Records show that on March 20, 1980, private respondent PLDT

filed an application with the NTC for the approval of a revised

schedule for its Subscriber Investment Plan (SIP), docketed as Case
No. 82-27.

3
Republic of the Philippines
SUPREME COURT
Manila

On April 14, 1982, the NTC issued an ex-parte order provisionally

approving the revised schedule which, however, was set aside by
this Court on August 31, 1982 in the case of "Samuel Bautista vs.
NTC, et al.," 116 SCRA 411. The Court therein ruled that "there was
necessity of a hearing by the Commission before it should have
acted on the application of the PLDT so that the public could air its
opposition, particularly the herein petitioner and the Solicitor
General, representing the government. They should be given the
opportunity to substantiate their objection that the rates under the
subscriber investment plan are excessive and unreasonable and, as
a consequence, the low income and middle class group cannot
afford to have telephone connections; and, that there is no need to
increase the rate because the applicant is financially sound."

EN BANC
G.R. No. L-63318 November 25, 1983
PHILIPPINE CONSUMERS FOUNDATION, INC., petitioner,
vs.
NATIONAL TELECOMMUNICATIONS COMMISSION AND
PHILIPPINE LONG DISTANCE TELEPHONE
COMPANY, respondents.
Tomas C. Llamas for petitioner.

On November 22, 1982, the NTC rendered the questioned decision

permanently approving PLDT's new and increased SIP rates, the
dispositive portion of which reads: t.hqw

The Solicitor General for respondent NTC.

Graciano C. Regala and Eliseo B. Alampay for respondent PLDT.

IN VIEW OF ALL THE FOREGOING, this

Commission finds that applicant's reduced proposals
for its revised Subscriber Investment Plan Schedule,
upon further reductions herein ordered with respect
to subscriber investments for new installations of
single residential telephones in the Metro Manila and
Provincial Service Areas, are all within the 50%-ofcost limit provided in P.D. 217; that they are just and
reasonable and in consonance with the public
policies declared in said decree; and that it is in the
public interest that applicant's revised SIP Schedule
be, as it is hereby APPROVED, as follows:

RELOVA, J.:+.wph!1
Petition for certiorari seeking to set aside and annul the decision,
dated November 22, 1982, of public respondent National
Telecommunications Commission (NTC, for short), approving the
application of the Philippine Long Distance Telephone Company
(PLDT, for short) of its revised schedule for its Subscriber Investment
Plan (SIP) for the entire service area, including the ex-RETELCO
area; as well as the order of January 14, 1983 which denied the
motion for reconsideration of petitioner Philippine Consumers
Foundation, Inc. (PCFI, for short).

REVISED SIP SCHEDULE

Party line 600 500

Service Category Revised SIP Rates

3. Residential Phone:

Metro Manila Provincial t.hqw

Single line 600 500

1. New Installations

Party line 500 300

1. PBX/PABX Trunk P 5,000 P3,000

4. Leased Line 800 800

2. Business Phone:

Revised SIP Rates

Single line 3,500 2,000

Metro Manila Provincial

Party line 2,000 1,600

5. Tie trunk or tie line P800 P800

3. Residential Phone:

6. Outside Local 800 800

Single line 1,800 1,300

(pp. 34-35, Rollo)

Party line 900 800

Petitioner filed a motion for reconsideration of the above judgment on

December 14, 1982, and after a month, or on January 14, 1983,
NTC denied said motion for reconsideration.

4. Leased Line 2,500 2,500

It is the submission of petitioner that the SIP schedule presented by

the PLDT is pre-mature and, therefore, illegal and baseless, because
the NTC has not yet promulgated the required rules and regulations
implementing Section 2 of Presidential Decree No. 217 which
provides: t.hqw

5. Tie trunk or tie line 2,500 2,500

6. Outside local 2,500 2,500
II. Transfers

Section 2. The Department of Public Works,

Transportation
and Communications through
its Board of Communications and/or appropriate
agency shall see to it that the herein declared
policies for the telephone industry are immediately
implemented and for this purpose pertinent rules

1. PBX/PABX 1,500 1,200

2. Business Phone:
Single line 800 600

and regulations may be promulgated ... (Emphasis

supplied).

respondent may or may not promulgate the rules in the immediate

implementation of said decree as the word used there is "may."

Petitioner avers that the "substitute procedural vehicle utilized by

NTC in allowing the establishment of SIP by PLDT was by treating
the appropriate Petition of PLDT as if the same were a rate
case over which the Rules of Practice was applicable. NTC
proceeded to invoke the summary powers provided for in the Rules
of Practice to fully bear on the hapless consumer, notably the
repressive 'Provisional Reliefs;' (pp. 5-6, Rollo) that at the hearings
thereof, "NTC limited the numerous oppositors in the instant
Application, among them PCFI, by applying the two oppositor-rule.
This means that only two of the oppositors will be heard in
representation of all the oppositors, again pursuant to the procedure
laid down in the Rules of Practice." (p. 130, rollo) Further, the NTC
invoked its extraordinary powers pursuant to Section 3 of Rule 15 of
the Rules of Practice, "whereby even without an iota or proof to
substantiate its application, NTC allowed the desired increase
purportedly on a provisional basis. " (p. 129, rollo)

We are not persuaded.

Presidential Decree No. 217 was promulgated on June 16, 1973 and
paragraph 4 of Section 1 thereof provides: t.hqw
4. In line with the objective of spreading ownership
among a wide base of the people, the concept of
telephone subscriber self-financing is hereby
adopted whereby a telephone subscriber finances
part of the capital investments in telephone
installations through the purchase of stocks, whether
common or preferred stock, of the telephone
company. (Emphasis supplied)
There is merit in the contention of petitioner that it is the duty of
respondent NTC to promulgate rules and regulations because: t.
hqw

The question is whether or not respondent acted with grave abuse of

discretion when it approved the Revised Subscriber Investment Plan
(SIP) of respondent PLDT in the absence of specific rules and
regulations implementing Presidential Decree No. 217. Petitioner
claims that these implementing rules and regulations are mandatory
pre-requisite for the approval of said SIP rates.

1. P.D. 217 deals with matters so alien, innovative

and untested such that existing substantive and
procedural laws would not be applicable. Thus, the
Subscriber Investment Plan (SIP) was so set up
precisely to ensure the financial viability of public
telecommunications companies which in turn
assures the enjoyment of the population at minimum
cost the benefits of a telephone facility.

Respondent NTC admits the absence of rules and regulations

referred to in PD 217. However, it contends that nowhere in said
decree is there any legal provision making the promulgation of rules
a mandatory pre-requisite to the establishment of SIP and the
determination of its schedules; that since respondent NTC is
enjoined to implement the declared policies of the decree, for its
immediate implementation, it may rely on existing Rules of Practice;
that under the same Rules of Practice all existing subscriber
investment plans were presented, considered and approved by the
NTC; that the promulgation of the rules is inherently an internal and
administrative matter and therefore, is not a proper subject of
litigation, much less a duty of the NTC to accomplish; and, that public

The SIP has never been contemplated prior to P.D.

217.
The existing law on the other hand, the Public
Service Act, diametrically runs counter to the spirit
and intention, if not the purpose of P.D. 217. It may
even be gainsaid that as long as the optimum
number of individuals may enjoy telephone service,
there is no limitation on the profitability of such

companies. Hence, while P.D. 217 encourages the

profitability of public telecommunication companies,
the Public Service Act limits the same.

which, among others, are: (1) the attainment of efficient telephone

service for as wide an area as possible at the lowest reasonable
costs to the subscriber; (2) the capital requirements of telephone
utilities obtained from ownership funds shall be raised from a broad
base of investors, involving as large a number of individual investors
as may be possible; and (3) in any subscriber self-financing plan, the
amount of subscriber self-financing will, in no case, exceed fifty per
centum (50%) of the cost of the installed telephone line, as may be
determined from time to time by the regulatory bodies of the State.

2. In the absence of such rules and regulations,

there is outright confusion among the rights of PLDT,
the consumers and the government itself. As may
clearly be seen, how can the Decision be said to
have assured that most of the population will enjoy
telephone facilities? Did the Decision likewise assure
the financial viability of PLDT? Was the
government's duty to provide telephone service to its
constituents subserved by the Decision? These
questions can never be answered unless such rules
and regulations are set up.

The load on the back of our people is heavy enough. Let us not
increase its weight further. Noteworthy is the concurrence of Justice
Vicente Abad Santos in the case of Bautista vs. NTC (supra) that
"the PLDT which is reported to have made over 100 million pesos in
profits in just six months but with its service so poor that even the
First Lady has taken notice should think of improved service before
increased profits."

3. Finally, it should be emphasized that NTC is

estopped from claiming that there is no need to
promulgate such rules and regulations. In the case
of PCFI vs. NTC, G.R. No. 61892, now pending
resolution before this Honorable Tribunal, NTC
totally refused to act on a petition filed by PLDT
precisely for the promulgation of such rules and
regulations.

Indeed, let t us not aggravate the situation of the populace by raising

the revised SIP schedule plan of the PLDT. A rate increase would be
an additional burden on the telephone subscribers. The plan to
expand the company program and/or improve its service is laudable,
but the expenses should not be shouldered by the telephone
subscribers. Considering the multi-million profits of the company, the
cost of expansion and/or improvement should come from part of its
huge profits.

Why then did NTC refuse to act on such petition if

and when there is no need for the promulgation of
such rules and regulations? After all NTC could have
simply ruled that the petition in G.R. No. 61892 is
unnecessary because such rules and regulations
are also unnecessary. (pp. 135-136, Rollo)

Anent the question that petitioner should have appealed the decision
of respondent NTC, instead of filing the instant petition, suffice it to
say that certiorari is available despite existence of the remedy of
appeal where public welfare and the advancement of public policy so
dictate, or the orders complained of were issued in excess of or
without jurisdiction (Jose vs. Zulueta, 2 SCRA 574).

At any rate, there is no justification for the rate increase of the

revised schedule of PLDT's Subscriber Investment Plan. It is to say
the least, untimely, considering the present economic condition
obtaining in the country. The approved rate defeats the purpose of
the decree which is to spread ownership among the wide base of
investors. The State, in Presidential Decree No. 217 promulgated on
June 16, 1973, adopted the basic policies of the telephone industry,

ACCORDINGLY, the DECISION of the public respondent National

Telecommunications Commission, dated November 22, 1982, and
the ORDER dated January 14, 1983. are hereby ANNULLED and
SET ASIDE.

SO ORDERED.1wph1.t

Phil. Consumer Foundation vs. National Telecommunication

Commission and PLDT
Facts:
On March 20, 1980, PLDT filed an application with NTC for the approval of a
Revised Schedule for its subscribers Investment Plan (SIP). Consequently, NTC
issued an ex-parte order which provisionally approved the application. However,
the approval was set aside on the Supreme Court &ruled that "there was necessity
of a hearing by the commission before it should have acted on the application of
the PLDT so that public could air it's opposition" .On Nov. 22, 1982, NTC
permanently approved the new SIP rates, in contemplation of PD 217 that allows
NTC "to see to it that the therein declared policies for the telephone industry are
immediately implemented & for this purpose pertinent rules & regulations may be
promulgated
Issue:
Whether or not the respondents acted with grave abuse of discretion when it
approved the Revised SIP of PLDT in the absence of specific rules and regulation
implementing PD217 which is mandatory pre-requisite for the approval of said SIP
rates.
Ruling/Held:
Yes. Accordingly the decision of NTC was annulled & set aside. It is the duty of the
respondent NTC to promulgate rules and regulation. There is an outright confusion
among the rights of PLDT, the consumers and government itself. The increase of
SIP rates is untimely, considering the economic condition of the country. The
approved rates defeats the purpose of the decree which is to spread ownership
among the wide base of investors.