G.R No.

187167 August 16, 2011

PROF. MERLIN M. MAGALLONA, AKBAYAN PARTY-LIST REP.
RISA HONTIVEROS, PROF. HARRY C. ROQUE, JR., AND
UNIVERSITY OF THE PHILIPPINES COLLEGE OF LAW
STUDENTS, ALITHEA BARBARA ACAS, VOLTAIRE ALFERES,
CZARINA MAY ALTEZ, FRANCIS ALVIN ASILO, SHERYL BALOT,
RUBY AMOR BARRACA, JOSE JAVIER BAUTISTA, ROMINA
BERNARDO, VALERIE PAGASA BUENAVENTURA, EDAN MARRI
CAETE, VANN ALLEN DELA CRUZ, RENE DELORINO, PAULYN
MAY DUMAN, SHARON ESCOTO, RODRIGO FAJARDO III,
GIRLIE FERRER, RAOULLE OSEN FERRER, CARLA REGINA
GREPO, ANNA MARIE CECILIA GO, IRISH KAY KALAW, MARY
ANN JOY LEE, MARIA LUISA MANALAYSAY, MIGUEL RAFAEL
MUSNGI, MICHAEL OCAMPO, JAKLYN HANNA PINEDA,
WILLIAM RAGAMAT, MARICAR RAMOS, ENRIK FORT
REVILLAS, JAMES MARK TERRY RIDON, JOHANN FRANTZ
RIVERA IV, CHRISTIAN RIVERO, DIANNE MARIE ROA,
NICHOLAS SANTIZO, MELISSA CHRISTINA SANTOS, CRISTINE
MAE TABING, VANESSA ANNE TORNO, MARIA ESTER
VANGUARDIA, and MARCELINO VELOSO III, Petitioners,
vs.
HON. EDUARDO ERMITA, IN HIS CAPACITY AS EXECUTIVE
SECRETARY, HON. ALBERTO ROMULO, IN HIS CAPACITY AS
SECRETARY OF THE DEPARTMENT OF FOREIGN AFFAIRS,
HON. ROLANDO ANDAYA, IN HIS CAPACITY AS SECRETARY OF
THE DEPARTMENT OF BUDGET AND MANAGEMENT, HON.
DIONY VENTURA, IN HIS CAPACITY AS ADMINISTRATOR OF
THE NATIONAL MAPPING & RESOURCE INFORMATION
AUTHORITY, and HON. HILARIO DAVIDE, JR., IN HIS CAPACITY
AS REPRESENTATIVE OF THE PERMANENT MISSION OF THE
REPUBLIC OF THE PHILIPPINES TO THE UNITED
NATIONS, Respondents.
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

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 oflocus 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 I ssues 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
standi as 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
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 I I I , 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 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 I slands to
Determine the Maritime Zones of the KI G and the
Scarborough Shoal, not I nconsistent 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.1avvphi1
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)
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 because if 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.
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.1avvphi1 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)
UNCLOS I I I and RA 9522 not I ncompatible with the
Constitutions Delineation of I nternal 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 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.
G.R. No. 101083 July 30, 1993
JUAN ANTONIO, ANNA ROSARIO and JOSE ALFONSO, all
surnamed OPOSA, minors, and represented by their parents ANTONIO
and RIZALINA OPOSA, ROBERTA NICOLE SADIUA, minor,
represented by her parents CALVIN and ROBERTA SADIUA, CARLO,
AMANDA SALUD and PATRISHA, all surnamed FLORES, minors and
represented by their parents ENRICO and NIDA FLORES, GIANINA
DITA R. FORTUN, minor, represented by her parents SIGRID and
DOLORES FORTUN, GEORGE II and MA. CONCEPCION, all
surnamed MISA, minors and represented by their parents GEORGE and
MYRA MISA, BENJAMIN ALAN V. PESIGAN, minor, represented by
his parents ANTONIO and ALICE PESIGAN, JOVIE MARIE
ALFARO, minor, represented by her parents JOSE and MARIA
VIOLETA ALFARO, MARIA CONCEPCION T. CASTRO, minor,
represented by her parents FREDENIL and JANE CASTRO,
JOHANNA DESAMPARADO,
minor, represented by her parents JOSE and ANGELA DESAMPRADO,
CARLO JOAQUIN T. NARVASA, minor, represented by his parents
GREGORIO II and CRISTINE CHARITY NARVASA, MA.
MARGARITA, JESUS IGNACIO, MA. ANGELA and MARIE
GABRIELLE, all surnamed SAENZ, minors, represented by their
parents ROBERTO and AURORA SAENZ, KRISTINE, MARY ELLEN,
MAY, GOLDA MARTHE and DAVID IAN, all surnamed KING,
minors, represented by their parents MARIO and HAYDEE KING,
DAVID, FRANCISCO and THERESE VICTORIA, all surnamed
ENDRIGA, minors, represented by their parents BALTAZAR and
TERESITA ENDRIGA, JOSE MA. and REGINA MA., all surnamed
ABAYA, minors, represented by their parents ANTONIO and MARICA
ABAYA, MARILIN, MARIO, JR. and MARIETTE, all surnamed
CARDAMA, minors, represented by their parents MARIO and LINA
CARDAMA, CLARISSA, ANN MARIE, NAGEL, and IMEE LYN, all
surnamed OPOSA, minors and represented by their parents RICARDO
and MARISSA OPOSA, PHILIP JOSEPH, STEPHEN JOHN and
ISAIAH JAMES, all surnamed QUIPIT, minors, represented by their
parents JOSE MAX and VILMI QUIPIT, BUGHAW CIELO,
CRISANTO, ANNA, DANIEL and FRANCISCO, all surnamed BIBAL,
minors, represented by their parents FRANCISCO, JR. and MILAGROS
BIBAL, and THE PHILIPPINE ECOLOGICAL NETWORK,
INC.,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.
Oposa Law Office for petitioners.
The Solicitor General for 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 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.
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);
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.
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.
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 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.
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:
. . . 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:
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 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.
G.R. No. 118295 May 2, 1997
WIGBERTO E. TAADA and ANNA DOMINIQUE COSETENG, as
members of the Philippine Senate and as taxpayers; GREGORIO
ANDOLANA and JOKER ARROYO as members of the House of
Representatives and as taxpayers; NICANOR P. PERLAS and
HORACIO R. MORALES, both as taxpayers; CIVIL LIBERTIES
UNION, NATIONAL ECONOMIC PROTECTIONISM
ASSOCIATION, CENTER FOR ALTERNATIVE DEVELOPMENT
INITIATIVES, LIKAS-KAYANG KAUNLARAN FOUNDATION, INC.,
PHILIPPINE RURAL RECONSTRUCTION MOVEMENT,
DEMOKRATIKONG KILUSAN NG MAGBUBUKID NG PILIPINAS,
INC., and PHILIPPINE PEASANT INSTITUTE, in representation of
various taxpayers and as non-governmental organizations, petitioners,
vs.
EDGARDO ANGARA, ALBERTO ROMULO, LETICIA RAMOS-
SHAHANI, HEHERSON ALVAREZ, AGAPITO AQUINO, RODOLFO
BIAZON, NEPTALI GONZALES, ERNESTO HERRERA, JOSE LINA,
GLORIA. MACAPAGAL-ARROYO, ORLANDO MERCADO, BLAS
OPLE, JOHN OSMEA, SANTANINA RASUL, RAMON REVILLA,
RAUL ROCO, FRANCISCO TATAD and FREDDIE WEBB, in their
respective capacities as members of the Philippine Senate who concurred
in the ratification by the President of the Philippines of the Agreement
Establishing the World Trade Organization; SALVADOR ENRIQUEZ,
in his capacity as Secretary of Budget and Management; CARIDAD
VALDEHUESA, in her capacity as National Treasurer; RIZALINO
NAVARRO, in his capacity as Secretary of Trade and Industry;
ROBERTO SEBASTIAN, in his capacity as Secretary of Agriculture;
ROBERTO DE OCAMPO, in his capacity as Secretary of Finance;
ROBERTO ROMULO, in his capacity as Secretary of Foreign Affairs;
and TEOFISTO T. GUINGONA, in his capacity as Executive
Secretary, 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 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."
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 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.
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
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

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 and mandamus 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
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
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)
(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 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
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.
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 against unfair 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 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 trade commensurate 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 countriesto be effected within a period of
six (6) years while developing countries including the
Philippines arerequired 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 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.
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

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 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.
(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 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 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 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.
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.

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. 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.
G.R. No. 118910 November 16, 1995
KILOSBAYAN, INCORPORATED, JOVITO R. SALONGA, CIRILO
A. RIGOS, ERME CAMBA, EMILIO C. CAPULONG, JR., JOSE T.
APOLO, EPHRAIM TENDERO, FERNANDO SANTIAGO, JOSE
ABCEDE, CHRISTINE TAN, RAFAEL G. FERNANDO, RAOUL V.
VICTORINO, JOSE CUNANAN, QUINTIN S. DOROMAL, SEN.
FREDDIE WEBB, SEN. WIGBERTO TAADA, REP. JOKER P.
ARROYO, petitioners,
vs.
MANUEL L. MORATO, in his capacity as Chairman of the Philippine
Charity Sweepstakes Office, and the PHILIPPINE GAMING
MANAGEMENT CORPORATION, respondents.
R E S O L U T I O N
MENDOZA, J .:
Petitioners seek reconsideration of our decision in this case.
They insist that the decision in the first case has already settled
(1) whether petitioner Kilosbayan, Inc. has a standing to sue
and (2) whether under its charter (R.A. No. 1169, as amended)
the Philippine Charity Sweepstakes Office can enter into any
form of association or collaboration with any party in
operating an on-line lottery. Consequently, petitioners
contend, these questions can no longer be reopened.
Because two members of the Court did not consider
themselves bound by the decision in the first case, petitioners
suggest that the two, in joining the dissenters in the first case
in reexamining the questions in the present case, acted
otherwise than according to law. They cite the following
statement in the opinion of the Court:
The voting on petitioners' standing in the previous case was a
narrow one, with seven (7) members sustaining petitioners'
standing and six (6) denying petitioners' right to bring the suit.
The majority was thus a tenuous one that is not likely to be
maintained in any subsequent litigation. In addition, there
have been changes in the membership of the Court, with the
retirement of Justices Cruz and Bidin and the appointment of
the writer of this opinion and Justice Francisco. Given this fact
it is hardly tenable to insist on the maintenance of the ruling as
to petitioners' standing.
Petitioners claim that this statement "conveys a none too
subtle suggestion, perhaps a Freudian slip, that the two new
appointees, regardless of the merit of the Decision in the first
Kilosbayan case against the lotto (Kilosbayan, et al. v.
Guingona, 232 SCRA 110 (1994)) must of necessity align
themselves with all the Ramos appointees who were dissenters
in the first case and constitute the new majority in the second
lotto case." And petitioners ask, "why should it be so?"
Petitioners ask a question to which they have made up an
answer. Their attempt at psychoanalysis, detecting a Freudian
slip where none exists, may be more revealing of their own
unexpressed wish to find motives where there are none which
they can impute to some members of the Court.
For the truth is that the statement is no more than an effort
to explain rather than to justify the majority's decision to
overrule the ruling in the previous case. It is simply meant to
explain that because the five members of the Court who
dissented in the first case (Melo, Quiason, Puno, Vitug and
Kapunan, JJ.) and the two new members (Mendoza and
Francisco, JJ.) thought the previous ruling to be
erroneous and its reexamination not to be barred by stare
decisis, res judicata or conclusiveness of judgment, or law of
the case, it was hardly tenable for petitioners to insist on the
first ruling.
Consequently to petitioners' question "What is the glue that
holds them together," implying some ulterior motives on the
part of the new majority in reexamining the two questions, the
answer is: None, except a conviction on the part of the five,
who had been members of the Court at the time they dissented
in the first case, and the two new members that the previous
ruling was erroneous. The eighth Justice (Padilla, J.) on the
other hand agrees with the seven Justices that the ELA is in a
real sense a lease agreement and therefore does not violate
R.A. No. 1169.
The decision in the first case was a split decision: 7-6. With
the retirement of one of the original majority (Cruz,J.) and one
of the dissenters (Bidin, J.) it was not surprising that the first
decision in the first case was later reversed.
It is argued that, in any case, a reexamination of the two
questions is barred because the PCSO and the Philippine
Gaming Management Corporation made a " formal
commitment not to ask for a reconsideration of the Decision in
the first lotto case and instead submit a new agreement that
would be in conformity with the PCSO Charter (R.A. No.
1169, as amended) and with the Decision of the Supreme
Court in the first Kilosbayan case against on-line, hi-tech
lotto."
To be sure, a new contract was entered into which the majority
of the Court finds has been purged of the features which made
the first contract objectionable. Moreover, what the PCSO said
in its manifestation in the first case was the following:
1. They are no longer filing a motion for reconsideration of the
Decision of this Honorable Court dated May 5, 1994, a copy
of which was received on May 6, 1994.
2. Respondents PCSO and PGMC are presently negotiating a
new lease agreement consistent with the authority of PCSO
under its charter (R.A. No. 1169, as amended by B.P. Blg. 42)
and conformable with the pronouncements of this Honorable
Court in its Decision of May 5, 1995.
The PGMC made substantially the same manifestation as the
PCSO.
There was thus no "formal commitment" but only a
manifestation that the parties were not filing a motion for
reconsideration. Even if the parties made a "formal
commitment," the six (6) dissenting Justices certainly could
not be bound thereby not to insist on their contrary view on
the question of standing. Much less were the two new
members bound by any "formal commitment" made by the
parties. They believed that the ruling in the first case was
erroneous. Since in their view reexamination was not barred
by the doctrine of stare decisis, res judicata or conclusiveness
of judgment or law of the case, they voted the way they did
with the remaining five (5) dissenters in the first case to form
a new majority of eight.
Petitioners ask, "Why should this be so?" Because, as
explained in the decision, the first decision was
erroneous and no legal doctrine stood in the way of its
reexamination. It can, therefore, be asked "with equal candor":
"Why should this not be so?"
Nor is this the first time a split decision was tested, if not
reversed, in a subsequent case because of change in the
membership of a court. In 1957, this Court, voting 6-5, held
in Feliciano v. Aquinas, G.R. No. L-10201, Sept. 23, 1957 that
the phrase "at the time of the election" in 2174 of the Revised
Administrative Code of 1917 meant that a candidate for
municipal elective position must be at least 23 years of age on
the date of the election. On the other hand, the dissenters
argued that it was enough if he attained that age on the day he
assumed office.
Less than three years later, the same question was before the
Court again, as a candidate for municipal councilor stated
under oath in her certificate of candidacy that she was eligible
for that position although she attained the requisite age (23
years) only when she assumed office. The question was
whether she could be prosecuted for falsification. In People
v. Yang, 107 Phi. 888 (1960), the Court ruled she could not.
Justice, later Chief Justice, Benison, who dissented in the first
case, Feliciano v. Aquinas, supra, wrote the opinion of the
Court, holding that while the statement that the accused was
eligible was "inexact or erroneous, according to the majority
in the Feliciano case," the accused could not be held liable for
falsification, because
the question [whether the law really required candidates to
have the required age on the day of the election or whether it
was sufficient that they attained it at the beginning of the term
of office] has not been discussed anew, despite the presence of
new members; we simply assume for the purpose of this
decision that the doctrine stands.
Thus because in the meantime there had been a change in the
membership of the Court with the retirement of two members
(Recess and Flex, JJ.) who had taken part in the decision in
the first case and their replacement by new members (Barrera
and Gutierrez-David, JJ.) and the fact that the vote in the first
case was a narrow one (6 to 5), the Court allowed that the
continuing validity of its ruling in the first case might well be
doubted. For this reason it gave the accused the benefit of the
doubt that she had acted in the good faith belief that it was
sufficient that she was 23 years of age when she assumed
office.
In that case, the change in the membership of the Court and
the possibility of change in the ruling were noted without
anyone much less would-be psychoanalysts finding in
the statement of the Court any Freudian slip. The possibility of
change in the rule as a result of change in membership was
accepted as a sufficient reason for finding good faith and lack
of criminal intent on the part of the accused.
Indeed, a change in the composition of the Court could prove
the means of undoing an erroneous decision. This was the
lesson of Knox v. Lee, 12 Wall. 457 (1871). The Legal Tender
Acts, which were passed during the Civil War, made U.S.
notes (greenbacks) legal tender for the payment of debts,
public or private, with certain exceptions. The validity of the
acts, as applied to preexisting debts, was challenged
in Hepburn v. Griswold, 8 Wall. 603 (1869). The Court was
then composed of only eight (8) Justices because of
Congressional effort to limit the appointing power of President
Johnson. Voting 5-3, the Court declared the acts void. Chief
Justice Chase wrote the opinion of the Court in which four
others, including Justice Grier, concurred. Justices Miller,
Swayne and Davis dissented. A private memorandum left by
the dissenting Justices described how an effort was made "to
convince an aged and infirm member of the court [Justice
Grier] that he had not understood the question on which he
voted," with the result that what was originally a 4-4 vote was
converted into a majority (5-3) for holding the acts invalid.
On the day the decision was announced, President Grant
nominated to the Court William Strong and Joseph P. Bradley
to fill the vacancy caused by the resignation of Justice Grier
and to restore the membership of the Court to nine. In
1871, Hepburn v. Griswold was overruled in the Legal Tender
Cases, as Knox v. Lee came to be known, in an opinion by
Justice Strong, with a dissenting opinion by Chief Justice
Chase and the three other surviving members of the former
majority. There were allegations that the new Justices were
appointed for their known views on the validity of the Legal
Tender Acts, just as there were others who defended the
character and independence of the new Justices. History has
vindicated the overruling of the Hepburn case by the new
majority. The Legal Tender Cases proved to be the Court's
means of salvation from what Chief Justice Hughes later
described as one of the Court's "self-inflicted wounds."
1

We now consider the specific grounds for petitioners' motion
for reconsideration.
I. We have held that because there are no genuine issues of
constitutionality in this case, the rule concerningreal party in
interest, applicable to private litigation rather than the more
liberal rule on standing, applies to petitioners. Two objections
are made against that ruling: (1) that the constitutional policies
and principles invoked by petitioners, while not supplying the
basis for affirmative relief from the courts, may nonetheless be
resorted to for striking down laws or official actions which are
inconsistent with them and (2) that the Constitution, by
guaranteeing to independent people's organizations "effective
and reasonable participation at all levels of social, political
and economic decision-making" (Art. XIII, 16), grants them
standing to sue on constitutional grounds.
The policies and principles of the Constitution invoked by
petitioner read:
Art. II, 5. The maintenance of peace and order, the protection
life, liberty, and property, and thepromotion of the general
welfare are essential for the enjoyment by all the people of the
blessings of democracy.
Id., 12. The natural and primary right and duty of parents in
the rearing of the youth for civic efficiency and
the development of moral character shall receive the support
of the Government.
Id., 13. The State recognizes the vital role of the youth in
nation-building and shall promote and protect their
physical, moral, spiritual, intellectual, and social well-being.
It shall inculcate in the youth patriotism and nationalism, and
encourage their involvement in public and civic affairs.
Id., 17. The State shall give priority to education, science and
technology, arts, culture, and sports to foster patriotism and
nationalism, accelerate social progress, and promote total
human liberation and development.
As already stated, however, these provisions are not self-
executing. They do not confer rights which can be enforced in
the courts but only provide guidelines for legislative or
executive action. By authorizing the holding of lottery for
charity, Congress has in effect determined that consistently
with these policies and principles of the Constitution, the
PCSO may be given this authority. That is why we said with
respect to the opening by the PAGCOR of a casino in Cagayan
de Oro, "the morality of gambling is not a justiciable issue.
Gambling is not illegal per se. . . . It is left to Congress to deal
with the activity as it sees fit." (Magtajas v. Pryce Properties
Corp., Inc., 234 SCRA 255, 268 [1994]).
It is noteworthy that petitioners do not question the validity of
the law allowing lotteries. It is the contract entered into by the
PCSO and the PGMC which they are assailing. This case,
therefore, does not raise issues of constitutionality but only of
contract law, which petitioners, not being privies to the
agreement, cannot raise.
Nor does Kilosbayan's status as a people's organization give it
the requisite personality to question the validity of the contract
in this case. The Constitution provides that "the State shall
respect the role of independent people's organizations to
enable the people to pursue and protect, within the democratic
framework, their legitimate and collective interests and
aspirations through peaceful and lawful means," that their
right to "effective and reasonable participation at all levels of
social, political, and economic decision-making shall not be
abridged." (Art. XIII, 15-16)
These provisions have not changed the traditional rule that
only real parties in interest or those with standing, as the case
may be, may invoke the judicial power. The jurisdiction of
this Court, even in cases involving constitutional questions, is
limited by the "case and controversy" requirement of Art.
VIII, 5. This requirement lies at the very heart of the judicial
function. It is what differentiates decision-making in the courts
from decision-making in the political departments of the
government and bars the bringing of suits by just any party.
Petitioners quote extensively from the speech of
Commissioner Garcia before the Constitutional Commission,
explaining the provisions on independent people's
organizations. There is nothing in the speech, however, which
supports their claim of standing. On the contrary, the speech
points the way to the legislative and executive branches of the
government, rather than to the courts, as the appropriate fora
for the advocacy of petitioners' views.
2
Indeed, the provisions
on independent people's organizations may most usefully be
read in connection with the provision on initiative and
referendum as a means whereby the people may propose or
enact laws or reject any of those passed by Congress. For the
fact is that petitioners' opposition to the contract in question is
nothing more than an opposition to the government policy on
lotteries.
It is nevertheless insisted that this Court has in the past
accorded standing to taxpayers and concerned citizens in cases
involving "paramount public interest." Taxpayers, voters,
concerned citizens and legislators have indeed been allowed to
sue but then only (1) in cases involving constitutional
issues and
(2) under certain conditions. Petitioners do not meet these
requirements on standing.
Taxpayers are allowed to sue, for example, where there is a
claim of illegal disbursement of public funds. (Pascual v.
Secretary of Public Works, 110 Phi. 331 (1960); Sanidad v.
Comelec, 73 SCRA 333 (1976); Bugnay Const. & Dev. v.
Laron, 176 SCRA 240 (1989); City Council of Cebu v.
Cuizon, 47 SCRA 325 [1972]) or where a tax measure is
assailed as unconstitutional. (VAT Cases [Tolentino v.
Secretary of Finance], 235 SCRA 630 [1994]) Voters are
allowed to question the validity of election laws because of
their obvious interest in the validity of such laws. (Gonzales v.
Comelec, 21 SCRA 774 [1967]) Concerned citizens can bring
suits if the constitutional question they raise is of
"transcendental importance" which must be settled early.
(Emergency Powers Cases [Araneta v. Dinglasan], 84 Phi. 368
(1949); Iloilo Palay and Corn Planters Ass'n v. Feliciano, 121
Phi. 358 (1965); Philconsa v. Gimenez, 122 Phi. 894 (1965);
CLU v. Executive Secretary, 194 SCRA 317
[1991])Legislators are allowed to sue to question the validity
of any official action which they claim infringes their
prerogatives qua legislators. (Philconsa v. Enriquez, 235 506
(1994); Guingona v. PCGG, 207 SCRA 659 (1992); Gonzales
v. Macaraig, 191 SCRA 452 (1990); Tolentino v. Comelec, 41
SCRA 702 (1971); Tatad v. Garcia, G.R. No. 114222, April
16, 1995 (Mendoza, J., concurring))
Petitioners do not have the same kind of interest that these
various litigants have. Petitioners assert an interest as
taxpayers, but they do not meet the standing requirement for
bringing taxpayer's suits as set forth in Dumlao v. Comelec, 95
SCRA 392, 403 (1980), to wit:
While, concededly, the elections to be held involve the
expenditure of public moneys, nowhere in their Petition do
said petitioners allege that their tax money is "being extracted
and spent in violation of specific constitutional protections
against abuses of legislative power" (Flast v. Cohen, 392 U.S.,
83 [1960]), or that there is a misapplication of such funds by
respondent COMELEC (see Pascual vs. Secretary of Public
Works, 110 Phil. 331 [1960]), or that public money is being
deflected to any improper purpose. Neither do petitioners seek
to restrain respondent from wasting public funds through the
enforcement of an invalid or unconstitutional law. (Philippine
Constitution Association vs. Mathay, 18 SCRA 300
[1966]), citing Philippine Constitution Association vs.
Gimenez, 15 SCRA 479 [1965]). Besides, the institution of a
taxpayer's suit, per se, is no assurance of judicial review. As
held by this Court in Tan vs. Macapagal (43 SCRA 677
[1972]), speaking through our present Chief Justice, this Court
is vested with discretion as to whether or not a taxpayer's suit
should be entertained. (Emphasis added)
Petitioners' suit does not fall under any of these categories of
taxpayers' suits.
Neither do the other cases cited by petitioners support their
contention that taxpayers have standing to question
government contracts regardless of whether public funds are
involved or not. In Gonzales v. National Housing, Corp., 94
SCRA 786 (1979), petitioner filed a taxpayer's suit seeking the
annulment of a contract between the NHC and a foreign
corporation. The case was dismissed by the trial court. The
dismissal was affirmed by this Court on the grounds of res
judicata and pendency of a prejudicial question, thus avoiding
the question of petitioner's standing.
On the other hand, in Gonzales v. Raquiza, 180 SCRA 254
(1989), petitioner sought the annulment of a contract made by
the government with a foreign corporation for the purchase of
road construction equipment. The question of standing was not
discussed, but even if it was, petitioner's standing could be
sustained because he was a minority stockholder of the
Philippine National Bank, which was one of the defendants in
the case.
In the other case cited by petitioners, City Council of Cebu
v. Cuizon, 47 SCRA 325 (1972), members of the city council
were allowed to sue to question the validity of a contract
entered into by the city government for the purchase of road
construction equipment because their contention was that the
contract had been made without their authority. In addition, as
taxpayers they had an interest in seeing to it that public funds
were spent pursuant to an appropriation made by law.
But, in the case at bar, there is an allegation that public funds
are being misapplied or misappropriated. The controlling
doctrine is that of Gonzales v. Marcos, 65 SCRA 624 (1975)
where it was held that funds raised from contributions for the
benefit of the Cultural Center of the Philippines were not
public funds and petitioner had no standing to bring a
taxpayer's suit to question their disbursement by the President
of the Philippines.
Thus, petitioners' right to sue as taxpayers cannot be
sustained. Nor as concerned citizens can they bring this suit
because no specific injury suffered by them is alleged. As for
the petitioners, who are members of Congress, their right to
sue as legislators cannot be invoked because they do not
complain of any infringement of their rights as legislators.
Finally, in Valmonte v. PCSO, G.R. No. 78716, September 22,
1987, we threw out a petition questioning another form of
lottery conducted by the PCSO on the ground that petitioner,
who claimed to be a "citizen, lawyer, taxpayer and father of
three minor children," had no direct and personal interest in
the lottery. We said: "He must be able to show, not only that
the law is invalid, but also that he has sustained or is in
immediate danger of sustaining some direct injury as a result
of its enforcement, and not merely that he suffers thereby in
some indefinite way. It must appear that the person
complaining 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 complained of." In the case at bar, petitioners have not
shown why, unlike petitioner in the Valmonte case, they
should be accorded standing to bring this suit.
The case of Oposa v. Factoran, Jr. 224 SCRA 792 (1993) is
different. Citizens' standing to bring a suit seeking the
cancellation of timber licenses was sustained in that case
because the Court considered Art. II, 16 a right-conferring
provision which can be enforced in the courts. That provision
states:
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. (Emphasis)
In contrast, the policies and principles invoked by petitioners
in this case do not permit of such categorization.
Indeed, as already stated, petitioners' opposition is not really
to the validity of the ELA but to lotteries which they regard to
be immoral. This is not, however, a legal issue, but a policy
matter for Congress to decide and Congress has permitted
lotteries for charity.
Nevertheless, although we have concluded that petitioners do
not have standing, we have not stopped there and dismissed
their case. For in the view we take, whether a party has a cause
of action and, therefore, is a real party in interest or one with
standing to raise a constitutional question must turn on
whether he has a right which has been violated. For this reason
the Court has not ducked the substantive issues raised by
petitioners.
II. R.A. No. 1169, as amended by B.P No . 42, states:
1. The Philippine Charity Sweepstakes Office. The
Philippine Charity Sweepstakes Office, hereinafter designated
the Office, shall be the principal government agency for
raising and providing for funds for health programs, medical
assistance and services and charities of national character, and
as such shall have the general powers conferred in section
thirteen of Act Numbered One Thousand Four Hundred Fifty-
Nine, as amended, and shall have the authority:
A. To hold and conduct charity sweepstakes races, lotteries
and other similar activities, in such frequency and manner, as
shall be determined, and subject to such rules and regulations
as shall be promulgated by the Board of Directors.
B. Subject to the approval of the Minister of Human
Settlements, to engage in health and welfare-related
investments, programs, projects and activities which may be
profit-oriented, by itself or in collaboration, association or
joint venture with any person, association, company or entity,
whether domestic or foreign, except for the activities
mentioned in the preceding paragraph (A), for the purpose of
providing for permanent and continuing sources of funds for
health programs, including the expansion of existing ones,
medical assistance and services, and/or charitable
grants:Provided, That such investments will not compete with
the private sector in areas where investments are adequate as
may be determined by the National Economic and
Development Authority.
Petitioners insist on the ruling in the previous case that the
PCSO cannot hold and conduct charity sweepstakes, lotteries
and other similar activities in collaboration, association or
joint venture with any other party because of the clause
"except for the activities mentioned in the preceding paragraph
(A)" in paragraph (B) of 1. Petitioners contend that the ruling
is the law of this case because the parties are the same and the
case involves the same issue, i.e., the meaning of this statutory
provision.
The "law of the case" doctrine is inapplicable, because this
case is not a continuation of the first one. Petitioners also say
that inquiry into the same question as to the meaning of the
statutory provision is barred by the doctrine of res judicata.
The general rule on the "conclusiveness of judgment,"
however, is subject to the exception that a question may be
reopened if it is a legal question and the two actions involve
substantially different claims. This is generally accepted in
American law from which our Rules of Court was adopted.
(Montana v. United States, 440 U.S. 59 L.Ed.2d 147, 210
(1979); RESTATEMENT OF THE LAW 2d, ON
JUDGMENTS, 28; P. BATOR, D. MELTZER, P. MISHKIN
AND D. SHAPIRO, THE FEDERAL COURTS AND THE
FEDERAL SYSTEM 1058, n.2 [3rd Ed., 1988]) There is
nothing in the record of this case to suggest that this exception
is inapplicable in this jurisdiction.
Indeed, the questions raised in this case are legal questions and
the claims involved are substantially different from those
involved in the prior case between the parties. As already
stated, the ELA is substantially different from the Contract of
Lease declared void in the first case.
Borrowing from the dissenting opinion of Justice Feliciano,
petitioners argue that the phrase "by itself or in collaboration,
association or joint venture with any other party" qualifies not
only 1 (B) but also 1 (A), because the exception clause
("except for the activities mentioned in the preceding
paragraph [A]") "operates, as it were, as a renvoi clause which
refers back to Section 1(A) and in this manner avoids the
necessity of simultaneously amending the text of Section
1(A)."
This interpretation, however, fails to take into account not
only the location of the phrase in paragraph (B), when it
should be in paragraph (A) had that been the intention of the
lawmaking authority, but also the phrase "by itself." In other
words, under paragraph (B), the PCSO is prohibited from
"engag[ing] in . . . investments, programs, projects and
activities" if these involve sweepstakes races, lotteries and
other similar activities not only "in collaboration, association
or joint venture" with any other party but also "by itself."
Obviously, this prohibition cannot apply when the PCSO
conducts these activities itself. Otherwise, what paragraph (A)
authorizes the PCSO to do, paragraph (B) would prohibit.
The fact is that the phrase in question does not qualify the
authority of the PCSO under paragraph (A), but rather the
authority granted to it by paragraph (B). The amendment of
paragraph (B) by B.P. Blg. 42 was intended to enable the
PCSO to engage in certain investments, programs, projects
and activities for the purpose of raising funds for health
programs and charity. That is why the law provides that such
investments by the PCSO should "not compete with the
private sector in areas where investments are adequate as may
be determined by the National Economic and Development
Authority." Justice Davide, then an Assemblyman, made a
proposal which was accepted, reflecting the understanding that
the bill they were discussing concerned the authority of the
PCSO to invest in the business of others. The following
excerpt from the Record of the Batasan Pambansa shows this
to be the subject of the discussion:
MR. DAVIDE. May I introduce an amendment after
"adequate". The intention of the amendment is not to leave the
determination of whether it is adequate or not to anybody. And
my amendment is to add after "adequate" the words AS MAY
BE DETERMINED BY THE NATIONAL ECONOMIC
AND DEVELOPMENT AUTHORITY. As a mater of fact, it
will strengthen the authority to invest in these areas, provided
that the determination of whether the private sector's activity is
already adequate must be determined by the National
Economic and Development Authority.
Mr. ZAMORA. Mr. Speaker, the committee accepts the
proposed amendment.
MR. DAVIDE. Thank you, Mr. Speaker.
(2 RECORD OF THE BATASAN PAMBANSA, Sept. 6,
1979,
p. 1007)
Thus what the PCSO is prohibited from doing is from
investing in a business engaged in sweepstakes races, lotteries
and other similar activities. It is prohibited from doing so
whether "in collaboration, association or joint venture" with
others or "by itself." This seems to be the only possible
interpretation of 1 (A) and (B) in light of its text and its
legislative history. That there is today no other entity engaged
in sweepstakes races, lotteries and the like does not detract
from the validity of this interpretation.
III. The Court noted in its decision that the provisions of the
first contract, which were considered to be features of a joint
venture agreement, had been removed in the new contract. For
instance, 5 of the ELA provides that in the operation of the
on-line lottery, the PCSO must employ "its own competent
and qualified personnel." Petitioners claim, however, that the
"contemporaneous interpretation" of PGMC officials of this
provision is otherwise. They cite the testimony of Glen
Barroga of the PGMC before a Senate committee to the effect
that under the ELA the PGMC would be operating the lottery
system "side by side" with PCSO personnel as part of the
transfer of technology.
Whether the transfer of technology would result in a violation
of PCSO's franchise should be determined by facts and not by
what some officials of the PGMC state by way of opinion. In
the absence of proof to the contrary, it must be presumed that
5 reflects the true intention of the parties. Thus, Art. 1370 of
the Civil Code says that "If the terms of a contract are clear
and leave no doubt upon the intention of the contracting
parties, the literal meaning of its stipulations shall control."
The intention of the parties must be ascertained from their
"contemporaneous and subsequent acts." (Art. 1371; Atlantic
Gulf Co. v. Insular Government, 10 Phil. 166 [1908]) It cannot
simply be judged from what one of them says. On the other
hand, the claim of third parties, like petitioners, that the clause
on upgrading of equipment would enable the parties after a
while to change the contract and enter into something else in
violation of the law is mere speculation and cannot be a basis
for judging the validity of the contract.
IV. It is contended that 1 of E.O. No. 301 covers all types of
"contract[s] for public services or for furnishing of supplies,
materials and equipment to the government or to any of its
branches, agencies or instrumentalities" and not only contracts
of purchase and sale. Consequently, a lease of equipment, like
the ELA, must be submitted to public bidding in order to be
valid. This contention is based on two premises: (1) that 1 of
E.O. No. 301 applies to any contract whereby the government
acquires title to or the use of the equipment and (2) that the
words "supplies," "materials," and "equipment" are distinct
from each other so that when an exception in 1 speaks of
"supplies," it cannot be construed to mean "equipment."
Petitioners' contention will not bear analysis. For example, the
term "supplies" is used in paragraph (a), which provides that a
contract for the furnishing of "supplies" in order to meet an
emergency is exempt from public bidding. Unless "supplies"
is construed to include "equipment," however, the lease of
heavy equipment needed for rescue operations in case of a
calamity will have to be submitted to public bidding before it
can be entered into by the government.
In dissent Justice Feliciano says that in such a situation the
government can simply resort to expropriation, paying
compensation afterward. This is just like purchasing the
equipment through negotiation when the question is whether
the purchase should be by public bidding, not to mention the
fact that the power to expropriate may not be exercised when
the government can very well negotiate with private owners.
Indeed, there are fundamental difficulties in simultaneously
contending (1) that E.O. No. 301, 1 covers both contracts of
sale and lease agreements and (2) that the words "supplies,"
"materials" and "equipment" can not be interchanged. Thus,
under paragraph (b) of 1, public bidding is not required
"whenever the supplies are to be used in connection with a
project or activity which cannot be delayed without causing
detriment to the public service." Following petitioners' theory,
there should be a public bidding before the government can
enter into a contract for the lease of bulldozers and dredging
equipment even if these are urgently needed in areas ravaged
by lahar because, first, lease contracts are covered by the
general rule and, second, the exception to public bidding in
paragraph (b) covers only "supplies" but not equipment.
To take still another example. Paragraph (d), which does away
with the requirement of public bidding "whenever the supplies
under procurement have been unsuccessfully placed on bid for
at least two consecutive times, either due to lack of bidders or
the offers received in each instance were exorbitant or
nonconforming to specifications." Again, following the theory
of the petitioners, a contract for the lease of equipment cannot
be entered into even if there are no bids because, first, lease
contracts are governed by the general rule on public bidding
and, second, the exception to public bidding in paragraph (d)
applies only to contracts for the furnishing of "supplies."
Other examples can be given to show the absurdity of
interpreting 1 as applicable to any contract for the furnishing
of supplies, materials and equipment and of considering the
words "supplies," "materials" and "equipment" to be not
interchangeable. Our ruling that 1 of E.O. No. 301 does not
cover the lease of equipment avoids these fundamental
difficulties and is supported by the text of 1, which is entitled
"Guidelines forNegotiated Contracts" and by the fact that the
only provisions of E.O. No. 301 on leases, namely, 6 and 7,
concern the lease of buildings by or to the government. Thus
the text of 1 reads:
1. Guidelines for Negotiated Contracts. Any provision of
law, decree, executive order or other issuances to the contrary
notwithstanding, no contract for public services or for
furnishing supplies, materials and equipment to the
government or any of its branches, agencies or
instrumentalities shall be renewed or entered into without
public bidding, except under any of the following situations:
a. Whenever the supplies are urgently needed to meet an
emergency which may involve the loss of, or danger to, life
and/or property;
b. Whenever the supplies are to be used in connection with a
project or activity which cannot be delayed without causing
detriment to the public service;
c. Whenever the materials are sold by an exclusive distributor
or manufacturer who does not have subdealers selling at lower
prices and for which no suitable substitute can be obtained
elsewhere at more advantageous terms to the government;
d. Whenever the supplies under procurement have been
unsuccessfully placed on bid for at least two consecutive
times, either due to lack of bidders or the offers received in
each instance were exhorbitant or non-conforming to
specifications;
e. In cases where it is apparent that the requisition of the
needed supplies through negotiated purchase is most
advantageous to the government to be determined by the
Department Head concerned; and
f. Whenever the purchase is made from an agency of the
government.
Indeed, the purpose for promulgating E.O. No. 301 was
merely to decentralize the system of reviewingnegotiated
contracts of purchase for the furnishing of supplies, materials
and equipment as well as lease contracts of buildings.
Theretofore, E.O. No. 298, promulgated on August 12, 1940,
required consultation with the Secretary of Justice and the
Department Head concerned and the approval of the President
of the Philippines before contracts for the furnishing of
supplies, materials and equipment could be made on a
negotiated basis, without public bidding. E.O. No. 301
changed this by providing as follows:
2. Jurisdiction over Negotiated Contracts. In line with the
principles of decentralization and accountability, negotiated
contracts for public services or for furnishing supplies,
materials or equipment may be entered into by the department
or agency head or the governing board of the government-
owned or controlled corporation concerned, without need of
prior approval by higher authorities, subject to availability of
funds, compliance with the standards or guidelines prescribed
in Section 1 hereof, and to the audit jurisdiction of the
commission on Audit in accordance with existing rules and
regulations.
Negotiated contracts involving P2,000,000 up to P10,000,000
shall be signed by the Secretary and two other
Undersecretaries.
xxx xxx xxx
7. Jurisdiction Over Lease Contracts. The heads of agency
intending to rent privately-owned buildings or spaces for their
use, or to lease out government-owned buildings or spaces for
private use, shall have authority to determine the
reasonableness of the terms of the lease and the rental rates
thereof, and to enter into such lease contracts without need of
prior approval by higher authorities, subject to compliance
with the uniform standards or guidelines established pursuant
to Section 6 hereof by the DPWH and to the audit jurisdiction
of COA or its duly authorized representative in accordance
with existing rules and regulations.
In sum, E.O. No. 301 applies only to contracts for the
purchase of supplies, materials and equipment, and it was
merely to change the system of administrative review of
emergency purchases, as theretofore prescribed by E.O. No.
298, that E.O. No. 301 was issued on July 26, 1987. Part B of
this Executive Order applies to leases of buildings, not of
equipment, and therefore does not govern the lease contract in
this case. Even if it applies, it does not require public bidding
for entering into it.
Our holding that E.O. No. 301, 1 applies only to contracts of
purchase and sale is conformable to P.D. No. 526,
promulgated on August 2, 1974, which is in pari materia. P.D.
No. 526 requires local governments to hold public bidding in
the "procurement of supplies." By specifying "procurement of
supplies" and excepting from the general
rule "purchases" when made under certain circumstances,
P.D. No. 526, 12 indicates quite clearly that it applies only to
contracts of purchase and sale. This provision reads:
12. Procurement without public bidding. Procurement of
supplies may be made without the benefit of public bidding in
the following modes:
(1) Personal canvass of responsible merchants;
(2) Emergency purchases;
(3) Direct purchases from manufacturers or exclusive
distributors;
(4) Thru the Bureau of Supply Coordination; and
(5) Purchase from other government entities or foreign
governments.
Sec. 3 broadly defines the term "supplies" as including
everything except real estate, which may be needed in the
transaction of public business, or in the pursuit of any
undertaking, project, or activity, whether of the nature of
equipment, furniture, stationery, materials for construction, or
personal property of any sort, including non-personal or
contractual services such as the repair and maintenance of
equipment and furniture, as well as trucking, hauling,
janitorial, security, and related or analogous services.
Thus, the texts of both E.O. No. 301, 1 and of P.D. No. 526,
1 and 12, make it clear that only contracts for the purchase
and sale of supplies, materials and equipment are
contemplated by the rule concerning public biddings.
Finally, it is contended that equipment leases are attractive and
commonly used in place of contracts of purchase and sale
because of "multifarious credit and tax constraints" and
therefore could not have been left out from the requirement of
public bidding. Obviously these credit and tax constraints can
have no attraction to the government when considering the
advantages of sale over lease of equipment. The fact that lease
contracts are in common use is not a reason for implying that
the rule on public bidding applies not only to government
purchases but also to lease contracts. For the fact also is that
the government leases equipment, such as copying machines,
personal computers and the like, without going through public
bidding.
FOR THE FOREGOING REASONS, the motion for
reconsideration of petitioners is DENIED with finality.