REQUISITES OF JUDICIAL REVIEW
14 There were glaring
ACTUAL CASE/CONTROVERSY
IMBONG VS OCHOA
DISSENTING OPINION
"The most important thing we decide
is what not to decide."
Brandeis, J.1
LEONEN, J.:
The Responsible Parenthood and Reproductive Health
Act of 2012 should not be declared unconstitutional in
whole or in any of its parts given the petitions filed in this
case.
None of the petitions properly present an "actual case or
controversy," which deserves the exercise of our
awesome power of judicial review.2 It is our duty not to
rule on the abstract and speculative issues barren of
actual facts.3 These consolidated petitions, which contain
bare allegations, do not provide the proper venue to
decide on fundamental issues. The law in question is
needed social legislation.
That we rule on these special civil actions for certiorari
and prohibition — which amounts to a pre-enforcement
free-wheeling facial review of the statute and the
implementing rules and regulations4 — is very bad
precedent. The issues are far from justiciable. Petitioners
claim in their class suits that they entirely represent a
whole religion,5 the Filipino nation6 and, worse, all the
unborn.7 The intervenors also claim the same
representation: Filipinos and Catholics.8 Many of the
petitions also sue the President of the Republic.9
We should apply our rules rigorously and dismiss these
cases. The transcendental importance of the issues they
want us to decide will be better served when we wait for
the proper cases with the proper parties suffering real,
actual or more imminent injury. There is no showing of an
injury so great and so imminent that we cannot wait for
these cases.
Claims relating to the beginning of life, the relationship of
conscientious objection and the right to religion, the
effects of contraception, and even the ponencia’s claim
that the family is put in danger if one spouse decides when
there is a disagreement between them are best decided
within their real contexts so that we will be able to narrowly
tailor the doctrines in our decision.10 The danger of ruling
on abstract cases is that we foreclose real litigation
between real parties.11 The danger of an advisory
opinion is that we are forced to substitute our own
imagination of the facts that can or will happen. In an
actual case, there is judicial proof of the real facts that
frame our discretion.
The law clearly adopts a policy against abortion and
prohibits abortifacients.12 The definition of abortifacients
is sufficiently broad to cover many moral convictions
relating to the beginning of life.13 We do not need to
decide on these issue barren of actual facts that can
sharpen factual and legal positions.
The court cannot make a declaration on the beginning of
life. Any declaration on this issue will be fraught with
contradictions. Even the Constitutional Commissioners
were not in full agreement; hence, the use of the word
"conception" rather than "fertilized ovum" in Article II,
Section 12 of the Constitution.
factual inaccuracies peddled during their discussion.15
Moreover, declaring the beginning of life complicates
future constitutional adjudication. This will have real
repercussions on, among others, acceptable medical
procedures for ectopic pregnancies,16 medical
complications as a result of pregnancy resulting from
sexual assaults,17 and on assisted reproductive
technologies.18
The petitions have failed to present clear cases when the
provisions for conscientious objection would truly amount
to a violation of religion. They have not distinguished the
relationship of conscience and specific religious
dogma.19 They have not established religious canon that
conflict with the general provision of Sections 7, 17 and
23 of the law. The comments in intervention20 in fact raise
serious questions regarding what could be acceptable
Catholic doctrine on some issues of contraception and
sex as only for procreation.
The majority has decided to nullify portions of the law on
the basis of inchoate Catholic doctrine without
considering that the law as phrased would be acceptable
to other faiths, consciences and beliefs. Due to the failure
of the petitioners to present actual cases, it cannot be
possible to see whether their religious objection can be
accommodated in the application and interpretation of the
law rather than nullify the provisions wholesale.
We should tread carefully when what is involved is a
religion that is not the minority. Invocations of religious
freedom can be a disguised way of imposing the dominant
faith on others. This is especially true in physician-patient
relationships. While the physician may have her or his
own religious beliefs, this should not improperly dictate on
the range of services that is wanted and needed by the
patient.21 Again, there are no actual cases in specific
contexts with clear religious beliefs pertaining to accepted
dogma of a religion established by the petitions. The
proposed declaration of unconstitutionality of portions of
Section 23 is premature and inadvisable. It also amounts
to a judicial amendment of the physician’s oath.
The law breaks the deadlock when there is disagreement
between the spouses as to whether to avail of a
reproductive health technology.22 The ponencia
proposes that this violates the right to family.23 This is
one conclusion. The other is that it allows the couple to
have a final decision and not continue with a perennial
conflict. The other possibility here is that the man, who
most often is not the one who avails of the reproductive
health technology, dictates on the woman. This will then
result in a violation of the requirement of fundamental
equality in Article II, Section 14 of the Constitution.24 The
majority, in refusing to acknowledge the autonomy of
individuals over their own bodies even in the context of
marriage, has just strengthened patriarchy and increased
the possibility for spousal abuse.
All the petitions are premature. At worse, the petitions
attempt to impose a moral or political belief upon the
others by tempting this court to use its power of judicial
review.
This court is not the venue to continue the brooding and
vociferous political debate that has already happened and
has resulted in legislation.25
Constitutional issues normally arise when the right and
obligations become doubtful as a result of the
1
implementation of the statute. This forum does not exist
to undermine the democratically deliberated results
coming from the Congress and approved by the
President. Again, there is no injury to a fundamental right
arising from concrete facts established with proof. Rather,
the pleadings raise grave moral and philosophical issues
founded on facts that have not yet happened. They are
the product of speculation by the petitioners.
To steeled advocates who have come to believe that their
advocacy is the one true moral truth, their repeated view
may seem to them as the only factual possibility. Rabid
advocacy of any view will be intolerant of the nuanced
reality that proceeds from conscious and deliberate
examination of facts.
This kind of advocacy should not sway us.
Our competence is to decide on legal principle only in
concrete controversies. We should jealously and
rigorously protect the principle of justiciability of
constitutional challenges. We should preserve our role
within the current constitutional order. We undermine the
legitimacy of this court when we participate in rulings in
the abstract because there will always be the strong
possibility that we will only tend to mirror our own personal
predilections. We should thus adopt a deferential judicial
temperament especially for social legislation.
This law should not be declared as unconstitutional, in
whole or in part, on the basis of the consolidated petitions.
The status quo ante order against the Responsible
Parenthood and Reproductive Health Act of 2012 or
Republic Act No. 10354 (RH Law) should be lifted
immediately.
There should be no further obstacle in having the entire
law fully implemented.
I statute is inconsistent with a provision of the Constitution,
No Actual Controversy,
"Facial Review" is Improper
It has never been the constitutional mandate of the
Supreme Court to answer all of life’s questions. It is
endowed instead with the solemn duty to determine when
it should decline to decide with finality questions that are
not legal and those that are theoretical and speculative.
This court’s duty includes its ability to stay its hand when
the issues presented are not justiciable.
The requirement in constitutional adjudication is that we
decide only when there is a "case or controversy."26 This
is clear in the second paragraph of Article VIII, Section 1
of the Constitution, thus:
Section 1. The judicial power shall be vested in one
Supreme Court and in such lower courts as may be
established by law.
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 jurisdiction on the part of any
branch or instrumentality of the Government. (Emphasis
supplied)
The requirement for a "case" or "controversy" locates the
judiciary in the scheme of our constitutional order. It
defines our role and distinguishes this institution from the
other constitutional organs.
The ponencia claims that there is an actual case and
controversy existing in the present controversy, and it is
ripe for determination.27 The ponente reasons that
"[c]onsidering that the RH Law and its implementing rules
have already taken effect, and considering that the
budgetary measures to carry out the law have already
been passed, it is evident that the subject petitions
present a justiciable controversy. As stated earlier, when
an action of the legislative branch is seriously alleged to
have infringed the Constitution, it not only becomes a
right, but also a duty of the Judiciary to [settle] the
dispute."28
I disagree.
An actual case or controversy is "one which involves a
conflict of legal rights, an assertion of opposite legal
claims susceptible of judicial resolution; the case must not
be moot or academic or based on extra-legal or other
similar considerations not cognizable by a court of
justice."29 To be justiciable, the issues presented must be
"‘definite and concrete, touching the legal relations of
parties having adverse legal interest;’ a real and
substantial controversy admitting of specific relief."30 The
term justiciability refers to the dual limitation of only
considering in an adversarial context the questions
presented before courts, and in the process, the courts’
duty to respect its co-equal branches of government’s
powers and prerogatives under the doctrine of separation
of powers.31
There is a case or controversy when there is a real conflict
of rights or duties arising from actual facts. These facts,
properly established in court through evidence or judicial
notice, provide the natural limitations upon judicial
interpretation of the statute. When it is claimed that a
the meaning of a constitutional provision will be narrowly
drawn.
Without the necessary findings of facts, this court is left to
speculate leaving justices to grapple within the limitations
of their own life experiences. This provides too much
leeway for the imposition of political standpoints or
personal predilections of the majority of this court. This is
not what the Constitution contemplates. Rigor in
determining whether controversies brought before us are
justiciable avoids the counter majoritarian difficulties
attributed to the judiciary.
Without the existence and proper proof of actual facts,
any review of the statute or its implementing rules will be
theoretical and abstract. Courts are not structured to
predict facts, acts or events that will still happen. Unlike
the legislature, we do not determine policy. We read law
only when we are convinced that there is enough proof of
the real acts or events that raise conflicts of legal rights or
duties. Unlike the executive, our participation comes in
after the law has been implemented. Verily, we also do
not determine how laws are to be implemented.
The existence of a law or its implementing orders or a
budget for its implementation is far from the requirement
that there are acts or events where concrete rights or
duties arise. The existence of rules do not substitute for
real facts.
Petitioners cite Province of North Cotabato v.
Government of the Republic of the Philippines Peace
2
Panel on Ancestral Domain (GRP)32 as basis for
asserting that this court can take cognizance of
constitutional cases without actual controversies. In that
case, this court was asked to rule on the validity of the
Memorandum of Agreement on the Ancestral Domain
(MOA-AD) between the GRP and the Moro Islamic
Liberation Front (MILF) which included provisions on the
definition of the "Bangsamoro" people; the "Bangsamoro
Juridical Entity" (BJE); territory of the Bangsamoro
homeland; the total production sharing between the
central government and the BJE relating to natural
resources; and "associative relationship" with the central
government.33
Even in that case, this court acknowledged the
requirement of an actual case or controversy in exercising
the power of judicial review.
The power of judicial review is limited to actual cases or
controversies. Courts decline to issue advisory opinions
or to resolve hypothetical or feigned problems, or mere
academic questions. The limitation of the power of judicial
review to actual cases and controversies defines the role
assigned to the judiciary in a tripartite allocation of power,
to assure that the courts will not intrude into areas
committed to the other branches of government.34
This court then ruled that the petitions were ripe for
adjudication because of: "[1] the failure of respondents to
consult the local government units or communities
affected constitutes a departure by respondents from their
mandate under E.O. No. 3; [2] respondents exceeded
their authority by the mere act of guaranteeing
amendments to the Constitution. Any alleged violation of
the Constitution by any branch of government is a proper
matter for judicial review."35 Citing David v. Macapagal-
Arroyo, this court allowed petitioners, petitioners-in-
intervention, and intervening respondents’ claims of locus
standi due to the paramount public interest or
transcendental importance of the issues involved.
The actual case in Province of North Cotabato was
triggered by the process invoked in the negotiation of the
agreement and the claim that it exceeded the authority of
the government panel in talks with the Moro Islamic
Liberation Front (MILF). Executive Order No. 3 was
already implemented by the acts of the negotiating panel.
The ponencia’s reading of Province of North Cotabato is
inaccurate. My esteemed colleague holds:
x x x Citing precedents, the Court ruled that the fact of the
law or act in question being not yet effective does not
negate ripeness. Concrete acts under a law are not
necessary to render the controversy ripe. Even a singular
violation of the Constitution and/or law is enough to
awaken judicial duty.
In this case, the Court is of the view that an actual case
or controversy exists and that the same is ripe for judicial
determination. Considering that the RH Law and its
implementing rules have already taken effect, and that the
budgetary measures to carry out the law have already
been passed, it is evident that the subject petitions
present a justiciable controversy. As stated earlier, when
an action of the legislative branch is seriously alleged to
have infringed the Constitution, it not only becomes a
right, but also a duty of the Judiciary to settle the
dispute.36 (Emphasis in the original)
Unlike Province of North Cotabato, there is yet no
implementation of the RH law. The waiver of justiciability
is the exception. It is not the general rule.37 Province of
North Cotabato involved a peculiar set of facts that
required this court to exercise its power of judicial review.
The respondents attempted to put the constitutional
question outside the court’s sphere of judicial review
through the performance of acts that rendered a ripening
case moot and academic.38
In Garcia v. Executive Secretary,39 this court was faced
with the issue of the constitutionality of Section 19 of
Republic Act No. 847940 entitled "An Act Deregulating
The Downstream Oil Industry And For Other Purposes."
This court held that there was no justiciable controversy
in the case as the issue raised went into the policy or
wisdom of the law, thus:
Stripped to its core, what petitioner Garcia raises as an
issue is the propriety of immediately and fully deregulating
the oil industry. Such determination essentially dwells on
the soundness or wisdom of the timing and manner of the
deregulation Congress wants to implement through R.A.
No. 8497. Quite clearly, the issue is not for us to resolve;
we cannot rule on when and to what extent deregulation
should take place without passing upon the wisdom of the
policy of deregulation that Congress has decided upon.
To use the words of Baker v. Carr, the ruling that petitioner
Garcia asks requires "an initial policy determination of a
kind clearly for non-judicial discretion"; the branch of
government that was given by the people the full
discretionary authority to formulate the policy is the
legislative department.
xxxx
Petitioner Garcia’s thesis readily reveals the political,
hence, non-justiciable, nature of his petition; the choice of
undertaking full or partial deregulation is not for this Court
to make.41
Then in Atty. Lozano v. Speaker Nograles,42 this court
reiterated that "[i]n our jurisdiction, the issue of ripeness
[which is an aspect of the case or controversy
requirement] is generally treated in terms of actual injury
to the plaintiff. Hence, a question is ripe for adjudication
when the act being challenged has had a direct adverse
effect on the individual challenging it x x x [or when] an
action has already been accomplished or performed by a
branch of government x x x."43
In Southern Hemisphere Engagement Network, Inc. v.
Anti-Terrorism Council,44 this court declined to rule on
the constitutionality of Republic Act No. 9372 or "An Act
to Secure the State and Protect Our People from
Terrorism," otherwise known as the Human Security Act
of 2007. Again, with respect to the requirement of the
existence of an actual case, this court held:
As early as Angara v. Electoral Commission, the Court
ruled that the power of judicial review is limited to actual
cases or controversies to be exercised after full
opportunity of argument by the parties. Any attempt at
abstraction could only lead to dialectics and barren legal
questions and to sterile conclusions unrelated to
actualities.
An actual case or controversy means an existing case or
controversy that is appropriate or ripe for determination,
not conjectural or anticipatory, lest the decision of the
court would amount to an advisory opinion.
Information Technology Foundation of the Philippines v.
COMELEC cannot be more emphatic:
3
"[C]ourts do not sit to adjudicate mere academic
questions to satisfy scholarly interest, however
intellectually challenging. The controversy must be
justiciable—definite and concrete, touching on the legal
relations of parties having adverse legal interests. In other
words, the pleadings must show an active antagonistic
assertion of a legal right, on the one hand, and a denial
thereof on the other hand; that is, it must concern a real
and not merely a theoretical question or issue. There
ought to be an actual and substantial controversy
admitting of specific relief through a decree conclusive in
nature, as distinguished from an opinion advising what the
law would be upon a hypothetical state of facts."
Thus, a petition to declare unconstitutional a law
converting the Municipality of Makati into a Highly
Urbanized City was held to be premature as it was tacked
on uncertain, contingent events. Similarly, a petition that
fails to allege that an application for a license to operate
a radio or television station has been denied or granted
by the authorities does not present a justiciable
controversy, and merely wheedles the Court to rule on a
hypothetical problem.
The Court dismissed the petition in Philippine Press
Institute v. Commission on Elections for failure to cite any
specific affirmative action of the Commission on Elections
to implement the assailed resolution. It refused, in Abbas
v. Commission on Elections, to rule on the religious
freedom claim of the therein petitioners based merely on
a perceived potential conflict between the provisions of
the Muslim Code and those of the national law, there
being no actual controversy between real litigants.
The list of cases denying claims resting on purely
hypothetical or anticipatory grounds goes on ad infinitum.
The Court is not unaware that a reasonable certainty of
the occurrence of a perceived threat to any constitutional
interest suffices to provide a basis for mounting a
constitutional challenge. This, however, is qualified by the
requirement that there must be sufficient facts to enable
the Court to intelligently adjudicate the issues.45
(Emphasis supplied)
Recently, this court in Corales v. Republic46 passed upon
the ripeness or prematurity of a petition for prohibition
assailing the Audit Observation Memorandum (AOM)
issued by the Provincial State Auditor of Laguna against
petitioner as Mayor. We again held that:
x x x this Court can hardly see any actual case or
controversy to warrant the exercise of its power of judicial
review. Settled is the rule that for the courts to exercise
the power of judicial review, the following must be extant:
(1) there must be an actual case calling for the exercise
of judicial power; (2) the question must be ripe for
adjudication; and (3) the person challenging must have
the "standing." An actual case or controversy involves a
conflict of legal rights, an assertion of opposite legal
claims, susceptible of judicial resolution as distinguished
from a mere hypothetical or abstract difference or dispute.
There must be a contrariety of legal rights that can be
interpreted and enforced on the basis of existing law and
jurisprudence. Closely related thereto is that the question
must be ripe for adjudication. A question is considered
ripe for adjudication when the act being challenged has
had a direct adverse effect on the individual challenging
it.
xxxx
The requisites of actual case and ripeness are absent in
the present case. To repeat, the AOM issued by Andal
merely requested petitioner Corales to comment/reply
thereto. Truly, the AOM already contained a
recommendation to issue a Notice of Disallowance;
however, no Notice of Disallowance was yet issued. More
so, there was no evidence to show that Andal had already
enforced against petitioner Corales the contents of the
AOM. x x x. The action taken by the petitioners to assail
the AOM was, indeed, premature and based entirely on
surmises, conjectures and speculations that petitioner
Corales would eventually be compelled to reimburse
petitioner Dr. Angeles’ salaries, should the audit
investigation confirm the irregularity of such
disbursements.47
The doctrinal character of the requirement of an actual
case may also be inferred from the tenor of the
reservations of several members of this court in Province
of North Cotabato.48
Then Justice Chico-Nazario, in voting to grant the motion
to dismiss of the Office of Solicitor General and to dismiss
the petitions, pointed out that:
The Court should not feel constrained to rule on the
Petitions at bar just because of the great public interest
these cases have generated. We are, after all, a court of
law, and not of public opinion. The power of judicial review
of this Court is for settling real and existent dispute, it is
not for allaying fears or addressing public clamor. In
acting on supposed abuses by other branches of
government, the Court must be careful that it is not
committing abuse itself by ignoring the fundamental
principles of constitutional law.
x x x. The Court must accord a co-equal branch of the
government nothing less than trust and the presumption
of good faith.
xxxx
Upon the Executive Department falls the indisputably
difficult responsibility of diffusing the highly volatile
situation in Mindanao resulting from the continued
clashes between the Philippine military and Muslim rebel
groups. In negotiating for peace, the Executive
Department should be given enough leeway and should
not be prevented from offering solutions which may be
beyond what the present Constitution allows, as long as
such solutions are agreed upon subject to the amendment
of the Constitution by completely legal means.49
(Emphasis supplied)
Justice Velasco in that case emphasized the need to be
vigilant in protecting the doctrine of separation of powers
enshrined in our Constitution, hence:
Over and above the foregoing considerations, however,
is the matter of separation of powers which would likely
be disturbed should the Court meander into alien territory
of the executive and dictate how the final shape of the
peace agreement with the MILF should look like. The
system of separation of powers contemplates the division
of the functions of government into its three (3) branches
x x x. Consequent to the actual delineation of power, each
branch of government is entitled to be left alone to
discharge its duties as it sees fit. Being one such branch,
the judiciary, as Justice Laurel asserted in Planas v. Gil,
"will neither direct nor restrain executive [or legislative
action]." Expressed in another perspective, the system of
4
separated powers is designed to restrain one branch from
inappropriate interference in the business, or intruding
upon the central prerogatives, of another branch; it is a
blend of courtesy and caution, "a self-executing
safeguard against the encroachment or aggrandizement
of one branch at the expense of the other." x x x. The
sheer absurdity of the situation where the hands of
executive officials, in their quest for a lasting and
honorable peace, are sought to be tied lest they agree to
something irreconcilable with the Constitution, should not
be lost on the Court.
Under our constitutional set up, there cannot be any
serious dispute that the maintenance of the peace,
insuring domestic tranquility and the suppression of
violence are the domain and responsibility of the
executive. Now then, if it be important to restrict the great
departments of government to the exercise of their
appointed powers, it follows, as a logical corollary, equally
important, that one branch should be left completely
independent of the others, independent not in the sense
that the three shall not cooperate in the common end of
carrying into effect the purposes of the constitution, but in
the sense that the acts of each shall never be controlled
by or subjected to the influence of either of the
branches.50
Eloquently, Justice Brion in his dissenting opinion in
Province of North Cotabato asserted:
x x x. Where policy is involved, we are bound by our
constitutional duties to leave the question for
determination by those duly designated by the
Constitution—the Executive, Congress, or the people in
their sovereign capacity.
In the present case, the peace and order problems of
Mindanao are essentially matters for the Executive to
address, with possible participation from Congress and
the sovereign people as higher levels of policy action
arise. Its search for solutions, in the course of several
presidencies, has led the Executive to the peace
settlement process. As has been pointed out repetitively
in the pleadings and the oral arguments, the latest move
in the Executive’s quest for peace—the MOA-AD—would
have not been a good deal for the country if it had
materialized. This Court, however, seasonably intervened
and aborted the planned signing of the agreement. The
Executive, for its part, found it wise and appropriate to
fully heed the signals from our initial action and from the
public outcry the MOA-AD generated; it backtracked at
the earliest opportunity in a manner consistent with its
efforts to avoid or minimize bloodshed while preserving
the peace process. At the moment, the peace and order
problem is still with the Executive where the matter should
be; the initiative still lies with that branch of government.
The Court’s role, under the constitutional scheme that we
are sworn to uphold, is to allow the initiative to be where
the Constitution says it should be. We cannot and should
not interfere unless our action is unavoidably necessary
because the Executive is acting beyond what is allowable,
or because it has failed to act in the way it should act,
under the Constitution and our laws.
xxxx
Rather than complicate the issues further with judicial
pronouncements that may have unforeseen or
unforeseeable effects on the present fighting and on the
solutions already being applied, this Court should
exercise restraint as the fears immediately generated by
a signed and concluded MOA-AD have been addressed
and essentially laid to rest. Thus, rather than pro-actively
act on areas that now are more executive than judicial, we
should act with calibrated restraint along the lines dictated
by the constitutional delineation of powers. Doing so
cannot be equated to the failure of this Court to act as its
judicial duty requires; as I mentioned earlier, we have
judicially addressed the concerns posed with positive
effects and we shall not hesitate to judicially act in the
future, as may be necessary, to ensure that the integrity
of our constitutional and statutory rules and standards are
not compromised. If we exercise restraint at all, it is
because the best interests of the nation and our need to
show national solidarity at this point so require, in order
that the branch of government in the best position to act
can proceed to act.
xxxx
x x x. We can effectively move as we have shown in this
MOA-AD affair, but let this move be at the proper time and
while we ourselves observe the limitations the
Constitution commonly impose on all branches of
government in delineating their respective roles.51
(Emphasis supplied)
It is true that the present Constitution grants this court with
the exercise of judicial review when the case involves the
determination of "grave abuse of discretion amounting to
lack or excess of jurisdiction on the part of any branch or
instrumentality of the Government."52 This new feature of
the 1987 Constitution affects our political question
doctrine. It does not do away with the requirement of an
actual case. The requirement of an actual case is
fundamental to the nature of the judiciary.
No less than Justice Vicente V. Mendoza implied that the
rigorous requirement of an actual case or controversy is
determinative of the nature of the judiciary. Thus:
[i]nsistence on the existence of a case or controversy
before the judiciary undertakes a review of legislation
gives it the opportunity, denied to the legislature, of seeing
the actual operation of the statute as it is applied to actual
facts and thus enables to it to reach sounder judgment.53
In the recent case of Belgica, et al. v. Executive Secretary,
we pointed out:54
[b]asic in litigation raising constitutional issues is the
requirement that there must be an actual case or
controversy. This Court cannot render an advisory
opinion. We assume that the Constitution binds all other
constitutional departments, instrumentalities, and organs.
We are aware that in the exercise of their various powers,
they do interpret the text of the Constitution in the light of
contemporary needs that they should address. A policy
that reduces this Court to an adviser for official acts by the
other departments that have not yet been done would
unnecessarily tax our resources. It is inconsistent with our
role as final arbiter and adjudicator and weakens the
entire system of the Rule of Law. Our power of judicial
review is a duty to make a final and binding construction
of law. This power should generally be reserved when the
departments have exhausted any and all acts that would
remedy any perceived violation of right. The rationale that
defines the extent of our doctrines laying down exceptions
to our rules on justiciability are clear: Not only should the
pleadings show a convincing violation of a right, but the
impact should be shown to be so grave, imminent, and
irreparable that any delayed exercise of judicial review or
deference would undermine fundamental principles that
5
should be enjoyed by the party complaining or the
constituents that they legitimately represent.
The requirement of an "actual case," thus, means that the
case before this Court "involves a conflict of legal rights,
an assertion of opposite legal claims susceptible of
judicial resolution;
the case must not be moot or academic based on extra-
legal or other similar considerations not cognizable by a
court of justice." Furthermore, "the controversy needs to
be definite and concrete, bearing upon the legal relations
of parties who are pitted against each other due to their
adverse legal interests." Thus, the adverse position of the
parties must be sufficient enough for the case to be
pleaded and for this Court to be able to provide the parties
the proper relief/s prayed for.
The requirement of an ‘actual case’ will ensure that this
Court will not issue advisory opinions. It prevents us from
using the immense power of judicial review absent a party
that can sufficiently argue from a standpoint with real and
substantial interests.55
Regretfully, the ponencia takes inconsistent positions as
to whether the petitions do allege actual cases. On the
issue of the violation of the right to health under Section 9
of the law,56 he correctly held that the constitutional
challenge is premature:
x x x not a single contraceptive has yet been submitted to
the FDA pursuant [to the] RH Law. It [behooves] the Court
to await its determination which drugs or devices are
declared by the FDA as safe, it being the agency tasked
to ensure that food and medicines available to the public
are safe for public consumption. x x x Indeed, the various
kinds of contraceptives must first be measured up to the
constitutional yardstick x x x to be determined as the case
presents itself.57 (Emphasis in the original)
Moreover, the ponencia also correctly held that a
discussion on the constitutionality of Section 14 of the law,
pertaining to the teaching of Age- and Development-
Appropriate Reproductive Health Education,58 is not yet
ripe for determination:
x x x any attack on the validity of Section 14 of the RH
Law is premature, as the Department of Education,
Culture and Sports have yet to formulate any curriculum
on age-appropriate reproductive health education. At this
point, one can only speculate [on the] contents, manner
and medium of instruction that would be used to educate
the adolescents and whether [these] would contradict the
religious beliefs of petitioners, and validate their
apprehensions. x x x.
xxxx
While the Court notes the possibility that educators could
raise their objection to their participation in the
reproductive health education program provided under
Section 14 of the RH Law on the ground that the same
violates their religious beliefs, the Court reserves its
judgment should an actual case be filed before it.59
(Emphasis in the original)
Unfortunately, the ponencia failed to discuss how several
provisions of the RH Law became vulnerable to a facial
attack, whereas other provisions must await an actual
case or controversy to pass upon its constitutionality. The
ponencia explained that the:
x x x foregoing petitions have seriously alleged that the
constitutional human right to life, speech and religion and
other fundamental rights mentioned above have been
violated by the assailed legislation, the Court has
authority to take cognizance of these kindred petitions
and determine if the RH Law can indeed pass
constitutional scrutiny.60
I restate, for purposes of emphasis, parts of my
disquisition on facial challenges in my dissenting and
concurring opinion in Disini v. Secretary of Justice.61
After all, the challenges to this present law and the
Cybercrime Prevention Act of 2012 are the public’s
reaction to the increasingly liberal but disturbing treatment
that we have given on the issue of rigorous analysis for
the justiciability of controversies brought before us.
The invalidation of the statute is either "on its face" or "as
applied." The only instance when a facial review of the law
is not only allowed but also essential is "when the
provisions in question are so broad that there is a clear
and imminent threat that actually operates or it can be
used as a prior restraint of speech."62
In Cruz v. Secretary of Environment and Natural
Resources,63 Justice Vicente V. Mendoza explained the
difference of an "as applied" challenge from an "on its
face" challenge:
The only instance where a facial challenge to a statute is
allowed is when it operates in the area of freedom of
expression. In such instance, the overbreadth doctrine
permits a party to challenge the validity of a statute even
though as applied to him it is not unconstitutional but it
might be if applied to others not before the Court whose
activities are constitutionally protected. Invalidation of the
statute "on its face" rather than "as applied" is permitted
in the interest of preventing a "chilling" effect on freedom
of expression. But in other cases, even if it is found that a
provision of a statute is unconstitutional, courts will decree
only partial invalidity unless the invalid portion is so far
inseparable from the rest of the statute that a declaration
of partial invalidity is not possible.64 (Emphasis supplied)
Subsequently, in Estrada v. Sandiganbayan,65 Justice
Mendoza culled a more extensive rule regarding facial or
"on its face" challenges, thus:
[a] facial challenge is allowed to be made to a vague
statute and to one which is overbroad because of possible
"chilling effect" upon protected speech. The theory is that
"[w]hen statutes regulate or proscribe speech and no
readily apparent construction suggests itself as a vehicle
for rehabilitating the statutes in a single prosecution, the
transcendent value to all society of constitutionally
protected expression is deemed to justify allowing attacks
on overly broad statutes with no requirement that the
person making the attack demonstrate that his own
conduct could not be regulated by a statute drawn with
narrow specificity." The possible harm to society in
permitting some unprotected speech to go unpunished is
outweighed by the possibility that the protected speech of
others may be deterred and perceived grievances left to
fester because of possible inhibitory effects of overly
broad statutes.
This rationale does not apply to penal statutes. Criminal
statutes have general in terrorem effect resulting from
their very existence, and, if facial challenge is allowed for
this reason alone, the State may well be prevented from
enacting laws against socially harmful conduct. In the
6
area of criminal law, the law cannot take chances as in
the area of free speech.
The overbreadth and vagueness doctrines then have
special application only to free speech cases. They are
inapt for testing the validity of penal statutes. As the U.S.
Supreme Court put it, in an opinion by Chief Justice
Rehnquist, "we have not recognized an ‘overbreadth’
doctrine outside the limited context of the First
Amendment." In Broadrick v. Oklahoma, the Court ruled
that "claims of facial overbreadth have been entertained
in cases involving statutes which, by their terms, seek to
regulate only spoken words" and, again, that "overbreadth
claims, if entertained at all, have been curtailed when
invoked against ordinary criminal laws that are sought to
be applied to protected conduct." For this reason, it has
been held that "a facial challenge to a legislative Act is …
the most difficult challenge to mount successfully, since
the challenger must establish that no set of circumstances
exists under which the Act would be valid." x x x.
In sum, the doctrines of strict scrutiny, overbreadth, and
vagueness are analytical tools developed for testing "on
their faces" statutes in free speech cases or, as they are
called in American law, First Amendment cases. They
cannot be made to do service when what is involved is a
criminal statute. With respect to such statute, the
established rule is that "one to whom application of a
statute is constitutional will not be heard to attack the
statute on the ground that impliedly it might also be taken
as applying to other persons or other situations in which
its application might be unconstitutional." x x x.66
(Emphasis supplied)
Similarly, this court in Prof. David v. Pres. Macapagal-
Arroyo67 laid down guides when a facial challenge may
be properly brought before this court, thus:
First and foremost, the overbreadth doctrine is an
analytical tool developed for testing "on their faces"
statutes in free speech cases, also known under the
American Law as First Amendment cases.
xxxx
Thus, claims of facial overbreadth are entertained in
cases involving statutes which, by their terms, seek to
regulate only "spoken words" and again, that
"overbreadth claims, if entertained at all, have been
curtailed when invoked against ordinary criminal laws that
are sought to be applied to protected conduct." Here, the
incontrovertible fact remains that PP 1017 pertains to a
spectrum of conduct, not free speech, which is manifestly
subject to state regulation.
Second, facial invalidation of laws is considered as
"manifestly strong medicine," to be used "sparingly and
only as a last resort," and is "generally disfavored;" The
reason for this is obvious. Embedded in the traditional
rules governing constitutional adjudication is the principle
that a person to whom a law may be applied will not be
heard to challenge a law on the ground that it may
conceivably be applied unconstitutionally to others, i.e., in
other situations not before the Court. A writer and scholar
in Constitutional Law explains further:
The most distinctive feature of the overbreadth technique
is that it marks an exception to some of the usual rules of
constitutional litigation. Ordinarily, a particular litigant
claims that a statute is unconstitutional as applied to him
or her; if the litigant prevails, the courts carve away the
unconstitutional aspects of the law by invalidating its
improper applications on a case to case basis. Moreover,
challengers to a law are not permitted to raise the rights
of third parties and can only assert their own interests. In
overbreadth analysis, those rules give way; challenges
are permitted to raise the rights of third parties; and the
court invalidates the entire statute "on its face," not merely
"as applied for" so that the overbroad law becomes
unenforceable until a properly authorized court construes
it more narrowly. The factor that motivates courts to
depart from the normal adjudicatory rules is the concern
with the "chilling;" deterrent effect of the overbroad statute
on third parties not courageous enough to bring suit. The
Court assumes that an overbroad law’s "very existence
may cause others not before the court to refrain from
constitutionally protected speech or expression." An
overbreadth ruling is designed to remove that deterrent
effect on the speech of those third parties.
In other words, a facial challenge using the overbreadth
doctrine will require the Court to examine PP 1017 and
pinpoint its flaws and defects, not on the basis of its actual
operation to petitioners, but on the assumption or
prediction that its very existence may cause others not
before the Court to refrain from constitutionally protected
speech or expression. In Younger v. Harris, it was held
that:
[T]he task of analyzing a proposed statute, pinpointing its
deficiencies, and requiring correction of these
deficiencies before the statute is put into effect, is rarely if
ever an appropriate task for the judiciary. The
combination of the relative remoteness of the controversy,
the impact on the legislative process of the relief sought,
and above all the speculative and amorphous nature of
the required line-by-line analysis of detailed
statutes,...ordinarily results in a kind of case that is wholly
unsatisfactory for deciding constitutional questions,
whichever way they might be decided.
And third, a facial challenge on the ground of overbreadth
is the most difficult challenge to mount successfully, since
the challenger must establish that there can be no
instance when the assailed law may be valid. Here,
petitioners did not even attempt to show whether this
situation exists.68 (Emphasis in the original)
A similar view was adopted by this court in Romualdez v.
Hon. Sandiganbayan69 and Spouses Romualdez v.
Commission on Elections.70 Unfortunately, in resolving
the motion for reconsideration in Spouses Romualdez v.
Commission on Elections,71 this court seemed to have
expanded the scope of the application of facial
challenges. Hence:
x x x. The rule established in our jurisdiction is, only
statutes on free speech, religious freedom, and other
fundamental rights may be facially challenged. Under no
case may ordinary penal statutes be subjected to a facial
challenge.72
However, the basic rule was again restated in Southern
Hemisphere Engagement Network, Inc. v. Anti-Terrorism
Council:73
Distinguished from an as-applied challenge which
considers only extant facts affecting real litigants, a facial
invalidation is an examination of the entire law,
pinpointing its flaws and defects, not only on the basis of
its actual operation to the parties, but also on the
assumption or prediction that its very existence may
cause others not before the court to refrain from
constitutionally protected speech or activities.
7

Justice Mendoza accurately phrased the subtitle in his
concurring opinion that the vagueness and overbreadth
doctrines, as grounds for a facial challenge, are not
applicable to penal laws.
A litigant cannot thus successfully mount a facial
challenge against a criminal statute on either vagueness
or overbreadth grounds.
The allowance of a facial challenge in free speech cases
is justified by the aim to avert the "chilling effect" on
protected speech, the exercise of which should not at all
times be abridged.
As reflected earlier, this rationale is inapplicable to plain
penal statutes that generally bear an "in terrorem effect"
in deterring socially harmful conduct. In fact, the
legislature may even forbid and penalize acts formerly
considered innocent and lawful, so long as it refrains from
diminishing or dissuading the exercise of constitutionally
protected rights.
The Court reiterated that there are "critical limitations by
which a criminal statute may be challenged" and
"underscored that an ‘on-its-face’ invalidation of penal
statutes x x x may not be allowed."
[T]he rule established in our jurisdiction is, only statutes
on free speech, religious freedom, and other fundamental
rights may be facially challenged. Under no case may
ordinary penal statutes be subjected to a facial challenge.
The rationale is obvious. If a facial challenge to a penal
statute is permitted, the prosecution of crimes may be
hampered. No prosecution would be possible. A strong
criticism against employing a facial challenge in the case
of penal statutes, if the same is allowed, would effectively
go against the grain of the doctrinal requirement of an
existing and concrete controversy before judicial power
may be appropriately exercised.
A facial challenge against a penal statute is, at best,
amorphous and speculative. It would, essentially, force
the court to consider third parties who are not before it. As
I have said in my opposition to the allowance of a facial
challenge to attack penal statutes, such a test will impair
the State’s ability to deal with crime. If warranted, there
would be nothing that can hinder an accused from
defeating the State’s power to prosecute on a mere
showing that, as applied to third parties, the penal statute
is vague or overbroad, notwithstanding that the law is
clear as applied to him.
It is settled, on the other hand, that the application of the
overbreadth doctrine is limited to a facial kind of challenge
and, owing to the given rationale of a facial challenge,
applicable only to free speech cases.
By its nature, the overbreadth doctrine has to necessarily
apply a facial type of invalidation in order to plot areas of
protected speech, inevitably almost always under
situations not before the court, that are impermissibly
swept by the substantially overbroad regulation.
Otherwise stated, a statute cannot be properly analyzed
for being substantially overbroad if the court confines itself
only to facts as applied to the litigants.
xxxx
In restricting the overbreadth doctrine to free speech
claims, the Court, in at least two cases, observed that the
US Supreme Court has not recognized an overbreadth
doctrine outside the limited context of the First
Amendment, and that claims of facial overbreadth have
been entertained in cases involving statutes which, by
their terms, seek to regulate only spoken words. In
Virginia v. Hicks, it was held that rarely, if ever, will an
overbreadth challenge succeed against a law or
regulation that is not specifically addressed to speech or
speech-related conduct. Attacks on overly broad statutes
are justified by the "transcendent value to all society of
constitutionally protected expression."74 (Emphasis and
underscoring in the original)
The prevailing doctrine today is that:
a facial challenge only applies to cases where the free
speech and its cognates are asserted before the court.
While as a general rule penal statutes cannot be
subjected to facial attacks, a provision in a statute can be
struck down as unconstitutional when there is a clear
showing that there is an imminent possibility that its broad
language will allow ordinary law enforcement to cause
prior restraints of speech and the value of that speech is
such that its absence will be socially irreparable.75
Broken down into its elements, a facial review should only
be allowed when:
First, the ground for the challenge of the provision in the
statute is that it violates freedom of expression or any of
its cognates;
Second, the language in the statute is impermissibly
vague;
Third, the vagueness in the text of the statute in question
allows for an interpretation that will allow prior restraints;
Fourth, the "chilling effect" is not simply because the
provision is found in a penal statute but because there can
be a clear showing that there are special circumstances
which show the imminence that the provision will be
invoked by law enforcers;
Fifth, the application of the provision in question will entail
prior restraints; and
Sixth, the value of the speech that will be restrained is
such that its absence will be socially irreparable. This will
necessarily mean balancing between the state interests
protected by the regulation and the value of the speech
excluded from society.76
Facial challenges can only be raised on the basis of
overbreadth and not on vagueness. Southern
Hemisphere demonstrated how vagueness relates to
violations of due process rights, whereas facial
challenges are raised on the basis of overbreadth and
limited to the realm of freedom of expression.
None of these petitions justify a facial review of this social
legislation. The free exercise of one’s religion may be a
cognate of the freedom of expression. However, the
petitions have not properly alleged the religion, the
religious dogma, the actual application of the religious
dogma where a repugnancy can be shown. They have
also failed to demonstrate that the violation of the
amorphous religious dogmas that they imagine should
result in the invalidation of statutory text rather than simply
an adjustment in its interpretation and in its application.
II
8
No Locus Standi
Besides, the consolidated cases are improper class suits
that should be dismissed outright.
A class suit is allowed under the rules77 if those who
instituted the action are found to be sufficiently numerous
and representative of the interests of all those they seek
to represent. They must be so numerous that it would be
impractical to bring them all to court or join them as
parties. Lastly, a common interest in the controversy
raised must be clearly established.78
These requirements afford protection for all those
represented in the class suit considering that this court’s
ruling will be binding on all of them. We should be
especially cautious when the class represented by a few
in an alleged class suit is the "entire Filipino Nation" or all
the adherents of a particular religion. This court must be
convinced that the interest is so common that there can
be no difference in the positions and points of view of all
that belong to that class. Anything less than this standard
will be an implied acceptance that in this important
adjudication of alleged constitutional rights, the views of a
few can be imposed on the many.
In the 1908 case of Ibañes v. Roman Catholic Church,79
13 plaintiffs filed the complaint for themselves and on
behalf of the other inhabitants of the town of Ternate
against the Roman Catholic Church for the proprietorship
of an image of the Holy Child.80 This court held that the
action could not be maintained.
It sufficiently appears from the record in this case that it is
a controversy between the Roman Catholic Church on
one side and the Independent Filipino Church on the
other. That it is the purpose of the plaintiffs, if they secure
possession of the image, to place it in the chapel of the
Independent Church is also very clear. What number of
the inhabitants of the town (2,460 according to the
census) are members of the Roman Catholic Church and
what part are members of the Independent Filipino
Church does not appear. But it is very apparent that many
of the inhabitants are opposed to the transfer of the image
from the Roman Catholic Church. Under the
circumstances, the thirteen plaintiffs do not fairly
represent all of the inhabitants of the town. Their interest
and the interests of some of the others are diametrically
opposed. For this reason this action can not be
maintained.81 (Emphasis supplied)
In the 1974 case of Mathay v. Consolidated Bank and
Trust Co.,82 this court affirmed the dismissal of a
complaint captioned as a class suit for failure to comply
with the requisite that the parties who filed the class suit
must be sufficiently numerous and representative:
The complaint in the instant case explicitly declared that
the plaintiffs-appellants instituted the "present class suit
under Section 12, Rule 3, of the Rules of Court in behalf
of CMI subscribing stockholders" but did not state the
number of said CMI subscribing stockholders so that the
trial court could not infer, much less make sure as
explicitly required by the statutory provision, that the
parties actually before it were sufficiently numerous and
representative in order that all interests concerned might
be fully protected, and that it was impracticable to bring
such a large number of parties before the court.
xxxx
Appellants, furthermore, insisted that insufficiency of
number in a class suit was not a ground for dismissal of
one action. This Court has, however, said that where it
appeared that no sufficient representative parties had
been joined, the dismissal by the trial court of the action,
despite the contention by plaintiffs that it was a class suit,
was correct.83 (Emphasis supplied)
In Re: Request of the Heirs of the Passengers of Doña
Paz,84 a class suit was filed by 27 named plaintiffs on
behalf and in representation of "the approximately 4,000
persons x x x (who also) are all close relatives and legal
heirs of the passengers of the Doña Paz."85 This court
distinguished class suits86 from permissive joinder of
parties:87
x x x. What makes the situation a proper case for a class
suit is the circumstance that there is only one right or
cause of action pertaining or belonging in common to
many persons, not separately or severally to distinct
individuals.
xxxx
The other factor that serves to distinguish the rule on
class suits from that of permissive joinder of parties is, of
course, the numerousness of parties involved in the
former. The rule is that for a class suit to be allowed, it is
needful inter alia that the parties be so numerous that it
would be impracticable to bring them all before the
court.88
Finding that the case was improperly brought as a class
suit, this court concluded that "it follows that the action
may not be maintained by a representative few in behalf
of all the others."89 Consequently, this court denied the
authority to litigate in the form of a class suit.90
This ruling was again emphasized in Bulig-Bulig Kita
Kamag-anak Association v. Sulpicio Lines, Inc.,91
making the ratio decidendi in Re: Request of the Heirs of
the Passengers of Doña Paz binding precedent.92 These
cases have been cited in a more recent jurisprudence in
its discussion on the need to sufficiently represent all
interests for a class suit to prosper.93
MVRS Publications, Inc. et al. v. Islamic Da’wah Council
of the Philippines, Inc. et al.94 emphasized how adequacy
of representation in a class suit is important in fully
protecting the interests of those concerned:
In any case, respondents’ lack of cause of action cannot
be cured by the filing of a class suit. As correctly pointed
out by Mr. Justice Jose C. Vitug during the deliberations,
"an element of a class suit is the adequacy of
representation. In determining the question of fair and
adequate representation of members of a class, the court
must consider (a) whether the interest of the named party
is coextensive with the interest of the other members of
the class; (b) the proportion of those made parties as it so
bears to the total membership of the class; and, (c) any
other factor bearing on the ability of the named party to
speak for the rest of the class.
The rules require that courts must make sure that the
persons intervening should be sufficiently numerous to
fully protect the interests of all concerned. In the present
controversy, Islamic Da'wah Council of the Philippines,
Inc., seeks in effect to assert the interests not only of the
Muslims in the Philippines but of the whole Muslim world
as well. Private respondents obviously lack the sufficiency
of numbers to represent such a global group; neither have
9
they been able to demonstrate the identity of their
interests with those they seek to represent. Unless it can
be shown that there can be a safe guaranty that those
absent will be adequately represented by those present,
a class suit, given its magnitude in this instance, would be
unavailing.95
Class suits require that there is a possibility that those
represented can affirm that their interests are properly
raised in a class suit. The general rule must be that they
be real and existing. In constitutional adjudication, this
court must approach class suits with caution; otherwise,
future generations or an amorphous class will be bound
by a ruling which they did not participate in.
Not all these elements for a proper class suit are present
in the petitions filed in these cases.
Petitioners James M. Imbong and Lovely-Ann C. Imbong,
for themselves and in behalf of their minor children, Lucia
Carlos Imbong and Bernadette Carlos Imbong, and
Magnificat Child Development Center, Inc.96 filed their
petition "as parents and as a class suit in representation
of other parents and individuals similarly situated."97
They alleged that they are "Catholics who have deeply-
held religious beliefs upon which Faith their conscience is
rooted against complying with the mandates of the
Act."98
Four persons and a juridical entity cannot be considered
as sufficiently numerous and representative of the
interests of "all other parents and individuals similarly
situated."
Petitioners Alliance for the Family Foundation, Inc. (ALFI),
represented by its President, Maria Concepcion S.
Noche, Spouses Reynaldo S. Luistro & Rosie B. Luistro,
et al.99 invoked Oposa v. Factoran, Jr. in filing their
petition "on behalf of all generations of Filipinos yet
unborn, who are in danger of being deprived of the right
to life by R.A. No. 10354."100
The required common interest in the controversy can
neither be determined nor proven in this case if those to
be represented are yet to be born.
It is true that in Oposa v. Factoran, Jr.,101
intergenerational suits were introduced in our jurisdiction.
However, this case must not be abused out of its context.
Oposa is a novel case involving an environmental class
suit. This environmental case involved minor petitioners
who filed a complaint for the cancellation of all existing
timber license agreements in the country. They were
allowed to sue on behalf of future generations on the
ground of "intergenerational responsibility," in relation to
the constitutional right to a balanced and healthful
ecology.102 The state of our ecology will certainly affect
future generations regardless of ideology, philosophy or
standpoints.
On the other hand, those who will only be born in the
future may have different views regarding the various
policy approaches on responsible parenthood and
reproductive health. Hence, the commonality of the
interest that will justify the presumption that the legal
positions will be the same is not present.
In its petition, Task Force for Family and Life Visayas,
Inc.103 alleged that it is "an association of men and
women who have committed themselves to the protection
of family and life, sanctity of marriage x x x."104 Its
members are "Roman Catholics by faith" and are "spread
throughout the Visayan region."105 The petitioners
collectively seek relief "from the impending threat against
their children, their respective families and the entire
Filipino nation, their religious freedom and other
constitutional rights they foresee and make known in this
petition."106
Petitioners, by no stretch of the imagination, cannot be
representative of the interests of "the entire Filipino
nation." Not all Filipinos are Roman Catholics. Not all
Filipinos are from the Visayas. Certainly not all Filipinos
have a common interest that will lead to a common point
of view on the constitutionality of the various provisions of
the RH law.
Serve Life Cagayan de Oro City, Inc., represented by Dr.
Nestor B. Lumicao, M.D. as President and in his personal
capacity, Rosevale Foundation, Inc., represented by Dr.
Rodrigo M. Alenton, M.D. as member of the school board
and in his personal capacity, Rosemarie R. Alenton,
Imelda G. Ibarra, CPA, Lovenia P. Naces, Ph.D., Anthony
G. Nagac, Earl Anthony C. Gambe, and Marlon I. Yap
also filed a petition consolidated with these cases.107
The individual petitioners alleged they are medical
practitioners, members of the bar, educators, and various
professionals who filed this petition "as parents and as a
class suit in representation of other parents and
individuals similarly situated."108 They are "devout and
practicing Catholics whose religious beliefs find the
mandatory provisions of the RH law obnoxious and
unconscionable."109
The basis for representing Catholics because their
religious beliefs find the RH law obnoxious and
unconscionable is not shared by all Catholics. Again, the
class is improperly defined and could not withstand
judicial scrutiny. Their views may not be representative of
the entire class they seek to represent.
Spouses Francisco S. Tatad and Maria Fenny C. Tatad
and Alan F. Paguia alleged that they are representing,
themselves, their posterity, and the rest of Filipino
posterity.110 They instituted their action "in their capacity
as concerned citizens, taxpayers, parents, grandparents,
biological ancestors of all their descendants, born and
unborn, conceived or not yet conceived, up to their
remotest generation in the future within the context of
Filipino posterity under the 1987 Constitution."111
Three individual petitioners cannot be considered as
sufficiently numerous and representative of the interests
"of the rest of Filipino posterity." There is no showing that
future Filipinos will accept their point of view. No one can
be certain of the interest of Filipinos in the future. No one
can be certain that even their descendants will agree with
their position.
Consequently, a common interest on the controversy with
future Filipinos cannot be established.
In fact, petitioners Couples for Christ Foundation, Inc., et
al.112 confirmed the existence of divergent opinions on
the RH law among Filipinos when it stated that "the
Filipino people, of whom majority are Catholics, have a
strong interest in the final resolution of the issues on
reproductive health, which has divided the nation for
years."113
Pro-Life Philippines Foundation, Inc., represented by
Lorna Melegrito as Executive Director and in her personal
capacity, Joselyn B. Basilio, Robert Z. Cortes, Ariel A.
10
Crisostomo, Jeremy I. Gatdula, Cristina A. Montes, Raul
Antonio A. Nidot, Winston Conrad B. Padojinog, and
Rufino L. Policarpio III also filed a petition.114
The individual petitioners instituted this action "as
parents, and as a class suit in representation of other
parents and individuals similarly situated."115 They
alleged that the RH law is "oppressive, unjust,
confiscatory and discriminatory specifically against herein
petitioners – as parents, professionals, and faithful of the
Catholic Church."116
Again, there is no showing that these individual petitioners
are sufficiently numerous and representative of the
interests of those they seek to represent.
The rationale for the dismissal of actions in these types of
class suits is far from merely procedural. Since petitioners
claim representation, the argument that they bring as well
as the finality of the judgment that will be rendered will
bind their principals. An improperly brought class suit,
therefore, will clearly violate the due process rights of all
those in the class. In these cases, certainly the entire
Filipino nation, all the descendants of petitioners, all
Catholics, and all the unborn will be bound even though
they would have agreed with respondents or the
intervenors.
Being improperly brought as class suits, these petitions
should be dismissed.
Besides this infirmity, some of the petitions included the
Office of the President as party respondent.117 Also on
this basis, these petitions should be dismissed.
A sitting president cannot be sued.118 This immunity
exists during the President’s incumbency only. The
purpose is to preserve the dignity of the office that is
necessary for its operations as well as to prevent any
disruption in the conduct of official duties and
functions.119 Without this immunity, a proliferation of
suits would derail the focus of the office from addressing
the greater needs of the country to attending each and
every case filed against the sitting President, including the
petty and harassment suits.
The doctrine of presidential immunity is not a surrender of
the right to demand accountability from those who hold
public office such as the President. The Constitution
enumerates the grounds when a President may be
impeached.120 This immunity is also no longer available
to a non-sitting President. After the end of his or her
tenure, he or she can be made criminally and civilly liable
in the proper case.121
III
The Right to Life
Petitioners raise the issue of right to life under Article III,
Section 1 of the Constitution in relation to the policy of
equal protection of the life of the mother and of the unborn
under Article II, Section 12. In this context, the right to life
is viewed as the right to a corporeal existence.
The constitutional right to life has many dimensions. Apart
from the protection against harm to one’s corporeal
existence, it can also mean the "right to be left alone". The
right to life also congeals the autonomy of an individual to
provide meaning to his or her life. In a sense, it allows him
or her sufficient space to determine quality of life. A law
that mandates informed choice and proper access for
reproductive health technologies should not be presumed
to be a threat to the right to life. It is an affirmative
guarantee to assure the protection of human rights.
The threat to corporeal existence
The policy taken by the law against abortion is clear. In
the fifth paragraph of Section 2,122 the law provides:
The State likewise guarantees universal access to
medically safe, non-abortifac[i]ent, effective, legal,
affordable, and quality reproductive health care services,
methods, devices, supplies which do not prevent the
implantation of a fertilized ovum as determined by the
Food and Drug Administration (FDA) and relevant
information and education thereon according to the
priority needs of women, children and other
underprivileged sectors x x x. (Emphasis supplied)
Section 3,123 paragraph (d) likewise emphasizes the
following as a guiding principle of implementation:
(d) The provision of ethical and medically safe, legal,
accessible, affordable, non-abortifac[i]ent, effective and
quality reproductive health care services and supplies is
essential in the promotion of people’s right to health,
especially those of women, the poor and the
marginalized, and shall be incorporated as a component
of basic health care[.] (Emphasis supplied)
Then, subparagraph (j) of the same section in this law
states:
(j) While this Act recognizes that abortion is illegal and
punishable by law, the government shall ensure that all
women needing care for post-abortive complications and
all other complications from pregnancy, labor and delivery
and related issues shall be treated and counseled in a
humane, nonjudgmental and compassionate manner in
accordance with law and medical ethics[.] (Emphasis
supplied)
Section 9124 of the law provides:
Sec. 9. The Philippine National Drug Formulary System
and Family Planning Supplies. – The National Drug
Formulary shall include hormonal contraceptives,
intrauterine devices, injectibles and other safe, legal, non-
abortifac[i]ent and effective family planning products and
supplies. x x x. (Emphasis supplied)
Section 4, paragraph (a) of Republic Act No. 10354
defines abortifacient as:
(a) Abortifacient refers to any drug or device that induces
abortion or the destruction of a fetus inside the mother’s
womb or the prevention of the fertilized ovum to reach and
be implanted in the mother’s womb upon determination of
the FDA.
This should have been sufficient to address the
contention by petitioners that the law violates the right to
life and that right to life means the right to a corporeal
existence.
The ponencia found that the law was "consistent with the
Constitution"125 because it "prohibits any drug or device
that induces abortion"126 and because it "prohibits any
drug or device [that prevents] the fertilized ovum to reach
and be implanted in the mother’s womb."127
When life begins, not an issue.
11
However, the court cannot make a declaration of when life
begins. Such declaration is not necessary and is a dictum
that will unduly confuse future issues.
First, there is, as yet, no actual controversy that can
support our deliberation on this specific issue.
Second, the court cannot rely on the discussion of a few
commissioners during the drafting of the constitution by
the Constitutional Commission.
In Civil Liberties Union v. Executive Secretary,128 this
court noted:
A foolproof yardstick in constitutional construction is the
intention underlying the provision under consideration.
Thus, it has been held that the Court in construing a
Constitution should bear in mind the object sought to be
accomplished by its adoption, and the evils, if any, sought
to be prevented or remedied. A doubtful provision will be
examined in the light of the history of the times, and the
condition and circumstances under which the Constitution
was framed. The object is to ascertain the reason which
induced the framers of the Constitution to enact the
particular provision and the purpose sought to be
accomplished thereby, in order to construe the whole as
to make the words consonant to that reason and
calculated to effect that purpose.129
However, in the same case, this court also said:130
While it is permissible in this jurisdiction to consult the
debates and proceedings of the constitutional convention
in order to arrive at the reason and purpose of the
resulting Constitution, resort thereto may be had only
when other guides fail as said proceedings are powerless
to vary the terms of the Constitution when the meaning is
clear. Debates in the constitutional convention "are of
value as showing the views of the individual members,
and as indicating the reasons for their votes, but they give
us no light as to the views of the large majority who did
not talk, much less of the mass of our fellow citizens
whose votes at the polls gave that instrument the force of
fundamental law. We think it safer to construe the
constitution from what appears upon its face." The proper
interpretation therefore depends more on how it was
understood by the people adopting it than in the framers’s
understanding thereof.131 (Emphasis supplied)
The meaning of constitutional provisions should be
determined from a contemporary reading of the text in
relation to the other provisions of the entire document. We
must assume that the authors intended the words to be
read by generations who will have to live with the
consequences of the provisions. The authors were not
only the members of the Constitutional Commission but
all those who participated in its ratification. Definitely, the
ideas and opinions exchanged by a few of its
commissioners should not be presumed to be the
opinions of all of them. The result of the deliberations of
the Commission resulted in a specific text, and it is that
specific text—and only that text—which we must read and
construe.
The preamble establishes that the "sovereign Filipino
people" continue to "ordain and promulgate" the
Constitution. The principle that "sovereignty resides in the
people and all government authority emanates from
them"132 is not hollow. Sovereign authority cannot be
undermined by the ideas of a few Constitutional
Commissioners participating in a forum in 1986 as against
the realities that our people have to face in the present.
There is another, more fundamental, reason why reliance
on the discussion of the Constitutional Commissioners
should not be accepted as basis for determining the spirit
behind constitutional provisions. The Constitutional
Commissioners were not infallible. Their statements of
fact or status or their inferences from such beliefs may be
wrong. This is glaringly true during their discussions of
their reasons for supporting the formulation of Article II,
Section 12 of the Constitution.133
It cannot be contended that the exact moment when life
begins was a settled matter for the Constitutional
Commissioners. This is just one reading of their
discussions.
For Commissioner Bernas, the reason for extending right
to life to a fertilized ovum134 was to "prevent the Supreme
Court from arriving at a x x x conclusion" similar to Roe v.
Wade.135 In the process, he explained his ideas on the
beginning of life:
FR. BERNAS: x x x The intent of this addition is to
preclude the Supreme Court from following the United
States doctrine which does not begin to weigh the life of
the unborn against that of the mother until the fetus has
reached a viable stage of development. In American
doctrine, during the first six months of pregnancy, the only
requirement for allowing abortion is that it will not be
harmful to the mother. It is only after the sixth month that
the life of the fetus begins to be weighed against the life
of the mother.
The innovation does not say that from the first moment
the sperm and the egg shake hands, human life is already
present, much less does it say that at that moment, a soul
is infused; nor does the innovation say that the right to life
of the fertilized ovum must prevail over the life of the
mother all the time. All that the innovation says is that from
the moment of fertilization, the ovum should be treated as
life whose worth must be weighed against the life of the
woman, not necessarily saying that they are of equal
worth.136
x x x. The Argument in Roe v. Wade is that the important
thing is the privacy of the mother’s womb. If she wants to
get rid of that fetus anytime within the first six months, it
is allowed provided it can be done safely even if there is
no medical reason for it. That is the only thing
contemplated in this.137
However, despite Fr. Bernas’ statement on the proposed
inclusion of "[t]he right to life extends to the fertilized
ovum" in Section 1 of the Bill of Rights, Bishop Bacani
stated that human life already existed at the time of
conception:
BISHOP BACANI: The formulation reached by the
Committee was "fertilized ovum," to precisely define what
we meant. And it will be brought forward in another
committee report that the right to life begins with
conception. That is meant to explain what is understood
on the committee report by the word "conception." The
Gentleman was asking whether this is a human person.
That is not the assertion yet of this section. But what we
do assert is this, that this is human life already. If I may be
allowed to read the results of the report by Fr. Robert
Henley, who is also a Jesuit like Fr. Bernas, it seems they
are in all camps. Let me just read this into the record. He
says:
12
Specializing as it does in fetal physiology, Georgetown
University, probably more than almost any other
university, is aware of the biological facts regarding the
beginnings of human life.
From the moment of conception a new biological entity
exists. The entity cannot be considered as physically
identical with the mother’s body. To consider the matter
broadly, there is no essential difference between an ovum
fertilized within the body and an ovum fertilized outside
the parent’s body or rejected in an egg or emerging
undeveloped, as in marsupials, in an external pouch. To
destroy this entity is to destroy an existing life. Since this
life entity is clearly within the development of the human
species, there is obviously nothing added on a human
being. Its destruction is the destruction of human life.
Murder cannot be justified by a legal fiction.138
Further in the deliberations on this issue, Ms. Felicitas
Aquino* propounded some concerns:
MS. AQUINO: Madam President, before the issue on the
right to life is lost in the interdebate on the vexing question
of the U.S. bases, I am intervening to settle some matters
about the matter of the right to life.
I am very much alarmed by the absolutist claim to morality
in the defense of human life, the defense that was raised
by Commissioner Villegas. There is presently a raging
debate on the philo-ethical considerations of the origin or
the beginnings of human life that at this moment, I do not
think we are in any position to preempt the debate and
come up with a premature conclusion on the matter.
There are still pressing questions in my mind, such as: Is
the biological existence of a potentiality for life
synonymous with human personality? Is viability
synonymous with life? There are at least a dozen theories
that attempt to address themselves to this kind of
question. For example, we are aware of the Thomistic
concept of hylomorphism which posits the
complementarity of matter and form. The theory demands
that before human life is assumed, the material body
demands a certain measure of organization and form that
makes it capable of receiving a soul. It operates on the
premise that individuality is the basic premise and the
fundamental criterion for human life and human
personality and individuality requires consciousness and
self-reflection.
There is another theory which states that human life
begins two to three weeks after conception; that is after
the possibility on the process of twinning the zygote or the
recombination of the zygote is finally ruled out. These are
questions that need to be addressed in our Civil Code.
For example, in the context of this discussion, Articles 40
and 41 are settled that personality is determined by birth,
and that for all purposes favorable to it, a conceived baby
is considered born but subject to the conditions of Article
41 which says that personality is determined by live birth.
I would think that Articles 40 and 41 are not only settled,
but are the most practical approach to the raging debate
on the matter of human life. It lays as the criteria for its
conclusion the individual biological criteria, with special
emphasis on the physical separation of the fetus from the
mother and the requirements of viability.
I am alarmed by the way we tend to preempt this kind of
discussion by invoking the claims of the righteousness of
morality. These questions for me are transcendental that
we cannot even attempt to address any conclusion on the
matter unless we can address the question without
temerity or without bigotry. Besides, the level of human
knowledge on this debate is so severely restricted that to
preempt the debate is, I guess, to preempt the
deliberations and finally the possibility of agreement on
the diverse theories on the matter.139
In response, Mr. Villegas dismissed the concerns and
declared that the issue of the beginning of life is already
settled.
MR. VILLEGAS: Madam President, it is precisely because
this issue is transcendental that we have to make also a
transcendental statement. There is no debate among
medical scientists that human life begins at conception,
so that is already a settled question. We are talking about
life. As I said, we are not talking about human personality,
neither are we saying that the human person can be
decided precisely by law, nor at what time it will have the
right to property and inheritance. The only right that we
are protecting is the right to life at its beginning, which
medical science genetics has already confirmed as
beginning at conception.140 (Emphases supplied)
The Constitutional Commission deliberations show that it
is not true that the issue of when life begins is already a
settled matter. There are several other opinions on this
issue. The Constitutional Commissioners adopted the
term "conception" rather than "fertilized ovum."
New discoveries in reproductive science, particularly the
possibility of cloning, provide basis for the possible
significance of viable implantation in the uterus as the
"beginning of life and personhood." It is at implantation
when a group of cells gain the potential of progressing into
a human being without further intervention.141
There are others who say that human life is defined by the
presence of an active brain.142 Without it, there is no
human being.143
Another theory is that human life begins when organs and
systems have already been developed and functioning as
a whole, consistent with the idea that death happens upon
cessation of organized functions of these organs and
systems.144 Zygote and embryonic stages are merely
transitional phases.145
Others suggest that life begins when there is no more
possibility of "twinning."146
There are also those who do not share the moral value
and, therefore, the legal protection that can be given to a
fertilized ovum even assuming that that would be the
beginning of life.
During the Constitutional Commission deliberations, Rev.
Rigos pointed out the need to "consider the sensibilities
of other religious groups."147 He asked:
REV. RIGOS: x x x. But like a few people who spoke this
morning, I am a bit disturbed by the second sentence:
"The right to life extends to the fertilized ovum."
In discussing this proposed sentence, did the Committee
consider the sensibilities of some religious groups which
do not look at the fertilized ovum as having reached that
stage that it can be described as human life?148
Fr. Bernas answered: "Precisely, we used that word to try
to avoid the debate on whether or not this is already
human life."149
13
Later, Rev. Rigos asked if the aim of the clause could not
be achieved through legislation.150
Bishop Bacani stated the reason for his belief why the
matter could not be left to legislation. He said:
x x x. We would like to have a constitutional damper
already on the assault to human life at its early stages.
And we realized that it can be possible to more easily
change x x x easier to change legislation on abortion.
Hence, we would like to be able to prevent those changes
in the laws on abortion later.151
Rev. Rigos pointed out the differing opinions on the
commencement of human life. He said that "[i]f we
constitutionalize the beginning of human life at a stage we
call fertilized ovum, then we are putting a note of the
finality to the whole debate."152 To this, Bishop Bacani
said that there were people from other religions who were
against abortion. He said:
BISHOP BACANI: I would like to remind Reverend Rigos
that when we talk about this, it is not a question of
religious boundaries. In fact, let me just read what is
contained in an article given by one of my researchers. It
says that many scholarly Protestant and Jewish leaders
are prominent in the pro-light movement – and they are
referring to the anti-abortion movement. I do not want to
put this simply on the denominational plain, and it is
misleading to put it at that level.
xxxx
BISHOP BACANI: Because these are people who are not
Catholics – who are Jewish, Protestants, even atheists –
but who are against abortion.153
Rev. Rigos clarified that while Bishop Bacani was correct
in describing the Protestant church’s stance against
abortion "on the whole," "x x x there is a big segment in
the Protestant church that wishes to make a clear
distinction between what we call abortion and
miscarriage."154
A paper published in the Journal of Medical Ethics written
by Cameron and Williamson summarizes various
religious views on life’s beginnings.155 It was asserted
that "[t]he Bible, the Koran, and the Talmud do not actually
say when life begins, although each has been the subject
of various interpretations."156
The traditional Catholic view is that life begins at
fertilization.157 However, even "[w]ithin the Catholic
Church, there are differing views."158 Cameron and
Williamson mentioned subscription "to theories of
‘delayed’ or ‘mediate’ animation" or the infusion of the soul
at points after fertilization.159 There are also arguments
that even distinguished theologians like St. Augustine and
St. Thomas claim that a fetus becomes a person only
between the 40th to 80th day from conception and not
exactly at fertilization.160
Similar to the traditional Catholic view, Buddhism,
Sikhism, and Hinduism believe that life begins at
conception.161
Some Muslim scholars, according to Cameron and
Williamson, believe that a fetus gains soul only in the
fourth month of pregnancy or after 120 days.162 Other
Muslims believe that a six-day embryo is already entitled
to protection.163
The view that life begins at fertilization was supported
during the debates in the Constitutional Commission by
the idea that a fertilized ovum always develops into a
human life.
Commissioner Ms. Aquino observed:
MS. AQUINO: I cannot. This is very instructive because
as the Commissioner will note, even this Commission
cannot settle the question of whether a fertilized egg has
the right to life or not.
Those experts in the field of medicine and theology
cannot settle this question. It is bad enough for us to pre-
empt this controversial issue by constitutionalizing the
ovum; it would be doubly tragic for us to provide for
ambiguities which may even disturb settled
jurisprudence.164
Mr. Nolledo answered:
MR. NOLLEDO: I do not think there is ambiguity because
the fertilized egg, in the normal course of events, will be
developed into a human being, a fetus, and as long as the
normal course of events is followed. I think that the right
to life exists and the Constitution should recognize that
right to life. We do not presume accidents; we do not
presume ambiguities. We presume that as long as it is
categorized as a fertilized ovum, it will ripen into human
personality.165 (Emphasis supplied)
Unfortunately, this may be wrong science.
There are studies that suggest that a fertilized egg, in the
normal course of events, does not develop into a human
being. In Benagiano, et al.’s paper entitled Fate of
Fertilized Human Oocytes,166 it was shown that pre-
clinical pregnancy wastage is at least 50%. Some
estimate that the chance that pregnancy will proceed to
birth may be as low as about 30%.167 Some causes of
this wastage are implantation failure, chromosome or
genetic abnormality, and similar causes. If normalcy is
defined by this percentage, then it is pregnancy wastage
that is normal and not spontaneous development until
birth. Based on these, there may be no basis to the
presumption that a fertilized ovum will "ripen into human
personality" as Mr. Nolledo suggested.
To highlight the fallibility of the Constitutional
Commissioners, one of them argued that a fertilized ovum
is human because it is the only species that has 46
chromosomes. Thus:
MR. VILLEGAS: x x x. Is it human? Genetics gives an
equally categorical "yes." At the moment of conception,
the nuclei of the ovum and the sperm rupture. As this
happens 23 chromosomes from the ovum combine with
23 chromosomes of the sperm to form a total of 46
chromosomes. A chromosome count of 46 is found only
— and I repeat, only — in human cells. Therefore, the
fertilized ovum is human. (Emphasis supplied)
Since these questions have been answered affirmatively,
we must conclude that if the fertilized ovum is both alive
and human, then, as night follows day, it must be human
life. Its nature is human.168
MR. VILLEGAS: As I explained in the sponsorship
speech, it is when the ovum is fertilized by the sperm that
there is human life. Just to repeat: first, there is obviously
life because it starts to nourish itself, it starts to grow as
any living being, and it is human because at the moment
14
of fertilization, the chromosomes that combined in the
fertilized ovum are the chromosomes that are uniquely
found in human beings and are not found in any other
living being.169 (Emphasis supplied)
Again, this is factually wrong.
A person who has Down’s Syndrome may have 47
chromosomes.170 Most persons who have Turner’s
Syndrome are one chromosome short or have 45
chromosomes.171 Persons with these conditions are no
less human than persons with 46 chromosomes.
Meanwhile, there are also known species which have 46
chromosomes other than humans. A Reeves’ Muntjac, for
example, has 46 chromosomes.172
Then, there was the claim that the instances when there
had to be a choice made between the life of the mother
and the life of the zygote, fetus or child were few.
Mr. Villegas asserted:
MR. VILLEGAS: As I stated in my sponsorship speech,
99 percent of the cases indicated that taking care of the
health of the mother is taking care of the child and vice
versa. Because of the progress of medical science, the
situations when a moral dilemma exists are very, very
few. The intention behind the statement is precisely for
the State to make sure that it protects the life of the
pregnant mother. She goes to all sorts of trouble as we
have discussed in the provisions on health. Protecting the
life of the mother, giving her all the necessary social
services will protect the child. So it happens only in very,
very few instances which we mentioned, like ectopic
pregnancies when the fertilized ovum is implanted outside
of the uterus. I repeat, medical science has made the
situation very, very exceptional.
xxxx
MR. VILLEGAS: Madam President, as I said in response
to the question yesterday of Commissioner Suarez, 99
percent of the cases related to protection of the mother’s
health, making sure that she is in the right working
conditions and that she is not subjected to stress, show
that there are so many things that can endanger the life
of the unborn because the health of the mother is not
sufficiently cared for. This is really a prolife provision
which emphasizes the fact that in most instances,
protecting the life of the mother is also protecting the life
of the unborn.173 (Emphasis supplied)
Taking care of the mother does not always mean taking
care of the zygote, fetus or child. There are instances
wherein in order to protect the life of the mother, the
zygote, fetus or child may have to be sacrificed.
Implantation of the fertilized egg in areas outside the
uterus such as the fallopian tube or ovaries may cause
organ rupture and severe loss of blood. To save the
mother’s life, surgical removal174 of the fertilized ovum
may be necessary.
Pre-eclampsia/eclampsia or hypertension during
pregnancy175 is associated with increased perinatal
mortality.176 It may also result in other complications
such as seizures, hemorrhage, or liver or kidney
complications that may be life-threatening.177 It may
require premature delivery of the child to prevent further
complications or when the life of the mother is already
threatened by seizures or other complications.178
Meanwhile, pregnant persons who have cancer may have
to choose between chemotherapy and risking harm to the
developing embryo or fetus in her womb or not
undergoing chemotherapy and risking her life.179
The Department of Health estimated that more than a
thousand women died in 2009 for various causes. It is
observed that most of these causes are the same
complications that caused a moral dilemma between
saving the mother and saving the child.180
In asserting that there are only a few instances of moral
dilemma during pregnancy, Mr. Villegas insisted on the
application of the doctrine of double effect. He stated:
MR. VILLEGAS: x x x. And we said that even in those
instances, which I consider to be less than one percent of
the situation, there is a moral principle which we referred
to as the principle of double effect in which if one has to
save the life of the mother in an operation, it is morally
and legally permissible to so operate even if the child will
have to be indirectly sacrificed. There is no murder
involved there because one does not intend the death of
the child. One is correcting a medical aberration of the
mother.
xxxx
MR. VILLEGAS: It is the same principle of double effect.
If you are not killing the mother directly, if the operation is
to save the child and there is the indirect effect of the
mother’s life being sacrificed, then I think the principle of
double effect also applies.181
The principle of double effect is traceable to Thomas
Aquinas in Summa Theologiae.182 It is, therefore, a
Christian principle that may or may not be adopted by all
of the members of the medical community. There are
even some who recommend its abandonment.183
A commissioner went on to point out that unwanted
children become wanted children in practically all cases.
Thus:
BISHOP BACANI: Madam President, may I comment on
the unwanted babies. I was reading this little book on a
study of unwanted pregnancies and the interesting thing
is this: In practically all cases, unwanted pregnancies
became wanted babies. In fact, there were more
unwanted pregnancies that became wanted babies than
wanted pregnancies in the beginning which turned
sour.184
15

Again, this claim is belied by the fact that there are
reportedly, hundreds of children that are abandoned
every year.185 Apparently, abandonment and neglect are
the most common cases of abuse among children, based
on statistics.186 Moreover, statistics shows that there is
an average of 16% unwanted births, according to the
2008 National Demographic and Health Survey.187
Third, a generalized statement that life begins at
fertilization of the ovum misunderstands the present
science relating to the reproduction process.
Reproduction is a complex process whose features we
need not tackle absent an actual controversy.
Framing the issue as an issue of right to life or the right to
protection of the unborn from conception presupposes a
prior conclusive scientific determination of the point when
life commenced. It presupposes a conclusive finding as to
the beginning of the existence of the unborn.
The court cannot declare that life begins at fertilization on
the basis of a limited set of sources that may not constitute
the consensus among the scientific community.
For the medical bases for the contention that life begins
at fertilization some of the petitioners188 cited medical
textbooks and expert opinions. However, some
respondents and respondents-intervenors, also had their
own scientific textbooks, journals, and health organization
statements to support their opposite contentions on the
difference between fertilization and conception, and the
importance of viability and clear establishment of
pregnancy in determining life.189
We can infer from the existence of differing opinions on
this issue that reproduction involves a complex process.
Each part of this process provides a viable avenue for
contention on the issue of life.
The reproductive process is not always characterized by
continuity and spontaneity from fertilization to birth.
Fertilization happens when a single sperm penetrates the
ovum or the egg.190 The body has a mechanism that
prevents "polyspermy" or more than one sperm from
penetrating the egg.191 Failure of this mechanism may
cause issues on the viability of the fertilized egg.192
Fertilization is possible only as long as both the sperm
and the ova remain alive.193 Sperm have a lifespan of
about three to five days inside a woman’s body,194 while
an ovum remains capable of fertilization only about a few
hours to a day after ovulation.195 This means that
fertilization can happen only within that specific period of
time. No fertilization within this specific period means that
both cells will disintegrate and die.
A fertilized egg stays in the fallopian tube for about three
to four days.196 It undergoes several cell divisions.197 It
reaches the uterus usually in its 16- or 32-cell state.198
At this point, each cell resulting from the divisions is
"totipotent" or may be capable of developing into an
individual.199
A fertilized egg may enter the uterus to undergo further
cell division, until it becomes what is known as a
blastocyst, at which stage the cells lose their
totipotentiality and start to differentiate.200 The fertilized
egg may also remain in the fallopian tube or proceed to
other organs in the abdomen to undergo the same
process.
About a week from ovulation, the fertilized egg starts to
implant itself into the uterus201 or fallopian tube/other
abdominal organs to develop an embryo. The latter case
is called ectopic pregnancy. When this happens, the
embryo is not viable and must be surgically removed to
prevent maternal hemorrhage.202 There are times when
no surgical removal is necessary because of spontaneous
abortion.203
Around the time that the blastocyst starts embedding itself
into the uterus, the hormone, chorionic gonadotropin, is
secreted.204 This hormone is detectable in the mother’s
blood and urine.205 Pregnancy is usually determined by
detecting its presence.206 Thus, pregnancy is detected
only after several days from fertilization.
Studies suggest that fertilization does not always proceed
to a detectable pregnancy.207 Fertilization can become
undetected because the fertilized ovum becomes
wastage prior to a finding of pregnancy.208
Every instance of cell division or differentiation is crucial
in the reproductive process. Each step is a possible point
of error. An error, especially when it involves the genes,
is a possible cause for termination of the reproductive
process.209
It is during the first week after fertilization that the greatest
losses appear to occur.210 A review of literature on the
fate of the fertilized egg in the womb estimates that about
or at least 50% of fertilized eggs are wasted or "do[es] not
produce a viable offspring."211
Wastage happens for different and natural reasons,
among which are delayed or erroneous implantation and
chromosomal or genetic abnormalities.212 Apparently, a
delayed implantation of a fertilized egg into the uterus,
usually more than 12 days from fertilization, may reduce
or eliminate the chance that pregnancy will proceed.213
It is suggested that delayed implantation may be caused
by delayed production or relatively low concentration of
the chorionic gonadotropin hormone which leads to the
degeneration of the corpus luteum.214 The corpus luteum
produces hormones that are essential to the maintenance
of pregnancy especially during the first months.215 These
hormones are responsible for the thickening of the uterine
muscles and the inhibition of uterine motility that will
prevent the expulsion of the fetus from the womb.216
The huge percentage of losses of pre-implantation zygote
provides basis for the argument that viability is a factor to
consider in determining the commencement of life. These
losses are not generally regarded as deaths of loved
ones, perhaps because it occurs naturally and without the
knowledge of the woman.
Hence, some217 put greater emphasis on the importance
of implantation on this issue than fertilization.
This value is shared by others including the American
College of Obstetricians and Gynecologists, Code of
Federal Regulations, and British Medical Association,
among others.218
The reproductive process may also show that a fertilized
egg is different from what it may become after
individuation or cell specialization.
16
One argument against the belief that human existence
begins at fertilization emphasizes the totipotency of the
pre-implantation zygote.
David DeGrazia, for example, argues that while
fertilization is necessary for a person’s existence, it is not
sufficient to consider it as a person.219 At most, the
zygote is only a precursor of a person.220 It was stressed
that several days after fertilization, a zygote is not yet
uniquely differentiated.221 Hence, it can still divide into
multiple human beings or fuse with other zygotes to
produce a chimera.222 This mere possibility, according to
DeGrazia belies the position that a zygote is identical with
the individual or individuals that result from it.223
DeGrazia states:
Consider the zygote my parents produced in 1961,
leading to my birth in 1962. I am not an identical twin. But
that zygote could have split spontaneously, resulting in
identical twins. If it had, presumably I would not have
existed, because it is implausible to identify me with either
of the twins in that counterfactual scenario. If that is right,
then the existence of the zygote my parents produced
was not sufficient for my existence, from which it follows
that I am not numerically identical to that zygote. The very
possibility of twinning belies the claim that we originated
at conception.224
Further, as argued by DeGrazia, the mere fact that the
cells are still subject to differentiation or individuation
"belies the claim that we originated at conception."225
Imputing moral or human status to an undifferentiated
zygote means that a human (in the form of a zygote) dies
every time a zygote multiplies to form two individuals.226
DeGrazia doubts that many would accept the imagined
implications of giving full moral status to a fertilized ovum:
1) Multiple pregnancy is a cause for mourning because
essentially, a life is given up to produce at least two
others; 2) There should be reason to support investments
in research for the prevention of multiple pregnancies.227
DeGrazia characterizes a zygote as a single cell or
"colony of cells"228 whose functions are not yet wholly
integrated, unlike in a human being.229
It was also emphasized that the potential to undergo a
process that would eventually lead to being a full human
being is not equivalent to being a full human being.230
Advancements in technology point to the possibility of
cloning from cells other than the sperm and the egg. Yet,
this does not elevate the status of each cell as in itself a
full human being.231 Thus:
Clearly, the single-cell zygote has the potential to develop
in such a way that eventually produces one of us. (Note:
I do not say that the single-cell zygote has the potential to
become one of us – a statement that would imply
numerical identity.) But the importance of this potential is
dubious. Now that we know that mammals can be cloned
from somatic cells – bodily cells other than sperm, eggs,
and their stem-cell precursors – we know that, in principle,
each of millions of cells in your body has the potential to
develop into a full human organism. Surely this confers no
particular moral status on your many individual cells; nor
does it suggest that each cell is one of us. Once again, a
full complement of DNA is not enough to make one of
us.232
The argument that the use of ordinary body cells does not
naturally lead to birth, according to DeGrazia, finds little
weight when statistics of pre-implantation wastage is
considered.233 Statistics does not support the view that
fertilization naturally leads to birth.234 A fertilized egg still
has to undergo several processes and meet certain
conditions before it results to implantation or birth.
Further, there are policy dilemmas resulting from the
court’s premature determination of life’s beginnings.
A corollary of the view that life begins at fertilization is that
anything that kills or destroys the fertilized egg is
"abortive."
The beginning of life is a question which can be most
competently addressed by scientists or ethicists. A
Supreme Court declaration of a scientific truth amidst lack
of consensus among members of the proper community
is dangerous in many contexts. One example is the
occurrence of ectopic pregnancy.
Ectopic pregnancy occurs when the fertilized egg
implants into parts or organs other than the uterus.235
Ectopic pregnancy usually occurs in the fallopian
tube.236 Women who experience ectopic pregnancy
must cause the removal of the developing embryo or she
risks internal bleeding and death.237
Ectopic pregnancy can be treated using drugs or surgery
depending on the size of the embryo and the status of the
fallopian tube.238 Smaller pregnancy and the inexistence
of tubal rupture allow treatment through medications.239
Medications will stop pregnancy growth without the need
for removal of the fallopian tube.240
However, there are instances that necessitate surgical
removal of the pregnancy, including the fallopian tube, to
prevent harm to the woman.241
In any case, creating an all encompassing definition of
life’s beginnings to "equalize" the protection between the
"unborn" and the mother creates a moral dilemma among
the people whether to save the mother from the risk of life-
threatening complications or whether to "save" a fertilized
ovum that has no chance of surviving. This is most
especially applicable among those involved such as the
mother and the health care professionals.
Following a declaration in the ponencia that life begins at
fertilization, the removal of a fertilized egg in an ectopic
pregnancy must necessarily constitute taking of life. All
persons involved in such removal must necessarily kill a
fertilized ovum. A mother or a health care professional
who chooses to remove the embryo to save the mother
risks being charged or stigmatized for that conduct.
Similarly, such all encompassing declaration is
dangerous especially when applied to fertilizations
resulting from sexual assault or rape.
There are conflicting versions of the mechanisms of
action of emergency conception. There are publications,
for example, that find that a single dose of the most widely
used emergency contraceptive, levonorgestrel (LNG)
taken within five days of unprotected sex would protect a
female from unwanted pregnancy by delaying or inhibiting
ovulation.242 Petitioners, on the other hand, believe that
emergency contraceptives also prevent the implantation
of a fertilized ovum into the uterus. They also cite
distinguished scientific journals such as the Annals of
Pharmacotherapy.243
This lack of public consensus coupled with an official
declaration from this court that life begins at fertilization
could immobilize a rape victim from immediately obtaining
17
the necessary emergency medication should she wish to
prevent the unwanted pregnancy while there is still time.
It may create ethical pressure on the victim to assume the
repercussions of acts that are not her fault.
Insisting on a determination of when life begins also
unnecessarily burdens the ethical dilemma for assisted
reproductive technologies.
Assisted reproductive technologies (ART) refer to "all
fertility treatments in which both eggs and sperm are
handled. In general, ART procedures involve surgically
removing eggs from a woman’s ovaries, combining them
with sperm in the laboratory, and returning them to the
woman’s body or donating them to another woman. They
do NOT include treatments in which only sperm are
handled (i.e. intrauterine—or artificial—insemination) or
procedures in which a woman takes medicine only to
stimulate egg production without the intention of having
eggs retrieved."244 Others include among the ART
procedures intrauterine insemination, in vitro fertilization,
sperm donation, egg donation, and surrogacy or
gestational carrier.245 I focus on in vitro fertilization.
In in vitro fertilization, the ovaries are stimulated to
produce multiple eggs.246 The produced eggs are
retrieved from the woman’s body for insemination.247 A
sufficient number of healthy embryos are transferred to
the woman’s womb after fertilization.248 Multiple
embryos are sometimes transferred to the womb to
increase the chances of pregnancy, in which case,
multiple births are likely to happen.249 Unused healthy
embryos may be frozen for later use or for donation.250
Disposal of embryos is also an option for some.251
The ethical dilemma arises with respect to the unused
embryos. A conflict of interest is created between the fate
of the mother and the fate of the embryos. If life begins at
fertilization, disposal of surplus embryos means disposal
of several human lives. At the same time, a mother or
anyone else cannot be forced to conceive a child or
donate an embryo to another.
I believe that when presented with a like but actual case,
it should be the parents who should make the choice
whether to use the surplus embryos or to dispose it if
allowed by law.
When exactly life begins is not in issue in this case.
We should avoid this issue because this court lacks the
competence to determine scientific, ethical or
philosophical truths. Just as it should not easily accept
purported truths propounded by parties to support their
causes for or against reproductive health, this court
should also not so easily dismiss views as "devoid of any
legal or scientific mooring"252 or having been
"conceptualized only for convenience by those who had
only population control in mind."253
The ponencia emphasizes this court’s statement in
Continental Steel v. Hon. Accredited Voluntary Arbiter
Allan S. Montano that "a child inside the womb already
has life".254 But Continental Steel involves the issue of
whether respondent in that case was entitled to death and
accident insurance claim after his child had been
prematurely delivered at 38 weeks and immediately died.
At 38 weeks, viability is less an issue compared to a
fertilized egg. A fertilized egg will still have to successfully
undergo several processes, cell divisions, implantations,
and differentiations for a chance at even developing
recognizable fetal tissues. This court said:
Even a child inside the womb already has life. No less
than the Constitution recognizes the life of the unborn
from conception, that the State must protect equally with
the life of the mother. If the unborn already has life, then
the cessation thereof even prior to the child being
delivered, qualifies as death.255 (Emphasis supplied)
This court was not making a declaration that a fertilized
egg already constitutes a child inside a womb and a
declaration as to when life begins. Applied in the context
of that case, this court was merely saying that the 38-
week, prematurely born child was already a child for
purposes of the award of the death and accident
insurance claim under the Collective Bargaining
Agreement.
IV
Section 9 and Abortifacient Effects
The petitions, having alleged no actual controversy, also
furnish no justification to strike down any portion of
Section 9 of Republic Act No. 10354 as unconstitutional.
This provides:
SEC. 9. The Philippine National Drug Formulary System
and Family Planning Supplies. – The National Drug
Formulary shall include hormonal contraceptives,
intrauterine devices, injectables and other safe, legal,
non-abortifacient and effective family planning products
and supplies. The Philippine National Drug Formulary
System (PNDFS) shall be observed in selecting drugs
including family planning supplies that will be included or
removed from the Essential Drugs List (EDL) in
accordance with existing practice and in consultation with
reputable medical associations in the Philippines. For the
purpose of this Act, any product or supply included or to
be included in the EDL must have a certification from the
FDA that said product and supply is made available on
the condition that it is not to be used as an abortifacient.
These products and supplies shall also be included in the
regular purchase of essential medicines and supplies of
all national hospitals: Provided, further, That the foregoing
offices shall not purchase or acquire by any means
emergency contraceptive pills, postcoital pills,
abortifacients that will be used for such purpose and their
other forms or equivalent. (Emphasis supplied)
Petitioners argue that the law violates the right to health
because allowing general access to contraceptives by
including them in the national drug formulary and in the
supplies of national hospitals means that the citizens are
being exposed to several health risks such as different
types of cancer, thromboembolytic events, myocardial
infarction, and stroke, among others.
Petitioners point to no specific drug or contraceptive. They
produce medical journals which tend to support their
justification and ask this court to accept them as gospel
truth. On the other hand, respondents also show journals
that support their claims.
The petitioners misread this provision.
The law specifically grants the Food and Drug
Administration (FDA) with the competence to determine
the scientific validity of the allegations of the petitioners.
The FDA is mandated to examine each and every drug,
18
contraceptive or technology vis-a-vis the claims made for
or against their inclusion.
I agree with the ponencia in withholding any blanket
pronouncement of any contraceptive absent the exercise
of the FDA of its functions under this provision. The FDA
is mandated to ensure the safety and quality of drugs
released to the public.256
Generalizations and exaggerated claims are symptomatic
of anguished advocacies. The angst that accompany
desperate attempts to convince often push well-meaning
advocates to magnify fears that go beyond the
reasonable.
The argument that drugs that may be abused should not
be made available to the public is perhaps more
dangerous to public health than a total ban on
contraceptives. It is a proposed policy that
misunderstands the effect of any kind of drug on the
human body. It is, thus, arbitrary and without reason.
Drugs aim to affect our bodily processes to achieve a
desired outcome.257 They work by targeting and
interacting with cell receptors, enzymes and/or other
substances in our body so that the desired change in our
chemical processes and/or physiological functions can be
effected.258
However, our bodies are complex systems. Targeted
receptors and/or enzymes may exist in non-target
areas.259 They may have structural similarities with non-
target receptors and/or enzymes. Thus, while drugs in
general are designed for a specific purpose, the
complexities of our systems allow for a relatively
generalized effect. There are unintended effects that are
often called the "side effects."260 This is a property that
is not exclusive to contraceptive drugs. It is a property of
drugs in general.
Aspirin, for example, is advisable for thromboembolic
disorders, stroke or for the prevention of cerebrovascular
events.261 Abusing the use of aspirin, however, may
cause gastrointestinal bleeding.262
Aldomet is a drug usually taken to relieve
hypertension.263 When abused, its reported side effects
include maladjustments affecting the nervous system,
blood, and the liver. Among the reported reactions are
sedation, headache, psychic disturbances, hepatitis, and
hemolytic anemia.264
Even drinking too much water may cause hyponatremia,
which is the low sodium concentration in the plasma.265
Side effects are expected with every drug from the
weakest to the most potent. Their prescriptions are trade-
offs between all the benefits and risks associated with it.
Every drug should be taken to address the ailment but in
a way that minimizes the risk. This is usually why there
are proper dosages and time periods to take medicines.
This is also why some medicines are not dispensed
without the proper prescription.
Several drugs are not prescribed when there is pregnancy
because of the fetal risks associated with them. Among
these are Xenical (orlistat) used as a nutrition pill, Advil
and any kind of Ibuprofen (during the third trimester) used
to manage pain, Testim (testosteron) given for endocrine
disorders, Flagyl (metronidazole) to manage infection,
Crestor (rosuvastatin) to manage cholesterol, Vistaril
(hydroxyzine) usually given for allergic reactions, and
many more.266
The use of these drugs is appropriately limited so that
they cannot have the effect or be used as abortifacients.
This does not mean, however, that they are, per se,
abortifacients.
The policy embedded in the law is that the proper use of
contraceptives will prevent unwanted pregnancy and,
therefore, also prevent complications related to
pregnancy and delivery.267 The risks of its usage, when
proper and guided, can be relatively low compared to its
benefits.268 More specifically, the FDA is most
competent in examining the scientific and medical basis
of the beneficial claims and risks of each and every
contraceptive. Drugs may or may not be included in the
Essential Drugs List, based on the FDA’s findings. It is not
for this court to jump to conclusions on the basis of the ad
hoc presentations of medical journals from the parties.
This finding of fact should be left to the proper agency.
There is an indefinite scope of possible scenarios
precisely because there was no actual case or
controversy brought before this court. If applying the law
to even one of these possibilities may render it
constitutional, then we should not declare it as
unconstitutional. The doctrine on the presumption of
constitutionality must prevail when there is no factual
basis to invalidate the law.269
Only safe and effective medicines are included in the drug
formulary.
The inclusion of contraceptives in the national drug
formulary is not new. The Philippine Drug Formulary:
Essential Medicines List, Volume 7, of 2008 already listed
it under "Hormones and Hormone Antagonists."270
Contraceptives are included, following five pillars
designed to make available affordable, safe, and effective
drugs to the public. These pillars are: (1) "the assurance
of the safety, efficacy and usefulness of pharmaceutical
products through quality control;" (2) "the promotion of the
rational use of drugs by both the health professionals and
the general public;" (3) "the development of self-reliance
in the local pharmaceutical industry;" (4) "[t]he tailored or
targeted procurement of drugs by government with the
objective of making available to its own clientele,
particularly the lower-income sectors of the society, the
best drugs at the lowest possible cost;" and (5) "people
empowerment."271
One of the steps for inclusion in the drug formulary is to
ensure that the drug is of "acceptable safety, proven
efficacy, quality, and purity".272 Ensuring that health
products are safe, efficient, pure, and of quality is a
function of the Food and Drug Administration.273
Moreover, Republic Act No. 4729 requires that
contraceptive drugs and devices cannot be lawfully
dispensed without proper medical prescription.
V
Conscientious Objector
The ponencia proposes to declare the provision relating
to the mandatory referral of a conscientious objector as
unconstitutional because it violates the right to religion. I
also disagree.
The sections involved provides:
19
SEC. 7. Access to Family Planning – All accredited public
health facilities shall provide a full range of modern family
planning methods, which shall also include medical
consultations, supplies and necessary and reasonable
procedures for poor and marginalized couples having
infertility issues who desire to have children: Provided,
That family planning services shall likewise be extended
by private health facilities to paying patients with the
option to grant free care and services to indigents, except
in the case of non-maternity specialty hospitals and
hospitals owned and operated by a religious group but
they have the option to provide such full range of modern
family planning methods: Provided further, That these
hospitals shall immediately refer the person seeking such
care and services to another health facility which is
conveniently accessible: Provided finally, That the person
is not in an emergency condition or serious case as
defined in Republic Act No. 8344.
SEC. 23. Prohibited Acts. – The following acts are
prohibited:
(a) Any health care service provider, whether public or
private, who shall:
xxxx
(3) Refuse to extend quality health care services and
information on account of the person’s marital status,
gender, age, religious convictions, personal
circumstances, or nature of work: Provided, That the
conscientious objection of a health care service provider
based on his/her ethical or religious beliefs shall be
respected; however, the conscientious objector shall
immediately refer the person seeking such care and
services to another health care service provider within the
same facility or one which is conveniently accessible:
Provided, further, That the person is not in an emergency
condition or serious case as defined in Republic Act No.
8344, which penalizes the refusal of hospitals and
medical clinics to administer appropriate initial medical
treatment and support in emergency and serious cases[.]
(Emphasis supplied)
The patient’s rights
Doctors routinely take an oath implying that the primordial
consideration in their services is the welfare of their
patients. The form of the Physician’s Oath adopted by the
World Medical Association is what is now known as the
Declaration of Geneva, to wit:
At the time of being admitted as a member of the medical
profession:
I solemnly pledge to consecrate my life to the service of
humanity;
I will give to my teachers the respect and gratitude that is
their due;
I will practice my profession with conscience and dignity;
The health of my patient will be my first consideration;
I will respect the secrets that are confided in me, even
after the patient has died;
I will maintain by all means in my power, the honor and
the noble traditions of the medical profession;
My colleagues will be my sisters and brothers;
I will not permit considerations of age, disease or
disability, creed, ethnic origin, gender, nationality, political
affiliation, race, sexual orientation, social standing or any
other factor to intervene between my duty and my patient;
I will maintain the utmost respect for human life;
I will not use my medical knowledge to violate human
rights and civil liberties, even under threat;
I make these promises solemnly, freely and upon my
honor.274 (Emphasis supplied)
Many of those who specialize in the ethics of the health
profession emphasize the possibility of a health service
provider inordinately abusing conscientious objection
over the welfare of the patient. Thus,
Physicians’ rights to refuse to participate in medical
procedures that offend their conscience may be
incompatible with patients’ rights to receive lawful,
medically indicated treatment. Historically, the goal of
medicine has been to provide care to the sick. The World
Medical Association’s modern variant of the Hippocratic
Oath, the Declaration of Geneva, inspires the graduating
physician to pledge that, "The health of my patient will be
my first consideration". For many who enter medicine, the
commitment to assist their fellow human beings and
pursue a path of personal salvation through this
professional calling is religiously inspired. A conflict of
interest can arise if the physician’s religious or other
conscientious convictions are in tension with medically
indicated procedures. The obvious case is therapeutic
abortion, but analogous cases include contraceptive
sterilization and withdrawal of life support from otherwise
viable patients. Physicians who give priority to their own
moral and spiritual convictions over their patients’ need
and desire for medically indicated care face a conflict that
needs resolution.
The ethical conflict can be avoided through mutual
accommodation; physicians have the right to decide
whom to treat, and patients have the right to decide from
whom they will receive care. Physicians do not have the
same ethical duties to nonpatients as to patients except
in emergency circumstances. In all other circumstances,
physicians are at liberty to choose those for whom they
will accept the responsibility of care. If there are services
they will not perform, physicians should make the fact
known to patients for whom they have accepted
responsibility. Doing so not only saves patients the
distress of seeking those services and being turned down,
it also saves physicians from the dilemma of unfulfilled
responsibilities to those whose care they have agreed to
undertake. This arrangement is well understood in
medicine; physicians who notify prospective patients that
they are, for instance, pediatricians, will not be asked to
treat those requiring geriatric care, and geriatricians who
do not have to accept patients seeking pediatric services.
More explicit disclosure is required, of course, when
prospective patients may reasonably expect that care will
be available from the specialists they approach.
Obstetrician-gynecologies who will not participate in
abortion procedures must make that fact clear before
forming patient-physician relationships."275
If the first and primordial consideration is the health of her
or his patient, then the beliefs of the service provider even
though founded on faith must accommodate the patient’s
right to information. As stated in the Code of Ethics of the
Philippine Medical Association:
20

ARTICLE II
DUTIES OF PHYSICIANS TO THEIR PATIENTS
Section 5. A physician should exercise good faith and
honesty in expressing opinion/s as to the diagnosis,
prognosis, and treatment of a case under his/her care. A
physician shall respect the right of the patient to refuse
medical treatment. Timely notice of the worsening of the
disease should be given to the patient and/or family. A
physician shall not conceal nor exaggerate the patient’s
conditions except when it is to the latter’s best interest. A
physician shall obtain from the patient a voluntary
informed consent. In case of unconsciousness or in a
state of mental deficiency the informed consent may be
given by a spouse or immediate relatives and in the
absence of both, by the party authorized by an advanced
directive of the patient. Informed consent in the case of
minor should be given by the parents or guardian,
members of the immediate family that are of legal age.
(Emphasis supplied)
If a health care service provider’s religious belief does not
allow a certain method of family planning, then that
provider may possibly withhold such information from the
patient. In doing so, the patient is unable to give voluntary
informed consent to all possible procedures that are
necessary for her or his care.
The law, in sections 17 and 23 allow accommodation for
full care of the patient by requiring referral. The patient
that seeks health care service from a provider should be
able to put his or her trust on the provider that he or she
would be referred to the best possible option. There is
nothing in the law which prevents the referring health care
provider from making known the basis of his or her
conscientious objection to an available procedure which
is otherwise scientifically and medically safe and effective.
Between the doctor or health care provider on the one
hand and the patient on the other, it is the patient’s welfare
and beliefs which should be primordial. It is the patient
that needs the care, and the doctor or health care provider
should provide that care in a professional manner.
While providers have a right to their moral beliefs, the right
does not allow health-care providers to violate their
professional and legal obligations to the patient. Policies
on health-care provider refusals should be carefully
crafted to maximize the rights of individuals to their beliefs
without extending this "protection" so far that it prevents
patients from getting the medical care or information they
need.276
The holding of the majority which declares the mandatory
referral systems in Section 17 and Section 23, paragraph
(a) (3) as unconstitutional on the basis of the right of
religion of the doctor or health care provider implicitly
imposes a religious belief on the patient.
It is in this context that many experts say that:
Religious initiatives to propose, legislate, and enforce
laws that protect denial of care or assistance to patients,
(almost invariably women in need), and bar their right of
access to lawful health services, are abuses of
conscientious objection clauses that aggravate public
divisiveness and bring unjustified criticism toward more
mainstream religious beliefs. Physicians who abuse the
right to conscientious objection and fail to refer patients to
non-objecting colleagues are not fulfilling their
profession’s covenant with society.277
We must not assume that situations involving the duty to
refer cover information or services that may be
objectionable only to a specific religious group. Neither
can we assume, for example, that the situation would
always involve an extreme case such that a patient would
seek an abortion.
There are, in fact, many reasons why a patient would seek
information or services from a health professional. To be
sure, when we speak of health care services and
information under Section 23(3) of the law, we refer to a
"full range of methods, facilities, services and supplies
that contribute to reproductive health and well-being."278
Considering that the law is yet to be implemented, there
are no facts from which this court can base its ruling on
the provision. We cannot and must not speculate.
Conscientious objection and religious objection
There is a difference between objections based on one’s
conscience and those based on one’s religion.
Conscience appears to be the broader category.
Objections based on conscience can be unique to the
individual’s determination of what is right or wrong based
on ethics or religion.
Objections based on religion, on the other hand, imply a
set of beliefs that are canonical to an institution or a
movement considered as a religion. Others share
religious belief. Conscientious objection may also include
those whose bases are unique only to the person claiming
the exception. One’s conscience may be shaped by
cultural factors other than religion. It is clear that a
conscientious objector provision whose coverage is too
broad will allow too many to raise exception and
effectively undermine the purpose sought by the law.279
The duty to refer is also found in Section 7 of the law:
SEC. 7. Access to Family Planning. – All accredited public
health facilities shall provide a full range of modern family
planning methods, which shall also include medical
consultations, supplies and necessary and reasonable
procedures for poor and marginal couples having infertility
issues who desire to have children: Provided, That family
planning services shall likewise be extended by private
health facilities to paying patients with the option to grant
free care and services to indigents, except in the case of
non-maternity specialty hospitals and hospitals owned
and operated by a religious group, but they have the
option to provide such full range of modern family
planning methods: Provided, further, That these hospitals
shall immediately refer the person seeking such care and
services to another health facility which is conveniently
accessible: Provided, finally, That the person is not in an
emergency condition or serious case as defined in
Republic Act No. 8344.
x x x x (Emphasis supplied)
The same considerations for individual health
practitioners should apply to private health institutions.
Private health institutions are duty-bound to prioritize the
patient’s welfare and health needs.
Requirements of a challenge based on religion
21
The constitutional provision invoked by petitioners
provides:
Section 5. No law shall be made respecting an
establishment of religion, or prohibiting the free exercise
thereof. The free exercise and enjoyment of religious
profession and worship, without discrimination or
preference, shall forever be allowed. No religious test
shall be required for the exercise of civil or political
rights.280
The provision contains two parts. The first part is the non-
establishment clause.281 This contains a proscription
against the direct or indirect state sponsorship of a
religion and is closely related to another fundamental
tenet in the Constitution, which provides:
Section 6. The separation of Church and State shall be
inviolable.282
The second part is the free exercise of religion clause.283
The protection to "religious profession and worship" is
absolute when it comes to one’s belief or opinion. The
balance between compelling state interests and the
religious interest must, however, be struck when the
"profession and worship" are expressed in conduct which
affect other individuals, the community or the state.
Religious conduct or omissions on the basis of religious
faiths are not absolutely protected.
In Iglesia Ni Cristo v. Court of Appeals,284 this court
reiterated the rule that:
x x x the exercise of religious freedom can be regulated
by the State when it will bring about the clear and present
danger of some substantive evil which the State is duty-
bound to prevent, i.e., serious detriment to the more
overriding interest of public health, public morals, or public
welfare. A laissez faire policy on the exercise of religion
can be seductive to the liberal mind but history counsels
the Court against its blind adoption as religion is and
continues to be a volatile area of concern in our country
today. Across the sea and in our shore, the bloodiest and
bitterest wars fought by men were caused by
irreconcilable religious differences.285
Then in Estrada v. Escritor,286 this court clarified:
Although our constitutional history and interpretation
mandate benevolent neutrality, benevolent neutrality
does not mean that the Court ought to grant exemptions
every time a free exercise claim comes before it. But it
does mean that the Court will not look with hostility or act
indifferently towards religious beliefs and practices and
that it will strive to accommodate them when it can within
flexible constitutional limits; it does mean that the Court
will not simply dismiss a claim under the Free Exercise
Clause because the conduct in question offends a law or
the orthodox view for this precisely is the protection
afforded by the religion clauses of the Constitution, i.e.,
that in the absence of legislation granting exemption from
a law of general applicability, the Court can carve out an
exception when the religion clauses justify it. While the
Court cannot adopt a doctrinal formulation that can
eliminate the difficult questions of judgment in determining
the degree of burden on religious practice or importance
of the state interest or the sufficiency of the means
adopted by the state to pursue its interest, the Court can
set a doctrine on the ideal towards which religious clause
jurisprudence should be directed. We here lay down that
doctrine that in Philippine jurisdiction, we adopt that
benevolent neutrality approach not only because our
constitutional history and interpretation indubitably show
that benevolent neutrality is the launching pad from which
the Court should take off in interpreting religion clause
cases. The ideal towards which this approach is directed
is the protection of religious liberty ‘not only for a minority,
however small – not only for a majority, however large –
but for each of us’ to the greatest extent possible within
flexible constitutional limits.287
The same case also cited the "Lemon test" which states
the rules in determining the constitutionality of laws
challenged for violating the non-establishment of religion
clause:
First, the statute must have a secular legislative purpose;
second, its primary or principal effect must be one that
neither advances nor inhibits religion; x x x finally, the
statute must not foster ‘an excessive entanglement with
religion.288
However, the application of these standards first requires
the existence of an actual case involving (1) a specific
conduct (2) believed to be related to profession or worship
(3) in a specific religion.
The basis for invoking the right to religion is not always
clear. For instance, there is no single definition of religion.
The common dictionary meaning is that it is "an organized
system of beliefs, ceremonies, and rules used to worship
a god or a group of gods."289 Another dictionary meaning
is that "religion may be defined broadly as the human
quest for, experience of, and response to the holy and
sacred."290 An author in a journal on ethics asserts that
"religion is the effective desire to be in right relations to
the power manifesting itself in the universe."291
In Aglipay v. Ruiz,292 this court adopted a bias toward
theistic beliefs when it defined religion "as a profession of
faith to an active power that binds and elevates man to his
Creator x x x."293 But there are beliefs commonly
understood to be religious which are non-theistic. Courts
have grappled with the definition of a religion.294
But these could not be issues in this case because there
are no actual facts upon which we could base our
adjudication.
None of the petitions allege the conduct claimed to be part
of "profession or worship". None of the petitions point to
how this specific conduct relates to a belief or teaching of
a religion. None of the petitions show how fundamental to
the specific religious faith such conduct is.
In other words, the petitions do not show a specific
instance when conscientious objection was availed of as
a result of the exercise of a religion. In this case, we are
asked to evaluate whether the provision that
accommodates conscientious objectors would, in the
future, with unspecified facts, violate the constitutional
provision on religious exercise.
Thus, it is also not clear in the ponencia whether the
provisions on referral by conscientious objectors are
declared unconstitutional for all religions or only for
specific ones. This is the natural result for speculative
cases. This is dangerous constitutional precedent. If the
declaration is for all religions, then this might just result in
a violation of the non-establishment clause. A dominant
majoritarian religion is now aided in imposing its beliefs
not only on patients but also on all those who have
different faiths.
22

Conduct which purport to be religious practice and its
relationship to the fundamental tenets of that religion is a
question of fact which cannot be part of our judicial notice.
Otherwise, we implicitly establish a religion or manifest a
bias towards one in violation of the clear and absolute
separation between church and state.
Contraceptives and Religion
Even the proscription on the use of contraceptives may
not clearly be a religious tenet. We do not have the
competence to assume that it is so.
With respect to the Catholic faith, the comment-in-
intervention of De Venecia, et al. included a history on the
Catholic Church’s changing and inconsistent position
regarding contraceptives, and the notion that every
conjugal act must be for a procreative purpose.
The intervenors asserted that the notion denouncing sex
without procreative intent cannot be found in the old or
new testament. During the church’s existence in the first
few hundred years, the issue of the church was not on the
purpose of the conjugal act but on the specific methods
for contraception as some were associated with
witchcraft.295 The idea that requires the procreative
purpose for the sexual act was not originally Christian but
borrowed from pagan Greek Stoics during the early
second century:
As James Brundage has pointed out, the immediate
source of influence on Christian writers was the pagan
Stoics, whose high ideals for morality challenged the
Christians to copy them or even do better. Natural law or
the law of nature was the basis for these ideals. The
famous Stoic jurist Ulpian supplied to Christian writers
their understanding of natural law. For Ulpian, natural law
consisted in the laws of nature that animals and humans
had in common. Among the domestic animals with which
Ulpian was familiar, the female accepted the male only
when she was in heat. So it was the law of nature for
humans and animals alike that sexual intercourse should
only take place for breeding.296 (Emphasis supplied)
The Catholic Church through Pope Paul VI later secretly
created a Pontifical Commission for the Study of
Population, Family and Births to recommend whether
modern contraceptive methods could be permitted.297
The commission’s final report concluded, by two-third
votes, that "no natural law proscribed non-reproductive
sex and no doctrinal, scientific, medical, social or other
reason existed for the church to continue prohibiting the
use of modern birth control."298
Despite these findings, two ultraconservative members
issued a minority report arguing that "the Vatican’s
authority would be irreparably undermined if it abandoned
a position it had adopted hundreds of years earlier."299
Consequently, Pope Paul VI issued Humanae Vitae
reiterating Pope Pius XI’s 1930 encyclical Casti Connubii
on natural law’s proscription against sex without
procreative intent.300 The commission’s creation and its
reports were leaked to the public, resulting in mass
protests and defiance within the church.301
Intervenors quoted at length a detailed account of these
events surrounding the Casti Connubii and Humanae
Vitae, thus:
Nervous prelates in Rome felt that the pill was just an
excuse to jettison the Vatican's position on birth control,
which was resented and under siege. The euphoria over
new freedoms was part of the social giddiness that
characterized the 1960s, in the church as in the secular
world. It was a time of the sexual revolution, feminism,
and new attitudes toward authority. In this atmosphere,
the papal pronouncements about natural law were
brought under closer scrutiny by natural reason, and they
grew flimsier with every look. There was great fear in the
Curia of the Vatican that this mood would invade the
Council Pope John was assembling (as, in fact, it did).
The whole matter of birth control was considered
especially endangered, and it would be fought over
strenuously in two Roman arenas, one open and one
Secret. The former battle, carried on in the sessions of the
Vatican Council, reached a kind of stalemate in the
conciliar decree on the church in the modern world,
Gaudiumet et Spes. The other battle, waged in secret by
the Pope's own special commission, led to that
commission's stunning defeat by the Pope's own
encyclical Humanae Vitae.302 (Emphasis supplied)
Humanae Vitae
That Pontifical Commission met five times, at first in the
fall of 1963 - six men convening at Louvain. The second
meeting (like all subsequent ones) was in Rome, in the
spring of 1964, attended by the thirteen men. The number
was increased to fifteen for a meeting that summer. Up to
this point, no one had presumed to recommend altering
the church's teaching on contraception. Things changed
at the fourth session, held in the spring of 1965, when the
size of the commission jumped up to fifty- eight, with five
women among the thirty-four lay members. An expert
called in for consultation was John T. Noonan, from Notre
Dame in Indiana, whose study of the church's changing
positions on usury had won scholarly acclaim. He was
working on a similar study of changes in the prohibition of
contraception - a book that would appear just as the
commission was disbanded. Noonan opened the
members' eyes to the way that noninfallible papal
teaching can develop.
Another eye opener was the result of a questionnaire
brought to Rome by the lay couple Pat and Patty Crowley.
They had long been active in the international Christian
Family Movement, and they had surveyed their members
- devout Catholics all - on their experience of the rhythm
method of contraception. They found it far from natural-
Since a woman's period fluctuates with her health,
anxieties, age, and other influences, establishing the
actual infertile period in any cycle required daily charting
of her temperature and close comparative reading of
calendars - and even then the results were not Sure. The
most conscientious catholics, who followed this nervous
procedure with precision, found that it was not certain -
which left them in great fear until the next menstruation
(which might not occur). And in this concentration on the
wife's physical conditions, her psychological patterns - of
fondness, need, crises, travel - had to be ignored or
repressed. The comments of the couples surveyed made
riveting reading in the commission. A husband, a scholar,
wrote:
Rhythm destroys the meaning of sex act; it turns it from a
spontaneous expression of spiritual and physical love into
a mere bodily sexual relief; it makes me obsessed with
sex throughout the month; it seriously endangers my
chastity; it has a noticeable effect upon my disposition
toward my wife and children; it makes necessary my
complete avoidance toward my wife for three weeks at a
23
time. I have watched a magnificent spiritual and physical
union dissipate and, due to rhythm, turn into a tense and
mutually damaging relationship. Rhythm seems to be
immoral and deeply unnatural. It seems to be diabolical.
His wife gave her side of the story:
I find myself sullen and resentful of my husband when the
time of sexual relations finally arrives. I resent his
necessarily guarded affection during the month and I find
I cannot respond suddenly. I find, also, that my
subconscious and unguarded thoughts are inevitably
sexual and time consuming. All this in spite of a great
intellectual and emotional companionship and a generally
beautiful marriage and home life.
The commission was hearing that rhythm made people
obsessed with sex and its mechanics while minority
members at the Council were arguing that rhythm allows
people to escape the merely animal urges and enjoy the
serenity of sexuality transcended. The commission was
also hearing from doctors that nature, of course, provides
women with their greatest sexual desire at just the fertile
time that rhythm marked off bounds.
The combined impact of Noonan's history and the
Crowley's empirical findings made the commission
members - good Catholics all, chosen for their loyalty to
the church - look honestly at the "natural law" arguments
against contraception and see, with a shock, what flimsy
reasoning they had accepted. Sex is for procreation, yes
- but all the time, at each and every act? Eating is for
subsistence. But any food or drink beyond that necessary
for sheer subsistence is not considered mortally sinful. In
fact, to reduce to that animal compulsion would deny
symbolic and spiritual meanings in shared meals - the
birthday party, the champagne victory dinner, the wine at
Cana, the Eucharist itself. Integrity of the act? Is it sinful
to be nourished intravenously when that is called for?
Does that violate the integrity of the eating act? The more
assembled members looked at the inherited "wisdom" of
the church, the more they saw the questionable roots from
which it grew - the fear and hatred of sex, the feeling that
pleasure in it is a biological bribe to guarantee the race's
perpetuation, that any use of pleasure beyond that
purpose is shameful. This was not a view derived from
scripture or from Christ, but from Seneca and Augustine.
The commission members, even trained theologians and
spiritual counselors who had spent years expounding the
church teachings, felt they were looking at reality for the
first time. A cultivated submission to the papacy had been,
for them, a structure of deceit, keeping them from honesty
with themselves, letting them live within a lie. To their
shared surprise they found they were not only willing to
entertain the idea of the church's changing, but felt that it
had to change on this matter, that the truth, once seen,
could no longer be denied. When the nineteen
theologians on the commission, convened for a separate
vote, were asked whether church teaching could change
on contraception, twelve said yes, seven no (including
John Ford, who had joined the commission at this
meeting).
This set off alarm bells in the Vatican. For the next
meeting, the last and the longest, from April to June of
1965, the members of the commission were demoted to
"advisers" (periti) and the commission itself was
constituted of sixteen bishops brought in to issue the final
report. They would listen to those who had done the
actual conferring, and theirs would be the final verdict.
Debate before them would be presided over by Cardinal
Ottaviani of the Holy Office. This bringing in the big guns
would have cowed the members in their first sessions. But
things had gone too far for such intimidation now. The
Crowleys brought another survey with them to the
showdown, this one of 3,000 Catholics - including 290
devout subscribers to the magazine St. Anthony's
Messenger - of whom 63 percent said that rhythm had
harmed their marriage and 65 percent said that it did not
actually prevent conception, even when the right
procedures were followed exactly (even neurotically). Dr.
Albert Gorres spoke of the self- censorship Catholics had
exercised over themselves - something the members
recognized in their lives when it was pointed out. The
Jesuit priest Josef Fuchs, who had taught Casti Connubii
standards for twenty years, said he was withdrawing his
moral textbook and resigning his teaching post at the
Gregorian University in Rome now that he could no longer
uphold what he was asked to profess. The vote of the
theologians who were presenting their findings to the
bishops was now fifteen to four against the claim that
conception is intrinsically evil. The vote of the larger group
was thirty to five.
Here was a perfect laboratory test of the idea that
contraception is against nature, as that can be perceived
by natural reason alone. These people were all educated,
even expert. They were Catholics in good standing (they
had been chosen on those grounds). They had been
conditioned all their lives to accept the church’s teaching
- in fact they had accepted it in the past. They of all people
would entertain the official case with open minds. They
had no malice against church authorities - most of them
had devoted much (if not all) of their lives to working with
them. Most had entered the project either agreeing with
the papal position or thinking that it was unlikely to
change. Now they found themselves agreeing that
change was not only necessary but inevitable. They had
trouble imagining how they had ever thought otherwise.
Cardinal Suenens explained how they had been
conditioned to have a double consciousness, to live a lie:
For years theologians have had to come up with
arguments on behalf of a doctrine they were not allowed
to contradict. They had an obligation to defend the
received doctrine, but my guess is they already had many
hesitations about it inside. As soon as the question was
opened up a little, a whole group of moralists arrived at
the position defended by the majority here. . . The bishops
defended the classical position, but it was imposed on
them by authority. The bishops didn't study the pros and
cons. The received directives, they bowed to them, and
they tried to explain them to their congregations.
As soon as people began to think independently about the
matter, the whole structure of deceit crumbled at the
touch. The past position could not be sustained, even
among these people picked by the Vatican itself, much
less among Catholics not as committed as these were.
And it was absurd to speak of the non-Catholic world as
ever recognizing this "natural law of natural reason."
The need to face the prospect of change was impressed
on the people in the commission by the arguments of the
five theologians defending Casti Connubii. They reduced
their own case to absurdities. John Ford said that
intercourse is not necessary for marital love: "Conjugal
love is above all spiritual (if the love is genuine) and it
requires no specific carnal gesture, much less its
repetition in some determined frequency." Ford also liked
to say that, if the teaching on sexual activity only for
procreation were changed, people could rnasturbate with
impunity. Dr. Gorres quoted the Melchite Patriarch,
24
Maximos IV, who said in the Council deliberations that
priests display a "celibate psychosis" in the area of sex.
***
The climactic vote of the commission - the one of the
sixteen bishops - was nine to three for changing the
church's position on contraception, with three
abstentions. An agreement had been reached before the
vote was taken to submit only one report for the
commission, but Cardinal Ottaviani and Father Ford,
seeing how things were going, had prepared a document
of their own, which would later be misrepresented as an
official minority document. There was only one official
document, the sole one voted on by the bishops who had
authority to report the body's findings. (Ottaviani was the
one who had brought in these officials, hoping to get the
result he wanted. When he failed to, he ignored his own
device.)
The Ford "report", drawn up with Germain Grisez, said
that any change was inconceivable. This was not because
there were rational arguments against change: "If we
could bring forward arguments which are clear and cogent
based on reason alone, it would not be necessary for our
Commission to exist, nor would the present state of affairs
exist in the church." No, the real reason to keep the
teaching was that it was the teaching: "The Church could
not have erred though so many centuries, even through
one century, by imposing under serious obligations very
grave burdens the name of Jesus Christ, if Jesus Christ
did not actually impose these burdens." As a priest had
put it in earlier debate, if the church sent all those souls to
hell, it must keep maintaining that that is where they are.
This was not an argument that made sense, at this point,
to the commission - to bishops any more than to the
theologians or lay experts. But it was the one argument
that, in the end, mattered to Paul VI. He took advantage
of the so-called "minority report" to say that he could not
accept the commission's findings since there had been
disagreement with it. Nine of the twelve bishops, fifteen of
the nineteen theologians, and thirty of the thirty-five
nonepiscopal members of the commission were not
enough for him. Votes on the decrees in the Council had
not been unanimous either, but he did not call them invalid
for that reason. Paul's real concern was with the
arguments that Ottaviani brought to him after the report
was submitted. He knew what was worrying the Pope,
and could play on that. F.X. Murphy had observed one
thing about Paul's behavior throughout the meetings of
the Council:
The Pope was a man obviously torn by doubts, tormented
by scruples, haunted by thoughts of perfection, and above
all dominated by an exaggerated concern - some called it
an obsession - about the prestige of his office as Pope.
His remarks on this score at times displayed an almost
messianic fervor, a note missing in the more sedate
utterances of his predecessors. His innumerable
statements on the subject were made on almost every
occasion, from casual week-day audiences of Sunday
sermons from the window of his apartment to the most
solemn gatherings in season and out of season. Since it
was part of the strategy of the [conciliar] minority to
accuse the majority of disloyalty toward the Holy Father'
Paul's constant harping-in inevitably caused the majority
to think that he perhaps did share these misgivings, at
least to a certain extent. It was noticed by students of
Paul’s remarks that while he showed an open-
mindedness about almost any other subject, on the single
theme of the papacy his mind remained strangely closed
to analysis.
Those words were written before Humanae Vitae was
issued, but they explain the letter entirely.
The commission members left their work convinced that
the pope could no longer uphold a discredited teaching.
When the report was leaked to the press, Catholics
around the world took heart at the signs of change. So far
from upsetting their faith, as the Pope feared, it heartened
them. What would unsettle their faith was what Paul did
next - issue Humanae Vitae, with its reiteration of Casti
Connubii's ban: ('The church, calling men back to the
observance of the natural law, as interpreted by its
constant doctrine, teaches that each and every marriage
act must remain open to the transmission of life."
Catholics responded with an unparalleled refusal to
submit. Polls registered an instant noncompliance with
the encyclical. At a previously scheduled Catholic festival
of devout young Germans at Essen, a resolution that
those attending could not obey the encyclical passed
through a crowd of four thousand with only ninety
opposing votes. A simultaneous poll among German
Catholics at large found that 68 percent of them thought
the Pope was wrong on contraception. Similar findings
rolled in from around the world.
What were bishops to do? The encyclical itself had
ordered them to explain and enforce the Pope’s decision,
along with all priests:
Be the first to give, in the exercise of your ministry, the
example of loyal internal and external obedience to the
teaching authority of the Church. . . it is of the utmost
importance, for peace, of consciences and for the unity of
the Christian People, that in the field of morals as well as
in that of dogma, all should attend to the magisterium of
the Church, and all should speak the same language.
But for the first time in memory, bishop's statements, while
showing respect for the encyclical, told believers they
could act apart from it if they felt bound by conscience to
do so. The assembly of bishops in the Netherlands put it
most bluntly: "The assembly considers that the
encyclical's total rejection of contraceptive methods is not
convincing on the basis of the arguments put forward."
other Episcopal panels were more circumspect, but
signaled that they would not consider those disobedient
to the encyclical to be separating themselves from the
sacraments. The Belgian bishops put it this way:
"Someone, however, who is competent in the matter
under consideration and capable of forming a personal
and well-founded judgment - which necessarily
presupposes a sufficient amount of knowledge - may,
after serious examination before God, come to other
conclusions on certain points." In other words: do not treat
the Pope's words lightly, but follow your conscience after
taking a serious look at them. That was the position taken
by bishops in the United States ("the norms of licit dissent
come into play"), Austria, Brazil, Czechoslovakia, Mexico,
[] West Germany, Japan, France, Scandinavia, and
Switzerland. The Scandinavian statement was typical:
Should someone, however, for grave and carefully
considered reasons, not feel able to subscribe to the
arguments of the encyclical, he is entitled, as has been
constantly acknowledged, to entertain other views than
those put forward in a non-infallible declaration of the
Church. No one should, therefore, on account of such
diverging opinions along, be regarded as an inferior
Catholic.
25
The Pope was stunned. He would spend the remaining
ten years of his pontificate as if sleepwalking, unable to
understand what had happened to him, why such open
dissent was entertained at the very top of the episcopate.
Four years after the publication of Humanae Vitae, when
the Pope looked "cautious, nervous, anxious, alarmed,"
he deplored the defiance of church teaching in a sermon
at Saint Peter's, and this was the only explanation he
could come up with for the defiance: "Through some crack
in the temple of God, the smoke of Satan has entered'"
He was increasingly melancholy and prone to tears. Had
he opened that crack in the temple of God? Even as a
nagging suspicion this was a terrible burden to bear. It
explains the atmosphere of darkening tragedy that hung
about his final years. He would not issue another
encyclical in all those ten years. He was a prisoner of the
Vatican in a way that went beyond his predecessors'
confinement there. He was imprisoned in its structures of
deceit. Meanwhile, Father Ford, who had assisted his
fellow Jesuit Gustave Martelet in drawing up Humanae
Vitae under Cardinal Ottaviani's direction, went back to
the seminary where he had taught moral theology for
years and found that the Jesuit seminarians their refused
to take his classes, since they knew from others in the
Order what he had done in Rome. As a result of what he
considered his life's great coup, his teaching career was
over.303 (Emphasis supplied)
Intervenors even alleged that as early as 1999, "nearly
80% of Catholics believed that a person could be a good
Catholic without obeying the church hierarchy’s teaching
on birth control."304 They, therefore, put in issue whether
the views of petitioners who are Catholics represent only
a very small minority within the church.
We cannot make any judicial determination to declare the
Catholic Church’s position on contraceptives and sex.
This is not the forum to do so and there is no present
controversy—no contraceptive and no individual that has
come concretely affected by the law.
This court must avoid entering into unnecessary
entanglements with religion. We are apt to do this when,
without proof, we assume the beliefs of one sect or group
within a church as definitive of their religion. We must not
assume at the outset that there might be homogeneity of
belief and practice; otherwise, we contribute to the State’s
endorsement of various forms of fundamentalism.305
It is evident from the account quoted above giving the
historical context of the contraceptives controversy that
the Catholic church may have several perspectives and
positions on the matter. If this is so, then any declaration
of unconstitutionality on the basis of the perceived
weaknesses in the way conscientious objectors are
accommodated is premature.
VI
Family
There being no actual case or controversy, the petitions
also do not provide justification for this court to declare as
unconstitutional Section 23(2)(i) of the RH Law on
spousal consent, and Section 7, paragraph 2 on parental
consent. These provisions read:
SEC 23. Prohibited Acts. – The following acts are
prohibited:
(a) Any health care service provider, whether public or
private, who shall:
xxxx
(2) Refuse to perform legal and medically-safe
reproductive health procedures on any person of legal
age on the ground of lack of consent or authorization of
the following persons in the following instances:
(i) Spousal consent in case of married persons: Provided,
That in case of disagreement, the decision of the one
undergoing the procedure shall prevail; and
SEC. 7. Access to Family Planning – x x x
No person shall be denied information and access to
family planning services, whether natural or artificial:
Provided, That minors will not be allowed access to
modern methods of family planning without written
consent from their parents or guardian/s except when the
minor is already a parent or has had a miscarriage.
Spousal Consent
According to petitioners Millennium Saint Foundation,
Inc., et al., "while both play equal roles in procreation, the
man or the husband is violated of his right of conjugal
decisions when it is the woman’s decision that will be
followed whether to avail of contraceptives or not."306
Petitioners Couples for Christ Foundation, Inc., et al.
argued that "the [reproductive health] procedure does not
involve only the body of the person undergoing the
procedure [as] it affects the future of the family (in terms
of its size or even the presence of children) as well as the
relationship between spouses."307
The ponencia agreed and discussed how "giving absolute
authority to the spouse who would undergo a procedure,
and barring the other spouse from participating in the
decision would drive a wedge between the husband and
wife, possibly result in bitter animosity, and endanger the
marriage and the family, all for the sake of reducing the
population."308 The ponencia cited the constitutional
mandate of the state to defend the "right of spouses to
found a family x x x."309
These provisions of Republic Act No. 10354 do not
threaten nor violate any right, even the right to family.
Section 23(a)(2)(i) applies to a specific situation: when
there is a disagreement between married persons
regarding the performance of a "legal and medically-safe
reproductive health procedure."
The general rule encourages married persons to discuss
and make a conjugal decision on the matter. They are
caught in a problem when they disagree. This agreement
may fester and cause problems within their family.
The disagreement will not be created by the RH Law. It
will exist factually regardless of the law. Section
23(a)(2)(i) of the law becomes available to break this
deadlock and privilege the decision of the spouse
undergoing the procedure.
This is logical since the reproductive health procedures
involve the body, health and well being of the one
undergoing the procedure.
The marriage may be a social contract but is certainly not
a talisman that removes the possibility of power
relationships. Married persons, especially the
26
woman/wife, can still suffer inequality. Married persons
may still experience spousal abuse.
Generally, it will be the woman who will ask to undergo
reproductive health procedures. The interpretation of the
majority therefore affects her control over her body.
Rather than enhance the zones of autonomy of a person
even in a married state, the interpretation of the majority
creates the woman’s body as a zone of contestation that
gives the upper hand to the husband.
The majority derives the right to a family from Article XV
and reads it in isolation from all the other provisions of the
Constitution. In my view, these rights should be read in
relation to the other provisions.
Article XV reads:
The Family
Section 1. The State recognizes the Filipino family as the
foundation of the nation. Accordingly, it shall strengthen
its solidarity and actively promote its total development.
Section 2. Marriage, as an inviolable social institution, is
the foundation of the family and shall be protected by the
State.
Section 3. The State shall defend:
(1) The right of spouses to found a family in accordance
with their religious convictions and the demands of
responsible parenthood;
(2) The right of children to assistance, including proper
care and nutrition, and special protection from all forms of
neglect, abuse, cruelty, exploitation, and other conditions
prejudicial to their development;
(3) The right of the family to a family living wage and
income; and
(4) The right of families or family associations to
participate in the planning and implementation of policies
and programs that affect them.
The ponencia cites Morfe v. Mutuc310 on the protected
zone of marital privacy. This case is not in point. It does
not apply to a conflict between the spouses. It applies in
declaring a zone of privacy of spouses vis-à-vis state
action.
Citing Griswold v. Connecticut, the court said:
The Griswold case invalidated a Connecticut statute
which made the use of contraceptives a criminal offense
on the ground of its amounting to an unconstitutional
invasion of the right of privacy of married persons;
rightfully it stressed ‘a relationship lying within the zone of
privacy created by several fundamental constitutional
guarantees’. So it is likewise in our jurisdiction. The right
to privacy as such is accorded recognition independently
of its identification with liberty; in itself, it is fully deserving
of constitutional protection. The language of Prof.
Emerson is particularly apt: ‘The concept of limited
government has always included the idea that
governmental powers stop short of certain intrusions into
the personal life of the citizen. This is indeed one of the
basic distinctions between absolute and limited
government. Ultimate and pervasive control of the
individual, in all aspects of his life, is the hallmark of the
absolute state. In contrast, a system of limited
government safeguards a private sector, which belongs
to the individual, firmly distinguishing it from the public
sector, which the state can control Protection of this
private sector – protection, in other words, of the dignity
and integrity of the individual – has become increasingly
important as modern society has developed. All the forces
of a technological age – industrialization, urbanization,
and organization – operate to narrow the area of privacy
and facilitate intrusions into it. In modern terms, the
capacity to maintain and support this enclave of private
life marks the difference between a democratic and a
totalitarian society.’311 (Emphasis supplied)
This is one view. It did not take into consideration the
state’s interest in ensuring human rights and the
fundamental equality of women and men.
The right to a family should be read in relation to several
provisions in the Constitution that guarantee the
individual’s control over her or his own person. Thus,
Article III, Section 1 of the Constitution states:
Section 1. No person shall be deprived of life, liberty, or
property without due process of law, nor shall any person
be denied the equal protection of the laws.
This due process clause implies and congeals a person’s
right to life. This includes the individual’s right to existence
as well as her or his right to a quality of life of her or his
choosing. The State is not to sanction a program or an act
that deprives the individual of her or his control over her
or his life and body. The "equal protection" clause in this
provision ensures that individuals, even those that enter
into a married state, do not coexist and suffer under
conditions of marital inequality.
Article II elaborates on the positive obligation of the State
to the right to life as embodied in the due process clause
in two sections. Sections 9 and 11 provide:
Section 9. The State shall promote a just and dynamic
social order that will ensure the prosperity and
independence of the nation and free the people from
poverty through policies that provide adequate social
services, promote full employment, a rising standard of
living, and an improved quality of life for all.
Section 11. The State values the dignity of every human
person and guarantees full respect for human rights.
(Emphasis supplied)
Section 14 of the same article also improves on the goal
of equality of men and women. While section 1 provides
for equal protection of the laws, this section creates a
positive duty on the State as follows:
Section 14. The State recognizes the role of women in
nation-building, and shall ensure the fundamental equality
before the law of women and men. (Emphasis supplied)
The fundamental equality of women and men, the
promotion of an improved quality of life, and the full
respect for human rights do not exist when a spouse is
guaranteed control the other spouse’s decisions
respecting the latter’s body.
The autonomy and importance of family should not be
privileged over the privacy and autonomy of a person.
Marriage is not bondage that subordinates the humanity
of each spouse. No person should be deemed to concede
her or his privacy rights and autonomy upon getting
married.312
27
By declaring Section 23(a)(2)(i) as unconstitutional, the
majority interprets the privacy and autonomy of the family
as also providing insulation of patriarchal or sexist
practices from state scrutiny.313 This is not what the
Constitution intends.
Parental Consent
The ponencia and the majority declared Section 7 of
Republic Act No. 10354 unconstitutional for violating the
right to privacy as the provision dispensed with the written
parental consent for minors who are already parents or
those who have had a miscarriage to access modern
methods of family planning. Justice Reyes in his
concurring and dissenting opinion is also of the view that
Section 7 is violative of Article II, Section 12 of the
Constitution on the parents’ natural and primary right and
duty to nurture their children.
I disagree with both the ponencia and Justice Reyes’
views.
In declaring its unconstitutionality, the ponencia stated:
Equally deplorable is the debarment of parental consent
in cases where the minor, who would be undergoing a
procedure, is already a parent or has had a miscarriage.
xxx
xxxx
There can be no other interpretation of this provision
except that when a minor is already a parent or has had
a miscarriage, the parents are excluded from the decision
making process of the minor with regard to family
planning. Even if she is not yet emancipated, the parental
authority is already cut off just because there is a need to
tame population growth.
xxxx
To insist on a rule that interferes with the right of parents
to exercise parental control over their minor-child or the
right of the spouses to mutually decide on matters which
very well affect the very purpose of marriage, that is, the
establishment of conjugal and family life, would result in
the violation of one's privacy with respect to his family. It
would be dismissive of the unique and strongly-held
Filipino tradition of maintaining close family ties and
violative of the recognition the State affords couples
entering into the special contract of marriage [that they
act] as one unit in forming the foundation of the family and
society.314
Justice Reyes, in striking down the exception to the
required written parental consent for minors under
Section 7, paragraph 2, also states:
[t]here exists no substantial distinction as between a
minor who is already a parent or has had a miscarriage.
There is no cogent reason to require a written parental
consent for a minor who seeks access to modern family
planning methods and dispense with such requirement if
the minor is already a parent or has had a miscarriage.
Under the Family Code, all minors, generally, regardless
of his/her circumstances, are still covered by the parental
authority exercised by their parents. That a minor who is
already a parent or has had a miscarriage does not
operate to divest his/her parents of their parental
authority; such circumstances do not emancipate a
minor.315
The ponencia, however, clarified that access to
information about family planning must be differentiated
from access to reproductive health methods.316 Further,
it said that there must be an exception with respect to life-
threatening cases. In which case, the minor’s life must be
safeguarded regardless of whether there is written
parental consent.317
This provision has an exceptional application – when
minors are already parents or when the minor has
miscarried before. The proviso inserted by the legislature
should be presumed to be based on a well-founded policy
consideration with regard to the peculiar situation of
minors who are already parents or those who have
experienced miscarriages. As I have stressed earlier, it
has been the policy of the courts in this jurisdiction to:
x x x avoid ruling on constitutional questions and to
presume that the acts of the political departments are
valid in the absence of a clear and unmistakable showing
to the contrary. To doubt is to sustain. This presumption
is based on the doctrine of separation of powers which
enjoins upon each department a becoming respect for the
acts of the other departments. The theory is that as the
joint act of Congress and the President of the Philippines,
a law has been carefully studied and determined to be in
accordance with the fundamental law before it was finally
enacted.318
Rather than assume homogenous choices of family
relationships on the basis of a speculative belief relating
to "close family ties," the better part of prudence and
wisdom from this Court would be to consider a more
cosmopolitarian reality. There are traditional and non-
traditional families. Many of these arrangements of family
are the result of free human choices that go through a
gamut of emotional conflicts. Teenage pregnancy, like
many other life defining events, do take their toll on family.
We cannot speculate—for now—as to how families will
deal with these stresses. We cannot speculate on why
these pregnancies happen.
Those of us who have not and can never go through the
actual experience of miscarriage by a minor, those of us
who cannot even imagine the pain and stresses of
teenage pregnancy, should not proceed to make blanket
rules on what minors could do in relation to their parents.
None of us can say that in all cases, all parents can be
understanding and extend sympathy for the minors that
are legally under their care. None of us can say that there
are instances when parents would think that the only way
to prevent teenage pregnancy is a tongue lashing or
corporeal punishment. We cannot understand reality only
from the eyes of how we want it to be.
Only when we are faced with an actual controversy and
when we see the complications of a real situation will we
be able to understand and shape a narrowly tailored
exception to the current rule. In the meantime, the wisdom
of all the members of the House of Representative, the
Senate, and the President have determined that it would
be best to give the minor who is already a parent or has
undergone a miscarriage all the leeway to be able to
secure all the reproductive health technologies to prevent
her difficulties from happening again. We must stay our
hand for now.
VII
Separation of Powers
28
Justice del Castillo is of the view that based on our power
to "promulgate rules for the protection and enforcement of
constitutional rights" under Article VIII, Section 5(5) of the
Constitution, we have the power to issue directives to
administrative bodies as to "the proper rules" that they
should promulgate in the exercise of the powers granted
to them.319
He cites Echegaray v. Secretary of Justice,320 thus:
The 1987 Constitution molded an even stronger and more
independent judiciary. Among others, it enhanced the rule
making power of this Court. Its Section 5(5), Article VIII,
provides:
xxx xxx xxx
"Section 5. The Supreme Court shall have the following
powers:
xxx xxx xxx
(5) Promulgate rules concerning the protection and
enforcement of constitutional rights, pleading, practice
and procedure in all courts, the admission to the practice
of law, the Integrated Bar, and legal assistance to the
underprivileged. Such rules shall provide a simplified and
inexpensive procedure for the speedy disposition of
cases, shall be uniform for all courts of the same grade,
and shall not diminish, increase, or modify substantive
rights. Rules of procedure of special courts and quasi-
judicial bodies shall remain effective unless disapproved
by the Supreme Court."
The rule making power of this Court was expanded. This
Court for the first time was given the power to promulgate
rules concerning the protection and enforcement of
constitutional rights. The Court was also granted for the
first time the power to disapprove rules of procedure of
special courts and quasi-judicial bodies. x x x321
He believes that we have the power to approve or modify
such rules or require them to issue rules for the protection
of constitutional rights. He states:
Viewed in light of the broad power of the Court to issue
rules for the protection and enforcement of constitutional
rights, the power to disapprove the rules of procedure of
quasi-judicial bodies is significant in that it implies the
power of the Court to look into the sufficiency of such rules
of procedure insofar as they adequately protect and
enforce constitutional right. Moreover, the power to
disapprove the aforesaid rules of procedure necessarily
includes or implies the power to approve or modify such
rules or, on the one extreme, require that such rules of
procedure be issued when necessary to protect and
enforce constitutional rights. In other words, within and
between the broader power to issue rules for the
protection and enforcement of constitutional rights and
the narrower power to disapprove the rules of procedure
of quasi-judicial bodies, there exists penumbras of the
power that the Court may exercise in order to protect and
enforce constitutional rights.
xxxx
Taken together [with Article VIII, Section 1 of the
Constitution], the expanded jurisdiction of the Court and
the power to issue rules for the protection and
enforcement of constitutional rights provide the bases for
the Court (1) to look into the sufficiency of safeguards in
the implementation of the RH Law insofar as it will
adversely affect the right to life of the unborn, and (2) to
issue such orders as are necessary and essential in order
to protect and enforce the constitutional right to life of the
unborn. x x x322 (Emphasis supplied)
For this reason, it is suggested that "x x x the Court x x x
issue an order:
(1) directing the FDA to formulate the rules of procedure
in the screening, evaluation and approval of all
contraceptives that will be used under the RH Law;
(2) the rules of procedure shall contain the following
minimum requirements of due process:
(a) publication, notice and hearing,
(b) the Solicitor General shall be mandated to represent
the unborn and the State’s interest in the protection of the
life of the unborn,
(c) interested parties shall be allowed to intervene,
(d) the standard laid down in the Constitution, as adopted
under the RH Law, as to what constitute allowable
contraceptives shall be strictly followed, i.e., those which
do not harm or destroy the life of the unborn from
conception/fertilization,
(e) in weighing the evidence, all reasonable doubts shall
be resolved in favour of the right to life of the unborn from
conception/fertilization, and
(f) the other requirements of administrative due process,
as summarized in Ang Tibay, shall be complied with.
The FDA should be directed to submit these rules of
procedure within 30 days from receipt of the Court’s
decision, for the Court’s appropriate action.323
The issue in Echegaray was whether the Supreme Court
has jurisdiction to control the execution and enforcement
of its judgment. The discussion on the expanded powers
of the Supreme Court in Section 5(5) of Article VIII of the
Constitution was made in this context. It is not to be taken
as justification for the Court to usurp powers vested upon
other departments. Thus, after this Court in that case said
that "[t]he Court was x x x granted for the first time the
power to disapprove rules of procedure of special courts
and quasi-judicial bodies[,]" it continued with the
statement:
x x x But most importantly, the 1987 Constitution took
away the power of the Congress to repeal, alter, or
supplement rules concerning pleading, practice and
procedure. In fine, the power to promulgate rules of
pleading, practice and procedure is no longer shared by
this Court with the Congress, more so with the Executive.
If the manifest intent of the 1987 Constitution is to
strengthen the independence of the judiciary, it is inutile
to urge, as public respondents do, that this Court has no
jurisdiction to control the process of execution of its
decisions, a power conceded to it and which it has
exercised since time immemorial.
To be sure, it is too late in the day for public respondents
to assail the jurisdiction of this Court to control and
supervise the implementation of its decision in the case at
bar. x x x324 (Emphasis supplied)
This court’s power to "promulgate rules for the protection
and enforcement of constitutional rights" as stated in
29
Article VIII, Section 5(5) of the Constitution must be
harmonized with the rest of the provision, which provides:
Section 5. The Supreme Court shall have the following
powers:
xxxx
5. Promulgate rules concerning the protection and
enforcement of constitutional rights, pleading, practice,
and procedure in all courts, the admission to the practice
of law, the integrated bar, and legal assistance to the
under-privileged. Such rules shall provide a simplified and
inexpensive procedure for the speedy disposition of
cases, shall be uniform for all courts of the same grade,
and shall not diminish, increase, or modify substantive
rights. Rules of procedure of special courts and quasi-
judicial bodies shall remain effective unless disapproved
by the Supreme Court. (Emphasis supplied)
The court’s power to issue rules, including rules
concerning the protection and enforcement of
constitutional rights, is limited to judicial procedures. We
do not have competence to compel the issuance of
administrative procedures. Rules of procedure of quasi-
judicial bodies can only be disapproved by the Supreme
Court, but not issued, modified or approved by it.
The Constitution vests the executive power upon the
President. He or she, and not the judiciary, exercises the
power of control over all executive departments, bureaus
and offices,325 including the Food and Drug
Administration. The judiciary has no administrative power
of control or supervision over the Food and Drug
Administration.
Insisting that we can impose, modify or alter rules of the
Food and Drug Administration is usurpation of the
executive power of control over administrative agencies.
It is a violation of the principle of separation of powers,
which recognizes that "[e]ach department of the
government has exclusive cognizance of matters within
its jurisdiction, and is supreme within its own sphere."326
The system of checks and balances only allows us to
declare, in the exercise of our judicial powers, the Food
and Drugs Administration’s acts as violative of the law or
as committed with grave abuse of discretion.327 Such
power is further limited by the requirement of actual case
or controversy.328
FINAL NOTE
It is not the Supreme Court alone that can give the full
substantive meaning of the provisions of the Constitution.
The rules that aid in reshaping social reality as a result of
the invocation and interpretation of constitutional
provisions should be the product of the interrelationship
of all constitutional organs.
This case presents us with an opportunity to clearly define
our role. We have the power to declare the meanings of
constitutional text with finality. That does not necessarily
mean that we do not build on the experience of the other
departments and organs of government. We are part of
the constitutional design that assures that the sovereign
people’s will is vetted in many ways. Deference to the
outcome in legislative and executive forums when there
is no "actual case or controversy" is also our constitutional
duty.
Judicial deference implies that we accept that
constitutional role that assures democratic deliberation to
happen in political forums. It proceeds from an
understanding that even as we labor and strive for
wisdom, we will never be the repository of all of it. Our
status as members of this court is likewise no blanket
license to impose our individual predilections and
preferences. Contrary to an esteemed colleague, our
privileges do not include such judicial license.
The judicial temperament is one that accepts that wisdom
is better achieved by the collective interaction of the
constitutional bodies. We have no unbounded license to
simply act when we want to. That judicial temperament
ensures the Rule of Law.
The President approved the Responsible Parenthood and
Reproductive Health Act of 2012 or Republic Act No.
10354 on December 21, 2012. It now defines the political
consensus within Congress and with the President. The
law took five (5) Congresses or not less than thirteen (13)
years to complete.329 Plenary debates in both the House
of Representatives and in the Senate were covered live
by public television.
Whole communities were riveted by the debates.
Newspaper columnists weighed in with their ideas. Public
forums were filled with heated discussion on the merits
and demerits of every provision. Catholic pulpits were
used to express opinion. Various forms of democratic
deliberation and debate translated to political positions of
legislators. Many of these positions were informed by their
interpretation of the Constitution and the needs of their
communities. This, in turn, formed into the present
provisions of this law.
The petitioners come to us after having lost the majority
in full democratic deliberation in the halls of Congress.
They ask us to read the provisions of the law and the
implementing rules. Without the benefit of an actual
controversy regarding conflicting rights arising from real
facts, they ask us to declare various provisions formulated
by the legislature as unconstitutional. In effect, they ask
us to continue to reshape the political consensus. In
effect, they ask us to render an advisory opinion, and on
that basis, refine the law.
This is not what we do.
Courts act on conflict of rights arising from actual facts
and events. We do not resolve moral, philosophical or
even legal issues barren of facts.
Unwanted pregnancies may result in clinical
complications and deaths of women during childbirth,330
of the fetus while inside the womb331 and of infants soon
after they are born.332 Unwanted pregnancies may be
the result of lack of knowledge of the consequences of the
sexual act, or it could be due to the lack of information and
access to safe and effective reproductive technologies.
The law impliedly accepts that the choice of intimate
relationships is better left to the individual and the
influences of their culture, their family, and their faiths.
The law acknowledges the differential impact of lack of
knowledge and access to reproductive health
technologies between the rich and the poor.333 It,
therefore, requires that proper information and access be
made more available to those who need it. It mandates
the government to intervene at least in order to provide
the right information and, when requested and without
coercion, provide access.
30
The law assumes that informed choices provide greater
chances for a better quality of life for families. The law
actively intervenes so that government itself can provide
these choices so that the quality of life improves. More
than corporeal existence, it hopes to assure human
dignity.

I dissent from the majority's position that we can review

the law. I dissent more vigorously from the majority's
ruling that some provisions are declared unconstitutional
on the basis of speculative facts. In my view, this law
needs to be fully implemented.

Petitioners have come before us driven by their unfailing

belief in the moral rightness of their faith and their causes.
Their faith is not to be questioned. Their conviction is
solid. But these cases are premature.

But, they are not the only ones who may be affected. They
cannot speak for everyone.

There are many burdened mothers who can barely feed

their children.

There are mothers who have had to undergo abortion

whether intended or unintended because of the
unavailability of information and access to contraception
should they have had the right information.

There are mothers who died at childbirth because their

pregnancy or their poverty was not their choice.

There are impoverished mothers and fathers who

helplessly bore the deaths of their children.

They cannot speak. Because of the dominant morality

that surround them, many choose not to speak.

All bear their own unspeakable reality. This law may just
be the hope that they deserve.

ACCORDINGLY, I vote to DISMISS these petitions. This

law, in my view, gives them a chance. It should be
implemented in full.

MARVIC MARIO VICTOR F. LEONEN

Associate Justice

31
PREMATURITY:
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-5279 October 31, 1955
PHILIPPINE ASSOCIATION OF COLLEGES AND
UNIVERSITIES, ETC., petitioner,
vs.
SECRETARY OF EDUCATION and the BOARD OF
TEXTBOOKS, respondents.
Manuel C. Briones, Vicente G. Sinco, Manuel V. Gallego
and Enrique M. Fernando for petitioner.
Office of the Solicitor General Pompeyo Diaz and
Assistant Solicitor General Francisco Carreon for
respondents.
BENGZON, J.:
The petitioning colleges and universities request that Act
No. 2706 as amended by Act No. 3075 and
Commonwealth Act No. 180 be declared unconstitutional,
because: A. They deprive owners of schools and colleges
as well as teachers and parents of liberty and property
without due process of law; B. They deprive parents of
their natural rights and duty to rear their children for civic
efficiency; and C. Their provisions conferring on the
Secretary of Education unlimited power and discretion to
prescribe rules and standards constitute an unlawful
delegation of legislative power.
A printed memorandum explaining their position in
extenso is attached to the record.
The Government's legal representative submitted a
mimeographed memorandum contending that, (1) the
matter constitutes no justiciable controversy exhibiting
unavoidable necessity of deciding the constitutional
questions; (2) petitioners are in estoppel to challenge the
validity of the said acts; and (3) the Acts are
constitutionally valid.
Petitioners submitted a lengthy reply to the above
arguments.
Act No. 2706 approved in 1917 is entitled, "An Act making
the inspection and recognition of private schools and
colleges obligatory for the Secretary of Public Instruction."
Under its provisions, the Department of Education has, for
the past 37 years, supervised and regulated all private
schools in this country apparently without audible protest,
nay, with the general acquiescence of the general public
and the parties concerned.
It should be understandable, then, that this Court should
be doubly reluctant to consider petitioner's demand for
avoidance of the law aforesaid, specially where, as
respondents assert, petitioners suffered no wrong—nor
allege any—from the enforcement of the criticized statute.
It must be evident to any one that the power to declare a
legislative enactment void is one which the judge,
conscious of the fallability of the human judgment, will
shrink from exercising in any case where he can
conscientiously and with due regard to duty and official
oath decline the responsibility. (Cooley Constitutional
Limitations, 8th Ed., Vol. I, p. 332.)
When a law has been long treated as constitutional and
important rights have become dependent thereon, the
Court may refuse to consider an attack on its validity. (C.
J. S. 16, p. 204.)
As a general rule, the constitutionality of a statute will be
passed on only if, and to the extent that, it is directly and
necessarily involved in a justiciable controversy and is
essential to the protection of the rights of the parties
concerned. (16 C. J. S., p. 207.)
In support of their first proposition petitioners contend that
the right of a citizen to own and operate a school is
guaranteed by the Constitution, and any law requiring
previous governmental approval or permit before such
person could exercise said right, amounts to censorship
of previous restraint, a practice abhorent to our system of
law and government. Petitioners obviously refer to section
3 of Act No. 2706 as amended which provides that before
a private school may be opened to the public it must first
obtain a permit from the Secretary of Education. The
Solicitor General on the other hand points out that none
of the petitioners has cause to present this issue, because
all of them have permits to operate and are actually
operating by virtue of their permits.1 And they do not
assert that the respondent Secretary of Education has
threatened to revoke their permits. They have suffered no
wrong under the terms of law—and, naturally need no
relief in the form they now seek to obtain.
It is an established principle that to entitle a private
individual immediately in danger of sustaining a direct
injury as the result of that action and it is not sufficient that
he has merely a general to invoke the judicial power to
determine the validity of executive or legislative action he
must show that he has sustained or is interest common to
all members of the public. (Ex parte Levitt, 302 U. S. 633
82 L. Ed. 493.)
Courts will not pass upon the constitutionality of a law
upon the complaint of one who fails to show that he is
injured by its operation. (Tyler vs. Judges, 179 U. S. 405;
Hendrick vs. Maryland, 235 U. S. 610; Coffman vs.
Breeze Corp., 323 U. S. 316-325.)
The power of courts to declare a law unconstitutional
arises only when the interests of litigant require the use of
that judicial authority for their protection against actual
interference, a hypothetical threat being insufficient.
(United Public Works vs. Mitchell, 330 U .S. 75; 91 L. Ed.
754.)
Bona fide suit.—Judicial power is limited to the decision
of actual cases and controversies. The authority to pass
on the validity of statutes is incidental to the decision of
such cases where conflicting claims under the
Constitution and under a legislative act assailed as
contrary to the Constitution are raised. It is legitimate only
in the last resort, and as necessity in the determination of
real, earnest, and vital controversy between litigants.
(Tañada and Fernando, Constitution of the Philippines, p.
1138.)
Mere apprehension that the Secretary of Education might
under the law withdraw the permit of one of petitioners
does not constitute a justiciable controversy. (Cf. Com. ex
rel Watkins vs. Winchester Waterworks (Ky.) 197 S. W.
2d. 771.)
And action, like this, is brought for a positive purpose, nay,
to obtain actual and positive relief. (Salonga vs. Warner
Barnes, L-2245, January, 1951.) Courts do not sit to
32
adjudicate mere academic questions to satisfy scholarly
interest therein, however intellectually solid the problem
may be. This is specially true where the issues "reach
constitutional dimensions, for then there comes into play
regard for the court's duty to avoid decision of
constitutional issues unless avoidance becomes
evasion." (Rice vs. Sioux City, U. S. Sup. Ct. Adv. Rep.,
May 23, 1995, Law Ed., Vol. 99, p. 511.)
The above notwithstanding, in view of the several
decisions of the United States Supreme Court quoted by
petitioners, apparently outlawing censorship of the kind
objected to by them, we have decided to look into the
matter, lest they may allege we refuse to act even in the
face of clear violation of fundamental personal rights of
liberty and property.
Petitioners complain that before opening a school the
owner must secure a permit from the Secretary of
Education. Such requirement was not originally included
in Act No. 2706. It was introduced by Commonwealth Act
No. 180 approved in 1936. Why?
In March 1924 the Philippine Legislature approved Act
No. 3162 creating a Board of Educational Survey to make
a study and survey of education in the Philippines and of
all educational institutions, facilities and agencies thereof.
A Board chairmaned by Dr. Paul Munroe, Columbia
University, assisted by a staff of carefully selected
technical members performed the task, made a five-
month thorough and impartial examination of the local
educational system, and submitted a report with
recommendations, printed as a book of 671 pages. The
following paragraphs are taken from such report:
PRIVATE-ADVENTURE SCHOOLS
There is no law or regulation in the Philippine Islands
today to prevent a person, however disqualified by
ignorance, greed, or even immoral character, from
opening a school to teach the young. It it true that in order
to post over the door "Recognized by the Government," a
private adventure school must first be inspected by the
proper Government official, but a refusal to grant such
recognition does not by any means result in such a school
ceasing to exist. As a matter of fact, there are more such
unrecognized private schools than of the recognized
variety. How many, no one knows, as the Division of
Private Schools keeps records only of the recognized
type.
Conclusion.—An unprejudiced consideration of the fact
presented under the caption Private Adventure Schools
leads but to one conclusion, viz.: the great majority of
them from primary grade to university are money-making
devices for the profit of those who organize and
administer them. The people whose children and youth
attend them are not getting what they pay for. It is obvious
that the system constitutes a great evil. That it should be
permitted to exist with almost no supervision is
indefensible. The suggestion has been made with the
reference to the private institutions of university grade that
some board of control be organized under legislative
control to supervise their administration. The Commission
believes that the recommendations it offers at the end of
this chapter are more likely to bring about the needed
reforms.
Recommendations.—The Commission recommends that
legislation be enacted to prohibit the opening of any
school by an individual or organization without the
permission of the Secretary of Public Instruction. That
before granting such permission the Secretary assure
himself that such school measures up to proper standards
in the following respects, and that the continued existence
of the school be dependent upon its continuing to conform
to these conditions:
(1) The location and construction of the buildings, the
lighting and ventilation of the rooms, the nature of the
lavatories, closets, water supply, school furniture and
apparatus, and methods of cleaning shall be such as to
insure hygienic conditions for both pupils and teachers.
(2) The library and laboratory facilities shall be
adequate to the needs of instruction in the subjects
taught.
(3) The classes shall not show an excessive number
of pupils per teacher. The Commission recommends 40
as a maximum.
(4) The teachers shall meet qualifications equal to
those of teachers in the public schools of the same grade.
xxx xxx xxx
In view of these findings and recommendations, can there
be any doubt that the Government in the exercise of its
police power to correct "a great evil" could validly
establish the "previous permit" system objected to by
petitioners? This is what differentiates our law from the
other statutes declared invalid in other jurisdictions. And
if any doubt still exists, recourse may now be had to the
provision of our Constitution that "All educational
institutions shall be under the supervision and subject to
regulation by the State." (Art. XIV, sec. 5.) The power to
regulate establishments or business occupations implies
the power to require a permit or license. (53 C. J. S. 4.)
What goes for the "previous permit" naturally goes for the
power to revoke such permit on account of violation of
rules or regulations of the Department.
II. This brings us to the petitioners' third proposition
that the questioned statutes "conferring on the Secretary
of Education unlimited power and discretion to prescribe
rules and standards constitute an unlawful delegation of
legislative power."
This attack is specifically aimed at section 1 of Act No.
2706 which, as amended, provides:
It shall be the duty of the Secretary of Public Instruction to
maintain a general standard of efficiency in all private
schools and colleges of the Philippines so that the same
shall furnish adequate instruction to the public, in
accordance with the class and grade of instruction given
in them, and for this purpose said Secretary or his duly
authorized representative shall have authority to advise,
inspect, and regulate said schools and colleges in order
to determine the efficiency of instruction given in the
same,
"Nowhere in this Act" petitioners argue "can one find any
description, either general or specific, of what constitutes
a 'general standard of efficiency.' Nowhere in this Act is
there any indication of any basis or condition to ascertain
what is 'adequate instruction to the public.' Nowhere in
this Act is there any statement of conditions, acts, or
factors, which the Secretary of Education must take into
account to determine the 'efficiency of instruction.'"
33
The attack on this score is also extended to section 6
which provides:
The Department of Education shall from time to time
prepare and publish in pamphlet form the minimum
standards required of primary, intermediate, and high
schools, and colleges granting the degrees of Bachelor of
Arts, Bachelor of Science, or any other academic degree.
It shall also from time to time prepare and publish in
pamphlet form the minimum standards required of law,
medical, dental, pharmaceutical, engineering, agricultural
and other medical or vocational schools or colleges giving
instruction of a technical, vocational or professional
character.
Petitioners reason out, "this section leaves everything to
the uncontrolled discretion of the Secretary of Education
or his department. The Secretary of Education is given the
power to fix the standard. In plain language, the statute
turns over to the Secretary of Education the exclusive
authority of the legislature to formulate standard. . . .."
It is quite clear the two sections empower and require the
Secretary of Education to prescribe rules fixing minimum
standards of adequate and efficient instruction to be
observed by all such private schools and colleges as may
be permitted to operate. The petitioners contend that as
the legislature has not fixed the standards, "the provision
is extremely vague, indefinite and uncertain"—and for that
reason constitutionality objectionable. The best answer is
that despite such alleged vagueness the Secretary of
Education has fixed standards to ensure adequate and
efficient instruction, as shown by the memoranda fixing or
revising curricula, the school calendars, entrance and
final examinations, admission and accreditation of
students etc.; and the system of private education has, in
general, been satisfactorily in operation for 37 years.
Which only shows that the Legislature did and could,
validly rely upon the educational experience and training
of those in charge of the Department of Education to
ascertain and formulate minimum requirements of
adequate instruction as the basis of government
recognition of any private school.
At any rate, petitioners do not show how these standards
have injured any of them or interfered with their operation.
Wherefore, no reason exists for them to assail the validity
of the power nor the exercise of the power by the
Secretary of Education.
True, the petitioners assert that, the Secretary has issued
rules and regulations "whimsical and capricious" and that
such discretionary power has produced arrogant
inspectors who "bully heads and teachers of private
schools." Nevertheless, their remedy is to challenge those
regulations specifically, and/or to ring those inspectors to
book, in proper administrative or judicial proceedings—
not to invalidate the law. For it needs no argument, to
show that abuse by the officials entrusted with the
execution of a statute does not per se demonstrate the
unconstitutionality of such statute.
Anyway, we find the defendants' position to be sufficiently
sustained by the decision in Alegra vs. Collector of
Customs, 53 Phil., 394 upon holding the statute that
authorized the Director of Agriculture to "designate
standards for the commercial grades of abaca, maguey
and sisal" against vigorous attacks on the ground of
invalid delegation of legislative power.
Indeed "adequate and efficient instruction" should be
considered sufficient, in the same way as "public welfare"
"necessary in the interest of law and order" "public
interest" and "justice and equity and substantial merits of
the case" have been held sufficient as legislative
standards justifying delegation of authority to regulate.
(See Tañada and Fernando, Constitution of the
Philippines, p. 793, citing Philippine cases.)
On this phase of the litigation we conclude that there has
been no undue delegation of legislative power.
In this connection, and to support their position that the
law and the Secretary of Education have transcended the
governmental power of supervision and regulation, the
petitioners appended a list of circulars and memoranda
issued by the said Department. However they failed to
indicate which of such official documents was
constitutionally objectionable for being "capricious," or
pain "nuisance"; and it is one of our decisional practices
that unless a constitutional point is specifically raised,
insisted upon and adequately argued, the court will not
consider it. (Santiago vs. Far Eastern, 73 Phil., 408.)
We are told that such list will give an idea of how the
statute has placed in the hands of the Secretary of
Education complete control of the various activities of
private schools, and why the statute should be struck
down as unconstitutional. It is clear in our opinion that the
statute does not in express terms give the Secretary
complete control. It gives him powers to inspect private
schools, to regulate their activities, to give them official
permits to operate under certain conditions, and to revoke
such permits for cause. This does not amount to complete
control. If any of such Department circulars or
memoranda issued by the Secretary go beyond the
bounds of regulation and seeks to establish complete
control, it would surely be invalid. Conceivably some of
them are of this nature, but besides not having before us
the text of such circulars, the petitioners have omitted to
specify. In any event with the recent approval of Republic
Act No. 1124 creating the National Board of Education,
opportunity for administrative correction of the supposed
anomalies or encroachments is amply afforded herein
petitioners. A more expeditious and perhaps more
technically competent forum exists, wherein to discuss
the necessity, convenience or relevancy of the measures
criticized by them. (See also Republic Act No. 176.)
If however the statutes in question actually give the
Secretary control over private schools, the question arises
whether the power of supervision and regulation granted
to the State by section 5 Article XIV was meant to include
control of private educational institutions. It is enough to
point out that local educators and writers think the
Constitution provides for control of Education by the
State. (See Tolentino, Government of the Philippine
Constitution, Vol. II, p. 615; Benitez, Philippine Social Life
and Progress, p. 335.)
The Constitution (it) "provides for state control of all
educational institutions" even as it enumerates certain
fundamental objectives of all education to wit, the
development of moral character, personal discipline, civic
conscience and vocational efficiency, and instruction in
the duties of citizenship. (Malcolm & Laurel, Philippine
Constitutional Law, 1936.)
The Solicitor General cities many authorities to show that
the power to regulate means power to control, and quotes
from the proceedings of the Constitutional Convention to
prove that State control of private education was intended
by the organic law. It is significant to note that the
34
Constitution grants power to supervise and to regulate.
Which may mean greater power than mere regulation.
III. Another grievance of petitioners—probably the
most significant—is the assessment of 1 per cent levied
on gross receipts of all private schools for additional
Government expenses in connection with their
supervision and regulation. The statute is section 11-A of
Act No. 2706 as amended by Republic Act No. 74 which
reads as follows:
SEC. 11-A. The total annual expense of the Office of
Private Education shall be met by the regular amount
appropriated in the annual Appropriation Act: Provided,
however, That for additional expenses in the supervision
and regulation of private schools, colleges and
universities and in the purchase of textbook to be sold to
student of said schools, colleges and universities and
President of the Philippines may authorize the Secretary
of Instruction to levy an equitable assessment from each
private educational institution equivalent to one percent of
the total amount accruing from tuition and other fees: . . .
and non-payment of the assessment herein provided by
any private school, college or university shall be sufficient
cause for the cancellation by the Secretary of Instruction
of the permit for recognition granted to it.
Petitioners maintain that this is a tax on the exercise of a
constitutional right—the right to open a school, the liberty
to teach etc. They claim this is unconstitutional, in the
same way that taxes on the privilege of selling religious
literature or of publishing a newspaper—both
constitutional privileges—have been held, in the United
States, to be invalid as taxes on the exercise of a
constitutional right.
The Solicitor General on the other hand argues that
insofar as petitioners' action attempts to restrain the
further collection of the assessment, courts have no
jurisdiction to restrain the collection of taxes by injunction,
and in so far as they seek to recover fees already paid the
suit, it is one against the State without its consent.
Anyway he concludes, the action involving "the legality of
any tax impost or assessment" falls within the original
jurisdiction of Courts of First Instance.
There are good grounds in support of Government's
position. If this levy of 1 per cent is truly a mere fee—and
not a tax—to finance the cost of the Department's duty
and power to regulate and supervise private schools, the
exaction may be upheld; but such point involves
investigation and examination of relevant data, which
should best be carried out in the lower courts. If on the
other hand it is a tax, petitioners' issue would still be within
the original jurisdiction of the Courts of First Instance.
The last grievance of petitioners relates to the validity of
Republic Act No. 139 which in its section 1 provides:
The textbooks to be used in the private schools
recognized or authorized by the government shall be
submitted to the Board (Board of Textbooks) which shall
have the power to prohibit the use of any of said textbooks
which it may find to be against the law or to offend the
dignity and honor of the government and people of the
Philippines, or which it may find to be against the general
policies of the government, or which it may deem
pedagogically unsuitable.
This power of the Board, petitioners aver, is censorship in
"its baldest form". They cite two U. S. cases (Miss. and
Minnesota) outlawing statutes that impose previous
restraints upon publication of newspapers, or curtail the
right of individuals to disseminate teachings critical of
government institutions or policies.
Herein lies another important issue submitted in the
cause. The question is really whether the law may be
enacted in the exercise of the State's constitutional power
(Art. XIV, sec. 5) to supervise and regulate private
schools. If that power amounts to control of private
schools, as some think it is, maybe the law is valid. In this
connection we do not share the belief that section 5 has
added new power to what the State inherently possesses
by virtue of the police power. An express power is
necessarily more extensive than a mere implied power.
For instance, if there is conflict between an express
individual right and the express power to control private
education it cannot off-hand be said that the latter must
yield to the former—conflict of two express powers. But if
the power to control education is merely implied from the
police power, it is feasible to uphold the express individual
right, as was probably the situation in the two decisions
brought to our attention, of Mississippi and Minnesota,
states where constitutional control of private schools is
not expressly produced.
However, as herein previously noted, no justiciable
controversy has been presented to us. We are not
informed that the Board on Textbooks has prohibited this
or that text, or that the petitioners refused or intend to
refuse to submit some textbooks, and are in danger of
losing substantial privileges or rights for so refusing.
The average lawyer who reads the above quoted section
of Republic Act 139 will fail to perceive anything
objectionable. Why should not the State prohibit the use
of textbooks that are illegal, or offensive to the Filipinos or
adverse to governmental policies or educationally
improper? What's the power of regulation and supervision
for? But those trained to the investigation of constitutional
issues are likely to apprehend the danger to civil liberties,
of possible educational dictatorship or thought control, as
petitioners' counsel foresee with obvious alarm. Much
depends, however, upon the execution and
implementation of the statute. Not that constitutionality
depends necessarily upon the law's effects. But if the
Board on Textbooks in its actuations strictly adheres to
the letter of the section and wisely steers a middle course
between the Scylla of "dictatorship" and the Charybdis of
"thought control", no cause for complaint will arise and no
occasion for judicial review will develop. Anyway, and
again, petitioners now have a more expeditious remedy
thru an administrative appeal to the National Board of
Education created by Republic Act 1124.
Of course it is necessary to assure herein petitioners, that
when and if, the dangers they apprehend materialize and
judicial intervention is suitably invoked, after all
administrative remedies are exhausted, the courts will not
shrink from their duty to delimit constitutional boundaries
and protect individual liberties.
IV. For all the foregoing considerations, reserving to
the petitioners the right to institute in the proper court, and
at the proper time, such actions as may call for decision
of the issue herein presented by them, this petition for
prohibition will be denied. So ordered.
Paras, C. J., Padilla, Montemayor, Reyes, A., and Jugo,
JJ., concur.
35
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 118577 March 7, 1995
JUANITO MARIANO, JR. et al., petitioners,
vs.
THE COMMISSION ON ELECTIONS, THE
MUNICIPALITY OF MAKATI, HON. JEJOMAR BINAY,
THE MUNICIPAL TREASURER, AND SANGGUNIANG
BAYAN OF MAKATI, respondents.
G.R. No. 118627 March 7, 1995
JOHN R. OSMEÑA, petitioner,
vs.
THE COMMISSION ON ELECTIONS, THE
MUNICIPALITY OF MAKATI, HON. JEJOMAR BINAY,
MUNICIPAL TREASURER, AND SANGGUNIANG
BAYAN OF MAKATI, respondents.
PUNO, J.:
At bench are two (2) petitions assailing certain provisions
of Republic Act No. 7854 as unconstitutional. R.A. No.
7854 as unconstitutional. R.A. No. 7854 is entitled, "An
Act Converting the Municipality of Makati Into a Highly
Urbanized City to be known as the City of Makati."1
G.R. No. 118577 involves a petition for prohibition and
declaratory relief. It was filed by petitioners Juanito
Mariano, Jr., Ligaya S. Bautista, Teresita Tibay, Camilo
Santos, Frankie Cruz, Ricardo Pascual, Teresita Abang,
Valentina Pitalvero, Rufino Caldoza, Florante Alba, and
Perfecto Alba. Of the petitioners, only Mariano, Jr., is a
resident of Makati. The others are residents of Ibayo
Ususan, Taguig, Metro Manila. Suing as taxpayers, they
assail as unconstitutional sections 2, 51, and 52 of R.A.
No. 7854 on the following grounds:
1. Section 2 of R.A. No. 7854 did not properly
identify the land area or territorial jurisdiction of Makati by
metes and bounds, with technical descriptions, in violation
of Section 10, Article X of the Constitution, in relation to
Sections 7 and 450 of the Local Government Code;
2. Section 51 of R.A. No. 7854 attempts to alter or
restart the "three consecutive term" limit for local elective
officials, in violation of Section 8, Article X and Section 7,
Article VI of the Constitution.
3. Section 52 of R.A. No. 7854 is unconstitutional
for:
(a) it increased the legislative district of Makati only
by special law (the Charter in violation of the constitutional
provision requiring a general reapportionment law to be
passed by Congress within three (3) years following the
return of every census;
(b) the increase in legislative district was not
expressed in the title of the bill; and
(c) the addition of another legislative district in Makati
is not in accord with Section 5 (3), Article VI of the
Constitution for as of the latest survey (1990 census), the
population of Makati stands at only 450,000.
G.R. No. 118627 was filed by the petitioner John H.
Osmeña as senator, taxpayer, and concerned citizen.
Petitioner assails section 52 of R.A. No. 7854 as
unconstitutional on the same grounds as aforestated.
We find no merit in the petitions.
I
Section 2, Article I of R.A. No. 7854 delineated the land
areas of the proposed city of Makati, thus:
Sec. 2. The City of Makati. — The Municipality of Makati
shall be converted into a highly urbanized city to be known
as the City of Makati, hereinafter referred to as the City,
which shall comprise the present territory of the
Municipality of Makati in Metropolitan Manila Area over
which it has jurisdiction bounded on the northeast by
Pasig River and beyond by the City of Mandaluyong and
the Municipality of Pasig; on the southeast by the
municipalities of Pateros and Taguig; on the southwest by
the City of Pasay and the Municipality of Taguig; and, on
the northwest, by the City of Manila.
The foregoing provision shall be without prejudice to the
resolution by the appropriate agency or forum of existing
boundary disputes or cases involving questions of
territorial jurisdiction between the City of Makati and the
adjoining local government units. (Emphasis supplied)
In G.R. No. 118577, petitioners claim that this delineation
violates sections 7 and 450 of the Local Government
Code which require that the area of a local government
unit should be made by metes and bounds with technical
descriptions.2
The importance of drawing with precise strokes the
territorial boundaries of a local unit of government cannot
be overemphasized. The boundaries must be clear for
they define the limits of the territorial jurisdiction of a local
government unit. It can legitimately exercise powers of
government only within the limits, its acts are ultra vires.
Needless to state, any uncertainty in the boundaries of
local government units will sow costly conflicts in the
exercise of governmental powers which ultimately will
prejudice the people's welfare. This is the evil sought to
avoided by the Local Government Code in requiring that
the land area of a local government unit must be spelled
out in metes and bounds, with technical descriptions.
Given the facts of the cases at bench, we cannot perceive
how this evil can be brought about by the description
made in section 2 of R.A. No. 7854, Petitioners have not
demonstrated that the delineation of the land area of the
proposed City of Makati will cause confusion as to its
boundaries. We note that said delineation did not change
even by an inch the land area previously covered by
Makati as a municipality. Section 2 did not add, subtract,
divide, or multiply the established land area of Makati. In
language that cannot be any clearer, section 2 stated that,
the city's land area "shall comprise the present territory of
the municipality."
The deliberations of Congress will reveal that there is a
legitimate reason why the land area of the proposed City
of Makati was not defined by metes and bounds, with
technical descriptions. At the time of the consideration of
R.A. No. 7854, the territorial dispute between the
municipalities of Makati and Taguig over Fort Bonifacio
was under court litigation. Out of a becoming sense of
respect to co-equal department of government, legislators
felt that the dispute should be left to the courts to decide.
They did not want to foreclose the dispute by making a
legislative finding of fact which could decide the issue.
36
This would have ensued if they defined the land area of
the proposed city by its exact metes and bounds, with
technical descriptions.3 We take judicial notice of the fact
that Congress has also refrained from using the metes
and bounds description of land areas of other local
government units with unsettled boundary disputes.4
We hold that the existence of a boundary dispute does not
per se present an insurmountable difficulty which will
prevent Congress from defining with reasonable certitude
the territorial jurisdiction of a local government unit. In the
cases at bench, Congress maintained the existing
boundaries of the proposed City of Makati but as an act
of fairness, made them subject to the ultimate resolution
by the courts. Considering these peculiar circumstances,
we are not prepared to hold that section 2 of R.A. No.
7854 is unconstitutional. We sustain the submission of the
Solicitor General in this regard, viz.:
Going now to Sections 7 and 450 of the Local
Government Code, it is beyond cavil that the requirement
stated therein, viz.: "the territorial jurisdiction of newly
created or converted cities should be described by meted
and bounds, with technical descriptions" — was made in
order to provide a means by which the area of said cities
may be reasonably ascertained. In other words, the
requirement on metes and bounds was meant merely as
tool in the establishment of local government units. It is
not an end in itself. Ergo, so long as the territorial
jurisdiction of a city may be reasonably ascertained, i.e.,
by referring to common boundaries with neighboring
municipalities, as in this case, then, it may be concluded
that the legislative intent behind the law has been
sufficiently served.
Certainly, Congress did not intends that laws creating new
cities must contain therein detailed technical descriptions
similar to those appearing in Torrens titles, as petitioners
seem to imply. To require such description in the law as a
condition sine qua non for its validity would be to defeat
the very purpose which the Local Government Code to
seeks to serve. The manifest intent of the Code is to
empower local government units and to give them their
rightful due. It seeks to make local governments more
responsive to the needs of their constituents while at the
same time serving as a vital cog in national development.
To invalidate R.A. No. 7854 on the mere ground that no
cadastral type of description was used in the law would
serve the letter but defeat the spirit of the Code. It then
becomes a case of the master serving the slave, instead
of the other way around. This could not be the intendment
of the law.
Too well settled is the rule that laws must be enforced
when ascertained, although it may not be consistent with
the strict letter of the statute. Courts will not follow the
letter of the statute when to do so would depart from the
true intent of the legislature or would otherwise yield
conclusions inconsistent with the general purpose of the
act. (Torres v. Limjap, 56 Phil., 141; Tañada v. Cuenco,
103 Phil. 1051; Hidalgo v. Hidalgo, 33 SCRA 1105).
Legislation is an active instrument of government, which,
for purposes of interpretation, means that laws have ends
to achieve, and statutes should be so construed as not to
defeat but to carry out such ends and purposes (Bocolbo
v. Estanislao, 72 SCRA 520). The same rule must
indubitably apply to the case at bar.
II
Petitioners in G.R. No. 118577 also assail the
constitutionality of section 51, Article X of R.A. No. 7854.
Section 51 states:
Sec. 51. Officials of the City of Makati. — The
represent elective officials of the Municipality of Makati
shall continue as the officials of the City of Makati and
shall exercise their powers and functions until such time
that a new election is held and the duly elected officials
shall have already qualified and assume their offices:
Provided, The new city will acquire a new corporate
existence. The appointive officials and employees of the
City shall likewise continues exercising their functions and
duties and they shall be automatically absorbed by the
city government of the City of Makati.
They contend that this section collides with section 8,
Article X and section 7, Article VI of the Constitution which
provide:
Sec. 8. The term of office of elective local officials, except
barangay officials, which shall be determined by law, shall
be three years and no such official shall serve for more
than three consecutive terms. Voluntary renunciation of
the office for any length of time shall not be considered as
an interruption in the continuity of his service for the full
term for which he was elected.
xxx xxx xxx
Sec. 7. The Members of the House of Representatives
shall be elected for a term of three years which shall
begin, unless otherwise provided by law, at noon on the
thirtieth day of June next following their election.
No Member of the House of Representatives shall serve
for more than three consecutive terms. Voluntary
renunciation of the office for any length of time shall not
be considered as an interruption in the continuity of his
service for the full term for which he was elected.
Petitioners stress that under these provisions, elective
local officials, including Members of the House of
Representative, have a term of three (3) years and are
prohibited from serving for more than three (3)
consecutive terms. They argue that by providing that the
new city shall acquire a new corporate existence, section
51 of R.A. No. 7854 restarts the term of the present
municipal elective officials of Makati and disregards the
terms previously served by them. In particular, petitioners
point that section 51 favors the incumbent Makati Mayor,
respondent Jejomar Binay, who has already served for
two (2) consecutive terms. They further argue that should
Mayor Binay decide to run and eventually win as city
mayor in the coming elections, he can still run for the
same position in 1998 and seek another three-year
consecutive term since his previous three-year
consecutive term as municipal mayor would not be
counted. Thus, petitioners conclude that said section 51
has been conveniently crafted to suit the political
ambitions of respondent Mayor Binay.
We cannot entertain this challenge to the constitutionality
of section 51. The requirements before a litigant can
challenge the constitutionality of a law are well delineated.
They are: 1) there must be an actual case or controversy;
(2) the question of constitutionality must be raised by the
proper party; (3) the constitutional question must be
raised at the earliest possible opportunity; and (4) the
decision on the constitutional question must be necessary
to the determination of the case itself.5
37
Petitioners have far from complied with these
requirements. The petition is premised on the occurrence
of many contingent events, i.e., that Mayor Binay will run
again in this coming mayoralty elections; that he would be
re-elected in said elections; and that he would seek re-
election for the same position in the 1998 elections.
Considering that these contingencies may or may not
happen, petitioners merely pose a hypothetical issue
which has yet to ripen to an actual case or controversy.
Petitioners who are residents of Taguig (except Mariano)
are not also the proper parties to raise this abstract issue.
Worse, they hoist this futuristic issue in a petition for
declaratory relief over which this Court has no jurisdiction.
III
Finally, petitioners in the two (2) cases at bench assail the
constitutionality of section 52, Article X of R.A. No. 7854.
Section 52 of the Charter provides:
Sec. 52. Legislative Districts. — Upon its
conversion into a highly-urbanized city, Makati shall
thereafter have at least two (2) legislative districts that
shall initially correspond to the two (2) existing districts
created under Section 3(a) of Republic Act. No. 7166 as
implemented by the Commission on Elections to
commence at the next national elections to be held after
the effectivity of this Act. Henceforth, barangays
Magallanes, Dasmariñas and Forbes shall be with the first
district, in lieu of Barangay Guadalupe-Viejo which shall
form part of the second district. (emphasis supplied)
They contend. that the addition of another legislative
district in Makati is unconstitutional for: (1)
reapportionment6 cannot made by a special law, (2) the
addition of a legislative district is not expressed in the title
of the bill7 and (3) Makati's population, as per the 1990
census, stands at only four hundred fifty thousand
(450,000).
These issues have been laid to rest in the recent case of
Tobias v. Abalos.8 In said case, we ruled that
reapportionment of legislative districts may be made
through a special law, such as in the charter of a new city.
The Constitution9 clearly provides that Congress shall be
composed of not more than two hundred fifty (250)
members, unless otherwise fixed by law. As thus worded,
the Constitution did not preclude Congress from
increasing its membership by passing a law, other than a
general reapportionment of the law. This is its exactly
what was done by Congress in enacting R.A. No. 7854
and providing for an increase in Makati's legislative
district. Moreover, to hold that reapportionment can only
be made through a general apportionment law, with a
review of all the legislative districts allotted to each local
government unit nationwide, would create an inequitable
situation where a new city or province created by
Congress will be denied legislative representation for an
indeterminate period of time. 10 The intolerable situations
will deprive the people of a new city or province a particle
of their sovereignty. 11 Sovereignty cannot admit of any
kind of subtraction. It is indivisible. It must be forever
whole or it is not sovereignty.
Petitioners cannot insist that the addition of another
legislative district in Makati is not in accord with section
5(3), Article VI 12 of the Constitution for as of the latest
survey (1990 census), the population of Makati stands at
only four hundred fifty thousand (450,000). 13 Said
section provides, inter alia, that a city with a population of
at least two hundred fifty thousand (250,000) shall have
at least one representative. Even granting that the
population of Makati as of the 1990 census stood at four
hundred fifty thousand (450,000), its legislative district
may still be increased since it has met the minimum
population requirement of two hundred fifty thousand
(250,000). In fact, section 3 of the Ordinance appended
to the Constitution provides that a city whose population
has increased to more than two hundred fifty thousand
(250,000) shall be entitled to at least one congressional
representative. 14
Finally, we do not find merit in petitioners' contention that
the creation of an additional legislative district in Makati
should have been expressly stated in the title of the bill.
In the same case of Tobias v. Abalos, op cit., we reiterated
the policy of the Court favoring a liberal construction of the
"one title-one subject" rule so as not to impede legislation.
To be sure, with Constitution does not command that the
title of a law should exactly mirror, fully index, or
completely catalogue all its details. Hence, we ruled that
"it should be sufficient compliance if the title expresses
the general subject and all the provisions are germane to
such general subject."
WHEREFORE, the petitions are hereby DISMISSED for
lack of merit No costs.
SO ORDERED.
Narvasa, C.J., Feliciano, Padilla, Bidin, Regalado,
Romero, Bellosillo, Melo, Quiason, Vitug, Kapunan,
Mendoza and Francisco, JJ., concur.
Separate Opinions
DAVIDE, JR., J., concurring:
I concur in the well written opinion of Mr. Justice Reynato
S. Puno. I wish, however, to add a few observations.
I.
Section 10, Article X of the Constitution provides that "[n]o
province, city, municipality or barangay may be created,
divided, merged, abolished, or its boundary substantially
altered, except in accordance with the criteria established
in the local government code and subject to the approval
by a majority of the votes cast in a plebiscite in the political
units directly affected." These criteria are now set forth in
Section 7 of the Local Government Code of 1991 (R.A.
No. 7160). One of these is that the territorial jurisdiction of
the local government unit to be created or converted
should be properly identified by metes and bounds with
technical descriptions.
The omission of R.A. No. 7854 (An Act Converting the
Municipality of Makati Into a Highly Urbanized City to be
Known as the City of Makati) to describe the territorial
boundaries of the city by metes and bounds does not
make R.A. No. 7854 unconstitutional or illegal. The
Constitution does not provide for a description by metes
and bounds as a condition sine qua non for the creation
of a local government unit or its conversion from one level
to another. The criteria provided for in Section 7 of R.A.
No. 7854 are not absolute, for, as a matter of fact, the
section starts with the clause "as a general rule." The
petitioners' reliance on Section 450 of R.A. No. 7160 is
unavailing Said section only applies to the conversion of
a municipality or a cluster of barangays into a
COMPONENT CITY, not a highly urbanized city. It
pertinently reads as follows:
38
Sec. 450. Requisite for creation. — (a) A
municipality or a cluster of barangays may be converted
into a component city if it has an average annual income,
as certified by the Department of Finance, of at least
Twenty million pesos (P20,000,000.00) for the last two (2)
consecutive years based on 1991 constant prices, and if
it has either of the following requisites:
xxx xxx xxx
(b) The territorial jurisdiction of a newly created city
shall be properly identified by metes and bounds. . . .
The constitution classifies cities as either highly urbanized
or component. Section 12 of Article X thereof provides:
Sec. 12. Cities that are highly urbanized, as
determined by law, and component cities whose charters
prohibit their voters from voting for provincial elective
officials, shall be independent of the province. The voters
of component cities within a province, whose charters
contain no such prohibition, shall not be deprived of their
right to vote for elective provincial officials.
And Section 451 of R.A. No. 7160 provides:
Sec. 451. Cities Classified. — A city may either be
component or highly urbanized: Provided, however, That
the criteria established in this Code shall not affect the
classification and corporate status of existing cities.
Independent component cities are those component cities
whose charters prohibit their voters from voting for
provincial elective officials. Independent component cities
shall be independent of the province.
II.
Strictly speaking, the increase in the number of legislative
seats for the City of Makati provided for in R.A. No. 7854
is not an increase justified by the clause unless otherwise
fixed by law in paragraph 1, Section 5, Article VI of the
Constitution. That clause contemplates of the
reapportionment mentioned in the succeeding paragraph
(4) of the said Section which reads in full as follows:
Within three years following the return of every census,
the Congress shall make a reapportionment of legislative
districts based on the standards provided in this section.
In short, the clause refers to a general reapportionment
law.
The increase under R.A. No. 7854 is a permissible
increase under Sections 1 and 3 of the Ordinance
appended to the Constitution which reads:
Sec. 1. For purposes of the election of Members of the
House of Representatives of the First Congress of the
Philippines under the Constitution proposed by the 1986
Constitutional Commission and subsequent elections,
and until otherwise provided by law, the Members thereof
shall be elected from legislative districts apportioned
among the provinces, cities, and the Metropolitan Manila
Area as follows:
METROPOLITAN MANILA AREA
xxx xxx xxx
MAKATI one (1)
xxx xxx xxx
Sec. 3. Any province that may hereafter be created, or
any city whose population may hereafter increase to more
than two hundred fifty thousand shall be entitled in the
immediately following election to at least one Member or
such number of Members as it may be entitled to on the
basis of the number of its inhabitants and according to the
standards set forth in paragraph (3), Section 5 of Article
VI of the Constitution. The number of Members
apportioned to the province out of which such new
province was created, or where the city, whose population
has so increased, is geographically located shall be
correspondingly adjusted by the Commission on
Elections but such adjustment shall not be made within
one hundred and twenty days before the election.
(Emphases supplied)
Separate Opinions
DAVIDE, JR., J., concurring:
I concur in the well written opinion of Mr. Justice Reynato
S. Puno. I wish, however, to add a few observations.
I.
Section 10, Article X of the Constitution provides that "[n]o
province, city, municipality or barangay may be created,
divided, merged, abolished, or its boundary substantially
altered, except in accordance with the criteria established
in the local government code and subject to the approval
by a majority of the votes cast in a plebiscite in the political
units directly affected." These criteria are now set forth in
Section 7 of the Local Government Code of 1991 (R.A.
No. 7160). One of these is that the territorial jurisdiction of
the local government unit to be created or converted
should be properly identified by metes and bounds with
technical descriptions.
The omission of R.A. No. 7854 (An Act Converting the
Municipality of Makati Into a Highly Urbanized City to be
Known as the City of Makati) to describe the territorial
boundaries of the city by metes and bounds does not
make R.A. No. 7854 unconstitutional or illegal. The
Constitution does not provide for a description by metes
and bounds as a condition sine qua non for the creation
of a local government unit or its conversion from one level
to another. The criteria provided for in Section 7 of R.A.
No. 7854 are not absolute, for, as a matter of fact, the
section starts with the clause "as a general rule." The
petitioners' reliance on Section 450 of R.A. No. 7160 is
unavailing Said section only applies to the conversion of
a municipality or a cluster of barangays into a
COMPONENT CITY, not a highly urbanized city. It
pertinently reads as follows:
Sec. 450. Requisite for creation. — (a) A
municipality or a cluster of barangays may be converted
into a component city if it has an average annual income,
as certified by the Department of Finance, of at least
Twenty million pesos (P20,000,000.00) for the last two (2)
consecutive years based on 1991 constant prices, and if
it has either of the following requisites:
xxx xxx xxx
(b) The territorial jurisdiction of a newly created city
shall be properly identified by metes and bounds. . . .
39
The constitution classifies cities as either highly urbanized correspondingly adjusted by the Commission on
or component. Section 12 of Article X thereof provides: Elections but such adjustment shall not be made within
one hundred and twenty days before the election.
Sec. 12. Cities that are highly urbanized, as (Emphases supplied)
determined by law, and component cities whose charters
prohibit their voters from voting for provincial elective
officials, shall be independent of the province. The voters
of component cities within a province, whose charters
contain no such prohibition, shall not be deprived of their
right to vote for elective provincial officials.

And Section 451 of R.A. No. 7160 provides:

Sec. 451. Cities Classified. — A city may either be

component or highly urbanized: Provided, however, That
the criteria established in this Code shall not affect the
classification and corporate status of existing cities.

Independent component cities are those component cities

whose charters prohibit their voters from voting for
provincial elective officials. Independent component cities
shall be independent of the province.

II.

Strictly speaking, the increase in the number of legislative

seats for the City of Makati provided for in R.A. No. 7854
is not an increase justified by the clause unless otherwise
fixed by law in paragraph 1, Section 5, Article VI of the
Constitution. That clause contemplates of the
reapportionment mentioned in the succeeding paragraph
(4) of the said Section which reads in full as follows:

Within three years following the return of every census,

the Congress shall make a reapportionment of legislative
districts based on the standards provided in this section.

In short, the clause refers to a general reapportionment

law.

The increase under R.A. No. 7854 is a permissible

increase under Sections 1 and 3 of the Ordinance
appended to the Constitution which reads:

Sec. 1. For purposes of the election of Members of the

House of Representatives of the First Congress of the
Philippines under the Constitution proposed by the 1986
Constitutional Commission and subsequent elections,
and until otherwise provided by law, the Members thereof
shall be elected from legislative districts apportioned
among the provinces, cities, and the Metropolitan Manila
Area as follows:

METROPOLITAN MANILA AREA

xxx xxx xxx

MAKATI one (1)

xxx xxx xxx

Sec. 3. Any province that may hereafter be created, or

any city whose population may hereafter increase to more
than two hundred fifty thousand shall be entitled in the
immediately following election to at least one Member or
such number of Members as it may be entitled to on the
basis of the number of its inhabitants and according to the
standards set forth in paragraph (3), Section 5 of Article
VI of the Constitution. The number of Members
apportioned to the province out of which such new
province was created, or where the city, whose population
has so increased, is geographically located shall be

40
EN BANC
G.R. No. 152295 July 9, 2002
ANTONIETTE V.C. MONTESCLAROS, MARICEL
CARANZO, JOSEPHINE ATANGAN, RONALD
ATANGAN and CLARIZA DECENA, and OTHER
YOUTH OF THE LAND SIMILARLY SITUATED,
petitioners,
vs.
COMMISSION ON ELECTIONS, DEPARTMENT OF
INTERIOR AND LOCAL GOVERNMENT,
DEPARTMENT OF BUDGET AND MANAGEMENT,
EXECUTIVE SECRETARY of the OFFICE OF THE
PRESIDENT, SENATOR FRANKLIN DRILON in his
capacity as Senate President and SENATOR AQUILINO
PIMENTEL in his capacity as Minority Leader of the
Senate of the Philippines, CONGRESSMAN JOSE DE
VENECIA in his capacity as Speaker, CONGRESSMAN
AGUSTO L. SYJOCO in his capacity as Chairman of the
Committee on Suffrage and Electoral Reforms, and
CONGRESSMAN EMILIO C. MACIAS II in his capacity
as Chairman of the Committee on Local Government of
the House of Representatives, THE PRESIDENT OF THE
PAMBANSANG KATIPUNAN NG MGA SANGGUNIANG
KABATAAN, AND ALL THEIR AGENTS AND
REPRESENTATIVES, respondents.
CARPIO, J.:
The Case
Before us is a petition for certiorari, prohibition and
mandamus with prayer for a temporary restraining order
or preliminary injunction. The petition seeks to prevent the
postponement of the Sangguniang Kabataan ("SK" for
brevity) elections originally scheduled last May 6, 2002.
The petition also seeks to prevent the reduction of the age
requirement for membership in the SK.
Petitioners, who are all 20 years old, filed this petition as
a taxpayer's and class suit, on their own behalf and on
behalf of other youths similarly situated. Petitioners claim
that they are in danger of being disqualified to vote and
be voted for in the SK elections should the SK elections
on May 6, 2002 be postponed to a later date. Under the
Local Government Code of 1991 (R.A. No. 7160),
membership in the SK is limited to youths at least 15 but
not more than 21 years old.
Petitioners allege that public respondents "connived,
confederated and conspired" to postpone the May 6, 2002
SK elections and to lower the membership age in the SK
to at least 15 but less than 18 years of age. Petitioners
assail the alleged conspiracy because youths at least 18
but not more than 21 years old will be "summarily and
unduly dismembered, unfairly discriminated,
unnecessarily disenfranchised, unjustly disassociated
and obnoxiously disqualified from the SK organization."1
Thus, petitioners pray for the issuance of a temporary
restraining order or preliminary injunction -
"a) To prevent, annul or declare unconstitutional any law,
decree, Comelec resolution/directive and other
respondents' issuances, orders and actions and the like
in postponing the May 6, 2002 SK elections.
b) To command the respondents to continue the May 6,
2002 SK elections set by the present law and in
accordance with Comelec Resolutions No. 4713 and
4714 and to expedite the funding of the SK elections.
c) In the alternative, if the SK elections will be postponed
for whatever reason, there must be a definite date for said
elections, for example, July 15, 2002, and the present SK
membership, except those incumbent SK officers who
were elected on May 6, 1996, shall be allowed to run for
any SK elective position even if they are more than 21
years old.
d) To direct the incumbent SK officers who are presently
representing the SK in every sanggunian and the NYC to
vacate their post after the barangay elections."2
The Facts
The SK is a youth organization originally established by
Presidential Decree No. 684 as the Kabataang Barangay
("KB" for brevity). The KB was composed of all barangay
residents who were less than 18 years old, without
specifying the minimum age. The KB was organized to
provide its members with the opportunity to express their
views and opinions on issues of transcendental
importance.3
The Local Government Code of 1991 renamed the KB to
SK and limited SK membership to those youths "at least
15 but not more than 21 years of age."4 The SK remains
as a youth organization in every barangay tasked to
initiate programs "to enhance the social, political,
economic, cultural, intellectual, moral, spiritual, and
physical development of the youth."5 The SK in every
barangay is composed of a chairperson and seven
members, all elected by the Katipunan ng Kabataan. The
Katipunan ng Kabataan in every barangay is composed
of all citizens actually residing in the barangay for at least
six months and who meet the membership age
requirement.
The first SK elections took place on December 4, 1992.
RA No. 7808 reset the SK elections to the first Monday of
May of 1996 and every three years thereafter. RA No.
7808 mandated the Comelec to supervise the conduct of
the SK elections under rules the Comelec shall
promulgate. Accordingly, the Comelec on December 4,
2001 issued Resolution Nos. 47136 and 47147 to govern
the SK elections on May 6, 2002.
On February 18, 2002, petitioner Antoniette V.C.
Montesclaros ("Montesclaros" for brevity) sent a letter8 to
the Comelec, demanding that the SK elections be held as
scheduled on May 6, 2002. Montesclaros also urged the
Comelec to respond to her letter within 10 days upon
receipt of the letter, otherwise, she will seek judicial relief.
On February 20, 2002, Alfredo L. Benipayo ("Chairman
Benipayo" for brevity), then Comelec Chairman, wrote
identical letters to the Speaker of the House9 and the
Senate President10 about the status of pending bills on
the SK and Barangay elections. In his letters, the
Comelec Chairman intimated that it was "operationally
very difficult" to hold both elections simultaneously in May
2002. Instead, the Comelec Chairman expressed support
for the bill of Senator Franklin Drilon that proposed to hold
the Barangay elections in May 2002 and postpone the SK
elections to November 2002.
Ten days lapsed without the Comelec responding to the
letter of Montesclaros. Subsequently, petitioners received
a copy of Comelec En Banc Resolution No. 476311 dated
February 5, 2002 recommending to Congress the
postponement of the SK elections to November 2002 but
holding the Barangay elections in May 2002 as
scheduled.12
41

On March 6, 2002, the Senate and the House of
Representatives passed their respective bills postponing
the SK elections. On March 11, 2002, the Bicameral
Conference Committee ("Bicameral Committee" for
brevity) of the Senate and the House came out with a
Report13 recommending approval of the reconciled bill
consolidating Senate Bill No. 205014 and House Bill No.
4456.15 The Bicameral Committee's consolidated bill
reset the SK and Barangay elections to July 15, 2002 and
lowered the membership age in the SK to at least 15 but
not more than 18 years of age.
On March 11, 2002, petitioners filed the instant petition.
On March 11, 2002, the Senate approved the Bicameral
Committee's consolidated bill and on March 13, 2002, the
House of Representatives approved the same. The
President signed the approved bill into law on March 19,
2002.
The Issues
Petitioners16 raise the following grounds in support of
their petition:
"I.
RESPONDENTS ACTED WHIMSICALLY, ILLEGALLY
AND UNCONSTITUTIONALLY THUS CONSTITUTED
(SIC) WITH GRAVE ABUSE OF DISCRETION,
AMOUNTING TO LACK OR EXCESS OF
JURISDICTION WHEN THEY INTENDED TO
POSTPONE THE SK ELECTIONS.
II.
RESPONDENTS ACTED WHIMSICALLY, ILLEGALLY
AND UNCONSTITUTIONALLY THUS CONSTITUTED
(SIC) WITH GRAVE ABUSE OF DISCRETION,
AMOUNTING TO LACK OR EXCESS OF
JURISDICTION WHEN THEY INTENDED TO
DISCRIMINATE, DISENFRANCHISE, SINGLE OUT
AND DISMEMBER THE SK MEMBERS WHO ARE 18
BUT NOT LESS17 (SIC) THAN 21 YEARS OLD
COMPOSED OF ABOUT 7 MILLION YOUTH.
III.
RESPONDENTS ACTED WHIMSICALLY, ILLEGALLY
AND UNCONSTITUTIONALLY THUS CONSTITUTED
(SIC) WITH GRAVE ABUSE OF DISCRETION,
AMOUNTING TO LACK OR EXCESS OF
JURISDICTION WHEN THEY WILLFULLY FAILED TO
FUND THE SK ELECTION PURPORTEDLY TO
POSTPONE THE SAME IN ORDER TO IMPLEMENT
THEIR ILLEGAL SCHEME AND MACHINATION IN
SPITE OF THE FACT THAT THERE ARE AVAILABLE
FUNDS FOR THE PURPOSE.
IV.
THE INCUMBENT SK OFFICERS WANTED TO
PERPETUALLY SIT ON THEIR RESPECTIVE OFFICES
CONTRARY TO THE ENVISION (SIC) OF THE
CREATION OF THE SK ORGANIZATION, HENCE, IN
VIOLATION OF LAW AND CONSTITUTION."18
The Court's Ruling
The petition is bereft of merit.
At the outset, the Court takes judicial notice of the
following events that have transpired since petitioners
filed this petition:
1. The May 6, 2002 SK elections and May 13, 2002
Barangay elections were not held as scheduled.
2. Congress enacted RA No. 916419 which provides that
voters and candidates for the SK elections must be "at
least 15 but less than 18 years of age on the day of the
election."20 RA No. 9164 also provides that there shall be
a synchronized SK and Barangay elections on July 15,
2002.
3. The Comelec promulgated Resolution No. 4846, the
rules and regulations for the conduct of the July 15, 2002
synchronized SK and Barangay elections.
Petitioners, who all claim to be 20 years old, argue that
the postponement of the May 6, 2002 SK elections
disenfranchises them, preventing them from voting and
being voted for in the SK elections. Petitioners' theory is
that if the SK elections were postponed to a date later than
May 6, 2002, the postponement would disqualify from SK
membership youths who will turn 21 years old between
May 6, 2002 and the date of the new SK elections.
Petitioners claim that a reduction in the SK membership
age to 15 but less than 18 years of age from the then
membership age of 15 but not more than 21 years of age
would disqualify about seven million youths. The public
respondents' failure to hold the elections on May 6, 2002
would prejudice petitioners and other youths similarly
situated.
Thus, petitioners instituted this petition to: (1) compel
public respondents to hold the SK elections on May 6,
2002 and should it be postponed, the SK elections should
be held not later than July 15, 2002; (2) prevent public
respondents from passing laws and issuing resolutions
and orders that would lower the membership age in the
SK; and (3) compel public respondents to allow
petitioners and those who have turned more than 21
years old on May 6, 2002 to participate in any re-
scheduled SK elections.
The Court's power of judicial review may be exercised in
constitutional cases only if all the following requisites are
complied with, namely: (1) the existence of an actual and
appropriate case or controversy; (2) a personal and
substantial interest of the party raising the constitutional
question; (3) the exercise of judicial review is pleaded at
the earliest opportunity; and (4) the constitutional question
is the lis mota of the case.21
In the instant case, there is no actual controversy
requiring the exercise of the power of judicial review.
While seeking to prevent a postponement of the May 6,
2002 SK elections, petitioners are nevertheless amenable
to a resetting of the SK elections to any date not later than
July 15, 2002. RA No. 9164 has reset the SK elections to
July 15, 2002, a date acceptable to petitioners. With
respect to the date of the SK elections, there is therefore
no actual controversy requiring judicial intervention.
Petitioners' prayer to prevent Congress from enacting into
law a proposed bill lowering the membership age in the
SK does not present an actual justiciable controversy. A
proposed bill is not subject to judicial review because it is
not a law. A proposed bill creates no right and imposes no
duty legally enforceable by the Court. A proposed bill,
having no legal effect, violates no constitutional right or
duty. The Court has no power to declare a proposed bill
42
constitutional or unconstitutional because that would be in
the nature of rendering an advisory opinion on a proposed
act of Congress. The power of judicial review cannot be
exercised in vacuo.22 The second paragraph of Section
1, Article VIII of the Constitution states –
"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)
Thus, there can be no justiciable controversy involving the
constitutionality of a proposed bill. The Court can exercise
its power of judicial review only after a law is enacted, not
before.
Under the separation of powers, the Court cannot restrain
Congress from passing any law, or from setting into
motion the legislative mill according to its internal rules.
Thus, the following acts of Congress in the exercise of its
legislative powers are not subject to judicial restraint: the
filing of bills by members of Congress, the approval of bills
by each chamber of Congress, the reconciliation by the
Bicameral Committee of approved bills, and the eventual
approval into law of the reconciled bills by each chamber
of Congress. Absent a clear violation of specific
constitutional limitations or of constitutional rights of
private parties, the Court cannot exercise its power of
judicial review over the internal processes or procedures
of Congress.23
The Court has also no power to dictate to Congress the
object or subject of bills that Congress should enact into
law. The judicial power to review the constitutionality of
laws does not include the power to prescribe to Congress
what laws to enact. The Court has no power to compel
Congress by mandamus to enact a law allowing
petitioners, regardless of their age, to vote and be voted
for in the July 15, 2002 SK elections. To do so would
destroy the delicate system of checks and balances finely
crafted by the Constitution for the three co-equal,
coordinate and independent branches of government.
Under RA No. 9164, Congress merely restored the age
requirement in PD No. 684, the original charter of the SK,
which fixed the maximum age for membership in the SK
to youths less than 18 years old. Petitioners do not have
a vested right to the permanence of the age requirement
under Section 424 of the Local Government Code of
1991. Every law passed by Congress is always subject to
amendment or repeal by Congress. The Court cannot
restrain Congress from amending or repealing laws, for
the power to make laws includes the power to change the
laws.24
The Court cannot also direct the Comelec to allow over-
aged voters to vote or be voted for in an election that is
limited under RA No. 9164 to youths at least 15 but less
than 18 years old. A law is needed to allow all those who
have turned more than 21 years old on or after May 6,
2002 to participate in the July 15, 2002 SK elections.
Youths from 18 to 21 years old as of May 6, 2002 are also
no longer SK members, and cannot participate in the July
15, 2002 SK elections. Congress will have to decide
whether to enact an amendatory law. Petitioners' remedy
is legislation, not judicial intervention.
Petitioners have no personal and substantial interest in
maintaining this suit. A party must show that he has been,
or is about to be denied some personal right or privilege
to which he is lawfully entitled.25 A party must also show
that he has a real interest in the suit. By "real interest" is
meant a present substantial interest, as distinguished
from a mere expectancy or future, contingent,
subordinate, or inconsequential interest.26
In the instant case, petitioners seek to enforce a right
originally conferred by law on those who were at least 15
but not more than 21 years old. Now, with the passage of
RA No. 9164, this right is limited to those who on the date
of the SK elections are at least 15 but less than 18 years
old. The new law restricts membership in the SK to this
specific age group. Not falling within this classification,
petitioners have ceased to be members of the SK and are
no longer qualified to participate in the July 15, 2002 SK
elections. Plainly, petitioners no longer have a personal
and substantial interest in the SK elections.
This petition does not raise any constitutional issue. At the
time petitioners filed this petition, RA No. 9164, which
reset the SK elections and reduced the age requirement
for SK membership, was not yet enacted into law. After
the passage of RA No. 9164, petitioners failed to assail
any provision in RA No. 9164 that could be
unconstitutional. To grant petitioners' prayer to be allowed
to vote and be voted for in the July 15, 2002 SK elections
necessitates assailing the constitutionality of RA No.
9164. This, petitioners have not done. The Court will not
strike down a law unless its constitutionality is properly
raised in an appropriate action and adequately argued.27
The only semblance of a constitutional issue, albeit
erroneous, that petitioners raise is their claim that SK
membership is a "property right within the meaning of the
Constitution."28 Since certain public offices are
"reserved" for SK officers, petitioners also claim a
constitutionally protected "opportunity" to occupy these
public offices. In petitioners' own words, they and others
similarly situated stand to "lose their opportunity to work
in the government positions reserved for SK members or
officers."29 Under the Local Government Code of 1991,
the president of the federation of SK organizations in a
municipality, city or province is an ex-officio member of
the municipal council, city council or provincial board,
respectively.30 The chairperson of the SK in the barangay
is an ex-officio member of the Sangguniang Barangay.31
The president of the national federation of SK
organizations is an ex-officio member of the National
Youth Commission, with rank of a Department Assistant
Secretary.32
Congress exercises the power to prescribe the
qualifications for SK membership. One who is no longer
qualified because of an amendment in the law cannot
complain of being deprived of a proprietary right to SK
membership. Only those who qualify as SK members can
contest, based on a statutory right, any act disqualifying
them from SK membership or from voting in the SK
elections. SK membership is not a property right protected
by the Constitution because it is a mere statutory right
conferred by law. Congress may amend at any time the
law to change or even withdraw the statutory right.
A public office is not a property right. As the Constitution
expressly states, a "[P]ublic office is a public trust."33 No
one has a vested right to any public office, much less a
vested right to an expectancy of holding a public office. In
Cornejo v. Gabriel,34 decided in 1920, the Court already
ruled:
43
"Again, for this petition to come under the due process of
law prohibition, it would be necessary to consider an office
a "property." It is, however, well settled x x x that a public
office is not property within the sense of the constitutional
guaranties of due process of law, but is a public trust or
agency. x x x The basic idea of the government x x x is
that of a popular representative government, the officers
being mere agents and not rulers of the people, one
where no one man or set of men has a proprietary or
contractual right to an office, but where every officer
accepts office pursuant to the provisions of the law and
holds the office as a trust for the people he represents."
(Emphasis supplied)
Petitioners, who apparently desire to hold public office,
should realize from the very start that no one has a
proprietary right to public office. While the law makes an
SK officer an ex-officio member of a local government
legislative council, the law does not confer on petitioners
a proprietary right or even a proprietary expectancy to sit
in local legislative councils. The constitutional principle of
a public office as a public trust precludes any proprietary
claim to public office. Even the State policy directing
"equal access to opportunities for public service"35
cannot bestow on petitioners a proprietary right to SK
membership or a proprietary expectancy to ex-officio
public offices.
Moreover, while the State policy is to encourage the
youth's involvement in public affairs,36 this policy refers
to those who belong to the class of people defined as the
youth. Congress has the power to define who are the
youth qualified to join the SK, which itself is a creation of
Congress. Those who do not qualify because they are
past the age group defined as the youth cannot insist on
being part of the youth. In government service, once an
employee reaches mandatory retirement age, he cannot
invoke any property right to cling to his office. In the same
manner, since petitioners are now past the maximum age
for membership in the SK, they cannot invoke any
property right to cling to their SK membership.
The petition must also fail because no grave abuse of
discretion attended the postponement of the SK elections.
RA No. 9164 is now the law that prescribes the
qualifications of candidates and voters for the SK
elections. This law also fixes the date of the SK elections.
Petitioners are not even assailing the constitutionality of
RA No. 9164. RA No. 9164 enjoys the presumption of
constitutionality and will apply to the July 15, 2002 SK
elections.
Petitioners have not shown that the Comelec acted
illegally or with grave abuse of discretion in
recommending to Congress the postponement of the SK
elections. The very evidence relied upon by petitioners
contradict their allegation of illegality. The evidence
consist of the following: (1) Comelec en banc Resolution
No. 4763 dated February 5, 2002 that recommended the
postponement of the SK elections to 2003; (2) the letter
of then Comelec Chairman Benipayo addressed to the
Speaker of the House of Representatives and the
President of the Senate; and (3) the Conference
Committee Report consolidating Senate Bill No. 2050 and
House Bill No. 4456.
The Comelec exercised its power and duty to "enforce
and administer all laws and regulations relative to the
conduct of an election, plebiscite, initiative, referendum
and recall"37 and to "recommend to Congress effective
measures to minimize election spending."38 The
Comelec's acts enjoy the presumption of regularity in the
performance of official duties.39 These acts cannot
constitute proof, as claimed by petitioners, that there
"exists a connivance and conspiracy (among)
respondents in contravention of the present law." As the
Court held in Pangkat Laguna v. Comelec,40 the
"Comelec, as the government agency tasked with the
enforcement and administration of elections laws, is
entitled to the presumption of regularity of official acts with
respect to the elections."
The 1987 Constitution imposes upon the Comelec the
duty of enforcing and administering all laws and
regulations relative to the conduct of elections. Petitioners
failed to prove that the Comelec committed grave abuse
of discretion in recommending to Congress the
postponement of the May 6, 2002 SK elections. The
evidence cited by petitioners even establish that the
Comelec has demonstrated an earnest effort to address
the practical problems in holding the SK elections on May
6, 2002. The presumption remains that the decision of the
Comelec to recommend to Congress the postponement
of the elections was made in good faith in the regular
course of its official duties.
Grave abuse of discretion is such capricious and
whimsical exercise of judgment that is patent and gross
as to amount to an evasion of a positive duty or a virtual
refusal to perform a duty enjoined by law.41 Public
respondents having acted strictly pursuant to their
constitutional powers and duties, we find no grave abuse
of discretion in their assailed acts.
Petitioners contend that the postponement of the SK
elections would allow the incumbent SK officers to
perpetuate themselves in power, depriving other youths
of the opportunity to serve in elective SK positions. This
argument deserves scant consideration. While RA No.
9164 contains a hold-over provision, incumbent SK
officials can remain in office only until their successors
have been elected or qualified. On July 15, 2002, when
the SK elections are held, the hold-over period expires
and all incumbent SK officials automatically cease to hold
their SK offices and their ex-officio public offices.
In sum, petitioners have no personal and substantial
interest in maintaining this suit. This petition presents no
actual justiciable controversy. Petitioners do not cite any
provision of law that is alleged to be unconstitutional.
Lastly, we find no grave abuse of discretion on the part of
public respondents.
WHEREFORE, the petition is DISMISSED for utter lack
of merit.
SO ORDERED.
Davide, Jr., C.J., Bellosillo, Puno, Vitug, Kapunan,
Mendoza, Panganiban, Quisumbing, Ynares-Santiago,
Sandoval-Gutierrez, Austria-Martinez, and Corona, JJ.,
concur.
44
EN BANC
November 29, 2016
G.R. No. 218406
PHILIPPINE CONSTITUTION ASSOCIATION
(PHILCONSA), represented by its President Ferdinand
Martin G. Romualdez, FRANCISCO S. TATAD,
ARCHBISHOP RAMON C. ARGUELLES, ARCHBISHOP
ROMULO T. DE LA CRUZ, ARCHBISHOP FERNANDO
R. CAPALLA, and NORBERTO B. GONZALES,
Petitioners
vs.
PHILIPPINE GOVERNMENT (GPH), represented by
MARVIC M.V.F. LEONEN, and MIRIAM CORONEL
FERRER, MORO ISLAMIC LIBERATION FRONT,
FLORENCIO B. ABAD, and COMMISSION ON AUDIT,
Respondents
x-----------------------x
G.R. No. 218761
TANGGULANG DEMOKRASYA (TAN DEM), INC.,
represented by its President TERESITA DAZA
BALTAZAR, PILAR L. CALDERON, RIZALITO YAP
DAVID, ROSITA K. IMPERIAL, MA. SALOME A. MABLE,
SERAFIN G. OCAMPO, and ELENA SAN AGUSTIN,
Petitioners,
vs.
PHILIPPINE GOVERNMENT (GPH), represented by
MARVIC M.V.F. LEONEN and MIRIAM CORONEL
FERRER, and MORO ISLAMIC LIBERATION FRONT,
represented by Mohagher Iqbal, Respondents.
x-----------------------x
G.R. No. 204355
REV. VICENTE LIBRADORES AQUINO, REV.
MERCIDITA S. REDOBLE, and INTERNATIONAL
MINISTRIES FOR PERFECTION AND PARTY AGAINST
COMMUNISM AND TERRORISM, INC. represented by
its President, Petitioners,
vs.
GPH PEACE PANEL CHIEF NEGOTIATOR ATTY.
MARVIC M.V.F. LEONEN, HON. SECRETARY
TERESITA QUINTOS-DELES, PRESIDENTIAL
ADVISER ON THE PEACE PROCESS, HON. PAQUITO
L. OCHOA, EXECUTIVE SECRETARY, and MEMBERS
OF THE GPH PEACE PANEL, Respondents.
x-----------------------x
G.R. No. 218407
JACINTO V. PARAS, Petitioner,
vs.
MIRIAM CORONEL FERRER, SENEN C. BACANI,
YASMIN BUSRAN-LAO, MEHOL K. SADAIN, and
TERESITA DELES, Respondents.
x-----------------------x
G.R. No. 204354
REV. ELLY VELEZ PAMATONG, ESQ., Petitioner,
vs.
GOVERNMENT OF THE REPUBLIC OF THE
PHILIPPINES PEACE PANEL ON BANGSAMORO,
REPRESENTED BY ITS NEGOTIATORS, MARVIC
M.V.F. LEONEN, and PRESIDENT BENIGNO S.
AQUINO III, Respondents.
DECISION
CARPIO, J.:
The Case
Before the Court are consolidated petitions1 challenging
the constitutionality and validity of the Comprehensive
Agreement on the Bangsamoro (CAB) and the
Framework Agreement on the Bangsamoro (FAB)
entered into between the Government of the Philippines
and the Moro Islamic Liberation Front (MILF) on 27 March
2014 and 12 October 2012, respectively.
In G.R. No. 218406, petitioners Philippine Constitution
Association (Philconsa), represented by its President
Ferdinand Martin G. Romualdez, Francisco S. Tatad,
Archbishop Ramon C. Arguelles, Archbishop Fernando
R. Capalla, Archbishop Romulo T. de la Cruz, and
Norberto B. Gonzales contend that the provisions of the
CAB and the F AB violate the Constitution and existing
laws. They argue that the conduct of the peace process
was defective since the Government of the Republic of
the Philippines (GRP) Peace Panel negotiated only with
the MILF and not with the other rebel groups. Hence,
respondents violated Section 3(e) and (g) of Republic Act
No. 30192 in giving unwarranted advantages to the MILF.
Petitioners further argue that respondents committed
grave abuse of discretion when they "committed to cause
the amendment of the Constitution and existing laws to
conform to the FAB and CAB x x x."3
In G.R. No. 218761, petitioners Tanggulang Demokrasya
(TAN DEM), Inc., represented by its President Teresita
Daza Baltazar, Pilar L. Calderon, Rizalito Yap David,
Rosita K. Imperial, Ma. Salome A. Mable, Serfin G.
Ocampo, and Elena San Agustin claim that the CAB and
the FAB are unconstitutional since the agreements seek
to create a virtual sub-state known as the Bangsamoro
Political Entity (BPE) to replace the Autonomous Region
of Muslim Mindanao (ARMM), and guarantee to make
amendments to the Constitution to shift from the present
unitary state to a new federal state which is beyond the
GRP Peace Panel's power and authority to commit.
In G.R. No. 204355, petitioners Rev. Vicente Libradores
Aquino, Rev. Mercidita S. Redoble, and International
Ministries for Perfection and Party Against Communism
and Terrorism, Inc. (IMPPACT, Inc.) argue that the GRP
Peace Panel usurped the power of Congress to enact,
amend, or repeal laws since it bound Congress to agree
to the provisions of the F AB and abolish the ARMM.
Petitioners add that the FAB provisions are replete with
ambiguities, violative of the provisions of the Constitution,
and inconsistent with Republic Act No. 9054.4
In G.R. No. 218407, petitioner Jacinto V. Paras argues
that the CAB and the FAB violate the provisions of the
Constitution, as well as the consultation requirement
under Executive Order (EO) No. 3 and Memorandum of
Instructions of the President. Petitioner further contends
that respondents exceeded their authority when they
guaranteed the amendment of certain provisions of the
Constitution to conform to the CAB and the FAB.
In G.R. No. 204354, petitioner Rev. Elly Velez Pamatong
claims that the constitutionally infirm MOA-AD of 2008
and the FAB are substantially the same since they are
both aimed at creating a "fully independent Islamic State"
covering Mindanao, Palawan, and Sulu.5 Petitioner
argues, among others, that there were no consultations
regarding the FAB. Petitioner further contends that the
doctrine of res judicata applies since the MOA-AD and the
FAB are similar. Consequently, the decision in the MOA-
AD case is applicable. In addition, petitioner argues that
45
the FAB is void for being unconstitutional since (1) under
Section 18, Article X of the Constitution, an autonomous
region can only be created by Congress and the President
does not have the power to establish the Bangsamoro
with the rebel group MILF; (2) the FAB is not a peace
agreement but allegedly a conspiracy to establish an
independent Bangsamoro Republic under Malaysian
tutelage; and (3) the FAB guarantees constitutional
amendments, which act is contrary to the mechanisms set
forth in the Constitution itself.
Essentially, the petitions commonly seek to declare the
CAB and the FAB unconstitutional for being similar to the
void MOA-AD, which was struck down by the Court for
violating, among others, the constitutional provisions on
constitutional amendments.
The Facts
On 15 September 1993, President Fidel V. Ramos issued
EO No. 1256 creating the Office of the Presidential
Adviser on the Peace Process and calling for a
"comprehensive, integrated and holistic peace process
with Muslim rebels" in Mindanao. On 28 February 2001,
President Gloria Macapagal-Arroyo issued. EO .No. 37
which amended EO No. 125 to reaffirm the government's
commitment to achieve just and lasting peace in the
Philippines through a comprehensive peace process.
Pursuant to EO No. 3, the Government Peace Negotiating
Panel (GPNP) held negotiations with the MILF, an armed,
revolutionary Muslim separatist group based in Mindanao
seeking separation of the Muslim people from the central
government. The negotiations eventually led to the
preparation of the Memorandum of Agreement on
Ancestral Domain (MOA-AD) on 27 July 2008. However,
on 14 October 2008, in the case of Province of North
Cotabato v. Government of the Republic of the Philippines
Peace Panel on Ancestral Domain,8 the Court declared
the MOA-AD unconstitutional.
During the administration of President Benigno S. Aquino
III, the government resumed peace negotiations with the
MILF. Marvic M.V.F. Leonen9 headed the GPNP and
became the government's chief peace negotiator with the
MILF in July 2010.
On 15 October 2012, a preliminary peace agreement
called the FAB10 was signed between the government
and the MILF. The F AB called for the creation of an
autonomous political entity named Bangsamoro,
replacing the ARMM.
After further negotiations, the following Annexes and
Addendum to the FAB were also signed in Kuala Lumpur,
Malaysia:
a) Annex on Transitional Arrangements and Modalities;11
b) Annex on Revenue Generation and Wealth Sharing;12
c) Annex on Power Sharing;13
d) Annex on Normalization;14 and
e) On the Bangsamoro Waters and Zones of Joint
Cooperation Addendum to the Annex on Revenue
Generation and Wealth Sharing and the Annex on Power
Sharing.15
The Annexes and Addendum discussed the following:
a) The Annex on Transitional Arrangements and
Modalities, signed on 27 February 2013, established the
transitional process for the establishment of the
Bangsamoro and detailed the creation of the Bangsamoro
Transition Commission, the Bangsamoro Basic Law and
the Bangsamoro Transition Authority.
b) The Annex on Revenue Generation and Wealth
Sharing, signed on 13 July 2013, enumerated the creation
of sources of revenues for the Bangsamoro government
and its power to levy taxes, fees and charges.
c) The Annex on Power Sharing, signed on 8 December
2013, discussed intergovernmental relations of the
central government, the Bangsamoro government and
the constituent units under the Bangsamoro.
d) The Annex on Normalization, signed on 25 January
2014, outlined the laying down of weapons of MILF
members and their transition to civilian life.
e) The Addendum on the Bangsamoro Waters and Zones
of Joint Cooperation, signed on 25 January 2014, detailed
the scope of waters under the territorial jurisdiction of the
Bangsamoro (12 nautical miles from the coast) and Zones
of Joint Cooperation in the Sulu Sea and the Moro Gulf.
On 7 December 2012, Miriam Coronel-Ferrer succeeded
Marvic M.V.F. Leonen as GPNP Chairperson.
On 17 December 2012, President Benigno S. Aquino III
issued EO No. 120,16 constituting the Bangsamoro
Transition Commission, tasked, among others, to (1) draft
the proposed Bangsamoro Basic Law with provisions
consistent with the FAB, and (2) recommend to Congress
or the people proposed amendments to the 1987
Philippine Constitution.17 Under Section 5 of the same
EO, the Bangsamoro Transition Commission shall cease
to operate upon the enactment by Congress of the
Bangsamoro Basic Law.
On 27 March 2014, the Philippine Government,
represented by GPNP Chairperson Miriam Coronel-
Ferrer, signed the CAB,18 which was an integration of the
FAB, the Annexes and the other agreements19 previously
executed by the government and the MILF.
On 10 September 2014, a draft of the Bangsamoro Basic
Law, referred to as House Bill (HB) No. 4994,20 was
presented by President Aquino to the 16th Congress. On
27 May 2015, in Committee Report No. 747, the Ad Hoc
Committee on the Basic Bangsamoro Law of the House
of Representatives substituted said bill and passed
another version known as House Bill No. 5811.21 In the
Senate, a revised version of the Bangsamoro Basic Law,
known as the Basic Law for the Bangsamoro Autonomous
Region or Senate Bill No. 2894,22 was presented on 10
August 2015. However, on 6 June 2016, the 16th
Congress adjourned23 without passing the proposed
Bangsamoro Basic Law.
Meanwhile, several petitions were filed with this Court
assailing the constitutionality of the CAB, including the
FAB, and its Annexes. G.R. Nos. 204354 and 204355,
which were both filed in 2012, were consolidated pursuant
to a Resolution24 dated 11 December 2012. Likewise, in
a Resolution25 dated 23 June 2015, G.R. Nos. 218406
and 218407 were consolidated. In a Resolution26 dated
12 January 2016, the Court granted the consolidation of
G.R. No. 218761 with G.R. Nos. 218406 and 218407. In
a Resolution dated 22 November 2016, all five petitions
were consolidated.
46

On 7 November 2016, President Rodrigo Roa Duterte
issued EO No. 0827 expanding the membership and
functions of the Bangsamoro Transition Commission. EO
No. 08 expands the number of members of the
Bangsamoro Transition Commission from 15 to 21.
Section 3 of EO No. 120, as amended by EO No. 08,
provides for the functions of the Bangsamoro Transition
Commission, which include drafting proposals for a
Bangsamoro Basic Law, to be submitted to the Office of
the President for submission to Congress, and
recommending to Congress or the people proposed
amendments to the 1987 Philippine Constitution.
The Issue
The threshold issue in this case is whether the CAB,
including the FAB, is constitutional.
The Court's Ruling
We dismiss the petitions.
Not ripe for adjudication due to non-enactment of
the Bangsamoro Basic Law
Section 1, Article VIII of the Constitution spells out what
judicial power is, to wit:
Section 1. The judicial power shall be vested in one
Supreme Court and in such lower courts as may be
established by law.
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.
Pursuant to this constitutional provision, it is clear that the
Court's judicial review power is limited to actual cases or
controversies. The Court generally declines to issue
advisory opinions or to resolve hypothetical or feigned
problems, or mere academic questions. The limitation of
the power of judicial review to actual cases and
controversies assures that the courts will not intrude into
areas specifically confined to the other branches of
government.28
An actual case or controversy involves a conflict of legal
rights, an assertion of opposite legal claims, susceptible
of judicial resolution as distinguished from a hypothetical
or abstract difference or dispute.29 There must be a
contrast of legal rights that can be interpreted and
enforced on the basis of existing law and jurisprudence.30
The Court can decide the constitutionality of an act, either
by the Executive or Legislative, only when an actual case
between opposing parties is submitted for judicial
determination.31
Closely linked to the requirement of an actual case or
controversy is the requirement of ripeness. A question is
ripe for adjudication when the act being challenged has
had a direct adverse effect on the individual or entity
challenging it.32 For a case to be considered ripe for
adjudication, it is a prerequisite that an act had then been
accomplished or performed by either branch of
government before a court may interfere, and the
petitioner must allege the existence of an immediate or
threatened injury to himself as a result of the challenged
action.33 Petitioner must show that he has sustained or
is immediately in danger of sustaining some direct injury
as a result of the act complained of.34
In Province of North Cotabato v. GRP (MOA-AD case),35
which involved the Memorandum of Agreement on the
Ancestral Domain Aspect of the GRP-MILF Tripoli
Agreement on Peace of 2001, the Court faced the same
issue of ripeness. There, the Court explained the limits of
the power of judicial review and the prerequisites for the
judicial determination of a case.
In the MO A-AD case, the Court rejected the argument of
the Solicitor General that there was no justiciable
controversy that was ripe for adjudication. The Court
disagreed with the Solicitor General's contention that the
initialed but "unsigned MOA-AD is simply a list of
consensus points subject to further negotiations and
legislative enactments as well as constitutional processes
aimed at attaining a final peaceful agreement. x x x [T]he
MOA-AD remains to be a proposal that does not
automatically create legally demandable rights and
obligations until the list of operative acts required have
been duly complied with."36 The Court ruled that "[w]hen
an act of a branch of government is seriously alleged to
have infringed the Constitution, it becomes not only the
right but in fact the duty of the judiciary to settle the
dispute."37 Moreover, in the MOA-AD case, the
Executive was about to sign the initialed MOA-AD with the
MILF in Kuala Lumpur, Malaysia in the presence of
representatives of foreign states. Only the prompt
issuance by this Court of a temporary restraining order
stopped the signing, averting the implications that such
signing would have caused.
In the present case, however, the Court agrees with the
Solicitor General that there is no actual case or
controversy requiring a full-blown resolution of the
principal issue presented by petitioners.
Unlike the unconstitutional MOA-AD, the CAB, including
the FAB, mandates the enactment of the Bangsamoro
Basic Law in order for such peace agreements to be
implemented. In the MOA-AD case, there was nothing in
the MOA-AD which required the passage of any statute to
implement the provisions of the MOA-AD, which in
essence would have resulted in dramatically
dismembering the Philippines by placing the provinces
and areas covered by the MOA-AD under the control and
jurisdiction of a Bangsamoro Juridical Entity.38
The MOA-AD as an agreement did not provide for the
enactment of subsequent legislation to implement its
provisions. In fact, its provisions were immediately
implementable after its signing warranting the timely
intervention by this Court to rule on its constitutionality.
Further, under the MOA-AD, the Executive branch
assumed the mandatory obligation to amend the
Constitution to conform to the MOAAD.1âwphi1 The
Executive branch guaranteed to the MILF that the
Constitution would be drastically overhauled to conform
to the MOA-AD. In effect, the Executive branch usurped
the sole discretionary power of Congress to propose
amendments to the Constitution as well as the exclusive
power of the sovereign people to approve· or disapprove
such proposed amendments.39 Thus, this Court struck
down the MOA-AD as unconstitutional since such ultra
vires commitment by the Executive branch constituted
grave abuse of discretion amounting to lack or excess of
jurisdiction.
47
In the present case, there is no such guarantee when the
CAB and the FAB were signed. The government gives no
commitment, express or implied, that the Constitution will
be amended or that a law will be passed comprising all
the provisions indicated in the CAB and the FAB. Thus,
contrary to the imagined fear of petitioners, the CAB and
the FAB are not mere reincarnations or disguises of the
infirm MOA-AD.
The CAB and the FAB require the enactment of the
Bangsamoro Basic Law for their implementation. It is a
fundamental constitutional principle that Congress has full
discretion to enact the kind of Bangsamoro Basic Law that
Congress, in its wisdom, deems necessary and proper to
promote peace and development in Muslim areas in
Mindanao. Congress is expected to seriously consider the
CAB and the FAB but Congress is not bound by the CAB
and the FAB. Congress is separate, independent, and co-
equal of the Executive branch that alone entered into the
CAB and the FAB. The Executive branch cannot compel
Congress to adopt the CAB and the FAB. Neither can
Congress dictate on Congress the contents of the
Bangsamoro Basic Law, or the proposed amendments to
the Constitution that Congress should submit to the
people for ratification.
The CAB and the FAB cannot be implemented without the
passage of the Bangsamoro Basic Law. The CAB and the
FAB remain peace agreements whose provisions cannot
be enforced and given any legal effect unless the
Bangsamoro Basic Law is duly passed by Congress and
subsequently ratified in accordance with the Constitution.
The CAB and the FAB are preparatory documents that
can "trigger a series of acts"40 that may lead to the
exercise by Congress of its power to enact an organic act
for an autonomous region under Section 18, Article X41
of the Constitution. The CAB and the FAB do not purport
to preempt this Congressional power.
Provision I(C) of the Annex on Transitional Arrangements
and Modalities provides that "[t]he proposed Basic Law
shall be submitted to the Office of the President" and that
"[t]he President shall submit the proposed Basic Law to
Congress as a legislative proposal. The bill for the
proposed Basic Law shall be certified as urgent by the
President." The CAB, as the consolidation of the peace
agreements between the government and the MILF,
requires the drafting of the Bangsamoro Basic Law, its
submission to the Office of the President and the
President's submission of a draft Bangsamoro Basic Law
to Congress as a legislative proposal. It is a fundamental
premise of the CAB that a law and a ratification process
are required for its "actual implementation."
Significantly, President Rodrigo Roa Duterte issued EO
No. 08 expanding the membership and functions of the
Bangsamoro Transition Commission. EO No. 08
increases the number of members of the Bangsamoro
Transition Commission from 15 to 21. Section 3 of EO No.
120, as amended by EO No. 08, provides for the functions
of the Bangsamoro Transition Commission, which include
drafting proposals for a Bangsamoro Basic Law, to be
submitted to the Office of the President for submission to
Congress, and recommending to Congress proposed
amendments to the Constitution for submission to the
people for ratification.
The functions of the Bangsamoro Transition Commission,
which explicitly include the drafting of proposals for a
Bangsamoro Basic Law, as required under the CAB and
the FAB, highlight the fact that the CAB and the FAB are
mere preliminary framework agreements which will guide
the Bangsamoro Transition Commission in the
formulation of the proposed Bangsamoro Basic Law for
submission to Congress, which may adopt such proposed
law in whole or in part, amend or revise the same, or even
reject it outright.
During the Aquino administration, the Bangsamoro
Transition Commission submitted its proposed
Bangsamoro Basic Law to former President Benigno S.
Aquino III, who submitted the same to the l6th Congress,
which however failed to enact the same before its
adjournment. Thus, the bill proposing the Bangsamoro
Basic Law has to be refiled with the present Congress.
With the signing of EO No. 08 by President Duterte, the
expanded Bangsamoro Transition Commission shall
redraft the proposed Bangsamoro Basic Law to be
submitted to the President who is expected to certify it to
the present Congress as an urgent bill. Congress, in turn,
may or may not accept the proposed Bangsamoro Basic
Law as it is worded. There is therefore no guarantee that
Congress will enact the Bangsamoro Basic Law.
Congress has the sole discretion whether or not to pass
the Bangsamoro Basic Law, as proposed by the
Bangsamoro Transition Commission.
It is not the CAB or the FAB that will establish the
Bangsamoro but the Bangsamoro Basic Law enacted by
Congress and ratified in a plebiscite in accordance with
the Constitution. Congress must still enact a Bangsamoro
Basic Law. The requirement of a Bangsamoro Basic Law
under the CAB and the FAB ensures that the pitfalls under
the invalid MOA-AD will be avoided.
Even if there were today an existing bill on the
Bangsamoro Basic Law, it would still not be subject to
judicial review.42 The Court held in Montesclaros v.
COMELEC43 that it has no power to declare a proposed
bill constitutional or unconstitutional because that would
be in the nature of rendering an advisory opinion on a
proposed act of Congress. The power of judicial review
cannot be exercised in vacuo. As the Court in
Montesclaros noted, invoking Section 1, Article VIII of the
Constitution, there can be no justiciable controversy
involving the constitutionality of a proposed bill. The
power of judicial review comes into play only after the
passage of a bill, and not before.44 Unless enacted into
law, any proposed Bangsamoro Basic Law pending in
Congress is not subject to judicial review.
Clearly, any question on the constitutionality of the CAB
and the FAB, without the implementing Bangsamoro
Basic Law, is premature and not ripe for adjudication.
Until a Bangsamoro Basic Law is passed by Congress, it
is clear that there is no actual case or controversy that
requires the Court to exercise its power of judicial review
over a co-equal branch of government.
WHEREFORE, we DISMISS the petitions on the ground
of prematurity.
SO ORDERED.
ANTONIO T. CARPIO
Associate Justice
48
MOOTNESS
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 93100 June 19, 1997
ATLAS FERTILIZER CORPORATION, petitioner,
vs.
THE HONORABLE SECRETARY OF THE
DEPARTMENT OF AGRARIAN REFORM, respondent.
G.R. No. 97855 June 19, 1997
PHILIPPINE FEDERATION OF FISHFARM
PRODUCERS, INC. petitioner,
vs.
THE HONORABLE SECRETARY OF THE
DEPARTMENT OF AGRARIAN REFORM, respondent.
RESOLUTION
ROMERO, J.:
Before this Court are consolidated petitions questioning
the constitutionality of some portions of Republic Act No.
6657 otherwise known as the Comprehensive Agrarian
Reform Law. 1
Petitioners Atlas Fertilizer Corporation, 2 Philippine
Federation of Fishfarm Producers, Inc. and petitioner-in-
intervention Archie's Fishpond, Inc. and Arsenio Al.
Acuna 3 are engaged in the aquaculture industry utilizing
fishponds and prawn farms. They assail Sections 3 (b),
11, 13, 16 (d), 17 and 32 of R.A. 6657, as well as the
implementing guidelines and procedures contained in
Administrative Order Nos. 8 and 10 Series of 1988 issued
by public respondent Secretary of the Department of
Agrarian Reform as unconstitutional.
Petitioners claim that the questioned provisions of CARL
violate the Constitution in the following manner:
1. Sections 3 (b), 11, 13, 16 (d), 17 and 32 of CARL
extend agrarian reform to aquaculture lands even as
Section 4, Article XIII of the Constitution limits agrarian
reform only to agricultural lands.
2. The questioned provisions similarly treat of
aquaculture lands and agriculture lands when they are
differently situated, and differently treat aquaculture lands
and other industrial lands, when they are similarly situated
in violation of the constitutional guarantee of the equal
protection of the laws.
3. The questioned provisions distort employment
benefits and burdens in favor of aquaculture employees
and against other industrial workers even as Section 1
and 3, Article XIII of the Constitution mandate the State to
promote equality in economic and employment
opportunities.
4. The questioned provisions deprive petitioner of its
government-induced investments in aquaculture even as
Sections 2 and 3, Article XIII of the Constitution mandate
the State to respect the freedom of enterprise and the
right of enterprises to reasonable returns on investments
and to expansion and growth.
The constitutionality of the above-mentioned provisions
has been ruled upon in the case of Luz Farms, Inc. v.
Secretary of Agrarian Reform 4 regarding the inclusion of
land devoted to the raising of livestock, poultry and swine
in its coverage.
The issue now before this Court is the constitutionality of
the same above-mentioned provisions insofar as they
include in its coverage lands devoted to the aquaculture
industry, particularly fishponds and prawn farms.
In their first argument, petitioners contend that in the case
of Luz Farms, Inc. v. Secretary of Agrarian Reform, 5 this
Court has already ruled impliedly that lands devoted to
fishing are not agricultural lands. In aquaculture,
fishponds and prawn farms, the use of land is only
incidental to and not the principal factor in productivity
and, hence, as held in "Luz Farms," they too should be
excluded from R.A. 6657 just as lands devoted to
livestock, swine, and poultry have been excluded for the
same reason. They also argue that they are entitled to the
full benefit of "Luz Farms" to the effect that only five
percent of the total investment in aquaculture activities,
fishponds, and prawn farms, is in the form of land, and
therefore, cannot be classified as agricultural activity.
Further, that in fishponds and prawn farms, there are no
farmers, nor farm workers, who till lands, and no agrarian
unrest, and therefore, the constitutionally intended
beneficiaries under Section 4, Art. XIII, 1987 Constitution
do not exist in aquaculture.
In their second argument, they contend that R.A. 6657, by
including in its coverage, the raising of fish and
aquaculture operations including fishponds and prawn
ponds, treating them as in the same class or classification
as agriculture or farming violates the equal protection
clause of the Constitution and is, therefore, void. Further,
the Constitutional Commission debates show that the
intent of the constitutional framers is to exclude
"industrial" lands, to which category lands devoted to
aquaculture, fishponds, and fish farms belong.
Petitioners also claim that Administrative Order Nos. 8
and 10 issued by the Secretary of the Department of
Agrarian Reform are, likewise, unconstitutional, as held in
"Luz Farms," and are therefore void as they implement
the assailed provisions of CARL.
The provisions of CARL being assailed as
unconstitutional are as follows:
(a) Section 3 (b) which includes the "raising of fish in
the definition of "Agricultural, Agricultural Enterprise or
Agricultural Activity." (Emphasis Supplied)
(b) Section 11 which defines "commercial farms" as
private agricultural lands devoted to fishponds and prawn
ponds. . . . (Emphasis Supplied)
(c) Section 13 which calls upon petitioner to execute
a production-sharing plan.
(d) Section 16(d) and 17 which vest on the
Department of Agrarian reform the authority to summarily
determine the just compensation to be paid for lands
covered by the comprehensive Agrarian reform Law.
(e) Section 32 which spells out the production-
sharing plan mentioned in section 13 —
. . . (W)hereby three percent (3%) of the gross sales from
the production of such lands are distributed within sixty
(60) days at the end of the fiscal year as compensation to
regular and other farmworkers in such lands over and
49
above the compensation they currently receive: Provided,
That these individuals or entities realize gross sales in
excess of five million pesos per annum unless the DAR,
upon proper application, determines a lower ceiling.
In the event that the individual or entity realizes a profit,
an additional ten percent (10%) of the net profit after tax
shall be distributed to said regular and other farmworkers
within ninety (90) days of the end of the fiscal year. . . .
While the Court will not hesitate to declare a law or an act
void when confronted squarely with constitutional issues,
neither will it preempt the Legislative and the Executive
branches of the government in correcting or clarifying, by
means of amendment, said law or act. On February 20,
1995, Republic Act No. 7881 6 was approved by
Congress. Provisions of said Act pertinent to the assailed
provisions of CARL are the following:
Sec. 1. Section 3, Paragraph (b) of Republic Act No.
6657 is hereby amended to read as follows:
Sec. 3. Definitions. — For the purpose of this Act, unless
the context indicates otherwise:
(b) Agriculture, Agricultural Enterprise or Agricultural
Activity means the cultivation of the soil, planting of crops,
growing of fruit trees, including the harvesting of such
farm products and other farm activities and practices
performed by a farmer in conjunction with such farming
operations done by persons whether natural or juridical.
Sec. 2. Section 10 of Republic Act No. 6657 is hereby
amended to read as follows:
Sec. 10. Exemptions and Exclusions. —
xxx xxx xxx
b) Private lands actually, directly and exclusively
used for prawn farms and fishponds shall be exempt from
the coverage of this Act: Provided, That said prawn farms
and fishponds have not been distributed and Certificate of
Land Ownership Award (CLOA) issued to agrarian reform
beneficiaries under the Comprehensive Agrarian Reform
Program.
In cases where the fishponds or prawn farms have been
subjected to the Comprehensive Agrarian Reform Law, by
voluntary offer to sell, or commercial farms deferment or
notices of compulsory acquisition, a simple and absolute
majority of the actual regular workers or tenants must
consent to the exemption within one (1) year from the
effectivity of this Act. when the workers or tenants do not
agree to this exemption, the fishponds or prawn farms
shall be distributed collectively to the worker —
beneficiaries or tenants who shall form a cooperative or
association to manage the same.
In cases where the fishponds or prawn farms have not
been subjected to the Comprehensive Agrarian Reform
Law, the consent of the farm workers shall no longer be
necessary, however, the provision of Section 32-A hereof
on incentives shall apply.
xxx xxx xxx
Sec. 3. Section 11, Paragraph 1 is hereby amended to
read as follows:
Sec. 11. Commercial Farming. — Commercial
farms, which are private agricultural lands devoted to
saltbeds, fruit farms, orchards, vegetable and cut-flower
farms and cacao, coffee and rubber plantations, shall be
subject to immediate compulsory acquisition and
distribution after ten (10) years from the effectivity of this
Act. In the case of new farms, the ten-year period shall
begin from the first year of commercial production and
operation, as determined by the DAR. During the ten-year
period, the Government shall initiate steps necessary to
acquire these lands, upon payment of just compensation
for the land and the improvements thereon, preferably in
favor of organized cooperatives or associations, which
shall thereafter manage the said lands for the workers —
beneficiaries.
Sec. 4. There shall be incorporated after Section 32 of
Republic Act No. 6657 a section to read as follows
Sec. 32-A. Incentives. — Individuals or entities
owning or operating fishponds and prawn farms are
hereby mandated to execute within six (6) months from
the effectivity of this Act, an incentive plan with their
regular fishpond or prawn farm workers' organization, if
any, whereby seven point five percent (7.5%) of their net
profit before tax from the operation of the fishpond or
prawn farms are distributed within sixty (60) days at the
end of the fiscal year as compensation to regular and
other pond workers in such ponds over and above the
compensation they currently receive.
In order to safeguard the right of the regular fishpond or
prawn farm workers under the incentive plan, the books
of the fishpond or prawn owners shall be subject to
periodic audit or inspection by certified public accountants
chosen by the workers.
The foregoing provision shall not apply to agricultural
lands subsequently converted to fishponds or prawn
farms provided the size of the land converted does not
exceed the retention limit of the landowner.
The above-mentioned provisions of R.A. No. 7881
expressly state that fishponds and prawn farms are
excluded from the coverage of CARL. In view of the
foregoing, the question concerning the constitutionality of
the assailed provisions has become moot and academic
with the passage of R.A. No. 7881.
WHEREFORE, the petition is hereby DISMISSED.
SO ORDERED.
Narvasa, C.J., Regalado, Davide, Jr., Melo, Puno, Vitug,
Mendoza, Hermosisima, Jr., Panganiban and Torres, Jr.,
JJ., concur.
Padilla, Bellosillo, Kapunan and Francisco, JJ., are on
leave.
50
EN BANC
G.R. No. 147780 May 10, 2001
PANFILO LACSON, MICHAEL RAY B. AQUINO and
CESAR O. MANCAO, petitioners,
vs.
SECRETARY HERNANDO PEREZ, P/DIRECTOR
LEANDRO MENDOZA, and P/SR. SUPT. REYNALDO
BERROYA, respondents.
----------------------------------------
G.R. No. 147781 May 10, 2001
MIRIAM DEFENSOR-SANTIAGO, petitioner,
vs.
ANGELO REYES, Secretary of National Defense, ET AL.,
respondents.
----------------------------------------
G.R. No. 147799 May 10, 2001
RONALDO A. LUMBAO, petitioner,
vs.
SECRETARY HERNANDO PEREZ, GENERAL
DIOMEDIO VILLANUEVA, P/DIRECTOR LEANDRO
MENDOZA, and P/SR. SUPT. REYNALDO BERROYA,
respondents.
----------------------------------------
G.R. No. 147810 May 10, 2001
THE LABAN NG DEMOKRATIKONG PILIPINO,
petitioner,
vs.
THE DEPARTMENT OF JUSTICE, SECRETARY
HERNANDO PEREZ, THE ARMED FORCES OF THE
PHILIPPINES, GENERAL DIOMEDIO VILLANUEVA,
THE PHILIPPINE NATIONAL POLICE, and DIRECTOR
GENERAL LEANDRO MENDOZA, respondents.
RESOLUTION
MELO, J.:
On May 1, 2001, President Macapagal-Arroyo, faced by
an "angry and violent mob armed with explosives,
firearms, bladed weapons, clubs, stones and other deadly
weapons" assaulting and attempting to break into
Malacañang, issued Proclamation No. 38 declaring that
there was a state of rebellion in the National Capital
Region. She likewise issued General Order No. 1
directing the Armed Forces of the Philippines and the
Philippine National Police to suppress the rebellion in the
National Capital Region. Warrantless arrests of several
alleged leaders and promoters of the "rebellion" were
thereafter effected.
Aggrieved by the warrantless arrests, and the declaration
of a "state of rebellion," which allegedly gave a semblance
of legality to the arrests, the following four related petitions
were filed before the Court –
(1) G. R. No. 147780 for prohibition, injunction,
mandamus, and habeas corpus (with an urgent
application for the issuance of temporary restraining order
and/or writ of preliminary injunction) filed by Panfilio M.
Lacson, Michael Ray B. Aquino, and Cezar O. Mancao;
(2) G. R. No. 147781 for mandamus and/or review of the
factual basis for the suspension of the privilege of the writ
of habeas corpus, with prayer for the suspension of the
privilege of the writ of habeas corpus, with prayer for a
temporary restraining order filed by Miriam Defensor-
Santiago; (3) G. R. No. 147799 for prohibition and
injunction with prayer for a writ of preliminary injunction
and/or restraining order filed by Ronaldo A. Lumbao; and
(4) G. R. No. 147810 for certiorari and prohibition filed by
the political party Laban ng Demokratikong Pilipino.
All the foregoing petitions assail the declaration of a state
of rebellion by President Gloria Macapagal-Arroyo and
the warrantless arrests allegedly effected by virtue
thereof, as having no basis both in fact and in law.
Significantly, on May 6, 2001, President Macapagal-
Arroyo ordered the lifting of the declaration of a "state of
rebellion" in Metro Manila. Accordingly, the instant
petitions have been rendered moot and academic. As to
petitioners' claim that the proclamation of a "state of
rebellion" is being used by the authorities to justify
warrantless arrests, the Secretary of Justice denies that it
has issued a particular order to arrest specific persons in
connection with the "rebellion." He states that what is
extant are general instructions to law enforcement officers
and military agencies to implement Proclamation No. 38.
Indeed, as stated in respondents' Joint Comments:
[I]t is already the declared intention of the Justice
Department and police authorities to obtain regular
warrants of arrests from the courts for all acts committed
prior to and until May 1, 2001 which means that
preliminary investigations will henceforth be conducted.
(Comment, G.R. No. 147780, p. 28; G.R. No. 147781, p.
18; G.R. No. 147799, p. 16; G.R. No. 147810, p. 24)
With this declaration, petitioners' apprehensions as to
warrantless arrests should be laid to rest.
In quelling or suppressing the rebellion, the authorities
may only resort to warrantless arrests of persons
suspected of rebellion, as provided under Section 5, Rule
113 of the Rules of Court, if the circumstances so warrant.
The warrantless arrest feared by petitioners is, thus, not
based on the declaration of a "state of rebellion."
Moreover, petitioners' contention in G. R. No. 147780
(Lacson Petition), 147781 (Defensor-Santiago Petition),
and 147799 (Lumbao Petition) that they are under
imminent danger of being arrested without warrant do not
justify their resort to the extraordinary remedies of
mandamus and prohibition, since an individual subjected
to warrantless arrest is not without adequate remedies in
the ordinary course of law. Such an individual may ask for
a preliminary investigation under Rule 112 of the Rules of
Court, where he may adduce evidence in his defense, or
he may submit himself to inquest proceedings to
determine whether or not he should remain under custody
and correspondingly be charged in court. Further, a
person subject of a warrantless arrest must be delivered
to the proper judicial authorities within the periods
provided in Article 125 of the Revised Penal Code,
otherwise the arresting officer could be held liable for
delay in the delivery of detained persons. Should the
detention be without legal ground, the person arrested
can charge the arresting officer with arbitrary detention.
All this is without prejudice to his filing an action for
damages against the arresting officer under Article 32 of
the Civil Code. Verily, petitioners have a surfeit of other
remedies which they can avail themselves of, thereby
making the prayer for prohibition and mandamus
51
improper at this time (Section 2 and 3, Rule 65, Rules of
Court).1âwphi1.nêt
Aside from the foregoing reasons, several considerations
likewise inevitably call for the dismissal of the petitions at
bar.
G.R. No. 147780
In connection with their alleged impending warrantless
arrest, petitioners Lacson, Aquino, and mancao pray that
the "appropriate court before whom the informations
against petitioners are filed be directed to desist from
arraigning and proceeding with the trial of the case, until
the instant petition is finally resolved." This relief is clearly
premature considering that as of this date, no complaints
or charges have been filed against any of the petitioners
for any crime. And in the event that the same are later
filed, this Court cannot enjoin criminal prosecution
conducted in accordance with the Rules of Court, for by
that time any arrest would have been in pursuant of a duly
issued warrant.
As regards petitioners' prayer that the hold departure
orders issued against them be declared null and void ab
initio, it is to be noted that petitioners are not directly
assailing the validity of the subject hold departure orders
in their petition. They are not even expressing intention to
leave the country in the near future. The prayer to set
aside the same must be made in proper proceedings
initiated for that purpose.
Anent petitioners' allegations ex abundante ad cautelam
in support of their application for the issuance of a writ of
habeas corpus, it is manifest that the writ is not called for
since its purpose is to relieve petitioners from unlawful
restraint (Ngaya-an v. Balweg, 200 SCRA 149 [1991]), a
matter which remains speculative up to this very day.
G.R. No. 147781
The petition herein is denominated by petitioner
Defensor-Santiago as one for mandamus. It is basic in
matters relating to petitions for mandamus that the legal
right of the petitioner to the performance of a particular act
which is sought to be compelled must be clear and
complete. Mandamus will not issue unless the right to
relief is clear at the time of the award (Palileo v. Ruiz
Castro, 85 Phil. 272). Up to the present time, petitioner
Defensor Santiago has not shown that she is in imminent
danger of being arrested without a warrant. In point of
fact, the authorities have categorically stated that
petitioner will not be arrested without a warrant.
G.R. No. 147799
Petitioner Lumbao, leader of the People's Movement
against Poverty (PMAP), for his part, argues that the
declaration of a "state of rebellion" is violative of the
doctrine of separation of powers, being an encroachment
on the domain of the judiciary which has the constitutional
prerogative to "determine or interpret" what took place on
May 1, 2001, and that the declaration of a state of
rebellion cannot be an exception to the general rule on
the allocation of the governmental powers.
We disagree. To be sure, Section 18, Article VII of the
Constitution expressly provides that "[t]he President shall
be the Commander-in-Chief of all armed forces of the
Philippines and whenever it becomes necessary, he may
call out such armed forces to prevent or suppress lawless
violence, invasion or rebellion…" Thus, we held in
Integrated Bar of the Philippines v. Hon. Zamora, (G.R.
No. 141284, August 15, 2000):
x x x The factual necessity of calling out the armed forces
is not easily quantifiable and cannot be objectively
established since matters considered for satisfying the
same is a combination of several factors which are not
always accessible to the courts. Besides the absence of
textual standards that the court may use to judge
necessity, information necessary to arrive at such
judgment might also prove unmanageable for the courts.
Certain pertinent information might be difficult to verify, or
wholly unavailable to the courts. In many instances, the
evidence upon which the President might decide that
there is a need to call out the armed forces may be of a
nature not constituting technical proof.
On the other hand, the President as Commander-in-Chief
has a vast intelligence network to gather information,
some of which may be classified as highly confidential or
affecting the security of the state. In the exercise of the
power to call, on-the-spot decisions may be imperatively
necessary in emergency situations to avert great loss of
human lives and mass destruction of property. x x x
(at pp.22-23)
The Court, in a proper case, may look into the sufficiency
of the factual basis of the exercise of this power. However,
this is no longer feasible at this time, Proclamation No. 38
having been lifted.
G.R. No. 147810
Petitioner Laban ng Demokratikong Pilipino is not a real
party-in-interest. The rule requires that a party must show
a personal stake in the outcome of the case or an injury
to himself that can be redressed by a favorable decision
so as to warrant an invocation of the court's jurisdiction
and to justify the exercise of the court's remedial powers
in his behalf (KMU Labor Center v. Garcia, Jr., 239 SCRA
386 [1994]). Here, petitioner has not demonstrated any
injury to itself which would justify resort to the Court.
Petitioner is a juridical person not subject to arrest. Thus,
it cannot claim to be threatened by a warrantless arrest.
Nor is it alleged that its leaders, members, and supporters
are being threatened with warrantless arrest and
detention for the crime of rebellion. Every action must be
brought in the name of the party whose legal right has
been invaded or infringed, or whose legal right is under
imminent threat of invasion or infringement.
At best, the instant petition may be considered as an
action for declaratory relief, petitioner claiming that its
right to freedom of expression and freedom of assembly
is affected by the declaration of a "state of rebellion" and
that said proclamation is invalid for being contrary to the
Constitution.
However, to consider the petition as one for declaratory
relief affords little comfort to petitioner, this Court not
having jurisdiction in the first instance over such a petition.
Section 5[1], Article VIII of the Constitution limits the
original jurisdiction of the Court to cases affecting
ambassadors, other public ministers and consuls, and
over petitions for certiorari, prohibition, mandamus, quo
warranto, and habeas corpus.
WHEREFORE, premises considered, the petitions are
hereby DISMISSED. However, in G.R. No. 147780,
147781, and 147799, respondents, consistent and
congruent with their undertaking earlier adverted to,
52
together with their agents, representatives, and all
persons acting for and in their behalf, are hereby enjoined
from arresting petitioners therein without the required
judicial warrant for all acts committed in relation to or in
connection with the may 1, 2001 siege of Malacañang.
SO ORDERED.
Davide, Jr., C.J., Bellosillo, Puno, Mendoza, Panganiban,
Gonzaga-Reyes, JJ., concur.
Vitug, separate opinion.
Kapunan, dissenting opinion.
Pardo, join the dissent of J. Kapunan.
Sandoval-Gutierrez, dissenting opinion.
Quisumbing, Buena, Ynares-Santiago, De Leon, Jr., on
leave.
G.R. No. 147780 May 10, 2001
PANFILO LACSON, MICHAEL RAY B. AQUINO and
CESAR O. MANCAO, petitioners,
vs.
SECRETARY HERNANDO PEREZ, P/DIRECTOR
LEANDRO MENDOZA, and P/SR. SUPT. REYNALDO
BERROYA, respondents.
----------------------------------------
G.R. No. 147781 May 10, 2001
MIRIAM DEFENSOR-SANTIAGO, petitioner,
vs.
ANGELO REYES, Secretary of National Defense, ET AL.,
respondents.
SEPARATE OPINION
VITUG, J.:
I concur insofar as the resolution enjoins any continued
warrantless arrests for acts related to, or connected with,
the May 1st incident but respectfully dissent from the
order of dismissal of the petitions for being said to be moot
and academic. The petitions have raised important
constitutional issues that, in my view, must likewise be
fully addressed.
G.R. No. 147780 May 10, 2001
PANFILO LACSON, MICHAEL RAY B. AQUINO and
CESAR O. MANCAO, petitioners,
vs.
SECRETARY HERNANDO PEREZ, P/DIRECTOR
LEANDRO MENDOZA, and P/SR. SUPT. REYNALDO
BERROYA, respondents.
----------------------------------------
G.R. No. 147781 May 10, 2001
MIRIAM DEFENSOR-SANTIAGO, petitioner,
vs.
ANGELO REYES, Secretary of National Defense, ET AL.,
respondents.
----------------------------------------
G.R. No. 147799 May 10, 2001
RONALDO A. LUMBAO, petitioner,
vs.
SECRETARY HERNANDO PEREZ, GENERAL
DIOMEDIO VILLANUEVA, P/DIRECTOR LEANDRO
MENDOZA, and P/SR. SUPT. REYNALDO BERROYA,
respondents.
----------------------------------------
G.R. No. 147810 May 10, 2001
THE LABAN NG DEMOKRATIKONG PILIPINO,
petitioner,
vs.
THE DEPARTMENT OF JUSTICE, SECRETARY
HERNANDO PEREZ, THE ARMED FORCES OF THE
PHILIPPINES, GENERAL DIOMEDIO VILLANUEVA,
THE PHILIPPINE NATIONAL POLICE, and DIRECTOR
GENERAL LEANDRO MENDOZA, respondents.
DISSENTING OPINION
KAPUNAN, J.:
The right against unreasonable searches and seizure has
been characterized as belonging "in the catalog of
indispensable freedoms."
Among deprivation of rights, none is so effective in cowing
a population, crushing the spirit of the individual and
putting terror in every heart. Uncontrolled search and
seizure is one of the first and most effective weapons in
the arsenal of every arbitrary government. And one need
only briefly to have dwelt and worked among a people
know that the human personality deteriorates and dignity
and self-reliance disappear where homes, persons and
possessions are subject at any hour to unheralded search
and seizure by the police.1
Invoking the right against unreasonable searches and
seizures, petitioners Panfilo Lacson, Michael Ray Aquino
and Cezar O. Mancao II now seek a temporary restraining
order and/or injunction from the Court against their
impending warrantless arrests upon order of the
Secretary of Justice.2 Petitioner Laban ng Demokratikong
Pilipino (LDP), likewise, seeks to enjoin the arrests of its
senatorial candidates, namely, Senator Juan Ponce-
Enrile, Senator Miriam Defensor-Santiago, Senator
Gregorio B. Honasan and General Panfilo Lacson.3
Separate petitioners were also filed by Senator Juan
Ponce Enrile.4 Former Ambassador Ernesto M.
Maceda,5 Senator Miriam Defensor-Santiago,6 Senator
Gregorio B. Honasan,7 and the Integrated Bar of the
Philippines (IBP).8
Briefly, the order for the arrests of these political
opposition leaders and police officers stems from the
following facts:
On April 25, 2001, former President Joseph Estrada was
arrested upon the warrant issued by the Sandiganbayan
in connection with the criminal case for plunder filed
against him. Several hundreds of policemen were
deployed to effect his arrest. At the time, a number of Mr.
Estrada's supporters, who were then holding camp
outside his residence in Greenhills Subdivision, sought to
prevent his arrest. A skirmish ensued between them and
53
the police. The police had to employ batons and water
hoses to control the rock-throwing pro-Estrada rallyists
and allow the sheriffs to serve the warrant. Mr. Estrada
and his son and co-accused, Mayor Jinggoy Estrada,
were then brought to Camp Crame where, with full media
coverage, their fingerprints were obtained and their mug
shots taken.
Later that day, and on the succeeding days, a huge
gathered at the EDSA Shrine to show its support for the
deposed President. Senators Enrile, Santiago, Honasan,
opposition senatorial candidates including petitioner
Lacson, as well as other political personalities, spoke
before the crowd during these rallies.
In the meantime, on April 28, 2001, Mr. Estrada and his
son were brought to the Veterans memorial Medical
Center for a medical check-up. It was announced that
from there, they would be transferred to Fort Sto.
Domingo in Sta. Rosa, Laguna.
In the early morning of May 1, 2001, the crowd at EDSA
decided to march to Malacañang Palace. The Armed
Forces of the Philippines (AFP) was called to reinforce the
Philippine National Police (PNP) to guard the premises of
the presidential residence. The marchers were able to
penetrate the barricades put up by the police at various
points leading to Mendiola and were able to reach Gate 7
of Malacañan. As they were being dispersed with warning
shots, tear gas and water canons, the rallyists hurled
stones at the police authorities. A melee erupted. Scores
of people, including some policemen, were hurt.
At noon of the same day, after the crowd in Mendiola had
been dispersed, President Gloria Macapagal-Arroyo
issued Proclamation No. 38 declaring a "state of rebellion"
in Metro Manila:
Presidential Proclamation No. 38
DECLARING STATE OF REBELLION IN THE
NATIONAL CAPITAL REGION
WHEREAS, the angry and violent mob, armed with
explosives, firearms, bladed weapons, clubs, stones and
other deadly weapons, in great part coming from the mass
gathering at the EDSA Shrine, and other armed groups,
having been agitated and incited and, acting upon the
instigation and under the command and direction of
known and unknown leaders, have and continue to
assault and attempt to break into Malacañang with the
avowed purpose of overthrowing the duly constituted
Government and forcibly seize power, and have and
continue to rise publicly, shown open hostility, and take
up arms against the duly constituted Government for the
purpose of removing from the allegiance to the
Government certain bodies of the Armed Forces of the
Philippines and the Philippine National Police, and to
deprive the President of the Republic of the Philippines,
wholly and partially, of her powers and prerogatives which
constitute the continuing crime of rebellion punishable
under Article 134 of the Revised Penal Code;
WHEREAS, armed groups recruited by known and
unknown leaders, conspirators, and plotters have
continue (sic) to rise publicly by the use of arms to
overthrow the duly constituted Government and seize
political power;
WHEREAS, under Article VII, Section 18 of the
Constitution, whenever necessary, the President as the
Commander-in-Chief of all armed forces of the
Philippines, may call out such armed forces to suppress
the rebellion;
NOW, THEREFORE, I, GLORIA MACAPAGAL-
ARROYO, by virtue of the powers vested in me by law
hereby recognize and confirm the existence of an actual
and on-going rebellion compelling me to declare a state
of rebellion;
In view of the foregoing, I am issuing General Order NO.
1 in accordance with Section 18, Article VII of the
Constitution calling upon the Armed Forces of the
Philippines and the Philippine National police to suppress
and quell the rebellion.
City of Manila, May 1, 2001.
The President likewise issued General Order No. 1 which
reads:
GENERAL ORDER NO. 1
DIRECTING THE ARMED FORCES OF THE
PHILIPPIENS AND THE PHILIPPINE NATIONAL
POLICE TO SUPPRESS THE REBELLION IN THE
NATIONAL CAPITAL REGION
WHEREAS, the angry and violent mob, armed with
explosives, firearms, bladed weapons, clubs, stones and
other deadly weapons, in great part coming from the mass
gathering at the EDSA Shrine, and other armed groups,
having been agitated and incited and, acting upon the
instigation and under the command and direction of
known and unknown leaders, have and continue to
assault and attempt to break into Malacañang with the
avowed purpose of overthrowing the duly constituted
Government and forcibly seize political power, and have
and continue to rise publicly, show open hostility, and take
up arms against the duly constituted Government certain
bodies of the Armed Forces of the Philippines and the
Philippine National Police, and to deprive the President of
the Republic of the Philippines, wholly and partially, of her
powers and prerogatives which constitute the continuing
crime of rebellion punishable under Article 134 of the
Revised Penal Code;
WHEREAS, armed groups recruited by known and
unknown leaders, conspirators, and plotters have
continue (sic) to rise publicly by the use of arms to
overthrow the duly constituted Government and seize
political power;
WHEREAS, under Article VII, Section 18 of the
Constitution, whenever necessary, the President as the
Commander-in-Chief of all armed forces of the
Philippines, may call out such armed forces to suppress
the rebellion;
NOW, THEREFORE, I, GLORIA MACAPAGAL-
ARROYO, by virtue of the powers vested in me under the
Constitution as President of the Republic of the
Philippines and Commander-in-Chief of all armed forces
of the Philippines and pursuant to Proclamation No. 38,
dated May 1, 2001, do hereby call upon the Armed Forces
of the Philippines and the Philippine national police to
suppress and quell the rebellion.
I hereby direct the Chief of Staff of the Armed Forces of
the Philippines and the Chief of the Philippine National
Police and the officers and men of the Armed Forces of
the Philippines and the Philippine National Police to
immediately carry out the necessary and appropriate
54
actions and measures to suppress and quell the rebellion
with due regard to constitutional rights.
City of Manila, May 1, 2001.
Pursuant to the proclamation, several key leaders of the
opposition were ordered arrested. Senator Enrile was
arrested without warrant in his residence at around 4:00
in the afternoon. Likewise arrested without warrant the
following day was former Ambassador Ernesto Maceda.
Senator Honasan and Gen. Lacson were also ordered
arrested but the authorities have so far failed to
apprehend them. Ambassador Maceda was temporarily
released upon recognizance while Senator Ponce Enrile
was ordered released by the Court on cash bond.
The basic issue raised by the consolidated petitions is
whether the arrest or impending arrest without warrant,
pursuant to a declaration of "state of rebellion" by the
President of the above-mentioned persons and unnamed
other persons similarly situated suspected of having
committed rebellion is illegal, being unquestionably a
deprivation of liberty and violative of the Bill of Rights
under the Constitution.
The declaration of a "state of rebellion" is supposedly
based on Section 18, Article VII of the Constitution which
reads:
The President shall be the Commander-in-Chief of all
armed forces of the Philippines and whenever it becomes
necessary, he may call out such armed forces to prevent
or suppress lawless violence, invasion or rebellion. In
case of invasion or rebellion, when the public safety
requires it, he may, for a period not exceeding sixty days,
suspend the privilege of the writ of habeas corpus or place
the Philippines or any part thereof under martial law.
Within forty-eight hours from the proclamation of martial
law or the suspension of the writ of habeas corpus, the
President shall submit a report in person or in writing to
the Congress. The Congress, voting jointly, by a vote of
at least a majority of all its Members in regular or special
session, may revoke such proclamation or suspension,
which revocation shall not be set aside by the President.
Upon the initiative of the President, the Congress may, in
the same manner, extend such proclamation or
suspension for a period to be determined by the Congress
if the invasion or rebellion shall persist and public safety
requires it.
The Congress, if not in session, shall, within twenty-four
hours following such proclamation or suspension,
convene in accordance with its rules without need of a
call.
The Supreme Court may review, in an appropriate
proceeding filed by any citizen, the sufficiency of the
factual basis of the proclamation of martial law or the
suspension of the privilege of the writ or the extension
thereof, and must promulgate its decision thereon within
thirty days from its filing.
A state of martial law does not suspend the operation of
the Constitution, nor supplant the functioning of the civil
courts or legislative assemblies, nor authorize the
conferment of jurisdiction on military courts and agencies
over civilians where civil courts are able to function, nor
automatically suspend the privilege of the writ.
The suspension of the privilege of the writ shall apply only
to persons judicially charged for rebellion or offenses
inherent in or directly connected with invasion.
During the suspension of the privilege of the writ, any
person thus arrested or detained shall be judicially
charged within three days, otherwise he shall be released.
Section 18 grants the President, as Commander-in-Chief,
the power to call out the armed forces in cases of (1)
lawless violence, (2) rebellion and (3) invasion.9 In the
latter two cases, i.e., rebellion or invasion, the President
may, when public safety requires, also (a) suspend the
privilege of the writ of habeas corpus, or (b) place the
Philippines or any part thereof under martial law.
However, in the exercise of this calling out power as
Commander-in-Chief of the armed forces, the
Constitution does not require the President to make a
declaration of a "state of rebellion" (or, for that matter, of
lawless violence or invasion). The term "state of rebellion"
has no legal significance. It is vague and amorphous and
does not give the President more power than what the
Constitution says, i. e, whenever it becomes necessary,
he may call out such armed forces to prevent or suppress
lawless violence, invasion or rebellion. As Justice
Mendoza observed during the hearing of this case, such
a declaration is "legal surplusage." But whatever the term
means, it cannot diminish or violate constitutionally-
protected rights, such as the right to due process,10 the
rights to free speech and peaceful assembly to petition
the government for redress of grievances,11 and the right
against unreasonable searches and seizures,12 among
others.
In Integrated Bar of the Philippines vs. Zamora, et al.,13
the Court held that:
x x x [T]he distinction (between the calling out power, on
one hand, and the power to suspend the privilege of the
write of habeas corpus and to declare martial law, on the
other hand) places the calling out power in a different
category from the power to declare martial law and the
power to suspend the privilege of the writ of habeas
corpus, otherwise, the framers of the Constitution would
have simply lumped together the three powers and
provided for their revocation and review without any
qualification. Expressio unius est exclusio alterius.
xxx
The reason for the difference in the treatment of the
aforementioned powers highlights the intent to grant the
President the widest leeway and broadest discretion in
using the "calling out" power because it is considered as
the lesser and more benign power compared to the power
to suspend the privilege of the writ of habeas corpus and
the power to impose martial law, both of which involve the
curtailment and suppression of certain basic civil rights
and individual freedoms, and thus necessitating
affirmation by Congress and, in appropriate cases, review
by this Court.
On the other hand, if the motive behind the declaration of
a "state of rebellion" is to arrest persons without warrant
and detain them without bail and, thus, skirt the
Constitutional safeguards for the citizens' civil liberties,
the so-called "state of rebellion" partakes the nature of
martial law without declaring on its face, yet, if it is applied
and administered by public authority with an evil eye so
as to practically make it unjust and oppressive, it is within
the prohibition of the Constitution.14 In an ironic sense, a
"state of rebellion" declared as a subterfuge to effect
warrantless arrest and detention for an unbailable offense
places a heavier burden on the people's civil liberties than
the suspension of the privilege of the writ of habeas
55
corpus the declaration of martial law because in the latter
case, built-in safeguards are automatically set on motion:
(1) The period for martial law or suspension is limited to a
period not exceeding sixty day; (2) The President is
mandated to submit a report to Congress within forty-eight
hours from the proclamation or suspension; (3) The
proclamation or suspension is subject to review by
Congress, which may revoke such proclamation or
suspension. If Congress is not in session, it shall convene
in 24 hours without need for call; and (4) The sufficiency
of the factual basis thereof or its extension is subject to
review by the Supreme Court in an appropriate
proceeding.15
No right is more fundamental than the right to life and
liberty. Without these rights, all other individual rights may
not exist. Thus, the very first section in our Constitution's
Bill of Rights, Article III, reads:
SECTION 1. No person shall be deprived of life, liberty,
or property without due process of law, nor shall any
person be denied the equal protection of the laws.
And to assure the fullest protection of the right, more
especially against government impairment, Section 2
thereof provides:
SEC. 2. The right of the people to be secure in their
persons, houses, papers, and effects against
unreasonable searches and seizures of whatever nature
and for any purpose shall be inviolable, and no search
warrant or warrant of arrest shall issue except upon
probable cause to be determined personally by the judge
after examination under oath or affirmation of the
complainant and the witnesses he may produce, and
particularly describing the place to be searched and the
persons or things to be seized.
Indeed, there is nothing in Section 18 which authorizes
the President or any person acting under her direction to
make unwarranted arrests. The existence of "lawless
violence, invasion or rebellion" only authorizes the
President to call out the "armed forces to prevent or
suppress lawless violence, invasion or rebellion."
Not even the suspension of the privilege of the writ of
habeas corpus or the declaration of martial law authorizes
the President to order the arrest of any person. The only
significant consequence of the suspension of the writ of
habeas corpus is to divest the courts of the power to issue
the writ whereby the detention of the person is put in
issue. It does not by itself authorize the President to order
the arrest of a person. And even then, the Constitution in
Section 18, Article VII makes the following qualifications:
The suspension of the privilege of the writ shall apply only
to persons judicially charged for rebellion or offenses
inherent in or directly connected with invasion.
During the suspension of the privilege of the writ, any
person thus arrested or detained shall be judicially
charged within three days, otherwise he shall be released.
In the instant case, the President did not suspend the writ
of habeas corpus. Nor did she declare martial law. A
declaration of a "state of rebellion," at most, only gives
notice to the nation that it exists, and that the armed forces
may be called to prevent or suppress it, as in fact she did.
Such declaration does not justify any deviation from the
Constitutional proscription against unreasonable
searches and seizures.
As a general rule, an arrest may be made only upon a
warrant issued by a court. In very circumscribed
instances, however, the Rules of Court allow warrantless
arrests. Section 5, Rule 113 provides:
SEC. 5. Arrest without warrant; when lawful. – A police
officer or a private person may, without a warrant, arrest
a person:
(a) When, in his presence, the person to be arrested has
committed, is actually committing, or is attempting to
commit an offense;
(b) When an offense has just been committed and he has
probable cause to believe based on personal knowledge
of facts or circumstances that the person to be arrested
has committed it; and
xxx
In cases falling under paragraphs (a) and (b) above, the
person arrested without a warrant shall be forthwith
delivered to the nearest police station or jail and shall be
proceeded against in accordance with section 7 of Rule
112.
It must be noted that the above are exceptions to the
constitutional norm enshrined in the Bill of Rights that a
person may only be arrested on the strength of a warrant
of arrest issued by a "judge" after determining
"personally" the existence of "probable cause" after
examination under oath or affirmation of the complainant
and the witnesses he may produce. Its requirements
should, therefore, be scrupulously met:
The right of a person to be secure against any
unreasonable seizure of his body and any deprivation of
his liberty is a most basic and fundamental one. The
statute or rule which allows exceptions to the requirement
of warrants of arrests is strictly construed. Any exception
must clearly fall within the situations when securing a
warrant would be absurd or is manifestly unnecessary as
provided by the Rule. We cannot liberally construe the
rule on arrests without warrant or extend its application
beyond the cases specifically provided by law. To do so
would infringe upon personal liberty and set back a basic
right so often violated and so deserving of full
protection.16
A warrantless arrest may be justified only if the police
officer had facts and circumstances before him which, had
they been before a judge, would constitute adequate
basis for a finding of probable cause of the commission of
an offense and that the person arrested is probably guilty
of committing the offense. That is why the Rules of
Criminal Procedure require that when arrested, the
person "arrested has committed, is actually committing,
or is attempting to commit an offense" in the presence of
the arresting officer. Or if it be a case of an offense which
had "just been committed," that the police officer making
the arrest "has personal knowledge of facts or
circumstances that the person to be arrested has
committed it."
Petitioners were arrested or sought to be arrested without
warrant for acts of rebellion ostensibly under Section 5 of
Rule 113. Respondents' theory is based on Umil vs.
Ramos,17 where this Court held:
The crimes of rebellion, subversion, conspiracy or
proposal to commit such crimes, and crimes or offenses
committed in furtherance thereof or in connection
56
therewith constitute direct assault against the State and
are in the nature of continuing crimes.18
Following this theory, it is argued that under Section 5(a),
a person who "has committed, is actually committing, or
is attempting to commit" rebellion and may be arrested
without a warrant at any time so long as the rebellion
persists.
Reliance on Umil is misplaced. The warrantless arrests
therein, although effected a day or days after the
commission of the violent acts of petitioners therein, were
upheld by the Court because at the time of their
respective arrests, they were members of organizations
such as the Communist Party of the Philippines, the New
Peoples Army and the National United Front Commission,
then outlawed groups under the Anti-Subversion Act.
Their mere membership in said illegal organizations
amounted to committing the offense of subversion19
which justified their arrests without warrants.
In contrast, it has not been alleged that the persons to be
arrested for their alleged participation in the "rebellion" on
May 1, 2001 are members of an outlawed organization
intending to overthrow the government. Therefore, to
justify a warrantless arrest under Section 5(a), there must
be a showing that the persons arrested or to be arrested
has committed, is actually committing or is attempting to
commit the offense of rebellion.20 In other words, there
must be an overt act constitutive of rebellion taking place
in the presence of the arresting officer. In United States
vs. Samonte,21 the term" in his [the arresting officer's]
presence" was defined thus:
An offense is said to be committed in the presence or
within the view of an arresting officer or private citizen
when such officer or person sees the offense, even
though at a distance, or hears the disturbance created
thereby and proceeds at once to the scene thereof; or the
offense is continuing, or has not been consummated, at
the time the arrest is made.22
This requirement was not complied with particularly in the
arrest of Senator Enrile. In the Court's Resolution of May
5, 2001 in the petition for habeas corpus filed by Senator
Enrile, the Court noted that the sworn statements of the
policemen who purportedly arrested him were hearsay.23
Senator Enrile was arrested two (2) days after he
delivered allegedly seditious speeches. Consequently,
his arrest without warrant cannot be justified under
Section 5(b) which states that an arrest without a warrant
is lawful when made after an offense has just been
committed and the arresting officer or private person has
probable cause to believe based on personal knowledge
of facts and circumstances that the person arrested has
committed the offense.
At this point, it must be stressed that apart from being
inapplicable to the cases at bar, Umil is not without any
strong dissents. It merely re-affirmed Garcia-Padilla vs.
Enrile,24 a case decided during the Marcos martial law
regime.25 It cannot apply when the country is supposed
to be under the regime of freedom and democracy. The
separate opinions of the following Justices in the motion
for reconsideration of said case26 are apropos:
FERNAN C.J., concurring and dissenting:
Secondly, warrantless arrests may not be allowed if the
arresting officers are not sure what particular provision of
law had been violated by the person arrested. True it is
that law enforcement agents and even prosecutors are
not all adept at the law. However, erroneous perception,
not to mention ineptitude among their ranks, especially if
it would result in the violation of any right of a person, may
not be tolerated. That the arrested person has the "right
to insist during the pre-trial or trial on the merits"
(Resolution, p. 18) that he was exercising a right which
the arresting officer considered as contrary to law, is
beside the point. No person should be subjected to the
ordeal of a trial just because the law enforcers wrongly
perceived his action.27 (Underscoring supplied)
GUTIERREZ, JR., J., concurring and dissenting opinion
Insofar as G.R. NO. 81567 is concerned, I joint the other
dissenting Justices in their observations regarding
"continuing offenses." To base warrantless arrests on the
doctrine of continuing offense is to give a license for the
illegal detention of persons on pure suspicion. Rebellion,
insurrection, or sedition are political offenses where the
line between overt acts and simple advocacy or
adherence to a belief is extremely thin. If a court has
convicted an accused of rebellion and he is found roaming
around, he may be arrested. But until a person is proved
guilty, I fail to see how anybody can jump to a personal
conclusion that the suspect is indeed a rebel and must be
picked up on sight whenever seen. The grant of authority
in the majority opinion is too broad. If warrantless
searches are to be validated, it should be Congress and
not this Court which should draw strict and narrow
standards. Otherwise, the non-rebels who are critical,
noisy, or obnoxious will be indiscriminately lumped up
with those actually taking up arms against the
Government.
The belief of law enforcement authorities, no matter how
well-grounded on past events, that the petitioner would
probably shoot other policemen whom he may meet does
not validate warrantless arrests. I cannot understand why
the authorities preferred to bide their time, await the
petitioner's surfacing from underground, and ounce on
him with no legal authority instead of securing warrants of
arrest for his apprehension.28 (Underscoring supplied)
CRUZ, J., concurring and dissenting:
I submit that the affirmation by this Court of the Garcia-
Padilla decision to justify the illegal arrests made in the
cases before us is a step back to that shameful past when
individual rights were wantonly and systematically
violated by the Marcos dictatorship. It seem some of us
have short memories of that repressive regime, but I for
one am not one to forget so soon. As the ultimate
defender of the Constitution, this Court should not gloss
over the abuses of those who, out of mistaken zeal, would
violate individual liberty in the dubious name of national
security. Whatever their ideology and even if it be hostile
to ours, the petitioners are entitled to the protection of the
Bill of Rights, no more and no less than any other person
in this country. That is what democracy is all about.29
(Underscoring supplied)
FELICIANO, J., concurring and dissenting:
12. My final submission, is that, the doctrine of "continuing
crimes," which has its own legitimate function to serve in
our criminal law jurisprudence, cannot be invoked for
weakening and dissolving the constitutional guarantee
against warrantless arrest. Where no overt acts
comprising all or some of the elements of the offense
charged are shown to have been committed by the person
arrested without warrant, the "continuing crime" doctrine
should not be used to dress up the pretense that a crime,
57
begun or committed elsewhere, continued to be
committed by the person arrested in the presence of the
arresting officer. The capacity for mischief of such a
utilization of the "continuing crimes" doctrine, is infinitely
increased where the crime charged does not consist of
unambiguous criminal acts with a definite beginning and
end in time and space (such as the killing or wounding of
a person or kidnapping and illegal detention or arson) but
rather or such problematic offenses as membership in or
affiliation with or becoming a member of, a subversive
association or organization. For in such cases, the overt
constitutive acts may be morally neutral in themselves,
and the unlawfulness of the acts a function of the aims or
objectives of the organization involved. Note, for instance,
the following acts which constitute prima facie evidence
of "membership in any subversive association:"
a) Allowing himself to be listed as a member in any book
or any of the lists, records, correspondence, or any other
document of the organization;
b) Subjecting himself to the discipline of such or
association or organization in any form whatsoever;
c) Giving financial contribution to such association or
organization in dues, assessments, loans or in any other
forms;
xxx
f) Conferring with officers or other members of such
association or organization in furtherance of any plan or
enterprise thereof;
xxx
g) Preparing documents, pamphlets, leaflets, books, or
any other type of publication to promote the objectives
and purposes of such association or organization;
xxx
k) Participating in any way in the activities, planning
action, objectives, or purposes of such association or
organization.
It may well be, as the majority implies, that the
constitutional rule against warrantless arrests and
seizures makes the law enforcement work of police
agencies more difficult to carry out. It is not our Court's
function, however, and the Bill of Rights was not
designed, to make life easy for police forces but rather to
protect the liberties of private individuals. Our police
forces must simply learn to live with the requirements of
the Bill of Rights, to enforce the law by modalities which
themselves comply with the fundamental law. Otherwise
they are very likely to destroy, whether through sheer
ineptness or excess of zeal, the very freedoms which
make our policy worth protecting and saving.30
(Underscoring supplied)
It is observed that a sufficient period has lapsed between
the fateful day of May 1, 2001 up to the present. If
respondents have ample evidence against petitioners,
then they should forthwith file the necessary criminal
complaints in order that the regular procedure can be
followed and the warrants of arrest issued by the courts in
the normal course. When practicable, resort to the
warrant process is always to be preferred because "it
interposes an orderly procedure involving 'judicial
impartiality' whereby a neutral and detached magistrate
can make informed and deliberate determinations on the
issue of probable cause."31
The neutrality, detachment and independence that judges
are supposed to possess is precisely the reason the
framers of the 1987 Constitution have reposed upon them
alone the power to issue warrants of arrest. To vest the
same to a branch of government, which is also charged
with prosecutorial powers, would make such branch the
accused's adversary and accuser, his judge and jury.32
A declaration of a state of rebellion does not relieve the
State of its burden of proving probable cause. The
declaration does not constitute a substitute for proof. It
does not in any way bind the courts, which must still judge
for itself the existence of probable cause. Under Section
18, Article VII, the determination of the existence of a
state of rebellion for purposes of proclaiming martial law
or the suspension of the privilege of the writ of habeas
corpus rests for which the President is granted ample,
though not absolute, discretion. Under Section 2, Article
III, the determination of probable cause is a purely legal
question of which courts are the final arbiters.
Justice Secretary Hernando Perez is reported to have
announced that the lifting of the "state of rebellion" on May
7, 2001 does not stop the police from making warrantless
arrests.33 If this is so, the pernicious effects of the
declaration on the people's civil liberties have not abated
despite the lifting thereof. No one exactly knows who are
in the list or who prepared the list of those to be arrested
for alleged complicity in the "continuing" crime of
"rebellion" defined as such by executive fiat. The list of the
perceived leaders, financiers and supporters of the
"rebellion" to be arrested and incarcerated could expand
depending on the appreciation of the police. The
coverage and duration of effectivity of the orders of arrest
are thus so open-ended and limitless as to place in
constant and continuing peril the people's Bill of Rights. It
is of no small significance that four of he petitioners are
opposition candidates for the Senate. Their campaign
activities have been to a large extent immobilized. If the
arrests and orders of arrest against them are illegal, then
their Constitutional right to seek public office, as well as
the right of he people to choose their officials, is violated.
In view of the transcendental importance and urgency of
the issues raised in these cases affecting as they do the
basic liberties of the citizens enshrined in our Constitution,
it behooves us to rule thereon now, instead of relegating
the cases to trial courts which unavoidably may come up
with conflicting dispositions, the same to reach this Court
inevitably for final ruling. As we aptly pronounced in
Salonga vs. Cruz Paño:34
The Court also has the duty to formulate guiding and
controlling constitutional principles, precepts, doctrines,
or rules. It has the symbolic function of educating bench
and bar on the extent of protection given by constitutional
guarantees.
Petitioners look up in urgent supplication to the Court,
considered the last bulwark of democracy, for relief. If we
do not act promptly, justly and fearlessly, to whom will
they turn to?
WHEREFORE, I vote as follows:
(1) Give DUE COURSE to and GRANT the petitions;
(2) Declare as NULL and VOID the orders of arrest issued
against petitioners;
58
(3) Issue a WRIT OF INJUNCTION enjoining
respondents, their agents and all other persons acting for
and in their behalf from effecting warrantless arrests
against petitioners and all other persons similarly situated
on the basis of Proclamation No. 38 and General Order
No. 1 of the President.

SO ORDERED.

59
 In the wake of the Oakwood occupation, the President
EXCEPTIONS TO MOOTNESS: issued later in the day Proclamation No. 427 and General
Order No. 4, both declaring "a state of rebellion" and
EN BANC calling out the Armed Forces to suppress the rebellion.
G.R. No. 159085 February 3, 2004 Proclamation No. 427 reads in full:

SANLAKAS, represented by REP. J.V. Bautista, and PROCLAMATION NO. 427

PARTIDO NG MANGGAGAWA, represented by REP.
RENATO MAGTUBO petitioners,
vs
EXECUTIVE SECRETARY SECRETARY ANGELO
REYES, GENERAL NARCISO ABAYA, DIR. GEN.
HERMOGENES EBDANE, respondents.
x------------------------x
G.R. No. 159103 February 3, 2004
SOCIAL JUSTICE SOCIETY
OFFICERS/MEMBERS namely, SAMSON
ALCANTARA, ED VINCENT S. ALBANO, RENE B.
GOROSPE, EDWIN R. SANDOVAL and RODOLFO D.
MAPILE, petitioners,
vs
HON. EXECUTIVE SECRETARY ALBERTO G.
ROMULO, HON. SECRETARY OF JUSTICE SIMEON
DATUMANONG, HON. SECRETARY OF NATIONAL
DEFENSE ANGELO REYES, and HON. SECRETARY
JOSE LINA, JR., respondents.
x------------------------x
DECLARING A STATE OF REBELLION
WHEREAS, certain elements of the Armed Forces of the
Philippines, armed with high-powered firearms and
explosives, acting upon the instigation and command and
direction of known and unknown leaders, have seized a
building in Makati City, put bombs in the area, publicly
declared withdrawal of support for, and took arms against
the duly constituted Government, and continue to rise
publicly and show open hostility, for the purpose of
(SJS) removing allegiance to the Government certain bodies of
S. the Armed Forces of the Philippines and the Philippine
National Police, and depriving the President of the
Republic of the Philippines, wholly or partially, of her
powers and prerogatives which constitute the crime of
rebellion punishable under Article 134 of the Revised
Penal Code, as amended;
WHEREAS, these misguided elements of the Armed
Forces of the Philippines are being supported, abetted
and aided by known and unknown leaders, conspirators
and plotters in the government service and outside the
government;

G.R. No. 159185 February 3, 2004
REP. ROLEX T. SUPLICO, REP. CARLOS M. PADILLA,
REP. CELSO L. LOBREGAT, REP. HUSSIN U. AMIN,
REP. ABRAHAM KAHLIL B. MITRA, REP. EMMYLOU J.
TALINO-SANTOS, and REP. GEORGILU R. YUMUL-
HERMIDA, petitioners,
vs
PRESIDENT GLORIA MACAPAGAL-ARROYO; and
EXECUTIVE SECRETARY ALBERTO G. ROMULO,
respondents.
x------------------------x
G.R. No. 159196 February 3, 2004
AQUILINO Q. PIMENTEL, JR. as a Member of the
Senate, petitioner,
vs
SECRETARY ALBERTO ROMULO, AS EXECUTIVE
SECRETARY; SECRETARY ANGELO REYES, AS
SECRETARY OF NATIONAL DEFENSE; GENERAL
NARCISO ABAYA, AS CHIEF OF STAFF OF THE
ARMED FORCES; SECRETARY JOSE LINA, et al.,
respondents.
DECISION
TINGA, J.:
They came in the middle of the night. Armed with high-
powered ammunitions and explosives, some three
hundred junior officers and enlisted men of the Armed
Forces of the Philippines (AFP) stormed into the
Oakwood Premiere apartments in Makati City in the wee
hours of July 27, 2003. Bewailing the corruption in the
AFP, the soldiers demanded, among other things, the
resignation of the President, the Secretary of Defense and
the Chief of the Philippine National Police (PNP).1
WHEREAS, under Section 18, Article VII of the present
Constitution, whenever it becomes necessary, the
President, as the Commander-in-Chief of the Armed
Forces of the Philippines, may call out such Armed Forces
to suppress the rebellion;
NOW, THEREFORE, I, GLORIA MACAPAGAL-
ARROYO, by virtue of the powers vested in me by law,
hereby confirm the existence of an actual and on-going
rebellion, compelling me to declare a state of rebellion.
In view of the foregoing, I am issuing General Order No.
4 in accordance with Section 18, Article VII of the
Constitution, calling out the Armed Forces of the
Philippines and the Philippine National Police to
immediately carry out the necessary actions and
measures to suppress and quell the rebellion with due
regard to constitutional rights.
General Order No. 4 is similarly worded:
GENERAL ORDER NO. 4
DIRECTING THE ARMED FORCES OF THE
PHILIPPINES AND THE PHILIPPINE NATIONAL
POLICE TO SUPPRESS REBELLION
WHEREAS, certain elements of the Armed Forces of the
Philippines, armed with high-powered firearms and
explosives, acting upon the instigation and command and
direction of known and unknown leaders, have seized a
building in Makati City, put bombs in the area, publicly
declared withdrawal of support for, and took arms against
the duly constituted Government, and continue to rise
publicly and show open hostility, for the purpose of
removing allegiance to the Government certain bodies of
the Armed Forces of the Philippines and the Philippine
National Police, and depriving the President of the
Republic of the Philippines, wholly or partially, of her
powers and prerogatives which constitute the crime of

60
rebellion punishable under Article 134 et seq. of the
Revised Penal Code, as amended;
WHEREAS, these misguided elements of the Armed
Forces of the Philippines are being supported, abetted
and aided by known and unknown leaders, conspirators
and plotters in the government service and outside the
government;
WHEREAS, under Section 18, Article VII of the present
Constitution, whenever it becomes necessary, the
President, as the Commander-in-Chief of all Armed
Forces of the Philippines, may call out such Armed Forces
to suppress the rebellion;
NOW, THEREFORE, I, GLORIA MACAPAGAL-
ARROYO, by virtue of the powers vested in me by the
Constitution as President of the Republic of the
Philippines and Commander-in-Chief of all the armed
forces of the Philippines and pursuant to Proclamation
No. 427 dated July 27, 2003, do hereby call upon the
Armed Forces of the Philippines and the Philippine
National Police to suppress and quell the rebellion.
I hereby direct the Chief of the Armed Forces of the
Philippines and the Chief of the Philippine National Police
and the officers and men of the Armed Forces of the
Philippines and the Philippine National Police to
immediately carry out the necessary and appropriate
actions and measures to suppress and quell the rebellion
with due regard to constitutional rights.
By the evening of July 27, 2003, the Oakwood occupation
had ended. After hours-long negotiations, the soldiers
agreed to return to barracks. The President, however, did
not immediately lift the declaration of a state of rebellion
and did so only on August 1, 2003, through Proclamation
No. 435:
DECLARING THAT THE STATE OF REBELLION HAS
CEASED TO EXIST
WHEREAS, by virtue of Proclamation No. 427 dated July
27, 2003, a state of rebellion was declared;
WHEREAS, by virtue of General Order No. 4 dated July
27, 2003, which was issued on the basis of Proclamation
No. 427 dated July 27, 2003, and pursuant to Article VII,
Section 18 of the Constitution, the Armed Forces of the
Philippines and the Philippine National Police were
directed to suppress and quell the rebellion;
WHEREAS, the Armed Forces of the Philippines and the
Philippine National Police have effectively suppressed
and quelled the rebellion.
NOW, THEREFORE, I, GLORIA MACAPAGAL-
ARROYO, President of the Philippines, by virtue of the
powers vested in me by law, hereby declare that the state
of rebellion has ceased to exist.
In the interim, several petitions were filed before this Court
challenging the validity of Proclamation No. 427 and
General Order No. 4.
In G.R. No. 159085 (Sanlakas and PM v. Executive
Secretary, et al.),2 party-list organizations Sanlakas and
Partido ng Manggagawa (PM), contend that Section 18,
Article VII of the Constitution does not require the
declaration of a state of rebellion to call out the armed
forces.3 They further submit that, because of the
cessation of the Oakwood occupation, there exists no
sufficient factual basis for the proclamation by the
President of a state of rebellion for an indefinite period.4
Petitioners in G.R. No. 159103 (SJS Officers/Members v.
Hon. Executive Secretary, et al.) are officers/members of
the Social Justice Society (SJS), "Filipino citizens,
taxpayers, law professors and bar reviewers."5 Like
Sanlakas and PM, they claim that Section 18, Article VII
of the Constitution does not authorize the declaration of a
state of rebellion.6 They contend that the declaration is a
"constitutional anomaly" that "confuses, confounds and
misleads" because "[o]verzealous public officers, acting
pursuant to such proclamation or general order, are liable
to violate the constitutional right of private citizens."7
Petitioners also submit that the proclamation is a
circumvention of the report requirement under the same
Section 18, Article VII, commanding the President to
submit a report to Congress within 48 hours from the
proclamation of martial law.8 Finally, they contend that
the presidential issuances cannot be construed as an
exercise of emergency powers as Congress has not
delegated any such power to the President.9
In G.R. No. 159185 (Rep. Suplico et al. v. President
Macapagal-Arroyo and Executive Secretary Romulo),
petitioners brought suit as citizens and as Members of the
House of Representatives whose rights, powers and
functions were allegedly affected by the declaration of a
state of rebellion.10 Petitioners do not challenge the
power of the President to call out the Armed Forces.11
They argue, however, that the declaration of a state of
rebellion is a "superfluity," and is actually an exercise of
emergency powers.12 Such exercise, it is contended,
amounts to a usurpation of the power of Congress
granted by Section 23 (2), Article VI of the Constitution.13
In G.R. No. 159196 (Pimentel v. Romulo, et al.), petitioner
Senator assails the subject presidential issuances as "an
unwarranted, illegal and abusive exercise of a martial law
power that has no basis under the Constitution."14 In the
main, petitioner fears that the declaration of a state of
rebellion "opens the door to the unconstitutional
implementation of warrantless arrests" for the crime of
rebellion.15
Required to comment, the Solicitor General argues that
the petitions have been rendered moot by the lifting of the
declaration.16 In addition, the Solicitor General questions
the standing of the petitioners to bring suit.17
The Court agrees with the Solicitor General that the
issuance of Proclamation No. 435, declaring that the state
of rebellion has ceased to exist, has rendered the case
moot. As a rule, courts do not adjudicate moot cases,
judicial power being limited to the determination of "actual
controversies."18 Nevertheless, courts will decide a
question, otherwise moot, if it is "capable of repetition yet
evading review."19 The case at bar is one such case.
Once before, the President on May 1, 2001 declared a
state of rebellion and called upon the AFP and the PNP
to suppress the rebellion through Proclamation No. 38
and General Order No. 1. On that occasion, "'an angry
and violent mob armed with explosives, firearms, bladed
weapons, clubs, stones and other deadly weapons'
assaulted and attempted to break into Malacañang."20
Petitions were filed before this Court assailing the validity
of the President's declaration. Five days after such
declaration, however, the President lifted the same. The
mootness of the petitions in Lacson v. Perez and
accompanying cases21 precluded this Court from
addressing the constitutionality of the declaration.
61

To prevent similar questions from reemerging, we seize
this opportunity to finally lay to rest the validity of the
declaration of a state of rebellion in the exercise of the
President's calling out power, the mootness of the
petitions notwithstanding.
Only petitioners Rep. Suplico et al. and Sen. Pimentel, as
Members of Congress, have standing to challenge the
subject issuances. In Philippine Constitution Association
v. Enriquez,22 this Court recognized that:
To the extent the powers of Congress are impaired, so is
the power of each member thereof, since his office
confers a right to participate in the exercise of the powers
of that institution.
An act of the Executive which injures the institution of
Congress causes a derivative but nonetheless substantial
injury, which can be questioned by a member of
Congress. In such a case, any member of Congress can
have a resort to the courts.
Petitioner Members of Congress claim that the
declaration of a state of rebellion by the President is
tantamount to an exercise of Congress' emergency
powers, thus impairing the lawmakers' legislative powers.
Petitioners also maintain that the declaration is a
subterfuge to avoid congressional scrutiny into the
President's exercise of martial law powers.
Petitioners Sanlakas and PM, and SJS
Officers/Members, have no legal standing or locus standi
to bring suit. "Legal standing" or locus standi has been
defined as a personal and substantial interest in the case
such that the party has sustained or will sustain direct
injury as a result of the governmental act that is being
challenged…. The gist of the question of standing is
whether a party alleges "such personal stake in the
outcome of the controversy as to assure that concrete
adverseness which sharpens the presentation of issues
upon which the court depends for illumination of difficult
constitutional questions."23
Petitioners Sanlakas and PM assert that:
2. As a basic principle of the organizations and as an
important plank in their programs, petitioners are
committed to assert, defend, protect, uphold, and promote
the rights, interests, and welfare of the people, especially
the poor and marginalized classes and sectors of
Philippine society. Petitioners are committed to defend
and assert human rights, including political and civil rights,
of the citizens.
3. Members of the petitioner organizations resort to mass
actions and mobilizations in the exercise of their
Constitutional rights to peaceably assemble and their
freedom of speech and of expression under Section 4,
Article III of the 1987 Constitution, as a vehicle to publicly
ventilate their grievances and legitimate demands and to
mobilize public opinion to support the same.24 [Emphasis
in the original.]
Petitioner party-list organizations claim no better right
than the Laban ng Demokratikong Pilipino, whose
standing this Court rejected in Lacson v. Perez:
… petitioner has not demonstrated any injury to itself
which would justify the resort to the Court. Petitioner is a
juridical person not subject to arrest. Thus, it cannot claim
to be threatened by a warrantless arrest. Nor is it alleged
that its leaders, members, and supporters are being
threatened with warrantless arrest and detention for the
crime of rebellion. Every action must be brought in the
name of the party whose legal rights has been invaded or
infringed, or whose legal right is under imminent threat of
invasion or infringement.
At best, the instant petition may be considered as an
action for declaratory relief, petitioner claiming that it[']s
right to freedom of expression and freedom of assembly
is affected by the declaration of a "state of rebellion" and
that said proclamation is invalid for being contrary to the
Constitution.
However, to consider the petition as one for declaratory
relief affords little comfort to petitioner, this Court not
having jurisdiction in the first instance over such a petition.
Section 5 [1], Article VIII of the Constitution limits the
original jurisdiction of the court to cases affecting
ambassadors, other public ministers and consuls, and
over petitions for certiorari, prohibition, mandamus, quo
warranto, and habeas corpus.25
Even assuming that petitioners are "people's
organizations," this status would not vest them with the
requisite personality to question the validity of the
presidential issuances, as this Court made clear in
Kilosbayan v. Morato:26
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 decisionmaking in the courts from
decisionmaking in the political departments of the
government and bars the bringing of suits by just any
party.27
That petitioner SJS officers/members are taxpayers and
citizens does not necessarily endow them with standing.
A taxpayer may bring suit where the act complained of
directly involves the illegal disbursement of public funds
derived from taxation.28 No such illegal disbursement is
alleged.
On the other hand, a citizen will be allowed to raise a
constitutional question only when he can show that he has
personally suffered some actual or threatened injury as a
result of the allegedly illegal conduct of the government;
the injury is fairly traceable to the challenged action; and
the injury is likely to be redressed by a favorable action.29
Again, no such injury is alleged in this case.
Even granting these petitioners have standing on the
ground that the issues they raise are of transcendental
importance, the petitions must fail.
It is true that for the purpose of exercising the calling out
power the Constitution does not require the President to
62
make a declaration of a state of rebellion. Section 18,
Article VII provides:
Sec. 18. The President shall be the Commander-in-Chief
of all armed forces of the Philippines and whenever it
becomes necessary, he may call out such armed forces
to prevent or suppress lawless violence, invasion or
rebellion. In case of invasion or rebellion, when the public
safety requires it, he may, for a period not exceeding sixty
days, suspend the privilege of the writ of habeas corpus
or place the Philippines or any part thereof under martial
law. Within forty-eight hours from the proclamation of
martial law or the suspension of the writ of habeas corpus,
the President shall submit a report in person or in writing
to the Congress. The Congress, voting jointly, by a vote
of at least a majority of all its Members in regular or
special session, may revoke such proclamation or
suspension, which revocation shall not be set aside by the
President. Upon the initiative of the President, the
Congress may, in the same manner, extend such
proclamation or suspension for a period to be determined
by the Congress, if the invasion or rebellion shall persist
and public safety requires it.
The Congress, if not in session, shall, within twenty-four
hours following such proclamation or suspension,
convene in accordance with its rules without need of a
call.
The Supreme Court may review, in an appropriate
proceeding filed by any citizen, the sufficiency of the
factual basis for the proclamation of martial law or the
suspension of the privilege of the writ of habeas corpus or
the extension thereof, and must promulgate its decision
thereon within thirty days from its filing.
A state of martial law does not suspend the operation of
the Constitution, nor supplant the functioning of the civil
courts or legislative assemblies, nor authorize the
conferment of the jurisdiction on military courts and
agencies over civilians where civil courts are able to
function, nor automatically suspend the privilege of the
writ.
The suspension of the privilege of the writ shall apply only
to persons judicially charged for rebellion or offenses
inherent in or directly connected with invasion.
During the suspension of the privilege of the writ, any
person thus arrested or detained shall be judicially
charged within three days, otherwise he shall be released.
[Emphasis supplied.]
The above provision grants the President, as
Commander-in-Chief, a "sequence" of "graduated
power[s]."30 From the most to the least benign, these are:
the calling out power, the power to suspend the privilege
of the writ of habeas corpus, and the power to declare
martial law. In the exercise of the latter two powers, the
Constitution requires the concurrence of two conditions,
namely, an actual invasion or rebellion, and that public
safety requires the exercise of such power.31 However,
as we observed in Integrated Bar of the Philippines v.
Zamora,32 "[t]hese conditions are not required in the
exercise of the calling out power. The only criterion is that
'whenever it becomes necessary,' the President may call
the armed forces 'to prevent or suppress lawless violence,
invasion or rebellion.'"
Nevertheless, it is equally true that Section 18, Article VII
does not expressly prohibit the President from declaring
a state of rebellion. Note that the Constitution vests the
President not only with Commander-in-Chief powers but,
first and foremost, with Executive powers.
Section 1, Article VII of the 1987 Philippine Constitution
states: "The executive power shall be vested in the
President…." As if by exposition, Section 17 of the same
Article provides: "He shall ensure that the laws be
faithfully executed." The provisions trace their history to
the Constitution of the United States.
The specific provisions of the U.S. Constitution granting
the U.S. President executive and commander-in-chief
powers have remained in their original simple form since
the Philadelphia Constitution of 1776, Article II of which
states in part:
Section 1. 1. The Executive Power shall be vested in a
President of the United States of America . . . .
....
Section 2. 1. The President shall be Commander in Chief
of the Army and Navy of the United States. . . .
....
Section 3. … he shall take care that the laws be faithfully
executed…. [Article II – Executive Power]
Recalling in historical vignettes the use by the U.S.
President of the above-quoted provisions, as juxtaposed
against the corresponding action of the U.S. Supreme
Court, is instructive. Clad with the prerogatives of the
office and endowed with sovereign powers, which are
drawn chiefly from the Executive Power and Commander-
in-Chief provisions, as well as the presidential oath of
office, the President serves as Chief of State or Chief of
Government, Commander-in-Chief, Chief of Foreign
Relations and Chief of Public Opinion.33
First to find definitive new piers for the authority of the
Chief of State, as the protector of the people, was
President Andrew Jackson. Coming to office by virtue of
a political revolution, Jackson, as President not only kept
faith with the people by driving the patricians from power.
Old Hickory, as he was fondly called, was the first
President to champion the indissolubility of the Union by
defeating South Carolina's nullification effort.34
The Federal Tariff Acts of 1828 and 1832 that Congress
enacted did not pacify the hotspurs from South Carolina.
Its State Legislature ordered an election for a convention,
whose members quickly passed an Ordinance of
Nullification. The Ordinance declared the Tariff Acts
unconstitutional, prohibited South Carolina citizens from
obeying them after a certain date in 1833, and threatened
secession if the Federal Government sought to oppose
the tariff laws. The Legislature then implemented the
Ordinance with bristling punitive laws aimed at any who
sought to pay or collect customs duties.35
Jackson bided his time. His task of enforcement would not
be easy. Technically, the President might send troops into
a State only if the Governor called for help to suppress an
insurrection, which would not occur in the instance. The
President could also send troops to see to it that the laws
enacted by Congress were faithfully executed. But these
laws were aimed at individual citizens, and provided no
enforcement machinery against violation by a State.
Jackson prepared to ask Congress for a force bill.36
63
In a letter to a friend, the President gave the essence of
his position. He wrote: ". . . when a faction in a State
attempts to nullify a constitutional law of Congress, or to
destroy the Union, the balance of the people composing
this Union have a perfect right to coerce them to
obedience." Then in a Proclamation he issued on
December 10, 1832, he called upon South Carolinians to
realize that there could be no peaceable interference with
the execution of the laws, and dared them, "disunion by
armed force is treason. Are you ready to incur its guilt?"37
The Proclamation frightened nullifiers, non-nullifiers and
tight-rope walkers. Soon, State Legislatures began to
adopt resolutions of agreement, and the President
announced that the national voice from Maine on the
north to Louisiana on the south had declared nullification
and accession "confined to contempt and infamy."38
No other President entered office faced with problems so
formidable, and enfeebled by personal and political
handicaps so daunting, as Abraham Lincoln.
Lincoln believed the President's power broad and that of
Congress explicit and restricted, and sought some source
of executive power not failed by misuse or wrecked by
sabotage. He seized upon the President's designation by
the Constitution as Commander-in-Chief, coupled it to the
executive power provision — and joined them as "the war
power" which authorized him to do many things beyond
the competence of Congress.39
Lincoln embraced the Jackson concept of the President's
independent power and duty under his oath directly to
represent and protect the people. In his Message of July
4, 1861, Lincoln declared that "the Executive found the
duty of employing the war power in defense of the
government forced upon him. He could not but perform
the duty or surrender the existence of the Government . .
. ." This concept began as a transition device, to be
validated by Congress when it assembled. In less than
two-years, it grew into an independent power under which
he felt authorized to suspend the privilege of the writ of
habeas corpus, issue the Emancipation Proclamation,
and restore reoccupied States.40
Lincoln's Proclamation of April 15, 1861, called for 75,000
troops. Their first service, according to the proclamation,
would be to recapture forts, places and property, taking
care "to avoid any devastation, any destruction of or
interference with property, or any disturbance of peaceful
citizens."41
Early in 1863, the U.S. Supreme Court approved
President Lincoln's report to use the war powers without
the benefit of Congress. The decision was handed in the
celebrated Prize Cases42 which involved suits attacking
the President's right to legally institute a blockade.
Although his Proclamation was subsequently validated by
Congress, the claimants contended that under
international law, a blockade could be instituted only as a
measure of war under the sovereign power of the State.
Since under the Constitution only Congress is exclusively
empowered to declare war, it is only that body that could
impose a blockade and all prizes seized before the
legislative declaration were illegal. By a 5 to 4 vote, the
Supreme Court upheld Lincoln's right to act as he had.43
In the course of time, the U.S. President's power to call
out armed forces and suspend the privilege of the writ of
habeas corpus without prior legislative approval, in case
of invasion, insurrection, or rebellion came to be
recognized and accepted. The United States introduced
the expanded presidential powers in the Philippines
through the Philippine Bill of 1902.44 The use of the
power was put to judicial test and this Court held that the
case raised a political question and said that it is beyond
its province to inquire into the exercise of the power.45
Later, the grant of the power was incorporated in the 1935
Constitution.46
Elected in 1884, Grover Cleveland took his ascent to the
presidency to mean that it made him the trustee of all the
people. Guided by the maxim that "Public office is a public
trust," which he practiced during his incumbency,
Cleveland sent federal troops to Illinois to quell striking
railway workers who defied a court injunction. The
injunction banned all picketing and distribution of
handbills. For leading the strikes and violating the
injunction, Debs, who was the union president, was
convicted of contempt of court. Brought to the Supreme
Court, the principal issue was by what authority of the
Constitution or statute had the President to send troops
without the request of the Governor of the State.47
In In Re: Eugene Debs, et al,48 the Supreme Court
upheld the contempt conviction. It ruled that it is not the
government's province to mix in merely individual present
controversies. Still, so it went on, "whenever wrongs
complained of are such as affect the public at large, and
are in respect of matters which by the Constitution are
entrusted to the care of the Nation and concerning which
the Nation owes the duty to all citizens of securing to them
their common rights, then the mere fact that the
Government has no pecuniary interest in the controversy
is not sufficient to exclude it from the Courts, or prevent it
from taking measures therein to fully discharge those
constitutional duties."49 Thus, Cleveland's course had the
Court's attest.
Taking off from President Cleveland, President Theodore
Roosevelt launched what political scientists dub the
"stewardship theory." Calling himself "the steward of the
people," he felt that the executive power "was limited only
by the specific restrictions and prohibitions appearing in
the Constitution, or impleaded by Congress under its
constitutional powers."50
The most far-reaching extension of presidential power
"T.R." ever undertook to employ was his plan to occupy
and operate Pennsylvania's coal mines under his
authority as Commander-in-Chief. In the issue, he found
means other than force to end the 1902 hard-coal strike,
but he had made detailed plans to use his power as
Commander-in-Chief to wrest the mines from the
stubborn operators, so that coal production would begin
again.51
Eventually, the power of the State to intervene in and
even take over the operation of vital utilities in the public
interest was accepted. In the Philippines, this led to the
incorporation of Section 6,52 Article XIII of the 1935
Constitution, which was later carried over with
modifications in Section 7,53 Article XIV of the 1973
Constitution, and thereafter in Section 18,54 Article XII of
the 1987 Constitution.
The lesson to be learned from the U.S. constitutional
history is that the Commander-in-Chief powers are broad
enough as it is and become more so when taken together
with the provision on executive power and the presidential
oath of office. Thus, the plenitude of the powers of the
presidency equips the occupant with the means to
address exigencies or threats which undermine the very
existence of government or the integrity of the State.
64

In The Philippine Presidency A Study of Executive Power,
the late Mme. Justice Irene R. Cortes, proposed that the
Philippine President was vested with residual power and
that this is even greater than that of the U.S. President.
She attributed this distinction to the "unitary and highly
centralized" nature of the Philippine government. She
noted that, "There is no counterpart of the several states
of the American union which have reserved powers under
the United States constitution." Elaborating on the
constitutional basis for her argument, she wrote:
…. The [1935] Philippine [C]onstitution establishes the
three departments of the government in this manner: "The
legislative power shall be vested in a Congress of the
Philippines which shall consist of a Senate and a House
of Representatives." "The executive power shall be
vested in a President of the Philippines." The judicial
powers shall be vested in one Supreme Court and in such
inferior courts as may be provided by law." These
provisions not only establish a separation of powers by
actual division but also confer plenary legislative,
executive, and judicial powers. For as the Supreme Court
of the Philippines pointed out in Ocampo v. Cabangis, "a
grant of legislative power means a grant of all the
legislative power; and a grant of the judicial power means
a grant of all the judicial power which may be exercised
under the government." If this is true of the legislative
power which is exercised by two chambers with a
combined membership [at that time] of more than 120 and
of the judicial power which is vested in a hierarchy of
courts, it can equally if not more appropriately apply to the
executive power which is vested in one official – the
president. He personifies the executive branch. There is
a unity in the executive branch absent from the two other
branches of government. The president is not the chief of
many executives. He is the executive. His direction of the
executive branch can be more immediate and direct than
the United States president because he is given by
express provision of the constitution control over all
executive departments, bureaus and offices.55
The esteemed Justice conducted her study against the
backdrop of the 1935 Constitution, the framers of which,
early on, arrived at a general opinion in favor of a strong
Executive in the Philippines."56 Since then, reeling from
the aftermath of martial law, our most recent Charter has
restricted the President's powers as Commander-in-
Chief. The same, however, cannot be said of the
President's powers as Chief Executive.
In her ponencia in Marcos v. Manglapus, Justice Cortes
put her thesis into jurisprudence. There, the Court, by a
slim 8-7 margin, upheld the President's power to forbid
the return of her exiled predecessor. The rationale for the
majority's ruling rested on the President's
… unstated residual powers which are implied from the
grant of executive power and which are necessary for her
to comply with her duties under the Constitution. The
powers of the President are not limited to what are
expressly enumerated in the article on the Executive
Department and in scattered provisions of the
Constitution. This is so, notwithstanding the avowed intent
of the members of the Constitutional Commission of 1986
to limit the powers of the President as a reaction to the
abuses under the regime of Mr. Marcos, for the result was
a limitation of specific powers of the President, particularly
those relating to the commander-in-chief clause, but not
a diminution of the general grant of executive power.57
[Underscoring supplied. Italics in the original.]
Thus, the President's authority to declare a state of
rebellion springs in the main from her powers as chief
executive and, at the same time, draws strength from her
Commander-in-Chief powers. Indeed, as the Solicitor
General accurately points out, statutory authority for such
a declaration may be found in Section 4, Chapter 2
(Ordinance Power), Book III (Office of the President) of
the Revised Administrative Code of 1987, which states:
SEC. 4. Proclamations. – Acts of the President fixing a
date or declaring a status or condition of public moment
or interest, upon the existence of which the operation of a
specific law or regulation is made to depend, shall be
promulgated in proclamations which shall have the force
of an executive order. [Emphasis supplied.]
The foregoing discussion notwithstanding, in calling out
the armed forces, a declaration of a state of rebellion is
an utter superfluity.58 At most, it only gives notice to the
nation that such a state exists and that the armed forces
may be called to prevent or suppress it.59 Perhaps the
declaration may wreak emotional effects upon the
perceived enemies of the State, even on the entire nation.
But this Court's mandate is to probe only into the legal
consequences of the declaration. This Court finds that
such a declaration is devoid of any legal significance. For
all legal intents, the declaration is deemed not written.
Should there be any "confusion" generated by the
issuance of Proclamation No. 427 and General Order No.
4, we clarify that, as the dissenters in Lacson correctly
pointed out, the mere declaration of a state of rebellion
cannot diminish or violate constitutionally protected
rights.60 Indeed, if a state of martial law does not suspend
the operation of the Constitution or automatically suspend
the privilege of the writ of habeas corpus,61 then it is with
more reason that a simple declaration of a state of
rebellion could not bring about these conditions.62 At any
rate, the presidential issuances themselves call for the
suppression of the rebellion "with due regard to
constitutional rights."
For the same reasons, apprehensions that the military
and police authorities may resort to warrantless arrests
are likewise unfounded. In Lacson vs. Perez, supra,
majority of the Court held that "[i]n quelling or suppressing
the rebellion, the authorities may only resort to
warrantless arrests of persons suspected of rebellion, as
provided under Section 5, Rule 113 of the Rules of
Court,63 if the circumstances so warrant. The warrantless
arrest feared by petitioners is, thus, not based on the
declaration of a 'state of rebellion.'"64 In other words, a
person may be subjected to a warrantless arrest for the
crime of rebellion whether or not the President has
declared a state of rebellion, so long as the requisites for
a valid warrantless arrest are present.
It is not disputed that the President has full discretionary
power to call out the armed forces and to determine the
necessity for the exercise of such power. While the Court
may examine whether the power was exercised within
constitutional limits or in a manner constituting grave
abuse of discretion, none of the petitioners here have, by
way of proof, supported their assertion that the President
acted without factual basis.65
The argument that the declaration of a state of rebellion
amounts to a declaration of martial law and, therefore, is
a circumvention of the report requirement, is a leap of
logic. There is no indication that military tribunals have
replaced civil courts in the "theater of war" or that military
authorities have taken over the functions of civil
65
government. There is no allegation of curtailment of civil
or political rights. There is no indication that the President
has exercised judicial and legislative powers. In short,
there is no illustration that the President has attempted to
exercise or has exercised martial law powers.
Nor by any stretch of the imagination can the declaration
constitute an indirect exercise of emergency powers,
which exercise depends upon a grant of Congress
pursuant to Section 23 (2), Article VI of the Constitution:
Sec. 23. (1) ….
(2) In times of war or other national emergency, the
Congress may, by law, authorize the President, for a
limited period and subject to such restrictions as it may
prescribe, to exercise powers necessary and proper to
carry out a declared national policy. Unless sooner
withdrawn by resolution of the Congress, such powers
shall cease upon the next adjournment thereof.
The petitions do not cite a specific instance where the
President has attempted to or has exercised powers
beyond her powers as Chief Executive or as Commander-
in-Chief. The President, in declaring a state of rebellion
and in calling out the armed forces, was merely exercising
a wedding of her Chief Executive and Commander-in-
Chief powers. These are purely executive powers, vested
on the President by Sections 1 and 18, Article VII, as
opposed to the delegated legislative powers
contemplated by Section 23 (2), Article VI.
WHEREFORE, the petitions are hereby DISMISSED.
SO ORDERED.
Carpio, Corona, and Carpio-Morales, JJ., concur.
Davide, Jr., C.J., in the result.
Puno, J., in the result.
Vitug, J., see separate opinion.
Panganiban, J., see separate opinion.
Quisumbing, J., joins J. Panganiban's Opinion.
Ynares-Santiago, J., see separate opinion.
Sandoval-Gutierrez, J., please see dissenting opinion.
Austria-Martinez, J., concur in the result.
Callejo, Sr., J., concurs in the separate opinion of J.
Panganiban.
Azcuna, J., on official leave.
Separate Opinions
PANGANIBAN, J.:
Petitioners challenge the constitutionality of the "state of
rebellion" declared by the President through Proclamation
No. 427 and General Order No. 4 in the wake of the so-
called "Oakwood Incident." The questioned issuances,
however, were subsequently lifted by her on August 1,
2003, when she issued Proclamation No. 435. Hence, as
of today, there is no more extant proclamation or order
that can be declared valid or void.
For this reason, I believe that the Petitions should be
dismissed on the ground of mootness.
The judicial power to declare a law or an executive order
unconstitutional, according to Justice Jose P. Laurel, is
"limited to actual cases and controversies to be exercised
after full opportunity of argument by the parties, and
limited further to the constitutional question raised or the
very lis mota presented."1 Following this long-held
principle, the Court has thus always been guided by these
fourfold requisites in deciding constitutional law issues: 1)
there must be an actual case or controversy involving a
conflict of rights susceptible of judicial determination; 2)
the constitutional question must be raised by a proper
party; 3) the constitutional question must be raised at the
earliest opportunity; and 4) adjudication of the
constitutional question must be indispensable to the
resolution of the case.2
Unquestionably, the first and the forth requirements are
absent in the present case.
Absence of Case and Controversy
The first requirement, the existence of a live case or
controversy, means that an existing litigation is ripe for
resolution and susceptible of judicial determination; as
opposed to one that is conjectural or anticipatory,3
hypothetical or feigned.4 A justiciable controversy
involves a definite and concrete dispute touching on the
legal relations of parties having adverse legal interests.5
Hence, it admits of specific relief through a decree that is
conclusive in character, in contrast to an opinion which
only advises what the law would be upon a hypothetical
state of facts.6
As a rule, courts have no authority to pass upon issues
through advisory opinions or friendly suits between
parties without real adverse interests.7 Neither do courts
sit to adjudicate academic questions –– no matter how
intellectually challenging8 –– because without a
justiciable controversy, an adjudication would be of no
practical use or value.9
While the Petitions herein have previously embodied a
live case or controversy, they now have been rendered
extinct by the lifting of the questioned issuances. Thus,
nothing is gained by breathing life into a dead issue.
Moreover, without a justiciable controversy, the
Petitions10 have become pleas for declaratory relief, over
which the Supreme Court has no original jurisdiction. Be
it remembered that they were filed directly with this Court
and thus invoked its original jurisdiction.11
On the theory that the "state of rebellion" issue is "capable
of repetition yet evading review," I respectfully submit that
the question may indeed still be resolved even after the
lifting of the Proclamation and Order, provided the party
raising it in a proper case has been and/or continue to be
prejudiced or damaged as a direct result of their issuance.
In the present case, petitioners have not shown that they
have been or continue to be directly and pecuniarily
prejudiced or damaged by the Proclamation and Order.
Neither have they shown that this Court has original
jurisdiction over petitions for declaratory relief. I would
venture to say that, perhaps, if this controversy had
emanated from an appealed judgment from a lower
tribunal, then this Court may still pass upon the issue on
the theory that it is "capable of repetition yet evading
review," and the case would not be an original action for
declaratory relief.
In short, the theory of "capable of repetition yet evading
review" may be invoked only when this Court has
jurisdiction over the subject matter. It cannot be used in
the present controversy for declaratory relief, over which
the Court has no original jurisdiction.
The Resolution of the Case on Other Grounds
66

The fourth requisite, which relates to the absolute
necessity of deciding the constitutional issue, means that
the Court has no other way of resolving the case except
by tackling an unavoidable constitutional question. It is a
well-settled doctrine that courts will not pass upon a
constitutional question unless it is the lis mota of the case,
or if the case can be disposed on some other grounds.12
With due respect, I submit that the mootness of the
Petitions has swept aside the necessity of ruling on the
validity of Proclamation No. 427 and General order No. 4.
In the wake of its mootness, the constitutionality issue has
ceased to be the lis mota of the case or to be an
unavoidable question in the resolution thereof. Hence, the
dismissal of the Petitions for mootness is justified.13
WHEREFORE, I vote to DISMISS the Petitions. On the
constitutionality of a "state of rebellion," I reserve my
judgment at the proper time and in the proper case.
YNARES-SANTIAGO, J.:
The fundamental issue in the petitions is the legality of
Proclamation No. 427 issued by the President on July 27,
2003 declaring a "state of rebellion".
The majority affirmed the declaration is legal because the
President was only exercising a wedding of the "Chief
Executive" and "Commander-in-Chief" powers. U.S.
jurisprudence and commentators are cited discussing the
awesome powers exercised by the U.S. President during
moments of crisis1 and that these powers are also
available to the Philippine President.2 Although the limits
cannot be precisely defined, the majority concluded that
there are enough "residual powers" to serve as the basis
to support the Presidential declaration of a "state of
rebellion".3 The majority, however, emphasized that the
declaration cannot diminish or violate constitutionally
protected rights.4 They affirmed the legality of warrantless
arrests of persons who participated in the rebellion, if
circumstances so warrant5 with this clarification: "[i]n
other words, a person may be subjected to a warrantless
arrests for the crime of rebellion whether or not the
President has declared a state of rebellion, so long as the
requisites for a valid warrantless arrest are present."6
If the requisites for a warrantless arrests must still be
present for an arrest to be made, then the declaration is a
superfluity. I therefore shudder when a blanket affirmation
is given to the President to issue declarations of a "state
of rebellion" which in fact may not be the truth or which
may be in affect even after the rebellion has ended.
Proclamation No. 427 was issued at 1:00 p.m. on July 27,
2003, at the height of the occupation of the Oakwood
Premier Apartments in Ayala Center, Makati City, by 323
junior officers and enlisted men (Oakwood Incident),7
which began in the early morning of July 27, 2003.8
Shortly after, the President issued General Order No. 4,
ordering the Armed Forces of the Philippines and the
Philippine National Police to use reasonable force, and
pay due regard to constitutional rights, in putting down the
rebellion.9 The Oakwood incident ended peacefully that
same evening when the militant soldiers surrendered after
negotiations.
From July 27 to August 1, 2003, "search and recovery"
operations were conducted. Throughout the Oakwood
Incident, searches were conducted in the non-occupied
areas,10 and, with the recovery of evidence, staging
points for the Oakwood Incident were found in Cavite,
Makati and Mandaluyong.11 After the soldiers left at
around 11:00 in the evening of July 27, a search was
conducted around the Oakwood premises.12 These
searches expanded in scope on the basis of recovered
evidence.13
Ramon Cardenas, Assistant Executive Secretary in the
previous administration, was arrested, presented to the
media in handcuffs and brought for inquest proceedings
before the Department of Justice ("DOJ") in the morning
of July 28.14 He was initially detained at the Office of the
Anti-Organized Crime Division of the Criminal
Investigation and Detection Group ("CIDG"), and brought
to the DOJ in the afternoon of July 28.15 Cardenas was
later charged with the crime of rebellion,16 but as of this
writing has been allowed bail.
On July 31, 2003, 4 days after the militant group had
surrendered peacefully, an official spokesperson from the
DOJ declared that the President's "indefinite" imposition
of the "state of rebellion" would make "warrantless
arrests" a valid exercise of executive power.
The Court can take judicial notice that the police
authorities were releasing to media "evidence found"
purporting to link personalities in the political opposition,
the most prominent of whom was Senator Gringo
Honasan. Even Senator Loi Ejercito and Mayor JV
Ejercito's names were being linked to the attempted
uprising.
On August 1, 2003, the President issued Proclamation
No. 435, declaring that the Armed Forces of the
Philippines and the Philippine National Police had
effectively suppressed and quelled the rebellion, and,
accordingly, that the "state of rebellion" had ceased on
that date.
The majority discussed only the abstract nature of the
powers exercised by the Chief Executive, without
considering if there was sufficient factual basis for the
President's declaration of a "state of rebellion" and when
it ended. In taking this position, the majority is returning, if
not expanding, the doctrine enunciated in Garcia-Padilla
v. Enrile,17 which overturned the landmark doctrine in
Lansang v. Garcia.18 In Lansang, the Supreme Court
upheld its authority to inquire into the factual bases for the
suspension of the privilege of the writ of habeas corpus,
and held that this inquiry raises a judicial rather than a
political question. In Garcia-Padilla, on the other hand, the
ponencia held that Lansang was no longer authoritative,
and that the President's decision to suspend the privilege
is final and conclusive upon the courts and all other
persons.
These two cases were decided prior to the 1987
Constitution, which requires this Court not only to settle
actual controversies involving rights which are legally
demandable and enforceable, but also 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 government.19 This
provision in the 1987 Constitution was precisely meant to
check abuses of executive power. Martial Law was still
fresh in the minds of the delegates in 1987!lawphi1.nêt
The majority ignored the fact that the "state of rebellion"
declared by the President was in effect five days after the
peaceful surrender of the militant group.
67
The President's proclamation cites Section 18, Article VII
of the Constitution as the basis for the declaration of the
"state of rebellion.".
Section 18 authorizes the President, as Commander-in-
Chief, to call out the Armed Forces, in order to suppress
one of three conditions: (1) lawless violence, (2) rebellion
or (3) invasion.20 In the latter two cases, i.e., rebellion or
invasion, the President may, when public safety requires,
also (1) suspend the privilege of the writ of habeas
corpus, or (2) place the Philippines or any part thereof
under martial law.
The majority made it clear that exercise of the President's
Commander-in-Chief powers does not require the
declaration of a "state of rebellion" or a declaration of a
"state of lawless violence" or a "state of invasion". When
any of these conditions exist, the President may call out
the armed forces to suppress the danger.
Thus, the declaration of a "state of rebellion" does not
have any legal meaning or consequence. This declaration
does not give the President any extra powers. It does not
have any good purpose.
If the declaration is used to justify warrantless arrests
even after the rebellion has ended, as in the case of
Cardenas, such declaration or, at the least, the
warrantless arrests, must be struck down.
Clearly defined in Article 134 of the Revised Penal Code
is the crime of rebellion or insurrection, to wit:
ART. 134. Rebellion or insurrection – How committed. –
The crime of rebellion or insurrection is committed by
rising publicly and taking up arms against the Government
for the purpose of removing from the allegiance to said
Government or its laws, the territory of the Republic of the
Philippines or any part thereof, of any body of land, naval
or other armed forces, or depriving the Chief Executive or
the legislature, wholly or partially, of any of their powers
or prerogatives.
On the other hand, a coup d' etat is defined as follows:
ART. 134-A. Coup d' etat. – How committed. – The crime
of coup d' etat is a swift attack accompanied by violence,
intimidation, threat, strategy or stealth, directed against
the duly constituted authorities of the Republic of the
Philippines, or any military camp or installation,
communications networks, public utilities or other facilities
needed for the exercise and continued possession of
power, singly or simultaneously carried out anywhere in
the Philippines by any person or persons, belonging to the
military or police or holding any public office or
employment, with or without civilian support or
participation, for the purpose of seizing or diminishing
state power.
Under these provisions, the crime of rebellion or
insurrection is committed only by "rising publicly or taking
up arms against the Government". A coup d' etat, on the
other hand, takes place only when there is a "swift attack
accompanied by violence." Once the act of "rising publicly
and taking up arms against the Government" ceases, the
commission of the crime of rebellion ceases. Similarly,
when the "swift attack" ceases, the crime of coup d' etat
is no longer being committed.
Rebellion has been held to be a continuing crime,21 and
the authorities may resort to warrantless arrests of
persons suspected of rebellion, as provided under
Section 5, Rule 113 of the Rules of Court.22 However,
this doctrine should be applied to its proper context – i.e.,
relating to subversive armed organizations, such as the
New People's Army, the avowed purpose of which is the
armed overthrow of the organized and established
government. Only in such instance should rebellion be
considered a continuing crime.
When the soldiers surrendered peacefully in the evening
of July 27, the rebellion or the coup d' etat ended. The
President, however, did not lift the declaration of the "state
of rebellion" until 5 days later, on August 1, 2003.
After the peaceful surrender, no person suspected of
having conspired with the soldiers or participated in the
Oakwood incident could be arrested without a warrant of
arrest. Section 5, Rule 113 of the Revised Rules of Court,
which governs arrest without warrant, provides as follows:
SEC. 5. Arrest without warrant; when lawful. – A peace
officer or a private person may, without a warrant, arrest
a person:
(a) When, in his presence, the person to be arrested has
committed, is actually committing, or is attempting to
commit an offense;
(b) When an offense has just been committed and he has
probable cause to believe based on personal knowledge
of facts or circumstances that the person to be arrested
has committed it; and
xxxxxxxxx
In cases falling under paragraphs (a) and (b) above, the
person arrested without a warrant shall be forthwith
delivered to the nearest police station or jail and shall be
proceeded against in accordance with section 7 of Rule
112.
Rule 113, Section 5, pars. (a) and (b) of the Rules of Court
are exceptions to the due process clause in the
Constitution. Section 5, par. (a) relates to a situation
where a crime is committed or attempted in the presence
of the arresting officer.
Section 5, par. (b), on the other hand, presents the
requirement of "personal knowledge", on the part of the
arresting officer, of facts indicating that an offense had
"just been committed", and that the person to be arrested
had committed that offense.
After the peaceful surrender of the soldiers on July 27,
2003, there was no crime that was being "attempted",
"being committed", or "had just been committed." There
should, therefore, be no occasion to effect a valid
warrantless arrest in connection with the Oakwood
Incident.
The purpose of the declaration and its duration as far as
the overeager authorities were concerned was only to
give legal cover to effect warrantless arrests even if the
"state of rebellion" or the instances stated in Rule 113,
Section 5 of the Rules are absent or no longer exist.
Our history had shown the dangers when too much power
is concentrated in the hands of one person. Unless
specifically defined, it is risky to concede and
acknowledge the "residual powers" to justify the validity of
the presidential issuances. This can serve as a blank
check for other issuances and open the door to abuses.
The majority cite the exercise of strong executive powers
68
by U.S. President Andrew Jackson. Was it not President
Jackson who is said to have cynically defied the U.S.
Supreme Court's ruling (under Chief Justice Marshall)
against the forcible removal of the American Indians from
the tribal lands by saying: "The Chief Justice has issued
his Decision, now let him try to enforce it?" Others quote
Madison as having gone further with: "With what army will
the Chief Justice enforce his Decision?"
WHEREFORE, I vote for Proclamation No. 427 and
General Order No. 4, issued on July 27, 2003 by
Respondent President Gloria Macapagal-Arroyo, to be
declared NULL and VOID for having been issued with
grave abuse of discretion amounting to lack of jurisdiction.
All other orders issued and action taken based on those
issuances, especially after the Oakwood incident ended
in the evening of July 27, 2003, e.g., warrantless arrests,
should also be declared null and void.
Dissenting Opinion
SANDOVAL-GUTIERREZ, J.:
"Courts will decide a question otherwise moot and
academic if it is 'capable of repetition, yet evading
review.'"1 On this premise, I stood apart from my
colleagues in dismissing the petition in Lacson vs.
Perez.2 Their reason was that President Gloria
Macapagal-Arroyo's lifting of the declaration of a "state of
rebellion" rendered moot and academic the issue of its
constitutionality. Looking in retrospect, my fear then was
the repetition of the act sought to be declared
unconstitutional.
No more than three (3) years have passed, and here we
are again haunted by the same issue.
I lucidity and historical accuracy. The passage of time has
A brief restatement of the facts is imperative.
In the wee hours of July 27, 2003, three hundred twenty-
three (323) junior officers and enlisted men of the Armed
Forces of the Philippines (AFP) took over the Oakwood
Premier Apartments, Ayala Center, Makati City.
Introducing themselves as the "Magdalo Group," they
claimed that they went to Oakwood to air their grievances
about graft and corruption in the military, the sale of arms
and ammunitions to the "enemies" of the state, the
bombings in Davao City allegedly ordered by Gen. Victor
Corpus, then Chief of the Intelligence Service of the
Armed Forces of the Philippines (ISAFP), the increased
military assistance from the United States, and
"micromanagement" in the AFP by Gen. Angelo Reyes,
then Secretary of the Department of National Defense.3
The military men demanded the resignation of the
President, the Secretary of National Defense and the
Chief of the Philippine National Police.
At about 9:00 A.M. of the same day, President Arroyo
gave the Magdalo Group until 5:00 P.M. to give up their
positions peacefully and return to the barracks. At around
1:00 P.M., she issued Proclamation No. 427 and General
Order No. 4 declaring the existence of a "state of
rebellion" and calling out the AFP to suppress the
rebellion.
Shortly before the 5:00 P.M. deadline, President Arroyo
announced an extension until 7:00 P.M. During the two-
hour reprieve, negotiations between the Magdalo Group
and various personalities took place. The rebels agreed
to return to the barracks. They left the Oakwood premises
at 11:00 P.M.
On July 28, 2003, Agents of the National Bureau of
Investigation (NBI) searched the house owned by Ramon
Cardenas at 2177 Paraiso St., Dasmariñas Village,
Makati City. After the raid and the recovery of evidence
claimed to link him to rebellion, Cardenas, accompanied
by Atty. Rene Saguisag, went to the CIDG in Camp
Crame. On the same day, Cardenas was brought to the
Department of Justice for inquest proceeding. He was
later charged with the crime of rebellion.
The Mandaluyong City Police likewise searched the
townhouses belonging to Laarni Enriquez, allegedly used
as staging areas by the Magdalo Group.
On August 1, 2003, President Arroyo lifted her declaration
of a state of rebellion through Proclamation No. 435.
Meanwhile, on August 4, 2003, Secretary Jose Lina, Jr.
of the Department of the Interior and Local Government,
forwarded to the DOJ the affidavit-complaint for coup
d'etat of PC Chief Superintendent Eduardo Matillano
against Senator Gregorio Honasan, Ernesto Macahiya,
George Duldulao and several "John and Jane Does"
numbering about 1,000.
On August 8, 2003, PNP Chief Inspector Jesus
Fernandez of the Eastern Police District referred to the
DOJ an investigation report recommending that Enriquez
and a certain Romy Escalona be prosecuted for rebellion
and insurrection.
II
I regret that I cannot give my assent to the ponencia of
Mr. Justice Dante O. Tinga even as I admire it for its
not changed my Opinion in Lacson vs. Perez – that
President Arroyo's declaration of a "state of rebellion" is
unconstitutional.
I cannot subscribe to the majority's view that the
declaration of a "state of rebellion" is justified under Article
VII of the 1987 Constitution granting her "Executive" and
"Commander-in-Chief" powers.
III
Consistent with my previous stand, it is my view that
nowhere in the Constitution can be found a provision
which grants to the President the authority to declare a
"state of rebellion," or exercise powers, which may be
legally allowed only under a state of martial law. President
Arroyo, in declaring a "state of rebellion," deviated from
the following provisions of the Constitution:
"Sec. 18. The President shall be the Commander-in-Chief
of all armed forces of the Philippines and whenever if
becomes necessary, he may call out such armed forces
to prevent or suppress lawless violence, invasion or
rebellion. In case of invasion or rebellion, when the public
safety requires it, he may, for a period not exceeding sixty
days, suspend the privilege of the writ of habeas corpus
or place the Philippines or any part thereof under martial
law. Within forty-eight hours from the proclamation of
martial law or the suspension of the privilege of the writ of
habeas corpus, the President shall submit a report in
person or in writing to the Congress. The Congress,
voting jointly, by a vote of at least a majority of all its
69
Members in regular or special session, may revoke such
proclamation or suspension, which revocation shall not be
set aside by the President. Upon the initiative of the
President, the Congress may, in the same manner,
extend such proclamation or suspension for a period to
be determined by the Congress, if the invasion or
rebellion shall persist and public safety requires it.
The Congress, if not in session, shall within twenty-four
hours following such proclamation or suspension,
convene in accordance with its rules without need of a
call.lawphil.net
The Supreme Court may review, in an appropriate
proceeding filed by any citizen, the sufficiency of the
factual bases of the proclamation of martial law or the
suspension of the privilege of the writ or the extension
thereof, and must promulgate its decision thereon within
thirty days from its filing.
A state of martial law does not suspend the operation of
the Constitution, nor supplant the functioning of the civil
courts or legislative assemblies, nor authorize the
conferment of jurisdiction on military courts and agencies
over civilians where civil courts are able to function, nor
automatically suspend the privilege of the writ.
The suspension of the privilege of the writ shall apply only
to persons judicially charged for rebellion or offenses
inherent in or directly connected with invasion.
During the suspension of the privilege of the writ, any
person thus arrested or detained shall be judicially
charged within three days, otherwise he shall be
released."4
The powers of the President when she assumed the
existence of rebellion are laid down by the Constitution.
She may (1) call the armed forces to prevent or suppress
lawless violence, invasion or rebellion; (2) suspend the
privilege of the writ of habeas corpus; or (3) place the
Philippines or any part thereof under martial law. Now,
why did President Arroyo declare a "state of rebellion"
when she has no such power under the Constitution?
If President Arroyo's only purpose was merely to exercise
her "calling out power," then she could have simply
ordered the AFP to prevent or suppress what she
perceived as an invasion or rebellion. Such course raises
no constitutional objection, it being provided for by the
above-quoted provisions. However, adopting an
unorthodox measure unbounded and not canalized by the
language of the Constitution is dangerous. It leaves the
people at her mercy and that of the military, ignorant of
their rights under the circumstances and wary of their
settled expectations. One good illustration is precisely in
the case of invasion or rebellion. Under such situation, the
President has the power to suspend the privilege of the
writ of habeas corpus or to declare martial law. Such
power is not a plenary one, as shown by the numerous
limitations imposed thereon by the Constitution, some of
which are: (1) the public safety requires it; (2) it does not
exceed sixty (60) days; (3) within forty-eight (48) hours,
she shall submit a report, in writing or in person, to
Congress; (4) The Congress, by a vote of at least a
majority of all its members, may revoke such proclamation
or suspension. All these limitations form part of the
citizens' settled expectations. If the President exceeds the
set limitations, the citizens know that they may resort to
this Court through appropriate proceeding to question the
sufficiency of the factual bases of the proclamation of
martial law or the suspension of the privilege of the writ.
In turn, this Court shall promulgate its Decision within
thirty days from the filing of the proper pleading. All the
foregoing guarantees and limitations are absent in the
declaration of a "state of rebellion." It is not subject to clear
legal restraints. How then can the citizens determine the
propriety of the President's acts committed pursuant to
such declaration? How can excess of power be curtailed
at its inception?
Indeed, I see no reason for the President to deviate from
the concise and plain provisions of the Constitution. In a
society which adheres to the rule of law, resort to extra-
constitutional measures is unnecessary where the law
has provided everything for any emergency or
contingency. For even if it may be proven beneficial for a
time, the precedent it sets is pernicious as the law may, in
a little while, be disregarded again on the same pretext
but for questionable purposes. Even in time of
emergency, government action may vary in breath and
intensity from more normal times, yet it need not be less
constitutional.5 Extraordinary conditions may call for
extraordinary remedies. But it cannot justify action which
lies outside the sphere of constitutional authority.
Extraordinary conditions do not create or enlarge
constitutional power.6
I cannot simply close my eyes to the dangers that lurk
behind the seemingly harmless declaration of a "state of
rebellion." Still fresh from my memory is the May 1, 2001
civil unrest. On such date, President Arroyo placed Metro
Manila under a "state of rebellion" because of the violent
street clashes involving the loyalists of former President
Joseph Estrada and the police authorities. Presidential
Spokesperson Rigoberto Tiglao told reporters, "We are in
a state of rebellion. This is not an ordinary
demonstration."7 Immediately thereafter, there were
threats of arrests against those suspected of instigating
the march to Malacañang. At about 3:30 in the afternoon,
Senator Juan Ponce Enrile was arrested in his house in
Dasmariñas Village, Makati City by a group led by Gen.
Reynaldo Berroya, Chief of the Philippine National Police
Intelligence Group.8 Thereafter, he and his men
proceeded to hunt re-electionist Senator Gregorio
Honasan, former PNP Chief, now Senator Panfilo Lacson,
former Ambassador Ernesto Maceda, Brig. Gen. Jake
Malajakan, Senior Superintendents Michael Ray Aquino
and Cesar Mancao II, Ronald Lumbao and Cesar Tanega
of the People's Movement Against Poverty (PMAP).9
Former Justice Secretary Hernando Perez said that he
was "studying" the possibility of placing Senator Miriam
Defensor-Santiago "under the Witness Protection
Program." Director Victor Batac, former Chief of the PNP
Directorate for Police Community Relations, and Senior
Superintendent Diosdado Valeroso, of the Philippine
Center for Transnational Crime, surrendered to Gen.
Berroya. Both denied having plotted the siege. On May 2,
2001, former Ambassador Ernesto Maceda was arrested.
On President Arroyo's mere declaration of a "state of
rebellion," police authorities arrested without warrants the
above-mentioned personalities. In effect, she placed the
Philippines under martial law without a declaration to that
effect and without observing the proper procedure. This is
a very dangerous precedent. The Constitution provides
that "the right of the people to be secure in their persons,
houses, papers and effects against unreasonable
searches and seizure of whatever nature and for any
purpose shall be inviolable, and no search warrant or
warrant of arrest shall issue except upon probable cause
to be determined personally by the judge after
examination under oath or affirmation of the complainant
and the witnesses he may produce, and particularly
70
describing the place to be searched and the persons or
things to be seized."10 Obviously, violation of this
constitutional provision cannot be justified by reason of
the declaration of a "state of rebellion" for such
declaration, as earlier mentioned, is unconstitutional.
Even under Section 5, Rule 113 of the Revised Rules on
Criminal Procedure11 the warrantless arrests effected by
President Arroyo's men are not justified. The above-
mentioned personalities cannot be considered "to have
committed, are actually committing, or are attempting to
commit an offense" at the time they were arrested without
warrants. None of them participated in the riot which took
place in the vicinity of the Malacañang Palace. Some of
them were in their respective houses performing innocent
acts. The sure fact is –– they were not in the presence of
Gen. Berroya. Clearly, he did not see whether they had
committed, were committing or were attempting to commit
the crime of rebellion.12 It bears mentioning that at the
time some of the suspected instigators were arrested, a
long interval of time already passed and hence, it cannot
be legally said that they had just committed an offense.
Neither can it be said that Gen. Berroya or any of his men
had "personal knowledge of facts or circumstances that
the persons to be arrested have committed a crime." That
would be far from reality.1awphil.net
The circumstances that arose from President Arroyo's
resort to the declaration of a "state of rebellion" to
suppress what she perceived as the May 1, 2001 rebellion
are the very evils that we should prevent from happening
again. This can only be done if we strike such unusual
measure as unconstitutional.
Significantly, while the Oakwood event ended peacefully
on the night of July 27, 2003, President Arroyo's
declaration of a "state of rebellion" continued until the
lifting thereof on August 1, 2003. This means that
although the alleged rebellion had ceased, the President's
declaration continued to be in effect. As it turned out,
several searches and seizures took place during the
extended period.
Generally, the power of the President in times of war,
invasion or rebellion and during other emergency
situations should be exercised jointly with Congress. This
is to insure the correctness and propriety of authorizing
our armed forces to quell such hostilities. Such collective
judgment is to be effected by "heightened consultation"
between the President and Congress. Thus, as can be
gleaned from the provisions of the Constitution, when the
President proclaims martial law or suspends the privilege
of the writ, he shall "submit a report in person or in writing
to the Congress. The Congress, voting jointly, by a vote
of at least a majority of all its Members in regular or
special session, may revoke such proclamation or
suspension, which revocation shall not be set aside by the
President." Not only that, Section 23, Article VI of the
Constitution provides that: "The Congress, by a vote of
two-thirds of both Houses in joint session assembled,
voting separately, shall have the sole power to declare the
existence of a state of war. In times of war or other
national emergency, the Congress may, by law, authorize
the President, for a limited period and subject to such
restrictions as it may prescribe, to exercise powers
necessary and proper to carry out a declared national
policy." Clearly, the Constitution has not extended
excessive authority in military, defense and emergency
matters to the President. Though the President is
designated as the Commander-in-Chief of all armed
forces of the Philippines, the textual reed does not suffice
to support limitless authority. Born by the nation's past
experiences, the concurrence of the Congress is required
as a measure to ward-off totalitarian rule. By declaring a
"state of rebellion," President Arroyo effectively
disregarded such concurrent power of Congress. At this
point, let it be stressed that the accumulation of both the
executive and legislative powers in the same hands
constitutes the very definition of tyranny.
By sustaining the unusual course taken by President
Arroyo, we are traversing a very dangerous path. We are
opening the way to those who, in the end, would turn our
democracy into a totalitarian rule. While it may not plunge
us straightway into dictatorship, however, it is a step
towards a wrong direction. History must not be allowed to
repeat itself. Any act which gears towards possible
dictatorship must be severed at its inception. As I have
stated in my previous dissent, our nation had seen the rise
of a dictator into power. As a matter of fact, the changes
made by the 1986 Constitutional Commission in the
martial law text of the Constitution were to a large extent
a reaction against the direction which this Court took
during the regime of President Marcos.13 In ruling that the
declaration of a "state of rebellion" is a prerogative of the
President, then, I say, our country is tracing the same
dangerous road of the past.
IV
The majority cited U.S. cases in support of their stand that
the President's proclamation of "state of rebellion" is in
accordance with the Constitutional provisions granting
her "powers as chief executive." I find that In re Debs14
and Prize Cases15 illustrate an executive power much
larger than is indicated by the rudimentary constitutional
provisions. Clearly, these cases cannot support the
majority's conclusion that: "The lesson to be learned from
the U.S. constitutional history is that the Commander-in-
Chief powers are broad enough as it is and become more
so when taken together with the provision on executive
power and the presidential oath of office. Thus, the
plenitude of the powers of the presidency equips the
occupant with the means to address exigencies or threats
which undermine the very existence of government or the
integrity of the State."
There are reasons why I find the above conclusion of the
majority naccurate. From a survey of U.S. jurisprudence,
the outstanding fact remains that every specific proposal
to confer uncontrollable power upon the President is
rejected.16 In re Debs,17 the U.S. Supreme Court
Decision upheld the power of President Grover Cleveland
to prevent the strike of railway workers on the ground that
it threatened interference with interstate commerce and
with the free flow of mail. The basic theory underlying this
case – that the President has inherent power to act for the
nation in cases of major public need – was eroded by the
Youngstown Sheet & Tube Co. vs. Sawyer, also known
as the Steel Seizure Case.18 This case aroused great
public interest, largely because of its important
implications concerning the boundaries of presidential
powers. The seven separate opinions consist of 128
pages in the Reports and contain a great deal of important
date on the powers of the Chief Executive. The same
case demonstrates well that executive powers, even
during an alleged emergency, may still be subject to
judicial control. The decision constitutes a "dramatic
vindication" of the American constitutional government.19
Mr. Justice Andrew Jackson, concurring in the judgment
and opinion of the Court, eloquently expounded on the
"executive" and "commander-in-chief" powers, thus:
71
"The Solicitor general seeks the power of seizure in three
clauses of the Executive Article, the first reading, 'The
executive Power shall be vested in a President of the
United States of America.' Lest I be thought to
exaggerate, I quote the interpretation which his brief puts
upon it: 'In our view, this clause constitutes a grant of all
the executive powers of which the Government is
capable.' If that be true, it is difficult to see why the
forefathers bothered to add several specific items,
including some trifling ones.
The example of such unlimited executive power that must
have most impressed the forefathers was the prerogative
exercised by George III, and the description of its evils in
the Declaration of Independence leads me to doubt that
they were creating their new Executive in his image.
Continental European examples were no more appealing.
And if we seek instruction from our own times, we can
match it only from the executive powers in those
governments were disparingly describe as totalitarian. I
cannot accept the view that this clause is a grant in bulk
of all conceivable executive powers but regard it as an
allocation to the presidential office of the generic powers
thereafter stated.
The clause on which the Government next relies is that
'The President shall be Commander in Chief of the Army
and Navy of the United States…' These cryptic words
have given rise to some of the most persistent
controversies in our constitutional history. Of course, they
imply something more than an empty title. But just what
authority goes with the name has plagued presidential
advisers who would not waive or narrow it by non-
assertion yet cannot say where it begins or ends.
xxxxxx
The third clause in which the Solicitor General finds
seizure powers is that 'he shall take care that the laws be
faithfully executed…' That authority must be matched
against words of the Fifth Amendment that 'No person
shall be…deprived of life, liberty or property, without due
process of law…' One gives a governmental authority that
reaches so far as there is law, the other gives a private
right that authority shall go no farther. These signify about
all there is of the principle that ours is a governmental of
laws, not of men, and that we submit ourselves to rulers
only if under rules."
Further, Mr. Justice Jackson referred to the discussion of
inherent executive powers as "loose and irresponsible
use of adjectives." His wrath could be seen as reserved
for those who use the word "inherent" to mean
"unlimited."20 Thus:
"The Solicitor General lastly grounds support of the
seizure upon nebulous, inherent powers never expressly
granted but said to have accrued to the office from the
customs and claims of preceding administrations. The
plea is for a resulting power to deal with a crisis or an
emergency according to the necessities of the case, the
unarticulated assumption being that necessity knows no
law.
Loose and irresponsible use of adjectives colors all non-
legal and much legal discussion of presidential powers.
'Inherent' powers, 'implied' powers, 'incidental' powers,
'plenary' powers, 'war' powers and 'emergency' powers
are used, often interchangeably and without fixed or
ascertainable meanings.
The vagueness and generality of the clauses that set forth
presidential powers afford a plausible basis for pressures
within and without an administration for presidential action
beyond that supported by those whose responsibility it is
to defend his actions in court. The claim of inherent and
unrestricted presidential powers has long been a
persuasive dialectical weapon in political controversy.
While it is not surprising that counsel should grasp
support from such unadjudicated claims of power, a judge
cannot accept self-serving press statements of the
attorney for one of the interested parties as authority in
answering a constitutional question, even if the advocate
was himself. But prudence has counseled that actual
reliance on such nebulous claims stop short of provoking
a judicial test…"
In re Debs also received a serious blow in United States
vs. United States District Court.21 The Supreme Court
Justices unanimously rejected the inherent executive
authority to engage in warrantless electronic surveillance
in domestic security cases. Thus, where a substantial
personal interest in life, liberty or property is threatened
by presidential action, In re Debs is regarded more as an
anachronism than authority.
In Prizes Cases, by a vote of 5 to 4, the U.S. Supreme
Court upheld President Abraham Lincoln's authority to
impose a blockade. Under the U.S. Constitution, only
Congress, empowered to declare a war, could impose a
blockade. It must be emphasized, however, that there is
a distinction between the role of the U.S. President in
domestic affairs and in foreign affairs. The patterns in the
foreign and domestic realms are quite different. The
federal regulation of domestic affairs has its constitutional
origins in the people and the states, and its initiation is
allocated primarily to Congress (not the Executive). The
constitutional role for the executive in domestic matters is
thus largely ancillary to that of Congress.22 Thus, while it
is recognized that executive power is predominant in
foreign affairs, it is not so in the domestic sphere. This
distinction should be considered in invoking U.S.
jurisprudence.
Clearly, the trail of U.S. jurisprudence does not support
the view that the "Executive and Commander-in-Chief
clauses" of the Constitution grant the President such
broad power as to give her the option of disregarding the
other restrictive provisions of the Constitution. The
purpose of the Constitution is not only to grant power, but
to keep it from getting out of hand. The policy should be –
– where the Constitution has laid down specific
procedures on how the President should deal with a crisis,
it is imperative that he must follow those procedures in
meeting the crisis. These procedures serve as limitations
to what would otherwise be an unbounded exercise of
power.
V
In fine, may I state that every presidential claim to a power
must be scrutinized with caution, for what is at stake is the
equilibrium established by our constitutional system. The
powers of the President are not as particularized as are
those of Congress. Enumerated powers do not include
undefined powers, as what the majority would want to
point out. I state once more that there is no provision in
our Constitution authorizing the President to declare "a
state of rebellion." Not even the constitutional powers
vested upon her include such power.
72
WHEREFORE, I vote to GRANT the petitions.
Proclamation No. 427 and General Order No. 4 are
declared UNCONSTITUTIONAL.

73
Republic of the Philippines
SUPREME COURT
EN BANC
G.R. No. 164978 October 13, 2005
AQUILINO Q. PIMENTEL, JR., EDGARDO J. ANGARA,
JUAN PONCE ENRILE, LUISA P. EJERCITO-
ESTRADA, JINGGOY E. ESTRADA, PANFILO M.
LACSON, ALFREDO S. LIM, JAMBY A.S. MADRIGAL,
and SERGIO R. OSMEÑA III, Petitioners
vs.
EXEC. SECRETARY EDUARDO R. ERMITA,
FLORENCIO B. ABAD, AVELINO J. CRUZ, JR.,
MICHAEL T. DEFENSOR, JOSEPH H. DURANO, RAUL
M. GONZALEZ, ALBERTO G. ROMULO, RENE C.
VILLA, and ARTHUR C. YAP, Respondents.
DECISION
CARPIO, J.:
The Case
This is a petition for certiorari and prohibition1 with a
prayer for the issuance of a writ of preliminary injunction
to declare unconstitutional the appointments issued by
President Gloria Macapagal-Arroyo ("President Arroyo")
through Executive Secretary Eduardo R. Ermita
("Secretary Ermita") to Florencio B. Abad, Avelino J. Cruz,
Jr., Michael T. Defensor, Joseph H. Durano, Raul M.
Gonzalez, Alberto G. Romulo, Rene C. Villa, and Arthur
C. Yap ("respondents") as acting secretaries of their
respective departments. The petition also seeks to
prohibit respondents from performing the duties of
department secretaries.
Antecedent Facts
The Senate and the House of Representatives
("Congress") commenced their regular session on 26 July
2004. The Commission on Appointments, composed of
Senators and Representatives, was constituted on 25
August 2004.
Meanwhile, President Arroyo issued appointments2 to
respondents as acting secretaries of their respective
departments.
The appointment papers are uniformly worded as follows:
Sir:
Pursuant to the provisions of existing laws, you are
hereby appointed ACTING SECRETARY,
DEPARTMENT OF (appropriate department) vice (name
of person replaced).
By virtue hereof, you may qualify and enter upon the
performance of the duties and functions of the office,
furnishing this Office and the Civil Service Commission
with copies of your Oath of Office.
(signed)
Gloria Arroyo
Respondents took their oath of office and assumed duties
as acting secretaries.
On 8 September 2004, Aquilino Q. Pimentel, Jr. ("Senator
Pimentel"), Edgardo J. Angara ("Senator Angara"), Juan
Ponce Enrile ("Senator Enrile"), Luisa P. Ejercito-Estrada
("Senator Ejercito-Estrada"), Jinggoy E. Estrada
("Senator Estrada"), Panfilo M. Lacson ("Senator
Lacson"), Alfredo S. Lim ("Senator Lim"), Jamby A.S.
Madrigal ("Senator Madrigal"), and Sergio R. Osmeña, III
("Senator Osmeña") ("petitioners") filed the present
petition as Senators of the Republic of the Philippines.
Congress adjourned on 22 September 2004. On 23
September 2004, President Arroyo issued ad interim
appointments3 to respondents as secretaries of the
departments to which they were previously appointed in
an acting capacity. The appointment papers are uniformly
worded as follows:
Sir:
Pursuant to the provisions of existing laws, you are
hereby appointed SECRETARY [AD INTERIM],
DEPARTMENT OF (appropriate department).
By virtue hereof, you may qualify and enter upon the
performance of the duties and functions of the office,
furnishing this Office and the Civil Service Commission
with copies of your oath of office.
(signed)
Gloria Arroyo
Issue
The petition questions the constitutionality of President
Arroyo’s appointment of respondents as acting
secretaries without the consent of the Commission on
Appointments while Congress is in session.
The Court’s Ruling
The petition has no merit.
Preliminary Matters
On the Mootness of the Petition
The Solicitor General argues that the petition is moot
because President Arroyo had extended to respondents
ad interim appointments on 23 September 2004
immediately after the recess of Congress.
As a rule, the writ of prohibition will not lie to enjoin acts
already done.4 However, as an exception to the rule on
mootness, courts will decide a question otherwise moot if
it is capable of repetition yet evading review.5
In the present case, the mootness of the petition does not
bar its resolution. The question of the constitutionality of
the President’s appointment of department secretaries in
an acting capacity while Congress is in session will arise
in every such appointment.
On the Nature of the Power to Appoint
The power to appoint is essentially executive in nature,
and the legislature may not interfere with the exercise of
74
this executive power except in those instances when the
Constitution expressly allows it to interfere.6 Limitations
on the executive power to appoint are construed strictly
against the legislature.7 The scope of the legislature’s
interference in the executive’s power to appoint is limited
to the power to prescribe the qualifications to an
appointive office. Congress cannot appoint a person to an
office in the guise of prescribing qualifications to that
office. Neither may Congress impose on the President the
duty to appoint any particular person to an office.8
However, even if the Commission on Appointments is
composed of members of Congress, the exercise of its
powers is executive and not legislative. The Commission
on Appointments does not legislate when it exercises its
power to give or withhold consent to presidential
appointments. Thus:
xxx The Commission on Appointments is a creature of the
Constitution. Although its membership is confined to
members of Congress, said Commission is independent
of Congress. The powers of the Commission do not come
from Congress, but emanate directly from the
Constitution. Hence, it is not an agent of Congress. In fact,
the functions of the Commissioner are purely executive in
nature. xxx9
On Petitioners’ Standing
The Solicitor General states that the present petition is a
quo warranto proceeding because, with the exception of
Secretary Ermita, petitioners effectively seek to oust
respondents for unlawfully exercising the powers of
department secretaries. The Solicitor General further
states that petitioners may not claim standing as Senators
because no power of the Commission on Appointments
has been "infringed upon or violated by the President. xxx
If at all, the Commission on Appointments as a body
(rather than individual members of the Congress) may
possess standing in this case."10
Petitioners, on the other hand, state that the Court can
exercise its certiorari jurisdiction over unconstitutional
acts of the President.11 Petitioners further contend that
they possess standing because President Arroyo’s
appointment of department secretaries in an acting
capacity while Congress is in session impairs the powers
of Congress. Petitioners cite Sanlakas v. Executive
Secretary12 as basis, thus:
To the extent that the powers of Congress are impaired,
so is the power of each member thereof, since his office
confers a right to participate in the exercise of the powers
of that institution.
An act of the Executive which injures the institution of
Congress causes a derivative but nonetheless substantial
injury, which can be questioned by a member of
Congress. In such a case, any member of Congress can
have a resort to the courts.
Considering the independence of the Commission on
Appointments from Congress, it is error for petitioners to
claim standing in the present case as members of
Congress. President Arroyo’s issuance of acting
appointments while Congress is in session impairs no
power of Congress. Among the petitioners, only the
following are members of the Commission on
Appointments of the 13th Congress: Senator Enrile as
Minority Floor Leader, Senator Lacson as Assistant
Minority Floor Leader, and Senator Angara, Senator
Ejercito-Estrada, and Senator Osmeña as members.
Thus, on the impairment of the prerogatives of members
of the Commission on Appointments, only Senators
Enrile, Lacson, Angara, Ejercito-Estrada, and Osmeña
have standing in the present petition. This is in contrast to
Senators Pimentel, Estrada, Lim, and Madrigal, who,
though vigilant in protecting their perceived prerogatives
as members of Congress, possess no standing in the
present petition.
The Constitutionality of President Arroyo’s Issuance
of Appointments to Respondents as Acting Secretaries
Petitioners contend that President Arroyo should not have
appointed respondents as acting secretaries because "in
case of a vacancy in the Office of a Secretary, it is only an
Undersecretary who can be designated as Acting
Secretary."13 Petitioners base their argument on Section
10, Chapter 2, Book IV of Executive Order No. 292 ("EO
292"),14 which enumerates the powers and duties of the
undersecretary. Paragraph 5 of Section 10 reads:
SEC. 10. Powers and Duties of the Undersecretary. - The
Undersecretary shall:
xxx
(5) Temporarily discharge the duties of the Secretary in
the latter’s absence or inability to discharge his duties for
any cause or in case of vacancy of the said office, unless
otherwise provided by law. Where there are more than
one Undersecretary, the Secretary shall allocate the
foregoing powers and duties among them. The President
shall likewise make the temporary designation of Acting
Secretary from among them; and
xxx
Petitioners further assert that "while Congress is in
session, there can be no appointments, whether regular
or acting, to a vacant position of an office needing
confirmation by the Commission on Appointments,
without first having obtained its consent."15
In sharp contrast, respondents maintain that the President
can issue appointments in an acting capacity to
department secretaries without the consent of the
Commission on Appointments even while Congress is in
session. Respondents point to Section 16, Article VII of
the 1987 Constitution. Section 16 reads:
SEC. 16. The President shall nominate and, with the
consent of the Commission on Appointments, appoint the
heads of the executive departments, ambassadors, other
public ministers and consuls, or officers of the armed
forces from the rank of colonel or naval captain, and other
officers whose appointments are vested in him in this
Constitution. He shall also appoint all other officers of the
Government whose appointments are not otherwise
provided for by law, and those whom he may be
authorized by law to appoint. The Congress may, by law,
vest the appointment of other officers lower in rank in the
President alone, in the courts, or in the heads of
departments, agencies, commissions, or boards.
The President shall have the power to make
appointments during the recess of the Congress, whether
voluntary or compulsory, but such appointments shall be
effective only until disapproval by the Commission on
Appointments or until the next adjournment of the
Congress.
75

Respondents also rely on EO 292, which devotes a
chapter to the President’s power of appointment. Sections
16 and 17, Chapter 5, Title I, Book III of EO 292 read:
SEC. 16. Power of Appointment. — The President shall
exercise the power to appoint such officials as provided
for in the Constitution and laws.
SEC. 17. Power to Issue Temporary Designation. — (1)
The President may temporarily designate an officer
already in the government service or any other competent
person to perform the functions of an office in the
executive branch, appointment to which is vested in him
by law, when: (a) the officer regularly appointed to the
office is unable to perform his duties by reason of illness,
absence or any other cause; or (b) there exists a
vacancy[.]
(2) The person designated shall receive the
compensation attached to the position, unless he is
already in the government service in which case he shall
receive only such additional compensation as, with his
existing salary, shall not exceed the salary authorized by
law for the position filled. The compensation hereby
authorized shall be paid out of the funds appropriated for
the office or agency concerned.
(3) In no case shall a temporary designation exceed one
(1) year. (Emphasis supplied)
Petitioners and respondents maintain two diametrically
opposed lines of thought. Petitioners assert that the
President cannot issue appointments in an acting
capacity to department secretaries while Congress is in
session because the law does not give the President such
power. In contrast, respondents insist that the President
can issue such appointments because no law prohibits
such appointments.
The essence of an appointment in an acting capacity is its
temporary nature. It is a stop-gap measure intended to fill
an office for a limited time until the appointment of a
permanent occupant to the office.16 In case of vacancy in
an office occupied by an alter ego of the President, such
as the office of a department secretary, the President
must necessarily appoint an alter ego of her choice as
acting secretary before the permanent appointee of her
choice could assume office.
Congress, through a law, cannot impose on the President
the obligation to appoint automatically the undersecretary
as her temporary alter ego. An alter ego, whether
temporary or permanent, holds a position of great trust
and confidence. Congress, in the guise of prescribing
qualifications to an office, cannot impose on the President
who her alter ego should be.
The office of a department secretary may become vacant
while Congress is in session. Since a department
secretary is the alter ego of the President, the acting
appointee to the office must necessarily have the
President’s confidence. Thus, by the very nature of the
office of a department secretary, the President must
appoint in an acting capacity a person of her choice even
while Congress is in session. That person may or may not
be the permanent appointee, but practical reasons may
make it expedient that the acting appointee will also be
the permanent appointee.
The law expressly allows the President to make such
acting appointment. Section 17, Chapter 5, Title I, Book
III of EO 292 states that "[t]he President may temporarily
designate an officer already in the government service or
any other competent person to perform the functions of
an office in the executive branch." Thus, the President
may even appoint in an acting capacity a person not yet
in the government service, as long as the President
deems that person competent.
Petitioners assert that Section 17 does not apply to
appointments vested in the President by the Constitution,
because it only applies to appointments vested in the
President by law. Petitioners forget that Congress is not
the only source of law. "Law" refers to the Constitution,
statutes or acts of Congress, municipal ordinances,
implementing rules issued pursuant to law, and judicial
decisions.17
Finally, petitioners claim that the issuance of
appointments in an acting capacity is susceptible to
abuse. Petitioners fail to consider that acting
appointments cannot exceed one year as expressly
provided in Section 17(3), Chapter 5, Title I, Book III of
EO 292. The law has incorporated this safeguard to
prevent abuses, like the use of acting appointments as a
way to circumvent confirmation by the Commission on
Appointments.
In distinguishing ad interim appointments from
appointments in an acting capacity, a noted textbook
writer on constitutional law has observed:
Ad-interim appointments must be distinguished from
appointments in an acting capacity. Both of them are
effective upon acceptance. But ad-interim appointments
are extended only during a recess of Congress, whereas
acting appointments may be extended any time there is a
vacancy. Moreover ad-interim appointments are
submitted to the Commission on Appointments for
confirmation or rejection; acting appointments are not
submitted to the Commission on Appointments. Acting
appointments are a way of temporarily filling important
offices but, if abused, they can also be a way of
circumventing the need for confirmation by the
Commission on Appointments.18
However, we find no abuse in the present case. The
absence of abuse is readily apparent from President
Arroyo’s issuance of ad interim appointments to
respondents immediately upon the recess of Congress,
way before the lapse of one year.
WHEREFORE, we DISMISS the present petition for
certiorari and prohibition.
SO ORDERED.
ANTONIO T. CARPIO
Associate Justice
76
PROPER PARTY
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 96541 August 24, 1993
DEAN JOSE JOYA, CARMEN GUERRERO NAKPIL,
ARMIDA SIGUION REYNA, PROF. RICARTE M.
PURUGANAN, IRMA POTENCIANO, ADRIAN
CRISTOBAL, INGRID SANTAMARIA, CORAZON FIEL,
AMBASSADOR E. AGUILAR CRUZ, FLORENCIO R.
JACELA, JR., MAURO MALANG, FEDERICO AGUILAR
ALCUAZ, LUCRECIA R. URTULA, SUSANO
GONZALES, STEVE SANTOS, EPHRAIM SAMSON,
SOLER SANTOS, ANG KIU KOK, KERIMA POLOTAN,
LUCRECIA KASILAG, LIGAYA DAVID PEREZ,
VIRGILIO ALMARIO, LIWAYWAY A. ARCEO, CHARITO
PLANAS, HELENA BENITEZ, ANNA MARIA L.
HARPER, ROSALINDA OROSA, SUSAN CALO
MEDINA, PATRICIA RUIZ, BONNIE RUIZ, NELSON
NAVARRO, MANDY NAVASERO, ROMEO SALVADOR,
JOSEPHINE DARANG, and PAZ VETO PLANAS,
petitioners,
vs.
PRESIDENTIAL COMMISSION ON GOOD
GOVERNMENT (PCGG), CATALINO MACARAIG, JR.,
in his official capacity, and/or the Executive Secretary,
and CHAIRMAN MATEO A.T. CAPARAS, respondents.
M.M. Lazaro & Associates for petitioners.
The Solicitor General for respondents.
BELLOSILLO, J.:
All thirty-five (35) petitioners in this Special Civil Action for
Prohibition and Mandamus with Prayer for Preliminary
Injunction and/or Restraining Order seek to enjoin the
Presidential Commission on Good Government (PCGG)
from proceeding with the auction sale scheduled on 11
January 1991 by Christie's of New York of the Old
Masters Paintings and 18th and 19th century silverware
seized from Malacañang and the Metropolitan Museum of
Manila and placed in the custody of the Central Bank.
The antecedents: On 9 August 1990, Mateo A.T.
Caparas, then Chairman of PCGG, wrote then President
Corazon C. Aquino, requesting her for authority to sign
the proposed Consignment Agreement between the
Republic of the Philippines through PCGG and Christie,
Manson and Woods International, Inc. (Christie's of New
York, or CHRISTIE'S) concerning the scheduled sale on
11 January 1991 of eighty-two (82) Old Masters Paintings
and antique silverware seized from Malacañang and the
Metropolitan Museum of Manila alleged to be part of the
ill-gotten wealth of the late President Marcos, his relatives
and cronies.
On 14 August 1990, then President Aquino, through
former Executive Secretary Catalino Macaraig, Jr.,
authorized Chairman Caparas to sign the Consignment
Agreement allowing Christie's of New York to auction off
the subject art pieces for and in behalf of the Republic of
the Philippines.
On 15 August 1990, PCGG, through Chairman Caparas,
representing the Government of the Republic of the
Philippines, signed the Consignment Agreement with
Christie's of New York. According to the agreement,
PCGG shall consign to CHRISTIE'S for sale at public
auction the eighty-two (82) Old Masters Paintings then
found at the Metropolitan Museum of Manila as well as
the silverware contained in seventy-one (71) cartons in
the custody of the Central Bank of the Philippines, and
such other property as may subsequently be identified by
PCGG and accepted by CHRISTIE'S to be subject to the
provisions of the agreement.1
On 26 October 1990, the Commission on Audit (COA)
through then Chairman Eufemio C. Domingo submitted to
President Aquino the audit findings and observations of
COA on the Consignment Agreement of 15 August 1990
to the effect that: (a) the authority of former PCGG
Chairman Caparas to enter into the Consignment
Agreement was of doubtful legality; (b) the contract was
highly disadvantageous to the government; (c) PCGG had
a poor track record in asset disposal by auction in the
U.S.; and, (d) the assets subject of auction were historical
relics and had cultural significance, hence, their disposal
was prohibited by law. 2
On 15 November 1990, PCGG through its new Chairman
David M. Castro, wrote President Aquino defending the
Consignment Agreement and refuting the allegations of
COA Chairman Domingo.3 On the same date, Director of
National Museum Gabriel S. Casal issued a certification
that the items subject of the Consignment Agreement did
not fall within the classification of protected cultural
properties and did not specifically qualify as part of the
Filipino cultural heritage.4 Hence, this petition originally
filed on 7 January 1991 by Dean Jose Joya, Carmen
Guerrero Nakpil, Armida Siguion Reyna, Prof. Ricarte M.
Puruganan, Irma Potenciano, Adrian Cristobal, Ingrid
Santamaria, Corazon Fiel, Ambassador E. Aguilar Cruz,
Florencio R. Jacela, Jr., Mauro Malang, Federico Aguilar
Alcuaz, Lucrecia R. Urtula, Susano Gonzales, Steve
Santos, Ephraim Samson, Soler Santos, Ang Kiu Kok,
Kerima Polotan, Lucrecia Kasilag, Ligaya David Perez,
Virgilio Almario and Liwayway A. Arceo.
After the oral arguments of the parties on 9 January 1991,
we issued immediately our resolution denying the
application for preliminary injunction to restrain the
scheduled sale of the artworks on the ground that
petitioners had not presented a clear legal right to a
restraining order and that proper parties had not been
impleaded.
On 11 January 1991, the sale at public auction proceeded
as scheduled and the proceeds of $13,302,604.86 were
turned over to the Bureau of Treasury.5
On 5 February 1991, on motion of petitioners, the
following were joined as additional petitioners: Charito
Planas, Helena Benitez, Ana Maria L. Harper, Rosalinda
Orosa, Susan Carlo Medina, Patricia Ruiz, Bonnie Ruiz,
Nelson Navarro, Mandy Navasero, Romeo Salvador,
Josephine Darang and Paz Veto Planas.
On the other hand, Catalino Macaraig, Jr., in his capacity
as former Executive Secretary, the incumbent Executive
Secretary, and Chairman Mateo A.T. Caparas were
impleaded as additional respondents.
Petitioners raise the following issues: (a) whether
petitioners have legal standing to file the instant petition;
(b) whether the Old Masters Paintings and antique
77
silverware are embraced in the phrase "cultural treasure
of the nation" which is under the protection of the state
pursuant to the 1987 Constitution and/or "cultural
properties" contemplated under R.A. 4846, otherwise
known as "The Cultural Properties Preservation and
Protection Act;" (c) whether the paintings and silverware
are properties of public dominion on which can be
disposed of through the joint concurrence of the President
and Congress;
(d) whether respondent, PCGG has the jurisdiction and
authority to enter into an agreement with Christie's of New
York for the sale of the artworks; (e) whether, PCGG has
complied with the due process clause and other statutory
requirements for the exportation and sale of the subject
items; and, (f) whether the petition has become moot and
academic, and if so, whether the above issues warrant
resolution from this Court.
The issues being interrelated, they will be discussed
jointly hereunder. However, before proceeding, we wish
to emphasize that we admire and commend petitioners'
zealous concern to keep and preserve within the country
great works of art by well-known old masters. Indeed, the
value of art cannot be gainsaid. For, by serving as a
creative medium through which man can express his
innermost thoughts and unbridled emotions while, at the
same time, reflecting his deep-seated ideals, art has
become a true expression of beauty, joy, and life itself.
Such artistic creations give us insights into the artists'
cultural heritage — the historic past of the nation and the
era to which they belong — in their triumphant, glorious,
as well as troubled and turbulent years. It must be for this
reason that the framers of the 1987 Constitution
mandated in Art. XIV, Sec. 14, that is the solemn duty of
the state to "foster the preservation, enrichment, and
dynamic evolution of a Filipino national culture based on
the principle of unity in diversity in a climate of free artistic
and intellectual expression." And, in urging this Court to
grant their petition, petitioners invoke this policy of the
state on the protection of the arts.
But, the altruistic and noble purpose of the petition
notwithstanding, there is that basic legal question which
must first be resolved: whether the instant petition
complies with the legal requisites for this Court to exercise
its power of judicial review over this case.
The rule is settled that no question involving the
constitutionality or validity of a law or governmental act
may be heard and decided by the court unless there is
compliance with the legal requisites for judicial inquiry,
namely: that the question must be raised by the proper
party; that there must be an actual case or controversy;
that the question must be raised at the earliest possible
opportunity; and, that the decision on the constitutional or
legal question must be necessary to the determination of
the case itself.6 But the most important are the first two
(2) requisites.
On the first requisite, we have held that one having no
right or interest to protect cannot invoke the jurisdiction of
the court as party-plaintiff in an
action.7 This is premised on Sec. 2, Rule 3, of the Rules
of Court which provides that every action must be
prosecuted and defended in the name of the real party-in-
interest, and that all persons having interest in the subject
of the action and in obtaining the relief demanded shall be
joined as plaintiffs. The Court will exercise its power of
judicial review only if the case is brought before it by a
party who has the legal standing to raise the constitutional
or legal question. "Legal standing" means a personal and
substantial interest in the case such that the party has
sustained or will sustain direct injury as a result of the
governmental act that is being challenged. The term
"interest" is material interest, an interest in issue and to
be affected by the decree, as distinguished from mere
interest in the question involved, or a mere incidental
interest.8 Moreover, the interest of the party plaintiff must
be personal and not one based on a desire to vindicate
the constitutional right of some third and related party. 9
There are certain instances however when this Court has
allowed exceptions to the rule on legal standing, as when
a citizen brings a case for mandamus to procure the
enforcement of a public duty for the fulfillment of a public
right recognized by the Constitution, 10 and when a
taxpayer questions the validity of a governmental act
authorizing the disbursement of public funds. 11
Petitioners claim that as Filipino citizens, taxpayers and
artists deeply concerned with the preservation and
protection of the country's artistic wealth, they have the
legal personality to restrain respondents Executive
Secretary and PCGG from acting contrary to their public
duty to conserve the artistic creations as mandated by the
1987 Constitution, particularly Art. XIV, Secs. 14 to 18, on
Arts and Culture, and R.A. 4846 known as "The Cultural
Properties Preservation and Protection Act," governing
the preservation and disposition of national and important
cultural properties. Petitioners also anchor their case on
the premise that the paintings and silverware are public
properties collectively owned by them and by the people
in general to view and enjoy as great works of art. They
allege that with the unauthorized act of PCGG in selling
the art pieces, petitioners have been deprived of their right
to public property without due process of law in violation
of the Constitution. 12
Petitioners' arguments are devoid of merit. They lack
basis in fact and in law. They themselves allege that the
paintings were donated by private persons from different
parts of the world to the Metropolitan Museum of Manila
Foundation, which is a non-profit and non-stock
corporations established to promote non-Philippine arts.
The foundation's chairman was former First Lady Imelda
R. Marcos, while its president was Bienvenido R.
Tantoco. On this basis, the ownership of these paintings
legally belongs to the foundation or corporation or the
members thereof, although the public has been given the
opportunity to view and appreciate these paintings when
they were placed on exhibit.
Similarly, as alleged in the petition, the pieces of antique
silverware were given to the Marcos couple as gifts from
friends and dignitaries from foreign countries on their
silver wedding and anniversary, an occasion personal to
them. When the Marcos administration was toppled by the
revolutionary government, these paintings and silverware
were taken from Malacañang and the Metropolitan
Museum of Manila and transferred to the Central Bank
Museum. The confiscation of these properties by the
Aquino administration however should not be understood
to mean that the ownership of these paintings has
automatically passed on the government without
complying with constitutional and statutory requirements
of due process and just compensation. If these properties
were already acquired by the government, any
constitutional or statutory defect in their acquisition and
their subsequent disposition must be raised only by the
proper parties — the true owners thereof — whose
authority to recover emanates from their proprietary rights
which are protected by statutes and the Constitution.
Having failed to show that they are the legal owners of the
artworks or that the valued pieces have become publicly
78
owned, petitioners do not possess any clear legal right
whatsoever to question their alleged unauthorized
disposition.
Further, although this action is also one of mandamus
filed by concerned citizens, it does not fulfill the criteria for
a mandamus suit. In Legaspi v. Civil Service Commission,
13 this Court laid down the rule that a writ of mandamus
may be issued to a citizen only when the public right to be
enforced and the concomitant duty of the state are
unequivocably set forth in the Constitution. In the case at
bar, petitioners are not after the fulfillment of a positive
duty required of respondent officials under the 1987
Constitution. What they seek is the enjoining of an official
act because it is constitutionally infirmed. Moreover,
petitioners' claim for the continued enjoyment and
appreciation by the public of the artworks is at most a
privilege and is unenforceable as a constitutional right in
this action for mandamus.
Neither can this petition be allowed as a taxpayer's suit.
Not every action filed by a taxpayer can qualify to
challenge the legality of official acts done by the
government. A taxpayer's suit can prosper only if the
governmental acts being questioned involve
disbursement of public funds upon the theory that the
expenditure of public funds by an officer of the state for
the purpose of administering an unconstitutional act
constitutes a misapplication of such funds, which may be
enjoined at the request of a taxpayer. 14 Obviously,
petitioners are not challenging any expenditure involving
public funds but the disposition of what they allege to be
public properties. It is worthy to note that petitioners admit
that the paintings and antique silverware were acquired
from private sources and not with public money.
Anent the second requisite of actual controversy,
petitioners argue that this case should be resolved by this
Court as an exception to the rule on moot and academic
cases; that although the sale of the paintings and silver
has long been consummated and the possibility of
retrieving the treasure trove is nil, yet the novelty and
importance of the issues raised by the petition deserve
this Court's attention. They submit that the resolution by
the Court of the issues in this case will establish future
guiding principles and doctrines on the preservation of the
nation's priceless artistic and cultural possessions for the
benefit of the public as a whole. 15
For a court to exercise its power of adjudication, there
must be an actual case of controversy — one which
involves a conflict of legal rights, an assertion of opposite
legal claims susceptible of judicial resolution; the case
must not be moot or academic or based on extra-legal or
other similar considerations not cognizable by a court of
justice. 16 A case becomes moot and academic when its
purpose has become stale, 17 such as the case before
us. Since the purpose of this petition for prohibition is to
enjoin respondent public officials from holding the auction
sale of the artworks on a particular date — 11 January
1991 — which is long past, the issues raised in the petition
have become moot and academic.
At this point, however, we need to emphasize that this
Court has the discretion to take cognizance of a suit which
does not satisfy the requirements of an actual case or
legal standing when paramount public interest is involved.
18 We find however that there is no such justification in
the petition at bar to warrant the relaxation of the rule.
Section 2 of R.A. 4846, as amended by P.D. 374,
declares it to be the policy of the state to preserve and
protect the important cultural properties and national
cultural treasures of the nation and to safeguard their
intrinsic value. As to what kind of artistic and cultural
properties are considered by the State as involving public
interest which should therefore be protected, the answer
can be gleaned from reading of the reasons behind the
enactment of R.A. 4846:
WHEREAS, the National Museum has the difficult task,
under existing laws and regulations, of preserving and
protecting the cultural properties of the nation;
WHEREAS, inumerable sites all over the country have
since been excavated for cultural relics, which have
passed on to private hands, representing priceless
cultural treasure that properly belongs to the Filipino
people as their heritage;
WHEREAS, it is perhaps impossible now to find an area
in the Philippines, whether government or private
property, which has not been disturbed by commercially-
minded diggers and collectors, literally destroying part of
our historic past;
WHEREAS, because of this the Philippines has been
charged as incapable of preserving and protecting her
cultural legacies;
WHEREAS, the commercialization of Philippine relics
from the contact period, the Neolithic Age, and the
Paleolithic Age, has reached a point perilously placing
beyond reach of savants the study and reconstruction of
Philippine prehistory; and
WHEREAS, it is believed that more stringent regulation
on movement and a limited form of registration of
important cultural properties and of designated national
cultural treasures is necessary, and that regardless of the
item, any cultural property exported or sold locally must
be registered with the National Museum to control the
deplorable situation regarding our national cultural
properties and to implement the Cultural Properties Law
(emphasis supplied).
Clearly, the cultural properties of the nation which shall be
under the protection of the state are classified as the
"important cultural properties" and the "national cultural
treasures." "Important cultural properties" are cultural
properties which have been singled out from among the
innumerable cultural properties as having exceptional
historical cultural significance to the Philippines but are
not sufficiently outstanding to merit the classification of
national cultural treasures. 19 On the other hand, a
"national cultural treasures" is a unique object found
locally, possessing outstanding historical, cultural, artistic
and/or scientific value which is highly significant and
important to this country and nation. 20 This Court takes
note of the certification issued by the Director of the
Museum that the Italian paintings and silverware subject
of this petition do not constitute protected cultural
properties and are not among those listed in the Cultural
Properties Register of the National Museum.
We agree with the certification of the Director of the
Museum. Under the law, it is the Director of the Museum
who is authorized to undertake the inventory, registration,
designation or classification, with the aid of competent
experts, of important cultural properties and national
cultural treasures. 21 Findings of administrative officials
and agencies who have acquired expertise because their
jurisdiction is confined to specific matters are generally
accorded not only respect but at times even finality if such
79
findings are supported by substantial evidence and are
controlling on the reviewing authorities because of their
acknowledged expertise in the fields of specialization to
which they are assigned. 22

In view of the foregoing, this Court finds no compelling

reason to grant the petition. Petitioners have failed to
show that respondents Executive Secretary and PCGG
exercised their functions with grave abuse of discretion or
in excess of their jurisdiction.

WHEREFORE, for lack of merit, the petition for prohibition

and mandamus is DISMISSED.

SO ORDERED.

Narvasa, C.J., Cruz, Feliciano, Padilla, Bidin, Griño-

Aquino, Regalado, Davide, Jr., Romero, Nocon, Melo,
Quiason, Puno and Vitug, JJ., concur.

80
EN BANC
G.R. No. 155001 May 5, 2003
DEMOSTHENES P. AGAN, JR., JOSEPH B. CATAHAN,
JOSE MARI B. REUNILLA, MANUEL ANTONIO B.
BOÑE, MAMERTO S. CLARA, REUEL E. DIMALANTA,
MORY V. DOMALAON, CONRADO G. DIMAANO,
LOLITA R. HIZON, REMEDIOS P. ADOLFO,
BIENVENIDO C. HILARIO, MIASCOR WORKERS
UNION - NATIONAL LABOR UNION (MWU-NLU), and
PHILIPPINE AIRLINES EMPLOYEES ASSOCIATION
(PALEA), petitioners,
vs.
PHILIPPINE INTERNATIONAL AIR TERMINALS CO.,
INC., MANILA INTERNATIONAL AIRPORT
AUTHORITY, DEPARTMENT OF TRANSPORTATION
AND COMMUNICATIONS and SECRETARY LEANDRO
M. MENDOZA, in his capacity as Head of the Department
of Transportation and Communications, respondents,
MIASCOR GROUNDHANDLING CORPORATION,
DNATA-WINGS AVIATION SYSTEMS CORPORATION,
MACROASIA-EUREST SERVICES, INC., MACROASIA-
MENZIES AIRPORT SERVICES CORPORATION,
MIASCOR CATERING SERVICES CORPORATION,
MIASCOR AIRCRAFT MAINTENANCE
CORPORATION, and MIASCOR LOGISTICS
CORPORATION, petitioners-in-intervention,
x---------------------------------------------------------x
G.R. No. 155547 May 5, 2003
SALACNIB F. BATERINA, CLAVEL A. MARTINEZ and
CONSTANTINO G. JARAULA, petitioners,
vs.
PHILIPPINE INTERNATIONAL AIR TERMINALS CO.,
INC., MANILA INTERNATIONAL AIRPORT
AUTHORITY, DEPARTMENT OF TRANSPORTATION
AND COMMUNICATIONS, DEPARTMENT OF PUBLIC
WORKS AND HIGHWAYS, SECRETARY LEANDRO M.
MENDOZA, in his capacity as Head of the Department of
Transportation and Communications, and SECRETARY
SIMEON A. DATUMANONG, in his capacity as Head of
the Department of Public Works and Highways,
respondents,
JACINTO V. PARAS, RAFAEL P. NANTES, EDUARDO
C. ZIALCITA, WILLY BUYSON VILLARAMA,
PROSPERO C. NOGRALES, PROSPERO A. PICHAY,
JR., HARLIN CAST ABAYON, and BENASING O.
MACARANBON, respondents-intervenors,
x---------------------------------------------------------x
G.R. No. 155661 May 5, 2003
CEFERINO C. LOPEZ, RAMON M. SALES, ALFREDO
B. VALENCIA, MA. TERESA V. GAERLAN, LEONARDO
DE LA ROSA, DINA C. DE LEON, VIRGIE CATAMIN
RONALD SCHLOBOM, ANGELITO SANTOS, MA.
LUISA M. PALCON and SAMAHANG MANGGAGAWA
SA PALIPARAN NG PILIPINAS (SMPP), petitioners,
vs.
PHILIPPINE INTERNATIONAL AIR TERMINALS CO.,
INC., MANILA INTERNATIONAL AIRPORT
AUTHORITY, DEPARTMENT OF TRANSPORTATION
AND COMMUNICATIONS, SECRETARY LEANDRO M.
MENDOZA, in his capacity as Head of the Department of
Transportation and Communications, respondents.
PUNO, J.:
Petitioners and petitioners-in-intervention filed the instant
petitions for prohibition under Rule 65 of the Revised
Rules of Court seeking to prohibit the Manila International
Airport Authority (MIAA) and the Department of
Transportation and Communications (DOTC) and its
Secretary from implementing the following agreements
executed by the Philippine Government through the
DOTC and the MIAA and the Philippine International Air
Terminals Co., Inc. (PIATCO): (1) the Concession
Agreement signed on July 12, 1997, (2) the Amended and
Restated Concession Agreement dated November 26,
1999, (3) the First Supplement to the Amended and
Restated Concession Agreement dated August 27, 1999,
(4) the Second Supplement to the Amended and Restated
Concession Agreement dated September 4, 2000, and (5)
the Third Supplement to the Amended and Restated
Concession Agreement dated June 22, 2001 (collectively,
the PIATCO Contracts).
The facts are as follows:
In August 1989, the DOTC engaged the services of
Aeroport de Paris (ADP) to conduct a comprehensive
study of the Ninoy Aquino International Airport (NAIA) and
determine whether the present airport can cope with the
traffic development up to the year 2010. The study
consisted of two parts: first, traffic forecasts, capacity of
existing facilities, NAIA future requirements, proposed
master plans and development plans; and second,
presentation of the preliminary design of the passenger
terminal building. The ADP submitted a Draft Final Report
to the DOTC in December 1989.
Some time in 1993, six business leaders consisting of
John Gokongwei, Andrew Gotianun, Henry Sy, Sr., Lucio
Tan, George Ty and Alfonso Yuchengco met with then
President Fidel V. Ramos to explore the possibility of
investing in the construction and operation of a new
international airport terminal. To signify their commitment
to pursue the project, they formed the Asia's Emerging
Dragon Corp. (AEDC) which was registered with the
Securities and Exchange Commission (SEC) on
September 15, 1993.
On October 5, 1994, AEDC submitted an unsolicited
proposal to the Government through the DOTC/MIAA for
the development of NAIA International Passenger
Terminal III (NAIA IPT III) under a build-operate-and-
transfer arrangement pursuant to RA 6957 as amended
by RA 7718 (BOT Law).1
On December 2, 1994, the DOTC issued Dept. Order No.
94-832 constituting the Prequalification Bids and Awards
Committee (PBAC) for the implementation of the NAIA
IPT III project.
On March 27, 1995, then DOTC Secretary Jose Garcia
endorsed the proposal of AEDC to the National Economic
and Development Authority (NEDA). A revised proposal,
however, was forwarded by the DOTC to NEDA on
December 13, 1995. On January 5, 1996, the NEDA
Investment Coordinating Council (NEDA ICC) – Technical
Board favorably endorsed the project to the ICC – Cabinet
Committee which approved the same, subject to certain
conditions, on January 19, 1996. On February 13, 1996,
the NEDA passed Board Resolution No. 2 which
approved the NAIA IPT III project.
On June 7, 14, and 21, 1996, DOTC/MIAA caused the
publication in two daily newspapers of an invitation for
competitive or comparative proposals on AEDC's
unsolicited proposal, in accordance with Sec. 4-A of RA
81
6957, as amended. The alternative bidders were required
to submit three (3) sealed envelopes on or before 5:00
p.m. of September 20, 1996. The first envelope should
contain the Prequalification Documents, the second
envelope the Technical Proposal, and the third envelope
the Financial Proposal of the proponent.
On June 20, 1996, PBAC Bulletin No. 1 was issued,
postponing the availment of the Bid Documents and the
submission of the comparative bid proposals. Interested
firms were permitted to obtain the Request for Proposal
Documents beginning June 28, 1996, upon submission of
a written application and payment of a non-refundable fee
of P50,000.00 (US$2,000).
The Bid Documents issued by the PBAC provided among
others that the proponent must have adequate capability
to sustain the financing requirement for the detailed
engineering, design, construction, operation, and
maintenance phases of the project. The proponent would
be evaluated based on its ability to provide a minimum
amount of equity to the project, and its capacity to secure
external financing for the project.
On July 23, 1996, the PBAC issued PBAC Bulletin No. 2
inviting all bidders to a pre-bid conference on July 29,
1996.
On August 16, 1996, the PBAC issued PBAC Bulletin No.
3 amending the Bid Documents. The following
amendments were made on the Bid Documents:
a. Aside from the fixed Annual Guaranteed Payment, the
proponent shall include in its financial proposal an
additional percentage of gross revenue share of the
Government, as follows:
i. First 5 years
5.0%
ii. Next 10 years
7.5%
iii. Next 10 years
10.0%
b. The amount of the fixed Annual Guaranteed Payment
shall be subject of the price challenge. Proponent may
offer an Annual Guaranteed Payment which need not be
of equal amount, but payment of which shall start upon
site possession.
c. The project proponent must have adequate capability
to sustain the financing requirement for the detailed
engineering, design, construction, and/or operation and
maintenance phases of the project as the case may be.
For purposes of pre-qualification, this capability shall be
measured in terms of:
i. Proof of the availability of the project proponent and/or
the consortium to provide the minimum amount of equity
for the project; and
ii. a letter testimonial from reputable banks attesting that
the project proponent and/or the members of the
consortium are banking with them, that the project
proponent and/or the members are of good financial
standing, and have adequate resources.
d. The basis for the prequalification shall be the
proponent's compliance with the minimum technical and
financial requirements provided in the Bid Documents and
the IRR of the BOT Law. The minimum amount of equity
shall be 30% of the Project Cost.
e. Amendments to the draft Concession Agreement shall
be issued from time to time. Said amendments shall only
cover items that would not materially affect the
preparation of the proponent's proposal.
On August 29, 1996, the Second Pre-Bid Conference was
held where certain clarifications were made. Upon the
request of prospective bidder People's Air Cargo &
Warehousing Co., Inc (Paircargo), the PBAC warranted
that based on Sec. 11.6, Rule 11 of the Implementing
Rules and Regulations of the BOT Law, only the proposed
Annual Guaranteed Payment submitted by the
challengers would be revealed to AEDC, and that the
challengers' technical and financial proposals would
remain confidential. The PBAC also clarified that the list
of revenue sources contained in Annex 4.2a of the Bid
Documents was merely indicative and that other revenue
sources may be included by the proponent, subject to
approval by DOTC/MIAA. Furthermore, the PBAC
clarified that only those fees and charges denominated as
Public Utility Fees would be subject to regulation, and
those charges which would be actually deemed Public
Utility Fees could still be revised, depending on the
outcome of PBAC's query on the matter with the
Department of Justice.
In September 1996, the PBAC issued Bid Bulletin No. 5,
entitled "Answers to the Queries of PAIRCARGO as Per
Letter Dated September 3 and 10, 1996." Paircargo's
queries and the PBAC's responses were as follows:
1. It is difficult for Paircargo and Associates to meet the
required minimum equity requirement as prescribed in
Section 8.3.4 of the Bid Documents considering that the
capitalization of each member company is so structured
to meet the requirements and needs of their current
respective business undertaking/activities. In order to
comply with this equity requirement, Paircargo is
requesting PBAC to just allow each member of (sic)
corporation of the Joint Venture to just execute an
agreement that embodies a commitment to infuse the
required capital in case the project is awarded to the Joint
Venture instead of increasing each corporation's current
authorized capital stock just for prequalification purposes.
In prequalification, the agency is interested in one's
financial capability at the time of prequalification, not
future or potential capability.
A commitment to put up equity once awarded the project
is not enough to establish that "present" financial
capability. However, total financial capability of all
member companies of the Consortium, to be established
by submitting the respective companies' audited financial
statements, shall be acceptable.
2. At present, Paircargo is negotiating with banks and
other institutions for the extension of a Performance
Security to the joint venture in the event that the
Concessions Agreement (sic) is awarded to them.
However, Paircargo is being required to submit a copy of
the draft concession as one of the documentary
requirements. Therefore, Paircargo is requesting that
they'd (sic) be furnished copy of the approved negotiated
agreement between the PBAC and the AEDC at the
soonest possible time.
82

A copy of the draft Concession Agreement is included in
the Bid Documents. Any material changes would be made
known to prospective challengers through bid bulletins.
However, a final version will be issued before the award
of contract.
The PBAC also stated that it would require AEDC to sign
Supplement C of the Bid Documents (Acceptance of
Criteria and Waiver of Rights to Enjoin Project) and to
submit the same with the required Bid Security.
On September 20, 1996, the consortium composed of
People's Air Cargo and Warehousing Co., Inc.
(Paircargo), Phil. Air and Grounds Services, Inc. (PAGS)
and Security Bank Corp. (Security Bank) (collectively,
Paircargo Consortium) submitted their competitive
proposal to the PBAC. On September 23, 1996, the PBAC
opened the first envelope containing the prequalification
documents of the Paircargo Consortium. On the following
day, September 24, 1996, the PBAC prequalified the
Paircargo Consortium.
On September 26, 1996, AEDC informed the PBAC in
writing of its reservations as regards the Paircargo
Consortium, which include:
a. The lack of corporate approvals and financial capability
of PAIRCARGO;
b. The lack of corporate approvals and financial capability
of PAGS;
c. The prohibition imposed by RA 337, as amended (the
General Banking Act) on the amount that Security Bank
could legally invest in the project;
d. The inclusion of Siemens as a contractor of the
PAIRCARGO Joint Venture, for prequalification
purposes; and
e. The appointment of Lufthansa as the facility operator,
in view of the Philippine requirement in the operation of a
public utility.
The PBAC gave its reply on October 2, 1996, informing
AEDC that it had considered the issues raised by the
latter, and that based on the documents submitted by
Paircargo and the established prequalification criteria, the
PBAC had found that the challenger, Paircargo, had
prequalified to undertake the project. The Secretary of the
DOTC approved the finding of the PBAC.
The PBAC then proceeded with the opening of the second
envelope of the Paircargo Consortium which contained its
Technical Proposal.
On October 3, 1996, AEDC reiterated its objections,
particularly with respect to Paircargo's financial capability,
in view of the restrictions imposed by Section 21-B of the
General Banking Act and Sections 1380 and 1381 of the
Manual Regulations for Banks and Other Financial
Intermediaries. On October 7, 1996, AEDC again
manifested its objections and requested that it be
furnished with excerpts of the PBAC meeting and the
accompanying technical evaluation report where each of
the issues they raised were addressed.
On October 16, 1996, the PBAC opened the third
envelope submitted by AEDC and the Paircargo
Consortium containing their respective financial
proposals. Both proponents offered to build the NAIA
Passenger Terminal III for at least $350 million at no cost
to the government and to pay the government: 5% share
in gross revenues for the first five years of operation, 7.5%
share in gross revenues for the next ten years of
operation, and 10% share in gross revenues for the last
ten years of operation, in accordance with the Bid
Documents. However, in addition to the foregoing, AEDC
offered to pay the government a total of P135 million as
guaranteed payment for 27 years while Paircargo
Consortium offered to pay the government a total of
P17.75 billion for the same period.
Thus, the PBAC formally informed AEDC that it had
accepted the price proposal submitted by the Paircargo
Consortium, and gave AEDC 30 working days or until
November 28, 1996 within which to match the said bid,
otherwise, the project would be awarded to Paircargo.
As AEDC failed to match the proposal within the 30-day
period, then DOTC Secretary Amado Lagdameo, on
December 11, 1996, issued a notice to Paircargo
Consortium regarding AEDC's failure to match the
proposal.
On February 27, 1997, Paircargo Consortium
incorporated into Philippine International Airport
Terminals Co., Inc. (PIATCO).
AEDC subsequently protested the alleged undue
preference given to PIATCO and reiterated its objections
as regards the prequalification of PIATCO.
On April 11, 1997, the DOTC submitted the concession
agreement for the second-pass approval of the NEDA-
ICC.
On April 16, 1997, AEDC filed with the Regional Trial
Court of Pasig a Petition for Declaration of Nullity of the
Proceedings, Mandamus and Injunction against the
Secretary of the DOTC, the Chairman of the PBAC, the
voting members of the PBAC and Pantaleon D. Alvarez,
in his capacity as Chairman of the PBAC Technical
Committee.
On April 17, 1997, the NEDA-ICC conducted an ad
referendum to facilitate the approval, on a no-objection
basis, of the BOT agreement between the DOTC and
PIATCO. As the ad referendum gathered only four (4) of
the required six (6) signatures, the NEDA merely noted
the agreement.
On July 9, 1997, the DOTC issued the notice of award for
the project to PIATCO.
On July 12, 1997, the Government, through then DOTC
Secretary Arturo T. Enrile, and PIATCO, through its
President, Henry T. Go, signed the "Concession
Agreement for the Build-Operate-and-Transfer
Arrangement of the Ninoy Aquino International Airport
Passenger Terminal III" (1997 Concession Agreement).
The Government granted PIATCO the franchise to
operate and maintain the said terminal during the
concession period and to collect the fees, rentals and
other charges in accordance with the rates or schedules
stipulated in the 1997 Concession Agreement. The
Agreement provided that the concession period shall be
for twenty-five (25) years commencing from the in-service
date, and may be renewed at the option of the
Government for a period not exceeding twenty-five (25)
years. At the end of the concession period, PIATCO shall
transfer the development facility to MIAA.
83
On November 26, 1998, the Government and PIATCO
signed an Amended and Restated Concession
Agreement (ARCA). Among the provisions of the 1997
Concession Agreement that were amended by the ARCA
were: Sec. 1.11 pertaining to the definition of "certificate
of completion"; Sec. 2.05 pertaining to the Special
Obligations of GRP; Sec. 3.02 (a) dealing with the
exclusivity of the franchise given to the Concessionaire;
Sec. 4.04 concerning the assignment by Concessionaire
of its interest in the Development Facility; Sec. 5.08 (c)
dealing with the proceeds of Concessionaire's insurance;
Sec. 5.10 with respect to the temporary take-over of
operations by GRP; Sec. 5.16 pertaining to the taxes,
duties and other imposts that may be levied on the
Concessionaire; Sec. 6.03 as regards the periodic
adjustment of public utility fees and charges; the entire
Article VIII concerning the provisions on the termination of
the contract; and Sec. 10.02 providing for the venue of the
arbitration proceedings in case a dispute or controversy
arises between the parties to the agreement.
Subsequently, the Government and PIATCO signed three
Supplements to the ARCA. The First Supplement was
signed on August 27, 1999; the Second Supplement on
September 4, 2000; and the Third Supplement on June
22, 2001 (collectively, Supplements).
The First Supplement to the ARCA amended Sec. 1.36 of
the ARCA defining "Revenues" or "Gross Revenues";
Sec. 2.05 (d) of the ARCA referring to the obligation of
MIAA to provide sufficient funds for the upkeep,
maintenance, repair and/or replacement of all airport
facilities and equipment which are owned or operated by
MIAA; and further providing additional special obligations
on the part of GRP aside from those already enumerated
in Sec. 2.05 of the ARCA. The First Supplement also
provided a stipulation as regards the construction of a
surface road to connect NAIA Terminal II and Terminal III
in lieu of the proposed access tunnel crossing Runway
13/31; the swapping of obligations between GRP and
PIATCO regarding the improvement of Sales Road; and
the changes in the timetable. It also amended Sec. 6.01
(c) of the ARCA pertaining to the Disposition of Terminal
Fees; Sec. 6.02 of the ARCA by inserting an introductory
paragraph; and Sec. 6.02 (a) (iii) of the ARCA referring to
the Payments of Percentage Share in Gross Revenues.
The Second Supplement to the ARCA contained
provisions concerning the clearing, removal, demolition or
disposal of subterranean structures uncovered or
discovered at the site of the construction of the terminal
by the Concessionaire. It defined the scope of works; it
provided for the procedure for the demolition of the said
structures and the consideration for the same which the
GRP shall pay PIATCO; it provided for time extensions,
incremental and consequential costs and losses
consequent to the existence of such structures; and it
provided for some additional obligations on the part of
PIATCO as regards the said structures.
Finally, the Third Supplement provided for the obligations
of the Concessionaire as regards the construction of the
surface road connecting Terminals II and III.
Meanwhile, the MIAA which is charged with the
maintenance and operation of the NAIA Terminals I and
II, had existing concession contracts with various service
providers to offer international airline airport services,
such as in-flight catering, passenger handling, ramp and
ground support, aircraft maintenance and provisions,
cargo handling and warehousing, and other services, to
several international airlines at the NAIA. Some of these
service providers are the Miascor Group, DNATA-Wings
Aviation Systems Corp., and the MacroAsia Group.
Miascor, DNATA and MacroAsia, together with Philippine
Airlines (PAL), are the dominant players in the industry
with an aggregate market share of 70%.
On September 17, 2002, the workers of the international
airline service providers, claiming that they stand to lose
their employment upon the implementation of the
questioned agreements, filed before this Court a petition
for prohibition to enjoin the enforcement of said
agreements.2
On October 15, 2002, the service providers, joining the
cause of the petitioning workers, filed a motion for
intervention and a petition-in-intervention.
On October 24, 2002, Congressmen Salacnib Baterina,
Clavel Martinez and Constantino Jaraula filed a similar
petition with this Court.3
On November 6, 2002, several employees of the MIAA
likewise filed a petition assailing the legality of the various
agreements.4
On December 11, 2002. another group of Congressmen,
Hon. Jacinto V. Paras, Rafael P. Nantes, Eduardo C.
Zialcita, Willie B. Villarama, Prospero C. Nograles,
Prospero A. Pichay, Jr., Harlin Cast Abayon and
Benasing O. Macaranbon, moved to intervene in the case
as Respondents-Intervenors. They filed their Comment-
In-Intervention defending the validity of the assailed
agreements and praying for the dismissal of the petitions.
During the pendency of the case before this Court,
President Gloria Macapagal Arroyo, on November 29,
2002, in her speech at the 2002 Golden Shell Export
Awards at Malacañang Palace, stated that she will not
"honor (PIATCO) contracts which the Executive Branch's
legal offices have concluded (as) null and void."5
Respondent PIATCO filed its Comments to the present
petitions on November 7 and 27, 2002. The Office of the
Solicitor General and the Office of the Government
Corporate Counsel filed their respective Comments in
behalf of the public respondents.
On December 10, 2002, the Court heard the case on oral
argument. After the oral argument, the Court then
resolved in open court to require the parties to file
simultaneously their respective Memoranda in
amplification of the issues heard in the oral arguments
within 30 days and to explore the possibility of arbitration
or mediation as provided in the challenged contracts.
In their consolidated Memorandum, the Office of the
Solicitor General and the Office of the Government
Corporate Counsel prayed that the present petitions be
given due course and that judgment be rendered
declaring the 1997 Concession Agreement, the ARCA
and the Supplements thereto void for being contrary to the
Constitution, the BOT Law and its Implementing Rules
and Regulations.
On March 6, 2003, respondent PIATCO informed the
Court that on March 4, 2003 PIATCO commenced
arbitration proceedings before the International Chamber
of Commerce, International Court of Arbitration (ICC) by
filing a Request for Arbitration with the Secretariat of the
ICC against the Government of the Republic of the
Philippines acting through the DOTC and MIAA.
84
In the present cases, the Court is again faced with the
task of resolving complicated issues made difficult by their
intersecting legal and economic implications. The Court is
aware of the far reaching fall out effects of the ruling which
it makes today. For more than a century and whenever
the exigencies of the times demand it, this Court has
never shirked from its solemn duty to dispense justice and
resolve "actual controversies involving rights which are
legally demandable and enforceable, and to determine
whether or not there has been grave abuse of discretion
amounting to lack or excess of jurisdiction."6 To be sure,
this Court will not begin to do otherwise today.
We shall first dispose of the procedural issues raised by
respondent PIATCO which they allege will bar the
resolution of the instant controversy.
Petitioners' Legal Standing to File
the present Petitions
a. G.R. Nos. 155001 and 155661
In G.R. No. 155001 individual petitioners are employees
of various service providers7 having separate concession
contracts with MIAA and continuing service agreements
with various international airlines to provide in-flight
catering, passenger handling, ramp and ground support,
aircraft maintenance and provisions, cargo handling and
warehousing and other services. Also included as
petitioners are labor unions MIASCOR Workers Union-
National Labor Union and Philippine Airlines Employees
Association. These petitioners filed the instant action for
prohibition as taxpayers and as parties whose rights and
interests stand to be violated by the implementation of the
PIATCO Contracts.
Petitioners-Intervenors in the same case are all
corporations organized and existing under Philippine laws
engaged in the business of providing in-flight catering,
passenger handling, ramp and ground support, aircraft
maintenance and provisions, cargo handling and
warehousing and other services to several international
airlines at the Ninoy Aquino International Airport.
Petitioners-Intervenors allege that as tax-paying
international airline and airport-related service operators,
each one of them stands to be irreparably injured by the
implementation of the PIATCO Contracts. Each of the
petitioners-intervenors have separate and subsisting
concession agreements with MIAA and with various
international airlines which they allege are being
interfered with and violated by respondent PIATCO.
In G.R. No. 155661, petitioners constitute employees of
MIAA and Samahang Manggagawa sa Paliparan ng
Pilipinas - a legitimate labor union and accredited as the
sole and exclusive bargaining agent of all the employees
in MIAA. Petitioners anchor their petition for prohibition on
the nullity of the contracts entered into by the Government
and PIATCO regarding the build-operate-and-transfer of
the NAIA IPT III. They filed the petition as taxpayers and
persons who have a legitimate interest to protect in the
implementation of the PIATCO Contracts.
Petitioners in both cases raise the argument that the
PIATCO Contracts contain stipulations which directly
contravene numerous provisions of the Constitution,
specific provisions of the BOT Law and its Implementing
Rules and Regulations, and public policy. Petitioners
contend that the DOTC and the MIAA, by entering into
said contracts, have committed grave abuse of discretion
amounting to lack or excess of jurisdiction which can be
remedied only by a writ of prohibition, there being no
plain, speedy or adequate remedy in the ordinary course
of law.
In particular, petitioners assail the provisions in the 1997
Concession Agreement and the ARCA which grant
PIATCO the exclusive right to operate a commercial
international passenger terminal within the Island of
Luzon, except those international airports already existing
at the time of the execution of the agreement. The
contracts further provide that upon the commencement of
operations at the NAIA IPT III, the Government shall
cause the closure of Ninoy Aquino International Airport
Passenger Terminals I and II as international passenger
terminals. With respect to existing concession
agreements between MIAA and international airport
service providers regarding certain services or
operations, the 1997 Concession Agreement and the
ARCA uniformly provide that such services or operations
will not be carried over to the NAIA IPT III and PIATCO is
under no obligation to permit such carry over except
through a separate agreement duly entered into with
PIATCO.8
With respect to the petitioning service providers and their
employees, upon the commencement of operations of the
NAIA IPT III, they allege that they will be effectively barred
from providing international airline airport services at the
NAIA Terminals I and II as all international airlines and
passengers will be diverted to the NAIA IPT III. The
petitioning service providers will thus be compelled to
contract with PIATCO alone for such services, with no
assurance that subsisting contracts with MIAA and other
international airlines will be respected. Petitioning service
providers stress that despite the very competitive market,
the substantial capital investments required and the high
rate of fees, they entered into their respective contracts
with the MIAA with the understanding that the said
contracts will be in force for the stipulated period, and
thereafter, renewed so as to allow each of the petitioning
service providers to recoup their investments and obtain
a reasonable return thereon.
Petitioning employees of various service providers at the
NAIA Terminals I and II and of MIAA on the other hand
allege that with the closure of the NAIA Terminals I and II
as international passenger terminals under the PIATCO
Contracts, they stand to lose employment.
The question on legal standing is whether such parties
have "alleged such a personal stake in the outcome of the
controversy as to assure that concrete adverseness
which sharpens the presentation of issues upon which the
court so largely depends for illumination of difficult
constitutional questions."9 Accordingly, it has been held
that the interest of a person assailing the constitutionality
of a statute must be direct and personal. He must be able
to show, not only that the law or any government act is
invalid, but also that he sustained or is in imminent 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 or act complained of.10
We hold that petitioners have the requisite standing. In the
above-mentioned cases, petitioners have a direct and
substantial interest to protect by reason of the
implementation of the PIATCO Contracts. They stand to
lose their source of livelihood, a property right which is
85
zealously protected by the Constitution. Moreover,
subsisting concession agreements between MIAA and
petitioners-intervenors and service contracts between
international airlines and petitioners-intervenors stand to
be nullified or terminated by the operation of the NAIA IPT
III under the PIATCO Contracts. The financial prejudice
brought about by the PIATCO Contracts on petitioners
and petitioners-intervenors in these cases are legitimate
interests sufficient to confer on them the requisite
standing to file the instant petitions.
b. G.R. No. 155547
In G.R. No. 155547, petitioners filed the petition for
prohibition as members of the House of Representatives,
citizens and taxpayers. They allege that as members of
the House of Representatives, they are especially
interested in the PIATCO Contracts, because the
contracts compel the Government and/or the House of
Representatives to appropriate funds necessary to
comply with the provisions therein.11 They cite provisions
of the PIATCO Contracts which require disbursement of
unappropriated amounts in compliance with the
contractual obligations of the Government. They allege
that the Government obligations in the PIATCO Contracts
which compel government expenditure without
appropriation is a curtailment of their prerogatives as
legislators, contrary to the mandate of the Constitution
that "[n]o money shall be paid out of the treasury except
in pursuance of an appropriation made by law."12
Standing is a peculiar concept in constitutional law
because in some cases, suits are not brought by parties
who have been personally injured by the operation of a
law or any other government act but by concerned
citizens, taxpayers or voters who actually sue in the public
interest. Although we are not unmindful of the cases of
Imus Electric Co. v. Municipality of Imus13 and Gonzales
v. Raquiza14 wherein this Court held that appropriation
must be made only on amounts immediately demandable,
public interest demands that we take a more liberal view
in determining whether the petitioners suing as
legislators, taxpayers and citizens have locus standi to file
the instant petition. In Kilosbayan, Inc. v. Guingona,15 this
Court held "[i]n line with the liberal policy of this Court on
locus standi, ordinary taxpayers, members of Congress,
and even association of planters, and non-profit civic
organizations were allowed to initiate and prosecute
actions before this Court to question the constitutionality
or validity of laws, acts, decisions, rulings, or orders of
various government agencies or instrumentalities."16
Further, "insofar as taxpayers' suits are concerned . . .
(this Court) is not devoid of discretion as to whether or not
it should be entertained."17 As such ". . . even if, strictly
speaking, they [the petitioners] are not covered by the
definition, it is still within the wide discretion of the Court
to waive the requirement and so remove the impediment
to its addressing and resolving the serious constitutional
questions raised."18 In view of the serious legal questions
involved and their impact on public interest, we resolve to
grant standing to the petitioners.
Other Procedural Matters
Respondent PIATCO further alleges that this Court is
without jurisdiction to review the instant cases as factual
issues are involved which this Court is ill-equipped to
resolve. Moreover, PIATCO alleges that submission of
this controversy to this Court at the first instance is a
violation of the rule on hierarchy of courts. They contend
that trial courts have concurrent jurisdiction with this Court
with respect to a special civil action for prohibition and
hence, following the rule on hierarchy of courts, resort
must first be had before the trial courts.
After a thorough study and careful evaluation of the issues
involved, this Court is of the view that the crux of the
instant controversy involves significant legal questions.
The facts necessary to resolve these legal questions are
well established and, hence, need not be determined by
a trial court.
The rule on hierarchy of courts will not also prevent this
Court from assuming jurisdiction over the cases at bar.
The said rule may be relaxed when the redress desired
cannot be obtained in the appropriate courts or where
exceptional and compelling circumstances justify
availment of a remedy within and calling for the exercise
of this Court's primary jurisdiction.19
It is easy to discern that exceptional circumstances exist
in the cases at bar that call for the relaxation of the rule.
Both petitioners and respondents agree that these cases
are of transcendental importance as they involve the
construction and operation of the country's premier
international airport. Moreover, the crucial issues
submitted for resolution are of first impression and they
entail the proper legal interpretation of key provisions of
the Constitution, the BOT Law and its Implementing Rules
and Regulations. Thus, considering the nature of the
controversy before the Court, procedural bars may be
lowered to give way for the speedy disposition of the
instant cases.
Legal Effect of the Commencement
of Arbitration Proceedings by
PIATCO
There is one more procedural obstacle which must be
overcome. The Court is aware that arbitration
proceedings pursuant to Section 10.02 of the ARCA have
been filed at the instance of respondent PIATCO. Again,
we hold that the arbitration step taken by PIATCO will not
oust this Court of its jurisdiction over the cases at bar.
In Del Monte Corporation-USA v. Court of Appeals,20
even after finding that the arbitration clause in the
Distributorship Agreement in question is valid and the
dispute between the parties is arbitrable, this Court
affirmed the trial court's decision denying petitioner's
Motion to Suspend Proceedings pursuant to the
arbitration clause under the contract. In so ruling, this
Court held that as contracts produce legal effect between
the parties, their assigns and heirs, only the parties to the
Distributorship Agreement are bound by its terms,
including the arbitration clause stipulated therein. This
Court ruled that arbitration proceedings could be called
for but only with respect to the parties to the contract in
question. Considering that there are parties to the case
who are neither parties to the Distributorship Agreement
nor heirs or assigns of the parties thereto, this Court,
citing its previous ruling in Salas, Jr. v. Laperal Realty
Corporation,21 held that to tolerate the splitting of
proceedings by allowing arbitration as to some of the
parties on the one hand and trial for the others on the
other hand would, in effect, result in multiplicity of suits,
duplicitous procedure and unnecessary delay.22 Thus,
we ruled that the interest of justice would best be served
if the trial court hears and adjudicates the case in a single
and complete proceeding.
86
It is established that petitioners in the present cases who
have presented legitimate interests in the resolution of the
controversy are not parties to the PIATCO Contracts.
Accordingly, they cannot be bound by the arbitration
clause provided for in the ARCA and hence, cannot be
compelled to submit to arbitration proceedings. A speedy
and decisive resolution of all the critical issues in the
present controversy, including those raised by petitioners,
cannot be made before an arbitral tribunal. The object of
arbitration is precisely to allow an expeditious
determination of a dispute. This objective would not be
met if this Court were to allow the parties to settle the
cases by arbitration as there are certain issues involving
non-parties to the PIATCO Contracts which the arbitral
tribunal will not be equipped to resolve.
Now, to the merits of the instant controversy.
I c. Financial Capability: The project proponent must have
Is PIATCO a qualified bidder?
Public respondents argue that the Paircargo Consortium,
PIATCO's predecessor, was not a duly pre-qualified
bidder on the unsolicited proposal submitted by AEDC as
the Paircargo Consortium failed to meet the financial
capability required under the BOT Law and the Bid
Documents. They allege that in computing the ability of
the Paircargo Consortium to meet the minimum equity
requirements for the project, the entire net worth of
Security Bank, a member of the consortium, should not
be considered.
PIATCO relies, on the other hand, on the strength of the
Memorandum dated October 14, 1996 issued by the
DOTC Undersecretary Primitivo C. Cal stating that the
Paircargo Consortium is found to have a combined net
worth of P3,900,000,000.00, sufficient to meet the equity
requirements of the project. The said Memorandum was
in response to a letter from Mr. Antonio Henson of AEDC
to President Fidel V. Ramos questioning the financial
capability of the Paircargo Consortium on the ground that
it does not have the financial resources to put up the
required minimum equity of P2,700,000,000.00. This
contention is based on the restriction under R.A. No. 337,
as amended or the General Banking Act that a
commercial bank cannot invest in any single enterprise in
an amount more than 15% of its net worth. In the said
Memorandum, Undersecretary Cal opined:
The Bid Documents, as clarified through Bid Bulletin Nos.
3 and 5, require that financial capability will be evaluated
based on total financial capability of all the member
companies of the [Paircargo] Consortium. In this
connection, the Challenger was found to have a combined
net worth of P3,926,421,242.00 that could support a
project costing approximately P13 Billion.
It is not a requirement that the net worth must be
"unrestricted." To impose that as a requirement now will
be nothing less than unfair.
The financial statement or the net worth is not the sole
basis in establishing financial capability. As stated in Bid
Bulletin No. 3, financial capability may also be established
by testimonial letters issued by reputable banks. The
Challenger has complied with this requirement.
To recap, net worth reflected in the Financial Statement
should not be taken as the amount of the money to be
used to answer the required thirty percent (30%) equity of
the challenger but rather to be used in establishing if there
is enough basis to believe that the challenger can comply
with the required 30% equity. In fact, proof of sufficient
equity is required as one of the conditions for award of
contract (Section 12.1 IRR of the BOT Law) but not for
pre-qualification (Section 5.4 of the same document).23
Under the BOT Law, in case of a build-operate-and-
transfer arrangement, the contract shall be awarded to the
bidder "who, having satisfied the minimum financial,
technical, organizational and legal standards" required by
the law, has submitted the lowest bid and most favorable
terms of the project.24 Further, the 1994 Implementing
Rules and Regulations of the BOT Law provide:
Section 5.4 Pre-qualification Requirements.
xxx xxx xxx
adequate capability to sustain the financing requirements
for the detailed engineering design, construction and/or
operation and maintenance phases of the project, as the
case may be. For purposes of pre-qualification, this
capability shall be measured in terms of (i) proof of the
ability of the project proponent and/or the consortium to
provide a minimum amount of equity to the project, and
(ii) a letter testimonial from reputable banks attesting that
the project proponent and/or members of the consortium
are banking with them, that they are in good financial
standing, and that they have adequate resources. The
government agency/LGU concerned shall determine on a
project-to-project basis and before pre-qualification, the
minimum amount of equity needed. (emphasis supplied)
Pursuant to this provision, the PBAC issued PBAC
Bulletin No. 3 dated August 16, 1996 amending the
financial capability requirements for pre-qualification of
the project proponent as follows:
6. Basis of Pre-qualification
The basis for the pre-qualification shall be on the
compliance of the proponent to the minimum technical
and financial requirements provided in the Bid Documents
and in the IRR of the BOT Law, R.A. No. 6957, as
amended by R.A. 7718.
The minimum amount of equity to which the proponent's
financial capability will be based shall be thirty percent
(30%) of the project cost instead of the twenty percent
(20%) specified in Section 3.6.4 of the Bid Documents.
This is to correlate with the required debt-to-equity ratio of
70:30 in Section 2.01a of the draft concession agreement.
The debt portion of the project financing should not
exceed 70% of the actual project cost.
Accordingly, based on the above provisions of law, the
Paircargo Consortium or any challenger to the unsolicited
proposal of AEDC has to show that it possesses the
requisite financial capability to undertake the project in the
minimum amount of 30% of the project cost through (i)
proof of the ability to provide a minimum amount of equity
to the project, and (ii) a letter testimonial from reputable
banks attesting that the project proponent or members of
the consortium are banking with them, that they are in
good financial standing, and that they have adequate
resources.
As the minimum project cost was estimated to be
US$350,000,000.00 or roughly P9,183,650,000.00,25 the
Paircargo Consortium had to show to the satisfaction of
the PBAC that it had the ability to provide the minimum
87
equity for the project in the amount of at least
P2,755,095,000.00.
Paircargo's Audited Financial Statements as of 1993 and
1994 indicated that it had a net worth of P2,783,592.00
and P3,123,515.00 respectively.26 PAGS' Audited
Financial Statements as of 1995 indicate that it has
approximately P26,735,700.00 to invest as its equity for
the project.27 Security Bank's Audited Financial
Statements as of 1995 show that it has a net worth
equivalent to its capital funds in the amount of
P3,523,504,377.00.28
We agree with public respondents that with respect to
Security Bank, the entire amount of its net worth could not
be invested in a single undertaking or enterprise, whether
allied or non-allied in accordance with the provisions of
R.A. No. 337, as amended or the General Banking Act:
Sec. 21-B. The provisions in this or in any other Act to the
contrary notwithstanding, the Monetary Board, whenever
it shall deem appropriate and necessary to further
national development objectives or support national
priority projects, may authorize a commercial bank, a
bank authorized to provide commercial banking services,
as well as a government-owned and controlled bank, to
operate under an expanded commercial banking authority
and by virtue thereof exercise, in addition to powers
authorized for commercial banks, the powers of an
Investment House as provided in Presidential Decree No.
129, invest in the equity of a non-allied undertaking, or
own a majority or all of the equity in a financial
intermediary other than a commercial bank or a bank
authorized to provide commercial banking services:
Provided, That (a) the total investment in equities shall not
exceed fifty percent (50%) of the net worth of the bank;
(b) the equity investment in any one enterprise whether
allied or non-allied shall not exceed fifteen percent (15%)
of the net worth of the bank; (c) the equity investment of
the bank, or of its wholly or majority-owned subsidiary, in
a single non-allied undertaking shall not exceed thirty-five
percent (35%) of the total equity in the enterprise nor shall
it exceed thirty-five percent (35%) of the voting stock in
that enterprise; and (d) the equity investment in other
banks shall be deducted from the investing bank's net
worth for purposes of computing the prescribed ratio of
net worth to risk assets.
xxx xxx xxx
Further, the 1993 Manual of Regulations for Banks
provides:
SECTION X383. Other Limitations and Restrictions. —
The following limitations and restrictions shall also apply
regarding equity investments of banks.
a. In any single enterprise. — The equity investments of
banks in any single enterprise shall not exceed at any
time fifteen percent (15%) of the net worth of the investing
bank as defined in Sec. X106 and Subsec. X121.5.
Thus, the maximum amount that Security Bank could
validly invest in the Paircargo Consortium is only
P528,525,656.55, representing 15% of its entire net
worth. The total net worth therefore of the Paircargo
Consortium, after considering the maximum amounts that
may be validly invested by each of its members is
P558,384,871.55 or only 6.08% of the project cost,29 an
amount substantially less than the prescribed minimum
equity investment required for the project in the amount of
P2,755,095,000.00 or 30% of the project cost.
The purpose of pre-qualification in any public bidding is to
determine, at the earliest opportunity, the ability of the
bidder to undertake the project. Thus, with respect to the
bidder's financial capacity at the pre-qualification stage,
the law requires the government agency to examine and
determine the ability of the bidder to fund the entire cost
of the project by considering the maximum amounts that
each bidder may invest in the project at the time of pre-
qualification.
The PBAC has determined that any prospective bidder for
the construction, operation and maintenance of the NAIA
IPT III project should prove that it has the ability to provide
equity in the minimum amount of 30% of the project cost,
in accordance with the 70:30 debt-to-equity ratio
prescribed in the Bid Documents. Thus, in the case of
Paircargo Consortium, the PBAC should determine the
maximum amounts that each member of the consortium
may commit for the construction, operation and
maintenance of the NAIA IPT III project at the time of pre-
qualification. With respect to Security Bank, the maximum
amount which may be invested by it would only be 15%
of its net worth in view of the restrictions imposed by the
General Banking Act. Disregarding the investment
ceilings provided by applicable law would not result in a
proper evaluation of whether or not a bidder is pre-
qualified to undertake the project as for all intents and
purposes, such ceiling or legal restriction determines the
true maximum amount which a bidder may invest in the
project.
Further, the determination of whether or not a bidder is
pre-qualified to undertake the project requires an
evaluation of the financial capacity of the said bidder at
the time the bid is submitted based on the required
documents presented by the bidder. The PBAC should
not be allowed to speculate on the future financial ability
of the bidder to undertake the project on the basis of
documents submitted. This would open doors to abuse
and defeat the very purpose of a public bidding. This is
especially true in the case at bar which involves the
investment of billions of pesos by the project proponent.
The relevant government authority is duty-bound to
ensure that the awardee of the contract possesses the
minimum required financial capability to complete the
project. To allow the PBAC to estimate the bidder's future
financial capability would not secure the viability and
integrity of the project. A restrictive and conservative
application of the rules and procedures of public bidding
is necessary not only to protect the impartiality and
regularity of the proceedings but also to ensure the
financial and technical reliability of the project. It has been
held that:
The basic rule in public bidding is that bids should be
evaluated based on the required documents submitted
before and not after the opening of bids. Otherwise, the
foundation of a fair and competitive public bidding would
be defeated. Strict observance of the rules, regulations,
and guidelines of the bidding process is the only
safeguard to a fair, honest and competitive public
bidding.30
Thus, if the maximum amount of equity that a bidder may
invest in the project at the time the bids are submitted falls
short of the minimum amounts required to be put up by
the bidder, said bidder should be properly disqualified.
Considering that at the pre-qualification stage, the
maximum amounts which the Paircargo Consortium may
invest in the project fell short of the minimum amounts
prescribed by the PBAC, we hold that Paircargo
88
Consortium was not a qualified bidder. Thus the award of
the contract by the PBAC to the Paircargo Consortium, a
disqualified bidder, is null and void.
While it would be proper at this juncture to end the
resolution of the instant controversy, as the legal effects
of the disqualification of respondent PIATCO's
predecessor would come into play and necessarily result
in the nullity of all the subsequent contracts entered by it
in pursuance of the project, the Court feels that it is
necessary to discuss in full the pressing issues of the
present controversy for a complete resolution thereof.
II
Is the 1997 Concession Agreement valid?
Petitioners and public respondents contend that the 1997
Concession Agreement is invalid as it contains provisions
that substantially depart from the draft Concession
Agreement included in the Bid Documents. They maintain
that a substantial departure from the draft Concession
Agreement is a violation of public policy and renders the
1997 Concession Agreement null and void.
PIATCO maintains, however, that the Concession
Agreement attached to the Bid Documents is intended to
be a draft, i.e., subject to change, alteration or
modification, and that this intention was clear to all
participants, including AEDC, and DOTC/MIAA. It argued
further that said intention is expressed in Part C (6) of Bid
Bulletin No. 3 issued by the PBAC which states:
6. Amendments to the Draft Concessions Agreement
Amendments to the Draft Concessions Agreement shall
be issued from time to time. Said amendments shall only
cover items that would not materially affect the
preparation of the proponent's proposal.
By its very nature, public bidding aims to protect the public
interest by giving the public the best possible advantages
through open competition. Thus:
Competition must be legitimate, fair and honest. In the
field of government contract law, competition requires, not
only `bidding upon a common standard, a common basis,
upon the same thing, the same subject matter, the same
undertaking,' but also that it be legitimate, fair and honest;
and not designed to injure or defraud the government.31
An essential element of a publicly bidded contract is that
all bidders must be on equal footing. Not simply in terms
of application of the procedural rules and regulations
imposed by the relevant government agency, but more
importantly, on the contract bidded upon. Each bidder
must be able to bid on the same thing. The rationale is
obvious. If the winning bidder is allowed to later include or
modify certain provisions in the contract awarded such
that the contract is altered in any material respect, then
the essence of fair competition in the public bidding is
destroyed. A public bidding would indeed be a farce if
after the contract is awarded, the winning bidder may
modify the contract and include provisions which are
favorable to it that were not previously made available to
the other bidders. Thus:
It is inherent in public biddings that there shall be a fair
competition among the bidders. The specifications in such
biddings provide the common ground or basis for the
bidders. The specifications should, accordingly, operate
equally or indiscriminately upon all bidders.32
The same rule was restated by Chief Justice Stuart of the
Supreme Court of Minnesota:
The law is well settled that where, as in this case,
municipal authorities can only let a contract for public
work to the lowest responsible bidder, the proposals and
specifications therefore must be so framed as to permit
free and full competition. Nor can they enter into a
contract with the best bidder containing substantial
provisions beneficial to him, not included or contemplated
in the terms and specifications upon which the bids were
invited.33
In fact, in the PBAC Bid Bulletin No. 3 cited by PIATCO to
support its argument that the draft concession agreement
is subject to amendment, the pertinent portion of which
was quoted above, the PBAC also clarified that "[s]aid
amendments shall only cover items that would not
materially affect the preparation of the proponent's
proposal."
While we concede that a winning bidder is not precluded
from modifying or amending certain provisions of the
contract bidded upon, such changes must not constitute
substantial or material amendments that would alter the
basic parameters of the contract and would constitute a
denial to the other bidders of the opportunity to bid on the
same terms. Hence, the determination of whether or not
a modification or amendment of a contract bidded out
constitutes a substantial amendment rests on whether the
contract, when taken as a whole, would contain
substantially different terms and conditions that would
have the effect of altering the technical and/or financial
proposals previously submitted by other bidders. The
alterations and modifications in the contract executed
between the government and the winning bidder must be
such as to render such executed contract to be an entirely
different contract from the one that was bidded upon.
In the case of Caltex (Philippines), Inc. v. Delgado
Brothers, Inc.,34 this Court quoted with approval the
ruling of the trial court that an amendment to a contract
awarded through public bidding, when such subsequent
amendment was made without a new public bidding, is
null and void:
The Court agrees with the contention of counsel for the
plaintiffs that the due execution of a contract after public
bidding is a limitation upon the right of the contracting
parties to alter or amend it without another public bidding,
for otherwise what would a public bidding be good for if
after the execution of a contract after public bidding, the
contracting parties may alter or amend the contract, or
even cancel it, at their will? Public biddings are held for
the protection of the public, and to give the public the best
possible advantages by means of open competition
between the bidders. He who bids or offers the best terms
is awarded the contract subject of the bid, and it is obvious
that such protection and best possible advantages to the
public will disappear if the parties to a contract executed
after public bidding may alter or amend it without another
previous public bidding.35
Hence, the question that comes to fore is this: is the 1997
Concession Agreement the same agreement that was
offered for public bidding, i.e., the draft Concession
Agreement attached to the Bid Documents? A close
comparison of the draft Concession Agreement attached
to the Bid Documents and the 1997 Concession
Agreement reveals that the documents differ in at least
two material respects:
89

a. Modification on the Public
Utility Revenues and Non-Public
Utility Revenues that may be collected by PIATCO
The fees that may be imposed and collected by PIATCO
under the draft Concession Agreement and the 1997
Concession Agreement may be classified into three
distinct categories: (1) fees which are subject to periodic
adjustment of once every two years in accordance with a
prescribed parametric formula and adjustments are made
effective only upon written approval by MIAA; (2) fees
other than those included in the first category which
maybe adjusted by PIATCO whenever it deems
necessary without need for consent of DOTC/MIAA; and
(3) new fees and charges that may be imposed by
PIATCO which have not been previously imposed or
collected at the Ninoy Aquino International Airport
Passenger Terminal I, pursuant to Administrative Order
No. 1, Series of 1993, as amended. The glaring
distinctions between the draft Concession Agreement and
the 1997 Concession Agreement lie in the types of fees
included in each category and the extent of the
supervision and regulation which MIAA is allowed to
exercise in relation thereto.
For fees under the first category, i.e., those which are
subject to periodic adjustment in accordance with a
prescribed parametric formula and effective only upon
written approval by MIAA, the draft Concession
Agreement includes the following:36
(1) aircraft parking fees;
(2) aircraft tacking fees;
(3) groundhandling fees;
(4) rentals and airline offices;
(5) check-in counter rentals; and
(6) porterage fees.
Under the 1997 Concession Agreement, fees which are
subject to adjustment and effective upon MIAA approval
are classified as "Public Utility Revenues" and include:37
(1) aircraft parking fees;
(2) aircraft tacking fees;
(3) check-in counter fees; and
(4) Terminal Fees.
The implication of the reduced number of fees that are
subject to MIAA approval is best appreciated in relation to
fees included in the second category identified above.
Under the 1997 Concession Agreement, fees which
PIATCO may adjust whenever it deems necessary
without need for consent of DOTC/MIAA are "Non-Public
Utility Revenues" and is defined as "all other income not
classified as Public Utility Revenues derived from
operations of the Terminal and the Terminal Complex."38
Thus, under the 1997 Concession Agreement, ground
handling fees, rentals from airline offices and porterage
fees are no longer subject to MIAA regulation.
Further, under Section 6.03 of the draft Concession
Agreement, MIAA reserves the right to regulate (1) lobby
and vehicular parking fees and (2) other new fees and
charges that may be imposed by PIATCO. Such
regulation may be made by periodic adjustment and is
effective only upon written approval of MIAA. The full text
of said provision is quoted below:
Section 6.03. Periodic Adjustment in Fees and Charges.
Adjustments in the aircraft parking fees, aircraft tacking
fees, groundhandling fees, rentals and airline offices,
check-in-counter rentals and porterage fees shall be
allowed only once every two years and in accordance with
the Parametric Formula attached hereto as Annex F.
Provided that adjustments shall be made effective only
after the written express approval of the MIAA. Provided,
further, that such approval of the MIAA, shall be
contingent only on the conformity of the adjustments with
the above said parametric formula. The first adjustment
shall be made prior to the In-Service Date of the Terminal.
The MIAA reserves the right to regulate under the
foregoing terms and conditions the lobby and vehicular
parking fees and other new fees and charges as
contemplated in paragraph 2 of Section 6.01 if in its
judgment the users of the airport shall be deprived of a
free option for the services they cover.39
On the other hand, the equivalent provision under the
1997 Concession Agreement reads:
Section 6.03 Periodic Adjustment in Fees and Charges.
xxx xxx xxx
(c) Concessionaire shall at all times be judicious in fixing
fees and charges constituting Non-Public Utility
Revenues in order to ensure that End Users are not
unreasonably deprived of services. While the vehicular
parking fee, porterage fee and greeter/well wisher fee
constitute Non-Public Utility Revenues of Concessionaire,
GRP may intervene and require Concessionaire to
explain and justify the fee it may set from time to time, if
in the reasonable opinion of GRP the said fees have
become exorbitant resulting in the unreasonable
deprivation of End Users of such services.40
Thus, under the 1997 Concession Agreement, with
respect to (1) vehicular parking fee, (2) porterage fee and
(3) greeter/well wisher fee, all that MIAA can do is to
require PIATCO to explain and justify the fees set by
PIATCO. In the draft Concession Agreement, vehicular
parking fee is subject to MIAA regulation and approval
under the second paragraph of Section 6.03 thereof while
porterage fee is covered by the first paragraph of the
same provision. There is an obvious relaxation of the
extent of control and regulation by MIAA with respect to
the particular fees that may be charged by PIATCO.
Moreover, with respect to the third category of fees that
may be imposed and collected by PIATCO, i.e., new fees
and charges that may be imposed by PIATCO which have
not been previously imposed or collected at the Ninoy
Aquino International Airport Passenger Terminal I, under
Section 6.03 of the draft Concession Agreement MIAA
has reserved the right to regulate the same under the
same conditions that MIAA may regulate fees under the
first category, i.e., periodic adjustment of once every two
years in accordance with a prescribed parametric formula
and effective only upon written approval by MIAA.
However, under the 1997 Concession Agreement,
90
adjustment of fees under the third category is not subject
to MIAA regulation.
With respect to terminal fees that may be charged by
PIATCO,41 as shown earlier, this was included within the
category of "Public Utility Revenues" under the 1997
Concession Agreement. This classification is significant
because under the 1997 Concession Agreement, "Public
Utility Revenues" are subject to an "Interim Adjustment"
of fees upon the occurrence of certain extraordinary
events specified in the agreement.42 However, under the
draft Concession Agreement, terminal fees are not
included in the types of fees that may be subject to
"Interim Adjustment."43
Finally, under the 1997 Concession Agreement, "Public
Utility Revenues," except terminal fees, are denominated
in US Dollars44 while payments to the Government are in
Philippine Pesos. In the draft Concession Agreement, no
such stipulation was included. By stipulating that "Public
Utility Revenues" will be paid to PIATCO in US Dollars
while payments by PIATCO to the Government are in
Philippine currency under the 1997 Concession
Agreement, PIATCO is able to enjoy the benefits of
depreciations of the Philippine Peso, while being
effectively insulated from the detrimental effects of
exchange rate fluctuations.
When taken as a whole, the changes under the 1997
Concession Agreement with respect to reduction in the
types of fees that are subject to MIAA regulation and the
relaxation of such regulation with respect to other fees are
significant amendments that substantially distinguish the
draft Concession Agreement from the 1997 Concession
Agreement. The 1997 Concession Agreement, in this
respect, clearly gives PIATCO more favorable terms than
what was available to other bidders at the time the
contract was bidded out. It is not very difficult to see that
the changes in the 1997 Concession Agreement translate
to direct and concrete financial advantages for PIATCO
which were not available at the time the contract was
offered for bidding. It cannot be denied that under the
1997 Concession Agreement only "Public Utility
Revenues" are subject to MIAA regulation. Adjustments
of all other fees imposed and collected by PIATCO are
entirely within its control. Moreover, with respect to
terminal fees, under the 1997 Concession Agreement, the
same is further subject to "Interim Adjustments" not
previously stipulated in the draft Concession Agreement.
Finally, the change in the currency stipulated for "Public
Utility Revenues" under the 1997 Concession Agreement,
except terminal fees, gives PIATCO an added benefit
which was not available at the time of bidding.
b. Assumption by the
Government of the liabilities of
PIATCO in the event of the latter's
default thereof
Under the draft Concession Agreement, default by
PIATCO of any of its obligations to creditors who have
provided, loaned or advanced funds for the NAIA IPT III
project does not result in the assumption by the
Government of these liabilities. In fact, nowhere in the
said contract does default of PIATCO's loans figure in the
agreement. Such default does not directly result in any
concomitant right or obligation in favor of the Government.
However, the 1997 Concession Agreement provides:
Section 4.04 Assignment.
xxx xxx xxx
(b) In the event Concessionaire should default in the
payment of an Attendant Liability, and the default has
resulted in the acceleration of the payment due date of the
Attendant Liability prior to its stated date of maturity, the
Unpaid Creditors and Concessionaire shall immediately
inform GRP in writing of such default. GRP shall, within
one hundred eighty (180) Days from receipt of the joint
written notice of the Unpaid Creditors and
Concessionaire, either (i) take over the Development
Facility and assume the Attendant Liabilities, or (ii) allow
the Unpaid Creditors, if qualified, to be substituted as
concessionaire and operator of the Development Facility
in accordance with the terms and conditions hereof, or
designate a qualified operator acceptable to GRP to
operate the Development Facility, likewise under the
terms and conditions of this Agreement; Provided that if
at the end of the 180-day period GRP shall not have
served the Unpaid Creditors and Concessionaire written
notice of its choice, GRP shall be deemed to have elected
to take over the Development Facility with the
concomitant assumption of Attendant Liabilities.
(c) If GRP should, by written notice, allow the Unpaid
Creditors to be substituted as concessionaire, the latter
shall form and organize a concession company qualified
to take over the operation of the Development Facility. If
the concession company should elect to designate an
operator for the Development Facility, the concession
company shall in good faith identify and designate a
qualified operator acceptable to GRP within one hundred
eighty (180) days from receipt of GRP's written notice. If
the concession company, acting in good faith and with
due diligence, is unable to designate a qualified operator
within the aforesaid period, then GRP shall at the end of
the 180-day period take over the Development Facility
and assume Attendant Liabilities.
The term "Attendant Liabilities" under the 1997
Concession Agreement is defined as:
Attendant Liabilities refer to all amounts recorded and
from time to time outstanding in the books of the
Concessionaire as owing to Unpaid Creditors who have
provided, loaned or advanced funds actually used for the
Project, including all interests, penalties, associated fees,
charges, surcharges, indemnities, reimbursements and
other related expenses, and further including amounts
owed by Concessionaire to its suppliers, contractors and
sub-contractors.
Under the above quoted portions of Section 4.04 in
relation to the definition of "Attendant Liabilities," default
by PIATCO of its loans used to finance the NAIA IPT III
project triggers the occurrence of certain events that leads
to the assumption by the Government of the liability for
the loans. Only in one instance may the Government
escape the assumption of PIATCO's liabilities, i.e., when
the Government so elects and allows a qualified operator
to take over as Concessionaire. However, this
circumstance is dependent on the existence and
availability of a qualified operator who is willing to take
over the rights and obligations of PIATCO under the
contract, a circumstance that is not entirely within the
control of the Government.
Without going into the validity of this provision at this
juncture, suffice it to state that Section 4.04 of the 1997
91
Concession Agreement may be considered a form of
security for the loans PIATCO has obtained to finance the
project, an option that was not made available in the draft
Concession Agreement. Section 4.04 is an important
amendment to the 1997 Concession Agreement because
it grants PIATCO a financial advantage or benefit which
was not previously made available during the bidding
process. This financial advantage is a significant
modification that translates to better terms and conditions
for PIATCO.
PIATCO, however, argues that the parties to the bidding
procedure acknowledge that the draft Concession
Agreement is subject to amendment because the Bid
Documents permit financing or borrowing. They claim that
it was the lenders who proposed the amendments to the
draft Concession Agreement which resulted in the 1997
Concession Agreement.
We agree that it is not inconsistent with the rationale and
purpose of the BOT Law to allow the project proponent or
the winning bidder to obtain financing for the project,
especially in this case which involves the construction,
operation and maintenance of the NAIA IPT III.
Expectedly, compliance by the project proponent of its
undertakings therein would involve a substantial amount
of investment. It is therefore inevitable for the awardee of
the contract to seek alternate sources of funds to support
the project. Be that as it may, this Court maintains that
amendments to the contract bidded upon should always
conform to the general policy on public bidding if such
procedure is to be faithful to its real nature and purpose.
By its very nature and characteristic, competitive public
bidding aims to protect the public interest by giving the
public the best possible advantages through open
competition.45 It has been held that the three principles
in public bidding are (1) the offer to the public; (2)
opportunity for competition; and (3) a basis for the exact
comparison of bids. A regulation of the matter which
excludes any of these factors destroys the distinctive
character of the system and thwarts the purpose of its
adoption.46 These are the basic parameters which every
awardee of a contract bidded out must conform to,
requirements of financing and borrowing notwithstanding.
Thus, upon a concrete showing that, as in this case, the
contract signed by the government and the contract-
awardee is an entirely different contract from the contract
bidded, courts should not hesitate to strike down said
contract in its entirety for violation of public policy on
public bidding. A strict adherence on the principles, rules
and regulations on public bidding must be sustained if
only to preserve the integrity and the faith of the general
public on the procedure.
Public bidding is a standard practice for procuring
government contracts for public service and for furnishing
supplies and other materials. It aims to secure for the
government the lowest possible price under the most
favorable terms and conditions, to curtail favoritism in the
award of government contracts and avoid suspicion of
anomalies and it places all bidders in equal footing.47 Any
government action which permits any substantial
variance between the conditions under which the bids are
invited and the contract executed after the award thereof
is a grave abuse of discretion amounting to lack or excess
of jurisdiction which warrants proper judicial action.
In view of the above discussion, the fact that the foregoing
substantial amendments were made on the 1997
Concession Agreement renders the same null and void
for being contrary to public policy. These amendments
convert the 1997 Concession Agreement to an entirely
different agreement from the contract bidded out or the
draft Concession Agreement. It is not difficult to see that
the amendments on (1) the types of fees or charges that
are subject to MIAA regulation or control and the extent
thereof and (2) the assumption by the Government, under
certain conditions, of the liabilities of PIATCO directly
translates concrete financial advantages to PIATCO that
were previously not available during the bidding process.
These amendments cannot be taken as merely
supplements to or implementing provisions of those
already existing in the draft Concession Agreement. The
amendments discussed above present new terms and
conditions which provide financial benefit to PIATCO
which may have altered the technical and financial
parameters of other bidders had they known that such
terms were available.
III
Direct Government Guarantee
Article IV, Section 4.04(b) and (c), in relation to Article
1.06, of the 1997 Concession Agreement provides:
Section 4.04 Assignment
xxx xxx xxx
(b) In the event Concessionaire should default in the
payment of an Attendant Liability, and the default resulted
in the acceleration of the payment due date of the
Attendant Liability prior to its stated date of maturity, the
Unpaid Creditors and Concessionaire shall immediately
inform GRP in writing of such default. GRP shall within
one hundred eighty (180) days from receipt of the joint
written notice of the Unpaid Creditors and
Concessionaire, either (i) take over the Development
Facility and assume the Attendant Liabilities, or (ii) allow
the Unpaid Creditors, if qualified to be substituted as
concessionaire and operator of the Development facility
in accordance with the terms and conditions hereof, or
designate a qualified operator acceptable to GRP to
operate the Development Facility, likewise under the
terms and conditions of this Agreement; Provided, that if
at the end of the 180-day period GRP shall not have
served the Unpaid Creditors and Concessionaire written
notice of its choice, GRP shall be deemed to have elected
to take over the Development Facility with the
concomitant assumption of Attendant Liabilities.
(c) If GRP, by written notice, allow the Unpaid Creditors
to be substituted as concessionaire, the latter shall form
and organize a concession company qualified to takeover
the operation of the Development Facility. If the
concession company should elect to designate an
operator for the Development Facility, the concession
company shall in good faith identify and designate a
qualified operator acceptable to GRP within one hundred
eighty (180) days from receipt of GRP's written notice. If
the concession company, acting in good faith and with
due diligence, is unable to designate a qualified operator
within the aforesaid period, then GRP shall at the end of
the 180-day period take over the Development Facility
and assume Attendant Liabilities.
….
Section 1.06. Attendant Liabilities
Attendant Liabilities refer to all amounts recorded and
from time to time outstanding in the books of the
Concessionaire as owing to Unpaid Creditors who have
92
provided, loaned or advanced funds actually used for the
Project, including all interests, penalties, associated fees,
charges, surcharges, indemnities, reimbursements and
other related expenses, and further including amounts
owed by Concessionaire to its suppliers, contractors and
sub-contractors.48
It is clear from the above-quoted provisions that
Government, in the event that PIATCO defaults in its loan
obligations, is obligated to pay "all amounts recorded and
from time to time outstanding from the books" of PIATCO
which the latter owes to its creditors.49 These amounts
include "all interests, penalties, associated fees, charges,
surcharges, indemnities, reimbursements and other
related expenses."50 This obligation of the Government
to pay PIATCO's creditors upon PIATCO's default would
arise if the Government opts to take over NAIA IPT III. It
should be noted, however, that even if the Government
chooses the second option, which is to allow PIATCO's
unpaid creditors operate NAIA IPT III, the Government is
still at a risk of being liable to PIATCO's creditors should
the latter be unable to designate a qualified operator
within the prescribed period.51 In effect, whatever option
the Government chooses to take in the event of PIATCO's
failure to fulfill its loan obligations, the Government is still
at a risk of assuming PIATCO's outstanding loans. This is
due to the fact that the Government would only be free
from assuming PIATCO's debts if the unpaid creditors
would be able to designate a qualified operator within the
period provided for in the contract. Thus, the
Government's assumption of liability is virtually out of its
control. The Government under the circumstances
provided for in the 1997 Concession Agreement is at the
mercy of the existence, availability and willingness of a
qualified operator. The above contractual provisions
constitute a direct government guarantee which is
prohibited by law.
One of the main impetus for the enactment of the BOT
Law is the lack of government funds to construct the
infrastructure and development projects necessary for
economic growth and development. This is why private
sector resources are being tapped in order to finance
these projects. The BOT law allows the private sector to
participate, and is in fact encouraged to do so by way of
incentives, such as minimizing the unstable flow of
returns,52 provided that the government would not have
to unnecessarily expend scarcely available funds for the
project itself. As such, direct guarantee, subsidy and
equity by the government in these projects are strictly
prohibited.53 This is but logical for if the government
would in the end still be at a risk of paying the debts
incurred by the private entity in the BOT projects, then the
purpose of the law is subverted.
Section 2(n) of the BOT Law defines direct guarantee as
follows:
(n) Direct government guarantee — An agreement
whereby the government or any of its agencies or local
government units assume responsibility for the
repayment of debt directly incurred by the project
proponent in implementing the project in case of a loan
default.
Clearly by providing that the Government "assumes" the
attendant liabilities, which consists of PIATCO's unpaid
debts, the 1997 Concession Agreement provided for a
direct government guarantee for the debts incurred by
PIATCO in the implementation of the NAIA IPT III project.
It is of no moment that the relevant sections are
subsumed under the title of "assignment". The provisions
providing for direct government guarantee which is
prohibited by law is clear from the terms thereof.
The fact that the ARCA superseded the 1997 Concession
Agreement did not cure this fatal defect. Article IV,
Section 4.04(c), in relation to Article I, Section 1.06, of the
ARCA provides:
Section 4.04 Security
xxx xxx xxx
(c) GRP agrees with Concessionaire (PIATCO) that it
shall negotiate in good faith and enter into direct
agreement with the Senior Lenders, or with an agent of
such Senior Lenders (which agreement shall be subject
to the approval of the Bangko Sentral ng Pilipinas), in
such form as may be reasonably acceptable to both GRP
and Senior Lenders, with regard, inter alia, to the following
parameters:
xxx xxx xxx
(iv) If the Concessionaire [PIATCO] is in default under a
payment obligation owed to the Senior Lenders, and as a
result thereof the Senior Lenders have become entitled to
accelerate the Senior Loans, the Senior Lenders shall
have the right to notify GRP of the same, and without
prejudice to any other rights of the Senior Lenders or any
Senior Lenders' agent may have (including without
limitation under security interests granted in favor of the
Senior Lenders), to either in good faith identify and
designate a nominee which is qualified under sub-clause
(viii)(y) below to operate the Development Facility [NAIA
Terminal 3] or transfer the Concessionaire's [PIATCO]
rights and obligations under this Agreement to a
transferee which is qualified under sub-clause (viii) below;
xxx xxx xxx
(vi) if the Senior Lenders, acting in good faith and using
reasonable efforts, are unable to designate a nominee or
effect a transfer in terms and conditions satisfactory to the
Senior Lenders within one hundred eighty (180) days after
giving GRP notice as referred to respectively in (iv) or (v)
above, then GRP and the Senior Lenders shall endeavor
in good faith to enter into any other arrangement relating
to the Development Facility [NAIA Terminal 3] (other than
a turnover of the Development Facility [NAIA Terminal 3]
to GRP) within the following one hundred eighty (180)
days. If no agreement relating to the Development Facility
[NAIA Terminal 3] is arrived at by GRP and the Senior
Lenders within the said 180-day period, then at the end
thereof the Development Facility [NAIA Terminal 3] shall
be transferred by the Concessionaire [PIATCO] to GRP
or its designee and GRP shall make a termination
payment to Concessionaire [PIATCO] equal to the
Appraised Value (as hereinafter defined) of the
Development Facility [NAIA Terminal 3] or the sum of the
Attendant Liabilities, if greater. Notwithstanding Section
8.01(c) hereof, this Agreement shall be deemed
terminated upon the transfer of the Development Facility
[NAIA Terminal 3] to GRP pursuant hereto;
xxx xxx xxx
Section 1.06. Attendant Liabilities
Attendant Liabilities refer to all amounts in each case
supported by verifiable evidence from time to time owed
or which may become owing by Concessionaire [PIATCO]
to Senior Lenders or any other persons or entities who
93
have provided, loaned, or advanced funds or provided
financial facilities to Concessionaire [PIATCO] for the
Project [NAIA Terminal 3], including, without limitation, all
principal, interest, associated fees, charges,
reimbursements, and other related expenses (including
the fees, charges and expenses of any agents or trustees
of such persons or entities), whether payable at maturity,
by acceleration or otherwise, and further including
amounts owed by Concessionaire [PIATCO] to its
professional consultants and advisers, suppliers,
contractors and sub-contractors.54
It is clear from the foregoing contractual provisions that in
the event that PIATCO fails to fulfill its loan obligations to
its Senior Lenders, the Government is obligated to directly
negotiate and enter into an agreement relating to NAIA
IPT III with the Senior Lenders, should the latter fail to
appoint a qualified nominee or transferee who will take the
place of PIATCO. If the Senior Lenders and the
Government are unable to enter into an agreement after
the prescribed period, the Government must then pay
PIATCO, upon transfer of NAIA IPT III to the Government,
termination payment equal to the appraised value of the
project or the value of the attendant liabilities whichever
is greater. Attendant liabilities as defined in the ARCA
includes all amounts owed or thereafter may be owed by
PIATCO not only to the Senior Lenders with whom
PIATCO has defaulted in its loan obligations but to all
other persons who may have loaned, advanced funds or
provided any other type of financial facilities to PIATCO
for NAIA IPT III. The amount of PIATCO's debt that the
Government would have to pay as a result of PIATCO's
default in its loan obligations -- in case no qualified
nominee or transferee is appointed by the Senior Lenders
and no other agreement relating to NAIA IPT III has been
reached between the Government and the Senior
Lenders -- includes, but is not limited to, "all principal,
interest, associated fees, charges, reimbursements, and
other related expenses . . . whether payable at maturity,
by acceleration or otherwise."55
It is clear from the foregoing that the ARCA provides for a
direct guarantee by the government to pay PIATCO's
loans not only to its Senior Lenders but all other entities
who provided PIATCO funds or services upon PIATCO's
default in its loan obligation with its Senior Lenders. The
fact that the Government's obligation to pay PIATCO's
lenders for the latter's obligation would only arise after the
Senior Lenders fail to appoint a qualified nominee or
transferee does not detract from the fact that, should the
conditions as stated in the contract occur, the ARCA still
obligates the Government to pay any and all amounts
owed by PIATCO to its lenders in connection with NAIA
IPT III. Worse, the conditions that would make the
Government liable for PIATCO's debts is triggered by
PIATCO's own default of its loan obligations to its Senior
Lenders to which loan contracts the Government was
never a party to. The Government was not even given an
option as to what course of action it should take in case
PIATCO defaulted in the payment of its senior loans. The
Government, upon PIATCO's default, would be merely
notified by the Senior Lenders of the same and it is the
Senior Lenders who are authorized to appoint a qualified
nominee or transferee. Should the Senior Lenders fail to
make such an appointment, the Government is then
automatically obligated to "directly deal and negotiate"
with the Senior Lenders regarding NAIA IPT III. The only
way the Government would not be liable for PIATCO's
debt is for a qualified nominee or transferee to be
appointed in place of PIATCO to continue the
construction, operation and maintenance of NAIA IPT III.
This "pre-condition", however, will not take the contract
out of the ambit of a direct guarantee by the government
as the existence, availability and willingness of a qualified
nominee or transferee is totally out of the government's
control. As such the Government is virtually at the mercy
of PIATCO (that it would not default on its loan obligations
to its Senior Lenders), the Senior Lenders (that they
would appoint a qualified nominee or transferee or agree
to some other arrangement with the Government) and the
existence of a qualified nominee or transferee who is able
and willing to take the place of PIATCO in NAIA IPT III.
The proscription against government guarantee in any
form is one of the policy considerations behind the BOT
Law. Clearly, in the present case, the ARCA obligates the
Government to pay for all loans, advances and obligations
arising out of financial facilities extended to PIATCO for
the implementation of the NAIA IPT III project should
PIATCO default in its loan obligations to its Senior
Lenders and the latter fails to appoint a qualified nominee
or transferee. This in effect would make the Government
liable for PIATCO's loans should the conditions as set
forth in the ARCA arise. This is a form of direct
government guarantee.
The BOT Law and its implementing rules provide that in
order for an unsolicited proposal for a BOT project may
be accepted, the following conditions must first be met:
(1) the project involves a new concept in technology
and/or is not part of the list of priority projects, (2) no direct
government guarantee, subsidy or equity is required, and
(3) the government agency or local government unit has
invited by publication other interested parties to a public
bidding and conducted the same.56 The failure to meet
any of the above conditions will result in the denial of the
proposal. It is further provided that the presence of direct
government guarantee, subsidy or equity will "necessarily
disqualify a proposal from being treated and accepted as
an unsolicited proposal."57 The BOT Law clearly and
strictly prohibits direct government guarantee, subsidy
and equity in unsolicited proposals that the mere inclusion
of a provision to that effect is fatal and is sufficient to deny
the proposal. It stands to reason therefore that if a
proposal can be denied by reason of the existence of
direct government guarantee, then its inclusion in the
contract executed after the said proposal has been
accepted is likewise sufficient to invalidate the contract
itself. A prohibited provision, the inclusion of which would
result in the denial of a proposal cannot, and should not,
be allowed to later on be inserted in the contract resulting
from the said proposal. The basic rules of justice and fair
play alone militate against such an occurrence and must
not, therefore, be countenanced particularly in this
instance where the government is exposed to the risk of
shouldering hundreds of million of dollars in debt.
This Court has long and consistently adhered to the legal
maxim that those that cannot be done directly cannot be
done indirectly.58 To declare the PIATCO contracts valid
despite the clear statutory prohibition against a direct
government guarantee would not only make a mockery of
what the BOT Law seeks to prevent -- which is to expose
the government to the risk of incurring a monetary
obligation resulting from a contract of loan between the
project proponent and its lenders and to which the
Government is not a party to -- but would also render the
BOT Law useless for what it seeks to achieve –- to make
use of the resources of the private sector in the "financing,
operation and maintenance of infrastructure and
development projects"59 which are necessary for national
growth and development but which the government,
unfortunately, could ill-afford to finance at this point in
time.
94

IV
Temporary takeover of business affected with public
interest
Article XII, Section 17 of the 1987 Constitution provides:
Section 17. In times of national emergency, when the
public interest so requires, the State may, during the
emergency and under reasonable terms prescribed by it,
temporarily take over or direct the operation of any
privately owned public utility or business affected with
public interest.
The above provision pertains to the right of the State in
times of national emergency, and in the exercise of its
police power, to temporarily take over the operation of any
business affected with public interest. In the 1986
Constitutional Commission, the term "national
emergency" was defined to include threat from external
aggression, calamities or national disasters, but not
strikes "unless it is of such proportion that would paralyze
government service."60 The duration of the emergency
itself is the determining factor as to how long the
temporary takeover by the government would last.61 The
temporary takeover by the government extends only to
the operation of the business and not to the ownership
thereof. As such the government is not required to
compensate the private entity-owner of the said business
as there is no transfer of ownership, whether permanent
or temporary. The private entity-owner affected by the
temporary takeover cannot, likewise, claim just
compensation for the use of the said business and its
properties as the temporary takeover by the government
is in exercise of its police power and not of its power of
eminent domain.
Article V, Section 5.10 (c) of the 1997 Concession
Agreement provides:
Section 5.10 Temporary Take-over of operations by GRP.
….
(c) In the event the development Facility or any part
thereof and/or the operations of Concessionaire or any
part thereof, become the subject matter of or be included
in any notice, notification, or declaration concerning or
relating to acquisition, seizure or appropriation by GRP in
times of war or national emergency, GRP shall, by written
notice to Concessionaire, immediately take over the
operations of the Terminal and/or the Terminal Complex.
During such take over by GRP, the Concession Period
shall be suspended; provided, that upon termination of
war, hostilities or national emergency, the operations shall
be returned to Concessionaire, at which time, the
Concession period shall commence to run again.
Concessionaire shall be entitled to reasonable
compensation for the duration of the temporary take over
by GRP, which compensation shall take into account the
reasonable cost for the use of the Terminal and/or
Terminal Complex, (which is in the amount at least equal
to the debt service requirements of Concessionaire, if the
temporary take over should occur at the time when
Concessionaire is still servicing debts owed to project
lenders), any loss or damage to the Development Facility,
and other consequential damages. If the parties cannot
agree on the reasonable compensation of
Concessionaire, or on the liability of GRP as aforesaid,
the matter shall be resolved in accordance with Section
10.01 [Arbitration]. Any amount determined to be payable
by GRP to Concessionaire shall be offset from the amount
next payable by Concessionaire to GRP.62
PIATCO cannot, by mere contractual stipulation,
contravene the Constitutional provision on temporary
government takeover and obligate the government to pay
"reasonable cost for the use of the Terminal and/or
Terminal Complex."63 Article XII, section 17 of the 1987
Constitution envisions a situation wherein the exigencies
of the times necessitate the government to "temporarily
take over or direct the operation of any privately owned
public utility or business affected with public interest." It is
the welfare and interest of the public which is the
paramount consideration in determining whether or not to
temporarily take over a particular business. Clearly, the
State in effecting the temporary takeover is exercising its
police power. Police power is the "most essential,
insistent, and illimitable of powers."64 Its exercise
therefore must not be unreasonably hampered nor its
exercise be a source of obligation by the government in
the absence of damage due to arbitrariness of its
exercise.65 Thus, requiring the government to pay
reasonable compensation for the reasonable use of the
property pursuant to the operation of the business
contravenes the Constitution.
V
Regulation of Monopolies
A monopoly is "a privilege or peculiar advantage vested
in one or more persons or companies, consisting in the
exclusive right (or power) to carry on a particular business
or trade, manufacture a particular article, or control the
sale of a particular commodity."66 The 1987 Constitution
strictly regulates monopolies, whether private or public,
and even provides for their prohibition if public interest so
requires. Article XII, Section 19 of the 1987 Constitution
states:
Sec. 19. The state shall regulate or prohibit monopolies
when the public interest so requires. No combinations in
restraint of trade or unfair competition shall be allowed.
Clearly, monopolies are not per se prohibited by the
Constitution but may be permitted to exist to aid the
government in carrying on an enterprise or to aid in the
performance of various services and functions in the
interest of the public.67 Nonetheless, a determination
must first be made as to whether public interest requires
a monopoly. As monopolies are subject to abuses that
can inflict severe prejudice to the public, they are subject
to a higher level of State regulation than an ordinary
business undertaking.
In the cases at bar, PIATCO, under the 1997 Concession
Agreement and the ARCA, is granted the "exclusive right
to operate a commercial international passenger terminal
within the Island of Luzon" at the NAIA IPT III.68 This is
with the exception of already existing international airports
in Luzon such as those located in the Subic Bay Freeport
Special Economic Zone ("SBFSEZ"), Clark Special
Economic Zone ("CSEZ") and in Laoag City.69 As such,
upon commencement of PIATCO's operation of NAIA IPT
III, Terminals 1 and 2 of NAIA would cease to function as
international passenger terminals. This, however, does
not prevent MIAA to use Terminals 1 and 2 as domestic
passenger terminals or in any other manner as it may
deem appropriate except those activities that would
compete with NAIA IPT III in the latter's operation as an
international passenger terminal.70 The right granted to
PIATCO to exclusively operate NAIA IPT III would be for
95
a period of twenty-five (25) years from the In-Service
Date71 and renewable for another twenty-five (25) years
at the option of the government.72 Both the 1997
Concession Agreement and the ARCA further provide
that, in view of the exclusive right granted to PIATCO, the
concession contracts of the service providers currently
servicing Terminals 1 and 2 would no longer be renewed
and those concession contracts whose expiration are
subsequent to the In-Service Date would cease to be
effective on the said date.73
The operation of an international passenger airport
terminal is no doubt an undertaking imbued with public
interest. In entering into a Build–Operate-and-Transfer
contract for the construction, operation and maintenance
of NAIA IPT III, the government has determined that
public interest would be served better if private sector
resources were used in its construction and an exclusive
right to operate be granted to the private entity
undertaking the said project, in this case PIATCO.
Nonetheless, the privilege given to PIATCO is subject to
reasonable regulation and supervision by the
Government through the MIAA, which is the government
agency authorized to operate the NAIA complex, as well
as DOTC, the department to which MIAA is attached.74
This is in accord with the Constitutional mandate that a
monopoly which is not prohibited must be regulated.75
While it is the declared policy of the BOT Law to
encourage private sector participation by "providing a
climate of minimum government regulations,"76 the same
does not mean that Government must completely
surrender its sovereign power to protect public interest in
the operation of a public utility as a monopoly. The
operation of said public utility can not be done in an
arbitrary manner to the detriment of the public which it
seeks to serve. The right granted to the public utility may
be exclusive but the exercise of the right cannot run riot.
Thus, while PIATCO may be authorized to exclusively
operate NAIA IPT III as an international passenger
terminal, the Government, through the MIAA, has the right
and the duty to ensure that it is done in accord with public
interest. PIATCO's right to operate NAIA IPT III cannot
also violate the rights of third parties.
Section 3.01(e) of the 1997 Concession Agreement and
the ARCA provide:
3.01 Concession Period
xxx xxx xxx
(e) GRP confirms that certain concession agreements
relative to certain services and operations currently being
undertaken at the Ninoy Aquino International Airport
passenger Terminal I have a validity period extending
beyond the In-Service Date. GRP through DOTC/MIAA,
confirms that these services and operations shall not be
carried over to the Terminal and the Concessionaire is
under no legal obligation to permit such carry-over except
through a separate agreement duly entered into with
Concessionaire. In the event Concessionaire becomes
involved in any litigation initiated by any such
concessionaire or operator, GRP undertakes and hereby
holds Concessionaire free and harmless on full indemnity
basis from and against any loss and/or any liability
resulting from any such litigation, including the cost of
litigation and the reasonable fees paid or payable to
Concessionaire's counsel of choice, all such amounts
shall be fully deductible by way of an offset from any
amount which the Concessionaire is bound to pay GRP
under this Agreement.
During the oral arguments on December 10, 2002, the
counsel for the petitioners-in-intervention for G.R. No.
155001 stated that there are two service providers whose
contracts are still existing and whose validity extends
beyond the In-Service Date. One contract remains valid
until 2008 and the other until 2010.77
We hold that while the service providers presently
operating at NAIA Terminal 1 do not have an absolute
right for the renewal or the extension of their respective
contracts, those contracts whose duration extends
beyond NAIA IPT III's In-Service-Date should not be
unduly prejudiced. These contracts must be respected not
just by the parties thereto but also by third parties.
PIATCO cannot, by law and certainly not by contract,
render a valid and binding contract nugatory. PIATCO, by
the mere expedient of claiming an exclusive right to
operate, cannot require the Government to break its
contractual obligations to the service providers. In
contrast to the arrastre and stevedoring service providers
in the case of Anglo-Fil Trading Corporation v. Lazaro78
whose contracts consist of temporary hold-over permits,
the affected service providers in the cases at bar, have a
valid and binding contract with the Government, through
MIAA, whose period of effectivity, as well as the other
terms and conditions thereof, cannot be violated.
In fine, the efficient functioning of NAIA IPT III is imbued
with public interest. The provisions of the 1997
Concession Agreement and the ARCA did not strip
government, thru the MIAA, of its right to supervise the
operation of the whole NAIA complex, including NAIA IPT
III. As the primary government agency tasked with the
job,79 it is MIAA's responsibility to ensure that whoever
by contract is given the right to operate NAIA IPT III will
do so within the bounds of the law and with due regard to
the rights of third parties and above all, the interest of the
public.
VI
CONCLUSION
In sum, this Court rules that in view of the absence of the
requisite financial capacity of the Paircargo Consortium,
predecessor of respondent PIATCO, the award by the
PBAC of the contract for the construction, operation and
maintenance of the NAIA IPT III is null and void. Further,
considering that the 1997 Concession Agreement
contains material and substantial amendments, which
amendments had the effect of converting the 1997
Concession Agreement into an entirely different
agreement from the contract bidded upon, the 1997
Concession Agreement is similarly null and void for being
contrary to public policy. The provisions under Sections
4.04(b) and (c) in relation to Section 1.06 of the 1997
Concession Agreement and Section 4.04(c) in relation to
Section 1.06 of the ARCA, which constitute a direct
government guarantee expressly prohibited by, among
others, the BOT Law and its Implementing Rules and
Regulations are also null and void. The Supplements,
being accessory contracts to the ARCA, are likewise null
and void.
WHEREFORE, the 1997 Concession Agreement, the
Amended and Restated Concession Agreement and the
Supplements thereto are set aside for being null and void.
SO ORDERED.
96
Davide, Jr., C.J., Bellosillo, Ynares-Santiago, Sandoval-
Gutierrez, Austria-Martinez, Corona, and Carpio-Morales,
JJ., concur.
Vitug, J., see separate (dissenting) opinion.
Panganiban, J., please see separate opinion.
Quisumbing, J., no jurisdiction, please see separate
opinion of J. Vitug in which he concurs.
Carpio, J., no part.
Callejo, Sr., J., also concur in the separate opinion of J.
Panganiban.
Azcuna, J., joins the separate opinion of J. Vitug.
SEPARATE OPINIONS
VITUG, J.:
This Court is bereft of jurisdiction to hear the petitions at
bar. The Constitution provides that the Supreme Court
shall exercise original jurisdiction over, among other
actual controversies, petitions for certiorari, prohibition,
mandamus, quo warranto, and habeas corpus.1 The
cases in question, although denominated to be petitions
for prohibition, actually pray for the nullification of the
PIATCO contracts and to restrain respondents from
implementing said agreements for being illegal and
unconstitutional.
Section 2, Rule 65 of the Rules of Court states:
"When the proceedings of any tribunal, corporation,
board, officer or person, whether exercising judicial,
quasi-judicial or ministerial functions, are without or in
excess of its or his jurisdiction, or with grave abuse of
discretion amounting to lack or excess of jurisdiction, and
there is no appeal or any other plain, speedy and
adequate remedy in the ordinary course of law, a person
aggrieved thereby may file a verified petition in the proper
court, alleging the facts with certainty and praying that
judgment be rendered commanding the respondent to
desist from further proceedings in the action or matter
specified therein, or otherwise granting such incidental
reliefs as law and justice may require."
The rule is explicit. A petition for prohibition may be filed
against a tribunal, corporation, board, officer or person,
exercising judicial, quasi-judicial or ministerial functions.
What the petitions seek from respondents do not involve
judicial, quasi-judicial or ministerial functions. In
prohibition, only legal issues affecting the jurisdiction of
the tribunal, board or officer involved may be resolved on
the basis of undisputed facts.2 The parties allege,
respectively, contentious evidentiary facts. It would be
difficult, if not anomalous, to decide the jurisdictional issue
on the basis of the contradictory factual submissions
made by the parties.3 As the Court has so often exhorted,
it is not a trier of facts.
The petitions, in effect, are in the nature of actions for
declaratory relief under Rule 63 of the Rules of Court. The
Rules provide that any person interested under a contract
may, before breach or violation thereof, bring an action in
the appropriate Regional Trial Court to determine any
question of construction or validity arising, and for a
declaration of his rights or duties thereunder.4 The
Supreme Court assumes no jurisdiction over petitions for
declaratory relief which are cognizable by regional trial
courts.5
As I have so expressed in Tolentino vs. Secretary of
Finance,6 reiterated in Santiago vs. Guingona, Jr.7 , the
Supreme Court should not be thought of as having been
tasked with the awesome responsibility of overseeing the
entire bureaucracy. Pervasive and limitless, such as it
may seem to be under the 1987 Constitution, judicial
power still succumbs to the paramount doctrine of
separation of powers. The Court may not at good liberty
intrude, in the guise of sovereign imprimatur, into every
affair of government. What significance can still then
remain of the time-honored and widely acclaimed
principle of separation of powers if, at every turn, the
Court allows itself to pass upon at will the disposition of a
co-equal, independent and coordinate branch in our
system of government. I dread to think of the so varied
uncertainties that such an undue interference can lead to.
Accordingly, I vote for the dismissal of the petition.
Quisumbing, and Azcuna, JJ., concur.
PANGANIBAN, J.:
The five contracts for the construction and the operation
of Ninoy Aquino International Airport (NAIA) Terminal III,
the subject of the consolidated Petitions before the Court,
are replete with outright violations of law, public policy and
the Constitution. The only proper thing to do is declare
them all null and void ab initio and let the chips fall where
they may. Fiat iustitia ruat coelum.
The facts leading to this controversy are already well
presented in the ponencia. I shall not burden the readers
with a retelling thereof. Instead, I will cut to the chase and
directly address the two sets of gut issues:
1. The first issue is procedural: Does the Supreme
Court have original jurisdiction to hear and decide the
Petitions? Corollarily, do petitioners have locus standi and
should this Court decide the cases without any mandatory
referral to arbitration?
2. The second one is substantive in character: Did
the subject contracts violate the Constitution, the laws,
and public policy to such an extent as to render all of them
void and inexistent?
My answer to all the above questions is a firm "Yes."
The Procedural Issue:
Jurisdiction, Standing and Arbitration
Definitely and surely, the issues involved in these
Petitions are clearly of transcendental importance and of
national interest. The subject contracts pertain to the
construction and the operation of the country's premiere
international airport terminal - an ultramodern world-class
public utility that will play a major role in the country's
economic development and serve to project a positive
image of our country abroad. The five build-operate-&-
transfer (BOT) contracts, while entailing the investment of
billions of pesos in capital and the availment of several
hundred millions of dollars in loans, contain provisions
that tend to establish a monopoly, require the
disbursements of public funds sans appropriations, and
provide government guarantees in violation of statutory
prohibitions, as well as other provisions equally offensive
to law, public policy and the Constitution. Public interest
will inevitably be affected thereby.
Thus, objections to these Petitions, grounded upon (a) the
hierarchy of courts, (b) the need for arbitration prior to
court action, and (c) the alleged lack of sufficient
personality, standing or interest, being in the main
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procedural matters, must now be set aside, as they have
been in past cases. This Court must be permitted to
perform its constitutional duty of determining whether the
other agencies of government have acted within the limits
of the Constitution and the laws, or if they have gravely
abused the discretion entrusted to them.1
Hierarchy of Courts
The Court has, in the past, held that questions relating to
gargantuan government contracts ought to be settled
without delay.2 This holding applies with greater force to
the instant cases. Respondent Piatco is partly correct in
averring that petitioners can obtain relief from the regional
trial courts via an action to annul the contracts.
Nevertheless, the unavoidable consequence of having to
await the rendition and the finality of any such judgment
would be a prolonged state of uncertainty that would be
prejudicial to the nation, the parties and the general
public. And, in light of the feared loss of jobs of the
petitioning workers, consequent to the inevitable
pretermination of contracts of the petitioning service
providers that will follow upon the heels of the impending
opening of NAIA Terminal III, the need for relief is patently
urgent, and therefore, direct resort to this Court through
the special civil action of prohibition is thus justified.3
Contrary to Piatco's argument that the resolution of the
issues raised in the Petitions will require delving into
factual questions,4 I submit that their disposition
ultimately turns on questions of law.5 Further, many of the
significant and relevant factual questions can be easily
addressed by an examination of the documents submitted
by the parties. In any event, the Petitions raise some
novel questions involving the application of the amended
BOT Law, which this Court has seen fit to tackle.
Arbitration
Should the dispute be referred to arbitration prior to
judicial recourse? Respondent Piatco claims that Section
10.02 of the Amended and Restated Concession
Agreement (ARCA) provides for arbitration under the
auspices of the International Chamber of Commerce to
settle any dispute or controversy or claim arising in
connection with the Concession Agreement, its
amendments and supplements. The government
disagrees, however, insisting that there can be no
arbitration based on Section 10.02 of the ARCA, since all
the Piatco contracts are void ab initio. Therefore, all
contractual provisions, including Section 10.02 of the
ARCA, are likewise void, inexistent and inoperative. To
support its stand, the government cites Chavez v.
Presidential Commission on Good Government:6 "The
void agreement will not be rendered operative by the
parties' alleged performance (partial or full) of their
respective prestations. A contract that violates the
Constitution and the law is null and void ab initio and vests
no rights and creates no obligations. It produces no legal
effect at all."
As will be discussed at length later, the Piatco contracts
are indeed void in their entirety; thus, a resort to the
aforesaid provision on arbitration is unavailing. Besides,
petitioners and petitioners-in-intervention have pointed
out that, even granting arguendo that the arbitration
clause remained a valid provision, it still cannot bind them
inasmuch as they are not parties to the Piatco contracts.
And in the final analysis, it is unarguable that the
arbitration process provided for under Section 10.02 of
the ARCA, to be undertaken by a panel of three (3)
arbitrators appointed in accordance with the Rules of
Arbitration of the International Chamber of Commerce,
will not be able to address, determine and definitively
resolve the constitutional and legal questions that have
been raised in the Petitions before us.
Locus Standi
Given this Court's previous decisions in cases of similar
import, no one will seriously doubt that, being taxpayers
and members of the House of Representatives,
Petitioners Baterina et al. have locus standi to bring the
Petition in GR No. 155547. In Albano v. Reyes,7 this
Court held that the petitioner therein, suing as a citizen,
taxpayer and member of the House of Representatives,
was sufficiently clothed with standing to bring the suit
questioning the validity of the assailed contract. The Court
cited the fact that public interest was involved, in view of
the important role of the Manila International Container
Terminal (MICT) in the country's economic development
and the magnitude of the financial consideration. This,
notwithstanding the fact that expenditure of public funds
was not required under the assailed contract.
In the cases presently under consideration, petitioners'
personal and substantial interest in the controversy is
shown by the fact that certain provisions in the Piatco
contracts create obligations on the part of government
(through the DOTC and the MIAA) to disburse public
funds without prior congressional appropriations.
Petitioners thus correctly assert that the injury to them has
a twofold aspect: (1) they are adversely affected as
taxpayers on account of the illegal disbursement of public
funds; and (2) they are prejudiced qua legislators, since
the contractual provisions requiring the government to
incur expenditures without appropriations also operate as
limitations upon the exclusive power and prerogative of
Congress over the public purse. As members of the
House of Representatives, they are actually deprived of
discretion insofar as the inclusion of those items of
expenditure in the budget is concerned. To prevent such
encroachment upon the legislative privilege and obviate
injury to the institution of which they are members,
petitioners-legislators have locus standi to bring suit.
Messrs. Agan et al. and Lopez et al., are likewise
taxpayers and thus possessed of standing to challenge
the illegal disbursement of public funds. Messrs. Agan et
al., in particular, are employees (or representatives of
employees) of various service providers that have (1)
existing concession agreements with the MIAA to provide
airport services necessary to the operation of the NAIA
and (2) service agreements to furnish essential support
services to the international airlines operating at the NAIA.
On the other hand, Messrs. Lopez et al. are employees of
the MIAA. These petitioners (Messrs. Agan et al. and
Messrs. Lopez et al.) are confronted with the prospect of
being laid off from their jobs and losing their means of
livelihood when their employer-companies are forced to
shut down or otherwise retrench and cut back on
manpower. Such development would result from the
imminent implementation of certain provisions in the
contracts that tend toward the creation of a monopoly in
favor of Piatco, its subsidiaries and related companies.
Petitioners-in-intervention are service providers in the
business of furnishing airport-related services to
international airlines and passengers in the NAIA and are
therefore competitors of Piatco as far as that line of
business is concerned. On account of provisions in the
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Piatco contracts, petitioners-in-intervention have to enter
into a written contract with Piatco so as not to be shut out
of NAIA Terminal III and barred from doing business
there. Since there is no provision to ensure or safeguard
free and fair competition, they are literally at its mercy.
They claim injury on account of their deprivation of
property (business) and of the liberty to contract, without
due process of law.
And even if petitioners and petitioners-in-intervention
were not sufficiently clothed with legal standing, I have at
the outset already established that, given its impact on the
public and on national interest, this controversy is laden
with transcendental importance and constitutional
significance. Hence, I do not hesitate to adopt the same
position as was enunciated in Kilosbayan v. Guingona
Jr.8 that "in cases of transcendental importance, the
Court may relax the standing requirements and allow a
suit to prosper even when there is no direct injury to the
party claiming the right of judicial review."9
The Substantive Issue:
Violations of the Constitution and the Laws
From the Outset, the Bidding Process Was Flawed and
Tainted
After studying the documents submitted and arguments
advanced by the parties, I have no doubt that, right at the
outset, Piatco was not qualified to participate in the
bidding process for the Terminal III project, but was
nevertheless permitted to do so. It even won the bidding
and was helped along by what appears to be a series of
collusive and corrosive acts.
The build-operate-and-transfer (BOT) project for the NAIA
Passenger Terminal III comes under the category of an
"unsolicited proposal," which is the subject of Section 4-A
of the BOT Law.10 The unsolicited proposal was originally
submitted by the Asia's Emerging Dragon Corporation
(AEDC) to the Department of Transportation and
Communications (DOTC) and the Manila International
Airport Authority (MIAA), which reviewed and approved
the proposal.
The draft of the concession agreement as negotiated
between AEDC and DOTC/MIAA was endorsed to the
National Economic Development Authority (NEDA-ICC),
which in turn reviewed it on the basis of its scope,
economic viability, financial indicators and risks; and
thereafter approved it for bidding.
The DOTC/MIAA then prepared the Bid Documents,
incorporating therein the negotiated Draft Concession
Agreement, and published invitations for public bidding,
i.e., for the submission of comparative or competitive
proposals. Piatco's predecessor-in-interest, the Paircargo
Consortium, was the only company that submitted a
competitive bid or price challenge.
At this point, I must emphasize that the law requires the
award of a BOT project to the bidder that has satisfied the
minimum requirements; and met the technical, financial,
organizational and legal standards provided in the BOT
Law. Section 5 of this statute states:
"Sec. 5. Public bidding of projects. - . . .
"In the case of a build-operate-and-transfer arrangement,
the contract shall be awarded to the bidder who, having
satisfied the minimum financial, technical, organizational
and legal standards required by this Act, has submitted
the lowest bid and most favorable terms for the project,
based on the present value of its proposed tolls, fees,
rentals and charges over a fixed term for the facility to be
constructed, rehabilitated, operated and maintained
according to the prescribed minimum design and
performance standards, plans and specifications. . . ."
(Emphasis supplied.)
The same provision requires that the price challenge via
public bidding "must be conducted under a two-
envelope/two-stage system: the first envelope to contain
the technical proposal and the second envelope to
contain the financial proposal." Moreover, the 1994
Implementing Rules and Regulations (IRR) provide that
only those bidders that have passed the prequalification
stage are permitted to have their two envelopes reviewed.
In other words, prospective bidders must prequalify by
submitting their prequalification documents for evaluation;
and only the pre-qualified bidders would be entitled to
have their bids opened, evaluated and appreciated. On
the other hand, disqualified bidders are to be informed of
the reason for their disqualification. This procedure was
confirmed and reiterated in the Bid Documents, which I
quote thus: "Prequalified proponents will be considered
eligible to move to second stage technical proposal
evaluation. The second and third envelopes of pre-
disqualified proponents will be returned."11
Aside from complying with the legal and technical
requirements (track record or experience of the firm and
its key personnel), a project proponent desiring to
prequalify must also demonstrate its financial capacity to
undertake the project. To establish such capability, a
proponent must prove that it is able to raise the minimum
amount of equity required for the project and to procure
the loans or financing needed for it. Section 5.4(c) of the
1994 IRR provides:
"Sec. 5.4. Prequalification Requirements. - To pre-
qualify, a project proponent must comply with the
following requirements:
xxx xxx xxx
"c. Financial Capability. The project proponent must
have adequate capability to sustain the financing
requirements for the detailed engineering design,
construction, and/or operation and maintenance phases
of the project, as the case may be. For purposes of
prequalification, this capability shall be measured in terms
of: (i) proof of the ability of the project proponent and/or
the consortium to provide a minimum amount of equity to
the project, and (ii) a letter testimonial from reputable
banks attesting that the project proponent and/or
members of the consortium are banking with them, that
they are in good financial standing, and that they have
adequate resources. The government Agency/LGU
concerned shall determine on a project-to-project basis,
and before prequalification, the minimum amount of
equity needed. . . . ." (Italics supplied)
Since the minimum amount of equity for the project was
set at 30 percent12 of the minimum project cost of
US$350 million, the minimum amount of equity required
of any proponent stood at US$105 million. Converted to
pesos at the exchange rate then of P26.239 to US$1.00
(as quoted by the Bangko Sentral ng Pilipinas), the peso
equivalent of the minimum equity was P2,755,095,000.
However, the combined equity or net worth of the
Paircargo consortium stood at only P558,384,871.55.13
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This amount was only slightly over 6 percent of the
minimum project cost and very much short of the required
minimum equity, which was equivalent to 30 percent of
the project cost. Such deficiency should have immediately
caused the disqualification of the Paircargo consortium.
This matter was brought to the attention of the
Prequalification and Bidding Committee (PBAC).
Notwithstanding the glaring deficiency, DOTC
Undersecretary Primitivo C. Cal, concurrent chair of the
PBAC, declared in a Memorandum dated 14 October
1996 that "the Challenger (Paircargo consortium) was
found to have a combined net worth of P3,926,421,242.00
that could support a project costing approximately P13
billion." To justify his conclusion, he asserted: "It is not a
requirement that the networth must be `unrestricted'. To
impose this as a requirement now will be nothing less than
unfair."
He further opined, "(T)he networth reflected in the
Financial Statement should not be taken as the amount of
money to be used to answer the required thirty (30%)
percent equity of the challenger but rather to be used in
establishing if there is enough basis to believe that the
challenger can comply with the required 30% equity. In
fact, proof of sufficient equity is required as one of the
conditions for award of contract (Sec. 12.1 of IRR of the
BOT Law) but not for prequalification (Sec. 5.4 of same
document)."
On the basis of the foregoing dubious declaration, the
Paircargo consortium was deemed prequalified and thus
permitted to proceed to the other stages of the bidding
process.
By virtue of the prequalified status conferred upon the
Paircargo, Undersecretary Cal's findings in effect relieved
the consortium of the need to comply with the financial
capability requirement imposed by the BOT Law and IRR.
This position is unmistakably and squarely at odds with
the Supreme Court's consistent doctrine emphasizing the
strict application of pertinent rules, regulations and
guidelines for the public bidding process, in order to place
each bidder - actual or potential - on the same footing.
Thus, it is unarguably irregular and contrary to the very
concept of public bidding to permit a variance between the
conditions under which bids are invited and those under
which proposals are submitted and approved.
Republic v. Capulong,14 teaches that if one bidder is
relieved from having to conform to the conditions that
impose some duty upon it, that bidder is not contracting in
fair competition with those bidders that propose to be
bound by all conditions. The essence of public bidding is,
after all, an opportunity for fair competition and a basis for
the precise comparison of bids.15 Thus, each bidder must
bid under the same conditions; and be subject to the
same guidelines, requirements and limitations. The
desired result is to be able to determine the best offer or
lowest bid, all things being equal.
Inasmuch as the Paircargo consortium did not possess
the minimum equity equivalent to 30 percent of the
minimum project cost, it should not have been
prequalified or allowed to participate further in the bidding.
The Prequalification and Bidding Committee (PBAC)
should therefore not have opened the two envelopes of
the consortium containing its technical and financial
proposals; required AEDC to match the consortium's bid;
16 or awarded the Concession Agreement to the
consortium's successor-in-interest, Piatco.
As there was effectively no public bidding to speak of, the
entire bidding process having been flawed and tainted
from the very outset, therefore, the award of the
concession to Paircargo's successor Piatco was void, and
the Concession Agreement executed with the latter was
likewise void ab initio. For this reason, Piatco cannot and
should not be allowed to benefit from that Agreement.17
AEDC Was Deprived of the Right to Match PIATCO's
Price Challenge
In DOTC PBAC Bid Bulletin No. 4 (par. 3), Undersecretary
Cal declared that, for purposes of matching the price
challenge of Piatco, AEDC as originator of the unsolicited
proposal would be permitted access only to the schedule
of proposed Annual Guaranteed Payments submitted by
Piatco, and not to the latter's financial and technical
proposals that constituted the basis for the price
challenge in the first place. This was supposedly in
keeping with Section 11.6 of the 1994 IRR, which
provides that proprietary information is to be respected,
protected and treated with utmost confidentiality, and is
therefore not to form part of the bidding/tender and related
documents.
This pronouncement, I believe, was a grievous
misapplication of the mentioned provision. The
"proprietary information" referred to in Section 11.6 of the
IRR pertains only to the proprietary information of the
originator of an unsolicited proposal, and not to those
belonging to a challenger. The reason for the protection
accorded proprietary information at all is the fact that,
according to Section 4-A of the BOT Law as amended, a
proposal qualifies as an "unsolicited proposal" when it
pertains to a project that involves "a new concept or
technology", and/or a project that is not on the
government's list of priority projects.
To be considered as utilizing a new concept or
technology, a project must involve the possession of
exclusive rights (worldwide or regional) over a process; or
possession of intellectual property rights over a design,
methodology or engineering concept.18 Patently, the
intent of the BOT Law is to encourage individuals and
groups to come up with creative innovations, fresh ideas
and new technology. Hence, the significance and
necessity of protecting proprietary information in
connection with unsolicited proposals. And to make the
encouragement real, the law also extends to such
individuals and groups what amounts to a "right of first
refusal" to undertake the project they conceptualized,
involving the use of new technology or concepts, through
the mechanism of matching a price challenge.
A competing bid is never just any figure conjured from out
of the blue; it is arrived at after studying economic,
financial, technical and other, factors; it is likewise based
on certain assumptions as to the nature of the business,
the market potentials, the probable demand for the
product or service, the future behavior of cost items,
political and other risks, and so on. It is thus self-evident
that in order to be able to intelligently match a bid or price
challenge, a bidder must be given access to the
assumptions and the calculations that went into crafting
the competing bid.
In this instance, the financial and technical proposals of
Piatco would have provided AEDC with the necessary
information to enable it to make a reasonably informed
matching bid. To put it more simply, a bidder unable to
access the competitor's assumptions will never figure out
how the competing bid came about; requiring him to
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"counter-propose" is like having him shoot at a target in
the dark while blindfolded.
By withholding from AEDC the challenger's financial and
technical proposals containing the critical information it
needed, Undersecretary Cal actually and effectively
deprived AEDC of the ability to match the price challenge.
One could say that AEDC did not have the benefit of a
"level playing field." It seems to me, though, that AEDC
was actually shut out of the game altogether.
At the end of the day, the bottom line is that the validity
and the propriety of the award to Piatco had been
irreparably impaired.
Delayed Issuance of the Notice of Award Violated the
BOT Law and the IRR
Section 9.5 of the IRR requires that the Notice of Award
must indicate the time frame within which the winner of
the bidding (and therefore the prospective awardee) shall
submit the prescribed performance security, proof of
commitment of equity contributions, and indications of
sources of financing (loans); and, in the case of joint
ventures, an agreement showing that the members are
jointly and severally responsible for the obligations of the
project proponent under the contract.
The purpose of having a definite and firm timetable for the
submission of the aforementioned requirements is not
only to prevent delays in the project implementation, but
also to expose and weed out unqualified proponents, who
might have unceremoniously slipped through the earlier
prequalification process, by compelling them to put their
money where their mouths are, so to speak.
Nevertheless, this provision can be easily circumvented
by merely postponing the actual issuance of the Notice of
Award, in order to give the favored proponent sufficient
time to comply with the requirements. Hence, to avert or
minimize the manipulation of the post-bidding process,
the IRR not only set out the precise sequence of events
occurring between the completion of the evaluation of the
technical bids and the issuance of the Notice of Award,
but also specified the timetables for each such event.
Definite allowable extensions of time were provided for,
as were the consequences of a failure to meet a particular
deadline.
In particular, Section 9.1 of the 1994 IRR prescribed that
within 30 calendar days from the time the second-stage
evaluation shall have been completed, the Committee
must come to a decision whether or not to award the
contract and, within 7 days therefrom, the Notice of Award
must be approved by the head of agency or local
government unit (LGU) concerned, and its issuance must
follow within another 7 days thereafter.
Section 9.2 of the IRR set the procedure applicable to
projects involving substantial government undertakings
as follows: Within 7 days after the decision to award is
made, the draft contract shall be submitted to the ICC for
clearance on a no-objection basis. If the draft contract
includes government undertakings already previously
approved, then the submission shall be for information
only.
However, should there be additional or new provisions
different from the original government undertakings, the
draft shall have to be reviewed and approved. The ICC
has 15 working days to act thereon, and unless otherwise
specified, its failure to act on the contract within the
specified time frame signifies that the agency or LGU may
proceed with the award. The head of agency or LGU shall
approve the Notice of Award within seven days of the
clearance by the ICC on a no-objection basis, and the
Notice itself has to be issued within seven days thereafter.
The highly regulated time-frames within which the agents
of government were to act evinced the intent to impose
upon them the duty to act expeditiously throughout the
process, to the end that the project be prosecuted and
implemented without delay. This regulated scenario was
likewise intended to discourage collusion and
substantially reduce the opportunity for agents of
government to abuse their discretion in the course of the
award process.
Despite the clear timetables set out in the IRR, several
lengthy and still-unexplained delays occurred in the award
process, as can be observed from the presentation made
by the counsel for public respondents,19 quoted
hereinbelow:
"11 Dec. 1996 - The Paircargo Joint Venture was
informed by the PBAC that AEDC failed to match and that
negotiations preparatory to Notice of Award should be
commenced. This was the decision to award that should
have commenced the running of the 7-day period to
approve the Notice of Award, as per Section 9.1 of the
IRR, or to submit the draft contract to the ICC for approval
conformably with Section 9.2.
"01 April 1997 - The PBAC resolved that a copy of the
final draft of the Concession Agreement be submitted to
the NEDA for clearance on a no-objection basis. This
resolution came more than 3 months too late as it should
have been made on the 20th of December 1996 at the
latest.
"16 April 1997 - The PBAC resolved that the period of
signing the Concession Agreement be extended by 15
days.
"18 April 1997 - NEDA approved the Concession
Agreement. Again this is more than 3 months too late as
the NEDA's decision should have been released on the
16th of January 1997 or fifteen days after it should have
been submitted to it for review.
"09 July 1997 - The Notice of Award was issued to
PIATCO. Following the provisions of the IRR, the Notice
of Award should have been issued fourteen days after
NEDA's approval, or the 28th of January 1997. In any
case, even if it were to be assumed that the release of
NEDA's approval on the 18th of April was timely, the
Notice of Award should have been issued on the 9th of
May 1997. In both cases, therefore, the release of the
Notice of Award occurred in a decidedly less than timely
fashion."
This chronology of events bespeaks an unmistakable
disregard, if not disdain, by the persons in charge of the
award process for the time limitations prescribed by the
IRR. Their attitude flies in the face of this Court's solemn
pronouncement in Republic v. Capulong,20 that "strict
observance of the rules, regulations and guidelines of the
bidding process is the only safeguard to a fair, honest and
competitive public bidding."
From the foregoing, the only conclusion that can possibly
be drawn is that the BOT law and its IRR were repeatedly
violated with unmitigated impunity - and by agents of
government, no less! On account of such violation, the
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award of the contract to Piatco, which undoubtedly gained
time and benefited from the delays, must be deemed null
and void from the beginning.
Further Amendments Resulted in a Substantially Different
Contract, Awarded Without Public Bidding
But the violations and desecrations did not stop there.
After the PBAC made its decision on December 11, 1996
to award the contract to Piatco, the latter negotiated
changes to the Contract bidded out and ended up with
what amounts to a substantially new contract without any
public bidding. This Contract was subsequently further
amended four more times through negotiation and without
any bidding. Thus, the contract actually executed
between Piatco and DOTC/MIAA on July 12, 1997 (the
Concession Agreement or "CA") differed from the contract
bidded out (the draft concession agreement or "DCA") in
the following very significant respects:
1. The CA inserted stipulations creating a monopoly
in favor of Piatco in the business of providing airport-
related services for international airlines and
passengers.21
2. The CA provided that government is to answer for
Piatco's unpaid loans and debts (lumped under the term
Attendant Liabilities) in the event Piatco fails to pay its
senior lenders.22
3. The CA provided that in case of termination of the
contract due to the fault of government, government shall
pay all expenses that Piatco incurred for the project plus
the appraised value of the Terminal.23
4. The CA imposed new and special obligations on
government, including delivery of clean possession of the
site for the terminal; acquisition of additional land at the
government's expense for construction of road networks
required by Piatco's approved plans and specifications;
and assistance to Piatco in securing site utilities, as well
as all necessary permits, licenses and authorizations.24
5. Where Section 3.02 of the DCA requires
government to refrain from competing with the contractor
with respect to the operation of NAIA Terminal III, Section
3.02(b) of the CA excludes and prohibits everyone,
including government, from directly or indirectly
competing with Piatco, with respect to the operation of, as
well as operations in, NAIA Terminal III. Operations in is
sufficiently broad to encompass all retail and other
commercial business enterprises operating within
Terminal III, inclusive of the businesses of providing
various airport-related services to international airlines,
within the scope of the prohibition.
6. Under Section 6.01 of the DCA, the following fees
are subject to the written approval of MIAA: lease/rental
charges, concession privilege fees for passenger
services, food services, transportation utility concessions,
groundhandling, catering and miscellaneous concession
fees, porterage fees, greeter/well-wisher fees, carpark
fees, advertising fees, VIP facilities fees and others.
Moreover, adjustments to the groundhandling fees,
rentals and porterage fees are permitted only once every
two years and in accordance with a parametric formula,
per DCA Section 6.03. However, the CA as executed with
Piatco provides in Section 6.06 that all the aforesaid fees,
rentals and charges may be adjusted without MIAA's
approval or intervention. Neither are the adjustments to
these fees and charges subject to or limited by any
parametric formula.25
7. Section 1.29 of the DCA provides that the
terminal fees, aircraft tacking fees, aircraft parking fees,
check-in counter fees and other fees are to be quoted and
paid in Philippine pesos. But per Section 1.33 of the CA,
all the aforesaid fees save the terminal fee are
denominated in US Dollars.
8. Under Section 8.07 of the DCA, the term
attendant liabilities refers to liabilities pertinent to NAIA
Terminal III, such as payment of lease rentals and
performance of other obligations under the Land Lease
Agreement; the obligations under the Tenant
Agreements; and payment of all taxes, fees, charges and
assessments of whatever kind that may be imposed on
NAIA Terminal III or parts thereof. But in Section 1.06 of
the CA, Attendant Liabilities refers to unpaid debts of
Piatco: "All amounts recorded and from time to time
outstanding in the books of (Piatco) as owing to Unpaid
Creditors who have provided, loaned or advanced funds
actually used for the Project, including all interests,
penalties, associated fees, charges, surcharges,
indemnities, reimbursements and other related expenses,
and further including amounts owed by [Piatco] to its
suppliers, contractors and subcontractors."
9. Per Sections 8.04 and 8.06 of the DCA,
government may, on account of the contractors breach,
rescind the contract and select one of four options: (a)
take over the terminal and assume all its attendant
liabilities; (b) allow the contractor's creditors to assign the
Project to another entity acceptable to DOTC/MIAA; (c)
pay the contractor rent for the facilities and equipment the
DOTC may utilize; or (d) purchase the terminal at a price
established by independent appraisers. Depending on the
option selected, government may take immediate
possession and control of the terminal and its operations.
Government will be obligated to compensate the
contractor for the "equivalent or proportionate contract
costs actually disbursed," but only where government is
the one in breach of the contract. But under Section
8.06(a) of the CA, whether on account of Piatco's breach
of contract or its inability to pay its creditors, government
is obliged to either (a) take over Terminal III and assume
all of Piatco's debts or (b) permit the qualified unpaid
creditors to be substituted in place of Piatco or to
designate a new operator. And in the event of
government's breach of contract, Piatco may compel it to
purchase the terminal at fair market value, per Section
8.06(b) of the CA.
10. Under the DCA, any delay by Piatco in the
payment of the amounts due the government constitutes
breach of contract. However, under the CA, such delay
does not necessarily constitute breach of contract, since
Piatco is permitted to suspend payments to the
government in order to first satisfy the claims of its
secured creditors, per Section 8.04(d) of the CA.
It goes without saying that the amendment of the Contract
bidded out (the DCA or draft concession agreement) - in
such substantial manner, without any public bidding, and
after the bidding process had been concluded on
December 11, 1996 - is violative of public policy on public
biddings, as well as the spirit and intent of the BOT Law.
The whole point of going through the public bidding
exercise was completely lost. Its very rationale was totally
subverted by permitting Piatco to amend the contract for
which public bidding had already been concluded.
Competitive bidding aims to obtain the best deal possible
by fostering transparency and preventing favoritism,
collusion and fraud in the awarding of contracts. That is
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the reason why procedural rules pertaining to public
bidding demand strict observance.26
In a relatively early case, Caltex v. Delgado Brothers,27
this Court made it clear that substantive amendments to
a contract for which a public bidding has already been
finished should only be awarded after another public
bidding:
"The due execution of a contract after public bidding is a
limitation upon the right of the contracting parties to alter
or amend it without another public bidding, for otherwise
what would a public bidding be good for if after the
execution of a contract after public bidding, the
contracting parties may alter or amend the contract, or
even cancel it, at their will? Public biddings are held for
the protection of the public, and to give the public the best
possible advantages by means of open competition
between the bidders. He who bids or offers the best terms
is awarded the contract subject of the bid, and it is obvious
that such protection and best possible advantages to the
public will disappear if the parties to a contract executed
after public bidding may alter or amend it without another
previous public bidding."28
The aforementioned case dealt with the unauthorized
amendment of a contract executed after public bidding; in
the situation before us, the amendments were made also
after the bidding, but prior to execution. Be that as it may,
the same rationale underlying Caltex applies to the
present situation with equal force. Allowing the winning
bidder to renegotiate the contract for which the bidding
process has ended is tantamount to permitting it to put in
anything it wants. Here, the winning bidder (Piatco) did
not even bother to wait until after actual execution of the
contract before rushing to amend it. Perhaps it believed
that if the changes were made to a contract already won
through bidding (DCA) instead of waiting until it is
executed, the amendments would not be noticed or
discovered by the public.
In a later case, Mata v. San Diego,29 this Court reiterated
its ruling as follows:
"It is true that modification of government contracts, after
the same had been awarded after a public bidding, is not
allowed because such modification serves to nullify the
effects of the bidding and whatever advantages the
Government had secured thereby and may also result in
manifest injustice to the other bidders. This prohibition,
however, refers to a change in vital and essential
particulars of the agreement which results in a
substantially new contract."
Piatco's counter-argument may be summed up thus:
There was nothing in the 1994 IRR that prohibited further
negotiations and eventual amendments to the DCA even
after the bidding had been concluded. In fact, PBAC Bid
Bulletin No. 3 states: "[A]mendments to the Draft
Concession Agreement shall be issued from time to time.
Said amendments will only cover items that would not
materially affect the preparation of the proponent's
proposal."
I submit that accepting such warped argument will result
in perverting the policy underlying public bidding. The
BOT Law cannot be said to allow the negotiation of
contractual stipulations resulting in a substantially new
contract after the bidding process and price challenge had
been concluded. In fact, the BOT Law, in recognition of
the time, money and effort invested in an unsolicited
proposal, accords its originator the privilege of matching
the challenger's bid.
Section 4-A of the BOT Law specifically refers to a "lower
price proposal" by a competing bidder; and to the right of
the original proponent "to match the price" of the
challenger. Thus, only the price proposals are in play. The
terms, conditions and stipulations in the contract for which
public bidding has been concluded are understood to
remain intact and not be subject to further negotiation.
Otherwise, the very essence of public bidding will be
destroyed - there will be no basis for an exact comparison
between bids.
Moreover, Piatco misinterpreted the meaning behind
PBAC Bid Bulletin No. 3. The phrase amendments . . .
from time to time refers only to those amendments to the
draft concession agreement issued by the PBAC prior to
the submission of the price challenge; it certainly does not
include or permit amendments negotiated for and
introduced after the bidding process, has been
terminated.
Piatco's Concession Agreement Was Further Amended,
(ARCA) Again Without Public Bidding
Not satisfied with the Concession Agreement, Piatco -
once more without bothering with public bidding -
negotiated with government for still more substantial
changes. The result was the Amended and Restated
Concession Agreement (ARCA) executed on November
26, 1998. The following changes were introduced:
1. The definition of Attendant Liabilities was further
amended with the result that the unpaid loans of Piatco,
for which government may be required to answer, are no
longer limited to only those loans recorded in Piatco's
books or loans whose proceeds were actually used in the
Terminal III project.30
2. Although the contract may be terminated due to
breach by Piatco, it will not be liable to pay the
government any Liquidated Damages if a new operator is
designated to take over the operation of the terminal.31
3. The Liquidated Damages which government
becomes liable for in case of its breach of contract were
substantially increased.32
4. Government's right to appoint a comptroller for
Piatco in case the latter encounters liquidity problems was
deleted.33
5. Government is made liable for Incremental and
Consequential Costs and Losses in case it fails to comply
or cause any third party under its direct or indirect control
to comply with the special obligations imposed on
government.34
6. The insurance policies obtained by Piatco
covering the terminal are now required to be assigned to
the Senior Lenders as security for the loans; previously,
their proceeds were to be used to repair and rehabilitate
the facility in case of damage.35
7. Government bound itself to set the initial rate of
the terminal fee, to be charged when Terminal III begins
operations, at an amount higher than US$20.36
8. Government waived its defense of the illegality of
the contract and even agreed to be liable to pay damages
to Piatco in the event the contract was declared illegal.37
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9. Even though government may be entitled to
terminate the ARCA on account of breach by Piatco,
government is still liable to pay Piatco the appraised value
of Terminal III or the Attendant Liabilities, if the
termination occurs before the In-Service Date.38 This
condition contravenes the BOT Law provision on
termination compensation.
10. Government is obligated to take the
administrative action required for Piatco's imposition,
collection and application of all Public Utility Revenues.39
No such obligation existed previously.
11. Government is now also obligated to perform and
cause other persons and entities under its direct or
indirect control to perform all acts necessary to perfect the
security interests to be created in favor of Piatco's Senior
Lenders.40 No such obligation existed previously.
12. DOTC/MIAA's right of intervention in instances
where Piatco's Non-Public Utility Revenues become
exorbitant or excessive has been removed.41
13. The illegality and unenforceability of the ARCA or
any of its material provisions was made an event of
default on the part of government only, thus constituting a
ground for Piatco to terminate the ARCA.42
14. Amounts due from and payable by government
under the contract were made payable on demand - net
of taxes, levies, imposts, duties, charges or fees of any
kind except as required by law.43
15. The Parametric Formula in the contract, which is
utilized to compute for adjustments/increases to the public
utility revenues (i.e., aircraft parking and tacking fees,
check-in counter fee and terminal fee), was revised to
permit Piatco to input its more costly short-term borrowing
rates instead of the longer-terms rates in the
computations for adjustments, with the end result that the
changes will redound to its greater financial benefit.
16. The Certificate of Completion simply deleted the
successful performance-testing of the terminal facility in
accordance with defined performance standards as a pre-
condition for government's acceptance of the terminal
facility.44
In sum, the foregoing revisions and amendments as
embodied in the ARCA constitute very material alterations
of the terms and conditions of the CA, and give further
manifestly undue advantage to Piatco at the expense of
government. Piatco claims that the changes to the CA
were necessitated by the demands of its foreign lenders.
However, no proof whatsoever has been adduced to
buttress this claim.
In any event, it is quite patent that the sum total of the
aforementioned changes resulted in drastically
weakening the position of government to a degree that
seems quite excessive, even from the standpoint of a
businessperson who regularly transacts with banks and
foreign lenders, is familiar with their mind-set, and
understands what motivates them. On the other hand,
whatever it was that impelled government officials
concerned to accede to those grossly disadvantageous
changes, I can only hazard a guess.
There is no question in my mind that the ARCA was
unauthorized and illegal for lack of public bidding and for
being patently disadvantageous to government.
The Three Supplements Imposed New Obligations on
Government, Also Without Prior Public Bidding
After Piatco had managed to breach the protective
rampart of public bidding, it recklessly went on a rampage
of further assaults on the ARCA.
The First Supplement Is as Void as the ARCA
In the First Supplement ("FS") executed on August 27,
1999, the following changes were made to the ARCA:
1. The amounts payable by Piatco to government
were reduced by allowing additional exceptions to the
Gross Revenues in which government is supposed to
participate.45
2. Made part of the properties which government is
obliged to construct and/or maintain and keep in good
repair are (a) the access road connecting Terminals II and
III - the construction of this access road is the obligation
of Piatco, in lieu of its obligation to construct an Access
Tunnel connecting Terminals II and III; and (b) the
taxilane and taxiway - these are likewise part of Piatco's
obligations, since they are part and parcel of the project
as described in Clause 1.3 of the Bid Documents .46
3. The MIAA is obligated to provide funding for the
maintenance and repair of the airports and facilities
owned or operated by it and by third persons under its
control. It will also be liable to Piatco for the latter's losses,
expenses and damages as well as liability to third
persons, in case MIAA fails to perform such obligations.
In addition, MIAA will also be liable for the incremental
and consequential costs of the remedial work done by
Piatco on account of the former's default.47
4. The FS also imposed on government ten (10)
"Additional Special Obligations," including the following:
(a) Working for the removal of the general aviation
traffic from the NAIA airport complex48
(b) Providing through MIAA the land required by
Piatco for the taxilane and one taxiway at no cost to
Piatco49
(c) Implementing the government's existing storm
drainage master plan50
(d) Coordinating with DPWH the financing, the
implementation and the completion of the following works
before the In-Service Date: three left-turning overpasses
(EDSA to Tramo St., Tramo to Andrews Ave., and
Manlunas Road to Sales Ave.);51 and a road upgrade
and improvement program involving widening, repair and
resurfacing of Sales Road, Andrews Avenue and
Manlunas Road; improvement of Nichols Interchange;
and removal of squatters along Andrews Avenue.52
(e) Dealing directly with BCDA and the Phil. Air Force
in acquiring additional land or right of way for the road
upgrade and improvement program.53
5. Government is required to work for the immediate
reversion to MIAA of the Nayong Pilipino National Park.54
6. Government's share in the terminal fees collected
was revised from a flat rate of P180 to 36 percent thereof;
together with government's percentage share in the gross
revenues of Piatco, the amount will be remitted to
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government in pesos instead of US dollars.55 This
amendment enables Piatco to benefit from the further
erosion of the peso-dollar exchange rate, while preventing
government from building up its foreign exchange
reserves.
7. All payments from Piatco to government are now
to be invoiced to MIAA, and payments are to accrue to the
latter's exclusive benefit.56 This move appears to be in
support of the funds MIAA advanced to DPWH.
I must emphasize that the First Supplement is void in two
respects. First, it is merely an amendment to the ARCA,
upon which it is wholly dependent; therefore, since the
ARCA is void, inexistent and not capable of being ratified
or amended, it follows that the FS too is void, inexistent
and inoperative. Second, even assuming arguendo that
the ARCA is somehow remotely valid, nonetheless the
FS, in imposing significant new obligations upon
government, altered the fundamental terms and
stipulations of the ARCA, thus necessitating a public
bidding all over again. That the FS was entered into sans
public bidding renders it utterly void and inoperative.
The Second Supplement Is Similarly Void and Inexistent
The Second Supplement ("SS") was executed between
the government and Piatco on September 4, 2000. It calls
for Piatco, acting not as concessionaire of NAIA Terminal
III but as a public works contractor, to undertake - in the
government's stead - the clearing, removal, demolition
and disposal of improvements, subterranean obstructions
and waste materials at the project site.57
The scope of the works, the procedures involved, and the
obligations of the contractor are provided for in Parts II
and III of the SS. Section 4.1 sets out the compensation
to be paid, listing specific rates per cubic meter of
materials for each phase of the work - excavation,
leveling, removal and disposal, backfilling and
dewatering. The amounts collectible by Piatco are to be
offset against the Annual Guaranteed Payments it must
pay government.
Though denominated as Second Supplement, it was
nothing less than an entirely new public works contract.
Yet it, too, did not undergo any public bidding, for which
reason it is also void and inoperative.
Not surprisingly, Piatco had to subcontract the works to a
certain Wintrack Builders, a firm reputedly owned by a
former high-ranking DOTC official. But that is another
story altogether.
The Third Supplement Is Likewise Void and Inexistent
The Third Supplement ("TS"), executed between the
government and Piatco on June 22, 2001, passed on to
the government certain obligations of Piatco as Terminal
III concessionaire, with respect to the surface road
connecting Terminals II and III.
By way of background, at the inception of and forming part
of the NAIA Terminal III project was the proposed
construction of an access tunnel crossing Runway 13/31,
which. would connect Terminal III to Terminal II. The Bid
Documents in Section 4.1.2.3[B][i] declared that the said
access tunnel was subject to further negotiation; but for
purposes of the bidding, the proponent should submit a
bid for it as well. Therefore, the tunnel was supposed to
be part and parcel of the Terminal III project.
However, in Section 5 of the First Supplement, the parties
declared that the access tunnel was not economically
viable at that time. In lieu thereof, the parties agreed that
a surface access road (now called the T2-T3 Road) was
to be constructed by Piatco to connect the two terminals.
Since it was plainly in substitution of the tunnel, the
surface road construction should likewise be considered
part and parcel of the same project, and therefore part of
Piatco's obligation as well. While the access tunnel was
estimated to cost about P800 million, the surface road
would have a price tag in the vicinity of about P100 million,
thus producing significant savings for Piatco.
Yet, the Third Supplement, while confirming that Piatco
would construct the T2-T3 Road, nevertheless shifted to
government some of the obligations pertaining to the
former, as follows:
1. Government is now obliged to remove at its own
expense all tenants, squatters, improvements and/or
waste materials on the site where the T2-T3 road is to be
constructed.58 There was no similar obligation on the part
of government insofar as the access tunnel was
concerned.
2. Should government fail to carry out its obligation
as above described, Piatco may undertake it on
government's behalf, subject to the terms and conditions
(including compensation payments) contained in the
Second Supplement.59
3. MIAA will answer for the operation, maintenance
and repair of the T2-T3 Road.60
The TS depends upon and is intended to supplement the
ARCA as well as the First Supplement, both of which are
void and inexistent and not capable of being ratified or
amended. It follows that the TS is likewise void, inexistent
and inoperative. And even if, hypothetically speaking,
both ARCA and FS are valid, still, the Third Supplement -
imposing as it does significant new obligations upon
government - would in effect alter the terms and
stipulations of the ARCA in material respects, thus
necessitating another public bidding. Since the TS was
not subjected to public bidding, it is consequently utterly
void as well. At any rate, the TS created new monetary
obligations on the part of government, for which there
were no prior appropriations. Hence it follows that the
same is void ab initio.
In patiently tracing the progress of the Piatco contracts
from their inception up to the present, I noted that the
whole process was riddled with significant lapses, if not
outright irregularity and wholesale violations of law and
public policy. The rationale of beginning at the beginning,
so to speak, will become evident when the question of
what to do with the five Piatco contracts is discussed later
on.
In the meantime, I shall take up specific, provisions or
changes in the contracts and highlight the more prominent
objectionable features.
Government Directly Guarantees Piatco Debts
Certainly the most discussed provision in the parties'
arguments is the one creating an unauthorized, direct
government guarantee of Piatco's obligations in favor of
the lenders.
Section 4-A of the BOT Law as amended states that
unsolicited proposals, such as the NAIA Terminal III
105
Project, may be accepted by government provided inter
alia that no direct government guarantee, subsidy or
equity is required. In short, such guarantee is prohibited
in unsolicited proposals. Section 2(n) of the same
legislation defines direct government guarantee as "an
agreement whereby the government or any of its
agencies or local government units (will) assume
responsibility for the repayment of debt directly incurred
by the project proponent in implementing the project in
case of a loan default."
Both the CA and the ARCA have provisions that
undeniably create such prohibited government
guarantee. Section 4.04 (c)(iv) to (vi) of the ARCA, which
is similar to Section 4.04 of the CA, provides thus:
"(iv) that if Concessionaire is in default under a
payment obligation owed to the Senior Lenders, and as a
result thereof the Senior Lenders have become entitled to
accelerate the Senior Loans, the Senior Lenders shall
have the right to notify GRP of the same . . .;
(v) . . . the Senior Lenders may after written
notification to GRP, transfer the Concessionaire's rights
and obligations to a transferee . . .;
(vi) if the Senior Lenders . . . are unable to . . . effect
a transfer . . ., then GRP and the Senior Lenders shall
endeavor . . . to enter into any other arrangement relating
to the Development Facility . . . If no agreement relating
to the Development Facility is arrived at by GRP and the
Senior Lenders within the said 180-day period, then at the
end thereof the Development Facility shall be transferred
by the Concessionaire to GRP or its designee and GRP
shall make a termination payment to Concessionaire
equal to the Appraised Value (as hereinafter defined) of
the Development Facility or the sum of the Attendant
Liabilities, if greater. . . ."
In turn, the term Attendant Liabilities is defined in Section
1.06 of the ARCA as follows:
"Attendant Liabilities refer to all amounts in each case
supported by verifiable evidence from time to time owed
or which may become, owing by Concessionaire to Senior
Lenders or any other persons or entities who have
provided, loaned or advanced funds or provided financial
facilities to Concessionaire for the Project, including,
without limitation, all principal, interest, associated fees,
charges, reimbursements, and other related expenses
(including the fees, charges and expenses of any agents
or trustees of such persons or entities), whether payable
at maturity, by acceleration or otherwise, and further
including amounts owed by Concessionaire to its
professional consultants and advisers, suppliers,
contractors and sub-contractors."
Government's agreement to pay becomes effective in the
event of a default by Piatco on any of its loan obligations
to the Senior Lenders, and the amount to be paid by
government is the greater of either the Appraised Value
of Terminal III or the aggregate amount of the moneys
owed by Piatco - whether to the Senior Lenders or to other
entities, including its suppliers, contractors and
subcontractors. In effect, therefore, this agreement
already constitutes the prohibited assumption by
government of responsibility for repayment of Piatco's
debts in case of a loan default. In fine, a direct government
guarantee.
It matters not that there is a roundabout procedure
prescribed by Section 4.04(c)(iv), (v) and (vi) that would
require, first, an attempt (albeit unsuccessful) by the
Senior Lenders to transfer Piatco's rights to a transferee
of their choice; and, second, an effort (equally
unsuccessful) to "enter into any other arrangement" with
the government regarding the Terminal III facility, before
government is required to make good on its guarantee.
What is abundantly clear is the fact that, in the devious
labyrinthine process detailed in the aforesaid section, it is
entirely within the Senior Lenders' power, prerogative and
control - exercisable via a mere refusal or inability to
agree upon "a transferee" or "any other arrangement"
regarding the terminal facility - to push the process
forward to the ultimate contractual cul-de-sac, wherein
government will be compelled to abjectly surrender and
make good on its guarantee of payment.
Piatco also argues that there is no proviso requiring
government to pay the Senior Lenders in the event of
Piatco's default. This is literally true, in the sense that
Section 4.04(c)(vi) of ARCA speaks of government
making the termination payment to Piatco, not to the
lenders. However, it is almost a certainty that the Senior
Lenders will already have made Piatco sign over to them,
ahead of time, its right to receive such payments from
government; and/or they may already have had
themselves appointed its attorneys-in-fact for the purpose
of collecting and receiving such payments.
Nevertheless, as petitioners-in-intervention pointed out in
their Memorandum,61 the termination payment is to be
made to Piatco, not to the lenders; and there is no
provision anywhere in the contract documents to prevent
it from diverting the proceeds to its own benefit and/or to
ensure that it will necessarily use the same to pay off the
Senior Lenders and other creditors, in order to avert the
foreclosure of the mortgage and other liens on the
terminal facility. Such deficiency puts the interests of
government at great risk. Indeed, if the unthinkable were
to happen, government would be paying several
hundreds of millions of dollars, but the mortgage liens on
the facility may still be foreclosed by the Senior Lenders
just the same.
Consequently, the Piatco contracts are also objectionable
for grievously failing to adequately protect government's
interests. More accurately, the contracts would
consistently weaken and do away with protection of
government interests. As such, they are therefore grossly
lopsided in favor of Piatco and/or its Senior Lenders.
While on this subject, it is well to recall the earlier
discussion regarding a particularly noticeable alteration of
the concept of "Attendant Liabilities." In Section 1.06 of
the CA defining the term, the Piatco debts to be
assumed/paid by government were qualified by the
phrases recorded and from time to time outstanding in the
books of the Concessionaire and actually used for the
project. These phrases were eliminated from the ARCA's
definition of Attendant Liabilities.
Since no explanation has been forthcoming from Piatco
as to the possible justification for such a drastic change,
the only conclusion, possible is that it intends to have all
of its debts covered by the guarantee, regardless of
whether or not they are disclosed in its books. This has
particular reference to those borrowings which were
obtained in violation of the loan covenants requiring
Piatco to maintain a minimum 70:30 debt-to-equity ratio,
and even if the loan proceeds were not actually used for
the project itself.
106
This point brings us back to the guarantee itself. In
Section 4.04(c)(vi) of ARCA, the amount which
government has guaranteed to pay as termination
payment is the greater of either (i) the Appraised Value of
the terminal facility or (ii) the aggregate of the Attendant
Liabilities. Given that the Attendant Liabilities may include
practically any Piatco debt under the sun, it is highly
conceivable that their sum may greatly exceed the
appraised value of the facility, and government may end
up paying very much more than the real worth of Terminal
III. (So why did government have to bother with public
bidding anyway?)
In the final analysis, Section 4.04(c)(iv) to (vi) of the ARCA
is diametrically at odds with the spirit and the intent of the
BOT Law. The law meant to mobilize private resources
(the private sector) to take on the burden and the risks of
financing the construction, operation and maintenance of
relevant infrastructure and development projects for the
simple reason that government is not in a position to do
so. By the same token, government guarantee was
prohibited, since it would merely defeat the purpose and
raison d'être of a build-operate-and-transfer project to be
undertaken by the private sector.
To the extent that the project proponent is able to obtain
loans to fund the project, those risks are shared between
the project proponent on the one hand, and its banks and
other lenders on the other. But where the proponent or its
lenders manage to cajol or coerce the government into
extending a guarantee of payment of the loan obligations,
the risks assumed by the lenders are passed right back to
government. I cannot understand why, in the instant case,
government cheerfully assented to re-assuming the risks
of the project when it gave the prohibited guarantee and
thus simply negated the very purpose of the BOT Law and
the protection it gives the government.
Contract Termination Provisions in the Piatco Contracts
Are Void
The BOT Law as amended provides for contract
termination as follows:
"Sec. 7. Contract Termination. - In the event that a project
is revoked, cancelled or terminated by the government
through no fault of the project proponent or by mutual
agreement, the Government shall compensate the said
project proponent for its actual expenses incurred in the
project plus a reasonable rate of return thereon not
exceeding that stated in the contract as of the date of such
revocation, cancellation or termination: Provided, That the
interest of the Government in this instances [sic] shall be
duly insured with the Government Service Insurance
System or any other insurance entity duly accredited by
the Office of the Insurance Commissioner: Provided,
finally, That the cost of the insurance coverage shall be
included in the terms and conditions of the bidding
referred to above.
"In the event that the government defaults on certain
major obligations in the contract and such failure is not
remediable or if remediable shall remain unremedied for
an unreasonable length of time, the project
proponent/contractor may, by prior notice to the
concerned national government agency or local
government unit specifying the turn-over date, terminate
the contract. The project proponent/contractor shall be
reasonably compensated by the Government for
equivalent or proportionate contract cost as defined in the
contract."
The foregoing statutory provision in effect provides for the
following limited instances when termination
compensation may be allowed:
1. Termination by the government through no fault
of the project proponent
2. Termination upon the parties' mutual agreement
3. Termination by the proponent due to
government's default on certain major contractual
obligations
To emphasize, the law does not permit compensation for
the project proponent when contract termination is due to
the proponent's own fault or breach of contract.
This principle was clearly violated in the Piatco Contracts.
The ARCA stipulates that government is to pay
termination compensation to Piatco even when
termination is initiated by government for the following
causes:
"(i) Failure of Concessionaire to finish the Works in
all material respects in accordance with the Tender
Design and the Timetable;
(ii) Commission by Concessionaire of a material
breach of this Agreement . . .;
(iii) . . . a change in control of Concessionaire arising
from the sale, assignment, transfer or other disposition of
capital stock which results in an ownership structure
violative of statutory or constitutional limitations;
(iv) A pattern of continuing or repeated non-
compliance, willful violation, or non-performance of other
terms and conditions hereof which is hereby deemed a
material breach of this Agreement . . ."62
As if that were not bad enough, the ARCA also inserted
into Section 8.01 the phrase "Subject to Section 4.04."
The effect of this insertion is that in those instances where
government may terminate the contract on account of
Piatco's breach, and it is nevertheless required under the
ARCA to make termination compensation to Piatco even
though unauthorized by law, such compensation is to be
equivalent to the payment amount guaranteed by
government - either a) the Appraised Value of the terminal
facility or (b) the aggregate of the Attendant Liabilities,
whichever amount is greater!
Clearly, this condition is not in line with Section 7 of the
BOT Law. That provision permits a project proponent to
recover the actual expenses it incurred in the prosecution
of the project plus a reasonable rate of return not in
excess of that provided in the contract; or to be
compensated for the equivalent or proportionate contract
cost as defined in the contract, in case the government is
in default on certain major contractual obligations.
Furthermore, in those instances where such termination
compensation is authorized by the BOT Law, it is
indispensable that the interest of government be duly
insured. Section 5.08 the ARCA mandates insurance
coverage for the terminal facility; but all insurance policies
are to be assigned, and all proceeds are payable, to the
Senior Lenders. In brief, the interest being secured by
such coverage is that of the Senior Lenders, not that of
government. This can hardly be considered compliance
with law.
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In essence, the ARCA provisions on termination
compensation result in another unauthorized government
guarantee, this time in favor of Piatco.
A Prohibited Direct Government Subsidy, Which at the
Same Time Is an Assault on the National Honor
Still another contractual provision offensive to law and
public policy is Section 8.01(d) of the ARCA, which is a
"bolder and badder" version of Section 8.04(d) of the CA.
It will be recalled that Section 4-A of the BOT Law as
amended prohibits not only direct government
guarantees, but likewise a direct government subsidy for
unsolicited proposals. Section 13.2. b. iii. of the 1999 IRR
defines a direct government subsidy as encompassing
"an agreement whereby the Government . . . will . . .
postpone any payments due from the proponent."
Despite the statutory ban, Section 8.01 (d) of the ARCA
provides thus:
"(d) The provisions of Section 8.01(a)
notwithstanding, and for the purpose of preventing a
disruption of the operations in the Terminal and/or
Terminal Complex, in the event that at any time
Concessionaire is of the reasonable opinion that it shall
be unable to meet a payment obligation owed to the
Senior Lenders, Concessionaire shall give prompt notice
to GRP, through DOTC/MIAA and to the Senior Lenders.
In such circumstances, the Senior Lenders (or the Senior
Lenders' Representative) may ensure that after making
provision for administrative expenses and depreciation,
the cash resources of Concessionaire shall first be used
and applied to meet all payment obligations owed to the
Senior Lenders. Any excess cash, after meeting such
payment obligations, shall be earmarked for the payment
of all sums payable by Concessionaire to GRP under this
Agreement. If by reason of the foregoing GRP should be
unable to collect in full all payments due to GRP under
this Agreement, then the unpaid balance shall be payable
within a 90-day grace period counted from the relevant
due date, with interest per annum at the rate equal to the
average 91-day Treasury Bill Rate as of the auction date
immediately preceding the relevant due date. If payment
is not effected by Concessionaire within the grace period,
then a spread of five (5%) percent over the applicable 91-
day Treasury Bill Rate shall be added on the unpaid
amount commencing on the expiry of the grace period up
to the day of full payment. When the temporary illiquidity
of Concessionaire shall have been corrected and the cash
position of Concessionaire should indicate its ability to
meet its maturing obligations, then the provisions set forth
under this Section 8.01(d) shall cease to apply. The
foregoing remedial measures shall be applicable only
while there remains unpaid and outstanding amounts
owed to the Senior Lenders." (Emphasis supplied)
By any manner of interpretation or application, Section
8.01(d) of the ARCA clearly mandates the indefinite
postponement of payment of all of Piatco's obligations to
the government, in order to ensure that Piatco's
obligations to the Senior Lenders are paid in full first. That
is nothing more or less than the direct government
subsidy prohibited by the BOT Law and the IRR. The fact
that Piatco will pay interest on the unpaid amounts owed
to government does not change the situation or render the
prohibited subsidy any less unacceptable.
But beyond the clear violations of law, there are larger
issues involved in the ARCA. Earlier, I mentioned that
Section 8.01(d) of the ARCA completely eliminated the
proviso in Section 8.04(d) of the CA which gave
government the right to appoint a financial controller to
manage the cash position of Piatco during situations of
financial distress. Not only has government been deprived
of any means of monitoring and managing the situation;
worse, as can be seen from Section 8.01(d) above-
quoted, the Senior Lenders have effectively locked in on
the right to exercise financial controllership over Piatco
and to allocate its cash resources to the payment of all
amounts owed to the Senior Lenders before allowing any
payment to be made to government.
In brief, this particular provision of the ARCA has placed
in the hands of foreign lenders the power and the authority
to determine how much (if at all) and when the Philippine
government (as grantor of the franchise) may be allowed
to receive from Piatco. In that situation, government will
be at the mercy of the foreign lenders. This is a situation
completely contrary to the rationale of the BOT Law and
to public policy.
The aforesaid provision rouses mixed emotions - shame
and disgust at the parties' (especially the government
officials') docile submission and abject servitude and
surrender to the imperious and excessive demands of the
foreign lenders, on the one hand; and vehement outrage
at the affront to the sovereignty of the Republic and to the
national honor, on the other. It is indeed time to put an
end to such an unbearable, dishonorable situation.
The Piatco Contracts Unarguably Violate Constitutional
Injunctions
I will now discuss the manner in which the Piatco
Contracts offended the Constitution.
The Exclusive Right Granted to Piatco to Operate a Public
Utility Is Prohibited by the Constitution
While Section 2.02 of the ARCA spoke of granting to
Piatco "a franchise to operate and maintain the Terminal
Complex," Section 3.02(a) of the same ARCA granted to
Piatco, for the entire term of the concession agreement,
"the exclusive right to operate a commercial international
passenger terminal within the Island of Luzon" with the
exception of those three terminals already existing63 at
the time of execution of the ARCA.
Section 11 of Article XII of the Constitution prohibits the
grant of a "franchise, certificate, or any other form of
authorization for the operation of a public utility" that is
"exclusive in character."
In its Opinion No. 078, Series of 1995, the Department of
justice held that "the NAIA Terminal III which . . . is a
'terminal for public use' is a public utility." Consequently,
the constitutional prohibition against the exclusivity of a
franchise applies to the franchise for the operation of
NAIA Terminal III as well.
What was granted to Piatco was not merely a franchise,
but an "exclusive right" to operate an international
passenger terminal within the "Island of Luzon." What this
grant effectively means is that the government is now
estopped from exercising its inherent power to award any
other person another franchise or a right to operate such
a public utility, in the event public interest in Luzon
requires it. This restriction is highly detrimental to
government and to the public interest. Former Secretary
of Justice Hernando B. Perez expressed this point well in
his Memorandum for the President dated 21 May 2002:
108
"Section 3.02 on 'Exclusivity'
"This provision gives to PIATCO (the Concessionaire) the
exclusive right to operate a commercial international
airport within the Island of Luzon with the exception of
those already existing at the time of the execution of the
Agreement, such as the airports at Subic, Clark and
Laoag City. In the case of the Clark International Airport,
however, the provision restricts its operation beyond its
design capacity of 850,000 passengers per annum and
the operation of new terminal facilities therein until after
the new NAIA Terminal III shall have consistently reached
or exceeded its design capacity of ten (10) million
passenger capacity per year for three (3) consecutive
years during the concession period.
"This is an onerous and disadvantageous provision. It
effectively grants PIATCO a monopoly in Luzon and ties
the hands of government in the matter of developing new
airports which may be found expedient and necessary in
carrying out any future plan for an inter-modal
transportation system in Luzon.
"Additionally, it imposes an unreasonable restriction on
the operation of the Clark International Airport which could
adversely affect the operation and development of the
Clark Special Economic Zone to the economic prejudice
of the local constituencies that are being benefited by its
operation." (Emphasis supplied)
While it cannot be gainsaid that an enterprise that is a
public utility may happen to constitute a monopoly on
account of the very nature of its business and the absence
of competition, such a situation does not however
constitute justification to violate the constitutional
prohibition and grant an exclusive franchise or exclusive
right to operate a public utility.
Piatco's contention that the Constitution does not actually
prohibit monopolies is beside the point. As correctly
argued,64 the existence of a monopoly by a public utility
is a situation created by circumstances that do not
encourage competition. This situation is different from the
grant of a franchise to operate a public utility, a privilege
granted by government. Of course, the grant of a
franchise may result in a monopoly. But making such
franchise exclusive is what is expressly proscribed by the
Constitution.
Actually, the aforementioned Section 3.02 of the ARCA
more than just guaranteed exclusivity; it also guaranteed
that the government will not improve or expand the
facilities at Clark - and in fact is required to put a cap on
the latter's operations - until after Terminal III shall have
been operated at or beyond its peak capacity for three
consecutive years.65 As counsel for public respondents
pointed out, in the real world where the rate of influx of
international passengers can fluctuate substantially from
year to year, it may take many years before Terminal III
sees three consecutive years' operations at peak
capacity. The Diosdado Macapagal International Airport
may thus end up stagnating for a long time. Indeed, in
order to ensure greater profits for Piatco, the economic
progress of a region has had to be sacrificed.
The Piatco Contracts Violate the Time Limitation on
Franchises
Section 11 of Article XII of the Constitution also provides
that "no franchise, certificate or any other form of
authorization for the operation of a public utility shall be .
. . for a longer period than fifty years." After all, a franchise
held for an unreasonably long time would likely give rise
to the same evils as a monopoly.
The Piatco Contracts have come up with an innovative
way to circumvent the prohibition and obtain an extension.
This fact can be gleaned from Section 8.03(b) of the
ARCA, which I quote thus:
"Sec. 8.03. Termination Procedure and
Consequences of Termination. -
a) x x x xxx xxx
b) In the event the Agreement is terminated pursuant to
Section 8.01 (b) hereof, Concessionaire shall be entitled
to collect the Liquidated Damages specified in Annex 'G'.
The full payment by GRP to Concessionaire of the
Liquidated Damages shall be a condition precedent to the
transfer by Concessionaire to GRP of the Development
Facility. Prior to the full payment of the Liquidated
Damages, Concessionaire shall to the extent practicable
continue to operate the Terminal and the Terminal
Complex and shall be entitled to retain and withhold all
payments to GRP for the purpose of offsetting the same
against the Liquidated Damages. Upon full payment of the
Liquidated Damages, Concessionaire shall immediately
transfer the Development Facility to GRP on 'as-is-where-
is' basis."
The aforesaid easy payment scheme is less beneficial
than it first appears. Although it enables government to
avoid having to make outright payment of an obligation
that will likely run into billions of pesos, this easy payment
plan will nevertheless cost government considerable loss
of income, which it would earn if it were to operate
Terminal III by itself. Inasmuch as payments to the
concessionaire (Piatco) will be on "installment basis,"
interest charges on the remaining unpaid balance would
undoubtedly cause the total outstanding balance to swell.
Piatco would thus be entitled to remain in the driver's seat
and keep operating the terminal for an indefinite length of
time.
The Contracts Create Two Monopolies for Piatco
By way of background, two monopolies were actually
created by the Piatco contracts. The first and more
obvious one refers to the business of operating an
international passenger terminal in Luzon, the business
end of which involves providing international airlines with
parking space for their aircraft, and airline passengers
with the use of departure and arrival areas, check-in
counters, information systems, conveyor systems,
security equipment and paraphernalia, immigrations and
customs processing areas; and amenities such as
comfort rooms, restaurants and shops.
In furtherance of the first monopoly, the Piatco Contracts
stipulate that the NAIA Terminal III will be the only facility
to be operated as an international passenger terminal;66
that NAIA Terminals I and II will no longer be operated as
such;67 and that no one (including the government) will
be allowed to compete with Piatco in the operation of an
international passenger terminal in the NAIA Complex.68
Given that, at this time, the government and Piatco are
the only ones engaged in the business of operating an
international passenger terminal, I am not acutely
concerned with this particular monopolistic situation.
There was however another monopoly within the NAIA
created by the subject contracts for Piatco - in the
business of providing international airlines with the
109
following: groundhandling, in-flight catering, cargo
handling, and aircraft repair and maintenance services.
These are lines of business activity in which are engaged
many service providers (including the petitioners-in-
intervention), who will be adversely affected upon full
implementation of the Piatco Contracts, particularly
Sections 3.01(d)69 and (e)70 of both the ARCA and the
CA.
On the one hand, Section 3.02(a) of the ARCA makes
Terminal III the only international passenger terminal at
the NAIA, and therefore the only place within the NAIA
Complex where the business of providing airport-related
services to international airlines may be conducted. On
the other hand, Section 3.01(d) of the ARCA requires
government, through the MIAA, not to allow service
providers with expired MIAA contracts to renew or extend
their contracts to render airport-related services to
airlines. Meanwhile, Section 3.01(e) of the ARCA requires
government, through the DOTC and MIAA, not to allow
service providers - those with subsisting concession
agreements for services and operations being conducted
at Terminal I - to carry over their concession agreements,
services and operations to Terminal III, unless they first
enter into a separate agreement with Piatco.
The aforementioned provisions vest in Piatco effective
and exclusive control over which service provider may
and may not operate at Terminal III and render the airport-
related services needed by international airlines. It
thereby possesses the power to exclude competition. By
necessary implication, it also has effective control over
the fees and charges that will be imposed and collected
by these service providers.
This intention is exceedingly clear in the declaration by
Piatco that it is "completely within its rights to exclude any
party that it has not contracted with from NAIA Terminal
III."71
Worse, there is nothing whatsoever in the Piatco
Contracts that can serve to restrict, control or regulate the
concessionaire's discretion and power to reject any
service provider and/or impose any term or condition it
may see fit in any contract it enters into with a service
provider. In brief, there is no safeguard whatsoever to
ensure free and fair competition in the service-provider
sector.
In the meantime, and not surprisingly, Piatco is first in line,
ready to exploit the unique business opportunity. It
announced72 that it has accredited three groundhandlers
for Terminal III. Aside from the Philippine Airlines, the
other accredited entities are the Philippine Airport and
Ground Services Globeground, Inc.
("PAGSGlobeground") and the Orbit Air Systems, Inc.
("Orbit"). PAGSGlobeground is a wholly-owned
subsidiary of the Philippine Airport and Ground Services,
Inc. or PAGS,73 while Orbit is a wholly-owned subsidiary
of Friendship Holdings, Inc.,74 which is in turn owned 80
percent by PAGS.75 PAGS is a service provider owned
60 percent by the Cheng Family;76 it is a stockholder of
35 percent of Piatco77 and is the latter's designated
contractor-operator for NAIA Terminal III.78
Such entry into and domination of the airport-related
services sector appear to be very much in line with the
following provisions contained in the First Addendum to
the Piatco Shareholders Agreement,79 executed on July
6, 1999, which appear to constitute a sort of master plan
to create a monopoly and combinations in restraint of
trade:
"11. The Shareholders shall ensure:
a. x x x xxx x x x.;
b. That (Phil. Airport and Ground Services, Inc.) PAGS
and/or its designated Affiliates shall, at all times during the
Concession Period, be exclusively authorized by
(PIATCO) to engage in the provision of ground-handling,
catering and fueling services within the Terminal
Complex.
c. That PAIRCARGO and/or its designated Affiliate shall,
during the Concession Period, be the only entities
authorized to construct and operate a warehouse for all
cargo handling and related services within the Site."
Precisely, proscribed by our Constitution are the
monopoly and the restraint of trade being fostered by the
Piatco Contracts through the erection of barriers to the
entry of other service providers into Terminal III. In Tatad
v. Secretary of the Department of Energy,80 the Court
ruled:
". . . [S]ection 19 of Article XII of the Constitution . . .
mandates: 'The State shall regulate or prohibit
monopolies when the public interest so requires. No
combinations in restraint of trade or unfair competition
shall be allowed.'
"A monopoly is a privilege or peculiar advantage vested
in one or more persons or companies, consisting in the
exclusive right or power to carry on a particular business
or trade, manufacture a particular article, or control the
sale or the whole supply of a particular commodity. It is a
form of market structure in which one or only a few firms
dominate the total sales of a product or service. On the
other hand, a combination in restraint of trade is an
agreement or understanding between two or more
persons, in the form of a contract, trust, pool, holding
company, or other form of association, for the purpose of
unduly restricting competition, monopolizing trade and
commerce in a certain commodity, controlling its
production, distribution and price, or otherwise interfering
with freedom of trade without statutory authority.
Combination in restraint of trade refers to the means while
monopoly refers to the end.
"x x x xxx xxx
"Section 19, Article XII of our Constitution is anti-trust in
history and in spirit. It espouses competition. The
desirability of competition is the reason for the prohibition
against restraint of trade, the reason for the interdiction of
unfair competition, and the reason for regulation of
unmitigated monopolies. Competition is thus the
underlying principle of [S]ection 19, Article XII of our
Constitution, . . ."81
Gokongwei Jr. v. Securities and Exchange
Commission82 elucidates the criteria to be employed: "A
'monopoly' embraces any combination the tendency of
which is to prevent competition in the broad and general
sense, or to control prices to the detriment of the public.
In short, it is the concentration of business in the hands of
a few. The material consideration in determining its
existence is not that prices are raised and competition
actually excluded, but that power exists to raise prices or
exclude competition when desired."83 (Emphasis
supplied)
The Contracts Encourage Monopolistic Pricing, Too
110

Aside from creating a monopoly, the Piatco contracts also
give the concessionaire virtually limitless power over the
charging of fees, rentals and so forth. What little
"oversight function" the government might be able and
minded to exercise is less than sufficient to protect the
public interest, as can be gleaned from the following
provisions:
"Sec. 6.06. Adjustment of Non-Public Utility Fees
and Charges
"For fees, rentals and charges constituting Non-Public
Utility Revenues, Concessionaire may make any
adjustments it deems appropriate without need for the
consent of GRP or any government agency subject to
Sec. 6.03(c)."
Section 6.03(c) in turn provides:
"(c) Concessionaire shall at all times be judicious in
fixing fees and charges constituting Non-Public Utility
Revenues in order to ensure that End Users are not
unreasonably deprived of services. While the vehicular
parking fee, porterage fee and greeter/wellwisher fee
constitute Non-Public Utility Revenues of Concessionaire,
GRP may require Concessionaire to explain and justify
the fee it may set from time to time, if in the reasonable
opinion of GRP the said fees have become exorbitant
resulting in the unreasonable deprivation of End Users of
such services."
It will be noted that the above-quoted provision has no
teeth, so the concessionaire can defy the government
without fear of any sanction. Moreover, Section 6.06 -
taken together with Section 6.03(c) of the ARCA - falls
short of the standard set by the BOT Law as amended,
which expressly requires in Section 2(b) that the project
proponent is "allowed to charge facility users appropriate
tolls, fees, rentals and charges not exceeding those
proposed in its bid or as negotiated and incorporated in
the contract x x x."
The Piatco Contracts Violate Constitutional Prohibitions
Against
Impairment of Contracts and Deprivation of Property
Without Due Process
Earlier, I discussed how Section 3.01(e)84 of both the CA
and the ARCA requires government, through
DOTC/MIAA, not to permit the carry-over to Terminal III
of the services and operations of certain service providers
currently operating at Terminal I with subsisting contracts.
By the In-Service Date, Terminal III shall be the only
facility to be operated as an international passenger
terminal at the NAIA;85 thus, Terminals I and II shall no
longer operate as such,86 and no one shall be allowed to
compete with Piatco in the operation of an international
passenger terminal in the NAIA.87 The bottom line is that,
as of the In-Service Date, Terminal III will be the only
terminal where the business of providing airport-related
services to international airlines and passengers may be
conducted at all.
Consequently, government through the DOTC/MIAA will
be compelled to cease honoring existing contracts with
service providers after the In-Service Date, as they cannot
be allowed to operate in Terminal III.
In short, the CA and the ARCA obligate and constrain
government to break its existing contracts with these
service providers.
Notably, government is not in a position to require Piatco
to accommodate the displaced service providers, and it
would be unrealistic to think that these service providers
can perform their service contracts in some other
international airport outside Luzon. Obviously, then, these
displaced service providers are - to borrow a quaint
expression - up the river without a paddle. In plainer
terms, they will have lost their businesses entirely, in the
blink of an eye.
What we have here is a set of contractual provisions that
impair the obligation of contracts and contravene the
constitutional prohibition against deprivation of property
without due process of law.88
Moreover, since the displaced service providers, being
unable to operate, will be forced to close shop, their
respective employees - among them Messrs. Agan and
Lopez et al. - have very grave cause for concern, as they
will find themselves out of employment and bereft of their
means of livelihood. This situation comprises still another
violation of the constitution prohibition against deprivation
of property without due process.
True, doing business at the NAIA may be viewed more as
a privilege than as a right. Nonetheless, where that
privilege has been availed of by the petitioners-in-
intervention service providers for years on end, a situation
arises, similar to that in American Inter-fashion v.
GTEB.89 We held therein that a privilege enjoyed for
seven years "evolved into some form of property right
which should not be removed x x x arbitrarily and without
due process." Said pronouncement is particularly relevant
and applicable to the situation at bar because the
livelihood of the employees of petitioners-intervenors are
at stake.
The Piatco Contracts Violate Constitutional Prohibition
Against Deprivation of Liberty Without Due Process
The Piatco Contracts by locking out existing service
providers from entry into Terminal III and restricting entry
of future service providers, thereby infringed upon the
freedom - guaranteed to and heretofore enjoyed by
international airlines - to contract with local service
providers of their choice, and vice versa.
Both the service providers and their client airlines will be
deprived of the right to liberty, which includes the right to
enter into all contracts,90 and/or the right to make a
contract in relation to one's business.91
By Creating New Financial Obligations for Government,
Supplements to the ARCA Violate the Constitutional
Ban on Disbursement of Public Funds Without Valid
Appropriation
Clearly prohibited by the Constitution is the disbursement
of public funds out of the treasury, except in pursuance of
an appropriation made by law.92 The immediate effect of
this constitutional ban is that all the various agencies of
government are constrained to limit their expenditures to
the amounts appropriated by law for each fiscal year; and
to carefully count their cash before taking on contractual
commitments. Giving flesh and form to the injunction of
the fundamental law, Sections 46 and 47 of Executive
Order 292, otherwise known as the Administrative Code
of 1987, provide as follows:
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"Sec. 46. Appropriation Before Entering into
Contract. - (1) No contract involving the expenditure of
public funds shall be entered into unless there is an
appropriation therefor, the unexpended balance of which,
free of other obligations, is sufficient to cover the
proposed expenditure; and . .
"Sec. 47. Certificate Showing Appropriation to
Meet Contract. - Except in the case of a contract for
personal service, for supplies for current consumption or
to be carried in stock not exceeding the estimated
consumption for three (3) months, or banking transactions
of government-owned or controlled banks, no contract
involving the expenditure of public funds by any
government agency shall be entered into or authorized
unless the proper accounting official of the agency
concerned shall have certified to the officer entering into
the obligation that funds have been duly appropriated for
the purpose and that the amount necessary to cover the
proposed contract for the current calendar year is
available for expenditure on account thereof, subject to
verification by the auditor concerned. The certificate
signed by the proper accounting official and the auditor
who verified it, shall be attached to and become an
integral part of the proposed contract, and the sum so
certified shall not thereafter be available for expenditure
for any other purpose until the obligation of the
government agency concerned under the contract is fully
extinguished."
Referring to the aforequoted provisions, this Court has
held that "(I)t is quite evident from the tenor of the
language of the law that the existence of appropriations
and the availability of funds are indispensable pre-
requisites to or conditions sine qua non for the execution
of government contracts. The obvious intent is to impose
such conditions as a priori requisites to the validity of the
proposed contract."93
Notwithstanding the constitutional ban, statutory
mandates and Jurisprudential precedents, the three
Supplements to the ARCA, which were not approved by
NEDA, imposed on government the additional burden of
spending public moneys without prior appropriation.
In the First Supplement ("FS") dated August 27, 1999, the
following requirements were imposed on the government:
• To construct, maintain and keep in good repair
and operating condition all airport support services,
facilities, equipment and infrastructure owned and/or
operated by MIAA, which are not part of the Project or
which are located outside the Site, even though
constructed by Concessionaire - including the access
road connecting Terminals II and III and the taxilane,
taxiways and runways
• To obligate the MIAA to provide funding for the
upkeep, maintenance and repair of the airports and
facilities owned or operated by it and by third persons
under its control in order to ensure compliance with
international standards; and holding MIAA liable to Piatco
for the latter's losses, expenses and damages as well as
for the latter's liability to third persons, in case MIAA fails
to perform such obligations; in addition, MIAA will also be
liable for the incremental and consequential costs of the
remedial work done by Piatco on account of the former's
default.
• Section 4 of the FS imposed on government ten
(10) "Additional Special Obligations," including the
following:
Providing thru MIAA the land required by Piatco for the
taxilane and one taxiway, at no cost to Piatco
Implementing the government's existing storm drainage
master plan
Coordinating with DPWH the financing, implementation
and completion of the following works before the In-
Service Date: three left-turning overpasses (Edsa to
Tramo St., Tramo to Andrews Ave., and Manlunas Road
to Sales Ave.) and a road upgrade and improvement
program involving widening, repair and resurfacing of
Sales Road, Andrews Avenue and Manlunas Road;
improvement of Nichols Interchange; and removal of
squatters along Andrews Avenue
Dealing directly with BCDA and the Philippine Air Force in
acquiring additional land or right of way for the road
upgrade and improvement program
Requiring government to work for the immediate
reversion to MIAA of the Nayong Pilipino National Park, in
order to permit the building of the second west parallel
taxiway
• Section 5 of the FS also provides that in lieu of
the access tunnel, a surface access road (T2-T3) will be
constructed. This provision requires government to
expend funds to purchase additional land from Nayong
Pilipino and to clear the same in order to be able to deliver
clean possession of the site to Piatco, as required in
Section 5(c) of the FS.
On the other hand, the Third Supplement ("TS") obligates
the government to deliver, within 120 days from date
thereof, clean possession of the land on which the T2-T3
Road is to be constructed.
The foregoing contractual stipulations undeniably impose
on government the expenditures of public funds not
included in any congressional appropriation or authorized
by any other statute. Piatco however attempts to take
these stipulations out of the ambit of Sections 46 and 47
of the Administrative Code by characterizing them as
stipulations for compliance on a "best-efforts basis" only.
To determine whether the additional obligations under the
Supplements may really be undertaken on a best-efforts
basis only, the nature of each of these obligations must
be examined in the context of its relevance and
significance to the Terminal III Project, as well as of any
adverse impact that may result if such obligation is not
performed or undertaken on time. In short, the criteria for
determining whether the best-efforts basis will apply is
whether the obligations are critical to the success of the
Project and, accordingly, whether failure to perform them
(or to perform them on time) could result in a material
breach of the contract.
Viewed in this light, the "Additional Special Obligations"
set out in Section 4 of the FS take on a different aspect.
In particular, each of the following may all be deemed to
play a major role in the successful and timely prosecution
of the Terminal III Project: the obtention of land required
by PIATCO for the taxilane and taxiway; the
implementation of government's existing storm drainage
master plan; and coordination with DPWH for the
completion of the three left-turning overpasses before the
In-Service Date, as well as acquisition and delivery of
additional land for the construction of the T2-T3 access
road.
112
Conversely, failure to deliver on any of these obligations
may conceivably result in substantial prejudice to the
concessionaire, to such an extent as to constitute a
material breach of the Piatco Contracts. Whereupon, the
concessionaire may outrightly terminate the Contracts
pursuant to Section 8.01(b)(i) and (ii) of the ARCA and
seek payment of Liquidated Damages in accordance with
Section 8.02(a) of the ARCA; or the concessionaire may
instead require government to pay the Incremental and
Consequential Losses under Section 1.23 of the
ARCA.94 The logical conclusion then is that the
obligations in the Supplements are not to be performed
on a best-efforts basis only, but are unarguably
mandatory in character.
Regarding MIAA's obligation to coordinate with the
DPWH for the complete implementation of the road
upgrading and improvement program for Sales, Andrews
and Manlunas Roads (which provide access to the
Terminal III site) prior to the In-Service Date, it is essential
to take note of the fact that there was a pressing need to
complete the program before the opening of Terminal
III.95 For that reason, the MIAA was compelled to enter
into a memorandum of agreement with the DPWH in order
to ensure the timely completion of the road widening and
improvement program. MIAA agreed to advance the total
amount of P410.11 million to DPWH for the works, while
the latter was committed to do the following:
"2.2.8. Reimburse all advance payments to MIAA
including but not limited to interest, fees, plus other costs
of money within the periods CY2004 and CY2006 with
payment of no less than One Hundred Million Pesos
(PhP100M) every year.
"2.2.9. Perform all acts necessary to include in its
CY2004 to CY2006 budget allocation the repayments for
the advances made by MIAA, to ensure that the advances
are fully repaid by CY2006. For this purpose, DPWH shall
include the amounts to be appropriated for
reimbursement to MIAA in the "Not Needing Clearance"
column of their Agency Budget Matrix (ABM) submitted to
the Department of Budget and Management."
It can be easily inferred, then, that DPWH did not set aside
enough funds to be able to complete the upgrading
program for the crucially situated access roads prior to the
targeted opening date of Terminal III; and that, had MIAA
not agreed to lend the P410 Million, DPWH would not
have been able to complete the program on time. As a
consequence, government would have been in breach of
a material obligation. Hence, this particular undertaking of
government may likewise not be construed as being for
best-efforts compliance only.
They also Infringe on the Legislative Prerogative and
Power Over the Public Purse
But the particularly sad thing about this transaction
between MIAA and DPWH is the fact that both agencies
were maneuvered into (or allowed themselves to be
maneuvered into) an agreement that would ensure
delivery of upgraded roads for Piatco's benefit, using
funds not allocated for that purpose. The agreement
would then be presented to Congress as a done deal.
Congress would thus be obliged to uphold the agreement
and support it with the necessary allocations and
appropriations for three years, in order to enable DPWH
to deliver on its committed repayments to MIAA. The net
result is an infringement on the legislative power over the
public purse and a diminution of Congress' control over
expenditures of public funds - a development that would
not have come about, were it not for the Supplements.
Very clever but very illegal!
EPILOGUE
What Do We Do Now?
In the final analysis, there remains but one ultimate
question, which I raised during the Oral Argument on
December 10, 2002: What do we do with the Piatco
Contracts and Terminal III?96 (Feeding directly into the
resolution of the decisive question is the other nagging
issue: Why should we bother with determining the legality
and validity of these contracts, when the Terminal itself
has already been built and is practically complete?)
Prescinding from all the foregoing disquisition, I find that
all the Piatco contracts, without exception, are void ab
initio, and therefore inoperative. Even the very process by
which the contracts came into being - the bidding and the
award - has been riddled with irregularities galore and
blatant violations of law and public policy, far too many to
ignore. There is thus no conceivable way, as proposed by
some, of saving one (the original Concession Agreement)
while junking all the rest.
Neither is it possible to argue for the retention of the Draft
Concession Agreement (referred to in the various
pleadings as the Contract Bidded Out) as the contract that
should be kept in force and effect to govern the situation,
inasmuch as it was never executed by the parties. What
Piatco and the government executed was the Concession
Agreement which is entirely different from the Draft
Concession Agreement.
Ultimately, though, it would be tantamount to an
outrageous, grievous and unforgivable mutilation of public
policy and an insult to ourselves if we opt to keep in place
a contract - any contract - for to do so would assume that
we agree to having Piatco continue as the concessionaire
for Terminal III.
Despite all the insidious contraventions of the
Constitution, law and public policy Piatco perpetrated,
keeping Piatco on as concessionaire and even rewarding
it by allowing it to operate and profit from Terminal III -
instead of imposing upon it the stiffest sanctions
permissible under the laws - is unconscionable.
It is no exaggeration to say that Piatco may not really mind
which contract we decide to keep in place. For all it may
care, we can do just as well without one, if we only let it
continue and operate the facility. After all, the real money
will come not from building the Terminal, but from actually
operating it for fifty or more years and charging whatever
it feels like, without any competition at all. This scenario
must not be allowed to happen.
If the Piatco contracts are junked altogether as I think they
should be, should not AEDC automatically be considered
the winning bidder and therefore allowed to operate the
facility? My answer is a stone-cold 'No'. AEDC never won
the bidding, never signed any contract, and never built
any facility. Why should it be allowed to automatically step
in and benefit from the greed of another?
Should government pay at all for reasonable expenses
incurred in the construction of the Terminal? Indeed it
should, otherwise it will be unjustly enriching itself at the
expense of Piatco and, in particular, its funders,
contractors and investors - both local and foreign. After
all, there is no question that the State needs and will make
use of Terminal III, it being part and parcel of the critical
113
infrastructure and transportation-related programs of
government.

In Melchor v. Commission on Audit,97 this Court held that

even if the contract therein was void, the principle of
payment by quantum meruit was found applicable, and
the contractor was allowed to recover the reasonable
value of the thing or services rendered (regardless of any
agreement as to the supposed value), in order to avoid
unjust enrichment on the part of government. The
principle of quantum meruit was likewise applied in Eslao
v. Commission on Audit,98 because to deny payment for
a building almost completed and already occupied would
be to permit government to unjustly enrich itself at the
expense of the contractor. The same principle was
applied in Republic v. Court of Appeals.99

One possible practical solution would be for government

- in view of the nullity of the Piatco contracts and of the
fact that Terminal III has already been built and is almost
finished - to bid out the operation of the facility under the
same or analogous principles as build-operate-and-
transfer projects. To be imposed, however, is the
condition that the winning bidder must pay the builder of
the facility a price fixed by government based on quantum
meruit; on the real, reasonable - not inflated - value of the
built facility.

How the payment or series of payments to the builder,

funders, investors and contractors will be staggered and
scheduled, will have to be built into the bids, along with
the annual guaranteed payments to government. In this
manner, this whole sordid mess could result in something
truly beneficial for all, especially for the Filipino people.

WHEREFORE, I vote to grant the Petitions and to declare

the subject contracts NULL and VOID.

114
SECOND DIVISION
G.R. No. 155336 November 25, 2004
COMMISSION ON HUMAN RIGHTS EMPLOYEES'
ASSOCIATION (CHREA) Represented by its President,
MARCIAL A. SANCHEZ, JR., petitioner,
vs.
COMMISSION ON HUMAN RIGHTS, respondent.
DECISION
CHICO-NAZARIO, J.:
Can the Commission on Human Rights lawfully
implement an upgrading and reclassification of personnel
positions without the prior approval of the Department of
Budget and Management?
Before this Court is a petition for review filed by petitioner
Commission on Human Rights Employees' Association
(CHREA) challenging the Decision1 dated 29 November
2001 of the Court of Appeals in CA-G.R. SP No. 59678
affirming the Resolutions2 dated 16 December 1999 and
09 June 2000 of the Civil Service Commission (CSC),
which sustained the validity of the upgrading and
reclassification of certain personnel positions in the
Commission on Human Rights (CHR) despite the
disapproval thereof by the Department of Budget and
Management (DBM). Also assailed is the resolution dated
11 September 2002 of the Court of Appeals denying the
motion for reconsideration filed by petitioner.
The antecedent facts which spawned the present
controversy are as follows:
On 14 February 1998, Congress passed Republic Act No.
8522, otherwise known as the General Appropriations Act
of 1998. It provided for Special Provisions Applicable to
All Constitutional Offices Enjoying Fiscal Autonomy. The
last portion of Article XXXIII covers the appropriations of
the CHR. These special provisions state:
1. Organizational Structure. Any provision of law to the
contrary notwithstanding and within the limits of their
respective appropriations as authorized in this Act, the
Constitutional Commissions and Offices enjoying fiscal
autonomy are authorized to formulate and implement the
organizational structures of their respective offices, to fix
and determine the salaries, allowances, and other
benefits of their personnel, and whenever public interest
so requires, make adjustments in their personal services
itemization including, but not limited to, the transfer of item
or creation of new positions in their respective offices:
PROVIDED, That officers and employees whose
positions are affected by such reorganization or
adjustments shall be granted retirement gratuities and
separation pay in accordance with existing laws, which
shall be payable from any unexpended balance of, or
savings in the appropriations of their respective offices:
PROVIDED, FURTHER, That the implementation hereof
shall be in accordance with salary rates, allowances and
other benefits authorized under compensation
standardization laws.
2. Use of Savings. The Constitutional Commissions and
Offices enjoying fiscal autonomy are hereby authorized to
use savings in their respective appropriations for: (a)
printing and/or publication of decisions, resolutions, and
training information materials; (b) repair, maintenance
and improvement of central and regional offices, facilities
and equipment; (c) purchase of books, journals,
periodicals and equipment; (d) necessary expenses for
the employment of temporary, contractual and casual
employees; (e) payment of extraordinary and
miscellaneous expenses, commutable representation
and transportation allowances, and fringe benefits for
their officials and employees as may be authorized by
law; and (f) other official purposes, subject to accounting
and auditing rules and regulations. (Emphases supplied)
on the strength of these special provisions, the CHR,
through its then Chairperson Aurora P. Navarette-Reciña
and Commissioners Nasser A. Marohomsalic, Mercedes
V. Contreras, Vicente P. Sibulo, and Jorge R. Coquia,
promulgated Resolution No. A98-047 on 04 September
1998, adopting an upgrading and reclassification scheme
among selected positions in the Commission, to wit:
WHEREAS, the General Appropriations Act, FY 1998,
R.A. No. 8522 has provided special provisions applicable
to all Constitutional Offices enjoying Fiscal Autonomy,
particularly on organizational structures and authorizes
the same to formulate and implement the organizational
structures of their respective offices to fix and determine
the salaries, allowances and other benefits of their
personnel and whenever public interest so requires, make
adjustments in the personnel services itemization
including, but not limited to, the transfer of item or creation
of new positions in their respective offices: PROVIDED,
That officers and employees whose positions are affected
by such reorganization or adjustments shall be granted
retirement gratuities and separation pay in accordance
with existing laws, which shall be payable from any
unexpanded balance of, or savings in the appropriations
of their respective offices;
Whereas, the Commission on Human Rights is a member
of the Constitutional Fiscal Autonomy Group (CFAG) and
on July 24, 1998, CFAG passed an approved Joint
Resolution No. 49 adopting internal rules implementing
the special provisions heretoforth mentioned;
NOW THEREFORE, the Commission by virtue of its fiscal
autonomy hereby approves and authorizes the upgrading
and augmentation of the commensurate amount
generated from savings under Personal Services to
support the implementation of this resolution effective
Calendar Year 1998;
Let the Human Resources Development Division (HRDD)
prepare the necessary Notice of Salary Adjustment and
other appropriate documents to implement this resolution;
. . . .3 (Emphasis supplied)
Annexed to said resolution is the proposed creation of ten
additional plantilla positions, namely: one Director IV
position, with Salary Grade 28 for the Caraga Regional
Office, four Security Officer II with Salary Grade 15, and
five Process Servers, with Salary Grade 5 under the
Office of the Commissioners. 4
On 19 October 1998, CHR issued Resolution No. A98-
0555 providing for the upgrading or raising of salary
grades of the following positions in the Commission:
115

It, likewise, provided for the creation and upgrading of the
following positions:
A. Creation
B. Upgrading
To support the implementation of such scheme, the CHR,
in the same resolution, authorized the augmentation of a
commensurate amount generated from savings under
Personnel Services.
By virtue of Resolution No. A98-062 dated 17 November
1998, the CHR "collapsed" the vacant positions in the
body to provide additional source of funding for said
staffing modification. Among the positions collapsed
were: one Attorney III, four Attorney IV, one Chemist III,
three Special Investigator I, one Clerk III, and one
Accounting Clerk II.8
The CHR forwarded said staffing modification and
upgrading scheme to the DBM with a request for its
approval, but the then DBM secretary Benjamin Diokno
denied the request on the following justification:
… Based on the evaluations made the request was not
favorably considered as it effectively involved the
elevation of the field units from divisions to services.
The present proposal seeks further to upgrade the twelve
(12) positions of Attorney VI, SG-26 to Director IV, SG-28.
This would elevate the field units to a bureau or regional
office, a level even higher than the one previously denied.
The request to upgrade the three (3) positions of Director
III, SG-27 to Director IV, SG-28, in the Central Office in
effect would elevate the services to Office and change the
context from support to substantive without actual change
in functions.
In the absence of a specific provision of law which may be
used as a legal basis to elevate the level of divisions to a
bureau or regional office, and the services to offices, we
reiterate our previous stand denying the upgrading of the
twelve (12) positions of Attorney VI, SG-26 to Director III,
SG-27 or Director IV, SG-28, in the Field Operations
Office (FOO) and three (3) Director III, SG-27 to Director
IV, SG-28 in the Central Office.
As represented, President Ramos then issued a
Memorandum to the DBM Secretary dated 10 December
1997, directing the latter to increase the number of
Plantilla positions in the CHR both Central and Regional
Offices to implement the Philippine Decade Plan on
Human Rights Education, the Philippine Human Rights
Plan and Barangay Rights Actions Center in accordance
with existing laws. (Emphasis in the original)
Pursuant to Section 78 of the General Provisions of the
General Appropriations Act (GAA) FY 1998, no
organizational unit or changes in key positions shall be
authorized unless provided by law or directed by the
President, thus, the creation of a Finance Management
Office and a Public Affairs Office cannot be given
favorable recommendation.
Moreover, as provided under Section 2 of RA No. 6758,
otherwise known as the Compensation Standardization
Law, the Department of Budget and Management is
directed to establish and administer a unified
compensation and position classification system in the
government. The Supreme Court ruled in the case of
Victorina Cruz vs. Court of Appeals, G.R. No. 119155,
dated January 30, 1996, that this Department has the sole
power and discretion to administer the compensation and
position classification system of the National
Government.
Being a member of the fiscal autonomy group does not
vest the agency with the authority to reclassify, upgrade,
and create positions without approval of the DBM. While
the members of the Group are authorized to formulate
and implement the organizational structures of their
respective offices and determine the compensation of
their personnel, such authority is not absolute and must
be exercised within the parameters of the Unified Position
Classification and Compensation System established
under RA 6758 more popularly known as the
Compensation Standardization Law. We therefore
reiterate our previous stand on the matter.9 (Emphases
supplied)
In light of the DBM's disapproval of the proposed
personnel modification scheme, the CSC-National Capital
Region Office, through a memorandum dated 29 March
1999, recommended to the CSC-Central Office that the
subject appointments be rejected owing to the DBM's
disapproval of the plantilla reclassification.
Meanwhile, the officers of petitioner CHREA, in
representation of the rank and file employees of the CHR,
requested the CSC-Central Office to affirm the
recommendation of the CSC-Regional Office. CHREA
stood its ground in saying that the DBM is the only agency
with appropriate authority mandated by law to evaluate
and approve matters of reclassification and upgrading, as
well as creation of positions.
The CSC-Central Office denied CHREA's request in a
Resolution dated 16 December 1999, and reversed the
recommendation of the CSC-Regional Office that the
upgrading scheme be censured. The decretal portion of
which reads:
116
WHEREFORE, the request of Ronnie N. Rosero, Hubert
V. Ruiz, Flordeliza A. Briones, George Q. Dumlao [and],
Corazon A. Santos-Tiu, is hereby denied.10
CHREA filed a motion for reconsideration, but the CSC-
Central Office denied the same on 09 June 2000.
Given the cacophony of judgments between the DBM and
the CSC, petitioner CHREA elevated the matter to the
Court of Appeals. The Court of Appeals affirmed the
pronouncement of the CSC-Central Office and upheld the
validity of the upgrading, retitling, and reclassification
scheme in the CHR on the justification that such action is
within the ambit of CHR's fiscal autonomy. The fallo of the
Court of Appeals decision provides:
IN VIEW OF ALL THE FOREGOING, the instant petition
is ordered DISMISSED and the questioned Civil Service
Commission Resolution No. 99-2800 dated December
16, 1999 as well as No. 001354 dated June 9, 2000, are
hereby AFFIRMED. No cost.11
Unperturbed, petitioner filed this petition in this Court
contending that:
A.
…THE COURT OF APPEALS GRAVELY ERRED WHEN
IT HELD THAT UNDER THE 1987 CONSTITUTION, THE
COMMISSION ON HUMAN RIGHTS ENJOYS FISCAL
AUTONOMY.
B.
…THE COURT OF APPEALS SERIOUSLY ERRED IN
UPHOLDING THE CONSTRUCTION OF THE
COMMISSION ON HUMAN RIGHTS OF REPUBLIC ACT
NO. 8522 (THE GENERAL APPROPRIATIONS ACT
FOR THE FISCAL YEAR 1998) DESPITE ITS BEING IN
SHARP CONFLICT WITH THE 1987 CONSTITUTION
AND THE STATUTE ITSELF.
C.
…THE COURT OF APPEALS SERIOUSLY AND
GRAVELY ERRED IN AFFIRMING THE VALIDITY OF
THE CIVIL SERVICE COMMISSION RESOLUTION
NOS. 992800 AND 001354 AS WELL AS THAT OF THE
OPINION OF THE DEPARTMENT OF JUSTICE IN
STATING THAT THE COMMISSION ON HUMAN
RIGHTS ENJOYS FISCAL AUTONOMY UNDER THE
1987 CONSTITUTION AND THAT THIS FISCAL
AUTONOMY INCLUDES THE ACTION TAKEN BY IT IN
COLLAPSING, UPGRADING AND RECLASSIFICATION
OF POSITIONS THEREIN.12
The central question we must answer in order to resolve
this case is: Can the Commission on Human Rights
validly implement an upgrading, reclassification, creation,
and collapsing of plantilla positions in the Commission
without the prior approval of the Department of Budget
and Management?
Petitioner CHREA grouses that the Court of Appeals and
the CSC-Central Office both erred in sanctioning the
CHR's alleged blanket authority to upgrade, reclassify,
and create positions inasmuch as the approval of the
DBM relative to such scheme is still indispensable.
Petitioner bewails that the CSC and the Court of Appeals
erroneously assumed that CHR enjoys fiscal autonomy
insofar as financial matters are concerned, particularly
with regard to the upgrading and reclassification of
positions therein.
Respondent CHR sharply retorts that petitioner has no
locus standi considering that there exists no official written
record in the Commission recognizing petitioner as a
bona fide organization of its employees nor is there
anything in the records to show that its president, Marcial
A. Sanchez, Jr., has the authority to sue the CHR. The
CHR contends that it has the authority to cause the
upgrading, reclassification, plantilla creation, and
collapsing scheme sans the approval of the DBM because
it enjoys fiscal autonomy.
After a thorough consideration of the arguments of both
parties and an assiduous scrutiny of the records in the
case at bar, it is the Court's opinion that the present
petition is imbued with merit.
On petitioner's personality to bring this suit, we held in a
multitude of cases that a proper party is one who has
sustained or is in immediate danger of sustaining an injury
as a result of the act complained of.13 Here, petitioner,
which consists of rank and file employees of respondent
CHR, protests that the upgrading and collapsing of
positions benefited only a select few in the upper level
positions in the Commission resulting to the
demoralization of the rank and file employees. This
sufficiently meets the injury test. Indeed, the CHR's
upgrading scheme, if found to be valid, potentially entails
eating up the Commission's savings or that portion of its
budgetary pie otherwise allocated for Personnel Services,
from which the benefits of the employees, including those
in the rank and file, are derived.
Further, the personality of petitioner to file this case was
recognized by the CSC when it took cognizance of the
CHREA's request to affirm the recommendation of the
CSC-National Capital Region Office. CHREA's
personality to bring the suit was a non-issue in the Court
of Appeals when it passed upon the merits of this case.
Thus, neither should our hands be tied by this technical
concern. Indeed, it is settled jurisprudence that an issue
that was neither raised in the complaint nor in the court
below cannot be raised for the first time on appeal, as to
do so would be offensive to the basic rules of fair play,
justice, and due process.14
We now delve into the main issue of whether or not the
approval by the DBM is a condition precedent to the
enactment of an upgrading, reclassification, creation and
collapsing of plantilla positions in the CHR.
Germane to our discussion is Rep. Act No. 6758, An Act
Prescribing a Revised Compensation and Position
Classification System in the Government and For Other
Purposes, or the Salary Standardization Law, dated 01
July 1989, which provides in Sections 2 and 4 thereof that
it is the DBM that shall establish and administer a unified
Compensation and Position Classification System. Thus:
SEC. 2. Statement of Policy. -- It is hereby declared the
policy of the State to provide equal pay for substantially
equal work and to base differences in pay upon
substantive differences in duties and responsibilities, and
qualification requirements of the positions. In determining
rates of pay, due regard shall be given to, among others,
prevailing rates in the private sector for comparable work.
For this purpose, the Department of Budget and
Management (DBM) is hereby directed to establish and
administer a unified Compensation and Position
Classification System, hereinafter referred to as the
117
System as provided for in Presidential Decree No. 985, as
amended, that shall be applied for all government entities,
as mandated by the Constitution. (Emphasis supplied.)
SEC. 4. Coverage. – The Compensation and Position
Classification System herein provided shall apply to all
positions, appointive or elective, on full or part-time basis,
now existing or hereafter created in the government,
including government-owned or controlled corporations
and government financial institutions.
The term "government" refers to the Executive, the
Legislative and the Judicial Branches and the
Constitutional Commissions and shall include all, but shall
not be limited to, departments, bureaus, offices, boards,
commissions, courts, tribunals, councils, authorities,
administrations, centers, institutes, state colleges and
universities, local government units, and the armed
forces. The term "government-owned or controlled
corporations and financial institutions" shall include all
corporations and financial institutions owned or controlled
by the National Government, whether such corporations
and financial institutions perform governmental or
proprietary functions. (Emphasis supplied.)
The disputation of the Court of Appeals that the CHR is
exempt from the long arm of the Salary Standardization
Law is flawed considering that the coverage thereof, as
defined above, encompasses the entire gamut of
government offices, sans qualification.
This power to "administer" is not purely ministerial in
character as erroneously held by the Court of Appeals.
The word to administer means to control or regulate in
behalf of others; to direct or superintend the execution,
application or conduct of; and to manage or conduct
public affairs, as to administer the government of the
state.15
The regulatory power of the DBM on matters of
compensation is encrypted not only in law, but in
jurisprudence as well. In the recent case of Philippine
Retirement Authority (PRA) v. Jesusito L. Buñag,16 this
Court, speaking through Mr. Justice Reynato Puno, ruled
that compensation, allowances, and other benefits
received by PRA officials and employees without the
requisite approval or authority of the DBM are
unauthorized and irregular. In the words of the Court –
Despite the power granted to the Board of Directors of
PRA to establish and fix a compensation and benefits
scheme for its employees, the same is subject to the
review of the Department of Budget and Management.
However, in view of the express powers granted to PRA
under its charter, the extent of the review authority of the
Department of Budget and Management is limited. As
stated in Intia, the task of the Department of Budget and
Management is simply to review the compensation and
benefits plan of the government agency or entity
concerned and determine if the same complies with the
prescribed policies and guidelines issued in this regard.
The role of the Department of Budget and Management
is supervisorial in nature, its main duty being to ascertain
that the proposed compensation, benefits and other
incentives to be given to PRA officials and employees
adhere to the policies and guidelines issued in
accordance with applicable laws.
In Victorina Cruz v. Court of Appeals,17 we held that the
DBM has the sole power and discretion to administer the
compensation and position classification system of the
national government.
In Intia, Jr. v. Commission on Audit,18 the Court held that
although the charter19 of the Philippine Postal
Corporation (PPC) grants it the power to fix the
compensation and benefits of its employees and exempts
PPC from the coverage of the rules and regulations of the
Compensation and Position Classification Office, by
virtue of Section 6 of P.D. No. 1597, the compensation
system established by the PPC is, nonetheless, subject
to the review of the DBM. This Court intoned:
It should be emphasized that the review by the DBM of
any PPC resolution affecting the compensation structure
of its personnel should not be interpreted to mean that the
DBM can dictate upon the PPC Board of Directors and
deprive the latter of its discretion on the matter. Rather,
the DBM's function is merely to ensure that the action
taken by the Board of Directors complies with the
requirements of the law, specifically, that PPC's
compensation system "conforms as closely as possible
with that provided for under R.A. No. 6758." (Emphasis
supplied.)
As measured by the foregoing legal and jurisprudential
yardsticks, the imprimatur of the DBM must first be sought
prior to implementation of any reclassification or
upgrading of positions in government. This is consonant
to the mandate of the DBM under the Revised
Administrative Code of 1987, Section 3, Chapter 1, Title
XVII, to wit:
SEC. 3. Powers and Functions. – The Department of
Budget and Management shall assist the President in the
preparation of a national resources and expenditures
budget, preparation, execution and control of the National
Budget, preparation and maintenance of accounting
systems essential to the budgetary process, achievement
of more economy and efficiency in the management of
government operations, administration of compensation
and position classification systems, assessment of
organizational effectiveness and review and evaluation of
legislative proposals having budgetary or organizational
implications. (Emphasis supplied.)
Irrefragably, it is within the turf of the DBM Secretary to
disallow the upgrading, reclassification, and creation of
additional plantilla positions in the CHR based on its
finding that such scheme lacks legal justification.
Notably, the CHR itself recognizes the authority of the
DBM to deny or approve the proposed reclassification of
positions as evidenced by its three letters to the DBM
requesting approval thereof. As such, it is now estopped
from now claiming that the nod of approval it has
previously sought from the DBM is a superfluity.
The Court of Appeals incorrectly relied on the
pronouncement of the CSC-Central Office that the CHR
is a constitutional commission, and as such enjoys fiscal
autonomy.20
Palpably, the Court of Appeals' Decision was based on
the mistaken premise that the CHR belongs to the species
of constitutional commissions. But, Article IX of the
Constitution states in no uncertain terms that only the
CSC, the Commission on Elections, and the Commission
on Audit shall be tagged as Constitutional Commissions
with the appurtenant right to fiscal autonomy. Thus:
Sec. 1. The Constitutional Commissions, which shall be
independent, are the Civil Service Commission, the
Commission on Elections, and the Commission on Audit.
118

Sec. 5. The Commission shall enjoy fiscal autonomy.
Their approved annual appropriations shall be
automatically and regularly released.
Along the same vein, the Administrative Code, in Chapter
5, Sections 24 and 26 of Book II on Distribution of Powers
of Government, the constitutional commissions shall
include only the Civil Service Commission, the
Commission on Elections, and the Commission on Audit,
which are granted independence and fiscal autonomy. In
contrast, Chapter 5, Section 29 thereof, is silent on the
grant of similar powers to the other bodies including the
CHR. Thus:
SEC. 24. Constitutional Commissions. – The
Constitutional Commissions, which shall be independent,
are the Civil Service Commission, the Commission on
Elections, and the Commission on Audit.
SEC. 26. Fiscal Autonomy. – The Constitutional
Commissions shall enjoy fiscal autonomy. The approved
annual appropriations shall be automatically and regularly
released.
SEC. 29. Other Bodies. – There shall be in accordance
with the Constitution, an Office of the Ombudsman, a
Commission on Human Rights, and independent central
monetary authority, and a national police commission.
Likewise, as provided in the Constitution, Congress may
establish an independent economic and planning agency.
(Emphasis ours.)
From the 1987 Constitution and the Administrative Code,
it is abundantly clear that the CHR is not among the class
of Constitutional Commissions. As expressed in the oft-
repeated maxim expressio unius est exclusio alterius, the
express mention of one person, thing, act or consequence
excludes all others. Stated otherwise, expressium facit
cessare tacitum – what is expressed puts an end to what
is implied.21
Nor is there any legal basis to support the contention that
the CHR enjoys fiscal autonomy. In essence, fiscal
autonomy entails freedom from outside control and
limitations, other than those provided by law. It is the
freedom to allocate and utilize funds granted by law, in
accordance with law, and pursuant to the wisdom and
dispatch its needs may require from time to time.22 In
Blaquera v. Alcala and Bengzon v. Drilon,23 it is
understood that it is only the Judiciary, the Civil Service
Commission, the Commission on Audit, the Commission
on Elections, and the Office of the Ombudsman, which
enjoy fiscal autonomy. Thus, in Bengzon,24 we
explained:
As envisioned in the Constitution, the fiscal autonomy
enjoyed by the Judiciary, the Civil Service Commission,
the Commission on Audit, the Commission on Elections,
and the Office of the Ombudsman contemplates a
guarantee of full flexibility to allocate and utilize their
resources with the wisdom and dispatch that their needs
require. It recognizes the power and authority to levy,
assess and collect fees, fix rates of compensation not
exceeding the highest rates authorized by law for
compensation and pay plans of the government and
allocate and disburse such sums as may be provided by
law or prescribed by them in the course of the discharge
of their functions.
...
The Judiciary, the Constitutional Commissions, and the
Ombudsman must have the independence and flexibility
needed in the discharge of their constitutional duties. The
imposition of restrictions and constraints on the manner
the independent constitutional offices allocate and utilize
the funds appropriated for their operations is anathema to
fiscal autonomy and violative not only of the express
mandate of the Constitution but especially as regards the
Supreme Court, of the independence and separation of
powers upon which the entire fabric of our constitutional
system is based. In the interest of comity and cooperation,
the Supreme Court, [the] Constitutional Commissions,
and the Ombudsman have so far limited their objections
to constant reminders. We now agree with the petitioners
that this grant of autonomy should cease to be a
meaningless provision. (Emphasis supplied.)
Neither does the fact that the CHR was admitted as a
member by the Constitutional Fiscal Autonomy Group
(CFAG) ipso facto clothed it with fiscal autonomy. Fiscal
autonomy is a constitutional grant, not a tag obtainable by
membership.
We note with interest that the special provision under
Rep. Act No. 8522, while cited under the heading of the
CHR, did not specifically mention CHR as among those
offices to which the special provision to formulate and
implement organizational structures apply, but merely
states its coverage to include Constitutional Commissions
and Offices enjoying fiscal autonomy. In contrast, the
Special Provision Applicable to the Judiciary under Article
XXVIII of the General Appropriations Act of 1998
specifically mentions that such special provision applies
to the judiciary and had categorically authorized the Chief
Justice of the Supreme Court to formulate and implement
the organizational structure of the Judiciary, to wit:
1. Organizational Structure. Any provision of law to the
contrary notwithstanding and within the limits of their
respective appropriations authorized in this Act, the Chief
Justice of the Supreme Court is authorized to formulate
and implement organizational structure of the Judiciary,
to fix and determine the salaries, allowances, and other
benefits of their personnel, and whenever public interest
so requires, make adjustments in the personal services
itemization including, but not limited to, the transfer of item
or creation of new positions in the Judiciary; PROVIDED,
That officers and employees whose positions are affected
by such reorganization or adjustments shall be granted
retirement gratuities and separation pay in accordance
with existing law, which shall be payable from any
unexpended balance of, or savings in the appropriations
of their respective offices: PROVIDED, FURTHER, That
the implementation hereof shall be in accordance with
salary rates, allowances and other benefits authorized
under compensation standardization laws. (Emphasis
supplied.)
All told, the CHR, although admittedly a constitutional
creation is, nonetheless, not included in the genus of
offices accorded fiscal autonomy by constitutional or
legislative fiat.
Even assuming en arguendo that the CHR enjoys fiscal
autonomy, we share the stance of the DBM that the grant
of fiscal autonomy notwithstanding, all government offices
must, all the same, kowtow to the Salary Standardization
Law. We are of the same mind with the DBM on its
standpoint, thus-
Being a member of the fiscal autonomy group does not
vest the agency with the authority to reclassify, upgrade,
119
and create positions without approval of the DBM. While
the members of the Group are authorized to formulate
and implement the organizational structures of their
respective offices and determine the compensation of
their personnel, such authority is not absolute and must
be exercised within the parameters of the Unified Position
Classification and Compensation System established
under RA 6758 more popularly known as the
Compensation Standardization Law.25 (Emphasis
supplied.)
The most lucid argument against the stand of respondent,
however, is the provision of Rep. Act No. 8522 "that the
implementation hereof shall be in accordance with salary
rates, allowances and other benefits authorized under
compensation standardization laws."26
Indeed, the law upon which respondent heavily anchors
its case upon has expressly provided that any form of
adjustment in the organizational structure must be within
the parameters of the Salary Standardization Law.
The Salary Standardization Law has gained impetus in
addressing one of the basic causes of discontent of many
civil servants.27 For this purpose, Congress has
delegated to the DBM the power to administer the Salary
Standardization Law and to ensure that the spirit behind
it is observed. This power is part of the system of checks
and balances or system of restraints in our government.
The DBM's exercise of such authority is not in itself an
arrogation inasmuch as it is pursuant to the paramount
law of the land, the Salary Standardization Law and the
Administrative Code.
To be sure, considering his expertise on matters affecting
the nation's coffers, the Secretary of the DBM, as the
President's alter ego, knows from where he speaks
inasmuch as he has the front seat view of the adverse
effects of an unwarranted upgrading or creation of
positions in the CHR in particular and in the entire
government in general.
WHEREFORE, the petition is GRANTED, the Decision
dated 29 November 2001 of the Court of Appeals in CA-
G.R. SP No. 59678 and its Resolution dated 11
September 2002 are hereby REVERSED and SET
ASIDE. The ruling dated 29 March 1999 of the Civil
Service Commision-National Capital Region is
REINSTATED. The Commission on Human Rights
Resolution No. A98-047 dated 04 September 1998,
Resolution No. A98-055 dated 19 October 1998 and
Resolution No. A98-062 dated 17 November 1998 without
the approval of the Department of Budget and
Management are disallowed. No pronouncement as to
costs.
SO ORDERED.
Puno, Acting C.J., Austria-Martinez, Callejo, Sr., and
Tinga, JJ., concur.

In line with its role to breathe life into the policy behind the
Salary Standardization Law of "providing equal pay for
substantially equal work and to base differences in pay
upon substantive differences in duties and
responsibilities, and qualification requirements of the
positions," the DBM, in the case under review, made a
determination, after a thorough evaluation, that the
reclassification and upgrading scheme proposed by the
CHR lacks legal rationalization.

The DBM expounded that Section 78 of the general

provisions of the General Appropriations Act FY 1998,
which the CHR heavily relies upon to justify its
reclassification scheme, explicitly provides that "no
organizational unit or changes in key positions shall be
authorized unless provided by law or directed by the
President." Here, the DBM discerned that there is no law
authorizing the creation of a Finance Management Office
and a Public Affairs Office in the CHR. Anent CHR's
proposal to upgrade twelve positions of Attorney VI, SG-
26 to Director IV, SG-28, and four positions of Director III,
SG-27 to Director IV, SG-28, in the Central Office, the
DBM denied the same as this would change the context
from support to substantive without actual change in
functions.

This view of the DBM, as the law's designated body to

implement and administer a unified compensation
system, is beyond cavil. The interpretation of an
administrative government agency, which is tasked to
implement a statute is accorded great respect and
ordinarily controls the construction of the courts. In
Energy Regulatory Board v. Court of Appeals,28 we
echoed the basic rule that the courts will not interfere in
matters which are addressed to the sound discretion of
government agencies entrusted with the regulation of
activities coming under the special technical knowledge
and training of such agencies.

120
EN BANC
G.R. No. 157509 January 18, 2005
AUTOMOTIVE INDUSTRY WORKERS ALLIANCE
(AIWA) and its Affiliated Unions: Mitsubishi Motors
Workers Phils. Union; Mitsubishi Motors Phils.
Supervisors Union, Nissan Motors Phils., Inc. Workers
Union, Toyota Motors Phils. Workers Union,
DURASTEEL WORKERS UNION, FILSHUTTERS
EMPLOYEES & WORKERS UNION, NATIONAL LABOR
UNION, PEPSI-COLA SUPERVISORS AND
EMPLOYEES UNION, PSBA FACULTY ASSOCIATION,
PLDT SECURITY PERSONNEL UNION, PUREFOODS
UNIFIED LABOR ORGANIZATION, SAMAHANG
MANGGAGAWA NG BICUTAN CONTAINERS CORP.,
SAMAHANG MANGGAGAWA NG CINDERELLA,
SAMAHANG MANGGAGAWA NG LAURA’S FOOD
PRODUCTS, petitioners,
vs.
HON. ALBERTO ROMULO, in his capacity as Executive
Secretary, and HON. PATRICIA STO. TOMAS, in her
capacity as Secretary of Labor and Employment,
respondents.
DECISION
CHICO-NAZARIO, J.:
Petitioners, composed of ten (10) labor unions, call upon
this Court to exercise its power of judicial review to
declare as unconstitutional an executive order assailed to
be in derogation of the constitutional doctrine of
separation of powers.
In an original action for certiorari, petitioners invoke their
status as labor unions and as taxpayers whose rights and
interests are allegedly violated and prejudiced by
Executive Order No. 185 dated 10 March 2003 whereby
administrative supervision over the National Labor
Relations Commission (NLRC), its regional branches and
all its personnel including the executive labor arbiters and
labor arbiters was transferred from the NLRC Chairperson
to the Secretary of Labor and Employment. In support of
their position,1 petitioners argue that the NLRC -- created
by Presidential Decree No. 442, otherwise known as the
Labor Code, during Martial Law – was an integral part of
the Department (then Ministry) of Labor and Employment
(DOLE) under the administrative supervision of the
Secretary of Justice. During the time of President
Corazon C. Aquino, and while she was endowed with
legislative functions after EDSA I, Executive Order No.
2922 was issued whereby the NLRC became an agency
attached to the DOLE for policy and program coordination
and for administrative supervision. On 02 March 1989,
Article 213 of the Labor Code was expressly amended by
Republic Act No. 6715 declaring that the NLRC was to be
attached to the DOLE for program and policy coordination
only while the administrative supervision over the NLRC,
its regional branches and personnel, was turned over to
the NLRC Chairman. The subject E.O. No. 185, in
authorizing the Secretary of Labor to exercise
administrative supervision over the NLRC, its regional
branches and personnel, allegedly reverted to the pre-
Rep. Act No. 6715 set-up, amending the latter law which
only Congress can do.
The respondents herein, as represented by the Office of
the Solicitor General, opposed the petition on procedural3
and substantive4 grounds. Procedurally, it is alleged that
the petition does not pose an actual case or controversy
upon which judicial review may be exercised as
petitioners have not specifically cited how E.O. No. 185
has prejudiced or threatened to prejudice their rights and
existence as labor unions and as taxpayers. Closely
intertwined therewith, respondents further argue that
petitioners have no locus standi to assail the validity of
E.O. No. 185, not even in their capacity as taxpayers,
considering that labor unions are exempt from paying
taxes, citing Sec. 30 of the Tax Reform Act of 1997. Even
assuming that their individual members are taxpayers,
respondents maintain that a taxpayer suit will not prosper
as E.O. No. 185 does not require additional appropriation
for its implementation. As the petition can be decided
without passing on the validity of the subject executive
order, respondents conclude that the same should be
forthwith dismissed.
Even on the merits, respondents advance the view that
the petition must fail as the administrative supervision
granted by the Labor Code to the NLRC Chairman over
the NLRC, its regional branches and personnel, does not
place them beyond the President’s broader power of
control and supervision, a power conferred no less than
by the Constitution in Section 17, Article VII thereof. Thus,
in the exercise of the President’s power of control and
supervision, he can generally oversee the operations of
the NLRC, its regional branches and personnel thru his
alter ego, the Secretary of Labor, pursuant to the doctrine
of qualified political agency.
In their Reply,5 petitioners affirm their locus standi
contending that they are suing for and in behalf of their
members – estimated to be more or less fifty thousand
(50,000) workers – who are the real parties to be affected
by the resolution of this Court. They likewise maintain that
they are suing in behalf of the employees of the NLRC
who have pending cases for dismissal. Thus, possessed
of the necessary standing, petitioners theorize that the
issue before this Court must necessarily be decided as it
involves an act of the Chief Executive amending a
provision of law.
For clarity, E.O. No. 185 is hereby quoted:
EXECUTIVE ORDER NO. 185
AUTHORIZING THE SECRETARY OF LABOR AND
EMPLOYMENT TO EXERCISE ADMINISTRATIVE
SUPERVISION OVER THE NATIONAL LABOR
RELATIONS COMMISSION
WHEREAS, Section 17, Article VII of the Constitution
provides that the President shall have control of all
executive departments, bureaus and offices and shall
ensure that the laws be faithfully executed;
WHEREAS, the National Labor Relations Commission
(NLRC) which was created by virtue of Presidential
Decree No. 442, otherwise known as the "Labor Code of
the Philippines," is an agency under the Executive
Department and was originally envisaged as being an
integral part of the Department (then Ministry) of Labor
and Employment (DOLE) under the administrative
supervision of the Secretary of Labor and Employment
("Secretary of Labor");
WHEREAS, upon the issuance of Executive Order No.
292, otherwise known as the "Revised Administrative
Code of 1987" (the "Administrative Code"), the NLRC, by
virtue of Section 25, Chapter 6, Title VII, Book IV thereof,
became an agency attached to the DOLE for policy and
program coordination and administrative supervision;
WHEREAS, Article 213 of the Labor Code and Section
25, Chapter 6, Title VII, Book IV of the Administrative
121
Code were amended by Republic Act. No. 6715 approved
on March 2, 1989, which provides that the NLRC shall be
attached to the DOLE for program and policy coordination
only and transferred administrative supervision over the
NLRC, all its regional branches and personnel to the
NLRC Chairman;
WHEREAS, Section 16, Article III of the Constitution
guarantees the right of all persons to a speedy disposition
of their cases before all judicial, quasi-judicial and
administrative bodies;
WHEREAS, the Secretary of Labor, after evaluating the
NLRC’s performance record in the last five (5) years,
including the rate of disposition of pending cases before
it, has informed the President that there is a need to
expedite the disposition of labor cases pending before the
NLRC and all its regional and sub-regional branches or
provincial extension units and initiate potent measures to
prevent graft and corruption therein so as to reform its
systems and personnel, as well as infuse the organization
with a sense of public service in consonance with the
imperative of change for the greater interest of the people;
WHEREAS, after consultations with the relevant sectors,
the Secretary of Labor has recommended that the
President, pursuant to her powers under the Constitution
and existing laws, authorize the Secretary of Labor to
exercise administrative supervision over the NLRC and all
its regional and sub-regional branches or provincial
extension units with the objective of improving the rate of
disposition of pending cases and institute adequate
measures for the prevention of graft and corruption within
the said agency;
NOW, THEREFORE, I, GLORIA MACAPAGAL
ARROYO, President of the Republic of the Philippines, by
virtue of the powers vested in me by the Constitution and
existing laws, do hereby order:
SECTION 1. Authority To Exercise Administrative
Supervision. – The Secretary of Labor is hereby
authorized to exercise administrative supervision over the
NLRC, its regional branches and all its personnel,
including the Executive Labor Arbiters and Labor Arbiters,
with the objective of improving the rate of disposition of
cases pending before it and its regional and sub-regional
branches or provincial extension units and to institute
adequate measures for the prevention of graft and
corruption within the said agency.
For this purpose, the Secretary of Labor shall, among
others:
a. Generally oversee the operations of the NLRC and its
regional and sub-regional branches or provincial
extension units for the purpose of ensuring that cases
pending before them are decided or resolved
expeditiously;
b. Require the submission of reports as the Secretary of
Labor may deem necessary;
c. Initiate measures within the agency to prevent graft and
corruption, including but not limited to, the conduct of
management audits, performance evaluations and
inspections to determine compliance with established
policies, standards and guidelines;
d. To take such action as may be necessary for the proper
performance of official functions, including rectification of
violations, abuses and other forms of mal-administration;
and
e. Investigate, on its own or upon complaint, matters
involving disciplinary action against any of the NLRC’s
personnel, including Presidential appointees, in
accordance with existing laws, rules and regulations. After
completing his/her investigation, the Secretary of Labor
shall submit a report to the President on the investigation
conducted with a recommendation as to the penalty to be
imposed or other action to be taken, including referral to
the Presidential Anti-Graft Commission (PAGC), the
Office of the Ombudsman or any other office, committee,
commission, agency, department, instrumentality or
branch of the government for appropriate action.
The authority conferred herein upon the Secretary of
Labor shall not extend to the power to review, reverse,
revise, or modify the decisions of the NLRC in the
exercise of its quasi-judicial functions (cf. Section 38(2)
(b), Chapter 7, Book IV, Administrative Code).
SECTION 2. Report to the Secretary of Labor. – The
NLRC, through its Chairman, shall submit a report to the
Secretary of Labor within thirty (30) days from issuance of
this Executive Order, on the following matters:
a. Performance Report/Audit for the last five (5) years,
including list of pending cases and cases disposed of
within the said period by the NLRC en banc, by Division
and by the Labor Arbiters in each of its regional and sub-
regional branches or provincial extension units;
b. Detailed Master Plan on how to liquidate its backlog of
cases with clear timetables to clean up its dockets within
six (6) months from the issuance hereof;
c. Complete inventory of its assets and list of personnel
indicating their present positions and stations; and
d. Such other matters as may be required by the
Secretary of Labor.
SECTION 3. Rules and Regulations. – The Secretary of
Labor, in consultation with the Chairman of the NLRC, is
hereby authorized to issue rules and regulations for the
effective implementation of the provisions of this
Executive Order.
SECTION 4. Repealing Clause. All laws, executive
issuances, rules and regulations or parts thereof which
are inconsistent with the provisions of this Executive
Order are hereby repealed, amended, or modified
accordingly.
SECTION 5. Effectivity. – This Executive Order shall take
effect immediately upon the completion of its publication
in the Official Gazette or in a newspaper of general
circulation in the country.
City of Manila, March 10, 2003.6
The constitutionality of a governmental act having been
challenged, it comes as no surprise that the first line of
defense is to question the standing of petitioners and the
justiciability of herein case.
It is hornbook doctrine that the exercise of the power of
judicial review requires the concurrence of the following
requisites, namely: (1) the existence of an appropriate
case; (2) an interest personal and substantial by the party
raising the constitutional question; (3) the plea that the
122
function be exercised at the earliest opportunity; and (4)
the necessity that the constitutional question be passed
upon in order to decide the case.71awphi1.nét
As correctly pointed out by respondents, judicial review
cannot be exercised in vacuo. The function of the courts
is to determine controversies between litigants and not to
give advisory opinions.8 The power of judicial review can
only be exercised in connection with a bona fide case or
controversy which involves the statute sought to be
reviewed.9
Even with the presence of an actual case or controversy,
the Court may refuse to exercise judicial review unless the
constitutional question is brought before it by a party
having the requisite standing to challenge it.10 Legal
standing or locus standi is defined as a "personal and
substantial interest in the case such that the party has
sustained or will sustain direct injury as a result of the
governmental act that is being challenged."11 For a
citizen to have standing, he must establish that he has
suffered some actual or threatened injury as a result of
the allegedly illegal conduct of the government; the injury
is fairly traceable to the challenged action; and the injury
is likely to be redressed by a favorable action.12
Petitioners have not shown that they have sustained or
are in danger of sustaining any personal injury attributable
to the enactment of E.O. No. 185. As labor unions
representing their members, it cannot be said that E.O.
No. 185 will prejudice their rights and interests
considering that the scope of the authority conferred upon
the Secretary of Labor does not extend to the power to
review, reverse, revise or modify the decisions of the
NLRC in the exercise of its quasi-judicial functions.13
Thus, only NLRC personnel who may find themselves the
subject of the Secretary of Labor’s disciplinary authority,
conferred by Section 1(d) of the subject executive order,
may be said to have a direct and specific interest in raising
the substantive issue herein. Moreover, and if at all, only
Congress, and not petitioners, can claim any injury14
from the alleged executive encroachment of the
legislative function to amend, modify and/or repeal laws.
Neither can standing be conferred on petitioners as
taxpayers since petitioners have not established
disbursement of public funds in contravention of law or the
Constitution.15 A taxpayer’s suit is properly brought only
when there is an exercise of the spending or taxing power
of Congress.16 As correctly pointed out by respondents,
E.O. No. 185 does not even require for its implementation
additional appropriation.
All told, if we were to follow the strict rule on locus standi,
this petition should be forthwith dismissed on that score.
The rule on standing, however, is a matter of procedure,
hence, can be relaxed for nontraditional plaintiffs like
ordinary citizens, taxpayers and legislators when the
public interest so requires, such as when the matter is of
transcendental importance, of overarching significance to
society, or of paramount public interest.171awphi1.nét
The question is, does the issue posed in this petition meet
the exacting standard required for this Court to take the
liberal approach and recognize the standing of herein
petitioners?
The instant petition fails to persuade us.
The subject matter of E.O. No. 185 is the grant of authority
by the President to the Secretary of Labor to exercise
administrative supervision over the NLRC, its regional
branches and all its personnel, including the Executive
Labor Arbiters and Labor Arbiters. Its impact, sans the
challenge to its constitutionality, is thereby limited to the
departments to which it is addressed. Taking our cue from
the early case of Olsen v. Herstein and Rafferty,18 the
subject executive order can be considered as nothing
more or less than a command from a superior to an
inferior. It creates no relation except between the official
who issued it and the officials who received it. It has for
its object simply the efficient and economical
administration of the affairs of the department to which it
is issued in accordance with the law governing the subject
matter. Administrative in its nature, the subject order does
not pass beyond the limits of the departments to which it
is directed, hence, it has not created any rights in third
persons, not even in the fifty thousand or so union
members being represented by petitioners who may or
may not have pending cases before the labor arbiters or
the NLRC.
In fine, considering that the governmental act being
questioned has a limited reach, its impact confined to
corridors of the executive department, this is not one of
those exceptional occasions where the Court is justified
in sweeping aside a critical procedural requirement,
rooted as it is in the constitutionally enshrined principle of
separation of powers. As succinctly put by Mr. Justice
Reynato S. Puno in his dissenting opinion in the first
Kilosbayan case:19
. . . [C]ourts are neither free to decide all kinds of cases
dumped into their laps nor are they free to open their
doors to all parties or entities claiming a grievance. The
rationale for this constitutional requirement of locus standi
is by no means trifle. It is intended "to assure a vigorous
adversary presentation of the case, and, perhaps more
importantly to warrant the judiciary’s overruling the
determination of a coordinate, democratically elected
organ of government."20 It thus goes to the very essence
of representative democracies.
...
A lesser but not insignificant reason for screening the
standing of persons who desire to litigate constitutional
issues is economic in character. Given the sparseness of
our resources, the capacity of courts to render efficient
judicial service to our people is severely limited. For
courts to indiscriminately open their doors to all types of
suits and suitors is for them to unduly overburden their
dockets, and ultimately render themselves ineffective
dispensers of justice. To be sure, this is an evil that clearly
confronts our judiciary today.
All things considered, whether or not E.O. No. 185 is
indeed unconstitutional will have to await the proper party
in a proper case to assail its validity.
WHEREFORE, premises considered, the instant petition
dated 27 March 2003 is hereby DISMISSED for lack of
merit. No costs.
SO ORDERED.
Puno, (Acting C.J.), Panganiban, Quisumbing, Ynares-
Santiago, Sandoval-Gutierrez, Carpio, Austria-Martinez,
Corona, Carpio-Morales, Callejo, Sr., Azcuna, Tinga, and
Garcia, JJ., concur.
Davide, Jr., C.J., on leave.
123
CITIZEN STANDING
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-63915 April 24, 1985
LORENZO M. TAÑADA, ABRAHAM F. SARMIENTO,
and MOVEMENT OF ATTORNEYS FOR
BROTHERHOOD, INTEGRITY AND NATIONALISM,
INC. [MABINI], petitioners,
vs.
HON. JUAN C. TUVERA, in his capacity as Executive
Assistant to the President, HON. JOAQUIN VENUS,
in his capacity as Deputy Executive Assistant to the
President , MELQUIADES P. DE LA CRUZ, in his
capacity as Director, Malacañang Records Office,
and FLORENDO S. PABLO, in his capacity as
Director, Bureau of Printing, respondents.
ESCOLIN, J.:
Invoking the people's right to be informed on matters of
public concern, a right recognized in Section 6, Article IV
of the 1973 Philippine Constitution, 1 as well as the
principle that laws to be valid and enforceable must be
published in the Official Gazette or otherwise effectively
promulgated, petitioners seek a writ of mandamus to
compel respondent public officials to publish, and/or
cause the publication in the Official Gazette of various
presidential decrees, letters of instructions, general
orders, proclamations, executive orders, letter of
implementation and administrative orders.
Specifically, the publication of the following presidential
issuances is sought:
a] Presidential Decrees Nos. 12, 22, 37,
38, 59, 64, 103, 171, 179, 184, 197, 200,
234, 265, 286, 298, 303, 312, 324, 325,
326, 337, 355, 358, 359, 360, 361, 368,
404, 406, 415, 427, 429, 445, 447, 473,
486, 491, 503, 504, 521, 528, 551, 566,
573, 574, 594, 599, 644, 658, 661, 718,
731, 733, 793, 800, 802, 835, 836, 923,
935, 961, 1017-1030, 1050, 1060-1061,
1085, 1143, 1165, 1166, 1242, 1246,
1250, 1278, 1279, 1300, 1644, 1772,
1808, 1810, 1813-1817, 1819-1826,
1829-1840, 1842-1847.
b] Letter of Instructions Nos.: 10, 39, 49,
72, 107, 108, 116, 130, 136, 141, 150,
153, 155, 161, 173, 180, 187, 188, 192,
193, 199, 202, 204, 205, 209, 211-213,
215-224, 226-228, 231-239, 241-245,
248, 251, 253-261, 263-269, 271-273,
275-283, 285-289, 291, 293, 297-299,
301-303, 309, 312-315, 325, 327, 343,
346, 349, 357, 358, 362, 367, 370, 382,
385, 386, 396-397, 405, 438-440, 444-
445, 473, 486, 488, 498, 501, 399, 527,
561, 576, 587, 594, 599, 600, 602, 609,
610, 611, 612, 615, 641, 642, 665, 702,
712-713, 726, 837-839, 878-879, 881,
882, 939-940, 964,997,1149-1178,1180-
1278.
c] General Orders Nos.: 14, 52, 58, 59,
60, 62, 63, 64 & 65.
d] Proclamation Nos.: 1126, 1144, 1147,
1151, 1196, 1270, 1281, 1319-1526,
1529, 1532, 1535, 1538, 1540-1547,
1550-1558, 1561-1588, 1590-1595,
1594-1600, 1606-1609, 1612-1628,
1630-1649, 1694-1695, 1697-1701,
1705-1723, 1731-1734, 1737-1742,
1744, 1746-1751, 1752, 1754, 1762,
1764-1787, 1789-1795, 1797, 1800,
1802-1804, 1806-1807, 1812-1814,
1816, 1825-1826, 1829, 1831-1832,
1835-1836, 1839-1840, 1843-1844,
1846-1847, 1849, 1853-1858, 1860,
1866, 1868, 1870, 1876-1889, 1892,
1900, 1918, 1923, 1933, 1952, 1963,
1965-1966, 1968-1984, 1986-2028,
2030-2044, 2046-2145, 2147-2161,
2163-2244.
e] Executive Orders Nos.: 411, 413, 414,
427, 429-454, 457- 471, 474-492, 494-
507, 509-510, 522, 524-528, 531-532,
536, 538, 543-544, 549, 551-553, 560,
563, 567-568, 570, 574, 593, 594, 598-
604, 609, 611- 647, 649-677, 679-703,
705-707, 712-786, 788-852, 854-857.
f] Letters of Implementation Nos.: 7, 8, 9,
10, 11-22, 25-27, 39, 50, 51, 59, 76, 80-
81, 92, 94, 95, 107, 120, 122, 123.
g] Administrative Orders Nos.: 347, 348,
352-354, 360- 378, 380-433, 436-439.
The respondents, through the Solicitor General, would
have this case dismissed outright on the ground that
petitioners have no legal personality or standing to bring
the instant petition. The view is submitted that in the
absence of any showing that petitioners are personally
and directly affected or prejudiced by the alleged non-
publication of the presidential issuances in question 2 said
petitioners are without the requisite legal personality to
institute this mandamus proceeding, they are not being
"aggrieved parties" within the meaning of Section 3, Rule
65 of the Rules of Court, which we quote:
SEC. 3. Petition for Mandamus.—When
any tribunal, corporation, board or person
unlawfully neglects the performance of
an act which the law specifically enjoins
as a duty resulting from an office, trust, or
station, or unlawfully excludes another
from the use a rd enjoyment of a right or
office to which such other is entitled, and
there is no other plain, speedy and
adequate remedy in the ordinary course
of law, the person aggrieved thereby may
file a verified petition in the proper court
alleging the facts with certainty and
praying that judgment be rendered
commanding the defendant, immediately
or at some other specified time, to do the
act required to be done to Protect the
rights of the petitioner, and to pay the
damages sustained by the petitioner by
reason of the wrongful acts of the
defendant.
Upon the other hand, petitioners maintain that since the
subject of the petition concerns a public right and its
object is to compel the performance of a public duty, they
need not show any specific interest for their petition to be
given due course.
124
The issue posed is not one of first impression. As early as
the 1910 case of Severino vs. Governor General, 3 this
Court held that while the general rule is that "a writ of
mandamus would be granted to a private individual only
in those cases where he has some private or particular
interest to be subserved, or some particular right to be
protected, independent of that which he holds with the
public at large," and "it is for the public officers exclusively
to apply for the writ when public rights are to be subserved
[Mithchell vs. Boardmen, 79 M.e., 469]," nevertheless,
"when the question is one of public right and the object of
the mandamus is to procure the enforcement of a public
duty, the people are regarded as the real party in interest
and the relator at whose instigation the proceedings are
instituted need not show that he has any legal or special
interest in the result, it being sufficient to show that he is
a citizen and as such interested in the execution of the
laws [High, Extraordinary Legal Remedies, 3rd ed., sec.
431].
Thus, in said case, this Court recognized the relator Lope
Severino, a private individual, as a proper party to the
mandamus proceedings brought to compel the Governor
General to call a special election for the position of
municipal president in the town of Silay, Negros
Occidental. Speaking for this Court, Mr. Justice Grant T.
Trent said:
We are therefore of the opinion that the
weight of authority supports the
proposition that the relator is a proper
party to proceedings of this character
when a public right is sought to be
enforced. If the general rule in America
were otherwise, we think that it would not
be applicable to the case at bar for the
reason 'that it is always dangerous to
apply a general rule to a particular case
without keeping in mind the reason for
the rule, because, if under the particular
circumstances the reason for the rule
does not exist, the rule itself is not
applicable and reliance upon the rule
may well lead to error'
No reason exists in the case at bar for
applying the general rule insisted upon
by counsel for the respondent. The
circumstances which surround this case
are different from those in the United
States, inasmuch as if the relator is not a
proper party to these proceedings no
other person could be, as we have seen
that it is not the duty of the law officer of
the Government to appear and represent
the people in cases of this character.
The reasons given by the Court in recognizing a private
citizen's legal personality in the aforementioned case
apply squarely to the present petition. Clearly, the right
sought to be enforced by petitioners herein is a public
right recognized by no less than the fundamental law of
the land. If petitioners were not allowed to institute this
proceeding, it would indeed be difficult to conceive of any
other person to initiate the same, considering that the
Solicitor General, the government officer generally
empowered to represent the people, has entered his
appearance for respondents in this case.
Respondents further contend that publication in the
Official Gazette is not a sine qua non requirement for the
effectivity of laws where the laws themselves provide for
their own effectivity dates. It is thus submitted that since
the presidential issuances in question contain special
provisions as to the date they are to take effect,
publication in the Official Gazette is not indispensable for
their effectivity. The point stressed is anchored on Article
2 of the Civil Code:
Art. 2. Laws shall take effect after fifteen
days following the completion of their
publication in the Official Gazette, unless
it is otherwise provided, ...
The interpretation given by respondent is in accord with
this Court's construction of said article. In a long line of
decisions,4 this Court has ruled that publication in the
Official Gazette is necessary in those cases where the
legislation itself does not provide for its effectivity date-for
then the date of publication is material for determining its
date of effectivity, which is the fifteenth day following its
publication-but not when the law itself provides for the
date when it goes into effect.
Respondents' argument, however, is logically correct only
insofar as it equates the effectivity of laws with the fact of
publication. Considered in the light of other statutes
applicable to the issue at hand, the conclusion is easily
reached that said Article 2 does not preclude the
requirement of publication in the Official Gazette, even if
the law itself provides for the date of its effectivity. Thus,
Section 1 of Commonwealth Act 638 provides as follows:
Section 1. There shall be published in the
Official Gazette [1] all important
legisiative acts and resolutions of a public
nature of the, Congress of the
Philippines; [2] all executive and
administrative orders and proclamations,
except such as have no general
applicability; [3] decisions or abstracts of
decisions of the Supreme Court and the
Court of Appeals as may be deemed by
said courts of sufficient importance to be
so published; [4] such documents or
classes of documents as may be
required so to be published by law; and
[5] such documents or classes of
documents as the President of the
Philippines shall determine from time to
time to have general applicability and
legal effect, or which he may authorize so
to be published. ...
The clear object of the above-quoted provision is to give
the general public adequate notice of the various laws
which are to regulate their actions and conduct as
citizens. Without such notice and publication, there would
be no basis for the application of the maxim "ignorantia
legis non excusat." It would be the height of injustice to
punish or otherwise burden a citizen for the transgression
of a law of which he had no notice whatsoever, not even
a constructive one.
Perhaps at no time since the establishment of the
Philippine Republic has the publication of laws taken so
vital significance that at this time when the people have
bestowed upon the President a power heretofore enjoyed
solely by the legislature. While the people are kept
abreast by the mass media of the debates and
deliberations in the Batasan Pambansa—and for the
diligent ones, ready access to the legislative records—no
125
such publicity accompanies the law-making process of
the President. Thus, without publication, the people have
no means of knowing what presidential decrees have
actually been promulgated, much less a definite way of
informing themselves of the specific contents and texts of
such decrees. As the Supreme Court of Spain ruled: "Bajo
la denominacion generica de leyes, se comprenden
tambien los reglamentos, Reales decretos, Instrucciones,
Circulares y Reales ordines dictadas de conformidad con
las mismas por el Gobierno en uso de su potestad. 5
The very first clause of Section I of Commonwealth Act
638 reads: "There shall be published in the Official
Gazette ... ." The word "shall" used therein imposes upon
respondent officials an imperative duty. That duty must be
enforced if the Constitutional right of the people to be
informed on matters of public concern is to be given
substance and reality. The law itself makes a list of what
should be published in the Official Gazette. Such listing,
to our mind, leaves respondents with no discretion
whatsoever as to what must be included or excluded from
such publication.
The publication of all presidential issuances "of a public
nature" or "of general applicability" is mandated by law.
Obviously, presidential decrees that provide for fines,
forfeitures or penalties for their violation or otherwise
impose a burden or. the people, such as tax and revenue
measures, fall within this category. Other presidential
issuances which apply only to particular persons or class
of persons such as administrative and executive orders
need not be published on the assumption that they have
been circularized to all concerned. 6
It is needless to add that the publication of presidential
issuances "of a public nature" or "of general applicability"
is a requirement of due process. It is a rule of law that
before a person may be bound by law, he must first be
officially and specifically informed of its contents. As
Justice Claudio Teehankee said in Peralta vs.
COMELEC 7:
In a time of proliferating decrees, orders
and letters of instructions which all form
part of the law of the land, the
requirement of due process and the Rule
of Law demand that the Official Gazette
as the official government repository
promulgate and publish the texts of all
such decrees, orders and instructions so
that the people may know where to
obtain their official and specific contents.
The Court therefore declares that presidential issuances
of general application, which have not been published,
shall have no force and effect. Some members of the
Court, quite apprehensive about the possible unsettling
effect this decision might have on acts done in reliance of
the validity of those presidential decrees which were
published only during the pendency of this petition, have
put the question as to whether the Court's declaration of
invalidity apply to P.D.s which had been enforced or
implemented prior to their publication. The answer is all
too familiar. In similar situations in the past this Court had
taken the pragmatic and realistic course set forth in Chicot
County Drainage District vs. Baxter Bank 8 to wit:
The courts below have proceeded on the
theory that the Act of Congress, having
been found to be unconstitutional, was
not a law; that it was inoperative,
conferring no rights and imposing no
duties, and hence affording no basis for
the challenged decree. Norton v. Shelby
County, 118 U.S. 425, 442; Chicago, 1. &
L. Ry. Co. v. Hackett, 228 U.S. 559, 566.
It is quite clear, however, that such broad
statements as to the effect of a
determination of unconstitutionality must
be taken with qualifications. The actual
existence of a statute, prior to such a
determination, is an operative fact and
may have consequences which cannot
justly be ignored. The past cannot always
be erased by a new judicial declaration.
The effect of the subsequent ruling as to
invalidity may have to be considered in
various aspects-with respect to particular
conduct, private and official. Questions of
rights claimed to have become vested, of
status, of prior determinations deemed to
have finality and acted upon accordingly,
of public policy in the light of the nature
both of the statute and of its previous
application, demand examination. These
questions are among the most difficult of
those which have engaged the attention
of courts, state and federal and it is
manifest from numerous decisions that
an all-inclusive statement of a principle of
absolute retroactive invalidity cannot be
justified.
Consistently with the above principle, this Court in Rutter
vs. Esteban 9 sustained the right of a party under the
Moratorium Law, albeit said right had accrued in his favor
before said law was declared unconstitutional by this
Court.
Similarly, the implementation/enforcement of presidential
decrees prior to their publication in the Official Gazette is
"an operative fact which may have consequences which
cannot be justly ignored. The past cannot always be
erased by a new judicial declaration ... that an all-inclusive
statement of a principle of absolute retroactive invalidity
cannot be justified."
From the report submitted to the Court by the Clerk of
Court, it appears that of the presidential decrees sought
by petitioners to be published in the Official Gazette, only
Presidential Decrees Nos. 1019 to 1030, inclusive, 1278,
and 1937 to 1939, inclusive, have not been so
published. 10 Neither the subject matters nor the texts of
these PDs can be ascertained since no copies thereof are
available. But whatever their subject matter may be, it is
undisputed that none of these unpublished PDs has ever
been implemented or enforced by the government.
In Pesigan vs. Angeles, 11 the Court, through Justice
Ramon Aquino, ruled that "publication is necessary to
apprise the public of the contents of [penal] regulations
and make the said penalties binding on the persons
affected thereby. " The cogency of this holding is
apparently recognized by respondent officials considering
the manifestation in their comment that "the government,
as a matter of policy, refrains from prosecuting violations
of criminal laws until the same shall have been published
in the Official Gazette or in some other publication, even
though some criminal laws provide that they shall take
effect immediately.
WHEREFORE, the Court hereby orders respondents to
publish in the Official Gazette all unpublished presidential
126
issuances which are of general application, and unless so
published, they shall have no binding force and effect.

SO ORDERED.

Relova, J., concurs.

Aquino, J., took no part.

Concepcion, Jr., J., is on leave.

127
G.R. No. 133250 July 9, 2002
FRANCISCO I. CHAVEZ, petitioner,
vs.
PUBLIC ESTATES AUTHORITY and AMARI
COASTAL BAY DEVELOPMENT
CORPORATION, respondents.
CARPIO, J.:
This is an original Petition for Mandamus with prayer for
a writ of preliminary injunction and a temporary
restraining order. The petition seeks to compel the
Public Estates Authority ("PEA" for brevity) to disclose all
facts on PEA's then on-going renegotiations with Amari
Coastal Bay and Development Corporation ("AMARI" for
brevity) to reclaim portions of Manila Bay. The petition
further seeks to enjoin PEA from signing a new
agreement with AMARI involving such reclamation.
The Facts
On November 20, 1973, the government, through the
Commissioner of Public Highways, signed a contract with
the Construction and Development Corporation of the
Philippines ("CDCP" for brevity) to reclaim certain
foreshore and offshore areas of Manila Bay. The contract
also included the construction of Phases I and II of the
Manila-Cavite Coastal Road. CDCP obligated itself to
carry out all the works in consideration of fifty percent of
the total reclaimed land.
On February 4, 1977, then President Ferdinand E.
Marcos issued Presidential Decree No. 1084 creating
PEA. PD No. 1084 tasked PEA "to reclaim land, including
foreshore and submerged areas," and "to develop,
improve, acquire, x x x lease and sell any and all kinds of
lands."1 On the same date, then President Marcos issued
Presidential Decree No. 1085 transferring to PEA the
"lands reclaimed in the foreshore and offshore of the
Manila Bay"2 under the Manila-Cavite Coastal Road and
Reclamation Project (MCCRRP).
On December 29, 1981, then President Marcos issued a
memorandum directing PEA to amend its contract with
CDCP, so that "[A]ll future works in MCCRRP x x x shall
be funded and owned by PEA." Accordingly, PEA and
CDCP executed a Memorandum of Agreement dated
December 29, 1981, which stated:
"(i) CDCP shall undertake all reclamation,
construction, and such other works in the
MCCRRP as may be agreed upon by the parties,
to be paid according to progress of works on a
unit price/lump sum basis for items of work to be
agreed upon, subject to price escalation,
retention and other terms and conditions provided
for in Presidential Decree No. 1594. All the
financing required for such works shall be
provided by PEA.
xxx
(iii) x x x CDCP shall give up all its development
rights and hereby agrees to cede and transfer in
favor of PEA, all of the rights, title, interest and
participation of CDCP in and to all the areas of
land reclaimed by CDCP in the MCCRRP as of
December 30, 1981 which have not yet been
sold, transferred or otherwise disposed of by
CDCP as of said date, which areas consist of
approximately Ninety-Nine Thousand Four
Hundred Seventy Three (99,473) square meters
in the Financial Center Area covered by land
pledge No. 5 and approximately Three Million
Three Hundred Eighty Two Thousand Eight
Hundred Eighty Eight (3,382,888) square meters
of reclaimed areas at varying elevations above
Mean Low Water Level located outside the
Financial Center Area and the First
Neighborhood Unit."3
On January 19, 1988, then President Corazon C. Aquino
issued Special Patent No. 3517, granting and transferring
to PEA "the parcels of land so reclaimed under the
Manila-Cavite Coastal Road and Reclamation Project
(MCCRRP) containing a total area of one million nine
hundred fifteen thousand eight hundred ninety four
(1,915,894) square meters." Subsequently, on April 9,
1988, the Register of Deeds of the Municipality of
Parañaque issued Transfer Certificates of Title Nos.
7309, 7311, and 7312, in the name of PEA, covering the
three reclaimed islands known as the "Freedom Islands"
located at the southern portion of the Manila-Cavite
Coastal Road, Parañaque City. The Freedom Islands
have a total land area of One Million Five Hundred
Seventy Eight Thousand Four Hundred and Forty One
(1,578,441) square meters or 157.841 hectares.
On April 25, 1995, PEA entered into a Joint Venture
Agreement ("JVA" for brevity) with AMARI, a private
corporation, to develop the Freedom Islands. The JVA
also required the reclamation of an additional 250
hectares of submerged areas surrounding these islands
to complete the configuration in the Master Development
Plan of the Southern Reclamation Project-MCCRRP.
PEA and AMARI entered into the JVA through negotiation
without public bidding.4 On April 28, 1995, the Board of
Directors of PEA, in its Resolution No. 1245, confirmed
the JVA.5 On June 8, 1995, then President Fidel V.
Ramos, through then Executive Secretary Ruben Torres,
approved the JVA.6
On November 29, 1996, then Senate President Ernesto
Maceda delivered a privilege speech in the Senate and
denounced the JVA as the "grandmother of all scams." As
a result, the Senate Committee on Government
Corporations and Public Enterprises, and the Committee
on Accountability of Public Officers and Investigations,
conducted a joint investigation. The Senate Committees
reported the results of their investigation in Senate
Committee Report No. 560 dated September 16,
1997.7 Among the conclusions of their report are: (1) the
reclaimed lands PEA seeks to transfer to AMARI under
the JVA are lands of the public domain which the
government has not classified as alienable lands and
therefore PEA cannot alienate these lands; (2) the
certificates of title covering the Freedom Islands are thus
void, and (3) the JVA itself is illegal.
On December 5, 1997, then President Fidel V. Ramos
issued Presidential Administrative Order No. 365 creating
a Legal Task Force to conduct a study on the legality of
the JVA in view of Senate Committee Report No. 560. The
members of the Legal Task Force were the Secretary of
Justice,8 the Chief Presidential Legal Counsel,9 and the
Government Corporate Counsel.10 The Legal Task Force
upheld the legality of the JVA, contrary to the conclusions
reached by the Senate Committees.11
128
On April 4 and 5, 1998, the Philippine Daily
Inquirer and Today published reports that there were on-
going renegotiations between PEA and AMARI under an
order issued by then President Fidel V. Ramos. According
to these reports, PEA Director Nestor Kalaw, PEA
Chairman Arsenio Yulo and retired Navy Officer Sergio
Cruz composed the negotiating panel of PEA.
On April 13, 1998, Antonio M. Zulueta filed before the
Court a Petition for Prohibition with Application for the
Issuance of a Temporary Restraining Order and
Preliminary Injunction docketed as G.R. No. 132994
seeking to nullify the JVA. The Court dismissed the
petition "for unwarranted disregard of judicial hierarchy,
without prejudice to the refiling of the case before the
proper court."12
On April 27, 1998, petitioner Frank I. Chavez ("Petitioner"
for brevity) as a taxpayer, filed the instant Petition for
Mandamus with Prayer for the Issuance of a Writ of
Preliminary Injunction and Temporary Restraining Order.
Petitioner contends the government stands to lose billions
of pesos in the sale by PEA of the reclaimed lands to
AMARI. Petitioner prays that PEA publicly disclose the
terms of any renegotiation of the JVA, invoking Section
28, Article II, and Section 7, Article III, of the 1987
Constitution on the right of the people to information on
matters of public concern. Petitioner assails the sale to
AMARI of lands of the public domain as a blatant violation
of Section 3, Article XII of the 1987 Constitution
prohibiting the sale of alienable lands of the public domain
to private corporations. Finally, petitioner asserts that he
seeks to enjoin the loss of billions of pesos in properties
of the State that are of public dominion.
After several motions for extension of time,13 PEA and
AMARI filed their Comments on October 19, 1998 and
June 25, 1998, respectively. Meanwhile, on December
28, 1998, petitioner filed an Omnibus Motion: (a) to
require PEA to submit the terms of the renegotiated PEA-
AMARI contract; (b) for issuance of a temporary
restraining order; and (c) to set the case for hearing on
oral argument. Petitioner filed a Reiterative Motion for
Issuance of a TRO dated May 26, 1999, which the Court
denied in a Resolution dated June 22, 1999.
In a Resolution dated March 23, 1999, the Court gave due
course to the petition and required the parties to file their
respective memoranda.
On March 30, 1999, PEA and AMARI signed the
Amended Joint Venture Agreement ("Amended JVA," for
brevity). On May 28, 1999, the Office of the President
under the administration of then President Joseph E.
Estrada approved the Amended JVA.
Due to the approval of the Amended JVA by the Office of
the President, petitioner now prays that on "constitutional
and statutory grounds the renegotiated contract be
declared null and void."14
The Issues
The issues raised by petitioner, PEA15 and AMARI16 are
as follows:
I. WHETHER THE PRINCIPAL RELIEFS
PRAYED FOR IN THE PETITION ARE MOOT
AND ACADEMIC BECAUSE OF SUBSEQUENT
EVENTS;
II. WHETHER THE PETITION MERITS
DISMISSAL FOR FAILING TO OBSERVE THE
PRINCIPLE GOVERNING THE HIERARCHY OF
COURTS;
III. WHETHER THE PETITION MERITS
DISMISSAL FOR NON-EXHAUSTION OF
ADMINISTRATIVE REMEDIES;
IV. WHETHER PETITIONER HAS LOCUS
STANDI TO BRING THIS SUIT;
V. WHETHER THE CONSTITUTIONAL RIGHT
TO INFORMATION INCLUDES OFFICIAL
INFORMATION ON ON-GOING
NEGOTIATIONS BEFORE A FINAL
AGREEMENT;
VI. WHETHER THE STIPULATIONS IN THE
AMENDED JOINT VENTURE AGREEMENT
FOR THE TRANSFER TO AMARI OF CERTAIN
LANDS, RECLAIMED AND STILL TO BE
RECLAIMED, VIOLATE THE 1987
CONSTITUTION; AND
VII. WHETHER THE COURT IS THE PROPER
FORUM FOR RAISING THE ISSUE OF
WHETHER THE AMENDED JOINT VENTURE
AGREEMENT IS GROSSLY
DISADVANTAGEOUS TO THE GOVERNMENT.
The Court's Ruling
First issue: whether the principal reliefs prayed for in
the petition are moot and academic because of
subsequent events.
The petition prays that PEA publicly disclose the "terms
and conditions of the on-going negotiations for a new
agreement." The petition also prays that the Court enjoin
PEA from "privately entering into, perfecting and/or
executing any new agreement with AMARI."
PEA and AMARI claim the petition is now moot and
academic because AMARI furnished petitioner on June
21, 1999 a copy of the signed Amended JVA containing
the terms and conditions agreed upon in the
renegotiations. Thus, PEA has satisfied petitioner's
prayer for a public disclosure of the renegotiations.
Likewise, petitioner's prayer to enjoin the signing of the
Amended JVA is now moot because PEA and AMARI
have already signed the Amended JVA on March 30,
1999. Moreover, the Office of the President has approved
the Amended JVA on May 28, 1999.
Petitioner counters that PEA and AMARI cannot avoid the
constitutional issue by simply fast-tracking the signing and
approval of the Amended JVA before the Court could act
on the issue. Presidential approval does not resolve the
constitutional issue or remove it from the ambit of judicial
review.
We rule that the signing of the Amended JVA by PEA and
AMARI and its approval by the President cannot operate
to moot the petition and divest the Court of its jurisdiction.
PEA and AMARI have still to implement the Amended
JVA. The prayer to enjoin the signing of the Amended JVA
on constitutional grounds necessarily includes preventing
its implementation if in the meantime PEA and AMARI
have signed one in violation of the Constitution.
129
Petitioner's principal basis in assailing the renegotiation of
the JVA is its violation of Section 3, Article XII of the
Constitution, which prohibits the government from
alienating lands of the public domain to private
corporations. If the Amended JVA indeed violates the
Constitution, it is the duty of the Court to enjoin its
implementation, and if already implemented, to annul the
effects of such unconstitutional contract.
The Amended JVA is not an ordinary commercial contract
but one which seeks to transfer title and ownership to
367.5 hectares of reclaimed lands and submerged
areas of Manila Bay to a single private corporation. It
now becomes more compelling for the Court to resolve
the issue to insure the government itself does not violate
a provision of the Constitution intended to safeguard the
national patrimony. Supervening events, whether
intended or accidental, cannot prevent the Court from
rendering a decision if there is a grave violation of the
Constitution. In the instant case, if the Amended JVA runs
counter to the Constitution, the Court can still prevent the
transfer of title and ownership of alienable lands of the
public domain in the name of AMARI. Even in cases
where supervening events had made the cases moot, the
Court did not hesitate to resolve the legal or constitutional
issues raised to formulate controlling principles to guide
the bench, bar, and the public.17
Also, the instant petition is a case of first impression. All
previous decisions of the Court involving Section 3, Article
XII of the 1987 Constitution, or its counterpart provision in
the 1973 Constitution,18 covered agricultural lands sold
to private corporations which acquired the lands from
private parties. The transferors of the private corporations
claimed or could claim the right to judicial confirmation
of their imperfect titles19 under Title II of
Commonwealth Act. 141 ("CA No. 141" for brevity). In the
instant case, AMARI seeks to acquire from PEA, a public
corporation, reclaimed lands and submerged areas
for non-agricultural purposes by purchase under PD
No. 1084 (charter of PEA) and Title III of CA No. 141.
Certain undertakings by AMARI under the Amended JVA
constitute the consideration for the purchase. Neither
AMARI nor PEA can claim judicial confirmation of their
titles because the lands covered by the Amended JVA are
newly reclaimed or still to be reclaimed. Judicial
confirmation of imperfect title requires open, continuous,
exclusive and notorious occupation of agricultural lands
of the public domain for at least thirty years since June 12,
1945 or earlier. Besides, the deadline for filing
applications for judicial confirmation of imperfect title
expired on December 31, 1987.20
Lastly, there is a need to resolve immediately the
constitutional issue raised in this petition because of the
possible transfer at any time by PEA to AMARI of title and
ownership to portions of the reclaimed lands. Under the
Amended JVA, PEA is obligated to transfer to AMARI the
latter's seventy percent proportionate share in the
reclaimed areas as the reclamation progresses. The
Amended JVA even allows AMARI to mortgage at any
time the entire reclaimed area to raise financing for the
reclamation project.21
Second issue: whether the petition merits dismissal
for failing to observe the principle governing the
hierarchy of courts.
PEA and AMARI claim petitioner ignored the judicial
hierarchy by seeking relief directly from the Court. The
principle of hierarchy of courts applies generally to cases
involving factual questions. As it is not a trier of facts, the
Court cannot entertain cases involving factual issues. The
instant case, however, raises constitutional issues of
transcendental importance to the public.22 The Court can
resolve this case without determining any factual issue
related to the case. Also, the instant case is a petition for
mandamus which falls under the original jurisdiction of the
Court under Section 5, Article VIII of the Constitution. We
resolve to exercise primary jurisdiction over the instant
case.
Third issue: whether the petition merits dismissal for
non-exhaustion of administrative remedies.
PEA faults petitioner for seeking judicial intervention in
compelling PEA to disclose publicly certain information
without first asking PEA the needed information. PEA
claims petitioner's direct resort to the Court violates the
principle of exhaustion of administrative remedies. It also
violates the rule that mandamus may issue only if there is
no other plain, speedy and adequate remedy in the
ordinary course of law.
PEA distinguishes the instant case from Tañada v.
Tuvera23 where the Court granted the petition for
mandamus even if the petitioners there did not initially
demand from the Office of the President the publication of
the presidential decrees. PEA points out that in Tañada,
the Executive Department had an affirmative
statutory duty under Article 2 of the Civil Code24 and
Section 1 of Commonwealth Act No. 638 25 to publish the
presidential decrees. There was, therefore, no need for
the petitioners in Tañada to make an initial demand from
the Office of the President. In the instant case, PEA
claims it has no affirmative statutory duty to disclose
publicly information about its renegotiation of the JVA.
Thus, PEA asserts that the Court must apply the principle
of exhaustion of administrative remedies to the instant
case in view of the failure of petitioner here to demand
initially from PEA the needed information.
The original JVA sought to dispose to AMARI public lands
held by PEA, a government corporation. Under Section
79 of the Government Auditing Code,26 the disposition of
government lands to private parties requires public
bidding. PEA was under a positive legal duty to
disclose to the public the terms and conditions for the
sale of its lands. The law obligated PEA to make this
public disclosure even without demand from petitioner or
from anyone. PEA failed to make this public disclosure
because the original JVA, like the Amended JVA, was the
result of a negotiated contract, not of a public bidding.
Considering that PEA had an affirmative statutory duty to
make the public disclosure, and was even in breach of this
legal duty, petitioner had the right to seek direct judicial
intervention.
Moreover, and this alone is determinative of this issue, the
principle of exhaustion of administrative remedies does
not apply when the issue involved is a purely legal or
constitutional question.27 The principal issue in the instant
case is the capacity of AMARI to acquire lands held by
PEA in view of the constitutional ban prohibiting the
alienation of lands of the public domain to private
corporations. We rule that the principle of exhaustion of
administrative remedies does not apply in the instant
case.
Fourth issue: whether petitioner has locus standi to
bring this suit
130
PEA argues that petitioner has no standing to
institute mandamus proceedings to enforce his
constitutional right to information without a showing that
PEA refused to perform an affirmative duty imposed on
PEA by the Constitution. PEA also claims that petitioner
has not shown that he will suffer any concrete injury
because of the signing or implementation of the Amended
JVA. Thus, there is no actual controversy requiring the
exercise of the power of judicial review.
The petitioner has standing to bring this taxpayer's suit
because the petition seeks to compel PEA to comply with
its constitutional duties. There are two constitutional
issues involved here. First is the right of citizens to
information on matters of public concern. Second is the
application of a constitutional provision intended to insure
the equitable distribution of alienable lands of the public
domain among Filipino citizens. The thrust of the first
issue is to compel PEA to disclose publicly information on
the sale of government lands worth billions of pesos,
information which the Constitution and statutory law
mandate PEA to disclose. The thrust of the second issue
is to prevent PEA from alienating hundreds of hectares of
alienable lands of the public domain in violation of the
Constitution, compelling PEA to comply with a
constitutional duty to the nation.
Moreover, the petition raises matters of transcendental
importance to the public. In Chavez v. PCGG,28 the Court
upheld the right of a citizen to bring a taxpayer's suit on
matters of transcendental importance to the public, thus -
"Besides, petitioner emphasizes, the matter of
recovering the ill-gotten wealth of the Marcoses is
an issue of 'transcendental importance to the
public.' He asserts that ordinary taxpayers have a
right to initiate and prosecute actions questioning
the validity of acts or orders of government
agencies or instrumentalities, if the issues raised
are of 'paramount public interest,' and if they
'immediately affect the social, economic and
moral well being of the people.'
Moreover, the mere fact that he is a citizen
satisfies the requirement of personal interest,
when the proceeding involves the assertion of a
public right, such as in this case. He invokes
several decisions of this Court which have set
aside the procedural matter of locus standi, when
the subject of the case involved public interest.
xxx
In Tañada v. Tuvera, the Court asserted that
when the issue concerns a public right and the
object of mandamus is to obtain the enforcement
of a public duty, the people are regarded as the
real parties in interest; and because it is sufficient
that petitioner is a citizen and as such is
interested in the execution of the laws, he need
not show that he has any legal or special interest
in the result of the action. In the aforesaid case,
the petitioners sought to enforce their right to be
informed on matters of public concern, a right
then recognized in Section 6, Article IV of the
1973 Constitution, in connection with the rule that
laws in order to be valid and enforceable must be
published in the Official Gazette or otherwise
effectively promulgated. In ruling for the
petitioners' legal standing, the Court declared that
the right they sought to be enforced 'is a public
right recognized by no less than the fundamental
law of the land.'
Legaspi v. Civil Service Commission, while
reiterating Tañada, further declared that 'when a
mandamus proceeding involves the assertion of
a public right, the requirement of personal interest
is satisfied by the mere fact that petitioner is a
citizen and, therefore, part of the general 'public'
which possesses the right.'
Further, in Albano v. Reyes, we said that while
expenditure of public funds may not have been
involved under the questioned contract for the
development, management and operation of the
Manila International Container Terminal, 'public
interest [was] definitely involved considering the
important role [of the subject contract] . . . in the
economic development of the country and the
magnitude of the financial consideration
involved.' We concluded that, as a consequence,
the disclosure provision in the Constitution would
constitute sufficient authority for upholding the
petitioner's standing.
Similarly, the instant petition is anchored on the
right of the people to information and access to
official records, documents and papers — a right
guaranteed under Section 7, Article III of the 1987
Constitution. Petitioner, a former solicitor general,
is a Filipino citizen. Because of the satisfaction of
the two basic requisites laid down by decisional
law to sustain petitioner's legal standing, i.e. (1)
the enforcement of a public right (2) espoused by
a Filipino citizen, we rule that the petition at bar
should be allowed."
We rule that since the instant petition, brought by a
citizen, involves the enforcement of constitutional rights -
to information and to the equitable diffusion of natural
resources - matters of transcendental public importance,
the petitioner has the requisite locus standi.
Fifth issue: whether the constitutional right to
information includes official information on on-going
negotiations before a final agreement.
Section 7, Article III of the Constitution explains the
people's right to information on matters of public concern
in this manner:
"Sec. 7. The right of the people to information on
matters of public concern shall be recognized.
Access to official records, and to documents,
and papers pertaining to official acts,
transactions, or decisions, as well as to
government research data used as basis for
policy development, shall be afforded the citizen,
subject to such limitations as may be provided by
law." (Emphasis supplied)
The State policy of full transparency in all transactions
involving public interest reinforces the people's right to
information on matters of public concern. This State policy
is expressed in Section 28, Article II of the Constitution,
thus:
"Sec. 28. Subject to reasonable conditions
prescribed by law, the State adopts and
implements a policy of full public disclosure of
131
 all its transactions involving public interest."
(Emphasis supplied)
These twin provisions of the Constitution seek to promote
transparency in policy-making and in the operations of the
government, as well as provide the people sufficient
information to exercise effectively other constitutional
rights. These twin provisions are essential to the exercise
of freedom of expression. If the government does not
disclose its official acts, transactions and decisions to
citizens, whatever citizens say, even if expressed without
any restraint, will be speculative and amount to nothing.
These twin provisions are also essential to hold public
officials "at all times x x x accountable to the people,"29 for
unless citizens have the proper information, they cannot
hold public officials accountable for anything. Armed with
the right information, citizens can participate in public
discussions leading to the formulation of government
policies and their effective implementation. An informed
citizenry is essential to the existence and proper
functioning of any democracy. As explained by the Court
in Valmonte v. Belmonte, Jr.30 –
"An essential element of these freedoms is to
keep open a continuing dialogue or process of
communication between the government and the
people. It is in the interest of the State that the
channels for free political discussion be
maintained to the end that the government may
perceive and be responsive to the people's will.
Yet, this open dialogue can be effective only to
the extent that the citizenry is informed and thus
able to formulate its will intelligently. Only when
the participants in the discussion are aware of the
issues and have access to information relating
thereto can such bear fruit."
PEA asserts, citing Chavez v. PCGG,31 that in cases of
on-going negotiations the right to information is limited to
"definite propositions of the government." PEA maintains
the right does not include access to "intra-agency or inter-
agency recommendations or communications during the
stage when common assertions are still in the process of
being formulated or are in the 'exploratory stage'."
Also, AMARI contends that petitioner cannot invoke the
right at the pre-decisional stage or before the closing of
the transaction. To support its contention, AMARI cites
the following discussion in the 1986 Constitutional
Commission:
"Mr. Suarez. And when we say 'transactions'
which should be distinguished from contracts,
agreements, or treaties or whatever, does the
Gentleman refer to the steps leading to the
consummation of the contract, or does he refer to
the contract itself?
Mr. Ople: The 'transactions' used here, I
suppose is generic and therefore, it can cover
both steps leading to a contract and already a
consummated contract, Mr. Presiding Officer.
Mr. Suarez: This contemplates inclusion of
negotiations leading to the consummation of
the transaction.
Mr. Ople: Yes, subject only to reasonable
safeguards on the national interest.
Mr. Suarez: Thank you."32 (Emphasis supplied)
AMARI argues there must first be a consummated
contract before petitioner can invoke the right. Requiring
government officials to reveal their deliberations at the
pre-decisional stage will degrade the quality of decision-
making in government agencies. Government officials will
hesitate to express their real sentiments during
deliberations if there is immediate public dissemination of
their discussions, putting them under all kinds of pressure
before they decide.
We must first distinguish between information the law on
public bidding requires PEA to disclose publicly, and
information the constitutional right to information requires
PEA to release to the public. Before the consummation of
the contract, PEA must, on its own and without demand
from anyone, disclose to the public matters relating to the
disposition of its property. These include the size,
location, technical description and nature of the property
being disposed of, the terms and conditions of the
disposition, the parties qualified to bid, the minimum price
and similar information. PEA must prepare all these data
and disclose them to the public at the start of the
disposition process, long before the consummation of the
contract, because the Government Auditing Code
requires public bidding. If PEA fails to make this
disclosure, any citizen can demand from PEA this
information at any time during the bidding process.
Information, however, on on-going evaluation or
review of bids or proposals being undertaken by the
bidding or review committee is not immediately accessible
under the right to information. While the evaluation or
review is still on-going, there are no "official acts,
transactions, or decisions" on the bids or proposals.
However, once the committee makes its official
recommendation, there arises a "definite
proposition" on the part of the government. From this
moment, the public's right to information attaches, and
any citizen can access all the non-proprietary information
leading to such definite proposition. In Chavez v.
PCGG,33 the Court ruled as follows:
"Considering the intent of the framers of the
Constitution, we believe that it is incumbent upon
the PCGG and its officers, as well as other
government representatives, to disclose
sufficient public information on any proposed
settlement they have decided to take up with the
ostensible owners and holders of ill-gotten
wealth. Such information, though, must pertain
to definite propositions of the government, not
necessarily to intra-agency or inter-agency
recommendations or communications during the
stage when common assertions are still in the
process of being formulated or are in the
"exploratory" stage. There is need, of course, to
observe the same restrictions on disclosure of
information in general, as discussed earlier –
such as on matters involving national security,
diplomatic or foreign relations, intelligence and
other classified information." (Emphasis supplied)
Contrary to AMARI's contention, the commissioners of the
1986 Constitutional Commission understood that the right
to information "contemplates inclusion of negotiations
leading to the consummation of the
transaction."Certainly, a consummated contract is not a
requirement for the exercise of the right to information.
Otherwise, the people can never exercise the right if no
132
contract is consummated, and if one is consummated, it
may be too late for the public to expose its
defects.1âwphi1.nêt
Requiring a consummated contract will keep the public in
the dark until the contract, which may be grossly
disadvantageous to the government or even illegal,
becomes a fait accompli. This negates the State policy of
full transparency on matters of public concern, a situation
which the framers of the Constitution could not have
intended. Such a requirement will prevent the citizenry
from participating in the public discussion of
any proposed contract, effectively truncating a basic
right enshrined in the Bill of Rights. We can allow neither
an emasculation of a constitutional right, nor a retreat by
the State of its avowed "policy of full disclosure of all its
transactions involving public interest."
The right covers three categories of information which are
"matters of public concern," namely: (1) official records;
(2) documents and papers pertaining to official acts,
transactions and decisions; and (3) government research
data used in formulating policies. The first category refers
to any document that is part of the public records in the
custody of government agencies or officials. The second
category refers to documents and papers recording,
evidencing, establishing, confirming, supporting, justifying
or explaining official acts, transactions or decisions of
government agencies or officials. The third category
refers to research data, whether raw, collated or
processed, owned by the government and used in
formulating government policies.
The information that petitioner may access on the
renegotiation of the JVA includes evaluation reports,
recommendations, legal and expert opinions, minutes of
meetings, terms of reference and other documents
attached to such reports or minutes, all relating to the
JVA. However, the right to information does not compel
PEA to prepare lists, abstracts, summaries and the like
relating to the renegotiation of the JVA.34 The right only
affords access to records, documents and papers, which
means the opportunity to inspect and copy them. One
who exercises the right must copy the records,
documents and papers at his expense. The exercise of
the right is also subject to reasonable regulations to
protect the integrity of the public records and to minimize
disruption to government operations, like rules specifying
when and how to conduct the inspection and copying.35
The right to information, however, does not extend to
matters recognized as privileged information under the
separation of powers.36 The right does not also apply to
information on military and diplomatic secrets, information
affecting national security, and information on
investigations of crimes by law enforcement agencies
before the prosecution of the accused, which courts have
long recognized as confidential.37 The right may also be
subject to other limitations that Congress may impose by
law.
There is no claim by PEA that the information demanded
by petitioner is privileged information rooted in the
separation of powers. The information does not cover
Presidential conversations, correspondences, or
discussions during closed-door Cabinet meetings which,
like internal deliberations of the Supreme Court and other
collegiate courts, or executive sessions of either house of
Congress,38 are recognized as confidential. This kind of
information cannot be pried open by a co-equal branch of
government. A frank exchange of exploratory ideas and
assessments, free from the glare of publicity and pressure
by interested parties, is essential to protect the
independence of decision-making of those tasked to
exercise Presidential, Legislative and Judicial
power.39 This is not the situation in the instant case.
We rule, therefore, that the constitutional right to
information includes official information on on-going
negotiationsbefore a final contract. The information,
however, must constitute definite propositions by the
government and should not cover recognized exceptions
like privileged information, military and diplomatic secrets
and similar matters affecting national security and public
order.40 Congress has also prescribed other limitations on
the right to information in several legislations.41
Sixth issue: whether stipulations in the Amended JVA
for the transfer to AMARI of lands, reclaimed or to be
reclaimed, violate the Constitution.
The Regalian Doctrine
The ownership of lands reclaimed from foreshore and
submerged areas is rooted in the Regalian doctrine which
holds that the State owns all lands and waters of the
public domain. Upon the Spanish conquest of the
Philippines, ownership of all "lands, territories and
possessions" in the Philippines passed to the Spanish
Crown.42 The King, as the sovereign ruler and
representative of the people, acquired and owned all
lands and territories in the Philippines except those he
disposed of by grant or sale to private individuals.
The 1935, 1973 and 1987 Constitutions adopted the
Regalian doctrine substituting, however, the State, in lieu
of the King, as the owner of all lands and waters of the
public domain. The Regalian doctrine is the foundation of
the time-honored principle of land ownership that "all
lands that were not acquired from the Government, either
by purchase or by grant, belong to the public
domain."43 Article 339 of the Civil Code of 1889, which is
now Article 420 of the Civil Code of 1950, incorporated
the Regalian doctrine.
Ownership and Disposition of Reclaimed Lands
The Spanish Law of Waters of 1866 was the first statutory
law governing the ownership and disposition of reclaimed
lands in the Philippines. On May 18, 1907, the Philippine
Commission enacted Act No. 1654 which provided for
the lease, but not the sale, of reclaimed lands of the
government to corporations and individuals. Later, on
November 29, 1919, the Philippine Legislature approved
Act No. 2874, the Public Land Act, which authorized the
lease, but not the sale, of reclaimed lands of the
government to corporations and individuals. On
November 7, 1936, the National Assembly passed
Commonwealth Act No. 141, also known as the Public
Land Act, which authorized the lease, but not the sale,
of reclaimed lands of the government to corporations
and individuals. CA No. 141 continues to this day as the
general law governing the classification and disposition of
lands of the public domain.
The Spanish Law of Waters of 1866 and the Civil Code
of 1889
Under the Spanish Law of Waters of 1866, the shores,
bays, coves, inlets and all waters within the maritime zone
of the Spanish territory belonged to the public domain for
133
public use.44 The Spanish Law of Waters of 1866 allowed
the reclamation of the sea under Article 5, which provided
as follows:
"Article 5. Lands reclaimed from the sea in
consequence of works constructed by the State,
or by the provinces, pueblos or private persons,
with proper permission, shall become the
property of the party constructing such works,
unless otherwise provided by the terms of the
grant of authority."
Under the Spanish Law of Waters, land reclaimed from
the sea belonged to the party undertaking the
reclamation, provided the government issued the
necessary permit and did not reserve ownership of the
reclaimed land to the State.
Article 339 of the Civil Code of 1889 defined property of
public dominion as follows:
"Art. 339. Property of public dominion is –
1. That devoted to public use, such as roads,
canals, rivers, torrents, ports and bridges
constructed by the State, riverbanks, shores,
roadsteads, and that of a similar character;
2. That belonging exclusively to the State which,
without being of general public use, is employed
in some public service, or in the development of
the national wealth, such as walls, fortresses, and
other works for the defense of the territory, and
mines, until granted to private individuals."
Property devoted to public use referred to property open
for use by the public. In contrast, property devoted to
public service referred to property used for some specific
public service and open only to those authorized to use
the property.
Property of public dominion referred not only to property
devoted to public use, but also to property not so used but
employed to develop the national wealth. This class of
property constituted property of public dominion although
employed for some economic or commercial activity to
increase the national wealth.
Article 341 of the Civil Code of 1889 governed the re-
classification of property of public dominion into private
property, to wit:
"Art. 341. Property of public dominion, when no
longer devoted to public use or to the defense of
the territory, shall become a part of the private
property of the State."
This provision, however, was not self-executing. The
legislature, or the executive department pursuant to law,
must declare the property no longer needed for public use
or territorial defense before the government could lease
or alienate the property to private parties.45
Act No. 1654 of the Philippine Commission
On May 8, 1907, the Philippine Commission enacted Act
No. 1654 which regulated the lease of reclaimed and
foreshore lands. The salient provisions of this law were as
follows:
"Section 1. The control and disposition of the
foreshore as defined in existing law, and the title
to all Government or public lands made or
reclaimed by the Government by dredging or
filling or otherwise throughout the Philippine
Islands, shall be retained by the
Government without prejudice to vested rights
and without prejudice to rights conceded to the
City of Manila in the Luneta Extension.
Section 2. (a) The Secretary of the Interior shall
cause all Government or public lands made or
reclaimed by the Government by dredging or
filling or otherwise to be divided into lots or
blocks, with the necessary streets and alleyways
located thereon, and shall cause plats and plans
of such surveys to be prepared and filed with the
Bureau of Lands.
(b) Upon completion of such plats and plans
the Governor-General shall give notice to the
public that such parts of the lands so made or
reclaimed as are not needed for public
purposes will be leased for commercial and
business purposes, x x x.
xxx
(e) The leases above provided for shall be
disposed of to the highest and best
bidder therefore, subject to such regulations and
safeguards as the Governor-General may by
executive order prescribe." (Emphasis supplied)
Act No. 1654 mandated that the government should
retain title to all lands reclaimed by the government.
The Act also vested in the government control and
disposition of foreshore lands. Private parties could lease
lands reclaimed by the government only if these lands
were no longer needed for public purpose. Act No. 1654
mandated public bidding in the lease of government
reclaimed lands. Act No. 1654 made government
reclaimed lands sui generis in that unlike other public
lands which the government could sell to private parties,
these reclaimed lands were available only for lease to
private parties.
Act No. 1654, however, did not repeal Section 5 of the
Spanish Law of Waters of 1866. Act No. 1654 did not
prohibit private parties from reclaiming parts of the sea
under Section 5 of the Spanish Law of Waters. Lands
reclaimed from the sea by private parties with government
permission remained private lands.
Act No. 2874 of the Philippine Legislature
On November 29, 1919, the Philippine Legislature
enacted Act No. 2874, the Public Land Act.46 The salient
provisions of Act No. 2874, on reclaimed lands, were as
follows:
"Sec. 6. The Governor-General, upon the
recommendation of the Secretary of
Agriculture and Natural Resources, shall from
time to time classify the lands of the public
domain into –
(a) Alienable or disposable,
(b) Timber, and
134
 (c) Mineral lands, x x x.
Sec. 7. For the purposes of the government and
disposition of alienable or disposable public
lands, the Governor-General, upon
recommendation by the Secretary of
Agriculture and Natural Resources, shall from
time to time declare what lands are open to
disposition or concession under this Act."
Sec. 8. Only those lands shall be declared
open to disposition or concession which have
been officially delimited or classified x x x.
xxx
Sec. 55. Any tract of land of the public domain
which, being neither timber nor mineral land, shall
be classified as suitable for residential
purposes or for commercial, industrial, or
other productive purposes other than
agricultural purposes, and shall be open to
disposition or concession, shall be disposed of
under the provisions of this chapter, and not
otherwise.
Sec. 56. The lands disposable under this title
shall be classified as follows:
(a) Lands reclaimed by the
Government by dredging, filling, or
other means;
(b) Foreshore;
(c) Marshy lands or lands covered with
water bordering upon the shores or
banks of navigable lakes or rivers;
(d) Lands not included in any of the
foregoing classes.
x x x.
Sec. 58. The lands comprised in classes (a),
(b), and (c) of section fifty-six shall be
disposed of to private parties by lease only
and not otherwise, as soon as the Governor-
General, upon recommendation by the
Secretary of Agriculture and Natural
Resources, shall declare that the same are not
necessary for the public service and are open
to disposition under this chapter. The lands
included in class (d) may be disposed of by
sale or lease under the provisions of this Act."
(Emphasis supplied)
Section 6 of Act No. 2874 authorized the Governor-
General to "classify lands of the public domain into x x x
alienable or disposable"47 lands. Section 7 of the Act
empowered the Governor-General to "declare what lands
are open to disposition or concession." Section 8 of the
Act limited alienable or disposable lands only to those
lands which have been "officially delimited and classified."
Section 56 of Act No. 2874 stated that lands "disposable
under this title48 shall be classified" as government
reclaimed, foreshore and marshy lands, as well as other
lands. All these lands, however, must be suitable for
residential, commercial, industrial or other
productive non-agricultural purposes. These provisions
vested upon the Governor-General the power to classify
inalienable lands of the public domain into disposable
lands of the public domain. These provisions also
empowered the Governor-General to classify further such
disposable lands of the public domain into government
reclaimed, foreshore or marshy lands of the public
domain, as well as other non-agricultural lands.
Section 58 of Act No. 2874 categorically mandated that
disposable lands of the public domain classified as
government reclaimed, foreshore and marshy
lands "shall be disposed of to private parties by lease
only and not otherwise." The Governor-General, before
allowing the lease of these lands to private parties, must
formally declare that the lands were "not necessary for the
public service." Act No. 2874 reiterated the State policy to
lease and not to sell government reclaimed, foreshore
and marshy lands of the public domain, a policy first
enunciated in 1907 in Act No. 1654. Government
reclaimed, foreshore and marshy lands remained sui
generis, as the only alienable or disposable lands of the
public domain that the government could not sell to
private parties.
The rationale behind this State policy is obvious.
Government reclaimed, foreshore and marshy public
lands for non-agricultural purposes retain their inherent
potential as areas for public service. This is the reason the
government prohibited the sale, and only allowed the
lease, of these lands to private parties. The State always
reserved these lands for some future public service.
Act No. 2874 did not authorize the reclassification of
government reclaimed, foreshore and marshy lands into
other non-agricultural lands under Section 56 (d). Lands
falling under Section 56 (d) were the only lands for non-
agricultural purposes the government could sell to private
parties. Thus, under Act No. 2874, the government could
not sell government reclaimed, foreshore and marshy
lands to private parties, unless the legislature passed a
law allowing their sale.49
Act No. 2874 did not prohibit private parties from
reclaiming parts of the sea pursuant to Section 5 of the
Spanish Law of Waters of 1866. Lands reclaimed from the
sea by private parties with government permission
remained private lands.
Dispositions under the 1935 Constitution
On May 14, 1935, the 1935 Constitution took effect upon
its ratification by the Filipino people. The 1935
Constitution, in adopting the Regalian doctrine, declared
in Section 1, Article XIII, that –
"Section 1. All agricultural, timber, and mineral
lands of the public domain, waters, minerals,
coal, petroleum, and other mineral oils, all forces
of potential energy and other natural resources of
the Philippines belong to the State, and their
disposition, exploitation, development, or
utilization shall be limited to citizens of the
Philippines or to corporations or associations at
least sixty per centum of the capital of which is
owned by such citizens, subject to any existing
right, grant, lease, or concession at the time of the
inauguration of the Government established
under this Constitution. Natural resources, with
the exception of public agricultural land, shall
135
 not be alienated, and no license, concession, or
lease for the exploitation, development, or
utilization of any of the natural resources shall be
granted for a period exceeding twenty-five years,
renewable for another twenty-five years, except
as to water rights for irrigation, water supply,
fisheries, or industrial uses other than the
development of water power, in which cases
beneficial use may be the measure and limit of
the grant." (Emphasis supplied)
The 1935 Constitution barred the alienation of all natural
resources except public agricultural lands, which were the
only natural resources the State could alienate. Thus,
foreshore lands, considered part of the State's natural
resources, became inalienable by constitutional fiat,
available only for lease for 25 years, renewable for
another 25 years. The government could alienate
foreshore lands only after these lands were reclaimed and
classified as alienable agricultural lands of the public
domain. Government reclaimed and marshy lands of the
public domain, being neither timber nor mineral lands, fell
under the classification of public agricultural
lands.50 However, government reclaimed and marshy
lands, although subject to classification as disposable
public agricultural lands, could only be leased and not
sold to private parties because of Act No. 2874.
The prohibition on private parties from acquiring
ownership of government reclaimed and marshy lands of
the public domain was only a statutory prohibition and the
legislature could therefore remove such prohibition. The
1935 Constitution did not prohibit individuals and
corporations from acquiring government reclaimed and
marshy lands of the public domain that were classified as
agricultural lands under existing public land laws. Section
2, Article XIII of the 1935 Constitution provided as follows:
"Section 2. No private corporation or
association may acquire, lease, or hold public
agricultural lands in excess of one thousand
and twenty four hectares, nor may any
individual acquire such lands by purchase in
excess of one hundred and forty hectares, or
by lease in excess of one thousand and
twenty-four hectares, or by homestead in
excess of twenty-four hectares. Lands adapted to
grazing, not exceeding two thousand hectares,
may be leased to an individual, private
corporation, or association." (Emphasis supplied)
Still, after the effectivity of the 1935 Constitution, the
legislature did not repeal Section 58 of Act No. 2874 to
open for sale to private parties government reclaimed and
marshy lands of the public domain. On the contrary, the
legislature continued the long established State policy of
retaining for the government title and ownership of
government reclaimed and marshy lands of the public
domain.
Commonwealth Act No. 141 of the Philippine National
Assembly
On November 7, 1936, the National Assembly approved
Commonwealth Act No. 141, also known as the Public
Land Act, which compiled the then existing laws on lands
of the public domain. CA No. 141, as amended, remains
to this day the existing general law governing the
classification and disposition of lands of the public domain
other than timber and mineral lands.51
Section 6 of CA No. 141 empowers the President to
classify lands of the public domain into "alienable or
disposable"52 lands of the public domain, which prior to
such classification are inalienable and outside the
commerce of man. Section 7 of CA No. 141 authorizes
the President to "declare what lands are open to
disposition or concession." Section 8 of CA No. 141 states
that the government can declare open for disposition or
concession only lands that are "officially delimited and
classified." Sections 6, 7 and 8 of CA No. 141 read as
follows:
"Sec. 6. The President, upon the
recommendation of the Secretary of
Agriculture and Commerce, shall from time to
time classify the lands of the public domain
into –
(a) Alienable or disposable,
(b) Timber, and
(c) Mineral lands,
and may at any time and in like manner transfer
such lands from one class to another,53 for the
purpose of their administration and disposition.
Sec. 7. For the purposes of the administration
and disposition of alienable or disposable public
lands, the President, upon recommendation
by the Secretary of Agriculture and
Commerce, shall from time to time declare
what lands are open to disposition or
concession under this Act.
Sec. 8. Only those lands shall be declared
open to disposition or concession which have
been officially delimited and classified and,
when practicable, surveyed, and which have
not been reserved for public or quasi-public
uses, nor appropriated by the Government, nor
in any manner become private property, nor
those on which a private right authorized and
recognized by this Act or any other valid law may
be claimed, or which, having been reserved or
appropriated, have ceased to be so. x x x."
Thus, before the government could alienate or dispose of
lands of the public domain, the President must first
officially classify these lands as alienable or disposable,
and then declare them open to disposition or concession.
There must be no law reserving these lands for public or
quasi-public uses.
The salient provisions of CA No. 141, on government
reclaimed, foreshore and marshy lands of the public
domain, are as follows:
"Sec. 58. Any tract of land of the public
domain which, being neither timber nor
mineral land, is intended to be used for
residential purposes or for commercial,
industrial, or other productive purposes other
than agricultural, and is open to disposition or
concession, shall be disposed of under the
provisions of this chapter and not otherwise.
Sec. 59. The lands disposable under this title
shall be classified as follows:
136
 (a) Lands reclaimed by the
Government by dredging, filling, or
other means;
(b) Foreshore;
(c) Marshy lands or lands covered with
water bordering upon the shores or
banks of navigable lakes or rivers;
(d) Lands not included in any of the
foregoing classes.
Sec. 60. Any tract of land comprised under this
title may be leased or sold, as the case may be,
to any person, corporation, or association
authorized to purchase or lease public lands for
agricultural purposes. x x x.
Sec. 61. The lands comprised in classes (a),
(b), and (c) of section fifty-nine shall be
disposed of to private parties by lease only
and not otherwise, as soon as the President,
upon recommendation by the Secretary of
Agriculture, shall declare that the same are not
necessary for the public service and are open
to disposition under this chapter. The lands
included in class (d) may be disposed of by
sale or lease under the provisions of this Act."
(Emphasis supplied)
Section 61 of CA No. 141 readopted, after the effectivity
of the 1935 Constitution, Section 58 of Act No. 2874
prohibiting the sale of government reclaimed, foreshore
and marshy disposable lands of the public domain. All
these lands are intended for residential, commercial,
industrial or other non-agricultural purposes. As before,
Section 61 allowed only the lease of such lands to private
parties. The government could sell to private parties only
lands falling under Section 59 (d) of CA No. 141, or those
lands for non-agricultural purposes not classified as
government reclaimed, foreshore and marshy disposable
lands of the public domain. Foreshore lands, however,
became inalienable under the 1935 Constitution which
only allowed the lease of these lands to qualified private
parties.
Section 58 of CA No. 141 expressly states that disposable
lands of the public domain intended for residential,
commercial, industrial or other productive purposes other
than agricultural "shall be disposed of under the
provisions of this chapter and not otherwise." Under
Section 10 of CA No. 141, the term "disposition" includes
lease of the land. Any disposition of government
reclaimed, foreshore and marshy disposable lands for
non-agricultural purposes must comply with Chapter IX,
Title III of CA No. 141,54 unless a subsequent law
amended or repealed these provisions.
In his concurring opinion in the landmark case
of Republic Real Estate Corporation v. Court of
Appeals,55Justice Reynato S. Puno summarized
succinctly the law on this matter, as follows:
"Foreshore lands are lands of public dominion
intended for public use. So too are lands
reclaimed by the government by dredging, filling,
or other means. Act 1654 mandated that the
control and disposition of the foreshore and lands
under water remained in the national
government. Said law allowed only the 'leasing' of
reclaimed land. The Public Land Acts of 1919 and
1936 also declared that the foreshore and lands
reclaimed by the government were to be
"disposed of to private parties by lease only and
not otherwise." Before leasing, however, the
Governor-General, upon recommendation of the
Secretary of Agriculture and Natural Resources,
had first to determine that the land reclaimed was
not necessary for the public service. This
requisite must have been met before the land
could be disposed of. But even then, the
foreshore and lands under water were not to
be alienated and sold to private parties. The
disposition of the reclaimed land was only by
lease. The land remained property of the
State." (Emphasis supplied)
As observed by Justice Puno in his concurring opinion,
"Commonwealth Act No. 141 has remained in effect at
present."
The State policy prohibiting the sale to private parties of
government reclaimed, foreshore and marshy alienable
lands of the public domain, first implemented in 1907 was
thus reaffirmed in CA No. 141 after the 1935 Constitution
took effect. The prohibition on the sale of foreshore lands,
however, became a constitutional edict under the 1935
Constitution. Foreshore lands became inalienable as
natural resources of the State, unless reclaimed by the
government and classified as agricultural lands of the
public domain, in which case they would fall under the
classification of government reclaimed lands.
After the effectivity of the 1935 Constitution, government
reclaimed and marshy disposable lands of the public
domain continued to be only leased and not sold to private
parties.56 These lands remained sui generis, as the only
alienable or disposable lands of the public domain the
government could not sell to private parties.
Since then and until now, the only way the government
can sell to private parties government reclaimed and
marshy disposable lands of the public domain is for the
legislature to pass a law authorizing such sale. CA No.
141 does not authorize the President to reclassify
government reclaimed and marshy lands into other non-
agricultural lands under Section 59 (d). Lands classified
under Section 59 (d) are the only alienable or disposable
lands for non-agricultural purposes that the government
could sell to private parties.
Moreover, Section 60 of CA No. 141 expressly requires
congressional authority before lands under Section 59
that the government previously transferred to government
units or entities could be sold to private parties. Section
60 of CA No. 141 declares that –
"Sec. 60. x x x The area so leased or sold shall
be such as shall, in the judgment of the Secretary
of Agriculture and Natural Resources, be
reasonably necessary for the purposes for which
such sale or lease is requested, and shall not
exceed one hundred and forty-four hectares:
Provided, however, That this limitation shall not
apply to grants, donations, or transfers made to a
province, municipality or branch or subdivision of
the Government for the purposes deemed by said
entities conducive to the public interest; but the
land so granted, donated, or transferred to a
province, municipality or branch or
137
 subdivision of the Government shall not be
alienated, encumbered, or otherwise
disposed of in a manner affecting its title,
except when authorized by Congress: x x x."
(Emphasis supplied)
The congressional authority required in Section 60 of CA
No. 141 mirrors the legislative authority required in
Section 56 of Act No. 2874.
One reason for the congressional authority is that Section
60 of CA No. 141 exempted government units and entities
from the maximum area of public lands that could be
acquired from the State. These government units and
entities should not just turn around and sell these lands to
private parties in violation of constitutional or statutory
limitations. Otherwise, the transfer of lands for non-
agricultural purposes to government units and entities
could be used to circumvent constitutional limitations on
ownership of alienable or disposable lands of the public
domain. In the same manner, such transfers could also
be used to evade the statutory prohibition in CA No. 141
on the sale of government reclaimed and marshy lands of
the public domain to private parties. Section 60 of CA No.
141 constitutes by operation of law a lien on these lands.57
In case of sale or lease of disposable lands of the public
domain falling under Section 59 of CA No. 141, Sections
63 and 67 require a public bidding. Sections 63 and 67 of
CA No. 141 provide as follows:
"Sec. 63. Whenever it is decided that lands
covered by this chapter are not needed for public
purposes, the Director of Lands shall ask the
Secretary of Agriculture and Commerce (now the
Secretary of Natural Resources) for authority to
dispose of the same. Upon receipt of such
authority, the Director of Lands shall give notice
by public advertisement in the same manner as
in the case of leases or sales of agricultural public
land, x x x.
Sec. 67. The lease or sale shall be made by
oral bidding; and adjudication shall be made
to the highest bidder. x x x." (Emphasis
supplied)
Thus, CA No. 141 mandates the Government to put to
public auction all leases or sales of alienable or
disposable lands of the public domain.58
Like Act No. 1654 and Act No. 2874 before it, CA No. 141
did not repeal Section 5 of the Spanish Law of Waters of
1866. Private parties could still reclaim portions of the sea
with government permission. However, the reclaimed
land could become private land only if classified as
alienable agricultural land of the public domain open
to disposition under CA No. 141. The 1935 Constitution
prohibited the alienation of all natural resources except
public agricultural lands.
The Civil Code of 1950
The Civil Code of 1950 readopted substantially the
definition of property of public dominion found in the Civil
Code of 1889. Articles 420 and 422 of the Civil Code of
1950 state that –
"Art. 420. The following things are property of
public dominion:
(1) Those intended for public use, such as roads,
canals, rivers, torrents, ports and bridges
constructed by the State, banks, shores,
roadsteads, and others of similar character;
(2) Those which belong to the State, without
being for public use, and are intended for some
public service or for the development of the
national wealth.
x x x.
Art. 422. Property of public dominion, when no
longer intended for public use or for public
service, shall form part of the patrimonial property
of the State."
Again, the government must formally declare that the
property of public dominion is no longer needed for public
use or public service, before the same could be classified
as patrimonial property of the State.59 In the case of
government reclaimed and marshy lands of the public
domain, the declaration of their being disposable, as well
as the manner of their disposition, is governed by the
applicable provisions of CA No. 141.
Like the Civil Code of 1889, the Civil Code of 1950
included as property of public dominion those properties
of the State which, without being for public use, are
intended for public service or the "development of the
national wealth." Thus, government reclaimed and
marshy lands of the State, even if not employed for public
use or public service, if developed to enhance the national
wealth, are classified as property of public dominion.
Dispositions under the 1973 Constitution
The 1973 Constitution, which took effect on January 17,
1973, likewise adopted the Regalian doctrine. Section 8,
Article XIV of the 1973 Constitution stated that –
"Sec. 8. All lands of the public domain, waters,
minerals, coal, petroleum and other mineral oils,
all forces of potential energy, fisheries, wildlife,
and other natural resources of the Philippines
belong to the State. With the exception of
agricultural, industrial or commercial,
residential, and resettlement lands of the
public domain, natural resources shall not be
alienated, and no license, concession, or lease
for the exploration, development, exploitation, or
utilization of any of the natural resources shall be
granted for a period exceeding twenty-five years,
renewable for not more than twenty-five years,
except as to water rights for irrigation, water
supply, fisheries, or industrial uses other than the
development of water power, in which cases,
beneficial use may be the measure and the limit
of the grant." (Emphasis supplied)
The 1973 Constitution prohibited the alienation of all
natural resources with the exception of "agricultural,
industrial or commercial, residential, and resettlement
lands of the public domain." In contrast, the 1935
Constitution barred the alienation of all natural resources
except "public agricultural lands." However, the term
"public agricultural lands" in the 1935 Constitution
encompassed industrial, commercial, residential and
resettlement lands of the public domain.60 If the land of
public domain were neither timber nor mineral land, it
138
would fall under the classification of agricultural land of
the public domain. Both the 1935 and 1973
Constitutions, therefore, prohibited the alienation of
all natural resources except agricultural lands of the
public domain.
The 1973 Constitution, however, limited the alienation of
lands of the public domain to individuals who were
citizens of the Philippines. Private corporations, even if
wholly owned by Philippine citizens, were no longer
allowed to acquire alienable lands of the public domain
unlike in the 1935 Constitution. Section 11, Article XIV of
the 1973 Constitution declared that –
"Sec. 11. The Batasang Pambansa, taking into
account conservation, ecological, and
development requirements of the natural
resources, shall determine by law the size of land
of the public domain which may be developed,
held or acquired by, or leased to, any qualified
individual, corporation, or association, and the
conditions therefor. No private corporation or
association may hold alienable lands of the
public domain except by lease not to exceed
one thousand hectares in area nor may any
citizen hold such lands by lease in excess of five
hundred hectares or acquire by purchase,
homestead or grant, in excess of twenty-four
hectares. No private corporation or association
may hold by lease, concession, license or permit,
timber or forest lands and other timber or forest
resources in excess of one hundred thousand
hectares. However, such area may be increased
by the Batasang Pambansa upon
recommendation of the National Economic and
Development Authority." (Emphasis supplied)
Thus, under the 1973 Constitution, private corporations
could hold alienable lands of the public domain only
through lease. Only individuals could now acquire
alienable lands of the public domain, and private
corporations became absolutely barred from
acquiring any kind of alienable land of the public
domain. The constitutional ban extended to all kinds of
alienable lands of the public domain, while the statutory
ban under CA No. 141 applied only to government
reclaimed, foreshore and marshy alienable lands of the
public domain.
PD No. 1084 Creating the Public Estates Authority
On February 4, 1977, then President Ferdinand Marcos
issued Presidential Decree No. 1084 creating PEA, a
wholly government owned and controlled corporation with
a special charter. Sections 4 and 8 of PD No. 1084, vests
PEA with the following purposes and powers:
"Sec. 4. Purpose. The Authority is hereby created
for the following purposes:
(a) To reclaim land, including foreshore and
submerged areas, by dredging, filling or other
means, or to acquire reclaimed land;
(b) To develop, improve, acquire, administer, deal
in, subdivide, dispose, lease and sell any and all
kinds of lands, buildings, estates and other
forms of real property, owned, managed,
controlled and/or operated by the government;
(c) To provide for, operate or administer such
service as may be necessary for the efficient,
economical and beneficial utilization of the above
properties.
Sec. 5. Powers and functions of the Authority.
The Authority shall, in carrying out the purposes
for which it is created, have the following powers
and functions:
(a)To prescribe its by-laws.
xxx
(i) To hold lands of the public domain in
excess of the area permitted to private
corporations by statute.
(j) To reclaim lands and to construct work
across, or otherwise, any stream, watercourse,
canal, ditch, flume x x x.
xxx
(o) To perform such acts and exercise such
functions as may be necessary for the attainment
of the purposes and objectives herein specified."
(Emphasis supplied)
PD No. 1084 authorizes PEA to reclaim both foreshore
and submerged areas of the public domain. Foreshore
areas are those covered and uncovered by the ebb and
flow of the tide.61 Submerged areas are those
permanently under water regardless of the ebb and flow
of the tide.62 Foreshore and submerged areas
indisputably belong to the public domain63 and are
inalienable unless reclaimed, classified as alienable lands
open to disposition, and further declared no longer
needed for public service.
The ban in the 1973 Constitution on private corporations
from acquiring alienable lands of the public domain did not
apply to PEA since it was then, and until today, a fully
owned government corporation. The constitutional ban
applied then, as it still applies now, only to "private
corporations and associations." PD No. 1084 expressly
empowers PEA "to hold lands of the public domain"
even "in excess of the area permitted to private
corporations by statute." Thus, PEA can hold title to
private lands, as well as title to lands of the public
domain.
In order for PEA to sell its reclaimed foreshore and
submerged alienable lands of the public domain, there
must be legislative authority empowering PEA to sell
these lands. This legislative authority is necessary in view
of Section 60 of CA No.141, which states –
"Sec. 60. x x x; but the land so granted, donated
or transferred to a province, municipality, or
branch or subdivision of the Government shall not
be alienated, encumbered or otherwise disposed
of in a manner affecting its title, except when
authorized by Congress; x x x." (Emphasis
supplied)
Without such legislative authority, PEA could not sell but
only lease its reclaimed foreshore and submerged
alienable lands of the public domain. Nevertheless, any
legislative authority granted to PEA to sell its reclaimed
139
alienable lands of the public domain would be subject to
the constitutional ban on private corporations from
acquiring alienable lands of the public domain. Hence,
such legislative authority could only benefit private
individuals.
Dispositions under the 1987 Constitution
The 1987 Constitution, like the 1935 and 1973
Constitutions before it, has adopted the Regalian
doctrine. The 1987 Constitution declares that all natural
resources are "owned by the State," and except for
alienable agricultural lands of the public domain, natural
resources cannot be alienated. Sections 2 and 3, Article
XII of the 1987 Constitution state that –
"Section 2. All lands of the public domain, waters,
minerals, coal, petroleum and other mineral oils,
all forces of potential energy, fisheries, forests or
timber, wildlife, flora and fauna, and other
natural resources are owned by the State. With
the exception of agricultural lands, all other
natural resources shall not be alienated. The
exploration, development, and utilization of
natural resources shall be under the full control
and supervision of the State. x x x.
Section 3. Lands of the public domain are
classified into agricultural, forest or timber,
mineral lands, and national parks. Agricultural
lands of the public domain may be further
classified by law according to the uses which they
may be devoted. Alienable lands of the public
domain shall be limited to agricultural lands.
Private corporations or associations may not
hold such alienable lands of the public
domain except by lease, for a period not
exceeding twenty-five years, renewable for
not more than twenty-five years, and not to
exceed one thousand hectares in area.
Citizens of the Philippines may lease not more
than five hundred hectares, or acquire not more
than twelve hectares thereof by purchase,
homestead, or grant.
Taking into account the requirements of
conservation, ecology, and development, and
subject to the requirements of agrarian reform,
the Congress shall determine, by law, the size of
lands of the public domain which may be
acquired, developed, held, or leased and the
conditions therefor." (Emphasis supplied)
The 1987 Constitution continues the State policy in the
1973 Constitution banning private corporations
from acquiring any kind of alienable land of the public
domain. Like the 1973 Constitution, the 1987 Constitution
allows private corporations to hold alienable lands of the
public domain only through lease. As in the 1935 and
1973 Constitutions, the general law governing the lease
to private corporations of reclaimed, foreshore and
marshy alienable lands of the public domain is still CA No.
141.
The Rationale behind the Constitutional Ban
The rationale behind the constitutional ban on
corporations from acquiring, except through lease,
alienable lands of the public domain is not well
understood. During the deliberations of the 1986
Constitutional Commission, the commissioners probed
the rationale behind this ban, thus:
"FR. BERNAS: Mr. Vice-President, my questions
have reference to page 3, line 5 which says:
`No private corporation or association may hold
alienable lands of the public domain except by
lease, not to exceed one thousand hectares in
area.'
If we recall, this provision did not exist under the
1935 Constitution, but this was introduced in the
1973 Constitution. In effect, it prohibits private
corporations from acquiring alienable public
lands. But it has not been very clear in
jurisprudence what the reason for this is. In
some of the cases decided in 1982 and 1983, it
was indicated that the purpose of this is to
prevent large landholdings. Is that the intent of
this provision?
MR. VILLEGAS: I think that is the spirit of the provision.
FR. BERNAS: In existing decisions involving the
Iglesia ni Cristo, there were instances where the
Iglesia ni Cristo was not allowed to acquire a
mere 313-square meter land where a chapel
stood because the Supreme Court said it would
be in violation of this." (Emphasis supplied)
In Ayog v. Cusi,64 the Court explained the rationale
behind this constitutional ban in this way:
"Indeed, one purpose of the constitutional
prohibition against purchases of public
agricultural lands by private corporations is to
equitably diffuse land ownership or to encourage
'owner-cultivatorship and the economic family-
size farm' and to prevent a recurrence of cases
like the instant case. Huge landholdings by
corporations or private persons had spawned
social unrest."
However, if the constitutional intent is to prevent huge
landholdings, the Constitution could have simply limited
the size of alienable lands of the public domain that
corporations could acquire. The Constitution could have
followed the limitations on individuals, who could acquire
not more than 24 hectares of alienable lands of the public
domain under the 1973 Constitution, and not more than
12 hectares under the 1987 Constitution.
If the constitutional intent is to encourage economic
family-size farms, placing the land in the name of a
corporation would be more effective in preventing the
break-up of farmlands. If the farmland is registered in the
name of a corporation, upon the death of the owner, his
heirs would inherit shares in the corporation instead of
subdivided parcels of the farmland. This would prevent
the continuing break-up of farmlands into smaller and
smaller plots from one generation to the next.
In actual practice, the constitutional ban strengthens the
constitutional limitation on individuals from acquiring more
than the allowed area of alienable lands of the public
domain. Without the constitutional ban, individuals who
already acquired the maximum area of alienable lands of
the public domain could easily set up corporations to
acquire more alienable public lands. An individual could
140
own as many corporations as his means would allow him.
An individual could even hide his ownership of a
corporation by putting his nominees as stockholders of
the corporation. The corporation is a convenient vehicle
to circumvent the constitutional limitation on acquisition by
individuals of alienable lands of the public domain.
The constitutional intent, under the 1973 and 1987
Constitutions, is to transfer ownership of only a limited
area of alienable land of the public domain to a qualified
individual. This constitutional intent is safeguarded by the
provision prohibiting corporations from acquiring
alienable lands of the public domain, since the vehicle to
circumvent the constitutional intent is removed. The
available alienable public lands are gradually decreasing
in the face of an ever-growing population. The most
effective way to insure faithful adherence to this
constitutional intent is to grant or sell alienable lands of
the public domain only to individuals. This, it would seem,
is the practical benefit arising from the constitutional ban.
The Amended Joint Venture Agreement
The subject matter of the Amended JVA, as stated in its
second Whereas clause, consists of three properties,
namely:
1. "[T]hree partially reclaimed and substantially
eroded islands along Emilio Aguinaldo Boulevard
in Paranaque and Las Pinas, Metro Manila, with
a combined titled area of 1,578,441 square
meters;"
2. "[A]nother area of 2,421,559 square meters
contiguous to the three islands;" and
3. "[A]t AMARI's option as approved by PEA, an
additional 350 hectares more or less to regularize
the configuration of the reclaimed area."65
PEA confirms that the Amended JVA involves "the
development of the Freedom Islands and further
reclamation of about 250 hectares x x x," plus an option
"granted to AMARI to subsequently reclaim another 350
hectares x x x."66
In short, the Amended JVA covers a reclamation area of
750 hectares. Only 157.84 hectares of the 750-hectare
reclamation project have been reclaimed, and the rest
of the 592.15 hectares are still submerged areas
forming part of Manila Bay.
Under the Amended JVA, AMARI will reimburse PEA the
sum of P1,894,129,200.00 for PEA's "actual cost" in
partially reclaiming the Freedom Islands. AMARI will also
complete, at its own expense, the reclamation of the
Freedom Islands. AMARI will further shoulder all the
reclamation costs of all the other areas, totaling 592.15
hectares, still to be reclaimed. AMARI and PEA will share,
in the proportion of 70 percent and 30 percent,
respectively, the total net usable area which is defined in
the Amended JVA as the total reclaimed area less 30
percent earmarked for common areas. Title to AMARI's
share in the net usable area, totaling 367.5 hectares, will
be issued in the name of AMARI. Section 5.2 (c) of the
Amended JVA provides that –
"x x x, PEA shall have the duty to execute without
delay the necessary deed of transfer or
conveyance of the title pertaining to AMARI's
Land share based on the Land Allocation
Plan. PEA, when requested in writing by
AMARI, shall then cause the issuance and
delivery of the proper certificates of title
covering AMARI's Land Share in the name of
AMARI, x x x; provided, that if more than seventy
percent (70%) of the titled area at any given time
pertains to AMARI, PEA shall deliver to AMARI
only seventy percent (70%) of the titles pertaining
to AMARI, until such time when a corresponding
proportionate area of additional land pertaining to
PEA has been titled." (Emphasis supplied)
Indisputably, under the Amended JVA AMARI will
acquire and own a maximum of 367.5 hectares of
reclaimed land which will be titled in its name.
To implement the Amended JVA, PEA delegated to the
unincorporated PEA-AMARI joint venture PEA's statutory
authority, rights and privileges to reclaim foreshore and
submerged areas in Manila Bay. Section 3.2.a of the
Amended JVA states that –
"PEA hereby contributes to the joint venture its
rights and privileges to perform Rawland
Reclamation and Horizontal Development as well
as own the Reclamation Area, thereby granting
the Joint Venture the full and exclusive right,
authority and privilege to undertake the Project in
accordance with the Master Development Plan."
The Amended JVA is the product of a renegotiation of the
original JVA dated April 25, 1995 and its supplemental
agreement dated August 9, 1995.
The Threshold Issue
The threshold issue is whether AMARI, a private
corporation, can acquire and own under the Amended
JVA 367.5 hectares of reclaimed foreshore and
submerged areas in Manila Bay in view of Sections 2 and
3, Article XII of the 1987 Constitution which state that:
"Section 2. All lands of the public domain, waters,
minerals, coal, petroleum, and other mineral oils,
all forces of potential energy, fisheries, forests or
timber, wildlife, flora and fauna, and other natural
resources are owned by the State. With the
exception of agricultural lands, all other
natural resources shall not be alienated. x x x.
xxx
Section 3. x x x Alienable lands of the public
domain shall be limited to agricultural
lands. Private corporations or associations
may not hold such alienable lands of the
public domain except by lease, x x
x."(Emphasis supplied)
Classification of Reclaimed Foreshore and
Submerged Areas
PEA readily concedes that lands reclaimed from
foreshore or submerged areas of Manila Bay are
alienable or disposable lands of the public domain. In its
Memorandum,67 PEA admits that –
"Under the Public Land Act (CA 141, as
amended), reclaimed lands are classified as
141
 alienable and disposable lands of the public
domain:
'Sec. 59. The lands disposable under this
title shall be classified as follows:
(a) Lands reclaimed by the government
by dredging, filling, or other means;
x x x.'" (Emphasis supplied)
Likewise, the Legal Task Force68 constituted under
Presidential Administrative Order No. 365 admitted in its
Report and Recommendation to then President Fidel V.
Ramos, "[R]eclaimed lands are classified as alienable
and disposable lands of the public domain."69 The
Legal Task Force concluded that –
"D. Conclusion
Reclaimed lands are lands of the public domain.
However, by statutory authority, the rights of
ownership and disposition over reclaimed lands
have been transferred to PEA, by virtue of which
PEA, as owner, may validly convey the same to
any qualified person without violating the
Constitution or any statute.
The constitutional provision prohibiting private
corporations from holding public land, except by
lease (Sec. 3, Art. XVII,70 1987 Constitution),
does not apply to reclaimed lands whose
ownership has passed on to PEA by statutory
grant."
Under Section 2, Article XII of the 1987 Constitution, the
foreshore and submerged areas of Manila Bay are part of
the "lands of the public domain, waters x x x and other
natural resources" and consequently "owned by the
State." As such, foreshore and submerged areas "shall
not be alienated," unless they are classified as
"agricultural lands" of the public domain. The mere
reclamation of these areas by PEA does not convert these
inalienable natural resources of the State into alienable or
disposable lands of the public domain. There must be a
law or presidential proclamation officially classifying these
reclaimed lands as alienable or disposable and open to
disposition or concession. Moreover, these reclaimed
lands cannot be classified as alienable or disposable if the
law has reserved them for some public or quasi-public
use.71
Section 8 of CA No. 141 provides that "only those lands
shall be declared open to disposition or concession which
have been officially delimited and classified."72 The
President has the authority to classify inalienable lands of
the public domain into alienable or disposable lands of the
public domain, pursuant to Section 6 of CA No. 141. In
Laurel vs. Garcia,73 the Executive Department attempted
to sell the Roppongi property in Tokyo, Japan, which was
acquired by the Philippine Government for use as the
Chancery of the Philippine Embassy. Although the
Chancery had transferred to another location thirteen
years earlier, the Court still ruled that, under Article
42274 of the Civil Code, a property of public dominion
retains such character until formally declared otherwise.
The Court ruled that –
"The fact that the Roppongi site has not been
used for a long time for actual Embassy service
does not automatically convert it to patrimonial
property. Any such conversion happens only if
the property is withdrawn from public use (Cebu
Oxygen and Acetylene Co. v. Bercilles, 66 SCRA
481 [1975]. A property continues to be part of
the public domain, not available for private
appropriation or ownership 'until there is a
formal declaration on the part of the
government to withdraw it from being
such' (Ignacio v. Director of Lands, 108 Phil. 335
[1960]." (Emphasis supplied)
PD No. 1085, issued on February 4, 1977, authorized the
issuance of special land patents for lands reclaimed by
PEA from the foreshore or submerged areas of Manila
Bay. On January 19, 1988 then President Corazon C.
Aquino issued Special Patent No. 3517 in the name of
PEA for the 157.84 hectares comprising the partially
reclaimed Freedom Islands. Subsequently, on April 9,
1999 the Register of Deeds of the Municipality of
Paranaque issued TCT Nos. 7309, 7311 and 7312 in the
name of PEA pursuant to Section 103 of PD No. 1529
authorizing the issuance of certificates of title
corresponding to land patents. To this day, these
certificates of title are still in the name of PEA.
PD No. 1085, coupled with President Aquino's actual
issuance of a special patent covering the Freedom
Islands, is equivalent to an official proclamation
classifying the Freedom Islands as alienable or
disposable lands of the public domain. PD No. 1085 and
President Aquino's issuance of a land patent also
constitute a declaration that the Freedom Islands are no
longer needed for public service. The Freedom Islands
are thus alienable or disposable lands of the public
domain, open to disposition or concession to
qualified parties.
At the time then President Aquino issued Special Patent
No. 3517, PEA had already reclaimed the Freedom
Islands although subsequently there were partial erosions
on some areas. The government had also completed the
necessary surveys on these islands. Thus, the Freedom
Islands were no longer part of Manila Bay but part of the
land mass. Section 3, Article XII of the 1987 Constitution
classifies lands of the public domain into "agricultural,
forest or timber, mineral lands, and national parks." Being
neither timber, mineral, nor national park lands, the
reclaimed Freedom Islands necessarily fall under the
classification of agricultural lands of the public domain.
Under the 1987 Constitution, agricultural lands of the
public domain are the only natural resources that the
State may alienate to qualified private parties. All other
natural resources, such as the seas or bays, are "waters
x x x owned by the State" forming part of the public
domain, and are inalienable pursuant to Section 2, Article
XII of the 1987 Constitution.
AMARI claims that the Freedom Islands are private lands
because CDCP, then a private corporation, reclaimed the
islands under a contract dated November 20, 1973 with
the Commissioner of Public Highways. AMARI, citing
Article 5 of the Spanish Law of Waters of 1866, argues
that "if the ownership of reclaimed lands may be given to
the party constructing the works, then it cannot be said
that reclaimed lands are lands of the public domain which
the State may not alienate."75 Article 5 of the Spanish Law
of Waters reads as follows:
"Article 5. Lands reclaimed from the sea in
consequence of works constructed by the State,
142
 or by the provinces, pueblos or private
persons, with proper permission, shall become
the property of the party constructing such
works, unless otherwise provided by the
terms of the grant of authority." (Emphasis
supplied)
Under Article 5 of the Spanish Law of Waters of 1866,
private parties could reclaim from the sea only with
"proper permission" from the State. Private parties could
own the reclaimed land only if not "otherwise provided by
the terms of the grant of authority." This clearly meant that
no one could reclaim from the sea without permission
from the State because the sea is property of public
dominion. It also meant that the State could grant or
withhold ownership of the reclaimed land because any
reclaimed land, like the sea from which it emerged,
belonged to the State. Thus, a private person reclaiming
from the sea without permission from the State could not
acquire ownership of the reclaimed land which would
remain property of public dominion like the sea it
replaced.76 Article 5 of the Spanish Law of Waters of 1866
adopted the time-honored principle of land ownership that
"all lands that were not acquired from the government,
either by purchase or by grant, belong to the public
domain."77
Article 5 of the Spanish Law of Waters must be read
together with laws subsequently enacted on the
disposition of public lands. In particular, CA No. 141
requires that lands of the public domain must first be
classified as alienable or disposable before the
government can alienate them. These lands must not be
reserved for public or quasi-public purposes.78 Moreover,
the contract between CDCP and the government was
executed after the effectivity of the 1973 Constitution
which barred private corporations from acquiring any kind
of alienable land of the public domain. This contract could
not have converted the Freedom Islands into private lands
of a private corporation.
Presidential Decree No. 3-A, issued on January 11, 1973,
revoked all laws authorizing the reclamation of areas
under water and revested solely in the National
Government the power to reclaim lands. Section 1 of PD
No. 3-A declared that –
"The provisions of any law to the contrary
notwithstanding, the reclamation of areas under
water, whether foreshore or inland, shall
be limited to the National Government or any
person authorized by it under a proper
contract. (Emphasis supplied)
x x x."
PD No. 3-A repealed Section 5 of the Spanish Law of
Waters of 1866 because reclamation of areas under water
could now be undertaken only by the National
Government or by a person contracted by the National
Government. Private parties may reclaim from the sea
only under a contract with the National Government, and
no longer by grant or permission as provided in Section 5
of the Spanish Law of Waters of 1866.
Executive Order No. 525, issued on February 14, 1979,
designated PEA as the National Government's
implementing arm to undertake "all reclamation projects
of the government," which "shall be undertaken by the
PEA or through a proper contract executed by it with
any person or entity." Under such contract, a private
party receives compensation for reclamation services
rendered to PEA. Payment to the contractor may be in
cash, or in kind consisting of portions of the reclaimed
land, subject to the constitutional ban on private
corporations from acquiring alienable lands of the public
domain. The reclaimed land can be used as payment in
kind only if the reclaimed land is first classified as
alienable or disposable land open to disposition, and then
declared no longer needed for public service.
The Amended JVA covers not only the Freedom Islands,
but also an additional 592.15 hectares which are still
submerged and forming part of Manila Bay. There is no
legislative or Presidential act classifying these
submerged areas as alienable or disposable lands of
the public domain open to disposition. These
submerged areas are not covered by any patent or
certificate of title. There can be no dispute that these
submerged areas form part of the public domain, and in
their present state are inalienable and outside the
commerce of man. Until reclaimed from the sea, these
submerged areas are, under the Constitution, "waters x x
x owned by the State," forming part of the public domain
and consequently inalienable. Only when actually
reclaimed from the sea can these submerged areas be
classified as public agricultural lands, which under the
Constitution are the only natural resources that the State
may alienate. Once reclaimed and transformed into public
agricultural lands, the government may then officially
classify these lands as alienable or disposable lands open
to disposition. Thereafter, the government may declare
these lands no longer needed for public service. Only then
can these reclaimed lands be considered alienable or
disposable lands of the public domain and within the
commerce of man.
The classification of PEA's reclaimed foreshore and
submerged lands into alienable or disposable lands open
to disposition is necessary because PEA is tasked under
its charter to undertake public services that require the
use of lands of the public domain. Under Section 5 of PD
No. 1084, the functions of PEA include the following: "[T]o
own or operate railroads, tramways and other kinds of
land transportation, x x x; [T]o construct, maintain and
operate such systems of sanitary sewers as may be
necessary; [T]o construct, maintain and operate such
storm drains as may be necessary." PEA is empowered
to issue "rules and regulations as may be necessary for
the proper use by private parties of any or all of the
highways, roads, utilities, buildings and/or any of its
properties and to impose or collect fees or tolls for their
use." Thus, part of the reclaimed foreshore and
submerged lands held by the PEA would actually be
needed for public use or service since many of the
functions imposed on PEA by its charter constitute
essential public services.
Moreover, Section 1 of Executive Order No. 525 provides
that PEA "shall be primarily responsible for integrating,
directing, and coordinating all reclamation projects for and
on behalf of the National Government." The same section
also states that "[A]ll reclamation projects shall be
approved by the President upon recommendation of the
PEA, and shall be undertaken by the PEA or through a
proper contract executed by it with any person or entity; x
x x." Thus, under EO No. 525, in relation to PD No. 3-A
and PD No.1084, PEA became the primary implementing
agency of the National Government to reclaim foreshore
and submerged lands of the public domain. EO No. 525
recognized PEA as the government entity "to undertake
the reclamation of lands and ensure their maximum
utilization in promoting public welfare and
143
interests."79 Since large portions of these reclaimed
lands would obviously be needed for public service, there
must be a formal declaration segregating reclaimed lands
no longer needed for public service from those still
needed for public service.1âwphi1.nêt
Section 3 of EO No. 525, by declaring that all lands
reclaimed by PEA "shall belong to or be owned by the
PEA," could not automatically operate to classify
inalienable lands into alienable or disposable lands of the
public domain. Otherwise, reclaimed foreshore and
submerged lands of the public domain would
automatically become alienable once reclaimed by PEA,
whether or not classified as alienable or disposable.
The Revised Administrative Code of 1987, a later law than
either PD No. 1084 or EO No. 525, vests in the
Department of Environment and Natural Resources
("DENR" for brevity) the following powers and functions:
"Sec. 4. Powers and Functions. The Department
shall:
(1) x x x
xxx
(4) Exercise supervision and control over
forest lands, alienable and disposable public
lands, mineral resources and, in the process of
exercising such control, impose appropriate
taxes, fees, charges, rentals and any such form
of levy and collect such revenues for the
exploration, development, utilization or gathering
of such resources;
xxx
(14) Promulgate rules, regulations and
guidelines on the issuance of licenses,
permits, concessions, lease agreements and
such other privileges concerning the
development, exploration and utilization of
the country's marine, freshwater, and
brackish water and over all aquatic resources
of the country and shall continue to oversee,
supervise and police our natural resources;
cancel or cause to cancel such privileges upon
failure, non-compliance or violations of any
regulation, order, and for all other causes which
are in furtherance of the conservation of natural
resources and supportive of the national interest;
(15) Exercise exclusive jurisdiction on the
management and disposition of all lands of
the public domain and serve as the sole
agency responsible for classification, sub-
classification, surveying and titling of lands in
consultation with appropriate
agencies."80 (Emphasis supplied)
As manager, conservator and overseer of the natural
resources of the State, DENR exercises "supervision and
control over alienable and disposable public lands."
DENR also exercises "exclusive jurisdiction on the
management and disposition of all lands of the public
domain." Thus, DENR decides whether areas under
water, like foreshore or submerged areas of Manila Bay,
should be reclaimed or not. This means that PEA needs
authorization from DENR before PEA can undertake
reclamation projects in Manila Bay, or in any part of the
country.
DENR also exercises exclusive jurisdiction over the
disposition of all lands of the public domain. Hence,
DENR decides whether reclaimed lands of PEA should be
classified as alienable under Sections 681 and 782 of CA
No. 141. Once DENR decides that the reclaimed lands
should be so classified, it then recommends to the
President the issuance of a proclamation classifying the
lands as alienable or disposable lands of the public
domain open to disposition. We note that then DENR
Secretary Fulgencio S. Factoran, Jr. countersigned
Special Patent No. 3517 in compliance with the Revised
Administrative Code and Sections 6 and 7 of CA No. 141.
In short, DENR is vested with the power to authorize the
reclamation of areas under water, while PEA is vested
with the power to undertake the physical reclamation of
areas under water, whether directly or through private
contractors. DENR is also empowered to classify lands of
the public domain into alienable or disposable lands
subject to the approval of the President. On the other
hand, PEA is tasked to develop, sell or lease the
reclaimed alienable lands of the public domain.
Clearly, the mere physical act of reclamation by PEA of
foreshore or submerged areas does not make the
reclaimed lands alienable or disposable lands of the
public domain, much less patrimonial lands of PEA.
Likewise, the mere transfer by the National Government
of lands of the public domain to PEA does not make the
lands alienable or disposable lands of the public domain,
much less patrimonial lands of PEA.
Absent two official acts – a classification that these lands
are alienable or disposable and open to disposition and a
declaration that these lands are not needed for public
service, lands reclaimed by PEA remain inalienable lands
of the public domain. Only such an official classification
and formal declaration can convert reclaimed lands into
alienable or disposable lands of the public domain, open
to disposition under the Constitution, Title I and Title
III83 of CA No. 141 and other applicable laws.84
PEA's Authority to Sell Reclaimed Lands
PEA, like the Legal Task Force, argues that as alienable
or disposable lands of the public domain, the reclaimed
lands shall be disposed of in accordance with CA No. 141,
the Public Land Act. PEA, citing Section 60 of CA No. 141,
admits that reclaimed lands transferred to a branch or
subdivision of the government "shall not be alienated,
encumbered, or otherwise disposed of in a manner
affecting its title, except when authorized by Congress:
x x x."85 (Emphasis by PEA)
In Laurel vs. Garcia,86 the Court cited Section 48 of the
Revised Administrative Code of 1987, which states that –
"Sec. 48. Official Authorized to Convey Real
Property. Whenever real property of the
Government is authorized by law to be
conveyed, the deed of conveyance shall be
executed in behalf of the government by the
following: x x x."
Thus, the Court concluded that a law is needed to convey
any real property belonging to the Government. The Court
declared that -
144
 "It is not for the President to convey real property
of the government on his or her own sole
will. Any such conveyance must be authorized
and approved by a law enacted by the
Congress. It requires executive and legislative
concurrence." (Emphasis supplied)
PEA contends that PD No. 1085 and EO No. 525
constitute the legislative authority allowing PEA to sell its
reclaimed lands. PD No. 1085, issued on February 4,
1977, provides that –
"The land reclaimed in the foreshore and
offshore area of Manila Bay pursuant to the
contract for the reclamation and construction of
the Manila-Cavite Coastal Road Project between
the Republic of the Philippines and the
Construction and Development Corporation of
the Philippines dated November 20, 1973 and/or
any other contract or reclamation covering the
same area is hereby transferred, conveyed
and assigned to the ownership and
administration of the Public Estates
Authority established pursuant to PD No. 1084;
Provided, however, That the rights and interests
of the Construction and Development
Corporation of the Philippines pursuant to the
aforesaid contract shall be recognized and
respected.
Henceforth, the Public Estates Authority shall
exercise the rights and assume the obligations of
the Republic of the Philippines (Department of
Public Highways) arising from, or incident to, the
aforesaid contract between the Republic of the
Philippines and the Construction and
Development Corporation of the Philippines.
In consideration of the foregoing transfer and
assignment, the Public Estates Authority shall
issue in favor of the Republic of the Philippines
the corresponding shares of stock in said entity
with an issued value of said shares of stock
(which) shall be deemed fully paid and non-
assessable.
The Secretary of Public Highways and the
General Manager of the Public Estates Authority
shall execute such contracts or agreements,
including appropriate agreements with the
Construction and Development Corporation of
the Philippines, as may be necessary to
implement the above.
Special land patent/patents shall be issued by
the Secretary of Natural Resources in favor of
the Public Estates Authority without prejudice
to the subsequent transfer to the contractor
or his assignees of such portion or portions
of the land reclaimed or to be reclaimed as
provided for in the above-mentioned contract.
On the basis of such patents, the Land
Registration Commission shall issue the
corresponding certificate of title." (Emphasis
supplied)
On the other hand, Section 3 of EO No. 525, issued on
February 14, 1979, provides that -
"Sec. 3. All lands reclaimed by PEA shall
belong to or be owned by the PEA which shall
be responsible for its administration,
development, utilization or disposition in
accordance with the provisions of Presidential
Decree No. 1084. Any and all income that the
PEA may derive from the sale, lease or use of
reclaimed lands shall be used in accordance with
the provisions of Presidential Decree No. 1084."
There is no express authority under either PD No. 1085
or EO No. 525 for PEA to sell its reclaimed lands. PD No.
1085 merely transferred "ownership and administration"
of lands reclaimed from Manila Bay to PEA, while EO No.
525 declared that lands reclaimed by PEA "shall belong
to or be owned by PEA." EO No. 525 expressly states that
PEA should dispose of its reclaimed lands "in accordance
with the provisions of Presidential Decree No. 1084," the
charter of PEA.
PEA's charter, however, expressly tasks PEA "to develop,
improve, acquire, administer, deal in, subdivide, dispose,
lease and sell any and all kinds of lands x x x owned,
managed, controlled and/or operated by the
government."87(Emphasis supplied) There is, therefore,
legislative authority granted to PEA to sell its lands,
whether patrimonial or alienable lands of the public
domain. PEA may sell to private parties its patrimonial
propertiesin accordance with the PEA charter free from
constitutional limitations. The constitutional ban on private
corporations from acquiring alienable lands of the public
domain does not apply to the sale of PEA's patrimonial
lands.
PEA may also sell its alienable or disposable lands of
the public domain to private individuals since, with the
legislative authority, there is no longer any statutory
prohibition against such sales and the constitutional ban
does not apply to individuals. PEA, however, cannot sell
any of its alienable or disposable lands of the public
domain to private corporations since Section 3, Article XII
of the 1987 Constitution expressly prohibits such sales.
The legislative authority benefits only individuals. Private
corporations remain barred from acquiring any kind of
alienable land of the public domain, including government
reclaimed lands.
The provision in PD No. 1085 stating that portions of the
reclaimed lands could be transferred by PEA to the
"contractor or his assignees" (Emphasis supplied) would
not apply to private corporations but only to individuals
because of the constitutional ban. Otherwise, the
provisions of PD No. 1085 would violate both the 1973
and 1987 Constitutions.
The requirement of public auction in the sale of
reclaimed lands
Assuming the reclaimed lands of PEA are classified as
alienable or disposable lands open to disposition, and
further declared no longer needed for public service, PEA
would have to conduct a public bidding in selling or
leasing these lands. PEA must observe the provisions of
Sections 63 and 67 of CA No. 141 requiring public
auction, in the absence of a law exempting PEA from
holding a public auction.88 Special Patent No. 3517
expressly states that the patent is issued by authority of
the Constitution and PD No. 1084, "supplemented by
Commonwealth Act No. 141, as amended." This is an
acknowledgment that the provisions of CA No. 141 apply
to the disposition of reclaimed alienable lands of the
public domain unless otherwise provided by law.
Executive Order No. 654,89 which authorizes PEA "to
145
determine the kind and manner of payment for the
transfer" of its assets and properties, does not exempt
PEA from the requirement of public auction. EO No. 654
merely authorizes PEA to decide the mode of payment,
whether in kind and in installment, but does not authorize
PEA to dispense with public auction.
Moreover, under Section 79 of PD No. 1445, otherwise
known as the Government Auditing Code, the
government is required to sell valuable government
property through public bidding. Section 79 of PD No.
1445 mandates that –
"Section 79. When government property has
become unserviceable for any cause, or is no
longer needed, it shall, upon application of the
officer accountable therefor, be inspected by the
head of the agency or his duly authorized
representative in the presence of the auditor
concerned and, if found to be valueless or
unsaleable, it may be destroyed in their
presence. If found to be valuable, it may be
sold at public auction to the highest
bidder under the supervision of the proper
committee on award or similar body in the
presence of the auditor concerned or other
authorized representative of the
Commission, after advertising by printed
notice in the Official Gazette, or for not less
than three consecutive days in any
newspaper of general circulation, or where the
value of the property does not warrant the
expense of publication, by notices posted for a
like period in at least three public places in the
locality where the property is to be sold. In the
event that the public auction fails, the
property may be sold at a private sale at such
price as may be fixed by the same committee
or body concerned and approved by the
Commission."
It is only when the public auction fails that a negotiated
sale is allowed, in which case the Commission on Audit
must approve the selling price.90 The Commission on
Audit implements Section 79 of the Government Auditing
Code through Circular No. 89-29691 dated January 27,
1989. This circular emphasizes that government assets
must be disposed of only through public auction, and a
negotiated sale can be resorted to only in case of "failure
of public auction."
At the public auction sale, only Philippine citizens are
qualified to bid for PEA's reclaimed foreshore and
submerged alienable lands of the public domain. Private
corporations are barred from bidding at the auction sale
of any kind of alienable land of the public domain.
PEA originally scheduled a public bidding for the Freedom
Islands on December 10, 1991. PEA imposed a condition
that the winning bidder should reclaim another 250
hectares of submerged areas to regularize the shape of
the Freedom Islands, under a 60-40 sharing of the
additional reclaimed areas in favor of the winning
bidder.92 No one, however, submitted a bid. On
December 23, 1994, the Government Corporate Counsel
advised PEA it could sell the Freedom Islands through
negotiation, without need of another public bidding,
because of the failure of the public bidding on December
10, 1991.93
However, the original JVA dated April 25, 1995 covered
not only the Freedom Islands and the additional 250
hectares still to be reclaimed, it also granted an option to
AMARI to reclaim another 350 hectares. The original JVA,
a negotiated contract, enlarged the reclamation area
to 750 hectares.94 The failure of public bidding on
December 10, 1991, involving only 407.84 hectares,95 is
not a valid justification for a negotiated sale of 750
hectares, almost double the area publicly auctioned.
Besides, the failure of public bidding happened on
December 10, 1991, more than three years before the
signing of the original JVA on April 25, 1995. The
economic situation in the country had greatly improved
during the intervening period.
Reclamation under the BOT Law and the Local
Government Code
The constitutional prohibition in Section 3, Article XII of
the 1987 Constitution is absolute and clear: "Private
corporations or associations may not hold such alienable
lands of the public domain except by lease, x x x." Even
Republic Act No. 6957 ("BOT Law," for brevity), cited by
PEA and AMARI as legislative authority to sell reclaimed
lands to private parties, recognizes the constitutional ban.
Section 6 of RA No. 6957 states –
"Sec. 6. Repayment Scheme. - For the financing,
construction, operation and maintenance of any
infrastructure projects undertaken through the
build-operate-and-transfer arrangement or any of
its variations pursuant to the provisions of this
Act, the project proponent x x x may likewise be
repaid in the form of a share in the revenue of the
project or other non-monetary payments, such
as, but not limited to, the grant of a portion or
percentage of the reclaimed land, subject to the
constitutional requirements with respect to
the ownership of the land: x x x." (Emphasis
supplied)
A private corporation, even one that undertakes the
physical reclamation of a government BOT project,
cannot acquire reclaimed alienable lands of the public
domain in view of the constitutional ban.
Section 302 of the Local Government Code, also
mentioned by PEA and AMARI, authorizes local
governments in land reclamation projects to pay the
contractor or developer in kind consisting of a percentage
of the reclaimed land, to wit:
"Section 302. Financing, Construction,
Maintenance, Operation, and Management of
Infrastructure Projects by the Private Sector. x x
x
xxx
In case of land reclamation or construction of
industrial estates, the repayment plan may
consist of the grant of a portion or percentage of
the reclaimed land or the industrial estate
constructed."
Although Section 302 of the Local Government Code
does not contain a proviso similar to that of the BOT Law,
the constitutional restrictions on land ownership
automatically apply even though not expressly mentioned
in the Local Government Code.
146
Thus, under either the BOT Law or the Local Government
Code, the contractor or developer, if a corporate entity,
can only be paid with leaseholds on portions of the
reclaimed land. If the contractor or developer is an
individual, portions of the reclaimed land, not exceeding
12 hectares96 of non-agricultural lands, may be conveyed
to him in ownership in view of the legislative authority
allowing such conveyance. This is the only way these
provisions of the BOT Law and the Local Government
Code can avoid a direct collision with Section 3, Article XII
of the 1987 Constitution.
Registration of lands of the public domain
Finally, PEA theorizes that the "act of conveying the
ownership of the reclaimed lands to public respondent
PEA transformed such lands of the public domain to
private lands." This theory is echoed by AMARI which
maintains that the "issuance of the special patent leading
to the eventual issuance of title takes the subject land
away from the land of public domain and converts the
property into patrimonial or private property." In short,
PEA and AMARI contend that with the issuance of Special
Patent No. 3517 and the corresponding certificates of
titles, the 157.84 hectares comprising the Freedom
Islands have become private lands of PEA. In support of
their theory, PEA and AMARI cite the following rulings of
the Court:
1. Sumail v. Judge of CFI of Cotabato,97 where
the Court held –
"Once the patent was granted and the
corresponding certificate of title was issued, the
land ceased to be part of the public domain and
became private property over which the Director
of Lands has neither control nor jurisdiction."
2. Lee Hong Hok v. David,98 where the Court
declared -
"After the registration and issuance of the
certificate and duplicate certificate of title based
on a public land patent, the land covered thereby
automatically comes under the operation of
Republic Act 496 subject to all the safeguards
provided therein."3. Heirs of Gregorio Tengco v.
Heirs of Jose Aliwalas,99 where the Court ruled -
"While the Director of Lands has the power to
review homestead patents, he may do so only so
long as the land remains part of the public domain
and continues to be under his exclusive control;
but once the patent is registered and a certificate
of title is issued, the land ceases to be part of the
public domain and becomes private property over
which the Director of Lands has neither control
nor jurisdiction."
4. Manalo v. Intermediate Appellate
Court,100 where the Court held –
"When the lots in dispute were certified as
disposable on May 19, 1971, and free patents
were issued covering the same in favor of the
private respondents, the said lots ceased to be
part of the public domain and, therefore, the
Director of Lands lost jurisdiction over the same."
5.Republic v. Court of Appeals,101 where the
Court stated –
"Proclamation No. 350, dated October 9, 1956, of
President Magsaysay legally effected a land
grant to the Mindanao Medical Center, Bureau of
Medical Services, Department of Health, of the
whole lot, validly sufficient for initial registration
under the Land Registration Act. Such land grant
is constitutive of a 'fee simple' title or absolute title
in favor of petitioner Mindanao Medical Center.
Thus, Section 122 of the Act, which governs the
registration of grants or patents involving public
lands, provides that 'Whenever public lands in the
Philippine Islands belonging to the Government
of the United States or to the Government of the
Philippines are alienated, granted or conveyed to
persons or to public or private corporations, the
same shall be brought forthwith under the
operation of this Act (Land Registration Act, Act
496) and shall become registered lands.'"
The first four cases cited involve petitions to cancel the
land patents and the corresponding certificates of
titles issued to private parties. These four cases
uniformly hold that the Director of Lands has no
jurisdiction over private lands or that upon issuance of the
certificate of title the land automatically comes under the
Torrens System. The fifth case cited involves the
registration under the Torrens System of a 12.8-hectare
public land granted by the National Government to
Mindanao Medical Center, a government unit under the
Department of Health. The National Government
transferred the 12.8-hectare public land to serve as the
site for the hospital buildings and other facilities of
Mindanao Medical Center, which performed a public
service. The Court affirmed the registration of the 12.8-
hectare public land in the name of Mindanao Medical
Center under Section 122 of Act No. 496. This fifth case
is an example of a public land being registered under Act
No. 496 without the land losing its character as a property
of public dominion.
In the instant case, the only patent and certificates of title
issued are those in the name of PEA, a wholly
government owned corporation performing public as well
as proprietary functions. No patent or certificate of title
has been issued to any private party. No one is asking the
Director of Lands to cancel PEA's patent or certificates of
title. In fact, the thrust of the instant petition is that PEA's
certificates of title should remain with PEA, and the land
covered by these certificates, being alienable lands of the
public domain, should not be sold to a private corporation.
Registration of land under Act No. 496 or PD No. 1529
does not vest in the registrant private or public ownership
of the land. Registration is not a mode of acquiring
ownership but is merely evidence of ownership previously
conferred by any of the recognized modes of acquiring
ownership. Registration does not give the registrant a
better right than what the registrant had prior to the
registration.102 The registration of lands of the public
domain under the Torrens system, by itself, cannot
convert public lands into private lands.103
Jurisprudence holding that upon the grant of the patent or
issuance of the certificate of title the alienable land of the
public domain automatically becomes private land cannot
apply to government units and entities like PEA. The
transfer of the Freedom Islands to PEA was made subject
to the provisions of CA No. 141 as expressly stated in
147
Special Patent No. 3517 issued by then President Aquino,
to wit:
"NOW, THEREFORE, KNOW YE, that by
authority of the Constitution of the Philippines and
in conformity with the provisions of Presidential
Decree No. 1084, supplemented by
Commonwealth Act No. 141, as amended,
there are hereby granted and conveyed unto the
Public Estates Authority the aforesaid tracts of
land containing a total area of one million nine
hundred fifteen thousand eight hundred ninety
four (1,915,894) square meters; the technical
description of which are hereto attached and
made an integral part hereof." (Emphasis
supplied)
Thus, the provisions of CA No. 141 apply to the Freedom
Islands on matters not covered by PD No. 1084. Section
60 of CA No. 141 prohibits, "except when authorized by
Congress," the sale of alienable lands of the public
domain that are transferred to government units or
entities. Section 60 of CA No. 141 constitutes, under
Section 44 of PD No. 1529, a "statutory lien affecting title"
of the registered land even if not annotated on the
certificate of title.104Alienable lands of the public domain
held by government entities under Section 60 of CA No.
141 remain public lands because they cannot be
alienated or encumbered unless Congress passes a law
authorizing their disposition. Congress, however, cannot
authorize the sale to private corporations of reclaimed
alienable lands of the public domain because of the
constitutional ban. Only individuals can benefit from such
law.
The grant of legislative authority to sell public lands in
accordance with Section 60 of CA No. 141 does not
automatically convert alienable lands of the public domain
into private or patrimonial lands. The alienable lands of
the public domain must be transferred to qualified private
parties, or to government entities not tasked to dispose of
public lands, before these lands can become private or
patrimonial lands. Otherwise, the constitutional ban will
become illusory if Congress can declare lands of the
public domain as private or patrimonial lands in the hands
of a government agency tasked to dispose of public lands.
This will allow private corporations to acquire directly from
government agencies limitless areas of lands which, prior
to such law, are concededly public lands.
Under EO No. 525, PEA became the central
implementing agency of the National Government to
reclaim foreshore and submerged areas of the public
domain. Thus, EO No. 525 declares that –
"EXECUTIVE ORDER NO. 525
Designating the Public Estates Authority as the
Agency Primarily Responsible for all Reclamation
Projects
Whereas, there are several reclamation projects
which are ongoing or being proposed to be
undertaken in various parts of the country which
need to be evaluated for consistency with
national programs;
Whereas, there is a need to give further
institutional support to the Government's
declared policy to provide for a coordinated,
economical and efficient reclamation of lands;
Whereas, Presidential Decree No. 3-A requires
that all reclamation of areas shall be limited to the
National Government or any person authorized
by it under proper contract;
Whereas, a central authority is needed to act
on behalf of the National Government which
shall ensure a coordinated and integrated
approach in the reclamation of lands;
Whereas, Presidential Decree No. 1084
creates the Public Estates Authority as a
government corporation to undertake
reclamation of lands and ensure their
maximum utilization in promoting public
welfare and interests; and
Whereas, Presidential Decree No. 1416 provides
the President with continuing authority to
reorganize the national government including the
transfer, abolition, or merger of functions and
offices.
NOW, THEREFORE, I, FERDINAND E.
MARCOS, President of the Philippines, by virtue
of the powers vested in me by the Constitution
and pursuant to Presidential Decree No. 1416, do
hereby order and direct the following:
Section 1. The Public Estates Authority (PEA)
shall be primarily responsible for integrating,
directing, and coordinating all reclamation
projects for and on behalf of the National
Government. All reclamation projects shall be
approved by the President upon recommendation
of the PEA, and shall be undertaken by the PEA
or through a proper contract executed by it with
any person or entity; Provided, that, reclamation
projects of any national government agency or
entity authorized under its charter shall be
undertaken in consultation with the PEA upon
approval of the President.
x x x ."
As the central implementing agency tasked to undertake
reclamation projects nationwide, with authority to sell
reclaimed lands, PEA took the place of DENR as the
government agency charged with leasing or selling
reclaimed lands of the public domain. The reclaimed
lands being leased or sold by PEA are not private lands,
in the same manner that DENR, when it disposes of other
alienable lands, does not dispose of private lands but
alienable lands of the public domain. Only when qualified
private parties acquire these lands will the lands become
private lands. In the hands of the government agency
tasked and authorized to dispose of alienable of
disposable lands of the public domain, these lands
are still public, not private lands.
Furthermore, PEA's charter expressly states that PEA
"shall hold lands of the public domain" as well as "any
and all kinds of lands." PEA can hold both lands of the
public domain and private lands. Thus, the mere fact that
alienable lands of the public domain like the Freedom
Islands are transferred to PEA and issued land patents or
certificates of title in PEA's name does not automatically
make such lands private.
148
To allow vast areas of reclaimed lands of the public
domain to be transferred to PEA as private lands will
sanction a gross violation of the constitutional ban on
private corporations from acquiring any kind of alienable
land of the public domain. PEA will simply turn around, as
PEA has now done under the Amended JVA, and
transfer several hundreds of hectares of these reclaimed
and still to be reclaimed lands to a single private
corporation in only one transaction. This scheme will
effectively nullify the constitutional ban in Section 3,
Article XII of the 1987 Constitution which was intended to
diffuse equitably the ownership of alienable lands of the
public domain among Filipinos, now numbering over 80
million strong.
This scheme, if allowed, can even be applied to alienable
agricultural lands of the public domain since PEA can
"acquire x x x any and all kinds of lands." This will open
the floodgates to corporations and even individuals
acquiring hundreds of hectares of alienable lands of the
public domain under the guise that in the hands of PEA
these lands are private lands. This will result in
corporations amassing huge landholdings never before
seen in this country - creating the very evil that the
constitutional ban was designed to prevent. This will
completely reverse the clear direction of constitutional
development in this country. The 1935 Constitution
allowed private corporations to acquire not more than
1,024 hectares of public lands.105 The 1973 Constitution
prohibited private corporations from acquiring any kind of
public land, and the 1987 Constitution has unequivocally
reiterated this prohibition.
The contention of PEA and AMARI that public lands, once
registered under Act No. 496 or PD No. 1529,
automatically become private lands is contrary to existing
laws. Several laws authorize lands of the public domain
to be registered under the Torrens System or Act No. 496,
now PD No. 1529, without losing their character as public
lands. Section 122 of Act No. 496, and Section 103 of PD
No. 1529, respectively, provide as follows:
Act No. 496
"Sec. 122. Whenever public lands in the
Philippine Islands belonging to the x x x
Government of the Philippine Islands are
alienated, granted, or conveyed to persons or
the public or private corporations, the same
shall be brought forthwith under the operation of
this Act and shall become registered lands."
PD No. 1529
"Sec. 103. Certificate of Title to Patents.
Whenever public land is by the Government
alienated, granted or conveyed to any person,
the same shall be brought forthwith under the
operation of this Decree." (Emphasis supplied)
Based on its legislative history, the phrase "conveyed to
any person" in Section 103 of PD No. 1529 includes
conveyances of public lands to public corporations.
Alienable lands of the public domain "granted, donated,
or transferred to a province, municipality, or branch or
subdivision of the Government," as provided in Section 60
of CA No. 141, may be registered under the Torrens
System pursuant to Section 103 of PD No. 1529. Such
registration, however, is expressly subject to the condition
in Section 60 of CA No. 141 that the land "shall not be
alienated, encumbered or otherwise disposed of in a
manner affecting its title, except when authorized by
Congress." This provision refers to government
reclaimed, foreshore and marshy lands of the public
domain that have been titled but still cannot be alienated
or encumbered unless expressly authorized by Congress.
The need for legislative authority prevents the registered
land of the public domain from becoming private land that
can be disposed of to qualified private parties.
The Revised Administrative Code of 1987 also recognizes
that lands of the public domain may be registered under
the Torrens System. Section 48, Chapter 12, Book I of the
Code states –
"Sec. 48. Official Authorized to Convey Real
Property. Whenever real property of the
Government is authorized by law to be conveyed,
the deed of conveyance shall be executed in
behalf of the government by the following:
(1) x x x
(2) For property belonging to the Republic of
the Philippines, but titled in the name of any
political subdivision or of any corporate
agency or instrumentality, by the executive
head of the agency or instrumentality."
(Emphasis supplied)
Thus, private property purchased by the National
Government for expansion of a public wharf may be titled
in the name of a government corporation regulating port
operations in the country. Private property purchased by
the National Government for expansion of an airport may
also be titled in the name of the government agency
tasked to administer the airport. Private property donated
to a municipality for use as a town plaza or public school
site may likewise be titled in the name of the
municipality.106 All these properties become properties of
the public domain, and if already registered under Act No.
496 or PD No. 1529, remain registered land. There is no
requirement or provision in any existing law for the de-
registration of land from the Torrens System.
Private lands taken by the Government for public use
under its power of eminent domain become
unquestionably part of the public domain. Nevertheless,
Section 85 of PD No. 1529 authorizes the Register of
Deeds to issue in the name of the National Government
new certificates of title covering such expropriated lands.
Section 85 of PD No. 1529 states –
"Sec. 85. Land taken by eminent domain.
Whenever any registered land, or interest therein,
is expropriated or taken by eminent domain, the
National Government, province, city or
municipality, or any other agency or
instrumentality exercising such right shall file for
registration in the proper Registry a certified copy
of the judgment which shall state definitely by an
adequate description, the particular property or
interest expropriated, the number of the
certificate of title, and the nature of the public use.
A memorandum of the right or interest taken shall
be made on each certificate of title by the
Register of Deeds, and where the fee simple is
taken, a new certificate shall be issued in
favor of the National Government, province,
city, municipality, or any other agency or
instrumentality exercising such right for the land
149
 so taken. The legal expenses incident to the
memorandum of registration or issuance of a new
certificate of title shall be for the account of the
authority taking the land or interest therein."
(Emphasis supplied)
Consequently, lands registered under Act No. 496 or PD
No. 1529 are not exclusively private or patrimonial lands.
Lands of the public domain may also be registered
pursuant to existing laws.
AMARI makes a parting shot that the Amended JVA is not
a sale to AMARI of the Freedom Islands or of the lands to
be reclaimed from submerged areas of Manila Bay. In the
words of AMARI, the Amended JVA "is not a sale but a
joint venture with a stipulation for reimbursement of the
original cost incurred by PEA for the earlier reclamation
and construction works performed by the CDCP under its
1973 contract with the Republic." Whether the Amended
JVA is a sale or a joint venture, the fact remains that the
Amended JVA requires PEA to "cause the issuance and
delivery of the certificates of title conveying AMARI's Land
Share in the name of AMARI."107
This stipulation still contravenes Section 3, Article XII of
the 1987 Constitution which provides that private
corporations "shall not hold such alienable lands of the
public domain except by lease." The transfer of title and
ownership to AMARI clearly means that AMARI will "hold"
the reclaimed lands other than by lease. The transfer of
title and ownership is a "disposition" of the reclaimed
lands, a transaction considered a sale or alienation under
CA No. 141,108 the Government Auditing Code,109 and
Section 3, Article XII of the 1987 Constitution.
The Regalian doctrine is deeply implanted in our legal
system. Foreshore and submerged areas form part of the
public domain and are inalienable. Lands reclaimed from
foreshore and submerged areas also form part of the
public domain and are also inalienable, unless converted
pursuant to law into alienable or disposable lands of the
public domain. Historically, lands reclaimed by the
government are sui generis, not available for sale to
private parties unlike other alienable public lands.
Reclaimed lands retain their inherent potential as areas
for public use or public service. Alienable lands of the
public domain, increasingly becoming scarce natural
resources, are to be distributed equitably among our ever-
growing population. To insure such equitable distribution,
the 1973 and 1987 Constitutions have barred private
corporations from acquiring any kind of alienable land of
the public domain. Those who attempt to dispose of
inalienable natural resources of the State, or seek to
circumvent the constitutional ban on alienation of lands of
the public domain to private corporations, do so at their
own risk.
We can now summarize our conclusions as follows:
1. The 157.84 hectares of reclaimed lands
comprising the Freedom Islands, now covered by
certificates of title in the name of PEA,
are alienable lands of the public domain. PEA
may lease these lands to private corporations but
may not sell or transfer ownership of these lands
to private corporations. PEA may only sell these
lands to Philippine citizens, subject to the
ownership limitations in the 1987 Constitution and
existing laws.
2. The 592.15 hectares of submerged areas of
Manila Bay remain inalienable natural resources
of the public domain until classified as alienable
or disposable lands open to disposition and
declared no longer needed for public service. The
government can make such classification and
declaration only after PEA has reclaimed these
submerged areas. Only then can these lands
qualify as agricultural lands of the public domain,
which are the only natural resources the
government can alienate. In their present state,
the 592.15 hectares of submerged areas are
inalienable and outside the commerce of man.
3. Since the Amended JVA seeks to transfer to
AMARI, a private corporation, ownership of 77.34
hectares110of the Freedom Islands, such transfer
is void for being contrary to Section 3, Article XII
of the 1987 Constitution which prohibits private
corporations from acquiring any kind of alienable
land of the public domain.
4. Since the Amended JVA also seeks to transfer
to AMARI ownership of 290.156 hectares111 of
still submerged areas of Manila Bay, such
transfer is void for being contrary to Section 2,
Article XII of the 1987 Constitution which prohibits
the alienation of natural resources other than
agricultural lands of the public domain. PEA may
reclaim these submerged areas. Thereafter, the
government can classify the reclaimed lands as
alienable or disposable, and further declare them
no longer needed for public service. Still, the
transfer of such reclaimed alienable lands of the
public domain to AMARI will be void in view of
Section 3, Article XII of the 1987 Constitution
which prohibits private corporations from
acquiring any kind of alienable land of the public
domain.
Clearly, the Amended JVA violates glaringly Sections 2
and 3, Article XII of the 1987 Constitution. Under Article
1409112 of the Civil Code, contracts whose "object or
purpose is contrary to law," or whose "object is outside
the commerce of men," are "inexistent and void from the
beginning." The Court must perform its duty to defend and
uphold the Constitution, and therefore declares the
Amended JVA null and void ab initio.
Seventh issue: whether the Court is the proper forum
to raise the issue of whether the Amended JVA is
grossly disadvantageous to the government.
Considering that the Amended JVA is null and void ab
initio, there is no necessity to rule on this last issue.
Besides, the Court is not a trier of facts, and this last issue
involves a determination of factual matters.
WHEREFORE, the petition is GRANTED. The Public
Estates Authority and Amari Coastal Bay Development
Corporation are PERMANENTLY ENJOINED from
implementing the Amended Joint Venture Agreement
which is hereby declared NULL and VOID ab initio.
SO ORDERED.
Davide, Jr., C.J., Bellosillo, Puno, Vitug, Kapunan,
Mendoza, Panganiban, Quisumbing, Ynares-Santiago,
Sandoval-Gutierrez, Austria-Martinez, and Corona,
JJ., concur.
150

Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 115381 December 23, 1994
KILUSANG MAYO UNO LABOR CENTER, petitioner,
vs.
HON. JESUS B. GARCIA, JR., the LAND
TRANSPORTATION FRANCHISING AND
REGULATORY BOARD, and the PROVINCIAL BUS
OPERATORS ASSOCIATION OF THE
PHILIPPINES, respondents.
Potenciano A. Flores for petitioner.
Robert Anthony C. Sison, Cesar B. Brillantes and Jose Z.
Galsim for private respondent.
Jose F. Miravite for movants.
KAPUNAN, J.:
Public utilities are privately owned and operated
businesses whose service are essential to the general
public. They are enterprises which specially cater to the
needs of the public and conduce to their comfort and
convenience. As such, public utility services are
impressed with public interest and concern. The same is
true with respect to the business of common carrier which
holds such a peculiar relation to the public interest that
there is superinduced upon it the right of public regulation
when private properties are affected with public interest,
hence, they cease to be juris privati only. When,
therefore, one devotes his property to a use in which the
public has an interest, he, in effect grants to the public an
interest in that use, and must submit to the control by the
public for the common good, to the extent of the interest
he has thus created.1
An abdication of the licensing and regulatory government
agencies of their functions as the instant petition seeks to
show, is indeed lamentable. Not only is it an unsound
administrative policy but it is inimical to public trust and
public interest as well.
The instant petition for certiorari assails the
constitutionality and validity of certain memoranda,
circulars and/or orders of the Department of
Transportation and Communications (DOTC) and the
Land Transportation Franchising and Regulatory Board
LTFRB)2 which, among others, (a) authorize provincial
bus and jeepney operators to increase or decrease the
prescribed transportation fares without application
therefor with the LTFRB and without hearing and approval
thereof by said agency in violation of Sec. 16(c) of
Commonwealth Act No. 146, as amended, otherwise
known as the Public Service Act, and in derogation of
LTFRB's duty to fix and determine just and reasonable
fares by delegating that function to bus operators, and (b)
establish a presumption of public need in favor of
applicants for certificates of public convenience (CPC)
and place on the oppositor the burden of proving that
there is no need for the proposed service, in patent
violation not only of Sec. 16(c) of CA 146, as amended,
but also of Sec. 20(a) of the same Act mandating that
fares should be "just and reasonable." It is, likewise,
violative of the Rules of Court which places upon each
party the burden to prove his own affirmative
allegations.3 The offending provisions contained in the
questioned issuances pointed out by petitioner, have
resulted in the introduction into our highways and
thoroughfares thousands of old and smoke-belching
buses, many of which are right-hand driven, and have
exposed our consumers to the burden of spiraling costs
of public transportation without hearing and due process.
The following memoranda, circulars and/or orders are
sought to be nullified by the instant petition, viz: (a) DOTC
Memorandum Order 90-395, dated June 26, 1990 relative
to the implementation of a fare range scheme for
provincial bus services in the country; (b) DOTC
Department Order No.
92-587, dated March 30, 1992, defining the policy
framework on the regulation of transport services; (c)
DOTC Memorandum dated October 8, 1992, laying down
rules and procedures to implement Department Order No.
92-587; (d) LTFRB Memorandum Circular No. 92-009,
providing implementing guidelines on the DOTC
Department Order No. 92-587; and (e) LTFRB Order
dated March 24, 1994 in Case No. 94-3112.
The relevant antecedents are as follows:
On June 26, 1990; then Secretary of DOTC, Oscar M.
Orbos, issued Memorandum Circular No. 90-395 to then
LTFRB Chairman, Remedios A.S. Fernando allowing
provincial bus operators to charge passengers rates
within a range of 15% above and 15% below the LTFRB
official rate for a period of one (1) year. The text of the
memorandum order reads in full:
One of the policy reforms and measures
that is in line with the thrusts and the
priorities set out in the Medium-Term
Philippine Development Plan (MTPDP)
1987 — 1992) is the liberalization of
regulations in the transport sector. Along
this line, the Government intends to
move away gradually from regulatory
policies and make progress towards
greater reliance on free market forces.
Based on several surveys and
observations, bus companies are already
charging passenger rates above and
below the official fare declared by LTFRB
on many provincial routes. It is in this
context that some form of liberalization
on public transport fares is to be tested
on a pilot basis.
In view thereof, the LTFRB is hereby
directed to immediately publicize a fare
range scheme for all provincial bus
routes in country (except those operating
within Metro Manila). Transport
Operators shall be allowed to charge
passengers within a range of fifteen
percent (15%) above and fifteen percent
(15%) below the LTFRB official rate for a
period of one year.
Guidelines and procedures for the said
scheme shall be prepared by LTFRB in
coordination with the DOTC Planning
Service.
151
 The implementation of the said fare
range scheme shall start on 6 August
1990.
For compliance. (Emphasis ours.)
Finding the implementation of the fare range scheme "not
legally feasible," Remedios A.S. Fernando submitted the
following memorandum to Oscar M. Orbos on July 24,
1990, to wit:
With reference to DOTC Memorandum
Order No. 90-395 dated 26 June 1990
which the LTFRB received on 19 July
1990, directing the Board "to immediately
publicize a fare range scheme for all
provincial bus routes in the country
(except those operating within Metro
Manila)" that will allow operators "to
charge passengers within a range of
fifteen percent (15%) above and fifteen
percent (15%) below the LTFRB official
rate for a period of one year" the
undersigned is respectfully adverting the
Secretary's attention to the following for
his consideration:
1. Section 16(c) of the
Public Service Act
prescribes the following
for the fixing and
determination of rates —
(a) the rates to be
approved should be
proposed by public
service operators; (b)
there should be a
publication and notice to
concerned or affected
parties in the territory
affected; (c) a public
hearing should be held
for the fixing of the rates;
hence, implementation
of the proposed fare
range scheme on
August 6 without
complying with the
requirements of the
Public Service Act may
not be legally feasible.
2. To allow bus
operators in the country
to charge fares fifteen
(15%) above the present
LTFRB fares in the wake
of the devastation, death
and suffering caused by
the July 16 earthquake
will not be socially
warranted and will be
politically unsound; most
likely public criticism
against the DOTC and
the LTFRB will be
triggered by the
untimely motu
propioimplementation of
the proposal by the mere
expedient of publicizing
the fare range scheme
without calling a public
hearing, which scheme
many as early as during
the Secretary's
predecessor know
through newspaper
reports and columnists'
comments to be Asian
Development Bank and
World Bank inspired.
3. More than inducing a
reduction in bus fares by
fifteen percent (15%) the
implementation of the
proposal will instead
trigger an upward
adjustment in bus fares
by fifteen percent (15%)
at a time when hundreds
of thousands of people
in Central and Northern
Luzon, particularly in
Central Pangasinan, La
Union, Baguio City,
Nueva Ecija, and the
Cagayan Valley are
suffering from the
devastation and havoc
caused by the recent
earthquake.
4. In lieu of the said
proposal, the DOTC with
its agencies involved in
public transportation can
consider measures and
reforms in the industry
that will be socially
uplifting, especially for
the people in the areas
devastated by the recent
earthquake.
In view of the foregoing considerations,
the undersigned respectfully suggests
that the implementation of the proposed
fare range scheme this year be further
studied and evaluated.
On December 5, 1990, private respondent Provincial Bus
Operators Association of the Philippines, Inc. (PBOAP)
filed an application for fare rate increase. An across-the-
board increase of eight and a half centavos (P0.085) per
kilometer for all types of provincial buses with a minimum-
maximum fare range of fifteen (15%) percent over and
below the proposed basic per kilometer fare rate, with the
said minimum-maximum fare range applying only to
ordinary, first class and premium class buses and a fifty-
centavo (P0.50) minimum per kilometer fare for aircon
buses, was sought.
On December 6, 1990, private respondent PBOAP
reduced its applied proposed fare to an across-the-board
increase of six and a half (P0.065) centavos per kilometer
for ordinary buses. The decrease was due to the drop in
the expected price of diesel.
The application was opposed by the Philippine
Consumers Foundation, Inc. and Perla C. Bautista
152
alleging that the proposed rates were exorbitant and
unreasonable and that the application contained no
allegation on the rate of return of the proposed increase
in rates.
On December 14, 1990, public respondent LTFRB
rendered a decision granting the fare rate increase in
accordance with the following schedule of fares on a
straight computation method, viz:
AUTHORIZED FARES
LUZON
MIN. OF 5 KMS. SUCCEEDING KM.
1. Entry into and exit out of the industry.
Following the Constitutional dictum
against monopoly, no franchise holder
shall be permitted to maintain a
monopoly on any route. A minimum of
two franchise holders shall be permitted
to operate on any route.
The requirements to grant a certificate to
operate, or certificate of public
convenience, shall be: proof of Filipino
citizenship, financial capability, public
need, and sufficient insurance cover to
protect the riding public.

In determining public need, the

REGULAR P1.50 P0.37
presumption of need for a service shall
STUDENT P1.15 P0.28
be deemed in favor of the applicant. The
burden of proving that there is no need
VISAYAS/MINDANAO for a proposed service shall be with the
oppositor(s).
REGULAR P1.60 P0.375
STUDENT P1.20 P0.285 In the interest of providing efficient public
FIRST CLASS (PER KM.) transport services, the use of the "prior
LUZON P0.385 operator" and the "priority of filing" rules
VISAYAS/ shall be discontinued. The route
MINDANAO P0.395 measured capacity test or other similar
PREMIERE CLASS (PER KM.) tests of demand for vehicle/vessel fleet
LUZON P0.395 on any route shall be used only as a
VISAYAS/ guide in weighing the merits of each
MINDANAO P0.405 franchise application and not as a limit to
the services offered.
AIRCON (PER KM.) P0.415.4
Where there are limitations in facilities,
On March 30, 1992, then Secretary of the Department of such as congested road space in urban
Transportation and Communications Pete Nicomedes areas, or at airports and ports, the use of
Prado issued Department Order No. demand management measures in
92-587 defining the policy framework on the regulation of conformity with market principles may be
transport services. The full text of the said order is considered.
reproduced below in view of the importance of the
provisions contained therein: The right of an operator to leave the
industry is recognized as a business
WHEREAS, Executive Order No. 125 as decision, subject only to the filing of
amended, designates the Department of appropriate notice and following a phase-
Transportation and Communications out period, to inform the public and to
(DOTC) as the primary policy, planning, minimize disruption of services.
regulating and implementing agency on
transportation; 2. Rate and Fare Setting. Freight rates
shall be freed gradually from government
WHEREAS, to achieve the objective of a controls. Passenger fares shall also be
viable, efficient, and dependable deregulated, except for the lowest class
transportation system, the transportation of passenger service (normally third
regulatory agencies under or attached to class passenger transport) for which the
the DOTC have to harmonize their government will fix indicative or reference
decisions and adopt a common fares. Operators of particular services
philosophy and direction; may fix their own fares within a range
15% above and below the indicative or
WHEREAS, the government proposes to reference rate.
build on the successful liberalization
measures pursued over the last five Where there is lack of effective
years and bring the transport sector competition for services, or on specific
nearer to a balanced longer term routes, or for the transport of particular
regulatory framework; commodities, maximum mandatory
freight rates or passenger fares shall be
NOW, THEREFORE, pursuant to the set temporarily by the government
powers granted by laws to the DOTC, the pending actions to increase the level of
following policies and principles in the competition.
economic regulation of land, air, and
water transportation services are hereby For unserved or single operator routes,
adopted: the government shall contract such
services in the most advantageous terms
153
 to the public and the government,
following public bids for the services. The
advisability of bidding out the services or
using other kinds of incentives on such
routes shall be studied by the
government.
3. Special Incentives and Financing for
Fleet Acquisition. As a matter of policy,
the government shall not engage in
special financing and incentive
programs, including direct subsidies for
fleet acquisition and expansion. Only
when the market situation warrants
government intervention shall programs
of this type be considered. Existing
programs shall be phased out gradually.
The Land Transportation Franchising
and Regulatory Board, the Civil
Aeronautics Board, the Maritime Industry
Authority are hereby directed to submit to
the Office of the Secretary, within forty-
five (45) days of this Order, the detailed
rules and procedures for the
Implementation of the policies herein set
forth. In the formulation of such rules, the
concerned agencies shall be guided by
the most recent studies on the subjects,
such as the Provincial Road Passenger
Transport Study, the Civil Aviation
Master Plan, the Presidential Task Force
on the Inter-island Shipping Industry, and
the Inter-island Liner Shipping Rate
Rationalization Study.
For the compliance of all concerned.
(Emphasis ours)
On October 8, 1992, public respondent Secretary of the
Department of Transportation and Communications
Jesus B. Garcia, Jr. issued a memorandum to the Acting
Chairman of the LTFRB suggesting swift action on the
adoption of rules and procedures to implement above-
quoted Department Order No. 92-587 that laid down
deregulation and other liberalization policies for the
transport sector. Attached to the said memorandum was
a revised draft of the required rules and procedures
covering (i) Entry Into and Exit Out of the Industry and (ii)
Rate and Fare Setting, with comments and suggestions
from the World Bank incorporated therein. Likewise,
resplendent from the said memorandum is the statement
of the DOTC Secretary that the adoption of the rules and
procedures is a pre-requisite to the approval of the
Economic Integration Loan from the World Bank.5
On February 17, 1993, the LTFRB issued Memorandum
Circular
No. 92-009 promulgating the guidelines for the
implementation of DOTC Department Order No. 92-587.
The Circular provides, among others, the following
challenged portions:
xxx xxx xxx
IV. Policy Guidelines on the Issuance of
Certificate of Public Convenience.
The issuance of a Certificate of Public
Convenience is determined by public
need. The presumption of public need for
a service shall be deemed in favor of the
applicant, while burden of proving that
there is no need for the proposed service
shall be the oppositor'(s).
xxx xxx xxx
V. Rate and Fare Setting
The control in pricing shall be liberalized
to introduce price competition
complementary with the quality of
service, subject to prior notice and public
hearing. Fares shall not be provisionally
authorized without public hearing.
A. On the General Structure of Rates
1. The existing authorized fare range
system of plus or minus 15 per cent for
provincial buses and jeepneys shall be
widened to 20% and -25% limit in 1994
with the authorized fare to be replaced by
an indicative or reference rate as the
basis for the expanded fare range.
2. Fare systems for aircon buses are
liberalized to cover first class and premier
services.
xxx xxx xxx
(Emphasis ours).
Sometime in March, 1994, private respondent PBOAP,
availing itself of the deregulation policy of the DOTC
allowing provincial bus operators to collect plus 20% and
minus 25% of the prescribed fare without first having filed
a petition for the purpose and without the benefit of a
public hearing, announced a fare increase of twenty
(20%) percent of the existing fares. Said increased fares
were to be made effective on March 16, 1994.
On March 16, 1994, petitioner KMU filed a petition before
the LTFRB opposing the upward adjustment of bus fares.
On March 24, 1994, the LTFRB issued one of the assailed
orders dismissing the petition for lack of merit. The
dispositive portion reads:
PREMISES CONSIDERED, this Board
after considering the arguments of the
parties, hereby DISMISSES FOR LACK
OF MERIT the petition filed in the above-
entitled case. This petition in this case
was resolved with dispatch at the request
of petitioner to enable it to immediately
avail of the legal remedies or options it is
entitled under existing laws.
SO ORDERED.6
Hence, the instant petition for certiorari with an urgent
prayer for issuance of a temporary restraining order.
The Court, on June 20, 1994, issued a temporary
restraining order enjoining, prohibiting and preventing
respondents from implementing the bus fare rate increase
as well as the questioned orders and memorandum
154
circulars. This meant that provincial bus fares were rolled
back to the levels duly authorized by the LTFRB prior to
March 16, 1994. A moratorium was likewise enforced on
the issuance of franchises for the operation of buses,
jeepneys, and taxicabs.
Petitioner KMU anchors its claim on two (2) grounds.
First, the authority given by respondent LTFRB to
provincial bus operators to set a fare range of plus or
minus fifteen (15%) percent, later increased to plus twenty
(20%) and minus twenty-five (-25%) percent, over and
above the existing authorized fare without having to file a
petition for the purpose, is unconstitutional, invalid and
illegal. Second, the establishment of a presumption of
public need in favor of an applicant for a proposed
transport service without having to prove public necessity,
is illegal for being violative of the Public Service Act and
the Rules of Court.
In its Comment, private respondent PBOAP, while not
actually touching upon the issues raised by the petitioner,
questions the wisdom and the manner by which the
instant petition was filed. It asserts that the petitioner has
no legal standing to sue or has no real interest in the case
at bench and in obtaining the reliefs prayed for.
In their Comment filed by the Office of the Solicitor
General, public respondents DOTC Secretary Jesus B.
Garcia, Jr. and the LTFRB asseverate that the petitioner
does not have the standing to maintain the instant suit.
They further claim that it is within DOTC and LTFRB's
authority to set a fare range scheme and establish a
presumption of public need in applications for certificates
of public convenience.
We find the instant petition impressed with merit.
At the outset, the threshold issue of locus standi must be
struck. Petitioner KMU has the standing to sue.
The requirement of locus standi inheres from the
definition of judicial power. Section 1 of Article VIII of the
Constitution provides:
xxx xxx xxx
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.
In Lamb v. Phipps,7 we ruled that judicial power is the
power to hear and decide causes pending between
parties who have the right to sue in the courts of law and
equity. Corollary to this provision is the principle of locus
standi of a party litigant. One who is directly affected by
and whose interest is immediate and substantial in the
controversy has the standing to sue. The rule therefore
requires that a party must show a personal stake in the
outcome of the case or an injury to himself that can be
redressed by a favorable decision so as to warrant an
invocation of the court's jurisdiction and to justify the
exercise of the court's remedial powers in his behalf.8
In the case at bench, petitioner, whose members had
suffered and continue to suffer grave and irreparable
injury and damage from the implementation of the
questioned memoranda, circulars and/or orders, has
shown that it has a clear legal right that was violated and
continues to be violated with the enforcement of the
challenged memoranda, circulars and/or orders. KMU
members, who avail of the use of buses, trains and
jeepneys everyday, are directly affected by the
burdensome cost of arbitrary increase in passenger fares.
They are part of the millions of commuters who comprise
the riding public. Certainly, their rights must be protected,
not neglected nor ignored.
Assuming arguendo that petitioner is not possessed of
the standing to sue, this court is ready to brush aside this
barren procedural infirmity and recognize the legal
standing of the petitioner in view of the transcendental
importance of the issues raised. And this act of liberality
is not without judicial precedent. As early as
the Emergency Powers Cases, this Court had exercised
its discretion and waived the requirement of proper party.
In the recent case of Kilosbayan, Inc., et al. v. Teofisto
Guingona, Jr., et al.,9 we ruled in the same lines and
enumerated some of the cases where the same policy
was adopted, viz:
. . . A party's standing before this Court is
a procedural technicality which it may, in
the exercise of its discretion, set aside in
view of the importance of the issues
raised. In the landmark Emergency
Powers Cases, [G.R. No. L-2044
(Araneta v. Dinglasan); G.R. No. L-2756
(Araneta
v. Angeles); G.R. No. L-3054 (Rodriguez
v. Tesorero de Filipinas); G.R. No. L-
3055 (Guerrero v. Commissioner of
Customs); and G.R. No. L-3056 (Barredo
v. Commission on Elections), 84 Phil.
368 (1949)], this Court brushed aside this
technicality because "the transcendental
importance to the public of these cases
demands that they be settled promptly
and definitely, brushing aside, if we must,
technicalities of procedure. (Avelino vs.
Cuenco, G.R. No. L-2621)." Insofar as
taxpayers' suits are concerned, this
Court had declared that it "is not devoid
of discretion as to whether or not it should
be entertained," (Tan v. Macapagal, 43
SCRA 677, 680 [1972]) or that it "enjoys
an open discretion to entertain the same
or not." [Sanidad v. COMELEC, 73
SCRA 333 (1976)].
xxx xxx xxx
In line with the liberal policy of this Court
on locus standi, ordinary taxpayers,
members of Congress, and even
association of planters, and
non-profit civic organizations were
allowed to initiate and prosecute actions
before this court to question the
constitutionality or validity of laws, acts,
decisions, rulings, or orders of various
government agencies or
instrumentalities. Among such cases
were those assailing the constitutionality
of (a) R.A. No. 3836 insofar as it allows
155
retirement gratuity and commutation of
vacation and sick leave to Senators and
Representatives and to elective officials
of both Houses of Congress (Philippine
Constitution Association, Inc. v.
Gimenez, 15 SCRA 479 [1965]); (b)
Executive Order No. 284, issued by
President Corazon C. Aquino on 25 July
1987, which allowed members of the
cabinet, their undersecretaries, and
assistant secretaries to hold other
government offices or positions (Civil
Liberties Union v. Executive Secretary,
194 SCRA 317 [1991]); (c) the automatic
appropriation for debt service in the
General Appropriations Act (Guingona v.
Carague, 196 SCRA 221 [1991]; (d) R.A.
No. 7056 on the holding of
desynchronized elections (Osmeña v.
Commission on Elections, 199 SCRA
750 [1991]); (e) P.D. No. 1869 (the
charter of the Philippine Amusement and
Gaming Corporation) on the ground that
it is contrary to morals, public policy, and
order (Basco v. Philippine Amusement
and Gaming Corp., 197 SCRA 52
[1991]); and (f) R.A. No. 6975,
establishing the Philippine National
Police. (Carpio v. Executive Secretary,
206 SCRA 290 [1992]).
Other cases where we have followed a
liberal policy regarding locus
standi include those attacking the validity
or legality of (a) an order allowing the
importation of rice in the light of the
prohibition imposed by R.A. No. 3452
(Iloilo Palay and Corn Planters
Association, Inc. v. Feliciano, 13 SCRA
377 [1965]; (b) P.D. Nos. 991 and 1033
insofar as they proposed amendments to
the Constitution and P.D. No. 1031
insofar as it directed the COMELEC to
supervise, control, hold, and conduct the
referendum-plebiscite on 16 October
1976 (Sanidad v. Commission on
Elections, supra); (c) the bidding for the
sale of the 3,179 square meters of land
at Roppongi, Minato-ku, Tokyo, Japan
(Laurel v. Garcia, 187 SCRA 797 [1990]);
(d) the approval without hearing by the
Board of Investments of the amended
application of the Bataan Petrochemical
Corporation to transfer the site of its plant
from Bataan to Batangas and the validity
of such transfer and the shift of feedstock
from naphtha only to naphtha and/or
liquefied petroleum gas (Garcia v. Board
of Investments, 177 SCRA 374 [1989];
Garcia v. Board of Investments, 191
SCRA 288 [1990]); (e) the decisions,
orders, rulings, and resolutions of the
Executive Secretary, Secretary of
Finance, Commissioner of Internal
Revenue, Commissioner of Customs,
and the Fiscal Incentives Review Board
exempting the National Power
Corporation from indirect tax and duties
(Maceda v. Macaraig, 197 SCRA 771
[1991]); (f) the orders of the Energy
Regulatory Board of 5 and 6 December
1990 on the ground that the hearings
conducted on the second provisional
increase in oil prices did not allow the
petitioner substantial cross-examination;
(Maceda v. Energy Regulatory Board,
199 SCRA 454 [1991]); (g) Executive
Order No. 478 which levied a special duty
of P0.95 per liter of imported oil products
(Garcia v. Executive Secretary, 211
SCRA 219 [1992]); (h) resolutions of the
Commission on Elections concerning the
apportionment, by district, of the number
of elective members of Sanggunians (De
Guia vs. Commission on Elections, 208
SCRA 420 [1992]); and (i) memorandum
orders issued by a Mayor affecting the
Chief of Police of Pasay City (Pasay Law
and Conscience Union, Inc. v. Cuneta,
101 SCRA 662 [1980]).
In the 1975 case of Aquino v.
Commission on Elections (62 SCRA 275
[1975]), this Court, despite its
unequivocal ruling that the petitioners
therein had no personality to file the
petition, resolved nevertheless to pass
upon the issues raised because of the
far-reaching implications of the petition.
We did no less in De Guia v. COMELEC
(Supra) where, although we declared
that De Guia "does not appear to
have locus standi, a standing in law, a
personal or substantial interest," we
brushed aside the procedural infirmity
"considering the importance of the issue
involved, concerning as it does the
political exercise of qualified voters
affected by the apportionment, and
petitioner alleging abuse of discretion
and violation of the Constitution by
respondent."
Now on the merits of the case.
On the fare range scheme.
Section 16(c) of the Public Service Act, as amended,
reads:
Sec. 16. Proceedings of the Commission,
upon notice and hearing. — The
Commission shall have power, upon
proper notice and hearing in accordance
with the rules and provisions of this Act,
subject to the limitations and exceptions
mentioned and saving provisions to the
contrary:
xxx xxx xxx
(c) To fix and determine individual or joint
rates, tolls, charges, classifications, or
schedules thereof, as well as
commutation, mileage kilometrage, and
other special rates which shall be
imposed, observed, and followed
thereafter by any public
service: Provided, That the Commission
may, in its discretion, approve rates
proposed by public services provisionally
and without necessity of any hearing; but
it shall call a hearing thereon within thirty
156
 days thereafter, upon publication and
notice to the concerns operating in the
territory affected: Provided, further, That
in case the public service equipment of
an operator is used principally or
secondarily for the promotion of a private
business, the net profits of said private
business shall be considered in relation
with the public service of such operator
for the purpose of fixing the rates.
(Emphasis ours).
xxx xxx xxx
Under the foregoing provision, the Legislature
delegated to the defunct Public Service
Commission the power of fixing the rates of public
services. Respondent LTFRB, the existing
regulatory body today, is likewise vested with the
same under Executive Order No. 202 dated June
19, 1987. Section 5(c) of the said executive order
authorizes LTFRB "to determine, prescribe,
approve and periodically review and adjust,
reasonable fares, rates and other related
charges, relative to the operation of public land
transportation services provided by motorized
vehicles."
Such delegation of legislative power to an administrative
agency is permitted in order to adapt to the increasing
complexity of modern life. As subjects for governmental
regulation multiply, so does the difficulty of administering
the laws. Hence, specialization even in legislation has
become necessary. Given the task of determining
sensitive and delicate matters as
route-fixing and rate-making for the transport sector, the
responsible regulatory body is entrusted with the power of
subordinate legislation. With this authority, an
administrative body and in this case, the LTFRB, may
implement broad policies laid down in a statute by "filling
in" the details which the Legislature may neither have time
or competence to provide. However, nowhere under the
aforesaid provisions of law are the regulatory bodies, the
PSC and LTFRB alike, authorized to delegate that power
to a common carrier, a transport operator, or other public
service.
In the case at bench, the authority given by the LTFRB to
the provincial bus operators to set a fare range over and
above the authorized existing fare, is illegal and invalid as
it is tantamount to an undue delegation of legislative
authority. Potestas delegata non delegari potest. What
has been delegated cannot be delegated. This doctrine is
based on the ethical principle that such a delegated power
constitutes not only a right but a duty to be performed by
the delegate through the instrumentality of his own
judgment and not through the intervening mind of
another.10 A further delegation of such power would
indeed constitute a negation of the duty in violation of the
trust reposed in the delegate mandated to discharge it
directly.11 The policy of allowing the provincial bus
operators to change and increase their fares at will would
result not only to a chaotic situation but to an anarchic
state of affairs. This would leave the riding public at the
mercy of transport operators who may increase fares
every hour, every day, every month or every year,
whenever it pleases them or whenever they deem it
"necessary" to do so. In Panay Autobus Co. v. Philippine
Railway Co.,12 where respondent Philippine Railway Co.
was granted by the Public Service Commission the
authority to change its freight rates at will, this Court
categorically declared that:
In our opinion, the Public Service
Commission was not authorized by law to
delegate to the Philippine Railway Co.
the power of altering its freight rates
whenever it should find it necessary to do
so in order to meet the competition of
road trucks and autobuses, or to change
its freight rates at will, or to regard its
present rates as maximum rates, and to
fix lower rates whenever in the opinion of
the Philippine Railway Co. it would be to
its advantage to do so.
The mere recital of the language of the
application of the Philippine Railway Co.
is enough to show that it is
untenable. The Legislature has
delegated to the Public Service
Commission the power of fixing the rates
of public services, but it has not
authorized the Public Service
Commission to delegate that power to a
common carrier or other public service.
The rates of public services like the
Philippine Railway Co. have been
approved or fixed by the Public Service
Commission, and any change in such
rates must be authorized or approved by
the Public Service Commission after they
have been shown to be just and
reasonable. The public service may, of
course, propose new rates, as the
Philippine Railway Co. did in case No.
31827, but it cannot lawfully make said
new rates effective without the approval
of the Public Service Commission, and
the Public Service Commission itself
cannot authorize a public service to
enforce new rates without the prior
approval of said rates by the commission.
The commission must approve new rates
when they are submitted to it, if the
evidence shows them to be just and
reasonable, otherwise it must disapprove
them. Clearly, the commission cannot
determine in advance whether or not the
new rates of the Philippine Railway Co.
will be just and reasonable, because it
does not know what those rates will be.
In the present case the Philippine
Railway Co. in effect asked for
permission to change its freight rates at
will. It may change them every day or
every hour, whenever it deems it
necessary to do so in order to meet
competition or whenever in its opinion it
would be to its advantage. Such a
procedure would create a most
unsatisfactory state of affairs and largely
defeat the purposes of the public service
law.13(Emphasis ours).
One veritable consequence of the deregulation of
transport fares is a compounded fare. If transport
operators will be authorized to impose and collect an
additional amount equivalent to 20% over and above the
authorized fare over a period of time, this will unduly
157
prejudice a commuter who will be made to pay a fare that
has been computed in a manner similar to those of
compounded bank interest rates.
Picture this situation. On December 14, 1990, the LTFRB
authorized provincial bus operators to collect a thirty-
seven (P0.37) centavo per kilometer fare for ordinary
buses. At the same time, they were allowed to impose and
collect a fare range of plus or minus 15% over the
authorized rate. Thus P0.37 centavo per kilometer
authorized fare plus P0.05 centavos (which is 15% of
P0.37 centavos) is equivalent to P0.42 centavos, the
allowed rate in 1990. Supposing the LTFRB grants
another five (P0.05) centavo increase per kilometer in
1994, then, the base or reference for computation would
have to be P0.47 centavos (which is P0.42 + P0.05
centavos). If bus operators will exercise their authority to
impose an additional 20% over and above the authorized
fare, then the fare to be collected shall amount to P0.56
(that is, P0.47 authorized LTFRB rate plus 20% of P0.47
which is P0.29). In effect, commuters will be continuously
subjected, not only to a double fare adjustment but to a
compounding fare as well. On their part, transport
operators shall enjoy a bigger chunk of the pie. Aside from
fare increase applied for, they can still collect an
additional amount by virtue of the authorized fare range.
Mathematically, the situation translates into the following:
Year** LTFRB authorized Fare Range
Fare to be
rate*** collected per
kilometer
1990 P0.37 15% (P0.05) P0.42
1994 P0.42 + 0.05 = 0.47 20% (P0.09)
P0.56
1998 P0.56 + 0.05 = 0.61 20% (P0.12)
P0.73
2002 P0.73 + 0.05 = 0.78 20% (P0.16)
P0.94
Moreover, rate making or rate fixing is not an easy task. It
is a delicate and sensitive government function that
requires dexterity of judgment and sound discretion with
the settled goal of arriving at a just and reasonable rate
acceptable to both the public utility and the public. Several
factors, in fact, have to be taken into consideration before
a balance could be achieved. A rate should not be
confiscatory as would place an operator in a situation
where he will continue to operate at a loss. Hence, the
rate should enable public utilities to generate revenues
sufficient to cover operational costs and provide
reasonable return on the investments. On the other hand,
a rate which is too high becomes discriminatory. It is
contrary to public interest. A rate, therefore, must be
reasonable and fair and must be affordable to the end
user who will utilize the services.
Given the complexity of the nature of the function of rate-
fixing and its far-reaching effects on millions of
commuters, government must not relinquish this
important function in favor of those who would benefit and
profit from the industry. Neither should the requisite notice
and hearing be done away with. The people, represented
by reputable oppositors, deserve to be given full
opportunity to be heard in their opposition to any fare
increase.
The present administrative procedure, 14 to our mind,
already mirrors an orderly and satisfactory arrangement
for all parties involved. To do away with such a procedure
and allow just one party, an interested party at that, to
determine what the rate should be, will undermine the
right of the other parties to due process. The purpose of
a hearing is precisely to determine what a just and
reasonable rate is.15 Discarding such procedural and
constitutional right is certainly inimical to our fundamental
law and to public interest.
On the presumption of public need.
A certificate of public convenience (CPC) is an
authorization granted by the LTFRB for the operation of
land transportation services for public use as required by
law. Pursuant to Section 16(a) of the Public Service Act,
as amended, the following requirements must be met
before a CPC may be granted, to wit: (i) the applicant
must be a citizen of the Philippines, or a corporation or co-
partnership, association or joint-stock company
constituted and organized under the laws of the
Philippines, at least 60 per centum of its stock or paid-up
capital must belong entirely to citizens of the Philippines;
(ii) the applicant must be financially capable of
undertaking the proposed service and meeting the
responsibilities incident to its operation; and (iii) the
applicant must prove that the operation of the public
service proposed and the authorization to do business will
promote the public interest in a proper and suitable
manner. It is understood that there must be proper notice
and hearing before the PSC can exercise its power to
issue a CPC.
While adopting in toto the foregoing requisites for the
issuance of a CPC, LTFRB Memorandum Circular No. 92-
009, Part IV, provides for yet incongruous and
contradictory policy guideline on the issuance of a CPC.
The guidelines states:
The issuance of a Certificate of Public
Convenience is determined by public
need. The presumption of public need for
a service shall be deemed in favor of the
applicant, while the burden of proving
that there is no need for the proposed
service shall be the
oppositor's. (Emphasis ours).
The above-quoted provision is entirely incompatible and
inconsistent with Section 16(c)(iii) of the Public Service
Act which requires that before a CPC will be issued, the
applicant must prove by proper notice and hearing that
the operation of the public service proposed will promote
public interest in a proper and suitable manner. On the
contrary, the policy guideline states that the presumption
of public need for a public service shall be deemed in
favor of the applicant. In case of conflict between a statute
and an administrative order, the former must prevail.
By its terms, public convenience or necessity generally
means something fitting or suited to the public need.16 As
one of the basic requirements for the grant of a CPC,
public convenience and necessity exists when the
proposed facility or service meets a reasonable want of
the public and supply a need which the existing facilities
do not adequately supply. The existence or
non-existence of public convenience and necessity is
therefore a question of fact that must be established by
evidence, real and/or testimonial; empirical data; statistics
and such other means necessary, in a public hearing
conducted for that purpose. The object and purpose of
such procedure, among other things, is to look out for, and
158
protect, the interests of both the public and the existing public need for a service in favor of the applicant for a
transport operators. certificate of public convenience and placing the burden
of proving that there is no need for the proposed service
Verily, the power of a regulatory body to issue a CPC is to the oppositor.
founded on the condition that after full-dress hearing and
investigation, it shall find, as a fact, that the proposed The Temporary Restraining Order issued on June 20,
operation is for the convenience of the public. 17 Basic 1994 is hereby MADE PERMANENT insofar as it enjoined
convenience is the primary consideration for which a CPC the bus fare rate increase granted under the provisions of
is issued, and that fact alone must be consistently borne the aforementioned administrative circulars, memoranda
in mind. Also, existing operators in subject routes must be and/or orders declared invalid.
given an opportunity to offer proof and oppose the
application. Therefore, an applicant must, at all times, be No pronouncement as to costs.
required to prove his capacity and capability to furnish the
service which he has undertaken to SO ORDERED.
render. 18 And all this will be possible only if a public
hearing were conducted for that purpose.
Padilla, Davide, Jr., Bellosillo and Quiason, JJ., concur.
Otherwise stated, the establishment of public need in
favor of an applicant reverses well-settled and
institutionalized judicial, quasi-judicial and administrative
procedures. It allows the party who initiates the
proceedings to prove, by mere application, his affirmative
allegations. Moreover, the offending provisions of the
LTFRB memorandum circular in question would in effect
amend the Rules of Court by adding another disputable
presumption in the enumeration of 37 presumptions under
Rule 131, Section 5 of the Rules of Court. Such
usurpation of this Court's authority cannot be
countenanced as only this Court is mandated by law to
promulgate rules concerning pleading, practice and
procedure. 19

Deregulation, while it may be ideal in certain situations,

may not be ideal at all in our country given the present
circumstances. Advocacy of liberalized franchising and
regulatory process is tantamount to an abdication by the
government of its inherent right to exercise police power,
that is, the right of government to regulate public utilities
for protection of the public and the utilities themselves.

While we recognize the authority of the DOTC and the

LTFRB to issue administrative orders to regulate the
transport sector, we find that they committed grave abuse
of discretion in issuing DOTC Department Order
No. 92-587 defining the policy framework on the
regulation of transport services and LTFRB Memorandum
Circular No. 92-009 promulgating the implementing
guidelines on DOTC Department Order No. 92-587, the
said administrative issuances being amendatory and
violative of the Public Service Act and the Rules of Court.
Consequently, we rule that the twenty (20%) per
centum fare increase imposed by respondent PBOAP on
March 16, 1994 without the benefit of a petition and a
public hearing is null and void and of no force and effect.
No grave abuse of discretion however was committed in
the issuance of DOTC Memorandum Order No. 90-395
and DOTC Memorandum dated October 8, 1992, the
same being merely internal communications between
administrative officers.

WHEREFORE, in view of the foregoing, the instant

petition is hereby GRANTED and the challenged
administrative issuances and orders, namely: DOTC
Department Order No. 92-587, LTFRB Memorandum
Circular
No. 92-009, and the order dated March 24, 1994 issued
by respondent LTFRB are hereby DECLARED contrary to
law and invalid insofar as they affect provisions therein (a)
delegating to provincial bus and jeepney operators the
authority to increase or decrease the duly prescribed
transportation fares; and (b) creating a presumption of

159
 The Joint Implementing Police Visibility Patrols between
the PNP NCRPO and the Philippine Marines partnership
in the conduct of visibility patrols in Metro Manila for the
suppression of crime prevention and other serious threats
to national security.

G.R. No. 141284 August 15, 2000 3. SITUATION:

Criminal incidents in Metro Manila have been perpetrated

INTEGRATED BAR OF THE PHILIPPINES, petitioner,
not only by ordinary criminals but also by organized
vs.
syndicates whose members include active and former
HON. RONALDO B. ZAMORA, GEN. PANFILO M.
LACSON, GEN. EDGAR B. AGLIPAY, and GEN. police/military personnel whose training, skill, discipline
ANGELO REYES, respondents. and firepower prove well-above the present capability of
the local police alone to handle. The deployment of a joint
PNP NCRPO-Philippine Marines in the conduct of police
DECISION visibility patrol in urban areas will reduce the incidence of
crimes specially those perpetrated by active or former
KAPUNAN, J.: police/military personnel.

At bar is a special civil action for certiorari and prohibition 4. MISSION:

with prayer for issuance of a temporary restraining order
seeking to nullify on constitutional grounds the order of The PNP NCRPO will organize a provisional Task Force
President Joseph Ejercito Estrada commanding the to conduct joint NCRPO-PM visibility patrols to keep
deployment of the Philippine Marines (the "Marines") to Metro Manila streets crime-free, through a sustained
join the Philippine National Police (the "PNP") in visibility street patrolling to minimize or eradicate all forms of high-
patrols around the metropolis. profile crimes especially those perpetrated by organized
crime syndicates whose members include those that are
In view of the alarming increase in violent crimes in Metro well-trained, disciplined and well-armed active or former
Manila, like robberies, kidnappings and carnappings, the PNP/Military personnel.
President, in a verbal directive, ordered the PNP and the
Marines to conduct joint visibility patrols for the purpose 5. CONCEPT IN JOINT VISIBILITY PATROL
of crime prevention and suppression. The Secretary of OPERATIONS:
National Defense, the Chief of Staff of the Armed Forces
of the Philippines (the "AFP"), the Chief of the PNP and
a. The visibility patrols shall be conducted jointly
the Secretary of the Interior and Local Government were
by the NCRPO [National Capital Regional Police
tasked to execute and implement the said order. In
Office] and the Philippine Marines to curb
compliance with the presidential mandate, the PNP Chief,
criminality in Metro Manila and to preserve the
through Police Chief Superintendent Edgar B. Aglipay,
internal security of the state against insurgents
formulated Letter of Instruction 02/20001 (the "LOI") which
and other serious threat to national security,
detailed the manner by which the joint visibility patrols,
although the primary responsibility over Internal
called Task Force Tulungan, would be conducted.2 Task
Security Operations still rests upon the AFP.
Force Tulungan was placed under the leadership of the
Police Chief of Metro Manila.
b. The principle of integration of efforts shall be
applied to eradicate all forms of high-profile
Subsequently, the President confirmed his previous
crimes perpetrated by organized crime
directive on the deployment of the Marines in a
syndicates operating in Metro Manila. This
Memorandum, dated 24 January 2000, addressed to the
concept requires the military and police to work
Chief of Staff of the AFP and the PNP Chief.3 In the
cohesively and unify efforts to ensure a focused,
Memorandum, the President expressed his desire to
effective and holistic approach in addressing
improve the peace and order situation in Metro Manila
crime prevention. Along this line, the role of the
through a more effective crime prevention program
military and police aside from neutralizing crime
including increased police patrols.4 The President further
syndicates is to bring a wholesome atmosphere
stated that to heighten police visibility in the metropolis,
wherein delivery of basic services to the people
augmentation from the AFP is necessary.5 Invoking his
and development is achieved. Hand-in-hand with
powers as Commander-in-Chief under Section 18, Article
this joint NCRPO-Philippine Marines visibility
VII of the Constitution, the President directed the AFP
patrols, local Police Units are responsible for the
Chief of Staff and PNP Chief to coordinate with each other
maintenance of peace and order in their locality.
for the proper deployment and utilization of the Marines to
assist the PNP in preventing or suppressing criminal or
lawless violence.6 Finally, the President declared that the c. To ensure the effective implementation of this
services of the Marines in the anti-crime campaign are project, a provisional Task Force "TULUNGAN"
merely temporary in nature and for a reasonable period shall be organized to provide the mechanism,
only, until such time when the situation shall have structure, and procedures for the integrated
improved.7 planning, coordinating, monitoring and assessing
the security situation.
The LOI explains the concept of the PNP-Philippine
Marines joint visibility patrols as follows: xxx.8

xxx The selected areas of deployment under the LOI are:

Monumento Circle, North Edsa (SM City), Araneta
2. PURPOSE: Shopping Center, Greenhills, SM Megamall, Makati
160
Commercial Center, LRT/MRT Stations and the NAIA and
Domestic Airport.9
On 17 January 2000, the Integrated Bar of the Philippines
(the "IBP") filed the instant petition to annul LOI 02/2000
and to declare the deployment of the Philippine Marines,
null and void and unconstitutional, arguing that:
I issues in the petition. Second, the President did not
THE DEPLOYMENT OF THE PHILIPPINE MARINES IN
METRO MANILA IS VIOLATIVE OF THE
CONSTITUTION, IN THAT:
A) NO EMERGENCY SITUATION OBTAINS IN
METRO MANILA AS WOULD JUSTIFY, EVEN
ONLY REMOTELY, THE DEPLOYMENT OF
SOLDIERS FOR LAW ENFORCEMENT WORK;
HENCE, SAID DEPLOYMENT IS IN
DEROGATION OF ARTICLE II, SECTION 3 OF
THE CONSTITUTION;
B) SAID DEPLOYMENT CONSTITUTES AN
INSIDIOUS INCURSION BY THE MILITARY IN
A CIVILIAN FUNCTION OF GOVERNMENT
(LAW ENFORCEMENT) IN DEROGATION OF
ARTICLE XVI, SECTION 5 (4), OF THE
CONSTITUTION;
C) SAID DEPLOYMENT CREATES A
DANGEROUS TENDENCY TO RELY ON THE
MILITARY TO PERFORM THE CIVILIAN
FUNCTIONS OF THE GOVERNMENT.
II
IN MILITARIZING LAW ENFORCEMENT IN METRO
MANILA, THE ADMINISTRATION IS UNWITTINGLY
MAKING THE MILITARY MORE POWERFUL THAN
WHAT IT SHOULD REALLY BE UNDER THE
CONSTITUTION.10
Asserting itself as the official organization of Filipino
lawyers tasked with the bounden duty to uphold the rule
of law and the Constitution, the IBP questions the validity
of the deployment and utilization of the Marines to assist
the PNP in law enforcement.
Without granting due course to the petition, the Court in a
Resolution,11 dated 25 January 2000, required the
Solicitor General to file his Comment on the petition. On
8 February 2000, the Solicitor General submitted his
Comment.
The Solicitor General vigorously defends the
constitutionality of the act of the President in deploying the
Marines, contending, among others, that petitioner has no
legal standing; that the question of deployment of the
Marines is not proper for judicial scrutiny since the same
involves a political question; that the organization and
conduct of police visibility patrols, which feature the team-
up of one police officer and one Philippine Marine soldier,
does not violate the civilian supremacy clause in the
Constitution.
The issues raised in the present petition are: (1) Whether
or not petitioner has legal standing; (2) Whether or not the
President’s factual determination of the necessity of
calling the armed forces is subject to judicial review; and,
(3) Whether or not the calling of the armed forces to assist
the PNP in joint visibility patrols violates the constitutional
provisions on civilian supremacy over the military and the
civilian character of the PNP.
The petition has no merit.
First, petitioner failed to sufficiently show that it is in
possession of the requisites of standing to raise the
commit grave abuse of discretion amounting to lack or
excess of jurisdiction nor did he commit a violation of the
civilian supremacy clause of the Constitution.
The power of judicial review is set forth in Section 1,
Article VIII of the Constitution, to wit:
Section 1. The judicial power shall be vested in one
Supreme Court and in such lower courts as may be
established by law.
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 grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of
any branch or instrumentality of the Government.
When questions of constitutional significance are raised,
the Court can exercise its power of judicial review only if
the following requisites are complied with, namely: (1) the
existence of an actual and appropriate case; (2) a
personal and substantial interest of the party raising the
constitutional question; (3) the exercise of judicial review
is pleaded at the earliest opportunity; and (4) the
constitutional question is the lis mota of the case.12
The IBP has not sufficiently complied with the requisites
of standing in this case.
"Legal standing" or locus standi has been defined as a
personal and substantial interest in the case such that the
party has sustained or will sustain direct injury as a result
of the governmental act that is being challenged.13 The
term "interest" means a material interest, an interest in
issue affected by the decree, as distinguished from mere
interest in the question involved, or a mere incidental
interest.14 The gist of the question of standing is whether
a party alleges "such personal stake in the outcome of the
controversy as to assure that concrete adverseness
which sharpens the presentation of issues upon which the
court depends for illumination of difficult constitutional
questions."15
In the case at bar, the IBP primarily anchors its standing
on its alleged responsibility to uphold the rule of law and
the Constitution. Apart from this declaration, however, the
IBP asserts no other basis in support of its locus standi.
The mere invocation by the IBP of its duty to preserve the
rule of law and nothing more, while undoubtedly true, is
not sufficient to clothe it with standing in this case. This is
too general an interest which is shared by other groups
and the whole citizenry. Based on the standards above-
stated, the IBP has failed to present a specific and
substantial interest in the resolution of the case. Its
fundamental purpose which, under Section 2, Rule 139-A
of the Rules of Court, is to elevate the standards of the
law profession and to improve the administration of justice
is alien to, and cannot be affected by the deployment of
the Marines. It should also be noted that the interest of
the National President of the IBP who signed the petition,
161
is his alone, absent a formal board resolution authorizing
him to file the present action. To be sure, members of the
BAR, those in the judiciary included, have varying
opinions on the issue. Moreover, the IBP, assuming that
it has duly authorized the National President to file the
petition, has not shown any specific injury which it has
suffered or may suffer by virtue of the questioned
governmental act. Indeed, none of its members, whom
the IBP purportedly represents, has sustained any form of
injury as a result of the operation of the joint visibility
patrols. Neither is it alleged that any of its members has
been arrested or that their civil liberties have been
violated by the deployment of the Marines. What the IBP
projects as injurious is the supposed "militarization" of law
enforcement which might threaten Philippine democratic
institutions and may cause more harm than good in the
long run. Not only is the presumed "injury" not personal in
character, it is likewise too vague, highly speculative and
uncertain to satisfy the requirement of standing. Since
petitioner has not successfully established a direct and
personal injury as a consequence of the questioned act,
it does not possess the personality to assail the validity of
the deployment of the Marines. This Court, however, does
not categorically rule that the IBP has absolutely no
standing to raise constitutional issues now or in the future.
The IBP must, by way of allegations and proof, satisfy this
Court that it has sufficient stake to obtain judicial
resolution of the controversy.
Having stated the foregoing, it must be emphasized that
this Court has the discretion to take cognizance of a suit
which does not satisfy the requirement of legal standing
when paramount interest is involved.16 In not a few cases,
the Court has adopted a liberal attitude on the locus
standi of a petitioner where the petitioner is able to craft
an issue of transcendental significance to the
people.17 Thus, when the issues raised are of paramount
importance to the public, the Court may brush aside
technicalities of procedure.18 In this case, a reading of the
petition shows that the IBP has advanced constitutional
issues which deserve the attention of this Court in view of
their seriousness, novelty and weight as precedents.
Moreover, because peace and order are under constant
threat and lawless violence occurs in increasing tempo,
undoubtedly aggravated by the Mindanao insurgency
problem, the legal controversy raised in the petition
almost certainly will not go away. It will stare us in the face
again. It, therefore, behooves the Court to relax the rules
on standing and to resolve the issue now, rather than
later.
The President did not commit grave abuse of discretion in
calling out the Marines.
In the case at bar, the bone of contention concerns the
factual determination of the President of the necessity of
calling the armed forces, particularly the Marines, to aid
the PNP in visibility patrols. In this regard, the IBP admits
that the deployment of the military personnel falls under
the Commander-in-Chief powers of the President as
stated in Section 18, Article VII of the Constitution,
specifically, the power to call out the armed forces to
prevent or suppress lawless violence, invasion or
rebellion. What the IBP questions, however, is the basis
for the calling of the Marines under the aforestated
provision. According to the IBP, no emergency exists that
would justify the need for the calling of the military to
assist the police force. It contends that no lawless
violence, invasion or rebellion exist to warrant the calling
of the Marines. Thus, the IBP prays that this Court "review
the sufficiency of the factual basis for said troop [Marine]
deployment."19
The Solicitor General, on the other hand, contends that
the issue pertaining to the necessity of calling the armed
forces is not proper for judicial scrutiny since it involves a
political question and the resolution of factual issues
which are beyond the review powers of this Court.
As framed by the parties, the underlying issues are the
scope of presidential powers and limits, and the extent of
judicial review. But, while this Court gives considerable
weight to the parties’ formulation of the issues, the
resolution of the controversy may warrant a creative
approach that goes beyond the narrow confines of the
issues raised. Thus, while the parties are in agreement
that the power exercised by the President is the power to
call out the armed forces, the Court is of the view that the
power involved may be no more than the maintenance of
peace and order and promotion of the general
welfare.20 For one, the realities on the ground do not show
that there exist a state of warfare, widespread civil unrest
or anarchy. Secondly, the full brunt of the military is not
brought upon the citizenry, a point discussed in the latter
part of this decision. In the words of the late Justice Irene
Cortes in Marcos v. Manglapus:
More particularly, this case calls for the exercise of the
President’s powers as protector of the peace.
[Rossiter, The American Presidency]. The power of the
President to keep the peace is not limited merely to
exercising the commander-in-chief powers in times of
emergency or to leading the State against external and
internal threats to its existence. The President is not only
clothed with extraordinary powers in times of emergency,
but is also tasked with attending to the day-to-day
problems of maintaining peace and order and ensuring
domestic tranquility in times when no foreign foe appears
on the horizon. Wide discretion, within the bounds of law,
in fulfilling presidential duties in times of peace is not in
any way diminished by the relative want of an emergency
specified in the commander-in-chief provision. For in
making the President commander-in-chief the
enumeration of powers that follow cannot be said to
exclude the President’s exercising as Commander-in-
Chief powers short of the calling of the armed forces, or
suspending the privilege of the writ of habeas corpus or
declaring martial law, in order to keep the peace, and
maintain public order and security.
xxx21
Nonetheless, even if it is conceded that the power
involved is the President’s power to call out the armed
forces to prevent or suppress lawless violence, invasion
or rebellion, the resolution of the controversy will reach a
similar result.
We now address the Solicitor General’s argument that the
issue involved is not susceptible to review by the judiciary
because it involves a political question, and thus, not
justiciable.
As a general proposition, a controversy is justiciable if it
refers to a matter which is appropriate for court review.22 It
pertains to issues which are inherently susceptible of
being decided on grounds recognized by law.
Nevertheless, the Court does not automatically assume
jurisdiction over actual constitutional cases brought
before it even in instances that are ripe for resolution. One
class of cases wherein the Court hesitates to rule on are
"political questions." The reason is that political questions
are concerned with issues dependent upon the wisdom,
not the legality, of a particular act or measure being
162
assailed. Moreover, the political question being a function
of the separation of powers, the courts will not normally
interfere with the workings of another co-equal branch
unless the case shows a clear need for the courts to step
in to uphold the law and the Constitution.
As Tañada v. Cuenco23 puts it, political questions refer "to
those questions which, under the Constitution, are to be
decided by the people in their sovereign capacity, or in
regard to which full discretionary authority has been
delegated to the legislative or executive branch of
government." Thus, if an issue is clearly identified by the
text of the Constitution as matters for discretionary action
by a particular branch of government or to the people
themselves then it is held to be a political question. In the
classic formulation of Justice Brennan in Baker v.
Carr,24 "[p]rominent on the surface of any case held to
involve a political question is found a textually
demonstrable constitutional commitment of the issue to a
coordinate political department; or a lack of judicially
discoverable and manageable standards for resolving it;
or the impossibility of deciding without an initial policy
determination of a kind clearly for nonjudicial discretion;
or the impossibility of a court’s undertaking independent
resolution without expressing lack of the respect due
coordinate branches of government; or an unusual need
for unquestioning adherence to a political decision
already made; or the potentiality of embarassment from
multifarious pronouncements by various departments on
the one question."
The 1987 Constitution expands the concept of judicial
review by providing that "(T)he Judicial power shall be
vested in one Supreme Court and in such lower courts as
may be established by law. Judicial power includes the
duty of the courts of justice to settle actual controversies
involving rights which are legally demandable and
enforceable, and to determine whether or not there has
been a grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of any branch or
instrumentality of the Government."25 Under this
definition, the Court cannot agree with the Solicitor
General that the issue involved is a political question
beyond the jurisdiction of this Court to review. When the
grant of power is qualified, conditional or subject to
limitations, the issue of whether the prescribed
qualifications or conditions have been met or the
limitations respected, is justiciable - the problem being
one of legality or validity, not its wisdom.26 Moreover, the
jurisdiction to delimit constitutional boundaries has been
given to this Court.27 When political questions are
involved, the Constitution limits the determination as to
whether or not there has been a grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of
the official whose action is being questioned.28
By grave abuse of discretion is meant simply capricious
or whimsical exercise of judgment that is patent and gross
as to amount to an evasion of positive duty or a virtual
refusal to perform a duty enjoined by law, or to act at all
in contemplation of law, as where the power is exercised
in an arbitrary and despotic manner by reason of passion
or hostility.29 Under this definition, a court is without power
to directly decide matters over which full discretionary
authority has been delegated. But while this Court has no
power to substitute its judgment for that of Congress or of
the President, it may look into the question of whether
such exercise has been made in grave abuse of
discretion.30A showing that plenary power is granted
either department of government, may not be an obstacle
to judicial inquiry, for the improvident exercise or abuse
thereof may give rise to justiciable controversy.31
When the President calls the armed forces to prevent or
suppress lawless violence, invasion or rebellion, he
necessarily exercises a discretionary power solely vested
in his wisdom. This is clear from the intent of the framers
and from the text of the Constitution itself. The Court,
thus, cannot be called upon to overrule the President’s
wisdom or substitute its own. However, this does not
prevent an examination of whether such power was
exercised within permissible constitutional limits or
whether it was exercised in a manner constituting grave
abuse of discretion. In view of the constitutional intent to
give the President full discretionary power to determine
the necessity of calling out the armed forces, it is
incumbent upon the petitioner to show that the President’s
decision is totally bereft of factual basis. The present
petition fails to discharge such heavy burden as there is
no evidence to support the assertion that there exist no
justification for calling out the armed forces. There is,
likewise, no evidence to support the proposition that grave
abuse was committed because the power to call was
exercised in such a manner as to violate the constitutional
provision on civilian supremacy over the military. In the
performance of this Court’s duty of "purposeful
hesitation"32 before declaring an act of another branch as
unconstitutional, only where such grave abuse of
discretion is clearly shown shall the Court interfere with
the President’s judgment. To doubt is to sustain.
There is a clear textual commitment under the
Constitution to bestow on the President full discretionary
power to call out the armed forces and to determine the
necessity for the exercise of such power. Section 18,
Article VII of the Constitution, which embodies the powers
of the President as Commander-in-Chief, provides in part:
The President shall be the Commander-in-Chief of all
armed forces of the Philippines and whenever it becomes
necessary, he may call out such armed forces to prevent
or suppress lawless violence, invasion or rebellion. In
case of invasion or rebellion, when the public safety
requires it, he may, for a period not exceeding sixty days,
suspend the privilege of the writ of habeas corpus, or
place the Philippines or any part thereof under martial law.
xxx
The full discretionary power of the President to determine
the factual basis for the exercise of the calling out power
is also implied and further reinforced in the rest of Section
18, Article VII which reads, thus:
xxx
Within forty-eight hours from the proclamation of martial
law or the suspension of the privilege of the writ of habeas
corpus, the President shall submit a report in person or in
writing to the Congress. The Congress, voting jointly, by
a vote of at least a majority of all its Members in regular
or special session, may revoke such proclamation or
suspension, which revocation shall not be set aside by the
President. Upon the initiative of the President, the
Congress may, in the same manner, extend such
proclamation or suspension for a period to be determined
by the Congress, if the invasion or rebellion shall persist
and public safety requires it.
The Congress, if not in session, shall within twenty-four
hours following such proclamation or suspension,
convene in accordance with its rules without need of a
call.
163
The Supreme Court may review, in an appropriate
proceeding filed by any citizen, the sufficiency of the
factual basis of the proclamation of martial law or the
suspension of the privilege of the writ or the extension
thereof, and must promulgate its decision thereon within
thirty days from its filing.
A state of martial law does not suspend the operation of
the Constitution, nor supplant the functioning of the civil
courts or legislative assemblies, nor authorize the
conferment of jurisdiction on military courts and agencies
over civilians where civil courts are able to function, nor
automatically suspend the privilege of the writ.
The suspension of the privilege of the writ shall apply only
to persons judicially charged for rebellion or offenses
inherent in or directly connected with invasion.
During the suspension of the privilege of the writ, any
person thus arrested or detained shall be judicially
charged within three days, otherwise he shall be released.
Under the foregoing provisions, Congress may revoke
such proclamation or suspension and the Court may
review the sufficiency of the factual basis thereof.
However, there is no such equivalent provision dealing
with the revocation or review of the President’s action to
call out the armed forces. The distinction places the
calling out power in a different category from the power to
declare martial law and the power to suspend the privilege
of the writ of habeas corpus, otherwise, the framers of the
Constitution would have simply lumped together the three
powers and provided for their revocation and review
without any qualification. Expressio unius est exclusio
alterius. Where the terms are expressly limited to certain
matters, it may not, by interpretation or construction, be
extended to other matters.33 That the intent of the
Constitution is exactly what its letter says, i.e., that the
power to call is fully discretionary to the President, is
extant in the deliberation of the Constitutional
Commission, to wit:
FR. BERNAS. It will not make any difference. I may add
that there is a graduated power of the President as
Commander-in-Chief. First, he can call out such Armed
Forces as may be necessary to suppress lawless
violence; then he can suspend the privilege of the writ
of habeas corpus, then he can impose martial law. This is
a graduated sequence.
When he judges that it is necessary to impose martial law
or suspend the privilege of the writ of habeas corpus, his
judgment is subject to review. We are making it subject to
review by the Supreme Court and subject to concurrence
by the National Assembly. But when he exercises this
lesser power of calling on the Armed Forces, when he
says it is necessary, it is my opinion that his judgment
cannot be reviewed by anybody.
xxx
FR. BERNAS. Let me just add that when we only have
imminent danger, the matter can be handled by the first
sentence: "The President may call out such armed forces
to prevent or suppress lawless violence, invasion or
rebellion." So we feel that that is sufficient for handling
imminent danger.
MR. DE LOS REYES. So actually, if a President feels that
there is imminent danger, the matter can be handled by
the First Sentence: "The President....may call out such
Armed Forces to prevent or suppress lawless violence,
invasion or rebellion." So we feel that that is sufficient for
handling imminent danger, of invasion or rebellion,
instead of imposing martial law or suspending the writ
of habeas corpus, he must necessarily have to call the
Armed Forces of the Philippines as their Commander-in-
Chief. Is that the idea?
MR. REGALADO. That does not require any concurrence
by the legislature nor is it subject to judicial review.34
The reason for the difference in the treatment of the
aforementioned powers highlights the intent to grant the
President the widest leeway and broadest discretion in
using the power to call out because it is considered as the
lesser and more benign power compared to the power to
suspend the privilege of the writ of habeas corpus and the
power to impose martial law, both of which involve the
curtailment and suppression of certain basic civil rights
and individual freedoms, and thus necessitating
safeguards by Congress and review by this Court.
Moreover, under Section 18, Article VII of the
Constitution, in the exercise of the power to suspend the
privilege of the writ of habeas corpus or to impose martial
law, two conditions must concur: (1) there must be an
actual invasion or rebellion and, (2) public safety must
require it. These conditions are not required in the case of
the power to call out the armed forces. The only criterion
is that "whenever it becomes necessary," the President
may call the armed forces "to prevent or suppress lawless
violence, invasion or rebellion." The implication is that the
President is given full discretion and wide latitude in the
exercise of the power to call as compared to the two other
powers.
If the petitioner fails, by way of proof, to support the
assertion that the President acted without factual basis,
then this Court cannot undertake an independent
investigation beyond the pleadings. The factual necessity
of calling out the armed forces is not easily quantifiable
and cannot be objectively established since matters
considered for satisfying the same is a combination of
several factors which are not always accessible to the
courts. Besides the absence of textual standards that the
court may use to judge necessity, information necessary
to arrive at such judgment might also prove
unmanageable for the courts. Certain pertinent
information might be difficult to verify, or wholly
unavailable to the courts. In many instances, the evidence
upon which the President might decide that there is a
need to call out the armed forces may be of a nature not
constituting technical proof.
On the other hand, the President as Commander-in-Chief
has a vast intelligence network to gather information,
some of which may be classified as highly confidential or
affecting the security of the state. In the exercise of the
power to call, on-the-spot decisions may be imperatively
necessary in emergency situations to avert great loss of
human lives and mass destruction of property. Indeed, the
decision to call out the military to prevent or suppress
lawless violence must be done swiftly and decisively if it
were to have any effect at all. Such a scenario is not
farfetched when we consider the present situation in
Mindanao, where the insurgency problem could spill over
the other parts of the country. The determination of the
necessity for the calling out power if subjected to
unfettered judicial scrutiny could be a veritable
prescription for disaster, as such power may be unduly
164
straitjacketed by an injunction or a temporary restraining
order every time it is exercised.
Thus, it is the unclouded intent of the Constitution to vest
upon the President, as Commander-in-Chief of the Armed
Forces, full discretion to call forth the military when in his
judgment it is necessary to do so in order to prevent or
suppress lawless violence, invasion or rebellion. Unless
the petitioner can show that the exercise of such
discretion was gravely abused, the President’s exercise
of judgment deserves to be accorded respect from this
Court.
The President has already determined the necessity and
factual basis for calling the armed forces. In his
Memorandum, he categorically asserted that, "[V]iolent
crimes like bank/store robberies, holdups, kidnappings
and carnappings continue to occur in Metro
Manila..."35 We do not doubt the veracity of the
President’s assessment of the situation, especially in the
light of present developments. The Court takes judicial
notice of the recent bombings perpetrated by lawless
elements in the shopping malls, public utilities, and other
public places. These are among the areas of deployment
described in the LOI 2000. Considering all these facts, we
hold that the President has sufficient factual basis to call
for military aid in law enforcement and in the exercise of
this constitutional power.
The deployment of the Marines does not violate the
civilian supremacy clause nor does it infringe the civilian
character of the police force.
Prescinding from its argument that no emergency
situation exists to justify the calling of the Marines, the IBP
asserts that by the deployment of the Marines, the civilian
task of law enforcement is "militarized" in violation of
Section 3, Article II36 of the Constitution.
We disagree. The deployment of the Marines does not
constitute a breach of the civilian supremacy clause. The
calling of the Marines in this case constitutes permissible
use of military assets for civilian law enforcement. The
participation of the Marines in the conduct of joint visibility
patrols is appropriately circumscribed. The limited
participation of the Marines is evident in the provisions of
the LOI itself, which sufficiently provides the metes and
bounds of the Marines’ authority. It is noteworthy that the
local police forces are the ones in charge of the visibility
patrols at all times, the real authority belonging to the
PNP. In fact, the Metro Manila Police Chief is the overall
leader of the PNP-Philippine Marines joint visibility
patrols.37 Under the LOI, the police forces are tasked to
brief or orient the soldiers on police patrol procedures.38 It
is their responsibility to direct and manage the
deployment of the Marines.39 It is, likewise, their duty to
provide the necessary equipment to the Marines and
render logistical support to these soldiers.40 In view of the
foregoing, it cannot be properly argued that military
authority is supreme over civilian authority. Moreover, the
deployment of the Marines to assist the PNP does not
unmake the civilian character of the police force. Neither
does it amount to an "insidious incursion" of the military in
the task of law enforcement in violation of Section 5(4),
Article XVI of the Constitution.41
In this regard, it is not correct to say that General Angelo
Reyes, Chief of Staff of the AFP, by his alleged
involvement in civilian law enforcement, has been virtually
appointed to a civilian post in derogation of the aforecited
provision. The real authority in these operations, as stated
in the LOI, is lodged with the head of a civilian institution,
the PNP, and not with the military. Such being the case, it
does not matter whether the AFP Chief actually
participates in the Task Force Tulungan since he does not
exercise any authority or control over the same. Since
none of the Marines was incorporated or enlisted as
members of the PNP, there can be no appointment to
civilian position to speak of. Hence, the deployment of the
Marines in the joint visibility patrols does not destroy the
civilian character of the PNP.
Considering the above circumstances, the Marines
render nothing more than assistance required in
conducting the patrols. As such, there can be no
"insidious incursion" of the military in civilian affairs nor
can there be a violation of the civilian supremacy clause
in the Constitution.
It is worth mentioning that military assistance to civilian
authorities in various forms persists in Philippine
jurisdiction. The Philippine experience reveals that it is not
averse to requesting the assistance of the military in the
implementation and execution of certain traditionally
"civil" functions. As correctly pointed out by the Solicitor
General, some of the multifarious activities wherein
military aid has been rendered, exemplifying the activities
that bring both the civilian and the military together in a
relationship of cooperation, are:
1. Elections;42
2. Administration of the Philippine National Red
Cross;43
3. Relief and rescue operations during calamities
and disasters;44
4. Amateur sports promotion and development;45
5. Development of the culture and the arts;46
6. Conservation of natural resources;47
7. Implementation of the agrarian reform
program;48
8. Enforcement of customs laws;49
9. Composite civilian-military law enforcement
activities;50
10. Conduct of licensure examinations;51
11. Conduct of nationwide tests for elementary
and high school students;52
12. Anti-drug enforcement activities;53
13. Sanitary inspections;54
14. Conduct of census work;55
15. Administration of the Civil Aeronautics
Board;56
16. Assistance in installation of weather
forecasting devices;57
165
 17. Peace and order policy formulation in local
government units.58
This unquestionably constitutes a gloss on executive
power resulting from a systematic, unbroken, executive
practice, long pursued to the knowledge of Congress and,
yet, never before questioned.59 What we have here is
mutual support and cooperation between the military and
civilian authorities, not derogation of civilian supremacy.
In the United States, where a long tradition of suspicion
and hostility towards the use of military force for domestic
purposes has persisted,60 and whose Constitution, unlike
ours, does not expressly provide for the power to call, the
use of military personnel by civilian law enforcement
officers is allowed under circumstances similar to those
surrounding the present deployment of the Philippine
Marines. Under the Posse Comitatus Act61 of the US, the
use of the military in civilian law enforcement is generally
prohibited, except in certain allowable circumstances. A
provision of the Act states:
§ 1385. Use of Army and Air Force as posse comitatus
Whoever, except in cases and under circumstances
expressly authorized by the Constitution or Act of
Congress, willfully uses any part of the Army or the Air
Force as posse comitatus or otherwise to execute the
laws shall be fined not more than $10,000 or imprisoned
not more than two years, or both.62
To determine whether there is a violation of the Posse
Comitatus Act in the use of military personnel, the US
courts63 apply the following standards, to wit:
Were Army or Air Force personnel used by the civilian law
enforcement officers at Wounded Knee in such a manner
that the military personnel subjected the citizens to the
exercise of military power which was regulatory,
proscriptive, or compulsory64 George Washington Law
Review, pp. 404-433 (1986), which discusses the four
divergent standards for assessing acceptable
involvement of military personnel in civil law
enforcement. See likewise HONORED IN THE BREECH:
PRESIDENTIAL AUTHORITY TO EXECUTE THE LAWS
WITH MILITARY FORCE, 83 Yale Law Journal, pp. 130-
152, 1973. 64 in nature, either presently or prospectively?
xxx
When this concept is transplanted into the present legal
context, we take it to mean that military involvement, even
when not expressly authorized by the Constitution or a
statute, does not violate the Posse Comitatus Act unless
it actually regulates, forbids or compels some conduct on
the part of those claiming relief.1âwphi1 A mere threat of
some future injury would be insufficient. (emphasis
supplied)
Even if the Court were to apply the above rigid standards
to the present case to determine whether there is
permissible use of the military in civilian law enforcement,
the conclusion is inevitable that no violation of the civilian
supremacy clause in the Constitution is committed. On
this point, the Court agrees with the observation of the
Solicitor General:
3. The designation of tasks in Annex A65 does not
constitute the exercise of regulatory, proscriptive, or
compulsory military power. First, the soldiers do not
control or direct the operation. This is evident from Nos.
6,66 8(k)67 and 9(a)68of Annex A. These soldiers, second,
also have no power to prohibit or condemn. In No.
9(d)69 of Annex A, all arrested persons are brought to the
nearest police stations for proper disposition. And last,
these soldiers apply no coercive force. The materials or
equipment issued to them, as shown in No. 8(c) 70 of
Annex A, are all low impact and defensive in character.
The conclusion is that there being no exercise of
regulatory, proscriptive or compulsory military power, the
deployment of a handful of Philippine Marines constitutes
no impermissible use of military power for civilian law
enforcement.71
It appears that the present petition is anchored on fear
that once the armed forces are deployed, the military will
gain ascendancy, and thus place in peril our cherished
liberties. Such apprehensions, however, are unfounded.
The power to call the armed forces is just that - calling out
the armed forces. Unless, petitioner IBP can show, which
it has not, that in the deployment of the Marines, the
President has violated the fundamental law, exceeded his
authority or jeopardized the civil liberties of the people,
this Court is not inclined to overrule the President’s
determination of the factual basis for the calling of the
Marines to prevent or suppress lawless violence.
One last point. Since the institution of the joint visibility
patrol in January, 2000, not a single citizen has
complained that his political or civil rights have been
violated as a result of the deployment of the Marines. It
was precisely to safeguard peace, tranquility and the civil
liberties of the people that the joint visibility patrol was
conceived. Freedom and democracy will be in full bloom
only when people feel secure in their homes and in the
streets, not when the shadows of violence and anarchy
constantly lurk in their midst.
WHEREFORE, premises considered, the petition is
hereby DISMISSED.
SO ORDERED.
Davide, Jr., C.J., Melo, Purisima, Pardo, Buena,
Gonzaga-Reyes, Ynares-Santiago, and De Leon, Jr.,
JJ., concur.
Bellosillo, J., on official leave.
Puno, J., see separate opinion.
Vitug, J., see separate opinion.
Mendoza, J., see concurring and dissenting opinion.
Panganiban, J., in the result.
Quisumbing, J., joins the opinion of J. Mendoza.
166

G.R. No. 131719 May 25, 2004
THE EXECUTIVE SECRETARY, THE SECRETARY OF
JUSTICE, THE SECRETARY OF LABOR AND
EMPLOYMENT, AND THE SECRETARY OF FOREIGN
AFFAIRS, OWWA PUNO, ADMINISTRATOR, and
POEA ADMINISTRATOR, petitioners,
vs.
THE HON. COURT OF APPEALS and ASIAN
RECRUITMENT COUNCIL PHILIPPINE CHAPTER
(ARCO-PHIL.), INC., representing its members:
Worldcare Services Internationale, Inc., Steadfast
International Recruitment Corporation, Dragon
International Manpower Services Corporation,
Verdant Manpower Mobilization Corporation, Brent
Overseas Personnel, Inc., ARL Manpower Services,
Inc., Dahlzhen International Services, Inc., Interworld
Placement Center, Inc., Lakas Tao Contract Services,
Ltd. Co., and SSC Multiservices, respondents.
DECISION
CALLEJO, SR., J.:
In this petition for review on certiorari, the Executive
Secretary of the President of the Philippines, the
Secretary of Justice, the Secretary of Foreign Affairs, the
Secretary of Labor and Employment, the POEA
Administrator and the OWWA Administrator, through the
Office of the Solicitor General, assail the Decision1 of the
Court of Appeals in CA-G.R. SP No. 38815 affirming the
Order2 of the Regional Trial Court of Quezon City dated
August 21, 1995 in Civil Case No. Q-95-24401, granting
the plea of the petitioners therein for a writ of preliminary
injunction and of the writ of preliminary injunction issued
by the trial court on August 24, 1995.
The Antecedents
Republic Act No. 8042, otherwise known as the Migrant
Workers and Overseas Filipinos Act of 1995, took effect
on July 15, 1995. The Omnibus Rules and Regulations
Implementing the Migrant Workers and Overseas Filipino
Act of 1995 was, thereafter, published in the April 7, 1996
issue of the Manila Bulletin. However, even before the law
took effect, the Asian Recruitment Council Philippine
Chapter, Inc. (ARCO-Phil.) filed, on July 17, 1995, a
petition for declaratory relief under Rule 63 of the Rules
of Court with the Regional Trial Court of Quezon City to
declare as unconstitutional Section 2, paragraph (g),
Section 6, paragraphs (a) to (j), (l) and (m), Section 7,
paragraphs (a) and (b), and Sections 9 and 10 of the law,
with a plea for the issuance of a temporary restraining
order and/or writ of preliminary injunction enjoining the
respondents therein from enforcing the assailed
provisions of the law.
In a supplement to its petition, the ARCO-Phil. alleged
that Rep. Act No. 8042 was self-executory and that no
implementing rules were needed. It prayed that the court
issue a temporary restraining order to enjoin the
enforcement of Section 6, paragraphs (a) to (m) on illegal
recruitment, Section 7 on penalties for illegal recruitment,
and Section 9 on venue of criminal actions for illegal
recruitments, viz:
Viewed in the light of the foregoing discussions,
there appears to be urgent an imperative need for
this Honorable Court to maintain the
status quo by enjoining the implementation or
effectivity of the questioned provisions of RA
8042, by way of a restraining order otherwise, the
member recruitment agencies of the petitioner
will suffer grave or irreparable damage or injury.
With the effectivity of RA 8042, a great majority of
the duly licensed recruitment agencies have
stopped or suspended their operations for fear of
being prosecuted under the provisions of a law
that are unjust and unconstitutional. This
Honorable Court may take judicial notice of the
fact that processing of deployment papers of
overseas workers for the past weeks have come
to a standstill at the POEA and this has affected
thousands of workers everyday just because of
the enactment of RA 8042. Indeed, this has far
reaching effects not only to survival of the
overseas manpower supply industry and the
active participating recruitment agencies, the
country’s economy which has survived mainly
due to the dollar remittances of the overseas
workers but more importantly, to the poor and the
needy who are in dire need of income-generating
jobs which can only be obtained from abroad. The
loss or injury that the recruitment agencies will
suffer will then be immeasurable and irreparable.
As of now, even foreign employers have already
reduced their manpower requirements from the
Philippines due to their knowledge that RA 8042
prejudiced and adversely affected the local
recruitment agencies.3
On August 1, 1995, the trial court issued a temporary
restraining order effective for a period of only twenty (20)
days therefrom.
After the petitioners filed their comment on the petition,
the ARCO-Phil. filed an amended petition, the
amendments consisting in the inclusion in the caption
thereof eleven (11) other corporations which it alleged
were its members and which it represented in the suit, and
a plea for a temporary restraining order enjoining the
respondents from enforcing Section 6 subsection (i),
Section 6 subsection (k) and paragraphs 15 and 16
thereof, Section 8, Section 10, paragraphs 1 and 2, and
Sections 11 and 40 of Rep. Act No. 8042.
The respondent ARCO-Phil. assailed Section 2(g) and (i),
Section 6 subsection (a) to (m), Section 7(a) to (b), and
Section 10 paragraphs (1) and (2), quoted as follows:
(g) THE STATE RECOGNIZES THAT THE
ULTIMATE PROTECTION TO ALL MIGRANT
WORKERS IS THE POSSESSION OF SKILLS.
PURSUANT TO THIS AND AS SOON AS
PRACTICABLE, THE GOVERNMENT SHALL
DEPLOY AND/OR ALLOW THE DEPLOYMENT
ONLY OF SKILLED FILIPINO WORKERS.4
Sec. 2 subsection (i, 2nd par.)
Nonetheless, the deployment of Filipino overseas
workers, whether land-based or sea-based, by
local service contractors and manning agents
employing them shall be encourages (sic).
Appropriate incentives may be extended to them.
…
167
II. ILLEGAL RECRUITMENT
SEC. 6. Definition. – For purposes of this Act,
illegal recruitment shall mean any act of
canvassing, enlisting, contracting, transporting,
utilizing, hiring, or procuring workers and includes
referring, contract services, promising or
advertising for employment abroad, whether for
profit or not, when undertaken by a non-licensee
or non-holder of authority contemplated under
Article 13(f) of Presidential Decree No. 442, as
amended, otherwise known as the Labor Code of
the Philippines: Provided, That any such non-
licensee or non-holder who, in any manner, offers
or promises for a fee employment abroad to two
or more persons shall be deemed so engaged. It
shall, likewise, include the following acts, whether
committed by any person, whether a non-
licensee, non-holder, licensee or holder of
authority:
(a) To charge or accept directly or
indirectly any amount greater than that
specified in the schedule of allowable
fees prescribed by the Secretary of Labor
and Employment, or to make a worker
pay any amount greater than that actually
received by him as a loan or advance;
(b) To furnish or publish any false notice
or information or document in relation to
recruitment or employment;
(c) To give any false notice, testimony,
information or document or commit any
act of misrepresentation for the purpose
of securing a license or authority under
the Labor Code;
(d) To induce or attempt to induce a
worker already employed to quit his
employment in order to offer him another
unless the transfer is designed to liberate
a worker from oppressive terms and
conditions of employment;
(e) To influence or attempt to influence
any person or entity not to employ any
worker who has not applied for
employment through his agency;
(f) To engage in the recruitment or
placement of workers in jobs harmful to
public health or morality or to the dignity
of the Republic of the Philippines;
(g) To obstruct or attempt to obstruct
inspection by the Secretary of Labor and
Employment or by his duly authorized
representative;
(h) To fail to submit reports on the status
of employment, placement vacancies,
remittance of foreign exchange earnings,
separation from jobs, departures and
such other matters or information as may
be required by the Secretary of Labor
and Employment;
(i) To substitute or alter to the prejudice
of the worker, employment contracts
approved and verified by the Department
of Labor and Employment from the time
of actual signing thereof by the parties up
to and including the period of the
expiration of the same without the
approval of the Department of Labor and
Employment;
(j) For an officer or agent of a recruitment
or placement agency to become an
officer or member of the Board of any
corporation engaged in travel agency or
to be engaged directly or indirectly in the
management of a travel agency;
(k) To withhold or deny travel documents
from applicant workers before departure
for monetary or financial considerations
other than those authorized under the
Labor Code and its implementing rules
and regulations;
(l) Failure to actually deploy without valid
reason as determined by the Department
of Labor and Employment; and
(m) Failure to reimburse expenses
incurred by the worker in connection with
his documentation and processing for
purposes of deployment, in cases where
the deployment does not actually take
place without the worker’s fault. Illegal
recruitment when committed by a
syndicate or in large scale shall be
considered an offense involving
economic sabotage.
Illegal recruitment is deemed committed by a
syndicate if carried out by a group of three (3) or
more persons conspiring or confederating with
one another. It is deemed committed in large
scale if committed against three (3) or more
persons individually or as a group.
The persons criminally liable for the above
offenses are the principals, accomplices and
accessories. In case of juridical persons, the
officers having control, management or direction
of their business shall be liable.
…
SEC. 7. Penalties. –
(a) Any person found guilty of illegal recruitment
shall suffer the penalty of imprisonment of not
less than six (6) years and one (1) day but not
more than twelve (12) years and a fine of not less
than two hundred thousand pesos (₱200,000.00)
nor more than five hundred thousand pesos
(₱500,000.00).
(b) The penalty of life imprisonment and a fine of
not less than five hundred thousand pesos
(₱500,000.00) nor more than one million pesos
(₱1,000,000.00) shall be imposed if illegal
recruitment constitutes economic sabotage as
defined herein.
168
Provided, however, That the maximum penalty
shall be imposed if the person illegally recruited
is less than eighteen (18) years of age or
committed by a non-licensee or non-holder of
authority.
Sec. 8.
Prohibition on Officials and Employees. – It shall
be unlawful for any official or employee of the
Department of Labor and Employment, the
Philippine Overseas Employment Administration
(POEA), or the Overseas Workers Welfare
Administration (OWWA), or the Department of
Foreign Affairs, or other government agencies
involved in the implementation of this Act, or their
relatives within the fourth civil degree of
consanguinity or affinity, to engage, directly or
indirectly, in the business of recruiting migrant
workers as defined in this Act. The penalties
provided in the immediate preceding paragraph
shall be imposed upon them. (underscoring
supplied)
… deployment of unskilled workers abroad would only
Sec. 10, pars. 1 & 2.
Money Claims. – Notwithstanding any provision
of law to the contrary, the Labor Arbiters of the
National Labor Relations Commission (NLRC)
shall have the original and exclusive jurisdiction
to hear and decide, within ninety (90) calendar
days after the filing of the complaint, the claims
arising out of an employer-employee relationship
or by virtue of any law or contract involving
Filipino workers for overseas deployment
including claims for actual, moral, exemplary and
other forms of damages.
The liability of the principal/employer and the
recruitment/placement agency for any and all
claims under this section shall be joint and
several. This provision shall be incorporated in
the contract for overseas employment and shall
be a condition precedent for its approval. The
performance bond to be filed by the
recruitment/placement agency, as provided by
law, shall be answerable for all money claims or
damages that may be awarded to the workers. If
the recruitment/placement agency is a juridical
being, the corporate officers and directors and
partners as the case may be, shall themselves be
jointly and solidarily liable with the corporation or
partnership for the aforesaid claims and
damages.
… being disproportionate to the prohibited acts, discourages
SEC. 11. Mandatory Periods for Resolution of
Illegal Recruitment Cases. – The preliminary
investigations of cases under this Act shall be
terminated within a period of thirty (30) calendar
days from the date of their filing. Where the
preliminary investigation is conducted by a
prosecution officer and a prima facie case is
established, the corresponding information shall
be filed in court within twenty-four (24) hours from
the termination of the investigation. If the
preliminary investigation is conducted by a judge
and a prima facie case is found to exist, the
corresponding information shall be filed by the
proper prosecution officer within forty-eight (48)
hours from the date of receipt of the records of
the case.
The respondent averred that the aforequoted provisions
of Rep. Act No. 8042 violate Section 1, Article III of the
Constitution.5 According to the respondent, Section 6(g)
and (i) discriminated against unskilled workers and their
families and, as such, violated the equal protection
clause, as well as Article II, Section 126 and Article XV,
Sections 17 and 3(3) of the Constitution.8 As the law
encouraged the deployment of skilled Filipino workers,
only overseas skilled workers are granted rights. The
respondent stressed that unskilled workers also have the
right to seek employment abroad. According to the
respondent, the right of unskilled workers to due process
is violated because they are prevented from finding
employment and earning a living abroad. It cannot be
argued that skilled workers are immune from abuses by
employers, while unskilled workers are merely prone to
such abuses. It was pointed out that both skilled and
unskilled workers are subjected to abuses by foreign
employers. Furthermore, the prohibition of the
encourage fly-by-night illegal recruiters.
According to the respondent, the grant of incentives to
service contractors and manning agencies to the
exclusion of all other licensed and authorized recruiters is
an invalid classification. Licensed and authorized
recruiters are thus deprived of their right to property and
due process and to the "equality of the person." It is
understandable for the law to prohibit illegal recruiters, but
to discriminate against licensed and registered recruiters
is unconstitutional.
The respondent, likewise, alleged that Section 6,
subsections (a) to (m) is unconstitutional because
licensed and authorized recruitment agencies are placed
on equal footing with illegal recruiters. It contended that
while the Labor Code distinguished between recruiters
who are holders of licenses and non-holders thereof in the
imposition of penalties, Rep. Act No. 8042 does not make
any distinction. The penalties in Section 7(a) and (b) being
based on an invalid classification are, therefore,
repugnant to the equal protection clause, besides being
excessive; hence, such penalties are violative of Section
19(1), Article III of the Constitution.9 It was also pointed
out that the penalty for officers/officials/employees of
recruitment agencies who are found guilty of economic
sabotage or large-scale illegal recruitment under Rep. Act
No. 8042 is life imprisonment. Since recruitment agencies
usually operate with a manpower of more than three
persons, such agencies are forced to shut down, lest their
officers and/or employees be charged with large scale
illegal recruitment or economic sabotage and sentenced
to life imprisonment. Thus, the penalty imposed by law,
the business of licensed and registered recruitment
agencies.
The respondent also posited that Section 6(m) and
paragraphs (15) and (16), Sections 8, 9 and 10,
paragraph 2 of the law violate Section 22, Article III of the
Constitution10 prohibiting ex-post facto laws and bills of
attainder. This is because the provisions presume that a
licensed and registered recruitment agency is guilty of
illegal recruitment involving economic sabotage, upon a
finding that it committed any of the prohibited acts under
the law. Furthermore, officials, employees and their
169
relatives are presumed guilty of illegal recruitment
involving economic sabotage upon such finding that they
committed any of the said prohibited acts.
The respondent further argued that the 90-day period in
Section 10, paragraph (1) within which a labor arbiter
should decide a money claim is relatively short, and could
deprive licensed and registered recruiters of their right to
due process. The period within which the summons and
the complaint would be served on foreign employees and,
thereafter, the filing of the answer to the complaint would
take more than 90 days. This would thereby shift on local
licensed and authorized recruiters the burden of proving
the defense of foreign employers. Furthermore, the
respondent asserted, Section 10, paragraph 2 of the law,
which provides for the joint and several liability of the
officers and employees, is a bill of attainder and a
violation of the right of the said corporate officers and
employees to due process. Considering that such
corporate officers and employees act with prior approval
of the board of directors of such corporation, they should
not be liable, jointly and severally, for such corporate acts.
The respondent asserted that the following provisions of
the law are unconstitutional:
SEC. 9. Venue. – A criminal action arising from
illegal recruitment as defined herein shall be filed
with the Regional Trial Court of the province or
city where the offense was committed or where
the offended party actually resides at the time of
the commission of the offense: Provided, That the
court where the criminal action is first filed shall
acquire jurisdiction to the exclusion of other
courts: Provided, however, That the aforestated
provisions shall also apply to those criminal
actions that have already been filed in court at the
time of the effectivity of this Act.
… Section 9; Section 10; pars. 1 & 2; Section 11;
SEC. 10. Money Claims. – Notwithstanding any
provision of law to the contrary, the Labor Arbiters
of the National Labor Relations Commission
(NLRC) shall have the original and exclusive
jurisdiction to hear and decide, within ninety (90)
calendar days after the filing of the complaint, the
claims arising out of an employer-employee
relationship or by virtue of any law or contract
involving Filipino workers for overseas
deployment including claims for actual, moral,
exemplary and other forms of damages.
Sec. 40.
The departments and agencies charged with
carrying out the provisions of this Act shall, within
ninety (90) days after the effectiviy of this Act,
formulate the necessary rules and regulations for
its effective implementation.
According to the respondent, the said provisions violate
Section 5(5), Article VIII of the Constitution11 because
they impair the power of the Supreme Court to promulgate
rules of procedure.
In their answer to the petition, the petitioners alleged, inter
alia, that (a) the respondent has no cause of action for a
declaratory relief; (b) the petition was premature as the
rules implementing Rep. Act No. 8042 not having been
released as yet; (c) the assailed provisions do not violate
any provisions of the Constitution; and, (d) the law was
approved by Congress in the exercise of the police power
of the State. In opposition to the respondent’s plea for
injunctive relief, the petitioners averred that:
As earlier shown, the amended petition for declaratory
relief is devoid of merit for failure of petitioner to
demonstrate convincingly that the assailed law is
unconstitutional, apart from the defect and impropriety of
the petition. One who attacks a statute, alleging
unconstitutionality must prove its invalidity beyond
reasonable doubt (Caleon v. Agus Development
Corporation, 207 SCRA 748). All reasonable doubts
should be resolved in favor of the constitutionality of a
statute (People v. Vera, 65 Phil. 56). This presumption of
constitutionality is based on the doctrine of separation of
powers which enjoin upon each department a becoming
respect for the acts of the other departments (Garcia vs.
Executive Secretary, 204 SCRA 516 [1991]). Necessarily,
the ancillary remedy of a temporary restraining order
and/or a writ of preliminary injunction prayed for must fall.
Besides, an act of legislature approved by the executive
is presumed to be within constitutional bounds (National
Press Club v. Commission on Elections, 207 SCRA 1).12
After the respective counsels of the parties were heard on
oral arguments, the trial court issued on August 21, 1995,
an order granting the petitioner’s plea for a writ of
preliminary injunction upon a bond of ₱50,000. The
petitioner posted the requisite bond and on August 24,
1995, the trial court issued a writ of preliminary injunction
enjoining the enforcement of the following provisions of
Rep. Act No. 8042 pending the termination of the
proceedings:
… Section 2, subsections (g) and (i, 2nd par.);
Section 6, subsections (a) to (m), and pars. 15 &
16; Section 7, subsections (a) & (b); Section 8;
and Section 40 of Republic Act No. 8042,
otherwise known as the Migrant Workers and
Overseas Filipinos Act of 1995. …13
The petitioners filed a petition for certiorari with the Court
of Appeals assailing the order and the writ of preliminary
injunction issued by the trial court on the following
grounds:
1. Respondent ARCO-PHIL. had utterly failed to
show its clear right/s or that of its member-
agencies to be protected by the injunctive relief
and/or violation of said rights by the enforcement
of the assailed sections of R.A. 8042;
2. Respondent Judge fixed a ₱50,000 injunction
bond which is grossly inadequate to answer for
the damage which petitioner-officials may
sustain, should respondent ARCO-PHIL. be
finally adjudged as not being entitled thereto.14
The petitioners asserted that the respondent is not the
real party-in-interest as petitioner in the trial court. It is
inconceivable how the respondent, a non-stock and non-
profit corporation, could sustain direct injury as a result of
the enforcement of the law. They argued that if, at all, any
damage would result in the implementation of the law, it
is the licensed and registered recruitment agencies and/or
the unskilled Filipino migrant workers discriminated
against who would sustain the said injury or damage, not
the respondent. The respondent, as petitioner in the trial
170
court, was burdened to adduce preponderant evidence of
such irreparable injury, but failed to do so. The petitioners
further insisted that the petition a quo was premature
since the rules and regulations implementing the law had
yet to be promulgated when such petition was filed.
Finally, the petitioners averred that the respondent failed
to establish the requisites for the issuance of a writ of
preliminary injunction against the enforcement of the law
and the rules and regulations issued implementing the
same.
On December 5, 1997, the appellate court came out with
a four-page decision dismissing the petition and affirming
the assailed order and writ of preliminary injunction issued
by the trial court. The appellate court, likewise, denied the
petitioners’ motion for reconsideration of the said
decision.
The petitioners now come to this Court in a petition for
review on certiorari on the following grounds:
1. Private respondent ARCO-PHIL. had utterly
failed to show its clear right/s or that of its
member-agencies to be protected by the
injunctive relief and/or violation of said rights by
the enforcement of the assailed sections of R.A.
8042;
2. The ₱50,000 injunction bond fixed by the court
a quo and sustained by the Court of Appeals is
grossly inadequate to answer for the damage
which petitioners-officials may sustain, should
private respondent ARCO-PHIL. be finally
adjudged as not being entitled thereto.15
On February 16, 1998, this Court issued a temporary
restraining order enjoining the respondents from
enforcing the assailed order and writ of preliminary
injunction.
The Issues
The core issue in this case is whether or not the trial court
committed grave abuse of its discretion amounting to
excess or lack of jurisdiction in issuing the assailed order
and the writ of preliminary injunction on a bond of only
₱50,000 and whether or not the appellate court erred in
affirming the trial court’s order and the writ of preliminary
injunction issued by it.
The petitioners contend that the respondent has no locus
standi. It is a non-stock, non-profit organization; hence,
not the real party-in-interest as petitioner in the action.
Although the respondent filed the petition in the Regional
Trial Court in behalf of licensed and registered recruitment
agencies, it failed to adduce in evidence a certified copy
of its Articles of Incorporation and the resolutions of the
said members authorizing it to represent the said
agencies in the proceedings. Neither is the suit of the
respondent a class suit so as to vest in it a personality to
assail Rep. Act No. 8042; the respondent is service-
oriented while the recruitment agencies it purports to
represent are profit-oriented. The petitioners assert that
the law is presumed constitutional and, as such, the
respondent was burdened to make a case strong enough
to overcome such presumption and establish a clear right
to injunctive relief.
The petitioners bewail the ₱50,000 bond fixed by the trial
court for the issuance of a writ of preliminary injunction
and affirmed by the appellate court. They assert that the
amount is grossly inadequate to answer for any damages
that the general public may suffer by reason of the non-
enforcement of the assailed provisions of the law. The trial
court committed a grave abuse of its discretion in granting
the respondent’s plea for injunctive relief, and the
appellate court erred in affirming the order and the writ of
preliminary injunction issued by the trial court.
The respondent, for its part, asserts that it has duly
established its locus standi and its right to injunctive relief
as gleaned from its pleadings and the appendages
thereto. Under Section 5, Rule 58 of the Rules of Court, it
was incumbent on the petitioners, as respondents in the
RTC, to show cause why no injunction should issue. It
avers that the injunction bond posted by the respondent
was more than adequate to answer for any injury or
damage the petitioners may suffer, if any, by reason of the
writ of preliminary injunction issued by the RTC. In any
event, the assailed provisions of Rep. Act No. 8042
exposed its members to the immediate and irreparable
damage of being deprived of their right to a livelihood
without due process, a property right protected under the
Constitution.
The respondent contends that the commendable purpose
of the law to eradicate illegal recruiters should not be done
at the expense and to the prejudice of licensed and
authorized recruitment agencies. The writ of preliminary
injunction was necessitated by the great number of duly
licensed recruitment agencies that had stopped or
suspended their business operations for fear that their
officers and employees would be indicted and prosecuted
under the assailed oppressive penal provisions of the law,
and meted excessive penalties. The respondent, likewise,
urges that the Court should take judicial notice that the
processing of deployment papers of overseas workers
have come to a virtual standstill at the POEA.
The Court’s Ruling
The petition is meritorious.
The Respondent Has Locus Standi
To File the Petition in the RTC in Representation of the
Eleven Licensed and Registered Recruitment Agencies
Impleaded in the Amended Petition
The modern view is that an association has standing to
complain of injuries to its members. This view fuses the
legal identity of an association with that of its
members.16 An association has standing to file suit for its
workers despite its lack of direct interest if its members
are affected by the action. An organization has standing
to assert the concerns of its constituents.17
In Telecommunications and Broadcast Attorneys of the
Philippines v. Commission on Elections,18 we held that
standing jus tertii would be recognized only if it can be
shown that the party suing has some substantial relation
to the third party, or that the right of the third party would
be diluted unless the party in court is allowed to espouse
the third party’s constitutional claims.
In this case, the respondent filed the petition for
declaratory relief under Rule 64 of the Rules of Court for
and in behalf of its eleven (11) licensed and registered
recruitment agencies which are its members, and which
approved separate resolutions expressly authorizing the
171
respondent to file the said suit for and in their behalf. We
note that, under its Articles of Incorporation, the
respondent was organized for the purposes inter alia of
promoting and supporting the growth and development of
the manpower recruitment industry, both in the local and
international levels; providing, creating and exploring
employment opportunities for the exclusive benefit of its
general membership; enhancing and promoting the
general welfare and protection of Filipino workers; and, to
act as the representative of any individual, company,
entity or association on matters related to the manpower
recruitment industry, and to perform other acts and
activities necessary to accomplish the purposes
embodied therein. The respondent is, thus, the
appropriate party to assert the rights of its members,
because it and its members are in every practical sense
identical. The respondent asserts that the assailed
provisions violate the constitutional rights of its members
and the officers and employees thereof. The respondent
is but the medium through which its individual members
seek to make more effective the expression of their voices
and the redress of their grievances.19
However, the respondent has no locus standi to file the
petition for and in behalf of unskilled workers. We note
that it even failed to implead any unskilled workers in its
petition. Furthermore, in failing to implead, as parties-
petitioners, the eleven licensed and registered
recruitment agencies it claimed to represent, the
respondent failed to comply with Section 2 of Rule 6320 of
the Rules of Court. Nevertheless, since the eleven
licensed and registered recruitment agencies for which
the respondent filed the suit are specifically named in the
petition, the amended petition is deemed amended to
avoid multiplicity of suits.21
The Assailed Order and Writ of
Preliminary Injunction Is Mooted
By Case Law
The respondent justified its plea for injunctive relief on the
allegation in its amended petition that its members are
exposed to the immediate and irreparable danger of being
deprived of their right to a livelihood and other
constitutional rights without due process, on its claim that
a great number of duly licensed recruitment agencies
have stopped or suspended their operations for fear that
(a) their officers and employees would be prosecuted
under the unjust and unconstitutional penal provisions of
Rep. Act No. 8042 and meted equally unjust and
excessive penalties, including life imprisonment, for illegal
recruitment and large scale illegal recruitment without
regard to whether the recruitment agencies involved are
licensed and/or authorized; and, (b) if the members of the
respondent, which are licensed and authorized, decide to
continue with their businesses, they face the stigma and
the curse of being labeled "illegal recruiters." In granting
the respondent’s plea for a writ of preliminary injunction,
the trial court held, without stating the factual and legal
basis therefor, that the enforcement of Rep. Act No. 8042,
pendente lite, would cause grave and irreparable injury to
the respondent until the case is decided on its merits.
We note, however, that since Rep. Act No. 8042 took
effect on July 15, 1995, the Court had, in a catena of
cases, applied the penal provisions in Section 6, including
paragraph (m) thereof, and the last two paragraphs
therein defining large scale illegal recruitment committed
by officers and/or employees of recruitment agencies by
themselves and in connivance with private individuals,
and imposed the penalties provided in Section 7 thereof,
including the penalty of life imprisonment.22 The
Informations therein were filed after preliminary
investigations as provided for in Section 11 of Rep. Act
No. 8042 and in venues as provided for in Section 9 of the
said act. In People v. Chowdury,23 we held that illegal
recruitment is a crime of economic sabotage and must be
enforced.
In People v. Diaz,24 we held that Rep. Act No. 8042 is but
an amendment of the Labor Code of the Philippines and
is not an ex-post facto law because it is not applied
retroactively. In JMM Promotion and Management, Inc. v.
Court of Appeals,25 the issue of the extent of the police
power of the State to regulate a business, profession or
calling vis-à-vis the equal protection clause and the non-
impairment clause of the Constitution were raised and we
held, thus:
A profession, trade or calling is a property right
within the meaning of our constitutional
guarantees. One cannot be deprived of the right
to work and the right to make a living because
these rights are property rights, the arbitrary and
unwarranted deprivation of which normally
constitutes an actionable wrong.
Nevertheless, no right is absolute, and the proper
regulation of a profession, calling, business or
trade has always been upheld as a legitimate
subject of a valid exercise of the police power by
the state particularly when their conduct affects
either the execution of legitimate governmental
functions, the preservation of the State, the public
health and welfare and public morals. According
to the maxim, sic utere tuo ut alienum non laedas,
it must of course be within the legitimate range of
legislative action to define the mode and manner
in which every one may so use his own property
so as not to pose injury to himself or others.
In any case, where the liberty curtailed affects at
most the rights of property, the permissible scope
of regulatory measures is certainly much wider.
To pretend that licensing or accreditation
requirements violates the due process clause is
to ignore the settled practice, under the mantle of
the police power, of regulating entry to the
practice of various trades or professions.
Professionals leaving for abroad are required to
pass rigid written and practical exams before they
are deemed fit to practice their trade. Seamen are
required to take tests determining their
seamanship. Locally, the Professional Regulation
Commission has begun to require previously
licensed doctors and other professionals to
furnish documentary proof that they had either re-
trained or had undertaken continuing education
courses as a requirement for renewal of their
licenses. It is not claimed that these requirements
pose an unwarranted deprivation of a property
right under the due process clause. So long as
professionals and other workers meet reasonable
regulatory standards no such deprivation exists.
Finally, it is a futile gesture on the part of
petitioners to invoke the non-impairment clause
of the Constitution to support their argument that
the government cannot enact the assailed
regulatory measures because they abridge the
172
 freedom to contract. In Philippine Association of
Service Exporters, Inc. vs. Drilon, we held that
"[t]he non-impairment clause of the Constitution
… must yield to the loftier purposes targeted by
the government." Equally important, into every
contract is read provisions of existing law, and
always, a reservation of the police power for so
long as the agreement deals with a subject
impressed with the public welfare.
A last point. Petitioners suggest that the singling
out of entertainers and performing artists under
the assailed department orders constitutes class
legislation which violates the equal protection
clause of the Constitution. We do not agree.
The equal protection clause is directed principally
against undue favor and individual or class
privilege. It is not intended to prohibit legislation
which is limited to the object to which it is directed
or by the territory in which it is to operate. It does
not require absolute equality, but merely that all
persons be treated alike under like conditions
both as to privileges conferred and liabilities
imposed. We have held, time and again, that the
equal protection clause of the Constitution does
not forbid classification for so long as such
classification is based on real and substantial
differences having a reasonable relation to the
subject of the particular legislation. If
classification is germane to the purpose of the
law, concerns all members of the class, and
applies equally to present and future conditions,
the classification does not violate the equal
protection guarantee.26
The validity of Section 6 of R.A. No. 8042 which provides
that employees of recruitment agencies may be criminally
liable for illegal recruitment has been upheld in People v.
Chowdury:27
As stated in the first sentence of Section 6 of RA
8042, the persons who may be held liable for
illegal recruitment are the principals, accomplices
and accessories. An employee of a company or
corporation engaged in illegal recruitment may be
held liable as principal, together with his
employer, if it is shown that he actively and
consciously participated in illegal recruitment. It
has been held that the existence of the corporate
entity does not shield from prosecution the
corporate agent who knowingly and intentionally
causes the corporation to commit a crime. The
corporation obviously acts, and can act, only by
and through its human agents, and it is their
conduct which the law must deter. The employee
or agent of a corporation engaged in unlawful
business naturally aids and abets in the carrying
on of such business and will be prosecuted as
principal if, with knowledge of the business, its
purpose and effect, he consciously contributes
his efforts to its conduct and promotion, however
slight his contribution may be. …28
By its rulings, the Court thereby affirmed the validity of the
assailed penal and procedural provisions of Rep. Act No.
8042, including the imposable penalties therefor. Until the
Court, by final judgment, declares that the said provisions
are unconstitutional, the enforcement of the said
provisions cannot be enjoined.
The RTC Committed Grave Abuse of Its Discretion
Amounting to Excess or Lack of Jurisdiction in Issuing the
Assailed Order and the Writ of Preliminary Injunction
The matter of whether to issue a writ of preliminary
injunction or not is addressed to the sound discretion of
the trial court. However, if the court commits grave abuse
of its discretion in issuing the said writ amounting to
excess or lack of jurisdiction, the same may be nullified
via a writ of certiorari and prohibition.
In Social Security Commission v. Judge Bayona,29 we
ruled that a law is presumed constitutional until otherwise
declared by judicial interpretation. The suspension of the
operation of the law is a matter of extreme delicacy
because it is an interference with the official acts not only
of the duly elected representatives of the people but also
of the highest magistrate of the land.
In Younger v. Harris, Jr.,30 the Supreme Court of the
United States emphasized, thus:
Federal injunctions against state criminal
statutes, either in their entirety or with respect to
their separate and distinct prohibitions, are not to
be granted as a matter of course, even if such
statutes are unconstitutional. No citizen or
member of the community is immune from
prosecution, in good faith, for his alleged criminal
acts. The imminence of such a prosecution even
though alleged to be unauthorized and, hence,
unlawful is not alone ground for relief in equity
which exerts its extraordinary powers only to
prevent irreparable injury to the plaintiff who
seeks its aid. 752 Beal v. Missouri Pacific
Railroad Corp., 312 U.S. 45, 49, 61 S.Ct. 418,
420, 85 L.Ed. 577.
And similarly, in Douglas, supra, we made clear, after
reaffirming this rule, that:
"It does not appear from the record that
petitioners have been threatened with any injury
other than that incidental to every criminal
proceeding brought lawfully and in good faith …"
319 U.S., at 164, 63 S.Ct., at 881.31
The possible unconstitutionality of a statute, on its face,
does not of itself justify an injunction against good faith
attempts to enforce it, unless there is a showing of bad
faith, harassment, or any other unusual circumstance that
would call for equitable relief.32 The "on its face"
invalidation of statutes has been described as "manifestly
strong medicine," to be employed "sparingly and only as
a last resort," and is generally disfavored.33
To be entitled to a preliminary injunction to enjoin the
enforcement of a law assailed to be unconstitutional, the
party must establish that it will suffer irreparable harm in
the absence of injunctive relief and must demonstrate that
it is likely to succeed on the merits, or that there are
sufficiently serious questions going to the merits and the
balance of hardships tips decidedly in its favor. 34 The
higher standard reflects judicial deference toward
"legislation or regulations developed through
presumptively reasoned democratic processes."
Moreover, an injunction will alter, rather than maintain, the
status quo, or will provide the movant with substantially all
the relief sought and that relief cannot be undone even if
the defendant prevails at a trial on the
merits.35 Considering that injunction is an exercise of
173
equitable relief and authority, in assessing whether to
issue a preliminary injunction, the courts must sensitively
assess all the equities of the situation, including the public
interest.36 In litigations between governmental and private
parties, courts go much further both to give and withhold
relief in furtherance of public interest than they are
accustomed to go when only private interests are
involved.37 Before the plaintiff may be entitled to injunction
against future enforcement, he is burdened to show some
substantial hardship.38
The fear or chilling-effect of the assailed penal provisions
of the law on the members of the respondent does not by
itself justify prohibiting the State from enforcing them
against those whom the State believes in good faith to be
punishable under the laws:
… Just as the incidental "chilling effect" of such
statutes does not automatically render them
unconstitutional, so the chilling effect that
admittedly can result from the very existence of
certain laws on the statute books does not in itself
justify prohibiting the State from carrying out the
important and necessary task of enforcing these
laws against socially harmful conduct that the
State believes in good faith to be punishable
under its laws and the Constitution.39
It must be borne in mind that subject to constitutional
limitations, Congress is empowered to define what acts or
omissions shall constitute a crime and to prescribe
punishments therefor.40 The power is inherent in
Congress and is part of the sovereign power of the State
to maintain peace and order. Whatever views may be
entertained regarding the severity of punishment, whether
one believes in its efficiency or its futility, these are
peculiarly questions of legislative policy.41 The
comparative gravity of crimes and whether their
consequences are more or less injurious are matters for
the State and Congress itself to
determine.42 Specification of penalties involves questions
of legislative policy.43
Due process prohibits criminal stability from shifting the
burden of proof to the accused, punishing wholly passive
conduct, defining crimes in vague or overbroad language
and failing to grant fair warning of illegal conduct.44 Class
legislation is such legislation which denies rights to one
which are accorded to others, or inflicts upon one
individual a more severe penalty than is imposed upon
another in like case offending.45 Bills of attainder are
legislative acts which inflict punishment on individuals or
members of a particular group without a judicial trial.
Essential to a bill of attainder are a specification of certain
individuals or a group of individuals, the imposition of a
punishment, penal or otherwise, and the lack of judicial
trial.46
Penalizing unlicensed and licensed recruitment agencies
and their officers and employees and their relatives
employed in government agencies charged with the
enforcement of the law for illegal recruitment and
imposing life imprisonment for those who commit large
scale illegal recruitment is not offensive to the
Constitution. The accused may be convicted of illegal
recruitment and large scale illegal recruitment only if, after
trial, the prosecution is able to prove all the elements of
the crime charged.47
The possibility that the officers and employees of the
recruitment agencies, which are members of the
respondent, and their relatives who are employed in the
government agencies charged in the enforcement of the
law, would be indicted for illegal recruitment and, if
convicted sentenced to life imprisonment for large scale
illegal recruitment, absent proof of irreparable injury, is not
sufficient on which to base the issuance of a writ of
preliminary injunction to suspend the enforcement of the
penal provisions of Rep. Act No. 8042 and avert any
indictments under the law.48The normal course of criminal
prosecutions cannot be blocked on the basis of
allegations which amount to speculations about the
future.49
There is no allegation in the amended petition or evidence
adduced by the respondent that the officers and/or
employees of its members had been threatened with any
indictments for violations of the penal provisions of Rep.
Act No. 8042. Neither is there any allegation therein that
any of its members and/or their officers and employees
committed any of the acts enumerated in Section 6(a) to
(m) of the law for which they could be indicted. Neither did
the respondent adduce any evidence in the RTC that any
or all of its members or a great number of other duly
licensed and registered recruitment agencies had to stop
their business operations because of fear of indictments
under Sections 6 and 7 of Rep. Act No. 8042. The
respondent merely speculated and surmised that licensed
and registered recruitment agencies would close shop
and stop business operations because of the assailed
penal provisions of the law. A writ of preliminary injunction
to enjoin the enforcement of penal laws cannot be based
on such conjectures or speculations. The Court cannot
take judicial notice that the processing of deployment
papers of overseas workers have come to a virtual
standstill at the POEA because of the assailed provisions
of Rep. Act No. 8042. The respondent must adduce
evidence to prove its allegation, and the petitioners
accorded a chance to adduce controverting evidence.
The respondent even failed to adduce any evidence to
prove irreparable injury because of the enforcement of
Section 10(1)(2) of Rep. Act No. 8042. Its fear or
apprehension that, because of time constraints, its
members would have to defend foreign employees in
cases before the Labor Arbiter is based on speculations.
Even if true, such inconvenience or difficulty is hardly
irreparable injury.
The trial court even ignored the public interest involved in
suspending the enforcement of Rep. Act No. 8042 vis-à-
vis the eleven licensed and registered recruitment
agencies represented by the respondent. In People v.
Gamboa,50we emphasized the primary aim of Rep. Act
No. 8042:
Preliminarily, the proliferation of illegal job
recruiters and syndicates preying on innocent
people anxious to obtain employment abroad is
one of the primary considerations that led to the
enactment of The Migrant Workers and Overseas
Filipinos Act of 1995. Aimed at affording greater
protection to overseas Filipino workers, it is a
significant improvement on existing laws in the
recruitment and placement of workers for
overseas employment. Otherwise known as the
Magna Carta of OFWs, it broadened the concept
of illegal recruitment under the Labor Code and
provided stiffer penalties thereto, especially those
that constitute economic sabotage, i.e., Illegal
Recruitment in Large Scale and Illegal
Recruitment Committed by a Syndicate.51
174
By issuing the writ of preliminary injunction against the
petitioners sans any evidence, the trial court frustrated,
albeit temporarily, the prosecution of illegal recruiters and
allowed them to continue victimizing hapless and innocent
people desiring to obtain employment abroad as overseas
workers, and blocked the attainment of the salutary
policies52 embedded in Rep. Act No. 8042. It bears
stressing that overseas workers, land-based and sea-
based, had been remitting to the Philippines billions of
dollars which over the years had propped the economy.

In issuing the writ of preliminary injunction, the trial court

considered paramount the interests of the eleven licensed
and registered recruitment agencies represented by the
respondent, and capriciously overturned the presumption
of the constitutionality of the assailed provisions on the
barefaced claim of the respondent that the assailed
provisions of Rep. Act No. 8042 are unconstitutional. The
trial court committed a grave abuse of its discretion
amounting to excess or lack of jurisdiction in issuing the
assailed order and writ of preliminary injunction. It is for
this reason that the Court issued a temporary restraining
order enjoining the enforcement of the writ of preliminary
injunction issued by the trial court.

IN LIGHT OF ALL THE FOREGOING, the petition

is GRANTED. The assailed decision of the appellate
court is REVERSED AND SET ASIDE. The Order of the
Regional Trial Court dated August 21, 1995 in Civil Case
No. Q-95-24401 and the Writ of Preliminary Injunction
issued by it in the said case on August 24, 1995
are NULLIFIED. No costs.

SO ORDERED.

Puno*, Quisumbing**, Austria-Martinez, and Tinga,

JJ., concur.

175
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 113375 May 5, 1994
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, FELIPE L. GOZON, RAFAEL G.
FERNANDO, RAOUL V. VICTORINO, JOSE
CUNANAN, QUINTIN S. DOROMAL, SEN. FREDDIE
WEBB, SEN. WIGBERTO TAÑADA, and REP. JOKER
P. ARROYO, petitioners,
vs.
TEOFISTO GUINGONA, JR., in his capacity as
Executive Secretary, Office of the President;
RENATO CORONA, in his capacity as Assistant
Executive Secretary and Chairman of the
Presidential review Committee on the Lotto, Office of
the President; PHILIPPINE CHARITY SWEEPSTAKES
OFFICE; and PHILIPPINE GAMING MANAGEMENT
CORPORATION, respondents.
Jovito R. Salonga, Fernando Santiago, Emilio C.
Capulong, Jr. and Felipe L. Gozon for petitioners.
Renato L. Cayetano and Eleazar B. Reyes for PGMC.
Gamaliel G. Bongco, Oscar Karaan and Jedideoh
Sincero for intervenors.
DAVIDE, JR., J.:
This is a special civil action for prohibition and injunction,
with a prayer for a temporary restraining order and
preliminary injunction, which seeks to prohibit and restrain
the implementation of the "Contract of Lease" executed
by the Philippine Charity Sweepstakes Office (PCSO) and
the Philippine Gaming Management Corporation (PGMC)
in connection with the on- line lottery system, also known
as "lotto."
Petitioner Kilosbayan, Incorporated (KILOSBAYAN)
avers that it is a non-stock domestic corporation
composed of civic-spirited citizens, pastors, priests, nuns,
and lay leaders who are committed to the cause of truth,
justice, and national renewal. The rest of the petitioners,
except Senators Freddie Webb and Wigberto Tañada and
Representative Joker P. Arroyo, are suing in their
capacities as members of the Board of Trustees of
KILOSBAYAN and as taxpayers and concerned citizens.
Senators Webb and Tañada and Representative Arroyo
are suing in their capacities as members of Congress and
as taxpayers and concerned citizens of the Philippines.
The pleadings of the parties disclose the factual
antecedents which triggered off the filing of this petition.
Pursuant to Section 1 of the charter of the PCSO (R.A.
No. 1169, as amended by B.P. Blg. 42) which grants it the
authority to hold and conduct "charity sweepstakes races,
lotteries and other similar activities," the PCSO decided to
establish an on- line lottery system for the purpose of
increasing its revenue base and diversifying its sources of
funds. Sometime before March 1993, after learning that
the PCSO was interested in operating an on-line lottery
system, the Berjaya Group Berhad, "a multinational
company and one of the ten largest public companies in
Malaysia," long "engaged in, among others, successful
lottery operations in Asia, running both Lotto and Digit
games, thru its subsidiary, Sports Toto Malaysia," with its
"affiliate, the International Totalizator Systems, Inc., . . .
an American public company engaged in the international
sale or provision of computer systems, softwares,
terminals, training and other technical services to the
gaming industry," "became interested to offer its services
and resources to PCSO." As an initial step, Berjaya Group
Berhad (through its individual nominees) organized with
some Filipino investors in March 1993 a Philippine
corporation known as the Philippine Gaming
Management Corporation (PGMC), which "was intended
to be the medium through which the technical and
management services required for the project would be
offered and delivered to PCSO." 1
Before August 1993, the PCSO formally issued a Request
for Proposal (RFP) for the Lease Contract of an on-line
lottery system for the PCSO. 2 Relevant provisions of the
RFP are the following:
1. EXECUTIVE SUMMARY
xxx xxx xxx
1.2. PCSO is seeking a suitable
contractor which shall build, at its own
expense, all the facilities ('Facilities')
needed to operate and maintain a
nationwide on-line lottery system. PCSO
shall lease the Facilities for a fixed
percentage ofquarterly gross receipts. All
receipts from ticket sales shall be turned
over directly to PCSO. All capital,
operating expenses and expansion
expenses and risks shall be for the
exclusive account of the Lessor.
xxx xxx xxx
1.4. The lease shall be for a period not
exceeding fifteen (15) years.
1.5. The Lessor is expected to submit a
comprehensive nationwide lottery
development plan ("Development Plan")
which will include the game, the
marketing of the games, and the logistics
to introduce the games to all the cities
and municipalities of the country within
five (5) years.
xxx xxx xxx
1.7. The Lessor shall be selected based
on its technical expertise, hardware and
software capability, maintenance
support, and financial resources. The
Development Plan shall have a
substantial bearing on the choice of the
Lessor. The Lessor shall be a domestic
corporation, with at least sixty percent
(60%) of its shares owned by Filipino
shareholders.
xxx xxx xxx
The Office of the President, the National
Disaster Control Coordinating Council,
the Philippine National Police, and the
National Bureau of Investigation shall be
authorized to use the nationwide
176
telecommunications system of the
Facilities Free of Charge.
1.8. Upon expiration of the lease, the
Facilities shall be owned by PCSO
without any additional consideration. 3
xxx xxx xxx
2.2. OBJECTIVES
The objectives of PCSO in leasing the
Facilities from a private entity are as
follows:
xxx xxx xxx
2.2.2. Enable PCSO to operate a
nationwide on-line Lottery system at no
expense or risk to the government.
xxx xxx xxx
2.4. DUTIES AND RESPONSIBILITIES
OF THE LESSOR
xxx xxx xxx
2.4.2. THE LESSOR
The Proponent is expected to furnish and
maintain the Facilities, including the
personnel needed to operate the
computers, the communications network
and sales offices under a build-lease
basis. The printing of tickets shall be
undertaken under the supervision and
control of PCSO. The Facilities shall
enable PCSO to computerize the entire
gaming system.
The Proponent is expected to formulate
and design consumer-oriented Master
Games Plan suited to the marketplace,
especially geared to Filipino gaming
habits and preferences. In addition, the
Master Games Plan is expected to
include a Product Plan for each game
and explain how each will be introduced
into the market. This will be an integral
part of the Development Plan which
PCSO will require from the Proponent.
xxx xxx xxx
The Proponent is expected to provide
upgrades to modernize the entire gaming
system over the life ofthe lease contract.
The Proponent is expected to provide
technology transfer to PCSO technical
personnel. 4
7. GENERAL GUIDELINES FOR
PROPONENTS
xxx xxx xxx
Finally, the Proponent must be able to
stand the acid test of proving that it is an
entity able to take on the role of
responsible maintainer of the on-line
lottery system, and able to achieve
PSCO's goal of formalizing an on-line
lottery system to achieve its mandated
objective. 5
xxx xxx xxx
16. DEFINITION OF TERMS
Facilities: All capital equipment,
computers, terminals, software,
nationwide telecommunication network,
ticket sales offices, furnishings, and
fixtures; printing costs; cost of salaries
and wages; advertising and promotion
expenses; maintenance costs;
expansion and replacement costs;
security and insurance, and all other
related expenses needed to operate
nationwide on-line lottery system.6
Considering the above citizenship requirement, the
PGMC claims that the Berjaya Group "undertook to
reduce its equity stakes in PGMC to 40%," by selling 35%
out of the original 75% foreign stockholdings to local
investors.
On 15 August 1993, PGMC submitted its bid to the
PCSO.7
The bids were evaluated by the Special Pre-Qualification
Bids and Awards Committee (SPBAC) for the on-line
lottery and its Bid Report was thereafter submitted to the
Office of the President. 8 The submission was preceded
by complaints by the Committee's Chairperson, Dr. Mita
Pardo de Tavera. 9
On 21 October 1993, the Office of the President
announced that it had given the respondent PGMC the
go-signal to operate the country's on-line lottery system
and that the corresponding implementing contract would
be submitted not later than 8 November 1993 "for final
clearance and approval by the Chief Executive." 10 This
announcement was published in the Manila Standard,
Philippine Daily Inquirer, and the Manila Times on 29
October 1993. 11
On 4 November 1993, KILOSBAYAN sent an open letter
to Presidential Fidel V. Ramos strongly opposing the
setting up to the on-line lottery system on the basis of
serious moral and ethical considerations. 12
At the meeting of the Committee on Games and
Amusements of the Senate on 12 November 1993,
KILOSBAYAN reiterated its vigorous opposition to the on-
line lottery on account of its immorality and illegality. 13
On 19 November 1993, the media reported that despite
the opposition, "Malacañang will push through with the
operation of an on-line lottery system nationwide" and that
it is actually the respondent PCSO which will operate the
lottery while the winning corporate bidders are merely
"lessors." 14
On 1 December 1993, KILOSBAYAN requested copies of
all documents pertaining to the lottery award from
177
Executive Secretary Teofisto Guingona, Jr. In his answer
of 17 December 1993, the Executive Secretary informed
KILOSBAYAN that the requested documents would be
duly transmitted before the end of the month. 15. However,
on that same date, an agreement denominated as
"Contract of Lease" was finally executed by respondent
PCSO and respondent PGMC. 16 The President, per the
press statement issued by the Office of the President,
approved it on 20 December 1993.17
In view of their materiality and relevance, we quote the
following salient provisions of the Contract of Lease:
1. DEFINITIONS
The following words and terms shall have
the following respective meanings:
1.1 Rental Fee — Amount to be paid by
PCSO to the LESSOR as compensation
for the fulfillment of the obligations of the
LESSOR under this Contract, including,
but not limited to the lease of the
Facilities.
xxx xxx xxx
1.3 Facilities — All capital equipment,
computers, terminals, software (including
source codes for the On-Line Lottery
application software for the terminals,
telecommunications and central
systems), technology, intellectual
property rights, telecommunications
network, and furnishings and fixtures.
1.4 Maintenance and Other Costs — All
costs and expenses relating to printing,
manpower, salaries and wages,
advertising and promotion, maintenance,
expansion and replacement, security and
insurance, and all other related expenses
needed to operate an On-Line Lottery
System, which shall be for the account of
the LESSOR. All expenses relating to the
setting-up, operation and maintenance of
ticket sales offices of dealers and
retailers shall be borne by PCSO's
dealers and retailers.
1.5 Development Plan — The detailed
plan of all games, the marketing thereof,
number of players, value of winnings and
the logistics required to introduce the
games, including the Master Games Plan
as approved by PCSO, attached hereto
as Annex "A", modified as necessary by
the provisions of this Contract.
xxx xxx xxx
1.8 Escrow Deposit — The proposal
deposit in the sum of Three Hundred
Million Pesos (P300,000,000.00)
submitted by the LESSOR to PCSO
pursuant to the requirements of the
Request for Proposals.
2. SUBJECT MATTER OF THE LEASE
The LESSOR shall build, furnish and
maintain at its own expense and risk the
Facilities for the On-Line Lottery System
of PCSO in the Territory on an exclusive
basis. The LESSOR shall bear all
Maintenance and Other Costs as defined
herein.
xxx xxx xxx
3. RENTAL FEE
For and in consideration of the
performance by the LESSOR of its
obligations herein, PCSO shall pay
LESSOR a fixed Rental Fee equal to four
point nine percent (4.9%) of gross
receipts from ticket sales, payable net of
taxes required by law to be withheld, on
a semi-monthly basis. Goodwill,
franchise and similar fees shall belong to
PCSO.
4. LEASE PERIOD
The period of the lease shall commence
ninety (90) days from the date of
effectivity of this Contract and shall run
for a period of eight (8) years thereafter,
unless sooner terminated in accordance
with this Contract.
5. RIGHTS AND OBLIGATIONS OF
PCSO AS OPERATOR OF THE ON-
LINE LOTTERY SYSTEM
PCSO shall be the sole and individual
operator of the On-Line Lottery System.
Consequently:
5.1 PCSO shall have sole responsibility
to decide whether to implement, fully or
partially, the Master Games Plan of the
LESSOR. PCSO shall have the sole
responsibility to determine the time for
introducing new games to the market.
The Master Games Plan included in
Annex "A" hereof is hereby approved by
PCSO.
5.2 PCSO shall have control over
revenues and receipts of whatever
nature from the On-Line Lottery System.
After paying the Rental Fee to the
LESSOR, PCSO shall have exclusive
responsibility to determine the Revenue
Allocation Plan; Provided, that the same
shall be consistent with the requirement
of R.A. No. 1169, as amended, which
fixes a prize fund of fifty five percent
(55%) on the average.
5.3 PCSO shall have exclusive control
over the printing of tickets, including but
not limited to the design, text, and
contents thereof.
5.4 PCSO shall have sole responsibility
over the appointment of dealers or
retailers throughout the country. PCSO
178
shall appoint the dealers and retailers in
a timely manner with due regard to the
implementation timetable of the On-Line
Lottery System. Nothing herein shall
preclude the LESSOR from
recommending dealers or retailers for
appointment by PCSO, which shall act on
said recommendation within forty-eight
(48) hours.
5.5 PCSO shall designate the necessary
personnel to monitor and audit the daily
performance of the On-Line Lottery
System. For this purpose, PCSO
designees shall be given, free of charge,
suitable and adequate space, furniture
and fixtures, in all offices of the LESSOR,
including but not limited to its
headquarters, alternate site, regional and
area offices.
5.6 PCSO shall have the responsibility to
resolve, and exclusive jurisdiction over,
all matters involving the operation of the
On-Line Lottery System not otherwise
provided in this Contract.
5.7 PCSO shall promulgate procedural
and coordinating rules governing all
activities relating to the On-Line Lottery
System.
5.8 PCSO will be responsible for the
payment of prize monies, commissions to
agents and dealers, and taxes and levies
(if any) chargeable to the operator of the
On-Line Lottery System. The LESSOR
will bear all other Maintenance and Other
Costs, except as provided in Section 1.4.
5.9 PCSO shall assist the LESSOR in the
following:
5.9.1 Work permits for
the LESSOR's staff;
5.9.2 Approvals for
importation of the
Facilities;
5.9.3 Approvals and
consents for the On-Line
Lottery System; and
5.9.4 Business and
premises licenses for all
offices of the LESSOR
and licenses for the
telecommunications
network.
5.10 In the event that PCSO shall pre-
terminate this Contract or suspend the
operation of the On-Line Lottery System,
in breach of this Contract and through no
fault of the LESSOR, PCSO shall
promptly, and in any event not later than
sixty (60) days, reimburse the LESSOR
the amount of its total investment cost
associated with the On-Line Lottery
System, including but not limited to the
cost of the Facilities, and further
compensate the LESSOR for loss of
expected net profit after tax, computed
over the unexpired term of the lease.
6. DUTIES AND RESPONSIBILITIES
OF THE LESSOR
The LESSOR is one of not more than
three (3) lessors of similar facilities for the
nationwide On-Line Lottery System of
PCSO. It is understood that the rights of
the LESSOR are primarily those of a
lessor of the Facilities, and consequently,
all rights involving the business aspects
of the use of the Facilities are within the
jurisdiction of PCSO. During the term of
the lease, the LESSOR shall.
6.1 Maintain and preserve its corporate
existence, rights and privileges, and
conduct its business in an orderly,
efficient, and customary manner.
6.2 Maintain insurance coverage with
insurers acceptable to PCSO on all
Facilities.
6.3 Comply with all laws, statues, rules
and regulations, orders and directives,
obligations and duties by which it is
legally bound.
6.4 Duly pay and discharge all taxes,
assessments and government charges
now and hereafter imposed of whatever
nature that may be legally levied upon it.
6.5 Keep all the Facilities in fail safe
condition and, if necessary, upgrade,
replace and improve the Facilities from
time to time as new technology develops,
in order to make the On-Line Lottery
System more cost-effective and/or
competitive, and as may be required by
PCSO shall not impose such
requirements unreasonably nor
arbitrarily.
6.6 Provide PCSO with management
terminals which will allow real-time
monitoring of the On-Line Lottery
System.
6.7 Upon effectivity of this Contract,
commence the training of PCSO and
other local personnel and the transfer of
technology and expertise, such that at
the end of the term of this Contract,
PCSO will be able to effectively take-over
the Facilities and efficiently operate the
On-Line Lottery System.
6.8 Undertake a positive advertising and
promotions campaign for both
institutional and product lines without
engaging in negative advertising against
other lessors.
179
6.9 Bear all expenses and risks relating
to the Facilities including, but not limited
to, Maintenance and Other Costs and:
xxx xxx xxx
6.10 Bear all risks if the revenues from
ticket sales, on an annualized basis, are
insufficient to pay the entire prize money.
6.11 Be, and is hereby, authorized to
collect and retain for its own account, a
security deposit from dealers and
retailers, in an amount determined with
the approval of PCSO, in respect of
equipment supplied by the LESSOR.
PCSO's approval shall not be
unreasonably withheld.
xxx xxx xxx
6.12 Comply with procedural and
coordinating rules issued by PCSO.
7. REPRESENTATIONS AND
WARRANTIES
The LESSOR represents and warrants
that:
7.1 The LESSOR is corporation duly
organized and existing under the laws of
the Republic of the Philippines, at least
sixty percent (60%) of the outstanding
capital stock of which is owned by Filipino
shareholders. The minimum required
Filipino equity participation shall not be
impaired through voluntary or involuntary
transfer, disposition, or sale of shares of
stock by the present stockholders.
7.2 The LESSOR and its Affiliates have
the full corporate and legal power and
authority to own and operate their
properties and to carry on their business
in the place where such properties are
now or may be conducted. . . .
7.3 The LESSOR has or has access to all
the financing and funding requirements
to promptly and effectively carry out the
terms of this Contract. . . .
7.4 The LESSOR has or has access to all
the managerial and technical expertise to
promptly and effectively carry out the
terms of this Contract. . . .
xxx xxx xxx
10. TELECOMMUNICATIONS
NETWORK
The LESSOR shall establish a
telecommunications network that will
connect all municipalities and cities in the
Territory in accordance with, at the
LESSOR's option, either of the
LESSOR's proposals (or a combinations
of both such proposals) attached hereto
as Annex "B," and under the following
PCSO schedule:
xxx xxx xxx
PCSO may, at its option, require the
LESSOR to establish the
telecommunications network in
accordance with the above Timetable in
provinces where the LESSOR has not
yet installed terminals. Provided, that
such provinces have existing nodes.
Once a municipality or city is serviced by
land lines of a licensed public telephone
company, and such lines are connected
to Metro Manila, then the obligation of the
LESSOR to connect such municipality or
city through a telecommunications
network shall cease with respect to such
municipality or city. The voice facility will
cover the four offices of the Office of the
President, National Disaster Control
Coordinating Council, Philippine National
Police and the National Bureau of
Investigation, and each city and
municipality in the Territory except Metro
Manila, and those cities and
municipalities which have easy
telephone access from these four offices.
Voice calls from the four offices shall be
transmitted via radio or VSAT to the
remote municipalities which will be
connected to this voice facility through
wired network or by radio. The facility
shall be designed to handle four private
conversations at any one time.
xxx xxx xxx
13. STOCK DISPERSAL PLAN
Within two (2) years from the effectivity of
this Contract, the LESSOR shall cause
itself to be listed in the local stock
exchange and offer at least twenty five
percent (25%) of its equity to the public.
14. NON-COMPETITION
The LESSOR shall not, directly or
indirectly, undertake any activity or
business in competition with or adverse
to the On-Line Lottery System of PCSO
unless it obtains the latter's prior written
consent thereto.
15. HOLD HARMLESS CLAUSE
15.1 The LESSOR shall at all times
protect and defend, at its cost and
expense, PCSO from and against any
and all liabilities and claims for damages
and/or suits for or by reason of any
deaths of, or any injury or injuries to any
person or persons, or damages to
property of any kind whatsoever, caused
by the LESSOR, its subcontractors, its
authorized agents or employees, from
any cause or causes whatsoever.
180
15.2 The LESSOR hereby covenants
and agrees to indemnify and hold PCSO
harmless from all liabilities, charges,
expenses (including reasonable counsel
fees) and costs on account of or by
reason of any such death or deaths,
injury or injuries, liabilities, claims, suits
or losses caused by the LESSOR's fault
or negligence.
15.3 The LESSOR shall at all times
protect and defend, at its own cost and
expense, its title to the facilities and
PCSO's interest therein from and against
any and all claims for the duration of the
Contract until transfer to PCSO of
ownership of the serviceable Facilities.
16. SECURITY
16.1 To ensure faithful compliance by the
LESSOR with the terms of the Contract,
the LESSOR shall secure a Performance
Bond from a reputable insurance
company or companies acceptable to
PCSO.
16.2 The Performance Bond shall be in
the initial amount of Three Hundred
Million Pesos (P300,000,000.00), to its
U.S. dollar equivalent, and shall be
renewed to cover the duration of the
Contract. However, the Performance
Bond shall be reduced proportionately to
the percentage of unencumbered
terminals installed; Provided, that the
Performance Bond shall in no case be
less than One Hundred Fifty Million
Pesos (P150,000,000.00).
shall failure to comply persists. The
penalty shall be deducted by PCSO from
the rental fee.
xxx xxx xxx
20. OWNERSHIP OF THE FACILITIES
After expiration of the term of the lease
as provided in Section 4, the Facilities
directly required for the On-Line Lottery
System mentioned in Section 1.3 shall
automatically belong in full ownership to
PCSO without any further consideration
other than the Rental Fees already paid
during the effectivity of the lease.
21. TERMINATION OF THE LEASE
PCSO may terminate this Contract for
any breach of the material provisions of
this Contract, including the following:
21.1 The LESSOR is insolvent or
bankrupt or unable to pay its debts, stops
or suspends or threatens to stop or
suspend payment of all or a material part
of its debts, or proposes or makes a
general assignment or an arrangement
or compositions with or for the benefit of
its creditors; or
21.2 An order is made or an effective
resolution passed for the winding up or
dissolution of the LESSOR or when it
ceases or threatens to cease to carry on
all or a material part of its operations or
business; or

16.3 The LESSOR may at its option 21.3 Any material statement,
maintain its Escrow Deposit as the representation or warranty made or
Performance Bond. . . . furnished by the LESSOR proved to be
materially false or misleading;
17. PENALTIES
said termination to take
effect upon receipt of
17.1 Except as may be provided in
written notice of
Section 17.2, should the LESSOR fail to termination by the
take remedial measures within seven (7)
LESSOR and failure to
days, and rectify the breach within thirty
take remedial action
(30) days, from written notice by PCSO
within seven (7) days
of any wilfull or grossly negligent violation
and cure or remedy the
of the material terms and conditions of same within thirty (30)
this Contract, all unencumbered days from notice.
Facilities shall automatically become the
property of PCSO without consideration
and without need for further notice or Any suspension,
demand by PCSO. The Performance cancellation or
Bond shall likewise be forfeited in favor of termination of this
PCSO. Contract shall not relieve
the LESSOR of any
liability that may have
17.2 Should the LESSOR fail to comply
already accrued
with the terms of the Timetables provided
hereunder.
in Section 9 and 10, it shall be subject to
an initial Penalty of Twenty Thousand
Pesos (P20,000.00), per city or xxx xxx x
municipality per every month of delay; xx
Provided, that the Penalty shall increase,
every ninety (90) days, by the amount of Considering the denial by the Office of the President of its
Twenty Thousand Pesos (P20,000.00) protest and the statement of Assistant Executive
per city or municipality per month, whilst Secretary Renato Corona that "only a court injunction can
181
stop Malacañang," and the imminent implementation of establish and operate the on-line lotto
the Contract of Lease in February 1994, KILOSBAYAN, and telecommunications systems.18
with its co-petitioners, filed on 28 January 1994 this
petition. Petitioners submit that the PCSO cannot validly enter into
the assailed Contract of Lease with the PGMC because it
In support of the petition, the petitioners claim that: is an arrangement wherein the PCSO would hold and
conduct the on-line lottery system in "collaboration" or
. . . X X THE OFFICE OF "association" with the PGMC, in violation of Section 1(B)
THE PRESIDENT, of R.A. No. 1169, as amended by B.P. Blg. 42, which
ACTING THROUGH prohibits the PCSO from holding and conducting charity
RESPONDENTS sweepstakes races, lotteries, and other similar activities
EXECUTIVE "in collaboration, association or joint venture with any
SECRETARY AND/OR person, association, company or entity, foreign or
ASSISTANT domestic." Even granting arguendo that a lease of
EXECUTIVE facilities is not within the contemplation of "collaboration"
SECRETARY FOR or "association," an analysis, however, of the Contract of
LEGAL AFFAIRS, AND Lease clearly shows that there is a "collaboration,
THE PCSO GRAVELY association, or joint venture between respondents PCSO
ABUSE[D] THEIR and PGMC in the holding of the On-Line Lottery System,"
DISCRETION AND/OR and that there are terms and conditions of the Contract
FUNCTIONS "showing that respondent PGMC is the actual lotto
TANTAMOUNT TO operator and not respondent PCSO."19
LACK OF
JURISDICTION The petitioners also point out that paragraph 10 of the
AND/OR AUTHORITY Contract of Lease requires or authorizes PGMC to
IN RESPECTIVELY: (A) establish a telecommunications network that will connect
APPROVING THE all the municipalities and cities in the territory. However,
AWARD OF THE PGMC cannot do that because it has no franchise from
CONTRACT TO, AND Congress to construct, install, establish, or operate the
(B) ENTERING INTO network pursuant to Section 1 of Act No. 3846, as
THE SO-CALLED amended. Moreover, PGMC is a 75% foreign-owned or
"CONTRACT OF controlled corporation and cannot, therefore, be granted
LEASE" WITH, a franchise for that purpose because of Section 11, Article
RESPONDENT PGMC XII of the 1987 Constitution. Furthermore, since "the
FOR THE subscribed foreign capital" of the PGMC "comes to about
INSTALLATION, 75%, as shown by paragraph EIGHT of its Articles of
ESTABLISHMENT AND Incorporation," it cannot lawfully enter into the contract in
OPERATION OF THE question because all forms of gambling — and lottery is
ON-LINE LOTTERY one of them — are included in the so-called foreign
AND investments negative list under the Foreign Investments
TELECOMMUNICATIO Act (R.A. No. 7042) where only up to 40% foreign capital
N SYSTEMS is allowed. 20
REQUIRED AND/OR
AUTHORIZED UNDER Finally, the petitioners insist that the Articles of
THE SAID CONTRACT, Incorporation of PGMC do not authorize it to establish and
CONSIDERING THAT: operate an on-line lottery and telecommunications
systems.21
a) Under Section 1 of the Charter of the
PCSO, the PCSO is prohibited from Accordingly, the petitioners pray that we issue a
holding and conducting lotteries "in temporary restraining order and a writ of preliminary
collaboration, association or joint venture injunction commanding the respondents or any person
with any person, association, company or acting in their places or upon their instructions to cease
entity"; and desist from implementing the challenged Contract of
Lease and, after hearing the merits of the petition, that we
b) Under Act No. 3846 and established render judgment declaring the Contract of Lease void and
jurisprudence, a Congressional franchise without effect and making the injunction permanent. 22
is required before any person may be
allowed to establish and operate said We required the respondents to comment on the petition.
telecommunications system;
In its Comment filed on 1 March 1994, private respondent
c) Under Section 11, Article XII of the PGMC asserts that "(1) [it] is merely an independent
Constitution, a less than 60% Filipino- contractor for a piece of work, (i.e., the building and
owned and/or controlled corporation, like maintenance of a lottery system to be used by PCSO in
the PGMC, is disqualified from operating the operation of its lottery franchise); and (2) as such
a public service, like the said independent contractor, PGMC is not a co-operator of the
telecommunications system; and lottery franchise with PCSO, nor is PCSO sharing its
franchise, 'in collaboration, association or joint venture'
d) Respondent PGMC is not authorized with PGMC — as such statutory limitation is viewed from
by its charter and under the Foreign the context, intent, and spirit of Republic Act 1169, as
Investment Act (R.A. No. 7042) to install, amended by Batas Pambansa 42." It further claims that
as an independent contractor for a piece of work, it is
182
neither engaged in "gambling" nor in "public service"
relative to the telecommunications network, which the
petitioners even consider as an "indispensable
requirement" of an on-line lottery system. Finally, it states
that the execution and implementation of the contract
does not violate the Constitution and the laws; that the
issue on the "morality" of the lottery franchise granted to
the PCSO is political and not judicial or legal, which
should be ventilated in another forum; and that the
"petitioners do not appear to have the legal standing or
real interest in the subject contract and in obtaining the
reliefs sought." 23
In their Comment filed by the Office of the Solicitor
General, public respondents Executive Secretary Teofisto
Guingona, Jr., Assistant Executive Secretary Renato
Corona, and the PCSO maintain that the contract of lease
in question does not violate Section 1 of R.A. No. 1169,
as amended by B.P. Blg. 42, and that the petitioner's
interpretation of the phrase "in collaboration, association
or joint venture" in Section 1 is "much too narrow, strained
and utterly devoid of logic" for it "ignores the reality that
PCSO, as a corporate entity, is vested with the basic and
essential prerogative to enter into all kinds of transactions
or contracts as may be necessary for the attainment of its
purposes and objectives." What the PCSO charter "seeks
to prohibit is that arrangement akin to a "joint venture" or
partnership where there is "community of interest in the
business, sharing of profits and losses, and a mutual right
of control," a characteristic which does not obtain in a
contract of lease." With respect to the challenged
Contract of Lease, the "role of PGMC is limited to that of
a lessor of the facilities" for the on-line lottery system; in
"strict technical and legal sense," said contract "can be
categorized as a contract for a piece of work as defined in
Articles 1467, 1713 and 1644 of the Civil Code."
They further claim that the establishment of the
telecommunications system stipulated in the Contract of
Lease does not require a congressional franchise
because PGMC will not operate a public utility; moreover,
PGMC's "establishment of a telecommunications system
is not intended to establish a telecommunications
business," and it has been held that where the facilities
are operated "not for business purposes but for its own
use," a legislative franchise is not required before a
certificate of public convenience can be granted. 24 Even
granting arguendo that PGMC is a public utility, pursuant
to Albano S.
Reyes, 25 "it can establish a telecommunications system
even without a legislative franchise because not every
public utility is required to secure a legislative franchise
before it could establish, maintain, and operate the
service"; and, in any case, "PGMC's establishment of the
telecommunications system stipulated in its contract of
lease with PCSO falls within the exceptions under Section
1 of Act No. 3846 where a legislative franchise is not
necessary for the establishment of radio stations."
They also argue that the contract does not violate the
Foreign Investment Act of 1991; that the Articles of
Incorporation of PGMC authorize it to enter into the
Contract of Lease; and that the issues of "wisdom,
morality and propriety of acts of the executive department
are beyond the ambit of judicial review."
Finally, the public respondents allege that the petitioners
have no standing to maintain the instant suit, citing our
resolution in Valmonte vs. Philippine Charity
Sweepstakes Office. 26
Several parties filed motions to intervene as petitioners in
this case, 27 but only the motion of Senators Alberto
Romulo, Arturo Tolentino, Francisco Tatad, Gloria
Macapagal-Arroyo, Vicente Sotto III, John Osmeña,
Ramon Revilla, and Jose Lina 28 was granted, and the
respondents were required to comment on their petition in
intervention, which the public respondents and PGMC
did.
In the meantime, the petitioners filed with the Securities
and Exchange Commission on 29 March 1994 a petition
against PGMC for the nullification of the latter's General
Information Sheets. That case, however, has no bearing
in this petition.
On 11 April 1994, we heard the parties in oral arguments.
Thereafter, we resolved to consider the matter submitted
for resolution and pending resolution of the major issues
in this case, to issue a temporary restraining order
commanding the respondents or any person acting in
their place or upon their instructions to cease and desist
from implementing the challenged Contract of Lease.
In the deliberation on this case on 26 April 1994, we
resolved to consider only these issues: (a) the locus
standi of the petitioners, and (b) the legality and validity of
the Contract of Lease in the light of Section 1 of R.A. No.
1169, as amended by B.P. Blg. 42, which prohibits the
PCSO from holding and conducting lotteries "in
collaboration, association or joint venture with any person,
association, company or entity, whether domestic or
foreign." On the first issue, seven Justices voted to
sustain the locus standi of the petitioners, while six voted
not to. On the second issue, the seven Justices were of
the opinion that the Contract of Lease violates the
exception to Section 1(B) of R.A. No. 1169, as amended
by B.P. Blg. 42, and is, therefore, invalid and contrary to
law. The six Justices stated that they wished to express
no opinion thereon in view of their stand on the first issue.
The Chief Justice took no part because one of the
Directors of the PCSO is his brother-in-law.
This case was then assigned to this ponente for the
writing of the opinion of the Court.
The preliminary issue on the locus standi of the
petitioners should, indeed, be resolved in their favor. A
party's standing before this Court is a procedural
technicality which it may, in the exercise of its discretion,
set aside in view of the importance of the issues raised.
In the landmark Emergency Powers Cases, 29 this Court
brushed aside this technicality because "the
transcendental importance to the public of these cases
demands that they be settled promptly and definitely,
brushing aside, if we must, technicalities of procedure.
(Avelino vs. Cuenco, G.R. No. L-2821)." Insofar as
taxpayers' suits are concerned, this Court had declared
that it "is not devoid of discretion as to whether or not it
should be entertained," 30 or that it "enjoys an open
discretion to entertain the same or not." 31 In De La Llana
vs. Alba, 32 this Court declared:
1. The argument as to the lack of
standing of petitioners is easily resolved.
As far as Judge de la Llana is concerned,
he certainly falls within the principle set
forth in Justice Laurel's opinion in People
vs. Vera [65 Phil. 56 (1937)]. Thus: "The
unchallenged rule is that the person who
impugns the validity of a statute must
have a personal and substantial interest
183
 in the case such that he has sustained,
or will sustain, direct injury as a result of
its enforcement [Ibid, 89]. The other
petitioners as members of the bar and
officers of the court cannot be considered
as devoid of "any personal and
substantial interest" on the matter. There
is relevance to this excerpt from a
separate opinion in Aquino, Jr. v.
Commission on Elections [L-40004,
January 31, 1975, 62 SCRA 275]: "Then
there is the attack on the standing of
petitioners, as vindicating at most what
they consider a public right and not
protecting their rights as individuals. This
is to conjure the specter of the public right
dogma as an inhibition to parties intent
on keeping public officials staying on the
path of constitutionalism. As was so well
put by Jaffe; "The protection of private
rights is an essential constituent of public
interest and, conversely, without a well-
ordered state there could be no
enforcement of private rights. Private and
public interests are, both in a substantive
and procedural sense, aspects of the
totality of the legal order." Moreover,
petitioners have convincingly shown that
in their capacity as taxpayers, their
standing to sue has been amply
demonstrated. There would be a retreat
from the liberal approach followed
in Pascual v. Secretary of Public Works,
foreshadowed by the very decision
of People v. Vera where the doctrine was
first fully discussed, if we act differently
now. I do not think we are prepared to
take that step. Respondents, however,
would hard back to the American
Supreme Court doctrine in Mellon v.
Frothingham, with their claim that what
petitioners possess "is an interest which
is shared in common by other people and
is comparatively so minute and
indeterminate as to afford any basis and
assurance that the judicial process can
act on it." That is to speak in the language
of a bygone era, even in the United
States. For as Chief Justice Warren
clearly pointed out in the later case
of Flast v. Cohen, the barrier thus set up
if not breached has definitely been
lowered.
In Kapatiran ng mga Naglilingkod sa Pamahalaan ng
Pilipinas, Inc. vs. Tan,33 reiterated in Basco vs. Philippine
Amusements and Gaming Corporation,34 this Court
stated:
Objections to taxpayers' suits for lack of
sufficient personality standing or interest
are, however, in the main procedural
matters. Considering the importance to
the public of the cases at bar, and in
keeping with the Court's duty, under the
1987 Constitution, to determine whether
or not the other branches of government
have kept themselves within the limits of
the Constitution and the laws and that
they have not abused the discretion
given to them, this Court has brushed
aside technicalities of procedure and has
taken cognizance of these petitions.
and in Association of Small Landowners in the
Philippines, Inc. vs. Secretary of Agrarian Reform,35 it
declared:
With particular regard to the requirement
of proper party as applied in the cases
before us, we hold that the same is
satisfied by the petitioners and
intervenors because each of them has
sustained or is in danger of sustaining an
immediate injury as a result of the acts or
measures complained of. [Ex ParteLevitt,
303 US 633]. And even if, strictly
speaking, they are not covered by the
definition, it is still within the wide
discretion of the Court to waive the
requirement and so remove the
impediment to its addressing and
resolving the serious constitutional
questions raised.
In the first Emergency Powers Cases,
ordinary citizens and taxpayers were
allowed to question the constitutionality
of several executive orders issued by
President Quirino although they were
invoking only an indirect and general
interest shared in common with the
public. The Court dismissed the objective
that they were not proper parties and
ruled that the transcendental importance
to the public of these cases demands that
they be settled promptly and definitely,
brushing aside, if we must, technicalities
of procedure. We have since then
applied this exception in many other
cases. (Emphasis supplied)
In Daza vs. Singson, 36 this Court once more said:
. . . For another, we have early as in the
Emergency Powers Cases that where
serious constitutional questions are
involved, "the transcendental importance
to the public of these cases demands that
they be settled promptly and definitely,
brushing aside, if we must, technicalities
of procedure." The same policy has since
then been consistently followed by the
Court, as in Gonzales vs. Commission on
Elections [21 SCRA 774] . . .
The Federal Supreme Court of the United States of
America has also expressed its discretionary power to
liberalize the rule on locus standi. In United States vs.
Federal Power Commission and Virginia Rea Association
vs. Federal Power Commission,37 it held:
We hold that petitioners have standing.
Differences of view, however, preclude a
single opinion of the Court as to both
petitioners. It would not further
clarification of this complicated specialty
of federal jurisdiction, the solution of
whose problems is in any event more or
less determined by the specific
circumstances of individual situations, to
184
 set out the divergent grounds in support
of standing in these cases.
In line with the liberal policy of this Court on locus
standi, ordinary taxpayers, members of Congress, and
even association of planters, and non-profit civic
organizations were allowed to initiate and prosecute
actions before this Court to question the constitutionality
or validity of laws, acts, decisions, rulings, or orders of
various government agencies or instrumentalities. Among
such cases were those assailing the constitutionality of (a)
R.A. No. 3836 insofar as it allows retirement gratuity and
commutation of vacation and sick leave to Senators and
Representatives and to elective officials of both Houses
of Congress;38 (b) Executive Order No. 284, issued by
President Corazon C. Aquino on 25 July 1987, which
allowed members of the cabinet, their undersecretaries,
and assistant secretaries to hold other government offices
or positions; 39 (c) the automatic appropriation for debt
service in the General Appropriations Act; 40 (d) R.A. No.
7056 on the holding of desynchronized elections; 41 (d)
R.A. No. 1869 (the charter of the Philippine Amusement
and Gaming Corporation) on the ground that it is contrary
to morals, public policy, and order; 42 and (f) R.A. No.
6975, establishing the Philippine National
Police. 43
of qualified voters affected by the apportionment, and
petitioner alleging abuse of discretion and violation of the
Constitution by respondent."
We find the instant petition to be of transcendental
importance to the public. The issues it raised are of
paramount public interest and of a category even higher
than those involved in many of the aforecited cases. The
ramifications of such issues immeasurably affect the
social, economic, and moral well-being of the people even
in the remotest barangays of the country and the counter-
productive and retrogressive effects of the envisioned on-
line lottery system are as staggering as the billions in
pesos it is expected to raise. The legal standing then of
the petitioners deserves recognition and, in the exercise
of its sound discretion, this Court hereby brushes aside
the procedural barrier which the respondents tried to take
advantage of.
And now on the substantive issue.
Section 1 of R.A. No. 1169, as amending by B.P. Blg. 42,
prohibits the PCSO from holding and conducting lotteries
"in collaboration, association or joint venture with any
person, association, company or entity, whether domestic
or foreign." Section 1 provides:

Other cases where we have followed a liberal policy Sec. 1. The Philippine Charity
regarding locus standi include those attacking the validity Sweepstakes Office. — The Philippine
or legality of (a) an order allowing the importation of rice Charity Sweepstakes Office, hereinafter
in the light of the prohibition imposed by R.A. No.
designated the Office, shall be the
3452; 44 (b) P.D. Nos. 991 and 1033 insofar as they
principal government agency for raising
proposed amendments to the Constitution and P.D. No.
and providing for funds for health
1031 insofar as it directed the COMELEC to supervise,
programs, medical assistance and
control, hold, and conduct the referendum-plebiscite on services and charities of national
16 October 1976; 45(c) the bidding for the sale of the 3,179 character, and as such shall have the
square meters of land at Roppongi, Minato-ku, Tokyo,
general powers conferred in section
Japan; 46 (d) the approval without hearing by the Board of
thirteen of Act Numbered One thousand
Investments of the amended application of the Bataan
four hundred fifty-nine, as amended, and
Petrochemical Corporation to transfer the site of its plant
shall have the authority:
from Bataan to Batangas and the validity of such transfer
and the shift of feedstock from naphtha only to naphtha
and/or liquefied petroleum gas; 47 (e) the decisions, A. To hold and conduct
orders, rulings, and resolutions of the Executive charity sweepstakes
Secretary, Secretary of Finance, Commissioner of races, lotteries and other
Internal Revenue, Commissioner of Customs, and the similar activities, in such
Fiscal Incentives Review Board exempting the National frequency and manner,
Power Corporation from indirect tax and duties; 48 (f) the as shall be determined,
orders of the Energy Regulatory Board of 5 and 6 and subject to such rules
December 1990 on the ground that the hearings and regulations as shall
conducted on the second provisional increase in oil prices be promulgated by the
did not allow the petitioner substantial cross- Board of Directors.
examination; 49 (g) Executive Order No. 478 which levied
a special duty of P0.95 per liter or P151.05 per barrel of B. Subject to the
imported crude oil and P1.00 per liter of imported oil approval of the Minister
products; 50 (h) resolutions of the Commission on of Human Settlements,
Elections concerning the apportionment, by district, of the to engage in health and
number of elective members of Sanggunians; 51 and (i) welfare-related
memorandum orders issued by a Mayor affecting the investments,
Chief of Police of Pasay City.52 programs, projects and
activities which may be
In the 1975 case of Aquino vs. Commission on profit-oriented, by itself
Elections, 53 this Court, despite its unequivocal ruling that or in collaboration,
the petitioners therein had no personality to file the association or joint
petition, resolved nevertheless to pass upon the issues venture with any person,
raised because of the far-reaching implications of the association, company or
petition. We did no less in De Guia vs. entity, whether domestic
COMELEC 54 where, although we declared that De Guia or foreign, except for the
"does not appear to have locus standi, a standing in law, activities mentioned in
a personal or substantial interest," we brushed aside the the preceding
procedural infirmity "considering the importance of the paragraph (A), for the
issue involved, concerning as it does the political exercise purpose of providing for
185
 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
investment will not
compete with the private
sector in areas where
investments are
adequate as may be
determined by the
National Economic and
Development Authority.
(emphasis supplied)
The language of the section is indisputably clear that with
respect to its franchise or privilege "to hold and conduct
charity sweepstakes races, lotteries and other similar
activities," the PCSO cannot exercise it "in collaboration,
association or joint venture" with any other party. This is
the unequivocal meaning and import of the phrase
"except for the activities mentioned in the preceding
paragraph (A)," namely, "charity sweepstakes races,
lotteries and other similar activities."
B.P. Blg. 42 originated from Parliamentary Bill No. 622,
which was covered by Committee Report No. 103 as
reported out by the Committee on Socio-Economic
Planning and Development of the Interim Batasang
Pambansa. The original text of paragraph B, Section 1 of
Parliamentary Bill No. 622 reads as follows:
To engage in any and all investments
and related profit-oriented projects or
programs and activities by itself or in
collaboration, association or joint venture
with any person, association, company or
entity, whether domestic or foreign, for
the main purpose of raising funds for
health and medical assistance and
services and charitable grants. 55
During the period of committee amendments, the
Committee on Socio-Economic Planning and
Development, through Assemblyman Ronaldo B.
Zamora, introduced an amendment by substitution to the
said paragraph B such that, as amended, it should read
as follows:
Subject to the approval of the Minister of
Human Settlements, to engage in health-
oriented 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, 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. 56
Before the motion of Assemblyman Zamora for the
approval of the amendment could be acted upon,
Assemblyman Davide introduced an amendment to the
amendment:
MR. DAVIDE.
Mr. Speaker.
THE SPEAKER.
The gentleman from
Cebu is recognized.
MR. DAVIDE. May I introduce an
amendment to the committee
amendment? The amendment would be
to insert after "foreign" in the amendment
just read the following: EXCEPT FOR
THE ACTIVITY IN LETTER (A) ABOVE.
When it is joint venture or in collaboration
with any entity such collaboration or joint
venture must not include activity activity
letter (a) which is the holding and
conducting of sweepstakes races,
lotteries and other similar acts.
MR. ZAMORA.
We accept the amendment, Mr. Speaker.
MR. DAVIDE.
Thank you, Mr. Speaker.
THE SPEAKER.
Is there any objection to the amendment?
(Silence) The amendment, as amended,
is approved. 57
Further amendments to paragraph B were introduced and
approved. When Assemblyman Zamora read the final text
of paragraph B as further amended, the earlier approved
amendment of Assemblyman Davide became "EXCEPT
FOR THE ACTIVITIES MENTIONED IN PARAGRAPH
(A)"; and by virtue of the amendment introduced by
Assemblyman Emmanuel Pelaez, the word PRECEDING
was inserted before PARAGRAPH. Assemblyman Pelaez
introduced other amendments. Thereafter, the new
paragraph B was approved. 58
This is now paragraph B, Section 1 of R.A. No. 1169, as
amended by B.P. Blg. 42.
No interpretation of the said provision to relax or
circumvent the prohibition can be allowed since the
privilege to hold or conduct charity sweepstakes races,
lotteries, or other similar activities is a franchise granted
by the legislature to the PCSO. It is a settled rule that "in
all grants by the government to individuals or corporations
of rights, privileges and franchises, the words are to be
taken most strongly against the grantee .... [o]ne who
claims a franchise or privilege in derogation of the
common rights of the public must prove his title thereto by
a grant which is clearly and definitely expressed, and he
cannot enlarge it by equivocal or doubtful provisions or by
probable inferences. Whatever is not unequivocally
granted is withheld. Nothing passes by mere
implication." 59
In short then, by the exception explicitly made in
paragraph B, Section 1 of its charter, the PCSO cannot
186
share its franchise with another by way of collaboration,
association or joint venture. Neither can it assign, transfer,
or lease such franchise. It has been said that "the rights
and privileges conferred under a franchise may, without
doubt, be assigned or transferred when the grant is to the
grantee and assigns, or is authorized by statute. On the
other hand, the right of transfer or assignment may be
restricted by statute or the constitution, or be made
subject to the approval of the grantor or a governmental
agency, such as a public utilities commission, exception
that an existing right of assignment cannot be impaired by
subsequent legislation." 60
It may also be pointed out that the franchise granted to
the PCSO to hold and conduct lotteries allows it to hold
and conduct a species of gambling. It is settled that "a
statute which authorizes the carrying on of a gambling
activity or business should be strictly construed and every
reasonable doubt so resolved as to limit the powers and
rights claimed under its authority." 61
Does the challenged Contract of Lease violate or
contravene the exception in Section 1 of R.A. No. 1169,
as amended by B.P. Blg. 42, which prohibits the PCSO
from holding and conducting lotteries "in collaboration,
association or joint venture with" another?
We agree with the petitioners that it does, notwithstanding
its denomination or designation as a (Contract of Lease).
We are neither convinced nor moved or fazed by the
insistence and forceful arguments of the PGMC that it
does not because in reality it is only an independent
contractor for a piece of work, i.e., the building and
maintenance of a lottery system to be used by the PCSO
in the operation of its lottery franchise. Whether the
contract in question is one of lease or whether the PGMC
is merely an independent contractor should not be
decided on the basis of the title or designation of the
contract but by the intent of the parties, which may be
gathered from the provisions of the contract itself. Animus
hominis est anima scripti. The intention of the party is the
soul of the instrument. In order to give life or effect to an
instrument, it is essential to look to the intention of the
individual who executed it. 62 And, pursuant to Article
1371 of the Civil Code, "to determine the intention of the
contracting parties, their contemporaneous and
subsequent acts shall be principally considered." To put it
more bluntly, no one should be deceived by the title or
designation of a contract.
A careful analysis and evaluation of the provisions of the
contract and a consideration of the contemporaneous
acts of the PCSO and PGMC indubitably disclose that the
contract is not in reality a contract of lease under which
the PGMC is merely an independent contractor for a piece
of work, but one where the statutorily
proscribed collaboration or association, in the least,
or joint venture, at the most, exists between the
contracting parties. Collaboration is defined as the acts of
working together in a joint project. 63 Association means
the act of a number of persons in uniting together for some
special purpose or business. 64 Joint venture is defined as
an association of persons or companies jointly
undertaking some commercial enterprise; generally all
contribute assets and share risks. It requires a community
of interest in the performance of the subject matter, a right
to direct and govern the policy in connection therewith,
and duty, which may be altered by agreement to share
both in profit and
losses.65
The contemporaneous acts of the PCSO and the PGMC
reveal that the PCSO had neither funds of its own nor the
expertise to operate and manage an on-line lottery
system, and that although it wished to have the system, it
would have it "at no expense or risks to the government."
Because of these serious constraints and unwillingness
to bear expenses and assume risks, the PCSO was
candid enough to state in its RFP that it is seeking for "a
suitable contractor which shall build, at its own expense,
all the facilities needed to operate and maintain" the
system; exclusively bear "all capital, operating expenses
and expansion expenses and risks"; and submit "a
comprehensive nationwide lottery development plan . . .
which will include the game, the marketing of the games,
and the logistics to introduce the game to all the cities and
municipalities of the country within five (5) years"; and that
the operation of the on-line lottery system should be "at
no expense or risk to the government" — meaning itself,
since it is a government-owned and controlled agency.
The facilities referred to means "all capital equipment,
computers, terminals, software, nationwide
telecommunications network, ticket sales offices,
furnishings and fixtures, printing costs, costs of salaries
and wages, advertising and promotions expenses,
maintenance costs, expansion and replacement costs,
security and insurance, and all other related expenses
needed to operate a nationwide on-line lottery system."
In short, the only contribution the PCSO would have is its
franchise or authority to operate the on-line lottery
system; with the rest, including the risks of the business,
being borne by the proponent or bidder. It could be for this
reason that it warned that "the proponent must be able to
stand to the acid test of proving that it is an entity able to
take on the role of responsible maintainer of the on-line
lottery system." The PCSO, however, makes it clear in its
RFP that the proponent can propose a period of the
contract which shall not exceed fifteen years, during
which time it is assured of a "rental" which shall not
exceed 12% of gross receipts. As admitted by the PGMC,
upon learning of the PCSO's decision, the Berjaya Group
Berhad, with its affiliates, wanted to offer its services and
resources to the PCSO. Forthwith, it organized the PGMC
as "a medium through which the technical and
management services required for the project would be
offered and delivered to PCSO." 66
Undoubtedly, then, the Berjaya Group Berhad knew all
along that in connection with an on-line lottery system, the
PCSO had nothing but its franchise, which it solemnly
guaranteed it had in the General Information of the
RFP. 67Howsoever viewed then, from the very inception,
the PCSO and the PGMC mutually understood that any
arrangement between them would necessarily leave to
the PGMC the technical, operations, and
managementaspects of the on-line lottery system while
the PCSO would, primarily, provide the franchise. The
words Gaming andManagement in the corporate name of
respondent Philippine Gaming Management Corporation
could not have been conceived just for euphemistic
purposes. Of course, the RFP cannot substitute for the
Contract of Lease which was subsequently executed by
the PCSO and the PGMC. Nevertheless, the Contract of
Lease incorporates their intention and understanding.
The so-called Contract of Lease is not, therefore, what it
purports to be. Its denomination as such is a crafty device,
carefully conceived, to provide a built-in defense in the
event that the agreement is questioned as violative of the
exception in Section 1 (B) of the PCSO's charter. The
acuity or skill of its draftsmen to accomplish that purpose
easily manifests itself in the Contract of Lease. It is
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outstanding for its careful and meticulous drafting
designed to give an immediate impression that it is a
contract of lease. Yet, woven therein are provisions which
negate its title and betray the true intention of the parties
to be in or to have a joint venture for a period of eight
years in the operation and maintenance of the on-line
lottery system.
Consistent with the above observations on the RFP, the
PCSO has only its franchise to offer, while the PGMC
represents and warrants that it has access to all
managerial and technical expertise to promptly and
effectively carry out the terms of the contract. And, for a
period of eight years, the PGMC is under obligation to
keep all the Facilitiesin safe condition and if necessary,
upgrade, replace, and improve them from time to time as
new technology develops to make the on-line lottery
system more cost-effective and competitive; exclusively
bear all costs and expenses relating to the printing,
manpower, salaries and wages, advertising and
promotion, maintenance, expansion and replacement,
security and insurance, and all other related expenses
needed to operate the on-line lottery system; undertake a
positive advertising and promotions campaign for both
institutional and product lines without engaging in
negative advertising against other lessors; bear the
salaries and related costs of skilled and qualified
personnel for administrative and technical operations;
comply with procedural and coordinating rulesissued by
the PCSO; and to train PCSO and other local personnel
and to effect the transfer of technology and other
expertise, such that at the end of the term of the contract,
the PCSO will be able to effectively take over the Facilities
and efficiently operate the on-line lottery system. The
latter simply means that, indeed, the managers,
technicians or employees who shall operate the on-line
lottery system are not managers, technicians or
employees of the PCSO, but of the PGMC and that it is
only after the expiration of the contract that the PCSO will
operate the system. After eight years, the PCSO would
automatically become the owner of the Facilities without
any other further consideration.
For these reasons, too, the PGMC has the initial
prerogative to prepare the detailed plan of all games and
the marketing thereof, and determine the number of
players, value of winnings, and the logistics required to
introduce the games, including the Master Games Plan.
Of course, the PCSO has the reserved authority to
disapprove them. 68 And, while the PCSO has the sole
responsibility over the appointment of dealers and
retailers throughout the country, the PGMC may,
nevertheless, recommend for appointment dealers and
retailers which shall be acted upon by the PCSO within
forty-eight hours and collect and retain, for its own
account, a security deposit from dealers and retailers in
respect of equipment supplied by it.
This joint venture is further established by the following:
(a) Rent is defined in the lease contract as the amount to
be paid to the PGMC as compensation for the fulfillment
of its obligations under the contract, including, but not
limited to the lease of the Facilities. However, this rent is
not actually a fixed amount. Although it is stated to be
4.9% of gross receipts from ticket sales, payable net of
taxes required by law to be withheld, it may be drastically
reduced or, in extreme cases, nothing may be due or
demandable at all because the PGMC binds itself to "bear
all risks if the revenue from the ticket sales, on an
annualized basis, are insufficient to pay the entire prize
money." This risk-bearing provision is unusual in a lessor-
lessee relationship, but inherent in a joint venture.
(b) In the event of pre-termination of the contract by the
PCSO, or its suspension of operation of the on-line lottery
system in breach of the contract and through no fault of
the PGMC, the PCSO binds itself "to promptly, and in any
event not later than sixty (60) days, reimburse the Lessor
the amount of its total investment cost associated with the
On-Line Lottery System, including but not limited to the
cost of the Facilities, and further compensate the
LESSOR for loss of expected net profit after tax,
computed over the unexpired term of the lease." If the
contract were indeed one of lease, the payment of the
expected profits or rentals for the unexpired portion of the
term of the contract would be enough.
(c) The PGMC cannot "directly or indirectly undertake any
activity or business in competition with or adverse to the
On-Line Lottery System of PCSO unless it obtains the
latter's prior written consent." If the PGMC is engaged in
the business of leasing equipment and technology for an
on-line lottery system, we fail to see any acceptable
reason why it should allow a restriction on the pursuit of
such business.
(d) The PGMC shall provide the PCSO the audited Annual
Report sent to its stockholders, and within two years from
the effectivity of the contract, cause itself to be listed in
the local stock exchange and offer at least 25% of its
equity to the public. If the PGMC is merely a lessor, this
imposition is unreasonable and whimsical, and could only
be tied up to the fact that the PGMC will actually operate
and manage the system; hence, increasing public
participation in the corporation would enhance public
interest.
(e) The PGMC shall put up an Escrow Deposit of
P300,000,000.00 pursuant to the requirements of the
RFP, which it may, at its option, maintain as its initial
performance bond required to ensure its faithful
compliance with the terms of the contract.
(f) The PCSO shall designate the necessary personnel to
monitor and audit the daily performance of the on-line
lottery system; and promulgate procedural and
coordinating rules governing all activities relating to the
on-line lottery system. The first further confirms that it is
the PGMC which will operate the system and the PCSO
may, for the protection of its interest, monitor and audit
the daily performance of the system. The second admits
the coordinating and cooperative powers and functions of
the parties.
(g) The PCSO may validly terminate the contract if the
PGMC becomes insolvent or bankrupt or is unable to pay
its debts, or if it stops or suspends or threatens to stop or
suspend payment of all or a material part of its debts.
All of the foregoing unmistakably confirm the
indispensable role of the PGMC in the pursuit, operation,
conduct, and management of the On-Line Lottery System.
They exhibit and demonstrate the parties' indivisible
community of interest in the conception, birth and growth
of the on-line lottery, and, above all, in its profits, with each
having a right in the formulation and implementation of
policies related to the business and sharing, as well, in the
losses — with the PGMC bearing the greatest burden
because of its assumption of expenses and risks, and the
PCSO the least, because of its confessed unwillingness
to bear expenses and risks. In a manner of speaking,
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each is wed to the other for better or for worse. In the final
analysis, however, in the light of the PCSO's RFP and the
above highlighted provisions, as well as the "Hold
Harmless Clause" of the Contract of Lease, it is even safe
to conclude that the actual lessor in this case is the PCSO
and the subject matter thereof is its franchise to hold and
conduct lotteries since it is, in reality, the PGMC which
operates and manages the on-line lottery system for a
period of eight years.

We thus declare that the challenged Contract of Lease

violates the exception provided for in paragraph B,
Section 1 of R.A. No. 1169, as amended by B.P. Blg. 42,
and is, therefore, invalid for being contrary to law. This
conclusion renders unnecessary further discussion on the
other issues raised by the petitioners.

WHEREFORE, the instant petition is hereby GRANTED

and the challenged Contract of Lease executed on 17
December 1993 by respondent Philippine Charity
Sweepstakes Office (PCSO) and respondent Philippine
Gaming Management Corporation (PGMC) is hereby
DECLARED contrary to law and invalid.

The Temporary Restraining Order issued on 11 April 1994

is hereby MADE PERMANENT.

No pronouncement as to costs.

SO ORDERED.

Regalado, Romero and Bellosillo, JJ., concur.

Narvasa, C.J., took no part.

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