Espina v. Zamora, G.R. No.

143855, Sept 21, 2010

Facts
 This case determines the constitutionality of the Retail Trade Liberalization Act of 2000 (RA 8762).
o This act repeals RA 1180-- which absolutely prohibits foreign nationals from engaging in the
retail trade business.
o RA 8762 allows foreigners to own retail trade business under four categories.
o Also allows natural-born Filipino citizens, who had lost their citizenship and now reside in
the Philippines, to engage in the same business with the same rights as Filipino citizens.
 On Oct 11, 2000 petitioners filed this petition assailing the constitutionality of the law.

Petitioner/Respondent's Contention
 Petitioners aver that:
o The law runs afoul of Sections 9, 19, and 20 of Article II of the Constitution. As well as
Sections 10, 12, and 13 of Article XII of the Constitution.
 Which enjoins the State to place the national economy under the control of Filipinos
to achieve equal distribution of opportunities, promote industrialization and full
employment, and protect Filipino enterprise against unfair competition and trade
policies.
o The implementation of the law would lead to alien control of the retail trade
o Foreign retailers like Walmart and K-Mart would crush Filipino retailers and sari-sari store
vendors, destroy self-employment, and bring about more unemployment.
o The WB-IMF had improperly imposed the passage of RA 8762 on the government as a
condition for the release of certain loans.
o There is a clear and present danger that the law would promote monopolies or
combinations in restraint of trade
 Respondents aver that:
o Petitioners have no legal standing to file the petition. They cannot invoke the fact that they
are taxpayers or members of Congress.
o The petition does not involve any justiciable controversy; neither does it allege that the
subject law violates the rights of vendors the members of Congress represents
o Petitioners have failed to overcome the presumption of constitutionality of the law. And
Sections 9, 19, and 20 of Article of the Constitution are not self-executing provisions.
o The constitution mandates the regulation but not the prohibition of foreign investments.
 It only directs Congress to reserve to Filipino citizens certain areas of investments, but
it does not prohibit Congress from enacting laws allowing the entry of foreigners into
certain industries not reserved by the Constitution to Filipinos.
Lower Courts
 None.
Issue
1. Whether or not petitioner lawmakers have the legal standing to challenge the constitutionality of
RA 8762
2. Whether or not RA 8762 is unconstitutional
Ruling
1. They don't have standing, but the Court will still resolve the question raised.
a. There is no showing that the law prejudices petitioners or inflicts damage on them. Still the
Court will address the issue since the rule on standing can be relaxed for nontraditional
 plaintiffs in cases when public interest so requires or the matter is of transcendental
importance.
2. Law is constitutional.
a. The provisions of Article II of the Constitution are not self-executing. Legislative failure to
pursue such policies cannot give rise to a cause of action in courts (Tanada v. Angara).
b. While Section 19, Article II of the Constitution require the development of a self-reliant and
independent national economy effectively controlled by Filipino entrepreneurs, it does not
impose a policy of Filipino monopoly of the economic environment.
i. While the Constitution mandates a bias in favor of Filipinos goods, services, labor and
enterprises, it also 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.
ii. In other words, the Constitution does not rule out the entry of foreign investment,
goods, and services. While it does not encourage their unlimited entry into the
country, it does not prohibit them either.
c. Section 10, Article XII of the Constitution gives Congress the discretion to reserve to
Filipinos certain areas of investments upon the recommendation of NEDA and when the
national interest requires.
i. Which means Congress can determine what policy to pass and when to pass it
depending on the economic exigencies.
ii. The control and regulation of trade in the interest of the public welfare is of course an
exercise of the police power of the State.
iii. In 1954, Congress enacted RA 1180, restricting the retail trade business to
Filipino citizens. In denying the petition assailing it validity for violation of the
foreigner’s right to substantive due process of law, the Supreme Court held that
the law constituted a valid exercise of police power. The State had an interest in
preventing alien control of the retail trade and RA 1180 was reasonably related
to that purpose.
d. Here to the extent that RA 8762 only lessens the restraint on the foreigners' right to
property or to engage in business, but it does not amount to a denial of the Filipinos' right
to property and due process of law.
e. The Court is also not convinced that the law would eventually lead to alien control of the
retail trade business. The law itself provides strict safeguards on foreign participation:
i. Aliens can only engage in retail trade business subject to the categories enumerated
ii. Only nationals from countries which allow the entry of Filipino retailers shall be
allowed to engage in retail trade business
iii. Qualified foreign retailers shall not be allowed to engage in certain retailing activities
outside their accredited stores.