"#"$%& '() * $+,-./0 '.

12 345 67 89:; <76=

>6? @4/12.292.4/ A "B4:92.4/ 43 2C+ @4/12.292.4/,: D54B.1.4/


"#$% &'()*+*,*+'( - ./*+012 34445 620*+'( " "#7$ &'()*+*,*+'( - ./*+012 3485 620*+'() 9 :(; #

"#97 &'()*+*,*+'( - ./*+012 3445 620*+'( <

($EF@'" GFFF
@H#I"$J(EFH# (#K LEF'FM(EFH# HN #(EL$('
$"IHL$@"I
I+O2.4/ 6P .11 :=/+0,1*,/:1 *+>?2/5 :(; >+(2/:1 1:(;) '@
*A2 B,?1+0 ;'>:+(5 C:*2/)5 >+(2/:1)5 0':15 B2*/'12,>5
:(; '*A2/ >+(2/:1 '+1)5 :11 @'/02) '@ B'*2(*+:1 2(2/=D
:(; '*A2/ (:*,/:1 /2)',/02) '@ *A2 EA+1+BB+(2) ?21'(= *'
*A2 6*:*25 :(; *A2+/ ;+)B')+*+'(5 2FB1'+*:*+'(5
;2G21'B>2(*5 '/ ,*+1+H:*+'( )A:11 ?2 1+>+*2; *' 0+*+H2()
'@ *A2 EA+1+BB+(2) '/ *' 0'/B'/:*+'() '/ :))'0+:*+'() :*
12:)* )+F*D B2/ 02(*,> '@ *A2 0:B+*:1 '@ CA+0A +) 'C(2;
?D ),0A 0+*+H2()5 ),?I20* *' :(D 2F+)*+(= /+=A*5 =/:(*5
12:)25 '/ 0'(02))+'( :* *A2 *+>2 '@ *A2 +(:,=,/:*+'( '@
*A2 J'G2/(>2(* 2)*:?1+)A2; ,(;2/ *A+) &'()*+*,*+'(K
L:*,/:1 /2)',/02)5 C+*A *A2 2F02B*+'( '@ B,?1+0
:=/+0,1*,/:1 1:(;5 )A:11 ('* ?2 :1+2(:*2;5 :(; (' 1+02()25
0'(02))+'(5 '/ 12:)2 @'/ *A2 2FB1'+*:*+'(5 ;2G21'B>2(*5
'/ ,*+1+H:*+'( '@ :(D '@ *A2 (:*,/:1 /2)',/02) )A:11 ?2
=/:(*2; @'/ : B2/+'; 2F022;+(= *C2(*DM@+G2 D2:/)5
/2(2C:?12 @'/ :('*A2/ *C2(*DM@+G2 D2:/)5 2F02B* :) *'
C:*2/ /+=A*) @'/ +//+=:*+'(5 C:*2/ ),BB1D5 @+)A2/+2)5 '/
+(;,)*/+:1 ,)2) '*A2/ *A:( *A2 ;2G21'B>2(* '@ C:*2/
B'C2/5 +( CA+0A 0:)2) ?2(2@+0+:1 ,)2 >:D ?2 *A2
>2:),/2 :(; 1+>+* '@ *A2 =/:(*K

($EF@'" GFJ
EQ" #(EFH#(' "@H#HR& (#K EQ" S(E$FRH#&
HN EQ" #(EFH#
I+O2.4/ TP .11 1:(;) '@ B,?1+0 ;'>:+(5 C:*2/)5
>+(2/:1)5 0':15 B2*/'12,> :(; '*A2/ >+(2/:1 '+1)5 :11
@'/02) '@ B'*2(*+:1 2(2/=D5 @+)A2/+2)5 C+1;1+@25 :(;
'*A2/ (:*,/:1 /2)',/02) '@ *A2 EA+1+BB+(2) ?21'(= *'
*A2 6*:*2K N+*A *A2 2F02B*+'( '@ :=/+0,1*,/:15
+(;,)*/+:1 '/ 0'>>2/0+:15 /2)+;2(*+:15 '/
/2)2**12>2(* 1:(;) '@ *A2 B,?1+0 ;'>:+(5 (:*,/:1
/2)',/02) )A:11 ('* ?2 :1+2(:*2;5 :(; (' 1+02()25
0'(02))+'(5 '/ 12:)2 @'/ *A2 2FB1'/:*+'(5 '/
,*+1+H:*+'( '@ :(D '@ *A2 (:*,/:1 /2)',/02) )A:11 ?2
=/:(*2; @'/ : B2/+'; 2F022;+(= *C2(*DM@+G2 D2:/)5
2F02B* :) *' C:*2/ /+=A*) @'/ +//+=:*+'(5 C:*2/
),BB1D5 @+)A2/+2)5 '/ +(;,)*/+:1 ,)2) '*A2/ *A:(
;2G21'B>2(* '@ C:*2/ B'C2/5 +( CA+0A 0:)2)5
?2(2@+0+:1 ,)2 >:D ?D *A2 >2:),/2 :(; *A2 1+>+* '@
*A2 =/:(*K

I+O2.4/ UP OA2 ;+)B')+*+'(5 2FB1'/:*+'(5
;2G21'B>2(*5 2FB1'+*:*+'(5 '/ ,*+1+H:*+'( '@ :(D '@
*A2 (:*,/:1 /2)',/02) '@ *A2 EA+1+BB+(2) )A:11 ?2
1+>+*2; *' 0+*+H2() '@ *A2 EA+1+BB+(2)5 '/ *'
0'/B'/:*+'() '/ :))'0+:*+'() :* 12:)* )+F*D B2/
02(*,> '@ *A2 0:B+*:1 CA+0A +) 'C(2; ?D ),0A
0+*+H2()K OA2 L:*+'(:1 .))2>?1D5 +( *A2 (:*+'(:1
+(*2/2)*5 >:D :11'C ),0A 0+*+H2()5 0'/B'/:*+'() '/
:))'0+:*+'() *' 2(*2/ +(*' )2/G+02 0'(*/:0*) @'/
@+(:(0+:15 *20A(+0:15 >:(:=2>2(*5 '/ '*A2/ @'/>) '@
:))+)*:(02 C+*A :(D @'/2+=( B2/)'( '/ 2(*+*D @'/ *A2
2FB1'/:*+'(5 '/ ,*+1+H:*+'( '@ :(D '@ *A2 (:*,/:1
/2)',/02)K PF+)*+(= G:1+; :(; ?+(;+(= )2/G+02
0'(*/:0*) @'/ @+(:(0+:15 *20A(+0:15 >:(:=2>2(*5 '/
'*A2/ @'/>) '@ :))+)*:(02 :/2 A2/2?D /20'=(+H2; :)
),0AK
($EF@'" GFF
#(EFH#(' "@H#HR& (#K S(E$FRH#&
I+O2.4/ <P .11 1:(;) '@ *A2 B,?1+0 ;'>:+(5 C:*2/)5 >+(2/:1)5
0':15 B2*/'12,>5 :(; '*A2/ >+(2/:1 '+1)5 :11 @'/02) '@
B'*2(*+:1 2(2/=D5 @+)A2/+2)5 @'/2)*) '/ *+>?2/5 C+1;1+@25 @1'/:
:(; @:,(:5 :(; '*A2/ (:*,/:1 /2)',/02) :/2 'C(2; ?D *A2
6*:*2K N+*A *A2 2F02B*+'( '@ :=/+0,1*,/:1 1:(;)5 :11 '*A2/
(:*,/:1 /2)',/02) )A:11 ('* ?2 :1+2(:*2;K OA2 2FB1'/:*+'(5
;2G21'B>2(*5 :(; ,*+1+H:*+'( '@ (:*,/:1 /2)',/02) )A:11 ?2
,(;2/ *A2 @,11 0'(*/'1 :(; ),B2/G+)+'( '@ *A2 6*:*2K OA2
6*:*2 >:D ;+/20*1D ,(;2/*:Q2 ),0A :0*+G+*+2)5 '/ +* >:D
2(*2/ +(*' 0'MB/';,0*+'(5 I'+(* G2(*,/25 '/ B/';,0*+'(M
)A:/+(= :=/22>2(*) C+*A R+1+B+(' 0+*+H2()5 '/ 0'/B'/:*+'()
'/ :))'0+:*+'() :* 12:)* )+F*D !"# %"&'() '@ CA')2 0:B+*:1 +)
'C(2; ?D ),0A 0+*+H2()K 6,0A :=/22>2(*) >:D ?2 @'/ :
B2/+'; ('* 2F022;+(= *C2(*DM@+G2 D2:/)5 /2(2C:?12 @'/ ('*
>'/2 *A:( *C2(*DM@+G2 D2:/)5 :(; ,(;2/ ),0A *2/>) :(;
0'(;+*+'() :) >:D ?2 B/'G+;2; ?D 1:CK 4( 0:)2) '@ C:*2/
/+=A*) @'/ +//+=:*+'(5 C:*2/ ),BB1D @+)A2/+2)5 '/ +(;,)*/+:1
,)2) '*A2/ *A:( *A2 ;2G21'B>2(* '@ C:*2/ B'C2/5
?2(2@+0+:1 ,)2 >:D ?2 *A2 >2:),/2 :(; 1+>+* '@ *A2 =/:(*K
OA2 6*:*2 )A:11 B/'*20* *A2 (:*+'(S) >:/+(2 C2:1*A +( +*)
:/0A+B21:=+0 C:*2/)5 *2//+*'/+:1 )2:5 :(; 2F01,)+G2 20'('>+0
H'(25 :(; /2)2/G2 +*) ,)2 :(; 2(I'D>2(* 2F01,)+G21D *'
R+1+B+(' 0+*+H2()K

OA2 &'(=/2)) >:D5 ?D 1:C5 :11'C )>:11M)0:12 ,*+1+H:*+'( '@
(:*,/:1 /2)',/02) ?D R+1+B+(' 0+*+H2()5 :) C211 :)
0''B2/:*+G2 @+)A @:/>+(=5 C+*A B/+'/+*D *' ),?)+)*2(02
@+)A2/>2( :(; @+)AC'/Q2/) +( /+G2/)5 1:Q2)5 ?:D)5 :(;
1:=''()K

OA2 E/2)+;2(* >:D 2(*2/ +(*' :=/22>2(*) C+*A @'/2+=(M
'C(2; 0'/B'/:*+'() +(G'1G+(= 2+*A2/ *20A(+0:1 '/ @+(:(0+:1
:))+)*:(02 @'/ 1:/=2M)0:12 2FB1'/:*+'(5 ;2G21'B>2(*5 :(;
,*+1+H:*+'( '@ >+(2/:1)5 B2*/'12,>5 :(; '*A2/ >+(2/:1 '+1)
accordlng Lo Lhe general Lerms and condlLlons provlded by
law, based on real conLrlbuLlons Lo Lhe economlc growLh
and general welfare of Lhe counLry. ln such agreemenLs,
Lhe SLaLe shall promoLe Lhe developmenL and use of local
sclenLlflc and Lechnlcal resources.
1he resldenL shall noLlfy Lhe Congress of every conLracL
enLered lnLo ln accordance wlLh Lhls provlslon, wlLhln
LhlrLy days from lLs execuLlon.



!"#$#%
!"#$%& $( )%# #*+ #,#-./ 0- *1( 233456/ 7 89:; 4664
ln 1973, Lhe Comlssloner on ubllc Plghways enLered lnLo a conLracL Lo reclalm areas of Manlla 8ay wlLh Lhe ConsLrucLlon and uevelopmenL CorporLlon of Lhe
hlllpplnes (CuC).

LA (ubllc LsLaLes AuLhorlLy) was creaLed by resldenL Marcos under .u. 1084, Lasked wlLh developlng and leaslng reclalmed lands. 1hese lands were
Lransferred Lo Lhe care of LA under .u. 1083 as parL of Lhe Manlla CavlLe 8oad and 8eclamaLlon ro[ecL (MC88). CuC and LA enLered lnLo an agreemenL
LhaL all fuLure pro[ecLs under Lhe MC88 would be funded and owned by LA.

8y 1988, resldenL Aqulno lssued Speclal aLenL no. 3317 Lransferrlng lands Lo LA. lL was followed by Lhe Lransfer of Lhree 1lLles (7309, 7311 and 7312) by Lhe
8eglsLer of ueeds of aranaque Lo LA coverlng Lhe Lhree reclalmed lslands known as Lhe l8LLuCM lSLAnuS.

SubsquenLly, LA enLered lnLo a [olnL venLure agreemenL (!vA) wlLh AMA8l, a 1hal-hlllpplne corporaLlon Lo develop Lhe lreedom lslands. Along wlLh anoLher
230 hecLares, LA and AMA8l enLered Lhe !vA whlch would laLer Lransfer sald lands Lo AMA8l. 1hls caused a sLlr especlally when Sen. Maceda assalled Lhe
agreemenL, clalmlng LhaL such lands were parL of publlc domaln (famously known as Lhe moLher of all scams").

elLloner lrank !. Chavez flled case as a Laxpayer praylng for mandamus, a wrlL of prellmlnary ln[uncLlon and a 18C agalnsL Lhe sale of reclalmed lands by LA
Lo AMA8l and from lmplemenLlng Lhe !vA. lollowlng Lhese evenLs, under resldenL LsLrada's admln, LA and AMA8l enLered lnLo an Amended !vA and Mr.
Chaves clalm LhaL Lhe conLracL ls null and vold.

'##($#%
w/n: Lhe Lransfer Lo AMA8l lands reclalmed or Lo be reclalmed as parL of Lhe sLlpulaLlons ln Lhe (Amended) !vA beLween AMA8l and LA vlolaLe Sec. 3 ArL. xll
of Lhe 1987 ConsLlLuLlon
w/n: Lhe courL ls Lhe proper forum for ralslng Lhe lssue of wheLher Lhe amended [olnL venLure agreemenL ls grossly dlsadvanLageous Lo Lhe governmenL.

)$*+%
,- ./$ 0##($ 12 34$-+$+ 563 "# 701*".0-8 ./$ 91-#.0.(.01-%
1. 1he 137.84 hecLares of reclalmed lands comprlslng Lhe lreedom lslands, now covered by cerLlflcaLes of LlLle ln Lhe name of LA, are allenable lands of Lhe
publlc domaln. LA may lease Lhese lands Lo prlvaLe corporaLlons buL may noL sell or Lransfer ownershlp of Lhese lands Lo prlvaLe corporaLlons. LA may only
sell Lhese lands Lo hlllpplne clLlzens, sub[ecL Lo Lhe ownershlp llmlLaLlons ln Lhe 1987 ConsLlLuLlon and exlsLlng laws.

2. 1he 392.13 hecLares of submerged areas of Manlla 8ay remaln lnallenable naLural resources of Lhe publlc domaln unLll classlfled as allenable or dlsposable
lands open Lo dlsposlLlon and declared no longer needed for publlc servlce. 1he governmenL can make such classlflcaLlon and declaraLlon only afLer LA has
reclalmed Lhese submerged areas. Cnly Lhen can Lhese lands quallfy as agrlculLural lands of Lhe publlc domaln, whlch are Lhe only naLural resources Lhe
governmenL can allenaLe. ln Lhelr presenL sLaLe, Lhe 392.13 hecLares of submerged areas are lnallenable and ouLslde Lhe commerce of man.

3. Slnce Lhe Amended !vA seeks Lo Lransfer Lo AMA8l, a prlvaLe corporaLlon, ownershlp of 77.34 hecLares110 of Lhe lreedom lslands, such Lransfer ls vold for
belng conLrary Lo SecLlon 3, ArLlcle xll of Lhe 1987 ConsLlLuLlon whlch prohlblLs prlvaLe corporaLlons from acqulrlng any klnd of allenable land of Lhe publlc
domaln.

4. Slnce Lhe Amended !vA also seeks Lo Lransfer Lo AMA8l ownershlp of 290.136 hecLares111 of sLlll submerged areas of Manlla 8ay, such Lransfer ls vold for
belng conLrary Lo SecLlon 2, ArLlcle xll of Lhe 1987 ConsLlLuLlon whlch prohlblLs Lhe allenaLlon of naLural resources oLher Lhan agrlculLural lands of Lhe publlc
domaln.

LA may reclalm Lhese submerged areas. 1hereafLer, Lhe governmenL can classlfy Lhe reclalmed lands as allenable or dlsposable, and furLher declare Lhem no
longer needed for publlc servlce. SLlll, Lhe Lransfer of such reclalmed allenable lands of Lhe publlc domaln Lo AMA8l wlll be vold ln vlew of SecLlon 3, ArLlcle xll
of Lhe 1987ConsLlLuLlon whlch prohlblLs prlvaLe corporaLlons from acqulrlng any klnd of allenable land of Lhe publlc domaln.

!" $%&"! $'!""( )*+$"! ",,-.+")+-( /0 12(*3 &* (-0 4567753 4 12.28$2* 599: ;*2,-!%)+-( -< 8-)+-( <-*
*2.-(,+12*")+-(=

!"#$%& Cn !anuary 27, 2004, Lhe CourL en banc promulgaLed lLs ueclslon granLlng Lhe eLlLlon and declarlng Lhe unconsLlLuLlonallLy of cerLaln provlslons of 8A
7942, uAC 96-40, as well as of Lhe enLlre llnanclal and 1echnlcal AsslsLance AgreemenL l1AA execuLed beLween Lhe governmenL and WMC, malnly on Lhe
flndlng LhaL l1AAs are servlce conLracLs prohlblLed by Lhe 1987 ConsLlLuLlon.

1he ueclslon sLruck down Lhe sub[ecL l1AA for belng slmllar Lo servlce conLracLs, whlch, Lhough permlLLed under Lhe 1973 ConsLlLuLlon, were subsequenLly
denounced for belng anLlLheLlcal Lo Lhe prlnclple of soverelgnLy over our naLural resources, because Lhey allowed forelgn conLrol over Lhe explolLaLlon of our
naLural resources, Lo Lhe pre[udlce of Lhe llllplno naLlon.

'%%()& Are forelgn-owned corporaLlons ln Lhe large-scale exploraLlon, developmenL, and uLlllzaLlon of peLroleum, mlnerals and mlneral olls llmlLed Lo
Lechnlcal" or flnanclal" asslsLance only?

+(,-./& Cnly Lechnlcal asslsLance or flnanclal asslsLance agreemenLs may be enLered lnLo, and only for large-scale acLlvlLles. lull conLrol ls noL anaLhemaLlc Lo
day-Lo-day managemenL by Lhe conLracLor, provlded LhaL Lhe SLaLe reLalns Lhe power Lo dlrecL overall sLraLegy, and Lo seL aslde, reverse or modlfy plans and
acLlons of Lhe conLracLor. 1he ldea of full conLrol ls slmllar Lo LhaL whlch ls exerclsed by Lhe board of dlrecLors of a prlvaLe corporaLlon: Lhe performance of
managerlal, operaLlonal, flnanclal, markeLlng and oLher funcLlons may be delegaLed Lo subordlnaLe offlcers or glven Lo conLracLual enLlLles, buL Lhe board
reLalns full resldual conLrol of Lhe buslness.


!"#$! 0"%)%&
;>= ?+.-? *2,-%*.2, /0 $",2 82)"! 8+(2*"!,3 &* (-0 4@AB9C3 @ 12.28$2* 599@D
1203+'45
!"# %&#'()#*+(,- .,&&,*+/ 0,**1+2 (* ,*/ 3,**#&2 4# 01*'+&5#) ,' , 01*+&,0+5,- 5*)#&+,6(*7 ,''5&(*7 %89:% 1; #<0-5'(=# >1''#''(1* ,*) #*?1/3#*+ 1;
(+' 01*0#''(1* ,&#,'@ A50" ,* (*+#&>&#+,+(1* B15-) &#'5-+ (* +"# 013>-#+# ,4)(0,+(1* 4/ +"# A+,+# (* ;,=1& 1; %89:% 1; +"# '1=#&#(7* >1B#& +1 01*+&1-
,*) '5>#&=('# +"# #<>-1&,+(1*2 )#=#-1>3#*+ ,*) 5+(-(C,+(1* 1; +"# *,+5&,- &#'15&0#' (* +"# ,&#,@

!"#$%& CenLral Mlndanao Mlnlng and uevelopmenL CorporaLlon enLered lnLo a Mlnes CperaLlng AgreemenL wlLh 8anahaw Mlnlng and uevelopmenL
CorporaLlon ursuanL Lo Lhe Lerms of Lhe AgreemenL, 8anahaw Mlnlng flled appllcaLlons for Mlnlng Lease ConLracLs over Lhe mlnlng clalms wlLh Lhe
8ureau of Mlnes. Cn Aprll 29, 1988, 8anahaw Mlnlng was lssued a Mlnes 1emporary ermlL auLhorlzlng lL Lo exLracL and dlspose of preclous mlnerals
found wlLhln lLs mlnlng clalms

Slnce a porLlon of 8anahaw Mlnlng's mlnlng clalms was locaLed ln peLlLloner lCC's logglng concesslon ln Agusan del Sur, 8anahaw Mlnlng and
peLlLloner lCC enLered lnLo a Memorandum of AgreemenL, whereby, ln muLual recognlLlon of each oLher's rlghL Lo Lhe area concerned,
peLlLloner lCC allowed 8anahaw Mlnlng an access/rlghL of way Lo lLs mlnlng clalms 8anahaw Mlnlng LhereafLer converLed lLs mlnlng clalms Lo
appllcaLlons for Mlneral roducLlon Sharlng AgreemenLs. Whlle Lhe MSA were pendlng, 8anahaw Mlnlng, on uecember 18, 1996, declded Lo
sell/asslgn lLs rlghLs and lnLeresLs over LhlrLy-seven mlnlng clalms ln favor of prlvaLe respondenL 8ase MeLals Mlneral 8esources CorporaLlon (8ase
MeLals for brevlLy). 1he Lransfer lncluded mlnlng clalms held by 8anahaw Mlnlng ln lLs own rlghL as clalm owner, as well as Lhose covered by lLs mlnlng
operaLlng agreemenL wlLh CMMCl. upon belng lnformed of Lhe developmenL, CMMCl, as clalm owner, lmmedlaLely approved Lhe asslgnmenL made
by 8anahaw Mlnlng ln favor of prlvaLe respondenL 8ase MeLals, Lhereby recognlzlng prlvaLe respondenL 8ase MeLals as Lhe new operaLor of lLs clalms
Cn november 18, 1997, peLlLloner lCC flled wlLh Lhe Mlnes Ceo-Sclences 8ureau (MC8), Caraga 8eglonal Cfflce no. xlll an Adverse Clalm and/or
CpposlLlon Lo prlvaLe respondenL 8ase MeLals' appllcaLlon on Lhe followlng grounds:

l. 1PL A8CvAL Cl 1PL ALlCA1lCn Anu lSSuAnCL Cl 1PL MSA Cl 8ASL ML1ALS WlLL vlCLA1L 1PLCCnS1l1u1lCnAL MAnuA1L
ACAlnS1 lMAl8MLn1 Cl C8LlCA1lCn ln A CCn18AC1

1he CourL of Appeals upheld Lhe declslon of Lhe MA8, rullng LhaL Lhe resldenLlal WarranLy of SepLember 23, 1968 lssued by Lhen resldenL lerdlnand
L. Marcos merely conflrmed Lhe Llmber llcense granLed Lo lCC and warranLed Lhe laLLer's peaceful and adequaLe possesslon and en[oymenL of lLs
concesslon areas. lL was only glven upon Lhe requesL of Lhe 8oard of lnvesLmenLs Lo esLabllsh Lhe boundarles of lCC's Llmber llcense agreemenL.
1he resldenLlal WarranLy dld noL converL lCC's Llmber llcense lnLo a conLracL because lL dld noL creaLe any obllgaLlon on Lhe parL of Lhe
governmenL ln favor of lCC. 1hus, Lhe non-lmpalrmenL clause flnds no appllcaLlon. nelLher dld Lhe resldenLlal WarranLy granL lCC Lhe excluslve
possesslon, occupaLlon and exploraLlon of Lhe concesslon areas covered. lf LhaL were so, Lhe governmenL would have effecLlvely surrendered lLs pollce
power Lo conLrol and supervlse Lhe exploraLlon, developmenL and uLlllzaLlon of Lhe counLry's naLural resources.

'%%()& w/n Lhe lmpalrmenL of conLracLs apply?

+),-& ./0 1he guaranLy ls merely a collaLeral lnducemenL. An examlnaLlon of Lhe resldenLlal WarranLy aL once reveals LhaL lL slmply
reassures lCC of Lhe governmenL's commlLmenL Lo uphold Lhe Lerms and condlLlons of lLs Llmber llcense and guaranLees lCC's peaceful and
adequaLe possesslon and en[oymenL of Lhe areas whlch are Lhe baslc sources of raw maLerlals for lLs wood processlng complex. 1he warranLy covers
only Lhe rlghL Lo cuL, collecL, and remove Llmber ln lLs concesslon area, and does noL exLend Lo Lhe uLlllzaLlon of oLher resources, such as mlneral
resources, occurrlng wlLhln Lhe concesslon. 1he resldenLlal WarranLy cannoL, ln any manner, be consLrued as a conLracLual underLaklng
assurlng lCC of excluslve possesslon and en[oymenL of lLs concesslon areas. Such an lnLerpreLaLlon would resulL ln Lhe compleLe abdlcaLlon by Lhe
SLaLe ln favor of lCC of Lhe soverelgn power Lo conLrol and supervlse Lhe exploraLlon, developmenL and uLlllzaLlon of Lhe naLural resources ln Lhe
area


!"# %&'%()* '+ ,-./, ()0/1(.)02 -3.+2 )4 %&2 5( 3/0+ 67889:2 679;672 6<6=<;2 >).-0-/3 >%4)> 8? 3/')@A)( 8BB72
%3> ()0/&14-/3 >%4)> : >).)@A)( 8BB?

"#$%&'%( )**+
,-./01"23 1lmbet llceoses coocetoloq tbe botvestloq of tlmbet lo tbe cooottys fotests coooot be cooslJeteJ coottocts tbot woolJ bloJ tbe
Covetomeot teqotJless of cbooqes lo pollcy ooJ tbe JemooJs of pobllc lotetest ooJ welfote.

45./63 lCC's predecessor, 8lsllg 8ay Lumber Co., lnc. (88LCl) was granLed 1lmber Llcense AgreemenL (1LA) no. 43.1LA no. 43, as amended,
explred on 26 Aprll 1977. lL was renewed on 7 CcLober 1977 for anoLher 23 years Lo "LermlnaLe on Aprll 23,2002.Cn 23 november 2002, resldenL
Clorla Macapagal-Arroyo lssued roclamaLlon no. 297,"LxCLuulnC A CL81Aln A8LA l8CM 1PL CL8A1lCn Cl 8CCLAMA1lCn nC. 369 uA1Lu
lL88uA8? 27, 1931, AnuuLCLA8lnC 1PL SAML AS MlnL8AL 8LSL8vA1lCn Anu AS Lnvl8CnMLn1ALL? C8l1lCAL A8LA. "1he excluded area conslsLs
of 8,100 hecLares, more or less, whlch formed parL of lCC's explred 1LA no. 43, sub[ecL of lLs appllcaLlon for llMA converslon. Cn 21 !anuary
2003, lCC flled a eLlLlon for Lhe ueclaraLlon of nulllLy of Lhe aforesald presldenLlal proclamaLlon as well as lLs lmplemenLlng uLn8 AdmlnlsLraLlve
Crder. ln sald nuLLl1? CASL, Lhe 81C lssued a 1emporary 8esLralnlng Crder (18C) en[olnlng respondenLs Lhereln from lmplemenLlng Lhe quesLloned
lssuances. 1he uLn8 SecreLary and her co-respondenLs ln sald case flled on 6 lebruary 2003 an Cmnlbus MoLlon (1) 1o ulssolve Lhe 1emporary
8esLralnlng Crder daLed 3 lebruary 2003, and (2) 1o ulsmlss

166723 W/n Lhe presldenLlal warranLy was a conLracL

829,3 "-: lCC's ground for Lhe lssuance of a wrlL of mandamus ls Lhe supposed conLracL enLered lnLo by Lhe governmenL ln Lhe form of a
resldenLlal WarranLy, daLed 29 !uly 1969 lssued by Lhen resldenL lerdlnand L. Marcos Lo lCC. 1he uLn8 SecreLary refuLes Lhls clalm, and alleges
LhaL Lhe 81C and Lhe CourL of Appeals erred ln declarlng Lhe resldenLlal WarranLy a valld and subslsLlng conLracL under Lhe ConsLlLuLlon's non-
lmpalrmenL Clause. 1he SC dlsagrees. Such llcenses concernlng Lhe harvesLlng of Llmber ln Lhe counLry's foresLs cannoL be consldered conLracLs LhaL
would blnd Lhe CovernmenL regardless of changes ln pollcy and Lhe demands of publlc lnLeresL and welfare.

,%;%&'%( <
,-./01"23 A tlmbet llceose ls oot o coottoct wltblo tbe potvlew of tbe ooo-lmpoltmeot cloose
45./63 lCC flled wlLh Lhe uLn8 an appllcaLlon Lo have lLs 1lmber Llcense AgreemenL (1LA) no. 43converLed lnLo an llMA.lCC flled before Lhe
(81C) ClLy a eLlLlon for Mandamus agalnsL Lhen uLn8 Sec Alvarez for unlawfully refuslng and/or neglecLlng Lo slgn and execuLe Lhe llMA conLracL
of lCC even as Lhe laLLer has complled wlLh all Lhe legal requlremenLs for Lhe auLomaLlc converslon of 1LA no. 43, as amended, lnLo an llMA. 1he
cause of acLlon of lCC 8esources, lnc. (lCC) ln lLs eLlLlon for Mandamus wlLh Lhe Lrlal courL ls clear: Lhe governmenL ls bound by conLracL, a 1969
uocumenL slgned by Lhen resldenL lerdlnand Marcos, Lo enLer lnLo an lnLegraLed loresL ManagemenL AgreemenL (llMA)wlLh lCC.

166723 WheLher Lhe 1969 uocumenL ls a conLracL recognlzed under Lhe non-lmpalrmenL clause by whlch Lhe governmenL may be bound (for Lhe
lssuance of Lhe llMA)

829, nC. A Llmber llcense ls noL a conLracL wlLhln Lhe purvlew of Lhe non-lmpalrmenL clause ls edlfylng. Slnce Llmber llcenses are noL conLracLs, Lhe
non-lmpalrmenL clause, whlch reads: "SLC. 10. no law lmpalrlng Lhe obllgaLlon of conLracLs shall be passed." cannoL be lnvoked. 1he resldenLlal
WarranLy cannoL, ln any manner, be consLrued as a conLracLual underLaklng assurlng lCC of excluslve possesslon and en[oymenL of lLs concesslon
areas. Such an lnLerpreLaLlon would resulL ln Lhe compleLe abdlcaLlon by Lhe SLaLe ln favor of lCC of Lhe soverelgn power Lo conLrol and supervlse
Lhe exploraLlon, developmenL and uLlllzaLlon of Lhe naLural resources ln Lhe area.



"#$%&'() *+(,%'-.
Cld Spanlsh Clvll Code of 1889 (ArL. 426)
hlllpplne Crganlc AcL of 1902 (SecLlon 21)
arlLy AmendmenL (CommonwealLh AcL no. 733, 3 !uly 1946)
8epubllc AcL no. 1333 (Laurel-Langley AcL)
resldenLlal uecree no. 131 (13 March 1973)
!" $%&"' $('"") case - ueclslon, daLed 27 !anuary 2004

/01 2'+*-3 4+5&6*7+5. 8294":2;<
8epubllc AcL no. 387 (18 !une 1949)
resldenLlal uecree no. 87 (31 uecember 1972)
resldenLlal uecree no. 1837 (1 !anuary 1983)

8epubllc AcL no. 8180

4+#6=)%7 >7$ ?&@ ABCD E+=*6(*3 FGH FDDA
>? >I9 J242K;:>9L?K 9M2 J"N?O942>< "L: L?J;O94P >?J E"4 "9M24 8;48"O2O
$* +, *)"-,*. /0 ,1* 2*)",* "). 34%5* 46 7*89*5*),",+:*5 46 ,1* ;1+'+88+)*5 +) <4)&9*55 "55*=/'*.>

IM>8924 L
K2?24>: 84"QLOL"?O
O+7$%&' F@ !"#$% '(%)*@ - 1hls AcL shall be known as Lhe "uownsLream Cll lndusLry ueregulaLlon AcL of 1998."
O+7$%&' 0@ +*,)-$-%(#. #/ 0#)(,1@ - lL shall be Lhe pollcy of Lhe SLaLe Lo llberallze and deregulaLe Lhe downsLream oll lndusLry ln order Lo ensure a Lruly
compeLlLlve markeL under a reglme of falr prlces, adequaLe and conLlnuous supply of envlronmenLally-clean and hlgh-quallLy peLroleum producLs. 1o Lhls end,
Lhe SLaLe shall promoLe and encourage Lhe enLry of new parLlclpanLs ln Lhe downsLream oll lndusLry, and lnLroduce adequaLe measures Lo ensure Lhe
aLLalnmenL of Lhese goals.
O+7$%&' R@ 2#3*$-4*@ -1hls AcL shall apply Lo all persons or enLlLles engaged ln any and all acLlvlLles of Lhe domesLlc downsLream oll lndusLry, as well as persons
or companles dlrecLly lmporLlng reflned peLroleum producLs for Lhelr own use.
O+7$%&' B@ +*/(.(%(#. #/ '*$56@ - lor purposes of Lhls AcL, Lhe followlng Lerms are hereln below deflned:
(a) $"5*' <4):*),+4) shall refer Lo Lhe lnLernaLlonal accord whlch governs Lhe Lrade or movemenL of hazardous and Loxlc wasLes across borders,
(b) $4"9. shall refer Lo Lhe Lnergy 8egulaLory 8oard,
(c) $?@ shall refer Lo Lhe 8oard of lnvesLmenLs,
(d) <9%.* ?+' shall refer Lo oll ln lLs naLural sLaLe before Lhe same has been reflned or oLherwlse LreaLed, buL excludlng waLer, boLLoms, sedlmenLs and forelgn
subsLances,
(e) A*"'*9 shall refer Lo any person, wheLher naLural or [urldlcal, who ls engaged l Lhe markeLlng and dlrecL selllng of peLroleum producLs Lo moLorlsLs, end
users, and oLher consumers,
(f) A?B shall refer Lo Lhe ueparLmenL of Lnergy,
(g) A?C shall refer Lo Lhe ueparLmenL of !usLlce,
(h) A4D)5,9*"= ?+' @).%5,90EA?@F 49 @).%5,90 shall refer Lo Lhe buslness of lmporLlng, exporLlng, re-exporLlng, shlpplng, LransporLlng, processlng, reflnlng,
sLorlng, dlsLrlbuLlng, markeLlng and/or selllng crude oll, gasollne, dlesel, llquefled peLroleum gas (LC), kerosene, and oLher peLroleum producLs,
(l) !"#$%& shall refer Lo any person, wheLher naLural or [urldlcal, engaged ln Lhe LransporL, dlsLrlbuLlon, haullng, and carrlage of peLroleum producLs, wheLher ln
bulk or packed form, from Lhe oll companles and lndependenL markeLers Lo Lhe peLroleum dealers and oLher consumers,
([) '() +,-.&,/#.0& shall refer Lo any person or enLlLy, wheLher naLural or [urldlcal, engaged ln exporLlng, refllllng, LransporLlng, markeLlng, and/or selllng of LC
Lo end users and oLher consumers,
(k) 1%2 345#-.&6 ("&.,7,8"4.- shall refer Lo new parLlclpanLs ln a parLlcular sub-secLor of Lhe downsLream oll lndusLry wlLh lnvesLmenLs and lnlLlal buslness
operaLlons commenclng afLer !anuary 1, 1994,
(l) (%&-04 shall refer Lo any person, wheLher naLural or [urldlcal, who ls engaged ln any acLlvlLy of Lhe downsLream oll lndusLry,
(m) (%.&0$%#9 shall refer Lo Lhe naLurally occurrlng mlxLure of compounds of hydrogen and carbon wlLh a small proporLlon of lmpurlLles and shall lnclude any
mlneral oll, peLroleum gas, hydrogen gas, blLumen, asphalL, mlneral wax, and all oLher slmllar or naLurally-assoclaLed subsLances, wlLh Lhe excepLlon of coal,
peaL, blLumlnous shale and/or oLher sLraLlfled mlneral fuel deposlLs,
(n) (%.&0$%#9 (&05#7.- shall refer Lo producLs formed ln Lhe case of reflnlng crude peLroleum Lhrough dlsLlllaLlon, cracklng, solvenL reflnlng and chemlcal
LreaLmenL comlng ouL as prlmary sLocks from Lhe reflnery such as, buL noL llmlLed Lo: LC, naphLha, gasollnes, solvenLs, kerosenes, avlaLlon fuels, dlesel olls,
fuel olls, waxes and peLrolaLums, asphalL, blLumens, coke and reflnery sludges, or oLher such reflnery peLroleum fracLlons whlch have noL undergone any
process or LreaLmenL as Lo produce separaLe chemlcally-deflned compounds ln a pure or commerclally pure sLaLe and Lo whlch varlous subsLances may have
been added Lo render Lhem sulLable for parLlcular uses: (&0:,5%5; 1haL Lhe resulLanL producL conLalns noL less Lhan flfLy percenL (30) by welghL of such
peLroleum producLs,
(o) <,4="80&% 3980&. ("&,.6><3(? shall refer Lo Lhe deemed landed cosL of a peLroleum producL lmporLed from Slngapore aL a free-on-board prlce equal Lo Lhe
average Slngapore osLlng for LhaL producL aL Lhe Llme of loadlng,
(p) <,4="80&% (0-.,4= shall refer Lo Lhe prlce of peLroleum producLs perlodlcally posLed by oll reflnerles ln Slngapore and reporLed by lndependenL lnLernaLlonal
publlcaLlons, and
(q) @A0$%-"$% (0-.%5 (&,7% >@((? shall refer Lo Lhe celllng prlce of peLroleum producLs seL by Lhe 8oard based on lLs duly approved auLomaLlc prlclng formula.

!"#$%&' ))

*)+&'#*),#%)-. -/ %"& 0-1.2%'&#3 -)* ).042%'5 #.0 $'-3-%)-. -/ /'&& !-3$&%)%)-.
26789:; <= !"#$%&'"(&)"*+ *- ).$ /+012)%3= - Any law Lo Lhe conLrary noLwlLhsLandlng, any person or enLlLy may lmporL or purchase any quanLlLy of crude oll and
peLroleum producLs from a forelgn or domesLlc source, lease or own and operaLe reflnerles and oLher downsLream oll faclllLles and markeL such crude oll and
peLroleum producLs elLher ln a generlc name or hls or lLs own Lrade name, or use Lhe same for hls or lLs own requlremenL: (&0:,5%5;1haL any person who shall
engage ln any such acLlvlLy shall glve prlor noLlce Lhereof Lo Lhe uCL for monlLorlng purposes: (&0:,5%5; B#&.A%&; 1haL such noLlce shall exempL such person or
enLlLy from securlng cerLlflcaLes of quallLy, healLh and safeLy and envlronmenLal clearance from Lhe proper governmenLal agencles: (&0:,5%5;
B#&.A%&90&%; 1haL such person or enLlLy shall, for monlLorlng purposes, reporL Lo Lhe uCL hls or lLs every lmporLaLlon/exporLaLlon: (&0:,5%5; B,4"$$6; 1haL all oll
lmporLaLlons shall be ln accordance wlLh Lhe 8asel ConvenLlon.
26789:; >= 4&%"-- 4%$&)5$+)= - (a) Any law Lo Lhe conLrary noLwlLhsLandlng and sLarLlng wlLh Lhe effecLlvlLy of Lhls AcL, a slngle and unlform Larlff duLy shall be
lmposed and collecLed boLh on lmporLed crude oll and lmporLed reflned peLroleum producLs aL Lhe raLe of Lhree percenL (3): (&0:,5%5; A02%:%&; 1haL Lhe
resldenL of Lhe hlllpplnes may, ln Lhe exerclse of hls powers, reduce such Larlff raLe when ln hls [udgmenL such reducLlon ls warranLed, pursuanL Lo 8epubllc
AcL no. 1937, as amended, oLherwlse known as Lhe C"&,BB "45 D#-.09- D05%: (&0:,5%5; B#&.A%&; 1haL beglnnlng !anuary 1, 2004 or upon lmplemenLaLlon of Lhe
unlform 1arlff rogram under Lhe World 1rade CrganlzaLlon and ASLAn lree 1rade Area commlLmenLs, Lhe Larlff raLe shall be auLomaLlcally ad[usLed Lo Lhe
approprlaLe level noLwlLhsLandlng Lhe provlslons under Lhls SecLlon.
(c) lor as long as Lhe naLlonal ower CorporaLlon (nC) en[oys exempLlons from Laxes and duLles on peLroleum producLs used for power generaLlon, Lhe
exempLlon shall apply Lo purchases Lhrough Lhe local reflnerles and Lo Lhe lmporLaLlon of fuel oll and dlesel.

26789:; ?= 6%*5*)"*+ *- 7&"% 4%&0$ 6%&8)"8$2= - 1he ueparLmenL of 1rade and lndusLry (u1l) and uCL shall Lake all measures Lo promoLe falr Lrade and prevenL
carLellzaLlon, monopolles, comblnaLlons ln resLralnL of Lrade, and any unfalr compeLlLlon ln Lhe lndusLry as deflned ln ArLlcle 186 of Lhe 8evlsed enal Code,
and ArLlcles 168 and 169 of 8epubllc AcL no. 8293, oLherwlse known as Lhe "lnLellecLual roperLy Law". 1he uCL shall conLlnue Lo encourage cerLaln pracLlces
ln Lhe lndusLry whlch conLlnue Lo encourage cerLaln pracLlces ln Lhe lndusLry whlch serve Lhe publlc lnLeresL and are lnLended Lo achleve efflclency and cosL
reducLlon, ensure conLlnuous supply of peLroleum producLs, and enhance envlronmenLal proLecLlon. 1hese pracLlces may lnclude borrow-and-loan
agreemenLs, raLlonallzed depoL and manufacLurlng operaLlons, hosplLallLy agreemenLs, [olnL Lanker and plpellne uLlllzaLlon, and [olnL acLlons on splll conLrol
and flre prevenLlon.

1he uCL shall monlLor Lhe relaLlonshlp beLween Lhe oll companles (reflners and lmporLers) and Lhelr dealers, haulers and LC dlsLrlbuLors Lo help ensure Lhe
observance of falr and equlLable pracLlces and Lo ensure Lhe enforcemenL of exlsLlng conLracLs: !"#$%&'&( 1haL Lhe uCL shall conclllaLe and arblLraLe any
dlspuLe LhaL may arlse wlLh respecL Lo Lhe conLracLual relaLlonshlp beLween Lhe oll companles and Lhe dealers, haulers and LC dlsLrlbuLors lnvolvlng Lhe
dealers' mark-up, Lhe frelghL raLe ln LransporLlng peLroleum producLs and Lhe marglns of LC dlsLrlbuLors for Lhe proLecLlon of Lhe publlc and Lo prevenL
rulnous compeLlLlon: !"#$%&'&( *+",-'"( 1haL Lhe arblLraLlon award of Lhe uCL shall be sub[ecL Lo [udlclal revlew under exlsLlng law.

!"#$%&' )* !"#$"%& (# )*+#,"%$- (.- )*("/ #0 1-2 !%"(3+34%*(5 3* (.- 6*7,5("/* - 1he uCL, Lhe ueparLmenL of lorelgn Affalrs (ulA) and Lhe u1l shall [olnLly
formulaLe and esLabllsh a program LhaL wlll promoLe Lhe enLry of new parLlclpanLs ln Lhe lndusLry. Such program shall, among oLhers, lnclude a sLraLeglc
lnLernaLlonal lnformaLlon campalgn Lo be lmplemenLed Lhrough selecLed embassles and consular offlces of Lhe hlllpplnes. 1hls program shall commence
lmplemenLaLlon afLer Lhree (3) monLhs from Lhe effecLlvlLy of Lhls AcL.
ln Lhls regard, Lhe uCL shall provlde a "hlllpplne uownsLream Cll lndusLry lnvesLmenL Culde" Lo new lndusLry parLlclpanLs and prospecLlve parLlclpanLs. 1hls
gulde, shall, among oLhers, conLaln:
(a) An lnLroducLlon Lo Lhe hlllpplne uownsLream Cll lndusLry and Lhe governmenL's unwaverlng commlLmenL Lo deregulaLlon,
(b) 1he enLry requlremenLs,
(c) lnformaLlon on Lhe beneflLs and lncenLlves for new lndusLry parLlclpanLs whlch shall speclfy: (l) all Lhe lncenLlves and beneflLs Lhey can en[oy, and (ll) Lhe
procedural and subsLanLlve requlremenLs needed for enLlLlemenL, and
(d) Such oLher lnformaLlon Lhe uCL may deem necessary Lo promoLe Lhe enLry of new parLlclpanLs.

!"#$%&' +* 6*+-*(38-5 0#" 1-2 6*8-5(&-*(5* - 1o Lhe exLenL appllcable, persons wlLh new lnvesLmenLs as deLermlned by Lhe uCL and reglsLered wlLh Lhe 8Cl ln
reflnlng, sLorage, markeLlng and dlsLrlbuLlon of peLroleum producLs, shall be exLended Lhe same lncenLlves granLed Lo 8Cl-reglsLered enLerprlses engaged ln a
preferred area of lnvesLmenLs pursuanL Lo LxecuLlve Crder no. 226, oLherwlse known as Lhe "Cmnlbus lnvesLmenLs Code of 1987".
Such lncenLlves shall lnclude:
(1) lncome Lax hollday,
(2) AddlLlonal deducLlon for labor expenses,
(3) Mlnlmum Lax and duLy of Lhree percenL (3) and value-added Lax (vA1) on lmporLed caplLal equlpmenL,
(4) 1ax credlL on domesLlc caplLal equlpmenL,
(3) LxempLlon from conLracLor's Lax,
(6) unresLrlcLed use of conslgned equlpmenL,
(7) LxempLlon from Lhe real properLy Lax on producLlon equlpmenL or machlnerles,
(8) LxempLlon from Laxes and duLles on lmporLed spare parLs, and
(9) Such oLher appllcable lncenLlves under ArLlcle 39 of LxecuLlve Crder no. 226.
Any provlslon of Lhe law Lo Lhe conLrary noLwlLhsLandlng, Lhe sald lncenLlves may be avalled by persons wlLh new lnvesLmenLs for a perlod of flve (3) years
from reglsLraLlon wlLh Lhe 8Cl: !"#$%&'&( -#.'$'"( 1haL ln Lhe sLorage, markeLlng and dlsLrlbuLlon of peLroleum producLs, only Lhe lnvesLmenLs of new lndusLry
parLlclpanLs shall be enLlLled Lo lncenLlves provlded ln Lhe sald Code. As used hereln, "markeLlng of peLroleum producLs" shall lnclude Lhe esLabllshmenL of
gasollne sLaLlons.
lor Lhls purpose, Lhe lndusLry shall be lncluded ln Lhe annual lnvesLmenL rlorlLles lan (l): !"#$%&'&( 1haL noLhlng ln hereln conLalned shall preclude
quallfled persons or enLlLles as provlded under Lhe "Cmnlbus lnvesLmenLs Code" from applylng from or conLlnue en[oylng lncenLlves and beneflLs under Lhe
sald Code.
!"#$%&' )*+ !"#$#%&#' #) *+%,&- .#$/+%&%&#'+ - 1o achleve Lhe soclal and pollcy ob[ecLlve of falr prlces, faclllLaLe Lhe aLLalnmenL of a Lruly compeLlLlve producL
markeL ln Lhe reLall level, Lhe uCL shall promoLe and encourage by way of lnformaLlon dlssemlnaLlon, neLworklng, and managemenL/skllls Lralnlng, Lhe acLlve
and dlrecL parLlclpaLlon of Lhe prlvaLe secLor and cooperaLlves ln Lhe reLalllng of peLroleum producLs Lhrough [olnL venLure/supply agreemenLs wlLh new
lndusLry parLlclpanLs for Lhe esLabllshmenL and operaLlon of gasollne sLaLlons: !"#$%&'&( 1haL Lhe Lralnlng hereln shall lnclude LC reLalllng.
1o Lhls end, Lhe uCL shall, ln accordance wlLh Lhe 1echnology and Llvellhood 8esource CenLer (1L8C) and 1echnlcal LducaLlon and Skllls uevelopmenL AuLhorlLy
(1LSuA), coordlnaLe wlLh new lndusLry parLlclpanLs and exlsLlng peLroleum dealers' assoclaLlons ln Lhe formulaLlon and lmplemenLaLlon of a Lwo-fold program
on managemenL and skllls Lralnlng for Lhe esLabllshmenL, operaLlon, and malnLenance of gasollne sLaLlons.
ersons who successfully compleLe Lhe Lwo-fold program shall be enLlLled Lo governmenL asslsLance belng exLended by governmenL lendlng agencles, ln Lhe
form of medlum- Lo long-Lerm loans wlLh low lnLeresL raLes and Lo Lhe gasollne Lralnlng sLaLlon Lralnlng and loan fund provlded hereunder, Lo serve as caplLal
for Lhe esLabllshmenL and operaLlon of gasollne sLaLlons.
lor Lhese purposes, Lhere ls hereby esLabllshed a gasollne sLaLlon and loan fund wlLh Lhe lnlLlal amounL of 1hree hundred mllllon pesos ( 300,000,000.00) Lo
be provlded by Lhe hlllpplne AmusemenL and Camlng CorporaLlon (ACCC8) and admlnlsLered by Lhe uCL under a separaLe accounL.
Cf Lhls amounL, Lwo percenL (2) plus any addlLlonal fundlng shall be allocaLed for he Lwo-fold program, one percenL (1) plus any addlLlonal fundlng shall be
seL aslde for admlnlsLraLlve, malnLenance, and oLher operaLlng expenses, nlneLy-four percenL (94) shall be used excluslvely for lendlng and flnanclal
asslsLance, Lhe remalnlng Lhree percenL (3) shall be uLlllzed ln accordance wlLh Lhe provlslons of SecLlon 26 of Lhls AcL: !"#$%&'&( 1haL Lhe loans Lo be
awarded hereln shall be from shorL- Lo medlum-Lerm wlLh low lnLeresL raLes, !"#$%&'&( *+",-'"( 1haL Lhese loans shall be awarded Lo quallfled persons who are
able Lo comply wlLh Lhe condlLlons seL forLh ln Lhe nexL Lwo (2) precedlng paragraphs.

,-./012 333
.4035026!0 !.7186.29!: ;0-12 /2;-3<3019 .,0! .49 21=1931!
!"#$%&' ))+ 0'%&12"34% 5,)+63,"74+ - 1o ensure falr compeLlLlon and prevenL carLels and monopolles ln Lhe lndusLry, Lhe followlng acLs are hereby prohlblLed:
(a) ./",'0%1/,%#2 whlch means any agreemenL, comblnaLlon or concerLed acLlon by reflners, lmporLers and/or dealers, or Lhelr represenLaLlves, Lo flx prlces,
resLrlcL ouLpuLs or dlvlde markeLs, elLher by producLs or by areas, or allocaLe markeLs, elLher by producLs or by areas, ln resLralnL of Lrade or free compeLlLlon,
lncludlng any conLracLual sLlpulaLlon whlch prescrlbes prlclng levels and proflL marglns,

(b) !"'&/,#"3 4"%5%26 whlch means selllng or offerlng Lo sell any oll producL aL a prlce below Lhe seller's or offeror's average varlable cosL for Lhe purpose of
desLroylng compeLlLlon, ellmlnaLlng a compeLlLor or dlscouraglng a poLenLlal compeLlLor from enLerlng Lhe markeL: !"#$%&'&( -#7'$'"( 1haL prlclng below
average varlable cosL ln order Lo maLch Lhe lower prlce of Lhe compeLlLor and noL for Lhe purpose of desLroylng compeLlLlon shall noL be deemed predaLory
prlclng. lor purposes of Lhls provlslon, "varlable cosL" as dlsLlngulshed from "flxed cosL", refers Lo cosLs such as uLlllLles or raw maLerlals, whlch vary as Lhe
ouLpuL lncreases or decreases and "average varlable cosL" refers Lo Lhe sum of all varlable cosLs dlvlded by Lhe number of unlLs of ouLpuLs.
Any person, lncludlng buL noL llmlLed Lo Lhe chlef operaLlng offlcer, chlef execuLlve offlcer or chlef flnance offlcer of Lhe parLnershlp, corporaLlon or any enLlLy
lnvolved, who ls found gullLy of any of Lhe sald prohlblLed acLs shall suffer Lhe penalLy of Lhree (3) Lo seven (7) years lmprlsonmenL, and a flne ranglng from
Cne mllllon pesos ( 1,000,0000.00) Lo 1wo mllllon pesos ( 2,000,000.00).

!"#$%&' )>+ 8%9+" !"#9&:&%+7 0;%4+ - 1o ensure compllance wlLh Lhe provlslons of Lhls AcL, Lhe refusal Lo comply wlLh any of Lhe followlng shall llkewlse be
prohlblLed:
(a) submlsslon of any reporLorlal requlremenLs,
(b) use of clean and safe (envlronmenL and worker-benlgn) Lechnologles,
(c) any order or lnsLrucLlon of Lhe uCL SecreLary lssued ln Lhe exerclse of hls enforcemenL powers under SecLlon 13 of Lhls AcL, and
(d) reglsLraLlon of any fuel addlLlve wlLh Lhe uCL prlor Lo lLs use as an addlLlve.
Any person, lncludlng buL noL llmlLed Lo Lhe chlef operaLlng offlcer or chlef execuLlve offlcer of Lhe parLnershlp, corporaLlon or any enLlLy lnvolved, who ls
found gullLy of any of Lhe sald prohlblLed acLs shall suffer Lhe penalLy of lmprlsonmenL for Lwo (2) years and a flne ranglng from 1wo hundred flfLy Lhousand
pesos ( 230,000.00) Lo llve hundred Lhousand pesos ( 300,000.00).
!"#$%&' )*+ !"#"$%"&+ - (a) CovernmenL AcLlon. - Whenever lL ls deLermlned by Lhe !olnL 1ask lorce creaLed under SecLlon 14 (d) of Lhls AcL, Lhere ls a
LhreaLened or lmmlnenL or acLual vlolaLlon of SecLlon 11 of Lhls AcL, lL shall dlrecL Lhe provlnclal or clLy prosecuLors havlng [urlsdlcLlon Lo lnsLlLuLe an acLlon Lo
prevenL or resLraln such vlolaLlon wlLh Lhe 8eglonal 1rlal CourL of Lhe place where Lhe defendanLs reslde or has hls place of buslness. endlng hearlng of Lhe
complalnL and before flnal [udgmenL, Lhe courL may aL any Llme lssue a Lemporary resLralnlng order or an ln[uncLlon as shall be deemed [usL wlLhln Lhe
premlses, under Lhe same condlLlons and prlnclples as ln[uncLlve rellef ls granLed under Lhe 8ules of CourL.
Whenever lL ls deLermlned by Lhe !olnL 1ask lorce LhaL Lhe CovernmenL or any of lLs lnsLrumenLallLles or agencles, lncludlng governmenL-owned or -conLrolled
corporaLlons, shall suffer loss or damage ln lLs buslness or properLy by reason of vlolaLlon of SecLlon 11 of Lhls AcL, such lnsLrumenLallLy, agency or corporaLlon
may flle an acLlon Lo recover damages and Lhe cosLs of Lhe sulL wlLh Lhe 8eglonal 1rlal CourL whlch has [urlsdlcLlon as provlded above.
(b) rlvaLe ComplalnL. - Any person or enLlLy shall reporL any vlolaLlon of SecLlon 11 of Lhls AcL Lo Lhe !olnL 1ask lorce. 1he !olnL 1ask lorce shall lnvesLlgaLe
such reporLs ln ald of whlch Lhe uCL SecreLary may exerclse Lhe powers under SecLlon 13 of Lhls AcL. 1he !olnL 1ask lorce shall prepare a reporL embodylng lLs
flndlngs and recommendaLlons as a resulL of any such lnvesLlgaLlon, and Lhe reporL shall be made aL Lhe dlscreLlon of Lhe !olnL 1ask lorce. ln Lhe evenL LhaL Lhe
!olnL 1ask lorce deLermlnes LhaL Lhere has been a vlolaLlon of SecLlon 11 of Lhls AcL, Lhe prlvaLe person or enLlLy shall be enLlLled Lo sue for and obLaln
ln[uncLlve rellef, as well as damages, ln Lhe 8eglonal 1rlal CourL havlng [urlsdlcLlon over any of Lhe parLles, under Lhe same condlLlons and prlnclples as
ln[uncLlve rellef ls granLed under Lhe 8ules of CourL.

,-./012 34
/5612! .78 9:7,0357! 59 0-1 851 .78 851 !1,210.2;
!"#$%&' )<+ '()%*(+%),+ - (a) 1he uCL shall monlLor and publlsh dally lnLernaLlonal crude oll prlces, as well as follow Lhe movemenLs of domesLlc oll prlces. lL
shall llkewlse monlLor Lhe quallLy of peLroleum producLs and sLop Lhe operaLlon of buslnesses lnvolved ln Lhe sale of peLroleum producLs whlch do noL comply
wlLh Lhe naLlonal sLandards of quallLy LhaL are allgned wlLh Lhe naLlonal sLandards/proLocols of quallLy. 1he 8ureau of roducL SLandards of Lhe u1l, LogeLher
wlLh Lhe ueparLmenL of LnvlronmenL and naLural 8esources (uLn8), Lhe uCL, Lhe ueparLmenL of Sclence and 1echnology (uCS1), represenLaLlves of Lhe fuel
and auLomoLlve lndusLrles and Lhe consumers, shall seL Lhe speclflcaLlons for all Lypes of fuel and fuel-relaLed producLs Lo lmprove fuel composlLlon for
lncreased efflclency and reduced emlsslons. 1he 8S shall also speclfy Lhe allowable conLenL of addlLlves ln all Lypes of fuels and fuel-relaLed producLs.
(b) 1he uCL shall monlLor Lhe reflnlng and manufacLurlng processes of local peLroleum producLs Lo ensure LhaL clean and safe (envlronmenL and worker-
benlgn) Lechnologles are applled. 1hls shall also apply Lo Lhe process of markeLlng local and lmporLed peLroleum producLs.
(c) 1he uCL shall malnLaln a perlodlc schedule of presenL and fuLure LoLal lndusLry lnvenLory of peLroleum producLs for Lhe purpose of deLermlnlng Lhe level of
supply. 1o lmplemenL Lhls, Lhe lmporLers, reflners, and markeLers are hereby requlred Lo submlL monLhly Lo Lhe uCL Lhelr acLual lmporLaLlons, local purchases,
sales and/or consumpLlon, and lnvenLory on a per crude/producL basls.
(d) Any reporL from any person of an unreasonable rlse ln Lhe prlces of peLroleum producLs shall be lmmedlaLely acLed upon. lor Lhls purpose, Lhe creaLlon of
Lhe uCL-uC! 1ask lorce ls hereby mandaLed Lo deLermlne wlLhln LhlrLy (30) days Lhe merlLs of Lhe reporL and lnlLlaLe Lhe necessary acLlons warranLed under
Lhe clrcumsLance:!"#$%&'&( 1haL noLhlng hereln shall prevenL Lhe sald Lask force from lnvesLlgaLlng and/or flllng Lhe necessary complalnL wlLh Lhe proper courL
or agency *#+, -"#-%#.
upon Lhe effecLlvlLy of Lhls AcL, Lhe SecreLarles of Lnergy and !usLlce shall [olnLly appolnL Lhe members of a commlLLee who shall be Lasked wlLh Lhe drafLlng of
Lhe rules and guldellnes Lo be adopLed by Lhe 1ask lorce ln Lhe performance of lLs duLy. 1hese guldellnes shall ensure Lhe efflclency, prompLness, and
effecLlveness ln Lhe handllng of lLs cases. 1he 1ask lorce shall be organlzed and lLs members appolnLed wlLhln one (1) monLh from Lhe effecLlvlLy of Lhls AcL.
(d) ln Llmes of naLlonal emergency, when Lhe publlc lnLeresL so requlres, Lhe uCL may, durlng Lhe emergency and under reasonable Lerms prescrlbed by
lL, Lemporarlly Lake over or dlrecL Lhe operaLlon of any person or enLlLy engaged ln Lhe lndusLry.

!"#$%&' )=+ -$$%*%()./ 1(2"+& (3 *4" 567 8"9+"*.+:+ - ln connecLlon wlLh Lhe enforcemenL of Lhls AcL, Lhe uCL SecreLary shall have Lhe followlng powers:
(a) 1o gaLher and complle approprlaLe lnformaLlon concernlng, and Lo lnvesLlgaLe from Llme Lo Llme Lhe organlzaLlon, buslness, conducL, pracLlces, and
managemenL of any person or enLlLy ln Lhe lndusLry,
(b) 1o requlre, by general or speclal orders, persons or enLlLles engaged ln a parLlcular acLlvlLy of Lhe lndusLry: (l) Lo flle an annual or speclal reporL, or boLh ln
such form as Lhe SecreLary may prescrlbe, or (ll) Lo answer speclflc quesLlons ln wrlLlng, furnlshlng Lo Lhe SecreLary such lnformaLlon as he may requlre as Lo
Lhe organlzaLlon, buslness, conducL, pracLlces, managemenL, and relaLlon Lo oLher corporaLlons, parLnershlps, and lndlvlduals of Lhe respecLlve persons or
enLlLles flllng such reporLs or answer. Such reporLs and/or answer shall be flled wlLh Lhe SecreLary under oaLh and wlLhln such reasonable Llme as Lhe SecreLary
may prescrlbe,
(c) upon Lhe dlrecLlon of Lhe resldenL or elLher Pouse of Congress, Lo lnvesLlgaLe and reporL Lhe facLs relaLlng Lo any alleged vlolaLlon of Lhls AcL by any person
or corporaLlon,
(d) upon Lhe appllcaLlon of Lhe SecreLary of !usLlce, Lo lnvesLlgaLe and make recommendaLlons for Lhe read[usLmenL of Lhe buslness of any person or enLlLy
alleged Lo be vlolaLlng Lhls AcL ln order LhaL such person or enLlLy may LhereafLer malnLaln hls or lLs organlzaLlon, managemenL, and conducL of buslness ln
accordance wlLh law,
(e) 1o recommend Lo Lhe proper governmenL agency Lhe suspenslon or revocaLlon and LermlnaLlon of Lhe buslness permlL of an offender,
(f) ConcomlLanL wlLh Lhe pollcy of ensurlng a conLlnuous, adequaLe and economlc supply of energy Lo exerclse hls powers and funcLlons provlded under
SecLlon 3 (c) of 8epubllc AcL no. 7638,
(g) 1o make publlc from Llme Lo Llme such porLlons of Lhe lnformaLlon obLalned by hlm hereunder as are ln Lhe publlc lnLeresL, and Lo make annual and speclal
reporLs Lo Congress and Lo submlL LherewlLh recommendaLlons for addlLlonal leglslaLlon, and Lo provlde for Lhe publlcaLlon of hls reporLs and declslons ln such
form and manner as may be besL adapLed for publlc lnformaLlon and use: !"#$%&'&( 1haL Lhe SecreLary shall have any auLhorlLy Lo make publlc any Lrade secreL
or any commerclal or flnanclal lnformaLlon whlch ls obLalned from any person or enLlLy whlch ls prlvlleged or confldenLlal, excepL LhaL Lhe SecreLary may
dlsclose such lnformaLlon Lo offlcers and employees of approprlaLe law enforcemenL agencles or Lo any offlcer or employee of any such law enforcemenL
agency upon Lhe prlor cerLlflcaLlon by an offlcer of any such law enforcemenL agency LhaL such lnformaLlon wlll be malnLalned ln confldence and wlll be used
only for offlclal law enforcemenL purposes, and
(h) Whenever a flnal order has been enLered agalnsL any defendanL ln any sulL broughL by Lhe governmenL Lo prevenL and resLraln any vlolaLlon of Lhe anLl-
LrusL provlslons of Lhls AcL Lo make lnvesLlgaLlon, upon hls lnlLlaLlve, of Lhe manner ln whlch Lhe decree has been or ls belng carrled ouL, and upon Lhe
appllcaLlon of Lhe SecreLary of !usLlce, lL shall be hls duLy Lo make such lnvesLlgaLlon. Pe shall LransmlL Lo Lhe SecreLary of !usLlce a reporL embodylng hls
flndlngs and recommendaLlons as a resulL of any such lnvesLlgaLlon, and Lhe reporL shall be made publlc aL Lhe dlscreLlon of Lhe SecreLary.

!"#$%&' )
%'#*+,%,-* $"#+&
+./0123 456 !"#$%$ '( )%*%+,-#./'06 - ln order Lo provlde a smooLh lmplemenLaLlon of deregulaLlon, Lhe pollcy shlfL shall be done ln Lwo (2) phases: hase l
(1ranslLlon hase) and hase ll (lull ueregulaLlon hase).
+./0123 476 1,((%* 2,036 - 1he resldenL may, when Lhe lnLeresL of Lhe consumers so requlres, Laklng lnLo accounL Lhe rlse ln Lhe domesLlc prlces of peLroleum
producLs, use Lhe "8eserve ConLrol AccounL" as a buffer fund ln an amounL noL exceedlng 1wo bllllon nlne hundred mllllon pesos ( 2,900,000,000.00) Lo cover
lncreases ln Lhe prlces of peLroleum producLs, excepL premlum gasollne, durlng Lhe 1ranslLlon hase over Lhe prlces prevalllng as of Lhe daLe of Lhe effecLlvlLy
of Lhls AcL. 1he "8eserve ConLrol AccounL" refers Lo a lump sum collaLlon of reserve lmposlLlons deducLed from Lhe approprlaLlons approved by Congress for
Lhe operaLlon of Lhe governmenL and Lhe lmplemenLaLlon of pro[ecLs and programs.

+./0123 486 4,.'5#./6 7/- !*/6/0+ 8%6"#0/$56 - 1o enable Lhe domesLlc prlce of peLroleum producLs Lo approxlmaLe and prompLly reflecL Lhe prlces of oll ln
Lhe lnLernaLlonal markeL, an auLomaLlc prlclng mechanlsm shall be esLabllshed. 1o Lhls end, Lhe followlng laws are hereby amended:
(a) aragraph (a), SecLlon 8 of 8epubllc AcL no. 6173, as amended by SecLlon 3 of LxecuLlve Crder no. 172, Lo read as follows:
"SLC. 8. !#)'"* #, -.' /#0"& 12#3 4#-%5' 03& 6'0"%37. - 1he 8oard shall have Lhe power:
"(a) 1o seL Lhe wholesale posLed prlce of peLroleum producLs durlng Lhe 1ranslLlon hase.
"lor Lhls purpose and for Lhe proLecLlon of Lhe publlc lnLeresL, Lhe 8oard shall, afLer due noLlce and hearlng, aL whlch any consumer of peLroleum producLs and
oLher parLles who may be affecLed may appear and be heard, and wlLhln one (1) monLh afLer Lhe effecLlvlLy of Lhls AcL, approve a markeL-orlenLed formula Lo
deLermlne Lhe W of peLroleum producLs based solely on Lhe changes of elLher Lhe Slngapore osLlng of reflned peLroleum producLs, Lhe Sl or Lhe crude
landed cosL.

"1hereafLer, Lhe 8oard shall aL Lhe proper Llmes auLomaLlcally ad[usL Lhe W of peLroleum producLs based on Lhe approved formula, Lhrough approprlaLe
orders, wlLhouL Lhe need for noLlce and hearlng.
"1he 8oard shall, on Lhe daLes of effecLlvlLy of Lhe auLomaLlc oll prlclng formula, Lhe lnlLlal W or Lhe ad[usLed W, publlsh Lhe same, LogeLher wlLh Lhe
correspondlng compuLaLlon ln Lwo (2) naLlonal newspapers of general clrculaLlon."
(b) aragraph 1 of LeLLer of lnsLrucLlon no. 1441, Lo read as follows:
"1. 1o revlew and reseL Lhe prlces of domesLlc peLroleum producLs up or down as necessary on or before Lhe Lhlrd Monday of each monLh Lo reflecL Lhe new
W of reflned peLroleum producLs based on Lhe approved auLomaLlc prlclng formula."
(c) aragraph 2 of LeLLer of lnsLrucLlon no. 1441 ls hereby deleLed. ln lleu Lhereof a new paragraph ls lnserLed Lo read as follows:
"2. 1he prlce ad[usLmenL shall be reflecLed auLomaLlcally ln Lhe approved W of each peLroleum producL."
(d) 1he provlslons of SecLlon 3 (a) and (c) and SecLlon 3 of LxecuLlve Crder no. 172 Lo Lhe conLrary noLwlLhsLandlng, Lhe 8oard shall, durlng Lhe 1ranslLlon
hase, malnLaln Lhe currenL margln of dealers and raLes charged by waLer LransporL operaLors, haulers and plpellne concesslonalres. uependlng on Lhe basls of
Lhe AM, Lhe 8oard shall, wlLhln one (1) monLh afLer Lhe effecLlvlLy of Lhls AcL and afLer proper noLlce and full publlc hearlng, prescrlbe a formula whlch wlll
auLomaLlcally seL Lhe marglns of markeLers and dealers, and Lhe raLes charged by waLer LransporL operaLors, haulers and plpellne
concesslonalres: !"#$%&'&( 1haL such formula shall Lake effecL slmulLaneously wlLh Lhe effecLlvlLy of Lhe auLomaLlc oll prlclng formula. 1hereafLer, Lhe 8oard
shall seL Lhe sald marglns and raLes based on Lhe approved formula wlLhouL Lhe necesslLy for publlc noLlce and hearlng.
1he 8oard shall, on Lhe day of Lhe effecLlvlLy of Lhe aforesald formula, publlsh ln aL leasL Lwo (2) newspapers of general clrculaLlon Lhe mechanlcs of Lhe
formula for Lhe lnformaLlon of Lhe publlc.

!"#$%&' )*
+,-- .&'&/,-#%*01 $"#2&
2345678 9:; !"#$" &' ()** +,$,-)*#".&/; - lull deregulaLlon of Lhe lndusLry shall sLarL flve (3) monLhs followlng Lhe effecLlvlLy of Lhls AcL: !"#$%&'&( *#+'$'"( 1haL
when Lhe publlc lnLeresL so requlres, Lhe resldenL may acceleraLe Lhe sLarL of full deregulaLlon upon Lhe recommendaLlon of Lhe uCL and Lhe ueparLmenL of
llnance when Lhe prlces of crude oll and peLroleum producLs ln Lhe world markeL are decllnlng and Lhe value of Lhe peso ln relaLlon Lo Lhe uS dollar ls sLable,
Laklng lnLo accounL Lhe relevanL Lrends and prospecLs: !"#$%&'&( ,-".*'"( 1haL Lhe foregolng provlslons noLwlLhsLandlng, Lhe flve (3)-monLh 1ranslLlon hase
shall conLlnue Lo apply Lo LC, regular gasollne, and kerosene as soclally-senslLlve peLroleum producLs and sald peLroleum producLs shall be covered by Lhe
auLomaLlc prlclng mechanlsm durlng Lhe sald perlod.
upon Lhe lmplemenLaLlon of full deregulaLlon as provlded hereln, Lhe 1ranslLlon hase ls deemed LermlnaLed and Lhe followlng laws are repealed:
(a) 8epubllc AcL no. 6173, as amended,
(b) SecLlon 3 of LxecuLlve Crder no. 172, as amended,
(c) LeLLer of lnsLrucLlon no. 1431, daLed CcLober 13, 1984,
(d) LeLLer of lnsLrucLlon no. 1441, daLed november 13, 1984,
(e) LeLLer of lnsLrucLlon no. 1460, daLed May 9, 1983,
(f) resldenLlal uecree no. 1889, and
(g) resldenLlal uecree no. 1936, as amended by LxecuLlve Crder no. 137:
!"#$%&'&( *#+'$'"( 1haL ln case full deregulaLlon ls sLarLed by Lhe resldenL ln exerclse of Lhe auLhorlLy provlded ln Lhls SecLlon, Lhe foregolng laws shall
conLlnue Lo be ln force and effecL wlLh respecL Lo LC, regular gasollne and kerosene for Lhe resL of Lhe flve (3)-monLh perlod.

2345678 <=; 0)$.12.3".&/ &/ 4$.3./- &' 4.5,2 6#1; - SecLlon 3 of LxecuLlve Crder no. 172, ls hereby amended Lo read as follows:
"SLC. 3. /-"%0&%1.%#2( !#+'"0 32& 4-21.%#20 #, .*' 5#3"&. - 1he 8oard shall, upon proper noLlce and hearlng, flx and regulaLe Lhe raLe of schedule or prlces of
plped gas Lo be charged by duly franchlsed gas companles whlch dlsLrlbuLe gas by means of underground plpe sysLem."

!"#$%&' )**
+*1#- $'0)*2*012
2345678 <9; 74!( 8#*#/3,; - All ouLsLandlng clalms agalnsL CSl as of Lhe effecLlvlLy of Lhls AcL, sub[ecL Lo Lhe exlsLlng audlLlng rules and regulaLlons of Lhe
Commlsslon on AudlL (CCA), shall be consldered as accounLs payable of Lhe naLlonal CovernmenL. lor Lhls purpose, and any law Lo Lhe conLrary
noLwlLhsLandlng, Lhe relmbursemenL cerLlflcaLes lssued by Lhe uCL coverlng Lhe sald ouLsLandlng clalms shall be honored and accepLed by Lhe 8ureau of
CusLoms and Lhe 8ureau of lnLernal 8evenue as paymenL Lo Lhe exLenL of Len percenL (10) per paymenL of Lhe Larlff duLles and speclflc Laxes from Lhe
credlLor-clalmanLs agalnsL Lhe CSl unLll such clalms are seLLled ln full: !"#$%&'&( 1haL Lhe relmbursemenL cerLlflcaLes shall noL be Lransferable.

!"#$%&' ))* !"#$#%& ()*&#+ ,--./#"0* - ln compllance wlLh Lhe consLlLuLlonal mandaLe Lo encourage prlvaLe enLerprlses Lo broaden Lhelr base of ownershlp and ln
recognlLlon of Lhe vlLal role of oll ln Lhe naLlonal economy, any person or enLlLy engaged ln Lhe oll reflnery buslness shall make a publlc offerlng Lhrough Lhe
sLock exchange of aL leasL Len percenL (10) of lLs common sLock wlLhln a perlod of Lhree (3) years from Lhe effecLlvlLy of Lhls AcL or Lhe commencemenL of lLs
reflnery operaLlons: !"#$%&'&( 1haL no slngle person or enLlLy shall be allowed Lo own more Lhan flve percenL (3) of Lhe sLock offerlng: !"#$%&'&( *+",-'"( 1haL
any crude oll reflnlng company and any sLockholder Lhereof shall noL acqulre, dlrecLly or lndlrecLly, any share of sLock offered by any oLher crude oll reflnlng
company pursuanL Lo hls SecLlon: !"#$%&'&( *%./001( 1haL any such company whlch made Lhe requlslLe publlc offerlng before Lhe effecLlvlLy of Lhls AcL shall be
exempLed from Lhe requlremenL.

!"#$%&' )+* !12&.1."$#"0 3)&.4 %"5 3.0)&%$#6"4* - 1he uCL, ln coordlnaLlon wlLh Lhe 8oard, Lhe uLn8, ulA, ueparLmenL of Labor and LmploymenL (uCLL),
ueparLmenL of PealLh (uCP), uCl, u1l, naLlonal Lconomlc and uevelopmenL AuLhorlLy (nLuA) and 1L8C, shall formulaLe and lssue Lhe necessary
lmplemenLlng rules and regulaLlons wlLhln slxLy (60) days afLer Lhe effecLlvlLy of Lhls AcL.

!"#$%&' ),* (."%& 7%"+$#6"* - Any person who vlolaLes any of Lhe provlslons of Lhls AcL shall suffer Lhe penalLy of Lhree (3) monLhs Lo one (1) year
lmprlsonmenL and a flne ranglng from llfLy Lhousand pesos ( 30,000.00) Lo 1hree hundred Lhousand pesos ( 300,000.00).

!"#$%&' )-* ()*&#+ !"-6/1%$#6" 8%12%#0"* - 1he uCL, ln coordlnaLlon wlLh Lhe 8oard and Lhe hlllpplne lnformaLlon Agency (lA), shall underLake an
lnformaLlon campalgn Lo educaLe Lhe publlc on Lhe deregulaLlon program of Lhe lndusLry.

!"#$%&' ).* 9)50.$%/: ;22/62/#%$#6"4* - Such amounL as may be necessary Lo effecLlvely lmplemenL Lhls AcL shall be Laken by Lhe uCL form lLs annual
approprlaLlons, Lhe uCL' Speclal lund creaLed under SecLlon 8 of resldenLlal uecree no. 910, as amended, and such amounL allocaLed under SecLlon 10 of Lhls
AcL.

!"#$%&' )/* 7.2%/%*#&#$: 8&%)4.* - lf, for any reason, any secLlon or provlslon of Lhls AcL ls declared unconsLlLuLlonal or lnvalld, such parLs noL affecLed Lhereby
shall remaln ln full force and effecL.

!"#$%&' )0* 3.2.%&#"0 8&%)4.* - All laws, resldenLlal decrees, execuLlve orders, lssuances, rules and regulaLlons or parLs Lhereof, whlch are lnconslsLenL wlLh
Lhe provlslons of Lhls AcL are hereby repealed or lmmedlaLely modlfled accordlngly.

!"#$%&' )1* <--.+$#=#$:* - 1hls AcL shall Lake effecL upon lLs compleLe publlcaLlon ln aL leasL Lwo (2) naLlonal newspapers of general clrculaLlon.


234"45
!"!"# %& #'()* +) (,-& ./0123 "(# ./4524* 6 (,%'78') .994

Conslderlng LhaL oll ls noL endemlc Lo Lhls counLry, hlsLory shows LhaL Lhe governmenL has always been flndlng ways Lo allevlaLe Lhe oll lndusLry. 1he
governmenL creaLed laws accommodaLe Lhese lnnovaLlons ln Lhe oll lndusLry. Cne such law ls Lhe uownsLream Cll ueregulaLlon AcL of 1996 or 8A 8180. 1hls
law allows LhaL any person or enLlLy may lmporL or purchase any quanLlLy of crude oll and peLroleum producLs from a forelgn or domesLlc source, lease or
own and operaLe reflnerles and oLher downsLream oll faclllLles and markeL such crude oll or use Lhe same for hls own requlremenL," sub[ecL only Lo monlLorlng
by Lhe ueparLmenL of Lnergy. 1aLad assalls Lhe consLlLuLlonallLy of Lhe law. Pe clalms, among oLhers, LhaL Lhe lmposlLlon of dlfferenL Larlff raLes on lmporLed
Secretary of Energy
crude oll and lmporLed reflned peLroleum producLs vlolaLes Lhe equal proLecLlon clause. 1aLad conLends LhaL Lhe 3-7 Larlff dlfferenLlal unduly favors Lhe
Lhree exlsLlng oll reflnerles and dlscrlmlnaLes agalnsL prospecLlve lnvesLors ln Lhe downsLream oll lndusLry who do noL have Lhelr own reflnerles and wlll have
Lo source reflned peLroleum producLs from abroad.3 ls Lo be Laxed on unreflned crude producLs and 7 on reflned crude producLs.

!""#$% WheLher or noL 8A 8180 ls consLlLuLlonal.

'$()% 1he SC declared Lhe unconsLlLuLlonallLy of 8A 8180 because lL vlolaLed Sec 19 of ArL 12 of Lhe ConsLlLuLlon. lL vlolaLed LhaL provlslon because lL only
sLrengLhens ollgopoly whlch ls conLrary Lo free compeLlLlon. lL cannoL be denled LhaL our downsLream oll lndusLry ls operaLed and conLrolled by an ollgopoly, a
forelgn ollgopoly aL LhaL. eLron, Shell and CalLex sLand as Lhe only ma[or league players ln Lhe oll markeL. All oLher players belong Lo Lhe lllllpuLlan league. As
Lhe domlnanL players, eLron, Shell and CalLex boasL of exlsLlng reflnerles of varlous capaclLles. 1he Larlff dlfferenLlal of 4 Lherefore works Lo Lhelr lmmense
beneflL. ?eL, Lhls ls only one edge of Lhe Larlff dlfferenLlal. 1he oLher edge cuLs and cuLs deep ln Lhe hearL of Lhelr compeLlLors. lL erecLs a hlgh barrler Lo Lhe
enLry of new players. new players LhaL lnLend Lo equallze Lhe markeL power of eLron, Shell and CalLex by bulldlng reflnerles of Lhelr own wlll have Lo spend
bllllons of pesos. 1hose who wlll noL bulld reflnerles buL compeLe wlLh Lhem wlll suffer Lhe huge dlsadvanLage of lncreaslng Lhelr producL cosL by 4. 1hey wlll
be compeLlng on an uneven fleld. 1he argumenL LhaL Lhe 4 Larlff dlfferenLlal ls deslrable because lL wlll lnduce prospecLlve players Lo lnvesL ln reflnerles puLs
Lhe carL before Lhe horse. 1he flrsL need ls Lo aLLracL new players and Lhey cannoL be aLLracLed by burdenlng Lhem wlLh heavy dlslncenLlves. WlLhouL new
players belonglng Lo Lhe league of eLron, Shell and CalLex, compeLlLlon ln our downsLream oll lndusLry ls an ldle dream.
8A 8180 ls unconsLlLuLlonal on Lhe ground lnLer alla LhaL lL dlscrlmlnaLed agalnsL Lhe new players" lnsofar as lL placed Lhem aL a compeLlLlve dlsadvanLage vls-
a-vls Lhe esLabllshed oll companles by requlrlng Lhem Lo meeL cerLaln condlLlons already belng observed by Lhe laLLer.

"#$%&# '( )*)%+,&') -)%$),#$./ "$ 01( 234356/ 7 #8$&9 7::;

Cn 27 november 1990, Cory lssued LxecuLlve Crder 438 whlch lmposed, ln addlLlon Lo any oLher duLles, Laxes and charges lmposed by law on all arLlcles
lmporLed lnLo Lhe hlllpplnes, an addlLlonal duLy of 3 ad valorem. 1hls addlLlonal duLy was lmposed across Lhe board on all lmporLed arLlcles, lncludlng crude
oll and oLher oll producLs lmporLed lnLo Lhe hlllpplnes. ln 1991, LC 443 lncreased Lhe addlLlonal duLy Lo 9. ln Lhe same year, LC 473 was passed relnsLaLlng
Lhe prevlous 3 duLy excepL LhaL crude oll and oLher oll producLs conLlnued Lo be Laxed aL 9. Carcla, a represenLaLlve from 8aLaan, avers LhaL LC 473 and
478 are unconsLlLuLlonal for Lhey vlolaLe Sec 24 of ArL 6 of Lhe ConsLlLuLlon whlch provldes: " All approprlaLlon, revenue or Larlff bllls, bllls auLhorlzlng lncrease
of Lhe publlc debL, bllls of local appllcaLlon, and prlvaLe bllls shall orlglnaLe excluslvely ln Lhe Pouse of 8epresenLaLlves, buL Lhe SenaLe may propose or concur
wlLh amendmenLs." Pe conLends LhaL slnce Lhe ConsLlLuLlon vesLs Lhe auLhorlLy Lo enacL revenue bllls ln Congress, Lhe resldenL may noL assume such power
of lssulng LxecuLlve Crders nos. 473 and 478 whlch are ln Lhe naLure of revenue-generaLlng measures.

!""#$% WheLher or noL LC 473 and 478 are consLlLuLlonal.

'$()% under SecLlon 24, ArLlcle vl of Lhe ConsLlLuLlon, Lhe enacLmenL of approprlaLlon, revenue and Larlff bllls, llke all oLher bllls ls, of course, wlLhln Lhe
provlnce of Lhe LeglslaLlve raLher Lhan Lhe LxecuLlve ueparLmenL. lL does noL follow, however, LhaL Lherefore LxecuLlve Crders nos. 473 and 478, assumlng
Lhey may be characLerlzed as revenue measures, are prohlblLed Lo Lhe resldenL, LhaL Lhey musL be enacLed lnsLead by Lhe Congress of Lhe hlllpplnes. SecLlon
28(2) of ArLlcle vl of Lhe ConsLlLuLlon provldes as follows: (2) 1he Congress may, by law, auLhorlze Lhe resldenL Lo flx wlLhln speclfled llmlLs, and sub[ecL Lo
such llmlLaLlons and resLrlcLlons as lL may lmpose, Larlff raLes, lmporL and exporL quoLas, Lonnage and wharfage dues, and oLher duLles or lmposLs wlLhln Lhe
framework of Lhe naLlonal developmenL program of Lhe CovernmenL." 1here ls Lhus expllclL consLlLuLlonal permlsslon Lo Congress Lo auLhorlze Lhe resldenL
sub[ecL Lo such llmlLaLlons and resLrlcLlons as [Congress] may lmpose" Lo flx wlLhln speclflc llmlLs" Larlff raLes . . . and oLher duLles or lmposLs . . . ."