people's right to self-determination also contain parallel statements
supportive of the conclusion that the exercise of such a right must be sufficiently limited to
prevent threats to an existing state's territorial integrity or the stability of relations between
sovereign states.
x x x x (Emphasis, italics and underscoring supplied)
The Canadian Court went on to discuss the exceptional cases in which the right to external self-
determination can arise, namely, where a people is under colonial rule, is subject to foreign
domination or exploitation outside a colonial context, and - less definitely but asserted by a number
of commentators - is blocked from the meaningful exercise of its right to internal self-determination.
The Court ultimately held that the population of Quebec had no right to secession, as the same is
not under colonial rule or foreign domination, nor is it being deprived of the freedom to make
political choices and pursue economic, social and cultural development, citing that Quebec is
equitably represented in legislative, executive and judicial institutions within Canada, even
occupying prominent positions therein.
The exceptional nature of the right of secession is further exemplified in the REPORT OF THE
INTERNATIONAL COMMITTEE OF JURISTS ON THE LEGAL ASPECTS OF THE AALAND ISLANDS
QUESTION.
163
There, Sweden presented to the Council of the League of Nations the question of
whether the inhabitants of the Aaland Islands should be authorized to determine by plebiscite if the
archipelago should remain under Finnish sovereignty or be incorporated in the kingdom of Sweden.
The Council, before resolving the question, appointed an International Committee composed of
three jurists to submit an opinion on the preliminary issue of whether the dispute should, based on
international law, be entirely left to the domestic jurisdiction of Finland. The Committee stated the
rule as follows:
x x x [I]n the absence of express provisions in international treaties, the right of disposing of
national territory is essentially an attribute of the sovereignty of every State. Positive
International Law does not recognize the right of national groups, as such, to separate
themselves from the State of which they form part by the simple expression of a wish, any
more than it recognizes the right of other States to claim such a separation. Generally
speaking, the grant or refusal of the right to a portion of its population of determining its own
political fate by plebiscite or by some other method, is, exclusively, an attribute of the
36

sovereignty of every State which is definitively constituted. A dispute between two States
concerning such a question, under normal conditions therefore, bears upon a question which
International Law leaves entirely to the domestic jurisdiction of one of the States concerned.
Any other solution would amount to an infringement of sovereign rights of a State and would
involve the risk of creating difficulties and a lack of stability which would not only be contrary
to the very idea embodied in term "State," but would also endanger the interests of the
international community. If this right is not possessed by a large or small section of a nation,
neither can it be held by the State to which the national group wishes to be attached, nor by
any other State. (Emphasis and underscoring supplied)
The Committee held that the dispute concerning the Aaland Islands did not refer to a question
which is left by international law to the domestic jurisdiction of Finland, thereby applying the
exception rather than the rule elucidated above. Its ground for departing from the general rule,
however, was a very narrow one, namely, the Aaland Islands agitation originated at a time when
Finland was undergoing drastic political transformation. The internal situation of Finland was,
according to the Committee, so abnormal that, for a considerable time, the conditions required for
the formation of a sovereign State did not exist. In the midst of revolution, anarchy, and civil war, the
legitimacy of the Finnish national government was disputed by a large section of the people, and it
had, in fact, been chased from the capital and forcibly prevented from carrying out its duties. The
armed camps and the police were divided into two opposing forces. In light of these circumstances,
Finland was not, during the relevant time period, a "definitively constituted" sovereign state. The
Committee, therefore, found that Finland did not possess the right to withhold from a portion of its
population the option to separate itself - a right which sovereign nations generally have with respect
to their own populations.
Turning now to the more specific category of indigenous peoples, this term has been used, in
scholarship as well as international, regional, and state practices, to refer to groups with distinct
cultures, histories, and connections to land (spiritual and otherwise) that have been forcibly
incorporated into a larger governing society. These groups are regarded as "indigenous" since they
are the living descendants of pre-invasion inhabitants of lands now dominated by others. Otherwise
stated, indigenous peoples, nations, or communities are culturally distinctive groups that find
themselves engulfed by settler societies born of the forces of empire and conquest.
164
Examples of
groups who have been regarded as indigenous peoples are the Maori of New Zealand and the
aboriginal peoples of Canada.
As with the broader category of "peoples," indigenous peoples situated within states do not have a
general right to independence or secession from those states under international law,
165
but they do
have rights amounting to what was discussed above as the right to internal self-determination.
In a historic development last September 13, 2007, the UN General Assembly adopted the United
Nations Declaration on the Rights of Indigenous Peoples (UN DRIP) through General Assembly
Resolution 61/295. The vote was 143 to 4, the Philippines being included among those in favor, and
the four voting against being Australia, Canada, New Zealand, and the U.S. The Declaration clearly
recognized the right of indigenous peoples to self-determination, encompassing the right to
autonomy or self-government, to wit:
Article 3
Indigenous peoples have the right to self-determination. By virtue of that right they freely
determine their political status and freely pursue their economic, social and cultural
development.
Article 4
37

Indigenous peoples, in exercising their right to self-determination, have the right
to autonomy or self-government in matters relating to their internal and local affairs, as well as
ways and means for financing their autonomous functions.
Article 5
Indigenous peoples have the right to maintain and strengthen their distinct political, legal,
economic, social and cultural institutions, while retaining their right to participate fully, if they
so choose, in the political, economic, social and cultural life of the State.
Self-government, as used in international legal discourse pertaining to indigenous peoples, has been
understood as equivalent to "internal self-determination."
166
The extent of self-determination
provided for in the UN DRIP is more particularly defined in its subsequent articles, some of which are
quoted hereunder:
Article 8
1. Indigenous peoples and individuals have the right not to be subjected to forced
assimilation or destruction of their culture.
2. States shall provide effective mechanisms for prevention of, and redress for:
(a) Any action which has the aim or effect of depriving them of their integrity as distinct
peoples, or of their cultural values or ethnic identities;
(b) Any action which has the aim or effect of dispossessing them of their lands, territories or
resources;
(c) Any form of forced population transfer which has the aim or effect of violating or
undermining any of their rights;
(d) Any form of forced assimilation or integration;
(e) Any form of propaganda designed to promote or incite racial or ethnic discrimination
directed against them.
Article 21
1. Indigenous peoples have the right, without discrimination, to the improvement of their
economic and social conditions, including, inter alia, in the areas of education, employment,
vocational training and retraining, housing, sanitation, health and social security.
2. States shall take effective measures and, where appropriate, special measures to ensure
continuing improvement of their economic and social conditions. Particular attention shall be
paid to the rights and special needs of indigenous elders, women, youth, children and
persons with disabilities.
Article 26
1. Indigenous peoples have the right to the lands, territories and resources which they have
traditionally owned, occupied or otherwise used or acquired.
38

2. Indigenous peoples have the right to own, use, develop and control the lands, territories
and resources that they possess by reason of traditional ownership or other traditional
occupation or use, as well as those which they have otherwise acquired.
3. States shall give legal recognition and protection to these lands, territories and resources.
Such recognition shall be conducted with due respect to the customs, traditions and land
tenure systems of the indigenous peoples concerned.
Article 30
1. Military activities shall not take place in the lands or territories of indigenous peoples, unless
justified by a relevant public interest or otherwise freely agreed with or requested by the
indigenous peoples concerned.
2. States shall undertake effective consultations with the indigenous peoples concerned,
through appropriate procedures and in particular through their representative institutions,
prior to using their lands or territories for military activities.
Article 32
1. Indigenous peoples have the right to determine and develop priorities and strategies for
the development or use of their lands or territories and other resources.
2. States shall consult and cooperate in good faith with the indigenous peoples concerned
through their own representative institutions in order to obtain their free and informed consent
prior to the approval of any project affecting their lands or territories and other resources,
particularly in connection with the development, utilization or exploitation of mineral, water or
other resources.
3. States shall provide effective mechanisms for just and fair redress for any such activities,
and appropriate measures shall be taken to mitigate adverse environmental, economic,
social, cultural or spiritual impact.
Article 37
1. Indigenous peoples have the right to the recognition, observance and enforcement of
treaties, agreements and other constructive arrangements concluded with States or their
successors and to have States honour and respect such treaties, agreements and other
constructive arrangements.
2. Nothing in this Declaration may be interpreted as diminishing or eliminating the rights of
indigenous peoples contained in treaties, agreements and other constructive arrangements.
Article 38
States in consultation and cooperation with indigenous peoples, shall take the appropriate
measures, including legislative measures, to achieve the ends of this Declaration.
Assuming that the UN DRIP, like the Universal Declaration on Human Rights, must now be regarded
as embodying customary international law - a question which the Court need not definitively resolve
here - the obligations enumerated therein do not strictly require the Republic to grant the
Bangsamoro people, through the instrumentality of the BJE, the particular rights and powers
39

provided for in the MOA-AD. Even the more specific provisions of the UN DRIP are general in scope,
allowing for flexibility in its application by the different States.
There is, for instance, no requirement in the UN DRIP that States now guarantee indigenous peoples
their own police and internal security force. Indeed, Article 8 presupposes that it is the State which
will provide protection for indigenous peoples against acts like the forced dispossession of their lands
- a function that is normally performed by police officers. If the protection of a right so essential to
indigenous people's identity is acknowledged to be the responsibility of the State, then surely the
protection of rights less significant to them as such peoples would also be the duty of States. Nor is
there in the UN DRIP an acknowledgement of the right of indigenous peoples to the aerial domain
and atmospheric space. What it upholds, in Article 26 thereof, is the right of indigenous peoples to
the lands, territories and resources which they have traditionally owned, occupied or otherwise used
or acquired.
Moreover, the UN DRIP, while upholding the right of indigenous peoples to autonomy, does not
obligate States to grant indigenous peoples the near-independent status of an associated state. All
the rights recognized in that document are qualified in Article 46 as follows:
1. Nothing in this Declaration may be interpreted as implying for any State, people, group or
person any right to engage in any activity or to perform any act contrary to the Charter of
the United Nations orconstrued as authorizing or encouraging any action which would
dismember or impair, totally or in part, the territorial integrity or political unity of sovereign and
independent States.
Even if the UN DRIP were considered as part of the law of the land pursuant to Article II, Section 2 of
the Constitution, it would not suffice to uphold the validity of the MOA-AD so as to render its
compliance with other laws unnecessary.
It is, therefore, clear that the MOA-AD contains numerous provisions that cannot be reconciled with
the Constitution and the laws as presently worded. Respondents proffer, however, that the signing of
the MOA-AD alone would not have entailed any violation of law or grave abuse of discretion on
their part, precisely because it stipulates that the provisions thereof inconsistent with the laws shall
not take effect until these laws are amended. They cite paragraph 7 of the MOA-AD strand on
GOVERNANCE quoted earlier, but which is reproduced below for convenience:
7. The Parties agree that the mechanisms and modalities for the actual implementation of this
MOA-AD shall be spelt out in the Comprehensive Compact to mutually take such steps to
enable it to occur effectively.
Any provisions of the MOA-AD requiring amendments to the existing legal framework shall
come into force upon signing of a Comprehensive Compact and upon effecting the
necessary changes to the legal framework with due regard to non derogation of prior
agreements and within the stipulated timeframe to be contained in the Comprehensive
Compact.
Indeed, the foregoing stipulation keeps many controversial provisions of the MOA-AD from coming
into force until the necessary changes to the legal framework are effected. While the word
"Constitution" is not mentioned in the provision now under consideration or anywhere else in the
MOA-AD, the term "legal framework" is certainly broad enough to include the Constitution.
Notwithstanding the suspensive clause, however, respondents, by their mere act of incorporating in
the MOA-AD the provisions thereof regarding the associative relationship between the BJE and the
Central Government, have already violated the Memorandum of Instructions From The President
40

dated March 1, 2001, which states that the "negotiations shall be conducted in accordance with x x
x the principles of the sovereignty and territorial integrity of the Republic of the Philippines."
(Emphasis supplied) Establishing an associative relationship between the BJE and the Central
Government is, for the reasons already discussed, a preparation for independence, or worse, an
implicit acknowledgment of an independent status already prevailing.
Even apart from the above-mentioned Memorandum, however, the MOA-AD is defective because
the suspensive clause is invalid, as discussed below.
The authority of the GRP Peace Negotiating Panel to negotiate with the MILF is founded on E.O. No.
3, Section 5(c), which states that there shall be established Government Peace Negotiating Panels
for negotiations with different rebel groups to be "appointed by the President as her official
emissaries to conduct negotiations, dialogues, and face-to-face discussions with rebel groups."
These negotiating panels are to report to the President, through the PAPP on the conduct and
progress of the negotiations.
It bears noting that the GRP Peace Panel, in exploring lasting solutions to the Moro Problem through
its negotiations with the MILF, was not restricted by E.O. No. 3 only to those options available under
the laws as they presently stand. One of the components of a comprehensive peace process, which
E.O. No. 3 collectively refers to as the "Paths to Peace," is the pursuit of social, economic, and
political reforms which may require new legislation or even constitutional amendments. Sec. 4(a) of
E.O. No. 3, which reiterates Section 3(a), of E.O. No. 125,
167
states:
SECTION 4. The Six Paths to Peace. - The components of the comprehensive peace process
comprise the processes known as the "Paths to Peace". These component processes are
interrelated and not mutually exclusive, and must therefore be pursued simultaneously in a
coordinated and integrated fashion. They shall include, but may not be limited to, the
following:
a. PURSUIT OF SOCIAL, ECONOMIC AND POLITICAL REFORMS. This component involves
the vigorous implementation of various policies, reforms, programs and projects aimed at
addressing the root causes of internal armed conflicts and social unrest. This may require
administrative action, new legislation or even constitutional amendments.
x x x x (Emphasis supplied)
The MOA-AD, therefore, may reasonably be perceived as an attempt of respondents to address,
pursuant to this provision of E.O. No. 3, the root causes of the armed conflict in Mindanao. The E.O.
authorized them to "think outside the box," so to speak. Hence, they negotiated and were set on
signing the MOA-AD that included various social, economic, and political reforms which cannot,
however, all be accommodated within the present legal framework, and which thus would require
new legislation and constitutional amendments.
The inquiry on the legality of the "suspensive clause," however, cannot stop here, because it must be
askedwhether the President herself may exercise the power delegated to the GRP Peace Panel
under E.O. No. 3, Sec. 4(a).
The President cannot delegate a power that she herself does not possess. May the President, in the
course of peace negotiations, agree to pursue reforms that would require new legislation and
constitutional amendments, or should the reforms be restricted only to those solutions which the
present laws allow? The answer to this question requires a discussion of the extent of the President's
power to conduct peace negotiations.
41

That the authority of the President to conduct peace negotiations with rebel groups is not explicitly
mentioned in the Constitution does not mean that she has no such authority. In Sanlakas v.
Executive Secretary,
168
in issue was the authority of the President to declare a state of rebellion - an
authority which is not expressly provided for in the Constitution. The Court held thus:
"In her ponencia in Marcos v. Manglapus, Justice Cortes put her thesis into jurisprudence.
There, the Court, by a slim 8-7 margin, upheld the President's power to forbid the return of her
exiled predecessor. The rationale for the majority's ruling rested on the President's
. . . unstated residual powers which are implied from the grant of executive power and
which are necessary for her to comply with her duties under the Constitution. The
powers of the President are not limited to what are expressly enumerated in the article
on the Executive Department and in scattered provisions of the Constitution. This is so,
notwithstanding the avowed intent of the members of the Constitutional Commission
of 1986 to limit the powers of the President as a reaction to the abuses under the
regime of Mr. Marcos, for the result was a limitation of specific powers of the President,
particularly those relating to the commander-in-chief clause, but not a diminution of
the general grant of executive power.
Thus, the President's authority to declare a state of rebellion springs in the main from her
powers as chief executive and, at the same time, draws strength from her Commander-in-
Chief powers. x x x (Emphasis and underscoring supplied)
Similarly, the President's power to conduct peace negotiations is implicitly included in her powers as
Chief Executive and Commander-in-Chief. As Chief Executive, the President has the general
responsibility to promote public peace, and as Commander-in-Chief, she has the more specific duty
to prevent and suppress rebellion and lawless violence.
169

As the experience of nations which have similarly gone through internal armed conflict will show,
however, peace is rarely attained by simply pursuing a military solution. Oftentimes, changes as far-
reaching as a fundamental reconfiguration of the nation's constitutional structure is required. The
observations of Dr. Kirsti Samuels are enlightening, to wit:
x x x [T]he fact remains that a successful political and governance transition must form the
core of any post-conflict peace-building mission. As we have observed in Liberia and Haiti
over the last ten years, conflict cessation without modification of the political environment,
even where state-building is undertaken through technical electoral assistance and
institution- or capacity-building, is unlikely to succeed. On average, more than 50 percent of
states emerging from conflict return to conflict. Moreover, a substantial proportion of
transitions have resulted in weak or limited democracies.
The design of a constitution and its constitution-making process can play an important role in
the political and governance transition. Constitution-making after conflict is an opportunity to
create a common vision of the future of a state and a road map on how to get there. The
constitution can be partly a peace agreement and partly a framework setting up the rules by
which the new democracy will operate.
170

In the same vein, Professor Christine Bell, in her article on the nature and legal status of peace
agreements, observed that the typical way that peace agreements establish or confirm
mechanisms for demilitarization and demobilization is by linking them to new constitutional
structures addressing governance, elections, and legal and human rights institutions.
171

42

In the Philippine experience, the link between peace agreements and constitution-making has been
recognized by no less than the framers of the Constitution. Behind the provisions of the Constitution
on autonomous regions
172
is the framers' intention to implement a particular peace agreement,
namely, the Tripoli Agreement of 1976 between the GRP and the MNLF, signed by then
Undersecretary of National Defense Carmelo Z. Barbero and then MNLF Chairman Nur Misuari.
MR. ROMULO. There are other speakers; so, although I have some more questions, I will
reserve my right to ask them if they are not covered by the other speakers. I have only two
questions.
I heard one of the Commissioners say that local autonomy already exists in the Muslim
region; it is working very well; it has, in fact, diminished a great deal of the problems. So, my
question is: since that already exists, why do we have to go into something new?
MR. OPLE. May I answer that on behalf of Chairman Nolledo. Commissioner Yusup Abubakar
is right thatcertain definite steps have been taken to implement the provisions of the Tripoli
Agreement with respect to an autonomous region in Mindanao. This is a good first step, but
there is no question that this is merely a partial response to the Tripoli Agreement itself and to
the fuller standard of regional autonomy contemplated in that agreement, and now by state
policy.
173
(Emphasis supplied)
The constitutional provisions on autonomy and the statutes enacted pursuant to them have, to the
credit of their drafters, been partly successful. Nonetheless, the Filipino people are still faced with the
reality of an on-going conflict between the Government and the MILF. If the President is to be
expected to find means for bringing this conflict to an end and to achieve lasting peace in
Mindanao, then she must be given the leeway to explore, in the course of peace negotiations,
solutions that may require changes to the Constitution for their implementation. Being uniquely
vested with the power to conduct peace negotiations with rebel groups, the President is in a
singular position to know the precise nature of their grievances which, if resolved, may bring an end
to hostilities.
The President may not, of course, unilaterally implement the solutions that she considers viable, but
she may not be prevented from submitting them as recommendations to Congress, which could
then, if it is minded, act upon them pursuant to the legal procedures for constitutional amendment
and revision. In particular, Congress would have the option, pursuant to Article XVII, Sections 1 and 3
of the Constitution, to propose the recommended amendments or revision to the people, call a
constitutional convention, or submit to the electorate the question of calling such a convention.
While the President does not possess constituent powers - as those powers may be exercised only by
Congress, a Constitutional Convention, or the people through initiative and referendum - she may
submit proposals for constitutional change to Congress in a manner that does not involve the
arrogation of constituent powers.
In Sanidad v. COMELEC,
174
in issue was the legality of then President Marcos' act of directly
submitting proposals for constitutional amendments to a referendum, bypassing the interim National
Assembly which was the body vested by the 1973 Constitution with the power to propose such
amendments. President Marcos, it will be recalled, never convened the interim National Assembly.
The majority upheld the President's act, holding that "the urges of absolute necessity" compelled the
President as the agent of the people to act as he did, there being no interim National Assembly to
propose constitutional amendments. Against this ruling, Justices Teehankee and Muoz Palma
vigorously dissented. The Court's concern at present, however, is not with regard to the point on
which it was then divided in that controversial case, but on that which was not disputed by either
side.
43

Justice Teehankee's dissent,
175
in particular, bears noting. While he disagreed that the President may
directly submit proposed constitutional amendments to a referendum, implicit in his opinion is a
recognition that he would have upheld the President's action along with the majority had the
President convened the interim National Assembly and coursed his proposals through it. Thus Justice
Teehankee opined:
"Since the Constitution provides for the organization of the essential departments of
government, defines and delimits the powers of each and prescribes the manner of the
exercise of such powers, and the constituent power has not been granted to but has been
withheld from the President or Prime Minister, it follows that the President's questioned decrees
proposing and submitting constitutional amendments directly to the people (without the
intervention of the interim National Assembly in whom the power is expressly vested) are
devoid of constitutional and legal basis."
176
(Emphasis supplied)
From the foregoing discussion, the principle may be inferred that the President - in the course of
conducting peace negotiations - may validly consider implementing even those policies that
require changes to the Constitution, but she may not unilaterally implement them without the
intervention of Congress, or act in any way as if the assent of that body were assumed as a certainty.
Since, under the present Constitution, the people also have the power to directly propose
amendments through initiative and referendum, the President may also submit her
recommendations to the people, not as a formal proposal to be voted on in a plebiscite similar to
what President Marcos did in Sanidad, but for their independent consideration of whether these
recommendations merit being formally proposed through initiative.
These recommendations, however, may amount to nothing more than the President's suggestions to
the people, for any further involvement in the process of initiative by the Chief Executive may vitiate
its character as a genuine "people's initiative." The only initiative recognized by the Constitution is
that which truly proceeds from the people. As the Court stated in Lambino v. COMELEC:
177

"The Lambino Group claims that their initiative is the people's voice.' However, the Lambino
Group unabashedly states in ULAP Resolution No. 2006-02, in the verification of their petition
with the COMELEC, that ULAP maintains its unqualified support to the agenda of Her
Excellency President Gloria Macapagal-Arroyo for constitutional reforms.' The Lambino Group
thus admits that their people's' initiative is an unqualified support to the agenda' of the
incumbent President to change the Constitution. This forewarns the Court to be wary of
incantations of people's voice' or sovereign will' in the present initiative."
It will be observed that the President has authority, as stated in her oath of office,
178
only to preserve
and defend the Constitution. Such presidential power does not, however, extend to allowing her to
change the Constitution, but simply to recommend proposed amendments or revision. As long as
she limits herself to recommending these changes and submits to the proper procedure for
constitutional amendments and revision, her mere recommendation need not be construed as an
unconstitutional act.
The foregoing discussion focused on the President's authority to propose constitutional amendments,
since her authority to propose new legislation is not in controversy. It has been an accepted
practice for Presidents in this jurisdiction to propose new legislation. One of the more prominent
instances the practice is usually done is in the yearly State of the Nation Address of the President to
Congress. Moreover, the annual general appropriations bill has always been based on the budget
prepared by the President, which - for all intents and purposes - is a proposal for new legislation
coming from the President.
179

44

The "suspensive clause" in the MOA-AD viewed in light of the above-discussed standards
Given the limited nature of the President's authority to propose constitutional amendments,
she cannot guarantee to any third party that the required amendments will eventually be put in
place, nor even be submitted to a plebiscite. The most she could do is submit these proposals as
recommendations either to Congress or the people, in whom constituent powers are vested.
Paragraph 7 on Governance of the MOA-AD states, however, that all provisions thereof which
cannot be reconciled with the present Constitution and laws "shall come into force upon signing of
a Comprehensive Compact and upon effecting the necessary changes to the legal framework."
This stipulation does not bear the marks of a suspensive condition - defined in civil law as a future
and uncertain event - but of a term. It is not a question of whether the necessary changes to the
legal framework will be effected, but when. That there is no uncertainty being contemplated is plain
from what follows, for the paragraph goes on to state that the contemplated changes shall be "with
due regard to non derogation of prior agreements and within the stipulated timeframe to be
contained in the Comprehensive Compact."
Pursuant to this stipulation, therefore, it is mandatory for the GRP to effect the changes to the legal
framework contemplated in the MOA-AD - which changes would include constitutional
amendments, as discussed earlier. It bears noting that,
By the time these changes are put in place, the MOA-AD itself would be counted among the "prior
agreements" from which there could be no derogation.
What remains for discussion in the Comprehensive Compact would merely be the implementing
details for these "consensus points" and, notably, the deadline for effecting the contemplated
changes to the legal framework.
Plainly, stipulation-paragraph 7 on GOVERNANCE is inconsistent with the limits of the President's
authority to propose constitutional amendments, it being a virtual guarantee that the Constitution
and the laws of the Republic of the Philippines will certainly be adjusted to conform to all the
"consensus points" found in the MOA-AD.Hence, it must be struck down as unconstitutional.
A comparison between the "suspensive clause" of the MOA-AD with a similar provision appearing in
the 1996 final peace agreement between the MNLF and the GRP is most instructive.
As a backdrop, the parties to the 1996 Agreement stipulated that it would be implemented in two
phases. Phase Icovered a three-year transitional period involving the putting up of new
administrative structures through Executive Order, such as the Special Zone of Peace and
Development (SZOPAD) and the Southern Philippines Council for Peace and Development (SPCPD),
while Phase II covered the establishment of the new regional autonomous government through
amendment or repeal of R.A. No. 6734, which was then the Organic Act of the ARMM.
The stipulations on Phase II consisted of specific agreements on the structure of the expanded
autonomous region envisioned by the parties. To that extent, they are similar to the provisions of the
MOA-AD. There is, however, a crucial difference between the two agreements. While the MOA-
AD virtually guarantees that the "necessary changes to the legal framework" will be put in place, the
GRP-MNLF final peace agreement states thus: "Accordingly, these provisions [on Phase II] shall
be recommended by the GRP to Congress for incorporation in the amendatory or repealing law."
Concerns have been raised that the MOA-AD would have given rise to a binding international law
obligation on the part of the Philippines to change its Constitution in conformity thereto, on the
ground that it may be considered either as a binding agreement under international law, or a
45

unilateral declaration of the Philippine government to the international community that it would
grant to the Bangsamoro people all the concessions therein stated. Neither ground finds sufficient
support in international law, however.
The MOA-AD, as earlier mentioned in the overview thereof, would have included foreign dignitaries
as signatories. In addition, representatives of other nations were invited to witness its signing in Kuala
Lumpur. These circumstances readily lead one to surmise that the MOA-AD would have had the
status of a binding international agreement had it been signed. An examination of the prevailing
principles in international law, however, leads to the contrary conclusion.
The Decision on Challenge to Jurisdiction: Lom Accord Amnesty
180
(the Lom Accord case) of the
Special Court of Sierra Leone is enlightening. The Lom Accord was a peace agreement signed on
July 7, 1999 between the Government of Sierra Leone and the Revolutionary United Front (RUF), a
rebel group with which the Sierra Leone Government had been in armed conflict for around eight
years at the time of signing. There were non-contracting signatories to the agreement, among which
were the Government of the Togolese Republic, the Economic Community of West African States,
and the UN.
On January 16, 2002, after a successful negotiation between the UN Secretary-General and the
Sierra Leone Government, another agreement was entered into by the UN and that Government
whereby the Special Court of Sierra Leone was established. The sole purpose of the Special Court,
an international court, was to try persons who bore the greatest responsibility for serious violations of
international humanitarian law and Sierra Leonean law committed in the territory of Sierra Leone
since November 30, 1996.
Among the stipulations of the Lom Accord was a provision for the full pardon of the members of
the RUF with respect to anything done by them in pursuit of their objectives as members of that
organization since the conflict began.
In the Lom Accord case, the Defence argued that the Accord created an internationally
binding obligation not to prosecute the beneficiaries of the amnesty provided therein, citing,
among other things, the participation of foreign dignitaries and international organizations in the
finalization of that agreement. The Special Court, however, rejected this argument, ruling that the
Lome Accord is not a treaty and that it can only create binding obligations and rights between the
parties in municipal law, not in international law. Hence, the Special Court held, it is ineffective in
depriving an international court like it of jurisdiction.
"37. In regard to the nature of a negotiated settlement of an internal armed conflict it is easy
to assume and to argue with some degree of plausibility, as Defence counsel for the
defendants seem to have done, that the mere fact that in addition to the parties to the
conflict, the document formalizing the settlement is signed by foreign heads of state or their
representatives and representatives of international organizations, means the agreement of
the parties is internationalized so as to create obligations in international law.
x x x x
40. Almost every conflict resolution will involve the parties to the conflict and the mediator or
facilitator of the settlement, or persons or bodies under whose auspices the settlement took
place but who are not at all parties to the conflict, are not contracting parties and who do
not claim any obligation from the contracting parties or incur any obligation from the
settlement.
46

41. In this case, the parties to the conflict are the lawful authority of the State and the RUF
which has no status of statehood and is to all intents and purposes a faction within the state.
The non-contracting signatories of the Lom Agreement were moral guarantors of the
principle that, in the terms of Article XXXIV of the Agreement, "this peace agreement is
implemented with integrity and in good faith by both parties". The moral guarantors assumed
no legal obligation. It is recalled that the UN by its representative appended, presumably for
avoidance of doubt, an understanding of the extent of the agreement to be implemented
as not including certain international crimes.
42. An international agreement in the nature of a treaty must create rights and obligations
regulated by international law so that a breach of its terms will be a breach determined
under international law which will also provide principle means of enforcement. The Lom
Agreement created neither rights nor obligations capable of being regulated by international
law. An agreement such as the Lom Agreement which brings to an end an internal armed
conflict no doubt creates a factual situation of restoration of peace that the international
community acting through the Security Council may take note of. That, however, will not
convert it to an international agreement which creates an obligation enforceable in
international, as distinguished from municipal, law. A breach of the terms of such a peace
agreement resulting in resumption of internal armed conflict or creating a threat to peace in
the determination of the Security Council may indicate a reversal of the factual situation of
peace to be visited with possible legal consequences arising from the new situation of
conflict created. Such consequences such as action by the Security Council pursuant to
Chapter VII arise from the situation and not from the agreement, nor from the obligation
imposed by it. Such action cannot be regarded as a remedy for the breach. A peace
agreement which settles an internal armed conflict cannot be ascribed the same status as
one which settles an international armed conflict which, essentially, must be between two or
more warring States. The Lom Agreement cannot be characterised as an international
instrument. x x x" (Emphasis, italics and underscoring supplied)
Similarly, that the MOA-AD would have been signed by representatives of States and international
organizations not parties to the Agreement would not have sufficed to vest in it a binding character
under international law.
In another vein, concern has been raised that the MOA-AD would amount to a unilateral
declaration of the Philippine State, binding under international law, that it would comply with all the
stipulations stated therein, with the result that it would have to amend its Constitution accordingly
regardless of the true will of the people. Cited as authority for this view is Australia v. France,
181
also
known as the Nuclear Tests Case, decided by the International Court of Justice (ICJ).
In the Nuclear Tests Case, Australia challenged before the ICJ the legality of France's nuclear tests in
the South Pacific. France refused to appear in the case, but public statements from its President,
and similar statements from other French officials including its Minister of Defence, that its 1974 series
of atmospheric tests would be its last, persuaded the ICJ to dismiss the case.
182
Those statements, the
ICJ held, amounted to a legal undertaking addressed to the international community, which
required no acceptance from other States for it to become effective.
Essential to the ICJ ruling is its finding that the French government intended to be bound to the
international community in issuing its public statements, viz:
43. It is well recognized that declarations made by way of unilateral acts, concerning legal or
factual situations, may have the effect of creating legal obligations. Declarations of this kind
may be, and often are, very specific. When it is the intention of the State making the
declaration that it should become bound according to its terms, that intention confers on the
47

declaration the character of a legal undertaking, the State being thenceforth legally required
to follow a course of conduct consistent with the declaration. An undertaking of this kind, if
given publicly, and with an intent to be bound, even though not made within the context of
international negotiations, is binding. In these circumstances, nothing in the nature of a quid
pro quo nor any subsequent acceptance of the declaration, nor even any reply or reaction
from other States, is required for the declaration to take effect, since such a requirement
would be inconsistent with the strictly unilateral nature of the juridical act by which the
pronouncement by the State was made.
44. Of course, not all unilateral acts imply obligation; but a State may choose to take up a
certain position in relation to a particular matter with the intention of being bound-the
intention is to be ascertained by interpretation of the act. When States make statements by
which their freedom of action is to be limited, a restrictive interpretation is called for.
x x x x
51. In announcing that the 1974 series of atmospheric tests would be the last, the French
Government conveyed to the world at large, including the Applicant, its intention effectively
to terminate these tests. It was bound to assume that other States might take note of these
statements and rely on their being effective. The validity of these statements and their legal
consequences must be considered within the general framework of the security of
international intercourse, and the confidence and trust which are so essential in the relations
among States. It is from the actual substance of these statements, and from the
circumstances attending their making, that the legal implications of the unilateral act must be
deduced. The objects of these statements are clear and they were addressed to the
international community as a whole, and the Court holds that they constitute an undertaking
possessing legal effect. The Court considers *270 that the President of the Republic, in
deciding upon the effective cessation of atmospheric tests, gave an undertaking to the
international community to which his words were addressed. x x x (Emphasis and
underscoring supplied)
As gathered from the above-quoted ruling of the ICJ, public statements of a state representative
may be construed as a unilateral declaration only when the following conditions are present: the
statements were clearly addressed to the international community, the state intended to be bound
to that community by its statements, and that not to give legal effect to those statements would be
detrimental to the security of international intercourse. Plainly, unilateral declarations arise only in
peculiar circumstances.
The limited applicability of the Nuclear Tests Case ruling was recognized in a later case decided by
the ICJ entitledBurkina Faso v. Mali,
183
also known as the Case Concerning the Frontier Dispute. The
public declaration subject of that case was a statement made by the President of Mali, in an
interview by a foreign press agency, that Mali would abide by the decision to be issued by a
commission of the Organization of African Unity on a frontier dispute then pending between Mali
and Burkina Faso.
Unlike in the Nuclear Tests Case, the ICJ held that the statement of Mali's President was not a
unilateral act with legal implications. It clarified that its ruling in the Nuclear Tests case rested on the
peculiar circumstances surrounding the French declaration subject thereof, to wit:
40. In order to assess the intentions of the author of a unilateral act, account must be taken of
all the factual circumstances in which the act occurred. For example, in the Nuclear Tests
cases, the Court took the view that since the applicant States were not the only ones
concerned at the possible continuance of atmospheric testing by the French Government,
48

that Government's unilateral declarations had conveyed to the world at large, including the
Applicant, its intention effectively to terminate these tests (I.C.J. Reports 1974, p. 269, para.
51; p. 474, para. 53). In the particular circumstances of those cases, the French Government
could not express an intention to be bound otherwise than by unilateral declarations. It is
difficult to see how it could have accepted the terms of a negotiated solution with each of the
applicants without thereby jeopardizing its contention that its conduct was lawful. The
circumstances of the present case are radically different. Here, there was nothing to hinder
the Parties from manifesting an intention to accept the binding character of the conclusions of
the Organization of African Unity Mediation Commission by the normal method: a formal
agreement on the basis of reciprocity. Since no agreement of this kind was concluded
between the Parties, the Chamber finds that there are no grounds to interpret the
declaration made by Mali's head of State on 11 April 1975 as a unilateral act with legal
implications in regard to the present case. (Emphasis and underscoring supplied)
Assessing the MOA-AD in light of the above criteria, it would not have amounted to a unilateral
declaration on the part of the Philippine State to the international community. The Philippine panel
did not draft the same with the clear intention of being bound thereby to the international
community as a whole or to any State, but only to the MILF. While there were States and
international organizations involved, one way or another, in the negotiation and projected signing of
the MOA-AD, they participated merely as witnesses or, in the case of Malaysia, as facilitator. As held
in the Lom Accord case, the mere fact that in addition to the parties to the conflict, the peace
settlement is signed by representatives of states and international organizations does not mean that
the agreement is internationalized so as to create obligations in international law.
Since the commitments in the MOA-AD were not addressed to States, not to give legal effect to
such commitments would not be detrimental to the security of international intercourse - to the trust
and confidence essential in the relations among States.
In one important respect, the circumstances surrounding the MOA-AD are closer to that of Burkina
Faso wherein, as already discussed, the Mali President's statement was not held to be a binding
unilateral declaration by the ICJ. As in that case, there was also nothing to hinder the Philippine
panel, had it really been its intention to be bound to other States, to manifest that intention by
formal agreement. Here, that formal agreement would have come about by the inclusion in the
MOA-AD of a clear commitment to be legally bound to the international community, not just the
MILF, and by an equally clear indication that the signatures of the participating states-
representatives would constitute an acceptance of that commitment. Entering into such a formal
agreement would not have resulted in a loss of face for the Philippine government before the
international community, which was one of the difficulties that prevented the French Government
from entering into a formal agreement with other countries. That the Philippine panel did not enter
into such a formal agreement suggests that it had no intention to be bound to the international
community. On that ground, the MOA-AD may not be considered a unilateral declaration under
international law.
The MOA-AD not being a document that can bind the Philippines under international law
notwithstanding, respondents' almost consummated act of guaranteeing amendments to the legal
framework is, by itself, sufficient to constitute grave abuse of discretion. The grave abuse lies not in
the fact that they considered, as a solution to the Moro Problem, the creation of a state within a
state, but in their brazen willingness toguarantee that Congress and the sovereign Filipino people
would give their imprimatur to their solution. Upholding such an act would amount to authorizing a
usurpation of the constituent powers vested only in Congress, a Constitutional Convention, or the
people themselves through the process of initiative, for the only way that the Executive can ensure
the outcome of the amendment process is through an undue influence or interference with that
process.
49

The sovereign people may, if it so desired, go to the extent of giving up a portion of its own territory
to the Moros for the sake of peace, for it can change the Constitution in any it wants, so long as the
change is not inconsistent with what, in international law, is known as Jus Cogens.
184
Respondents,
however, may not preempt it in that decision.
SUMMARY
The petitions are ripe for adjudication. The failure of respondents to consult the local government
units or communities affected constitutes a departure by respondents from their mandate under
E.O. No. 3. Moreover, respondents exceeded their authority by the mere act of guaranteeing
amendments to the Constitution. Any alleged violation of the Constitution by any branch of
government is a proper matter for judicial review.
As the petitions involve constitutional issues which are of paramount public interest or of
transcendental importance, the Court grants the petitioners, petitioners-in-intervention and
intervening respondents the requisitelocus standi in keeping with the liberal stance adopted in David
v. Macapagal-Arroyo.
Contrary to the assertion of respondents that the non-signing of the MOA-AD and the eventual
dissolution of the GRP Peace Panel mooted the present petitions, the Court finds that the present
petitions provide an exception to the "moot and academic" principle in view of (a) the grave
violation of the Constitution involved; (b) the exceptional character of the situation and paramount
public interest; (c) the need to formulate controlling principles to guide the bench, the bar, and the
public; and (d) the fact that the case is capable of repetition yet evading review.
The MOA-AD is a significant part of a series of agreements necessary to carry out the GRP-MILF Tripoli
Agreement on Peace signed by the government and the MILF back in June 2001. Hence, the
present MOA-AD can be renegotiated or another one drawn up that could contain similar or
significantly dissimilar provisions compared to the original.
The Court, however, finds that the prayers for mandamus have been rendered moot in view of the
respondents' action in providing the Court and the petitioners with the official copy of the final draft
of the MOA-AD and its annexes.
The people's right to information on matters of public concern under Sec. 7, Article III of the
Constitution is insplendid symmetry with the state policy of full public disclosure of all its transactions
involving public interest under Sec. 28, Article II of the Constitution. The right to information
guarantees the right of the people to demand information, while Section 28 recognizes the duty of
officialdom to give information even if nobody demands. The complete and effective exercise of
the right to information necessitates that its complementary provision on public disclosure derive the
same self-executory nature, subject only to reasonable safeguards or limitations as may be provided
by law.
The contents of the MOA-AD is a matter of paramount public concern involving public interest in the
highest order. In declaring that the right to information contemplates steps and negotiations leading
to the consummation of the contract, jurisprudence finds no distinction as to the executory nature or
commercial character of the agreement.
An essential element of these twin freedoms is to keep a continuing dialogue or process of
communication between the government and the people. Corollary to these twin rights is the
design for feedback mechanisms. The right to public consultation was envisioned to be a species of
these public rights.
50

At least three pertinent laws animate these constitutional imperatives and justify the exercise of the
people's right to be consulted on relevant matters relating to the peace agenda.
One, E.O. No. 3 itself is replete with mechanics for continuing consultations on both national and
local levels and for a principal forum for consensus-building. In fact, it is the duty of the Presidential
Adviser on the Peace Process to conduct regular dialogues to seek relevant information, comments,
advice, and recommendations from peace partners and concerned sectors of society.
Two, Republic Act No. 7160 or the Local Government Code of 1991 requires all national offices to
conduct consultations before any project or program critical to the environment and human
ecology including those that may call for the eviction of a particular group of people residing in
such locality, is implemented therein. The MOA-AD is one peculiar program that unequivocally and
unilaterally vests ownership of a vast territory to the Bangsamoro people, which could pervasively
and drastically result to the diaspora or displacement of a great number of inhabitants from their
total environment.
Three, Republic Act No. 8371 or the Indigenous Peoples Rights Act of 1997 provides for clear-cut
procedure for the recognition and delineation of ancestral domain, which entails, among other
things, the observance of the free and prior informed consent of the Indigenous Cultural
Communities/Indigenous Peoples. Notably, the statute does not grant the Executive Department or
any government agency the power to delineate and recognize an ancestral domain claim by mere
agreement or compromise.
The invocation of the doctrine of executive privilege as a defense to the general right to information
or the specific right to consultation is untenable. The various explicit legal provisions fly in the face of
executive secrecy. In any event, respondents effectively waived such defense after it
unconditionally disclosed the official copies of the final draft of the MOA-AD, for judicial compliance
and public scrutiny.
In sum, the Presidential Adviser on the Peace Process committed grave abuse of discretion when he
failed to carry out the pertinent consultation process, as mandated by E.O. No. 3, Republic Act No.
7160, and Republic Act No. 8371. The furtive process by which the MOA-AD was designed and
crafted runs contrary to and in excess of the legal authority, and amounts to a whimsical, capricious,
oppressive, arbitrary and despotic exercise thereof. It illustrates a gross evasion of positive duty and
a virtual refusal to perform the duty enjoined.
The MOA-AD cannot be reconciled with the present Constitution and laws. Not only its specific
provisions but the very concept underlying them, namely, the associative relationship envisioned
between the GRP and the BJE, areunconstitutional, for the concept presupposes that the
associated entity is a state and implies that the same is on its way to independence.
While there is a clause in the MOA-AD stating that the provisions thereof inconsistent with the present
legal framework will not be effective until that framework is amended, the same does not cure its
defect. The inclusion of provisions in the MOA-AD establishing an associative relationship between
the BJE and the Central Government is, itself, a violation of the Memorandum of Instructions From
The President dated March 1, 2001, addressed to the government peace panel. Moreover, as the
clause is worded, it virtually guarantees that the necessary amendments to the Constitution and the
laws will eventually be put in place. Neither the GRP Peace Panel nor the President herself is
authorized to make such a guarantee. Upholding such an act would amount to authorizing a
usurpation of the constituent powers vested only in Congress, a Constitutional Convention, or the
people themselves through the process of initiative, for the only way that the Executive can ensure
the outcome of the amendment process is through an undue influence or interference with that
process.
51

While the MOA-AD would not amount to an international agreement or unilateral declaration
binding on the Philippines under international law, respondents' act of guaranteeing amendments is,
by itself, already a constitutional violation that renders the MOA-AD fatally defective.
WHEREFORE, respondents' motion to dismiss is DENIED. The main and intervening petitions are GIVEN
DUE COURSE and hereby GRANTED.
The Memorandum of Agreement on the Ancestral Domain Aspect of the GRP-MILF Tripoli
Agreement on Peace of 2001 is declared contrary to law and the Constitution.
SO ORDERED.

52

[G.R. No. 73748, May 22, 1986]

LAWYERS LEAGUE FOR A BETTER PHILIPPINES AND/OR OLIVER A. LOZANO VS. PRESIDENT CORAZON C.
AQUINO, ET AL.

SIRS/MESDAMES:

Quoted hereunder, for your information, is a resolution of this Court MAY 22, 1986

In G.R. No. 73748, Lawyers League for a Better Philippines vs. President Corazon C. Aquino, et al.;
G.R. No. 73972, People's Crusade for Supremacy of the Constitution vs. Mrs. Cory Aquino, et al., and
G.R. No. 73990, Councilor Clifton U. Ganay vs. Corazon C. Aquino, et al., the legitimacy of the
government of President Aquino is questioned. It is claimed that her government is illegal because it
was not established pursuant to the 1973 Constitution.
As early as April 10, 1986, this Court* had already voted to dismiss the petitions for the reasons to be
stated below. On April 17, 1986, Atty. Lozano as counsel for the petitioners in G.R. Nos. 73748 and
73972 withdrew the petitions and manifested that they would pursue the question by extra-judicial
methods. The withdrawal is functus oficio.
The three petitions obviously are not impressed with merit. Petitioners have no personality to sue and
their petitions state no cause of action. For the legitimacy of the Aquino government is not a
justiciable matter. It belongs to the realm of politics where only the people of the Philippines are the
judge. And the people have made the judgment; they have accepted the government of
President Corazon C. Aquino which is in effective control of the entire country so that it is not merely
a de factogovernment but is in fact and law a de jure government. Moreover, the community of
nations has recognized the legitimacy of the present government. All the eleven members of this
Court, as reorganized, have sworn to uphold the fundamental law of the Republic under her
government.

In view of the foregoing, the petitions are hereby dismissed.
Very truly yours,
(Sgd.) GLORIA C. PARAS
Clerk of Court
(NOTE: SUCCEEDING CASE IS THE REFERENCE OF THE ABOVE DECISION)
G.R. No. 76180 October 24, 1986
IN RE: SATURNINO V. BERMUDEZ, petitioner.
R E S O L U T IO N
PER CURIAM:
In a petition for declaratory relief impleading no respondents, petitioner, as a lawyer, quotes
the first paragraph of Section 5 (not Section 7 as erroneously stated) of Article XVIII of the
proposed 1986 Constitution, which provides in full as follows:
Sec. 5. The six-year term of the incumbent President and Vice-President elected in the
February 7, 1986 election is, for purposes of synchronization of elections, hereby extended to
noon of June 30, 1992.
53

The first regular elections for the President and Vice-President under this Constitution shall be
held on the second Monday of May, 1992.
Claiming that the said provision "is not clear" as to whom it refers, he then asks the Court "to
declare and answer the question of the construction and definiteness as to who, among the
present incumbent President Corazon Aquino and Vice-President Salvador Laurel and the
elected President Ferdinand E. Marcos and Vice-President Arturo M. Tolentino being referred
to under the said Section 7 (sic) of ARTICLE XVIII of the TRANSITORY PROVISIONS of the
proposed 1986 Constitution refers to, . ...
The petition is dismissed outright for lack of jurisdiction and for lack for cause of action.
Prescinding from petitioner's lack of personality to sue or to bring this action, (Tan vs.
Macapagal, 43 SCRA 677), it is elementary that this Court assumes no jurisdiction over
petitions for declaratory relief. More importantly, the petition amounts in effect to a suit
against the incumbent President of the Republic, President Corazon C. Aquino, and it is
equally elementary that incumbent Presidents are immune from suit or from being brought to
court during the period of their incumbency and tenure.
The petition furthermore states no cause of action. Petitioner's allegation of ambiguity or
vagueness of the aforequoted provision is manifestly gratuitous, it being a matter of public
record and common public knowledge that the Constitutional Commission refers therein to
incumbent President Corazon C. Aquino and Vice-President Salvador H. Laurel, and to no
other persons, and provides for the extension of their term to noon of June 30, 1992 for
purposes of synchronization of elections. Hence, the second paragraph of the cited section
provides for the holding on the second Monday of May, 1992 of the first regular elections for
the President and Vice-President under said 1986 Constitution. In previous cases, the
legitimacy of the government of President Corazon C. Aquino was likewise sought to be
questioned with the claim that it was not established pursuant to the 1973 Constitution. The
said cases were dismissed outright by this court which held that:
Petitioners have no personality to sue and their petitions state no cause of action. For the
legitimacy of the Aquino government is not a justiciable matter. It belongs to the realm of
politics where only the people of the Philippines are the judge. And the people have made
the judgment; they have accepted the government of President Corazon C. Aquino which is
in effective control of the entire country so that it is not merely a de facto government but in
fact and law a de jure government. Moreover, the community of nations has recognized the
legitimacy of tlie present government. All the eleven members of this Court, as reorganized,
have sworn to uphold the fundamental law of the Republic under her government. (Joint
Resolution of May 22, 1986 in G.R. No. 73748 [Lawyers League for a Better Philippines, etc. vs.
President Corazon C. Aquino, et al.]; G.R. No. 73972 [People's Crusade for Supremacy of the
Constitution. etc. vs. Mrs. Cory Aquino, et al.]; and G.R. No. 73990 [Councilor Clifton U. Ganay
vs. Corazon C. Aquino, et al.])
For the above-quoted reason, which are fully applicable to the petition at bar, mutatis
mutandis, there can be no question that President Corazon C. Aquino and Vice-President
Salvador H. Laurel are the incumbent and legitimate President and Vice-President of the
Republic of the Philippines.or the above-quoted reasons, which are fully applicable to the
petition at bar,
ACCORDINGLY, the petition is hereby dismissed.
Teehankee, C.J., Feria, Yap, Fernan, Narvasa, Alampay and Paras, JJ., concur.
54

MELENCIO-HERRERA, J., concurring:
GUTIERREZ, Jr., J., concurring:
FELICIANO, JJ., concurring.
The petitioner asks the Court to declare who are "the incumbent President and Vice President
elected in the February 7, 1986 elections" as stated in Article XVIII, Section 5 of the Draft
Constitution adopted by the Constitutional Commission of 1986.
We agree that the petition deserves outright dismissal as this Court has no original jurisdiction
over petitions for declaratory relief.
As to lack of cause of action, the petitioner's prayer for a declaration as to who were elected
President and Vice President in the February 7, 1986 elections should be addressed not to this
Court but to other departments of government constitutionally burdened with the task of
making that declaration.
The 1935 Constitution, the 1913 Constitution as amended, and the 1986 Draft Constitution
uniformly provide 'that boards of canvassers in each province and city shall certified who
were elected President and Vice President in their respective areas. The certified returns are
transmitted to the legislature which proclaims, through the designated Presiding Head, who
were duty elected.
Copies of the certified returns from the provincial and city boards of canvassers have not
been furnished this Court nor is there any need to do so. In the absence of a legislature, we
cannot assume the function of stating, and neither do we have any factual or legal capacity
to officially declare, who were elected President and Vice President in the February 7, 1986
elections.
As to who are the incumbent President and Vice President referred to in the 1986 Draft
Constitution, we agree that there is no doubt the 1986 Constitutional Commission referred to
President Corazon C. Aquino and Vice President Salvador H. Laurel.
Finally, we agree with the Resolution of the Court in G.R. Nos. 73748, 73972, and 73990.
For the foregoing reasons, we vote to DISMISS the instant petition

55

[G.R. No. 152154. July 15, 2003]
REPUBLIC OF THE PHILIPPINES, petitioner, vs. HONORABLE SANDIGANBAYAN (SPECIAL FIRST DIVISION),
FERDINAND E. MARCOS (REPRESENTED BY HIS ESTATE/HEIRS: IMELDA R. MARCOS, MARIA IMELDA
[IMEE] MARCOS-MANOTOC, FERDINAND R. MARCOS, JR. AND IRENE MARCOS-ARANETA) AND
IMELDA ROMUALDEZ MARCOS, respondents.
D E C I S I O N
CORONA, J.:
This is a petition for certiorari under Rule 65 of the Rules of Court seeking to (1) set aside the
Resolution dated January 31, 2002 issued by the Special First Division of the Sandiganbayan in Civil
Case No. 0141 entitled Republic of the Philippines vs. Ferdinand E. Marcos, et. al., and (2) reinstate its
earlier decision dated September 19, 2000 which forfeited in favor of petitioner Republic of the
Philippines (Republic) the amount held in escrow in the Philippine National Bank (PNB) in the
aggregate amount of US$658,175,373.60 as of January 31, 2002.
BACKGROUND OF THE CASE
On December 17, 1991, petitioner Republic, through the Presidential Commission on Good
Government (PCGG), represented by the Office of the Solicitor General (OSG), filed a petition for
forfeiture before the Sandiganbayan, docketed as Civil Case No. 0141 entitled Republic of the
Philippines vs. Ferdinand E. Marcos, represented by his Estate/Heirs and Imelda R. Marcos, pursuant
to RA 1379
[1]
in relation to Executive Order Nos. 1,
[2]
2,
[3]
14
[4]
and 14-A.
[5]

In said case, petitioner sought the declaration of the aggregate amount of US$356 million (now
estimated to be more than US$658 million inclusive of interest) deposited in escrow in the PNB, as ill-
gotten wealth. The funds were previously held by the following five account groups, using various
foreign foundations in certain Swiss banks:
(1) Azio-Verso-Vibur Foundation accounts;
(2) Xandy-Wintrop: Charis-Scolari-Valamo-Spinus- Avertina Foundation accounts;
(3) Trinidad-Rayby-Palmy Foundation accounts;
(4) Rosalys-Aguamina Foundation accounts and
(5) Maler Foundation accounts.
In addition, the petition sought the forfeiture of US$25 million and US$5 million in treasury notes
which exceeded the Marcos couples salaries, other lawful income as well as income from
legitimately acquired property. The treasury notes are frozen at the Central Bank of the
Philippines, now Bangko Sentral ng Pilipinas, by virtue of the freeze order issued by the PCGG.
On October 18, 1993, respondents Imelda R. Marcos, Maria Imelda M. Manotoc, Irene M.
Araneta and Ferdinand R. Marcos, Jr. filed their answer.
Before the case was set for pre-trial, a General Agreement and the Supplemental
Agreements
[6]
dated December 28, 1993 were executed by the Marcos children and then PCGG
Chairman Magtanggol Gunigundo for a global settlement of the assets of the Marcos
family. Subsequently, respondent Marcos children filed a motion dated December 7, 1995 for the
approval of said agreements and for the enforcement thereof.
The General Agreement/Supplemental Agreements sought to identify, collate, cause the
inventory of and distribute all assets presumed to be owned by the Marcos family under the
conditions contained therein. The aforementioned General Agreement specified in one of its
premises or whereas clauses the fact that petitioner obtained a judgment from the Swiss Federal
56

Tribunal on December 21, 1990, that the Three Hundred Fifty-six Million U.S. dollars (US$356 million)
belongs in principle to the Republic of the Philippines provided certain conditionalities are met x x
x. The said decision of the Swiss Federal Supreme Court affirmed the decision of Zurich District
Attorney Peter Consandey, granting petitioners request for legal assistance.
[7]
Consandey declared
the various deposits in the name of the enumerated foundations to be of illegal provenance and
ordered that they be frozen to await the final verdict in favor of the parties entitled to restitution.
Hearings were conducted by the Sandiganbayan on the motion to approve the
General/Supplemental Agreements. Respondent Ferdinand, Jr. was presented as witness for the
purpose of establishing the partial implementation of said agreements.
On October 18, 1996, petitioner filed a motion for summary judgment and/or judgment on the
pleadings. Respondent Mrs. Marcos filed her opposition thereto which was later adopted by
respondents Mrs. Manotoc, Mrs. Araneta and Ferdinand, Jr.
In its resolution dated November 20, 1997, the Sandiganbayan denied petitioners motion for
summary judgment and/or judgment on the pleadings on the ground that the motion to approve
the compromise agreement (took) precedence over the motion for summary judgment.
Respondent Mrs. Marcos filed a manifestation on May 26, 1998 claiming she was not a party to
the motion for approval of the Compromise Agreement and that she owned 90% of the funds with
the remaining 10% belonging to the Marcos estate.
Meanwhile, on August 10, 1995, petitioner filed with the District Attorney in Zurich, Switzerland, an
additional request for the immediate transfer of the deposits to an escrow account in the PNB. The
request was granted. On appeal by the Marcoses, the Swiss Federal Supreme Court, in a decision
dated December 10, 1997, upheld the ruling of the District Attorney of Zurich granting the request for
the transfer of the funds. In 1998, the funds were remitted to the Philippines in escrow. Subsequently,
respondent Marcos children moved that the funds be placed in custodia legis because the deposit
in escrow in the PNB was allegedly in danger of dissipation by petitioner. The Sandiganbayan, in its
resolution dated September 8, 1998, granted the motion.
After the pre-trial and the issuance of the pre-trial order and supplemental pre-trial order dated
October 28, 1999 and January 21, 2000, respectively, the case was set for trial. After several
resettings, petitioner, on March 10, 2000, filed another motion for summary judgment pertaining to
the forfeiture of the US$356 million, based on the following grounds:
I
THE ESSENTIAL FACTS WHICH WARRANT THE FORFEITURE OF THE FUNDS SUBJECT OF THE PETITION
UNDER R.A. NO. 1379 ARE ADMITTED BY RESPONDENTS IN THEIR PLEADINGS AND OTHER SUBMISSIONS
MADE IN THE COURSE OF THE PROCEEDING.
II
RESPONDENTS ADMISSION MADE DURING THE PRE-TRIAL THAT THEY DO NOT HAVE ANY INTEREST OR
OWNERSHIP OVER THE FUNDS SUBJECT OF THE ACTION FOR FORFEITURE TENDERS NO GENUINE ISSUE
OR CONTROVERSY AS TO ANY MATERIAL FACT IN THE PRESENT ACTION, THUS WARRANTING THE
RENDITION OF SUMMARY JUDGMENT.
[8]

Petitioner contended that, after the pre-trial conference, certain facts were established,
warranting a summary judgment on the funds sought to be forfeited.
Respondent Mrs. Marcos filed her opposition to the petitioners motion for summary judgment,
which opposition was later adopted by her co-respondents Mrs. Manotoc, Mrs. Araneta and
Ferdinand, Jr.
57

On March 24, 2000, a hearing on the motion for summary judgment was conducted.
In a decision
[9]
dated September 19, 2000, the Sandiganbayan granted petitioners motion for
summary judgment:
CONCLUSION
There is no issue of fact which calls for the presentation of evidence.
The Motion for Summary Judgment is hereby granted.
The Swiss deposits which were transmitted to and now held in escrow at the PNB are deemed
unlawfully acquired as ill-gotten wealth.
DISPOSITION
WHEREFORE, judgment is hereby rendered in favor of the Republic of the Philippines and against the
respondents, declaring the Swiss deposits which were transferred to and now deposited in escrow at
the Philippine National Bank in the total aggregate value equivalent to US$627,608,544.95 as of
August 31, 2000 together with the increments thereof forfeited in favor of the State.
[10]

Respondent Mrs. Marcos filed a motion for reconsideration dated September 26, 2000. Likewise,
Mrs. Manotoc and Ferdinand, Jr. filed their own motion for reconsideration dated October 5, 2000.
Mrs. Araneta filed a manifestation dated October 4, 2000 adopting the motion for reconsideration of
Mrs. Marcos, Mrs. Manotoc and Ferdinand, Jr.
Subsequently, petitioner filed its opposition thereto.
In a resolution
[11]
dated January 31, 2002, the Sandiganbayan reversed its September 19, 2000
decision, thus denying petitioners motion for summary judgment:
CONCLUSION
In sum, the evidence offered for summary judgment of the case did not prove that the money in the
Swiss Banks belonged to the Marcos spouses because no legal proof exists in the record as to the
ownership by the Marcoses of the funds in escrow from the Swiss Banks.
The basis for the forfeiture in favor of the government cannot be deemed to have been established
and our judgment thereon, perforce, must also have been without basis.
WHEREFORE, the decision of this Court dated September 19, 2000 is reconsidered and set aside, and
this case is now being set for further proceedings.
[12]

Hence, the instant petition. In filing the same, petitioner argues that the Sandiganbayan, in
reversing its September 19, 2000 decision, committed grave abuse of discretion amounting to lack or
excess of jurisdiction considering that --
I
PETITIONER WAS ABLE TO PROVE ITS CASE IN ACCORDANCE WITH THE REQUISITES OF SECTIONS 2
AND 3 OF R.A. NO. 1379:
A. PRIVATE RESPONDENTS CATEGORICALLY ADMITTED NOT ONLY THE PERSONAL
CIRCUMSTANCES OF FERDINAND E. MARCOS AND IMELDA R. MARCOS AS PUBLIC
58

OFFICIALS BUT ALSO THE EXTENT OF THEIR SALARIES AS SUCH PUBLIC OFFICIALS, WHO
UNDER THE CONSTITUTION, WERE PROHIBITED FROM ENGAGING IN THE MANAGEMENT
OF FOUNDATIONS.
B. PRIVATE RESPONDENTS ALSO ADMITTED THE EXISTENCE OF THE SWISS DEPOSITS AND
THEIR OWNERSHIP THEREOF:
1. ADMISSIONS IN PRIVATE RESPONDENTS ANSWER;
2. ADMISSION IN THE GENERAL / SUPPLEMENTAL AGREEMENTS THEY SIGNED AND
SOUGHT TO IMPLEMENT;
3. ADMISSION IN A MANIFESTATION OF PRIVATE RESPONDENT IMELDA R. MARCOS
AND IN THE MOTION TO PLACE THE RES INCUSTODIA LEGIS; AND
4. ADMISSION IN THE UNDERTAKING TO PAY THE HUMAN RIGHTS VICTIMS.
C. PETITIONER HAS PROVED THE EXTENT OF THE LEGITIMATE INCOME OF FERDINAND E.
MARCOS AND IMELDA R. MARCOS AS PUBLIC OFFICIALS.
D. PETITIONER HAS ESTABLISHED A PRIMA FACIE PRESUMPTION OF UNLAWFULLY ACQUIRED
WEALTH.
II
SUMMARY JUDGMENT IS PROPER SINCE PRIVATE RESPONDENTS HAVE NOT RAISED ANY GENUINE ISSUE
OF FACT CONSIDERING THAT:
A. PRIVATE RESPONDENTS DEFENSE THAT SWISS DEPOSITS WERE LAWFULLY ACQUIRED
DOES NOT ONLY FAIL TO TENDER AN ISSUE BUT IS CLEARLY A SHAM; AND
B. IN SUBSEQUENTLY DISCLAIMING OWNERSHIP OF THE SWISS DEPOSITS, PRIVATE
RESPONDENTS ABANDONED THEIR SHAM DEFENSE OF LEGITIMATE ACQUISITION, AND THIS
FURTHER JUSTIFIED THE RENDITION OF A SUMMARY JUDGMENT.
III
THE FOREIGN FOUNDATIONS NEED NOT BE IMPLEADED.
IV
THE HONORABLE PRESIDING JUSTICE COMMITTED GRAVE ABUSE OF DISCRETION IN REVERSING
HIMSELF ON THE GROUND THAT ORIGINAL COPIES OF THE AUTHENTICATED SWISS DECISIONS AND
THEIR AUTHENTICATED TRANSLATIONS HAVE NOT BEEN SUBMITTED TO THE COURT, WHEN EARLIER THE
SANDIGANBAYAN HAS QUOTED EXTENSIVELY A PORTION OF THE TRANSLATION OF ONE OF THESE
SWISS DECISIONS IN HIS PONENCIA DATED JULY 29, 1999 WHEN IT DENIED THE MOTION TO RELEASE
ONE HUNDRED FIFTY MILLION US DOLLARS ($150,000,000.00) TO THE HUMAN RIGHTS VICTIMS.
V
PRIVATE RESPONDENTS ARE DEEMED TO HAVE WAIVED THEIR OBJECTION TO THE AUTHENTICITY OF THE
SWISS FEDERAL SUPREME COURT DECISIONS.
[13]

59

Petitioner, in the main, asserts that nowhere in the respondents motions for reconsideration and
supplemental motion for reconsideration were the authenticity, accuracy and admissibility of the
Swiss decisions ever challenged. Otherwise stated, it was incorrect for the Sandiganbayan to use the
issue of lack of authenticated translations of the decisions of the Swiss Federal Supreme Court as the
basis for reversing itself because respondents themselves never raised this issue in their motions for
reconsideration and supplemental motion for reconsideration. Furthermore, this particular issue
relating to the translation of the Swiss court decisions could not be resurrected anymore because
said decisions had been previously utilized by the Sandiganbayan itself in resolving a decisive issue
before it.
Petitioner faults the Sandiganbayan for questioning the non-production of the authenticated
translations of the Swiss Federal Supreme Court decisions as this was a marginal and technical
matter that did not diminish by any measure the conclusiveness and strength of what had been
proven and admitted before the Sandiganbayan, that is, that the funds deposited by the Marcoses
constituted ill-gotten wealth and thus belonged to the Filipino people.
In compliance with the order of this Court, Mrs. Marcos filed her comment to the petition on May
22, 2002. After several motions for extension which were all granted, the comment of Mrs. Manotoc
and Ferdinand, Jr. and the separate comment of Mrs. Araneta were filed on May 27, 2002.
Mrs. Marcos asserts that the petition should be denied on the following grounds:
A.
PETITIONER HAS A PLAIN, SPEEDY, AND ADEQUATE REMEDY AT THE SANDIGANBAYAN.
B.
THE SANDIGANBAYAN DID NOT ABUSE ITS DISCRETION IN SETTING THE CASE FOR FURTHER
PROCEEDINGS.
[14]

Mrs. Marcos contends that petitioner has a plain, speedy and adequate remedy in the ordinary
course of law in view of the resolution of the Sandiganbayan dated January 31, 2000 directing
petitioner to submit the authenticated translations of the Swiss decisions. Instead of availing of said
remedy, petitioner now elevates the matter to this Court. According to Mrs. Marcos, a petition for
certiorari which does not comply with the requirements of the rules may be dismissed. Since
petitioner has a plain, speedy and adequate remedy, that is, to proceed to trial and submit
authenticated translations of the Swiss decisions, its petition before this Court must be dismissed.
Corollarily, the Sandiganbayans ruling to set the case for further proceedings cannot and should
not be considered a capricious and whimsical exercise of judgment.
Likewise, Mrs. Manotoc and Ferdinand, Jr., in their comment, prayed for the dismissal of the
petition on the grounds that:
(A)
BY THE TIME PETITIONER FILED ITS MOTION FOR SUMMARY JUDGMENT ON 10 MARCH 2000, IT WAS
ALREADY BARRED FROM DOING SO.
(1) The Motion for Summary Judgment was based on private respondents Answer and
other documents that had long been in the records of the case. Thus, by the time the
Motion was filed on 10 March 2000, estoppel by laches had already set in against
petitioner.
(2) By its positive acts and express admissions prior to filing the Motion for Summary
Judgment on 10 March 1990, petitioner had legally bound itself to go to trial on the
60

basis of existing issues. Thus, it clearly waived whatever right it had to move for
summary judgment.
(B)
EVEN ASSUMING THAT PETITIONER WAS NOT LEGALLY BARRED FROM FILING THE MOTION FOR
SUMMARY JUDGMENT, THE SANDIGANBAYAN IS CORRECT IN RULING THAT PETITIONER HAS NOT YET
ESTABLISHED A PRIMA FACIE CASE FOR THE FORFEITURE OF THE SWISS FUNDS.
(1) Republic Act No. 1379, the applicable law, is a penal statute. As such, its provisions,
particularly the essential elements stated in section 3 thereof, are mandatory in nature.
These should be strictly construed against petitioner and liberally in favor of private
respondents.
(2) Petitioner has failed to establish the third and fourth essential elements in Section 3 of
R.A. 1379 with respect to the identification, ownership, and approximate amount of
the property which the Marcos couple allegedly acquired during their incumbency.
(a) Petitioner has failed to prove that the Marcos couple acquired or own the
Swiss funds.
(b) Even assuming, for the sake of argument, that the fact of acquisition has been
proven, petitioner has categorically admitted that it has no evidence showing
how much of the Swiss funds was acquired during the incumbency of the
Marcos couple from 31 December 1965 to 25 February 1986.
(3) In contravention of the essential element stated in Section 3 (e) of R.A. 1379, petitioner
has failed to establish the other proper earnings and income from legitimately
acquired property of the Marcos couple over and above their government salaries.
(4) Since petitioner failed to prove the three essential elements provided in paragraphs
(c)
[15]
(d),
[16]
and (e)
[17]
of Section 3, R.A. 1379, the inescapable conclusion is that the
prima facie presumption of unlawful acquisition of the Swiss funds has not yet
attached. There can, therefore, be no premature forfeiture of the funds.
(C)
IT WAS ONLY BY ARBITRARILY ISOLATING AND THEN TAKING CERTAIN STATEMENTS MADE BY PRIVATE
RESPONDENTS OUT OF CONTEXT THAT PETITIONER WAS ABLE TO TREAT THESE AS JUDICIAL
ADMISSIONS SUFFICIENT TO ESTABLISH A PRIMA FACIE AND THEREAFTER A CONCLUSIVE CASE TO
JUSTIFY THE FORFEITURE OF THE SWISS FUNDS.
(1) Under Section 27, Rule 130 of the Rules of Court, the General and Supplemental
Agreements, as well as the other written and testimonial statements submitted in
relation thereto, are expressly barred from being admissible in evidence against
private respondents.
(2) Had petitioner bothered to weigh the alleged admissions together with the other
statements on record, there would be a demonstrable showing that no such judicial
admissions were made by private respondents.
(D)
61

SINCE PETITIONER HAS NOT (YET) PROVEN ALL THE ESSENTIAL ELEMENTS TO ESTABLISH A PRIMA FACIE
CASE FOR FORFEITURE, AND PRIVATE RESPONDENTS HAVE NOT MADE ANY JUDICIAL ADMISSION THAT
WOULD HAVE FREED IT FROM ITS BURDEN OF PROOF, THE SANDIGANBAYAN DID NOT COMMIT GRAVE
ABUSE OF DISCRETION IN DENYING THE MOTION FOR SUMMARY JUDGMENT. CERTIORARI, THEREFORE,
DOES NOT LIE, ESPECIALLY AS THIS COURT IS NOT A TRIER OF FACTS.
[18]

For her part, Mrs. Araneta, in her comment to the petition, claims that obviously petitioner is
unable to comply with a very plain requirement of respondent Sandiganbayan. The instant petition
is allegedly an attempt to elevate to this Court matters, issues and incidents which should be
properly threshed out at the Sandiganbayan. To respondent Mrs. Araneta, all other matters, save
that pertaining to the authentication of the translated Swiss Court decisions, are irrelevant and
impertinent as far as this Court is concerned. Respondent Mrs. Araneta manifests that she is as
eager as respondent Sandiganbayan or any interested person to have the Swiss Court decisions
officially translated in our known language. She says the authenticated official English version of the
Swiss Court decisions should be presented. This should stop all speculations on what indeed is
contained therein. Thus, respondent Mrs. Araneta prays that the petition be denied for lack of merit
and for raising matters which, in elaborated fashion, are impertinent and improper before this Court.
PROPRIETY OF PETITIONERS ACTION FOR CERTIORARI
But before this Court discusses the more relevant issues, the question regarding the propriety of
petitioner Republic's action for certiorari under Rule 65
[19]
of the 1997 Rules of Civil Procedure
assailing the Sandiganbayan Resolution dated January 21, 2002 should be threshed out.
At the outset, we would like to stress that we are treating this case as an exception to the
general rule governing petitions for certiorari. Normally, decisions of the Sandiganbayan are brought
before this Court under Rule 45, not Rule 65.
[20]
But where the case is undeniably ingrained with
immense public interest, public policy and deep historical repercussions, certiorari is allowed
notwithstanding the existence and availability of the remedy of appeal.
[21]

One of the foremost concerns of the Aquino Government in February 1986 was the recovery
of the unexplained or ill-gotten wealth reputedly amassed by former President and Mrs. Ferdinand E.
Marcos, their relatives, friends and business associates. Thus, the very first Executive Order (EO) issued
by then President Corazon Aquino upon her assumption to office after the ouster of the Marcoses
was EO No. 1, issued on February 28, 1986. It created the Presidential Commission on Good
Government (PCGG) and charged it with the task of assisting the President in the "recovery of all ill-
gotten wealth accumulated by former President Ferdinand E. Marcos, his immediate family,
relatives, subordinates and close associates, whether located in the Philippines or abroad, including
the takeover or sequestration of all business enterprises and entities owned or controlled by them
during his administration, directly or through nominees, by taking undue advantage of their public
office and/or using their powers, authority, influence, connections or relationship." The urgency of
this undertaking was tersely described by this Court in Republic vs. Lobregat
[22]
:
surely x x x an enterprise "of great pith and moment"; it was attended by "great expectations"; it was
initiated not only out of considerations of simple justice but also out of sheer necessity - the national
coffers were empty, or nearly so.
In all the alleged ill-gotten wealth cases filed by the PCGG, this Court has seen fit to set aside
technicalities and formalities that merely serve to delay or impede judicious resolution. This Court
prefers to have such cases resolved on the merits at the Sandiganbayan. But substantial justice to
the Filipino people and to all parties concerned, not mere legalisms or perfection of form, should
now be relentlessly and firmly pursued. Almost two decades have passed since the government
initiated its search for and reversion of such ill-gotten wealth. The definitive resolution of such cases
62

on the merits is thus long overdue. If there is proof of illegal acquisition, accumulation,
misappropriation, fraud or illicit conduct, let it be brought out now. Let the ownership of these funds
and other assets be finally determined and resolved with dispatch, free from all the delaying
technicalities and annoying procedural sidetracks.
[23]

We thus take cognizance of this case and settle with finality all the issues therein.
ISSUES BEFORE THIS COURT
The crucial issues which this Court must resolve are: (1) whether or not respondents raised any
genuine issue of fact which would either justify or negate summary judgment; and (2) whether or not
petitioner Republic was able to prove its case for forfeiture in accordance with Sections 2 and 3 of
RA 1379.
(1) THE PROPRIETY OF SUMMARY JUDGMENT
We hold that respondent Marcoses failed to raise any genuine issue of fact in their pleadings.
Thus, on motion of petitioner Republic, summary judgment should take place as a matter of right.
In the early case of Auman vs. Estenzo
[24]
, summary judgment was described as a judgment
which a court may render before trial but after both parties have pleaded. It is ordered by the court
upon application by one party, supported by affidavits, depositions or other documents, with notice
upon the adverse party who may in turn file an opposition supported also by affidavits, depositions
or other documents. This is after the court summarily hears both parties with their respective proofs
and finds that there is no genuine issue between them. Summary judgment is sanctioned in this
jurisdiction by Section 1, Rule 35 of the 1997 Rules of Civil Procedure:
SECTION 1. Summary judgment for claimant.- A party seeking to recover upon a claim,
counterclaim, or cross-claim or to obtain a declaratory relief may, at any time after the pleading in
answer thereto has been served, move with supporting affidavits, depositions or admissions for a
summary judgment in his favor upon all or any part thereof.
[25]

Summary judgment is proper when there is clearly no genuine issue as to any material fact in the
action.
[26]
The theory of summary judgment is that, although an answer may on its face appear to
tender issues requiring trial, if it is demonstrated by affidavits, depositions or admissions that those
issues are not genuine but sham or fictitious, the Court is justified in dispensing with the trial and
rendering summary judgment for petitioner Republic.
The Solicitor General made a very thorough presentation of its case for forfeiture:
x x x
4. Respondent Ferdinand E. Marcos (now deceased and represented by his Estate/Heirs) was a
public officer for several decades continuously and without interruption as Congressman, Senator,
Senate President and President of the Republic of the Philippines from December 31, 1965 up to his
ouster by direct action of the people of EDSA on February 22-25, 1986.
5. Respondent Imelda Romualdez Marcos (Imelda, for short) the former First Lady who ruled with FM
during the 14-year martial law regime, occupied the position of Minister of Human Settlements from
June 1976 up to the peaceful revolution in February 22-25, 1986. She likewise served once as a
member of the Interim Batasang Pambansa during the early years of martial law from 1978 to 1984
and as Metro Manila Governor in concurrent capacity as Minister of Human Settlements. x x x
63

xxx xxx xxx
11. At the outset, however, it must be pointed out that based on the Official Report of the Minister of
Budget, the total salaries of former President Marcos as President form 1966 to 1976 was P60,000 a
year and from 1977 to 1985, P100,000 a year; while that of the former First Lady, Imelda R. Marcos, as
Minister of Human Settlements from June 1976 to February 22-25, 1986 was P75,000 a year xxx.
ANALYSIS OF RESPONDENTS
LEGITIMATE INCOME
x x x
12. Based on available documents, the ITRs of the Marcoses for the years 1965-1975 were filed under
Tax Identification No. 1365-055-1. For the years 1976 until 1984, the returns were filed under Tax
Identification No. M 6221-J 1117-A-9.
13. The data contained in the ITRs and Balance Sheet filed by the Marcoses are summarized and
attached to the reports in the following schedules:
Schedule A:
Schedule of Income (Annex T hereof);
Schedule B:
Schedule of Income Tax Paid (Annex T-1 hereof);
Schedule C:
Schedule of Net Disposable Income (Annex T-2 hereof);
Schedule D:
Schedule of Networth Analysis (Annex T-3 hereof).
14. As summarized in Schedule A (Annex T hereof), the Marcoses reported P16,408,442.00 or
US$2,414,484.91 in total income over a period of 20 years from 1965 to 1984. The sources of income
are as follows:
Official Salaries - P 2,627,581.00 - 16.01%
Legal Practice - 11,109,836.00 - 67.71%
Farm Income - 149,700.00 - .91%
Others - 2,521,325.00 - 15.37%
Total P16,408,442.00 - 100.00%
15. FMs official salary pertains to his compensation as Senate President in 1965 in the amount
of P15,935.00 and P1,420,000.00 as President of the Philippines during the period 1966 until 1984. On
the other hand, Imelda reported salaries and allowances only for the years 1979 to 1984 in the
amount of P1,191,646.00. The records indicate that the reported income came from her salary from
the Ministry of Human Settlements and allowances from Food Terminal, Inc., National Home
Mortgage Finance Corporation, National Food Authority Council, Light Rail Transit Authority and
Home Development Mutual Fund.
64

16. Of the P11,109,836.00 in reported income from legal practice, the amount of P10,649,836.00 or
96% represents receivables from prior years during the period 1967 up to 1984.
17. In the guise of reporting income using the cash method under Section 38 of the National Internal
Revenue Code, FM made it appear that he had an extremely profitable legal practice before he
became a President (FM being barred by law from practicing his law profession during his entire
presidency) and that, incredibly, he was still receiving payments almost 20 years after. The only
problem is that in his Balance Sheet attached to his 1965 ITR immediately preceeding his
ascendancy to the presidency he did not show any Receivables from client at all, much less
the P10,65-M that he decided to later recognize as income. There are no documents showing any
withholding tax certificates. Likewise, there is nothing on record that will show any known Marcos
client as he has no known law office. As previously stated, his networth was a mere P120,000.00 in
December, 1965. The joint income tax returns of FM and Imelda cannot, therefore, conceal the
skeletons of their kleptocracy.
18. FM reported a total of P2,521,325.00 as Other Income for the years 1972 up to 1976 which he
referred to in his return as Miscellaneous Items and Various Corporations. There is no indication of
any payor of the dividends or earnings.
19. Spouses Ferdinand and Imelda did not declare any income from any deposits and placements
which are subject to a 5% withholding tax. The Bureau of Internal Revenue attested that after a
diligent search of pertinent records on file with the Records Division, they did not find any records
involving the tax transactions of spouses Ferdinand and Imelda in Revenue Region No. 1, Baguio
City, Revenue Region No.4A, Manila, Revenue Region No. 4B1, Quezon City and Revenue No. 8,
Tacloban, Leyte. Likewise, the Office of the Revenue Collector of Batac. Further, BIR attested that
no records were found on any filing of capital gains tax return involving spouses FM and Imelda
covering the years 1960 to 1965.
20. In Schedule B, the taxable reported income over the twenty-year period was P14,463,595.00
which represents 88% of the gross income. The Marcoses paid income taxes totalingP8,233,296.00 or
US$1,220,667.59. The business expenses in the amount of P861,748.00 represent expenses incurred for
subscription, postage, stationeries and contributions while the other deductions in the amount of
P567,097.00 represents interest charges, medicare fees, taxes and licenses. The total deductions in
the amount of P1,994,845.00 represents 12% of the total gross income.
21. In Schedule C, the net cumulative disposable income amounts to P6,756,301.00 or
US$980,709.77. This is the amount that represents that portion of the Marcoses income that is free for
consumption, savings and investments. The amount is arrived at by adding back to the net income
after tax the personal and additional exemptions for the years 1965-1984, as well as the tax-exempt
salary of the President for the years 1966 until 1972.
22. Finally, the networth analysis in Schedule D, represents the total accumulated networth of
spouses, Ferdinand and Imelda. Respondents Balance Sheet attached to their 1965 ITR, covering
the year immediately preceding their ascendancy to the presidency, indicates an ending networth
of P120,000.00 which FM declared as Library and Miscellaneous assets. In computing for the
networth, the income approach was utilized. Under this approach, the beginning capital is
increased or decreased, as the case may be, depending upon the income earned or loss
incurred. Computations establish the total networth of spouses Ferdinand and Imelda, for the years
1965 until 1984 in the total amount of US$957,487.75, assuming the income from legal practice is real
and valid x x x.
G. THE SECRET MARCOS DEPOSITS
IN SWISS BANKS
65

23. The following presentation very clearly and overwhelmingly show in detail how both
respondents clandestinely stashed away the countrys wealth to Switzerland and hid the same
under layers upon layers of foundations and other corporate entities to prevent its
detection. Through their dummies/nominees, fronts or agents who formed those foundations or
corporate entities, they opened and maintained numerous bank accounts. But due to the difficulty
if not the impossibility of detecting and documenting all those secret accounts as well as the
enormity of the deposits therein hidden, the following presentation is confined to five identified
accounts groups, with balances amounting to about $356-M with a reservation for the filing of a
supplemental or separate forfeiture complaint should the need arise.
H. THE AZIO-VERSO-VIBUR
FOUNDATION ACCOUNTS
24. On June 11, 1971, Ferdinand Marcos issued a written order to Dr. Theo Bertheau, legal counsel of
Schweizeresche Kreditanstalt or SKA, also known as Swiss Credit Bank, for him to establish the AZIO
Foundation. On the same date, Marcos executed a power of attorney in favor of Roberto S.
Benedicto empowering him to transact business in behalf of the said foundation. Pursuant to the
said Marcos mandate, AZIO Foundation was formed on June 21, 1971 in Vaduz. Walter Fessler and
Ernst Scheller, also of SKA Legal Service, and Dr. Helmuth Merling from Schaan were designated as
members of the Board of Trustees of the said foundation. Ferdinand Marcos was named first
beneficiary and the Marcos Foundation, Inc. was second beneficiary. On November 12, 1971, FM
again issued another written order naming Austrahil PTY Ltd. In Sydney, Australia, as the foundations
first and sole beneficiary. This was recorded on December 14, 1971.
25. In an undated instrument, Marcos changed the first and sole beneficiary to CHARIS
FOUNDATION. This change was recorded on December 4, 1972.
26. On August 29, 1978, the AZIO FOUNDATION was renamed to VERSO FOUNDATION. The Board of
Trustees remained the same. On March 11, 1981, Marcos issued a written directive to liquidated
VERSO FOUNDATION and to transfer all its assets to account of FIDES TRUST COMPANY at Bank
Hofman in Zurich under the account Reference OSER. The Board of Trustees decided to dissolve
the foundation on June 25, 1981.
27. In an apparent maneuver to bury further the secret deposits beneath the thick layers of
corporate entities, FM effected the establishment of VIBUR FOUNDATION on May 13, 1981 in
Vaduz. Atty. Ivo Beck and Limag Management, a wholly-owned subsidiary of Fides Trust, were
designated as members of the Board of Trustees. The account was officially opened with SKA on
September 10, 1981. The beneficial owner was not made known to the bank since Fides Trust
Company acted as fiduciary. However, comparison of the listing of the securities in the safe deposit
register of the VERSO FOUNDATION as of February 27, 1981 with that of VIBUR FOUNDATION as
of December 31, 1981 readily reveals that exactly the same securities were listed.
28. Under the foregoing circumstances, it is certain that the VIBUR FOUNDATION is the beneficial
successor of VERSO FOUNDATION.
29. On March 18, 1986, the Marcos-designated Board of Trustees decided to liquidate VIBUR
FOUNDATION. A notice of such liquidation was sent to the Office of the Public Register on March 21,
1986. However, the bank accounts and respective balances of the said VIBUR FOUNDATION
remained with SKA. Apparently, the liquidation was an attempt by the Marcoses to transfer the
foundations funds to another account or bank but this was prevented by the timely freeze order
issued by the Swiss authorities. One of the latest documents obtained by the PCGG from the Swiss
authorities is a declaration signed by Dr. Ivo Beck (the trustee) stating that the beneficial owner of
66

VIBUR FOUNDATION is Ferdinand E. Marcos. Another document signed by G. Raber of SKA shows
that VIBUR FOUNDATION is owned by the Marcos Familie
30. As of December 31, 1989, the balance of the bank accounts of VIBUR FOUNDATION with SKA,
Zurich, under the General Account No. 469857 totaled $3,597,544.00
I. XANDY-WINTROP: CHARIS-SCOLARI-
VALAMO-SPINUS-AVERTINA
FOUNDATION ACCOUNTS
31. This is the most intricate and complicated account group. As the Flow Chart hereof shows, two
(2) groups under the foundation organized by Marcos dummies/nominees for FMs benefit,
eventually joined together and became one (1) account group under the AVERTINA FOUNDATION
for the benefit of both FM and Imelda. This is the biggest group from where the $50-M investment
fund of the Marcoses was drawn when they bought the Central Banks dollar-denominated treasury
notes with high-yielding interests.
32. On March 20, 1968, after his second year in the presidency, Marcos opened bank accounts with
SKA using an alias or pseudonym WILLIAM SAUNDERS, apparently to hide his true identity. The next
day, March 21, 1968, his First Lady, Mrs. Imelda Marcos also opened her own bank accounts with the
same bank using an American-sounding alias, JANE RYAN. Found among the voluminous
documents in Malacaang shortly after they fled to Hawaii in haste that fateful night of February 25,
1986, were accomplished forms for Declaration/Specimen Signatures submitted by the Marcos
couple. Under the caption signature(s) Ferdinand and Imelda signed their real names as well as
their respective aliases underneath. These accounts were actively operated and maintained by the
Marcoses for about two (2) years until their closure sometime in February, 1970 and the balances
transferred to XANDY FOUNDATION.
33. The XANDY FOUNDATION was established on March 3, 1970 in Vaduz. C.W. Fessler, C. Souviron
and E. Scheller were named as members of the Board of Trustees.
34. FM and Imelda issued the written mandate to establish the foundation to Markus Geel of SKA on
March 3, 1970. In the handwritten Regulations signed by the Marcos couple as well as in the type-
written Regulations signed by Markus Geel both dated February 13, 1970, the Marcos spouses were
named the first beneficiaries, the surviving spouse as the second beneficiary and the Marcos
children Imee, Ferdinand, Jr. (Bongbong) and Irene as equal third beneficiaries.
35. The XANDY FOUNDATION was renamed WINTROP FOUNDATION on August 29, 1978. The Board
of Trustees remained the same at the outset. However, on March 27, 1980, Souviron was replaced
by Dr. Peter Ritter. On March 10. 1981, Ferdinand and Imelda Marcos issued a written order to the
Board of Wintrop to liquidate the foundation and transfer all its assets to Bank Hofmann in Zurich in
favor of FIDES TRUST COMPANY. Later, WINTROP FOUNDATION was dissolved.
36. The AVERTINA FOUNDATION was established on May 13, 1981 in Vaduz with Atty. Ivo Beck and
Limag Management, a wholly-owned subsidiary of FIDES TRUST CO., as members of the Board of
Trustees. Two (2) account categories, namely: CAR and NES, were opened on September 10,
1981. The beneficial owner of AVERTINA was not made known to the bank since the FIDES TRUST CO.
acted as fiduciary. However, the securities listed in the safe deposit register of WINTROP
FOUNDATION Category R as of December 31, 1980 were the same as those listed in the register of
AVERTINA FOUNDATION Category CAR as of December 31, 1981. Likewise, the securities listed in the
safe deposit register of WINTROP FOUNDATION Category S as of December 31, 1980 were the same
as those listed in the register of Avertina Category NES as of December 31, 1981.Under the
circumstances, it is certain that the beneficial successor of WINTROP FOUNDATION is AVERTINA
67

FOUNDATION. The balance of Category CAR as of December 31, 1989 amounted to
US$231,366,894.00 while that of Category NES as of 12-31-83 was US$8,647,190.00. Latest documents
received from Swiss authorities included a declaration signed by IVO Beck stating that the beneficial
owners of AVERTINA FOUNDATION are FM and Imelda. Another document signed by G. Raber of
SKA indicates that Avertina Foundation is owned by the Marcos Families.
37. The other groups of foundations that eventually joined AVERTINA were also established by FM
through his dummies, which started with the CHARIS FOUNDATION.
38. The CHARIS FOUNDATION was established in VADUZ on December 27, 1971. Walter Fessler and
Ernst Scheller of SKA and Dr. Peter Ritter were named as directors. Dr. Theo Bertheau, SKA legal
counsel, acted as founding director in behalf of FM by virtue of the mandate and agreement dated
November 12, 1971. FM himself was named the first beneficiary and Xandy Foundation as second
beneficiary in accordance with the handwritten instructions of FM on November 12, 1971 and the
Regulations. FM gave a power of attorney to Roberto S. Benedicto on February 15, 1972 to act in his
behalf with regard to Charis Foundation.
39. On December 13, 1974, Charis Foundation was renamed Scolari Foundation but the directors
remained the same. On March 11, 1981 FM ordered in writing that the Valamo Foundation be
liquidated and all its assets be transferred to Bank Hofmann, AG in favor of Fides Trust Company
under the account Reference OMAL. The Board of Directors decided on the immediate dissolution
of Valamo Foundation on June 25, 1981.
40 The SPINUS FOUNDATION was established on May 13, 1981 in Vaduz with Atty. Ivo Beck and
Limag Management, a wholly-owned subsidiary of Fides Trust Co., as members of the Foundations
Board of Directors. The account was officially opened with SKA on September 10, 1981. The
beneficial owner of the foundation was not made known to the bank since Fides Trust Co. acted as
fiduciary. However, the list of securities in the safe deposit register of Valamo Foundation as of
December 31, 1980 are practically the same with those listed in the safe deposit register of Spinus
Foundation as of December 31, 1981. Under the circumstances, it is certain that the Spinus
Foundation is the beneficial successor of the Valamo Foundation.
41. On September 6, 1982, there was a written instruction from Spinus Foundation to SKA to close its
Swiss Franc account and transfer the balance to Avertina Foundation. In July/August, 1982, several
transfers from the foundations German marks and US dollar accounts were made to Avertina
Category CAR totaling DM 29.5-M and $58-M, respectively. Moreover, a comparison of the list of
securities of the Spinus Foundation as of February 3, 1982 with the safe deposit slips of the Avertina
Foundation Category CAR as of August 19, 1982 shows that all the securities of Spinus were
transferred to Avertina.
J. TRINIDAD-RAYBY-PALMY
FOUNDATION ACCOUNTS
42. The Trinidad Foundation was organized on August 26, 1970 in Vaduz with C.W. Fessler and E.
Scheller of SKA and Dr. Otto Tondury as the foundations directors. Imelda issued a written mandate
to establish the foundation to Markus Geel on August 26, 1970. The regulations as well as the
agreement, both dated August 28, 1970 were likewise signed by Imelda. Imelda was named the first
beneficiary and her children Imelda (Imee), Ferdinand, Jr. (Bongbong) and, Irene were named as
equal second beneficiaries.
43. Rayby Foundation was established on June 22, 1973 in Vaduz with Fessler, Scheller and Ritter as
members of the board of directors. Imelda issued a written mandate to Dr. Theo Bertheau to
establish the foundation with a note that the foundations capitalization as well as the cost of
68

establishing it be debited against the account of Trinidad Foundation. Imelda was named the first
and only beneficiary of Rayby foundation. According to written information from SKA dated
November 28, 1988, Imelda apparently had the intention in 1973 to transfer part of the assets of
Trinidad Foundation to another foundation, thus the establishment of Rayby Foundation. However,
transfer of assets never took place. On March 10, 1981, Imelda issued a written order to transfer all
the assets of Rayby Foundation to Trinidad Foundation and to subsequently liquidate Rayby. On the
same date, she issued a written order to the board of Trinidad to dissolve the foundation and
transfer all its assets to Bank Hofmann in favor of Fides Trust Co. Under the account Reference
Dido, Rayby was dissolved on April 6, 1981 and Trinidad was liquidated on August 3, 1981.
44. The PALMY FOUNDATION was established on May 13, 1981 in Vaduz with Dr. Ivo Beck and Limag
Management, a wholly-owned subsidiary of Fides Trust Co, as members of the Foundations Board of
Directors. The account was officially opened with the SKA on September 10, 1981. The beneficial
owner was not made known to the bank since Fides Trust Co. acted as fiduciary. However, when
one compares the listing of securities in the safe deposit register of Trinidad Foundation as of
December 31,1980 with that of the Palmy Foundation as of December 31, 1980, one can clearly see
that practically the same securities were listed. Under the circumstances, it is certain that the Palmy
Foundation is the beneficial successor of the Trinidad Foundation.
45. As of December 31, 1989, the ending balance of the bank accounts of Palmy Foundation under
General Account No. 391528 is $17,214,432.00.
46. Latest documents received from Swiss Authorities included a declaration signed by Dr. Ivo Beck
stating that the beneficial owner of Palmy Foundation is Imelda. Another document signed by Raber
shows that the said Palmy Foundation is owned by Marcos Familie.
K. ROSALYS-AGUAMINA
FOUNDATION ACCOUNTS
47. Rosalys Foundation was established in 1971 with FM as the beneficiary. Its Articles of
Incorporation was executed on September 24, 1971 and its By-Laws on October 3, 1971. This
foundation maintained several accounts with Swiss Bank Corporation (SBC) under the general
account 51960 where most of the bribe monies from Japanese suppliers were hidden.
48. On December 19, 1985, Rosalys Foundation was liquidated and all its assets were transferred to
Aguamina Corporations (Panama) Account No. 53300 with SBC. The ownership by Aguamina
Corporation of Account No. 53300 is evidenced by an opening account documents from the bank.
J. Christinaz and R.L. Rossier, First Vice-President and Senior Vice President, respectively, of SBC,
Geneva issued a declaration dated September 3, 1991 stating that the by-laws dated October 3,
1971 governing Rosalys Foundation was the same by-law applied to Aguamina Corporation
Account No. 53300. They further confirmed that no change of beneficial owner was involved while
transferring the assets of Rosalys to Aguamina. Hence, FM remains the beneficiary of Aguamina
Corporation Account No. 53300.
As of August 30, 1991, the ending balance of Account No. 53300 amounted to $80,566,483.00.
L. MALER FOUNDATION ACCOUNTS
49. Maler was first created as an establishment. A statement of its rules and regulations was found
among Malacaang documents. It stated, among others, that 50% of the Companys assets will be
for sole and full right disposal of FM and Imelda during their lifetime, which the remaining 50% will be
divided in equal parts among their children. Another Malacaang document dated October
19,1968 and signed by Ferdinand and Imelda pertains to the appointment of Dr. Andre Barbey and
69

Jean Louis Sunier as attorneys of the company and as administrator and manager of all assets held
by the company. The Marcos couple, also mentioned in the said document that they bought the
Maler Establishment from SBC, Geneva. On the same date, FM and Imelda issued a letter addressed
to Maler Establishment, stating that all instructions to be transmitted with regard to Maler will be
signed with the word JOHN LEWIS. This word will have the same value as the couples own
personal signature. The letter was signed by FM and Imelda in their signatures and as John Lewis.
50. Maler Establishment opened and maintained bank accounts with SBC, Geneva. The opening
bank documents were signed by Dr. Barbey and Mr. Sunnier as authorized signatories.
51. On November 17, 1981, it became necessary to transform Maler Establishment into a foundation.
Likewise, the attorneys were changed to Michael Amaudruz, et. al. However, administration of the
assets was left to SBC. The articles of incorporation of Maler Foundation registered on November 17,
1981 appear to be the same articles applied to Maler Establishment. On February 28, 1984, Maler
Foundation cancelled the power of attorney for the management of its assets in favor of SBC and
transferred such power to Sustrust Investment Co., S.A.
52. As of June 6, 1991, the ending balance of Maler Foundations Account Nos. 254,508 BT and
98,929 NY amount SF 9,083,567 and SG 16,195,258, respectively, for a total of SF 25,278,825.00. GM
only until December 31, 1980. This account was opened by Maler when it was still an establishment
which was subsequently transformed into a foundation.
53. All the five (5) group accounts in the over-all flow chart have a total balance of about Three
Hundred Fifty Six Million Dollars ($356,000,000.00) as shown by Annex R-5 hereto attached as
integral part hereof.
x x x x x x.
[27]

Respondents Imelda R. Marcos, Maria Imelda M. Manotoc, Irene M. Araneta and Ferdinand
Marcos, Jr., in their answer, stated the following:
xxx xxx xxx
4. Respondents ADMIT paragraphs 3 and 4 of the Petition.
5. Respondents specifically deny paragraph 5 of the Petition in so far as it states that summons
and other court processes may be served on Respondent Imelda R. Marcos at the stated address
the truth of the matter being that Respondent Imelda R. Marcos may be served with summons and
other processes at No. 10-B Bel Air Condominium 5022 P. Burgos Street, Makati, Metro Manila, and
ADMIT the rest.
xxx xxx xxx
10. Respondents ADMIT paragraph 11 of the Petition.
11. Respondents specifically DENY paragraph 12 of the Petition for lack of knowledge sufficient to
form a belief as to the truth of the allegation since Respondents were not privy to the transactions
and that they cannot remember exactly the truth as to the matters alleged.
12. Respondents specifically DENY paragraph 13 of the Petition for lack of knowledge or information
sufficient to form a belief as to the truth of the allegation since Respondents cannot remember with
exactitude the contents of the alleged ITRs and Balance Sheet.
70

13. Respondents specifically DENY paragraph 14 of the Petition for lack of knowledge or information
sufficient to form a belief as to the truth of the allegation since Respondents cannot remember with
exactitude the contents of the alleged ITRs.
14. Respondents specifically DENY paragraph 15 of the Petition for lack of knowledge or information
sufficient to form a belief as to the truth of the allegation since Respondents cannot remember with
exactitude the contents of the alleged ITRs.
15. Respondents specifically DENY paragraph 16 of the Petition for lack of knowledge or information
sufficient to form a belief as to the truth of the allegation since Respondents cannot remember with
exactitude the contents of the alleged ITRs.
16. Respondents specifically DENY paragraph 17 of the Petition insofar as it attributes willful duplicity
on the part of the late President Marcos, for being false, the same being pure conclusions based on
pure assumption and not allegations of fact; and specifically DENY the rest for lack of knowledge or
information sufficient to form a belief as to the truth of the allegation since Respondents cannot
remember with exactitude the contents of the alleged ITRs or the attachments thereto.
17. Respondents specifically DENY paragraph 18 of the Petition for lack of knowledge or information
sufficient to form a belief as to the truth of the allegation since Respondents cannot remember with
exactitude the contents of the alleged ITRs.
18. Respondents specifically DENY paragraph 19 of the Petition for lack of knowledge or information
sufficient to form a belief as to the truth of the allegation since Respondents cannot remember with
exactitude the contents of the alleged ITRs and that they are not privy to the activities of the BIR.
19. Respondents specifically DENY paragraph 20 of the Petition for lack of knowledge or information
sufficient to form a belief as to the truth of the allegation since Respondents cannot remember with
exactitude the contents of the alleged ITRs.
20. Respondents specifically DENY paragraph 21 of the Petition for lack of knowledge or information
sufficient to form a belief as to the truth of the allegation since Respondents cannot remember with
exactitude the contents of the alleged ITRs.
21. Respondents specifically DENY paragraph 22 of the Petition for lack of knowledge or information
sufficient to form a belief as to the truth of the allegation since Respondents cannot remember with
exactitude the contents of the alleged ITRs.
22. Respondents specifically DENY paragraph 23 insofar as it alleges that Respondents clandestinely
stashed the countrys wealth in Switzerland and hid the same under layers and layers of foundation
and corporate entities for being false, the truth being that Respondents aforesaid properties were
lawfully acquired.
23. Respondents specifically DENY paragraphs 24, 25, 26, 27, 28, 29 and 30 of the Petition for lack of
knowledge or information sufficient to form a belief as to the truth of the allegation since
Respondents were not privy to the transactions regarding the alleged Azio-Verso-Vibur Foundation
accounts, except that as to Respondent Imelda R. Marcos she specifically remembers that the funds
involved were lawfully acquired.
24. Respondents specifically DENY paragraphs 31, 32, 33, 34, 35, 36,37, 38, 39, 40, and 41 of the
Petition for lack of knowledge or information sufficient to form a belief as to the truth of the
allegations since Respondents are not privy to the transactions and as to such transaction they were
privy to they cannot remember with exactitude the same having occurred a long time ago, except
71

that as to Respondent Imelda R. Marcos she specifically remembers that the funds involved were
lawfully acquired.
25. Respondents specifically DENY paragraphs 42, 43, 44, 45, and 46, of the Petition for lack of
knowledge or information sufficient to form a belief as to the truth of the allegations since
Respondents were not privy to the transactions and as to such transaction they were privy to they
cannot remember with exactitude the same having occurred a long time ago, except that as to
Respondent Imelda R. Marcos she specifically remembers that the funds involved were lawfully
acquired.
26. Respondents specifically DENY paragraphs 49, 50, 51 and 52, of the Petition for lack of
knowledge or information sufficient to form a belief as to the truth of the allegations since
Respondents were not privy to the transactions and as to such transaction they were privy to they
cannot remember with exactitude the same having occurred a long time ago, except that as to
Respondent Imelda R. Marcos she specifically remembers that the funds involved were lawfully
acquired.
Upon careful perusal of the foregoing, the Court finds that respondent Mrs. Marcos and the
Marcos children indubitably failed to tender genuine issues in their answer to the petition for
forfeiture. A genuine issue is an issue of fact which calls for the presentation of evidence as
distinguished from an issue which is fictitious and contrived, set up in bad faith or patently lacking in
substance so as not to constitute a genuine issue for trial. Respondents defenses of lack of
knowledge for lack of privity or (inability to) recall because it happened a long time ago or, on
the part of Mrs. Marcos, that the funds were lawfully acquired are fully insufficient to tender
genuine issues. Respondent Marcoses defenses were a sham and evidently calibrated to
compound and confuse the issues.
The following pleadings filed by respondent Marcoses are replete with indications of a spurious
defense:
(a) Respondents' Answer dated October 18, 1993;
(b) Pre-trial Brief dated October 4, 1999 of Mrs. Marcos, Supplemental Pre-trial Brief dated
October 19, 1999 of Ferdinand, Jr. and Mrs. Imee Marcos-Manotoc adopting the pre-
trial brief of Mrs. Marcos, and Manifestation dated October 19, 1999 of Irene Marcos-
Araneta adopting the pre-trial briefs of her co- respondents;
(c) Opposition to Motion for Summary Judgment dated March 21, 2000, filed by Mrs.
Marcos which the other respondents (Marcos children) adopted;
(d) Demurrer to Evidence dated May 2, 2000 filed by Mrs. Marcos and adopted by the
Marcos children;
(e) Motion for Reconsideration dated September 26, 2000 filed by Mrs. Marcos; Motion for
Reconsideration dated October 5, 2000 jointly filed by Mrs. Manotoc and Ferdinand,
Jr., and Supplemental Motion for Reconsideration dated October 9, 2000 likewise
jointly filed by Mrs. Manotoc and Ferdinand, Jr.;
(f) Memorandum dated December 12, 2000 of Mrs. Marcos and Memorandum dated
December 17, 2000 of the Marcos children;
(g) Manifestation dated May 26, 1998; and
72

(h) General/Supplemental Agreement dated December 23, 1993.
An examination of the foregoing pleadings is in order.
Respondents Answer dated October 18, 1993.
In their answer, respondents failed to specifically deny each and every allegation contained in
the petition for forfeiture in the manner required by the rules. All they gave were stock answers like
they have no sufficient knowledge or they could not recall because it happened a long time
ago, and, as to Mrs. Marcos, the funds were lawfully acquired, without stating the basis of such
assertions.
Section 10, Rule 8 of the 1997 Rules of Civil Procedure, provides:
A defendant must specify each material allegation of fact the truth of which he does not admit
and, whenever practicable, shall set forth the substance of the matters upon which he relies to
support his denial. Where a defendant desires to deny only a part of an averment, he shall specify
so much of it as is true and material and shall deny the remainder. Where a defendant is without
knowledge or information sufficient to form a belief as to the truth of a material averment made in
the complaint, he shall so state, and this shall have the effect of a denial.
[28]

The purpose of requiring respondents to make a specific denial is to make them disclose facts
which will disprove the allegations of petitioner at the trial, together with the matters they rely upon
in support of such denial. Our jurisdiction adheres to this rule to avoid and prevent unnecessary
expenses and waste of time by compelling both parties to lay their cards on the table, thus reducing
the controversy to its true terms. As explained in Alonso vs. Villamor,
[29]

A litigation is not a game of technicalities in which one, more deeply schooled and skilled in the
subtle art of movement and position, entraps and destroys the other. It is rather a contest in which
each contending party fully and fairly lays before the court the facts in issue and then, brushing
aside as wholly trivial and indecisive all imperfections of form and technicalities of procedure, asks
that justice be done upon the merits. Lawsuits, unlike duels, are not to be won by a rapiers thrust.
On the part of Mrs. Marcos, she claimed that the funds were lawfully acquired. However, she
failed to particularly state the ultimate facts surrounding the lawful manner or mode of acquisition of
the subject funds. Simply put, she merely stated in her answer with the other respondents that the
funds were lawfully acquired without detailing how exactly these funds were supposedly acquired
legally by them. Even in this case before us, her assertion that the funds were lawfully acquired
remains bare and unaccompanied by any factual support which can prove, by the presentation of
evidence at a hearing, that indeed the funds were acquired legitimately by the Marcos family.
Respondents denials in their answer at the Sandiganbayan were based on their alleged lack of
knowledge or information sufficient to form a belief as to the truth of the allegations of the petition.
It is true that one of the modes of specific denial under the rules is a denial through a statement
that the defendant is without knowledge or information sufficient to form a belief as to the truth of
the material averment in the complaint. The question, however, is whether the kind of denial in
respondents answer qualifies as the specific denial called for by the rules. We do not think
so. In Morales vs. Court of Appeals,
[30]
this Court ruled that if an allegation directly and specifically
charges a party with having done, performed or committed a particular act which the latter did not
in fact do, perform or commit, a categorical and express denial must be made.
Here, despite the serious and specific allegations against them, the Marcoses responded by
simply saying that they had no knowledge or information sufficient to form a belief as to the truth of
such allegations. Such a general, self-serving claim of ignorance of the facts alleged in the petition
73

for forfeiture was insufficient to raise an issue. Respondent Marcoses should have positively stated
how it was that they were supposedly ignorant of the facts alleged.
[31]

To elucidate, the allegation of petitioner Republic in paragraph 23 of the petition for forfeiture
stated:
23. The following presentation very clearly and overwhelmingly show in detail how both respondents
clandestinely stashed away the countrys wealth to Switzerland and hid the same under layers upon
layers of foundations and other corporate entities to prevent its detection. Through their
dummies/nominees, fronts or agents who formed those foundations or corporate entities, they
opened and maintained numerous bank accounts. But due to the difficulty if not the impossibility of
detecting and documenting all those secret accounts as well as the enormity of the deposits therein
hidden, the following presentation is confined to five identified accounts groups, with balances
amounting to about $356-M with a reservation for the filing of a supplemental or separate forfeiture
complaint should the need arise.
[32]

Respondents lame denial of the aforesaid allegation was:
22. Respondents specifically DENY paragraph 23 insofar as it alleges that Respondents clandestinely
stashed the countrys wealth in Switzerland and hid the same under layers and layers of foundations
and corporate entities for being false, the truth being that Respondents aforesaid properties were
lawfully acquired.
[33]

Evidently, this particular denial had the earmark of what is called in the law on pleadings as
a negative pregnant, that is, a denial pregnant with the admission of the substantial facts in the
pleading responded to which are not squarely denied. It was in effect an admission of the
averments it was directed at.
[34]
Stated otherwise, a negative pregnant is a form of negative
expression which carries with it an affirmation or at least an implication of some kind favorable to the
adverse party. It is a denial pregnant with an admission of the substantial facts alleged in the
pleading. Where a fact is alleged with qualifying or modifying language and the words of the
allegation as so qualified or modified are literally denied, has been held that the qualifying
circumstances alone are denied while the fact itself is admitted.
[35]

In the instant case, the material allegations in paragraph 23 of the said petition were not
specifically denied by respondents in paragraph 22 of their answer. The denial contained in
paragraph 22 of the answer was focused on the averment in paragraph 23 of the petition for
forfeiture that Respondents clandestinely stashed the countrys wealth in Switzerland and hid the
same under layers and layers of foundations and corporate entities. Paragraph 22 of the
respondents answer was thus a denial pregnant with admissions of the following substantial facts:
(1) the Swiss bank deposits existed and
(2) that the estimated sum thereof was US$356 million as of December, 1990.
Therefore, the allegations in the petition for forfeiture on the existence of the Swiss bank deposits
in the sum of about US$356 million, not having been specifically denied by respondents in their
answer, were deemed admitted by them pursuant to Section 11, Rule 8 of the 1997 Revised Rules on
Civil Procedure:
Material averment in the complaint, xxx shall be deemed admitted when not specifically denied.
xxx.
[36]

By the same token, the following unsupported denials of respondents in their answer were
pregnant with admissions of the substantial facts alleged in the Republics petition for forfeiture:
74

23. Respondents specifically DENY paragraphs 24, 25, 26, 27, 28, 29 and 30 of the Petition for lack of
knowledge or information sufficient to form a belief as to the truth of the allegation since
respondents were not privy to the transactions regarding the alleged Azio-Verso-Vibur Foundation
accounts, except that, as to respondent Imelda R. Marcos, she specifically remembers that the
funds involved were lawfully acquired.
24. Respondents specifically DENY paragraphs 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41 of the Petition
for lack of knowledge or information sufficient to form a belief as to the truth of the allegations since
respondents were not privy to the transactions and as to such transactions they were privy to, they
cannot remember with exactitude the same having occurred a long time ago, except as to
respondent Imelda R. Marcos, she specifically remembers that the funds involved were lawfully
acquired.
25. Respondents specifically DENY paragraphs 42, 43, 45, and 46 of the petition for lack of
knowledge or information sufficient to from a belief as to the truth of the allegations since
respondents were not privy to the transactions and as to such transaction they were privy to, they
cannot remember with exactitude, the same having occurred a long time ago, except that as to
respondent Imelda R. Marcos, she specifically remembers that the funds involved were lawfully
acquired.
26. Respondents specifically DENY paragraphs 49, 50, 51 and 52 of the petition for lack of knowledge
and information sufficient to form a belief as to the truth of the allegations since respondents were
not privy to the transactions and as to such transaction they were privy to they cannot remember
with exactitude the same having occurred a long time ago, except that as to respondent Imelda R.
Marcos, she specifically remembers that the funds involved were lawfully acquired.
The matters referred to in paragraphs 23 to 26 of the respondents answer pertained to the
creation of five groups of accounts as well as their respective ending balances and attached
documents alleged in paragraphs 24 to 52 of the Republics petition for forfeiture. Respondent
Imelda R. Marcos never specifically denied the existence of the Swiss funds. Her claim that the
funds involved were lawfully acquired was an acknowledgment on her part of the existence of said
deposits. This only reinforced her earlier admission of the allegation in paragraph 23 of the petition
for forfeiture regarding the existence of the US$356 million Swiss bank deposits.
The allegations in paragraphs 47
[37]
and 48
[38]
of the petition for forfeiture referring to the creation
and amount of the deposits of the Rosalys-Aguamina Foundation as well as the averment in
paragraph 52-a
[39]
of the said petition with respect to the sum of the Swiss bank deposits estimated
to be US$356 million were again not specifically denied by respondents in their answer. The
respondents did not at all respond to the issues raised in these paragraphs and the existence, nature
and amount of the Swiss funds were therefore deemed admitted by them. As held in Galofa vs.
Nee Bon Sing,
[40]
if a defendants denial is a negative pregnant, it is equivalent to an admission.
Moreover, respondents denial of the allegations in the petition for forfeiture for lack of
knowledge or information sufficient to form a belief as to the truth of the allegations since
respondents were not privy to the transactions was just a pretense. Mrs. Marcos privity to the
transactions was in fact evident from her signatures on some of the vital
documents
[41]
attached to the petition for forfeiture which Mrs. Marcos failed to specifically deny as
required by the rules.
[42]

It is worthy to note that the pertinent documents attached to the petition for forfeiture were
even signed personally by respondent Mrs. Marcos and her late husband, Ferdinand E. Marcos,
indicating that said documents were within their knowledge. As correctly pointed out by
Sandiganbayan Justice Francisco Villaruz, Jr. in his dissenting opinion:
75

The pattern of: 1) creating foundations, 2) use of pseudonyms and dummies, 3) approving
regulations of the Foundations for the distribution of capital and income of the Foundations to the
First and Second beneficiary (who are no other than FM and his family), 4) opening of bank
accounts for the Foundations, 5) changing the names of the Foundations, 6) transferring funds and
assets of the Foundations to other Foundations or Fides Trust, 7) liquidation of the Foundations as
substantiated by the Annexes U to U-168, Petition [for forfeiture] strongly indicate that FM and/or
Imelda were the real owners of the assets deposited in the Swiss banks, using the Foundations as
dummies.
[43]

How could respondents therefore claim lack of sufficient knowledge or information regarding
the existence of the Swiss bank deposits and the creation of five groups of accounts when Mrs.
Marcos and her late husband personally masterminded and participated in the formation and
control of said foundations? This is a fact respondent Marcoses were never able to explain.
Not only that. Respondents' answer also technically admitted the genuineness and due
execution of the Income Tax Returns (ITRs) and the balance sheets of the late Ferdinand E. Marcos
and Imelda R. Marcos attached to the petition for forfeiture, as well as the veracity of the contents
thereof.
The answer again premised its denials of said ITRs and balance sheets on the ground of lack of
knowledge or information sufficient to form a belief as to the truth of the contents thereof. Petitioner
correctly points out that respondents' denial was not really grounded on lack of knowledge or
information sufficient to form a belief but was based on lack of recollection. By reviewing their own
records, respondent Marcoses could have easily determined the genuineness and due execution of
the ITRs and the balance sheets. They also had the means and opportunity of verifying the same
from the records of the BIR and the Office of the President. They did not.
When matters regarding which respondents claim to have no knowledge or information
sufficient to form a belief are plainly and necessarily within their knowledge, their alleged ignorance
or lack of information will not be considered a specific denial.
[44]
An unexplained denial of
information within the control of the pleader, or is readily accessible to him, is evasive and is
insufficient to constitute an effective denial.
[45]

The form of denial adopted by respondents must be availed of with sincerity and in good faith,
and certainly not for the purpose of confusing the adverse party as to what allegations of the
petition are really being challenged; nor should it be made for the purpose of delay.
[46]
In the
instant case, the Marcoses did not only present unsubstantiated assertions but in truth attempted to
mislead and deceive this Court by presenting an obviously contrived defense.
Simply put, a profession of ignorance about a fact which is patently and necessarily within the
pleaders knowledge or means of knowing is as ineffective as no denial at all.
[47]
Respondents
ineffective denial thus failed to properly tender an issue and the averments contained in the petition
for forfeiture were deemed judicially admitted by them.
As held in J.P. Juan & Sons, Inc. vs. Lianga Industries, Inc.:
Its specific denial of the material allegation of the petition without setting forth the substance of
the matters relied upon to support its general denial, when such matters were plainly within its
knowledge and it could not logically pretend ignorance as to the same, therefore, failed to properly
tender on issue.
[48]

Thus, the general denial of the Marcos children of the allegations in the petition for forfeiture for
lack of knowledge or information sufficient to form a belief as to the truth of the allegations since
they were not privy to the transactions cannot rightfully be accepted as a defense because they
are the legal heirs and successors-in-interest of Ferdinand E. Marcos and are therefore bound by the
acts of their father vis-a-vis the Swiss funds.
76

PRE-TRIAL BRIEF DATED OCTOBER 18, 1993
The pre-trial brief of Mrs. Marcos was adopted by the three Marcos children. In said brief, Mrs.
Marcos stressed that the funds involved were lawfully acquired. But, as in their answer, they failed to
state and substantiate how these funds were acquired lawfully. They failed to present and attach
even a single document that would show and prove the truth of their allegations. Section 6,
Rule 18 of the 1997 Rules of Civil Procedure provides:
The parties shall file with the court and serve on the adverse party, x x x their respective pre-trial
briefs which shall contain, among others:
x x x
(d) the documents or exhibits to be presented, stating the purpose thereof;
x x x
(f) the number and names of the witnesses, and the substance of their respective testimonies.
[49]

It is unquestionably within the courts power to require the parties to submit their pre-trial briefs
and to state the number of witnesses intended to be called to the stand, and a brief summary of the
evidence each of them is expected to give as well as to disclose the number of documents to be
submitted with a description of the nature of each. The tenor and character of the testimony of the
witnesses and of the documents to be deduced at the trial thus made known, in addition to the
particular issues of fact and law, it becomes apparent if genuine issues are being put forward
necessitating the holding of a trial. Likewise, the parties are obliged not only to make a formal
identification and specification of the issues and their proofs, and to put these matters in writing and
submit them to the court within the specified period for the prompt disposition of the action.
[50]

The pre-trial brief of Mrs. Marcos, as subsequently adopted by respondent Marcos children,
merely stated:
x x x
WITNESSES
4.1 Respondent Imelda will present herself as a witness and reserves the right to present additional
witnesses as may be necessary in the course of the trial.
x x x
DOCUMENTARY EVIDENCE
5.1 Respondent Imelda reserves the right to present and introduce in evidence documents as may
be necessary in the course of the trial.
Mrs. Marcos did not enumerate and describe the documents constituting her evidence. Neither
the names of witnesses nor the nature of their testimony was stated. What alone appeared certain
was the testimony of Mrs. Marcos only who in fact had previously claimed ignorance and lack of
knowledge. And even then, the substance of her testimony, as required by the rules, was not made
known either. Such cunning tactics of respondents are totally unacceptable to this Court. We hold
that, since no genuine issue was raised, the case became ripe for summary judgment.
OPPOSITION TO MOTION FOR SUMMARY JUDGMENT
77

DATED MARCH 21, 2000
The opposition filed by Mrs. Marcos to the motion for summary judgment dated March 21, 2000
of petitioner Republic was merely adopted by the Marcos children as their own opposition to the
said motion. However, it was again not accompanied by affidavits, depositions or admissions as
required by Section 3, Rule 35 of the 1997 Rules on Civil Procedure:
x x x The adverse party may serve opposing affidavits, depositions, or admissions at least three (3)
days before hearing. After hearing, the judgment sought shall be rendered forthwith if the pleadings,
supporting affidavits, depositions, and admissions on file, show that, except as to the amount of
damages, there is no genuine issue as to any material fact and that the moving party is entitled to a
judgment as a matter of law.
[51]

The absence of opposing affidavits, depositions and admissions to contradict the sworn
declarations in the Republics motion only demonstrated that the averments of such opposition
were not genuine and therefore unworthy of belief.
Demurrer to Evidence dated May 2, 2000;
[52]

Motions for Reconsideration;
[53]
and Memoranda
of Mrs. Marcos and the Marcos children
[54]

All these pleadings again contained no allegations of facts showing their lawful acquisition of
the funds. Once more, respondents merely made general denials without alleging facts which
would have been admissible in evidence at the hearing, thereby failing to raise genuine issues of
fact.
Mrs. Marcos insists in her memorandum dated October 21, 2002 that, during the pre-trial, her
counsel stated that his client was just a beneficiary of the funds, contrary to petitioner Republics
allegation that Mrs. Marcos disclaimed ownership of or interest in the funds.
This is yet another indication that respondents presented a fictitious defense because, during the
pre-trial, Mrs. Marcos and the Marcos children deniedownership of or interest in the Swiss funds:
PJ Garchitorena:
Make of record that as far as Imelda Marcos is concerned through the statement of Atty. Armando
M. Marcelo that the US$360 million more or less subject matter of the instant lawsuit as allegedly
obtained from the various Swiss Foundations do not belong to the estate of Marcos or to Imelda
Marcos herself. Thats your statement of facts?
Atty. MARCELO:
Yes, Your Honor.
PJ Garchitorena:
Thats it. Okay. Counsel for Manotoc and Manotoc, Jr. What is your point here? Does the estate of
Marcos own anything of the $360 million subject of this case.
Atty. TECSON:
We joined the Manifestation of Counsel.
PJ Garchitorena:
78

You do not own anything?
Atty. TECSON:
Yes, Your Honor.
PJ Garchitorena:
Counsel for Irene Araneta?
Atty. SISON:
I join the position taken by my other compaeros here, Your Honor.
xxx
Atty. SISON:
Irene Araneta as heir do (sic) not own any of the amount, Your Honor.
[55]

We are convinced that the strategy of respondent Marcoses was to confuse petitioner Republic
as to what facts they would prove or what issues they intended to pose for the court's resolution.
There is no doubt in our mind that they were leading petitioner Republic, and now this Court, to
perplexity, if not trying to drag this forfeiture case to eternity.
Manifestation dated May 26, 1998 filed by MRS.
Marcos; General/Supplemental Compromise
Agreement dated December 28, 1993
These pleadings of respondent Marcoses presented nothing but feigned defenses. In their earlier
pleadings, respondents alleged either that they had no knowledge of the existence of the Swiss
deposits or that they could no longer remember anything as it happened a long time ago. As to
Mrs. Marcos, she remembered that it was lawfully acquired.
In her Manifestation dated May 26, 1998, Mrs. Marcos stated that:
COMES NOW undersigned counsel for respondent Imelda R. Marcos, and before this Honorable
Court, most respectfully manifests:
That respondent Imelda R, Marcos owns 90% of the subject matter of the above-entitled case, being
the sole beneficiary of the dollar deposits in the name of the various foundations alleged in the
case;
That in fact only 10% of the subject matter in the above-entitled case belongs to the estate of the
late President Ferdinand E. Marcos.
In the Compromise/Supplemental Agreements, respondent Marcoses sought to implement the
agreed distribution of the Marcos assets, including the Swiss deposits. This was, to us, an unequivocal
admission of ownership by the Marcoses of the said deposits.
But, as already pointed out, during the pre-trial conference, respondent Marcoses denied
knowledge as well as ownership of the Swiss funds.
79

Anyway we look at it, respondent Marcoses have put forth no real defense. The facts pleaded
by respondents, while ostensibly raising important questions or issues of fact, in reality comprised
mere verbiage that was evidently wanting in substance and constituted no genuine issues for trial.
We therefore rule that, under the circumstances, summary judgment is proper.
In fact, it is the law itself which determines when summary judgment is called for. Under the rules,
summary judgment is appropriate when there are no genuine issues of fact requiring the
presentation of evidence in a full-blown trial. Even if on their face the pleadings appear to raise
issue, if the affidavits, depositions and admissions show that such issues are not genuine, then
summary judgment as prescribed by the rules must ensue as a matter of law.
[56]

In sum, mere denials, if unaccompanied by any fact which will be admissible in evidence at a
hearing, are not sufficient to raise genuine issues of fact and will not defeat a motion for summary
judgment.
[57]
A summary judgment is one granted upon motion of a party for an expeditious
settlement of the case, it appearing from the pleadings, depositions, admissions and affidavits that
there are no important questions or issues of fact posed and, therefore, the movant is entitled to a
judgment as a matter of law. A motion for summary judgment is premised on the assumption that
the issues presented need not be tried either because these are patently devoid of substance or
that there is no genuine issue as to any pertinent fact. It is a method sanctioned by the Rules of
Court for the prompt disposition of a civil action where there exists no serious
controversy.
[58]
Summary judgment is a procedural device for the prompt disposition of actions in
which the pleadings raise only a legal issue, not a genuine issue as to any material fact. The theory
of summary judgment is that, although an answer may on its face appear to tender issues requiring
trial, if it is established by affidavits, depositions or admissions that those issues are not genuine but
fictitious, the Court is justified in dispensing with the trial and rendering summary judgment for
petitioner.
[59]

In the various annexes to the petition for forfeiture, petitioner Republic attached sworn
statements of witnesses who had personal knowledge of the Marcoses' participation in the illegal
acquisition of funds deposited in the Swiss accounts under the names of five groups or foundations.
These sworn statements substantiated the ill-gotten nature of the Swiss bank deposits. In their answer
and other subsequent pleadings, however, the Marcoses merely made general denials of the
allegations against them without stating facts admissible in evidence at the hearing, thereby failing
to raise any genuine issues of fact.
Under these circumstances, a trial would have served no purpose at all and would have been
totally unnecessary, thus justifying a summary judgment on the petition for forfeiture. There were no
opposing affidavits to contradict the sworn declarations of the witnesses of petitioner Republic,
leading to the inescapable conclusion that the matters raised in the Marcoses answer were false.
Time and again, this Court has encountered cases like this which are either only half-heartedly
defended or, if the semblance of a defense is interposed at all, it is only to delay disposition and
gain time. It is certainly not in the interest of justice to allow respondent Marcoses to avail of the
appellate remedies accorded by the Rules of Court to litigants in good faith, to the prejudice of the
Republic and ultimately of the Filipino people. From the beginning, a candid demonstration of
respondents good faith should have been made to the court below. Without the deceptive
reasoning and argumentation, this protracted litigation could have ended a long time ago.
Since 1991, when the petition for forfeiture was first filed, up to the present, all respondents have
offered are foxy responses like lack of sufficient knowledge or lack of privity or they cannot recall
because it happened a long time ago or, as to Mrs. Marcos, the funds were lawfully
acquired. But, whenever it suits them, they also claim ownership of 90% of the funds and allege
that only 10% belongs to the Marcos estate. It has been an incredible charade from beginning to
end.
80

In the hope of convincing this Court to rule otherwise, respondents Maria Imelda Marcos-
Manotoc and Ferdinand R. Marcos Jr. contend that "by its positive acts and express admissions prior
to filing the motion for summary judgment on March 10, 2000, petitioner Republic had bound itself to
go to trial on the basis of existing issues. Thus, it had legally waived whatever right it had to move for
summary judgment."
[60]

We do not think so. The alleged positive acts and express admissions of the petitioner did not
preclude it from filing a motion for summary judgment.
Rule 35 of the 1997 Rules of Civil Procedure provides:
Rule 35
Summary Judgment
Section 1. Summary judgment for claimant. - A party seeking to recover upon a claim, counterclaim,
or cross-claim or to obtain a declaratory relief may, at any time after the pleading in answer thereto
has been served, move with supporting affidavits, depositions or admissions for a summary judgment
in his favor upon all or any part thereof.
Section 2. Summary judgment for defending party. - A party against whom a claim, counterclaim, or
cross-claim is asserted or a declaratory relief is sought may, at any time, move with supporting
affidavits, depositions or admissions for a summary judgment in his favor as to all or any part thereof.
(Emphasis ours)
[61]

Under the rule, the plaintiff can move for summary judgment at any time after the pleading in
answer thereto (i.e., in answer to the claim, counterclaim or cross-claim) has been served." No fixed
reglementary period is provided by the Rules. How else does one construe the phrase "any time
after the answer has been served?
This issue is actually one of first impression. No local jurisprudence or authoritative work has
touched upon this matter. This being so, an examination of foreign laws and jurisprudence,
particularly those of the United States where many of our laws and rules were copied, is in order.
Rule 56 of the Federal Rules of Civil Procedure provides that a party seeking to recover upon a
claim, counterclaim or cross-claim may move for summary judgment at any time after the expiration
of 20 days from the commencement of the action or after service of a motion for summary
judgment by the adverse party, and that a party against whom a claim, counterclaim or cross-claim
is asserted may move for summary judgment at any time.
However, some rules, particularly Rule 113 of the Rules of Civil Practice of New York, specifically
provide that a motion for summary judgment may not be made until issues have been joined, that
is, only after an answer has been served.
[62]
Under said rule, after issues have been joined, the
motion for summary judgment may be made at any stage of the litigation.
[63]
No fixed prescriptive
period is provided.
Like Rule 113 of the Rules of Civil Practice of New York, our rules also provide that a motion for
summary judgment may not be made until issues have been joined, meaning, the plaintiff has to
wait for the answer before he can move for summary judgment.
[64]
And like the New York rules, ours
do not provide for a fixed reglementary period within which to move for summary judgment.
This being so, the New York Supreme Court's interpretation of Rule 113 of the Rules of Civil
Practice can be applied by analogy to the interpretation of Section 1, Rule 35, of our 1997 Rules of
Civil Procedure.
81

Under the New York rule, after the issues have been joined, the motion for summary judgment
may be made at any stage of the litigation. And what exactly does the phrase "at any stage of the
litigation" mean? In Ecker vs. Muzysh,
[65]
the New York Supreme Court ruled:
"PER CURIAM.
Plaintiff introduced her evidence and the defendants rested on the case made by the plaintiff. The
case was submitted. Owing to the serious illness of the trial justice, a decision was not rendered
within sixty days after the final adjournment of the term at which the case was tried. With the
approval of the trial justice, the plaintiff moved for a new trial under Section 442 of the Civil Practice
Act. The plaintiff also moved for summary judgment under Rule 113 of the Rules of Civil Practice. The
motion was opposed mainly on the ground that, by proceeding to trial, the plaintiff had waived her
right to summary judgment and that the answer and the opposing affidavits raised triable issues. The
amount due and unpaid under the contract is not in dispute. The Special Term granted both
motions and the defendants have appealed.
The Special Term properly held that the answer and the opposing affidavits raised no triable
issue. Rule 113 of the Rules of Civil Practice and the Civil Practice Act prescribe no limitation as to the
time when a motion for summary judgment must be made. The object of Rule 113 is to empower the
court to summarily determine whether or not a bona fide issue exists between the parties, and there
is no limitation on the power of the court to make such a determination at any stage of the litigation."
(emphasis ours)
On the basis of the aforequoted disquisition, "any stage of the litigation" means that "even if the
plaintiff has proceeded to trial, this does not preclude him from thereafter moving for summary
judgment."
[66]

In the case at bar, petitioner moved for summary judgment after pre-trial and before its
scheduled date for presentation of evidence. Respondent Marcoses argue that, by agreeing to
proceed to trial during the pre-trial conference, petitioner "waived" its right to summary judgment.
This argument must fail in the light of the New York Supreme Court ruling which we apply by
analogy to this case. In Ecker,
[67]
the defendant opposed the motion for summary judgment on a
ground similar to that raised by the Marcoses, that is, "that plaintiff had waived her right to summary
judgment" by her act of proceeding to trial. If, as correctly ruled by the New York court, plaintiff was
allowed to move for summary judgment even after trial and submission of the case for resolution,
more so should we permit it in the present case where petitioner moved for summary
judgment before trial.
Therefore, the phrase "anytime after the pleading in answer thereto has been served" in Section
1, Rule 35 of our Rules of Civil Procedure means "at any stage of the litigation." Whenever it becomes
evident at any stage of the litigation that no triable issue exists, or that the defenses raised by the
defendant(s) are sham or frivolous, plaintiff may move for summary judgment. A contrary
interpretation would go against the very objective of the Rule on Summary Judgment which is to
"weed out sham claims or defenses thereby avoiding the expense and loss of time involved in a
trial."
[68]

In cases with political undertones like the one at bar, adverse parties will often do almost
anything to delay the proceedings in the hope that a future administration sympathetic to them
might be able to influence the outcome of the case in their favor. This is rank injustice we cannot
tolerate.
The law looks with disfavor on long, protracted and expensive litigation and encourages the
speedy and prompt disposition of cases. That is why the law and the rules provide for a number of
devices to ensure the speedy disposition of cases. Summary judgment is one of them.
82

Faithful therefore to the spirit of the law on summary judgment which seeks to avoid
unnecessary expense and loss of time in a trial, we hereby rule that petitioner Republic could validly
move for summary judgment any time after the respondents answer was filed or, for that matter, at
any subsequent stage of the litigation. The fact that petitioner agreed to proceed to trial did not in
any way prevent it from moving for summary judgment, as indeed no genuine issue of fact was
ever validly raised by respondent Marcoses.
This interpretation conforms with the guiding principle enshrined in Section 6, Rule 1 of the 1997
Rules of Civil Procedure that the "[r]ules should be liberally construed in order to promote their
objective of securing a just, speedy and inexpensive disposition of every action and proceeding."
[69]

Respondents further allege that the motion for summary judgment was based on respondents'
answer and other documents that had long been in the records of the case. Thus, by the time the
motion was filed on March 10, 2000, estoppel by laches had already set in against petitioner.
We disagree. Estoppel by laches is the failure or neglect for an unreasonable or unexplained
length of time to do that which, by exercising due diligence, could or should have been done
earlier, warranting a presumption that the person has abandoned his right or declined to assert
it.
[70]
In effect, therefore, the principle of laches is one of estoppel because "it prevents people who
have slept on their rights from prejudicing the rights of third parties who have placed reliance on the
inaction of the original parties and their successors-in-interest".
[71]

A careful examination of the records, however, reveals that petitioner was in fact never remiss in
pursuing its case against respondent Marcoses through every remedy available to it, including the
motion for summary judgment.
Petitioner Republic initially filed its motion for summary judgment on October 18, 1996. The
motion was denied because of the pending compromise agreement between the Marcoses and
petitioner. But during the pre-trial conference, the Marcoses denied ownership of the Swiss funds,
prompting petitioner to file another motion for summary judgment now under consideration by this
Court. It was the subsequent events that transpired after the answer was filed, therefore, which
prevented petitioner from filing the questioned motion. It was definitely not because of neglect or
inaction that petitioner filed the (second) motion for summary judgment years after respondents'
answer to the petition for forfeiture.
In invoking the doctrine of estoppel by laches, respondents must show not only unjustified
inaction but also that some unfair injury to them might result unless the action is barred.
[72]

This, respondents failed to bear out. In fact, during the pre-trial conference, the Marcoses
disclaimed ownership of the Swiss deposits. Not being the owners, as they claimed, respondents did
not have any vested right or interest which could be adversely affected by petitioner's alleged
inaction.
But even assuming for the sake of argument that laches had already set in, the doctrine of
estoppel or laches does not apply when the government sues as a sovereign or asserts
governmental rights.
[73]
Nor can estoppel validate an act that contravenes law or public policy.
[74]

As a final point, it must be emphasized that laches is not a mere question of time but is
principally a question of the inequity or unfairness of permitting a right or claim to be enforced or
asserted.
[75]
Equity demands that petitioner Republic should not be barred from pursuing the
people's case against the Marcoses.
(2) The Propriety of Forfeiture
The matter of summary judgment having been thus settled, the issue of whether or not petitioner
Republic was able to prove its case for forfeiture in accordance with the requisites of Sections 2 and
3 of RA 1379 now takes center stage.
83

The law raises the prima facie presumption that a property is unlawfully acquired, hence subject
to forfeiture, if its amount or value is manifestly disproportionate to the official salary and other lawful
income of the public officer who owns it. Hence, Sections 2 and 6 of RA 1379
[76]
provide:
x x x x x x
Section 2. Filing of petition. Whenever any public officer or employee has acquired during his
incumbency an amount or property which is manifestly out of proportion to his salary as such public
officer or employee and to his other lawful income and the income from legitimately acquired
property, said property shall be presumed prima facie to have been unlawfully acquired.
x x x x x x
Sec. 6. Judgment If the respondent is unable to show to the satisfaction of the court that he has
lawfully acquired the property in question, then the court shall declare such property in question,
forfeited in favor of the State, and by virtue of such judgment the property aforesaid shall become
the property of the State. Provided, That no judgment shall be rendered within six months before
any general election or within three months before any special election. The Court may, in addition,
refer this case to the corresponding Executive Department for administrative or criminal action, or
both.
From the above-quoted provisions of the law, the following facts must be established in order
that forfeiture or seizure of the Swiss deposits may be effected:
(1) ownership by the public officer of money or property acquired during his
incumbency, whether it be in his name or otherwise, and
(2) the extent to which the amount of that money or property exceeds, i. e., is grossly
disproportionate to, the legitimate income of the public officer.
That spouses Ferdinand and Imelda Marcos were public officials during the time material to the
instant case was never in dispute. Paragraph 4 of respondent Marcoses' answer categorically
admitted the allegations in paragraph 4 of the petition for forfeiture as to the personal
circumstances of Ferdinand E. Marcos as a public official who served without interruption as
Congressman, Senator, Senate President and President of the Republic of the Philippines from
December 1, 1965 to February 25, 1986.
[77]
Likewise, respondents admitted in their answer the
contents of paragraph 5 of the petition as to the personal circumstances of Imelda R. Marcos who
once served as a member of the Interim Batasang Pambansa from 1978 to 1984 and as Metro
Manila Governor, concurrently Minister of Human Settlements, from June 1976 to February 1986.
[78]

Respondent Mrs. Marcos also admitted in paragraph 10 of her answer the allegations of
paragraph 11 of the petition for forfeiture which referred to the accumulated salaries of respondents
Ferdinand E. Marcos and Imelda R. Marcos.
[79]
The combined accumulated salaries of the Marcos
couple were reflected in the Certification dated May 27, 1986 issued by then Minister of Budget and
Management Alberto Romulo.
[80]
The Certification showed that, from 1966 to 1985, Ferdinand E.
Marcos and Imelda R. Marcos had accumulated salaries in the amount of P1,570,000 and P718,750,
respectively, or a total of P2,288,750:
Ferdinand E. Marcos, as President
1966-1976 at P60,000/year P660,000
1977-1984 at P100,000/year 800,000
84

1985 at P110,000/year 110,000
P1,570,00
Imelda R. Marcos, as Minister
June 1976-1985 at P75,000/year P718,000
In addition to their accumulated salaries from 1966 to 1985 are the Marcos couples combined
salaries from January to February 1986 in the amount ofP30,833.33. Hence, their total accumulated
salaries amounted to P2,319,583.33. Converted to U.S. dollars on the basis of the corresponding
peso-dollar exchange rates prevailing during the applicable period when said salaries were
received, the total amount had an equivalent value of $304,372.43.
The dollar equivalent was arrived at by using the official annual rates of exchange of the
Philippine peso and the US dollar from 1965 to 1985 as well as the official monthly rates of exchange
in January and February 1986 issued by the Center for Statistical Information of the Bangko Sentral
ng Pilipinas.
Prescinding from the aforesaid admissions, Section 4, Rule 129 of the Rules of Court provides that:
Section 4. Judicial admissions An admission, verbal or written, made by a party in the course of
the proceedings in the same case does not require proof. The admission may be contradicted only
by showing that it was made through palpable mistake or that no such admission was made.
[81]

It is settled that judicial admissions may be made: (a) in the pleadings filed by the parties; (b) in
the course of the trial either by verbal or written manifestations or stipulations; or (c) in other stages
of judicial proceedings, as in the pre-trial of the case.
[82]
Thus, facts pleaded in the petition and
answer, as in the case at bar, are deemed admissions of petitioner and respondents, respectively,
who are not permitted to contradict them or subsequently take a position contrary to or inconsistent
with such admissions.
[83]

The sum of $304,372.43 should be held as the only known lawful income of respondents since
they did not file any Statement of Assets and Liabilities (SAL), as required by law, from which their net
worth could be determined. Besides, under the 1935 Constitution, Ferdinand E. Marcos as President
could not receive any other emolument from the Government or any of its subdivisions and
instrumentalities.
[84]
Likewise, under the 1973 Constitution, Ferdinand E. Marcos as President could
not receive during his tenure any other emolument from the Government or any other
source.
[85]
In fact, his management of businesses, like the administration of foundations to
accumulate funds, was expressly prohibited under the 1973 Constitution:
Article VII, Sec. 4(2) The President and the Vice-President shall not, during their tenure, hold any
other office except when otherwise provided in this Constitution, nor may they practice any
profession, participate directly or indirectly in the management of any business, or be financially
interested directly or indirectly in any contract with, or in any franchise or special privilege granted
by the Government or any other subdivision, agency, or instrumentality thereof, including any
government owned or controlled corporation.
Article VII, Sec. 11 No Member of the National Assembly shall appear as counsel before any court
inferior to a court with appellate jurisdiction, x x x. Neither shall he, directly or indirectly, be
interested financially in any contract with, or in any franchise or special privilege granted by the
Government, or any subdivision, agency, or instrumentality thereof including any government
owned or controlled corporation during his term of office. He shall not intervene in any matter
before any office of the government for his pecuniary benefit.
85

Article IX, Sec. 7 The Prime Minister and Members of the Cabinet shall be subject to the provision of
Section 11, Article VIII hereof and may not appear as counsel before any court or administrative
body, or manage any business, or practice any profession, and shall also be subject to such other
disqualification as may be provided by law.
Their only known lawful income of $304,372.43 can therefore legally and fairly serve as basis for
determining the existence of a prima facie case of forfeiture of the Swiss funds.
Respondents argue that petitioner was not able to establish a prima facie case for the forfeiture
of the Swiss funds since it failed to prove the essential elements under Section 3, paragraphs (c), (d)
and (e) of RA 1379. As the Act is a penal statute, its provisions are mandatory and should thus be
construed strictly against the petitioner and liberally in favor of respondent Marcoses.
We hold that it was not for petitioner to establish the Marcoses other lawful income or income
from legitimately acquired property for the presumption to apply because, as between petitioner
and respondents, the latter were in a better position to know if there were such other sources of
lawful income. And if indeed there was such other lawful income, respondents should have
specifically stated the same in their answer. Insofar as petitioner Republic was concerned, it was
enough to specify the known lawful income of respondents.
Section 9 of the PCGG Rules and Regulations provides that, in determining prima
facie evidence of ill-gotten wealth, the value of the accumulated assets, properties and other
material possessions of those covered by Executive Order Nos. 1 and 2
must be out of proportion to the known lawful income of such persons. The respondent
Marcos couple did not file any Statement of Assets and Liabilities (SAL) from which their net worth
could be determined. Their failure to file their SAL was in itself a violation of law and to allow them to
successfully assail the Republic for not presenting their SAL would reward them for their violation of
the law.
Further, contrary to the claim of respondents, the admissions made by them in their various
pleadings and documents were valid. It is of record that respondents judicially admitted that the
money deposited with the Swiss banks belonged to them.
We agree with petitioner that respondent Marcoses made judicial admissions of their ownership
of the subject Swiss bank deposits in their answer, the General/Supplemental Agreements, Mrs.
Marcos' Manifestation and Constancia dated May 5, 1999, and the Undertaking dated February 10,
1999. We take note of the fact that the Associate Justices of the Sandiganbayan were unanimous
in holding that respondents had made judicial admissions of their ownership of the Swiss funds.
In their answer, aside from admitting the existence of the subject funds, respondents likewise
admitted ownership thereof. Paragraph 22 of respondents' answer stated:
22. Respondents specifically DENY PARAGRAPH 23 insofar as it alleges that respondents
clandestinely stashed the country's wealth in Switzerland and hid the same under layers and layers
of foundations and corporate entities for being false, the truth being that respondents' aforesaid
properties were lawfully acquired. (emphasis supplied)
By qualifying their acquisition of the Swiss bank deposits as lawful, respondents unwittingly
admitted their ownership thereof.
Respondent Mrs. Marcos also admitted ownership of the Swiss bank deposits by failing to deny
under oath the genuineness and due execution of certain actionable documents bearing her
signature attached to the petition. As discussed earlier, Section 11, Rule 8
[86]
of the 1997 Rules of Civil
Procedure provides that material averments in the complaint shall be deemed admitted when not
specifically denied.
86

The General
[87]
and Supplemental
[88]
Agreements executed by petitioner and respondents on
December 28, 1993 further bolstered the claim of petitioner Republic that its case for forfeiture was
proven in accordance with the requisites of Sections 2 and 3 of RA 1379. The whereas clause in the
General Agreement declared that:
WHEREAS, the FIRST PARTY has obtained a judgment from the Swiss Federal Tribunal on December
21, 1990, that the $356 million belongs in principle to the Republic of the Philippines provided certain
conditionalities are met, but even after 7 years, the FIRST PARTY has not been able to procure a final
judgment of conviction against the PRIVATE PARTY.
While the Supplemental Agreement warranted, inter alia, that:
In consideration of the foregoing, the parties hereby agree that the PRIVATE PARTY shall be entitled
to the equivalent of 25% of the amount that may be eventually withdrawn from said $356 million
Swiss deposits.
The stipulations set forth in the General and Supplemental Agreements undeniably indicated the
manifest intent of respondents to enter into a compromise with petitioner. Corollarily, respondents
willingness to agree to an amicable settlement with the Republic only affirmed their ownership of the
Swiss deposits for the simple reason that no person would acquiesce to any concession over such
huge dollar deposits if he did not in fact own them.
Respondents make much capital of the pronouncement by this Court that the General and
Supplemental Agreements were null and void.
[89]
They insist that nothing in those agreements could
thus be admitted in evidence against them because they stood on the same ground as an
accepted offer which, under Section 27, Rule 130
[90]
of the 1997 Rules of Civil Procedure, provides
that in civil cases, an offer of compromise is not an admission of any liability and is not admissible in
evidence against the offeror.
We find no merit in this contention. The declaration of nullity of said agreements was premised
on the following constitutional and statutory infirmities: (1) the grant of
criminal immunity to the Marcos heirs was against the law; (2) the PCGGs commitment to
exempt from all forms of taxes the properties to be retained by the Marcos heirs was against the
Constitution; and (3) the governments undertaking to cause the dismissal of all cases filed against
the Marcoses pending before the Sandiganbayan and other courts encroached on the powers of
the judiciary. The reasons relied upon by the Court never in the least bit even touched on the
veracity and truthfulness of respondents admission with respect to their ownership of the Swiss
funds. Besides, having made certain admissions in those agreements, respondents cannot now
deny that they voluntarily admitted owning the subject Swiss funds, notwithstanding the fact that the
agreements themselves were later declared null and void.
The following observation of Sandiganbayan Justice Catalino Castaeda, Jr. in the decision
dated September 19, 2000 could not have been better said:
x x x The declaration of nullity of the two agreements rendered the same without legal effects but it
did not detract from the admissions of the respondents contained therein. Otherwise stated, the
admissions made in said agreements, as quoted above, remain binding on the respondents.
[91]

A written statement is nonetheless competent as an admission even if it is contained in a
document which is not itself effective for the purpose for which it is made, either by reason of
illegality, or incompetency of a party thereto, or by reason of not being signed, executed or
delivered. Accordingly, contracts have been held as competent evidence of admissions, although
they may be unenforceable.
[92]

87

The testimony of respondent Ferdinand Marcos, Jr. during the hearing on the motion for the
approval of the Compromise Agreement on April 29, 1998 also lent credence to the allegations of
petitioner Republic that respondents admitted ownership of the Swiss bank accounts. We quote
the salient portions of Ferdinand Jr.s formal declarations in open court:
ATTY. FERNANDO:
Mr. Marcos, did you ever have any meetings with PCGG Chairman Magtanggol C.
Gunigundo?
F. MARCOS, JR.:
Yes. I have had very many meetings in fact with Chairman.
ATTY. FERNANDO:
Would you recall when the first meeting occurred?
PJ GARCHITORENA:
In connection with what?
ATTY. FERNANDO:
In connection with the ongoing talks to compromise the various cases initiated by
PCGG against your family?
F. MARCOS, JR.:
The nature of our meetings was solely concerned with negotiations towards achieving
some kind of agreement between the Philippine government and the Marcos family. The
discussions that led up to the compromise agreement were initiated by our then counsel
Atty. Simeon Mesina x x x.
[93]

xxx xxx xxx
ATTY. FERNANDO:
What was your reaction when Atty. Mesina informed you of this possibility?
F. MARCOS, JR.:
My reaction to all of these approaches is that I am always open, we are always open,
we are very much always in search of resolution to the problem of the family and any
approach that has been made us, we have entertained. And so my reaction was the same
as what I have always why not? Maybe this is the one that will finally put an end to this
problem.
[94]

xxx xxx xxx
ATTY. FERNANDO:
Basically, what were the true amounts of the assets in the bank?
PJ GARCHITORENA:
So, we are talking about liquid assets here? Just Cash?
F. MARCOS, JR.:
Well, basically, any assets. Anything that was under the Marcos name in any of the
banks in Switzerland which may necessarily be not cash.
[95]

xxx xxx xxx
88

PJ GARCHITORENA:
x x x What did you do in other words, after being apprised of this contract in
connection herewith?
F. MARCOS, JR.:
I assumed that we are beginning to implement the agreement because this was
forwarded through the Philippine government lawyers through our lawyers and then,
subsequently, to me. I was a little surprised because we hadnt really discussed the details
of the transfer of the funds, what the bank accounts, what the mechanism would be. But
nevertheless, I was happy to see that as far as the PCGG is concerned, that the agreement
was perfected and that we were beginning to implement it and that was a source of
satisfaction to me because I thought that finally it will be the end.
[96]

Ferdinand Jr.'s pronouncements, taken in context and in their entirety, were a confirmation of
respondents recognition of their ownership of the Swiss bank deposits. Admissions of a party in his
testimony are receivable against him. If a party, as a witness, deliberately concedes a fact, such
concession has the force of a judicial admission.
[97]
It is apparent from Ferdinand Jr.s testimony that
the Marcos family agreed to negotiate with the Philippine government in the hope of finally
putting an end to the problems besetting the Marcos family regarding the Swiss accounts. This was
doubtlessly an acknowledgment of ownership on their part. The rule is that the testimony on the
witness stand partakes of the nature of a formal judicial admission when a party testifies clearly and
unequivocally to a fact which is peculiarly within his own knowledge.
[98]

In her Manifestation
[99]
dated May 26, 1998, respondent Imelda Marcos furthermore revealed
the following:
That respondent Imelda R. Marcos owns 90% of the subject matter of the above-entitled case, being
the sole beneficiary of the dollar deposits in the name of the various foundations alleged in the
case;
That in fact only 10% of the subject matter in the above-entitled case belongs to the estate of the
late President Ferdinand E. Marcos;
xxx xxx xxx
Respondents ownership of the Swiss bank accounts as borne out by Mrs. Marcos' manifestation
is as bright as sunlight. And her claim that she is merely a beneficiary of the Swiss deposits is belied
by her own signatures on the appended copies of the documents substantiating her ownership of
the funds in the name of the foundations. As already mentioned, she failed to specifically deny
under oath the authenticity of such documents, especially those involving William Saunders and
Jane Ryan which actually referred to Ferdinand Marcos and Imelda Marcos, respectively. That
failure of Imelda Marcos to specifically deny the existence, much less the genuineness and due
execution, of the instruments bearing her signature, was tantamount to a judicial admission of the
genuineness and due execution of said instruments, in accordance with Section 8, Rule 8
[100]
of the
1997 Rules of Civil Procedure.
Likewise, in her Constancia
[101]
dated May 6, 1999, Imelda Marcos prayed for the approval of the
Compromise Agreement and the subsequent release and transfer of the $150 million to the rightful
owner. She further made the following manifestations:
xxx xxx xxx
2. The Republics cause of action over the full amount is its forfeiture in favor of the government if
found to be ill-gotten. On the other hand, the Marcoses defend that it is a legitimate
89

asset. Therefore, both parties have an inchoate right of ownership over the account. If it turns out
that the account is of lawful origin, the Republic may yield to the Marcoses. Conversely, the
Marcoses must yield to the Republic. (underscoring supplied)
xxx xxx xxx
3. Consistent with the foregoing, and the Marcoses having committed themselves to helping the
less fortunate, in the interest of peace, reconciliation and unity, defendant MADAM IMELDA
ROMUALDEZ MARCOS, in firm abidance thereby, hereby affirms her agreement with the Republic for
the release and transfer of the US Dollar 150 million for proper disposition, without prejudice to the
final outcome of the litigation respecting the ownership of the remainder.
Again, the above statements were indicative of Imeldas admission of the Marcoses ownership
of the Swiss deposits as in fact the Marcoses defend that it (Swiss deposits) is a legitimate (Marcos)
asset.
On the other hand, respondents Maria Imelda Marcos-Manotoc, Ferdinand Marcos, Jr. and
Maria Irene Marcos-Araneta filed a motion
[102]
on May 4, 1998 asking the Sandiganbayan to place
the res (Swiss deposits) in custodia legis:
7. Indeed, the prevailing situation is fraught with danger! Unless the aforesaid Swiss deposits are
placed in custodia legis or within the Courts protective mantle, its dissipation or misappropriation by
the petitioner looms as a distinct possibility.
Such display of deep, personal interest can only come from someone who believes that he has
a marked and intimate right over the considerable dollar deposits. Truly, by filing said motion, the
Marcos children revealed their ownership of the said deposits.
Lastly, the Undertaking
[103]
entered into by the PCGG, the PNB and the Marcos foundations on
February 10, 1999, confirmed the Marcoses ownership of the Swiss bank deposits. The subject
Undertaking brought to light their readiness to pay the human rights victims out of the funds held in
escrow in the PNB. It stated:
WHEREAS, the Republic of the Philippines sympathizes with the plight of the human rights victims-
plaintiffs in the aforementioned litigation through the Second Party, desires to assist in the satisfaction
of the judgment awards of said human rights victims-plaintiffs, by releasing, assigning and or waiving
US$150 million of the funds held in escrow under the Escrow Agreements dated August 14, 1995,
although the Republic is not obligated to do so under final judgments of the Swiss courts dated
December 10 and 19, 1997, and January 8, 1998;
WHEREAS, the Third Party is likewise willing to release, assign and/or waive all its rights and interests
over said US$150 million to the aforementioned human rights victims-plaintiffs.
All told, the foregoing disquisition negates the claim of respondents that petitioner failed to
prove that they acquired or own the Swiss funds and that it was only by arbitrarily isolating and
taking certain statements made by private respondents out of context that petitioner was able to
treat these as judicial admissions. The Court is fully aware of the relevance, materiality and
implications of every pleading and document submitted in this case. This Court carefully scrutinized
the proofs presented by the parties. We analyzed, assessed and weighed them to ascertain if each
piece of evidence rightfully qualified as an admission. Owing to the far-reaching historical and
political implications of this case, we considered and examined, individually and totally, the
evidence of the parties, even if it might have bordered on factual adjudication which, by authority
of the rules and jurisprudence, is not usually done by this Court. There is no doubt in our mind that
respondent Marcoses admitted ownership of the Swiss bank deposits.
90

We have always adhered to the familiar doctrine that an admission made in the pleadings
cannot be controverted by the party making such admission and becomes conclusive on him, and
that all proofs submitted by him contrary thereto or inconsistent therewith should be ignored,
whether an objection is interposed by the adverse party or not.
[104]
This doctrine is embodied in
Section 4, Rule 129 of the Rules of Court:
SEC. 4. Judicial admissions. An admission, verbal or written, made by a party in the course of the
proceedings in the same case, does not require proof. The admission may be contradicted only by
showing that it was made through palpable mistake or that no such admission was made.
[105]

In the absence of a compelling reason to the contrary, respondents judicial admission of
ownership of the Swiss deposits is definitely binding on them.
The individual and separate admissions of each respondent bind all of them pursuant to
Sections 29 and 31, Rule 130 of the Rules of Court:
SEC. 29. Admission by co-partner or agent. The act or declaration of a partner or agent of the
party within the scope of his authority and during the existence of the partnership or agency, may
be given in evidence against such party after the partnership or agency is shown by evidence other
than such act or declaration. The same rule applies to the act or declaration of a joint owner, joint
debtor, or other person jointly interested with the party.
[106]

SEC. 31. Admission by privies. Where one derives title to property from another, the act,
declaration, or omission of the latter, while holding the title, in relation to the property, is evidence
against the former.
[107]

The declarations of a person are admissible against a party whenever a privity of estate exists
between the declarant and the party, the term privity of estate generally denoting a succession in
rights.
[108]
Consequently, an admission of one in privity with a party to the record is
competent.
[109]
Without doubt, privity exists among the respondents in this case. And where several
co-parties to the record are jointly interested in the subject matter of the controversy, the admission
of one is competent against all.
[110]

Respondents insist that the Sandiganbayan is correct in ruling that petitioner Republic has failed
to establish a prima facie case for the forfeiture of the Swiss deposits.
We disagree. The sudden turn-around of the Sandiganbayan was really strange, to say the least,
as its findings and conclusions were not borne out by the voluminous records of this case.
Section 2 of RA 1379 explicitly states that whenever any public officer or employee has
acquired during his incumbency an amount of property which is manifestly out of proportion to his
salary as such public officer or employee and to his other lawful income and the income from
legitimately acquired property, said property shall be presumed prima facie to have been unlawfully
acquired. x x x
The elements which must concur for this prima facie presumption to apply are:
(1) the offender is a public officer or employee;
(2) he must have acquired a considerable amount of money or property during his
incumbency; and
(3) said amount is manifestly out of proportion to his salary as such public officer or
employee and to his other lawful income and the income from legitimately acquired
property.
91

It is undisputed that spouses Ferdinand and Imelda Marcos were former public officers. Hence,
the first element is clearly extant.
The second element deals with the amount of money or property acquired by the public officer
during his incumbency. The Marcos couple indubitably acquired and owned properties during their
term of office. In fact, the five groups of Swiss accounts were admittedly owned by them. There is
proof of the existence and ownership of these assets and properties and it suffices to comply with
the second element.
The third requirement is met if it can be shown that such assets, money or property is manifestly
out of proportion to the public officers salary and his other lawful income. It is the proof of this third
element that is crucial in determining whether a prima facie presumption has been established in
this case.
Petitioner Republic presented not only a schedule indicating the lawful income of the Marcos
spouses during their incumbency but also evidence that they had huge deposits beyond such lawful
income in Swiss banks under the names of five different foundations. We believe petitioner was able
to establish the prima faciepresumption that the assets and properties acquired by the Marcoses
were manifestly and patently disproportionate to their aggregate salaries as public
officials. Otherwise stated, petitioner presented enough evidence to convince us that the Marcoses
had dollar deposits amounting to US $356 million representing the balance of the Swiss accounts of
the five foundations, an amount way, way beyond their aggregate legitimate income of only
US$304,372.43 during their incumbency as government officials.
Considering, therefore, that the total amount of the Swiss deposits was considerably out of
proportion to the known lawful income of the Marcoses, the presumption that said dollar deposits
were unlawfully acquired was duly established. It was sufficient for the petition for forfeiture to state
the approximate amount of money and property acquired by the respondents, and their total
government salaries. Section 9 of the PCGG Rules and Regulations states:
Prima Facie Evidence. Any accumulation of assets, properties, and other material possessions of
those persons covered by Executive Orders No. 1 and No. 2, whose value is out of proportion to their
known lawful income is prima facie deemed ill-gotten wealth.
Indeed, the burden of proof was on the respondents to dispute this presumption and show by
clear and convincing evidence that the Swiss deposits were lawfully acquired and that they had
other legitimate sources of income. A presumption is prima facie proof of the fact presumed and,
unless the fact thus prima facie established by legal presumption is disproved, it must stand as
proved.
[111]

Respondent Mrs. Marcos argues that the foreign foundations should have been impleaded as
they were indispensable parties without whom no complete determination of the issues could be
made. She asserts that the failure of petitioner Republic to implead the foundations rendered the
judgment void as the joinder of indispensable parties was a sine qua non exercise of judicial
power. Furthermore, the non-inclusion of the foreign foundations violated the conditions prescribed
by the Swiss government regarding the deposit of the funds in escrow, deprived them of their day in
court and denied them their rights under the Swiss constitution and international law.
[112]

The Court finds that petitioner Republic did not err in not impleading the foreign
foundations. Section 7, Rule 3 of the 1997 Rules of Civil Procedure,
[113]
taken from Rule 19b of the
American Federal Rules of Civil Procedure, provides for the compulsory joinder of indispensable
parties. Generally, an indispensable party must be impleaded for the complete determination of the
suit. However, failure to join an indispensable party does not divest the court of jurisdiction since the
rule regarding indispensable parties is founded on equitable considerations and is not jurisdictional.
Thus, the court is not divested of its power to render a decision even in the absence of indispensable
parties, though such judgment is not binding on the non-joined party.
[114]

92

An indispensable party
[115]
has been defined as one:
[who] must have a direct interest in the litigation; and if this interest is such that it cannot be
separated from that of the parties to the suit, if the court cannot render justice between the parties
in his absence, if the decree will have an injurious effect upon his interest, or if the final determination
of the controversy in his absence will be inconsistent with equity and good conscience.
There are two essential tests of an indispensable party: (1) can relief be afforded the plaintiff
without the presence of the other party? and (2) can the case be decided on its merits without
prejudicing the rights of the other party?
[116]
There is, however, no fixed formula for determining who
is an indispensable party; this can only be determined in the context and by the facts of the
particular suit or litigation.
In the present case, there was an admission by respondent Imelda Marcos in her May 26, 1998
Manifestation before the Sandiganbayan that she was the sole beneficiary of 90% of the subject
matter in controversy with the remaining 10% belonging to the estate of Ferdinand
Marcos.
[117]
Viewed against this admission, the foreign foundations were not indispensable parties.
Their non-participation in the proceedings did not prevent the court from deciding the case on its
merits and according full relief to petitioner Republic. The judgment ordering the return of the $356
million was neither inimical to the foundations interests nor inconsistent with equity and good
conscience. The admission of respondent Imelda Marcos only confirmed what was already
generally known: that the foundations were established precisely to hide the money stolen by the
Marcos spouses from petitioner Republic. It negated whatever illusion there was, if any, that the
foreign foundations owned even a nominal part of the assets in question.
The rulings of the Swiss court that the foundations, as formal owners, must be given an
opportunity to participate in the proceedings hinged on the assumption that they owned a nominal
share of the assets.
[118]
But this was already refuted by no less than Mrs. Marcos herself. Thus, she
cannot now argue that the ruling of the Sandiganbayan violated the conditions set by the Swiss
court. The directive given by the Swiss court for the foundations to participate in the proceedings
was for the purpose of protecting whatever nominal interest they might have had in the assets as
formal owners. But inasmuch as their ownership was subsequently repudiated by Imelda Marcos,
they could no longer be considered as indispensable parties and their participation in the
proceedings became unnecessary.
In Republic vs. Sandiganbayan,
[119]
this Court ruled that impleading the firms which are the res of
the action was unnecessary:
And as to corporations organized with ill-gotten wealth, but are not themselves guilty of
misappropriation, fraud or other illicit conduct in other words, the companies themselves are not
the object or thing involved in the action, the res thereof there is no need to implead them either.
Indeed, their impleading is not proper on the strength alone of their having been formed with ill-
gotten funds, absent any other particular wrongdoing on their part
Such showing of having been formed with, or having received ill-gotten funds, however strong or
convincing, does not, without more, warrant identifying the corporations in question with the person
who formed or made use of them to give the color or appearance of lawful, innocent acquisition to
illegally amassed wealth at the least, not so as place on the Government the onus of impleading
the former with the latter in actions to recover such wealth. Distinguished in terms of juridical
personality and legal culpability from their erring members or stockholders, said corporations are not
themselves guilty of the sins of the latter, of the embezzlement, asportation, etc., that gave rise to
the Governments cause of action for recovery; their creation or organization was merely the result
of their members (or stockholders) manipulations and maneuvers to conceal the illegal origins of
the assets or monies invested therein. In this light, they are simply the res in the actions for the
93

recovery of illegally acquired wealth, and there is, in principle, no cause of action against them and
no ground to implead them as defendants in said actions.
Just like the corporations in the aforementioned case, the foreign foundations here were set up
to conceal the illegally acquired funds of the Marcos spouses. Thus, they were simply the res in the
action for recovery of ill-gotten wealth and did not have to be impleaded for lack of cause of
action or ground to implead them.
Assuming arguendo, however, that the foundations were indispensable parties, the failure of
petitioner to implead them was a curable error, as held in the previously cited case of Republic vs.
Sandiganbayan:
[120]

Even in those cases where it might reasonably be argued that the failure of the Government to
implead the sequestered corporations as defendants is indeed a procedural abberation, as where
said firms were allegedly used, and actively cooperated with the defendants, as instruments or
conduits for conversion of public funds and property or illicit or fraudulent obtention of favored
government contracts, etc., slight reflection would nevertheless lead to the conclusion that the
defect is not fatal, but one correctible under applicable adjective rules e.g., Section 10, Rule 5 of
the Rules of Court [specifying the remedy of amendment during trial to authorize or to conform to
the evidence]; Section 1, Rule 20 [governing amendments before trial], in relation to the rule
respecting omission of so-called necessary or indispensable parties, set out in Section 11, Rule 3 of
the Rules of Court. It is relevant in this context to advert to the old familiar doctrines that the omission
to implead such parties is a mere technical defect which can be cured at any stage of the
proceedings even after judgment; and that, particularly in the case of indispensable parties, since
their presence and participation is essential to the very life of the action, for without them no
judgment may be rendered, amendments of the complaint in order to implead them should be
freely allowed, even on appeal, in fact even after rendition of judgment by this Court, where it
appears that the complaint otherwise indicates their identity and character as such indispensable
parties.
[121]

Although there are decided cases wherein the non-joinder of indispensable parties in fact led to
the dismissal of the suit or the annulment of judgment, such cases do not jibe with the matter at
hand. The better view is that non-joinder is not a ground to dismiss the suit or annul the judgment.
The rule on joinder of indispensable parties is founded on equity. And the spirit of the law is reflected
in Section 11, Rule 3
[122]
of the 1997 Rules of Civil Procedure. It prohibits the dismissal of a suit on the
ground of non-joinder or misjoinder of parties and allows the amendment of the complaint at any
stage of the proceedings, through motion or on order of the court on its own initiative.
[123]

Likewise, jurisprudence on the Federal Rules of Procedure, from which our Section 7, Rule 3
[124]
on
indispensable parties was copied, allows the joinder of indispensable parties even after judgment
has been entered if such is needed to afford the moving party full relief.
[125]
Mere delay in filing the
joinder motion does not necessarily result in the waiver of the right as long as the delay is
excusable.
[126]
Thus, respondent Mrs. Marcos cannot correctly argue that the judgment rendered by
the Sandiganbayan was void due to the non-joinder of the foreign foundations. The court had
jurisdiction to render judgment which, even in the absence of indispensable parties, was binding on
all the parties before it though not on the absent party.
[127]
If she really felt that she could not be
granted full relief due to the absence of the foreign foundations, she should have moved for their
inclusion, which was allowable at any stage of the proceedings. She never did. Instead she assailed
the judgment rendered.
In the face of undeniable circumstances and the avalanche of documentary evidence against
them, respondent Marcoses failed to justify the lawful nature of their acquisition of the said
assets. Hence, the Swiss deposits should be considered ill-gotten wealth and forfeited in favor of the
State in accordance with Section 6 of RA 1379:
94

SEC. 6. Judgment. If the respondent is unable to show to the satisfaction of the court that he has
lawfully acquired the property in question, then the court shall declare such property forfeited in
favor of the State, and by virtue of such judgment the property aforesaid shall become property of
the State x x x.
THE FAILURE TO PRESENT AUTHENTICATED
TRANSLATIONS OF THE SWISS DECISIONS
Finally, petitioner Republic contends that the Honorable Sandiganbayan Presiding Justice
Francis Garchitorena committed grave abuse of discretion in reversing himself on the ground that
the original copies of the authenticated Swiss decisions and their authenticated translations were
not submitted to the court a quo. Earlier PJ Garchitorena had quoted extensively from the unofficial
translation of one of these Swiss decisions in his ponencia dated July 29, 1999 when he denied the
motion to release US$150 Million to the human rights victims.
While we are in reality perplexed by such an incomprehensible change of heart, there might
nevertheless not be any real need to belabor the issue. The presentation of the authenticated
translations of the original copies of the Swiss decision was not de rigueur for the public respondent
to make findings of fact and reach its conclusions. In short, the Sandiganbayans decision was not
dependent on the determination of the Swiss courts. For that matter, neither is this Courts.
The release of the Swiss funds held in escrow in the PNB is dependent solely on the decision of
this jurisdiction that said funds belong to the petitioner Republic. What is important is our own
assessment of the sufficiency of the evidence to rule in favor of either petitioner Republic or
respondent Marcoses. In this instance, despite the absence of the authenticated translations of the
Swiss decisions, the evidence on hand tilts convincingly in favor of petitioner Republic.
WHEREFORE, the petition is hereby GRANTED. The assailed Resolution of the Sandiganbayan dated
January 31, 2002 is SET ASIDE. The Swiss deposits which were transferred to and are now deposited in
escrow at the Philippine National Bank in the estimated aggregate amount of US$658,175,373.60 as
of January 31, 2002, plus interest, are hereby forfeited in favor of petitioner Republic of the
Philippines.
SO ORDERED.


95

G.R. No. 118295 May 2, 1997
WIGBERTO E. TAADA and ANNA DOMINIQUE COSETENG, as members of the Philippine Senate and
as taxpayers et al petitioners,
vs.
EDGARDO ANGARA, et al, respondents.
PANGANIBAN, J.:
The emergence on January 1, 1995 of the World Trade Organization, abetted by the membership
thereto of the vast majority of countries has revolutionized international business and economic
relations amongst states. It has irreversibly propelled the world towards trade liberalization and
economic globalization. Liberalization, globalization, deregulation and privatization, the third-
millennium buzz words, are ushering in a new borderless world of business by sweeping away as
mere historical relics the heretofore traditional modes of promoting and protecting national
economies like tariffs, export subsidies, import quotas, quantitative restrictions, tax exemptions and
currency controls. Finding market niches and becoming the best in specific industries in a market-
driven and export-oriented global scenario are replacing age-old "beggar-thy-neighbor" policies
that unilaterally protect weak and inefficient domestic producers of goods and services. In the
words of Peter Drucker, the well-known management guru, "Increased participation in the world
economy has become the key to domestic economic growth and prosperity."
Brief Historical Background
To hasten worldwide recovery from the devastation wrought by the Second World War, plans for the
establishment of three multilateral institutions inspired by that grand political body, the United
Nations were discussed at Dumbarton Oaks and Bretton Woods. The first was the World Bank (WB)
which was to address the rehabilitation and reconstruction of war-ravaged and later developing
countries; the second, the International Monetary Fund (IMF) which was to deal with currency
problems; and the third, the International Trade Organization (ITO), which was to foster order and
predictability in world trade and to minimize unilateral protectionist policies that invite challenge,
even retaliation, from other states. However, for a variety of reasons, including its non-ratification by
the United States, the ITO, unlike the IMF and WB, never took off. What remained was only GATT
the General Agreement on Tariffs and Trade. GATT was a collection of treaties governing access to
the economies of treaty adherents with no institutionalized body administering the agreements or
dependable system of dispute settlement.
After half a century and several dizzying rounds of negotiations, principally the Kennedy Round, the
Tokyo Round and the Uruguay Round, the world finally gave birth to that administering body the
World Trade Organization with the signing of the "Final Act" in Marrakesh, Morocco and the
ratification of the WTO Agreement by its members.
1

Like many other developing countries, the Philippines joined WTO as a founding member with the
goal, as articulated by President Fidel V. Ramos in two letters to the Senate (infra), of improving
"Philippine access to foreign markets, especially its major trading partners, through the reduction of
tariffs on its exports, particularly agricultural and industrial products." The President also saw in the
WTO the opening of "new opportunities for the services sector . . . , (the reduction of) costs and
uncertainty associated with exporting . . . , and (the attraction of) more investments into the
country." Although the Chief Executive did not expressly mention it in his letter, the Philippines and
this is of special interest to the legal profession will benefit from the WTO system of dispute
settlement by judicial adjudication through the independent WTO settlement bodies called (1)
Dispute Settlement Panels and (2) Appellate Tribunal. Heretofore, trade disputes were settled mainly
96

through negotiations where solutions were arrived at frequently on the basis of relative bargaining
strengths, and where naturally, weak and underdeveloped countries were at a disadvantage.
The Petition in Brief
Arguing mainly (1) that the WTO requires the Philippines "to place nationals and products of
member-countries on the same footing as Filipinos and local products" and (2) that the WTO
"intrudes, limits and/or impairs" the constitutional powers of both Congress and the Supreme Court,
the instant petition before this Court assails the WTO Agreement for violating the mandate of the
1987 Constitution to "develop a self-reliant and independent national economy effectively
controlled by Filipinos . . . (to) give preference to qualified Filipinos (and to) promote the preferential
use of Filipino labor, domestic materials and locally produced goods."
Simply stated, does the Philippine Constitution prohibit Philippine participation in worldwide trade
liberalization and economic globalization? Does it proscribe Philippine integration into a global
economy that is liberalized, deregulated and privatized? These are the main questions raised in this
petition for certiorari, prohibition andmandamus under Rule 65 of the Rules of Court praying (1) for
the nullification, on constitutional grounds, of the concurrence of the Philippine Senate in the
ratification by the President of the Philippines of the Agreement Establishing the World Trade
Organization (WTO Agreement, for brevity) and (2) for the prohibition of its implementation and
enforcement through the release and utilization of public funds, the assignment of public officials
and employees, as well as the use of government properties and resources by respondent-heads of
various executive offices concerned therewith. This concurrence is embodied in Senate Resolution
No. 97, dated December 14, 1994.
The Facts
On April 15, 1994, Respondent Rizalino Navarro, then Secretary of The Department of Trade and
Industry (Secretary Navarro, for brevity), representing the Government of the Republic of the
Philippines, signed in Marrakesh, Morocco, the Final Act Embodying the Results of the Uruguay
Round of Multilateral Negotiations (Final Act, for brevity).
By signing the Final Act,
2
Secretary Navarro on behalf of the Republic of the Philippines, agreed:
(a) to submit, as appropriate, the WTO Agreement for the consideration of their
respective competent authorities, with a view to seeking approval of the Agreement in
accordance with their procedures; and
(b) to adopt the Ministerial Declarations and Decisions.
On August 12, 1994, the members of the Philippine Senate received a letter dated August 11, 1994
from the President of the Philippines,
3
stating among others that "the Uruguay Round Final Act is
hereby submitted to the Senate for its concurrence pursuant to Section 21, Article VII of the
Constitution."
On August 13, 1994, the members of the Philippine Senate received another letter from the President
of the Philippines
4
likewise dated August 11, 1994, which stated among others that "the Uruguay
Round Final Act, the Agreement Establishing the World Trade Organization, the Ministerial
Declarations and Decisions, and the Understanding on Commitments in Financial Services are
hereby submitted to the Senate for its concurrence pursuant to Section 21, Article VII of the
Constitution."
97

On December 9, 1994, the President of the Philippines certified the necessity of the immediate
adoption of P.S. 1083, a resolution entitled "Concurring in the Ratification of the Agreement
Establishing the World Trade Organization."
5

On December 14, 1994, the Philippine Senate adopted Resolution No. 97 which "Resolved, as it is
hereby resolved, that the Senate concur, as it hereby concurs, in the ratification by the President of
the Philippines of the Agreement Establishing the World Trade Organization."
6
The text of the WTO
Agreement is written on pages 137 et seq. of Volume I of the 36-volume Uruguay Round of
Multilateral Trade Negotiations and includes various agreements and associated legal instruments
(identified in the said Agreement as Annexes 1, 2 and 3 thereto and collectively referred to as
Multilateral Trade Agreements, for brevity) as follows:
ANNEX 1
Annex 1A: Multilateral Agreement on Trade in Goods
General Agreement on Tariffs and Trade 1994
Agreement on Agriculture
Agreement on the Application of Sanitary and
Phytosanitary Measures
Agreement on Textiles and Clothing
Agreement on Technical Barriers to Trade
Agreement on Trade-Related Investment Measures
Agreement on Implementation of Article VI of he
General Agreement on Tariffs and Trade
1994
Agreement on Implementation of Article VII of the
General on Tariffs and Trade 1994
Agreement on Pre-Shipment Inspection
Agreement on Rules of Origin
Agreement on Imports Licensing Procedures
Agreement on Subsidies and Coordinating
Measures
Agreement on Safeguards
Annex 1B: General Agreement on Trade in Services and Annexes
Annex 1C: Agreement on Trade-Related Aspects of Intellectual
Property Rights
ANNEX 2
Understanding on Rules and Procedures Governing
the Settlement of Disputes
ANNEX 3
Trade Policy Review Mechanism
On December 16, 1994, the President of the Philippines signed
7
the Instrument of Ratification,
declaring:
NOW THEREFORE, be it known that I, FIDEL V. RAMOS, President of the Republic of the
Philippines, after having seen and considered the aforementioned Agreement
98

Establishing the World Trade Organization and the agreements and associated legal
instruments included in Annexes one (1), two (2) and three (3) of that Agreement
which are integral parts thereof, signed at Marrakesh, Morocco on 15 April 1994, do
hereby ratify and confirm the same and every Article and Clause thereof.
To emphasize, the WTO Agreement ratified by the President of the Philippines is composed of the
Agreement Proper and "the associated legal instruments included in Annexes one (1), two (2) and
three (3) of that Agreement which are integral parts thereof."
On the other hand, the Final Act signed by Secretary Navarro embodies not only the WTO
Agreement (and its integral annexes aforementioned) but also (1) the Ministerial Declarations and
Decisions and (2) the Understanding on Commitments in Financial Services. In his Memorandum
dated May 13, 1996,
8
the Solicitor General describes these two latter documents as follows:
The Ministerial Decisions and Declarations are twenty-five declarations and decisions on a
wide range of matters, such as measures in favor of least developed countries, notification
procedures, relationship of WTO with the International Monetary Fund (IMF), and agreements
on technical barriers to trade and on dispute settlement.
The Understanding on Commitments in Financial Services dwell on, among other things,
standstill or limitations and qualifications of commitments to existing non-conforming
measures, market access, national treatment, and definitions of non-resident supplier of
financial services, commercial presence and new financial service.
On December 29, 1994, the present petition was filed. After careful deliberation on respondents'
comment and petitioners' reply thereto, the Court resolved on December 12, 1995, to give due
course to the petition, and the parties thereafter filed their respective memoranda. The court also
requested the Honorable Lilia R. Bautista, the Philippine Ambassador to the United Nations stationed
in Geneva, Switzerland, to submit a paper, hereafter referred to as "Bautista Paper,"
9
for brevity, (1)
providing a historical background of and (2) summarizing the said agreements.
During the Oral Argument held on August 27, 1996, the Court directed:
(a) the petitioners to submit the (1) Senate Committee Report on the matter in controversy
and (2) the transcript of proceedings/hearings in the Senate; and
(b) the Solicitor General, as counsel for respondents, to file (1) a list of Philippine treaties
signed prior to the Philippine adherence to the WTO Agreement, which derogate from
Philippine sovereignty and (2) copies of the multi-volume WTO Agreement and other
documents mentioned in the Final Act, as soon as possible.
After receipt of the foregoing documents, the Court said it would consider the case submitted for
resolution. In a Compliance dated September 16, 1996, the Solicitor General submitted a printed
copy of the 36-volume Uruguay Round of Multilateral Trade Negotiations, and in another
Compliance dated October 24, 1996, he listed the various "bilateral or multilateral treaties or
international instruments involving derogation of Philippine sovereignty." Petitioners, on the other
hand, submitted their Compliance dated January 28, 1997, on January 30, 1997.
The Issues
In their Memorandum dated March 11, 1996, petitioners summarized the issues as follows:
A. Whether the petition presents a political question or is otherwise not justiciable.
99

B. Whether the petitioner members of the Senate who participated in the deliberations
and voting leading to the concurrence are estopped from impugning the validity of
the Agreement Establishing the World Trade Organization or of the validity of the
concurrence.
C. Whether the provisions of the Agreement Establishing the World Trade Organization
contravene the provisions of Sec. 19, Article II, and Secs. 10 and 12, Article XII, all of the
1987 Philippine Constitution.
D. Whether provisions of the Agreement Establishing the World Trade Organization
unduly limit, restrict and impair Philippine sovereignty specifically the legislative power
which, under Sec. 2, Article VI, 1987 Philippine Constitution is "vested in the Congress of
the Philippines";
E. Whether provisions of the Agreement Establishing the World Trade Organization
interfere with the exercise of judicial power.
F. Whether the respondent members of the Senate acted in grave abuse of discretion
amounting to lack or excess of jurisdiction when they voted for concurrence in the
ratification of the constitutionally-infirm Agreement Establishing the World Trade
Organization.
G. Whether the respondent members of the Senate acted in grave abuse of discretion
amounting to lack or excess of jurisdiction when they concurred only in the ratification
of the Agreement Establishing the World Trade Organization, and not with the
Presidential submission which included the Final Act, Ministerial Declaration and
Decisions, and the Understanding on Commitments in Financial Services.
On the other hand, the Solicitor General as counsel for respondents "synthesized the several issues
raised by petitioners into the following":
10

1. Whether or not the provisions of the "Agreement Establishing the World Trade
Organization and the Agreements and Associated Legal Instruments included in
Annexes one (1), two (2) and three (3) of that agreement" cited by petitioners directly
contravene or undermine the letter, spirit and intent of Section 19, Article II and
Sections 10 and 12, Article XII of the 1987 Constitution.
2. Whether or not certain provisions of the Agreement unduly limit, restrict or impair the
exercise of legislative power by Congress.
3. Whether or not certain provisions of the Agreement impair the exercise of judicial
power by this Honorable Court in promulgating the rules of evidence.
4. Whether or not the concurrence of the Senate "in the ratification by the President of
the Philippines of the Agreement establishing the World Trade Organization" implied
rejection of the treaty embodied in the Final Act.
By raising and arguing only four issues against the seven presented by petitioners, the Solicitor
General has effectively ignored three, namely: (1) whether the petition presents a political question
or is otherwise not justiciable; (2) whether petitioner-members of the Senate (Wigberto E. Taada
and Anna Dominique Coseteng) are estopped from joining this suit; and (3) whether the
respondent-members of the Senate acted in grave abuse of discretion when they voted for
100

concurrence in the ratification of the WTO Agreement. The foregoing notwithstanding, this Court
resolved to deal with these three issues thus:
(1) The "political question" issue being very fundamental and vital, and being a matter that probes
into the very jurisdiction of this Court to hear and decide this case was deliberated upon by the
Court and will thus be ruled upon as the first issue;
(2) The matter of estoppel will not be taken up because this defense is waivable and the
respondents have effectively waived it by not pursuing it in any of their pleadings; in any event, this
issue, even if ruled in respondents' favor, will not cause the petition's dismissal as there are petitioners
other than the two senators, who are not vulnerable to the defense of estoppel; and
(3) The issue of alleged grave abuse of discretion on the part of the respondent senators will be
taken up as an integral part of the disposition of the four issues raised by the Solicitor General.
During its deliberations on the case, the Court noted that the respondents did not question the locus
standi of petitioners. Hence, they are also deemed to have waived the benefit of such issue. They
probably realized that grave constitutional issues, expenditures of public funds and serious
international commitments of the nation are involved here, and that transcendental public interest
requires that the substantive issues be met head on and decided on the merits, rather than skirted or
deflected by procedural matters.
11

To recapitulate, the issues that will be ruled upon shortly are:
(1) DOES THE PETITION PRESENT A JUSTICIABLE CONTROVERSY? OTHERWISE STATED, DOES THE
PETITION INVOLVE A POLITICAL QUESTION OVER WHICH THIS COURT HAS NO JURISDICTION?
(2) DO THE PROVISIONS OF THE WTO AGREEMENT AND ITS THREE ANNEXES CONTRAVENE SEC.
19, ARTICLE II, AND SECS. 10 AND 12, ARTICLE XII, OF THE PHILIPPINE CONSTITUTION?
(3) DO THE PROVISIONS OF SAID AGREEMENT AND ITS ANNEXES LIMIT, RESTRICT, OR IMPAIR THE
EXERCISE OF LEGISLATIVE POWER BY CONGRESS?
(4) DO SAID PROVISIONS UNDULY IMPAIR OR INTERFERE WITH THE EXERCISE OF JUDICIAL
POWER BY THIS COURT IN PROMULGATING RULES ON EVIDENCE?
(5) WAS THE CONCURRENCE OF THE SENATE IN THE WTO AGREEMENT AND ITS ANNEXES
SUFFICIENT AND/OR VALID, CONSIDERING THAT IT DID NOT INCLUDE THE FINAL ACT,
MINISTERIAL DECLARATIONS AND DECISIONS, AND THE UNDERSTANDING ON COMMITMENTS IN
FINANCIAL SERVICES?
The First Issue: Does the Court
Have Jurisdiction Over the Controversy?
In seeking to nullify an act of the Philippine Senate on the ground that it contravenes the
Constitution, the petition no doubt raises a justiciable controversy. Where an action of the legislative
branch 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. "The question thus posed is judicial rather than
political. The duty (to adjudicate) remains to assure that the supremacy of the Constitution is
upheld."
12
Once a "controversy as to the application or interpretation of a constitutional provision is
raised before this Court (as in the instant case), it becomes a legal issue which the Court is bound by
constitutional mandate to decide."
13

101

The jurisdiction of this Court to adjudicate the matters
14
raised in the petition is clearly set out in the
1987 Constitution,
15
as follows:
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.
The foregoing text emphasizes the judicial department's duty and power to strike down grave abuse
of discretion on the part of any branch or instrumentality of government including Congress. It is an
innovation in our political law.
16
As explained by former Chief Justice Roberto Concepcion,
17
"the
judiciary is the final arbiter on the question of whether or not a branch of government or any of its
officials has acted without jurisdiction or in excess of jurisdiction or so capriciously as to constitute an
abuse of discretion amounting to excess of jurisdiction. This is not only a judicial power but a duty to
pass judgment on matters of this nature."
As this Court has repeatedly and firmly emphasized in many cases,
18
it will not shirk, digress from or
abandon its sacred duty and authority to uphold the Constitution in matters that involve grave
abuse of discretion brought before it in appropriate cases, committed by any officer, agency,
instrumentality or department of the government.
As the petition alleges grave abuse of discretion and as there is no other plain, speedy or adequate
remedy in the ordinary course of law, we have no hesitation at all in holding that this petition should
be given due course and the vital questions raised therein ruled upon under Rule 65 of the Rules of
Court. Indeed, certiorari, prohibition andmandamus are appropriate remedies to raise constitutional
issues and to review and/or prohibit/nullify, when proper, acts of legislative and executive officials.
On this, we have no equivocation.
We should stress that, in deciding to take jurisdiction over this petition, this Court will not review
the wisdom of the decision of the President and the Senate in enlisting the country into the WTO, or
pass upon the merits of trade liberalization as a policy espoused by said international body. Neither
will it rule on the propriety of the government's economic policy of reducing/removing tariffs, taxes,
subsidies, quantitative restrictions, and other import/trade barriers. Rather, it will only exercise its
constitutional duty "to determine whether or not there had been a grave abuse of discretion
amounting to lack or excess of jurisdiction" on the part of the Senate in ratifying the WTO Agreement
and its three annexes.
Second Issue: The WTO Agreement
and Economic Nationalism
This is the lis mota, the main issue, raised by the petition.
Petitioners vigorously argue that the "letter, spirit and intent" of the Constitution mandating
"economic nationalism" are violated by the so-called "parity provisions" and "national treatment"
clauses scattered in various parts not only of the WTO Agreement and its annexes but also in the
Ministerial Decisions and Declarations and in the Understanding on Commitments in Financial
Services.
Specifically, the "flagship" constitutional provisions referred to are Sec 19, Article II, and Secs. 10 and
12, Article XII, of the Constitution, which are worded as follows:
Article II
102

DECLARATION OF PRINCIPLES
AND STATE POLICIES
xxx xxx xxx
Sec. 19. The State shall develop a self-reliant and independent national economy
effectively controlled by Filipinos.
xxx xxx xxx
Article XII
NATIONAL ECONOMY AND PATRIMONY
xxx xxx xxx
Sec. 10. . . . The Congress shall enact measures that will encourage the formation and
operation of enterprises whose capital is wholly owned by Filipinos.
In the grant of rights, privileges, and concessions covering the national economy and
patrimony, the State shall give preference to qualified Filipinos.
xxx xxx xxx
Sec. 12. The State shall promote the preferential use of Filipino labor, domestic
materials and locally produced goods, and adopt measures that help make them
competitive.
Petitioners aver that these sacred constitutional principles are desecrated by the following WTO
provisions quoted in their memorandum:
19

a) In the area of investment measures related to trade in goods (TRIMS, for brevity):
Article 2
National Treatment and Quantitative Restrictions.
1. Without prejudice to other rights and obligations under GATT 1994, no Member shall
apply any TRIM that is inconsistent with the provisions of Article II or Article XI of GATT
1994.
2. An illustrative list of TRIMS that are inconsistent with the obligations of general
elimination of quantitative restrictions provided for in paragraph I of Article XI of GATT
1994 is contained in the Annex to this Agreement." (Agreement on Trade-Related
Investment Measures, Vol. 27, Uruguay Round, Legal Instruments, p. 22121, emphasis
supplied).
The Annex referred to reads as follows:
ANNEX
Illustrative List
103

1. TRIMS that are inconsistent with the obligation of national treatment provided for in
paragraph 4 of Article III of GATT 1994 include those which are mandatory or
enforceable under domestic law or under administrative rulings, or compliance with
which is necessary to obtain an advantage, and which require:
(a) the purchase or use by an enterprise of products of domestic origin or from
any domestic source, whether specified in terms of particular products, in terms
of volume or value of products, or in terms of proportion of volume or value of its
local production; or
(b) that an enterprise's purchases or use of imported products be limited to an
amount related to the volume or value of local products that it exports.
2. TRIMS that are inconsistent with the obligations of general elimination of quantitative
restrictions provided for in paragraph 1 of Article XI of GATT 1994 include those which
are mandatory or enforceable under domestic laws or under administrative rulings, or
compliance with which is necessary to obtain an advantage, and which restrict:
(a) the importation by an enterprise of products used in or related to the local
production that it exports;
(b) the importation by an enterprise of products used in or related to its local
production by restricting its access to foreign exchange inflows attributable to
the enterprise; or
(c) the exportation or sale for export specified in terms of particular products, in
terms of volume or value of products, or in terms of a preparation of volume or
value of its local production. (Annex to the Agreement on Trade-Related
Investment Measures, Vol. 27, Uruguay Round Legal Documents, p. 22125,
emphasis supplied).
The paragraph 4 of Article III of GATT 1994 referred to is quoted as follows:
The products of the territory of any contracting party imported into the territory
of any other contracting party shall be accorded treatment no less favorable
than that accorded to like products of national origin in respect of laws,
regulations and requirements affecting their internal sale, offering for sale,
purchase, transportation, distribution or use, the provisions of this paragraph
shall not prevent the application of differential internal transportation charges
which are based exclusively on the economic operation of the means of
transport and not on the nationality of the product." (Article III, GATT 1947, as
amended by the Protocol Modifying Part II, and Article XXVI of GATT, 14
September 1948, 62 UMTS 82-84 in relation to paragraph 1(a) of the General
Agreement on Tariffs and Trade 1994, Vol. 1, Uruguay Round, Legal Instruments
p. 177, emphasis supplied).
(b) In the area of trade related aspects of intellectual property rights (TRIPS, for brevity):
Each Member shall accord to the nationals of other Members treatment no less
favourable than that it accords to its own nationals with regard to the
protection of intellectual property. . . (par. 1 Article 3, Agreement on Trade-
Related Aspect of Intellectual Property rights, Vol. 31, Uruguay Round, Legal
Instruments, p. 25432 (emphasis supplied)
104

(c) In the area of the General Agreement on Trade in Services:
National Treatment
1. In the sectors inscribed in its schedule, and subject to any conditions and
qualifications set out therein, each Member shall accord to services and service
suppliers of any other Member, in respect of all measures affecting the supply of
services, treatment no less favourable than it accords to its own like services and
service suppliers.
2. A Member may meet the requirement of paragraph I by according to
services and service suppliers of any other Member, either formally suppliers of
any other Member, either formally identical treatment or formally different
treatment to that it accords to its own like services and service suppliers.
3. Formally identical or formally different treatment shall be considered to be
less favourable if it modifies the conditions of completion in favour of services or
service suppliers of the Member compared to like services or service suppliers of
any other Member. (Article XVII, General Agreement on Trade in Services, Vol.
28, Uruguay Round Legal Instruments, p. 22610 emphasis supplied).
It is petitioners' position that the foregoing "national treatment" and "parity provisions" of the WTO
Agreement "place nationals and products of member countries on the same footing as Filipinos and
local products," in contravention of the "Filipino First" policy of the Constitution. They allegedly render
meaningless the phrase "effectively controlled by Filipinos." The constitutional conflict becomes more
manifest when viewed in the context of the clear duty imposed on the Philippines as a WTO
member to ensure the conformity of its laws, regulations and administrative procedures with its
obligations as provided in the annexed agreements.
20
Petitioners further argue that these provisions
contravene constitutional limitations on the role exports play in national development and negate
the preferential treatment accorded to Filipino labor, domestic materials and locally produced
goods.
On the other hand, respondents through the Solicitor General counter (1) that such Charter
provisions are not self-executing and merely set out general policies; (2) that these nationalistic
portions of the Constitution invoked by petitioners should not be read in isolation but should be
related to other relevant provisions of Art. XII, particularly Secs. 1 and 13 thereof; (3) that read
properly, the cited WTO clauses do not conflict with Constitution; and (4) that the WTO Agreement
contains sufficient provisions to protect developing countries like the Philippines from the harshness
of sudden trade liberalization.
We shall now discuss and rule on these arguments.
Declaration of Principles
Not Self-Executing
By its very title, Article II of the Constitution is a "declaration of principles and state policies." The
counterpart of this article in the 1935 Constitution
21
is called the "basic political creed of the nation"
by Dean Vicente Sinco.
22
These principles in Article II are not intended to be self-executing principles
ready for enforcement through the courts.
23
They are used by the judiciary as aids or as guides in
the exercise of its power of judicial review, and by the legislature in its enactment of laws. As held in
the leading case of Kilosbayan, Incorporated vs. Morato,
24
the principles and state policies
enumerated in Article II and some sections of Article XII are not "self-executing provisions, the
105

disregard of which can give rise to a cause of action in the courts. They do not embody judicially
enforceable constitutional rights but guidelines for legislation."
In the same light, we held in Basco vs. Pagcor
25
that broad constitutional principles need legislative
enactments to implement the, thus:
On petitioners' allegation that P.D. 1869 violates Sections 11 (Personal Dignity) 12 (Family) and
13 (Role of Youth) of Article II; Section 13 (Social Justice) of Article XIII and Section 2
(Educational Values) of Article XIV of the 1987 Constitution, suffice it to state also that these
are merely statements of principles and policies. As such, they are basically not self-
executing, meaning a law should be passed by Congress to clearly define and effectuate
such principles.
In general, therefore, the 1935 provisions were not intended to be self-executing
principles ready for enforcement through the courts. They were rather directives
addressed to the executive and to the legislature. If the executive and the legislature
failed to heed the directives of the article, the available remedy was not judicial but
political. The electorate could express their displeasure with the failure of the executive
and the legislature through the language of the ballot. (Bernas, Vol. II, p. 2).
The reasons for denying a cause of action to an alleged infringement of board constitutional
principles are sourced from basic considerations of due process and the lack of judicial authority to
wade "into the uncharted ocean of social and economic policy making." Mr. Justice Florentino P.
Feliciano in his concurring opinion inOposa vs. Factoran, Jr.,
26
explained these reasons as follows:
My suggestion is simply that petitioners must, before the trial court, show a more specific legal
right a right cast in language of a significantly lower order of generality than Article II (15)
of the Constitution that is or may be violated by the actions, or failures to act, imputed to
the public respondent by petitioners so that the trial court can validly render judgment
grating all or part of the relief prayed for. To my mind, the court should be understood as
simply saying that such a more specific legal right or rights may well exist in our corpus of law,
considering the general policy principles found in the Constitution and the existence of the
Philippine Environment Code, and that the trial court should have given petitioners an
effective opportunity so to demonstrate, instead of aborting the proceedings on a motion to
dismiss.
It seems to me important that the legal right which is an essential component of a cause of
action be a specific, operable legal right, rather than a constitutional or statutory policy, for
at least two (2) reasons. One is that unless the legal right claimed to have been violated or
disregarded is given specification in operational terms, defendants may well be unable to
defend themselves intelligently and effectively; in other words, there are due process
dimensions to this matter.
The second is a broader-gauge consideration where a specific violation of law or
applicable regulation is not alleged or proved, petitioners can be expected to fall back on
the expanded conception of judicial power in the second paragraph of Section 1 of Article
VIII of the Constitution which reads:
Sec. 1. . . .
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
106

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. (Emphasis supplied)
When substantive standards as general as "the right to a balanced and healthy ecology" and
"the right to health" are combined with remedial standards as broad ranging as "a grave
abuse of discretion amounting to lack or excess of jurisdiction," the result will be, it is
respectfully submitted, to propel courts into the uncharted ocean of social and economic
policy making. At least in respect of the vast area of environmental protection and
management, our courts have no claim to special technical competence and experience
and professional qualification. Where no specific, operable norms and standards are shown
to exist, then the policy making departments the legislative and executive departments
must be given a real and effective opportunity to fashion and promulgate those norms and
standards, and to implement them before the courts should intervene.
Economic Nationalism Should Be Read with
Other Constitutional Mandates to Attain
Balanced Development of Economy
On the other hand, Secs. 10 and 12 of Article XII, apart from merely laying down general principles
relating to the national economy and patrimony, should be read and understood in relation to the
other sections in said article, especially Secs. 1 and 13 thereof which read:
Sec. 1. The goals of the national economy are a more equitable distribution of opportunities,
income, and wealth; a sustained increase in the amount of goods and services produced by
the nation for the benefit of the people; and an expanding productivity as the key to raising
the quality of life for all especially the underprivileged.
The State shall promote industrialization and full employment based on sound agricultural
development and agrarian reform, through industries that make full and efficient use of
human and natural resources, and which are competitive in both domestic and foreign
markets. However, the State shall protect Filipino enterprises against unfair foreign
competition and trade practices.
In the pursuit of these goals, all sectors of the economy and all regions of the country shall be
given optimum opportunity to develop. . . .
xxx xxx xxx
Sec. 13. The State shall pursue a trade policy that serves the general welfare and utilizes all
forms and arrangements of exchange on the basis of equality and reciprocity.
As pointed out by the Solicitor General, Sec. 1 lays down the basic goals of national economic
development, as follows:
1. A more equitable distribution of opportunities, income and wealth;
2. A sustained increase in the amount of goods and services provided by the nation for the benefit
of the people; and
3. An expanding productivity as the key to raising the quality of life for all especially the
underprivileged.
107

With these goals in context, the Constitution then ordains the ideals of economic nationalism (1) by
expressing preference in favor of qualified Filipinos "in the grant of rights, privileges and concessions
covering the national economy and patrimony"
27
and in the use of "Filipino labor, domestic
materials and locally-produced goods"; (2) by mandating the State to "adopt measures that help
make them competitive;
28
and (3) by requiring the State to "develop a self-reliant and independent
national economy effectively controlled by Filipinos."
29
In similar language, the Constitution takes
into account the realities of the outside world as it requires the pursuit of "a trade policy that serves
the general welfare and utilizes all forms and arrangements of exchange on the basis of equality ad
reciprocity";
30
and speaks of industries "which are competitive in both domestic
and foreign markets" as well as of the protection of "Filipino enterprises againstunfair foreign
competition and trade practices."
It is true that in the recent case of Manila Prince Hotel vs. Government Service Insurance System, et
al.,
31
this Court held that "Sec. 10, second par., Art. XII of the 1987 Constitution is a mandatory,
positive command which is complete in itself and which needs no further guidelines or implementing
laws or rule for its enforcement. From its very words the provision does not require any legislation to
put it in operation. It is per se judicially enforceable." However, as the constitutional provision itself
states, it is enforceable only in regard to "the grants of rights, privileges and concessions covering
national economy and patrimony" and not to every aspect of trade and commerce. It refers to
exceptions rather than the rule. The issue here is not whether this paragraph of Sec. 10 of Art. XII is
self-executing or not. Rather, the issue is whether, as a rule, there are enough balancing provisions in
the Constitution to allow the Senate to ratify the Philippine concurrence in the WTO Agreement. And
we hold that there are.
All told, while the Constitution indeed mandates a bias in favor of Filipino goods, services, labor and
enterprises, at the same time, it recognizes the need for business exchange with the rest of the world
on the bases of equality and reciprocity and limits protection of Filipino enterprises only against
foreign competition and trade practices that are unfair.
32
In other words, the Constitution did not
intend to pursue an isolationist policy. It did not shut out foreign investments, goods and services in
the development of the Philippine economy. While the Constitution does not encourage the
unlimited entry of foreign goods, services and investments into the country, it does not prohibit them
either. In fact, it allows an exchange on the basis of equality and reciprocity, frowning only on
foreign competition that is unfair.
WTO Recognizes Need to
Protect Weak Economies
Upon the other hand, respondents maintain that the WTO itself has some built-in advantages to
protect weak and developing economies, which comprise the vast majority of its members. Unlike in
the UN where major states have permanent seats and veto powers in the Security Council, in the
WTO, decisions are made on the basis of sovereign equality, with each member's vote equal in
weight to that of any other. There is no WTO equivalent of the UN Security Council.
WTO decides by consensus whenever possible, otherwise, decisions of the Ministerial
Conference and the General Council shall be taken by the majority of the votes cast,
except in cases of interpretation of the Agreement or waiver of the obligation of a
member which would require three fourths vote. Amendments would require two thirds
vote in general. Amendments to MFN provisions and the Amendments provision will
require assent of all members. Any member may withdraw from the Agreement upon
the expiration of six months from the date of notice of withdrawals.
33

Hence, poor countries can protect their common interests more effectively through the WTO than
through one-on-one negotiations with developed countries. Within the WTO, developing countries
108

can form powerful blocs to push their economic agenda more decisively than outside the
Organization. This is not merely a matter of practical alliances but a negotiating strategy rooted in
law. Thus, the basic principles underlying the WTO Agreement recognize the need of developing
countries like the Philippines to "share in the growth in international tradecommensurate with the
needs of their economic development." These basic principles are found in the preamble
34
of the
WTO Agreement as follows:
The Parties to this Agreement,
Recognizing that their relations in the field of trade and economic endeavour should be
conducted with a view to raising standards of living, ensuring full employment and a large
and steadily growing volume of real income and effective demand, and expanding the
production of and trade in goods and services, while allowing for the optimal use of the
world's resources in accordance with the objective of sustainable development, seeking both
to protect and preserve the environment and to enhance the means for doing so in a
manner consistent with their respective needs and concerns at different levels of economic
development,
Recognizing further that there is need for positive efforts designed to ensure that developing
countries, and especially the least developed among them, secure a share in the growth in
international trade commensurate with the needs of their economic development,
Being desirous of contributing to these objectives by entering into reciprocal and mutually
advantageous arrangements directed to the substantial reduction of tariffs and other barriers
to trade and to the elimination of discriminatory treatment in international trade relations,
Resolved, therefore, to develop an integrated, more viable and durable multilateral trading
system encompassing the General Agreement on Tariffs and Trade, the results of past trade
liberalization efforts, and all of the results of the Uruguay Round of Multilateral Trade
Negotiations,
Determined to preserve the basic principles and to further the objectives underlying this
multilateral trading system, . . . (emphasis supplied.)
Specific WTO Provisos
Protect Developing Countries
So too, the Solicitor General points out that pursuant to and consistent with the foregoing basic
principles, the WTO Agreement grants developing countries a more lenient treatment, giving their
domestic industries some protection from the rush of foreign competition. Thus, with respect to tariffs
in general, preferential treatment is given to developing countries in terms of the amount of tariff
reduction and the period within which the reduction is to be spread out. Specifically, GATT requires
an average tariff reduction rate of 36% for developed countries to be effected within a period of six
(6) years while developing countries including the Philippines are required to effect an average
tariff reduction of only 24% within ten (10) years.
In respect to domestic subsidy, GATT requires developed countries to reduce domestic support to
agricultural products by 20% over six (6) years, as compared to only 13% for developing countries to
be effected within ten (10) years.
In regard to export subsidy for agricultural products, GATT requires developed countries to reduce
their budgetary outlays for export subsidy by 36% and export volumes receiving export subsidy
by 21% within a period of six (6) years. For developing countries, however, the reduction rate is
109

only two-thirds of that prescribed for developed countries and a longer period of ten (10)
years within which to effect such reduction.
Moreover, GATT itself has provided built-in protection from unfair foreign competition and trade
practices including anti-dumping measures, countervailing measures and safeguards against import
surges. Where local businesses are jeopardized by unfair foreign competition, the Philippines can
avail of these measures. There is hardly therefore any basis for the statement that under the WTO,
local industries and enterprises will all be wiped out and that Filipinos will be deprived of control of
the economy. Quite the contrary, the weaker situations of developing nations like the Philippines
have been taken into account; thus, there would be no basis to say that in joining the WTO, the
respondents have gravely abused their discretion. True, they have made a bold decision to steer the
ship of state into the yet uncharted sea of economic liberalization. But such decision cannot be set
aside on the ground of grave abuse of discretion, simply because we disagree with it or simply
because we believe only in other economic policies. As earlier stated, the Court in taking jurisdiction
of this case will not pass upon the advantages and disadvantages of trade liberalization as an
economic policy. It will only perform its constitutional duty of determining whether the Senate
committed grave abuse of discretion.
Constitution Does Not
Rule Out Foreign Competition
Furthermore, the constitutional policy of a "self-reliant and independent national economy"
35
does
not necessarily rule out the entry of foreign investments, goods and services. It contemplates neither
"economic seclusion" nor "mendicancy in the international community." As explained by
Constitutional Commissioner Bernardo Villegas, sponsor of this constitutional policy:
Economic self-reliance is a primary objective of a developing country that is keenly
aware of overdependence on external assistance for even its most basic needs. It
does not mean autarky or economic seclusion; rather, it means avoiding mendicancy
in the international community. Independence refers to the freedom from undue
foreign control of the national economy, especially in such strategic industries as in the
development of natural resources and public utilities.
36

The WTO reliance on "most favored nation," "national treatment," and "trade without discrimination"
cannot be struck down as unconstitutional as in fact they are rules of equality and reciprocity that
apply to all WTO members. Aside from envisioning a trade policy based on "equality and
reciprocity,"
37
the fundamental law encourages industries that are "competitive in both domestic
and foreign markets," thereby demonstrating a clear policy against a sheltered domestic trade
environment, but one in favor of the gradual development of robust industries that can compete
with the best in the foreign markets. Indeed, Filipino managers and Filipino enterprises have shown
capability and tenacity to compete internationally. And given a free trade environment, Filipino
entrepreneurs and managers in Hongkong have demonstrated the Filipino capacity to grow and to
prosper against the best offered under a policy of laissez faire.
Constitution Favors Consumers,
Not Industries or Enterprises
The Constitution has not really shown any unbalanced bias in favor of any business or enterprise, nor
does it contain any specific pronouncement that Filipino companies should be pampered with a
total proscription of foreign competition. On the other hand, respondents claim that WTO/GATT aims
to make available to the Filipino consumer the best goods and services obtainable anywhere in the
world at the most reasonable prices. Consequently, the question boils down to whether WTO/GATT
will favor the general welfare of the public at large.
110

Will adherence to the WTO treaty bring this ideal (of favoring the general welfare) to reality?
Will WTO/GATT succeed in promoting the Filipinos' general welfare because it will as promised by
its promoters expand the country's exports and generate more employment?
Will it bring more prosperity, employment, purchasing power and quality products at the most
reasonable rates to the Filipino public?
The responses to these questions involve "judgment calls" by our policy makers, for which they are
answerable to our people during appropriate electoral exercises. Such questions and the answers
thereto are not subject to judicial pronouncements based on grave abuse of discretion.
Constitution Designed to Meet
Future Events and Contingencies
No doubt, the WTO Agreement was not yet in existence when the Constitution was drafted and
ratified in 1987. That does not mean however that the Charter is necessarily flawed in the sense that
its framers might not have anticipated the advent of a borderless world of business. By the same
token, the United Nations was not yet in existence when the 1935 Constitution became effective.
Did that necessarily mean that the then Constitution might not have contemplated a diminution of
the absoluteness of sovereignty when the Philippines signed the UN Charter, thereby effectively
surrendering part of its control over its foreign relations to the decisions of various UN organs like the
Security Council?
It is not difficult to answer this question. Constitutions are designed to meet not only the vagaries of
contemporary events. They should be interpreted to cover even future and unknown
circumstances. It is to the credit of its drafters that a Constitution can withstand the assaults of bigots
and infidels but at the same time bend with the refreshing winds of change necessitated by
unfolding events. As one eminent political law writer and respected jurist
38
explains:
The Constitution must be quintessential rather than superficial, the root and not the blossom,
the base and frame-work only of the edifice that is yet to rise. It is but the core of the dream
that must take shape, not in a twinkling by mandate of our delegates, but slowly "in the
crucible of Filipino minds and hearts," where it will in time develop its sinews and gradually
gather its strength and finally achieve its substance. In fine, the Constitution cannot, like the
goddess Athena, rise full-grown from the brow of the Constitutional Convention, nor can it
conjure by mere fiat an instant Utopia. It must grow with the society it seeks to re-structure
and march apace with the progress of the race, drawing from the vicissitudes of history the
dynamism and vitality that will keep it, far from becoming a petrified rule, a pulsing, living law
attuned to the heartbeat of the nation.
Third Issue: The WTO Agreement and Legislative Power
The WTO Agreement provides that "(e)ach Member shall ensure the conformity of its laws,
regulations and administrative procedures with its obligations as provided in the annexed
Agreements."
39
Petitioners maintain that this undertaking "unduly limits, restricts and impairs
Philippine sovereignty, specifically the legislative power which under Sec. 2, Article VI of the 1987
Philippine Constitution is vested in the Congress of the Philippines. It is an assault on the sovereign
powers of the Philippines because this means that Congress could not pass legislation that will be
good for our national interest and general welfare if such legislation will not conform with the WTO
Agreement, which not only relates to the trade in goods . . . but also to the flow of investments and
money . . . as well as to a whole slew of agreements on socio-cultural matters . . .
40

111

More specifically, petitioners claim that said WTO proviso derogates from the power to tax, which is
lodged in the Congress.
41
And while the Constitution allows Congress to authorize the President to fix
tariff rates, import and export quotas, tonnage and wharfage dues, and other duties or imposts,
such authority is subject to "specified limits and . . . such limitations and restrictions" as Congress may
provide,
42
as in fact it did under Sec. 401 of the Tariff and Customs Code.
Sovereignty Limited by
International Law and Treaties
This Court notes and appreciates the ferocity and passion by which petitioners stressed their
arguments on this issue. However, while sovereignty has traditionally been deemed absolute and all-
encompassing on the domestic level, it is however subject to restrictions and limitations voluntarily
agreed to by the Philippines, expressly or impliedly, as a member of the family of nations.
Unquestionably, the Constitution did not envision a hermit-type isolation of the country from the rest
of the world. In its Declaration of Principles and State Policies, the Constitution "adopts the generally
accepted principles of international law as part of the law of the land, and adheres to the policy of
peace, equality, justice, freedom, cooperation and amity, with all nations."
43
By the doctrine of
incorporation, the country is bound by generally accepted principles of international law, which are
considered to be automatically part of our own laws.
44
One of the oldest and most fundamental
rules in international law is pacta sunt servanda international agreements must be performed in
good faith. "A treaty engagement is not a mere moral obligation but creates a legally binding
obligation on the parties . . . A state which has contracted valid international obligations is bound to
make in its legislations such modifications as may be necessary to ensure the fulfillment of the
obligations undertaken."
45

By their inherent nature, treaties really limit or restrict the absoluteness of sovereignty. By their
voluntary act, nations may surrender some aspects of their state power in exchange for greater
benefits granted by or derived from a convention or pact. After all, states, like individuals, live with
coequals, and in pursuit of mutually covenanted objectives and benefits, they also commonly
agree to limit the exercise of their otherwise absolute rights. Thus, treaties have been used to record
agreements between States concerning such widely diverse matters as, for example, the lease of
naval bases, the sale or cession of territory, the termination of war, the regulation of conduct of
hostilities, the formation of alliances, the regulation of commercial relations, the settling of claims, the
laying down of rules governing conduct in peace and the establishment of international
organizations.
46
The sovereignty of a state therefore cannot in fact and in reality be considered
absolute. Certain restrictions enter into the picture: (1) limitations imposed by the very nature of
membership in the family of nations and (2) limitations imposed by treaty stipulations. As aptly put by
John F. Kennedy, "Today, no nation can build its destiny alone. The age of self-sufficient nationalism
is over. The age of interdependence is here."
47

UN Charter and Other Treaties
Limit Sovereignty
Thus, when the Philippines joined the United Nations as one of its 51 charter members, it consented
to restrict its sovereign rights under the "concept of sovereignty as auto-limitation."
47
-A Under Article
2 of the UN Charter, "(a)ll members shall give the United Nations every assistance in any action it
takes in accordance with the present Charter, and shall refrain from giving assistance to any state
against which the United Nations is taking preventive or enforcement action." Such assistance
includes payment of its corresponding share not merely in administrative expenses but also in
expenditures for the peace-keeping operations of the organization. In its advisory opinion of July 20,
1961, the International Court of Justice held that money used by the United Nations Emergency
Force in the Middle East and in the Congo were "expenses of the United Nations" under Article 17,
paragraph 2, of the UN Charter. Hence, all its members must bear their corresponding share in such
112

expenses. In this sense, the Philippine Congress is restricted in its power to appropriate. It is
compelled to appropriate funds whether it agrees with such peace-keeping expenses or not. So
too, under Article 105 of the said Charter, the UN and its representatives enjoy diplomatic privileges
and immunities, thereby limiting again the exercise of sovereignty of members within their own
territory. Another example: although "sovereign equality" and "domestic jurisdiction" of all members
are set forth as underlying principles in the UN Charter, such provisos are however subject to
enforcement measures decided by the Security Council for the maintenance of international peace
and security under Chapter VII of the Charter. A final example: under Article 103, "(i)n the event of a
conflict between the obligations of the Members of the United Nations under the present Charter
and their obligations under any other international agreement, their obligation under the present
charter shall prevail," thus unquestionably denying the Philippines as a member the sovereign
power to make a choice as to which of conflicting obligations, if any, to honor.
Apart from the UN Treaty, the Philippines has entered into many other international pacts both
bilateral and multilateral that involve limitations on Philippine sovereignty. These are enumerated
by the Solicitor General in his Compliance dated October 24, 1996, as follows:
(a) Bilateral convention with the United States regarding taxes on income, where the
Philippines agreed, among others, to exempt from tax, income received in the Philippines by,
among others, the Federal Reserve Bank of the United States, the Export/Import Bank of the
United States, the Overseas Private Investment Corporation of the United States. Likewise, in
said convention, wages, salaries and similar remunerations paid by the United States to its
citizens for labor and personal services performed by them as employees or officials of the
United States are exempt from income tax by the Philippines.
(b) Bilateral agreement with Belgium, providing, among others, for the avoidance of double
taxation with respect to taxes on income.
(c) Bilateral convention with the Kingdom of Sweden for the avoidance of double taxation.
(d) Bilateral convention with the French Republic for the avoidance of double taxation.
(e) Bilateral air transport agreement with Korea where the Philippines agreed to exempt from
all customs duties, inspection fees and other duties or taxes aircrafts of South Korea and the
regular equipment, spare parts and supplies arriving with said aircrafts.
(f) Bilateral air service agreement with Japan, where the Philippines agreed to exempt from
customs duties, excise taxes, inspection fees and other similar duties, taxes or charges fuel,
lubricating oils, spare parts, regular equipment, stores on board Japanese aircrafts while on
Philippine soil.
(g) Bilateral air service agreement with Belgium where the Philippines granted Belgian air
carriers the same privileges as those granted to Japanese and Korean air carriers under
separate air service agreements.
(h) Bilateral notes with Israel for the abolition of transit and visitor visas where the Philippines
exempted Israeli nationals from the requirement of obtaining transit or visitor visas for a sojourn
in the Philippines not exceeding 59 days.
(i) Bilateral agreement with France exempting French nationals from the requirement of
obtaining transit and visitor visa for a sojourn not exceeding 59 days.
113

(j) Multilateral Convention on Special Missions, where the Philippines agreed that premises of
Special Missions in the Philippines are inviolable and its agents can not enter said premises
without consent of the Head of Mission concerned. Special Missions are also exempted from
customs duties, taxes and related charges.
(k) Multilateral convention on the Law of Treaties. In this convention, the Philippines agreed to
be governed by the Vienna Convention on the Law of Treaties.
(l) Declaration of the President of the Philippines accepting compulsory jurisdiction of the
International Court of Justice. The International Court of Justice has jurisdiction in all legal
disputes concerning the interpretation of a treaty, any question of international law, the
existence of any fact which, if established, would constitute a breach "of international
obligation."
In the foregoing treaties, the Philippines has effectively agreed to limit the exercise of its sovereign
powers of taxation, eminent domain and police power. The underlying consideration in this partial
surrender of sovereignty is the reciprocal commitment of the other contracting states in granting the
same privilege and immunities to the Philippines, its officials and its citizens. The same reciprocity
characterizes the Philippine commitments under WTO-GATT.
International treaties, whether relating to nuclear disarmament, human rights, the
environment, the law of the sea, or trade, constrain domestic political sovereignty through
the assumption of external obligations. But unless anarchy in international relations is preferred
as an alternative, in most cases we accept that the benefits of the reciprocal obligations
involved outweigh the costs associated with any loss of political sovereignty. (T)rade treaties
that structure relations by reference to durable, well-defined substantive norms and objective
dispute resolution procedures reduce the risks of larger countries exploiting raw economic
power to bully smaller countries, by subjecting power relations to some form of legal ordering.
In addition, smaller countries typically stand to gain disproportionately from trade
liberalization. This is due to the simple fact that liberalization will provide access to a larger set
of potential new trading relationship than in case of the larger country gaining enhanced
success to the smaller country's market.
48

The point is that, as shown by the foregoing treaties, a portion of sovereignty may be waived without
violating the Constitution, based on the rationale that the Philippines "adopts the generally
accepted principles of international law as part of the law of the land and adheres to the policy of .
. . cooperation and amity with all nations."
Fourth Issue: The WTO Agreement and Judicial Power
Petitioners aver that paragraph 1, Article 34 of the General Provisions and Basic Principles of the
Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)
49
intrudes on the power
of the Supreme Court to promulgate rules concerning pleading, practice and procedures.
50

To understand the scope and meaning of Article 34, TRIPS,
51
it will be fruitful to restate its full text as
follows:
Article 34
Process Patents: Burden of Proof
1. For the purposes of civil proceedings in respect of the infringement of the rights of the
owner referred to in paragraph 1 (b) of Article 28, if the subject matter of a patent is a
114

process for obtaining a product, the judicial authorities shall have the authority to order the
defendant to prove that the process to obtain an identical product is different from the
patented process. Therefore, Members shall provide, in at least one of the following
circumstances, that any identical product when produced without the consent of the patent
owner shall, in the absence of proof to the contrary, be deemed to have been obtained by
the patented process:
(a) if the product obtained by the patented process is new;
(b) if there is a substantial likelihood that the identical product was made by the
process and the owner of the patent has been unable through reasonable
efforts to determine the process actually used.
2. Any Member shall be free to provide that the burden of proof indicated in paragraph 1
shall be on the alleged infringer only if the condition referred to in subparagraph (a) is fulfilled
or only if the condition referred to in subparagraph (b) is fulfilled.
3. In the adduction of proof to the contrary, the legitimate interests of defendants in
protecting their manufacturing and business secrets shall be taken into account.
From the above, a WTO Member is required to provide a rule of disputable (not the words "in the
absence of proof to the contrary") presumption that a product shown to be identical to one
produced with the use of a patented process shall be deemed to have been obtained by the
(illegal) use of the said patented process, (1) where such product obtained by the patented
product is new, or (2) where there is "substantial likelihood" that the identical product was made with
the use of the said patented process but the owner of the patent could not determine the exact
process used in obtaining such identical product. Hence, the "burden of proof" contemplated by
Article 34 should actually be understood as the duty of the alleged patent infringer to overthrow
such presumption. Such burden, properly understood, actually refers to the "burden of evidence"
(burden of going forward) placed on the producer of the identical (or fake) product to show that his
product was produced without the use of the patented process.
The foregoing notwithstanding, the patent owner still has the "burden of proof" since, regardless of
the presumption provided under paragraph 1 of Article 34, such owner still has to introduce
evidence of the existence of the alleged identical product, the fact that it is "identical" to the
genuine one produced by the patented process and the fact of "newness" of the genuine product
or the fact of "substantial likelihood" that the identical product was made by the patented process.
The foregoing should really present no problem in changing the rules of evidence as the present law
on the subject, Republic Act No. 165, as amended, otherwise known as the Patent Law, provides a
similar presumption in cases of infringement of patented design or utility model, thus:
Sec. 60. Infringement. Infringement of a design patent or of a patent for utility model
shall consist in unauthorized copying of the patented design or utility model for the
purpose of trade or industry in the article or product and in the making, using or selling
of the article or product copying the patented design or utility model. Identity or
substantial identity with the patented design or utility model shall constitute evidence
of copying. (emphasis supplied)
Moreover, it should be noted that the requirement of Article 34 to provide a disputable presumption
applies only if (1) the product obtained by the patented process in NEW or (2) there is a substantial
likelihood that the identical product was made by the process and the process owner has not been
able through reasonable effort to determine the process used. Where either of these two provisos
115

does not obtain, members shall be free to determine the appropriate method of implementing the
provisions of TRIPS within their own internal systems and processes.
By and large, the arguments adduced in connection with our disposition of the third issue
derogation of legislative power will apply to this fourth issue also. Suffice it to say that the
reciprocity clause more than justifies such intrusion, if any actually exists. Besides, Article 34 does not
contain an unreasonable burden, consistent as it is with due process and the concept of adversarial
dispute settlement inherent in our judicial system.
So too, since the Philippine is a signatory to most international conventions on patents, trademarks
and copyrights, the adjustment in legislation and rules of procedure will not be substantial.
52

Fifth Issue: Concurrence Only in the WTO Agreement and
Not in Other Documents Contained in the Final Act
Petitioners allege that the Senate concurrence in the WTO Agreement and its annexes but not in
the other documents referred to in the Final Act, namely the Ministerial Declaration and Decisions
and the Understanding on Commitments in Financial Services is defective and insufficient and
thus constitutes abuse of discretion. They submit that such concurrence in the WTO
Agreement alone is flawed because it is in effect a rejection of the Final Act, which in turn was the
document signed by Secretary Navarro, in representation of the Republic upon authority of the
President. They contend that the second letter of the President to the Senate
53
which enumerated
what constitutes the Final Act should have been the subject of concurrence of the Senate.
"A final act, sometimes called protocol de cloture, is an instrument which records the winding up of
the proceedings of a diplomatic conference and usually includes a reproduction of the texts of
treaties, conventions, recommendations and other acts agreed upon and signed by the
plenipotentiaries attending the conference."
54
It is not the treaty itself. It is rather a summary of the
proceedings of a protracted conference which may have taken place over several years. The text
of the "Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations" is
contained in just one page
55
in Vol. I of the 36-volume Uruguay Round of Multilateral Trade
Negotiations. By signing said Final Act, Secretary Navarro as representative of the Republic of the
Philippines undertook:
(a) to submit, as appropriate, the WTO Agreement for the consideration of their
respective competent authorities with a view to seeking approval of the Agreement in
accordance with their procedures; and
(b) to adopt the Ministerial Declarations and Decisions.
The assailed Senate Resolution No. 97 expressed concurrence in exactly what the Final Act required
from its signatories, namely, concurrence of the Senate in the WTO Agreement.
The Ministerial Declarations and Decisions were deemed adopted without need for ratification. They
were approved by the ministers by virtue of Article XXV: 1 of GATT which provides that
representatives of the members can meet "to give effect to those provisions of this Agreement
which invoke joint action, and generally with a view to facilitating the operation and furthering the
objectives of this Agreement."
56

The Understanding on Commitments in Financial Services also approved in Marrakesh does not
apply to the Philippines. It applies only to those 27 Members which "have indicated in their
respective schedules of commitments on standstill, elimination of monopoly, expansion of operation
of existing financial service suppliers, temporary entry of personnel, free transfer and processing of
116

information, and national treatment with respect to access to payment, clearing systems and
refinancing available in the normal course of business."
57

On the other hand, the WTO Agreement itself expresses what multilateral agreements are deemed
included as its integral parts,
58
as follows:
Article II
Scope of the WTO
1. The WTO shall provide the common institutional frame-work for the conduct of trade
relations among its Members in matters to the agreements and associated legal instruments
included in the Annexes to this Agreement.
2. The Agreements and associated legal instruments included in Annexes 1, 2, and 3,
(hereinafter referred to as "Multilateral Agreements") are integral parts of this Agreement,
binding on all Members.
3. The Agreements and associated legal instruments included in Annex 4 (hereinafter referred
to as "Plurilateral Trade Agreements") are also part of this Agreement for those Members that
have accepted them, and are binding on those Members. The Plurilateral Trade Agreements
do not create either obligation or rights for Members that have not accepted them.
4. The General Agreement on Tariffs and Trade 1994 as specified in annex 1A (hereinafter
referred to as "GATT 1994") is legally distinct from the General Agreement on Tariffs and Trade,
dated 30 October 1947, annexed to the Final Act adopted at the conclusion of the Second
Session of the Preparatory Committee of the United Nations Conference on Trade and
Employment, as subsequently rectified, amended or modified (hereinafter referred to as
"GATT 1947").
It should be added that the Senate was well-aware of what it was concurring in as shown by the
members' deliberation on August 25, 1994. After reading the letter of President Ramos dated August
11, 1994,
59
the senators
of the Republic minutely dissected what the Senate was concurring in, as follows:
60

THE CHAIRMAN: Yes. Now, the question of the validity of the submission came up in the first
day hearing of this Committee yesterday. Was the observation made by Senator Taada that
what was submitted to the Senate was not the agreement on establishing the World Trade
Organization by the final act of the Uruguay Round which is not the same as the agreement
establishing the World Trade Organization? And on that basis, Senator Tolentino raised a point
of order which, however, he agreed to withdraw upon understanding that his suggestion for
an alternative solution at that time was acceptable. That suggestion was to treat the
proceedings of the Committee as being in the nature of briefings for Senators until the
question of the submission could be clarified.
And so, Secretary Romulo, in effect, is the President submitting a new . . . is he making a new
submission which improves on the clarity of the first submission?
MR. ROMULO: Mr. Chairman, to make sure that it is clear cut and there should be no
misunderstanding, it was his intention to clarify all matters by giving this letter.
THE CHAIRMAN: Thank you.
117

Can this Committee hear from Senator Taada and later on Senator Tolentino since they
were the ones that raised this question yesterday?
Senator Taada, please.
SEN. TAADA: Thank you, Mr. Chairman.
Based on what Secretary Romulo has read, it would now clearly appear that what is being
submitted to the Senate for ratification is not the Final Act of the Uruguay Round, but rather
the Agreement on the World Trade Organization as well as the Ministerial Declarations and
Decisions, and the Understanding and Commitments in Financial Services.
I am now satisfied with the wording of the new submission of President Ramos.
SEN. TAADA. . . . of President Ramos, Mr. Chairman.
THE CHAIRMAN. Thank you, Senator Taada. Can we hear from Senator Tolentino? And after
him Senator Neptali Gonzales and Senator Lina.
SEN. TOLENTINO, Mr. Chairman, I have not seen the new submission actually transmitted to us
but I saw the draft of his earlier, and I think it now complies with the provisions of the
Constitution, and with the Final Act itself . The Constitution does not require us to ratify the
Final Act. It requires us to ratify the Agreement which is now being submitted. The Final Act
itself specifies what is going to be submitted to with the governments of the participants.
In paragraph 2 of the Final Act, we read and I quote:
By signing the present Final Act, the representatives agree: (a) to submit as appropriate the
WTO Agreement for the consideration of the respective competent authorities with a view to
seeking approval of the Agreement in accordance with their procedures.
In other words, it is not the Final Act that was agreed to be submitted to the governments for
ratification or acceptance as whatever their constitutional procedures may provide but it is
the World Trade Organization Agreement. And if that is the one that is being submitted now, I
think it satisfies both the Constitution and the Final Act itself .
Thank you, Mr. Chairman.
THE CHAIRMAN. Thank you, Senator Tolentino, May I call on Senator Gonzales.
SEN. GONZALES. Mr. Chairman, my views on this matter are already a matter of record. And
they had been adequately reflected in the journal of yesterday's session and I don't see any
need for repeating the same.
Now, I would consider the new submission as an act ex abudante cautela.
THE CHAIRMAN. Thank you, Senator Gonzales. Senator Lina, do you want to make any
comment on this?
SEN. LINA. Mr. President, I agree with the observation just made by Senator Gonzales out of
the abundance of question. Then the new submission is, I believe, stating the obvious and
therefore I have no further comment to make.
118

Epilogue
In praying for the nullification of the Philippine ratification of the WTO Agreement, petitioners are
invoking this Court's constitutionally imposed duty "to determine whether or not there has been
grave abuse of discretion amounting to lack or excess of jurisdiction" on the part of the Senate in
giving its concurrence therein via Senate Resolution No. 97. Procedurally, a writ
of certiorari grounded on grave abuse of discretion may be issued by the Court under Rule 65 of the
Rules of Court when it is amply shown that petitioners have no other plain, speedy and adequate
remedy in the ordinary course of law.
By grave abuse of discretion is meant such capricious and whimsical exercise of judgment as is
equivalent to lack of jurisdiction.
61
Mere abuse of discretion is not enough. It must be grave abuse of
discretion as when the power is exercised in an arbitrary or despotic manner by reason of passion or
personal hostility, and must be so patent and so gross as to amount to an evasion of a positive duty
or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law.
62
Failure
on the part of the petitioner to show grave abuse of discretion will result in the dismissal of the
petition.
63

In rendering this Decision, this Court never forgets that the Senate, whose act is under review, is one
of two sovereign houses of Congress and is thus entitled to great respect in its actions. It is itself a
constitutional body independent and coordinate, and thus its actions are presumed regular and
done in good faith. Unless convincing proof and persuasive arguments are presented to overthrow
such presumptions, this Court will resolve every doubt in its favor. Using the foregoing well-accepted
definition of grave abuse of discretion and the presumption of regularity in the Senate's processes,
this Court cannot find any cogent reason to impute grave abuse of discretion to the Senate's
exercise of its power of concurrence in the WTO Agreement granted it by Sec. 21 of Article VII of the
Constitution.
64

It is true, as alleged by petitioners, that broad constitutional principles require the State to develop
an independent national economy effectively controlled by Filipinos; and to protect and/or prefer
Filipino labor, products, domestic materials and locally produced goods. But it is equally true that
such principles while serving as judicial and legislative guides are not in themselves sources of
causes of action. Moreover, there are other equally fundamental constitutional principles relied
upon by the Senate which mandate the pursuit of a "trade policy that serves the general welfare
and utilizes all forms and arrangements of exchange on the basis of equality and reciprocity" and
the promotion of industries "which are competitive in both domestic and foreign markets," thereby
justifying its acceptance of said treaty. So too, the alleged impairment of sovereignty in the exercise
of legislative and judicial powers is balanced by the adoption of the generally accepted principles
of international law as part of the law of the land and the adherence of the Constitution to the
policy of cooperation and amity with all nations.
That the Senate, after deliberation and voting, voluntarily and overwhelmingly gave its consent to
the WTO Agreement thereby making it "a part of the law of the land" is a legitimate exercise of its
sovereign duty and power. We find no "patent and gross" arbitrariness or despotism "by reason of
passion or personal hostility" in such exercise. It is not impossible to surmise that this Court, or at least
some of its members, may even agree with petitioners that it is more advantageous to the national
interest to strike down Senate Resolution No. 97. But that is not a legal reason to attribute grave
abuse of discretion to the Senate and to nullify its decision. To do so would constitute grave abuse in
the exercise of our own judicial power and duty. Ineludably, what the Senate did was a valid
exercise of its authority. As to whether such exercise was wise, beneficial or viable is outside the
realm of judicial inquiry and review. That is a matter between the elected policy makers and the
people. As to whether the nation should join the worldwide march toward trade liberalization and
economic globalization is a matter that our people should determine in electing their policy makers.
119

After all, the WTO Agreement allows withdrawal of membership, should this be the political desire of
a member.
The eminent futurist John Naisbitt, author of the best seller Megatrends, predicts an Asian
Renaissance
65
where "the East will become the dominant region of the world economically,
politically and culturally in the next century." He refers to the "free market" espoused by WTO as the
"catalyst" in this coming Asian ascendancy. There are at present about 31 countries including China,
Russia and Saudi Arabia negotiating for membership in the WTO. Notwithstanding objections against
possible limitations on national sovereignty, the WTO remains as the only viable structure for
multilateral trading and the veritable forum for the development of international trade law. The
alternative to WTO is isolation, stagnation, if not economic self-destruction. Duly enriched with
original membership, keenly aware of the advantages and disadvantages of globalization with its
on-line experience, and endowed with a vision of the future, the Philippines now straddles the
crossroads of an international strategy for economic prosperity and stability in the new millennium.
Let the people, through their duly authorized elected officers, make their free choice.
WHEREFORE, the petition is DISMISSED for lack of merit.
SO ORDERED.

120

G.R. No. 131544 March 16, 2001
EPG CONSTRUCTION CO., CIPER ELECTRICAL & ENGINEERING, SEPTA CONSTRUCTION CO., PHIL.
PLUMBING CO., HOME CONSTRUCTION INC., WORLD BUILDERS CO., GLASS WORLD INC.,
PERFORMANCE BUILDERS DEV'T. CO., DE LEON-ARANETA CONST. CO., J.D. MACAPAGAL CONST. CO.,
All represented by their Atty. IN FACT, MARCELO D, FORONDA, petitioners,
vs.
HON. GREGORIO R. VIGILAR, In His Capacity as Secretary of Public Works and
Highways, respondent.
BUENA, J.:
Sought to be reversed in the instant Petition for Certiorari is the Decision, dated 07 November 1997,
of the Regional Trial Court of Quezon City, Branch 226, in Civil Case No. Q-96-29243,
1
dismissing the
Petition for Mandamus filed by herein petitioners against herein respondent Hon. Gregorio Vigilar, in
his capacity as Secretary of the Department of Public Works and Highways (DPWH).
The tapestry of facts unfurls.
In 1983, the Ministry of Human Settlement, through the BLISS Development Corporation, initiated a
housing project on a government property along the east bank of the Manggahan Floodway in
Pasig City. For this purpose, the Ministry of Human Settlement entered into a Memorandum of
Agreement (MOA) with the Ministry of Public Works and Highways,
2
where the latter undertook to
develop the housing site and construct thereon 145 housing units.
By virtue of the MOA, the Ministry of Public Works and Highways forged individual contracts with
herein petitioners EPG Construction Co., Ciper Electrical and Engineering, Septa Construction Co.,
Phil. Plumbing Co., Home Construction Inc., World Builders Inc., Glass World Inc., Performance
Builders Development Co. and De Leon Araneta Construction Co., for the construction of the
housing units. Under the contracts, the scope of construction and funding therefor covered only
around "2/3 of each housing unit."
3
After complying with the terms of said contracts, and by reason
of the verbal request and assurance of then DPWH Undersecretary Aber Canlas that additional
funds would be available and forthcoming, petitioners agreed to undertake and perform
"additional constructions"
4
for the completion of the housing units, despite the absence of
appropriations and written contracts to cover subsequent expenses for the "additional
constructions."
Petitioners then received payment for the construction work duly covered by the individual written
contracts, thereby leaving an unpaid balance of P5,918,315.63,
5
which amount represents the
expenses for the "additional constructions" for the completion of the existing housing units. On 14
November 1988, petitioners sent a demand letter to the DPWH Secretary and submitted that their
claim for payment was favorably recommended by DPWH Assistant Secretary for Legal Services
Dominador Madamba, who recognized the existence of implied contractscovering the additional
constructions. Notwithstanding, DPWH Assistant Secretary Madamba opined that payment of
petitioners' money claims should be based on quantum meruit and should be forwarded to the
Commission on Audit (COA) for its due consideration and approval. The money claims were then
referred to COA which returned the same to the DPWH Auditor for auditorial action. On the basis of
the Inspection Report of the Auditor's Technical Staff, the DPWH Auditor interposed no objection to
the payment of the money claims subject to whatever action the COA may adopt.
In a Second Indorsement dated 27 July 1992, the COA returned the documents to the DPWH, stating
that funds should first be made available before COA could pass upon and act on the money
claims. In a Memorandum dated 30 July 1992, then DPWH Secretary Jose De Jesus requested the
121

Secretary of Budget and Management to release public funds for the payment of petitioners'
money claims, stating that the "amount is urgently needed in order to settle once and for all this (sic)
outstanding obligations of the government." In a Letter of the Undersecretary of Budget and
Management dated 20 December 1994, the amount of P5,819,316.00 was then released for the
payment of petitioners' money claims, under Advise of Allotment No. A4-1303-04-41-303.
In an Indorsement dated 27 December 1995, the COA referred anew the money claims to the
DPWH pursuant to COA Circular 95-006, thus:
"Respectfully returned thru the Auditor to the Honorable Secretary, Department of Public
Works and Highways, Port Area, Manila, the above-captioned subject (Re: Claim of Ten (10)
contractors for payment of Work accomplishments on the construction of the COGEO II
Housing Project, Pasig, Metro Manila) and reiterating the policy of this office as embodied in
COA Circular No. 95-006 dated May 18, 1995 totally lifting its pre-audit activities on all
financial transactions of the agencies of the government involving
implementation/prosecution of projects and/or payment of claims without exception so as to
vest on agency heads the prerogative to exercise fiscal responsibility thereon.
"The audit of the transaction shall be done after payment."
In a letter dated 26 August 1996, respondent DPWH Secretary Gregorio Vigilar denied the subject
money claims prompting herein petitioners to file before the Regional Trial Court of Quezon City,
Branch 226, a Petition for Mandamus praying that herein respondent be ordered:
"1) To pay petitioners the total of P5,819,316.00;
"2) To pay petitioners moral and exemplary damages in the amount to be fixed by the Court
and sum of P500,000.00 as attorney's fees.
On 18 February 1997, the lower court conducted a pre-trial conference where the parties appeared
and filed their respective pre-trial briefs. Further, respondent submitted a Memorandum to which
petitioners filed a Rejoinder.
On 07 November 1997, the lower court denied the Petition for Mandamus, in a Decision which
disposed as follows:
"WHEREFORE, in view of all the foregoing, the instant Petition for Mandamus is dismissed. The
order of September 24, 1997, submitting the Manifestation and Motion for Resolution, is
hereby withdrawn.
"SO ORDERED."
Hence, this petition where the core issue for resolution focuses on the right of petitioners-contractors
to compensation for a public works housing project.
In the case before us, respondent, citing among others Sections 46
6
and 47,
7
Chapter 7, Sub-Title B,
Title I, Book V of the Administrative Code of 1987 (E.O 292), posits that the "existence of
appropriations and availability of funds as certified to and verified by the proper accounting officials
are conditions sine qua non for the execution of government contracts."
8
Respondent harps on the
fact that "the additional work was pursued through the verbal request of then DPWH Undersecretary
Aber P. Canlas, despite the absence of the corresponding supplemental contracts and appropriate
funding."
9
According to respondent, "sans showing of certificate of availability of funds, the implied
contracts are considered fatally defective and considered inexistent and void ab initio."
122

Respondent concludes that "inasmuch as the additional work done was pursued in violation of the
mandatory provisions of the laws concerning contracts involving expenditure of public funds and in
excess of the public official's contracting authority, the same is not binding on the government and
impose no liability therefor."
10

Although this Court agrees with respondent's postulation that the "implied contracts", which covered
the additional constructions, are void, in view of violation of applicable laws, auditing rules and lack
of legal requirements,
11
we nonetheless find the instant petition laden with merit and uphold, in the
interest of substantial justice, petitioners-contractors' right to be compensated for the "additional
constructions" on the public works housing project, applying the principle of quantum meruit.
Interestingly, this case is not of first impression. In Eslao vs. Commission on Audit,
12
this Court likewise
allowed recovery by the contractor on the basis of quantum meruit, following our pronouncement
in Royal Trust Construction vs. Commission on Audit,
13
thus:
"In Royal Trust Construction vs. COA, a case involving the widening and deepening of the
Betis River in Pampanga at the urgent request of the local officials and with the knowledge
and consent of the Ministry of Public Works, even without a written contract and the covering
appropriation, the project was undertaken to prevent the overflowing of the neighboring
areas and to irrigate the adjacent farmlands. The contractor sought compensation for the
completed portion in the sum of over P1 million. While the payment was favorably
recommended by the Ministry of Public Works, it was denied by the respondent COA on the
ground of violation of mandatory legal provisions as the existence of corresponding
appropriations covering the contract cost. Under COA Res. No. 36-58 dated November 15,
1986, its existing policy is to allow recovery from covering contracts on the basis of quantum
meruit if there is delay in the accomplishment of the required certificate of availability of
funds to support a contract." (Emphasis ours)
In the Royal Construction case, this Court, applying the principle of quantum meruit in allowing
recovery by the contractor, elucidated:
"The work done by it (the contractor) was impliedly authorized and later expressly
acknowledged by the Ministry of Public Works, which has twice recommended favorable
action on the petitioner's request for payment. Despite the admitted absence of a specific
covering appropriation as required under COA Resolution No. 36-58, the petitioner may
nevertheless be compensated for the services rendered by it, concededly for the public
benefit, from the general fund allotted by law to the Betis River project. Substantial
compliance with the said resolution, in view of the circumstances of this case, should
suffice. The Court also feels that the remedy suggested by the respondent, to wit, the filing of
a complaint in court for recovery of the compensation claimed, would entail additional
expense, inconvenience and delay which in fairness should be imposed on the petitioner.
"Accordingly, in the interest of substantial justice and equity, the respondent Commission on
Audit is DIRECTED to determine on a quantum meruit basis the total compensation due to the
petitioner for the services rendered by it in the channel improvement of the Betis River in
Pampanga and to allow the payment thereof immediately upon completion of the said
determination." (Emphasis ours)
Similarly, this Court applied the doctrine of quantum meruit in Melchor vs. Commission on
Audit
14
and explained that where payment is based on quantum meruit, the amount of recovery
would only be the reasonable value of the thing or services rendered regardless of any agreement
as to value.
15

123

Notably, the peculiar circumstances present in the instant case buttress petitioners' claim for
compensation for the additional constructions, despite the illegality and void nature of the "implied
contracts" forged between the DPWH and petitioners-contractors. On this matter, it bears stressing
that the illegality of the subject contracts proceeds from an express declaration or prohibition by
law,
16
and not from any intrinsic illegality. Stated differently, the subject contracts are not illegal per
se.
Of equal significance are circumstances attendant and peculiar in this case which necessitate
allowance of petitioners' money claims on the basis of quantum meruit for work accomplished
on the government housing project.
To begin with, petitioners-contractors assented and agreed to undertake additional constructions
for the completion of the housing units, believing in good faith and in the interest of the government
and, in effect, the public in general, that appropriations to cover the additional constructions and
completion of the public works housing project would be available and forthcoming. On this
particular score, the records reveal that the verbal request and assurance of then DPWH
Undersecretary Canlas led petitioners-contractors to undertake thecompletion of the government
housing project, despite the absence of covering appropriations, written contracts, and certification
of availability of funds, as mandated by law and pertinent auditing rules and issuances. To put it
differently, the "implied contracts," declared void in this case, covered only the completion and final
phase of construction of the housing units, which structures, concededly, were already existing,
albeit not yet finished in their entirety at the time the "implied contracts" were entered into between
the government and the contractors.
Further, petitioners-contractors sent to the DPWH Secretary a demand letter pressing for their money
claims, on the strength of a favorable recommendation from the DPWH Assistant Secretary for Legal
Affairs to the effect that implied contracts existed and that the money claims had ample basis
applying the principle of quantum meruit. Moreover, as can be gleaned from the records, even the
DPWH Auditor interposed no objection to the payment of the money claims, subject to whatever
action the COA may adopt.
Beyond this, the sum of P5,819,316.00 representing the amount of petitioners' money claims, had
already been released by the Department of Budget and Management (DBM), under Advise of
Allotment No. A4-1303-04-41-303. Equally important is the glaring fact that the construction of the
housing units had already been completed by petitioners-contractors and the subject housing units
had been, since their completion, under the control and disposition of the government pursuant to
its public works housing project.
To our mind, it would be the apex of injustice and highly inequitable for us to defeat petitioners-
contractors' right to be duly compensated for actual work performed and services rendered, where
both the government and the public have, for years, received and accepted benefits from said
housing project and reaped the fruits of petitioners-contractors' honest toil and labor.
Incidentally, respondent likewise argues that the State may not be sued in the instant case, invoking
the constitutional doctrine of Non-suability of the State,
17
otherwise known as the Royal Prerogative
of Dishonesty.
Respondent's argument is misplaced inasmuch as the Principle of State Immunity finds no
application in the case before us.
Under these circumstances, respondent may not validly invoke the Royal Prerogative of
Dishonesty and conveniently hide under the State's cloak of invincibility against suit, considering that
124

this principle yields to certain settled exceptions. True enough, the rule, in any case, is not absolute
for it does not say that the state may not be sued under any circumstance.
18

Thus, in Amigable vs. Cuenca,
19
this Court, in effect, shred the protective shroud which shields the
State from suit, reiterating our decree in the landmark case of Ministerio vs. CFI of Cebu
20
that "the
doctrine of governmental immunity from suit cannot serve as an instrument for perpetrating an
injustice on a citizen." It is just as important, if not more so, that there be fidelity to legal norms on the
part of officialdom if the rule of law were to be maintained.
21

Although the Amigable and Ministerio cases generously tackled the issue of the State's immunity
from suit vis a visthe payment of just compensation for expropriated property, this Court nonetheless
finds the doctrine enunciated in the aforementioned cases applicable to the instant controversy,
considering that the ends of justice would be subverted if we were to uphold, in this particular
instance, the State's immunity from suit.
To be sure, this Court as the staunch guardian of the citizens' rights and welfare cannot
sanction an injustice so patent on its face, and allow itself to be an instrument in the perpetration
thereof. Justice and equity sternly demand that the State's cloak of invincibility against suit be shred
in this particular instance, and that petitioners-contractors be duly compensated on the basis
of quantum meruit for construction done on the public works housing project.
IN VIEW WHEREOF, the instant petition is GRANTED. The assailed decision of the Regional Trial Court
dated 07 November 1997 is REVERSED AND SET ASIDE.
ACCORDINGLY, the Commission on Audit is hereby directed to determine and ascertain with
dispatch, on aquantum meruit basis, the total compensation due to petitioners-contractors for the
additional constructions on the housing project and to allow payment thereof upon the completion
of said determination. No costs.
SO ORDERED.

125

G.R. No. 115634 April 27, 2000
FELIPE CALUB and RICARDO VALENCIA, DEPARTMENT of ENVIRONMENT and NATURAL RESOURCES
(DENR), CATBALOGAN, SAMAR, petitioners,
vs.
COURT OF APPEALS, MANUELA T. BABALCON, and CONSTANCIO ABUGANDA, respondents.
QUISUMBING, J.:
For review is the decision
1
dated May 27, 1994, of the Court of Appeals in CA-G.R. SP No. 29191,
denying the petition filed by herein petitioners for certiorari, prohibition and mandamus, in order to
annul the Order dated May 27, 1992, by the Regional Trial Court of Catbalogan, Samar. Said Order
had denied petitioners' (a) Motion to Dismiss the replevin case filed by herein private respondents, as
well as (b) petitioners Motion for Reconsideration of the Order of said trial court dated April 24, 1992,
granting an application for a Writ of replevin.
2

The pertinent facts of the case, borne by the records, are as follows:
On January 28, 1992, the Forest Protection and Law Enforcement Team of the Community
Environment and Natural Resources Office (CENRO) of the DENR apprehended two (2) motor
vehicles, described as follows:
1. Motor Vehicle with Plate No. HAK-733 loaded with one thousand and twenty six (1,026)
board feet of illegally sourced lumber valued at P8,544.75, being driven by one Pio Gabon
and owned by [a certain] Jose Vargas.
2. Motor Vehicle with Plate No. FCN-143 loaded with one thousand two hundred twenty four
and ninety seven (1,224.97) board feet of illegally-sourced lumber valued at P9,187.27, being
driven by one Constancio Abuganda and owned by [a certain] Manuela Babalcon. . . .
3

Constancio Abuganda and Pio Gabon, the drivers of the vehicles, failed to present proper
documents and/or licenses. Thus, the apprehending team seized and impounded the vehicles and
its load of lumber at the DENR-PENR (Department of Environment and Natural Resources-Provincial
Environment and Natural Resources) Office in Catbalogan.
4
Seizure receipts were issued but the
drivers refused to accept the receipts.
5
Felipe Calub, Provincial Environment and Natural Resources
Officer, then filed before the Provincial Prosecutor's Office in Samar, a criminal complaint against
Abuganda, in Criminal Case No. 3795, for violation of Section 68 [78], Presidential Decree 705 as
amended by Executive Order 277, otherwise known as the Revised Forestry Code.
6

On January 31, 1992, the impounded vehicles were forcibly taken by Gabon and Abuganda from
the custody of the DENR, prompting DENR Officer Calub this time to file a criminal complaint for
grave coercion against Gabon and Abuganda. The complaint was, however, dismissed by the
Public Prosecutor.
7

On February 11, 1992, one of the two vehicles, with plate number FCN 143, was again apprehended
by a composite team of DENR-CENR in Catbalogan and Philippine Army elements of the 802nd
Infantry Brigade at Barangay Buray, Paranas, Samar. It was again loaded with forest products with
an equivalent volume of 1,005.47 board feet, valued at P10,054.70. Calub duly filed a criminal
complaint against Constancio Abuganda, a certain Abegonia, and several John Does, in Criminal
Case No. 3625, for violation of Section 68 [78], Presidential Decree 705 as amended by Executive
Order 277, otherwise known as the Revised Forestry Code.
8

126

In Criminal Cases Nos. 3795 and 3625, however, Abegonia and Abuganda were acquitted on the
ground of reasonable doubt. But note the trial court ordered that a copy of the decision be
furnished the Secretary of Justice, in order that the necessary criminal action may be filed against
Noe Pagarao and all other persons responsible for violation of the Revised Forestry Code. For it
appeared that it was Pagarao who chartered the subject vehicle and ordered that cut timber be
loaded on it.
9

Subsequently, herein private respondents Manuela Babalcon, the vehicle owner, and Constancio
Abuganda, the driver, filed a complaint for the recovery of possession of the two (2) impounded
vehicles with an application for replevin against herein petitioners before the RTC of Catbalogan.
The trial court granted the application for replevin and issued the corresponding writ in an Order
dated April 24, 1992.
10
Petitioners filed a motion to dismiss which was denied by the trial court.
11

Thus, on June 15, 1992, petitioners filed with the Supreme Court the present Petition for Certiorari,
Prohibition andMandamus with application for Preliminary Injunction and/or a Temporary Restraining
Order. The Court issued a TRO, enjoining respondent RTC judge from conducting further proceedings
in the civil case for replevin; and enjoining private respondents from taking or attempting to take the
motor vehicles and forest products seized from the custody of the petitioners. The Court further
instructed the petitioners to see to it that the motor vehicles and other forest products seized are
kept in a secured place and protected from deterioration, said property being incustodia legis and
subject to the direct order of the Supreme Court.
12
In a Resolution issued on September 28, 1992, the
Court referred said petition to respondent appellate court for appropriate disposition.
13

On May 27, 1994, the Court of Appeals denied said petition for lack of merit. It ruled that the mere
seizure of a motor vehicle pursuant to the authority granted by Section 68 [78] of P.D. No. 705 as
amended by E.O. No. 277 does not automatically place said conveyance in custodia legis.
According to the appellate court, such authority of the Department Head of the DENR or his duly
authorized representative to order the confiscation and disposition of illegally obtained forest
products and the conveyance used for that purpose is not absolute and unqualified. It is subject to
pertinent laws, regulations, or policies on that matter, added the appellate court. The DENR
Administrative Order No. 59, series of 1990, is one such regulation, the appellate court said. For it
prescribes the guidelines in the confiscation, forfeiture and disposition of conveyances used in the
commission of offenses penalized under Section 68 [78] of P.D. No. 705 as amended by E.O. No.
277.
14

Additionally, respondent Court of Appeals noted that the petitioners failed to observe the
procedure outlined in DENR Administrative Order No. 59, series of 1990. They were unable to submit a
report of the seizure to the DENR Secretary, to give a written notice to the owner of the vehicle, and
to render a report of their findings and recommendations to the Secretary. Moreover, petitioners'
failure to comply with the procedure laid down by DENR Administrative Order No. 59, series of 1990,
was confirmed by the admission of petitioners' counsel that no confiscation order has been issued
prior to the seizure of the vehicle and the filing of the replevin suit. Therefore, in failing to follow such
procedure, according to the appellate court, the subject vehicles could not be considered
in custodia legis.
15

Respondent Court of Appeals also found no merit in petitioners' claim that private respondents'
complaint for replevin is a suit against the State. Accordingly, petitioners could not shield themselves
under the principle of state immunity as the property sought to be recovered in the instant suit had
not yet been lawfully adjudged forfeited in favor of the government. Moreover, according to
respondent appellate court, there could be no pecuniary liability nor loss of property that could
ensue against the government. It reasoned that a suit against a public officer who acted illegally or
beyond the scope of his authority could not be considered a suit against the State; and that a
127

public officer might be sued for illegally seizing or withholding the possession of the property of
another.
16

Respondent court brushed aside other grounds raised by petitioners based on the claim that the
subject vehicles were validly seized and held in custody because they were contradicted by its own
findings.
17
Their petition was found without merit.
18

Now, before us, the petitioners assign the following errors:
19

(1) THE COURT OF APPEALS ERRED IN HOLDING THAT MERE SEIZURE OF A CONVEYANCE
PURSUANT TO SECTION 68-A [78-A] OF P.D. NO. 705 AS AMENDED BY EXECUTIVE ORDER 277
DOES NOT PLACE SAID CONVEYANCE IN CUSTODIA LEGIS;
(2) THE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE OPERATIVE ACT GIVING RISE FOR
THE SUBJECT CONVEYANCE TO BE IN CUSTODIA LEGIS IS ITS LAWFUL SEIZURE BY THE DENR
PURSUANT TO SECTION 68-A [78-A] OF P.D. NO. 705, AS AMENDED BY E.O. NO. 277; AND
(3) THE COURT OF APPEALS ERRED IN HOLDING THAT THE COMPLAINT FOR REPLEVIN AGAINST
THE PETITIONERS IS NOT A SUIT AGAINST THE STATE.
In brief, the pertinent issues for our consideration are:
(1) Whether or not the DENR-seized motor vehicle, with plate number FCN 143, is in custodia
legis.
(2) Whether or not the complaint for the recovery of possession of impounded vehicles, with
an application for replevin, is a suit against the State.
We will now resolve both issues.
The Revised Forestry Code authorizes the DENR to seize all conveyances used in the commission of
an offense in violation of Section 78. Section 78 states:
Sec. 78. Cutting, Gathering, and/or Collecting Timber, or Other Forest Products without
License. Any person who shall cut, gather, collect, remove timber or other forest products
from any forestland, or timber from alienable or disposable public land, or from private land,
without any authority, or possess timber or other forest products without the legal documents
as required under existing forest laws and regulations, shall be punished with the penalties
imposed under Articles 309 and 310 of the Revised Penal Code. . .
The Court shall further order the confiscation in favor of the government of the timber or any
forest products cut, gathered, collected, removed, or possessed, as well as the machinery,
equipment, implements and tools illegally used in the area where the timber or forest
products are found.
This provision makes mere possession of timber or other forest products without the accompanying
legal documents unlawful and punishable with the penalties imposed for the crime of theft, as
prescribed in Articles 309-310 of the Revised Penal Code. In the present case, the subject vehicles
were loaded with forest products at the time of the seizure. But admittedly no permit evidencing
authority to possess and transport said load of forest products was duly presented. These products, in
turn, were deemed illegally sourced. Thus there was a prima facie violation of Section 68 [78] of the
Revised Forestry Code, although as found by the trial court, the persons responsible for said violation
were not the ones charged by the public prosecutor.
128

The corresponding authority of the DENR to seize all conveyances used in the commission of an
offense in violation of Section 78 of the Revised Forestry Code is pursuant to Sections 78-A and 89 of
the same Code. They read as follows:
Sec. 78-A. Administrative Authority of the Department Head or His Duly Authorized
Representative to Order Confiscation. In all cases of violation of this Code or other forest
laws, rules and regulations, the Department Head or his duly authorized representative, may
order the confiscation of any forest products illegally cut, gathered, removed, or possessed or
abandoned, and all conveyances used either by land, water or air in the commission of the
offense and to dispose of the same in accordance with pertinent laws, regulations or policies
on the matter.
Sec. 89. Arrest; Institution of criminal actions. A forest officer or employee of the Bureau
[Department] or any personnel of the Philippine Constabulary/Philippine National Police shall
arrest even without warrant any person who has committed or is committing in his presence
any of the offenses defined in this Chapter. He shall also seize and confiscate, in favor of the
Government, the tools and equipment used in committing the offense. . . [Emphasis
supplied.]
Note that DENR Administrative Order No. 59, series of 1990, implements Sections 78-A and 89 of the
Forestry Code, as follows:
Sec. 2. Conveyances Subject to Confiscation and Forfeiture. All conveyances used in the
transport of any forest product obtained or gathered illegally whether or not covered with
transport documents, found spurious or irregular in accordance with Sec. 68-A [78-A] of P.D.
No. 705, shall be confiscated in favor of the government or disposed of in accordance with
pertinent laws, regulations or policies on the matter.
Sec. 4. Who are Authorized to Seize Conveyance. The Secretary or his duly authorized
representative such as the forest officers and/or natural resources officers, or deputized
officers of the DENR areauthorized to seize said conveyances subject to policies and
guidelines pertinent thereto. Deputized military personnel and officials of other agencies
apprehending illegal logs and other forest products and their conveyances shall notify the
nearest DENR field offices, and turn oversaid forest products and conveyances for proper
action and disposition. In case where the apprehension is made by DENR field officer, the
conveyance shall be deposited with the nearest CENRO/PENRO/RED Office as the case may
be, for safekeeping wherever it is most convenient and secured. [Emphasis supplied.]
Upon apprehension of the illegally-cut timber while being transported without pertinent documents
that could evidence title to or right to possession of said timber, a warrantless seizure of the involved
vehicles and their load was allowed under Section 78 and 89 of the Revised Forestry Code.
Note further that petitioners' failure to observe the procedure outlined in DENR Administrative Order
No. 59, series of 1990 was justifiably explained. Petitioners did not submit a report of the seizure to the
Secretary nor give a written notice to the owner of the vehicle because on the 3rd day following the
seizure, Gabon and Abuganda, drivers of the seized vehicles, forcibly took the impounded vehicles
from the custody of the DENR. Then again, when one of the motor vehicles was apprehended and
impounded for the second time, the petitioners, again were not able to report the seizure to the
DENR Secretary nor give a written notice to the owner of the vehicle because private respondents
immediately went to court and applied for a writ of replevin. The seizure of the vehicles and their
load was done upon their apprehension for a violation of the Revised Forestry Code. It would be
absurd to require a confiscation order or notice and hearing before said seizure could be effected
under the circumstances.
129

Since there was a violation of the Revised Forestry Code and the seizure was in accordance with
law, in our view the subject vehicles were validly deemed in custodia legis. It could not be subject to
an action for replevin. For it is property lawfully taken by virtue of legal process and considered in
the custody of the law, and not otherwise.
20

In Mamanteo, et. al. v. Deputy Sheriff Magumun, A.M. No. P-98-1264, promulgated on July 28, 1999,
the case involves property to be seized by a Deputy Sheriff in a replevin suit. But said property were
already impounded by the DENR due to violation of forestry laws and, in fact, already forfeited in
favor of the government by order of the DENR. We said that such property was deemed in custodia
legis. The sheriff could not insist on seizing the property already subject of a prior warrant of seizure.
The appropriate action should be for the sheriff to inform the trial court of the situation by way of
partial Sheriff's Return, and wait for the judge's instructions on the proper procedure to be observed.
Note that property that is validly deposited in custodia legis cannot be the subject of a replevin suit.
In Mamanteo v. Deputy Sheriff Magumun, we elucidated further:
. . . the writ of replevin has been repeatedly used by unscrupulous plaintiffs to retrieve their
chattel earlier taken for violation of the Tariff and Customs Code, tax assessment, attachment
or execution. Officers of the court, from the presiding judge to the sheriff, are implored to be
vigilant in their execution of the law otherwise, as in this case, valid seizure and forfeiture
proceedings could easily be undermined by the simple devise of a writ of replevin. . .
21

On the second issue, is the complaint for the recovery of possession of the two impounded vehicles,
with an application for replevin, a suit against the State?
Well established is the doctrine that the State may not be sued without its consent.
22
And a suit
against a public officer for his official acts is, in effect, a suit against the State if its purpose is to hold
the State ultimately liable.
23
However, the protection afforded to public officers by this doctrine
generally applies only to activities within the scope of their authority in good faith and without
willfulness, malice or corruption.
24
In the present case, the acts for which the petitioners are being
called to account were performed by them in the discharge of their official duties. The acts in
question are clearly official in nature.
25
In implementing and enforcing Sections 78-A and 89 of the
Forestry Code through the seizure carried out, petitioners were performing their duties and functions
as officers of the DENR, and did so within the limits of their authority. There was no malice nor bad
faith on their part. Hence, a suit against the petitioners who represent the DENR is a suit against the
State. It cannot prosper without the State's consent.
Given the circumstances in this case, we need not pursue the Office of the Solicitor General's line for
the defense of petitioners concerning exhaustion of administrative remedies. We ought only to recall
that exhaustion must be raised at the earliest time possible, even before filing the answer to the
complaint or pleading asserting a claim, by a motion to dismiss.
26
If not invoked at the proper time,
this ground for dismissal could be deemed waived and the court could take cognizance of the case
and try it.
27

ACCORDINGLY, the Petition is GRANTED, and the assailed Decision of the Court of Appeals in CA-
G.R. SP No. 29191 is SET ASIDE.1wphi1 Consequently, the Order issued by the Regional Trial Court of
Catbalogan, dated May 27, 1992, and the Writ of replevin issued in the Order dated April 24, 1992,
are ANNULLED. The Sheriff of the Regional Trial Court of Catbalogan, Branch 29, is directed to take
possession of the subject motor vehicle, with plate number FCN 143, for delivery to the custody of
and appropriate disposition by petitioners. Let a copy of this decision be provided the Honorable
Secretary of Justice for his appropriate action, against any and all persons responsible for the
abovecited violation of the Revised Forestry Code.Costs against private respondents.SO ORDERED.
130

[G.R. No. 154411. June 19, 2003]
NATIONAL HOUSING AUTHORITY, petitioner, vs. HEIRS OF ISIDRO GUIVELONDO, COURT OF APPEALS,
HON. ISAIAS DICDICAN, Presiding Judge, Regional Trial Court, Branch 11, Cebu City, and
PASCUAL Y. ABORDO, Sheriff, Regional Trial Court, Branch 11, Cebu City, respondents.
D E C I S I O N
YNARES-SANTIAGO, J.:
On February 23, 1999, petitioner National Housing Authority filed with the Regional Trial Court of
Cebu City, Branch 11, an Amended Complaint for eminent domain against Associacion Benevola
de Cebu, Engracia Urot and the Heirs of Isidro Guivelondo, docketed as Civil Case No. CEB-
23386. Petitioner alleged that defendant Associacion Benevola de Cebu was the claimant/owner
of Lot 108-C located in the Banilad Estate, Cebu City; that defendant Engracia Urot was the
claimant/owner of Lots Nos. 108-F, 108-I, 108-G, 6019-A and 6013-A, all of the Banilad Estate; that
defendant Heirs of Isidro Guivelondo were the claimants/owners of Cadastral Lot No. 1613-D
located at Carreta, Mabolo, Cebu City; and that the lands are within a blighted urban center which
petitioner intends to develop as a socialized housing project.
[1]

On November 12, 1999, the Heirs of Isidro Guivelondo, respondents herein, filed a Manifestation
stating that they were waiving their objections to petitioners power to expropriate their
properties. Hence, the trial court issued an Order as follows:
WHEREFORE, the Court hereby declares that the plaintiff has a lawful right to expropriate the
properties of the defendants who are heirs of Isidro Guivelondo.
The appointment of commissioners who would ascertain and report to the Court the just
compensation for said properties will be done as soon as the parties shall have submitted to the
Court the names of persons desired by them to be appointed as such commissioners.
SO ORDERED.
[2]

Thereafter, the trial court appointed three Commissioners to ascertain the correct and just
compensation of the properties of respondents. On April 17, 2000, the Commissioners submitted
their report wherein they recommended that the just compensation of the subject properties be
fixed at P11,200.00 per square meter.
[3]
On August 7, 2000, the trial court rendered Partial Judgment
adopting the recommendation of the Commissioners and fixing the just compensation of the lands
of respondent Heirs of Isidro Guivelondo at P11,200.00 per square meter, to wit:
WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by the Court in this
case fixing the just compensation for the lands of the defendants who are the heirs of Isidro
Guivelondo, more particularly Lots Nos. 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 15, 16, 19, 20, 6016-F, 6016-
H, 6016-E and 6016-D of Csd-10219, which were sought to be expropriated by the plaintiff at
P11,200.00 per square meter and ordering the plaintiff to pay to the said defendants the just
compensation for the said lands computed at P11,200.00 per square meter.
IT IS SO ORDERED.
[4]

Petitioner NHA filed two motions for reconsideration dated August 30, 2000 and August 31, 2000,
assailing the inclusion of Lots 12, 13 and 19 as well as the amount of just compensation,
respectively. Respondent Heirs also filed a motion for reconsideration of the Partial Judgment. On
October 11, 2000, the trial court issued an Omnibus Order denying the motion for reconsideration of
respondent Heirs and the August 31, 2000 motion of petitioner, on the ground that the fixing of the
just compensation had adequate basis and support. On the other hand, the trial court granted
131

petitioners August 30, 2000 motion for reconsideration on the ground that the Commissioners
Report did not include Lots 12, 13 and 19 within its coverage. Thus:
WHEREFORE, in view of the foregoing premises, the Court hereby denies the motion of the heirs of
Isidro Guivelondo (with the exception of Carlota Mercado and Juanita Suemith) for reconsideration
of the partial judgment rendered in this case on August 7, 2000 and plaintiffs motion for
reconsideration of said judgment, dated August 31, 2000.
However, the Court hereby grants the plaintiffs motion for reconsideration of said judgment, dated
August 30, 2000. Accordingly, the judgment rendered in this case on August 7, 2000 is hereby set
aside insofar as it has fixed just compensations for Lots Nos. 12, 13 and 19 of Csd-10219 because the
fixing of said just compensations appears to lack adequate basis.
SO ORDERED.
[5]

Petitioner filed with the Court of Appeals a petition for certiorari, which was docketed as CA-
G.R. SP No. 61746.
[6]
Meanwhile, on October 31, 2000, the trial court issued an Entry of Judgment
over the Partial Judgment dated August 7, 2000 as modified by the Omnibus Order dated October
11, 2000.
[7]
Subsequently, respondent Heirs filed a Motion for Execution, which was granted on
November 22, 2000.
On January 31, 2001, the Court of Appeals dismissed the petition for certiorari on the ground that
the Partial Judgment and Omnibus Order became final and executory when petitioner failed to
appeal the same.
[8]

Petitioners Motion for Reconsideration and Urgent Ex-Parte Motion for a Clarificatory Ruling
were denied in a Resolution dated March 18, 2001.
[9]
A petition for review was filed by petitioner with
this Court, which was docketed as G.R. No. 147527. However, the same was denied in a Minute
Resolution dated May 9, 2001 for failure to show that the Court of Appeals committed a reversible
error.
[10]

Petitioner filed a Motion for Reconsideration which was however denied with finality on August
20, 2001.
[11]

Prior to the aforesaid denial of the Motion for Reconsideration, petitioner, on July 16, 2001, filed
with the trial court a Motion to Dismiss Civil Case No. CEB-23386, complaint for eminent domain,
alleging that the implementation of its socialized housing project was rendered impossible by the
unconscionable value of the land sought to be expropriated, which the intended beneficiaries can
not afford.
[12]
The Motion was denied on September 17, 2001, on the ground that the Partial
Judgment had already become final and executory and there was no just and equitable reason to
warrant the dismissal of the case.
[13]
Petitioner filed a Motion for Reconsideration, which was denied
in an Order dated November 20, 2001.
[14]

Petitioner thus filed a petition for certiorari with the Court of Appeals, which was docketed as
CA-G.R. SP No. 68670, praying for the annulment of the Order of the trial court denying its Motion to
Dismiss and its Motion for Reconsideration.
[15]

On February 5, 2002, the Court of Appeals summarily dismissed the petition. Immediately
thereafter, respondent Sheriff Pascual Y. Abordo of the Regional Trial Court of Cebu City, Branch 11,
served on petitioner a Notice of Levy pursuant to the Writ of Execution issued by the trial court to
enforce the Partial Judgment of August 7, 2000 and the Omnibus Order of October 11, 2000.
[16]

On February 18, 2002, the Court of Appeals set aside the dismissal of the petition and reinstated
the same.
[17]
Thereafter, a temporary restraining order was issued enjoining respondent sheriff to
preserve the status quo.
[18]

132

On May 27, 2002, respondent sheriff served on the Landbank of the Philippines a Notice of Third
Garnishment against the deposits, moneys and interests of petitioner therein.
[19]
Subsequently,
respondent sheriff levied on funds and personal properties of petitioner.
[20]

On July 16, 2002, the Court of Appeals rendered the assailed decision dismissing the petition for
certiorari.
[21]

Hence, petitioner filed this petition for review, raising the following issues:
1) WHETHER OR NOT THE STATE CAN BE COMPELLED AND COERCED BY THE COURTS TO
EXERCISE OR CONTINUE WITH THE EXERCISE OF ITS INHERENT POWER OF EMINENT
DOMAIN;
2) WHETHER OR NOT JUDGMENT HAS BECOME FINAL AND EXECUTORY AND IF ESTOPPEL
OR LACHES APPLIES TO GOVERNMENT;
3) WHETHER OR NOT WRITS OF EXECUTION AND GARNISHMENT MAY BE ISSUED AGAINST
THE STATE IN AN EXPROPRIATION WHEREIN THE EXERCISE OF THE POWER OF EMINENT
DOMAIN WILL NOT SERVE PUBLIC USE OR PURPOSE {APPLICATION OF SUPREME COURT
ADMINISTRATIVE CIRCULAR NO. 10-2000}.
[22]

Respondent Heirs of Isidro Guivelondo filed their Comment, arguing as follows:
I
AS EARLIER UPHELD BY THE HONORABLE COURT, THE JUDGMENT OF THE TRIAL COURT IS ALREADY
FINAL AND EXECUTORY, HENCE, COULD NO LONGER BE DISTURBED NOR SET ASIDE
II
THE FUNDS AND ASSETS OF THE PETITIONER ARE NOT EXEMPT FROM LEVY AND GARNISHMENT
III
THE ISSUES RAISED IN THIS SECOND PETITION FOR REVIEW WERE ALREADY RESOLVED BY THE
HONORABLE COURT
[23]

In the early case of City of Manila v. Ruymann,
[24]
the Court was confronted with the question:
May the petitioner, in an action for expropriation, after he has been placed in possession of the
property and before the termination of the action, dismiss the petition? It resolved the issue in the
affirmative and held:
The right of the plaintiff to dismiss an action with the consent of the court is universally recognized
with certain well-defined exceptions. If the plaintiff discovers that the action which he commenced
was brought for the purpose of enforcing a right or a benefit, the advisability or necessity of which
he later discovers no longer exists, or that the result of the action would be different from what he
had intended, then he should be permitted to withdraw his action, subject to the approval of the
court. The plaintiff should not be required to continue the action, subject to some well-defined
exceptions, when it is not to his advantage to do so. Litigation should be discouraged and not
encouraged. Courts should not require parties to litigate when they no longer desire to do
so. Courts, in granting permission to dismiss an action, of course, should always take into
consideration the effect which said dismissal would have upon the rights of the defendant.
[25]

133

Subsequently, in Metropolitan Water District v. De Los Angeles,
[26]
the Court had occasion to
apply the above-quoted ruling when the petitioner, during the pendency of the expropriation case,
resolved that the land sought to be condemned was no longer necessary in the maintenance and
operation of its system of waterworks. It was held:
It is not denied that the purpose of the plaintiff was to acquire the land in question for a public
use. The fundamental basis then of all actions brought for the expropriation of lands, under the
power of eminent domain, is public use. That being true, the very moment that it appears at any
stage of the proceedings that the expropriation is not for a public use, the action must necessarily
fail and should be dismissed, for the reason that the action cannot be maintained at all except
when the expropriation is for some public use. That must be true even during the pendency of the
appeal of at any other stage of the proceedings. If, for example, during the trial in the lower court, it
should be made to appear to the satisfaction of the court that the expropriation is not for some
public use, it would be the duty and the obligation of the trial court to dismiss the action. And even
during the pendency of the appeal, if it should be made to appear to the satisfaction of the
appellate court that the expropriation is not for public use, then it would become the duty and the
obligation of the appellate court to dismiss it.
[27]

Notably, the foregoing cases refer to the dismissal of an action for eminent domain at the
instance of the plaintiff during the pendency of the case. The rule is different where the case had
been decided and the judgment had already become final and executory.
Expropriation proceedings consists of two stages: first, condemnation of the property after it is
determined that its acquisition will be for a public purpose or public use and, second, the
determination of just compensation to be paid for the taking of private property to be made by the
court with the assistance of not more than three commissioners.
[28]
Thus:
There are two (2) stages in every action for expropriation. The first is concerned with the
determination of the authority of the plaintiff to exercise the power of eminent domain and the
propriety of its exercise in the context of the facts involved in the suit. It ends with an order, if not of
dismissal of the action, of condemnation declaring that the plaintiff has a lawful right to take the
property sought to be condemned, for the public use or purpose described in the complaint, upon
the payment of just compensation to be determined as of the date of the filing of the
complaint. An order of dismissal, if this be ordained, would be a final one, of course, since it finally
disposes of the action and leaves nothing more to be done by the Court on the merits. So, too,
would an order of condemnation be a final one, for thereafter, as the Rules expressly state, in the
proceedings before the Trial Court, no objection to the exercise of the right of condemnation (or
the propriety thereof) shall be filed or heard.
The second phase of the eminent domain action is concerned with the determination by the Court
of the just compensation for the property sought to be taken. This is done by the Court with the
assistance of not more than three (3) commissioners. The order fixing the just compensation on the
basis of the evidence before, and findings of, the commissioners would be final, too. It would finally
dispose of the second stage of the suit, and leave nothing more to be done by the Court regarding
the issue. Obviously, one or another of the parties may believe the order to be erroneous in its
appreciation of the evidence or findings of fact or otherwise. Obviously, too, such a dissatisfied
party may seek a reversal of the order by taking an appeal therefrom.
[29]

The outcome of the first phase of expropriation proceedings, which is either an order of
expropriation or an order of dismissal, is final since it finally disposes of the case. On the other hand,
the second phase ends with an order fixing the amount of just compensation. Both orders, being
final, are appealable.
[30]
An order of condemnation or dismissal is final, resolving the question of
whether or not the plaintiff has properly and legally exercised its power of eminent domain.
[31]
Once
134

the first order becomes final and no appeal thereto is taken, the authority to expropriate and its
public use can no longer be questioned.
[32]

The above rule is based on Rule 67, Section 4 of the 1997 Rules of Civil Procedure, which
provides:
Order of expropriation. If the objections to and the defenses against the right of the plaintiff to
expropriate the property are overruled, or when no party appears to defend as required by this Rule,
the court may issue an order of expropriation declaring that the plaintiff has a lawful right to take the
property sought to be expropriated, for the public use or purpose described in the complaint, upon
the payment of just compensation to be determined as of the date of the taking of the property or
the filing of the complaint, whichever came first.
A final order sustaining the right to expropriate the property may be appealed by any party
aggrieved thereby. Such appeal, however, shall not prevent the court from determining the just
compensation to be paid.
After the rendition of such an order, the plaintiff shall not be permitted to dismiss or discontinue the
proceeding except on such terms as the court deems just and equitable. (underscoring ours)
In the case at bar, petitioner did not appeal the Order of the trial court dated December 10,
1999, which declared that it has a lawful right to expropriate the properties of respondent Heirs of
Isidro Guivelondo. Hence, the Order became final and may no longer be subject to review or
reversal in any court.
[33]
A final and executory decision or order can no longer be disturbed or
reopened no matter how erroneous it may be. Although judicial determinations are not infallible,
judicial error should be corrected through appeals, not through repeated suits on the same claim.
[34]

Petitioner anchors its arguments on the last paragraph of the above-quoted Rule 67, Section
4. In essence, it contends that there are just and equitable grounds to allow dismissal or
discontinuance of the expropriation proceedings. More specifically, petitioner alleges that the
intended public use was rendered nugatory by the unreasonable just compensation fixed by the
court, which is beyond the means of the intended beneficiaries of the socialized housing
project. The argument is tenuous.
Socialized housing has been recognized as public use for purposes of exercising the power of
eminent domain.
Housing is a basic human need. Shortage in housing is a matter of state concern since it directly
and significantly affects public health, safety, the environment and in sum, the general welfare. The
public character of housing measures does not change because units in housing projects cannot be
occupied by all but only by those who satisfy prescribed qualifications. A beginning has to be
made, for it is not possible to provide housing for all who need it, all at once.
xxx xxx x
xx.
In the light of the foregoing, this Court is satisfied that socialized housing falls with the confines of
public use. xxx xxx xxx. Provisions on economic opportunities inextricably linked with low-cost
housing, or slum clearance, relocation and resettlement, or slum improvement emphasize the public
purpose of the project.
[35]

The public purpose of the socialized housing project is not in any way diminished by the amount
of just compensation that the court has fixed. The need to provide decent housing to the urban
poor dwellers in the locality was not lost by the mere fact that the land cost more than petitioner
135

had expected. It is worthy to note that petitioner pursued its petition for certiorari with the Court of
Appeals assailing the amount of just compensation and its petition for review with this Court which
eloquently indicates that there still exists a public use for the housing project. It was only after its
appeal and petitions for review were dismissed that petitioner made a complete turn-around and
decided it did not want the property anymore.
Respondent landowners had already been prejudiced by the expropriation case. Petitioner
cannot be permitted to institute condemnation proceedings against respondents only to abandon
it later when it finds the amount of just compensation unacceptable. Indeed, our reprobation in the
case of Cosculluela v. Court of Appeals
[36]
is apropos:
It is arbitrary and capricious for a government agency to initiate expropriation proceedings, seize a
persons property, allow the judgment of the court to become final and executory and then refuse
to pay on the ground that there are no appropriations for the property earlier taken and profitably
used. We condemn in the strongest possible terms the cavalier attitude of government officials who
adopt such a despotic and irresponsible stance.
In order to resolve the issue of the propriety of the garnishment against petitioners funds and
personal properties, there is a need to first determine its true character as a government
entity. Generally, funds and properties of the government cannot be the object of garnishment
proceedings even if the consent to be sued had been previously granted and the state liability
adjudged.
[37]

The universal rule that where the State gives its consent to be sued by private parties either by
general or special law, it may limit claimants action only up to the completion of proceedings
anterior to the stage of execution and that the power of the Courts ends when the judgment is
rendered, since government funds and properties may not be seized under writs of execution or
garnishment to satisfy such judgments, is based on obvious considerations of public
policy. Disbursements of public funds must be covered by the corresponding appropriation as
required by law. The functions and public services rendered by the State cannot be allowed to be
paralyzed or disrupted by the diversion of public funds from their legitimate and specific objects, as
appropriated by law.
[38]

However, if the funds belong to a public corporation or a government-owned or controlled
corporation which is clothed with a personality of its own, separate and distinct from that of the
government, then its funds are not exempt from garnishment.
[39]
This is so because when the
government enters into commercial business, it abandons its sovereign capacity and is to be
treated like any other corporation.
[40]

In the case of petitioner NHA, the matter of whether its funds and properties are exempt from
garnishment has already been resolved squarely against its predecessor, the Peoples Homesite and
Housing Corporation (PHHC), to wit:
The plea for setting aside the notice of garnishment was premised on the funds of the Peoples
Homesite and Housing Corporation deposited with petitioner being public in character. There was
not even a categorical assertion to that effect. It is only the possibility of its being public in
character. The tone was thus irresolute, the approach diffident. The premise that the funds cold
be spoken of as public in character may be accepted in the sense that the Peoples Homesite and
Housing Corporation was a government-owned entity. It does not follow though that they were
exempt from garnishment.
[41]

This was reiterated in the subsequent case of Philippine Rock Industries, Inc. v. Board of
Liquidators:
[42]

136

Having a juridical personality separate and distinct from the government, the funds of such
government-owned and controlled corporations and non-corporate agency, although considered
public in character, are not exempt from garnishment. This doctrine was applied to suits filed
against the Philippine Virginia Tobacco Administration (PNB vs. Pabalan, et al., 83 SCRA 695); the
National Shipyard & Steel Corporation (NASSCO vs. CIR, 118 Phil. 782); the Manila Hotel Company
(Manila Hotel Employees Asso. vs. Manila Hotel Co., 73 Phil. 374); and the People's Homesite and
Housing Corporation (PNB vs. CIR, 81 SCRA 314). [emphasis ours]
Hence, it is clear that the funds of petitioner NHA are not exempt from garnishment or
execution. Petitioners prayer for injunctive relief to restrain respondent Sheriff Pascual Abordo from
enforcing the Notice of Levy and Garnishment against its funds and properties must, therefore, be
denied.
WHEREFORE, in view of the foregoing, the instant petition for review is DENIED. The decision of
the Court of Appeals in CA-G.R. SP No. 68670, affirming the trial courts Order denying petitioners
Motion to Dismiss the expropriation proceedings in Civil Case No. CEB-23386, is
AFFIRMED. Petitioners prayer for injunctive relief against the levy and garnishment of its funds and
personal properties is DENIED. The Temporary Restraining Order dated January 22, 2003 is LIFTED.
SO ORDERED.

137

G.R. No. 107271 September 10, 2003
CITY OF CALOOCAN and NORMA M. ABRACIA, petitioners,
vs.
HON. MAURO T. ALLARDE, Presiding Judge of Branch 123, RTC of Caloocan City, ALBERTO A.
CASTILLO, Deputy Sheriff of Branch 123, RTC of Caloocan City, and DELFINA HERNANDEZ SANTIAGO
and PHILIPPINE NATIONAL BANK (PNB), respondents.
CORONA, J.:
Assailed in this petition for certiorari is the decision
1
dated August 31, 1992, of the Court of Appeals in
CA G.R. SP No. 27423, ordering the Regional Trial Court of Caloocan City, Branch 123, to implement
an alias writ of execution dated January 16, 1992. The dispositive portion read as follows:
WHEREFORE the petition is hereby granted ordering the Regional Trial Court of Kaloocan City,
Branch 123, to immediately effect the alias writ of execution dated January 16, 1992 without
further delay.
Counsel for the respondents are warned that a repetition of their contemptuous act to delay
the execution of a final and executory judgment will be dealt with more severely.
SO ORDERED.
2

It is important to state at the outset that the dispute between petitioner and private respondent has
been litigated thrice before this Court: first, in G.R. No. L-39288-89, entitled Heirs of Abelardo
Palomique, et al. vs. Marcial Samson, et al., decided on January 31, 1985; second, in G.R. No. 98366,
entitled City Government of Caloocan vs. Court of Appeals, et al., resolved on May 16, 1991, and
third, in G.R. No. 102625, entitled Santiago vs. Sto. Tomas, et al., decided on August 1, 1995. This is not
to mention the numerous concurrent efforts by the City Government of Caloocan to seek relief from
other judicial and quasi-judicial bodies. The present petition for certiorari is the fourth time we are
called upon to resolve the dispute.
The factual and procedural antecedents follow.
Sometime in 1972, Marcial Samson, City Mayor of Caloocan City, through Ordinance No. 1749,
abolished the position of Assistant City Administrator and 17 other positions from the plantilla of the
local government of Caloocan. Then Assistant City Administrator Delfina Hernandez Santiago and
the 17 affected employees of the City Government assailed the legality of the abolition before the
then Court of First Instance (CFI) of Caloocan City, Branch 33.
In 1973, the CFI declared the abolition illegal and ordered the reinstatement of all the dismissed
employees and the payment of their back salaries and other emoluments. The City Government of
Caloocan appealed to the Court of Appeals. Respondent Santiago and her co-parties moved for
the dismissal of the appeal for being dilatory and frivolous but the appellate court denied their
motion. Thus, they elevated the case on certiorari before this Court, docketed as G.R. No. L-39288-
89, Heirs of Abelardo Palomique, et al. vs. Marcial Samson, et al. In our Resolution dated January 31,
1985, we held that the appellate court "erred in not dismissing the appeal," and "that the appeal of
the City Government of Caloocan was frivolous and dilatory." In due time, the resolution lapsed into
finality and entry of judgment was made on February 27, 1985.
In 1986, the City Government of Caloocan paid respondent Santiago P75,083.37 in partial payment
of her backwages, thereby leaving a balance of P530,761.91. Her co-parties were paid in full.
3
In
1987, the City of Caloocan appropriated funds for her unpaid back salaries. This was included in
138

Supplemental Budget No. 3 for the fiscal year 1987. Surprisingly, however, the City later refused to
release the money to respondent Santiago.
Respondent Santiago exerted effort for the execution of the remainder of the money judgment but
she met stiff opposition from the City Government of Caloocan. On February 12, 1991, Judge Mauro
T. Allarde, RTC of Caloocan City, Branch 123, issued a writ of execution for the payment of the
remainder of respondent Santiagos back salaries and other emoluments.
4

For the second time, the City Government of Caloocan went up to the Court of Appeals and filed a
petition for certiorari, prohibition and injunction to stop the trial court from enforcing the writ of
execution. The CA dismissed the petition and affirmed the order of issuance of the writ of
execution.
5
One of the issues raised and resolved therein was the extent to which back salaries and
emoluments were due to respondent Santiago. The appellate court held that she was entitled to her
salaries from October, 1983 to December, 1986.
And for the second time, the City Government of Caloocan appealed to this Court in G.R. No.
98366, City Government of Caloocan vs. Court of Appeals, et al. The petition was dismissed, through
our Resolution of May 16, 1991, for having been filed late and for failure to show any reversible error
on the part of the Court of Appeals. The resolution subsequently attained finality and the
corresponding entry of judgment was made on July 29, 1991.
On motion of private respondent Santiago, Judge Mauro T. Allarde ordered the issuance of an alias
writ of execution on March 3, 1992. The City Government of Caloocan moved to reconsider the
order, insisting in the main that respondent Santiago was not entitled to backwages from 1983 to
1986. The court a quo denied the motion and forthwith issued the alias writ of execution. Unfazed,
the City Government of Caloocan filed a motion to quash the writ, maintaining that the money
judgment sought to be enforced should not have included salaries and allowances for the years
1983-1986. The trial court likewise denied the motion.
On July 27, 1992, Sheriff Alberto A. Castillo levied and sold at public auction one of the motor
vehicles of the City Government of Caloocan, with plate no. SBH-165, for P100,000. The proceeds of
the sale were turned over to respondent Santiago in partial satisfaction of her claim, thereby leaving
a balance of P439,377.14, inclusive of interest. Petitioners filed a motion questioning the validity of
the auction sale of the vehicle with plate no. SBH-165, and a supplemental motion maintaining that
the properties of the municipality were exempt from execution. In his Order dated October 1, 1992,
Judge Allarde denied both motions and directed the sheriff to levy and schedule at public auction
three more vehicles of the City of Caloocan -
6<
/p>
ONE (1) Unit Motor Vehicle (Hunter Station Wagon); Motor No. C-240-199629; Chassis No. MBB-
910369C;
ONE (1) Unit Motor Vehicle (Hunter Series 11-Diesel); Engine No. 4FB1-174328, Chassis No. MBB-
910345C; Plate No. SDL-653;
ONE (1) Unit Motor Vehicle (Hunter Series 11-Diesel); Engine No. 4FB-165196; Chassis No. MBB
910349C.
All the vehicles, including that previously sold in the auction sale, were owned by the City and
assigned for the use of herein petitioner Norma Abracia, Division Superintendent of Caloocan City,
and other officials of the Division of City Schools.
Meanwhile, the City Government of Caloocan sought clarification from the Civil Service Commission
(CSC) on whether respondent Santiago was considered to have rendered services from 1983-1986
139

as to be entitled to backwages for that period. In its Resolution No. 91-1124, the CSC ruled in the
negative.
On November 22, 1991, private respondent Santiago challenged the CSC resolution before this
Court in G.R. No. 102625, Santiago vs. Sto. Tomas, et al. On July 8, 1993, we initially dismissed the
petition for lack of merit; however, we reconsidered the dismissal of the petition in our Resolution
dated August 1, 1995, this time ruling in favor of respondent Santiago:
The issue of petitioner Santiagos right to back salaries for the period from October 1983 to
December 1986 having been resolved in G.R. No. 98366 on 16 May 1991, CSC Resolution No.
91-1124 promulgated later on 24 September 1991 in particular, its ruling on the extent of
backwages due petitioner Santiago was in fact moot and academic at the time of its
promulgation. CSC Resolution No. 91-1124 could not, of course, set aside what had been
judicially decided with finality x x x x the court considers that resort by the City Government of
Caloocan to respondent CSC was but another attempt to deprive petitioner Santiago of her
claim to back salaries x x x and a continuation of the Citys abuse and misuse of the rules of
judicial procedure. The Citys acts have resulted in wasting the precious time and resources of
the courts and respondent CSC. (Underscoring supplied).
On October 5, 1992, the City Council of Caloocan passed Ordinance No. 0134, Series of 1992, which
included the amount of P439,377.14 claimed by respondent Santiago as back salaries, plus
interest.
7
Pursuant to the subject ordinance, Judge Allarde issued an order dated November 10,
1992, decreeing that:
WHEREFORE, the City Treasurer (of Caloocan), Norberto Azarcon is hereby ordered to deliver
to this Court within five (5) days from receipt hereof, (a) managers check covering the
amount of P439,378.00 representing the back salaries of petitioner Delfina H. Santiago in
accordance with Ordinance No. 0134 S. 1992 and pursuant to the final and executory
decision in these cases.
Then Caloocan Mayor Macario A. Asistio, Jr., however, refused to sign the check intended as
payment for respondent Santiagos claims. This, despite the fact that he was one of the
signatories of the ordinance authorizing such payment. On April 29, 1993, Judge Allarde
issued another order directing the Acting City Mayor of Caloocan, Reynaldo O. Malonzo, to
sign the check which had been pending before the Office of the Mayor since December 11,
1992. Acting City Mayor Malonzo informed the trial court that "he could not comply with the
order since the subject check was not formally turned over to him by the City Mayor" who
went on official leave of absence on April 15, 1993, and that "he doubted whether he had
authority to sign the same."
8

Thus, in an order dated May 7, 1993, Judge Allarde ordered Sheriff Alberto A. Castillo to immediately
garnish the funds of the City Government of Caloocan corresponding to the claim of respondent
Santiago.
9
On the same day, Sheriff Alberto A. Castillo served a copy of the Notice of Garnishment
on the Philippine National Bank (PNB), Sangandaan Branch, Caloocan City. When PNB immediately
notified the City of Caloocan of the Notice of Garnishment, the City Treasurer sent a letter-advice
informing PNB that the order of garnishment was "illegal," with a warning that it would hold PNB liable
for any damages which may be caused by the withholding of the funds of the city. PNB opted to
comply with the order of Judge Allarde and released to the Sheriff a managers check amounting
to P439,378. After 21 long years, the claim of private respondent Santiago was finally settled in full.
On June 4, 1993, however, while the instant petition was pending, the City Government of Caloocan
filed yet another motion with this Court, a Motion to Declare in Contempt of Court; to Set Aside the
Garnishment and Administrative Complaint against Judge Allarde, respondent Santiago and PNB.
140

Subsequently, the City Government of Caloocan filed a Supplemental Petition formally impleading
PNB as a party-respondent in this case.
The instant petition for certiorari is directed this time against the validity of the garnishment of the
funds of the City of Caloocan, as well as the validity of the levy and sale of the motor vehicles
belonging to the City of Caloocan. More specifically, petitioners insist that Judge Allarde gravely
abused his discretion in:
(a) ordering the garnishment of the funds of the City of Caloocan deposited with the PNB,
since it is settled that public funds are beyond the reach of garnishment and even with the
appropriation passed by the City Council, the authority of the Mayor is still needed for the
release of the appropriation;
(b) ordering the levy and sale at public auction of three (3) motor vehicles owned by the City
of Caloocan, which vehicles are necessary for public use and cannot be attached nor sold in
an execution sale to satisfy a money judgment against the City of Caloocan;
(c) peremptorily denying petitioner City of Caloocans urgent motions to vacate and set
aside the auction sale of the motor vehicle with PLATE NO. SBH-165, notwithstanding that the
auction sale by the Sheriff was tainted with serious irregularities, more particularly:
i. non-compliance with the mandatory posting of the notice of sale;
ii. non-observance of the procedure that a sale through public auction has to be
made and consummated at the time of the auction, at the designated place and
upon actual payment of the purchase price by the winning bidder;
iii. violation of Sec. 21, Rule 39 of the Rules of Court to the effect that sale of personal
property capable of manual delivery must be sold within the view of those attending
the sale; and,
iv. the Sheriffs Certificate of Sale contained false narration of facts respecting the
actual time of the public auction;
(d) the enforcement of the levy made by the Sheriff covering the three (3) motor vehicles
based on an alias writ that has long expired.
The petition has absolutely no merit. The trial court committed no grave abuse of discretion in
implementing the alias writ of execution to settle the claim of respondent Santiago, the
satisfaction of which petitioner had been maliciously evading for 21 years.
Petitioner argues that the garnishment of its funds in PNB was invalid inasmuch as these were
public funds and thus exempt from execution. Garnishment is considered a specie of
attachment by means of which the plaintiff seeks to subject to his claim property of the
defendant in the hands of a third person, or money owed by such third person or garnishee
to the defendant.
10

The rule is and has always been that all government funds deposited in the PNB or any other official
depositary of the Philippine Government by any of its agencies or instrumentalities, whether by
general or special deposit, remain government funds and may not be subject to garnishment or
levy, in the absence of a corresponding appropriation as required by law:
11

141

Even though the rule as to immunity of a state from suit is relaxed, the power of the courts
ends when the judgment is rendered. Although the liability of the state has been judicially
ascertained, the state is at liberty to determine for itself whether to pay the judgment or not,
and execution cannot issue on a judgment against the state. Such statutes do not authorize
a seizure of state property to satisfy judgments recovered, and only convey an implication
that the legislature will recognize such judgment as final and make provision for the
satisfaction thereof.
12

The rule is based on obvious considerations of public policy. The functions and public services
rendered by the State cannot be allowed to be paralyzed or disrupted by the diversion of public
funds from their legitimate and specific objects, as appropriated by law.
13

However, the rule is not absolute and admits of a well-defined exception, that is, when there is a
corresponding appropriation as required by law. Otherwise stated, the rule on the immunity of
public funds from seizure or garnishment does not apply where the funds sought to be levied under
execution are already allocated by law specifically for the satisfaction of the money judgment
against the government. In such a case, the monetary judgment may be legally enforced by
judicial processes.
Thus, in the similar case of Pasay City Government, et al. vs. CFI of Manila, Br. X, et al.,
14
where
petitioners challenged the trial courts order garnishing its funds in payment of the contract price for
the construction of the City Hall, we ruled that, while government funds deposited in the PNB are
exempt from execution or garnishment, this rule does not apply if an ordinance has already been
enacted for the payment of the Citys obligations
Upon the issuance of the writ of execution, the petitioner-appellants moved for its quashal
alleging among other things the exemption of the government from execution. This move on
the part of petitioner-appellants is at first glance laudable for all government funds
deposited with the Philippine National Bank by any agency or instrumentality of the
government, whether by way of general or special deposit, remain government funds and
may not be subject to garnishment or levy. But inasmuch as an ordinance has already been
enacted expressly appropriating the amount of P613,096.00 as payment to the respondent-
appellee, then the herein case is covered by the exception to the general rule x x x x
In the instant case, the City Council of Caloocan already approved and passed Ordinance No.
0134, Series of 1992, allocating the amount of P439,377.14 for respondent Santiagos back salaries
plus interest. Thus this case fell squarely within the exception. For all intents and purposes, Ordinance
No. 0134, Series of 1992, was the "corresponding appropriation as required by law." The sum
indicated in the ordinance for Santiago were deemed automatically segregated from the other
budgetary allocations of the City of Caloocan and earmarked solely for the Citys monetary
obligation to her. The judgment of the trial court could then be validly enforced against such funds.
Indeed, this conclusion is further buttressed by the Certification issued on December 23, 1992 by
Norberto C. Azarcon, City Treasurer of Caloocan:
CERTIFICATION
This is to certify that according to the records available in this Office the claim for backwages
of the HON. JUDGE DELFINA H. SANTIAGO has been properly obligated and can be collected
in accordance with existing accounting and auditing rules and regulations.
This is to certify further that in case the claim is not collected within the present fiscal year,
such claim shall be entered in the books of Accounts Payable and can still be collected in
142

the next fiscal year x x x x (Underscoring supplied)
Petitioners reliance on Municipality of Makati vs. Court of Appeals, et al.,
15
and Commissioner of
Public Highways vs. San Diego,
16
does not help their cause.
17
Both cases implicitly affirmed that
public funds may be garnished if there is a statute which appropriated the amount so
garnished. Thus, in Municipality of Makati, citing San Diego, we unequivocally held that:
In this jurisdiction, well-settled is the rule that public funds are not subject to levy and
execution, unless otherwise provided by statute x x x x
Similarly, we cannot agree with petitioners argument that the appropriation ordinance of the
City Council did not authorize PNB to release the funds because only the City Mayor could
authorize the release thereof. A valid appropriation of public funds lifts its exemption from
execution. Here, the appropriation passed by the City Council of Caloocan providing for the
payment of backwages to respondent was duly approved and signed by both the council
and then Mayor Macario Asistio, Jr. The mayors signature approving the budget ordinance
was his assent to the appropriation of funds for respondent Santiagos backwages. If he did
not agree with such allocation, he could have vetoed the item pursuant to Section 55 of the
Local Government Code.
18
There was no such veto.
In view of the foregoing discourse, we dismiss petitioners unfounded assertion, probably made more
out of sheer ignorance of prevailing jurisprudence than a deliberate attempt to mislead us, that the
rule that "public funds (are) beyond the reach of levy and garnishment is not qualified by any
condition."
19

We now come to the issue of the legality of the levy on the three motor vehicles belonging to the
City of Caloocan which petitioners claimed to be exempt from execution, and which levy was
based on an alias writ that had purportedly expired. Suffice it to say that Judge Allarde, in his Order
dated November 10, 1992,
20
already lifted the levy on the three vehicles, thereby formally
discharging them from the jurisdiction of the court and turning them over to the City Government of
Caloocan:
x x x x the levy of the three (3) vehicles made by Sheriff Alberto Castillo pursuant to the Orders
of this Court dated October 1 and 8, 1992 is hereby lifted and the said Sheriff is hereby
ordered to return the same to the City Government in view of the satisfaction of the decision
in these cases x x x x
It is thus unnecessary for us to discuss a moot issue.
We turn to the third issue raised by petitioners that the auction sale by Sheriff Alberto A.
Castillo of the motor vehicle with plate no. SBH-165 was tainted with serious irregularities. We
need not emphasize that the sheriff enjoys the presumption of regularity in the performance
of the functions of his office. This presumption prevails in the absence of substantial evidence
to the contrary and cannot be overcome by bare and self-serving allegations. The petitioners
failed to convince us that the auction sale conducted by the sheriff indeed suffered from
fatal flaws. No evidence was adduced to prove that the sheriff had been remiss in the
performance of his duties during the public auction sale. Indeed it would be injudicious for us
to assume, as petitioners want us to do, that the sheriff failed to follow the established
procedures governing public auctions.
On the contrary, a review of the records shows that the sheriff complied with the rules on
public auction. The sale of the Citys vehicle was made publicly in front of the Caloocan City
Hall on the date fixed in the notice July 27, 1992. In fact, petitioners in their Motion to
143

Declare in Contempt of Court; to Set Aside the Garnishment and Administrative Complaint
admitted as much:
On July 27, 1992, by virtue of an alias writ of execution issued by the respondent court, a
vehicle owned by the petitioner xxx was levied and sold at public auction for the amount
of P100,000.00 and which amount was immediately delivered to the private respondent x x x
x
21

Hence, petitioners cannot now be heard to impugn the validity of the auction sale.
Petitioners, in desperation, likewise make much of the proceedings before the trial court on October
8, 1992, wherein petitioner Norma Abracia, Superintendent of the Division of City Schools of
Caloocan, was commanded to appear and show cause why she should not be cited in contempt
for delaying the execution of judgment. This was in connection with her failure (or refusal) to
surrender the three motor vehicles assigned to the Division of City Schools to the custody of the
sheriff. Petitioner Abracia, assisted by Mr. Ricardo Nagpacan of the Division of City Schools,
appeared during the hearing but requested a ten-day period within which to refer the matter of
contempt to a counsel of her choice. The request was denied by Judge Allarde in his assailed order
dated October 8, 1992. Thus petitioner Abracia claimed, inter alia, that: (a) she was denied due
process; (b) the silence of the order of Judge Allarde on her request for time violated an orderly and
faithful recording of the proceedings, and (c) she was coerced into agreeing to surrender the
vehicles.
We do not think so. What violates due process is the absolute lack of opportunity to be heard. That
opportunity, the Court is convinced, was sufficiently accorded to petitioner Abracia. She was
notified of the contempt charge against her; she was effectively assisted by counsel when she
appeared during the hearing on October 8, 1992; and she was afforded ample opportunity to
answer and refute the charge against her. The circumstance that she opted not to avail of her
chance to be heard on that occasion by asking for an extension of time within which to hire a
counsel of her choice, a request denied by the trial court, did not transgress nor deprive her of her
right to due process.
Significantly, during the hearing on October 8, 1992, Mr. Nagpacan manifested in open court that,
after conferring with petitioner Abracia, the latter was "willing to surrender these vehicles into the
custody of the sheriff on the condition that the standing motion (for contempt) be withdrawn."
22
Her
decision was made freely and voluntarily, and after conferring with her counsel. Moreover, it was
petitioner Abracia herself who imposed the condition that respondent Santiago should withdraw her
motion for contempt in exchange for her promise to surrender the subject vehicles. Thus, petitioner
Abracias claim that she was coerced into surrendering the vehicles had no basis.
Even assuming ex gratia argumenti that there indeed existed certain legal infirmities in connection
with the assailed orders of Judge Allarde, still, considering the totality of circumstances of this case,
the nullification of the contested orders would be way out of line. For 21 long years, starting 1972
when this controversy started up to 1993 when her claim was fully paid out of the garnished funds of
the City of Caloocan, respondent Santiago was cruelly and unjustly deprived of what was due her. It
would be, at the very least, merciless and unchristian to make private respondent refund the City of
Caloocan the amount already paid to her, only to force her to go through the same nightmare all
over again.
At any rate, of paramount importance to us is that justice has been served. No right of the public
was violated and public interest was preserved.
144

Finally, we cannot simply pass over in silence the deplorable act of the former Mayor of Caloocan
City in refusing to sign the check in payment of the Citys obligation to private respondent. It was an
open defiance of judicial processes, smacking of political arrogance, and a direct violation of the
very ordinance he himself approved. Our Resolution in G.R. No. 98366, City Government of
Caloocan vs. Court of Appeals, et al., dated May 16, 1991, dismissing the petition of the City of
Caloocan assailing the issuance of a writ of execution by the trial court, already resolved with finality
all impediments to the execution of judgment in this case. Yet, the City Government of Caloocan, in
a blatant display of malice and bad faith, refused to comply with the decision. Now, it has the
temerity to come to this Court once more and continue inflicting injustice on a hapless citizen, as if
all the harm and prejudice it has already heaped upon respondent Santiago are still not enough.
This Court will not condone the repudiation of just obligations contracted by municipal corporations.
On the contrary, we will extend our aid and every judicial facility to any citizen in the enforcement
of just and valid claims against abusive local government units.
WHEREFORE, the petition is hereby DISMISSED for utter lack of merit. The assailed orders of the trial
court dated October 1, 1992, October 8, 1992 and May 7, 1993, respectively, are AFFIRMED.
Petitioners and their counsels are hereby warned against filing any more pleadings in connection
with the issues already resolved with finality herein and in related cases.
Costs against petitioners.
SO ORDERED.

145

G.R. No. 102667 February 23, 2000
AMADO J. LANSANG, petitioner,
vs.
COURT OF APPEALS, GENERAL ASSEMBLY OF THE BLIND, INC., and JOSE IGLESIAS, respondents.
QUISUMBING, J.:
Before us is a petition to review the decision of the Court of Appeals in C.A. G.R. CV No. 27244,
which set aside the ruling of the Regional Trial Court, Manila, Branch 8, in Civil Case No. 88-43887,
and ordered petitioner Amado J. Lansang to pay private respondent Jose Iglesias P50,000.00 in
moral damages, P10,000.00 in exemplary damages and P5,000.00 in attorney's fees.
Like public streets, public parks are beyond the commerce of man. However, private respondents
were allegedly awarded a "verbal contract of lease" in 1970 by the National Parks Development
Committee (NPDC), a government initiated civic body engaged in the development of national
parks, including Rizal Park,
1
but actually administered by high profile civic leaders and journalists.
Whoever in NPDC gave such "verbal" accommodation to private respondents was unclear, for
indeed no document or instrument appears on record to show the grantor of the verbal license to
private respondents to occupy a portion of the government park dedicated to the national hero's
memory.
Private respondents were allegedly given office and library space as well as kiosks area selling food
and drinks. One such kiosk was located along T.M. Kalaw St., in front of the Army and Navy Club.
Private respondent General Assembly of the Blind, Inc. (GABI) was to remit to NPDC, 40 percent of
the profits derived from operating the kiosks,
2
without again anything shown in the record who
received the share of the profits or how they were used or spent.
With the change of government after the EDSA Revolution, the new Chairman of the NPDC, herein
petitioner, sought to clean up Rizal Park. In a written notice dated February 23, 1988 and received
by private respondents on February 29, 1988, petitioner terminated the so-called verbal agreement
with GABI and demanded that the latter vacate the premises and the kiosks it ran privately within
the public park.
3
In another notice dated March 5, 1988, respondents were given until March 8, 1988
to vacate.
4

The latter notice was signed by private respondent Iglesias, GABI president, allegedly to indicate his
conformity to its contents. However, Iglesias, who is totally blind, claims that he was deceived into
signing the notice. He was allegedly told by Ricardo Villanueva, then chief warden of Rizal Park, that
he was merely acknowledging receipt of the notice. Although blind, Iglesias as president was
knowledgeable enough to run GABI as well as its business.
On the day of the supposed eviction, GABI filed an action for damages and injunction in the
Regional Trial Court against petitioner, Villanueva, and "all persons acting on their behalf".
5
The trial
court issued a temporary restraining order on the same day.
6

The TRO expired on March 28, 1988. The following day, GABI was finally evicted by NPDC.
GABI's action for damages and injunction was subsequently dismissed by the RTC, ruling that the
complaint was actually directed against the State which could not be sued without its consent.
Moreover, the trial court ruled that GABI could not claim damages under the alleged oral lease
agreement since GABI was a mere accommodation concessionaire. As such, it could only recover
damages upon proof of the profits it could realize from the conclusion. The trial court noted that no
such proof was presented.1wphi1.nt
146

On appeal, the Court of Appeals reversed the decision of the trial court.
The Court of Appeals ruled that the mere allegation that a government official is being sued in his
official capacity is not enough to protect such official from liability for acts done without or in excess
of his authority.
7
Granting that petitioner had the authority to evict GABI from Rizal Park, "the abusive
and capricious manner in which that authority was exercised amounted to a legal wrong for which
he must now be held liable for damages"
8
according to the Court of Appeals.
The Court of Appeals noted that, as the trial court observed, the eviction of GABI came at the heels
of two significant incidents. First, after private respondent Iglesias extended monetary support to
striking workers of the NPDC, and second, after Iglesias sent the Tanodbayan, a letter on November
26, 1987, denouncing alleged graft and corruption in the NPDC.
9
These, according to the Court of
Appeals, should not have been taken against GABI, which had been occupying Rizal Park for nearly
20 years. GABI was evicted purportedly for violating its verbal agreement with NPDC.
10
However, the
Court of Appeals pointed out that NPDC failed to present proof of such violation.
11

The Court of Appeals found petitioner liable for damages under Articles 19, 21, and 24 of the Civil
Code.
12

The Court of Appeals absolved from liability all other persons impleaded in GABI's complaint since it
appeared that they were merely acting under the orders of petitioner. The new officers of NPDC,
additionally impleaded by GABI, were likewise absolved from liability, absent any showing that they
participated in the acts complained of. Petitioner was ordered to pay private respondent Iglesias
moral and exemplary damages and attorney's fees.
Hence, this petition, in which petitioner raises the following issues:
I. WHETHER OR NOT RESPONDENT COURT ERRED IN NOT HOLDING THAT PRIVATE RESPONDENTS'
COMPLAINT AGAINST PETITIONER, AS CHAIRMAN OF NPDC, AND HIS CO-DEFENDANTS IN CIVIL
CASE NO. 88-43887, IS IN EFFECT A SUIT AGAINST THE STATE WHICH CANNOT BE SUED WITHOUT
ITS CONSENT.
II. WHETHER OR NOT RESPONDENT COURT ERRED IN NOT HOLDING THAT PETITIONER'S ACT OF
TERMINATING RESPONDENT GABI'S CONCESSION IS VALID AND DONE IN THE LAWFUL
PERFORMANCE OF OFFICIAL DUTY.
13

Petitioner insists that the complaint filed against him is in reality a complaint against the State, which
could not prosper without the latter's consent. He anchors his argument on the fact that NPDC is a
government agency, and that when he ordered the eviction of GABI, he was acting in his capacity
as chairman of NPDC. Petitioner avers that the mere allegation that he was being sued in his
personal capacity did not remove the case from the coverage of the law of public officers and the
doctrine of state immunity.
Petitioner points out that Iglesias signed the notice of eviction to indicate his conformity thereto. He
contends that as evidence of private respondents' bad faith, they sued petitioner instead of
complying with their undertaking to vacate their library and kiosk at Rizal Park.
Petitioner adds that during the actual eviction, no untoward incident occurred. GABI's properties
were properly inventoried and stored.
According to petitioner, the Court of Appeals' observation that the eviction was prompted by
Iglesias' support for striking NPDC workers and the letter-complaint sent to the Tanodbayan is merely
conjectural.
147

Finally, petitioner avers that the move to evict GABI and award the spaces it occupied to another
group was an executive policy decision within the discretion of NPDC. GABI's possession of the kiosks
as concessionaire was by mere tolerance of NPDC and, thus, such possession may be withdrawn at
any time, with or without cause.
On the other hand, private respondents aver that petitioner acted beyond the scope of his authority
when he showed malice and bad faith in ordering GABI's ejectment from Rizal Park. Quoting from
the decision of the Court of Appeals, private respondents argue that petitioner is liable for damages
for performing acts "to injure an individual rather than to discharge a public duty."
14

While private respondents recognize the authority of petitioner to terminate the agreement with
GABI "if [the contract] is prejudicial to the interest of the NPDC,"
15
they maintain that petitioner's
personal interest, and not that of the NPDC, was the root cause of GABI's ejecment.
The doctrine of state immunity from suit applies to complaints filed against public officials for acts
done in the performance of their duties. The rule is that the suit must be regarded as one against the
state where satisfaction of the judgment against the public official concerned will require the state
itself to perform a positive act, such as appropriation of the amount necessary to pay the damages
awarded to the plaintiff.
16

The rule does not apply where the public official is charged in his official capacity for acts that are
unlawful and injurious to the rights of others.
17
Public officials are not exempt, in their personal
capacity, from liability arising from acts committed in bad faith.
18

Neither does it apply where the public official is clearly being sued not in his official capacity but in
his personal capacity, although the acts complained of may have been committed while he
occupied a public position.
We are convinced that petitioner is being sued not in his capacity as NPDC chairman but in his
personal capacity. The complaint filed by private respondents in the RTC merely identified petitioner
as chairman of the NPDC, but did not categorically state that he is being sued in that
capacity.
19
Also, it is evident from paragraph 4 of said complaint that petitioner was sued allegedly
for having personal motives in ordering the ejectment of GABI from Rizal Park.
4. Defendant AMADO J. LANSANG, JR., the Chairman of the National Parks Development
Committee, acting under the spirit of revenge, ill-will, evil motive and personal resentment
against plaintiff JOSE IGLESIAS, served on the plaintiff corporation a letter, dated February 23,
1988 terminating plaintiffs lease agreement with a demand for the plaintiff corporation to
vacate its office premises. . .
20
(Emphasis supplied.)
The parties do not dispute that it was petitioner who ordered the ejectment of GABI from their office
and kiosk at Rizal Park. There is also no dispute that petitioner, as chairman of the NPDC which was
the agency tasked to administer Rizal Park, had the authority to terminate the agreement with
GABI
21
and order the organization's ejectment. The question now is whether or not petitioner abused
his authority in ordering the ejectment of private respondents.
We find, however, no evidence of such abuse of authority on record. As earlier stated, Rizal Park is
beyond the commerce of man and, thus, could not be the subject of a lease contract. Admittedly,
there was no written contract. That private respondents were allowed to occupy office and kiosk
spaces in the park was only a matter of accommodation by the previous administrator. This being
so, also admittedly, petitioner may validly discontinue the accommodation extended to private
respondents, who may be ejected from the park when necessary. Private respondents cannot and
does not claim a vested right to continue to occupy Rizal Park.
148

The Court of Appeals awarded private respondent Iglesias moral and exemplary damages and
attorney's fees. However, we find no evidence on record to support Iglesias' claim that he suffered
moral injury as a result of GABI's ejectment from Rizal Park. Absent any satisfactory proof upon which
the Court may base the amount of damages suffered, the award of moral damages cannot be
sustained.
22

Neither can we sustain the award of exemplary damages, which may only be awarded in addition
to moral, temperate, liquidated, or compensatory damages.
23
We also disallow the award for
attorney's fees, which can only be recovered per stipulation of the parties, which is absent in this
case. There is no showing that any of the exceptions justifying the award of attorney's fees absent a
stipulation is present in this case.
24

WHEREFORE, the instant petition is GRANTED. The decision of the Court of Appeals in CA-G.R. CV No.
27244 is hereby SET ASIDE, and the DISMISSAL of the complaint for damages by the trial court for
want of merit is AFFIRMED. No costs.
SO ORDERED.1wphi1.nt

149

THE MUNICIPALITY OF HAGONOY, BULACAN, represented
by the HON. FELIX V. OPLE, Municipal Mayor, and FELIX V.
OPLE, in his personal capacity,
Petitioners,

- versus -

HON. SIMEON P. DUMDUM,
JR., Respondents.
G.R. No. 168289


Present:



Promulgated:

March 22, 2010
x-----------------------------------------------------------------------------------------x

D E C I S I O N
PERALTA, J.:

This is a Joint Petition
[1]
under Rule 45 of the Rules of Court
brought by the Municipality of Hagonoy, Bulacan and its former chief executive, Mayor Felix V. Ople
in his official and personal capacity, from the January 31, 2005 Decision
[2]
and the May 23, 2005
Resolution
[3]
of the Court of Appeals in CA-G.R. SP No. 81888. The assailed decision affirmed
the October 20, 2003 Order
[4]
issued by the Regional Trial Court of Cebu City, Branch 7 in Civil Case
No. CEB-28587 denying petitioners motion to dismiss and motion to discharge/dissolve the writ of
preliminary attachment previously issued in the case. The assailed resolution denied
reconsideration.

The case stems from a Complaint
[5]
filed by herein private respondent Emily Rose Go Ko Lim
Chao against herein petitioners, the Municipality of Hagonoy, Bulacan and its chief executive, Felix
V. Ople (Ople) for collection of a sum of money and damages. It was alleged that sometime in the
middle of the year 2000, respondent, doing business as KD Surplus and as such engaged in buying
and selling surplus trucks, heavy equipment, machinery, spare parts and related supplies, was
contacted by petitioner Ople. Respondent had entered into an agreement with petitioner
municipality through Ople for the delivery of motor vehicles, which supposedly were needed to
carry out certain developmental undertakings in the municipality. Respondent claimed that
because of Oples earnest representation that funds had already been allocated for the project,
she agreed to deliver from her principal place of business in Cebu City twenty-one motor vehicles
whose value totaled P5,820,000.00. To prove this, she attached to the complaint copies of the bills
of lading showing that the items were consigned, delivered to and received by petitioner
municipality on different dates.
[6]
However, despite having made several deliveries, Ople allegedly
did not heed respondents claim for payment. As of the filing of the complaint, the total obligation
of petitioner had already totaled P10,026,060.13 exclusive of penalties and damages. Thus,
respondent prayed for full payment of the said amount, with interest at not less than 2% per month,
plus P500,000.00 as damages for business losses, P500,000.00 as exemplary damages, attorneys fees
of P100,000.00 and the costs of the suit.

On February 13, 2003, the trial court issued an Order
[7]
granting respondents prayer for a writ of
preliminary attachment conditioned upon the posting of a bond equivalent to the amount of the
claim. On March 20, 2003, the trial court issued the Writ of Preliminary Attachment
[8]
directing the
sheriff to attach the estate, real and personal properties of petitioners.

Instead of addressing private respondents allegations, petitioners filed a Motion to Dismiss
[9]
on
the ground that the claim on which the action had been brought was unenforceable under the
statute of frauds, pointing out that there was no written contract or document that would evince
the supposed agreement they entered into with respondent. They averred that contracts of this
nature, before being undertaken by the municipality, would ordinarily be subject to several
150

preconditions such as a public bidding and prior approval of the municipal council which, in this
case, did not obtain. From this, petitioners impress upon us the notion that no contract was ever
entered into by the local government with respondent.
[10]
To address the claim that respondent had
made the deliveries under the agreement, they advanced that the bills of lading attached to the
complaint were hardly probative, inasmuch as these documents had been accomplished and
handled exclusively by respondent herself as well as by her employees and agents.
[11]


Petitioners also filed a Motion to Dissolve and/or Discharge the Writ of Preliminary Attachment
Already Issued,
[12]
invoking immunity of the state from suit, unenforceability of the contract, and
failure to substantiate the allegation of fraud.
[13]


On October 20, 2003, the trial court issued an Order
[14]
denying the two motions. Petitioners
moved for reconsideration, but they were denied in an Order
[15]
dated December 29, 2003.

Believing that the trial court had committed grave abuse of discretion in issuing the two orders,
petitioners elevated the matter to the Court of Appeals via a petition for certiorari under Rule 65. In
it, they faulted the trial court for not dismissing the complaint despite the fact that the alleged
contract was unenforceable under the statute of frauds, as well as for ordering the filing of an
answer and in effect allowing private respondent to prove that she did make several deliveries of
the subject motor vehicles. Additionally, it was likewise asserted that the trial court committed grave
abuse of discretion in not discharging/dissolving the writ of preliminary attachment, as prayed for in
the motion, and in effect disregarding the rule that the local government is immune from suit.

On January 31, 2005, following assessment of the parties arguments, the Court of Appeals,
finding no merit in the petition, upheld private respondents claim and affirmed the trial courts
order.
[16]
Petitioners moved for reconsideration, but the same was likewise denied for lack of merit
and for being a mere scrap of paper for having been filed by an unauthorized counsel.
[17]
Hence,
this petition.

In their present recourse, which raises no matter different from those passed upon by the Court
of Appeals, petitioners ascribe error to the Court of Appeals for dismissing their challenge against the
trial courts October 20 and December 29, 2003 Orders. Again, they reason that the complaint
should have been dismissed at the first instance based on unenforceability and that the motion to
dissolve/discharge the preliminary attachment should have been granted.
[18]


Commenting on the petition, private respondent notes that with respect to the Court of
Appeals denial of the certiorari petition, the same was rightly done, as the fact of delivery may be
properly and adequately addressed at the trial of the case on the merits; and that the dissolution of
the writ of preliminary attachment was not proper under the premises inasmuch as the application
for the writ sufficiently alleged fraud on the part of petitioners. In the same breath, respondent
laments that the denial of petitioners motion for reconsideration was rightly done by the Court of
Appeals, because it raised no new matter that had not yet been addressed.
[19]


After the filing of the parties respective memoranda, the case was deemed submitted for
decision.

We now rule on the petition.

To begin with, the Statute of Frauds found in paragraph (2), Article 1403 of the Civil
Code,
[20]
requires for enforceability certain contracts enumerated therein to be evidenced by some
note or memorandum. The term Statute of Frauds is descriptive of statutes that require certain
classes of contracts to be in writing; and that do not deprive the parties of the right to contract with
151

respect to the matters therein involved, but merely regulate the formalities of the contract necessary
to render it enforceable.
[21]


In other words, the Statute of Frauds only lays down the method by which the enumerated
contracts may be proved. But it does not declare them invalid because they are not reduced to
writing inasmuch as, by law, contracts are obligatory in whatever form they may have been entered
into, provided all the essential requisites for their validity are present.
[22]
The object is to prevent fraud
and perjury in the enforcement of obligations depending, for evidence thereof, on the unassisted
memory of witnesses by requiring certain enumerated contracts and transactions to be evidenced
by a writing signed by the party to be charged.
[23]
The effect of noncompliance with this
requirement is simply that no action can be enforced under the given contracts.
[24]
If an action is
nevertheless filed in court, it shall warrant a dismissal under Section 1(i),
[25]
Rule 16 of the Rules of
Court,unless there has been, among others, total or partial performance of the obligation on the
part of either party.
[26]


It has been private respondents consistent stand, since the inception of the instant case that
she has entered into a contract with petitioners. As far as she is concerned, she has already
performed her part of the obligation under the agreement by undertaking the delivery of the 21
motor vehicles contracted for by Ople in the name of petitioner municipality. This claim is well
substantiated at least for the initial purpose of setting out a valid cause of action against
petitioners by copies of the bills of lading attached to the complaint, naming petitioner
municipality as consignee of the shipment. Petitioners have not at any time expressly denied this
allegation and, hence, the same is binding on the trial court for the purpose of ruling on the motion
to dismiss. In other words, since there exists an indication by way of allegation that there has been
performance of the obligation on the part of respondent, the case is excluded from the coverage
of the rule on dismissals based on unenforceability under the statute of frauds, and either party may
then enforce its claims against the other.

No other principle in remedial law is more settled than that when a motion to dismiss is filed,
the material allegations of the complaint are deemed to be hypothetically admitted.
[27]
This
hypothetical admission, according to Viewmaster Construction Corporation v. Roxas
[28]
and Navoa
v. Court of Appeals,
[29]
extends not only to the relevant and material facts well pleaded in the
complaint, but also to inferences that may be fairly deduced from them. Thus, where it appears
that the allegations in the complaint furnish sufficient basis on which the complaint can be
maintained, the same should not be dismissed regardless of the defenses that may be raised by the
defendants.
[30]
Stated differently, where the motion to dismiss is predicated on grounds that are not
indubitable, the better policy is to deny the motion without prejudice to taking such measures as
may be proper to assure that the ends of justice may be served.
[31]


It is interesting to note at this point that in their bid to have the case dismissed, petitioners
theorize that there could not have been a contract by which the municipality agreed to be bound,
because it was not shown that there had been compliance with the required bidding or that the
municipal council had approved the contract. The argument is flawed. By invoking unenforceability
under the Statute of Frauds, petitioners are in effect acknowledging the existence of a contract
between them and private respondent only, the said contract cannot be enforced by action for
being non-compliant with the legal requisite that it be reduced into writing. Suffice it to say that
while this assertion might be a viable defense against respondents claim, it is principally a matter of
evidence that may be properly ventilated at the trial of the case on the merits.

Verily, no grave abuse of discretion has been committed by the trial court in denying
petitioners motion to dismiss this case. The Court of Appeals is thus correct in affirming the same.

152

We now address the question of whether there is a valid reason to deny petitioners motion to
discharge the writ of preliminary attachment.

Petitioners, advocating a negative stance on this issue, posit that as a municipal corporation,
the Municipality of Hagonoy is immune from suit, and that its properties are by law exempt from
execution and garnishment. Hence, they submit that not only was there an error committed by the
trial court in denying their motion to dissolve the writ of preliminary attachment; they also advance
that it should not have been issued in the first place. Nevertheless, they believe that respondent has
not been able to substantiate her allegations of fraud necessary for the issuance of the writ.
[32]


Private respondent, for her part, counters that, contrary to petitioners claim, she has amply
discussed the basis for the issuance of the writ of preliminary attachment in her affidavit; and that
petitioners claim of immunity from suit is negated by Section 22 of the Local Government Code,
which vests municipal corporations with the power to sue and be sued. Further, she contends that
the arguments offered by petitioners against the writ of preliminary attachment clearly touch on
matters that when ruled upon in the hearing for the motion to discharge, would amount to a trial of
the case on the merits.
[33]


The general rule spelled out in Section 3, Article XVI of the Constitution is that the state and its
political subdivisions may not be sued without their consent. Otherwise put, they are open to suit but
only when they consent to it. Consent is implied when the government enters into a business
contract, as it then descends to the level of the other contracting party; or it may be embodied in a
general or special law
[34]
such as that found in Book I, Title I, Chapter 2, Section 22 of the Local
Government Code of 1991, which vests local government units with certain corporate powers one
of them is the power to sue and be sued.

Be that as it may, a difference lies between suability and liability. As held in City of Caloocan
v. Allarde,
[35]
where the suability of the state is conceded and by which liability is ascertained
judicially, the state is at liberty to determine for itself whether to satisfy the judgment or
not. Execution may not issue upon such judgment, because statutes waiving non-suability do not
authorize the seizure of property to satisfy judgments recovered from the action. These statutes only
convey an implication that the legislature will recognize such judgment as final and make provisions
for its full satisfaction. Thus, where consent to be sued is given by general or special law, the
implication thereof is limited only to the resultant verdict on the action before execution of the
judgment.
[36]


Traders Royal Bank v. Intermediate Appellate Court,
[37]
citing Commissioner of Public
Highways v. San Diego,
[38]
is instructive on this point. In that case which involved a suit on a contract
entered into by an entity supervised by the Office of the President, the Court held that while the said
entity opened itself to suit by entering into the subject contract with a private entity; still, the trial
court was in error in ordering the garnishment of its funds, which were public in nature and, hence,
beyond the reach of garnishment and attachment proceedings. Accordingly, the Court ordered
that the writ of preliminary attachment issued in that case be lifted, and that the parties be allowed
to prove their respective claims at the trial on the merits. There, the Court highlighted the reason for
the rule, to wit:

The universal rule that where the State gives its consent to be sued by private parties
either by general or special law, it may limit claimants action only up to the completion of
proceedings anterior to the stage of execution and that the power of the Courts ends when
the judgment is rendered, since government funds and properties may not be seized under
writs of execution or garnishment to satisfy such judgments, is based on obvious
considerations of public policy. Disbursements of public funds must be covered by the
corresponding appropriations as required by law. The functions and public services rendered
153

by the State cannot be allowed to be paralyzed or disrupted by the diversion of public funds
from their legitimate and specific objects. x x x
[39]



With this in mind, the Court holds that the writ of preliminary attachment must be dissolved
and, indeed, it must not have been issued in the very first place. While there is merit in private
respondents position that she, by affidavit, was able to substantiate the allegation of fraud in the
same way that the fraud attributable to petitioners was sufficiently alleged in the complaint and,
hence, the issuance of the writ would have been justified. Still, the writ of attachment in this case
would only prove to be useless and unnecessary under the premises, since the property of the
municipality may not, in the event that respondents claim is validated, be subjected to writs of
execution and garnishment unless, of course, there has been a corresponding appropriation
provided by law.
[40]


Anent the other issues raised by petitioners relative to the denial of their motion to dissolve the
writ of attachment, i.e., unenforceability of the contract and the veracity of private respondents
allegation of fraud, suffice it to say that these pertain to the merits of the main action. Hence, these
issues are not to be taken up in resolving the motion to discharge, lest we run the risk of deciding or
prejudging the main case and force a trial on the merits at this stage of the proceedings.
[41]


There is one final concern raised by petitioners relative to the denial of their motion for
reconsideration. They complain that it was an error for the Court of Appeals to have denied the
motion on the ground that the same was filed by an unauthorized counsel and, hence, must be
treated as a mere scrap of paper.
[42]


It can be derived from the records that petitioner Ople, in his personal capacity, filed his Rule
65 petition with the Court of Appeals through the representation of the law firm Chan Robles &
Associates. Later on, municipal legal officer Joselito Reyes, counsel for petitioner Ople, in his official
capacity and for petitioner municipality, filed with the Court of Appeals a Manifestation with Entry of
Appearance
[43]
to the effect that he, as counsel, was adopting all the pleadings filed for and in
behalf of [Oples personal representation] relative to this case.
[44]


It appears, however, that after the issuance of the Court of Appeals decision, only Oples
personal representation signed the motion for reconsideration. There is no showing that the
municipal legal officer made the same manifestation, as he previously did upon the filing of the
petition.
[45]
From this, the Court of Appeals concluded that it was as if petitioner municipality and
petitioner Ople, in his official capacity, had never moved for reconsideration of the assailed
decision, and adverts to the ruling in Ramos v. Court of Appeals
[46]
and Municipality of Pililla, Rizal v.
Court of Appeals
[47]
that only under well-defined exceptions may a private counsel be engaged in
lawsuits involving a municipality, none of which exceptions obtains in this case.
[48]


The Court of Appeals is mistaken. As can be seen from the manner in which the
Manifestation with Entry of Appearance is worded, it is clear that petitioner municipalitys legal
officer was intent on adopting, for both the municipality and Mayor Ople, not only
the certiorari petition filed with the Court of Appeals, but also all other pleadings that may be filed
thereafter by Oples personal representation, including the motion for reconsideration subject of this
case. In any event, however, the said motion for reconsideration would warrant a denial, because
there seems to be no matter raised therein that has not yet been previously addressed in the
assailed decision of the Court of Appeals as well as in the proceedings below, and that would have
otherwise warranted a different treatment of the issues involved.


154

WHEREFORE, the Petition is GRANTED IN PART. The January 31, 2005 Decision of the Court of
Appeals in CA-G.R. SP No. 81888 is AFFIRMED insofar as it affirmed the October 20, 2003 Decision of
the Regional Trial Court of Cebu City, Branch 7 denying petitioners motion to dismiss in Civil Case
No. CEB-28587. The assailed decision is REVERSED insofar as it affirmed the said trial courts denial of
petitioners motion to discharge the writ of preliminary attachment issued in that case. Accordingly,
the August 4, 2003 Writ of Preliminary Attachment issued in Civil Case No. CEB-28587 is ordered lifted.

SO ORDERED.

155

[G.R. No. 154705. June 26, 2003]
THE REPUBLIC OF INDONESIA, HIS EXCELLENCY AMBASSADOR SOERATMIN, and MINISTER COUNSELLOR
AZHARI KASIM, petitioners, vs. JAMES VINZON, doing business under the name and style of
VINZON TRADE AND SERVICES,respondent.
D E C I S I O N
AZCUNA, J:
This is a petition for review on certiorari to set aside the Decision of the Court of Appeals dated
May 30, 2002 and its Resolution dated August 16, 2002, in CA-G.R. SP No. 66894 entitled The
Republic of Indonesia, His Excellency Ambassador Soeratmin and Minister Counselor Azhari Kasim v.
Hon. Cesar Santamaria, Presiding Judge, RTC Branch 145, Makati City, and James Vinzon, doing
business under the name and style of Vinzon Trade and Services.
Petitioner, Republic of Indonesia, represented by its Counsellor, Siti Partinah, entered into a
Maintenance Agreement in August 1995 with respondent James Vinzon, sole proprietor of Vinzon
Trade and Services. The Maintenance Agreement stated that respondent shall, for a consideration,
maintain specified equipment at the Embassy Main Building, Embassy Annex Building and the Wisma
Duta, the official residence of petitioner Ambassador Soeratmin. The equipment covered by the
Maintenance Agreement are air conditioning units, generator sets, electrical facilities, water
heaters, and water motor pumps. It is likewise stated therein that the agreement shall be effective
for a period of four years and will renew itself automatically unless cancelled by either party by
giving thirty days prior written notice from the date of expiry.
[1]

Petitioners claim that sometime prior to the date of expiration of the said agreement, or before
August 1999, they informed respondent that the renewal of the agreement shall be at the discretion
of the incoming Chief of Administration, Minister Counsellor Azhari Kasim, who was expected to
arrive in February 2000. When Minister Counsellor Kasim assumed the position of Chief of
Administration in March 2000, he allegedly found respondents work and services unsatisfactory and
not in compliance with the standards set in the Maintenance Agreement. Hence, the Indonesian
Embassy terminated the agreement in a letter dated August 31, 2000.
[2]
Petitioners claim, moreover,
that they had earlier verbally informed respondent of their decision to terminate the agreement.
On the other hand, respondent claims that the aforesaid termination was arbitrary and
unlawful. Respondent cites various circumstances which purportedly negated petitioners alleged
dissatisfaction over respondents services: (a) in July 2000, Minister Counsellor Kasim still requested
respondent to assign to the embassy an additional full-time worker to assist one of his other workers;
(b) in August 2000, Minister Counsellor Kasim asked respondent to donate a prize, which the latter
did, on the occasion of the Indonesian Independence Day golf tournament; and (c) in a letter
dated August 22, 2000, petitioner Ambassador Soeratmin thanked respondent for sponsoring a prize
and expressed his hope that the cordial relations happily existing between them will continue to
prosper and be strengthened in the coming years.
Hence, on December 15, 2000, respondent filed a complaint
[3]
against petitioners docketed as
Civil Case No. 18203 in the Regional Trial Court (RTC) of Makati, Branch 145. On February 20, 2001,
petitioners filed a Motion to Dismiss, alleging that the Republic of Indonesia, as a foreign sovereign
State, has sovereign immunity from suit and cannot be sued as a party-defendant in the
Philippines. The said motion further alleged that Ambassador Soeratmin and Minister Counsellor
Kasim are diplomatic agents as defined under the Vienna Convention on Diplomatic Relations and
therefore enjoy diplomatic immunity.
[4]
In turn, respondent filed on March 20, 2001, an Opposition to
the said motion alleging that the Republic of Indonesia has expressly waived its immunity from
suit. He based this claim upon the following provision in the Maintenance Agreement:
156

Any legal action arising out of this Maintenance Agreement shall be settled according to the laws
of the Philippines and by the proper court of Makati City, Philippines.
Respondents Opposition likewise alleged that Ambassador Soeratmin and Minister Counsellor Kasim
can be sued and held liable in their private capacities for tortious acts done with malice and bad
faith.
[5]

On May 17, 2001, the trial court denied herein petitioners Motion to Dismiss. It likewise denied
the Motion for Reconsideration subsequently filed.
The trial courts denial of the Motion to Dismiss was brought up to the Court of Appeals by herein
petitioners in a petition for certiorari and prohibition. Said petition, docketed as CA-G.R. SP No.
66894, alleged that the trial court gravely abused its discretion in ruling that the Republic of
Indonesia gave its consent to be sued and voluntarily submitted itself to the laws and jurisdiction of
Philippine courts and that petitioners Ambassador Soeratmin and Minister Counsellor Kasim waived
their immunity from suit.
On May 30, 2002, the Court of Appeals rendered its assailed decision denying the petition for
lack of merit.
[6]
On August 16, 2002, it denied herein petitioners motion for reconsideration.
[7]

Hence, this petition.
In the case at bar, petitioners raise the sole issue of whether or not the Court of Appeals erred in
sustaining the trial courts decision that petitioners have waived their immunity from suit by using as
its basis the abovementioned provision in the Maintenance Agreement.
The petition is impressed with merit.
International law is founded largely upon the principles of reciprocity, comity, independence,
and equality of States which were adopted as part of the law of our land under Article II, Section 2
of the 1987 Constitution.
[8]
The rule that a State may not be sued without its consent is a necessary
consequence of the principles of independence and equality of States.
[9]
As enunciated in Sanders
v. Veridiano II,
[10]
the practical justification for the doctrine of sovereign immunity is that there can be
no legal right against the authority that makes the law on which the right depends. In the case of
foreign States, the rule is derived from the principle of the sovereign equality of States, as expressed
in the maxim par in parem non habet imperium. All states are sovereign equals and cannot assert
jurisdiction over one another.
[11]
A contrary attitude would unduly vex the peace of nations.
[12]

The rules of International Law, however, are neither unyielding nor impervious to change. The
increasing need of sovereign States to enter into purely commercial activities remotely connected
with the discharge of their governmental functions brought about a new concept of sovereign
immunity. This concept, the restrictive theory, holds that the immunity of the sovereign is recognized
only with regard to public acts or acts jure imperii, but not with regard to private acts or actsjure
gestionis.
[13]

In United States v. Ruiz,
[14]
for instance, we held that the conduct of public bidding for the repair
of a wharf at a United States Naval Station is an act jure imperii. On the other hand, we considered
as an act jure gestionis the hiring of a cook in the recreation center catering to American
servicemen and the general public at the John Hay Air Station in Baguio City,
[15]
as well as the
bidding for the operation of barber shops in Clark Air Base in Angeles City.
[16]

Apropos the present case, the mere entering into a contract by a foreign State with a private
party cannot be construed as the ultimate test of whether or not it is an act jure imperii or jure
gestionis. Such act is only the start of the inquiry. Is the foreign State engaged in the regular
conduct of a business? If the foreign State is not engaged regularly in a business or commercial
activity, and in this case it has not been shown to be so engaged, the particular act or transaction
must then be tested by its nature. If the act is in pursuit of a sovereign activity, or an incident
thereof, then it is an act jure imperii.
[17]

157

Hence, the existence alone of a paragraph in a contract stating that any legal action arising
out of the agreement shall be settled according to the laws of the Philippines and by a specified
court of the Philippines is not necessarily a waiver of sovereign immunity from suit. The aforesaid
provision contains language not necessarily inconsistent with sovereign immunity. On the other
hand, such provision may also be meant to apply where the sovereign party elects to sue in the
local courts, or otherwise waives its immunity by any subsequent act. The applicability of Philippine
laws must be deemed to include Philippine laws in its totality, including the principle recognizing
sovereign immunity. Hence, the proper court may have no proper action, by way of settling the
case, except to dismiss it.
Submission by a foreign state to local jurisdiction must be clear and unequivocal. It must be
given explicitly or by necessary implication. We find no such waiver in this case.
Respondent concedes that the establishment of a diplomatic mission is a sovereign
function. On the other hand, he argues that the actual physical maintenance of the premises of the
diplomatic mission, such as the upkeep of its furnishings and equipment, is no longer a sovereign
function of the State.
[18]

We disagree. There is no dispute that the establishment of a diplomatic mission is an act jure
imperii. A sovereign State does not merely establish a diplomatic mission and leave it at that; the
establishment of a diplomatic mission encompasses its maintenance and upkeep. Hence, the State
may enter into contracts with private entities to maintain the premises, furnishings and equipment of
the embassy and the living quarters of its agents and officials. It is therefore clear that petitioner
Republic of Indonesia was acting in pursuit of a sovereign activity when it entered into a contract
with respondent for the upkeep or maintenance of the air conditioning units, generator sets,
electrical facilities, water heaters, and water motor pumps of the Indonesian Embassy and the
official residence of the Indonesian ambassador.
The Solicitor General, in his Comment, submits the view that, the Maintenance Agreement was
entered into by the Republic of Indonesia in the discharge of its governmental functions. In such a
case, it cannot be deemed to have waived its immunity from suit. As to the paragraph in the
agreement relied upon by respondent, the Solicitor General states that it was not a waiver of their
immunity from suit but a mere stipulation that in the event they do waive their immunity, Philippine
laws shall govern the resolution of any legal action arising out of the agreement and the proper
court in Makati City shall be the agreed venue thereof.
[19]

On the matter of whether or not petitioners Ambassador Soeratmin and Minister Counsellor
Kasim may be sued herein in their private capacities, Article 31 of the Vienna Convention on
Diplomatic Relations provides:
x x x
1. A diplomatic agent shall enjoy immunity from the criminal jurisidiction of the receiving State. He
shall also enjoy immunity from its civil and administrative jurisdiction, except in the case of:
(a) a real action relating to private immovable property situated in the territory of the receiving
State, unless he holds it on behalf of the sending State for the purposes of the mission;
(b) an action relating to succession in which the diplomatic agent is involved as executor,
administrator, heir or legatee as a private person and not on behalf of the sending State;
(c) an action relating to any professional or commercial activity exercised by the diplomatic agent
in the receiving State outside his official functions.
x x x
158

The act of petitioners Ambassador Soeratmin and Minister Counsellor Kasim in terminating the
Maintenance Agreement is not covered by the exceptions provided in the abovementioned
provision.
The Solicitor General believes that said act may fall under subparagraph (c) thereof,
[20]
but said
provision clearly applies only to a situation where the diplomatic agent engages in any professional
or commercial activity outside official functions, which is not the case herein.
WHEREFORE, the petition is hereby GRANTED. The decision and resolution of the Court of
Appeals in CA G.R. SP No. 66894 are REVERSED and SET ASIDE and the complaint in Civil Case No.
18203 against petitioners is DISMISSED.
No costs.
SO ORDERED.

159

G.R. No. 157036 June 9, 2004
FRANCISCO I. CHAVEZ Petitioner,
vs.
HON. ALBERTO G. ROMULO, IN HIS CAPACITY AS EXECUTIVE SECRETARY; DIRECTOR GENERAL
HERMOGENES E. EBDANE, JR., IN HIS CAPACITY AS THE CHIEF OF THE PNP, ET. AL., respondents.
D E C I S I O N
SANDOVAL-GUTIERREZ, J.:
The right of individuals to bear arms is not absolute, but is subject to regulation. The maintenance of
peace and order
1
and the protection of the people against violence are constitutional duties of the
State, and the right to bear arms is to be construed in connection and in harmony with these
constitutional duties.
Before us is a petition for prohibition and injunction seeking to enjoin the implementation of the
"Guidelines in the Implementation of the Ban on the Carrying of Firearms Outside of
Residence"
2
(Guidelines) issued on January 31, 2003, by respondent Hermogenes E. Ebdane, Jr.,
Chief of the Philippine National Police (PNP).
The facts are undisputed:
In January 2003, President Gloria Macapagal-Arroyo delivered a speech before the members
of the PNP stressing the need for a nationwide gun ban in all public places to avert the rising
crime incidents. She directed the then PNP Chief, respondent Ebdane, to suspend the
issuance of Permits to Carry Firearms Outside of Residence (PTCFOR), thus:
"THERE IS ALSO NEED TO FOCUS ON THE HIGH PROFILE CRIMES THAT TEND TO DISTURB
THE PSYCHOLOGICAL PERIMETERS OF THE COMMUNITY THE LATEST BEING THE KILLING
OF FORMER NPA LEADER ROLLY KINTANAR. I UNDERSTAND WE ALREADY HAVE THE
IDENTITY OF THE CULPRIT. LET US BRING THEM TO THE BAR OF JUSTICE.
THE NPA WILL FIND IT MORE DIFFICULT TO CARRY OUT THEIR PLOTS IF OUR LAW
ENFORCEMENT AGENCIES CAN RID THEMSELVES OF RASCALS IN UNIFORM, AND ALSO IF
WE ENFORCE A GUN BAN IN PUBLIC PLACES.
THUS, I AM DIRECTING THE PNP CHIEF TO SUSPEND INDEFINITELY THE ISSUANCE OF PERMIT
TO CARRY FIREARMS IN PUBLIC PLACES. THE ISSUANCE OF PERMITS WILL NOW BE LIMITED
ONLY TO OWNERSHIP AND POSSESSION OF GUNS AND NOT TO CARRYING THEM IN
PUBLIC PLACES. FROM NOW ON, ONLY THE UNIFORMED MEN IN THE MILITARY AND
AUTHORIZED LAW ENFORCEMENT OFFICERS CAN CARRY FIREARMS IN PUBLIC PLACES,
AND ONLY PURSUANT TO EXISTING LAW. CIVILIAN OWNERS MAY NO LONGER BRING
THEIR FIREARMS OUTSIDE THEIR RESIDENCES. THOSE WHO WANT TO USE THEIR GUNS FOR
TARGET PRACTICE WILL BE GIVEN SPECIAL AND TEMPORARY PERMITS FROM TIME TO
TIME ONLY FOR THAT PURPOSE. AND THEY MAY NOT LOAD THEIR GUNS WITH BULLETS
UNTIL THEY ARE IN THE PREMISES OF THE FIRING RANGE.
WE CANNOT DISREGARD THE PARAMOUNT NEED FOR LAW AND ORDER. JUST AS WE
CANNOT BE HEEDLESS OF OUR PEOPLES ASPIRATIONS FOR PEACE."
Acting on President Arroyos directive, respondent Ebdane issued the assailed Guidelines quoted as
follows:
160

"TO : All Concerned
FROM : Chief, PNP
SUBJECT : Guidelines in the Implementation of the Ban on the Carrying of Firearms Outside of
Residence.
DATE : January 31, 2003
1. Reference: PD 1866 dated June 29, 1983 and its Implementing Rules and Regulations.
2. General:
The possession and carrying of firearms outside of residence is a privilege granted by the
State to its citizens for their individual protection against all threats of lawlessness and security.
As a rule, persons who are lawful holders of firearms (regular license, special permit, certificate
of registration or MR) are prohibited from carrying their firearms outside of residence.
However, the Chief, Philippine National Police may, in meritorious cases as determined by him
and under conditions as he may impose, authorize such person or persons to carry firearms
outside of residence.
3. Purposes:
This Memorandum prescribes the guidelines in the implementation of the ban on the carrying
of firearms outside of residence as provided for in the Implementing Rules and Regulations,
Presidential Decree No. 1866, dated June 29, 1983 and as directed by PGMA. It also
prescribes the conditions, requirements and procedures under which exemption from the ban
may be granted.
4. Specific Instructions on the Ban on the Carrying of Firearms:
a. All PTCFOR are hereby revoked. Authorized holders of licensed firearms covered
with valid PTCFOR may re-apply for a new PTCFOR in accordance with the conditions
hereinafter prescribed.
b. All holders of licensed or government firearms are hereby prohibited from carrying
their firearms outside their residence except those covered with mission/letter orders
and duty detail orders issued by competent authority pursuant to Section 5, IRR, PD
1866, provided, that the said exception shall pertain only to organic and regular
employees.
5. The following persons may be authorized to carry firearms outside of residence.
a. All persons whose application for a new PTCFOR has been approved, provided, that
the persons and security of those so authorized are under actual threat, or by the
nature of their position, occupation and profession are under imminent danger.
b. All organic and regular employees with Mission/Letter Orders granted by their
respective agencies so authorized pursuant to Section 5, IRR, PD 1866, provided, that
such Mission/Letter Orders is valid only for the duration of the official mission which in no
case shall be more than ten (10) days.
161

c. All guards covered with Duty Detail Orders granted by their respective security
agencies so authorized pursuant to Section 4, IRR, PD 1866, provided, that such DDO
shall in no case exceed 24-hour duration. d. Members of duly recognized Gun Clubs
issued Permit to Transport (PTT) by the PNP for purposes of practice and competition,
provided, that such firearms while in transit must not be loaded with ammunition and
secured in an appropriate box or case detached from the person. e. Authorized
members of the Diplomatic Corps. 6. Requirements for issuance of new PTCFOR: a.
Written request by the applicant addressed to Chief, PNP stating his qualification to
possess firearm and the reasons why he needs to carry firearm outside of residence. b.
Xerox copy of current firearm license duly authenticated by Records Branch, FED; c.
Proof of actual threat, the details of which should be issued by the Chief of
Police/Provincial or City Directors and duly validated by C, RIID; d. Copy of Drug Test
Clearance, duly authenticated by the Drug Testing Center, if photocopied; e. Copy of
DI/ RIID clearance, duly authenticated by ODI/RIID, if photocopied; f. Copy of Neuro-
Psychiatric Clearance duly authenticated by NP Testing Center, if photocopied; g.
Copy of Certificate of Attendance to a Gun Safety Seminar, duly validated by Chief,
Operations Branch, FED; h. NBI Clearance; i. Two (2) ID pictures (2" x 2") taken not
earlier than one (1) year from date of filing of application; and j. Proof of Payment
7. Procedures: a. Applications may be filed directly to the Office of the PTCFOR Secretariat in
Camp Crame. In the provinces, the applications may also be submitted to the Police
Regional Offices (PROs) and Provincial/City Police Offices (P/CPOs) for initial processing
before they are forwarded to the office of the PTCFOR Secretariat. The processors, after
ascertaining that the documentary requirements are in order, shall issue the Order of
Payment (OP) indicating the amount of fees payable by the applicant, who in turn shall pay
the fees to the Land Bank. b. Applications, which are duly processed and prepared in
accordance with existing rules and regulations, shall be forwarded to the OCPNP for
approval. c. Upon approval of the application, OCPNP will issue PTCFOR valid for one (1) year
from date of issue. d. Applications for renewal of PTCFOR shall be processed in accordance
with the provisions of par. 6 above. e. Application for possession and carrying of firearms by
diplomats in the Philippines shall be processed in accordance with NHQ PNP Memo dated
September 25, 2000, with Subj: Possession and Carrying of Firearms by Diplomats in the
Philippines. 8. Restrictions in the Carrying of Firearms: a. The firearm must not be displayed or
exposed to public view, except those authorized in uniform and in the performance of their
official duties. b. The firearm shall not be brought inside public drinking and amusement
places, and all other commercial or public establishments."
Petitioner Francisco I. Chavez, a licensed gun owner to whom a PTCFOR has been issued, requested
the Department of Interior and Local Government (DILG) to reconsider the implementation of the
assailed Guidelines. However, his request was denied. Thus, he filed the present petition impleading
public respondents Ebdane, as Chief of PNP; Alberto G. Romulo, as Executive Secretary; and Gerry
L. Barias, as Chief of the PNP-Firearms and Explosives Division. He anchored his petition on the
following grounds:
"I
THE PRESIDENT HAS NO POWER OR AUTHORITY MUCH LESS BY A MERE SPEECH TO ALTER,
MODIFY OR AMEND THE LAW ON FIREARMS BY IMPOSING A GUN BAN AND CANCELING
EXISTING PERMITS FOR GUNS TO BE CARRIED OUTSIDE RESIDENCES.
II
162

OFFICIALLY, THERE IS NO PRESIDENTIAL ISSUANCE ON THE GUN BAN; THE PRESIDENTIAL SPEECH
NEVER INVOKED POLICE POWER TO JUSTIFY THE GUN BAN; THE PRESIDENTS VERBAL
DECLARATION ON GUN BAN VIOLATED THE PEOPLES RIGHT TO PROTECT LIFE AND THEIR
PROPERTY RIGHT TO CARRY FIREARMS.
III
THE PNP CHIEF HAS NO POWER OR AUTHORITY TO ISSUE THE QUESTIONED GUIDELINES BECAUSE:
1) THERE IS NO LAW, STATUTE OR EXECUTIVE ORDER WHICH GRANTS THE PNP CHIEF THE
AUTHORITY TO PROMULGATE THE PNP GUIDELINES.
2) THE IMPLEMENTING RULES AND REGULATIONS OF PD 1866 CANNOT BE THE SUBJECT
OF ANOTHER SET OF IMPLEMENTING GUIDELINES.
3) THE PRESIDENTS SPEECH CANNOT BE A BASIS FOR THE PROMULGATION OF
IMPLEMENTNG GUIDELINES ON THE GUN BAN.
IV
ASSUMING ARGUENDO, THAT THE PNP GUIDELINES IMPLEMENT PD 1866, AND THE
AMENDMENTS THERETO, THE PNP CHIEF STILL HAS NO POWER OR AUTHORITY TO ISSUE THE SAME
BECAUSE
1) PER SEC 6, RA 8294, WHICH AMENDS PD 1866, THE IRR SHALL BE PROMULGATED
JOINTLY BY THE DOJ AND THE DILG.
2) SEC. 8, PD 1866 STATES THAT THE IRR SHALL BE PROMULGATED BY THE CHIEF OF THE
PHILIPPINE CONSTABULARY.
V
THE PNP GUIDELINES VIOLATE THE DUE PROCESS CLAUSE OF THE CONSTITUTION BECAUSE:
1) THE RIGHT TO OWN AND CARRY A FIREARM IS NECESSARILY INTERTWINED WITH THE
PEOPLES INHERENT RIGHT TO LIFE AND TO PROTECT LIFE. THUS, THE PNP GUIDELINES
DEPRIVE PETITIONER OF THIS RIGHT WITHOUT DUE PROCESS OF LAW FOR:
A) THE PNP GUIDELINES DEPRIVE PETITIONER OF HIS MOST POTENT, IF NOT HIS
ONLY, MEANS TO DEFEND HIMSELF.
B) THE QUESTIONED GUIDELINES STRIPPED PETITIONER OF HIS MEANS OF
PROTECTION AGAINST CRIME DESPITE THE FACT THAT THE STATE COULD NOT
POSSIBLY PROTECT ITS CITIZENS DUE TO THE INADEQUACY AND INEFFICIENCY OF
THE POLICE FORCE.
2) THE OWNESHIP AND CARRYING OF FIREARMS ARE CONSTITUTIONALLY PROTECTED
PROPERTY RIGHTS WHICH CANNOT BE TAKEN AWAY WITHOUT DUE PROCESS OF LAW
AND WITHOUT JUST CAUSE.
VI
163

ASSUMING ARGUENDO, THAT THE PNP GUIDELINES WERE ISSUED IN THE EXERCISE OF
POLICE POWER, THE SAME IS AN INVALID EXERCISE THEREOF SINCE THE MEANS USED
THEREFOR ARE UNREASONABLE AND UNNCESSARY FOR THE ACCOMPLISHMENT OF ITS
PURPOSE TO DETER AND PREVENT CRIME THEREBY BECOMING UNDULY OPPRESSIVE
TO LAW-ABIDING GUN-OWNERS.
VII
THE PNP GUIDELINES ARE UNJUST, OPPRESSIVE AND CONFISCATORY SINCE IT REVOKED ALL
EXISTING PERMITS TO CARRY WITHOUT, HOWEVER, REFUNDING THE PAYMENT THE PNP RECEIVED
FROM THOSE WHO ALREADY PAID THEREFOR.
VIII
THE PNP GUIDELINES VIOLATE THE EQUAL PROTECTION CLAUSE OF THE CONSTITUTION BECAUSE
THEY ARE DIRECTED AT AND OPPRESSIVE ONLY TO LAW-ABIDING GUN OWNERS WHILE LEAVING
OTHER GUN-OWNERS THE LAWBREAKERS (KIDNAPPERS, ROBBERS, HOLD-UPPERS, MNLF, MILF,
ABU SAYYAF COLLECTIVELY, AND NPA) UNTOUCHED.
IX
THE PNP GUIDELINES ARE UNJUST, OPPRESSIVE AND UNFAIR BECAUSE THEY WERE IMPLEMENTED
LONG BEFORE THEY WERE PUBLISHED.
X
THE PNP GUIDELINES ARE EFFECTIVELY AN EX POST FACTO LAW SINCE THEY APPLY
RETROACTIVELY AND PUNISH ALL THOSE WHO WERE ALREADY GRANTED PERMITS TO CARRY
OUTSIDE OF RESIDENCE LONG BEFORE THEIR PROMULGATION."
Petitioners submissions may be synthesized into five (5) major issues:
First, whether respondent Ebdane is authorized to issue the assailed Guidelines;
Second, whether the citizens right to bear arms is a constitutional right?;
Third, whether the revocation of petitioners PTCFOR pursuant to the assailed Guidelines is a
violation of his right to property?;
Fourth, whether the issuance of the assailed Guidelines is a valid exercise of police power?;
and
Fifth, whether the assailed Guidelines constitute an ex post facto law?
The Solicitor General seeks the dismissal of the petition pursuant to the doctrine of hierarchy of
courts. Nonetheless, in refutation of petitioners arguments, he contends that: (1) the PNP Chief is
authorized to issue the assailed Guidelines; (2) petitioner does not have a constitutional right to own
and carry firearms; (3) the assailed Guidelines do not violate the due process clause of the
Constitution; and (4) the assailed Guidelines do not constitute an ex post facto law.
Initially, we must resolve the procedural barrier.
164

On the alleged breach of the doctrine of hierarchy of courts, suffice it to say that the doctrine is not
an iron-clad dictum. In several instances where this Court was confronted with cases of national
interest and of serious implications, it never hesitated to set aside the rule and proceed with the
judicial determination of the cases.
3
The case at bar is of similar import as it involves the citizens right
to bear arms.
I
Authority of the PNP Chief
Relying on the principle of separation of powers, petitioner argues that only Congress can withhold
his right to bear arms. In revoking all existing PTCFOR, President Arroyo and respondent Ebdane
transgressed the settled principle and arrogated upon themselves a power they do not possess the
legislative power.
We are not persuaded.
It is true that under our constitutional system, the powers of government are distributed among three
coordinate and substantially independent departments: the legislative, the executive and the
judiciary. Each has exclusive cognizance of the matters within its jurisdiction and is supreme within its
own sphere.
4

Pertinently, the power to make laws the legislative power is vested in Congress.
5
Congress may
not escape its duties and responsibilities by delegating that power to any other body or authority.
Any attempt to abdicate the power is unconstitutional and void, on the principle that "delegata
potestas non potest delegari" "delegated power may not be delegated."
6

The rule which forbids the delegation of legislative power, however, is not absolute and inflexible. It
admits of exceptions. An exception sanctioned by immemorial practice permits the legislative body
to delegate its licensing power to certain persons, municipal corporations, towns, boards, councils,
commissions, commissioners, auditors, bureaus and directors.
7
Such licensing power includes the
power to promulgate necessary rules and regulations.
8

The evolution of our laws on firearms shows that since the early days of our Republic, the legislatures
tendency was always towards the delegation of power. Act No. 1780,
9
delegated upon the
Governor-General (now the President) the authority (1) to approve or disapprove applications of
any person for a license to deal in firearms or to possess the same for personal protection, hunting
and other lawful purposes; and (2) to revoke such license any time.
10
Further, it authorized him to
issue regulations which he may deem necessary for the proper enforcement of the Act.
11
With the
enactment of Act No. 2711, the "Revised Administrative Code of 1917," the laws on firearms were
integrated.
12
The Act retained the authority of the Governor General provided in Act No. 1780.
Subsequently, the growing complexity in the Office of the Governor-General resulted in the
delegation of his authority to the Chief of the Constabulary. On January 21, 1919, Acting Governor-
General Charles E. Yeater issued Executive Order No. 8
13
authorizing and directing the Chief of
Constabulary to act on his behalf in approving and disapproving applications for personal, special
and hunting licenses. This was followed by Executive Order No. 61
14
designating the Philippine
Constabulary (PC) as the government custodian of all firearms, ammunitions and explosives.
Executive Order No. 215,
15
issued by President Diosdado Macapagal on December 3, 1965, granted
the Chief of the Constabulary, not only the authority to approve or disapprove applications for
personal, special and hunting license, but also the authority to revoke the same. With the foregoing
developments, it is accurate to say that the Chief of the Constabulary had exercised the authority
for a long time. In fact, subsequent issuances such as Sections 2 and 3 of the Implementing Rules
and Regulations of Presidential Decree No. 1866
16
perpetuate such authority of the Chief of the
165

Constabulary. Section 2 specifically provides that any person or entity desiring to possess any firearm
"shall first secure the necessary permit/license/authority from the Chief of the Constabulary." With
regard to the issuance of PTCFOR, Section 3 imparts: "The Chief of Constabulary may, in meritorious
cases as determined by him and under such conditions as he may impose, authorize lawful holders
of firearms to carry them outside of residence." These provisions are issued pursuant to the general
power granted by P.D. No. 1866 empowering him to promulgate rules and regulations for the
effective implementation of the decree.
17
At this juncture, it bears emphasis that P.D. No. 1866 is the
chief law governing possession of firearms in the Philippines and that it was issued by President
Ferdinand E. Marcos in the exercise of his legislative power.
18
In an attempt to evade the application
of the above-mentioned laws and regulations, petitioner argues that the "Chief of the PNP" is not the
same as the "Chief of the Constabulary," the PC being a mere unit or component of the newly
established PNP. He contends further that Republic Act No. 8294
19
amended P.D. No. 1866 such that
the authority to issue rules and regulations regarding firearms is now jointly vested in the Department
of Justice and the DILG, not the Chief of the Constabulary.
20

Petitioners submission is bereft of merit.
By virtue of Republic Act No. 6975,
21
the Philippine National Police (PNP) absorbed the Philippine
Constabulary (PC). Consequently, the PNP Chief succeeded the Chief of the Constabulary and,
therefore, assumed the latters licensing authority. Section 24 thereof specifies, as one of PNPs
powers, the issuance of licenses for the possession of firearms and explosives in accordance with
law.
22
This is in conjunction with the PNP Chiefs "power to issue detailed implementing policies and
instructions" on such "matters as may be necessary to effectively carry out the functions, powers and
duties" of the PNP.
23

Contrary to petitioners contention, R.A. No. 8294 does not divest the Chief of the Constabulary (now
the PNP Chief) of his authority to promulgate rules and regulations for the effective implementation
of P.D. No. 1866. For one, R.A. No. 8294 did not repeal entirely P.D. No. 1866. It merely provides for
the reduction of penalties for illegal possession of firearms. Thus, the provision of P.D. No. 1866
granting to the Chief of the Constabulary the authority to issue rules and regulations regarding
firearms remains effective. Correspondingly, the Implementing Rules and Regulations dated
September 15, 1997 jointly issued by the Department of Justice and the DILG pursuant to Section 6 of
R.A. No. 8294 deal only with the automatic review, by the Director of the Bureau of Corrections or
the Warden of a provincial or city jail, of the records of convicts for violations of P.D. No. 1866. The
Rules seek to give effect to the beneficent provisions of R.A. No. 8294, thereby ensuring the early
release and reintegration of the convicts into the community.
Clearly, both P.D. No. 1866 and R.A. No. 6975 authorize the PNP Chief to issue the assailed guidelines.
Corollarily, petitioner disputes President Arroyos declaration of a nationwide gun ban, arguing that
"she has no authority to alter, modify, or amend the law on firearms through a mere speech."
First, it must be emphasized that President Arroyos speech was just an expression of her policy and a
directive to her subordinate. It cannot, therefore, be argued that President Arroyo enacted a law
through a mere speech.
Second, at the apex of the entire executive officialdom is the President. Section 17, Article VII of the
Constitution specifies his power as Chief Executive, thus: "The President shall have control of all the
executive departments, bureaus and offices. He shall ensure that the laws be faithfully executed." As
Chief Executive, President Arroyo holds the steering wheel that controls the course of her
government. She lays down policies in the execution of her plans and programs. Whatever policy
she chooses, she has her subordinates to implement them. In short, she has the power of
control. Whenever a specific function is entrusted by law or regulation to her subordinate, she may
166

act directly or merely direct the performance of a duty.
24
Thus, when President Arroyo directed
respondent Ebdane to suspend the issuance of PTCFOR, she was just directing a subordinate to
perform an assigned duty. Such act is well within the prerogative of her office.
II
Right to bear arms: Constitutional or Statutory?
Petitioner earnestly contends that his right to bear arms is a constitutionally-protected right. This, he
mainly anchors on various American authorities. We therefore find it imperative to determine the
nature of the right in light of American jurisprudence.
The bearing of arms is a tradition deeply rooted in the English and American society. It antedates
not only the American Constitution but also the discovery of firearms.
25

A provision commonly invoked by the American people to justify their possession of firearms is the
Second Amendment of the Constitution of the United States of America, which reads:
"A well regulated militia, being necessary for the security of free state, the right of the people to
keep and bear Arms, shall not be infringed."
An examination of the historical background of the foregoing provision shows that it pertains to the
citizens "collective right" to take arms in defense of the State, not to the citizens "individual right" to
own and possess arms. The setting under which the right was contemplated has a profound
connection with the keeping and maintenance of a militia or an armed citizenry. That this is how the
right was construed is evident in early American cases.
The first case involving the interpretation of the Second Amendment that reached the United States
Supreme Court is United States vs. Miller.
26
Here, the indictment charged the defendants with
transporting an unregistered "Stevens shotgun" without the required stamped written order, contrary
to the National Firearms Act. The defendants filed a demurrer challenging the facial validity of the
indictment on the ground that the National Firearms Act offends the inhibition of the Second
Amendment. The District Court sustained the demurrer and quashed the indictment. On appeal, the
Supreme Court interpreted the right to bear arms under the Second Amendment as referring to the
collective right of those comprising the Militia a body of citizens enrolled for military discipline. It
does not pertain to the individual right of citizen to bear arm. Miller expresses its holding as follows:
"In the absence of any evidence tending to show that possession or use of a shotgun having
a barrel of less than eighteen inches in length at this time has some reasonable relationship
to the preservation or efficiency of a well regulated militia, we cannot say that the Second
Amendment guarantees the right to keep and bear such an instrument. Certainly it is not
within judicial notice that this weapon is any part of the ordinary military equipment or that its
use could contribute to the common defense.
The same doctrine was re-echoed in Cases vs. United States.
27
Here, the Circuit Court of Appeals
held that theFederal Firearms Act, as applied to appellant, does not conflict with the Second
Amendment. It ruled that:
"While [appellants] weapon may be capable of military use, or while at least familiarity with it
might be regarded as of value in training a person to use a comparable weapon of military
type and caliber, still there is no evidence that the appellant was or ever had been a
member of any military organization or that his use of the weapon under the circumstances
disclosed was in preparation for a military career. In fact, the only inference possible is that
167

the appellant at the time charged in the indictment was in possession of, transporting, and
using the firearm and ammunition purely and simply on a frolic of his own and without any
thought or intention of contributing to the efficiency of the well regulated militia which the
Second amendment was designed to foster as necessary to the security of a free state."
With the foregoing jurisprudence, it is erroneous to assume that the US Constitution grants upon the
American people the right to bear arms. In a more explicit language, the United States vs.
Cruikshank
28
decreed: "The right of the people to keep and bear arms is not a right granted by the
Constitution. Neither is it in any way dependent upon that instrument." Likewise, in People vs.
Persce,
29
the Court of Appeals said: "Neither is there any constitutional provision securing the right to
bear arms which prohibits legislation with reference to such weapons as are specifically before us for
consideration. The provision in the Constitution of the United States that the right of the people to
keep and bear arms shall not be infringed is not designed to control legislation by the state."
With more reason, the right to bear arms cannot be classified as fundamental under the 1987
Philippine Constitution. Our Constitution contains no provision similar to the Second Amendment, as
we aptly observed in the early case of United States vs. Villareal:
30

"The only contention of counsel which would appear to necessitate comment is the claim
that the statute penalizing the carrying of concealed weapons and prohibiting the keeping
and the use of firearms without a license, is in violation of the provisions of section 5 of the
Philippine Bill of Rights.
Counsel does not expressly rely upon the prohibition in the United States Constitution against
the infringement of the right of the people of the United States to keep and bear arms (U. S.
Constitution, amendment 2), which is not included in the Philippine Bill. But it may be well, in
passing, to point out that in no event could this constitutional guaranty have any bearing on
the case at bar, not only because it has not been expressly extended to the Philippine
Islands, but also because it has been uniformly held that both this and similar provisions in
State constitutions apply only to arms used in civilized warfare (see cases cited in 40 Cyc.,
853, note 18); x x x."
Evidently, possession of firearms by the citizens in the Philippines is the exception, not the rule. The
right to bear arms is a mere statutory privilege, not a constitutional right. It is a mere statutory
creation. What then are the laws that grant such right to the Filipinos? The first real firearm law is Act
No. 1780 enacted by the Philippine Commission on October 12, 1907. It was passed to regulate the
importation, acquisition, possession, use and transfer of firearms. Section 9 thereof provides:
"SECTION 9. Any person desiring to possess one or more firearms for personal protection, or for
use in hunting or other lawful purposes only, and ammunition therefor, shall make application
for a license to possess such firearm or firearms or ammunition as hereinafter provided. Upon
making such application, and before receiving the license, the applicant shall make a cash
deposit in the postal savings bank in the sum of one hundred pesos for each firearm for which
the license is to be issued, or in lieu thereof he may give a bond in such form as the Governor-
General may prescribe, payable to the Government of the Philippine Islands, in the sum of
two hundred pesos for each such firearm: PROVIDED, HOWEVER, That persons who are
actually members of gun clubs, duly formed and organized at the time of the passage of this
Act, who at such time have a license to possess firearms, shall not be required to make the
deposit or give the bond prescribed by this section, and the bond duly executed by such
person in accordance with existing law shall continue to be security for the safekeeping of
such arms."
168

The foregoing provision was restated in Section 887
31
of Act No. 2711 that integrated the firearm
laws. Thereafter, President Ferdinand E. Marcos issued P.D. No. 1866. It codified the laws on illegal
possession, manufacture, dealing in, acquisition of firearms, ammunitions or explosives and imposed
stiffer penalties for their violation. R.A. No. 8294 amended some of the provisions of P.D. No. 1866 by
reducing the imposable penalties. Being a mere statutory creation, the right to bear arms cannot be
considered an inalienable or absolute right.
III
Vested Property Right
Section 1, Article III of the Constitution provides that "no person shall be deprived of life, liberty or
property without due process of law." Petitioner invokes this provision, asserting that the revocation
of his PTCFOR pursuant to the assailed Guidelines deprived him of his "vested property right" without
due process of law and in violation of the equal protection of law.
Petitioner cannot find solace to the above-quoted Constitutional provision.
In evaluating a due process claim, the first and foremost consideration must be whether life, liberty
or property interest exists.
32
The bulk of jurisprudence is that a license authorizing a person to enjoy a
certain privilege is neither a property nor property right. In Tan vs. The Director of Forestry,
33
we ruled
that "a license is merely a permit or privilege to do what otherwise would be unlawful, and is not a
contract between the authority granting it and the person to whom it is granted; neither is it
property or a property right, nor does it create a vested right." In a more emphatic pronouncement,
we held in Oposa vs. Factoran, Jr.
34
that:
"Needless to say, all licenses may thus be revoked or rescinded by executive action. It is not
a contract, property or a property right protected by the due process clause of the
Constitution."
Petitioner, in arguing that his PTCFOR is a constitutionally protected property right, relied heavily on
Bell vs. Burson
35
wherein the U.S. Supreme Court ruled that "once a license is issued, continued
possession may become essential in the pursuit of livelihood. Suspension of issued licenses thus
involves state action that adjudicates important interest of the licensees."
Petitioners reliance on Bell is misplaced. This case involves a drivers license, not a license to bear
arms. The catena of American jurisprudence involving license to bear arms is perfectly in accord
with our ruling that a PTCFOR is neither a property nor a property right. In Erdelyi vs. OBrien,
36
the
plaintiff who was denied a license to carry a firearm brought suit against the defendant who was
the Chief of Police of the City of Manhattan Beach, on the ground that the denial violated her
constitutional rights to due process and equal protection of the laws. The United States Court of
Appeals Ninth Circuit ruled that Erdelyi did not have a property interest in obtaining a license to
carry a firearm, ratiocinating as follows:
"Property interests protected by the Due Process Clause of the Fourteenth Amendment do not arise
whenever a person has only an abstract need or desire for, or unilateral expectation of a benefit.
x x x Rather, they arise from legitimate claims of entitlement defined by existing rules or
understanding that stem from an independent source, such as state law. x x x Concealed weapons
are closely regulated by the State of California. x x x Whether the statute creates a property interest
in concealed weapons licenses depends largely upon the extent to which the statute contains
mandatory language that restricts the discretion of the [issuing authority] to deny licenses to
applicants who claim to meet the minimum eligibility requirements. x x x Where state law gives the
issuing authority broad discretion to grant or deny license application in a closely regulated field,
169

initial applicants do not have a property right in such licenses protected by the Fourteenth
Amendment. See Jacobson, supra, 627 F.2d at 180 (gaming license under Nevada law);"
Similar doctrine was announced in Potts vs. City of Philadelphia,
37
Conway vs. King,
38
Nichols vs.
County of Sta. Clara,
39
and Gross vs. Norton.
40
These cases enunciated that the test whether the
statute creates a property right or interest depends largely on the extent of discretion granted to the
issuing authority.
In our jurisdiction, the PNP Chief is granted broad discretion in the issuance of PTCFOR. This is evident
from the tenor of the Implementing Rules and Regulations of P.D. No. 1866 which state that "the
Chief of Constabulary may, in meritorious cases as determined by him and under such conditions as
he may impose, authorize lawful holders of firearms to carry them outside of residence." Following
the American doctrine, it is indeed logical to say that a PTCFOR does not constitute a property right
protected under our Constitution.
Consequently, a PTCFOR, just like ordinary licenses in other regulated fields, may be revoked any
time. It does not confer an absolute right, but only a personal privilege to be exercised under
existing restrictions, and such as may thereafter be reasonably imposed.
41
A licensee takes his
license subject to such conditions as the Legislature sees fit to impose, and one of the statutory
conditions of this license is that it might be revoked by the selectmen at their pleasure. Such a
license is not a contract, and a revocation of it does not deprive the defendant of any property,
immunity, or privilege within the meaning of these words in the Declaration of Rights.
42
The US
Supreme Court, in Doyle vs. Continental Ins. Co,
43
held: "The correlative power to revoke or recall a
permission is a necessary consequence of the main power. A mere license by the State is always
revocable."
The foregoing jurisprudence has been resonating in the Philippines as early as 1908. Thus, in The
Government of the Philippine Islands vs. Amechazurra
44
we ruled:
"x x x no private person is bound to keep arms. Whether he does or not is entirely optional with
himself, but if, for his own convenience or pleasure, he desires to possess arms, he must do so
upon such terms as the Government sees fit to impose, for the right to keep and bear arms is
not secured to him by law. The Government can impose upon him such terms as it pleases. If
he is not satisfied with the terms imposed, he should decline to accept them, but, if for the
purpose of securing possession of the arms he does agree to such conditions, he must fulfill
them."
IV
Police Power
At any rate, assuming that petitioners PTCFOR constitutes a property right protected by the
Constitution, the same cannot be considered as absolute as to be placed beyond the reach of the
States police power. All property in the state is held subject to its general regulations, necessary to
the common good and general welfare.
In a number of cases, we laid down the test to determine the validity of a police measure, thus:
(1) The interests of the public generally, as distinguished from those of a particular class,
require the exercise of the police power; and
(2) The means employed are reasonably necessary for the accomplishment of the purpose
and not unduly oppressive upon individuals.
170

Deeper reflection will reveal that the test merely reiterates the essence of the constitutional
guarantees of substantive due process, equal protection, and non-impairment of property rights.
It is apparent from the assailed Guidelines that the basis for its issuance was the need for peace and
order in the society. Owing to the proliferation of crimes, particularly those committed by the New
Peoples Army (NPA), which tends to disturb the peace of the community, President Arroyo deemed
it best to impose a nationwide gun ban. Undeniably, the motivating factor in the issuance of the
assailed Guidelines is the interest of the public in general.
The only question that can then arise is whether the means employed are appropriate and
reasonably necessary for the accomplishment of the purpose and are not unduly oppressive. In the
instant case, the assailed Guidelines do not entirely prohibit possession of firearms. What they
proscribe is merely the carrying of firearms outside of residence. However, those who wish to carry
their firearms outside of their residences may re-apply for a new PTCFOR. This we believe is a
reasonable regulation. If the carrying of firearms is regulated, necessarily, crime incidents will be
curtailed. Criminals carry their weapon to hunt for their victims; they do not wait in the comfort of
their homes. With the revocation of all PTCFOR, it would be difficult for criminals to roam around with
their guns. On the other hand, it would be easier for the PNP to apprehend them.
Notably, laws regulating the acquisition or possession of guns have frequently been upheld as
reasonable exercise of the police power.
45
In State vs. Reams,
46
it was held that the legislature may
regulate the right to bear arms in a manner conducive to the public peace. With the promotion of
public peace as its objective and the revocation of all PTCFOR as the means, we are convinced
that the issuance of the assailed Guidelines constitutes a reasonable exercise of police power. The
ruling in United States vs. Villareal,
47
is relevant, thus:
"We think there can be no question as to the reasonableness of a statutory regulation
prohibiting the carrying of concealed weapons as a police measure well calculated to
restrict the too frequent resort to such weapons in moments of anger and excitement. We do
not doubt that the strict enforcement of such a regulation would tend to increase the security
of life and limb, and to suppress crime and lawlessness, in any community wherein the
practice of carrying concealed weapons prevails, and this without being unduly oppressive
upon the individual owners of these weapons. It follows that its enactment by the legislature is
a proper and legitimate exercise of the police power of the state."
V
Ex post facto law
In Mekin vs. Wolfe,
48
an ex post facto law has been defined as one (a) which makes an action
done before the passing of the law and which was innocent when done criminal, and punishes such
action; or (b) which aggravates a crime or makes it greater than it was when committed; or (c)
which changes the punishment and inflicts a greater punishment than the law annexed to the crime
when it was committed; or (d) which alters the legal rules of evidence and receives less or different
testimony than the law required at the time of the commission of the offense in order to convict the
defendant.
We see no reason to devote much discussion on the matter. Ex post facto law prohibits
retrospectivity of penal laws.
49
The assailed Guidelines cannot be considered as an ex post facto
law because it is prospective in its application. Contrary to petitioners argument, it would not result
in the punishment of acts previously committed.
WHEREFORE, the petition is hereby DISMISSED.
171

SO ORDERED
BUREAU OF FISHERIES AND AQUATIC
RESOURCES (BFAR) EMPLOYEES UNION,
REGIONAL OFFICE NO. VII, CEBU CITY,
Petitioner,
- versus -
COMMISSION ON AUDIT,
Respondent.
G.R. No. 169815


August 13, 2008

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
D E C I S I O N
PUNO, C.J.:
On appeal are the Decision
[1]
dated April 8, 2005 of respondent Commission on Audit (COA)
in LAO-N-2005-119 upholding the disallowance by the COA Legal and Adjudication Office (COA-
LAO), Regional Office No. VII, Cebu City of the P10,000.00 Food Basket Allowance granted by BFAR
to each of its employees in 1999, and COA Resolution
[2]
dated August 5, 2005, denying petitioners
motion for reconsideration of said Decision.
First, the facts:
On October 18, 1999, petitioner Bureau of Fisheries and Aquatic Resources (BFAR) Employees
Union, Regional Office No. VII, Cebu Cityissued Resolution No. 01, series of 1999 requesting the BFAR
Central Office for a Food Basket Allowance. It justified its request on the high cost of living, i.e., the
increase in prices of petroleum products which catapulted the cost of food commodities, has
greatly affected the economic conditions and living standard of the government employees of
BFAR Region VII and could hardly sustain its need to cope up with the four (4) basic needs, i.e., food,
shelter, clothing and education.
[3]
It also relied on the Employees Suggestions and Incentive
Awards System (ESIAS), pursuant to Book V of Executive Order No. 292, or the Administrative Code of
1987, and approved by the Civil Service Commission on December 3, 1996. The ESIAS includes the
granting of incentives that will help employees overcome present economic difficulties, boost their
morale, and further commitment and dedication to public service.
[4]
Regional Director Corazon M.
Corrales of BFAR Region VII indorsed the Resolution, and Malcolm I. Sarmiento, Jr., Director of BFAR
recommended its approval. Honorable Cesar M. Drilon, Jr., Undersecretary for Fisheries and
Livestock of the Department of Agriculture, approved the request for Authority to Grant a Gift
Check or the Food Basket Allowance at the rate of P10,000.00 each to the 130 employees of BFAR
Region VII, or in the total amount of P1,322,682.00.
[5]
On the strength of the approval, Regional
Director Corrales released the allowance to the BFAR employees.
On post audit, the Commission on Audit Legal and Adjudication Office (COA-LAO) Regional
Office No. VII, Cebu City disallowed the grant of Food Basket Allowance under Notice of
Disallowance No. 2003-022-101 (1999) dated September 19, 2003. It ruled that the allowance had
no legal basis and that it violated: a) Sec. 15(d) of the General Appropriations Act of 1999,
prohibiting the payment of honoraria, allowances, or other forms of compensation to any
government official or employee, except those specifically authorized by law; b) par. 4.5 of Budget
Circular No. 16 dated November 28, 1998, prohibiting the grant of food, rice, gift checks, or any
other form of incentives/allowances, except those authorized via Administrative Order by the Office
172

of the President; and c) Sec. 12 of Republic Act (R.A.) No. 6758, or the Salary Standardization Law of
1989, which includes all allowances in the standardized salary rates, subject to certain exceptions.
On February 26, 2004, BFAR Regional Office No. VII, through Regional Director Corrales,
moved for reconsideration and prayed for the lifting of the disallowance. It argued that the grant of
Food Basket Allowance would enhance the welfare and productivity of the employees. Further, it
contended that the approval by the Honorable Drilon, Undersecretary for Fisheries and Livestock, of
the said benefit was the law itself which vested the specific authority for its release. The Commission
on Audit Legal and Adjudication Office (COA-LAO) Regional Office No. VII, Cebu Citydenied the
motion.
Petitioner appealed to the Commission on Audit Legal and Adjudication Office (COA-LAO)
National, Quezon City. The appeal was denied in a Decision dated April 8, 2005. Petitioners motion
for reconsideration was likewise denied in a Resolution dated August 5, 2005.
Hence, this appeal.
Petitioner cites the following grounds for its appeal:
1. The disallowance in question is unconstitutional as it contravenes the fundamental
principle of the State enshrined under Sections 9 and 10, Article II of the 1987 Constitution,
which provide as follows:
SEC. 9. The State shall promote a just and dynamic social order that will ensure the
prosperity and independence of the nation and free the people from poverty through
policies that provide adequate social services, promote full employment, a rising
standard of living, and an improved quality of life for all.
SEC. 10. The State shall promote social justice in all phases of national development.
[6]

2. The Undersecretary for Fisheries and Livestock is an extension of the Secretary of
Agriculture who is an alter-ego of the President. His approval was tantamount to the
authority from the Office of the President, as contemplated in DBM Budget Circular No. 16,
dated November 28, 1998.
[7]

3. The grant of the Food Basket Allowance is in conformity with Sec. 12 of the Salary
Standardization Law.
[8]


We deny the petition.
First, we rule on the issue of constitutionality. Petitioner invokes the provisions of the 1987
Constitution on social justice to warrant the grant of the Food Basket Allowance. Time and again,
we have ruled that the social justice provisions of the Constitution are not self-executing principles
ready for enforcement through the courts. They are merely statements of principles and policies. To
give them effect, legislative enactment is required. As we held in Kilosbayan, Incorporated v.
Morato,
[9]
the principles and state policies enumerated in Article II and some sections of Article XII
are "not self-executing provisions, the disregard of which can give rise to a cause of action in the
courts. They do not embody judicially enforceable constitutional rights but guidelines for
legislation."
[10]

Second, petitioner contends that the approval of the Department of Agriculture (DA)
Undersecretary for Fisheries and Livestock of the Food Basket Allowance is the law which authorizes
its release. It is crystal clear that the DA Undersecretary has no authority to grant any allowance to
the employees of BFAR. Section 4.5 of Budget Circular No. 16 dated November 28, 1998 states:
173

All agencies are hereby prohibited from granting any food, rice, gift checks, or any
other form of incentives/allowances except those authorized via Administrative Order by the
Office of the President.
In the instant case, no Administrative Order has been issued by the Office of the President to
exempt BFAR from the express prohibition against the grant of any food, rice, gift checks, or any
other form of incentive/allowance to its employees.
Petitioner argues that the grant of the Food Basket Allowance does not violate Sec. 12 of R.A.
No. 6758 or the Salary Standardization Law. This law was passed to standardize salary rates among
government personnel and do away with multiple allowances and other incentive packages and
the resulting differences in compensation among them.
[11]
Sec. 12 of the law provides:
Consolidation of Allowances and Compensation. All allowances, except for
representation and transportation allowances; clothing and laundry allowances; subsistence
allowance of marine officers and crew on board government vessels and hospital personnel;
hazard pay; allowances of foreign service personnel stationed abroad; and such other
additional compensation not otherwise specified herein as may be determined by the DBM
[Department of Budget and Management], shall be deemed included in the standardized
salary rates herein prescribed. Such other additional compensation, whether in cash or in
kind, being received by incumbents only as of July 1, 1989 not integrated into the
standardized salary rates shall continue to be authorized.
Existing additional compensation of any national government official or employee
paid from local funds of a local government unit shall be absorbed into the basic salary of
said official or employee and shall be paid by the National Government.
Under Sec. 12, as quoted, all kinds of allowances are integrated in the standardized salary
rates. The exceptions are:
1. representation and transportation allowance (RATA);
2. clothing and laundry allowance;
3. subsistence allowance of marine officers and crew on board government vessels;
4. subsistence allowance of hospital personnel;
5. hazard pay;
6. allowances of foreign service personnel stationed abroad; and
7. such other additional compensation not otherwise specified herein as may be
determined by the DBM.
Petitioner contends that the Food Basket Allowance falls under the 7
th
category above, that of
other additional compensation not otherwise specified herein as may be determined by the
DBM.
The Court has had the occasion to interpret Sec. 12 of R.A. No. 6758. In National Tobacco
Administration v. Commission on Audit,
[12]
we held that under the first sentence of Section 12, the
benefits excluded from the standardized salary rates are the "allowances" or those which are usually
granted to officials and employees of the government to defray or reimburse the expenses incurred
in the performance of their official functions. These are the RATA, clothing and laundry allowance,
subsistence allowance of marine officers and crew on board government vessels and hospital
174

personnel, hazard pay, and others, as enumerated in the first sentence of Section 12. We further
ruled that the phrase "and such other additional compensation not otherwise specified herein as
may be determined by the DBM" is a catch-all proviso for benefits in the nature of allowances similar
to those enumerated. In Philippine Ports Authority v. Commission on Audit,
[13]
we explained that if
these allowances were consolidated with the standardized salary rates, then government officials or
employees would be compelled to spend their personal funds in attending to their duties.
In the instant case, the Food Basket Allowance is definitely not in the nature of an allowance
to reimburse expenses incurred by officials and employees of the government in the performance of
their official functions. It is not payment in consideration of the fulfillment of official duty. It is a form
of financial assistance to all officials and employees of BFAR. Petitioner itself stated that the Food
Basket Allowance has the purpose of alleviating the economic condition of BFAR employees.
Next, petitioner relies on National Compensation Circular No. 59 dated September 30, 1989,
issued by the DBM, which is the List of Allowances/Additional Compensation of Government
Officials and Employees which shall be Deemed Integrated into the Basic Salary. The list
enumerates the following allowances/additional compensation which shall be incorporated in the
basic salary, hence, may no longer be granted to government employees:
1. Cost of Living Allowance (COLA);
2. Inflation connected allowance;
3. Living Allowance;
4. Emergency Allowance;
5. Additional Compensation of Public Health Nurses assigned to public health nursing;
6. Additional Compensation of Rural Health Physicians;
7. Additional Compensation of Nurses in Malacaang Clinic;
8. Nurses Allowance in the Air Transportation Office;
9. Assignment Allowance of School Superintendents;
10. Post allowance of Postal Service Office employees;
11. Honoraria/allowances which are regularly given except the following:
a. those for teaching overload;
b. in lieu of overtime pay;
c. for employees on detail with task forces/special projects;
d. researchers, experts and specialists who are acknowledged authorities in their field
of specialization;
e. lecturers and resource persons;
f. Municipal Treasurers deputized by the Bureau of Internal Revenue to collect and
remit internal revenue collections; and
g. Executive positions in State Universities and Colleges filled by designation from
among their faculty members.
12. Subsistence Allowance of employees except those authorized under EO [Executive
Order] No. 346 and uniformed personnel of the Armed Forces of thePhilippines and
Integrated National Police;
13. Laundry Allowance of employees except those hospital/sanitaria personnel who
attend directly to patients and who by the nature of their duties are required to wear
175

uniforms, prison guards and uniformed personnel of the Armed Forces of the Philippines
and Integrated National Police; and
14. Incentive allowance/fee/pay except those authorized under the General
Appropriations Act and Section 33 of P.D. No. 807.
Petitioner invokes the rule of statutory construction that what is not included is
excluded. Inclusio unius est exclusio alterius. Petitioner claims that the Food Basket Allowance is
distinct and separate from the specific allowances/additional compensation listed in the circular.
Again, we reject petitioners contention. The Food Basket Allowance falls under the
14
th
category, that of incentive allowance/fee/pay. Petitioner itself justified the Food Basket
Allowance as an incentive to the employees to encourage them to be more productive and
efficient.
[14]
Under National Compensation Circular No. 59, exceptions to the incentive
allowance/fee/pay category are those authorized under the General Appropriations Act (GAA)
and Section 33 of Presidential Decree (P.D.) No. 807. Sec. 15(d) of the GAA for Fiscal Year 1999 or
R.A. No. 8745 clearly prohibits the payment of honoraria, allowances or other forms of compensation
to any government official or employee, except those specifically authorized by law. There is no law
authorizing the grant of the subject Food Basket Allowance. Further, Sec. 33 of P.D. No. 807 or
theCivil Service Decree of the Philippines does not exempt the Food Basket Allowance from the
general rule. Sec. 33 states:
Section 33. Employee Suggestions and Incentive Award System. There shall be
established a government-wide employee suggestions and incentive awards system which
shall be administered under such rules, regulations, and standards as may be promulgated by
the Commission.
In accordance with rules, regulations, and standards promulgated by the Commission,
the President or the head of each department or agency is authorized to incur whatever
necessary expenses involved in the honorary recognition of subordinate officers and
employees of the government who by their suggestions, inventions, superior accomplishment,
and other personal efforts contribute to the efficiency, economy, or other improvement of
government operations, or who perform such other extraordinary acts or services in the public
interest in connection with, or in relation to, their official employment.
We are not convinced that the Food Basket Allowance falls under the incentive award
system contemplated above. The decree speaks ofsuggestions, inventions, superior
accomplishments, and other personal efforts contributed by an employee to the efficiency,
economy, or other improvement of government operations, or other extraordinary acts or services
performed by an employee in the public interest in connection with, or in relation to, his official
employment. In the instant case, the Food Basket Allowance was granted to all BFAR employees,
without distinction. It was not granted due to any extraordinary contribution or exceptional
accomplishment by an employee. The Food Basket Allowance was primarily an economic
monetary assistance to the employees.
Lastly, we note, as the Office of the Solicitor General, on behalf of respondent did, that
petitioner failed to exhaust its administrative remedies. It stopped seeking remedies at the level of
respondents Legal and Adjudication Office. It failed to appeal the latters adverse decision to the
Commission on Audit proper. The consequence for failure to exhaust administrative remedies is
clear: the disallowance, as ruled by the Commission on Audit Legal and Adjudication
Office Regional Office No. VII, Cebu City and upheld by the Commission on Audit Legal and
Adjudication Office National, Quezon City, became final and executory. Sections 48 and 51 of
Presidential Decree No. 1445, or the Government Auditing Code of the Philippines provide:
176

Section 48. Appeal from decision of auditors. Any person aggrieved by the decision
of an auditor of any government agency in the settlement of an account or claim may,
within six months from receipt of a copy of the decision, appeal in writing to the Commission.
Section 51. Finality of decisions of the Commission or any auditor. A decision of the
Commission or of any auditor upon any matter within its or his jurisdiction, if not appealed as
herein provided, shall be final and executory.
IN VIEW WHEREOF, the petition is DENIED. The Decision and Resolution of the Commission on
Audit Legal and Adjudication Office dated April 8, 2005 and August 5, 2005, respectively, in LAO-N-
2005-119, are AFFIRMED.
SO ORDERED.

177

G.R. No. 161872 April 13, 2004
REV. ELLY CHAVEZ PAMATONG, ESQUIRE, petitioner,
vs.
COMMISSION ON ELECTIONS, respondent.
RESOLUTION
TINGA, J.:
Petitioner Rev. Elly Velez Pamatong filed his Certificate of Candidacy for President on December 17,
2003. Respondent Commission on Elections (COMELEC) refused to give due course to
petitioners Certificate of Candidacy in its Resolution No. 6558 dated January 17, 2004. The decision,
however, was not unanimous since Commissioners Luzviminda G. Tancangco and Mehol K. Sadain
voted to include petitioner as they believed he had parties or movements to back up his
candidacy.
On January 15, 2004, petitioner moved for reconsideration of Resolution No. 6558. Petitioners Motion
for Reconsideration was docketed as SPP (MP) No. 04-001. The COMELEC, acting on
petitioners Motion for Reconsideration and on similar motions filed by other aspirants for national
elective positions, denied the same under the aegis of Omnibus Resolution No. 6604 dated February
11, 2004. The COMELEC declared petitioner and thirty-five (35) others nuisance candidates who
could not wage a nationwide campaign and/or are not nominated by a political party or are not
supported by a registered political party with a national constituency. Commissioner Sadain
maintained his vote for petitioner. By then, Commissioner Tancangco had retired.
In this Petition For Writ of Certiorari, petitioner seeks to reverse the resolutions which were allegedly
rendered in violation of his right to "equal access to opportunities for public service" under Section
26, Article II of the 1987
Constitution,
1
by limiting the number of qualified candidates only to those who can afford to wage a
nationwide campaign and/or are nominated by political parties. In so doing, petitioner argues that
the COMELEC indirectly amended the constitutional provisions on the electoral process and limited
the power of the sovereign people to choose their leaders. The COMELEC supposedly erred in
disqualifying him since he is the most qualified among all the presidential candidates, i.e., he
possesses all the constitutional and legal qualifications for the office of the president, he is capable
of waging a national campaign since he has numerous national organizations under his leadership,
he also has the capacity to wage an international campaign since he has practiced law in other
countries, and he has a platform of government. Petitioner likewise attacks the validity of the form
for theCertificate of Candidacy prepared by the COMELEC. Petitioner claims that the form does not
provide clear and reasonable guidelines for determining the qualifications of candidates since it
does not ask for the candidates bio-data and his program of government.
First, the constitutional and legal dimensions involved.
Implicit in the petitioners invocation of the constitutional provision ensuring "equal access to
opportunities for public office" is the claim that there is a constitutional right to run for or hold public
office and, particularly in his case, to seek the presidency. There is none. What is recognized is
merely a privilege subject to limitations imposed by law. Section 26, Article II of the Constitution
neither bestows such a right nor elevates the privilege to the level of an enforceable right. There is
nothing in the plain language of the provision which suggests such a thrust or justifies an
interpretation of the sort.
178

The "equal access" provision is a subsumed part of Article II of the Constitution, entitled "Declaration
of Principles and State Policies." The provisions under the Article are generally considered not self-
executing,
2
and there is no plausible reason for according a different treatment to the "equal
access" provision. Like the rest of the policies enumerated in Article II, the provision does not contain
any judicially enforceable constitutional right but merely specifies a guideline for legislative or
executive action.
3
The disregard of the provision does not give rise to any cause of action before the
courts.
4

An inquiry into the intent of the framers
5
produces the same determination that the provision is not
self-executory. The original wording of the present Section 26, Article II had read, "The State shall
broaden opportunities to public office and prohibit public dynasties."
6
Commissioner (now Chief
Justice) Hilario Davide, Jr. successfully brought forth an amendment that changed the word
"broaden" to the phrase "ensure equal access," and the substitution of the word "office" to "service."
He explained his proposal in this wise:
I changed the word "broaden" to "ENSURE EQUAL ACCESS TO" because what is important
would be equal access to the opportunity. If you broaden, it would necessarily mean that the
government would be mandated to create as many offices as are possible to accommodate
as many people as are also possible. That is the meaning of broadening opportunities to
public service. So, in order that we should not mandate the State to make the government the
number one employer and to limit offices only to what may be necessary and expedient yet
offering equal opportunities to access to it, I change the word "broaden."
7
(emphasis
supplied)
Obviously, the provision is not intended to compel the State to enact positive measures that would
accommodate as many people as possible into public office. The approval of the "Davide
amendment" indicates the design of the framers to cast the provision as simply enunciatory of a
desired policy objective and not reflective of the imposition of a clear State burden.
Moreover, the provision as written leaves much to be desired if it is to be regarded as the source of
positive rights. It is difficult to interpret the clause as operative in the absence of legislation since its
effective means and reach are not properly defined. Broadly written, the myriad of claims that can
be subsumed under this rubric appear to be entirely open-ended.
8
Words and phrases such as
"equal access," "opportunities," and "public service" are susceptible to countless interpretations
owing to their inherent impreciseness. Certainly, it was not the intention of the framers to inflict on the
people an operative but amorphous foundation from which innately unenforceable rights may be
sourced.
As earlier noted, the privilege of equal access to opportunities to public office may be subjected to
limitations. Some valid limitations specifically on the privilege to seek elective office are found in the
provisions
9
of the Omnibus Election Code on "Nuisance Candidates" and COMELEC Resolution No.
6452
10
dated December 10, 2002 outlining the instances wherein the COMELEC may motu
proprio refuse to give due course to or cancel aCertificate of Candidacy.
As long as the limitations apply to everybody equally without discrimination, however, the equal
access clause is not violated. Equality is not sacrificed as long as the burdens engendered by the
limitations are meant to be borne by any one who is minded to file a certificate of candidacy. In the
case at bar, there is no showing that any person is exempt from the limitations or the burdens which
they create.
Significantly, petitioner does not challenge the constitutionality or validity of Section 69 of the
Omnibus Election Code and COMELEC Resolution No. 6452 dated 10 December 2003. Thus, their
presumed validity stands and has to be accorded due weight.
179

Clearly, therefore, petitioners reliance on the equal access clause in Section 26, Article II of the
Constitution is misplaced.
The rationale behind the prohibition against nuisance candidates and the disqualification of
candidates who have not evinced a bona fide intention to run for office is easy to divine. The State
has a compelling interest to ensure that its electoral exercises are rational, objective, and orderly.
Towards this end, the State takes into account the practical considerations in conducting elections.
Inevitably, the greater the number of candidates, the greater the opportunities for logistical
confusion, not to mention the increased allocation of time and resources in preparation for the
election. These practical difficulties should, of course, never exempt the State from the conduct of a
mandated electoral exercise. At the same time, remedial actions should be available to alleviate
these logistical hardships, whenever necessary and proper. Ultimately, a disorderly election is not
merely a textbook example of inefficiency, but a rot that erodes faith in our democratic institutions.
As the United States Supreme Court held:
[T]here is surely an important state interest in requiring some preliminary showing of a
significant modicum of support before printing the name of a political organization and its
candidates on the ballot the interest, if no other, in avoiding confusion, deception and even
frustration of the democratic [process].
11

The COMELEC itself recognized these practical considerations when it promulgated Resolution No.
6558 on 17 January 2004, adopting the study Memorandum of its Law Department dated 11 January
2004. As observed in the COMELECs Comment:
There is a need to limit the number of candidates especially in the case of candidates for
national positions because the election process becomes a mockery even if those who
cannot clearly wage a national campaign are allowed to run. Their names would have to be
printed in the Certified List of Candidates, Voters Information Sheet and the Official Ballots.
These would entail additional costs to the government. For the official ballots in automated
counting and canvassing of votes, an additional page would amount to more or less FOUR
HUNDRED FIFTY MILLION PESOS (P450,000,000.00).
xxx[I]t serves no practical purpose to allow those candidates to continue if they cannot wage
a decent campaign enough to project the prospect of winning, no matter how slim.
12

The preparation of ballots is but one aspect that would be affected by allowance of "nuisance
candidates" to run in the elections. Our election laws provide various entitlements for candidates for
public office, such as watchers in every polling place,
13
watchers in the board of canvassers,
14
or
even the receipt of electoral contributions.
15
Moreover, there are election rules and regulations the
formulations of which are dependent on the number of candidates in a given election.
Given these considerations, the ignominious nature of a nuisance candidacy becomes even more
galling. The organization of an election with bona fide candidates standing is onerous enough. To
add into the mix candidates with no serious intentions or capabilities to run a viable campaign
would actually impair the electoral process. This is not to mention the candidacies which are
palpably ridiculous so as to constitute a one-note joke. The poll body would be bogged by irrelevant
minutiae covering every step of the electoral process, most probably posed at the instance of these
nuisance candidates. It would be a senseless sacrifice on the part of the State.
Owing to the superior interest in ensuring a credible and orderly election, the State could exclude
nuisance candidates and need not indulge in, as the song goes, "their trips to the moon on
gossamer wings."
180

The Omnibus Election Code and COMELEC Resolution No. 6452 are cognizant of the compelling
State interest to ensure orderly and credible elections by excising impediments thereto, such as
nuisance candidacies that distract and detract from the larger purpose. The COMELEC is mandated
by the Constitution with the administration of elections
16
and endowed with considerable latitude in
adopting means and methods that will ensure the promotion of free, orderly and honest
elections.
17
Moreover, the Constitution guarantees that only bona fide candidates for public office
shall be free from any form of harassment and discrimination.
18
The determination of bona
fidecandidates is governed by the statutes, and the concept, to our mind is, satisfactorily defined in
the Omnibus Election Code.
Now, the needed factual premises.
However valid the law and the COMELEC issuance involved are, their proper application in the case
of the petitioner cannot be tested and reviewed by this Court on the basis of what is now before it.
The assailed resolutions of the COMELEC do not direct the Court to the evidence which it
considered in determining that petitioner was a nuisance candidate. This precludes the Court from
reviewing at this instance whether the COMELEC committed grave abuse of discretion in
disqualifying petitioner, since such a review would necessarily take into account the matters which
the COMELEC considered in arriving at its decisions.
Petitioner has submitted to this Court mere photocopies of various documents purportedly evincing
his credentials as an eligible candidate for the presidency. Yet this Court, not being a trier of facts,
can not properly pass upon the reproductions as evidence at this level. Neither the COMELEC nor
the Solicitor General appended any document to their respective Comments.
The question of whether a candidate is a nuisance candidate or not is both legal and factual. The
basis of the factual determination is not before this Court. Thus, the remand of this case for the
reception of further evidence is in order.
A word of caution is in order. What is at stake is petitioners aspiration and offer to serve in the
government. It deserves not a cursory treatment but a hearing which conforms to the requirements
of due process.
As to petitioners attacks on the validity of the form for the certificate of candidacy, suffice it to say
that the form strictly complies with Section 74 of the Omnibus Election Code. This provision
specifically enumerates what a certificate of candidacy should contain, with the required
information tending to show that the candidate possesses the minimum qualifications for the
position aspired for as established by the Constitution and other election laws.
IN VIEW OF THE FOREGOING, COMELEC Case No. SPP (MP) No. 04-001 is hereby remanded to the
COMELEC for the reception of further evidence, to determine the question on whether petitioner Elly
Velez Lao Pamatong is a nuisance candidate as contemplated in Section 69 of the Omnibus
Election Code.
The COMELEC is directed to hold and complete the reception of evidence and report its findings to
this Court with deliberate dispatch.
SO ORDERED.

181

G.R. No. 110526 February 10, 1998
ASSOCIATION OF PHILIPPINE COCONUT DESICCATORS, petitioner,
vs.
PHILIPPINE COCONUT AUTHORITY, respondent.
MENDOZA, J.:
At issue in this case is the validity of a resolution, dated March 24, 1993, of the Philippine Coconut
Authority in which it declares that it will no longer require those wishing to engage in coconut
processing to apply to it for a license or permit as a condition for engaging in such business.
Petitioner Association of Philippine Coconut Desiccators (hereafter referred to as APCD) brought this
suit forcertiorari and mandamus against respondent Philippine Coconut Authority (PCA) to
invalidate the latter's Board Resolution No. 018-93 and the certificates of registration issued under it
on the ground that the resolution in question is beyond the power of the PCA to adopt, and to
compel said administrative agency to comply instead with the mandatory provisions of statutes
regulating the desiccated coconut industry, in particular, and the coconut industry, in general.
As disclosed by the parties' pleadings, the facts are as follows:
On November 5, 1992, seven desiccated coconut processing companies belonging to the APCD
brought suit in the Regional Trial Court, National Capital Judicial Region in Makati, Metro Manila, to
enjoin the PCA from issuing permits to certain applicants for the establishment of new desiccated
coconut processing plants. Petitioner alleged that the issuance of licenses to the applicants would
violate PCA's Administrative Order No. 02, series of 1991, as the applicants were seeking permits to
operate in areas considered "congested" under the administrative order.
1

On November 6, 1992, the trial court issued a temporary restraining order and, on November 25,
1992, a writ of preliminary injunction, enjoining the PCA from processing and issuing licenses to
Primex Products, Inc., Coco Manila, Superstar (Candelaria) and Superstar (Davao) upon the posting
of a bond in the amount of P100,000.00.
2

Subsequently and while the case was pending in the Regional Trial Court, the Governing Board of
the PCA issued on March 24, 1993 Resolution No. 018-93, providing for the withdrawal of the
Philippine Coconut Authority from all regulation of the coconut product processing industry. While it
continues the registration of coconut product processors, the registration would be limited to the
"monitoring" of their volumes of production and administration of quality standards. The full text of
the resolution reads:
RESOLUTION NO. 018-93
POLICY DECLARATION DEREGULATING
THE ESTABLISHMENT OF NEW COCONUT
PROCESSING PLANTS
WHEREAS, it is the policy of the State to promote free enterprise unhampered by protective
regulations and unnecessary bureaucratic red tapes;
WHEREAS, the deregulation of certain sectors of the coconut industry, such as marketing of
coconut oils pursuant to Presidential Decree No. 1960, the lifting of export and commodity
clearances under Executive Order No. 1016, and relaxation of regulated capacity for the
desiccated coconut sector pursuant to Presidential Memorandum of February 11, 1988, has
become a centerpiece of the present dispensation;
182

WHEREAS, the issuance of permits or licenses prior to business operation is a form of regulation
which is not provided in the charter of nor included among the powers of the PCA;
WHEREAS, the Governing Board of PCA has determined to follow and further support the
deregulation policy and effort of the government to promote free enterprise;
NOW THEREFORE, BE IT RESOLVED AS IT IS HEREBY RESOLVED, that, henceforth, PCA shall no
longer require any coconut oil mill, coconut oil refinery, coconut desiccator, coconut
product processor/factory, coconut fiber plant or any similar coconut processing plant to
apply with PCA and the latter shall no longer issue any form of license or permit as condition
prior to establishment or operation of such mills or plants;
RESOLVED, FURTHER, that the PCA shall limit itself only to simply registering the aforementioned
coconut product processors for the purpose of monitoring their volumes of production,
administration of quality standards with the corresponding service fees/charges.
ADOPTED this 24th day of March 1993, at Quezon City.
3

The PCA then proceeded to issue "certificates of registration" to those wishing to operate
desiccated coconut processing plants, prompting petitioner to appeal to the Office of the President
of the Philippines on April 26, 1993 not to approve the resolution in question. Despite follow-up letters
sent on May 25 and June 2, 1993, petitioner received no reply from the Office of the President. The
"certificates of registration" issued in the meantime by the PCA has enabled a number of new
coconut mills to operate. Hence this petition.
Petitioner alleges:
I
RESPONDENT PCA'S BOARD RESOLUTION NO. 018-93 IS NULL AND VOID FOR BEING AN UNDUE
EXERCISE OF LEGISLATIVE POWER BY AN ADMINISTRATIVE BODY.
II
ASIDE FROM BEING ULTRA-VIRES, BOARD RESOLUTION NO. 018-93 IS WITHOUT ANY BASIS,
ARBITRARY, UNREASONABLE AND THEREFORE IN VIOLATION OF SUBSTANTIVE DUE PROCESS OF
LAW.
III
IN PASSING BOARD RESOLUTION NO. 018-93, RESPONDENT PCA VIOLATED THE PROCEDURAL
DUE PROCESS REQUIREMENT OF CONSULTATION PROVIDED IN PRESIDENTIAL DECREE NO. 1644,
EXECUTIVE ORDER NO. 826 AND PCA ADMINISTRATIVE ORDER NO. 002, SERIES OF 1991.
On the other hand, in addition to answering petitioner's arguments, respondent PCA alleges that this
petition should be denied on the ground that petitioner has a pending appeal before the Office of
the President. Respondent accuses petitioner of forum-shopping in filing this petition and of failing to
exhaust available administrative remedies before coming to this Court. Respondent anchors its
argument on the general rule that one who brings an action under Rule 65 must show that one has
no appeal nor any plain, speedy, and adequate remedy in the ordinary course of law.
I.
183

The rule of requiring exhaustion of administrative remedies before a party may seek judicial review,
so strenuously urged by the Solicitor General on behalf of respondent, has obviously no application
here. The resolution in question was issued by the PCA in the exercise of its rule-making or legislative
power. However, only judicial review of decisions of administrative agencies made in the exercise of
their quasi-judicial function is subject to the exhaustion doctrine. The exhaustion doctrine stands as a
bar to an action which is not yet complete
4
and it is clear, in the case at bar, that after its
promulgation the resolution of the PCA abandoning regulation of the desiccated coconut industry
became effective. To be sure, the PCA is under the direct supervision of the President of the
Philippines but there is nothing in P.D. No. 232, P.D. No. 961, P.D. No. 1468 and P.D. No. 1644 defining
the powers and functions of the PCA which requires rules and regulations issued by it to be
approved by the President before they become effective.
In any event, although the APCD has appealed the resolution in question to the Office of the
President, considering the fact that two months after they had sent their first letter on April 26, 1993
they still had to hear from the President's office, meanwhile respondent PCA was issuing certificates
of registration indiscriminately to new coconut millers, we hold that petitioner was justified in filing this
case on June 25, 1993.
5
Indeed, after writing the Office of the President on April 26, 1993
6
petitioner
sent inquiries to that office not once, but twice, on May 26, 1993
7
and on June 2, 1993,
8
but
petitioner did not receive any reply.
II.
We now turn to the merit of the present petition. The Philippine Coconut Authority was originally
created by P.D. 232 on June 30, 1973, to take over the powers and functions of the Coconut
Coordinating Council, the Philippine Coconut Administration and the Philippine Coconut Research
Institute. On June 11, 1978, by P.D. No. 1468, it was made "an independent public corporation . . .
directly reporting to, and supervised by, the President of the Philippines,"
9
and charged with carrying
out the State's policy "to promote the rapid integrated development and growth of the coconut
and other palm oil industry in all its aspects and to ensure that the coconut farmers become direct
participants in, and beneficiaries of, such development and growth."
10
through a regulatory scheme
set up by law.
11

Through this scheme, the government, on August 28, 1982, temporarily prohibited the opening of
new coconut processing plants and, four months later, phased out some of the existing ones in view
of overproduction in the coconut industry which resulted in cut-throat competition, underselling and
smuggling of poor quality products and ultimately in the decline of the export performance of
coconut-based commodities. The establishment of new plants could be authorized only upon
determination by the PCA of the existence of certain economic conditions and the approval of the
President of the Philippines. Thus, Executive Order No. 826, dated August 28, 1982, provided:
Sec. 1. Prohibition. Except as herein provided, no government agency or instrumentality
shall hereafter authorize, approve or grant any permit or license for the establishment or
operation of new desiccated coconut processing plants, including the importation of
machinery or equipment for the purpose. In the event of a need to establish a new plant, or
expand the capacity, relocate or upgrade the efficiencies of any existing desiccated plant,
the Philippine Coconut Authority may, upon proper determination of such need and
evaluation of the condition relating to:
a. the existing market demand;
b. the production capacity prevailing in the country or locality;
c. the level and flow of raw materials; and
184

d. other circumstances which may affect the growth or viability of the industry concerned,
authorize or grant the application for, the establishment or expansion of capacity, relocation
or upgrading of efficiencies of such desiccated coconut processing plant, subject to the
approval of the President.
On December 6, 1982, a phase-out of some of the existing plants was ordered by the government
after finding that "a mere freeze in the present capacity of existing plants will not afford a viable
solution to the problem considering that the total available limited market is not adequate to
support all the existing processing plants, making it imperative to reduce the number of existing
processing plants."
12
Accordingly, it was ordered:
13

Sec. 1. The Philippine Coconut Authority is hereby ordered to take such action as may be
necessary to reduce the number of existing desiccated coconut processing plants to a level
which will insure the survival of the remaining plants. The Authority is hereby directed to
determine which of the existing processing plants should be phased out and to enter into
appropriate contracts with such plants for the above purpose.
It was only on October 23, 1987 when the PCA adopted Resolution No. 058-87, authorizing the
establishment and operation of additional DCN plants, in view of the increased demand for
desiccated coconut products in the world's markets, particularly in Germany, the Netherlands and
Australia. Even then, the opening of new plants was made subject to "such implementing guidelines
to be set forth by the Authority" and "subject to the final approval of the President."
The guidelines promulgated by the PCA, as embodied in Administrative Order No. 002, series of
1991, inter aliaauthorized the opening of new plants in "non-congested areas only as declared by
the PCA" and subject to compliance by applicants with "all procedures and requirements for
registration under Administrative Order No. 003, series of 1981 and this Order." In addition, as the
opening of new plants was premised on the increased global demand for desiccated coconut
products, the new entrants were required to submit sworn statements of the names and addresses
of prospective foreign buyers.
This form of "deregulation" was approved by President Aquino in her memorandum, dated February
11, 1988, to the PCA. Affirming the regulatory scheme, the President stated in her memorandum:
It appears that pursuant to Executive Order No. 826 providing measures for the protection of
the Desiccated Coconut Industry, the Philippine Coconut Authority evaluated the conditions
relating to: (a) the existing market demands; (b) the production capacity prevailing in the
country or locality; (c) the level and flow of raw materials; and (d) other circumstances which
may affect the growth or viability of the industry concerned and that the result of such
evaluation favored the expansion of production and market of desiccated coconut
products.
In view hereof and the favorable recommendation of the Secretary of Agriculture, the
deregulation of the Desiccated Coconut Industry as recommended in Resolution No. 058-87
adopted by the PCA Governing Board on October 28, 1987 (sic) is hereby approved.
14

These measures the restriction in 1982 on entry into the field, the reduction the same year of the
number of the existing coconut mills and then the lifting of the restrictions in 1987 were adopted
within the framework of regulation as established by law "to promote the rapid integrated
development and growth of the coconut and other palm oil industry in all its aspects and to ensure
that the coconut farmers become direct participants in, and beneficiaries of, such development
and growth."
15
Contrary to the assertion in the dissent, the power given to the Philippine Coconut
185

Authority and before it to the Philippine Coconut Administration "to formulate and adopt a
general program of development for the coconut and other palm oils industry"
16
is not a roving
commission to adopt any program deemed necessary to promote the development of the coconut
and other palm oils industry, but one to be exercised in the context of this regulatory structure.
In plain disregard of this legislative purpose, the PCA adopted on March 24, 1993 the questioned
resolution which allows not only the indiscriminate opening of new coconut processing plants but
the virtual dismantling of the regulatory infrastructure whereby, forsaking controls theretofore placed
in its keeping, the PCA limits its function to the innocuous one of "monitoring" compliance by
coconut millers with quality standards and volumes of production. In effect, the PCA would simply
be compiling statistical data on these matters, but in case of violations of standards there would be
nothing much it would do. The field would be left without an umpire who would retire to the
bleachers to become a mere spectator. As the PCA provided in its Resolution No. 018-93:
NOW, THEREFORE, BE IT RESOLVED AS IT IS HEREBY RESOLVED, that, henceforth, PCA shall no
longer require any coconut oil mill, coconut oil refinery, coconut desiccator, coconut
product processor/factory, coconut fiber plant or any similar coconut processing plant to
apply with PCA and the latter shall no longer issue any form of license or permit as condition
prior to establishment or operation of such mills or plants;
RESOLVED, FURTHER, that the PCA shall limit itself only to simply registering the aforementioned
coconut product processors for the purpose of monitoring their volumes of production,
administration of quality standards with the corresponding service fees/charges.
The issue is not whether the PCA has the power to adopt this resolution to carry out its mandate
under the law "to promote the accelerated growth and development of the coconut and other
palm oil industry."
17
The issue rather is whether it can renounce the power to regulate implicit in the
law creating it for that is what the resolution in question actually is.
Under Art. II, 3(a) of the Revised Coconut Code (P.D. No. 1468), the role of the PCA is "To formulate
and adopt a general program of development for the coconut and other palm oil industry in all its
aspects." By limiting the purpose of registration to merely "monitoring volumes of production [and]
administration of quality standards" of coconut processing plants, the PCA in effect abdicates its role
and leaves it almost completely to market forces how the coconut industry will develop.
Art. II, 3 of P.D. No. 1468 further requires the PCA:
(h) To regulate the marketing and the exportation of copra and its by-products by
establishing standards for domestic trade and export and, thereafter, to conduct an
inspection of all copra and its by-products proposed for export to determine if they conform
to the standards established;
Instead of determining the qualifications of market players and preventing the entry into the field of
those who are unfit, the PCA now relies entirely on competition with all its wastefulness and
inefficiency to do the weeding out, in its naive belief in survival of the fittest. The result can very
well be a repeat of 1982 when free enterprise degenerated into a "free-for-all," resulting in cut-throat
competition, underselling, the production of inferior products and the like, which badly affected the
foreign trade performance of the coconut industry.
Indeed, by repudiating its role in the regulatory scheme, the PCA has put at risk other statutory
provisions, particularly those of P.D. No. 1644, to wit:
186

Sec. 1. The Philippine Coconut Authority shall have full power and authority to regulate the
marketing and export of copra, coconut oil and their by-products, in furtherance of the steps
being taken to rationalize the coconut oil milling industry.
Sec. 2. In the exercise of its powers under Section 1 hereof, the Philippine Coconut Authority
may initiate and implement such measures as may be necessary to attain the rationalization
of the coconut oil milling industry, including, but not limited to, the following measures:
(a) Imposition of floor and/or ceiling prices for all exports of copra, coconut oil and their by-
products;
(b) Prescription of quality standards;
(c) Establishment of maximum quantities for particular periods and particular markets;
(d) Inspection and survey of export shipments through an independent international
superintendent or surveyor.
In the exercise of its powers hereunder, the Philippine Coconut Authority shall consult with,
and be guided by, the recommendation of the coconut farmers, through corporations
owned or controlled by them through the Coconut Industry Investment Fund and the private
corporation authorized to be organized under Letter of Instructions No. 926.
and the Revised Coconut Code (P.D. No. 1468), Art. II, 3, to wit:
(m) Except in respect of entities owned or controlled by the Government or by the coconut
farmers under Sections 9 and 10, Article III hereof, the Authority shall have full power and
authority to regulate the production, distribution and utilization of all subsidized coconut-
based products, and to require the submission of such reports or documents as may be
deemed necessary by the Authority to ascertain whether the levy payments and/or subsidy
claims are due and correct and whether the subsidized products are distributed among, and
utilized by, the consumers authorized by the Authority.
The dissent seems to be saying that in the same way that restrictions on entry into the field were
imposed in 1982 and then relaxed in 1987, they can be totally lifted now without prejudice to
reimposing them in the future should it become necessary to do so. There is really no renunciation of
the power to regulate, it is claimed. Trimming down of PCA's function to registration is not an
abdication of the power to regulate but is regulation itself. But how can this be done when, under
Resolution No. 018-93, the PCA no longer requires a license as condition for the establishment or
operation of a plant? If a number of processing firms go to areas which are already congested, the
PCA cannot stop them from doing so. If there is overproduction, the PCA cannot order a cut back in
their production. This is because the licensing system is the mechanism for regulation. Without it the
PCA will not be able to regulate coconut plants or mills.
In the first "whereas" clause of the questioned resolution as set out above, the PCA invokes a policy
of free enterprise that is "unhampered by protective regulations and unnecessary bureaucratic red
tape" as justification for abolishing the licensing system. There can be no quarrel with the elimination
of "unnecessary red tape." That is within the power of the PCA to do and indeed it should eliminate
red tape. Its success in doing so will be applauded. But free enterprise does not call for removal of
"protective regulations."
Our Constitutions, beginning with the 1935 document, have repudiated laissez-faire as an economic
principle.
18
Although the present Constitution enshrines free enterprise as a policy,
19
it nonetheless
187

reserves to the government the power to intervene whenever necessary to promote the general
welfare. This is clear from the following provisions of Art. XII of the Constitution which, so far as
pertinent, state:
Sec. 6. . . . Individuals and private groups, including corporations, cooperatives, and similar
collective organizations, shall have the right to own, establish, and operate economic
enterprises, subject to the duty of the State to promote distributive justice and to intervene
when the common good so demands.
Sec. 19. The State shall regulate or prohibit monopolies when the public interest so requires.
No combinations in restraint of trade or unfair competition shall be allowed. (Emphasis
added).
At all events, any change in policy must be made by the legislative department of the government.
The regulatory system has been set up by law. It is beyond the power of an administrative agency to
dismantle it. Indeed, petitioner charges the PCA of seeking to render moot a case filed by some of
its members questioning the grant of licenses to certain parties by adopting the resolution in
question. It is alleged that members of petitioner complained to the court that the PCA had
authorized the establishment and operation of new plants in areas which were already crowded, in
violation of its Administrative Order No. 002, series of 1991. In response, the Regional Trial Court issued
a writ of preliminary injunction, enjoining the PCA from issuing licenses to the private respondent in
that case.
These allegations of petitioner have not been denied here. It would thus seem that instead of
defending its decision to allow new entrants into the field against petitioner's claim that the PCA
decision violated the guidelines in Administrative Order No. 002, series of 1991, the PCA adopted the
resolution in question to render the case moot. In so doing, the PCA abdicated its function of
regulation and left the field to untrammeled competition that is likely to resurrect the evils of cut-
throat competition, underselling and overproduction which in 1982 required the temporary closing
of the field to new players in order to save the industry.
The PCA cannot rely on the memorandum of then President Aquino for authority to adopt the
resolution in question. As already stated, what President Aquino approved in 1988 was the
establishment and operation of new DCN plants subject to the guidelines to be drawn by the
PCA.
20
In the first place, she could not have intended to amend the several laws already
mentioned, which set up the regulatory system, by a mere memoranda to the PCA. In the second
place, even if that had been her intention, her act would be without effect considering that, when
she issued the memorandum in question on February 11, 1988, she was no longer vested with
legislative authority.
21

WHEREFORE, the petition is GRANTED. PCA Resolution No. 018-93 and all certificates of registration
issued under it are hereby declared NULL and VOID for having been issued in excess of the power of
the Philippine Coconut Authority to adopt or issue.
SO ORDERED.

188

G.R. No. 173034 October 9, 2007
PHARMACEUTICAL AND HEALTH CARE ASSOCIATION OF THE PHILIPPINES, petitioner,
vs.
HEALTH SECRETARY FRANCISCO T. DUQUE III; HEALTH UNDER SECRETARIES DR. ETHELYN P. NIETO, DR.
MARGARITA M. GALON, ATTY. ALEXANDER A. PADILLA, & DR. JADE F. DEL MUNDO; and ASSISTANT
SECRETARIES DR. MARIO C. VILLAVERDE, DR. DAVID J. LOZADA, AND DR. NEMESIO T.
GAKO,respondents.
D E C I S I O N
AUSTRIA-MARTINEZ, J.:
The Court and all parties involved are in agreement that the best nourishment for an infant is
mother's milk. There is nothing greater than for a mother to nurture her beloved child straight from
her bosom. The ideal is, of course, for each and every Filipino child to enjoy the unequaled benefits
of breastmilk. But how should this end be attained?
Before the Court is a petition for certiorari under Rule 65 of the Rules of Court, seeking to nullify
Administrative Order (A.O.) No. 2006-0012 entitled, Revised Implementing Rules and Regulations of
Executive Order No. 51, Otherwise Known as The "Milk Code," Relevant International Agreements,
Penalizing Violations Thereof, and for Other Purposes (RIRR). Petitioner posits that the RIRR is not valid
as it contains provisions that are not constitutional and go beyond the law it is supposed to
implement.
Named as respondents are the Health Secretary, Undersecretaries, and Assistant Secretaries of the
Department of Health (DOH). For purposes of herein petition, the DOH is deemed impleaded as a
co-respondent since respondents issued the questioned RIRR in their capacity as officials of said
executive agency.
1

Executive Order No. 51 (Milk Code) was issued by President Corazon Aquino on October 28, 1986 by
virtue of the legislative powers granted to the president under the Freedom Constitution. One of the
preambular clauses of the Milk Code states that the law seeks to give effect to Article 11
2
of the
International Code of Marketing of Breastmilk Substitutes (ICMBS), a code adopted by the World
Health Assembly (WHA) in 1981. From 1982 to 2006, the WHA adopted several Resolutions to the
effect that breastfeeding should be supported, promoted and protected, hence, it should be
ensured that nutrition and health claims are not permitted for breastmilk substitutes.
In 1990, the Philippines ratified the International Convention on the Rights of the Child. Article 24 of
said instrument provides that State Parties should take appropriate measures to diminish infant and
child mortality, and ensure that all segments of society, specially parents and children, are informed
of the advantages of breastfeeding.
On May 15, 2006, the DOH issued herein assailed RIRR which was to take effect on July 7, 2006.
However, on June 28, 2006, petitioner, representing its members that are manufacturers of breastmilk
substitutes, filed the present Petition for Certiorari and Prohibition with Prayer for the Issuance of a
Temporary Restraining Order (TRO) or Writ of Preliminary Injunction.
The main issue raised in the petition is whether respondents officers of the DOH acted without or in
excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction,
and in violation of the provisions of the Constitution in promulgating the RIRR.
3

189

On August 15, 2006, the Court issued a Resolution granting a TRO enjoining respondents from
implementing the questioned RIRR.
After the Comment and Reply had been filed, the Court set the case for oral arguments on June 19,
2007. The Court issued an Advisory (Guidance for Oral Arguments) dated June 5, 2007, to wit:
The Court hereby sets the following issues:
1. Whether or not petitioner is a real party-in-interest;
2. Whether Administrative Order No. 2006-0012 or the Revised Implementing Rules and
Regulations (RIRR) issued by the Department of Health (DOH) is not constitutional;
2.1 Whether the RIRR is in accord with the provisions of Executive Order No. 51 (Milk Code);
2.2 Whether pertinent international agreements
1
entered into by the Philippines are part of
the law of the land and may be implemented by the DOH through the RIRR; If in the
affirmative, whether the RIRR is in accord with the international agreements;
2.3 Whether Sections 4, 5(w), 22, 32, 47, and 52 of the RIRR violate the due process clause and
are in restraint of trade; and
2.4 Whether Section 13 of the RIRR on Total Effect provides sufficient standards.
_____________
1 (1) United Nations Convention on the Rights of the Child; (2) the WHO and Unicef "2002
Global Strategy on Infant and Young Child Feeding;" and (3) various World Health Assembly
(WHA) Resolutions.
The parties filed their respective memoranda.
The petition is partly imbued with merit.
On the issue of petitioner's standing
With regard to the issue of whether petitioner may prosecute this case as the real party-in-interest,
the Court adopts the view enunciated in Executive Secretary v. Court of Appeals,
4
to wit:
The modern view is that an association has standing to complain of injuries to its members.
This view fuses the legal identity of an association with that of its members. An association has
standing to file suit for its workers despite its lack of direct interest if its members are affected
by the action. An organization has standing to assert the concerns of its constituents.
x x x x
x x x We note that, under its Articles of Incorporation, the respondent was organized x x x to
act as the representative of any individual, company, entity or association on matters related
to the manpower recruitment industry, and to perform other acts and activities necessary to
accomplish the purposes embodied therein. The respondent is, thus, the appropriate party to
assert the rights of its members, because it and its members are in every practical sense
identical. x x x The respondent [association] is but the medium through which its individual
190

members seek to make more effective the expression of their voices and the redress of their
grievances.
5
(Emphasis supplied)
which was reasserted in Purok Bagong Silang Association, Inc. v. Yuipco,
6
where the Court ruled that
an association has the legal personality to represent its members because the results of the case will
affect their vital interests.
7

Herein petitioner's Amended Articles of Incorporation contains a similar provision just like in Executive
Secretary, that the association is formed "to represent directly or through approved representatives
the pharmaceutical and health care industry before the Philippine Government and any of its
agencies, the medical professions and the general public."
8
Thus, as an organization, petitioner
definitely has an interest in fulfilling its avowed purpose of representing members who are part of the
pharmaceutical and health care industry. Petitioner is duly authorized
9
to take the appropriate
course of action to bring to the attention of government agencies and the courts any grievance
suffered by its members which are directly affected by the RIRR. Petitioner, which is mandated by its
Amended Articles of Incorporation to represent the entire industry, would be remiss in its duties if it
fails to act on governmental action that would affect any of its industry members, no matter how
few or numerous they are. Hence, petitioner, whose legal identity is deemed fused with its members,
should be considered as a real party-in-interest which stands to be benefited or injured by any
judgment in the present action.
On the constitutionality of the provisions of the RIRR
First, the Court will determine if pertinent international instruments adverted to by respondents are
part of the law of the land.
Petitioner assails the RIRR for allegedly going beyond the provisions of the Milk Code, thereby
amending and expanding the coverage of said law. The defense of the DOH is that the RIRR
implements not only the Milk Code but also various international instruments
10
regarding infant and
young child nutrition. It is respondents' position that said international instruments are deemed part
of the law of the land and therefore the DOH may implement them through the RIRR.
The Court notes that the following international instruments invoked by respondents, namely: (1) The
United Nations Convention on the Rights of the Child; (2) The International Covenant on Economic,
Social and Cultural Rights; and (3) the Convention on the Elimination of All Forms of Discrimination
Against Women, only provide in general terms that steps must be taken by State Parties to diminish
infant and child mortality and inform society of the advantages of breastfeeding, ensure the health
and well-being of families, and ensure that women are provided with services and nutrition in
connection with pregnancy and lactation. Said instruments do not contain specific provisions
regarding the use or marketing of breastmilk substitutes.
The international instruments that do have specific provisions regarding breastmilk substitutes are the
ICMBS and various WHA Resolutions.
Under the 1987 Constitution, international law can become part of the sphere of domestic law either
bytransformation or incorporation.
11
The transformation method requires that an international law be
transformed into a domestic law through a constitutional mechanism such as local legislation. The
incorporation method applies when, by mere constitutional declaration, international law is
deemed to have the force of domestic law.
12

Treaties become part of the law of the land through transformation pursuant to Article VII, Section 21
of the Constitution which provides that "[n]o treaty or international agreement shall be valid and
effective unless concurred in by at least two-thirds of all the members of the Senate." Thus, treaties or
191

conventional international law must go through a process prescribed by the Constitution for it to be
transformed into municipal law that can be applied to domestic conflicts.
13

The ICMBS and WHA Resolutions are not treaties as they have not been concurred in by at least two-
thirds of all members of the Senate as required under Section 21, Article VII of the 1987 Constitution.
However, the ICMBS which was adopted by the WHA in 1981 had been transformed into domestic
law through local legislation, the Milk Code. Consequently, it is the Milk Code that has the force and
effect of law in this jurisdiction and not the ICMBS per se.
The Milk Code is almost a verbatim reproduction of the ICMBS, but it is well to emphasize at this point
that the Code did not adopt the provision in the ICMBS absolutely prohibiting advertising or other
forms of promotion to the general public of products within the scope of the ICMBS. Instead, the Milk
Code expressly provides that advertising, promotion, or other marketing materials may be allowed if
such materials are duly authorized and approved by the Inter-Agency Committee (IAC).
On the other hand, Section 2, Article II of the 1987 Constitution, to wit:
SECTION 2. The Philippines renounces war as an instrument of national policy, adopts the
generally accepted principles of international law as part of the law of the land and adheres
to the policy of peace, equality, justice, freedom, cooperation and amity with all nations.
(Emphasis supplied)
embodies the incorporation method.
14

In Mijares v. Ranada,
15
the Court held thus:
[G]enerally accepted principles of international law, by virtue of the incorporation clause of
the Constitution, form part of the laws of the land even if they do not derive from treaty
obligations. The classical formulation in international law sees those customary rules accepted
as binding result from the combination [of] two elements: the established, widespread, and
consistent practice on the part of States; and a psychological element known as the opinion
juris sive necessitates (opinion as to law or necessity). Implicit in the latter element is a belief
that the practice in question is rendered obligatory by the existence of a rule of law requiring
it.
16
(Emphasis supplied)
"Generally accepted principles of international law" refers to norms of general or customary
international law which are binding on all states,
17
i.e., renunciation of war as an instrument of
national policy, the principle of sovereign immunity,
18
a person's right to life, liberty and due
process,
19
and pacta sunt servanda,
20
among others. The concept of "generally accepted principles
of law" has also been depicted in this wise:
Some legal scholars and judges look upon certain "general principles of law" as a primary source of
international law because they have the "character of jus rationale" and are "valid through all kinds
of human societies." (Judge Tanaka in his dissenting opinion in the 1966 South West Africa Case, 1966
I.C.J. 296). O'Connell holds that certain priniciples are part of international law because they are
"basic to legal systems generally" and hence part of the jus gentium. These principles, he believes,
are established by a process of reasoning based on the common identity of all legal systems. If there
should be doubt or disagreement, one must look to state practice and determine whether the
municipal law principle provides a just and acceptable solution. x x x
21
(Emphasis supplied)
Fr. Joaquin G. Bernas defines customary international law as follows:
192

Custom or customary international law means "a general and consistent practice of states
followed by them from a sense of legal obligation [opinio juris]." (Restatement) This statement
contains the two basic elements of custom: the material factor, that is, how states behave,
and the psychological orsubjective factor, that is, why they behave the way they do.
x x x x
The initial factor for determining the existence of custom is the actual behavior of states. This
includes several elements: duration, consistency, and generality of the practice of states.
The required duration can be either short or long. x x x
x x x x
Duration therefore is not the most important element. More important is the consistency and
the generality of the practice. x x x
x x x x
Once the existence of state practice has been established, it becomes necessary to
determine why states behave the way they do. Do states behave the way they do
because they consider it obligatory to behave thus or do they do it only as a matter of
courtesy? Opinio juris, or the belief that a certain form of behavior is obligatory, is what makes
practice an international rule. Without it, practice is not law.
22
(Underscoring and Emphasis
supplied)
Clearly, customary international law is deemed incorporated into our domestic system.
23

WHA Resolutions have not been embodied in any local legislation. Have they attained the status of
customary law and should they then be deemed incorporated as part of the law of the land?
The World Health Organization (WHO) is one of the international specialized agencies allied with the
United Nations (UN) by virtue of Article 57,
24
in relation to Article 63
25
of the UN Charter. Under the
1946 WHO Constitution, it is the WHA which determines the policies of the WHO,
26
and has the power
to adopt regulations concerning "advertising and labeling of biological, pharmaceutical and similar
products moving in international commerce,"
27
and to "make recommendations to members with
respect to any matter within the competence of the Organization."
28
The legal effect of its
regulations, as opposed to recommendations, is quite different.
Regulations, along with conventions and agreements, duly adopted by the WHA bind member
states thus:
Article 19. The Health Assembly shall have authority to adopt conventions or agreements with
respect to any matter within the competence of the Organization. A two-thirds vote of the
Health Assembly shall be required for the adoption of such conventions or agreements,
which shall come into force for each Member when accepted by it in accordance with its
constitutional processes.
Article 20. Each Member undertakes that it will, within eighteen months after the adoption by
the Health Assembly of a convention or agreement, take action relative to the acceptance
of such convention or agreement. Each Member shall notify the Director-General of the
action taken, and if it does not accept such convention or agreement within the time limit, it
will furnish a statement of the reasons for non-acceptance. In case of acceptance, each
193

Member agrees to make an annual report to the Director-General in accordance with
Chapter XIV.
Article 21. The Health Assembly shall have authority to adopt regulations concerning: (a)
sanitary and quarantine requirements and other procedures designed to prevent the
international spread of disease; (b) nomenclatures with respect to diseases, causes of death
and public health practices; (c) standards with respect to diagnostic procedures for
international use; (d) standards with respect to the safety, purity and potency of biological,
pharmaceutical and similar products moving in international commerce; (e) advertising and
labeling of biological, pharmaceutical and similar products moving in international
commerce.
Article 22. Regulations adopted pursuant to Article 21 shall come into force for all
Members after due notice has been given of their adoption by the Health Assembly except
for such Members as may notify the Director-General of rejection or reservations within the
period stated in the notice. (Emphasis supplied)
On the other hand, under Article 23, recommendations of the WHA do not come into force for
members,in the same way that conventions or agreements under Article 19 and regulations under
Article 21 come into force. Article 23 of the WHO Constitution reads:
Article 23. The Health Assembly shall have authority to make recommendations to Members
with respect to any matter within the competence of the Organization. (Emphasis supplied)
The absence of a provision in Article 23 of any mechanism by which the recommendation would
come into force for member states is conspicuous.
The former Senior Legal Officer of WHO, Sami Shubber, stated that WHA recommendations are
generally not binding, but they "carry moral and political weight, as they constitute the judgment on
a health issue of the collective membership of the highest international body in the field of
health."
29
Even the ICMBS itself was adopted as a mere recommendation, as WHA Resolution No.
34.22 states:
"The Thirty-Fourth World Health Assembly x x x adopts, in the sense of Article 23 of the
Constitution, the International Code of Marketing of Breastmilk Substitutes annexed to the
present resolution." (Emphasis supplied)
The Introduction to the ICMBS also reads as follows:
In January 1981, the Executive Board of the World Health Organization at its sixty-seventh
session, considered the fourth draft of the code, endorsed it, and unanimously
recommended to the Thirty-fourth World Health Assembly the text of a resolution by which it
would adopt the code in the form of a recommendation rather than a regulation. x x x
(Emphasis supplied)
The legal value of WHA Resolutions as recommendations is summarized in Article 62 of the WHO
Constitution, to wit:
Art. 62. Each member shall report annually on the action taken with respect to
recommendations made to it by the Organization, and with respect to conventions,
agreements and regulations.
194

Apparently, the WHA Resolution adopting the ICMBS and subsequent WHA Resolutions urging
member states to implement the ICMBS are merely recommendatory and legally non-binding. Thus,
unlike what has been done with the ICMBS whereby the legislature enacted most of the provisions
into law which is the Milk Code, the subsequent WHA Resolutions,
30
specifically providing for
exclusive breastfeeding from 0-6 months, continued breastfeeding up to 24 months, and absolutely
prohibiting advertisements and promotions of breastmilk substitutes, have not been adopted as a
domestic law.
It is propounded that WHA Resolutions may constitute "soft law" or non-binding norms, principles and
practices that influence state behavior.
31

"Soft law" does not fall into any of the categories of international law set forth in Article 38, Chapter III
of the 1946 Statute of the International Court of Justice.
32
It is, however, an expression of non-binding
norms, principles, and practices that influence state behavior.
33
Certain declarations and resolutions
of the UN General Assembly fall under this category.
34
The most notable is the UN Declaration of
Human Rights, which this Court has enforced in various cases, specifically, Government of Hongkong
Special Administrative Region v. Olalia,
35
Mejoff v. Director of Prisons,
36
Mijares v.
Raada
37
and Shangri-la International Hotel Management, Ltd. v. Developers Group of Companies,
Inc..
38

The World Intellectual Property Organization (WIPO), a specialized agency attached to the UN with
the mandate to promote and protect intellectual property worldwide, has resorted to soft law as a
rapid means of norm creation, in order "to reflect and respond to the changing needs and
demands of its constituents."
39
Other international organizations which have resorted to soft law
include the International Labor Organization and the Food and Agriculture Organization (in the form
of the Codex Alimentarius).
40

WHO has resorted to soft law. This was most evident at the time of the Severe Acute Respiratory
Syndrome (SARS) and Avian flu outbreaks.
Although the IHR Resolution does not create new international law binding on WHO member
states, it provides an excellent example of the power of "soft law" in international relations.
International lawyers typically distinguish binding rules of international law-"hard law"-from
non-binding norms, principles, and practices that influence state behavior-"soft law." WHO
has during its existence generated many soft law norms, creating a "soft law regime" in
international governance for public health.
The "soft law" SARS and IHR Resolutions represent significant steps in laying the political
groundwork for improved international cooperation on infectious diseases. These resolutions
clearly define WHO member states' normative duty to cooperate fully with other countries
and with WHO in connection with infectious disease surveillance and response to outbreaks.
This duty is neither binding nor enforceable, but, in the wake of the SARS epidemic, the duty is
powerful politically for two reasons. First, the SARS outbreak has taught the lesson that
participating in, and enhancing, international cooperation on infectious disease controls is in
a country's self-interest x x x if this warning is heeded, the "soft law" in the SARS and IHR
Resolution could inform the development of general and consistent state practice on
infectious disease surveillance and outbreak response, perhaps crystallizing eventually into
customary international law on infectious disease prevention and control.
41

In the Philippines, the executive department implemented certain measures recommended by
WHO to address the outbreaks of SARS and Avian flu by issuing Executive Order (E.O.) No. 201 on
April 26, 2003 and E.O. No. 280 on February 2, 2004, delegating to various departments broad
195

powers to close down schools/establishments, conduct health surveillance and monitoring, and ban
importation of poultry and agricultural products.
It must be emphasized that even under such an international emergency, the duty of a state to
implement the IHR Resolution was still considered not binding or enforceable, although said
resolutions had great political influence.
As previously discussed, for an international rule to be considered as customary law, it must be
established that such rule is being followed by states because they consider it obligatory to comply
with such rules (opinio juris). Respondents have not presented any evidence to prove that the WHA
Resolutions, although signed by most of the member states, were in fact enforced or practiced by
at least a majority of the member states; neither have respondents proven that any compliance by
member states with said WHA Resolutions was obligatory in nature.
Respondents failed to establish that the provisions of pertinent WHA Resolutions are customary
international law that may be deemed part of the law of the land.
Consequently, legislation is necessary to transform the provisions of the WHA Resolutions into
domestic law. The provisions of the WHA Resolutions cannot be considered as part of the law of the
land that can be implemented by executive agencies without the need of a law enacted by the
legislature.
Second, the Court will determine whether the DOH may implement the provisions of the WHA
Resolutions by virtue of its powers and functions under the Revised Administrative Code even in the
absence of a domestic law.
Section 3, Chapter 1, Title IX of the Revised Administrative Code of 1987 provides that the DOH
shall define the national health policy and implement a national health plan within the framework of
the government's general policies and plans, and issue orders and regulations concerning the
implementation of established health policies.
It is crucial to ascertain whether the absolute prohibition on advertising and other forms of
promotion of breastmilk substitutes provided in some WHA Resolutions has been adopted as part of
the national health policy.
Respondents submit that the national policy on infant and young child feeding is embodied in A.O.
No. 2005-0014, dated May 23, 2005. Basically, the Administrative Order declared the following policy
guidelines: (1) ideal breastfeeding practices, such as early initiation of breastfeeding, exclusive
breastfeeding for the first six months, extended breastfeeding up to two years and beyond; (2)
appropriate complementary feeding, which is to start at age six months; (3) micronutrient
supplementation; (4) universal salt iodization; (5) the exercise of other feeding options; and (6)
feeding in exceptionally difficult circumstances. Indeed, the primacy of breastfeeding for children is
emphasized as a national health policy. However, nowhere in A.O. No. 2005-0014 is it declared that
as part of such health policy, the advertisement or promotion of breastmilk substitutes should be
absolutely prohibited.
The national policy of protection, promotion and support of breastfeeding cannot automatically be
equated with a total ban on advertising for breastmilk substitutes.
In view of the enactment of the Milk Code which does not contain a total ban on the advertising
and promotion of breastmilk substitutes, but instead, specifically creates an IAC which will regulate
said advertising and promotion, it follows that a total ban policy could be implemented
196

only pursuant to a law amending the Milk Code passed by the constitutionally authorized branch of
government, the legislature.
Thus, only the provisions of the Milk Code, but not those of subsequent WHA Resolutions, can be
validly implemented by the DOH through the subject RIRR.
Third, the Court will now determine whether the provisions of the RIRR are in accordance with those
of the Milk Code.
In support of its claim that the RIRR is inconsistent with the Milk Code, petitioner alleges the following:
1. The Milk Code limits its coverage to children 0-12 months old, but the RIRR extended its
coverage to "young children" or those from ages two years old and beyond:
MILK CODE RIRR
WHEREAS, in order to ensure that safe
and adequate nutrition for infants is
provided, there is a need to protect
and promote breastfeeding and to
inform the public about the proper use
of breastmilk substitutes and
supplements and related products
through adequate, consistent and
objective information and appropriate
regulation of the marketing and
distribution of the said substitutes,
supplements and related products;
SECTION 4(e). "Infant" means a person
falling within the age bracket of 0-12
months.
Section 2. Purpose These Revised Rules and Regulations
are hereby promulgated to ensure the provision of safe
and adequate nutrition for infants and young children by
the promotion, protection and support of breastfeeding
and by ensuring the proper use of breastmilk substitutes,
breastmilk supplements and related products when these
are medically indicated and only when necessary, on the
basis of adequate information and through appropriate
marketing and distribution.
Section 5(ff). "Young Child" means a person from the age
of more than twelve (12) months up to the age of three (3)
years (36 months).
2. The Milk Code recognizes that infant formula may be a proper and possible substitute for
breastmilk in certain instances; but the RIRR provides "exclusive breastfeeding for infants from
0-6 months" and declares that "there is no substitute nor replacement for breastmilk":
MILK CODE RIRR
WHEREAS, in order to ensure that safe and adequate
nutrition for infants is provided, there is a need to
protect and promote breastfeeding and to inform the
public about the proper use of breastmilk substitutes
and supplements and related products through
adequate, consistent and objective information and
appropriate regulation of the marketing and
distribution of the said substitutes, supplements and
related products;
Section 4. Declaration of Principles The
following are the underlying principles from
which the revised rules and regulations are
premised upon:
a. Exclusive breastfeeding is for infants from
0 to six (6) months.
b. There is no substitute or replacement for
breastmilk.
3. The Milk Code only regulates and does not impose unreasonable requirements for
advertising and promotion; RIRR imposes an absolute ban on such activities for breastmilk
substitutes intended for infants from 0-24 months old or beyond, and forbids the use of health
197

and nutritional claims. Section 13 of the RIRR, which provides for a "total effect" in the
promotion of products within the scope of the Code, is vague:
MILK CODE RIRR
SECTION 6. The General
Public and Mothers.
(a) No advertising,
promotion or other
marketing materials,
whether written, audio or
visual, for products within
the scope of this
Code shall be printed,
published, distributed,
exhibited and
broadcast unless such
materials are duly
authorized and approved
by an inter-agency
committee created herein
pursuant to the applicable
standards provided for in
this Code.
Section 4. Declaration of Principles The following are the underlying
principles from which the revised rules and regulations are premised
upon:
x x x x
f. Advertising, promotions, or sponsor-ships of infant formula, breastmilk
substitutes and other related products are prohibited.
Section 11. Prohibition No advertising, promotions, sponsorships, or
marketing materials and activities for breastmilk substitutes intended for
infants and young children up to twenty-four (24) months, shall be
allowed, because they tend to convey or give subliminal messages or
impressions that undermine breastmilk and breastfeeding or otherwise
exaggerate breastmilk substitutes and/or replacements, as well as
related products covered within the scope of this Code.
Section 13. "Total Effect" - Promotion of products within the scope of this
Code must be objective and should not equate or make the product
appear to be as good or equal to breastmilk or breastfeeding in the
advertising concept. It must not in any case undermine breastmilk or
breastfeeding. The "total effect" should not directly or indirectly suggest
that buying their product would produce better individuals, or resulting
in greater love, intelligence, ability, harmony or in any manner bring
better health to the baby or other such exaggerated and
unsubstantiated claim.
Section 15. Content of Materials. - The following shall not be included in
advertising, promotional and marketing materials:
a. Texts, pictures, illustrations or information which discourage or tend to
undermine the benefits or superiority of breastfeeding or which idealize
the use of breastmilk substitutes and milk supplements. In this
connection, no pictures of babies and children together with their
mothers, fathers, siblings, grandparents, other relatives or caregivers (or
yayas) shall be used in any advertisements for infant formula and
breastmilk supplements;
b. The term "humanized," "maternalized," "close to mother's milk" or
similar words in describing breastmilk substitutes or milk supplements;
c. Pictures or texts that idealize the use of infant and milk formula.
Section 16. All health and nutrition claims for products within the scope
of the Code are absolutely prohibited. For this purpose, any phrase or
words that connotes to increase emotional, intellectual abilities of the
infant and young child and other like phrases shall not be allowed.
198

4. The RIRR imposes additional labeling requirements not found in the Milk Code:
MILK CODE RIRR
SECTION 10. Containers/Label.
(a) Containers and/or labels shall be designed
to provide the necessary information about
the appropriate use of the products, and in
such a way as not to discourage
breastfeeding.
(b) Each container shall have a clear,
conspicuous and easily readable and
understandable message in Pilipino or English
printed on it, or on a label, which message
can not readily become separated from it,
and which shall include the following points:
(i) the words "Important Notice" or their
equivalent;
(ii) a statement of the superiority of
breastfeeding;
(iii) a statement that the product shall be used
only on the advice of a health worker as to the
need for its use and the proper methods of
use; and
(iv) instructions for appropriate preparation,
and a warning against the health hazards of
inappropriate preparation.
Section 26. Content Each container/label shall
contain such message, in both Filipino and English
languages, and which message cannot be readily
separated therefrom, relative the following points:
(a) The words or phrase "Important Notice" or
"Government Warning" or their equivalent;
(b) A statement of the superiority of breastfeeding;
(c) A statement that there is no substitute for
breastmilk;
(d) A statement that the product shall be used only
on the advice of a health worker as to the need for
its use and the proper methods of use;
(e) Instructions for appropriate prepara-tion, and a
warning against the health hazards of
inappropriate preparation; and
(f) The health hazards of unnecessary or improper
use of infant formula and other related products
including information that powdered infant
formula may contain pathogenic microorganisms
and must be prepared and used appropriately.
5. The Milk Code allows dissemination of information on infant formula to health professionals;
the RIRR totally prohibits such activity:
MILK CODE RIRR
SECTION 7. Health Care System.
(b) No facility of the health care system shall be
used for the purpose of promoting infant formula or
other products within the scope of this Code. This
Code does not, however, preclude the
dissemination of information to health professionals
as provided in Section 8(b).
SECTION 8. Health Workers. -
(b) Information provided by manufacturers and
distributors to health professionals regarding
products within the scope of this Code shall be
restricted to scientific and factual matters and such
information shall not imply or create a belief that
bottle-feeding is equivalent or superior to
breastfeeding. It shall also include the information
specified in Section 5(b).
Section 22. No manufacturer, distributor, or representatives
of products covered by the Code shall be allowed to
conduct or be involved in any activity on breastfeeding
promotion, education and production of Information,
Education and Communication (IEC) materials on
breastfeeding, holding of or participating as speakers in
classes or seminars for women and children activities and
to avoid the use of these venues to market their brands or
company names.
SECTION 16. All health and nutrition claims for products
within the scope of the Code are absolutely prohibited. For
this purpose, any phrase or words that connotes to
increase emotional, intellectual abilities of the infant and
young child and other like phrases shall not be allowed.
199

6. The Milk Code permits milk manufacturers and distributors to extend assistance in research
and continuing education of health professionals; RIRR absolutely forbids the same.
MILK CODE RIRR
SECTION 8. Health
Workers
(e) Manufacturers and
distributors of products
within the scope of this
Code may assist in the
research, scholarships and
continuing education, of
health professionals, in
accordance with the rules
and regulations
promulgated by the
Ministry of Health.
Section 4. Declaration of Principles
The following are the underlying principles from which the revised rules
and regulations are premised upon:
i. Milk companies, and their representatives,should not form part of
any policymaking body or entity in relation to the advancement of
breasfeeding.
SECTION 22. No manufacturer, distributor, or representatives of
products covered by the Code shall be allowed to conduct or be
involved in any activity on breastfeeding promotion, education and
production of Information, Education and Communication (IEC)
materials on breastfeeding, holding of or participating as speakers in
classes or seminars for women and children activitiesand to avoid the
use of these venues to market their brands or company names.
SECTION 32. Primary Responsibility of Health Workers - It is the primary
responsibility of the health workers to promote, protect and support
breastfeeding and appropriate infant and young child feeding. Part
of this responsibility is to continuously update their knowledge and skills
on breastfeeding. No assistance, support, logistics or training from milk
companies shall be permitted.
7. The Milk Code regulates the giving of donations; RIRR absolutely prohibits it.
MILK CODE RIRR
SECTION 6. The General Public
and Mothers.
(f) Nothing herein contained shall
prevent donations from
manufacturers and distributors of
products within the scope of this
Code upon request by or with
the approval of the Ministry of
Health.
Section 51. Donations Within the Scope of This Code - Donations
of products, materials, defined and covered under the Milk
Code and these implementing rules and regulations, shall be
strictly prohibited.
Section 52. Other Donations By Milk Companies Not Covered by
this Code. - Donations of products, equipments, and the like, not
otherwise falling within the scope of this Code or these Rules,
given by milk companies and their agents, representatives,
whether in kind or in cash, may only be coursed through the
Inter Agency Committee (IAC), which shall determine whether
such donation be accepted or otherwise.
8. The RIRR provides for administrative sanctions not imposed by the Milk Code.
MILK CODE RIRR
Section 46. Administrative Sanctions. The following administrative sanctions shall
be imposed upon any person, juridical or natural, found to have violated the
provisions of the Code and its implementing Rules and Regulations:
200

a) 1
st
violation Warning;
b) 2
nd
violation Administrative fine of a minimum of Ten Thousand (P10,000.00) to
Fifty Thousand (P50,000.00) Pesos, depending on the gravity and extent of the
violation, including the recall of the offending product;
c) 3
rd
violation Administrative Fine of a minimum of Sixty Thousand (P60,000.00)
to One Hundred Fifty Thousand (P150,000.00) Pesos, depending on the gravity
and extent of the violation, and in addition thereto, the recall of the offending
product, and suspension of the Certificate of Product Registration (CPR);
d) 4
th
violation Administrative Fine of a minimum of Two Hundred Thousand
(P200,000.00) to Five Hundred (P500,000.00) Thousand Pesos, depending on the
gravity and extent of the violation; and in addition thereto, the recall of the
product, revocation of the CPR, suspension of the License to Operate (LTO) for
one year;
e) 5
th
and succeeding repeated violations Administrative Fine of One Million
(P1,000,000.00) Pesos, the recall of the offending product, cancellation of the
CPR, revocation of the License to Operate (LTO) of the company concerned,
including the blacklisting of the company to be furnished the Department of
Budget and Management (DBM) and the Department of Trade and Industry
(DTI);
f) An additional penalty of Two Thou-sand Five Hundred (P2,500.00) Pesos per day
shall be made for every day the violation continues after having received the
order from the IAC or other such appropriate body, notifying and penalizing the
company for the infraction.
For purposes of determining whether or not there is "repeated" violation, each
product violation belonging or owned by a company, including those of their
subsidiaries, are deemed to be violations of the concerned milk company and
shall not be based on the specific violating product alone.
9. The RIRR provides for repeal of existing laws to the contrary.
The Court shall resolve the merits of the allegations of petitioner seriatim.
1. Petitioner is mistaken in its claim that the Milk Code's coverage is limited only to children 0-12
months old. Section 3 of the Milk Code states:
SECTION 3. Scope of the Code The Code applies to the marketing, and practices related
thereto, of the following products: breastmilk substitutes, including infant formula; other milk
products, foods and beverages, including bottle-fed complementary foods, when marketed
or otherwise represented to be suitable, with or without modification, for use as a partial or
total replacement of breastmilk; feeding bottles and teats. It also applies to their quality and
availability, and to information concerning their use.
Clearly, the coverage of the Milk Code is not dependent on the age of the child but on the kind of
product being marketed to the public. The law treats infant formula, bottle-fed complementary
food, and breastmilk substitute as separate and distinct product categories.
201

Section 4(h) of the Milk Code defines infant formula as "a breastmilk substitute x x x to satisfy the
normal nutritional requirements of infants up to between four to six months of age, and adapted to
their physiological characteristics"; while under Section 4(b), bottle-fed complementary food refers
to "any food, whether manufactured or locally prepared, suitable as a complement to breastmilk or
infant formula, when either becomes insufficient to satisfy the nutritional requirements of the infant."
An infant under Section 4(e) is a person falling within the age bracket 0-12 months. It is the
nourishment of this group of infants or children aged 0-12 months that is sought to be promoted and
protected by the Milk Code.
But there is another target group. Breastmilk substitute is defined under Section 4(a) as "any food
being marketed or otherwise presented as a partial or total replacement for breastmilk, whether or
not suitable for that purpose."This section conspicuously lacks reference to any particular age-group
of children. Hence, the provision of the Milk Code cannot be considered exclusive for children aged
0-12 months. In other words, breastmilk substitutes may also be intended for young children more
than 12 months of age. Therefore, by regulating breastmilk substitutes, the Milk Code also intends to
protect and promote the nourishment of children more than 12 months old.
Evidently, as long as what is being marketed falls within the scope of the Milk Code as provided in
Section 3, then it can be subject to regulation pursuant to said law, even if the product is to be used
by children aged over 12 months.
There is, therefore, nothing objectionable with Sections 2
42
and 5(ff)
43
of the RIRR.
2. It is also incorrect for petitioner to say that the RIRR, unlike the Milk Code, does not recognize that
breastmilk substitutes may be a proper and possible substitute for breastmilk.
The entirety of the RIRR, not merely truncated portions thereof, must be considered and construed
together. As held in De Luna v. Pascual,
44
"[t]he particular words, clauses and phrases in the Rule
should not be studied as detached and isolated expressions, but the whole and every part thereof
must be considered in fixing the meaning of any of its parts and in order to produce a harmonious
whole."
Section 7 of the RIRR provides that "when medically indicated and only when necessary, the use of
breastmilk substitutes is proper if based on complete and updated information." Section 8 of the
RIRR also states that information and educational materials should include information on the proper
use of infant formula when the use thereof is needed.
Hence, the RIRR, just like the Milk Code, also recognizes that in certain cases, the use of breastmilk
substitutes may be proper.
3. The Court shall ascertain the merits of allegations 3
45
and 4
46
together as they are interlinked with
each other.
To resolve the question of whether the labeling requirements and advertising regulations under the
RIRR are valid, it is important to deal first with the nature, purpose, and depth of the regulatory
powers of the DOH, as defined in general under the 1987 Administrative Code,
47
and as delegated
in particular under the Milk Code.
Health is a legitimate subject matter for regulation by the DOH (and certain other administrative
agencies) in exercise of police powers delegated to it. The sheer span of jurisprudence on that
matter precludes the need to further discuss it.
.48
However, health information, particularly
advertising materials on apparently non-toxic products like breastmilk substitutes and supplements, is
a relatively new area for regulation by the DOH.
49

202

As early as the 1917 Revised Administrative Code of the Philippine Islands,
50
health information was
already within the ambit of the regulatory powers of the predecessor of DOH.
51
Section 938 thereof
charged it with the duty to protect the health of the people, and vested it with such powers as "(g)
the dissemination of hygienic information among the people and especially the inculcation of
knowledge as to the proper care of infants and the methods of preventing and combating
dangerous communicable diseases."
Seventy years later, the 1987 Administrative Code tasked respondent DOH to carry out the state
policy pronounced under Section 15, Article II of the 1987 Constitution, which is "to protect and
promote the right to health of the people and instill health consciousness among them."
52
To that
end, it was granted under Section 3 of the Administrative Code the power to "(6) propagate health
information and educate the population on important health, medical and environmental matters
which have health implications."
53

When it comes to information regarding nutrition of infants and young children, however, the Milk
Code specifically delegated to the Ministry of Health (hereinafter referred to as DOH) the power to
ensure that there is adequate, consistent and objective information on breastfeeding and use of
breastmilk substitutes, supplements and related products; and the power to control such
information. These are expressly provided for in Sections 12 and 5(a), to wit:
SECTION 12. Implementation and Monitoring
x x x x
(b) The Ministry of Health shall be principally responsible for the implementation and
enforcement of the provisions of this Code. For this purpose, the Ministry of Health shall have
the following powers and functions:
(1) To promulgate such rules and regulations as are necessary or proper for the
implementation of this Code and the accomplishment of its purposes and objectives.
x x x x
(4) To exercise such other powers and functions as may be necessary for or incidental
to the attainment of the purposes and objectives of this Code.
SECTION 5. Information and Education
(a) The government shall ensure that objective and consistent information is provided on
infant feeding, for use by families and those involved in the field of infant nutrition. This
responsibility shall cover the planning, provision, design and dissemination of information, and
the control thereof, on infant nutrition. (Emphasis supplied)
Further, DOH is authorized by the Milk Code to control the content of any information on
breastmilk vis--visbreastmilk substitutes, supplement and related products, in the following manner:
SECTION 5. x x x
(b) Informational and educational materials, whether written, audio, or visual, dealing with
the feeding of infants and intended to reach pregnant women and mothers of infants, shall
include clear information on all the following points: (1) the benefits and superiority of
breastfeeding; (2) maternal nutrition, and the preparation for and maintenance of
breastfeeding; (3) the negative effect on breastfeeding of introducing partial bottlefeeding;
203

(4) the difficulty of reversing the decision not to breastfeed; and (5) where needed, the
proper use of infant formula, whether manufactured industrially or home-prepared. When
such materials contain information about the use of infant formula, they shall include the
social and financial implications of its use; the health hazards of inappropriate foods or
feeding methods; and, in particular, the health hazards of unnecessary or improper use of
infant formula and other breastmilk substitutes. Such materials shall not use any picture or text
which may idealize the use of breastmilk substitutes.
SECTION 8. Health Workers
x x x x
(b) Information provided by manufacturers and distributors to health professionals regarding
products within the scope of this Code shall be restricted to scientific and factual matters,
and such information shall not imply or create a belief that bottlefeeding is equivalent or
superior to breastfeeding. It shall also include the information specified in Section 5(b).
SECTION 10. Containers/Label
(a) Containers and/or labels shall be designed to provide the necessary information about
the appropriate use of the products, and in such a way as not to discourage breastfeeding.
x x x x
(d) The term "humanized," "maternalized" or similar terms shall not be used. (Emphasis
supplied)
The DOH is also authorized to control the purpose of the information and to whom such information
may be disseminated under Sections 6 through 9 of the Milk Code
54
to ensure that the information
that would reach pregnant women, mothers of infants, and health professionals and workers in the
health care system is restricted to scientific and factual matters and shall not imply or create a belief
that bottlefeeding is equivalent or superior to breastfeeding.
It bears emphasis, however, that the DOH's power under the Milk Code to control information
regarding breastmilk vis-a-vis breastmilk substitutes is not absolute as the power to control does not
encompass the power to absolutely prohibit the advertising, marketing, and promotion of breastmilk
substitutes.
The following are the provisions of the Milk Code that unequivocally indicate that the control over
information given to the DOH is not absolute and that absolute prohibition is not contemplated by
the Code:
a) Section 2 which requires adequate information and appropriate marketing and distribution
of breastmilk substitutes, to wit:
SECTION 2. Aim of the Code The aim of the Code is to contribute to the provision of
safe and adequate nutrition for infants by the protection and promotion of
breastfeeding and by ensuring the proper use of breastmilk substitutes and breastmilk
supplements when these are necessary, on the basis of adequate information and
through appropriate marketing and distribution.
204

b) Section 3 which specifically states that the Code applies to the marketing of and practices
related to breastmilk substitutes, including infant formula, and to information concerning their
use;
c) Section 5(a) which provides that the government shall ensure that objective and consistent
information is provided on infant feeding;
d) Section 5(b) which provides that written, audio or visual informational and educational
materials shall not use any picture or text which may idealize the use of breastmilk substitutes
and should include information on the health hazards of unnecessary or improper use of said
product;
e) Section 6(a) in relation to Section 12(a) which creates and empowers the IAC to review
and examine advertising, promotion, and other marketing materials;
f) Section 8(b) which states that milk companies may provide information to health
professionals but such information should be restricted to factual and scientific matters and
shall not imply or create a belief that bottlefeeding is equivalent or superior to breastfeeding;
and
g) Section 10 which provides that containers or labels should not contain information that
would discourage breastfeeding and idealize the use of infant formula.
It is in this context that the Court now examines the assailed provisions of the RIRR regarding labeling
and advertising.
Sections 13
55
on "total effect" and 26
56
of Rule VII of the RIRR contain some labeling requirements,
specifically: a) that there be a statement that there is no substitute to breastmilk; and b) that there
be a statement that powdered infant formula may contain pathogenic microorganisms and must
be prepared and used appropriately. Section 16
57
of the RIRR prohibits all health and nutrition claims
for products within the scope of the Milk Code, such as claims of increased emotional and
intellectual abilities of the infant and young child.
These requirements and limitations are consistent with the provisions of Section 8 of the Milk Code, to
wit:
SECTION 8. Health workers -
x x x x
(b) Information provided by manufacturers and distributors to health professionals regarding
products within the scope of this Code shall be restricted to scientific and factual matters,
and such information shall not imply or create a belief that bottlefeeding
is equivalent or superior to breastfeeding. It shall also include the information specified in
Section 5.
58
(Emphasis supplied)
and Section 10(d)
59
which bars the use on containers and labels of the terms "humanized,"
"maternalized," or similar terms.
These provisions of the Milk Code expressly forbid information that would imply or create a belief that
there is any milk product equivalent to breastmilk or which is humanized or maternalized, as such
information would be inconsistent with the superiority of breastfeeding.
205

It may be argued that Section 8 of the Milk Code refers only to information given to health workers
regarding breastmilk substitutes, not to containers and labels thereof. However, such restrictive
application of Section 8(b) will result in the absurd situation in which milk companies and distributors
are forbidden to claim to health workers that their products are substitutes or equivalents of
breastmilk, and yet be allowed to display on the containers and labels of their products the exact
opposite message. That askewed interpretation of the Milk Code is precisely what Section 5(a)
thereof seeks to avoid by mandating that all information regarding breastmilk vis-a-vis breastmilk
substitutes be consistent, at the same time giving the government control over planning, provision,
design, and dissemination of information on infant feeding.
Thus, Section 26(c) of the RIRR which requires containers and labels to state that the product offered
is not a substitute for breastmilk, is a reasonable means of enforcing Section 8(b) of the Milk Code
and deterring circumvention of the protection and promotion of breastfeeding as embodied in
Section 2
60
of the Milk Code.
Section 26(f)
61
of the RIRR is an equally reasonable labeling requirement. It implements Section 5(b)
of the Milk Code which reads:
SECTION 5. x x x
x x x x
(b) Informational and educational materials, whether written, audio, or visual, dealing with
the feeding of infants and intended to reach pregnant women and mothers of infants, shall
include clear information on all the following points: x x x (5) where needed, the proper use of
infant formula, whether manufactured industrially or home-prepared. When such materials
contain information about the use of infant formula, they shall include the social and financial
implications of its use; the health hazards of inappropriate foods or feeding methods; and, in
particular, the health hazards of unnecessary or improper use of infant formula and other
breastmilk substitutes. Such materials shall not use any picture or text which may idealize the
use of breastmilk substitutes. (Emphasis supplied)
The label of a product contains information about said product intended for the buyers thereof. The
buyers of breastmilk substitutes are mothers of infants, and Section 26 of the RIRR merely adds a fair
warning about the likelihood of pathogenic microorganisms being present in infant formula and
other related products when these are prepared and used inappropriately.
Petitioners counsel has admitted during the hearing on June 19, 2007 that formula milk is prone to
contaminations and there is as yet no technology that allows production of powdered infant
formula that eliminates all forms of contamination.
62

Ineluctably, the requirement under Section 26(f) of the RIRR for the label to contain the message
regarding health hazards including the possibility of contamination with pathogenic microorganisms
is in accordance with Section 5(b) of the Milk Code.
The authority of DOH to control information regarding breastmilk vis-a-vis breastmilk substitutes and
supplements and related products cannot be questioned. It is its intervention into the area of
advertising, promotion, and marketing that is being assailed by petitioner.
In furtherance of Section 6(a) of the Milk Code, to wit:
SECTION 6. The General Public and Mothers.
206

(a) No advertising, promotion or other marketing materials, whether written, audio or visual,
for products within the scope of this Code shall be printed, published, distributed, exhibited
and broadcast unless such materials are duly authorized and approved by an inter-agency
committee created herein pursuant to the applicable standards provided for in this Code.
the Milk Code invested regulatory authority over advertising, promotional and marketing materials
to an IAC, thus:
SECTION 12. Implementation and Monitoring -
(a) For purposes of Section 6(a) of this Code, an inter-agency committee composed of the
following members is hereby created:
Minister of Health ------------------- Chairman
Minister of Trade and Industry ------------------- Member
Minister of Justice ------------------- Member
Minister of Social Services and Development ------------------- Member
The members may designate their duly authorized representative to every meeting of the
Committee.
The Committee shall have the following powers and functions:
(1) To review and examine all advertising. promotion or other marketing materials,
whether written, audio or visual, on products within the scope of this Code;
(2) To approve or disapprove, delete objectionable portions from and prohibit the
printing, publication, distribution, exhibition and broadcast of, all advertising promotion
or other marketing materials, whether written, audio or visual, on products within the
scope of this Code;
(3) To prescribe the internal and operational procedure for the exercise of its powers
and functions as well as the performance of its duties and responsibilities; and
(4) To promulgate such rules and regulations as are necessary or proper for the
implementation of Section 6(a) of this Code. x x x (Emphasis supplied)
However, Section 11 of the RIRR, to wit:
SECTION 11. Prohibition No advertising, promotions, sponsorships, or marketing materials and
activities for breastmilk substitutes intended for infants and young children up to twenty-four
(24) months, shall be allowed, because they tend to convey or give subliminal messages or
impressions that undermine breastmilk and breastfeeding or otherwise exaggerate breastmilk
substitutes and/or replacements, as well as related products covered within the scope of this
Code.
prohibits advertising, promotions, sponsorships or marketing materials and activities for breastmilk
substitutes in line with the RIRRs declaration of principle under Section 4(f), to wit:
SECTION 4. Declaration of Principles
x x x x
207

(f) Advertising, promotions, or sponsorships of infant formula, breastmilk substitutes and other
related products are prohibited.
The DOH, through its co-respondents, evidently arrogated to itself not only the regulatory authority
given to the IAC but also imposed absolute prohibition on advertising, promotion, and marketing.
Yet, oddly enough, Section 12 of the RIRR reiterated the requirement of the Milk Code in Section 6
thereof for prior approval by IAC of all advertising, marketing and promotional materials prior to
dissemination.
Even respondents, through the OSG, acknowledged the authority of IAC, and repeatedly insisted,
during the oral arguments on June 19, 2007, that the prohibition under Section 11 is not actually
operational, viz:
SOLICITOR GENERAL DEVANADERA:
x x x x
x x x Now, the crux of the matter that is being questioned by Petitioner is whether or not there
is an absolute prohibition on advertising making AO 2006-12 unconstitutional. We maintained
that what AO 2006-12 provides is not an absolute prohibition because Section 11 while it
states and it is entitled prohibition it states that no advertising, promotion, sponsorship or
marketing materials and activities for breast milk substitutes intended for infants and young
children up to 24 months shall be allowed because this is the standard they tend to convey or
give subliminal messages or impression undermine that breastmilk or breastfeeding x x x.
We have to read Section 11 together with the other Sections because the other Section,
Section 12, provides for the inter agency committee that is empowered to process and
evaluate all the advertising and promotion materials.
x x x x
What AO 2006-12, what it does, it does not prohibit the sale and manufacture, it simply
regulates the advertisement and the promotions of breastfeeding milk substitutes.
x x x x
Now, the prohibition on advertising, Your Honor, must be taken together with the provision on
the Inter-Agency Committee that processes and evaluates because there may be some
information dissemination that are straight forward information dissemination. What the AO
2006 is trying to prevent is any material that will undermine the practice of breastfeeding,
Your Honor.
x x x x
ASSOCIATE JUSTICE SANTIAGO:
Madam Solicitor General, under the Milk Code, which body has authority or power to
promulgate Rules and Regulations regarding the Advertising, Promotion and Marketing of
Breastmilk Substitutes?
SOLICITOR GENERAL DEVANADERA:
208

Your Honor, please, it is provided that the Inter-Agency Committee, Your Honor.
x x x x
ASSOCIATE JUSTICE SANTIAGO:
x x x Don't you think that the Department of Health overstepped its rule making authority
when it totally banned advertising and promotion under Section 11 prescribed the total
effect rule as well as the content of materials under Section 13 and 15 of the rules and
regulations?
SOLICITOR GENERAL DEVANADERA:
Your Honor, please, first we would like to stress that there is no total absolute ban. Second, the
Inter-Agency Committee is under the Department of Health, Your Honor.
x x x x
ASSOCIATE JUSTICE NAZARIO:
x x x Did I hear you correctly, Madam Solicitor, that there is no absolute ban on advertising of
breastmilk substitutes in the Revised Rules?
SOLICITOR GENERAL DEVANADERA:
Yes, your Honor.
ASSOCIATE JUSTICE NAZARIO:
But, would you nevertheless agree that there is an absolute ban on advertising of breastmilk
substitutes intended for children two (2) years old and younger?
SOLICITOR GENERAL DEVANADERA:
It's not an absolute ban, Your Honor, because we have the Inter-Agency Committee that can
evaluate some advertising and promotional materials, subject to the standards that we have
stated earlier, which are- they should not undermine breastfeeding, Your Honor.
x x x x
x x x Section 11, while it is titled Prohibition, it must be taken in relation with the other Sections,
particularly 12 and 13 and 15, Your Honor, because it is recognized that the Inter-Agency
Committee has that power to evaluate promotional materials, Your Honor.
ASSOCIATE JUSTICE NAZARIO:
So in short, will you please clarify there's no absolute ban on advertisement regarding milk
substitute regarding infants two (2) years below?
SOLICITOR GENERAL DEVANADERA:
209

We can proudly say that the general rule is that there is a prohibition, however, we take
exceptions and standards have been set. One of which is that, the Inter-Agency Committee
can allow if the advertising and promotions will not undermine breastmilk and breastfeeding,
Your Honor.
63

Sections 11 and 4(f) of the RIRR are clearly violative of the Milk Code.
However, although it is the IAC which is authorized to promulgate rules and regulations for the
approval or rejection of advertising, promotional, or other marketing materials under Section 12(a)
of the Milk Code, said provision must be related to Section 6 thereof which in turn provides that the
rules and regulations must be "pursuant to the applicable standards provided for in this Code." Said
standards are set forth in Sections 5(b), 8(b), and 10 of the Code, which, at the risk of being
repetitious, and for easy reference, are quoted hereunder:
SECTION 5. Information and Education
x x x x
(b) Informational and educational materials, whether written, audio, or visual, dealing with
the feeding of infants and intended to reach pregnant women and mothers of infants, shall
include clear information on all the following points: (1) the benefits and superiority of
breastfeeding; (2) maternal nutrition, and the preparation for and maintenance of
breastfeeding; (3) the negative effect on breastfeeding of introducing partial bottlefeeding;
(4) the difficulty of reversing the decision not to breastfeed; and (5) where needed, the
proper use of infant formula, whether manufactured industrially or home-prepared. When
such materials contain information about the use of infant formula, they shall include the
social and financial implications of its use; the health hazards of inappropriate foods of
feeding methods; and, in particular, the health hazards of unnecessary or improper use of
infant formula and other breastmilk substitutes. Such materials shall not use any picture or text
which may idealize the use of breastmilk substitutes.
x x x x
SECTION 8. Health Workers.
x x x x
(b) Information provided by manufacturers and distributors to health professionals regarding
products within the scope of this Code shall be restricted to scientific and factual matters and
such information shall not imply or create a belief that bottle feeding is equivalent or superior
to breastfeeding. It shall also include the information specified in Section 5(b).
x x x x
SECTION 10. Containers/Label
(a) Containers and/or labels shall be designed to provide the necessary information about
the appropriate use of the products, and in such a way as not to discourage breastfeeding.
(b) Each container shall have a clear, conspicuous and easily readable and understandable
message in Pilipino or English printed on it, or on a label, which message can not readily
become separated from it, and which shall include the following points:
210

(i) the words "Important Notice" or their equivalent;
(ii) a statement of the superiority of breastfeeding;
(iii) a statement that the product shall be used only on the advice of a health worker
as to the need for its use and the proper methods of use; and
(iv) instructions for appropriate preparation, and a warning against the health hazards
of inappropriate preparation.
Section 12(b) of the Milk Code designates the DOH as the principal implementing agency for the
enforcement of the provisions of the Code. In relation to such responsibility of the DOH, Section 5(a)
of the Milk Code states that:
SECTION 5. Information and Education
(a) The government shall ensure that objective and consistent information is provided on
infant feeding, for use by families and those involved in the field of infant nutrition. This
responsibility shall cover the planning, provision, design and dissemination of information, and
the control thereof, on infant nutrition. (Emphasis supplied)
Thus, the DOH has the significant responsibility to translate into operational terms the standards set
forth in Sections 5, 8, and 10 of the Milk Code, by which the IAC shall screen advertising,
promotional, or other marketing materials.
It is pursuant to such responsibility that the DOH correctly provided for Section 13 in the RIRR which
reads as follows:
SECTION 13. "Total Effect" - Promotion of products within the scope of this Code must be
objective and should not equate or make the product appear to be as good or equal to
breastmilk or breastfeeding in the advertising concept. It must not in any case undermine
breastmilk or breastfeeding. The "total effect" should not directly or indirectly suggest that
buying their product would produce better individuals, or resulting in greater love,
intelligence, ability, harmony or in any manner bring better health to the baby or other such
exaggerated and unsubstantiated claim.
Such standards bind the IAC in formulating its rules and regulations on advertising, promotion, and
marketing. Through that single provision, the DOH exercises control over the information content of
advertising, promotional and marketing materials on breastmilk vis-a-vis breastmilk substitutes,
supplements and other related products. It also sets a viable standard against which the IAC may
screen such materials before they are made public.
In Equi-Asia Placement, Inc. vs. Department of Foreign Affairs,
64
the Court held:
x x x [T]his Court had, in the past, accepted as sufficient standards the following: "public
interest," "justice and equity," "public convenience and welfare," and "simplicity, economy
and welfare."
65

In this case, correct information as to infant feeding and nutrition is infused with public interest and
welfare.
211

4. With regard to activities for dissemination of information to health professionals, the Court also
finds that there is no inconsistency between the provisions of the Milk Code and the RIRR. Section
7(b)
66
of the Milk Code, in relation to Section 8(b)
67
of the same Code, allows dissemination of
information to health professionals but suchinformation is restricted to scientific and factual matters.
Contrary to petitioner's claim, Section 22 of the RIRR does not prohibit the giving of information to
health professionals on scientific and factual matters. What it prohibits is the involvement of the
manufacturer and distributor of the products covered by the Code in activities for the promotion,
education and production of Information, Education and Communication (IEC) materials regarding
breastfeeding that are intended forwomen and children. Said provision cannot be construed to
encompass even the dissemination of information to health professionals, as restricted by the Milk
Code.
5. Next, petitioner alleges that Section 8(e)
68
of the Milk Code permits milk manufacturers and
distributors to extend assistance in research and in the continuing education of health professionals,
while Sections 22 and 32 of the RIRR absolutely forbid the same. Petitioner also assails Section 4(i)
69
of
the RIRR prohibiting milk manufacturers' and distributors' participation in any policymaking body in
relation to the advancement of breastfeeding.
Section 4(i) of the RIRR provides that milk companies and their representatives should not form part
of any policymaking body or entity in relation to the advancement of breastfeeding. The Court finds
nothing in said provisions which contravenes the Milk Code. Note that under Section 12(b) of the
Milk Code, it is the DOH which shall be principally responsible for the implementation and
enforcement of the provisions of said Code. It is entirely up to the DOH to decide which entities to
call upon or allow to be part of policymaking bodies on breastfeeding. Therefore, the RIRR's
prohibition on milk companies participation in any policymaking body in relation to the
advancement of breastfeeding is in accord with the Milk Code.
Petitioner is also mistaken in arguing that Section 22 of the RIRR prohibits milk companies from giving
reasearch assistance and continuing education to health professionals. Section 22
70
of the RIRR does
not pertain to research assistance to or the continuing education of health professionals; rather, it
deals with breastfeeding promotion and education for women and children. Nothing in Section 22 of
the RIRR prohibits milk companies from giving assistance for research or continuing education to
health professionals; hence, petitioner's argument against this particular provision must be struck
down.
It is Sections 9
71
and 10
72
of the RIRR which govern research assistance. Said sections of the RIRR
provide thatresearch assistance for health workers and researchers may be allowed upon approval
of an ethics committee, and with certain disclosure requirements imposed on the milk company and
on the recipient of the research award.
The Milk Code endows the DOH with the power to determine how such research or educational
assistance may be given by milk companies or under what conditions health workers may accept
the assistance. Thus, Sections 9 and 10 of the RIRR imposing limitations on the kind of research done
or extent of assistance given by milk companies are completely in accord with the Milk Code.
Petitioner complains that Section 32
73
of the RIRR prohibits milk companies from giving assistance,
support, logistics or training to health workers. This provision is within the prerogative given to the
DOH under Section 8(e)
74
of the Milk Code, which provides that manufacturers and distributors of
breastmilk substitutes may assist in researches, scholarships and the continuing education, of health
professionals in accordance with the rules and regulations promulgated by the Ministry of Health,
now DOH.
212

6. As to the RIRR's prohibition on donations, said provisions are also consistent with the Milk Code.
Section 6(f) of the Milk Code provides that donations may be made by manufacturers and
distributors of breastmilk substitutesupon the request or with the approval of the DOH. The law does
not proscribe the refusal of donations. The Milk Code leaves it purely to the discretion of the DOH
whether to request or accept such donations. The DOH then appropriately exercised its discretion
through Section 51
75
of the RIRR which sets forth its policy not to request or approve donations from
manufacturers and distributors of breastmilk substitutes.
It was within the discretion of the DOH when it provided in Section 52 of the RIRR that any donation
from milk companies not covered by the Code should be coursed through the IAC which shall
determine whether such donation should be accepted or refused. As reasoned out by respondents,
the DOH is not mandated by the Milk Code to accept donations. For that matter, no person or entity
can be forced to accept a donation. There is, therefore, no real inconsistency between the RIRR
and the law because the Milk Code does not prohibit the DOH from refusing donations.
7. With regard to Section 46 of the RIRR providing for administrative sanctions that are not found in
the Milk Code, the Court upholds petitioner's objection thereto.
Respondent's reliance on Civil Aeronautics Board v. Philippine Air Lines, Inc.
76
is misplaced. The
glaring difference in said case and the present case before the Court is that, in the Civil Aeronautics
Board, the Civil Aeronautics Administration (CAA) was expressly granted by the law (R.A. No. 776)
the power to impose fines and civil penalties, while the Civil Aeronautics Board (CAB) was granted
by the same law the power to review on appeal the order or decision of the CAA and to determine
whether to impose, remit, mitigate, increase or compromise such fine and civil penalties. Thus, the
Court upheld the CAB's Resolution imposing administrative fines.
In a more recent case, Perez v. LPG Refillers Association of the Philippines, Inc.,
77
the Court upheld
the Department of Energy (DOE) Circular No. 2000-06-10
implementing Batas Pambansa (B.P.) Blg. 33. The circular provided for fines for the commission of
prohibited acts. The Court found that nothing in the circular contravened the law because the DOE
was expressly authorized by B.P. Blg. 33 and R.A. No. 7638 to impose fines or penalties.
In the present case, neither the Milk Code nor the Revised Administrative Code grants the DOH the
authority to fix or impose administrative fines. Thus, without any express grant of power to fix or
impose such fines, the DOH cannot provide for those fines in the RIRR. In this regard, the DOH again
exceeded its authority by providing for such fines or sanctions in Section 46 of the RIRR. Said provision
is, therefore, null and void.
The DOH is not left without any means to enforce its rules and regulations. Section 12(b) (3) of the
Milk Code authorizes the DOH to "cause the prosecution of the violators of this Code and other
pertinent laws on products covered by this Code." Section 13 of the Milk Code provides for the
penalties to be imposed on violators of the provision of the Milk Code or the rules and regulations
issued pursuant to it, to wit:
SECTION 13. Sanctions
(a) Any person who violates the provisions of this Code or the rules and regulations issued
pursuant to this Code shall, upon conviction, be punished by a penalty of two (2) months to
one (1) year imprisonment or a fine of not less than One Thousand Pesos (P1,000.00) nor more
than Thirty Thousand Pesos (P30,000.00) or both. Should the offense be committed by a
juridical person, the chairman of the Board of Directors, the president, general manager, or
the partners and/or the persons directly responsible therefor, shall be penalized.
213

(b) Any license, permit or authority issued by any government agency to any health worker,
distributor, manufacturer, or marketing firm or personnel for the practice of their profession or
occupation, or for the pursuit of their business, may, upon recommendation of the Ministry of
Health, be suspended or revoked in the event of repeated violations of this Code, or of the
rules and regulations issued pursuant to this Code. (Emphasis supplied)
8. Petitioners claim that Section 57 of the RIRR repeals existing laws that are contrary to the RIRR is
frivolous.
Section 57 reads:
SECTION 57. Repealing Clause - All orders, issuances, and rules and regulations or parts
thereof inconsistent with these revised rules and implementing regulations are hereby
repealed or modified accordingly.
Section 57 of the RIRR does not provide for the repeal of laws but only orders, issuances and rules
and regulations. Thus, said provision is valid as it is within the DOH's rule-making power.
An administrative agency like respondent possesses quasi-legislative or rule-making power or the
power to make rules and regulations which results in delegated legislation that is within the confines
of the granting statute and the Constitution, and subject to the doctrine of non-delegability and
separability of powers.
78
Such express grant of rule-making power necessarily includes the power to
amend, revise, alter, or repeal the same.
79
This is to allow administrative agencies flexibility in
formulating and adjusting the details and manner by which they are to implement the provisions of
a law,
80
in order to make it more responsive to the times. Hence, it is a standard provision in
administrative rules that prior issuances of administrative agencies that are inconsistent therewith are
declared repealed or modified.
In fine, only Sections 4(f), 11 and 46 are ultra vires, beyond the authority of the DOH to promulgate
and in contravention of the Milk Code and, therefore, null and void. The rest of the provisions of the
RIRR are in consonance with the Milk Code.
Lastly, petitioner makes a "catch-all" allegation that:
x x x [T]he questioned RIRR sought to be implemented by the Respondents is unnecessary and
oppressive, and is offensive to the due process clause of the Constitution, insofar as the same
is in restraint of trade and because a provision therein is inadequate to provide the public
with a comprehensible basis to determine whether or not they have committed a
violation.
81
(Emphasis supplied)
Petitioner refers to Sections 4(f),
82
4(i),
83
5(w),
84
11,
85
22,
86
32,
87
46,
88
and 52
89
as the provisions that
suppress the trade of milk and, thus, violate the due process clause of the Constitution.
The framers of the constitution were well aware that trade must be subjected to some form of
regulation for the public good. Public interest must be upheld over business interests.
90
In Pest
Management Association of the Philippines v. Fertilizer and Pesticide Authority,
91
it was held thus:
x x x Furthermore, as held in Association of Philippine Coconut Desiccators v. Philippine
Coconut Authority,despite the fact that "our present Constitution enshrines free enterprise as a
policy, it nonetheless reserves to the government the power to intervene whenever necessary
to promote the general welfare." There can be no question that the unregulated use or
proliferation of pesticides would be hazardous to our environment. Thus, in the aforecited
case, the Court declared that "free enterprise does not call for removal of protective
214

regulations." x x x It must be clearly explained and proven by competent evidence just
exactly how such protective regulation would result in the restraint of trade. [Emphasis and
underscoring supplied]
In this case, petitioner failed to show that the proscription of milk manufacturers participation in any
policymaking body (Section 4(i)), classes and seminars for women and children (Section 22); the
giving of assistance, support and logistics or training (Section 32); and the giving of donations
(Section 52) would unreasonably hamper the trade of breastmilk substitutes. Petitioner has not
established that the proscribed activities are indispensable to the trade of breastmilk substitutes.
Petitioner failed to demonstrate that the aforementioned provisions of the RIRR are unreasonable
and oppressive for being in restraint of trade.
Petitioner also failed to convince the Court that Section 5(w) of the RIRR is unreasonable and
oppressive. Said section provides for the definition of the term "milk company," to wit:
SECTION 5 x x x. (w) "Milk Company" shall refer to the owner, manufacturer, distributor of infant
formula, follow-up milk, milk formula, milk supplement, breastmilk substitute or replacement, or
by any other description of such nature, including their representatives who promote or
otherwise advance their commercial interests in marketing those products;
On the other hand, Section 4 of the Milk Code provides:
(d) "Distributor" means a person, corporation or any other entity in the public or private sector
engaged in the business (whether directly or indirectly) of marketing at the wholesale or retail
level a product within the scope of this Code. A "primary distributor" is a manufacturer's sales
agent, representative, national distributor or broker.
x x x x
(j) "Manufacturer" means a corporation or other entity in the public or private sector engaged
in the business or function (whether directly or indirectly or through an agent or and entity
controlled by or under contract with it) of manufacturing a products within the scope of this
Code.
Notably, the definition in the RIRR merely merged together under the term "milk company" the
entities defined separately under the Milk Code as "distributor" and "manufacturer." The RIRR also
enumerated in Section 5(w) the products manufactured or distributed by an entity that would
qualify it as a "milk company," whereas in the Milk Code, what is used is the phrase "products within
the scope of this Code." Those are the only differences between the definitions given in the Milk
Code and the definition as re-stated in the RIRR.
Since all the regulatory provisions under the Milk Code apply equally to both manufacturers and
distributors, the Court sees no harm in the RIRR providing for just one term to encompass both
entities. The definition of "milk company" in the RIRR and the definitions of "distributor" and
"manufacturer" provided for under the Milk Code are practically the same.
The Court is not convinced that the definition of "milk company" provided in the RIRR would bring
about any change in the treatment or regulation of "distributors" and "manufacturers" of breastmilk
substitutes, as defined under the Milk Code.
Except Sections 4(f), 11 and 46, the rest of the provisions of the RIRR are in consonance with the
objective, purpose and intent of the Milk Code, constituting reasonable regulation of an industry
215

which affects public health and welfare and, as such, the rest of the RIRR do not constitute illegal
restraint of trade nor are they violative of the due process clause of the Constitution.
WHEREFORE, the petition is PARTIALLY GRANTED. Sections 4(f), 11 and 46 of Administrative Order No.
2006-0012 dated May 12, 2006 are declared NULL and VOID for being ultra vires. The Department of
Health and respondents are PROHIBITED from implementing said provisions.
The Temporary Restraining Order issued on August 15, 2006 is LIFTED insofar as the rest of the
provisions of Administrative Order No. 2006-0012 is concerned.
SO ORDERED.

216

G.R. No. 151445 April 11, 2002
ARTHUR D. LIM and PAULINO R. ERSANDO, petitioners,
vs.
HONORABLE EXECUTIVE SECRETARY as alter ego of HER EXCELLENCEY GLORIA MACAPAGAL-ARROYO,
and HONORABLE ANGELO REYES in his capacity as Secretary of National Defense, respondents.
DE LEON, JR., J.:
This case involves a petition for certiorari and prohibition as well as a petition-in-intervention, praying
that respondents be restrained from proceeding with the so-called "Balikatan 02-1" and that after
due notice and hearing, that judgment be rendered issuing a permanent writ of injunction and/or
prohibition against the deployment of U.S. troops in Basilan and Mindanao for being illegal and in
violation of the Constitution.
The facts are as follows:
Beginning January of this year 2002, personnel from the armed forces of the United States of
America started arriving in Mindanao to take part, in conjunction with the Philippine military, in
"Balikatan 02-1." These so-called "Balikatan" exercises are the largest combined training operations
involving Filipino and American troops. In theory, they are a simulation of joint military maneuvers
pursuant to the Mutual Defense Treaty,
1
a bilateral defense agreement entered into by the
Philippines and the United States in 1951.
Prior to the year 2002, the last "Balikatan" was held in 1995. This was due to the paucity of any formal
agreement relative to the treatment of United States personnel visiting the Philippines. In the
meantime, the respective governments of the two countries agreed to hold joint exercises on a
reduced scale. The lack of consensus was eventually cured when the two nations concluded the
Visiting Forces Agreement (V FA) in 1999.
The entry of American troops into Philippine soil is proximately rooted in the international anti-
terrorism campaign declared by President George W. Bush in reaction to the tragic events that
occurred on September 11, 2001. On that day, three (3) commercial aircrafts were hijacked, flown
and smashed into the twin towers of the World Trade Center in New York City and the Pentagon
building in Washington, D.C. by terrorists with alleged links to the al-Qaeda ("the Base"), a Muslim
extremist organization headed by the infamous Osama bin Laden. Of no comparable historical
parallels, these acts caused billions of dollars worth of destruction of property and incalculable loss
of hundreds of lives.
On February 1, 2002, petitioners Arthur D. Lim and Paulino P. Ersando filed this petition for certiorari
and prohibition, attacking the constitutionality of the joint exercise.
2
They were joined subsequently
by SANLAKAS and PARTIDO NG MANGGAGAWA, both party-Iist organizations, who filed a petition-
in-intervention on February 11, 2002.
Lim and Ersando filed suit in their capacities as citizens, lawyers and taxpayers. SANLAKAS and
PARTIDO, on the other hand, aver that certain members of their organization are residents of
Zamboanga and Sulu, and hence will be directly affected by the operations being conducted in
Mindanao. They likewise pray for a relaxation on the rules relative to locus standi citing the
unprecedented importance of the issue involved.
On February 71 2002 the Senate conducted a hearing on the "Balikatan" exercise wherein Vice-
President Teofisto T. Guingona, Jr., who is concurrently Secretary of Foreign. Affairs, presented the
Draft Terms of Reference (TOR).
3
Five days later, he approved the TOR, which we quote hereunder:
217

I. POLICY LEVEL
1. The Exercise shall be consistent with the Philippine Constitution and all its activities shall be
in consonance with the laws of the land and the provisions of the RP-US Visiting Forces
Agreement (VFA).
2. The conduct of this training Exercise is in accordance with pertinent United Nations
resolutions against global terrorism as understood by the respective parties.
3. No permanent US basing and support facilities shall be established. Temporary structures
such as those for troop billeting, classroom instruction and messing may be set up for use by
RP and US Forces during the Exercise.
4. The Exercise shall be implemented jointly by RP and US Exercise Co-Directors under the
authority of the Chief of Staff, AFP. In no instance will US Forces operate independently during
field training exercises (FTX). AFP and US Unit Commanders will retain command over their
respective forces under the overall authority of the Exercise Co-Directors. RP and US
participants shall comply with operational instructions of the AFP during the FTX.
5. The exercise shall be conducted and completed within a period of not more than six
months, with the projected participation of 660 US personnel and 3,800 RP Forces. The Chief
of Staff, AFP shall direct the Exercise Co-Directors to wind up and terminate the Exercise and
other activities within the six month Exercise period.
6. The Exercise is a mutual counter-terrorism advising, assisting and training Exercise relative to
Philippine efforts against the ASG, and will be conducted on the Island of Basilan. Further
advising, assisting and training exercises shall be conducted in Malagutay and the
Zamboanga area. Related activities in Cebu will be for support of the Exercise.
7. Only 160 US Forces organized in 12-man Special Forces Teams shall be deployed with AFP
field, commanders. The US teams shall remain at the Battalion Headquarters and, when
approved, Company Tactical headquarters where they can observe and assess the
performance of the AFP Forces.
8. US exercise participants shall not engage in combat, without prejudice to their right of self-
defense.
9. These terms of Reference are for purposes of this Exercise only and do not create additional
legal obligations between the US Government and the Republic of the Philippines.
II. EXERCISE LEVEL
1. TRAINING
a. The Exercise shall involve the conduct of mutual military assisting, advising and
training of RP and US Forces with the primary objective of enhancing the operational
capabilities of both forces to combat terrorism.
b. At no time shall US Forces operate independently within RP territory.
c. Flight plans of all aircraft involved in the exercise will comply with the local air traffic
regulations.
218

2. ADMINISTRATION & LOGISTICS
a. RP and US participants shall be given a country and area briefing at the start of the
Exercise. This briefing shall acquaint US Forces on the culture and sensitivities of the
Filipinos and the provisions of the VF A. The briefing shall also promote the full
cooperation on the part of the RP and US participants for the successful conduct of
the Exercise.
b. RP and US participating forces may share, in accordance with their respective laws
and regulations, in the use of their resources, equipment and other assets. They will use
their respective logistics channels.
c. Medical evaluation shall be jointly planned and executed utilizing RP and US assets
and resources.
d. Legal liaison officers from each respective party shall be appointed by the Exercise
Directors.
3. PUBLIC AFFAIRS
a. Combined RP-US Information Bureaus shall be established at the Exercise Directorate
in Zamboanga City and at GHQ, AFP in Camp Aguinaldo, Quezon City.
b. Local media relations will be the concern of the AFP and all public affairs guidelines
shall be jointly developed by RP and US Forces.
c. Socio-Economic Assistance Projects shall be planned and executed jointly by RP
and US Forces in accordance with their respective laws and regulations, and in
consultation with community and local government officials.
Contemporaneously, Assistant Secretary for American Affairs Minerva Jean A. Falcon and United
States Charge d' Affaires Robert Fitts signed the Agreed Minutes of the discussion between the Vice-
President and Assistant Secretary Kelly.
4

Petitioners Lim and Ersando present the following arguments:
I
THE PHILIPPINES AND THE UNITED STATES SIGNED THE MUTUAL DEFENSE TREATY (MDT) in 1951 TO
PROVIDE MUTUAL MILITARY ASSIST ANCE IN ACCORDANCE WITH THE 'CONSTITUTIONAL
PROCESSE-S' OF EACH COUNTRY ONLY IN THE CASE OF AN ARMED ATTACK BY AN EXTERNAL
AGGRESSOR, MEANING A THIRD COUNTRY AGAINST ONE OF THEM.
BY NO STRETCH OF THE IMAGINA TION CAN IT BE SAID THAT THE ABU SAYYAF BANDITS IN
BASILAN CONSTITUTE AN EXTERNAL ARMED FORCE THAT HAS SUBJECT THE PHILIPPINES TO AN
ARMED EXTERNAL ATTACK TO WARRANT U.S. MILITARY ASSISTANCE UNDER THE MDT OF 1951.
II
NEITHER DOES THE VFA OF 1999 AUTHORIZE AMERICAN SOLDIERS TO ENGAGE IN COMBAT
OPERATIONS IN PHILIPPINE TERRITORY, NOT EVEN TO FIRE BACK "IF FIRED UPON".
219

Substantially the same points are advanced by petitioners SANLAKAS and PARTIDO.
In his Comment, the Solicitor General points to infirmities in the petitions regarding, inter alia, Lim and
Ersando's standing to file suit, the prematurity of the action, as well as the impropriety of availing
of certiorari to ascertain a question of fact. Anent their locus standi, the Solicitor General argues
that first, they may not file suit in their capacities as, taxpayers inasmuch as it has not been shown
that "Balikatan 02-1 " involves the exercise of Congress' taxing or spending powers. Second, their
being lawyers does not invest them with sufficient personality to initiate the case, citing our ruling
in Integrated Bar of the Philippines v. Zamora.
5
Third, Lim and Ersando have failed to demonstrate the
requisite showing of direct personal injury. We agree.
It is also contended that the petitioners are indulging in speculation. The Solicitor General is of the
view that since the Terms of Reference are clear as to the extent and duration of "Balikatan 02-1,"
the issues raised by petitioners are premature, as they are based only on a fear of future violation of
the Terms of Reference. Even petitioners' resort to a special civil action for certiorari is assailed on the
ground that the writ may only issue on the basis of established facts.
Apart from these threshold issues, the Solicitor General claims that there is actually no question of
constitutionality involved. The true object of the instant suit, it is said, is to obtain an interpretation of
the V FA. The Solicitor General asks that we accord due deference to the executive determination
that "Balikatan 02-1" is covered by the VFA, considering the President's monopoly in the field of
foreign relations and her role as commander-in-chief of the Philippine armed forces.
Given the primordial importance of the issue involved, it will suffice to reiterate our view on this point
in a related case:
Notwithstanding, in view of the paramount importance and the constitutional significance of
the issues raised in the petitions, this Court, in the exercise of its sound discretion, brushes aside
the procedural barrier and takes cognizance of the petitions, as we have done in the early
Emergency Powers Cases, where we had occasion to rule:
'x x x ordinary citizens and taxpayers were allowed to question the constitutionality of several
executive orders issued by President Quirino although they were involving only an indirect
and general interest shared in common with the public. The Court dismissed the objection
that they were not proper parties and ruled that 'transcendental importance to the public of
these cases demands that they be settled promptly and definitely, brushing aside, if we must,
technicalities of procedure.' We have since then applied the exception in many other cases.
[citation omitted]
This principle was reiterated in the subsequent cases of Gonzales vs. COMELEC, Daza vs. Singson,
and Basco vs. Phil, Amusement and Gaming Corporation, where we emphatically held:
Considering however the importance to the public of the case at bar, and in keeping with
the Court's duty, under the 1987 Constitution, to determine whether or not the other branches
of the government have kept themselves within the limits of the Constitution and the laws that
they have not abused the discretion given to them, the Court has brushed aside
technicalities of procedure and has taken cognizance of this petition. xxx'
Again, in the more recent case of Kilosbayan vs. Guingona, Jr., this Court ruled that in cases
of transcendental importance, the Court may relax the standing requirements and allow a
suit to prosper even where there is no direct injury to the party claiming the right of judicial
review.
220

Although courts generally avoid having to decide a constitutional question based on the
doctrine of separation of powers, which enjoins upon the department of the government a
becoming respect for each other's act, this Court nevertheless resolves to take cognizance of
the instant petition.
6

Hence, we treat with similar dispatch the general objection to the supposed prematurity of the
action. At any rate, petitioners' concerns on the lack of any specific regulation on the latitude of
activity US personnel may undertake and the duration of their stay has been addressed in the Terms
of Reference.
The holding of "Balikatan 02-1" must be studied in the framework of the treaty antecedents to which
the Philippines bound itself. The first of these is the Mutual Defense Treaty (MDT, for brevity). The MDT
has been described as the "core" of the defense relationship between the Philippines and its
traditional ally, the United States. Its aim is to enhance the strategic and technological capabilities
of our armed forces through joint training with its American counterparts; the "Balikatan" is the largest
such training exercise directly supporting the MDT's objectives. It is this treaty to which the V FA
adverts and the obligations thereunder which it seeks to reaffirm.
The lapse of the US-Philippine Bases Agreement in 1992 and the decision not to renew it created a
vacuum in US-Philippine defense relations, that is, until it was replaced by the Visiting Forces
Agreement. It should be recalled that on October 10, 2000, by a vote of eleven to three, this Court
upheld the validity of the VFA.
7
The V FA provides the "regulatory mechanism" by which "United
States military and civilian personnel [may visit] temporarily in the Philippines in connection with
activities approved by the Philippine Government." It contains provisions relative to entry and
departure of American personnel, driving and vehicle registration, criminal jurisdiction, claims,
importation and exportation, movement of vessels and aircraft, as well as the duration of the
agreement and its termination. It is the VFA which gives continued relevance to the MDT despite the
passage of years. Its primary goal is to facilitate the promotion of optimal cooperation between
American and Philippine military forces in the event of an attack by a common foe.
The first question that should be addressed is whether "Balikatan 02-1" is covered by the Visiting
Forces Agreement. To resolve this, it is necessary to refer to the V FA itself: Not much help can be
had therefrom, unfortunately, since the terminology employed is itself the source of the problem. The
VFA permits United States personnel to engage, on an impermanent basis, in "activities," the exact
meaning of which was left undefined. The expression is ambiguous, permitting a wide scope of
undertakings subject only to the approval of the Philippine government.
8
The sole encumbrance
placed on its definition is couched in the negative, in that United States personnel must "abstain
from any activity inconsistent with the spirit of this agreement, and in particular, from any political
activity."
9
All other activities, in other words, are fair game.
We are not left completely unaided, however. The Vienna Convention on the Law of Treaties, which
contains provisos governing interpretations of international agreements, state:
SECTION 3. INTERPRETATION OF TREATIES
Article 31
General rule of interpretation
1. A treaty shall be interpreted in good faith ill accordance with the ordinary meaning to be
given to the tenus of the treaty in their context and in the light of its object and purpose.
221

2. The context for the purpose of the interpretation of a treaty shall comprise, in addition to
the text, including its preamble and annexes:
(a) any agreement relating to the treaty which was made between all the parties in
connexion with the conclusion of the treaty;
(b) any instrument which was made by one or more parties in connexion with the
conclusion of the treaty and accepted by the other parties as an instrument related to
the party .
3. There shall be taken into account, together with the context:
(a) any subsequent agreement between the parties regarding the interpretation of
the treaty or the application of its provisions;
(b) any subsequent practice in the application of the treaty which establishes the
agreement of the parties regarding its interpretation;
(c) any relevant rules of international law applicable in the relations between the
parties.
4. A special meaning shall be given to a term if it is established that the parties so intended.
Article 32
Supplementary means of interpretation
Recourse may be had to supplementary means of interpretation, including the preparatory
work of the treaty and the circumstances of its conclusion, in order to confirm the meaning
resulting from the application of article 31, or to determine the meaning when the
interpretation according to article 31 :
(a) leaves the meaning ambiguous or obscure; or
(b) leads to a result which is manifestly absurd unreasonable.
It is clear from the foregoing that the cardinal rule of interpretation must involve an examination of
the text, which is presumed to verbalize the parties' intentions. The Convention likewise dictates what
may be used as aids to deduce the meaning of terms, which it refers to as the context of the treaty,
as well as other elements may be taken into account alongside the aforesaid context. As explained
by a writer on the Convention ,
[t]he Commission's proposals (which were adopted virtually without change by the
conference and are now reflected in Articles 31 and 32 of the Convention) were clearly
based on the view that the text of a treaty must be presumed to be the authentic expression
of the intentions of the parties; the Commission accordingly came down firmly in favour of the
view that 'the starting point of interpretation is the elucidation of the meaning of the text, not
an investigation ab initio into the intentions of the parties'. This is not to say that
the travauxpreparatoires of a treaty , or the circumstances of its conclusion, are relegated to
a subordinate, and wholly ineffective, role. As Professor Briggs points out, no rigid temporal
prohibition on resort to travaux preparatoires of a treaty was intended by the use of the
phrase 'supplementary means of interpretation' in what is now Article 32 of the Vienna
222

Convention. The distinction between the general rule of interpretation and the
supplementary means of interpretation is intended rather to ensure that the supplementary
means do not constitute an alternative, autonomous method of interpretation divorced from
the general rule.
10

The Terms of Reference rightly fall within the context of the VFA.
After studied reflection, it appeared farfetched that the ambiguity surrounding the meaning of the
word .'activities" arose from accident. In our view, it was deliberately made that way to give both
parties a certain leeway in negotiation. In this manner, visiting US forces may sojourn in Philippine
territory for purposes other than military. As conceived, the joint exercises may include training on
new techniques of patrol and surveillance to protect the nation's marine resources, sea search-and-
rescue operations to assist vessels in distress, disaster relief operations, civic action projects such as
the building of school houses, medical and humanitarian missions, and the like.
Under these auspices, the VFA gives legitimacy to the current Balikatan exercises. It is only logical to
assume that .'Balikatan 02-1," a "mutual anti- terrorism advising, assisting and training exercise," falls
under the umbrella of sanctioned or allowable activities in the context of the agreement. Both the
history and intent of the Mutual Defense Treaty and the V FA support the conclusion that combat-
related activities -as opposed to combat itself -such as the one subject of the instant petition, are
indeed authorized.
That is not the end of the matter, though. Granted that "Balikatan 02-1" is permitted under the terms
of the VFA, what may US forces legitimately do in furtherance of their aim to provide advice,
assistance and training in the global effort against terrorism? Differently phrased, may American
troops actually engage in combat in Philippine territory? The Terms of Reference are explicit
enough. Paragraph 8 of section I stipulates that US exercise participants may not engage
in combat "except in self-defense." We wryly note that this sentiment is admirable in the abstract but
difficult in implementation. The target of "Balikatan 02-1 I" the Abu Sayyaf, cannot reasonably be
expected to sit idly while the battle is brought to their very doorstep. They cannot be expected to
pick and choose their targets for they will not have the luxury of doing so. We state this point if only
to signify our awareness that the parties straddle a fine line, observing the honored legal
maxim "Nemo potest facere per alium quod non potest facere per directum."
11
The indirect violation
is actually petitioners' worry, that in reality, "Balikatan 02-1 " is actually a war principally conducted
by the United States government, and that the provision on self-defense serves only as camouflage
to conceal the true nature of the exercise. A clear pronouncement on this matter thereby becomes
crucial.
In our considered opinion, neither the MDT nor the V FA allow foreign troops to engage in an
offensive war on Philippine territory. We bear in mind the salutary proscription stated in the Charter
of the United Nations, to wit:
Article 2
The Organization and its Members, in pursuit of the Purposes stated in Article 1, shall act in
accordance with the following Principles.
xxx xxx xxx xxx
4. All Members shall refrain in their international relations from the threat or use of force
against the territorial integrity or political independence of any state, or in any other manner
inconsistent with the Purposes of the United Nations.
223

xxx xxx xxx xxx
In the same manner, both the Mutual Defense Treaty and the Visiting Forces Agreement, as in all
other treaties and international agreements to which the Philippines is a party, must be read in the
context of the 1987 Constitution. In particular, the Mutual Defense Treaty was concluded way before
the present Charter, though it nevertheless remains in effect as a valid source of international
obligation. The present Constitution contains key provisions useful in determining the extent to which
foreign military troops are allowed in Philippine territory. Thus, in the Declaration of Principles and
State Policies, it is provided that:
xxx xxx xxx xxx
SEC. 2. The Philippines renounces war as an instrument of national policy, adopts the
generally accepted principles of international law as part of the law of the land and adheres
to the policy of peace, equality, justice, freedom, cooperation, and amity with all nations.
xxx xxx xxx xxx
SEC. 7. The State shall pursue an independent foreign policy. In its relations with other states
the paramount consideration shall be national sovereignty, territorial integrity, national
interest, and the right to self- determination.
SEC. 8. The Philippines, consistent with the national interest, adopts and pursues a policy of
freedom from nuclear weapons in the country.
xxx xxx xxx xxx
The Constitution also regulates the foreign relations powers of the Chief Executive when it provides
that "[n]o treaty or international agreement shall be valid and effective unless concurred in by at
least two-thirds of all the members of the Senate."
12
Even more pointedly, the Transitory Provisions
state:
Sec. 25. After the expiration in 1991 of the Agreement between the Republic of the Philippines
and the United States of America concerning Military Bases, foreign military bases, troops or
facilities shall not be allowed in the Philippines except under a treaty duly concurred in by the
Senate and, when the Congress so requires, ratified by a majority of the votes cast by the
people in a national referendum held for that purpose, and recognized as a treaty by the
other contracting state.
The aforequoted provisions betray a marked antipathy towards foreign military presence in the
country, or of foreign influence in general. Hence, foreign troops are allowed entry into the
Philippines only by way of direct exception. Conflict arises then between the fundamental law and
our obligations arising from international agreements.
A rather recent formulation of the relation of international law vis-a-vis municipal law was expressed
in Philip Morris, Inc. v. Court of Appeals,
13
to wit:
xxx Withal, the fact that international law has been made part of the law of the land does not
by any means imply the primacy of international law over national law in the municipal
sphere. Under the doctrine of incorporation as applied in most countries, rules of international
law are given a standing equal, not superior, to national legislation.
224

This is not exactly helpful in solving the problem at hand since in trying to find a middle ground, it
favors neither one law nor the other, which only leaves the hapless seeker with an unsolved
dilemma. Other more traditional approaches may offer valuable insights.
From the perspective of public international law, a treaty is favored over municipal law pursuant to
the principle ofpacta sunt servanda. Hence, "[e]very treaty in force is binding upon the parties to it
and must be performed by them in good faith."
14
Further, a party to a treaty is not allowed to "invoke
the provisions of its internal law as justification for its failure to perform a treaty."
15

Our Constitution espouses the opposing view. Witness our jurisdiction as I stated in section 5 of Article
VIII:
The Supreme Court shall have the following powers:
xxx xxx xxx xxx
(2) Review, revise, reverse, modify, or affirm on appeal or certiorari, as the law or the Rules of
Court may provide, final judgments and order of lower courts in:
(A) All cases in which the constitutionality or validity of any treaty, international or executive
agreement, law, presidential decree, proclamation, order, instruction, ordinance, or
regulation is in question.
xxx xxx xxx xxx
In Ichong v. Hernandez,
16
we ruled that the provisions of a treaty are always subject to qualification
or amendment by a subsequent law, or that it is subject to the police power of the State.
In Gonzales v. Hechanova,
17

xxx As regards the question whether an international agreement may be invalidated by our
courts, suffice it to say that the Constitution of the Philippines has clearly settled it in the
affirmative, by providing, in Section 2 of Article VIII thereof, that the Supreme Court may not
be deprived "of its jurisdiction to review, revise, reverse, modify, or affirm on appeal, certiorari,
or writ of error as the law or the rules of court may provide, final judgments and decrees of
inferior courts in -( I) All cases in which the constitutionality or validity of anytreaty, law,
ordinance, or executive order or regulation is in question." In other words, our Constitution
authorizes the nullification of a treaty, not only when it conflicts with the fundamental
law, but, also, when it runs counter to an act of Congress.
The foregoing premises leave us no doubt that US forces are prohibited / from engaging in an
offensive war on Philippine territory.
Yet a nagging question remains: are American troops actively engaged in combat alongside
Filipino soldiers under the guise of an alleged training and assistance exercise? Contrary to what
petitioners would have us do, we cannot take judicial notice of the events transpiring down south,18
as reported from the saturation coverage of the media. As a rule, we do not take cognizance of
newspaper or electronic reports per se, not because of any issue as to their truth, accuracy, or
impartiality, but for the simple reason that facts must be established in accordance with the rules of
evidence. As a result, we cannot accept, in the absence of concrete proof, petitioners' allegation
that the Arroyo government is engaged in "doublespeak" in trying to pass off as a mere training
exercise an offensive effort by foreign troops on native soil. The petitions invite us to speculate
on what is really happening in Mindanao, to issue I make factual findings on matters well beyond our
immediate perception, and this we are understandably loath to do.
225

It is all too apparent that the determination thereof involves basically a question of fact. On this
point, we must concur with the Solicitor General that the present subject matter is not a fit topic for a
special civil action forcertiorari. We have held in too many instances that questions of fact are not
entertained in such a remedy. The sole object of the writ is to correct errors of jurisdiction or grave
abuse of discretion: The phrase "grave abuse of discretion" has a precise meaning in law, denoting
abuse of discretion "too patent and gross as to amount to an evasion of a positive duty, or a virtual
refusal to perform the duty enjoined or act in contemplation of law, or where the power is exercised
in an arbitrary and despotic manner by reason of passion and personal hostility."
19

In this connection, it will not be amiss to add that the Supreme Court is not a trier of facts.
20

Under the expanded concept of judicial power under the Constitution, courts are charged with the
duty "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."
21
From the
facts obtaining, we find that the holding of "Balikatan 02-1" joint military exercise has not intruded
into that penumbra of error that would otherwise call for correction on our part. In other words,
respondents in the case at bar have not committed grave abuse of discretion amounting to lack or
excess of jurisdiction.
WHEREFORE, the petition and the petition-in-intervention are hereby DISMISSED without prejudice to
the filing of a new petition sufficient in form and substance in the proper Regional Trial Court.
SO ORDERED.

226

G.R. No. 118978 May 23, 1997
PHILIPPINE TELEGRAPH AND TELEPHONE COMPANY, * petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and GRACE DE GUZMAN, respondents.
REGALADO, J.:
Seeking relief through the extraordinary writ of certiorari, petitioner Philippine Telegraph and
Telephone Company (hereafter, PT & T) invokes the alleged concealment of civil status and
defalcation of company funds as grounds to terminate the services of an employee. That
employee, herein private respondent Grace de Guzman, contrarily argues that what really
motivated PT & T to terminate her services was her having contracted marriage during her
employment, which is prohibited by petitioner in its company policies. She thus claims that she was
discriminated against in gross violation of law, such a proscription by an employer being outlawed
by Article 136 of the Labor Code.
Grace de Guzman was initially hired by petitioner as a reliever, specifically as a "Supernumerary
Project Worker," for a fixed period from November 21, 1990 until April 20, 1991 vice one C.F. Tenorio
who went on maternity leave.
1
Under the Reliever Agreement which she signed with petitioner
company, her employment was to be immediately terminated upon expiration of the agreed
period. Thereafter, from June 10, 1991 to July 1, 1991, and from July 19, 1991 to August 8, 1991,
private respondent's services as reliever were again engaged by petitioner, this time in replacement
of one Erlinda F. Dizon who went on leave during both periods.
2
After August 8, 1991, and pursuant
to their Reliever Agreement, her services were terminated.
On September 2, 1991, private respondent was once more asked to join petitioner company as a
probationary employee, the probationary period to cover 150 days. In the job application form that
was furnished her to be filled up for the purpose, she indicated in the portion for civil status therein
that she was single although she had contracted marriage a few months earlier, that is, on May 26,
1991.
3

It now appears that private respondent had made the same representation in the two successive
reliever agreements which she signed on June 10, 1991 and July 8, 1991. When petitioner supposedly
learned about the same later, its branch supervisor in Baguio City, Delia M. Oficial, sent to private
respondent a memorandum dated January 15, 1992 requiring her to explain the discrepancy. In that
memorandum, she was reminded about the company's policy of not accepting married women for
employment.
4

In her reply letter dated January 17, 1992, private respondent stated that she was not aware of
PT&T's policy regarding married women at the time, and that all along she had not deliberately
hidden her true civil status.
5
Petitioner nonetheless remained unconvinced by her explanations.
Private respondent was dismissed from the company effective January 29, 1992,
6
which she readily
contested by initiating a complaint for illegal dismissal, coupled with a claim for non-payment of
cost of living allowances (COLA), before the Regional Arbitration Branch of the National Labor
Relations Commission in Baguio City.
At the preliminary conference conducted in connection therewith, private respondent volunteered
the information, and this was incorporated in the stipulation of facts between the parties, that she
had failed to remit the amount of P2,380.75 of her collections. She then executed a promissory note
for that amount in favor of petitioner
7
. All of these took place in a formal proceeding and with the
agreement of the parties and/or their counsel.
227

On November 23, 1993, Labor Arbiter Irenarco R. Rimando handed down a decision declaring that
private respondent, who had already gained the status of a regular employee, was illegally
dismissed by petitioner. Her reinstatement, plus payment of the corresponding back wages and
COLA, was correspondingly ordered, the labor arbiter being of the firmly expressed view that the
ground relied upon by petitioner in dismissing private respondent was clearly insufficient, and that it
was apparent that she had been discriminated against on account of her having contracted
marriage in violation of company rules.
On appeal to the National Labor Relations Commission (NLRC), said public respondent upheld the
labor arbiter and, in its decision dated April 29, 1994, it ruled that private respondent had indeed
been the subject of an unjust and unlawful discrimination by her employer, PT & T. However, the
decision of the labor arbiter was modified with the qualification that Grace de Guzman deserved to
be suspended for three months in view of the dishonest nature of her acts which should not be
condoned. In all other respects, the NLRC affirmed the decision of the labor arbiter, including the
order for the reinstatement of private respondent in her employment with PT & T.
The subsequent motion for reconsideration filed by petitioner was rebuffed by respondent NLRC in its
resolution of November 9, 1994, hence this special civil action assailing the aforestated decisions of
the labor arbiter and respondent NLRC, as well as the denial resolution of the latter.
1. Decreed in the Bible itself is the universal norm that women should be regarded with love and
respect but, through the ages, men have responded to that injunction with indifference, on the
hubristic conceit that women constitute the inferior sex. Nowhere has that prejudice against
womankind been so pervasive as in the field of labor, especially on the matter of equal employment
opportunities and standards. In the Philippine setting, women have traditionally been considered as
falling within the vulnerable groups or types of workers who must be safeguarded with preventive
and remedial social legislation against discriminatory and exploitative practices in hiring, training,
benefits, promotion and retention.
The Constitution, cognizant of the disparity in rights between men and women in almost all phases of
social and political life, provides a gamut of protective provisions. To cite a few of the primordial
ones, Section 14, Article II
8
on the Declaration of Principles and State Policies, expressly recognizes
the role of women in nation-building and commands the State to ensure, at all times, the
fundamental equality before the law of women and men. Corollary thereto, Section 3 of Article
XIII
9
(the progenitor whereof dates back to both the 1935 and 1973 Constitution) pointedly requires
the State to afford full protection to labor and to promote full employment and equality of
employment opportunities for all, including an assurance of entitlement to tenurial security of all
workers. Similarly, Section 14 of Article XIII
10
mandates that the State shall protect working women
through provisions for opportunities that would enable them to reach their full potential.
2. Corrective labor and social laws on gender inequality have emerged with more frequency in the
years since the Labor Code was enacted on May 1, 1974 as Presidential Decree No. 442, largely due
to our country's commitment as a signatory to the United Nations Convention on the Elimination of
All Forms of Discrimination Against Women (CEDAW).
11

Principal among these laws are Republic Act No. 6727
12
which explicitly prohibits discrimination
against women with respect to terms and conditions of employment, promotion, and training
opportunities; Republic Act No. 6955
13
which bans the "mail-order-bride" practice for a fee and the
export of female labor to countries that cannot guarantee protection to the rights of women
workers; Republic Act No. 7192
14
also known as the "Women in Development and Nation Building
Act," which affords women equal opportunities with men to act and to enter into contracts, and for
appointment, admission, training, graduation, and commissioning in all military or similar schools of
the Armed Forces of the Philippines and the Philippine National Police; Republic Act No.
228

7322
15
increasing the maternity benefits granted to women in the private sector; Republic Act No.
7877
16
which outlaws and punishes sexual harassment in the workplace and in the education and
training environment; and Republic Act No. 8042,
17
or the "Migrant Workers and Overseas Filipinos
Act of 1995," which prescribes as a matter of policy, inter alia, the deployment of migrant workers,
with emphasis on women, only in countries where their rights are secure. Likewise, it would not be
amiss to point out that in the Family Code,
18
women's rights in the field of civil law have been greatly
enhanced and expanded.
In the Labor Code, provisions governing the rights of women workers are found in Articles 130 to 138
thereof. Article 130 involves the right against particular kinds of night work while Article 132 ensures
the right of women to be provided with facilities and standards which the Secretary of Labor may
establish to ensure their health and safety. For purposes of labor and social legislation, a woman
working in a nightclub, cocktail lounge, massage clinic, bar or other similar establishments shall be
considered as an employee under Article 138. Article 135, on the other hand, recognizes a woman's
right against discrimination with respect to terms and conditions of employment on account simply
of sex. Finally, and this brings us to the issue at hand, Article 136 explicitly prohibits discrimination
merely by reason of the marriage of a female employee.
3. Acknowledged as paramount in the due process scheme is the constitutional guarantee of
protection to labor and security of tenure. Thus, an employer is required, as a condition sine qua
non prior to severance of the employment ties of an individual under his employ, to convincingly
establish, through substantial evidence, the existence of a valid and just cause in dispensing with the
services of such employee, one's labor being regarded as constitutionally protected property.
On the other hand, it is recognized that regulation of manpower by the company falls within the so-
called management prerogatives, which prescriptions encompass the matter of hiring, supervision
of workers, work assignments, working methods and assignments, as well as regulations on the
transfer of employees, lay-off of workers, and the discipline, dismissal, and recall of employees.
19
As
put in a case, an employer is free to regulate, according to his discretion and best business
judgment, all aspects of employment, "from hiring to firing," except in cases of unlawful
discrimination or those which may be provided by law.
20

In the case at bar, petitioner's policy of not accepting or considering as disqualified from work any
woman worker who contracts marriage runs afoul of the test of, and the right against, discrimination,
afforded all women workers by our labor laws and by no less than the Constitution. Contrary to
petitioner's assertion that it dismissed private respondent from employment on account of her
dishonesty, the record discloses clearly that her ties with the company were dissolved principally
because of the company's policy that married women are not qualified for employment in PT & T,
and not merely because of her supposed acts of dishonesty.
That it was so can easily be seen from the memorandum sent to private respondent by Delia M.
Oficial, the branch supervisor of the company, with the reminder, in the words of the latter, that
"you're fully aware that the company is not accepting married women employee (sic), as it was
verbally instructed to you."
21
Again, in the termination notice sent to her by the same branch
supervisor, private respondent was made to understand that her severance from the service was not
only by reason of her concealment of her married status but, over and on top of that, was her
violation of the company's policy against marriage ("and even told you that married women
employees are not applicable [sic] or accepted in our company.")
22
Parenthetically, this seems to
be the curious reason why it was made to appear in the initiatory pleadings that petitioner was
represented in this case only by its said supervisor and not by its highest ranking officers who would
otherwise be solidarily liable with the corporation.
23

229

Verily, private respondent's act of concealing the true nature of her status from PT & T could not be
properly characterized as willful or in bad faith as she was moved to act the way she did mainly
because she wanted to retain a permanent job in a stable company. In other words, she was
practically forced by that very same illegal company policy into misrepresenting her civil status for
fear of being disqualified from work. While loss of confidence is a just cause for termination of
employment, it should not be simulated.
24
It must rest on an actual breach of duty committed by
the employee and not on the employer's caprices.
25
Furthermore, it should never be used as a
subterfuge for causes which are improper, illegal, or unjustified.
26

In the present controversy, petitioner's expostulations that it dismissed private respondent, not
because the latter got married but because she concealed that fact, does have a hollow ring. Her
concealment, so it is claimed, bespeaks dishonesty hence the consequent loss of confidence in her
which justified her dismissal.
Petitioner would asseverate, therefore, that while it has nothing against marriage, it nonetheless
takes umbrage over the concealment of that fact. This improbable reasoning, with interstitial
distinctions, perturbs the Court since private respondent may well be minded to claim that the
imputation of dishonesty should be the other way around.
Petitioner would have the Court believe that although private respondent defied its policy against its
female employees contracting marriage, what could be an act of insubordination was
inconsequential. What it submits as unforgivable is her concealment of that marriage yet, at the
same time, declaring that marriage as a trivial matter to which it supposedly has no objection. In
other words, PT & T says it gives its blessings to its female employees contracting marriage, despite
the maternity leaves and other benefits it would consequently respond for and which obviously it
would have wanted to avoid. If that employee confesses such fact of marriage, there will be no
sanction; but if such employee conceals the same instead of proceeding to the confessional, she
will be dismissed. This line of reasoning does not impress us as reflecting its true management policy
or that we are being regaled with responsible advocacy.
This Court should be spared the ennui of strained reasoning and the tedium of propositions which
confuse through less than candid arguments. Indeed, petitioner glosses over the fact that it was its
unlawful policy against married women, both on the aspects of qualification and retention, which
compelled private respondent to conceal her supervenient marriage. It was, however, that very
policy alone which was the cause of private respondent's secretive conduct now complained of. It
is then apropos to recall the familiar saying that he who is the cause of the cause is the cause of the
evil caused.
Finally, petitioner's collateral insistence on the admission of private respondent that she supposedly
misappropriated company funds, as an additional ground to dismiss her from employment, is
somewhat insincere and self-serving. Concededly, private respondent admitted in the course of the
proceedings that she failed to remit some of her collections, but that is an altogether different story.
The fact is that she was dismissed solely because of her concealment of her marital status, and not
on the basis of that supposed defalcation of company funds. That the labor arbiter would thus
consider petitioner's submissions on this supposed dishonesty as a mere afterthought, just to bolster its
case for dismissal, is a perceptive conclusion born of experience in labor cases. For, there was no
showing that private respondent deliberately misappropriated the amount or whether her failure to
remit the same was through negligence and, if so, whether the negligence was in nature simple or
grave. In fact, it was merely agreed that private respondent execute a promissory note to refund
the same, which she did, and the matter was deemed settled as a peripheral issue in the labor case.
Private respondent, it must be observed, had gained regular status at the time of her dismissal. When
she was served her walking papers on January 29, 1992, she was about to complete the
230

probationary period of 150 days as she was contracted as a probationary employee on September
2, 1991. That her dismissal would be effected just when her probationary period was winding down
clearly raises the plausible conclusion that it was done in order to prevent her from earning security
of tenure.
27
On the other hand, her earlier stints with the company as reliever were undoubtedly
those of a regular employee, even if the same were for fixed periods, as she performed activities
which were essential or necessary in the usual trade and business of PT & T.
28
The primary standard
of determining regular employment is the reasonable connection between the activity performed
by the employee in relation to the business or trade of the employer.
29

As an employee who had therefore gained regular status, and as she had been dismissed without
just cause, she is entitled to reinstatement without loss of seniority rights and other privileges and to
full back wages, inclusive of allowances and other benefits or their monetary
equivalent.
30
However, as she had undeniably committed an act of dishonesty in concealing her
status, albeit under the compulsion of an unlawful imposition of petitioner, the three-month
suspension imposed by respondent NLRC must be upheld to obviate the impression or inference that
such act should be condoned. It would be unfair to the employer if she were to return to its fold
without any sanction whatsoever for her act which was not totally justified. Thus, her entitlement to
back wages, which shall be computed from the time her compensation was withheld up to the time
of her actual reinstatement, shall be reduced by deducting therefrom the amount corresponding to
her three months suspension.
4. The government, to repeat, abhors any stipulation or policy in the nature of that adopted by
petitioner PT & T. The Labor Code state, in no uncertain terms, as follows:
Art. 136. Stipulation against marriage. It shall be unlawful for an employer to require
as a condition of employment or continuation of employment that a woman shall not
get married, or to stipulate expressly or tacitly that upon getting married, a woman
employee shall be deemed resigned or separated, or to actually dismiss, discharge,
discriminate or otherwise prejudice a woman employee merely by reason of marriage.
This provision had a studied history for its origin can be traced to Section 8 of Presidential Decree No.
148,
31
better known as the "Women and
Child Labor Law," which amended paragraph (c), Section 12 of Republic Act No. 679,
32
entitled "An
Act to Regulate the Employment of Women and Children, to Provide Penalties for Violations Thereof,
and for Other Purposes." The forerunner to Republic Act No. 679, on the other hand, was Act No.
3071 which became law on March 16, 1923 and which regulated the employment of women and
children in shops, factories, industrial, agricultural, and mercantile establishments and other places
of labor in the then Philippine Islands.
It would be worthwhile to reflect upon and adopt here the rationalization in Zialcita, et
al. vs. Philippine Air Lines,
33
a decision that emanated from the Office of the President. There, a
policy of Philippine Air Lines requiring that prospective flight attendants must be single and that they
will be automatically separated from the service once they marry was declared void, it being
violative of the clear mandate in Article 136 of the Labor Code with regard to discrimination against
married women. Thus:
Of first impression is the incompatibility of the respondent's policy or regulation with the codal
provision of law. Respondent is resolute in its contention that Article 136 of the Labor Code
applies only to women employed in ordinary occupations and that the prohibition against
marriage of women engaged in extraordinary occupations, like flight attendants, is fair and
reasonable, considering the pecularities of their chosen profession.
We cannot subscribe to the line of reasoning pursued by respondent. All along, it knew that
the controverted policy has already met its doom as early as March 13, 1973 when
231

Presidential Decree No. 148, otherwise known as the Women and Child Labor Law, was
promulgated. But for the timidity of those affected or their labor unions in challenging the
validity of the policy, the same was able to obtain a momentary reprieve. A close look at
Section 8 of said decree, which amended paragraph (c) of Section 12 of Republic Act No.
679, reveals that it is exactly the same provision reproduced verbatim in Article 136 of the
Labor Code, which was promulgated on May 1, 1974 to take effect six (6) months later, or on
November 1, 1974.
It cannot be gainsaid that, with the reiteration of the same provision in the new Labor Code,
all policies and acts against it are deemed illegal and therefore abrogated. True, Article 132
enjoins the Secretary of Labor to establish standards that will ensure the safety and health of
women employees and in appropriate cases shall by regulation require employers to
determine appropriate minimum standards for termination in special occupations, such as
those of flight attendants, but that is precisely the factor that militates against the policy of
respondent. The standards have not yet been established as set forth in the first paragraph,
nor has the Secretary of Labor issued any regulation affecting flight attendants.
It is logical to presume that, in the absence of said standards or regulations which are as yet
to be established, the policy of respondent against marriage is patently illegal. This finds
support in Section 9 of the New Constitution, which provides:
Sec. 9. The State shall afford protection to labor, promote full employment and equality in
employment, ensure equal work opportunities regardless of sex, race, or creed, and regulate
the relations between workers and employees. The State shall assure the rights of workers to
self-organization, collective bargaining, security of tenure, and just and humane conditions of
work . . . .
Moreover, we cannot agree to the respondent's proposition that termination from
employment of flight attendants on account of marriage is a fair and reasonable standard
designed for their own health, safety, protection and welfare, as no basis has been laid
therefor. Actually, respondent claims that its concern is not so much against the continued
employment of the flight attendant merely by reason of marriage as observed by the
Secretary of Labor, but rather on the consequence of marriage-pregnancy. Respondent
discussed at length in the instant appeal the supposed ill effects of pregnancy on flight
attendants in the course of their employment. We feel that this needs no further discussion as
it had been adequately explained by the Secretary of Labor in his decision of May 2, 1976.
In a vain attempt to give meaning to its position, respondent went as far as invoking the
provisions of Articles 52 and 216 of the New Civil Code on the preservation of marriage as an
inviolable social institution and the family as a basic social institution, respectively, as bases for
its policy of non-marriage. In both instances, respondent predicates absence of a flight
attendant from her home for long periods of time as contributory to an unhappy married life.
This is pure conjecture not based on actual conditions, considering that, in this modern world,
sophisticated technology has narrowed the distance from one place to another. Moreover,
respondent overlooked the fact that married flight attendants can program their lives to
adapt to prevailing circumstances and events.
Article 136 is not intended to apply only to women employed in ordinary occupations, or it
should have categorically expressed so. The sweeping intendment of the law, be it on special
or ordinary occupations, is reflected in the whole text and supported by Article 135 that
speaks of non-discrimination on the employment of women.
The judgment of the Court of Appeals in Gualberto, et al. vs. Marinduque Mining & Industrial
Corporation
34
considered as void a policy of the same nature. In said case, respondent, in dismissing
from the service the complainant, invoked a policy of the firm to consider female employees in the
project it was undertaking as separated the moment they get married due to lack of facilities for
married women. Respondent further claimed that complainant was employed in the project with an
oral understanding that her services would be terminated when she gets married. Branding the
policy of the employer as an example of "discriminatory chauvinism" tantamount to denying equal
232

employment opportunities to women simply on account of their sex, the appellate court struck
down said employer policy as unlawful in view of its repugnance to the Civil Code, Presidential
Decree No. 148 and the Constitution.
Under American jurisprudence, job requirements which establish employer preference or conditions
relating to the marital status of an employee are categorized as a "sex-plus" discrimination where it is
imposed on one sex and not on the other. Further, the same should be evenly applied and must not
inflict adverse effects on a racial or sexual group which is protected by federal job discrimination
laws. Employment rules that forbid or restrict the employment of married women, but do not apply
to married men, have been held to violate Title VII of the United States Civil Rights Act of 1964, the
main federal statute prohibiting job discrimination against employees and applicants on the basis of,
among other things, sex.
35

Further, it is not relevant that the rule is not directed against all women but just against married
women. And, where the employer discriminates against married women, but not against married
men, the variable is sex and the discrimination is unlawful.
36
Upon the other hand, a requirement
that a woman employee must remain unmarried could be justified as a "bona fide occupational
qualification," or BFOQ, where the particular requirements of the job would justify the same, but not
on the ground of a general principle, such as the desirability of spreading work in the workplace. A
requirement of that nature would be valid provided it reflects an inherent quality reasonably
necessary for satisfactory job performance. Thus, in one case, a no-marriage rule applicable to both
male and female flight attendants, was regarded as unlawful since the restriction was not related to
the job performance of the flight attendants.
37

5. Petitioner's policy is not only in derogation of the provisions of Article 136 of the Labor Code on the
right of a woman to be free from any kind of stipulation against marriage in connection with her
employment, but it likewise assaults good morals and public policy, tending as it does to deprive a
woman of the freedom to choose her status, a privilege that by all accounts inheres in the individual
as an intangible and inalienable right.
38
Hence, while it is true that the parties to a contract may
establish any agreements, terms, and conditions that they may deem convenient, the same should
not be contrary to law, morals, good customs, public order, or public policy.
39
Carried to its logical
consequences, it may even be said that petitioner's policy against legitimate marital bonds would
encourage illicit or common-law relations and subvert the sacrament of marriage.
Parenthetically, the Civil Code provisions on the contract of labor state that the relations between
the parties, that is, of capital and labor, are not merely contractual, impressed as they are with so
much public interest that the same should yield to the common good.
40
It goes on to intone that
neither capital nor labor should visit acts of oppression against the other, nor impair the interest or
convenience of the public.
41
In the final reckoning, the danger of just such a policy against
marriage followed by petitioner PT & T is that it strikes at the very essence, ideals and purpose of
marriage as an inviolable social institution and, ultimately, of the family as the foundation of the
nation.
42
That it must be effectively interdicted here in all its indirect, disguised or dissembled forms
as discriminatory conduct derogatory of the laws of the land is not only in order but imperatively
required.
ON THE FOREGOING PREMISES, the petition of Philippine Telegraph and Telephone Company is
hereby DISMISSED for lack of merit, with double costs against petitioner.
SO ORDERED.

233

G.R. No. 144681 June 21, 2004
PROFESSIONAL REGULATION COMMISSION (PRC), petitioners,
vs.
ARLENE V. DE GUZMAN, et alrespondents.
D E C I S I O N
TINGA, J.:
This petition for review under Rule 45 of the 1997 Rules of Civil Procedure seeks to nullify the D E C I S I
O N,
1
dated May 16, 2000, of the Court of Appeals in CA-G.R. SP No. 37283. The appellate court
affirmed the judgment
2
dated December 19, 1994, of the Regional Trial Court (RTC) of Manila,
Branch 52, in Civil Case No. 93-66530. The trial court allowed the respondents to take their
physicians oath and to register as duly licensed physicians. Equally challenged is the R E S O L U T I O
N
3
promulgated on August 25, 2000 of the Court of Appeals, denying petitioners Motion for
Reconsideration.
The facts of this case are as follows:
The respondents are all graduates of the Fatima College of Medicine, Valenzuela City, Metro
Manila. They passed the Physician Licensure Examination conducted in February 1993 by the
Board of Medicine (Board). Petitioner Professional Regulation Commission (PRC) then
released their names as successful examinees in the medical licensure examination.
Shortly thereafter, the Board observed that the grades of the seventy-nine successful
examinees from Fatima College in the two most difficult subjects in the medical licensure
exam, Biochemistry (Bio-Chem) and Obstetrics and Gynecology (OB-Gyne), were unusually
and exceptionally high. Eleven Fatima examinees scored 100% in Bio-Chem and ten got 100%
in OB-Gyne, another eleven got 99% in Bio-Chem, and twenty-one scored 99% in OB-Gyne.
The Board also observed that many of those who passed from Fatima got marks of 95% or
better in both subjects, and no one got a mark lower than 90%. A comparison of the
performances of the candidates from other schools was made. The Board observed that
strangely, the unusually high ratings were true only for Fatima College examinees. It was a
record-breaking phenomenon in the history of the Physician Licensure Examination.
On June 7, 1993, the Board issued Resolution No. 19, withholding the registration as physicians of all
the examinees from the Fatima College of Medicine.
4
The PRC asked the National Bureau of
Investigation (NBI) to investigate whether any anomaly or irregularity marred the February 1993
Physician Licensure Examination.
Prior to the NBI investigation, the Board requested Fr. Bienvenido F. Nebres, S.J., an expert
mathematician and authority in statistics, and later president of the Ateneo de Manila University, to
conduct a statistical analysis of the results in Bio-Chem and Ob-Gyne of the said examination.
On June 10, 1993, Fr. Nebres submitted his report. He reported that a comparison of the scores in Bio-
Chem and Ob-Gyne, of the Fatima College examinees with those of examinees from De La Salle
University and Perpetual Help College of Medicine showed that the scores of Fatima College
examinees were not only incredibly high but unusually clustered close to each other. He concluded
that there must be some unusual reason creating the clustering of scores in the two subjects. It must
be a cause "strong enough to eliminate the normal variations that one should expect from the
examinees [of Fatima College] in terms of talent, effort, energy, etc."
5

234

For its part, the NBI found that "the questionable passing rate of Fatima examinees in the [1993]
Physician Examination leads to the conclusion that the Fatima examinees gained early access to
the test questions."
6

On July 5, 1993, respondents Arlene V. De Guzman, Violeta V. Meneses, Celerina S. Navarro, Jose
Ramoncito P. Navarro, Arnel V. Herrera, and Geraldine Elizabeth M. Pagilagan (Arlene V. De
Guzman et al., for brevity) filed a special civil action for mandamus, with prayer for preliminary
mandatory injunction docketed as Civil Case No. 93-66530 with the Regional Trial Court (RTC) of
Manila, Branch 52. Their petition was adopted by the other respondents as intervenors.
Meanwhile, the Board issued Resolution No. 26, dated July 21, 1993, charging respondents with
"immorality, dishonest conduct, fraud, and deceit" in connection with the Bio-Chem and Ob-Gyne
examinations. It recommended that the test results of the Fatima examinees be nullified. The case
was docketed as Adm. Case No. 1687 by the PRC.
On July 28, 1993, the RTC issued an Order in Civil Case No. 93-66530 granting the preliminary
mandatory injunction sought by the respondents. It ordered the petitioners to administer the
physicians oath to Arlene V. De Guzman et al., and enter their names in the rolls of the PRC.
The petitioners then filed a special civil action for certiorari with the Court of Appeals to set aside the
mandatory injunctive writ, docketed as CA-G.R. SP No. 31701.
On October 21, 1993, the appellate court decided CA-G.R. SP No. 31701, with the dispositive portion
of theDecision ordaining as follows:
WHEREFORE, this petition is GRANTED. Accordingly, the writ of preliminary mandatory
injunction issued by the lower court against petitioners is hereby nullified and set aside.
SO ORDERED.
7

Arlene V. de Guzman, et al., then elevated the foregoing Decision to this Court in G.R. No. 112315. In
ourResolution dated May 23, 1994, we denied the petition for failure to show reversible error on the
part of the appellate court.
Meanwhile, on November 22, 1993, during the pendency of the instant petition, the pre-trial
conference in Civil Case No. 93-66530 was held. Then, the parties, agreed to reduce the testimonies
of their respective witnesses to sworn questions-and-answers. This was without prejudice to cross-
examination by the opposing counsel.
On December 13, 1993, petitioners counsel failed to appear at the trial in the mistaken belief that
the trial was set for December 15. The trial court then ruled that petitioners waived their right to cross-
examine the witnesses.
On January 27, 1994, counsel for petitioners filed a Manifestation and Motion stating the reasons for
her non-appearance and praying that the cross-examination of the witnesses for the opposing
parties be reset. The trial court denied the motion for lack of notice to adverse counsel. It also
denied the Motion for Reconsideration that followed on the ground that adverse counsel was
notified less than three (3) days prior to the hearing.
Meanwhile, to prevent the PRC and the Board from proceeding with Adm. Case No. 1687, the
respondents herein moved for the issuance of a restraining order, which the lower court granted in
its Order dated April 4, 1994.
235

The petitioners then filed with this Court a petition for certiorari docketed as G.R. No. 115704, to
annul the Ordersof the trial court dated November 13, 1993, February 28, 1994, and April 4, 1994. We
referred the petition to the Court of Appeals where it was docketed as CA-G.R. SP No. 34506.
On August 31, 1994, the appellate court decided CA-G.R. SP No. 34506 as follows:
WHEREFORE, the present petition for certiorari with prayer for temporary restraining
order/preliminary injunction is GRANTED and the Orders of December 13, 1993, February 7,
1994, February 28, 1994, and April 4, 1994 of the RTC-Manila, Branch 52, and all further
proceedings taken by it in Special Civil Action No. 93-66530 are hereby DECLARED NULL and
VOID. The said RTC-Manila is ordered to allow petitioners counsel to cross-examine the
respondents witnesses, to allow petitioners to present their evidence in due course of trial,
and thereafter to decide the case on the merits on the basis of the evidence of the parties.
Costs against respondents.
IT IS SO ORDERED.
8

The trial was then set and notices were sent to the parties.
A day before the first hearing, on September 22, 1994, the petitioners filed an Urgent Ex-Parte
Manifestation and Motion praying for the partial reconsideration of the appellate courts decision in
CA-G.R. SP No. 34506, and for the outright dismissal of Civil Case No. 93-66530. The petitioners asked
for the suspension of the proceedings.
In its Order dated September 23, 1994, the trial court granted the aforesaid motion, cancelled the
scheduled hearing dates, and reset the proceedings to October 21 and 28, 1994.
Meanwhile, on October 25, 1994, the Court of Appeals denied the partial motion for reconsideration
in CA-G.R. SP No. 34506. Thus, petitioners filed with the Supreme Court a petition for review docketed
as G.R. No. 117817, entitled Professional Regulation Commission, et al. v. Court of Appeals, et al.
On November 11, 1994, counsel for the petitioners failed to appear at the trial of Civil Case No. 93-
66530. Upon motion of the respondents herein, the trial court ruled that herein petitioners waived
their right to cross-examine the herein respondents. Trial was reset to November 28, 1994.
On November 25, 1994, petitioners counsel moved for the inhibition of the trial court judge for
alleged partiality. On November 28, 1994, the day the Motion to Inhibit was to be heard, petitioners
failed to appear. Thus, the trial court denied the Motion to Inhibit and declared Civil Case No. 93-
66530 deemed submitted for decision.
On December 19, 1994, the trial court handed down its judgment in Civil Case No. 93-66530, the fallo
of which reads:
WHEREFORE, judgment is rendered ordering the respondents to allow the petitioners and
intervenors (except those with asterisks and footnotes in pages 1 & 2 of this decision) [sic],
9
to
take the physicians oath and to register them as physicians.
It should be made clear that this decision is without prejudice to any administrative
disciplinary action which may be taken against any of the petitioners for such causes and in
the manner provided by law and consistent with the requirements of the Constitution as any
other professionals.
No costs.
236

SO ORDERED.
10

As a result of these developments, petitioners filed with this Court a petition for review on certiorari
docketed as G.R. No. 118437, entitled Professional Regulation Commission v. Hon. David G. Nitafan,
praying inter alia, that (1) G.R. No. 118437 be consolidated with G.R. No. 117817; (2) the decision of
the Court of Appeals dated August 31, 1994 in CA-G.R. SP No. 34506 be nullified for its failure to
decree the dismissal of Civil Case No. 93-66530, and in the alternative, to set aside the decision of
the trial court in Civil Case No. 93-66530, order the trial court judge to inhibit himself, and Civil Case
No. 93-66530 be re-raffled to another branch.
On December 26, 1994, the petitioners herein filed their Notice of Appeal
11
in Civil Case No. 93-
66530, thereby elevating the case to the Court of Appeals, where it was docketed as CA-G.R. SP No.
37283.
In our Resolution of June 7, 1995, G.R. No. 118437 was consolidated with G.R. No. 117817.
On July 9, 1998, we disposed of G.R. Nos. 117817 and 118437 in this wise:
WHEREFORE, the petition in G.R. No. 117817 is DISMISSED for being moot. The petition in G.R.
No. 118437 is likewise DISMISSED on the ground that there is a pending appeal before the
Court of Appeals. Assistant Solicitor General Amparo M. Cabotaje-Tang is advised to be more
circumspect in her dealings with the courts as a repetition of the same or similar acts will be
dealt with accordingly.
SO ORDERED.
12

While CA-G.R. SP No. 37283 was awaiting disposition by the appellate court, Arnel V. Herrera, one of
the original petitioners in Civil Case No. 93-66530, joined by twenty-seven intervenors, to wit:
Fernando F. Mandapat, Ophelia C. Hidalgo, Bernadette T. Mendoza, Ruby B. Lantin-Tan, Fernando T.
Cruz, Marissa A. Regodon, Ma. Eloisa Q. Mallari-Largoza, Cheryl R. Triguero, Joseph A. Jao,
Bernadette H. Cabuhat, Evelyn S. Acosta-Cabanes, Laura M. Santos, Maritel M. Echiverri, Bernadette
C. Escusa, Carlosito C. Domingo, Alicia S. Lizano, Elnora R. Raqueno-Rabaino, Saibzur N. Edding,
Derileen D. Dorado-Edding, Robert B. Sanchez, Maria Rosario L. Leonor-Lacandula, Geraldine
Elizabeth M. Pagilagan-Palma, Margarita Belinda L. Vicencio-Gamilla, Herminigilda E. Conejos,
Leuvina P. Chico-Paguio, Elcin C. Arriola-Ocampo, and Jose Ramoncito P. Navarro, manifested that
they were no longer interested in proceeding with the case and moved for its dismissal. A similar
manifestation and motion was later filed by intervenors Mary Jean I. Yeban-Merlan, Michael L.
Serrano, Norma G. Lafavilla, Arnulfo A. Salvador, Belinda C. Rabara, Yolanda P. Unica, Dayminda G.
Bontuyan, Clarissa B. Baclig, Ma. Luisa S. Gutierrez, Rhoneil R. Deveraturda, Aleli A. Gollayan, Evelyn
C. Cundangan, Frederick D. Francisco, Violeta V. Meneses, Melita J. Caedo, Clarisa SJ. Nicolas,
Federico L. Castillo, Karangalan D. Serrano, Danilo A. Villaver, Grace E. Uy, Lydia C. Chan, and
Melvin M. Usita. The Court of Appeals ruled that its decision in CA-G.R. SP No. 37283 would not apply
to them.
On May 16, 2000, the Court of Appeals decided CA-G.R. SP No. 37283, with the following fallo, to wit:
WHEREFORE, finding no reversible error in the decision appealed from, We hereby AFFIRM the
same and DISMISS the instant appeal.
No pronouncement as to costs.
SO ORDERED.
13

237

In sustaining the trial courts decision, the appellate court ratiocinated that the respondents
complied with all the statutory requirements for admission into the licensure examination for
physicians in February 1993. They all passed the said examination. Having fulfilled the requirements
of Republic Act No. 2382,
14
they should be allowed to take their oaths as physicians and be
registered in the rolls of the PRC.
Hence, this petition raising the following issues:
I
WHETHER OR NOT RESPONDENTS HAVE A VALID CAUSE OF ACTION FOR MANDAMUS AGAINST
PETITIONERS IN THE LIGHT OF THE RESOLUTION OF THIS HONORABLE COURT IN G.R. NO. 112315
AFFIRMING THE COURT OF APPEALS DECISION DECLARING THAT IF EVER THERE IS SOME DOUBT
AS TO THE MORAL FITNESS OF EXAMINEES, THE ISSUANCE OF LICENSE TO PRACTICE MEDICINE IS
NOT AUTOMATICALLY GRANTED TO THE SUCCESSFUL EXAMINEES.
II
WHETHER OR NOT THE PETITION FOR MANDAMUS COULD PROCEED DESPITE THE PENDENCY OF
ADMINISTRATIVE CASE NO. 1687, WHICH WAS PRECISELY LODGED TO DETERMINE THE MORAL
FITNESS OF RESPONDENTS TO BECOME DOCTORS.
15

To our mind, the only issue is: Did the Court of Appeals commit a reversible error of law in sustaining
the judgment of the trial court that respondents are entitled to a writ of mandamus?
The petitioners submit that a writ of mandamus will not lie in this case. They point out that for a writ of
mandamus to issue, the applicant must have a well-defined, clear and certain legal right to the
thing demanded and it is the duty of the respondent to perform the act required. Thus, mandamus
may be availed of only when the duty sought to be performed is a ministerial and not a
discretionary one. The petitioners argue that the appellate courts decision in CA-G.R. SP No. 37283
upholding the decision of the trial court in Civil Case No. 93-66530 overlooked its own
pronouncement in CA-G.R. SP No. 31701. The Court of Appeals held in CA-G.R. SP No. 31701 that the
issuance of a license to engage in the practice of medicine becomes discretionary on the PRC if
there exists some doubt that the successful examinee has not fully met the requirements of the law.
The petitioners stress that this Courts Resolution dated May 24, 1994 in G.R. No. 112315 held that
there was no showing "that the Court of Appeals had committed any reversible error in rendering
the questioned judgment" in CA-G.R. SP No. 31701. The petitioners point out that our Resolution in
G.R. No. 112315 has long become final and executory.
Respondents counter that having passed the 1993 licensure examinations for physicians, the
petitioners have the obligation to administer to them the oath as physicians and to issue their
certificates of registration as physicians pursuant to Section 20
16
of Rep. Act No. 2382. The Court of
Appeals in CA-G.R. SP No. 37283, found that respondents complied with all the requirements of Rep.
Act No. 2382. Furthermore, respondents were admitted by the Medical Board to the licensure
examinations and had passed the same. Hence, pursuant to Section 20 of Rep. Act No. 2382, the
petitioners had the obligation to administer their oaths as physicians and register them.
Mandamus is a command issuing from a court of competent jurisdiction, in the name of the state or
the sovereign, directed to some inferior court, tribunal, or board, or to some corporation or person
requiring the performance of a particular duty therein specified, which duty results from the official
station of the party to whom the writ is directed, or from operation of law.
17
Section 3 of Rule 65
18
of
the 1997 Rules of Civil Procedure outlines two situations when a writ of mandamus may issue, when
any tribunal, corporation, board, officer or person unlawfully (1) neglects the performance of an act
238

which the law specifically enjoins as a duty resulting from an office, trust, or station; or (2) excludes
another from the use and enjoyment of a right or office to which the other is entitled.
We shall discuss the issues successively.
1. On The Existence of a Duty of the Board of Medicine To Issue Certificates of Registration as
Physicians under Rep. Act No. 2382.
For mandamus to prosper, there must be a showing that the officer, board, or official concerned,
has a clear legal duty, not involving discretion.
19
Moreover, there must be statutory authority for the
performance of the act,
20
and the performance of the duty has been refused.
21
Thus, it must be
pertinently asked now: Did petitioners have the duty to administer the Hippocratic Oath and register
respondents as physicians under the Medical Act of 1959?
As found by the Court of Appeals, on which we agree on the basis of the records:
It bears emphasizing herein that petitioner-appellees and intervenor-appellees have fully
complied with all the statutory requirements for admission into the licensure examinations for
physicians conducted and administered by the respondent-appellants on February 12, 14, 20
and 21, 1993. Stress, too, must be made of the fact that all of them successfully passed the
same examinations.
22

The crucial query now is whether the Court of Appeals erred in concluding that petitioners should
allow the respondents to take their oaths as physicians and register them, steps which would enable
respondents to practice the medical profession
23
pursuant to Section 20 of the Medical Act of 1959?
The appellate court relied on a single provision, Section 20 of Rep. Act No. 2382, in concluding that
the petitioners had the ministerial obligation to administer the Hippocratic Oath to respondents and
register them as physicians. But it is a basic rule in statutory construction that each part of a statute
should be construed in connection with every other part to produce a harmonious whole, not
confining construction to only one section.
24
The intent or meaning of the statute should be
ascertained from the statute taken as a whole, not from an isolated part of the provision.
Accordingly, Section 20, of Rep. Act No. 2382, as amended should be read in conjunction with the
other provisions of the Act. Thus, to determine whether the petitioners had the ministerial obligation
to administer the Hippocratic Oath to respondents and register them as physicians, recourse must
be had to the entirety of the Medical Act of 1959.
A careful reading of Section 20 of the Medical Act of 1959 discloses that the law uses the word "shall"
with respect to the issuance of certificates of registration. Thus, the petitioners "shall sign and issue
certificates of registration to those who have satisfactorily complied with the requirements of the
Board." In statutory construction the term "shall" is a word of command. It is given imperative
meaning. Thus, when an examinee satisfies the requirements for the grant of his physicians license,
the Board is obliged to administer to him his oath and register him as a physician, pursuant to Section
20 and par. (1) of Section 22
25
of the Medical Act of 1959.
However, the surrounding circumstances in this case call for serious inquiry concerning the
satisfactory compliance with the Board requirements by the respondents. The unusually high scores
in the two most difficult subjects was phenomenal, according to Fr. Nebres, the consultant of PRC on
the matter, and raised grave doubts about the integrity, if not validity, of the tests. These doubts
have to be appropriately resolved.
Under the second paragraph of Section 22, the Board is vested with the power to conduct
administrative investigations and "disapprove applications for examination or registration," pursuant
239

to the objectives of Rep. Act No. 2382 as outlined in Section 1
26
thereof. In this case, after the
investigation, the Board filed before the PRC, Adm. Case No. 1687 against the respondents to
ascertain their moral and mental fitness to practice medicine, as required by Section 9
27
of Rep. Act
No. 2382. In its Decision dated July 1, 1997, the Board ruled:
WHEREFORE, the BOARD hereby CANCELS the respondents[] examination papers in the
Physician Licensure Examinations given in February 1993 and further DEBARS them from taking
any licensure examination for a period of ONE (1) YEAR from the date of the promulgation of
this DECISION. They may, if they so desire, apply for the scheduled examinations for physicians
after the lapse of the period imposed by the BOARD.
SO ORDERED.
28

Until the moral and mental fitness of the respondents could be ascertained, according to
petitioners, the Board has discretion to hold in abeyance the administration of the Hippocratic Oath
and the issuance of the certificates to them. The writ of mandamus does not lie to compel
performance of an act which is not duly authorized.
The respondents nevertheless argue that under Section 20, the Board shall not issue a certificate of
registration only in the following instances: (1) to any candidate who has been convicted by a court
of competent jurisdiction of any criminal offense involving moral turpitude; (2) or has been found
guilty of immoral or dishonorable conduct after the investigation by the Board; or (3) has been
declared to be of unsound mind. They aver that none of these circumstances are present in their
case.
Petitioners reject respondents argument. We are informed that in Board Resolution No. 26,
29
dated
July 21, 1993, the Board resolved to file charges against the examinees from Fatima College of
Medicine for "immorality, dishonesty, fraud, and deceit in the Obstetrics-Gynecology and
Biochemistry examinations." It likewise sought to cancel the examination results obtained by the
examinees from the Fatima College.
Section 8
30
of Rep. Act No. 2382 prescribes, among others, that a person who aspires to practice
medicine in the Philippines, must have "satisfactorily passed the corresponding Board Examination."
Section 22, in turn, provides that the oath may only be administered "to physicians who qualified in
the examinations." The operative word here is "satisfactorily," defined as "sufficient to meet a
condition or obligation" or "capable of dispelling doubt or ignorance."
31
Gleaned from Board
Resolution No. 26, the licensing authority apparently did not find that the respondents "satisfactorily
passed" the licensure examinations. The Board instead sought to nullify the examination results
obtained by the respondents.
2. On the Right Of The Respondents To Be Registered As Physicians
The function of mandamus is not to establish a right but to enforce one that has been established by
law. If no legal right has been violated, there can be no application of a legal remedy, and the writ
of mandamus is a legal remedy for a legal right.
32
There must be a well-defined, clear and certain
legal right to the thing demanded.
33
It is long established rule that a license to practice medicine is a
privilege or franchise granted by the government.
34

It is true that this Court has upheld the constitutional right
35
of every citizen to select a profession or
course of study subject to a fair, reasonable, and equitable admission and academic
requirements.
36
But like all rights and freedoms guaranteed by the Charter, their exercise may be so
regulated pursuant to the police power of the State to safeguard health, morals, peace, education,
order, safety, and general welfare of the people.
37
Thus, persons who desire to engage in the
240

learned professions requiring scientific or technical knowledge may be required to take an
examination as a prerequisite to engaging in their chosen careers. This regulation takes particular
pertinence in the field of medicine, to protect the public from the potentially deadly effects of
incompetence and ignorance among those who would practice medicine. In a previous case, it
may be recalled, this Court has ordered the Board of Medical Examiners to annul both its resolution
and certificate authorizing a Spanish subject, with the degree of Licentiate in Medicine and Surgery
from the University of Barcelona, Spain, to practice medicine in the Philippines, without first passing
the examination required by the Philippine Medical Act.
38
In another case worth noting, we upheld
the power of the State to upgrade the selection of applicants into medical schools through
admission tests.
39

It must be stressed, nevertheless, that the power to regulate the exercise of a profession or pursuit of
an occupation cannot be exercised by the State or its agents in an arbitrary, despotic, or oppressive
manner. A political body that regulates the exercise of a particular privilege has the authority to
both forbid and grant such privilege in accordance with certain conditions. Such conditions may
not, however, require giving up ones constitutional rights as a condition to acquiring the
license.
40
Under the view that the legislature cannot validly bestow an arbitrary power to grant or
refuse a license on a public agency or officer, courts will generally strike down license legislation that
vests in public officials discretion to grant or refuse a license to carry on some ordinarily lawful
business, profession, or activity without prescribing definite rules and conditions for the guidance of
said officials in the exercise of their power.
41

In the present case, the aforementioned guidelines are provided for in Rep. Act No. 2382, as
amended, which prescribes the requirements for admission to the practice of medicine, the
qualifications of candidates for the board examinations, the scope and conduct of the
examinations, the grounds for denying the issuance of a physicians license, or revoking a license
that has been issued. Verily, to be granted the privilege to practice medicine, the applicant must
show that he possesses all the qualifications and none of the disqualifications. Furthermore, it must
appear that he has fully complied with all the conditions and requirements imposed by the law and
the licensing authority. Should doubt taint or mar the compliance as being less than satisfactory,
then the privilege will not issue. For said privilege is distinguishable from a matter of right, which may
be demanded if denied. Thus, without a definite showing that the aforesaid requirements and
conditions have been satisfactorily met, the courts may not grant the writ of mandamus to secure
said privilege without thwarting the legislative will.
3. On the Ripeness of the Petition for Mandamus
Lastly, the petitioners herein contend that the Court of Appeals should have dismissed the petition
for mandamus below for being premature. They argue that the administrative remedies had not
been exhausted. The records show that this is not the first time that petitioners have sought the
dismissal of Civil Case No. 93-66530. This issue was raised in G.R. No. 115704, which petition we
referred to the Court of Appeals, where it was docketed as CA-G.R. SP No. 34506. On motion for
reconsideration in CA-G.R. SP No. 34506, the appellate court denied the motion to dismiss on the
ground that the prayers for the nullification of the order of the trial court and the dismissal of Civil
Case No. 93-66530 were inconsistent reliefs. In G.R. No. 118437, the petitioners sought to nullify the
decision of the Court of Appeals in CA-G.R. SP No. 34506 insofar as it did not order the dismissal of
Civil Case No. 93-66530. In our consolidated decision, dated July 9, 1998, in G.R. Nos. 117817 &
118437, this Court speaking through Justice Bellosillo opined that:
Indeed, the issue as to whether the Court of Appeals erred in not ordering the dismissal of Civil
Case No. 93-66530 sought to be resolved in the instant petition has been rendered
meaningless by an event taking place prior to the filing of this petition and denial thereof
should follow as a logical consequence.
42
There is no longer any justiciable controversy so
241

that any declaration thereon would be of no practical use or value.
43
It should be recalled
that in its decision of 19 December 1994 the trial court granted the writ of mandamus prayed
for by private respondents, which decision was received by petitioners on 20 December 1994.
Three (3) days after, or on 23 December 1994, petitioners filed the instant petition. By then, the
remedy available to them was to appeal the decision to the Court of Appeals, which they in
fact did, by filing a notice of appeal on 26 December 1994.
44

The petitioners have shown no cogent reason for us to reverse the aforecited ruling. Nor will their
reliance upon the doctrine of the exhaustion of administrative remedies in the instant case advance
their cause any.
Section 26
45
of the Medical Act of 1959 provides for the administrative and judicial remedies that
respondents herein can avail to question Resolution No. 26 of the Board of Medicine, namely: (a)
appeal the unfavorable judgment to the PRC; (b) should the PRC ruling still be unfavorable, to
elevate the matter on appeal to the Office of the President; and (c) should they still be unsatisfied,
to ask for a review of the case or to bring the case to court via a special civil action of certiorari.
Thus, as a rule, mandamus will not lie when administrative remedies are still available.
46
However, the
doctrine of exhaustion of administrative remedies does not apply where, as in this case, a pure
question of law is raised.
47
On this issue, no reversible error may, thus, be laid at the door of the
appellate court in CA-G.R. SP No. 37283, when it refused to dismiss Civil Case No. 93-66530.
As we earlier pointed out, herein respondents Arnel V. Herrera, et al manifested to the Court of
Appeals during the pendency of CA-G.R. SP No. 37283, that they were no longer interested in
proceeding with the case and moved for its dismissal insofar as they were concerned. A similar
manifestation and motion were later filed by intervenors Mary Jean I. Yeban-Merlanet al. Following
these manifestations and motions, the appellate court in CA-G.R. SP No. 37283 decreed that its
ruling would not apply to them. Thus, inasmuch as the instant case is a petition for review of the
appellate courts ruling in CA-G.R. SP No. 37283, a decision which is inapplicable to the
aforementioned respondents will similarly not apply to them.
As to Achilles J. Peralta, Evelyn O. Ramos, Sally B. Bunagan, Rogelio B. Ancheta, Oscar H. Padua, Jr.,
Evelyn D. Grajo, Valentino P. Arboleda, Carlos M. Bernardo, Jr., Mario D. Cuaresma, Violeta C.
Felipe, Percival H. Pangilinan, Corazon M. Cruz and Samuel B. Bangoy, herein decision shall not
apply pursuant to the Orders of the trial court in Civil Case No. 93-66530, dropping their names from
the suit.
Consequently, this Decision is binding only on the remaining respondents, namely: Arlene V. de
Guzman, Celerina S. Navarro, Rafael I. Tolentino, Bernardita B. Sy, Gloria T. Jularbal, Hubert S.
Nazareno, Nancy J. Chavez, Ernesto L. Cue, Herminio V. Fernandez, Jr., Maria Victoria M.
Lacsamana and Merly D. Sta. Ana, as well as the petitioners.
WHEREFORE, the instant petition is GRANTED. Accordingly, (1) the assailed decision dated May 16,
2000, of the Court of Appeals, in CA-G.R. SP No. 37283, which affirmed the judgment dated
December 19, 1994, of the Regional Trial Court of Manila, Branch 52, in Civil Case No. 93-66530,
ordering petitioners to administer the physicians oath to herein respondents as well as the resolution
dated August 25, 2000, of the appellate court, denying the petitioners motion for reconsideration,
are REVERSED and SET ASIDE; and (2) the writ of mandamus, issued in Civil Case No. 93-66530, and
affirmed by the appellate court in CA-G.R. SP No. 37283 is NULLIFIED AND SET ASIDE.
SO ORDERED.

242

G.R. No. 101083 July 30, 1993
JUAN ANTONIO, ANNA ROSARIO and JOSE ALFONSO, all surnamed OPOSA, et al petitioners,
vs.
THE HONORABLE FULGENCIO S. FACTORAN, JR., in his capacity as the Secretary of the Department of
Environment and Natural Resources, and THE HONORABLE ERIBERTO U. ROSARIO, Presiding Judge of
the RTC, Makati, Branch 66, respondents.
DAVIDE, JR., J.:
In a broader sense, this petition bears upon the right of Filipinos to a balanced and healthful ecology
which the petitioners dramatically associate with the twin concepts of "inter-generational
responsibility" and "inter-generational justice." Specifically, it touches on the issue of whether the said
petitioners have a cause of action to "prevent the misappropriation or impairment" of Philippine
rainforests and "arrest the unabated hemorrhage of the country's vital life support systems and
continued rape of Mother Earth."
The controversy has its genesis in Civil Case No. 90-77 which was filed before Branch 66 (Makati,
Metro Manila) of the Regional Trial Court (RTC), National Capital Judicial Region. The principal
plaintiffs therein, now the principal petitioners, are all minors duly represented and joined by their
respective parents. Impleaded as an additional plaintiff is the Philippine Ecological Network, Inc.
(PENI), a domestic, non-stock and non-profit corporation organized for the purpose of, inter alia,
engaging in concerted action geared for the protection of our environment and natural resources.
The original defendant was the Honorable Fulgencio S. Factoran, Jr., then Secretary of the
Department of Environment and Natural Resources (DENR). His substitution in this petition by the new
Secretary, the Honorable Angel C. Alcala, was subsequently ordered upon proper motion by the
petitioners.
1
The complaint
2
was instituted as a taxpayers' class suit
3
and alleges that the plaintiffs
"are all citizens of the Republic of the Philippines, taxpayers, and entitled to the full benefit, use and
enjoyment of the natural resource treasure that is the country's virgin tropical forests." The same was
filed for themselves and others who are equally concerned about the preservation of said resource
but are "so numerous that it is impracticable to bring them all before the Court." The minors further
asseverate that they "represent their generation as well as generations yet unborn."
4
Consequently,
it is prayed for that judgment be rendered:
. . . ordering defendant, his agents, representatives and other persons acting in his
behalf to
(1) Cancel all existing timber license agreements in the country;
(2) Cease and desist from receiving, accepting, processing, renewing or approving
new timber license agreements.
and granting the plaintiffs ". . . such other reliefs just and equitable under the premises."
5

The complaint starts off with the general averments that the Philippine archipelago of 7,100 islands
has a land area of thirty million (30,000,000) hectares and is endowed with rich, lush and verdant
rainforests in which varied, rare and unique species of flora and fauna may be found; these
rainforests contain a genetic, biological and chemical pool which is irreplaceable; they are also the
habitat of indigenous Philippine cultures which have existed, endured and flourished since time
immemorial; scientific evidence reveals that in order to maintain a balanced and healthful ecology,
the country's land area should be utilized on the basis of a ratio of fifty-four per cent (54%) for forest
cover and forty-six per cent (46%) for agricultural, residential, industrial, commercial and other uses;
the distortion and disturbance of this balance as a consequence of deforestation have resulted in a
243

host of environmental tragedies, such as (a) water shortages resulting from drying up of the water
table, otherwise known as the "aquifer," as well as of rivers, brooks and streams, (b) salinization of the
water table as a result of the intrusion therein of salt water, incontrovertible examples of which may
be found in the island of Cebu and the Municipality of Bacoor, Cavite, (c) massive erosion and the
consequential loss of soil fertility and agricultural productivity, with the volume of soil eroded
estimated at one billion (1,000,000,000) cubic meters per annum approximately the size of the
entire island of Catanduanes, (d) the endangering and extinction of the country's unique, rare and
varied flora and fauna, (e) the disturbance and dislocation of cultural communities, including the
disappearance of the Filipino's indigenous cultures, (f) the siltation of rivers and seabeds and
consequential destruction of corals and other aquatic life leading to a critical reduction in marine
resource productivity, (g) recurrent spells of drought as is presently experienced by the entire
country, (h) increasing velocity of typhoon winds which result from the absence of windbreakers, (i)
the floodings of lowlands and agricultural plains arising from the absence of the absorbent
mechanism of forests, (j) the siltation and shortening of the lifespan of multi-billion peso dams
constructed and operated for the purpose of supplying water for domestic uses, irrigation and the
generation of electric power, and (k) the reduction of the earth's capacity to process carbon
dioxide gases which has led to perplexing and catastrophic climatic changes such as the
phenomenon of global warming, otherwise known as the "greenhouse effect."
Plaintiffs further assert that the adverse and detrimental consequences of continued and
deforestation are so capable of unquestionable demonstration that the same may be submitted as
a matter of judicial notice. This notwithstanding, they expressed their intention to present expert
witnesses as well as documentary, photographic and film evidence in the course of the trial.
As their cause of action, they specifically allege that:
CAUSE OF ACTION
7. Plaintiffs replead by reference the foregoing allegations.
8. Twenty-five (25) years ago, the Philippines had some sixteen (16) million hectares of
rainforests constituting roughly 53% of the country's land mass.
9. Satellite images taken in 1987 reveal that there remained no more than 1.2 million
hectares of said rainforests or four per cent (4.0%) of the country's land area.
10. More recent surveys reveal that a mere 850,000 hectares of virgin old-growth
rainforests are left, barely 2.8% of the entire land mass of the Philippine archipelago
and about 3.0 million hectares of immature and uneconomical secondary growth
forests.
11. Public records reveal that the defendant's, predecessors have granted timber
license agreements ('TLA's') to various corporations to cut the aggregate area of 3.89
million hectares for commercial logging purposes.
A copy of the TLA holders and the corresponding areas covered is hereto attached as
Annex "A".
12. At the present rate of deforestation, i.e. about 200,000 hectares per annum or 25
hectares per hour nighttime, Saturdays, Sundays and holidays included the
Philippines will be bereft of forest resources after the end of this ensuing decade, if not
earlier.
244

13. The adverse effects, disastrous consequences, serious injury and irreparable
damage of this continued trend of deforestation to the plaintiff minor's generation and
to generations yet unborn are evident and incontrovertible. As a matter of fact, the
environmental damages enumerated in paragraph 6 hereof are already being felt,
experienced and suffered by the generation of plaintiff adults.
14. The continued allowance by defendant of TLA holders to cut and deforest the
remaining forest stands will work great damage and irreparable injury to plaintiffs
especially plaintiff minors and their successors who may never see, use, benefit from
and enjoy this rare and unique natural resource treasure.
This act of defendant constitutes a misappropriation and/or impairment of the natural
resource property he holds in trust for the benefit of plaintiff minors and succeeding
generations.
15. Plaintiffs have a clear and constitutional right to a balanced and healthful ecology
and are entitled to protection by the State in its capacity as the parens patriae.
16. Plaintiff have exhausted all administrative remedies with the defendant's office. On
March 2, 1990, plaintiffs served upon defendant a final demand to cancel all logging
permits in the country.
A copy of the plaintiffs' letter dated March 1, 1990 is hereto attached as Annex "B".
17. Defendant, however, fails and refuses to cancel the existing TLA's to the continuing
serious damage and extreme prejudice of plaintiffs.
18. The continued failure and refusal by defendant to cancel the TLA's is an act
violative of the rights of plaintiffs, especially plaintiff minors who may be left with a
country that is desertified (sic), bare, barren and devoid of the wonderful flora, fauna
and indigenous cultures which the Philippines had been abundantly blessed with.
19. Defendant's refusal to cancel the aforementioned TLA's is manifestly contrary to the
public policy enunciated in the Philippine Environmental Policy which, in pertinent part,
states that it is the policy of the State
(a) to create, develop, maintain and improve conditions under which man and nature
can thrive in productive and enjoyable harmony with each other;
(b) to fulfill the social, economic and other requirements of present and future
generations of Filipinos and;
(c) to ensure the attainment of an environmental quality that is conductive to a life of
dignity and well-being. (P.D. 1151, 6 June 1977)
20. Furthermore, defendant's continued refusal to cancel the aforementioned TLA's is
contradictory to the Constitutional policy of the State to
a. effect "a more equitable distribution of opportunities, income and wealth" and
"make full and efficient use of natural resources (sic)." (Section 1, Article XII of the
Constitution);
245

b. "protect the nation's marine wealth." (Section 2, ibid);
c. "conserve and promote the nation's cultural heritage and resources (sic)" (Section
14, Article XIV,id.);
d. "protect and advance the right of the people to a balanced and healthful ecology
in accord with the rhythm and harmony of nature." (Section 16, Article II, id.)
21. Finally, defendant's act is contrary to the highest law of humankind the natural
law and violative of plaintiffs' right to self-preservation and perpetuation.
22. There is no other plain, speedy and adequate remedy in law other than the instant
action to arrest the unabated hemorrhage of the country's vital life support systems
and continued rape of Mother Earth.
6

On 22 June 1990, the original defendant, Secretary Factoran, Jr., filed a Motion to Dismiss the
complaint based on two (2) grounds, namely: (1) the plaintiffs have no cause of action against him
and (2) the issue raised by the plaintiffs is a political question which properly pertains to the
legislative or executive branches of Government. In their 12 July 1990 Opposition to the Motion, the
petitioners maintain that (1) the complaint shows a clear and unmistakable cause of action, (2) the
motion is dilatory and (3) the action presents a justiciable question as it involves the defendant's
abuse of discretion.
On 18 July 1991, respondent Judge issued an order granting the aforementioned motion to
dismiss.
7
In the said order, not only was the defendant's claim that the complaint states no cause
of action against him and that it raises a political question sustained, the respondent Judge
further ruled that the granting of the relief prayed for would result in the impairment of contracts
which is prohibited by the fundamental law of the land.
Plaintiffs thus filed the instant special civil action for certiorari under Rule 65 of the Revised Rules of
Court and ask this Court to rescind and set aside the dismissal order on the ground that the
respondent Judge gravely abused his discretion in dismissing the action. Again, the parents of the
plaintiffs-minors not only represent their children, but have also joined the latter in this case.
8

On 14 May 1992, We resolved to give due course to the petition and required the parties to submit
their respective Memoranda after the Office of the Solicitor General (OSG) filed a Comment in
behalf of the respondents and the petitioners filed a reply thereto.
Petitioners contend that the complaint clearly and unmistakably states a cause of action as it
contains sufficient allegations concerning their right to a sound environment based on Articles 19, 20
and 21 of the Civil Code (Human Relations), Section 4 of Executive Order (E.O.) No. 192 creating the
DENR, Section 3 of Presidential Decree (P.D.) No. 1151 (Philippine Environmental Policy), Section 16,
Article II of the 1987 Constitution recognizing the right of the people to a balanced and healthful
ecology, the concept of generational genocide in Criminal Law and the concept of man's
inalienable right to self-preservation and self-perpetuation embodied in natural law. Petitioners
likewise rely on the respondent's correlative obligation per Section 4 of E.O. No. 192, to safeguard
the people's right to a healthful environment.
It is further claimed that the issue of the respondent Secretary's alleged grave abuse of discretion in
granting Timber License Agreements (TLAs) to cover more areas for logging than what is available
involves a judicial question.
246

Anent the invocation by the respondent Judge of the Constitution's non-impairment clause,
petitioners maintain that the same does not apply in this case because TLAs are not contracts. They
likewise submit that even if TLAs may be considered protected by the said clause, it is well settled
that they may still be revoked by the State when the public interest so requires.
On the other hand, the respondents aver that the petitioners failed to allege in their complaint a
specific legal right violated by the respondent Secretary for which any relief is provided by law. They
see nothing in the complaint but vague and nebulous allegations concerning an "environmental
right" which supposedly entitles the petitioners to the "protection by the state in its capacity
as parens patriae." Such allegations, according to them, do not reveal a valid cause of action. They
then reiterate the theory that the question of whether logging should be permitted in the country is
a political question which should be properly addressed to the executive or legislative branches of
Government. They therefore assert that the petitioners' resources is not to file an action to court, but
to lobby before Congress for the passage of a bill that would ban logging totally.
As to the matter of the cancellation of the TLAs, respondents submit that the same cannot be done
by the State without due process of law. Once issued, a TLA remains effective for a certain period of
time usually for twenty-five (25) years. During its effectivity, the same can neither be revised nor
cancelled unless the holder has been found, after due notice and hearing, to have violated the
terms of the agreement or other forestry laws and regulations. Petitioners' proposition to have all the
TLAs indiscriminately cancelled without the requisite hearing would be violative of the requirements
of due process.
Before going any further, We must first focus on some procedural matters. Petitioners instituted Civil
Case No. 90-777 as a class suit. The original defendant and the present respondents did not take
issue with this matter. Nevertheless, We hereby rule that the said civil case is indeed a class suit. The
subject matter of the complaint is of common and general interest not just to several, but to all
citizens of the Philippines. Consequently, since the parties are so numerous, it, becomes
impracticable, if not totally impossible, to bring all of them before the court. We likewise declare that
the plaintiffs therein are numerous and representative enough to ensure the full protection of all
concerned interests. Hence, all the requisites for the filing of a valid class suit under Section 12, Rule 3
of the Revised Rules of Court are present both in the said civil case and in the instant petition, the
latter being but an incident to the former.
This case, however, has a special and novel element. Petitioners minors assert that they represent
their generation as well as generations yet unborn. We find no difficulty in ruling that they can, for
themselves, for others of their generation and for the succeeding generations, file a class suit. Their
personality to sue in behalf of the succeeding generations can only be based on the concept of
intergenerational responsibility insofar as the right to a balanced and healthful ecology is
concerned. Such a right, as hereinafter expounded, considers
the "rhythm and harmony of nature." Nature means the created world in its entirety.
9
Such rhythm
and harmony indispensably include, inter alia, the judicious disposition, utilization, management,
renewal and conservation of the country's forest, mineral, land, waters, fisheries, wildlife, off-shore
areas and other natural resources to the end that their exploration, development and utilization be
equitably accessible to the present as well as future generations.
10
Needless to say, every
generation has a responsibility to the next to preserve that rhythm and harmony for the full
enjoyment of a balanced and healthful ecology. Put a little differently, the minors' assertion of their
right to a sound environment constitutes, at the same time, the performance of their obligation to
ensure the protection of that right for the generations to come.
The locus standi of the petitioners having thus been addressed, We shall now proceed to the merits
of the petition.
247

After a careful perusal of the complaint in question and a meticulous consideration and evaluation
of the issues raised and arguments adduced by the parties, We do not hesitate to find for the
petitioners and rule against the respondent Judge's challenged order for having been issued with
grave abuse of discretion amounting to lack of jurisdiction. The pertinent portions of the said order
reads as follows:
xxx xxx xxx
After a careful and circumspect evaluation of the Complaint, the Court cannot help
but agree with the defendant. For although we believe that plaintiffs have but the
noblest of all intentions, it (sic) fell short of alleging, with sufficient definiteness, a
specific legal right they are seeking to enforce and protect, or a specific legal wrong
they are seeking to prevent and redress (Sec. 1, Rule 2, RRC). Furthermore, the Court
notes that the Complaint is replete with vague assumptions and vague conclusions
based on unverified data. In fine, plaintiffs fail to state a cause of action in its
Complaint against the herein defendant.
Furthermore, the Court firmly believes that the matter before it, being impressed with
political color and involving a matter of public policy, may not be taken cognizance
of by this Court without doing violence to the sacred principle of "Separation of
Powers" of the three (3) co-equal branches of the Government.
The Court is likewise of the impression that it cannot, no matter how we stretch our
jurisdiction, grant the reliefs prayed for by the plaintiffs, i.e., to cancel all existing timber
license agreements in the country and to cease and desist from receiving, accepting,
processing, renewing or approving new timber license agreements. For to do
otherwise would amount to "impairment of contracts" abhored (sic) by the
fundamental law.
11

We do not agree with the trial court's conclusions that the plaintiffs failed to allege with sufficient
definiteness a specific legal right involved or a specific legal wrong committed, and that the
complaint is replete with vague assumptions and conclusions based on unverified data. A reading
of the complaint itself belies these conclusions.
The complaint focuses on one specific fundamental legal right the right to a balanced and
healthful ecology which, for the first time in our nation's constitutional history, is solemnly
incorporated in the fundamental law. Section 16, Article II of the 1987 Constitution explicitly provides:
Sec. 16. The State shall protect and advance the right of the people to a balanced
and healthful ecology in accord with the rhythm and harmony of nature.
This right unites with the right to health which is provided for in the preceding section of
the same article:
Sec. 15. The State shall protect and promote the right to health of the people and instill
health consciousness among them.
While the right to a balanced and healthful ecology is to be found under the Declaration of
Principles and State Policies and not under the Bill of Rights, it does not follow that it is less important
than any of the civil and political rights enumerated in the latter. Such a right belongs to a different
category of rights altogether for it concerns nothing less than self-preservation and self-perpetuation
aptly and fittingly stressed by the petitioners the advancement of which may even be said to
predate all governments and constitutions. As a matter of fact, these basic rights need not even be
248

written in the Constitution for they are assumed to exist from the inception of humankind. If they are
now explicitly mentioned in the fundamental charter, it is because of the well-founded fear of its
framers that unless the rights to a balanced and healthful ecology and to health are mandated as
state policies by the Constitution itself, thereby highlighting their continuing importance and
imposing upon the state a solemn obligation to preserve the first and protect and advance the
second, the day would not be too far when all else would be lost not only for the present
generation, but also for those to come generations which stand to inherit nothing but parched
earth incapable of sustaining life.
The right to a balanced and healthful ecology carries with it the correlative duty to refrain from
impairing the environment. During the debates on this right in one of the plenary sessions of the 1986
Constitutional Commission, the following exchange transpired between Commissioner Wilfrido
Villacorta and Commissioner Adolfo Azcuna who sponsored the section in question:
MR. VILLACORTA:
Does this section mandate the State to provide sanctions against all forms of pollution
air, water and noise pollution?
MR. AZCUNA:
Yes, Madam President. The right to healthful (sic) environment necessarily carries with it
the correlative duty of not impairing the same and, therefore, sanctions may be
provided for impairment of environmental balance.
12

The said right implies, among many other things, the judicious management and conservation of the
country's forests.
Without such forests, the ecological or environmental balance would be irreversiby disrupted.
Conformably with the enunciated right to a balanced and healthful ecology and the right to
health, as well as the other related provisions of the Constitution concerning the conservation,
development and utilization of the country's natural resources,
13
then President Corazon C. Aquino
promulgated on 10 June 1987 E.O. No. 192,
14
Section 4 of which expressly mandates that the
Department of Environment and Natural Resources "shall be the primary government agency
responsible for the conservation, management, development and proper use of the country's
environment and natural resources, specifically forest and grazing lands, mineral, resources,
including those in reservation and watershed areas, and lands of the public domain, as well as the
licensing and regulation of all natural resources as may be provided for by law in order to ensure
equitable sharing of the benefits derived therefrom for the welfare of the present and future
generations of Filipinos." Section 3 thereof makes the following statement of policy:
Sec. 3. Declaration of Policy. It is hereby declared the policy of the State to ensure the
sustainable use, development, management, renewal, and conservation of the country's
forest, mineral, land, off-shore areas and other natural resources, including the protection and
enhancement of the quality of the environment, and equitable access of the different
segments of the population to the development and the use of the country's natural
resources, not only for the present generation but for future generations as well. It is also the
policy of the state to recognize and apply a true value system including social and
environmental cost implications relative to their utilization, development and conservation of
our natural resources.
249

This policy declaration is substantially re-stated it Title XIV, Book IV of the Administrative Code of
1987,
15
specifically in Section 1 thereof which reads:
Sec. 1. Declaration of Policy. (1) The State shall ensure, for the benefit of the Filipino
people, the full exploration and development as well as the judicious disposition,
utilization, management, renewal and conservation of the country's forest, mineral,
land, waters, fisheries, wildlife, off-shore areas and other natural resources, consistent
with the necessity of maintaining a sound ecological balance and protecting and
enhancing the quality of the environment and the objective of making the
exploration, development and utilization of such natural resources equitably
accessible to the different segments of the present as well as future generations.
(2) The State shall likewise recognize and apply a true value system that takes into
account social and environmental cost implications relative to the utilization,
development and conservation of our natural resources.
The above provision stresses "the necessity of maintaining a sound ecological balance and
protecting and enhancing the quality of the environment." Section 2 of the same Title, on the other
hand, specifically speaks of the mandate of the DENR; however, it makes particular reference to the
fact of the agency's being subject to law and higher authority. Said section provides:
Sec. 2. Mandate. (1) The Department of Environment and Natural Resources shall be
primarily responsible for the implementation of the foregoing policy.
(2) It shall, subject to law and higher authority, be in charge of carrying out the State's
constitutional mandate to control and supervise the exploration, development,
utilization, and conservation of the country's natural resources.
Both E.O. NO. 192 and the Administrative Code of 1987 have set the objectives which will serve as
the bases for policy formulation, and have defined the powers and functions of the DENR.
It may, however, be recalled that even before the ratification of the 1987 Constitution, specific
statutes already paid special attention to the "environmental right" of the present and future
generations. On 6 June 1977, P.D. No. 1151 (Philippine Environmental Policy) and P.D. No. 1152
(Philippine Environment Code) were issued. The former "declared a continuing policy of the State (a)
to create, develop, maintain and improve conditions under which man and nature can thrive in
productive and enjoyable harmony with each other, (b) to fulfill the social, economic and other
requirements of present and future generations of Filipinos, and (c) to insure the attainment of an
environmental quality that is conducive to a life of dignity and well-being."
16
As its goal, it speaks of
the "responsibilities of each generation as trustee and guardian of the environment for succeeding
generations."
17
The latter statute, on the other hand, gave flesh to the said policy.
Thus, the right of the petitioners (and all those they represent) to a balanced and healthful ecology
is as clear as the DENR's duty under its mandate and by virtue of its powers and functions under
E.O. No. 192 and the Administrative Code of 1987 to protect and advance the said right.
A denial or violation of that right by the other who has the corelative duty or obligation to respect or
protect the same gives rise to a cause of action. Petitioners maintain that the granting of the TLAs,
which they claim was done with grave abuse of discretion, violated their right to a balanced and
healthful ecology; hence, the full protection thereof requires that no further TLAs should be renewed
or granted.
A cause of action is defined as:
250

. . . an act or omission of one party in violation of the legal right or rights of the other;
and its essential elements are legal right of the plaintiff, correlative obligation of the
defendant, and act or omission of the defendant in violation of said legal right.
18

It is settled in this jurisdiction that in a motion to dismiss based on the ground that the complaint fails
to state a cause of action,
19
the question submitted to the court for resolution involves the
sufficiency of the facts alleged in the complaint itself. No other matter should be considered;
furthermore, the truth of falsity of the said allegations is beside the point for the truth thereof is
deemed hypothetically admitted. The only issue to be resolved in such a case is: admitting such
alleged facts to be true, may the court render a valid judgment in accordance with the prayer in
the complaint?
20
In Militante vs. Edrosolano,
21
this Court laid down the rule that the judiciary should
"exercise the utmost care and circumspection in passing upon a motion to dismiss on the ground of
the absence thereof [cause of action] lest, by its failure to manifest a correct appreciation of the
facts alleged and deemed hypothetically admitted, what the law grants or recognizes is effectively
nullified. If that happens, there is a blot on the legal order. The law itself stands in disrepute."
After careful examination of the petitioners' complaint, We find the statements under the
introductory affirmative allegations, as well as the specific averments under the sub-heading CAUSE
OF ACTION, to be adequate enough to show, prima facie, the claimed violation of their rights. On
the basis thereof, they may thus be granted, wholly or partly, the reliefs prayed for. It bears stressing,
however, that insofar as the cancellation of the TLAs is concerned, there is the need to implead, as
party defendants, the grantees thereof for they are indispensable parties.
The foregoing considered, Civil Case No. 90-777 be said to raise a political question. Policy
formulation or determination by the executive or legislative branches of Government is not squarely
put in issue. What is principally involved is the enforcement of a right vis-a-vis policies already
formulated and expressed in legislation. It must, nonetheless, be emphasized that the political
question doctrine is no longer, the insurmountable obstacle to the exercise of judicial power or the
impenetrable shield that protects executive and legislative actions from judicial inquiry or review.
The second paragraph of section 1, Article VIII of the Constitution states that:
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.
Commenting on this provision in his book, Philippine Political Law,
22
Mr. Justice Isagani A. Cruz, a
distinguished member of this Court, says:
The first part of the authority represents the traditional concept of judicial power,
involving the settlement of conflicting rights as conferred as law. The second part of
the authority represents a broadening of judicial power to enable the courts of justice
to review what was before forbidden territory, to wit, the discretion of the political
departments of the government.
As worded, the new provision vests in the judiciary, and particularly the Supreme Court,
the power to rule upon even the wisdom of the decisions of the executive and the
legislature and to declare their acts invalid for lack or excess of jurisdiction because
tainted with grave abuse of discretion. The catch, of course, is the meaning of "grave
abuse of discretion," which is a very elastic phrase that can expand or contract
according to the disposition of the judiciary.
In Daza vs. Singson,
23
Mr. Justice Cruz, now speaking for this Court, noted:
251

In the case now before us, the jurisdictional objection becomes even less tenable and
decisive. The reason is that, even if we were to assume that the issue presented before
us was political in nature, we would still not be precluded from revolving it under the
expanded jurisdiction conferred upon us that now covers, in proper cases, even the
political question. Article VII, Section 1, of the Constitution clearly provides: . . .
The last ground invoked by the trial court in dismissing the complaint is the non-impairment of
contracts clause found in the Constitution. The court a quo declared that:
The Court is likewise of the impression that it cannot, no matter how we stretch our
jurisdiction, grant the reliefs prayed for by the plaintiffs, i.e., to cancel all existing timber
license agreements in the country and to cease and desist from receiving, accepting,
processing, renewing or approving new timber license agreements. For to do
otherwise would amount to "impairment of contracts" abhored (sic) by the
fundamental law.
24

We are not persuaded at all; on the contrary, We are amazed, if not shocked, by such a sweeping
pronouncement. In the first place, the respondent Secretary did not, for obvious reasons, even
invoke in his motion to dismiss the non-impairment clause. If he had done so, he would have acted
with utmost infidelity to the Government by providing undue and unwarranted benefits and
advantages to the timber license holders because he would have forever bound the Government
to strictly respect the said licenses according to their terms and conditions regardless of changes in
policy and the demands of public interest and welfare. He was aware that as correctly pointed out
by the petitioners, into every timber license must be read Section 20 of the Forestry Reform Code
(P.D. No. 705) which provides:
. . . Provided, That when the national interest so requires, the President may amend,
modify, replace or rescind any contract, concession, permit, licenses or any other form
of privilege granted herein . . .
Needless to say, all licenses may thus be revoked or rescinded by executive action. It is not a
contract, property or a property right protested by the due process clause of the Constitution.
In Tan vs. Director of Forestry,
25
this Court held:
. . . A timber license is an instrument by which the State regulates the utilization and disposition
of forest resources to the end that public welfare is promoted. A timber license is not a
contract within the purview of the due process clause; it is only a license or privilege, which
can be validly withdrawn whenever dictated by public interest or public welfare as in this
case.
A license is merely a permit or privilege to do what otherwise would be unlawful, and is not a
contract between the authority, federal, state, or municipal, granting it and the person to
whom it is granted; neither is it property or a property right, nor does it create a vested right;
nor is it taxation (37 C.J. 168). Thus, this Court held that the granting of license does not create
irrevocable rights, neither is it property or property rights (People vs. Ong Tin, 54 O.G. 7576).
We reiterated this pronouncement in Felipe Ysmael, Jr. & Co., Inc. vs. Deputy Executive Secretary:
26

. . . Timber licenses, permits and license agreements are the principal instruments by which
the State regulates the utilization and disposition of forest resources to the end that public
welfare is promoted. And it can hardly be gainsaid that they merely evidence a privilege
granted by the State to qualified entities, and do not vest in the latter a permanent or
irrevocable right to the particular concession area and the forest products therein. They may
252

be validly amended, modified, replaced or rescinded by the Chief Executive when national
interests so require. Thus, they are not deemed contracts within the purview of the due
process of law clause [See Sections 3(ee) and 20 of Pres. Decree No. 705, as amended. Also,
Tan v. Director of Forestry, G.R. No. L-24548, October 27, 1983, 125 SCRA 302].
Since timber licenses are not contracts, the non-impairment clause, which reads:
Sec. 10. No law impairing, the obligation of contracts shall be passed.
27

cannot be invoked.
In the second place, even if it is to be assumed that the same are contracts, the instant case does
not involve a law or even an executive issuance declaring the cancellation or modification of
existing timber licenses. Hence, the non-impairment clause cannot as yet be invoked. Nevertheless,
granting further that a law has actually been passed mandating cancellations or modifications, the
same cannot still be stigmatized as a violation of the non-impairment clause. This is because by its
very nature and purpose, such as law could have only been passed in the exercise of the police
power of the state for the purpose of advancing the right of the people to a balanced and
healthful ecology, promoting their health and enhancing the general welfare. In Abe vs. Foster
Wheeler
Corp.
28
this Court stated:
The freedom of contract, under our system of government, is not meant to be absolute. The
same is understood to be subject to reasonable legislative regulation aimed at the promotion
of public health, moral, safety and welfare. In other words, the constitutional guaranty of non-
impairment of obligations of contract is limited by the exercise of the police power of the
State, in the interest of public health, safety, moral and general welfare.
The reason for this is emphatically set forth in Nebia vs. New York,
29
quoted in Philippine American
Life Insurance Co. vs. Auditor General,
30
to wit:
Under our form of government the use of property and the making of contracts are normally
matters of private and not of public concern. The general rule is that both shall be free of
governmental interference. But neither property rights nor contract rights are absolute; for
government cannot exist if the citizen may at will use his property to the detriment of his
fellows, or exercise his freedom of contract to work them harm. Equally fundamental with the
private right is that of the public to regulate it in the common interest.
In short, the non-impairment clause must yield to the police power of the state.
31

Finally, it is difficult to imagine, as the trial court did, how the non-impairment clause could apply
with respect to the prayer to enjoin the respondent Secretary from receiving, accepting, processing,
renewing or approving new timber licenses for, save in cases of renewal, no contract would have as
of yet existed in the other instances. Moreover, with respect to renewal, the holder is not entitled to it
as a matter of right.
WHEREFORE, being impressed with merit, the instant Petition is hereby GRANTED, and the challenged
Order of respondent Judge of 18 July 1991 dismissing Civil Case No. 90-777 is hereby set aside. The
petitioners may therefore amend their complaint to implead as defendants the holders or grantees
of the questioned timber license agreements.
No pronouncement as to costs.SO ORDERED.
253

G.R. No. 134577 November 18, 1998
SEN. MIRIAM DEFENSOR SANTIAGO and SEN. FRANCISCO S. TATAD, petitioners,
vs.
SEN. TEOFISTO T. GUINGONA, JR. and SEN. MARCELO B. FERNAN, respondents.
PANGANIBAN, J.:
The principle of separation of powers ordains that each of the three great branches of government
has exclusive cognizance of and is supreme in matters falling within its own constitutionally allocated
sphere. Constitutional respect and a becoming regard for she sovereign acts, of a coequal branch
prevents this Court from prying into the internal workings of the Senate. Where no provision of the
Constitution or the laws or even the Rules of the Senate is clearly shown to have been violated,
disregarded or overlooked, grave abuse of discretion cannot be imputed to Senate officials for acts
done within their competence and authority. This Court will be neither a tyrant nor a wimp; rather, it
will remain steadfast and judicious in upholding the rule and majesty of the law.
The Case
On July 31, 1998, Senators Miriam Defensor Santiago and Francisco S. Tatad instituted an original
petition forquo warranto under Rule 66, Section 5, Rules of Court, seeking the ouster of Senator
Teofisto T. Guingona, Jr. as minority leader of the Senate and the declaration of Senator Tatad as
the rightful minority leader.
On August 4, 1998, the Court, upon receipt of the Petition, required the respondents and the solicitor
general "to file COMMENT thereon within a non-extendible period of fifteen (15) days from notice."
On August 25, 1998, both respondents and the solicitor general submitted their respective
Comments. In compliance with a Resolution of the Court dated September 1, 1998, petitioners filed
their Consolidated Reply on September 23, 1998. Noting said pleading, this Court gave due course
to the petition and deemed the controversy submitted for decision, without need of memoranda,
on September 29, 1998.
In the regular course, the regional trial courts and this Court have concurrent jurisdiction
1
to hear
and decide petitions for quo warranto (as well as certiorari, prohibition and mandamus), and a
basic deference to the hierarchy of courts impels a filing of such petitions in the lower
tribunals.
2
However, for special and important reasons or for exceptional and compelling
circumstances, as in the present case, this Court has allowed exceptions to this doctrine.
3
In fact,
original petitions for certiorari, prohibition, mandamus and quo warranto assailing acts of legislative
officers like the Senate President
4
and the Speaker of the House
5
have been recognized as
exceptions to this rule.
The Facts
The Senate of the Philippines, with Sen. John Henry R. Osmea as presiding officer, convened on July
27, 1998 for the first regular session of the eleventh Congress. At the time, in terms of party affiliation,
the composition of the Senate was as follows:
6

10 members Laban ng Masang Pilipino (LAMP)
7 members Lakas-National Union of Christian Democrats-United
Muslim Democrats of the Philippines (Lakas-NUCD-
UMDP)
1 member Liberal Party (LP)
1 member Aksyon Demokrasya
254

1 member People's Reform Party (PRP)
1 member Gabay Bayan
2 members Independent

23 total number of senators
7
(The last six members are all classified by petitioners as
"independent".)
On the agenda for the day was the election of officers. Nominated by Sen. Blas F. Ople to the
position of Senate President was Sen. Marcelo B. Fernan. Sen. Francisco S. Tatad was also nominated
to the same position by Sen. Miriam Defenser Santiago. By a vote of 20 to 2,
8
Senator Fernan was
declared the duly elected President of the Senate.
The following were likewise elected: Senator Ople as president pro tempore, and Sen. Franklin M.
Drilon as majority leader.
Senator Tatad thereafter manifested that, with the agreement of Senator Santiago, allegedly the
only other member of the minority, he was assuming the position of minority leader. He explained
that those who had voted for Senator Fernan comprised the "majority," while only those who had
voted for him, the losing nominee, belonged to the "minority."
During the discussion on who should constitute the Senate "minority," Sen. Juan M. Flavier manifested
that the senators belonging to the Lakas-NUCD-UMDP Party numbering seven (7) and, thus, also a
minority had chosen Senator Guingona as the minority leader. No consensus on the matter was
arrived at. The following session day, the debate on the question continued, with Senators Santiago
and Tatad delivering privilege speeches. On the third session day, the Senate met in caucus, but still
failed to resolve the issue.
On July 30, 1998, the majority leader informed the body chat he was in receipt of a letter signed by
the seven Lakas-NUCD-UMDP senators,
9
stating that they had elected Senator Guingona as the
minority leader. By virtue thereof, the Senate President formally recognized Senator Guingona as the
minority leader of the Senate.
The following day, Senators Santiago and Tatad filed before this Court the subject petition for quo
warranto, alleging in the main that Senator Guingona had been usurping, unlawfully holding and
exercising the position of Senate minority leader, a position that, according to them, rightfully
belonged to Senator Tatad.
Issues
From the parties' pleadings, the Court formulated the following issues for resolution:
1. Does the Court have jurisdiction over the petition?
2. Was there an actual violation of the Constitution?
3. Was Respondent Guingona usurping, unlawfully holding and exercising the position
of Senate minority leader?
4. Did Respondent Fernan act with grave abuse of discretion in recognizing
Respondent Guingona as the minority leader?
The Court's Ruling
After a close perusal of the pleadings
10
and a careful deliberation on the arguments, pro and con,
the Court finds that no constitutional or legal infirmity or grave abuse of discretion attended the
255

recognition of and the assumption into office by Respondent Guingona as the Senate minority
leader.
First Issue:
The Court's Jurisdiction
Petitioners principally invoke Avelino v. Cuenco 11 in arguing that this Court has jurisdiction to settle
the issue of who is the lawful Senate minority leader. They submit that the definitions of "majority" and
"minority" involve an interpretation of the Constitution, specifically Section 16 (1), Article VI thereof,
stating that "[t]he Senate shall elect its President and the House of Representatives its Speaker, by a
majority vote of all its respective Members."
Respondents and the solicitor general, in their separate Comments, contend in common that the
issue of who is the lawful Senate minority leader is an internal matter pertaining exclusively to the
domain of the legislature, over which the Court cannot exercise jurisdiction without transgressing the
principle of separation of powers. Allegedly, no constitutional issue is involved, as the fundamental
law does not provide for the office of a minority leader in the Senate. The legislature alone has the
full discretion to provide for such office and, in that event, to determine the procedure of selecting
its occupant.
Respondents also maintain that Avelino cannot apply, because there exists no question involving an
interpretation or application of the Constitution, the laws or even the Rules of the Senate; neither are
there "peculiar circumstances" impelling the Court to assume jurisdiction over the petition. The
solicitor general adds that there is not even any legislative practice to support the petitioners' theory
that a senator who votes for the winning Senate President is precluded from becoming the minority
leader.
To resolve the issue of jurisdiction, this Court carefully reviewed and deliberated on the various
important cases involving this very important and basic question, which it has ruled upon in the past.
The early case Avelino v. Cuenco cautiously tackled the scope of the Court's power of judicial
review; that is, questions involving an interpretation or application of a provision of the Constitution
or the law, including the rules of either house of Congress. Within this scope falls the jurisdiction of the
Court over questions on the validity of legislative or executive acts that are political in nature,
whenever the tribunal "finds constitutionally imposed limits on powers or functions conferred upon
political bodies."
12

In the aforementioned case, the Court initially declined to resolve the question of who was the
rightful Senate President, since it was deemed a political controversy falling exclusively within the
domain of the Senate. Upon a motion for reconsideration, however, the Court ultimately assumed
jurisdiction (1) "in the light of subsequent events which justify its intervention;" and (2) because the
resolution of the issue hinged on the interpretation of the constitutional provision on the presence of
a quorum to hold a session
13
and therein elect a Senate President.
Justice Feria elucidated in his Concurring Opinion: "[I] concur with the majority that this Court has
jurisdiction over cases like the present . . . so as to establish in this country the judicial supremacy,
with the Supreme Court as the final arbiter, to see that no one branch or agency of the government
transcends the Constitution, not only in justiceable but political questions as well."
14

Justice Perfecto, also concurring, said in part:
256

Indeed there is no denying that the situation, as obtaining in the upper chamber of Congress,
is highly explosive. It had echoed in the House of Representatives. It has already involved the
President of the Philippines. The situation has created a veritable national crisis, and it is
apparent that solution cannot be expected from any quarter other than this Supreme Court,
upon which the hopes of the people for an effective settlement are pinned.
15

. . . This case raises vital constitutional questions which no one can settle or decide if this Court
should refuse to decide them.
16

. . . The constitutional question of quorum should not be left unanswered.
17

In Taada v. Cueno,
18
this Court endeavored to define political question. And we said that "it refers
to 'those 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 legislative or
executive branch of the government.' It is concerned with issues dependent upon the wisdom, not
[the] legality, of a particular measure."
19

The Court ruled that the validity of the selection of members of the Senate Electoral Tribunal by the
senators was not a political question. The choice of these members did not depend on the Senate's
"full discretionary authority," but was subject to mandatory constitutional limitations.
20
Thus, the Court
held that not only was it clearly within its jurisdiction to pass upon the validity of the selection
proceedings, but it was also its duty to consider and determine the issue.
In another landmark case, Lansang v. Garcia,
21
Chief Justice Roberto Concepcion wrote that the
Court "had authority to and should inquire into the existence of the factual bases required by the
Constitution for the suspension of the privilege of the writ [of habeas corpus]." This ruling was made in
spite of the previous pronouncements in Barcelon v. Baker
22
andMontenegro v. Castaeda
23
that
"the authority to decide whether the exigency has arisen requiring suspension (of the privilege . . .)
belongs to the President and his 'decision is final and conclusive' upon the courts and upon all other
persons." But the Chief Justice cautioned: "the function of the Court is merely to check not
to supplant the Executive, or to ascertain merely whether he has gone beyond the constitutional
limits of his jurisdiction, not to exercise the power vested in him or to determine the wisdom of his
act."
The eminent Chief Justice aptly explained later in Javellana v. Executive Secretary:
24

The reason why the issue under consideration and other issues of similar character are
justiciable, not political, is plain and simple. One of the principal bases of the non-justiciability
of so-called political questions is the principle of separation of powers characteristic of the
presidential system of government the functions of which are classified or divided, by
reason of their nature, into three (3) categories, namely, 1) those involving the making of laws,
which are allocated to the legislative department; 2) those concerning mainly with the
enforcement of such laws and of judicial decisions applying and/or interpreting the same,
which belong to the executive department; and 3) those dealing with the settlement of
disputes, controversies or conflicts involving rights, duties or prerogatives that are legally
demandable and enforceable, which are apportioned to courts of justice. Within its own
sphere but only within such sphere each department is supreme and independent of
the others, and each is devoid of authority not only to encroach upon the powers or field of
action assigned to any of the other departments, but also to inquire into or pass upon the
advisability orwisdom of the acts performed, measures taken or decisions made by the other
departments provided that such acts, measures or decisions are within the area allocated
thereto by the Constitution.
257

Accordingly, when the grant of power is qualified, conditional or subject to limitations, the
issue of whether or not the prescribed qualifications or conditions have been met, or the
limitations respected is justiciable or non-political, the crux of the problem being one
of legality or validity of the contested act, not its wisdom. Otherwise, said qualifications,
conditions or limitations particularly those prescribed by the Constitution would be set at
naught. What is more, the judicial inquiry into such issue and the settlement thereof are
the main functions of the courts of justice under the presidential form of government adopted
in our 1935 Constitution, and the system of checks and balances, one of its basic predicates.
As a consequence, we have neither the authority nor the discretion to decline passing upon
said issue, but are under the ineluctable obligation made particularly more exacting and
peremptory by our oath, as members of the highest Court of the land, to support and defend
the Constitution to settle it. This explains why, in Miller v. Johnson [92 Ky. 589, 18 SW 522,
523], it was held that courts have a "duty, rather than a power," to determine whether
another branch of the government has "kept within constitutional limits."
Unlike our previous constitutions, the 1987 Constitution is explicit in defining the scope of judicial
power. The present Constitution now fortifies the authority of the courts to determine in an
appropriate action the validity of the acts of the political departments. It speaks of judicial
prerogative in terms of duty, viz.:
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.
25

This express definition has resulted in clearer and more resolute pronouncements of the Court. Daza
v. Singson,
26
Coseteng v. Mitra, Jr.
27
and Guingona Jr. v. Gonzales
28
similarly resolved issues assailing
the acts of the leaders of both houses of Congress in apportioning among political parties the seats
to which each chamber was entitled in the Commission on Appointments. The Court held that the
issue was justiciable, "even if the question were political in nature," since it involved "the legality, not
the wisdom, of the manner of filling the Commission on Appointments as prescribed by [Section 18,
Article VI of] the Constitution."
The same question of jurisdiction was raised in Taada v. Angara,
29
wherein the petitioners sought to
nullify the Senate's concurrence in the ratification of the World Trade Organization (WTO)
Agreement. The Court ruled: "Where an action of the legislative branch 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." The Court en banc unanimously stressed that in taking jurisdiction over petitions
questioning, an act of the political departments of government, it will not review the wisdom, merits
or propriety of such action, and will strike it down only on either of two grounds: (1)
unconstitutionality or illegality and (2) grave abuse of discretion.
Earlier in Co v. Electoral Tribunal of the House of Representatives
30
(HRET), the Court refused to
reverse a decision of the HRET, in the absence of a showing that said tribunal had committed grave
abuse of discretion amounting to lack of jurisdiction. The Court ruled that full authority had been
conferred upon the electoral tribunals of the House of Representatives and of the Senate as sole
judges of all contests relating to the election, the returns, and the qualifications of their respective
members. Such jurisdiction is original and exclusive.
31
The Court may inquire into a decision or
resolution of said tribunals only if such "decision or resolution was rendered without or in excess of
jurisdiction, or with grave abuse of discretion"
32

Recently, the Court, in Arroyo v. De Venecia,
33
was asked to reexamine the enrolled bill doctrine
and to look beyond the certification of the Speaker of the House of Representatives that the bill,
258

which was later enacted as Republic Act 8240, was properly approved by the legislative body.
Petitioners claimed that certain procedural rules of the House had been breached in the passage of
the bill. They averred further that a violation of the constitutionally mandated House rules was a
violation of the Constitution itself.
The Court, however, dismissed the petition, because the matter complained of concerned the
internal procedures of the House, with which the Court had no concern. It enucleated:
34

It would-be an unwarranted invasion of the prerogative of a coequal department for this
Court either to set aside a legislative action as void because the Court thinks the House has
disregarded its own rules of procedure, or to allow those defeated in the political arena to
seek a rematch in the judicial forum when petitioners can find their remedy in that
department itself. The Court has not been invested with a roving commission to inquire into
complaints, real or imagined, of legislative skullduggery. It would be acting in excess of its
power and would itself be guilty of grave abuse of discretion were it to do so. . . . In the
absence of anything to the contrary, the Court must assume that Congress or any House
thereof acted in the good faith belief that its conduct was permitted by its rules, and
deference rather than disrespect is due the judgment of that body.
In the instant controversy, the petitioners one of whom is Senator Santiago, a well-known
constitutionalist try to hew closely to these jurisprudential parameters. They claim that Section 16
(1), Article VI of the constitution, has not been observed in the selection of the Senate minority
leader. They also invoke the Court's "expanded" judicial power "to determine whether or not there
has been a grave abuse of discretion amounting to lack or excess of jurisdiction" on the part of
respondents.
Dissenting in part, Mr. Justice Vicente V. Mendoza submits that the Court has no jurisdiction over the
petition. Well-settled is the doctrine, however, that jurisdiction over the subject matter of a case is
determined by the allegations of the complaint or petition, regardless of whether the plaintiff or
petitioner is entitled to the relief asserted.
35
In light of the aforesaid allegations of petitioners, it is
clear that this Court has jurisdiction over the petition. It is well within the power and jurisdiction of the
Court to inquire whether indeed the Senate or its officials committed a violation of the Constitution
or gravely abused their discretion in the exercise of their functions and prerogatives.
Second Issue:
Violation of the Constitution
Having assumed jurisdiction over the petition, we now go to the next crucial question: In recognizing
Respondent Guingona as the Senate minority leader, did the Senate or its officials, particularly
Senate President Fernan, violate the Constitution or the laws?
Petitioners answer the above question in the affirmative. They contend that the constitutional
provision requiring the election of the Senate President "by majority vote of all members" carries with
it a judicial duty to determine the concepts of "majority" and "minority," as well as who may elect a
minority leader. They argue that "majority" in the aforequoted constitutional provision refers to that
group of senators who (1) voted for the winning Senate President and (2) accepted committee
chairmanships. Accordingly, those who voted for the losing nominee and accepted no such
chairmanships comprise the minority, to whom the right to determine the minority leader belongs. As
a result, petitioners assert, Respondent Guingona cannot be the legitimate minority leader, since he
voted for Respondent Fernan as Senate President. Furthermore, the members of the Lakas-NUCD-
UMDP cannot choose the minority leader, because they did not belong to the minority, having
voted for Fernan and accepted committee chairmanships.
259

We believe, however, that the interpretation proposed by petitioners finds no clear support from the
Constitution, the laws, the Rules of the Senate or even from practices of the Upper House.
The term "majority" has been judicially defined a number of times. When referring to a certain
number out of a total or aggregate, it simply "means the number greater than half or more than half
of any total."
36
The plain and unambiguous words of the subject constitutional clause simply mean
that the Senate President must obtain the votes of more than one half of all the senators. Not by any
construal does it thereby delineate who comprise the "majority," much less the "minority," in the said
body. And there is no showing that the framers of our Constitution had in mind other than the usual
meanings of these terms.
In effect, while the Constitution mandates that the President of the Senate must be elected by a
number constituting more than one half of all the members thereof, it does not provide that the
members who will not vote for him shall ipso facto constitute the "minority," who could thereby elect
the minority leader. Verily, no law or regulation states that the defeated candidate shall
automatically become the minority leader.
The Comment
37
of Respondent Guingona furnishes some relevant precedents, which were not
contested in petitioners' Reply. During the eighth Congress, which was the first to convene after the
ratification of the 1987 Constitution, the nomination of Sen. Jovito R Salonga as Senate President was
seconded by a member of the minority, then Sen. Joseph E. Estrada.
38
During the ninth regular
session, when Sen. Edgardo J. Angara assumed the Senate presidency in 1993, a consensus was
reached to assign committee chairmanships to all senators, including those belonging to the
minority.
39
This practice continued during the tenth Congress, where even the minority leader was
allowed to chair a committee.
40
History would also show that the "majority" in either house of
Congress has referred to the political party to which the most number of lawmakers belonged, while
the "minority" normally referred to a party with a lesser number of members.
Let us go back to the definitions of the terms "majority" and "minority." Majority may also refer to "the
group, party, or faction with the larger number of votes,"
41
not necessarily more than one half. This is
sometimes referred to as plurality. In contrast, minority is "a group, party, or faction with a smaller
number of votes or adherents than the majority."
42
Between two unequal parts or numbers
comprising a whole or totality, the greater number would obviously be the majority while the lesser
would be the minority. But where there are more than two unequal groupings, it is not as easy to say
which is the minority entitled to select the leader representing all the minorities. In a government with
a multi-party system such as in the Philippines (as pointed out by petitioners themselves), there could
be several minority parties, one of which has to be indentified by the Comelec as the "dominant
minority party" for purposes of the general elections. In the prevailing composition of the present
Senate, members either belong to different political parties or are independent. No constitutional or
statutory provision prescribe which of the many minority groups or the independents or a
combination thereof has the right to select the minority leader.
While the Constitution is explicit on the manner of electing a Senate President and a House Speaker,
it is, however, dead silent on the manner of selecting the other officers in both chambers of
Congress. All that the Charter says is that "[e]ach House shall choose such other officers as it may
deem necessary."
43
To our mind, themethod of choosing who will be such other officers is merely a
derivative of the exercise of the prerogative conferred by the aforequoted constitutional provision.
Therefore, such method must be prescribed by the Senate itself, not by this Court.
In this regard, the Constitution vests in each house of Congress the power "to determine the rules of
its proceedings."
44
Pursuant thereto, the Senate formulated and adopted a set of rules to govern its
internal affairs.
45
Pertinent to the instant case are Rules I and II thereof, which provide:
260

Rule I
ELECTIVE OFFICERS
Sec 1. The Senate shall elect, in the manner hereinafter provided, a President, a President Pro
Tempore, a Secretary, and a Sergeant-at-Arms.
These officers shall take their oath of office before entering into the discharge of their duties.
Rule II
ELECTION OF OFFICER
Sec. 2. The officers of the Senate shall be elected by the majority vote of all its Members.
Should there be more than one candidate for the same office, a nominal vote shall be taken;
otherwise, the elections shall be by viva voce or by resolution.
Notably, the Rules of the Senate do not provide for the positions of majority and minority leaders.
Neither is there an open clause providing specifically for such offices and prescribing the manner of
creating them or of choosing the holders thereof, At any rate, such offices, by tradition and long
practice, are actually extant. But, in the absence of constitutional or statutory guidelines or specific
rules, this Court is devoid of any basis upon which to determine the legality of the acts of the Senate
relative thereto. On grounds of respect for the basic concept of separation of powers, courts may
not intervene in the internal affairs of the legislature; it is not within the province of courts to direct
Congress how to do its work.
46
Paraphrasing the words of Justice Florentino P. Feliciano, this Court is
of the opinion that where no specific, operable norms and standards are shown to exist, then the
legislature must be given a real and effective opportunity to fashion and promulgate as well as to
implement them, before the courts may intervene.
47

Needless to state, legislative rules, unlike statutory laws, do not have the imprints of permanence
and obligatoriness during their effectivity. In fact, they "are subject to revocation, modification or
waiver at the pleasure of the body adopting them."
48
Being merely matters of procedure, their
observance are of no concern to the courts, for said rules may be waived or disregarded by the
legislative body
49
at will, upon the concurrence of a majority.
In view of the foregoing, Congress verily has the power and prerogative to provide for such officers
as it may deem. And it is certainly within its own jurisdiction and discretion to prescribe the
parameters for the exercise of this prerogative. This Court has no authority to interfere and
unilaterally intrude into that exclusive realm, without running afoul of constitutional principles that it is
bound to protect and uphold the very duty that justifies the Court's being. Constitutional respect
and a becoming regard for the sovereign acts of a coequal branch prevents this Court from prying
into the internal workings of the Senate. To repeat, this Court will be neither a tyrant nor a wimp;
rather, it will remain steadfast and judicious in upholding the rule and majesty of the law.
To accede, then, to the interpretation of petitioners would practically amount to judicial legislation,
a clear breach of the constitutional doctrine of separation of powers. If for this argument alone, the
petition would easily fail.
While no provision of the Constitution or the laws or the rules and even the practice of the Senate
was violated, and while the judiciary is without power to decide matters over which full discretionary
authority has been lodged in the legislative department, this Court may still inquire whether an act
of Congress or its officials has been made with grave abuse of discretion.
50
This is the plain
implication of Section 1, Article VIII of the Constitution, which expressly confers upon the judiciary the
261

power and the duty not only "to settle actual controversies involving rights which are legally
demandable and enforceable," but likewise "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."
Explaining the above-quoted clause, former Chief Justice Concepcion, who was a member of the
1986 Constitutional Commission, said in part:
51

. . . the powers of government are generally considered divided into three branches: the
Legislative, the Executive and the Judiciary. Each one is supreme within its own sphere and
independent of the others. Because of that supremacy[, the] power to determine whether a
given law is valid or not is vested in courts of justice.
Briefly stated, courts of justice determine the limits of power of the agencies and offices of the
government as well as those of its officers. In other words, the judiciary is the final arbiter on
the question whether or not a branch of government or any of its officials has acted without
jurisdiction or in excess of jurisdiction, or so capriciously as to constitute an abuse of discretion
amounting to excess of jurisdiction or lack of jurisdiction. This is not only a judicial power but a
duty to pass judgment on matters of this nature.
This is the background of paragraph 2 of Section 1, which means that the courts cannot
hereafter evade the duty to settle matters of this nature, by claiming that such matters
constitute a political question.
With this paradigm, we now examine the two other issues challenging the actions, first, of
Respondent Guingona and, second, of Respondent Fernan.
Third Issue:
Usurpation of Office
Usurpation generally refers to unauthorized arbitrary assumption and exercise of power
52
by one
without color of title or who is not entitled by law thereto.
53
A quo warranto proceeding is the proper
legal remedy to determine the right or title to the contested public office and to oust the holder
from its enjoyment.
54
The action may be brought by the solicitor general or a public prosecutor
55
or
any person claiming to be entitled to the public office or position usurped or unlawfully held or
exercised by another.
56
The action shall be brought against the person who allegedly usurped,
intruded into or is unlawfully holding of exercising such office.
57

In order for a quo warranto proceeding to be successful, the person suing must show that he or she
has a clearright to the contested office or to use or exercise the functions of the office allegedly
usurped or unlawfully held by the respondent.
58
In this case, petitioners present no sufficient proof of
a clear and indubitable franchise to the office of the Senate minority leader.
As discussed earlier, the specific norms or standards that may be used in determining who may
lawfully occupy the disputed position has not been laid down by the Constitution, the statutes, or
the Senate itself in which the power has been vested. Absent any clear-cut guideline, in no way can
it be said that illegality or irregularity tainted Respondent Guingona's assumption and exercise of the
powers of the office of Senate minority leader. Furthermore, no grave abuse of discretion has been
shown to characterize any of his specific acts as minority leader.
Fourth Issue:
262

Fernan's Recognition of Guingona
The all-embracing and plenary power and duty of the Court "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" is restricted only by the definition and confines of the
term "grave abuse of discretion."
By grave abuse of discretion is meant such capricious or whimsical exercise of judgment as is
equivalent to lack of jurisdiction. The abuse of discretion must be patent and gross as to
amount to an evasion of positive duty or a virtual refusal to perform a duty enjoined by law,
or to act at all in contemplation of law as where the power is exercised in an arbitrary and
despotic manner by reason of passion and hostility.
59

By the above standard, we hold that Respondent Fernan did not gravely abuse his discretion as
Senate President in recognizing Respondent Guingona as the minority leader. Let us recall that the
latter belongs to one of the minority parties in the Senate, the Lakas-NUCD-UMDP. By unanimous
resolution of the members of this party that he be the minority leader, he was recognized as such by
the Senate President. Such formal recognition by Respondent Fernan came only after at least two
Senate sessions and a caucus, wherein both sides were liberally allowed to articulate their
standpoints.
Under these circumstances, we believe that the Senate President cannot be accused of "capricious
or whimsical exercise of judgment" or of "an arbitrary and despotic manner by reason of passion or
hostility." Where no provision of the Constitution, the laws or even the rules of the Senate has been
clearly shown to have been violated, disregarded or overlooked, grave abuse of discretion cannot
be imputed to Senate officials for acts done within their competence and authority.
WHEREFORE, for the above reasons, the petition is hereby DISMISSED.
SO ORDERED.

263

ROMEO P. GEROCHI, KATULONG NG BAYAN (KB) and ENVIRONMENTALIST
CONSUMERS NETWORK, INC. (ECN),
Petitioners,

-versus-

DEPARTMENT OF ENERGY (DOE), ENERGY REGULATORY COMMISSION (ERC),
NATIONAL POWER CORPORATION (NPC), POWER SECTOR ASSETS AND
LIABILITIES MANAGEMENT GROUP (PSALM Corp.), STRATEGIC POWER
UTILITIES GROUP (SPUG), andPANAY ELECTRIC COMPANY INC. (PECO),
Respondents.

G.R. No.
159796

Present:

July 17, 2007
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

DECISION

NACHURA, J.:


Petitioners Romeo P. Gerochi, Katulong Ng Bayan (KB), and Environmentalist Consumers
Network, Inc. (ECN) (petitioners), come before this Court in this original action praying that Section
34 of Republic Act (RA) 9136, otherwise known as the Electric Power Industry Reform Act of 2001
(EPIRA), imposing the Universal Charge,
[1]
and Rule 18 of the Rules and Regulations (IRR)
[2]
which
seeks to implement the said imposition, be declared unconstitutional. Petitioners also pray that the
Universal Charge imposed upon the consumers be refunded and that a preliminary injunction
and/or temporary restraining order (TRO) be issued directing the respondents to refrain from
implementing, charging, and collecting the said charge.
[3]
The assailed provision of law reads:

SECTION 34. Universal Charge. Within one (1) year from the effectivity of this Act, a
universal charge to be determined, fixed and approved by the ERC, shall be imposed on all
electricity end-users for the following purposes:

(a) Payment for the stranded debts
[4]
in excess of the amount assumed by the National
Government and stranded contract costs of NPC
[5]
and as well as qualified stranded
contract costs of distribution utilities resulting from the restructuring of the industry;

(b) Missionary electrification;
[6]


(c) The equalization of the taxes and royalties applied to indigenous or renewable sources of
energy vis--vis imported energy fuels;

(d) An environmental charge equivalent to one-fourth of one centavo per kilowatt-hour
(P0.0025/kWh), which shall accrue to an environmental fund to be used solely for
watershed rehabilitation and management. Said fund shall be managed by NPC under
existing arrangements; and

(e) A charge to account for all forms of cross-subsidies for a period not exceeding three (3)
years.

The universal charge shall be a non-bypassable charge which shall be passed on and
collected from all end-users on a monthly basis by the distribution utilities. Collections by the
distribution utilities and the TRANSCO in any given month shall be remitted to the PSALM Corp.
on or before the fifteenth (15th) of the succeeding month, net of any amount due to the
264

distribution utility. Any end-user or self-generating entity not connected to a distribution utility
shall remit its corresponding universal charge directly to the TRANSCO. The PSALM Corp., as
administrator of the fund, shall create a Special Trust Fund which shall be disbursed only for
the purposes specified herein in an open and transparent manner. All amount collected for
the universal charge shall be distributed to the respective beneficiaries within a reasonable
period to be provided by the ERC.


The Facts

Congress enacted the EPIRA on June 8, 2001; on June 26, 2001, it took effect.
[7]


On April 5, 2002, respondent National Power Corporation-Strategic Power Utilities
Group
[8]
(NPC-SPUG) filed with respondent Energy Regulatory Commission (ERC) a petition for the
availment from the Universal Charge of its share for Missionary Electrification, docketed as ERC Case
No. 2002-165.
[9]


On May 7, 2002, NPC filed another petition with ERC, docketed as ERC Case No. 2002-194,
praying that the proposed share from the Universal Charge for the Environmental charge of P0.0025
per kilowatt-hour (/kWh), or a total of P119,488,847.59, be approved for withdrawal from the Special
Trust Fund (STF) managed by respondent Power Sector Assets and Liabilities Management
Group (PSALM)
[10]
for the rehabilitation and management of watershed areas.
[11]


On December 20, 2002, the ERC issued an Order
[12]
in ERC Case No. 2002-165 provisionally
approving the computed amount ofP0.0168/kWh as the share of the NPC-SPUG from the Universal
Charge for Missionary Electrification and authorizing the National Transmission Corporation
(TRANSCO) and Distribution Utilities to collect the same from its end-users on a monthly basis.

On June 26, 2003, the ERC rendered its Decision
[13]
(for ERC Case No. 2002-165) modifying its
Order of December 20, 2002, thus:

WHEREFORE, the foregoing premises considered, the provisional authority granted to
petitioner National Power Corporation-Strategic Power Utilities Group (NPC-SPUG) in the
Order dated December 20, 2002 is hereby modified to the effect that an additional amount
of P0.0205 per kilowatt-hour should be added to theP0.0168 per kilowatt-hour provisionally
authorized by the Commission in the said Order. Accordingly, a total amount of P0.0373 per
kilowatt-hour is hereby APPROVED for withdrawal from the Special Trust Fund managed by
PSALM as its share from the Universal Charge for Missionary Electrification (UC-ME) effective
on the following billing cycles:

(a) June 26-July 25, 2003 for National Transmission Corporation (TRANSCO); and
(b) July 2003 for Distribution Utilities (Dus).

Relative thereto, TRANSCO and Dus are directed to collect the UC-ME in the amount
of P0.0373 per kilowatt-hour and remit the same to PSALM on or before the 15
th
day of the
succeeding month.

In the meantime, NPC-SPUG is directed to submit, not later than April 30, 2004, a
detailed report to include Audited Financial Statements and physical status (percentage of
completion) of the projects using the prescribed format.

Let copies of this Order be furnished petitioner NPC-SPUG and all distribution utilities
(Dus).
265


SO ORDERED.


On August 13, 2003, NPC-SPUG filed a Motion for Reconsideration asking the ERC, among
others,
[14]
to set aside the above-mentioned Decision, which the ERC granted in its Order dated
October 7, 2003, disposing:

WHEREFORE, the foregoing premises considered, the Motion for Reconsideration filed
by petitioner National Power Corporation-Small Power Utilities Group (NPC-SPUG) is hereby
GRANTED. Accordingly, the Decision dated June 26, 2003 is hereby modified accordingly.

Relative thereto, NPC-SPUG is directed to submit a quarterly report on the following:

1. Projects for CY 2002 undertaken;
2. Location
3. Actual amount utilized to complete the project;
4. Period of completion;
5. Start of Operation; and
6. Explanation of the reallocation of UC-ME funds, if any.

SO ORDERED.
[15]



Meanwhile, on April 2, 2003, ERC decided ERC Case No. 2002-194, authorizing the NPC to draw
up to P70,000,000.00 from PSALM for its 2003 Watershed Rehabilitation Budget subject to the
availability of funds for the Environmental Fund component of the Universal Charge.
[16]


On the basis of the said ERC decisions, respondent Panay Electric Company, Inc. (PECO)
charged petitioner Romeo P. Gerochi and all other end-users with the Universal Charge as
reflected in their respective electric bills starting from the month of July 2003.
[17]


Hence, this original action.

Petitioners submit that the assailed provision of law and its IRR which sought to implement the
same are unconstitutional on the following grounds:

1) The universal charge provided for under Sec. 34 of the EPIRA and sought to be
implemented under Sec. 2, Rule 18 of the IRR of the said law is a tax which is to be
collected from all electric end-users and self-generating entities. The power to tax is strictly
a legislative function and as such, the delegation of said power to any executive or
administrative agency like the ERC is unconstitutional, giving the same unlimited authority.
The assailed provision clearly provides that the Universal Charge is to be determined, fixed
and approved by the ERC, hence leaving to the latter complete discretionary legislative
authority.

2) The ERC is also empowered to approve and determine where the funds collected
should be used.

3) The imposition of the Universal Charge on all end-users is oppressive and confiscatory
and amounts to taxation without representation as the consumers were not given a
chance to be heard and represented.
[18]


266


Petitioners contend that the Universal Charge has the characteristics of a tax and is collected
to fund the operations of the NPC. They argue that the cases
[19]
invoked by the respondents clearly
show the regulatory purpose of the charges imposed therein, which is not so in the case at bench. In
said cases, the respective funds
[20]
were created in order to balance and stabilize the prices of oil
and sugar, and to act as buffer to counteract the changes and adjustments in prices, peso
devaluation, and other variables which cannot be adequately and timely monitored by the
legislature. Thus, there was a need to delegate powers to administrative bodies.
[21]
Petitioners posit
that the Universal Charge is imposed not for a similar purpose.

On the other hand, respondent PSALM through the Office of the Government Corporate
Counsel (OGCC) contends that unlike a tax which is imposed to provide income for public
purposes, such as support of the government, administration of the law, or payment of public
expenses, the assailed Universal Charge is levied for a specific regulatory purpose, which is to ensure
the viability of the country's electric power industry. Thus, it is exacted by the State in the exercise of
its inherent police power. On this premise, PSALM submits that there is no undue delegation of
legislative power to the ERC since the latter merely exercises a limited authority or discretion as to
the execution and implementation of the provisions of the EPIRA.
[22]


Respondents Department of Energy (DOE), ERC, and NPC, through the Office of the Solicitor
General (OSG), share the same view that the Universal Charge is not a tax because it is levied for a
specific regulatory purpose, which is to ensure the viability of the country's electric power industry,
and is, therefore, an exaction in the exercise of the State's police power. Respondents further
contend that said Universal Charge does not possess the essential characteristics of a tax, that its
imposition would redound to the benefit of the electric power industry and not to the public, and
that its rate is uniformly levied on electricity end-users, unlike a tax which is imposed based on the
individual taxpayer's ability to pay. Moreover, respondents deny that there is undue delegation of
legislative power to the ERC since the EPIRA sets forth sufficient determinable standards which would
guide the ERC in the exercise of the powers granted to it. Lastly, respondents argue that the
imposition of the Universal Charge is not oppressive and confiscatory since it is an exercise of the
police power of the State and it complies with the requirements of due process.
[23]


On its part, respondent PECO argues that it is duty-bound to collect and remit the amount
pertaining to the Missionary Electrification and Environmental Fund components of the Universal
Charge, pursuant to Sec. 34 of the EPIRA and the Decisions in ERC Case Nos. 2002-194 and 2002-
165. Otherwise, PECO could be held liable under Sec. 46
[24]
of the EPIRA, which imposes fines and
penalties for any violation of its provisions or its IRR.
[25]


The Issues

The ultimate issues in the case at bar are:

1) Whether or not, the Universal Charge imposed under Sec. 34 of the EPIRA is a tax; and

2) Whether or not there is undue delegation of legislative power to tax on the part of the
ERC.
[26]


Before we discuss the issues, the Court shall first deal with an obvious procedural lapse.
Petitioners filed before us an original action particularly denominated as a Complaint
assailing the constitutionality of Sec. 34 of the EPIRA imposing the Universal Charge and Rule 18 of
the EPIRA's IRR. No doubt, petitioners have locus standi. They impugn the constitutionality of Sec. 34
267

of the EPIRA because they sustained a direct injury as a result of the imposition of the Universal
Charge as reflected in their electric bills.
However, petitioners violated the doctrine of hierarchy of courts when they filed this
Complaint directly with us. Furthermore, the Complaint is bereft of any allegation of grave abuse
of discretion on the part of the ERC or any of the public respondents, in order for the Court to
consider it as a petition for certiorari or prohibition.
Article VIII, Section 5(1) and (2) of the 1987 Constitution
[27]
categorically provides that:
SECTION 5. The Supreme Court shall have the following powers:

1. Exercise original jurisdiction over cases affecting ambassadors, other public ministers and
consuls, and over petitions for certiorari, prohibition, mandamus, quo warranto, and
habeas corpus.
2. Review, revise, reverse, modify, or affirm on appeal or certiorari, as the law or the rules of
court may provide, final judgments and orders of lower courts in:

(a) All cases in which the constitutionality or validity of any treaty, international or
executive agreement, law, presidential decree, proclamation, order, instruction,
ordinance, or regulation is in question.


But this Court's jurisdiction to issue writs of certiorari, prohibition, mandamus, quo warranto,
and habeas corpus, while concurrent with that of the regional trial courts and the Court of Appeals,
does not give litigants unrestrained freedom of choice of forum from which to seek such relief.
[28]
It
has long been established that this Court will not entertain direct resort to it unless the redress desired
cannot be obtained in the appropriate courts, or where exceptional and compelling circumstances
justify availment of a remedy within and call for the exercise of our primary jurisdiction.
[29]
This
circumstance alone warrants the outright dismissal of the present action.

This procedural infirmity notwithstanding, we opt to resolve the constitutional issue raised
herein. We are aware that if the constitutionality of Sec. 34 of the EPIRA is not resolved now, the
issue will certainly resurface in the near future, resulting in a repeat of this litigation, and probably
involving the same parties. In the public interest and to avoid unnecessary delay, this Court renders
its ruling now.

The instant complaint is bereft of merit.
The First Issue

To resolve the first issue, it is necessary to distinguish the States power of taxation from the
police power.

The power to tax is an incident of sovereignty and is unlimited in its range, acknowledging in its
very nature no limits, so that security against its abuse is to be found only in the responsibility of the
legislature which imposes the tax on the constituency that is to pay it.
[30]
It is based on the principle
that taxes are the lifeblood of the government, and their prompt and certain availability is an
imperious need.
[31]
Thus, the theory behind the exercise of the power to tax emanates from
268

necessity; without taxes, government cannot fulfill its mandate of promoting the general welfare
and well-being of the people.
[32]


On the other hand, police power is the power of the state to promote public welfare by
restraining and regulating the use of liberty and property.
[33]
It is the most pervasive, the least
limitable, and the most demanding of the three fundamental powers of the State. The justification is
found in the Latin maxims salus populi est suprema lex (the welfare of the people is the supreme law)
and sic utere tuo ut alienum non laedas (so use your property as not to injure the property of others).
As an inherent attribute of sovereignty which virtually extends to all public needs, police power
grants a wide panoply of instruments through which the State, as parens patriae, gives effect to a
host of its regulatory powers.
[34]
We have held that the power to "regulate" means the power to
protect, foster, promote, preserve, and control, with due regard for the interests, first and foremost,
of the public, then of the utility and of its patrons.
[35]


The conservative and pivotal distinction between these two powers rests in the purpose for
which the charge is made. If generation of revenue is the primary purpose and regulation is merely
incidental, the imposition is a tax; but if regulation is the primary purpose, the fact that revenue is
incidentally raised does not make the imposition a tax.
[36]


In exacting the assailed Universal Charge through Sec. 34 of the EPIRA, the State's police
power, particularly its regulatory dimension, is invoked. Such can be deduced from Sec. 34 which
enumerates the purposes for which the Universal Charge is imposed
[37]
and which can be amply
discerned as regulatory in character. The EPIRA resonates such regulatory purposes, thus:

SECTION 2. Declaration of Policy. It is hereby declared the policy of the State:

(a) To ensure and accelerate the total electrification of the country;
(b) To ensure the quality, reliability, security and affordability of the supply of electric power;
(c) To ensure transparent and reasonable prices of electricity in a regime of free and fair
competition and full public accountability to achieve greater operational and economic
efficiency and enhance the competitiveness of Philippine products in the global market;
(d) To enhance the inflow of private capital and broaden the ownership base of the power
generation, transmission and distribution sectors;
(e) To ensure fair and non-discriminatory treatment of public and private sector entities in
the process of restructuring the electric power industry;
(f) To protect the public interest as it is affected by the rates and services of electric utilities
and other providers of electric power;
(g) To assure socially and environmentally compatible energy sources and infrastructure;
(h) To promote the utilization of indigenous and new and renewable energy resources in
power generation in order to reduce dependence on imported energy;
(i) To provide for an orderly and transparent privatization of the assets and liabilities of the
National Power Corporation (NPC);
(j) To establish a strong and purely independent regulatory body and system to ensure
consumer protection and enhance the competitive operation of the electricity market;
and
(k) To encourage the efficient use of energy and other modalities of demand side
management.


From the aforementioned purposes, it can be gleaned that the assailed Universal Charge is not
a tax, but an exaction in the exercise of the State's police power. Public welfare is surely promoted.

269

Moreover, it is a well-established doctrine that the taxing power may be used as an implement
of police power.
[38]
In Valmonte v. Energy Regulatory Board, et al.
[39]
and in Gaston v. Republic
Planters Bank,
[40]
this Court held that the Oil Price Stabilization Fund (OPSF) and the Sugar Stabilization
Fund (SSF) were exactions made in the exercise of the police power. The doctrine was reiterated
in Osmea v. Orbos
[41]
with respect to the OPSF. Thus, we disagree with petitioners that the instant
case is different from the aforementioned cases. With the Universal Charge, a Special Trust Fund
(STF) is also created under the administration of PSALM.
[42]
The STF has some notable characteristics
similar to the OPSF and the SSF, viz.:

1) In the implementation of stranded cost recovery, the ERC shall conduct a review to
determine whether there is under-recovery or over recovery and adjust (true-up) the level
of the stranded cost recovery charge. In case of an over-recovery, the ERC shall ensure
that any excess amount shall be remitted to the STF. A separate account shall be created
for these amounts which shall be held in trust for any future claims of distribution utilities for
stranded cost recovery. At the end of the stranded cost recovery period, any remaining
amount in this account shall be used to reduce the electricity rates to the end-users.
[43]


2) With respect to the assailed Universal Charge, if the total amount collected for the same
is greater than the actual availments against it, the PSALM shall retain the balance within
the STF to pay for periods where a shortfall occurs.
[44]


3) Upon expiration of the term of PSALM, the administration of the STF shall be transferred
to the DOF or any of the DOF attached agencies as designated by the DOF Secretary.
[45]




The OSG is in point when it asseverates:

Evidently, the establishment and maintenance of the Special Trust Fund, under the last
paragraph of Section 34, R.A. No. 9136, is well within the pervasive and non-waivable power
and responsibility of the government to secure the physical and economic survival and well-
being of the community, that comprehensive sovereign authority we designate as the police
power of the State.
[46]



This feature of the Universal Charge further boosts the position that the same is an exaction
imposed primarily in pursuit of the State's police objectives. The STF reasonably serves and assures the
attainment and perpetuity of the purposes for which the Universal Charge is imposed, i.e., to ensure
the viability of the country's electric power industry.

The Second Issue

The principle of separation of powers ordains that each of the three branches of government
has exclusive cognizance of and is supreme in matters falling within its own constitutionally allocated
sphere. A logical corollary to the doctrine of separation of powers is the principle of non-delegation
of powers, as expressed in the Latin maxim potestas delegata non delegari potest (what has been
delegated cannot be delegated). This is based on the ethical principle that such delegated power
constitutes not only a right but a duty to be performed by the delegate through the instrumentality
of his own judgment and not through the intervening mind of another.
[47]


In the face of the increasing complexity of modern life, delegation of legislative power to
various specialized administrative agencies is allowed as an exception to this principle.
[48]
Given the
volume and variety of interactions in today's society, it is doubtful if the legislature can promulgate
270

laws that will deal adequately with and respond promptly to the minutiae of everyday life. Hence,
the need to delegate to administrative bodies - the principal agencies tasked to execute laws in
their specialized fields - the authority to promulgate rules and regulations to implement a given
statute and effectuate its policies. All that is required for the valid exercise of this power of
subordinate legislation is that the regulation be germane to the objects and purposes of the law
and that the regulation be not in contradiction to, but in conformity with, the standards prescribed
by the law. These requirements are denominated as the completeness test and the sufficient
standard test.

Under the first test, the law must be complete in all its terms and conditions when it leaves the
legislature such that when it reaches the delegate, the only thing he will have to do is to enforce it.
The second test mandates adequate guidelines or limitations in the law to determine the boundaries
of the delegate's authority and prevent the delegation from running riot.
[49]


The Court finds that the EPIRA, read and appreciated in its entirety, in relation to Sec. 34
thereof, is complete in all its essential terms and conditions, and that it contains sufficient standards.

Although Sec. 34 of the EPIRA merely provides that within one (1) year from the effectivity
thereof, a Universal Charge to be determined, fixed and approved by the ERC, shall be imposed on
all electricity end-users, and therefore, does not state the specific amount to be paid as Universal
Charge, the amount nevertheless is made certain by the legislative parameters provided in the law
itself. For one, Sec. 43(b)(ii) of the EPIRA provides:


SECTION 43. Functions of the ERC. The ERC shall promote competition, encourage market
development, ensure customer choice and penalize abuse of market power in the
restructured electricity industry. In appropriate cases, the ERC is authorized to issue cease and
desist order after due notice and hearing. Towards this end, it shall be responsible for the
following key functions in the restructured industry:

x x x x

(b) Within six (6) months from the effectivity of this Act, promulgate and enforce, in
accordance with law, a National Grid Code and a Distribution Code which shall include, but
not limited to the following:

x x x x

(ii) Financial capability standards for the generating companies, the TRANSCO,
distribution utilities and suppliers: Provided, That in the formulation of the financial capability
standards, the nature and function of the entity shall be considered: Provided, further, That
such standards are set to ensure that the electric power industry participants meet the
minimum financial standards to protect the public interest. Determine, fix, and approve, after
due notice and public hearings the universal charge, to be imposed on all electricity end-
users pursuant to Section 34 hereof;



Moreover, contrary to the petitioners contention, the ERC does not enjoy a wide latitude of
discretion in the determination of the Universal Charge. Sec. 51(d) and (e) of the EPIRA
[50]
clearly
provides:

271

SECTION 51. Powers. The PSALM Corp. shall, in the performance of its functions and for the
attainment of its objective, have the following powers:

x x x x
(d) To calculate the amount of the stranded debts and stranded contract costs of
NPC which shall form the basis for ERC in the determination of the universal charge;

(e) To liquidate the NPC stranded contract costs, utilizing the proceeds from sales and other
property contributed to it, including the proceeds from the universal charge.

Thus, the law is complete and passes the first test for valid delegation of legislative power.

As to the second test, this Court had, in the past, accepted as sufficient standards the
following: "interest of law and order;"
[51]
"adequate and efficient instruction;"
[52]
"public
interest;"
[53]
"justice and equity;"
[54]
"public convenience and welfare;"
[55]
"simplicity, economy and
efficiency;"
[56]
"standardization and regulation of medical education;"
[57]
and "fair and equitable
employment practices."
[58]
Provisions of the EPIRA such as, among others, to ensure the total
electrification of the country and the quality, reliability, security and affordability of the supply of
electric power
[59]
and watershed rehabilitation and management
[60]
meet the requirements for
valid delegation, as they provide the limitations on the ERCs power to formulate the IRR. These are
sufficient standards.

It may be noted that this is not the first time that the ERC's conferred powers were challenged.
In Freedom from Debt Coalition v. Energy Regulatory Commission,
[61]
the Court had occasion to
say:
In determining the extent of powers possessed by the ERC, the provisions of the EPIRA
must not be read in separate parts. Rather, the law must be read in its entirety, because a
statute is passed as a whole, and is animated by one general purpose and intent. Its meaning
cannot to be extracted from any single part thereof but from a general consideration of the
statute as a whole. Considering the intent of Congress in enacting the EPIRA and reading the
statute in its entirety, it is plain to see that the law has expanded the jurisdiction of the
regulatory body, the ERC in this case, to enable the latter to implement the reforms sought to
be accomplished by the EPIRA. When the legislators decided to broaden the jurisdiction of
the ERC, they did not intend to abolish or reduce the powers already conferred upon ERC's
predecessors. To sustain the view that the ERC possesses only the powers and functions listed
under Section 43 of the EPIRA is to frustrate the objectives of the law.

In his Concurring and Dissenting Opinion
[62]
in the same case, then Associate Justice, now Chief
Justice, Reynato S. Puno described the immensity of police power in relation to the delegation of
powers to the ERC and its regulatory functions over electric power as a vital public utility, to wit:

Over the years, however, the range of police power was no longer limited to the
preservation of public health, safety and morals, which used to be the primary social interests
in earlier times. Police power now requires the State to "assume an affirmative duty to
eliminate the excesses and injustices that are the concomitants of an unrestrained industrial
economy." Police power is now exerted "to further the public welfare a concept as vast as
the good of society itself." Hence, "police power is but another name for the governmental
authority to further the welfare of society that is the basic end of all government."When police
power is delegated to administrative bodies with regulatory functions, its exercise should be
given a wide latitude. Police power takes on an even broader dimension in developing
countries such as ours, where the State must take a more active role in balancing the many
conflicting interests in society. The Questioned Order was issued by the ERC, acting as an
agent of the State in the exercise of police power. We should have exceptionally good
272

grounds to curtail its exercise. This approach is more compelling in the field of rate-regulation
of electric power rates. Electric power generation and distribution is a traditional instrument of
economic growth that affects not only a few but the entire nation. It is an important factor in
encouraging investment and promoting business. The engines of progress may come to a
screeching halt if the delivery of electric power is impaired. Billions of pesos would be lost as a
result of power outages or unreliable electric power services. The State thru the ERC should be
able to exercise its police power with great flexibility, when the need arises.

This was reiterated in National Association of Electricity Consumers for Reforms v.
Energy Regulatory Commission
[63]
where the Court held that the ERC, as regulator, should
have sufficient power to respond in real time to changes wrought by multifarious factors
affecting public utilities.

From the foregoing disquisitions, we therefore hold that there is no undue delegation of
legislative power to the ERC.

Petitioners failed to pursue in their Memorandum the contention in the Complaint that the
imposition of the Universal Charge on all end-users is oppressive and confiscatory, and amounts to
taxation without representation. Hence, such contention is deemed waived or abandoned per
Resolution
[64]
of August 3, 2004.
[65]
Moreover, the determination of whether or not a tax is excessive,
oppressive or confiscatory is an issue which essentially involves questions of fact, and thus, this Court
is precluded from reviewing the same.
[66]


As a penultimate statement, it may be well to recall what this Court said of EPIRA:
One of the landmark pieces of legislation enacted by Congress in recent years is the
EPIRA. It established a new policy, legal structure and regulatory framework for the electric
power industry. The new thrust is to tap private capital for the expansion and improvement of
the industry as the large government debt and the highly capital-intensive character of the
industry itself have long been acknowledged as the critical constraints to the program. To
attract private investment, largely foreign, the jaded structure of the industry had to be
addressed. While the generation and transmission sectors were centralized and monopolistic,
the distribution side was fragmented with over 130 utilities, mostly small and uneconomic. The
pervasive flaws have caused a low utilization of existing generation capacity; extremely high
and uncompetitive power rates; poor quality of service to consumers; dismal to forgettable
performance of the government power sector; high system losses; and an inability to develop
a clear strategy for overcoming these shortcomings.

Thus, the EPIRA provides a framework for the restructuring of the industry, including the
privatization of the assets of the National Power Corporation (NPC), the transition to a
competitive structure, and the delineation of the roles of various government agencies and
the private entities. The law ordains the division of the industry into four (4) distinct
sectors, namely: generation, transmission, distribution and supply.
Corollarily, the NPC generating plants have to privatized and its transmission business spun off
and privatized thereafter.
[67]


Finally, every law has in its favor the presumption of constitutionality, and to justify its
nullification, there must be a clear and unequivocal breach of the Constitution and not one
that is doubtful, speculative, or argumentative.
[68]
Indubitably, petitioners failed to overcome
this presumption in favor of the EPIRA. We find no clear violation of the Constitution which
would warrant a pronouncement that Sec. 34 of the EPIRA and Rule 18 of its IRR are
unconstitutional and void.

WHEREFORE, the instant case is hereby DISMISSED for lack of merit. SO ORDERED.
273

G.R. No. 166715 August 14, 2008
ABAKADA GURO PARTY LIST (formerly AASJS)
1
OFFICERS/MEMBERS SAMSON S. ALCANTARA, ED
VINCENT S. ALBANO, ROMEO R. ROBISO, RENE B. GOROSPE and EDWIN R. SANDOVAL, petitioners,
vs.
HON. CESAR V. PURISIMA, in his capacity as Secretary of Finance, HON. GUILLERMO L. PARAYNO, JR.,
in his capacity as Commissioner of the Bureau of Internal Revenue, and HON. ALBERTO D. LINA, in his
Capacity as Commissioner of Bureau of Customs, respondents.
D E C I S I O N
CORONA, J.:
This petition for prohibition
1
seeks to prevent respondents from implementing and enforcing Republic
Act (RA) 9335
2
(Attrition Act of 2005).
RA 9335 was enacted to optimize the revenue-generation capability and collection of the Bureau of
Internal Revenue (BIR) and the Bureau of Customs (BOC). The law intends to encourage BIR and
BOC officials and employees to exceed their revenue targets by providing a system of rewards and
sanctions through the creation of a Rewards and Incentives Fund (Fund) and a Revenue
Performance Evaluation Board (Board).
3
It covers all officials and employees of the BIR and the BOC
with at least six months of service, regardless of employment status.
4

The Fund is sourced from the collection of the BIR and the BOC in excess of their revenue targets for
the year, as determined by the Development Budget and Coordinating Committee (DBCC). Any
incentive or reward is taken from the fund and allocated to the BIR and the BOC in proportion to
their contribution in the excess collection of the targeted amount of tax revenue.
5

The Boards in the BIR and the BOC are composed of the Secretary of the Department of Finance
(DOF) or his/her Undersecretary, the Secretary of the Department of Budget and Management
(DBM) or his/her Undersecretary, the Director General of the National Economic Development
Authority (NEDA) or his/her Deputy Director General, the Commissioners of the BIR and the BOC or
their Deputy Commissioners, two representatives from the rank-and-file employees and a
representative from the officials nominated by their recognized organization.
6

Each Board has the duty to (1) prescribe the rules and guidelines for the allocation, distribution and
release of the Fund; (2) set criteria and procedures for removing from the service officials and
employees whose revenue collection falls short of the target; (3) terminate personnel in accordance
with the criteria adopted by the Board; (4) prescribe a system for performance evaluation; (5)
perform other functions, including the issuance of rules and regulations and (6) submit an annual
report to Congress.
7

The DOF, DBM, NEDA, BIR, BOC and the Civil Service Commission (CSC) were tasked to promulgate
and issue the implementing rules and regulations of RA 9335,
8
to be approved by a Joint
Congressional Oversight Committee created for such purpose.
9

Petitioners, invoking their right as taxpayers filed this petition challenging the constitutionality of RA
9335, a tax reform legislation. They contend that, by establishing a system of rewards and incentives,
the law "transform[s] the officials and employees of the BIR and the BOC into mercenaries and
bounty hunters" as they will do their best only in consideration of such rewards. Thus, the system of
rewards and incentives invites corruption and undermines the constitutionally mandated duty of
these officials and employees to serve the people with utmost responsibility, integrity, loyalty and
efficiency.
Petitioners also claim that limiting the scope of the system of rewards and incentives only to officials
and employees of the BIR and the BOC violates the constitutional guarantee of equal protection.
274

There is no valid basis for classification or distinction as to why such a system should not apply to
officials and employees of all other government agencies.
In addition, petitioners assert that the law unduly delegates the power to fix revenue targets to the
President as it lacks a sufficient standard on that matter. While Section 7(b) and (c) of RA 9335
provides that BIR and BOC officials may be dismissed from the service if their revenue collections fall
short of the target by at least 7.5%, the law does not, however, fix the revenue targets to be
achieved. Instead, the fixing of revenue targets has been delegated to the President without
sufficient standards. It will therefore be easy for the President to fix an unrealistic and unattainable
target in order to dismiss BIR or BOC personnel.
Finally, petitioners assail the creation of a congressional oversight committee on the ground that it
violates the doctrine of separation of powers. While the legislative function is deemed accomplished
and completed upon the enactment and approval of the law, the creation of the congressional
oversight committee permits legislative participation in the implementation and enforcement of the
law.
In their comment, respondents, through the Office of the Solicitor General, question the petition for
being premature as there is no actual case or controversy yet. Petitioners have not asserted any
right or claim that will necessitate the exercise of this Courts jurisdiction. Nevertheless, respondents
acknowledge that public policy requires the resolution of the constitutional issues involved in this
case. They assert that the allegation that the reward system will breed mercenaries is mere
speculation and does not suffice to invalidate the law. Seen in conjunction with the declared
objective of RA 9335, the law validly classifies the BIR and the BOC because the functions they
perform are distinct from those of the other government agencies and instrumentalities. Moreover,
the law provides a sufficient standard that will guide the executive in the implementation of its
provisions. Lastly, the creation of the congressional oversight committee under the law enhances,
rather than violates, separation of powers. It ensures the fulfillment of the legislative policy and serves
as a check to any over-accumulation of power on the part of the executive and the implementing
agencies.
After a careful consideration of the conflicting contentions of the parties, the Court finds that
petitioners have failed to overcome the presumption of constitutionality in favor of RA 9335, except
as shall hereafter be discussed.
Actual Case And Ripeness
An actual case or controversy involves a conflict of legal rights, an assertion of opposite legal claims
susceptible of judicial adjudication.
10
A closely related requirement is ripeness, that is, the question
must be ripe for adjudication. And a constitutional question is ripe for adjudication when the
governmental act being challenged has a direct adverse effect on the individual challenging
it.
11
Thus, to be ripe for judicial adjudication, the petitioner must show a personal stake in the
outcome of the case or an injury to himself that can be redressed by a favorable decision of the
Court.
12

In this case, aside from the general claim that the dispute has ripened into a judicial controversy by
the mere enactment of the law even without any further overt act,
13
petitioners fail either to assert
any specific and concrete legal claim or to demonstrate any direct adverse effect of the law on
them. They are unable to show a personal stake in the outcome of this case or an injury to
themselves. On this account, their petition is procedurally infirm.
This notwithstanding, public interest requires the resolution of the constitutional issues raised by
petitioners. The grave nature of their allegations tends to cast a cloud on the presumption of
constitutionality in favor of the law. And where an action of the legislative branch is alleged to have
275

infringed the Constitution, it becomes not only the right but in fact the duty of the judiciary to settle
the dispute.
14

Accountability of
Public Officers
Section 1, Article 11 of the Constitution states:
Sec. 1. Public office is a public trust. Public officers and employees must at all times be
accountable to the people, serve them with utmost responsibility, integrity, loyalty, and
efficiency, act with patriotism, and justice, and lead modest lives.
Public office is a public trust. It must be discharged by its holder not for his own personal gain but for
the benefit of the public for whom he holds it in trust. By demanding accountability and service with
responsibility, integrity, loyalty, efficiency, patriotism and justice, all government officials and
employees have the duty to be responsive to the needs of the people they are called upon to
serve.
Public officers enjoy the presumption of regularity in the performance of their duties. This
presumption necessarily obtains in favor of BIR and BOC officials and employees. RA 9335 operates
on the basis thereof and reinforces it by providing a system of rewards and sanctions for the purpose
of encouraging the officials and employees of the BIR and the BOC to exceed their revenue targets
and optimize their revenue-generation capability and collection.
15

The presumption is disputable but proof to the contrary is required to rebut it. It cannot be
overturned by mere conjecture or denied in advance (as petitioners would have the Court do)
specially in this case where it is an underlying principle to advance a declared public policy.
Petitioners claim that the implementation of RA 9335 will turn BIR and BOC officials and employees
into "bounty hunters and mercenaries" is not only without any factual and legal basis; it is also purely
speculative.
A law enacted by Congress enjoys the strong presumption of constitutionality. To justify its
nullification, there must be a clear and unequivocal breach of the Constitution, not a doubtful and
equivocal one.
16
To invalidate RA 9335 based on petitioners baseless supposition is an affront to the
wisdom not only of the legislature that passed it but also of the executive which approved it.
Public service is its own reward. Nevertheless, public officers may by law be rewarded for exemplary
and exceptional performance. A system of incentives for exceeding the set expectations of a public
office is not anathema to the concept of public accountability. In fact, it recognizes and reinforces
dedication to duty, industry, efficiency and loyalty to public service of deserving government
personnel.
In United States v. Matthews,
17
the U.S. Supreme Court validated a law which awards to officers of
the customs as well as other parties an amount not exceeding one-half of the net proceeds of
forfeitures in violation of the laws against smuggling. Citing Dorsheimer v. United States,
18
the U.S.
Supreme Court said:
The offer of a portion of such penalties to the collectors is to stimulate and reward their zeal
and industry in detecting fraudulent attempts to evade payment of duties and taxes.
In the same vein, employees of the BIR and the BOC may by law be entitled to a reward when, as a
consequence of their zeal in the enforcement of tax and customs laws, they exceed their revenue
targets. In addition, RA 9335 establishes safeguards to ensure that the reward will not be claimed if it
will be either the fruit of "bounty hunting or mercenary activity" or the product of the irregular
276

performance of official duties. One of these precautionary measures is embodied in Section 8 of the
law:
SEC. 8. Liability of Officials, Examiners and Employees of the BIR and the BOC. The officials,
examiners, and employees of the [BIR] and the [BOC] who violate this Act or who are guilty of
negligence, abuses or acts of malfeasance or misfeasance or fail to exercise extraordinary
diligence in the performance of their duties shall be held liable for any loss or injury suffered
by any business establishment or taxpayer as a result of such violation, negligence, abuse,
malfeasance, misfeasance or failure to exercise extraordinary diligence.
Equal Protection
Equality guaranteed under the equal protection clause is equality under the same conditions and
among persons similarly situated; it is equality among equals, not similarity of treatment of persons
who are classified based on substantial differences in relation to the object to be
accomplished.
19
When things or persons are different in fact or circumstance, they may be treated
in law differently. In Victoriano v. Elizalde Rope Workers Union,
20
this Court declared:
The guaranty of equal protection of the laws is not a guaranty of equality in the application
of the laws upon all citizens of the [S]tate. It is not, therefore, a requirement, in order to avoid
the constitutional prohibition against inequality, that every man, woman and child should be
affected alike by a statute. Equality of operation of statutes does not mean indiscriminate
operation on persons merely as such, but on persons according to the circumstances
surrounding them. It guarantees equality, not identity of rights. The Constitution does not
require that things which are different in fact be treated in law as though they were the same.
The equal protection clause does not forbid discrimination as to things that are different. It
does not prohibit legislation which is limited either in the object to which it is directed or by
the territory within which it is to operate.
The equal protection of the laws clause of the Constitution allows classification. Classification
in law, as in the other departments of knowledge or practice, is the grouping of things in
speculation or practice because they agree with one another in certain particulars. A law is
not invalid because of simple inequality. The very idea of classification is that of inequality, so
that it goes without saying that the mere fact of inequality in no manner determines the
matter of constitutionality. All that is required of a valid classification is that it be reasonable,
which means that the classification should be based on substantial distinctions which make
for real differences, that it must be germane to the purpose of the law; that it must not be
limited to existing conditions only; and that it must apply equally to each member of the
class. This Court has held that the standard is satisfied if the classification or distinction is
based on a reasonable foundation or rational basis and is not palpably arbitrary.
In the exercise of its power to make classifications for the purpose of enacting laws over
matters within its jurisdiction, the state is recognized as enjoying a wide range of discretion. It
is not necessary that the classification be based on scientific or marked differences of things
or in their relation. Neither is it necessary that the classification be made with mathematical
nicety. Hence, legislative classification may in many cases properly rest on narrow distinctions,
for the equal protection guaranty does not preclude the legislature from recognizing degrees
of evil or harm, and legislation is addressed to evils as they may appear.
21
(emphasis supplied)
The equal protection clause recognizes a valid classification, that is, a classification that has a
reasonable foundation or rational basis and not arbitrary.
22
With respect to RA 9335, its expressed
public policy is the optimization of the revenue-generation capability and collection of the BIR and
the BOC.
23
Since the subject of the law is the revenue- generation capability and collection of the
BIR and the BOC, the incentives and/or sanctions provided in the law should logically pertain to the
said agencies. Moreover, the law concerns only the BIR and the BOC because they have the
277

common distinct primary function of generating revenues for the national government through the
collection of taxes, customs duties, fees and charges.
The BIR performs the following functions:
Sec. 18. The Bureau of Internal Revenue. The Bureau of Internal Revenue, which shall be
headed by and subject to the supervision and control of the Commissioner of Internal
Revenue, who shall be appointed by the President upon the recommendation of the
Secretary [of the DOF], shall have the following functions:
(1) Assess and collect all taxes, fees and charges and account for all revenues collected;
(2) Exercise duly delegated police powers for the proper performance of its functions and
duties;
(3) Prevent and prosecute tax evasions and all other illegal economic activities;
(4) Exercise supervision and control over its constituent and subordinate units; and
(5) Perform such other functions as may be provided by law.
24

xxx xxx xxx (emphasis supplied)
On the other hand, the BOC has the following functions:
Sec. 23. The Bureau of Customs. The Bureau of Customs which shall be headed and subject
to the management and control of the Commissioner of Customs, who shall be appointed by
the President upon the recommendation of the Secretary[of the DOF] and hereinafter
referred to as Commissioner, shall have the following functions:
(1) Collect custom duties, taxes and the corresponding fees, charges and penalties;
(2) Account for all customs revenues collected;
(3) Exercise police authority for the enforcement of tariff and customs laws;
(4) Prevent and suppress smuggling, pilferage and all other economic frauds within all ports of
entry;
(5) Supervise and control exports, imports, foreign mails and the clearance of vessels and
aircrafts in all ports of entry;
(6) Administer all legal requirements that are appropriate;
(7) Prevent and prosecute smuggling and other illegal activities in all ports under its
jurisdiction;
(8) Exercise supervision and control over its constituent units;
(9) Perform such other functions as may be provided by law.
25

xxx xxx xxx (emphasis supplied)
Both the BIR and the BOC are bureaus under the DOF. They principally perform the special function
of being the instrumentalities through which the State exercises one of its great inherent functions
taxation. Indubitably, such substantial distinction is germane and intimately related to the purpose of
the law. Hence, the classification and treatment accorded to the BIR and the BOC under RA 9335
fully satisfy the demands of equal protection.
278

Undue Delegation
Two tests determine the validity of delegation of legislative power: (1) the completeness test and (2)
the sufficient standard test. A law is complete when it sets forth therein the policy to be executed,
carried out or implemented by the delegate.
26
It lays down a sufficient standard when it provides
adequate guidelines or limitations in the law to map out the boundaries of the delegates authority
and prevent the delegation from running riot.
27
To be sufficient, the standard must specify the limits
of the delegates authority, announce the legislative policy and identify the conditions under which
it is to be implemented.
28

RA 9335 adequately states the policy and standards to guide the President in fixing revenue targets
and the implementing agencies in carrying out the provisions of the law. Section 2 spells out the
policy of the law:
SEC. 2. Declaration of Policy. It is the policy of the State to optimize the revenue-generation
capability and collection of the Bureau of Internal Revenue (BIR) and the Bureau of Customs
(BOC) by providing for a system of rewards and sanctions through the creation of a Rewards
and Incentives Fund and a Revenue Performance Evaluation Board in the above agencies
for the purpose of encouraging their officials and employees to exceed their revenue targets.
Section 4 "canalized within banks that keep it from overflowing"
29
the delegated power to the
President to fix revenue targets:
SEC. 4. Rewards and Incentives Fund. A Rewards and Incentives Fund, hereinafter referred
to as the Fund, is hereby created, to be sourced from the collection of the BIR and the BOC in
excess of their respective revenue targets of the year, as determined by the Development
Budget and Coordinating Committee (DBCC), in the following percentages:
Excess of Collection of the
Excess the Revenue Targets
Percent (%) of the Excess Collection to
Accrue to the Fund
30% or below 15%
More than 30% 15% of the first 30% plus 20% of the
remaining excess
The Fund shall be deemed automatically appropriated the year immediately following the
year when the revenue collection target was exceeded and shall be released on the same
fiscal year.
Revenue targets shall refer to the original estimated revenue collection expected of the BIR
and the BOC for a given fiscal year as stated in the Budget of Expenditures and Sources of
Financing (BESF) submitted by the President to Congress. The BIR and the BOC shall submit to
the DBCC the distribution of the agencies revenue targets as allocated among its revenue
districts in the case of the BIR, and the collection districts in the case of the BOC.
xxx xxx xxx (emphasis supplied)
Revenue targets are based on the original estimated revenue collection expected respectively of
the BIR and the BOC for a given fiscal year as approved by the DBCC and stated in the BESF
submitted by the President to Congress.
30
Thus, the determination of revenue targets does not rest
solely on the President as it also undergoes the scrutiny of the DBCC.
On the other hand, Section 7 specifies the limits of the Boards authority and identifies the conditions
under which officials and employees whose revenue collection falls short of the target by at least
7.5% may be removed from the service:
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SEC. 7. Powers and Functions of the Board. The Board in the agency shall have the following
powers and functions:
xxx xxx xxx
(b) To set the criteria and procedures for removing from service officials and employees
whose revenue collection falls short of the target by at least seven and a half percent (7.5%),
with due consideration of all relevant factors affecting the level of collection as provided in
the rules and regulations promulgated under this Act, subject to civil service laws, rules and
regulations and compliance with substantive and procedural due process: Provided, That the
following exemptions shall apply:
1. Where the district or area of responsibility is newly-created, not exceeding two years
in operation, as has no historical record of collection performance that can be used as
basis for evaluation; and
2. Where the revenue or customs official or employee is a recent transferee in the
middle of the period under consideration unless the transfer was due to
nonperformance of revenue targets or potential nonperformance of revenue targets:
Provided, however, That when the district or area of responsibility covered by revenue
or customs officials or employees has suffered from economic difficulties brought
about by natural calamities or force majeure or economic causes as may be
determined by the Board, termination shall be considered only after careful and
proper review by the Board.
(c) To terminate personnel in accordance with the criteria adopted in the preceding
paragraph: Provided, That such decision shall be immediately executory: Provided, further,
That the application of the criteria for the separation of an official or employee from service
under this Act shall be without prejudice to the application of other relevant laws on
accountability of public officers and employees, such as the Code of Conduct and Ethical
Standards of Public Officers and Employees and the Anti-Graft and Corrupt Practices Act;
xxx xxx xxx (emphasis supplied)
Clearly, RA 9335 in no way violates the security of tenure of officials and employees of the BIR and
the BOC. The guarantee of security of tenure only means that an employee cannot be dismissed
from the service for causes other than those provided by law and only after due process is
accorded the employee.
31
In the case of RA 9335, it lays down a reasonable yardstick for removal
(when the revenue collection falls short of the target by at least 7.5%) with due consideration of all
relevant factors affecting the level of collection. This standard is analogous to inefficiency and
incompetence in the performance of official duties, a ground for disciplinary action under civil
service laws.
32
The action for removal is also subject to civil service laws, rules and regulations and
compliance with substantive and procedural due process.
At any rate, this Court has recognized the following as sufficient standards: "public interest," "justice
and equity," "public convenience and welfare" and "simplicity, economy and welfare."
33
In this case,
the declared policy of optimization of the revenue-generation capability and collection of the BIR
and the BOC is infused with public interest.
Separation Of Powers
Section 12 of RA 9335 provides:
SEC. 12. Joint Congressional Oversight Committee. There is hereby created a Joint
Congressional Oversight Committee composed of seven Members from the Senate and
seven Members from the House of Representatives. The Members from the Senate shall be
280

appointed by the Senate President, with at least two senators representing the minority. The
Members from the House of Representatives shall be appointed by the Speaker with at least
two members representing the minority. After the Oversight Committee will have approved
the implementing rules and regulations (IRR) it shall thereafter become functus officio and
therefore cease to exist.
The Joint Congressional Oversight Committee in RA 9335 was created for the purpose of approving
the implementing rules and regulations (IRR) formulated by the DOF, DBM, NEDA, BIR, BOC and CSC.
On May 22, 2006, it approved the said IRR. From then on, it became functus officio and ceased to
exist. Hence, the issue of its alleged encroachment on the executive function of implementing and
enforcing the law may be considered moot and academic.
This notwithstanding, this might be as good a time as any for the Court to confront the issue of the
constitutionality of the Joint Congressional Oversight Committee created under RA 9335 (or other
similar laws for that matter).
The scholarly discourse of Mr. Justice (now Chief Justice) Puno on the concept of congressional
oversight in Macalintal v. Commission on Elections
34
is illuminating:
Concept and bases of congressional oversight
Broadly defined, the power of oversight embraces all activities undertaken by Congress to
enhance its understanding of and influence over the implementation of legislation it has
enacted. Clearly, oversight concerns post-enactment measures undertaken by Congress: (a)
to monitor bureaucratic compliance with program objectives, (b) to determine whether
agencies are properly administered, (c) to eliminate executive waste and dishonesty, (d) to
prevent executive usurpation of legislative authority, and (d) to assess executive conformity
with the congressional perception of public interest.
The power of oversight has been held to be intrinsic in the grant of legislative power itself and
integral to the checks and balances inherent in a democratic system of government. x x x x x
x x x x
Over the years, Congress has invoked its oversight power with increased frequency to check
the perceived "exponential accumulation of power" by the executive branch. By the
beginning of the 20
th
century, Congress has delegated an enormous amount of legislative
authority to the executive branch and the administrative agencies. Congress, thus, uses its
oversight power to make sure that the administrative agencies perform their functions within
the authority delegated to them. x x x x x x x x x
Categories of congressional oversight functions
The acts done by Congress purportedly in the exercise of its oversight powers may be divided
intothree categories, namely: scrutiny, investigation and supervision.
a. Scrutiny
Congressional scrutiny implies a lesser intensity and continuity of attention to
administrative operations. Its primary purpose is to determine economy and efficiency
of the operation of government activities. In the exercise of legislative scrutiny,
Congress may request information and report from the other branches of government.
It can give recommendations or pass resolutions for consideration of the agency
involved.
xxx xxx xxx
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b. Congressional investigation
While congressional scrutiny is regarded as a passive process of looking at the facts
that are readily available, congressional investigation involves a more intense digging
of facts. The power of Congress to conduct investigation is recognized by the 1987
Constitution under section 21, Article VI, xxx xxx xxx
c. Legislative supervision
The third and most encompassing form by which Congress exercises its oversight power is thru
legislative supervision. "Supervision" connotes a continuing and informed awareness on the
part of a congressional committee regarding executive operations in a given administrative
area. While both congressional scrutiny and investigation involve inquiry into past executive
branch actions in order to influence future executive branch performance, congressional
supervision allows Congress to scrutinize the exercise of delegated law-making authority, and
permits Congress to retain part of that delegated authority.
Congress exercises supervision over the executive agencies through its veto power. It typically
utilizes veto provisions when granting the President or an executive agency the power to
promulgate regulations with the force of law. These provisions require the President or an
agency to present the proposed regulations to Congress, which retains a "right" to approve or
disapprove any regulation before it takes effect. Such legislative veto provisions usually
provide that a proposed regulation will become a law after the expiration of a certain period
of time, only if Congress does not affirmatively disapprove of the regulation in the meantime.
Less frequently, the statute provides that a proposed regulation will become law if Congress
affirmatively approves it.
Supporters of legislative veto stress that it is necessary to maintain the balance of power
between the legislative and the executive branches of government as it offers lawmakers a
way to delegate vast power to the executive branch or to independent agencies while
retaining the option to cancel particular exercise of such power without having to pass new
legislation or to repeal existing law. They contend that this arrangement promotes
democratic accountability as it provides legislative check on the activities of unelected
administrative agencies. One proponent thus explains:
It is too late to debate the merits of this delegation policy: the policy is too deeply
embedded in our law and practice. It suffices to say that the complexities of modern
government have often led Congress-whether by actual or perceived necessity- to
legislate by declaring broad policy goals and general statutory standards, leaving the
choice of policy options to the discretion of an executive officer. Congress articulates
legislative aims, but leaves their implementation to the judgment of parties who may or
may not have participated in or agreed with the development of those aims.
Consequently, absent safeguards, in many instances the reverse of our constitutional
scheme could be effected: Congress proposes, the Executive disposes. One
safeguard, of course, is the legislative power to enact new legislation or to change
existing law. But without some means of overseeing post enactment activities of the
executive branch, Congress would be unable to determine whether its policies have
been implemented in accordance with legislative intent and thus whether legislative
intervention is appropriate.
Its opponents, however, criticize the legislative veto as undue encroachment upon the
executive prerogatives. They urge that any post-enactment measures undertaken by the
legislative branch should be limited to scrutiny and investigation; any measure beyond that
would undermine the separation of powers guaranteed by the Constitution. They contend
that legislative veto constitutes an impermissible evasion of the Presidents veto authority and
282

intrusion into the powers vested in the executive or judicial branches of government.
Proponents counter that legislative veto enhances separation of powers as it prevents the
executive branch and independent agencies from accumulating too much power. They
submit that reporting requirements and congressional committee investigations allow
Congress to scrutinize only the exercise of delegated law-making authority. They do not allow
Congress to review executive proposals before they take effect and they do not afford the
opportunity for ongoing and binding expressions of congressional intent. In contrast,
legislative veto permits Congress to participate prospectively in the approval or disapproval
of "subordinate law" or those enacted by the executive branch pursuant to a delegation of
authority by Congress. They further argue that legislative veto "is a necessary response by
Congress to the accretion of policy control by forces outside its chambers." In an era of
delegated authority, they point out that legislative veto "is the most efficient means Congress
has yet devised to retain control over the evolution and implementation of its policy as
declared by statute."
In Immigration and Naturalization Service v. Chadha, the U.S. Supreme Court resolved the
validity of legislative veto provisions. The case arose from the order of the immigration judge
suspending the deportation of Chadha pursuant to 244(c)(1) of the Immigration and
Nationality Act. The United States House of Representatives passed a resolution vetoing the
suspension pursuant to 244(c)(2) authorizing either House of Congress, by resolution, to
invalidate the decision of the executive branch to allow a particular deportable alien to
remain in the United States. The immigration judge reopened the deportation proceedings to
implement the House order and the alien was ordered deported. The Board of Immigration
Appeals dismissed the aliens appeal, holding that it had no power to declare
unconstitutional an act of Congress. The United States Court of Appeals for Ninth Circuit held
that the House was without constitutional authority to order the aliens deportation and that
244(c)(2) violated the constitutional doctrine on separation of powers.
On appeal, the U.S. Supreme Court declared 244(c)(2) unconstitutional. But the Court shied
away from the issue of separation of powers and instead held that the provision violates the
presentment clause and bicameralism. It held that the one-house veto was essentially
legislative in purpose and effect. As such, it is subject to the procedures set out in Article I of
the Constitution requiring the passage by a majority of both Houses and presentment to the
President. x x x x x x x x x
Two weeks after the Chadha decision, the Court upheld, in memorandum decision, two
lower court decisions invalidating the legislative veto provisions in the Natural Gas Policy Act
of 1978 and the Federal Trade Commission Improvement Act of 1980. Following this
precedence, lower courts invalidated statutes containing legislative veto provisions although
some of these provisions required the approval of both Houses of Congress and thus met the
bicameralism requirement of Article I. Indeed, some of these veto provisions were not even
exercised.
35
(emphasis supplied)
In Macalintal, given the concept and configuration of the power of congressional oversight and
considering the nature and powers of a constitutional body like the Commission on Elections, the
Court struck down the provision in RA 9189 (The Overseas Absentee Voting Act of 2003) creating a
Joint Congressional Committee. The committee was tasked not only to monitor and evaluate the
implementation of the said law but also to review, revise, amend and approve the IRR promulgated
by the Commission on Elections. The Court held that these functions infringed on the constitutional
independence of the Commission on Elections.
36

With this backdrop, it is clear that congressional oversight is not unconstitutional per se, meaning, it
neither necessarily constitutes an encroachment on the executive power to implement laws nor
undermines the constitutional separation of powers. Rather, it is integral to the checks and balances
283

inherent in a democratic system of government. It may in fact even enhance the separation of
powers as it prevents the over-accumulation of power in the executive branch.
However, to forestall the danger of congressional encroachment "beyond the legislative sphere,"
the Constitution imposes two basic and related constraints on Congress.
37
It may not vest itself, any
of its committees or its members with either executive or judicial power.
38
And, when it exercises its
legislative power, it must follow the "single, finely wrought and exhaustively considered, procedures"
specified under the Constitution,
39
including the procedure for enactment of laws and presentment.
Thus, any post-enactment congressional measure such as this should be limited to scrutiny and
investigation. In particular, congressional oversight must be confined to the following:
(1) scrutiny based primarily on Congress power of appropriation and the budget hearings
conducted in connection with it, its power to ask heads of departments to appear before
and be heard by either of its Houses on any matter pertaining to their departments and its
power of confirmation
40
and
(2) investigation and monitoring
41
of the implementation of laws pursuant to the power of
Congress to conduct inquiries in aid of legislation.
42

Any action or step beyond that will undermine the separation of powers guaranteed by the
Constitution. Legislative vetoes fall in this class.
Legislative veto is a statutory provision requiring the President or an administrative agency to present
the proposed implementing rules and regulations of a law to Congress which, by itself or through a
committee formed by it, retains a "right" or "power" to approve or disapprove such regulations
before they take effect. As such, a legislative veto in the form of a congressional oversight
committee is in the form of an inward-turning delegation designed to attach a congressional leash
(other than through scrutiny and investigation) to an agency to which Congress has by law initially
delegated broad powers.
43
It radically changes the design or structure of the Constitutions diagram
of power as it entrusts to Congress a direct role in enforcing, applying or implementing its own laws.
44

Congress has two options when enacting legislation to define national policy within the broad
horizons of its legislative competence.
45
It can itself formulate the details or it can assign to the
executive branch the responsibility for making necessary managerial decisions in conformity with
those standards.
46
In the latter case, the law must be complete in all its essential terms and
conditions when it leaves the hands of the legislature.
47
Thus, what is left for the executive branch or
the concerned administrative agency when it formulates rules and regulations implementing the
law is to fill up details (supplementary rule-making) or ascertain facts necessary to bring the law into
actual operation (contingent rule-making).
48

Administrative regulations enacted by administrative agencies to implement and interpret the law
which they are entrusted to enforce have the force of law and are entitled to respect.
49
Such rules
and regulations partake of the nature of a statute
50
and are just as binding as if they have been
written in the statute itself. As such, they have the force and effect of law and enjoy the
presumption of constitutionality and legality until they are set aside with finality in an appropriate
case by a competent court.
51
Congress, in the guise of assuming the role of an overseer, may not
pass upon their legality by subjecting them to its stamp of approval without disturbing the
calculated balance of powers established by the Constitution. In exercising discretion to approve or
disapprove the IRR based on a determination of whether or not they conformed with the provisions
of RA 9335, Congress arrogated judicial power unto itself, a power exclusively vested in this Court by
the Constitution.
Considered Opinion of
Mr. Justice Dante O. Tinga
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Moreover, the requirement that the implementing rules of a law be subjected to approval by
Congress as a condition for their effectivity violates the cardinal constitutional principles of
bicameralism and the rule on presentment.
52

Section 1, Article VI of the Constitution states:
Section 1. The legislative power shall be vested in the Congress of the Philippines which shall
consist of a Senate and a House of Representatives, except to the extent reserved to the
people by the provision on initiative and referendum. (emphasis supplied)
Legislative power (or the power to propose, enact, amend and repeal laws)
53
is vested in Congress
which consists of two chambers, the Senate and the House of Representatives. A valid exercise of
legislative power requires the act of both chambers. Corrollarily, it can be exercised neither solely by
one of the two chambers nor by a committee of either or both chambers. Thus, assuming the validity
of a legislative veto, both a single-chamber legislative veto and a congressional committee
legislative veto are invalid.
Additionally, Section 27(1), Article VI of the Constitution provides:
Section 27. (1) Every bill passed by the Congress shall, before it becomes a law, be presented
to the President. If he approves the same, he shall sign it, otherwise, he shall veto it and return
the same with his objections to the House where it originated, which shall enter the objections
at large in its Journal and proceed to reconsider it. If, after such reconsideration, two-thirds of
all the Members of such House shall agree to pass the bill, it shall be sent, together with the
objections, to the other House by which it shall likewise be reconsidered, and if approved by
two-thirds of all the Members of that House, it shall become a law. In all such cases, the votes
of each House shall be determined by yeas or nays, and the names of the members voting
for or against shall be entered in its Journal. The President shall communicate his veto of any
bill to the House where it originated within thirty days after the date of receipt thereof;
otherwise, it shall become a law as if he had signed it. (emphasis supplied)
Every bill passed by Congress must be presented to the President for approval or veto. In the
absence of presentment to the President, no bill passed by Congress can become a law. In this
sense, law-making under the Constitution is a joint act of the Legislature and of the Executive.
Assuming that legislative veto is a valid legislative act with the force of law, it cannot take effect
without such presentment even if approved by both chambers of Congress.
In sum, two steps are required before a bill becomes a law. First, it must be approved by both
Houses of Congress.
54
Second, it must be presented to and approved by the President.
55
As
summarized by Justice Isagani Cruz
56
and Fr. Joaquin G. Bernas, S.J.
57
, the following is the procedure
for the approval of bills:
A bill is introduced by any member of the House of Representatives or the Senate except for
some measures that must originate only in the former chamber.
The first reading involves only a reading of the number and title of the measure and its referral
by the Senate President or the Speaker to the proper committee for study.
The bill may be "killed" in the committee or it may be recommended for approval, with or
without amendments, sometimes after public hearings are first held thereon. If there are other
bills of the same nature or purpose, they may all be consolidated into one bill under common
authorship or as a committee bill.
Once reported out, the bill shall be calendared for second reading. It is at this stage that the
bill is read in its entirety, scrutinized, debated upon and amended when desired. The second
reading is the most important stage in the passage of a bill.
285

The bill as approved on second reading is printed in its final form and copies thereof are
distributed at least three days before the third reading. On the third reading, the members
merely register their votes and explain them if they are allowed by the rules. No further
debate is allowed.
Once the bill passes third reading, it is sent to the other chamber, where it will also undergo
the three readings. If there are differences between the versions approved by the two
chambers, a conference committee
58
representing both Houses will draft a compromise
measure that if ratified by the Senate and the House of Representatives will then be
submitted to the President for his consideration.
The bill is enrolled when printed as finally approved by the Congress, thereafter
authenticated with the signatures of the Senate President, the Speaker, and the Secretaries
of their respective chambers
59

The Presidents role in law-making.
The final step is submission to the President for approval. Once approved, it takes effect as
law after the required publication.
60

Where Congress delegates the formulation of rules to implement the law it has enacted pursuant to
sufficient standards established in the said law, the law must be complete in all its essential terms
and conditions when it leaves the hands of the legislature. And it may be deemed to have left the
hands of the legislature when it becomes effective because it is only upon effectivity of the statute
that legal rights and obligations become available to those entitled by the language of the statute.
Subject to the indispensable requisite of publication under the due process clause,
61
the
determination as to when a law takes effect is wholly the prerogative of Congress.
62
As such, it is only
upon its effectivity that a law may be executed and the executive branch acquires the duties and
powers to execute the said law. Before that point, the role of the executive branch, particularly of
the President, is limited to approving or vetoing the law.
63

From the moment the law becomes effective, any provision of law that empowers Congress or any
of its members to play any role in the implementation or enforcement of the law violates the
principle of separation of powers and is thus unconstitutional. Under this principle, a provision that
requires Congress or its members to approve the implementing rules of a law after it has already
taken effect shall be unconstitutional, as is a provision that allows Congress or its members to
overturn any directive or ruling made by the members of the executive branch charged with the
implementation of the law.
Following this rationale, Section 12 of RA 9335 should be struck down as unconstitutional. While there
may be similar provisions of other laws that may be invalidated for failure to pass this standard, the
Court refrains from invalidating them wholesale but will do so at the proper time when an
appropriate case assailing those provisions is brought before us.
64

The next question to be resolved is: what is the effect of the unconstitutionality of Section 12 of RA
9335 on the other provisions of the law? Will it render the entire law unconstitutional? No.
Section 13 of RA 9335 provides:
SEC. 13. Separability Clause. If any provision of this Act is declared invalid by a competent
court, the remainder of this Act or any provision not affected by such declaration of invalidity
shall remain in force and effect.
In Tatad v. Secretary of the Department of Energy,
65
the Court laid down the following rules:
286

The general rule is that where part of a statute is void as repugnant to the Constitution, while
another part is valid, the valid portion, if separable from the invalid, may stand and be
enforced. The presence of a separability clause in a statute creates the presumption that the
legislature intended separability, rather than complete nullity of the statute. To justify this
result, the valid portion must be so far independent of the invalid portion that it is fair to
presume that the legislature would have enacted it by itself if it had supposed that it could
not constitutionally enact the other. Enough must remain to make a complete, intelligible and
valid statute, which carries out the legislative intent. x x x
The exception to the general rule is that when the parts of a statute are so mutually
dependent and connected, as conditions, considerations, inducements, or compensations
for each other, as to warrant a belief that the legislature intended them as a whole, the nullity
of one part will vitiate the rest. In making the parts of the statute dependent, conditional, or
connected with one another, the legislature intended the statute to be carried out as a
whole and would not have enacted it if one part is void, in which case if some parts are
unconstitutional, all the other provisions thus dependent, conditional, or connected must fall
with them.
The separability clause of RA 9335 reveals the intention of the legislature to isolate and detach any
invalid provision from the other provisions so that the latter may continue in force and effect. The
valid portions can stand independently of the invalid section. Without Section 12, the remaining
provisions still constitute a complete, intelligible and valid law which carries out the legislative intent
to optimize the revenue-generation capability and collection of the BIR and the BOC by providing
for a system of rewards and sanctions through the Rewards and Incentives Fund and a Revenue
Performance Evaluation Board.
To be effective, administrative rules and regulations must be published in full if their purpose is to
enforce or implement existing law pursuant to a valid delegation. The IRR of RA 9335 were published
on May 30, 2006 in two newspapers of general circulation
66
and became effective 15 days
thereafter.
67
Until and unless the contrary is shown, the IRR are presumed valid and effective even
without the approval of the Joint Congressional Oversight Committee.
WHEREFORE, the petition is hereby PARTIALLY GRANTED. Section 12 of RA 9335 creating a Joint
Congressional Oversight Committee to approve the implementing rules and regulations of the law is
declared UNCONSTITUTIONAL and therefore NULL and VOID. The constitutionality of the remaining
provisions of RA 9335 is UPHELD. Pursuant to Section 13 of RA 9335, the rest of the provisions remain in
force and effect.
SO ORDERED.